Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Apr. 04, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | Digital Donations Technologies, Inc. | ||
Entity Central Index Key | 1,644,825 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 89,047,729 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 6,562 | $ 23,620 |
Accounts receivable - Trade | 11,961 | 11,336 |
Total Current Assets | 18,523 | 34,956 |
Fixed Assets | ||
Equipment | 14,402 | 13,228 |
Accumulated depreciation | (6,853) | (2,378) |
Fixed Assets, net | 7,549 | 10,850 |
Total Assets | 26,072 | 45,806 |
Current Liabilities | ||
Accounts payable | 83,116 | 15,147 |
Accrued liabilities | 76,789 | 75,432 |
Note Payable | 35,810 | 30,000 |
Total Current Liabilities | 195,715 | 120,579 |
Commitments and Contingencies | ||
Stockholders' Deficit | ||
Preferred Stock, $0.001 par value; 100,000,000 shares authorized at December 31, 2017 and 2016; 0 shares issued and outstanding as of December 31, 2017 and 2016. | ||
Common Stock, $0.0001 par value; 300,000,000 shares authorized at December 31, 2017 and 2016; 90,202,698 and 86,614,766 shares issued, issuable and outstanding at December 31, 2017 and 2016, respectively | 9,020 | 8,662 |
Additional paid-in capital | 1,205,310 | 898,668 |
Accumulated deficit | (1,383,973) | (982,103) |
Total Stockholders' Deficit | (169,643) | (74,773) |
Total Liabilities and Stockholders' Deficit | $ 26,072 | $ 45,806 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares, issued | 90,202,698 | 86,614,766 |
Common stock, shares, outstanding | 90,202,698 | 86,614,766 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Gross Revenues | ||
Payment processing income | $ 135,027 | $ 137,620 |
Service fee income | 8,315 | 4,016 |
Total Gross Revenues | 143,342 | 141,636 |
Residuals and commissions | 25,027 | 28,970 |
Net Revenues | 118,315 | 112,666 |
Operating Expenses | ||
Payroll expenses | 151,993 | 166,659 |
Stock based compensation | 154,433 | |
Sales and marketing | 59,459 | 122,970 |
Sales and marketing – related party | 81,079 | |
Professional fees | 107,932 | 84,019 |
Software development costs | 18,607 | |
IT and software | 43,009 | 54,230 |
Depreciation expense | 4,474 | 2,378 |
Corporate and office | 66,302 | 58,170 |
Total Operating Expenses | 514,248 | 661,466 |
Operating Loss | (395,933) | (548,800) |
Other Income and Expense | ||
Other income | 2,665 | 68 |
Interest expense | (8,602) | (2,567) |
Total Other Income and Expense | (5,937) | (2,499) |
Loss before income tax | (401,870) | (551,299) |
Income taxes | ||
Net Loss | $ (401,870) | $ (551,299) |
Basic and Diluted | ||
Loss Per Share | $ 0 | $ (0.01) |
Weighted average shares outstanding | 88,767,909 | 77,927,711 |
Pro Forma Information (Unaudited) [Member] | ||
Operating Expenses | ||
Operating Loss | $ (551,299) | |
Other Income and Expense | ||
Income taxes | 187,400 | |
Net Loss | $ (363,899) | |
Basic and Diluted | ||
Loss Per Share | $ 0 |
Statements of Stockholders' Equ
Statements of Stockholders' Equity (Deficit) - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2015 | $ 74,390 | $ 352,650 | $ (430,804) | $ (3,764) |
Balance, shares at Dec. 31, 2015 | 74,390,337 | |||
Issuance of common stock in Digital Donations, Inc. | $ 2,882 | 202,118 | 205,000 | |
Issuance of common stock in Digital Donations, Inc., shares | 2,882,442 | |||
Non-employee stock compensation | $ 272 | 154,161 | 154,433 | |
Non-employee stock compensation, shares | 2,162,021 | |||
Recapitalization of Digital Donations Technologies, Inc. | $ (69,051) | 69,908 | 857 | |
Recapitalization of Digital Donations Technologies, Inc., shares | 5,500,000 | |||
Issuance of common stock in Digital Donations Technologies, Inc. | $ 168 | 119,832 | 120,000 | |
Issuance of common stock in Digital Donations Technologies, Inc., shares | 1,679,966 | |||
Net Loss | (551,299) | (551,299) | ||
Balance at Dec. 31, 2016 | $ 8,661 | 898,669 | (982,103) | (74,773) |
Balance, shares at Dec. 31, 2016 | 86,614,766 | |||
Issuance of common stock in Digital Donations Technologies, Inc. | $ 359 | 306,641 | 307,000 | |
Issuance of common stock in Digital Donations Technologies, Inc., shares | 3,587,932 | |||
Net Loss | (401,870) | (401,870) | ||
Balance at Dec. 31, 2017 | $ 9,020 | $ 1,205,310 | $ (1,383,973) | $ (169,643) |
Balance, shares at Dec. 31, 2017 | 90,202,698 |
Statement of Cash Flows
Statement of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Activities | ||
Net loss | $ (401,870) | $ (551,299) |
Adjustments to reconcile net loss to Net cash used in operating activities | ||
Depreciation | 4,474 | 2,378 |
Stock based compensation | 154,433 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (625) | (11,337) |
Accounts payable and accrued expenses | 69,327 | 45,493 |
Net Cash Used in Operating Activities | (328,694) | (360,332) |
Investing Activities | ||
Purchases of equipment | (1,174) | (13,228) |
(Advances to)/Repayments from Related Parties, net | (5,900) | |
Net Cash Used in Investing Activities | (1,174) | (19,128) |
Financing Activities | ||
Proceeds from short term borrowings | 10,000 | 30,000 |
Repayment of short term debt | (4,190) | |
