Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Jun. 25, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | H/Cell Energy Corp | |
Entity Central Index Key | 1,676,580 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 7,486,024 | |
Trading Symbol | HCCC | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 591,978 | $ 455,700 |
Accounts receivable | 1,110,552 | 808,050 |
Prepaid expenses | 18,716 | 14,669 |
Costs and earnings in excess of billings | 67,982 | 51,531 |
Total current assets | 1,789,228 | 1,329,950 |
Property and equipment, net | 409,376 | 102,573 |
Security deposits and other non-current assets | 22,234 | 8,416 |
Deferred tax asset | 44,257 | 44,257 |
Customer lists, net | 99,008 | |
Goodwill | 1,373,621 | |
Total assets | 3,737,724 | 1,485,196 |
Current liabilities | ||
Accounts payable and accrued expenses | 1,073,289 | 631,385 |
Management fees payable – related party | 15,000 | 31,257 |
Billings in excess of costs and earnings | 100,544 | 87,206 |
Sales and withholding tax payable | 55,969 | 61,239 |
Current equipment notes payable | 23,823 | |
Current capital lease payable | 49,856 | |
Income tax payable | 44,257 | 98,313 |
Total current liabilities | 1,362,738 | 909,400 |
Noncurrent liabilities | ||
Capital leases | 197,873 | |
Equipment notes payable | 121,476 | |
Convertible note payable - related party, net of discount | 2,214 | |
Total noncurrent liabilities | 321,563 | |
Total liabilities | 1,684,301 | 909,400 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock - $0.0001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding | ||
Common stock - $0.0001 par value; 25,000,000 shares authorized; 7,486,024 and 7,041,579 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively | 748 | 704 |
Additional paid-in capital | 2,934,467 | 1,335,656 |
Accumulated deficit | (842,723) | (731,754) |
Accumulated other comprehensive loss | (39,069) | (28,810) |
Total stockholders' equity | 2,053,423 | 575,796 |
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ 3,737,724 | $ 1,485,196 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 7,486,024 | 7,041,579 |
Common stock, shares outstanding | 7,486,024 | 7,041,579 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Operations - Other Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue | ||
Construction income | $ 1,694,535 | $ 1,850,755 |
Related party | 31,789 | 16,090 |
Total revenue | 1,726,324 | 1,866,845 |
Cost of goods sold | ||
Direct costs | 1,209,413 | 1,413,820 |
Direct costs - related party | 31,617 | 15,905 |
Total cost of goods sold | 1,241,030 | 1,429,725 |
Gross profit | 485,294 | 437,120 |
Operating expenses | ||
General and administrative expenses | 574,684 | 493,244 |
Total operating expenses | 574,684 | 493,244 |
Loss from operations | (89,390) | (56,124) |
Income tax provision (benefit) | ||
Loss before other income and expense | (89,390) | (56,124) |
Other expense | ||
Interest expense | 3,946 | |
Interest expense – related party | 14,215 | |
Loss on fixed asset disposal | 3,418 | |
Total other expense | 21,579 | 0 |
Net loss | (110,969) | (56,124) |
Other comprehensive loss, net | ||
Foreign currency translation adjustment | (10,259) | 11,369 |
Comprehensive loss | $ (121,228) | $ (44,755) |
Loss per share | ||
Basic | $ (0.02) | $ (0.01) |
Diluted | $ (0.02) | $ (0.01) |
Weighted average common shares outstanding | ||
Basic | 7,486,024 | 5,657,309 |
Diluted | 7,486,024 | 5,657,309 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders' Equity - 3 months ended Mar. 31, 2018 - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Total |
Balance at Dec. 31, 2017 | $ 704 | $ 1,335,656 | $ (731,754) | $ (28,810) | $ 575,796 | |
Balance, shares at Dec. 31, 2017 | 7,041,579 | |||||
Issuance of common stock February 2018, PVBJ Acquisition | $ 44 | 1,186,663 | 1,186,707 | |||
Issuance of common stock February 2018, PVBJ Acquisition, shares | 444,445 | |||||
Stock-based compensation expense | 17,148 | 17,148 | ||||
Beneficial conversion feature | 395,000 | 395,000 | ||||
Net loss | (110,969) | (10,259) | (121,228) | |||
Balance at Mar. 31, 2018 | $ 748 | $ 2,934,467 | $ (842,723) | $ (39,069) | $ 2,053,423 | |
Balance, shares at Mar. 31, 2018 | 7,486,024 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (110,969) | $ (56,124) |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 33,352 | 7,434 |
Stock based compensation | 17,148 | 5,000 |
Loss on sale of assets | 3,418 | |
Change in operating assets and liabilities: | ||
Accounts and retainage receivable | (39,654) | (831,900) |
Security deposits and other non-current assets | (14,412) | |
Prepaid expenses and other costs | (4,284) | 7,700 |
Costs in excess of billings | (28,969) | 16,624 |
Income tax payable | 4,066 | |
Accounts payable and accrued expenses | 217,910 | 637,529 |
Billings in excess of costs | 34,354 | 16,589 |
Net cash (used in) provided by operating activities | 111,960 | (197,148) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of fixed assets | (68,628) | (6,787) |
Proceeds from disposition of property and equipment | 393 | |
Net cash (used in) investing activities | (68,235) | (6,787) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of convertible debt | 395,000 | |
Proceeds from issuance of notes payable | 61,062 | |
Repayments on long term debt | (351,481) | |
Repayments on capital leases | (16,619) | |
Repayments on notes payable | (14,113) | |
Net cash provided by financing activities | 73,849 | |
Net increase (decrease) in cash and cash equivalents | 117,574 | (203,935) |
Effect of foreign currency translation on cash | 18,704 | 12,961 |
Cash and cash equivalents -beginning | 455,700 | 537,867 |
Cash and cash equivalents - ending | 591,978 | $ 346,893 |
Supplemental disclosure of non-cash investing and financing activities | ||
Common stock issued for acquisition of business | 1,177,779 | |
Fair value of net assets acquired in business combination | 2,056,344 | |
Beneficial conversion feature | $ 2,214 |
Organization and Line of Busine
Organization and Line of Business | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Line of Business | 1. ORGANIZATION AND LINE OF BUSINESS H/Cell Energy Corporation (the “Company”) was incorporated in the state of Nevada on August 17, 2015. The Company, based in Flemington, N.J., is a company whose principal operations consist of designing and installing hydrogen energy systems. Effective January 31, 2017, the Company acquired The Pride Group (QLD) Pty Ltd, an Australian company (“Pride”) (see Note 11). Founded in 1997, Pride is a provider of security systems integration for a variety of customers in the government and commercial sector and has launched a new clean energy systems division to focus on the high growth renewable energy market in Asia-Pacific. The new clean energy division has not generated any revenue but has begun to bid work and expects to have projects completed in 2018. On February 1, 2018, the Company acquired PVBJ Inc. (“PVBJ”) for 444,445 shares of the Company’s common stock with a fair value of $1,177,779 and $221,800 in earn-out liability (see Note 12). Established in 2008, PVBJ is well recognized for the design, installation, maintenance and emergency service of environmental systems both in residential and commercial markets. PVBJ is now expanding into renewable energy systems. The Company has developed a hydrogen energy system for residential and commercial use designed to create electricity. This unique system uses renewable energy as its source for hydrogen production. It functions as a self-sustaining clean energy system. It can be configured as an off grid solution for all electricity needs or it can be connected to the grid to generate energy credits. Its production of hydrogen is truly eco-friendly, as it is not produced by the use of fossil fuels. It is a revolutionary green-energy concept that is safe, renewable, self-sustaining and cost effective. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Accounts Receivable Accounts receivable are recorded when invoices are issued and are presented in the balance sheet net of the allowance for doubtful accounts. The allowance for doubtful accounts is estimated based on the Company’s historical losses, the existing economic conditions in the construction industry, and the financial stability of its customers. Accounts are written off as uncollectible after collection efforts have failed. In addition, the Company does not generally charge interest on past-due accounts or require collateral. At March 31, 2018 and December 31 2017, there was no allowance for doubtful accounts required. Property and Equipment, and Depreciation Property and equipment are stated at cost. Depreciation is generally provided using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the remaining term of the lease or the estimated useful life of the improvement. Repairs and maintenance that do not improve or extend the lives of the property and equipment are charged to expense as incurred. Goodwill and Identifiable Intangible Assets Goodwill represents the excess of the aggregate of the following (1) consideration transferred, (2) the fair value of any non-controlling interest in the acquire, and (3) if the business combination is achieved in stages, the acquisition-date fair value of our previously held equity interest in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Identifiable intangible assets consist primarily of customer lists and relationships, non-compete agreements and technology based intangibles and other contractual agreements. The Company amortizes finite lived identifiable intangible assets over the shorter of their stated or statutory duration or their estimated useful lives, generally ranging from 3 to 15 years, on a straight-line basis to their estimated residual values and periodically reviews them for impairment. Total identifiable intangible assets comprised 37% of our consolidated total assets at March 31. 