Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 14, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Helix TCS, Inc. | |
Entity Central Index Key | 0001611277 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 75,747,718 | |
Entity File Number | 000-55722 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | DE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 800,015 | $ 285,761 |
Accounts receivable, net | 1,640,996 | 1,184,923 |
Prepaid expenses and other current assets | 540,342 | 409,800 |
Costs & earnings in excess of billings | 12,017 | 42,869 |
Total current assets | 2,993,370 | 1,923,353 |
Property and equipment, net | 545,818 | 349,518 |
Intangible assets, net | 16,312,706 | 18,604,078 |
Goodwill | 40,735,366 | 39,913,559 |
Deposits and other assets | 1,413,493 | 146,990 |
Promissory note receivable | 75,000 | |
Total assets | 62,075,753 | 60,937,498 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 2,463,136 | 1,702,713 |
Advances from related parties | 45,250 | |
Billings in excess of costs | 126,862 | 155,192 |
Deferred rent | 2,937 | |
Notes payable, current portion | 24,805 | 24,805 |
Obligation pursuant to acquisition | 75,000 | 201,667 |
Convertible notes payable, net of discount | 423,700 | 187,177 |
Convertible notes payable, net of discount - related party | 1,395,623 | |
Due to related party | 32,489 | |
Contingent consideration | 908,604 | |
Warrant liability | 2,199,266 | 896,171 |
Total current liabilities | 6,708,392 | 4,157,005 |
Long-term liabilities: | ||
Notes payable, net of current portion | 40,232 | 51,554 |
Other long-term liabilities | 962,716 | |
Total long-term liabilities | 1,002,948 | 51,554 |
Total liabilities | 7,711,340 | 4,208,559 |
Shareholders' equity: | ||
Common stock; par value $0.001; 200,000,000 shares authorized; 75,747,718 shares issued and outstanding as of June 30, 2019; 72,660,825 shares issued and outstanding as of December 31, 2018 | 75,748 | 72,660 |
Additional paid-in capital | 86,489,136 | 82,831,014 |
Accumulated other comprehensive income | 21,648 | 17,991 |
Accumulated deficit | (32,236,903) | (26,207,510) |
Total shareholders' equity | 54,364,413 | 56,728,939 |
Total liabilities and shareholders' equity | 62,075,753 | 60,937,498 |
Preferred Stock (Class A) | ||
Shareholders' equity: | ||
Preferred stock value | 1,000 | 1,000 |
Total shareholders' equity | 1,000 | 1,000 |
Preferred Stock (Class B) | ||
Shareholders' equity: | ||
Preferred stock value | 13,784 | 13,784 |
Total shareholders' equity | $ 13,784 | $ 13,784 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 75,747,718 | 72,660,825 |
Common stock, shares outstanding | 75,747,718 | 72,660,825 |
Preferred Stock (Class A) | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 3,000,000 | 17,000,000 |
Preferred stock, shares issued | 1,000,000 | 13,784,201 |
Preferred stock, shares outstanding | 1,000,000 | 13,784,201 |
Preferred Stock (Class B) | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 3,000,000 | 17,000,000 |
Preferred stock, shares issued | 1,000,000 | 13,784,201 |
Preferred stock, shares outstanding | 1,000,000 | 13,784,201 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Security and guarding | $ 1,347,529 | $ 1,197,201 | $ 2,552,240 | $ 2,290,975 |
Systems installation | 174,067 | 100,699 | 202,608 | 135,263 |
Software | 2,377,277 | 576,142 | 4,515,132 | 576,142 |
Total revenues | 3,898,873 | 1,874,042 | 7,269,980 | 3,002,380 |
Cost of revenue | 1,996,699 | 1,560,387 | 3,921,918 | 2,351,092 |
Gross margin | 1,902,174 | 313,655 | 3,348,062 | 651,288 |
Operating expenses: | ||||
Selling, general and administrative | 1,170,491 | 527,999 | 2,107,369 | 875,879 |
Salaries and wages | 1,214,969 | 1,216,082 | 2,466,546 | 2,082,402 |
Professional and legal fees | 792,101 | 268,795 | 1,480,556 | 888,554 |
Depreciation and amortization | 1,190,336 | 864,375 | 2,355,977 | 1,063,278 |
Loss on impairment of Goodwill | 664,329 | |||
Total operating expenses | 4,367,897 | 2,877,251 | 8,410,448 | 5,574,442 |
Loss from operations | (2,465,723) | (2,563,596) | (5,062,386) | (4,923,154) |
Other income (expenses): | ||||
Change in fair value of convertible note | 845,622 | 120,630 | (142,341) | 697,646 |
Change in fair value of convertible note - related party | 2,818,739 | (705,270) | 118,506 | |
Change in fair value of warrant liability | 3,871,101 | 321,161 | 2,238,145 | 1,297,840 |
Change in fair value of contingent consideration | 256,650 | (880,050) | ||
Loss on issuance of warrants | (787,209) | |||
Gain on reduction of obligation pursuant to acquisition | 290,441 | 557,054 | ||
Interest (expense) income | (514,081) | 3,016 | (690,282) | (14,917) |
Other income (expenses) | 7,278,031 | 735,248 | (967,007) | 2,656,129 |
Net income (loss) | 4,812,308 | (1,828,348) | (6,029,393) | (2,267,025) |
Other comprehensive (loss) income: | ||||
Changes in foreign currency translation adjustment | (590) | 3,657 | ||
Total other comprehensive (loss) income | (590) | 3,657 | ||
Total comprehensive income (loss) | 4,811,718 | (1,828,348) | (6,025,736) | (2,267,025) |
Convertible preferred stock beneficial conversion feature accreted as a deemed dividend | (7,203,689) | (22,202,194) | ||
Net income (loss) attributable to common shareholders | $ 4,811,718 | $ (9,032,037) | $ (6,025,736) | $ (24,469,219) |
Net income (loss) per share attributable to common shareholders: | ||||
Basic | $ 0.06 | $ (0.21) | $ (0.08) | $ (0.68) |
Diluted | $ (0.03) | $ (0.21) | $ (0.08) | $ (0.68) |
Weighted average common shares outstanding: | ||||
Basic | 75,470,238 | 42,673,528 | 74,324,689 | 35,907,118 |
Diluted | 81,236,678 | 42,673,528 | 74,324,689 | 35,907,118 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Preferred Stock (Class A) | Preferred Stock (Class B) | Total |
Balance at Dec. 31, 2017 | $ 28,771 | $ 18,741,114 | $ (18,241,708) | $ 1,000 | $ 13,784 | ||
Balance, Shares at Dec. 31, 2017 | 28,771,402 | 1,000,000 | 13,784,201 | ||||
Beneficial conversion feature of Series B convertible preferred stock | 22,202,194 | $ 22,202,194 | |||||
Deemed dividend on conversion of Series B convertible preferred stock to common stock | (22,202,194) | (22,202,194) | |||||
Issuance of common stock per investment unit agreements | $ 1,467 | 1,318,532 | 1,319,999 | ||||
Issuance of common stock per investment unit agreements, Shares | 1,466,666 | ||||||
Issuance of common stock resulting from convertible note PIK interest (paid) | $ 206 | 174,794 | 175,000 | ||||
Issuance of common stock resulting from convertible note PIK interest (paid), Shares | 205,974 | ||||||
Reduction in Additional Paid-In Capital due to Security Grade acquisition settlement agreement | (300,840) | (300,840) | |||||
Restricted common stock issued as part of BioTrackTHC acquisition | $ 38,185 | 57,513,848 | 57,552,033 | ||||
Restricted common stock issued as part of BioTrackTHC acquisition, Shares | 38,184,985 | ||||||
Share-based compensation expense | $ 292 | 676,461 | 676,753 | ||||
Share-based compensation expense, shares | 291,750 | ||||||
Issuance of warrants pursuant to consulting agreement | 943,000 | 943,000 | |||||
Issuance of common stock resulting from exercise of stock options | $ 213 | 213 | |||||
Issuance of common stock resulting from exercise of stock options, Shares | 212,633 | ||||||
Foreign currency translation | |||||||
Net income | (2,267,025) | (2,267,025) | |||||
Balance at Jun. 30, 2018 | $ 69,134 | 79,066,909 | (20,508,733) | $ 1,000 | $ 13,784 | 58,642,094 | |
Balance, Shares at Jun. 30, 2018 | 69,133,410 | 1,000,000 | 13,784,201 | ||||
Balance at Dec. 31, 2017 | $ 28,771 | 18,741,114 | (18,241,708) | $ 1,000 | $ 13,784 | ||
Balance, Shares at Dec. 31, 2017 | 28,771,402 | 1,000,000 | 13,784,201 | ||||
Balance at Dec. 31, 2018 | $ 72,660 | 82,831,014 | $ 17,991 | (26,207,510) | $ 1,000 | $ 13,784 | 56,728,939 |
Balance, Shares at Dec. 31, 2018 | 72,660,825 | 1,000,000 | 13,784,201 | ||||
Balance at Mar. 31, 2018 | $ 29,857 | 19,927,689 | (18,680,385) | $ 1,000 | $ 13,784 | ||
Balance, Shares at Mar. 31, 2018 | 29,857,448 | 1,000,000 | 13,784,201 | ||||
Beneficial conversion feature of Series B convertible preferred stock | 7,203,689 | 7,203,689 | |||||
Deemed dividend on conversion of Series B convertible preferred stock to common stock | (7,203,689) | (7,203,689) | |||||
Issuance of common stock per investment unit agreements | $ 745 | 669,254 | 669,999 | ||||
Issuance of common stock per investment unit agreements, Shares | 744,444 | ||||||
Reduction in Additional Paid-In Capital due to Security Grade acquisition settlement agreement | (210,522) | (210,522) | |||||
Restricted common stock issued as part of BioTrackTHC acquisition | $ 38,185 | 57,513,848 | 57,552,033 | ||||
Restricted common stock issued as part of BioTrackTHC acquisition, Shares | 38,184,985 | ||||||
Share-based compensation expense | $ 134 | 223,640 | 223,774 | ||||
Share-based compensation expense, shares | 133,900 | ||||||
Issuance of warrants pursuant to consulting agreement | 943,000 | 943,000 | |||||
Issuance of common stock resulting from exercise of stock options | $ 213 | 213 | |||||
Issuance of common stock resulting from exercise of stock options, Shares | 212,633 | ||||||
Foreign currency translation | |||||||
Net income | (1,828,348) | (1,828,348) | |||||
Balance at Jun. 30, 2018 | $ 69,134 | 79,066,909 | (20,508,733) | $ 1,000 | $ 13,784 | 58,642,094 | |
Balance, Shares at Jun. 30, 2018 | 69,133,410 | 1,000,000 | 13,784,201 | ||||
Balance at Dec. 31, 2018 | $ 72,660 | 82,831,014 | 17,991 | (26,207,510) | $ 1,000 | $ 13,784 | 56,728,939 |
Balance, Shares at Dec. 31, 2018 | 72,660,825 | 1,000,000 | 13,784,201 | ||||
Issuance of common stock per investment unit agreements | $ 1,422 | 66,247 | 67,669 | ||||
Issuance of common stock per investment unit agreements, Shares | 1,421,889 | ||||||
Issuance of common stock resulting from convertible note PIK interest (paid) | $ 156 | 117,781 | 117,937 | ||||
Issuance of common stock resulting from convertible note PIK interest (paid), Shares | 155,421 | ||||||
Share-based compensation expense | $ 270 | 889,130 | 889,400 | ||||
Share-based compensation expense, shares | 270,000 | ||||||
Issuance of common stock resulting from exercise of stock options | $ 79 | 26,534 | 26,613 | ||||
Issuance of common stock resulting from exercise of stock options, Shares | 78,644 | ||||||
Issuance of common stock resulting from cashless exercise of stock options | $ 110 | (110) | |||||
Issuance of common stock resulting from cashless exercise of stock options, Shares | 109,931 | ||||||
Restricted common stock issued as part of Tan Security acquisition | $ 250 | 709,750 | 710,000 | ||||
Restricted common stock issued as part of Tan Security acquisition, Shares | 250,000 | ||||||
Issuance of common stock in satisfaction of contingent consideration | $ 733 | 1,787,921 | 1,788,654 | ||||
Issuance of common stock in satisfaction of contingent consideration, Shares | 733,300 | ||||||
Issuance of common stock resulting from convertible note interest | $ 68 | 60,869 | 60,937 | ||||
Issuance of common stock resulting from convertible note interest, Shares | 67,708 | ||||||
Foreign currency translation | 3,657 | 3,657 | |||||
Net income | (6,029,393) | (6,029,393) | |||||
Balance at Jun. 30, 2019 | $ 75,748 | 86,489,136 | 21,648 | (32,236,903) | $ 1,000 | $ 13,784 | 54,364,413 |
Balance, Shares at Jun. 30, 2019 | 75,747,718 | 1,000,000 | 13,784,201 | ||||
Balance at Mar. 31, 2019 | $ 74,410 | 83,357,328 | 22,238 | (37,049,211) | $ 1,000 | $ 13,784 | 46,419,549 |
Balance, Shares at Mar. 31, 2019 | 74,410,397 | 1,000,000 | 13,784,201 | ||||
Issuance of common stock per investment unit agreements | $ 167 | 66,247 | 66,414 | ||||
Issuance of common stock per investment unit agreements, Shares | 166,667 | ||||||
Share-based compensation expense | 485,333 | 485,333 | |||||
Issuance of common stock resulting from exercise of stock options | $ 73 | 21,735 | 21,808 | ||||
Issuance of common stock resulting from exercise of stock options, Shares | 72,562 | ||||||
Issuance of common stock resulting from cashless exercise of stock options | $ 47 | (47) | |||||
Issuance of common stock resulting from cashless exercise of stock options, Shares | 47,084 | ||||||
Restricted common stock issued as part of Tan Security acquisition | $ 250 | 709,750 | 710,000 | ||||
Restricted common stock issued as part of Tan Security acquisition, Shares | 250,000 | ||||||
Issuance of common stock in satisfaction of contingent consideration | $ 733 | 1,787,921 | 1,788,654 | ||||
Issuance of common stock in satisfaction of contingent consideration, Shares | 733,300 | ||||||
Issuance of common stock resulting from convertible note interest | $ 68 | 60,869 | 60,937 | ||||
Issuance of common stock resulting from convertible note interest, Shares | 67,708 | ||||||
Foreign currency translation | (590) | (590) | |||||
Net income | 4,812,308 | 4,812,308 | |||||
Balance at Jun. 30, 2019 | $ 75,748 | $ 86,489,136 | $ 21,648 | $ (32,236,903) | $ 1,000 | $ 13,784 | $ 54,364,413 |
Balance, Shares at Jun. 30, 2019 | 75,747,718 | 1,000,000 | 13,784,201 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (6,029,393) | $ (2,267,025) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 2,355,977 | 1,063,278 |
Accretion of debt discounts | 519,472 | |
Loss on issuance of warrants | 787,209 | |
Provision for doubtful accounts | 104,288 | |
Share-based compensation expense | 889,400 | 676,753 |
Change in fair value of convertible notes, net of discount | 142,341 | (522,646) |
Change in fair value of obligation to issue warrants | (2,238,145) | (1,297,840) |
Change in fair value of convertible notes, net of discount - related party | 705,270 | (1,185,056) |
Change in fair value of contingent consideration | 880,050 | |
Loss on impairment of goodwill | 664,329 | |
Gain on reduction of obligation pursuant to acquisition | (557,054) | |
Gain on reduction of contingent consideration | (100,000) | |
Change in operating assets and liabilities: | ||
Accounts receivable | (563,744) | (353,355) |
Prepaid expenses | (134,876) | |
Deposits | 26,743 | (50,069) |
Due from related party | (32,489) | |
Costs in excess of billings | 30,852 | 31,570 |
Accounts payable and accrued expenses | 718,162 | 128,645 |
Other long-term liabilities | ||
Deferred rent | (2,937) | (6,077) |
Billings in excess of costs | (28,330) | 41,384 |
Right of use assets and liabilities | 80,296 | |
Net cash used in operating activities | (1,889,854) | (1,623,613) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | 505,904 | (484,838) |
Purchase of domain names | (17,383) | |
Payments for business combination, net of cash acquired | (123,727) | 448,697 |
Payments for asset acquisition | (58,730) | |
Net cash used in investing activities | (647,014) | (94,871) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Advances for related parties | (59,500) | |
Advance for note receivable | (75,000) | |
Payments pursuant to advances from related parties | (45,250) | |
Payments pursuant to notes payable | (11,322) | |
Payments pursuant to a promissory note | (280,000) | |
Proceeds from notes payable | 33,745 | |
Proceeds from the issuance of a promissory note | 280,000 | |
Proceeds from the issuance of convertible notes payable | 1,925,000 | |
Proceeds from the issuance of common stock | 1,306,313 | 1,320,212 |
Net cash provided by financing activities | 3,099,741 | 1,294,457 |
Effect of foreign exchange rate changes on cash | (48,619) | |
Net change in cash | 514,254 | (424,027) |
Cash, beginning of period | 285,761 | 868,554 |
Cash, end of period | 800,015 | 444,527 |
Supplemental disclosure of cash and non-cash transactions: | ||
Conversion of convertible note into common stock | 117,937 | 175,000 |
Debt discount for warrant liability | (1,542,000) | |
Equity issued pursuant to asset acquisition | 710,000 | 57,552,033 |
Security Grade acquisition consideration settlement | (300,840) | |
PIK interest payment of common stock | 60,937 | |
Common stock issued pursuant to consideration as part of acquisition | 1,788,654 | |
Supplemental non-cash amounts of lease liabilities arising from obtaining right of use assets | $ 1,485,511 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2019 | |
Description of Business [Abstract] | |
Description of Business | 1. Description of Business Helix TCS, Inc. (the "Company" or "Helix") was incorporated in Delaware on March 13, 2014. Pursuant to the acquisition of the assets of Helix TCS, LLC, as discussed below, we changed our name from Jubilee4 Gold, Inc. to Helix TCS, Inc. effective October 25, 2015. Effective October 25, 2015, we entered into an acquisition and exchange agreement with Helix TCS, LLC. We closed the transaction contemplated under the acquisition and exchange agreement on December 23, 2015 and Helix TCS, LLC was merged into and with Helix. Effective October 1, 2015, for accounting purposes, as part of an acquisition amounting to a reorganization dated December 21, 2015, Helix Opportunities LLC exchanged 100% of Helix TCS, LLC and its wholly-owned subsidiaries, Security Consultants Group, LLC and Boss Security Solutions, Inc. to the Company in exchange for 20 million common shares and 1 million convertible preferred shares of the Company. The acquisition of Helix was treated as a recapitalization for financial accounting purposes. Jubilee4 Gold, Inc. is considered the acquiree for accounting purposes and their historical financial statements before the Acquisition Agreement were replaced with the historical financial statements of the Company. The common stock account of the Company continues post-merger, while the retained earnings of the acquiree is eliminated. Furthermore, on April 11, 2016, the Company acquired the assets of Revolutionary Software, LLC ("Revolutionary"). On March 3, 2018, Helix, Inc. and its wholly owned subsidiary, Helix Acquisition Sub, Inc. ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement") with Bio-Tech Medical Software, Inc. ("BioTrackTHC") and Terence J. Ferraro, as the representative of the BioTrackTHC shareholders, pursuant to which Merger Sub merged with and into BioTrackTHC (the "Merger"). On June 1, 2018 (the "BioTrackTHC Closing Date"), in connection with closing the Merger, the Company issued 38,184,985 unregistered shares of its common stock to BioTrackTHC stockholders, of which 1,852,677 shares were held back to satisfy indemnification obligations in the Merger Agreement, if necessary. The Company also assumed the Bio-Tech Medical Software, Inc. 2014 Stock Incentive Plan ("BioTrackTHC Stock Plan"), pursuant to which options exercisable in the amount of 8,132,410 shares of common stock are outstanding. As a result, BioTrackTHC stockholders will own 48% of the Company on a fully diluted basis on the BioTrackTHC Closing Date. On August 3, 2018 (the "Engeni Closing Date"), the Company and its wholly owned subsidiary, Engeni Merger Sub, LLC ("Engeni Merger Sub"), entered into an Agreement and Plan of Merger (the "Engeni Merger Agreement") with Engeni LLC ("Engeni US"), Engeni S.A ("Engeni SA"), Scott Zienkewicz, Nicolas Heller and Alberto Pardo Saleme (the Engeni US members), and Scott Zienkewicz, as the representative of the Engeni US members. Pursuant to the Engeni Merger Agreement, Engeni Merger Sub merged with and into Engeni US, with Engeni US surviving the merger as a wholly-owned subsidiary of the Company (the "Engeni Merger"). On the Engeni Closing Date, in connection with closing the Engeni Merger Agreement, the Company issued 366,700 shares of Company common stock to Engeni US members. Furthermore, the Company subsequently issued Engeni US members 733,300 shares of Company common stock on April 2, 2019. On February 5, 2019, the Company and its wholly owned subsidiary, Merger Sub, entered into an Agreement and Plan of Merger (the "Amercanex Merger Agreement") with Green Tree International, Inc., a corporation incorporated under the laws of the state of Colorado operating under the tradename "Amercanex International Exchange" ("Amercanex"). Pursuant to the Amercanex Merger Agreement, subject to the satisfaction or waiver of specified conditions, Merger Sub will merge with and into Amercanex, with Amercanex surviving the merger as a wholly-owned subsidiary of the Company. The Merger is expected to close during the third quarter of 2019. On April 1, 2019 ("Tan Security Closing Date"), the Company entered into a Membership Interest and Stock Purchase Agreement (the "Tan Security Acquisition Agreement") with Tan's International Security and Tan's International LLC (collectively, "Tan Security"). Pursuant to the Tan Security Acquisition Agreement, the Company purchased all membership interests and capital stock of Tan Security and collectively holds 100% of the interests of Tan Security (the "Tan Security Acquisition"). |
Going Concern Uncertainty, Fina
Going Concern Uncertainty, Financial Condition and Management's Plans | 6 Months Ended |
Jun. 30, 2019 | |
Going Concern Uncertainty, Financial Condition and Management's Plans [Abstract] | |
Going Concern Uncertainty, Financial Condition and Management's Plans | 2. Going Concern Uncertainty, Financial Condition and Management's Plans The Company believes that there is substantial doubt about the Company's ability to continue as a going concern. The Company believes that its available cash balance as of the date of this filing will not be sufficient to fund its anticipated level of operations for at least the next 12 months. The Company believes that its ability to continue operations depends on its ability to sustain and grow revenue and results of operations as well as its ability to access capital markets when necessary to accomplish the Company's strategic objectives. The Company believes that it will continue to incur losses for the immediate future. The Company expects to finance future cash needs from its results of operations and, depending on the results of operations, the Company may need additional equity or debt financing until it can achieve profitability and positive cash flows from operating activities, if ever. At June 30, 2019, the Company had a working capital deficit of $3,715,022, as compared to a working capital deficit of $2,233,652 at December 31, 2018. The increase of $1,481,370 in the Company's working capital deficit from December 31, 2018 to June 30, 2019 was primarily the result of a non-cash increase in the fair market value of the Company's convertible notes payable, net of discount – related party and an increase in the warrant liability, partially offset by a decrease in contingent consideration. The Company's future capital requirements for its operations will depend on many factors, including the profitability of its businesses, the number and cash requirements of other acquisition candidates that the Company pursues, and the costs of operations. The Company has been investing in expanding its operation in new states, its security service in Colorado and California, and upgrading the capabilities of BioTrackTHC. The Company's management has taken several actions to ensure that it will have sufficient liquidity to meet its obligations for the next twelve months, including growing and diversifying its revenue streams, selectively reducing expenses, and considering additional funding. Additionally, if the Company's actual revenues are less than forecasted, the Company anticipates that variable expenses will also decline, and the Company's management can implement expense reduction as necessary. The Company is evaluating other measures to further improve its liquidity, including the sale of equity or debt securities. Lastly, the Company may elect to reduce certain related-party and third-party debt by converting such debt into common shares. The Company's management believes that these actions will enable the Company to meet its liquidity requirements through August 16, 2020. There is no assurance that the Company will be successful in any capital-raising efforts that it may undertake to fund operations during 2019 and beyond. On May 31, 2019 the Company filed with the SEC a registration statement on Form S-1 under the Securities Act, with respect to the securities being offered. The Company is working with an investment bank to identify investors in anticipation of raising up to $5 million in new equity capital. The Company plans to generate positive cash flow from its Colorado and California security operations, BioTrackTHC and Engeni software operations to address some of the liquidity concerns. However, to execute the Company's business plan, service existing indebtedness and implement its business strategy, the Company anticipates that it will need to obtain additional financing from time to time and may choose to raise additional funds through public or private equity or debt financings, borrowings from affiliates or other arrangements. The Company cannot be sure that any additional funding, if needed, will be available on terms favorable to the Company or at all. Furthermore, any additional capital raised through the sale of equity or equity-linked securities may dilute the Company's current stockholders' ownership and could also result in a decrease in the market price of the Company's common stock. The terms of those securities issued by the Company in future capital transactions may be more favorable to new investors and may include the issuance of warrants or other derivative securities, which may have a further dilutive effect. The Company also may be required to recognize non-cash expenses in connection with certain securities it issues, such as convertible notes and warrants, which may adversely impact the Company's operating results and financial condition. Furthermore, any debt financing, if available, may subject the Company to restrictive covenants and significant interest costs. There can be no assurance that the Company will be able to raise additional capital, when needed, to continue operations in their current form. