Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Jul. 01, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Blow & Drive Interlock Corp | |
Entity Central Index Key | 0001586495 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 31,350,683 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash | $ 42,124 | $ 31,874 |
Accounts receivable, net of allowance for doubtful accounts of $0 and $0 at September 30, 2018 and December 31, 2017, respectively | 5,355 | 28,916 |
Prepaid Expenses | 2,648 | 2,655 |
Total current assets | 50,127 | 63,445 |
Deposits | 5,131 | 5,131 |
Total assets | 55,258 | 68,576 |
Current Liabilities | ||
Accounts payable | 39,695 | |
Accrued expenses | 20,547 | 15,685 |
Accrued royalty payable | 254,711 | 179,993 |
Accrued interest | 135,233 | 35,460 |
Income taxes payable | 5,930 | 5,930 |
Deferred revenue | 115,551 | 184,378 |
Derivative liability | 18,287 | 12,302 |
Notes payable, net of debt discount of $7,548 and $18,729 at September 30, 2018 and December 31, 2017, respectively | 69,134 | 60,006 |
Notes payable - related party | 113,750 | 45,328 |
Convertible notes payable, net of debt discount of $5,124 and $0 at September 30, 2018 and December 31, 2017, respectively | 2,376 | 6,972 |
Total current liabilities | 735,519 | 585,749 |
Non-current Liabilities | ||
Notes payable, net of debt discount of $8,812 and $14,473 at September 30, 2018 and December 31, 2017, respectively | 16,182 | 21,274 |
Notes payable - related party | 1,251,250 | 839,306 |
Convertible notes payable, net of debt discount of $7,684 and $2,011 at September 30, 2018 and December 31, 2017, respectively | 12,316 | 3,517 |
Total non-current liabilities | 1,279,748 | 864,097 |
Total Liabilities | 2,015,267 | 1,449,846 |
Stockholders' Deficit | ||
Preferred stock, par value $0.001, 20,000,000 shares authorized, 1,000,000 and 1,000,000 shares issued or issuable and outstanding as of September 30, 2018 and December 31, 2017, respectively | 1,000 | 1,000 |
Common stock, par value $0.0001, 100,000,000 shares authorized, 31,611,785 and 26,223,834 shares issued or issuable and outstanding as of September 30, 2018 and December 31, 2017, respectively | 3,161 | 2,622 |
Additional paid-in capital | 3,485,203 | 2,911,753 |
Accumulated deficit | (5,449,373) | (4,296,645) |
Total stockholders' deficit | (1,960,009) | (1,381,270) |
Total liabilities and stockholders' equity (deficit) | $ 55,258 | $ 68,576 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts, current | $ 0 | $ 0 |
Notes payable, debt discount current | 7,548 | 18,729 |
Convertible notes payable, debt discount current | 5,124 | 0 |
Notes payable, debt discount noncurrent | 8,812 | 14,473 |
Convertible notes payable, debt discount noncurrent | $ 7,684 | $ 2,011 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | 1,000,000 | 1,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 31,611,785 | 26,223,834 |
Common stock, shares outstanding | 31,611,785 | 26,223,834 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Total revenues | $ 241,658 | $ 479,415 | $ 724,154 | $ 960,926 |
Total cost of revenue | 18,724 | 58,817 | 95,405 | 119,623 |
Gross profit | 222,934 | 420,598 | 628,749 | 841,303 |
Operating expenses | ||||
Payroll | 240,499 | 272,900 | 706,648 | 457,288 |
Professional fees | 26,175 | 16,603 | 114,230 | 93,505 |
General and administrative | 170,504 | 269,039 | 639,598 | 579,172 |
Depreciation | 90,512 | 234,654 | ||
Total operating expenses | 437,178 | 649,054 | 1,460,476 | 1,364,619 |
Loss from operations | (214,244) | (228,456) | (831,727) | (523,316) |
Other income (expense) | ||||
Interest expense, net | (119,028) | (145,740) | (329,586) | (440,538) |
Change in fair value of derivative liability | 5,093 | (6,474) | 9,385 | 11,018 |
Gain (loss) on extinguishment of debt | (305,000) | |||
Total other income (expenses) | (113,935) | (152,214) | (320,201) | (734,520) |
Loss before provision for income taxes | (328,179) | (380,670) | (1,151,928) | (1,257,836) |
Provision for income taxes | 800 | 1,600 | ||
Net loss | $ (328,179) | $ (380,760) | $ (1,152,728) | $ (1,259,436) |
Basic and Diluted Loss Per Common Share | $ (0.01) | $ (0.02) | $ (0.04) | $ (0.06) |
Basic and Diluted Weighted-Average Common Shares Outstanding | 31,205,429 | 22,856,861 | 29,152,045 | 21,922,340 |
Monitoring Revenues [Member] | ||||
Total revenues | $ 221,418 | $ 394,139 | $ 664,649 | $ 674,197 |
Total cost of revenue | 18,724 | 57,817 | 95,405 | 111,884 |
Distributorship Revenues [Member] | ||||
Total revenues | 20,240 | 85,286 | 59,505 | 286,729 |
Total cost of revenue | $ 1,000 | $ 7,739 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Series A Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Beginning Balance at Dec. 31, 2016 | $ 1,958 | $ 1,594,721 | $ (1,587,330) | $ 9,349 | |
Beginning Balance, shares at Dec. 31, 2016 | 19,575,605 | ||||
Shares issued for services | $ 3 | 13,910 | 13,913 | 13,913 | |
Shares issued for services, shares | 27,180 | ||||
Warrants issued for services | 278 | 278 | |||
Shares issued for cash | $ 374 | 652,725 | 653,099 | ||
Shares issued for cash, shares | 3,736,894 | ||||
Shares issued related to debt | $ 19 | 434,700 | 435,719 | ||
Shares issued related to debt, shares | 195,400 | ||||
Shares issued related to anti-dilution | $ 52 | (52) | |||
Shares issued related to anti-dilution, shares | 522,882 | ||||
Net loss | (1,259,436) | ||||
Ending Balance at Sep. 30, 2017 | (147,078) | ||||
Beginning Balance at Dec. 31, 2016 | $ 1,958 | 1,594,721 | (1,587,330) | 9,349 | |
Beginning Balance, shares at Dec. 31, 2016 | 19,575,605 | ||||
Shares issued for services | $ 3 | 13,910 | 13,913 | ||
Shares issued for services, shares | 27,180 | ||||
Warrants issued for services | 278 | 278 | |||
Shares issued for cash | $ 569 | 848,468 | 849,037 | ||
Shares issued for cash, shares | 5,686,656 | ||||
Shares issued related to debt | $ 1,000 | $ 18 | 454,450 | 455,468 | |
Shares issued related to debt, shares | 1,000,000 | 195,400 | |||
Shares issued related to anti-dilution | $ 74 | (74) | |||
Shares issued related to anti-dilution, shares | 739,253 | ||||
Other | |||||
Other, shares | (260) | ||||
Net loss | (2,709,315) | (2,709,315) | |||
Ending Balance at Dec. 31, 2017 | $ 1,000 | $ 2,622 | 2,911,753 | (4,296,645) | (1,381,270) |
Ending Balance, shares at Dec. 31, 2017 | 1,000,000 | 26,223,834 | |||
Shares issued for services | $ 48 | 110,153 | 110,201 | ||
Shares issued for services, shares | 476,000 | ||||
Shares issued for cash | $ 434 | 458,271 | 458,705 | ||
Shares issued for cash, shares | 4,340,883 | ||||
Shares issued related to anti-dilution | $ 54 | (54) | |||
Shares issued related to anti-dilution, shares | 538,256 | ||||
Conversion of debt to common stock | $ 3 | 5,080 | 5,083 | ||
Conversion of debt to common stock, shares | 32,812 | ||||
Net loss | (1,152,728) | (1,152,728) | |||
Ending Balance at Sep. 30, 2018 | $ 1,000 | $ 3,161 | $ 3,485,203 | $ (5,449,373) | $ (1,960,009) |
Ending Balance, shares at Sep. 30, 2018 | 1,000,000 | 31,611,785 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
Net loss | $ (328,179) | $ (380,760) | $ (1,152,728) | $ (1,259,436) | $ (2,709,315) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation | 90,512 | 234,654 | ||||
Loss on fixed assets disposals | 12,989 | |||||
Shares issued for services | 110,200 | 14,188 | ||||
Allowance for doubtful accounts | (26,541) | 5,412 | ||||
Loss on extinguishments of debt | 305,000 | $ (116,541) | ||||
Debt converted to common shares | 5,083 | |||||
Amortization of debt discount | 27,704 | 275,465 | ||||
Change in fair value of derivative liability | 6,474 | (9,385) | (11,019) | |||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | 50,102 | 6,760 | ||||
Prepaid expenses | 6 | 792 | ||||
Deposits | 1,123 | |||||
Accounts payable | (39,695) | 74,541 | ||||
Accrued expenses | 4,863 | 168,273 | ||||
Accrued interest | 99,773 | 30,968 | ||||
Deferred revenue | (68,827) | (64,274) | ||||
Accrued royalties payable | 74,718 | 25,136 | ||||
Net cash used in operating activities | (924,727) | (179,428) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||
Purchase of property and equipment | (817,026) | |||||
Deposits on units | 250,000 | |||||
Net cash used in investing activities | (567,026) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
Proceeds from issuances of notes payable | 21,600 | |||||
Principal payments of notes payable | (34,405) | (46,037) | ||||
Proceeds from issuance of convertible notes payable | 20,000 | |||||
Principal payments of convertible notes payable | (5,000) | |||||
Proceeds from issuances of related party notes payable | 600,127 | 195,400 | ||||
Principal payments of related party note payable | (126,050) | (87,947) | ||||
Proceeds from issuance of common stock | 458,705 | 653,099 | ||||
Net cash provided by financing activities | 934,977 | 714,515 | ||||
NET INCREASE (DECREASE) IN CASH | 10,250 | (31,939) | ||||
CASH - beginning of period | 31,874 | 116,309 | 116,309 | |||
CASH - end of period | $ 42,124 | $ 84,570 | 42,124 | 84,570 | $ 31,874 | $ 116,309 |
ADDITIONAL CASH FLOW INFORMATION | ||||||
Interest paid | 91,634 | 134,105 | ||||
Income taxes paid | ||||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||
Common stock and warrants issued for services | 110,200 | 14,188 | ||||
Preferred stock issued for debt reduction and services | $ 350,000 |
Organization and Nature of Busi
Organization and Nature of Business | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Business | Note 1 - Organization and Nature of Business Blow & Drive Interlock (“the Company”) was incorporated on July 2, 2013 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company markets and rents alcohol ignition interlock devices to DUI/DWI offenders as part of their mandatory court or motor vehicle department programs. The Company has approval for its device in the following states: California, Colorado, Kansas, New York, Tennessee, Arizona, Oregon, Kentucky, Oklahoma, Pennsylvania, and Texas. In 2015, the Company formed BDI Manufacturing, Inc., an Arizona corporation which is a 100% wholly owned subsidiary of Blow & Drive Interlock Corporation. The Company markets, installs and monitors a breath alcohol ignition interlock device (BAIID) called the BDI-747/1, which is a mechanism that is installed on the steering column of an automobile and into which a driver exhales. The device in turn provides a blood-alcohol concentration analysis. If the driver’s blood-alcohol content is higher than a certain pre-programmed limit, the device prevents the ignition from engaging and the automobile from starting. These devices are often required for use by DUI or DWI (“driving under the influence” or “driving while intoxicated”) offenders as part of a mandatory court or motor vehicle department program. The Company licenses the rights to third party distributors to promote the BDI-747/1 and provide services related to the device. The distributorships are for specific geographical areas (either entire states or certain counties within states). The Company currently has entered into six distributorship agreements. Under the distribution agreements the Company typically receives a onetime fee, and then is entitled to receive a per unit registration fee and a per unit monthly fee for each BDI-747/1 unit the distributor has in inventory or on the road beginning thirty (30) days after the distributor receives the unit. On December 31, 2018, Laurence Wainer, CEO of the Company, and The Doheny Group, a major note holder of the Company, reached an agreement in which Laurence Wainer sold 8,924,000 shares of common stock and 1,000,000 shares of preferred stock for a total of $30,000. Upon completion of the sale, David Haridim, managing member of The Doheny Group, assumed the position of CEO of Blow and Drive. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2 – Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles in the United States of America, and pursuant to the rules and regulations of the Securities and Exchange Commission and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company. Consolidation The accompanying consolidated financial statements include the results of operations of BDI Manufacturing (the Subsidiary). All material intercompany accounts and transactions between the Company and the Subsidiary have been eliminated in consolidation. Going Concern The Company’s unaudited condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. As of September 30, 2018, the Company had an accumulated deficit of $5,449,373. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease or reduce its operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company will continue to raise funds through the sale of its equity securities or issuance of notes payable to obtain additional operating capital. The Company is dependent upon its ability to, and will continue to attempt to, secure additional equity and/or debt financing until the Company can earn revenue and realize positive cash flow from its operations. There are no assurances that the Company will be successful in earning revenue and realizing positive cash flow from its operations. Without sufficient financing it would be unlikely that the Company will continue as a going concern. Based on the Company’s current rate of cash outflows, cash on hand and proceeds from the prior sale of equity securities and issuance of notes payable, management believes that its current cash will not be sufficient to meet the anticipated cash needs for working capital for the next 12 months. The Company’s plans with respect to its liquidity issues include, but are not limited to, the following: 1) Continue to issue restricted stock for compensation due to consultants and for its legacy accounts payable in lieu of cash payments; and 2) Seek additional capital to continue its operations as it rolls out its current products. The Company is currently evaluating additional debt or equity financing opportunities and may execute them when appropriate. However, there can be no assurances that the Company can consummate such a transaction or consummate a transaction at favorable pricing. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and achieve profitable operations. These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty. Restatements The Company has restated its September 30, 2017 financial statements. The original September 30, 2017 financial statements erroneously recognized the entire upfront fees from two of its independent distributors in revenue at the time the Company delivered the exclusive license to the distributors rather than over the term of the agreements (5 years). To correct that error, the Company has shown the portion of the upfront fees attributable to that period only. Reclassifications Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Revenue Recognition The Company recognizes revenue when earned and related costs of sales and expenses when incurred. The Company recognizes revenue in accordance with FASB ASC Topic 605-10-S99, Revenue Recognition, Overall, SEC Materials Monthly per unit fee revenue is earned and recognized over the term of the contract as support services are provided. Revenues from territory exclusivity are earned when there is persuasive evidence of an arrangement, delivery has occurred, the sales price has been determined and collectability has been reasonably assured. Deferred revenue Deferred revenue consists of customer orders paid in advance of the delivery of the order. Deferred revenue is classified as short-term as the typical order ships within approximately three weeks of placing the order. Deferred revenue is recognized as revenue when the product is shipped to the customer and all other revenue recognition criteria have been met. Advertising and Marketing Costs Advertising and marketing costs are recorded as general and administrative expenses when they are incurred. Advertising and marketing expenses were $81,652 and $139,811 for the nine months ended September 30, 2018 and 2017, respectively Accounts Receivable and Allowance for Doubtful Accounts The Company’s accounts receivable primarily consist of trade receivables. The Company records an allowance for doubtful accounts that is based on historical trends, customer knowledge, any known disputes, and the aging of the accounts receivable balances combined with management’s estimate of future potential recoverability. Receivables are written off against the allowance after all attempts to collect a receivable have failed. The Company believes its allowance for doubtful accounts as of September 30, 2018 and December 31, 2017 is adequate, but actual write-offs could exceed the recorded allowance. Royalty Accrual The Company entered into royalty agreement to be paid out in perpetuity based on number of units sold for specified product model in years 2018, 2017 and 2016 in connection with notes payable as discussed in Note 12. These estimates were performed at the inception for the notes to reflect the associated debt discount. The Company accruals royalties and is reduced by payments. Derivative Liability The Company applies the provisions of ASC Topic 815-40, Contracts in Entity’s Own Equity (“ASC Topic 815-40”), under which convertible instruments, which contain terms that protect holders from declines in the stock price, may not be exempt from derivative accounting treatment. As a result, embedded conversion options (whose exercise price is not fixed and determinable) in convertible debt (which is not conventionally convertible due to the exercise price not being fixed and determinable) are initially recorded as a liability and are revalued at fair value at each reporting date using the Black Sholes Model. The Company revalues these derivatives each quarter using the Black Sholes Model. The change in valuation is accounted for as a gain or loss in derivative liability. Convertible Debt and Warrants Issued with Convertible Debt Convertible debt is accounted for under the guidelines established by ASC 470, Debt with Conversion and Other Options Beneficial Conversion Features The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing employee options for purposes of ASC 718, Compensation – Stock Compensation For modifications of convertible debt, the Company records a modification that changes the fair value of an embedded conversion feature, including a BCF, as a debt discount which is then amortized to interest expense over the remaining life of the debt. If modification is considered substantial (i.e. greater than 10% of the carrying value of the debt), an extinguishment of debt is deemed to have occurred, resulting in the recognition of an extinguishment gain or loss. Fair Value of Financial Instruments The Company utilizes ASC 820-10, Fair Value Measurement and Disclosure, for valuing financial assets and liabilities measured on a recurring basis. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: Level 1. Observable inputs such as quoted prices in active markets; Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The table below describes the Company’s valuation of financial instruments using guidance from ASC 820-10: Fair Value Measurements Using Level 1 Level 2 Level 3 Balance December 31, 2017 $ - $ 12,302 $ - Additions to fair value of derivative liability - 15,370 - Change in fair value of derivative liability - (9385 ) - Balance September 30, 2018 (unaudited) $ - $ 18,287 $ - Net Income (Loss) Per Share Basic earnings per share is calculated by dividing income available to common stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share is computed using the weighted average number of common and dilutive common share equivalents outstanding during the period. Stock Based Compensation The Company recognizes stock-based compensation in accordance with FASB ASC Topic 718 Stock Compensation For non-employee stock-based compensation, the Company applies FASB ASC Topic 505 Equity-Based Payments to Non-Employees Related Parties Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company. Concentrations All of the Company’s ignition interlock devices are purchased from one supplier in China. The loss of this supplier could have a material impact on the Company’s ability to timely obtain additional units. For the nine months ended September 30, 2018, one distributor, licensed in four states, makes up approximately 89% percent of all revenues from distributors at September 30, 2018. The loss of this distributer would have a material impact on the Company’s revenues. Per an agreement dated January 21, 2018 that memorialized a September 30, 2017 oral agreement, the Company and its largest distributor cancelled their distributorship agreement dated September 5, 2015. See Note 18 below. Income Taxes The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company also follows ASC 740-10-25, which provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements in accordance with ASC Topic 740, “ Accounting for Income Taxes” Derivative Liabilities The Company assessed the classification of its derivative financial instruments as of March 31, 2018, which consist of convertible instruments and rights to shares of the Company’s common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815. ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as defined. Convertible Instruments The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for “Accounting for Derivative Instruments and Hedging Activities”. ASC 815-40 provides that, among other things, generally, if an event is not within the entity’s control or could require net cash settlement, then the contract shall be classified as an asset or a liability. Recently Issued Accounting Pronouncements In March 2018 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-05, Income Taxes (Topic 740). In November 2017, the FASB issued ASU No. 2017-14, Income Statement-Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606). In September 2017, the FASB issued ASU No. 2017-13, Revenue Recognition, Revenue from Contracts with Customers, Leases. In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share; Distinguishing Liabilities from Equity; Derivatives and Hedging; Accounting for Certain Financial Instruments with Down Round Features; Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. In October 2016, the FASB issued ASU No. 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows; Classification of Certain Cash Receipts and Cash Payments. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers. Revenue from Contracts with Customers. In February 2016, the FASB issued ASU No. 2016-2, Leases. |
Restatements
Restatements | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Restatements | Note 3 - Restatements Below are the restated September 30, 2017 financial statements. The original June 30, 2018 financial statements erroneously recognized the entire upfront fees from two of its independent distributors in revenue at the time the Company delivered the exclusive license to the distributors rather than over the term of the agreements (5 years). To correct that error, the Company has shown the portion of the upfront fees attributable to that period only. Blow & Drive Interlock Corporation Consolidated Balance Sheet September 30, 2017 as filed adjustment revised September 30, 2017 (unaudited) (unaudited) (unaudited) Assets Current Assets Cash $ 84,370 $ 84,370 Accounts receivable, net 39,069 39,069 Prepaid Expenses 1,569 1,569 Inventories 10,650 10,650 Total Current Assets 135,658 - 135,658 Other Assets Deposits 5,131 5,131 Furniture and equipment 925,728 925,728 Total Assets $ 1,066,517 $ - $ 1,066,517 Liabilities and Stockholders’ Deficit Current Liabilities Accounts payable $ 102,791 $ 102,791 Accrued expenses 235,398 235,398 Accrued royalty payable 145,317 145,317 Accrued interest 41,078 41,078 Income taxes payable 5,929 5,929 Deferred revenue 91,057 7,000 98,057 Derivative liability 62,537 62,537 Notes payable, net of debt discount of $22,431 154,069 154,069 Notes payable - related party, current portion - - Convertible notes payable, net of debt discount of $3,115 54,385 54,385 Royalty notes payable, net of debt discount of $29,393 892 892 Total Current Liabilities 893,453 7,000 900,453 Long term liabilities Notes payable, net of debt discount of $46,750 148,250 148,250 Notes payable - related party - - Royalty notes payable, net of debt discount of $353,894 163,106 163,106 Accrued royalties payable 1,786 1,786 Total Liabilities 1,206,595 7,000 1,213,595 Stockholders’ Equity (Deficit) Preferred stock, $0.001 par value, 20,000,000 shares authorized, 1,000,000 issued 1,000 1,000 Common stock, $0.0001 par value, 100,000,000 shares authorized, 24,057,961 outstanding 2,406 2,406 Additional paid-in capital 2,696,281 2,696,281 Accumulated deficit (2,839,765 ) (7,000 ) (2,846,765 ) Total Stockholder’s Equity (Deficit) (140,078 ) (7,000 ) (147,078 ) Total Liabilities and Stockholders’ Equity (Deficit) $ 1,066,517 $ - $ 1,066,517 Blow & Drive Interlock Corporation Consolidated Statements of Operations (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2017 as filed adjustment revised 2017 2017 as filed adjustment revised 2017 Monitoring revenue $ 394,139 $ 394,139 $ 674,197 $ 674,197 Distributorship revenue 42,276 43,000 85,276 237,729 49,000 286,729 Total revenue 436,415 43,000 479,415 911,926 49,000 960,926 Monitoring cost of revenue 57,817 57,817 111,884 111,884 Distributorship cost of revenue 1,000 1,000 7,739 7,739 Total cost of revenue 58,817 - 58,817 119,623 - 119,623 Gross profit 377,598 43,000 420,598 792,303 49,000 841,303 Operating expenses Payroll 272,900 272,900 457,288 457,288 Professional fees 16,603 16,603 93,505 93,505 General and administrative expenses 269,039 269,039 579,172 579,172 Depreciation 90,512 90,512 234,654 234,654 Total operating expenses 649,054 - 649,054 1,364,619 - 1,364,619 Loss from operations (271,456 ) 43,000 (228,456 ) (572,316 ) 49,000 (523,316 ) Other income (expense) Interest expense (145,740 ) (145,740 ) (440,538 ) (440,538 ) Change in fair value of derivative liability (6,474 ) (6,474 ) 11,018 11,018 Loss on extinguishment of debt - - (305,000 ) (305,000 ) Total other income (expense) (152,214 ) - (152,214 ) (734,520 ) - (734,520 ) Loss before provision for income taxes (423,670 ) 43,000 (380,670 ) (1,306,836 ) 49,000 (1,257,836 ) Provision for income taxes - - 1,600 1,600 Net loss $ (423,670 ) $ 43,000 $ (380,670 ) $ (1,308,436 ) $ 49,000 $ (1,259,436 ) Basic and diluted loss per common share $ (0.02 ) $ (0.02 ) $ (0.06 ) $ (0.06 ) Weighted average number of common shares outstanding - basic and diluted 22,856,861 22,856,861 21,922,340 21,922,340 Blow & Drive Interlock Corporation Consolidated Statement of Cash Flows (unaudited) Nine Months Ended September 30, 2017 as filed adjustment revised 2017 Cash flows from operating activities: Net loss $ (1,308,436 ) $ 49,000 $ (1,259,436 ) Adjustments to reconcile from net loss to net cash used in operating activities Depreciation and amortization 234,654 234,654 Loss on fixed assets disposals 12,989 12,989 Shares issued for services 14,188 14,188 Allowance for doubtful accounts 5,412 5,412 Loss on extinguishment of debt 305,000 305,000 Amortization of debt discount 275,465 275,465 Change in fair value of derivative liability (11,019 ) (11,019 ) Changes in operating assets and liabilities Accounts receivable 6,760 6,760 Prepaid expenses 792 792 Deposits 1,123 1,123 Accounts payable 74,541 74,541 Accrued expenses 193,409 193,409 Accrued interest 30,968 30,968 Deferred revenue (15,274 ) (49,000 ) (64,274 ) Net cash used in operating activities (179,428 ) - (179,428 ) Cash flows from investing activities: Purchase of property and equipment (817,026 ) (817,026 ) Deposits on units 250,000 250,000 Net cash used in investing activities (567,026 ) - (567,026 ) Cash flows from financing activities: Proceeds from notes payable 195,400 195,400 Repayments of notes payable (14,268 ) (14,268 ) Repayments of royalty notes payable (65,529 ) (65,529 ) Repayment of related party notes payable (54,187 ) (54,187 ) Proceeds from issuance of common stock 653,099 653,099 Net cash provided by financing activities 714,515 - 714,515 Net increase (decrease) in cash (31,939 ) - (31,939 ) Cash, beginning of period 116,309 116,309 Cash, end of period $ 84,370 $ - $ 84,370 Supplemental disclosure of cash information: Cash paid during the period for: Interest $ 134,105 $ 134,105 Income taxes $ - $ - Supplemental disclosure of non-cash investing and financing activities Common stock and warrants issued for services $ 14,188 $ 14,188 Establishment of debt discount for royalty notes $ - $ - Preferred stock issued for debt reduction and services $ 350,000 $ 350,000 Blow & Drive Interlock Corporation Consolidated Statement of Shareholders’ Equity (Deficit) (unaudited) Preferred Stock Common Stock Additional Paid-in Accumulated revised Accumulated Total Stockholders’ Equity Shares Amount Shares Amount Capital Deficit adjustment Deficit (Deficit) Balance December 31, 2016 - $ - 19,575,605 $ 1,958 $ 1,594,721 $ (1,531,330 ) $ (56,000 ) $ (1,587,330 ) $ 9,349 Shares issued for services - - 27,180 3 13,910 13,913 Warrants issued for services 278 278 Shares issued related to debt 1,000,000 1,000 195,400 19 434,700 435,719 Shares issued for cash - - 3,736,894 374 652,725 653,099 Shares issued related to anti-dilution - - 522,882 52 (52 ) - Net loss - - - - - (1,308,436 ) 49,000 (1,259,436 ) (1,259,436 ) Balance September 30, 2017 1,000,000 $ 1,000 24,057,961 $ 2,406 $ 2,696,282 $ (2,839,766 ) $ (7,000 ) $ (2,846,766 ) $ (147,078 ) |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 4 – Segment Reporting The Company has two reportable segments: (1) Monitoring and (2) Distributorships. Monitoring fees on Company installed units The Company rents units directly to customers and installs the units in the customer’s vehicles. The rental periods range from a few months to 2 years and include a combination of down payments made by the customer and monthly payments paid under the agreements with the Company. Revenue is recognized from these companies on the straight-line basis over the term of the agreement. Amounts collected in excess of those earned are classified as deferred revenue in the balance sheet, and amounts earned in excess of amounts collected are reflected in accounts receivable in the balance sheet at September 30, 2018 and December 31, 2017. Distributorships The Company enters into arrangements that include multiple deliverables, which typically consist of the sale of exclusive distributorship territory rights, startup supplies package, promotional material, three weeks of onsite training and ongoing monthly support services. The Company accounts for each material element within an arrangement with multiple deliverables as separate units of accounting. Revenue is allocated to each unit of accounting under the guidance of ASC Topic 605-25, Multiple-Element Revenue Arrangements, which provides criteria for separating consideration in multiple-deliverable arrangements by establishing a selling price hierarchy for determining the selling price of a deliverable. The selling price used for each deliverable is based on vendor-specific objective evidence (“VSOE”) if available, third-party evidence if VSOE is not available, or estimated selling price if neither VSOE nor third-party evidence is available. The Company is required to determine the best estimate of selling price in a manner that is consistent with that used to determine the price to sell the deliverable on a standalone basis. The Company generally does not separately sell distributorships or training on a standalone basis. Therefore, the Company does not have VSOE for the selling price of these units nor is third party evidence available and thus management uses its best estimate of selling prices in their allocation of revenue to each deliverable in the multiple element arrangement. The Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Segment gross profit (a): Monitoring $ 202,694 $ 336,322 $ 569,244 $ 562,313 Distributorships 20,240 84,276 59,505 278,990 Gross profit 222,934 420,598 628,749 841,303 Identifiable segment operating expenses (b): Monitoring - 86,543 - 143,955 Distributorships - 3,552 - 89,642 - 90,095 - 233,597 Identifiable segment operating income (c): Monitoring 202,694 249,779 569,244 418,358 Distributorships 20,240 80,724 59,505 189,348 222,934 330,503 628,749 607,706 Reconciliation of identifiable segment income to corporate income (d): Payroll 240,499 272,900 706,648 457,288 Professional fees 26,175 16,603 114,230 93,505 General and administrative expenses 170,504 269,039 639,598 579,172 Depreciation - 417 - 1,057 Interest expense 119,028 145,740 329,586 440,538 Change in fair value of derivative liability (5,093 ) 6,474 (9,385 ) (11,018 ) Loss on extinguishment of debt - - - 305,000 Loss before provision for income taxes (328,179 ) (380,670 ) (1,151,928 ) (1,257,836 ) Provision for income taxes - - 800 1,600 Net loss $ (328,179 ) $ (380,670 ) $ (1,152,728 ) $ (1,259,436 ) Total net property, plant, and equipment assets Monitoring $ - $ 562,542 Distributorships - 350,298 Corporate - 12,889 $ - $ 925,729 (a) Segment gross profit includes segment net sales less segment cost of sales (b) Identifiable segment operating expenses consists of identifiable depreciation expense (c) Identifiable segment operating incomes consists of segment gross profit less identifiable operating expense (d) General corporate expense consists of all other non-identifiable expenses |
Deposits
Deposits | 9 Months Ended |
Sep. 30, 2018 | |
Deposit Assets Disclosure [Abstract] | |
Deposits | Note 5 – Deposits Deposits consist of the following: September 30, 2018 December 31, 2017 Lease Deposits $ 5,131 $ 5,131 |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Note 6 – Accrued Expenses Accrued Expenses consist of the following: September 30, 2018 December 31, 2017 Accrued payroll and payroll taxes $ 6,141 $ 6,141 Deferred rent 5,306 4,945 Other accrued expenses 9,100 5,000 Total $ 20,547 $ 15,685 |
Deferred Revenue
Deferred Revenue | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Revenue Disclosure [Abstract] | |
Deferred Revenue | Note 7 - Deferred Revenue The Company classifies income as deferred until the terms of the contract or time frame have been met within the Company’s revenue recognition policy. As of September 30, 2018 and December 31, 2017, deferred revenue consists of the following: September 30, 2018 December 31, 2017 Monitoring deferred revenues $ 115,551 $ 177,878 Distributorship deferred revenues - 6,500 Total $ 115,551 $ 184,378 |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 8 – Notes Payable Notes payable consist of the following: As of September 30, 2018 As of December 31, 2017 Amount Discount Net Balance Amount Discount Net Balance January 2016 ($65,000) $ 940 $ - $ 940 $ 4,482 $ (3,889 ) $ 593 April 2016 ($50,000) - 50,000 - 50,000 50,000 (7,292 ) 42,708 September 2016 ($10,000) 10,000 - 10,000 10,000 - 10,000 December 2017 ($50,000) 40,736 (16,360 ) 24,376 50,000 (22,021 ) 27,979 Total notes payable 101,676 (16,360 ) 85,316 114,482 (33,202 ) 81,280 Less: non-current portion (24,994 ) 8,812 (16,182 ) (35,747 ) 14,473 (21,274 ) Notes payable, current portion $ 76,682 $ (7,548 ) $ 69,134 $ 78,735 $ (18,729 ) $ 60,006 January 2016 - $65,000 On January 20, 2016, the Company entered into a non-interest bearing note payable and royalty agreement with a third party. Under the note, the Company borrowed $65,000 and began to repay the principal amount at a rate of approximately $937 per month with escalations to approximately $3,531 per month as of February 2017 until the note is paid in full. In addition, starting in February 2018, the Company will pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers’ vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity. In connection with this note, the Company recorded a debt discount of $65,000 relating to the future royalty payments, to be amortized over the life of the note. On September 30, 2016, the Company entered into Amendment No. 1 to Royalty note #1 in order to remove a security interest in the Company’s assets to secure repayment of the original note and amend the royalty provisions of the original note to be $1 for each Device on the road beginning in the 25th month after the date of the original note. In connection with this amendment, the Company issued 425,000 shares of restricted common stock. Pursuant to ASC 470 this amendment is a deemed extinguishment of the debt and the resulting revised debt is set up as a new note. In connection therewith, the Company recorded a loss on extinguishment of $116,541 during the year ended December 31, 2016. Total interest expense was $0 and $0 for the nine months ended September 30, 2018 and 2017, respectively. April 2016 - $50,000 On March 30, 2016, the Company entered into a borrowing agreement with a third party. The note was for a principal balance of $50,000 and included 50,000 restricted common shares. The promissory note has a maturity date of June 30, 2018 and bears interest at 18% per annum. The purchaser did not sign the agreement nor deliver the proper consideration prior to March 31, 2016. The exchange of the $50,000 in cash consideration by the purchaser and the issuance of the 50,000 restricted common shares by the Company was made in conjunction with delivery of the signed purchase agreement and promissory note on April 5, 2016. The Company recorded a debt discount of $50,000 related to the relative fair value of the issued shares associated with the note to be amortized over the life of the note. Total interest expense was $6,750 and $6,750 for the nine months ended September 30, 2018 and 2017, respectively. September 2016 - $10,000 On September 23, 2016, the Company provided an agreement to a third party to obtain a $10,000 promissory note in exchange for 100,000 restricted common shares and $10,000 in cash. The promissory note had a maturity date of October 31, 2017 and bears interest at 24% per annum. On October 31, 2017, the note was amended to extend the maturity date to October 31, 2018. There are no other changes to the note. The Company recorded a debt discount of $10,000 related to the relative fair value of the issued shares associated with the note to be amortized over the life of the note. Total interest expense was $1,800 and $1,800 for the nine months ended September 30, 2018 and 2017, respectively. December 2017 - $50,000 On December 1, 2017, the Company provided an agreement to a third party to obtain a $50,000 promissory note in exchange for $50,000 in cash. The promissory note had a maturity date of December 1, 2020 and bears interest at 15% per annum. The note required total payments of $1,733 per month. The Company recorded a debt discount of $22,650 related to the value of the issued shares associated with the process of obtaining the note to be amortized over the life of the note. Total interest expense was $5,111 and $0 for the nine months ended September 30, 2018 and 2017, respectively. |
