Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 19, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Blow & Drive Interlock Corp | |
Entity Central Index Key | 0001586495 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 31,350,683 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash | $ 104,373 | $ 775 |
Accounts receivable | 17,331 | 5,355 |
Prepaid expenses | 17,683 | 1,016 |
Total current assets | 139,387 | 7,146 |
Deposits | 6,481 | 6,481 |
Total assets | 145,868 | 13,627 |
Current Liabilities: | ||
Accounts payable | 2,096 | |
Accrued expenses | 28,917 | 65,988 |
Accrued royalty payable | 56,635 | 26,885 |
Accrued interest | 41,349 | 17,155 |
Accrued interest - related parties | 645,118 | 190,618 |
Deferred revenue | 17,182 | 92,162 |
Derivative liability | 29,907 | 22,517 |
Notes payable, net of debt discount of $0 and $7,549 at September 30, 2019 and December 31, 2018, respectively | 67,159 | 117,776 |
Notes payable to related parties | 29,000 | 29,000 |
Convertible notes payable, net of $5,124 and $5,124 at September 30, 2019 and December 31, 2018, respectively | 2,376 | 2,376 |
Total current liabilities | 919,739 | 564,477 |
Non-current Liabilities: | ||
Notes payable, less current portion and net of debt discount of $0 and $6,925 at September 30, 2019 and December 31, 2018, respectively | 18,069 | |
Notes payable to related parties, less current portion | 2,393,900 | 2,020,000 |
Convertible notes, less current portion and net of $3,841 and $5,122 at September 30, 2019 and December 31, 2018, respectively | 17,440 | 13,597 |
Total non-current liabilities | 2,411,340 | 2,051,666 |
Total Liabilities | 3,331,079 | 2,616,143 |
Commitments and Contingencies | ||
Stockholders' Deficit | ||
Preferred stock, par value $0.001, 20,000,000 shares authorized, 1,000,000 and 1,000,000 shares issued or issuable and outstanding as of September 30, 2019 and December 31, 2018, respectively | 1,000 | 1,000 |
Common stock, par value $0.0001, 100,000,000 shares authorized, 30,566,920 and 31,073,529 shares issued or issuable and outstanding as of September 30, 2019 and December 31, 2018, respectively | 3,057 | 3,107 |
Additional paid-in capital | 3,514,249 | 3,489,699 |
Accumulated deficit | (6,703,517) | (6,096,322) |
Total stockholders' deficit | (3,185,211) | (2,602,516) |
Total liabilities and stockholders' deficit | $ 145,868 | $ 13,627 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Notes payable, debt discount current | $ 0 | $ 7,549 |
Convertible notes payable, current | 5,124 | 5,124 |
Notes payable, debt discount noncurrent | 0 | 6,925 |
Convertible notes payable, noncurrent | $ 3,841 | $ 5,122 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | 1,000,000 | 1,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 30,566,920 | 31,073,529 |
Common stock, shares outstanding | 30,566,920 | 31,073,529 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Total revenues | $ 77,342 | $ 241,659 | $ 477,266 | $ 724,155 |
Total cost of revenue | 260 | 18,724 | 14,445 | 95,405 |
Gross profit | 77,082 | 222,934 | 462,821 | 628,749 |
Operating expenses | ||||
Payroll | 32,798 | 240,499 | 243,516 | 706,648 |
Professional fees | 33,667 | 26,176 | 180,964 | 114,230 |
General and administrative | 49,899 | 170,504 | 192,439 | 639,598 |
Depreciation | ||||
Total operating expenses | 116,364 | 437,178 | 616,919 | 1,460,476 |
Loss from operations | (39,282) | (214,244) | (154,098) | (831,727) |
Other income (expense) | ||||
Interest expense, net | (168,626) | (119,208) | (498,871) | (329,586) |
Change in fair value of derivative liability | 5,093 | (7,390) | 9,385 | |
Gain (loss) on extinguishment of debt | 54,764 | |||
Total other income (expenses) | (168,626) | (113,935) | (451,497) | (320,201) |
Loss before provision for income taxes | (207,908) | (328,179) | (605,595) | (1,151,928) |
Provision for income taxes | 1,600 | (800) | ||
Net loss | $ (207,908) | $ (328,179) | $ (607,195) | $ (1,152,728) |
Basic and Diluted Loss Per Common Share | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.04) |
Basic and Diluted Weighted-Average Common Shares Outstanding | 29,453,446 | 31,205,429 | 30,527,566 | 29,772,036 |
Monitoring Revenues [Member] | ||||
Total revenues | $ 49,122 | $ 221,419 | $ 412,365 | $ 664,650 |
Distributorship Revenues [Member] | ||||
Total revenues | 28,220 | 20,240 | 64,901 | 59,505 |
Monitoring Cost of Revenue [Member] | ||||
Total cost of revenue | 260 | 18,724 | 14,445 | 95,405 |
Distributoship Cost of Revenue [Member] | ||||
Total cost of revenue |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - 9 months ended Sep. 30, 2019 - USD ($) | Series A Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Beginning Balance at Dec. 31, 2018 | $ 1,000 | $ 3,107 | $ 3,489,699 | $ (6,096,322) | $ (2,602,516) |
Beginning Balance, shares at Dec. 31, 2018 | 1,000,000 | 31,073,529 | |||
Shares issued for services | $ 25 | 24,475 | 24,500 | ||
Shares issued for services, shares | 250,000 | ||||
Shares returned related to anti-dilution | $ (75) | 75 | |||
Shares returned related to anti-dilution, shares | (756,609) | ||||
Net loss | (607,195) | (607,195) | |||
Ending Balance at Sep. 30, 2019 | $ 1,000 | $ 3,057 | $ 3,514,249 | $ (6,703,517) | $ (3,185,211) |
Ending Balance, shares at Sep. 30, 2019 | 1,000,000 | 30,566,920 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||||
Net loss | $ (207,908) | $ (328,179) | $ (607,195) | $ (1,152,728) | |
Adjustments to reconcile net loss to net cash used in operating activities | |||||
Stock or warrants issued for services | 24,500 | 110,200 | |||
Allowance for doubtful accounts | (26,541) | ||||
Amortization of debt discount | 18,316 | 27,704 | |||
Change in fair value of derivative liability | (5,093) | 7,390 | (9,385) | $ (7,390) | |
Debt converted to common shares | 5,083 | ||||
(Gain)/loss on extinguishment of debt | (54,764) | ||||
Changes in operating assets and liabilities | |||||
Accounts receivable | (11,976) | 50,102 | |||
Prepaid expenses | (16,667) | 6 | |||
Accounts payable | 2,096 | (39,695) | |||
Accrued expenses | (37,071) | 4,863 | |||
Accrued royalties payable | 29,750 | 74,718 | |||
Accrued interest | 27,388 | 99,773 | |||
Accrued interest related party | 454,500 | ||||
Deferred revenue | (74,980) | (68,827) | |||
Net cash used in operating activities | (238,713) | (924,727) | |||
Cash flows from financing activities: | |||||
Proceeds from issuance of common stock | 458,705 | ||||
Proceeds from issuance of notes payable | 21,600 | ||||
Principal payments on notes payable | (31,589) | (34,405) | |||
Proceeds from issuance of convertible notes payable | 20,000 | ||||
Principal payments on convertible notes payable | (5,000) | ||||
Proceeds from issuance of notes payable related party | 373,900 | 600,127 | |||
Payments on note payable related party | (126,050) | ||||
Net cash provided by financing activities | 342,311 | 934,977 | |||
Net increase in cash | 103,598 | 10,250 | |||
Cash at beginning of period | 775 | 31,874 | 31,874 | ||
Cash at end of period | $ 104,373 | $ 42,124 | 104,373 | 42,124 | $ 775 |
Supplemental discolsures of cash flow information | |||||
Cash paid during the period for: Interest paid | 160,063 | 91,634 | |||
Cash paid during the period for: Income taxes paid | 800 | ||||
Supplemental disclosure of non-cash investing and financing activities | |||||
Common stock and warrants issued for services | $ 24,500 | $ 110,200 |
Organization and Nature of Busi
Organization and Nature of Business | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Business | Note 1 - Organization and Nature of Business Blow & Drive Interlock (“the Company”) was incorporated on July 2, 2013 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company markets and rents alcohol ignition interlock devices distributors who lease the devices to DUI/DWI offenders as part of their mandatory court or motor vehicle department programs. The Company has approval for its device in the following states: Arizona and Texas. In 2015, the Company formed BDI Manufacturing, Inc., an Arizona corporation which is a 100% wholly owned subsidiary of Blow & Drive Interlock Corporation. The Company markets, installs and monitors a breath alcohol ignition interlock device (BAIID) called the BDI-747/1, which is a mechanism that is installed on the steering column of an automobile and into which a driver exhales. The device in turn provides a blood-alcohol concentration analysis. If the driver’s blood-alcohol content is higher than a certain pre-programmed limit, the device prevents the ignition from engaging and the automobile from starting. These devices are often required for use by DUI or DWI (“driving under the influence” or “driving while intoxicated”) offenders as part of a mandatory court or motor vehicle department program. The Company licenses the rights to third party distributors to promote the BDI-747/1 and provide services related to the device. The distributorships are for specific geographical areas (either entire states or certain counties within states). The Company currently has entered into two distributorship agreements. Under the distribution agreements the Company typically receives a onetime fee, and then is entitled to receive a per unit registration fee and a per unit monthly fee for each BDI-747/1 unit the distributor has on the road beginning thirty (30) days after the distributor receives the unit. On December 31, 2018, Laurence Wainer, CEO of the Company, and The Doheny Group, a major note holder of the Company, reached an agreement in which Laurence Wainer sold 8,924,000 shares of common stock and 1,000,000 shares of preferred stock for a total of $30,000. Upon completion of the sale, David Haridim, managing member of The Doheny Group, assumed the position of CEO of Blow and Drive. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the results of operations of BDI Manufacturing (the Subsidiary). All material intercompany accounts and transactions between the Company and the Subsidiary have been eliminated in consolidation. The consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to such rules and regulations. These consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The unaudited information contained herein has been prepared on the same basis as the Company’s audited consolidated financial statements, and, in the opinion of the Company’s management, includes all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information for the periods presented. The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2019 or any future period. Use of Estimates in the Preparation of Financial Statements The preparation of the unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. These estimates and assumptions may affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. As a result, actual results could differ from these estimates. Going Concern The Company’s unaudited condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. As of September 30, 2019, the Company had an accumulated deficit of $6,703,517. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease or reduce its operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company will continue to raise funds through the sale of its equity securities or issuance of notes payable to obtain additional operating capital. The Company is dependent upon its ability to, and will continue to attempt to, secure additional equity and/or debt financing until the Company can earn revenue and realize positive cash flow from its operations. There are no assurances that the Company will be successful in earning revenue and realizing positive cash flow from its operations. Without sufficient financing it would be unlikely that the Company will continue as a going concern. Based on the Company’s current rate of cash outflows, cash on hand and proceeds from the prior sale of equity securities and issuance of notes payable, management believes that its current cash will not be sufficient to meet the anticipated cash needs for working capital for the next 12 months. The Company’s plans with respect to its liquidity issues include, but are not limited to, the following: 1) Continue to issue restricted stock for compensation due to consultants and for its legacy accounts payable in lieu of cash payments; and 2) Seek additional capital to continue its operations as it rolls out its current products. The Company is currently evaluating additional debt or equity financing opportunities and may execute them when appropriate. However, there can be no assurances that the Company can consummate such a transaction or consummate a transaction at favorable pricing. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and achieve profitable operations. These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty. Reclassifications Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Revenue Recognition The Company recognizes revenue when earned and related costs of sales and expenses when incurred. The Company recognizes revenue in accordance with FASB ASC Topic 605-10-S99, Revenue Recognition, Overall, SEC Materials Monthly per unit fee revenue is earned and recognized over the term of the contract as support services are provided. Revenues from territory exclusivity are earned when there is persuasive evidence of an arrangement, delivery has occurred, the sales price has been determined and collectability has been reasonably assured. On January 1, 2019, the Company adopted FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The Company’s principal activity from which it generates revenue is a service which is the use of its interlock units. Revenue is measured based on considerations specified in a contract with a customer. A contract exists when it becomes a legally enforceable agreement with a customer. These contracts define each party’s rights, payment terms and other contractual terms and conditions of the sale. Consideration is typically paid at time of sale via credit card, check, or cash when the interlock units are installed on customers’ vehicles A performance obligation is a promise in a contract to provide a distinct service to the customer, which for the Company is transfer of a service to customers. Performance obligations promised in a contract are identified based on the services that will be provided to the customer that are both capable of being distinct and are distinct in the context of the contract, whereby the service is separately identifiable from other promises in the contract. The Company has concluded the services accounted for as the single performance obligation. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. The transaction price is determined based on the consideration to which the Company will be entitled to receive in exchange for transferring goods to the customer. The Company does not issue refunds. The Company recognizes revenue when it satisfies a performance obligation in a contract by providing a service to a customer when the Company installs the interlock units on the customers’ vehicles. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Deferred revenue Deferred revenue consists of customer orders paid in advance of the delivery of the order. Deferred revenue is classified as short-term as the typical order ships within approximately three weeks of placing the order. Deferred revenue is recognized as revenue when the product is shipped to the customer and all other revenue recognition criteria have been met. Due to high overhead cost, the Company has changed it distribution model to contract distributers to supply the equipment to customers and perform the installation. Advertising and Marketing Costs Advertising and marketing costs are recorded as general and administrative expenses when they are incurred. Advertising and marketing expenses were $267and $81,652 for the nine months ended September 30, 2019 and 2018, respectively. Accounts Receivable and Allowance for Doubtful Accounts The Company’s accounts receivable primarily consist of trade receivables. The Company records an allowance for doubtful accounts that is based on historical trends, customer knowledge, any known disputes, and the aging of the accounts receivable balances combined with management’s estimate of future potential recoverability. Receivables are written off against the allowance after all attempts to collect a receivable have failed. The Company believes its allowance for doubtful accounts as of September 30, 2019 and December 31, 2018 is adequate, but actual write-offs could exceed the recorded allowance. Royalty Accrual The Company entered into royalty agreement to be paid out in perpetuity based on number of units sold for specified product model in years 2019, 2018, 2017 and 2016 in connection with notes payable as discussed in Note 12. These estimates were performed at the inception for the notes to reflect the associated debt discount. The Company accruals royalties and is reduced by payments. Derivative Liability The Company applies the provisions of ASC Topic 815-40, Contracts in Entity’s Own Equity (“ASC Topic 815-40”), under which convertible instruments, which contain terms that protect holders from declines in the stock price, may not be exempt from derivative accounting treatment. As a result, embedded conversion options (whose exercise price is not fixed and determinable) in convertible debt (which is not conventionally convertible due to the exercise price not being fixed and determinable) are initially recorded as a liability and are revalued at fair value at each reporting date using the Black Sholes Model. The Company revalues these derivatives each quarter using the Black Sholes Model. The change in valuation is accounted for as a gain or loss in derivative liability. Convertible Debt and Warrants Issued with Convertible Debt Convertible debt is accounted for under the guidelines established by ASC 470, Debt with Conversion and Other Options Beneficial Conversion Features The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing employee options for purposes of ASC 718, Compensation – Stock Compensation For modifications of convertible debt, the Company records a modification that changes the fair value of an embedded conversion feature, including a BCF, as a debt discount which is then amortized to interest expense over the remaining life of the debt. If modification is considered substantial (i.e. greater than 10% of the carrying value of the debt), an extinguishment of debt is deemed to have occurred, resulting in the recognition of an extinguishment gain or loss. Fair Value of Financial Instruments The Company utilizes ASC 820-10, Fair Value Measurement and Disclosure, for valuing financial assets and liabilities measured on a recurring basis. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: Level 1. Observable inputs such as quoted prices in active markets; Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The table below describes the Company’s valuation of financial instruments using guidance from ASC 820-10: Fair Value Measurements Using Level 1 Level 2 Level 3 Balance December 31, 2018 $ - $ 22,517 $ - Change in fair value of derivative liability - 7,390 - Balance September 30, 2019 (unaudited) $ - $ 29,907 $ - Net Income (Loss) Per Share Basic earnings per share is calculated by dividing income available to common stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share is computed using the weighted average number of common and dilutive common share equivalents outstanding during the period. Related Parties Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company. Concentrations All of the Company’s ignition interlock devices are purchased from one supplier in China. The loss of this supplier could have a material impact on the Company’s ability to timely obtain additional units. For the nine months ended September 30, 2019, one distributor, licensed in four states, makes up approximately 89% percent of all revenues from distributors at September 30, 2019. The loss of this distributer would have a material impact on the Company’s revenues. Per an agreement dated August 1, 2019, the Company and its largest distributor, BDI interlock collects the revenue directly from the clients and pays majority of the expenses and in return pays BDIC a leasing fee per on road unit on a monthly basis. This agreement is still in place for the future. Income Taxes The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company also follows ASC 740-10-25, which provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements in accordance with ASC Topic 740, “ Accounting for Income Taxes” Derivative Liabilities The Company assessed the classification of its derivative financial instruments as of September 30, 2019, which consist of convertible instruments and rights to shares of the Company’s common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815. ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as defined. Convertible Instruments The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for “Accounting for Derivative Instruments and Hedging Activities”. ASC 815-40 provides that, among other things, generally, if an event is not within the entity’s control or could require net cash settlement, then the contract shall be classified as an asset or a liability. Recently Issued Accounting Pronouncements |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 3 – Segment Reporting The Company had two reportable segments during the three and nine months ended September 30, 2019: (1) Monitoring and (2) Distributorships. Monitoring fees on Company installed units The Company rents units directly to customers and installs the units in the customer’s vehicles. The rental periods range from a few months to 2 years and include a combination of down payments made by the customer and monthly payments paid under the agreements with the Company. Revenue is recognized from these companies on the straight-line basis over the term of the agreement. Amounts collected in excess of those earned are classified as deferred revenue in the balance sheet, and amounts earned in excess of amounts collected are reflected in accounts receivable in the balance sheet at September 30, 2019 and December 31, 2018. Distributorships The Company enters into arrangements that include multiple deliverables, which typically consist of the sale of exclusive distributorship territory rights, startup supplies package, promotional material, three weeks of onsite training and ongoing monthly support services. The Company accounts for each material element within an arrangement with multiple deliverables as separate units of accounting. Revenue is allocated to each unit of accounting under the guidance of ASC Topic 605-25, Multiple-Element Revenue Arrangements, which provides criteria for separating consideration in multiple-deliverable arrangements by establishing a selling price hierarchy for determining the selling price of a deliverable. The selling price used for each deliverable is based on vendor-specific objective evidence (“VSOE”) if available, third-party evidence if VSOE is not available, or estimated selling price if neither VSOE nor third-party evidence is available. The Company is required to determine the best estimate of selling price in a manner that is consistent with that used to determine the price to sell the deliverable on a standalone basis. The Company generally does not separately sell distributorships or training on a standalone basis. Therefore, the Company does not have VSOE for the selling price of these units nor is third party evidence available and thus management uses its best estimate of selling prices in their allocation of revenue to each deliverable in the multiple element arrangement. The Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Segment gross profit (a): Monitoring $ 48,862 $ 202,694 $ 397,920 $ 569,244 Distributorships 28,220 20,240 64,901 59,505 Gross profit 77,082 222,934 462,821 628,749 Identifiable segment operating expenses (b): Monitoring Distributorships - - Identifiable segment operating income (c): Monitoring 48,862 202,694 397,920 569,244 Distributorships 28,220 20,240 64,901 59,505 77,082 222,934 462,821 628,749 Reconciliation of identifiable segment income to corporate income (d): Payroll 32,798 240,499 243,516 706,648 Professional fees 33,667 26,175 180,964 114,230 General and administrative expenses 49,899 170,504 192,439 639,598 Interest expense 168,626 119,028 498,871 329,586 Change in fair value of derivative liability - (5,093 ) 7,390 (9,385 ) Gain on extinguishment of debt - - (54,764 ) - 284,990 551,113 1,068,416 1,780,677 Loss before provision for income taxes (207,908 ) (328,179 ) (605,595 ) (1,151,928 ) Provision for income taxes - - 1,600 800 Net loss $ (207,908 ) $ (328,179 ) $ (607,195 ) $ (1,152,728 ) Total net property, plant, and equipment assets Monitoring $ - $ - Distributorships - - Corporate - - $ - $ - (a) Segment gross profit includes segment net sales less segment cost of sales (b) Identifiable segment operating expenses consists of identifiable depreciation expense (c) Identifiable segment operating incomes consists of segment gross profit less identifiable operating expense (d) General corporate expense consists of all other non-identifiable expenses On August 1, 2019, the Company shifted its business model such that the Company will only be responsible for manufacturing new units and leasing its new and existing units to distributors. The distributors will be responsible for leasing the units to end users, as well as marketing, installing and servicing the units at the distribtors’ cost. The distributors are currently paying the Company between $25 and $35 per unit per month for all units the distributor has on the road with an end user. As a result of this shift, in future periods the Company anticipates all of its revenue, cost of sales and expenses will be related to distributorship operations and not related to direct monitoring revenue. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Note 4 – Accrued Expenses Accrued Expenses consist of the following: September 30, 2019 December 31, 2018 Accrued payroll and payroll taxes $ 20,004 $ 17,616 Deferred rent - 5,317 Income Tax Payable 6,730 5,930 Other accrued expenses 2,183 37,125 Total $ 28,917 $ 65,988 |