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, which include Helix TCS, LLC ("Helix TCS"), Security Consultants Group, LLC ("Security Consultants"), Boss Security Solutions, Inc. ("Boss Security"), Security Consultants Group Oregon, LLC ("Security Oregon"), Security Grade, BioTrackTHC (since June 1, 2018, Engeni US (since August 3, 2018), and Tan Security (since April 1, 2019). Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Changes in estimates and assumptions are reflected in reported results in the period in which they become known. Use of estimates includes the following: 1) allowance for doubtful accounts, 2) estimated useful lives of property, equipment and intangible assets, 3) intangibles impairment, 4) valuation of convertible notes payable and 5) revenue recognition. Actual results could differ from estimates. Cash Cash consists of checking accounts. The Company considers all highly liquid investments purchased with a maturity of three months or less at the time of purchase to be cash equivalents. The Company has no cash equivalents as of June 30, 2019 or December 31, 2018. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company performs ongoing credit evaluations of its customers and adjusts credit limits based upon payment history and the customer's current credit worthiness, as determined by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and economic conditions. Management charges balances off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company determines when receivables are past due, or delinquent based on how recently payments have been received. Outstanding account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing accounts receivable. Allowance for doubtful accounts was $77,046 and $76,156 at June 30, 2019 and December 31, 2018, respectively. Long-Lived Assets, Including Definite Lived Intangible Assets Long-lived assets, other than goodwill and other indefinite-lived intangibles, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. Definite-lived intangible assets primarily consist of non-compete agreements and customer relationships. For long-lived assets used in operations, impairment losses are only recorded if the asset's carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value. Goodwill Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. Helix reviews goodwill for possible impairment annually during the fourth quarter, or whenever events or circumstances indicate that the carrying amount may not be recoverable. The impairment model prescribes a two-step method for determining goodwill impairment. However, an entity is permitted to first assess qualitative factors to determine whether the two-step goodwill impairment test is necessary. The qualitative factors considered by Helix may include, but are not limited to, general economic conditions, Helix's outlook, market performance of Helix's industry and recent and forecasted financial performance. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit's fair value is less than its carrying amount. Otherwise, no further impairment testing is required. In the first step, Helix determines the fair value of its reporting unit using a discounted cash flow analysis. If the net book value of the reporting unit exceeds its fair value, Helix then performs the second step of the impairment test, which requires allocation of the reporting unit's fair value to all of its assets and liabilities using the acquisition method prescribed under authoritative guidance for business combinations with any residual fair value being allocated to goodwill. An impairment charge is recognized when the implied fair value of Helix's goodwill is less than its carrying amount. Assumptions and estimates used in the evaluation of impairment may affect the carrying value of long-lived assets, which could result in impairment charges in future periods. Such assumptions include projections of future cash flows and the current fair value of the asset Accounting for Acquisitions In accordance with the guidance for business combinations, the Company determines whether a transaction or other event is a business combination, which requires that the assets acquired, and liabilities assumed constitute a business. Each business combination is then accounted for by applying the acquisition method. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. The Company capitalizes acquisition-related costs and fees associated with asset acquisitions and immediately expenses acquisition-related costs and fees associated with business combinations. The Company accounts for its business combinations under the provisions of Accounting Standards Codification ("ASC") Topic 805-10, Business Combinations ("ASC 805-10"), which requires that the purchase method of accounting be used for all business combinations. Assets acquired and liabilities assumed, including non-controlling interests, are recorded at the date of acquisition at their respective fair values. ASC 805-10 also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date and any changes in fair value after the acquisition date are accounted for as measurement-period adjustments. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn-outs, are recognized as follows: 1) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent settlement is accounted for within equity, or 2) if the contingent consideration is classified as a liability, the changes in fair value are recognized in earnings. Revenue Recognition Under Financial Accounting Standards Board ("FASB") Topic 606, Revenue from Contacts with Customers The security services revenue is generated from performing armed and unarmed guarding which is contracted for on an hourly basis. Revenues associated with these contracted services are recognized under time-based arrangements as services are provided. Additionally, the Company provides transportation security services, which are generally contracted for on a per-run basis and sometimes additional fees and surcharges are also billed to the client depending on the length of the run. Revenues associated with these services are recognized as the transportation service is provided. The Company also generates revenue from developing and licensing seed to sale cannabis compliance software to both private-sector and public-sector (government agencies) businesses that are involved in cannabis related operations. The Company also generates revenue from on-going training, support and software customization services. Occasionally, the Company will enter into systems installation arrangements. Installation jobs are estimated based on the cost of equipment to be installed, the number of hours expected to be incurred to complete the job and other ancillary costs. Revenue associated with these services are recognized over the arrangement period. Lastly, the Company generates advertising revenues from consumer advertising on its Cannabase platform. Revenue is recognized over the contract period associated with each specific advertising campaign. Segment Information FASB ASC Topic 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company's chief operating decision maker is the Chief Executive Officer, who reviews the financial performance and the results of operations of the segments prepared in accordance with GAAP when making decisions about allocating resources and assessing performance of the Company. Asset information by operating segment is not presented since the chief operating decision maker does not review this information by segment. The reporting segments follow the same accounting policies used in the preparation of the Company's condensed unaudited consolidated financial statements. Expenses Cost of Revenues The cost of revenues is the total cost incurred to obtain a sale and the cost of the goods or services sold. Cost of revenues primarily consisted of hourly compensation for security personnel and employees involved in the creation and development of licensing software. Operating Expenses Operating expenses encompass selling general and administrative expenses, salaries and wages, professional and legal fees, loss on impairment of Goodwill and depreciation. Selling, general and administrative expenses consist primarily of rent/moving expenses, advertising and travel expenses. Salaries and wages is composed of non-revenue generating employees. Professional services are principally comprised of outside legal, audit, information technology consulting, marketing and outsourcing services as well as the costs related to being a publicly traded company. Other Income (Expense), net Other income (expense), net consisted of change in fair value of convertible note, change in fair value of convertible note – related party, change in fair value of contingent consideration, change in fair value of warrant liability, loss on issuance of warrants, gain on reduction of obligation pursuant to acquisition and interest (expense) income. Property and Equipment Property and equipment are stated at cost and depreciated on a straight-line basis over their estimated useful lives. Useful lives are 3 years for vehicles and 5 years for furniture and equipment. Maintenance and repairs are expensed as incurred and major improvements are capitalized. When assets are sold, or retired, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in other income. Contingencies Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company's consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. Advertising Advertising costs are expensed as incurred and included in selling, general and administrative expenses and amounted to $178,219 and $34,963 for the three months ended June 30, 2019 and 2018, respectively, and $247,490 and $61,737 for the six months ended June 30, 2019 and 2018, respectively. Foreign Currency The local currency is the functional currency for one entity's operations outside the United States. Assets and liabilities of these operations are translated to U.S. dollars at the exchange rate in effect at the end of each period. Income statement accounts are translated at the average exchange rate prevailing during the period. Translation adjustments arising from the use of differing exchange rates from period to period are included as a component of other comprehensive income within shareholders' equity. Gains and losses from foreign currency transactions are included in net loss for the period. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Comprehensive Income (Loss) Comprehensive income (loss) consists of consolidated net income (loss) and foreign currency translation adjustments. Foreign currency translation adjustments included in comprehensive income (loss) were not tax-effected as investments in international affiliates are deemed to be permanent. Distinguishing Liabilities from Equity The Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet ("temporary equity"). The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e. at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity. Initial Measurement The Company records its financial instruments classified as liability, temporary equity or permanent equity at issuance at the fair value, or cash received. Subsequent Measurement – Financial instruments classified as liabilities The Company records the fair value of its financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial instruments classified as liabilities are recorded as other expense/income. Beneficial Conversion Feature If the conversion features of conventional convertible debt provide for a rate of conversion that is below market value, this feature is characterized as a Beneficial Conversion Feature ("BCF"). A beneficial conversion feature is recorded by the Company as a debt discount pursuant to ASC 470-20, Debt with Conversion and Other Options The Company accounts for the beneficial conversion feature on its convertible preferred stock in accordance with ASC 470-20, Debt with Conversion and Other Options To determine the effective conversion price, the Company first allocates the proceeds received to the convertible preferred stock and then uses those allocated proceeds to determine the effective conversion price. If the convertible instrument is issued in a basket transaction (i.e., issued along with other freestanding financial instruments), the proceeds should first be allocated to the various instruments in the basket. Any amounts paid to the investor when the transaction is consummated (e.g., origination fees, due diligence costs) represent a reduction in the proceeds received by the issuer. The intrinsic value of the conversion option should be measured using the effective conversion price for the convertible preferred stock on the proceeds allocated to that instrument. The effective conversion price represents proceeds allocable to the convertible preferred stock divided by the number of shares into which it is convertible. The effective conversion price is then compared to the per share fair value of the underlying shares on the commitment date. The accounting for a BCF requires that the BCF be recognized by allocating the intrinsic value of the conversion option to additional paid-in capital, resulting in a discount on the convertible preferred stock. This discount should be accreted from the date on which the BCF is first recognized through the earliest conversion date for instruments that do not have a stated redemption date. The intrinsic value of the BCF is recognized as a deemed dividend on convertible preferred stock over a period specified in the guidance. Share-based Compensation The Company accounts for stock-based compensation to employees in conformity with the provisions of ASC Topic 718, Stock Based Compensation The measurement of stock-based compensation is subject to periodic adjustments as the underlying equity instruments vest and is recognized as an expense over the period which services are received. The Company calculates the fair value of option grants utilizing the Black-Scholes pricing model and estimates the fair value of the stock based upon the estimated fair value of the common stock. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on a straight- line basis over the requisite service period of the award. Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurements and Disclosures ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC Topic 820 are described as follows: ● Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date. ● Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3 – Inputs that are unobservable for the asset or liability. Certain assets and liabilities of the Company are required to be recorded at fair value either on a recurring or non-recurring basis. Fair value is determined based on the price that would be received for an asset or paid to transfer a liability in an orderly transaction based on market participants. The following section describes the valuation methodologies that the Company used to measure, for disclosure purposes, its financial instruments at fair value. Convertible notes payable The fair value of the Company's convertible notes payable, approximated the carrying value as of June 30, 2019 and December 31, 2018. Factors that the Company considered when estimating the fair value of its debt included market conditions and the term of the debt. The level of the debt would be considered as Level 2. Additional Disclosures Regarding Fair Value Measurements The carrying value of cash, accounts receivable, prepaid expenses, deposits, accounts payable and accrued liabilities, advances from shareholders and obligation pursuant to acquisition approximate their fair value due to the short-term maturity of those items. Earnings (Loss) per Share The Company follows ASC 260, Earnings Per Share For the three months ended June 30, 2018 and the six months ended June 30, 2019 and 2018, potential common shares includable in the computation of fully-diluted per share results are not presented in the condensed consolidated financial statements as their effect would be anti-dilutive. For the three months ended June 30, 2019, dilutive earnings per share are calculated by dividing net income attributable to common shareholders less the change in fair value of warrant liability, the change in fair value of convertible notes, interest expense on convertible notes, and the debt discount amortized on convertible notes. The calculation of diluted EPS excludes 24,571,582 shares for securities which have been deemed to be anti-dilutive. Earnings per share for the three and six months ended June 30, 2019 and 2018 were calculated as follows: For the Three Months For the Six Months 2019 2018 2019 2018 Numerator Net income attributable to common shareholders $ 4,811,718 $ (9,032,037 ) $ (6,025,736 ) $ (24,469,219 ) Effect of dilutive instruments on net loss (7,024,580 ) - - - Net income (loss) attributable to common shareholders - diluted $ (2,212,862 ) $ (9,032,037 ) $ (6,025,736 ) $ (24,469,219 ) Denominator Weighted average shares of common stock outstanding - basic 75,470,238 42,673,528 74,324,689 35,907,118 Dilutive effect of warrants and convertible securities 5,766,440 - - - Weighted average shares of common stock outstanding - diluted 81,236,678 42,673,528 74,324,689 35,907,118 Net income (loss) per share Basic $ 0.06 $ (0.21 ) $ (0.08 ) $ (0.68 ) Diluted $ (0.03 ) $ (0.21 ) $ (0.08 ) $ (0.68 ) Reclassifications Certain reclassifications have been made to the prior period financial statements to conform to the current period financial statement presentation. These reclassifications had no effect on net earnings or cash flows as previously reported. Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-.02, Leases (Topic 842) The Company adopted the new standard on January 1, 2019 and used the modified retrospective approach with the effective date as the date of initial application. Consequently, prior period balances and disclosures have not been restated. The Company elected certain practical expedients, which among other things, allowed us to carry forward prior conclusions about lease identification and classification. Adoption of the standard resulted in the balance sheet recognition of additional lease assets and lease liabilities of approximately $1,500,000. The new standard also provides practical expedients for an entity's ongoing accounting. The Company currently has elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in separate lease and non-lease components for all our leases. For additional information regarding the Company's leases, see Note 18 in the notes to condensed consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220); Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (ASC 718): Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (ASC 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on the Company's consolidated financial statements and related disclosures. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2019 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | 4. Revenue Recognition Disaggregation of revenue For the Three Months Ended June 30, For the Six Months Ended June 30, 2019 2018 2019 2018 Types of Revenues: Security and Guarding $ 1,347,529 $ 1,197,201 $ 2,552,240 $ 2,290,975 Systems Installation 174,067 100,699 202,608 135,263 Software 2,377,277 576,142 4,515,132 576,142 Total revenues $ 3,898,873 $ 1,874,042 $ 7,269,980 $ 3,002,380 The following is a description of the principal activities from which we generate our revenue. Security and Guarding Revenue Helix provides armed and unarmed guards, monitoring of security alarms and cameras, as well as armed transportation services. The guards are charged out at an hourly rate, as are the monitoring services, with invoices typically sent to clients shortly after each month-end for the previous month, with revenue being recognized over time. The customer simultaneously receives and consumes benefits provided by the Helix performance. Transportation services are typically invoiced on a per-run basis, with revenue being recognized at a point in time once the service has been completed. Systems Installation Revenue Security systems, including Internet Protocol camera, intrusion alarm systems, perimeter alarm systems, and access controls are installed for clients. Installation jobs are estimated based on the cost of the equipment, the number of man hours expected to complete the work, supplies, travel, and any other ancillary costs. The installation is typically invoiced with 60% of the total price immediately after signing and the balance upon completion of the installation service. The timing of these contracts are short-term in nature and are less than 12 months in duration, and revenue is recognized over the term of the contracts, utilizing the cost-to-cost method. Software The Company generates revenue from developing and licensing seed to sale cannabis compliance software to both private-sector and public-sector (government agencies) clients that are involved in cannabis related operations. The Company also generates revenue from on-going training, support and software customization services. The private-sector software entails cultivation tracking, inventory management, point of sale and analytic reporting to assist businesses in meeting their compliance requirements and effectively managing their businesses. Customers within the private sector business are charged an initial one-time installation fee and the revenues associated with these services are recognized upon completion of installation and configuration at a point in time. After the installation and configuration of the software is completed, the customer is invoiced monthly and revenues associated with these services are recognized monthly over a period of time in which the customer continues to use the software and related services. The public-sector software assists government agencies in efficient oversight of cannabis related business under their jurisdiction. Revenues associated with governmental contracts are longer-term in nature and recognized upon completion of certain milestones over a period of time or on a completed-contract basis at a point in time. The Company considers the contract to be complete when all significant costs have been incurred and the customer accepts the project. Costs incurred prior to the customer accepting the project are deferred and reflected on the condensed consolidated balance sheets as prepaid expenses and other current assets. