Document and Entity Information
Document and Entity Information - USD ($) | Jun. 30, 2018 | Dec. 31, 2018 | Apr. 11, 2019 |
Details | |||
Registrant Name | BLACKRIDGE TECHNOLOGY INTERNATIONAL, INC. | ||
Registrant CIK | 0001456212 | ||
SEC Form | 10-K | ||
Period End date | Dec. 31, 2018 | ||
Fiscal Year End | --12-31 | ||
Trading Symbol | brti | ||
Tax Identification Number (TIN) | 201282850 | ||
Number of common stock shares outstanding | 96,872,725 | ||
Public Float | $ 17,792,374 | ||
Filer Category | Non-accelerated Filer | ||
Current with reporting | Yes | ||
Voluntary filer | No | ||
Well-known Seasoned Issuer | No | ||
Shell Company | false | ||
Small Business | true | ||
Emerging Growth Company | true | ||
Ex Transition Period | false | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Entity Incorporation, State Country Name | NEVADA | ||
Entity Address, Address Line One | 5390 Kietzke Lane | ||
Entity Address, Address Line Two | Suite 104 | ||
Entity Address, City or Town | Reno | ||
Entity Address, State or Province | Nevada | ||
Entity Address, Postal Zip Code | 89511 | ||
City Area Code | (855) | ||
Local Phone Number | 807-8776 | ||
Entity Listing, Par Value Per Share | $ 0.35 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash | $ 4,693,950 | $ 421,869 |
Accounts receivable | 102,292 | 217,380 |
Inventory | 56,003 | 40,408 |
Prepaid expenses | 122,713 | 361,642 |
Total Current Assets | 4,974,958 | 1,041,299 |
Property and equipment, net | 78,821 | 87,628 |
Intangible assets, net | 8,920,360 | 7,043,644 |
Total Assets | 13,974,139 | 8,172,571 |
Current Liabilities | ||
Accounts payable and accrued expenses | 2,089,322 | 2,633,610 |
Accounts payable and accrued expenses - related party | 9,690 | 68,060 |
Accrued interest | 714,187 | 59,545 |
Accrued interest - related party | 177,419 | 180,066 |
Advances - related party | 0 | 65,000 |
Wages payable | 1,928,639 | 2,133,210 |
Deferred revenue | 3,535 | 8,760 |
Short-term notes payable | 45,232 | 50,232 |
Current portion of long term debt | 366,657 | 400,000 |
Convertible notes, short term, net of discounts | 3,248,746 | 0 |
Convertible notes, long term, net of discounts, current portion | 39,726 | 0 |
Convertible notes, short term - related party | 183,172 | 521,172 |
Total current liabilities | 8,806,325 | 6,119,655 |
Noncurrent Liabilities | ||
Contingent liability | 0 | 37,500 |
Notes payable | 0 | 366,658 |
Convertible notes, long term, net of discounts | 0 | 80,404 |
Total Liabilities | 8,806,325 | 6,604,217 |
Stockholders' deficit: | ||
Preferred Stock | 3,577 | 3,640 |
Common Stock | 96,873 | 77,063 |
Additional paid-in capital | 72,114,707 | 51,384,027 |
Accumulated deficit | (67,047,343) | (49,896,376) |
Total Stockholders' Equity | 5,167,814 | 1,568,354 |
Total Liabilities and Stockholders' Equity | $ 13,974,139 | $ 8,172,571 |
Consolidated Balance Sheets - P
Consolidated Balance Sheets - Parenthetical - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Details | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 3,577,370 | 3,639,783 |
Preferred Stock, Shares Outstanding | 3,577,370 | 3,639,783 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares, Issued | 96,872,725 | 77,063,171 |
Common Stock, Shares, Outstanding | 96,872,725 | 77,063,171 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Details | ||
Revenues | $ 247,869 | $ 81,968 |
Cost of Goods Sold | 16,983 | 10,260 |
Gross Profit | 230,886 | 70,708 |
Operating expenses: | ||
Engineering | 109,133 | 304,605 |
Sales and marketing | 16,631 | 21,888 |
General and administrative | 14,042,231 | 12,996,967 |
Total operating expenses | 14,167,995 | 13,323,460 |
Loss From Operations | (13,937,109) | (13,251,752) |
Other Income (Expense) | ||
Loss on extinguishment of debt | (578,698) | (913,238) |
Interest expense | (2,513,897) | (82,845) |
Interest expense - related party | (121,263) | (604,145) |
Total other income (expense) | (3,213,858) | (1,600,228) |
Net Loss Before Income Taxes | (17,150,967) | (14,851,980) |
Income Tax | 0 | 0 |
Net Loss From Continuing Operations | (17,150,967) | (14,851,980) |
Discontinued Operations | ||
Loss on disposal of discontinued operations | 0 | (484,927) |
Loss from discontinued operations | 0 | (8,737) |
Loss on discontinued operations | 0 | (493,664) |
Net Loss | $ (17,150,967) | $ (15,345,644) |
Loss From Continuing Operations per Common Share - Basic and Diluted | $ (0.20) | $ (0.37) |
Loss From Discontinued Operations per Common Share - Basic and Diluted | $ 0 | $ (0.01) |
Basic and diluted weighted-average common shares outstanding | 84,154,829 | 40,212,024 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Deficit - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Subscriptions Payable | Retained Earnings | Total |
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2016 | $ 3,671 | $ 13,326 | $ 20,287,638 | $ 135,000 | $ (34,550,732) | $ (14,111,097) |
Shares, Outstanding, Beginning Balance at Dec. 31, 2016 | 3,671,316 | 13,325,681 | ||||
Common share conversion, value | $ 50 | $ (500) | 450 | 0 | 0 | 0 |
Common share conversion, shares | 50,000 | (500,000) | ||||
Preferred share conversion, value | $ (144) | $ 1,587 | (1,443) | 0 | 0 | 0 |
Preferred share conversion, shares | (144,035) | 1,586,862 | ||||
Issuance of preferred stock, value | $ 63 | $ 0 | 374,937 | (100,000) | 0 | 275,000 |
Issuance of preferred stock, shares | 62,502 | |||||
Issuance of common stock, value | $ 0 | $ 18,289 | 8,499,161 | (35,000) | 0 | 8,842,450 |
Issuance of common stock, shares | 18,289,121 | |||||
Issuance of restricted common stock in settlement of wages payable, value | 0 | $ 22,064 | 13,216,389 | 0 | 0 | 13,238,453 |
Issuance of restricted common stock in settlement of wages payable, shares | 22,064,105 | |||||
Issuance of restricted common stock in settlement of accounts payable, value | 0 | $ 396 | 237,639 | 0 | 0 | 238,035 |
Issuance of common stock for accounts payable, shares | 396,726 | |||||
Issuance of stock in conjunction with contracts, value | 0 | $ 1,123 | 691,247 | 0 | 0 | 692,370 |
Issuance of stock in conjunction with contracts, shares | 1,122,866 | |||||
Warrant repricing | 0 | |||||
Issuance of stock for warrant exercise, value | 0 | $ 1,056 | 42,278 | 0 | 0 | 43,334 |
Issuance of stock for warrant exercise, shares | 1,055,556 | |||||
Issuance of stock for debt conversion, value | 0 | $ 10,757 | 5,367,871 | 0 | 0 | 5,378,628 |
Issuance of stock for debt conversion, shares | 10,757,254 | |||||
Business acquisition, value | 0 | $ 8,965 | 485,551 | 0 | 0 | 494,516 |
Business acquisition, shares | 8,965,000 | |||||
Issuance of warrants in conjunction with debt conversion | 0 | $ 0 | 913,238 | 0 | 0 | 913,238 |
Beneficial conversion feature on convertible debt | 0 | 0 | 536,165 | 0 | 0 | 536,165 |
Issuance of warrants in conjunction with advances | 0 | 0 | 27,945 | 0 | 0 | 27,945 |
Issuance of warrants in conjunction with debt | 0 | 0 | 567,166 | 0 | 0 | 567,166 |
Issuance of warrants in conjunction with contracts | 0 | 0 | 27,695 | 0 | 0 | 27,695 |
Gain (Loss) on Extinguishment of Debt | 913,238 | |||||
Share-based Compensation | 0 | 0 | 110,100 | 0 | 0 | 110,100 |
Net Income (Loss) | 0 | 0 | 0 | 0 | (15,345,644) | (15,345,644) |
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2017 | $ 3,640 | $ 77,063 | 51,384,027 | 0 | (49,896,376) | 1,568,354 |
Shares, Outstanding, Ending Balance at Dec. 31, 2017 | 3,639,783 | 77,063,171 | ||||
Preferred stock converted to common stock, value | $ (63) | $ 789 | (726) | 0 | 0 | 0 |
Preferred stock converted to common stock, shares | (62,413) | 789,048 | ||||
Issuance of common stock for advances, value | $ 0 | $ 538 | 139,462 | 0 | 0 | 140,000 |
Issuance of common stock for advances, shares | 538,125 | |||||
Issuance of restricted common stock in settlement of wages payable, value | 0 | $ 2,936 | 1,024,600 | 0 | 0 | 1,027,536 |
Issuance of restricted common stock in settlement of wages payable, shares | 2,935,818 | |||||
Issuance of restricted common stock in settlement of accounts payable, value | 0 | $ 661 | 240,405 | 0 | 0 | 241,066 |
Issuance of common stock for accounts payable, shares | 661,071 | |||||
Issuance of stock in conjunction with contracts, value | 0 | $ 1,772 | 612,774 | 0 | 0 | 614,546 |
Issuance of stock in conjunction with contracts, shares | 1,771,666 | |||||
Warrant repricing | 0 | $ 0 | 100,306 | 0 | 0 | 100,306 |
Issuance of stock for debt conversion, value | 0 | $ 4,776 | 1,189,134 | 0 | 0 | 1,193,910 |
Issuance of stock for debt conversion, shares | 4,775,638 | |||||
Beneficial conversion feature on convertible debt | 0 | $ 0 | 9,040,852 | 0 | 0 | 9,040,852 |
Common stock surrendered to Company, value | 0 | $ (338) | 338 | 0 | 0 | 0 |
Common stock surrendered to Company, shares | (338,200) | |||||
Issuance of common stock as loan incentive, value | 0 | $ 8,676 | (8,676) | 0 | 0 | 0 |
Issuance of common stock as loan incentive, shares | 8,676,388 | |||||
Issuance of warrants in conjunction with debt | 0 | $ 0 | 6,432,543 | 0 | 0 | 6,432,543 |
Issuance of Options in conjunction with contracts | 0 | 0 | 109,669 | 0 | 0 | 109,669 |
Gain (Loss) on Extinguishment of Debt | 0 | 0 | 578,698 | 0 | 0 | 578,698 |
Share-based Compensation | 0 | 0 | 1,271,301 | 0 | 0 | 1,271,301 |
Net Income (Loss) | 0 | 0 | 0 | 0 | (17,150,967) | (17,150,967) |
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2018 | $ 3,577 | $ 96,873 | $ 72,114,707 | $ 0 | $ (67,047,343) | $ 5,167,814 |
Shares, Outstanding, Ending Balance at Dec. 31, 2018 | 3,577,370 | 96,872,725 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Net Cash Provided by (Used in) Operating Activities | ||
Net Income (Loss) | $ (17,150,967) | $ (15,345,644) |
Net loss from discontinued operations | 0 | 493,664 |
Net Loss Before Income Taxes | (17,150,967) | (14,851,980) |
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities | ||
Depreciation and amortization | 464,806 | 443,811 |
Amortization of debt discounts | 1,821,189 | 33,735 |
Common stock issued in conjunction with contracts | 614,546 | 692,370 |
Share-based Compensation | 1,271,301 | 110,100 |
Warrant repricing | 100,306 | 0 |
Warrants issued and expensed in conjunction with advances | 0 | 27,945 |
Warrants issued in conjunction with contracts | 109,669 | 27,695 |
Gain (Loss) on Extinguishment of Debt | 578,698 | 913,238 |
Changes in operating assets and liabilities: | ||
Increase (Decrease) in Receivables | 115,088 | (205,380) |
Increase (Decrease) in Inventories | (15,595) | (40,408) |
Increase (Decrease) in Prepaid Expense | 238,929 | (260,688) |
Increase (Decrease) in Accounts Payable and Accrued Liabilities | (241,897) | 833,372 |
Increase decrease in accounts payable and accrued expenses - related party | (58,370) | (564,665) |
Increase (Decrease) in Interest Payable, Net | 682,916 | 6,657 |
Increase Decrease in accrued interest - related party | 121,263 | 604,145 |
Increase (Decrease) in Deferred Revenue | (5,225) | (11,228) |
Increase (Decrease) in Accrued Salaries | 700,802 | 4,447,647 |
Net Cash Used in Operating Activities, Continuing Operations | (10,652,541) | (7,793,634) |
Net Cash Provided by Operating Activities, Discontinued Operations | 0 | 45,028 |
Net Cash Used in Operating Activities | (10,652,541) | (7,748,806) |
Net Cash Provided by (Used in) Investing Activities | ||
Proceeds from business acquisition | 0 | 10,559 |
Purchase of property and equipment | 0 | (88,418) |
Purchases of intangible assets | (2,309,377) | (1,347,417) |
Net Cash Provided by (Used in) Investing Activities, Continuing Operations | (2,309,377) | (1,425,276) |
Cash Provided by (Used in) Investing Activities, Discontinued Operations | 0 | 0 |
Net Cash Provided by (Used in) Investing Activities | (2,309,377) | (1,425,276) |
Net Cash Provided by (Used in) Financing Activities | ||
Proceeds from sale of common stock | 0 | 8,482,450 |
Proceeds from sale of preferred stock | 0 | 275,000 |
Proceeds from warrant exercise | 0 | 43,334 |
Proceeds from short term notes - related party | 732,000 | 0 |
Proceeds from issuance of short term convertible notes | 16,832,000 | 1,250,000 |
Proceeds from advances - related party | 75,000 | 115,000 |
Repayments of short term notes | (5,000) | (38,989) |
Repayments of short term convertible notes | 0 | (100,000) |
Repayments on long term debt | (400,001) | (433,342) |
Net Cash Provided by Financing Activities, Continuing Operations | 17,233,999 | 9,593,453 |
Net Cash Used in Financing Activities, Discontinued Operations | 0 | (54,735) |
Net Cash Provided by (Used in) Financing Activities | 17,233,999 | 9,538,718 |
Cash and Cash Equivalents, Period Increase (Decrease) | 4,272,081 | 364,836 |
Cash and Cash Equivalents, at Carrying Value, Beginning Balance | 421,869 | 57,033 |
Cash and Cash Equivalents, at Carrying Value, Ending Balance | 4,693,950 | 421,869 |
Non-Cash Investing and Financing Activities | ||
Wages payable included in capitalized intangible assets | 23,338 | 215,705 |
Wages payable settled with common stock | 1,027,536 | 13,238,453 |
Accounts payable settled with common stock | 241,066 | 238,035 |
Common stock converted to preferred stock | 0 | 500 |
Preferred stock converted to common stock | 789 | 0 |