Deferred Revenue
Deferred Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Deferred Revenue | Note 5 - Deferred Revenue The Company classifies income as deferred until the terms of the contract or time frame have been met within the Company’s revenue recognition policy. As of September 30, 2019 and December 31, 2018, deferred revenue consists of the following: September 30, 2019 December 31, 2018 Monitoring deferred revenues $ 17,182 $ 92,162 Distributorship deferred revenues - - Total $ 17,182 $ 92,162 The Company expects deferred revenue to decrease in the fourth quarter of 2019 as the revenue is been recognized. The company requires a deposit for the equipment from the customer in order to install equipment. The installation is performed by the Company. Due to rising over head cost, the company decided to change its distribution model and contracted an distributor to perform the installation of the machine. The company expects deferred revenue to be zero by the year-end. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 6 – Notes Payable Notes payable consist of the following: As of September 30, 2019 As of December 31, 2018 Terms Amount Discount Net Balance Amount Discount Net Balance December 2017 ($50,000) $ - $ - $ - $ 40,736 $ (14,474 ) $ 26,262 October 2018 ($60,000) - - - 42,424 - 42,424 October 2018 ($72,800) 67,159 - 67,159 67,159 - 67,159 Total notes payable 67,159 - 67,159 150,319 (14,474 ) 135,845 Less: non-current portion - - - (24,994 ) 6,925 (18,069 ) Notes payable, current portion $ 67,159 $ - $ 67,159 $ 125,325 $ (7,549 ) $ 117,776 December 2017 - $50,000 On December 1, 2017, the Company provided an agreement to a third party to obtain a $50,000 promissory note in exchange for $50,000 in cash. The promissory note had a maturity date of December 1, 2020 and bears interest at 15% per annum. The note required total payments of $1,733 per month. The Company recorded a debt discount of $22,650 related to the value of the issued shares associated with the process of obtaining the note to be amortized over the life of the note. In January 2019, the note was settled with no additional payment and $43,930 was recognized as a gain on settlement. Total interest expense was $0 and $1,706 for the three months ended September 30, 2019 and 2018, respectively, and $0 and $3,539 for the nine months ended September 30, 2019 and 2018, respectively. October 2018 - $60,000 On October 11, 2018, the Company provided an agreement to a third party to obtain a $60,000 promissory note in exchange for $59,105 in cash ($895 in processing fee was deducted from cash). The promissory note had a maturity date of May 5, 2019 and bears interest at 55% per annum. The note required total payments of $561.43 each business day. The note was settled on January 16, 2019 for $30,806, and a gain on settlement was recorded for $10,834. Total interest expense was $0 and $0 for the three months ended September 30, 2019 and 2018, respectively, and $0 and $0 for the nine months ended September 30, 2019 and 2018, respectively. October 2018 - $72,800 On October 4, 2018, the Company provided an agreement to a third party to obtain a $72,800 promissory note in exchange for $72,800 in cash. The promissory note had a maturity date of October 4, 2019 and bears interest at 51% per annum. The note required total payments of $11,526.67 per month for the first six months and $6,794.67 per month for the last six months. The note was settled on January 16, 2019 for $30,806, and a gain on settlement was recorded for $10,834. Total interest expense was $8,536 and $0 for the three months ended September 30, 2019 and 2018, respectively, and $17,126 and $0 for the nine months ended September 30, 2019 and 2018, respectively. |
Notes Payable - Related Parties
Notes Payable - Related Parties | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable - Related Parties | Note 7 – Notes Payable – Related Parties Notes payable to related parties consist of the following: Terms September 30, 2019 December 31, 2018 August 2018 ($1,365,000) – $ 2,020,000 $ 2,020,000 December 2018 ($6,000) 6,000 6,000 December 2018 ($23,000) 23,000 23,000 January 2019 ($32,700) 32,700 - January 2019 ($40,000) 40,000 - January 2019 ($14,500) 14,500 - February 2019 ($15,000) 15,000 - February 2019 ($5,000) 5,000 - March 2019 ($10,000) 10,000 - May 2019 ($20,000) 20,000 - June 2019 ($89,000) 89,000 - July 2019 ($13,000) 13,000 - July 2019 ($8,000) 8,000 - July 2019 ($25,000) 25,000 - September 2019 ($101,700) 101,700 - August 2019 ($2,183) 2,183 - Total notes payable to related parties 2,425,083 2,049,000 Less: non-current portion (2,396,083 ) (2,020,000 ) Notes payable to related parties, current portion $ 29,000 $ 29,000 December 2018 - $2,222,000 On December 1, 2018, the Company entered into an agreement with a related third party to replace the August 2018 note of $1,365,000 with a new note for $2,020,000. The new note also includes a default penalty of $635,000 on the August 2018 note and $20,000 for a missed payment on the August 2018 note. The note calls for interest only payments of $50,500 per month for the life of the note. The entire principal is due on December 1, 2023. Accrued interest payments totaling $202,000 were not made by the Company. Per the note agreement, this amount was added to the principal, thus increasing the principal amount to $2,222,000. Total interest expense was $303,000 and $0 for the nine months ended September 30, 2019 and 2018, respectively. Total interest expense was $151,500 and $0 for the three months ended September 30, 2019 and 2018, respectively. December 2018 - $6,000 On December 17, 2018, the Company entered into an agreement with a related party, Doheny Group, to obtain a $6,000 loan. The note bears no interest and is due in full on December 17, 2019. December 2018 - $23,000 On December 31, 2018, the Company entered into an agreement with a related party, Doheny Group, to obtain a $23,000 loan. The note bears no interest and is due in full on December 31, 2019. January 2019 - $32,700 On January 3, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $32,700 loan. The note bears no interest and is due in full on January 3, 2020. January 2019 - $40,000 On January 11, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $40,000 loan. The note bears no interest and is due in full on January 11, 2020. January 2019 - $14,500 On January 15, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $14,500 loan. The note bears no interest and is due in full on January 15, 2020. February 2019 - $15,000 On February 1, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $15,000 loan. The note bears no interest and is due in full on February 1, 2020. February 2019 - $5,000 On February 19, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $5,000 loan. The note bears no interest and is due in full on February 19, 2020. March 2019 - $10,000 On March 4, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $10,000 loan. The note bears no interest and is due in full on March 4, 2020. May 2019 - $20,000 On May 1, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $20,000 loan. The note bears no interest and is due in full on May 1, 2020. June 2019 - $89,000 On June 3, 2019, the Company entered into an agreement with a related party, Doheny Group, to obtain a $89,000 loan. The note bears no interest and is due in full on June 3, 2020. July 2019 - $13,000 Promissory Note of $13,000 payable to the Doheny Group at July 10, 2019. Interest is 0% simple interest, balloon payment of $13,000 due July 10, 2020. July 2019 - $8,000 Promissory Note of $8,000 payable to the Doheny Group at July 18, 2019. Interest is 0% simple interest, balloon payment of $8,000 due July 18, 2020. July 2019 - $25,000 Promissory Note of $25,000 payable to the Doheny Group at July 25, 2019. Interest is 0% simple interest, balloon payment of $25,000 due July 25, 2020. September 2019 - $101,700 Promissory Note of $101,700 payable to the Doheny Group at September 27, 2019. Interest is 0% simple interest, balloon payment of $101,700 due September 27, 2020. |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | Note 8 – Convertible Notes Payable Convertible notes payable consists of the following: As of September 30, 2019 As of December 31, 2018 Terms Amount Discount Net Balance Amount Discount Net Balance August 2015 ($15,000) 7,500 - 7,500 7,500 - 7,500 March 2018 ($20,000) 20,000 (7,684 ) 12,316 20,000 (11,527 ) 8,473 Total convertible notes payable 27,500 (7,684 ) 19,816 27,500 (11,527 ) 15,973 Less: non-current portion (20,000 ) 2,560 (17,440 ) (20,000 ) 6,403 (13,597 ) Convertible notes payable, current portion $ 7,500 $ (5,124 ) $ 2,376 $ 7,500 $ (5,124 ) $ 2,376 August 2015 - $15,000 On August 7, 2015, the Company entered into an agreement with a third party non-affiliate and issued a 7.5% interest bearing convertible debenture for $15,000 due on August 7, 2017, with conversion features commencing after 180 days following the date of the note. Payments of interest only were due monthly beginning September 2015. The loan is convertible at 70% of the average of the closing prices for the common stock during the five trading days prior to the conversion date. In connection with this Convertible note payable, the Company recorded a $5,770 discount on debt, related to the beneficial conversion feature of the note to be amortized over the life of the note or until the note is converted or repaid. This note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value (See Note 9). On May 6, 2016 the note holder elected to convert $7,500 in principal into 30,000 shares of common stock. The note is currently in default. In connection with the issuance of the August Convertible Note Payable, the Company issued a warrant on August 7, 2015 to purchase 30,000 shares of the Company’s common stock at a purchase price of $0.50 per share. The Black Scholes model was used in valuing the warrants in determining the relative fair value of the warrants issued in connection with the convertible note payable using the following inputs: Expected Term – 3 years, Expected Dividend Rate – 0%, Volatility – 100%, Risk Free Interest Rate -1.08%. The Company recorded an additional $4,873 discount on debt, related to the relative fair value of the warrants issued associated with the note to be amortized over the life of the note. Total interest expense was $7,500 and $0 for the nine months ended September 30, 2019 and 2018, respectively. March 2018 - $20,000 On March 9, 2018, the Company entered into an agreement with a non-affiliated shareholder and issued a 10% interest bearing convertible debenture for $20,000 due on March 9, 2021. Payments of interest is in cash for the first six months, thereafter, interest may be paid either in cash or common stock of the Company. The loan is convertible at 61% of the average of the closing prices for the common stock during the five trading days prior to the conversion date but may not be converted if such conversion would cause the holder to own more than 4.9% of outstanding common stock after giving effect to the conversion. In connection with this Convertible Note Payable, the Company recorded a $20,000 discount on debt (the total discount was $47,768, of which $27,768 was expensed), related to the beneficial conversion feature of the note to be amortized over the life of the note or until the note is converted or repaid. This note was bifurcated with the embedded conversion option recorded as a derivative liability at fair value. As of September 30, 2018, this note has not been converted. Total interest expense was $20,000 and $0 for the nine months ended September 30, 2019 and 2018, respectively. |
