Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Apr. 02, 2018 | Jun. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | GEX MANAGEMENT, INC. | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Entity Central Index Key | 1,681,556 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 11,797,231 | ||
Entity Public Float | $ 14,595,868 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and Cash Equivalents | $ 410,096 | $ 307,395 |
Accounts Receivable, net | 91,532 | 100,820 |
Accounts Receivable – Related Party | 30,771 | 23,500 |
Other Current Assets and Prepaid | 88,749 | 959 |
Total Current Assets | 621,148 | 432,674 |
Property and Equipment, net | 2,463,377 | 1,106 |
Other Assets | 4,471 | 0 |
Total Assets | 3,088,996 | 433,780 |
Current Liabilities: | ||
Accounts Payable | 48,280 | 3,832 |
Accrued Expenses | 20,514 | 60,615 |
Accrued Expenses – Related Party | 0 | 45,000 |
Accrued Interest Payable | 7,433 | 21,952 |
Notes Payable - Current Portion | 56,649 | 0 |
Total Current Liabilities | 132,876 | 131,399 |
Non-Current Liabilities | ||
Notes Payable | 1,254,271 | 0 |
Lines of Credit - Related Party | 352,100 | 363,187 |
Total Long-Term Liabilities | 1,606,371 | 363,187 |
Total Liabilities | 1,739,247 | 494,586 |
SHAREHOLDERS’ (DEFICIT) | ||
Preferred Stock, $0.001 par value, 20,000,000 shares authorized, 0 shares issued and outstanding | 0 | 0 |
Common Stock, $0.001 par value, 200,000,000 shares authorized, and 11,797,231 and 10,988,036 shares issued and outstanding | 11,797 | 10,988 |
Additional Paid In Capital | 2,651,178 | 374,397 |
Retained Deficit | (1,313,226) | (446,191) |
Total Shareholders' Equity (Deficit) | 1,349,749 | (60,806) |
Total Liabilities and Shareholders' Equity (Deficit) | $ 3,088,996 | $ 433,780 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock shares par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 20,000,000 | 20,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Common stock shares par value | $ .001 | $ 0.001 |
Common stock shares authorized | 200,000,000 | 200,000,000 |
Common stock shares issued | 11,797,231 | 10,988,036 |
Common stock shares outstanding | 11,797,231 | 10,988,036 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||
Revenues | $ 8,303,088 | $ 202,336 |
Revenues – Related Party | 104,000 | 305,885 |
Total Revenues | 8,407,088 | 508,221 |
Cost of Revenues | 8,261,921 | 385,226 |
Gross Profit (Loss) | 145,167 | 122,995 |
Operating Expenses | ||
Depreciation and Amortization | 58,002 | 577 |
Selling and Advertising | 139,938 | 36,226 |
General and Administrative | 973,095 | 345,294 |
Total Operating Expenses | 1,171,035 | 382,097 |
Total Operating Loss | (1,025,868) | (259,102) |
Other Income (Expense) | ||
Gain on Extinguishment of Debt | (172,872) | 0 |
Interest Income | 0 | 72 |
Interest Expense | (14,039) | (39,809) |
Total Other Income (Expense) | 158,833 | (39,737) |
Net Loss Before Income Taxes | (867,035) | (298,839) |
Provision for Income Taxes | 0 | 0 |
Net Loss | $ (867,035) | $ (298,839) |
Income per common share: | ||
Net loss per common share - basic | $ (0.08) | $ (0.03) |
Net loss per common share - diluted | $ (0.08) | $ (0.03) |
Weighted Average Shares: | ||
Weighted Average Shares: Basic | 11,362,120 | 10,687,015 |
Weighted Average Shares: Diluted | 11,362,120 | 10,687,015 |
Statement of Changes in Shareho
Statement of Changes in Shareholders’ Equity (Deficit) - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Deficit | Total |
Beginning Balance, Shares at Dec. 31, 2015 | 0 | 10,666,669 | |||
Beginning Balance, Amount at Dec. 31, 2015 | $ 0 | $ 10,667 | $ 13,195 | $ (147,352) | $ (123,490) |
Issuance of Common Shares for Cash, Shares | 321,367 | ||||
Issuance of Common Shares for Cash, Amount | $ 321 | 361,202 | 361,523 | ||
Issuance of Common Shares for Services, Amount | 0 | ||||
Issuance of Common Shares for Expenses, Amount | 0 | ||||
Net Loss | (298,839) | (298,839) | |||
Ending Balance, Shares at Dec. 31, 2016 | 0 | 10,988,036 | |||
Ending Balance, Amount at Dec. 31, 2016 | $ 0 | $ 10,988 | 374,397 | (446,191) | (60,806) |
Issuance of Common Shares for Cash, Shares | 366,684 | ||||
Issuance of Common Shares for Cash, Amount | $ 367 | 826,721 | 827,088 | ||
Issuance of Common Shares for Services, Shares | 47,780 | ||||
Issuance of Common Shares for Services, Amount | $ 48 | 74,702 | 74,750 | ||
Issuance of Common Shares for Assets, Shares | 200,000 | ||||
Issuance of Common Shares for Assets, Amount | $ 200 | 1,149,800 | 1,150,000 | ||
Issuance of Common Shares for Expenses, Shares | 1,067 | ||||
Issuance of Common Shares for Expenses, Amount | $ 1 | 7,879 | 7,880 | ||
Issuance of Common Shares for Debt and Interest, Shares | 153,664 | ||||
Issuance of Common Shares for Debt and Interest, Amount | $ 153 | 172,719 | 172,872 | ||
Issuance of Common Shares for Accrued Liabilities, Shares | 40,000 | ||||
Issuance of Common Shares for Accrued Liabilities, Amount | $ 40 | 44,960 | 45,000 | ||
Net Loss | (867,035) | (867,035) | |||
Ending Balance, Shares at Dec. 31, 2017 | 0 | 11,797,231 | |||
Ending Balance, Amount at Dec. 31, 2017 | $ 0 | $ 11,797 | $ 2,651,178 | $ (1,313,226) | $ 1,349,749 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flow - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Activities: | ||
Net Loss | $ (867,035) | $ (298,839) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation and Amortization | 58,002 | 577 |
Common Stock Issued for Services | 74,750 | 0 |
Common Stock Issued for Expenses | 7,880 | 0 |
Write Off Balance of Contract Paid with Shares | 11,343 | 0 |
Gain on Extinguishment of Debt | (172,872) | 0 |
Bad Debt Expense | 0 | 29,918 |
Change in Assets and Liabilities: | ||
Accounts Receivable | 9,288 | (56,954) |
Accounts Receivable - Related Party | (7,271) | (21,471) |
Other Current Assets | (118,373) | (959) |
Notes Receivable - Related Party | 0 | 15,500 |
Other Assets | (4,471) | 0 |
Accounts Payable | 44,448 | 2,291 |
Accounts Payable - Related Party | 0 | (137) |
Accrued Expenses | (40,101) | 30,674 |
Accrued Expenses - Related Party | 0 | 45,000 |
Accrued Interest Payable | 14,038 | 17,548 |
Net Cash Used by Operating Activities | (990,374) | (236,852) |
Investing Activities: | ||
Purchase of Contracts | (37,500) | 0 |
Purchase of Fixed Assets | (2,613) | 0 |
Net Cash Used in Investing Activities | (40,113) | 0 |
Financing Activities: | ||
Proceeds from Sale of Common Stock | 827,088 | 361,523 |