Notes Payable - Related Parties
Notes Payable - Related Parties | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable - Related Parties | Note 9 – Notes Payable – Related Parties Notes payable to related parties consist of the following: As of September 30, 2018 As of December 31, 2017 Amount Discount Replacement Net Balance Amount Discount Net Balance January 2016 ($55,000) $ - $ - $ - $ 5,923 $ (6,289 ) $ (366 ) November 2017 ($900,000) 765,000 - (765,000 ) - 885,000 - 885,000 February 2018 ($100,000) 100,000 - (100,000 ) - - - - March 2018 ($500,000) 500,000 - (500,000 ) - - - - August 2018 ($1,365,000) - - 1,365,000 1,365,000 - - - Total related party notes payable 1,365,000 - - 1,365,000 890,923 (6,289 ) 884,634 Less: non-current portion (1,115,000 ) - (136,250 ) (1,251,250 ) (839,306 ) - (839,306 ) Related party notes payable, current portion $ 250,000 $ - (136,250 ) $ 113,750 $ 51,617 $ (6,289 ) $ 45,328 January 2016 - $55,000 On March 29, 2016, the Company consummated a non-interest bearing note payable and royalty agreement with a relative of the CEO with terms almost identical to the note referenced above. Under the note, the Company borrowed $55,000 and began to repay the principal amount at a rate of approximately $937 per month with escalations to approximately $3,531 per month as of April 2017 until the note is paid in full. In addition, starting in February 2018, the Company will pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers’ vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity. In connection with this note, the Company recorded a debt discount of $55,000 relating to the future royalty payments, to be amortized over the life of the note. On September 30, 2016, the Company entered into Amendment No. 1 to Royalty note #2 to amend the royalty provisions of the original note to be $1 for each Device on the road beginning in the 25th month after the date of the Royalty note #2. In connection with this amendment, the Company issued 50,000 shares of restricted common stock and recorded an additional debt discount of $8,959. This amendment was accounted for as a debt modification pursuant to ASC 470. Total interest expense was $0 and $0 for the nine months ended September 30, 2018 and 2017, respectively. November 2017 - $900,000 On November 1, 2017, the Company entered into an agreement with a related third party to exchange the September 2016 $36,100 note, the September 2016 $192,000 note, the October 2016 $24,960 note, the November 2016 $5,040 note, the November 2016 $50,000 note, the November 2016 $325,000 note, the January 2017 $50,400 note, the February 2017 $70,000 note, and the March 2017 $75,000 note for a new promissory note for $900,000. The new promissory note also included accrued interest payable and payment of Company expenses. The term of the loan is sixty months and payments are to be $25,000 per month with $15,000 in principal payment and $10,000 in interest payment. The first payment is to be on December 1, 2017 and the final payment on November 1, 2022. On August 1, 2018, the Company entered into an agreement with a related party to replace the balance ($765,000) on the note, the February 2018 note, and the March 2018 note with a new note for $1,365,000. Total interest expense was $126,229 and $0 for the nine months ended September 30, 2018 and 2017, respectively. February 2018 - $100,000 On February 1, 2018, the Company entered into an agreement with a related third party to obtain a $100,000 promissory note in exchange for $100,000 cash. The note calls for a monthly fee of $2,500 and the principal is due February 1, 2019. On August 1, 2018, the Company entered into an agreement with a related party to replace the note, the March 2018 note, and the balance ($765,000) on the November 2017 note with a new note for $1,365,000. Total interest expense was $15,000 and $0 for the nine months ended September 30, 2018 and 2017, respectively. March 2018 - $500,000 On March 1, 2018, the Company entered into an agreement with a related third party to obtain a $500,000 promissory note in exchange for $500,000 cash. The note calls for a monthly fee of $12,500 per month for the first year, $12,000 per month for the second year, $11,500 for the third year, $11,000 for the fourth year, and $10,500 for the fifth year, and the principal is due March 1, 2023. On August 1, 2018, the Company entered into an agreement with a related party to replace the note, the February 2018 note, and the balance ($765,000) on the November 2017 note with a new note for $1,365,000. Total interest expense was $58,475 and $0 for the nine months ended September 30, 2018 and 2017, respectively. August 2018 - $1,365,000 On August 1, 2018, the Company entered into an agreement with a related third party to replace the balance ($765,000) on the November 2017 note, the February 2018 note ($100,000), and the March 2018 note ($500,000) with a new note for $1,365,000. The note calls for interest only payments of $20,000 per month for the first nine months, and then payments of $53,500 per month for principal and interest. After the forty-eight months, the principal will be paid in full. Total interest expense was $78,448 and $0 for the nine months ended September 30, 2018 and 2017, respectively. |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | Note 10 – Convertible Notes Payable Convertible notes payable consists of the following: As of September 30, 2018 As of December 31, 2017 Amount Discount Net Balance Amount Discount Net Balance August 2015 ($15,000) $ 7,500 $ - $ 7,500 $ 7,500 $ - $ 7,500 November 2017 ($5,000) - - - 5,000 (2,011 ) 2,989 March 2018 ($20,000) 20,000 (12,808 ) 7,192 - - - Total convertible notes payable 27,500 (12,808 ) 14,692 12,500 (2,011 ) 10,489 Less: non-current portion (20,000 ) 7,684 (12,316 ) (5,000 ) 1,483 (3,517 ) Convertible notes payable, current portion $ 7,500 $ (5,124 ) $ 2,376 $ 7,500 $ (528 ) $ 6,972 August 2015 - $15,000 On August 7, 2015, the Company entered into an agreement with a third party non-affiliate and issued a 7.5% interest bearing convertible debenture for $15,000 due on August 7, 2017, with conversion features commencing after 180 days following the date of the note. Payments of interest only were due monthly beginning September 2015. The loan is convertible at 70% of the average of the closing prices for the common stock during the five trading days prior to the conversion date. In connection with this Convertible note payable, the Company recorded a $5,770 discount on debt, related to the beneficial conversion feature of the note to be amortized over the life of the note or until the note is converted or repaid. This note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value (See Note 9). On May 6, 2016 the note holder elected to convert $7,500 in principal into 30,000 shares of common stock. The note is currently in default. In connection with the issuance of the August Convertible Note Payable, the Company issued a warrant on August 7, 2015 to purchase 30,000 shares of the Company’s common stock at a purchase price of $0.50 per share. The Black Scholes model was used in valuing the warrants in determining the relative fair value of the warrants issued in connection with the convertible note payable using the following inputs: Expected Term – 3 years, Expected Dividend Rate – 0%, Volatility – 100%, Risk Free Interest Rate -1.08%. The Company recorded an additional $4,873 discount on debt, related to the relative fair value of the warrants issued associated with the note to be amortized over the life of the note. Total interest expense was $422 and $422 for the nine months ended September 30, 2018 and 2017, respectively. November 2017 - $5,000 On November 1, 2017, the Company entered into an agreement with a non-affiliated shareholder and issued a 10% interest bearing convertible debenture for $5,000 due on October 27, 2020. Payments of interest only are due monthly beginning December 2017. The loan is convertible at 61% of the average of the closing prices for the common stock during the five trading days prior to the conversion date but may not be converted if such conversion would cause the holder to own more than 4.9% of outstanding common stock after giving effect to the conversion. In connection with this Convertible Note Payable, the Company recorded a $5,000 discount on debt (the total discount was $6,825, of which $1,825 was expensed), related to the beneficial conversion feature of the note to be amortized over the life of the note or until the note is converted or repaid. This note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value. In June 2018, the note and related accrued interest were converted to 32,812 shares of common stock. In connection with the issuance of the November convertible note payable, the Company issued a warrant to purchase 10,000 shares of common stock at an exercise price of $1.00 per share. The warrant has an exercise period of four years from the date of issuance. The Black Scholes model was used in valuing the warrants in determining the relative fair value of the warrants issued in connection with the convertible note payable using the following inputs: Expected Term – 4 years, Expected Dividend Rate – 0%, Volatility – 373%, Risk Free Interest Rate – 2.37%. The Company recorded an additional $2,099 discount on debt, related to the relative fair value of the warrants issued associated with the note to be amortized over the life of the note. Total interest expense was $250 and $0 for the nine months ended September 30, 2018 and 2017, respectively. March 2018 - $20,000 On March 9, 2018, the Company entered into an agreement with a non-affiliated shareholder and issued a 10% interest bearing convertible debenture for $20,000 due on March 9, 2021. Payments of interest is in cash for the first six months, thereafter, interest may be paid either in cash or common stock of the Company. The loan is convertible at 61% of the average of the closing prices for the common stock during the five trading days prior to the conversion date but may not be converted if such conversion would cause the holder to own more than 4.9% of outstanding common stock after giving effect to the conversion. In connection with this Convertible Note Payable, the Company recorded a $20,000 discount on debt (the total discount was $47,768, of which $27,768 was expensed), related to the beneficial conversion feature of the note to be amortized over the life of the note or until the note is converted or repaid. This note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value. As of September 30, 2018, this note has not been converted. Total interest expense was $1,126 and $0 for the nine months ended September 30, 2018 and 2017, respectively. |
Derivative Liabilities
Derivative Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | Note 11 – Derivative Liabilities Derivative liabilities consisted of the following: September 30, 2018 December 31, 2017 August 2015 - $15,000 convertible debt $ 3,599 $ 7,310 November 2017 - $5,000 convertible debt - 4,992 March 2018 - $20,000 convertible debt 14,688 - Total derivative liabilities $ 18,287 $ 12,302 The Company applies the provisions of ASC Topic 815-40, Contracts in Entity’s Own Equity (“ASC Topic 815-40”), under which convertible instruments, which contain terms that protect holders from declines in the stock price, may not be exempt from derivative accounting treatment. As a result, embedded conversion options (whose exercise price is not fixed and determinable) in convertible debt (which is not conventionally convertible due to the exercise price not being fixed and determinable) are initially recorded as a liability and are revalued at fair value at each reporting date using the Black Sholes Model. August 2015 Convertible Debt - $15,000 In August 2015, the Company entered into a $15,000 convertible note with variable conversion pricing. The following inputs were used within the Black Sholes Model to determine the initial relative fair values of the $15,000 convertible note with expected term of 1.58 years, expected dividend rate of 0%, volatility of 100% and risk free interest rate 0.61%. November 2017 Convertible Debt - $5,000 In November 2017, the Company entered into a $5,000 convertible note with variable conversion pricing. The following inputs were used within the Black Sholes Model to determine the initial relative fair values of the $5,000 convertible note with expected term of 3.00 years, expected dividend rate of 0%, volatility of 312% and risk free interest rate 2.37%. This note was paid in June 2018. March 2018 Convertible Debt - $20,000 In March 2018, the Company entered into a $20,000 convertible note with variable conversion pricing. The following inputs were used within a binomial model to determine the initial relative fair values of the $20,000 convertible note with expected term of 2.44 years, expected dividend rate of 0%, volatility of 160% and risk free interest rate 2.49%. The Company revalues these derivatives each quarter using the Black Sholes Model. The change in valuation is accounted for as a gain or loss in derivative liability. The following table describes the Derivative liability as of December 31, 2017 and September 30, 2018. Balance Balance at 12/31/17 Additions Changes at 09/30/18 August 2015 - $15,000 convertible debt $ 7,310 $ - $ (3,711 ) $ 3,599 November 2017 - $5,000 convertible debt 4,992 (4,992 ) - March 2018 - $20,000 convertible debt - 15,370 (682 ) 14,688 Total $ 12,302 $ 15,370 $ (9,385 ) $ 18,287 |
Accrued Royalties Payable
Accrued Royalties Payable | 9 Months Ended |
Sep. 30, 2018 | |
Accrued Royalties Payable | |
Accrued Royalties Payable | Note 12 – Accrued Royalties Payable The Company has estimated the royalties to be paid out in perpetuity under royalty agreements. The Company entered into royalty agreement as follows: ● January 2016 Royalty Agreement – Under the note payable and royalty agreements of $65,000, the Company is required to pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers’ vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity. ● March 2016 Royalty Agreement – On March 29, 2016, the Company entered into a royalty agreement with a relative of the CEO together with note payable of $55,000. Under the royalty agreement and starting February 2018, the Company is required to pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers’ vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity. ● September and November 2016 Royalty Agreements – The Company entered into royalty agreements on September 30, 2016 and November 4, 2016 with a related party in relation to notes payable of $192,000 and $325,000, respectively. Under the royalty agreements, the Company is required to pay a royalty fee of from $1 to $2 per month for every ignition interlock devise that the Company has on the road in customers’ vehicles, the amount depending on how many devices are installed. ● November 2017 Royalty Agreement – The Company entered into a royalty agreement with a related party on November 1, 2017 in relation to a note payable of $900,000. This note replaced the September and November 2016 Royalty Agreements. Under the royalty agreement, the Company is required to pay a royalty fee of from $1.50 to $3.00 per month for every ignition interlock devise that the Company has on the road in customers’ vehicles, the amount depending on how many devices are installed. Based on the royalty agreement, the Company had the following royalty accruals: September 30, 2018 December 31, 2017 January 2016 royalty agreement $ 113,941 $ 86,230 March 2016 royalty agreement 126,318 88,010 September and November 2016 royalty agreements (5,203 ) 5,753 November 2017 royalty agreement 8,530 - August 2018 royalty agreement 11,125 - Total accrued royalties $ 254,711 $ 179,993 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Note 13 – Stockholders’ Equity Preferred Stock The Company’s articles of incorporation authorize the Company to issue up to 20,000,000 preferred shares of $0.001 par value. Series A Preferred Stock The Company has been authorized to issue 1,000,000 shares of Series A Preferred Stock. The Series A shares have the following preferences: no dividend rights; no liquidation preference over the Company’s common stock; no conversion rights; no redemption rights; no call rights by the Company; each share of Series A Preferred stock will have one hundred (100) votes on all matters validly brought to the Company’s common stockholders During the three months ended March 31, 2017, the Company entered into a material definitive agreement to issue 1,000,000 shares of series A preferred stock to an officer and director of the Company with a preliminary estimated value of $350,000. As of September 30, 2018, the total number of preferred shares issued or issuable was 1,000,000. Common Stock The Company has authorized 100,000,000 shares of $.0001. Holders of common stock are entitled to one vote for each share held. There are no restrictions that limit the Company’s ability to pay dividends on its common stock, subject to the requirements of the Delaware Revised Statutes. The Company has not declared any dividends since incorporation. During the nine months ended September 30, 2018, the |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Warrants | Note 14 – Warrants The Company issued warrants in individual sales and in connection with common stock purchase agreements. The warrants have expiration dates ranging from three to four years from the date of grant and exercise prices ranging from $0.10 to $1.00. A summary of warrant activity for the periods presented is as follows: Weighted Average Warrants for Weighted Average Remaining Aggregate Common Shares Exercise Price Contractual Term Intrinsic Value Outstanding as of December 31, 2016 160,000 $ 0.53 1.97 - Granted 4,697,176 0.51 4.00 Exercised - - - - Forfeited, cancelled, expired - - - - Outstanding as of December 31, 2017 4,857,176 $ 0.51 3.19 412,864 Granted 930,410 1.35 4.00 - Exercised - - - - Forfeited, cancelled, expired - - - - Outstanding as of September 30, 2018 5,787,586 $ 0.60 2.59 - |
