Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 12, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Helix TCS, Inc. | |
Entity Central Index Key | 0001611277 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-55722 | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | DE | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 93,274,159 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 655,280 | $ 285,761 |
Accounts receivable, net | 1,496,137 | 1,184,923 |
Prepaid expenses and other current assets | 644,763 | 409,800 |
Costs & earnings in excess of billings | 30,468 | 42,869 |
Total current assets | 2,826,648 | 1,923,353 |
Property and equipment, net | 573,792 | 349,518 |
Intangible assets, net | 15,594,869 | 18,604,078 |
Goodwill | 53,716,207 | 39,913,559 |
Deposits and other assets | 1,296,504 | 146,990 |
Promissory note receivable | 75,000 | |
Total assets | 74,083,020 | 60,937,498 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 2,916,998 | 1,702,713 |
Advances from related parties | 45,250 | |
Billings in excess of costs | 126,505 | 155,192 |
Deferred rent | 2,937 | |
Notes payable, current portion | 24,805 | 24,805 |
Obligation pursuant to acquisition | 50,000 | 201,667 |
Convertible notes payable, net of discount | 862,426 | 187,177 |
Convertible notes payable, net of discount - related party | 1,209,458 | |
Due to related party | 32,489 | |
Contingent consideration | 908,604 | |
Warrant liability | 1,010,890 | 896,171 |
Promissory note | 300,000 | |
Total current liabilities | 6,501,082 | 4,157,005 |
Long-term liabilities: | ||
Notes payable, net of current portion | 436,153 | 51,554 |
Other long-term liabilities | 878,929 | |
Total long-term liabilities | 1,315,082 | 51,554 |
Total liabilities | 7,816,164 | 4,208,559 |
Shareholders' equity: | ||
Preferred stock value | ||
Common stock; par value $0.001; 200,000,000 shares authorized; 92,530,013 shares issued and outstanding as of September 30, 2019; 72,660,825 shares issued and outstanding as of December 31, 2018 | 92,531 | 72,660 |
Additional paid-in capital | 99,748,368 | 82,831,014 |
Accumulated other comprehensive (loss) income | (96,355) | 17,991 |
Accumulated deficit | (33,492,472) | (26,207,510) |
Total shareholders' equity | 66,266,856 | 56,728,939 |
Total liabilities and shareholders' equity | 74,083,020 | 60,937,498 |
Preferred Stock (Class A) [Member] | ||
Shareholders' equity: | ||
Preferred stock value | 1,000 | 1,000 |
Total shareholders' equity | 1,000 | 1,000 |
Preferred Stock (Class B) [Member] | ||
Shareholders' equity: | ||
Preferred stock value | 13,784 | 13,784 |
Total shareholders' equity | $ 13,784 | $ 13,784 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 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 | 92,530,013 | 72,660,825 |
Common stock, shares outstanding | 92,530,013 | 72,660,825 |
Preferred Stock (Class A) [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 3,000,000 | 3,000,000 |
Preferred stock, shares issued | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | 1,000,000 | 1,000,000 |
Preferred Stock (Class B) [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 17,000,000 | 17,000,000 |
Preferred stock, shares issued | 13,784,201 | 13,784,201 |
Preferred stock, shares outstanding | 13,784,201 | 13,784,201 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue: | ||||
Total revenues | $ 3,741,284 | $ 3,113,721 | $ 11,011,264 | $ 6,116,101 |
Cost of revenue | 2,224,795 | 1,880,061 | 6,146,713 | 3,892,716 |
Gross margin | 1,516,489 | 1,233,660 | 4,864,551 | 2,223,385 |
Operating expenses: | ||||
Selling, general and administrative | 1,114,419 | 802,724 | 3,221,788 | 1,678,603 |
Salaries and wages | 1,392,522 | 1,888,155 | 3,859,068 | 4,308,994 |
Professional and legal fees | 674,172 | 473,651 | 2,154,728 | 1,362,205 |
Depreciation and amortization | 1,198,752 | 806,611 | 3,554,729 | 1,869,889 |
Loss on impairment of Goodwill | 664,329 | |||
Total operating expenses | 4,379,865 | 3,971,141 | 12,790,313 | 9,884,020 |
Loss from operations | (2,863,376) | (2,737,481) | (7,925,762) | (7,660,635) |
Other income (expenses): | ||||
Change in fair value of convertible note | 430,766 | (17,880) | 288,425 | 679,766 |
Change in fair value of convertible note - related party | 491,442 | (213,828) | 118,506 | |
Change in fair value of warrant liability | 1,224,601 | 136,920 | 3,462,746 | 1,434,760 |
Change in fair value of contingent consideration | (131,994) | (880,050) | (131,994) | |
Loss on issuance of warrants | (787,209) | |||
Gain on reduction of obligation pursuant to acquisition | 50,361 | 607,415 | ||
Interest (expense) income | (539,002) | 21,622 | (1,229,284) | 6,705 |
Other income | 1,607,807 | 59,029 | 640,800 | 2,715,158 |
Net loss | (1,255,569) | (2,678,452) | (7,284,962) | (4,945,477) |
Other comprehensive income: | ||||
Changes in foreign currency translation adjustment | (118,003) | 17,538 | (114,346) | 17,538 |
Total other comprehensive (loss) income | (118,003) | 17,538 | (114,346) | 17,538 |
Total comprehensive loss | (1,373,572) | (2,660,914) | (7,399,308) | (4,927,939) |
Convertible preferred stock beneficial conversion feature accreted as a deemed dividend | (22,202,194) | |||
Net loss attributable to common shareholders | $ (1,373,572) | $ (2,660,914) | $ (7,399,308) | $ (27,130,133) |
Net loss per share attributable to common shareholders: | ||||
Basic | $ (0.02) | $ (0.04) | $ (0.10) | $ (0.57) |
Diluted | $ (0.02) | $ (0.04) | $ (0.10) | $ (0.57) |
Weighted average common shares outstanding: | ||||
Basic | 79,295,278 | 70,420,857 | 76,038,782 | 47,598,820 |
Diluted | 79,295,278 | 70,420,857 | 76,038,782 | 47,598,820 |
Security And Guarding [Member] | ||||
Revenue: | ||||
Total revenues | $ 1,138,934 | $ 1,141,676 | $ 3,691,174 | $ 3,432,651 |
Systems Installation [Member] | ||||
Revenue: | ||||
Total revenues | 245,272 | 318,850 | 447,880 | 454,113 |
Software [Member] | ||||
Revenue: | ||||
Total revenues | $ 2,357,078 | $ 1,653,195 | $ 6,872,210 | $ 2,229,337 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] | Preferred Stock (Class A) [Member] | Preferred Stock (Class B) [Member] | Total |
Balance Beginning at Dec. 31, 2017 | $ 28,771 | $ 18,741,114 | $ (18,241,708) | $ 1,000 | $ 13,784 | $ 542,961 | |
Balance Beginning (in shares) at Dec. 31, 2017 | 28,771,402 | 1,000,000 | 13,784,201 | ||||
Increase Decrease In Stockholders Equity [Roll Forward] | |||||||
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 | $ 2,883 | 2,592,114 | 2,594,997 | ||||
Issuance of common stock per investment unit agreements (in shares) | 2,883,331 | ||||||
Issuance of common stock resulting from convertible note conversion | $ 206 | 174,794 | 175,000 | ||||
Issuance of common stock resulting from convertible note conversion (in shares) | 205,974 | ||||||
Issuance of restricted common stock | $ 158 | 452,821 | 452,979 | ||||
Issuance of restricted common stock (in shares) | 157,850 | ||||||
Reduction in Additional Paid-In Capital due to Security Grade acquisition settlement agreement | (340,039) | (340,039) | |||||
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 (in shares) | 38,184,985 | ||||||
Restricted common stock issued as part of Engeni acquisition | $ 367 | 388,335 | 388,702 | ||||
Restricted common stock issued as part of Engeni acquisition (in shares) | 366,700 | ||||||
Issuance of common stock to employees under Stock Incentive Plan | $ 227 | 308,842 | 309,069 | ||||
Issuance of common stock to employees under Stock Incentive Plan (in shares) | 227,095 | ||||||
Issuance of common stock resulting from inducement of consulting agreement | $ 250 | 336,250 | 336,500 | ||||
Issuance of common stock resulting from inducement of consulting agreement (in shares) | 250,000 | ||||||
Issuance of restricted common stock resulting from an investor relation consulting agreement | $ 100 | 101,900 | 102,000 | ||||
Issuance of restricted common stock resulting from an investor relation consulting agreement (in shares) | 100,000 | ||||||
Issuance of warrants pursuant to consulting agreement | 943,000 | 943,000 | |||||
Issuance of common stock resulting from exercise of stock options | $ 217 | 217 | |||||
Issuance of common stock resulting from exercise of stock options (in shares) | 216,616 | ||||||
Share-based compensation expense | 2,143,548 | ||||||
Foreign currency translation | 17,538 | 17,538 | |||||
Net income | (4,945,477) | (4,945,477) | |||||
Balance Ending at Sep. 30, 2018 | $ 71,364 | 81,212,979 | 17,538 | (23,187,185) | $ 1,000 | $ 13,784 | 58,129,480 |
Balance Ending (in shares) at Sep. 30, 2018 | 71,363,953 | 1,000,000 | 13,784,201 | ||||
Balance Beginning at Dec. 31, 2017 | $ 28,771 | 18,741,114 | (18,241,708) | $ 1,000 | $ 13,784 | 542,961 | |
Balance Beginning (in shares) at Dec. 31, 2017 | 28,771,402 | 1,000,000 | 13,784,201 | ||||
Balance Ending at Dec. 31, 2018 | $ 72,660 | 82,831,014 | 17,991 | (26,207,510) | $ 1,000 | $ 13,784 | 56,728,939 |
Balance Ending (in shares) at Dec. 31, 2018 | 72,660,825 | 1,000,000 | 13,784,201 | ||||
Balance Beginning at Jun. 30, 2018 | $ 69,134 | 79,066,909 | (20,508,733) | $ 1,000 | 58,642,094 | ||
Balance Beginning (in shares) at Jun. 30, 2018 | 69,133,410 | 1,000,000 | |||||
Increase Decrease In Stockholders Equity [Roll Forward] | |||||||
Beneficial conversion feature of Series B convertible preferred stock | |||||||
Deemed dividend on conversion of Series B convertible preferred stock to common stock | |||||||
Issuance of common stock per investment unit agreements | $ 1,416 | 1,273,582 | 1,274,998 | ||||
Issuance of common stock per investment unit agreements (in shares) | 1,416,665 | ||||||
Reduction in Additional Paid-In Capital due to Security Grade acquisition settlement agreement | (39,199) | (39,199) | |||||
Restricted common stock issued as part of Engeni acquisition | $ 367 | 388,335 | 388,702 | ||||
Restricted common stock issued as part of Engeni acquisition (in shares) | 366,700 | ||||||
Issuance of common stock resulting from exercise of stock options | $ 4 | 4 | |||||
Issuance of common stock resulting from exercise of stock options (in shares) | 3,983 | ||||||
Share-based compensation expense | $ 443 | 523,352 | 523,795 | ||||
Share-based compensation expense (in shares) | 443,195 | ||||||
Foreign currency translation | 17,538 | 17,538 | |||||
Net income | (2,678,452) | (2,678,452) | |||||
Balance Ending at Sep. 30, 2018 | $ 71,364 | 81,212,979 | 17,538 | (23,187,185) | $ 1,000 | $ 13,784 | 58,129,480 |
Balance Ending (in shares) at Sep. 30, 2018 | 71,363,953 | 1,000,000 | 13,784,201 | ||||
Balance Beginning at Dec. 31, 2018 | $ 72,660 | 82,831,014 | 17,991 | (26,207,510) | $ 1,000 | $ 13,784 | 56,728,939 |
Balance Beginning (in shares) at Dec. 31, 2018 | 72,660,825 | 1,000,000 | 13,784,201 | ||||
Increase Decrease In Stockholders Equity [Roll Forward] | |||||||
Issuance of common stock per investment unit agreements | $ 1,422 | 66,247 | 67,669 | ||||
Issuance of common stock per investment unit agreements (in shares) | 1,421,889 | ||||||
Issuance of common stock resulting from convertible note conversion | $ 156 | 117,781 | 117,937 | ||||
Issuance of common stock resulting from convertible note conversion (in shares) | 155,421 | ||||||
Issuance of common stock resulting from cashless exercise of stock options | $ 110 | (110) | |||||
Issuance of common stock resulting from cashless exercise of stock options (in shares) | 109,931 | ||||||
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(in shares) | 733,300 | ||||||
Issuance of common stock resulting from convertible note PIK interest (paid) | $ 85 | 74,915 | 75,000 | ||||
Issuance of common stock resulting from convertible note PIK interest (paid) (in shares) | 84,276 | ||||||
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 (in shares) | 250,000 | ||||||
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 (in shares) | 78,644 | ||||||
Restricted common stock issued as part of the Green Tree acquisition | $ 16,766 | 12,892,845 | 12,909,611 | ||||
Restricted common stock issued as part of the Green Tree acquisition (in shares) | 16,765,727 | ||||||
Share-based compensation expense | $ 270 | 1,241,471 | 1,241,741 | ||||
Share-based compensation expense (in shares) | 270,000 | ||||||
Foreign currency translation | (114,346) | (114,346) | |||||