Proceeds from Line of Credit - Related Party | 756,100 | 268,527 |
Payments on Line of Credit - Related Party | (450,000) | (13,196) |
Payments on Working Capital Loan | 0 | (75,444) |
Net Cash Provided by Financing Activities | 1,133,188 | 541,410 |
Net increase in cash and cash equivalents | 102,095 | 304,558 |
Cash and cash equivalents at beginning of year | 307,395 | 2,837 |
Cash and cash equivalents at end of year | 410,096 | 307,395 |
Supplemental Disclosures: | ||
Income Taxes Paid | 0 | 0 |
Interest Paid | 14,039 | 22,261 |
Non-Cash Investing and Financing Activities: | ||
Common Shares Issued for Debt and Interest | 172,872 | |
Common Shares Issued for Building | 1,150,000 | 0 |
Common Shares Issued for Accrued Expenses – Related Party | 45,000 | 0 |
Debt Assumed as Part of Real Estate Purchase | $ 1,310,920 | $ 0 |
1. DESCRIPTION OF BUSINESS AND
1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Description Of Business And Significant Accounting Policies | |
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | Organization and Description of Business GEX Management, Inc. (“GEX”, the “Company”, “we”, “our”, “us”) is a professional services company that was originally formed in 2004 as Group Excellence Management, LLC d/b/a MyEasyHQ. The Company converted from a limited liability company to a C corporation in March of 2016, and changed its name to GEX Management, Inc. in April of 2016. On January 25, 2017, GEX obtained its license to operate as a Professional Employer Organization (“PEO”), and we began offering PEO services in April 2017. The Company formed GEX Staffing, LLC (“GEX Staffing”) in March 2017. The initial funding and first transactions occurred in GEX Staffing in September 2017. The consolidated financials include the accounts of GEX Staffing, LLC. Staffing and PEO services make up a majority of our revenue. On December 29, 2017 GEX purchased 100% of the membership interest in AMAST Consulting, LLC (“AMAST”), which owned a multi-use office building in Lowell, Arkansas, which had an occupancy rate of 100% at the time of the acquisition. The terms of the Agreement to purchase AMAST include the fulfillment of the lease obligations of the current tenants, as well as the assumption of the debt that is collateralized by the building and associated property. The consolidated financials include the asset and debt of AMAST. Basis of Presentation Our financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”), as well as the applicable regulations and rules of the Securities and Exchange Commission. This requires management to make estimates and assumptions that affect the amounts reported in the financial statements and their accompanying notes. The actual results could differ from those estimates. Principles of Consolidation The consolidated financial statements include the accounts of GEX Management, Inc. and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. There have been no significant changes to our accounting policies that have a material impact on our financial statements and accompanying notes. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Revenue Recognition PEO Services Professional Employment Organization (“PEO”) service revenues represent the fees charged to clients for administering payroll and payroll tax transactions for our clients’ Co-Employed Employees (“CEEs”), access to our HR and benefits administration services, consulting related to employment and benefit law compliance and general employment consulting related fees. PEO service revenues are recognized in the period the PEO services are performed as stipulated in the Client Service Agreement (“CSA”), where these fees are fixed or determinable, when the PEO client is invoiced and collectability is reasonably assured. GEX is not considered the primary obligor with respect to CEE’s payroll and payroll tax payments and therefore, these payments are not reflected as either revenue or expense in our statements of operations. PEO-related revenues also include revenues generated from insurance administration for our PEO clients. These insurance-related revenues include insurance-related billings, as well as administrative fees that GEX collects from PEO clients and withholds from CEEs for health benefit insurance plans provided by third-party insurance carriers. Insurance-related revenues are recognized over the period the insurance coverage is provided and where collectability is reasonably assured. Staffing Services and Professional Services Staffing services revenue is derived from supplying temporary staff to clients. Temporary staff generally consists of temporary workers working under a contract for a fixed period of time, or on a specific client project. The temporary staff includes both GEX employees and third-parties contracted by GEX. Temporary staff are provided to clients through a Staffing Service Agreement (‘SSA’) involving a specified service that the temporary staff will provide to the client. When GEX is the principal or primary obligor for the temporary staff, GEX records the gross amount of the revenue and expense from the SSA. GEX is generally the primary obligor when GEX is responsible for the fulfillment of services under the SSA, even if the temporary staff are not employees of GEX. This typically occurs when GEX contracts third-parties to fulfill all or part of the SSA with the client, but GEX remains the holder of the credit risk associated with the SSA, and GEX has total discretion in establishing the pricing under the SSA. All other Professional Services revenues are recognized in the period the services are performed as stipulated in the client’s Outsourcing Agreement, when the client is invoiced, and collectability is reasonably assured. Revenue recognition for arrangements with multiple deliverables constituting a single unit of accounting is recognized generally over the greater of the term of the arrangement or the expected period of performance. Income Taxes The Company has adopted ASC 740-10, which requires the use of the liability method in the computation of income tax expense and the current and deferred income taxes payable. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. Fair Value Measurements ASC Topic 820, defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair value of financial instruments is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the Company’s credit worthiness, among other things, as well as unobservable parameters. Cash, accounts receivable, accounts payable and other accrued expenses and other current assets and liabilities are carried at amounts which reasonably approximate their fair values because of the relatively short maturity of those instruments. Earnings Per Share Earnings per share are calculated in accordance with ASC 260 “ Earnings per Share Earnings per share information has been retroactively adjusted to reflect the stock split and the incremental par value of the newly issued shares were recorded with the offset to additional paid-in capital. Diluted earnings per share are computed using the weighted average number of shares and potentially dilutive common shares outstanding. The Company has no potentially dilutive common shares. Cash and Cash Equivalents Cash and cash equivalents include cash in banks and short-term investments with original maturities of three months or less. The Company maintains deposits in multiple financial institutions which provide Federal Deposit Insurance Corporation (“FDIC”) coverage for interest bearing and non-interest bearing transaction accounts of up to $250,000. GEX has multiple accounts at these financial institutions. The FDIC coverage of up to $250,000 applies to the Company’s accounts as a whole at each financial institution and not to each of the Company’s accounts individually. At December 31, 2017 and 2016, none of the Company’s cash was in excess of federally insured limits, as it was in multiple institutions with balances under the FDIC coverage limits. Accounts Receivable Accounts Receivable consists of accrued services and consulting receivables due from customers and are unsecured. The receivables are generally unsecured and such amounts are generally due within 30 to 45 days after the date of the invoice. Accounts Receivable is carried at their face amount, less an allowance for doubtful accounts. GEX’s policy is generally not to charge interest on receivables after the invoice becomes past due. A receivable is considered past due if payments have not been received within agreed upon invoice terms. Write offs are recorded at a time when a customer receivable is deemed uncollectible. The Company did not write of any accounts receivables in the years ended January 31, 2017 and 2016. Property and Equipment Property and Equipment, net is carried at the cost of purchase, acquisition or construction, and is depreciated over the estimated useful lives of the assets. Assets acquired in a business combination are stated at estimated fair value. Costs associated with repair and maintenance are expensed as they are incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related asset. Depreciation and amortization are provided using the straight-line methods over the estimated useful lives of the assets as follows: Useful Life Buildings 30 Years Office Furniture & Equipment 5 Years Impairment of Long-lived Assets The Company records an impairment of long-lived assets used in operations, other than goodwill, when events or circumstances indicate that the asset might be impaired and the estimated undiscounted cash flows to be generated by those assets over their remaining lives are less than the carrying amount of those items. The net carrying value of assets not recoverable is reduced to fair value, which is typically calculated using the discounted cash flow method. Recently Issued Accounting Pronouncements FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) FASB issued ASU No. 2016-02, Leases (Topic 842) in February 2016. ASU 2016-02 will require most lessees to recognize a majority of the company’s leases on the balance sheet, which will increase reported assets and liabilities. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018 including interim periods within such annual reporting periods with early adoption permitted. The Company has not early adopted this guidance and is currently evaluating the impact on the Company’s consolidated financial statements of adopting this guidance. The Company does not expect this guidance to have a material impact to the Company’s results of operations. FASB issued ASU No. 2017-04, Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment in January 2017. This amendment simplifies the manner in which an entity is required to test for goodwill impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The amendment simplifies this approach by having the entity (1) perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and (2) recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the understanding that the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendment is effective in fiscal years beginning after December 15, 2019. Early adoption is permitted for all entities for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect this guidance to have a material impact to the Company’s financial position or results of operations. |
2. FAIR VALUE MEASUREMENTS
2. FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements | |
FAIR VALUE MEASUREMENTS | ASC Topic 820 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair value of financial instruments is based upon quoted market prices where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the Company’s credit worthiness, among other things, as well as unobservable parameters. Cash, accounts receivable, accounts payable and other accrued expenses and other current assets and liabilities are carried at amounts which reasonably approximate their fair values because of the relatively short maturity of those instruments. Fair Value of Financial Instruments The ASC guidance for fair value measurements and disclosure establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 Inputs Level 2 Inputs Level 3 Inputs As of December 31, 2017 and 2016, the Company had no Level 3 inputs. |
3. INCOME TAXES
3. INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
