Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Apr. 04, 2019 | Jun. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | TPT GLOBAL TECH, INC. | ||
Entity Central Index Key | 0001661039 | ||
Document Type | 10-K/A | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | true | ||
Amendment Description | For the purpose of filing XBRL. | ||
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? | No | ||
Is Entity Emerging Growth Company? | true | ||
Elected Not To Use the Extended Transition Period | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Public Float | $ 11,311,922 | ||
Entity Common Stock, Shares Outstanding | 136,953,904 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 | ||
Entity Shell Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 31,786 | $ 36,380 |
Accounts receivable, net | 48,922 | 25,385 |
Prepaid expenses and other current assets | 36,111 | 14,059 |
TOTAL CURRENT ASSETS | 116,819 | 75,824 |
NON-CURRENT ASSETS | ||
Property and equipment, net | 3,046,942 | 2,814,067 |
Intangibles, net | 6,671,582 | 5,754,933 |
Goodwill | 924,361 | 70,995 |
Deposits and other assets | 62,013 | 57,469 |
TOTAL NON-CURRENT ASSETS | 10,704,898 | 8,697,464 |
TOTAL ASSETS | 10,821,717 | 8,773,288 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 4,687,652 | 2,401,028 |
Accrued interest on debt | 306,318 | 182,452 |
Current portion of debt - third party | 716,936 | 195,106 |
Current portion of debt - third party, convertible | 10,000 | 0 |
Current portion of debt - related party, net of discount | 9,137,982 | 7,557,590 |
Current portion of debt - related party, convertible | 202,688 | 250,000 |
Customer liability | 338,725 | 338,725 |
Capital leases | 111,704 | 101,347 |
Capital leases - related party | 449,103 | 449,103 |
Accrued interest related to capital leases | 176,457 | 135,217 |
Vehicle leases | 0 | 5,195 |
Deferred revenue | 6,450 | 10,925 |
TOTAL CURRENT LIABILITIES | 16,144,015 | 11,626,688 |
NON-CURRENT LIABILITIES | ||
Debt - third party, net of current portion | 5,000 | 2,819 |
Debt - related party, convertible, net of current portion | 599,200 | 62,000 |
TOTAL NON-CURRENT LIABILITIES | 604,200 | 64,819 |
TOTAL LIABILITIES | 16,748,215 | 11,691,507 |
Commitments and contingencies - See Note 8 | ||
STOCKHOLDERS' DEFICIT | ||
Common stock, $.001 par value, 1,000,000,000 shares authorized, 136,953,904 shares issued and outstanding as of December 31, 2018 and December 31, 2017 | 136,954 | 136,954 |
Subscriptions payable | 168,006 | 25,235 |
Additional paid-in capital | 12,567,881 | 10,341,442 |
Accumulated deficit | (18,802,928) | (13,425,439) |
TOTAL STOCKHOLDERS' DEFICIT | (5,926,498) | (2,918,219) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 10,821,717 | 8,773,288 |
Series A Preferred Stock | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, $.001 par value 100,000,000 shares authorized | 1,000 | 1,000 |
Series B Preferred Stock | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, $.001 par value 100,000,000 shares authorized | 2,589 | 2,589 |
Series C Preferred Stock | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, $.001 par value 100,000,000 shares authorized | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 100,000,000 | 100,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, issued | 136,953,904 | 136,953,904 |
Common stock, outstanding | 136,953,904 | 136,953,904 |
Series A Preferred Stock | ||
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, issued | 1,000,000 | 1,000,000 |
Preferred stock, outstanding | 1,000,000 | 1,000,000 |
Series B Preferred Stock | ||
Preferred stock, authorized | 3,000,000 | 3,000,000 |
Preferred stock, issued | 2,588,693 | 2,588,693 |
Preferred stock, outstanding | 2,588,693 | 2,588,693 |
Series C Preferred Stock | ||
Preferred stock, authorized | 3,000,000 | 3,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
REVENUES: | ||
Total revenues | $ 937,069 | $ 2,115,160 |
COST OF SALES: | ||
Total costs of sales | 1,749,034 | 2,164,269 |
Gross profit (loss) | (811,965) | (49,109) |
EXPENSES: | ||
Sales and marketing | 58,712 | 212,468 |
Professional | 1,695,053 | 592,456 |
Payroll and related | 802,142 | 467,599 |
General and administrative | 802,772 | 700,578 |
Depreciation | 213,823 | 175,492 |
Amortization | 760,350 | 963,843 |
Total expenses | 4,332,852 | 3,112,436 |
OTHER INCOME (EXPENSE) | ||
Impairment of intangible assets | 0 | (471,083) |
Interest expense | (232,672) | (174,773) |
Total other income expenses | (232,672) | (645,856) |
Net loss before income taxes | (5,377,489) | (3,807,401) |
Income taxes | 0 | 0 |
NET LOSS | $ (5,377,489) | $ (3,807,401) |
Loss per common share-basic and diluted | $ (0.04) | $ (0.03) |
Weighted-average common shares outstanding-basic and diluted | 136,953,904 | 136,953,904 |
Products | ||
REVENUES: | ||
Total revenues | $ 119,860 | $ 490,241 |
COST OF SALES: | ||
Total costs of sales | 121,904 | 479,034 |
Services | ||
REVENUES: | ||
Total revenues | 817,209 | 1,624,919 |
COST OF SALES: | ||
Total costs of sales | $ 1,627,130 | $ 1,685,235 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) | Series A Preferred Stock | Series B Preferred Stock | Common Stock | Subscription Payable (Receivable) | Additional Paid-in Capital | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2016 | 1,000,000 | 2,588,693 | 136,953,904 | ||||
Beginning balance, amount at Dec. 31, 2016 | $ 1,000 | $ 2,589 | $ 136,954 | $ 37,500 | $ 9,654,453 | $ (9,618,038) | $ 214,458 |
Issuance of stock options | 9,124 | 9,124 | |||||
Common stock contributed by officer for subscriptions payable | (7,500) | 7,500 | 0 | ||||
Cash received for common stock to be contributed by officer | 5,000 | 65,000 | 70,000 | ||||
Common stock receivable for cancelled acquisition | (3,265) | 3,265 | 0 | ||||
Common stock contributed by officer for pending acquisition | (6,500) | 6,500 | 0 | ||||
Common stock contributed by officer for acquisition | 595,600 | 595,600 | |||||
Net loss | (3,807,401) | (3,807,401) | |||||
Ending balance, shares at Dec. 31, 2017 | 1,000,000 | 2,588,693 | 136,953,904 | ||||
Ending balance, amount at Dec. 31, 2017 | $ 1,000 | $ 2,589 | $ 136,954 | 25,235 | 10,341,442 | (13,425,439) | (2,918,219) |
Common stock contributed by officer for services | 169,271 | 729,252 | 898,523 | ||||
Issuance of stock options | 256,187 | 256,187 | |||||
Conversion of debt for subscription payable | 2,000 | 2,000 | |||||
Cash received for acquisition of common shares | 367,500 | 367,500 | |||||
Common stock contributed by officer for subscriptions payable | (35,000) | 35,000 | 0 | ||||
Common stock contributed by officer for acquisition | 6,500 | 838,500 | 845,000 | ||||
Net loss | (5,377,489) | (5,377,489) | |||||
Ending balance, shares at Dec. 31, 2018 | 1,000,000 | 2,588,693 | 136,953,904 | ||||
Ending balance, amount at Dec. 31, 2018 | $ 1,000 | $ 2,589 | $ 136,954 | $ 168,006 | $ 12,567,881 | $ (18,802,928) | $ (5,926,498) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (5,377,489) | $ (3,807,401) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 213,823 | 175,492 |
Amortization | 760,350 | 963,843 |
Accretion of interest | 29,681 | 0 |
Impairment of intangible assets | 0 | 471,083 |
Bad debt expense | 0 | 38,022 |
Share-based compensation: common stock | 864,079 | 0 |
Stock options | 256,187 | 9,124 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 232,218 | 21,449 |
Prepaid expenses and other assets | 19,805 | 182,332 |
Accounts payable and accrued expenses | 1,482,590 | 1,137,470 |
Increase in customer liability | 0 | 89,375 |
Other liabilities | 602,349 | (31,197) |
Net cash used in operating activities | (916,407) | (750,408) |
Cash flows from investing activities: | ||
Acquisition of property and equipment | (1,336) | 0 |
Net cash received from acquisition | 41,950 | 0 |
Net cash provided by investing activities | 40,614 | 0 |
Cash flows from financing activities: | ||
Proceeds from stock subscriptions | 367,500 | 70,000 |
Proceeds from debt - related party | 574,694 | 637,600 |
Proceeds from debt - third party | 20,000 | 107,635 |
Payments for debt and leases | (76,136) | (111,495) |
Payments on leases | (14,859) | (10,238) |
Net cash provided by financing activities | 871,199 | 693,502 |
Net decrease in cash | (4,594) | (56,906) |
Cash and cash equivalents - beginning of period | 36,380 | 93,286 |
Cash and cash equivalents - end of period | 31,786 | 36,380 |
Supplemental cash flow information: | ||
Cash used for interest expense | 11,292 | 0 |
Cash used for taxes | 0 | 0 |
Non-cash investing and financing activities: | ||
Common stock issued for acquisition of Blue Collar | 845,000 | 0 |
Note Payable issued for acquisition, net of discount | 1,533,217 | 0 |
Stock subscription for conversion of debt | 2,000 | 0 |
Acquisition of intangible assets ViewMe Live for note payable and common stock contributed by officer | 0 | 4,595,600 |
Common stock to be contributed by officer for subscriptions payable | 0 | 7,500 |
Common stock contributed by officer for pending acquisition | 0 | 6,500 |
Common stock receivable for cancelled acquisition | $ 0 | $ 3,265 |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Nature of Operations The Company was originally incorporated in 1988 in the state of Florida. TPT Global, Inc., a Nevada corporation formed in June 2014, merged with Ally Pharma US, Inc., a Florida corporation, (“Ally Pharma”, formerly known as Gold Royalty Corporation) in a “reverse merger” wherein Ally Pharma issued 110,000,000 shares of Common Stock, or 80% ownership, to the owners of TPT Global, Inc. in exchange for all outstanding common stock of TPT Global Inc. and Ally Pharma agreed to change its name to TPT Global Tech, Inc. (jointly referred to as “the Company” or “TPTG”). The following acquisitions have resulted in entities which have been consolidated into TPTG. In 2014 the Company acquired all the assets of K Telecom and Wireless LLC (“K Telecom”) and Global Telecom International LLC (“Global Telecom”). Effective January 31, 2015, TPTG completed its acquisition of 100% of the outstanding stock of Copperhead Digital Holdings, Inc. (“Copperhead Digital”) and Subsidiaries, TruCom, LLC (“TruCom”), Nevada Utilities, Inc. (“Nevada Utilities”) and CityNet Arizona, LLC (“CityNet”). Effective September 30, 2016, the company acquired 100% ownership in San Diego Media Inc. (“SDM”). In October 2017, we entered into agreements to acquire Blue Collar, Inc. (“Blue Collar”) which closed as of September 1, 2018. We are based in San Diego, California, and operate as a Media Content Hub for Domestic and International syndication Technology/Telecommunications company operating on our own proprietary Global Digital Media TV and Telecommunications infrastructure platform and also provide technology solutions to businesses domestically and worldwide. We offer Software as a Service (SaaS), Technology Platform as a Service (PAAS), Cloud-based Unified Communication as a Service (UCaaS) and carrier-grade performance and support for businesses over our private IP MPLS fiber and wireless network in the United States. Our cloud-based UCaaS services allow businesses of any size to enjoy all the latest voice, data, media and collaboration features in today's global technology markets. We also operate as a Master Distributor for Nationwide Mobile Virtual network Operators (MVNO) and Independent Sales Organization (ISO) as a Master Distributor for Pre-Paid Cellphone services, Mobile phones, Cellphone Accessories and Global Roaming Cellphones. In addition, we create media marketing materials and content. Principles of Consolidation Our consolidated financial statements include the accounts of K Telecom and Global Telecom, Copperhead Digital, SDM, Port 2 Port, and Blue Collar. All intercompany accounts and transactions have been eliminated in consolidation. CRITICAL ACCOUNTING POLICIES Revenue Recognition On January 1, 2018, we adopted the new accounting standard ASC 606, Revenue from Contracts with Customers The Company’s revenue generation for the last two years came from the following sources, which sources are explained in detail below. 2018 2017 Copperhead Digital $ 400,763 $ 867,896 K Telecom 119,860 490,241 San Diego Media 169,142 365,506 Blue Collar 219,474 — P2P 25,430 390,137 Other 2,400 1,380 Total Revenue $ 937,069 $ 2,115,160 Copperhead Digital: ISP and Telecom Revenue Copperhead Digital is a regional internet and telecom services provider operating in Arizona under the trade name Trucom. Copperhead Digital operates as a wireless telecommunications Internet Service Provider (“ISP”) facilitating both residential and commercial accounts. Copperhead Digital’s primary business model is subscription based, pre-paid monthly reoccurring revenues, from wireless delivered, high-speed internet connections. In addition, the company resells third-party satellite and DSL internet and IP telephony services. Revenue generated from sales of telecommunications services is recognized as the transaction with the customer is considered closed and the customer receives and accepts the services that were the result of the transaction. Due date is detailed on monthly invoices distributed to customer. Services billed monthly in advance are deferred to the proper period as needed. Certain of our products require specialized installation and equipment. For telecom products that include installation, if the installation meets the criteria to be considered a separate element, product revenue is recognized upon delivery, and installation revenue is recognized when the installation is complete. The Installation Technician collects the signed quote containing terms and conditions when installing the site equipment at customer premises. Revenue for installation services and equipment is billed separately from recurring ISP and telecom services, and is recognized when equipment is delivered and installation is completed. Revenue from ISP and telecom services is recognized monthly over the contractual period, or as services are rendered and accepted by the customer. The overwhelming majority of our revenue continues to be recognized when transactions occur. Since installation fees are generally small relative to the size of the overall contract and because most contracts are for a year or less, the impact of not recognizing installation fees over the contract is immaterial. K Telecom: Prepaid Phones and SIM Cards Revenue K Telecom generates revenue from reselling prepaid phones, SIM cards, and rechargeable minute traffic for prepaid phones to its customers (primarily retail outlets). Product sales occur at the customer’s locations, at which time delivery occurs and cash or check payment is received. The Company recognizes the revenue when they receive payment at the time of delivery. SDM: Ecommerce, Email Marketing and Web Design Services SDM generates revenue by providing ecommerce, email marketing and web design solutions to small and large commercial businesses, complete with monthly software support, updates and maintenance. Services are billed monthly. Platform infrastructure support is a prepaid service billed in monthly recurring increments. The services are billed a month in advance and due prior to services being rendered. The revenue is deferred when invoiced and booked in the month the service is provided. Software support services (including software upgrades) are billed in real time, on the first of the month. Web design service revenues are recognized upon completion of specific projects. Revenue is booked in the month the services are rendered and payments are due on the final day of the month. Blue Collar: Media Production Services Blue Collar creates original live action and animated content productions, and has produced hundreds of hours of material for the television, theatrical, home entertainment and new media markets. Blue Collar designs branding and marketing campaigns and has had agreements with some of the world’s largest companies including PepsiCo, Intel, HP, WalMart and many other Fortune 500 companies. Additionally, they create motion picture, television and home entertainment marketing campaigns for studios including Sony, DreamWorks, Twentieth Century Fox, Universal Studios, Paramount Studios, and Warner Brothers. With regard to revenue recognition, Blue Collar receives an agreement from each client to perform defined work. Some agreements are written, some are verbal. Work may include creation of marketing materials and/or content creation. Some work may be short term and take weeks to create and some work may be longer and take months to create. There are instances where customer agreements segregate identifiable obligations (like filming on site vs. film editing and final production) with separate transaction pricing. The performance obligation is generally satisfied upon delivery of such film or production products, at which time revenue is recognized. P2P Asset Activity: Telecom Revenue Port 2 Port Communications (P2P) is a U.S. domestic minutes provider that sells wholesale long distance domestic telecom minutes to other domestic U.S. carriers. A service is defined as wholesale telecom minute based on a per-minute and per-destination rate basis. A series of services for P2P would be substantially the same and would include a pattern of transfers of services to a customer on a per-minute flat rate basis for all destinations in a specified geographic. Revenue generated from sales of minute services are recognized when weekly invoices are generated and distributed. Share-based Compensation The Company is required to measure and recognize compensation expense for all share-based payment awards (including stock options) made to employees and directors based on estimated fair value. Compensation expense for equity-classified awards is measured at the grant date based on the fair value of the award and is recognized as an expense in earnings over the requisite service period. The Company records compensation expense related to non-employees that are awarded stock in conjunction with selling goods or services and recognizes compensation expenses over the vesting period of such awards. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to 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 year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in our income tax provision in the period of enactment. We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversal of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations, including taxable income in carryback periods. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce our income tax provision. We account for uncertain tax positions using a “more-likely-than-not” recognition threshold. We evaluate uncertain tax positions on a quarterly basis and consider various factors, including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. It is our policy to record costs associated with interest and penalties related to tax in the selling, general and administrative line of the consolidated statements of operations. Cash and Cash Equivalents The company considers all investments with a maturity date of three months or less when purchased to be cash equivalents. There are no cash equivalents as of December 31, 2018 and 2017. Accounts Receivable We establish an allowance for potential uncollectible accounts receivable. All accounts receivable 60 days past due are considered uncollectible unless there are circumstances that support collectability. Those circumstances are documented. As of December 31, 2018 and 2017, the allowance for uncollectible accounts receivable was $49,191 and $38,022, respectively. Receivables are charged off when collection efforts cease. Property and Equipment Property and equipment are stated at cost or fair value if acquired as part of a business combination. Depreciation is computed by the straight-line method and is charged to operations over the estimated useful lives of the assets. Maintenance and repairs are charged to expense as incurred. The carrying amount of accumulated depreciation of assets sold or retired are removed from the accounts in the year of disposal and any resulting gain or loss in s included in results of operations. The estimated useful lives of property and equipment are telecommunications network - 20 years, telecommunications equipment - 7 to 10 years, and computers and office equipment - 3 years. Goodwill and Intangible Assets Goodwill relates to amounts that arose in connection with our various business combinations and represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets when accounted for using the acquisition method of accounting. Goodwill is not amortized, but it is subject to periodic review for impairment. We test goodwill and other intangible assets with indefinite lives at the reporting unit level for impairment on an annual basis and between annual tests, if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying value. Events that would indicate potential impairment and trigger an interim impairment assessment include, but are not limited to, current economic and market conditions, including a decline in market capitalization, a significant adverse change in legal factors, business climate or operational performance of the business and an adverse action or assessment by a regulator. In performing the annual goodwill impairment test, we utilize the two-step approach. The first step, or Step 1, requires a comparison of the carrying value of each reporting unit to its estimated fair value. To estimate the fair value of our reporting units for Step 1, we use a combination of the income approach, the market comparable approach and the market transaction approach. The income approach is based on a discounted cash flow analysis, or DCF approach, and calculates the fair value by estimating the after-tax cash flows attributable to a reporting unit and then discounting the after-tax cash flows to a present value, using a risk-adjusted discount rate. Assumptions used in the DCF approach require the exercise of significant judgment, including judgment about appropriate discount rates and terminal values, growth rates and the amount and timing of expected future cash flows. The forecasted cash flows are based on our most recent operating activities and assumed growth rates. We believe our assumptions are consistent with the plans and estimates used to manage the underlying businesses. The discount rates, which are intended to reflect the risks inherent in future cash flow projections, used in the DCF approach are based on estimates of the weighted-average cost of capital, or WACC, of market participants relative to each respective reporting unit. The market approaches consider comparable and transactional market data based on multiples of revenue or earnings before interest, taxes, depreciation and amortization, or EBITDA, based on trading multiples of selected guidelines companies and deal multiples of selected target companies. If the carrying value of a reporting unit exceeds its estimated fair value, we are required to perform the second step, or Step 2, of the annual goodwill impairment test to measure the amount of impairment loss, if any. Step 2 of the goodwill impairment test compares the implied fair value of a reporting unit’s goodwill to its carrying value. The implied fair value of goodwill is calculated as the difference between the fair value of the reporting unit and the estimated fair value of its assets and liabilities. To the extent this amount is below the carrying value of goodwill, an impairment charge is recorded to write down the carrying value to its implied value. Based on our impairment testing, we do not consider an impairment charge to goodwill necessary as of December 31, 2018 and 2017. Impairment charges related to goodwill, if any, have no impact on our cash balances. Impairment of Other Long-lived Tangible and Intangible Assets Our intangible assets consist primarily of customer relationships, developed technology and the film library. The majority of our intangible assets were recorded in connection with our various business combinations. Our intangible assets are recorded at fair value at the time of their acquisition. We amortize intangible assets over their estimated useful lives. The estimated useful lives of the individual categories of intangible assets were based on the nature of the applicable intangible asset and the expected future cash flows to be derived from the intangible asset. Amortization of intangible assets with finite lives is recognized over the shorter of the respective lives of the agreement or the period of time the intangible assets are expected to contribute to future cash flows. We amortize our finite-lived intangible assets based on patterns on which the respective economic benefits are expected to be realized. We amortize the majority of our intangible assets on a straight-line basis from three to nine years, as this methodology most closely approximates the pattern of economic benefits for these assets. We evaluate long-lived tangible and intangible assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If indicators of impairment are present with respect to long-lived tangible and intangible assets used in operations and undiscounted future cash flows are not expected to be sufficient to recover the assets’ carrying amount, additional analysis is performed as appropriate and the carrying value of the long-lived assets is reduced to the estimated fair value, if this is lower, and an impairment loss is charged to expense in the period the impairment is identified. Factors we generally consider important which could trigger an impairment review on the carrying value of other long-lived tangible and intangible assets include the following: (1) significant underperformance relative to expected historical or projected future operating results, (2) significant changes in the manner of our use of acquired assets or the strategy for our overall business, (3) underutilization of our tangible assets, (4) discontinuance of product lines by ourselves or our customers, (5) significant negative industry or economic trends, (6) significant decline in our stock price for a sustained period, (7) significant decline in our market capitalization relative to net book value and (8) goodwill impairment identified during an impairment review. As of December 31, 2018 and 2017, we performed evaluations that resulted in no impairments of intangible assets. Business Acquisitions Our business acquisitions have historically been made at prices above the fair value of the assets acquired and liabilities assumed, resulting in goodwill or some identifiable intangible asset. Significant judgment is required in estimating the fair value of intangible assets and in assigning their respective useful lives. The fair value estimates are based on available historical information and on future expectations and assumptions deemed reasonable by management but are inherently uncertain. We generally employ the income method to estimate the fair value of intangible assets, which is based on forecasts of the expected future cash flows attributable to the respective assets. Significant estimates and assumptions inherent in the valuations reflect a consideration of other marketplace participants and include the amount and timing of future cash flows (including expected growth rates and profitability), the underlying product life cycles, economic barriers to entry, a brand’s relative market position and the discount rate applied to the cash flows. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions. Net assets acquired are recorded at their fair value and are subject to adjustment upon finalization of the fair value analysis. Basic and Diluted Net Loss Per Share The Company computes net income (loss) per share in accordance with ASC 260, “Earning per Share””. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of thee income statement. Basic EPS is computed by dividing net income (loss) available to common shareholder (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of December 31, 2018 and 2017, the Company had shares that were potentially common stock equivalents as follows: 2018 2017 Series A Preferred Stock 128,056,506 62,671,309 Series B Preferred Stock 2,588,693 2,588,693 Stock Options 3,093,120 93,520 Convertible Debt 4,252,555 1,339,536 137,990,874 66,599,536 Concentration of Credit Risk, Off-Balance Sheet Risks and Other Risks and Uncertainties Financial instruments that potentially subject us to concentration of credit risk primarily consist of cash and cash equivalents and accounts receivable. We invest our excess cash primarily in high quality securities and limit the amount of our credit exposure to any one financial institution. We do not require collateral or other securities to support customer receivables; however, we perform on-going credit evaluations of our customers and maintain allowances for potential credit losses. At December 31, 2018 and 2017, two customer accounts receivable balances were 28% and 0%, respectively, of our aggregate accounts receivable or revenues. Financial Instruments and Fair Value of Financial Instruments Our primary financial instruments at December 31, 2018 and 2017 consisted of cash equivalents, accounts receivable, accounts payable and debt. We apply fair value measurement accounting to either record or disclose the value of our financial assets and liabilities in our financial statements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value hierarchy requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. Described below are the three levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 Research and Development Our research and development programs focus on telecommunications products and services. Research and development costs are expensed as incurred. Any payments received from external parties to fund our research and development activities reduce the recorded research and development expenses. Advertising Costs Advertising costs are expensed as incurred. The Company incurred advertising costs of $220 and $1,350 for the years ended December 31, 2018 and 2017, respectively. Use of Estimates The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The Company’s consolidated financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented. Derivative Financial Instruments Derivative financial instruments, as defined in ASC 815, “Accounting for Derivative Financial Instruments and Hedging Activities”, consist of financial instruments or other contracts that contain a notional amount and one or more underlying (e.g. interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or, in rare instances, assets. The Company does not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However, the Company had issued financial instruments including convertible promissory notes payable with features during 2017 that were either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or (iii) may be net-cash settled by the counterparty. As required by ASC 815, in certain instances, these instruments are required to be carried as derivative liabilities, at fair value, in our financial statements. The Company estimates the fair values of derivative financial instruments using the Black-Scholes option valuation technique. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates (such as volatility, estimated life and interest rates) that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of our common stock, which has a high-historical volatility. Since derivative financial instruments are initially and subsequently carried at fair values, the Company’s operating results will reflect the volatility in these estimate and assumption changes. During September 2017, the Company issued convertible promissory notes in the amount of $55,000 (comprised of two $25,000 notes to two related parties and one $5,000 note to a former officer of CDH), all which are due May 1, 2020 and bear 6% annual interest and are convertible into common stock of the Company at 60% of the average closing market share price for the prior 10 trading days. Subsequent to September 30, 2017 and prior to December 31, 2017, the Company issued an additional $12,000 of the same convertible promissory notes with the same conversion features. However, in November 2017, all of these convertible promissory notes included as derivative financial instruments totaling $67,000 were amended such that the conversion price became fixed at $0.25 per share, and the derivative features were eliminated. As such, the derivative accounting as of and through September 31, 2017 was reversed and there is no resulting derivative accounting that is evident in the 2018 or 2017 financial statements. Recently Adopted Accounting Pronouncements On January 1, 2018, we adopted the new accounting standard ASC 606, Revenue from Contracts with Customers In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which amends ASC 718, Compensation – Stock Compensation. This ASU requires that most of the guidance related to stock compensation granted to employees be followed for non-employees, including the measurement date, valuation approach, and performance conditions. The expense is recognized in the same period as though cash were paid for the good or service. The effective date is the first quarter of fiscal year 2020, with early adoption permitted, including in interim periods. The ASU has been adopted using a modified-retrospective transition approach. The adoption is not considered to have a material effect on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and subsequent amendments to the initial guidance: ASU 2017-13, ASU 2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01 (collectively, Topic 842). Topic 842 requires lessees to classify leases as either finance or operating leases and to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of the lease classification. We expect to adopt Topic 842 using the effective date, January 2019, as the date of our initial application of the standard. Consequently, financial information for the comparative periods will not be updated. We expect that our finance and operating lease commitments will be subject to the new standard and recognized as finance and operating lease liabilities and right-of-use assets upon our adoption of Topic 842, which will increase our total assets and total liabilities that we report relative to such amounts prior to adoption. Management has reviewed other recently issued accounting pronouncements and have determined there are not any that would have a material impact on the condensed consolidated financial statements. Reclassifications Certain prior period amounts were reclassified to conform to the current period presentation. Specifically, we reclassified 2017 Debt- related party in the amount of $62,000 to long-term related party convertible debt to conform to current year presentation. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS | Blue Collar Acquisition The Company entered into an Acquisition and Purchase Agreement on November 3, 2017, but amended on February 9, 2018, March 29, 2018 and August 16, 2018, to be effective September 1, 2018 with Blue Collar Inc. (“Blue Collar”), a media production company and California Corporation and its shareholders, to acquire 100% of the outstanding ownership of Blue Collar, including equipment, furniture and other assets, for 6,500,000 shares of restricted Common Stock and $1,600,000 (which was determined to have a fair value of approximately $1,533,000) in a Seller note payable that is to be paid within eight months of September 1, 2018, as amended in August 2018, and bears annual interest of 3% (12% interest upon default). See Notes 7 and 11. The acquisition is a key element in the Company’s overall strategic plans. Change in control took place on September 1, 2018 with the addition of senior company personnel being added to the Board of Directors of Blue Collar and on all bank accounts. The Company applied the acquisition method of accounting to the business combination and has valued each of the assets acquired and liabilities. The assets and liabilities were deemed to be recorded at fair value as of the acquisition date of September 1, 2018. Purchase Price Allocation: TPT Global Tech Effective 9-1-18 Purchaser TPT Global Tech Consideration Given: Common Stock 6,500,000 6,500,000 Estimated Value $ .13 Consideration Share Value 845,000 Note Payable $ 1,533,217 Liabilities: Bank debt 500,500 Lease payable 20,020 Accounts and other payables 386,652 Total Consideration Value $ 3,285,389 Consideration Received: Intangible asset $ 1,677,000 Goodwill 853,366 Assets Current assets 297,704 Fixed assets 445,362 Other assets 11,957 Total Consideration Received $ 3,285,389 Had the acquisition occurred on January 1, 2017, condensed proforma statement of operations for the years ended December 31, 2018 and 2017 would be as follows: 2018 2017 Revenue $ 2,355,467 $ 3,966,866 Cost of Sales 2,350,657 3,226,912 Gross Profit (Loss) $ 4,810 $ 739,954 Expenses (4,768,116 ) (4,058,844 ) Interest Expense and impairment (275,935 ) (694,637 ) Income taxes — — Net Loss $ (5,039,241 ) $ (4,013,527 ) Included in the consolidated statement of operations for the year ended December 31, 2018 are the results of operations for Blue Collar for the four months ended December 31 which are the following: 2018 Revenue $ 219,474 Cost of Sales 215,973 Gross Profit (Loss) $ 3,501 Expenses (301,105 ) Interest Expense (66,571 ) Income taxes — Net Loss $ (364,175 ) Total Industrial Plant Services, Inc. Acquisition and Subsequent Termination On April 18, 2018, the Company entered into an Acquisition and Purchase Agreement in draft form with Total Industrial Plant Services, Inc. (“TIPS”), a Texas Corporation and its shareholders, to acquire the assets, intellectual property and technology for 3,000,000 shares of restricted Common Stock and $2,500,000 payable at closing. A condition upon closing was that TIPS’ financial information, including existing contracts and projected contract revenue levels, was to be audited by a SEC Certified Public Accounting firm in accordance with SEC requirements. Shortly after the date of the agreement, which was in draft form, the Company determined that the terms under the Acquisition and Purchase Agreement, on TIPS’ part, were unperformable and that several representations made by TIPS were not accurate. As such, the Company verbally terminated the Acquisition and Purchase Agreement. On August 29, 2018, the Company gave written notice of termination to TIPS. Separately, during the due diligence phase, the Company extended TIPS $37,950 in working capital. The Company was working with TIPS on a repayment plan but has made the determination to provide for an allowance for bad debt of 100% of this balance as of December 31, 2018. HRS Agreement and Subsequent Rescission On November 1, 2017, as amended February 9, 2018, the Company entered into an Acquisition and Purchase Agreement with Hollywood Riviera LLC and HRS Mobile LLC and their members who share common ownership to acquire 100% ownership interest in both of these companies for 3,265,000 restricted Common Stock and, and $3,350,000 in cash to be used to retire debt and pay for ownership interests. In conjunction with this Acquisition, 3,265,000 shares of restricted Common Stock were issued during 2017. On March 28, 2018, by mutual agreement, this Agreement was rescinded and the 3,625,000 shares of common stock are being returned by the recipients and have been recorded as $3,625 in stock subscription receivable as of December 31, 2018. These common shares have yet to be returned as of the issuance of these financial statements. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2018 | |
Going Concern [Abstract] | |
GOING CONCERN | The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Cash flows generated from operating activities were not enough to support all working capital requirements for the years ended December 31, 2018 and 2017. Financing activities described below have helped with working capital and other capital requirements. We incurred $5,377,489 and $3,807,401, respectively, in losses, and we used $916,407 and $750,408, respectively, in cash for operations for the years ended December 31, 2018 and 2017. Cash flows from financing activities were $871,199 and $693,502 for the same periods. These factors raise substantial doubt about the ability of the Company to continue as a going concern for a period of one year from the issuance of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Subsequent to December 31, 2018, shareholders extended loans to the Company in the amount of approximately $104,300 into debt that is convertible one dollar into one share of sock of Series C Preferred Stock that has been designated convertible into common stock at $0.15 per share and includes terms similar to the other Preferred Stock. A third-party advanced the company $50,000 on March 13, 2019 with verbal terms that included repayment in 45 days at 10%. There were no other terms on this. On March 19, 2019, the “Company consummated a Securities Purchase Agreement dated March 15, 2019 with Geneva Roth Remark Holdings, Inc. (“Geneva Roth”) for the purchase of a $68,000 Convertible Promissory Note (“Geneva Roth Convertible Promissory Note”). This Geneva Roth Convertible Promissory Note is part of a larger investment term sheet with Geneva Roth, at their option, to invest in the Company up to $975,000. In addition, On March 25, 2019, TPT Global Tech, Inc. (the “Company”) consummated a Securities Purchase Agreement dated March 18, 2019 with Auctus Fund, LLC. (“Auctus”) for the purchase of a $600,000 Convertible Promissory Note (“Auctus Convertible Promissory Note”). In order for us to continue as a going concern for a period of one year from the issuance of these financial statements, we will need to obtain additional debt or equity financing and look for companies with cash flow positive operations that we can acquire. There can be no assurance that we will be able to secure additional debt or equity financing, that we will be able to acquire cash flow positive operations, or that, if we are successful in any of those actions, those actions will produce adequate cash flow to enable us to meet all our future obligations. Most of our existing financing arrangements are short-term. If we are unable to obtain additional debt or equity financing, we may be required to significantly reduce or cease operations. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | Property and equipment and related accumulated depreciation as of December 31, 2018 and 2017 are as follows: 2018 2017 Property and equipment: Telecommunications fiber and equipment $ 3,274,045 3,274,045 Film production equipment 369,903 — Office furniture and equipment 82,014 23,898 Leasehold improvements 18,679 — Accumulated depreciation (697,699 ) (483,876 ) Property and equipment, net $ 3,046,942 2,814,067 Depreciation expense was $213,823 and $175,492 for the years ended December 31, 2018 and 2017, respectively. |
DEBT FINANCING ARRANGEMENTS
DEBT FINANCING ARRANGEMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
DEBT FINANCING ARRANGEMENTS | Financing arrangements as of December 31, 2018 and 2017 are as follows: 2018 2017 Business loans and advances (1) $ 615,692 114,016 Convertible debt (2) 15,000 5,000 Factoring agreement (3) 101,244 78,909 Debt – third party $ 731,936 197,925 Line of credit, related party secured by assets (4) $ 3,043,390 3,043,390 Debt– other related party, net of discounts (5) 5,912,898 4,350,000 Convertible debt – related party (2) 801,888 312,000 Shareholder debt (6) 181,694 164,200 Debt – related party $ 9,939,870 7,869,590 Total financing arrangements $ 10,671,806 8,067,515 Less current portion: Debt – third party $ (716,936 ) (195,106 ) - third party, convertible (10,000 ) — Debt – related party, net of discount (9,137,982 ) (7,557,590 ) – related party, convertible (202,688 ) (250,000 ) (10,067,606 ) (8,002,696 ) Total long term debt $ 604,200 64,819 (1) The terms of $40,000 of this balance are similar to that of the Line of Credit which bears interest at adjustable rates, 1 month Libor plus 2%, 4.34% as of December 31, 2018, and is secured by assets of the Company, is due August 31, 2019, as amended, and included 8,000 stock options as part of the terms (see Note 7). $500,500 is a line of credit that Blue Collar has with a bank, bears interest at Prime plus 1.125%, 6.38% as of December 31, 2018, and is due March 25, 2021. $10,000 is an amount the bears interest at 6%, subsequently increased to 11%, as it was due and not repaid on October 10, 2018. The remaining balances generally bear interest at approximately 10%, have maturity dates that are due on demand or are past due, are unsecured and are classified as current in the balance sheets. (2) During 2017, the Company issued convertible promissory notes in the amount of $67,000 (comprised of $62,000 from two related parties and $5,000 from a former officer of CDH), all which are due May 1, 2020 and bear 6% annual interest (12% default interest rate). The convertible promissory notes are convertible, as amended, at $0.25 per share. During 2016, the Company acquired SDM which consideration included a convertible promissory note for $250,000 due August 31, 2018, as amended, does not bear interest, unless delinquent in which the interest is 12% per annum, and is convertible into common stock at $1.00 per share. The SDM balance is $202,688 as of December 31, 2018. During 2018, the Company issued convertible promissory notes in the amount of $537,200 to related parties and $10,000 to a non-related party which bear interest at 6% (11% default interest rate), are due 30 months from issuance and are convertible into Series C Preferred Stock at $1.00 per share. Because the Series C Preferred Stock has a conversion price of $0.15 per share, the issuance of Series C Preferred Stock promissory notes will cause a beneficial conversion feature of approximately $38,479 upon exercise of the convertible promissory notes. (3) The Factoring Agreement with full recourse, due August 31, 2019, as amended, was established in June 2016 with a company that is controlled by a shareholder and is personally guaranteed by an officer of the Company. The Factoring Agreement is such that the Company pays a discount of 2% per each 30-day period for each advance received against accounts receivable or future billings. The Company was advanced funds from the Factoring Agreement for which $101,244 and $78,909 in principal remained unpaid as of December 31, 2018 and 2017, respectively. (4) The Line of Credit originated with a bank and was secured by the personal assets of certain shareholders of Copperhead Digital. During 2016, the Line of Credit was assigned to the Copperhead Digital shareholders, who subsequent to the Copperhead Digital acquisition by TPTG became shareholders of TPTG, and the secured personal assets were used to pay off the bank. The Line of Credit bears a variable interest rate based on the 1 Month LIBOR plus 2.0%, 3.91% as of December 31, 2018, is payable monthly, and is secured by the assets of the Company. 1,000,000 shares of Common Stock of the Company have been reserved to accomplish raising the funds to pay off the Line of Credit. Since assignment of the Line of Credit to certain shareholders, which balance on the date of assignment was $2,597,790, those shareholders have loaned the Company $445,600 under the similar terms and conditions as the line of credit but most of which were also given stock options totaling 85,120 (see Note 7) and is due, as amended, August 31, 2019. During the year ended December 31, 2018, those same shareholders and one other have loaned the Company money in the form of convertible loans of $537,200 described in (2) above. (5) $350,000 represents cash due to the prior owners of the technology acquired in December 2016 from the owner of the Lion Phone which is due to be paid as agreed by TPTG and the former owners of the Lion Phone technology and has not been determined. $4,000,000 represents a promissory note included as part of the consideration of ViewMe Live technology acquired in 2017, later agreed to as being due and payable in full, with no interest with $2,000,000 from debt proceeds intended to be obtained in 2018 and the remainder from proceeds from the second Company public offering intended to be in 2019. On September 1, 2018, the Company closed on its acquisition of Blue Collar. Part of the acquisition included a promissory note of $1,600,000 (fair value of $1,533,217, net of a discount to fair value of $66,783 which is being amortized through expense through the due date of May 1, 2019) and interest at 3% from the date of closure. $29,681 was amortized as interest expense in the year ended December 31, 2018. The promissory note is secured by the assets of Blue Collar. (6) The shareholder debt represents funds given to TPTG or subsidiaries by officers and managers of the Company as working capital. There are no written terms of repayment or interest that is being accrued to these amounts and they will only be paid back, according to management, if cash flows support it. They are classified as current in the balance sheets. See Lease financing arrangement in Note 8. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | The following table sets forth the components of the Company’s income tax expense (benefit) for the years ended December 31, 2018 and 2017: Current: 2018 2017 Federal State and local $ — — Total Current $ — — Deferred: Federal State and local benefit $ (1,129,273 ) (791,570 ) Net operating loss, net of state tax effect (84,070 ) (47,462 ) Meals and entertainment 2,183 2,736 Stock based expenses 235,256 — Other 84,071 56,796 Allowance 891,833 779,500 Total Benefit $ — — The following table sets forth a reconciliation of the Company’s income tax expense (benefit) as the federal statutory rate to recorded income tax expense (benefit) for the years ended December 31, 2018 and 2017: 2018 2017 Statutory rate 21 % 21 % Change in valuation allowance (21 %) (21 %) Stock based compensation (0 %) (0 %) Net operating loss, net of state tax effect (1 %) (1 %) Other (1 %) (1 %) Total — — The following table sets forth the components of the Company’s deferred income taxes as of December 31, 2018 and 2017: Current deferred tax assets (liabilities): 2018 2017 Valuation allowance $ — — Total current deferred tax asset (liability) $ — — Noncurrent deferred tax assets (liabilities): Intangible assets amortization $ 620,447 460,773 Net operating loss carry forwards 1,681,403 949,243 Stock base compensation 1,287,336 1,287,336 Other 98,927 98,927 Less; Valuation allowance $ (3,688,113 ) (2,796,279 ) Total noncurrent deferred tax asset (liability) — — Total deferred tax asset (liability) $ — — The Company has approximately $8,000,000 and 4,500,000 of net operating loss carry forwards as of December 31, 2018 and 2017, respectively, which expire in varying amounts, if unused. Because of the change in ownership of more than 50% of the Company in accordance with Section 382 of the IRS Code, these net operating loss carry forwards may be significantly limited to use in future periods. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
