Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 19, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | TPT GLOBAL TECH, INC. | |
Entity Central Index Key | 0001661039 | |
Document Type | 10-Q/A | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | true | |
Amendment Description | During the three months ended June 30, 2019, the Company failed to file a Form S-1 registering common shares underlying certain convertible debt instruments. This was considered a default under the applicable Securities Purchase Agreements resulting in different valuations of the convertible debt instruments for accounting purposes as of June 30, 2019. Thus, several numbers within these financial statements change significantly. Note 12 to the condensed financial statements explains in detail the numbers that change and to what extent. In addition to Note 12 and the discussion there in, there are changes to Notes 1, 2, 3, 5, 6 and 8 to the condensed consolidated financial statements. | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
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 Shell Company | false | |
Entity Common Stock, Shares Outstanding | 136,953,904 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 101,475 | $ 31,786 |
Accounts receivable, net | 238,751 | 48,922 |
Prepaid expenses and other current assets | 232,481 | 36,111 |
Total current assets | 572,707 | 116,819 |
NON-CURRENT ASSETS | ||
Property and equipment, net | 4,786,235 | 3,046,942 |
Right of use assets | 5,240,311 | 0 |
Intangibles, net | 6,652,320 | 6,671,582 |
Goodwill | 987,361 | 924,361 |
Deposits and other assets | 81,009 | 62,013 |
Total non-current assets | 17,747,236 | 10,704,898 |
Total assets | 18,319,943 | 10,821,717 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 5,908,516 | 4,993,970 |
Deferred revenue | 209,316 | 6,450 |
Customer deposits | 338,725 | 338,725 |
Business loans, advances and agreements | 1,675,566 | 716,936 |
Current portion of convertible notes payable, net of discount | 976,601 | 10,000 |
Notes payable - related parties, net of discount | 9,462,347 | 9,137,982 |
Current portion of convertible notes payable - related parties, net of discounts | 172,881 | 202,688 |
Derivative liabilities | 9,836,901 | 0 |
Current portion of operating lease liabilities | 1,800,331 | 0 |
Financing lease liabilities | 139,925 | 138,774 |
Financing lease liabilities - related party | 612,526 | 598,490 |
Total current liabilities | 31,133,635 | 16,144,015 |
NON-CURRENT LIABILITIES | ||
Convertible note payable, net of current portion and discounts | 0 | 5,000 |
Convertible notes payable - related parties, net of current portion and discounts | 740,500 | 599,200 |
Long term portion of operating lease liabilities | 3,580,849 | 0 |
Total non-current liabilities | 4,321,349 | 604,200 |
Total liabilities | 35,454,984 | 16,748,215 |
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 June 30, 2019 and December 31, 2018 | 136,954 | 136,954 |
Subscriptions payable | 371,132 | 168,006 |
Additional paid-in capital | 12,681,369 | 12,567,881 |
Accumulated deficit | (30,328,085) | (18,802,928) |
Total stockholders' deficit | (17,135,041) | (5,926,498) |
Total liabilities and stockholders' deficit | 18,319,943 | 10,821,717 |
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 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
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 ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
REVENUES: | ||||
Total revenues | $ 2,428,455 | $ 189,011 | $ 2,589,931 | $ 439,229 |
COST OF SALES: | ||||
Total costs of sales | 1,487,948 | 256,164 | 1,750,316 | 520,459 |
Gross profit (loss) | 940,507 | (67,153) | 839,615 | (81,230) |
EXPENSES: | ||||
Sales and marketing | 44,317 | 21,012 | 44,317 | 39,898 |
Professional | 483,913 | 333,271 | 996,453 | 678,679 |
Payroll and related | 367,017 | 178,017 | 564,558 | 370,756 |
General and administrative | 394,256 | 127,148 | 616,267 | 319,736 |
Depreciation | 128,000 | 43,873 | 199,707 | 87,746 |
Amortization | 354,129 | 169,600 | 560,131 | 369,200 |
Total expenses | 1,771,632 | 872,921 | 2,981,433 | 1,866,015 |
Income (loss) from operations | (831,125) | (940,074) | (2,141,818) | (1,947,245) |
OTHER INCOME (EXPENSE) | ||||
Derivative expense | (6,565,485) | 0 | (8,105,901) | 0 |
Interest expense | (1,147,201) | (48,131) | (1,277,438) | (78,541) |
Total other income (expenses) | (7,712,686) | (48,131) | (9,383,339) | (78,541) |
Net loss before income taxes | (8,543,811) | (988,205) | (11,525,157) | (2,025,786) |
Income taxes | 0 | 0 | 0 | 0 |
Net loss | $ (8,543,811) | $ (988,205) | $ (11,525,157) | $ (2,025,786) |
Loss per common share: basic and diluted | $ (.06) | $ (.01) | $ (.08) | $ (.01) |
Weighted-average common shares outstanding-basic and diluted | 136,953,904 | 136,953,904 | 136,953,904 | 136,953,904 |
Products | ||||
REVENUES: | ||||
Total revenues | $ 15,086 | $ 36,780 | $ 33,769 | $ 78,430 |
COST OF SALES: | ||||
Total costs of sales | 15,100 | 39,895 | 35,600 | 82,395 |
Services | ||||
REVENUES: | ||||
Total revenues | 2,413,369 | 152,231 | 2,556,162 | 360,799 |
COST OF SALES: | ||||
Total costs of sales | $ 1,472,848 | $ 216,269 | $ 1,714,716 | $ 438,064 |
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, 2017 | 1,000,000 | 2,588,693 | 136,953,904 | ||||
Beginning balance, amount at Dec. 31, 2017 | $ 1,000 | $ 2,589 | $ 136,954 | $ (4,765) | $ 10,371,442 | $ (13,425,439) | $ (2,918,219) |
Issuance of stock and stock options for services | 347,097 | 83,554 | 430,651 | ||||
Cash received for common stock to be contributed by officer | 367,500 | 367,500 | |||||
Conversion of debt | 2,000 | 2,000 | |||||
Net loss | (2,025,786) | (2,025,786) | |||||
Ending balance, shares at Jun. 30, 2018 | 1,000,000 | 2,588,693 | 136,953,904 | ||||
Ending balance, amount at Jun. 30, 2018 | $ 1,000 | $ 2,589 | $ 136,954 | 741,832 | 10,424,996 | (15,451,225) | (4,143,854) |
Beginning balance, shares at Mar. 31, 2018 | 1,000,000 | 2,588,693 | 136,953,904 | ||||
Beginning balance, amount at Mar. 31, 2018 | $ 1,000 | $ 2,589 | $ 136,954 | 401,541 | 14,463,020 | (21,784,274) | (3,565,270) |
Issuance of stock and stock options for services | 92,790 | 69,330 | 162,121 | ||||
Cash received for common stock to be contributed by officer | 245,500 | 245,500 | |||||
Conversion of debt | 2,000 | 2,000 | |||||
Net loss | (988,205) | (988,205) | |||||
Ending balance, shares at Jun. 30, 2018 | 1,000,000 | 2,588,693 | 136,953,904 | ||||
Ending balance, amount at Jun. 30, 2018 | $ 1,000 | $ 2,589 | $ 136,954 | 741,832 | 10,424,996 | (15,451,225) | (4,143,854) |
Beginning balance, shares at Dec. 31, 2018 | 1,000,000 | 2,588,693 | 136,953,904 | ||||
Beginning balance, amount at Dec. 31, 2018 | $ 1,000 | $ 2,589 | $ 136,954 | 168,006 | 12,567,881 | (18,802,928) | (5,926,498) |
Issuance of stock and stock options for services | 203,126 | 113,488 | 316,614 | ||||
Conversion of debt | 0 | ||||||
Net loss | (11,525,157) | (11,525,157) | |||||
Ending balance, shares at Jun. 30, 2019 | 1,000,000 | 2,588,693 | 136,953,904 | ||||
Ending balance, amount at Jun. 30, 2019 | $ 1,000 | $ 2,589 | $ 136,954 | 371,132 | 12,681,369 | (30,328,085) | (17,135,041) |
Beginning balance, shares at Mar. 31, 2019 | 1,000,000 | 2,588,693 | 136,953,904 | ||||
Beginning balance, amount at Mar. 31, 2019 | $ 1,000 | $ 2,589 | $ 136,954 | 269,569 | 12,640,597 | (21,784,274) | (8,733,565) |
Issuance of stock and stock options for services | 101,563 | 40,772 | 142,335 | ||||
