Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 19, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | GEX MANAGEMENT, INC. | |
Entity Central Index Key | 0001681556 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 6,028,808,139 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and Cash Equivalents | $ 25,651 | $ 4,263 |
Accounts Receivable, net | 7,467 | 7,467 |
Accounts Receivable - Related Party | ||
Other Current Assets | 991,487 | 994,137 |
Total Current Assets | 1,024,606 | 1,005,867 |
Property and Equipment (Net) | 5,935 | 7,435 |
Other Assets | 2,830,917 | 2,940,887 |
TOTAL ASSETS | 3,861,458 | 3,954,190 |
Current Liabilities: | ||
Accounts Payable | 165,751 | 129,504 |
Accrued Expenses and Other Current Liabilities | 302,040 | 283,801 |
Derivative Liability, Others | 415,512 | 521,289 |
Accrued Interest Payable | 310,379 | 284,550 |
Notes Payable Current Portion | 3,618,567 | 3,623,579 |
Total Current Liabilities | 4,812,249 | 4,842,722 |
Non-Current Liabilities Notes Payable | ||
Other Non-Current Liabilities | ||
Line of Credit | 483,677 | 483,677 |
Total Long Term Liabilities | 483,677 | 483,677 |
TOTAL LIABILITIES | 5,295,926 | 5,326,398 |
SHAREHOLDERS' EQUITY (DEFICIT) | ||
Common Stock, $0.001 par value, 6,028,808,139 and 5,903,508,139 shares issued and Outstanding as June 30, 2020 and December 31, 2019, respectively | 5,951,718 | 5,826,418 |
Additional Paid In Capital | (737,741) | (617,453) |
Retained Deficit | (6,648,445) | (6,581,174) |
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) | (1,434,468) | (1,372,209) |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | $ 3,861,458 | $ 3,954,190 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, shares par value | $ 0.001 | $ 0.001 |
Common stock, shares issued | 6,028,808,139 | 5,903,508,139 |
Common stock, shares outstanding | 6,028,808,139 | 5,903,508,139 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 107,880 | $ 162,435 | $ 162,178 | $ 247,284 |
Revenues - Related Party | 0 | 0 | ||
Total Revenues (1) | 107,880 | 162,435 | 162,178 | 247,284 |
Cost of Revenues | 23,185 | 47,440 | 24,635 | 87,195 |
Gross Profit (Loss) | 84,695 | 114,995 | 137,543 | 160,089 |
Operating Expenses Depreciation and Amortization | 52,750 | 52,750 | 105,500 | 109,512 |
Selling and Advertising | ||||
General and Administrative | 100,141 | 58,967 | 175,842 | 190,444 |
Total Operating Expenses | 152,891 | 111,717 | 281,342 | 299,956 |
Total Operating Income (Loss) | (68,196) | 3,278 | (143,799) | (139,867) |
Gain on Extinguishment of Debt | ||||
Gain of Disposition of Asset | ||||
Derivative Gain (Loss) | (105,777) | |||
Income from Other | ||||
Interest Income(Expenses) | (64,527) | 29,279 | (126,007) | |
Net Other Income (Expense) | 5,000 | (126,369) | 76,527 | (194,363) |
Net income (loss) before income taxes | (63,196) | (123,091) | (67,271) | (334,230) |
Provision for income taxes | ||||
Net Income Attributable to Non Controlling Interest | ||||
NET INCOME (LOSS) | $ (63,196) | $ (123,091) | $ (67,271) | $ (334,230) |
BASIC and DILUTED | ||||
Weighted Average Shares Outstanding | 6,028,808,139 | 3,137,172,011 | 6,028,808,139 | 3,137,172,011 |
Earnings (loss) per Share | $ (0.00001) | $ (0.000038) | $ (0.000011) | $ (0.00001) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash Flows (used by) Operating Activities: | ||
Net Loss | $ (67,271) | $ (334,230) |
Adjustments to reconcile net loss to net cash (used in) operating activities: | ||
Depreciation and Amortization | 105,500 | 109,512 |
Changes in assets and liabilities: | ||
Accounts receivable | 12,877 | |
Other current assets/liabilities | 2,649 | 88,384 |
Other Assets/Liabilities | (118,487) | 3,371,781 |
Accounts Payable | 36,247 | (2,499) |
Accrued expenses and other payables | 18,240 | (1,078,266) |
Accrued interest payable | 25,829 | 26,011 |
Net cash (used in) operating activities | 2,707 | 2,193,570 |
Cash Flows from (used in) Investing Activities: | ||
Net cash (used in) Investing Activities: | ||
Cash Flows from (used in) Financing Activities: | ||
Proceeds from common stock/ APIC | 5,012 | |
Proceeds/Payments from notes payable | (5,012) | (1,313,590) |
Payments/Proceeds from short term notes payable (net) | (1,259,141) | |
Net cash provided by financing activities | (2,572,731) | |
NET INCREASE (DECREASE) IN CASH | 2,707 | (379,161) |
CASH AT BEGINNING OF PERIOD | 22,944 | 402,105 |
CASH AT END OF PERIOD | $ 25,651 | $ 22,944 |
Description of Business and Sig
Description of Business and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Description of Business and Significant Accounting Policies | NOTE 1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Organization and Description of Business GEX Management, Inc. was originally formed in 2004 as Group Excellence Management, LLC. d/b/a MyEasyHQ. In March of 2016, it was converted from a limited liability company into a C corporation and changed its name to GEX Management, Inc. Carl Dorvil founded Group Excellence, LLC, a tutoring and mentoring company, from his dorm room at Southern Methodist University in 2004. Group Excellence provided tutoring and mentoring services to students with the goal of inspiring young persons to pursue high personal and academic achievement. The company quickly grew to more than six hundred employees. In 2011, Group Excellence was on Inc. 500’s annual list of the 500 fastest growing private companies in the United States. In response to rapid growth, Mr. Dorvil developed GEX Management to facilitate the back-office functions of his company. GEX Management provided Group Excellence, LLC with human resources, IT, accounting/bookkeeping, social media, payroll, and conducted a majority of the overall operations of the company. Mr. Dorvil sold Group Excellence, LLC in 2011 but maintained ownership of GEX Management, which continued as a Professional Services Company providing back office support to the tutoring company, as well as third-party clients. In 2016 GEX Management revised its business model to provide staffing and back-office services to a wide variety of industries in order to expand the Company’s footprint, thereby building on the previous 12-year history of exceptional client service. Over the next few years, GEX Management experienced tremendous growth in sales and customer pipeline - staffing business grew by over 1600%+ from 2016 to 2017 with the firm being named among the “fastest growing public companies in the North Texas region” by the Dallas Morning News, while also significantly expanding its client footprints across multiple staffing, business consulting and PEO opportunities. In September 2018, the Company terminated contracts with two customers who accounted for over 83% of the Company’s net staffing revenue, resulting in significant loss of revenue to the company in Q4 2018 and continuing into 2019. The termination of these and other contracts was attributable to the increased business risk associated with Merchant Cash Advance contracts that the prior management had entered into requiring attachment of future receivables of customer receipts with the MCAs as well as a result of current management decision to move