STOCKHOLDERS' DEFICIT | |
STOCKHOLDERS' EQUITY | Preferred Stock As of December 31, 2018, we had authorized 100,000,000 shares of Preferred Stock, of which certain shares had been designated as Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock. Series A Convertible Preferred Stock In February 2015, the Company designated 1,000,000 shares of Preferred Stock as Series A Preferred Stock. The Series A Preferred Stock was designated in February 2016, has a par value of $.001, is redeemable at the Company’s option at $100 per share, is senior to any other class or series of outstanding Preferred Stock or Common Stock and does not bear dividends. The Series A Preferred Stock has a liquidation preference immediately after any Senior Securities, as defined, and of an amount equal to $100 per share. Holders of the Series A Preferred Stock shall, collectively have the right to convert all of their Series A Preferred Stock when conversion is elected into that number of shares of Common Stock of the Company, determined by the following formula: 60% of the issued and outstanding Common Shares as computed immediately after the transaction for conversion. For further clarification, the 60% of the issued and outstanding common shares includes what the holders of the Series A Preferred Stock may already hold in common shares at the time of conversion. The Series A Preferred Stock, collectively, shall have the right to vote as if converted prior to the vote to an amount of shares equal to 60% of the outstanding Common Stock of the Company. In February 2015, the Board of Directors authorized the issuance of 1,000,000 shares of Series A Preferred Stock to Stephen Thomas, Chairman, CEO and President of the Company, valued at $3,117,000 for compensation expense. Series B Convertible Preferred Stock In February 2015, the Company designated 3,000,000 shares of Preferred Stock as Series B Convertible Preferred Stock. There are 2,588,693 shares of Series B Convertible Preferred Stock outstanding as of December 31, 2018. The Series B Preferred Stock was designated in February 2015, has a par value of $.001, is not redeemable, is senior to any other class or series of outstanding Preferred Stock, except the Series A Preferred Stock, or Common Stock and does not bear dividends. The Series B Preferred Stock has a liquidation preference immediately after any Senior Securities, as defined and currently the Series A Preferred Stock, and of an amount equal to $2.00 per share. Holders of the Series B Preferred Stock have a right to convert all or any part of the Series B Preferred Shares and will receive and equal amount of common shares at the conversion price of $2.00 per share. The Series B Preferred Stock holders have a right to vote on any matter with holders of Common Stock and shall have a number of votes equal to that number of Common Shares on a one to one basis. Series C Convertible Preferred Stock In May 2018, the Company designated 3,000,000 shares of Preferred Stock as Series C Convertible Preferred Stock. There are no shares of Series C Convertible Preferred Stock outstanding as of December 31, 2018. The Series C Preferred Stock was designated in May 2018, has a par value of $.001, is not redeemable, is senior to any other class or series of outstanding Preferred Stock, except the Series A and Series B Preferred Stock, or Common Stock and does not bear dividends. The Series C Preferred Stock has a liquidation preference immediately after any Senior Securities, as defined and currently the Series A and B Preferred Stock, and of an amount equal to $2.00 per share. Holders of the Series C Preferred Stock have a right to convert all or any part of the Series C Preferred Shares and will receive an equal amount of common shares at the conversion price of $0.15 per share. The Series C Preferred Stock holders have a right to vote on any matter with holders of Common Stock and shall have a number of votes equal to that number of Common Shares on a one to one basis. Common Stock and Capital Contributions As of December 31, 2018, we had authorized 1,000,000,000 shares of Common Stock, of which 136,953,904 common shares are issued and outstanding. Common Stock Contributions Related to Acquisitions Effective November 1 and 3, 2017, an officer of the Company contributed 9,765,000 shares of restricted Common Stock to the Company for the acquisition of Blue Collar and HRS. These shares were subsequently issued as consideration for these acquisitions in November 2017. In March 2018, the HRS acquisition was rescinded and 3,625,000 shares of common stock are being returned by the recipients. The other transaction involved 6,500,000 shares for the acquisition of Blue Collar. In March 2018 and again in August 2018, this transaction was amended and closed on September 1, 2018. As such, as of December 31, 2018 both the 3,265,000 shares for the HRS transaction are reflected as subscriptions receivable based on their par value. Common Stock Issued for Expenses and Liabilities During the year ended December 31, 2018, the Company entered into a two-year agreement for legal services. The agreement provided for 4,000,000 shares of restricted common stock to be issued. 2,000,000 to be issued for previous legal services upon execution of the agreement in March 2018 and the remaining 2,000,000 in the form of stock options to purchase common stock at $0.10 per share, of which the stock options would vest equally over 18 months. The value of the Company’s common stock upon execution of the agreement was $0.125 per share, or $250,000 which was recorded as professional expenses during 2018. See stock options and warrants discussion below for the value of the 2,000,000 stock options During the year ended December 31, 2018, the Company also entered into a twelve-month general consulting agreement with a third party to provide general business advisory services to be rendered through March 30, 2019 for 1,000,000 restricted shares of common stock and 1,000,000 options to purchase restricted common shares at $0.10 per share for 36 months from the time of grant. The fair value of the common shares granted was based on the Company’s stock price of $0.155 per share, or $155,000 of which $120,556 was expensed during the period for the portion of service term complete as of December 31, 2018. During the year ended December 31, 2018, the Company entered into a consulting agreement for market services for which it granted 2,500,000 shares of restricted common stock and will pay $50,000. The per share value used was the Company’s closing stock price of $0.1297 on the date of the agreement, or a total of $324,250 which was expensed in 2018. For these three agreements, the underlying stock for the stock options are intended to come from the contribution of stock by an officer of the Company. During the years ended December 31, 2018, the Company recorded $694,806 as stock-based compensation related to these agreements. As of December 31, 2018, amortization of $34,444 is remaining to be amortized over three months for the general consulting agreement. Common Stock Payable Issued for Expenses and Liabilities During the years ended December 31, 2018, 16,667 of common shares were subscribed to for a note payable on the balance sheet of $2,000. In August 2018, a majority of the outstanding voting shares of the Company voted through a consent resolution to support a consent resolution of the Board of Directors of the Company to add two new directors to the Board. As such, Arkady Shkolnik and Reginald Thomas (family member of CEO) were added as members of the Board of Directors. The total members of the Board of Directors after this addition is four. In accordance with agreements with the Company for his services as a director, Mr. Shkolnik is to receive $25,000 per quarter and 5,000,000 shares of restricted common stock valued at approximately $692,500 vesting quarterly over twenty-four months. The quarterly cash payments of $25,000 will be paid in unrestricted common shares if the Company has not been funded adequately to make such payments. Mr. Thomas is to receive $10,000 per quarter and 1,000,000 shares of restricted common stock valued at approximately $120,000 vesting quarterly over twenty-four months. The quarterly payment of $10,000 may be suspended by the Company if the Company has not been adequately funded. As of December 31, 2018, $37,500 and $15,000 has been accrued in the balance sheet for Mr. Shkolnik and Mr. Thomas, respectively. Common Stock Contributions by Officer for Cash During the year ended December 31, 2018, 3,675,000 restricted shares of Common Stock were subscribed to from investors for $367,500 or $0.10 per share, which stock was contributed by an officer of the Company as a capital contribution. Stock Options Options Outstanding Vested Vesting Period Exercise Price Outstanding and Exercisable Expiration Date December 31, 2016 ---- --- --- --- ------ Granted 93,120 93,120 100% at issue $0.05 to $0.22 12-31-19 December 31, 2017 93,120 93,120 --- $0.05 to $0.22 12-31-19 Granted 3,000,000 --- 12 to 18 months $0.10 2-28-20 to 3-20-21 December 31, 2018 3,093,120 1,954,230 $0.05 to $0.22 12-31-19 to 3-20-21 Stock options to purchase approximately 3,093,120 shares of common stock of the Company are outstanding as of December 31, 2018 related to debt issuances (see Note 5) at prices ranging from $0.05 to $0.22 per share. In addition, the company granted through consulting arrangements primarily for legal work and general business support that included the issuance of stock options to purchase 3,000,000 options to purchase common shares at $0.10 per share, 1,000,000 of which is fully vested and 2,000,000 which will vest over 18 months from date of grant. All these stock options have an exercise period of 24 to 36 months. The Black-Scholes options pricing model was used to value the stock options. The inputs included the following: (1) Dividend yield of 0% (2) expected annual volatility of 307% - 311% (3) discount rate of 2.2% to 2.3% (4) expected life of 2 years, and (5) estimated fair value of the Company’s common $0.125 to $0.155 per share. During the years ended December 31, 2018, the Company recorded $256,187 as stock-based compensation related to the stock options and the related service period for which services have been rendered. For future periods, the remaining value of the stock options totaling approximately $140,668 will be amortized into the statement of operations consistent with the period for which the services will be rendered, which is two years for the legal agreement and one year for the general consulting agreement. Common Stock Reservations The Company has reserved 1,000,000 shares of Common Stock of the Company for the purpose of raising funds to be used to pay off debt described in Note 5. We have reserved 20,000,000 shares of Common Stock of the Company to grant to certain employee and consultants as consideration for services rendered and that will be rendered to the Company. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Accounts Payable and Accrued Expenses 2018 2017 Accounts payable: Related parties (1) $ 741,577 $ 216,732 General operating 3,037,601 2,040,947 Credit card balances 246,949 95,689 Accrued expenses; 33,063 25,958 Taxes and fees payable 629,462 21,702 Total $ 4,687,652 $ 2,401,028 (1) Relates to amounts due to management and members of the Board of Directors according to verbal and written agreements that have not been paid as of period end. Lease Obligations Future minimum lease payments are as follows: Obligation 2019 In Default Total Telecom Equipment Finance (1) $ 449,103 — $ 449,103 Telecommunications Equipment Lease (2) — 101,347 101,347 Production Equipment Lease (3) 10,357 — 10,357 Total $ 459,460 101,347 $ 560,807 (1) The Telecom Equipment Lease is with an entity owned and controlled by shareholders of the Company and is due August 31, 2019, as amended. (2) The Telecommunications Equipment Lease requires payments of $3,702 per month and is in default. See discussion below in Other Commitments and Contingencies. In December 2017, the Company learned that the telecommunications equipment lease identified herein for $101,348 was included in a default judgement in a non-jurisdictional state of Pennsylvania for $169,474 from a lawsuit by the lessor. Management is working with the lessor to settle this matter including a proposal for the equipment to be returned to the lessor and then a negotiated amount for any deficiency between the value given for the retired equipment and the $101,348. When concluded, management does not believe the results will be significantly different than the liability of $101,348 and accrued fees and interest of $27,070 recorded. (3) The Production Equipment Lease, maturing on April 15, 2019, required payments of $2,535 per month and includes imputed interest at 8.5%. The lease was entered into in 2015 for the purchase of equipment in the amount of approximately $120,000 (see Note 2). Other Commitments and Contingencies The Company has employment agreements with certain employees of SDM and K Telecom. The agreements are such that SDM and K Telecom, on a standalone basis in each case, must provide sufficient cash flow to financially support the financial obligations within the employment agreements. In December 2016, a subsidiary’s landlord agreed to terminate a facilities lease for 150,000 restricted shares of Common Stock valued at $43,350 from a capital contribution of an officer of the Company. Subsequent to the agreement, the landlord requested more shares against the Company’s agreement. As such, $63,053 remains in liabilities payable to the landlord and the $43,350 was expensed as rent previously. The matter is still unresolved. Management does not believe any negative resolution will have a material impact on the Company’s consolidated financial statements. The company has been named in a lawsuit by a former employee who was terminated by management in 2016. The employee was working under an employment agreement but was terminated for breach of the agreement. The former employee is suing for breach of contract and is seeking around $75,000 in back pay and benefits. Management believes it has good and meritorious defenses and does not believe the outcome of the lawsuit will have any material effect on the financial position of the Company. As of December 31, 2018, the company has collected $338,725 from one customer in excess of amounts due from that customer in accordance with the customer’s understanding of the appropriate billings activity. The customer has filed a written demand for repayment by the Company of amounts owed. Management believes that the customer agreement allows them to keep the amounts under dispute. Given the dispute, the Company has reflected the amounts in dispute as a customer liability on the consolidated balance sheet as of December 31, 2018 and does not believe the outcome of the dispute will have a material effect on the financial position of the Company. |
