Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Apr. 10, 2018 | Jun. 30, 2017 | |
Entity Registrant Name | Alpine 4 Technologies Ltd. | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Trading Symbol | alpp | ||
Amendment Flag | false | ||
Entity Central Index Key | 1,606,698 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Public Float | $ 2,499,935 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Incorporation, State Country Name | Delaware | ||
Entity Incorporation, Date of Incorporation | Apr. 22, 2014 | ||
Common Class A | |||
Entity Common Stock, Shares Outstanding | 24,507,853 | ||
Common Class B | |||
Entity Common Stock, Shares Outstanding | 1,600,000 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Accounts receivable, net | $ 2,067,081 | |
Inventory | 1,212,546 | $ 930,114 |
Property and equipment, net | 9,198,387 | 5,202,133 |
Goodwill | 2,131,606 | |
Other non-current assets | 258,238 | 688,204 |
TOTAL ASSETS | 15,970,950 | |
CURRENT LIABILITIES: | ||
Derivative liabilities | 271,588 | |
Notes payable, current portion | 3,893,617 | 1,332,031 |
Notes payable, related parties | 387,000 | 205,000 |
Convertible notes payable, current portion, net of discount of $79,630 and $7,421 | (2,302,620) | (247,359) |
Financing lease obligation, current portion | 24,590 | |
NON-CURRENT LIABILITIES: | ||
Convertible notes payable, net of current portion | 1,660,106 | 1,760,198 |
Financing lease obligation, net of curent portion | 6,560,112 | |
Deferred tax liability | 181,703 | 287,153 |
Successor | ||
CURRENT ASSETS: | ||
Cash | 128,512 | 209,494 |
Accounts receivable, net | 2,067,081 | 1,346,585 |
Inventory | 1,212,546 | 930,114 |
Prepaid expenses and other current assets | 221,958 | 39,734 |
Total current assets | 3,630,097 | 2,525,927 |
Property and equipment, net | 9,198,387 | 5,202,133 |
Intangible asset, net | 752,622 | 757,528 |
Goodwill | 2,131,606 | 1,963,761 |
Other non-current assets | 258,238 | 688,204 |
Total non-current assets | 12,340,853 | 8,611,626 |
TOTAL ASSETS | 15,970,950 | 11,137,553 |
CURRENT LIABILITIES: | ||
Accounts payable | 1,980,995 | 1,434,170 |
Accrued expenses | 1,049,185 | 299,043 |
Deferred Revenue: current | 64,918 | 12,536 |
Derivative liabilities | 271,588 | |
Deposits | 12,509 | 12,509 |
Notes payable, current portion | 3,893,617 | 1,332,031 |
Notes payable, related parties | 387,000 | 205,000 |
Convertible notes payable, current portion, net of discount of $79,630 and $7,421 | 2,302,620 | 247,359 |
Financing lease obligation, current portion | 24,590 | 13,814 |
Income Tax Payable | 20,123 | |
Total current liabilities | 9,987,022 | 3,576,585 |
NON-CURRENT LIABILITIES: | ||
Long-term debt | 147,079 | |
Convertible notes payable, net of current portion | 1,660,106 | 1,760,198 |
Financing lease obligation, net of curent portion | 6,560,112 | 6,572,579 |
Deferred Revenue: non-current | 43 | |
Deferred tax liability | 181,703 | 287,153 |
Total non-current liabilities | 8,401,964 | 8,767,009 |
TOTAL LIABILITIES | 18,388,986 | 12,343,594 |
REDEEMABLE COMMON STOCK | ||
Class A Common stock, $0.0001 par value, 379,403 and 0 shares issued and outstanding at December 31, 2017 and 2016, respectively | 1,439,725 | |
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized,none issued and outstanding | ||
Additional paid-in capital | 16,573,632 | 16,228,106 |
Accumulated deficit | (20,433,875) | (17,436,455) |
Total stockholders' deficit | (3,857,761) | (1,206,041) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 15,970,950 | 11,137,553 |
Successor | Class A Common Stock | ||
STOCKHOLDERS' DEFICIT: | ||
Common stock | 2,322 | 2,148 |
Successor | Class B Common Stock | ||
STOCKHOLDERS' DEFICIT: | ||
Common stock | $ 160 | $ 160 |
CONSOLIDATED BALANCE SHEETS PAR
CONSOLIDATED BALANCE SHEETS PARENTHETICAL - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Discount, Convertible Debt | $ (79,630) | $ (7,421) |
Preferred stock par value | $ 0.0001 | |
Preferred stock shares authorized | 10,000,000 | |
Successor | ||
Debt Discount, Convertible Debt | $ 79,630 | $ 7,421 |
Class A Redeemable Common Stock par value | $ 0.0001 | |
Class A Redeemable Common Stock issued | 379,403 | |
Class A Redeemable Common Stock outstanding | 379,403 | |
Preferred stock par value | $ 0.0001 | |
Preferred stock shares authorized | 10,000,000 | |
Preferred stock shares issued | ||
Preferred stock shares outstanding | ||
Successor | Class A Common Stock | ||
Common stock par value | $ 0.0001 | $ 0.0001 |
Common stock shares authorized | 100,000,000 | 100,000,000 |
Common stock shares issued | 23,222,087 | 21,474,481 |
Common stock shares outstanding | 23,222,087 | 21,474,481 |
Successor | Class B Common Stock | ||
Common stock par value | $ 0.0001 | $ 0.0001 |
Common stock shares authorized | 5,000,000 | 5,000,000 |
Common stock shares issued | 1,600,000 | 1,600,000 |
Common stock shares outstanding | 1,600,000 | 1,600,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2017 | |
Revenue | $ 10,091,491 | ||
Gross Profit | 2,566,677 | ||
Other expenses | |||
Interest expense | (1,540,226) | ||
Change in value of derivative liabilities | 126,054 | ||
Income tax expense (benefit) | (258,392) | ||
Net loss | (2,997,420) | ||
Successor | |||
Revenue | $ 6,072,384 | 10,091,491 | |
Cost of revenue (exclusive of depreciation) | 4,239,850 | 7,524,814 | |
Gross Profit | 1,832,534 | 2,566,677 | |
Operating expenses: | |||
General and administrative expenses | 3,847,876 | 3,612,885 | |
Depreciation | 175,853 | 671,423 | |
Amortization | 56,626 | 92,080 | |
Total operating expenses | 4,080,355 | 4,376,388 | |
Loss from operations | (2,247,821) | (1,809,711) | |
Other expenses | |||
Interest expense | 959,308 | 1,540,226 | |
Change in value of derivative liabilities | 126,054 | ||
Other (income) | (17,429) | (220,179) | |
Total other expenses | 941,879 | 1,446,101 | |
Loss before income tax | (3,189,700) | (3,255,812) | |
Income tax expense (benefit) | (52,694) | (258,392) | |
Net loss | $ (3,137,006) | $ (2,997,420) | |
Weighted average shares outstanding : | |||
Weighted average shares outstanding: Basic | 21,294,890 | 23,858,031 | |
Weighted average shares outstanding: Diluted | 21,294,890 | 23,858,031 | |
Loss per share | |||
Loss per share: Basic | $ (0.15) | $ (0.13) | |
Loss per share: Diluted | $ (0.15) | $ (0.13) | |
Predecessor | |||
Revenue | $ 1,788,654 | ||
Cost of revenue (exclusive of depreciation) | 1,383,031 | ||
Gross Profit | 405,623 | ||
Operating expenses: | |||
General and administrative expenses | 533,894 | ||
Depreciation | 33,492 | ||
Amortization | |||
Total operating expenses | 567,386 | ||
Loss from operations | (161,763) | ||
Other expenses | |||
Interest expense | 456 | ||
Change in value of derivative liabilities | |||
Other (income) | |||
Total other expenses | 456 | ||
Loss before income tax | (162,219) | ||
Income tax expense (benefit) | (31,770) | ||
Net loss | $ (130,449) | ||
Weighted average shares outstanding : | |||
Weighted average shares outstanding: Basic | |||
Weighted average shares outstanding: Diluted | |||
Loss per share | |||
Loss per share: Basic | |||
Loss per share: Diluted |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT - USD ($) | Total | Common Class A | Common Class B | Additional Paid-In Capital | Accumulated Earnings / (Deficit) | Total Stockholders' Equity / (Deficit) |
Balance at Dec. 31, 2015 | $ 240,000 | $ (129,253) | $ 1,362,838 | $ 1,473,585 | ||
Balance - Shares at Dec. 31, 2015 | 240,000 | |||||
Balance at Mar. 31, 2016 | $ 2,092 | $ 160 | 13,903,376 | (14,299,449) | (393,821) | |
Balance - Shares at Mar. 31, 2016 | 20,920,069 | 1,600,000 | ||||
Balance at Dec. 31, 2015 | $ 240,000 | (129,253) | 1,362,838 | 1,473,585 | ||
Balance - Shares at Dec. 31, 2015 | 240,000 | |||||
Net gain/(loss) | (130,449) | (130,449) | ||||
Balance at Mar. 30, 2016 | $ 240,000 | (129,253) | 1,232,389 | 1,343,136 | ||
Balance - Shares at Mar. 30, 2016 | 240,000 | |||||
Balance at Mar. 31, 2016 | $ 2,092 | $ 160 | 13,903,376 | (14,299,449) | (393,821) | |
Balance - Shares at Mar. 31, 2016 | 20,920,069 | 1,600,000 | ||||
Issue shares of common stock for cash | Successor | $ 6,000 | |||||
Issue shares of common stock for cash | 6,000 | 6,000 | ||||
Issue shares of common stock for cash - shares | 670 | |||||
Issue shares of common stock to consultants for services | Successor | (591,039) | |||||
Issue shares of common stock to consultants for services | $ 7 | 591,032 | 591,039 | |||
Issue shares of common stock to consultants for services - shares | 66,784 | |||||
Issue shares of common stock for convertible note payable and accrued interest | $ 34 | 336,903 | 336,937 | |||
Issue shares of common stock for convertible note payable and accrued interest - shares | 336,938 | |||||
Issue shares of common stock to officers and directors for services | Successor | 1,274,985 | |||||
Issue shares of common stock to officers and directors for services | $ 15 | 1,274,985 | 1,275,000 | |||
Issue shares of common stock to officers and directors for services - shares | 150,000 | |||||
Issuance of warrants for acquisition of VWES | Successor | ||||||
Beneficial conversion feature associated with convertible notes | 115,810 | 115,810 | ||||
Adjustment for reverse stock split - shares | 20 | |||||
Net gain/(loss) | Successor | (3,137,006) | |||||
Net gain/(loss) | (3,137,006) | (3,137,006) | ||||
Balance (Successor) at Dec. 31, 2016 | (1,206,041) | |||||
Balance at Dec. 31, 2016 | $ 2,148 | $ 160 | 16,228,106 | (17,436,455) | (1,206,041) | |
Balance - Shares at Dec. 31, 2016 | 21,474,481 | 1,600,000 | ||||
Issue shares of common stock for cash | Successor | 40,000 | |||||
Issue shares of common stock for cash | $ 13 | 39,987 | 40,000 | |||
Issue shares of common stock for cash - shares | 132,209 | |||||
Issue shares of common stock to consultants for services | Successor | (62,084) | |||||
Issue shares of common stock to consultants for services | $ 57 | 62,027 | 62,084 | |||
Issue shares of common stock to consultants for services - shares | 578,640 | |||||
Issue shares of common stock for convertible note payable and accrued interest | Successor | 99,573 | |||||
Issue shares of common stock for convertible note payable and accrued interest | $ 89 | 99,484 | 99,573 | |||
Issue shares of common stock for convertible note payable and accrued interest - shares | 886,757 | |||||
Issue shares for discount on convertible note payable | $ 15 | 16,485 | 16,500 | |||
Issue shares for discount on convertible note payable - shares | 150,000 | |||||
Reclassification of derivative liability | (252,633) | (252,633) | ||||
Derivative liability resolution | (222,099) | 222,099 | 222,099 | |||
Issuance of warrants for acquisition of VWES | Successor | 40,941 | |||||
Issuance of warrants for acquisition of VWES | 40,941 | 40,941 | ||||
Share-based compensation expense | 87,136 | 87,136 | ||||
Beneficial conversion feature associated with convertible notes | 30,000 | 30,000 | ||||
Net gain/(loss) | Successor | (2,997,420) | |||||
Net gain/(loss) | (2,997,420) | (2,997,420) | (2,997,420) | |||
Balance (Successor) at Dec. 31, 2017 | $ (3,857,761) | |||||
Balance at Dec. 31, 2017 | $ 2,322 | $ 160 | $ 16,573,632 | $ (20,433,875) | $ (3,857,761) | |
Balance - Shares at Dec. 31, 2017 | 23,222,087 | 1,600,000 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
OPERATING ACTIVITIES: | ||||
Net loss | $ (2,997,420) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Change in value of derivative liabilities | 126,054 | |||
Amortization of debt discounts | 89,292 | $ 274,615 | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES: | ||||
Debt discount due to derivative liabilities | 115,000 | |||
Reclassification of warrants embedded conversion options as derivative liability | 252,633 | |||
Successor | ||||
OPERATING ACTIVITIES: | ||||
Net loss | $ (3,137,006) | (2,997,420) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation | 175,853 | 671,423 | ||
Amortization | 56,626 | 92,080 | ||
Loss on disposal of fixed assets | 18,841 | |||
Change in value of derivative liabilities | 126,054 | |||
Employee stock compensation | 1,275,000 | 87,136 | ||
Stock issued for services | 591,039 | 62,084 | ||
Amortization of debt issuance | 8,447 | 50,500 | ||
Amortization of debt discounts | 274,615 | 89,292 | ||
Change in current assets and liabilities: | ||||
Change in Accounts receivable | (187,411) | (506,436) | ||
Change in Inventory | 243,240 | (282,432) | ||
Change in Prepaids | (33,699) | (127,386) | ||
Change in Other non-current assets | 7,007 | |||
Change in Accounts payable | 256,937 | 546,825 | ||
Change in Accrued expenses | 203,246 | 723,733 | ||
Change in Income tax payable | (20,123) | |||
Change in Deferred tax | (59,157) | (105,450) | ||
Change in Deferred revenue | 11,538 | 52,425 | ||
Net cash used in operating activities | (320,732) | (1,511,847) | ||
INVESTING ACTIVITIES: | ||||
Capital expenditures | (267,401) | (192,805) | ||
Proceeds from insurance claim on Automobiles & Trucks | 237,732 | |||
Acquisition, net of cash acquired | (2,800,000) | (1,937,616) | ||
Net cash used in investing activities | (3,067,401) | (1,892,689) | ||
FINANCING ACTIVITIES: | ||||
Proceeds from issuances of notes payable, related party | 175,000 | 105,500 | ||
Proceeds from issuances of notes payable, non-related party | 3,630,631 | 1,952,390 | ||
Repayments of notes payable, non-related party | (2,482,825) | (247,084) | ||
Proceeds from line of credit, net | 709,201 | |||
Repayments of notes payable, related party | (1,535) | (223,500) | ||
Proceeds from convertible notes payable | 15,500 | 785,500 | ||
Repayments of convertible notes | (82,672) | (219,721) | ||
Proceeds from the sale of common stock | 6,000 | 40,000 | ||
Net Proceeds from financing obligation lease, net of commissions and financing charges | 2,704,260 | |||
Change in restricted cash | (641,537) | 422,959 | ||
Cash paid for rent deposit on lease of building | (46,667) | |||
Cash paid on financing lease obligation | (21,314) | (1,691) | ||
Net cash provided by (used in) financing activities | 3,254,841 | 3,323,554 | ||
NET INCREASE (DECREASE) IN CASH | (133,292) | (80,982) | ||
CASH, BEGINNING BALANCE | 342,786 | 209,494 | ||
CASH, ENDING BALANCE | $ 342,786 | 209,494 | 128,512 | 209,494 |
CASH PAID FOR: | ||||
Interest | 217,791 | 1,219,080 | ||
Income taxes | 2,167 | |||
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES: | ||||
Common stock issued for convertible note payable and accrued interest | 336,937 | 99,573 | ||
Common stock issued for convertible note discount | 16,500 | |||
Issuance of convertible note for acquisition of QCA | 2,000,000 | |||
Purchase of building from lease proceeds | 3,895,000 | |||
Issuance of convertible note for acquisition of VWES | 1,500,000 | |||
Issuance of note payable for acquisition of VWES | 300,000 | |||
Issuance of warrants for acquisition of VWES | 40,941 | |||
Issuance of redeemable common stock for acquisition of VWES | 1,439,725 | |||
Debt discount from convertible note payable | 115,810 | 30,000 | ||
Proceeds for refinancing line of credit and notes payable paid directly to former lender | 1,319,122 | |||
Debt discount due to derivative liabilities | 115,000 | |||
Reclassification of warrants embedded conversion options as derivative liability | $ 252,633 | |||
Predecessor | ||||
OPERATING ACTIVITIES: | ||||
Net loss | (130,449) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation | 33,492 | |||
Amortization | ||||
Loss on disposal of fixed assets | ||||
Change in value of derivative liabilities | ||||
Employee stock compensation | ||||
Stock issued for services | ||||
Amortization of debt issuance | ||||
Amortization of debt discounts | ||||
Change in current assets and liabilities: | ||||
Change in Accounts receivable | 47,578 | |||
Change in Inventory | (14,062) | |||
Change in Prepaids | (41,040) | |||
Change in Other non-current assets | ||||
Change in Accounts payable | 16,468 | |||
Change in Accrued expenses | 56,723 | |||
Change in Income tax payable | ||||
Change in Deferred tax | (41,645) | |||
Change in Deferred revenue | ||||
Net cash used in operating activities | (72,935) | |||
INVESTING ACTIVITIES: | ||||
Capital expenditures | ||||
Proceeds from insurance claim on Automobiles & Trucks | ||||
Acquisition, net of cash acquired | ||||
Net cash used in investing activities | ||||
FINANCING ACTIVITIES: | ||||
Proceeds from issuances of notes payable, related party | ||||
Proceeds from issuances of notes payable, non-related party | ||||