2018. There was no goodwill at March 31, 2017. The Company uses the acquisition method of accounting for all business combinations and does not amortize goodwill or intangible assets with indefinite useful lives. Goodwill and intangible assets with indefinite useful lives are tested for possible impairment annually during the fourth quarter of each fiscal year or more frequently if events or changes in circumstances indicate that the asset might be impaired. Comprehensive Income (Loss) Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). The Company’s other comprehensive income (loss) is comprised of foreign currency translation adjustments. Advertising Costs Advertising costs are charged to expense during the period in which they are incurred. Advertising expense for the three months ended March 31, 2018 and 2017 was approximately $1,172 and $1,622, respectively. Foreign Currency Translation The Company translates its foreign subsidiary’s assets and liabilities denominated in foreign currencies into U.S. dollars at current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in accumulated other comprehensive income. The Company records gains and losses from changes in exchange rates on transactions denominated in currencies other than each reporting location’s functional currency in net income (loss) for each period. Revenue Recognition On January 1, 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606) using the modified retrospective method applied to those contracts which were not completed as of December 31, 2017. Results for reporting periods beginning January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. Under Topic 606 requirements, the Company recognizes revenue from the installation or construction of projects over time using the cost-based input method. The Company accounts for a contract when: (i) it has approval and commitment from both parties, (ii) the rights of the parties are identified, (iii) payment terms are identified, (iv) the contract has commercial substance, and (v) collectability of consideration is probable. The Company considers the start of a project to be when the above criteria have been met and the Company either has written authorization from the customer to proceed or an executed contract. The Company uses the total costs incurred on the project relative to the total expected costs to satisfy the performance obligation. The input method involves measuring the resources consumed, labor hours expended, costs incurred, time lapsed, or machine hours used relative to the total expected inputs to the satisfaction of the performance obligation. Costs incurred prior to actual contract (i.e. design, engineering, procurement of material, etc.) should not be recognized as the client does not have control of the good/service provided. When the estimate on a contract indicates a loss, or claims against costs incurred reduce the likelihood of recoverability of such costs, the Company records the entire estimated loss in the period the loss becomes known. Project contracts typically provide for a schedule of billings or invoices to the customer based on the Company’s job to date percentage of completion of specific tasks inherent in the fulfillment of its performance obligation(s). The schedules for such billings usually do not precisely match the schedule on which costs are incurred. As a result, contract revenue recognized in the statement of operations can and usually does differ from amounts that can be billed or invoiced to the customer at any point during the contract. Amounts by which cumulative contract revenue recognized on a contract as of a given date exceed cumulative billings and unbilled receivables to the customer under the contract are reflected as a current asset in the Company’s balance sheet under the captions “Costs and estimated earnings in excess of billings” and “Unbilled accounts receivable.” Amounts by which cumulative billings to the customer under a contract as of a given date exceed cumulative contract revenue recognized on the contract are reflected as a current liability in the Company’s balance sheet under the caption “Billings in excess of costs and estimated earnings.” Revenue from service or short term contracts is recognized currently as the work is performed. Time and materials are accordingly charged to the customer at completion of the job. The Company recognizes service or short term contract revenues when there is persuasive evidence of an arrangement, delivery has occurred or services are rendered, the sales price is determinable, and collectability is reasonably assured. Revenue is typically recorded once all performance obligations have been satisfied. Sales are recorded net of discounts and returns, which historically have not been material. Cash and Cash Equivalents Cash and cash equivalents includes cash in bank and money market funds as well as other highly liquid investments with an original maturity of three months or less. The Company had no cash equivalents as of March 31, 2018 or December 31 2017. At times during the three months ended March 31, 2018 and 2017, balances exceeded the FDIC insurance limit of $250,000. Research and Development Costs Research and development costs are expensed as incurred. These costs consist primarily of consulting fees, salaries and direct payroll related costs. Stock-Based Compensation The Company recognizes expense for its stock-based compensation based on the fair value of the awards at the time they are granted. We estimate the value of stock option awards on the date of grant using the Black-Scholes model. The determination of the fair value of stock-based payment awards on the date of grant is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility over the term of the awards, expected term, risk-free interest rate, expected dividends and expected forfeiture rates. The forfeiture rate is estimated using historical option cancellation information, adjusted for anticipated changes in expected exercise and employment termination behavior. Our outstanding awards do not contain market or performance conditions. Sales and Use Tax The Company collects sales tax in various jurisdictions. Upon collection from customers, it records the amount as a payable to the related jurisdiction. On a periodic basis, it files a sales tax return with the jurisdictions and remits the amount indicated on the return. Income Taxes The Company uses the asset and liability method of accounting for income taxes pursuant to FASB ASC 740, Income Taxes The determination of the Company’s provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in the Company’s financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes in the financial statements as appropriate. Accrued interest and penalties related to income tax matters are classified as a component of income tax expense. The Company recognizes and measures its unrecognized tax benefits in accordance with ASC 740. Under that guidance, management assesses the likelihood that tax positions will be sustained upon examination based on the facts, circumstances and information, including the technical merits of those positions, available at the end of each period. The measurement of unrecognized tax benefits is adjusted when new information is available, or when an event occurs that requires a change. The Company did not identify any material uncertain tax positions. The Company did not recognize any interest or penalties for unrecognized tax benefits. The federal income tax returns of the Company are subject to examination by the IRS, generally for the three years after they are filed. The Company’s 2017, 2016 and 2015 income tax returns are still open for examination by the taxing authorities. Fair Value of Financial Instruments Except for the Company’s earn-out liability, the carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed. The Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories: ● Level 1—quoted prices in active markets for identical assets and liabilities; ● Level 2—observable market based inputs or unobservable inputs that are corroborated by market data; and ● Level 3—significant unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The table below presents a reconciliation of the fair value of the Company’s contingent earn-out obligations that use significant unobservable inputs (Level 3). Balance at December 31, 2017 $ - Earn-out liability from acquisition of PVBJ Inc. 172,171 Payments - Adjustments to fair value - Balance at March 31, 2018 $ 172,171 The Company values earn-out obligations using a probability weighted discounted cash flow method. This fair value measurement is based on significant unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. This analysis reflects the contractual terms of the purchase agreements (e.g., minimum and maximum payments, length of earn-out periods, manner of calculating any amounts due, etc.) and utilizes assumptions with regard to future cash flows, probabilities of achieving such future cash flows and a discount rate. The contingent earn-out obligations are measured at fair value each reporting period and changes in estimates of fair value are recognized in earnings. Net Income (Loss) Per Common Share The Company computes basic net income (loss) per share by dividing net income (loss) per share available to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods as applicable. The computation of diluted loss per share excludes dilutive securities for the three months ended March 31, 2018 and 2017 because their inclusion would be anti-dilutive. Potentially dilutive securities excluded from the computation of basic and diluted net loss per share for the three months ended March 31, 2018 and 2017 are as follows: March 31, 2018 March 31, 2017 Options to purchase common stock 1,050,000 1,000,000 Totals 1,050,000 1,000,000 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 3. RELATED PARTY TRANSACTIONS The Company’s current office space consists of approximately 800 square feet, which is donated to it from one of its executive officers. There is no lease agreement and the Company pays no rent. Effective February 4, 2016, the Company sold 526,316 shares of common stock to Reza Enterprises, Inc., an entity beneficially owned by Rezaul Karim. In connection with, and as a condition of closing, the Company agreed to appoint Rezaul Karim to its board of directors. Rezaul Karim resigned from the board of directors effective April 1, 2017. On April 1, 2017, the Company entered into a consulting agreement with Rezaul Karim for a period of one year. As such his function will be to promote our products and services. In each of April 2017 and 2018, Rezaul Karim exercised 100,000 options. In June 2016, the Company entered into a contract with Rezaul Karim, one of its former directors, for the installation of an HC-1 system. The system installation was complete pending any change orders as of March 31, 2018, and generated $31,789 