Derivative Liabilities
Derivative Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | Note 9 – Derivative Liabilities Derivative liabilities consisted of the following: September 30, 2019 December 31, 2018 August 2015 - $15,000 convertible debt $ 6,359 $ 6,523 March 2018 - $20,000 convertible debt 23,549 15,994 Total derivative liabilities $ 29,907 $ 22,517 The Company applies the provisions of ASC Topic 815-40, Contracts in Entity’s Own Equity (“ASC Topic 815-40”), under which convertible instruments, which contain terms that protect holders from declines in the stock price, may not be exempt from derivative accounting treatment. As a result, embedded conversion options (whose exercise price is not fixed and determinable) in convertible debt (which is not conventionally convertible due to the exercise price not being fixed and determinable) are initially recorded as a liability and are revalued at fair value at each reporting date using the Black Sholes Model. August 2015 Convertible Debt - $15,000 In August 2015, the Company entered into a $15,000 convertible note with variable conversion pricing. The following inputs were used within the Black Sholes Model to determine the initial relative fair values of the $15,000 convertible note with expected term of 1.58 years, expected dividend rate of 0%, volatility of 100% and risk free interest rate 0.61%. March 2018 Convertible Debt - $20,000 In March 2018, the Company entered into a $20,000 convertible note with variable conversion pricing. The following inputs were used within a binomial model to determine the initial relative fair values of the $20,000 convertible note with expected term of 2.44 years, expected dividend rate of 0%, volatility of 160% and risk free interest rate 2.49%. The Company revalues these derivatives each quarter using the Black Sholes Model. The change in valuation is accounted for as a gain or loss in derivative liability. The following table describes the Derivative liability as of December 31, 2017 and September 30, 2018. Balance Additions Changes Balance August 2015 - $15,000 convertible debt $ 6,523 $ - $ (165 ) $ 6,359 March 2018 - $20,000 convertible debt 15,994 - 7,555 23,549 Total $ 22,517 $ - $ 7,390 $ 29,907 |
Accrued Royalties Payable
Accrued Royalties Payable | 9 Months Ended |
Sep. 30, 2019 | |
Accrued Royalties Payable | |
Accrued Royalties Payable | Note 10 – Accrued Royalties Payable The Company has estimated the royalties to be paid out in perpetuity under royalty agreements. The Company entered into royalty agreement as follows: ● November 2017 Royalty Agreement ● August 2018 Royalty Agreement ● December 2018 royalty Agreement Based on the royalty agreement, the Company had the following royalty accruals: September 30, 2019 December 31, 2018 November 2017 royalty agreement $ 3,327 $ 3,327 August 2018 royalty agreement 18,058 18,058 December 2018 royalty agreement 35,250 5,500 Total accrued royalties $ 56,635 $ 26,885 Royalty expense was $8,100 and $25,650 for the three months ended September 30, 2019 and 2018, respectively, and $29,751 and $115,595 for the nine months ended September 30, 2019 and 2018, respectively. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Note 11 – Stockholders’ Equity Preferred Stock The Company’s articles of incorporation authorize the Company to issue up to 20,000,000 preferred shares of $0.001 par value. Series A Preferred Stock The Company has been authorized to issue 1,000,000 shares of Series A Preferred Stock. The Series A shares have the following preferences: no dividend rights; no liquidation preference over the Company’s common stock; no conversion rights; no redemption rights; no call rights by the Company; each share of Series A Preferred stock will have one hundred (100) votes on all matters validly brought to the Company’s common stockholders During the nine months ended September 30, 2019, the Company entered into a material definitive agreement to issue 1,000,000 shares of series A preferred stock to an officer and director of the Company with a preliminary estimated value of $350,000. As of September 30, 2019, the total number of preferred shares issued or issuable was 1,000,000. Common Stock The Company has authorized 100,000,000 shares of $.0001. Holders of common stock are entitled to one vote for each share held. There are no restrictions that limit the Company’s ability to pay dividends on its common stock, subject to the requirements of the Delaware Revised Statutes. The Company has not declared any dividends since incorporation. During the nine months ended September 30, 2019, the |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2019 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | Note 12 – Warrants The Company issued warrants in individual sales and in connection with common stock purchase agreements. The warrants have expiration dates ranging from three to four years from the date of grant and exercise prices ranging from $0.10 to $1.00. A summary of warrant activity for the periods presented is as follows: Weighted Average Warrants for Weighted Average Remaining Aggregate Common Shares Exercise Price Contractual Term Intrinsic Value Outstanding as of December 31, 2017 5,607,176 $ 0.51 $ 3.19 412,864 Granted 930,410 1.29 4.00 (412,864 ) Exercised - - - - Forfeited, cancelled, expired - - - - Outstanding as of December 31, 2018 6,537,586 $ 0.51 $ 3.19 - Granted - 1.29 4.00 - Exercised - - - Forfeited, cancelled, expired - - - Outstanding as of September 30, 2019 6,537,586 $ 0.55 $ 1.85 - |
Income (Loss) Per Share
Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Share | Note 13 – Income (Loss) Per Share Net income (loss) per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. The following shares are not included in the computation of diluted income (loss) per share, because their inclusion would be anti-dilutive: Nine Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Preferred shares - - - Convertible notes 434,058 58,299 434,058 58,299 Warrants 6,537,586 5,597,586 6,537,586 5,597,586 Options - - - - Total anti-dilutive weighted average shares 6,971,644 5,655,885 6,971,644 5,655,885 If all dilutive securities had been exercised at September 30, 2019, the total number of common shares outstanding would be as follows: Common Shares 30,566,920 Preferred Shares - Convertible notes 434,058 Warrants 6,537,586 Options - Total potential shares 37,538,564 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14 – Commitments and Contingencies On December 1, 2016, the Company entered into a four-year lease with Cahuenga Management LLC for a storefront location at 15503 Cahuenga Blvd., North Hollywood, California 91601. Base rent under the lease is $2,200 per month, with an escalating provision up to $2,404 throughout the lease term. The rental agreement includes operating expenses such as common area maintenance, property taxes and insurance. The Company moved into the offices of David Haridim effective January 1, 2019. David Haridim is not charging the Company rent. On August 28, 2017, the Company entered into a one-year lease with B3 Investments, LLC for a storefront location at Suites D104 and D105, 2406 24 th Total rent expense was $50,556 and $(5,306) for the three months ended September 30, 2019 and 2018, respectively, and $94,688 and $95,082 for the nine months ended September 30, 2019 and 2018, respectively. Legal Proceedings In the ordinary course of business, the Company from time to time is involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon the Company’s financial condition and/or results of operations. However, in the opinion of management, other than as set forth herein, matters currently pending or threatened against the Company are not expected to have a material adverse effect on the Company’s financial position or results of operations. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 15 – Related Party Transactions The Company had the following related party transactions: ● Promissory Note of $101,700 payable to the Doheny Group at September 27, 2019. Interest is 0% simple interest, balloon payment of $101,700 due September 27, 2020. ● Promissory Note of $13,000 payable to the Doheny Group at July 10, 2019. Interest is 0% simple interest, balloon payment of $13,000 due July 10, 2020. ● Promissory Note of $8,000 payable to the Doheny Group at July 18, 2019. Interest is 0% simple interest, balloon payment of $8,000 due July 18, 2020. ● Promissory Note of $25,000 payable to the Doheny Group at July 25, 2019. Interest is 0% simple interest, balloon payment of $25,000 due July 25, 2020. ● Notes payable of $1,365,000 to the Doheny Group. ● 3,208,017 shares of common stock, of which 1,863,152 were granted to the Doheny Group in relation to notes payable and 1,294,865 were granted to the Doheny Group as anti-dilution shares. ● 50,000 warrants were granted to David Haridim. ● Notes payable of $2,275,200 to the Doheny Group at June 30, 2019 (refer to notes payable related party section) |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 16 – Subsequent Events The Company follows the guidance in FASB ASC Topic 855, Subsequent Events |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the results of operations of BDI Manufacturing (the Subsidiary). All material intercompany accounts and transactions between the Company and the Subsidiary have been eliminated in consolidation. The consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to such rules and regulations. These consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The unaudited information contained herein has been prepared on the same basis as the Company’s audited consolidated financial statements, and, in the opinion of the Company’s management, includes all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information for the periods presented. The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2019 or any future period. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of the unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. These estimates and assumptions may affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. As a result, actual results could differ from these estimates. |
Going Concern | Going Concern The Company’s unaudited condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. As of September 30, 2019, the Company had an accumulated deficit of $6,703,517. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease or reduce its operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company will continue to raise funds through the sale of its equity securities or issuance of notes payable to obtain additional operating capital. The Company is dependent upon its ability to, and will continue to attempt to, secure additional equity and/or debt financing until the Company can earn revenue and realize positive cash flow from its operations. There are no assurances that the Company will be successful in earning revenue and realizing positive cash flow from its operations. Without sufficient financing it would be unlikely that the Company will continue as a going concern. Based on the Company’s current rate of cash outflows, cash on hand and proceeds from the prior sale of equity securities and issuance of notes payable, management believes that its current cash will not be sufficient to meet the anticipated cash needs for working capital for the next 12 months. The Company’s plans with respect to its liquidity issues include, but are not limited to, the following: 1) Continue to issue restricted stock for compensation due to consultants and for its legacy accounts payable in lieu of cash payments; and 2) Seek additional capital to continue its operations as it rolls out its current products. The Company is currently evaluating additional debt or equity financing opportunities and may execute them when appropriate. However, there can be no assurances that the Company can consummate such a transaction or consummate a transaction at favorable pricing. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and achieve profitable operations. These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty. |