Proceeds from sale of common stock | 307,000 | 325,000 |
Net Cash Provided by Financing Activities | 312,810 | 355,000 |
Net Increase (Decrease) in Cash and Cash Equivalents | (17,058) | (24,460) |
Cash and Cash Equivalents, beginning of year | 23,620 | 48,080 |
Cash and Cash Equivalents, end of year | 6,562 | 23,620 |
Cash paid for interest | 2,302 | |
Cash paid for income taxes |
Nature of Operations, Going Con
Nature of Operations, Going Concern and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Nature of Operations, Going Concern and Summary of Significant Accounting Policies | NOTE 1 - NATURE OF OPERATIONS, GOING CONCERN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS Digital Donations Technologies, Inc. (formerly Fishing Ridge Acquisition Corporation) (“DDTI”) was incorporated on May 21, 2015 under the laws of the state of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company intends to develop and distribute creative and innovative fund raising technology and provide payment processing solutions connecting charities and foundations with the consumer and corporate America. The Company anticipates developing fund raising solutions that will expand and enhance the way charities and foundations reach donors. The Company perceives that through the process of integrating a donation request as part of a financial transaction, retailers, e-tailers, ATM owners and service providers will have the ability to create new, or enhance existing, cause marketing programs. RECAPITALIZATION On October 17, 2016, DDTI entered into a merger with Digital Donations, Inc. (the “Company” and post-merger, the “Company” represents the combined entity), which has resulted in the combination of the Company with DDTI through the issuance of 79,084,807 shares of DDTI common stock to the shareholders of the Company on a one-for-one basis in exchange for 100% of the then issued and outstanding shares of the Company’s common stock, and at which time the Company became a wholly owned subsidiary of DDTI. The Company has accounted for this merger as a recapitalization, as DDTI at the time of the merger was a public shell company, with only nominal assets and no operations of its own. The financial statements presented herein are that of Digital Donations, Inc. from its inception through the date of the merger, at which point the net assets of DDTI were included and the equity section restated to that of the DDTI. From the date of the merger and thereafter, these financial statements represent the financial position and results of operations of the consolidated entity. BASIS OF PRESENTATION AND CONSOLIDATION The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompany consolidated financial statements include the accounts of Digital Donations Technologies, Inc. and its wholly owned subsidiary, Digital Donations, Inc. All material intercompany accounts, transactions and profits have been eliminated in consolidation. GOING CONCERN The Company has incurred operating losses since inception as it has sought to develop alternative payments and fundraising solutions to its target market. As of December 31, 2017, the Company had an accumulated deficit of $1,383,973 and a cash balance of $6,562. During the year ended December 31, 2017, the Company incurred a net loss of $401,870, negative cash flows from operating activities of $328,694 and had shareholders’ equity (deficit) of $(169,643). These factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to fund future operations through additional financing from investors and/or lenders until such time as the Company can reach profitability. The Company’s plan to reach profitability includes, but is not limited to, increasing its marketing efforts to sell its existing products, identifying strategic partners to expand the distribution of its existing products and to complete its products currently under development. In 2018 through the date of this filing, the Company had raised $44,500 in private placement subscriptions and convertible note issuances (see Note 7). However, there can be no assurance that the Company will be successful in raising the additional funds needed. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. REVENUE RECOGNITION The Company recognizes revenue from the sale of products and services in accordance with ASC 605,“Revenue Recognition.” The Company recognizes revenue from services only when all of the following criteria have been met: i) Persuasive evidence for an agreement exists; ii) Service has been provided; iii) The fee is fixed or determinable; and, iv) Collection is reasonably assured. In 2016, the Company’s revenue was predominantly derived from the brokerage of customer accounts to transaction processors in the credit card point of sale and ATM industry. Because of this, the Company does not report revenue gross with costs associated with those revenues in its operating expenses, but combines those costs and reports its revenue net of those costs, because the Company does not actually perform the services underlying the processing of those transactions. USE OF ESTIMATES The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions that the Company may