Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Apr. 05, 2021 | Jun. 30, 2020 | |
Registrant Name | Alpine 4 Holdings, Inc. | ||
Registrant CIK | 0001606698 | ||
SEC Form | 10-K | ||
Period End date | Dec. 31, 2020 | ||
Fiscal Year End | --12-31 | ||
Tax Identification Number (TIN) | 46-5482689 | ||
Public Float | $ 6,903,702 | ||
Filer Category | Non-accelerated Filer | ||
Current with reporting | Yes | ||
Voluntary filer | No | ||
Well-known Seasoned Issuer | No | ||
Shell Company | false | ||
Small Business | true | ||
Emerging Growth Company | true | ||
Ex Transition Period | false | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Incorporation, State or Country Code | DE | ||
Entity FIle Number | 000-55205 | ||
Entity Interactive data current | Yes | ||
Entity Address, Address Line One | 2525 E Arizona Biltmore Circle | ||
Entity Address, Address Line Two | Suite 237 | ||
Entity Address, City or Town | Phoenix | ||
Entity Address, State or Province | AZ | ||
Entity Address, Postal Zip Code | 85016 | ||
City Area Code | 480 | ||
Local Phone Number | 702-2431 | ||
Common Class A | |||
Number of common stock shares outstanding | 136,923,432 | ||
Common Class B | |||
Number of common stock shares outstanding | 9,023,088 | ||
Common Class C | |||
Number of common stock shares outstanding | 14,162,267 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash | $ 277,738 | $ 302,486 |
Restricted cash | 444,845 | 0 |
Accounts receivable, net | 6,484,869 | 8,731,565 |
Contract assets | 717,421 | 667,724 |
Inventory | 2,666,602 | 2,401,242 |
Prepaid expenses and other current assets | 32,301 | 269,289 |
Total current assets | 10,623,776 | 12,372,306 |
Property and equipment, net | 19,299,286 | 17,157,845 |
Intangible asset, net | 7,743,084 | 2,774,618 |
Right of use assets, net | 581,311 | 660,032 |
Goodwill | 2,084,982 | 2,517,453 |
Other non-current assets | 401,744 | 319,344 |
TOTAL ASSETS | 40,734,183 | 35,801,598 |
CURRENT LIABILITIES: | ||
Accounts payable | 4,854,467 | 5,148,805 |
Accrued expenses | 2,872,202 | 2,676,651 |
Contract liabilities | 233,485 | 170,040 |
Derivative liabilities | 0 | 2,298,609 |
Deposits | 0 | 12,509 |
Notes payable, current portion | 7,100,911 | 8,724,171 |
Notes payable, related parties | 238,651 | 341,820 |
Convertible notes payable, current portion, net of discount of $1,343,624 and $846,833 | 562,242 | 1,110,118 |
Financing lease obligation, current portion | 639,527 | 377,330 |
Operating lease obligation, current portion | 334,500 | 266,623 |
Contingent consideration | 0 | 500,000 |
Total current liabilities | 16,835,985 | 21,626,676 |
Notes payable, net of current portion | 15,201,450 | 9,850,184 |
Convertible notes payable, net of current portion | 1,100,635 | 1,673,688 |
Financing lease obligations, net of current portion | 15,687,176 | 13,696,011 |
Operating lease obligations, net of current portion | 269,030 | 403,931 |
Deferred tax liability | 428,199 | 521,250 |
TOTAL LIABILITIES | 49,522,475 | 47,771,740 |
STOCKHOLDERS' DEFICIT: | ||
Additional paid-in capital | 30,991,978 | 19,763,883 |
Accumulated deficit | (39,795,401) | (31,745,528) |
Total stockholders' deficit | (8,788,292) | (11,970,142) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 40,734,183 | 35,801,598 |
Series B Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, value | 5 | 0 |
Series C Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, value | 171 | 0 |
Series D Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, value | 0 | 0 |
Common Class A | ||
STOCKHOLDERS' DEFICIT: | ||
Common shares | 12,636 | 10,007 |
Common Class B | ||
STOCKHOLDERS' DEFICIT: | ||
Common shares | 902 | 500 |
Common Class C | ||
STOCKHOLDERS' DEFICIT: | ||
Common shares | $ 1,417 | $ 996 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument, Unamortized Discount | $ 1,343,624 | $ 846,833 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Series B Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value Per Share | $ 1 | $ 1 |
Preferred Stock, Shares Authorized | 100 | 100 |
Preferred Stock, Shares Issued | 5 | 0 |
Preferred Stock, Shares Outstanding | 5 | 0 |
Series C Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value Per Share | $ 3.50 | $ 3.50 |
Preferred Stock, Shares Authorized | 2,028,572 | 2,028,572 |
Preferred Stock, Shares Issued | 1,714,286 | 0 |
Preferred Stock, Shares Outstanding | 1,714,286 | 0 |
Series D Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value Per Share | $ 3.50 | $ 3.50 |
Preferred Stock, Shares Authorized | 1,628,572 | 1,628,572 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Class A | ||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 195,000,000 | 195,000,000 |
Common Stock, Shares, Issued | 126,363,158 | 100,070,161 |
Common Stock, Shares, Outstanding | 126,363,158 | 100,070,161 |
Common Class B | ||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Common Stock, Shares, Issued | 9,023,088 | 5,000,000 |
Common Stock, Shares, Outstanding | 9,023,088 | 5,000,000 |
Common Class C | ||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 15,000,000 | 15,000,000 |
Common Stock, Shares, Issued | 14,162,267 | 9,955,200 |
Common Stock, Shares, Outstanding | 14,162,267 | 9,955,200 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Revenue, net | $ 33,454,349 | $ 28,151,524 |
Cost of revenue | 28,090,722 | 22,509,046 |
Gross Profit | 5,363,627 | 5,642,478 |
Operating expenses: | ||
General and administrative expenses | 9,695,891 | 8,122,204 |
Impairment loss of intangible asset and goodwill | 1,561,600 | 0 |
Total operating expenses | 11,257,491 | 8,122,204 |
Loss from operations | (5,893,864) | (2,479,726) |
Other income (expenses) | ||
Interest expense | (5,463,597) | (5,237,205) |
Change in value of derivative liability | 2,298,609 | (252,230) |
Gain on extinguishment of debt | 344,704 | 0 |
Change in fair value of contingent consideration | 500,000 | 0 |
Bargain purchase gain | 0 | 2,143,779 |
Other income | 71,224 | 185,314 |
Total other income (expenses) | (2,249,060) | (3,160,342) |
Loss before income tax | (8,142,924) | (5,640,068) |
Income tax (benefit) | (93,051) | (87,054) |
Loss from continuing operations | (8,049,873) | (5,553,014) |
Discontinued operations: | ||
Loss from operations of discontinued operations | 0 | (95,179) |
Gain on disposition of discontinued operations | 0 | 2,515,028 |
Total discontinued operations | 0 | 2,419,849 |
Net loss | $ (8,049,873) | $ (3,133,165) |
Weighted average shares outstanding : | ||
Basic | 132,987,390 | 75,206,998 |
Diluted | 139,611,790 | 75,206,998 |
Basic Income (loss) per share | ||
Continuing operations | $ (0.06) | $ (0.07) |
Discontinued operations | 0 | 0.03 |
Basic Income (loss) per share | (0.06) | (0.04) |
Diluted income (loss) per share | ||
Continuing operations | (0.06) | (0.07) |
Discontinued operations | 0 | 0.03 |
Earnings Per Share | $ (0.06) | $ (0.04) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Series B Preferred Stock [Member] | Series C Preferred Stock [Member] | Common Stock Class A | Common Stock Class B | Common Stock Class C | Additional Paid-In Capital | Accumulated Deficit | Total |
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2018 | $ 2,657 | $ 500 | $ 17,018,509 | $ (28,520,094) | $ (11,498,428) | |||
Shares, Outstanding, Beginning Balance at Dec. 31, 2018 | 26,567,410 | 5,000,000 | ||||||
Issuance of shares of common stock for convertible note payable and accrued interest | $ 6,860 | 516,976 | 523,836 | |||||
Issuance of shares of common stock for convertible note payable and accrued interest, shares | 68,602,751 | |||||||
Issuance of shares of common stock for debt settlement | $ 200 | 470,200 | 470,400 | |||||
Issuance of shares of common stock for debt settlement, shares | 2,000,000 | |||||||
Issuance of shares of common stock for penalty interest | $ 270 | $ 3 | 680,352 | 680,625 | ||||
Issuance of shares of common stock for penalty interest, shares | 2,700,000 | 30,000 | ||||||
Issuance of shares of common stock for dividend | $ 710 | 91,559 | (92,269) | |||||
Issuance of shares of common stock for dividend, shares | 7,097,594 | |||||||
Conversion of Class B common stock to Class A common stock | $ 20 | $ (20) | ||||||
Conversion of Class B common stock to Class A common stock, shares | 200,000 | (200,000) | ||||||
Issuance of shares of common stock for services | $ 20 | $ 283 | 43,171 | 43,474 | ||||
Issuance of shares of common stock for services, shares | 200,000 | 2,827,606 | ||||||
Derivative liability resolution | 864,679 | 864,679 | ||||||
Share-based compensation expense | 78,437 | 78,437 | ||||||
Net loss | (3,133,165) | (3,133,165) | ||||||
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2019 | $ 10,007 | $ 500 | $ 996 | 19,763,883 | (31,745,528) | (11,970,142) | ||
Shares, Outstanding, Ending Balance at Dec. 31, 2019 | 100,070,161 | 5,000,000 | 9,955,200 | |||||
Issuance of shares of common stock for cash | $ 1,151 | 673,318 | 674,469 | |||||
Issuance of shares of common stock for cash, shares | 11,513,935 | |||||||
Issuance of shares of common stock for convertible note payable and accrued interest | $ 1,286 | 1,928,014 | 1,929,300 | |||||
Issuance of shares of common stock for convertible note payable and accrued interest, shares | 12,861,995 | |||||||
Issuance of shares of common stock for debt settlement | $ 162 | $ 162 | 330,204 | 330,528 | ||||
Issuance of shares of common stock for debt settlement, shares | 1,617,067 | 1,617,067 | ||||||
Issuance of shares of common stock for penalty interest | $ 30 | 44,670 | 44,700 | |||||
Issuance of shares of common stock for penalty interest, shares | 300,000 | |||||||
Issuance of shares of common stock for deferred compensation | $ 402 | 603,061 | 603,463 | |||||
Issuance of shares of common stock for deferred compensation, shares | 4,023,088 | |||||||
Issuance of shares of common stock for compensation | $ 259 | 239,834 | 240,093 | |||||
Issuance of shares of common stock for compensation, shares | 2,590,000 | |||||||
Issuance of shares of series B preferred stock for services | $ 5 | 5 | ||||||
Issuance of shares of series B preferred stock for services, shares | 5 | |||||||
Issuance of shares of series C preferred stock for acquisition | $ 171 | 5,847,842 | 5,848,013 | |||||
Issuance of shares of series C preferred stock for acquisition, shares | 1,714,286 | |||||||
Share-based compensation expense | 78,652 | 78,652 | ||||||
Beneficial conversion feature on convertible notes | 1,482,500 | 1,482,500 | ||||||
Net loss | (8,049,873) | (8,049,873) | ||||||
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2020 | $ 5 | $ 171 | $ 12,636 | $ 902 | $ 1,417 | $ 30,991,978 | $ (39,795,401) | $ (8,788,292) |
Shares, Outstanding, Ending Balance at Dec. 31, 2020 | 5 | 1,714,286 | 126,363,158 | 9,023,088 | 14,162,267 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (8,049,873) | $ (3,133,165) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 1,844,634 | 1,022,925 |
Amortization | 225,628 | 232,592 |
(Gain) loss on extinguishment of debt | (344,704) | 68,526 |
(Gain) loss on disposal of property and equipment | 0 | 177,574 |
Change in fair value of derivative liabilities | (2,298,609) | 252,230 |
Common stock issued for services | 240,093 | 43,474 |
Preferred stock issued for services | 5 | 0 |
Change in fair value of contingent consideration | (500,000) | 0 |
Bad debt expense | 88,305 | 0 |
Non-cash adjustment to debt booked to interest expense | 79,211 | 0 |
Stock issued for penalties | 44,700 | 1,151,025 |
Employee stock compensation | 78,652 | 78,437 |
Amortization of debt discounts | 985,709 | 1,144,756 |
Gain on disposal of discontinued operations | 0 | (2,515,028) |
Issuance of convertible debentures for interest | 105,000 | 492,890 |
Operating lease expense | 272,262 | 231,381 |
Bargain purchase gain | 0 | (2,143,779) |
Impairment loss of intangible asset and goodwill | 1,561,600 | 0 |
Write off of inventory | 127,919 | 0 |
Change in current assets and liabilities: | ||
Accounts receivable | 3,951,827 | (1,174,600) |
Inventory | (184,766) | 964,706 |
Contract assets | (49,697) | (107,080) |
Capitalized contracts costs | 0 | 64,234 |
Prepaid expenses and other assets | (256,682) | (392,466) |
Accounts payable | (634,489) | 595,134 |
Accrued expenses | 940,098 | 1,413,859 |
Contract liabilities | 63,445 | (77,019) |
Operating lease liability | (260,565) | (220,859) |
Deposits | (12,509) | 0 |
Deferred tax | (93,051) | (87,054) |
Deferred revenue | 0 | (25,287) |
Net cash used in operating activities | (2,075,857) | (1,942,594) |
INVESTING ACTIVITIES: | ||
Capital expenditures | (75,670) | (71,175) |
Cash paid for acquisitions | (2,513,355) | (2,926,658) |
Cash assumed in acquisition | 453,876 | 0 |
Net cash used in investing activities | (2,135,149) | (2,997,833) |
FINANCING ACTIVITIES: | ||
Proceeds from the sale of common stock | 674,469 | 0 |
Proceeds from issuances of notes payable, related parties | 47,000 | 282,320 |
Proceeds from issuances of notes payable, non-related party | 4,654,817 | 1,548,989 |
Proceeds from issuances of convertible notes payable | 1,482,500 | 873,000 |
Proceeds from financing lease | 2,000,000 | 12,267,000 |
Repayments of notes payable, related party | (290,003) | (132,500) |
Repayments of notes payable, non-related parties | (2,101,825) | (9,642,837) |
Repayments of convertible notes payable | (335,896) | (1,473,180) |
Proceeds from (repayment of) line of credit, net | (996,331) | 1,311,663 |
Cash paid on financing lease obligations | (503,628) | (206,058) |
Net cash provided by financing activities | 4,631,103 | 4,828,397 |
NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH | 420,097 | (112,030) |
CASH AND RESTRICTED CASH, BEGINNING BALANCE | 302,486 | 414,516 |
CASH AND RESTRICTED CASH, ENDING BALANCE | 722,583 | 302,486 |
CASH PAID FOR: | ||
Interest | 3,504,227 | 1,982,469 |
Income taxes | 0 | 0 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING: | ||
Penalty interest added to debt | 15,000 | 0 |
Common stock issued for convertible note payable and accrued interest | 1,929,300 | 523,836 |
Common stock issued for debt settlement | 330,528 | 0 |
Issuance of note payable for acquisition | 2,300,000 | 5,846,343 |
Debt discount due to derivative liabilities | 0 | 1,018,737 |
Release of derivative liability | 0 | 864,679 |
ROU asset and operating lease obligation recognized under Topic 842 | 193,541 | 891,413 |
Goodwill adjustment to intangible asset for APF acquisition | 0 | 790,000 |
Class C common stock issued for dividend | 0 | 92,269 |
Common stock issued to settle unpaid salaries | 603,463 | 0 |
Equipment purchased on financing lease | 756,990 | 26,999 |
Other asset reclassified to fixed asset | 86,471 | 0 |
Interest added to note payable - related party | 139,834 | 0 |
Issuance of shares of series C preferred stock for acquisition | 5,848,013 | 0 |
Beneficial conversion feature on convertible notes | 1,482,500 | 0 |
Reduction of acquisition note payable for uncollectible accounts | $ 150,044 | $ 0 |
Note 1 - Organization and Basis
Note 1 - Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 1 - Organization and Basis of Presentation | Note 1 – Organization and Basis of Presentation Alpine 4 Holdings, Inc. (fka Alpine 4 Technologies Ltd.) (together with its subsidiaries, the “Company,” “we,” or “our”), was incorporated under the laws of the State of Delaware on April 22, 2014. The Company was formed to serve as a vehicle to affect an asset acquisition, merger, exchange of capital stock, or other business combination with a domestic or foreign business. On March 2, 2021, the Company changed its name from Alpine 4 Technologies Ltd. to Alpine 4 Holdings, Inc. Effective January 1, 2019, the Company purchased all of the outstanding capital stock of Morris Sheet Metal Corp., an Indiana corporation (“MSM”), JTD Spiral, Inc. a wholly owned subsidiary of MSM, an Ind-iana corporation, Morris Enterprises LLC, an Indiana limited liability company and Morris Transportation LLC, an Indiana limited liability company (collectively “Morris”). Effective November 6, 2019, the Company purchased all of the outstanding capital stock and units of Deluxe Sheet Metal, Inc., an Indiana corporation, and DSM Holding, LLC, an Indiana limited liability company, and purchased certain real estate from Lonewolf Enterprises, LLC, an Indiana limited liability company (collectively “Deluxe”) (see Note 8). Effective February 21, 2020, the Company purchased all of the outstanding units of Excel Fabrication, LLC., an Idaho Limited Liability Company (“Excel”). Effective December 15, 2020, the Company purchased the assets of Impossible Aerospace Corporation, a Delaware corporation (“IA”). The Company is a technology holding company owning nine companies: - A4 Corporate Services, LLC; - ALTIA, LLC; - Quality Circuit Assembly, Inc.; - Morris Sheet Metal, Corp; - JTD Spiral, Inc.; - Excel Construction Services, LLC; - SPECTRUMebos, Inc.; - Impossible Aerospace, Inc.; and - Vayu (US). Basis of presentation The accompanying financial statements present the balance sheets, statements of operations, stockholders' deficit and cash flows of the Company. The financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Liquidity The Company’s financial statements are prepared in accordance with GAAP applicable to a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are issued. In accordance with Financial Accounting Standards Board, or the FASB, Accounting Standards Update No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40), our management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued. The Company has experienced significant operating losses with cumulative losses of approximately $39,795,000 as of December 31, 2020 and negative cashflows from operations. For the year ended December 31, 2019, the Company disclosed the substantial doubt about the Company’s ability to continue as a going concern. The Company received a total of approximately $6.2 million during the year ended December 31, 2020, through several transactions, including the following: • The Company raised approximately $1.5 million through the sale of convertible notes; • The Company raised approximately $674,000 in proceeds from the sale of shares of the Company’s stock; and • The Company received approximately $4.0 million in PPP funds. The Company also received a total of approximately $55 million in February 2021 in the following two transactions: • The Company raised approximately $46.0 million in net proceeds in connection with a registered direct offering of its stock (see Note 14) and • The Company raised approximately $9.0 million in net proceeds in connection with an equity line of credit financing arrangement. Based on the recent capital raise as indicated above, management believes the Company has sufficient working capital to satisfy the Company’s estimated liquidity needs for 12 months from the issuance of our financial statements for the year ended December 31, 2020. However, there is no assurance that management’s plans will be successful due to the current economic climate in the United States and globally. At the time of issuance of our consolidated financial statements, management believed that the previously reported going concern has been alleviated based on the reasons set forth above, and management determined that there is no longer any substantial doubt as to the Company’s ability to continue as a going concern. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 2 - Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of December 31, 2020 and 2019. Significant intercompany balances and transactions have been eliminated. Use of estimates The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. Preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable. In many instances, the Company could have reasonably used different accounting estimates and in other instances changes in the accounting estimates are reasonably likely to occur from period to period. This applies in particular to useful lives of non-current assets, valuation allowance for deferred tax assets and impairment of non-current assets. Actual results could differ significantly from our estimates. To the extent that there are material differences between these estimates and actual results, the Company’s future financial statement presentation, financial condition, results of operations and cash flows will be affected. The ultimate impact from COVID-19 on the Company’s operations and financial results during 2021 will depend on, among other things, the ultimate severity and scope of the pandemic, the pace at which governmental and private travel restrictions and public concerns about public gatherings will ease, and the speed with which the economy recovers. The Company is not able to fully quantify the impact that these factors will have on the Company’s financial results during 2021 and beyond. COVID-19 did have a negative impact on the Company’s financial performance in 2020. During the year ended December 31, 2020, the Company took an impairment charge related to intangible assets and goodwill of $1,561,600. Reclassification Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position. Advertising Advertising costs are expensed when incurred. All advertising takes place at the time of expense. We have no long-term contracts for advertising. Advertising expense for all periods presented were not significant. Cash Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days. As of December 31, 2020 and 2019, the Company had no cash equivalents. Major Customers The Company had two customers that made up 10% and 8%, respectively, of accounts receivable as of December 31, 2020. The Company had one customer that made up 7% of accounts receivable as of December 31, 2019. For the year ended December 31, 2020, the Company had one customer that made up 10% of total revenues. For the year ended December 31, 2019, the Company had one customer that made up 13% of total revenues Accounts Receivable The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. As of December 31, 2020 and 2019, allowance for bad debt was $49,914 and $18,710, respectively. Inventory Inventory for all subsidiaries, except Deluxe, is valued at weighted average and first-in; first-out basis for Deluxe. Management compares the cost of inventory with its net realizable value and an allowance is made to write down inventory to net realizable value, if lower. Inventory is segregated into three areas, raw materials, work-in-process and finished goods. Inventory, net at December 31, 2020 and 2019 consists of: December 31, December 31, 2020 2019 Raw materials $ 1,584,651 $ 1,791,733 Work in process 573,806 576,196 Finished goods 508,145 59,972 2,666,602 2,427,901 Reserve - (26,659) Inventory, net $ 2,666,602 $ 2,401,242 Property and Equipment Property and equipment are carried at cost less depreciation. Depreciation and amortization are provided principally on the straight-line method over the estimated useful lives of the assets, which range from ten years to 39 years as follows: Automobiles & Trucks 5 to 7 years Buildings and improvements 39 years Leasehold Improvements 15 years or time remaining on lease (whichever is shorter) Machinery and equipment 10 years Maintenance and repair costs are charged against income as incurred. Significant improvements or betterments are capitalized and depreciated over the estimated life of the asset. Property and equipment consisted of the following as of December 31, 2020 and 2019: December 31, December 31, 2020 2019 Automobiles and trucks $ 918,602 $ 563,614 Machinery and equipment 5,436,847 3,792,964 Office furniture and fixtures 119,546 119,526 Buildings and improvements 16,167,000 14,167,000 Leasehold improvements - 12,816 Total Property and equipment 22,641,995 18,655,920 Less: Accumulated depreciation (3,342,709) (1,498,075) Property and equipment, net $ 19,299,286 $ 17,157,845 Included in Buildings and improvements in the above table are two buildings of $9,000,000 and $2,000,000 related to sale leaseback transactions in connection with the acquisitions of Deluxe and Excel. (See Note 3.) During the year ended December 31, 2019, the Company terminated its lease agreement for the building it leased in San Diego, California which removed $3,895,000 and $294,525 from building and leasehold improvements, respectively. The lease of the San Diego building was accounted for as a capital lease. As a result of the termination of this lease, the Company recognized a loss on disposal of property and equipment of $237,048 In addition, as part of the termination, the Company issued the landlord a note payable in the amount of $2,740,000 (see Note 4). Purchased Intangibles and Other Long-Lived Assets The Company amortizes intangible assets with finite lives over their estimated useful lives, which range between five and fifteen years as follows: Customer List 3-15 years Non-compete agreements 5-15 years Software development 5 years Patents 17 years Intangible assets consisted of the following as of December 31, 2020 and 2019: December 31, December 31, 2020 2019 Software $ 278,474 $ 278,474 Noncompete 205,457 100,000 Customer lists 2,031,187 2,861,187 Patents 5,800,137 - Total Intangible assets 8,315,255 3,239,661 Less: Accumulated amortization (572,171) (465,043) Intangibles, net $ 7,743,084 $ 2,774,618 Expected amortization expense of intangible assets over the next 5 years and thereafter is as follows: Years Ending December 31, 2021 $ 728,517 2022 663,413 2023 654,625 2024 511,274 2025 492,264 Thereafter 4,692,991 Total $ 7,743,084 Other Long-Term Assets Other long-term assets consisted of the following as of December 31, 2020 and 2019: December 31, December 31, 2020 2019 Deposits $ 293,327 $ 285,927 Other 108,417 33,417 $ 401,744 $ 319,344 Impairment of Long-Lived Assets The Company accounts for long-lived assets in accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 360, Accounting for the Impairment of Long-Lived Assets Goodwill In financial reporting, goodwill is not amortized, but is tested for impairment annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Events that result in an impairment review include significant changes in the business climate, declines in our operating results, or an expectation that the carrying amount may not be recoverable. We assess potential impairment by considering present economic conditions as well as future expectations. All assessments of goodwill impairment are conducted at the individual reporting unit level. As of December 31, 2020 and 2019, the reporting units with goodwill were QCA, Morris and Excel. The Company used qualitative factors according to ASC 350-20-35-3 to determine whether it is more likely than not that the fair value of goodwill is less than its carrying amount. During the year ended December 31, 2020, the Company determined that the goodwill for APF was impaired, as the company ceased operating as of August 31, 2020 and took a charge to earnings of $440,100. During year ended December 31, 2019, there were no impairment charge related to goodwill. Fair Value Measurement The Company's financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, convertible notes, notes and line of credit. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements. For additional information, please see Note 11 – Derivative Liabilities and Fair Value Measurements. The carrying value of long-term debt approximates fair value since the related rates of interest approximate current market rates. Revenue Recognition On January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers The following is a summary of the revenue recognition policy for each of the Company’s subsidiaries. Revenue is recognized under Topic 606 · executed contracts with the Company’s customers that it believes are legally enforceable; · identification of performance obligations in the respective contract; · determination of the transaction price for each performance obligation in the respective contract; · allocation the transaction price to each performance obligation; and · recognition of revenue only when the Company satisfies each performance obligation. The following is a summary of the revenue recognition policy for each of the Company’s subsidiaries. ALTIA Revenues recorded by ALTIA relate primarily to the Company’s 6th Sense Auto service. The Company accounts for its revenue by deferring the total contract amount and recognizing the amounts over the monthly subscription period, ranging from 12 to 36 months. QCA and Excel Fabrication QCA and Excel Fabrication are contract manufacturers and recognize revenue when the products have been built and control has been transferred to the customer. If a deposit for product or service is received prior to completion, the payment is recorded to deferred revenue until such point the product or services meets our revenue recognition policy. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed. For all periods presented, management determined that the warranty and returns would be immaterial. APF APF is a contract manufacturer and recognizes revenue when the products have been built and control has been transferred to the customer. If a deposit for product or service is received prior to completion, the payment is recorded to deferred revenue until such point the product or services meets our revenue recognition policy. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed. For all periods presented, management determined that the warranty and returns would be immaterial. Morris Sheet Metal and Deluxe Sheet Metal For our construction contracts, revenue is generally recognized over time as our performance creates or enhances an asset that the customer controls as it is created or enhanced. Our fixed price construction projects generally use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. For certain of our revenue streams, that are performed under time and materials contracts, our progress towards complete satisfaction of such performance obligations is measured using an output method as the customer receives and consumes the benefits of our performance completed to date. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. Contract Assets and Contract Liabilities The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets include unbilled amounts from our construction projects when revenues recognized under the cost-to-cost measure of progress exceed the amounts invoiced to our customers, as the amounts cannot be billed under the terms of our contracts. Such amounts are recoverable from our customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. In addition, many of our time and materials arrangements, are billed pursuant to contract terms that are standard within the industry, resulting in contract assets being recorded, as revenue is recognized in advance of billings. Our contract assets do not include capitalized costs to obtain and fulfill a contract. Contract assets are generally classified as current within the consolidated balance sheets. Contract liabilities from our construction contracts arise when amounts invoiced to our customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from our customers on certain contracts. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation. Contract Retentions As of December 31, 2020 and 2019, accounts receivable included retainage billed under terms of our contracts. These retainage amounts represent amounts which have been contractually invoiced to customers where payments have been partially withheld pending the achievement of certain milestones, satisfaction of other contractual conditions or completion of the project. Earnings (loss) per share Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. The only potentially dilutive securities outstanding during the periods presented were the convertible debt and options. The following table illustrates the computation of basic and diluted EPS for the years ended December 31, 2020 and 2019: For the Year Ended December 31, 2020 For the Year Ended December 31, 2019 Net loss Shares Per Share Amount Net loss Shares Per Share Amount Basic EPS Loss available to stockholders $ (8,049,873) 132,987,390 $ (0.06) $ (3,133,165) 75,206,998 $ (0.04) Effect of Dilutive Securities Convertible debt (1,001,192) 6,624,400 - - Dilute EPS Loss available to stockholders plus assumed conversions $ (9,051,065) 139,611,790 $ (0.06) $ (3,133,165) 75,206,998 $ (0.04) Stock-based compensation The Company accounts for equity instruments issued in exchange for the receipt of goods or services in accordance with ASC 718-10, Compensation – Stock Compensation Income taxes The Company records income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carry forwards. Accounting standards regarding income taxes requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on a more-likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry forward periods, the Company's experience with operating loss and tax credit carry forwards not expiring unused, and tax planning alternatives. The Company recorded valuation allowances on the net deferred tax assets. Management will reassess the realization of deferred tax assets based on the accounting standards for income taxes each reporting period. To the extent that the financial results of operations improve, and it becomes more likely than not that the deferred tax assets are realizable, the Company will be able to reduce the valuation allowance. Significant judgment is required in evaluating the Company's tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely, based solely on the technical merits, of being sustained on examinations. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments, and which may not accurately anticipate actual outcomes. Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt under ASC 815 Derivatives and Hedging Debt with Conversion and Other Options Related Party Disclosure ASC 850, Related Party Disclosures Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope. The new standard represents significant changes to accounting for credit losses. Full lifetime expected credit losses will be recognized upon initial recognition of an asset in scope. The current incurred loss impairment model that recognizes losses when a probable threshold is met will be replaced with the expected credit loss impairment method without recognition threshold. The expected credit losses estimate will be based upon historical information, current conditions, and reasonable and supportable forecasts. In January 2017, the FASB issued ASU 2017-04, Intangibles Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment Intangibles - Goodwill and Other In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes Income Taxes Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements. |
Note 3 - Leases
Note 3 - Leases | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 3 - Leases | Note 3 – Leases The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate. As of December 31, 2020, the future minimum finance and operating lease payments are as follows: Finance Operating Years Ending December 31, Leases Leases 2021 $ 1,936,603 $ 402,688 2022 1,966,588 103,124 2023 1,983,755 105,156 2024 1,978,189 107,188 2025 1,862,341 26,924 Thereafter 17,561,746 - Total payments 27,289,222 745,080 Less: imputed interest (10,962,519) (141,550) Total obligation 16,326,703 603,530 Less: current portion (639,527) (334,500) Non-current capital leases obligations $ 15,687,176 $ 269,030 Finance Leases In 2016, the Company sold a building and used the money to purchase QCA. Because this was a financing transaction, the sale is recorded under "financing lease obligation" on the accompanying consolidated balance sheet and amortized over the 15-year term of the lease. The term of the lease has been extended through September 30, 2032, at a monthly rate of approximately $69,000. These payments are reflected in the table above. During the year ended December 31, 2019, the Company terminated its lease agreement for this building. As a result of the termination of this lease, the Company recognized a loss on disposal of property and equipment of $177,574. A letter of credit of $1,000,000 was provided to the landlord in the above QCA financing lease obligation that was collateralized by a deposit of $207,311. In connection with the termination of this lease in 2019, the deposit account collateralizing the letter of credit was no longer required. On April 5, 2018, the Company acquired APF. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from APF was sold for $1,900,000, and leased back to the company for a period of 15 years at a monthly rate of $15,833, subject to an annual increase of 2% throughout the term of the lease. The Company had no gain or loss resulting from the sale of the property, and the resulting lease qualifies as a capital lease. As a result, the Company has capitalized the cost of the building and the resulting capital lease obligation liability of $1,900,000. The payments related to this lease are reflected in the table above. On October 1, 2020 an amendment and consent to assignment was executed between the landlord and Excel and QCA. On January 1, 2019, the Company acquired Morris. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from Morris was sold for $3,267,000, and leased back to the company for a period of 15 years at a monthly rate of $27,500, subject to an annual increase of 2% throughout the term of the lease. The transaction did not qualify as a sale and leaseback transaction under Topic 842 and as such was accounted for as a financing lease. The payments related to this lease are reflected in the table above. On November 6, 2019, the Company acquired Deluxe. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from Deluxe was sold for $9,000,000, and leased back to the company for a period of 15 years at a monthly rate of $75,000, subject to an annual increase of 2.5% throughout the term of the lease. The transaction did not qualify as a sale and leaseback transaction under Topic 842 and as such was accounted for as a financing lease. The payments related to this lease are reflected in the table above. On February 21, 2020, the Company acquired Excel. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from Excel was sold for $2,000,000, and leased back to the Company for a period of 15 years at a monthly rate of $18,700 for the first five years, subject to annual increases throughout the term of the lease. The transaction did not qualify as a sale and leaseback transaction under Topic 842 and as such was accounted for as a financing lease. The payments related to this lease are reflected in the table above. During the year ended December 31, 2020, the Company entered into three finance leases for equipment totaling $756,990. Each has a 60 month term with an interest rate ranging from 6.7% to 9%. Operating Leases The table below presents the lease related assets and liabilities recorded on the Company’s consolidated balance sheet as of December 31, 2020: December 31, December 31, Classification on Balance Sheet 2020 2019 Assets Operating lease assets Operating lease right of use assets $ 581,311 $ 660,032 Total lease assets $ 581,311 $ 660,032 Liabilities Current liabilities Operating lease liability Current operating lease liability $ 334,500 $ 266,623 Noncurrent liabilities Operating lease liability Long-term operating lease liability 269,030 403,931 Total lease liability $ 603,530 $ 670,554 During the year ended December 31, 2020, the Company amended its lease for its office space in Phoenix, Arizona through March 2025. As a result of this amendment, the Company remeasured the right of use asset and liability and recorded an additional $193,541 in right of use asset on the date of the modification. The lease expense for the years ended December 31, 2020 and 2019 was $373,884 and $350,339, respectively. The cash paid under operating leases during the years ended December 31, 2020 and 2019 was $362,771 and $339,818, respectively. At December 31, 2020, the weighted average remaining lease terms were 2.98 years and the weighted average discount rate was 15%. |