Net income | (7,284,962) | (7,284,962) | |||||
Balance Ending at Sep. 30, 2019 | $ 92,531 | 99,748,368 | (96,355) | (33,492,472) | $ 1,000 | $ 13,784 | 66,266,856 |
Balance Ending (in shares) at Sep. 30, 2019 | 92,530,013 | 1,000,000 | 13,784,201 | ||||
Balance Beginning at Jun. 30, 2019 | $ 75,748 | 86,489,136 | 21,648 | (32,236,903) | $ 1,000 | $ 13,784 | 54,364,413 |
Balance Beginning (in shares) at Jun. 30, 2019 | 75,747,718 | 1,000,000 | 13,784,201 | ||||
Increase Decrease In Stockholders Equity [Roll Forward] | |||||||
Issuance of common stock resulting from convertible note PIK interest (paid) | $ 17 | 14,046 | 14,063 | ||||
Issuance of common stock resulting from convertible note PIK interest (paid) (in shares) | 16,568 | ||||||
Restricted common stock issued as part of the Green Tree acquisition | $ 16,766 | 12,892,845 | 12,909,611 | ||||
Restricted common stock issued as part of the Green Tree acquisition (in shares) | 16,765,727 | ||||||
Share-based compensation expense | 352,341 | 352,341 | |||||
Foreign currency translation | (118,003) | (118,003) | |||||
Net income | (1,255,569) | (1,255,569) | |||||
Balance Ending at Sep. 30, 2019 | $ 92,531 | $ 99,748,368 | $ (96,355) | $ (33,492,472) | $ 1,000 | $ 13,784 | $ 66,266,856 |
Balance Ending (in shares) at Sep. 30, 2019 | 92,530,013 | 1,000,000 | 13,784,201 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements Of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (7,284,962) | $ (4,945,477) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 3,554,729 | 1,869,889 |
Accretion of debt discounts | 922,965 | |
Loss on issuance of warrants | 787,209 | |
Provision for doubtful accounts | 199,215 | |
Share-based compensation expense | 1,241,741 | 2,143,548 |
Change in fair value of convertible notes, net of discount | (288,425) | (504,768) |
Change in fair value of warrant Liability | (3,462,746) | (1,434,760) |
Change in fair value of convertible notes, net of discount - related party | 213,828 | (93,506) |
Change in fair value of contingent consideration | 880,050 | 131,994 |
Loss on impairment of goodwill | 664,329 | |
Gain on reduction of obligation pursuant to acquisition | (607,415) | |
Gain on reduction of contingent consideration | (100,000) | |
Change in operating assets and liabilities: | ||
Accounts receivable | (458,461) | (373,314) |
Prepaid expenses and other current assets | (239,374) | |
Deposits and other assets | 40,259 | (87,161) |
Due to related party | (32,489) | |
Costs in excess of billings | 12,401 | 16,055 |
Accounts payable and accrued expenses | 1,108,266 | 26,044 |
Deferred rent | (2,937) | (6,403) |
Billings in excess of costs | (28,687) | (16,405) |
Right of use assets and liabilities | 72,940 | |
Other long-term liabilities | 2,000 | |
Net cash used in operating activities | (2,862,478) | (3,217,350) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (620,594) | (85,665) |
Purchase of domain names | (21,856) | |
Payments for business combination, net of cash acquired | (148,727) | (79,664) |
Cash acquired as part of business combination | 454,306 | |
Payments for asset acquisition | (58,729) | |
Net cash (used in) provided by investing activities | (791,177) | 230,248 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments pursuant to convertible notes payable - related party | (150,000) | |
Promissory note receivable | (75,000) | |
Payments pursuant to advances from related parties | (45,250) | (69,500) |
Payments pursuant to notes payable | (15,401) | |
Payments pursuant to a promissory note | (280,000) | |
Proceeds from notes payable | 16,271 | |
Proceeds from the issuance of a promissory note | 580,000 | 250,000 |
Proceeds from the issuance of convertible notes payable | 2,732,500 | |
Proceeds from the issuance of common stock | 1,306,313 | 2,595,214 |
Net cash provided by financing activities | 4,203,162 | 2,641,985 |
Effect of foreign exchange rate changes on cash | (179,988) | (58,445) |
Net change in cash | 369,519 | (403,562) |
Cash, beginning of period | 285,761 | 868,554 |
Cash, end of period | 655,280 | 464,992 |
Supplemental disclosure of cash and non-cash transactions: | ||
Cash paid for interest | 40,625 | |
Common stock issued pursuant to convertible notes payable | 117,937 | |
Debt discount for warrant liability | (1,578,225) | |
Equity issued pursuant to acquisition | 13,619,611 | 58,718,033 |
Security Grade acquisition consideration settlement | ||
Cash payable pursuant to acquisition | 50,000 | |
PIK interest payment of common stock | 75,000 | |
Common stock issued pursuant to contingent 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 | |
Partial conversion of convertible note into common stock | $ 175,000 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2019 | |
Description Of Business | |
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 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 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”). 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. (“GTI”) and Steve Janjic, as the representative of the GTI shareholders, pursuant to which Merger Sub merged with and into GTI (the “Merger”). On September 10, 2019, the Company closed the Merger and entered into an Addendum No. 1 to the Amercanex Merger Agreement acknowledging and approving certain events that occurred since signing as well as implementing various related amendments to the Amercanex Merger Agreement. In connection with closing the Merger, the Company issued 16,765,727 unregistered shares of Company common stock to GTI shareholders, of which 4,140,274 shares were held back to satisfy indemnification obligations in the Merger Agreement, if necessary. |
Going Concern Uncertainty, Fina
Going Concern Uncertainty, Financial Condition and Management's Plans | 9 Months Ended |
Sep. 30, 2019 | |
Going Concern Uncertainty Financial Condition And Managements Plans | |
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 September 30, 2019, the Company had a working capital deficit of $3,674,434, as compared to a working capital deficit of $2,233,652 at December 31, 2018. The increase of $1,440,782 in the Company's working capital deficit from December 31, 2018 to September 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 accounts payable and accrued liabilities, 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 for the next twelve months. 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. 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 | 9 Months Ended |
Sep. 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), Tan Security (since April 1, 2019) and Green Tree International, Inc. (since September 10, 2019). These interim statements should be read in conjunction with the Company's consolidated financial statements for the year ended 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 $241,896 and $76,156 at September 30, 2019 and December 31, 2018, respectively. 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 $104,785 and $12,671 for the three months ended September 30, 2019 and 2018, respectively, and $352,275 and $74,408 for the nine months ended September 30, 2019 and 2018, respectively. 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 . Earnings (Loss) per Share The Company follows ASC 260, Earnings Per Share For the three and nine months ended September 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. The anti-dilutive shares of common stock outstanding for the three and nine months ended September 30, 2019 and 2018 were as follows: For the Three Months Ended For the Nine Months Ended 2019 2018 2019 2018 Potentially dilutive securities: Convertible notes payable 3,649,021 106,957 3,649,021 106,957 Convertible Preferred A Stock 1,000,000 1,000,000 1,000,000 1,000,000 Convertible Preferred B Stock 13,784,201 13,784,201 13,784,201 13,784,201 Warrants 4,975,558 3,307,073 4,975,558 3,307,073 Stock options 9,787,381 8,739,669 9,787,381 8,739,669 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 | 9 Months Ended |
Sep. 30, 2019 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | 4. Revenue Recognition Disaggregation of revenue For the Three Months Ended For the Nine Months Ended 2019 2018 2019 2018 Types of Revenues: Security and Guarding $ 1,138,934 $ 1,141,676 $ 3,691,174 $ 3,432,651 Systems Installation 245,272 318,850 447,880 454,113 Software 2,357,078 1,653,195 6,872,210 2,229,337 Total revenues $ 3,741,284 $ 3,113,721 $ 11,011,264 $ 6,116,101 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 is short-term in nature and 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 September 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 September 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 September 30, 2019 and 2018. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | 5. Business Combinations 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 Green Tree International, Inc. On February 5, 2019, the Company and its wholly owned subsidiary, Merger Sub, entered into the Amercanex Merger Agreement with GTI and Steve Janjic, as the representative of the GTI shareholders, pursuant to which Merger Sub merged with and into GTI (the “Merger”). Pursuant to the Amercanex Merger Agreement, at the effective time of the Merger (the “Effective Time”), the Company will issue to the GTI stockholders an amount of unregistered shares of the Company’s common stock equal to $15 million, based on the average closing price of the Company’s common stock over the forty-five (45) trading day period ending three (3) trading days prior to the Closing Date. If the Closing occurs and revenues of GTI in the second 12 month period following the Closing Date exceed $5 million and are less than or equal to $10 million, Parent shall issue to the Company Shareholders a number of unregistered Parent Shares (whether issued or reserved for issuance) equal to the quotient of (a) $5 million divided by (b) the Parent Share Price multiplied by the quotient of (c) the revenues of the Company in the second 12 month period following the Closing Date less $5 million divided by (d) $5 million. To secure the indemnification obligations of the GTI shareholders to the Company under the Merger Agreement, 4,140,274 of the Company shares to be issued to the GTI shareholders will be held back and the Company will be entitled to retain such number of the holdback shares as necessary to satisfy those indemnification obligations. 50% of the holdback shares that remain after satisfaction of any indemnification obligations will be released 12 months after the closing date of the merger, and the remainder 24 months after the closing date of the merger. Additionally, if in the first 12 months following the closing GTI generates less than $1.5 million of revenues, 100% of the holdback shares shall be returned to the Company. In connection with closing the Merger on September 10, 2019, the Company will issue 16,765,727 unregistered shares of its common stock to GTI stockholders. In connection with the Merger, Steve Janjic joined the board of directors of the Company. The Merger 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 GTI merger. 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 GTI 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 GTI transaction: Base Price - Common Stock $ 12,909,611 Total Purchase Price $ 12,909,611 Description Fair Value Weighted Average Useful Life Assets acquired: Note Receivable, net $ 135,000 Property, Plant and Equipment, Net 12,142 Software 452,002 4.5 Goodwill 12,980,840 Total assets acquired $ 13,579,984 Liabilities assumed: Accounts Payable 43,717 Notes Payable 400,000 Other Liabilities 226,656 Total liabilities assumed: 670,373 Estimated fair value of net assets acquired: $ 12,909,611 The Company has not completed the valuation studies necessary to finalize the acquisition fair values of the assets acquired and liabilities assumed and related allocation of purchase price for GTI. Accordingly, the type and value of the intangible assets amounts set forth above are preliminary. Once the valuation process is finalized for GTI, there could be changes to the reported values of the assets acquired and liabilities assumed, including goodwill and intangible assets and those changes could differ materially from what is presented above. Total acquisition costs for the GTI merger incurred during the nine months ended September 30, 2019 was $83,324, and is included in selling, general and administrative expense in the Company’s Statements of Operations. Unaudited Pro Forma Results GTI contributed revenues of $0 and a net loss of $22,144 for the period September 10, 2019 through September 30, 2019, included in the Company’s consolidated condensed statements of operations. |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 6. Property and Equipment, Net At September 30, 2019 and December 31, 2018, property and equipment consisted of the following: September 30, December 31, Furniture and equipment $ 149,738 $ 264,659 Software equipment 402,297 - Vehicles 201,400 202,700 Total 753,435 467,359 Less: Accumulated depreciation (179,643 ) (117,841 ) Property and equipment, net $ 573,792 $ 349,518 Depreciation expense for the three months ended September 30, 2019 and 2018 was $24,440 and $27,528, respectively, and $71,662 and $63,421 for the nine months ended September 30, 2019 and 2018, respectively. |
