Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 18, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | nDivision Inc. | |
Entity Central Index Key | 1,659,183 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 39,590,004 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 |
CONDENSED CONSOLDIATED BALANCE
CONDENSED CONSOLDIATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 1,099,931 | $ 127,933 |
Accounts receivable, net | 171,679 | 476,255 |
Prepaid expenses | 160,349 | 66,750 |
Total current assets | 1,431,959 | 670,938 |
Equipment and software licenses - at cost, less accumulated depreciation and amortization | 789,634 | 887,641 |
Intangible asset, less accumulated amortization | 1,012,335 | 0 |
Total assets | 3,233,928 | 1,558,579 |
Current liabilities | ||
Lines of credit | 0 | 92,075 |
Accounts payable and accrued liabilities | 667,337 | 1,083,148 |
Deferred revenue | 1,333 | 0 |
Loan from officer | 0 | 137,000 |
Current portion of long-term debt | 6,355 | 45,496 |
Current portion of finance lease obligations | 504,781 | 504,784 |
Total current liabilities | 1,179,806 | 1,862,503 |
Acquisition note payable | 191,177 | |
Finance lease obligations | 245,920 | 342,726 |
Total long-term liabilities | 437,097 | 342,726 |
Commitments | 0 | 0 |
Stockholder's equity (deficit) | ||
Preferred stock, $0.001 par value, 20,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value, 180,000,000 shares authorized, and 39,590,004 and 27,500,000 shares issued and outstanding, respectively | 39,590 | 27,500 |
Additional paid in capital | 4,562,155 | 1,566,161 |
Accumulated deficit | (2,984,720) | (2,240,311) |
Total stockholders' equity (deficit) | 1,617,025 | (646,650) |
Total Liabilities and Stockholders' Equity (Deficit) | $ 3,233,928 | $ 1,558,579 |
CONDENSED CONSOLDIATED BALANCE3
CONDENSED CONSOLDIATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, par or stated value | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par or stated value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 180,000,000 | 180,000,000 |
Common Stock, shares issued | 39,590,004 | 27,500,000 |
Common Stock, shares outstanding | 39,590,004 | 27,500,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue | ||
Product sales | $ 67,624 | $ 248,861 |
Service revenue | 744,981 | 1,146,998 |
Net revenues | 812,605 | 1,395,859 |
Product costs | 41,460 | 220,643 |
Service costs | 272,629 | 399,451 |
Cost of revenues | 314,089 | 620,094 |
Gross profit | 498,516 | 775,765 |
Operating expenses | ||
Selling, general and administrative expenses | 1,224,810 | 1,002,844 |
Loss from operations | (726,294) | (227,079) |
Other expense | ||
Interest expense | (18,115) | (28,031) |
Other expense | (18,115) | (28,031) |
Net loss before income tax | (744,409) | (255,110) |
Income tax expense | 0 | 0 |
Net loss | $ (744,409) | $ (255,110) |
Basic and diluted loss per share | $ (0.02) | $ (0.01) |
Weighted average shares outstanding - basic and diluted | 30,133,070 | 23,139,904 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at beginning at Dec. 31, 2016 | $ 23,140 | $ 367,665 | $ (432,450) | $ (41,645) |
Balance at beginning (in shares) at Dec. 31, 2016 | 23,139,904 | |||
Common stock issued for modification of stock options | $ 1,482 | 168,627 | 170,109 | |
Common stock issued for modification of stock options (in shares) | 1,482,296 | |||
Common stock issued for services | $ 58 | 17,442 | 17,500 | |
Common stock issued for services (in shares) | 57,857 | |||
Stock compensation expense | 15,247 | 15,247 | ||
Common stock issued for cash | $ 2,820 | 997,180 | 1,000,000 | |
Common stock issued for cash (in shares) | 2,819,943 | |||
Net loss | (1,807,861) | (1,807,861) | ||
Balance at end at Dec. 31, 2017 | $ 27,500 | 1,566,161 | (2,240,311) | (646,650) |
Balance at end (in shares) at Dec. 31, 2017 | 27,500,000 | |||
Adjustement for reverse acquisition | $ 4,400 | (18,285) | $ (13,885) | |
Adjustement for reverse acquisition (in shares) | 4,400,000 | 4,400,000 | ||
Amortization of stock option and warrant expense | 121,923 | $ 121,923 | ||
Common stock issued for services | $ 13 | 4,987 | $ 5,000 | |
Common stock issued for services (in shares) | 13,158 | 13,158 | ||
Warrant issued for acquisition of contracts | 21,158 | $ 21,158 | ||
Common stock issued for cash | $ 7,677 | 2,866,211 | 2,873,888 | |
Common stock issued for cash (in shares) | 7,676,846 | |||
Net loss | (744,409) | (744,409) | ||
Balance at end at Mar. 31, 2018 | $ 39,590 | $ 4,562,155 | $ (2,984,720) | $ 1,617,025 |
Balance at end (in shares) at Mar. 31, 2018 | 39,590,004 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Cash flows from operating activities | |||
Net loss | $ (744,409) | $ (255,110) | $ (1,807,861) |
Adjustments to reconcile net income to net cash (used in) provided by operating activities | |||
Depreciation and amortization | 108,818 | 107,880 | |
Stock based compensation | 121,923 | 23,313 | |
Stock issued for services | 5,000 | 0 | |
Changes in assets and liabilities | |||
Accounts receivable | 304,576 | 322,615 | |
Prepaid expenses | (93,599) | (150,462) | |
Accounts payable and accrued liabilities | (429,696) | (76,746) | |
Other current assets and liabilities, net | 0 | 113,782 | |
Net cash (used in) provided by operating activities | (727,387) | 85,272 | |
Cash flows from investing activities | |||
Acquisition of contracts | (800,000) | 0 | |
Acquisition of equipment and software licenses | (10,811) | 0 | |
Net cash provided by (used in) investing activities | (810,811) | 0 | |
Cash flows from financing activities | |||
Lines of credit, net | (92,075) | (76,910) | |
Proceeds from issuance of common stock, net | 2,873,888 | 0 | |
Loans from officers | 113,285 | ||
Repayments of loans from officers | (135,667) | 0 | |
Repayments of long-term debt | (39,141) | (104,480) | |
Repayment of finance lease obligations | (96,809) | (36,820) | |
Net cash provided by (used in) financing activities | 2,510,196 | (104,925) | |
Net increase (decrease) in cash | 971,998 | (19,653) | |
Cash, beginning of period | 127,933 | 181,700 | 181,700 |
Cash, end of period | 1,099,931 | 162,047 | $ 127,933 |
Supplemental cash flow disclosures | |||
Interest paid | 18,115 | 28,031 | |
Income taxes paid | 0 | 0 | |
Non-cash financing activities | |||