Note 4 - Notes Payable
Note 4 - Notes Payable | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 4 - Notes Payable | Note 4 – Notes Payable In May 2018, APF secured a line of credit with Crestmark, providing for borrowings up to $1,000,000 at a variable interest rate, collateralized by APF’s outstanding accounts receivable. In February 2019 the Company moved the Crestmark line of credit to FSW with a variable interest and collateralized by APF’s accounts receivable. In January 2020 the Company received a default notice from Crestmark regarding noncompliance with certain loan covenants, including but not limited to, QCA’s failure to maintain a tangible net worth as contained in the loan agreement. QCA’s credit line with Crestmark totaled $2,800,000 and was restructured from an ABL line of credit to a ledger line of credit. In addition, a minimum interest of 7.75% interest was imposed; an exit fee of 1% through January 31, 2021 and the financial covenant replaced with a requirement for QCA to maintain a free cash flow of at least $1.00 beginning with QCA’s financial statements as of January 31, 2020. The CEO has also validity guaranteed the $2.8 million line of credit with Crestmark. In addition with the acquisitions of Morris, Deluxe and Excel, the Company secured four lines of credit with Advanced Energy Capital for borrowings up to $6,250,000 at variable interest rates, collateralized by their respective accounts receivable. On February 22, 2018, the Company issued a $3,000,000 note payable under the Amended and Restated Secured Promissory Note with the seller of VWES. The note is secured by the assets of VWES and bears interest at 7% per annum and is due in semi-annual payments of $150,000 commencing on June 1, 2018, through June 1, 2020. The remaining principal and accrued interest is due on the 3 year anniversary. The Company is not current on its payments on the note. The balance as of December 31, 2020 is $2,857,500; the default rate is 10% and the daily late charge is $575. On April 5, 2018, the Company issued two secured promissory notes in the aggregate principal amount of $1,950,000 (“Secured APF Notes”) as part of the consideration for the purchase of APF. The Secured APF Notes are secured by the equipment, customer accounts and intellectual property of the Company, and all of the products and proceeds from any of the assets of APF. The Secured APF Notes bear interest at 4.25% per annum and have aggregate monthly payments of $19,975 for the first 23 months, with a balloon payment due in April 2020 for the remaining principal and interest outstanding. During the year ended December 31, 2020, the Company amended both of the notes. The noteholders forgave all $450,000 of the $450,000 convertible notes (See Note 6) in exchange for an increase in their notes payable of $67,617. The principal amount of their notes payable was amended to $1,689,000 at 0% interest with weekly payments of $4,086 and the balance to be paid on May 27, 2022. The Company recognized a gain on settlement of debt of $382,384 related to these transactions. The Company made payments on the note after the settlement of $62,019. The balance of these notes at December 31, 2020 was $1,569,769. On May 3, 2018, the Company entered into an equipment note with a lender for total borrowings of $630,750, which is secured by the equipment of APF. The note bears interest at 10.25% per annum and is payable in weekly payments of $3,795 commencing on the loan date through May 4, 2022. In connection with the Morris acquisition in January 2019, the Company issued three subordinated secured promissory notes for an aggregate of $3,100,000. The notes bear interest at 4.25% per annum, require monthly payment for the first 35 months of $31,755 with any remaining principal and accrued interest due on the 3 year-anniversary. The Company also issued three supplemental notes payable for an aggregate of $350,000. The notes bear interest at 4.25% per annum and are due on the 1-year anniversary. In May 2020, the Company amended the three supplemental notes of $116,667 each with the sellers of Morris. The notes were due January 1, 2020. Each of the new notes as of the date of amendment had accrued interest of $2,703. This was added to the note resulting in the principal amount of each of the new notes equaling to $119,370. The amendment required an initial payment of $30,000 for each note, which was made on May 23, 2020, and 8 monthly installments of $10,000 with one final payment of $13,882 through January 2021. The amended notes have an interest rate of 6%. The Company is current on all of the respective subordinated notes and the supplemental notes have been paid in full as of the date of this report. In connection with the Deluxe acquisition in November 2019, the Company issued two subordinated secured promissory notes to the seller. The first note for $1,900,000 bears interest at 4.25% per annum, require monthly payment for the first 35 months of $19,463 with any remaining principal and accrued interest due on the 3 year-anniversary. The second note for $496,343 bears interest at 8.75% and is due in January 2020. In January 2020, the Company entered into a debt conversion agreement with the seller which fully settled the second note. (See Note 7) In connection with the Excel acquisition in February 2020, the Company issued a subordinated secured promissory note to the seller. The note for $2,300,000 bears interest at 4.25% per annum, requires monthly interest only payments for 48 months and is due February 2024. The ending balance for this loan as of December 31, 2020 was $2,062,318. In November 2019, in connection with the termination of the lease for the San Diego building, the Company issued the landlord a note payable. The note is for $2,740,000, bears interest at 7% with monthly payments starting at $15,984 and is due in November 2034. No principal payments have been made, the outstanding balance as of December 31, 2020 was $2,810,646. In October and November 2019 the Company entered into two merchant agreements which are secured by rights to customer receipts until the loans have been repaid in full and subject to interest rates ranging from 13% to 20%. Under the terms of these agreements, the Company will receive the disclosed purchase price of $600,000 and $300,000, respectively and agreed to repay the disclosed purchased amount of $839,400 and $420,000, respectively. The merchant lenders collect the purchase amounts at the disclosed weekly payment rates of $29,978 and $11,667 over a period of 28 weeks and 36 weeks, respectively. These loans were personally guaranteed by the CEO and COO. Both merchant agreements were paid in full during the year ended December 31, 2020. In January 2020, the Company entered into a $200,000 term note with Celtic Capital, Inc. The note is subject to annual interest which is the greater of 13% or 11% plus the 3 month LIBOR rate and requires monthly payments of $3,333 over a period of 60 months. The note is secured by certain equipment of Deluxe. In connection with the Excel acquisition, the Company entered into a $425,000 term note with Celtic Capital, Inc. The note is subject to annual interest which is the greater of 13% or 11% plus the 3 month LIBOR rate and requires monthly payments of $7,083 over a period of 60 months. The note is secured by certain equipment of Excel. In October 2019 Morris entered into an equipment finance note for $107,997 with an interest rate of 9.4% for 48 monthly payments with Bryn Mawr Equipment Finance Inc. The Company issued a $48,000 note in January 2020 to a private investor with an interest rate of 15% with a due date of 1 year. In April and May 2020 the Company received seven loans under the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act totaling $4,340,956; this includes the assumption of Impossible Aerospace’s PPA Loan of $444,850. The loans have terms of 24 months and accrue interest at 1% per annum. The Company expects some or all of these loans to be forgiven as provided in the CARES Act. The outstanding balances for the loans as of December 31, 2020 and 2019 were as follows: December 31, December 31, 2020 2019 Lines of credit, current portion $ 2,819,793 $ 3,816,103 Equipment loans, current portion 245,388 368,011 Term notes, current portion 4,035,730 3,849,273 Merchant loans - 690,784 Total current 7,100,911 8,724,171 PPP loans 4,340,956 - Long-term portion of equipment loans and term notes 10,860,494 9,850,184 Total notes payable $ 22,302,361 $ 18,574,355 Future scheduled maturities of outstanding notes payable from related parties are as follows: Years Ending December 31, 2021 $ 7,100,911 2022 9,758,821 2023 426,368 2024 2,468,874 2025 309,246 Thereafter 2,238,141 Total $ 22,302,361 |
Note 5 - Notes Payable, Related
Note 5 - Notes Payable, Related Parties | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 5 - Notes Payable, Related Parties | Note 5 – Notes Payable, Related Parties At December 31, 2020 and 2019, notes payable due to related parties consisted of the following: December 31, December 31, 2020 2019 Notes payable; non-interest bearing; due upon demand; unsecured $ 3,000 $ 4,500 Note payable; bearing interest at 8% per annum; due June 30, 2017; unsecured - 7,500 Series of notes payable, bearing interest at rates from 3% to 20% per annum, with maturity dates from July 2018 to July 2020, unsecured 235,651 329,820 Total notes payable - related parties $ 238,651 $ 341,820 The above notes which were in default as of December 31, 2020, were due on demand by the lenders as of the date of this Report. |
Note 6 - Convertible Notes Paya
Note 6 - Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 6 - Convertible Notes Payable | Note 6 – Convertible Notes Payable At December 31, 2020 and 2019, convertible notes payable consisted of the following: December 31, December 31, 2020 2019 Series of convertible notes payable issued prior to December 31, 2016, bearing interest at rates of 8% - 20% per annum, with due dates ranging from April 2016 through October 2017. The outstanding principal and interest balances are convertible into shares of Class A common stock at the option of the debt holder at exercise prices ranging from $0.10 to $1 per share. $ 25,000 $ 25,000 Secured convertible notes payable issued to the sellers of QCA on April 1, 2016 for an aggregate of $2,000,000, bearing interest at 5% per annum, due in monthly payments starting on July 1, 2016 and due in full on July 1, 2019. On August 6 and 11, 2019, the Company extended the due date of the two notes to December 31, 2020 and December 31, 2022, respectively. In May and June 2020, these convertible notes were amended -- see (A) below. The outstanding principal and interest balances are convertible after 12 months into Class A common stock at the option of the debt holder at a conversion price of $10 per share. 1,291,463 1,324,588 Convertible note payable issued in January 2017, bearing interest at rates of 10% per annum, and due in January 2018. The outstanding principal and interest balances are convertible into shares of Class A common stock at the option of the debt holder at an exercise price of $1 per share. - 10,000 On April 5, 2018, the Company entered into convertible promissory notes for an aggregate principal amount of $450,000 as part of the consideration for the acquisition of APF. The convertible notes are due in full in 36 months and bear interest at 4.25% per annum, and are convertible into shares of Class A common stock after 6 months from the issuance date at a rate of $1 per share. During the year ended December 31, 2020, $450,000 of convertible notes were settled for the issuance of a note payable in the net amount of $67,617. A gain on settlement of $382,384 was recognized during the year ended December 31, 2020.(See Note 4 and (B) below) - 450,000 On April 9, 2018, the Company entered into a variable convertible note for $124,199 with net proceeds of $115,000. The note is due January 9, 2019 and bears interest at 12% per annum. After 180 days, the note is convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion. In connection with this variable convertible note, the Company issued 76,670 shares of its Class A common stock, along with warrants to purchase 153,340 shares of Class A common stock at an exercise price of $1 per share which are immediately vested and have a 3 year contractual life. The value of the common stock and warrants have been recorded as a discount. - 500 On August 30, 2018, the Company entered into a variable convertible note for $337,500 with net proceeds of $303,750. The note is due February 28, 2019 and bears interest at 10% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion. This note was amended in November 2019 to affect a floor in the conversion price of $0.15 per share. The note was fully converted as of December 31, 2020. - 187,681 On October 23, 2018, the Company entered into a variable convertible note for $220,000 with net proceeds of $198,000. The note is due December 14, 2018 and bears interest at 10% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion. This note was amended in November 2019 to affect a floor in the conversion price of $0.15 per share. The note was fully converted as of December 31, 2020. - 115,000 On December 7, 2018, the Company entered into a variable convertible note for $130,000 with net proceeds of $122,200. The note is due September 7, 2019 and bears interest at 12% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a discount of 40% to the lowest trading closing prices of the stock for 20 days prior to conversion. This note was amended in November 2019 to increase the principal amount by $180,000 due to penalty interest; increased the interest to 15% and affect a floor in the conversion price of $0.15 per share. $187,462 of principal amount of note was converted during December 31, 2020. 7,538 195,000 On November 6, 2019, the Company issued a convertible note for $600,000 with net proceeds of $570,000. The note is due November 6, 2020 and bears interest at 15% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a fixed price of $0.15 per share. This note was fully converted as of December 31, 2020. - 600,000 On November 6, 2019, the Company issued a convertible note for $350,000. The note is due November 6, 2020 and bears interest at 15% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a fixed price of $0.15 per share. This note was fully converted as of December 31, 2020. - 350,000 On November 14, 2019, the Company issued a convertible note for $137,870. The note is due November 13, 2020 and bears interest at 15% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a fixed price of $0.15 per share. The note was fully converted as of December 31, 2020. - 137,870 On November 14, 2019, the Company issued convertible note for $35,000. The note is due November 13, 2020 and bears interest at 15% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a fixed price of $0.15 per share. This note was fully converted as of December 31, 2020. - 35,000 On November 14, 2019, the Company issued convertible note for $200,000. The note is due November 13, 2020 and bears interest at 15% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a fixed price of $0.15 per share. As of December 31, 2020 this amount is past due. 200,000 200,000 In December 2020, the Company issued convertible notes to individual investors. The notes are due six months from the date of issuance; accrue interest at 5% per annum and are convertible into shares of the Company's Class A common stock at fixed rates ranging from of $0.25 to $3.00. 