Repayments of notes payable, non-related party | ||||
Proceeds from line of credit, net | ||||
Repayments of notes payable, related party | (10,000) | |||
Proceeds from convertible notes payable | ||||
Repayments of convertible notes | (59,461) | |||
Proceeds from the sale of common stock | ||||
Net Proceeds from financing obligation lease, net of commissions and financing charges | ||||
Change in restricted cash | ||||
Cash paid for rent deposit on lease of building | ||||
Cash paid on financing lease obligation | ||||
Net cash provided by (used in) financing activities | (69,461) | |||
NET INCREASE (DECREASE) IN CASH | (142,396) | |||
CASH, BEGINNING BALANCE | 365,221 | $ 222,825 | $ 365,221 | |
CASH, ENDING BALANCE | 222,825 | |||
CASH PAID FOR: | ||||
Interest | 456 | |||
Income taxes | 47,500 | |||
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES: | ||||
Common stock issued for convertible note payable and accrued interest | ||||
Common stock issued for convertible note discount | ||||
Issuance of convertible note for acquisition of QCA | ||||
Purchase of building from lease proceeds | ||||
Issuance of convertible note for acquisition of VWES | ||||
Issuance of note payable for acquisition of VWES | ||||
Issuance of warrants for acquisition of VWES | ||||
Issuance of redeemable common stock for acquisition of VWES | ||||
Debt discount from convertible note payable | ||||
Proceeds for refinancing line of credit and notes payable paid directly to former lender | ||||
Debt discount due to derivative liabilities | ||||
Reclassification of warrants embedded conversion options as derivative liability |
Note 1 - Description of Busines
Note 1 - Description of Business | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
Note 1 - Description of Business | Note 1 – Description of Business Alpine 4 Technologies Ltd. ("we" or the "Company") was incorporated under the laws of the State of Delaware on April 22, 2014. The Company was formed to serve as a vehicle to affect an asset acquisition, merger, exchange of capital stock, or other business combination with a domestic or foreign business. As of the date of this Report, the Company is a technology holding company owning three companies (ALTIA, LLC; Quality Circuit Assembly, Inc. ("QCA"); and Venture West Energy Services (“VWES”) (formerly Horizon Well Testing, LLC). For 2016 QCA made up most of the revenue for the consolidated financials. VWES Acquisition Reporting As discussed in Note 9, the Company entered into a stock purchase transaction with QCA in which the Company purchased 100% of QCA's outstanding stock. The consolidated financial statements herein are presented under predecessor entity reporting and because the acquiring entity had nominal operations as compared with the acquired company, QCA, prior historical information of the acquirer is not presented. This new basis of accounting was created on April 1, 2016, the effective date for financial reporting purposes of the stock purchase agreement. In the following discussion, the results of the operations and cash flows for the periods ended on or prior to March 31, 2016, and the financial position of QCA as of balance sheet date on or prior to March 31, 2016 are referred to as "Predecessor" financial information, and the results of operations and cash flows of the Company for periods beginning April 1, 2016 and the financial position of the Company as of April 1, 2016 and subsequent balance sheet dates are referred to herein as "Successor" consolidated financial information. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
Note 2 - Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of December 31, 2017 and 2016. Significant intercompany balances and transactions have been eliminated. Basis of presentation The accompanying financial statements present the balance sheets, statements of operations, stockholders' deficit and cash flows of the Company. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information, information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates. Advertising Advertising costs are expensed when incurred. All advertising takes place at the time of expense. We have no long-term contracts for advertising. Advertising expense for all periods presented were not significant. Cash Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days. Cash equivalents are placed with high credit quality financial institutions and are primarily in money market funds. The carrying value of those investments approximates fair value. As of December 31, 2017 and 2016, the Company had no cash equivalents. Major Customers The Company had two customers that made up 41% and 13% of accounts receivable as of December 31, 2017. For the year ended December 31, 2017, the Company had one customer that made up 36% of total revenues. The Company had two customers that made up approximately 50% of outstanding accounts receivable as of December 31, 2016. These same two customers comprised approximately 50% of total revenues for the nine months ended December 31, 2016 (Successor). Accounts Receivable The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. As of December 31, 2017 and 2016, we had an allowance for bad debt of $18,710 and $0 , respectively. Inventory Inventory is valued at the lower of the inventory's cost (weighted average basis) or the net realizable value of the inventory. Management compares the cost of inventory with its net realizable value and an allowance is made to write down inventory to net realizable value, if lower. Inventory is segregated into four areas, raw materials, WIP, finished goods, and In-Transit. December 31, 2017 December 31, 2016 Raw materials $ 577,259 $ 527,599 WIP 440,586 193,525 Finished goods 161,310 195,990 In Transit 33,391 13,000 $ 1,212,546 $ 930,114 Property and Equipment Property and equipment are carried at cost less depreciation. Depreciation and amortization are provided principally on the straight-line method over the estimated useful lives of the assets, which range from ten years to 39 years as follows: Automobiles & Trucks 10 to 20 years Buildings 39 years Leasehold Improvements 15 years or time remaining on lease (whichever is shorter) Equipment 10 years Maintenance and repair costs are charged against income as incurred. Significant improvements or betterments are capitalized and depreciated over the estimated life of the asset. Property and equipment consisted of the following as of December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Automobiles & Trucks $ 1,208,935 $ - Machinery & Equipment 4,454,466 1,263,941 Office furniture & fixtures 7,056 - Building 3,945,952 3,895,000 Land 126,347 - Leasehold Improvements 294,524 219,045 Less: Accumulated Depreciation (838,893) (175,853) $ 9,198,387 $ 5,202,133 Purchased Intangibles and Other Long-Lived Assets The Company amortizes intangible assets with finite lives over their estimated useful lives, which range between five and fifteen years as follows: Customer List 15 years Non-compete agreements 15 years Software development 5 years Intangible assets consisted of the following as of December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Software $ 278,474 $ 191,300 Noncompete 100,000 100,000 Customer Lists 531,187 531,187 Less: Accumulated Amortization (157,039) (64,959) $ 752,622 $ 757,528 Expected amortization expense of intangible assets over the next 5 years and thereafter is as follows. 2018 2019 2020 2021 2022 Thereafter Total Software 33,332 33,332 33,332 33,332 19,734 - 153,062 Non-compete 35,000 20,000 20,000 20,000 - - 95,000 Customer List 26,627 26,627 26,627 26,627 26,627 371,425 504,560 Total Accumulated Amortization 94,959 79,959 79,959 79,959 46,361 371,425 752,622 Other long-term assets consisted of the following as of December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Restricted Cash $ 207,311 $ 630,270 Deposits 50,927 57,934 $ 258,238 $ 688,204 Restricted cash consists of deposit account collateralizing letters of credit in favor of the counterparty in our lease financing obligation. Changes in restricted cash are reflected as financing activities because the cash is being used in conjunction with financing activities. Impairment of Long-Lived Assets The Company accounts for long-lived assets in accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 360, "Accounting for the Impairment of Long-Lived Assets." This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the estimated future cash flows from the use of the asset are less than the carrying amount of that asset. During all periods presented, there have been no impairment losses. Goodwill In financial reporting, goodwill is not amortized, but is tested for impairment annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Events that result in an impairment review include significant changes in the business climate, declines in our operating results, or an expectation that the carrying amount may not be recoverable. We assess potential impairment by considering present economic conditions as well as future expectations. All assessments of goodwill impairment are conducted at the individual reporting unit level. As of December 31, 2017, the reporting units with goodwill were QCA and VWES. The Company used qualitative factors according to ASC 350-20-35-3 to determine whether it is more likely than not that the fair value of goodwill is less than its carrying amount. Based on the qualitative criteria the company believes there not to be any triggers for potential impairment of goodwill and therefore the Company has recorded no impairment of goodwill in any period presented. Fair Value Measurement The Company's financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, convertible notes, notes and line of credit. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements. For additional information, see Note 11 – Derivative Liabilities and Fair Value Measurements. Redeemable Common Stock As discussed in Note 9 below, 379,403 shares of the Company’s Class A common stock that were issued as consideration for the VWES Revenue Recognition ALTIA The Company accounts for its revenue per the guidance in ASC 605-25-25 by allocating the total contract amount between the product and service elements. When a vehicle is sold to the driving consumer who purchases the 6th Sense Auto service, the cost of the service is added to the price of the car and the amount collected by the dealership for this service is remitted to the Company. At the time the vehicle is purchased, the Company recognizes the service portion of the contract over the service period of generally 12 to 36 months. Quality Circuit Assembly The Company accounts for its revenue per the guidance in ASC 605-25-25 by allocating the total contract amount between the product and service elements. Revenue is recognized when either the product has completely been built and shipped or the service has been completed. If a deposit for product or service is received prior to completion the payment is recorded to deferred revenue until such point the product or services meets our revenue recognition policy. Management assesses the materiality and likelihood of warranty work and returns and records reserves as needed. For all periods presented management determined that the warranty and returns would be immaterial. VWES Revenue is recognized when the contract has been performed in completion. Contracts range from one day to 30 days in length. Leases Leases are reviewed by management and examined to see if they are required to be categorized as an operating lease, a capital lease or a financing transaction. Earnings (loss) per share Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. The only potentially dilutive securities outstanding during the periods presented were the convertible debentures, but they are anti-dilutive due to the net loss incurred. All earnings (loss) per common share have been adjusted retroactively for periods presented to reflect changes in number of shares as a result of the reverse stock split amount. Stock-based compensation The Company accounts for equity instruments issued to employees for compensation in accordance with FASB ASC 718-10, Compensation – Stock Compensation. The Company accounts for equity instruments issued to non-employees in accordance with FASB ASC 505-50, Equity – Equity-Based Payments to Non-Employees. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment is reached or completion of performance by the provider of goods or services as defined by FASB ASC 505-50. Income taxes The Company records income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carry forwards. Accounting standards regarding income taxes require a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if, based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on a more-likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry forward periods, the Company's experience with operating loss and tax credit carry forwards not expiring unused, and tax planning alternatives. The Company recorded valuation allowances on the net deferred tax assets. Management will reassess the realization of deferred tax assets based on the accounting standards for income taxes each reporting period. To the extent that the financial results of operations improve and it becomes more likely than not that the deferred tax assets are realizable, the Company will be able to reduce the valuation allowance. Significant judgment is required in evaluating the Company's tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely, based solely on the technical merits, of being sustained on examinations. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt under ASC 815 "Derivatives and Hedging" to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 "Debt with Conversion and Other Options" for consideration of any beneficial conversion features. Related Party Disclosure FASB ASC 850, "Related Party Disclosures" requires companies to include in their financial statements disclosures of material related party transactions. The Company discloses all material related party transactions. Related parties are defined to include any principal owner, director or executive officer of the Company and any immediate family members of a principal owner, director or executive officer. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2014-09 (Topic 606) "Revenue from Contracts with Customers." Topic 606 supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition”, and requires entities to recognize revenue when they transfer control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. We intend to adopt Topic 606 in the first quarter of 2018 using the modified retrospective transition method applied to those contracts which were not completed as of that date. Upon adoption, we will recognize the cumulative effect of adopting this guidance as an adjustment to our opening balance of retained earnings. Prior periods will not be retrospectively adjusted. We expect the adoption of Topic 606 will likely not have a material impact to our revenues and net loss presented in the consolidated statement of operations. However, the Company does expect to have significant changes to the footnote disclosures as a result of implementing this new standard. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases (FAS 13) Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements. |
Note 3 - Going Concern
Note 3 - Going Concern | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
Note 3 - Going Concern | Note 3 – Going Concern The accompanying financial statements have been prepared on a going concern basis. The working capital of the Company is currently negative and causes doubt of the ability for the Company to continue. The Company requires capital for its operational and marketing activities. The Company's ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company's plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties. In order to mitigate the risk related with this uncertainty, the Company has a three-fold plan to resolve these risks. First, the acquisition of QCA has allowed for an increased level of cash flow to the Company as demonstrated in the sales for the second and third quarters of 2016. Second, the Company has acquired VWES |
Note 4 - Leases
Note 4 - Leases | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