away from low/negative margin, high cost contracts which were deemed detrimental to the company’s sustained operability and profitability in the long run. Despite these setbacks, the current management of GEX set strategic goals in 2019 to expand further into areas of higher margin and growth business categories particularly in the space of Corporate Strategy, Technology Consulting and Strategy Consulting with a mission of delivering synergistic opportunities to clients that results in significant cost rationalization, revenue streams, benefits and integrated solutions to corporate businesses. As a result of management efforts towards achieving this strategic goal, GEX Management was invited in February to be a Preferred Supplier to Insight Global (www.insightglobal.com), one of the largest Managed Service Providers (MSPs) to Fortune 100 Companies in the Enterprise Technology Consulting and Staffing solutions space. This has resulted in a significant new business development opportunity for GEX. The first technology consultant that GEX hired through this Preferred Supplier initiative was successfully placed at a large PA based financial services firm to provide Business and Quality Analysis professional services to the client, additional contract hires are expected to follow suit in 2020. In Q4 2019, GEX signed a contract with a California based, high growth, highly visible, social media video entertainment platform to provide key corporate consulting services - this contract has started to drive revenue starting Q4 2019 and is expected to significantly expand growth in future periods with a focus on providing corporate strategy, business advisory and corporate “CFO” level consulting services to clients- this model is in line with the corporate vision outlined by the management earlier in the year. Furthermore, GEX is in talks with multiple staffing and consulting companies to identify synergistic acquisition opportunities to help compensate for the lost revenue and growth momentum in Q4 2018 and 2019 due to the contract terminations of legacy businesses and regain its position as a top tier business services firm in the US while also developing a long term and sustainable business pipeline model. Management expects these and other potential organic and inorganic growth initiatives to help the firm eventually achieve strong and stable revenue growth while also help move towards profitability by targeting a higher margin, lower cost business model and relying on less expensive debt instruments to help reduce the burden across the firm’s capital structure while maximizing efficient use of operating capital during future periods. In addition to these planned strategic growth initiatives which had started to build momentum in 2019 and expected to grow steadily in future periods, management has been focusing on materially improving its balance sheet by significantly reducing or eliminating the debt or debt like instruments related to convertible notes and asset related liens introduced in 2018 while simultaneously exploring opportunities to reduce or eliminate the high interest MCA related toxic debt instruments that resulted in significant interest expenses to the company and a burden to operating capital. As part of this balance sheet “clean-up” initiative, on February 8 2019, GEXM and the G&C Family LLC executed a “Deed in Lieu of Foreclosure” agreement the terms of which would allow GEXM to release ownership of the Arkansas building under AMAST LLC to the G&C Family Group, LLC in return for cancellation of the $1,300,000 real estate lien note secured by the building along with any and all accrued interest payable on the note as of the date of the agreement. Additionally, on March 5, 2019, one of GEX’s promissory note holders proceeded to execute its rights to enforce the liens on the Setco property through a foreclosure process which resulted in the note holder taking possession of the Setco property resulting in the elimination of a $500,000 note and any accrued interest on the principal amount and the elimination of $1,125,000 Setco real estate lien note made to Setco along with any accrued interests from the Company books. Furthermore, GEX has been able to reduce the overall convertible notes burden on the balance sheet by over 40% of the principal outstanding balance through strategic conversions of these notes to common equity initiated by the convertible note issuers throughout 2019 – this focus on balance sheet is expected to sustain through 2020 and beyond as a result of these management growth initiatives and the continued support of investors and shareholders alike. Finally, management believes that the material reduction of MCA related debt like instruments will be a critical first step prior to rebuilding a robust revenue pipeline as this will require strong working capital and favorable leverage covenants to sustain operations in the long term as well as reduce liabilities related to attachment to future receivables. While management efforts to settle these instruments are aggressively underway, the inability or failure by the firm to completely address these toxic MCA instruments could result in management pursuing a restructuring program or similar initiatives to bring the balance sheet within reasonable covenant parameters to allow the firm to continue operating efficiently in the coming years without exposing future customers to significant business risks associated with these toxic instruments. Material Definitive Agreements No Material Agreements have been executed by the Company during this reporting period. 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 (“SEC”). 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. The accompanying interim, unaudited consolidated financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K, filed with the SEC on May 14, 2020. All adjustments necessary for a fair statement of the results for the interim periods have been made. All adjustments are of a normal and recurring nature. 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. Cash and Cash Equivalents Cash and cash equivalents include cash in banks and short-term investments with original maturities of three months or less. Accounts Receivable Accounts receivable consists of accrued services and consulting receivables due from customers and are unsecured. The receivables 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 not to charge interest on receivables after the invoice becomes past due. Write-offs are recorded at the time when a customer receivable is deemed uncollectible. 