Income (Loss) Per Share
Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Share | Note 15 – Income (Loss) Per Share Net income (loss) per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. The following shares are not included in the computation of diluted income (loss) per share, because their inclusion would be anti-dilutive: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Preferred shares - - - - Convertible notes 155,190 375,082 155,190 375,082 Warrants 5,787,586 5,137,298 5,787,586 5,137,298 Options - - - - Total anti-dilutive weighted average shares 5,942,776 5,512,380 5,942,776 5,512,380 If all dilutive securities had been exercised at September 30, 2018, the total number of common shares outstanding would be as follows: Common Shares 31,611,785 Preferred Shares - Convertible notes 155,190 Warrants 5,787,586 Options - Total potential shares 37,554,561 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 16 – Commitments and Contingencies On December 1, 2016, the Company entered into a four-year lease with Cahuenga Management LLC for a storefront location at 15503 Cahuenga Blvd., North Hollywood, California 91601. Base rent under the lease is $2,200 per month, with an escalating provision up to $2,404 throughout the lease term. The rental agreement includes operating expenses such as common area maintenance, property taxes and insurance. On August 28, 2017, the Company entered into a one-year lease with B3 Investments, LLC for a storefront location at Suites D104 and D105, 2406 24 th Legal Proceedings In the ordinary course of business, the Company from time to time is involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon the Company’s financial condition and/or results of operations. However, in the opinion of management, other than as set forth herein, matters currently pending or threatened against the Company are not expected to have a material adverse effect on the Company’s financial position or results of operations. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 17 – Related Party Transactions The Company had the following related party transactions: Notes payable of $1,365,000 to the Doheny Group. 3,208,017 shares of common stock, of which 1,863,152 were granted to the Doheny Group in relation to notes payable and 1,294,865 were granted to the Doheny Group as anti-dilution shares. 50,000 warrants were granted to David Haridim. |
Settlement with Distributor
Settlement with Distributor | 9 Months Ended |
Sep. 30, 2018 | |
Settlement With Distributor | |
Settlement with Distributor | Note 18 – Settlement with Distributor On January 21, 2018, the Company and its major distributor memorialized a September 30, 2017 oral agreement that terminated their September 5, 2015 distributorship agreement. The distributor had failed to timely make required monthly payments. The Company agreed to not pursue amounts due it from the distributor. The Company has sent letters to all customers of the distributor and believes that it will retain most, if not all, customers. If customers are not retained, the customers will need to have the interlock device removed and returned to the Company. The Company had approximately 900 interlock units rented to the distributor. As of December 31, 2017, $35,979 in distributor revenue and accounts receivable were reversed out. As of October 1, 2017, the distributor became an employee of the Company and was to service the area that he had been a distributor of. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 19 – Subsequent Events The Company follows the guidance in FASB ASC Topic 855, Subsequent Events On October 4, 2018, Michael Wainer entered into a personal loan agreement with Kabbage for $72.800. Michael Wainer then lent $72,800 to the Company. The loan was for twelve months and loan fees and interest were $37,128. Payments were $11,527 per month for the first six months and $6,795 per month for the final six months. Payments were to be paid by the Company to Kabbage. An initial payment of $11,527 was made in December 2018. On December 31, 2018, Michael Wainer released the Company from payment of the loan. On October 11, 2018, the Company entered into a loan agreement with Forward Financing for $60,000. Total interest and fees on the loan were $18,600. Payments of $561.43 were automatically paid each business day starting October 15, 2018 and were to be for 140 days business days. On January 11, 2019, Forward Financing agreed to settle an outstanding balance of $49,580.64 for $30,805.64, On December 1, 2018, an addendum (addendum #4) was made to the November 1, 2016 loan agreement with The Doheny Group. A December 1, 2018 payment by the Company was not made and thus the Company was in default to the Doheny Group. Therefore, the royalty will become $5.00 per unit on all units in perpetuity, the loan amount has increased to $2,000,000, as of December 1, 2018 payment of $20,000 was not made and the loan amount became $2,020,000, a new monthly payment of $50,500 interest only will be due as of January 1, 2019, if the full $50,500 cannot be paid, then a partial payment will be made with the unpaid amount added to the principal, and a balloon payment of the balance of principal owed shall be made on December 1, 2023. On December 17, 2018, the Company entered into a loan agreement with The Doheny Group for $6,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $6,000 on December 17, 2019. On December 31, 2018, the Company entered into a loan agreement with The Doheny Group for $23,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $23,000 on December 31, 2019. On December 31, 2018, the Company reached a settlement with note holder Rafael Mavashev in which a $10,000 promissory note and accrued interest were settled for payment of $1,000. On December 31, 2018, the Company reached a settlement with note holder Edris Consulting in which a $65,000 royalty note and royalties owed were settled for payment of $3,000. On December 31, 2018, the Company reached a settlement with note holder Oren Azulay in which a $50,000 promissory note and accrued interest payable were settled for payment of $13,000. On December 31, 2018, Laurence Wainer, CEO of the Company, and The Doheny Group, a major note holder of the Company, reached an agreement in which Laurence Wainer sold 8,924,000 shares of common stock and 1,000,000 shares of preferred stock for a total of $30,000. Upon completion of the sale, David Haridim, managing member of The Doheny Group, assumed the position of CEO of Blow and Drive. On January 3, 2019, the Company entered into a loan agreement with the Doheny Group for $32,700. The note has no interest (0%), no monthly payments, and a balloon payment of $32,700 on January 3, 2020. On January 11, 2019, the Company entered into a loan agreement with the Doheny Group for $40,000. The note has no interest (0%), no monthly payments, and a balloon payment of $40,000 on January 11, 2020. On January 15, 2019, the Company entered into a loan agreement with the Doheny Group for $14,500. The note has no interest (0%), no monthly payments, and a balloon payment of $14,500 on January 15, 2020. On January 30, 2019, the Company reached a release of all claims with note holder Lucky Draw, LLC. The Company owed Lucky Draw a promissory note payable of $50,000 and accrued interest. On February 1, 2019, the Company entered into a loan agreement with the Doheny Group for $15,000. The note has no interest (0%), no monthly payments, and a balloon payment of $15,000 on February 1, 2020. On February 19, 2019, the Company entered into a loan agreement with The Doheny Group for $5,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $5,000 on February 19, 2020. On March 4, 2019, the Company entered into a loan agreement with The Doheny Group for $10,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $10,000 on March 4, 2020. On May 1, 2019, the Company entered into a loan agreement with The Doheny Group for $20,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $20,000 on May 1, 2020. On June 3, 2019, the Company entered into a loan agreement with The Doheny Group for $89,000. The loan has no interest (0%), no monthly payments, and a balloon payment of $89,000 on June 3, 2020. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles in the United States of America, and pursuant to the rules and regulations of the Securities and Exchange Commission and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company. |
Consolidation | Consolidation The accompanying consolidated financial statements include the results of operations of BDI Manufacturing (the Subsidiary). All material intercompany accounts and transactions between the Company and the Subsidiary have been eliminated in consolidation. |
Going Concern | Going Concern The Company’s unaudited condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. As of September 30, 2018, the Company had an accumulated deficit of $5,449,373. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease or reduce its operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company will continue to raise funds through the sale of its equity securities or issuance of notes payable to obtain additional operating capital. The Company is dependent upon its ability to, and will continue to attempt to, secure additional equity and/or debt financing until the Company can earn revenue and realize positive cash flow from its operations. There are no assurances that the Company will be successful in earning revenue and realizing positive cash flow from its operations. Without sufficient financing it would be unlikely that the Company will continue as a going concern. Based on the Company’s current rate of cash outflows, cash on hand and proceeds from the prior sale of equity securities and issuance of notes payable, management believes that its current cash will not be sufficient to meet the anticipated cash needs for working capital for the next 12 months. The Company’s plans with respect to its liquidity issues include, but are not limited to, the following: 1) Continue to issue restricted stock for compensation due to consultants and for its legacy accounts payable in lieu of cash payments; and 2) Seek additional capital to continue its operations as it rolls out its current products. The Company is currently evaluating additional debt or equity financing opportunities and may execute them when appropriate. However, there can be no assurances that the Company can consummate such a transaction or consummate a transaction at favorable pricing. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and achieve profitable operations. These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty. |
Restatements | Restatements The Company has restated its September 30, 2017 financial statements. The original September 30, 2017 financial statements erroneously recognized the entire upfront fees from two of its independent distributors in revenue at the time the Company delivered the exclusive license to the distributors rather than over the term of the agreements (5 years). To correct that error, the Company has shown the portion of the upfront fees attributable to that period only. |
Reclassifications | Reclassifications Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when earned and related costs of sales and expenses when incurred. The Company recognizes revenue in accordance with FASB ASC Topic 605-10-S99, Revenue Recognition, Overall, SEC Materials Monthly per unit fee revenue is earned and recognized over the term of the contract as support services are provided. Revenues from territory exclusivity are earned when there is persuasive evidence of an arrangement, delivery has occurred, the sales price has been determined and collectability has been reasonably assured. |
Deferred Revenue | Deferred revenue Deferred revenue consists of customer orders paid in advance of the delivery of the order. Deferred revenue is classified as short-term as the typical order ships within approximately three weeks of placing the order. Deferred revenue is recognized as revenue when the product is shipped to the customer and all other revenue recognition criteria have been met. |
Advertising and Marketing Costs | Advertising and Marketing Costs Advertising and marketing costs are recorded as general and administrative expenses when they are incurred. Advertising and marketing expenses were $81,652 and $139,811 for the nine months ended September 30, 2018 and 2017, respectively |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company’s accounts receivable primarily consist of trade receivables. The Company records an allowance for doubtful accounts that is based on historical trends, customer knowledge, any known disputes, and the aging of the accounts receivable balances combined with management’s estimate of future potential recoverability. Receivables are written off against the allowance after all attempts to collect a receivable have failed. The Company believes its allowance for doubtful accounts as of September 30, 2018 and December 31, 2017 is adequate, but actual write-offs could exceed the recorded allowance. |
Royalty Accrual | Royalty Accrual The Company entered into royalty agreement to be paid out in perpetuity based on number of units sold for specified product model in years 2018, 2017 and 2016 in connection with notes payable as discussed in Note 12. These estimates were performed at the inception for the notes to reflect the associated debt discount. The Company accruals royalties and is reduced by payments. |
Derivative Liability | Derivative Liability The Company applies the provisions of ASC Topic 815-40, Contracts in Entity’s Own Equity (“ASC Topic 815-40”), under which convertible instruments, which contain terms that protect holders from declines in the stock price, may not be exempt from derivative accounting treatment. As a result, embedded conversion options (whose exercise price is not fixed and determinable) in convertible debt (which is not conventionally convertible due to the exercise price not being fixed and determinable) are initially recorded as a liability and are revalued at fair value at each reporting date using the Black Sholes Model. The Company revalues these derivatives each quarter using the Black Sholes Model. The change in valuation is accounted for as a gain or loss in derivative liability. |
Convertible Debt and Warrants Issued with Convertible Debt | Convertible Debt and Warrants Issued with Convertible Debt Convertible debt is accounted for under the guidelines established by ASC 470, Debt with Conversion and Other Options Beneficial Conversion Features The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing employee options for purposes of ASC 718, Compensation – Stock Compensation For modifications of convertible debt, the Company records a modification that changes the fair value of an embedded conversion feature, including a BCF, as a debt discount which is then amortized to interest expense over the remaining life of the debt. If modification is considered substantial (i.e. greater than 10% of the carrying value of the debt), an extinguishment of debt is deemed to have occurred, resulting in the recognition of an extinguishment gain or loss. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company utilizes ASC 820-10, Fair Value Measurement and Disclosure, for valuing financial assets and liabilities measured on a recurring basis. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: Level 1. Observable inputs such as quoted prices in active markets; Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The table below describes the Company’s valuation of financial instruments using guidance from ASC 820-10: Fair Value Measurements Using Level 1 Level 2 Level 3 Balance December 31, 2017 $ - $ 12,302 $ - Additions to fair value of derivative liability - 15,370 - Change in fair value of derivative liability - (9385 ) - Balance September 30, 2018 (unaudited) $ - $ 18,287 $ - |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic earnings per share is calculated by dividing income available to common stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share is computed using the weighted average number of common and dilutive common share equivalents outstanding during the period. |
Stock Based Compensation | Stock Based Compensation The Company recognizes stock-based compensation in accordance with FASB ASC Topic 718 Stock Compensation For non-employee stock-based compensation, the Company applies FASB ASC Topic 505 Equity-Based Payments to Non-Employees |
Related Parties | Related Parties Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company. |
Concentrations | Concentrations All of the Company’s ignition interlock devices are purchased from one supplier in China. The loss of this supplier could have a material impact on the Company’s ability to timely obtain additional units. For the nine months ended September 30, 2018, one distributor, licensed in four states, makes up approximately 89% percent of all revenues from distributors at September 30, 2018. The loss of this distributer would have a material impact on the Company’s revenues. Per an agreement dated January 21, 2018 that memorialized a September 30, 2017 oral agreement, the Company and its largest distributor cancelled their distributorship agreement dated September 5, 2015. See Note 18 below. |
Income Taxes | Income Taxes The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company also follows ASC 740-10-25, which provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements in accordance with ASC Topic 740, “ Accounting for Income Taxes” |
Derivative Liabilities | Derivative Liabilities The Company assessed the classification of its derivative financial instruments as of March 31, 2018, which consist of convertible instruments and rights to shares of the Company’s common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815. ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as defined. |
Convertible Instruments | Convertible Instruments The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for “Accounting for Derivative Instruments and Hedging Activities”. ASC 815-40 provides that, among other things, generally, if an event is not within the entity’s control or could require net cash settlement, then the contract shall be classified as an asset or a liability. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In March 2018 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-05, Income Taxes (Topic 740). In November 2017, the FASB issued ASU No. 2017-14, Income Statement-Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606). In September 2017, the FASB issued ASU No. 2017-13, Revenue Recognition, Revenue from Contracts with Customers, Leases. In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share; Distinguishing Liabilities from Equity; Derivatives and Hedging; Accounting for Certain Financial Instruments with Down Round Features; Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. In October 2016, the FASB issued ASU No. 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows; Classification of Certain Cash Receipts and Cash Payments. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers. Revenue from Contracts with Customers. In February 2016, the FASB issued ASU No. 2016-2, Leases. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Financial Instruments Measured at Fair Value on Recurring Basis | The table below describes the Company’s valuation of financial instruments using guidance from ASC 820-10: Fair Value Measurements Using Level 1 Level 2 Level 3 Balance December 31, 2017 $ - $ 12,302 $ - Additions to fair value of derivative liability - 15,370 - Change in fair value of derivative liability - (9385 ) - Balance September 30, 2018 (unaudited) $ - $ 18,287 $ - |