and $16,090 of revenue for the three months ended March 31, 2018 and 2017, respectively. The Company subcontracted the installation of the system to Renewable Energy Holdings LLC (“REH”), a company owned by Mike Strizki, one of the Company’s executive officers. James Strizki, one of the Company’s executive officers, is vice president of operations at REH. Costs incurred for REH were $31,617 and $15,905 for the three months ended March 31, 2018 and 2017, respectively. The Company has entered into agreements to indemnify its directors and executive officers, in addition to the indemnification provided for in the Company’s articles of incorporation and bylaws. These agreements, among other things, provide for indemnification of the Company’s directors and executive officers for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts incurred by any such person in any action or proceeding, including any action by or in the right of the Company, arising out of such person’s services as a director or executive officer of the Company, any subsidiary of the Company or any other company or enterprise to which the person provided services at the Company’s request. The Company believes that these provisions and agreements are necessary to attract and retain qualified persons as directors and executive officers. At March 31, 2018 and December 31, 2017, the balances due to Turquino Equity LLC, a significant shareholder, amounted to approximately $15,000 and $31,257, respectively. These balances represent expenses for management services. There was $19,500 of management fees expensed for the three months ended March 31, 2018. Management fees expensed totaled $45,826 for the three months ended March 31, 2017. On January 2, 2018, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with two of its directors, pursuant to which the Company sold an aggregate principal amount of $400,000 in 12% Convertible Debentures (“Debentures”), convertible into shares of the Company’s common stock at a conversion price of $0.75 per share. The Debentures, together with any accrued and unpaid interest, become due and payable on January 2, 2020 (the “Maturity Date”). Interest on the Debentures accrues at the rate of 12% per annum, payable monthly in cash, beginning on February 1, 2018 and on the Maturity Date. The Debentures are convertible into common stock at a conversion price of $0.75 per share at the discretion of the holder, with special provisions applying to any holder whose conversion would result in the holder beneficially owning more than 4.99% of the Company’s common stock. In connection with this convertible note payable, the Company recorded a $395,000 discount on debt, related to the beneficial conversion feature of the note to be amortized over the life of the note using the effective interest method, or until the note is converted or repaid. |
Significant Concentrations of C
Significant Concentrations of Credit Risk | 3 Months Ended |
Mar. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Significant Concentrations of Credit Risk | 4. SIGNIFICANT CONCENTRATIONS OF CREDIT RISK Cash is maintained at an authorized deposit-taking institution (bank) incorporated in both the United States and Australia and is insured by the U.S. Federal Deposit Insurance Corporation and Australian Securities & Investments Commission up to $250,000 and approximately $186,000 USD in total, respectively. At March 31, 2018, the balances exceeded the insured limits by $341,978 and $405,978, respectively. Credit risk for trade accounts is concentrated as well because substantially all of the balances are receivable from entities located within certain geographic regions. To reduce credit risk, the Company performs ongoing credit evaluations of its customers’ financial conditions, but does not generally require collateral. In addition, at March 31, 2018, approximately 25% of the Company’s accounts receivable was from one customer and, at December 31, 2017, approximately 36% of the Company’s accounts receivable was due from three unrelated customers, 14%, 12% and 10%, respectively. |
Major Customers
Major Customers | 3 Months Ended |
Mar. 31, 2018 | |
Major Customers | |
Major Customers | 5. MAJOR CUSTOMERS During the three months ended March 31, 2018, there was one customer with a concentration of 10% or higher of the Company’s revenue at 30%. During the three months ended March 31, 2017 there was one customer with a concentration of 10% or higher of the Company’s revenue at 49%. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 6. PROPERTY AND EQUIPMENT At March 31, 2018 and December 31, 2017, property and equipment were comprised of the following: March 31, 2018 December 31, 2017 Furniture and fixtures (5 to 7 years) $ 13,204 $ 6,857 Machinery and equipment (5 to 7 years) 35,305 35,919 Computer and software (3 to 5 years) 93,141 94,761 Auto and truck (5 to 7 years) 807,042 250,044 Leasehold improvements (life of lease) 39,914 40,608 988,606 428,189 Less accumulated depreciation 579,230 325,616 $ 409,376 $ 102,573 Depreciation expense for the three months ended March 31, 2018 and 2017 amounted to $27,574 and $7,434, respectively. |
Uncompleted Contracts
Uncompleted Contracts | 3 Months Ended |
Mar. 31, 2018 | |
Contractors [Abstract] | |
Uncompleted Contracts | 7. UNCOMPLETED CONTRACTS Costs, estimated earnings and billings on uncompleted contracts are summarized as follows at March 31, 2018 and December 31, 2017: March 31, 2018 December 31, 2017 Costs incurred on uncompleted contracts $ 2,677,262 $ 2,485,787 Estimated earnings 483,142 779,598 Costs and estimated earnings earned on uncompleted contracts 3,160,404 3,265,385 Billings to date 3,882,030 3,553,817 Costs and estimated earnings in excess of billings on uncompleted contracts (721,626 ) (288,432 ) Costs and earnings in excess of billings on completed contracts (686,064 ) (252,757 ) $ (32,562 ) $ (35,675 ) Costs in excess of billings $ 67,982 $ 51,531 Billings in excess of cost (100,544 ) (87,206 ) $ (32,562 ) $ (35,675 ) |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | 8. COMMITMENTS The Company previously entered into two operating leases for office space in Woombye and Brisbane, Queensland, Australia, both which expired in April 2018. The Company signed a new lease in February of 2018 for new office space in Kunda Park Queensland Australia, starting in May 2018. The company also renewed the Brisbane office space for one year starting in May 2018. The Company’s office in Downingtown, Pennsylvania was renewed in January of 2018 for a one-year period. The future minimum payments on the leases for each of the next two years and in the aggregate amount to the following: 2018 $ 66,630 2019 21,600 $ 88,230 Rent expense for each of the three months ended March 31, 2018 and 2017 amounted to approximately $23,000 and is included in “General and Administrative” expenses on the related statements of operations. During the three months March 31, 2018, the Company leased equipment under four capital leases, with a net book value of $165,609, which expire in June 2023. During the three months March 31, 2017, the Company had no capital leases. The obligations are payable in monthly installments ranging from approximately $615 to $2,630 with interest rates from 5.57% to 7.20% per annum. The leases are secured by the related equipment. At March 31, 2018, approximate payments to be made on these capital lease obligations are as follows: 2018 $ 58,655 2019 78,207 2020 78,207 2021 44,680 2022 7,510 Thereafter 4,380 Capital lease obligation 271,639 Less amounts representing interest 23,910 Current portion 49,856 Net $ 197,873 For the three months ended March 31, 2018, interest expense on the capital leases was approximately $1,300. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 9. DEBT Long-term debt consisted of the following: Equipment Notes Payable Non-current portion: March 31, 2018 December 31, 2017 Note payable with monthly payments of $716, including interest at 6.50% per annum through April 2021. $ 17,382 $ - Note payable with monthly payments of $984, including interest at 14.70% per annum through March 2023. $ 53,284 $ - Note payable with monthly payments of $947 including interest at 6.14% per annum through August 2024. $ 50,810 $ - Total non-current portion: $ 121,476 $ - Total current portion: $ 23,823 $ - Total: $ 145,299 $ - Aggregate annual principal payments in the fiscal years subsequent to December 31 2017, are as follows: Year ending December 31: Amount 2018 (remaining) $ 23,823 2019 27,695 2020 28,727 2021 23,872 2022 21,734 Thereafter 19,448 $ 145,299 Convertible Note Payable On January 2, 2018, the Company entered into an agreement with two related parties, who are directors of the Company and issued a 12.0% interest bearing convertible debenture for $400,000 due on January 2, 2020, with conversion features commencing immediately following the date of the note. Payments of interest only were due monthly beginning January 2018. The Debentures are convertible into common stock at a conversion price of $0.75 per share at the discretion of the holder, with special provisions applying to any holder whose conversion would result in the holder beneficially owning more than 4.99% of the Company’s common stock. In connection with this convertible note payable, the Company recorded a $395,000 discount on debt, related to the beneficial conversion feature of the note to be amortized over the life of the note using the effective interest method, or until the note is converted or repaid. The Company incurred $5,000 of legal fees for preparation of the financing documents, which has been reflected as a reduction of the net proceeds. For the three months ended March 31, 2018, the Company incurred interest expense of $14,215, of which $2,214 related to the amortization of the discount. Convertible notes payable consisted of the following: March 31, 2018 December 31, 2017 Note payable of $395,000, less debt discount of $392,786 including interest at 12% per annum through January 2020. $ 2,214 $ - |
Contract Backlog
Contract Backlog | 3 Months Ended |
Mar. 31, 2018 | |
Contract Backlog | |
Contract Backlog | 10. CONTRACT BACKLOG As of March 31, 2018, the Company had a contract backlog approximating $662,000, with anticipated direct costs to complete approximating $483,142. At March 31, 2017, the Company had a contract backlog approximating $1,661,000, with anticipated direct costs to complete approximating $1,270,000. |