RELATED PARTY ACTIVITY
RELATED PARTY ACTIVITY | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY ACTIVITY | During the years ended December 31, 2018 and 2017, the Company entered into a lease for living space which is occupied by Stephen Thomas, Chairman, CEO and President of the Company. Mr. Thomas lives in the space and uses it as his corporate office. The company has paid $26,792 in rent and utility payments for this space for the year ended December 31, 2018. There are shares issuances and capital contributions from an officer of the Company. See Note 7. Also, there are debt and lease balances outstanding due to shareholders and other related parties of the Company of $741,577 and $216,732, respectively, as of December 31, 2018 and 2017 related to amounts due to management and members of the Board of Directors according to verbal and written agreements that have not been paid as of period end which are included in accounts payable and accrued expenses on the balance sheet. See Notes 5 and 7. On April 17, 2018, the CEO of the Company, Stephen Thomas, signed an agreement with New Orbit Technologies, S.A.P.I. de C.V., a Mexican corporation, (“New Orbit”), majority owned and controlled by Stephen Thomas, related to a license agreement for the distribution of TPT licensed products, software and services related to Lion Phone and ViewMe Live within Mexico and Latin America (“License Agreement”). The License Agreement provides for New Orbit to receive a fully paid-up, royalty-free, non-transferable license for perpetuity with termination only under situations such as bankruptcy, insolvency or material breach by either party and provides for New Orbit to pay the Company fees equal to 50% of net income generated from the applicable activities. The transaction was approved by the Company’s Board of Directors in June 2018. There has been no activity on this agreement. As is mentioned in Note 7, Reginald Thomas was appointed to the Board of Directors of the Company in August 2018. Mr. Thomas is the brother to the CEO Stephen J. Thomas III. According to an agreement with Mr. Reginald Thomas, he is to receive $10,000 per quarter and 1,000,000 shares of restricted common stock valued at approximately $120,000 vesting quarterly over twenty-four months. The quarterly payment of $10,000 may be suspended by the Company if the Company has not been adequately funded. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | Goodwill and intangible assets are comprised of the following: December 31, 2018 Gross carrying amount (1) Accumulated Amortization Net Book Value Useful Life Customer Base $ 1,947,200 (1,374,933 ) 572,267 3-10 Developed Technology $ 6,105,600 (1,059,070 ) 5,046,530 9 Film Library $ 957,000 (32,700 ) 924,300 11 Trademarks and Tradenames $ 132,000 (3,515 ) 128,485 12 $ 9,141,800 (2,470,218 ) 6,671,582 Goodwill $ 924,361 — 924,361 — (1) Increases from the prior year are from the acquisition of Blue Collar. See more details on this acquisition in Note 2 to these consolidated financial statements. December 31, 2017 Gross carrying amount Accumulated Amortization Net Book Value Useful Life Customer Base $ 1,422,100 (1,392,102 ) 29,998 3 Developed Technology 6,105,600 (380,665 ) 5,724,935 9 $ 7,527,700 (1,772,767 ) 5,754,933 Goodwill $ 70,995 — 70,995 — Remaining amortization of the intangible assets is as following for the next five years and beyond: 2019 2020 2021 2022 2023 Beyond Customer Base 53,455 53,455 53,455 53,455 53,455 304,992 Developed Technology 678,404 678,404 678,404 678,404 678,404 1,654,510 Film Library 87,000 87,000 87,000 87,000 87,000 489,300 Trademarks and Tradenames 11,000 11,000 11,000 11,000 11,000 73,485 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Subsequent to December 31, 2018, shareholders extended loans to the Company in the amount of approximately $104,300 for multiple debt agreements that have maturity dates ranging from April 2021 to May 2021, bear annual interest of 6% (11% default) and are convertible one dollar into one share of stock of Series C Preferred Stock that has been designated convertible into common stock at $0.15 per share and includes terms similar to the other Preferred Stock. A third-party advanced the company $50,000 on March 13, 2019 with verbal terms that included repayment in 45 days and a payback of $55,000. This equates to 10% interest on the amount advanced. There were no other terms on this. On March 19, 2019, the Company consummated a Securities Purchase Agreement dated March 15, 2019 with Geneva Roth for the purchase of a $68,000 Geneva Roth Convertible Promissory Note. This Geneva Roth Convertible Promissory Notes is part of a larger investment term sheet with Geneva Roth, at their option, to invest in the Company up to $975,000. The Geneva Roth Convertible Promissory Note is due March 15, 2020, pays interest at the rate of 12% per annum and gives the holder the right from time to time, and at any time during the period beginning 180 days from the origination date to the maturity date or date of default to convert all or any part of the outstanding balance into common stock of the Company limited to 4.99% of the outstanding common stock of the Company. The conversion price is 61% multiplied by the average of the two lowest trading prices for the common stock during the previous 20 trading days prior to the applicable conversion date. The Geneva Roth Convertible Promissory Note may be prepaid in whole or in part of the outstanding balance at 125% to 140% up to 180 days from origination. On March 25, 2019, TPT Global Tech, Inc. (the “Company”) consummated a Securities Purchase Agreement dated March 18, 2019 with Auctus Fund, LLC. (“Auctus”) for the purchase of a $600,000 Convertible Promissory Note (“Convertible Promissory Note”). The Convertible Promissory Note is due December 18, 2019, pays interest at the rate of 12% per annum and gives the holder the right from time to time, and at any time during the period beginning 180 days from the origination date or at the effective date of the registration of the underlying shares of common stock, which the holder has registration rights for, to convert all of the outstanding balance into common stock of the Company limited to 4.99% of the outstanding common stock of the Company. The conversion price is 50% multiplied by the average of the two lowest trading prices for the common stock during the previous 25 trading days prior to the applicable conversion date. The Convertible Promissory Note may be prepaid in full at 135% to 150% up to 180 days from origination. As part of the transaction, Auctus was issued 2,000,000 warrants to purchase 2,000,000 common shares of the Company at 70% of the current market price. Current market price means the average of the three lowest trading prices for our common stock during the ten-trading day period ending on the latest complete trading day prior to the date of the respective exercise notice. However, if the registration statement described above is declared effective on or before June 11, 2019, then, while such Registration Statement is effective, the current market price shall mean the lowest volume weighted average price for our common stock during the ten-trading day period ending on the last complete trading day prior to the conversion date. Effective April 3, the Company entered into an Asset Purchase Agreement for the acquisition of substantially all of the assets of SpeedConnect LLC (“SpeedConnect”) for $2 million and the assumption of all contracts and liabilities pertinent to operations. The Asset Purchase Agreement includes a deposit of $500,000, paid as part of entering into the Asset Purchase Agreement. Additionally, $500,000 is to be paid at closing after normal due diligence, audit and other conditions are met, anticipated to be in April of 2019. In addition, at the time of closing, the Company will enter into a Promissory Note to pay SpeedConnect in two equal installments of $500,000 plus applicable interest at 10% per annum each within 30 and 60 days, respectively, of closing. The closing date cannot be beyond June 30, 2019. In addition, on or before 90 days from the closing, the Company is to contribute $1 million in cash to the assets as working capital. The promissory note will include a security interest in all the assets until paid and a guaranty by the CEO of the Company, Stephen Thomas. SpeedConnect is as a national, predominantly rural, wireless telecommunications residential and commercial Internet Service Provider (ISP). The acquisition is expected to be completed by the end of April 2019. SpeedConnect’s primary business model is subscription based, monthly reoccurring revenues, from wireless delivered, high-speed Internet connections utilizing its company built and owned national network. SpeedConnect also resells third-party satellite Internet, DSL Internet, IP telephony and DISH TV products. Mr. Ogren, the founder, will stay on as the CEO of SpeedConnect for the Company for the next two years. |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Nature of Operations | The Company was originally incorporated in 1988 in the state of Florida. TPT Global, Inc., a Nevada corporation formed in June 2014, merged with Ally Pharma US, Inc., a Florida corporation, (“Ally Pharma”, formerly known as Gold Royalty Corporation) in a “reverse merger” wherein Ally Pharma issued 110,000,000 shares of Common Stock, or 80% ownership, to the owners of TPT Global, Inc. in exchange for all outstanding common stock of TPT Global Inc. and Ally Pharma agreed to change its name to TPT Global Tech, Inc. (jointly referred to as “the Company” or “TPTG”). The following acquisitions have resulted in entities which have been consolidated into TPTG. In 2014 the Company acquired all the assets of K Telecom and Wireless LLC (“K Telecom”) and Global Telecom International LLC (“Global Telecom”). Effective January 31, 2015, TPTG completed its acquisition of 100% of the outstanding stock of Copperhead Digital Holdings, Inc. (“Copperhead Digital”) and Subsidiaries, TruCom, LLC (“TruCom”), Nevada Utilities, Inc. (“Nevada Utilities”) and CityNet Arizona, LLC (“CityNet”). Effective September 30, 2016, the company acquired 100% ownership in San Diego Media Inc. (“SDM”). In October 2017, we entered into agreements to acquire Blue Collar, Inc. (“Blue Collar”) which closed as of September 1, 2018. We are based in San Diego, California, and operate as a Media Content Hub for Domestic and International syndication Technology/Telecommunications company operating on our own proprietary Global Digital Media TV and Telecommunications infrastructure platform and also provide technology solutions to businesses domestically and worldwide. We offer Software as a Service (SaaS), Technology Platform as a Service (PAAS), Cloud-based Unified Communication as a Service (UCaaS) and carrier-grade performance and support for businesses over our private IP MPLS fiber and wireless network in the United States. Our cloud-based UCaaS services allow businesses of any size to enjoy all the latest voice, data, media and collaboration features in today's global technology markets. We also operate as a Master Distributor for Nationwide Mobile Virtual network Operators (MVNO) and Independent Sales Organization (ISO) as a Master Distributor for Pre-Paid Cellphone services, Mobile phones, Cellphone Accessories and Global Roaming Cellphones. In addition, we create media marketing materials and content. |
Principles of Consolidation | Our consolidated financial statements include the accounts of K Telecom and Global Telecom, Copperhead Digital, SDM, Port 2 Port, and Blue Collar. All intercompany accounts and transactions have been eliminated in consolidation. |
Revenue Recognition | On January 1, 2018, we adopted the new accounting standard ASC 606, Revenue from Contracts with Customers The Company’s revenue generation for the last two years came from the following sources, which sources are explained in detail below. 2018 2017 Copperhead Digital $ 400,763 $ 867,896 K Telecom 119,860 490,241 San Diego Media 169,142 365,506 Blue Collar 219,474 — P2P 25,430 390,137 Other 2,400 1,380 Total Revenue $ 937,069 $ 2,115,160 Copperhead Digital: ISP and Telecom Revenue Copperhead Digital is a regional internet and telecom services provider operating in Arizona under the trade name Trucom. Copperhead Digital operates as a wireless telecommunications Internet Service Provider (“ISP”) facilitating both residential and commercial accounts. Copperhead Digital’s primary business model is subscription based, pre-paid monthly reoccurring revenues, from wireless delivered, high-speed internet connections. In addition, the company resells third-party satellite and DSL internet and IP telephony services. Revenue generated from sales of telecommunications services is recognized as the transaction with the customer is considered closed and the customer receives and accepts the services that were the result of the transaction. Due date is detailed on monthly invoices distributed to customer. Services billed monthly in advance are deferred to the proper period as needed. Certain of our products require specialized installation and equipment. For telecom products that include installation, if the installation meets the criteria to be considered a separate element, product revenue is recognized upon delivery, and installation revenue is recognized when the installation is complete. The Installation Technician collects the signed quote containing terms and conditions when installing the site equipment at customer premises. Revenue for installation services and equipment is billed separately from recurring ISP and telecom services, and is recognized when equipment is delivered and installation is completed. Revenue from ISP and telecom services is recognized monthly over the contractual period, or as services are rendered and accepted by the customer. The overwhelming majority of our revenue continues to be recognized when transactions occur. Since installation fees are generally small relative to the size of the overall contract and because most contracts are for a year or less, the impact of not recognizing installation fees over the contract is immaterial. K Telecom: Prepaid Phones and SIM Cards Revenue K Telecom generates revenue from reselling prepaid phones, SIM cards, and rechargeable minute traffic for prepaid phones to its customers (primarily retail outlets). Product sales occur at the customer’s locations, at which time delivery occurs and cash or check payment is received. The Company recognizes the revenue when they receive payment at the time of delivery. SDM: Ecommerce, Email Marketing and Web Design Services SDM generates revenue by providing ecommerce, email marketing and web design solutions to small and large commercial businesses, complete with monthly software support, updates and maintenance. Services are billed monthly. Platform infrastructure support is a prepaid service billed in monthly recurring increments. The services are billed a month in advance and due prior to services being rendered. The revenue is deferred when invoiced and booked in the month the service is provided. Software support services (including software upgrades) are billed in real time, on the first of the month. Web design service revenues are recognized upon completion of specific projects. Revenue is booked in the month the services are rendered and payments are due on the final day of the month. Blue Collar: Media Production Services Blue Collar creates original live action and animated content productions, and has produced hundreds of hours of material for the television, theatrical, home entertainment and new media markets. Blue Collar designs branding and marketing campaigns and has had agreements with some of the world’s largest companies including PepsiCo, Intel, HP, WalMart and many other Fortune 500 companies. Additionally, they create motion picture, television and home entertainment marketing campaigns for studios including Sony, DreamWorks, Twentieth Century Fox, Universal Studios, Paramount Studios, and Warner Brothers. With regard to revenue recognition, Blue Collar receives an agreement from each client to perform defined work. Some agreements are written, some are verbal. Work may include creation of marketing materials and/or content creation. Some work may be short term and take weeks to create and some work may be longer and take months to create. There are instances where customer agreements segregate identifiable obligations (like filming on site vs. film editing and final production) with separate transaction pricing. The performance obligation is generally satisfied upon delivery of such film or production products, at which time revenue is recognized. P2P Asset Activity: Telecom Revenue Port 2 Port Communications (P2P) is a U.S. domestic minutes provider that sells wholesale long distance domestic telecom minutes to other domestic U.S. carriers. A service is defined as wholesale telecom minute based on a per-minute and per-destination rate basis. A series of services for P2P would be substantially the same and would include a pattern of transfers of services to a customer on a per-minute flat rate basis for all destinations in a specified geographic. Revenue generated from sales of minute services are recognized when weekly invoices are generated and distributed. |