Net loss | (8,543,811) | (8,543,811) | |||||
Ending balance, shares at Jun. 30, 2019 | 1,000,000 | 2,588,693 | 136,953,904 | ||||
Ending balance, amount at Jun. 30, 2019 | $ 1,000 | $ 2,589 | $ 136,954 | $ 371,132 | $ 12,681,369 | $ (30,328,085) | $ (17,135,041) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (11,525,157) | $ (2,025,786) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 199,707 | 87,746 |
Amortization | 560,131 | 369,200 |
Amortization of debt discount | 539,796 | 0 |
Derivative expense | 8,105,901 | 0 |
Interest expense - default penalty | 635,507 | 0 |
Share-based compensation: common stock | 203,126 | 347,097 |
Share-based compensation: stock options | 113,488 | 83,554 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (189,829) | (1,278) |
Prepaid expenses and other assets | 44,646 | (30,658) |
Accounts payable and accrued expenses | 285,798 | 542,873 |
Other liabilities | (55,322) | (7,924) |
Net cash used in operating activities | (1,082,208) | (635,176) |
Cash flows from investing activities: | ||
Cash paid for acquisition of assets of SpeedConnect | (1,000,000) | 0 |
Net cash provided (used in) by investing activities | (1,000,000) | 0 |
Cash flows from financing activities: | ||
Proceeds from stock subscriptions | 0 | 367,500 |
Proceeds from convertible notes and notes payable - related parties | 456,390 | 300,000 |
Proceeds from convertible notes and business advance | 2,659,181 | 10,000 |
Payment on business loans | (913,978) | 0 |
Payments on convertible notes - related parties | (39,807) | (44,894) |
Payments on financing lease liabilities | (9,889) | 0 |
Net cash provided by financing activities | 2,151,897 | 632,916 |
Net change in cash | 69,689 | (2,260) |
Cash and cash equivalents - beginning of period | 31,786 | 36,380 |
Cash and cash equivalents - end of period | 101,475 | 34,120 |
Supplemental cash flow information: | ||
Cash paid for: interest | 9,857 | 0 |
Cash paid for: taxes | 0 | 0 |
Non-cash investing and financing activities: | ||
Discount on derivative financial instruments | 2,011,600 | 0 |
Stock subscription payable issued for conversion of debt | 0 | 2,000 |
Acquisition of the assets of SpeedConnect - liabilities assumed | 1,662,013 | 0 |
Right of use assets | 5,381,180 | 0 |
Operating lease liabilities | $ 5,381,180 | $ 0 |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2019 | |
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. On May 7, 2019 we completed the acquisition of a majority of the assets of SpeedConnect, LLC, which assets were conveyed into our wholly owned subsidiary TPT SpeedConnect, LLC (“TPT SC” or “TPT SpeedConnect”) which was formed on April 16, 2019. 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 are a rural Broadband Wireless Access (BWA) provider, 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. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared according to the instructions to Form 10-Q and Section 210.8-03(b) of Regulation S-X of the Securities and Exchange Commission (“SEC”) and, therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2018. The condensed consolidated balance sheet at June 30, 2019, has been derived from the consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP. Our condensed consolidated financial statements include the accounts of K Telecom and Global Telecom, Copperhead Digital, SDM, Port 2 Port, Blue Collar and TPT SpeedConnect. 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. For the six months ended June 30, 2019 For the six months ended June 30, 2018 TPT SpeedConnect $ 1,946,820 — Copperhead Digital 128,130 $ 224,454 K Telecom 33,769 78,430 San Diego Media 17,165 114,257 Blue Collar 464,047 — P2P — 22,088 Total Revenue $ 2,589,931 $ 439,229 TPT SpeedConnect: ISP and Telecom Revenue TPT SpeedConnect is a rural BWA provider operating in 10 Midwestern States under the trade name SpeedConnect. TPT SC’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 two years or less, the impact of not recognizing installation fees over the contract is immaterial. 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. 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 June 30, 2019, the Company had shares that were potentially common stock equivalents as follows: 2019 Series A Preferred Stock 128,056,506 Series B Preferred Stock 2,588,693 Stock Options and Warrants 6,426,453 Convertible Debt 95,575,070 232,646,721 Financial Instruments and Fair Value of Financial Instruments Our primary financial instruments at June 30, 2019 and December 31, 2018 consisted of cash equivalents, accounts receivable, accounts payable, notes payable and derivative liabilities. 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 We consider our derivative financial instruments as Level 3. The balances for our derivative financial instruments as of June 30, 2019 are the following: Derivative Instrument Fair Value Fair value of Geneva Roth Convertible Promissory Notes $ 302,523 Fair value of Auctus Convertible Promissory Note $ 7,767,966 Fair value of Odyssey Capital Convertible Promissory Note $ 788,984 Fair value of EMA Financial Convertible Promissory Note $ 651,837 Fair value of JSJ Investment Convertible Promissory Note $ 215,611 Fair value of Warrants issued with the derivative instruments $ 109,980 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. Recently Adopted Accounting Pronouncements 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 2019, 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 adopted 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 has not been updated. Our finance and operating lease commitments are subject to the new standard and we recognize as finance and operating lease liabilities and right-of-use assets. The effect on our condensed consolidated financial statements has not been material until we acquired the assets of SpeedConnect, which effect has been recorded during the period ended June 30, 2019 and is reflected in the condensed consolidated financial statements as of June 30, 2019. 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. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS | TPT SpeedConnect, LLC Asset Acquisition SpeedConnect Asset Acquisition Effective April 2, 2019, the Company entered into an Asset Purchase Agreement with SpeedConnect, LLC (“SpeedConnect”) to acquire substantially all of the assets of SpeedConnect. On May 7, 2019, the Company closed the transaction underlying the Asset Purchase Agreement with SpeedConnect to acquire substantially all of the assets of SpeedConnect for $2 million and the assumption of certain liabilities. The Asset Purchase Agreement required a deposit of $500,000 made in April and an additional $500,000 payment to close. The additional $500,000 was paid and all other conditions were met to effectuate the sale of substantially all of the assets of SpeedConnect to the Company. As part of the closing, the Company entered into a Promissory Note to pay SpeedConnect $1,000,000 in two equal installments of $500,000 plus applicable interest at 10% per annum with the first installment payable within 30 days of closing and the second installment payable within 60 days of closing (but no later than July 6, 2019). The Company paid off the Promissory Note by June 11, 2019 and by amendment dated May 7, 2019, SpeedConnect forgave $250,000 of the Promissory Note. The Company is required to have SpeedConnect’s financial information audited for the last two years. The Company