Reclassifications | Reclassifications Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when earned and related costs of sales and expenses when incurred. The Company recognizes revenue in accordance with FASB ASC Topic 605-10-S99, Revenue Recognition, Overall, SEC Materials Monthly per unit fee revenue is earned and recognized over the term of the contract as support services are provided. Revenues from territory exclusivity are earned when there is persuasive evidence of an arrangement, delivery has occurred, the sales price has been determined and collectability has been reasonably assured. On January 1, 2019, the Company adopted FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The Company’s principal activity from which it generates revenue is a service which is the use of its interlock units. Revenue is measured based on considerations specified in a contract with a customer. A contract exists when it becomes a legally enforceable agreement with a customer. These contracts define each party’s rights, payment terms and other contractual terms and conditions of the sale. Consideration is typically paid at time of sale via credit card, check, or cash when the interlock units are installed on customers’ vehicles A performance obligation is a promise in a contract to provide a distinct service to the customer, which for the Company is transfer of a service to customers. Performance obligations promised in a contract are identified based on the services that will be provided to the customer that are both capable of being distinct and are distinct in the context of the contract, whereby the service is separately identifiable from other promises in the contract. The Company has concluded the services accounted for as the single performance obligation. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. The transaction price is determined based on the consideration to which the Company will be entitled to receive in exchange for transferring goods to the customer. The Company does not issue refunds. The Company recognizes revenue when it satisfies a performance obligation in a contract by providing a service to a customer when the Company installs the interlock units on the customers’ vehicles. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. |
Deferred Revenue | Deferred revenue Deferred revenue consists of customer orders paid in advance of the delivery of the order. Deferred revenue is classified as short-term as the typical order ships within approximately three weeks of placing the order. Deferred revenue is recognized as revenue when the product is shipped to the customer and all other revenue recognition criteria have been met. Due to high overhead cost, the Company has changed it distribution model to contract distributers to supply the equipment to customers and perform the installation. |
Advertising and Marketing Costs | Advertising and Marketing Costs Advertising and marketing costs are recorded as general and administrative expenses when they are incurred. Advertising and marketing expenses were $267and $81,652 for the nine months ended September 30, 2019 and 2018, respectively. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company’s accounts receivable primarily consist of trade receivables. The Company records an allowance for doubtful accounts that is based on historical trends, customer knowledge, any known disputes, and the aging of the accounts receivable balances combined with management’s estimate of future potential recoverability. Receivables are written off against the allowance after all attempts to collect a receivable have failed. The Company believes its allowance for doubtful accounts as of September 30, 2019 and December 31, 2018 is adequate, but actual write-offs could exceed the recorded allowance. |
Royalty Accrual | Royalty Accrual The Company entered into royalty agreement to be paid out in perpetuity based on number of units sold for specified product model in years 2019, 2018, 2017 and 2016 in connection with notes payable as discussed in Note 12. These estimates were performed at the inception for the notes to reflect the associated debt discount. The Company accruals royalties and is reduced by payments. |
Derivative Liability | Derivative Liability The Company applies the provisions of ASC Topic 815-40, Contracts in Entity’s Own Equity (“ASC Topic 815-40”), under which convertible instruments, which contain terms that protect holders from declines in the stock price, may not be exempt from derivative accounting treatment. As a result, embedded conversion options (whose exercise price is not fixed and determinable) in convertible debt (which is not conventionally convertible due to the exercise price not being fixed and determinable) are initially recorded as a liability and are revalued at fair value at each reporting date using the Black Sholes Model. The Company revalues these derivatives each quarter using the Black Sholes Model. The change in valuation is accounted for as a gain or loss in derivative liability. |
Convertible Debt and Warrants Issued with Convertible Debt | Convertible Debt and Warrants Issued with Convertible Debt Convertible debt is accounted for under the guidelines established by ASC 470, Debt with Conversion and Other Options Beneficial Conversion Features The Company calculates the fair value of warrants issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing employee options for purposes of ASC 718, Compensation – Stock Compensation For modifications of convertible debt, the Company records a modification that changes the fair value of an embedded conversion feature, including a BCF, as a debt discount which is then amortized to interest expense over the remaining life of the debt. If modification is considered substantial (i.e. greater than 10% of the carrying value of the debt), an extinguishment of debt is deemed to have occurred, resulting in the recognition of an extinguishment gain or loss. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company utilizes ASC 820-10, Fair Value Measurement and Disclosure, for valuing financial assets and liabilities measured on a recurring basis. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: Level 1. Observable inputs such as quoted prices in active markets; Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The table below describes the Company’s valuation of financial instruments using guidance from ASC 820-10: Fair Value Measurements Using Level 1 Level 2 Level 3 Balance December 31, 2018 $ - $ 22,517 $ - Change in fair value of derivative liability - 7,390 - Balance September 30, 2019 (unaudited) $ - $ 29,907 $ - |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic earnings per share is calculated by dividing income available to common stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share is computed using the weighted average number of common and dilutive common share equivalents outstanding during the period. |
Related Parties | Related Parties Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company. |
Concentrations | Concentrations All of the Company’s ignition interlock devices are purchased from one supplier in China. The loss of this supplier could have a material impact on the Company’s ability to timely obtain additional units. For the nine months ended September 30, 2019, one distributor, licensed in four states, makes up approximately 89% percent of all revenues from distributors at September 30, 2019. The loss of this distributer would have a material impact on the Company’s revenues. Per an agreement dated August 1, 2019, the Company and its largest distributor, BDI interlock collects the revenue directly from the clients and pays majority of the expenses and in return pays BDIC a leasing fee per on road unit on a monthly basis. This agreement is still in place for the future. |
Income Taxes | Income Taxes The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company also follows ASC 740-10-25, which provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements in accordance with ASC Topic 740, “ Accounting for Income Taxes” |
Derivative Liabilities | Derivative Liabilities The Company assessed the classification of its derivative financial instruments as of September 30, 2019, which consist of convertible instruments and rights to shares of the Company’s common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815. ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as defined. |
Convertible Instruments | Convertible Instruments The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for “Accounting for Derivative Instruments and Hedging Activities”. ASC 815-40 provides that, among other things, generally, if an event is not within the entity’s control or could require net cash settlement, then the contract shall be classified as an asset or a liability. Recently Issued Accounting Pronouncements |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Financial Instruments Measured at Fair Value on Recurring Basis | The table below describes the Company’s valuation of financial instruments using guidance from ASC 820-10: Fair Value Measurements Using Level 1 Level 2 Level 3 Balance December 31, 2018 $ - $ 22,517 $ - Change in fair value of derivative liability - 7,390 - Balance September 30, 2019 (unaudited) $ - $ 29,907 $ - |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Net Sales and Identifiable Operating Income by Segment | The Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Segment gross profit (a): Monitoring $ 48,862 $ 202,694 $ 397,920 $ 569,244 Distributorships 28,220 20,240 64,901 59,505 Gross profit 77,082 222,934 462,821 628,749 Identifiable segment operating expenses (b): Monitoring Distributorships - - Identifiable segment operating income (c): Monitoring 48,862 202,694 397,920 569,244 Distributorships 28,220 20,240 64,901 59,505 77,082 222,934 462,821 628,749 Reconciliation of identifiable segment income to corporate income (d): Payroll 32,798 240,499 243,516 706,648 Professional fees 33,667 26,175 180,964 114,230 General and administrative expenses 49,899 170,504 192,439 639,598 Interest expense 168,626 119,028 498,871 329,586 Change in fair value of derivative liability - (5,093 ) 7,390 (9,385 ) Gain on extinguishment of debt - - (54,764 ) - 284,990 551,113 1,068,416 1,780,677 Loss before provision for income taxes (207,908 ) (328,179 ) (605,595 ) (1,151,928 ) Provision for income taxes - - 1,600 800 Net loss $ (207,908 ) $ (328,179 ) $ (607,195 ) $ (1,152,728 ) Total net property, plant, and equipment assets Monitoring $ - $ - Distributorships - - Corporate - - $ - $ - |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expense | Accrued Expenses consist of the following: September 30, 2019 December 31, 2018 Accrued payroll and payroll taxes $ 20,004 $ 17,616 Deferred rent - 5,317 Income Tax Payable 6,730 5,930 Other accrued expenses 2,183 37,125 Total $ 28,917 $ 65,988 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Schedule of Deferred Revenue | As of September 30, 2019 and December 31, 2018, deferred revenue consists of the following: September 30, 2019 December 31, 2018 Monitoring deferred revenues $ 17,182 $ 92,162 Distributorship deferred revenues - - Total $ 17,182 $ 92,162 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable consist of the following: As of September 30, 2019 As of December 31, 2018 Terms Amount Discount Net Balance Amount Discount Net Balance December 2017 ($50,000) $ - $ - $ - $ 40,736 $ (14,474 ) $ 26,262 October 2018 ($60,000) - - - 42,424 - 42,424 October 2018 ($72,800) 67,159 - 67,159 67,159 - 67,159 Total notes payable 67,159 - 67,159 150,319 (14,474 ) 135,845 Less: non-current portion - - - (24,994 ) 6,925 (18,069 ) Notes payable, current portion $ 67,159 $ - $ 67,159 $ 125,325 $ (7,549 ) $ 117,776 |