Note 4 - Leases | Note 4 – Leases During the nine months ending December 31, 2016 (Successor), the Company entered into a financing transaction for a building. The Company bought the property for $3,895,000 and subsequently sold the property for $7,000,000 to an unrelated third-party real estate company and simultaneously entered into an arrangement with the third-party real estate company to lease back the property. Because the leaseback was not a typical leaseback, this transaction is recorded as a financing transaction with the asset and related financing obligation recorded on the balance sheet. The lease has a 15-year term expiring in 2031 and certain default provisions requiring the Company to perform repairs and maintenance, make timely rent payments and insure the building. The Company also issued a letter of credit for $630,270 in favor of the landlord. The letter of credit is collateralized by a savings account which is classified as restricted cash under non-current assets. The remaining payments under the financing transaction as of December 31, 2016 (Successor), total $9,762,396. Imputed interest of $3,176,003 is being amortized over the lease term with an effective interest rate of 7.80%. The Company paid costs of $54,898 and a commission of $350,000 in conjunction with the transaction, which is characterized as debt issuance costs and will be amortized over the lease term. The current unamortized balance of the debt issuance costs is $348,542 and in accordance with ASU 2015-03 debt issuance costs are reflected as a contra-liability reducing the related financing lease obligation. As of December 31, 2017, the future minimum capital lease and financing transaction payments, net of amortization of debt issuance costs, are as follows: Fiscal Year 2018 $ 584,763 2019 599,382 2020 614,366 2021 629,725 2022 645,468 Thereafter 7,315,821 Total 10,389,525 Less: Current capital leases and financing transaction (24,590) Less: imputed interest (3,804,823) Noncurrent capital leases and financing transaction $ 6,560,112 The Company also has a commitment to pay $276,000 towards Leasehold Improvements, of which $276,000 has been satisfied and reflected on the balance sheet as of December 31, 2017. The money received from the sale of the building was used to purchase Quality Circuit Assembly. Because this is a financing transaction, the sale is recorded under financing obligation lease on the Balance Sheet and amortized over the 15-year term of the lease. The term of the lease has been extended through September 30, 2032, at a monthly rate of approximately $69,000. These payments are reflected in the table above. A letter of credit of $1,000,000 is to be provided to landlord, of which $207,311 (per FN1) had been satisfied as of December 31, 2017. Operating Leases The company also had three operating leases as of December 31, 2017 (Successor), for its location in San Jose, CA (QCA), Phoenix, AZ (Alpine), and Oklahoma City, OK ( VWES The five-year minimum rent payments for each location are as follows: Fiscal Year San Jose, CA Phoenix, AZ Oklahoma City, OK Total 2018 $ 266,134 $ - $ 60,000 $ 326,134 2019 274,118 - 35,000 309,118 2020 282,342 - - 282,342 2021 290,812 - - 290,812 Thereafter - - - - Total $ 1,113,406 $ - $ 95,000 $ 1,208,406 The San Jose, CA, rent agreement expires at the end of 2021. The Phoenix, AZ, rent agreement expired at the end of May 2017 and went to a monthly rent agreement. The Oklahoma City, OK rent agreement expires end of August 2019. Rent expense for the year ended December 31, 2017, three months ended March 31, 2016 (Predecessor), and nine months ended December 31, 2016 (Successor), were $528,673, $58,459 and $185,157, respectively. |
Note 5 - Notes Payable
Note 5 - Notes Payable | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
Note 5 - Notes Payable | Note 5 – Notes Payable During the nine months ended December 31, 2016 (Successor), QCA secured a line of credit with a third-party lender, Crestmark. The line of credit is collateralized by QCA's outstanding accounts receivable, up to 90%, and inventory, up to 30% with maximum draws of $2,500,000 and a variable interest rate. The Company also secured a five-year fixed rate (10.14%) term loan with Crestmark which is collateralized by QCA's equipment. During the year ended December 31, 2017, VWES secured a line of credit with a third-party lender, Crestmark. The line of credit is collateralized by VWES's outstanding accounts receivable, up to 85% with maximum draws of $2,000,000 and a variable interest rate. The Company also secured a five-year fixed rate (10.14%) term loan with Crestmark Equipment Finance for $1,872,392 which is collateralized by VWES's equipment. Both are guaranteed by the Company. During the year ended December 31, 2017, the Company also entered into four fixed rate (30.00%) term notes with maturity dates of two, three and six months for a total of $80,000, of which $70,000 had been repaid as of December 31, 2017. The outstanding balances for the loans were as follows: December 31, 2017 Alpine 4 QCA VWES Total Lines of credit $ - $ 1,657,611 $ 354,505 $ 2,012,116 Equipment loans - 147,079 1,724,422 1,871,501 Term notes 10,000 - - 10,000 Total current $ 10,000 $ 1,804,690 $ 2,078,927 $ 3,893,617 Long-term - - - - Total notes payable $ 10,000 $ 1,804,690 $ 2,078,927 $ 3,893,617 December 31, 2016 Alpine 4 QCA VWES Total Lines of credit $ - $ 1,302,915 $ - $ 1,302,915 Equipment loans - 29,116 - 29,116 Term notes - - - - Total current $ - $ 1,332,031 $ - $ 1,332,031 Long-term - 147,079 - 147,079 Total notes payable $ - $ 1,479,110 $ - $ 1,479,110 As of December 31, 2017, the equipment loans for QCA and VWES are classified as current due to the notes being in default and fully callable by the lender. |
Note 6 - Notes Payable, Related
Note 6 - Notes Payable, Related Parties | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
Note 6 - Notes Payable, Related Parties | Note 6 – Notes Payable, Related Parties At December 31, 2017 and 2016, notes payable due to related parties consisted of the following: December 31, 2017 December 31, 2016 Note payable; non-interest bearing; due upon demand; unsecured $ - $ 15,000 Note payable; non-interest bearing; due upon demand; unsecured - 15,000 Note payable; bearing interest at 8% per annum; due May 31, 2017; unsecured - 5,000 Notes payable; non-interest bearing; due upon demand; unsecured 4,500 - Note payable; bearing interest at a flat rate of $2,000; due January 10, 2017; unsecured - 60,000 Note payable; non-interest bearing; due March 2, 2017; unsecured - - Note payable; non-interest bearing; due March 14, 2017; unsecured - - Note payable; non-interest bearing; due April 11, 2017; unsecured - - Note payable; bearing interest at 3.33% per month for the first 90 days and 2.22% per month thereafter; due May 26, 2017; unsecured 43,500 - Note payable; bearing interest at 8% per annum; due June 30, 2017; unsecured 7,500 10,000 Note payable; bearing interest at 36% per annum; due May 31, 2017; secured - 100,000 Note payable; bearing at 1% per annum; due July 31, 2017; secured 300,000 - Note payable; bearing at 30% per annum; due March 3, 2018; unsecured 11,500 - Note payable; bearing at 20% per annum; due April 28, 2018; unsecured 20,000 - Total notes payable - related parties $ 387,000 $ 205,000 The above notes which are in default as of December 31, 2017, are now due on demand by the lender. The secured note for $300,000 outstanding at December 31 2017, is subordinated debt secured by all assets of VWES |
Note 7 - Convertible Notes Paya
Note 7 - Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
Note 7 - Convertible Notes Payable | Note 7 – Convertible Notes Payable At December 31, 2017 and 2016, convertible notes payable consisted of the following: December 31, 2017 December 31, 2016 Series of convertible notes payable issued prior to December 31, 2016, bearing interest at rates of 8% - 20% per annum, with due dates ranging from April 2016 through October 2017. The outstanding principal and interest balances are convertible into shares of Class A common stock at the option of the debt holder at an exercise price of $1 per share. $ 40,000 $ 92,650 Secured convertible notes payable issued to the sellers of QCA on April 1, 2016 (see Note 9) for an aggregate of $2,000,000, bearing interest at 5% per annum, due in monthly payments starting on July 1, 2016 and due in full on July 1, 2019. The outstanding principal and interest balances are convertible after 12 months into Class A common stock at the option of the debt holder at a conversion price of $10 per share. 1,827,108 1,922,328 Secured convertible note payable issued to the seller of HWT on January 1, 2017 (see Note 9) for an aggregate of $1,500,000, bearing interest at 5% per annum, due in full on July 1, 2018. The outstanding principal and interest balances are convertible after 12 months into Class A common stock at the option of the debt holder at a conversion price of $8.50 per share. 1,500,000 - Series of convertible notes payable issued in January 2017, bearing interest at rates of 10% per annum, and due in January 2018. The outstanding principal and interest balances are convertible into shares of Class A common stock at the option of the debt holder at an exercise price of $1 per share. 30,000 - On July 13, 2017, the Company entered into a variable convertible note for $43,000 with net proceeds of $40,000. The note is due April 30, 2018 and bears interest at 12% per annum. After 180 days, the note is convertible into shares of Class A common stock at a discount of 38% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion. The Company can prepay the note up to 180 days prior to the due date, with the prepayment penalty ranging from 10% to 27% depending on when prepaid. 43,000 - On July 19, 2017, the Company entered into a variable convertible note for $115,000 with net proceeds of $107,000. The note is due January 21, 2018 and bears interest at 10% per annum. The note is immediately convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion. The Company can prepay the convertible note up to 180 days from July 19, 2017. The Company issued 500,000 shares of Class A common stock to the note holder which are returnable if no event of default has occurred and the note is paid in full within 180 days of the note date. Management has determined that it is probable that the Company will meet the conditions under the note and therefore it more likely than not that the Company will not be in default as defined in the note and the note will be paid in full within 180 days of the note date. As a result, management has concluded that it is probable that the shares would be returned and therefore the cost of issuance has not been recorded as of December 31, 2017. The Company will reassess the likelihood of such at each period end. This is accounted for as a derivative liability, so a debt discount from derivative liabilities of $115,000 was recognized and is being amortized over the term of the agreement. See Note 11 – Derivative Liabilities and Fair Value Measurements for more details. 72,748 - On September 5, 2017, the Company entered into a variable convertible note for $105,000 with net proceeds of $100,000. The note is due September 5, 2018 and bears interest at 10% per annum. After 180 days, the note is convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion. The Company can prepay the convertible note up to 180 days from September 5, 2017. The prepayment penalty is equal to 10% to 25% of the outstanding note amount depending on the prepayment date. 105,000 - On October 4, 2017, the Company entered into a variable convertible note for $60,000 with net proceeds of $55,000. The note is due July 4, 2018 and bears interest at 12% per annum. After 180 days, the note is convertible into shares of Class A common stock at a discount of 35% of the lowest trading price during the previous ten days prior to conversion. The Company can prepay the convertible note up to 180 days from October 4, 2017. The prepayment penalty is equal to 10% to 25% of the outstanding note amount depending on the prepayment date. 60,000 - On October 11, 2017, the Company entered into a variable convertible note for $58,500 with net proceeds of $55,500. The note is due on July 20, 2018 and bears interest at 12% per annum. After 180 days, the note is convertible into shares of Class A common stock at a discount of 38% of the average of the three lowest trading prices of the stock for ten days prior to conversion. The Company can prepay the convertible note up to 180 days from October 11, 2017. The prepayment penalty is equal to 10% to 27% of the outstanding note amount depending on the prepayment date. 58,500 - On November 2, 2017, the Company entered into a variable convertible note for $115,000 with net proceeds of $107,000. The note is due May 2, 2018 and bears interest at 10% per annum. The note is immediately convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion. The Company issued 150,000 shares to the lender with this note, which has been recorded as a discount. 115,000 - On November 28, 2017, the Company entered into a variable convertible note for $105,000 with net proceeds of $100,000. The note is due November 28, 2018 and bears interest at 10% per annum. After 180 days, the note is convertible into shares of Class A common stock at a discount of 35% of the average of the three lowest trading price during the previous ten days prior to conversion. The Company can prepay the convertible note up to 180 days from November 28, 2017. The prepayment penalty is equal to 10% to 25% of the outstanding note amount depending on the prepayment date. 105,000 - On December 6, 2017, the Company entered into a variable convertible note for $86,000 with net proceeds of $79,000. The note is due June 6, 2018 and bears interest at 10% per annum. After 180 days at the maturity date, the note is convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion. 86,000 - Total convertible notes payable 4,042,356 2,014,978 Less: discount on convertible notes payable (79,630) (7,421) Total convertible notes payable, net of discount 3,962,726 2,007,557 Less: current portion of convertible notes payable (2,302,620) (247,359) Long-term portion of convertible notes payable $ 1,660,106 $ 1,760,198 The discounts on convertible notes payable arise from beneficial conversion features ("BCF"), as well as conversion features of certain convertible notes being treated as derivative liabilities (see Note 11). Total BCF debt discounts recorded during the years ended December 31, 2017 and 2016, amounted to $30,000 and $115,810, respectively. The debt discount recorded relating to derivative liabilities during the years ended December 31, 2017 and 2016, amounted to $115,000 and $0, respectively. The discounts are being amortized over the terms of the convertible notes payable. Amortization of debt discounts during the years ended December, 31 2017 and 2016, amounted to $89,292 and $274,615, respectively, and is recorded as interest expense in the accompanying consolidated statements of operations. The unamortized discount balance for these notes was $79,630 as of December 31, 2017, which is expected to be amortized in 2018. Future scheduled maturities of outstanding convertible notes payable are as follows: Year Ended December 31, 2018 $ 2,302,620 2019 1,660,106 Total $ 3,962,726 A summary of the activity in the Company’s convertible notes payable is provided below: Convertible Notes Activity Balance outstanding, April 1, 2016 (Successor) $ 131,928 Issuance of convertible notes payable for acquisition of QCA 2,000,000 Issuance of convertible notes payable for cash 15,500 Repayment of notes (82,672) Conversion of notes payable into common stock (216,004) Discount from beneficial conversion feature (115,810) Amortization of debt discount 274,615 Balance outstanding, December 31, 2016 2,007,557 Issuance of convertible notes payable for acquisition of VWES 1,500,000 Issuance of convertible notes payable for cash 836,000 Repayment of notes (219,721) Conversion of notes payable to common stock (88,902) Discount from issuance of common stock (16,500) Discount from beneficial conversion feature (30,000) Discount from derivative liabilities (115,000) Amortization of debt discounts 89,292 Balance outstanding, December 31, 2017 $ 3,962,726 |
Note 8 - Stockholders' Equity
Note 8 - Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