Intangible Assets, Net and Good
Intangible Assets, Net and Goodwill | 9 Months Ended |
Sep. 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 September 30, 2019 and December 31, 2018: September 30, 2019 Estimated Gross Assets Assets Accumulated Net Book Database 5 $ 93,427 $ - - $ (64,826 ) $ 28,601 Trade names and trademarks 5 - 10 591,081 - - (178,294 ) 412,787 Web addresses 5 130,000 - - (89,061 ) 40,939 Customer list 5 11,459,027 - - (3,678,726 ) 7,780,301 Software 4.5 9,771,195 452,002 1,625 (2,911,794 ) 7,313,028 Domain Name 5 - - 20,231 (1,018 ) 19,213 $ 22,044,730 $ 452,002 $ 21,856 $ (6,923,719 ) $ 15,594,869 December 31, 2018 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 August 3, 2018, the Company acquired various assets of Engeni (See Note 5) (2) On September 10, 2019 the Company acquired various assets of GTI (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 $1,174,312 and $1,160,889 for the three months ended September 30, 2019 and 2018, respectively, and $3,483,067 and $1,806,468 for the nine months ended September 30, 2019 and 2018, respectively. The following table summarizes the Company's Goodwill as of September 30, 2019 and December 31, 2018: Total Goodwill Balance at December 31, 2017 $ 664,329 Impairment of goodwill (664,329 ) Goodwill attributable to Biotrack acquisition 39,135,008 Goodwill attributable to Engeni acquisition 778,552 Balance at December 31, 2018 $ 39,913,560 Goodwill attributable to Tan Security acquisition 821,807 Goodwill attributable to Green Tree acquisition 12,980,840 Balance at September 30, 2019 $ 53,716,207 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 | 9 Months Ended |
Sep. 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 September 30, 2019 and December 31, 2018: September 30, December 31, Costs incurred on uncompleted contracts $ 171,486 $ 89,700 Estimated earnings 71,321 50,512 Cost and estimated earnings earned on uncompleted contracts 242,807 140,212 Billings to date 338,844 252,535 Billings in excess of costs on uncompleted contracts (96,037 ) (112,323 ) Costs in excess of billings $ 30,468 $ 42,869 Billings in excess of cost (126,505 ) (155,192 ) $ (96,037 ) $ (112,323 ) |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | 9. Accounts Payable and Accrued Liabilities As of September 30, 2019 and December 31, 2018, accounts payable and accrued liabilities consisted of the following: September 30, December 31, Accounts payable $ 734,090 $ 842,389 Accrued compensation and related expenses 341,832 33,869 Accrued expenses 1,455,292 826,455 Lease obligation - current 385,784 - Total $ 2,916,998 $ 1,702,713 |
Convertible Notes Payable, Net
Convertible Notes Payable, Net of Discount | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable, net of discount | 10. Convertible Notes Payable, net of discount September 30, December 31, Note Five, 5% convertible promissory note, fixed secured, maturing November 16, 2019 $ - $ 187,177 Note Ten, 25% convertible promissory note, fixed secured, maturing March 1, 2020, net of debt discount for warrants 365,960 - Note Eleven, 10% convertible promissory note, fixed secured, maturing May 15, 2020, net of debt discount for warrants and legal fees 234,595 - Note Twelve, 10% convertible promissory note, fixed secured, maturing June 16, 2020, net of debt discount for warrants and legal fees 261,871 - 862,426 187,177 Less: Current portion (862,426 ) (187,177 ) Long-term portion $ - $ - On March 1, 2019, the Company entered into a $450,000 Secured Convertible Promissory Note ("Note Ten") with an independent investor (the "investor"). The 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 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 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 relative fair value of the warrants at inception of Note Ten. Debt discounts amortized to interest expense were $89,693 and $207,659 for the three and nine months ended September 30, 2019, respectively. The unamortized discount balance at September 30, 2019 was $148,188. On May 31, 2019 and September 3, 2019, the Company issued 15,625 and 16,568 restricted shares of common stock as paid-in-kind ("PIK") interest payments in the amount of $14,062 and $14,063, respectively. Accrued interest expense associated with Note Ten was $9,247 as of September 30, 2019, which includes PIK interest payable. On August 15, 2019, the Company entered into a $400,000 Fixed Convertible Promissory Note ("Note Eleven") with the investor. The investor provided the Company with $380,000 in cash proceeds, which was received by the Company during the period ended September 30, 2019. The additional $20,000 was retained by the investor for due diligence and legal bills for the transaction and recorded as a debt discount. Note Eleven will mature on May 15, 2020 and bear interest at a rate of 10% per annum, payable by the Company in cash. The principal balance of Note Eleven is convertible at the election of the investor, in whole or in part, at any time or from time to time, into the Company's common stock at $0.90 per share for the first 6 months and thereafter at the lower of $0.90 per share or at 70% of the average of the five lowest daily VWAPs of the Company's common stock during the 15 consecutive trading days prior to the date on which the investor elects to convert all or part of Note Eleven. In conjunction with Note Eleven, the Company issued a warrant to the investor to purchase 25,000 shares of the Company's common stock at $1.00 per share. The Company evaluated Note Eleven in accordance with ASC 480, Distinguishing Liabilities from Equity In addition, the company recorded a debt discount of $38,543 relating to the warrants issued in the amount of $18,543 based on the relative fair value of the warrants themselves at inception of Note Eleven and $20,000 relating to legal fees. Debt discounts amortized to interest expense were $6,471 for the three and nine months ended September 30, 2019, respectively. The unamortized discount balance at September 30, 2019 was $32,072. Accrued interest expense associated with Note Eleven was $6,715 as of September 30, 2019. On September 16, 2019, the Company entered into a $450,000 Fixed Convertible Promissory Note ("Note Twelve") with the investor. The investor provided the Company with $427,500 in cash proceeds, which was received by the Company during the period ended September 30, 2019. The additional $22,500 was retained by the investor for due diligence and legal bills for the transaction and was recorded as a debt discount. Note Twelve will mature on June 16, 2020 and bear interest at a rate of 10% per annum, payable by the Company in cash. The principal balance of Note Twelve is convertible at the election of the investor, in whole or in part, at any time or from time to time, into the Company's common stock at $0.90 per share for the first 6 months and thereafter at the lower of $0.90 per share or at 70% of the average of the five lowest daily VWAPs of the Company's common stock during the 15 consecutive trading days prior to the date on which the investor elects to convert all or part of Note Twelve. In conjunction with Note Twelve, the Company issued a warrant to the investor to purchase 25,000 shares of the Company's common stock at $1.00 per share. The Company evaluated Note Twelve in accordance with ASC 480, Distinguishing Liabilities from Equity In addition, the company recorded a debt discount of $40,183 relating to the warrants issued in the amount of $17,683 based on the residual fair value of the warrants themselves at inception of Note Twelve and $22,500 relating to legal fees. Debt discounts amortized to interest expense were $2,054 for the three and nine months ended September 30, 2019, respectively. The unamortized discount balance at September 30, 2019 was $38,129. Accrued interest expense associated with Note Twelve was $2,299 as of September 30, 2019. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions On March 1, 2019, the Company entered into a $1,500,000 Secured Convertible Promissory Note (“Note Nine”) with Rose Capital Fund I, LP (the Related Party Holder”). A Managing Member of the Related Party Holder is also a Director of the Company. The Related Party Holder provided the Company with $1,475,000 in cash proceeds, which was received by the Company during the period ended September 30, 2019. The additional $25,000 was retained by the Related Party Holder 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 Related Party Holder, 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 Related Party Holder 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 relative 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 $305,276 and $706,782 for the three and nine months ended September 30, 2019, respectively. The unamortized discount balance at September 30, 2019 was $504,371. On May 31, 2019, the Company issued 52,083 restricted shares of common stock as PIK interest payments in the amount of $46,875. Accrued interest expense associated with Note Nine was $29,795 as of September 30, 2019, which includes PIK interest payable. As of September 30, 2019, the balance of Note Nine, net of debt discount for warrants and legal bills was $1,209,458. Warrants 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 with the Related Party Holder 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. On July 29, 2019, the Company entered into an unsecured promissory note with the Related Party Holder in the amount of $300,000. The unsecured promissory note has a fixed interest rate of 12% and is due and payable on January 29, 2020. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | 12. Notes Payable As of September 30, 2019 and December 31, 2018 Notes payable consisted of the following: September 30, December 31, Vehicle financing loans payable, between 4.7% and 7.0% interest and maturing between June 2022 and July 2022 $ 55,127 $ 71,284 Loans Payable - Credit Union 5,831 5,075 Convertible Note Payable 400,000 - Less: Current portion of loans payable (24,805 ) (24,805 ) Long-term portion of loans payable $ 436,153 $ 51,554 The interest expense associated with the notes payable was $7,065 and $2,901 for the three months ended September 30, 2019 and 2018, respectively, and $9,746 and $4,321 for the nine months ended September 30, 2019 and 2018, respectively. In connection with the Merger, the Company assumed a $400,000 Senior Secured Convertible Debenture (the "Convertible Debenture") (See Note 5). The Convertible Debenture will mature on July 31, 2021 and bears interest at a rate of 10% per annum, payable by the Company to the Lender. In the event that Lender elects to convert the Convertible Debenture into Helix Common Stock or in the event Helix required the Lender to convert the Convertible Debenture into its Common Stock, the number of shares that shall be issuable upon full Conversion of the Convertible Debenture at any time shall be equal to the outstanding principal of the Convertible Debenture divided by $1.00. Pursuant to the terms of the Convertible Debenture, Helix Common Stock can be transferred to the Lender from Steve Janjic, as a shareholder of the Company who receives shares of Helix Common Stock at the Closing, instead of via a new issuance of shares of Helix Common Stock by Helix to Lender, and Lender agrees to accept such transfer of shares from Mr. Janjic as the issuance of Helix Common Stock. In addition, the Company shall have the right to require the Lender to convert the Convertible Debenture into Helix Common Stock at any time provided its Common Stock is listed on a stock exchange other than the U.S. OTCQB, the Common Stock would be fully traded up on conversion and the trading price of its Common Stock closes above $1.15 for 20 consecutive trading days on such exchange. The Convertible Debenture will be secured by a general security interest over all of the assets of the GTI, however does not apply to those assets owned by Helix or Merger Sub prior to the closing of the Merger. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | 13. Shareholders' Equity Common Stock Other Common Stock Issuances 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 payments in the amount of $14,062 and $46,875, respectively (see Notes 10 and 11). In August 2019, the Company issued 16,765,727 shares of common stock as part of the GTI acquisition. In September 2019, the Company issued 16,568 restricted shares of common stock as PIK interest payments in the amount of $14,063 (see Note 10). Conversion of Convertible Note to 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 nine months period ended September 30, 2019: Date of Issuance Number Total Share March 2019 250,000 $ 320,000 250,000 $ 320,000 Series A convertible preferred stock In October 2015, the Company issued a total of 1,000,000 shares of its Class A Preferred Stock. The Class A Preferred Stock included super majority voting rights and were convertible into 60% of the Company's common stock. During the third quarter of 2017, the Company modified the conversion rate on the Class A Preferred Stock to a 1:1 ratio. This modification reduced the amount of potentially dilutive Convertible Series A Stock by 15,746,127 shares to a total of 1,000,000 at September 30, 2017. 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. 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. 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. In accordance with the Certificate of Incorporation, there were 9,000,000 authorized Series B Preferred Stock at a par value of $ 0.001. 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). 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 | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Options | 14. Stock Options 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 September 30, 2019 is as follows: Shares Underlying Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at January 1, 2019 8,730,956 $ 0.671 2.44 Granted 1,245,000 $ 2.106 6.81 Exercised (188,575 ) $ 0.261 0.83 Forfeited and expired Outstanding at September 30, 2019 9,787,381 $ 0.862 2.94 Vested options at September 30, 2019 8,900,021 $ 0.749 1.88 |
Warrant Liability
Warrant Liability | 9 Months Ended |
Sep. 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 September 30, 2019, the fair value of the warrant liability was $283,696 and the Company recorded a change in fair value of the warrant liability of $255,151 and $1,433,810 for the three and nine months ended September 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 nine 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 September 30, 2019, the fair value of the warrant liability was $38,832. Accordingly, the Company recorded a change in fair value of the warrant liability of $34,241 and $44,754 related to the warrants for the three and nine months ended September 30, 2019. On August 15, 2019, in connection with the issuance of Note Eleven, the Company issued warrants, of which the value was derived and based off the fair value of Note Eleven, to the investor to purchase 25,000 shares of the Company's common stock at $1.00 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 August 15, 2019 and on or before August 15, 2024, by delivery to the Company of the Notice of Exercise. The Company determined that the warrants associated with Note Eleven 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 September 16, 2019, in connection with the issuance of Note Twelve, the Company issued warrants, of which the value was derived and based off the fair value of Note Twelve, to the investor to purchase 25,000 shares of the Company's common stock at $1.00 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 September 16, 2019 and on or before September 16, 2024, by delivery to the Company of the Notice of Exercise. The Company determined that the warrants associated with Note Twelve 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 A summary of warrant activity is as follows: For the Nine Months Ended September 30, 2019 Warrant Shares Weighted Average Exercise Price Balance at January 1, 2019 3,418,184 $ 0.23 Warrants granted 1,557,374 $ 1.22 Balance at June 30, 2019 4,975,558 $ 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 $ 0.60 $ 0.90 Dividend yield 0 % 0 % Expected volatility 45% - 140% 175.0 % Risk Free interest rate 1.55% - 1.79% 2.49 % Expected life (years) 2.92 1.65 Fair value of financial instruments - warrants $ 1,010,890 $ 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 $ 3,577,465 Change in fair value of liability to issue warrants $ (3,462,746 ) Balance as of September 30, 2019 $ 1,010,890 Amount Balance as of July 1, 2019 $ 2,199,266 Fair value of warrants issued $ 36,225 Change in fair value of liability to issue warrants $ (1,224,601 ) Balance as of September 30, 2019 $ 1,010,890 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 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 2,499,945 and 1,004,945 shares of common stock were granted as of September 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 | 9 Months Ended |
Sep. 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 nine months ended September 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 nine months ended September 30, 2019 and 2018, the Company has a net operating loss carry forward of approximately $16,952,000 and $9,825,000, 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 | 9 Months Ended |
Sep. 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: Nine Months Ended Operating lease expense $ 417,287 Cash paid for amounts included in the measurement of operating lease liabilities $ 273,398 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 $ 1,189,773 Accounts payable and accrued liabilities $ 385,784 Other long-term liabilities 876,929 Total lease liabilities $ 1,262,713 Weighted average remaining lease term (in years) 2.91 Weighted average discount rate 6.00 % Future lease payments included in the measurement of lease liabilities on the condensed consolidated balance sheet as of September 30, 2019, for the following five fiscal years and thereafter were as follows: As of 2019 - Remaining 115,982 2020 393,413 2021 248,223 2022 195,144 2023 200,944 Thereafter 205,438 Total future minimum lease payments $ 1,359,144 Less imputed interest (96,431 ) Total $ 1,262,713 As of September 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. |
Segment Results
Segment Results | 9 Months Ended |
Sep. 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 For the Nine Months Ended 2019 2018 2019 2018 Security and guarding Revenue $ 1,138,934 $ 1,141,676 $ 3,691,174 $ 3,432,651 Cost of revenue 1,236,572 917,620 2,975,102 2,458,548 Gross profit (97,638 ) 224,056 716,072 974,103 Total operating expenses 1,789,627 2,536,916 5,426,705 7,943,815 Loss from operations (1,887,265 ) (2,312,860 ) (4,710,633 ) (6,969,712 ) Total other (expense) income 1,619,474 58,716 640,064 2,714,438 Total net loss $ (267,791 ) $ (2,254,144 ) $ (4,070,569 ) $ (4,255,274 ) Systems installation Revenue $ 245,272 $ 318,850 $ 447,880 $ 454,113 Cost of revenue 149,431 194,013 649,041 379,046 Gross profit 95,841 124,837 (201,161 ) 75,067 Total operating expenses 179,641 49,683 367,094 134,097 Loss from operations (83,800 ) 75,154 (568,255 ) (59,030 ) Total other expense 280 406 713 804 Total net (loss) income $ (83,520 ) $ 75,560 $ (567,542 ) $ (58,226 ) Software Revenue $ 2,357,078 $ 1,653,195 $ 6,872,210 $ 2,229,337 Cost of revenue 838,792 768,428 2,522,570 1,055,122 Gross profit 1,518,286 884,767 4,349,640 1,174,215 Total operating expenses 2,410,597 1,384,542 6,996,514 1,806,108 Loss from operations (892,311 ) (499,775 ) (2,646,874 ) (631,893 ) Total other expense (11,947 ) (93 ) 23 (84 ) Total net loss $ (904,258 ) $ (499,868 ) $ (2,646,851 ) $ (631,977 ) |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 20. Subsequent Events On October 11, 2019, the Company entered into a securities purchase agreement pursuant to which the Company agreed to sell a secured convertible promissory note (the "Convertible Note") and common stock purchase warrant (the "Warrant"). The Convertible Note, which expires on July 11, 2020, has an initial aggregate principal balance of $450,000 and bears interest at a rate of 10% per annum. The Warrant is exercisable for five years to purchase up to 25,000 shares of the Company's common stock at a price of $1.00 per share. On October 18, 2019, November 5, 2019, November 7, 2019 and November 11, 2019, the holder of a 25% fixed secured convertible promissory note issued by the Company elected its option to partially convert $20,000, $20,000, $40,000 and $100,000 in principal of the convertible note into 56,738, 63,012, 126,024 and 315,060 shares of the Company's common stock. On November 1, 2019, the Company entered into an Advisory Services Agreement (the "Agreement") with Electrum Partners, LLC ("Electrum"). The Agreement provides for the issuance of 100,000 shares of restricted common stock to Electrum upon the commencement of the Agreement, the issuance of 50,000 stock options each month the Agreement is effective, and 100,000 warrants each month the agreement is effective. The stock options are exercisable for three years from issuance and vest immediately upon grant. The warrants are exercisable for five years from issuance and vest immediately upon grant. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 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), Tan Security (since April 1, 2019) and Green Tree International, Inc. (since September 10, 2019). These interim statements should be read in conjunction with the Company’s consolidated financial statements for the year ended 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 $241,896 and $76,156 at September 30, 2019 and December 31, 2018, respectively. |
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 $104,785 and $12,671 for the three months ended September 30, 2019 and 2018, respectively, and $352,275 and $74,408 for the nine months ended September 30, 2019 and 2018, respectively. |
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 . |
Earnings (Loss) per Share | Earnings (Loss) per Share The Company follows ASC 260, Earnings Per Share For the three and nine months ended September 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. The anti-dilutive shares of common stock outstanding for the three and nine months ended September 30, 2019 and 2018 were as follows: For the Three Months Ended For the Nine Months Ended 2019 2018 2019 2018 Potentially dilutive securities: Convertible notes payable 3,649,021 106,957 3,649,021 106,957 Convertible Preferred A Stock 1,000,000 1,000,000 1,000,000 1,000,000 Convertible Preferred B Stock 13,784,201 13,784,201 13,784,201 13,784,201 Warrants 4,975,558 3,307,073 4,975,558 3,307,073 Stock options 9,787,381 8,739,669 9,787,381 8,739,669 |
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) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of anti-dilutive shares of common stock outstanding | The anti-dilutive shares of common stock outstanding for the three and nine months ended September 30, 2019 and 2018 were as follows: For the Three Months Ended For the Nine Months Ended 2019 2018 2019 2018 Potentially dilutive securities: Convertible notes payable 3,649,021 106,957 3,649,021 106,957 Convertible Preferred A Stock 1,000,000 1,000,000 1,000,000 1,000,000 Convertible Preferred B Stock 13,784,201 13,784,201 13,784,201 13,784,201 Warrants 4,975,558 3,307,073 4,975,558 3,307,073 Stock options 9,787,381 8,739,669 9,787,381 8,739,669 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue Recognition [Abstract] | |