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 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, and its equity method investments 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. Revenue Recognition Effective on January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU No. 2014-09 outlines a single, comprehensive revenue recognition model for revenue derived from contracts with customers and it supersedes the prior revenue recognition guidance, including prior guidance that is industry-specific. Under ASU No. 2014-09, an entity recognizes revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. The Company adopted ASU No. 2014-09 using the modified retrospective method, which applies to only the most current period presented in the financial statements. There were no significant changes to the Company’s existing revenue recognition policies as a result of adopting ASU 2014-09. GEX enters into contracts with its clients for professional services. GEX’s contract stipulates the rate and price charged to each client. GEX’s contracts for these services are generally cancellable at any time by either party with 30-days’ written notice. GEX fulfills its performance obligations each month, and the contracts generally have a term of one year with an automatic renewal after 12 months. The duration between invoicing and when GEX completes its contractual, performance obligations are satisfied is not significant. For staffing and professional services payment is generally due 30 days after the invoice is sent to the client. GEX does not have significant financing components or significant payment terms. 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 fulfilment of services under the SSA, even if the temporary staff are not employees of GEX. This typically occurs when GEX contracts third-parties to fulfil 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 uses 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. Earnings Per Share Earnings per share are calculated in accordance with ASC 260 “Earnings per Share”. Basic income (loss) per share is computed by dividing the period income (loss) available to common shareholders by the weighted average number of common shares outstanding. Diluted earnings (loss) per share is computed by dividing the income (loss) available to common share-holders by the weighted average number of common shares outstanding plus additional common shares that would have been outstanding if dilutive potential common shares had been issued. For purposes of this calculation, common stock dividends, warrants and options to acquire common stock, would be considered common stock equivalents in periods in which they have a dilutive effect and are excluded from this calculation in periods in which these are anti-dilutive to the net loss per share. Earnings per share information for the three months ended June 30, 2020 has been retroactively adjusted to reflect the stock split that occurred in December 2017. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. Such reclassifications have had no effect on the financial position as of December 31, 2019 or operations or cash flows for the periods ended June 30, 2020. Going Concern To date, the Company has funded its operations primarily through public and private offerings of common stock, our line of credit, short- term discounted and convertible notes payable. The Company has identified several potential financing sources in order to raise the capital necessary to fund operations through December 31, 2020. In addition to the aforementioned current sources of capital that will provide additional short-term liquidity, the Company is currently exploring various other alternatives including debt and equity financing vehicles, strategic partnerships, government programs that may be available to the Company, as well as trying to generate additional sales and increase margins. However, at this time the Company has no commitments to obtain any additional funds, and there can be no assurance such funds will be available on acceptable terms or at all. If the Company is unable to obtain additional funding and improve its operations, the Company’s financial condition and results of operations may be materially adversely affected and the Company may not be able to continue operations, which raises substantial doubt about its ability to continue as a going concern. Additionally, even if the Company raises sufficient capital through additional equity or debt financing, strategic alternatives or otherwise, there can be no assurances that the revenue or capital infusion will be sufficient to enable it to develop its business to a level where it will be profitable or generate positive cash flow. If the Company raises additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could be significantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders. If the Company incurs additional debt, a substantial portion of its operating cash flow may be dedicated to the payment of principal and interest on such indebtedness, thus limiting funds available for business activities. The terms of any debt securities issued could also impose significant restrictions on the Company’s operations. Broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance, and may adversely impact our ability to raise additional funds. Similarly, if the Company’s common stock is delisted from the public exchange markets, it may limit its ability to raise additional funds. The consolidated financial statements for the twelve months ended December 31, 2019 were prepared on the basis of a going concern which contemplates that the Company will be able to realize assets and discharge liabilities in the normal course of business. Accordingly, they do not give effect to adjustments that would be necessary should the Company be required to liquidate its assets. The ability of the Company to meet its total liabilities of $5,295,926 and to continue as a going concern is dependent upon the availability of future funding, continued growth in billings and sales contracts, and the Company’s ability to profitably meet its after-sale service commitments with its existing customers. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. In addition, at this time we cannot predict the impact of COVID-19 on our ability to obtain financing necessary for the Company to fund its working capital requirements. Also, it may hamper our efforts to comply with our filing obligations with the Securities and Exchange Commission. |
Other Current Assets
Other Current Assets | 6 Months Ended |
Jun. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | NOTE 2. OTHER CURRENT ASSETS At June 30, 2020 and December 31, 2019, Other Current Assets were $991,487 and $994,137 respectively. Current Assets primarily comprised of Debt Fees and Debt Discounts related to Debt and Debt like instruments. At June 30, 2020 and December 31, 2019, Other Assets were $2,830,917 and $2,940,887 respectively. Other Assets primarily comprised of long-term Consulting Contracts that had been capitalized on the Balance Sheet and Amortized over their lives over a period of 3-5 years depending on the length of the specific contract. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
SHAREHOLDERS' EQUITY (DEFICIT) | |