Note 8 - Stockholders' Equity | Note 8 – Stockholders' Equity Preferred Stock The Company is authorized to issue 10,000,000 shares of $0.0001 par value preferred stock. As of December 31, 2017, no shares of preferred stock were outstanding. Common Stock Pursuant to the Second Amended and Restated Certificate of Incorporation, the Company is authorized to issue two classes of common stock: Class A common stock, which have one vote per share, and Class B common stock, which have ten votes per share. Any holder of Class B common stock may convert his or her shares at any time into shares of Class A common stock on a share-for-share basis. Otherwise the rights of the two classes of common stock are identical. The Company had the following transactions in its common stock during the year ended December 31, 2017: Issued 578,640 shares of its Class A common stock for services. Total expense for the shares issued for services was $62,084; Issued 886,757 shares of its Class A common stock in connection with the conversion of convertible notes payable and accrued interest with a value of $99,573; Issued 132,209 shares of the Company's restricted Class A common stock in private placement transactions to investors, in exchange for capital raised of $40,000; Issued Class A common stock to a lender, as described in note 7. The Company had the following transactions in its common stock during the nine months ended December 31, 2016 (Successor): issued 218,784 (150,000 to related parties) shares of its Class A common stock for services, of which the related party shares all are fully vested. Total expense for shares issue was $1,866,039 ( 1274985 issued 3 36938 issued 670 shares of the Company's restricted Class A common stock in private placement transactions to investors, in exchange for capital raised of $6,000. There were no equity transactions related to the Predecessor Company during any Predecessor period presented. Stock Options During the year ended December 31, 2017, the following stock options were issued to purchase one share each of the Company's Class A common stock. The options were issued pursuant to the Company's 2016 Stock Option and Stock Award Plan (the "Plan"). The Company uses the Black-Scholes option pricing model to estimate the fair value of stock-based awards on the date of grant and on each modification date using the following assumptions. Expected dividend yield 0 % Weighted average expected volatility 200 % Weighted average risk-free interest rate 2.38 % Expected life of options 6.25 years On April 7, 2017, the Company issued 741,500 options to employees and consultants of the Company. The options granted vest over the next four years, and the exercise price of the options granted is $0.90, which was the last closing bid price of the Company's common stock as traded on the OTC QB Market. The stock options are valued at $586,972 which will be expensed quarterly over the vesting period. On May 3, 2017, the Company issued 114,000 options to an employee. The options granted vest over the next four years and the exercise price of the options granted is $0.26, which was the last closing bid price of the Company's common stock as traded on the OTC QB Market. The stock options are valued at $29,298 which will be expensed quarterly over the vesting period. On July 31, 2017, the Company issued 488,500 options to employees and consultants of the Company. The options granted vest over the next four years, and the exercise price of the options granted is $0.13, which was the last closing bid price of the Company's common stock as traded on the OTC QB Market. The stock options are valued at $62,773 which will be expensed quarterly over the vesting period. The following summarizes the stock option activity for the year ended December 31, 2017. There was no option activity during 2016. Weighted- Weighted- Average Average Remaining Exercise Contractual Options Price Life (Years) Outstanding at December 31, 2016 - $ - - Granted 1,344,000 0.57 Forfeited (561,750) 0.77 Exercised - - Outstanding at December 31, 2017 782,250 $ 0.42 9.44 Vested and expected to vest at December 31, 2017 782,250 $ 0.42 9.44 Exercisable at December 31, 2017 98,625 $ 0.64 9.35 The following table summarizes information about options outstanding and exercisable as of December 31, 2017. Options Outstanding Options Exercisable Weighted Weighted Weighted Average Average Average Exercise Number Remaining Exercise Number Exercise Price of Shares Life (Years) Price of Shares Price $ 0.13 394,750 9.59 $ 0.13 21,875 $ 0.13 0.26 114,000 9.34 0.26 14,250 0.26 0.90 273,500 9.27 0.90 62,500 0.90 782,250 98,625 During the year ended December 31, 2017 and 2016, stock option expense amounted to $87,136 and $0, respectively. Unrecognized stock option expense as of December 31, 2017 amounted to $241,247, which will be recognized over a period extending through September 2021. Warrants On January 1, 2017, the Company granted 75,000 warrants to the seller of VWES. The warrants have a 3 year contractual life, an exercise price of $4.25 per share and are vested immediately. The warrants were accounted for as part of the purchase price of the acquisition of VWES (see Note 9). During the year ended December 31, 2017, the Company granted an aggregate total of 2,001 warrants to individuals. These warrants all have a 3 year contractual life, an exercise price of $2.00 per share and are vested immediately. Reverse Stock Split On July 29, 2016, the Company adopted a resolution approved by the shareholders to effectuate a reverse stock split at a ratio of one (1) new share for each ten (10) old shares of the Company's commons stock (the "Reverse Split"). By its terms, the Reverse Split would only reduce the number of outstanding shares of Class A and Class B common stock, and would not correspondingly reduce the number of Class A and Class B common shares authorized for issuance, which remained at 500,000,000 and 100,000,000, respectively. The financial statements have been retrospectively restated to reflect the reverse split. Subsequently, on December 15, 2017, the Company amended its Certificate of Incorporation to reduce the number of shares of Class A common stock it was authorized to issue from 500,000,000 to 100,000,000, and to reduce the number of shares of Class B common stock it was authorized to issue from 100,000,000 to 5,000,000. That amendment also increased the number of shares of preferred stock the Company was authorized to issue from 5,000,000 to 10,000,000. |
Note 9 - Business Combination
Note 9 - Business Combination | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
Note 9 - Business Combination | Note 9 – Business Combination Quality Circuit Assembly Effective April 1, 2016 the Company Purchased 100% of the outstanding stock (the "QCA Shares") of QCA. The purchase price paid by the Company for the QCA Shares consisted of cash and a convertible promissory note. The "Cash Consideration" paid was the aggregate amount of $3,000,000 ($2,800,00 form the financing lease obligation and $200,000 from the LOC). The "Promissory Note Consideration" consisted of a secured promissory note (the "Quality Circuit Assembly Note") in the amount of $2,000,000, secured by a subordinated security interest in the assets of QCA. Additionally, the Sellers have the opportunity to convert the Quality Circuit Assembly Note into shares of the Company's Class A common stock at a conversion price of $10 per share after 12 months (see Note 7). A summary of the final purchase price allocation at fair value is below: Purchase Allocation Cash $ 200,000 Accounts Receivable 1,158,995 Inventory 950,424 Property, Plant & Equipment 1,256,885 Prepaid 6,035 Intangibles 631,187 Goodwill 1,963,761 Accounts Payable (672,410 ) Accrued Expenses (128,444 ) Income Tax Payable (20,123 ) Deferred Tax Liability (346,310 ) $ 5,000,000 During nine months ended December 31, 2016 (Successor), an adjustment was made to the purchase price allocation based on additional information. Accounts receivable increased by $63,576, Inventory increased by $19,641, Prepaid decreased by $47,500, Intangibles increased by $481,187, Accounts Payable increased by $19,782, Income Tax Payable increased by $20,123 and Goodwill decreased by $476,999. Venture West Energy Services/Horizon Well Testing Effective January 1, 2017, the Company Purchased 100% of the outstanding interests of Venture West Energy Services (“VWES”) (formerly Horizon Well Testing, LLC). Alpine 4 purchased 100% of the outstanding interests of VWES A summary of the preliminary purchase price allocation at fair value is below. Purchase Allocation Cash $ 262,384 Accounts Receivable, net 245,833 Property, Plant & Equipment 4,804,458 Intangibles - Goodwill 167,845 Accrued Expenses (25,086 ) Total consideration $ 5,455,434 During the year ended December 31, 2017 an adjustment was made to the purchase price allocation based on additional information. Intangibles decreased by $123,240, Property, Plant & Equipment increased by $273,459 and Goodwill decreased by $150,219. Unaudited pro forma results of operations for the twelve months ended December 31, 2016, as if the Companies (Alpine, QCA & VWES Pro Forma Combined Financials Twelve Months Ended December 31, 2016 Revenue $ 11,291,315 Net (Loss) Income $ (3,905,706 ) Net (Loss) Income per Common Share - Basic and Diluted $ (0.18 ) |
Note 10 - Income Taxes
Note 10 - Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
Note 10 - Income Taxes | Note 10 – Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. During the year ended December 31, 2017, the Company received a tax benefit of $152,942 from the ability to carryback a portion of its net operating losses to prior period, which is a component of the total tax benefit of $258,392 for 2017. A full valuation allowance is established against the remaining net deferred tax assets as of December 31, 2017 and 2016 based on estimates of recoverability. The Company determined that such a valuation allowance was necessary given the current and expected near term losses and the uncertainty with respect to its ability to generate sufficient profits from its new business model. The Tax Cuts and Jobs Act was signed into law on December 22, 2017, and reduced the corporate income tax rate from 34% to 21%. The company’s deferred tax assets, liabilities, and valuation allowance have been adjusted to reflect the impact of the new tax law. The following is a reconciliation of the difference between the effective and statutory income tax rates for years ended December 31: December 31 2017 December 31 2016 Amount Percent Amount Percent Federal statutory rates $ (1,106,976) 34.0% $ (1,084,498) 34.0% State income taxes (367,525) 11.3% (281,970) 8.8% Permanent differences 4,103 -0.1% 839,208 -26.3% Temporary differences - 0.0% (25,343) 0.8% Impact of change in tax rate 727,566 22.3% - 0.0% Other (27,282) 0.9% - 0.0% Valuation allowance 511,722 -14.9% 499,909 -17.3% Total income tax benefit $ (258,392) $ (52,694) At December 31, 2017 and December 31, 2016, the significant components of the deferred tax assets are summarized below: December 31, 2017 December 31, 2016 Deferred income tax assets: Net operating loss carryforwards 1,253,964 742,242 Total deferred income tax assets 1,253,964 742,242 Less: valuation allowance (1,253,964 ) (742,242) Total deferred income tax asset $ 0 $ 0 At December 31, 2017 and December 31, 2016, the significant components of the deferred tax liabilities are summarized below: December 31, 2017 December 31, 2016 Deferred income tax liabilities: Book to tax differences for fixed assets and intangible assets 181,703 287,153 Total deferred income tax liabilities $ 181,703 $ 287,153 The deferred tax liability is mostly made up of the difference between book and tax values for property and equipment and intangible assets. The Company has recorded as of December 31, 2017 a valuation allowance of $1,253,964 as management believes that it is more likely than not that the deferred tax assets will not be realized in future years. Management has based its assessment on the Company's lack of profitable operating history. The Company annually conducts an analysis of its tax positions and has concluded that it had no uncertain tax positions as of December 31, 2017. The Company has net operating loss carry-forwards of approximately $5,196,903. Such amounts are subject to IRS code section 382 limitations and begin to expire in 2029. The tax years from 2014 - 2017 are still subject to audit. |
Note 11 - Derivative Liabilitie
Note 11 - Derivative Liabilities and Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
Note 11 - Derivative Liabilities and Fair Value Measurements | Note 11 – Derivative Liabilities and Fair Value Measurements Derivative liabilities During the year ended December 31, 2017, the Company issued a convertible note dated July 19, 2017 (see "Note 7 – Convertible Notes Payable"). This note was evaluated under the guidance in FASB ASC 815-40, Derivatives and Hedging, and was determined to have characteristics of a derivative liability. As a result of the characteristics of this note issued on July 19, 2017, the conversion options relating to previously issued convertible debt and outstanding Class A common stock warrants were also required to be accounted for as derivative liabilities under ASC 815. Under this guidance, this derivative liability is marked-to-market at each reporting period with the non-cash gain or loss recorded in the period as a gain or loss on derivatives. On the original issuance date of July 19, 2017, the initial fair value of the derivatives amounted to $1,044,457, which included a value of $911,764 relating to the $115,000 convertible note issued on July 19, 2017. The excess of the fair value over the book value of the note of $796,764 was recorded as a loss in the change in value of derivative liabilities in the accompanying consolidated statements of operations for the year ended December 31, 2017, while $115,000 was recorded as a discount to the note payable (see Note 7). The remaining portion of the initial derivative fair value of $132,693 was recorded as a derivative liability and a reduction of additional paid-in capital. On November 2, 2017, the Company issued another convertible note which resulted in an additional $119,940 initial derivative fair value, which was also recorded as a derivative liability and reduction of additional paid-in capital. As of December 31, 2017, the fair value of the derivative liability amounted to $271,588. The change in value of the derivative liabilities for the year ended December 31, 2017 in the accompanying statements of operations amounted to a loss of $126,054. The valuation of our embedded derivatives is determined by using the Black-Scholes Option Pricing Model. As such, our derivative liabilities have been classified as Level 3. The Company estimated the fair value of the derivative liabilities using the Black-Scholes Option Pricing Model and the following key assumptions during the year ended December 31, 2017. Expected dividend yield 0 % Weighted average expected volatility 200 % Weighted average risk-free interest rate 2.38 % Expected terms (years) .50 to 2.67 Fair value measurements FASB ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. FASB ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. FASB ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level of input that is significant to the fair value measurement of the instrument. The following table provides a summary of the fair value of our derivative liabilities as of December 31, 2017 and 2016. Fair value measurement on a recurring basis Level 1 Level 2 Level 3 As of December 31, 2017 Liabilities Derivatives $ - $ - $ 271,588 As of December 31, 2016 Liabilities Derivatives $ - $ - $ - The below table presents the change in the fair value of the derivative liabilities during the year ended December 31, 2017: Fair value as of December 31, 2016 $ - Additions recognized as debt discounts 115,000 Additions reclassified from equity 252,633 Derivative liability resolution (222,099) Change in fair value of derivatives 126,054 ) Fair value as of December 31, 2017 $ 271,588 |
Note 12 - Industry Segments
Note 12 - Industry Segments | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