Schedule of disaggregation of revenue | Disaggregation of revenue For the Three Months Ended For the Nine Months Ended 2019 2018 2019 2018 Types of Revenues: Security and Guarding $ 1,138,934 $ 1,141,676 $ 3,691,174 $ 3,432,651 Systems Installation 245,272 318,850 447,880 454,113 Software 2,357,078 1,653,195 6,872,210 2,229,337 Total revenues $ 3,741,284 $ 3,113,721 $ 11,011,264 $ 6,116,101 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Engeni Acquisition Member [Member] | |
Schedule of allocation of the purchase price | 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 |
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] | |
Schedule of allocation of the purchase price | 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 |
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 |
Green Tree International,Inc [Member] | |
Schedule of allocation of the purchase price | The following table summarizes the provisional purchase price allocations relating to the GTI transaction: Base Price - Common Stock $ 12,909,611 Total Purchase Price $ 12,909,611 |
Schedule of assets acquired and liabilities assumed | Description Fair Value Weighted Average Useful Life Assets acquired: Note Receivable, net $ 135,000 Property, Plant and Equipment, Net 12,142 Software 452,002 4.5 Goodwill 12,980,840 Total assets acquired $ 13,579,984 Liabilities assumed: Accounts Payable 43,717 Notes Payable 400,000 Other Liabilities 226,656 Total liabilities assumed: 670,373 Estimated fair value of net assets acquired: $ 12,909,611 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | At September 30, 2019 and December 31, 2018, property and equipment consisted of the following: September 30, December 31, Furniture and equipment $ 149,738 $ 264,659 Software equipment 402,297 - Vehicles 201,400 202,700 Total 753,435 467,359 Less: Accumulated depreciation (179,643 ) (117,841 ) Property and equipment, net $ 573,792 $ 349,518 |
Intangible Assets, Net and Go_2
Intangible Assets, Net and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets, net and goodwill | September 30, 2019 Estimated Gross Assets Assets Accumulated Net Book Database 5 $ 93,427 $ - - $ (64,826 ) $ 28,601 Trade names and trademarks 5 - 10 591,081 - - (178,294 ) 412,787 Web addresses 5 130,000 - - (89,061 ) 40,939 Customer list 5 11,459,027 - - (3,678,726 ) 7,780,301 Software 4.5 9,771,195 452,002 1,625 (2,911,794 ) 7,313,028 Domain Name 5 - - 20,231 (1,018 ) 19,213 $ 22,044,730 $ 452,002 $ 21,856 $ (6,923,719 ) $ 15,594,869 December 31, 2018 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 August 3, 2018, the Company acquired various assets of Engeni (See Note 5) (2) On September 10, 2019 the Company acquired various assets of GTI (see Note 5) |
Schedule of goodwill | The following table summarizes the Company’s Goodwill as of September 30, 2019 and December 31, 2018: Total Goodwill Balance at December 31, 2017 $ 664,329 Impairment of goodwill (664,329 ) Goodwill attributable to Biotrack acquisition 39,135,008 Goodwill attributable to Engeni acquisition 778,552 Balance at December 31, 2018 $ 39,913,560 Goodwill attributable to Tan Security acquisition 821,807 Goodwill attributable to Green Tree acquisition 12,980,840 Balance at September 30, 2019 $ 53,716,207 |
Costs, Estimated Earnings and_2
Costs, Estimated Earnings and Billings (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Costs in Excess of Billings on Uncompleted Contracts or Programs [Abstract] | |
Schedule of costs, estimated earnings and billings on uncompleted contracts | Costs, estimated earnings and billings on uncompleted contracts are summarized as follows as of September 30, 2019 and December 31, 2018: September 30, December 31, Costs incurred on uncompleted contracts $ 171,486 $ 89,700 Estimated earnings 71,321 50,512 Cost and estimated earnings earned on uncompleted contracts 242,807 140,212 Billings to date 338,844 252,535 Billings in excess of costs on uncompleted contracts (96,037 ) (112,323 ) Costs in excess of billings $ 30,468 $ 42,869 Billings in excess of cost (126,505 ) (155,192 ) $ (96,037 ) $ (112,323 ) |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued liabilities | As of September 30, 2019 and December 31, 2018, accounts payable and accrued liabilities consisted of the following: September 30, December 31, Accounts payable $ 734,090 $ 842,389 Accrued compensation and related expenses 341,832 33,869 Accrued expenses 1,455,292 826,455 Lease obligation - current 385,784 - Total $ 2,916,998 $ 1,702,713 |
Convertible Notes Payable, Ne_2
Convertible Notes Payable, Net of Discount (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of convertible note payable | September 30, December 31, Note Five, 5% convertible promissory note, fixed secured, maturing November 16, 2019 $ - $ 187,177 Note Ten, 25% convertible promissory note, fixed secured, maturing March 1, 2020, net of debt discount for warrants 365,960 - Note Eleven, 10% convertible promissory note, fixed secured, maturing May 15, 2020, net of debt discount for warrants and legal fees 234,595 - Note Twelve, 10% convertible promissory note, fixed secured, maturing June 16, 2020, net of debt discount for warrants and legal fees 261,871 - 862,426 187,177 Less: Current portion (862,426 ) (187,177 ) Long-term portion $ - $ - |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable | September 30, December 31, Vehicle financing loans payable, between 4.7% and 7.0% interest and maturing between June 2022 and July 2022 $ 55,127 $ 71,284 Loans Payable - Credit Union 5,831 5,075 Convertible Note Payable 400,000 - Less: Current portion of loans payable (24,805 ) (24,805 ) Long-term portion of loans payable $ 436,153 $ 51,554 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
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 |
Stock Options (Tables)
Stock Options (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock option activity | Stock option activity for the period ended September 30, 2019 is as follows: Shares Underlying Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at January 1, 2019 8,730,956 $ 0.671 2.44 Granted 1,245,000 $ 2.106 6.81 Exercised (188,575 ) $ 0.261 0.83 Forfeited and expired Outstanding at September 30, 2019 9,787,381 $ 0.862 2.94 Vested options at September 30, 2019 8,900,021 $ 0.749 1.88 |
Warrant Liability (Tables)
Warrant Liability (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of recognized as a loss in earnings | 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 ) |
Schedule of warrant activity | A summary of warrant activity is as follows: For the Nine Months Ended September 30, 2019 Warrant Shares Weighted Average Exercise Price Balance at January 1, 2019 3,418,184 $ 0.23 Warrants granted 1,557,374 $ 1.22 Balance at June 30, 2019 4,975,558 $ 0.55 |
Schedule of fair value of the Company's warrant liability using the Black-Scholes model | 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 $ 0.60 $ 0.90 Dividend yield 0 % 0 % Expected volatility 45% - 140% 175.0 % Risk Free interest rate 1.55% - 1.79% 2.49 % Expected life (years) 2.92 1.65 Fair value of financial instruments - warrants $ 1,010,890 $ 896,171 |
Schedule of fair value of the financial instruments - warrants | 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 $ 3,577,465 Change in fair value of liability to issue warrants $ (3,462,746 ) Balance as of September 30, 2019 $ 1,010,890 Amount Balance as of July 1, 2019 $ 2,199,266 Fair value of warrants issued $ 36,225 Change in fair value of liability to issue warrants $ (1,224,601 ) Balance as of September 30, 2019 $ 1,010,890 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of activity related to the Company's leases | Activity related to the Company’s leases was as follows: Nine Months Ended Operating lease expense $ 417,287 Cash paid for amounts included in the measurement of operating lease liabilities $ 273,398 ROU assets obtained in exchange for operating lease obligations $ 1,499,752 |
Schedule of ROU lease assets and lease liabilities | As of Other assets $ 1,189,773 Accounts payable and accrued liabilities $ 385,784 Other long-term liabilities 876,929 Total lease liabilities $ 1,262,713 Weighted average remaining lease term (in years) 2.91 Weighted average discount rate 6.00 % |
Schedule of future lease payments included in the measurement of lease liabilities | As of 2019 - Remaining 115,982 2020 393,413 2021 248,223 2022 195,144 2023 200,944 Thereafter 205,438 Total future minimum lease payments $ 1,359,144 Less imputed interest (96,431 ) Total $ 1,262,713 |
Segment Results (Tables)
Segment Results (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of represents selected information reportable segments | For the Three Months Ended For the Nine Months Ended 2019 2018 2019 2018 Security and guarding Revenue $ 1,138,934 $ 1,141,676 $ 3,691,174 $ 3,432,651 Cost of revenue 1,236,572 917,620 2,975,102 2,458,548 Gross profit (97,638 ) 224,056 716,072 974,103 Total operating expenses 1,789,627 2,536,916 5,426,705 7,943,815 Loss from operations (1,887,265 ) (2,312,860 ) (4,710,633 ) (6,969,712 ) Total other (expense) income 1,619,474 58,716 640,064 2,714,438 Total net loss $ (267,791 ) $ (2,254,144 ) $ (4,070,569 ) $ (4,255,274 ) Systems installation Revenue $ 245,272 $ 318,850 $ 447,880 $ 454,113 Cost of revenue 149,431 194,013 649,041 379,046 Gross profit 95,841 124,837 (201,161 ) 75,067 Total operating expenses 179,641 49,683 367,094 134,097 Loss from operations (83,800 ) 75,154 (568,255 ) (59,030 ) Total other expense 280 406 713 804 Total net (loss) income $ (83,520 ) $ 75,560 $ (567,542 ) $ (58,226 ) Software Revenue $ 2,357,078 $ 1,653,195 $ 6,872,210 $ 2,229,337 Cost of revenue 838,792 768,428 2,522,570 1,055,122 Gross profit 1,518,286 884,767 4,349,640 1,174,215 Total operating expenses 2,410,597 1,384,542 6,996,514 1,806,108 Loss from operations (892,311 ) (499,775 ) (2,646,874 ) (631,893 ) Total other expense (11,947 ) (93 ) 23 (84 ) Total net loss $ (904,258 ) $ (499,868 ) $ (2,646,851 ) $ (631,977 ) |
Description of Business (Detail
Description of Business (Details Narrative) - shares | Sep. 10, 2019 | Aug. 03, 2018 | Oct. 01, 2015 | Apr. 02, 2019 |
Business Acquisition [Line Items] | ||||
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. | |||
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. | |||
Amercanex Merger Agreement [Member] | GTI Shareholders [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of unregistered shares issued | 16,765,727 | |||
Number of shares repurchased during the year | 4,140,274 | |||
Tan Acquisition Agreement [Member] | ||||
Business Acquisition [Line Items] | ||||
Exchanged percentage of Helix TCS | 100.00% |
Going Concern Uncertainty, Fi_2
Going Concern Uncertainty, Financial Condition and Management's Plans (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Going Concern Uncertainty Financial Condition And Managements Plans | ||
Working capital deficit | $ 3,674,434 | $ 2,233,652 |
Increase of working capital | $ 1,440,782 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accounting Policies [Abstract] | ||||
Convertible notes payable | 3,649,021 | 106,957 | 3,649,021 | 106,957 |
Convertible Preferred A Stock | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 |
Convertible Preferred B Stock | 13,784,201 | 13,784,201 | 13,784,201 | 13,784,201 |
Warrants | 4,975,558 | 3,307,073 | 4,975,558 | 3,307,073 |
Stock options | 9,787,381 | 8,739,669 | 9,787,381 | 8,739,669 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||||
Allowance for doubtful accounts | $ 241,896 | $ 241,896 | $ 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 | $ 104,785 | $ 12,671 | $ 352,275 | $ 74,408 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Total revenues | $ 3,741,284 | $ 3,113,721 | $ 11,011,264 | $ 6,116,101 |
Security And Guarding [Member] | ||||
Total revenues | 1,138,934 | 1,141,676 | 3,691,174 | 3,432,651 |
Systems Installation [Member] | ||||
Total revenues | 245,272 | 318,850 | 447,880 | 454,113 |
Software [Member] | ||||