INCOME TAXES | The Company has adopted ASC 740-10, “ Income Taxes” On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law including a one-time mandatory transition tax on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We are required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, remeasuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. The Company does not have any foreign earnings and therefore, we do not anticipate the impact of a transition tax. We have remeasured our U.S. deferred tax assets at a statutory income tax rate of 21%. Since the Tax Act was passed late in the fourth quarter of 2017, and ongoing guidance and accounting interpretation are expected over the next 12 months, we consider the accounting of any transition tax, deferred tax re-measurements, and other items to be incomplete due to the forthcoming guidance and our ongoing analysis of final year-end data and tax positions. We expect to complete our analysis within the measurement period in accordance with SAB 118, and no later than fiscal year end December 31, 2018. GEX Management, Inc. has incurred losses since 2014. Therefore, GEX has no federal tax liability. The net deferred tax asset generated by the loss carryforward has been fully reserved. The cumulative net operating loss carryforward is $1,313,226 and $377,121 at December 31, 2017 and 2016, respectively, all of which is available for carryforward for federal income tax purposes and will expire in fiscal years 2034 to 2037. At December 31, 2017 and December 31, 2016, the deferred tax asset consisted of the following: 2017 2016 Net Operating (Income) Loss $ 275,781 $ 128,221 Less: Valuation Allowance (275,781 ) (128,221 ) Deferred Tax Asset, net $ — $ — The change in the valuation allowance of $147,560 is due to the Company’s net loss of $867,035 during the year ended December 31, 2017 and a reduction in the maximum tax rate from 34% to 21% at December 31, 2017. The Company has no tax positions at December 31, 2017 and 2016 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company’s tax returns for the years ended December 31, 2017, 2016, and 2015 are open for examination under Federal statute of limitations. The Company had no accruals for interest and penalties since inception. |
4. SHAREHOLDERS_ EQUITY
4. SHAREHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2017 | |
SHAREHOLDERS’ (DEFICIT) | |
SHAREHOLDERS’ EQUITY | Transactions The Company filed Form S-1 with the Securities & Exchange Commission and it was declared effective on November 14, 2016 under which the Company sold 188,059 shares for $282,089 in the first quarter under this registration statement. The Company effected a 4 for 3 stock split in December 2017. All transaction have been adjusted to reflect this split. The Company issued 47,781 shares for services for a total of $74,750 during 2017. On May 15, 2017, GEX entered into a Conversion Agreement with two consultants that had a $45,000 balance with the Company. In accordance with the terms and conditions of the Conversion Agreement, GEX issued a total of 40,000 shares of the Company's common stock, at a cost basis of $1.125 per share. The two consultants were issued 20,000 shares each of the total 40,000 shares issued by the Company. On June 7, 2017, GEX entered into a Debt Conversion Agreement with the Company that purchased the Line of Credit Promissory Note from the Company’s Chief Executive Officer. Under the terms and conditions of the Debt Conversion Agreement GEX issued 153,664 shares of its common stock, for the extinguishment of $345,745 in debt and accrued interest owed by GEX under the Line of Credit as of the date of the Debt Conversion Agreement. The shares were valued at $1.125 per share. GEX recorded a gain on extinguishment of debt in the amount of $172,872. On June 20, 2017, GEX entered into a Stock Purchase Agreement (“SPA”) with a third-party investor. Under the terms and conditions of the SPA, GEX issued 19,003 shares of its common stock, for a total of $120,000. On June 20, 2017, GEX entered into an Advisory Agreement with a third-party advisory firm. Under the terms and conditions of the Advisory Agreement, GEX paid a non-refundable retainer in the amount of $24,750 through the issuance of 3,334 shares of the Company’s common stock. On July 20, 2017, GEX entered into a Stock Purchase Agreement with a third-party investor. Under the terms and conditions of the SPA, GEX issued 12,668 shares of its common stock restricted pursuant to Rule 144 of the Securities Act of 1933 for a total of $80,000. On September 20, 2017, GEX entered into Stock Purchase Agreements with two advisory board members. Under the terms and conditions of the SPA’s, GEX issued 6,564 shares of its common stock, for a total of $32,000. On October 18, 2017, GEX entered into a Stock Purchase Agreements with one advisory board member. Under the terms and conditions of the SPA, GEX issued 2,667 shares of its common stock restricted pursuant to Rule 144 of the Securities Act of 1933, as amended, for a total of $13,000. On October 31, 2017 GEX entered into a Lease Agreement for office space in Fayetteville, Arkansas for 1,067 shares of its common stock, restricted pursuant to Rule 144 of the Securities Act of 1933, as amended. On December 29, 2017 GEX entered into a SPA with a shareholder. Under the terms of the SPA, GEX issued 75,000 shares of its common stock for a total of $300,000. On December 29, 2017 the Company acquired a 12,223 square foot, multi-use office building in Lowell, Arkansas through the purchase of 100% of the member interest in AMAST Consulting, LLC for 200,000 shares of the Company’s common stock and assumption of the outstanding mortgage. General The Company is authorized to issue 200,000,000 common shares at a par value of $0.001 per share. These shares have full voting rights. On December 1, 2017, the Company effected a 4 for 3 stock split which resulted in the 8,661,632 shares outstanding being split to 11,522,231. At December 31, 2017 and 2016 there were 11,797,231 and 8,241,015 common shares outstanding, respectively. The Company is authorized to issue 20,000,000 preferred shares at a par value of $0.001 per share. These shares have full voting rights. At December 31, 2017 and December 31, 2016 there were no preferred shares outstanding. The preferred shares rank senior to the common shares of the Company in each case with respect to dividend distributions and distributions of assets upon the liquidation, dissolution or winding up of the Company whether voluntary or involuntary. |
5. ACCOUNTS RECEIVABLE
5. ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Receivable And Concentration Of Credit Risk Abstract | |
ACCOUNTS RECEIVABLE | The Company has the following accounts receivable, net as of December 31, 2017 and 2016: 2017 2016 Accounts receivable 91,532 100,820 Allowance - - Accounts receivable, net 91,532 100,820 Accounts receivables are considered past due if payments have not been received within agreed upon invoice terms. Write offs are recorded at a time when a customer receivable is deemed uncollectible. The Company had $0 and $29,918 bad debt write offs during the year ended December 31, 2017 and 2016, respectively. The allowance for doubtful accounts as of December 31, 2017 and 2016 was $0. |