Note 12 - Industry Segments | Note 12 – Industry Segments This summary presents the Company's current segments, QCA and VWES VWES Year Ended December 31, 2017 Unallocated and Total QCA VWES Eliminations Consolidated Revenue, external customers $ 7,769,722 $ 1,773,474 $ 548,295 $ 10,091,491 Revenue, company segments 40,091 - (40,091) - Segment gross profit 2,438,745 (91,585) 219,517 2,566,677 Segment depreciation and amortization 289,746 423,756 50,001 763,503 Segment interest expense 730,096 277,733 532,397 1,540,226 Segment net income (loss) 327,511 (1,710,644) (1,614,287) (2,997,420) Purchase and acquisition of long-lived assets 75,480 4,790,095 87,174 4,952,749 As of December 31, 2017 Unallocated and Total QCA VWES Eliminations Consolidated Accounts receivable, net $ 1,545,422 $ 506,601 $ 15,058 $ 2,067,081 Goodwill 1,963,761 167,845 - 2,131,606 Total assets 10,569,893 5,006,074 394,983 15,970,950 |
Note 13 - Subsequent Events
Note 13 - Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Notes | |
Note 13 - Subsequent Events | Note 13 – Subsequent Events Issuance of Convertible Notes Subsequent to the year ended December 31, 2017, the Company issued a series of short-term notes payable for aggregate proceeds of $260,000. The notes bear interest at 15% per annum. On January 23, 2018, the Company entered into a fixed price convertible note for $150,000. The note is due October 8, 2018 and bears interest at 12% per annum. After 180 days, the note is convertible into shares of the Company’s Class A common stock at a fixed rate of $0.16 per share. On January 5, 2018, the Company entered into a variable convertible note for $64,000. The note is due July 5, 2018 and bears interest at 10% per annum. The note is immediately convertible into the Company’s Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for the ten days prior to conversion. On April 3, 2018, the Company entered into a variable convertible note with an unrelated lender for $85,000. The note is due January 2, 2019 and bears interest at 10% per annum. The note is immediately convertible into shares of the Company’s Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion. On April 5, 2018, the Company entered into a variable convertible note with an unrelated lender for $128,000. The note is due December 18, 2018 and bears interest at 12% per annum. After 180 days, the note is convertible into shares of the Company’s Class A common stock at a discount of 40% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion. On April 9, 2018, the Company entered into a variable convertible note for $124,199. The note is due January 9, 2019 and bears interest at 12% per annum. After 180 days, the note is convertible to the Company’s Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for the ten days prior to conversion. On April 9, 2018, the Company entered into a variable convertible note for $37,800. The note is due January 9, 2019 and bears interest at 12% per annum. After 180 days, the note is convertible to the Company’s Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for the ten days prior to conversion. The company paid off $381,500 in convertible notes since December 31st 2017. Execution of Securities Purchase Agreement; Acquisition of APF Well Testing On April 5, 2018, the Company announced that it had entered into a Securities Purchase Agreement (the "SPA") with American Precision Fabricators, Inc., an Arkansas corporation ("APF"), and Andy Galbach ("Galbach") and Clarence Carl Davis, Jr. ("Davis"), the owners of APF (the "Sellers"). Pursuant to the SPA, the Company acquired 100% of the outstanding shares in APF (the "Transaction"). The total purchase price of $4,500,000, consisted of three components, the Cash Consideration, the Note Consideration, and the Convertible Note Consideration, as follows: · · · In connection with the SPA, and as consideration for the Company to enter into the SPA, APF and Galbach entered into a Consulting Services Agreement (the "Consulting Agreement"), pursuant to which Galbach agreed for a period of 90 days following the closing of the Transaction to provide strategic management services to APF, meet with APF's new management, and provide his knowledge in customer relations, trade and service implementation, and other business disciplines. Additionally, APF agreed to reimburse Galbach for his expenses incurred by Galbach in connection with providing the services under the Consulting Agreement. On February 22, 2018, the Company entered into an Amended Agreement with the seller of VWES. Per the terms of the Amended Agreement, the two notes payable initially issued to the seller of VWES on January 1, 2017 for $1,500,000 and $300,000 are cancelled, along with the 379,403 shares of Alpine 4's Class A common stock and 75,000 warrants (see Note 9), and replaced with a new Amended and Restated Secured Promissory Note for $3,000,000. The new note is due in semi-annual payments of $150,000 commencing on June 1, 2018 through June 1, 2020 and bears interest at 7% per annum. If the note is paid in full on or before June 1, 2018, the balance due will be discounted by $500,000. If the note is paid in full after June 1, 2018 and on or before December 1, 2018, the balance due will be discounted by $450,000. If the note is paid in full after December 1, 2018 and on or before June 1 2019, the balance due will be discounted by $350,000. If the note is paid in full after June 1, 2019 and on or before December 1, 2019, the balance due will be discounted by $250,000. If the note is paid in full after December 1, 2019 and on or before June 1, 2020, the balance due till be discounted by $200,000. In connection with the Amended Agreement, the Company also issued an additional 100,000 shares of Class A common stock to the seller of VWES, and granted new warrants effective February 22, 2018 to purchase 75,000 shares of common stock with an exercise price of $1.00 per share. The warrants are immediately vested and have a contractual life of 3 years. |
Note 2 - Summary of Significa20
Note 2 - Summary of Significant Accounting Policies: Principles of Consolidation (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Principles of Consolidation | Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of December 31, 2017 and 2016. Significant intercompany balances and transactions have been eliminated. |
Note 2 - Summary of Significa21
Note 2 - Summary of Significant Accounting Policies: Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Basis of Presentation | Basis of presentation The accompanying financial statements present the balance sheets, statements of operations, stockholders' deficit and cash flows of the Company. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). |
Note 2 - Summary of Significa22
Note 2 - Summary of Significant Accounting Policies: Use of Estimates, Policy (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Use of Estimates, Policy | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information, information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates. |
Note 2 - Summary of Significa23
Note 2 - Summary of Significant Accounting Policies: Advertising (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Advertising | Advertising Advertising costs are expensed when incurred. All advertising takes place at the time of expense. We have no long-term contracts for advertising. Advertising expense for all periods presented were not significant. |
Note 2 - Summary of Significa24
Note 2 - Summary of Significant Accounting Policies: Cash, Policy (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Cash, Policy | Cash Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days. Cash equivalents are placed with high credit quality financial institutions and are primarily in money market funds. The carrying value of those investments approximates fair value. As of December 31, 2017 and 2016, the Company had no cash equivalents. |
Note 2 - Summary of Significa25
Note 2 - Summary of Significant Accounting Policies: Major Customers (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Major Customers | Major Customers The Company had two customers that made up 41% and 13% of accounts receivable as of December 31, 2017. For the year ended December 31, 2017, the Company had one customer that made up 36% of total revenues. The Company had two customers that made up approximately 50% of outstanding accounts receivable as of December 31, 2016. These same two customers comprised approximately 50% of total revenues for the nine months ended December 31, 2016 (Successor). |
Note 2 - Summary of Significa26
Note 2 - Summary of Significant Accounting Policies: Accounts Receivable (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Accounts Receivable | Accounts Receivable The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. As of December 31, 2017 and 2016, we had an allowance for bad debt of $18,710 and $0 , respectively. |
Note 2 - Summary of Significa27
Note 2 - Summary of Significant Accounting Policies: Inventory (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Inventory | Inventory Inventory is valued at the lower of the inventory's cost (weighted average basis) or the net realizable value of the inventory. Management compares the cost of inventory with its net realizable value and an allowance is made to write down inventory to net realizable value, if lower. Inventory is segregated into four areas, raw materials, WIP, finished goods, and In-Transit. December 31, 2017 December 31, 2016 Raw materials $ 577,259 $ 527,599 WIP 440,586 193,525 Finished goods 161,310 195,990 In Transit 33,391 13,000 $ 1,212,546 $ 930,114 |
Note 2 - Summary of Significa28
Note 2 - Summary of Significant Accounting Policies: Property and Equipment (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Property and Equipment | Property and Equipment Property and equipment are carried at cost less depreciation. Depreciation and amortization are provided principally on the straight-line method over the estimated useful lives of the assets, which range from ten years to 39 years as follows: Automobiles & Trucks 10 to 20 years Buildings 39 years Leasehold Improvements 15 years or time remaining on lease (whichever is shorter) Equipment 10 years Maintenance and repair costs are charged against income as incurred. Significant improvements or betterments are capitalized and depreciated over the estimated life of the asset. Property and equipment consisted of the following as of December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Automobiles & Trucks $ 1,208,935 $ - Machinery & Equipment 4,454,466 1,263,941 Office furniture & fixtures 7,056 - Building 3,945,952 3,895,000 Land 126,347 - Leasehold Improvements 294,524 219,045 Less: Accumulated Depreciation (838,893) (175,853) $ 9,198,387 $ 5,202,133 |
Note 2 - Summary of Significa29
Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Purchased Intangibles and Other Long-lived Assets | Purchased Intangibles and Other Long-Lived Assets The Company amortizes intangible assets with finite lives over their estimated useful lives, which range between five and fifteen years as follows: Customer List 15 years Non-compete agreements 15 years Software development 5 years Intangible assets consisted of the following as of December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Software $ 278,474 $ 191,300 Noncompete 100,000 100,000 Customer Lists 531,187 531,187 Less: Accumulated Amortization (157,039) (64,959) $ 752,622 $ 757,528 Expected amortization expense of intangible assets over the next 5 years and thereafter is as follows. 2018 2019 2020 2021 2022 Thereafter Total Software 33,332 33,332 33,332 33,332 19,734 - 153,062 Non-compete 35,000 20,000 20,000 20,000 - - 95,000 Customer List 26,627 26,627 26,627 26,627 26,627 371,425 504,560 Total Accumulated Amortization 94,959 79,959 79,959 79,959 46,361 371,425 752,622 Other long-term assets consisted of the following as of December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Restricted Cash $ 207,311 $ 630,270 Deposits 50,927 57,934 $ 258,238 $ 688,204 Restricted cash consists of deposit account collateralizing letters of credit in favor of the counterparty in our lease financing obligation. Changes in restricted cash are reflected as financing activities because the cash is being used in conjunction with financing activities. |
Note 2 - Summary of Significa30
Note 2 - Summary of Significant Accounting Policies: Impairment of Long-lived Assets (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Impairment of Long-lived Assets | Impairment of Long-Lived Assets The Company accounts for long-lived assets in accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 360, "Accounting for the Impairment of Long-Lived Assets." This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the estimated future cash flows from the use of the asset are less than the carrying amount of that asset. During all periods presented, there have been no impairment losses. |
Note 2 - Summary of Significa31
Note 2 - Summary of Significant Accounting Policies: Goodwill (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Goodwill | Goodwill In financial reporting, goodwill is not amortized, but is tested for impairment annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Events that result in an impairment review include significant changes in the business climate, declines in our operating results, or an expectation that the carrying amount may not be recoverable. We assess potential impairment by considering present economic conditions as well as future expectations. All assessments of goodwill impairment are conducted at the individual reporting unit level. As of December 31, 2017, the reporting units with goodwill were QCA and VWES. The Company used qualitative factors according to ASC 350-20-35-3 to determine whether it is more likely than not that the fair value of goodwill is less than its carrying amount. Based on the qualitative criteria the company believes there not to be any triggers for potential impairment of goodwill and therefore the Company has recorded no impairment of goodwill in any period presented. |
Note 2 - Summary of Significa32
Note 2 - Summary of Significant Accounting Policies: Fair Value Measurement (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Fair Value Measurement | Fair Value Measurement The Company's financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, convertible notes, notes and line of credit. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements. For additional information, see Note 11 – Derivative Liabilities and Fair Value Measurements. |
Note 2 - Summary of Significa33
Note 2 - Summary of Significant Accounting Policies: Revenue Recognition (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Revenue Recognition | Revenue Recognition ALTIA The Company accounts for its revenue per the guidance in ASC 605-25-25 by allocating the total contract amount between the product and service elements. When a vehicle is sold to the driving consumer who purchases the 6th Sense Auto service, the cost of the service is added to the price of the car and the amount collected by the dealership for this service is remitted to the Company. At the time the vehicle is purchased, the Company recognizes the service portion of the contract over the service period of generally 12 to 36 months. Quality Circuit Assembly The Company accounts for its revenue per the guidance in ASC 605-25-25 by allocating the total contract amount between the product and service elements. Revenue is recognized when either the product has completely been built and shipped or the service has been completed. If a deposit for product or service is received prior to completion the payment is recorded to deferred revenue until such point the product or services meets our revenue recognition policy. Management assesses the materiality and likelihood of warranty work and returns and records reserves as needed. For all periods presented management determined that the warranty and returns would be immaterial. VWES Revenue is recognized when the contract has been performed in completion. Contracts range from one day to 30 days in length. |
Note 2 - Summary of Significa34
Note 2 - Summary of Significant Accounting Policies: Leases (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Leases | Leases Leases are reviewed by management and examined to see if they are required to be categorized as an operating lease, a capital lease or a financing transaction. |
Note 2 - Summary of Significa35