Share-based Compensation | The Company is required to measure and recognize compensation expense for all share-based payment awards (including stock options) made to employees and directors based on estimated fair value. Compensation expense for equity-classified awards is measured at the grant date based on the fair value of the award and is recognized as an expense in earnings over the requisite service period. The Company records compensation expense related to non-employees that are awarded stock in conjunction with selling goods or services and recognizes compensation expenses over the vesting period of such awards. |
Income Taxes | Deferred tax assets and liabilities are recognized for the future tax consequences attributable to 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 year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in our income tax provision in the period of enactment. We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversal of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations, including taxable income in carryback periods. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce our income tax provision. We account for uncertain tax positions using a “more-likely-than-not” recognition threshold. We evaluate uncertain tax positions on a quarterly basis and consider various factors, including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. It is our policy to record costs associated with interest and penalties related to tax in the selling, general and administrative line of the consolidated statements of operations. |
Cash and Cash Equivalents | The company considers all investments with a maturity date of three months or less when purchased to be cash equivalents. There are no cash equivalents as of December 31, 2018 and 2017. |
Accounts Receivable | We establish an allowance for potential uncollectible accounts receivable. All accounts receivable 60 days past due are considered uncollectible unless there are circumstances that support collectability. Those circumstances are documented. As of December 31, 2018 and 2017, the allowance for uncollectible accounts receivable was $49,191 and $38,022, respectively. Receivables are charged off when collection efforts cease. |
Property and Equipment | Property and equipment are stated at cost or fair value if acquired as part of a business combination. Depreciation is computed by the straight-line method and is charged to operations over the estimated useful lives of the assets. Maintenance and repairs are charged to expense as incurred. The carrying amount of accumulated depreciation of assets sold or retired are removed from the accounts in the year of disposal and any resulting gain or loss in s included in results of operations. The estimated useful lives of property and equipment are telecommunications network - 20 years, telecommunications equipment - 7 to 10 years, and computers and office equipment - 3 years. |
Goodwill and Intangible Assets | Goodwill relates to amounts that arose in connection with our various business combinations and represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets when accounted for using the acquisition method of accounting. Goodwill is not amortized, but it is subject to periodic review for impairment. We test goodwill and other intangible assets with indefinite lives at the reporting unit level for impairment on an annual basis and between annual tests, if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying value. Events that would indicate potential impairment and trigger an interim impairment assessment include, but are not limited to, current economic and market conditions, including a decline in market capitalization, a significant adverse change in legal factors, business climate or operational performance of the business and an adverse action or assessment by a regulator. In performing the annual goodwill impairment test, we utilize the two-step approach. The first step, or Step 1, requires a comparison of the carrying value of each reporting unit to its estimated fair value. To estimate the fair value of our reporting units for Step 1, we use a combination of the income approach, the market comparable approach and the market transaction approach. The income approach is based on a discounted cash flow analysis, or DCF approach, and calculates the fair value by estimating the after-tax cash flows attributable to a reporting unit and then discounting the after-tax cash flows to a present value, using a risk-adjusted discount rate. Assumptions used in the DCF approach require the exercise of significant judgment, including judgment about appropriate discount rates and terminal values, growth rates and the amount and timing of expected future cash flows. The forecasted cash flows are based on our most recent operating activities and assumed growth rates. We believe our assumptions are consistent with the plans and estimates used to manage the underlying businesses. The discount rates, which are intended to reflect the risks inherent in future cash flow projections, used in the DCF approach are based on estimates of the weighted-average cost of capital, or WACC, of market participants relative to each respective reporting unit. The market approaches consider comparable and transactional market data based on multiples of revenue or earnings before interest, taxes, depreciation and amortization, or EBITDA, based on trading multiples of selected guidelines companies and deal multiples of selected target companies. If the carrying value of a reporting unit exceeds its estimated fair value, we are required to perform the second step, or Step 2, of the annual goodwill impairment test to measure the amount of impairment loss, if any. Step 2 of the goodwill impairment test compares the implied fair value of a reporting unit’s goodwill to its carrying value. The implied fair value of goodwill is calculated as the difference between the fair value of the reporting unit and the estimated fair value of its assets and liabilities. To the extent this amount is below the carrying value of goodwill, an impairment charge is recorded to write down the carrying value to its implied value. Based on our impairment testing, we do not consider an impairment charge to goodwill necessary as of December 31, 2018 and 2017. Impairment charges related to goodwill, if any, have no impact on our cash balances. Impairment of Other Long-lived Tangible and Intangible Assets Our intangible assets consist primarily of customer relationships, developed technology and the film library. The majority of our intangible assets were recorded in connection with our various business combinations. Our intangible assets are recorded at fair value at the time of their acquisition. We amortize intangible assets over their estimated useful lives. The estimated useful lives of the individual categories of intangible assets were based on the nature of the applicable intangible asset and the expected future cash flows to be derived from the intangible asset. Amortization of intangible assets with finite lives is recognized over the shorter of the respective lives of the agreement or the period of time the intangible assets are expected to contribute to future cash flows. We amortize our finite-lived intangible assets based on patterns on which the respective economic benefits are expected to be realized. We amortize the majority of our intangible assets on a straight-line basis from three to nine years, as this methodology most closely approximates the pattern of economic benefits for these assets. We evaluate long-lived tangible and intangible assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If indicators of impairment are present with respect to long-lived tangible and intangible assets used in operations and undiscounted future cash flows are not expected to be sufficient to recover the assets’ carrying amount, additional analysis is performed as appropriate and the carrying value of the long-lived assets is reduced to the estimated fair value, if this is lower, and an impairment loss is charged to expense in the period the impairment is identified. Factors we generally consider important which could trigger an impairment review on the carrying value of other long-lived tangible and intangible assets include the following: (1) significant underperformance relative to expected historical or projected future operating results, (2) significant changes in the manner of our use of acquired assets or the strategy for our overall business, (3) underutilization of our tangible assets, (4) discontinuance of product lines by ourselves or our customers, (5) significant negative industry or economic trends, (6) significant decline in our stock price for a sustained period, (7) significant decline in our market capitalization relative to net book value and (8) goodwill impairment identified during an impairment review. As of December 31, 2018 and 2017, we performed evaluations that resulted in no impairments of intangible assets. Business Acquisitions Our business acquisitions have historically been made at prices above the fair value of the assets acquired and liabilities assumed, resulting in goodwill or some identifiable intangible asset. Significant judgment is required in estimating the fair value of intangible assets and in assigning their respective useful lives. The fair value estimates are based on available historical information and on future expectations and assumptions deemed reasonable by management but are inherently uncertain. We generally employ the income method to estimate the fair value of intangible assets, which is based on forecasts of the expected future cash flows attributable to the respective assets. Significant estimates and assumptions inherent in the valuations reflect a consideration of other marketplace participants and include the amount and timing of future cash flows (including expected growth rates and profitability), the underlying product life cycles, economic barriers to entry, a brand’s relative market position and the discount rate applied to the cash flows. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions. Net assets acquired are recorded at their fair value and are subject to adjustment upon finalization of the fair value analysis. |
Basic and Diluted Net Loss Per Share | The Company computes net income (loss) per share in accordance with ASC 260, “Earning per Share””. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of thee income statement. Basic EPS is computed by dividing net income (loss) available to common shareholder (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of December 31, 2018 and 2017, the Company had shares that were potentially common stock equivalents as follows: 2018 2017 Series A Preferred Stock 128,056,506 62,671,309 Series B Preferred Stock 2,588,693 2,588,693 Stock Options 3,093,120 93,520 Convertible Debt 4,252,555 1,339,536 137,990,874 66,599,536 |
Concentration of Credit Risk, Off-Balance Sheet Risks and Other Risks and Uncertainties | Financial instruments that potentially subject us to concentration of credit risk primarily consist of cash and cash equivalents and accounts receivable. We invest our excess cash primarily in high quality securities and limit the amount of our credit exposure to any one financial institution. We do not require collateral or other securities to support customer receivables; however, we perform on-going credit evaluations of our customers and maintain allowances for potential credit losses. At December 31, 2018 and 2017, two customer accounts receivable balances were 28% and 0%, respectively, of our aggregate accounts receivable or revenues. |
Financial Instruments and Fair Value of Financial Instruments | Our primary financial instruments at December 31, 2018 and 2017 consisted of cash equivalents, accounts receivable, accounts payable and debt. We apply fair value measurement accounting to either record or disclose the value of our financial assets and liabilities in our financial statements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value hierarchy requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. Described below are the three levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 |
Research and Development | Our research and development programs focus on telecommunications products and services. Research and development costs are expensed as incurred. Any payments received from external parties to fund our research and development activities reduce the recorded research and development expenses. |
Advertising Costs | Advertising costs are expensed as incurred. The Company incurred advertising costs of $220 and $1,350 for the years ended December 31, 2018 and 2017, respectively. |
Use of Estimates | The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The Company’s consolidated financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented. |
Derivative Financial Instruments | Derivative financial instruments, as defined in ASC 815, “Accounting for Derivative Financial Instruments and Hedging Activities”, consist of financial instruments or other contracts that contain a notional amount and one or more underlying (e.g. interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or, in rare instances, assets. The Company does not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However, the Company had issued financial instruments including convertible promissory notes payable with features during 2017 that were either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or (iii) may be net-cash settled by the counterparty. As required by ASC 815, in certain instances, these instruments are required to be carried as derivative liabilities, at fair value, in our financial statements. The Company estimates the fair values of derivative financial instruments using the Black-Scholes option valuation technique. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates (such as volatility, estimated life and interest rates) that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of our common stock, which has a high-historical volatility. Since derivative financial instruments are initially and subsequently carried at fair values, the Company’s operating results will reflect the volatility in these estimate and assumption changes. During September 2017, the Company issued convertible promissory notes in the amount of $55,000 (comprised of two $25,000 notes to two related parties and one $5,000 note to a former officer of CDH), all which are due May 1, 2020 and bear 6% annual interest and are convertible into common stock of the Company at 60% of the average closing market share price for the prior 10 trading days. Subsequent to September 30, 2017 and prior to December 31, 2017, the Company issued an additional $12,000 of the same convertible promissory notes with the same conversion features. However, in November 2017, all of these convertible promissory notes included as derivative financial instruments totaling $67,000 were amended such that the conversion price became fixed at $0.25 per share, and the derivative features were eliminated. As such, the derivative accounting as of and through September 31, 2017 was reversed and there is no resulting derivative accounting that is evident in the 2018 or 2017 financial statements. |
