Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2021 | May 20, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | IGEN NETWORKS CORP | |
Entity Central Index Key | 0001393540 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Mar. 31, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 | |
Entity Common Stock Shares Outstanding | 1,244,059,134 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Interim
Condensed Consolidated Interim Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash | $ 0 | $ 26,731 |
Accounts and other receivables, net | 21,500 | 34,830 |
Inventory | 30,554 | 20,456 |
Total Current Assets | 52,054 | 82,017 |
Goodwill | 505,508 | 505,508 |
Total Assets | 557,562 | 587,525 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 797,830 | 846,736 |
Current portion of deferred revenue, net of contract assets | 81,760 | 96,792 |
Notes payable, current portion | 33,033 | 5,943 |
Convertible debentures, current portion, net of discount of $24,976 and $22,645, respectively | 37,345 | 14,580 |
Derivative liabilities | 144,592 | 189,775 |
Total Current Liabilities | 1,094,560 | 1,153,826 |
Notes payable, net of current portion | 181,685 | 207,219 |
Convertible debentures, net of current portion, net of discount of $98,043 and $141,536, respectively | 78,301 | 55,570 |
Deferred revenue, net of current portion and contract assets | 45,642 | 42,020 |
Total Liabilities | 1,400,188 | 1,458,635 |
Redeemable convertible preferred stock - Series A: | ||
Authorized - 1,250,000 shares with $0.001 par value, 220,550 shares and 186,450 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively, net of discount of $138,491 and $101,104, respectively, aggregate liquidation preference of $224,030 and $190,194 as of March 31,2021 and December 31, 2020, respectively | 35,040 | 51,907 |
Stockholders' Deficit | ||
Common stock: Authorized - 1,740,000,000 shares with $0.001 par value issued and outstanding - 1,231,393,975 and 1,192,192,158 shares, as of March 31, 2021 and December 31, 2020, respectively | 1,231,394 | 1,192,192 |
Additional paid-in capital | 13,620,458 | 13,068,978 |
Subscription receivable | (51,822) | 0 |
Accumulated Deficit | (15,679,196) | (15,185,187) |
Total Stockholders' Deficit | (877,666) | (923,017) |
Total Liabilities and Stockholders' Deficit | 557,562 | 587,525 |
Series B preferred stock [Member] | ||
Redeemable convertible preferred stock - Series A: | ||
Authorized - 1,250,000 shares with $0.001 par value, 220,550 shares and 186,450 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively, net of discount of $138,491 and $101,104, respectively, aggregate liquidation preference of $224,030 and $190,194 as of March 31,2021 and December 31, 2020, respectively | $ 1,500 | $ 1,000 |
Condensed Consolidated Interi_2
Condensed Consolidated Interim Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current Liabilities | ||
Net of unamortized discount | $ 24,976 | $ 22,645 |
Convertible debentures, net of current portion, net of discount | $ 98,043 | $ 141,536 |
Stockholders' Deficit | ||
Common stock, shares par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,740,000,000 | 1,740,000,000 |
Common stock, shares issued | 1,231,393,975 | 1,192,192,158 |
Common stock, shares outstanding | 1,231,393,975 | 1,192,192,158 |
Preferred stock, shares par value | $ 0.001 | |
Preferred stock, shares authorized | 217,769,961 | |
Series B preferred stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock, shares par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 1,500,000 | 1,000,000 |
Preferred stock, shares outstanding | 1,500,000 | 1,000,000 |
Preferred stock, liquidation preference shares | $ 1,500 | $ 1,000 |
Redeemable convertible preferred stock - Series A [Member] | ||
Stockholders' Deficit | ||
Preferred stock, shares par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,250,000 | 1,250,000 |
Preferred stock, shares issued | 220,550 | 186,450 |
Preferred stock, shares outstanding | 220,550 | 186,450 |
Preferred stock, liquidation preference shares | $ 224,030 | $ 190,194 |
Preferred stock, liquidation preference shares, net of discount | $ 138,491 | $ 10,104 |
Condensed Consolidated Interi_3
Condensed Consolidated Interim Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues: | ||
Sales, services | $ 79,431 | $ 110,125 |
Sales, other | 0 | 1,674 |
Total Revenues | 79,431 | 111,799 |
Cost of goods sold | 64,317 | 67,949 |
Gross Profit | 15,114 | 43,850 |
Expenses: | ||
Selling, general and administrative | 58,368 | 75,247 |
Management and consulting fees | 46,415 | 53,052 |
Payroll and related | 78,377 | 37,873 |
Stock-based director expense | 278,447 | 277,543 |
Total Expenses | 461,607 | 443,715 |
Loss Before Other Income (Expense) | (446,493) | (399,865) |
Other Income (Expense): | ||
Accretion of discounts on convertible debentures | (41,161) | (76,728) |
Change in fair value of derivative liabilities | 142,695 | (299,239) |
Loss on extinguishment of debt | 0 | (77,610) |
Interest expense | (7,589) | (5,731) |
Total Other Income (Expense), net | 93,945 | (459,308) |
Net loss before provision for income taxes | (352,548) | (859,173) |
Net Loss | (352,548) | (859,173) |
Deemed dividend on preferred stock | (141,461) | (92,771) |
Net loss attributable to common stockholders | $ (494,009) | $ (951,944) |
Basic and Diluted Loss per Common Share | $ 0 | $ (0.01) |
Weighted Average Number of Common Shares Outstanding | 1,213,107,543 | 100,807,119 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders Deficit (Unaudited) - USD ($) | Total | Redeemable Convertible Preferred Stock Series A [Member] | Common Stock | Series B, Preferred Share | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Subscription Receivable |
Balance, shares at Dec. 31, 2019 | 160,600 | 74,242,196 | |||||
Balance, amount at Dec. 31, 2019 | $ (859,202) | $ 31,927 | $ 74,242 | $ 0 | $ 10,697,216 | $ (11,630,660) | |
Shares of common stock issued for cash, shares | 26,750,000 | ||||||
Shares of common stock issued for cash, amount | 151,250 | $ 0 | $ 26,750 | $ 0 | 124,500 | 0 | |
Shares of Series A preferred stock issued for cash, net of costs and discounts, shares | 47,300 | ||||||
Shares of Series A preferred stock issued for cash, net of costs and discounts, amount | 0 | $ 1,608 | $ 0 | $ 0 | 0 | 0 | |
Issuance of Series B preferred stock, shares | 1,000,000 | ||||||
Issuance of Series B preferred stock, amount | 277,543 | $ 0 | $ 0 | $ 1,000 | 276,543 | 0 | |
Conversion of Series A preferred stock to common stock, shares | (107,700) | 81,700,258 | |||||
Conversion of Series A preferred stock to common stock, amount | 94,364 | $ (21,411) | $ 81,700 | $ 0 | 103,693 | (91,029) | |
Accrued dividends on Series A preferred stock | (1,742) | $ 1,742 | $ 0 | $ 0 | 0 | (1,742) | |
Shares of common stock for conversion of convertible notes, shares | 95,216,504 | ||||||
Shares of common stock for conversion of convertible notes, amount | 270,970 | $ 0 | $ 95,217 | $ 0 | 175,753 | 0 | |
Stock-based compensation | 14,906 | 0 | 0 | 0 | 14,906 | 0 | |
Net loss | (859,173) | $ 0 | $ 0 | $ 0 | 0 | (859,173) | |
Balance, shares at Mar. 31, 2020 | 100,200 | 277,908,958 | 1,000,000 | ||||
Balance, amount at Mar. 31, 2020 | (911,084) | $ 13,866 | $ 277,909 | $ 1,000 | 11,392,611 | (12,582,604) | |
Balance, shares at Dec. 31, 2020 | 186,450 | 1,192,192,158 | 1,000,000 | ||||
Balance, amount at Dec. 31, 2020 | (923,017) | $ 51,907 | $ 1,192,192 | $ 1,000 | 13,068,978 | (15,185,187) | $ 0 |
Shares of common stock issued for cash, shares | 21,776,961 | ||||||
Shares of common stock issued for cash, amount | 56,555 | $ 0 | $ 21,777 | $ 0 | 86,600 | 0 | (51,822) |
Issuance of Series B preferred stock, shares | 500,000 | ||||||
Issuance of Series B preferred stock, amount | 278,447 | $ 0 | $ 0 | $ 500 | 277,947 | 0 | 0 |
Net loss | (352,548) | $ 0 | $ 0 | $ 0 | 0 | (352,548) | 0 |
Shares of Series A preferred stock for cash, net of costs and discounts, shares | 139,700 | ||||||
Shares of Series A preferred stock for cash, net of costs and discounts, amount | (63,451) | $ 10,723 | $ 0 | $ 0 | 0 | (63,451) | 0 |
Conversion of Series A preferred shares to common stock, shares | (105,600) | 14,181,071 | |||||
Conversion of Series A preferred shares to common stock, amount | 131,538 | $ (49,323) | $ 14,181 | $ 0 | 173,634 | (56,277) | 0 |
Accrued dividends on Series A preferred stock | (21,733) | $ 21,733 | $ 0 | $ 0 | 0 | (21,733) | 0 |
Shares of common stock issued for accrued expenses, shares | 3,243,785 | ||||||
Shares of common stock issued for accrued expenses, amount | 16,543 | $ 0 | $ 3,244 | $ 0 | 13,299 | 0 | 0 |
Balance, shares at Mar. 31, 2021 | 220,550 | 1,231,393,975 | 1,500,000 | ||||
Balance, amount at Mar. 31, 2021 | $ (877,666) | $ 35,040 | $ 1,231,394 | $ 1,500 | $ 13,620,458 | $ (15,679,196) | $ (51,822) |
Condensed Consolidated Interi_4
Condensed Consolidated Interim Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash Flows from Operating Activities | ||
Net loss | $ (352,548) | $ (859,173) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Accretion of discounts on convertible debentures | 41,161 | 76,728 |
Change in fair value of derivative liabilities | (142,695) | 299,239 |
Loss on extinguishment of debt | 0 | 77,610 |
Shares issued for services | 0 | 4,750 |
Stock-based compensation | 278,447 | 292,449 |
Changes in operating assets and liabilities: | ||
Accounts and other receivables | 13,330 | 1,034 |
Inventory | (10,098) | 1,843 |
Accounts payable and accrued liabilities | (26,473) | (53,688) |
Deferred revenue | (11,410) | (32,043) |
Net Cash Used in Operating Activities | (210,286) | (191,250) |
Cash Flows from Financing Activities | ||
Repayment of notes payable and convertible debentures | 0 | (50,000) |
Proceeds from issuance of common stock | 56,555 | 151,250 |
Proceeds from notes payable and convertible debentures, net | 0 | 50,000 |
Proceeds from issuance of preferred stock, net | 127,000 | 40,000 |
Net Cash Provided by Financing Activities | 183,555 | 191,250 |
Change in Cash | (26,731) | 0 |
Cash, Beginning of Period | 26,731 | 0 |
Cash, End of Period | 0 | 0 |
Non-cash Investing and Financing Activities: | ||
Subscription receivable | 51,822 | 0 |
Conversion of notes payable and accrued interest: | ||
Fair value of common shares issued | 0 | 270,966 |
Derecognition of notes payable and accrued interest | 0 | (83,253) |
Derecognition of unamortized discount | 0 | 61,860 |
Derecognition of derivative liabilities | 0 | (171,962) |
Conversion of preferred stock | ||
Fair value of common shares issued | 187,815 | 185,392 |
Derecognition of preferred stock | (109,824) | (123,459) |
Derecognition of unamortized discount | 60,501 | 102,048 |
Derecognition of derivative liabilities | (82,216) | (77,693) |
Deemed dividend | (56,276) | (91,029) |
Discount related to issuance of preferred stock | 116,277 | 41,392 |