Acquisition Under Common Contro
Acquisition Under Common Control | 3 Months Ended |
Mar. 31, 2018 | |
Acquisition Under Common Control | |
Acquisition Under Common Control | 11. ACQUISITION UNDER COMMON CONTROL On January 31, 2017 (the “Closing Date”), the Company entered into a share exchange agreement (the “Exchange Agreement”) by and among the Company, The Pride Group (QLD) Pty Ltd., an Australian corporation (“Pride”), Turquino Equity LLC (“Turquino”) and Stephen Paul Mullane and Marie Louise Mullane as Trustees of the Mullane Family Trust (the “Mullane Trust” and together with Turquino, the “Pride Shareholders”). Andrew Hidalgo and Matthew Hidalgo, the Company’s Chief Executive Officer and Chief Financial Officer, respectively, are each a managing partner of Turquino. Pursuant to the Exchange Agreement, the Company acquired all of the issued and outstanding capital stock of Pride from the Pride Shareholders in exchange for an aggregate of 3,800,000 shares of the Company’s common stock (the “Acquisition Shares”). As a result, the combination of the Company and Pride pursuant to the Exchange Agreement is considered a business combination of companies under common control and will be accounted for in a manner similar to a pooling-of-interests. The accompanying financial statements have been retrospectively restated as a result of an acquisition of another company under common control with the Company, which was completed in January 2017. |
Business Acquisition
Business Acquisition | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Business Acquisition | 12. BUSINESS ACQUISITION On February 1, 2018 (the “Closing Date”), the Company entered into a stock purchase agreement (the “Purchase Agreement”) by and among the Company, PVBJ and Benis Holdings LLC, the sole shareholder of PVBJ (“Benis Holdings”). Pursuant to the Purchase Agreement, the Company acquired all of the issued and outstanding capital stock of PVBJ from Benis Holdings for an aggregate amount equal to (i) $221,800 (the “Cash Purchase Price”) and (ii) 444,445 shares of the Company’s common stock, par value $.0001 per share having a fair value of $1,177,779 (the “Acquisition Shares”). Pursuant to the Purchase Agreement, the Acquisition Shares were issued at closing, and the Cash Purchase Price will be paid to Benis Holdings from positive earnings before taxes of PVBJ, with Benis Holdings to receive 50% of annual earnings before taxes of PVBJ until such time as Benis Holdings has received the full Cash Purchase Price. In connection with the acquisition of PVBJ, the Company entered into an employment agreement (the “Employment Agreement”) with Paul V. Benis, Jr. to serve as an Executive Vice President of the Company for a period of three years. Pursuant to the Employment Agreement, Mr. Benis shall receive an annual salary of $150,000 and have oversight of the business operations of PVBJ. The preliminary estimated consideration transferred in the acquisition was as follows: Upfront consideration $ 1,177,779 Liabilities assumed 878,565 Total $ 2,056,343 The estimated fair values of working capital balances, property and equipment, identifiable intangible assets and goodwill are provisional and are based on the information that was available as of the acquisition date. The estimated fair values of these provisional items are based on certain valuation and other studies and are in progress and not yet at the point where there is sufficient information for a definitive measurement. The Company believes the preliminary information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair values reflected are subject to change and such changes could be significant. The Company expects to finalize the valuation of tangible assets and liabilities, identifiable intangible assets and goodwill, and complete the acquisition accounting as soon as practicable but no later than January 2, 2019. The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Cash and cash equivalents $ 30,408 Accounts receivable 277,338 Property and equipment, net 272,554 Customer list 102,422 Goodwill 1,373,621 Total assets acquired 2,056,344 Accounts payable (112,590 ) Debt assumed (590,657 ) Earn out liability (175,318 ) Total liabilities assumed (878,565 ) Total net assets acquired $ 1,177,779 The goodwill arising from the acquisition represents the expected synergistic benefits of the transaction, primarily related to lower future operating expenses and the knowledge and experience of the workforce in place. The goodwill is not deductible for income tax purposes. A summary of preliminary estimated identifiable intangible assets acquired, preliminary estimated useful lives and amortization method is as follows: Useful Life in Amount Years Amortization Method Customer List $ 102,422 5 Straight Line Total $ 102,422 The results of the Company’s operations are included in the condensed consolidated statements of operations beginning February 1, 2018. The Company’s loss for the two month period ended March 31, 2018 totaled $81,570. The pre-tax loss includes estimated acquired intangible asset amortization of $3,414 for the two month period ended March 31, 2018. For the two month period ended March 31, 2018, acquisition related costs for the Company totaled $15,000, and are included in general and administration expenses. The Company may incur additional acquisition related costs during 2018. Pro forma results for H/Cell, Inc. giving effect to the PVBJ Inc. acquisition The following pro forma financial information presents the combined results of operations of PVBJ Inc. and the Company for the three month period ended March 31, 2018 and 2017. The pro forma financial information presents the results as if the acquisition had occurred as of the beginning of 2018 and 2017. The unaudited pro forma results presented include amortization charges for acquired intangible assets, interest expense and stock-based compensation expense. Pro forma financial information is presented for informational purposes and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place as of the beginning of 2017. Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Revenues $ 1,935,454 $ 2,419,175 Net income (loss) (99,487 ) 21,696 Net income per share: Basic (0.00 ) (0.00 ) Diluted (0.00 ) (0.00 ) |
Stock Options Awards and Grants
Stock Options Awards and Grants | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options Awards and Grants | 13. STOCK OPTIONS AWARDS AND GRANTS A summary of the stock option activity and related information for the 2016 Incentive Stock Option Plan from December 31, 2015 to March 31, 2018 is as follows: Shares Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2015 - Grants 1,000,000 $ 0.01 5.00 $ 387,450 Exercised - Canceled - Outstanding at December 31, 2016 1,000,000 $ 0.01 3.19 $ 387,450 Grants 150,000 1.83 4.35 $ 165,477 Exercised (100,000 ) 0.01 - (38,475 ) Canceled - Outstanding at December 31, 2017 1,050,000 $ 0.27 3.35 514,182 Grants - Exercised - Canceled - Outstanding at March 31, 2018 1,050,000 $ 0.27 3.11 $ 514,182 Exercisable at March 31, 2018 - $ - - $ - The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on options with an exercise price less than the Company’s weighted average grant date stock price of $0.473 per share, which would have been received by the option holders had those option holders exercised their options as of that date. It also includes options granted at exercise prices of $2.00 and $1.50, which were equal to the closing sales price of the Corporation’s common stock on the dates of grant. Option valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option model with a volatility figure derived from an index of historical stock prices of comparable entities until sufficient data exists to estimate the volatility using the Company’s own historical stock prices. Management determined this assumption to be a more accurate indicator of value. The Company accounts for the expected life of options based on the contractual life of options for non-employees. For incentive options granted to employees, the Company accounts for the expected life in accordance with the “simplified” method, which is used for “plain-vanilla” options, as defined in the accounting standards codification. The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options. The fair value of stock-based payment awards was estimated using the Black-Scholes pricing model. The following table presents information related to stock options at March 31, 2018: Options Outstanding Options Exercisable Weighted Average Exercisable Exercise Number of Remaining Life Number of Price Options In Years Options $ 0.27 1,050,000 3.11 - As of March 31, 2018, there was $93,218 of unrecognized compensation expense. As of March 31, 2017, there was no unrecognized compensation expense. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 14. SEGMENT INFORMATION Our business is organized into two reportable segments: renewable systems integration revenue and non-renewable systems integration revenue. The reporting segments follow the same accounting policies used in the preparation of the Company’s unaudited condensed consolidated financial statements. The following represents selected information for the Company’s reportable segments for the three months ended March 31, 2018 and 2017. March 31, 2018 December 31, 2017 Assets by Segment Renewable Systems Integration $ 1,615,235 $ 27,589 Non-renewable Systems Integration 2,122,489 1,457,607 $ 3,737,724 $ 1,485,196 For the Three Months Ended: Revenue by Segment March 31, 2018 March 31, 2017 Renewable Systems Integration $ 31,789 $ 16,090 Non-renewable Systems Integration 1,694,535 1,850,755 $ 1,726,324 $ 1,866,845 Cost of Sales by Segment Renewable Systems Integration $ 31,617 $ 16,163 Non-renewable Systems Integration 1,209,413 1,413,562 $ 1,241,030 $ 1,429,725 Operating Expenses Renewable Systems Integration $ 161,692 $ 46,435 Non-renewable Systems Integration 412,992 446,809 574,684 $ 493,244 Operating (Loss) Income by Segment Renewable Systems Integration (103,083 ) $ (46,105 ) Non-renewable Systems Integration (7,886 ) (10,019 ) $ (110,969 ) $ (56,124 ) |
401 (k) Plans
401 (k) Plans | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