Issuance of stock for debt conversion, value | 1,193,910 | 5,378,628 |
Business acquisition | 0 | 483,957 |
Warrants and stock issued in conjunction with debt agreements | 643,254 | 567,166 |
Beneficial conversion feature on convertible debt | 9,040,852 | 536,165 |
Warrants issued and expensed in conjunction with advances | 0 | 27,945 |
Supplemental Cash Flow Information | ||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | 9,792 | 16,654 |
Income Taxes Paid, Net | $ 0 | $ 0 |
Note 1 - Summary of Signicant A
Note 1 - Summary of Signicant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
Note 1 - Summary of Signicant Accounting Policies | NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization – On September 6, 2016, the Company entered into an agreement and plan of reorganization with BlackRidge Technology International, Inc., a Delaware corporation, and Grote Merger Co., a Delaware corporation providing for the Company’s acquisition of BlackRidge in exchange for a controlling number of shares of the Company’s preferred and common stock pursuant to the merger of Grote Merger Co. with and into BlackRidge, with BlackRidge continuing as the surviving corporation. The transaction contemplated in the agreement closed on February 22, 2017. On July 2, 2017, the Company filed a Certificate to Accompany Restated Articles or Amended and Restated Articles with the Secretary of State of Nevada to, among other things, change the Company’s name to BlackRidge Technology International, Inc. On September 22, 2017, the Company formed a new business subsidiary called BlackRidge Secure Blockchain, Inc. to pursue new market opportunities for securing blockchain applications. On August 31, 2018, the Company filed for the dissolution of Blackridge Secure Blockchain Inc. after determining it would not be utilized. On October 13, 2017, the Company formed a new business subsidiary called BlackRidge Secure Services, Inc. to work with partners on Secure Supervisory Control and Data Acquisition Systems (“SCADA”) infrastructure and to design and deliver secure systems using BlackRidge Technology products for use by the utilities industry. Principles of Consolidation BlackRidge Technology International, Inc. BlackRidge Technology Holding, Inc. BlackRidge Technology, Inc. BlackRidge Technology Government, Inc. BlackRidge Secure Services, Inc. All intercompany balances have been eliminated in consolidation. Fair Value of Financial Instruments Use of Estimates - Concentrations - Significant customers are those which represent more than 10% of the Company’s revenue for each period presented, or the Company’s accounts receivable balance as of each respective balance sheet date. For each significant customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total net accounts receivable are as follows: Revenue Accounts Receivable Year Ended December 31, December 31, Customers 2018 2017 2018 2017 Customer A 77 % - % - % - % Customer B 10 % 12 % - % 15 % Customer C 4 % 41 % - % - % Customer D - % 34 % - % - % Cash and Cash Equivalents Accounts Receivable and Allowance for Doubtful Accounts Inventory As of December 31, 2018 As of December 31, 2017 Inventory $ 391,658 $ 376,063 Less: allowance for obsolescence (335,655) (335,655) $ 56,003 $ 40,408 Revenue Recognition Revenue recognition for multiple-element arrangements requires judgment to determine if multiple elements exist, whether elements can be accounted for as separate units of accounting, and if so, the fair value for each of the elements. The Company may enter into arrangements that can include various combinations of software, services, and hardware. Where elements are delivered over different periods of time, and when allowed under U.S. GAAP, revenue is allocated to the respective elements based on their relative selling prices at the inception of the arrangement, and revenue is recognized as each element is delivered. We use a hierarchy to determine the fair value to be used for allocating revenue to elements: (i) vendor-specific objective evidence of fair value ("VSOE"), (ii) third-party evidence, and (iii) best estimate of selling price ("ESP"). For software elements, we follow the industry specific software guidance which only allows for the use of VSOE in establishing fair value. Generally, VSOE is the price charged when the deliverable is sold separately, or the price established by management for a product that is not yet sold if it is probable that the price will not change before introduction into the marketplace. ESPs are established as best estimates of what the selling prices would be if the deliverables were sold regularly on a stand-alone basis. Our process for determining ESPs requires judgment and considers multiple factors that may vary over time depending upon the unique facts and circumstances related to each deliverable. Any revenue received that does not yet meet the above recognition standards is recorded to unearned revenue and held as a liability until recognition occurs. Property and Equipment - The estimated useful lives of the property and equipment are as follows: Property and Equipment Estimated Useful Life Building improvements 15 years Furniture, fixtures and equipment 7 years Computer equipment 5 years Intangible Assets Useful life estimates for the Company's significant intangible asset classes are as follows: Useful Life Patent Costs 20 years Software Licenses 7 years Software Development Costs 15 years Impairment of Long-Lived Assets Earnings (Loss) Per Share Income Taxes Provision for income taxes consists of federal and state income taxes in the United States. Due to uncertainty as to the realization of benefits from our deferred tax assets, including net operating loss carry-forwards and other tax credits, we have a full valuation allowance reserved against such assets. We expect to maintain this full valuation allowance at least in the near term. Share-Based Payments and Stock-Based Compensation Recently Enacted Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases In May 2014, in addition to several amendments issued during 2016, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” This pronouncement updated the accounting guidance related to revenue from contracts with customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. The standard defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. These updates are effective for the Company for its annual period ending December 31, 2019, and interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of ASU 2014-09. |
Note 2 - Going Concern
Note 2 - Going Concern | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
Note 2 - Going Concern | NOTE 2 –GOING CONCERN The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, during the year ended December 31, 2018 the Company incurred a net loss of $17,150,967 and inception to date losses are equal to $67,047,343. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through investment capital. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. |
Note 3 - Property and Equipment
Note 3 - Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
Note 3 - Property and Equipment | NOTE 3 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following at December 31, 2018 and 2017: As of December 31, 2018 As of December 31, 2017 Estimated Useful Life Building improvements 55,390 55,390 15 years Furniture, fixtures and equipment 26,101 26,101 7 years Computer equipment 6,926 8,927 5 years Less: accumulated depreciation (9,596) (790) $ 78,821 $ 87,628 |
Note 4 - Intangible Assets
Note 4 - Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
Note 4 - Intangible Assets | NOTE 4 – INTANGIBLE ASSETS In accordance with ASC 350-40, ASC 350-50, and ASC 985-20, during the years ended December 31, 2018 and 2017, the Company capitalized $2,332,715 and $1,563,122, respectively, towards the development of software, intellectual property, and patent expenses. The Company amortizes these costs over their related useful lives (approximately 7 to 20 years), using a straight-line basis. Fair value is determined through various valuation techniques, including market and income approaches as considered necessary. The Company recorded amortization of $455,999 and $443,021 related to intangible assets during years ended December 31, 2018 and 2017, respectively. Intangible assets consisted of the following at December 31, 2018 and 2017: As of December 31, 2018 As of December 31, 2017 Estimated Useful Life Patent Costs 542,846 397,417 15 years Software Licenses 58,260 58,260 7 years Software Development Costs 10,208,061 8,020,775 5 years Less: accumulated amortization (1,888,807) (1,432,808) $ 8,920,360 $ 7,043,644 Based upon currently launched products, the Company anticipates amortization expense of approximately $480,000 during each of the next five years. |
Note 5 - Notes Payable
Note 5 - Notes Payable | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
Note 5 - Notes Payable | NOTE 5 – NOTES PAYABLE Short term notes At December 31, 2018 and 2017, the Company had outstanding short-term debt totaling $45,232 and $50,232, respectively. These notes bear interest at the rates of between 10% and 12% annually and have maturity dates ranging from January 1, 2012 through December 31, 2014. As these notes have exceeded their initial maturity dates, they are subject to the default interest rate of 15% per annum. The following table summarizes the Company’s short-term notes payable for the years ended December 31, 2018 and 2017: December 31, 2018 December 31, 2017 Beginning Balance $ 50,232 $ 89,221 Notes acquired in business acquisition - 208,811 Repayments – continuing operations (5,000) (38,989) Repayments – discontinued operations - (53,132) Notes divested in disposal of discontinued operations - (155,679) Ending Balance $ 45,232 $ 50,232 Short term notes – related party On January 31, 2018, the Company’s Chief Technology Officer and significant shareholder invested $500,000 via a one year note bearing interest at 8% annually. In conjunction with this note, the Company issued 5 year detachable warrants to purchase 1,562,500 shares of the Company’s common stock at $0.50 per share. These warrants were valued at $172,542 using the Black-Scholes pricing model and were recorded as a discount to the note. The note carries a default rate of 18% for any principal not paid by the maturity date. On September 30, 2018, the note along with interest of $29,712 was converted into 2,118,849 shares of the Company’s common stock at a rate of $0.25 per share. Additionally, as part of the conversion, additional warrants to purchase 437,500 shares of common stock were issued and all warrants related to this note were repriced to reflect an exercise price of $0.25 per share. The value of these additional warrants and the lowered conversion totaled $58,250 which the Company recorded as a loss on extinguishment of debt. Long term notes On November 2, 2016 the Company entered into settlement agreements with two holders of convertible debt and other payables in which the Company agreed to issue new long-term debt agreements as settlement of amounts due. Pursuant to these agreements, the Company issued two non-interest bearing $600,000 notes payable in 36 equal installments of 16,667 beginning on January 1, 2017 and Maturing on December 1, 2019. The following table summarizes the Company’s long-term notes payable for the years ended December 31, 2018 and 2017: December 31, 2018 December 31, 2017 Beginning Balance $ 766,658 $ 1,200,000 Notes acquired in business acquisition - 136,830 Repayments – continuing operations (400,001) (433,342) Repayments – discontinued operations - (1,603) Notes divested in disposal of discontinued operations - (135,227) Ending Balance $ 366,657 $ 766,658 Short Term Portion of Long Term Debt $ 366,657 $ 400,000 Long Term Debt $ - $ 366,658 |
Note 6 - Convertible Notes
Note 6 - Convertible Notes | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