Conversion of accrued expenses | 16,543 | |
Deemed dividends on preferred stock (excluding conversions) | $ 85,184 | $ (1,742) |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2021 | |
Organization and Description of Business | |
1. Organization and Description of Business | IGEN Networks Corp. (“IGEN”, the “Company”, “we”, “our”) was incorporated in the State of Nevada on November 14, 2006, under the name of Nurse Solutions Inc. On September 19, 2008, the Company changed its name to Sync2 Entertainment Corporation and traded under the symbol SYTO. On September 15, 2008, the Company became a reporting issuer in British Columbia, Canada. On May 26, 2009, the Company changed its name to IGEN Networks Corp. On March 25, 2015, the Company was listed on the Canadian Securities Exchange (CSE) under the trading symbol IGN and the Company became a reporting Venture Issuer in British Columbia and Ontario, Canada. The Company’s principal business is the development and marketing of software services for the management and protection of commercial and consumer vehicle assets along with driving behavior and profile of these assets. The software services are delivered from AWS Cloud infrastructure over wireless networks and accessed from mobile or desktop devices. The software services are marketed to automotive dealers, financial institutions, governments, and direct-to-consumer markets through the Company’s commercial and consumer brands. Going Concern The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has experienced recurring losses from operations, has negative operating cash flows since inception, has a working capital deficit of $1,042,506 and an accumulated deficit of $15,679,196 as of March 31, 2021, and is dependent on its ability to raise capital from stockholders or other sources to sustain operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Ultimately, the Company plans to achieve profitable operations through the increase in revenue base and successfully grow its operations organically or through acquisitions. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Summary of Significant Accounting Policies | |
2. Summary of Significant Accounting Policies | Basis of Presentation and Consolidation These consolidated financial statements and related notes include the records of the Company and the Company’s wholly-owned subsidiary, Nimbo Tracking LLC which is formed in the USA. The condensed consolidated balance sheet as of December 31, 2020, which has been derived from audited consolidated financial statements, and these unaudited condensed consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), and include all assets, liabilities, revenues and expenses of the Company and its wholly-owned subsidiary. All material intercompany transactions and balances have been eliminated. These interim unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020. Certain information required by U.S. GAAP has been condensed or omitted in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The results for the three month period ended March 31, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2021, or for any future period. Use of Estimates The preparation of these condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to allowance for doubtful accounts, valuation of inventory, the useful life and recoverability of equipment, impairment of goodwill, valuation of notes payable and convertible debentures, fair value of stock-based compensation and derivative liabilities, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Cash and Cash Equivalents The Company considers all highly liquid instruments purchased with an original maturity of three months or less at the time of acquisition to be cash equivalents. Accounts Receivable Accounts receivable are recognized and carried at the original invoice amount less an allowance for expected uncollectible amounts. Inherent in the assessment of the allowance for doubtful accounts are certain judgments and estimates including, among others, the customer’s willingness or ability to pay, the Company’s compliance with customer invoicing requirements, the effect of general economic conditions and the ongoing relationship with the customer. Accounts with outstanding balances longer than the payment terms are considered past due. We do not charge interest on past due balances. The Company writes off trade receivables when all reasonable collection efforts have been exhausted. Bad debt expense is reflected as a component of general and administrative expenses in the consolidated statements of operations. As of March 31, 2021 and December 31, 2020, the allowance for doubtful accounts was approximately $6,000 and $22,000, respectively. Inventory Inventory consists of vehicle tracking and recovery devices and is comprised entirely of finished goods that can be resold. Inventory is stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out (FIFO) basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and selling costs. There was no provision for inventory impairment recorded as of March 31, 2021 and December 31, 2020. Equipment Office equipment, computer equipment, and software are recorded at cost. Depreciation is provided annually at rates and methods over their estimated useful lives. Management reviews the estimates of useful lives of the assets every year and adjusts them on prospective basis, if needed. All equipment was fully depreciated as of December 31, 2019. For purposes of computing depreciation, the method of depreciating equipment is as follows: Computer equipment 3 years straight-line Office equipment 5 years straight-line Software 3 years straight-line Goodwill Goodwill represents the excess of the acquisition price over the fair value of identifiable net assets acquired. Goodwill is allocated at the date of the business combination. Goodwill is not amortized, but is tested for impairment annually on December 31 of each year or more frequently if events or changes in circumstances indicate the asset may be impaired. These events and circumstances may include a significant change in legal factors or in the business climate, a significant decline in the Company’s share price, an adverse action of assessment by a regulator, unanticipated competition, a loss of key personnel, significant disposal activity and the testing of recoverability for a significant asset group. Goodwill impairment is measured as the amount by which a reporting unit’s carrying value exceeds its fair value. The Company has only one reporting unit. Therefore, all of the Company’s goodwill relates to that reporting unit, and at March 31, 2021 and December 31, 2020, the carrying value for that reporting unit is negative. Impairment of Long-lived Assets The Company reviews long-lived assets, such as equipment, for impairment whenever events or changes in the circumstances indicate that the carrying value may not be recoverable. If the total of the estimated undiscounted future cash flows is less than the carrying value of the asset, an impairment loss is recognized for the excess of the carrying value over the fair value of the asset during the year the impairment occurs. Financial Instruments In accordance with Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” the Company is to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. See Note 4 for fair value measurement information related to the Company’s derivative liabilities. The fair values of cash and cash equivalents, accounts and other receivables, restricted cash, and accounts payable and accrued liabilities, approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Foreign currency transactions are primarily undertaken in Canadian dollars. The fair value of cash and cash equivalents is determined based on “Level 1” inputs and the fair value of derivative liabilities is determined based on “Level 3” inputs. The recorded values of notes payable, approximate their current fair values because of their nature and respective maturity dates or durations. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility to these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk. Financial instruments that potentially subject the Company to concentrations of credit risk consists of cash. The Company places its cash and cash equivalents in what it believes to be credit-worthy financial institutions. Revenue Recognition and Deferred Revenue We recognize revenue in accordance with ASC 606, “Revenue from Contracts with Customers”, using the five-step model, including (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue in accordance with U.S. GAAP. Title and risk of loss generally pass to our customers upon delivery, as we have insurance for lost shipments. In limited circumstances where either title or risk of loss pass upon destination or acceptance or when collection is not reasonably assured, we defer revenue recognition until such events occur. We derive substantially all our revenues from the sale of products and services combined into one performance obligation. Product revenue includes the shipment of product according to the agreement with our customers. Service revenue include vehicle tracking services and customer support (technical support), installations and consulting. A contract usually includes both product and services. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. Performance obligations include, but are not limited to, pass-thru harnesses and vehicle tracking services. Almost all of our revenues are derived from customers located in United States of America in the auto industry. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices are typically estimated based on observable transactions when these services are not sold on a standalone basis. At contract inception, an assessment of the goods and services promised in the contracts with customers is performed and a performance obligation is identified for each distinct promise to transfer to the customer a good or service (or bundle of goods or services). To identify the performance obligations, the Company considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. Revenue is recognized when our performance obligation has been met. The Company considers control to have transferred upon delivery because the Company has a present right to payment at that time, the Company has transferred use of the asset, and the customer is able to direct the use of, and obtain substantially all of the remaining benefits from, the asset. For arrangements under which the Company provides vehicle tracking services, the Company satisfies its performance obligations as those services are performed whereby the customer simultaneously receives and consumes the benefits of such services under the agreement. Revenues are recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company provides product warranties with varying lengths of time and terms. The product warranties are considered to be assurance-type in nature and do not cover anything beyond ensuring that the product is functioning as intended. Based on the guidance in ASC 606, assurance-type warranties do not represent separate performance obligations. The Company has historically experienced a low rate of product returns under the warranty program. Management assesses the business environment, customers’ financial condition, historical collection experience, accounts receivable aging, and customer disputes to determine whether collectability is reasonably assured. Revenue relating to the sale of service fees on its vehicle tracking and recovery services is recognized over the life of the contact. The service renewal fees are offered in terms ranging from 12 to 36 months and are generally payable upon delivery of the vehicle tracking devices or in full upon renewal. Deferred revenues are recorded net of contract assets when cash payments are received from customers in advance of the Company’s performance. Contract assets represent the costs of (1) commission costs, (2) installation costs, and (3) the underlying hardware to enable the Company to perform on its contract with customers and are amortized using the same method and term as deferred revenues. As of March 31, 2021 and December 31, 2020, deferred revenues, net of contract assets totaled $127,402 and $138,812, respectively, and contract assets totaled $67,410 and $66,022, respectively. Any revenue that has been deferred and is expected to be recognized beyond one year is classified as deferred revenue, net of current portion. During the three months ended March 31, 2021, the Company recorded additions to deferred revenues of $60,380 and recognized total revenues of $70,401 through the amortization of deferred revenues. During the three months ended March 31, 2021, the Company recognized revenues of $60,351 related to deferred revenues outstanding as of December 31, 2020 as the services were performed. Financing Costs and Debt Discount Financing costs and debt discounts are recorded as reductions to the carrying value of notes payable and convertible debentures. Amortization of financing costs and the debt discounts is calculated using the effective interest method over the term of the debt and is recorded as interest expense in the consolidated statement of operations. Income Taxes Deferred income taxes are provided on the asset and liability method whereby deferred income tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred income tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred income tax assets will not be realized. Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Stock-based Compensation The Company accounts for stock-based payments in accordance with stock-based payment accounting guidance which requires all stock-based payments to be recognized based upon their fair values. The fair value of stock-based awards is estimated at the grant date using the Black-Scholes Option Pricing Model and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period. The determination of fair value using the Black-Scholes Option Pricing Model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility, risk-free interest rate, expected dividends and projected employee stock option exercise behaviors. The Company accounts for forfeitures of unvested awards as they occur. Derivative Financial Instruments The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net cash settlement or settlement in our own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC Topic 815-40 "Contracts in Entity's Own Equity." The Company classifies as assets or liabilities any contracts that require net-cash settlement including a requirement to net cash settle the contract if an event occurs and if that event is outside our control or give the counterparty a choice of net-cash settlement or settlement in shares. The Company assesses classification of its free-standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. Loss Per Share Basic earnings (loss) per share are computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted earnings per share give effect to all dilutive potential common shares outstanding during the period including stock options and warrants, using the treasury stock method, and convertible debentures, using the if-converted method. In computing diluted earnings (loss) per share, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted earnings (loss) per share exclude all potentially issuable shares if their effect is anti-dilutive. Because the effect of conversion of the Company’s dilutive securities is anti-dilutive, diluted loss per share is the same as basic loss per share for the periods presented. As of March 31, 2021 and 2020, the Company has 220,798,603 and 447,746,410 potentially dilutive shares outstanding, respectively. Recent Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815 - 40)” |
Convertible Debentures and Note
Convertible Debentures and Notes Payable | 3 Months Ended |
Mar. 31, 2021 | |
Convertible Debentures and Notes Payable | |
3. Convertible Debentures and Notes Payable | On May 17, 2019, the Company entered into a Convertible Promissory Note (“Promissory Note”) with Crown Bridge Partners, LLC (the “Holder”) for a total principal amount of up to $150,000 with cash proceeds of up to $124,500, resulting in an original issue discount of up to $25,500. The Promissory Note bears interest at 7% per annum (with the understanding that the first 12 months of interest of each tranche will be guaranteed). The maturity date is 18 months from the effective date of each payment. The Conversion Price, as defined in the agreement, is the lesser of (i) the lowest Trading Price (as defined below) during the previous 25 trading day period ending on the latest complete trading day prior to the date of this Promissory Note or (ii) the Variable Conversion Price (as defined below). The Variable Conversion Price means the lowest one Trading Price (as defined below) for the common stock during the 25 Trading Day period ending on the last complete Trading Day prior to the Conversion Date. Trading Price means, for any security as of any date, the lesser of the (i) lowest traded price and (ii) lowest closing bid price. Based on the Company’s examination of the conversion feature and the relative accounting guidance, the Company has determined that the conversion feature should be treated as a derivative liability for accounting purposes. Additionally, if at any time while the Promissory Note is outstanding, the Conversion Price is equal to or lower than $0.025, then an additional $10,000 will be automatically added to the principal balance of each tranche funded under the Note. During the quarter ended June 30, 2019, $10,000 was added to the principal balance for the first tranche. In connection with the Promissory Note, the Company also entered into a Securities Purchase Agreement with the Holder which states that the Company will also issue to the Holder a warrant to purchase an amount of shares of its common stock equal to 50% of the face value of each respective tranche divided by $0.10 (for illustrative purposes, the first tranche face value is equal to $50,000, which resulted in the issuance of a warrant to purchase 250,000 shares of the Company’s common stock). Per the terms of the Common Stock Purchase Warrant agreement, on May 17, 2019, the Company issued a warrant to purchase 250,000 shares of common stock with an Exercise Price of $0.10 subject to adjustment (standard anti-dilution features). The agreement contains a down-round provision that automatically resets the exercise price of the warrant to a new exercise price that is equal to the per share price of common stock subsequently issued (including conversions of debt and preferred stock). Upon the lowing of the exercise price, the number of warrants will be increased such that the total proceeds upon exercise is the same amount (see Note 7). If the Market Price of one shares of common stock is greater than the Exercise Price, the Holder may elect to receive Warrant Shares pursuant to cashless exercise, in lieu of cash exercise, per a defined formula in the agreement. During the quarter ended June 30, 2019, the Company received $40,000 in net cash proceeds, after paying $1,500 of direct funding costs. The related principal amount due for the first tranche (“First Tranche”) was $50,000. For the first tranche, using the Binomial Lattice Model, the Company computed the estimated fair value of the embedded conversion feature to be $100,000 and recorded a related derivative liability. Related to the derivative liability, the bonus interest, and the direct financing costs, the Company recorded a full debt discount of $60,000 for the Promissory Note, which will be amortized to interest expense over the term of the Promissory Note using the effective interest method and an additional $50,000 directly to interest expense. On December 9, 2019, the Holder converted a portion of the Promissory Note into shares of common stock. The Holder received 300,000 shares of common stock for the conversion of principal, accrued interest, and fees totaling $7,165. During the quarter ended September 30, 2019, the Company received an aggregate of $213,250 in net cash proceeds, after paying $6,750 of direct funding costs, from three note holders under the same terms as the Promissory Note. The related principal amount due for the convertible debt instruments entered into during the quarter ended September 30, 2019 was $255,000. Using the Binomial Lattice Model, the Company computed the estimated fair value of the embedded conversion features to be approximately $354,000 and recorded the related derivative liabilities. Related to the derivative liabilities, the bonus interest, and the direct financing costs, the Company recorded full debt discounts totaling approximately $255,000 for the notes which will be amortized to interest expense over the term of the notes using the effective interest method and an additional approximately $106,000 directly to interest expense. As the Conversion Price fell below $0.025 per share, during the quarter ended September 30, 2019, $10,000 was added to the principal balance on one of the notes (per the terms of that note). Related to the notes issued during the quarter ended September 30, 2019, the Company issued warrants to purchase a total of 525,000 shares of common stock with an Exercise Price of $0.10 subject to adjustment (standard anti-dilution features). If the Market Price of one shares of common stock is greater than the Exercise Price, the Holder may elect to receive Warrant Shares pursuant to cashless exercise, in lieu of cash exercise, per a defined formula in