Consideration for the purchase of contracts (warrants and acquisition note) | $ 212,335 | $ 0 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | 1. DESCRIPTION OF BUSINESS nDivision Inc ("nDivision" or the "Company") was incorporated under the laws of the state of Texas. nDivision's registered office is located at 4925 Greenville Avenue, Dallas, Texas 75206. The Company is engaged in multiple lines of business including managed IT services, Microsoft application stack hosting, as well as the sales of computer hardware and related professional services in the information technology industry primarily as a Value Added Reseller ("VAR") and Services Implementation Partner (GeoPartner) for global service providers (GSP). The Company operates in most states of the United States of America. On February 13, 2018, Go2Green Landscaping, Inc., a Nevada corporation (the "Registrant") executed an Agreement and Plan of Merger (the "Merger Agreement") with nDivision Inc, and NDI Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of the Registrant ("Acquisition") whereby Acquisition was merged with and into nDivision (the "Merger") in consideration for Twenty Seven Million Five Hundred Thousand (27,500,000) newly-issued shares of Common Stock of the Company (the "Merger Shares"). As a result of the Merger, nDivision became a wholly-owned subsidiary of the Registrant, and following the consummation of the Merger and giving effect to the issuance of the Merger Shares and the retirement of 10,000,000 shares of the then 14,400,000 shares issued and outstanding of the Registrant by its principal stockholders, the stockholders of nDivision beneficially owns approximately Seventy percent (70%) of the issued and outstanding Common Stock of the Registrant. For accounting purposes, nDivision was deemed to be the accounting acquirer in the transaction and, consequently, the transaction was treated as a recapitalization of the Company. Accordingly, nDivision's assets, liabilities and results of operations are the historical consolidated financial statements of the Company and the Company's assets, liabilities and results of operations are consolidated with nDivision effective as of the date of the Merger. No step-up in basis or intangible assets or goodwill was recorded in this transaction. On February 26, 2018, the Company executed an Asset Purchase Agreement (the "Agreement") with Gamwell Technologies Inc., a Texas corporation ("Gamwell"). Gamwell is engaged in the business of providing managed services, VOIP telephony, security consulting and professional services to its customers. As a result of the Agreement, nDivision acquired various managed services contracts (the "Purchased Contracts") from Gamwell. As consideration for the Purchased Contracts, nDivision paid $800,000 (the "Cash Consideration") to Gamwell. In addition, Gamwell received a promissory note (the "Promissory Note") in an amount that equals fourteen (14) multiplied by the closing monthly recurring revenue from managed services. The note is currently estimated at approximately $191,177 based on the closing monthly recurring revenue. Gamwell also received warrants (the "Warrants") to purchase common stock of the Company equal to one fourth percent (0.25%) of the outstanding stock of the company as of the agreement date. The warrant was valued at approximately $21,158. The consideration for the contracts purchased was approximately $1,012,335. The Cash Consideration, Promissory Note and Warrants shall be defined as the "Purchase Price" and can be adjusted after one year, based on the newly calculated monthly recurring revenue. Since February 13, 2018, the Company has sold approximately 7,677,000 shares of the Registrant's common shares at a price of approximately $0.375 per share for approximately $2,900,000. There were no material fees paid in association with these shares being sold. On April 9, 2018, the parent company Go2Green Landscaping, Inc. changed its name to nDivision Inc. and changed the ticker symbol to NDVN. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company's Form 8-KA filed on April 30, 2018. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts and transactions of the Company and its wholly-owned subsidiary, Vi3 Technologies, Inc. All significant inter-company accounts and transactions are eliminated in consolidation. Liquidity The Company has experienced significant losses and negative cash flows from operations in the past. Management has secured new managed services contracts, implemented a strategy which included cost reduction efforts, as well as identifying strategic acquisitions to improve the overall profitability and cash flows of the Company. During the three months ended March 31, 2018, the Company sold approximately 7,677,000 shares of common stock at a price of approximately $0.375 per share for approximately $2,900,000. The Company believes that the future cash flows from operations and the sale of common stock will provide sufficient liquidity for the next 12 months following the issuance of those financial statements. Use of Estimates Management uses estimates and assumptions in preparing these condensed consolidated financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. Revenue Recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers: Topic 606 which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Topic 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others. Topic 606 also provides guidance on the recognition of costs related to obtaining customer contracts. Topic 606 is effective as of January 1, 2018 using either of two methods: (1) retrospective application of Topic 606 to each prior reporting period presented with the option to elect certain practical expedients as defined within Topic 606 or (2) retrospective application of Topic 606 with the cumulative effect of initially applying Topic 606 recognized at the date of initial application and providing certain additional disclosures as defined per Topic 606. We adopted Topic 606 pursuant to the method (2) and we determined that any cumulative effect for the initial application did not require an adjustment to retained earnings at January 1, 2018. Project based, services revenue is recognized when the professional consulting, maintenance or other ancillary services are provided to the customer. The Company provides recurring services. There are two components to the recurring services; set-up revenues are recognized upon completion of the set-up procedures and the monthly recurring revenue is recognized as services are rendered. The Company is a Value Added Reseller and engages in "drop-shipping" whereby products are transferred directly from the Company's supplier to the customer. Product sales are recognized as revenue upon shipment of the products by the vendor. Shipping and handling costs charged to customers are classified as revenue, and the shipping and handling costs incurred are included in cost of sales. Shipping and handling costs charged to customers are classified as revenue, and the shipping and handling costs incurred are included in cost of sales. The Company provides customers with payment terms of thirty days. Cash and Cash Equivalents For purposes of the condensed consolidated statements of cash flows, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company's cash