Stockholders' Equity | NOTE 3. STOCKHOLDERS’ EQUITY General 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. During the twelve months ended December 31, 2018, the Company issued the following unregistered securities. The issuance of securities in connection with these transactions was exempt from registration under Section 4(a)(2) and/or Rule 506 of Regulation D as promulgated by the Securities and Exchange Commission (the “SEC”) under of the Securities Act of 1933, as amended (the Securities Act”), as transactions by an issuer not involving a public offering. On July 9, 2018, the Company issued 58,500 shares of common stock at no cost basis for consulting services. On July 19, 2018, the Company issued 206,500 shares of common stock at no cost basis for consulting services. On July 25, 2018, the Company issued 12,668 shares of common stock at no cost basis for consulting services. On July 30, 2018, the Company issued 100,000 shares of common stock at no cost basis for consulting services. On August 2, 2018, the Company issued 207,339 shares of common stock at no cost basis in connection with issuance of a convertible note payable as a commitment fee. On August 7, 2018, the Company issued 50,000 shares of common stock at no cost basis for consulting services. On August 27, 2018, the Company issued 15,000 shares of common stock at no cost basis for consulting services. On September 10, 2018, the Company issued 220,000 shares of common stock at no cost basis for consulting services. On September 14, 2018, the Company issued 50,000 shares of common stock at no cost basis for consulting services. On September 25, 2018, the Company issued 1,436 shares of common stock at no cost basis for consulting services. On September 26, 2018, the Company issued 15,000,000 shares of common stock at no cost basis related to a real property purchase acquisition transaction. On January 16, 2019, the Company issued 60,000 shares of common stock related to a convertible note conversion. On January 21, 2019, the Company issued 538,095 shares of common stock related to a convertible note conversion. On January 29, 2019, the Company issued 120,000 shares of common stock related to a convertible note conversion. On February 13, 2019, the Company issued 1,000,000 shares of common stock related to a convertible note conversion. On February 13, 2019, the Company issued 400,000 shares of common stock related to a convertible note conversion. On February 14, 2019, the Company issued 400,000 shares of common stock related to a convertible note conversion. On February 19, 2019, the Company issued 670,000 shares of common stock related to a convertible note conversion. On February 20, 2019, the Company issued 1,000,000 shares of common stock related to a convertible note conversion. On February 20, 2019, the Company issued 1,000,000 shares of common stock related to a convertible note conversion. On February 21, 2019, the Company issued 847,458 shares of common stock related to a convertible note conversion. On February 22, 2019, the Company issued 677,966 shares of common stock related to a convertible note conversion. On February 22, 2019, the Company issued 1,129,944 shares of common stock related to a convertible note conversion. On February 22, 2019, the Company issued 300,000 shares of common stock related to a convertible note conversion. On February 25, 2019, the Company issued 2,300,000 shares of common stock related to a convertible note conversion. On February 25, 2019, the Company issued 2,000,000 shares of common stock related to a convertible note conversion. On February 26, 2019, the Company issued 1,140,000 shares of common stock related to a convertible note conversion. On February 26, 2019, the Company issued 1,250,000 shares of common stock related to a convertible note conversion. On February 27, 2019, the Company issued 2,535,211 shares of common stock related to a convertible note conversion. On February 28, 2019, the Company issued 3,400,000 shares of common stock related to a convertible note conversion. On February 28, 2019, the Company issued 2,900,000 shares of common stock related to a convertible note conversion. In March 2019, the Company issued a total of 253,428,115 shares of common stock related to a convertible note conversion. Effective February 19, 2019, the Board of Directors of the Company approved the authorization of eight hundred thousand (800,000) shares of Series A1 Voting Preferred Stock (the “Series A1 Preferred Stock”) and approved the issuance to Srikumar Vanamali, the Corporation’s Interim CEO and Executive Director, of four hundred thousand (400,000) shares of this Series A1 Preferred Stock and approved the issuance to Shaheed Bailey, the Corporation’s Interim Chief Investment Officer and Director, of four hundred thousand (400,000) shares of this Series A1 Preferred Stock. As a result of the issuance of the Series A1 Preferred Stock Shares to Mr. Srikumar Vanamali and Mr. Shaheed Bailey, Mr. Srikumar Vanamali and Mr. Shaheed Bailey obtained voting rights over the Company’s outstanding voting stock on February 19, 2019, which provide them combined the right to vote up to 51% of the total voting shares able to vote on any and all shareholder matters. As a result, Mr. Srikumar Vanamali and Mr. Shaheed Bailey will exercise majority control in determining the outcome of all corporate transactions or other matters, including the election of Directors, mergers, consolidations, the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control. In the event Mr. Srikumar Vanamali and Mr. Shaheed Bailey are no longer acting as Officers and Directors of the Board of Directors of the Corporation, the shares of Series A1 Preferred Stock shall automatically, without any action on the part of any party, or the Corporation, be deemed cancelled in their entirety. In relation to this, Form 3 was filed in SEC for both Srikumar Vanamali and Shaheed Bailey related |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 4. NOTES PAYABLE On April 26, 2018, the Company entered into two Securities Purchase Agreements, pursuant to which the Company issued Convertible Promissory Notes (“the Notes”) with principal amounts totaling up to $1,000,000, bearing interest at 10% per annum. The total amounts of the Notes that can be funded (consideration that can be loaned to the Company) is up to $887,500, after discounts of $112,500 prorated over the term of the Notes. Amounts borrowed by the Company mature in twelve months after the date of funding and can be prepaid up to six months after issuance subject to prepayment penalties and approval by the Note holders. Any amounts outstanding on the Notes can be converted into Common Stock at a conversion price of $2.50 per share for the first six months and at a discount of up to 50% thereafter to the then current market value of the Company’s stock commencing six months after issuance. Conversion is at the sole discretion of the holders of the Notes. In May 2018, the Company borrowed $200,000 under the Notes, and received $175,000 after giving effect to discounts of 10% for each note and origination fees. The Company incurred a total of $5,000 related to origination fees on the Notes. Additionally, the Company issued 50,000 warrant shares for debt issuance costs at an exercise price of $4.00 per share. The warrants are exercisable for five years and had a fair market value of $31,852 on the date of issuance. The Notes bear interest at 10% per annum. On April 26, 2018, the Company entered into a convertible note payable for $146,681 bearing interest at 10% per annum. On April 