the agreement. On October 1, 2019, the Company received $37,500 in net cash proceeds from a note holder under the same terms as the Promissory Note. The related principal amount due for the convertible debt instrument was $44,000. In connection with the note, the Company issued 100,000 shares of common stock, which were valued at the market price on the date of issuance of $0.05 per share. Using the Binomial Lattice Model, the Company computed the estimated fair value of the embedded conversion feature to be approximately $29,000 and recorded a related derivative liability. Related to the derivative liability, the shares issued, the bonus interest, and the direct financing costs, the Company recorded a debt discount totaling $41,000 for the note, which will be amortized to interest expense over the term of the note using the effective interest method. On June 19, 2020, the Company received $19,250 in net cash proceeds from a note holder under the same terms as the Promissory Note. The related principal amount due for the convertible debt instrument was $25,000. Using the Binomial Lattice Model, the Company computed the estimated fair value of the embedded conversion feature to be approximately $142,000 and recorded a related derivative liability for that amount and a charge to interest expense of approximately $122,000. Related to the derivative liability, the shares issued, the bonus interest, and the direct financing costs, the Company recorded a debt discount totaling $25,000 for the note, which is being amortized to interest expense over the term of the note using the effective interest method. On July 10, 2020, the Company received $19,250 in net cash proceeds from a note holder under the same terms as the Promissory Note. The related principal amount due for the convertible debt instrument was $25,000. Using the Binomial Lattice Model, the Company computed the estimated fair value of the embedded conversion feature to be approximately $61,000 and recorded a related derivative liability for that amount and a charge to interest expense of approximately $42,000. Related to the derivative liability, the shares issued, the bonus interest, and the direct financing costs, the Company recorded a debt discount totaling $25,000 for the note, which is being amortized to interest expense over the term of the note using the effective interest method. During the three months ended March 31, 2020, the holders of the convertible notes converted a total of $83,253 of principal, interest and fees for a total of 95,216,504 shares of common stock. Related to these conversions during the quarter ended March 31, 2020, the Company recorded a reduction of the associated derivative liability for the conversion features of $171,962 and a reduction of the debt discount of $61,860 as components of the gain on settlement of debt. During the three months ended March 31, 2020, the Company recorded $76,728 of interest expense related to the amortization of the debt discounts. During the three months ended March 31, 2020 the Company borrowed $50,000 from a shareholder under the terms of a note payable bearing interest of 8% per annum. The note was repaid with interest (totaling $922) during the three months ended March 31, 2020. On May 4, 2020, the Company entered into a Paycheck Protection Program (“PPP”) Loan with a principal amount of $59,949 through a financial institution under the PPP administered by the SBA and established as part of the CARES Act. The PPP Loan bears interest at 1.0% per annum and matures on May 4, 2022 with the first six months of interest and principal payments deferred. The amount borrowed under the PPP Loan is guaranteed by the U.S. Small Business Administration (“SBA”) and is eligible for forgiveness in an amount equal to the sum of the eligible costs, including payroll, benefits, rent and utilities, incurred by the Company during the 24-week period beginning on the date the Company received the proceeds. The PPP Loan contains customary events of default, and the occurrence of an event of default may result in a claim for the immediate repayment of all amounts outstanding under the PPP Loan. On July 7, 2020, the Company entered into a secured disaster loan with the SBA with a principal amount of $150,000. The SBA loan bears interest at 3.75% per annum and matures in July 2050. The Company is required to make monthly principal and interest payments of $731 beginning in July 2021. As of March 31, 2021 long-term debt matures as follows Year Ending Notes Payable Convertible Notes Total 2021 (months remaining) $ 33,033 $ 36,082 $ 69,115 2022 33,758 202,584 236,342 2023 3,327 - 3,327 2024 3,454 - 3,454 2025 3,586 - 3,586 Thereafter 137,560 - 137,560 $ 214,718 $ 238,666 $ 453,384 |
Derivative Liabilities
Derivative Liabilities | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Liabilities | |
4. Derivative Liabilities | During the three months ended March 31, 2021 and during the year ended December 31, 2020, the Company had outstanding convertible debentures with variable exercise prices based on market rates (see Note 3). During the three months ended March 31, 2021 and during year ended December 31, 2020, the Company also issued series A preferred stock with variable exercise prices based on market rates (see Note 6). The Company records the fair value of the conversion features with variable exercise prices based on future market rates in accordance with ASC 815. The fair value of the derivative liabilities is revalued on each balance sheet date with corresponding gains and losses recorded in the consolidated statements of operations. The Company uses a multi-nominal lattice model to fair value the derivative liabilities. The following inputs and assumptions were used to value the conversion features outstanding during the three months ended March 31, 2021, assuming no expected dividends: March 31, 2021 Expected volatility 135 - 275 % Risk free interest rate 0.05 – 0.15 % Expected life (in years) 0 - 1.50 The following table presents the Company’s embedded conversion features of its convertible debt and preferred stock measured at fair value on a recurring basis as of March 31, 2021. Level 3 Carrying Value as of March 31, 2021 Derivative liabilities: Embedded conversion feature - convertible debt $ 68,835 Embedded conversion feature - preferred stock 75,757 $ 144,592 The following table provides a reconciliation of the beginning and ending balances for the Company’s derivative liabilities measured at fair value using Level 3 inputs: For The Three Months Ended March 31, 2021 Embedded Conversion Features - Convertible Debt Balances, as of the beginning of the year $ 97,024 Derivative liabilities recorded upon issuance of convertible debt - Derivative liabilities derecognized upon debt conversion - Net changes in fair value included in net loss (28,189 ) Ending balance $ 68,835 Embedded Conversion Features - Preferred Stock Balances, as of the beginning of the year $ 92,751 Derivative liabilities recorded upon issuance of preferred stock 179,728 Derivative liabilities derecognized upon preferred stock conversion (82,216 ) Net changes in fair value included in net loss (114,506 ) Ending balance $ 75,757 Total ending balance $ 144,592 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions | |
5. Related Party Transactions | (a) During the three months ended March 31, 2021 and 2020, the Company incurred approximately $40,000 and $33,000, respectively, in management and consulting fees with an officer and an entity controlled by him. As of March 31, 2021 and December 31, 2020, the Company owed approximately $9,000 to directors and officers and a company controlled by a director, which is included in accounts payable and accrued liabilities. The amounts owed are unsecured, non-interest bearing, and due on demand. (b) During the three months ended March 31, 2021 and 2020, the Company incurred approximately $0 and $10,000, respectively, in purchases of hardware from a vendor controlled by a director of the Company. As of March 31, 2021 and December 31, 2020, the amounts owed to this related-party vendor were approximately $12,000. (c) During the three months ended March 31, 2021, the Company issued 3,243,785 shares of common stock for the conversion of $16,543 of accrued expenses owed to the VP and General Manager. (d) During the three months ended March 31, 2021 and 2020, the Company recorded approximately $4,000 and $0, respectively, to the VP and General Manager for rent and other office expenses. As of March 31, 2021 and December 31, 2020, the amounts owed to the VP and General Manager were approximately $2,000 and $0, respectively. |
Redeemable Preferred Stock and
Redeemable Preferred Stock and Stockholders Deficit | 3 Months Ended |
Mar. 31, 2021 | |
Redeemable Preferred Stock and Stockholders Deficit | |
6. Redeemable Preferred Stock and Stockholders' Deficit | Preferred Stock The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.001 per share. The Company has designated 1,250,000 of these shares as Series A Convertible Preferred Stock and 2,000,000 of these shares as Series B Super Voting Preferred Stock. On February 1, 2021, the Company entered into a Series A Preferred Stock Purchase Agreement with an investor. The Company issued 58,850 shares for proceeds of $53,500. On March 1, 2021, the Company entered into a Series A Preferred Stock Purchase Agreements with an investor. The Company issued 80,850 shares for proceeds of $73,500. Rights and Privileges of the Series A Preferred Stock ☐ Voting ☐ Dividends ☐ Redemption ☐ Mandatory Redemption ☐ Conversion ☐ Default Adjustments Based on the terms of the conversion feature, the Company could be required to issue an infinite number of shares of common stock. As such, the Company has determined the conversion feature to be a derivative liability under relevant accounting guidance. The Company estimated the fair value of the conversion feature using the Binomial Lattice Model on the date of issuance, on the date of each conversion notice, and remeasures the fair value at each reporting period. During the three months ended March 31, 2021, the Company issued 139,700 shares of series A preferred stock for proceeds of $127,000. Related to these issuances, the Company recorded derivative liabilities of $179,728 and discounts to the preferred stock of $116,277, which is being amortized to deemed dividends over the redemption period. Also related to these issuances the Company recorded deemed dividends of $63,451. During the three months ended March 31, 2021, the holder of the series A preferred stock converted 105,600 shares of series A preferred stock and accrued dividends into 14,181,071 shares of common stock. Related to these conversions during the three months ended March 31, 2021, the Company recorded a reduction of the associated derivative liability