Restatements (Tables)
Restatements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Restated Statements | Blow & Drive Interlock Corporation Consolidated Balance Sheet September 30, 2017 as filed adjustment revised September 30, 2017 (unaudited) (unaudited) (unaudited) Assets Current Assets Cash $ 84,370 $ 84,370 Accounts receivable, net 39,069 39,069 Prepaid Expenses 1,569 1,569 Inventories 10,650 10,650 Total Current Assets 135,658 - 135,658 Other Assets Deposits 5,131 5,131 Furniture and equipment 925,728 925,728 Total Assets $ 1,066,517 $ - $ 1,066,517 Liabilities and Stockholders’ Deficit Current Liabilities Accounts payable $ 102,791 $ 102,791 Accrued expenses 235,398 235,398 Accrued royalty payable 145,317 145,317 Accrued interest 41,078 41,078 Income taxes payable 5,929 5,929 Deferred revenue 91,057 7,000 98,057 Derivative liability 62,537 62,537 Notes payable, net of debt discount of $22,431 154,069 154,069 Notes payable - related party, current portion - - Convertible notes payable, net of debt discount of $3,115 54,385 54,385 Royalty notes payable, net of debt discount of $29,393 892 892 Total Current Liabilities 893,453 7,000 900,453 Long term liabilities Notes payable, net of debt discount of $46,750 148,250 148,250 Notes payable - related party - - Royalty notes payable, net of debt discount of $353,894 163,106 163,106 Accrued royalties payable 1,786 1,786 Total Liabilities 1,206,595 7,000 1,213,595 Stockholders’ Equity (Deficit) Preferred stock, $0.001 par value, 20,000,000 shares authorized, 1,000,000 issued 1,000 1,000 Common stock, $0.0001 par value, 100,000,000 shares authorized, 24,057,961 outstanding 2,406 2,406 Additional paid-in capital 2,696,281 2,696,281 Accumulated deficit (2,839,765 ) (7,000 ) (2,846,765 ) Total Stockholder’s Equity (Deficit) (140,078 ) (7,000 ) (147,078 ) Total Liabilities and Stockholders’ Equity (Deficit) $ 1,066,517 $ - $ 1,066,517 Blow & Drive Interlock Corporation Consolidated Statements of Operations (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2017 as filed adjustment revised 2017 2017 as filed adjustment revised 2017 Monitoring revenue $ 394,139 $ 394,139 $ 674,197 $ 674,197 Distributorship revenue 42,276 43,000 85,276 237,729 49,000 286,729 Total revenue 436,415 43,000 479,415 911,926 49,000 960,926 Monitoring cost of revenue 57,817 57,817 111,884 111,884 Distributorship cost of revenue 1,000 1,000 7,739 7,739 Total cost of revenue 58,817 - 58,817 119,623 - 119,623 Gross profit 377,598 43,000 420,598 792,303 49,000 841,303 Operating expenses Payroll 272,900 272,900 457,288 457,288 Professional fees 16,603 16,603 93,505 93,505 General and administrative expenses 269,039 269,039 579,172 579,172 Depreciation 90,512 90,512 234,654 234,654 Total operating expenses 649,054 - 649,054 1,364,619 - 1,364,619 Loss from operations (271,456 ) 43,000 (228,456 ) (572,316 ) 49,000 (523,316 ) Other income (expense) Interest expense (145,740 ) (145,740 ) (440,538 ) (440,538 ) Change in fair value of derivative liability (6,474 ) (6,474 ) 11,018 11,018 Loss on extinguishment of debt - - (305,000 ) (305,000 ) Total other income (expense) (152,214 ) - (152,214 ) (734,520 ) - (734,520 ) Loss before provision for income taxes (423,670 ) 43,000 (380,670 ) (1,306,836 ) 49,000 (1,257,836 ) Provision for income taxes - - 1,600 1,600 Net loss $ (423,670 ) $ 43,000 $ (380,670 ) $ (1,308,436 ) $ 49,000 $ (1,259,436 ) Basic and diluted loss per common share $ (0.02 ) $ (0.02 ) $ (0.06 ) $ (0.06 ) Weighted average number of common shares outstanding - basic and diluted 22,856,861 22,856,861 21,922,340 21,922,340 Blow & Drive Interlock Corporation Consolidated Statement of Cash Flows (unaudited) Nine Months Ended September 30, 2017 as filed adjustment revised 2017 Cash flows from operating activities: Net loss $ (1,308,436 ) $ 49,000 $ (1,259,436 ) Adjustments to reconcile from net loss to net cash used in operating activities Depreciation and amortization 234,654 234,654 Loss on fixed assets disposals 12,989 12,989 Shares issued for services 14,188 14,188 Allowance for doubtful accounts 5,412 5,412 Loss on extinguishment of debt 305,000 305,000 Amortization of debt discount 275,465 275,465 Change in fair value of derivative liability (11,019 ) (11,019 ) Changes in operating assets and liabilities Accounts receivable 6,760 6,760 Prepaid expenses 792 792 Deposits 1,123 1,123 Accounts payable 74,541 74,541 Accrued expenses 193,409 193,409 Accrued interest 30,968 30,968 Deferred revenue (15,274 ) (49,000 ) (64,274 ) Net cash used in operating activities (179,428 ) - (179,428 ) Cash flows from investing activities: Purchase of property and equipment (817,026 ) (817,026 ) Deposits on units 250,000 250,000 Net cash used in investing activities (567,026 ) - (567,026 ) Cash flows from financing activities: Proceeds from notes payable 195,400 195,400 Repayments of notes payable (14,268 ) (14,268 ) Repayments of royalty notes payable (65,529 ) (65,529 ) Repayment of related party notes payable (54,187 ) (54,187 ) Proceeds from issuance of common stock 653,099 653,099 Net cash provided by financing activities 714,515 - 714,515 Net increase (decrease) in cash (31,939 ) - (31,939 ) Cash, beginning of period 116,309 116,309 Cash, end of period $ 84,370 $ - $ 84,370 Supplemental disclosure of cash information: Cash paid during the period for: Interest $ 134,105 $ 134,105 Income taxes $ - $ - Supplemental disclosure of non-cash investing and financing activities Common stock and warrants issued for services $ 14,188 $ 14,188 Establishment of debt discount for royalty notes $ - $ - Preferred stock issued for debt reduction and services $ 350,000 $ 350,000 Blow & Drive Interlock Corporation Consolidated Statement of Shareholders’ Equity (Deficit) (unaudited) Preferred Stock Common Stock Additional Paid-in Accumulated revised Accumulated Total Stockholders’ Equity Shares Amount Shares Amount Capital Deficit adjustment Deficit (Deficit) Balance December 31, 2016 - $ - 19,575,605 $ 1,958 $ 1,594,721 $ (1,531,330 ) $ (56,000 ) $ (1,587,330 ) $ 9,349 Shares issued for services - - 27,180 3 13,910 13,913 Warrants issued for services 278 278 Shares issued related to debt 1,000,000 1,000 195,400 19 434,700 435,719 Shares issued for cash - - 3,736,894 374 652,725 653,099 Shares issued related to anti-dilution - - 522,882 52 (52 ) - Net loss - - - - - (1,308,436 ) 49,000 (1,259,436 ) (1,259,436 ) Balance September 30, 2017 1,000,000 $ 1,000 24,057,961 $ 2,406 $ 2,696,282 $ (2,839,766 ) $ (7,000 ) $ (2,846,766 ) $ (147,078 ) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Net Sales and Identifiable Operating Income by Segment | The Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Segment gross profit (a): Monitoring $ 202,694 $ 336,322 $ 569,244 $ 562,313 Distributorships 20,240 84,276 59,505 278,990 Gross profit 222,934 420,598 628,749 841,303 Identifiable segment operating expenses (b): Monitoring - 86,543 - 143,955 Distributorships - 3,552 - 89,642 - 90,095 - 233,597 Identifiable segment operating income (c): Monitoring 202,694 249,779 569,244 418,358 Distributorships 20,240 80,724 59,505 189,348 222,934 330,503 628,749 607,706 Reconciliation of identifiable segment income to corporate income (d): Payroll 240,499 272,900 706,648 457,288 Professional fees 26,175 16,603 114,230 93,505 General and administrative expenses 170,504 269,039 639,598 579,172 Depreciation - 417 - 1,057 Interest expense 119,028 145,740 329,586 440,538 Change in fair value of derivative liability (5,093 ) 6,474 (9,385 ) (11,018 ) Loss on extinguishment of debt - - - 305,000 Loss before provision for income taxes (328,179 ) (380,670 ) (1,151,928 ) (1,257,836 ) Provision for income taxes - - 800 1,600 Net loss $ (328,179 ) $ (380,670 ) $ (1,152,728 ) $ (1,259,436 ) Total net property, plant, and equipment assets Monitoring $ - $ 562,542 Distributorships - 350,298 Corporate - 12,889 $ - $ 925,729 (a) Segment gross profit includes segment net sales less segment cost of sales (b) Identifiable segment operating expenses consists of identifiable depreciation expense (c) Identifiable segment operating incomes consists of segment gross profit less identifiable operating expense (d) General corporate expense consists of all other non-identifiable expenses |
Deposits (Tables)
Deposits (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Deposit Assets Disclosure [Abstract] | |
Schedule of Deposits | Deposits consist of the following: September 30, 2018 December 31, 2017 Lease Deposits $ 5,131 $ 5,131 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expense | Accrued Expenses consist of the following: September 30, 2018 December 31, 2017 Accrued payroll and payroll taxes $ 6,141 $ 6,141 Deferred rent 5,306 4,945 Other accrued expenses 9,100 5,000 Total $ 20,547 $ 15,685 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Revenue Disclosure [Abstract] | |
Schedule of Deferred Revenue | As of September 30, 2018 and December 31, 2017, deferred revenue consists of the following: September 30, 2018 December 31, 2017 Monitoring deferred revenues $ 115,551 $ 177,878 Distributorship deferred revenues - 6,500 Total $ 115,551 $ 184,378 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable consist of the following: As of September 30, 2018 As of December 31, 2017 Amount Discount Net Balance Amount Discount Net Balance January 2016 ($65,000) $ 940 $ - $ 940 $ 4,482 $ (3,889 ) $ 593 April 2016 ($50,000) - 50,000 - 50,000 50,000 (7,292 ) 42,708 September 2016 ($10,000) 10,000 - 10,000 10,000 - 10,000 December 2017 ($50,000) 40,736 (16,360 ) 24,376 50,000 (22,021 ) 27,979 Total notes payable 101,676 (16,360 ) 85,316 114,482 (33,202 ) 81,280 Less: non-current portion (24,994 ) 8,812 (16,182 ) (35,747 ) 14,473 (21,274 ) Notes payable, current portion $ 76,682 $ (7,548 ) $ 69,134 $ 78,735 $ (18,729 ) $ 60,006 |
Notes Payable - Related Parti_2
Notes Payable - Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable Related Parties | Notes payable to related parties consist of the following: As of September 30, 2018 As of December 31, 2017 Amount Discount Replacement Net Balance Amount Discount Net Balance January 2016 ($55,000) $ - $ - $ - $ 5,923 $ (6,289 ) $ (366 ) November 2017 ($900,000) 765,000 - (765,000 ) - 885,000 - 885,000 February 2018 ($100,000) 100,000 - (100,000 ) - - - - March 2018 ($500,000) 500,000 - (500,000 ) - - - - August 2018 ($1,365,000) - - 1,365,000 1,365,000 - - - Total related party notes payable 1,365,000 - - 1,365,000 890,923 (6,289 ) 884,634 Less: non-current portion (1,115,000 ) - (136,250 ) (1,251,250 ) (839,306 ) - (839,306 ) Related party notes payable, current portion $ 250,000 $ - (136,250 ) $ 113,750 $ 51,617 $ (6,289 ) $ 45,328 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Table) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes Payable | Convertible notes payable consists of the following: As of September 30, 2018 As of December 31, 2017 Amount Discount Net Balance Amount Discount Net Balance August 2015 ($15,000) $ 7,500 $ - $ 7,500 $ 7,500 $ - $ 7,500 November 2017 ($5,000) - - - 5,000 (2,011 ) 2,989 March 2018 ($20,000) 20,000 (12,808 ) 7,192 - - - Total convertible notes payable 27,500 (12,808 ) 14,692 12,500 (2,011 ) 10,489 Less: non-current portion (20,000 ) 7,684 (12,316 ) (5,000 ) 1,483 (3,517 ) Convertible notes payable, current portion $ 7,500 $ (5,124 ) $ 2,376 $ 7,500 $ (528 ) $ 6,972 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liabilities | Derivative liabilities consisted of the following: September 30, 2018 December 31, 2017 August 2015 - $15,000 convertible debt $ 3,599 $ 7,310 November 2017 - $5,000 convertible debt - 4,992 March 2018 - $20,000 convertible debt 14,688 - Total derivative liabilities $ 18,287 $ 12,302 |
Schedule of Revalue of Derivatives Using Black Scholes Model | The following table describes the Derivative liability as of December 31, 2017 and September 30, 2018. Balance Balance at 12/31/17 Additions Changes at 09/30/18 August 2015 - $15,000 convertible debt $ 7,310 $ - $ (3,711 ) $ 3,599 November 2017 - $5,000 convertible debt 4,992 (4,992 ) - March 2018 - $20,000 convertible debt - 15,370 (682 ) 14,688 Total $ 12,302 $ 15,370 $ (9,385 ) $ 18,287 |
Accrued Royalties Payable (Tabl
Accrued Royalties Payable (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accrued Royalties Payable | |
Schedule of Accrued Royalties | Based on the royalty agreement, the Company had the following royalty accruals: September 30, 2018 December 31, 2017 January 2016 royalty agreement $ 113,941 $ 86,230 March 2016 royalty agreement 126,318 88,010 September and November 2016 royalty agreements (5,203 ) 5,753 November 2017 royalty agreement 8,530 - August 2018 royalty agreement 11,125 - Total accrued royalties $ 254,711 $ 179,993 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Warrant Activity | A summary of warrant activity for the periods presented is as follows: Weighted Average Warrants for Weighted Average Remaining Aggregate Common Shares Exercise Price Contractual Term Intrinsic Value Outstanding as of December 31, 2016 160,000 $ 0.53 1.97 - Granted 4,697,176 0.51 4.00 Exercised - - - - Forfeited, cancelled, expired - - - - Outstanding as of December 31, 2017 4,857,176 $ 0.51 3.19 412,864 Granted 930,410 1.35 4.00 - Exercised - - - - Forfeited, cancelled, expired - - - - Outstanding as of September 30, 2018 5,787,586 $ 0.60 2.59 - |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following shares are not included in the computation of diluted income (loss) per share, because their inclusion would be anti-dilutive: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Preferred shares - - - - Convertible notes 155,190 375,082 155,190 375,082 Warrants 5,787,586 5,137,298 5,787,586 5,137,298 Options - - - - Total anti-dilutive weighted average shares 5,942,776 5,512,380 5,942,776 5,512,380 |
Schedule of Dilutive Securities of Common Shares Outstanding | If all dilutive securities had been exercised at September 30, 2018, the total number of common shares outstanding would be as follows: Common Shares 31,611,785 Preferred Shares - Convertible notes 155,190 Warrants 5,787,586 Options - Total potential shares 37,554,561 |
Organization and Nature of Bu_2
Organization and Nature of Business (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2015 | |
December 31, 2018 [Member] | ||
Number of stock sold during period value | $ 30,000 | |
Common Stock [Member] | December 31, 2018 [Member] | ||
Number of stock sold during period | 8,924,000 | |
Preferred Stock [Member] | December 31, 2018 [Member] | ||
Number of stock sold during period | 1,000,000 | |
Arizona Corporation [Member] | ||
Ownership percent | 100.00% |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Accumulated deficit | $ (5,449,373) | $ (2,846,765) | $ (4,296,645) |
Term of agreement | 5 years | ||
Advertising and marketing expenses | $ 81,652 | $ 139,811 | |
Maximum percentage of carrying value of debt | 10.00% | ||
One Distributer [Member] | Revenue [Member] | |||
Concentration risk, percentage | 89.00% |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Financial Instruments Measured at Fair Value on Recurring Basis (Details) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Fair Value, Inputs, Level 1 [Member] | |
Balance, beginning | |
Additions to fair value of derivative liability | |
Change in fair value of derivative liability | |
Balance, ending | |
Fair Value, Inputs, Level 2 [Member] | |
Balance, beginning | 12,302 |
Additions to fair value of derivative liability | 15,370 |
Change in fair value of derivative liability | (9,385) |
Balance, ending | 18,287 |
Fair Value, Inputs, Level 3 [Member] | |
Balance, beginning | |
Additions to fair value of derivative liability | |
Change in fair value of derivative liability | |
Balance, ending |
Restatements (Details Narrative
Restatements (Details Narrative) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Term of agreements | 5 years |
Restatements - Schedule of Rest
Restatements - Schedule of Restated Statements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | |
Cash | $ 84,370 | $ 116,309 | $ 116,309 | $ 116,309 | $ 84,370 | $ 116,309 | ||
Accounts receivable, net | $ 5,355 | $ 5,355 | 28,916 | 39,069 | ||||
Prepaid Expenses | 2,648 | 2,648 | 2,655 | 1,569 | ||||
Inventories | 10,650 | |||||||
Total Current Assets | 50,127 | 50,127 | 63,445 | 135,658 | ||||
Deposits | 5,131 | 5,131 | 5,131 | 5,131 | ||||
Furniture and equipment | 925,728 | |||||||
Total Assets | 55,258 | 55,258 | 68,576 | 1,066,517 | ||||
Accounts payable | 39,695 | 102,791 | ||||||
Accrued expenses | 20,547 | 20,547 | 15,685 | 235,398 | ||||
Accrued royalty payable | 145,317 | |||||||
Accrued interest | 135,233 | 135,233 | 35,460 | 41,078 | ||||
Income taxes payable | 5,930 | 5,930 | 5,930 | 5,929 | ||||
Deferred revenue | 98,057 | |||||||
Derivative liability | 18,287 | 18,287 | 12,302 | 62,537 | ||||
Notes payable, net of debt discount of $22,431 | 69,134 | 69,134 | 60,006 | 154,069 | ||||
Notes payable - related party, current portion | 113,750 | 113,750 | 45,328 | |||||
Convertible notes payable, net of debt discount of $3,115 | 2,376 | 2,376 | 6,972 | 54,385 | ||||
Royalty notes payable, net of debt discount of $29,393 | 892 | |||||||
Total Current Liabilities | 735,519 | 735,519 | 585,749 | 900,453 | ||||
Notes payable, net of debt discount of $46,750 | 16,182 | 16,182 | 21,274 | 148,250 | ||||
Notes payable - related party | ||||||||
Royalty notes payable, net of debt discount of $353,894 | 163,106 | |||||||
Accrued royalties payable | 1,786 | |||||||
Total Liabilities | 2,015,267 | 2,015,267 | 1,449,846 | 1,213,595 | ||||
Preferred stock, $0.001 par value, 20,000,000 shares authorized, 1,000,000 issued | 1,000 | 1,000 | 1,000 | 1,000 | ||||
Common stock, $0.0001 par value, 100,000,000 shares authorized, 24,057,961 outstanding | 3,161 | 3,161 | 2,622 | 2,406 | ||||
Additional paid-in capital | 3,485,203 | 3,485,203 | 2,911,753 | 2,696,281 | ||||
Accumulated deficit | (5,449,373) | (5,449,373) | (4,296,645) | (2,846,765) | ||||
Total Stockholder's Equity (Deficit) | (1,960,009) | (1,960,009) | (1,381,270) | (147,078) | 9,349 | |||
Total Liabilities and Stockholders' Equity (Deficit) | 55,258 | 55,258 | 68,576 | 1,066,517 | ||||