undertake in the future, actual results could differ from those estimates. CASH AND CASH EQUIVALENTS Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. CONCENTRATION OF CREDIT RISK Financial instruments, which potentially subject the Company to concentrations of credit risks, consist principally of cash and trade accounts receivable. The Company’s cash and cash equivalents are held at one U.S. commercial bank. The Company has not experienced any losses to date related to its cash and cash equivalents. CONCENTRATION OF FUNDING SOURCES The Company’s primary source of funding has been funds received from private placement of shares of its common stock to investors. The Company has one primary investor who has contributed approximately $243,500 and $325,000 in the years ended December 31, 2017 and 2016, respectively. REVENUE CONCENTRATION In the years ended December 31, 2017 and 2016, the Company had two customers that accounted for approximately 90% and 91% of its gross revenues, respectively. PROPERTY AND EQUIPMENT Property and equipment are recorded at cost. Depreciation is generally computed using the straight-line method over the estimated useful lives of the related assets. As of December 31, 2017 and 2016, our assets lives are three to five years for office equipment, including POS terminals. Maintenance, repairs and minor renewals are expensed as incurred; improvements are capitalized. On a continuing basis, the Company reviews the carrying value of property and equipment for impairment. If events or changes in circumstances were to indicate that an asset carrying value may not be recoverable, a write-down of the asset would be recorded through a charge to operations. Depreciation expense for the years ended December 2017 and 2016 was $4,474 and $2,378, respectively. SHARE BASED COMPENSATION The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, “Equity – Based Payments to Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date. INCOME TAXES From its inception through the date of the merger, Digital Donations, Inc. was taxed as an S Corporation under the Internal Revenue Code of the United States. As such, its income or losses were passed through to its shareholders and therefore the benefits of losses or the liability for any taxes due from income was the responsibility of the Company’s shareholders and not the Company. Upon completion of the merger, the status of the Company automatically changed to that of a C Corporation and thus from that day forward, the Company is responsible for all tax liabilities incurred or benefits obtained. Under ASC 740, “Income Taxes,” deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2017 and 2016, respectively, 100% of the net deferred tax assets recorded were fully allowed for due to the uncertainty of the realization of net operating loss or carry forward prior to expiration. LOSS PER COMMON SHARE Basic loss per common share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. As of December 31, 2017 and 2016, there were no outstanding dilutive securities. ADVERTISING AND PROMOTIONAL COSTS Advertising and promotional costs are expensed as incurred. Advertising and promotional costs totaled $127,291 and $97,941 for the years ended December 31, 2017 and 2016, respectively. SOFTWARE DEVELOPMENT COSTS Software development costs are expensed as incurred until a product’s technological feasibility has been established. Any cost incurred after establishment of the products technological feasibility until its general release are capitalized if the Company obtains the committed funding necessary to see the project through completion. As such, there are no capitalized software development costs on the accompanying balance sheets, as the Company has not yet received the committed funding necessary to see its software projections through to their completion. FAIR VALUE OF FINANCIAL INSTRUMENTS ASC Topic 820 , Fair Value Measurements and Disclosures ● Level 1: ● Level 2: ● Level 3: The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents, accounts payable and note payable approximate their fair values at December 31, 2016 and 2015 due to their short-term nature and management’s belief that their carrying amounts approximate the amount for which the assets could be sold or the liabilities could be settled. PRO FORMA FINANCIAL INFORMATION As discussed above, the Company filed to be taxed as a Subchapter S Company with the Internal Revenue Service. Upon closing of the merger, its tax status changed to that of a Subchapter C corporation. The change resulted in the post-merger company becoming obligated for the tax liabilities for the portion of income generated subsequent to the date of the merger, whereas the previous income and associated liability was passed through to the Company shareholders. Pursuant to Securities and Exchange Commission Staff Accounting Bulletin Number 1B.2 “Pro Forma Financial Statements and Earnings per Share” (“SAB 1B.2”), pro forma information on the face of the income statement has been presented which reflects the pro forma impact as if the Company had changed its tax status and capital structure at the inception of the Company. This presentation reflects the Company generating current deferred tax asset for losses during the period. RECENT ACCOUNTING PRONOUNCEMENTS In April 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) RECLASSIFICATIONS Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported consolidated net income (loss). |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 2. INCOME TAXES There is no current or deferred income tax expense or benefit for the years ended December 31, 2017 or 2016. The Company records deferred income taxes under applicable tax laws using rates for the years in which the taxes are expected to be paid. Deferred income taxes reflect the tax consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting amounts. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets may not be realized. The Company did not record an income tax provision for all periods presented due to its expected benefits from net operating losses being completely offset by valuation allowances. The items causing this difference for the periods ended December 31, 2017 and 2016 are as follows. 2017 2016 Tax benefit at U.S. and state statutory rates $ 136,600 $ 187,400 less: portion of income flowing directly to former shareholders of Digital Donations, Inc. (176,200 ) Non-deductible expenses (12,400 ) less: valuation allowance (124,200 ) (11,200 ) Tax benefit, net $ — $ — At December 31, 2017, the Company has estimated net operating loss carryforwards for federal income tax purposes of approximately $398,400. The actual amount of net operating losses will be determined at the time the Company’s tax returns are filed. The Company made no payments for income taxes for the years ended December 31, 2017 and 2016. Deferred tax assets were comprised of the following as of December 31, 2017 and 2016: 2017 2016 Current deferred tax asset $ - $ - NOL carryforward 135,400 11,200 Long-term deferred tax asset 135,400 11,200 Total deferred tax asset 135,400 11,200 Less valuation allowance (135,400 ) (11,200 ) Net deferred tax asset $ - $ - Neither the Company nor its subsidiary have filed tax returns for any of the years ended December 31, 2015, 2016 or 2017. The Company expects to file all of its past due returns for 2015 and 2016, and the 2017 returns, which are under extension, in 2018. No taxes, penalties or interest will be due because of the losses incurred from inception, or because the subsidiary is considered a ‘pass through’ entity as noted above. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 3. NOTES PAYABLE In August, 2016, the Company entered into a note agreement with an investor and received gross proceeds of $25,000. The note bears interest at the rate of 24% per annum, matures 180 days after issuance and is unsecured. In October, 2016, the Company entered into a second note agreement with the same investor and received gross proceeds of $5,000. The note bears interest at the rate of 24% per annum, matures 180 days after issuance and is unsecured. In 2017, the Company and the holder entered into a verbal agreement such that maturity was extended until such time as the Company files an S-1 registration statement that is declared effective. In 2018, the Company and the holder entered into another verbal agreement such that the notes are now payable on demand. In October, 2017, the Company entered into a note agreement with a third party lender and received gross proceeds of $10,000. The note bears interest at a rate of 69.36% per annum, matures six months after issuance and is secured by all tangible assets of the Company and the personal guarantee of one officer and director. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | NOTE 4. STOCKHOLDERS’ EQUITY (DEFICIT) At December 31, 2017, the Company has authorized 400,000,000 shares of capital stock, consisting of 100,000,000 shares (par value of $0.001 per share) of preferred stock and 300,000,000 shares (par value of $0.0001 per share) of common stock. The total number of shares of common stock issued, issuable and outstanding at December 31, 2017 and 2016 was 90,202,698 and 86,614,766, respectively. No shares of preferred stock have been issued as of December 31, 2017. COMMON STOCK In 2016, the Company sold stock to one investor at $0.0714 per share for cash proceeds of $325,000. As of December 31, 2016, the Company had issued 4,199,916 shares and was obligated to issue an additional 349,993 shares to the investor. Those additional shares were issued in 2017. In 2017, the Company sold 3,457,932 shares of its common stock to two investors at $0.0714 per share for total cash proceeds of $247,000. Additionally, in 2017, the Company sold 20,000 shares of its common stock to one investor at $0.25 per share for total cash proceeds of $5,000, and 110,000 shares of its common stock to three separate investors at $0.50 per share for total cash proceeds of $55,000. Total cash proceeds from the sale of stock in 2017 was $307,000. The issuances described above were offered to accredited investors as defined in Rule 501 and subject to exemptions provided under Rule 506 of Regulation D of the Securities and Exchange Acts. SHARE BASED PAYMENTS In 2016, the Company issued a total of 2,162,021 shares as compensation to non-employees for consulting services performed. The Company recorded compensation expense at a share price based on the 2016 private placement raises noted above of $0.0714 per share. Total compensation expense recorded in 2016 was $154,433. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 5. RELATED PARTY TRANSACTIONS During 2014 and 2015, Digital Donations, Inc. advanced funds on a net basis to a company in which the two founders of the Digital Donations, Inc. are also majority owners. As of December 31, 2014, the Company had advanced, net, approximately $6,400. As of December 31, 2015, the Company further advanced on a net basis approximately $23,600. The related entity during this period was under significant liquidity pressures and in 2016, the owners of the related entity decided to begin winding down the entity. Because of this, the Company fully impaired the net advances as of December 31, 2015 and 2014, which resulted in impairment expenses of the same amount noted above being recorded within the general and administrative expense line item on the statement of operations for the years ended December 31, 2015 and 2014. In 2016, the entity was further advanced funds, but was able to repay all of the 2016 advances plus an additional $9,245 which the Company has shown as a reduction of its general and administrative expense. Prior to the incorporation of the Company, the founders created and purchased the logo, trade name and trade mark that the Company now uses from the related entity noted above. However, because of serious financial issues suffered by the related entity, the only other product developed outside of the creation and purchase of the logo, trade name and trade mark, was the development of a Point of Sale technology and product that ultimately was discontinued in 2014 since the standard that it was based on became obsolete, and this technology and product will not be used by the Company nor will it be acquired by the Company. In 2018 the Company expects to enter into a transaction with the related entity to acquire the logo, trade name and trade mark and expects to issue its equity in consideration for those items due to the current liquidity situation of the Company. Because the intangible items will be purchased from a related entity, the Company will record the intangible assets purchased at the historical cost incurred by the related entity to acquire those intangibles as the purchase price. During 2017 the Company paid an entity owned by the Executive Vice President $81,079 in sales and marketing expenses which is shown on the statement of operations as being paid to a related party. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 6. COMMITMENTS AND CONTINGENCIES In January 2016, the Company took over the office lease from a related party. That lease ended on January 31, 2016. During the remainder of 2016, the Company occupied that office under a month to month rental under the terms of the old related party lease. On February 1, 2017, the Company entered into its own two year lease with the landlord for the existing space. Total rent expense incurred in 2017 and 2016 was approximately $35,500 and $39,800, respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 7. SUBSEQUENT EVENTS From January 1 through April 4, 2018, the Company sold to 2 shareholders an aggregate of 482,990 of its common shares for a total of $34,500. As of the date of this filing, 482,990 shares of that aggregate amount were issuable. On January 5, 2018, the Company entered into a note agreement with a third party and received gross proceeds of $10,000. The note bears interest at a rate of 1.5% per month, matures six months after issuance and is unsecured. The note and any accrued interest is convertible into common stock of the Company at $0.50 per share. |
Nature of Operations, Going C14
Nature of Operations, Going Concern and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Nature of Operations | NATURE OF OPERATIONS Digital Donations Technologies, Inc. (formerly Fishing Ridge Acquisition Corporation) (“DDTI”) was incorporated on May 21, 2015 under the laws of the state of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company intends to develop and distribute creative and innovative fund raising technology and provide payment processing solutions connecting charities and foundations with the consumer and corporate America. The Company anticipates developing fund raising solutions that will expand and enhance the way charities and foundations reach donors. The Company perceives that through the process of integrating a donation request as part of a financial transaction, retailers, e-tailers, ATM owners and service providers will have the ability to create new, or enhance existing, cause marketing programs. |