401 (k) Plans | 15. 401(k) PLANS Substantially all of the Company’s employees may elect to defer a portion of their annual compensation in the Company-sponsored 401(k) tax-deferred savings plans. The Company makes matching contributions in these plans. The amount charged to expense for these plans was $5,156 for the three months ended March 31, 2018. There was no expense for the three months ended March 31, 2017. |
Income Tax
Income Tax | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax | |
Income Tax | 16. INCOME TAX For the three months ended March 31, 2018 and 2017, the Company did not record any income tax expense or benefit. No tax benefit has been recorded in relation to the pre-tax loss for the three months ended March 31, 2018 and 2017, due to a full valuation allowance to offset any deferred tax asset related to net operating loss carry forwards attributable to the losses. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | 17. RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued accounting standard update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under previous guidance. This may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. In July 2015, the FASB approved the proposal to defer the effective date of ASU 2014-09 standard by one year. Early adoption was permitted after December 15, 2016, and the standard became effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods therein. In 2016, the FASB issued final amendments to clarify the implementation guidance for principal versus agent considerations (ASU No. 2016-08), accounting for licenses of intellectual property and identifying performance obligations (ASU No. 2016-10), narrow-scope improvements and practical expedients (ASU No. 2016-12) and technical corrections and improvements to ASU 2014-09 (ASU No. 2016-20) in its new revenue standard. The Company has performed a review of the requirements of the new revenue standard and is monitoring the activity of the FASB and the transition resource group as it relates to specific interpretive guidance. The Company reviewed customer contracts, applied the five-step model of the new standard to its contracts, and compared the results to its current accounting practices. The Company has drafted disclosures required by the new standard and the adoption has not had a material impact on the financial statements. In March 2016, FASB issued ASU No. 2016-09, “Improvements to Employee Share-based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. As a result of adoption, there was no material effect on the Company’s accompanying consolidated financial statements. During January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments — Overall: Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The standard addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is not permitted with the exception of certain provisions related to the presentation of other comprehensive income. The adoption of ASU 2016-01 did not have a material impact on the Company’s financial position, results of operations or cash flows. During February 2016, the FASB issued ASU No. 2016-02, “Leases” (“ASU 2016-02”). The standard requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of ASU 2016-02 is not expected to have a material impact on the Company’s financial position, results of operations or cash flows due to an insignificant number of leases that the Company has entered into. In August 2016, FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 clarifies the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. ASU 2016-15 is effective for fiscal years, and interim periods within those years beginning after December 15, 2017. The Company adopted ASU 2016-15 effective January 1, 2018 and it did not have a material impact on its financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”) to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under this new guidance, modification accounting is required if the fair value, vesting conditions, or classification of the award changes as a result of the change in terms or conditions. ASU 2017-09 is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within each annual reporting period. The Company adopted ASU 2017-09 effective January 1, 2018 and it did have a material impact on its financial statements. Management does not believe there would have been a material effect on the accompanying financial statements had any other recently issued, but not yet effective, accounting standards been adopted in the current period. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. SUBSEQUENT EVENTS On April 2, 2018, Rezaul Karim a former director/consultant exercised options to acquire 100,000 shares of the Company’s common stock. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded when invoices are issued and are presented in the balance sheet net of the allowance for doubtful accounts. The allowance for doubtful accounts is estimated based on the Company’s historical losses, the existing economic conditions in the construction industry, and the financial stability of its customers. Accounts are written off as uncollectible after collection efforts have failed. In addition, the Company does not generally charge interest on past-due accounts or require collateral. At March 31, 2018 and December 31 2017, there was no allowance for doubtful accounts required. |
Property and Equipment, and Depreciation | Property and Equipment, and Depreciation Property and equipment are stated at cost. Depreciation is generally provided using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the remaining term of the lease or the estimated useful life of the improvement. Repairs and maintenance that do not improve or extend the lives of the property and equipment are charged to expense as incurred. |
Goodwill and Identifiable Intangible Assets | Goodwill and Identifiable Intangible Assets Goodwill represents the excess of the aggregate of the following (1) consideration transferred, (2) the fair value of any non-controlling interest in the acquire, and (3) if the business combination is achieved in stages, the acquisition-date fair value of our previously held equity interest in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Identifiable intangible assets consist primarily of customer lists and relationships, non-compete agreements and technology based intangibles and other contractual agreements. The Company amortizes finite lived identifiable intangible assets over the shorter of their stated or statutory duration or their estimated useful lives, generally ranging from 3 to 15 years, on a straight-line basis to their estimated residual values and periodically reviews them for impairment. Total identifiable intangible assets comprised 37% of our consolidated total assets at March 31. 2018. There was no goodwill at March 31, 2017. The Company uses the acquisition method of accounting for all business combinations and does not amortize goodwill or intangible assets with indefinite useful lives. Goodwill and intangible assets with indefinite useful lives are tested for possible impairment annually during the fourth quarter of each fiscal year or more frequently if events or changes in circumstances indicate that the asset might be impaired. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). The Company’s other comprehensive income (loss) is comprised of foreign currency translation adjustments. |
Advertising Costs | Advertising Costs Advertising costs are charged to expense during the period in which they are incurred. Advertising expense for the three months ended March 31, 2018 and 2017 was approximately $1,172 and $1,622, respectively. |
Foreign Currency Translation | Foreign Currency Translation The Company translates its foreign subsidiary’s assets and liabilities denominated in foreign currencies into U.S. dollars at current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in accumulated other comprehensive income. The Company records gains and losses from changes in exchange rates on transactions denominated in currencies other than each reporting location’s functional currency in net income (loss) for each period. |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606) using the modified retrospective method applied to those contracts which were not completed as of December 31, 2017. Results for reporting periods beginning January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. Under Topic 606 requirements, the Company recognizes revenue from the installation or construction of projects over time using the cost-based input method. The Company accounts for a contract when: (i) it has approval and commitment from both parties, (ii) the rights of the parties are identified, (iii) payment terms are identified, (iv) the contract has commercial substance, and (v) collectability of consideration is probable. The Company considers the start of a project to be when the above criteria have been met and the Company either has written authorization from the customer to proceed or an executed contract. The Company uses the total costs incurred on the project relative to the total expected costs to satisfy the performance obligation. The input method involves measuring the resources consumed, labor hours expended, costs incurred, time lapsed, or machine hours used relative to the total expected inputs to the satisfaction of the performance obligation. Costs incurred prior to actual contract (i.e. design, engineering, procurement of material, etc.) should not be recognized as the client does not have control of the good/service provided. When the estimate on a contract indicates a loss, or claims against costs incurred reduce the likelihood of recoverability of such costs, the Company records the entire estimated loss in the period the loss becomes known. Project contracts typically provide for a schedule of billings or invoices to the customer based on the Company’s job to date percentage of completion of specific tasks inherent in the fulfillment of its performance obligation(s). The schedules for such billings usually do not precisely match the schedule on which costs are incurred. As a result, contract revenue recognized in the statement of operations can and usually does differ from amounts that can be billed or invoiced to the customer at any point during the contract. Amounts by which cumulative contract revenue recognized on a contract as of a given date exceed cumulative billings and unbilled receivables to the customer under the contract are reflected as a current asset in the Company’s balance sheet under the captions “Costs and estimated earnings in excess of billings” and “Unbilled accounts receivable.” Amounts by which cumulative billings to the customer under a contract as of a given date exceed cumulative contract revenue recognized on the contract are reflected as a current liability in the Company’s balance sheet under the caption “Billings in excess of costs and estimated earnings.” Revenue from service or short term contracts is recognized currently as the work is performed. Time and materials are accordingly charged to the customer at completion of the job. The Company recognizes service or short term contract revenues when there is persuasive evidence of an arrangement, delivery has occurred or services are rendered, the sales price is determinable, and collectability is reasonably assured. Revenue is typically recorded once all performance obligations have been satisfied. Sales are recorded net of discounts and returns, which historically have not been material. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents includes cash in bank and money market funds as well as other highly liquid investments with an original maturity of three months or less. The Company had no cash equivalents as of March 31, 2018 or December 31 2017. At times during the three months ended March 31, 2018 and 2017, balances exceeded the FDIC insurance limit of $250,000. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. These costs consist primarily of consulting fees, salaries and direct payroll related costs. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes expense for its stock-based compensation based on the fair value of the awards at the time they are granted. We estimate the value of stock option awards on the date of grant using the Black-Scholes model. The determination of the fair value of stock-based payment awards on the date of grant is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility over the term of the awards, expected term, risk-free interest rate, expected dividends and expected forfeiture rates. The forfeiture rate is estimated using historical option cancellation information, adjusted for anticipated changes in expected exercise and employment termination behavior. Our outstanding awards do not contain market or performance conditions. |
Sales and Use Tax | Sales and Use Tax The Company collects sales tax in various jurisdictions. Upon collection from customers, it records the amount as a payable to the related jurisdiction. On a periodic basis, it files a sales tax return with the jurisdictions and remits the amount indicated on the return. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes pursuant to FASB ASC 740, Income Taxes The determination of the Company’s provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in the Company’s financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes in the financial statements as appropriate. Accrued interest and penalties related to income tax matters are classified as a component of income tax expense. The Company recognizes and measures its unrecognized tax benefits in accordance with ASC 740. Under that guidance, management assesses the likelihood that tax positions will be sustained upon examination based on the facts, circumstances and information, including the technical merits of those positions, available at the end of each period. The measurement of unrecognized tax benefits is adjusted when new information is available, or when an event occurs that requires a change. The Company did not identify any material uncertain tax positions. The Company did not recognize any interest or penalties for unrecognized tax benefits. The federal income tax returns of the Company are subject to examination by the IRS, generally for the three years after they are filed. The Company’s 2017, 2016 and 2015 income tax returns are still open for examination by the taxing authorities. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Except for the Company’s earn-out liability, the carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed. The Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories: ● Level 1—quoted prices in active markets for identical assets and liabilities; ● Level 2—observable market based inputs or unobservable inputs that are corroborated by market data; and ● Level 3—significant unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The table below presents a reconciliation of the fair value of the Company’s contingent earn-out obligations that use significant unobservable inputs (Level 3). Balance at December 31, 2017 $ - Earn-out liability from acquisition of PVBJ Inc. 172,171 Payments - Adjustments to fair value - Balance at March 31, 2018 $ 172,171 The Company values earn-out obligations using a probability weighted discounted cash flow method. This fair value measurement is based on significant unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. This analysis reflects the contractual terms of the purchase agreements (e.g., minimum and maximum payments, length of earn-out periods, manner of calculating any amounts due, etc.) and utilizes assumptions with regard to future cash flows, probabilities of achieving such future cash flows and a discount rate. The contingent earn-out obligations are measured at fair value each reporting period and changes in estimates of fair value are recognized in earnings. |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share The Company computes basic net income (loss) per share by dividing net income (loss) per share available to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods as applicable. The computation of diluted loss per share excludes dilutive securities for the three months ended March 31, 2018 and 2017 because their inclusion would be anti-dilutive. Potentially dilutive securities excluded from the computation of basic and diluted net loss per share for the three months ended March 31, 2018 and 2017 are as follows: March 31, 2018 March 31, 2017 Options to purchase common stock 1,050,000 1,000,000 Totals 1,050,000 1,000,000 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Reconciliation the Contingent Earn-out Obligations | The table below presents a reconciliation of the fair value of the Company’s contingent earn-out obligations that use significant unobservable inputs (Level 3). Balance at December 31, 2017 $ - Earn-out liability from acquisition of PVBJ Inc. 172,171 Payments - Adjustments to fair value - Balance at March 31, 2018 $ 172,171 |
Schedule of Potential Antidilutive Computation of Basic and Diluted Net Loss Per Share | Potentially dilutive securities excluded from the computation of basic and diluted net loss per share for the three months ended March 31, 2018 and 2017 are as follows: March 31, 2018 March 31, 2017 Options to purchase common stock 1,050,000 1,000,000 Totals 1,050,000 1,000,000 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | At March 31, 2018 and December 31, 2017, property and equipment were comprised of the following: March 31, 2018 December 31, 2017 Furniture and fixtures (5 to 7 years) $ 13,204 $ 6,857 Machinery and equipment (5 to 7 years) 35,305 35,919 Computer and software (3 to 5 years) 93,141 94,761 Auto and truck (5 to 7 years) 807,042 250,044 Leasehold improvements (life of lease) 39,914 40,608 988,606 428,189 Less accumulated depreciation 579,230 325,616 $ 409,376 $ 102,573 |
Uncompleted Contracts (Tables)
Uncompleted Contracts (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Contractors [Abstract] | |
Summary of Cost, Estimated Earnings and Billings on Uncompleted Contracts | Costs, estimated earnings and billings on uncompleted contracts are summarized as follows at March 31, 2018 and December 31, 2017: March 31, 2018 December 31, 2017 Costs incurred on uncompleted contracts $ 2,677,262 $ 2,485,787 Estimated earnings 483,142 779,598 Costs and estimated earnings earned on uncompleted contracts 3,160,404 3,265,385 Billings to date 3,882,030 3,553,817 Costs and estimated earnings in excess of billings on uncompleted contracts (721,626 ) (288,432 ) Costs and earnings in excess of billings on completed contracts (686,064 ) (252,757 ) $ (32,562 ) $ (35,675 ) Costs in excess of billings $ 67,982 $ 51,531 Billings in excess of cost (100,544 ) (87,206 ) $ (32,562 ) $ (35,675 ) |
Commitments (Tables)
Commitments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments on Leases | The future minimum payments on the leases for each of the next two years and in the aggregate amount to the following: 2018 $ 66,630 2019 21,600 $ 88,230 |
Schedule of Payments on Capital Lease Obligation | At March 31, 2018, approximate payments to be made on these capital lease obligations are as follows: 2018 $ 58,655 2019 78,207 2020 78,207 2021 44,680 2022 7,510 Thereafter 4,380 Capital lease obligation 271,639 Less amounts representing interest 23,910 Current portion 49,856 Net $ 197,873 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Payable | Non-current portion: March 31, 2018 December 31, 2017 Note payable with monthly payments of $716, including interest at 6.50% per annum through April 2021. $ 17,382 $ - Note payable with monthly payments of $984, including interest at 14.70% per annum through March 2023. $ 53,284 $ - Note payable with monthly payments of $947 including interest at 6.14% per annum through August 2024. $ 50,810 $ - Total non-current portion: $ 121,476 $ - Total current portion: $ 23,823 $ - Total: $ 145,299 $ - |
Schedule of Annual Principal Payments | Aggregate annual principal payments in the fiscal years subsequent to December 31 2017, are as follows: Year ending December 31: Amount 2018 (remaining) $ 23,823 2019 27,695 2020 28,727 2021 23,872 2022 21,734 Thereafter 19,448 $ 145,299 |
Schedule of Convertible Notes Payable | Convertible notes payable consisted of the following: March 31, 2018 December 31, 2017 Note payable of $395,000, less debt discount of $392,786 including interest at 12% per annum through January 2020. $ 2,214 $ - |
Business Acquisition (Tables)
Business Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Estimated Consideration Transferred in Acquisition | The preliminary estimated consideration transferred in the acquisition was as follows: Upfront consideration $ 1,177,779 Liabilities assumed 878,565 Total $ 2,056,343 |
Schedule of Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Cash and cash equivalents $ 30,408 Accounts receivable 277,338 Property and equipment, net 272,554 Customer list 102,422 Goodwill 1,373,621 Total assets acquired 2,056,344 Accounts payable (112,590 ) Debt assumed (590,657 ) Earn out liability (175,318 ) Total liabilities assumed (878,565 ) Total net assets acquired $ 1,177,779 |