balances are primarily maintained at two separate banks. Balances are insured by the Federal Deposit Insurance Corporation subject to certain limitations. Accounts Receivable Accounts receivable are stated at the amounts management expects to collect. An allowance for doubtful accounts is recorded, as a charge to bad debt expense, where collection is considered to be doubtful due to credit issues. These allowances together reflect the Company's estimate of potential losses inherent in accounts receivable balances, based on historical loss and known factors impacting its customers. Management has determined that there was no allowance required for the period ended March 31, 2018 and 2017. The Company does not accrue interest on past due receivables. Concentration of Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, are cash and accounts receivable. Cash is maintained with two separate major financial institutions in the United States and may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand, and, therefore, bear minimal risk. Equipment and Software Licenses Equipment and software licenses are stated at cost. Depreciation is calculated using the straight-line method over an estimated useful life of one to ten years. Leasehold improvements are amortized over the shorter of the useful life of the related asset or the period of the lease. Long-Lived Assets The Company reviews the carrying value of its long-lived assets whenever events or changes in circumstances indicate that the carrying values may no longer be appropriate. Recoverability of carrying values is assessed by estimating future net cash flows from the assets. Based on management's evaluations, no impairment charge was deemed necessary at March 31, 2018 and 2017. Impairment assessment inherently involves judgment as to assumptions about expected future cash flows and the impact of market conditions on those assumptions. Future events and changing market conditions may impact management's assumptions as to sales prices, rental rates, costs, holding periods or other factors that may result in changes in the Company's estimates of future cash flows. Although management believes the assumptions used in testing for impairment are reasonable, changes in any one of the assumptions could produce a significantly different result. Fair Value Measurement The Company follows the provisions of the accounting standard which defines fair value, establishes a framework for measuring fair value and enhances fair value measurement disclosure. Under these provisions, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. The fair value of the Company's current assets and current liabilities approximate their carrying values due to their short-term nature. The carrying value of the Company's long-term liabilities represents their fair value based on level 3 inputs. Earnings and Loss per Share Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted loss per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants to common stock. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. There were approximately 8,425,743 and 2,523,456 of common stock equivalents excluded for the three months ended March 31, 2018 and 2017, respectively because their effect is anti-dilutive. Marketing Costs Marketing costs, which are expensed as incurred, totaled approximately $6,575 and $5,000 for the three months ended March 31, 2018 and 2017, respectively. Stock-Based Compensation The Company accounts for stock-based awards to employees in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions, including employee stock options, to be measured and recognized in the financial statements based on a determination of the fair value of the stock options. The grant date fair value is determined using the Black-Scholes-Merton ("Black-Scholes") pricing model. For all employee stock options, the Company recognizes expense over the requisite service period on an accelerated basis over the employee's requisite service period (generally the vesting period of the equity grant). The Company's option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility and expected term. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense. Options awarded to purchase shares of common stock issued to non-employees in exchange for services are accounted for as variable awards in accordance with applicable accounting principles. Such options are valued using the Black-Scholes option pricing model. See Note 9 for the assumptions used to calculate the fair value of stock-based employee and non-employee compensation. Leases Leases of assets where the Company has assumed substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are recognized at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The interest element of the finance leases is accounted for as finance costs and expensed over the lease term using the effective interest rate method. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company has determined the deferred tax assets and liabilities on the basis of the differences between the financial statement and tax basis of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize our deferred tax assets in the future in excess of their net recorded amount, it would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, it recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. As of March 31, 2018, no accrued interest or penalties are included on the related tax liability line in the balance sheet. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | 3. RECENT ACCOUNTING PRONOUNCEMENTS On May 28, 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU replaced most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delayed the effective date of the new standard from January 1, 2017 to January 1, 2018. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. This ASU permits the use of either the retrospective or cumulative effect transition method. The Company has used the retrospective method in the presentation of these condensed consolidated financial statements, however there was no adjustment necessary. In November 2015, the FASB issued authoritative guidance which changes how deferred taxes are classified on a company's balance sheet. The new guidance eliminates the current requirement for companies to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, companies will be required to classify all deferred tax assets and liabilities as noncurrent. The new guidance is effective for annual reporting periods beginning after December 15, 2016. Early adoption is permitted for all entities as of the beginning of an interim or annual reporting period. The guidance may be applied either prospectively, for all deferred tax assets and liabilities, or retrospectively (i.e., by reclassifying the comparative balance sheet). If applied prospectively, entities are required to include a statement that prior periods were not retrospectively adjusted. If applied retrospectively, entities are also required to include quantitative information about the effects of the change on prior periods, except for balance sheet classification requirements related to deferred tax assets and liabilities. The adoption of this guidance had no material effect on the Company as of March 31, 2018. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is permitted. The adoption of this guidance had no material effect on the Company as of March 31, 2018. In February 2016, the FASB issued authoritative guidance which changes financial reporting as it relates to leasing transactions. Under the new guidance, lessees will be required to recognize a lease liability, measured on a discounted basis; and a right-of-use asset, for the lease term. The new guidance is effective for annual and interim periods beginning after December 15, 2018. Early application is permitted for all entities upon issuance. Lessees and lessors must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is in the process of evaluating the impact of adoption of this guidance on its consolidated financial statements. In August 2016, the FASB issued authoritative guidance designed to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows, including: i) contingent consideration payments made after a business combination; ii) proceeds from the settlement of insurance claims; and iii) proceeds from the settlement of corporate-owned life insurance policies. The new guidance is effective for the Company for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted in any interim or annual period. The Company believes the adoption of this guidance will not have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard will be effective for the Company in the first quarter of 2019. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". The update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount. The new rules will be effective for the Company in the first quarter of 2021. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements. No other recent accounting pronouncements were issued by FASB and the SEC that are believed by management to have a material impact on the Company's present or future financial statements. |
EQUIPMENT AND SOFTWARE LICENSES
EQUIPMENT AND SOFTWARE LICENSES | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
EQUIPMENT AND SOFTWARE LICENSES | 4. EQUIPMENT AND SOFTWARE LICENSES Equipment and software licenses consist of the following: March 31, 2018 December 31, 2017 Equipment and software $ 1,130,576 $ 1,119,765 Software licenses 955,408 955,408 3,085,984 2,075,173 Less - Accumulated depreciation and amortization (1,296,350 ) (1,187,532 ) $ 789,634 $ 887,641 Depreciation and Amortization expense for the three months ended March 31, 2018 and 2017 was approximately $108,818 and $107,880, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | 5. INTANGIBLE ASSETS intangible Assets As of March 31, 2018 (In Thousands) Cost Accumulated Amortization Net Book Value Customer Relationships / Service Contracts $ 1,012,335 $ - $ 1,012,335 There was no amortization expense attributable to the amortization of identifiable intangible assets as the assets were not placed in service until after March 31, 2018. Customer relationships are amortized based on the future undiscounted cash flows or straight – line basis over estimated remaining useful lives of five years. Over the next five years and thereafter, annual amortization expense for these finite life intangible assets will total approximately $1,012,335, as follows: remainder of 2018 - $151,913, 2019 - $202,551, 2020 - $202,551, 2021 - $202,551, 2022 - $202,551 and thereafter - $50,218. Long-lived assets, including purchased intangibles subject to amortization, are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company regularly evaluates whether events and circumstances have occurred that indicate possible impairment and relies on a number of factors, including operating results, business plans, economic projections, and anticipated future cash flows. The Company uses an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether the assets are recoverable. |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES March 31, 2018 December 31, 2017 Accounts payable $ 139,302 $ 565,226 Accrued compensation 363,105 314,722 Accrued sales tax 151,205 157,218 Accrued other 13,725 45,982 Total accounts payable and accrued liabilities $ 667,337 $ 1,083,148 |
LINES OF CREDIT
LINES OF CREDIT | 3 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
LINES OF CREDIT | 7. LINES OF CREDIT March 31, 2018 December 31, 2017 The Company obtained a line of credit on April 4, 2014 with an original maturity date of April 4, 2015, an interest rate of 6% and maximum borrowings of $500,000. The line of credit was renewed in 2015 under the same terms, with a maturity date of April 4, 2016, and renewed again in 2016 with a maturity date of April 4, 2018. This line of credit is secured by the accounts receivable of the Company. This obligation was subsequently repaid in 2018, and the line of credit was terminated. $ - $ 92,075 $ - $ 92,075 |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | 8. LONG-TERM DEBT March 31, 2018 December 31, 2017 The Company obtained an $85,670 promissory note with a maturity date of June 30, 2019, an interest rate of 6%, which is repayable in monthly installments of principal and interest of $2,270. The note is unsecured. This obligation was subsequently repaid in 2018. 6,355 45,496 Current portion of debt 6,355 45,496 Long term debt $ - $ - |
FINANCIAL LEASE OBLIGATIONS
FINANCIAL LEASE OBLIGATIONS | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