Recently Adopted Accounting Pronouncements | On January 1, 2018, we adopted the new accounting standard ASC 606, Revenue from Contracts with Customers In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which amends ASC 718, Compensation – Stock Compensation. This ASU requires that most of the guidance related to stock compensation granted to employees be followed for non-employees, including the measurement date, valuation approach, and performance conditions. The expense is recognized in the same period as though cash were paid for the good or service. The effective date is the first quarter of fiscal year 2020, with early adoption permitted, including in interim periods. The ASU has been adopted using a modified-retrospective transition approach. The adoption is not considered to have a material effect on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and subsequent amendments to the initial guidance: ASU 2017-13, ASU 2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01 (collectively, Topic 842). Topic 842 requires lessees to classify leases as either finance or operating leases and to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of the lease classification. We expect to adopt Topic 842 using the effective date, January 2019, as the date of our initial application of the standard. Consequently, financial information for the comparative periods will not be updated. We expect that our finance and operating lease commitments will be subject to the new standard and recognized as finance and operating lease liabilities and right-of-use assets upon our adoption of Topic 842, which will increase our total assets and total liabilities that we report relative to such amounts prior to adoption. Management has reviewed other recently issued accounting pronouncements and have determined there are not any that would have a material impact on the condensed consolidated financial statements. |
Reclassifications | Certain prior period amounts were reclassified to conform to the current period presentation. Specifically, we reclassified 2017 Debt- related party in the amount of $62,000 to long-term related party convertible debt to conform to current year presentation. |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Disaggregation of revenue | 2018 2017 Copperhead Digital $ 400,763 $ 867,896 K Telecom 119,860 490,241 San Diego Media 169,142 365,506 Blue Collar 219,474 — P2P 25,430 390,137 Other 2,400 1,380 Total Revenue $ 937,069 $ 2,115,160 |
Potentially dilutive securities | 2018 2017 Series A Preferred Stock 128,056,506 62,671,309 Series B Preferred Stock 2,588,693 2,588,693 Stock Options 3,093,120 93,520 Convertible Debt 4,252,555 1,339,536 137,990,874 66,599,536 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Purchase price allocation | TPT Global Tech Effective 9-1-18 Purchaser TPT Global Tech Consideration Given: Common Stock 6,500,000 6,500,000 Estimated Value $ .13 Consideration Share Value 845,000 Note Payable $ 1,533,217 Liabilities: Bank debt 500,500 Lease payable 20,020 Accounts and other payables 386,652 Total Consideration Value $ 3,285,389 Consideration Received: Intangible asset $ 1,677,000 Goodwill 853,366 Assets Current assets 297,704 Fixed assets 445,362 Other assets 11,957 Total Consideration Received $ 3,285,389 |
Proforma results | Had the acquisition occurred on January 1, 2017, condensed proforma statement of operations for the years ended December 31, 2018 and 2017 would be as follows: 2018 2017 Revenue $ 2,355,467 $ 3,966,866 Cost of Sales 2,350,657 3,226,912 Gross Profit (Loss) $ 4,810 $ 739,954 Expenses (4,768,116 ) (4,058,844 ) Interest Expense and impairment (275,935 ) (694,637 ) Income taxes — — Net Loss $ (5,039,241 ) $ (4,013,527 ) Included in the consolidated statement of operations for the year ended December 31, 2018 are the results of operations for Blue Collar for the four months ended December 31 which are the following: 2018 Revenue $ 219,474 Cost of Sales 215,973 Gross Profit (Loss) $ 3,501 Expenses (301,105 ) Interest Expense (66,571 ) Income taxes — Net Loss $ (364,175 ) |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | 2018 2017 Property and equipment: Telecommunications fiber and equipment $ 3,274,045 3,274,045 Film production equipment 369,903 — Office furniture and equipment 82,014 23,898 Leasehold improvements 18,679 — Accumulated depreciation (697,699 ) (483,876 ) Property and equipment, net $ 3,046,942 2,814,067 |
DEBT FINANCING ARRANGEMENTS (Ta
DEBT FINANCING ARRANGEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt financing arrangements | 2018 2017 Business loans and advances (1) $ 615,692 114,016 Convertible debt (2) 15,000 5,000 Factoring agreement (3) 101,244 78,909 Debt – third party $ 731,936 197,925 Line of credit, related party secured by assets (4) $ 3,043,390 3,043,390 Debt– other related party, net of discounts (5) 5,912,898 4,350,000 Convertible debt – related party (2) 801,888 312,000 Shareholder debt (6) 181,694 164,200 Debt – related party $ 9,939,870 7,869,590 Total financing arrangements $ 10,671,806 8,067,515 Less current portion: Debt – third party $ (716,936 ) (195,106 ) - third party, convertible (10,000 ) — Debt – related party, net of discount (9,137,982 ) (7,557,590 ) – related party, convertible (202,688 ) (250,000 ) (10,067,606 ) (8,002,696 ) Total long term debt $ 604,200 64,819 (1) The terms of $40,000 of this balance are similar to that of the Line of Credit which bears interest at adjustable rates, 1 month Libor plus 2%, 4.34% as of December 31, 2018, and is secured by assets of the Company, is due August 31, 2019, as amended, and included 8,000 stock options as part of the terms (see Note 7). $500,500 is a line of credit that Blue Collar has with a bank, bears interest at Prime plus 1.125%, 6.38% as of December 31, 2018, and is due March 25, 2021. $10,000 is an amount the bears interest at 6%, subsequently increased to 11%, as it was due and not repaid on October 10, 2018. The remaining balances generally bear interest at approximately 10%, have maturity dates that are due on demand or are past due, are unsecured and are classified as current in the balance sheets. (2) During 2017, the Company issued convertible promissory notes in the amount of $67,000 (comprised of $62,000 from two related parties and $5,000 from a former officer of CDH), all which are due May 1, 2020 and bear 6% annual interest (12% default interest rate). The convertible promissory notes are convertible, as amended, at $0.25 per share. During 2016, the Company acquired SDM which consideration included a convertible promissory note for $250,000 due August 31, 2018, as amended, does not bear interest, unless delinquent in which the interest is 12% per annum, and is convertible into common stock at $1.00 per share. The SDM balance is $202,688 as of December 31, 2018. During 2018, the Company issued convertible promissory notes in the amount of $537,200 to related parties and $10,000 to a non-related party which bear interest at 6% (11% default interest rate), are due 30 months from issuance and are convertible into Series C Preferred Stock at $1.00 per share. Because the Series C Preferred Stock has a conversion price of $0.15 per share, the issuance of Series C Preferred Stock promissory notes will cause a beneficial conversion feature of approximately $38,479 upon exercise of the convertible promissory notes. (3) The Factoring Agreement with full recourse, due August 31, 2019, as amended, was established in June 2016 with a company that is controlled by a shareholder and is personally guaranteed by an officer of the Company. The Factoring Agreement is such that the Company pays a discount of 2% per each 30-day period for each advance received against accounts receivable or future billings. The Company was advanced funds from the Factoring Agreement for which $101,244 and $78,909 in principal remained unpaid as of December 31, 2018 and 2017, respectively. (4) The Line of Credit originated with a bank and was secured by the personal assets of certain shareholders of Copperhead Digital. During 2016, the Line of Credit was assigned to the Copperhead Digital shareholders, who subsequent to the Copperhead Digital acquisition by TPTG became shareholders of TPTG, and the secured personal assets were used to pay off the bank. The Line of Credit bears a variable interest rate based on the 1 Month LIBOR plus 2.0%, 3.91% as of December 31, 2018, is payable monthly, and is secured by the assets of the Company. 1,000,000 shares of Common Stock of the Company have been reserved to accomplish raising the funds to pay off the Line of Credit. Since assignment of the Line of Credit to certain shareholders, which balance on the date of assignment was $2,597,790, those shareholders have loaned the Company $445,600 under the similar terms and conditions as the line of credit but most of which were also given stock options totaling 85,120 (see Note 7) and is due, as amended, August 31, 2019. During the year ended December 31, 2018, those same shareholders and one other have loaned the Company money in the form of convertible loans of $537,200 described in (2) above. (5) $350,000 represents cash due to the prior owners of the technology acquired in December 2016 from the owner of the Lion Phone which is due to be paid as agreed by TPTG and the former owners of the Lion Phone technology and has not been determined. $4,000,000 represents a promissory note included as part of the consideration of ViewMe Live technology acquired in 2017, later agreed to as being due and payable in full, with no interest with $2,000,000 from debt proceeds intended to be obtained in 2018 and the remainder from proceeds from the second Company public offering intended to be in 2019. On September 1, 2018, the Company closed on its acquisition of Blue Collar. Part of the acquisition included a promissory note of $1,600,000 (fair value of $1,533,217, net of a discount to fair value of $66,783 which is being amortized through expense through the due date of May 1, 2019) and interest at 3% from the date of closure. $29,681 was amortized as interest expense in the year ended December 31, 2018. The promissory note is secured by the assets of Blue Collar. (6) The shareholder debt represents funds given to TPTG or subsidiaries by officers and managers of the Company as working capital. There are no written terms of repayment or interest that is being accrued to these amounts and they will only be paid back, according to management, if cash flows support it. They are classified as current in the balance sheets. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income tax expense (benefit) | Current: 2018 2017 Federal State and local $ — — Total Current $ — — Deferred: Federal State and local benefit $ (1,129,273 ) (791,570 ) Net operating loss, net of state tax effect (84,070 ) (47,462 ) Meals and entertainment 2,183 2,736 Stock based expenses 235,256 — Other 84,071 56,796 Allowance 891,833 779,500 Total Benefit $ — — |
Income tax rate reconciliation | 2018 2017 Statutory rate 21 % 21 % Change in valuation allowance (21 %) (21 %) Stock based compensation (0 %) (0 %) Net operating loss, net of state tax effect (1 %) (1 %) Other (1 %) (1 %) Total — — |
Deferred tax assets (liabilities) | Current deferred tax assets (liabilities): 2018 2017 Valuation allowance $ — — Total current deferred tax asset (liability) $ — — Noncurrent deferred tax assets (liabilities): Intangible assets amortization $ 620,447 460,773 Net operating loss carry forwards 1,681,403 949,243 Stock base compensation 1,287,336 1,287,336 Other 98,927 98,927 Less; Valuation allowance $ (3,688,113 ) (2,796,279 ) Total noncurrent deferred tax asset (liability) — — Total deferred tax asset (liability) $ — — |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
STOCKHOLDERS' DEFICIT | |
Stock option activity | Options Outstanding Vested Vesting Period Exercise Price Outstanding and Exercisable Expiration Date December 31, 2016 ---- --- --- --- ------ Granted 93,120 93,120 100% at issue $0.05 to $0.22 12-31-19 December 31, 2017 93,120 93,120 --- $0.05 to $0.22 12-31-19 Granted 3,000,000 --- 12 to 18 months $0.10 2-28-20 to 3-20-21 December 31, 2018 3,093,120 1,954,230 $0.05 to $0.22 12-31-19 to 3-20-21 |
Assumptions | (1) Dividend yield of 0% (2) expected annual volatility of 307% - 311% (3) discount rate of 2.2% to 2.3% (4) expected life of 2 years, and (5) estimated fair value of the Company’s common $0.125 to $0.155 per share. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Accounts payable and accrued expenses | 2018 2017 Accounts payable: Related parties (1) $ 741,577 $ 216,732 General operating 3,037,601 2,040,947 Credit card balances 246,949 95,689 Accrued expenses; 33,063 25,958 Taxes and fees payable 629,462 21,702 Total $ 4,687,652 $ 2,401,028 (1) Relates to amounts due to management and members of the Board of Directors according to verbal and written agreements that have not been paid as of period end. |
Future minimum lease payments | Obligation 2019 In Default Total Telecom Equipment Finance (1) $ 449,103 — $ 449,103 Telecommunications Equipment Lease (2) — 101,347 101,347 Production Equipment Lease (3) 10,357 — 10,357 Total $ 459,460 101,347 $ 560,807 (1) The Telecom Equipment Lease is with an entity owned and controlled by shareholders of the Company and is due August 31, 2019, as amended. (2) The Telecommunications Equipment Lease requires payments of $3,702 per month and is in default. See discussion below in Other Commitments and Contingencies. In December 2017, the Company learned that the telecommunications equipment lease identified herein for $101,348 was included in a default judgement in a non-jurisdictional state of Pennsylvania for $169,474 from a lawsuit by the lessor. Management is working with the lessor to settle this matter including a proposal for the equipment to be returned to the lessor and then a negotiated amount for any deficiency between the value given for the retired equipment and the $101,348. When concluded, management does not believe the results will be significantly different than the liability of $101,348 and accrued fees and interest of $27,070 recorded. (3) The Production Equipment Lease, maturing on April 15, 2019, required payments of $2,535 per month and includes imputed interest at 8.5%. The lease was entered into in 2015 for the purchase of equipment in the amount of approximately $120,000 (see Note 2). |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and intangible assets | December 31, 2018 Gross carrying amount (1) Accumulated Amortization Net Book Value Useful Life Customer Base $ 1,947,200 (1,374,933 ) 572,267 3-10 Developed Technology $ 6,105,600 (1,059,070 ) 5,046,530 9 Film Library $ 957,000 (32,700 ) 924,300 11 Trademarks and Tradenames $ 132,000 (3,515 ) 128,485 12 $ 9,141,800 (2,470,218 ) 6,671,582 Goodwill $ 924,361 — 924,361 — (1) Increases from the prior year are from the acquisition of Blue Collar. See more details on this acquisition in Note 2 to these consolidated financial statements. December 31, 2017 Gross carrying amount Accumulated Amortization Net Book Value Useful Life Customer Base $ 1,422,100 (1,392,102 ) 29,998 3 Developed Technology 6,105,600 (380,665 ) 5,724,935 9 $ 7,527,700 (1,772,767 ) 5,754,933 Goodwill $ 70,995 — 70,995 — |
Amortization of intangible assets | 2019 2020 2021 2022 2023 Beyond Customer Base 53,455 53,455 53,455 53,455 53,455 304,992 Developed Technology 678,404 678,404 678,404 678,404 678,404 1,654,510 Film Library 87,000 87,000 87,000 87,000 87,000 489,300 Trademarks and Tradenames 11,000 11,000 11,000 11,000 11,000 73,485 |
DESCRIPTION OF BUSINESS AND S_4
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total revenues | $ 937,069 | $ 2,115,160 |
Copperhead Digital | ||
Total revenues | 400,763 | 867,896 |
K Telecom | ||
Total revenues | 119,860 | 490,241 |
San Diego Media | ||
Total revenues | 169,142 | 365,506 |
Blue Collar | ||
Total revenues | 219,474 | 0 |
P2P | ||
Total revenues | 25,430 | 390,137 |
Other | ||
Total revenues | $ 2,400 | $ 1,380 |
DESCRIPTION OF BUSINESS AND S_5
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Potentially dilutive securities | 137,990,874 | 66,599,536 |
Series A Preferred Stock | ||
Potentially dilutive securities | 128,056,506 | 62,671,309 |
Series B Preferred Stock | ||
Potentially dilutive securities | 2,588,693 | 2,588,693 |
Stock Options | ||
Potentially dilutive securities | 3,093,120 | 93,520 |
Convertible Debt | ||
Potentially dilutive securities | 4,252,555 | 1,339,536 |
DESCRIPTION OF BUSINESS AND S_6
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash equivalents | $ 0 | $ 0 |
Allowance for uncollectible accounts receivable | 49,191 | 38,022 |
Impairment of goodwill | 0 | 0 |
Advertising costs | $ 220 | $ 1,350 |
Two Customers | Accounts Receivable | ||
Concentration risk | 28.00% | 0.00% |
Telecommunications Network | ||
Estimated useful life | 20 years | |