Total revenues | $ 2,357,078 | $ 1,653,195 | $ 6,872,210 | $ 2,229,337 |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue Recognition [Abstract] | |
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) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Tan’s International Security [Member] | |
Business Acquisition [Line Items] | |
Base Price - Cash | $ 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 |
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 |
Green Tree International,Inc [Member] | |
Business Acquisition [Line Items] | |
Base Price - Common Stock | 12,909,611 |
Total Purchase Price | $ 12,909,611 |
Business Combinations (Details
Business Combinations (Details 1) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Green Tree International, Inc. [Member] | |
Assets acquired: | |
Note Receivable, net | $ 135,000 |
Property, plant and equipment, net | 12,142 |
Goodwill | 12,980,840 |
Software | 452,002 |
Total assets acquired | 13,579,984 |
Liabilities assumed: | |
Accounts payable | 43,717 |
Notes Payable | 400,000 |
Other liabilities | 226,656 |
Total liabilities assumed | 670,373 |
Estimated fair value of net assets acquired | $ 12,909,611 |
Green Tree International, Inc. [Member] | Trademarks [Member] | |
Liabilities assumed: | |
Weighted Average Useful Life (in years) | 4 years 6 months |
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 |
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 Narrative) - USD ($) | Sep. 10, 2019 | Oct. 01, 2015 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Aug. 02, 2019 | Aug. 02, 2018 |
Business Acquisition [Line Items] | |||||||||
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. | ||||||||
Selling, general and administrative | $ 1,114,419 | $ 802,724 | $ 3,221,788 | $ 1,678,603 | |||||
Gain on reduction of obligation pursuant | $ 50,361 | $ 607,415 | |||||||
Tan’s International Security [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Business acquisition, description | 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 | ||||||||
Deferred cash payment | $ 25,000 | ||||||||
Engeni Acquisition Member [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
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. | ||||||||
Fair value of contingent consideration | $ 777,298 | ||||||||
Change in fair value of contingent consideration | $ 100,000 | ||||||||
Common stock shares issued | 733,300 | ||||||||
Green Tree International, Inc. [Member] | Amercanex Merger Agreement [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Business acquisition, description | Pursuant to the Amercanex Merger Agreement, at the effective time of the Merger (the “Effective Time”), the Company will issue to the GTI stockholders an amount of unregistered shares of the Company’s common stock equal to $15 million, based on the average closing price of the Company’s common stock over the forty-five (45) trading day period ending three (3) trading days prior to the Closing Date. If the Closing occurs and revenues of GTI in the second 12 month period following the Closing Date exceed $5 million and are less than or equal to $10 million, Parent shall issue to the Company Shareholders a number of unregistered Parent Shares (whether issued or reserved for issuance) equal to the quotient of (a) $5 million divided by (b) the Parent Share Price multiplied by the quotient of (c) the revenues of the Company in the second 12 month period following the Closing Date less $5 million divided by (d) $5 million. To secure the indemnification obligations of the GTI shareholders to the Company under the Merger Agreement, 30% of the Company shares to be issued to the GTI shareholders will be held back and the Company will be entitled to retain such number of the holdback shares as necessary to satisfy those indemnification obligations. 50% of the holdback shares that remain after satisfaction of any indemnification obligations will be released 12 months after the closing date of the merger, and the remainder 24 months after the closing date of the merger. Additionally, if in the first 12 months following the closing GTI generates less than $1.5 million of revenues, 100% of the holdback shares shall be returned to the Company. | ||||||||
Total acquisition costs | $ 83,324 | ||||||||
Revenues | $ 22,144 | ||||||||
Green Tree International, Inc. [Member] | Amercanex Merger Agreement [Member] | Unregistered Shares [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Revenues | $ 0 | ||||||||
Common stock shares issued | 16,765,727 | ||||||||
Number of shares repurchased during the year | 4,140,274 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 753,435 | $ 467,359 |
Less: Accumulated depreciation | (179,643) | (117,841) |
Property and equipment, net | 573,792 | 349,518 |
Furniture and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 149,738 | 264,659 |
Software equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 402,297 | |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 201,400 | $ 202,700 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 24,440 | $ 27,528 | $ 71,662 | $ 63,421 |
Intangible Assets, Net and Go_3
Intangible Assets, Net and Goodwill (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |||
Sep. 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 | 452,002 | [1] | 18,541,725 | [2] | |
Assets Acquired | 21,856 | ||||
Accumulated Amortization | (6,923,719) | (3,440,652) | |||
Net Book Value | $ 15,594,869 | $ 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 | (64,826) | (50,858) | |||
Net Book Value | 28,601 | 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 | [1] | 466,081 | [2] | ||
Accumulated Amortization | (178,294) | (91,554) | |||
Net Book Value | $ 412,787 | $ 499,527 | |||
Trade names and trademarks [Member] | Minimum [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Useful Life (Years) | 10 years | 5 years | |||
Trade names and trademarks [Member] | Maximum [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Useful Life (Years) | 5 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 | (89,061) | (69,625) | |||
Net Book Value | $ 40,939 | $ 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] | 8,304,449 | [2] | ||
Accumulated Amortization | (3,678,726) | (1,965,520) | |||
Net Book Value | $ 7,780,301 | $ 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 | 452,002 | [1] | 9,771,195 | [2] | |
Assets Acquired | 1,625 | ||||
Accumulated Amortization | (2,911,794) | (1,263,095) | |||
Net Book Value | 7,313,028 | $ 8,508,100 | |||
Domain Name [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | |||||
Assets Acquired Pursuant to Business Combination | [1] | ||||
Assets Acquired | 20,231 | ||||
Accumulated Amortization | (1,018) | ||||
Net Book Value | $ 19,213 | ||||
[1] | On September 10, 2019 the Company acquired various assets of GTI (see Note 5) | ||||
[2] | On August 3, 2018, the Company acquired various assets of Engeni (See Note 5) |
Intangible Assets, Net and Go_4
Intangible Assets, Net and Goodwill (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 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 Biotrack acquisition | 39,135,008 | ||||
Goodwill attributable to Engeni acquisition | 778,552 | ||||
Goodwill attributable to Tan Security acquisition | 821,807 | ||||
Goodwill attributable to Green Tree acquisition | 12,980,840 | ||||
Balance | $ 53,716,207 | $ 53,716,207 | $ 39,913,559 |
Intangible Assets, Net and Go_5
Intangible Assets, Net and Goodwill (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Amortization expense related to intangible assets | $ 1,174,312 | $ 1,160,889 | $ 3,483,067 | $ 1,806,468 | |
Goodwill write-off | $ 664,329 |
Costs, Estimated Earnings and_3
Costs, Estimated Earnings and Billings (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Costs in Excess of Billings on Uncompleted Contracts or Programs [Abstract] | ||
Costs incurred on uncompleted contracts | $ 171,486 | $ 89,700 |
Estimated earnings | 71,321 | 50,512 |
Cost and estimated earnings earned on uncompleted contracts | 242,807 | 140,212 |
Billings to date | 338,844 | 252,535 |
Billings in excess of costs on uncompleted contracts | (96,037) | (112,323) |
Costs in excess of billings | 30,468 | 42,869 |
Billings in excess of cost | (126,505) | (155,192) |
Total | $ (96,037) | $ (112,323) |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 734,090 | $ 842,389 |
Accrued compensation and related expenses | 341,832 | 33,869 |
Accrued expenses | 1,455,292 | 826,455 |
Lease obligation - current | 385,784 | |
Total | $ 2,916,998 | $ 1,702,713 |
Convertible Notes Payable, Ne_3
Convertible Notes Payable, Net of Discount (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Short-term Debt [Line Items] | ||
Convertible note payable | $ 862,426 | $ 187,177 |
Less: Current portion | (862,426) | (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 | 365,960 | |
Note Eleven, 10% convertible promissory note, fixed secured, maturing May 15, 2020, net of debt discount for warrants and legal fees [Member] | ||
Short-term Debt [Line Items] | ||
Convertible note payable | 234,595 | |
Note Twelve, 10% convertible promissory note, fixed secured, maturing June 16, 2020, net of debt discount for warrants and legal fees [Member] | ||
Short-term Debt [Line Items] | ||
Convertible note payable | $ 261,871 |
Convertible Notes Payable, Ne_4
Convertible Notes Payable, Net of Discount (Details Narrative) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||
Sep. 03, 2019USD ($)shares | May 31, 2019USD ($)shares | Sep. 30, 2019USD ($)$ / shares | Sep. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Sep. 30, 2019USD ($)TradingDays$ / sharesshares | Sep. 30, 2018USD ($) | Sep. 16, 2019USD ($) | Aug. 15, 2019USD ($) | Mar. 02, 2019USD ($) | Dec. 31, 2018$ / shares | |
Short-term Debt [Line Items] | |||||||||||
Interest expense on convertible debt | $ 9,247 | ||||||||||
Warrants exercise price | $ / shares | $ 0.55 | $ 0.55 | $ 0.23 | ||||||||
Warrants issued amount | $ 355,847 | $ 355,847 | |||||||||
Cash proceeds from investors | |||||||||||
Gain to change in fair value | 430,766 | $ (17,880) | 288,425 | $ 679,766 | |||||||
Note Twelve [Member] | Investor [Member] | Common Stock | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Fair value of liability | $ 17,683 | $ 17,683 | |||||||||
Conversion rate, per share | $ / shares | $ 0.90 | $ 0.90 | |||||||||
Convertible preferred stock, terms of conversion, description | Common stock at $0.90 per share for the first 6 months and thereafter at the lower of $0.90 per share or a 70% of the average of the five lowest daily VWAPs of the Company’s common stock during the 15 consecutive trading days prior to the date on which the investor elects to convert all or part of Note Twelve. | ||||||||||
Warrant issued to purchase shares of common stock | shares | 25,000 | ||||||||||
Warrants exercise price | $ / shares | $ 1 | $ 1 | |||||||||
Unamortized discount | $ 38,129 | $ 38,129 | |||||||||
Warrants issued amount | 40,183 | 40,183 | |||||||||
Value of debt | 2,299 | ||||||||||
Debt discounts amortized to interest expense | 2,054 | 2,053 | |||||||||
Cash proceeds from investors | 427,500 | ||||||||||
Principal amount of notes | $ 450,000 | ||||||||||
Fair value of notes | 300,000 | 300,000 | |||||||||
Gain to change in fair value | $ (150,000) | $ (150,000) | |||||||||
Maturity date | Jun. 16, 2020 | ||||||||||
Interest rate | 10.00% | 10.00% | |||||||||
Due diligence and legal bills | $ 22,500 | ||||||||||
Legal fees | 22,500 | ||||||||||
Note Eleven [Member] | Investor [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Fair value of liability | $ 18,543 | $ 18,543 | |||||||||
Convertible preferred stock, terms of conversion, description | Common stock at $0.90 per share for the first 6 months and thereafter at the lower of $0.90 per share or a 70% of the average of the five lowest daily VWAPs of the Company’s common stock during the 15 consecutive trading days prior to the date on which the investor elects to convert all or part of Note Eleven. | ||||||||||
Warrant issued to purchase shares of common stock | shares | 25,000 | ||||||||||
Warrants exercise price | $ / shares | $ 1 | $ 1 | |||||||||
Unamortized discount | $ 32,072 | $ 32,072 | |||||||||