Notes Payable - Related Parti_2
Notes Payable - Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable Related Parties | Notes payable to related parties consist of the following: Terms September 30, 2019 December 31, 2018 August 2018 ($1,365,000) – $ 2,020,000 $ 2,020,000 December 2018 ($6,000) 6,000 6,000 December 2018 ($23,000) 23,000 23,000 January 2019 ($32,700) 32,700 - January 2019 ($40,000) 40,000 - January 2019 ($14,500) 14,500 - February 2019 ($15,000) 15,000 - February 2019 ($5,000) 5,000 - March 2019 ($10,000) 10,000 - May 2019 ($20,000) 20,000 - June 2019 ($89,000) 89,000 - July 2019 ($13,000) 13,000 - July 2019 ($8,000) 8,000 - July 2019 ($25,000) 25,000 - September 2019 ($101,700) 101,700 - August 2019 ($2,183) 2,183 - Total notes payable to related parties 2,425,083 2,049,000 Less: non-current portion (2,396,083 ) (2,020,000 ) Notes payable to related parties, current portion $ 29,000 $ 29,000 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes Payable | Convertible notes payable consists of the following: As of September 30, 2019 As of December 31, 2018 Terms Amount Discount Net Balance Amount Discount Net Balance August 2015 ($15,000) 7,500 - 7,500 7,500 - 7,500 March 2018 ($20,000) 20,000 (7,684 ) 12,316 20,000 (11,527 ) 8,473 Total convertible notes payable 27,500 (7,684 ) 19,816 27,500 (11,527 ) 15,973 Less: non-current portion (20,000 ) 2,560 (17,440 ) (20,000 ) 6,403 (13,597 ) Convertible notes payable, current portion $ 7,500 $ (5,124 ) $ 2,376 $ 7,500 $ (5,124 ) $ 2,376 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liabilities | Derivative liabilities consisted of the following: September 30, 2019 December 31, 2018 August 2015 - $15,000 convertible debt $ 6,359 $ 6,523 March 2018 - $20,000 convertible debt 23,549 15,994 Total derivative liabilities $ 29,907 $ 22,517 |
Schedule of Revalue of Derivatives Using Black Scholes Model | The following table describes the Derivative liability as of December 31, 2017 and September 30, 2018. Balance Additions Changes Balance August 2015 - $15,000 convertible debt $ 6,523 $ - $ (165 ) $ 6,359 March 2018 - $20,000 convertible debt 15,994 - 7,555 23,549 Total $ 22,517 $ - $ 7,390 $ 29,907 |
Accrued Royalties Payable (Tabl
Accrued Royalties Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accrued Royalties Payable | |
Schedule of Accrued Royalties Payable | Based on the royalty agreement, the Company had the following royalty accruals: September 30, 2019 December 31, 2018 November 2017 royalty agreement $ 3,327 $ 3,327 August 2018 royalty agreement 18,058 18,058 December 2018 royalty agreement 35,250 5,500 Total accrued royalties $ 56,635 $ 26,885 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of Warrant Activity | A summary of warrant activity for the periods presented is as follows: Weighted Average Warrants for Weighted Average Remaining Aggregate Common Shares Exercise Price Contractual Term Intrinsic Value Outstanding as of December 31, 2017 5,607,176 $ 0.51 $ 3.19 412,864 Granted 930,410 1.29 4.00 (412,864 ) Exercised - - - - Forfeited, cancelled, expired - - - - Outstanding as of December 31, 2018 6,537,586 $ 0.51 $ 3.19 - Granted - 1.29 4.00 - Exercised - - - Forfeited, cancelled, expired - - - Outstanding as of September 30, 2019 6,537,586 $ 0.55 $ 1.85 - |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following shares are not included in the computation of diluted income (loss) per share, because their inclusion would be anti-dilutive: Nine Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Preferred shares - - - Convertible notes 434,058 58,299 434,058 58,299 Warrants 6,537,586 5,597,586 6,537,586 5,597,586 Options - - - - Total anti-dilutive weighted average shares 6,971,644 5,655,885 6,971,644 5,655,885 |
Schedule of Dilutive Securities of Common Shares Outstanding | If all dilutive securities had been exercised at September 30, 2019, the total number of common shares outstanding would be as follows: Common Shares 30,566,920 Preferred Shares - Convertible notes 434,058 Warrants 6,537,586 Options - Total potential shares 37,538,564 |
Organization and Nature of Bu_2
Organization and Nature of Business (Details Narrative) - USD ($) | Dec. 31, 2018 | Dec. 31, 2015 |
Laurence Wainer [Member] | ||
Number of stock sold during period value | $ 30,000 | |
Common Stock [Member] | Laurence Wainer [Member] | ||
Number of stock sold during period | 8,924,000 | |
Preferred Stock [Member] | Laurence Wainer [Member] | ||
Number of stock sold during period | 1,000,000 | |
Arizona Corporation [Member] | ||
Ownership percent | 100.00% |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Accumulated deficit | $ (6,703,517) | $ (6,096,322) | |
Exclusive license agreement term | 5 years | ||
Advertising and marketing expenses | $ 267 | $ 81,652 | |
Maximum percentage of carrying value of debt | 10.00% | ||
Revenues [Member] | One Distributor [Member] | |||
Concentration risk, percentage | 89.00% |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Financial Instruments Measured at Fair Value on Recurring Basis (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Fair Value, Inputs, Level 1 [Member] | |
Balance, beginning | |
Change in fair value of derivative liability | |
Balance, ending | |
Fair Value, Inputs, Level 2 [Member] | |
Balance, beginning | 22,517 |
Change in fair value of derivative liability | 7,390 |
Balance, ending | 29,907 |
Fair Value, Inputs, Level 3 [Member] | |
Balance, beginning | |
Change in fair value of derivative liability | |
Balance, ending |
Segment Reporting (Details Narr
Segment Reporting (Details Narrative) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019Device | Sep. 30, 2019USD ($)Device | |
Number of reportable segments | Device | 2 | 2 |
Rental period description | The rental periods range from a few months to 2 years and include a combination of down payments made by the customer and monthly payments paid under the agreements with the Company. | |
Minimum [Member] | ||
Payments by distributors per unit | $ 25 | |
Maximum [Member] | ||
Payments by distributors per unit | $ 35 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Net Sales and Identifiable Operating Income by Segment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | ||
Gross Profit | $ 77,082 | $ 222,934 | $ 462,821 | $ 628,749 | ||
Identifiable segment operating expenses | 116,364 | 437,178 | 616,919 | 1,460,476 | ||
Identifiable segment operating income | (39,282) | (214,244) | (154,098) | (831,727) | ||
Payroll | 32,798 | 240,499 | 243,516 | 706,648 | ||
Professional fees | 33,667 | 26,176 | 180,964 | 114,230 | ||
General and administrative expenses | 49,899 | 170,504 | 192,439 | 639,598 | ||
Interest expense | 168,626 | 119,208 | 498,871 | 329,586 | ||
Change in fair value of derivative liability | 5,093 | (7,390) | 9,385 | $ 7,390 | ||
Gain on extinguishment of debt | 54,764 | |||||
Loss before provision for income taxes | (207,908) | (328,179) | (605,595) | (1,151,928) | ||
Provision for income taxes | 1,600 | (800) | ||||
Net loss | (207,908) | (328,179) | (607,195) | (1,152,728) | ||
Monitoring [Member] | ||||||
Gross Profit | [1] | 48,862 | 202,694 | 397,920 | 569,244 | |
Identifiable segment operating expenses | [2] | |||||
Identifiable segment operating income | [3] | 48,862 | 202,694 | 397,920 | 569,244 | |
Total net property, plant, and equipment assets | ||||||
Distributorships [Member] | ||||||
Gross Profit | [1] | 28,220 | 20,240 | 64,901 | 59,505 | |
Identifiable segment operating expenses | [2] | |||||
Identifiable segment operating income | [3] | 28,220 | 20,240 | 64,901 | 59,505 | |
Total net property, plant, and equipment assets | ||||||
Operating Segment [Member] | ||||||
Gross Profit | [1] | 77,082 | 222,934 | 462,821 | 628,749 | |
Identifiable segment operating expenses | [2] | |||||
Identifiable segment operating income | [3] | 77,082 | 222,934 | 462,821 | 628,749 | |
Payroll | [4] | 32,798 | 240,499 | 243,516 | 706,648 | |
Professional fees | [4] | 33,667 | 26,175 | 180,964 | 114,230 | |
General and administrative expenses | [4] | 49,899 | 170,504 | 192,439 | 639,598 | |
Interest expense | [4] | 168,626 | 119,028 | 498,871 | 329,586 | |
Change in fair value of derivative liability | [4] | (5,093) | 7,390 | (9,385) | ||
Gain on extinguishment of debt | [4] | (54,764) | ||||
Reconciliation of identifiable segment income to corporate income | [4] | 284,990 | 551,113 | 1,068,416 | 1,780,677 | |
Loss before provision for income taxes | (207,908) | (328,179) | (605,595) | (1,151,928) | ||
Provision for income taxes | 1,600 | 800 | ||||
Net loss | (207,908) | (328,179) | (607,195) | (1,152,728) | ||
Total net property, plant, and equipment assets | ||||||
Corporate [Member] | ||||||
Total net property, plant, and equipment assets | ||||||
[1] | Segment gross profit includes segment net sales less segment cost of sales | |||||
[2] | Identifiable segment operating expenses consists of identifiable depreciation expense | |||||
[3] | Identifiable segment operating incomes consists of segment gross profit less identifiable operating expense | |||||
[4] | General corporate expense consists of all other non-identifiable expenses |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expense (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued payroll and payroll taxes | $ 20,004 | $ 17,616 |
Deferred rent | 5,317 | |
Income Tax Payable | 6,730 | 5,930 |
Other accrued expenses | 2,183 | 37,125 |
Total | $ 28,917 | $ 65,988 |
Deferred Revenue - Schedule of
Deferred Revenue - Schedule of Deferred Revenue (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Deferred revenue | $ 17,182 | $ 92,162 |
Monitoring Deferred Revenues [Member] | ||
Deferred revenue | 17,182 | 92,162 |
Distributorship Deferred Revenues [Member] | ||
Deferred revenue |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Jan. 16, 2019 | Oct. 11, 2018 | Oct. 04, 2018 | Dec. 02, 2017 | Jan. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Amortization of debt discount | $ 18,316 | $ 27,704 | |||||||
Gain on extinguishments of debt | 54,764 | ||||||||
Repayment of note payable | 31,589 | 34,405 | |||||||
December 2017 Note [Member] | |||||||||
Notes payable | $ 50,000 | ||||||||
Debt instrument, maturity date | Dec. 1, 2020 | ||||||||
Promissory note interest, percentage | 15.00% | ||||||||
Principal per month, amount | $ 1,733 | ||||||||
Amortization of debt discount | 22,650 | ||||||||
Gain on extinguishments of debt | $ 43,930 | ||||||||
Interest expense | 0 | 1,706 | 0 | 3,539 | |||||
December 2017 Note [Member] | Third Party [Member] | |||||||||
Notes payable | $ 50,000 | ||||||||
October 2018 Note [Member] | |||||||||
Notes payable | $ 59,105 | ||||||||
Debt instrument, maturity date | May 5, 2019 | ||||||||
Promissory note interest, percentage | 55.00% | ||||||||
Gain on extinguishments of debt | $ 10,834 | ||||||||
Interest expense | 0 | 0 | 0 | 0 | |||||
Note payable, processing fee | $ 895 | ||||||||
Principal per business day, amount | 561 | ||||||||
Repayment of note payable | 30,806 | ||||||||
October 2018 Note [Member] | Third Party [Member] | |||||||||
Notes payable | $ 60,000 | ||||||||
October 2018 Note 1 [Member] | |||||||||
Notes payable | $ 72,800 | ||||||||
Debt instrument, maturity date | Oct. 4, 2019 | ||||||||
Promissory note interest, percentage | 51.00% | ||||||||
Gain on extinguishments of debt | 10,834 | ||||||||
Interest expense | $ 8,536 | $ 0 | $ 17,126 | $ 0 | |||||
Repayment of note payable | $ 30,806 | ||||||||
October 2018 Note 1 [Member] | First Six Months [Member] | |||||||||
Principal per month, amount | $ 11,527 | ||||||||
October 2018 Note 1 [Member] | Last Six Months [Member] | |||||||||
Principal per month, amount | 6,795 | ||||||||
October 2018 Note 1 [Member] | Third Party [Member] | |||||||||
Notes payable | $ 72,800 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Notes payable, gross amount | $ 67,159 | $ 150,319 |
Notes payable, discount | (14,474) | |
Notes payable, net balance | 67,159 | 135,845 |
Less: non-current portion, gross | (24,994) | |
Less: non-current portion, discount | 6,925 | |
Less: non-current portion, net | (18,069) | |
Notes payable, current portion, gross | 67,159 | 125,325 |
Notes payable, current portion, discount | (7,549) | |
Notes payable, current portion | 67,159 | 117,776 |
December 2017 Note [Member] | ||
Notes payable, gross amount | 40,736 | |