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in accordance with ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Generally, the Company’s contracts include a single performance obligation that is separately identifiable, and therefore, distinct. Under ASC 606, the allocation of transaction price is not necessary if only one performance obligation is identified. Significant Judgments Accounting for long-term contracts involves the use of various techniques to estimate total contract revenue, costs and satisfaction of performance obligation. The Company satisfies its performance obligations and subsequently recognizes revenue, over time, as security and installation services are performed. There were no changes to the significant judgments used by the Company to determine the timing of satisfaction of the performance obligations under ASC 606. Costs to Obtain or Fulfill Contract The Company’s costs to fulfill or obtain contracts with customers primarily consist of commissions and legal costs. The Company provides sales team members with commissions at 0-6%. Although sales commissions are incremental in nature and are only incurred when a contract is obtained, there is no up-front commission paid on the satisfactory obtainment of a contract, resulting in no sales commissions being capitalized at June 30, 2019 and December 31, 2018. The Company also incurs legal costs relating to the drafting and negotiating of contracts with select customers. Because legal costs are not incremental in nature and are incurred regardless of whether a contract is ultimately obtained, there were no legal costs capitalized as of June 30, 2019 and December 31, 2018. The Company did not record amortization of costs incurred to obtain the contract or any impairment losses for the period ending June 30, 2019 and 2018. |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | 5. Business Combinations Security Grade Acquisition On June 2, 2017 (the “Security Grade Closing Date”), the Company entered into a Membership Interest Purchase Agreement (the “Security Grade Acquisition Agreement”) in which the Company purchased all issued and outstanding units of Security Grade Protective Services, Ltd. (“Security Grade”), which consisted of 800,000 Class A Units and 200,000 Class B Units. On the Security Grade Closing Date, the Company delivered $800,000 in cash and 207,427 non-qualified stock options (the “Initial Stock Options”). Furthermore, provided that, within the first 60 days following the Security Grade Closing Date, no material customer identified in the Security Grade Acquisition Agreement terminates its contractual relationship with the Company and that all contracts with such material customers are in full force and effect without default or cancellation as of the 60th day following the Security Grade Closing Date, on the 61st day following the Security Grade Closing Date, the Company shall issue an additional $800,000 in cash and issue 207,427 additional stock options (the “Additional Stock Options”). In the event of termination, cancellation or default of any contract with one or more material customer identified in the Security Grade Acquisition Agreement within the first 60 days following the Security Grade Closing Date, the stock options received by the acquiree shall be reduced and/or forfeited to the extent necessary (pro rata based upon their ownership interest in the Company immediately preceding the closing) by a percentage equal to the revenue received by the Company from the terminating customer(s) in the 180 days immediately preceding such termination divided by the revenue received by the Company from all material customers identified in the Security Grade Acquisition Agreement in the 180 days immediately preceding such termination. The Company subsequently issued the 207,427 Additional Stock Options on August 1, 2017 as well as a second cash payment of $800,000 pursuant to the original terms of the Security Grade Acquisition Agreement. In the first quarter of 2018, the Company notified the selling members of Security Grade of their intent to exercise their right of setoff noted in the Security Grade Acquisition Agreement after discovering misrepresentations made by one of the selling members of Security Grade. The Company has settled with all of the six selling members. As of June 30, 2019 and December 31, 2018, the Company has a liability pursuant to the Security Grade Acquisition Agreement of $0 and $101,667, respectively, payable following the closing. The merger is being accounted for as a business combination in accordance with ASC 805. The Company’s allocation of the purchase price was calculated as follows: Base Price – Cash $ 2,100,373 Base Price - Stock Options 916,643 Contingent Consideration - Stock Options 916,643 Total Purchase Price $ 3,933,659 Weighted Description Fair Value (in years) Assets acquired: Cash $ 14,137 Accounts receivable 53,792 Costs & earnings in excess of billings 96,898 Property, plant and equipment, net 27,775 Trademarks 25,000 10 Customer lists 3,154,578 5 Web address 5,000 5 Goodwill 664,329 Other assets 3,880 Total assets acquired $ 4,045,389 Liabilities assumed: Billings in excess of costs $ 23,967 Loans payable 18,414 Credit card payable and other liabilities 69,349 Total liabilities assumed 111,730 Estimated fair value of net assets acquired $ 3,933,659 The Initial Stock Options are included as part of the purchase price. The Company determined the fair value of the contingent consideration to be $916,643 at June 2, 2017 and recorded it as a liability in its unaudited condensed consolidated balance sheet. The Company satisfied their contingent consideration liability during the third quarter of 2017. During the year ended December 31, 2018, the Company reached settlement agreements with all six selling members. As a result of these settlements, 79,486 options previously issued as part of the acquisition were cancelled (see Note 14). BioTrackTHC Acquisition On March 3, 2018, the Company and its wholly owned subsidiary, Merger Sub, entered into the Merger Agreement with BioTrackTHC and Terence J. Ferraro, as the representative of the BioTrackTHC shareholders, pursuant to which Merger Sub merged with and into BioTrackTHC. On the BioTrackTHC Closing Date, the Company closed the Merger. In connection with closing the Merger, the Company issued 38,184,985 unregistered shares of Company common stock to BioTrackTHC stockholders, of which 1,852,677 shares were held back to satisfy indemnification obligations in the Merger Agreement, if necessary. The Company also assumed the BioTrackTHC Stock Plan, pursuant to which options exercisable for 8,132,410 shares of Company common stock are outstanding so that the BioTrackTHC stockholders will own 48% of the Company on a fully diluted basis at closing. The Merger is being accounted for as a business combination in accordance with ASC 805. The Company’s allocation of the purchase price was calculated as follows: Base Price - Common Stock $ 44,905,542 Base Price - Stock Options 12,646,491 Total Purchase Price $ 57,552,033 Weighted Description Fair Value (in years) Assets acquired: Cash $ 448,697 Accounts receivable 128,427 Prepaid expenses 351,615 Property, plant and equipment, net 72,252 Goodwill 39,135,007 Customer list 8,304,449 5 Software 9,321,627 4.5 Tradename 466,081 4.5 Total assets acquired $ 58,228,155 Liabilities assumed: Accounts payable $ 223,581 Other liabilities 452,541 Total liabilities assumed 676,122 Estimated fair value of net assets acquired $ 57,552,033 Engeni SA Acquisition On the Engeni Closing Date, the Company and its wholly owned subsidiary, Engeni Merger Sub, entered into the Engeni Merger Agreement with Engeni US, Engeni SA, the members of Engeni US, and Scott Zienkewicz as the representative of the Engeni US members. Pursuant to the Engeni Merger Agreement, Engeni Merger Sub merged with and into Engeni US, with Engeni US surviving the merger as a wholly-owned subsidiary of the Company. On the Engeni Closing Date, in connection with closing the Engeni Merger Agreement, the Company issued 366,700 shares of Company common stock to Engeni US members. Furthermore, the Company may also issue Engeni US members 366,700 and 366,600 shares of Parent common stock upon the achievement of specific objectives. If applicable, the Company will pay Engeni US members the aggregate amount of $100,000, on a pro rata basis, if Engeni SA reaches financial breakeven on or before December 31, 2018, as determined by the Company’s Chief Financial Officer and Scott Zienkewicz. The Engeni Merger is being accounted for as a business combination in accordance with ASC 805. The Company has determined fair values of the assets acquired and liabilities assumed in the Engeni Merger. These values are subject to change as we perform additional reviews of our assumptions utilized. During the first quarter of 2019, it was determined Engeni SA did not reach financial breakeven and therefore the contingent consideration of $100,000 was deemed by the Company not to be payable and was reduced to zero. In accordance with ASC 805-30-35-1, the Company recognized the change in the fair value of contingent consideration subsequent to the acquisition date in general and administrative expenses. The Company’s allocation of the purchase price was calculated as follows: As Adjusted Base Price - Common Stock $ 388,702 Contingent Consideration - Common Stock 777,298 Contingent Consideration - Cash - Total Purchase Price $ 1,166,000 Weighted Description Fair Value (in years) Assets acquired: Cash $ 5,609 Accounts receivable and other assets 30,479 Property, plant and equipment, net 57,830 Software 449,568 3.3 Goodwill 778,552 Total assets acquired $ 1,322,038 Liabilities assumed: Accounts payable $ 56,038 Total liabilities assumed 56,038 Estimated fair value of net assets acquired $ 1,266,000 The Company determined the fair value of the contingent consideration to be $777,298 at August 3, 2018 and recorded it as a liability in its unaudited condensed consolidated balance sheets. On April 2, 2019, the Company satisfied their contingent consideration liability and issued 733,300 shares of the Company’s common stock to Engeni US members. Tan’s International Security On the Tan Security Closing Date, the Company entered into the Tan Security Acquisition Agreement. Pursuant to the Tan Security Acquisition Agreement, Helix purchased all membership interests and capital stock of Tan Security and collectively holds 100% of the interests of Tan Security. The purchase price of $100,000 in cash plus 250,000 shares of the Company’s restricted common stock will be paid to Rocky Tan as follows: ● 250,000 shares of Helix Stock at closing. ● $25,000 at closing ● $25,000 on the 4-month anniversary of the Tan Security Closing Date ● $25,000 on the 8-month anniversary of the Tan Security Closing Date ● $25,000 on the 12-month anniversary of the Tan Security Closing Date The Tan Security Acquisition is being accounted for as a business combination in accordance with ASC 805. The Company has determined preliminary fair values of the assets acquired and liabilities assumed in the Tan Security Acquisition. These values are subject to change as we perform additional reviews of our assumptions utilized. The Company has made a provisional allocation of the purchase price of the Tan Security transaction to the assets acquired and the liabilities assumed as of the purchase date. The following table summarizes the provisional purchase price allocations relating to the Tan Security Acquisition: Base Price – Cash at closing $ 25,000 Base Price – Deferred cash payment (including $25,000 to be made on the 4,8 and 12-month anniversaries of closing) 75,000 Base Price – Common Stock 710,000 Total Purchase Price $ 810,000 Description Fair Value Assets acquired: Cash $ 2,940 Accounts receivable 7,635 Goodwill 821,807 Total assets acquired $ 832,382 Liabilities assumed: Accounts payable $ 12,526 Other liabilities 9,856 Total liabilities assumed 22,382 Estimated fair value of net assets acquired $ 810,000 The Company has not completed the assessment necessary to finalize the acquisition fair values of the assets acquired and liabilities assumed and related allocation of purchase price for Tan Security. Accordingly, the type and value of the intangible assets amounts set forth above are preliminary. Once the valuation process is finalized for Tan Security, there could be changes to the reported values of the assets acquired and liabilities assumed, including goodwill and those changes could differ materially from what is presented above. |
Property and Equipment, Net
Property and Equipment, Net | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 6. Property and Equipment, Net At June 30, 2019 and December 31, 2018, property and equipment consisted of the following: June 30, December 31, Furniture and equipment $ 139,782 $ 264,659 Software equipment 352,505 - Vehicles 201,066 202,700 Total 693,353 467,359 Less: Accumulated depreciation (147,535 ) (117,841 ) Property and equipment, net $ 545,818 $ 349,518 Depreciation expense for the three months ended June 30, 2019 and 2018 was $29,509 and $32,893, respectively, and $47,222 and $35,893 for the six months ended June 30, 2019 and 2018, respectively. |
Intangible Assets, Net and Good
Intangible Assets, Net and Goodwill | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net and Goodwill | 7. Intangible Assets, Net and Goodwill The following table summarizes the Company's intangible assets as of June 30, 2019 and December 31, 2018: June 30, Estimated Gross Assets Accumulated Net Book Database 5 $ 93,427 $ - $ (60,119 ) $ 33,308 Trade names and trademarks 5 - 10 591,081 - (149,063 ) 442,018 Web addresses 5 130,000 - (82,511 ) 47,489 Customer list 5 11,459,027 - (3,101,382 ) 8,357,645 Software 4.5 9,771,195 - (2,356,189 ) 7,415,006 Domain Name 5 - 17,383 (143 ) 17,240 $ 22,044,730 $ 17,383 $ (5,749,407 ) $ 16,312,706 December 31, Estimated Gross Assets Accumulated Net Book Database 5 $ 93,427 $ - $ (50,858 ) $ 42,569 Trade names and trademarks 5 - 10 125,000 466,081 (91,554 ) 499,527 Web addresses 5 130,000 - (69,625 ) 60,375 Customer list 5 3,154,578 8,304,449 (1,965,520 ) 9,493,507 Software 4.5 - 9,771,195 (1,263,095 ) 8,508,100 $ 3,503,005 $ 18,541,725 $ (3,440,652 ) $ 18,604,078 (1) On June 1, 2018, the Company acquired various assets of BioTrackTHC (See Note 5) (2) On August 3, 2018, the Company acquired various assets of Engeni (See Note 5) The Company uses the straight-line method to determine the amortization expense for its definite lived intangible assets. Amortization expense related to the purchased intangible assets was $1,160,827 and $476,003 for the three months ended June 30, 2019 and 2018, respectively, and $2,308,755 and $645,579 for the six months ended June 30, 2019 and 2018, respectively. The following table summarizes the Company's Goodwill as of June 30, 2019 and December 31, 2018: Total Goodwill Balance at December 31, 2017 $ 664,329 Impairment of goodwill (664,329 ) Goodwill attributable to BiotrackTHC acquisition 39,135,007 Goodwill attributable to Engeni acquisition 778,552 Balance at December 31, 2018 $ 39,913,559 Goodwill attributable to Tan Security acquisition 821,807 Balance at June 30, 2019 $ 40,735,366 During the period ended March 31, 2018, the Company came to a settlement agreement with multiple Security Grade employees resulting from a misrepresentation of revenue and customer list information provided as part of the acquisition. Therefore, the Company considers the settlement to be an indicator for goodwill impairment testing. Accordingly, at March 31, 2018, goodwill was tested for potential impairment. As a result of the goodwill impairment test performed, it was determined that the carrying value for each reporting unit was higher than its fair value and therefore goodwill was fully impaired, which resulted in a write-off of $664,329 for the three months ended March 31, 2018. |
Costs, Estimated Earnings and B
Costs, Estimated Earnings and Billings | 6 Months Ended |
Jun. 30, 2019 | |
Costs in Excess of Billings on Uncompleted Contracts or Programs [Abstract] | |
Costs, Estimated Earnings and Billings | 8. Costs, Estimated Earnings and Billings Costs, estimated earnings and billings on uncompleted contracts are summarized as follows as of June 30, 2019 and December 31, 2018: June 30, December 31, Costs incurred on uncompleted contracts $ 140,289 $ 89,700 Estimated earnings 49,366 50,512 Cost and estimated earnings earned on uncompleted contracts 189,655 140,212 Billings to date 304,500 252,535 Billings in excess of cost (114,845 ) (112,323 ) Costs in excess of billings $ 12,017 $ 42,869 Billings in excess of cost (126,862 ) (155,192 ) $ (114,845 ) $ (112,323 ) |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | 9. Accounts Payable and Accrued Liabilities As of June 30, 2019 and December 31, 2018, accounts payable and accrued liabilities consisted of the following: June 30, December 31, Accounts payable $ 857,610 $ 842,389 Accrued compensation and related expenses 56,332 33,869 Accrued expenses 1,138,368 826,455 Lease obligation - current 410,826 - Total $ 2,463,136 $ 1,702,713 |
Convertible Note Payable
Convertible Note Payable | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Note Payable | 10. Convertible Note Payable June 30, December 31, Note Five, 5% interest, convertible promissory note, fixed secured, maturing November 16, 2019 $ - $ 187,177 Note Ten, 25% interest, convertible promissory note, fixed secured, maturing March 1, 2020, net of debt discount for warrants 423,700 - 423,700 187,177 Less: Current portion (423,700 ) (187,177 ) Long-term portion $ - $ - On February 13, 2017, the Company entered into a $183,333 10% Fixed Secured Convertible Promissory Note ("Note Five") with an investor (the "First Investor"). The First Investor provided the Company with $166,666 in cash, which was received by the Company during the period ended March 31, 2017. The additional $16,666 was retained by the First Investor for due diligence and legal bills for the transaction. The Company evaluated the embedded conversion feature within the above convertible note under ASC 815 and determined the conversion feature did not meet the definition of a derivative and therefore should not be bifurcated. Then the Company evaluated the conversion feature for a beneficial conversion feature at inception. The Company accounted for the intrinsic value of a Beneficial Conversion Feature inherent to the convertible note payable and a total debt discount of $183,333 was recorded. The Company recorded a debt discount relating to the warrants issued in the amount of $22,000 based on the relative fair values of Note Five without the warrants and the warrants themselves at the effective date of Note Five. The additional $16,666 retained by the First Investor for due diligence and legal bills for the transaction will be recorded as a debt discount. The calculated value of the beneficial conversion feature and the combined value of the debt discount resulted in a value greater than the value of the debt and as such, the total discount was limited to the value of the debt balance of $183,333. Therefore, the debt discount related to the beneficial conversion feature was in the amount of $144,666. On November 16, 2017, the Company amended Note Five (the "First Amendment") with the First Investor. The First Amendment has a maturity date that is six months from November 16, 2017, converts at a 40% discount to the lowest one-day Volume Average Weighted Price ("VWAP") during the 30 trading days preceding such conversion, incurs interest at an annual rate of 5%, and is prepayable at any time at 110% of the unpaid principal and accrued interest balance. At November 16, 2017, the principal amount of Note Five was $281,900. On May 16, 2018, the Company amended Note Five ("Second Amendment") with the First Investor. The Second Amendment states that Note Five shall have a maturity of November 16, 2018 and shall be pre-payable at any time at 120% of the unpaid principal and accrued interest balance. The principal amount as of the date of the Second Amendment was $112,305. In November 2018, the Company amended Note Five ("Third Amendment") with a second investor. The Third Amendment states that Note Five shall have a maturity of November 16, 2019. The principal amount as of the date of the Third Amendment was $115,136. During March 2019, the remaining principal of $112,305 was converted into 155,421 shares of common stock. The interest expense associated with Note Five was $0 and $5,839 for the three months ended June 30, 2019 and 2018, respectively, and $0 and $7,878 for the six months ended June 30, 2019 and 2018, respectively. On March 1, 2019, the Company entered into a $450,000 Secured Convertible Promissory Note ("Note Ten") with a third investor. The third investor provided the Company with $450,000 in cash proceeds, which was received by the Company during the period ended June 30, 2019. Note Ten will mature on March 1, 2020 and bear interest at a rate of 25% per annum, payable by the Company half in cash and half in kind on a quarterly basis. The principal balance of Note Ten is convertible at the election of the third investor, in whole or in part, at any time or from time to time, into the Company's common stock at the lower of $0.90 per share or a 30% discount to the Company's 30-day weighted average listed price per share immediately before the date of conversion. In conjunction with Note Ten, the Company issued a warrant to the third investor to purchase 160,715 shares of the Company's common stock at $1.40 per share. The Company evaluated Note Ten in accordance with ASC 480, Distinguishing Liabilities from Equity In addition, the company recorded a debt discount relating to the warrants issued in the amount of $355,847 based on the residual fair value of the warrants themselves at inception of Note Ten. Debt discounts amortized to interest expense were $88,718 and $117,966 for the three and six months ended June 30, 2019, respectively. The unamortized discount balance at June 30, 2019 was $237,881. On May 31, 2019, the Company issued 15,625 restricted shares of common stock as PIK interest repayments in the amount of $14,062. Accrued interest expense associated with Note Ten was $9,247 as of June 30, 2019, which includes PIK interest payable. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions Advances from Related Parties The Company had a loan outstanding from a former Company executive. The loan balance was $0 and $45,250 as of June 30, 2019 and December 31, 2018, respectively. Convertible Note Payable On March 11, 2016, the Company entered into an Unsecured Convertible Promissory Note ("Note Eight") with Paul Hodges, a Director of the Company (the "Related Party Holder"). The Related Party Holder provided the Company with $150,000 in cash, and the Company promised to pay the principal amount, together with interest at an annual rate of 7%, with principal and accrued interest on Note Eight due and payable on December 31, 2017 (unless converted under terms and provisions as set forth below). The principal balance of Note Eight was convertible at the election of the Related Party Holder, in whole or in part, at any time or from time to time, into the Company's common stock at a forty percent (40%) discount to the average market closing price for the previous five (5) trading days, preceding the date of conversion election. The Company evaluated Note Eight in accordance with ASC 480, Distinguishing Liabilities from Equity On February 20, 2018, the Company entered into an agreement to amend Note Eight (the "Amendment") with the Related Party Holder. The Company and Holder desired to extend the maturity date of Note Eight to August 20, 2018 (the "Maturity Date"). Note Eight was amended as follows. The Company promises to pay (i) all accrued interest on the unpaid principal amount through December 31, 2017 and (ii) $25,000 in principal within 5 business days of the date of the Amendment. The Company agrees to issue 15,000 shares of restricted Company common stock as an inducement for the Amendment within 10 business days of the date of the Amendment. The principal amount of Note Eight will be reduced to $125,000. Unless extended by the Company, converted or prepaid earlier, all unpaid principal and unpaid accrued interest on Note Eight shall be due and payable on the Maturity Date. All provisions related to conversion of Note Eight into equity securities of the Company were terminated as part of the Amendment. As of February 20, 2018, the fair value of the liability was $239,343, however due to termination of the conversion of the note into equity securities, Note Eight will be valued in its principal amount of $125,000 and accordingly the Company recorded a credit regarding the change in fair value of $0 for the three months ended June 30, 2019 and 2018, respectively, and $0 and $118,506 for the six months ended June 30, 2019 and 2018, respectively. The interest expense associated with Note Eight was $0 for the three months ended June 30, 2019 and 2018, respectively, and $0 and $2,402 for the six months ended June 30, 2019 and 2018, respectively. Note Eight was paid in full on the Maturity Date. On March 1, 2019, the Company entered into a $1,500,000 Secured Convertible Promissory Note ("Note Nine") with a related party entity (the Second Related Party Holder"). A Managing Member of the Second Related Party Holder is also a Director of the Company. The Second Related Party Holder provided the Company with $1,475,000 in cash proceeds, which was received by the Company during the period ended June 30, 2019. The additional $25,000 was retained by the fourth investor for legal bills for the transaction. Note Nine will mature on March 1, 2020 and bear interest at a rate of 25% per annum, payable by the Company half in cash and half in kind on a quarterly basis. The principal balance of Note Nine is convertible at the election of the fourth investor, in whole or in part, at any time or from time to time, into the Company's common stock at the lower of $0.90 per share or a 30% discount to the Company's 30-day weighted average listed price per share immediately before the date of conversion. In conjunction with Note Nine, the Company issued a warrant to the fourth investor to purchase 535,715 shares of the Company's common stock at $1.40 per share. The Company evaluated Note Nine in accordance with ASC 480, Distinguishing Liabilities from Equity In addition, the company recorded a debt discount relating to the warrants issued in the amount of $1,186,153 based on the residual fair value of the warrants at inception of Note Nine. The additional $25,000 retained by the fourth investor for legal bills for the transaction will be recorded as a debt discount. Debt discounts amortized to interest expense were $301,959 and $401,506 for the three and six months ended June 30, 2019, respectively. The unamortized discount balance at June 30, 2019 was $809,647. On May 31, 2019, the Company issued 52,083 restricted shares of common stock as PIK interest repayments in the amount of $46,875. Accrued interest expense associated with Note Nine was $30,822 as of June 30, 2019, which includes PIK interest payable. As of June 30, 2019, the balance of Note Nine, net of debt discount for warrants and legal bills was $1,395,623. Warrants In March 2016, the Company issued 960,000 shares of restricted common stock to the Related Party Holder per a subscription agreement for total proceeds of $150,000. In conjunction with the subscription agreement, the Company issued a warrant to the Related Party Holder to purchase 1,920,000 restricted shares of the Company's common stock at $0.16 per share. The Warrant Exercise Date is the later of the following to occur (i) March 9, 2017, (ii) ten (10) days after the Company's notice to the holder of the warrant that the Company shall have an effective S-1 registration with the SEC; or (iii) ten (10) days after Company's notice to the holder of the warrants that the Company has entered into an agreement for the sale of substantially all the assets or Common Stock of the Company. As of June 30, 2019, the warrants granted are not exercisable. On March 1, 2019, in connection with the issuance of Note Nine, the Company issued warrants, of which the value was derived and based off the fair value of Note Nine, to the investor to purchase 535,715 shares of the Company's common stock at $1.40 per share. Exercise of the purchase rights represented