FINANCIAL LEASE OBLIGATIONS | 9. FINANCIAL LEASE OBLIGATIONS The Company finances certain property and equipment using finance leases. These leases range from one to five years. The finance lease obligations represent the present value of the minimum lease payments, net of imputed interest. The finance lease obligations are secured by the underlying leased assets. Leases are payable in monthly installments ranging from $90 to $15,350 including interest, ranging from 3.6% to 17.8% per annum. Future minimum lease payments, including principal and interest, under the finance leases for subsequent years are as follows: Remainder of 2018 $ 440,639 2019 329,340 2020 40,522 Total 810,501 Less: interest (59,800 ) Present value of net minimum lease payments 750,701 Short term (504,781 ) Long term total $ 245,920 Lease payments for the three months ended March 31, 2018 and 2017 aggregated approximately $155,425 and $152,155, respectively. The finance lease obligations are secured by underlying leased assets with a net book value of approximately $711,657 and $1,101,445 as of March 31, 2018 and 2017, respectively. |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK BASED COMPENSATION | 10. STOCK BASED COMPENSATION The Board of Directors approved the Company's 2018 Equity Incentive Plan (the "2018 Plan"). The purpose of the 2018 Plan is to provide additional incentives to select persons who can make, are making, and continue to make substantial contributions to the growth and success of the Company, to attract and retain the employment and services of such persons, and to encourage and reward such contributions, by providing these individuals with an opportunity to acquire or increase stock ownership in the Company through either the grant of options or restricted stock. The 2018 Plan is administered by the Compensation Committee or such other committee as is appointed by the Board of Directors pursuant to the 2018 Plan (the "Committee"). The Committee has full authority to administer and interpret the provisions of the 2018 Plan including, but not limited to, the authority to make all determinations with regard to the terms and conditions of an award made under the 2018 Plan. The maximum number of shares that may be granted under the 2018 Plan is 8,000,000. This number is subject to adjustment to reflect changes in the capital structure or organization of the Company. The following table reflects the stock options for the three months ended March 31, 2018: A summary of stock option activity is as follows: Number of options outstanding: Beginning of year 752,062 Granted 6,225,743 Exercised, converted - Forfeited / exchanged / modification 752,062 March 31, 2018 6,225,743 Number of options exercisable at end of period - Number of options available for grant at end of period 1,774,257 Weighted average option prices per share: Granted during the period $ 0.38 Exercised during the period - Terminated during the period 0.13 Outstanding at end of the period $ 0.38 Exercisable at end of year - The average fair value of stock options granted was estimated to be $0.19 per share during the period ended March 31, 2018. This estimate was made using the Black-Scholes option pricing model and the following weighted average assumptions: March 31, 2018 Expected option life (years) 6.5 Expected stock price volatility 51 % Expected dividend yield — % Risk-free interest rate 2.00 % Stock-based compensation expense attributable to stock options was $60,143 for the period ended March 31, 2018. As of March 31, 2018, there was approximately $1,148,300 of unrecognized compensation expense related to unvested stock options outstanding, and the weighted average vesting period for those options was 3 years. The Company issued approximately 2,200,000 warrants related to three consulting agreements during the period. The fair value of the warrants granted was approximately $61,780 for the period ended March 31, 2018. The compensation was recognized as stock compensation expense in the current period as the warrants are immediately exercisable, regardless of the service period of the consulting agreements. This estimate was made using the Black-Scholes option pricing model and the following weighted average assumptions: March 31, 2018 Expected option life (years) 1 to 1.5 Expected stock price volatility 51 % Expected dividend yield — % Risk-free interest rate 2.00 % These warrants are fully vested at the time of acceptance and there is no unamortized expense related to these warrants. There are no other warrants outstanding at March 31, 2018. |
COMMON STOCK
COMMON STOCK | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
COMMON STOCK | 11. COMMON STOCK nDivision recorded the issuance of approximately 4,400,000 common shares and the assumed liabilities of approximately $13,885 in connection with the reverse. nDivision issued approximately 13,158 common shares for services provided to the Company during the period ended March 31, 2018. The services provided was valued at approximately $5,000. nDivision issued approximately 7,676,846 shares of common stock and received approximately $2,875,000 with no material fees. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 12. RELATED PARTY TRANSACTIONS To ensure the Company had adequate near-term liquidity, the officers of the Company loaned the Company short-term loans at an interest rate of .05%. At March 31, 2018 and 2017 there was approximately $0 and $137,000, respectively, owed to officers of the Company, other than reimbursable expenses. The above related party transactions are not necessarily indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent parties. |
COMMITMENTS
COMMITMENTS | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | 13. COMMITMENTS The Company leases office and Data Center space. Future minimum lease payments are as follows: 12 months ended March 31, 2019 $ 30,600 2020 23,400 $ 54,000 Lease payments for the three months ended March 31, 2018 and 2017 aggregated approximately $15,919 and $20,339, respectively. |
SIGNIFICANT CUSTOMERS
SIGNIFICANT CUSTOMERS | 3 Months Ended |
Mar. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
SIGNIFICANT CUSTOMERS | 14. SIGNIFICANT CUSTOMERS The Company had significant customers in each of the quarters presented. A significant customer is defined as one that makes up ten-percent or more of total revenues in a particular quarter or ten-percent of outstanding accounts receivable balance as of the year end. Net revenues for the three months ended March 31, 2018 and 2017 include revenues from significant customers as follows: March 31, 2018 2017 Customer A 54% 42% Customer B 15% 25% Accounts receivable balances as of March 31, 2018 and December 31, 2017 from significant customers are as follows: March 31, 2018 December 31, 2017 Customer A 86% 47% Customer B 3% 8% |
SUMMMARY OF SIGNIFICANT ACCOUNT
SUMMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company's Form 8-KA filed on April 30, 2018. |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts and transactions of the Company and its wholly-owned subsidiary, Vi3 Technologies, Inc. All significant inter-company accounts and transactions are eliminated in consolidation. |
Liquidity | Liquidity The Company has experienced significant losses and negative cash flows from operations in the past. Management has secured new managed services contracts, implemented a strategy which included cost reduction efforts, as well as identifying strategic acquisitions to improve the overall profitability and cash flows of the Company. During the three months ended March 31, 2018, the Company sold approximately 7,677,000 shares of common stock at a price of approximately $0.375 per share for approximately $2,900,000. The Company believes that the future cash flows from operations and the sale of common stock will provide sufficient liquidity for the next 12 months following the issuance of those financial statements. |