Notes payable, discount | (14,474) | |
Notes payable, net balance | 26,262 | |
October 2018 Note [Member] | ||
Notes payable, gross amount | 42,424 | |
Notes payable, discount | ||
Notes payable, net balance | 42,424 | |
October 2018 Note 1 [Member] | ||
Notes payable, gross amount | 67,159 | 67,159 |
Notes payable, discount | ||
Notes payable, net balance | $ 67,159 | $ 67,159 |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | Oct. 11, 2018 | Oct. 04, 2018 | Dec. 02, 2017 | Sep. 30, 2019 | Dec. 31, 2018 |
Common stock shares issued | 30,566,920 | 31,073,529 | |||
December 2017 Note [Member] | |||||
Notes payable | $ 50,000 | ||||
Interest bearing percentage | 15.00% | ||||
Common stock shares issued | 100,000 | ||||
Debt due date | Dec. 1, 2020 | ||||
Exercise price per share | $ 0.25 | ||||
Per month amount | $ 1,733 | ||||
December 2017 Note [Member] | Third Party [Member] | |||||
Notes payable | $ 50,000 | ||||
October 2018 Note [Member] | |||||
Notes payable | $ 59,105 | ||||
Interest bearing percentage | 55.00% | ||||
Debt due date | May 5, 2019 | ||||
Principal per business day, amount | $ 561 | ||||
October 2018 Note [Member] | Third Party [Member] | |||||
Notes payable | $ 60,000 | ||||
October 2018 Note 1 [Member] | |||||
Notes payable | $ 72,800 | ||||
Interest bearing percentage | 51.00% | ||||
Debt due date | Oct. 4, 2019 | ||||
October 2018 Note 1 [Member] | First Six Months [Member] | |||||
Per month amount | $ 11,527 | ||||
October 2018 Note 1 [Member] | Last Six Months [Member] | |||||
Per month amount | 6,795 | ||||
October 2018 Note 1 [Member] | Third Party [Member] | |||||
Notes payable | $ 72,800 |
Notes Payable - Related Parti_3
Notes Payable - Related Parties (Details Narrative) - USD ($) | Sep. 27, 2019 | Jul. 25, 2019 | Jul. 18, 2019 | Jul. 10, 2019 | Jun. 03, 2019 | May 01, 2019 | Mar. 04, 2019 | Feb. 19, 2019 | Feb. 01, 2019 | Jan. 15, 2019 | Jan. 11, 2019 | Jan. 03, 2019 | Dec. 31, 2018 | Dec. 17, 2018 | Dec. 01, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 |
Notes payable principal balance | $ 2,049,000 | $ 2,425,083 | $ 2,425,083 | |||||||||||||||||
Agreement With a Related Party [Member] | Doheny Group [Member] | ||||||||||||||||||||
Note for principal balance | $ 89,000 | $ 20,000 | $ 10,000 | $ 5,000 | $ 15,000 | $ 14,500 | $ 40,000 | $ 32,700 | $ 23,000 | $ 6,000 | ||||||||||
Notes payable principal balance | $ 101,700 | $ 25,000 | $ 8,000 | $ 13,000 | 1,365,000 | 1,365,000 | $ 2,275,200 | |||||||||||||
Interest only payments, monthly | $ 101,700 | $ 25,000 | $ 8,000 | $ 13,000 | ||||||||||||||||
Debt instrument, maturity date | Sep. 27, 2020 | Jul. 25, 2020 | Jul. 18, 2020 | Jul. 10, 2020 | Jun. 3, 2020 | May 1, 2020 | Mar. 4, 2020 | Feb. 19, 2020 | Feb. 1, 2020 | Jan. 15, 2020 | Jan. 11, 2020 | Jan. 3, 2020 | Dec. 31, 2019 | Dec. 17, 2019 | ||||||
Debt interest rate | 0.00% | 0.00% | 0.00% | 0.00% | ||||||||||||||||
New Note [Member] | Replacement of a Note [Member] | ||||||||||||||||||||
Note for principal balance | $ 2,222,000 | |||||||||||||||||||
August 2018, New Promissory Note [Member] | Replacement of a Note [Member] | ||||||||||||||||||||
Notes payable principal balance | 1,365,000 | |||||||||||||||||||
December 2018, New Promissory Note [Member] | ||||||||||||||||||||
Loan default penalty | 635,000 | |||||||||||||||||||
Debt instrument, missed payment | 20,000 | |||||||||||||||||||
Interest only payments, monthly | $ 50,500 | |||||||||||||||||||
Debt instrument, maturity date | Dec. 1, 2023 | |||||||||||||||||||
Accrued interest payments | $ 202,000 | |||||||||||||||||||
Interest expense, related party debt | $ 151,500 | $ 0 | $ 303,000 | $ 0 | ||||||||||||||||
December 2018, New Promissory Note [Member] | Third Party [Member] | ||||||||||||||||||||
Note for principal balance | $ 2,020,000 |
Notes Payable - Related Parti_4
Notes Payable - Related Parties - Schedule of Notes Payable Related Parties (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Total notes payable to related parties | $ 2,425,083 | $ 2,049,000 |
Less: non-current portion | (2,393,900) | (2,020,000) |
Notes payable, current portion | 29,000 | 29,000 |
August 2018 Note [Member] | ||
Total notes payable to related parties | 2,020,000 | 2,020,000 |
December 2018 Note [Member] | ||
Total notes payable to related parties | 6,000 | 6,000 |
December 2018 Note 1 [Member] | ||
Total notes payable to related parties | 23,000 | 23,000 |
January 2019 Note [Member] | ||
Total notes payable to related parties | 32,700 | |
January 2019 Note 1 [Member] | ||
Total notes payable to related parties | 40,000 | |
January 2019 Note 2 [Member] | ||
Total notes payable to related parties | 14,500 | |
February 2019 Note [Member] | ||
Total notes payable to related parties | 15,000 | |
February 2019 Note 1 [Member] | ||
Total notes payable to related parties | 5,000 | |
March 2019 Note [Member] | ||
Total notes payable to related parties | 10,000 | |
May 2019 Note [Member] | ||
Total notes payable to related parties | 20,000 | |
June 2019 Note [Member] | ||
Total notes payable to related parties | 89,000 | |
July 2019 Note [Member] | ||
Total notes payable to related parties | 13,000 | |
July 2019 Note 1 [Member] | ||
Total notes payable to related parties | 8,000 | |
July 2019 Note 2 [Member] | ||
Total notes payable to related parties | 25,000 | |
September 2019 Note [Member] | ||
Total notes payable to related parties | 101,700 | |
August 2019 Note [Member] | ||
Total notes payable to related parties | $ 2,183 |
Notes Payable - Related Parti_5
Notes Payable - Related Parties - Schedule of Notes Payable Related Parties (Details) (Parenthetical) - USD ($) | Sep. 27, 2019 | Jul. 25, 2019 | Jul. 18, 2019 | Jul. 10, 2019 | Jun. 03, 2019 | May 01, 2019 | Mar. 04, 2019 | Feb. 19, 2019 | Feb. 01, 2019 | Jan. 15, 2019 | Jan. 11, 2019 | Jan. 03, 2019 | Dec. 31, 2018 | Dec. 17, 2018 | Dec. 01, 2018 | Aug. 31, 2019 |
August 2018 Note [Member] | ||||||||||||||||
Note for principal balance | $ 1,365,000 | |||||||||||||||
Loan default penalty | 635,000 | |||||||||||||||
Debt instrument, missed payment | 20,000 | |||||||||||||||
Interest paid, monthly | $ 50,500 | |||||||||||||||
Debt instrument, maturity date | Dec. 1, 2023 | |||||||||||||||
August 2018 Note [Member] | Replacement of a Note [Member] | ||||||||||||||||
Principal payments, monthly | $ 765,000 | |||||||||||||||
February 2018 Note [Member] | Replacement of a Note [Member] | ||||||||||||||||
Principal payments, monthly | 100,000 | |||||||||||||||
March 2018 Note [Member] | Replacement of a Note [Member] | ||||||||||||||||
Principal payments, monthly | $ 500,000 | |||||||||||||||
December 2018 Note [Member] | ||||||||||||||||
Note for principal balance | $ 6,000 | |||||||||||||||
Debt instrument, maturity date | Dec. 17, 2019 | |||||||||||||||
December 2018 Note 1 [Member] | ||||||||||||||||
Note for principal balance | $ 23,000 | |||||||||||||||
Debt instrument, maturity date | Dec. 13, 2019 | |||||||||||||||
January 2019 Note [Member] | ||||||||||||||||
Note for principal balance | $ 32,700 | |||||||||||||||
Debt instrument, maturity date | Jan. 3, 2020 | |||||||||||||||
January 2019 Note 1 [Member] | ||||||||||||||||
Note for principal balance | $ 40,000 | |||||||||||||||
Debt instrument, maturity date | Jan. 11, 2020 | |||||||||||||||
January 2019 Note 2 [Member] | ||||||||||||||||
Note for principal balance | $ 14,500 | |||||||||||||||
Debt instrument, maturity date | Jan. 15, 2020 | |||||||||||||||
February 2019 Note [Member] | ||||||||||||||||
Note for principal balance | $ 15,000 | |||||||||||||||
Debt instrument, maturity date | Feb. 1, 2020 | |||||||||||||||
February 2019 Note 1 [Member] | ||||||||||||||||
Note for principal balance | $ 5,000 | |||||||||||||||
Debt instrument, maturity date | Feb. 19, 2020 | |||||||||||||||
March 2019 Note [Member] | ||||||||||||||||
Note for principal balance | $ 10,000 | |||||||||||||||
Debt instrument, maturity date | Mar. 4, 2020 | |||||||||||||||
May 2019 Note [Member] | ||||||||||||||||
Note for principal balance | $ 20,000 | |||||||||||||||
Debt instrument, maturity date | May 1, 2020 | |||||||||||||||
June 2019 Note [Member] | ||||||||||||||||
Note for principal balance | $ 89,000 | |||||||||||||||
Debt instrument, maturity date | Jun. 3, 2020 | |||||||||||||||
July 2019 Note [Member] | ||||||||||||||||
Note for principal balance | $ 13,000 | |||||||||||||||
Debt instrument, maturity date | Jul. 10, 2020 | |||||||||||||||
July 2019 Note 1 [Member] | ||||||||||||||||
Note for principal balance | $ 8,000 | |||||||||||||||
Debt instrument, maturity date | Jul. 18, 2020 | |||||||||||||||
July 2019 Note 2 [Member] | ||||||||||||||||
Note for principal balance | $ 25,000 | |||||||||||||||
Debt instrument, maturity date | Jul. 25, 2020 | |||||||||||||||
September 2019 Note [Member] | ||||||||||||||||
Note for principal balance | $ 101,700 | |||||||||||||||
Debt instrument, maturity date | Sep. 27, 2020 | |||||||||||||||
August 2019 Note [Member] | ||||||||||||||||
Note for principal balance | $ 2,183 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) | Mar. 09, 2018USD ($) | May 06, 2016USD ($)shares | Aug. 07, 2015USD ($)Device$ / sharesshares | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Convertible notes | $ 19,816 | $ 15,973 | ||||
Amortization of debt discount | 18,316 | $ 27,704 | ||||
Expected Dividend Rate [Member] | ||||||
Warrants measurement input | 0 | |||||
Volatility [Member] | ||||||
Warrants measurement input | 1 | |||||
Risk Free Interest Rate [Member] | ||||||
Warrants measurement input | Device | 1.08 | |||||
Convertible Debenture Due on August 7, 2017 [Member] | ||||||
Interest bearing percentage | 7.50% | |||||
Convertible notes | $ 15,000 | 7,500 | 7,500 | |||
Debt instrument, maturity date | Aug. 7, 2017 | |||||
Percentage of accrued interest to be converted to common stock | 70.00% | |||||
Debt instrument, convertible, terms of conversion feature | On August 7, 2015, the Company entered into an agreement with a third party non-affiliate and issued a 7.5% interest bearing convertible debenture for $15,000 due on August 7, 2017, with conversion features commencing after 180 days following the date of the note. Payments of interest only were due monthly beginning September 2015. The loan is convertible at 70% of the average of the closing prices for the common stock during the five trading days prior to the conversion date. | |||||
Amortization of debt discount | $ 5,770 | |||||
Conversion of debt | $ 7,500 | |||||
Common stock conversion shares | shares | 30,000 | |||||
Warrants outstanding | shares | 30,000 | |||||
Warrants exercise price | $ / shares | $ 0.50 | |||||
Warrants, term | 3 years | |||||
Additional discount on debt | $ 4,873 | |||||
Interest expense | 7,500 | 0 | ||||
Convertible Debenture Due on March 9, 2021 [Member] | ||||||
Interest bearing percentage | 10.00% | |||||
Convertible notes | $ 20,000 | 12,316 | $ 8,473 | |||
Debt instrument, maturity date | Mar. 9, 2021 | |||||
Percentage of accrued interest to be converted to common stock | 61.00% | |||||
Debt instrument, convertible, terms of conversion feature | The loan is convertible at 61% of the average of the closing prices for the common stock during the five trading days prior to the conversion date but may not be converted if such conversion would cause the holder to own more than 4.9% of outstanding common stock after giving effect to the conversion. | |||||
Amortization of debt discount | $ 20,000 | |||||
Interest expense | $ 20,000 | $ 0 | ||||
Convertible Debenture Due on March 9, 2021 [Member] | Total Discount [Member] | ||||||
Amortization of debt discount | 47,768 | |||||
Convertible Debenture Due on March 9, 2021 [Member] | Expenses Related Beneficial Feature [Member] | ||||||
Amortization of debt discount | $ 27,768 |
Convertible Notes Payable - Sch
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Mar. 09, 2018 | Aug. 07, 2015 |
Convertible notes, gross amount | $ 27,500 | $ 27,500 | ||
Convertible notes, discount | (7,684) | (11,527) | ||
Convertible notes, net balance | 19,816 | 15,973 | ||
Less: non-current portion, gross amount | (20,000) | (20,000) | ||
Less: non-current portion, discount | 2,560 | 6,403 | ||
Less: non-current portion, net | (17,440) | (13,597) | ||
Convertible notes, current portion, gross amount | 7,500 | 7,500 | ||
Convertible notes, current portion, discount | (5,124) | (5,124) | ||