by the warrant may be made, in whole or in part, at any time or times on or after March 1, 2019 and on or before March 1, 2024, by delivery to the Company of the Notice of Exercise. The Company determined that the warrants associated with Note Nine are puttable for cash upon a fundamental transaction at the option of the holder and as such required classification as a liability pursuant to ASC 480, Distinguishing Liabilities from Equity Promissory Note On January 3, 2019, the Company entered into an unsecured promissory note in the amount of $280,000. The unsecured promissory note has a fixed interest rate of 10% and is due and payable on March 31, 2019. On March 2, 2019, the unsecured promissory note was paid off in full. |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | 12. Notes Payable Notes payable consisted of the following: June 30, December 31, Vehicle financing loans payable, between 4.7% and 7.0% interest and maturing between June 2022 and July 2022 $ 58,910 $ 71,284 Loans Payable - Credit Union 6,127 5,075 Less: Current portion of loans payable (24,805 ) (24,805 ) Long-term portion of loans payable $ 40,232 $ 51,554 The interest expense associated with the notes payable was $890 and $720 for the three months ended June 30, 2019 and 2018, respectively, and $2,681 and $1,420 for the six months ended June 30, 2019 and 2018, respectively. |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | 13. Shareholders' Equity Common Stock Subscription Agreements The table below reflects shares of restricted common stock issued in relation to subscription agreements during the period ended June 30, 2018: Date of Sale Number Total February 2018 222,222 $ 200,000 March 2018 500,000 450,000 April 2018 500,000 450,000 May 2018 244,444 219,999 1,466,666 $ 1,319,999 Other Common Stock Issuances In June 2018, the Company issued 38,184,985 shares of common stock as part of the BioTrackTHC acquisition. On June 7, 2018, two selling shareholders of Security Grade exercised their right to purchase 212,633 shares of the Company's common stock. In January 2019, the Company issued 20,000 shares of restricted common stock to a consultant per a consulting agreement and recorded shared based compensation expense of $27,400. In March and June 2019, the Company issued 1,255,222 and 166,667 shares of common stock as part of investment unit purchase agreements (see Note 15). In March and June 2019, certain option holders exercised their rights under the BioTrackTHC Stock Plan and were issued 62,847 and 47,084 shares of common stock, respectively, for no cash proceeds. In March and April 2019, certain option holders exercised their rights under the BioTrackTHC Stock Plan and were issued 6,082 and 57,461 shares of common stock for total proceeds of $4,805 and $21,808, respectively. In April 2019, the Company issued 250,000 shares of common stock as part of the Tan Security acquisition. In April 2019, a selling shareholder of Security Grade exercised their right to purchase 15,101 shares of the Company's common stock. In April 2019, the Company issued 733,300 shares of common stock in satisfaction of the Engeni contingent consideration (see Note 5). In May 2019, the Company issued 15,625 and 52,083 restricted shares of common stock as PIK interest repayments in the amount of $14,062 and $46,875, respectively (see Notes 10 and 11). Conversion of Convertible Note to Common Stock On February 15, 2018, March 12, 2018 and March 21, 2018, the holder of a 10% fixed secured convertible promissory note issued by the Company elected its option to partially convert $50,000, $50,000 and $75,000 in principal of the convertible note into 46,066, 63,963, and 95,945 shares of the Company's common stock. On March 7, 2019 and March 28, 2019, the holder of a 10% fixed secured convertible promissory note issued by the Company elected its option to fully convert $75,882 and $42,055 in principal of the convertible note into 100,000 and 55,421 shares of the Company's common stock. 2017 Omnibus Incentive Plan The table below reflects shares issued under the 2017 Omnibus Incentive Plan during the period ended June 30, 2019: Date of Issuance Number Total Share March 2019 250,000 $ 320,000 250,000 $ 320,000 The table below reflects shares issued under the 2017 Omnibus Incentive Plan during the period ended June 30, 2018: Date of Issuance Number Total Share January 2018 42,850 $ 173,014 March 2018 100,000 250,000 May 2018 133,900 223,774 276,750 $ 646,788 Series B convertible preferred stock Series B Preferred Stock Purchase Agreement On May 17, 2017, the Company sold to accredited investors an aggregate of 5,781,426 Series B Preferred Shares for gross proceeds of $1,875,000 and converted a $500,000 Unsecured Convertible Promissory Note into 1,536,658 Series B Preferred Shares. This tranche of Series B Preferred Shares are convertible into 7,318,084 shares of common stock based on the current conversion price, at a purchase price of $0.325 per share. Net proceeds were approximately $1,772,500 after legal and placement agent fees listed below and the satisfaction of the promissory notes discussed in Note 11. In connection with the Series B Preferred Stock Purchase Agreement, the Company is obligated to issue warrants to a third-party for services to purchase 462,195 shares of common stock at $0.325 per share (see Note 18). These warrants have been accounted for as an obligation to issue because as of the balance sheet date the Company did not deliver the warrants though incurred the obligation; accordingly, they were recognized as a liability on the unaudited condensed consolidated balance sheet and cost of issuance of Series B preferred shares on the unaudited condensed consolidated statement of shareholders' equity. The table below reflects the shares issued under the Series B Preferred Purchase Agreement of the initial tranche, Second Series B Purchase Agreement and the various issuances under the Third Series B Purchase Agreement during the year-ended December 31, 2017: Date of Sale Number of Total Initial May 2017 7,318,084 $ 1,875,000 Second July 2017 1,680,000 840,000 Third August 2017 369,756 120,000 September 2017 462,195 150,000 October 2017 462,195 150,000 October 2017 1,042,337 557,500 December 2017 2,449,634 795,000 Ending Balance 13,784,201 $ 4,487,500 In accordance with the Certificate of Incorporation, there were 9,000,000 authorized Series B Preferred Stock at a par value of $ 0.001. In connection with the Series B Preferred Stock Purchase Agreement, on May 12, 2017, the Company filed a Certificate of Designation (the "Certificate of Designations") with the Secretary of State of the State of Delaware to designate the preferences, rights and limitations of the Series B Preferred Shares. On August 23, 2017 the Certificate of Designations was amended and restated to increase the number of shares of Series B Preferred Stock authorized to be 17,000,000. Conversion: Each Series B Preferred Share is convertible at the option of the holder into such number of shares of the Company's common stock equal to the number of Series B Preferred Shares to be converted, multiplied by the Preferred Conversation Rate. The Preferred Conversion Rate shall be the quotient obtained by dividing the Preferred Stock Original Issue Price ($0.3253815) by the Preferred Stock Conversation Price in effect at the time of the conversion (the initial conversion price will be equal to the Preferred Stock Original Issue Price, subject to adjustment in the event of stock splits, stock dividends, and fundamental transactions). Based on the current conversion price, the Series B Preferred Shares are convertible into 13,784,201 shares of common stock. A fundamental transaction means: (i) our merger or consolidation with or into another entity, (ii) any sale of all or substantially all of our assets in one transaction or a series of related transactions, (iii) any reclassification of our Common Stock or any compulsory share exchange by which Common Stock is effectively converted into or exchanged for other securities, cash or property; or (iv) sale of shares below the preferred stock conversion price. Each Series B Preferred Share will automatically convert into common stock upon the earlier of (i) notice by the Company to the holders that the Company has elected to convert all outstanding Series B Preferred Shares at any time on or after May 12, 2018; or (ii) immediately prior to the closing of a firmly underwritten initial public offering (involving the listing of the Company's Common Stock on an Approved Stock Exchange) pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of the Common Stock for the account of the Company in which the net cash proceeds to the Company (before underwriting discounts, commissions and fees) are at least fifty million dollars ($50,000,000). Beneficial Conversion Feature – Series B Preferred Stock (deemed dividend): Each share of Series B Preferred Stock is convertible into shares of common stock, at any time at the option of the holder at any time on or after May 12, 2018. On May 17, 2017, the date of issuances of the Series B, the publicly traded common stock price was $3.98. Based on the guidance in ASC 470-20-20, the Company determined that a beneficial conversion feature exists, as the effective conversion price for the Series B preferred shares at issuance was less than the fair value of the common stock into which the preferred shares are convertible. A beneficial conversion feature based on the intrinsic value at the date of issuances for the Series B preferred shares is scheduled below. For the three and six months ended June 30, 2018, the beneficial conversion amount of $14,998,505 and $22,202,194, respectively was accreted back to the preferred stock as a deemed dividend and charged to additional paid in capital in the absence of earning as the beneficial conversion feature is amortized over time through the earliest conversion date, May 12, 2018. Provided below is a schedule of the issuances of Series B preferred shares and the amount accredited to deemed dividend at June 30, 2018. As of June 30, 2019 and 2018, the beneficial conversion feature was fully amortized. For the Six Months Ended June 30, 2018 Issuance Date Beneficial Number of Fair Amount Amount Unamortized May 17, 2017 12 7,318,084 $ 25,247,098 $ (15,779,436 ) $ (9,467,661 ) $ - July 29, 2017 9.5 1,680,000 6,804,000 (3,674,634 ) (3,129,366 ) - August 29, 2017 8.5 369,756 1,148,263 (556,190 ) (592,073 ) - September 15, 2017 8 462,195 1,435,329 (648,601 ) (786,728 ) - October 11, 2017 7 462,195 1,121,036 (426,309 ) (694,727 ) - October 31, 2017 6.5 1,042,337 1,735,641 (548,570 ) (1,187,071 ) - December 19, 2017 5 2,449,634 6,921,348 (576,780 ) (6,344,568 ) - Total 13,784,201 $ 44,412,715 $ (22,210,520 ) $ (22,202,194 ) $ - Dividends, Voting Rights and Liquidity Value: Pursuant to the Certificate of Designations, the Series B Preferred Shares shall bear no dividends, except that if the Board shall declare a dividend payable upon the then-outstanding shares of the Company's common stock. The Series B Preferred Shares vote together with the common stock and all other classes and series of stock of the Company as a single class on all actions to be taken by the stockholders of the Company including, but not limited to, actions amending the certificate of incorporation of the Company to increase the number of authorized shares of the common stock. Upon any dissolution, liquidation or winding up, whether voluntary or involuntary, holders of Series B Preferred Shares are entitled to (i) first receive distributions out of our assets in an amount per share equal to the Stated Value plus all accrued and unpaid dividends, whether capital or surplus before any distributions shall be made on any shares of common stock and (ii) second, on an as-converted basis alongside the common stock. Classification: These Series B Preferred Shares are classified within permanent equity on the Company's consolidated balance sheet as they do not meet the criteria that would require presentation outside of permanent equity under ASC 480, Distinguishing Liabilities from Equity |
Stock Options
Stock Options | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Options | 14. Stock Options On March 15, 2018 the Company awarded Zachary Venegas two options to purchase a total of 490,000 shares of the Company's common stock at prices ranging from $1.90 to $2.09 per share. These options vested on June 28, 2018 and have expiration dates ranging from March 2023 to March 2028. As part of the Membership Interest Purchase Agreement entered into between the Company and Security Grade, on June 2, 2017 (see Note 5), the Company granted to the selling Members the option to purchase up to 414,854 shares of the Company's common stock at a price of $0.001 per share. Of the 414,854 options granted, 207,427 were vested at closing and equity classified. The vesting of the remaining 207,427 shares were subject to certain milestones being achieved and was initially recognized as contingent consideration, both a component of purchase price. As a result of the milestones being met during the third quarter of 2017, the remaining 207,427 shares have also vested. The options have an expiration date of 36 months from the closing date. The exercise price will be based on the fair market value of the share on the date of grant. On March 6, 2018, the Company filed a lawsuit in the United States Court for the District of Colorado alleging violations in previously disclosed representations and warranties by the plaintiff as part of the Acquisition. Following the appointment of a registered Public Company Accounting Oversight Board ("PCAOB") auditor, certain misrepresentations, primarily surrounding the misclassification of certain revenues as being recurring, were discovered, artificially inflating the price of the membership interest in Security Grade. As a result of certain settlements with the selling shareholder, as of June 30, 2018, 70,151 options previously issued as part of the acquisition were cancelled. Subsequently, as of December 31, 2018, the remaining settlements with the selling shareholders were settled and a total of 79,486 options previously issued as part of the acquisition were cancelled. On February 6, 2019 the Company awarded an executive an option to purchase a total of 100,000 shares of the Company's common stock at an exercise price $1.51 per share. These options vested on May 6, 2019 and have an expiration date of February 6, 2024. On March 19, 2019 the Company awarded the Chief Financial Officer, two options to purchase a total of 300,000 shares of the Company's common stock at prices ranging from $2.35 to $2.59 per share. These options shall vest over a three-year period from March 2020 to March 2022 and have expiration dates ranging from March 2024 to March 2029. On March 19, 2019 the Company awarded the Chief Executive Officer, two options to purchase a total of 500,000 shares of the Company's common stock at prices ranging from $2.35 to $2.59 per share. These options shall vest over a three-year period from March 2020 to March 2022 and have expiration dates ranging from March 2024 to March 2029. On May 2, 2019, the Company awarded an investor an option to purchase a total of 125,000 shares of the Company's common stock at an exercise price of $2.03 per share. 62,500 of the options shall vest immediately and 62,500 of the options shall vest on August 2, 2019 provided the marketing agreement between the Company and grantee has not been terminated. These options shall expire on May 1, 2024. In May and June 2019, the Company awarded five employees, an option to purchase a total of 50,000, 40,000, 50,000, 50,000, and 30,000 shares of the Company's common stock at prices ranging from $1.05 to $2.03 per share. These options shall vest over a period ranging from September 2019 to June 2020 and have expiration dates ranging from May 2024 to June 2024. Stock option activity for the period ended June 30, 2019 is as follows: Shares Weighted Weighted Average Outstanding at January 1, 2019 8,730,956 $ 0.671 2.44 Granted 1,245,000 $ 2.106 7.06 Exercised (188,575 ) $ 0.261 1.08 Forfeited and expired Outstanding at June 30, 2019 9,787,381 $ 0.862 2.98 Vested options at June 30, 2019 9,315,418 $ 0.587 2.01 |
Warrant Liability
Warrant Liability | 6 Months Ended |
Jun. 30, 2019 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrant Liability | 15. Warrant Liability On March 1, 2019, in connection with the issuance of Note Ten, the Company issued warrants, of which the value was derived and based off the fair value of Note Ten, to the investor to purchase 160,715 shares of the Company's common stock at $1.40 per share. Exercise of the purchase rights represented by the warrant may be made, in whole or in part, at any time or times on or after March 1, 2019 and on or before March 1, 2024, by delivery to the Company of the Notice of Exercise. The Company determined that the warrants associated with Note Ten are puttable for cash upon a fundamental transaction at the option of the holder and as such required classification as a liability pursuant to ASC 480, Distinguishing Liabilities from Equity On January 10, 2019, the Company entered into an Investment Unit Purchase Agreement (the "First Investment Agreement") to issue and sell investment units to an investor, in which the investment units consist of one share of the common stock of the Company, and a warrant exercisable for one half share of common stock of the Company at an Exercise Price of $1.25 per share for cash at a price per investment unit of $0.90. On March 5, 2019, the Company sold an aggregate of 1,255,222 units of the Company's securities to an investor at a purchase price of $0.90 per unit for total proceeds of $1,129,700. In connection with the First Investment Agreement, the investor is entitled to purchase from the Company, at the Exercise Price, at any time on or after 90 days from the issuance date, 627,611 shares of the Company's common stock (the "March Warrant Shares"). The Company determined that the warrants are puttable for cash upon a fundamental transaction at the option of the holder and as such required classification as a liability pursuant to ASC 480, Distinguishing Liabilities from Equity The fair value of the March Warrant Shares at issuance on January 10, 2019 is in excess of the proceeds received, the warrant liability is required to be recorded at fair value with the excess of the fair value over the proceeds received recognized as a loss in earnings. The gross proceeds from the 1,255,222 investment units at $0.90 was $1,129,700. The fair value of the March Warrant Shares at issuance was $1,717,506. The amount to be recognized as a loss in earnings is calculated as follows: Proceeds from January investment units $ 1,129,700 Par value of common stock issues $ (1,255 ) Fair value of warrants $ (1,717,506 ) Loss on issuance of warrants (January 10, 2019 issuance) $ (589,061 ) Loss on issuance of warrants (March 11, 2019 issuance) $ (198,148 ) Total loss on issuance of warrants $ (787,209 ) As of June 30, 2019, the fair value of the warrant liability was $538,847 and the Company recorded a change in fair value of the warrant liability of $(1,046,606) and $(1,178,659) for the three and six months ended June 30, 2019, respectively. On March 11, 2019, the Company issued warrants to an investment bank to purchase a total of 100,000 restricted shares of the Company's common stock at a per share purchase price of $0.90. The warrants are exercisable at any time six months after the issuance date within three years of issuance. The Company determined that the warrants are puttable for cash upon a fundamental transaction at the option of the holder and as such required classification as a liability pursuant to ASC 480, Distinguishing Liabilities from Equity On June 14, 2019, the Company entered into another Investment Unit Purchase Agreement (the "Second Investment Agreement") to issue and sell investment units to an investor (the "investor"), in which the investment units consist of one share of the common stock of the Company, and a warrant exercisable for one half share of common stock of the Company at an exercise price of $1.25 per share for cash at a price per investment unit of $0.90. On June 24, 2019, the Company sold an aggregate of 166,667 units of the Company's securities to an investor at a purchase price of $0.90 per unit for total proceeds of $150,000. In connection with the Second Investment Agreement, the investor is entitled to purchase from the Company, at the exercise price, at any time on or after 90 days from the issuance date, 83,333 shares of the Company's common stock (the "June Warrant Shares"). The gross proceeds from the 166,667 investment units at $0.90 was $150,000. The fair value of the June Warrant Shares at issuance was $83,586 while as of June 30, 2019, the fair value of the warrant liability was $73,073. Accordingly, the Company recorded a change in fair value of the warrant liability of $10,513 related to the warrants for the three and six months ended June 30, 2019. A summary of warrant activity is as follows: For the Six Months Ended June 30, 2019 Warrant Weighted Average Exercise Price Balance at January 1, 2019 3,418,184 $ 0.23 Warrants granted 1,507,374 $ 1.23 Balance at June 30, 2019 4,925,558 $ 0.55 The fair value of the Company's warrant liability was calculated using the Black-Scholes model and the following assumptions: As of As of Fair value of company's common stock $ 1.06 $ 0.90 Dividend yield 0 % 0 % Expected volatility 135% - 140% 175.0 % Risk Free interest rate 1.72% - 2.56% 2.49 % Expected life (years) 3.19 1.65 Fair value of financial instruments - warrants $ 2,199,266 $ 896,171 The change in fair value of the financial instruments – warrants is as follows: Amount Balance as of January 1, 2019 $ 896,171 Fair value of warrants issued 3,541,240 Change in fair value of liability to issue warrants (2,238,145 ) Balance as of June 30, 2019 $ 2,199,266 Amount Balance as of April 1, 2019 $ 5,986,781 Fair value of warrants issued 83,586 Change in fair value of liability to issue warrants (3,871,101 ) Balance as of June 30, 2019 $ 2,199,266 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 16. Stock-Based Compensation 2017 Omnibus Incentive Plan The Company's 2017 Omnibus Incentive Plan (the "2017 Plan") was adopted by our Board of Directors and a majority of our voting securities on October 17, 2017. The 2017 Plan permits the granting of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards and dividend equivalent rights to eligible employees, directors and consultants. We grant options to purchase shares of common stock under the 2017 Plan at no less than the fair value of the underlying common stock as of the date of grant. Options granted under the Plan have a maximum term of ten years. Under the Plan, a total of 5,000,000 shares of common stock are reserved for issuance, of which options to purchase 1,735,000 and 490,000 shares of common stock and 764,945 and 514,945 shares of common stock were granted as of June 30, 2019 and December 31, 2018, respectively. Bio-Tech Medical Software, Inc. 2014 Stock Incentive Plan On October 22, 2014, BioTrackTHC approved and adopted the BioTrackTHC Stock Plan. The BioTrackTHC Stock Plan set aside and reserved 600,000 shares of BioTrackTHC's common stock for grant and issuance in accordance with its terms and conditions. Persons eligible to receive awards from the BioTrackTHC Stock Plan include employees (including officers and directors) of BioTrackTHC or its affiliates and consultants who provide significant services to BioTrackTHC or its affiliates (the "Grantees"). The BioTrackTHC Stock Plan permits BioTrackTHC to issue to Grantees qualified and/or non-qualified options to purchase BioTrackTHC's common stock, restricted common stock, performance units, and performance shares. The term of each award under the BioTrackTHC Stock Plan shall be no more than ten years from the date of grant thereof. BioTrackTHC's Board of Directors or a committee designated by the Board of Directors is responsible for administration of the BioTrackTHC Stock Plan and has the sole discretion to determine which Grantees will be granted awards and the terms and conditions of the awards granted. BioTrackTHC Management Awards On September 1, 2015 and November 1, 2015, BioTrackTHC's Board approved individual employee option grants (the "Executive Grants") for three executives (the "Executives"). Pursuant to the Executive Grants, the Executives were each granted stock options to purchase 146,507 shares (totaling 439,521 shares) of BioTrackTHC's common stock (the "Option") at an exercise price equal to approximately $7.67. The options vest as to 25% of the shares subject to the Options, one year after the date of grant and then in equal quarterly installments for the three years thereafter, subject to the Executive's continued employment with BioTrackTHC (see Notes 1 and 5). |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 17 Income Taxes No provision for U.S. federal or state income taxes has been recorded as the Company has incurred net operating losses since inception. Significant components of the Company's net deferred income tax assets for the six months ended June 30, 2019 and 2018 consist of income tax loss carryforwards. These amounts are available for carryforward for use in offsetting taxable income of future years through 2035. Realization of the future tax benefits is dependent on the Company's ability to generate sufficient taxable income within the carry-forward period. Utilization of the net operating loss carry-forwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. Due to the Company's history of operating losses, these deferred tax assets arising from the future tax benefits are currently not likely to be realized and are thus reduced to zero by an offsetting valuation allowance. As a result, there is no provision for income taxes. For the six months ended June 30, 2019 and 2018, the Company has a net operating loss carry forward of approximately $15,098,000 and $8,365,000, respectively. Utilization of these net loss carry forwards is subject to the limitations of Internal Revenue Code Section 382. The Company applied a 100% valuation reserve against the deferred tax benefit as the realization of the benefit is not certain. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 18. Commitments and Contingencies Under Topic 842, operating lease expense is generally recognized evenly on a straight-line basis. The Company has operating leases primarily consisting of facilities with remaining lease terms of one year to five years. The lease term represents the period up to the early termination date unless it is reasonably certain that the Company will not exercise the early termination option. Certain leases include rental payments that are adjusted periodically based on changes in consumer price and other indices. Leases with an initial term of twelve months or less are not recorded on the condensed consolidated balance sheet. For lease agreements entered into or reassessed after the adoption of Topic 842, the Company combines the lease and non-lease components in determining the lease liabilities and ROU assets. Activity related to the Company's leases was as follows: Six Months Ended Operating lease expense $ 297,566 Cash paid for amounts included in the measurement of operating lease liabilities $ 150,696 ROU assets obtained in exchange for operating lease obligations $ 1,499,752 The Company's lease agreements generally do not provide an implicit borrowing rate, therefore an internal incremental borrowing rate is determined based on information available at lease commencement date for purposes of determining the present value of lease payments. The Company used the incremental borrowing rate on December 31, 2018 for all leases that commenced prior to that date. ROU lease assets and lease liabilities for the Company's operating leases were recorded in the condensed consolidated balance sheet as follows: As of Other assets $ 1,293,245 Accounts payable and accrued liabilities $ 410,826 Other long-term liabilities 962,716 Total lease liabilities $ 1,373,542 Weighted average remaining lease term (in years) 3.05 Weighted average discount rate 6.00 % Future lease payments included in the measurement of lease liabilities on the condensed consolidated balance sheet as of June 30, 2019, for the following five fiscal years and thereafter were as follows: As of 2019 - Remaining 238,684 2020 393,413 2021 248,223 2022 195,144 2023 200,944 Thereafter 205,434 Total future minimum lease payments $ 1,481,842 Less imputed interest (108,300 ) Total $ 1,373,542 As of June 30, 2019, the Company had additional operating lease obligations for a lease with a future effective date of approximately $600,000. This operating lease will commence during the first quarter of fiscal 2022 with a lease term of three years. As of December 31, 2018, future minimum lease payments, as defined under the previous lease accounting guidance of ASC Topic 840, under noncancelable operating leases for the following five fiscal years and thereafter were as follows: Operating 2019 $ 473,495 2020 420,291 2021 275,223 2022 198,144 2023 199,144 Thereafter 205,135 Total lease payments $ 1,771,432 |