Use of Estimates | Use of Estimates Management uses estimates and assumptions in preparing these condensed consolidated financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers: Topic 606 which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Topic 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others. Topic 606 also provides guidance on the recognition of costs related to obtaining customer contracts. Topic 606 is effective as of January 1, 2018 using either of two methods: (1) retrospective application of Topic 606 to each prior reporting period presented with the option to elect certain practical expedients as defined within Topic 606 or (2) retrospective application of Topic 606 with the cumulative effect of initially applying Topic 606 recognized at the date of initial application and providing certain additional disclosures as defined per Topic 606. We adopted Topic 606 pursuant to the method (2) and we determined that any cumulative effect for the initial application did not require an adjustment to retained earnings at January 1, 2018. Project based, services revenue is recognized when the professional consulting, maintenance or other ancillary services are provided to the customer. The Company provides recurring services. There are two components to the recurring services; set-up revenues are recognized upon completion of the set-up procedures and the monthly recurring revenue is recognized as services are rendered. The Company is a Value Added Reseller and engages in "drop-shipping" whereby products are transferred directly from the Company's supplier to the customer. Product sales are recognized as revenue upon shipment of the products by the vendor. Shipping and handling costs charged to customers are classified as revenue, and the shipping and handling costs incurred are included in cost of sales. Shipping and handling costs charged to customers are classified as revenue, and the shipping and handling costs incurred are included in cost of sales. The Company provides customers with payment terms of thirty days. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of the condensed consolidated statements of cash flows, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company's cash balances are primarily maintained at two separate banks. Balances are insured by the Federal Deposit Insurance Corporation subject to certain limitations. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at the amounts management expects to collect. An allowance for doubtful accounts is recorded, as a charge to bad debt expense, where collection is considered to be doubtful due to credit issues. These allowances together reflect the Company's estimate of potential losses inherent in accounts receivable balances, based on historical loss and known factors impacting its customers. Management has determined that there was no allowance required for the period ended March 31, 2018 and 2017. The Company does not accrue interest on past due receivables. |
Concentration of Risk | Concentration of Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, are cash and accounts receivable. Cash is maintained with two separate major financial institutions in the United States and may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand, and, therefore, bear minimal risk. |
Equipment and Software Licenses | Equipment and Software Licenses Equipment and software licenses are stated at cost. Depreciation is calculated using the straight-line method over an estimated useful life of one to ten years. Leasehold improvements are amortized over the shorter of the useful life of the related asset or the period of the lease. |
Long-Lived Assets | Long-Lived Assets The Company reviews the carrying value of its long-lived assets whenever events or changes in circumstances indicate that the carrying values may no longer be appropriate. Recoverability of carrying values is assessed by estimating future net cash flows from the assets. Based on management's evaluations, no impairment charge was deemed necessary at March 31, 2018 and 2017. Impairment assessment inherently involves judgment as to assumptions about expected future cash flows and the impact of market conditions on those assumptions. Future events and changing market conditions may impact management's assumptions as to sales prices, rental rates, costs, holding periods or other factors that may result in changes in the Company's estimates of future cash flows. Although management believes the assumptions used in testing for impairment are reasonable, changes in any one of the assumptions could produce a significantly different result. |
Fair Value Measurement | Fair Value Measurement The Company follows the provisions of the accounting standard which defines fair value, establishes a framework for measuring fair value and enhances fair value measurement disclosure. Under these provisions, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. The fair value of the Company's current assets and current liabilities approximate their carrying values due to their short-term nature. The carrying value of the Company's long-term liabilities represents their fair value based on level 3 inputs. |
Earnings and Loss per Share | Earnings and Loss per Share Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted loss per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants to common stock. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. There were approximately 8,425,743 and 10,905,000 of common stock equivalents excluded for the three months ended March 31, 2018 and 2017, respectively because their effect is anti-dilutive. |
Marketing Costs | Marketing Costs Marketing costs, which are expensed as incurred, totaled approximately $6,575 and $5,000 for the three months ended March 31, 2018 and 2017, respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based awards to employees in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions, including employee stock options, to be measured and recognized in the financial statements based on a determination of the fair value of the stock options. The grant date fair value is determined using the Black-Scholes-Merton ("Black-Scholes") pricing model. For all employee stock options, the Company recognizes expense over the requisite service period on an accelerated basis over the employee's requisite service period (generally the vesting period of the equity grant). The Company's option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility and expected term. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense. Options awarded to purchase shares of common stock issued to non-employees in exchange for services are accounted for as variable awards in accordance with applicable accounting principles. Such options are valued using the Black-Scholes option pricing model. See Note 9 for the assumptions used to calculate the fair value of stock-based employee and non-employee compensation. |