Recapitalization | RECAPITALIZATION On October 17, 2016, DDTI entered into a merger with Digital Donations, Inc. (the “Company” and post-merger, the “Company” represents the combined entity), which has resulted in the combination of the Company with DDTI through the issuance of 79,084,807 shares of DDTI common stock to the shareholders of the Company on a one-for-one basis in exchange for 100% of the then issued and outstanding shares of the Company’s common stock, and at which time the Company became a wholly owned subsidiary of DDTI. The Company has accounted for this merger as a recapitalization, as DDTI at the time of the merger was a public shell company, with only nominal assets and no operations of its own. The financial statements presented herein are that of Digital Donations, Inc. from its inception through the date of the merger, at which point the net assets of DDTI were included and the equity section restated to that of the DDTI. From the date of the merger and thereafter, these financial statements represent the financial position and results of operations of the consolidated entity. |
Basis of Presentation and Consolidation | BASIS OF PRESENTATION AND CONSOLIDATION The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompany consolidated financial statements include the accounts of Digital Donations Technologies, Inc. and its wholly owned subsidiary, Digital Donations, Inc. All material intercompany accounts, transactions and profits have been eliminated in consolidation. |
Going Concern | GOING CONCERN The Company has incurred operating losses since inception as it has sought to develop alternative payments and fundraising solutions to its target market. As of December 31, 2017, the Company had an accumulated deficit of $1,383,973 and a cash balance of $6,562. During the year ended December 31, 2017, the Company incurred a net loss of $401,870, negative cash flows from operating activities of $328,694 and had shareholders’ equity (deficit) of $(169,643). These factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to fund future operations through additional financing from investors and/or lenders until such time as the Company can reach profitability. The Company’s plan to reach profitability includes, but is not limited to, increasing its marketing efforts to sell its existing products, identifying strategic partners to expand the distribution of its existing products and to complete its products currently under development. In 2018 through the date of this filing, the Company had raised $44,500 in private placement subscriptions and convertible note issuances (see Note 7). However, there can be no assurance that the Company will be successful in raising the additional funds needed. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Revenue Recognition | REVENUE RECOGNITION The Company recognizes revenue from the sale of products and services in accordance with ASC 605,“Revenue Recognition.” The Company recognizes revenue from services only when all of the following criteria have been met: i) Persuasive evidence for an agreement exists; ii) Service has been provided; iii) The fee is fixed or determinable; and, iv) Collection is reasonably assured. In 2016, the Company’s revenue was predominantly derived from the brokerage of customer accounts to transaction processors in the credit card point of sale and ATM industry. Because of this, the Company does not report revenue gross with costs associated with those revenues in its operating expenses, but combines those costs and reports its revenue net of those costs, because the Company does not actually perform the services underlying the processing of those transactions. |
Use of Estimates | USE OF ESTIMATES The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions that the Company may undertake in the future, actual results could differ from those estimates. |
Cash and Cash Equivalents | CASH AND CASH EQUIVALENTS Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. |
Concentration of Credit Risk | CONCENTRATION OF CREDIT RISK Financial instruments, which potentially subject the Company to concentrations of credit risks, consist principally of cash and trade accounts receivable. The Company’s cash and cash equivalents are held at one U.S. commercial bank. The Company has not experienced any losses to date related to its cash and cash equivalents. |
Concentration of Funding Source | CONCENTRATION OF FUNDING SOURCES The Company’s primary source of funding has been funds received from private placement of shares of its common stock to investors. The Company has one primary investor who has contributed approximately $243,500 and $325,000 in the years ended December 31, 2017 and 2016, respectively. |
Revenue Concentration | REVENUE CONCENTRATION In the years ended December 31, 2017 and 2016, the Company had two customers that accounted for approximately 90% and 91% of its gross revenues, respectively. |
Property and Equipment | PROPERTY AND EQUIPMENT Property and equipment are recorded at cost. Depreciation is generally computed using the straight-line method over the estimated useful lives of the related assets. As of December 31, 2017 and 2016, our assets lives are three to five years for office equipment, including POS terminals. Maintenance, repairs and minor renewals are expensed as incurred; improvements are capitalized. On a continuing basis, the Company reviews the carrying value of property and equipment for impairment. If events or changes in circumstances were to indicate that an asset carrying value may not be recoverable, a write-down of the asset would be recorded through a charge to operations. Depreciation expense for the years ended December 2017 and 2016 was $4,474 and $2,378, respectively. |