Monitoring revenue | 394,139 | 674,197 | ||||||
Distributorship revenue | 85,276 | 286,729 | ||||||
Total revenue | 241,658 | 479,415 | 724,154 | 960,926 | ||||
Monitoring cost of revenue | 57,817 | 111,884 | ||||||
Distributorship cost of revenue | 1,000 | 7,739 | ||||||
Total cost of revenue | 18,724 | 58,817 | 95,405 | 119,623 | ||||
Gross profit | 222,934 | 420,598 | 628,749 | 841,303 | ||||
Payroll | 240,499 | 272,900 | 706,648 | 457,288 | ||||
Professional fees | 26,175 | 16,603 | 114,230 | 93,505 | ||||
General and administrative expenses | 170,504 | 269,039 | 639,598 | 579,172 | ||||
Depreciation | 90,512 | 234,654 | ||||||
Total operating expenses | 437,178 | 649,054 | 1,460,476 | 1,364,619 | ||||
Loss from operations | (214,244) | (228,456) | (831,727) | (523,316) | ||||
Interest expense | (119,028) | (145,740) | (329,586) | (440,538) | ||||
Change in fair value of derivative liability | (6,474) | 9,385 | 11,019 | |||||
Loss on extinguishment of debt | (305,000) | 116,541 | ||||||
Total other income (expense) | (113,935) | (152,214) | (320,201) | (734,520) | ||||
Loss before provision for income taxes | (380,670) | (1,257,836) | ||||||
Provision for income taxes | 800 | 1,600 | ||||||
Net loss | $ (328,179) | $ (380,760) | $ (1,152,728) | $ (1,259,436) | (2,709,315) | |||
Basic and diluted loss per common share | $ (0.01) | $ (0.02) | $ (0.04) | $ (0.06) | ||||
Weighted average number of common shares outstanding - basic and diluted | 31,205,429 | 22,856,861 | 29,152,045 | 21,922,340 | ||||
Loss on fixed assets disposals | $ 12,989 | |||||||
Shares issued for services | 110,200 | 14,188 | ||||||
Allowance for doubtful accounts | (26,541) | 5,412 | ||||||
Amortization of debt discount | 27,704 | 275,465 | ||||||
Accounts receivable | 50,102 | 6,760 | ||||||
Prepaid expenses | 6 | 792 | ||||||
Deposits | 1,123 | |||||||
Accounts payable | (39,695) | 74,541 | ||||||
Accrued expenses | 4,863 | 168,273 | ||||||
Accrued interest | 99,773 | 30,968 | ||||||
Deferred revenue | (68,827) | (64,274) | ||||||
Net cash used in operating activities | (924,727) | (179,428) | ||||||
Purchase of property and equipment | (817,026) | |||||||
Deposits on units | 250,000 | |||||||
Net cash used in investing activities | (567,026) | |||||||
Proceeds from notes payable | 21,600 | |||||||
Repayments of notes payable | (34,405) | (46,037) | ||||||
Repayments of royalty notes payable | (65,529) | |||||||
Repayment of related party notes payable | 126,050 | 87,947 | ||||||
Proceeds from issuance of common stock | 458,705 | 653,099 | ||||||
Net cash provided by financing activities | 934,977 | 714,515 | ||||||
Net increase (decrease) in cash | 10,250 | (31,939) | ||||||
Cash, beginning of period | 116,309 | 116,309 | ||||||
Cash, end of period | $ 84,370 | 84,370 | 116,309 | |||||
Interest | 91,634 | 134,105 | ||||||
Income taxes | ||||||||
Common stock and warrants issued for services | 110,200 | 14,188 | ||||||
Establishment of debt discount for royalty notes | ||||||||
Preferred stock issued for debt reduction and services | 350,000 | |||||||
Beginning balance | 9,349 | 9,349 | ||||||
Shares issued for services | 110,201 | 13,913 | 13,913 | |||||
Warrants issued for services | 278 | |||||||
Shares issued related to debt | 435,719 | 455,468 | ||||||
Shares issued for cash | 458,705 | 653,099 | 849,037 | |||||
Shares issued related to anti-dilution | ||||||||
Net loss | (1,259,436) | |||||||
Ending balance | (147,078) | (147,078) | 9,349 | |||||
Preferred Stock [Member] | ||||||||
Beginning balance | ||||||||
Beginning balance, shares | ||||||||
Shares issued for services | ||||||||
Shares issued for services, shares | ||||||||
Warrants issued for services | ||||||||
Shares issued related to debt | $ 1,000 | |||||||
Shares issued related to debt, shares | 1,000,000 | |||||||
Shares issued for cash | ||||||||
Shares issued for cash, shares | ||||||||
Shares issued related to anti-dilution | ||||||||
Net loss | ||||||||
Ending balance | $ 1,000 | $ 1,000 | ||||||
Ending balance, shares | 1,000,000 | 1,000,000 | ||||||
Common Stock [Member] | ||||||||
Total Stockholder's Equity (Deficit) | $ 3,161 | 3,161 | $ 2,622 | 1,958 | ||||
Net loss | ||||||||
Beginning balance | $ 1,958 | $ 1,958 | ||||||
Beginning balance, shares | 19,575,605 | 19,575,605 | ||||||
Shares issued for services | $ 48 | $ 3 | $ 3 | |||||
Shares issued for services, shares | 476,000 | 27,180 | 27,180 | |||||
Warrants issued for services | ||||||||
Shares issued related to debt | $ 19 | $ 18 | ||||||
Shares issued related to debt, shares | 195,400 | 195,400 | ||||||
Shares issued for cash | $ 434 | $ 374 | $ 569 | |||||
Shares issued for cash, shares | 4,340,883 | 3,736,894 | 5,686,656 | |||||
Shares issued related to anti-dilution | $ 54 | $ 52 | $ 74 | |||||
Shares issued related to anti-dilution, shares | 538,256 | 522,882 | 739,253 | |||||
Net loss | ||||||||
Ending balance | $ 2,406 | $ 2,406 | $ 1,958 | |||||
Ending balance, shares | 24,057,961 | 24,057,961 | 19,575,605 | |||||
Additional Paid-In Capital [Member] | ||||||||
Total Stockholder's Equity (Deficit) | 3,485,203 | $ 3,485,203 | $ 2,911,753 | 1,594,721 | ||||
Net loss | ||||||||
Beginning balance | $ 1,594,721 | 1,594,721 | ||||||
Shares issued for services | 110,153 | 13,910 | 13,910 | |||||
Warrants issued for services | 278 | 278 | ||||||
Shares issued related to debt | 434,700 | 454,450 | ||||||
Shares issued for cash | 458,271 | 652,725 | 848,468 | |||||
Shares issued related to anti-dilution | (54) | (52) | (74) | |||||
Net loss | ||||||||
Ending balance | $ 2,696,282 | 2,696,282 | $ 1,594,721 | |||||
Accumulated Deficit [Member] | ||||||||
Total Stockholder's Equity (Deficit) | $ (5,449,373) | (5,449,373) | (4,296,645) | (1,587,330) | ||||
Net loss | (1,152,728) | (2,709,315) | ||||||
Beginning balance | (1,587,330) | (1,587,330) | ||||||
Shares issued for services | 13,913 | |||||||
Warrants issued for services | 278 | |||||||
Shares issued related to debt | ||||||||
Shares issued for cash | ||||||||
Shares issued related to anti-dilution | ||||||||
Net loss | (1,259,436) | |||||||
Ending balance | (2,846,766) | (2,846,766) | (1,587,330) | |||||
Previously Reported [Member] | ||||||||
Cash | 84,370 | 116,309 | 116,309 | 116,309 | 84,370 | $ 116,309 | ||
Accounts receivable, net | 39,069 | |||||||
Prepaid Expenses | 1,569 | |||||||
Inventories | 10,650 | |||||||
Total Current Assets | 135,658 | |||||||
Deposits | 5,131 | |||||||
Furniture and equipment | 925,728 | |||||||
Total Assets | 1,066,517 | |||||||
Accounts payable | 102,791 | |||||||
Accrued expenses | 235,398 | |||||||
Accrued royalty payable | 145,317 | |||||||
Accrued interest | 41,078 | |||||||
Income taxes payable | 5,929 | |||||||
Deferred revenue | 91,057 | |||||||
Derivative liability | 62,537 | |||||||
Notes payable, net of debt discount of $22,431 | 154,069 | |||||||
Notes payable - related party, current portion | ||||||||
Convertible notes payable, net of debt discount of $3,115 | 54,385 | |||||||
Royalty notes payable, net of debt discount of $29,393 | 892 | |||||||
Total Current Liabilities | 893,453 | |||||||
Notes payable, net of debt discount of $46,750 | 148,250 | |||||||
Notes payable - related party | ||||||||
Royalty notes payable, net of debt discount of $353,894 | 163,106 | |||||||
Accrued royalties payable | 1,786 | |||||||
Total Liabilities | 1,206,595 | |||||||
Preferred stock, $0.001 par value, 20,000,000 shares authorized, 1,000,000 issued | 1,000 | |||||||
Common stock, $0.0001 par value, 100,000,000 shares authorized, 24,057,961 outstanding | 2,406 | |||||||
Additional paid-in capital | 2,696,281 | |||||||
Accumulated deficit | (2,839,765) | |||||||
Total Stockholder's Equity (Deficit) | (140,078) | |||||||
Total Liabilities and Stockholders' Equity (Deficit) | 1,066,517 | |||||||
Monitoring revenue | 394,139 | 674,197 | ||||||
Distributorship revenue | 42,276 | 237,729 | ||||||
Total revenue | 436,415 | 911,926 | ||||||
Monitoring cost of revenue | 57,817 | 111,884 | ||||||
Distributorship cost of revenue | 1,000 | 7,739 | ||||||
Total cost of revenue | 58,817 | 119,623 | ||||||
Gross profit | 377,598 | 792,303 | ||||||
Payroll | 272,900 | 457,288 | ||||||
Professional fees | 16,603 | 93,505 | ||||||
General and administrative expenses | 269,039 | 579,172 | ||||||
Depreciation | 90,512 | 234,654 | ||||||
Total operating expenses | 649,054 | 1,364,619 | ||||||
Loss from operations | (271,456) | (572,316) | ||||||
Interest expense | (145,740) | (440,538) | ||||||
Change in fair value of derivative liability | (6,474) | 11,018 | ||||||
Loss on extinguishment of debt | (305,000) | |||||||
Total other income (expense) | (152,214) | (734,520) | ||||||
Loss before provision for income taxes | (423,670) | (1,306,836) | ||||||
Provision for income taxes | 1,600 | |||||||
Net loss | $ (423,670) | $ (1,308,436) | ||||||
Basic and diluted loss per common share | $ (0.02) | $ (0.06) | ||||||
Weighted average number of common shares outstanding - basic and diluted | 22,856,861 | 21,922,340 | ||||||
Loss on fixed assets disposals | $ 12,989 | |||||||
Shares issued for services | 14,188 | |||||||
Allowance for doubtful accounts | 5,412 | |||||||
Amortization of debt discount | 275,465 | |||||||
Accounts receivable | 6,760 | |||||||
Prepaid expenses | 792 | |||||||
Deposits | 1,123 | |||||||
Accounts payable | 74,541 | |||||||
Accrued expenses | 193,409 | |||||||
Accrued interest | 30,968 | |||||||
Deferred revenue | (15,274) | |||||||
Net cash used in operating activities | (179,428) | |||||||
Purchase of property and equipment | (817,026) | |||||||
Deposits on units | 250,000 | |||||||
Net cash used in investing activities | (567,026) | |||||||
Proceeds from notes payable | 195,400 | |||||||
Repayments of notes payable | (14,268) | |||||||
Repayments of royalty notes payable | (65,529) | |||||||
Repayment of related party notes payable | (54,187) | |||||||
Proceeds from issuance of common stock | 653,099 | |||||||
Net cash provided by financing activities | 714,515 | |||||||
Net increase (decrease) in cash | (31,939) | |||||||
Cash, beginning of period | 116,309 | 116,309 | ||||||
Cash, end of period | $ 84,370 | 84,370 | 116,309 | |||||
Interest | 134,105 | |||||||
Income taxes | ||||||||
Common stock and warrants issued for services | 14,188 | |||||||
Establishment of debt discount for royalty notes | ||||||||
Preferred stock issued for debt reduction and services | 350,000 | |||||||
Previously Reported [Member] | Accumulated Deficit [Member] | ||||||||
Beginning balance | (1,531,330) | (1,531,330) | ||||||
Shares issued for services | ||||||||
Warrants issued for services | ||||||||
Shares issued related to debt | ||||||||
Shares issued for cash | ||||||||
Shares issued related to anti-dilution | ||||||||
Net loss | (1,308,436) | |||||||
Ending balance | (2,839,766) | (2,839,766) | (1,531,330) | |||||
Restatement Adjustment [Member] | ||||||||
Cash | ||||||||
Total Current Assets | ||||||||
Total Assets | ||||||||
Deferred revenue | 7,000 | |||||||
Total Current Liabilities | 7,000 | |||||||
Total Liabilities | 7,000 | |||||||
Accumulated deficit | (7,000) | |||||||
Total Stockholder's Equity (Deficit) | (7,000) | |||||||
Total Liabilities and Stockholders' Equity (Deficit) | ||||||||
Distributorship revenue | 43,000 | 49,000 | ||||||
Total revenue | 43,000 | 49,000 | ||||||
Total cost of revenue | ||||||||
Gross profit | 43,000 | 49,000 | ||||||
Total operating expenses | ||||||||
Loss from operations | 43,000 | 49,000 | ||||||
Total other income (expense) | ||||||||
Loss before provision for income taxes | 43,000 | 49,000 | ||||||
Net loss | 43,000 | 49,000 | ||||||
Deferred revenue | (49,000) | |||||||
Net cash used in operating activities | ||||||||
Net cash used in investing activities | ||||||||
Net cash provided by financing activities | ||||||||
Net increase (decrease) in cash | ||||||||
Cash, end of period | ||||||||
Restatement Adjustment [Member] | Accumulated Deficit [Member] | ||||||||
Beginning balance | (56,000) | $ (56,000) | ||||||
Shares issued for services | ||||||||
Warrants issued for services | ||||||||
Shares issued related to debt | ||||||||
Shares issued for cash | ||||||||
Shares issued related to anti-dilution | ||||||||
Net loss | 49,000 | |||||||
Ending balance | $ (7,000) | $ (7,000) | $ (56,000) |
Restatements - Schedule of Re_2
Restatements - Schedule of Restated Statements (Details) (Parenthetical) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Accounting Changes and Error Corrections [Abstract] | |||
Notes payable, debt discount current | $ 7,548 | $ 18,729 | $ 22,431 |
Convertible notes payable, debt discount current | 5,124 | 0 | 3,115 |
Royalty notes payable, debt discount current | 29,393 | ||
Notes payable, debt discount noncurrent | $ 8,812 | $ 14,473 | 46,750 |
Royalty notes payable, debt discount noncurrent | $ 353,894 | ||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 1,000,000 | 1,000,000 | 1,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued | 31,611,785 | 26,223,834 | 24,057,961 |
Segment Reporting (Details Narr
Segment Reporting (Details Narrative) | 9 Months Ended |
Sep. 30, 2018Installments | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Rental period description | The rental periods range from a few months to 2 years and include a combination of down payments made by the customer and monthly payments paid under the agreements with the Company. |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Net Sales and Identifiable Operating Income by Segment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Gross Profit | $ 222,934 | $ 420,598 | $ 628,749 | $ 841,303 | |||
Payroll | 240,499 | 272,900 | 706,648 | 457,288 | |||
Professional fees | 26,175 | 16,603 | 114,230 | 93,505 | |||
General and administrative expenses | 170,504 | 269,039 | 639,598 | 579,172 | |||
Depreciation | 90,512 | 234,654 | |||||
Interest expense | 119,028 | 145,740 | 329,586 | 440,538 | |||
Change in fair value of derivative liability | 6,474 | (9,385) | (11,019) | ||||
Loss on extinguishment of debt | (305,000) | $ 116,541 | |||||
Loss before provision for income taxes | (328,179) | (380,670) | (1,151,928) | (1,257,836) | |||
Provision for income taxes | 800 | 1,600 | |||||
Net loss | (328,179) | (380,760) | (1,152,728) | (1,259,436) | $ (2,709,315) | ||
Total net property, plant, and equipment assets | 925,728 | 925,728 | |||||
Monitoring [Member] | |||||||
Gross Profit | [1] | 202,694 | 336,322 | 569,244 | 562,313 | ||
Identifiable segment operating expenses | [2] | 86,543 | 143,955 | ||||
Identifiable segment operating income | [3] | 202,694 | 249,779 | 569,244 | 418,358 | ||
Total net property, plant, and equipment assets | 562,542 | 562,542 | |||||
Distributorships [Member] | |||||||
Gross Profit | [1] | 20,240 | 84,276 | 59,505 | 278,990 | ||
Identifiable segment operating expenses | [2] | 3,552 | 89,642 | ||||
Identifiable segment operating income | [3] | 20,240 | 80,724 | 59,505 | 189,348 | ||
Total net property, plant, and equipment assets | 350,298 | 350,298 | |||||
Operating Segment [Member] | |||||||
Gross Profit | [1] | 222,934 | 420,598 | 628,749 | 841,303 | ||
Identifiable segment operating expenses | [2] | 90,095 | 233,597 | ||||
Identifiable segment operating income | [3] | 222,934 | 330,503 | 628,749 | 607,706 | ||
Payroll | [4] | 240,499 | 272,900 | 706,648 | 457,288 | ||
Professional fees | [4] | 26,175 | 16,603 | 114,230 | 93,505 | ||
General and administrative expenses | [4] | 170,504 | 269,039 | 639,598 | 579,172 | ||
Depreciation | [4] | 417 | 1,057 | ||||
Interest expense | [4] | 119,028 | 145,740 | 329,586 | 440,538 | ||
Change in fair value of derivative liability | [4] | (5,093) | 6,474 | (9,385) | (11,018) | ||
Loss on extinguishment of debt | [4] | 305,000 | |||||
Loss before provision for income taxes | [4] | (328,179) | (380,670) | (1,151,928) | (1,257,836) | ||
Provision for income taxes | 800 | 1,600 | |||||
Net loss | (328,179) | (380,670) | (1,152,728) | (1,259,436) | |||
Total net property, plant, and equipment assets | 925,729 | 925,729 | |||||
Corporate [Member] | |||||||
Total net property, plant, and equipment assets | $ 12,889 | $ 12,889 | |||||
[1] | Segment gross profit includes segment net sales less segment cost of sales | ||||||
[2] | Identifiable segment operating expenses consists of identifiable depreciation expense | ||||||
[3] | Identifiable segment operating incomes consists of segment gross profit less identifiable operating expense | ||||||
[4] | General corporate expense consists of all other non-identifiable expenses |
Deposits - Schedule of Deposits
Deposits - Schedule of Deposits (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Deposit Assets Disclosure [Abstract] | ||
Lease Deposits | $ 5,131 | $ 5,131 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expense (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Payables and Accruals [Abstract] | |||
Accrued payroll and payroll taxes | $ 6,141 | $ 6,141 | |
Deferred rent | 5,306 | 4,945 | |
Other accrued expenses | 9,100 | 5,000 | |
Total | $ 20,547 | $ 15,685 | $ 235,398 |
Deferred Revenue - Schedule of
Deferred Revenue - Schedule of Deferred Revenue (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Deferred revenue | $ 115,551 | $ 184,378 |
Monitoring Deferred Revenues [Member] | ||
Deferred revenue | 115,551 | 177,878 |
Distributorships Deferred Revenues [Member] | ||
Deferred revenue | $ 6,500 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Dec. 01, 2017 | Oct. 31, 2017 | Sep. 30, 2016 | Sep. 23, 2016 | Mar. 30, 2016 | Jan. 20, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Amortization of debt discount | $ 27,704 | $ 275,465 | ||||||||||
Loss on extinguishments of debt | (305,000) | $ 116,541 | ||||||||||
January 2016 Non-Interest Bearing Note Payable [Member] | ||||||||||||
Notes payable | $ 65,000 | |||||||||||
Principal per month, amount | 937 | |||||||||||
Periodic payments, principal | 3,531 | 3,531 | $ 3,531 | |||||||||
Pay to lender royalty fee per month | $ 1 | $ 5 | ||||||||||
Royalty note, description | The Company will pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers' vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity. | |||||||||||
Amortization of debt discount | $ 65,000 | |||||||||||
Shares of restricted common stock | 425,000 | |||||||||||
Interest expense | 0 | 0 | ||||||||||
Note for principal balance | $ 55,000 | 55,000 | $ 55,000 | |||||||||
Promissory note interest, percentage | 0.00% | |||||||||||
April 2016 Note [Member] | ||||||||||||
Principal per month, amount | $ 750 | |||||||||||
Amortization of debt discount | $ 50,000 | |||||||||||
Shares of restricted common stock | 50,000 | |||||||||||
Interest expense | 6,750 | 6,750 | ||||||||||
Note for principal balance | $ 50,000 | |||||||||||
Convertible debt due date | Jun. 30, 2018 | |||||||||||
Promissory note interest, percentage | 18.00% | |||||||||||
Number of restricted shares issued for exchange for cash | $ 50,000 | |||||||||||
Number of restricted shares issued for exchange | 50,000 | |||||||||||
September 2016 Note [Member] | ||||||||||||