Note 6 - Convertible Notes | NOTE 6 – CONVERTIBLE NOTES Short term convertible notes On January 31, 2018, the Company issued a $100,000 convertible note bearing interest at 8% per annum. The note matures on February 28, 2019 and is convertible into the Company’s Series B Preferred Stock at a price of $0.32 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 312,500 shares of the Company’s common stock at an exercise price of $0.32 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $88,219 based on the intrinsic per share value of the conversion feature, and the warrants at $46,991 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $68,021 and $31,969, respectively. At December 31, 2018, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at $45,938. The Company had accrued interest for this note in the amount of $7,321, which is included in accrued interest on the Company’s consolidated balance sheets. On February 23, 2018, the Company issued a $1,000,000 convertible note bearing interest at 9% per annum. The note matures on February 29, 2019 and is convertible, as amended, into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 3,125,000 shares of the Company’s common stock at an exercise price of $0.32 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $417,757 based on the intrinsic per share value of the conversion feature, and the warrants at $540,553 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $417,757 and $350,882, respectively. At December 31, 2018, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at $791,651. The Company had accrued interest for this note in the amount of $76,685, which is included in accrued interest on the Company’s consolidated balance sheets. On February 27, 2018, the Company issued a $1,000,000 convertible note bearing interest at 9% per annum. The note matures on February 29, 2019 and is convertible, as amended, into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 3,125,000 shares of the Company’s common stock at an exercise price of $0.32 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $444,923 based on the intrinsic per share value of the conversion feature, and the warrants at $541,244 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $444,923 and $351,173, respectively. At December 31, 2018, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at $773,571. The Company had accrued interest for this note in the amount of $75,699, which is included in accrued interest on the Company’s consolidated balance sheets. On April 18, 2018, the Company issued a $2,000,000 convertible note bearing interest at 9% per annum. The note matures on April 18, 2019 and is convertible, as amended, into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 6,250,000 shares of the Company’s common stock at an exercise price of $0.32 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $1,510,980 based on the intrinsic per share value of the conversion feature, and the warrants at $1,073,331 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $1,301,510 and $698,480, respectively. At December 31, 2018, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at $51,049. The Company had accrued interest for this note in the amount of $126,740, which is included in accrued interest on the Company’s consolidated balance sheets. On May 4, 2018, the Company issued an aggregate $1,500,000 in convertible notes bearing interest at 9% per annum. These notes mature on May 31, 2019 and are convertible, as amended, into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 4,687,500 shares of the Company’s common stock at an exercise price of $0.25 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $1,133,680 based on the intrinsic per share value of the conversion feature, and the warrants at $806,050 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $975,685 and $524,305, respectively. At December 31, 2018, the principal balances were still outstanding and is included on the Company’s consolidated balance sheets net of discounts at an aggregate $15,248. The Company had accrued interest for these notes in the amount of $89,140, which is included in accrued interest on the Company’s consolidated balance sheets. On May 9, 2018, the Company issued a $1,028,274 convertible note bearing interest at 9% per annum as replacement for a $1,000,000 note plus accrued interest of $28,274 (see long term convertible notes section of this note). The note matures on May 31, 2019 and is convertible, as amended, into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 3,213,356 shares of the Company’s common stock at an exercise price of $0.25 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $835,295 based on the intrinsic per share value of the conversion feature, and the warrants at $538,207 using the Black-Scholes pricing model. The Company has allocated the note proceeds based relative on fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $674,972 and $353,292, respectively. At December 31, 2018, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at $11,388. The Company had accrued interest for this note in the amount of $59,837, which is included in accrued interest on the Company’s consolidated balance sheets. On July 5, 2018, the Company issued an aggregate $2,000,000 in convertible notes bearing interest at 9% per annum. These notes mature on July 5, 2019 and is convertible, as amended, into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholders were also granted detachable 5 year warrants to purchase an aggregate of 8,000,000 shares of the Company’s common stock at an exercise price of $0.25 per share. The Company has determined the notes to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $1,307,658 based on the intrinsic per share value of the conversion feature, and the warrants at $1,354,741 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $1,192,302 and $807,658, respectively. At December 31, 2018, the principal balances were still outstanding and are included on the Company’s consolidated balance sheets net of discounts at an aggregate $6,828. The Company had accrued interest for these notes in the amount of $87,781, which is included in accrued interest on the Company’s consolidated balance sheets. On July 10, 2018, the Company issued a $32,000 convertible note bearing interest at 9% per annum. This note matures on July 31, 2019 and is convertible into the Company’s Series B Preferred Stock at a price of $0.32 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 128,000 shares of the Company’s common stock at an exercise price of $0.25 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $15,005 based on the intrinsic per share value of the conversion feature, and the warrants at $21,711 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $15,005 and $12,935, respectively. At December 31, 2018, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at an aggregate $10,858. The Company had accrued interest for these notes in the amount of $1,373, which is included in accrued interest on the Company’s consolidated balance sheets. On July 13, 2018, the Company issued a $200,000 in convertible notes bearing interest at 9% per annum. This note matures on July 31, 2019 and is convertible into the Company’s Series B Preferred Stock at a price of $0.32 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 800,000 shares of the Company’s common stock at an exercise price of $0.25 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $68,266 based on the intrinsic per share value of the conversion feature, and the warrants at $135,474 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $68,266 and $80,766, respectively. At December 31, 2018, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at an aggregate $96,693. The Company had accrued interest for these notes in the amount of $8,433, which is included in accrued interest on the Company’s consolidated balance sheets. On September 17, 2018, the Company issued an aggregate $3,000,000 in convertible notes bearing interest at 9% per annum. The notes mature on September 17, 2019 and are convertible into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholders were also granted detachable 7 year warrants to purchase an aggregate of 12,000,000 shares of the Company’s common stock at an exercise price of $0.25 per share. The Company has determined the notes to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $2,921,170 based on the intrinsic per share value of the conversion feature, and the warrants at $1,617,415 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $1,949,132 and $1,050,858, respectively. Additionally, as further inducement to write this this note, the Company agreed to grant all of the investor’s existing notes as well as several other existing noteholders with relationships to the investor the same terms on their existing debt that this debt carries. These new terms were required to write the notes, therefore, the Company has accounted them as a discount on this note, the value of which is included in the beneficial conversion value. At December 31, 2018, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at an aggregate $383. The Company had accrued interest for these notes in the amount of $77,671, which is included in accrued interest on the Company’s consolidated balance sheets. On December 4, 2018, the Company issued an aggregate $3,000,000 in convertible notes bearing interest at 9% per annum. The notes mature on December 4, 2019 and are convertible into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholders were also granted detachable 7 year warrants to purchase an aggregate of 12,000,000 shares of the Company’s common stock at an exercise price of $0.25 per share. As additional consideration for this note, the Company issued an aggregate 4,006,250 shares of the Company’s common stock. The Company has determined the notes to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $2,248,088 based on the intrinsic per share value of the conversion feature, the warrants at $1,589,454 using the Black-Scholes pricing model, and the stock at $1,346,000. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature, warrants, and stock as a discount to the debt in the amount of $1,516,302, $803,369 and $680,319, respectively. At December 31, 2018, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at an aggregate $76. The Company had accrued interest for these notes in the amount of $19,973, which is included in accrued interest on the Company’s consolidated balance sheets. On December 19, 2018, the Company issued an aggregate $3,000,000 in convertible notes bearing interest at 9% per annum. The notes mature on December 19, 2019 and are convertible into the Company’s Series B Preferred Stock at a price of $0.25 per share at the holder’s request. The noteholders were also granted detachable 7 year warrants to purchase an aggregate of 12,000,000 shares of the Company’s common stock at an exercise price of $0.25 per share. The Company has determined the notes to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $555,512 based on the intrinsic per share value of the conversion feature, and the warrants at $1,581,347 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $555,512 and $1,035,512, respectively. At December 31, 2018, the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at an aggregate $1,445,063. The Company had accrued interest for these notes in the amount of $8,877, which is included in accrued interest on the Company’s consolidated balance sheets. Short term convertible notes – related party On October 31, 2013, the Company agreed to convert balances owed to the Company’s corporate counsel in the amount of $183,172 into a 42 month convertible note bearing interest at 12% annually and convertible into 203,525 shares of convertible preferred stock at the rate of $0.90 per share. At December 31, 2018, the principal balance was still outstanding, and the Company had accrued interest for this note in the amount of $177,419 which is included in accrued interest – related party on the Company’s consolidated balance sheets. The note carries a default rate of 18% for any principal not paid by the maturity date. On November 30, 2015, John Hayes, the Company’s Chief Technology Officer, Director and significant shareholder invested $101,000 via a one year convertible note bearing interest at 12% annually and convertible into 112,223 shares of Series A convertible preferred stock at the rate of $0.90 per share. On September 1, 2017, $237,000 owed to John Hayes was added to the note. On September 30, 2018, the note along with interest of $89,366 was converted into 1,709,466 shares of the Company’s common stock at a rate of $0.25 per share. Additionally, as further inducement to convert the note, the Company issued the note holder 5 year warrants to purchase 1,352,000 shares of the Company’s common stock. The Company recognized a loss on extinguishment of debt of $384,200 related to the decrease in conversion price and warrants granted. On July 6, 2018, the Company issued a $200,000 in convertible notes bearing interest at 9% per annum to John Hayes, the Company’s Chief Technology Officer, Director and significant shareholder. This note matures on July 31, 2019 and is convertible into the Company’s Series B Preferred Stock at a price of $0.32 per share at the holder’s request. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 800,000 shares of the Company’s common stock at an exercise price of $0.25 per share. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $130,766 based on the intrinsic per share value of the conversion feature, and the warrants at $135,474 using the Black-Scholes pricing model. The Company has allocated the note proceeds based on relative fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $119,224 and $80,766, respectively. On September 30, 2018, the note along with interest of $4,192 was converted into 816,767 shares of the Company’s common stock at a rate of $0.25 per share. The Company recognized a loss on extinguishment of debt of $43,750 related to the decrease in conversion price. On July 10, 2018, the Company issued a $32,000 in convertible notes bearing interest at 9% per annum to J Allen Kosowsky, a Director and related party. This note matures on July 31, 2019 and is convertible into the Company’s Series B Preferred Stock at a price of $0.32 per share at the holder’s request. The Company has determined the note to contain a beneficial conversion feature. The Company valued the beneficial conversion feature at $15,005 based on the intrinsic per share value of the conversion feature, and the warrants at $21,711 using the Black-Scholes pricing model. The Company has allocated the note proceeds based relative on fair value and has recorded the value of the beneficial conversion feature and warrants as a discount to the debt in the amount of $15,005 and $12,935, respectively. On September 30, 2018, the note along with interest of $639 was converted into 130,556 shares of the Company’s common stock at a rate of $0.25 per share. The Company recognized a loss on extinguishment of debt of $8,960 related to the decrease in conversion price. Long term convertible notes On December 21, 2017, the Company issued a $150,000 convertible note bearing interest at 8% per annum. The note matures on December 21, 2019 and is convertible into the Company’s Series B Preferred Stock at a price of $0.32 per share at the holder’s request. The Company has determined the note to contain a beneficial conversion feature valued at $69,935 based on the intrinsic per share value of the conversion feature. This beneficial conversion feature is recorded as a discount to the debt agreement. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 468,750 shares of the company’s common stock at an exercise price of $0.32 per share. The warrants were valued at $69,935 using the Black-Scholes pricing model and were recorded as a discount to the note. At December 31, 2018 the principal balance was still outstanding and is included on the Company’s consolidated balance sheets net of discounts at $39,726. The Company had accrued interest for this note in the amount of $12,329, which is included in accrued interest on the Company’s consolidated balance sheets. On December 22, 2017, the Company issued a $1,000,000 convertible note bearing interest at 8% per annum. The note matures on December 22, 2019 and is convertible into the Company’s Series B Preferred Stock at a price of $0.32 per share at the holder’s request. The Company has determined the note to contain a beneficial conversion feature valued at $466,230 based on the intrinsic per share value of the conversion feature. This beneficial conversion feature is recorded as a discount to the debt agreement. The noteholder was also granted detachable 5 year warrants to purchase an aggregate of 3,125,000 shares of the company’s common stock at an exercise price of $0.32 per share. The warrants were valued at $466,230 using the Black-Scholes pricing model and were recorded as a discount to the note. On May 9, 2018, this note along with $28,274 was renegotiated into a new short term convertible note and the warrants associated with the original note were cancelled. The newly negotiated note included an additional warrant benefit valued at $95,804 which was recorded as a loss on extinguishment of debt. Long term convertible notes – related party During 2011 to 2014, the Company’s Chief Technology Officer and significant shareholder of the Company loaned a total of $2,673,200 to the Company. On October 1, 2014, all prior notes including accrued interest were combined into a single $3,712,637 convertible note bearing interest at 12% annually and convertible into 4,125,154 shares of preferred stock at the rate of $0.90 per share. On November 9, 2017, the Company converted the note and accrued interest of $1,665,991 into 10,757,254 shares of the Company’s common stock at a conversion rate of $0.50 per share. The Company also issued a 5 year warrant to purchase an additional 5,378,627 shares of the Company s common stock at a purchase price of $0.50 per share as further consideration for this conversion. The Company recognized a loss on extinguishment of debt related to this transaction of $913,238. Convertible debt holders are entitled, at their option, to convert all or part of the principal and accrued interest into shares of the Company’s common stock at the conversion prices and terms discussed above. The Company has determined that any embedded conversion options do not possess a beneficial conversion feature, and therefore has not separately accounted for their value. The following table summarizes the Company’s convertible notes payable for the years ended December 31, 2018 and 2017: December 31, 2018 December 31, 2017 Beginning Balance $ 601,576 $ 3,996,810 Proceeds from issuance of convertible notes, net of issuance discounts 1,903,438 146,669 Proceeds from issuance of convertible notes – related party - 237,000 Repayments - (100,000) Conversion of notes payable into common stock (570,000) (3,712,638) Debt restructured (112,017) - Amortization of discounts 1,648,647 33,735 Ending Balance $ 3,471,644 $ 601,576 Convertible notes, short term $ 17,860,274 $ 1,150,000 Convertible notes, short term – related party $ 183,172 $ 521,172 convertible notes, long term $ 150,000 $ - Debt discounts $ 14,721,802 $ 1,069,596 The following table summarizes the Company’s convertible notes payable as of December 31, 2018: Note(s) Date Maturity Date Interest Principal 1/31/2018 1/31/2019 8% $ 100,000 2/23/2018 2/28/2019 9% 1,000,000 2/27/2018 2/28/2019 9% 1,000,000 4/18/2018 4/18/2019 9% 2,000,000 5/4/2018 5/31/2019 9% 1,500,000 5/9/2018 5/31/2019 9% 1,028,274 7/5/2018 7/5/2019 9% 2,000,000 7/10/2018 7/10/2019 9% 32,000 7/13/2018 7/13/2019 9% 200,000 9/17/2018 9/17/2019 9% 3,000,000 12/4/2018 12/4/2019 9% 3,000,000 12/19/2018 12/19/2019 9% 3,000,000 $ 17,860,274 |
Note 7 - Commitments and Contin
Note 7 - Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
Note 7 - Commitments and Contingencies | NOTE 7 – COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases approximately 7,579 square feet of office space under a 62 month operating lease which expires during April 2023. The amounts reflected in the table below are for the aggregate future minimum lease payments under the non-cancelable facility operating leases. Under lease agreements that contain escalating rent provisions, lease expense is recorded on a straight-line basis over the lease term. The Company also leases office space under a 23 month operating lease which expires during August 2019. The amounts reflected in the table below are for the aggregate future minimum lease payments under the non-cancelable facility operating leases. Under lease agreements that contain escalating rent provisions, lease expense is recorded on a straight-line basis over the lease term. The Company also leases approximately 202 square feet of office space under a 12 month operating lease which originally expired in 2016. The lease was renewed to May 2019, and is renewable at the Company’s option annually at a flat monthly amount of $400. The amounts reflected in the table below are for the aggregate future minimum lease payments under the non-cancelable facility operating leases Rent expense was $287,649 and $186,640 for the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018, future minimum lease payments are as follows: Year Ending December 31, 2019 $ 259,851 2020 209,559 2021 214,107 2022 218,654 2023 18,569 2024 and thereafter - Total minimum lease payments $ 920,740 On August 1, 2017, the Company entered into a 36 month lease of computer equipment. The lease carries a monthly payment of $2,871 with the option to purchase the equipment at its fair market value at the end of the lease. Restricted Stock Commitments The Company has committed to settling a significant portion of its current accounts payable balances through the future issuance of restricted stock units. While the terms of these agreements have not yet been formalized with employees and outside contractors, they could have a potentially dilutive effect to current shareholders. Contingent Liability On October 15, 2011, the Company entered into an agreement with a consultant by which the consultant’s invoices for the previous four months would be accrued as a liability to be paid out upon (a) the Company’s successful raising of $10,000,000 in capital funding, or (b) the Company reaching total revenues of $10,000,000. The Company had a balance due under this agreement of $37,500 December 31, 2017. In 2018, the Company reached its capital funding threshold under the agreement and reclassified the entire $37,500 liability to a payable. Legal Proceedings On December 2, 2016, AltEnergy Cyber, LLC ("Plaintiff") instituted a legal action in Connecticut against the Company and Robert Zahm. The complaint alleged that (i) the Company improperly extended the maturity date of the Plaintiff’s convertible note in the amount of $1,500,000 and (ii) improperly converted the loan into the Company’s stock. The Complaint alleges that the Company is liable to the Plaintiff for $4,500,000 plus interest. During the year ended December 31, 2017, Robert Zahm was dismissed from the proceedings for lack of personal jurisdiction. On March 29, 2018, the AltEnergy Cyber, LLC’s legal action was dismissed through a motion for summary judgement. |
Note 8 - Related Party Transact
Note 8 - Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
Note 8 - Related Party Transactions | NOTE 8 - RELATED PARTY TRANSACTIONS During the years ended December 31, 2018 and 2017, the Company incurred interest expense on notes to related parties in the aggregate amount of $525,785 and $604,145, respectively (see Note 6 – Convertible Notes). Accounts payable related party At December 31, 2018 and December 31, 2017, the Company had a balance in related party accounts payable of $9,690 and $68,060, respectively, which consisted of the following: December 31, December 31, Party Name: Relationship: Nature of transactions: 2018 2017 John Bluher Chief Financial Officer Expense reimbursement $ 4,465 $ - John Hayes Chief Technology Officer Expense reimbursement 5,225 55,254 Robert Graham Chairman and Chief Executive Officer Expense reimbursement - 6,806 Robert Graham Chairman and Chief Executive Officer Rent - 6,000 $ 9,690 $ 68,060 Advances from related party During the year ended December 31, 2018, the Company received advances of $50,000 from Mag Ventures, a company controlled by Tom Bruderman, a director and shareholder. These advances along with the previous balance were converted into 460,000 shares of the Company’s common stock at a price of $0.25 per share on November 9, 2018. During the year ended December 31, 2018, the Company received advances of $25,000 from J. Allen Kosowsky, a director and shareholder. These advances were converted into 78,125 shares of the Company’s common stock at a price of $0.32 per share on September 13, 2018. At December 31, 2018 and December 31, 2017, the Company had a balance in related party advances of $0 and $65,000, respectively, which consisted of the following: December 31, December 31, Party Name: Relationship: 2018 2017 Thomas Bruderman Director and significant shareholder $ - $ 65,000 Related Party Notes During the year ended December 31, 2018, the Company issued notes and converted notes to related parties, see Note 5 – Notes Payable, and Note 6 – Convertible Notes for full disclosure. |
Note 9 - Stockholders' Equity
Note 9 - Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
Note 9 - Stockholders' Equity | NOTE 9 - STOCK HOLDERS’ EQUITY The Company has authorized 200 million shares of common stock, $0.001 par value, and 10 million shares of preferred stock, $0.001 par value. Each share of the Company’s preferred stock is convertible into 10 shares of common stock, subject to adjustment, has voting rights equal to its common stock equivalent, 7% cumulative dividend rights, and has liquidation rights that entitle the recipient to the receipt of net assets on a pro-rata basis. The Company has 96,872,725 and 77,063,171 common shares issued and outstanding and 3,577,370 and 3,639,783 preferred shares issued and outstanding as of December 31, 2018 and 2017, respectively. During the year ended December 31, 2018, the Company issued an aggregate 1,771,666 shares of the Company’s common stock pursuant to consulting contracts valued at $614,546, or an average of $0.35 per share. During the year ended December 31, 2018, the Company converted an aggregate 62,413 shares of the Company’s Series A preferred stock into 789,048 shares of the Company’s common stock after receiving conversion exercises from multiple preferred stockholders. On June 13, 2018, the Company converted a $25,000 advance from related party and Director J Allen Kosowsky into 78,125, shares of the Company’s common stock at a price of $0.32 per share (see Note 8 – Related Party Transactions). On September 30, 2018, the Company issued an aggregate 2,935,818 shares of the Company’s common stock to satisfy $1,027,535 in wages payable at the rate of $0.35 per share. The stock contains a 6 month non-forfeitable vesting restriction. On September 30, 2018, The Company converted notes payable and interest valued at an aggregate $1,161,271 and due to the Company’s Chief Technology Officer and Director, John Hayes, into 4,645,082 shares of the Company’s common stock at a price of $0.25 per share (see additional information in Note 5 – Notes Payable and Note 6 – Convertible Notes). On September 30, 