Warrants issued amount | 38,543 | 38,543 | |||||||||
Value of debt | 6,715 | ||||||||||
Debt discounts amortized to interest expense | 6,471 | 6,471 | |||||||||
Cash proceeds from investors | 380,000 | ||||||||||
Principal amount of notes | $ 400,000 | ||||||||||
Fair value of notes | 266,667 | 266,667 | |||||||||
Gain to change in fair value | $ (133,333) | $ (133,333) | |||||||||
Maturity date | May 15, 2020 | ||||||||||
Interest rate | 10.00% | 10.00% | |||||||||
Due diligence and legal bills | $ 20,000 | ||||||||||
Legal fees | 20,000 | ||||||||||
Note Ten [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Unamortized discount | $ 148,188 | 148,188 | |||||||||
Debt discounts amortized to interest expense | 89,693 | 207,659 | |||||||||
Fair value of notes | 514,148 | 514,148 | |||||||||
Gain to change in fair value | $ (147,433) | $ 64,148 | |||||||||
Restricted shares of common stock | shares | 16,568 | 15,625 | |||||||||
Restricted shares of common stock value | $ 14,063 | $ 14,062 | |||||||||
Note Ten [Member] | Investor [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Discount on debt conversion, description | 30% discount | ||||||||||
Trading days related to conversion of debt | TradingDays | 30 | ||||||||||
Conversion rate, per share | $ / shares | $ 0.90 | $ 0.90 | |||||||||
Cash proceeds from investors | $ 450,000 | ||||||||||
Principal amount of notes | $ 450,000 | ||||||||||
Maturity date | Mar. 1, 2020 | ||||||||||
Interest rate | 25.00% | 25.00% | |||||||||
Note Ten [Member] | Investor [Member] | Common Stock | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Warrant issued to purchase shares of common stock | shares | 160,715 | ||||||||||
Warrants exercise price | $ / shares | $ 1.40 | $ 1.40 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jul. 29, 2019 | May 31, 2019 | Jan. 03, 2019 | May 31, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | |||||||
Related party loan balance | $ 32,489 | ||||||
Promissory note, description | The Company entered into an unsecured promissory note with the Related Party Holder 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 | $ 0.55 | $ 0.55 | $ 0.23 | ||||
Warrants to purchase shares | 4,975,558 | 4,975,558 | 3,418,184 | ||||
Note Nine [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 1,500,000 | $ 1,500,000 | |||||
Maturity date | Mar. 1, 2020 | ||||||
Annual rate of interest | 25.00% | 25.00% | |||||
Change in fair value of convertible note - related party | $ (491,442) | $ 213,828 | |||||
Interest expense | 29,795 | ||||||
Total proceeds | $ 1,475,000 | ||||||
Common stock per share | $ 1.40 | $ 1.40 | |||||
Warrants to purchase shares | 535,715 | 535,715 | |||||
Fair value of liability after period end | $ 1,713,828 | $ 1,713,828 | |||||
Net of debt discount for warrants and legal bills | 1,209,458 | 1,209,458 | |||||
Restricted shares of common stock | 52,083 | ||||||
Restricted shares of common stock value | $ 46,875 | ||||||
Legal fees | 25,000 | ||||||
Debt discounts amortized to interest expense | 305,276 | 706,782 | |||||
Unsecured Promissory Note [Member] | Related Party Holder [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 300,000 | ||||||
Maturity date | Jan. 29, 2020 | ||||||
Annual rate of interest | 12.00% | ||||||
Warrant [Member] | Note Nine [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | 1,186,153 | 1,186,153 | |||||
Fair value of liability | 259,215 | 259,215 | |||||
Change in fair value of convertible note - related party | $ 212,131 | $ 926,938 | |||||
Common stock per share | $ 1.40 | $ 1.40 | |||||
Warrants to purchase shares | 535,715 | 535,715 | |||||
Fair value of liability after period end | $ 1,186,153 | $ 1,186,153 | |||||
Net of debt discount for warrants and legal bills | 1,209,458 | 1,209,458 | |||||
Restricted shares of common stock | 52,083 | ||||||
Unamortized discount | $ 504,371 | $ 504,371 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Loans Payable - Credit Union | $ 5,831 | $ 5,075 |
Convertible Note Payable | 300,000 | |
Less: Current portion of loans payable | (24,805) | (24,805) |
Long-term portion of loans payable | 436,153 | 51,554 |
Vehicle Financing Loans Payable [Member] | ||
Vehicle financing loans payable, between 4.7% and 7.0% interest and maturing between June 2022 and July 2022 | $ 55,127 | $ 71,284 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Notes Payable [Line Items] | ||||
Interest expense associated with notes payable | $ 7,065 | $ 2,901 | $ 9,746 | $ 4,321 |
Debt Description | In connection with the Merger, the Company assumed a $400,000 Senior Secured Convertible Debenture (the "Convertible Debenture") (See Note 5). The Convertible Debenture will mature on July 31, 2021 and bears interest at a rate of 10% per annum, payable by the Company to the Lender. In the event that Lender elects to convert the Convertible Debenture into Helix Common Stock or in the event Helix required the Lender to convert the Convertible Debenture into its Common Stock, the number of shares that shall be issuable upon full Conversion of the Convertible Debenture at any time shall be equal to the outstanding principal of the Convertible Debenture divided by $1.00. | |||
Vehicle Financing Loans Payable [Member] | Minimum [Member] | ||||
Notes Payable [Line Items] | ||||
Loans payable, interest rate | 4.70% | 4.70% | ||
Maturity date, description | June 2022 | |||
Vehicle Financing Loans Payable [Member] | Maximum [Member] | ||||
Notes Payable [Line Items] | ||||
Loans payable, interest rate | 7.00% | 7.00% | ||
Maturity date, description | July 2022 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - Omnibus Incentive Plan [Member] - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Class of Stock [Line Items] | ||
Number of Shares Issued | 250,000 | 276,750 |
Total Share Based Compensation | $ 320,000 | $ 646,788 |
March 2019 [Member] | ||
Class of Stock [Line Items] | ||
Number of Shares Issued | 250,000 | |
Total Share Based Compensation | $ 320,000 | |
January 2018 [Member] | ||
Class of Stock [Line Items] | ||
Number of Shares Issued | 42,850 | |
Total Share Based Compensation | $ 173,014 | |
March 2018 [Member] | ||
Class of Stock [Line Items] | ||
Number of Shares Issued | 100,000 | |
Total Share Based Compensation | $ 250,000 | |
May 2018 [Member] | ||
Class of Stock [Line Items] | ||
Number of Shares Issued | 133,900 | |
Total Share Based Compensation | $ 223,774 |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |||||||||
Sep. 03, 2019 | Aug. 31, 2019 | May 31, 2019 | May 31, 2019 | Apr. 30, 2019 | Apr. 30, 2019 | Mar. 31, 2019 | Mar. 28, 2019 | Jan. 31, 2019 | Sep. 30, 2019 | Mar. 07, 2019 | |
Note Ten [Member] | |||||||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||||||
Shares of restricted common stock | 16,568 | 15,625 | |||||||||
Restricted shares of common stock value | $ 14,063 | $ 14,062 | |||||||||
Note Nine [Member] | |||||||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||||||
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] | |||||||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||||||
Restricted shares of common stock value | $ 16,568 | ||||||||||
Common stock, shares issued | 1,255,222 | 166,667 | |||||||||
Interest payments | $ 14,063 | ||||||||||
Other Common Stock Issuances [Member] | Note Ten [Member] | |||||||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||||||
Shares of restricted common stock | 15,625 | ||||||||||
Restricted shares of common stock value | $ 14,062 | ||||||||||
Other Common Stock Issuances [Member] | Note Nine [Member] | |||||||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||||||
Shares of restricted common stock | 52,083 | ||||||||||
Restricted shares of common stock value | $ 46,875 | ||||||||||
Other Common Stock Issuances [Member] | Investor [Member] | |||||||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||||||
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] | |||||||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||||||
Common stock, shares issued | 733,300 | ||||||||||
Other Common Stock Issuances [Member] | Biotrack Acquisition [Member] | |||||||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||||||
Common stock, shares issued | 16,765,727 | ||||||||||
Stock exercised during period, shares | 57,461 | 6,082 | |||||||||
Proceeds from stock options exercised | $ 21,808 | $ 4,805 | |||||||||
Other Common Stock Issuances [Member] | Rocky Tan International Security [Member] | |||||||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||||||
Stock issued during period, shares, acquisitions | 250,000 | ||||||||||
Other Common Stock Issuances [Member] | Security Grade Acquisition [Member] | |||||||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||||||
Stock exercised during period, shares | 15,101 | ||||||||||
Convertible Note to Common Stock [Member] | |||||||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||||||
Principal amount | $ 42,055 | $ 75,882 | |||||||||
Convertible note into conversion shares common stock | 55,421 | ||||||||||
Convertible note, percentage | 10.00% |
Shareholders' Equity (Details_2
Shareholders' Equity (Details Narrative 1) - USD ($) | 1 Months Ended | 9 Months Ended |
May 17, 2017 | Sep. 30, 2019 | |
Series B Preferred Shares [Member] | ||
Subsidiary or Equity Method Investee [Line Items] | ||
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 | |
Accredited investors an aggregate shares | 5,781,426 | |
Class A Preferred Stock [Member] | ||
Subsidiary or Equity Method Investee [Line Items] | ||
Preferred conversion, description | The Company issued a total of 1,000,000 shares of its Class A Preferred Stock as part of a reorganization in which Helix Opportunities LLC contributed 100% of itself and its wholly-owned subsidiaries, Security Consultants Group, LLC and Boss Security Solutions, Inc. to the Company in exchange for 1,000,000 convertible preferred shares of the Company. The Class A Preferred Stock included super majority voting rights and were convertible into 60% of the Company's common stock. During the third quarter of 2017, the Company modified the conversion rate on the Class A Preferred Stock to a 1:1 ratio. This modification reduced the amount of potentially dilutive Convertible Series A Stock by 15,746,127 shares to a total of 1,000,000 at September 30, 2017. | |
Series B Preferred Stock Purchase Agreement [Member] | ||
Subsidiary or Equity Method Investee [Line Items] | ||
Price, per share | $ 0.325 | |
Warrants issue | 462,195 |
Shareholders' Equity (Details_3
Shareholders' Equity (Details Narrative 2) - Series B Preferred Stock [Member] - USD ($) | Dec. 31, 2018 | Aug. 23, 2017 | May 12, 2017 |
Subsidiary or Equity Method Investee [Line Items] | |||
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 |
Stock Options (Details)
Stock Options (Details) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Shares Underlying Options | |
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 | 8,900,021 |
Weighted Average Exercise Price | |
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 | $ 0.749 |
Weighted Average Remaining Contractual Term | |
Outstanding, Weighted Average Remaining Contractual Term (in years) | 2 years 5 months 9 days |
Granted, Weighted Average Remaining Contractual Term (in years) | 6 years 9 months 22 days |
Exercised, Weighted Average Remaining Contractual Term (in years) | 9 months 29 days |
Outstanding, Weighted Average Remaining Contractual Term (in years) | 2 years 11 months 8 days |
Vested options, Weighted Average Remaining Contractual Term (in years) | 1 year 10 months 17 days |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - $ / shares | May 02, 2019 | Feb. 06, 2019 | Jun. 30, 2019 | May 31, 2019 | Mar. 19, 2019 | Mar. 19, 2019 | Mar. 19, 2019 | Mar. 19, 2019 |
Option Indexed to Issuer's Equity [Line Items] | ||||||||
Options to purchase on shares | 100,000 | |||||||
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. | 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. | |||||
Investor [Member] | ||||||||
Option Indexed to Issuer's Equity [Line Items] | ||||||||
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. | |||||||
Minimum [Member] | ||||||||
Option Indexed to Issuer's Equity [Line Items] | ||||||||