Share Based Compensation | SHARE BASED COMPENSATION The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, “Equity – Based Payments to Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date. |
Income Taxes | INCOME TAXES From its inception through the date of the merger, Digital Donations, Inc. was taxed as an S Corporation under the Internal Revenue Code of the United States. As such, its income or losses were passed through to its shareholders and therefore the benefits of losses or the liability for any taxes due from income was the responsibility of the Company’s shareholders and not the Company. Upon completion of the merger, the status of the Company automatically changed to that of a C Corporation and thus from that day forward, the Company is responsible for all tax liabilities incurred or benefits obtained. Under ASC 740, “Income Taxes,” deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2017 and 2016, respectively, 100% of the net deferred tax assets recorded were fully allowed for due to the uncertainty of the realization of net operating loss or carry forward prior to expiration. |
Loss Per Common Share | LOSS PER COMMON SHARE Basic loss per common share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. As of December 31, 2017 and 2016, there were no outstanding dilutive securities. |
Advertising and Promotional Costs | ADVERTISING AND PROMOTIONAL COSTS Advertising and promotional costs are expensed as incurred. Advertising and promotional costs totaled $127,291 and $97,941 for the years ended December 31, 2017 and 2016, respectively. |
Software Development Costs | SOFTWARE DEVELOPMENT COSTS Software development costs are expensed as incurred until a product’s technological feasibility has been established. Any cost incurred after establishment of the products technological feasibility until its general release are capitalized if the Company obtains the committed funding necessary to see the project through completion. As such, there are no capitalized software development costs on the accompanying balance sheets, as the Company has not yet received the committed funding necessary to see its software projections through to their completion. |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS ASC Topic 820 , Fair Value Measurements and Disclosures ● Level 1: ● Level 2: ● Level 3: The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents, accounts payable and note payable approximate their fair values at December 31, 2016 and 2015 due to their short-term nature and management’s belief that their carrying amounts approximate the amount for which the assets could be sold or the liabilities could be settled. |
Pro Forma Financial Information | PRO FORMA FINANCIAL INFORMATION As discussed above, the Company filed to be taxed as a Subchapter S Company with the Internal Revenue Service. Upon closing of the merger, its tax status changed to that of a Subchapter C corporation. The change resulted in the post-merger company becoming obligated for the tax liabilities for the portion of income generated subsequent to the date of the merger, whereas the previous income and associated liability was passed through to the Company shareholders. Pursuant to Securities and Exchange Commission Staff Accounting Bulletin Number 1B.2 “Pro Forma Financial Statements and Earnings per Share” (“SAB 1B.2”), pro forma information on the face of the income statement has been presented which reflects the pro forma impact as if the Company had changed its tax status and capital structure at the inception of the Company. This presentation reflects the Company generating current deferred tax asset for losses during the period. |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS In April 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) |
Reclassifications | RECLASSIFICATIONS Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported consolidated net income (loss). |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The items causing this difference for the periods ended December 31, 2017 and 2016 are as follows. 2017 2016 Tax benefit at U.S. and state statutory rates $ 136,600 $ 187,400 less: portion of income flowing directly to former shareholders of Digital Donations, Inc. (176,200 ) Non-deductible expenses (12,400 ) less: valuation allowance (124,200 ) (11,200 ) Tax benefit, net $ — $ — |
Schedule of Deferred Tax Assets | Deferred tax assets were comprised of the following as of December 31, 2017 and 2016: 2017 2016 Current deferred tax asset $ - $ - NOL carryforward 135,400 11,200 Long-term deferred tax asset 135,400 11,200 Total deferred tax asset 135,400 11,200 Less valuation allowance (135,400 ) (11,200 ) Net deferred tax asset $ - $ - |
Nature of Operations, Going C16
Nature of Operations, Going Concern and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Oct. 17, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Number of common stock shares issued | 79,084,807 | |||