for the conversion features of $82,216 and a reduction of the preferred stock discount of $60,501 and $56,276 of deemed dividend. Rights and Privileges of the Series B Preferred Stock In February 2020 and in February 2021, the Company issued 1,000,000 and 500,000 shares, respectively of its Series B Super Voting Preferred Stock. Each share of Series B preferred stock has voting rights equal to 500 shares of common stock, is not entitled to receive dividends, is not convertible into shares of common stock. If the holder of the Series B preferred stock ceases to be a Board Member, the Company will repurchase any Series B preferred stock from the holder for a price of $0.001 per share. If the holder of the Series B preferred stock proposes to transfer any shares of Series B preferred stock, the Company will have 90 days to repurchase the shares for a price of $0.001 per share. The grant date fair value of the Series B preferred stock issued during the three months ended March 31, 2021 and 2020 was $278,447 and $277,543, respectively and was recorded to stock-based director compensation expense in the accompanying condensed consolidated statements of operations. Common Stock 2021 During the three months ended March 31, 2021, the Company sold a total of 21,776,961 shares of common stock for proceeds of $108,377, of which $51,822 has been recorded as a subscription receivable as of March 31, 2021 and was collected in April 2021. During the three months ended March 31, 2021, the Company issued 3,243,785 shares of common stock for the conversion of $16,543 of accrued expenses owed to the VP and General Manager. During the three months ended March 31, 2021, the Company issued 14,181,071 shares of common stock for the conversion of Series A preferred stock and accrued dividends. 2020 During the three months ended March 31, 2020, the Company sold a total of 26,750,000 shares of common stock for proceeds of $151,250. During the three months ended March 31, 2020, the Company issued a total of 176,916,762 shares of common stock for the conversion of debt, accrued interest and fees, and the conversion of series A preferred stock and accrued dividends. |
Share Purchase Warrants
Share Purchase Warrants | 3 Months Ended |
Mar. 31, 2021 | |
Share Purchase Warrants | |
7. Share Purchase Warrants | The following table summarizes the continuity schedule of the Company’s share purchase warrants: Number of warrants Weighted average exercise price Balance, December 31, 2020 166,517,918 - Issued - - Adjusted for triggered down-round provisions - - Exercised - - Expired - - Balance, March 31, 2021 166,517,918 $ - As of March 31, 2021, the following share purchase warrants were outstanding: Number of warrants outstanding Exercise price Expiration date 2,222,222 $ 0.03 December 2, 2024 163,265,304 $ 0.00 September 23, 2024 980,392 $ 0.15 December 2, 2021 50,000 $ 0.20 January 2, 2022 166,517,918 During the year ended December 31, 2020, the Company recognized the triggering of the down-round provisions of certain warrants associated with the convertible debt instruments issued in 2019. As a result, the reset exercise price increased the number of warrant shares accordingly. As of December 31, 2020, the new exercise price for the warrants is $0.000245 per share. Per the relevant accounting guidance, the Company valued the warrants before and after each triggering event and recorded the total increase in value as a deemed dividend to the warrant holder with an offset to additional paid in capital. For the year ended December 31, 2020, the increase in value of the warrants due to the triggering events totaled $370,726 and was properly included in the Company’s earnings per share amounts on the accompanying statement of operations. On August 21, 2020, the Company modified 2,222,222 warrants held by two investors. Per the terms of the modifications, the Company reduced the exercise price from $0.23 to $0.03 and extended the term of the warrants to now expire on December 2, 2024. In accordance with relevant accounting guidance, the Company valued the warrants before and after modification. There was no change in valuation due to the modifications. |
Stock Options
Stock Options | 3 Months Ended |
Mar. 31, 2021 | |
Stock Options | |
8. Stock Options | The following table summarizes the Company’s stock options: Number of options Weighted average exercise price Aggregate intrinsic value Balance, December 31, 2020 3,250,000 $ 0.09 Granted - - Exercised - - Cancelled / forfeited - - Balance, March 31, 2021 3,250,000 $ 0.09 $ - Outstanding Exercisable Range of exercise prices Number of shares Weighted average remaining contractual life (years) Weighted average exercise price Number of shares Weighted average exercise price $ 0.04 1,500,000 3.1 0.04 1,500,000 0.04 $ 0.08 250,000 1.5 0.08 250,000 0.08 $ 0.13 1,425,000 1.1 0.13 1,425,000 0.13 $ 0.16 75,000 0.4 0.16 75,000 0.16 3,250,000 2.1 $ 0.09 3,250,000 $ 0.09 During the three months ended March 31, 2021, the Company did not issue any options to employees. During the three months ended March 31, 2021 and 2020, the Company recorded $0 and $14,906, respectively, of stock-based compensation expense related to stock option grants. As of March 31, 2021, the Company had no unrecognized compensation expense. |
Segments
Segments | 3 Months Ended |
Mar. 31, 2021 | |
9. Segments | The Company has one reportable segment: vehicle tracking and recovery solutions. The Company allocates resources to and assesses the performance of each reportable segment using information about its revenue and operating income (loss). The Company does not evaluate operating segments using discrete asset information. Segmentation by geographical location is not presented as all revenues are earned in U.S. Total assets by segment are not presented as that information is not used to allocate resources or assess performance at the segment level and is not reviewed by the Chief Operating Decision Maker of the Company. |
Risk and Uncertainities
Risk and Uncertainities | 3 Months Ended |
Mar. 31, 2021 | |
Risk and Uncertainities | |
10. Risks & Uncertainties | The Company extends credit to customers on an unsecured basis in the normal course of business. The Company’s policy is to perform an analysis of the recoverability of its receivables at the end of each reporting period and to establish allowances where appropriate. The Company analyzes historical bad debts and contract losses, customer concentrations, and customer credit-worthiness when evaluating the adequacy of the allowances. During the three months ended March 31, 2021 and 2020, the Company had two and three customers which accounted for 84% and 80%, respectively, of total invoiced amounts, which are recorded as deferred revenues and amortized over the related service period to revenues. As of March 31, 2021 and December 31, 2020, the Company had two and three customers, respectively, which accounted for 100% and 99%, respectively, of the net accounts receivable balance. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitment and contingencies | |
11. Commitments and Contingencies | Indemnities and Guarantees We have made certain indemnities and guarantees, under which we may be required to make payments to a guaranteed or indemnified party, in relation to certain transactions. We indemnify our officers and directors to the maximum extent permitted under the laws of the State of Nevada. The duration of these indemnities and guarantees varies and, in certain cases, is indefinite. These indemnities and guarantees do not provide for any limitation of the maximum potential future payments we could be obligated to make. Historically, we have not been obligated to make any payments for these obligations and no liabilities have been recorded for these indemnities and guarantees in the accompanying condensed consolidated balance sheets. Legal Matters In the ordinary course of business, we may face various claims brought by third parties and may, from time to time, make claims or take legal actions to assert our rights, including intellectual property disputes, contractual disputes and other commercial disputes. Any of these claims could subject us to litigation. Management believes there are currently no claims that are likely to have a material effect on our consolidated financial position and results of operations. The Company has filed a lawsuit against a former distributor for breach of contract resulting in losses to the Company estimated to be in excess of $1,000,000. A mandatory settlement date has been set for May 18, 2021. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events | |
12. Subsequent Events | The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the consolidated financial statements are available to be issued. Any material events that occur between the balance sheet date and the date that the consolidated financial statements were available for issuance are disclosed as subsequent events, while the consolidated financial statements are adjusted to reflect any conditions that existed at the balance sheet date. Based upon this review, except as disclosed within the footnotes or as discussed below, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements. Subsequent to March 31, 2021, the Company issued a total of 9,803,922 shares of common stock for cash proceeds of $50,000. Subsequent to March 31, 2021, the Company issued a total of 1,080,412 shares of common stock for the conversion of accrued commissions of $7,860. Subsequent to March 31, 2021, the Company converted debt and accrued interest amounts totaling $9,616 for 1,780,825 shares of common stock. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Summary of Significant Accounting Policies | |
Basic of Presentation and Consolidation | These consolidated financial statements and related notes include the records of the Company and the Company’s wholly-owned subsidiary, Nimbo Tracking LLC which is formed in the USA. The condensed consolidated balance sheet as of December 31, 2020, which has been derived from audited consolidated financial statements, and these unaudited condensed consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), and include all assets, liabilities, revenues and expenses of the Company and its wholly-owned subsidiary. All material intercompany transactions and balances have been eliminated. These interim unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020. Certain information required by U.S. GAAP has been condensed or omitted in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The results for the three month period ended March 31, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2021, or for any future period. |