1,482,500 - Total convertible notes payable 3,006,501 3,630,639 Less: discount on convertible notes payable (1,343,624) (846,833) Total convertible notes payable, net of discount 1,662,877 2,783,806 Less: current portion of convertible notes payable (562,242) (1,110,118) Long-term portion of convertible notes payable $ 1,100,635 $ 1,673,688 (A) In May and June 2020 the Company amended the following seller notes: The convertible note with Jeff Moss with a $720,185 balance as of May 4, 2020 was amended to extend the maturity date to May 4, 2027 at 5% interest with weekly payments of $2,605. The principal balance was increased to $798,800 and the balance outstanding at December 31, 2020 was $735,329. The convertible note with Dwight Hargreaves with a $551,001 balance as of June 5, 2020 was amended to extend the maturity date to June 5, 2026 at 6% interest with weekly payments of $2,316. The principal balance was increased to $605,464 and the balance outstanding at December 31, 2020 was $556,135. A loss on extinguishment of debt of $192,272 was recognized on these transactions. (B) The convertible note with Andy Galbach with an outstanding balance of $450,000 was settled by forgiving $301,500 of the convertible note in exchange for an amendment of another note (one of the Secured APF Notes) which was amended to increase the principal amount by $172,179. The amended note had an amount of $1,239,000 and accrues interest at 0% with weekly payments of $2,644 and the balance to be paid on May 27, 2022. A gain on settlement of $129,321 on the Andy Galbach promissory note and convertible note was recognized during the year ended December 31, 2020. The convertible note with Carl Davis with an outstanding balance of $148,500 was settled by forgiving the entire $148,500 of the convertible note in exchange for an amendment of another note (one of the Secured APF Notes) which was amended to decrease the principal amount by $104,562. The amended note had an amount of $450,000 and accrues interest at 0% with weekly payments of $1,442 and the balance to be paid on May 27, 2022. A gain on settlement of $253,063 Carl Davis promissory note and convertible note was recognized during the year ended December 31, 2020. The discounts on convertible notes payable arise from stock issued with notes payable, beneficial conversion features, as well as conversion features of certain convertible notes being treated as derivative liabilities (see Note 11). During the years ended December 31, 2020 and 2019, the Company issued convertible notes with a fixed conversion price. The beneficial conversion feature related to these convertible notes that have been recorded as a discount on the convertible notes and as a component of equity was $1,482,500. The discounts are being amortized over the terms of the convertible notes payable. Amortization of debt discounts during the years ended December 31, 2020 and 2019 amounted to $985,709 and $1,144,756, respectively, and is recorded as interest expense in the accompanying consolidated statements of operations. The unamortized discount balance for these notes was $1,343,624 as of December 31, 2020, which is expected to be amortized over the next 12 months. A summary of the activity in the Company's convertible notes payable is provided below: Balance outstanding, December 31, 2018 $ 3,094,735 Issuance of convertible notes payable for cash 873,000 Issuance of convertible notes payable for penalty interest 492,890 Issuance of convertible notes payable for debt settlement 127,634 Repayment of notes (1,473,180) Conversion of notes payable to common stock (457,292) Discount from derivative liability and beneficial conversion feature (1,018,737) Amortization of debt discounts 1,144,756 Balance outstanding, December 31, 2019 2,783,806 Issuance of convertible notes payable for cash 1,482,500 Non-cash extinguishment (2,470) Repayment of notes (335,896) Conversion of notes payable to common stock (1,525,544) Penalty interest added to convertible note 15,000 Convertible note issued for interest 192,272 Settlement of convertible note (450,000) Amortization of debt discounts 985,709 Discount from beneficial conversion feature (1,482,500) Balance outstanding, December 31, 2020 $ 1,662,877 |
Note 7 - Stockholders' Equity
Note 7 - Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 7 - Stockholders' Equity | Note 7 – Stockholders' Equity Preferred Stock The Company is authorized to issue 5,000,000 shares of $0.0001 par value preferred stock. Series B Preferred Stock The Company is authorized to issue 100 shares of Series B preferred stock. The Series B Preferred Stock has a $1.00 stated value and does not accrue dividends. The Series B has the following voting rights: · If at least one share of Series B Preferred Stock is issued and outstanding, then the total aggregate issued shares of Series B Preferred Stock at any given time, regardless of their number, shall have that number of votes (identical in every other respect to the voting rights of the holders of all classes of Common Stock or series of preferred stock entitled to vote at any regular or special meeting of stockholders) equal to two hundred percent (200%) of the total voting power of all holders of the Company’s common and preferred stock then outstanding, but not including the Series B Preferred Stock. · If more than one share of Series B Preferred Stock is issued and outstanding at any time, then each individual share of Series B Preferred Stock shall have the voting rights equal to: Two hundred percent (200%) of the total voting power of all holders of the Company’s common and preferred stock then outstanding, but not including the Series B Preferred Stock divided by the number of shares of Series B Preferred Stock issued and outstanding at the time of voting. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a "Liquidation"), the Holders of the Series B Preferred Stock are entitled to receive out of the assets of the Company for each share of Series B Preferred Stock then held by the Holder an amount equal to the Stated Value, and all other amounts in respect thereof then due and payable before any distribution or payment shall be made to the holders of any Junior Securities. The Series B Preferred Stock shall be convertible into shares of the Company's Class A Common Stock only as follows: · In the event that the Holder of Series B Preferred Stock ceases to be a director of the Company, upon such director's resignation or removal from the board by any means, the shares of Series B Preferred Stock held by such resigning or removed director shall convert automatically into that same number of shares of Class A Common Stock (i.e. on a one-for-one share basis). · Shares of Series B Preferred Stock converted into Class A Common Stock, canceled, or redeemed, shall be canceled and shall have the status of authorized but unissued shares of undesignated preferred stock. As of December 31, 2020 and 2019, 5 and 0 shares of Series B Preferred Stock were outstanding and were issued to officers for services rendered. Series C Preferred Stock The Company designated 2,028,572 shares of Series C Preferred Stock with a stated value of $3.50 per share. No dividends will accrue on the Series C Preferred Stock. If dividends are declared on the Company’s Class A, Class B, or Class C Common Stock, the holders of the Series C Preferred Stock will participate in such dividends on a per share basis, pari passu with the Classes of Common Stock. Voting Rights - The Series C Preferred Stock will vote together with the Class A Common Stock on a one-vote-for-one-Preferred-share basis. As long as any shares of Series C Preferred Stock are outstanding, the Company may not, without the affirmative vote or written consent of the holders of a majority of the then outstanding shares of the Series C Preferred Stock, (a) alter or change the powers, preferences or rights given to the Series C Preferred Stock or alter or amend the Certificate of Designation, (b) amend its Certificate of Incorporation or other charter documents in any manner that adversely affects any rights of the holders of the Series C Preferred Stock, or (c) enter into any agreement or arrangement with respect to any of the foregoing. Liquidation -Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a "Liquidation"), the holders of the Series C Preferred Stock shall participate on a per share basis with the holders of the Class A, Class B, and Class C Common Stock of the Company, and shall be entitled to share equally, on a per share basis, all assets of the Company of whatever kind available for distribution to the holders of all classes of the Common Stock. The Company shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each record holder of Series C Preferred Stock. Conversion - The Series C Preferred Stock shall be convertible automatically into shares of the Company's Class A Common Stock (the “Automatic Conversion”) as follows: · Each share of Series C Preferred Stock will automatically convert into shares of the Company’s Class A Common Stock on the earlier to occur of (a) the fifth day after the twenty-four month anniversary of the original issue date or (b) the fifth day after the date on which the Company’s Class A Common Stock first trades on a national securities exchange (including but not limited to NASDAQ, NYSE, or NYSE American but excluding OTCQX Market) (such date, the “Automatic Conversion Date”). · The number of shares of the Company’s Class A Common Stock into which the Series C Preferred Stock shall be converted shall be determined by multiplying the number of shares of Series C Preferred Stock to be converted by the $3.50 stated value, and then dividing that product by the Conversion Price. The Conversion Price shall be equal to the Variable Weighted Average Price (“VWAP”) of the five Trading Days prior to the Automatic Conversion Date. “VWAP” shall be defined as the volume weighted average price of the Company’s Class A Common Stock on the OTC Markets or other stock exchange or trading medium where such shares are traded as reported by Bloomberg, L.P. using the VWAP function. If for any reason, VWAP cannot be thus determined, “VWAP” shall mean the average closing or last sale prices over the five Trading Days prior to the Automatic Conversion Date of the Company’s Class A Common Stock on the OTC Markets or such other exchange or trading medium. Restrictions on Resales of Class C Common Stock - The sale of shares of the Company’s Class A Common Stock issued at the time of conversion by any holder into the market or to any private purchaser shall be limited to not more than twenty-five percent (25%) of all conversion shares received by such holder at the time of the automatic conversion in any given 120-day period. Company Redemption Rights -At any time on or prior to the Automatic Conversion Date, the Company shall have the right to redeem all (but not less than all) shares of the Series C Preferred Stock issued and outstanding at any time after the original issue date, upon three (3) business days’ notice, at a redemption price per share of Series C Preferred Stock then issued and outstanding (the “Corporation Redemption Price”), equal to the stated value of $3.50 per share. During the year ended December 31, 2020, the Company issued 1,714,286 shares of Series C Preferred Stock in connection with the acquisition of assets of IA that were valued at $5,848,013. As of December 31, 2020 and 2019, 1,714,286 and 0 shares of Series C Preferred Stock were outstanding. Series D Preferred Stock The Company designated 1,628,572 shares of Series D Preferred Stock with a stated value of $3.50 per share. No dividends will accrue on the Series D Preferred Stock. If dividends are declared on the Company’s Class A, Class B, or Class C Common Stock, the holders of the Series D Preferred Stock will participate in such dividends on a per share basis, pari passu with the Classes of Common Stock. Voting Rights - The Series D Preferred Stock will vote together with the Class A Common Stock on a one-vote-for-one-Preferred-share basis. As long as any shares of Series D Preferred Stock are outstanding, the Company may not, without the affirmative vote or written consent of the holders of a majority of the then outstanding shares of the Series D Preferred Stock, (a) alter or change the powers, preferences or rights given to the Series D Preferred Stock or alter or amend the Certificate of Designation, (b) amend its Certificate of Incorporation or other charter documents in any manner that adversely affects any rights of the holders of the Series D Preferred Stock, or (c) enter into any agreement or arrangement with respect to any of the foregoing. Liquidation - Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a "Liquidation"), the holders of the Series D Preferred Stock shall participate on a per share basis with the holders of the Class A, Class B, and Class C Common Stock of the Company, and shall be entitled to share equally, on a per share basis, all assets of the Company of whatever kind available for distribution to the holders of all classes of the Common Stock. The Company shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each record holder of Series D Preferred Stock. Conversion - The Series D Preferred Stock shall be convertible automatically into shares of the Company's Class A Common Stock (the “Automatic Conversion”) as follows: · Each share of Series D Preferred Stock will automatically convert into shares of the Company’s Class A Common Stock on the earlier to occur of (a) the fifth day after the twenty-four month anniversary of the original issue date or (b) the fifth day after the date on which the Company’s Class A Common Stock first trades on a national securities exchange (including but not limited to NASDAQ, NYSE, or NYSE American but excluding OTCQX Market) (such date, the “Automatic Conversion Date”). · The number of shares of the Company’s Class A Common Stock into which the Series D Preferred Stock shall be converted shall be determined by multiplying the number of shares of Series D Preferred Stock to be converted by the $3.50 stated value, and then dividing that product by the Conversion Price. The Conversion Price shall be equal to the Variable Weighted Average Price (“VWAP”) of the five Trading Days prior to the Automatic Conversion Date. “VWAP” shall be defined as the volume weighted average price of the Company’s Class A Common Stock on the OTC Markets or other stock exchange or trading medium where such shares are traded as reported by Bloomberg, L.P. using the VWAP function. If for any reason, VWAP cannot be thus determined, “VWAP” shall mean the average closing or last sale prices over the five Trading Days prior to the Automatic Conversion Date of the Company’s Class A Common Stock on the OTC Markets or such other exchange or trading medium. Restrictions on Resales of Class A Common Stock - The sale of shares of the Company’s Class A Common Stock issued at the time of conversion by any holder into the market or to any private purchaser shall be limited to not more than twenty-five percent (25%) of all conversion shares received by such holder at the time of the automatic conversion in any given 90-day period. Company Redemption Rights -At any time on or prior to the Automatic Conversion Date, the Company shall have the right to redeem all (but not less than all) shares of the Series D Preferred Stock issued and outstanding at any time after the original issue date, upon three (3) business days’ notice, at a redemption price per share of Series D Preferred Stock then issued and outstanding (the “Corporation Redemption Price”), equal to the stated value of $3.50 per share. Registration Rights -The shares issued on conversion of the Series D Preferred Stock have piggyback registration rights beginning on that date which his six months after the date on which the Company’s Class A Common Stock trades on a national securities exchange, and are subject to standard underwriter holdback limitations As of December 31, 2020 and 2019, 0 and 0 shares of Series D Preferred Stock were outstanding. Common Stock Pursuant to the Amended and Restated Certificate of Incorporation, the Company is authorized to issue three classes of common stock: Class A common stock, which has one vote per share, Class B common stock, which has ten votes per share and Class C common stock, which has five votes per share. Any holder of Class B common stock may convert his or her shares at any time into shares of Class A common stock on a share-for-share basis. Otherwise the voting rights of the two classes of common stock will be identical. Any holder of Class C common stock may convert 25% of his or her shares at any time after the 3rd to 6th anniversary into shares of Class A common stock on a share-for-share basis. Otherwise the voting rights of the two classes of common stock will be identical. The Company had the following transactions in its common stock during the year ended December 31, 2020: · issued 11,513,935 shares of Class A common stock for cash for total proceeds of $674,469; · issued 12,861,995 shares of Class A common stock for the conversion of convertible debt and accrued interest of $1,929,300; · issued 1,617,067 shares of Class A common stock and 1,617,067 shares of Class C common stock to the Seller of Deluxe for the settlement of debt of $485,120; the fair value of the stock was $330,528. The Company recognized a gain on the settlement of debt of $154,592; · issued 300,000 shares of Class A common stock with a fair value of $44,700 to a noteholder as penalty interest; · issued 4,023,088 shares of Class B common stock to settle unpaid salaries of $603,463; and · issued 2,590,000 shares of Class C common stock for compensation valued at $240,093. The value was determined based on the market value of the Company common stock on the grant date. The Company had the following transactions in its common stock during the year ended December 31, 2019: · issued 68,602,751 shares of Class A common stock for the conversion of $457,292 of outstanding convertible notes payable and $66,544 of accrued interest; · issued 2,000,000 shares of Class A common stock in connection with the settlement of debt. The shares were valued at $470,400 which is based on the market value per share at the settlement date; · issued 2,700,000 shares of Class A common stock for a penalty related to a convertible note. The shares were valued at $680,625 which is based on the market value per share at the settlement date; · issued 200,000 shares of Class A common stock as a result of the conversion of a similar number of Class B common stock; · issued 7,097,595 shares of Class C common stock as a dividend to the Class A common stockholders; and · issued 200,000 shares of Class B common stock and 2,827,606 shares of Class C common stock to officer, directors and employees for services rendered valued at $43,474. Stock Options The Company has issued stock options to purchase shares of the Company’s Class A common stock issued pursuant to the Company's 2016 Stock Option and Stock Award Plan (the "Plan"). The Company uses the Black-Scholes option pricing model to estimate the fair value of stock-based awards on the date of grant and on each modification date. The following summarizes the stock option activity for the years ended December 31, 2020 and 2019: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life (Years) Value Outstanding at December 31, 2018 1,790,000 $ 0.19 9.10 $ - Granted 0 Forfeited 0 Exercised 0 Outstanding at December 31, 2019 1,790,000 $ 0.19 8.10 $ 176,445 Granted 0 Forfeited 0 Exercised 0 Outstanding at December 31, 2020 1,790,000 $ 0.19 7.09 $ 6,176,855 Vested and expected to vest at December 31, 2020 1,790,000 $ 0.19 7.09 $ 6,176,855 Exercisable at December 31, 2020 1,286,969 $ 0.23 6.96 $ 4,389,821 The following table summarizes information about options outstanding and exercisable as of December 31, 2020: Options Outstanding Options Exercisable Weighted Weighted Weighted Average Average Average Exercise Number Remaining Exercise Number Exercise Price of Shares Life (Years) Price of Shares Price $ 0.05 979,000 7.38 $ 0.05 577,500 $ 0.05 0.10 85,000 7.28 0.10 53,125 0.10 0.13 388,500 6.58 0.13 339,938 0.13 0.26 114,000 6.34 0.26 106,875 0.26 0.90 223,500 6.27 0.90 209,531 0.90 1,790,000 1,286,969 During the years ended December 31, 2020 and 2019, stock option expense amounted to $78,652 and $78,437, respectively. Unrecognized stock option expense as of December 31, 2020 amounted to $43,748, which will be recognized over a period extending through December 2022. Warrants As of December 31, 2020 and 2019, the Company had 275,000 and 277,001 warrants outstanding with a weighted average exercise price of $1.01 and $1.01, respectively. At December 31, 2020 and 2019, the weighted average remaining life of 0.23 and 1.23 years, respectively, and the aggregate intrinsic value was $723,250 and $0, respectively. During the year ended December 31, 2020, 2001 warrants expired. |