Convertible notes, current portion | 2,376 | 2,376 | ||
Convertible Debenture Due on August 7, 2017 [Member] | ||||
Convertible notes, gross amount | 7,500 | 7,500 | ||
Convertible notes, discount | ||||
Convertible notes, net balance | 7,500 | 7,500 | $ 15,000 | |
Convertible Debenture Due on March 9, 2021 [Member] | ||||
Convertible notes, gross amount | 20,000 | 20,000 | ||
Convertible notes, discount | (7,684) | (11,527) | ||
Convertible notes, net balance | $ 12,316 | $ 8,473 | $ 20,000 |
Convertible Notes Payable - S_2
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) (Parenthetical) - USD ($) | Mar. 09, 2018 | Aug. 07, 2015 | Sep. 30, 2019 | Dec. 31, 2018 |
Convertible notes | $ 19,816 | $ 15,973 | ||
Convertible Debenture Due on August 7, 2017 [Member] | ||||
Convertible notes | $ 15,000 | 7,500 | 7,500 | |
Interest bearing percentage | 7.50% | |||
Convertible debt due date | Aug. 7, 2017 | |||
Convertible Debenture Due on March 9, 2021 [Member] | ||||
Convertible notes | $ 20,000 | $ 12,316 | $ 8,473 | |
Interest bearing percentage | 10.00% | |||
Convertible debt due date | Mar. 9, 2021 |
Derivative Liabilities (Details
Derivative Liabilities (Details Narrative) | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Mar. 31, 2018USD ($) | Aug. 31, 2015USD ($) |
Convertible notes | $ 19,816 | $ 15,973 | ||
Derivative [Member] | Expected Dividend Rate [Member] | ||||
Warrants measurement input | 0 | 0 | ||
Derivative [Member] | Volatility [Member] | ||||
Warrants measurement input | 1.60 | 1 | ||
Derivative [Member] | Risk Free Interest Rate [Member] | ||||
Warrants measurement input | 0.0249 | 0.0061 | ||
August 2015 Convertible Debenture [Member] | Derivative [Member] | ||||
Convertible notes | $ 15,000 | |||
Convertible debt, fair value | $ 15,000 | |||
Warrants, term | 1 year 6 months 29 days | |||
March 2018 Convertible Debenture [Member] | Derivative [Member] | ||||
Convertible notes | $ 20,000 | |||
Convertible debt, fair value | $ 20,000 | |||
Warrants, term | 2 years 5 months 9 days |
Derivative Liabilities - Schedu
Derivative Liabilities - Schedule of Derivative Liabilities (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Derivative liability | $ 29,907 | $ 22,517 |
August 2015 Convertible Debt [Member] | ||
Derivative liability | 6,359 | 6,523 |
March 2018 Convertible Debt [Member] | ||
Derivative liability | $ 23,549 | $ 15,994 |
Derivative Liabilities - Sche_2
Derivative Liabilities - Schedule of Derivative Liabilities (Details) (Parenthetical) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Aug. 31, 2015 |
Convertible debt | $ 19,816 | $ 15,973 | ||
August 2015 Convertible Debenture [Member] | Derivative [Member] | ||||
Convertible debt | $ 15,000 | |||
March 2018 Convertible Debenture [Member] | Derivative [Member] | ||||
Convertible debt | $ 20,000 |
Derivative Liabilities - Sche_3
Derivative Liabilities - Schedule of Revalue of Derivatives Using Black Scholes Model (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Derivative liability | $ 29,907 | $ 29,907 | $ 22,517 | ||
Additions | |||||
Changes | $ 5,093 | (7,390) | $ 9,385 | 7,390 | |
August 2015 Convertible Debt [Member] | |||||
Derivative liability | 6,359 | 6,359 | 6,523 | ||
Additions | |||||
Changes | (165) | ||||
March 2018 Convertible Debt [Member] | |||||
Derivative liability | $ 23,549 | $ 23,549 | 15,994 | ||
Additions | |||||
Changes | $ 7,555 |
Derivative Liabilities - Sche_4
Derivative Liabilities - Schedule of Revalue of Derivatives Using Black Scholes Model (Details) (Parenthetical) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Aug. 31, 2015 |
Convertible debt | $ 19,816 | $ 15,973 | ||
August 2015 Convertible Debenture [Member] | Derivative [Member] | ||||
Convertible debt | $ 15,000 | |||
March 2018 Convertible Debenture [Member] | Derivative [Member] | ||||
Convertible debt | $ 20,000 |
Accrued Royalties Payable (Deta
Accrued Royalties Payable (Details Narrative) - USD ($) | Dec. 01, 2018 | Aug. 01, 2018 | Nov. 01, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Notes payable - related party | $ 29,000 | $ 29,000 | $ 29,000 | |||||
Royalty fee and expense | $ 8,100 | $ 25,650 | $ 29,751 | $ 115,595 | ||||
November 2017 Royalty Agreement [Member] | ||||||||
Notes payable - related party | $ 900,000 | |||||||
Royalty fee description | Under the royalty agreement, the Company is required to pay a royalty fee of from $1.50 to $3.00 per month for every ignition interlock devise that the Company has on the road in customers' vehicles, the amount depending on how many devices are installed. | |||||||
August 2018, Royalty Agreement [Member] | ||||||||
Notes payable - related party | $ 1,365,000 | |||||||
Royalty fee description | This note replaced the November 2017 Royalty Agreement as well as other, non-royalty notes payable. Under the royalty agreement, the Company is required to pay $1.50 and accrue an additional $3.50 for every ignition interlock devise for the first nine months of the note payable. After the first nine months, the Company is required to pay $1.50 per devise and the amount accrued during the first nine months will be paid monthly through the next twelve months. After the note payable is paid in full, the Company is required to pay $3.00 per devise in perpetuity. | |||||||
December 2018 Royalty Agreement [Member] | ||||||||
Notes payable - related party | $ 2,020,000 | |||||||
Royalty fee description | This note replaced the August 2018 Royalty Agreement. Under the royalty agreement, the Company is required to pay a royalty fee of $5.00 per month for every ignition interlock device that the Company has on the road in customers' vehicles. |
Accrued Royalties Payable - Sch
Accrued Royalties Payable - Schedule of Accrued Royalties Payable (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Total accrued royalties | $ 56,635 | $ 26,885 |
November 2017 Royalty Agreement [Member] | ||
Total accrued royalties | 3,327 | 3,327 |
August 2018 Royalty Agreement [Member] | ||
Total accrued royalties | 18,058 | 18,058 |
December 2018 Royalty Agreement [Member] | ||
Total accrued royalties | $ 35,250 | $ 5,500 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | ||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred stock, shares issued | 1,000,000 | 1,000,000 | 1,000,000 | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Shares issued for services | $ 24,500 | ||||
Common stock, shares issued | 30,566,920 | 30,566,920 | 31,073,529 | ||
Anti-dilution shares | 6,971,644 | 5,655,885 | 6,971,644 | 5,655,885 | |
Common Stock [Member] | |||||
Shares issued for services, shares | 250,000 | ||||
Shares issued for services | $ 25 | ||||
Anti-dilution shares | 756,609 | ||||
Debt conversion, converted instrument, shares issued | 32,812 | ||||
Debt conversion, converted instrument, amount | $ 5,083 | ||||
Common Stockholders [Member] | |||||
Common stock voting rights | Holders of common stock are entitled to one vote for each share held. | ||||
Series A Preferred Stock [Member] | |||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |||
Preferred stock, voting rights | Series A Preferred stock will have one hundred (100) votes on all matters | ||||
Shares issued for services, shares | |||||
Shares issued for services | |||||
Series A Preferred Stock [Member] | Material Definitive Agreement [Member] | Officer and Director [Member] | |||||
Stock issued during period, shares | 1,000,000 | ||||
Number of preferred stock shares issued, value | $ 350,000 |
Warrants (Details Narrative)
Warrants (Details Narrative) - Warrant [Member] | Sep. 30, 2019$ / shares |
Minimum [Member] | |
Warrant expiration | 3 years |
Warrants exercise prices | $ 0.10 |
Maximum [Member] | |
Warrant expiration | 4 years |
Warrants exercise prices | $ 1 |
Warrants - Schedule of Warrant
Warrants - Schedule of Warrant Activity (Details) - Warrant [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Warrants for common shares, outstanding, beginning balance | 6,537,586 | 5,607,176 |
Warrants for common shares, Granted | 930,410 | |
Warrants for common shares, Exercised | ||
Warrants for common shares, Forfeited, cancelled, expired | ||
Warrants for common shares, Outstanding, ending balance | 6,537,586 | 6,537,586 |
Weighted average exercise price, beginning balance | $ 0.51 | $ 0.51 |
Weighted average exercise price, Granted | 1.29 | 1.29 |
Weighted average exercise price, Exercised | ||
Weighted average exercise price, Forfeited, cancelled, expired | ||
Weighted average exercise price, ending balance | $ 0.55 | $ 0.51 |
Weighted Average Remaining Contractual Life Warrants Outstanding, Beginning | 3 years 2 months 8 days | 3 years 2 months 8 days |
Weighted Average Remaining Contractual Life Warrants Outstanding, Granted | 4 years | 4 years |
Weighted Average Remaining Contractual Life Warrants Outstanding Ending | 1 year 10 months 6 days | 3 years 2 months 8 days |
Aggregate Intrinsic Value Outstanding Beginning | $ 412,864 | |
Aggregate Intrinsic Value, grant | (412,864) | |
Aggregate Intrinsic Value Outstanding Ending |
Income (Loss) Per Share - Sched
Income (Loss) Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Total anti-dilutive weighted average shares | 6,971,644 | 5,655,885 | 6,971,644 | 5,655,885 |
Preferred Shares [Member] | ||||
Total anti-dilutive weighted average shares | ||||
Convertible Notes [Member] | ||||
Total anti-dilutive weighted average shares | 434,058 | 58,299 | 434,058 | 58,299 |
Warrants [Member] | ||||
Total anti-dilutive weighted average shares | 6,537,586 | 5,597,586 | 6,537,586 | 5,597,586 |
Options [Member] | ||||
Total anti-dilutive weighted average shares |
Income (Loss) Per Share - Sch_2
Income (Loss) Per Share - Schedule of Dilutive Securities of Common Shares Outstanding (Details) | 9 Months Ended |
Sep. 30, 2019shares | |
Total potential shares | 37,538,564 |
Common Shares [Member] | |
Total potential shares | 30,566,920 |
Preferred Shares [Member] | |
Total potential shares | |
Convertible Notes [Member] | |
Total potential shares | 434,058 |
Warrants [Member] | |
Total potential shares | 6,537,586 |
Options [Member] | |
Total potential shares |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Aug. 28, 2017 | Dec. 01, 2016 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Lease amount per month | $ 50,556 | $ (5,306) | $ 94,688 | $ 95,082 | ||
Cahuenga Management LLC [Member] | ||||||
Lease term | 4 years | |||||
Lease amount per month | $ 2,200 | |||||
Maximum provision for escalating | $ 2,404 | |||||
B3 Investments, LLC [Member] | ||||||
Lease term | 1 year | |||||
Lease amount per month | $ 1,350 | |||||
Lease description | On August 28, 2017, the Company entered into a one-year lease with B3 Investments, LLC for a storefront location at Suites D104 and D105, 2406 24th Street, South Phoenix, Arizona. Base rent under the lease is $1,350 per month plus 2% ($27) rental tax. | |||||
Percentage of rental tax rate | 2.00% | |||||
Rental tax | $ 27 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Sep. 27, 2019 | Jul. 25, 2019 | Jul. 18, 2019 | Jul. 10, 2019 | Jun. 03, 2019 | May 01, 2019 | Mar. 04, 2019 | Feb. 19, 2019 | Feb. 01, 2019 | Jan. 15, 2019 | Jan. 11, 2019 | Jan. 03, 2019 | Dec. 31, 2018 | Dec. 17, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 |
Notes payable, related parties | $ 2,049,000 | $ 2,425,083 | $ 2,425,083 | ||||||||||||||||
Anti-dilution shares | 6,971,644 | 5,655,885 | 6,971,644 | 5,655,885 | |||||||||||||||
Doheny Group [Member] | Agreement With a Related Party [Member] | |||||||||||||||||||
Notes payable, related parties | $ 101,700 | $ 25,000 | $ 8,000 | $ 13,000 | $ 1,365,000 | $ 1,365,000 | $ 2,275,200 | ||||||||||||
Debt interest rate | 0.00% | 0.00% | 0.00% | 0.00% | |||||||||||||||
Interest balloon payment | $ 101,700 | $ 25,000 | $ 8,000 | $ 13,000 | |||||||||||||||
Debt instrument, maturity date | Sep. 27, 2020 | Jul. 25, 2020 | Jul. 18, 2020 | Jul. 10, 2020 | Jun. 3, 2020 | May 1, 2020 | Mar. 4, 2020 | Feb. 19, 2020 | Feb. 1, 2020 | Jan. 15, 2020 | Jan. 11, 2020 | Jan. 3, 2020 | Dec. 31, 2019 | Dec. 17, 2019 | |||||
Common stock issued, shares | 3,208,017 | ||||||||||||||||||
Common shares granted to related party | 1,863,152 | ||||||||||||||||||
Anti-dilution shares | 1,294,865 | ||||||||||||||||||
Doheny Group [Member] | Agreement With a Related Party [Member] | David Haridim [Member] | |||||||||||||||||||
Warrants were granted | 50,000 |