Telecommunications Equipment | Minimum | ||
Estimated useful life | 7 years | |
Telecommunications Equipment | Maximum | ||
Estimated useful life | 10 years | |
Computers and Office Equipment | ||
Estimated useful life | 3 years |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Consideration Received: | ||
Goodwill | $ 924,361 | $ 70,995 |
Blue Collar | ||
Common stock | 6,500,000 | |
Total consideration | $ 6,500,000 | |
Estimated value | $ 0.13 | |
Consideration share value | $ 845,000 | |
Note payable | 1,533,217 | |
Liabilities: | ||
Bank debt | 500,500 | |
Lease payable | 20,020 | |
Accounts and other payables | 386,652 | |
Total consideration value | 3,285,389 | |
Consideration Received: | ||
Intangible asset | 1,677,000 | |
Goodwill | 853,366 | |
Assets | ||
Current assets | 297,704 | |
Fixed assets | 445,362 | |
Other assets | 11,957 | |
Total consideration received | $ 3,285,389 |
ACQUISITIONS (Details 1)
ACQUISITIONS (Details 1) - Blue Collar - USD ($) | 4 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | $ 219,474 | $ 2,355,467 | $ 3,966,866 |
Cost of sales | 215,973 | 2,350,657 | 3,226,912 |
Gross profit (loss) | 3,501 | 4,810 | 739,954 |
Expenses | (301,105) | (4,768,116) | (4,058,844) |
Interest expense and impairment | (66,571) | (275,935) | (694,637) |
Income taxes | 0 | 0 | 0 |
Net loss | $ (364,175) | $ (5,039,241) | $ (4,013,527) |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Going Concern [Abstract] | ||
Net loss | $ (5,377,489) | $ (3,807,401) |
Net cash used in operating activities | (916,407) | (750,408) |
Net cash provided by financing activities | $ 871,199 | $ 693,502 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accumulated depreciation | $ (697,699) | $ (483,876) |
Property and equipment, net | 3,046,942 | 2,814,067 |
Telecommunications Fiber and Equipment | ||
Property, plant and equipment, gross | 3,274,045 | 3,274,045 |
Film Production Equipment | ||
Property, plant and equipment, gross | 369,903 | 0 |
Office Furniture and Equipment | ||
Property, plant and equipment, gross | 82,014 | 23,898 |
Leasehold Improvements | ||
Property, plant and equipment, gross | $ 18,679 | $ 0 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 213,823 | $ 175,492 |
DEBT FINANCING ARRANGEMENTS (De
DEBT FINANCING ARRANGEMENTS (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |||
Business loans and advances, net of discounts | [1] | $ 615,692 | $ 114,016 |
Convertible notes payable, net of discounts | [2] | 15,000 | 5,000 |
Factoring agreement | [3] | 101,244 | 78,909 |
Debt - third party | 731,936 | 197,925 | |
Line of credit, related party secured by assets | [4] | 3,043,390 | 3,043,390 |
Debt - other related party, net of discounts | [5] | 5,912,898 | 4,350,000 |
Convertible debt - related party | [2] | 801,888 | 312,000 |
Shareholder debt | [6] | 181,694 | 164,200 |
Debt - related party | 9,939,870 | 7,869,590 | |
Total financing arrangements | 10,671,806 | 8,067,515 | |
Less current liabilities: | |||
Business loans, advances and agreements | (716,936) | (195,106) | |
Convertible notes payable, net of discount | (10,000) | 0 | |
Notes payable - related parties, net of discount | (9,137,982) | (7,557,590) | |
Convertible notes payable - related party | (202,688) | (250,000) | |
Total | (10,067,606) | (8,002,696) | |
Total non-current liabilities | $ 604,200 | $ 64,819 | |
[1] | The terms of $40,000 of this balance are similar to that of the Line of Credit which bears interest at adjustable rates, 1 month Libor plus 2%, 4.34% as of December 31, 2018, and is secured by assets of the Company, is due August 31, 2019, as amended, and included 8,000 stock options as part of the terms (see Note 7). $500,500 is a line of credit that Blue Collar has with a bank, bears interest at Prime plus 1.125%, 6.38% as of December 31, 2018, and is due March 25, 2021. $10,000 is an amount the bears interest at 6%, subsequently increased to 11%, as it was due and not repaid on October 10, 2018. The remaining balances generally bear interest at approximately 10%, have maturity dates that are due on demand or are past due, are unsecured and are classified as current in the balance sheets. | ||
[2] | During 2017, the Company issued convertible promissory notes in the amount of $67,000 (comprised of $62,000 from two related parties and $5,000 from a former officer of CDH), all which are due May 1, 2020 and bear 6% annual interest (12% default interest rate). The convertible promissory notes are convertible, as amended, at $0.25 per share. During 2016, the Company acquired SDM which consideration included a convertible promissory note for $250,000 due August 31, 2018, as amended, does not bear interest, unless delinquent in which the interest is 12% per annum, and is convertible into common stock at $1.00 per share. The SDM balance is $202,688 as of December 31, 2018. During 2018, the Company issued convertible promissory notes in the amount of $537,200 to related parties and $10,000 to a non-related party which bear interest at 6% (11% default interest rate), are due 30 months from issuance and are convertible into Series C Preferred Stock at $1.00 per share. Because the Series C Preferred Stock has a conversion price of $0.15 per share, the issuance of Series C Preferred Stock promissory notes will cause a beneficial conversion feature of approximately $38,479 upon exercise of the convertible promissory notes. | ||
[3] | The Factoring Agreement with full recourse, due August 31, 2019, as amended, was established in June 2016 with a company that is controlled by a shareholder and is personally guaranteed by an officer of the Company. The Factoring Agreement is such that the Company pays a discount of 2% per each 30-day period for each advance received against accounts receivable or future billings. The Company was advanced funds from the Factoring Agreement for which $101,244 and $78,909 in principal remained unpaid as of December 31, 2018 and 2017, respectively. | ||
[4] | The Line of Credit originated with a bank and was secured by the personal assets of certain shareholders of Copperhead Digital. During 2016, the Line of Credit was assigned to the Copperhead Digital shareholders, who subsequent to the Copperhead Digital acquisition by TPTG became shareholders of TPTG, and the secured personal assets were used to pay off the bank. The Line of Credit bears a variable interest rate based on the 1 Month LIBOR plus 2.0%, 3.91% as of December 31, 2018, is payable monthly, and is secured by the assets of the Company. 1,000,000 shares of Common Stock of the Company have been reserved to accomplish raising the funds to pay off the Line of Credit. Since assignment of the Line of Credit to certain shareholders, which balance on the date of assignment was $2,597,790, those shareholders have loaned the Company $445,600 under the similar terms and conditions as the line of credit but most of which were also given stock options totaling 85,120 (see Note 7) and is due, as amended, August 31, 2019. During the year ended December 31, 2018, those same shareholders and one other have loaned the Company money in the form of convertible loans of $537,200 described in (2) above. | ||
[5] | $350,000 represents cash due to the prior owners of the technology acquired in December 2016 from the owner of the Lion Phone which is due to be paid as agreed by TPTG and the former owners of the Lion Phone technology and has not been determined. $4,000,000 represents a promissory note included as part of the consideration of ViewMe Live technology acquired in 2017, later agreed to as being due and payable in full, with no interest with $2,000,000 from debt proceeds intended to be obtained in 2018 and the remainder from proceeds from the second Company public offering intended to be in 2019. On September 1, 2018, the Company closed on its acquisition of Blue Collar. Part of the acquisition included a promissory note of $1,600,000 (fair value of $1,533,217, net of a discount to fair value of $66,783 which is being amortized through expense through the due date of May 1, 2019) and interest at 3% from the date of closure. $29,681 was amortized as interest expense in the year ended December 31, 2018. The promissory note is secured by the assets of Blue Collar. | ||
[6] | The shareholder debt represents funds given to TPTG or subsidiaries by officers and managers of the Company as working capital. There are no written terms of repayment or interest that is being accrued to these amounts and they will only be paid back, according to management, if cash flows support it. They are classified as current in the balance sheets. |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | ||
Federal state and local | $ 0 | $ 0 |
Total current | 0 | 0 |
Deferred: | ||
Federal State and local benefit | (1,129,273) | (791,570) |
Net operating loss, net of state tax effect | (84,070) | (47,462) |
Meals and entertainment | 2,183 | 2,736 |
Stock based expenses | 235,256 | 0 |
Other | 84,071 | 56,796 |
Allowance | 891,833 | 779,500 |
Total benefit | $ 0 | $ 0 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Statutory rate | 21.00% | 21.00% |
Change in valuation allowance | (21.00%) | (21.00%) |
Stock based compensation | 0.00% | 0.00% |
Net operating loss, net of state tax effect | (1.00%) | (1.00%) |
Other | (1.00%) | (1.00%) |
Total | 0.00% | 0.00% |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current deferred tax assets (liabilities): | ||
Valuation allowance | $ 0 | $ 0 |
Total current deferred tax asset (liability) | 0 | 0 |
Noncurrent deferred tax assets (liabilities): | ||
Intangible assets amortization | 620,447 | 460,773 |
Net operating loss carry forwards | 1,681,403 | 949,243 |
Stock based compensation | 1,287,336 | 1,287,336 |
Other | 98,927 | 98,927 |
Less: valuation allowance | (3,688,113) | (2,796,279) |
Total noncurrent deferred tax asset (liability) | 0 | 0 |
Total deferred tax asset (liability) | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forwards | $ 8,000,000 | $ 4,500,000 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Options outstanding, beginning | 93,120 | 0 |
Options granted | 3,000,000 | 93,120 |
Options outstanding, ending | 3,093,120 | 93,120 |
Options vested, beginning | 93,120 | 0 |
Options granted | 0 | 93,120 |
Options vested, ending | 1,954,230 | 93,120 |
Vesting period percentage | 100.00% | |
Exercise price outstanding and exercisable, beginning | $ .00 | |
Exercise price granted | $ .10 | |
Granted expiration date | Dec. 31, 2019 | |
Expiration date | Dec. 31, 2019 | |
Minimum | ||
Vesting period in months | 12 months | |
Exercise price outstanding and exercisable, beginning | $ .05 | |
Exercise price granted | $ 0.05 | |
Exercise price outstanding and exercisable, ending | $ 0.05 | .05 |
Granted expiration date | Feb. 28, 2180 | |
Expiration date | Dec. 31, 2019 | |
Maximum | ||
Vesting period in months | 18 months | |
Exercise price outstanding and exercisable, beginning | $ .22 | |
Exercise price granted | 0.22 | |
Exercise price outstanding and exercisable, ending | $ 0.22 | $ .22 |
Granted expiration date | Mar. 20, 2021 | |
Expiration date | Mar. 20, 2021 |
STOCKHOLDERS' EQUITY (Details 1
STOCKHOLDERS' EQUITY (Details 1) | 12 Months Ended |
Dec. 31, 2018$ / shares | |
Dividend yield | 0.00% |
Expected life | 2 years |
Minimum | |
Expected annual volatility | 307.00% |
Discount rate | 2.20% |
Estimated fair value of the Company's common stock | $ .125 |
Maximum | |
Expected annual volatility | 311.00% |
Discount rate | 2.30% |
Estimated fair value of the Company's common stock | $ .155 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 100,000,000 | 100,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, issued | 136,953,904 | 136,953,904 |
Common stock, outstanding | 136,953,904 | 136,953,904 |
Stock-based compensation related to the stock options | $ 256,187 | |
Series A Preferred Stock | ||
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, issued | 1,000,000 | 1,000,000 |
Preferred stock, outstanding | 1,000,000 | 1,000,000 |
Series B Preferred Stock | ||
Preferred stock, authorized | 3,000,000 | 3,000,000 |
Preferred stock, issued | 2,588,693 | 2,588,693 |
Preferred stock, outstanding | 2,588,693 | 2,588,693 |
Series C Preferred Stock | ||
Preferred stock, authorized | 3,000,000 | 3,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Related parties | [1] | $ 741,577 | $ 216,732 |
General operating | 3,037,601 | 2,040,947 | |
Credit card balances | 246,949 | 95,689 | |
Accrued expenses | 33,063 | 25,958 | |
Taxes and fees payable | 629,462 | 21,702 | |
Total | $ 4,687,652 | $ 2,401,028 | |
[1] | Relates to amounts due to management and members of the Board of Directors according to verbal and written agreements that have not been paid as of period end. |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 1) | Dec. 31, 2018USD ($) | |
2019 | $ 459,460 | |
In default | 101,347 | |
Total | 560,807 | |
Telecom Equipment Finance | ||
2019 | 449,103 | [1] |
In default | 0 | [1] |
Total | 449,103 | [1] |
Telecommunications Equipment Lease | ||
2019 | 0 | [2] |
In default | 101,347 | [2] |
Total | 101,347 | [2] |
Production Equipment Lease | ||
2019 | 10,357 | [3] |
In default | 0 | [3] |
Total | $ 10,357 | [3] |
[1] | The Telecom Equipment Lease is with an entity owned and controlled by shareholders of the Company and is due August 31, 2019, as amended. | |
[2] | The Telecommunications Equipment Lease requires payments of $3,702 per month and is in default. See discussion below in Other Commitments and Contingencies. In December 2017, the Company learned that the telecommunications equipment lease identified herein for $101,348 was included in a default judgement in a non-jurisdictional state of Pennsylvania for $169,474 from a lawsuit by the lessor. Management is working with the lessor to settle this matter including a proposal for the equipment to be returned to the lessor and then a negotiated amount for any deficiency between the value given for the retired equipment and the $101,348. When concluded, management does not believe the results will be significantly different than the liability of $101,348 and accrued fees and interest of $27,070 recorded. | |
[3] | The Production Equipment Lease, maturing on April 15, 2019, required payments of $2,535 per month and includes imputed interest at 8.5%. The lease was entered into in 2015 for the purchase of equipment in the amount of approximately $120,000 (see Note 2). |
RELATED PARTY ACTIVITY (Details
RELATED PARTY ACTIVITY (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transactions [Abstract] | ||
Rent expense | $ 26,792 | |
Due to shareholders and other related parties | $ 741,577 | $ 216,732 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | |||
Gross carrying amount | $ 9,141,800 | [1] | $ 7,527,700 | |
Accumulated amortization | (2,470,218) | (1,772,767) | ||
Net book value | 6,671,582 | 5,754,933 | ||
Goodwill | 924,361 | 70,995 | ||
Customer Base | ||||
Gross carrying amount | 1,947,200 | [1] | 1,422,100 | |
Accumulated amortization | (1,374,933) | (1,392,102) | ||
Net book value | $ 572,267 | $ 29,998 | ||
Useful life | 3 years | |||
Customer Base | Minimum | ||||
Useful life | 3 years | |||
Customer Base | Maximum | ||||
Useful life | 10 years | |||
Developed Technology | ||||
Gross carrying amount | $ 6,105,600 | [1] | $ 6,105,600 | |
Accumulated amortization | (1,059,070) | (380,665) | ||
Net book value | $ 5,046,530 | $ 5,724,935 | ||
Useful life | 9 years | 9 years | ||
Film Library | ||||
Gross carrying amount | [1] | $ 957,000 | ||
Accumulated amortization | (32,700) | |||
Net book value | $ 924,300 | |||
Useful life | 11 years | |||
Trademarks and Tradenames | ||||
Gross carrying amount | [1] | $ 132,000 | ||
Accumulated amortization | (3,515) | |||
Net book value | $ 128,485 | |||
Useful life | 12 years | |||
[1] | Increases from the prior year are from the acquisition of Blue Collar. See more details on this acquisition in Note 2 to these consolidated financial statements. |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS (Details 1) | Dec. 31, 2018USD ($) |
Customer Base | |
2019 | $ 53,455 |
2020 | 53,455 |
2021 | 53,455 |
2022 | 53,455 |
2023 | 53,455 |
Beyond | 304,992 |
Developed Technology | |
2019 | 678,404 |
2020 | 678,404 |
2021 | 678,404 |
2022 | 678,404 |
2023 | 678,404 |
Beyond | 1,654,510 |
Film Library | |
2019 | 87,000 |
2020 | 87,000 |
2021 | 87,000 |
2022 | 87,000 |
2023 | 87,000 |
Beyond | 489,300 |
Trademarks and Tradenames | |
2019 | 11,000 |
2020 | 11,000 |
2021 | 11,000 |
2022 | 11,000 |
2023 | 11,000 |
Beyond | $ 73,485 |