Segment Results
Segment Results | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Results | 19. Segment Results FASB ASC 280-10-50 requires use of the "management approach" model for segment reporting. The management approach is based on the way a company's management organized segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision–making group, in deciding how to allocate resources and in assessing performance. The Company's chief operating decision–making group is composed of the Chief Executive Officer. The Company operates in three segments, Security and guarding, Systems installation and Software. Asset information by operating segment is not presented below since the chief operating decision maker does not review this information by segment. The reporting segments follow the same accounting policies used in the preparation of the Company's unaudited condensed consolidated financial statements. The following represents selected information for the Company's reportable segments: For the Three Months Ended June 30, For the Six Months Ended June 30, 2019 2018 2019 2018 Security and guarding Revenue $ 1,347,529 $ 1,197,201 $ 2,552,240 $ 2,290,975 Cost of revenue 797,944 1,273,693 1,738,530 2,064,398 Gross margin 549,585 (76,492 ) 813,710 226,577 Total operating expenses 1,903,371 2,455,685 3,637,078 5,152,876 Loss from operations (1,353,786 ) (2,532,177 ) (2,823,368 ) (4,926,299 ) Total other income (expense) 7,265,540 735,239 (979,410 ) 2,656,120 Total net income (loss) $ 5,911,754 $ (1,796,938 ) $ (3,802,778 ) $ (2,270,179 ) Systems installation Revenue $ 174,067 $ 100,699 $ 202,608 $ 135,263 Cost of revenue 337,852 - 499,610 - Gross margin (163,785 ) 100,699 (297,002 ) 135,263 Total operating expenses 154,822 - 187,453 - Loss from operations (318,607 ) 100,699 (484,455 ) 135,263 Total other income 513 - 433 - Total net (loss) income $ (318,094 ) $ 100,699 $ (484,022 ) $ 135,263 Software Revenue $ 2,377,277 $ 576,142 $ 4,515,132 $ 576,142 Cost of revenue 860,903 286,694 1,683,778 286,694 Gross margin 1,516,374 289,448 2,831,354 289,448 Total operating expenses 2,309,704 421,566 4,585,917 421,566 Loss from operations (793,330 ) (132,118 ) (1,754,563 ) (132,118 ) Total other income 11,978 9 11,970 9 Total net loss $ (781,352 ) $ (132,109 ) $ (1,742,593 ) $ (132,109 ) |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 20. Subsequent Events On July 29, 2019, the Company entered into an unsecured promissory note in the amount of $300,000. The unsecured promissory note has a fixed interest rate of 12% per annum and is due and payable upon the maturity date of January 29, 2020. In August 2019, the Company paid $25,000 in cash as part of the original purchase price of Tan Security pursuant to the original terms of the Tan Security Acquisition Agreement. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, which include Helix TCS, LLC (“Helix TCS”), Security Consultants Group, LLC (“Security Consultants”), Boss Security Solutions, Inc. (“Boss Security”), Security Consultants Group Oregon, LLC (“Security Oregon”), Security Grade, BioTrackTHC (since June 1, 2018, Engeni US (since August 3, 2018), and Tan Security (since April 1, 2019). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Changes in estimates and assumptions are reflected in reported results in the period in which they become known. Use of estimates includes the following: 1) allowance for doubtful accounts, 2) estimated useful lives of property, equipment and intangible assets, 3) intangibles impairment, 4) valuation of convertible notes payable and 5) revenue recognition. Actual results could differ from estimates. |
Cash | Cash Cash consists of checking accounts. The Company considers all highly liquid investments purchased with a maturity of three months or less at the time of purchase to be cash equivalents. The Company has no cash equivalents as of June 30, 2019 or December 31, 2018. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company performs ongoing credit evaluations of its customers and adjusts credit limits based upon payment history and the customer's current credit worthiness, as determined by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and economic conditions. Management charges balances off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company determines when receivables are past due, or delinquent based on how recently payments have been received. Outstanding account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing accounts receivable. Allowance for doubtful accounts was $77,046 and $76,156 at June 30, 2019 and December 31, 2018, respectively. |
Long-Lived Assets, Including Definite Lived Intangible Assets | Long-Lived Assets, Including Definite Lived Intangible Assets Long-lived assets, other than goodwill and other indefinite-lived intangibles, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. Definite-lived intangible assets primarily consist of non-compete agreements and customer relationships. For long-lived assets used in operations, impairment losses are only recorded if the asset's carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value. |
Goodwill | Goodwill Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. Helix reviews goodwill for possible impairment annually during the fourth quarter, or whenever events or circumstances indicate that the carrying amount may not be recoverable. The impairment model prescribes a two-step method for determining goodwill impairment. However, an entity is permitted to first assess qualitative factors to determine whether the two-step goodwill impairment test is necessary. The qualitative factors considered by Helix may include, but are not limited to, general economic conditions, Helix's outlook, market performance of Helix's industry and recent and forecasted financial performance. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit's fair value is less than its carrying amount. Otherwise, no further impairment testing is required. In the first step, Helix determines the fair value of its reporting unit using a discounted cash flow analysis. If the net book value of the reporting unit exceeds its fair value, Helix then performs the second step of the impairment test, which requires allocation of the reporting unit's fair value to all of its assets and liabilities using the acquisition method prescribed under authoritative guidance for business combinations with any residual fair value being allocated to goodwill. An impairment charge is recognized when the implied fair value of Helix's goodwill is less than its carrying amount. Assumptions and estimates used in the evaluation of impairment may affect the carrying value of long-lived assets, which could result in impairment charges in future periods. Such assumptions include projections of future cash flows and the current fair value of the asset |
Accounting for Acquisitions | Accounting for Acquisitions In accordance with the guidance for business combinations, the Company determines whether a transaction or other event is a business combination, which requires that the assets acquired, and liabilities assumed constitute a business. Each business combination is then accounted for by applying the acquisition method. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. The Company capitalizes acquisition-related costs and fees associated with asset acquisitions and immediately expenses acquisition-related costs and fees associated with business combinations. The Company accounts for its business combinations under the provisions of Accounting Standards Codification ("ASC") Topic 805-10, Business Combinations ("ASC 805-10"), which requires that the purchase method of accounting be used for all business combinations. Assets acquired and liabilities assumed, including non-controlling interests, are recorded at the date of acquisition at their respective fair values. ASC 805-10 also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date and any changes in fair value after the acquisition date are accounted for as measurement-period adjustments. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn-outs, are recognized as follows: 1) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent settlement is accounted for within equity, or 2) if the contingent consideration is classified as a liability, the changes in fair value are recognized in earnings. |
Revenue Recognition | Revenue Recognition Under Financial Accounting Standards Board ("FASB") Topic 606, Revenue from Contacts with Customers The security services revenue is generated from performing armed and unarmed guarding which is contracted for on an hourly basis. Revenues associated with these contracted services are recognized under time-based arrangements as services are provided. Additionally, the Company provides transportation security services, which are generally contracted for on a per-run basis and sometimes additional fees and surcharges are also billed to the client depending on the length of the run. Revenues associated with these services are recognized as the transportation service is provided. The Company also generates revenue from developing and licensing seed to sale cannabis compliance software to both private-sector and public-sector (government agencies) businesses that are involved in cannabis related operations. The Company also generates revenue from on-going training, support and software customization services. Occasionally, the Company will enter into systems installation arrangements. Installation jobs are estimated based on the cost of equipment to be installed, the number of hours expected to be incurred to complete the job and other ancillary costs. Revenue associated with these services are recognized over the arrangement period. Lastly, the Company generates advertising revenues from consumer advertising on its Cannabase platform. Revenue is recognized over the contract period associated with each specific advertising campaign. |
Segment Information | Segment Information FASB ASC Topic 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company's chief operating decision maker is the Chief Executive Officer, who reviews the financial performance and the results of operations of the segments prepared in accordance with GAAP when making decisions about allocating resources and assessing performance of the Company. Asset information by operating segment is not presented since the chief operating decision maker does not review this information by segment. The reporting segments follow the same accounting policies used in the preparation of the Company's condensed unaudited consolidated financial statements. |
Expenses | Expenses Cost of Revenues The cost of revenues is the total cost incurred to obtain a sale and the cost of the goods or services sold. Cost of revenues primarily consisted of hourly compensation for security personnel and employees involved in the creation and development of licensing software. Operating Expenses Operating expenses encompass selling general and administrative expenses, salaries and wages, professional and legal fees, loss on impairment of Goodwill and depreciation. Selling, general and administrative expenses consist primarily of rent/moving expenses, advertising and travel expenses. Salaries and wages is composed of non-revenue generating employees. Professional services are principally comprised of outside legal, audit, information technology consulting, marketing and outsourcing services as well as the costs related to being a publicly traded company. Other Income (Expense), net Other income (expense), net consisted of change in fair value of convertible note, change in fair value of convertible note – related party, change in fair value of contingent consideration, change in fair value of warrant liability, loss on issuance of warrants, gain on reduction of obligation pursuant to acquisition and interest (expense) income. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost and depreciated on a straight-line basis over their estimated useful lives. Useful lives are 3 years for vehicles and 5 years for furniture and equipment. Maintenance and repairs are expensed as incurred and major improvements are capitalized. When assets are sold, or retired, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in other income. |
Contingencies | Contingencies Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company's consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. |
Advertising | Advertising Advertising costs are expensed as incurred and included in selling, general and administrative expenses and amounted to $178,219 and $34,963 for the three months ended June 30, 2019 and 2018, respectively, and $247,490 and $61,737 for the six months ended June 30, 2019 and 2018, respectively. |
Foreign Currency | Foreign Currency The local currency is the functional currency for one entity's operations outside the United States. Assets and liabilities of these operations are translated to U.S. dollars at the exchange rate in effect at the end of each period. Income statement accounts are translated at the average exchange rate prevailing during the period. Translation adjustments arising from the use of differing exchange rates from period to period are included as a component of other comprehensive income within shareholders' equity. Gains and losses from foreign currency transactions are included in net loss for the period. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of consolidated net income (loss) and foreign currency translation adjustments. Foreign currency translation adjustments included in comprehensive income (loss) were not tax-effected as investments in international affiliates are deemed to be permanent. |
Distinguishing Liabilities from Equity | Distinguishing Liabilities from Equity The Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet ("temporary equity"). The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e. at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity. Initial Measurement The Company records its financial instruments classified as liability, temporary equity or permanent equity at issuance at the fair value, or cash received. Subsequent Measurement – Financial instruments classified as liabilities The Company records the fair value of its financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial instruments classified as liabilities are recorded as other expense/income. |
Beneficial Conversion Feature | Beneficial Conversion Feature If the conversion features of conventional convertible debt provide for a rate of conversion that is below market value, this feature is characterized as a Beneficial Conversion Feature ("BCF"). A beneficial conversion feature is recorded by the Company as a debt discount pursuant to ASC 470-20, Debt with Conversion and Other Options The Company accounts for the beneficial conversion feature on its convertible preferred stock in accordance with ASC 470-20, Debt with Conversion and Other Options To determine the effective conversion price, the Company first allocates the proceeds received to the convertible preferred stock and then uses those allocated proceeds to determine the effective conversion price. If the convertible instrument is issued in a basket transaction (i.e., issued along with other freestanding financial instruments), the proceeds should first be allocated to the various instruments in the basket. Any amounts paid to the investor when the transaction is consummated (e.g., origination fees, due diligence costs) represent a reduction in the proceeds received by the issuer. The intrinsic value of the conversion option should be measured using the effective conversion price for the convertible preferred stock on the proceeds allocated to that instrument. The effective conversion price represents proceeds allocable to the convertible preferred stock divided by the number of shares into which it is convertible. The effective conversion price is then compared to the per share fair value of the underlying shares on the commitment date. The accounting for a BCF requires that the BCF be recognized by allocating the intrinsic value of the conversion option to additional paid-in capital, resulting in a discount on the convertible preferred stock. This discount should be accreted from the date on which the BCF is first recognized through the earliest conversion date for instruments that do not have a stated redemption date. The intrinsic value of the BCF is recognized as a deemed dividend on convertible preferred stock over a period specified in the guidance. |
Share-based Compensation | Share-based Compensation The Company accounts for stock-based compensation to employees in conformity with the provisions of ASC Topic 718, Stock Based Compensation The measurement of stock-based compensation is subject to periodic adjustments as the underlying equity instruments vest and is recognized as an expense over the period which services are received. The Company calculates the fair value of option grants utilizing the Black-Scholes pricing model and estimates the fair value of the stock based upon the estimated fair value of the common stock. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on a straight- line basis over the requisite service period of the award. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurements and Disclosures ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC Topic 820 are described as follows: ● Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date. ● Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3 – Inputs that are unobservable for the asset or liability. Certain assets and liabilities of the Company are required to be recorded at fair value either on a recurring or non-recurring basis. Fair value is determined based on the price that would be received for an asset or paid to transfer a liability in an orderly transaction based on market participants. The following section describes the valuation methodologies that the Company used to measure, for disclosure purposes, its financial instruments at fair value. Convertible notes payable The fair value of the Company's convertible notes payable, approximated the carrying value as of June 30, 2019 and December 31, 2018. Factors that the Company considered when estimating the fair value of its debt included market conditions and the term of the debt. The level of the debt would be considered as Level 2. Additional Disclosures Regarding Fair Value Measurements The carrying value of cash, accounts receivable, prepaid expenses, deposits, accounts payable and accrued liabilities, advances from shareholders and obligation pursuant to acquisition approximate their fair value due to the short-term maturity of those items. |
Earnings (Loss) per Share | Earnings (Loss) per Share The Company follows ASC 260, Earnings Per Share For the three months ended June 30, 2018 and the six months ended June 30, 2019 and 2018, potential common shares includable in the computation of fully-diluted per share results are not presented in the condensed consolidated financial statements as their effect would be anti-dilutive. For the three months ended June 30, 2019, dilutive earnings per share are calculated by dividing net income attributable to common shareholders less the change in fair value of warrant liability, the change in fair value of convertible notes, interest expense on convertible notes, and the debt discount amortized on convertible notes. The calculation of diluted EPS excludes 24,571,582 shares for securities which have been deemed to be anti-dilutive. Earnings per share for the three and six months ended June 30, 2019 and 2018 were calculated as follows: For the Three Months For the Six Months 2019 2018 2019 2018 Numerator Net income attributable to common shareholders $ 4,811,718 $ (9,032,037 ) $ (6,025,736 ) $ (24,469,219 ) Effect of dilutive instruments on net loss (7,024,580 ) - - - Net income (loss) attributable to common shareholders - diluted $ (2,212,862 ) $ (9,032,037 ) $ (6,025,736 ) $ (24,469,219 ) Denominator Weighted average shares of common stock outstanding - basic 75,470,238 42,673,528 74,324,689 35,907,118 Dilutive effect of warrants and convertible securities 5,766,440 - - - Weighted average shares of common stock outstanding - diluted 81,236,678 42,673,528 74,324,689 35,907,118 Net income (loss) per share Basic $ 0.06 $ (0.21 ) $ (0.08 ) $ (0.68 ) Diluted $ (0.03 ) $ (0.21 ) $ (0.08 ) $ (0.68 ) |
Reclassifications | Reclassifications Certain reclassifications have been made to the prior period financial statements to conform to the current period financial statement presentation. These reclassifications had no effect on net earnings or cash flows as previously reported. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-.02, Leases (Topic 842) The Company adopted the new standard on January 1, 2019 and used the modified retrospective approach with the effective date as the date of initial application. Consequently, prior period balances and disclosures have not been restated. The Company elected certain practical expedients, which among other things, allowed us to carry forward prior conclusions about lease identification and classification. Adoption of the standard resulted in the balance sheet recognition of additional lease assets and lease liabilities of approximately $1,500,000. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company currently has elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in separate lease and non-lease components for all our leases. For additional information regarding the Company’s leases, see Note 18 in the notes to condensed consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220); Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (ASC 718): Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (ASC 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on the Company’s consolidated financial statements and related disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of anti-dilutive shares of common stock outstanding | For the Three Months For the Six Months 2019 2018 2019 2018 Numerator Net income attributable to common shareholders $ 4,811,718 $ (9,032,037 ) $ (6,025,736 ) $ (24,469,219 ) Effect of dilutive instruments on net loss (7,024,580 ) - - - Net income (loss) attributable to common shareholders - diluted $ (2,212,862 ) $ (9,032,037 ) $ (6,025,736 ) $ (24,469,219 ) Denominator Weighted average shares of common stock outstanding - basic 75,470,238 42,673,528 74,324,689 35,907,118 Dilutive effect of warrants and convertible securities 5,766,440 - - - Weighted average shares of common stock outstanding - diluted 81,236,678 42,673,528 74,324,689 35,907,118 Net income (loss) per share Basic $ 0.06 $ (0.21 ) $ (0.08 ) $ (0.68 ) Diluted $ (0.03 ) $ (0.21 ) $ (0.08 ) $ (0.68 ) |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue Recognition [Abstract] | |