6. PROPERTY & EQUIPMENT
6. PROPERTY & EQUIPMENT | 12 Months Ended |
Dec. 31, 2017 | |
Property Equipment | |
PROPERTY & EQUIPMENT | The Company has the following property and equipment as of December 31, 2017 and 2016: 2017 2016 Buildings $ 2,459,420 $ — Office Equipment 5,844 1,731 Total Fixed Assets $ 2,465,264 $ 1,731 Accumulated Depreciation (1,887 ) (625 ) Property and Equipment, net $ 2,463,377 $ 1,106 Depreciation expense for the years ended December 31, 2017 and 2016 was $1,262 and $577, respectively. |
7. OTHER CURRENT ASSETS
7. OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
Other Current Assets | |
OTHER CURRENT ASSETS | The Company has the following other current assets, net as of December 31, 2017 and 2016: 2017 2016 Prepaids $ 116,623 $ — Other Current Assets 2,709 Acquired Customer Contracts 37,500 Accumulated Amortization (68,083 ) — Net Other Current Assets $ 88,749 $ — Amortization expense for the years ended December 31, 2017 and 2016 was $56,740 and $0, respectively. Additionally, $11,343 of a prepaid contract was written off to consulting expense when the contract became worthless. |
8. LINES OF CREDIT - RELATED PA
8. LINES OF CREDIT - RELATED PARTY | 12 Months Ended |
Dec. 31, 2017 | |
Notes Payable [Abstract] | |
LINES OF CREDIT | As of December 31, 2017 and 2016, the Company’s Lines of Credit – Related Party were as follows: 2017 2016 Lines of Credit - Related Party, 6% interest rate, $1,000,000 Due March 31, 2019 - Cancelled on June 7, 2017 Upon Conversion $ - $ 317,187 Lines of Credit - Related Party, 6% interest rate, $1,500,000 Due March 31, 2019 352,100 46,000 Total $ 352,100 $ 363,187 The $1,000,000 Line of Credit was cancelled when it was repaid in June 2017. Two other lines of credit, totaling $1,500,000 were subsequently extended. See NOTE 12 for additional information regarding the Company’s Lines of Credit – Related Party. The Company recorded interest expense of $14,039 and $39,809 for the years ended December 31, 2017 and 2016 respectively. |
9. ACCOUNTS RECEIVABLE AND CONC
9. ACCOUNTS RECEIVABLE AND CONCENTRATION OF CREDIT RISK | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Receivable And Concentration Of Credit Risk | |
ACCOUNTS RECEIVABLE AND CONCENTRATION OF CREDIT RISK | For the years ended December 31, 2017 and 2016, three customers made up 86% and four customers made up 92% of the Company’s outstanding accounts receivable balance, of which 25% and 19% were related party receivables for the years ended December 31, 2017 and 2016, respectively. For the years ended December 31, 2017 and 2016 two customers accounted for 83% and four customers accounted for 80% of the Company’s net revenue, respectively of which 0% and 60% were related party revenues. Management believes the credit risk is minimal. |
10. NOTE PAYABLE
10. NOTE PAYABLE | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
10. NOTE PAYABLE | In December 2017, the Company purchased a 12,223 square foot, multi-use office building in Lowell, Arkansas and assumed the underlying first lien note which is secured by the property. Pursuant to the terms and conditions of the purchase of the property, the Company agreed to remove the guarantors of the loan within six months from the date of purchase. As of December 31, 2017, the note had a balance of $1,310,920, carries an interest rate of 4.5%, a monthly payment of $9,540 and has a maturity date of March 22, 2022 when the remaining balance will become due and payable. The following is a schedule of minimum principal payments required under the loan as of December 31, 2017: Period Ended December 31: Amount 2018 56,649 2019 59,252 2020 61,973 2021 64,821 2022 1,068,225 $ 1,310,920 The Company’s outstanding balance related to the note payable was $1,310,920 and $0 for the years ended December 31, 2017 and 2016, respectively. |
11. COMMITMENTS AND CONTINGENCI
11. COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies | |
COMMITMENTS AND CONTINGENCIES | In September 2016, the Company entered into a 38-month lease agreement starting October 2016 for its 2,920 square foot corporate office, for which the first two months’ rent was abated. The Company paid rent expense of $62,780 and $38,258 related to this lease for the years ended December 31, 2017 and 2016, respectively. The following are the minimum lease obligations under the lease: Year Amount 2018 64,362 2019 60,225 Total $ 124,587 |
12. RELATED PARTY TRANSACTIONS
12. RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Policy on Related Party Transactions The Company has a formal, written policy that includes procedures intended to ensure compliance with the related party provisions in common practice for public companies. For purposes of the policy, a “related party transaction” is a transaction in which the Company participates and in which a related party (including all of GEX’s directors and executive officers) has a direct or indirect material interest. Any transaction exceeding the 5% threshold, and any transaction involving consulting, financial advisory, legal or accounting services that could impair a director’s independence, must be approved by the Board of Directors. Any related party transaction in which an executive officer or a Director has a personal interest, must be approved by the Board of Directors, following appropriate disclosure of all material aspects of the transaction. Related Party Transactions Debt Agreements On March 1, 2015, the Company entered into a Revolving Line of Credit (“LOC”) with its CEO, Carl Dorvil. Mr. Dorvil agreed to loan the Company up to $1,000,000 at a rate of 6%. This LOC has a balance of $0 and $317,187 at December 31, 2017 and December 31, 2016, respectively. The outstanding balance of $318,187 and related accrued interest of $28,557 was converted into 115,248 shares of common stock in the year ended December 31, 2017 and the LOC was cancelled after the conversion. On March 1, 2015, the Company entered into a Loan Agreement with P413 Management, LLC (“P413”). P413 agreed to loan the Company up to $500,000 at a rate of 6%. On November 1, 2017, this line of credit was increased to $1,000,000. Additionally, P413 extended a $500,000 line of