26, 2018, the Company entered into a convertible note payable for $146,681 bearing interest at 10% per annum. On August 1, 2018, the Company entered into a convertible note payable for $226,000 bearing interest at 12% per annum. The note is convertible at the lesser of $2.50 per share or 65% of the market price on the date of conversion. In connection with this note payable, on August 9, 2018, the Company issued 207,339 shares for its common stock as a commitment fee. On August 8, 2018, the Company entered into a convertible note payable for $85,000 bearing interest at 10% per annum. On August 14, 2018, the Company entered into a convertible note payable for $250,000 bearing interest at 10% per annum. On August 24, 2018, the Company entered into a convertible note payable for $85,000 bearing interest at 10% per annum. On January 18 2019, the Company entered into a convertible note payable for $226,000 bearing interest at 12% per annum. In connection with this note payable, the Company issued 538,095 shares for its common stock as a commitment fee. On February 15, 2019, the Company entered into a convertible note payable for $43,000 bearing interest at 10% per annum. On April 16, 2019, the Company entered into a convertible note payable for $38,000 bearing interest at 10% per annum. |
Accounts Receivable and Concent
Accounts Receivable and Concentration of Credit Risk | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Accounts Receivable and Concentration of Credit Risk | NOTE 5. ACCOUNTS RECEIVABLE AND CONCENTRATION OF CREDIT RISK As of June 30, 2020, the company had $7,467 outstanding accounts receivable balance with its customers. As of December 31, 2019, the company had $7,467 outstanding accounts receivable balance with its customers. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 6. PROPERTY AND EQUIPMENT The Company did not own significantly material fixed assets as of June 30, 2020 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 7. 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 1% 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 The Company did not have any related party transactions during this reporting period. Revenues For the three months ended June 30, 2020 and 2019, the Company had no revenues from related parties. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 8: COMMITMENTS AND CONTINGENCIES The Company did not have any material contingent obligations during this reporting period. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | NOTE 9. ACQUISITIONS AND DIVESTITURES The Company has not been involved in any material acquisition or divestiture activity during the reporting period. |
Description of Business and S_2
Description of Business and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | Organization and Description of Business GEX Management, Inc. was originally formed in 2004 as Group Excellence Management, LLC. d/b/a MyEasyHQ. In March of 2016, it was converted from a limited liability company into a C corporation and changed its name to GEX Management, Inc. Carl Dorvil founded Group Excellence, LLC, a tutoring and mentoring company, from his dorm room at Southern Methodist University in 2004. Group Excellence provided tutoring and mentoring services to students with the goal of inspiring young persons to pursue high personal and academic achievement. The company quickly grew to more than six hundred employees. In 2011, Group Excellence was on Inc. 500’s annual list of the 500 fastest growing private companies in the United States. In response to rapid growth, Mr. Dorvil developed GEX Management to facilitate the back-office functions of his company. GEX Management provided Group Excellence, LLC with human resources, IT, accounting/bookkeeping, social media, payroll, and conducted a majority of the overall operations of the company. Mr. Dorvil sold Group Excellence, LLC in 2011 but maintained ownership of GEX Management, which continued as a Professional Services Company providing back office support to the tutoring company, as well as third-party clients. In 2016 GEX Management revised its business model to provide staffing and back-office services to a wide variety of industries in order to expand the Company’s footprint, thereby building on the previous 12-year history of exceptional client service. Over the next few years, GEX Management experienced tremendous growth in sales and customer pipeline - staffing business grew by over 1600%+ from 2016 to 2017 with the firm being named among the “fastest growing public companies in the North Texas region” by the Dallas Morning News, while also significantly expanding its client footprints across multiple staffing, business consulting and PEO opportunities. In September 2018, the Company terminated contracts with two customers who accounted for over 83% of the Company’s net staffing revenue, resulting in significant loss of revenue to the company in Q4 2018 and continuing into 2019. The termination of these and other contracts was attributable to the increased business risk associated with Merchant Cash Advance contracts that the prior management had entered into requiring attachment of future receivables of customer receipts with the MCAs as well as a result of current management decision to move away from low/negative margin, high cost contracts which were deemed detrimental to the company’s sustained operability and profitability in the long run. Despite these setbacks, the current management of GEX set strategic goals in 2019 to expand further into areas of higher margin and growth business categories particularly in the space of Corporate Strategy, Technology Consulting and Strategy Consulting with a mission of delivering synergistic opportunities to clients that results in significant cost rationalization, revenue streams, benefits and integrated solutions to corporate businesses. As a result of management efforts towards achieving this strategic goal, GEX Management was invited in February to be a Preferred Supplier to Insight Global (www.insightglobal.com), one of the largest Managed Service Providers (MSPs) to Fortune 100 Companies in the Enterprise Technology Consulting and Staffing solutions space. This has resulted in a significant new business development opportunity for GEX. The first technology consultant that GEX hired through this Preferred Supplier initiative was successfully placed at a large PA based financial services firm to provide Business and Quality Analysis professional services to the client, additional contract hires are expected to follow suit in 2020. In Q4 2019, GEX signed a contract with a California based, high growth, highly visible, social media video entertainment platform to provide key corporate consulting services - this contract has started to drive revenue starting Q4 2019 and is expected to significantly expand growth in future periods with a focus on providing corporate strategy, business advisory and corporate “CFO” level consulting services to clients- this model is in line with the corporate vision outlined by the management earlier in the year. Furthermore, GEX is in talks with multiple staffing and consulting