Note 8 - Business Combination
Note 8 - Business Combination | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 8 - Business Combination | Note 8 – Business Combinations Morris On January 9, 2019, (with an effective date of January 1, 2019) the Company entered into a Securities Purchase Agreement (the "SPA") with Morris Sheet Metal Corp., an Indiana corporation, JTD Spiral, Inc. a wholly owned subsidiary of MSM, an Indiana corporation, Morris Enterprises LLC, an Indiana limited liability company and Morris Transportation LLC, an Indiana limited liability company. This acquisition was considered an acquisition of a business under ASC 805. A summary of the purchase price allocation at fair value is below. Purchase Allocation Cash $ 192,300 Accounts receivable 2,146,541 Inventory 453,841 Contract assets 210,506 Property and equipment 4,214,965 Customer list 490,000 Goodwill 113,592 Accounts payable (234,236) Accrued expenses (351,865) Contract liabilities (92,043) Notes payable (1,033,695) $ 6,109,906 The purchase price was paid as follows: Cash $ 2,159,906 Seller notes 3,450,000 Acquisition contingency 500,000 $ 6,109,906 Per the SPA, one year after the closing date, the sellers would calculate monthly the 85/25 requirement to meet the Construction Industry Exemption for the Withdraw Liability (WDL). If the calculations verified that Morris Sheet Metal Corp. and/or JTD Spiral, Inc. met the Exemption requirement for six consecutive months the Company would pay the sellers a $500,000 success fee. In January 2020, the Company determined that the conditions were not met; therefore the Company was not required to pay the additional $500,000. Simultaneous with the purchase of Morris, a building owned by Morris prior to the acquisition was sold in a sale-leaseback transaction agreement, whereby the building was leased from the buyer for 15 years. The proceeds from the sale-leaseback of $3,267,000 were used to fund the cash consideration to the sellers. The building and the lease is being treated as a financing lease (see Note 3). Deluxe On November 6, 2019, the Company purchased all of the outstanding capital stock and units of Deluxe Sheet Metal, Inc., an Indiana corporation, and of DSM Holding, LLC, an Indiana limited liability company, and purchased certain real estate from Lonewolf Enterprises, LLC, an Indiana limited liability company (collectively “Deluxe”) This acquisition was considered an acquisition of a business under ASC 805. A summary of the purchase price allocation at fair value is below. Purchase Allocation Cash $ 140,948 Accounts receivable 2,785,454 Inventory 736,312 Prepaid expenses and other current assets 61,320 Contract assets 350,138 Property and equipment 9,502,045 Customer list 1,050,000 Accounts payable (1,122,317) Accrued expenses and other current liabilities (163,891) Contract liabilities (155,016) Notes payable (7,544,871) Bargain purchase gain (2,143,779) $ 3,496,343 The Company recognized a bargain purchase gain of $2,143,779 on the acquisition of Deluxe as a result the seller being motivated to sell in order to focus his time and effort on another business venture. The purchase price was paid as follows: Cash $ 1,100,000 Seller notes 2,396,343 $ 3,496,343 Simultaneous with the purchase of Deluxe, a building, owned by Deluxe prior to the acquisition, was sold in a sale-leaseback transaction agreement, whereby the building was leased from the buyer for 15 years. The proceeds from the sale-leaseback of $9,000,000 were used to fund the cash consideration to the sellers. The building and the lease is being treated as a financing lease (see Note 3). Excel On February 21, 2020, the Company purchased Excel Fabrication, LLC., an Idaho Limited Liability Company (“Excel”). This acquisition was considered an acquisition of a business under ASC 805. A summary of the purchase price allocation at fair value is below. Purchase Allocation Cash $ 174,283 Accounts receivable 1,943,480 Inventory 9,075 Property and equipment 2,958,190 Customer list 410,000 Goodwill 7,629 Accounts payable (340,151) Accrued expenses and other current liabilities (262,506) $ 4,900,000 The purchase price was paid as follows: Cash $ 2,600,000 Seller notes 2,300,000 $ 4,900,000 Simultaneous with the purchase of Excel, a building, owned by Excel prior to the acquisition, was sold in a sale-leaseback transaction agreement, whereby the building was leased from the buyer for 15 years. The proceeds from the sale-leaseback of $2,000,000 were used to fund the cash consideration to the seller. The building and the lease is being treated as a financing lease (see Note 3). Impossible Aerospace On November 13, 2020, the Company and a newly formed and wholly owned subsidiary of the Company named ALPP Acquisition Corporation 1, Inc. a Delaware corporation (“Merger Sub”), entered into a merger agreement (the “Agreement”) with IA pursuant to which IA merged with and into Merger Sub. The IA acquisition closed on December 15, 2020, and the Company added IA to the Company’s aerospace services portfolio of companies. Under the provision of ASC 805, the Company had to determine whether this acquisition was a business combination or an asset (or a group of assets) acquisition. In doing so, the Company determined that the acquisition of IA is in fact an asset purchase. Of the consideration given for the IA purchase more than 95% is concentrated in a single asset or a group of assets in Intellectual Property. And as such, the Company accounted for this acquisition as an asset acquisition in accordance with ASC 805-10-20. Accordingly, the assets acquired are initially recognized at the consideration paid, which was fair value of the preferred series C stock issued, including direct acquisition costs, of which there were none. The cost is allocated to the group of assets acquired based on their relative fair values. The assets acquired and liabilities assumed of were as follows at the purchase date: Purchase Allocation Cash $ 453,876 Inventory 199,438 Property and equipment 108,753 Patent 5,800,138 Non-solicitation covenant 105,457 Accrued expenses and other current liabilities (374,799) SBA loan (PPP funds) (444,850) $ 5,848,013 The purchase price was paid as follows: Series C Preferred Stock $ 5,848,013 $ 5,848,013 The following are the unaudited pro forma results of operations for the years ended December 31, 2020 and 2019, as if Morris, Deluxe, Excel, and IA had been acquired on January 1, 2019. The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results do include any anticipated cost savings or other effects of the planned integration of these entities, and are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the dates indicated. Pro Forma Combined Financials (unaudited) Years Ended December 31, 2020 2019 Sales $ 34,527,429 $ 44,746,995 Cost of goods sold 29,103,480 37,828,725 Gross profit 5,423,949 6,918,270 Operating expenses 13,933,972 17,478,575 Loss from operations (8,510,023) (10,560,305) Net loss from continuing operations (10,646,319) (13,732,688) Loss per share (0.08) (0.18) |
Note 9 - Income Taxes
Note 9 - Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 9 - Income Taxes | Note 9 – Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A full valuation allowance is established against the remaining net deferred tax assets as of December 31, 2020 and 2019 based on estimates of recoverability. The Company determined that such a valuation allowance was necessary given the current and expected near term losses and the uncertainty with respect to its ability to generate sufficient profits from its new business model. The Company's deferred tax assets, liabilities, and valuation allowance have been adjusted to reflect the impact of the new tax law. The following is a reconciliation of the difference between the effective and statutory income tax rates for years ended December 31: 2020 2019 Amount Percent Amount Percent Federal statutory rates $ (1,690,473) 21.0% $ (657,965) 21.0% State income taxes (482,992) 6.0% (187,990) 6.0% Permanent differences (495,960) 6.2% (406,359) 13.0% Valuation allowance against net deferred tax assets 2,576,374 -32.0% 1,165,260 -37.2% Effective rate $ (93,051) 1.2% $ (87,054) 2.8% The significant components of the deferred tax assets at December 31, 2020 and 2019, are summarized below: 2020 2019 Deferred income tax asset Net operation loss carryforwards $ 6,559,060 $ 3,828,580 Total deferred income tax asset 6,559,060 3,828,580 Less: valuation allowance (6,559,060) (3,828,580) Total deferred income tax asset $ - $ - The significant components of the deferred tax liabilities at December 31, 2020 and 2019, are summarized below: 2020 2019 Deferred income tax liabilities: Book to tax differences in intangible assets $ 428,199 $ 521,250 Total deferred income tax liability $ 428,199 $ 521,250 The deferred tax liability is mostly made up of the difference between book and tax values for property and equipment and intangible assets. The Company has recorded as of December 31, 2020 and 2019 a valuation allowance of $6,559,060 and $3,828,580, respectively, as management believes that it is more likely than not that the deferred tax assets will not be realized in future years. Management has based its assessment on the Company's lack of profitable operating history. The Company annually conducts an analysis of its tax positions and has concluded that it had no uncertain tax positions as of December 31, 2020 and 2019. The Company has net operating loss carry-forwards of approximately $23.5 million. Such amounts are subject to IRS code section 382 limitations and begin to expire in 2029. The tax years from 2017 to 2020 are still subject to audit. |
Note 10 - Industry Segments
Note 10 - Industry Segments | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 10 - Industry Segments | Note 10 – Industry Segments This summary presents the Company's segments, QCA ,APF, Morris, Deluxe, Excel and IA for the years ended December 31, 2020 and 2019: Years Months Ended December 31, 2020 2019 Revenue QCA $ 10,521,932 $ 9,050,560 APF 2,080,978 4,471,713 Morris 10,478,939 12,881,450 Deluxe 7,330,236 1,574,474 Excel 3,042,264 - Unallocated and eliminations - 173,327 $ 33,454,349 $ 28,151,524 Gross profit QCA $ 2,723,821 $ 2,270,301 APF 51,956 603,795 Morris 1,962,404 2,535,141 Deluxe 224,413 174,046 Excel 401,033 - Unallocated and eliminations - 59,195 $ 5,363,627 $ 5,642,478 Income (loss) from operations QCA $ 547,529 $ (242,729) APF (1,545,567) (189,013) Morris 402,807 673,650 Deluxe (1,435,146) (653,980) Excel (788,970) - Unallocated and eliminations (3,074,517) (2,067,654) $ (5,893,864) $ (2,479,726) Depreciation and amortization QCA $ 347,586 $ 307,172 APF 271,919 368,813 Morris 448,520 426,528 Deluxe 723,658 119,671 Excel 242,697 - Unallocated and eliminations 35,882 33,333 $ 2,070,262 $ 1,255,517 Interest Expenses QCA $ 559,068 $ 227,726 APF 165,274 346,927 Morris 1,016,204 425,177 Deluxe 967,133 384,828 Excel 421,377 - Unallocated and eliminations 2,334,541 3,852,547 $ 5,463,597 $ 5,237,205 Net income (loss) QCA $ 18,945 $ (292,399) APF (1,385,184) (473,135) Morris (81,824) 279,592 Deluxe (2,304,345) 1,104,971 Excel (1,210,347) - Unallocated and eliminations (3,087,118) (6,172,043) $ (8,049,873) $ (5,553,014) As of As of December 31, December 31, 2020 2019 Total Assets QCA $ 9,574,237 $ 6,359,711 APF 1,157,699 5,344,175 Morris 6,881,599 8,771,165 Deluxe 12,039,414 14,810,307 Excel 3,727,168 - Impossible Aerospace 6,342,863 - Unallocated and eliminations 1,011,203 516,240 $ 40,734,183 $ 35,801,598 Goodwill QCA $ 1,963,761 $ 1,963,761 APF - 440,100 Morris 113,592 113,592 Deluxe - - Excel - - Impossible Aerospace 7,629 - Unallocated and eliminations - - $ 2,084,982 $ 2,517,453 Accounts receivable, net QCA $ 1,938,446 $ 1,234,898 APF 45,022 831,477 Morris 1,944,269 3,488,340 Deluxe 2,015,745 3,156,492 Excel 541,387 - Unallocated and eliminations - 20,358 $ 6,484,869 $ 8,731,565 |
Note 11 - Derivative Liabilitie
Note 11 - Derivative Liabilities and Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 11 - Derivative Liabilities and Fair Value Measurements | Note 11 – Derivative Liabilities and Fair Value Measurements Derivative liabilities The Company has issued convertible notes payable that were evaluated under the guidance in ASC 815-40, Derivatives and Hedging, and were determined to have characteristics of derivative liabilities. As a result of the characteristics of these notes, the conversion options relating to previously issued convertible debt and outstanding Class A common stock warrants were also required to be accounted for as derivative liabilities under ASC 815. Under this guidance, this derivative liability is marked-to-market at each reporting period with the non-cash gain or loss recorded in the period as a gain or loss on derivatives. The valuation of our embedded derivatives is determined by using the Black-Scholes Option Pricing Model. As such, our derivative liabilities have been classified as Level 3. The Company estimated the fair value of the derivative liabilities using the Black-Scholes Option Pricing Model and the following key assumptions during the year ended December 31, 2019: 2019 Risk free rate 1.60% Volatility 287%-298% Expected terms (years) 0.5 to 1.26 Dividend rate 0% Fair value measurements ASC 820, Fair Value Measurements and Disclosures Level 1 Level 2 Level 3 If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level of input that is significant to the fair value measurement of the instrument. The following table provides a summary of the fair value of our derivative liabilities as of December 31, 2020 and 2019. There were no derivative liabilities at December 31, 2020 as the convertible notes with variable conversion prices were repaid during the year ended December 31, 2020. Fair Value Fair Value Measurements at As of December 31, 2020 Description December 31, 2020 Using Fair Value Hierarchy Level 1 Level 2 Level 3 Conversion feature on convertible notes $ - $ - $ - $ - Fair Value Fair Value Measurements at As of December 31, 2019 Description December 31, 2019 Using Fair Value Hierarchy Level 1 Level 2 Level 3 Conversion feature on convertible notes $ 2,298,609 $ - $ - $ 2,298,609 The below table presents the change in the fair value of the derivative liabilities during the years ended December 31, 2020: Derivative liability balance, December 31, 2018 $ 1,892,321 Issuance of derivative liability during the period 1,538,865 Derivative liability resolution (864,679) Change in derivative liability during the period (267,898) Derivative liability balance, December 31, 2019 2,298,609 Change in derivative liability during the period (2,298,609) Derivative liability balance, December 31, 2020 $ - |
Note 12 - Contingencies
Note 12 - Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Note 12 - Contingencies | Note 12 - Contingencies Legal Proceedings From time to time, the Company may become involved in lawsuits and other legal proceedings that arise in the course of business. Litigation is subject to inherent uncertainties, and it is not possible to predict the outcome of litigation with total confidence. The Company is currently not aware of any legal proceedings or potential claims against it whose outcome would be likely, individually or in the aggregate, to have a material adverse effect on the Company’s business, financial condition, operating results, or cash flows. In June 2020, the Company’s subsidiary Excel Fabrication, LLC filed a lawsuit against Fusion Mechanical, LLC, in the Fifth Judicial District Court, State of Idaho (Case Number CV42-20-2246). The Company claimed tortious interference and trade secret violations by the defendant. The defendant filed a motion to dismiss, which was denied by the Court. As of the date of this Report, discovery was proceeding. The Company intends to pursue vigorously its claims. In August 2020, the Company filed a lawsuit in the United States District Court, District of Arizona (Case No.2:20-cv-01679-DJH), against Alan Martin, the seller of Horizon Well Testing LLC (“HWT”) dba Venture West Energy Services, LLC. The Company brought claims for breach of contract, including but not limited to breaches of the seller’s representations and warranties in the purchase agreement in connection with the acquisition of HWT. The defendant answered and counterclaimed, claiming breach by the Company of its obligation to issue a promissory note (to be issued in connection with the acquisition of HWT). The parties have engaged in discovery and settlement negotiations, both of which were ongoing. |
Note 13 - Discontinued Operatio
Note 13 - Discontinued Operations | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 13 - Discontinued Operations | Note 13 – Discontinued Operations In December 2018, the Company decided to shut down the operations of its VWES subsidiary. In February 2019, VWES filed for Chapter 7 bankruptcy. VWES has been presented as discontinued operations in the accompanying consolidated financial statements. The operating results for VWES have been presented in the accompanying consolidated statement of operations for the years ended December 31, 2020 and 2019 as discontinued operations and are summarized below: Years Ended December 31, 2020 2019 Revenue $ - $ - Cost of revenue - - Gross Profit - - Operating expenses - 95,179 Loss from operations - (95,179) Other income (expenses) - - Net loss $ - $ (95,179) As of December 31, 2019, VWES’ bankruptcy was completed and the Company removed all the assets and liabilities of VWES resulting in a gain on the disposition of discontinued operations of $2,515,028. |
Note 14 - Subsequent Events