Ownership percentage | 100.00% | |||
Accumulated deficit | $ 1,383,973 | $ 982,103 | ||
Cash | 6,562 | 23,620 | $ 48,080 | |
Net loss | 401,870 | 551,299 | ||
Cash flows from operating activities | 328,694 | 360,332 | ||
Shareholders' equity (deficit) | (169,643) | (74,773) | $ (3,764) | |
Depreciation expense | $ 4,474 | $ 2,378 | ||
Deferred tax percentage | 100.00% | 100.00% | ||
Advertising and promotional costs | $ 127,291 | $ 97,941 | ||
Minimum [Member] | ||||
Estimated useful life of property and equipment | 3 years | 3 years | ||
Maximum [Member] | ||||
Estimated useful life of property and equipment | 5 years | 5 years | ||
Two Customers [Member] | ||||
Concentration of revenue percentage | 90.00% | 91.00% | ||
Private Placement [Member] | Primary Investor [Member] | ||||
Proceeds from private placement subscriptions | $ 243,500 | $ 325,000 | ||
2018 [Member] | ||||
Proceeds from private placement subscriptions | $ 44,500 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Current income tax expense or benefit | ||
Deferred income tax expense or benefit | ||
Net operating loss carryforwards | 398,400 | |
Payments for income taxes |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit at U.S. and state statutory rates | $ 136,600 | $ 187,400 |
less: portion of income flowing directly to former shareholders of Digital Donations, Inc. | (176,200) | |
Non-deductible expenses | (12,400) | |
less: valuation allowance | (124,200) | (11,200) |
Tax benefit, net |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Current deferred tax asset | ||
NOL carryforward | 135,400 | 11,200 |
Long-term deferred tax asset | 135,400 | 11,200 |
Total deferred tax asset | 135,400 | 11,200 |
Less valuation allowance | (135,400) | (11,200) |
Net deferred tax asset |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 1 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Aug. 31, 2016 | |
Note Agreement [Member] | Third Party Lender [Member] | |||
Gross proceeds | $ 10,000 | ||
Interest rate | 69.36% | ||
Maturity date | 6 months | ||
Note Agreement [Member] | Investor [Member] | |||
Gross proceeds | $ 25,000 | ||
Interest rate | 24.00% | ||
Maturity date | 180 days | ||
Second Note Agreement [Member] | Investor [Member] | |||
Gross proceeds | $ 5,000 | ||
Interest rate | 24.00% | ||
Maturity date | 180 days |
Stockholder's Deficit (Details
Stockholder's Deficit (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Shares authorized | 400,000,000 | 400,000,000 | |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 | 300,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares, issued | 90,202,698 | 90,202,698 | 86,614,766 |
Common stock, shares, outstanding | 90,202,698 | 90,202,698 | 86,614,766 |
Preferred stock, shares issued | 0 | 0 | 0 |
Proceeds from sale of common stock | $ 307,000 | $ 307,000 | $ 325,000 |
Common Stock [Member] | |||
Share-based compensation, shares | 2,162,021 | ||
Investor [Member] | |||
Number of common stock shares issued | 4,199,916 | ||
Sale of stock, price per share | $ 0.0714 | ||
Sold stock, value | $ 325,000 | ||
Investor [Member] | Additional Shares [Member] | |||
Number of common stock shares issued | 349,993 | ||
Two Investor [Member] | Common Stock [Member] | |||
Number of common stock shares issued | 3,457,932 | ||
Sale of stock, price per share | $ 0.0714 | $ 0.0714 | |
Sold stock, value | $ 247,000 | ||
One Investor [Member] | Common Stock [Member] | |||
Number of common stock shares issued | 20,000 | ||
Sale of stock, price per share | $ 0.25 | 0.25 | |
Sold stock, value | $ 5,000 | ||
Three Separate Investors [Member] | Common Stock [Member] | |||
Number of common stock shares issued | 110,000 | ||
Sale of stock, price per share | $ 0.50 | $ 0.50 | |
Sold stock, value | $ 55,000 | ||
Non-Employees [Member] | |||
Share-based compensation, shares | 2,162,021 | ||
Shares issued, price per share | $ 0.0714 | ||
Share-based compensation | $ 154,433 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Advanced amount on a net basis | $ 23,600 | $ 6,400 | ||
Sales and marketing expenses | $ 59,459 | $ 122,970 | ||
Executive Vice President [Member] | ||||
Sales and marketing expenses | 81,079 | |||
Reduction of General and Administrative Expense [Member] | ||||
Repayment of advances plus additional amount | $ 9,245 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Feb. 01, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | |||
Lease term | 2 years | ||
Rent expense | $ 35,500 | $ 39,800 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] | Jan. 05, 2018USD ($)$ / shares | Apr. 04, 2018USD ($)Shareholdersshares |
Note Agreement [Member] | ||
Interest rate | 1.50% | |
Debt maturity term | 6 months | |
Debt convertible into common stock per share | $ / shares | $ 0.50 | |
Note Agreement [Member] | Third Party [Member] | ||
proceeds from third party | $ | $ 10,000 | |
Two Shareholders [Member] | ||
Number of shareholders | Shareholders | 2 | |
Sold aggregate of common shares | shares | 482,990 | |
Aggregate of common shares, value | $ | $ 34,500 | |
Aggregate shares of amount were issuable | shares | 482,990 |