Note 2 - Summary of Significant Accounting Policies: Earnings Per Share Policy, Basic (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Earnings Per Share Policy, Basic | Earnings (loss) per share Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. The only potentially dilutive securities outstanding during the periods presented were the convertible debentures, but they are anti-dilutive due to the net loss incurred. All earnings (loss) per common share have been adjusted retroactively for periods presented to reflect changes in number of shares as a result of the reverse stock split amount. |
Note 2 - Summary of Significa36
Note 2 - Summary of Significant Accounting Policies: Share-based Compensation, Option and Incentive Plans Policy (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Share-based Compensation, Option and Incentive Plans Policy | Stock-based compensation The Company accounts for equity instruments issued to employees for compensation in accordance with FASB ASC 718-10, Compensation – Stock Compensation. The Company accounts for equity instruments issued to non-employees in accordance with FASB ASC 505-50, Equity – Equity-Based Payments to Non-Employees. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment is reached or completion of performance by the provider of goods or services as defined by FASB ASC 505-50. |
Note 2 - Summary of Significa37
Note 2 - Summary of Significant Accounting Policies: Income Tax, Policy (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Income Tax, Policy | Income taxes The Company records income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carry forwards. Accounting standards regarding income taxes require a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if, based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on a more-likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry forward periods, the Company's experience with operating loss and tax credit carry forwards not expiring unused, and tax planning alternatives. The Company recorded valuation allowances on the net deferred tax assets. Management will reassess the realization of deferred tax assets based on the accounting standards for income taxes each reporting period. To the extent that the financial results of operations improve and it becomes more likely than not that the deferred tax assets are realizable, the Company will be able to reduce the valuation allowance. Significant judgment is required in evaluating the Company's tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely, based solely on the technical merits, of being sustained on examinations. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. |
Note 2 - Summary of Significa38
Note 2 - Summary of Significant Accounting Policies: Embedded Conversion Features (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
Embedded Conversion Features | Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt under ASC 815 "Derivatives and Hedging" to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 "Debt with Conversion and Other Options" for consideration of any beneficial conversion features. |
Note 2 - Summary of Significa39
Note 2 - Summary of Significant Accounting Policies: New Accounting Pronouncements, Policy (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Policies | |
New Accounting Pronouncements, Policy | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2014-09 (Topic 606) "Revenue from Contracts with Customers." Topic 606 supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition”, and requires entities to recognize revenue when they transfer control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. We intend to adopt Topic 606 in the first quarter of 2018 using the modified retrospective transition method applied to those contracts which were not completed as of that date. Upon adoption, we will recognize the cumulative effect of adopting this guidance as an adjustment to our opening balance of retained earnings. Prior periods will not be retrospectively adjusted. We expect the adoption of Topic 606 will likely not have a material impact to our revenues and net loss presented in the consolidated statement of operations. However, the Company does expect to have significant changes to the footnote disclosures as a result of implementing this new standard. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases (FAS 13) Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements. |
Note 2 - Summary of Significa40
Note 2 - Summary of Significant Accounting Policies: Inventory: Schedule of Inventory, Current (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Inventory, Current | December 31, 2017 December 31, 2016 Raw materials $ 577,259 $ 527,599 WIP 440,586 193,525 Finished goods 161,310 195,990 In Transit 33,391 13,000 $ 1,212,546 $ 930,114 |
Note 2 - Summary of Significa41
Note 2 - Summary of Significant Accounting Policies: Property and Equipment: Schedule of Property and Equipment, Estimated Useful Lives (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Property and Equipment, Estimated Useful Lives | Automobiles & Trucks 10 to 20 years Buildings 39 years Leasehold Improvements 15 years or time remaining on lease (whichever is shorter) Equipment 10 years |
Note 2 - Summary of Significa42
Note 2 - Summary of Significant Accounting Policies: Property and Equipment: Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Property, Plant and Equipment | December 31, 2017 December 31, 2016 Automobiles & Trucks $ 1,208,935 $ - Machinery & Equipment 4,454,466 1,263,941 Office furniture & fixtures 7,056 - Building 3,945,952 3,895,000 Land 126,347 - Leasehold Improvements 294,524 219,045 Less: Accumulated Depreciation (838,893) (175,853) $ 9,198,387 $ 5,202,133 |
Note 2 - Summary of Significa43
Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Finite Lived Intangible Assets, Estimated Useful Lives (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Finite Lived Intangible Assets, Estimated Useful Lives | Customer List 15 years Non-compete agreements 15 years Software development 5 years |
Note 2 - Summary of Significa44
Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Intangible Assets | December 31, 2017 December 31, 2016 Software $ 278,474 $ 191,300 Noncompete 100,000 100,000 Customer Lists 531,187 531,187 Less: Accumulated Amortization (157,039) (64,959) $ 752,622 $ 757,528 |
Note 2 - Summary of Significa45
Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | 2018 2019 2020 2021 2022 Thereafter Total Software 33,332 33,332 33,332 33,332 19,734 - 153,062 Non-compete 35,000 20,000 20,000 20,000 - - 95,000 Customer List 26,627 26,627 26,627 26,627 26,627 371,425 504,560 Total Accumulated Amortization 94,959 79,959 79,959 79,959 46,361 371,425 752,622 |
Note 2 - Summary of Significa46
Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Other Long-Lived Assets, Noncurrent (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Other Long-Lived Assets, Noncurrent | December 31, 2017 December 31, 2016 Restricted Cash $ 207,311 $ 630,270 Deposits 50,927 57,934 $ 258,238 $ 688,204 |
Note 4 - Leases_ Schedule of Fu
Note 4 - Leases: Schedule of Future Minimum Lease Payments for Capital Leases (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Future Minimum Lease Payments for Capital Leases | Fiscal Year 2018 $ 584,763 2019 599,382 2020 614,366 2021 629,725 2022 645,468 Thereafter 7,315,821 Total 10,389,525 Less: Current capital leases and financing transaction (24,590) Less: imputed interest (3,804,823) Noncurrent capital leases and financing transaction $ 6,560,112 |
Note 4 - Leases_ Lessee, Operat
Note 4 - Leases: Lessee, Operating Lease, Disclosure (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Lessee, Operating Lease, Disclosure | Fiscal Year San Jose, CA Phoenix, AZ Oklahoma City, OK Total 2018 $ 266,134 $ - $ 60,000 $ 326,134 2019 274,118 - 35,000 309,118 2020 282,342 - - 282,342 2021 290,812 - - 290,812 Thereafter - - - - Total $ 1,113,406 $ - $ 95,000 $ 1,208,406 |
Note 5 - Notes Payable_ Schedul
Note 5 - Notes Payable: Schedule of Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Notes Payable | December 31, 2017 Alpine 4 QCA VWES Total Lines of credit $ - $ 1,657,611 $ 354,505 $ 2,012,116 Equipment loans - 147,079 1,724,422 1,871,501 Term notes 10,000 - - 10,000 Total current $ 10,000 $ 1,804,690 $ 2,078,927 $ 3,893,617 Long-term - - - - Total notes payable $ 10,000 $ 1,804,690 $ 2,078,927 $ 3,893,617 December 31, 2016 Alpine 4 QCA VWES Total Lines of credit $ - $ 1,302,915 $ - $ 1,302,915 Equipment loans - 29,116 - 29,116 Term notes - - - - Total current $ - $ 1,332,031 $ - $ 1,332,031 Long-term - 147,079 - 147,079 Total notes payable $ - $ 1,479,110 $ - $ 1,479,110 |
Note 6 - Notes Payable, Relat50
Note 6 - Notes Payable, Related Parties: Schedule of Notes Payable, Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Notes Payable, Related Parties | December 31, 2017 December 31, 2016 Note payable; non-interest bearing; due upon demand; unsecured $ - $ 15,000 Note payable; non-interest bearing; due upon demand; unsecured - 15,000 Note payable; bearing interest at 8% per annum; due May 31, 2017; unsecured - 5,000 Notes payable; non-interest bearing; due upon demand; unsecured 4,500 - Note payable; bearing interest at a flat rate of $2,000; due January 10, 2017; unsecured - 60,000 Note payable; non-interest bearing; due March 2, 2017; unsecured - - Note payable; non-interest bearing; due March 14, 2017; unsecured - - Note payable; non-interest bearing; due April 11, 2017; unsecured - - Note payable; bearing interest at 3.33% per month for the first 90 days and 2.22% per month thereafter; due May 26, 2017; unsecured 43,500 - Note payable; bearing interest at 8% per annum; due June 30, 2017; unsecured 7,500 10,000 Note payable; bearing interest at 36% per annum; due May 31, 2017; secured - 100,000 Note payable; bearing at 1% per annum; due July 31, 2017; secured 300,000 - Note payable; bearing at 30% per annum; due March 3, 2018; unsecured 11,500 - Note payable; bearing at 20% per annum; due April 28, 2018; unsecured 20,000 - Total notes payable - related parties $ 387,000 $ 205,000 |
Note 7 - Convertible Notes Pa51
Note 7 - Convertible Notes Payable: Convertible Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Convertible Debt | December 31, 2017 December 31, 2016 Series of convertible notes payable issued prior to December 31, 2016, bearing interest at rates of 8% - 20% per annum, with due dates ranging from April 2016 through October 2017. The outstanding principal and interest balances are convertible into shares of Class A common stock at the option of the debt holder at an exercise price of $1 per share. $ 40,000 $ 92,650 Secured convertible notes payable issued to the sellers of QCA on April 1, 2016 (see Note 9) for an aggregate of $2,000,000, bearing interest at 5% per annum, due in monthly payments starting on July 1, 2016 and due in full on July 1, 2019. The outstanding principal and interest balances are convertible after 12 months into Class A common stock at the option of the debt holder at a conversion price of $10 per share. 1,827,108 1,922,328 Secured convertible note payable issued to the seller of HWT on January 1, 2017 (see Note 9) for an aggregate of $1,500,000, bearing interest at 5% per annum, due in full on July 1, 2018. The outstanding principal and interest balances are convertible after 12 months into Class A common stock at the option of the debt holder at a conversion price of $8.50 per share. 1,500,000 - Series of convertible notes payable issued in January 2017, bearing interest at rates of 10% per annum, and due in January 2018. The outstanding principal and interest balances are convertible into shares of Class A common stock at the option of the debt holder at an exercise price of $1 per share. 30,000 - On July 13, 2017, the Company entered into a variable convertible note for $43,000 with net proceeds of $40,000. The note is due April 30, 2018 and bears interest at 12% per annum. After 180 days, the note is convertible into shares of Class A common stock at a discount of 38% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion. The Company can prepay the note up to 180 days prior to the due date, with the prepayment penalty ranging from 10% to 27% depending on when prepaid. 43,000 - On July 19, 2017, the Company entered into a variable convertible note for $115,000 with net proceeds of $107,000. The note is due January 21, 2018 and bears interest at 10% per annum. The note is immediately convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion. The Company can prepay the convertible note up to 180 days from July 19, 2017. The Company issued 500,000 shares of Class A common stock to the note holder which are returnable if no event of default has occurred and the note is paid in full within 180 days of the note date. Management has determined that it is probable that the Company will meet the conditions under the note and therefore it more likely than not that the Company will not be in default as defined in the note and the note will be paid in full within 180 days of the note date. As a result, management has concluded that it is probable that the shares would be returned and therefore the cost of issuance has not been recorded as of December 31, 2017. The Company will reassess the likelihood of such at each period end. This is accounted for as a derivative liability, so a debt discount from derivative liabilities of $115,000 was recognized and is being amortized over the term of the agreement. See Note 11 – Derivative Liabilities and Fair Value Measurements for more details. 72,748 - On September 5, 2017, the Company entered into a variable convertible note for $105,000 with net proceeds of $100,000. The note is due September 5, 2018 and bears interest at 10% per annum. After 180 days, the note is convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion. The Company can prepay the convertible note up to 180 days from September 5, 2017. The prepayment penalty is equal to 10% to 25% of the outstanding note amount depending on the prepayment date. 105,000 - On October 4, 2017, the Company entered into a variable convertible note for $60,000 with net proceeds of $55,000. The note is due July 4, 2018 and bears interest at 12% per annum. After 180 days, the note is convertible into shares of Class A common stock at a discount of 35% of the lowest trading price during the previous ten days prior to conversion. The Company can prepay the convertible note up to 180 days from October 4, 2017. The prepayment penalty is equal to 10% to 25% of the outstanding note amount depending on the prepayment date. 60,000 - On October 11, 2017, the Company entered into a variable convertible note for $58,500 with net proceeds of $55,500. The note is due on July 20, 2018 and bears interest at 12% per annum. After 180 days, the note is convertible into shares of Class A common stock at a discount of 38% of the average of the three lowest trading prices of the stock for ten days prior to conversion. The Company can prepay the convertible note up to 180 days from October 11, 2017. The prepayment penalty is equal to 10% to 27% of the outstanding note amount depending on the prepayment date. 58,500 - On November 2, 2017, the Company entered into a variable convertible note for $115,000 with net proceeds of $107,000. The note is due May 2, 2018 and bears interest at 10% per annum. The note is immediately convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion. The Company issued 150,000 shares to the lender with this note, which has been recorded as a discount. 115,000 - On November 28, 2017, the Company entered into a variable convertible note for $105,000 with net proceeds of $100,000. The note is due November 28, 2018 and bears interest at 10% per annum. After 180 days, the note is convertible into shares of Class A common stock at a discount of 35% of the average of the three lowest trading price during the previous ten days prior to conversion. The Company can prepay the convertible note up to 180 days from November 28, 2017. The prepayment penalty is equal to 10% to 25% of the outstanding note amount depending on the prepayment date. 105,000 - On December 6, 2017, the Company entered into a variable convertible note for $86,000 with net proceeds of $79,000. The note is due June 6, 2018 and bears interest at 10% per annum. After 180 days at the maturity date, the note is convertible to the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion. 86,000 - Total convertible notes payable 4,042,356 2,014,978 Less: discount on convertible notes payable (79,630) (7,421) Total convertible notes payable, net of discount 3,962,726 2,007,557 Less: current portion of convertible notes payable (2,302,620) (247,359) Long-term portion of convertible notes payable $ 1,660,106 $ 1,760,198 |