Note 14 - Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 14 - Subsequent Events | Note 14 – Subsequent Events In January 2021, the Company entered into convertible notes totaling $388,000 with the conversion price of $3.00 per share maturing in 3 months and interest rates ranging from 5% to 6.25%. Beginning February 9, 2021, and through the date of this Report, the Company paid down $10.9 million of debt including accrued interest; $2.4 million in lines of credit; $1.4 million in equipment notes; and $7.1 million in other notes. In March 2021, the Company repurchased 514,286 outstanding restricted stock units (RSUs) which had not yet settled, from two individuals in privately negotiated transactions. The Company purchased 314,286 Series C Preferred Shares and 200,000 Series D Preferred Shares at $3.50 per share. The RSUs had been issued to the individuals in connection with recent merger transactions. The Company also purchased 15,000 Class C Shares each from three non-executive employees at $4.14 per share and returned those shares to treasury. On April 8, 2021, the Company entered into a settlement agreement with Kevin Smith wherein the outstanding balance of his notes amounting to $1,883,418 including accrued interest and net other costs was settled in full through a payment of approximately $887,000 and the exchange of 1,617,067 shares of the Company’s Class C common shares held by him to the same number of the Company’s Class A common stock. Vayu (US) Merger Transaction On December 29, 2020, the Company entered into a merger agreement (the “Vayu Agreement”) with Vayu (US), Inc., a Delaware corporation (“Vayu”) were the Company issued 1,428,572 Series D Preferred shares to acquire Vayu. The Vayu merger closed on February 8, 2021. Registered Direct Offering On February 11, 2021, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors to purchase of 8,333,333 shares of the Company’s Class A common stock for aggregate gross proceeds of approximately $50 million. A.G.P./Alliance Global Partners served as the placement agent and received a cash fee of 7% of the aggregate gross proceeds and warrants to purchase shares of the Company’s Class A Common Stock in an amount equal to 5% of the Shares from the offering with an exercise price of $6.60 per share and are not exercisable until August 16, 2021. Net proceeds from the sale of shares amounted to approximately $46 million. Subsequent to December 31, 2020, the Company issued 1,524,064 shares of Class A common stock to an investor for cash for total proceeds of $9.3 million. In addition, the Company issued 702,877 shares of Class A common stock for the conversion of debt. |
Note 2 - Summary of Significa_2
Note 2 - Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policy Text Block [Abstract] | |
Principles of Consolidation | Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of December 31, 2020 and 2019. Significant intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of estimates The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. Preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable. In many instances, the Company could have reasonably used different accounting estimates and in other instances changes in the accounting estimates are reasonably likely to occur from period to period. This applies in particular to useful lives of non-current assets, valuation allowance for deferred tax assets and impairment of non-current assets. Actual results could differ significantly from our estimates. To the extent that there are material differences between these estimates and actual results, the Company’s future financial statement presentation, financial condition, results of operations and cash flows will be affected. . The ultimate impact from COVID-19 on the Company’s operations and financial results during 2021 will depend on, among other things, the ultimate severity and scope of the pandemic, the pace at which governmental and private travel restrictions and public concerns about public gatherings will ease, and the speed with which the economy recovers. The Company is not able to fully quantify the impact that these factors will have on the Company’s financial results during 2021 and beyond. COVID-19 did have a negative impact on the Company’s financial performance in 2020. During the year ended December 31, 2020, the Company took an impairment charge related to intangible assets and goodwill of $1,561,600. |
Reclassification | Reclassification Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position. |
Advertising | Advertising Advertising costs are expensed when incurred. All advertising takes place at the time of expense. We have no long-term contracts for advertising. Advertising expense for all periods presented were not significant. |
Cash | Cash Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days. As of December 31, 2020 and 2019, the Company had no cash equivalents. |
Major Customers | Major Customers The Company had two customers that made up 10% and 8%, respectively, of accounts receivable as of December 31, 2020. The Company had one customer that made up 7% of accounts receivable as of December 31, 2019. For the year ended December 31, 2020, the Company had one customer that made up 10% of total revenues. For the year ended December 31, 2019, the Company had one customer that made up 13% of total revenues |
Accounts Receivable | Accounts Receivable The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. As of December 31, 2020 and 2019, allowance for bad debt was $49,914 and $18,710, respectively. |
Inventory | Inventory Inventory for all subsidiaries, except Deluxe, is valued at weighted average and first-in; first-out basis for Deluxe. Management compares the cost of inventory with its net realizable value and an allowance is made to write down inventory to net realizable value, if lower. Inventory is segregated into three areas, raw materials, work-in-process and finished goods. Inventory, net at December 31, 2020 and 2019 consists of: December 31, December 31, 2020 2019 Raw materials $ 1,584,651 $ 1,791,733 Work in process 573,806 576,196 Finished goods 508,145 59,972 2,666,602 2,427,901 Reserve - (26,659) Inventory, net $ 2,666,602 $ 2,401,242 |
Property and Equipment | Property and Equipment Property and equipment are carried at cost less depreciation. Depreciation and amortization are provided principally on the straight-line method over the estimated useful lives of the assets, which range from ten years to 39 years as follows: Automobiles & Trucks 5 to 7 years Buildings and improvements 39 years Leasehold Improvements 15 years or time remaining on lease (whichever is shorter) Machinery and equipment 10 years Maintenance and repair costs are charged against income as incurred. Significant improvements or betterments are capitalized and depreciated over the estimated life of the asset. Property and equipment consisted of the following as of December 31, 2020 and 2019: December 31, December 31, 2020 2019 Automobiles and trucks $ 918,602 $ 563,614 Machinery and equipment 5,436,847 3,792,964 Office furniture and fixtures 119,546 119,526 Buildings and improvements 16,167,000 14,167,000 Leasehold improvements - 12,816 Total Property and equipment 22,641,995 18,655,920 Less: Accumulated depreciation (3,342,709) (1,498,075) Property and equipment, net $ 19,299,286 $ 17,157,845 Included in Buildings and improvements in the above table are two buildings of $9,000,000 and $2,000,000 related to sale leaseback transactions in connection with the acquisitions of Deluxe and Excel. (See Note 3.) During the year ended December 31, 2019, the Company terminated its lease agreement for the building it leased in San Diego, California which removed $3,895,000 and $294,525 from building and leasehold improvements, respectively. The lease of the San Diego building was accounted for as a capital lease. As a result of the termination of this lease, the Company recognized a loss on disposal of property and equipment of $237,048 In addition, as part of the termination, the Company issued the landlord a note payable in the amount of $2,740,000 (see Note 4). |
Purchased Intangibles and Other Long-lived Assets | Purchased Intangibles and Other Long-Lived Assets The Company amortizes intangible assets with finite lives over their estimated useful lives, which range between five and fifteen years as follows: Customer List 3-15 years Non-compete agreements 5-15 years Software development 5 years Patents 17 years Intangible assets consisted of the following as of December 31, 2020 and 2019: December 31, December 31, 2020 2019 Software $ 278,474 $ 278,474 Noncompete 205,457 100,000 Customer lists 2,031,187 2,861,187 Patents 5,800,137 - Total Intangible assets 8,315,255 3,239,661 Less: Accumulated amortization (572,171) (465,043) Intangibles, net $ 7,743,084 $ 2,774,618 Expected amortization expense of intangible assets over the next 5 years and thereafter is as follows: Years Ending December 31, 2021 $ 728,517 2022 663,413 2023 654,625 2024 511,274 2025 492,264 Thereafter 4,692,991 Total $ 7,743,084 |
Other Long-Term Assets | Other Long-Term Assets Other long-term assets consisted of the following as of December 31, 2020 and 2019: December 31, December 31, 2020 2019 Deposits $ 293,327 $ 285,927 Other 108,417 33,417 $ 401,744 $ 319,344 |
Impairment of Long-lived Assets | Impairment of Long-Lived Assets The Company accounts for long-lived assets in accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 360, Accounting for the Impairment of Long-Lived Assets |
Goodwill | Goodwill In financial reporting, goodwill is not amortized, but is tested for impairment annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Events that result in an impairment review include significant changes in the business climate, declines in our operating results, or an expectation that the carrying amount may not be recoverable. We assess potential impairment by considering present economic conditions as well as future expectations. All assessments of goodwill impairment are conducted at the individual reporting unit level. As of December 31, 2020 and 2019, the reporting units with goodwill were QCA, Morris and Excel. The Company used qualitative factors according to ASC 350-20-35-3 to determine whether it is more likely than not that the fair value of goodwill is less than its carrying amount. During the year ended December 31, 2020, the Company determined that the goodwill for APF was impaired, as the company ceased operating as of August 31, 2020 and took a charge to earnings of $440,100. During year ended December 31, 2019, there were no impairment charge related to goodwill. |
Fair Value Measurement | Fair Value Measurement The Company's financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, convertible notes, notes and line of credit. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements. For additional information, please see Note 11 – Derivative Liabilities and Fair Value Measurements. The carrying value of long-term debt approximates fair value since the related rates of interest approximate current market rates. |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers The following is a summary of the revenue recognition policy for each of the Company’s subsidiaries. Revenue is recognized under Topic 606 · executed contracts with the Company’s customers that it believes are legally enforceable; · identification of performance obligations in the respective contract; · determination of the transaction price for each performance obligation in the respective contract; · allocation the transaction price to each performance obligation; and · recognition of revenue only when the Company satisfies each performance obligation. The following is a summary of the revenue recognition policy for each of the Company’s subsidiaries. ALTIA Revenues recorded by ALTIA relate primarily to the Company’s 6th Sense Auto service. The Company accounts for its revenue by deferring the total contract amount and recognizing the amounts over the monthly subscription period, ranging from 12 to 36 months. QCA and Excel Fabrication QCA and Excel Fabrication are contract manufacturers and recognize revenue when the products have been built and control has been transferred to the customer. If a deposit for product or service is received prior to completion, the payment is recorded to deferred revenue until such point the product or services meets our revenue recognition policy. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed. For all periods presented, management determined that the warranty and returns would be immaterial. APF APF is a contract manufacturer and recognizes revenue when the products have been built and control has been transferred to the customer. If a deposit for product or service is received prior to completion, the payment is recorded to deferred revenue until such point the product or services meets our revenue recognition policy. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed. For all periods presented, management determined that the warranty and returns would be immaterial. Morris Sheet Metal and Deluxe Sheet Metal For our construction contracts, revenue is generally recognized over time as our performance creates or enhances an asset that the customer controls as it is created or enhanced. Our fixed price construction projects generally use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. For certain of our revenue streams, that are performed under time and materials contracts, our progress towards complete satisfaction of such performance obligations is measured using an output method as the customer receives and consumes the benefits of our performance completed to date. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. Contract Assets and Contract Liabilities The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets include unbilled amounts from our construction projects when revenues recognized under the cost-to-cost measure of progress exceed the amounts invoiced to our customers, as the amounts cannot be billed under the terms of our contracts. Such amounts are recoverable from our customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. In addition, many of our time and materials arrangements, are billed pursuant to contract terms that are standard within the industry, resulting in contract assets being recorded, as revenue is recognized in advance of billings. Our contract assets do not include capitalized costs to obtain and fulfill a contract. Contract assets are generally classified as current within the consolidated balance sheets. Contract liabilities from our construction contracts arise when amounts invoiced to our customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from our customers on certain contracts. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation. Contract Retentions As of December 31, 2020 and 2019, accounts receivable included retainage billed under terms of our contracts. These retainage amounts represent amounts which have been contractually invoiced to customers where payments have been partially withheld pending the achievement of certain milestones, satisfaction of other contractual conditions or completion of the project. |
Earnings (loss) per share | Earnings (loss) per share Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. The only potentially dilutive securities outstanding during the periods presented were the convertible debt and options. The following table illustrates the computation of basic and diluted EPS for the years ended December 31, 2020 and 2019: For the Year Ended December 31, 2020 For the Year Ended December 31, 2019 Net loss Shares Per Share Amount Net loss Shares Per Share Amount Basic EPS Loss available to stockholders $ (8,049,873) 132,987,390 $ (0.06) $ (3,133,165) 75,206,998 $ (0.04) Effect of Dilutive Securities Convertible debt (1,001,192) 6,624,400 - - Dilute EPS Loss available to stockholders plus assumed conversions $ (9,051,065) 139,611,790 $ (0.06) $ (3,133,165) 75,206,998 $ (0.04) |
Stock-based compensation | Stock-based compensation The Company accounts for equity instruments issued in exchange for the receipt of goods or services in accordance with ASC 718-10, Compensation – Stock Compensation |
Income taxes | Income taxes The Company records income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carry forwards. Accounting standards regarding income taxes requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on a more-likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry forward periods, the Company's experience with operating loss and tax credit carry forwards not expiring unused, and tax planning alternatives. The Company recorded valuation allowances on the net deferred tax assets. Management will reassess the realization of deferred tax assets based on the accounting standards for income taxes each reporting period. To the extent that the financial results of operations improve, and it becomes more likely than not that the deferred tax assets are realizable, the Company will be able to reduce the valuation allowance. Significant judgment is required in evaluating the Company's tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely, based solely on the technical merits, of being sustained on examinations. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments, and which may not accurately anticipate actual outcomes. |
Embedded Conversion Features | Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt under ASC 815 Derivatives and Hedging Debt with Conversion and Other Options |
Related Party Disclosure | Related Party Disclosure ASC 850, Related Party Disclosures |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope. The new standard represents significant changes to accounting for credit losses. Full lifetime expected credit losses will be recognized upon initial recognition of an asset in scope. The current incurred loss impairment model that recognizes losses when a probable threshold is met will be replaced with the expected credit loss impairment method without recognition threshold. The expected credit losses estimate will be based upon historical information, current conditions, and reasonable and supportable forecasts. In January 2017, the FASB issued ASU 2017-04, Intangibles Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment Intangibles - Goodwill and Other In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes Income Taxes Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements. |
Note 2 - Summary of Significa_3
Note 2 - Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Schedule of Inventory, Current | Inventory, net at December 31, 2020 and 2019 consists of: December 31, December 31, 2020 2019 Raw materials $ 1,584,651 $ 1,791,733 Work in process 573,806 576,196 Finished goods 508,145 59,972 2,666,602 2,427,901 Reserve - (26,659) Inventory, net $ 2,666,602 $ 2,401,242 |