2018, The Company converted notes payable and interest valued at $32,639 and due to the Company’s Director, J Allen Kosowsky, into 130,556 shares of the Company’s common stock at a price of $0.25 per share (see additional information in Note 5 – Notes Payable and Note 6 – Convertible Notes). On November 9, 2018, the Company converted a $115,000 advance from Mag Ventures, a company controlled by Tom Bruderman, a director and shareholder, into 460,000, shares of the Company’s common stock at a price of $0.25 per share (see Note 8 – Related Party Transactions). During the year ended December 31, 2018, the Company accepted the return of 338,200 shares of its common stock. Upon receipt, the shares were retired to the treasury. During the year ended December 31, 2018, the Company issued an aggregate 661,071 shares of the Company’s common stock valued at $228,800 as satisfaction of payables in the amount of $241,067. The company recognized gain on settlement of $12,267 in relation to these transactions. On February 22, 2017, we completed the actions contemplated by the Reorganization Agreement (see Note 13 – Business Acquisition and Note 14 – Discontinued Operations) and merged with and into BlackRidge with BlackRidge continuing as the surviving corporation. Upon completion of the Agreement, the Company issued 3,783,791 shares of its newly designated Series A Preferred Stock and 12,825,683 shares of common stock to the stockholders of BlackRidge in exchange for all the issued and outstanding shares of Series A Preferred Stock and Common Stock of BlackRidge. Because BlackRidge continues as the surviving entity, the net effect from this transaction on the outstanding stock of the Company was the addition of 8,965,000 shares of common stock held by the investors of the Company at the time of the acquisition. Between January 13, 2017 and February 27, 2017, the Company issued 62,502 shares of the Company's preferred stock along with 5 year warrants to purchase 625,000 shares of the Company's common stock at an exercise price per share of $0.70 to several investors for aggregate proceeds of $375,000, or $0.60 per share. The warrants were valued at $104,765 using the Black-Scholes pricing model. Between February 27, 2017 and August 29, 2017, the Company issued 10,364,121 shares of the Company's common stock and 5 year warrants to purchase 6,755,291 shares of the Company's common stock at an average exercise price per share of $0.51 to several investors for aggregate proceeds of $4,666,453. The warrants were valued at $1,248,536 using the Black-Scholes pricing model. The Company paid consultant and business development fees of $89,000 related to these issuances. On February 2, 2017, the Company issued warrants to purchase 166,667 shares of the Company's common stock at an exercise price of $0.60 per share in conjunction with a debt agreement. The warrants were valued at $31,002 using the Black-Scholes pricing model and were recorded as a discount to the debt agreement. Between February 9, 2017 and March 6, 2017, the Company issued warrants to purchase 150,001 shares of the Company's common stock at an exercise price per share of $0.60 to several parties in conjunction with short term notes and advances. The warrants were valued at $27,945 using the Black-Scholes pricing model and were recorded to additional paid in capital. On March 31, 2017, the Company issued 1,000,000 shares of the Company's common stock in connection with the exercise of a warrant to purchase shares at $0.01 per share. The Company received $10,000 in proceeds for the warrant exercise. Between August 29, 2017 and November 16, 2017, the Company converted an aggregate 144,035 shares of the Company's preferred stock into 1,568,862 shares of the Company's common stock after receiving conversion exercises from preferred stockholders. Between August 31, 2017 and September 25, 2017, the Company issued 7,700,000 shares of the Company's common stock and 5 year warrants to purchase 7,700,000 shares of the Company's common stock at an exercise price per share of $0.50 to several investors for aggregate proceeds of $3,850,000. The warrants were valued at $1,800,288 using the Black-Scholes pricing model. On September 11, 2017, the Company issued an aggregate 22,064,105 shares of the Company's common stock to satisfy $13,238,453 in wages payable at a per share price of $0.60. The stock contains a 10 month restriction on transfers and/or sales. Between September 11, 2017 and September 27, 2017, the Company issued an aggregate 462,740 shares of the Company's common stock as settlement of contracts valued at $231,370 at a per share price of $0.50. On October 31, 2017, the Company issued 55,556 shares of the Company's common stock in connection with the exercise of a warrant to purchase shares at $0.60 per share. The Company received $33,334 in proceeds for the warrant exercise. On November 9, 2017, the Company issued 10,757,254 shares of the Company's common stock for the conversion of a note payable and accrued interest totaling $5,378,628. The Company also issued 5 year warrants to purchase an additional 5,378,627 shares of the Company's common stock at a price of $0.50. These warrants were valued at $913,238 which was recorded as a loss on extinguishment of debt. On November 9, 2017, the Company issued an aggregate 388,726 shares of the Company's common stock to satisfy $233,235 in accrued accounts payable at a per share price of $0.60. The stock contains a 10 month restriction on transfers and/or sales. On October 1, 2017, the Company issued 50,000 shares of the Company's common stock valued at $22,500 or $0.45 per share, along with warrants to purchase 100,000 shares of the Company's common stock at a price of $0.60 per share pursuant to a consulting contract. Between December 1, 2017 and December 17, 2017, the Company issued an aggregate 610,126 shares of the company's common stock valued at $438,500 or an average of $0.72 pursuant to several consulting contracts. On December 15, 2017, the Company issued 225,000 shares of the Company's common stock and 5 year warrants to purchase 56,250 shares of the Company's common stock at an exercise price per share of $0.32 to an investor for aggregate proceeds of $90,000. The warrants were valued at $8,365 using the Black-Scholes pricing model. |
Note 10 - Share Based Compensat
Note 10 - Share Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
Note 10 - Share Based Compensation | NOTE 10 – SHARE BASED COMPENSATION During the year ended December 31, 2018, the Company issued 10,390,741 5-year options to purchase common stock to employees and directors under the 2017 Stock Incentive Plan. The options were valued at $1,522,580 using the Black-Scholes pricing model. As of December 31, 2018, the total unrecognized expense for unvested share based compensation is $2,000,971. The 2017 Stock Incentive Plan allows for a maximum 25,000,000 shares to be issued, of which 8,053,574 shares remain available for issuance as of December 31, 2018. The company recognized stock option expense during the years ended December 31, 2018 and 2017 of $1,271,301 and $110,100, respectively. The fair values at the commitment date for the options were based upon the following management assumptions as of December 31, 2018: Commitment Date Expected dividends 0 % Expected term 5 years Risk free rate 1.91 – 2.96 % Volatility 48.24 – 52.49 % The activity of options granted to during the year ended December 31, 2018 is as follows: Employee and Director Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Life Weighted Average Grant Date Fair Value Beginning Balance – December 31, 2016 - Granted 6,962,560 $ 0.60 5 years $ 0.28 Exercised - Expired - Forfeited - Balance – December 31, 2017 6,962,560 $ 0.60 4.65 years $ 0.28 Granted 10,390,741 $ 0.33 5 years $ 0.16 Exercised - Expired (57,827) Forfeited (349,048) Ending Balance – December 31, 2018 16,946,426 $ 0.43 4.32 years $ 0.20 Exercisable options 6,284,597 $ 0.46 4.32 years $ 0.22 The Company’s outstanding employee options at December 31, 2018 are as follows: Options Outstanding Option Exercisable Exercise Price Range Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price Intrinsic Value $0.25 - $0.60 16,946,426 4.32 $ 0.43 6,284,597 $ 0.46 $ - The weighted average fair value per option issued during the year ended December 31, 2018 was $0.16. The following table summarizes non-vested option activity during the year ended December 31, 2018: Non-Vested Options Weighted Average Grant Date Fair Value Beginning Balance – December 31, 2016 - Granted 6,962,560 $ 0.28 Vested (1,373,097) Expired - Forfeited - Balance – December 31, 2017 5,589,463 $ 0.28 Granted 10,390,741 $ 0.16 Vested (4,911,501) Expired (57,827) Forfeited (349,048) Ending Balance – December 31, 2018 10,661,828 $ 0.19 |
NOTE 11 - WARRANTS
NOTE 11 - WARRANTS | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
NOTE 11 - WARRANTS | NOTE 11 – WARRANTS During the year ended December 31, 2018, the Company issued an aggregate 71,355,856 warrants to purchase common stock in conjunction with convertible debt agreements and cancelled an aggregate 4,687,500 warrants in conjunction with debt settlements and extinguishment (see note 6 - convertible notes). The company also agreed to cancel and re- issue 2,400,000 warrants at new terms in conjunction with a private stock and warrant sale. In order to facilitate this transaction, the Company agreed to cancel 2,400,000 warrants to purchase stock at $0.70 per share, and reissue the repriced warrants at 1,200,000 warrants to purchase common stock at $0.25 per share, and 1,200,000 warrants to purchase common stock at $0.50. The Company valued the new warrants at $100,306 using the Black Scholes pricing model, which is included in selling, general and administrative expense on the Company’s 2018 statement of profit and loss The fair values at the commitment date for the warrants were based upon the following management assumptions as of December 31, 2018: Commitment Date Expected dividends 0 % Expected term 5 - 7 years Risk free rate 2.52 – 3.05 % Volatility 48.24 – 51.35 % The activity of warrants granted to during the year ended December 31, 2018 is as follows: Warrants Outstanding Weighted Average Exercise Price Weighted Average Remaining Life Weighted Average Grant Date Fair Value Beginning Balance – December 31, 2016 16,029,605 2.54 years 0.00 Granted 28,094,587 5 years 0.21 Exercised (1,055,556) Expired - Forfeited - Balance – December 31, 2017 43,068,636 $ 0.45 4.69 years $ 0.08 Granted 73,755,856 $ 0.26 6.68 years $ 0.14 Exercised - Expired - Forfeited (7,087,500) Ending Balance – December 31, 2018 109,736,992 $ 0.32 5.46 years $ 0.12 Exercisable options 109,736,992 $ 0.32 5.46 years $ 0.12 The Company’s outstanding warrants at December 31, 2018 are as follows: Warrants Outstanding Warrants Exercisable Exercise Price Range Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price Intrinsic Value $0.01 - $0.70 109,736,992 5.46 $ 0.32 109,736,992 $ 0.32 $ 1,299,223 |
NOTE 12 - EARNINGS (LOSS) PER S
NOTE 12 - EARNINGS (LOSS) PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
NOTE 12 - EARNINGS (LOSS) PER SHARE | NOTE 12 – EARNINGS (LOSS) PER SHARE Net earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Since the Company reflected a net loss for the years ended December 31, 2018 and 2017, respectively, the effect of considering any common stock equivalents, if exercisable, would have been anti-dilutive. Therefore, a separate computation of diluted earnings (loss) per share is not presented. The Company has the following common stock equivalents as of December 31, 2018 and 2017: As of December 31, 2018 As of December 31, 2017 Warrants (exercise price $0.01 - $0.70/share) 109,736,992 43,068,636 Options (exercise price $0.25 - $0.66/share) 20,436,601 9,352,435 130,173,293 52,421,071 |
Note 13 - Business Acquisition
Note 13 - Business Acquisition | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
Note 13 - Business Acquisition | NOTE 13 – BUSINESS ACQUISITION On September 6, 2016, the Company and BlackRidge entered into an Agreement and Plan of Reorganization (the “Reorganization Agreement”) originally dated as of September 6, 2016, and amended on February 22, 2017 to update the number of common shares, warrants, and options granted and outstanding as of the closing date. On February 22, 2017, we completed the actions contemplated by the Reorganization Agreement and merged with and into BlackRidge with BlackRidge continuing as the surviving corporation (“Reorganization”). Upon completion of the Agreement, we issued 3,783,791 shares of our newly designated Series A Preferred Stock and 12,825,683 shares of Common Stock to the stockholders of BlackRidge in exchange for all the issued and outstanding shares of Series A Preferred Stock and Common Stock of BlackRidge. Additionally, certain stockholders of BlackRidge returned for cancellation a total of 16,284,330 shares of our Common Stock. Upon the completion of the Reorganization, BlackRidge became a wholly-owned subsidiary of the Company and the Company had a total of 3,783,791 shares of Series A Preferred Stock and 21,790,683 shares of Common Stock outstanding, with the former BlackRidge stockholders owning 3,783,791 shares or 100% of Series A Preferred Stock and 12,825,683 shares or approximately 58.9% of Common Stock. Upon completion of the Reorganization, we also had outstanding warrants entitling the holders to acquire a total of 18,541,579 shares of the Company’s Common Stock at an average exercise price of $0.46 per share. The Reorganization resulted in a change of control of the Company. For accounting purposes, BlackRidge was treated as the acquirer and the historical financial statements of BlackRidge became the Company’s historical financial statements. The acquisition is intended to constitute a tax-free reorganization pursuant to the applicable provisions of the Internal Revenue Code of 1986, as amended. |