applied the acquisition method of accounting to the business combination and has valued each of the assets acquired and liabilities on a provisional basis primarily because the valuation of the assets acquired has not yet been finalized, there could be a material adjustment. Accordingly, the assets and liabilities were deemed to be recorded at fair value on a provisional basis as of the acquisition date of May 7, 2019. Provisional Purchase Price Allocation: TPT Global Tech Effective May 7, 2019 Purchaser Provisional Consideration Given: Liabilities: Cash paid 1,000,000 Promissory Note 750,000 Deferred revenue 258,188 Accounts and other payables 653,824 Total Consideration Value $ 2,662,013 Provisional Assets Acquired: Assets Customer base $ 400,000 Current assets: Prepaid and other receivables 246,823 Deposits 13,190 Property and equipment 1,939,000 Total Assets Acquired $ 2,599,013 Goodwill – provisional $ 63,000 Had the acquisition occurred on January 1, 2018, condensed proforma statement of operations for the six months ended June 30, 2019 and 2018 would be as follows: 2019 2018 Revenue $ 7,352.758 $ 9,101,507 Cost of Sales 4,754,166 5,171,840 Gross Profit $ 2,598,592 $ 3,929,667 Expenses 4,514,097 (4,423,743 ) Interest Expense and Impairment 9,383,339 (78,541 ) Income Taxes — — Net Loss $ 11,298,844 $ (572,617 ) Earnings (loss) per share $ (0.08 ) $ (0.00 ) T |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Jun. 30, 2019 | |
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 six months ended June 30, 2019 and 2018. Financing activities described below have helped with working capital and other capital requirements. We incurred $11,525,157 and $2,025,786, respectively, in losses, and we used $1,082,208 and $635,176, respectively, in cash for operations for the six months ended June 30, 2019 and 2018. Cash flows from financing activities were $2,151,897 and $632,916 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. We acquired the assets of SpeedConnect on May 7, 2019 for $1,000,000 and a note payable for $750,000. These assets were conveyed into a wholly owned subsidiary, TPT SpeedConnect. Although TPT SpeedConnect is currently generating cash flows, there is expected to be significant capital required in the near term to upgrade the current network to 5G standards. 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 | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | Property and equipment and related accumulated depreciation as of June 30, 2019 and December 31, 2018 are as follows: 2019 2018 Property and equipment: Telecommunications fiber and equipment $ 5,213,045 3,274,045 Film production equipment 369,903 369,903 Office furniture and equipment 82,014 82,104 Leasehold improvements 18,679 18,679 5,683,641 3,744,641 Accumulated depreciation (897,406 ) (697,699 ) Property and equipment, net $ 4,786,235 3,046,942 Depreciation expense was $199,707 and $87,746 for the six months ended June 30, 2019 and 2018, respectively. |
DEBT FINANCING ARRANGEMENTS
DEBT FINANCING ARRANGEMENTS | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
DEBT FINANCING ARRANGEMENTS | Financing arrangements as of June 30, 2019 and December 31, 2018 are as follows: 2019 2018 Business loans and advances, net of discounts (1) $ 1,574,322 615,692 Convertible notes payable, net of discounts (2) 976,601 15,000 Factoring agreement (3) 101,244 101,244 Debt – third party $ 2,652,167 731,936 Line of credit, related party secured by assets (4) $ 3,043,390 3,043,390 Debt– other related party, net of discounts (5) 5,950,000 5,912,898 Convertible debt – related party (2) 913,381 801,888 Shareholder debt (6) 468,957 181,694 Debt – related party $ 10,375,728 9,939,870 Total financing arrangements $ 13,027,895 10,671,806 Less current liabilities: Business loans, advances and agreements $ (1,675,566 ) (716,936 ) Convertible notes payable, net of discount (967,601 ) (10,000 ) Notes payable – related parties, net of discount (9,462,347 ) (9,137,982 ) Convertible notes payable – related party (172,881 ) (202,688 ) (12,287,395 ) (10,067,606 ) Total non-current liabilities $ 740,500 604,200 (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%, 4.4% as of June 30, 2019, 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%, 6.755% as of June 30, 2019, and is due March 25, 2021. $500,000 is a bank loan dated May 28, 2019 which bears interest at Prime plus 6%, 11.5% as of June 30, 2019, is interest only for the first year, thereafter payable monthly of principal and interest until the due date of May 1, 2022. The bank loan is collateralized by assets of the Company. $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 $172,881 as of June 30, 2019. 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. During 2019, the Company issued these same securities with the same terms in the amount of $141,300 to related parties. 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. During 2019, the Company consummated Securities Purchase Agreements dated March 15, 2019, April 12, 2019, May 15, 2019 and June 6, 2019 with Geneva Roth Remark Holdings, Inc. (“Geneva Roth”) for the purchase of convertible promissory notes in the amounts of $68,000, $65,000, $58,000 and $53,000 (“Geneva Roth Convertible Promissory Notes”). The Geneva Roth Convertible Promissory Notes are due one year from issuance, 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 Notes may be prepaid in whole or in part of the outstanding balance at 125% to 140% up to 180 days from origination. Subsequent to June 30, 2019, all of the $68,000 Convertible Promissory Note was converted to 4,203,632 common shares in accordance with the Geneva Roth Securities Purchase Agreement. On March 25, 2019, the Company consummated a Securities Purchase Agreement dated March 18, 2019 with Auctus Fund, LLC. (“Auctus”) for the purchase of a $600,000 ($1,235,507 under default calculations) Convertible Promissory Note (“Auctus Convertible Promissory Note”). The Auctus Convertible Promissory Note is due December 18, 2019, pays interest at the rate of 12% (24% default) 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 the lessor of the lowest trading price during the previous 25 trading days prior the date of the Auctus Convertible Promissory Note or 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 Auctus Convertible Promissory Note may be prepaid in full at 135% to 150% up to 180 days from origination. 2,000,000 warrants were issued in conjunction with the issuance of this debt. See Note 7. Subsequent to June 30, 2019, Auctus converted $24,280 of accrued interest into 2,500,000 common shares in accordance with the Auctus Securities Purchase Agreement. On June 4, 2019, the Company consummated a Securities Purchase Agreement with Odyssey Capital Funding, LLC. (“Odyssey”) for the purchase of a $525,000 Convertible Promissory Note (“Odyssey Convertible Promissory Note”). The Odyssey Convertible Promissory Note is due June 3, 2020, pays interest at the rate of 12% (18% default) per annum and gives the holder the right from time to time, and at any time during the period beginning six months from the issuance date 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 55% 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 Odyssey Convertible Promissory Note may be prepaid in full at 125% to 145% up to 180 days from origination. On June 6, 2019, the Company consummated a Securities Purchase Agreement with JSJ Investments Inc. (“JSJ”) for the purchase of a $112,000 Convertible Promissory Note (“JSJ Convertible Promissory Note”). The JSJ Convertible Promissory Note is due June 6, 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 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 the lower of the market price, as defined, or 55% 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 JSJ Convertible Promissory Note may be prepaid in full at 135% to 150% up to 180 days from origination. 