credit to GEX Staffing, Inc. under the same terms. GEX’s CEO, Carl Dorvil, is a majority member interest owner in P413. These lines of credit have a balance of $352,100 and $46,000 at December 31, 2017 and 2016, respectively. The LOCs are due and payable on March 31, 2019. Professional Service Agreements On March 1, 2015, the Company entered into an Outsourcing Agreement with P413 Management, LLC (“P413”) to provide back office services to P413. GEX’s CEO, Carl Dorvil, is a majority member interest owner in P413. The Company reported revenues under this Agreement of $0 and $ 38,513 for the years ended December 31, 2017 and 2016 respectively. On September 1, 2015 the Company entered into an Outsourcing Agreement with Vicar Capital Advisors, LLC (“Vicar”) to provide back office services to Vicar. GEX’s CEO, Carl Dorvil, is a majority member interest owner in Vicar. The Company reported revenues under this Agreement of $104,000 and $101,992 for the years ended December 31, 2017 and 2016 respectively. As of December 31, 2017 and 2016 Vicar had an outstanding balance owed to the Company of $30,771 and $23,500, respectively. On August 1, 2014 the Company entered into an Outsourcing Agreement with Renaissance Global Marketing, LLC (“Renaissance”) to provide back office services to Renaissance. GEX’s CEO, Carl Dorvil was formally a minority member interest owner in Renaissance. The Company reported revenues under this Agreement of $0 and $165,380 for the years ended December 31, 2017 and 2016. As of December 31, 2017 and 2016 Renaissance had an outstanding balance owed to the Company of $0 and $0, respectively. The Company entered into a Consulting Agreement with Capital Financial Consultants, Inc. for $45,000 for the year ended December 31, 2016. A GEX officer’s family member owns Capital Financial Consultants, Inc. As of December 31, 2017 and 2016 the balance payable under the two agreements to CFC was $0 and $45,000, respectively. Revenue The Company had revenue from related parties of $104,000 and $305,885 for the years ended December 31, 2017 and 2016, respectively. |
13. SUBSEQUENT EVENTS
13. SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | On March 9, 2018, the Board of Directors of the Company voted to amend its Bylaws to separate the positions of President and Chief Executive Officer and appointed Chelsea Christopherson as the Company’s President. Ms. Christopherson continues to serve as the Company’s Chief Operating Officer and on the Company’s Board. On March 6, 2018 the Company entered into an Agreement to sell $1,066,050 of the Company’s future revenue for $772,500 to provide liquidity for the Company’s expansion opportunities, and this Agreement is personally guaranteed by Carl Dorvil, the Company’s Chief Executive Officer and Chairman. |
1. DESCRIPTION OF BUSINESS AN20
1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Description Of Business And Significant Accounting Policies Policies | |
Organization and Description of Business | GEX Management, Inc. (“GEX”, the “Company”, “we”, “our”, “us”) is a professional services company that was originally formed in 2004 as Group Excellence Management, LLC d/b/a MyEasyHQ. The Company converted from a limited liability company to a C corporation in March of 2016, and changed its name to GEX Management, Inc. in April of 2016. On January 25, 2017, GEX obtained its license to operate as a Professional Employer Organization (“PEO”), and we began offering PEO services in April 2017. The Company formed GEX Staffing, LLC (“GEX Staffing”) in March 2017. The initial funding and first transactions occurred in GEX Staffing in September 2017. The consolidated financials include the accounts of GEX Staffing, LLC. Staffing and PEO services make up a majority of our revenue. On December 29, 2017 GEX purchased 100% of the membership interest in AMAST Consulting, LLC (“AMAST”), which owned a multi-use office building in Lowell, Arkansas, which had an occupancy rate of 100% at the time of the acquisition. The terms of the Agreement to purchase AMAST include the fulfillment of the lease obligations of the current tenants, as well as the assumption of the debt that is collateralized by the building and associated property. The consolidated financials include the asset and debt of AMAST. |
Basis of Presentation | Our financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”), as well as the applicable regulations and rules of the Securities and Exchange Commission. This requires management to make estimates and assumptions that affect the amounts reported in the financial statements and their accompanying notes. The actual results could differ from those estimates. |
Principles of Consolidation | The consolidated financial statements include the accounts of GEX Management, Inc. and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. There have been no significant changes to our accounting policies that have a material impact on our financial statements and accompanying notes. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. |
Revenue Recognition | PEO Services Professional Employment Organization (“PEO”) service revenues represent the fees charged to clients for administering payroll and payroll tax transactions for our clients’ Co-Employed Employees (“CEEs”), access to our HR and benefits administration services, consulting related to employment and benefit law compliance and general employment consulting related fees. PEO service revenues are recognized in the period the PEO services are performed as stipulated in the Client Service Agreement (“CSA”), where these fees are fixed or determinable, when the PEO client is invoiced and collectability is reasonably assured. GEX is not considered the primary obligor with respect to CEE’s payroll and payroll tax payments and therefore, these payments are not reflected as either revenue or expense in our statements of operations. PEO-related revenues also include revenues generated from insurance administration for our PEO clients. These insurance-related revenues include insurance-related billings, as well as administrative fees that GEX collects from PEO clients and withholds from CEEs for health benefit insurance plans provided by third-party insurance carriers. Insurance-related revenues are recognized over the period the insurance coverage is provided and where collectability is reasonably assured. Staffing Services and Professional Services Staffing services revenue