Note 7 - Convertible Notes Pa52
Note 7 - Convertible Notes Payable: Schedule of Future Scheduled Maturities of Outstanding Convertible Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Future Scheduled Maturities of Outstanding Convertible Notes Payable | Year Ended December 31, 2018 $ 2,302,620 2019 1,660,106 Total $ 3,962,726 |
Note 7 - Convertible Notes Pa53
Note 7 - Convertible Notes Payable: Roll forward of the convertible notes payable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Roll forward of the convertible notes payable | Convertible Notes Activity Balance outstanding, April 1, 2016 (Successor) $ 131,928 Issuance of convertible notes payable for acquisition of QCA 2,000,000 Issuance of convertible notes payable for cash 15,500 Repayment of notes (82,672) Conversion of notes payable into common stock (216,004) Discount from beneficial conversion feature (115,810) Amortization of debt discount 274,615 Balance outstanding, December 31, 2016 2,007,557 Issuance of convertible notes payable for acquisition of VWES 1,500,000 Issuance of convertible notes payable for cash 836,000 Repayment of notes (219,721) Conversion of notes payable to common stock (88,902) Discount from issuance of common stock (16,500) Discount from beneficial conversion feature (30,000) Discount from derivative liabilities (115,000) Amortization of debt discounts 89,292 Balance outstanding, December 31, 2017 $ 3,962,726 |
Note 8 - Stockholders' Equity_
Note 8 - Stockholders' Equity: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Expected dividend yield 0 % Weighted average expected volatility 200 % Weighted average risk-free interest rate 2.38 % Expected life of options 6.25 years |
Note 8 - Stockholders' Equity55
Note 8 - Stockholders' Equity: Share-based Compensation, Activity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Share-based Compensation, Activity | The following summarizes the stock option activity for the year ended December 31, 2017. There was no option activity during 2016. Weighted- Weighted- Average Average Remaining Exercise Contractual Options Price Life (Years) Outstanding at December 31, 2016 - $ - - Granted 1,344,000 0.57 Forfeited (561,750) 0.77 Exercised - - Outstanding at December 31, 2017 782,250 $ 0.42 9.44 Vested and expected to vest at December 31, 2017 782,250 $ 0.42 9.44 Exercisable at December 31, 2017 98,625 $ 0.64 9.35 The following table summarizes information about options outstanding and exercisable as of December 31, 2017. Options Outstanding Options Exercisable Weighted Weighted Weighted Average Average Average Exercise Number Remaining Exercise Number Exercise Price of Shares Life (Years) Price of Shares Price $ 0.13 394,750 9.59 $ 0.13 21,875 $ 0.13 0.26 114,000 9.34 0.26 14,250 0.26 0.90 273,500 9.27 0.90 62,500 0.90 782,250 98,625 |
Note 9 - Business Combination_
Note 9 - Business Combination: Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
QCA | |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | Purchase Allocation Cash $ 200,000 Accounts Receivable 1,158,995 Inventory 950,424 Property, Plant & Equipment 1,256,885 Prepaid 6,035 Intangibles 631,187 Goodwill 1,963,761 Accounts Payable (672,410 ) Accrued Expenses (128,444 ) Income Tax Payable (20,123 ) Deferred Tax Liability (346,310 ) $ 5,000,000 |
VWES | |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | Purchase Allocation Cash $ 262,384 Accounts Receivable, net 245,833 Property, Plant & Equipment 4,804,458 Intangibles - Goodwill 167,845 Accrued Expenses (25,086 ) Total consideration $ 5,455,434 |
Note 9 - Business Combination57
Note 9 - Business Combination: Business Acquisition, Pro Forma Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Business Acquisition, Pro Forma Information | Pro Forma Combined Financials Twelve Months Ended December 31, 2016 Revenue $ 11,291,315 Net (Loss) Income $ (3,905,706 ) Net (Loss) Income per Common Share - Basic and Diluted $ (0.18 ) |
Note 10 - Income Taxes_ Schedul
Note 10 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Effective Income Tax Rate Reconciliation | December 31 2017 December 31 2016 Amount Percent Amount Percent Federal statutory rates $ (1,106,976) 34.0% $ (1,084,498) 34.0% State income taxes (367,525) 11.3% (281,970) 8.8% Permanent differences 4,103 -0.1% 839,208 -26.3% Temporary differences - 0.0% (25,343) 0.8% Impact of change in tax rate 727,566 22.3% - 0.0% Other (27,282) 0.9% - 0.0% Valuation allowance 511,722 -14.9% 499,909 -17.3% Total income tax benefit $ (258,392) $ (52,694) |
Note 10 - Income Taxes_ Sched59
Note 10 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Deferred Tax Assets and Liabilities | December 31, 2017 December 31, 2016 Deferred income tax assets: Net operating loss carryforwards 1,253,964 742,242 Total deferred income tax assets 1,253,964 742,242 Less: valuation allowance (1,253,964 ) (742,242) Total deferred income tax asset $ 0 $ 0 At December 31, 2017 and December 31, 2016, the significant components of the deferred tax liabilities are summarized below: December 31, 2017 December 31, 2016 Deferred income tax liabilities: Book to tax differences for fixed assets and intangible assets 181,703 287,153 Total deferred income tax liabilities $ 181,703 $ 287,153 |
Note 11 - Derivative Liabilit60
Note 11 - Derivative Liabilities and Fair Value Measurements: Schedule of Assumptions for Fair Value as of Balance Sheet Date of Assets or Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Assumptions for Fair Value as of Balance Sheet Date of Assets or Liabilities | Expected dividend yield 0 % Weighted average expected volatility 200 % Weighted average risk-free interest rate 2.38 % Expected terms (years) .50 to 2.67 |
Note 11 - Derivative Liabilit61
Note 11 - Derivative Liabilities and Fair Value Measurements: Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation | Fair value measurement on a recurring basis Level 1 Level 2 Level 3 As of December 31, 2017 Liabilities Derivatives $ - $ - $ 271,588 As of December 31, 2016 Liabilities Derivatives $ - $ - $ - |
Note 11 - Derivative Liabilit62
Note 11 - Derivative Liabilities and Fair Value Measurements: Schedule of Derivative Liabilities at Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Derivative Liabilities at Fair Value | Fair value as of December 31, 2016 $ - Additions recognized as debt discounts 115,000 Additions reclassified from equity 252,633 Derivative liability resolution (222,099) Change in fair value of derivatives 126,054 ) Fair value as of December 31, 2017 $ 271,588 |
Note 12 - Industry Segments_ Sc
Note 12 - Industry Segments: Schedule of Segment Reporting Information, by Segment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Tables/Schedules | |
Schedule of Segment Reporting Information, by Segment | Year Ended December 31, 2017 Unallocated and Total QCA VWES Eliminations Consolidated Revenue, external customers $ 7,769,722 $ 1,773,474 $ 548,295 $ 10,091,491 Revenue, company segments 40,091 - (40,091) - Segment gross profit 2,438,745 (91,585) 219,517 2,566,677 Segment depreciation and amortization 289,746 423,756 50,001 763,503 Segment interest expense 730,096 277,733 532,397 1,540,226 Segment net income (loss) 327,511 (1,710,644) (1,614,287) (2,997,420) Purchase and acquisition of long-lived assets 75,480 4,790,095 87,174 4,952,749 As of December 31, 2017 Unallocated and Total QCA VWES Eliminations Consolidated Accounts receivable, net $ 1,545,422 $ 506,601 $ 15,058 $ 2,067,081 Goodwill 1,963,761 167,845 - 2,131,606 Total assets 10,569,893 5,006,074 394,983 15,970,950 |
Note 1 - Description of Busin64
Note 1 - Description of Business (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Details | |
Entity Incorporation, State Country Name | Delaware |
Entity Incorporation, Date of Incorporation | Apr. 22, 2014 |
Note 2 - Summary of Significa65
Note 2 - Summary of Significant Accounting Policies: Major Customers (Details) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Dec. 31, 2017 | |
Accounts Receivable Concentration Risk | ||
Concentration Risk, Customer | The Company had two customers that made up approximately 50% of outstanding accounts receivable as of December 31, 2016. These same two customers comprised approximately 50% of total revenues | The Company had two customers that made up 41% and 13% of accounts receivable as of December 31, 2017. For the year ended December 31, 2017, the Company had one customer that made up 36% of total revenues. |
Note 2 - Summary of Significa66
Note 2 - Summary of Significant Accounting Policies: Accounts Receivable (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Details | ||
Allowance for Doubtful Accounts Receivable | $ 18,710 | $ 0 |
Note 2 - Summary of Significa67
Note 2 - Summary of Significant Accounting Policies: Inventory: Schedule of Inventory, Current (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Details | ||
Inventory, Raw Materials, Gross | $ 577,259 | $ 527,599 |
Inventory, Work in Process, Gross | 440,586 | 193,525 |
Inventory, Finished Goods, Gross | 161,310 | 195,990 |
Inventory, In Transit, Gross | 33,391 | 13,000 |
Inventory | $ 1,212,546 | $ 930,114 |
Note 2 - Summary of Significa68
Note 2 - Summary of Significant Accounting Policies: Property and Equipment: Schedule of Property and Equipment, Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Vehicles | Minimum | |
Property, Plant and Equipment, Useful Life | 10 years |
Vehicles | Maximum | |
Property, Plant and Equipment, Useful Life | 20 years |
Building | |
Property, Plant and Equipment, Useful Life | 39 years |
Leaseholds and Leasehold Improvements | |
Property, Plant and Equipment, Useful Life | 15 years |
Equipment | |
Property, Plant and Equipment, Useful Life | 10 years |
Note 2 - Summary of Significa69
Note 2 - Summary of Significant Accounting Policies: Property and Equipment: Property, Plant and Equipment (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Property and equipment, net | $ 9,198,387 | $ 5,202,133 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (838,893) | (175,853) |
Vehicles | ||
Property and equipment, net | 1,208,935 | |
Machinery and Equipment | ||
Property and equipment, net | 4,454,466 | 1,263,941 |
Furniture and Fixtures | ||
Property and equipment, net | 7,056 | |
Building | ||
Property and equipment, net | 3,945,952 | 3,895,000 |
Land | ||
Property and equipment, net | 126,347 | |
Leaseholds and Leasehold Improvements | ||
Property and equipment, net | $ 294,524 | $ 219,045 |
Note 2 - Summary of Significa70
Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Finite Lived Intangible Assets, Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Software Development | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Customer Lists | |
Finite-Lived Intangible Asset, Useful Life | 15 years |
Noncompete Agreements | |
Finite-Lived Intangible Asset, Useful Life | 15 years |
Note 2 - Summary of Significa71
Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Intangible Assets (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Intangible Assets, Gross (Excluding Goodwill) | $ 752,622 | $ 757,528 |
Finite-Lived Intangible Assets, Accumulated Amortization | (157,039) | (64,959) |
Computer Software, Intangible Asset | ||
Intangible Assets, Gross (Excluding Goodwill) | 278,474 | 191,300 |
Noncompete Agreements | ||
Intangible Assets, Gross (Excluding Goodwill) | 100,000 | 100,000 |
Customer Lists | ||
Intangible Assets, Gross (Excluding Goodwill) | $ 531,187 | $ 531,187 |
Note 2 - Summary of Significa72
Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) | Dec. 31, 2017USD ($) |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | $ 94,959 |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 79,959 |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 79,959 |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 79,959 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 46,361 |
Finite Lived Intangible Amortization Expense | 752,622 |
Finite-Lived Intangible Assets, Amortization Expense, Thereafter | 371,425 |
Computer Software, Intangible Asset | |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 33,332 |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 33,332 |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 33,332 |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 33,332 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 19,734 |
Finite Lived Intangible Amortization Expense | 153,062 |
Noncompete Agreements | |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 35,000 |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 20,000 |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 20,000 |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 20,000 |
Finite Lived Intangible Amortization Expense | 95,000 |
Customer Lists | |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 26,627 |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 26,627 |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 26,627 |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 26,627 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 26,627 |
Finite Lived Intangible Amortization Expense | 504,560 |
Finite-Lived Intangible Assets, Amortization Expense, Thereafter | $ 371,425 |
Note 2 - Summary of Significa73
Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Other Long-Lived Assets, Noncurrent (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Other non-current assets | $ 258,238 | $ 688,204 |
Deposits | ||
Other non-current assets | 50,927 | 57,934 |
Restricted Cash | ||
Other non-current assets | $ 207,311 | $ 630,270 |
Note 4 - Leases_ Schedule of 74
Note 4 - Leases: Schedule of Future Minimum Lease Payments for Capital Leases (Details) | Dec. 31, 2017USD ($) |
Details | |
Capital Leases, Future Minimum Payments Due, Next Twelve Months | $ 584,763 |
Capital Leases, Future Minimum Payments Due in Two Years | 599,382 |
Capital Leases, Future Minimum Payments Due in Three Years | 614,366 |
Capital Leases, Future Minimum Payments Due in Four Years | 629,725 |
Capital Leases, Future Minimum Payments Due in Five Years | 645,468 |
Capital Leases, Future Minimum Payments Due Thereafter | 7,315,821 |
Capital Leases, Future Minimum Payments Due | 10,389,525 |
Financing lease obligation, current portion | (24,590) |
Imputed Interest on Capital Lease | (3,804,823) |
Financing lease obligation, net of curent portion | $ 6,560,112 |
Note 4 - Leases_ Lessee, Oper75
Note 4 - Leases: Lessee, Operating Lease, Disclosure (Details) | Dec. 31, 2017USD ($) |
Operating Leases, Future Minimum Payments, Next Rolling Twelve Months | $ 326,134 |
Operating Leases, Future Minimum Payments, Due in Two Years | 309,118 |
Operating Leases, Future Minimum Payments, Due in Three Years | 282,342 |
Operating Leases, Future Minimum Payments, Due in Four Years | 290,812 |
Operating Leases, Future Minimum Payments Due | 1,208,406 |
San Jose, CA | |
Operating Leases, Future Minimum Payments, Next Rolling Twelve Months | 266,134 |
Operating Leases, Future Minimum Payments, Due in Two Years | 274,118 |
Operating Leases, Future Minimum Payments, Due in Three Years | 282,342 |
Operating Leases, Future Minimum Payments, Due in Four Years | 290,812 |
Operating Leases, Future Minimum Payments Due | 1,113,406 |
Oklahoma City, OK | |
Operating Leases, Future Minimum Payments, Next Rolling Twelve Months | 60,000 |
Operating Leases, Future Minimum Payments, Due in Two Years | 35,000 |
Operating Leases, Future Minimum Payments Due | $ 95,000 |
Note 4 - Leases (Details)
Note 4 - Leases (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2017 | |
Successor | |||
Operating Leases, Rent Expense | $ 185,157 | $ 528,673 | |
Predecessor | |||
Operating Leases, Rent Expense | $ 58,459 |
Note 5 - Notes Payable_ Sched77
Note 5 - Notes Payable: Schedule of Notes Payable (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Notes payable, current portion | $ 3,893,617 | $ 1,332,031 |
Notes Payable | 3,893,617 | 1,479,110 |
Line of Credit - Current | ||
Notes payable, current portion | 2,012,116 | 1,302,915 |
Equipment - current | ||
Notes payable, current portion | 1,871,501 | 29,116 |
Equipment - noncurrent | ||
Long-term debt | 147,079 | |
Alpine 4 | ||
Notes payable, current portion | 10,000 | |
Notes Payable | 10,000 | |
QCA | ||
Notes payable, current portion | 1,804,690 | 1,332,031 |
Notes Payable | 1,804,690 | 1,479,110 |
QCA | Line of Credit - Current | ||