Schedule of disaggregation of revenue | For the Three Months Ended June 30, For the Six Months Ended June 30, 2019 2018 2019 2018 Types of Revenues: Security and Guarding $ 1,347,529 $ 1,197,201 $ 2,552,240 $ 2,290,975 Systems Installation 174,067 100,699 202,608 135,263 Software 2,377,277 576,142 4,515,132 576,142 Total revenues $ 3,898,873 $ 1,874,042 $ 7,269,980 $ 3,002,380 |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Security Grade Acquisition [Member] | |
Business Acquisition [Line Items] | |
Schedule of allocation of the purchase price | Base Price – Cash $ 2,100,373 Base Price - Stock Options 916,643 Contingent Consideration - Stock Options 916,643 Total Purchase Price $ 3,933,659 |
Schedule of assets acquired and liabilities assumed | Weighted Description Fair Value (in years) Assets acquired: Cash $ 14,137 Accounts receivable 53,792 Costs & earnings in excess of billings 96,898 Property, plant and equipment, net 27,775 Trademarks 25,000 10 Customer lists 3,154,578 5 Web address 5,000 5 Goodwill 664,329 Other assets 3,880 Total assets acquired $ 4,045,389 Liabilities assumed: Billings in excess of costs $ 23,967 Loans payable 18,414 Credit card payable and other liabilities 69,349 Total liabilities assumed 111,730 Estimated fair value of net assets acquired $ 3,933,659 |
BioTrackTHC Acquisition [Member] | |
Business Acquisition [Line Items] | |
Schedule of allocation of the purchase price | Base Price - Common Stock $ 44,905,542 Base Price - Stock Options 12,646,491 Total Purchase Price $ 57,552,033 |
Schedule of assets acquired and liabilities assumed | Weighted Description Fair Value (in years) Assets acquired: Cash $ 448,697 Accounts receivable 128,427 Prepaid expenses 351,615 Property, plant and equipment, net 72,252 Goodwill 39,135,007 Customer list 8,304,449 5 Software 9,321,627 4.5 Tradename 466,081 4.5 Total assets acquired $ 58,228,155 Liabilities assumed: Accounts payable $ 223,581 Other liabilities 452,541 Total liabilities assumed 676,122 Estimated fair value of net assets acquired $ 57,552,033 |
Engeni SA Acquisition [Member] | |
Business Acquisition [Line Items] | |
Schedule of allocation of the purchase price | As Adjusted Base Price - Common Stock $ 388,702 Contingent Consideration - Common Stock 777,298 Contingent Consideration - Cash - Total Purchase Price $ 1,166,000 |
Schedule of assets acquired and liabilities assumed | Weighted Description Fair Value (in years) Assets acquired: Cash $ 5,609 Accounts receivable and other assets 30,479 Property, plant and equipment, net 57,830 Software 449,568 3.3 Goodwill 778,552 Total assets acquired $ 1,322,038 Liabilities assumed: Accounts payable $ 56,038 Total liabilities assumed 56,038 Estimated fair value of net assets acquired $ 1,266,000 |
Tan's International Security [Member] | |
Business Acquisition [Line Items] | |
Schedule of allocation of the purchase price | Base Price – Cash at closing $ 25,000 Base Price – Deferred cash payment (including $25,000 to be made on the 4,8 and 12-month anniversaries of closing) 75,000 Base Price – Common Stock 710,000 Total Purchase Price $ 810,000 |
Schedule of assets acquired and liabilities assumed | Description Fair Value Assets acquired: Cash $ 2,940 Accounts receivable 7,635 Goodwill 821,807 Total assets acquired $ 832,382 Liabilities assumed: Accounts payable $ 12,526 Other liabilities 9,856 Total liabilities assumed 22,382 Estimated fair value of net assets acquired $ 810,000 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | June 30, December 31, Furniture and equipment $ 139,782 $ 264,659 Software equipment 352,505 - Vehicles 201,066 202,700 Total 693,353 467,359 Less: Accumulated depreciation (147,535 ) (117,841 ) Property and equipment, net $ 545,818 $ 349,518 |
Intangible Assets, Net and Go_2
Intangible Assets, Net and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | June 30, Estimated Gross Assets Accumulated Net Book Database 5 $ 93,427 $ - $ (60,119 ) $ 33,308 Trade names and trademarks 5 - 10 591,081 - (149,063 ) 442,018 Web addresses 5 130,000 - (82,511 ) 47,489 Customer list 5 11,459,027 - (3,101,382 ) 8,357,645 Software 4.5 9,771,195 - (2,356,189 ) 7,415,006 Domain Name 5 - 17,383 (143 ) 17,240 $ 22,044,730 $ 17,383 $ (5,749,407 ) $ 16,312,706 December 31, Estimated Gross Assets Accumulated Net Book Database 5 $ 93,427 $ - $ (50,858 ) $ 42,569 Trade names and trademarks 5 - 10 125,000 466,081 (91,554 ) 499,527 Web addresses 5 130,000 - (69,625 ) 60,375 Customer list 5 3,154,578 8,304,449 (1,965,520 ) 9,493,507 Software 4.5 - 9,771,195 (1,263,095 ) 8,508,100 $ 3,503,005 $ 18,541,725 $ (3,440,652 ) $ 18,604,078 (1) On June 1, 2018, the Company acquired various assets of BioTrackTHC (See Note 5) (2) On August 3, 2018, the Company acquired various assets of Engeni (See Note 5) |
Schedule of goodwill | Total Goodwill Balance at December 31, 2017 $ 664,329 Impairment of goodwill (664,329 ) Goodwill attributable to BiotrackTHC acquisition 39,135,007 Goodwill attributable to Engeni acquisition 778,552 Balance at December 31, 2018 $ 39,913,559 Goodwill attributable to Tan Security acquisition 821,807 Balance at June 30, 2019 $ 40,735,366 |
Costs, Estimated Earnings and_2
Costs, Estimated Earnings and Billings (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Costs in Excess of Billings on Uncompleted Contracts or Programs [Abstract] | |
Schedule of costs, estimated earnings and billings on uncompleted contracts | June 30, December 31, Costs incurred on uncompleted contracts $ 140,289 $ 89,700 Estimated earnings 49,366 50,512 Cost and estimated earnings earned on uncompleted contracts 189,655 140,212 Billings to date 304,500 252,535 Billings in excess of cost (114,845 ) (112,323 ) Costs in excess of billings $ 12,017 $ 42,869 Billings in excess of cost (126,862 ) (155,192 ) $ (114,845 ) $ (112,323 ) |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued liabilities | June 30, December 31, Accounts payable $ 857,610 $ 842,389 Accrued compensation and related expenses 56,332 33,869 Accrued expenses 1,138,368 826,455 Lease obligation - current 410,826 - Total $ 2,463,136 $ 1,702,713 |
Convertible Note Payable (Table
Convertible Note Payable (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of convertible note payable | June 30, December 31, Note Five, 5% interest, convertible promissory note, fixed secured, maturing November 16, 2019 $ - $ 187,177 Note Ten, 25% interest, convertible promissory note, fixed secured, maturing March 1, 2020, net of debt discount for warrants 423,700 - 423,700 187,177 Less: Current portion (423,700 ) (187,177 ) Long-term portion $ - $ - |
Notes Payable (Tables)
Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable | June 30, December 31, Vehicle financing loans payable, between 4.7% and 7.0% interest and maturing between June 2022 and July 2022 $ 58,910 $ 71,284 Loans Payable - Credit Union 6,127 5,075 Less: Current portion of loans payable (24,805 ) (24,805 ) Long-term portion of loans payable $ 40,232 $ 51,554 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Schedule of restricted common stock issued in relation to subscription agreement | Date of Sale Number Total February 2018 222,222 $ 200,000 March 2018 500,000 450,000 April 2018 500,000 450,000 May 2018 244,444 219,999 1,466,666 $ 1,319,999 |
Schedule of number of shares issued under 2017 omnibus incentive plan | Date of Issuance Number Total Share March 2019 250,000 $ 320,000 250,000 $ 320,000 Date of Issuance Number Total Share January 2018 42,850 $ 173,014 March 2018 100,000 250,000 May 2018 133,900 223,774 276,750 $ 646,788 |
Schedule of shares issued under series B preferred purchase agreement | Date of Sale Number of Total Initial May 2017 7,318,084 $ 1,875,000 Second July 2017 1,680,000 840,000 Third August 2017 369,756 120,000 September 2017 462,195 150,000 October 2017 462,195 150,000 October 2017 1,042,337 557,500 December 2017 2,449,634 795,000 Ending Balance 13,784,201 $ 4,487,500 |
Schedule of the issuances of Series B preferred shares beneficial conversion feature | For the Six Months Ended June 30, 2018 Issuance Date Beneficial Number of Fair Amount Amount Unamortized May 17, 2017 12 7,318,084 $ 25,247,098 $ (15,779,436 ) $ (9,467,661 ) $ - July 29, 2017 9.5 1,680,000 6,804,000 (3,674,634 ) (3,129,366 ) - August 29, 2017 8.5 369,756 1,148,263 (556,190 ) (592,073 ) - September 15, 2017 8 462,195 1,435,329 (648,601 ) (786,728 ) - October 11, 2017 7 462,195 1,121,036 (426,309 ) (694,727 ) - October 31, 2017 6.5 1,042,337 1,735,641 (548,570 ) (1,187,071 ) - December 19, 2017 5 2,449,634 6,921,348 (576,780 ) (6,344,568 ) - Total 13,784,201 $ 44,412,715 $ (22,210,520 ) $ (22,202,194 ) $ - |
Stock Options (Tables)
Stock Options (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock option activity | Shares Weighted Weighted Average Outstanding at January 1, 2019 8,730,956 $ 0.671 2.44 Granted 1,245,000 $ 2.106 7.06 Exercised (188,575 ) $ 0.261 1.08 Forfeited and expired Outstanding at June 30, 2019 9,787,381 $ 0.862 2.98 Vested options at June 30, 2019 9,315,418 $ 0.587 2.01 |
Warrant Liability (Tables)
Warrant Liability (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of recognized as a loss in earnings | Proceeds from January investment units $ 1,129,700 Par value of common stock issues $ (1,255 ) Fair value of warrants $ (1,717,506 ) Loss on issuance of warrants (January 10, 2019 issuance) $ (589,061 ) Loss on issuance of warrants (March 11, 2019 issuance) $ (198,148 ) Total loss on issuance of warrants $ (787,209 ) |
Schedule of warrant activity | For the Six Months Ended June 30, 2019 Warrant Weighted Average Exercise Price Balance at January 1, 2019 3,418,184 $ 0.23 Warrants granted 1,507,374 $ 1.23 Balance at June 30, 2019 4,925,558 $ 0.55 |
Schedule of fair value of the Company's warrant liability using the Black-Scholes model | As of As of Fair value of company’s common stock $ 1.06 $ 0.90 Dividend yield 0 % 0 % Expected volatility 135% - 140% 175.0 % Risk Free interest rate 1.72% - 2.56% 2.49 % Expected life (years) 3.19 1.65 Fair value of financial instruments - warrants $ 2,199,266 $ 896,171 |
Schedule of fair value of the financial instruments - warrants | Amount Balance as of January 1, 2019 $ 896,171 Fair value of warrants issued 3,541,240 Change in fair value of liability to issue warrants (2,238,145 ) Balance as of June 30, 2019 $ 2,199,266 Amount Balance as of April 1, 2019 $ 5,986,781 Fair value of warrants issued 83,586 Change in fair value of liability to issue warrants (3,871,101 ) Balance as of June 30, 2019 $ 2,199,266 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of activity related to the Company's leases | Six Months Ended Operating lease expense $ 297,566 Cash paid for amounts included in the measurement of operating lease liabilities $ 150,696 ROU assets obtained in exchange for operating lease obligations $ 1,499,752 |
Schedule of ROU lease assets and lease liabilities | As of Other assets $ 1,293,245 Accounts payable and accrued liabilities $ 410,826 Other long-term liabilities 962,716 Total lease liabilities $ 1,373,542 Weighted average remaining lease term (in years) 3.05 Weighted average discount rate 6.00 % |
Schedule of future lease payments included in the measurement of lease liabilities | As of 2019 - Remaining 238,684 2020 393,413 2021 248,223 2022 195,144 2023 200,944 Thereafter 205,434 Total future minimum lease payments $ 1,481,842 Less imputed interest (108,300 ) Total $ 1,373,542 Operating 2019 $ 473,495 2020 420,291 2021 275,223 2022 198,144 2023 199,144 Thereafter 205,135 Total lease payments $ 1,771,432 |
Segment Results (Tables)
Segment Results (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of represents selected information reportable segments | For the Three Months Ended June 30, For the Six Months Ended June 30, 2019 2018 2019 2018 Security and guarding Revenue $ 1,347,529 $ 1,197,201 $ 2,552,240 $ 2,290,975 Cost of revenue 797,944 1,273,693 1,738,530 2,064,398 Gross margin 549,585 (76,492 ) 813,710 226,577 Total operating expenses 1,903,371 2,455,685 3,637,078 5,152,876 Loss from operations (1,353,786 ) (2,532,177 ) (2,823,368 ) (4,926,299 ) Total other income (expense) 7,265,540 735,239 (979,410 ) 2,656,120 Total net income (loss) $ 5,911,754 $ (1,796,938 ) $ (3,802,778 ) $ (2,270,179 ) Systems installation Revenue $ 174,067 $ 100,699 $ 202,608 $ 135,263 Cost of revenue 337,852 - 499,610 - Gross margin (163,785 ) 100,699 (297,002 ) 135,263 Total operating expenses 154,822 - 187,453 - Loss from operations (318,607 ) 100,699 (484,455 ) 135,263 Total other income 513 - 433 - Total net (loss) income $ (318,094 ) $ 100,699 $ (484,022 ) $ 135,263 Software Revenue $ 2,377,277 $ 576,142 $ 4,515,132 $ 576,142 Cost of revenue 860,903 286,694 1,683,778 286,694 Gross margin 1,516,374 289,448 2,831,354 289,448 Total operating expenses 2,309,704 421,566 4,585,917 421,566 Loss from operations (793,330 ) (132,118 ) (1,754,563 ) (132,118 ) Total other income 11,978 9 11,970 9 Total net loss $ (781,352 ) $ (132,109 ) $ (1,742,593 ) $ (132,109 ) |
Description of Business (Detail
Description of Business (Details) | Aug. 03, 2018 | Oct. 01, 2015 | Jun. 30, 2018 | Apr. 02, 2019 |
Description of Business (Textual) | ||||
Exchanged percentage of Helix TCS | 100.00% | |||
Business acquisition, description | Effective October 1, 2015, for accounting purposes, as part of an acquisition amounting to a reorganization dated December 21, 2015, Helix Opportunities LLC exchanged 100% of Helix TCS, LLC and its wholly-owned subsidiaries, Security Consultants Group, LLC and Boss Security Solutions, Inc. to the Company in exchange for 20 million common shares and 1 million convertible preferred shares of the Company. | The Company issued 38,184,985 unregistered shares of its common stock to BioTrackTHC stockholders, of which 1,852,677 shares were held back to satisfy indemnification obligations in the Merger Agreement, if necessary. The Company also assumed the Bio-Tech Medical Software, Inc. 2014 Stock Incentive Plan (“BioTrackTHC Stock Plan”), pursuant to which options exercisable in the amount of 8,132,410 shares of common stock are outstanding. As a result, BioTrackTHC stockholders will own 48% of the Company on a fully diluted basis on the BioTrackTHC Closing Date. | ||
Merger Agreement | In connection with closing the Engeni Merger Agreement, the Company issued 366,700 shares of Company common stock to Engeni US members. Furthermore, the Company subsequently issued Engeni US members 733,300 shares of Company common stock on April 2, 2019. | |||
Tan Acquisition Agreement [Member] | ||||
Description of Business (Textual) | ||||
Exchanged percentage of Helix TCS | 100.00% |
Going Concern Uncertainty, Fi_2
Going Concern Uncertainty, Financial Condition and Management's Plans (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Going Concern Uncertainty, Financial Condition and Management's Plans (Textual) | ||
Working capital deficit | $ 3,715,022 | $ 2,233,652 |
Increase of working capital | 1,481,270 | |
Anticipated new equity captital | $ 5,000,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Numerator | ||||
Net income attributable to common shareholders | $ 4,811,718 | $ (9,032,037) | $ (6,025,736) | $ (24,469,219) |
Effect of dilutive instruments on net loss | (7,024,580) | |||
Net income (loss) attributable to common shareholders - diluted | $ (2,212,862) | $ (9,032,037) | $ (6,025,736) | $ (24,469,219) |
Denominator | ||||
Weighted average shares of common stock outstanding - basic | 75,470,238 | 42,673,528 | 74,324,689 | 35,907,118 |
Dilutive effect of warrants and convertible securities | 5,766,440 | |||
Weighted average shares of common stock outstanding - diluted | 81,236,678 | 42,673,528 | 74,324,689 | 35,907,118 |
Net income (loss) per share | ||||
Basic | $ 0.06 | $ (0.21) | $ (0.08) | $ (0.68) |
Diluted | $ (0.03) | $ (0.21) | $ (0.08) | $ (0.68) |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Summary of Significant Accounting Policies (Textual) | |||||
Allowance for doubtful accounts | $ 77,046 | $ 77,046 | $ 76,156 | ||
Lease agreements, description | Adoption of the standard resulted in the balance sheet recognition of additional lease assets and lease liabilities of approximately $1,500,000. The new standard also provides practical expedients for an entity's ongoing accounting. The Company currently has elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in separate lease and non-lease components for all our leases. | ||||
Advertising expense | $ 178,219 | $ 34,963 | $ 247,490 | $ 61,737 | |
Deemed to be anti-dilutive | 24,571,582 | ||||
Furniture and equipment [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Property and equipment estimated useful lives | 5 years | ||||
Vehicles [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Property and equipment estimated useful lives | 3 years |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Types of Revenues: | ||||
Security and Guarding | $ 1,347,529 | $ 1,197,201 | $ 2,552,240 | $ 2,290,975 |
Systems Installation | 174,067 | 100,699 | 202,608 | 135,263 |
Software | 2,377,277 | 576,142 | 4,515,132 | 576,142 |
Total revenues | $ 3,898,873 | $ 1,874,042 | $ 7,269,980 | $ 3,002,380 |
Revenue Recognition (Details Te
Revenue Recognition (Details Textual) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue Recognition (Textual) | |
System installation invoice, percentage | 60.00% |
Sales team members commissions, description | The Company provides sales team members with commissions at 0-6%. |
Business Combinations (Details)
Business Combinations (Details) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Tan’s International Security [Member] | |
Business Acquisition [Line Items] | |
Base Price - Cash | $ 25,000 |
Base Price - Deferred cash payment (to be made on 4,8,12-month anniversaries of closing) | 75,000 |
Base Price - Common Stock | 710,000 |
Total Purchase Price | 810,000 |
Security Grade Acquisition [Member] | |
Business Acquisition [Line Items] | |
Base Price - Cash | 2,100,373 |
Base Price - Stock Options | 916,643 |
Contingent Consideration - Stock Options | 916,643 |
Total Purchase Price | 3,933,659 |
BioTrackTHC Acquisition [Member] | |
Business Acquisition [Line Items] | |
Base Price - Common Stock | 44,905,542 |
Base Price - Stock Options | 12,646,491 |
Total Purchase Price | 57,552,033 |
Engeni SA Acquisition [Member] | |
Business Acquisition [Line Items] | |
Base Price - Common Stock | 388,702 |
Contingent Consideration - Common Stock | 777,298 |
Contingent Consideration - Cash | |
Total Purchase Price | $ 1,166,000 |
Business Combinations (Details
Business Combinations (Details 1) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Rocky Tan International Security [Member] | |
Assets acquired: | |
Cash | $ 2,940 |
Accounts receivable | 7,635 |
Goodwill | 821,807 |
Total assets acquired | 832,382 |
Liabilities assumed: | |
Accounts payable | 12,526 |
Other liabilities | 9,856 |
Total liabilities assumed | 22,382 |
Estimated fair value of net assets acquired | 810,000 |
Security Grade Acquisition [Member] | |
Assets acquired: | |
Cash | 14,137 |
Accounts receivable | 53,792 |
Costs & earnings in excess of billings | 96,898 |
Property, plant and equipment, net | 27,775 |
Trademarks | 25,000 |
Customer lists | 3,154,578 |
Web address | 5,000 |
Goodwill | 664,329 |
Other assets | 3,880 |
Total assets acquired | 4,045,389 |
Liabilities assumed: | |
Billings in excess of costs | 23,967 |
Loans payable | 18,414 |
Credit card payable and other liabilities | 69,349 |
Total liabilities assumed | 111,730 |
Estimated fair value of net assets acquired | $ 3,933,659 |
Security Grade Acquisition [Member] | Web address [Member] | |
Liabilities assumed: | |
Weighted Average Useful Life (in years) | 5 years |
Security Grade Acquisition [Member] | Trademarks [Member] | |
Liabilities assumed: | |
Weighted Average Useful Life (in years) | 10 years |
Security Grade Acquisition [Member] | Customer lists [Member] | |
Liabilities assumed: | |
Weighted Average Useful Life (in years) | 5 years |
BioTrack Acquisition [Member] | |
Assets acquired: | |
Cash | $ 448,697 |
Accounts receivable | 128,427 |
Prepaid expenses | 351,615 |
Property, plant and equipment, net | 72,252 |
Customer lists | 8,304,449 |
Goodwill | 39,135,007 |
Software | 9,321,627 |
Tradename | 466,081 |
Total assets acquired | 58,228,155 |
Liabilities assumed: | |
Accounts payable | 223,581 |
Other liabilities | 452,541 |
Total liabilities assumed | 676,122 |
Estimated fair value of net assets acquired | $ 57,552,033 |
BioTrack Acquisition [Member] | Customer lists [Member] | |
Liabilities assumed: | |
Weighted Average Useful Life (in years) | 5 years |
BioTrack Acquisition [Member] | Tradename [Member] | |
Liabilities assumed: | |
Weighted Average Useful Life (in years) | 4 years 6 months |
BioTrack Acquisition [Member] | Software [Member] | |
Liabilities assumed: | |
Weighted Average Useful Life (in years) | 4 years 6 months |
Engeni SA Acquisition [Member] | |
Assets acquired: | |
Cash | $ 5,609 |
Accounts receivable and other assets | 30,479 |
Property, plant and equipment, net | 57,830 |
Goodwill | 778,552 |
Software | 449,568 |
Total assets acquired | 1,322,038 |
Liabilities assumed: | |
Accounts payable | 56,038 |
Total liabilities assumed | 56,038 |
Estimated fair value of net assets acquired | $ 1,266,000 |
Weighted Average Useful Life (in years) | 3 years 3 months 19 days |
Business Combinations (Detail_2
Business Combinations (Details Textual) - USD ($) | Aug. 01, 2017 | Oct. 01, 2015 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 02, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Aug. 02, 2019 | Dec. 31, 2018 | Aug. 02, 2018 |
Business Combination (Textual) | ||||||||||||
Business acquisition, description | Effective October 1, 2015, for accounting purposes, as part of an acquisition amounting to a reorganization dated December 21, 2015, Helix Opportunities LLC exchanged 100% of Helix TCS, LLC and its wholly-owned subsidiaries, Security Consultants Group, LLC and Boss Security Solutions, Inc. to the Company in exchange for 20 million common shares and 1 million convertible preferred shares of the Company. | The Company issued 38,184,985 unregistered shares of its common stock to BioTrackTHC stockholders, of which 1,852,677 shares were held back to satisfy indemnification obligations in the Merger Agreement, if necessary. The Company also assumed the Bio-Tech Medical Software, Inc. 2014 Stock Incentive Plan (“BioTrackTHC Stock Plan”), pursuant to which options exercisable in the amount of 8,132,410 shares of common stock are outstanding. As a result, BioTrackTHC stockholders will own 48% of the Company on a fully diluted basis on the BioTrackTHC Closing Date. | ||||||||||
Liability pursuant to agreement | $ 0 | $ 0 | $ 101,667 | |||||||||
Fair value of contingent consideration | $ 916,643 | |||||||||||
Option issued of acquisition | 9,315,418 | 9,315,418 | ||||||||||
Selling, general and administrative | $ 1,170,491 | $ 527,999 | $ 2,107,369 | $ 875,879 | ||||||||
Gain on reduction of obligation pursuant | $ 290,441 | $ 557,054 | ||||||||||
Tan’s International Security [Member] | ||||||||||||
Business Combination (Textual) | ||||||||||||
Business acquisition, description | Pursuant to the Rocky Tan Acquisition Agreement, Helix purchased all membership interests and capital stock and will collectively hold 100% of the interests of Rocky Tan. At closing, the purchase price of $100,000 in cash plus 250,000 shares of the Company's restricted common stock will be paid to Rocky Tan as follows: ? 250,000 shares of Helix Stock at Closing. ? $25,000 at Closing ? $25,000 on the 4-month anniversary of Closing ? $25,000 on the 8-month anniversary of Closing ? $25,000 on the 12-month anniversary of Closing | |||||||||||
Fair value of contingent consideration | $ 777,298 | |||||||||||
Total acquisition costs | ||||||||||||
Common stock shares issued | 733,300 | |||||||||||
Deferred cash payment | $ 25,000 | |||||||||||
Security Grade Protective Services, Ltd [Member] | ||||||||||||
Business Combination (Textual) | ||||||||||||
Business acquisition, description | The Company subsequently issued the 207,427 additional stock options on August 1, 2017 as well as a second cash payment of $800,000 pursuant to the original terms of the Agreement. | The Company entered into a Membership Interest Purchase Agreement (the "Security Grade Acquisition Agreement") in which the Company purchased all issued and outstanding units of Security Grade Protective Services, Ltd. ("Security Grade"), which consisted of 800,000 Class A Units and 200,000 Class B Units. On the Security Grade Closing Date, the Company delivered $800,000 in cash and 207,427 non-qualified stock options (the "Initial Stock Options"). | ||||||||||