Notes payable | $ 10,000 | |||||||||||
Amortization of debt discount | $ 10,000 | |||||||||||
Interest expense | 1,800 | 1,800 | ||||||||||
Convertible debt due date | Oct. 31, 2018 | Oct. 31, 2017 | ||||||||||
Promissory note interest, percentage | 24.00% | |||||||||||
Number of restricted shares issued for exchange for cash | $ 10,000 | |||||||||||
Number of restricted shares issued for exchange | 100,000 | |||||||||||
December 2017 Note [Member] | ||||||||||||
Notes payable | $ 50,000 | |||||||||||
Principal per month, amount | 1,733 | |||||||||||
Amortization of debt discount | $ 22,650 | |||||||||||
Interest expense | $ 5,111 | $ 0 | ||||||||||
Convertible debt due date | Dec. 1, 2020 | |||||||||||
Promissory note interest, percentage | 15.00% | |||||||||||
December 2017 Note [Member] | Third Party [Member] | ||||||||||||
Notes payable | $ 50,000 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Notes payable, gross amount | $ 101,676 | $ 114,482 | |
Notes payable, discount | (16,360) | (33,202) | |
Notes payable, net balance | 85,316 | 81,280 | |
Less: non-current portion, gross | (24,994) | (35,747) | |
Less: non-current portion, discount | 8,812 | 14,473 | |
Less: non-current portion, net | (16,182) | (21,274) | $ (148,250) |
Notes payable, current portion, gross | 76,682 | 78,735 | |
Notes payable, current portion, discount | (7,548) | (18,729) | |
Notes payable, current portion | 69,134 | 60,006 | $ 154,069 |
January 2016 Non-Interest Bearing Note Payable [Member] | |||
Notes payable, gross amount | 940 | 4,482 | |
Notes payable, discount | (3,889) | ||
Notes payable, net balance | 940 | 593 | |
April 2016 Note [Member] | |||
Notes payable, gross amount | 50,000 | 50,000 | |
Notes payable, discount | (7,292) | ||
Notes payable, net balance | 50,000 | 42,708 | |
September 2016 Note [Member] | |||
Notes payable, gross amount | 10,000 | 10,000 | |
Notes payable, discount | |||
Notes payable, net balance | 10,000 | 10,000 | |
December 2017 Note [Member] | |||
Notes payable, gross amount | 40,736 | 50,000 | |
Notes payable, discount | (16,360) | (22,021) | |
Notes payable, net balance | $ 24,376 | $ 27,979 |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | Dec. 01, 2017 | Oct. 31, 2017 | Sep. 30, 2016 | Sep. 23, 2016 | Mar. 30, 2016 | Jan. 20, 2016 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Common stock shares issued | 31,611,785 | 26,223,834 | 24,057,961 | ||||||
January 2016 Non-Interest Bearing Note Payable [Member] | |||||||||
Notes payable | $ 65,000 | ||||||||
Interest bearing percentage | 0.00% | ||||||||
Per month amount | $ 937 | ||||||||
Periodic payments, principal | 3,531 | $ 3,531 | $ 3,531 | ||||||
Note for principal balance | $ 55,000 | $ 55,000 | |||||||
Restricted of common shares | 425,000 | ||||||||
January 2016 Non-Interest Bearing Note Payable [Member] | 8 Months Payment Arrangement [Member] | |||||||||
Per month amount | $ 1,250 | ||||||||
April 2016 Note [Member] | |||||||||
Interest bearing percentage | 18.00% | ||||||||
Per month amount | $ 750 | ||||||||
Note for principal balance | $ 50,000 | ||||||||
Debt due date | Jun. 30, 2018 | ||||||||
Restricted of common shares | 50,000 | ||||||||
September 2016 Note [Member] | |||||||||
Notes payable | $ 10,000 | ||||||||
Interest bearing percentage | 24.00% | ||||||||
Debt due date | Oct. 31, 2018 | Oct. 31, 2017 | |||||||
Percentage of accrued interest to be converted to common stock | 25.00% | ||||||||
December 2017 Note [Member] | |||||||||
Notes payable | $ 50,000 | ||||||||
Interest bearing percentage | 15.00% | ||||||||
Per month amount | $ 1,733 | ||||||||
Debt due date | Dec. 1, 2020 | ||||||||
Common stock shares issued | 100,000 | ||||||||
Exercise price per share | $ 0.25 |
Notes Payable - Related Parti_3
Notes Payable - Related Parties (Details Narrative) - USD ($) | Mar. 01, 2018 | Feb. 01, 2018 | Feb. 01, 2018 | Nov. 01, 2017 | Apr. 30, 2017 | Sep. 30, 2016 | Mar. 29, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Aug. 01, 2018 |
Amortization of debt discount | $ 27,704 | $ 275,465 | |||||||||
January 2016, Non-Interest Bearing Notes Payable [Member] | Royalty Agreement [Member] | |||||||||||
Note for principal balance | $ 55,000 | ||||||||||
Interest expense, related party debt | 0 | 0 | |||||||||
January 2016, Non-Interest Bearing Notes Payable [Member] | Royalty Agreement [Member] | CEO [Member] | |||||||||||
Principal payments, monthly | $ 3,531 | $ 937 | |||||||||
Royalty note, description | The Company will pay the lender a royalty fee of five ($5) dollars per month for every ignition interlock devise that the Company has on the road in customers' vehicles up to eight hundred (800) in perpetuity, and for every unit over 800, the Company will owe the lender $1 per month per device in perpetuity. | ||||||||||
Amortization of debt discount | $ 55,000 | ||||||||||
January 2016, Non-Interest Bearing Notes Payable [Member] | Royalty Agreement [Member] | CEO [Member] | Minimum [Member] | |||||||||||
Royalty fee, per month | 5 | ||||||||||
January 2016, Non-Interest Bearing Notes Payable [Member] | Royalty Agreement [Member] | CEO [Member] | Maximum [Member] | |||||||||||
Royalty fee, per month | 800 | ||||||||||
January 2016, Non-Interest Bearing Notes Payable [Member] | Royalty Agreement Note Two [Member] | |||||||||||
Royalty note, description | The Company entered into Amendment No. 1 to Royalty note #2 to amend the royalty provisions of the original note to be $1 for each Device on the road beginning in the 25th month after the date of the Royalty note #2. | ||||||||||
Royalty fee, per month | $ 1 | ||||||||||
Amortization of debt discount | $ 8,959 | ||||||||||
Restricted common shares | 50,000 | ||||||||||
September 2016, Promissory Note [Member] | |||||||||||
Note for principal balance | $ 36,100 | ||||||||||
September 2016, Promissory Note One [Member] | |||||||||||
Note for principal balance | 192,000 | ||||||||||
October 2016, Promissory Note [Member] | |||||||||||
Note for principal balance | 24,960 | ||||||||||
November 2016, Promissory Note [Member] | |||||||||||
Note for principal balance | 5,040 | ||||||||||
November 2016, Promissory Note One [Member] | |||||||||||
Note for principal balance | 50,000 | ||||||||||
November 2016, Promissory Note Two [Member] | |||||||||||
Note for principal balance | 325,000 | ||||||||||
January 2017, Promissory Note [Member] | |||||||||||
Note for principal balance | 50,400 | ||||||||||
February 2017, Promissory Note [Member] | |||||||||||
Note for principal balance | 70,000 | ||||||||||
March 2017, Promissory Note [Member] | |||||||||||
Note for principal balance | 75,000 | ||||||||||
November 2017, New Promissory Note [Member] | |||||||||||
Note for principal balance | 900,000 | 900,000 | $ 900,000 | ||||||||
Principal payments, monthly | $ 15,000 | 15,000 | 15,000 | ||||||||
Interest expense, related party debt | 126,229 | 0 | |||||||||
Loan term | 60 months | ||||||||||
Principal and interest payments | $ 25,000 | 25,000 | 25,000 | ||||||||
Interest only payments, monthly | $ 10,000 | $ 10,000 | $ 10,000 | ||||||||
Debt instrument, maturity date | Nov. 1, 2022 | Nov. 1, 2022 | Nov. 1, 2022 | ||||||||
November 2017, New Promissory Note [Member] | Agreement for Replacement of Note [Member] | |||||||||||
Note for principal balance | $ (765,000) | ||||||||||
August 2018, New Promissory Note [Member] | |||||||||||
Note for principal balance | $ 1,365,000 | $ 1,365,000 | 1,365,000 | ||||||||
Interest expense, related party debt | 78,448 | 0 | |||||||||
Principal and interest payments | 53,500 | 53,500 | |||||||||
Interest only payments, monthly | 20,000 | 20,000 | |||||||||
August 2018, New Promissory Note [Member] | Agreement for Replacement of Note [Member] | |||||||||||
Note for principal balance | 1,365,000 | ||||||||||
February 2018, Promissory Note [Member] | |||||||||||
Note for principal balance | $ 100,000 | $ 100,000 | 100,000 | $ 100,000 | |||||||
Note for principal balance | (100,000) | ||||||||||
Interest expense, related party debt | $ 15,000 | 0 | |||||||||
Note monthly fees | $ 2,500 | ||||||||||
Debt instrument, maturity date | Feb. 1, 2019 | Feb. 1, 2019 | Feb. 1, 2019 | ||||||||
February 2018, Promissory Note [Member] | Agreement for Replacement of Note [Member] | |||||||||||
Note for principal balance | $ 100,000 | $ 100,000 | |||||||||
March 2018 Note [Member] | Agreement for Replacement of Note [Member] | |||||||||||
Note for principal balance | (765,000) | ||||||||||
New Note [Member] | Agreement for Replacement of Note [Member] | |||||||||||
Note for principal balance | $ 1,365,000 | 1,365,000 | |||||||||
March 2018, Promissory Note [Member] | |||||||||||
Note for principal balance | $ 500,000 | 500,000 | $ 500,000 | ||||||||
Interest expense, related party debt | $ 58,475 | $ 0 | |||||||||
Debt instrument, maturity date | Mar. 1, 2023 | Mar. 1, 2020 | Mar. 1, 2020 | ||||||||
March 2018, Promissory Note [Member] | First Year [Member] | |||||||||||
Note monthly fees | $ 12,500 | ||||||||||
March 2018, Promissory Note [Member] | Second Year [Member] | |||||||||||
Note monthly fees | 12,000 | ||||||||||
March 2018, Promissory Note [Member] | Third Year [Member] | |||||||||||
Note monthly fees | 11,500 | ||||||||||
March 2018, Promissory Note [Member] | Fourth Year [Member] | |||||||||||
Note monthly fees | 11,000 | ||||||||||
March 2018, Promissory Note [Member] | Fifth Year [Member] | |||||||||||
Note monthly fees | 10,500 | ||||||||||
March 2018, Promissory Note [Member] | Agreement for Replacement of Note [Member] | |||||||||||
Note for principal balance | $ 500,000 | $ 500,000 | |||||||||
Note for principal balance | $ (765,000) | ||||||||||
March 2018 Convertible Debt [Member] | |||||||||||
Note for principal balance | $ (500,000) |
Notes Payable - Related Parti_4
Notes Payable - Related Parties - Schedule of Notes Payable Related Parties (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Total notes payable | $ 1,365,000 | $ 884,634 | |
Less: non-current portion | (1,251,250) | (839,306) | |
Notes payable, current portion | 113,750 | 45,328 | |
Amount [Member] | |||
Total notes payable | 1,365,000 | 890,923 | |
Less: non-current portion | (1,115,000) | (839,306) | |
Notes payable, current portion | 250,000 | 51,617 | |
Discount [Member] | |||
Total notes payable | |||
Total notes payable | (6,289) | ||
Less: non-current portion | |||
Notes payable, current portion | |||
Notes payable, current portion | (6,289) | ||
Replacement [Member] | |||
Total notes payable | |||
Less: non-current portion | (136,250) | ||
Notes payable, current portion | (136,250) | ||
January 2016 Non-Interest Bearing Note Payable [Member] | |||
Total notes payable | |||
Total notes payable | (366) | ||
January 2016 Non-Interest Bearing Note Payable [Member] | Amount [Member] | |||
Total notes payable | 5,923 | ||
January 2016 Non-Interest Bearing Note Payable [Member] | Discount [Member] | |||
Total notes payable | |||
Total notes payable | (6,289) | ||
January 2016 Non-Interest Bearing Note Payable [Member] | Replacement [Member] | |||
Total notes payable | |||
November 2017, New Promissory Note [Member] | |||
Total notes payable | 885,000 | ||
November 2017, New Promissory Note [Member] | Amount [Member] | |||
Total notes payable | 765,000 | 885,000 | |
November 2017, New Promissory Note [Member] | Discount [Member] | |||
Total notes payable | |||
November 2017, New Promissory Note [Member] | Replacement [Member] | |||
Total notes payable | (765,000) | ||
February 2018, Promissory Note [Member] | |||
Total notes payable | |||
February 2018, Promissory Note [Member] | Amount [Member] | |||
Total notes payable | 100,000 | ||
February 2018, Promissory Note [Member] | Discount [Member] | |||
Total notes payable | |||
February 2018, Promissory Note [Member] | Replacement [Member] | |||
Total notes payable | (100,000) | ||
March 2018, Promissory Note [Member] | |||
Total notes payable | |||
March 2018, Promissory Note [Member] | Amount [Member] | |||
Total notes payable | 500,000 | ||
March 2018, Promissory Note [Member] | Discount [Member] | |||
Total notes payable | |||
March 2018, Promissory Note [Member] | Replacement [Member] | |||
Total notes payable | (500,000) | ||
August 2018, New Promissory Note [Member] | |||
Total notes payable | 1,365,000 | ||
August 2018, New Promissory Note [Member] | Amount [Member] | |||
Total notes payable | |||
August 2018, New Promissory Note [Member] | Discount [Member] | |||
Total notes payable | |||
August 2018, New Promissory Note [Member] | Replacement [Member] | |||
Total notes payable | $ 1,365,000 |
Notes Payable - Related Parti_5
Notes Payable - Related Parties - Schedule of Notes Payable Related Parties (Details) (Parenthetical) | Mar. 01, 2018USD ($) | Feb. 01, 2018USD ($) | Nov. 01, 2017USD ($) | Jan. 20, 2016USD ($) | Sep. 30, 2018USD ($)Device | Dec. 31, 2017USD ($)Installments | Aug. 01, 2018USD ($) |
January 2016 Non-Interest Bearing Note Payable [Member] | |||||||
Note for principal balance | $ 55,000 | $ 55,000 | |||||
Principal payments, monthly | $ 3,531 | 3,531 | 3,531 | ||||
Principal and interest payments | $ 937 | ||||||
January 2016 Non-Interest Bearing Note Payable [Member] | Four Months [Member] | |||||||
Principal payments, monthly | 937 | 937 | |||||
January 2016 Non-Interest Bearing Note Payable [Member] | Five Months [Member] | |||||||
Principal payments, monthly | 1,250 | 1,250 | |||||
November 2017, New Promissory Note [Member] | |||||||
Note for principal balance | $ 900,000 | 900,000 | 900,000 | ||||
Principal payments, monthly | 15,000 | $ 15,000 | $ 15,000 | ||||
Interest payable monthly installments | 60 | 60 | |||||
Principal and interest payments | $ 25,000 | $ 25,000 | $ 25,000 | ||||
Debt instrument, maturity date | Nov. 1, 2022 | Nov. 1, 2022 | Nov. 1, 2022 | ||||
Interest only payments, monthly | $ 10,000 | $ 10,000 | $ 10,000 | ||||
February 2018, Promissory Note [Member] | |||||||
Note for principal balance | $ 100,000 | $ 100,000 | $ 100,000 | ||||
Debt instrument, maturity date | Feb. 1, 2019 | Feb. 1, 2019 | Feb. 1, 2019 | ||||
Note fee payment | $ 2,500 | $ 2,500 | |||||
February 2018, Promissory Note [Member] | Agreement for Replacement of Note [Member] | |||||||
Note for principal balance | 100,000 | 100,000 | |||||
March 2018, Promissory Note [Member] | |||||||
Note for principal balance | $ 500,000 | $ 500,000 | $ 500,000 | ||||
Debt instrument, maturity date | Mar. 1, 2023 | Mar. 1, 2020 | Mar. 1, 2020 | ||||
March 2018, Promissory Note [Member] | Agreement for Replacement of Note [Member] | |||||||
Note for principal balance | $ 500,000 | $ 500,000 | |||||
March 2018, Promissory Note [Member] | First Year [Member] | |||||||
Note fee payment | 12,500 | 12,500 | |||||
March 2018, Promissory Note [Member] | Second Year [Member] | |||||||
Note fee payment | 12,000 | 12,000 | |||||
March 2018, Promissory Note [Member] | Third Year [Member] | |||||||
Note fee payment | 11,500 | 11,500 | |||||
March 2018, Promissory Note [Member] | Fourth Year [Member] | |||||||
Note fee payment | 11,000 | 11,000 | |||||
March 2018, Promissory Note [Member] | Fifth Year [Member] | |||||||
Note fee payment | 10,500 | 105,000 | |||||
August 2018, New Promissory Note [Member] | |||||||
Note for principal balance | 1,365,000 | 1,365,000 | $ 1,365,000 | ||||
Principal and interest payments | 53,500 | 53,500 | |||||
Interest only payments, monthly | 20,000 | 20,000 | |||||
August 2018, New Promissory Note [Member] | Agreement for Replacement of Note [Member] | |||||||
Note for principal balance | $ 1,365,000 | ||||||
November 2017, Promissory Note [Member] | Agreement for Replacement of Note [Member] | |||||||
Note for principal balance | $ 765,000 | $ 765,000 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) | Mar. 09, 2018USD ($) | Nov. 01, 2017USD ($)$ / sharesshares | May 06, 2016USD ($)shares | Aug. 07, 2015USD ($)Installments$ / sharesshares | Jun. 30, 2018shares | Sep. 30, 2018USD ($)shares | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Convertible notes | $ 14,692 | $ 10,489 | |||||||
Amortization of debt discount | $ 27,704 | $ 275,465 | |||||||
Accrued interest converted to shares common stock | shares | 32,812 | ||||||||
Expected Dividend Rate [Member] | |||||||||
Warrants measurement input | 0 | 0 | |||||||
Price Volatility [Member] | |||||||||
Warrants measurement input | 3.73 | 1 | |||||||
Risk Free Interest Rate [Member] | |||||||||
Warrants measurement input | 0.0237 | 0.0108 | |||||||
Convertible Debenture Due On August 7, 2017 [Member] | |||||||||
Interest bearing percentage | 7.50% | ||||||||
Convertible notes | $ 15,000 | $ 7,500 | 7,500 | ||||||
Convertible debt due date | Aug. 7, 2017 | ||||||||
Percentage of accrued interest to be converted to common stock | 70.00% | ||||||||
Debt instrument, convertible, terms of conversion feature | On August 7, 2015, the Company entered into an agreement with a third party non-affiliate and issued a 7.5% interest bearing convertible debenture for $15,000 due on August 7, 2017, with conversion features commencing after 180 days following the date of the note. Payments of interest only were due monthly beginning September 2015. The loan is convertible at 70% of the average of the closing prices for the common stock during the five trading days prior to the conversion date. | ||||||||
Amortization of debt discount | $ 5,770 | ||||||||
Conversion of debt | $ 7,500 | ||||||||
Common stock conversion shares | shares | 30,000 | ||||||||
Warrants outstanding | shares | 30,000 | ||||||||
Warrants exercise price | $ / shares | $ 0.50 | ||||||||
Warrants, term | 3 years | ||||||||
Additional discount on debt | $ 4,873 | ||||||||
Interest expense | 422 | 422 | |||||||
Convertible Debenture Due on October 27, 2020 [Member] | |||||||||
Interest bearing percentage | 10.00% | ||||||||
Convertible notes | $ 5,000 | 2,989 | |||||||
Convertible debt due date | Oct. 27, 2020 | ||||||||
Percentage of accrued interest to be converted to common stock | 61.00% | ||||||||
Debt instrument, convertible, terms of conversion feature | The loan is convertible at 61% of the average of the closing prices for the common stock during the five trading days prior to the conversion date but may not be converted if such conversion would cause the holder to own more than 4.9% of outstanding common stock after giving effect to the conversion. | ||||||||
Amortization of debt discount | $ 5,000 | ||||||||
Warrants outstanding | shares | 10,000 | ||||||||
Warrants exercise price | $ / shares | $ 1 | ||||||||
Warrants, term | 4 years | ||||||||
Additional discount on debt | $ 2,099 | ||||||||
Interest expense | 250 | 0 | |||||||
Accrued interest converted to shares common stock | shares | 32,812 | ||||||||
Convertible Debenture Due on October 27, 2020 [Member] | Total Discount [Member] | |||||||||
Amortization of debt discount | 6,825 | ||||||||
Convertible Debenture Due on October 27, 2020 [Member] | Expenses Related Beneficial Feature [Member] | |||||||||
Amortization of debt discount | $ 1,825 | ||||||||
Convertible Debenture Due on March 9, 2021 [Member] | |||||||||