Notes payable, current portion | 1,657,611 | 1,302,915 |
QCA | Equipment - current | ||
Notes payable, current portion | 147,079 | 29,116 |
QCA | Equipment - noncurrent | ||
Long-term debt | $ 147,079 | |
VWES | ||
Notes payable, current portion | 2,078,927 | |
Notes Payable | 2,078,927 | |
VWES | Line of Credit - Current | ||
Notes payable, current portion | 354,505 | |
VWES | Equipment - current | ||
Notes payable, current portion | $ 1,724,422 |
Note 6 - Notes Payable, Relat78
Note 6 - Notes Payable, Related Parties: Schedule of Notes Payable, Related Parties (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Notes payable, related parties | $ 387,000 | $ 205,000 |
Notes Payable 1 | ||
Notes payable, related parties | 15,000 | |
Notes Payable 2 | ||
Notes payable, related parties | 15,000 | |
Notes Payable 3 | ||
Notes payable, related parties | 5,000 | |
NotesPayable4Member | ||
Notes payable, related parties | 4,500 | |
NotesPayable5Member | ||
Notes payable, related parties | 60,000 | |
NotesPayable9Member | ||
Notes payable, related parties | 43,500 | |
NotesPayable10Member | ||
Notes payable, related parties | 7,500 | 10,000 |
NotesPayable11Member | ||
Notes payable, related parties | $ 100,000 | |
NotesPayable12Member | ||
Notes payable, related parties | 300,000 | |
NotesPayable13Member | ||
Notes payable, related parties | 11,500 | |
NotesPayable14Member | ||
Notes payable, related parties | $ 20,000 |
Note 7 - Convertible Notes Pa79
Note 7 - Convertible Notes Payable: Convertible Debt (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Convertible Notes Payable | $ 4,042,356 | $ 2,014,978 |
Debt Discount, Convertible Debt | (79,630) | (7,421) |
Convertible Notes Payable, net of discount | 3,962,726 | 2,007,557 |
Convertible notes payable, current portion, net of discount of $79,630 and $7,421 | (2,302,620) | (247,359) |
Convertible notes payable, net of current portion | 1,660,106 | 1,760,198 |
Convertible Notes Payable 1 | ||
Convertible Notes Payable | 40,000 | 92,650 |
Convertible Notes Payable 2 | ||
Convertible Notes Payable | 1,827,108 | $ 1,922,328 |
Convertible Notes Payable 3 | ||
Convertible Notes Payable | 1,500,000 | |
Convertible Notes Payable 4 | ||
Convertible Notes Payable | 30,000 | |
Convertible Notes Payable 5 | ||
Convertible Notes Payable | 43,000 | |
Convertible Notes Payable 6 | ||
Convertible Notes Payable | 72,748 | |
Convertible Notes Payable 7 | ||
Convertible Notes Payable | 105,000 | |
Convertible Notes Payable 8 | ||
Convertible Notes Payable | 60,000 | |
Convertible Notes Payable 9 | ||
Convertible Notes Payable | 58,500 | |
Convertible Notes Payable 10 | ||
Convertible Notes Payable | 115,000 | |
Convertible Notes Payable 11 | ||
Convertible Notes Payable | 105,000 | |
Convertible Notes Payable 12 | ||
Convertible Notes Payable | $ 86,000 |
Note 7 - Convertible Notes Pa80
Note 7 - Convertible Notes Payable (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt discount due to derivative liabilities | $ 115,000 | ||
Amortization of debt discounts | 89,292 | $ 274,615 | |
Successor | |||
Debt discount from convertible note payable | $ 115,810 | 30,000 | |
Debt discount due to derivative liabilities | 115,000 | ||
Amortization of debt discounts | $ 274,615 | $ 89,292 |
Note 7 - Convertible Notes Pa81
Note 7 - Convertible Notes Payable: Schedule of Future Scheduled Maturities of Outstanding Convertible Notes Payable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Future Maturities, Outstanding Convertible Notes Payable, Current Fiscal Year | $ 2,302,620 | |
Future Maturities, Outstanding Convertible Notes Payable, Year Two | 1,660,106 | |
Convertible Notes Payable, net of discount | $ 3,962,726 | $ 2,007,557 |
Note 7 - Convertible Notes Pa82
Note 7 - Convertible Notes Payable: Roll forward of the convertible notes payable (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | |
Convertible Notes Payable | $ 2,014,978 | $ 4,042,356 | $ 2,014,978 | |
Amortization of debt discounts | 89,292 | 274,615 | ||
Debt discount due to derivative liabilities | (115,000) | |||
Successor | ||||
Convertible Notes Payable | 2,007,557 | 3,962,726 | $ 2,007,557 | $ 131,928 |
Issuance of convertible note for acquisition of QCA | 2,000,000 | |||
IssuanceOfConvertibleNotesPayableForCash | 15,500 | 836,000 | ||
Repayments of convertible notes | (82,672) | (219,721) | ||
Common stock issued for convertible note payable | (216,004) | |||
Debt discount from convertible note payable | (115,810) | (30,000) | ||
Amortization of debt discounts | 274,615 | 89,292 | ||
Issuance of convertible note for acquisition of VWES | 1,500,000 | |||
Conversion of notes payable to common stock | (88,902) | |||
Common stock issued for convertible note discount | (16,500) | |||
Debt discount due to derivative liabilities | (115,000) | |||
Successor | Convertible Notes Payable | ||||
Amortization of debt discounts | $ 274,615 | $ 89,292 |
Note 8 - Stockholders' Equity (
Note 8 - Stockholders' Equity (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Dec. 31, 2017 | |
Preferred stock shares authorized | 10,000,000 | |
Preferred stock par value | $ 0.0001 | |
Stockholders' Equity, Reverse Stock Split | On July 29, 2016, the Company adopted a resolution approved by the shareholders to effectuate a reverse stock split at a ratio of one (1) new share for each ten (10) old shares of the Company's commons stock (the 'Reverse Split'). By its terms, the Reverse Split would only reduce the number of outstanding shares of Class A and Class B common stock, and would not correspondingly reduce the number of Class A and Class B common shares authorized for issuance, which remained at 500,000,000 and 100,000,000, respectively. | |
Successor | ||
Preferred stock shares authorized | 10,000,000 | |
Preferred stock par value | $ 0.0001 | |
Stock issued for services | $ 591,039 | $ 62,084 |
Issue shares of common stock for convertible note payable and accrued interest | 99,573 | |
Issue shares of common stock for cash | 6,000 | $ 40,000 |
Issue shares of common stock to officers and directors for services | $ 1,274,985 | |
Common Class A | Successor | ||
Issue shares of common stock to consultants for services - shares | 578,640 | |
Issue shares of common stock for convertible note payable and accrued interest - shares | 336,938 | 886,757 |
Issue shares of common stock for cash - shares | 670 | 132,209 |
Issue shares of common stock to officers and directors for services - shares | 150,000 |
Note 8 - Stockholders' Equity84
Note 8 - Stockholders' Equity: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Details | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate | 200.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.38% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 6 years 3 months |
Note 8 - Stockholders' Equity85
Note 8 - Stockholders' Equity: Share-based Compensation, Activity (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | shares | 1,344,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 0.57 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | shares | (561,750) |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price | $ / shares | $ 0.77 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | shares | 782,250 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ / shares | $ 0.42 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 9 years 5 months 8 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | shares | 782,250 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ / shares | $ 0.42 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | 9 years 5 months 8 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | shares | 98,625 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ / shares | $ 0.64 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 9 years 4 months 6 days |
Stock Option 1 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | shares | 394,750 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ / shares | $ 0.13 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 9 years 7 months 2 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | shares | 21,875 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ / shares | $ 0.13 |
Stock Option 2 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | shares | 114,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ / shares | $ 0.26 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 9 years 4 months 2 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | shares | 14,250 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ / shares | $ 0.26 |
Stock Option 3 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | shares | 273,500 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ / shares | $ 0.90 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | shares | 62,500 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ / shares | $ 0.90 |
Note 9 - Business Combination (
Note 9 - Business Combination (Details) - USD ($) | 9 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2017 | |
Stock Issued During Period, Value, Acquisitions | $ 2,000,000 | |
Successor | ||
Class A Redeemable Common Stock outstanding | 379,403 | |
Class A Common stock, $0.0001 par value, 379,403 and 0 shares issued and outstanding at December 31, 2017 and 2016, respectively | $ 1,439,725 |
Note 9 - Business Combination87
Note 9 - Business Combination: Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination (Details) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
QCA | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | $ 5,000,000 |
VWES | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 5,455,434 |
Business Acquisition, Cash | QCA | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 200,000 |
Business Acquisition, Cash | VWES | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 262,384 |
Business Acquisition, Accounts Receivable | QCA | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 1,158,995 |
Business Acquisition, Accounts Receivable | VWES | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 245,833 |
Business Acquisition, Inventory | QCA | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 950,424 |
Business Acquisition, Property, Plant & Equipment | QCA | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 1,256,885 |
Business Acquisition, Property, Plant & Equipment | VWES | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 4,804,458 |
Business Acquisition, Prepaid | QCA | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 6,035 |
Business Acquisition, Intangibles | QCA | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 631,187 |
Business Acquisition, Goodwill | QCA | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 1,963,761 |
Business Acquisition, Goodwill | VWES | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 167,845 |
Business Acquisition, Accounts Payable | QCA | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | (672,410) |
Business Acquisition, Accrued Expenses | QCA | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | (128,444) |
Business Acquisition, Accrued Expenses | VWES | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | (25,086) |
Business Acquisition, Income Tax Payable | QCA | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | (20,123) |
Business Acquisition, Deferred Tax Liability | QCA | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | $ (346,310) |
Note 9 - Business Combination88
Note 9 - Business Combination: Business Acquisition, Pro Forma Information (Details) | 12 Months Ended |
Dec. 31, 2016USD ($)$ / shares | |
Details | |
Business Acquisition, Pro Forma Revenue | $ 11,291,315 |
Business Acquisition, Pro Forma Net Income (Loss) | $ (3,905,706) |
Business Acquisition, Pro Forma Loss Per Share | $ / shares | $ (0.18) |
Note 10 - Income Taxes_ Sched89
Note 10 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Details | ||
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount | $ (1,106,976) | $ (1,084,498) |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 34.00% | 34.00% |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount | $ (367,525) | $ (281,970) |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | 11.30% | 8.80% |
Permanent differences - amount | $ 4,103 | $ 839,208 |
Permanent differences | (0.10%) | (26.30%) |
Temporary differences | $ (25,343) | |
Temporary differences | 0.80% | |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | $ 727,566 | |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 22.30% | |
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | $ (27,282) | |
Effective Income Tax Rate Reconciliation, Other Adjustments, Percent | 0.90% | |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | $ 511,722 | $ 499,909 |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | (14.90%) | (17.30%) |
Income tax expense (benefit) | $ (258,392) | $ (52,694) |
Note 10 - Income Taxes_ Sched90
Note 10 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Details | ||
Deferred Tax Assets, Operating Loss Carryforwards | $ 1,253,964 | $ 742,242 |
Deferred Tax Assets, Gross | 1,253,964 | 742,242 |
Deferred Tax Assets, Valuation Allowance, Current | (1,253,964) | (742,242) |
Book to tax differences for tangible and intangible assets | 181,703 | 287,153 |
Deferred tax liability | $ 181,703 | $ 287,153 |
Note 10 - Income Taxes (Details
Note 10 - Income Taxes (Details) | Dec. 31, 2017USD ($) |
Details | |
Operating Loss Carryforwards | $ 5,196,903 |
Note 11 - Derivative Liabilit92
Note 11 - Derivative Liabilities and Fair Value Measurements (Details) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Details | |
Derivative liabilities | $ 271,588 |
Change in value of derivative liabilities | $ 126,054 |
Note 11 - Derivative Liabilit93
Note 11 - Derivative Liabilities and Fair Value Measurements: Schedule of Assumptions for Fair Value as of Balance Sheet Date of Assets or Liabilities (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Assumptions, Weighted Average Volatility Rate | 200.00% |
Fair Value Assumptions, Risk Free Interest Rate | 2.38% |
Minimum | |
Fair Value Assumptions, Expected Term | 6 months |
Maximum | |
Fair Value Assumptions, Expected Term | 2 years 8 months 1 day |
Note 11 - Derivative Liabilit94
Note 11 - Derivative Liabilities and Fair Value Measurements: Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation (Details) | Dec. 31, 2017USD ($) |
Derivative liabilities | $ 271,588 |
Fair Value, Inputs, Level 3 | |
Derivative liabilities | $ 271,588 |
Note 11 - Derivative Liabilit95
Note 11 - Derivative Liabilities and Fair Value Measurements: Schedule of Derivative Liabilities at Fair Value (Details) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Details | |
Debt discount due to derivative liabilities | $ 115,000 |
Reclassification of warrants embedded conversion options as derivative liability | 252,633 |
Derivative liability resolution | (222,099) |
Change in value of derivative liabilities | 126,054 |
Derivative liabilities | $ 271,588 |
Note 12 - Industry Segments_ 96
Note 12 - Industry Segments: Schedule of Segment Reporting Information, by Segment (Details) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Revenue | $ 10,091,491 |
Gross Profit | 2,566,677 |
Depreciation, Depletion and Amortization, Nonproduction | 763,503 |
Interest expense | 1,540,226 |
Net loss | (2,997,420) |
Purchase and acquisition of long-lived assets | 4,952,749 |
Accounts receivable, net | 2,067,081 |
Goodwill | 2,131,606 |
TOTAL ASSETS | 15,970,950 |
QCA | |
Revenue | 7,769,722 |
Revenue, company segments | 40,091 |
Gross Profit | 2,438,745 |
Depreciation, Depletion and Amortization, Nonproduction | 289,746 |
Interest expense | 730,096 |
Net loss | 327,511 |
Purchase and acquisition of long-lived assets | 75,480 |
Accounts receivable, net | 1,545,422 |
Goodwill | 1,963,761 |
TOTAL ASSETS | 10,569,893 |
VWES | |
Revenue | 1,773,474 |
Gross Profit | (91,585) |
Depreciation, Depletion and Amortization, Nonproduction | 423,756 |
Interest expense | 277,733 |
Net loss | (1,710,644) |
Purchase and acquisition of long-lived assets | 4,790,095 |
Accounts receivable, net | 506,601 |
Goodwill | 167,845 |
TOTAL ASSETS | 5,006,074 |
Unallocated and Eliminations | |
Revenue | 548,295 |
Revenue, company segments | (40,091) |
Gross Profit | 219,517 |
Depreciation, Depletion and Amortization, Nonproduction | 50,001 |
Interest expense | 532,397 |
Net loss | (1,614,287) |
Purchase and acquisition of long-lived assets | 87,174 |
Accounts receivable, net | 15,058 |
TOTAL ASSETS | $ 394,983 |