Leases | Leases Leases of assets where the Company has assumed substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are recognized at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The interest element of the finance leases is accounted for as finance costs and expensed over the lease term using the effective interest rate method. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company has determined the deferred tax assets and liabilities on the basis of the differences between the financial statement and tax basis of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize our deferred tax assets in the future in excess of their net recorded amount, it would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, it recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. As of March 31, 2018, no accrued interest or penalties are included on the related tax liability line in the balance sheet. |
EQUIPMENT AND SOFTWARE LICENS22
EQUIPMENT AND SOFTWARE LICENSES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Equipment and software licenses | Equipment and software licenses consist of the following: March 31, 2018 December 31, 2017 Equipment and software $ 1,130,576 $ 1,119,765 Software licenses 955,408 955,408 3,085,984 2,075,173 Less - Accumulated depreciation and amortization (1,296,350 ) (1,187,532 ) $ 789,634 $ 887,641 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | As of March 31, 2018 (In Thousands) Cost Accumulated Amortization Net Book Value Customer Relationships / Service Contracts $ 1,012,335 $ - $ 1,012,335 |
ACCOUNTS PAYABLE AND ACCRUED 24
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | March 31, 2018 December 31, 2017 Accounts payable $ 139,302 $ 565,226 Accrued compensation 363,105 314,722 Accrued sales tax 151,205 157,218 Accrued other 13,725 45,982 Total accounts payable and accrued liabilities $ 667,337 $ 1,083,148 |
LINES OF CREDIT (Tables)
LINES OF CREDIT (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
LINES OF CREDIT | March 31, 2018 December 31, 2017 The Company obtained a line of credit on April 4, 2014 with an original maturity date of April 4, 2015, an interest rate of 6% and maximum borrowings of $500,000. The line of credit was renewed in 2015 under the same terms, with a maturity date of April 4, 2016, and renewed again in 2016 with a maturity date of April 4, 2018. This line of credit is secured by the accounts receivable of the Company. This obligation was subsequently repaid in 2018, and the line of credit was terminated. $ - $ 92,075 $ - $ 92,075 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | March 31, 2018 December 31, 2017 The Company obtained an $85,670 promissory note with a maturity date of June 30, 2019, an interest rate of 6%, which is repayable in monthly installments of principal and interest of $2,270. The note is unsecured. This obligation was subsequently repaid in 2018. 6,355 45,496 Current portion of debt 6,355 45,496 Long term debt $ - $ - |
FINANCIAL LEASE OBLIGATIONS (Ta
FINANCIAL LEASE OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Future minimum lease payments | Future minimum lease payments, including principal and interest, under the finance leases for subsequent years are as follows: Year ended 2018 $ 440,639 2019 329,340 2020 40,522 Total 810,501 Less: interest (59,800 ) Present value of net minimum lease payments 750,701 Short term (504,781 ) Long term total $ 245,920 |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of stock option activity | A summary of stock option activity is as follows: Number of options outstanding: Beginning of year 752,062 Granted 6,225,743 Exercised, converted - Forfeited / exchanged / modification 752,062 March 31, 2018 6,225,743 Number of options exercisable at end of period - Number of options available for grant at end of period 1,774,257 Weighted average option prices per share: Granted during the period $ 0.38 Exercised during the period - Terminated during the period 0.13 Outstanding at end of the period $ 0.38 Exercisable at end of year - |
Schedule of Stock Options, Valuation Assumptions | This estimate was made using the Black-Scholes option pricing model and the following weighted average assumptions: March 31, 2018 Expected option life (years) 6.5 Expected stock price volatility 51 % Expected dividend yield — % Risk-free interest rate 2.00 % |
Consulting agreements | |
Schedule of Stock Options, Valuation Assumptions | This estimate was made using the Black-Scholes option pricing model and the following weighted average assumptions: March 31, 2018 Expected option life (years) 1 to 1.5 Expected stock price volatility 51 % Expected dividend yield — % Risk-free interest rate 2.00 % |
COMMITMENTS (Tables)
COMMITMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum lease payments | Future minimum lease payments are as follows: 12 months ended March 31, 2019 $ 30,600 2020 23,400 $ 54,000 |
SIGNIFICANT CUSTOMERS (Tables)
SIGNIFICANT CUSTOMERS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Schedules of Concentration | Net revenues for the three months ended March 31, 2018 and 2017 include revenues from significant customers as follows: March 31, 2018 2017 Customer A 54% 42% Customer B 15% 25% Accounts receivable balances as of March 31, 2018 and December 31, 2017 from significant customers are as follows: March 31, 2018 December 31, 2017 Customer A 86% 47% Customer B 3% 8% |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details Narrative) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | ||
Feb. 26, 2018 | Feb. 13, 2018 | Mar. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Common stock issued | 39,590,004 | 39,590,004 | 27,500,000 | ||
Common stock Outstanding | 39,590,004 | 39,590,004 | 27,500,000 | ||
Value of warrants | $ 21,158 | ||||
Number of common stock sold | 7,677,000 | ||||
Value of common stock sold | $ 2,900,000 | ||||
Stock price | $ 0.375 | $ 0.375 | |||
Go2Green Landscaping | |||||
Number of common stock sold | 7,677,000 | ||||
Value of common stock sold | $ 2,900,000 | ||||
Stock price | $ 0.375 | $ 0.375 | |||
Ticker symbol | NDVN | ||||
Stockholders | |||||
Common stock issued | 14,400,000 | 14,400,000 | |||
Common stock Outstanding | 14,400,000 | 14,400,000 | |||
Ownership Percentage | 70.00% | 70.00% | |||
Merger Agreement | |||||
Common Stock issued | 27,500,000 | ||||
Retirement of common stock | $ 10,000,000 | ||||
Purchased Contracts | Gamwell | |||||
Cash Consideration paid | $ 800,000 | ||||
Estimated cost of note | $ 191,177 | ||||