Use of Estimates | The preparation of these condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to allowance for doubtful accounts, valuation of inventory, the useful life and recoverability of equipment, impairment of goodwill, valuation of notes payable and convertible debentures, fair value of stock-based compensation and derivative liabilities, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
Cash and Cash Equivalents | The Company considers all highly liquid instruments purchased with an original maturity of three months or less at the time of acquisition to be cash equivalents. |
Accounts Receivable | Accounts receivable are recognized and carried at the original invoice amount less an allowance for expected uncollectible amounts. Inherent in the assessment of the allowance for doubtful accounts are certain judgments and estimates including, among others, the customer’s willingness or ability to pay, the Company’s compliance with customer invoicing requirements, the effect of general economic conditions and the ongoing relationship with the customer. Accounts with outstanding balances longer than the payment terms are considered past due. We do not charge interest on past due balances. The Company writes off trade receivables when all reasonable collection efforts have been exhausted. Bad debt expense is reflected as a component of general and administrative expenses in the consolidated statements of operations. As of March 31, 2021 and December 31, 2020, the allowance for doubtful accounts was approximately $6,000 and $22,000, respectively. |
Inventory | Inventory consists of vehicle tracking and recovery devices and is comprised entirely of finished goods that can be resold. Inventory is stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out (FIFO) basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and selling costs. There was no provision for inventory impairment recorded as of March 31, 2021 and December 31, 2020. |
Equipment | Office equipment, computer equipment, and software are recorded at cost. Depreciation is provided annually at rates and methods over their estimated useful lives. Management reviews the estimates of useful lives of the assets every year and adjusts them on prospective basis, if needed. All equipment was fully depreciated as of December 31, 2019. For purposes of computing depreciation, the method of depreciating equipment is as follows: Computer equipment 3 years straight-line Office equipment 5 years straight-line Software 3 years straight-line |
Goodwill | Goodwill represents the excess of the acquisition price over the fair value of identifiable net assets acquired. Goodwill is allocated at the date of the business combination. Goodwill is not amortized, but is tested for impairment annually on December 31 of each year or more frequently if events or changes in circumstances indicate the asset may be impaired. These events and circumstances may include a significant change in legal factors or in the business climate, a significant decline in the Company’s share price, an adverse action of assessment by a regulator, unanticipated competition, a loss of key personnel, significant disposal activity and the testing of recoverability for a significant asset group. Goodwill impairment is measured as the amount by which a reporting unit’s carrying value exceeds its fair value. The Company has only one reporting unit. Therefore, all of the Company’s goodwill relates to that reporting unit, and at March 31, 2021 and December 31, 2020, the carrying value for that reporting unit is negative. |
Impairment of Long-lived Assets | The Company reviews long-lived assets, such as equipment, for impairment whenever events or changes in the circumstances indicate that the carrying value may not be recoverable. If the total of the estimated undiscounted future cash flows is less than the carrying value of the asset, an impairment loss is recognized for the excess of the carrying value over the fair value of the asset during the year the impairment occurs. |
Financial Instruments | In accordance with Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” the Company is to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. See Note 4 for fair value measurement information related to the Company’s derivative liabilities. The fair values of cash and cash equivalents, accounts and other receivables, restricted cash, and accounts payable and accrued liabilities, approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Foreign currency transactions are primarily undertaken in Canadian dollars. The fair value of cash and cash equivalents is determined based on “Level 1” inputs and the fair value of derivative liabilities is determined based on “Level 3” inputs. The recorded values of notes payable, approximate their current fair values because of their nature and respective maturity dates or durations. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility to these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk. Financial instruments that potentially subject the Company to concentrations of credit risk consists of cash. The Company places its cash and cash equivalents in what it believes to be credit-worthy financial institutions. |
Revenue Recognition and Deferred Revenue | We recognize revenue in accordance with ASC 606, “Revenue from Contracts with Customers”, using the five-step model, including (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue in accordance with U.S. GAAP. Title and risk of loss generally pass to our customers upon delivery, as we have insurance for lost shipments. In limited circumstances where either title or risk of loss pass upon destination or acceptance or when collection is not reasonably assured, we defer revenue recognition until such events occur. We derive substantially all our revenues from the sale of products and services combined into one performance obligation. Product revenue includes the shipment of product according to the agreement with our customers. Service revenue include vehicle tracking services and customer support (technical support), installations and consulting. A contract usually includes both product and services. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. Performance obligations include, but are not limited to, pass-thru harnesses and vehicle tracking services. Almost all of our revenues are derived from customers located in United States of America in the auto industry. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices are typically estimated based on observable transactions when these services are not sold on a standalone basis. At contract inception, an assessment of the goods and services promised in the contracts with customers is performed and a performance obligation is identified for each distinct promise to transfer to the customer a good or service (or bundle of goods or services). To identify the performance obligations, the Company considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. Revenue is recognized when our performance obligation has been met. The Company considers control to have transferred upon delivery because the Company has a present right to payment at that time, the Company has transferred use of the asset, and the customer is able to direct the use of, and obtain substantially all of the remaining benefits from, the asset. For arrangements under which the Company provides vehicle tracking services, the Company satisfies its performance obligations as those services are performed whereby the customer simultaneously receives and consumes the benefits of such services under the agreement. Revenues are recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company provides product warranties with varying lengths of time and terms. The product warranties are considered to be assurance-type in nature and do not cover anything beyond ensuring that the product is functioning as intended. Based on the guidance in ASC 606, assurance-type warranties do not represent separate performance obligations. The Company has historically experienced a low rate of product returns under the warranty program. Management assesses the business environment, customers’ financial condition, historical collection experience, accounts receivable aging, and customer disputes to determine whether collectability is reasonably assured. Revenue relating to the sale of service fees on its vehicle tracking and recovery services is recognized over the life of the contact. The service renewal fees are offered in terms ranging from 12 to 36 months and are generally payable upon delivery of the vehicle tracking devices or in full upon renewal. Deferred revenues are recorded net of contract assets when cash payments are received from customers in advance of the Company’s performance. Contract assets represent the costs of (1) commission costs, (2) installation costs, and (3) the underlying hardware to enable the Company to perform on its contract with customers and are amortized using the same method and term as deferred revenues. As of March 31, 2021 and December 31, 2020, deferred revenues, net of contract assets totaled $127,402 and $138,812, respectively, and contract assets totaled $67,410 and $66,022, respectively. Any revenue that has been deferred and is expected to be recognized beyond one year is classified as deferred revenue, net of current portion. During the three months ended March 31, 2021, the Company recorded additions to deferred revenues of $60,380 and recognized total revenues of $70,401 through the amortization of deferred revenues. During the three months ended March 31, 2021, the Company recognized revenues of $60,351 related to deferred revenues outstanding as of December 31, 2020 as the services were performed. |
Financing Costs and Debt Discount | Financing costs and debt discounts are recorded as reductions to the carrying value of notes payable and convertible debentures. Amortization of financing costs and the debt discounts is calculated using the effective interest method over the term of the debt and is recorded as interest expense in the consolidated statement of operations. |
Income Taxes | Deferred income taxes are provided on the asset and liability method whereby deferred income tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred income tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred income tax assets will not be realized. Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. |
Stock-based Compensation | The Company accounts for stock-based payments in accordance with stock-based payment accounting guidance which requires all stock-based payments to be recognized based upon their fair values. The fair value of stock-based awards is estimated at the grant date using the Black-Scholes Option Pricing Model and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period. The determination of fair value using the Black-Scholes Option Pricing Model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility, risk-free interest rate, expected dividends and projected employee stock option exercise behaviors. The Company accounts for forfeitures of unvested awards as they occur. |