is derived from supplying temporary staff to clients. Temporary staff generally consists of temporary workers working under a contract for a fixed period of time, or on a specific client project. The temporary staff includes both GEX employees and third-parties contracted by GEX. Temporary staff are provided to clients through a Staffing Service Agreement (‘SSA’) involving a specified service that the temporary staff will provide to the client. When GEX is the principal or primary obligor for the temporary staff, GEX records the gross amount of the revenue and expense from the SSA. GEX is generally the primary obligor when GEX is responsible for the fulfillment of services under the SSA, even if the temporary staff are not employees of GEX. This typically occurs when GEX contracts third-parties to fulfill all or part of the SSA with the client, but GEX remains the holder of the credit risk associated with the SSA, and GEX has total discretion in establishing the pricing under the SSA. All other Professional Services revenues are recognized in the period the services are performed as stipulated in the client’s Outsourcing Agreement, when the client is invoiced, and collectability is reasonably assured. Revenue recognition for arrangements with multiple deliverables constituting a single unit of accounting is recognized generally over the greater of the term of the arrangement or the expected period of performance. |
Income Taxes | The Company has adopted ASC 740-10, which requires the use of the liability method in the computation of income tax expense and the current and deferred income taxes payable. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. |
Fair Value Measurements | ASC Topic 820, defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair value of financial instruments is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the Company’s credit worthiness, among other things, as well as unobservable parameters. Cash, accounts receivable, accounts payable and other accrued expenses and other current assets and liabilities are carried at amounts which reasonably approximate their fair values because of the relatively short maturity of those instruments. |
Earnings Per Share | Earnings per share are calculated in accordance with ASC 260 “ Earnings per Share Earnings per share information has been retroactively adjusted to reflect the stock split and the incremental par value of the newly issued shares were recorded with the offset to additional paid-in capital. Diluted earnings per share are computed using the weighted average number of shares and potentially dilutive common shares outstanding. The Company has no potentially dilutive common shares. |
Cash and Cash Equivalents | Cash and cash equivalents include cash in banks and short-term investments with original maturities of three months or less. The Company maintains deposits in multiple financial institutions which provide Federal Deposit Insurance Corporation (“FDIC”) coverage for interest bearing and non-interest bearing transaction accounts of up to $250,000. GEX has multiple accounts at these financial institutions. The FDIC coverage of up to $250,000 applies to the Company’s accounts as a whole at each financial institution and not to each of the Company’s accounts individually. At December 31, 2017 and 2016, none of the Company’s cash was in excess of federally insured limits, as it was in multiple institutions with balances under the FDIC coverage limits. |
Accounts Receivable | Accounts Receivable consists of accrued services and consulting receivables due from customers and are unsecured. The receivables are generally unsecured and such amounts are generally due within 30 to 45 days after the date of the invoice. Accounts Receivable is carried at their face amount, less an allowance for doubtful accounts. GEX’s policy is generally not to charge interest on receivables after the invoice becomes past due. A receivable is considered past due if payments have not been received within agreed upon invoice terms. Write offs are recorded at a time when a customer receivable is deemed uncollectible. The Company did not write of any accounts receivables in the years ended January 31, 2017 and 2016. |
Property, Plant and Equipment | Property and Equipment, net is carried at the cost of purchase, acquisition or construction, and is depreciated over the estimated useful lives of the assets. Assets acquired in a business combination are stated at estimated fair value. Costs associated with repair and maintenance are expensed as they are incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related asset. Depreciation and amortization are provided using the straight-line methods over the estimated useful lives of the assets as follows: Useful Life Buildings 30 Years Office Furniture & Equipment 5 Years |
Impairment of Long-lived Assets | The Company records an impairment of long-lived assets used in operations, other than goodwill, when events or circumstances indicate that the asset might be impaired and the estimated undiscounted cash flows to be generated by those assets over their remaining lives are less than the carrying amount of those items. The net carrying value of assets not recoverable is reduced to fair value, which is typically calculated using the discounted cash flow method. |
Recently Issued Accounting Pronouncements | FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) FASB issued ASU No. 2016-02, Leases (Topic 842) in February 2016. ASU 2016-02 will require most lessees to recognize a majority of the company’s leases on the balance sheet, which will increase reported assets and liabilities. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018 including interim periods within such annual reporting periods with early adoption permitted. The Company has not early adopted this guidance and is currently evaluating the impact on the Company’s consolidated financial statements of adopting this guidance. The Company does not expect this guidance to have a material impact to the Company’s results of operations. FASB issued ASU No. 2017-04, Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment in January 2017. This amendment simplifies the manner in which an entity is required to test for goodwill impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The amendment simplifies this approach by having the entity (1) perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and (2) recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the understanding that the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendment is effective in fiscal years beginning after December 15, 2019. Early adoption is permitted for all entities for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect this guidance to have a material impact to the Company’s financial position or results of operations. |