Schedule of Property and Equipment, Estimated Useful Lives | Depreciation and amortization are provided principally on the straight-line method over the estimated useful lives of the assets, which range from ten years to 39 years as follows: Automobiles & Trucks 5 to 7 years Buildings and improvements 39 years Leasehold Improvements 15 years or time remaining on lease (whichever is shorter) Machinery and equipment 10 years |
Property, Plant and Equipment | Property and equipment consisted of the following as of December 31, 2020 and 2019: December 31, December 31, 2020 2019 Automobiles and trucks $ 918,602 $ 563,614 Machinery and equipment 5,436,847 3,792,964 Office furniture and fixtures 119,546 119,526 Buildings and improvements 16,167,000 14,167,000 Leasehold improvements - 12,816 Total Property and equipment 22,641,995 18,655,920 Less: Accumulated depreciation (3,342,709) (1,498,075) Property and equipment, net $ 19,299,286 $ 17,157,845 |
Schedule of Finite Lived Intangible Assets, Estimated Useful Lives | The Company amortizes intangible assets with finite lives over their estimated useful lives, which range between five and fifteen years as follows: Customer List 3-15 years Non-compete agreements 5-15 years Software development 5 years Patents 17 years |
Schedule of Intangible Assets | Intangible assets consisted of the following as of December 31, 2020 and 2019: December 31, December 31, 2020 2019 Software $ 278,474 $ 278,474 Noncompete 205,457 100,000 Customer lists 2,031,187 2,861,187 Patents 5,800,137 - Total Intangible assets 8,315,255 3,239,661 Less: Accumulated amortization (572,171) (465,043) Intangibles, net $ 7,743,084 $ 2,774,618 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Expected amortization expense of intangible assets over the next 5 years and thereafter is as follows: Years Ending December 31, 2021 $ 728,517 2022 663,413 2023 654,625 2024 511,274 2025 492,264 Thereafter 4,692,991 Total $ 7,743,084 |
Schedule of Other Assets, Noncurrent | Other long-term assets consisted of the following as of December 31, 2020 and 2019: December 31, December 31, 2020 2019 Deposits $ 293,327 $ 285,927 Other 108,417 33,417 $ 401,744 $ 319,344 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table illustrates the computation of basic and diluted EPS for the years ended December 31, 2020 and 2019: For the Year Ended December 31, 2020 For the Year Ended December 31, 2019 Net loss Shares Per Share Amount Net loss Shares Per Share Amount Basic EPS Loss available to stockholders $ (8,049,873) 132,987,390 $ (0.06) $ (3,133,165) 75,206,998 $ (0.04) Effect of Dilutive Securities Convertible debt (1,001,192) 6,624,400 - - Dilute EPS Loss available to stockholders plus assumed conversions $ (9,051,065) 139,611,790 $ (0.06) $ (3,133,165) 75,206,998 $ (0.04) |
Note 3 - Leases (Tables)
Note 3 - Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Schedule of Future Minimum Lease Payments for Capital Leases | As of December 31, 2020, the future minimum finance and operating lease payments are as follows: Finance Operating Years Ending December 31, Leases Leases 2021 $ 1,936,603 $ 402,688 2022 1,966,588 103,124 2023 1,983,755 105,156 2024 1,978,189 107,188 2025 1,862,341 26,924 Thereafter 17,561,746 - Total payments 27,289,222 745,080 Less: imputed interest (10,962,519) (141,550) Total obligation 16,326,703 603,530 Less: current portion (639,527) (334,500) Non-current capital leases obligations $ 15,687,176 $ 269,030 |
Schedule of Right of Use Assets and Lease Liabilities | The table below presents the lease related assets and liabilities recorded on the Company’s consolidated balance sheet as of December 31, 2020: December 31, December 31, Classification on Balance Sheet 2020 2019 Assets Operating lease assets Operating lease right of use assets $ 581,311 $ 660,032 Total lease assets $ 581,311 $ 660,032 Liabilities Current liabilities Operating lease liability Current operating lease liability $ 334,500 $ 266,623 Noncurrent liabilities Operating lease liability Long-term operating lease liability 269,030 403,931 Total lease liability $ 603,530 $ 670,554 |
Note 4 - Notes Payable (Tables)
Note 4 - Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Schedule of Notes Payable | The outstanding balances for the loans as of December 31, 2020 and 2019 were as follows: December 31, December 31, 2020 2019 Lines of credit, current portion $ 2,819,793 $ 3,816,103 Equipment loans, current portion 245,388 368,011 Term notes, current portion 4,035,730 3,849,273 Merchant loans - 690,784 Total current 7,100,911 8,724,171 PPP loans 4,340,956 - Long-term portion of equipment loans and term notes 10,860,494 9,850,184 Total notes payable $ 22,302,361 $ 18,574,355 |
Future Scheduled Maturities of Outstanding Notes Payable to Third Parties | Future scheduled maturities of outstanding notes payable from related parties are as follows: Years Ending December 31, 2021 $ 7,100,911 2022 9,758,821 2023 426,368 2024 2,468,874 2025 309,246 Thereafter 2,238,141 Total $ 22,302,361 |
Note 5 - Notes Payable, Relat_2
Note 5 - Notes Payable, Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Schedule of Notes Payable, Related Parties | At December 31, 2020 and 2019, notes payable due to related parties consisted of the following: December 31, December 31, 2020 2019 Notes payable; non-interest bearing; due upon demand; unsecured $ 3,000 $ 4,500 Note payable; bearing interest at 8% per annum; due June 30, 2017; unsecured - 7,500 Series of notes payable, bearing interest at rates from 3% to 20% per annum, with maturity dates from July 2018 to July 2020, unsecured 235,651 329,820 Total notes payable - related parties $ 238,651 $ 341,820 |
Note 6 - Convertible Notes Pa_2
Note 6 - Convertible Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Schedule of Convertible Notes Payable | At December 31, 2020 and 2019, convertible notes payable consisted of the following: December 31, December 31, 2020 2019 Series of convertible notes payable issued prior to December 31, 2016, bearing interest at rates of 8% - 20% per annum, with due dates ranging from April 2016 through October 2017. The outstanding principal and interest balances are convertible into shares of Class A common stock at the option of the debt holder at exercise prices ranging from $0.10 to $1 per share. $ 25,000 $ 25,000 Secured convertible notes payable issued to the sellers of QCA on April 1, 2016 for an aggregate of $2,000,000, bearing interest at 5% per annum, due in monthly payments starting on July 1, 2016 and due in full on July 1, 2019. On August 6 and 11, 2019, the Company extended the due date of the two notes to December 31, 2020 and December 31, 2022, respectively. In May and June 2020, these convertible notes were amended -- see (A) below. The outstanding principal and interest balances are convertible after 12 months into Class A common stock at the option of the debt holder at a conversion price of $10 per share. 1,291,463 1,324,588 Convertible note payable issued in January 2017, bearing interest at rates of 10% per annum, and due in January 2018. The outstanding principal and interest balances are convertible into shares of Class A common stock at the option of the debt holder at an exercise price of $1 per share. - 10,000 On April 5, 2018, the Company entered into convertible promissory notes for an aggregate principal amount of $450,000 as part of the consideration for the acquisition of APF. The convertible notes are due in full in 36 months and bear interest at 4.25% per annum, and are convertible into shares of Class A common stock after 6 months from the issuance date at a rate of $1 per share. During the year ended December 31, 2020, $450,000 of convertible notes were settled for the issuance of a note payable in the net amount of $67,617. A gain on settlement of $382,384 was recognized during the year ended December 31, 2020.(See Note 4 and (B) below) - 450,000 On April 9, 2018, the Company entered into a variable convertible note for $124,199 with net proceeds of $115,000. The note is due January 9, 2019 and bears interest at 12% per annum. After 180 days, the note is convertible into shares of the Company's Class A common stock at a discount of 35% to the average of the three lowest trading closing prices of the stock for ten days prior to conversion. In connection with this variable convertible note, the Company issued 76,670 shares of its Class A common stock, along with warrants to purchase 153,340 shares of Class A common stock at an exercise price of $1 per share which are immediately vested and have a 3 year contractual life. The value of the common stock and warrants have been recorded as a discount. - 500 On August 30, 2018, the Company entered into a variable convertible note for $337,500 with net proceeds of $303,750. The note is due February 28, 2019 and bears interest at 10% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion. This note was amended in November 2019 to affect a floor in the conversion price of $0.15 per share. The note was fully converted as of December 31, 2020. - 187,681 On October 23, 2018, the Company entered into a variable convertible note for $220,000 with net proceeds of $198,000. The note is due December 14, 2018 and bears interest at 10% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a discount of 42% to the average of the two lowest trading closing prices of the stock for ten days prior to conversion. This note was amended in November 2019 to affect a floor in the conversion price of $0.15 per share. The note was fully converted as of December 31, 2020. - 115,000 On December 7, 2018, the Company entered into a variable convertible note for $130,000 with net proceeds of $122,200. The note is due September 7, 2019 and bears interest at 12% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a discount of 40% to the lowest trading closing prices of the stock for 20 days prior to conversion. This note was amended in November 2019 to increase the principal amount by $180,000 due to penalty interest; increased the interest to 15% and affect a floor in the conversion price of $0.15 per share. $187,462 of principal amount of note was converted during December 31, 2020. 7,538 195,000 On November 6, 2019, the Company issued a convertible note for $600,000 with net proceeds of $570,000. The note is due November 6, 2020 and bears interest at 15% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a fixed price of $0.15 per share. This note was fully converted as of December 31, 2020. - 600,000 On November 6, 2019, the Company issued a convertible note for $350,000. The note is due November 6, 2020 and bears interest at 15% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a fixed price of $0.15 per share. This note was fully converted as of December 31, 2020. - 350,000 On November 14, 2019, the Company issued a convertible note for $137,870. The note is due November 13, 2020 and bears interest at 15% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a fixed price of $0.15 per share. The note was fully converted as of December 31, 2020. - 137,870 On November 14, 2019, the Company issued convertible note for $35,000. The note is due November 13, 2020 and bears interest at 15% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a fixed price of $0.15 per share. This note was fully converted as of December 31, 2020. - 35,000 On November 14, 2019, the Company issued convertible note for $200,000. The note is due November 13, 2020 and bears interest at 15% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a fixed price of $0.15 per share. As of December 31, 2020 this amount is past due. 200,000 200,000 In December 2020, the Company issued convertible notes to individual investors. The notes are due six months from the date of issuance; accrue interest at 5% per annum and are convertible into shares of the Company's Class A common stock at fixed rates ranging from of $0.25 to $3.00. 1,482,500 - Total convertible notes payable 3,006,501 3,630,639 Less: discount on convertible notes payable (1,343,624) (846,833) Total convertible notes payable, net of discount 1,662,877 2,783,806 Less: current portion of convertible notes payable (562,242) (1,110,118) Long-term portion of convertible notes payable $ 1,100,635 $ 1,673,688 |
Schedule of Acitivity of Convertible Notes Payable | A summary of the activity in the Company's convertible notes payable is provided below: Balance outstanding, December 31, 2018 $ 3,094,735 Issuance of convertible notes payable for cash 873,000 Issuance of convertible notes payable for penalty interest 492,890 Issuance of convertible notes payable for debt settlement 127,634 Repayment of notes (1,473,180) Conversion of notes payable to common stock (457,292) Discount from derivative liability and beneficial conversion feature (1,018,737) Amortization of debt discounts 1,144,756 Balance outstanding, December 31, 2019 2,783,806 Issuance of convertible notes payable for cash 1,482,500 Non-cash extinguishment (2,470) Repayment of notes (335,896) Conversion of notes payable to common stock (1,525,544) Penalty interest added to convertible note 15,000 Convertible note issued for interest 192,272 Settlement of convertible note (450,000) Amortization of debt discounts 985,709 Discount from beneficial conversion feature (1,482,500) Balance outstanding, December 31, 2020 $ 1,662,877 |
Note 7 - Stockholders' Equity (
Note 7 - Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Stock option activity | The following summarizes the stock option activity for the years ended December 31, 2020 and 2019: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life (Years) Value Outstanding at December 31, 2018 1,790,000 $ 0.19 9.10 $ - Granted 0 Forfeited 0 Exercised 0 Outstanding at December 31, 2019 1,790,000 $ 0.19 8.10 $ 176,445 Granted 0 Forfeited 0 Exercised 0 Outstanding at December 31, 2020 1,790,000 $ 0.19 7.09 $ 6,176,855 Vested and expected to vest at December 31, 2020 1,790,000 $ 0.19 7.09 $ 6,176,855 Exercisable at December 31, 2020 1,286,969 $ 0.23 6.96 $ 4,389,821 |
Summary of options outstanding and exercisable | The following table summarizes information about options outstanding and exercisable as of December 31, 2020: Options Outstanding Options Exercisable Weighted Weighted Weighted Average Average Average Exercise Number Remaining Exercise Number Exercise Price of Shares Life (Years) Price of Shares Price $ 0.05 979,000 7.38 $ 0.05 577,500 $ 0.05 0.10 85,000 7.28 0.10 53,125 0.10 0.13 388,500 6.58 0.13 339,938 0.13 0.26 114,000 6.34 0.26 106,875 0.26 0.90 223,500 6.27 0.90 209,531 0.90 1,790,000 1,286,969 |
Note 8 - Business Combination (
Note 8 - Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Acquisition, Pro Forma Information | However, pro forma results do include any anticipated cost savings or other effects of the planned integration of these entities, and are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the dates indicated. Pro Forma Combined Financials (unaudited) Years Ended December 31, 2020 2019 Sales $ 34,527,429 $ 44,746,995 Cost of goods sold 29,103,480 37,828,725 Gross profit 5,423,949 6,918,270 Operating expenses 13,933,972 17,478,575 Loss from operations (8,510,023) (10,560,305) Net loss from continuing operations (10,646,319) (13,732,688) Loss per share (0.08) (0.18) |
Morris | |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | A summary of the purchase price allocation at fair value is below. Purchase Allocation Cash $ 192,300 Accounts receivable 2,146,541 Inventory 453,841 Contract assets 210,506 Property and equipment 4,214,965 Customer list 490,000 Goodwill 113,592 Accounts payable (234,236) Accrued expenses (351,865) Contract liabilities (92,043) Notes payable (1,033,695) $ 6,109,906 The purchase price was paid as follows: Cash $ 2,159,906 Seller notes 3,450,000 Acquisition contingency 500,000 $ 6,109,906 |
Deluxe | |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | A summary of the purchase price allocation at fair value is below. Purchase Allocation Cash $ 140,948 Accounts receivable 2,785,454 Inventory 736,312 Prepaid expenses and other current assets 61,320 Contract assets 350,138 Property and equipment 9,502,045 Customer list 1,050,000 Accounts payable (1,122,317) Accrued expenses and other current liabilities (163,891) Contract liabilities (155,016) Notes payable (7,544,871) Bargain purchase gain (2,143,779) $ 3,496,343 The purchase price was paid as follows: Cash $ 1,100,000 Seller notes 2,396,343 $ 3,496,343 |
Excel | |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | Purchase Allocation Cash $ 174,283 Accounts receivable 1,943,480 Inventory 9,075 Property and equipment 2,958,190 Customer list 410,000 Goodwill 7,629 Accounts payable (340,151) Accrued expenses and other current liabilities (262,506) $ 4,900,000 The purchase price was paid as follows: Cash $ 2,600,000 Seller notes 2,300,000 $ 4,900,000 |
Impossible Aerospace | |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The assets acquired and liabilities assumed of were as follows at the purchase date: Purchase Allocation Cash $ 453,876 Inventory 199,438 Property and equipment 108,753 Patent 5,800,138 Non-solicitation covenant 105,457 Accrued expenses and other current liabilities (374,799) SBA loan (PPP funds) (444,850) $ 5,848,013 The purchase price was paid as follows: Series C Preferred Stock $ 5,848,013 $ 5,848,013 |
Note 9 - Income Taxes (Tables)
Note 9 - Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The following is a reconciliation of the difference between the effective and statutory income tax rates for years ended December 31: 2020 2019 Amount Percent Amount Percent Federal statutory rates $ (1,690,473) 21.0% $ (657,965) 21.0% State income taxes (482,992) 6.0% (187,990) 6.0% Permanent differences (495,960) 6.2% (406,359) 13.0% Valuation allowance against net deferred tax assets 2,576,374 -32.0% 1,165,260 -37.2% Effective rate $ (93,051) 1.2% $ (87,054) 2.8% |
Schedule of Deferred Tax Assets and Liabilities | The significant components of the deferred tax assets at December 31, 2020 and 2019, are summarized below: 2020 2019 Deferred income tax asset Net operation loss carryforwards $ 6,559,060 $ 3,828,580 Total deferred income tax asset 6,559,060 3,828,580 Less: valuation allowance (6,559,060) (3,828,580) Total deferred income tax asset $ - $ - The significant components of the deferred tax liabilities at December 31, 2020 and 2019, are summarized below: 2020 2019 Deferred income tax liabilities: Book to tax differences in intangible assets $ 428,199 $ 521,250 Total deferred income tax liability $ 428,199 $ 521,250 |
Note 10 - Industry Segments (Ta