Warrants percentage received | 0.25% | ||||
Value of warrants | $ 21,158 | ||||
Consideration for contracts purchased | $ 1,012,335 |
SUMMMARY OF SIGNIFICANT ACCOU32
SUMMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Number of common stock sold | 7,677,000 | |
Value of common stock sold | $ 2,900,000 | |
Stock price | $ 0.375 | |
Allowance | $ 0 | $ 0 |
Impairment charge | 0 | 0 |
Marketing costs | 6,575 | $ 5,000 |
Accrued interest or penalties | $ 0 | |
Common Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 8,425,743 | 10,905,000 |
EQUIPMENT AND SOFTWARE LICENS33
EQUIPMENT AND SOFTWARE LICENSES (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment, Gross | $ 3,085,984 | $ 2,075,173 |
Less - Accumulated depreciation and amortization | (1,296,350) | (1,187,532) |
Property, Plant and Equipment, Net | 789,634 | 887,641 |
Equipment and software [Member] | ||
Property, Plant and Equipment, Gross | 1,130,576 | 1,119,765 |
Software License [Member] | ||
Property, Plant and Equipment, Gross | $ 955,408 | $ 955,408 |
EQUIPMENT AND SOFTWARE LICENS34
EQUIPMENT AND SOFTWARE LICENSES (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and Amortization expense | $ 108,818 | $ 107,880 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) | Mar. 31, 2018USD ($) |
Intangible assets net | $ 1,012,335 |
Customer Relationships [Member] | |
Intangible assets gross | 1,012,335 |
Accumulated amortization | 0 |
Intangible assets net | $ 1,012,335 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Amortization expense | $ 0 |
2,018 | 151,913 |
2,019 | 202,551 |
2,020 | 202,551 |
2,021 | 202,551 |
2,022 | 202,551 |
Thereafter | 50,638 |
Total | $ 1,012,335 |
ACCOUNTS PAYABLE AND ACCRUED 37
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 139,302 | $ 565,226 |
Accrued compensation | 363,105 | 314,722 |
Accrued sales tax | 151,205 | 157,218 |
Accrued other | 13,725 | 45,982 |
Total accounts payable and accrued liabilities | $ 667,337 | $ 1,083,148 |
LINES OF CREDIT (Details)
LINES OF CREDIT (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Lines of credit | $ 0 | $ 92,075 |
Maturity date | Apr. 4, 2018 | |
Interest rate | 6.00% | |
maximum borrowings | $ 500,000 | |
Line of Credit [Member] | ||
Lines of credit | $ 0 | $ 92,075 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Current portion of debt | $ 6,355 | $ 45,496 |
Long term debt | 0 | 0 |
Long term debt | ||
Current portion of debt | 6,355 | $ 45,496 |
Promissory note | $ 85,670 | |
Maturity date | Jun. 30, 2019 | |
Interest rate | 6.00% | |
Periodic payments | $ 2,270 |
FINANCIAL LEASE OBLIGATIONS (De
FINANCIAL LEASE OBLIGATIONS (Details) | Mar. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
2,018 | $ 440,639 |
2,019 | 329,340 |
2,020 | 40,522 |
Total | 810,501 |
Less: interest | (59,800) |
Present value of net minimum lease payments | 750,701 |
Short term | (504,781) |
Long term total | $ 245,920 |
FINANCIAL LEASE OBLIGATIONS (41
FINANCIAL LEASE OBLIGATIONS (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Lease payments | $ 155,425 | $ 152,155 | |
Finance lease obligations | 711,657 | $ 1,101,445 | |
Minimum [Member] | |||
Leases Periodic payments | $ 90 | ||
Interest rate | 3.60% | ||
Maximum [Member] | |||
Leases Periodic payments | $ 15,350 | ||
Interest rate | 17.80% |
STOCK BASED COMPENSATION (Detai
STOCK BASED COMPENSATION (Details) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number of options outstanding | |
Beginning of year | 752,062 |
Granted | 6,225,743 |
Exercised, converted | 0 |
Forfeited / exchanged / modification | 752,062 |
Endn of Period | 6,225,743 |
Number of options exercisable at end of period | 0 |
Number of options available for grant at end of period | 1,774,257 |
Weighted average option prices per share | |
Granted during the period | $ / shares | $ 0.38 |
Exercised during the period | $ / shares | 0 |
Terminated during the period | $ / shares | 0.13 |
Outstanding at end of the period | $ / shares | 0.38 |
Exercisable at end of period | $ / shares | $ 0 |
STOCK BASED COMPENSATION (Det43
STOCK BASED COMPENSATION (Details 1) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Expected option life (years) | 6 years 6 months |
Expected stock price volatility | 51.00% |
Expected dividend yield | 0.00% |
Risk-free interest rate | 2.00% |
STOCK BASED COMPENSATION (Det44
STOCK BASED COMPENSATION (Details 2) | 3 Months Ended |
Mar. 31, 2018 | |
Expected option life (years) | 6 years 6 months |
Expected stock price volatility | 51.00% |
Expected dividend yield | 0.00% |
Risk-free interest rate | 2.00% |
Consulting agreements | |
Expected stock price volatility | 51.00% |
Expected dividend yield | 0.00% |
Risk-free interest rate | 2.00% |
Consulting agreements | Minimum [Member] | |
Expected option life (years) | 1 year |
Consulting agreements | Maximum [Member] | |
Expected option life (years) | 1 year 6 months |
STOCK BASED COMPENSATION (Det45
STOCK BASED COMPENSATION (Details Narrative) | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Average fair value of stock options granted | $ / shares | $ 0.19 |
Stock-based compensation expense | $ | $ 60,143 |
Unrecognized compensation expense | $ | $ 1,148,300 |
Weighted average vesting period of options | 3 years |
Consulting agreements | |
Warrants issued | shares | 2,200,000 |
Fair value of warrants granted | $ | $ 61,780 |
Warrants outstanding | shares | 0 |
2018 Equity Incentive Plan | |
Maximum number of shares granted under plan | shares | 8,000,000 |
COMMON STOCK (Details Narrativ
COMMON STOCK (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | ||
Adjustement for reverse acquisition | $ (13,885) | |
Adjustement for reverse acquisition (in shares) | 4,400,000 | |
Common stock issued for services | $ 5,000 | $ 17,500 |
Common stock issued for services (in shares) | 13,158 | |
Common stock issued | $ 2,875,000 | |
Common stock issued (in shares) | 7,676,846 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Related Party Transactions [Abstract] | ||
Loan from officer | $ 0 | $ 137,000 |
Interest rate | 0.05% |
COMMITMENTS (Details)
COMMITMENTS (Details) | Mar. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,019 | $ 30,600 |
2,020 | 23,400 |
Total | $ 54,000 |
COMMITMENTS (Details Narrative)
COMMITMENTS (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Lease payments | $ 15,919 | $ 20,339 |
SIGNIFICANT CUSTOMERS (Details)
SIGNIFICANT CUSTOMERS (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Net Revenue [Member] | Customer A | |||
Concentration percentage | 54.00% | 42.00% | |
Net Revenue [Member] | Customer B | |||
Concentration percentage | 15.00% | 25.00% | |
Accounts receivable [Member] | Customer A | |||
Concentration percentage | 86.00% | 47.00% | |
Accounts receivable [Member] | Customer B | |||
Concentration percentage | 3.00% | 8.00% |