Derivative Financial Instruments | The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net cash settlement or settlement in our own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC Topic 815-40 "Contracts in Entity's Own Equity." The Company classifies as assets or liabilities any contracts that require net-cash settlement including a requirement to net cash settle the contract if an event occurs and if that event is outside our control or give the counterparty a choice of net-cash settlement or settlement in shares. The Company assesses classification of its free-standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. |
Loss Per Share | Basic earnings (loss) per share are computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted earnings per share give effect to all dilutive potential common shares outstanding during the period including stock options and warrants, using the treasury stock method, and convertible debentures, using the if-converted method. In computing diluted earnings (loss) per share, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted earnings (loss) per share exclude all potentially issuable shares if their effect is anti-dilutive. Because the effect of conversion of the Company’s dilutive securities is anti-dilutive, diluted loss per share is the same as basic loss per share for the periods presented. As of March 31, 2021 and 2020, the Company has 220,798,603 and 447,746,410 potentially dilutive shares outstanding, respectively. |
Recent Accounting Pronouncements | In August 2020, the FASB issued ASU 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815 - 40)” |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Summary of Significant Accounting Policies | |
Summary of computing depreciation, method of depreciating equipment | Computer equipment 3 years straight-line Office equipment 5 years straight-line Software 3 years straight-line |
Convertible Debentures and No_2
Convertible Debentures and Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Convertible Debentures and Notes Payable | |
Schedule of long term debt | Year Ending Notes Payable Convertible Notes Total 2021 (months remaining) $ 33,033 $ 36,082 $ 69,115 2022 33,758 202,584 236,342 2023 3,327 - 3,327 2024 3,454 - 3,454 2025 3,586 - 3,586 Thereafter 137,560 - 137,560 $ 214,718 $ 238,666 $ 453,384 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Liabilities (Tables) | |
Schedule of assumptions used fair value derivative liabilities | March 31, 2021 Expected volatility 135 - 275 % Risk free interest rate 0.05 – 0.15 % Expected life (in years) 0 - 1.50 |
Summary of fair value of derivative liabilities on a recurring basis | Level 3 Carrying Value as of March 31, 2021 Derivative liabilities: Embedded conversion feature - convertible debt $ 68,835 Embedded conversion feature - preferred stock 75,757 $ 144,592 |
Schedule of derivative liabilities measured at fair value | For The Three Months Ended March 31, 2021 Embedded Conversion Features - Convertible Debt Balances, as of the beginning of the year $ 97,024 Derivative liabilities recorded upon issuance of convertible debt - Derivative liabilities derecognized upon debt conversion - Net changes in fair value included in net loss (28,189 ) Ending balance $ 68,835 Embedded Conversion Features - Preferred Stock Balances, as of the beginning of the year $ 92,751 Derivative liabilities recorded upon issuance of preferred stock 179,728 Derivative liabilities derecognized upon preferred stock conversion (82,216 ) Net changes in fair value included in net loss (114,506 ) Ending balance $ 75,757 Total ending balance $ 144,592 |
Share Purchase Warrants (Tables
Share Purchase Warrants (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share Purchase Warrants | |
Schedule of share purchase warrants | Number of warrants Weighted average exercise price Balance, December 31, 2020 166,517,918 - Issued - - Adjusted for triggered down-round provisions - - Exercised - - Expired - - Balance, March 31, 2021 166,517,918 $ - |
Schedule of share purchase warrants outstanding | Number of warrants outstanding Exercise price Expiration date 2,222,222 $ 0.03 December 2, 2024 163,265,304 $ 0.00 September 23, 2024 980,392 $ 0.15 December 2, 2021 50,000 $ 0.20 January 2, 2022 166,517,918 |
Stock Options (Tables)
Stock Options (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stock Options | |
Schedule of Stock Options Roll Forward | Number of options Weighted average exercise price Aggregate intrinsic value Balance, December 31, 2020 3,250,000 $ 0.09 Granted - - Exercised - - Cancelled / forfeited - - Balance, March 31, 2021 3,250,000 $ 0.09 $ - |
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range | Outstanding Exercisable Range of exercise prices Number of shares Weighted average remaining contractual life (years) Weighted average exercise price Number of shares Weighted average exercise price $ 0.04 1,500,000 3.1 0.04 1,500,000 0.04 $ 0.08 250,000 1.5 0.08 250,000 0.08 $ 0.13 1,425,000 1.1 0.13 1,425,000 0.13 $ 0.16 75,000 0.4 0.16 75,000 0.16 3,250,000 2.1 $ 0.09 3,250,000 $ 0.09 |
Organization and Description _2
Organization and Description of Business (Details Narrative) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Organization and Description of Business (Details Narrative) | ||
Accumulated deficit | $ (15,679,196) | $ (15,185,187) |
Working capital deficit | $ (1,042,506) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Computer Equipment [Member] | |
Property, Plant and Equipment, Depreciation Methods | Straight-line |
Property, Plant and Equipment, Useful Life | 3 years |
Office Equipment [Member] | |
Property, Plant and Equipment, Depreciation Methods | Straight-line |
Property, Plant and Equipment, Useful Life | 5 years |
Software [Member] | |
Property, Plant and Equipment, Depreciation Methods | Straight-line |
Property, Plant and Equipment, Useful Life | 3 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | |
Additional deferred revenue | $ 60,380 | ||
Potentially dilutive shares outstanding | 220,798,603 | 447,746,410 | |
Revenues recognized | $ 70,401 | ||
Deferred revenue | 127,402 | $ 138,812 | |
Allowance for doubtful accounts | 6,000 | 22,000 | |
Contract asset balance [Member] | |||
Deferred revenue | 67,410 | $ 66,022 | |
Deferred revenues outstanding [Member] | |||
Revenues recognized | $ 60,351 |
Convertible Debentures and No_3
Convertible Debentures and Notes Payable (Details Narrative) - USD ($) | Jul. 10, 2020 | Jul. 07, 2020 | May 04, 2020 | Oct. 01, 2019 | Jun. 19, 2020 | Dec. 09, 2019 | May 17, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 |
Convertible notes | $ 83,253 | ||||||||||
Shares of common stock for conversion of convertible notes | 95,216,504 | ||||||||||
Interest expenses | $ 7,589 | $ 5,731 | |||||||||
Loss on settlement of debt | 0 | $ (77,610) | |||||||||
Convertible Notes [Member] | |||||||||||
Interest expenses | 76,728 | ||||||||||
Changes in derivative liability | 171,962 | ||||||||||
Loss on settlement of debt | $ 61,860 | ||||||||||
Promissory Note One [Member] | |||||||||||
Proceeds from notes payable | $ 19,250 | $ 37,500 | |||||||||
Debt discount | 41,000 | ||||||||||
Notes payable | 44,000 | ||||||||||
Derivative liability, embedded conversion feature | $ 29,000 | ||||||||||
Debt conversion, converted instrument, shares issued | 100,000 | ||||||||||
Conversion price | $ 0.05 | $ 0.025 | |||||||||
Promissory Note [Member] | |||||||||||
Proceeds from notes payable | $ 19,250 | ||||||||||
Debt discount | 25,000 | 25,000 | $ 255,000 | $ 60,000 | |||||||
Notes payable | 255,000 | ||||||||||
Derivative liability, embedded conversion feature | 61,000 | 142,000 | 354,000 | 100,000 | |||||||
Debt conversion, converted instrument, shares issued | 300,000 | ||||||||||
Payment of funding cost | 6,750 | 1,500 | |||||||||
First tranche, principal amount | 25,000 | 25,000 | 50,000 | ||||||||
Interest expenses | $ 42,000 | $ 122,000 | 106,000 | $ 50,000 | |||||||
Debt conversion, converted instrument, principal, accrued interest, and fees | $ 7,165 | $ 10,000 | |||||||||
Shareholder [Member] | |||||||||||
Interest rate | 8.00% | ||||||||||
Proceeds from notes payable | $ 50,000 | ||||||||||
Repayment of notes payable | $ 922 | ||||||||||
Crown Bridge Partners, LLC [Member] | Convertible Promissory Note [Member] | |||||||||||
Interest rate | 7.00% | ||||||||||
Debt maturity | The maturity date is 18 months from the effective date of each payment. | ||||||||||
Proceeds from notes payable | $ 124,500 | ||||||||||
Debt discount | 25,500 | ||||||||||
Line of credit, maximum borrowing capacity | $ 150,000 | ||||||||||
Additional proceeding, description | Additionally, if at any time while the Promissory Note is outstanding, the Conversion Price is equal to or lower than $0.025, then an additional $10,000 will be automatically added to the principal balance of each tranche funded under the Note. During the quarter ended June 30, 2019, $10,000 was added to the principal balance for the first tranche. | ||||||||||
SBA Loans [Member] | |||||||||||
Interest rate | 3.75% | ||||||||||
Debt maturity | July 2050 | ||||||||||
Monthly principal and interest payments | $ 731 | ||||||||||
Proceeds from notes payable | $ 150,000 | ||||||||||
PPP Loan [Member] | |||||||||||
Interest rate | 1.00% | ||||||||||
Debt maturity | Matures on May 4, 2022 | ||||||||||
Proceeds from notes payable | $ 59,949 | ||||||||||
Adjustment [Member] | |||||||||||
Issuance of warrants to purchase common stock | 525,000 | ||||||||||
Exercise price | $ 0.10 | ||||||||||
Common Stock Purchase Warrant Agreement [Member] | |||||||||||
Issuance of warrants to purchase common stock | 250,000 | ||||||||||
Exercise price | $ 0.10 |
Convertible Debentures and No_4
Convertible Debentures and Notes Payable (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Notes Payable | $ 33,033 | $ 5,943 |
2023 [Member] | ||
Convertible Notes | 0 | |
Notes Payable | 3,327 | |
Total | 3,327 | |
2024 [Member] | ||
Convertible Notes | 0 | |
Notes Payable | 3,454 | |
Total | 3,454 | |
2025 [Member] | ||
Convertible Notes | 0 | |
Notes Payable | 3,586 | |
Total | 3,586 | |
Thereafter [Member] | ||
Convertible Notes | 0 | |
Notes Payable | 137,560 | |
Total | 137,560 | |
Total [Member] | ||
Convertible Notes | 238,666 | |
Notes Payable | 214,718 | |
Total | 453,384 | |
2021 [Member] | ||
Convertible Notes | 36,082 | |
Notes Payable | 33,033 | |
Total | 69,115 | |
2022 [Member] | ||
Convertible Notes | 202,584 | |
Notes Payable | 33,758 | |
Total | $ 236,342 |
Derivative Liabilities (Details
Derivative Liabilities (Details) - Warrants [Member] | 3 Months Ended |
Mar. 31, 2021 | |