333,333 warrants were issued in conjunction with the issuance of this debt. See Note 7. On June 11, 2019, the Company consummated a Securities Purchase Agreement with EMA Financial, LLC. (“EMA”) for the purchase of a $250,000 Convertible Promissory Note (“EMA Convertible Promissory Note”). The EMA Convertible Promissory Note is due June 11, 2020, pays interest at the rate of 12% per annum and gives the holder the right from time to time 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 55% multiplied by the lowest traded price for the common stock during the previous 25 trading days prior to the applicable conversion date. The EMA Convertible Promissory Note may be prepaid in full at 135% to 150% up to 180 days from origination. 1,000,000 warrants were issued in conjunction with the issuance of this debt. See Note 7. The Company may be in default under several of its new derivative financial instruments for not having filed a Form S-1 with the Securities and Exchange Commission by now. It is the intent of the Company to payback all derivative securities prior to December 31, 2019 and is in negotiation for a term loan to do so. In addition, the Company is in negotiation to not have to file a Form 10Q for certain underlying shares of common stock for warrants that were issued with the derivative securities. Otherwise, the Company may have to file a Form S-1 to register these underlying common shares and has accounted for both the Auctus and Odyssey derivative financial instruments as if they were in default at June 30, 2019. Do this included an adjustment of $635,507 to the derivative debt principal balances and $10,033 to the related accrued interest balances as of June 30, 2019 included as a part of the restatement. See Note 12. (3) One 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 in principal remained unpaid as of June 30, 2019 and December 31, 2018. Another factoring agreement was entered into dated May 8, 2019 with Advantage Capital Funding. $500,000 was actually funded to the Company with a promise to pay $18,840 per week for 40 weeks until a total of $753,610 is paid. $656,712 remains outstanding under this factoring agreement as of June 30, 2019. (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%, 4.4% as of June 30, 2019, 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, these same shareholders and one other 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 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. $37,102 was amortized as interest expense in the six months ended June 30, 2019. 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. During the six months ended June 30, 2019, the Company borrowed $50,000 from a related party for working capital with no written terms. This was paid back prior to June 30, 2019 with $7,000 representing interest on the funds. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | The Company previously adopted the provisions of ASC subtopic 825-10, Financial Instruments The derivative liability as of June 30, 2019, in the amount of $9,836,901 has a level 3 classification under ASC 825-10. The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of June 30, 2019. There were no derivative financial instruments as of December 31, 2018. Debt Derivative Liabilities Balance, December 31, 2018 $ — Debt discount from initial derivative 1,731,000 Initial fair value of derivative liabilities 2,592,736 Change in fair value of derivative liabilities at end of period 5,513,565 Balance, June 30, 2019 $ 9,836,901 Derivative expense for the six months ended June 30, 2019 $ 8,105,901 Convertible notes payable and warrant derivatives – As of June 30, 2019, the Company marked to market the fair value of the debt derivatives and determined a fair value of $ 9,726,921 from the convertible notes and $109,980 from the warrants) in Note 5 (2) above. The Company recorded a loss from change in fair value of debt derivatives of $5,513,565 for the six months ended June 30, 2019. The fair value of the embedded derivatives was determined using Monte Carlo simulation method based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 188.2% to 212.8%, (3) weighted average risk-free interest rate of 2.23% to 2.52% (4) expected life of 0.72 to 5.0 years, and (5) the quoted market price of $0.0531 to $0.0726 for the Company’s common stock. See Financing lease arrangements in Note 8. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 6 Months Ended |
Jun. 30, 2019 | |
STOCKHOLDERS' DEFICIT | |
STOCKHOLDERS' DEFICIT | Preferred Stock As of June 30, 2019, 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 amended, of an amount equal to amounts payable owing, including contingency amounts where Holders of the Series A have personally guaranteed obligations of the Company. 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 June 30, 2019. 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 Stockholders 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 June 30, 2019. 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 Stockholders 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 June 30, 2019, 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 which closed in 2018. As such, as of June 30, 2019 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 June 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 $34,444 was expensed during the six months ended June 30, 2019 for the portion of service term completed during this period. For these two 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 six months ended June 30, 2019, the Company recorded $203,126 as stock-based compensation related to these agreements. Common Stock Payable Issued for Expenses and Liabilities As of June 30, 2019, 16,667 of common shares were subscribed to in 2018 for a note payable of $2,000. In 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 June 30, 2019, $72,500 and $20,000 has been accrued in the balance sheet for Mr. Shkolnik and Mr. Thomas, respectively. Stock Options Options Outstanding Vested Vesting Period Exercise Price Outstanding and Exercisable Expiration Date December 31, 2017 93,120 93,120 100% at issue $ 0.05 to $0.22 12/31/2019 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 Granted — June 30, 2019 3,093,120 2,176,453 $ 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 June 30, 2019 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 six months ended June 30, 2019, the Company recorded $113,488 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 $27,181 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. Warrants As part of the Convertible Promissory Notes issuance in Note 5, the Company issued 3,333,333 warrants to purchase 3,333,333 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 a required registration statement, registering the underlying shares of the Convertible Promissory Notes, is declared effective on or before June 11, 2019 to September 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. The warrants issued were considered derivative liabilities valued at $109,980 of the total $5,450,963 derivative liabilities as of June 30, 2019. See Note 5. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Accounts Payable and Accrued Expenses as of June 30, 2019 and December 31, 2018: 2019 2018 Accounts payable: Related parties (1) $ 954,284 $ 741,577 General operating 3,096,771 3,036,601 Credit card balances 257,109 246,949 Accrued interest on debt 472,731 306,319 Accrued expenses 495,765 33,062 Taxes and fees payable 631,857 629,462 Total $ 5,908,516 $ 4,993,970 (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 Arrangements We have various non-cancelable lease agreements for certain of our tower locations with original lease periods expiring between 2019 and 2044. Our lease terms may include options to extend or terminate the lease when it is reasonably certain we will exercise that option. Certain of the arrangements contain escalating rent payment provisions. Our Michigan main office lease and our two other equipment leases that are in default and leases with an initial term of twelve months have not been recorded on the condensed consolidated balance sheets. We recognize rent expense on a straight-line basis over the lease term. Lease Cost – Summary of future payments $ 6,436,103 Discount (1,054,923 ) Net Present Value $ 5,381,180 Lease Term and Discount Rate - Weighted average lease term 6 years Discount Rate 12 % Maturity of Lease Liabilities - 2019 2020 2021 2022 2023 Thereafter Tower Leases $ 1,913,493 $ 1,466,659 $ 975,744 $ 630,800 $ 252,960 $ 141,525 Lease obligations not included in the above calculations are as follows as of June 30, 2019: Obligation 2019 In Default Accrued Interest Total Telecom Equipment Finance (1) $ 449,103 — 156,405 $ 605,508 Telecommunications Equipment (2) — 101,347 33,624 134,971 Production Equipment Lease (3) 2,919 — — 2,919 Total $ 452,022 101,347 190,029 $ 743,398 (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 $38,110 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. 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 June 30, 2019, 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 June 30, 2019 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 | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY ACTIVITY | 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 $15,500 and $13,642 in rent and utility payments for this space for the six months ended June 30, 2019 and 2018, respectively. 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 $954,693 and $741,577, respectively, as of June 30, 2019 and December 31, 2018 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 7 and 8. 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 | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | Goodwill and intangible assets are comprised of the following: June 30, 2019 Gross Carrying Amount Accumulated Amortization Net Book Value Useful Life Customer Base $ 2,347,200 (1,413,089 ) 934,111 3-10 Developed Technology $ 6,105,600 (1,398,272 ) 4,707,328 9 Film Library $ 957,000 (68,800 ) 888,200 11 Trademarks and Tradenames $ 132,000 (9,319 ) 122,681 12 $ 9,541,800 (2,889,480 ) 6,652,320 Goodwill $ 987,361 — 987,361 — Amortization expense was $419,262 and $369,200 for the six months ended June 30, 2019 and 2018, respectively. December 31, 2018 Gross Carrying Amount 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 — Remaining amortization of the intangible assets as of June 30, 2019 is as follows: 2019 2020 2021 2022 2023 Beyond Customer Base $ 47,557 $ 103,455 $ 103,455 $ 103,455 $ 103,455 $ 472,734 Developed Technology 339,202 678,404 678,404 678,404 678,404 1,654,510 Film Library 50,900 87,000 87,000 87,000 87,000 489,300 Trademarks and Tradenames 5,196 11,000 11,000 11,000 11,000 73,485 Total $ 442,855 $ 879,859 $ 879,859 $ 879,859 $ 879,859 $ 2,652,320 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | There were no significant subsequent events that have not been disclosed in Notes 5, 6, 7 and 12. |
RESTATEMENT OF INTERIM CONDENSE
RESTATEMENT OF INTERIM CONDENSED UNAUDITED FINANCIAL STATEMENTS | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
RESTATEMENT OF INTERIM CONDENSED UNAUDITED FINANCIAL STATEMENTS | During the three months ended June 30, 2019, the Company failed to file a Form S-1 registering common shares underlying certain convertible debt instruments. This was considered a default under the applicable Securities Purchase Agreements resulting in default interest which in turn affected the related valuations of the convertible debt instruments for accounting purposes as of June 30, 2019. Thus, liabilities as of June 30, 2019 were understated by $5,142,119 and corresponding derivative expense and interest expense were understated by $4,496,579 and $645,540, respectively. The effects of the corrections on the interim consolidated financial statements were as follows: Consolidated Balance Sheets (Unaudited) June 30, 2019 June 30, 2019 As Reported Corrections As Restated Accounts payable and accrued expenses $ 5,898,483 $ 10,033 $ 5,908,516 Current portion of convertible notes payable $ 341,094 $ 635,507 $ 976,601 Derivative liabilities $ 5,340,322 $ 4,496,579 $ 9,836,901 Total current liabilities $ 25,991,516 $ 5,142,119 $ 31,133,635 Consolidated Statement of Operations (Unaudited) For the six months For the six months June 30, 2019 June 30, 2019 As Reported Corrections As Restated Derivative expense $ 3,609,322 $ 4,496,579 $ 8,105,901 Interest expense $ 631,898 $ 645,540 $ 1,277,438 Net loss $ (6,383,038 ) $ (5,142,119 ) $ (11,525,157 ) Loss per share $ (0.04 ) $ (0.04 ) $ (0.08 ) For the three months For the three months June 30, 2019 June 30, 2019 As Reported Corrections As Restated Derivative expense $ 2,068,906 $ 4,496,579 $ 6,565,485 Interest expense $ 501,611 $ 645,540 $ 1,147,201 Net loss $ (3,401,692 ) $ (5,142,119 ) $ (8,543,811 ) Loss per share $ (0.02 ) $ (0.04 ) $ (0.06 ) |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
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. On May 7, 2019 we completed the acquisition of a majority of the assets of SpeedConnect, LLC, which assets were conveyed into our wholly owned subsidiary TPT SpeedConnect, LLC (“TPT SC” or “TPT SpeedConnect”). 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 are a rural Broadband Wireless Access (BWA) provider, 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. |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared according to the instructions to Form 10-Q and Section 210.8-03(b) of Regulation S-X of the Securities and Exchange Commission (“SEC”) and, therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2018. The condensed consolidated balance sheet at June 30, 2019, has been derived from the consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP. Our condensed consolidated financial statements include the accounts of K Telecom and Global Telecom, Copperhead Digital, SDM, Port 2 Port, Blue Collar and TPT SpeedConnect. 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. For the six months ended June 30, 2019 For the six months ended June 30, 2018 TPT SpeedConnect $ 1,946,820 — Copperhead Digital 128,130 $ 224,454 K Telecom 33,769 78,430 San Diego Media 17,165 114,257 Blue Collar 464,047 — P2P — 22,088 Total Revenue $ 2,589,931 $ 439,229 TPT SpeedConnect: ISP and Telecom Revenue TPT SpeedConnect is a rural BWA provider operating in 10 Midwestern States under the trade name SpeedConnect. TPT SC’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 two years or less, the impact of not recognizing installation fees over the contract is immaterial. 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. |