Note 14 - Discontinued Operatio
Note 14 - Discontinued Operations | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
Note 14 - Discontinued Operations | NOTE 14 – DISCONTINUED OPERATIONS On March 31, 2017, the Company completed the sale of substantially all the assets, other than cash, used in or connection with the Company's home grain mill and kitchen mixer business to John Hofman and Bruce Crane, former officers and directors of the Company, in consideration for the assumption by such persons of substantially all the liabilities incurred by the Company in connection with such business. The assets divested consisted of the non-cybersecurity assets of the Company and included accounts receivable, inventory, deposits, property and equipment and intangible assets. The liabilities divested included the non-cybersecurity liabilities of the Company and included accounts payable and accrued expenses and long and short-term notes payable and accrued interest thereon. Upon completion of the divestiture, the Company recognized a $484,927 loss on disposal. Additionally, during the period from February 22, 2017 through March 31, 2017, the Company incurred a loss from discontinued operations of $8,737. The following table shows the value of assets and liabilities divested: Assets Accounts receivable $ 40,044 Deposits and prepaid expenses 90,559 Inventory 1,157,555 Property and equipment 117,254 Intangible assets 62,820 Total Assets 1,468,232 Liabilities Accounts payable and accrued expenses 692,399 Notes payable – short term 64,000 Notes payable – short term, related party 91,679 Line of credit 135,227 Total Liabilities 983,305 Loss on disposal $ 484,927 |
Note 15 - Income Taxes
Note 15 - Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
Note 15 - Income Taxes | NOTE 15 – INCOME TAXES Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due. Deferred taxes relate to differences between the basis of assets and liabilities for financial and income tax reporting which will be either taxable or deductible when the assets or liabilities are recovered or settled. At December 31, 2018 and 2017, the Company had net operating loss (“NOL”) carry-forwards for Federal income tax purposes approximating $51,417,242 and $34,394,555 respectively. At December 31, 2018 and 2017, the Company’s NOL carry-forwards for state income purposes are approximating $59,104,026 and $26,508,562, respectively. These losses are available for future years and expire through 2037. The Federal NOL generated for the tax year ended 12/31/2018 of $11,491,743 will not expire due to NOLs having an indefinite life as enacted in the 2017 Tax Cuts and Jobs Act. The deferred tax asset at December 31, 2018 and 2017 is summarized as follows: December 31, 2018 December 31, 2017 Net operating loss & credit carry forwards $ 11,878,168 $ 7,897,392 Inventory obsolescence reserve 72,645 77,993 Accrued wages, related party 990,408 1,216,954 Accrued interest – convertible debt, related party 270,904 290,845 Depreciation and amortization (508,882) (125,749) Other tax adjustments 4,119 3,566 Deferred Revenue (4,363) (4,625) Valuation allowance (12,702,998) (9,356,375) $ - $ - The Company has taken a 100% valuation allowance against the deferred asset attributable to the NOL carry-forwards and other temporary differences of approximately $12,702,998 and $9,356,375 at December 31, 2018 and 2017, respectively, due to the uncertainty of realizing the future tax benefits. The decrease and increase in valuation allowances for the years ended December 31, 2018 and 2017 of approximately $3,346,623 and ($2,390,872), respectively, are primarily attributable to the Company’s net operating loss during the years then ended, and true ups for state NOLs . The following table displays a reconciliation from the U.S. statutory rate to the effective tax rate and the provision for (benefit from) income taxes for the years ended December 31, 2018 and 2017, respectively: 2018 2017 Tax (expense)/benefit at the US statutory rate of 21% $ (3,346,623) $ 2,390,872 Change in valuation allowance 3,346,623 (2,390,872) $ - $ - The Company accounts for income taxes in accordance with ASC 740, “Income Taxes.” This standard requires the Company to provide a net deferred tax asset or liability equal to the expected future tax benefit or expense of temporary reporting differences between book and tax accounting and any available operating loss or tax credit carryforwards. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. During the years ended December 31, 2018 and 2017, the Company recognized no interest and penalties. The Company had no accruals for interest and penalties at December 31, 2018 and 2017. The tax years 2019, 2018, 2017, and 2016 remain open to examination for federal income tax purposes and by the other major taxing jurisdictions to which the Company is subject. |
Note 16 - Subsequent Events
Note 16 - Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Notes | |
Note 16 - Subsequent Events | NOTE 16 - SUBSEQUENT EVENTS We have evaluated all events that occurred after the balance sheet date through the date when our financial statements were issued to determine if they must be reported. Management has determined that other than those listed below, there were no additional reportable subsequent events to be disclosed. Notes Payable In February 2019, the convertible notes issued on February 23, 2018 and February 27, 2018 for $1,000,000 reached their initial maturity date. The Company is currently in the process of extending the maturity date of these notes. |
Note 1 - Summary of Signicant_2
Note 1 - Summary of Signicant Accounting Policies: Principles of Consolidation (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Principles of Consolidation | Principles of Consolidation BlackRidge Technology International, Inc. BlackRidge Technology Holding, Inc. BlackRidge Technology, Inc. BlackRidge Technology Government, Inc. BlackRidge Secure Services, Inc. All intercompany balances have been eliminated in consolidation. |
Note 1 - Summary of Signicant_3
Note 1 - Summary of Signicant Accounting Policies: Fair Value of Financial Instruments, Policy (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Fair Value of Financial Instruments, Policy | Fair Value of Financial Instruments |
Note 1 - Summary of Signicant_4
Note 1 - Summary of Signicant Accounting Policies: Use of Estimates (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Use of Estimates | Use of Estimates - |
Note 1 - Summary of Signicant_5
Note 1 - Summary of Signicant Accounting Policies: Concentrations (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Concentrations | Concentrations - Significant customers are those which represent more than 10% of the CompanyÂ’s revenue for each period presented, or the CompanyÂ’s accounts receivable balance as of each respective balance sheet date. For each significant customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total net accounts receivable are as follows: Revenue Accounts Receivable Year Ended December 31, December 31, Customers 2018 2017 2018 2017 Customer A 77 % - % - % - % Customer B 10 % 12 % - % 15 % Customer C 4 % 41 % - % - % Customer D - % 34 % - % - % |
Note 1 - Summary of Signicant_6
Note 1 - Summary of Signicant Accounting Policies: Cash and Cash Equivalents (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Note 1 - Summary of Signicant_7
Note 1 - Summary of Signicant Accounting Policies: Accounts Receivable and Allowance for Doubtful Accounts (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts |
Note 1 - Summary of Signicant_8
Note 1 - Summary of Signicant Accounting Policies: Inventory, Policy (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Inventory, Policy | Inventory As of December 31, 2018 As of December 31, 2017 Inventory $ 391,658 $ 376,063 Less: allowance for obsolescence (335,655) (335,655) $ 56,003 $ 40,408 |
Note 1 - Summary of Signicant_9
Note 1 - Summary of Signicant Accounting Policies: Revenue Recognition, Policy (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Revenue Recognition, Policy | Revenue Recognition Revenue recognition for multiple-element arrangements requires judgment to determine if multiple elements exist, whether elements can be accounted for as separate units of accounting, and if so, the fair value for each of the elements. The Company may enter into arrangements that can include various combinations of software, services, and hardware. Where elements are delivered over different periods of time, and when allowed under U.S. GAAP, revenue is allocated to the respective elements based on their relative selling prices at the inception of the arrangement, and revenue is recognized as each element is delivered. We use a hierarchy to determine the fair value to be used for allocating revenue to elements: (i) vendor-specific objective evidence of fair value ("VSOE"), (ii) third-party evidence, and (iii) best estimate of selling price ("ESP"). For software elements, we follow the industry specific software guidance which only allows for the use of VSOE in establishing fair value. Generally, VSOE is the price charged when the deliverable is sold separately, or the price established by management for a product that is not yet sold if it is probable that the price will not change before introduction into the marketplace. ESPs are established as best estimates of what the selling prices would be if the deliverables were sold regularly on a stand-alone basis. Our process for determining ESPs requires judgment and considers multiple factors that may vary over time depending upon the unique facts and circumstances related to each deliverable. Any revenue received that does not yet meet the above recognition standards is recorded to unearned revenue and held as a liability until recognition occurs. |
Note 1 - Summary of Signican_10
Note 1 - Summary of Signicant Accounting Policies: Property, Plant and Equipment, Policy (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Property, Plant and Equipment, Policy | Property and Equipment - The estimated useful lives of the property and equipment are as follows: Property and Equipment Estimated Useful Life Building improvements 15 years Furniture, fixtures and equipment 7 years Computer equipment 5 years |
Note 1 - Summary of Signican_11
Note 1 - Summary of Signicant Accounting Policies: Intangible Assets, Finite-Lived, Policy (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Intangible Assets, Finite-Lived, Policy | Intangible Assets Useful life estimates for the Company's significant intangible asset classes are as follows: Useful Life Patent Costs 20 years Software Licenses 7 years Software Development Costs 15 years |
Note 1 - Summary of Signican_12
Note 1 - Summary of Signicant Accounting Policies: Impairment or Disposal of Long-Lived Assets, Policy (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Impairment or Disposal of Long-Lived Assets, Policy | Impairment of Long-Lived Assets |
Note 1 - Summary of Signican_13
Note 1 - Summary of Signicant Accounting Policies: Earnings Per Share (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Earnings Per Share | Earnings (Loss) Per Share |
Note 1 - Summary of Signican_14
Note 1 - Summary of Signicant Accounting Policies: Income Tax, Policy (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Income Tax, Policy | Income Taxes Provision for income taxes consists of federal and state income taxes in the United States. Due to uncertainty as to the realization of benefits from our deferred tax assets, including net operating loss carry-forwards and other tax credits, we have a full valuation allowance reserved against such assets. We expect to maintain this full valuation allowance at least in the near term. |
Note 1 - Summary of Signican_15
Note 1 - Summary of Signicant Accounting Policies: Share-Based Payment and Stock-Based Compensation, Policy (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Share-Based Payment and Stock-Based Compensation, Policy | Share-Based Payments and Stock-Based Compensation |
Note 1 - Summary of Signican_16
Note 1 - Summary of Signicant Accounting Policies: Recently Enacted Accounting Standards (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policies | |