Minimum [Member] | |
Expected volatility | 135.00% |
Risk free interest rate | 0.05% |
Expected life (in years) | 0 years |
Maximum [Member] | |
Expected volatility | 275.00% |
Risk free interest rate | 0.15% |
Expected life (in years) | 1 year 5 months 30 days |
Derivative Liabilities (Detai_2
Derivative Liabilities (Details 1) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Derivative liabilities | ||
Embedded conversion feature - convertible debt | $ 68,835 | |
Embedded conversion feature - preferred stock | 75,757 | |
Derivative liabilities | $ 144,592 | $ 189,775 |
Derivative Liabilities (Detai_3
Derivative Liabilities (Details 2) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Embedded Conversion Features - Debt Instrument | ||
Balances, as of the beginning of the year | $ 97,024 | |
Derivative liabilities recorded upon issuance of Convertible debt | 0 | |
Derivative liabilities derecognized upon debt conversion | 0 | |
Net changes in fair value included in net loss | (28,189) | |
Ending balance | 68,835 | |
Embedded Conversion Features - Preferred Stock | ||
Balances, as of the beginning of the year | 92,751 | |
Derivative liabilities recorded upon issuance of preferred stock | 179,728 | |
Derivative liabilities derecognized upon preferred stock conversion | (82,216) | $ (77,693) |
Net changes in fair value included in net loss | (114,506) | |
Ending balance | 75,757 | |
Total ending balance | $ 144,592 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Officer [Member] | |||
Management and consulting fees | $ 40,000 | $ 33,000 | |
Director [Member] | |||
Due to Related Parties | 9,000 | ||
Vendor [Member] | |||
Due to Related Parties | 12,000 | ||
Purchase of hardware | $ 0 | $ 10,000 | |
VP and General Manager [Member] | |||
Debt conversion, converted instrument, shares issued | 3,243,785 | ||
Debt conversion, converted instrument, accrued interest | $ 16,543 | ||
Rent and other office expenses | 4,000 | $ 0 | |
Amount owed | $ 2,000 | $ 0 |
Redeemable Preferred Stock an_2
Redeemable Preferred Stock and Stockholders Deficit (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Feb. 28, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Feb. 29, 2020 | |
Preferred stock, par value | $ 0.001 | $ 0.001 | ||
Common stock shares issued upon conversion of preferred stock and accrued dividend | 14,181,071 | 176,916,762 | ||
subscription receivable | $ 51,822 | |||
Preferred stock shares authorized | 217,769,961 | 26,750,000 | ||
Accrued expenses | $ 16,543 | |||
Proceeds from issuance of stock | $ 127,000 | $ 40,000 | ||
common stock of shares conversion | 3,243,785 | |||
Deemed dividend | $ (56,276) | (91,029) | ||
Stock based compensation expense | $ 278,447 | 277,543 | ||
Series A Preferred Stock [Member] | ||||
Preferred stock shares authorized | 10,000,000 | |||
Common stock shares issued in connection with convertible debt/equity | 1,250,000 | |||
Series B Super Voting Preferred Stock, shares | 2,000,000 | |||
Common Shares [Member] | ||||
Proceeds from issuance of stock | $ 202,973 | |||
Shares issued for cash, shares | 44,803,645 | |||
Series A Convertible Preferred Stock [Member] | Holder [Member] | ||||
Common stock shares issued upon conversion of preferred stock and accrued dividend | 14,181,071 | |||
Preferred stock shares converted | 105,600 | |||
Changes in derivative liability | $ 82,216 | |||
Deemed dividend | 56,276 | |||
Reduction of debt discount | 60,501 | |||
Series B Super Voting Preferred Stock [Member] | ||||
Preferred stock shares authorized | 500,000 | 1,000,000 | ||
Voting right | Stock has voting rights equal to 500 shares of common stock | |||
Stock based compensation expense | 278,447 | $ 277,543 | ||
Repurchase share price | $ 0.001 | |||
Equity Purchase Agreements [Member] | ||||
Common Stock, Shares Issued During Period, Value, amount | $ 51,723 | |||
Common Stock, Shares Issued During Period, Shares | 18,053,645 | |||
Rights and Privileges of the Series A Preferred Stock [Member] | ||||
Voting right | Stock holders have no voting rights | |||
Dividend, percentage | 8.00% | |||
Redemption | 270 Days | |||
Mandatory Redemption, description | 18 months after the Issuance Date | |||
Stock conversion, description | At any time after 6 months following the Issuance Date | |||
Series A Preferred Stock Purchase Agreements [Member] | Investor [Member] | ||||
Proceeds from issuance of stock | $ 127,000 | |||
Shares issued for cash, shares | 139,700 | |||
Deemed dividend | $ 63,451 | |||
Reduction of debt discount | 116,277 | |||
Derivative liabilities | $ 179,728 | |||
February 1 2021 [Member] | ||||
Shares issued, shares | 58,850 | |||
Proceeds amount | $ 53,500 | |||
March 1 2021 [Member] | ||||
Shares issued, shares | 80,850 | |||
Proceeds amount | $ 73,500 |
Share Purchase Warrants (Detail
Share Purchase Warrants (Details) - Warrants [Member] | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Number of warrants, beginning balance | shares | 166,517,918 |
Number of warrants, issued | shares | |
Number of warrants, Adjusted for triggered down-round provisions | shares | 0 |
Number of warrants, exercised | shares | 0 |
Number of warrants, expired | shares | 0 |
Number of warrants, ending balance | shares | 166,517,918 |
Weighted average exercise price, beginning balance | $ / shares | $ 0 |
Weighted average exercise price, issued | $ / shares | 0 |
Weighted average exercise price, adjusted for triggered down-round provisions | $ / shares | 0 |
Weighted average exercise price, exercised | $ / shares | 0 |
Weighted average exercise price, expired | $ / shares | 0 |
Weighted average exercise price, ending balance | $ / shares | $ 0 |
Share Purchase Warrants (Deta_2
Share Purchase Warrants (Details 1) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Number of warrants outstanding | 166,517,918 |
Warrants At 0.03 [Member] | |
Number of warrants outstanding | 2,222,222 |
Exercise price (in Dollars per share) | $ / shares | $ 0.03 |
Expiry date | December 2, 2024 |
Warrants At 0.00 [Member] | |
Number of warrants outstanding | 163,265,304 |
Exercise price (in Dollars per share) | $ / shares | $ 0 |
Expiry date | September 23, 2024 |
Warrants At 0.15 [Member] | |
Number of warrants outstanding | 980,392 |
Exercise price (in Dollars per share) | $ / shares | $ 0.15 |
Expiry date | December 2, 2021 |
Warrants At 0.20 [Member] | |
Number of warrants outstanding | 50,000 |
Exercise price (in Dollars per share) | $ / shares | $ 0.20 |
Expiry date | January 2, 2022 |
Share Purchase Warrants (Deta_3
Share Purchase Warrants (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended |
Aug. 21, 2020 | Dec. 31, 2020 | |
Share Purchase Warrants | ||
Revised exercise price of warrants | $ 0.03 | $ 0.000245 |
Revised numbers of warrants | 2,222,222 | |
Maturity date of warrants | Dec. 2, 2024 | |
Increase in value of warrants due to triggering events | $ 370,726 |
Stock Options (Details)
Stock Options (Details) - Stock Option [Member] | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Number of warrants, beginning balance | 3,250,000 |
Number of shares, issued | |
Number of shares, cancelled / forfeited | 0 |
Number of warrants, ending balance | 3,250,000 |
Number of shares, Vested | 3,250,000 |
Number of shares, Unvested | |
Weighted average exercise price, beginning balance | $ / shares | $ 0.09 |
Weighted average exercise price, issued | $ / shares | 0 |
Weighted average exercise price Cancelled / forfeited | $ / shares | 0 |
Weighted average exercise price, ending balance | $ / shares | 0.09 |
Weighted average exercise price, Unvested | $ / shares | $ 0 |
Aggregate intrinsic value | $ | $ 0 |
Stock Options (Details 1)
Stock Options (Details 1) - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Stock Option [Member] | ||
Options Outstanding, Number of shares (in Shares) | 3,250,000 | 3,250,000 |
Options Outstanding, Weighted average remaining contractual life | 2 years 3 months 18 days | |
Options Outstanding, Weighted average exercise price | $ 0.9 | |
Options Exercisable, Number of shares (in Shares) | 3,250,000 | |
Options Exercisable, Weighted average exercise price | $ 0.9 | |
Options 01 [Member] | ||
Range of exercise prices | $ 0.04 | |
Options Outstanding, Number of shares (in Shares) | 1,500,000 | |
Options Outstanding, Weighted average remaining contractual life | 3 years 4 months 24 days | |
Options Outstanding, Weighted average exercise price | $ 0.04 | |
Options Exercisable, Number of shares (in Shares) | 1,500,000 | |
Options Exercisable, Weighted average exercise price | $ 0.04 | |
Options 02 [Member] | ||
Range of exercise prices | $ 0.08 | |
Options Outstanding, Number of shares (in Shares) | 250,000 | |
Options Outstanding, Weighted average remaining contractual life | 1 year 9 months 18 days | |
Options Outstanding, Weighted average exercise price | $ 0.08 | |
Options Exercisable, Number of shares (in Shares) | 250,000 | |
Options Exercisable, Weighted average exercise price | $ 0.08 | |
Options 03 [Member] | ||
Range of exercise prices | $ 0.13 | |
Options Outstanding, Number of shares (in Shares) | 1,425,000 | |
Options Outstanding, Weighted average remaining contractual life | 1 year 4 months 24 days | |
Options Outstanding, Weighted average exercise price | $ 0.13 | |
Options Exercisable, Number of shares (in Shares) | 1,425,000 | |
Options Exercisable, Weighted average exercise price | $ 0.13 | |
Options 04 [Member] | ||
Range of exercise prices | $ 0.16 | |
Options Outstanding, Number of shares (in Shares) | 75,000 | |
Options Outstanding, Weighted average remaining contractual life | 8 months 12 days | |
Options Outstanding, Weighted average exercise price | $ 0.16 | |
Options Exercisable, Number of shares (in Shares) | 75,000 | |
Options Exercisable, Weighted average exercise price | $ 0.16 |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Organization and Description of Business (Details Narrative) | ||
Stock-based compensation | $ 0 | $ 14,906 |
Risks Uncertainties (Details Na
Risks Uncertainties (Details Narrative) - Customer Concentration Risk | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Sales Revenue, Net [Member] | ||
Concentration Risk, Percentage | 84.00% | 80.00% |
Accounts Receivable [Member] | ||
Concentration Risk, Percentage | 100.00% | 99.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Commitment and contingencies | |
Loss on breach of contract | $ 1,000,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |
Apr. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Subsequent Events | |||
Common stock issued | 1,080,412 | ||
Accrued commissions | $ 7,860 | ||
Accrued interest | 9,616 | ||
Conversion shares issued | 1,780,825 | ||
Series A preferred stock, shares | 59,125 | ||
Stock purchase agreement for proceeds | $ 53,750 | $ 51,822 | $ 0 |
Common stock, shares issued | 9,803,922 | ||
Cash proceeds | $ 50,000 |