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 June 30, 2019, the Company had shares that were potentially common stock equivalents as follows: 2019 Series A Preferred Stock 128,056,506 Series B Preferred Stock 2,588,693 Stock Options and Warrants 6,426,453 Convertible Debt 95,575,070 232,646,721 |
Financial Instruments and Fair Value of Financial Instruments | Our primary financial instruments at June 30, 2019 and December 31, 2018 consisted of cash equivalents, accounts receivable, accounts payable, notes payable and derivative liabilities. 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 We consider our derivative financial instruments as Level 3. The balances for our derivative financial instruments as of June 30, 2019 are the following: Derivative Instrument Fair Value Fair value of Geneva Roth Convertible Promissory Notes $ 302,523 Fair value of Auctus Convertible Promissory Note $ 7,767,966 Fair value of Odyssey Capital Convertible Promissory Note $ 788,984 Fair value of EMA Financial Convertible Promissory Note $ 651,837 Fair value of JSJ Investment Convertible Promissory Note $ 215,611 Fair value of Warrants issued with the derivative instruments $ 109,980 |
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. |
Recently Adopted Accounting Pronouncements | 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 2019, 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 adopted 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 has not been updated. Our finance and operating lease commitments are subject to the new standard and we recognize as finance and operating lease liabilities and right-of-use assets. The effect on our condensed consolidated financial statements has not been material until we acquired the assets of SpeedConnect, which effect has been recorded during the period ended June 30, 2019 and is reflected in the condensed consolidated financial statements as of June 30, 2019. 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. |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Disaggregation of revenue | For the six months ended June 30, 2019 For the six months ended June 30, 2018 TPT SpeedConnect $ 1,946,820 — Copperhead Digital 128,130 $ 224,454 K Telecom 33,769 78,430 San Diego Media 17,165 114,257 Blue Collar 464,047 — P2P — 22,088 Total Revenue $ 2,589,931 $ 439,229 |
Potentially dilutive securities | 2019 Series A Preferred Stock 128,056,506 Series B Preferred Stock 2,588,693 Stock Options and Warrants 6,426,453 Convertible Debt 95,575,070 232,646,721 |
Derivative financial instruments | Derivative Instrument Fair Value Fair value of Geneva Roth Convertible Promissory Notes $ 302,523 Fair value of Auctus Convertible Promissory Note $ 7,767,966 Fair value of Odyssey Capital Convertible Promissory Note $ 788,984 Fair value of EMA Financial Convertible Promissory Note $ 651,837 Fair value of JSJ Investment Convertible Promissory Note $ 215,611 Fair value of Warrants issued with the derivative instruments $ 109,980 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Purchase price allocation | TPT Global Tech Effective May 7, 2019 Purchaser Provisional Consideration Given: Liabilities: Cash paid 1,000,000 Promissory Note 750,000 Deferred revenue 258,188 Accounts and other payables 653,824 Total Consideration Value $ 2,662,013 Provisional Assets Acquired: Assets Customer base $ 400,000 Current assets: Prepaid and other receivables 246,823 Deposits 13,190 Property and equipment 1,939,000 Total Assets Acquired $ 2,599,013 Goodwill – provisional $ 63,000 |
Proforma results | 2019 2018 Revenue $ 7,352.758 $ 9,101,507 Cost of Sales 4,754,166 5,171,840 Gross Profit $ 2,598,592 $ 3,929,667 Expenses 4,514,097 (4,423,743 ) Interest Expense and Impairment 9,383,339 (78,541 ) Income Taxes — — Net Loss $ 11,298,844 $ (572,617 ) Earnings (loss) per share $ (0.08 ) $ (0.00 ) |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | 2019 2018 Property and equipment: Telecommunications fiber and equipment $ 5,213,045 3,274,045 Film production equipment 369,903 369,903 Office furniture and equipment 82,014 82,104 Leasehold improvements 18,679 18,679 5,683,641 3,744,641 Accumulated depreciation (897,406 ) (697,699 ) Property and equipment, net $ 4,786,235 3,046,942 |
DEBT FINANCING ARRANGEMENTS (Ta
DEBT FINANCING ARRANGEMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt financing arrangements | 2019 2018 Business loans and advances, net of discounts (1) $ 1,574,322 615,692 Convertible notes payable, net of discounts (2) 976,601 15,000 Factoring agreement (3) 101,244 101,244 Debt – third party $ 2,652,167 731,936 Line of credit, related party secured by assets (4) $ 3,043,390 3,043,390 Debt– other related party, net of discounts (5) 5,950,000 5,912,898 Convertible debt – related party (2) 913,381 801,888 Shareholder debt (6) 468,957 181,694 Debt – related party $ 10,375,728 9,939,870 Total financing arrangements $ 13,027,895 10,671,806 Less current liabilities: Business loans, advances and agreements $ (1,675,566 ) (716,936 ) Convertible notes payable, net of discount (967,601 ) (10,000 ) Notes payable – related parties, net of discount (9,462,347 ) (9,137,982 ) Convertible notes payable – related party (172,881 ) (202,688 ) (12,287,395 ) (10,067,606 ) Total non-current liabilities $ 740,500 604,200 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Changes in fair value of Company's Level 3 financial liabilities | Debt Derivative Liabilities Balance, December 31, 2018 $ — Debt discount from initial derivative 1,731,000 Initial fair value of derivative liabilities 2,592,736 Change in fair value of derivative liabilities at end of period 5,513,565 Balance, June 30, 2019 $ 9,836,901 Derivative expense for the six months ended June 30, 2019 $ 8,105,901 |
STOCKHOLDERS' DEFICIT (Tables)
STOCKHOLDERS' DEFICIT (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
STOCKHOLDERS' DEFICIT | |
Stock option activity | Options Outstanding Vested Vesting Period Exercise Price Outstanding and Exercisable Expiration Date December 31, 2017 93,120 93,120 100% at issue $ 0.05 to $0.22 12/31/2019 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 Granted — June 30, 2019 3,093,120 2,176,453 $ 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) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Accounts payable and accrued expenses | 2019 2018 Accounts payable: Related parties (1) $ 954,284 $ 741,577 General operating 3,096,771 3,036,601 Credit card balances 257,109 246,949 Accrued interest on debt 472,731 306,319 Accrued expenses 495,765 33,062 Taxes and fees payable 631,857 629,462 Total $ 5,908,516 $ 4,993,970 (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 cost | Summary of future payments $ 6,436,103 Discount (1,054,923 ) Net Present Value $ 5,381,180 |
Lease term and discount rate | Weighted average lease term 6 years Discount Rate 12 % |
Maturity of lease liabilities | 2019 2020 2021 2022 2023 Thereafter Tower Leases $ 1,913,493 $ 1,466,659 $ 975,744 $ 630,800 $ 252,960 $ 141,525 |