companies to identify synergistic acquisition opportunities to help compensate for the lost revenue and growth momentum in Q4 2018 and 2019 due to the contract terminations of legacy businesses and regain its position as a top tier business services firm in the US while also developing a long term and sustainable business pipeline model. Management expects these and other potential organic and inorganic growth initiatives to help the firm eventually achieve strong and stable revenue growth while also help move towards profitability by targeting a higher margin, lower cost business model and relying on less expensive debt instruments to help reduce the burden across the firm’s capital structure while maximizing efficient use of operating capital during future periods. In addition to these planned strategic growth initiatives which had started to build momentum in 2019 and expected to grow steadily in future periods, management has been focusing on materially improving its balance sheet by significantly reducing or eliminating the debt or debt like instruments related to convertible notes and asset related liens introduced in 2018 while simultaneously exploring opportunities to reduce or eliminate the high interest MCA related toxic debt instruments that resulted in significant interest expenses to the company and a burden to operating capital. As part of this balance sheet “clean-up” initiative, on February 8 2019, GEXM and the G&C Family LLC executed a “Deed in Lieu of Foreclosure” agreement the terms of which would allow GEXM to release ownership of the Arkansas building under AMAST LLC to the G&C Family Group, LLC in return for cancellation of the $1,300,000 real estate lien note secured by the building along with any and all accrued interest payable on the note as of the date of the agreement. Additionally, on March 5, 2019, one of GEX’s promissory note holders proceeded to execute its rights to enforce the liens on the Setco property through a foreclosure process which resulted in the note holder taking possession of the Setco property resulting in the elimination of a $500,000 note and any accrued interest on the principal amount and the elimination of $1,125,000 Setco real estate lien note made to Setco along with any accrued interests from the Company books. Furthermore, GEX has been able to reduce the overall convertible notes burden on the balance sheet by over 40% of the principal outstanding balance through strategic conversions of these notes to common equity initiated by the convertible note issuers throughout 2019 – this focus on balance sheet is expected to sustain through 2020 and beyond as a result of these management growth initiatives and the continued support of investors and shareholders alike. Finally, management believes that the material reduction of MCA related debt like instruments will be a critical first step prior to rebuilding a robust revenue pipeline as this will require strong working capital and favorable leverage covenants to sustain operations in the long term as well as reduce liabilities related to attachment to future receivables. While management efforts to settle these instruments are aggressively underway, the inability or failure by the firm to completely address these toxic MCA instruments could result in management pursuing a restructuring program or similar initiatives to bring the balance sheet within reasonable covenant parameters to allow the firm to continue operating efficiently in the coming years without exposing future customers to significant business risks associated with these toxic instruments. |
Material Definitive Agreements | Material Definitive Agreements No Material Agreements have been executed by the Company during this reporting period. |
Basis of Presentation | 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 (“SEC”). 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. The accompanying interim, unaudited consolidated financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K, filed with the SEC on May 14, 2020. All adjustments necessary for a fair statement of the results for the interim periods have been made. All adjustments are of a normal and recurring nature. |
Principles of Consolidation | 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 | 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. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash in banks and short-term investments with original maturities of three months or less. |
Accounts Receivable | Accounts Receivable Accounts receivable consists of accrued services and consulting receivables due from customers and are unsecured. The receivables 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 not to charge interest on receivables after the invoice becomes past due. Write-offs are recorded at the time when a customer receivable is deemed uncollectible. |
Property and Equipment | 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 useful lives of the assets as follows: Useful Life Buildings 30 Years Office Furniture & Equipment 5 Years |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company records an impairment of long-lived assets used in operations, other than goodwill, and its equity method investments 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. |
Revenue Recognition | Revenue Recognition Effective on January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU No. 2014-09 outlines a single, comprehensive revenue recognition model for revenue derived from contracts with customers and it supersedes the prior revenue recognition guidance, including prior guidance that is industry-specific. Under ASU No. 2014-09, an entity recognizes revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. The Company adopted ASU No. 2014-09 using the modified retrospective method, which applies to only the most current period presented in the financial statements. There were no significant changes to the Company’s existing revenue recognition policies as a result of adopting ASU 2014-09. GEX enters into contracts with its clients for professional services. GEX’s contract stipulates the rate and price charged to each client. GEX’s contracts for these services are generally cancellable at any time by either party with 30-days’ written notice. GEX fulfills its performance obligations each month, and the contracts generally have a term of one year with an automatic renewal after 12 months. The duration between invoicing and when GEX completes its contractual, performance obligations are satisfied is not significant. For staffing and professional services payment is generally due 30 days after the invoice is sent to the client. GEX does not have significant financing components or significant payment terms. 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 | Income Taxes The Company uses 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 | 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. |