Recently Enacted Accounting Standards | Recently Enacted Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases In May 2014, in addition to several amendments issued during 2016, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” This pronouncement updated the accounting guidance related to revenue from contracts with customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. The standard defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. These updates are effective for the Company for its annual period ending December 31, 2019, and interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of ASU 2014-09. |
Note 1 - Summary of Signican_17
Note 1 - Summary of Signicant Accounting Policies: Concentrations: Schedules of Concentration of Risk, by Risk Factor (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Schedules of Concentration of Risk, by Risk Factor | Revenue Accounts Receivable Year Ended December 31, December 31, Customers 2018 2017 2018 2017 Customer A 77 % - % - % - % Customer B 10 % 12 % - % 15 % Customer C 4 % 41 % - % - % Customer D - % 34 % - % - % |
Note 1 - Summary of Signican_18
Note 1 - Summary of Signicant Accounting Policies: Inventory, Policy: Schedule of Inventory, Current (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Schedule of Inventory, Current | As of December 31, 2018 As of December 31, 2017 Inventory $ 391,658 $ 376,063 Less: allowance for obsolescence (335,655) (335,655) $ 56,003 $ 40,408 |
Note 3 - Property and Equipme_2
Note 3 - Property and Equipment: Schedule of Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Schedule of Property and Equipment | As of December 31, 2018 As of December 31, 2017 Estimated Useful Life Building improvements 55,390 55,390 15 years Furniture, fixtures and equipment 26,101 26,101 7 years Computer equipment 6,926 8,927 5 years Less: accumulated depreciation (9,596) (790) $ 78,821 $ 87,628 |
Note 4 - Intangible Assets_ Sch
Note 4 - Intangible Assets: Schedule of Finite-Lived Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Schedule of Finite-Lived Intangible Assets | As of December 31, 2018 As of December 31, 2017 Estimated Useful Life Patent Costs 542,846 397,417 15 years Software Licenses 58,260 58,260 7 years Software Development Costs 10,208,061 8,020,775 5 years Less: accumulated amortization (1,888,807) (1,432,808) $ 8,920,360 $ 7,043,644 |
Note 5 - Notes Payable_ Schedul
Note 5 - Notes Payable: Schedule of Short-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Schedule of Short-term Debt | December 31, 2018 December 31, 2017 Beginning Balance $ 50,232 $ 89,221 Notes acquired in business acquisition - 208,811 Repayments – continuing operations (5,000) (38,989) Repayments – discontinued operations - (53,132) Notes divested in disposal of discontinued operations - (155,679) Ending Balance $ 45,232 $ 50,232 |
Note 5 - Notes Payable_ Sched_2
Note 5 - Notes Payable: Schedule of Long-term Debt Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Schedule of Long-term Debt Instruments | December 31, 2018 December 31, 2017 Beginning Balance $ 766,658 $ 1,200,000 Notes acquired in business acquisition - 136,830 Repayments – continuing operations (400,001) (433,342) Repayments – discontinued operations - (1,603) Notes divested in disposal of discontinued operations - (135,227) Ending Balance $ 366,657 $ 766,658 Short Term Portion of Long Term Debt $ 366,657 $ 400,000 Long Term Debt $ - $ 366,658 |
Note 6 - Convertible Notes_ Sch
Note 6 - Convertible Notes: Schedule of Convertible Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Schedule of Convertible Notes Payable | December 31, 2018 December 31, 2017 Beginning Balance $ 601,576 $ 3,996,810 Proceeds from issuance of convertible notes, net of issuance discounts 1,903,438 146,669 Proceeds from issuance of convertible notes – related party - 237,000 Repayments - (100,000) Conversion of notes payable into common stock (570,000) (3,712,638) Debt restructured (112,017) - Amortization of discounts 1,648,647 33,735 Ending Balance $ 3,471,644 $ 601,576 Convertible notes, short term $ 17,860,274 $ 1,150,000 Convertible notes, short term – related party $ 183,172 $ 521,172 convertible notes, long term $ 150,000 $ - Debt discounts $ 14,721,802 $ 1,069,596 |
Note 7 - Commitments and Cont_2
Note 7 - Commitments and Contingencies: Schedule of Future Minimum Rental Payments for Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Schedule of Future Minimum Rental Payments for Operating Leases | Year Ending December 31, 2019 $ 259,851 2020 209,559 2021 214,107 2022 218,654 2023 18,569 2024 and thereafter - Total minimum lease payments $ 920,740 |
Note 8 - Related Party Transa_2
Note 8 - Related Party Transactions: Schedule of Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Payable - Related Party | |
Schedule of Related Party Transactions | December 31, December 31, Party Name: Relationship: Nature of transactions: 2018 2017 John Bluher Chief Financial Officer Expense reimbursement $ 4,465 $ - John Hayes Chief Technology Officer Expense reimbursement 5,225 55,254 Robert Graham Chairman and Chief Executive Officer Expense reimbursement - 6,806 Robert Graham Chairman and Chief Executive Officer Rent - 6,000 $ 9,690 $ 68,060 |
Advances - Related Party | |
Schedule of Related Party Transactions | December 31, December 31, Party Name: Relationship: 2018 2017 Thomas Bruderman Director and significant shareholder $ - $ 65,000 |
Note 10 - Share Based Compens_2
Note 10 - Share Based Compensation: Schedule of Assumptions for Fair Value at the Commitment Date as of Balance Sheet Date (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Schedule of Assumptions for Fair Value at the Commitment Date as of Balance Sheet Date | Commitment Date Expected dividends 0 % Expected term 5 years Risk free rate 1.91 – 2.96 % Volatility 48.24 – 52.49 % |
Note 10 - Share Based Compens_3
Note 10 - Share Based Compensation: Share-based Compensation, Activity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Share-based Compensation, Activity | Employee and Director Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Life Weighted Average Grant Date Fair Value Beginning Balance – December 31, 2016 - Granted 6,962,560 $ 0.60 5 years $ 0.28 Exercised - Expired - Forfeited - Balance – December 31, 2017 6,962,560 $ 0.60 4.65 years $ 0.28 Granted 10,390,741 $ 0.33 5 years $ 0.16 Exercised - Expired (57,827) Forfeited (349,048) Ending Balance – December 31, 2018 16,946,426 $ 0.43 4.32 years $ 0.20 Exercisable options 6,284,597 $ 0.46 4.32 years $ 0.22 The Company’s outstanding employee options at December 31, 2018 are as follows: Options Outstanding Option Exercisable Exercise Price Range Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price Intrinsic Value $0.25 - $0.60 16,946,426 4.32 $ 0.43 6,284,597 $ 0.46 $ - |
Note 10 - Share Based Compens_4
Note 10 - Share Based Compensation: Share-based Compensation, Performance Shares Award Nonvested Activity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Share-based Compensation, Performance Shares Award Nonvested Activity | Non-Vested Options Weighted Average Grant Date Fair Value Beginning Balance – December 31, 2016 - Granted 6,962,560 $ 0.28 Vested (1,373,097) Expired - Forfeited - Balance – December 31, 2017 5,589,463 $ 0.28 Granted 10,390,741 $ 0.16 Vested (4,911,501) Expired (57,827) Forfeited (349,048) Ending Balance – December 31, 2018 10,661,828 $ 0.19 |
NOTE 11 - WARRANTS_ Schedule of
NOTE 11 - WARRANTS: Schedule of Assumptions for Fair Value at the Commitment Date as of Balance Sheet Date (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Assumptions for Fair Value at the Commitment Date as of Balance Sheet Date | Commitment Date Expected dividends 0 % Expected term 5 years Risk free rate 1.91 – 2.96 % Volatility 48.24 – 52.49 % |
Warrant | |
Schedule of Assumptions for Fair Value at the Commitment Date as of Balance Sheet Date | Commitment Date Expected dividends 0 % Expected term 5 - 7 years Risk free rate 2.52 – 3.05 % Volatility 48.24 – 51.35 % |
NOTE 11 - WARRANTS_ Schedule _2
NOTE 11 - WARRANTS: Schedule of Stockholders' Equity Note, Warrants or Rights (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Schedule of Stockholders' Equity Note, Warrants or Rights | Warrants Outstanding Weighted Average Exercise Price Weighted Average Remaining Life Weighted Average Grant Date Fair Value Beginning Balance – December 31, 2016 16,029,605 2.54 years 0.00 Granted 28,094,587 5 years 0.21 Exercised (1,055,556) Expired - Forfeited - Balance – December 31, 2017 43,068,636 $ 0.45 4.69 years $ 0.08 Granted 73,755,856 $ 0.26 6.68 years $ 0.14 Exercised - Expired - Forfeited (7,087,500) Ending Balance – December 31, 2018 109,736,992 $ 0.32 5.46 years $ 0.12 Exercisable options 109,736,992 $ 0.32 5.46 years $ 0.12 The Company’s outstanding warrants at December 31, 2018 are as follows: Warrants Outstanding Warrants Exercisable Exercise Price Range Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price Intrinsic Value $0.01 - $0.70 109,736,992 5.46 $ 0.32 109,736,992 $ 0.32 $ 1,299,223 |
NOTE 12 - EARNINGS (LOSS) PER_2
NOTE 12 - EARNINGS (LOSS) PER SHARE: Schedule of Common Stock Equivalents (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Schedule of Common Stock Equivalents | As of December 31, 2018 As of December 31, 2017 Warrants (exercise price $0.01 - $0.70/share) 109,736,992 43,068,636 Options (exercise price $0.25 - $0.66/share) 20,436,601 9,352,435 130,173,293 52,421,071 |
Note 14 - Discontinued Operat_2
Note 14 - Discontinued Operations: Disposal Groups, Including Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Disposal Groups, Including Discontinued Operations | Assets Accounts receivable $ 40,044 Deposits and prepaid expenses 90,559 Inventory 1,157,555 Property and equipment 117,254 Intangible assets 62,820 Total Assets 1,468,232 Liabilities Accounts payable and accrued expenses 692,399 Notes payable – short term 64,000 Notes payable – short term, related party 91,679 Line of credit 135,227 Total Liabilities 983,305 Loss on disposal $ 484,927 |
Note 15 - Income Taxes_ Schedul
Note 15 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Schedule of Deferred Tax Assets and Liabilities | December 31, 2018 December 31, 2017 Net operating loss & credit carry forwards $ 11,878,168 $ 7,897,392 Inventory obsolescence reserve 72,645 77,993 Accrued wages, related party 990,408 1,216,954 Accrued interest – convertible debt, related party 270,904 290,845 Depreciation and amortization (508,882) (125,749) Other tax adjustments 4,119 3,566 Deferred Revenue (4,363) (4,625) Valuation allowance (12,702,998) (9,356,375) $ - $ - |
Note 15 - Income Taxes_ Sched_2
Note 15 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Schedule of Effective Income Tax Rate Reconciliation | 2018 2017 Tax (expense)/benefit at the US statutory rate of 21% $ (3,346,623) $ 2,390,872 Change in valuation allowance 3,346,623 (2,390,872) $ - $ - |
Note 1 - Summary of Signican_19
Note 1 - Summary of Signicant Accounting Policies: Concentrations: Schedules of Concentration of Risk, by Risk Factor (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts Receivable | ||
Concentration Risk, Percentage | 0.00% | |
Customer A | Revenue | ||
Concentration Risk, Percentage | 77.00% | 0.00% |
Customer B | Revenue | ||
Concentration Risk, Percentage | 10.00% | 12.00% |
Customer C | Revenue | ||
Concentration Risk, Percentage | 4.00% | 41.00% |
Customer D | Revenue | ||
Concentration Risk, Percentage | 34.00% |
Note 1 - Summary of Signican_20
Note 1 - Summary of Signicant Accounting Policies: Inventory, Policy: Schedule of Inventory, Current (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Details | ||
Inventory, Gross | $ 391,658 | $ 376,063 |
Allowance for obsolescence | (335,655) | (335,655) |
Inventory | $ 56,003 | $ 40,408 |
Note 2 - Going Concern (Details
Note 2 - Going Concern (Details) - USD ($) | 12 Months Ended | 104 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
Details | |||
Net Income (Loss) | $ 17,150,967 | $ 15,345,644 | $ 67,047,343 |
Note 3 - Property and Equipme_3
Note 3 - Property and Equipment: Schedule of Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property and equipment, net | $ 78,821 | $ 87,628 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ 9,596 | 790 |
Building Improvements | ||
Property, Plant and Equipment, Useful Life | 15 years | |
Property and equipment, net | $ 55,390 | 55,390 |
Furniture and Fixtures | ||
Property, Plant and Equipment, Useful Life | 7 years | |
Property and equipment, net | $ 26,101 | 26,101 |
Computer Equipment | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Property and equipment, net | $ 6,926 | $ 8,927 |
Note 4 - Intangible Assets (Det
Note 4 - Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Details | ||
Capitalized Intangible Assets | $ 2,332,715 | $ 1,563,122 |
Amortization of Intangible Assets | $ 455,999 | $ 443,021 |
Note 4 - Intangible Assets_ S_2
Note 4 - Intangible Assets: Schedule of Finite-Lived Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible assets, net | $ 8,920,360 | $ 7,043,644 |
Finite-Lived Intangible Assets, Accumulated Amortization | $ (1,888,807) | (1,432,808) |
Patents | ||
Property, Plant and Equipment, Useful Life | 15 years | |
Intangible assets, net | $ 542,846 | 397,417 |
Software Licenses | ||
Property, Plant and Equipment, Useful Life | 7 years | |