Business combination, contractual relationship, description | Provided that, within the first 60 days following the closing, no material customer identified in the Agreement terminates its contractual relationship with the Company and that all contracts with such material customers are in full force and effect without default or cancellation as of the 60th day following the closing, on the 61st day following the closing, the Company shall deliver an additional $800,000 in cash and issue 207,427 additional stock options (the ''Additional Stock Options''). In the event of termination, cancellation or default of any contract with one or more material customer identified in the Agreement within the first 60 days following the closing, the stock options received by the acquiree shall be reduced and/or forfeited to the extent necessary (pro rata based upon their ownership interest in the Company immediately preceding the closing) by a percentage equal to the revenue received by the Company from the terminating customer(s) in the 180 days immediately preceding such termination divided by the revenue received by the Company from all material customers identified in the Agreement in the 180 days immediately preceding such termination. | |||||||||||
Option issued of acquisition | 79,486 | |||||||||||
Engeni Acquisition [Member] | ||||||||||||
Business Combination (Textual) | ||||||||||||
Business acquisition, description | The Company issued 366,700 shares of Company common stock to Engeni US members. Furthermore, the Company may also issue Engeni US members 366,700 and 366,600 shares of Parent common stock upon the achievement of specific objectives. If applicable, the Company will pay Engeni US members the aggregate amount of $100,000, on a pro rata basis, if Engeni SA reaches financial breakeven on or before December 31, 2018, as determined by the Company's Chief Financial Officer and Scott Zienkewicz. | |||||||||||
Change in fair value of contingent consideration | $ 100,000 | |||||||||||
Bio-Tech Medical Software, Inc. [Member] | ||||||||||||
Business Combination (Textual) | ||||||||||||
Business acquisition, description | The Company closed the Merger. In connection with closing the Merger, the Company issued 38,184,985 unregistered shares of Company common stock to BioTrackTHC stockholders, of which 1,852,677 shares were held back to satisfy indemnification obligations in the Merger Agreement, if necessary. The Company also assumed the BioTrackTHC Stock Plan, pursuant to which options exercisable for 8,132,410 shares of Company common stock are outstanding so that the BioTrackTHC stockholders will own 48% of the Company on a fully diluted basis. | |||||||||||
Security Grade Acquisition Agreement [Member] | ||||||||||||
Business Combination (Textual) | ||||||||||||
Option issued of acquisition | 207,427 | |||||||||||
Second cash payment | $ 800,000 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 693,353 | $ 467,359 |
Less: Accumulated depreciation | (147,535) | (117,841) |
Property and equipment, net | 545,818 | 349,518 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 139,782 | 264,659 |
Software equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 352,505 | |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 201,066 | $ 202,700 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Property and Equipment, Net (Textual) | ||||
Depreciation expense | $ 29,509 | $ 32,893 | $ 47,222 | $ 35,893 |
Intangible Assets, Net and Go_3
Intangible Assets, Net and Goodwill (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2018 | |||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | $ 22,044,730 | $ 3,503,005 | ||
Assets Acquired Pursuant to Business Combination | [1],[2] | 17,383 | 18,541,725 | |
Accumulated Amortization | (5,749,407) | (3,440,652) | ||
Net Book Value | $ 16,312,706 | $ 18,604,078 | ||
Database [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (Years) | 5 years | 5 years | ||
Gross Carrying Amount | $ 93,427 | $ 93,427 | ||
Assets Acquired Pursuant to Business Combination | [1],[2] | |||
Accumulated Amortization | (60,119) | (50,858) | ||
Net Book Value | 33,308 | 42,569 | ||
Trade names and trademarks [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 591,081 | 125,000 | ||
Assets Acquired Pursuant to Business Combination | 466,081 | [1],[2] | ||
Accumulated Amortization | (149,063) | (91,554) | ||
Net Book Value | $ 442,018 | $ 499,527 | ||
Trade names and trademarks [Member] | Minimum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (Years) | 5 years | 5 years | ||
Trade names and trademarks [Member] | Maximum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (Years) | 10 years | 10 years | ||
Web addresses [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (Years) | 5 years | 5 years | ||
Gross Carrying Amount | $ 130,000 | $ 130,000 | ||
Assets Acquired Pursuant to Business Combination | [1],[2] | |||
Accumulated Amortization | (82,511) | (69,625) | ||
Net Book Value | $ 47,489 | $ 60,375 | ||
Customer list [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (Years) | 5 years | 5 years | ||
Gross Carrying Amount | $ 11,459,027 | $ 3,154,578 | ||
Assets Acquired Pursuant to Business Combination | [1],[2] | 8,304,449 | ||
Accumulated Amortization | (3,101,382) | (1,388,176) | ||
Net Book Value | $ 8,357,645 | $ 9,493,507 | ||
Software [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (Years) | 4 years 6 months | 4 years 6 months | ||
Gross Carrying Amount | $ 9,771,195 | |||
Assets Acquired Pursuant to Business Combination | [1],[2] | 9,771,195 | ||
Accumulated Amortization | (2,356,189) | (1,263,095) | ||
Net Book Value | $ 7,415,006 | $ 8,508,100 | ||
Domain Name [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Useful Life (Years) | 5 years | |||
Gross Carrying Amount | ||||
Assets Acquired Pursuant to Business Combination | [1],[2] | 17,383 | ||
Accumulated Amortization | (143) | |||
Net Book Value | $ 17,240 | |||
[1] | On August 3, 2018, the Company acquired various assets of Engeni (See Note 5) | |||
[2] | On June 1, 2018, the Company acquired various assets of BioTrackTHC (See Note 5) |
Intangible Assets, Net and Go_4
Intangible Assets, Net and Goodwill (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Balance | $ 39,913,559 | $ 664,329 | $ 664,329 | ||
Impairment of goodwill | $ (664,329) | (664,329) | |||
Goodwill attributable to BiotrackTHC acquisition | 39,135,007 | ||||
Goodwill attributable to Engeni acquisition | 778,552 | ||||
Goodwill attributable to Tan Security acquisition | 821,807 | ||||
Balance | $ 40,735,366 | $ 40,735,366 | $ 39,913,559 |
Intangible Assets, Net and Go_5
Intangible Assets, Net and Goodwill (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Intangible Assets, Net and Goodwill (Textual) | ||||||
Amortization expense related to intangible assets | $ 1,160,827 | $ 476,003 | $ 2,308,755 | $ 645,579 | ||
Goodwill write-off | $ 664,329 | |||||
Goodwill attributable to Biotrack acquisition | $ 39,135,007 | |||||
Goodwill attributable to Engeni acquisition | $ 778,552 |
Costs, Estimated Earnings and_3
Costs, Estimated Earnings and Billings (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Costs in Excess of Billings on Uncompleted Contracts or Programs [Abstract] | ||
Costs incurred on uncompleted contracts | $ 140,289 | $ 89,700 |
Estimated earnings | 49,366 | 50,512 |
Cost and estimated earnings earned on uncompleted contracts | 189,655 | 140,212 |
Billings to date | 304,500 | 252,535 |
Billings in excess of cost | (114,845) | (112,323) |
Costs in excess of billings | 12,017 | 42,869 |
Billings in excess of cost | (126,862) | (155,192) |
Total | $ (114,845) | $ (112,323) |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 857,610 | $ 842,389 |
Accrued expenses | 56,332 | 33,869 |
Accrued interest | 1,138,368 | 826,455 |
Lease obligation - current | 410,826 | |
Total | $ 2,463,136 | $ 1,702,713 |
Convertible Note Payable (Detai
Convertible Note Payable (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Short-term Debt [Line Items] | ||
Convertible note payable | $ 423,700 | $ 187,177 |
Less: Current portion | (423,700) | (187,177) |
Long-term portion | ||
Note Five, 5% convertible promissory note, fixed secured, maturing November 16, 2019 [Member] | ||
Short-term Debt [Line Items] | ||
Convertible note payable | 187,177 | |
Note Ten, 25% convertible promissory note, fixed secured, maturing March 1, 2020, net of debt discount for warrants [Member] | ||
Short-term Debt [Line Items] | ||
Convertible note payable | $ 423,700 |
Convertible Note Payable (Det_2
Convertible Note Payable (Details Textual) - USD ($) | Nov. 21, 2017 | May 31, 2019 | Mar. 31, 2019 | Nov. 30, 2018 | May 16, 2018 | Nov. 16, 2017 | Mar. 31, 2017 | Feb. 13, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | May 17, 2017 |
Convertible Note Payable (Textual) | ||||||||||||||
Interest expense on convertible debt | $ 9,247 | |||||||||||||
Warrants issued amount | $ 355,847 | 355,847 | ||||||||||||
Interest expense | 88,718 | 117,966 | ||||||||||||
Gain to change in fair value | 845,622 | $ 120,630 | (142,341) | $ 697,646 | ||||||||||
Additional paid-in capital | 86,489,136 | 86,489,136 | $ 82,831,014 | |||||||||||
Notes Five, Six, and Seven [Member] | ||||||||||||||
Convertible Note Payable (Textual) | ||||||||||||||
Annual interest rate on debt | 15.00% | |||||||||||||
Notes Five, Six, and Seven [Member] | Investor [Member] | ||||||||||||||
Convertible Note Payable (Textual) | ||||||||||||||
Discount on debt conversion, description | The Company amended Note Five (the "First Amendment") with the First Investor. The First Amendment has a maturity date that is six months from November 16, 2017, converts at a 40% discount to the lowest one-day Volume Average Weighted Price ("VWAP") during the 30 trading days preceding such conversion, incurs interest at an annual rate of 5%, and is prepayable at any time at 110% of the unpaid principal and accrued interest balance. At November 16, 2017, the principal amount of Note Five was $281,900. | |||||||||||||
Secured Convertible Promissory Note Five [Member] | ||||||||||||||
Convertible Note Payable (Textual) | ||||||||||||||
Discount on debt conversion, description | The Company amended Note Five ("Third Amendment") with a second investor. The Third Amendment states that Note Five shall have a maturity of November 16, 2019. The principal amount as of the date of the Third Amendment was $115,136. During March 2019, the remaining principal of $112,305 was converted into 155,421 shares of common stock. The interest expense associated with Note Five was $0 and $5,839 for the three months ended June 30, 2019 and 2018, respectively, and $0 and $7,878 for the six months ended June 30, 2019 and 2018, respectively. | |||||||||||||
Retained amount | $ 16,666 | |||||||||||||
Warrants issued amount | 22,000 | |||||||||||||
Value of debt | 183,333 | |||||||||||||
Beneficial conversion feature | 144,666 | |||||||||||||
Gain to change in fair value | $ 450,216 | |||||||||||||
Secured Convertible Promissory Note Five [Member] | Third Investor [Member] | ||||||||||||||
Convertible Note Payable (Textual) | ||||||||||||||
Unsecured convertible promissory note | 183,333 | |||||||||||||
Retained amount | 16,666 | |||||||||||||
Value of debt | $ 25,000 | 166,666 | ||||||||||||
Beneficial conversion feature | 183,333 | |||||||||||||
Secured Convertible Promissory Note Five [Member] | Fourth investor [Member] | ||||||||||||||
Convertible Note Payable (Textual) | ||||||||||||||
Discount on debt conversion, description | the Company entered into a $450,000 Secured Convertible Promissory Note ("Note Ten") with a third investor. The third investor provided the Company with $450,000 in cash proceeds, which was received by the Company during the period ended June 30, 2019. Note Ten will mature on March 1, 2020 and bear interest at a rate of 25% per annum, payable by the Company half in cash and half in kind on a quarterly basis. The principal balance of Note Ten is convertible at the election of the third investor, in whole or in part, at any time or from time to time, into the Company's common stock at the lower of $0.90 per share or a 30% discount to the Company's 30-day weighted average listed price per share immediately before the date of conversion. In conjunction with Note Ten, the Company issued a warrant to the third investor to purchase 160,715 shares of the Company's common stock at $1.40 per share. | The Second Amendment states that Note Five shall have a maturity of November 16, 2018 and shall be pre-payable at any time at 120% of the unpaid principal and accrued interest balance. The principal amount as of the date of the Second Amendment was $112,305. | ||||||||||||
Value of debt | $ 450,000 | |||||||||||||
Principal amount of notes | $ 112,305 | $ 281,900 | ||||||||||||
Unsecured Convertible Promissory Note Four [Member] | Fourth investor [Member] | ||||||||||||||
Convertible Note Payable (Textual) | ||||||||||||||
Value of debt | $ 166,666 | |||||||||||||
Unsecured Convertible Promissory Note Four [Member] | Fourth investor [Member] | Minimum [Member] | ||||||||||||||
Convertible Note Payable (Textual) | ||||||||||||||
Conversion rate, per share | $ 0.3245385 | |||||||||||||
Secured Convertible Promissory Note Six [Member] | Third Investor [Member] | ||||||||||||||
Convertible Note Payable (Textual) | ||||||||||||||
Secured convertible promissory note | $ 25,000 | |||||||||||||
Note Ten [Member] | ||||||||||||||
Convertible Note Payable (Textual) | ||||||||||||||
Fair value of notes | 661,581 | 661,581 | ||||||||||||
Gain to change in fair value | $ (845,622) | $ 211,581 | ||||||||||||
Restricted shares of common stock | 15,625 | |||||||||||||
Restricted shares of common stock value | $ 14,062 |
Related Party Transactions (Det
Related Party Transactions (Details) | Jan. 03, 2019 | Mar. 11, 2016USD ($)TradingDays | May 31, 2019USD ($)shares | Feb. 20, 2018USD ($)TradingDays | Mar. 31, 2016USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017$ / shares |
Related Party Transactions (Textual) | |||||||||||
Related party loan balance | $ 32,489 | ||||||||||
Promissory note, description | The Company entered into an unsecured promissory note in the amount of $280,000. The unsecured promissory note has a fixed interest rate of 10% and is due and payable on March 31, 2019. On March 2, 2019, the unsecured promissory note was paid off in full. | ||||||||||
Common stock per share | $ / shares | $ 0.55 | $ 0.55 | $ 0.23 | $ 0.23 | |||||||
Warrants to purchase shares | shares | 4,925,558 | 4,925,558 | 3,418,184 | ||||||||
Subscription Agreement [Member] | Warrant [Member] | |||||||||||
Related Party Transactions (Textual) | |||||||||||
Total proceeds | $ 150,000 | ||||||||||
Common stock per share | $ / shares | $ 0.16 | ||||||||||
Warrant, description | The Warrant Exercise Date is the later of the following to occur (i) March 9, 2017, (ii) ten (10) days after the Company's notice to the holder of the warrant that the Company shall have an effective S-1 registration with the SEC; or (iii) ten (10) days after Company's notice to the holder of the warrants that the Company has entered into an agreement for the sale of substantially all the assets or Common Stock of the Company. As of June 30, 2019, the warrants granted are not exercisable. | ||||||||||
Warrants to purchase shares | shares | 1,920,000 | ||||||||||
Note Nine [Member] | |||||||||||
Related Party Transactions (Textual) | |||||||||||
Principal amount | $ 1,500,000 | $ 1,500,000 | |||||||||
Maturity date | Mar. 1, 2020 | ||||||||||
Promissory note, description | The Company entered into a $1,500,000 Secured Convertible Promissory Note ("Note Nine") with a fourth investor. The fourth investor provided the Company with $1,475,000 in cash proceeds, which was received by the Company during the period ended March 31, 2019. The additional $25,000 was retained by the fourth investor for legal bills for the transaction. Note Nine will mature on March 1, 2020 and bear interest at a rate of 25% per annum, payable by the Company half in cash and half in kind on a quarterly basis. The principal balance of Note Nine is convertible at the election of the fourth investor, in whole or in part, at any time or from time to time, into the Company's common stock at the lower of $0.90 per share or a 30% discount to the Company's 30-day weighted average listed price per share immediately before the date of conversion. In conjunction with Note Nine, the Company issued a warrant to the fourth investor to purchase 535,715 shares of the Company's common stock at $1.40 per share. | ||||||||||
Annual rate of interest | 25.00% | 25.00% | |||||||||
Discount on debt conversion, description | The company recorded a debt discount relating to the warrants issued in the amount of $1,186,153 based on the residual fair value of the warrants at inception of Note Nine. The additional $25,000 retained by the fourth investor for legal bills for the transaction will be recorded as a debt discount. Debt discounts amortized to interest expense was $301,959 and $401,506 for the three and six months ended June 30, 2019, respectively. The unamortized discount balance at June 30, 2019 was $809,647. Accrued interest expense associated with Note Nine was $30,822 as of June 30, 2019. | ||||||||||
Change in fair value of convertible note - related party | $ (2,818,739) | $ 705,270 | |||||||||
Total proceeds | $ 1,475,000 | ||||||||||
Common stock per share | $ / shares | $ 1.40 | $ 1.40 | |||||||||
Warrants to purchase shares | shares | 535,715 | 535,715 | |||||||||
Fair value of liability after period end | $ 2,205,270 | $ 2,205,270 | |||||||||
Net of debt discount for warrants and legal bills | 1,395,623 | 1,395,623 | |||||||||
Restricted shares of common stock | shares | 52,083 | ||||||||||
Restricted shares of common stock value | $ 46,875 | ||||||||||
Note Nine [Member] | Warrant [Member] | |||||||||||
Related Party Transactions (Textual) | |||||||||||
Fair value of liability | 471,346 | 471,346 | |||||||||
Change in fair value of convertible note - related party | $ (857,730) | $ (714,807) | |||||||||
Common stock per share | $ / shares | $ 1.40 | $ 1.40 | |||||||||
Warrants to purchase shares | shares | 535,715 | 535,715 | |||||||||
Fair value of liability after period end | $ 1,186,153 | $ 1,186,153 | |||||||||
Note Eight [Member] | |||||||||||
Related Party Transactions (Textual) | |||||||||||
Principal amount | $ 125,000 | ||||||||||
Maturity date | Aug. 20, 2018 | ||||||||||
Promissory note, description | The Company entered into an agreement to amend Note Eight (this "Amendment") with the Related Party Holder. The Company and Holder desired to extend the maturity date of Note Eight to August 20, 2018 (the "Maturity Date"). The Note was amended as follows. The Company promises to pay (i) all accrued interest on the unpaid principal amount through December 31, 2017 and (ii) $25,000 in principal within 5 business days of the date of this Amendment. The Company agrees to issue 15,000 shares of restricted Company common stock as an inducement for this amendment within 10 business days of the date of the Amendment. The principal amount of the note will be reduced to $125,000. Unless extended by the Company, converted or prepaid earlier, all unpaid principal and unpaid accrued interest on Note Eight shall be due and payable on the Maturity Date. All provisions related to conversion of Note Eight into equity securities of the Company were terminated as part of this Amendment. | ||||||||||
Fair value of liability | $ 239,343 | ||||||||||
Change in fair value of convertible note - related party | 0 | $ 0 | 0 | $ 118,506 | |||||||
Trading days related to conversion of debt | TradingDays | 10 | ||||||||||
Interest expense | $ 0 | $ 0 | $ 0 | $ 2,402 | |||||||
Note Eight [Member] | Director [Member] | |||||||||||
Related Party Transactions (Textual) | |||||||||||
Principal amount | $ 150,000 | ||||||||||
Maturity date | Dec. 31, 2017 | ||||||||||
Annual rate of interest | 7.00% | ||||||||||
Discount on debt conversion, description | Forty percent (40%) discount to the average market closing price. | ||||||||||
Trading days related to conversion of debt | TradingDays | 5 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Vehicle financing loans payable, between 4.7% and 7.0% interest and maturing between June 2022 and July 2022 | $ 58,910 | $ 71,284 |
Loans Payable - Credit Union | 6,127 | 5,075 |
Less: Current portion of loans payable | (24,805) | (24,805) |
Long-term portion of loans payable | $ 40,232 | $ 51,554 |
Notes Payable (Details Textual)
Notes Payable (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Notes Payable (Textual) | ||||
Interest expense associated with notes payable | $ 890 | $ 720 | $ 2,681 | $ 1,420 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Omnibus Incentive Plan [Member] | ||
Class of Stock [Line Items] | ||
Number of Shares Issued | 250,000 | |
Total Proceeds | $ 320,000 | |
Subscription Agreements [Member] | ||
Class of Stock [Line Items] | ||
Number of Shares Issued | 722,222 | |
Total Proceeds | $ 650,000 | |
February 2018 [Member] | Subscription Agreements [Member] | ||
Class of Stock [Line Items] | ||
Number of Shares Issued | 222,222 | |
Total Proceeds | $ 200,000 | |
March 2018 [Member] | Omnibus Incentive Plan [Member] | ||
Class of Stock [Line Items] | ||
Number of Shares Issued | 100,000 | |
Total Proceeds | $ 250,000 | |
March 2018 [Member] | Subscription Agreements [Member] | ||
Class of Stock [Line Items] | ||
Number of Shares Issued | 500,000 | |
Total Proceeds | $ 450,000 | |
April 2018 [Member] | Subscription Agreements [Member] | ||
Class of Stock [Line Items] | ||
Number of Shares Issued | 500,000 | |
Total Proceeds | $ 450,000 | |
May 2018 [Member] | Omnibus Incentive Plan [Member] | ||
Class of Stock [Line Items] | ||
Number of Shares Issued | 133,900 | |
Total Proceeds | $ 223,774 | |
May 2018 [Member] | Subscription Agreements [Member] | ||
Class of Stock [Line Items] | ||
Number of Shares Issued | 244,444 | |
Total Proceeds | $ 219,999 | |
March 2019 [Member] | Omnibus Incentive Plan [Member] | ||
Class of Stock [Line Items] | ||
Number of Shares Issued | 250,000 | |
Total Proceeds | $ 320,000 | |
January 2018 [Member] | Omnibus Incentive Plan [Member] | ||
Class of Stock [Line Items] | ||
Number of Shares Issued | 42,850 | |
Total Proceeds | $ 173,014 |
Shareholders' Equity (Details 1
Shareholders' Equity (Details 1) - Series B Preferred Purchase Agreement [Member] | 12 Months Ended |
Dec. 31, 2017USD ($)shares | |
Class of Stock [Line Items] | |
Number of Shares Sold | shares | 13,784,201 |
Total Proceeds | $ | $ 4,487,500 |
Initial Tranche [Member] | May 2017 [Member] | |
Class of Stock [Line Items] | |
Number of Shares Sold | shares | 7,318,084 |
Total Proceeds | $ | $ 1,875,000 |
Second Tranche [Member] | July 2017 [Member] | |
Class of Stock [Line Items] | |
Number of Shares Sold | shares | 1,680,000 |
Total Proceeds | $ | $ 840,000 |
Third Tranche [Member] | August 2017 [Member] | |
Class of Stock [Line Items] | |
Number of Shares Sold | shares | 369,756 |
Total Proceeds | $ | $ 120,000 |
Third Tranche [Member] | September 2017 [Member] | |
Class of Stock [Line Items] | |
Number of Shares Sold | shares | 462,195 |
Total Proceeds | $ | $ 150,000 |
Third Tranche [Member] | October 2017 [Member] | |
Class of Stock [Line Items] | |
Number of Shares Sold | shares | 462,195 |
Total Proceeds | $ | $ 150,000 |
Third Tranche [Member] | October 2017 [Member] | |
Class of Stock [Line Items] | |
Number of Shares Sold | shares | 1,042,337 |
Total Proceeds | $ | $ 557,500 |
Third Tranche [Member] | December 2017 [Member] | |
Class of Stock [Line Items] | |
Number of Shares Sold | shares | 2,449,634 |
Total Proceeds | $ | $ 795,000 |
Shareholders' Equity (Details 2
Shareholders' Equity (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Class of Stock [Line Items] | |||
Fair Value of Beneficial Conversion Feature | $ 7,203,689 | $ 22,202,194 | |
Series B Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Number of shares | 13,784,201 | 13,784,201 | |
Fair Value of Beneficial Conversion Feature | $ 44,412,715 | ||
Amount accreted as a deemed dividend | 22,202,194 | $ (22,210,520) | |
Unamortized Beneficial Conversion Feature | |||
May 17, 2017 [Member] | Series B Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Issuance Date | May 17, 2017 | ||
Beneficial Conversion Feature Term (months) | 12 months | ||
Number of shares | 7,318,084 | 7,318,084 | |
Fair Value of Beneficial Conversion Feature | $ 25,247,098 | ||
Amount accreted as a deemed dividend | (9,467,661) | (15,779,436) | |
Unamortized Beneficial Conversion Feature | |||
July 29, 2017 [Member] | Series B Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Issuance Date | Jul. 29, 2017 | ||
Beneficial Conversion Feature Term (months) | 9 years 6 months | ||
Number of shares | 1,680,000 | 1,680,000 | |
Fair Value of Beneficial Conversion Feature | $ 6,804,000 | ||
Amount accreted as a deemed dividend | (3,129,366) | (3,674,634) | |
Unamortized Beneficial Conversion Feature | |||
August 29, 2017 [Member] | Series B Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Issuance Date | Aug. 29, 2017 | ||
Beneficial Conversion Feature Term (months) | 8 years 6 months | ||
Number of shares | 369,756 | 369,756 | |
Fair Value of Beneficial Conversion Feature | $ 1,148,263 | ||
Amount accreted as a deemed dividend | (592,073) | (592,073) | |
Unamortized Beneficial Conversion Feature | |||
September 15, 2017 [Member] | Series B Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Issuance Date | Sep. 15, 2017 | ||