Schedule of Intangible Assets Acquired, Preliminary Estimated Useful Lives and Amortization | A summary of preliminary estimated identifiable intangible assets acquired, preliminary estimated useful lives and amortization method is as follows: Useful Life in Amount Years Amortization Method Customer List $ 102,422 5 Straight Line Total $ 102,422 |
Schedule of Pro Forma Financial Information | Pro forma financial information is presented for informational purposes and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place as of the beginning of 2017. Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Revenues $ 1,935,454 $ 2,419,175 Net income (loss) (99,487 ) 21,696 Net income per share: Basic (0.00 ) (0.00 ) Diluted (0.00 ) (0.00 ) |
Stock Options Awards and Gran32
Stock Options Awards and Grants (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | A summary of the stock option activity and related information for the 2016 Incentive Stock Option Plan from December 31, 2015 to March 31, 2018 is as follows: Shares Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2015 - Grants 1,000,000 $ 0.01 5.00 $ 387,450 Exercised - Canceled - Outstanding at December 31, 2016 1,000,000 $ 0.01 3.19 $ 387,450 Grants 150,000 1.83 4.35 $ 165,477 Exercised (100,000 ) 0.01 - (38,475 ) Canceled - Outstanding at December 31, 2017 1,050,000 $ 0.27 3.35 514,182 Grants - Exercised - Canceled - Outstanding at March 31, 2018 1,050,000 $ 0.27 3.11 $ 514,182 Exercisable at March 31, 2018 - $ - - $ - |
Schedule of Stock Option Outstanding | The following table presents information related to stock options at March 31, 2018: Options Outstanding Options Exercisable Weighted Average Exercisable Exercise Number of Remaining Life Number of Price Options In Years Options $ 0.27 1,050,000 3.11 - |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segments Information | The following represents selected information for the Company’s reportable segments for the three months ended March 31, 2018 and 2017. March 31, 2018 December 31, 2017 Assets by Segment Renewable Systems Integration $ 1,615,235 $ 27,589 Non-renewable Systems Integration 2,122,489 1,457,607 $ 3,737,724 $ 1,485,196 For the Three Months Ended: Revenue by Segment March 31, 2018 March 31, 2017 Renewable Systems Integration $ 31,789 $ 16,090 Non-renewable Systems Integration 1,694,535 1,850,755 $ 1,726,324 $ 1,866,845 Cost of Sales by Segment Renewable Systems Integration $ 31,617 $ 16,163 Non-renewable Systems Integration 1,209,413 1,413,562 $ 1,241,030 $ 1,429,725 Operating Expenses Renewable Systems Integration $ 161,692 $ 46,435 Non-renewable Systems Integration 412,992 446,809 574,684 $ 493,244 Operating (Loss) Income by Segment Renewable Systems Integration (103,083 ) $ (46,105 ) Non-renewable Systems Integration (7,886 ) (10,019 ) $ (110,969 ) $ (56,124 ) |
Organization and Line of Busi34
Organization and Line of Business (Details Narrative) - USD ($) | Feb. 01, 2018 | Mar. 31, 2018 |
Stock issued for acquisition, fair value | $ 1,186,707 | |
Common Stock [Member] | ||
Stock issued for acquisition, fair value | $ 1,177,779 | |
PVBJ Inc [Member] | Common Stock [Member] | ||
Stock issued for acquisition, shares | 444,445 | |
Stock issued for acquisition, fair value | $ 1,177,779 | |
Acquisition earn out liability | $ 221,800 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Allowance for doubtful accounts | |||
Total identifiable assets percentage | 37.00% | ||
Goodwill | $ 1,373,621 | ||
Advertising expense | 1,172 | 1,622 | |
Cash equivalents | |||
FDIC insured limit amount | $ 250,000 | $ 250,000 | |
Minimum [Member] | |||
Amortized finite estmated useful lives | 3 years | ||
Maximum [Member] | |||
Amortized finite estmated useful lives | 15 years |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Schedule of Reconciliation the Contingent Earn-out Obligations (Details) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Accounting Policies [Abstract] | |
Fair value with unobservable inputs reconciliation, beginning balance | |
Fair value with unobservable inputs reconciliation, earn-out liability from acquisition of PVBJ Inc | 172,171 |
Fair value with unobservable inputs reconciliation, payments | |
Fair value with unobservable inputs reconciliation, adjustments to fair value | |
Fair value with unobservable inputs reconciliation, ending balance | $ 172,171 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Schedule of Potential Antidilutive Computation of Basic and Diluted Net Loss Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Totals | 1,050,000 | 1,000,000 |
Options to Purchase Common Stock [Member] | ||
Totals | 1,050,000 | 1,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | Jan. 02, 2018USD ($)$ / shares | Feb. 04, 2016shares | Apr. 30, 2017shares | Mar. 31, 2018USD ($)ft²$ / sharesshares | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($)shares | Dec. 31, 2016shares |
Number of options exercised | shares | 100,000 | ||||||
Revenue from related party | $ 31,789 | $ 16,090 | |||||
Related party costs | 31,617 | 15,905 | |||||
Due to related party | 15,000 | $ 31,257 | |||||
Management expenses | $ 19,500 | $ 45,826 | |||||
Convertible debentures interest rate, percentage | 12.00% | 12.00% | |||||
Convertible debt convertible into common shares conversion price per share | $ / shares | $ 0.75 | ||||||
Beneficial ownership, percentage | 4.99% | ||||||
Discount on debt | $ 2,214 | ||||||
Convertible Notes Payable [Member] | |||||||
Convertible debt convertible into common shares conversion price per share | $ / shares | $ 0.75 | ||||||
Discount on debt | $ 395,000 | $ 395,000 | |||||
Rezaul Karim [Member] | |||||||
Number of options exercised | shares | 100,000 | ||||||
Rezaul Karim [Member] | April 2018 [Member] | |||||||
Number of options exercised | shares | 100,000 | ||||||
Two Directors [Member] | Securities Purchase Agreement [Member] | |||||||
Convertible debentures, principal amount | $ 400,000 | ||||||
Convertible debentures interest rate, percentage | 12.00% | ||||||
Convertible debt convertible into common shares conversion price per share | $ / shares | $ 0.75 | ||||||
Debt maturity, description | The Debentures, together with any accrued and unpaid interest, become due and payable on January 2, 2020 | ||||||
Executive Officers [Member] | |||||||
Area of office | ft² | 800 | ||||||
Reza Enterprises, Inc [Member] | |||||||
Number of common shares sold | shares | 526,316 |
Significant Concentrations of39
Significant Concentrations of Credit Risk (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
FDIC insured limit amount | $ 250,000 | $ 250,000 | |
One Customers [Member] | |||
Concentrations of credit risk percentage | 10.00% | 10.00% | |
Accounts Receivable [Member] | One Customers [Member] | |||
Concentrations of credit risk percentage | 25.00% | ||
Accounts Receivable [Member] | Three Unrelated Customers [Member] | |||
Concentrations of credit risk percentage | 36.00% | ||
FDIC, Australian Securities and Investments Commission [Member] | |||
FDIC insured limit amount | $ 186,000 | ||
Balance exceeded insured limit amount | 405,978 | ||
Maximum [Member] | United States and Australia [Member] | |||
FDIC insured limit amount | 250,000 | ||
Balance exceeded insured limit amount | $ 341,978 |
Major Customers (Details Narrat
Major Customers (Details Narrative) - One Customers [Member] | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Concentrations of credit risk percentage | 10.00% | 10.00% |
Revenue [Member] | ||
Concentrations of credit risk percentage | 30.00% | 49.00% |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 27,574 | $ 7,434 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Property and Equipment, Gross | $ 988,606 | $ 428,189 |
Less: accumulated depreciation | 579,230 | 325,616 |
Property and Equipment, Net | 409,376 | 102,573 |
Furniture and Fixtures [Member] | ||
Property and Equipment, Gross | $ 13,204 | 6,857 |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Property and equipment, estimate useful life | 5 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Property and equipment, estimate useful life | 7 years | |
Machinery and Equipment [Member] | ||
Property and Equipment, Gross | $ 35,305 | 35,919 |
Machinery and Equipment [Member] | Minimum [Member] | ||
Property and equipment, estimate useful life | 5 years | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Property and equipment, estimate useful life | 7 years | |
Computer and Software [Member] | ||
Property and Equipment, Gross | $ 93,141 | 94,761 |
Computer and Software [Member] | Minimum [Member] | ||
Property and equipment, estimate useful life | 3 years | |
Computer and Software [Member] | Maximum [Member] | ||
Property and equipment, estimate useful life | 5 years | |
Auto and Truck [Member] | ||
Property and Equipment, Gross | $ 807,042 | 250,044 |
Auto and Truck [Member] | Minimum [Member] | ||
Property and equipment, estimate useful life | 5 years | |
Auto and Truck [Member] | Maximum [Member] | ||
Property and equipment, estimate useful life | 7 years | |
Leasehold Improvements [Member] | ||
Property and Equipment, Gross | $ 39,914 | $ 40,608 |
Property and equipment estimate useful life, description | life of lease |
Uncompleted Contracts - Summary
Uncompleted Contracts - Summary of Cost, Estimated Earnings and Billings on Uncompleted Contracts (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Contractors [Abstract] | ||
Costs incurred on uncompleted contracts | $ 2,677,262 | $ 2,485,787 |
Estimated earnings | 483,142 | 779,598 |
Costs and estimated earnings earned on uncompleted contracts | 3,160,404 | 3,265,385 |
Billings to date | 3,882,030 | 3,553,817 |
Costs and estimated earnings in excess of billings on uncompleted contracts | (721,626) | (288,432) |
Costs and earnings in excess of billings on completed contracts | (686,064) | (252,757) |
Costs in excess of billings | 67,982 | 51,531 |
Billings in excess of cost | (100,544) | (87,206) |
Billings on Uncompleted Contracts total | $ (32,562) | $ (35,675) |
Commitments (Details Narrative)
Commitments (Details Narrative) | 3 Months Ended | |
Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | |
Lease expiration date | Apr. 30, 2018 | |
Rent expense | $ 23,000 | $ 23,000 |