Intangible assets, net | $ 58,260 | 58,260 |
Software Development | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Intangible assets, net | $ 10,208,061 | $ 8,020,775 |
Note 5 - Notes Payable_ Sched_3
Note 5 - Notes Payable: Schedule of Short-term Debt (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Short-term notes payable | $ 45,232 | $ 50,232 | $ 89,221 |
Short Term Notes Payable | |||
Notes acquired in business acquisition | 0 | 208,811 | |
Repayments - continuing operations | (5,000) | (38,989) | |
Repayments - discontinued operations | 0 | (53,132) | |
Notes divested in disposal of discontinued operations | $ 0 | $ (155,679) |
Note 5 - Notes Payable_ Sched_4
Note 5 - Notes Payable: Schedule of Long-term Debt Instruments (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Long-term Debt | $ 366,657 | $ 766,658 | $ 1,200,000 |
Current portion of long term debt | 366,657 | 400,000 | |
Notes payable | 0 | 366,658 | |
Long Term Notes Payable | |||
Notes acquired in business acquisition | 0 | 136,830 | |
Repayments - continuing operations | (400,001) | (433,342) | |
Repayments - discontinued operations | 0 | (1,603) | |
Notes divested in disposal of discontinued operations | $ 0 | $ (135,227) |
Note 6 - Convertible Notes_ S_2
Note 6 - Convertible Notes: Schedule of Convertible Notes Payable (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Convertible Debt | $ 3,471,644 | $ 601,576 | $ 3,996,810 |
Proceeds from Issuance of Convertible Preferred Stock | 1,903,438 | 146,669 | |
Proceeds from issuance of convertible notes - related party | 0 | 237,000 | |
Repayments of short term convertible notes | 0 | (100,000) | |
Conversion of notes payable into common stock | (570,000) | (3,712,638) | |
Debt restructured | (112,017) | ||
Amortization of debt discounts | 1,821,189 | 33,735 | |
Convertible notes, short term | 17,860,274 | ||
Convertible notes, short term - related party | 183,172 | 521,172 | |
Due to Related Parties, Noncurrent | 150,000 | 0 | |
Debt discounts | 14,721,802 | ||
Convertible Debt | |||
Amortization of debt discounts | $ 1,648,647 | $ 33,735 |
Note 7 - Commitments and Cont_3
Note 7 - Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Details | ||
Operating Leases, Rent Expense | $ 287,649 | $ 186,640 |
Payments to Acquire Equipment on Lease | $ 2,871 |
Note 7 - Commitments and Cont_4
Note 7 - Commitments and Contingencies: Schedule of Future Minimum Rental Payments for Operating Leases (Details) | Dec. 31, 2018USD ($) |
Details | |
Operating Leases, Future Minimum Payments, Remainder of Fiscal Year | $ 259,851 |
Operating Leases, Future Minimum Payments, Due in Two Years | 209,559 |
Operating Leases, Future Minimum Payments, Due in Three Years | 214,107 |
Operating Leases, Future Minimum Payments, Due in Four Years | 218,654 |
Operating Leases, Future Minimum Payments, Due in Five Years | 18,569 |
Operating Leases, Future Minimum Payments, Due Thereafter | 0 |
Operating Leases, Future Minimum Payments Due | $ 920,740 |
Note 8 - Related Party Transa_3
Note 8 - Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Details | ||
Change in Accrued Interest - Related Party | $ 525,785 | $ 604,145 |
Note 8 - Related Party Transa_4
Note 8 - Related Party Transactions: Schedule of Related Party Transactions (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Payable, Related Parties, Current | $ 9,690 | $ 68,060 |
Advances - related party | 0 | 65,000 |
John Bluher | ||
Accounts Payable, Related Parties, Current | 4,465 | 0 |
John Hayes | ||
Accounts Payable, Related Parties, Current | 5,225 | 55,254 |
Robert Graham | ||
Accounts Payable, Related Parties, Current | 0 | 6,806 |
Robert Graham 2 | ||
Accounts Payable, Related Parties, Current | 0 | 6,000 |
Thomas Bruderman | ||
Advances - related party | $ 0 | $ 65,000 |
Note 9 - Stockholders' Equity (
Note 9 - Stockholders' Equity (Details) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Common Stock, Shares, Outstanding | 96,872,725 | 77,063,171 |
Preferred Stock, Shares Outstanding | 3,577,370 | 3,639,783 |
Stock Issuance 1 | ||
Stock Issued During Period, Shares, New Issues | 1,771,666 |
Note 10 - Share Based Compens_5
Note 10 - Share Based Compensation (Details) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Details | |
Stock Granted, Value, Share-based Compensation, Net of Forfeitures | $ 1,522,580 |
Unrecognized Expense for Unvested Share-based Compensation | $ 2,000,971 |
Note 10 - Share Based Compens_6
Note 10 - Share Based Compensation: Schedule of Assumptions for Fair Value at the Commitment Date as of Balance Sheet Date (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.91% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 48.24% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.96% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 52.49% |
Note 10 - Share Based Compens_7
Note 10 - Share Based Compensation: Share-based Compensation, Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 16,946,426 | 6,962,560 | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 10,390,741 | 6,962,560 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 0.33 | $ 0.60 | |
Share-based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range, Options Granted In Period, Weighted Average Remaining Contractual Term | 5 years | 5 years | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value | $ 0.20 | $ 0.28 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 0.43 | $ 0.60 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term | 4 years 3 months 25 days | 4 years 7 months 24 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.16 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | (57,827) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | (349,048) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 6,284,597 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 0.46 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Remaining Contractual Term | 4 years 3 months 25 days | ||
Weighted Average Grant Date Fair Value - Exercisable Options | $ 0.22 | ||
Employee | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 16,946,426 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 0.43 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term | 4 years 3 months 25 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 6,284,597 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 0.46 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 0 |
Note 10 - Share Based Compens_8
Note 10 - Share Based Compensation: Share-based Compensation, Performance Shares Award Nonvested Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Details | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares | 10,661,828 | 5,589,463 | 0 |
Share-Based Compensation Arrangement By Share-Based Payment Award Options, Grants In Period, Nonvested | 10,390,741 | 6,962,560 | |
Share-based Compensation Arrangement By Share-based Payment Award, Options Nonvested, Weighted Average Grant Date Fair Value, Grants In Period | $ 0.16 | $ 0.28 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | (4,911,501) | (1,373,097) | |
Share-based Compensation Arrangement by Share-based Payment Award, Option, Nonvested, Weighted Average Exercise Price | $ 0.19 | $ 0.28 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | (57,827) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Number of Shares | (349,048) |
NOTE 11 - WARRANTS_ Schedule _3
NOTE 11 - WARRANTS: Schedule of Assumptions for Fair Value at the Commitment Date as of Balance Sheet Date (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.91% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 48.24% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.96% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 52.49% |
Warrant | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.52% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 48.24% |
Warrant | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 7 years |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 3.05% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 51.35% |
NOTE 11 - WARRANTS_ Schedule _4
NOTE 11 - WARRANTS: Schedule of Stockholders' Equity Note, Warrants or Rights (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 16,946,426 | 6,962,560 | 0 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term | 4 years 3 months 25 days | 4 years 7 months 24 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 10,390,741 | 6,962,560 | |
Share-based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range, Options Granted In Period, Weighted Average Remaining Contractual Term | 5 years | 5 years | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.16 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | 0.43 | $ 0.60 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 0.33 | 0.60 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | (349,048) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value | $ 0.20 | $ 0.28 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 6,284,597 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 0.46 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Remaining Contractual Term | 4 years 3 months 25 days | ||
Weighted Average Grant Date Fair Value - Exercisable Options | $ 0.22 | ||
Warrant | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 109,736,992 | 43,068,636 | 16,029,605 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term | 5 years 5 months 16 days | 4 years 8 months 8 days | 2 years 6 months 14 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 73,755,856 | 28,094,587 | |
Share-based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range, Options Granted In Period, Weighted Average Remaining Contractual Term | 6 years 8 months 5 days | 5 years | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.14 | $ 0.21 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ (1,055,556) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | 0.32 | $ 0.45 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 0.26 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | (7,087,500) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value | $ 0.12 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 109,736,992 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 0.32 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Remaining Contractual Term | 5 years 5 months 16 days | ||
Weighted Average Grant Date Fair Value - Exercisable Options | $ 0.12 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 1,299,223 |
Note 14 - Discontinued Operat_3
Note 14 - Discontinued Operations: Disposal Groups, Including Discontinued Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disposal Group, Including Discontinued Operation, Assets | $ 1,468,232 | |
Disposal Group, Including Discontinued Operation, Liabilities | 983,305 | |
Loss on disposal of discontinued operations | $ 0 | 484,927 |
Accounts Receivable | ||
Disposal Group, Including Discontinued Operation, Assets | 40,044 | |
Deposits and Prepaid Expenses | ||
Disposal Group, Including Discontinued Operation, Assets | 90,559 | |
Inventory | ||
Disposal Group, Including Discontinued Operation, Assets | 1,157,555 | |
Property and Equipment | ||
Disposal Group, Including Discontinued Operation, Assets | 117,254 | |
Intangible Assets | ||
Disposal Group, Including Discontinued Operation, Assets | 62,820 | |
Accounts Payable and Accrued Expenses | ||
Disposal Group, Including Discontinued Operation, Liabilities | 692,399 | |
Notes Payable - Short Term | ||
Disposal Group, Including Discontinued Operation, Liabilities | 64,000 | |
Notes Payable - Short Term - Related Party | ||
Disposal Group, Including Discontinued Operation, Liabilities | 91,679 | |
Line of Credit | ||
Disposal Group, Including Discontinued Operation, Liabilities | $ 135,227 |
Note 15 - Income Taxes (Details
Note 15 - Income Taxes (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Details | ||
Operating Loss Carryforwards | $ 51,417,242 | $ 34,394,555 |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | $ 59,104,026 | $ 26,508,562 |
Note 15 - Income Taxes_ Sched_3
Note 15 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Details | ||
Deferred Tax Assets, Operating Loss Carryforwards | $ 11,878,168 | $ 7,897,392 |
Deferred Tax Assets, Operating Loss Carryforwards, Inventory obsolescence reserve | 72,645 | 77,993 |
Deferred Tax Assets, Operating Loss Carryforwards, Accrued wages, related party | 990,408 | 1,216,954 |
Deferred Tax Assets, Operating Loss Carryforwards, Accrued interest - convertible debt, related party | 270,904 | 290,845 |
Deferred Tax Assets, Operating Loss Carryforwards, Depreciation and amortization | (508,882) | (125,749) |
Deferred Tax Assets, Other | 4,119 | 3,566 |
Deferred Tax Assets, Operating Loss Carryforwards, Deferred Revenue | (4,363) | (4,625) |
Deferred Tax Assets, Valuation Allowance | $ (12,702,998) | $ (9,356,375) |
Note 15 - Income Taxes_ Sched_4
Note 15 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Details | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | |
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount | $ 2,390,872 | $ (3,346,623) |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | $ (2,390,872) | $ 3,346,623 |