3. INCOME TAXES (Tables)
3. INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes Tables | |
Deferred tax assets | 2017 2016 Net Operating (Income) Loss $ 275,781 $ 128,221 Less: Valuation Allowance (275,781 ) (128,221 ) Deferred Tax Asset, net $ — $ — |
5. ACCOUNTS RECEIVABLE (Tables)
5. ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Receivable Tables | |
Accounts receivable | 2017 2016 Accounts receivable 91,532 100,820 Allowance - - Accounts receivable, net 91,532 100,820 |
6. PROPERTY & EQUIPMENT (Tables
6. PROPERTY & EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property Equipment Tables | |
Property and equipment | 2017 2016 Buildings $ 2,459,420 $ — Office Equipment 5,844 1,731 Total Fixed Assets $ 2,465,264 $ 1,731 Accumulated Depreciation (1,887 ) (625 ) Property and Equipment, net $ 2,463,377 $ 1,106 |
7. OTHER CURRENT ASSETS (Tables
7. OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Current Assets Tables | |
Other current assets | 2017 2016 Prepaids $ 116,623 $ — Other Current Assets 2,709 Acquired Customer Contracts 37,500 Accumulated Amortization (68,083 ) — Net Other Current Assets $ 88,749 $ — |
8. LINES OF CREDIT - RELATED 25
8. LINES OF CREDIT - RELATED PARTY (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Lines Of Credit - Related Party Tables | |
Lines of credit | 2017 2016 Lines of Credit - Related Party, 6% interest rate, $1,000,000 Due March 31, 2019 - Cancelled on June 7, 2017 Upon Conversion $ - $ 317,187 Lines of Credit - Related Party, 6% interest rate, $1,500,000 Due March 31, 2019 352,100 46,000 Total $ 352,100 $ 363,187 |
10. NOTE PAYABLE (Tables)
10. NOTE PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
Schedule of minimum principal payments | Period Ended December 31: Amount 2018 56,649 2019 59,252 2020 61,973 2021 64,821 2022 1,068,225 $ 1,310,920 |
11. COMMITMENTS AND CONTINGEN27
11. COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Tables | |
Minimum lease obligations | Year Amount 2018 64,362 2019 60,225 Total $ 124,587 |
1. DESCRIPTION OF BUSINESS AN28
1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 12 Months Ended |
Dec. 31, 2017 | |
Office Furniture & Equipment | |
Estimated useful life | 5 years |
3. INCOME TAXES (Details)
3. INCOME TAXES (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Tax Asset: | ||
Net Operating (Income) Loss | $ 275,781 | $ 128,221 |
Less Valuation Allowance | (275,781) | (128,221) |
Net Deferred Tax Asset | $ 0 | $ 0 |
3. INCOME TAXES (Details Narrat
3. INCOME TAXES (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Income Taxes Details Narrative | ||
Net operating loss carryforward | $ 1,313,226 | $ 377,121 |
4. SHAREHOLDERS_ EQUITY (Detail
4. SHAREHOLDERS’ EQUITY (Details Narrative) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Shareholders Equity Details Narrative | ||
Common stock shares authorized | 200,000,000 | 200,000,000 |
Common stock shares par value | $ .001 | $ 0.001 |
Common stock shares outstanding | 11,797,231 | 10,988,036 |
Preferred stock shares authorized | 20,000,000 | 20,000,000 |
Preferred stock shares par value | $ 0.001 | $ 0.001 |
Preferred stock shares outstanding | 0 | 0 |
5. ACCOUNTS RECEIVABLE (Details
5. ACCOUNTS RECEIVABLE (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts Receivable Details | ||
Accounts receivable | $ 91,532 | $ 100,820 |
Allowance | 0 | 0 |
Accounts receivable, net | $ 91,532 | $ 100,820 |
5. ACCOUNTS RECEIVABLE (Detai33
5. ACCOUNTS RECEIVABLE (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Bad debt expense | $ 0 | $ 29,918 |
Allowance for bad debts | $ 0 | $ 0 |
Accounts Receivable | Four Customers | ||
Concentration risk | 92.00% | |
Revenue | Four Customers | ||
Concentration risk | 80.00% |
6. PROPERTY & EQUIPMENT (Detail
6. PROPERTY & EQUIPMENT (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Fixed Assets | $ 2,465,264 | $ 1,731 |
Accumulated Depreciation | (1,887) | (625) |
Property and Equipment, net | 2,463,377 | 1,106 |
Buildings | ||
Fixed Assets | 2,459,420 | 0 |
Office Equipment | ||
Fixed Assets | $ 5,844 | $ 1,731 |
6. PROPERTY & EQUIPMENT (Deta35
6. PROPERTY & EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property Equipment Details Narrative | ||
Depreciation expense | $ 1,262 | $ 577 |
7. OTHER CURRENT ASSETS (Detail
7. OTHER CURRENT ASSETS (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Other Current Assets Details | ||
Prepaids | $ 116,623 | $ 0 |
Other Current Assets | 2,709 | 0 |
Acquired Customer Contracts | 37,500 | 0 |
Accumulated Amortization | (68,083) | 0 |
Net Other Current Assets | $ 88,749 | $ 959 |
8. LINES OF CREDIT - RELATED 37
8. LINES OF CREDIT - RELATED PARTY (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Lines Of Credit - Related Party Details | ||
Lines of Credit - Related Party, 6% interest rate, $1,000,000, Due March 31, 2019 - Cancelled on June 7, 2017 Upon Conversion | $ 0 | $ 317,187 |
Lines of Credit - Related Party, 6% interest rate, $1,500,000, Due March 31, 2019 | 352,100 | 46,000 |
Total Lines of Credit | $ 352,100 | $ 363,187 |
10. NOTE PAYABLE (Details)
10. NOTE PAYABLE (Details) | Dec. 31, 2017USD ($) |
Notes to Financial Statements | |
2,018 | $ 56,649 |
2,019 | 59,252 |
2,020 | 61,973 |
2,021 | 64,821 |
2,022 | 1,068,225 |
Total | $ 1,310,920 |
11. COMMITMENTS AND CONTINGEN39
11. COMMITMENTS AND CONTINGENCIES (Details) | Dec. 31, 2017USD ($) |
Commitments And Contingencies Details | |
2,018 | $ 64,362 |
2,019 | 60,225 |
Total | $ 124,587 |
11. COMMITMENTS AND CONTINGEN40
11. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments And Contingencies Details Narrative | ||
Rent expense | $ 62,780 | $ 38,258 |
12. RELATED PARTY TRANSACTIONS
12. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | $ 104,000 | $ 305,885 |
Agreement 1 | ||
Revenues | 0 | 38,513 |
Agreement 2 | ||
Revenues | 104 | 101,992 |
Agreement 3 | ||
Revenues | 0 | 165,380 |
Agreement 4 | ||
Revenues | 0 | 0 |
Loans Payable 1 | ||
Loan payable | 0 | 317,187 |
Loans Payable 2 | ||
Loan payable | $ 352,100 | $ 46,000 |