Interest bearing percentage | 10.00% | ||||||||
Convertible notes | $ 20,000 | 7,192 | |||||||
Convertible debt due date | Mar. 9, 2021 | ||||||||
Percentage of accrued interest to be converted to common stock | 61.00% | ||||||||
Debt instrument, convertible, terms of conversion feature | The loan is convertible at 61% of the average of the closing prices for the common stock during the five trading days prior to the conversion date but may not be converted if such conversion would cause the holder to own more than 4.9% of outstanding common stock after giving effect to the conversion. | ||||||||
Amortization of debt discount | $ 20,000 | ||||||||
Interest expense | $ 1,126 | $ 0 | |||||||
Convertible Debenture Due on March 9, 2021 [Member] | Total Discount [Member] | |||||||||
Amortization of debt discount | 47,768 | ||||||||
Convertible Debenture Due on March 9, 2021 [Member] | Expenses Related Beneficial Feature [Member] | |||||||||
Amortization of debt discount | $ 27,768 |
Convertible Notes Payable - Sch
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) - USD ($) | Sep. 30, 2018 | Mar. 09, 2018 | Dec. 31, 2017 | Nov. 01, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | Aug. 07, 2015 |
Convertible notes, gross amount | $ 27,500 | $ 12,500 | |||||
Convertible notes, discount | (12,808) | (2,011) | |||||
Convertible notes, net balance | 14,692 | 10,489 | |||||
Less: non-current portion, gross amount | (20,000) | (5,000) | |||||
Less: non-current portion, discount | 7,684 | 1,483 | |||||
Less: non-current portion, net | (12,316) | (3,517) | |||||
Convertible notes, current portion, gross amount | 7,500 | 7,500 | |||||
Convertible notes, current portion, discount | (5,124) | (528) | |||||
Convertible notes, current portion | 2,376 | 6,972 | $ 54,385 | ||||
Convertible Debenture Due On August 7, 2017 [Member] | |||||||
Convertible notes, gross amount | 7,500 | 7,500 | |||||
Convertible notes, discount | |||||||
Convertible notes, net balance | 7,500 | 7,500 | $ 15,000 | ||||
Convertible Debenture Due on October 27, 2020 [Member] | |||||||
Convertible notes, gross amount | 5,000 | ||||||
Convertible notes, discount | (2,011) | ||||||
Convertible notes, net balance | 2,989 | $ 5,000 | |||||
Convertible Debenture Due on March 9, 2021 [Member] | |||||||
Convertible notes, gross amount | 20,000 | ||||||
Convertible notes, discount | (12,808) | ||||||
Convertible notes, net balance | $ 7,192 | $ 20,000 |
Convertible Notes Payable - S_2
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) (Parenthetical) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Convertible notes | $ 14,692 | $ 10,489 |
August 2015 Convertible Notes Payable [Member] | ||
Convertible notes | $ 15,000 | $ 15,000 |
Interest bearing percentage | 7.50% | 7.50% |
Convertible debt due date | Aug. 7, 2017 | Aug. 7, 2017 |
November 2017 Convertible Notes Payable [Member] | ||
Convertible notes | $ 5,000 | $ 5,000 |
Interest bearing percentage | 10.00% | 10.00% |
Convertible debt due date | Oct. 27, 2020 | Oct. 27, 2020 |
March 2018 Convertible Notes Payable [Member] | ||
Convertible notes | $ 20,000 | $ 20,000 |
Interest bearing percentage | 10.00% | 10.00% |
Convertible debt due date | Mar. 9, 2021 | Mar. 9, 2021 |
Derivative Liabilities (Details
Derivative Liabilities (Details Narrative) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Nov. 30, 2017 | Aug. 31, 2015 |
Convertible notes | $ 14,692 | $ 10,489 | |||
Derivative [Member] | Expected Dividend Rate [Member] | |||||
Warrants measurement input | 0.00% | 0.00% | 0.00% | ||
Derivative [Member] | Price Volatility [Member] | |||||
Warrants measurement input | 160.00% | 312.00% | 100.00% | ||
Derivative [Member] | Risk Free Interest Rate [Member] | |||||
Warrants measurement input | 2.49% | 2.37% | 0.61% | ||
August 2015 Convertible Debenture [Member] | Derivative [Member] | |||||
Convertible notes | $ 15,000 | ||||
Convertible debt, fair value | $ 15,000 | ||||
Warrants, term | 1 year 6 months 29 days | ||||
November 2017 Convertible Debenture [Member] | Derivative [Member] | |||||
Convertible notes | $ 5,000 | ||||
Convertible debt, fair value | $ 5,000 | ||||
Warrants, term | 3 years | ||||
March 2018 Convertible Debenture [Member] | Derivative [Member] | |||||
Convertible notes | $ 20,000 | ||||
Convertible debt, fair value | $ 20,000 | ||||
Warrants, term | 2 years 5 months 9 days |
Derivative Liabilities - Schedu
Derivative Liabilities - Schedule of Derivative Liabilities (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Derivative liability | $ 18,287 | $ 12,302 |
August 2015 Convertible Debt [Member] | ||
Derivative liability | 3,599 | 7,310 |
November 2017 Convertible Debt [Member] | ||
Derivative liability | 4,992 | |
March 2018 Convertible Debt [Member] | ||
Derivative liability | $ 14,688 |
Derivative Liabilities - Sche_2
Derivative Liabilities - Schedule of Derivative Liabilities (Details) (Parenthetical) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
August 2015 Convertible Debt [Member] | ||
Convertible debt | $ 15,000 | $ 15,000 |
November 2017 Convertible Debt [Member] | ||
Convertible debt | 5,000 | 5,000 |
March 2018 Convertible Debt [Member] | ||
Convertible debt | $ 20,000 | $ 20,000 |
Derivative Liabilities - Sche_3
Derivative Liabilities - Schedule of Revalue of Derivatives Using Black Scholes Model (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Derivative liability | $ 18,287 | $ 18,287 | $ 12,302 | ||
Additions | 15,370 | ||||
Changes | 5,093 | $ (6,474) | 9,385 | $ 11,018 | |
August 2015 Convertible Debt [Member] | |||||
Derivative liability | 3,599 | 3,599 | 7,310 | ||
Additions | |||||
Changes | (3,711) | ||||
November 2017 Convertible Debt [Member] | |||||
Derivative liability | 4,992 | ||||
Additions | |||||
Changes | (4,992) | ||||
March 2018 Convertible Debt [Member] | |||||
Derivative liability | $ 14,688 | 14,688 | |||
Additions | 15,370 | ||||
Changes | $ (682) |
Derivative Liabilities - Sche_4
Derivative Liabilities - Schedule of Revalue of Derivatives Using Black Scholes Model (Details) (Parenthetical) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
August 2015 Convertible Debt [Member] | ||
Convertible debt | $ 15,000 | $ 15,000 |
November 2017 Convertible Debt [Member] | ||
Convertible debt | 5,000 | 5,000 |
March 2018 Convertible Debt [Member] | ||
Convertible debt | $ 20,000 | $ 20,000 |
Accrued Royalties Payable (Deta
Accrued Royalties Payable (Details Narrative) - USD ($) | Nov. 01, 2017 | Nov. 04, 2016 | Sep. 30, 2016 | Mar. 29, 2016 | Jan. 31, 2016 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Notes payable - related party | $ 113,750 | $ 45,328 | ||||||
January 2016 Royalty Agreement [Member] | ||||||||
Notes payable | $ 65,000 | |||||||
Royalty fee | 5 | |||||||
Due to related parties | $ 1 | |||||||
March 2016 Royalty Agreement [Member] | ||||||||
Royalty fee | $ 5 | |||||||
Due to related parties | 1 | |||||||
Notes payable - related party | $ 55,000 | |||||||
September and November 2016 Royalty Agreements [Member] | ||||||||
Notes payable - related party | $ 325,000 | $ 192,000 | ||||||
September and November 2016 Royalty Agreements [Member] | Minimum [Member] | ||||||||
Royalty fee | 1 | 1 | ||||||
September and November 2016 Royalty Agreements [Member] | Maximum [Member] | ||||||||
Royalty fee | $ 2 | $ 2 | ||||||
November 2017 Royalty Agreement [Member] | ||||||||
Notes payable - related party | $ 900,000 | |||||||
Royalty fee description | Under the royalty agreement, the Company is required to pay a royalty fee of from $1.50 to $3.00 per month for every ignition interlock devise that the Company has on the road in customers' vehicles, the amount depending on how many devices are installed. |
Accrued Royalties Payable - Sch
Accrued Royalties Payable - Schedule of Accrued Royalties (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Total accrued royalties | $ 254,711 | $ 179,993 |
January 2016 Royalty Agreement [Member] | ||
Total accrued royalties | 113,941 | 86,230 |
March 2016 Royalty Agreement [Member] | ||
Total accrued royalties | 126,318 | 88,010 |
September and November 2016 Royalty Agreements [Member] | ||
Total accrued royalties | (5,203) | 5,753 |
November 2017 Royalty Agreement [Member] | ||
Total accrued royalties | 8,530 | |
Auguest 2018 Royalty Agreement [Member] | ||
Total accrued royalties | $ 11,125 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | |
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |
Number of preferred stock shares issued, value | $ 458,705 | $ 653,099 | $ 849,037 | |
Preferred stock, shares issued | 1,000,000 | 1,000,000 | 1,000,000 | |
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Shares issued for services, value | $ 110,201 | $ 13,913 | $ 13,913 | |
Debt conversion, converted instrument, shares issued | 32,812 | |||
Debt conversion, converted instrument, amount | $ 5,083 | |||
Common stock, shares issued | 31,611,785 | 24,057,961 | 26,223,834 | |
Royalty Notes [Member] | ||||
Stock issued during period, shares | 538,256 | |||
Common Stockholders [Member] | ||||
Stock issued during period, shares | 4,340,883 | |||
Number of preferred stock shares issued, value | $ 458,705 | |||
Common stock voting rights | Holders of common stock are entitled to one vote for each share held. | |||
Shares issued for services, shares | 476,000 | |||
Shares issued for services, value | $ 110,200 | |||
Series A Preferred Stock [Member] | ||||
Preferred stock, shares authorized | 1,000,000 | |||
Preferred stock, voting rights | Series A Preferred stock will have one hundred (100) votes on all matters | |||
Stock issued during period, shares | ||||
Number of preferred stock shares issued, value | ||||
Preferred stock, shares issued | 1,000,000 | |||
Shares issued for services, shares | ||||
Shares issued for services, value | ||||
Series A Preferred Stock [Member] | Material Definitive Agreement [Member] | Officer and Director [Member] | ||||
Stock issued during period, shares | 1,000,000 | |||
Number of preferred stock shares issued, value | $ 350,000 |
Warrants (Details Narrative)
Warrants (Details Narrative) - Warrant [Member] | Sep. 30, 2018$ / shares |
Minimum [Member] | |
Warrant expiration | 3 years |
Warrant exercise price | $ 0.10 |
Maximum [Member] | |
Warrant expiration | 4 years |
Warrant exercise price | $ 1 |
Warrants - Schedule of Warrant
Warrants - Schedule of Warrant Activity (Details) - Warrant [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Warrants for common shares, outstanding, beginning balance | 4,857,176 | 160,000 |
Warrants for common shares, Granted | 930,410 | 4,697,176 |
Warrants for common shares, Exercised | ||
Warrants for common shares, Forfeited, cancelled, expired | ||
Warrants for common shares, Outstanding, ending balance | 5,787,586 | 4,857,176 |
Weighted average exercise price, beginning balance | $ 0.51 | $ 0.53 |
Weighted average exercise price, Granted | 1.35 | 0.51 |
Weighted average exercise price, Exercised | ||
Weighted average exercise price, Forfeited, cancelled, expired | ||
Weighted average exercise price, ending balance | $ 0.60 | $ 0.51 |
Weighted Average Remaining Contractual Life Warrants Outstanding, Beginning | 3 years 2 months 8 days | 1 year 11 months 19 days |
Weighted Average Remaining Contractual Life Warrants Outstanding, Granted | 4 years | 4 years |
Weighted Average Remaining Contractual Life Warrants Outstanding Ending | 2 years 7 months 2 days | 3 years 2 months 8 days |
Aggregate Intrinsic Value Outstanding Beginning | $ 412,864 | |
Aggregate Intrinsic Value Outstanding Ending | $ 412,864 |
Income (Loss) Per Share - Sched
Income (Loss) Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Total anti-dilutive weighted average shares | 5,942,776 | 5,512,380 | 5,942,776 | 5,512,380 |
Preferred Shares [Member] | ||||
Total anti-dilutive weighted average shares | ||||
Convertible Notes [Member] | ||||
Total anti-dilutive weighted average shares | 155,190 | 375,082 | 155,190 | 375,082 |
Warrants [Member] | ||||
Total anti-dilutive weighted average shares | 5,787,586 | 5,137,298 | 5,787,586 | 5,137,298 |
Options [Member] | ||||
Total anti-dilutive weighted average shares |
Income (Loss) Per Share - Sch_2
Income (Loss) Per Share - Schedule of Dilutive Securities of Common Shares Outstanding (Details) | 9 Months Ended |
Sep. 30, 2018shares | |
Total potential shares | 37,554,561 |
Common Shares [Member] | |
Total potential shares | 31,611,785 |
Preferred Shares [Member] | |
Total potential shares | |
Convertible Notes [Member] | |
Total potential shares | 155,190 |
Warrants [Member] | |
Total potential shares | 5,787,586 |
Options [Member] | |
Total potential shares |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Aug. 28, 2017 | Dec. 01, 2016 |
Lease term | 4 years | |
Lease amount per month | $ 2,200 | |
Maximum provision for escalating | $ 2,404 | |
B3 Investments, LLC [Member] | ||
Lease term | 1 year | |
Lease amount per month | $ 1,350 | |
Lease description | The Company entered into a one-year lease with B3 Investments, LLC for a storefront location at Suites D104 and D105, 2406 24th Street, South Phoenix, Arizona. Base rent under the lease is $1,350 per month plus 2% ($27) rental tax. | |
Rental tax | $ 27 | |
Percentage of rental tax rate | 2.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 9 Months Ended |
Sep. 30, 2018USD ($)shares | |
David Haridim [Member] | |
Number of warrants granted | 50,000 |
Doheny Group [Member] | |
Notes payable | $ | $ 1,365,000 |
Number of common stock granted | 3,208,017 |
Doheny Group [Member] | Anti-dilution Shares [Member] | |
Number of common stock granted | 1,294,865 |
Doheny Group [Member] | Notes Payable [Member] | |
Number of common stock granted | 1,863,152 |
Settlement with Distributor (De
Settlement with Distributor (Details Narrative) - Distributor Member [Member] - Distributorship Agreement [Member] | Jan. 21, 2018Device | Dec. 31, 2017USD ($) |
Number of interlock units | Device | 900 | |
Distributor revenue and accounts receivable | $ | $ 35,979 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jun. 03, 2019 | May 01, 2019 | Mar. 04, 2019 | Feb. 19, 2019 | Feb. 01, 2019 | Jan. 15, 2019 | Jan. 11, 2019 | Jan. 03, 2019 | Dec. 31, 2018 | Dec. 17, 2018 | Dec. 01, 2018 | Oct. 11, 2018 | Oct. 04, 2018 | Dec. 31, 2018 | Dec. 31, 2018 | Jun. 03, 2020 | May 01, 2020 | Mar. 04, 2020 | Feb. 19, 2020 | Feb. 01, 2020 | Jan. 15, 2020 | Jan. 11, 2020 | Jan. 03, 2020 | Dec. 31, 2019 | Dec. 17, 2019 | Jan. 30, 2019 |
Loan Agreement [Member] | The Doheny Group [Member] | Scenario Forecast [Member] | ||||||||||||||||||||||||||
Debt balloon payment | $ 89,000 | $ 20,000 | $ 10,000 | $ 5,000 | $ 15,000 | $ 14,500 | $ 40,000 | $ 32,700 | $ 23,000 | $ 6,000 | ||||||||||||||||
Subsequent Event [Member] | Rafael Mavashev [Member] | Promissory Note [Member] | ||||||||||||||||||||||||||
Convertible debenture | $ 10,000 | $ 10,000 | $ 10,000 | |||||||||||||||||||||||
Accrued interest | 1,000 | 1,000 | 1,000 | |||||||||||||||||||||||
Subsequent Event [Member] | Edris [Member] | Royalty Note [Member] | ||||||||||||||||||||||||||
Convertible debenture | 65,000 | 65,000 | 65,000 | |||||||||||||||||||||||
Royalty expense | 3,000 | |||||||||||||||||||||||||
Subsequent Event [Member] | Oren Azulay [Member] | Promissory Note One [Member] | ||||||||||||||||||||||||||
Convertible debenture | 50,000 | 50,000 | 50,000 | |||||||||||||||||||||||
Accrued interest | 13,000 | 13,000 | 13,000 | |||||||||||||||||||||||
Subsequent Event [Member] | The Doheny Group [Member] | CEO [Member] | ||||||||||||||||||||||||||
Sale of stock, consideration | $ 30,000 | |||||||||||||||||||||||||
Subsequent Event [Member] | The Doheny Group [Member] | CEO [Member] | Common Stock [Member] | ||||||||||||||||||||||||||
Sale of stock, number of shares issued in transaction | 8,924,000 | |||||||||||||||||||||||||
Subsequent Event [Member] | The Doheny Group [Member] | CEO [Member] | Preferred Stock [Member] | ||||||||||||||||||||||||||
Sale of stock, number of shares issued in transaction | 1,000,000 | |||||||||||||||||||||||||
Subsequent Event [Member] | Personal Loan Agreement [Member] | Michael Wainer [Member] | ||||||||||||||||||||||||||
Advance from loan amount | $ 72,800 | |||||||||||||||||||||||||
Principal and interest payments | $ 11,527 | |||||||||||||||||||||||||
Debt payment description | On December 31, 2018, Michael Wainer released the Company from payment of the loan. | |||||||||||||||||||||||||
Subsequent Event [Member] | Personal Loan Agreement [Member] | Michael Wainer [Member] | Twelve Months [Member] | ||||||||||||||||||||||||||
Interest and fees on loan | 37,128 | |||||||||||||||||||||||||
Subsequent Event [Member] | Personal Loan Agreement [Member] | Michael Wainer [Member] | First Six Months [Member] | ||||||||||||||||||||||||||
Principal and interest payments | 11,527 | |||||||||||||||||||||||||
Subsequent Event [Member] | Personal Loan Agreement [Member] | Michael Wainer [Member] | Final Six Months [Member] | ||||||||||||||||||||||||||
Principal and interest payments | 6,795 | |||||||||||||||||||||||||
Subsequent Event [Member] | Personal Loan Agreement [Member] | Michael Wainer [Member] | Kabbage [Member] | ||||||||||||||||||||||||||
Loan amount | $ 72,800 | |||||||||||||||||||||||||
Subsequent Event [Member] | Loan Agreement [Member] | Forward Financing [Member] | ||||||||||||||||||||||||||
Loan amount | $ 49,581 | $ 60,000 | ||||||||||||||||||||||||
Interest and fees on loan | $ 18,600 | |||||||||||||||||||||||||
Debt payment description | Payments of $561.43 were automatically paid each business day starting October 15, 2018 and were to be for 140 days business days. | |||||||||||||||||||||||||
Agreed to settle loan amount | $ 30,806 | |||||||||||||||||||||||||
Subsequent Event [Member] | Loan Agreement [Member] | The Doheny Group [Member] | ||||||||||||||||||||||||||
Loan amount | $ 89,000 | $ 20,000 | $ 10,000 | $ 5,000 | $ 15,000 | $ 14,500 | $ 32,700 | $ 23,000 | $ 6,000 | $ 23,000 | $ 23,000 | |||||||||||||||
Advance from loan amount | $ 40,000 | |||||||||||||||||||||||||
Debt payment description | Therefore, the royalty will become $5.00 per unit on all units in perpetuity, the loan amount has increased to $2,000,000, as of December 1, 2018 payment of $20,000 was not made and the loan amount became $2,020,000, a new monthly payment of $50,500 interest only will be due as of January 1, 2019, if the full $50,500 cannot be paid, then a partial payment will be made with the unpaid amount added to the principal, and a balloon payment of the balance of principal owed shall be made on December 1, 2023. | |||||||||||||||||||||||||
Increased loan amount | $ 2,000,000 | |||||||||||||||||||||||||
Debt monthly interest | 50,500 | |||||||||||||||||||||||||
Loan payment due | $ 20,000 | |||||||||||||||||||||||||
Debt interest rate | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | ||||||||||||||
Debt monthly payment | ||||||||||||||||||||||||||
Subsequent Event [Member] | Loan Agreement [Member] | Lucky Draw, LLC [Member] | ||||||||||||||||||||||||||
Accrued interest | $ 50,000 |