Earnings Per Share | Earnings Per Share Earnings per share are calculated in accordance with ASC 260 “Earnings per Share”. Basic income (loss) per share is computed by dividing the period income (loss) available to common shareholders by the weighted average number of common shares outstanding. Diluted earnings (loss) per share is computed by dividing the income (loss) available to common share-holders by the weighted average number of common shares outstanding plus additional common shares that would have been outstanding if dilutive potential common shares had been issued. For purposes of this calculation, common stock dividends, warrants and options to acquire common stock, would be considered common stock equivalents in periods in which they have a dilutive effect and are excluded from this calculation in periods in which these are anti-dilutive to the net loss per share. Earnings per share information for the three months ended June 30, 2020 has been retroactively adjusted to reflect the stock split that occurred in December 2017. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. Such reclassifications have had no effect on the financial position as of December 31, 2019 or operations or cash flows for the periods ended June 30, 2020. |
Going Concern | Going Concern To date, the Company has funded its operations primarily through public and private offerings of common stock, our line of credit, short- term discounted and convertible notes payable. The Company has identified several potential financing sources in order to raise the capital necessary to fund operations through December 31, 2020. In addition to the aforementioned current sources of capital that will provide additional short-term liquidity, the Company is currently exploring various other alternatives including debt and equity financing vehicles, strategic partnerships, government programs that may be available to the Company, as well as trying to generate additional sales and increase margins. However, at this time the Company has no commitments to obtain any additional funds, and there can be no assurance such funds will be available on acceptable terms or at all. If the Company is unable to obtain additional funding and improve its operations, the Company’s financial condition and results of operations may be materially adversely affected and the Company may not be able to continue operations, which raises substantial doubt about its ability to continue as a going concern. Additionally, even if the Company raises sufficient capital through additional equity or debt financing, strategic alternatives or otherwise, there can be no assurances that the revenue or capital infusion will be sufficient to enable it to develop its business to a level where it will be profitable or generate positive cash flow. If the Company raises additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could be significantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing stockholders. If the Company incurs additional debt, a substantial portion of its operating cash flow may be dedicated to the payment of principal and interest on such indebtedness, thus limiting funds available for business activities. The terms of any debt securities issued could also impose significant restrictions on the Company’s operations. Broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance, and may adversely impact our ability to raise additional funds. Similarly, if the Company’s common stock is delisted from the public exchange markets, it may limit its ability to raise additional funds. The consolidated financial statements for the twelve months ended December 31, 2019 were prepared on the basis of a going concern which contemplates that the Company will be able to realize assets and discharge liabilities in the normal course of business. Accordingly, they do not give effect to adjustments that would be necessary should the Company be required to liquidate its assets. The ability of the Company to meet its total liabilities of $5,295,926 and to continue as a going concern is dependent upon the availability of future funding, continued growth in billings and sales contracts, and the Company’s ability to profitably meet its after-sale service commitments with its existing customers. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. In addition, at this time we cannot predict the impact of COVID-19 on our ability to obtain financing necessary for the Company to fund its working capital requirements. Also, it may hamper our efforts to comply with our filing obligations with the Securities and Exchange Commission. |
Description of Business and S_3
Description of Business and Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of Property and Equipment | Depreciation and amortization are provided using the straight-line methods over the useful lives of the assets as follows: Useful Life Buildings 30 Years Office Furniture & Equipment 5 Years |
Description of Business and S_4
Description of Business and Significant Accounting Policies (Details Narrative) - USD ($) | Mar. 05, 2019 | Mar. 05, 2019 | Feb. 08, 2019 | Jun. 30, 2020 | Dec. 31, 2019 |
Liabilities | $ 5,295,926 | $ 5,326,398 | |||
G&C Family Group, LLC [Member] | Real Estate Lien Note [Member] | |||||
Return for cancellation of building | $ 1,300,000 | ||||
Setco International Forwarding Corporation [Member] | Real Estate Lien Note [Member] | |||||
Elimination of debt | $ 1,125,000 | ||||
Debt instrument description | Convertible notes burden on the balance sheet by over 40% of the principal outstanding balance. | ||||
Setco International Forwarding Corporation [Member] | Promissory Note [Member] | |||||
Elimination of debt | $ 500,000 |
Description of Business and S_5
Description of Business and Significant Accounting Policies - Schedule of Estimated Useful Lives of Property and Equipment (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Buildings [Member] | |
Useful life | 30 years |
Office Furniture & Equipment [Member] | |
Useful life | 5 years |
Other Current Assets (Details N
Other Current Assets (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Other current assets | $ 991,487 | $ 994,137 |
Other assets non current | $ 2,830,917 | $ 2,940,887 |
Minimum [Member] | ||
Finite lived intangible asset useful Life | 3 years | |
Maximum [Member] | ||
Finite lived intangible asset useful Life | 5 years |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) | Mar. 31, 2019shares | Feb. 28, 2019shares | Feb. 27, 2019shares | Feb. 26, 2019shares | Feb. 25, 2019shares | Feb. 22, 2019shares | Feb. 21, 2019shares | Feb. 20, 2019shares | Feb. 19, 2019shares | Feb. 19, 2019shares | Feb. 14, 2019shares | Feb. 13, 2019shares | Jan. 29, 2019shares | Jan. 21, 2019shares | Jan. 16, 2019shares | Sep. 26, 2018shares | Sep. 25, 2018shares | Sep. 14, 2018shares | Sep. 10, 2018shares | Aug. 27, 2018shares | Aug. 07, 2018shares | Aug. 02, 2018shares | Jul. 30, 2018shares | Jul. 25, 2018shares | Jul. 19, 2018shares | Jul. 09, 2018shares | Dec. 29, 2017USD ($)ft²shares | Oct. 31, 2017shares | Oct. 18, 2017USD ($)shares | Sep. 20, 2017USD ($)shares | Jul. 20, 2017USD ($)shares | Jun. 20, 2017USD ($)shares | Jun. 07, 2017USD ($)$ / sharesshares | May 15, 2017USD ($)$ / sharesshares | Nov. 14, 2016USD ($)shares | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2017USD ($)shares |