Beneficial Conversion Feature Term (months) | 8 months | ||
Number of shares | 462,195 | 462,195 | |
Fair Value of Beneficial Conversion Feature | $ 1,435,329 | ||
Amount accreted as a deemed dividend | 786,728 | (648,601) | |
Unamortized Beneficial Conversion Feature | |||
October 11, 2017 [Member] | Series B Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Issuance Date | Oct. 11, 2017 | ||
Beneficial Conversion Feature Term (months) | 7 months | ||
Number of shares | 462,195 | 462,195 | |
Fair Value of Beneficial Conversion Feature | $ 1,121,036 | ||
Amount accreted as a deemed dividend | (694,727) | (426,309) | |
Unamortized Beneficial Conversion Feature | |||
October 31, 2017 [Member] | Series B Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Issuance Date | Oct. 31, 2017 | ||
Beneficial Conversion Feature Term (months) | 6 years 6 months | ||
Number of shares | 1,042,337 | 1,042,337 | |
Fair Value of Beneficial Conversion Feature | $ 1,735,641 | ||
Amount accreted as a deemed dividend | (1,187,071) | (548,570) | |
Unamortized Beneficial Conversion Feature | |||
December 19, 2017 [Member] | Series B Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Issuance Date | Dec. 19, 2017 | ||
Beneficial Conversion Feature Term (months) | 5 months | ||
Number of shares | 2,449,634 | 2,449,634 | |
Fair Value of Beneficial Conversion Feature | $ 6,921,348 | ||
Amount accreted as a deemed dividend | (6,344,568) | $ (576,780) | |
Unamortized Beneficial Conversion Feature |
Shareholders' Equity (Details T
Shareholders' Equity (Details Textual) - USD ($) | Jun. 07, 2018 | Mar. 12, 2018 | May 31, 2019 | May 31, 2019 | Apr. 30, 2019 | Mar. 31, 2019 | Mar. 28, 2019 | Mar. 07, 2019 | Jan. 31, 2019 | Jun. 30, 2018 | Mar. 21, 2018 | Feb. 15, 2018 | Jun. 30, 2019 |
Note Ten [Member] | |||||||||||||
Shareholders' Equity (Textual) | |||||||||||||
Shares of restricted common stock | 15,625 | ||||||||||||
Restricted shares of common stock value | $ 14,062 | ||||||||||||
Note Nine [Member] | |||||||||||||
Shareholders' Equity (Textual) | |||||||||||||
Shares of restricted common stock | 52,083 | ||||||||||||
Restricted shares of common stock value | $ 46,875 | ||||||||||||
Principal amount | $ 1,500,000 | ||||||||||||
Other Common Stock Issuances [Member] | |||||||||||||
Shareholders' Equity (Textual) | |||||||||||||
Common stock, shares issued | 1,255,222 | 166,667 | |||||||||||
Other Common Stock Issuances [Member] | Note Ten [Member] | |||||||||||||
Shareholders' Equity (Textual) | |||||||||||||
Shares of restricted common stock | 15,625 | ||||||||||||
Restricted shares of common stock value | $ 14,062 | ||||||||||||
Other Common Stock Issuances [Member] | Note Nine [Member] | |||||||||||||
Shareholders' Equity (Textual) | |||||||||||||
Shares of restricted common stock | 52,083 | ||||||||||||
Restricted shares of common stock value | $ 46,875 | ||||||||||||
Other Common Stock Issuances [Member] | BioTrackTHC [Member] | |||||||||||||
Shareholders' Equity (Textual) | |||||||||||||
Shares of restricted common stock | 38,184,985 | ||||||||||||
Other Common Stock Issuances [Member] | Investor [Member] | |||||||||||||
Shareholders' Equity (Textual) | |||||||||||||
Shares of restricted common stock | 20,000 | ||||||||||||
Common stock, shares issued | 62,847 | 47,084 | |||||||||||
Shared based compensation expense | $ 27,400 | ||||||||||||
Other Common Stock Issuances [Member] | Engeni Contingent Consideration [Member] | |||||||||||||
Shareholders' Equity (Textual) | |||||||||||||
Common stock, shares issued | 733,300 | ||||||||||||
Other Common Stock Issuances [Member] | Biotrack Acquisition [Member] | |||||||||||||
Shareholders' Equity (Textual) | |||||||||||||
Stock exercised during period, shares | 57,461 | 6,082 | |||||||||||
Proceeds from stock options exercised | $ 21,808 | $ 4,805 | |||||||||||
Other Common Stock Issuances [Member] | Security Grade [Member] | |||||||||||||
Shareholders' Equity (Textual) | |||||||||||||
Stock exercised during period, shares | 212,633 | 15,101 | |||||||||||
Other Common Stock Issuances [Member] | Rocky Tan International Security [Member] | |||||||||||||
Shareholders' Equity (Textual) | |||||||||||||
Stock issued during period, shares, acquisitions | 250,000 | ||||||||||||
Convertible Note to Common Stock [Member] | |||||||||||||
Shareholders' Equity (Textual) | |||||||||||||
Principal amount | $ 50,000 | $ 42,055 | $ 75,882 | $ 75,000 | $ 50,000 | ||||||||
Convertible note into conversion shares common stock | 63,963 | 55,421 | 100,000 | 95,945 | 46,066 | ||||||||
Convertible note, percentage | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% |
Shareholders' Equity (Details_2
Shareholders' Equity (Details Textual 1) - USD ($) | 1 Months Ended | 6 Months Ended |
May 17, 2017 | Jun. 30, 2019 | |
Series B Preferred Shares [Member] | ||
Shareholders' Equity (Textual) | ||
Preferred conversion, description | Based on the current conversion price, the Series B Preferred Shares are convertible into 13,784,201 shares of common stock. A fundamental transaction means: (i) our merger or consolidation with or into another entity, (ii) any sale of all or substantially all of our assets in one transaction or a series of related transactions, (iii) any reclassification of our Common Stock or any compulsory share exchange by which Common Stock is effectively converted into or exchanged for other securities, cash or property; or (iv) sale of shares below the preferred stock conversion price. Each Series B Preferred Share will automatically convert into common stock upon the earlier of (i) notice by the Company to the holders that the Company has elected to convert all outstanding Series B Preferred Shares at any time on or after May 12, 2018; or (ii) immediately prior to the closing of a firmly underwritten initial public offering (involving the listing of the Company's Common Stock on an Approved Stock Exchange) pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of the Common Stock for the account of the Company in which the net cash proceeds to the Company (before underwriting discounts, commissions and fees) are at least fifty million dollars ($50,000,000). | |
Gross proceeds from sold on shares | $ 1,875,000 | |
Unsecured convertible promissory note | $ 500,000 | |
Convertible preferred shares | 1,536,658 | |
Preferred shares are convertible into common stock | 7,318,084 | |
Price, per share | $ 0.325 | |
Net proceeds | $ 1,772,500 | |
Accredited investors an aggregate shares | 5,781,426 | |
Series B Preferred Stock Purchase Agreement [Member] | ||
Shareholders' Equity (Textual) | ||
Price, per share | $ 0.325 | |
Warrants issue | 462,195 |
Shareholders' Equity (Details_3
Shareholders' Equity (Details Textual 2) - Series B Preferred Stock [Member] - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
May 17, 2017 | Jun. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | Aug. 23, 2017 | May 12, 2017 | |
Shareholders' Equity (Textual) | ||||||
Preferred stock, shares authorized | 17,000,000 | 9,000,000 | ||||
Preferred stock, par value | $ 0.001 | |||||
Preferred stock original issue price | $ 0.3253815 | |||||
Net cash proceeds | $ 50,000,000 | |||||
Traded common stock, price | $ 3.98 | |||||
Beneficial conversion feature | $ 14,998,505 | $ 22,202,194 |
Stock Options (Details)
Stock Options (Details) | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Beginning Outstanding, Shares Underlying Options | shares | 8,730,956 |
Granted, Shares Underlying Options | shares | 1,245,000 |
Exercised, Shares Underlying Options | shares | (188,575) |
Forfeited and expired, Shares Underlying Options | shares | |
Ending Outstanding, Shares Underlying Options | shares | 9,787,381 |
Vested options, Shares Underlying Options | shares | 9,315,418 |
Beginning Outstanding, Weighted Average Exercise Price | $ / shares | $ 0.671 |
Granted, Weighted Average Exercise Price | $ / shares | 2.106 |
Exercised, Weighted Average Exercise Price | $ / shares | 0.261 |
Forfeited and expired, Weighted Average Exercise Price | $ / shares | |
Ending Outstanding, Weighted Average Exercise Price | $ / shares | 0.862 |
Vested options, Weighted Average Exercise Price | $ / shares | $ 0.587 |
Outstanding, Weighted Average Remaining Contractual Term (in years) | 2 years 5 months 9 days |
Granted, Weighted Average Remaining Contractual Term (in years) | 7 years 22 days |
Exercised, Weighted Average Remaining Contractual Term (in years) | 1 year 29 days |
Outstanding, Weighted Average Remaining Contractual Term (in years) | 2 years 11 months 23 days |
Vested options, Weighted Average Remaining Contractual Term (in years) | 2 years 4 days |
Stock Options (Details Textual)
Stock Options (Details Textual) - $ / shares | May 02, 2019 | Feb. 06, 2019 | Mar. 15, 2018 | Jun. 02, 2017 | Jun. 30, 2019 | May 31, 2019 | Mar. 19, 2019 | Mar. 19, 2019 | Mar. 19, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
Stock Options (Textual) | |||||||||||
Options to purchase on shares | 100,000 | 490,000 | |||||||||
Common stock at price per share | $ 1.51 | ||||||||||
Options term, description | These options vested on May 6, 2019 and have an expiration date of February 6, 2024. | The Company awarded Zachary Venegas two options to purchase a total of 490,000 shares of the Company’s common stock at prices ranging from $1.90 to $2.09 per share. These options vested on June 28, 2018 and have expiration dates ranging from March 2023 to March 2028 (see Note 2). | These options shall vest over a period ranging from September 2019 to June 2020 and have expiration dates ranging from May 2024 to June 2024. | These options shall vest over a period ranging from September 2019 to June 2020 and have expiration dates ranging from May 2024 to June 2024. | |||||||
Previously issued options cancelled | 79,486 | 70,151 | |||||||||
Investor [Member] | |||||||||||
Stock Options (Textual) | |||||||||||
Options to purchase on shares | 125,000 | ||||||||||
Common stock at price per share | $ 2.03 | ||||||||||
Vesting of remaining shares | 62,500 | ||||||||||
Options term, description | The options shall vest immediately and 62,500 of the options shall vest on August 2, 2019 provided the marketing agreement between the Company and grantee has not been terminated. These options shall expire on May 1, 2024. | ||||||||||
Membership Interest Purchase Agreement [Member] | |||||||||||
Stock Options (Textual) | |||||||||||
Description interest purchase agreement | The Company granted to the selling Members the option to purchase up to 414,854 shares of the Company's common stock at a price of $0.001 per share. Of the 414,854 options granted, 207,427 were vested at closing and equity classified. The vesting of the remaining 207,427 shares were subject to certain milestones being achieved and was initially recognized as contingent consideration, both a component of purchase price. As a result of the milestones being met during the third quarter of 2017, the remaining 207,427 shares have also vested. The options have an expiration date of 36 months from the closing date. The exercise price will be based on the fair market value of the share on the date of grant. | ||||||||||
Chief Financial Officer [Member] | |||||||||||
Stock Options (Textual) | |||||||||||
Options to purchase on shares | 300,000 | ||||||||||
Options term, description | These options shall vest over a three-year period from March 2020 to March 2022 and have expiration dates ranging from March 2024 to March 2029. | ||||||||||
Zachary Venegas [Member] | |||||||||||
Stock Options (Textual) | |||||||||||
Options to purchase on shares | 500,000 | ||||||||||
Options term, description | These options shall vest over a three-year period from March 2020 to March 2022 and have expiration dates ranging from March 2024 to March 2029. | ||||||||||
Employee One [Member] | |||||||||||
Stock Options (Textual) | |||||||||||
Options to purchase on shares | 50,000 | 50,000 | |||||||||
Employee Two [Member] | |||||||||||
Stock Options (Textual) | |||||||||||
Options to purchase on shares | 40,000 | 40,000 | |||||||||
Employee Three [Member] | |||||||||||
Stock Options (Textual) | |||||||||||
Options to purchase on shares | 50,000 | 50,000 | |||||||||
Employee Four [Member] | |||||||||||
Stock Options (Textual) | |||||||||||
Options to purchase on shares | 50,000 | 50,000 | |||||||||
Employee Five [Member] | |||||||||||
Stock Options (Textual) | |||||||||||
Options to purchase on shares | 30,000 | 30,000 | |||||||||
Minimum [Member] | |||||||||||
Stock Options (Textual) | |||||||||||
Common stock at price per share | $ 1.90 | $ 1.05 | $ 1.05 | ||||||||
Minimum [Member] | Chief Financial Officer [Member] | |||||||||||
Stock Options (Textual) | |||||||||||
Common stock at price per share | $ 2.35 | ||||||||||
Minimum [Member] | Zachary Venegas [Member] | |||||||||||
Stock Options (Textual) | |||||||||||
Common stock at price per share | $ 2.35 | ||||||||||
Maximum [Member] | |||||||||||
Stock Options (Textual) | |||||||||||
Common stock at price per share | $ 2.09 | $ 2.03 | $ 2.03 | ||||||||
Maximum [Member] | Chief Financial Officer [Member] | |||||||||||
Stock Options (Textual) | |||||||||||
Common stock at price per share | 2.59 | ||||||||||
Maximum [Member] | Zachary Venegas [Member] | |||||||||||
Stock Options (Textual) | |||||||||||
Common stock at price per share | $ 2.59 |
Warrant Liability (Details)
Warrant Liability (Details) - USD ($) | Jan. 10, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Par value of common stock issues | $ 0.001 | $ 0.001 | $ 0.001 | |||
Total loss on issuance of warrants | $ (787,209) | |||||
Warrant [Member] | ||||||
Proceeds from January investment units | $ 1,129,700 | |||||
Par value of common stock issues | $ (1,255) | |||||
Fair value of warrants | $ (1,717,506) | |||||
Total loss on issuance of warrants | (787,209) | |||||
Warrant [Member] | January 10, 2019 Issuance [Member] | ||||||
Total loss on issuance of warrants | (589,061) | |||||
Warrant [Member] | March 10, 2019 Issuance [Member] | ||||||
Total loss on issuance of warrants | $ (198,148) |
Warrant Liability (Details 1)
Warrant Liability (Details 1) | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Summary of warrant activity | |
Warrant Shares, Balance | shares | 3,418,184 |
Warrant Shares, Warrants granted | shares | 1,507,374 |
Warrant Shares, Balance | shares | 4,925,558 |
Weighted Average Exercise Price, Balance at beginning | $ / shares | $ 0.23 |
Weighted Average Exercise Price, Warrants granted | $ / shares | 1.23 |
Weighted Average Exercise Price, Balance at ending | $ / shares | $ 0.55 |
Warrant Liability (Details 2)
Warrant Liability (Details 2) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Fair value of company's common stock | $ 1.06 | $ 0.90 |
Dividend yield | 0.00% | 0.00% |
Expected volatility | 175.00% | |
Risk free interest rate | 2.49% | |
Expected life (years) | 3 years 2 months 8 days | 1 year 7 months 24 days |
Fair value of financial instruments - warrants | $ 2,199,266 | $ 896,171 |
Maximum [Member] | ||
Expected volatility | 140.00% | |
Risk free interest rate | 2.56% | |
Minimum [Member] | ||
Expected volatility | 135.00% | |
Risk free interest rate | 1.72% |
Warrant Liability (Details 3)
Warrant Liability (Details 3) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | |
Summary of warrants | |||
Beginning Balance | $ 5,986,781 | $ 896,171 | |
Fair value of warrants issued | 83,586 | 3,541,240 | |
Change in fair value of liability to issue warrants | (3,871,101) | (2,238,145) | $ (1,297,840) |
Ending Balance | $ 2,199,266 | $ 2,199,266 |
Warrant Liability (Details Text
Warrant Liability (Details Textual) - USD ($) | Jun. 14, 2019 | Mar. 05, 2019 | Jan. 10, 2019 | Jun. 24, 2019 | Mar. 31, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Warrants (Textual) | ||||||||||
Fair value of the warrant liability | $ 2,199,266 | $ 896,171 | ||||||||
Change in fair value of warrant liability | $ (3,871,101) | (2,238,145) | $ (1,297,840) | |||||||
Second Investment Agreement [Member] | ||||||||||
Warrants (Textual) | ||||||||||
Fair value of the warrant liability | 73,073 | |||||||||
Change in fair value of warrant liability | 10,513 | $ 10,513 | ||||||||
Investment unit purchase agreement, description | The investor is entitled to purchase from the Company, at the exercise price, at any time on or after 90 days from the issuance date, 83,333 shares of the Company’s common stock (the “June Warrant Shares”). | |||||||||
Stock issued | $ 150,000 | |||||||||
Stock issued, shares | 166,667 | |||||||||
Purchase price per share | $ 0.90 | |||||||||
Fair value warrant shares at issuance | $ 83,586 | |||||||||
Investment Unit Purchase Agreement [Member] | ||||||||||
Warrants (Textual) | ||||||||||
Investment unit purchase agreement, description | The Company entered into another Investment Unit Purchase Agreement (the “Second Investment Agreement”) to issue and sell investment units to an investor (the “investor”), in which the investment units consist of one share of the common stock of the Company, and a warrant exercisable for one half share of common stock of the Company at an exercise price of $1.25 per share for cash at a price per investment unit of $0.90 | |||||||||
Warrant [Member] | ||||||||||
Warrants (Textual) | ||||||||||
Warrant exercisable, description | A warrant exercisable for one half share of common stock of the Company at an Exercise Price of $1.25 per share for cash at a price per investment unit of $0.90. | |||||||||
Warrants, description | The Company sold an aggregate of 1,255,222 units of the Company’s securities to an investor at a purchase price of $0.90 per unit for total proceeds of $1,129,700. In connection with the First Investment Agreement, the investor is entitled to purchase from the Company, at the Exercise Price, at any time on or after 90 days from the issuance date, 627,611 shares of the Company’s common stock (the “March Warrant Shares”). | The warrant liability is required to be recorded at fair value with the excess of the fair value over the proceeds received recognized as a loss in earnings. The gross proceeds from the 1,255,222 investment units at $0.90 was $1,129,700. The fair value of the March Warrant Shares at issuance was $1,717,506. | At inception, March 11, 2019, the fair value of the warrant liability was $198,148 while as of June 30, 2019, the fair value of the warrant liability was $82,162. Accordingly, the Company recorded a change in fair value of the warrant liability of $(168,380) and $(115,986) related to the warrants for the three and six months ended June 30, 2019, respectively. | |||||||
Issued warrants to purchase restricted shares | 100,000 | |||||||||
Warrant purchase price | $ 0.90 | |||||||||
Fair value of the warrant liability | $ 198,148 | $ 538,847 | ||||||||
Change in fair value of warrant liability | $ (1,046,606) | $ (1,178,659) | ||||||||
Warrant [Member] | Note Ten [Member] | ||||||||||
Warrants (Textual) | ||||||||||
Warrant issued to purchase shares of common stock | 160,715 | |||||||||
Warrants exercise price | $ 1.40 | |||||||||
Warrants, description | At inception, March 1, 2019, the fair value of the warrant liability was $355,847 while as of June 30, 2019, the fair value of the warrant liability was $141,404. Accordingly, the Company recorded a change in fair value of the warrant liability of $(257,320) and $(214,443) related to Note Ten for the three and six months ended June 30, 2019, respectively. |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - shares | Nov. 01, 2015 | Sep. 01, 2015 | Oct. 17, 2017 | Oct. 22, 2014 | Jun. 30, 2019 | Dec. 31, 2018 |
Defined Benefit Plan Disclosure [Line Items] | ||||||
Granted, weighted average remaining contractual term (in years) | 7 years 22 days | |||||
Stock options granted | 1,245,000 | |||||
Biotrackthc [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Stock option, description | BioTrackTHC’s Board approved individual employee option grants (the “Executive Grants”) for three executives (the “Executives”). Pursuant to the Executive Grants, the Executives were each granted stock options to purchase 146,507 shares (totaling 439,521 shares) of BioTrackTHC’s common stock (the “Option”) at an exercise price equal to approximately $7.67. The options vest as to 25% of the shares subject to the Options, one year after the date of grant and then in equal quarterly installments for the three years thereafter, subject to the Executive’s continued employment with BioTrackTHC | BioTrackTHC’s Board approved individual employee option grants (the “Executive Grants”) for three executives (the “Executives”). Pursuant to the Executive Grants, the Executives were each granted stock options to purchase 146,507 shares (totaling 439,521 shares) of BioTrackTHC’s common stock (the “Option”) at an exercise price equal to approximately $7.67. The options vest as to 25% of the shares subject to the Options, one year after the date of grant and then in equal quarterly installments for the three years thereafter, subject to the Executive’s continued employment with BioTrackTHC | BioTrackTHC approved and adopted the BioTrackTHC Stock Plan. The BioTrackTHC Stock Plan set aside and reserved 600,000 shares of BioTrackTHC's common stock for grant and issuance in accordance with its terms and conditions. | |||
2017 Omnibus Incentive Plan [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Reserved for issuance of common stock | 5,000,000 | |||||
Purchased shares of common stock | 1,735,000 | 490,000 | ||||
Granted, weighted average remaining contractual term (in years) | 10 years | |||||
Stock options granted | 764,945 | 514,945 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Income Taxes (Textual) | ||
Tax carryforward, description | These amounts are available for carryforward for use in offsetting taxable income of future years through 2035. | |
Percentage of valuation reserve deferred tax benefit | 100.00% | |
Net operating loss carry forward | $ 15,098,000 | $ 8,365,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating lease expense | $ 297,566 |
Cash paid for amounts included in the measurement of operating lease liabilities | 150,696 |
ROU assets obtained in exchange for operating lease obligations | $ 1,499,752 |
Commitments and Contingencies_3
Commitments and Contingencies (Details 1) - Operating Lease [Member] | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Other assets | $ 1,293,245 |
Accounts payable and accrued liabilities | 410,826 |
Other long-term liabilities | 962,716 |
Total lease liabilities | $ 1,373,542 |
Weighted average remaining lease term (in years) | 3 years 18 days |
Weighted average discount rate | 6.00% |
Commitments and Contingencies_4
Commitments and Contingencies (Details 2) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Commitments and Contingencies Disclosure [Abstract] | ||
2019 | $ 238,684 | $ 473,495 |
2020 | 393,413 | 420,291 |
2021 | 248,223 | 275,223 |
2022 | 195,144 | 198,144 |
2023 | 200,944 | 199,144 |
Thereafter | 205,434 | 205,135 |
Total future minimum lease payments | 1,481,842 | $ 1,771,432 |
Less imputed interest | (108,300) | |
Total | $ 1,373,542 |
Commitments and Contingencies_5
Commitments and Contingencies (Details Textual) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Commitments and Contingencies (Textual) | |
Lease agreement expires date | Mar. 31, 2022 |
Additional operating lease obligations | $ 600,000 |
Lease term | 3 years |
Segment Results (Details)
Segment Results (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue | $ 3,898,873 | $ 1,874,042 | $ 7,269,980 | $ 3,002,380 |
Cost of revenue | 1,996,699 | 1,560,387 | 3,921,918 | 2,351,092 |
Gross margin | 1,902,174 | 313,655 | 3,348,062 | 651,288 |
Total operating expenses | 4,367,897 | 2,877,251 | 8,410,448 | 5,574,442 |
Total other income (expense) | 7,278,031 | 735,248 | (967,007) | 2,656,129 |
Total net loss | 4,812,308 | (1,828,348) | (6,029,393) | (2,267,025) |
Security and guarding [Member] | ||||
Revenue | 1,347,529 | 1,197,201 | 2,552,240 | 2,290,975 |
Cost of revenue | 797,944 | 1,273,693 | 1,738,530 | 2,064,398 |
Gross margin | 549,585 | (76,492) | 813,710 | 226,577 |
Total operating expenses | 1,903,371 | 2,455,685 | 3,637,078 | 5,152,876 |
Loss from operations | (1,353,786) | (2,532,177) | (2,823,368) | (4,926,299) |
Total other income (expense) | 7,265,540 | 735,239 | (979,410) | 2,656,120 |
Total net loss | 5,911,754 | (1,796,938) | (3,802,778) | (2,270,179) |
Systems installation [Member] | ||||
Revenue | 174,067 | 100,699 | 202,608 | 135,263 |
Cost of revenue | 337,852 | 499,610 | ||
Gross margin | (163,785) | 100,699 | (297,002) | 135,263 |
Total operating expenses | 154,822 | 187,453 | ||
Loss from operations | (318,607) | 100,699 | (484,455) | 135,263 |
Total other income (expense) | 513 | 433 | ||
Total net loss | (318,094) | 100,699 | (484,022) | 135,263 |
Software [Member] | ||||
Revenue | 2,377,277 | 576,142 | 4,515,132 | 576,142 |
Cost of revenue | 860,903 | 286,694 | 1,683,778 | 286,694 |
Gross margin | 1,516,374 | 289,448 | 2,831,354 | 289,448 |
Total operating expenses | 2,309,704 | 421,566 | 4,585,917 | 421,566 |
Loss from operations | (793,330) | (132,118) | (1,754,563) | (132,118) |
Total other income (expense) | 11,978 | 9 | 11,970 | 9 |
Total net loss | $ (781,352) | $ (132,109) | $ (1,742,593) | $ (132,109) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) | 1 Months Ended | |
Jul. 29, 2019 | Aug. 31, 2019 | |
Subsequent Events (Textual) | ||
Original purchase price | $ 25,000 | |
Unsecured Promissory Note [Member] | ||
Subsequent Events (Textual) | ||
Unsecured promissory note | $ 300,000 | |
Fixed interest rate | 12.00% | |
Maturity date | Jan. 29, 2020 |