Common stock at price per share | $ 1.05 | $ 1.05 | ||||||
Maximum [Member] | ||||||||
Option Indexed to Issuer's Equity [Line Items] | ||||||||
Common stock at price per share | $ 2.03 | $ 2.03 | ||||||
Chief Financial Officer [Member] | ||||||||
Option Indexed to Issuer's Equity [Line Items] | ||||||||
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. | |||||||
Chief Financial Officer [Member] | Minimum [Member] | ||||||||
Option Indexed to Issuer's Equity [Line Items] | ||||||||
Common stock at price per share | $ 2.35 | |||||||
Chief Financial Officer [Member] | Maximum [Member] | ||||||||
Option Indexed to Issuer's Equity [Line Items] | ||||||||
Common stock at price per share | $ 2.59 | |||||||
Zachary Venegas [Member] | ||||||||
Option Indexed to Issuer's Equity [Line Items] | ||||||||
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. | |||||||
Zachary Venegas [Member] | Minimum [Member] | ||||||||
Option Indexed to Issuer's Equity [Line Items] | ||||||||
Common stock at price per share | 2.35 | |||||||
Zachary Venegas [Member] | Maximum [Member] | ||||||||
Option Indexed to Issuer's Equity [Line Items] | ||||||||
Common stock at price per share | $ 2.59 | |||||||
Employee One [Member] | ||||||||
Option Indexed to Issuer's Equity [Line Items] | ||||||||
Options to purchase on shares | 50,000 | 50,000 | ||||||
Employee Two [Member] | ||||||||
Option Indexed to Issuer's Equity [Line Items] | ||||||||
Options to purchase on shares | 40,000 | 40,000 | ||||||
Employee Three [Member] | ||||||||
Option Indexed to Issuer's Equity [Line Items] | ||||||||
Options to purchase on shares | 50,000 | 50,000 | ||||||
Employee Four [Member] | ||||||||
Option Indexed to Issuer's Equity [Line Items] | ||||||||
Options to purchase on shares | 50,000 | 50,000 | ||||||
Employee Five [Member] | ||||||||
Option Indexed to Issuer's Equity [Line Items] | ||||||||
Options to purchase on shares | 30,000 | 30,000 |
Warrant Liability (Details)
Warrant Liability (Details) - USD ($) | Jan. 10, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 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) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Summary of warrant activity | |
Warrant Shares, Balance | shares | 3,418,184 |
Warrant Shares, Warrants granted | shares | 1,557,374 |
Warrant Shares, Balance | shares | 4,975,558 |
Weighted Average Exercise Price, Balance at beginning | $ / shares | $ 0.23 |
Weighted Average Exercise Price, Warrants granted | $ / shares | 1.22 |
Weighted Average Exercise Price, Balance at ending | $ / shares | $ 0.55 |
Warrant Liability (Details 2)
Warrant Liability (Details 2) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Fair value of company's common stock | $ 0.60 | $ 0.90 |
Dividend yield | 0.00% | 0.00% |
Expected volatility | 175.00% | |
Risk free interest rate | 2.49% | |
Expected life (years) | 2 years 11 months 1 day | 1 year 7 months 24 days |
Fair value of financial instruments - warrants | $ 1,010,890 | $ 896,171 |
Maximum [Member] | ||
Expected volatility | 140.00% | |
Risk free interest rate | 1.79% | |
Minimum [Member] | ||
Expected volatility | 45.00% | |
Risk free interest rate | 1.55% |
Warrant Liability (Details 3)
Warrant Liability (Details 3) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Summary of warrants | |||
Beginning Balance | $ 2,199,266 | $ 896,171 | |
Fair value of warrants issued | 36,225 | 3,577,465 | |
Change in fair value of liability to issue warrants | (1,224,601) | (3,462,746) | $ (1,434,760) |
Ending Balance | $ 1,010,890 | $ 1,010,890 |
Warrant Liability (Details Narr
Warrant Liability (Details Narrative) - USD ($) | Sep. 16, 2019 | Aug. 15, 2019 | Jun. 14, 2019 | Mar. 05, 2019 | Mar. 02, 2019 | Jan. 10, 2019 | Jun. 24, 2019 | Mar. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||||||||||
Warrants exercise price | $ 0.55 | $ 0.55 | $ 0.23 | |||||||||
Fair value of the warrant liability | $ 1,010,890 | $ 896,171 | ||||||||||
Change in fair value of warrant liability | $ (1,224,601) | (3,462,746) | $ (1,434,760) | |||||||||
Second Investment Agreement [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Fair value of the warrant liability | 38,832 | |||||||||||
Change in fair value of warrant liability | 34,241 | 44,754 | ||||||||||
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] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
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 | |||||||||||
Note Eleven [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Fair value of the warrant liability | $ 18,542 | 12,739 | ||||||||||
Change in fair value of warrant liability | 5,803 | 5,803 | ||||||||||
Stock issued | $ 25,000 | |||||||||||
Purchase price per share | $ 1 | |||||||||||
Description of warrant exercise term | 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 August 15, 2019 and on or before August 15, 2024, by delivery to the Company of the Notice of Exercise. | |||||||||||
Note Twelve [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Fair value of the warrant liability | $ 17,683 | 12,803 | ||||||||||
Change in fair value of warrant liability | 4,880 | $ 4,880 | ||||||||||
Stock issued | $ 25,000 | |||||||||||
Purchase price per share | $ 1 | |||||||||||
Description of warrant exercise term | 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 September 16, 2019 and on or before September 16, 2024, by delivery to the Company of the Notice of Exercise. | |||||||||||
Warrant [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
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 September 30, 2019, the fair value of the warrant liability was $37,125. Accordingly, the Company recorded a change in fair value of the warrant liability of $45,037 and $161,023 related to the warrants for the three and nine months ended September 30, 2019, respectively. | |||||||||
Issued warrants to purchase restricted shares | 100,000 | |||||||||||
Warrant purchase price | $ 0.90 | |||||||||||
Fair value of the warrant liability | $ 198,148 | $ 1,010,890 | ||||||||||
Change in fair value of warrant liability | 1,224,601 | $ 3,462,745 | ||||||||||
Warrant [Member] | Note Ten [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
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 September 30, 2019, the fair value of the warrant liability was $77,765. Accordingly, the Company recorded a change in fair value of the warrant liability of $66,639 and $278,082 related to Note Ten for the three and nine months ended September 30, 2019, respectively. | |||||||||||
Warrant [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Fair value of the warrant liability | $ 37,125 | |||||||||||
Change in fair value of warrant liability | $ 45,037 | $ 161,023 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - shares | Nov. 01, 2015 | Sep. 01, 2015 | Oct. 17, 2017 | Oct. 22, 2014 | Sep. 30, 2019 | Dec. 31, 2018 |
Defined Benefit Plan Disclosure [Line Items] | ||||||
Granted, weighted average remaining contractual term (in years) | 6 years 9 months 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 $7.67. The options vest as to 25% of the shares subject to the Options, one year after the date of grant and then in equal quarterly installments for the three years thereafter, subject to the Executive’s continued employment with BioTrackTHC | BioTrackTHC approved and adopted the BioTrackTHC Stock Plan. The BioTrackTHC Stock Plan set aside and reserved 600,000 shares of BioTrackTHC's common stock for grant and issuance in accordance with its terms and conditions. | |||
2017 Omnibus Incentive Plan [Member] | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Reserved for issuance of common stock | 5,000,000 | |||||
Purchased shares of common stock | 0 | 490,000 | ||||
Granted, weighted average remaining contractual term (in years) | 10 years | |||||
Stock options granted | 2,499,945 | 1,004,945 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
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 | $ 16,952,000 | $ 9,825,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating lease expense | $ 417,287 |
Cash paid for amounts included in the measurement of operating lease liabilities | 273,398 |
ROU assets obtained in exchange for operating lease obligations | $ 1,499,752 |
Commitments and Contingencies_3
Commitments and Contingencies (Details 1) - Operating Lease [Member] | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Other assets | $ 1,189,773 |
Accounts payable and accrued liabilities | 385,784 |
Other long-term liabilities | 876,929 |
Total lease liabilities | $ 1,262,714 |
Weighted average remaining lease term (in years) | 2 years 10 months 27 days |
Weighted average discount rate | 6.00% |
Commitments and Contingencies_4
Commitments and Contingencies (Details 2) | Sep. 30, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 - Remaining | $ 115,982 |
2020 | 393,413 |
2021 | 248,223 |
2022 | 195,144 |
2023 | 200,944 |
Thereafter | 205,438 |
Total future minimum lease payments | 1,359,144 |
Less imputed interest | (96,430) |
Total | $ 1,262,714 |
Commitments and Contingencies_5
Commitments and Contingencies (Details Narrative) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
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 | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Cost of revenue | $ 2,224,795 | $ 1,880,061 | $ 6,146,713 | $ 3,892,716 |
Gross profit | 1,516,489 | 1,233,660 | 4,864,551 | 2,223,385 |
Total operating expenses | 4,379,865 | 3,971,141 | 12,790,313 | 9,884,020 |
Total other (expense) income | 1,607,807 | 59,029 | 640,800 | 2,715,158 |
Total net loss | (1,255,569) | (2,678,452) | (7,284,962) | (4,945,477) |
Security and guarding [Member] | ||||
Revenue | 1,138,934 | 1,141,676 | 3,691,174 | 3,432,651 |
Cost of revenue | 1,236,572 | 917,620 | 2,975,102 | 2,458,548 |
Gross profit | (97,638) | 224,056 | 716,072 | 974,103 |
Total operating expenses | 1,887,422 | 2,536,916 | 5,524,500 | 7,943,815 |
Loss from operations | (1,985,060) | (2,312,860) | (4,808,428) | (6,969,712) |
Total other (expense) income | 1,619,474 | 58,716 | 640,064 | 2,714,438 |
Total net loss | (365,586) | (2,254,144) | (4,168,364) | (4,255,274) |
Systems installation [Member] | ||||
Revenue | 245,272 | 318,850 | 447,880 | 454,113 |
Cost of revenue | 149,431 | 194,013 | 649,041 | 379,046 |
Gross profit | 95,841 | 124,837 | (201,161) | 75,067 |
Total operating expenses | 179,641 | 49,683 | 367,094 | 134,097 |
Loss from operations | (83,800) | 75,154 | (568,255) | (59,030) |
Total other (expense) income | 280 | 406 | 713 | 804 |
Total net loss | (83,520) | 75,560 | (567,542) | (58,226) |
Software [Member] | ||||
Revenue | 2,357,078 | 1,653,195 | 6,872,210 | 2,229,337 |
Cost of revenue | 838,792 | 768,428 | 2,522,570 | 1,055,122 |
Gross profit | 1,518,286 | 884,767 | 4,439,640 | 1,174,215 |
Total operating expenses | 2,410,597 | 1,384,542 | 6,996,514 | 1,806,108 |
Loss from operations | (892,311) | (499,775) | (2,646,874) | (631,893) |
Total other (expense) income | (11,947) | (93) | 23 | (84) |
Total net loss | $ (904,258) | $ (499,868) | $ (2,646,851) | $ (631,977) |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Nov. 02, 2019 | Oct. 11, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Issuance of common stock | 92,530,013 | 72,660,825 | ||
Issuance of stock options | 1,245,000 | |||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Common Stock Purchase Warrant [Member] | ||||
Warrant exercisable term | 5 years | |||
Number of share purchase | 25,000 | |||
Share price (in dollars per share) | $ 1 | |||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Convertible Promissory Note [Member] | ||||
Maturity date | Jul. 11, 2020 | |||
Principal amount | $ 450,000 | |||
Interest rate | 10.00% | |||
Subsequent Event [Member] | Advisory Services Agreement [Member] | Electrum Partners, LLC ("Electrum") [Member] | Warrant [Member] | ||||
Issuance of warrants | 100,000 | |||
Subsequent Event [Member] | Advisory Services Agreement [Member] | Stock Options [Member] | Electrum Partners, LLC ("Electrum") [Member] | ||||
Issuance of stock options | 50,000 | |||
Subsequent Event [Member] | Advisory Services Agreement [Member] | Restricted Common Stock [Member] | Electrum Partners, LLC ("Electrum") [Member] | ||||
Issuance of common stock | 100,000 |