Future minimum lease payments | Obligation 2019 In Default Accrued Interest Total Telecom Equipment Finance (1) $ 449,103 — 156,405 $ 605,508 Telecommunications Equipment (2) — 101,347 33,624 134,971 Production Equipment Lease (3) 2,919 — — 2,919 Total $ 452,022 101,347 190,029 $ 743,398 (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 $38,110 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. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and intangible assets | June 30, 2019 Gross Carrying Amount Accumulated Amortization Net Book Value Useful Life Customer Base $ 2,347,200 (1,413,089 ) 934,111 3-10 Developed Technology $ 6,105,600 (1,398,272 ) 4,707,328 9 Film Library $ 957,000 (68,800 ) 888,200 11 Trademarks and Tradenames $ 132,000 (9,319 ) 122,681 12 $ 9,541,800 (2,889,480 ) 6,652,320 Goodwill $ 987,361 — 987,361 — December 31, 2018 Gross Carrying Amount 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 — |
Amortization of intangible assets | 2019 2020 2021 2022 2023 Beyond Customer Base $ 47,557 $ 103,455 $ 103,455 $ 103,455 $ 103,455 $ 472,734 Developed Technology 339,202 678,404 678,404 678,404 678,404 1,654,510 Film Library 50,900 87,000 87,000 87,000 87,000 489,300 Trademarks and Tradenames 5,196 11,000 11,000 11,000 11,000 73,485 Total $ 442,855 $ 879,859 $ 879,859 $ 879,859 $ 879,859 $ 2,652,320 |
RESTATEMENT OF INTERIM CONDEN_2
RESTATEMENT OF INTERIM CONDENSED UNAUDITED FINANCIAL STATEMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Restatement of financial statements | Consolidated Balance Sheets (Unaudited) June 30, 2019 June 30, 2019 As Reported Corrections As Restated Accounts payable and accrued expenses $ 5,898,483 $ 10,033 $ 5,908,516 Current portion of convertible notes payable $ 341,094 $ 635,507 $ 976,601 Derivative liabilities $ 5,340,322 $ 4,496,579 $ 9,836,901 Total current liabilities $ 25,991,516 $ 5,142,119 $ 31,133,635 Consolidated Statement of Operations (Unaudited) For the six months For the six months June 30, 2019 June 30, 2019 As Reported Corrections As Restated Derivative expense $ 3,609,322 $ 4,496,579 $ 8,105,901 Interest expense $ 631,898 $ 645,540 $ 1,277,438 Net loss $ (6,383,038 ) $ (5,142,119 ) $ (11,525,157 ) Loss per share $ (0.04 ) $ (0.04 ) $ (0.08 ) For the three months For the three months June 30, 2019 June 30, 2019 As Reported Corrections As Restated Derivative expense $ 2,068,906 $ 4,496,579 $ 6,565,485 Interest expense $ 501,611 $ 645,540 $ 1,147,201 Net loss $ (3,401,692 ) $ (5,142,119 ) $ (8,543,811 ) Loss per share $ (0.02 ) $ (0.04 ) $ (0.06 ) |
DESCRIPTION OF BUSINESS AND S_4
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Total revenues | $ 2,428,455 | $ 189,011 | $ 2,589,931 | $ 439,229 |
TPT SpeedConnect | ||||
Total revenues | 1,946,820 | 0 | ||
Copperhead Digital | ||||
Total revenues | 128,130 | 224,454 | ||
K Telecom | ||||
Total revenues | 33,769 | 78,430 | ||
San Diego Media | ||||
Total revenues | 17,165 | 114,257 | ||
Blue Collar | ||||
Total revenues | 464,047 | 0 | ||
P2P | ||||
Total revenues | $ 0 | $ 22,088 |
DESCRIPTION OF BUSINESS AND S_5
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 6 Months Ended |
Jun. 30, 2019shares | |
Potentially dilutive securities | 232,646,721 |
Series A Preferred Stock | |
Potentially dilutive securities | 128,056,506 |
Series B Preferred Stock | |
Potentially dilutive securities | 2,588,693 |
Stock Options | |
Potentially dilutive securities | 6,426,453 |
Convertible Debt | |
Potentially dilutive securities | 95,575,070 |
DESCRIPTION OF BUSINESS AND S_6
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) | Jun. 30, 2019USD ($) |
Geneva Roth Convertible Promissory Notes | |
Fair value of derivative instrument | $ 302,523 |
Auctus Convertible Promissory Notes | |
Fair value of derivative instrument | 7,767,996 |
Odyssey Capital Convertible Promissory Notes | |
Fair value of derivative instrument | 788,984 |
EMA Financial Convertible Promissory Notes | |
Fair value of derivative instrument | 651,837 |
JSJ Investment Convertible Promissory Notes | |
Fair value of derivative instrument | 215,611 |
Warrants issued with the derivative instruments | |
Fair value of derivative instrument | $ 109,980 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - SpeedConnect, LLC | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Liabilities: | |
Cash paid | $ 1,000,000 |
Promissory Note | 750,000 |
Deferred revenue | 258,188 |
Accounts and other payables | 653,824 |
Total consideration value | 2,662,013 |
Assets | |
Customer base | 400,000 |
Prepaid and other receivables | 246,823 |
Deposits | 13,190 |
Property and equipment | 1,939,000 |
Total consideration received | 2,599,013 |
Goodwill - provisional | $ 63,000 |
ACQUISITIONS (Details 1)
ACQUISITIONS (Details 1) - SpeedConnect, LLC - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue | $ 7,352,758 | $ 9,101,507 |
Cost of sales | 4,754,166 | 5,171,840 |
Gross profit (loss) | 2,598,592 | 3,929,667 |
Expenses | 4,514,097 | (4,423,743) |
Interest expense and impairment | 9,383,339 | (78,541) |
Income taxes | 0 | 0 |
Net loss | $ 11,298,844 | $ (572,617) |
Earnings (loss) per share | $ (.08) | $ .00 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Going Concern [Abstract] | ||||
Net loss | $ (8,543,811) | $ (988,205) | $ (11,525,157) | $ (2,025,786) |
Net cash used in operating activities | (1,082,208) | (635,176) | ||
Net cash provided by financing activities | $ 2,151,897 | $ 632,916 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Property, plant and equipment, gross | $ 5,683,641 | $ 3,744,641 |
Accumulated depreciation | (897,406) | (697,699) |
Property and equipment, net | 4,786,235 | 3,046,942 |
Telecommunications Fiber and Equipment | ||
Property, plant and equipment, gross | 5,213,045 | 3,274,045 |
Film Production Equipment | ||
Property, plant and equipment, gross | 369,903 | 369,903 |
Office Furniture and Equipment | ||
Property, plant and equipment, gross | 82,014 | 82,104 |
Leasehold Improvements | ||
Property, plant and equipment, gross | $ 18,679 | $ 18,679 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 128,000 | $ 43,873 | $ 199,707 | $ 87,746 |
DEBT FINANCING ARRANGEMENTS (De
DEBT FINANCING ARRANGEMENTS (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Business loans and advances, net of discounts | $ 1,574,322 | $ 615,692 |
Convertible notes payable, net of discounts | 976,601 | 15,000 |
Factoring agreement | 101,244 | 101,244 |
Debt - third party | 2,652,167 | 731,936 |
Line of credit, related party secured by assets | 3,043,390 | 3,043,390 |
Debt - other related party, net of discounts | 5,950,000 | 5,912,898 |
Convertible debt - related party | 913,381 | 801,888 |
Shareholder debt | 468,957 | 181,694 |
Debt - related party | 10,375,728 | 9,939,870 |
Total financing arrangements | 13,027,895 | 10,671,806 |
Less current liabilities: | ||
Business loans, advances and agreements | (1,675,566) | (716,936) |
Convertible notes payable, net of discount | (976,601) | (10,000) |
Notes payable - related parties, net of discount | (9,462,347) | (9,137,982) |
Convertible notes payable - related party | (172,881) | (202,688) |
Total | (12,287,395) | (10,067,606) |
Total non-current liabilities | $ 4,321,349 | $ 604,200 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Debt discount from initial derivative | $ 2,011,600 | $ 0 | ||
Derivative expense | $ (6,565,485) | $ 0 | (8,105,901) | $ 0 |
Level 3 | ||||
Derivative liability, beginning | 0 | |||
Debt discount from initial derivative | 1,731,000 | |||
Initial fair value of derivative liabilities | 2,592,736 | |||
Change in fair value of derivative liabilities at end of period | 5,513,565 | |||
Derivative liability, ending | $ 9,836,901 | 9,836,901 | ||
Derivative expense | $ 8,105,901 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Dividend yield | 0.00% | |