Capital leases of net book value | 165,609 | |
Interest expense on capital lease | 1,300 | |
Minimum [Member] | ||
Operating lease obligation payable | $ 615 | |
Operating lease interest rate | 0.0557 | |
Maximum [Member] | ||
Operating lease obligation payable | $ 2,630 | |
Operating lease interest rate | 0.0720 | |
Capital Lease Obligations [Member] | ||
Lease expiration date | Jun. 30, 2023 |
Commitments - Schedule of Futur
Commitments - Schedule of Future Minimum Payments on Leases (Details) | Mar. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 66,630 |
2,019 | 21,600 |
Total | $ 88,230 |
Commitments - Schedule of Payme
Commitments - Schedule of Payments on Capital Lease Obligation (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
2,018 | $ 58,655 | |
2,019 | 78,207 | |
2,020 | 78,207 | |
2,021 | 44,680 | |
2,022 | 7,510 | |
Thereafter | 4,380 | |
Capital lease obligation | 271,639 | |
Less amounts representing interest | 23,910 | |
Current portion | 49,856 | |
Net | $ 197,873 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | Jan. 02, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Convertible debt interest percentage | 12.00% | 12.00% | ||
Debt maturity date | Jan. 31, 2020 | Jan. 31, 2020 | ||
Stock conversion price | $ 0.75 | |||
Discount on debt | $ 2,214 | |||
Legal fees | 5,000 | |||
Interest expense | 14,215 | |||
Convertible Notes Payable [Member] | ||||
Stock conversion price | $ 0.75 | |||
Discount on debt | $ 395,000 | $ 395,000 | ||
Convertible Notes Payable [Member] | Minimum [Member] | ||||
Ownership percentage | 4.99% | |||
Convertible Notes Payable [Member] | Two Related Parties [Member] | ||||
Convertible debt interest percentage | 12.00% | |||
Convertible debt amount | $ 400,000 | |||
Debt maturity date | Jan. 2, 2020 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt Payable (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Total non-current portion | $ 121,476 | |
Total current portion | 23,823 | |
Total | 145,299 | |
Notes Payable One [Member] | ||
Total non-current portion | 17,382 | |
Notes Payable Two [Member] | ||
Total non-current portion | 53,284 | |
Notes Payable Three [Member] | ||
Total non-current portion | $ 50,810 |
Debt - Schedule of Long-term 49
Debt - Schedule of Long-term Debt Payable (Details) (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Interest rate | 12.00% | 12.00% |
Maturity date | Jan. 31, 2020 | Jan. 31, 2020 |
Notes Payable One [Member] | ||
Monthly payment of debt | $ 716 | $ 716 |
Interest rate | 6.50% | 6.50% |
Maturity date | Apr. 30, 2021 | Apr. 30, 2021 |
Notes Payable Two [Member] | ||
Monthly payment of debt | $ 984 | $ 984 |
Interest rate | 14.70% | 14.70% |
Maturity date | Mar. 31, 2023 | Mar. 31, 2023 |
Notes Payable Three [Member] | ||
Monthly payment of debt | $ 947 | $ 947 |
Interest rate | 6.14% | 6.14% |
Maturity date | Aug. 31, 2024 | Aug. 31, 2024 |
Debt - Schedule of Annual Princ
Debt - Schedule of Annual Principal Payments (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
2018 (remaining) | $ 23,823 | |
2,019 | 27,695 | |
2,020 | 28,727 | |
2,021 | 23,872 | |
2,022 | 21,734 | |
Thereafter | 19,448 | |
Total | $ 145,299 |
Debt - Schedule of Convertible
Debt - Schedule of Convertible Notes Payable (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Convertible notes payable | $ 2,214 |
Debt - Schedule of Convertibl52
Debt - Schedule of Convertible Notes Payable (Details) (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | ||
Note payable | $ 395,000 | $ 395,000 |
Less debt discount | $ 392,786 | $ 392,786 |
Interest rate | 12.00% | 12.00% |
Maturity date | Jan. 31, 2020 | Jan. 31, 2020 |
Contract Backlog (Details Narra
Contract Backlog (Details Narrative) - USD ($) | Mar. 31, 2018 | Mar. 31, 2017 |
Contract Backlog | ||
Contract backlog | $ 662,000 | $ 1,661,000 |
Direct costs | $ 483,142 | $ 1,270,000 |
Acquisition Under Common Cont54
Acquisition Under Common Control (Details Narrative) | Jan. 31, 2017shares |
Exchange Agreement [Member] | |
Stock issued for acquisition, shares | 3,800,000 |
Business Acquisition (Details N
Business Acquisition (Details Narrative) | Feb. 01, 2018USD ($)$ / sharesshares | Mar. 31, 2018USD ($)$ / shares | Mar. 31, 2018USD ($)$ / shares | Mar. 31, 2017USD ($) | Dec. 31, 2017$ / shares |
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Stock issued for acquisition, fair value | $ 1,186,707 | ||||
Annual earnings before taxes percentage | 0.50 | ||||
Net loss | $ 81,570 | $ (110,969) | $ (56,124) | ||
Value of intangible asset amortization value | 3,414 | ||||
Acquisition related cost | $ 15,000 | ||||
Paul V. Benis [Member | |||||
Salary payable | $ 150,000 | ||||
Common Stock [Member] | |||||
Stock issued for acquisition, fair value | $ 1,177,779 | ||||
PVBJ Inc [Member] | Common Stock [Member] | |||||
Cash acquired from acquisition | $ 221,800 | ||||
Stock issued for acquisition, shares | shares | 444,445 | ||||
Common stock, par value | $ / shares | $ 0.0001 | ||||
Stock issued for acquisition, fair value | $ 1,177,779 |
Business Acquisition - Schedule
Business Acquisition - Schedule of Estimated Consideration Transferred in Acquisition (Details) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Business Combinations [Abstract] | |
Upfront consideration | $ 1,177,779 |
Liabilities assumed | 878,565 |
Total | $ 2,056,343 |
Business Acquisition - Schedu57
Business Acquisition - Schedule of Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 |
Business Combinations [Abstract] | |||
Cash and cash equivalents | $ 30,408 | ||
Accounts receivable | 277,338 | ||
Property and equipment, net | 272,554 | ||
Customer list | 102,422 | ||
Goodwill | 1,373,621 | ||
Total assets acquired | 2,056,344 | ||
Accounts payable | (112,590) | ||
Debt assumed | (590,657) | ||
Earn out liability | (175,318) | ||
Total liabilities assumed | (878,565) | ||
Total net assets acquired | $ 1,177,779 |
Business Acquisition - Schedu58
Business Acquisition - Schedule of Intangible Assets Acquired, Preliminary Estimated Useful Lives and Amortization (Details) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Total | $ 102,422 |
Customer List [Member] | |
Total | $ 102,422 |
Years | 5 years |
Amortization Method | Straight Line |
Business Acquisition - Schedu59
Business Acquisition - Schedule of Pro Forma Financial Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Business Combinations [Abstract] | ||
Revenues | $ 1,935,454 | $ 2,419,175 |
Net income (loss) | $ (99,487) | $ 21,696 |
Net income per share: Basic | $ 0 | $ 0 |
Net income per share: Diluted | $ 0 | $ 0 |
Stock Options Awards and Gran60
Stock Options Awards and Grants (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2017 | |
Market stock price | $ 0.473 | |||
Exercise price | $ 1.83 | $ 0.01 | ||
Unrecognized compensation expense | $ 93,218 | |||
Common Stock [Member] | ||||
Exercise price | $ 2 | |||
Closing sales price | $ 1.50 |
Stock Options Awards and Gran61
Stock Options Awards and Grants - Schedule of Stock Option Activity (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Number of Shares Outstanding at beginning | 1,050,000 | 1,000,000 | |
Number of Shares, Grants | 150,000 | 1,000,000 | |
Number of Shares, Exercised | (100,000) | ||
Number of Shares, Cancelled | |||
Number of Shares, Outstanding at end | 1,050,000 | 1,050,000 | 1,000,000 |
Number of Shares, Exercisable at end | |||
Weighted-Average Exercise Price, Outstanding at beginning | $ 0.27 | $ 0.01 | |
Weighted-Average Exercise Price, Grants | 1.83 | 0.01 | |
Weighted-Average Exercise Price, Exercised | 0.01 | ||
Weighted-Average Exercise Price, Outstanding at end | 0.27 | $ 0.27 | $ 0.01 |
Weighted-Average Exercise Price, Exercisable at end | |||
Weighted-Average Remaining Contractual Term Outstanding at beginning | 3 years 4 months 6 days | 3 years 2 months 8 days | 0 years |
Weighted-Average Remaining Contractual Term Grants | 4 years 4 months 6 days | 5 years | |
Weighted-Average Remaining Contractual Term Outstanding at end | 3 years 1 month 9 days | 3 years 4 months 6 days | 3 years 2 months 8 days |
Weighted-Average Remaining Contractual Term Exercisable at end | 0 years | ||
Aggregate Intrinsic Value Outstanding at beginning | $ 514,182 | $ 387,450 | |
Aggregate Intrinsic Value Grants | $ 165,477 | $ 387,450 | |
Aggregate Intrinsic Value Exercised | $ (38,475) | ||
Aggregate Intrinsic Value Outstanding at end | 514,182 | $ 514,182 | $ 387,450 |
Aggregate Intrinsic Value Exercisable at end |
Stock Options Awards and Gran62
Stock Options Awards and Grants - Schedule of Stock Option Outstanding (Details) - Exercise Price $0.27 [Member] | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number of Options Exercise Price | $ / shares | $ 0.27 |
Number of Options, Outstanding | 1,050,000 |
Weighted Average Remaining Life | 3 years 1 month 9 days |
Exercisable Number of Options |
Segment Information (Details Na
Segment Information (Details Narrative) | 3 Months Ended |
Mar. 31, 2018Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of Reportable Segments Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Assets by Segment | $ 3,737,724 | $ 1,485,196 | |
Revenue by Segment | 1,726,324 | $ 1,866,845 | |
Cost of Sales by Segment | 1,241,030 | 1,429,725 | |
Operating expenses | 574,684 | 493,244 | |
Operating (Loss) Income by Segment | (89,390) | (56,124) | |
Renewable Systems Integration [Member] | |||
Assets by Segment | 1,615,235 | 27,589 | |
Revenue by Segment | 31,789 | 16,090 | |
Cost of Sales by Segment | 31,617 | 16,163 | |
Operating expenses | 161,692 | 46,435 | |
Operating (Loss) Income by Segment | (103,083) | (46,105) | |
Non-renewable Systems Integration [Member] | |||
Assets by Segment | 2,122,489 | $ 1,457,607 | |
Revenue by Segment | 1,694,535 | 1,850,755 | |
Cost of Sales by Segment | 1,209,413 | 1,413,562 | |
Operating expenses | 412,992 | 446,809 | |
Operating (Loss) Income by Segment | $ (7,886) | $ (10,019) |
401 (k) Plans (Details Narrativ
401 (k) Plans (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Retirement Benefits [Abstract] | ||
Employee compensation plan expense | $ 5,156 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - shares | Apr. 02, 2018 | Apr. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Stock options exercise acquired | 100,000 | |||
Rezaul Karim [Member] | ||||
Stock options exercise acquired | 100,000 | |||
Subsequent Event [Member] | Rezaul Karim [Member] | ||||
Stock options exercise acquired | 100,000 |