Number of common stock shares sold | 188,059 | |||||||||||||||||||||||||||||||||||||||
Value of common stock shares sold | $ | $ 282,089 | |||||||||||||||||||||||||||||||||||||||
Stock split | The Company effected a 4 for 3 stock split in December 2017. | |||||||||||||||||||||||||||||||||||||||
Number of shares issued for services | 1,436 | 50,000 | 220,000 | 15,000 | 50,000 | 100,000 | 12,668 | 206,500 | 58,500 | 47,781 | ||||||||||||||||||||||||||||||
Value of shares issued for services | $ | $ 74,750 | |||||||||||||||||||||||||||||||||||||||
Number of common shares issued for debt conversion | 207,339 | |||||||||||||||||||||||||||||||||||||||
Gain on extinguishment of debt | $ | ||||||||||||||||||||||||||||||||||||||||
Number of shares for acquisition | 15,000,000 | |||||||||||||||||||||||||||||||||||||||
Series A1 Voting Preferred Stock [Member] | ||||||||||||||||||||||||||||||||||||||||
Preferred stock shares authorized | 800,000 | 800,000 | ||||||||||||||||||||||||||||||||||||||
Voting rights, percentage | 51.00% | 51.00% | ||||||||||||||||||||||||||||||||||||||
Convertible Note [Member] | ||||||||||||||||||||||||||||||||||||||||
Number of common shares issued for debt conversion | 253,428,115 | 3,400,000 | 2,535,211 | 1,140,000 | 2,300,000 | 677,966 | 847,458 | 1,000,000 | 670,000 | 400,000 | 1,000,000 | 120,000 | 538,095 | 60,000 | ||||||||||||||||||||||||||
Convertible Note One [Member] | ||||||||||||||||||||||||||||||||||||||||
Number of common shares issued for debt conversion | 2,900,000 | 1,250,000 | 2,000,000 | 1,129,944 | 1,000,000 | 400,000 | ||||||||||||||||||||||||||||||||||
Convertible Note Two [Member] | ||||||||||||||||||||||||||||||||||||||||
Number of common shares issued for debt conversion | 300,000 | |||||||||||||||||||||||||||||||||||||||
AMAST Consulting, LLC [Member] | ||||||||||||||||||||||||||||||||||||||||
Area of land | ft² | 12,223 | |||||||||||||||||||||||||||||||||||||||
Percentage of membership interest acquired | 100.00% | |||||||||||||||||||||||||||||||||||||||
Number of shares for acquisition | 200,000 | |||||||||||||||||||||||||||||||||||||||
Srikumar Vanamali [Member] | Series A1 Voting Preferred Stock [Member] | ||||||||||||||||||||||||||||||||||||||||
Number of common stock issued | 400,000 | |||||||||||||||||||||||||||||||||||||||
Shaheed Bailey [Member] | Series A1 Voting Preferred Stock [Member] | ||||||||||||||||||||||||||||||||||||||||
Number of common stock issued | 400,000 | |||||||||||||||||||||||||||||||||||||||
Srikumar Vanamali and Shaheed Bailey [Member] | Series A1 Voting Preferred Stock [Member] | ||||||||||||||||||||||||||||||||||||||||
Voting rights, percentage | 10.00% | 10.00% | ||||||||||||||||||||||||||||||||||||||
Conversion Agreement [Member] | Two Consultants [Member] | ||||||||||||||||||||||||||||||||||||||||
Number of shares issued for services | 40,000 | |||||||||||||||||||||||||||||||||||||||
Balance payable to consultant | $ | $ 45,000 | |||||||||||||||||||||||||||||||||||||||
Common stock shares issued, price per share | $ / shares | $ 1.125 | |||||||||||||||||||||||||||||||||||||||
Conversion Agreement [Member] | Consultant One [Member] | ||||||||||||||||||||||||||||||||||||||||
Number of shares issued for services | 20,000 | |||||||||||||||||||||||||||||||||||||||
Conversion Agreement [Member] | Consultant Two [Member] | ||||||||||||||||||||||||||||||||||||||||
Number of shares issued for services | 40,000 | |||||||||||||||||||||||||||||||||||||||
Debt Conversion Agreement [Member] | ||||||||||||||||||||||||||||||||||||||||
Common stock shares issued, price per share | $ / shares | $ 1.125 | |||||||||||||||||||||||||||||||||||||||
Number of common shares issued for debt conversion | 153,664 | |||||||||||||||||||||||||||||||||||||||
Extinguishment of debt | $ | $ 345,745 | |||||||||||||||||||||||||||||||||||||||
Gain on extinguishment of debt | $ | $ 172,872 | |||||||||||||||||||||||||||||||||||||||
Stock Purchase Agreement [Member] | Third-Party Investor [Member] | ||||||||||||||||||||||||||||||||||||||||
Number of common stock issued | 12,668 | 19,003 | ||||||||||||||||||||||||||||||||||||||
Value of common stock issued | $ | $ 80,000 | $ 120,000 | ||||||||||||||||||||||||||||||||||||||
Stock Purchase Agreement [Member] | Two Advisory Board Members [Member] | ||||||||||||||||||||||||||||||||||||||||
Number of common stock issued | 6,564 | |||||||||||||||||||||||||||||||||||||||
Value of common stock issued | $ | $ 32,000 | |||||||||||||||||||||||||||||||||||||||
Stock Purchase Agreement [Member] | One Advisory Board Member [Member] | ||||||||||||||||||||||||||||||||||||||||
Number of common stock issued | 2,667 | |||||||||||||||||||||||||||||||||||||||
Value of common stock issued | $ | $ 13,000 | |||||||||||||||||||||||||||||||||||||||
Stock Purchase Agreement [Member] | Shareholder [Member] | ||||||||||||||||||||||||||||||||||||||||
Number of common stock issued | 75,000 | |||||||||||||||||||||||||||||||||||||||
Value of common stock issued | $ | $ 300,000 | |||||||||||||||||||||||||||||||||||||||
Advisory Agreement [Member] | Third-Party Advisor Firm [Member] | ||||||||||||||||||||||||||||||||||||||||
Number of common stock issued | 3,334 | |||||||||||||||||||||||||||||||||||||||
Payments to non-refundable retainer | $ | $ 24,750 | |||||||||||||||||||||||||||||||||||||||
Lease Agreement [Member] | ||||||||||||||||||||||||||||||||||||||||
Number of common stock issued | 1,067 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Jan. 18, 2019 | Aug. 09, 2018 | Apr. 26, 2018 | May 31, 2018 | Apr. 16, 2019 | Feb. 15, 2019 | Aug. 24, 2018 | Aug. 14, 2018 | Aug. 08, 2018 | Aug. 01, 2018 |
Convertible Notes Payable [Member] | ||||||||||
Convertible promissory note, principal amount | $ 226,000 | $ 146,681 | $ 38,000 | $ 43,000 | $ 85,000 | $ 250,000 | $ 85,000 | $ 226,000 | ||
Interest rate | 12.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 12.00% | ||
Debt conversion price per share | $ 2.50 | |||||||||
Debt discount percentage | 65.00% | |||||||||
Shares issued during period in connection with convertible notes payable | 538,095 | 207,339 | ||||||||
Two Securities Purchase Agreements [Member] | ||||||||||
Convertible promissory note, principal amount | $ 1,000,000 | $ 200,000 | ||||||||
Interest rate | 10.00% | 10.00% | ||||||||
Total proceeds from notes | $ 887,500 | $ 175,000 | ||||||||
Discount on notes | $ 112,500 | |||||||||
Debt conversion price per share | $ 2.50 | |||||||||
Debt discount percentage | 50.00% | 10.00% | ||||||||
Debt origination fee | 5,000 | |||||||||
Warrant shares issued for debt issuance costs | 50,000 | |||||||||
Warrant shares issued for debt issuance costs, exercise price per share | $ 4 | |||||||||
Warrant shares issued for debt issuance costs, warrant term | 5 years | |||||||||
Fair value of warrants | $ 31,852 |
Accounts Receivable and Conce_2
Accounts Receivable and Concentration of Credit Risk (Details Narrative) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Outstanding accounts receivable balance | $ 7,467 | $ 7,467 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Related Party Transactions [Abstract] | ||||
Revenue from related parties | $ 0 | $ 0 |