Expected life | 2 years | |
Minimum | ||
Expected volatility | 307.00% | |
Quoted market price | $ .125 | |
Maximum | ||
Expected volatility | 311.00% | |
Quoted market price | $ .155 | |
Derivative Liability | ||
Dividend yield | 0.00% | |
Derivative Liability | Minimum | ||
Expected volatility | 188.20% | |
Weighted average risk-free interest rate | 2.23% | |
Expected life | 8 months 19 days | |
Quoted market price | $ .0531 | |
Derivative Liability | Maximum | ||
Expected volatility | 212.80% | |
Weighted average risk-free interest rate | 2.52% | |
Expected life | 5 years | |
Quoted market price | $ .0726 | |
Level 3 | ||
Derivative liability, ending | $ 9,836,901 | $ 0 |
Change in fair value of derivative liabilities | $ 5,513,565 |
STOCKHOLDERS' DEFICIT (Details)
STOCKHOLDERS' DEFICIT (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Options outstanding, beginning | 3,093,120 | 93,120 |
Options granted | 0 | 3,000,000 |
Options outstanding, ending | 3,093,120 | 3,093,120 |
Options vested, beginning | 1,954,230 | 93,120 |
Options granted | ||
Options vested, ending | 2,176,453 | 1,954,230 |
Vesting period percentage | 100.00% | |
Exercise price granted | $ .10 | |
Expiration date | Dec. 31, 2019 | |
Minimum | ||
Vesting period in months | 12 months | |
Exercise price outstanding and exercisable, beginning | .05 | $ .05 |
Exercise price outstanding and exercisable, ending | $ 0.05 | $ .05 |
Expiration date | Dec. 31, 2019 | |
Granted expiration date | Feb. 28, 2020 | |
Maximum | ||
Vesting period in months | 18 months | |
Exercise price outstanding and exercisable, beginning | $ .22 | $ .22 |
Exercise price outstanding and exercisable, ending | $ 0.22 | $ .22 |
Expiration date | Mar. 20, 2021 | |
Granted expiration date | Mar. 20, 2021 |
STOCKHOLDERS' DEFICIT (Details
STOCKHOLDERS' DEFICIT (Details 1) | 6 Months Ended |
Jun. 30, 2019$ / 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' DEFICIT (Detail_2
STOCKHOLDERS' DEFICIT (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | |
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 | $ 113,488 | ||
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 ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Commitments and Contingencies Disclosure [Abstract] | ||
Related parties | $ 954,284 | $ 741,577 |
General operating | 3,096,771 | 3,036,601 |
Credit card balances | 257,109 | 246,949 |
Accrued interest on debt | 472,731 | 306,319 |
Accrued expenses | 495,765 | 33,062 |
Taxes and fees payable | 631,857 | 629,462 |
Total | $ 5,908,516 | $ 4,993,970 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 1) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of future payments | $ 6,436,103 |
Discount | (1,054,923) |
Net present value | $ 5,381,180 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Details 2) | Jun. 30, 2019 |
Commitments and Contingencies Disclosure [Abstract] | |
Weighted average lease term | 6 years |
Discount rate | 12.00% |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES (Details 3) | Jun. 30, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 1,913,493 |
2020 | 1,466,659 |
2021 | 975,744 |
2022 | 630,800 |
2023 | 252,960 |
Thereafter | $ 141,525 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES (Details 4) | Jun. 30, 2019USD ($) |
2019 | $ 452,022 |
In default | 101,347 |
Accrued interest | 190,029 |
Total | 743,398 |
Telecom Equipment Finance | |
2019 | 449,103 |
In default | 0 |
Accrued interest | 156,405 |
Total | 605,508 |
Telecommunications Equipment Lease | |
2019 | 0 |
In default | 101,347 |
Accrued interest | 33,624 |
Total | 134,971 |
Production Equipment Lease | |
2019 | 2,919 |
In default | 0 |
Accrued interest | 0 |
Total | $ 2,919 |
RELATED PARTY ACTIVITY (Details
RELATED PARTY ACTIVITY (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Related Party Transactions [Abstract] | ||
Rent expense | $ 15,500 | |
Utility expense | 13,642 | |
Due to shareholders and other related parties | $ 954,693 | $ 741,577 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Gross carrying amount | $ 9,541,800 | $ 9,141,800 |
Accumulated amortization | (2,889,480) | (2,470,218) |
Net book value | 6,652,320 | 6,671,582 |
Goodwill | 987,361 | 924,361 |
Customer Base | ||
Gross carrying amount | 2,347,200 | 1,947,200 |
Accumulated amortization | (1,413,089) | (1,374,933) |
Net book value | $ 934,111 | 572,267 |
Customer Base | Minimum | ||
Useful life | 1 year | |
Customer Base | Maximum | ||
Useful life | 10 years | |
Developed Technology | ||
Gross carrying amount | $ 6,105,600 | 6,105,600 |
Accumulated amortization | (1,398,272) | (1,059,070) |
Net book value | $ 4,707,328 | 5,046,530 |
Useful life | 9 years | |
Film Library | ||
Gross carrying amount | $ 957,000 | 957,000 |
Accumulated amortization | (68,800) | (32,700) |
Net book value | $ 888,200 | 924,300 |
Useful life | 11 years | |
Trademarks and Tradenames | ||
Gross carrying amount | $ 132,000 | 132,000 |
Accumulated amortization | (9,319) | (3,515) |
Net book value | $ 122,681 | $ 128,485 |
Useful life | 12 years |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS (Details 1) | Jun. 30, 2019USD ($) |
2019 | $ 442,855 |
2020 | 879,859 |
2021 | 879,859 |
2022 | 879,859 |
2023 | 879,859 |
Beyond | 2,652,320 |
Customer Base | |
2019 | 47,557 |
2020 | 103,455 |
2021 | 103,455 |
2022 | 103,455 |
2023 | 103,455 |
Beyond | 472,734 |
Developed Technology | |
2019 | 339,202 |
2020 | 678,404 |
2021 | 678,404 |
2022 | 678,404 |
2023 | 678,404 |
Beyond | 1,654,510 |
Film Library | |
2019 | 50,900 |
2020 | 87,000 |
2021 | 87,000 |
2022 | 87,000 |
2023 | 87,000 |
Beyond | 489,300 |
Trademarks and Tradenames | |
2019 | 5,196 |
2020 | 11,000 |
2021 | 11,000 |
2022 | 11,000 |
2023 | 11,000 |
Beyond | $ 73,485 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 354,129 | $ 169,600 | $ 560,131 | $ 369,200 |
RESTATEMENT OF INTERIM CONDEN_3
RESTATEMENT OF INTERIM CONDENSED UNAUDITED FINANCIAL STATEMENTS (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Accounts payable and accrued expenses | $ 5,908,516 | $ 4,993,970 |
Current portion of convertible notes payable | 976,601 | 10,000 |
Derivative liabilities | 9,836,901 | 0 |
Total current liabilities | 31,133,635 | $ 16,144,015 |
As Reported | ||
Accounts payable and accrued expenses | 5,898,483 | |
Current portion of convertible notes payable | 341,094 | |
Derivative liabilities | 5,340,322 | |
Total current liabilities | 25,991,516 | |
Corrections | ||
Accounts payable and accrued expenses | 10,033 | |
Current portion of convertible notes payable | 635,507 | |
Derivative liabilities | 4,496,579 | |
Total current liabilities | $ 5,142,119 |
RESTATEMENT OF INTERIM CONDEN_4
RESTATEMENT OF INTERIM CONDENSED UNAUDITED FINANCIAL STATEMENTS (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Derivative expense | $ 6,565,485 | $ 0 | $ 8,105,901 | $ 0 |
Interest expense | 1,147,201 | 48,131 | 1,277,438 | 78,541 |
Net loss | $ (8,543,811) | $ (988,205) | $ (11,525,157) | $ (2,025,786) |
Loss per share | $ (.06) | $ (.01) | $ (.08) | $ (.01) |
As Reported | ||||
Derivative expense | $ 2,068,906 | $ 3,609,322 | ||
Interest expense | 501,661 | 631,898 | ||
Net loss | $ (3,401,692) | $ (6,383,038) | ||
Loss per share | $ (.02) | $ (0.04) | ||
Corrections | ||||
Derivative expense | $ 4,496,579 | $ 4,496,579 | ||
Interest expense | 645,540 | 645,540 | ||
Net loss | $ (5,142,119) | $ (5,142,119) | ||
Loss per share | $ (.04) | $ (0.04) |