Note 10 - Industry Segments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Schedule of Segment Reporting Information, by Segment | This summary presents the Company's segments, QCA ,APF, Morris, Deluxe, Excel and IA for the years ended December 31, 2020 and 2019: Years Months Ended December 31, 2020 2019 Revenue QCA $ 10,521,932 $ 9,050,560 APF 2,080,978 4,471,713 Morris 10,478,939 12,881,450 Deluxe 7,330,236 1,574,474 Excel 3,042,264 - Unallocated and eliminations - 173,327 $ 33,454,349 $ 28,151,524 Gross profit QCA $ 2,723,821 $ 2,270,301 APF 51,956 603,795 Morris 1,962,404 2,535,141 Deluxe 224,413 174,046 Excel 401,033 - Unallocated and eliminations - 59,195 $ 5,363,627 $ 5,642,478 Income (loss) from operations QCA $ 547,529 $ (242,729) APF (1,545,567) (189,013) Morris 402,807 673,650 Deluxe (1,435,146) (653,980) Excel (788,970) - Unallocated and eliminations (3,074,517) (2,067,654) $ (5,893,864) $ (2,479,726) Depreciation and amortization QCA $ 347,586 $ 307,172 APF 271,919 368,813 Morris 448,520 426,528 Deluxe 723,658 119,671 Excel 242,697 - Unallocated and eliminations 35,882 33,333 $ 2,070,262 $ 1,255,517 Interest Expenses QCA $ 559,068 $ 227,726 APF 165,274 346,927 Morris 1,016,204 425,177 Deluxe 967,133 384,828 Excel 421,377 - Unallocated and eliminations 2,334,541 3,852,547 $ 5,463,597 $ 5,237,205 Net income (loss) QCA $ 18,945 $ (292,399) APF (1,385,184) (473,135) Morris (81,824) 279,592 Deluxe (2,304,345) 1,104,971 Excel (1,210,347) - Unallocated and eliminations (3,087,118) (6,172,043) $ (8,049,873) $ (5,553,014) As of As of December 31, December 31, 2020 2019 Total Assets QCA $ 9,574,237 $ 6,359,711 APF 1,157,699 5,344,175 Morris 6,881,599 8,771,165 Deluxe 12,039,414 14,810,307 Excel 3,727,168 - Impossible Aerospace 6,342,863 - Unallocated and eliminations 1,011,203 516,240 $ 40,734,183 $ 35,801,598 Goodwill QCA $ 1,963,761 $ 1,963,761 APF - 440,100 Morris 113,592 113,592 Deluxe - - Excel - - Impossible Aerospace 7,629 - Unallocated and eliminations - - $ 2,084,982 $ 2,517,453 Accounts receivable, net QCA $ 1,938,446 $ 1,234,898 APF 45,022 831,477 Morris 1,944,269 3,488,340 Deluxe 2,015,745 3,156,492 Excel 541,387 - Unallocated and eliminations - 20,358 $ 6,484,869 $ 8,731,565 |
Note 11 - Derivative Liabilit_2
Note 11 - Derivative Liabilities and Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Schedule of Assumptions for Fair Value as of Balance Sheet Date of Assets or Liabilities | The Company estimated the fair value of the derivative liabilities using the Black-Scholes Option Pricing Model and the following key assumptions during the year ended December 31, 2019: 2019 Risk free rate 1.60% Volatility 287%-298% Expected terms (years) 0.5 to 1.26 Dividend rate 0% |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation | There were no derivative liabilities at December 31, 2020 as the convertible notes with variable conversion prices were repaid during the year ended December 31, 2020. Fair Value Fair Value Measurements at As of December 31, 2020 Description December 31, 2020 Using Fair Value Hierarchy Level 1 Level 2 Level 3 Conversion feature on convertible notes $ - $ - $ - $ - Fair Value Fair Value Measurements at As of December 31, 2019 Description December 31, 2019 Using Fair Value Hierarchy Level 1 Level 2 Level 3 Conversion feature on convertible notes $ 2,298,609 $ - $ - $ 2,298,609 |
Schedule of Derivative Liabilities at Fair Value | The below table presents the change in the fair value of the derivative liabilities during the years ended December 31, 2020: Derivative liability balance, December 31, 2018 $ 1,892,321 Issuance of derivative liability during the period 1,538,865 Derivative liability resolution (864,679) Change in derivative liability during the period (267,898) Derivative liability balance, December 31, 2019 2,298,609 Change in derivative liability during the period (2,298,609) Derivative liability balance, December 31, 2020 $ - |
Note 13 - Discontinued Operat_2
Note 13 - Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Disposal Groups, Including Discontinued Operations | The operating results for VWES have been presented in the accompanying consolidated statement of operations for the years ended December 31, 2020 and 2019 as discontinued operations and are summarized below: Years Ended December 31, 2020 2019 Revenue $ - $ - Cost of revenue - - Gross Profit - - Operating expenses - 95,179 Loss from operations - (95,179) Other income (expenses) - - Net loss $ - $ (95,179) |
Note 1 - Organization and Bas_2
Note 1 - Organization and Basis of Presentation (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | |
Feb. 09, 2021 | Feb. 28, 2021 | Apr. 08, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accumulated deficit | $ (39,795,401) | $ (31,745,528) | |||
Proceeds from sale of convertible notes | 1,482,500 | $ 873,000 | |||
Proceeds from sale of stock | 674,000 | ||||
Subsequent Event [Member] | |||||
Proceeds from sale of stock | $ 46,000,000 | ||||
Repayment of related party debt | $ 10,900,000 | 11,000,000 | $ 1,883,418 | ||
Subsequent Event [Member] | Investor [Member] | |||||
Proceeds from line of credit | $ 9,000,000 | ||||
PPP [Member] | |||||
Proceeds from loan | $ 4,000,000 |
Note 2 - Summary of Significa_4
Note 2 - Summary of Significant Accounting Policies: Use of estimates (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Text Block [Abstract] | |
Impairment of intangible assets and goodwill | $ 1,561,600 |
Note 2 - Summary of Significa_5
Note 2 - Summary of Significant Accounting Policies: Major Customers (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts Receivable Concentration Risk | ||
Concentration Risk, Customer | Company had two customers that made up 10% and 8%, respectively, of accounts receivable | Company had one customer that made up 7% of accounts receivable |
Revenues Concentration Risk | ||
Concentration Risk, Customer | Company had one customer that made up 10% of total revenues | Company had one customer that made up 13% of total revenues |
Note 2 - Summary of Significa_6
Note 2 - Summary of Significant Accounting Policies: Accounts Receivable (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Text Block [Abstract] | ||
Accounts Receivable, Allowance for Credit Loss | $ 49,914 | $ 18,710 |
Note 2 - Summary of Significa_7
Note 2 - Summary of Significant Accounting Policies: Inventory: Schedule of Inventory, Current (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Text Block [Abstract] | ||
Raw materials | $ 1,584,651 | $ 1,791,733 |
Work in process | 573,806 | 576,196 |
Finished goods | 508,145 | 59,972 |
Inventory, gross | 2,666,602 | 2,427,901 |
Reserve for inventory | 0 | (26,659) |
Inventory, net | $ 2,666,602 | $ 2,401,242 |
Note 2 - Summary of Significa_8
Note 2 - Summary of Significant Accounting Policies: Property and Equipment: Schedule of Property and Equipment, Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Buildings and Improvements | |
Property, Plant and Equipment, Useful Life | 39 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment, Useful Life | 15 years |
Equipment | |
Property, Plant and Equipment, Useful Life | 10 years |
Minimum | Vehicles | |
Property, Plant and Equipment, Useful Life | 5 years |
Maximum | Vehicles | |
Property, Plant and Equipment, Useful Life | 7 years |
Note 2 - Summary of Significa_9
Note 2 - Summary of Significant Accounting Policies: Property and Equipment: Property, Plant and Equipment (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Total Property and equipment | $ 22,641,995 | $ 18,655,920 |
Less: Accumulated depreciation | (3,342,709) | (1,498,075) |
Property and equipment, net | 19,299,286 | 17,157,845 |
Vehicles | ||
Total Property and equipment | 918,602 | 563,614 |
Machinery and Equipment | ||
Total Property and equipment | 5,436,847 | 3,792,964 |
Furniture and Fixtures | ||
Total Property and equipment | 119,546 | 119,526 |
Building Improvements | ||
Total Property and equipment | 16,167,000 | 14,167,000 |
Leasehold Improvements [Member] | ||
Total Property and equipment | $ 0 | $ 12,816 |
Note 2 - Summary of Signific_10
Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Finite Lived Intangible Assets, Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Software Development | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Patents [Member] | |
Finite-Lived Intangible Asset, Useful Life | 17 years |
Customer Lists | Minimum | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
Customer Lists | Maximum | |
Finite-Lived Intangible Asset, Useful Life | 15 years |
Noncompete Agreements | Minimum | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Noncompete Agreements | Maximum | |
Finite-Lived Intangible Asset, Useful Life | 15 years |
Note 2 - Summary of Signific_11
Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Intangible Assets (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Total Intangible assets | $ 8,315,255 | $ 3,239,661 |
Less: Accumulated amortization | (572,171) | (465,043) |
Total Intangible assets | 7,743,084 | 2,774,618 |
Computer Software, Intangible Asset | ||
Total Intangible assets | 278,474 | 278,474 |
Noncompete Agreements | ||
Total Intangible assets | 205,457 | 100,000 |
Customer Lists | ||
Total Intangible assets | 2,031,187 | 2,861,187 |
Patents [Member] | ||
Total Intangible assets | $ 5,800,137 | $ 0 |
Note 2 - Summary of Signific_12
Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Text Block [Abstract] | ||
2021 | $ 728,517 | |
2022 | 663,413 | |
2023 | 654,625 | |
2024 | 511,274 | |
2025 | 492,264 | |
Thereafter | 4,692,991 | |
Total | $ 7,743,084 | $ 2,774,618 |
Note 2 - Summary of Signific_13
Note 2 - Summary of Significant Accounting Policies: Purchased Intangibles and Other Long-lived Assets: Schedule of Other Assets, Noncurrent (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Other non-current assets | $ 401,744 | $ 319,344 |
Deposits {1} | ||
Other non-current assets | 293,327 | 285,927 |
Other | ||
Other non-current assets | $ 108,417 | $ 33,417 |
Note 2 - Summary of Signific_14
Note 2 - Summary of Significant Accounting Policies: Impairment of Long-lived Assets (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Customer List APF | |
Impairment of Long-Lived Assets | $ 671,500 |
Customer List Deluxe | |
Impairment of Long-Lived Assets | $ 450,000 |
Note 2 - Summary of Signific_15
Note 2 - Summary of Significant Accounting Policies: Goodwill (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Impairment of goodwill | $ 440,100 | $ 0 |
Note 2 - Summary of Signific_16
Note 2 - Summary of Significant Accounting Policies: Earnings (loss) per share : Computation of basic and diluted EPS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Income (loss) available to stockholders | $ (8,049,873) | $ (3,133,165) |
Convertible debt and options | (1,001,192) | 0 |
Income (loss) available to stockholders plus assumed conversions | $ (9,051,065) | $ (3,133,165) |
Weighted Average Number of Shares Outstanding, Basic | 132,987,390 | 75,206,998 |
Convertible debt and options | 6,624,400 | 0 |
Weighted Average Number of Shares Outstanding, Diluted | 139,611,790 | 75,206,998 |
Earnings Per Share, Basic | $ (0.06) | $ (0.04) |
Convertible debt and options | 0 | 0 |
Earnings Per Share, Diluted | $ (0.06) | $ (0.04) |
Note 3 - Leases (Details)
Note 3 - Leases (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | May 31, 2018 | |
Operating lease expense | $ 373,884 | $ 350,339 | |
Payment of Operating lease | $ 362,771 | 339,818 | |
Finance Lease, Weighted Average Remaining Lease Term | 2 years 11 months 23 days | ||
Finance Lease, Weighted Average Discount Rate, Percent | 15.00% | ||
Loss on disposal of property and equipment | $ 0 | $ (177,574) | |
APF | |||
Letter of credit | $ 2,800,000 | ||
Morris | |||
Sale-leaseback | 3,267,000 | ||
Deluxe | |||
Sale-leaseback | 9,000,000 | ||
Excel | |||
Sale-leaseback | 2,000,000 | ||
Finance Leases | Equipment | |||
Operating lease expense | 756,990 | ||
Finance Leases | QCA | |||
Monthly Operating Lease Obligation | 69,000 | ||
Letter of credit | 1,000,000 | ||
Deposit | 207,311 | ||
Loss on disposal of property and equipment | (177,574) | ||
Finance Leases | APF | |||
Monthly Operating Lease Obligation | 15,833 | ||
Capital Lease Obligations | 1,900,000 | ||
Sale-leaseback | 1,900,000 | ||
Finance Leases | Morris | |||
Monthly Operating Lease Obligation | 27,500 | ||
Sale-leaseback | 3,267,000 | ||
Finance Leases | Deluxe | |||
Monthly Operating Lease Obligation | 75,000 | ||
Sale-leaseback | 9,000,000 | ||
Finance Leases | Excel | |||
Monthly Operating Lease Obligation | 18,700 | ||
Sale-leaseback | 2,000,000 | ||
Phoenix | |||
Right of use asset | $ 193,541 |
Note 3 - Leases_ Schedule of Fu
Note 3 - Leases: Schedule of Future Minimum Lease Payments for Capital Leases (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Finance Leases | ||
2021 | $ 1,936,603 | |
2022 | 1,966,588 | |
2023 | 1,983,755 | |
2024 | 1,978,189 | |
2025 | 1,862,341 | |
Thereafter | 17,561,746 | |
Finance Lease, Liability, Payment, Due | 27,289,222 | |
Imputed Interest on Capital Lease | (10,962,519) | |
Total obligation | 16,326,703 | |
Financing lease obligation, current portion | (639,527) | |
Financing lease obligations, net of current portion | 15,687,176 | |
Operating Leases | ||
2020 | 402,688 | |
2021 | 103,124 | |
2022 | 105,156 | |
2023 | 107,188 | |
2024 | 26,924 | |
Thereafter | 0 | |
Total minimum lease payments | 745,080 | |
Less imputed interest | (141,550) | |
Total obligation | 603,530 | $ 670,554 |
Less:Operating lease obligation, current portion | (334,500) | (266,623) |
Operating lease obligations, net of current portion | $ 269,030 | $ 403,931 |
Note 3 - Leases_ Schedule of Ri
Note 3 - Leases: Schedule of Right of Use Assets and Lease Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Text Block [Abstract] | ||
Operating lease right of use assets | $ 581,311 | $ 660,032 |
Operating lease obligation, current portion | 334,500 | 266,623 |
Operating lease obligations, net of current portion | 269,030 | 403,931 |
Operating Lease, Liability | $ 603,530 | $ 670,554 |
Note 4 - Notes Payable (Details
Note 4 - Notes Payable (Details) - USD ($) | May 03, 2018 | Apr. 05, 2018 | May 31, 2020 | Feb. 29, 2020 | Jan. 31, 2020 | Nov. 30, 2019 | Oct. 31, 2019 | Jan. 31, 2019 | May 31, 2018 | Feb. 22, 2018 | May 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Notes payable | $ 22,302,361 | $ 18,574,355 | |||||||||||
Loss on extinguishment of debt | 344,704 | $ (68,526) | |||||||||||
Morris | |||||||||||||
Principal amount | $ 107,997 | ||||||||||||
Interest rate | 9.40% | ||||||||||||
Investor | |||||||||||||
Principal amount | $ 48,000 | ||||||||||||
Interest rate | 15.00% | ||||||||||||
Due date | Jan. 31, 2020 | ||||||||||||
Merchant Agreements | |||||||||||||
Principal amount | $ 300,000 | $ 600,000 | |||||||||||
Periodic payments | $ 11,667 | $ 29,978 | |||||||||||
Interest rate | 20.00% | 13.00% | |||||||||||
Repayment of debt | $ 420,000 | $ 839,400 | |||||||||||
Secured APF Notes | |||||||||||||
Principal amount | $ 1,950,000 | 1,689,000 | |||||||||||
Periodic payments | $ 19,975 | $ 4,086 | |||||||||||
Interest rate | 4.25% | 0.00% | |||||||||||
Due date | Apr. 30, 2020 | May 27, 2022 | |||||||||||
Notes payable | $ 1,569,769 | ||||||||||||
Repayment of debt | 62,019 | ||||||||||||
Debt forgiven | 450,000 | ||||||||||||
Loss on extinguishment of debt | 382,384 | ||||||||||||
Equipment note | |||||||||||||
Principal amount | $ 630,750 | ||||||||||||
Periodic payments | $ 3,795 | ||||||||||||
Interest rate | 10.25% | ||||||||||||
Due date | May 4, 2022 | ||||||||||||
San Diego building | |||||||||||||
Principal amount | 2,740,000 | ||||||||||||
Periodic payments | $ 15,984 | ||||||||||||
Interest rate | 7.00% | ||||||||||||
Due date | Nov. 30, 2034 | ||||||||||||
Notes payable | $ 2,810,646 | ||||||||||||
PPP loans | |||||||||||||
Interest rate | 1.00% | ||||||||||||
Proceeds from loans | $ 4,340,956 | ||||||||||||
Term | 24 months | ||||||||||||
VWES | |||||||||||||
Principal amount | $ 3,000,000 | ||||||||||||
Periodic payments | $ 150,000 | ||||||||||||
Interest rate | 7.00% | ||||||||||||
Notes payable | $ 2,857,500 | ||||||||||||
Default rate | 10.00% | ||||||||||||
Daily late charge | $ 575 | ||||||||||||
APF | |||||||||||||
Principal amount | $ 1,000,000 | ||||||||||||
Credit line | $ 2,800,000 | ||||||||||||
Minimum interest | 7.75% | ||||||||||||
Exit fee | 1.00% | ||||||||||||
Morris | Promissory Notes | |||||||||||||
Principal amount | $ 116,667 | $ 3,100,000 | $ 116,667 | 119,370 | |||||||||
Periodic payments | $ 31,755 | $ 13,882 | |||||||||||
Interest rate | 4.25% | 6.00% | |||||||||||
Due date | Jan. 1, 2020 | Jan. 31, 2021 | |||||||||||
Notes payable | $ 350,000 | ||||||||||||
Repayment of debt | $ 30,000 | ||||||||||||
Accrued interest | $ 2,703 | 2,703 | |||||||||||
Deluxe | Celtic Capital | |||||||||||||
Principal amount | $ 200,000 | ||||||||||||
Periodic payments | 3,333 | ||||||||||||
Deluxe | First note | |||||||||||||
Principal amount | 1,900,000 | ||||||||||||
Periodic payments | $ 19,463 | ||||||||||||
Interest rate | 4.25% | ||||||||||||
Deluxe | Second Note | |||||||||||||
Principal amount | $ 496,343 | ||||||||||||
Interest rate | 8.75% | ||||||||||||
Due date | Jan. 31, 2020 | ||||||||||||
Excel | Celtic Capital | |||||||||||||
Principal amount | 425,000 | ||||||||||||
Periodic payments | $ 7,083 | ||||||||||||
Excel | Promissory Notes | |||||||||||||
Principal amount | $ 2,300,000 | ||||||||||||
Interest rate | 4.25% | ||||||||||||
Notes payable | $ 2,062,318 | ||||||||||||
Impossible Aerospace | PPP loans | |||||||||||||
Proceeds from loans | $ 444,850 |
Note 4 - Notes Payable_ Schedul
Note 4 - Notes Payable: Schedule of Notes Payable (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Notes payable, current portion | $ 7,100,911 | $ 8,724,171 |
Notes Payable | 22,302,361 | 18,574,355 |
Lines of Credit | ||
Notes payable, current portion | 2,819,793 | 3,816,103 |
Equipment Loans | ||
Notes payable, current portion | 245,388 | 368,011 |
Short Term Notes | ||
Notes payable, current portion | 4,035,730 | 3,849,273 |
Merchant Loans | ||
Notes payable, current portion | 0 | 690,784 |
PPP loans | ||
Long-term Debt | 4,340,956 | 0 |
Equipment, Noncurrent | ||
Long-term Debt | $ 10,860,494 | $ 9,850,184 |
Note 4 - Notes Payable_ Future
Note 4 - Notes Payable: Future Scheduled Maturities of Outstanding Notes Payable to Third Parties (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Text Block [Abstract] | |
2021 | $ 7,100,911 |
2022 | 9,758,821 |
2023 | 426,368 |
2024 | 2,468,874 |
2025 | 309,246 |
Thereafter | 2,238,141 |
Total | $ 22,302,361 |
Note 5 - Notes Payable, Relat_3
Note 5 - Notes Payable, Related Parties: Schedule of Notes Payable, Related Parties (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Notes payable, related parties, current portion | $ 238,651 | $ 341,820 |
Notes Payable 1 | ||
Notes payable, related parties, current portion | 3,000 | 4,500 |
Notes Payable 2 | ||
Notes payable, related parties, current portion | 0 | 7,500 |
Notes Payable 3 | ||
Notes payable, related parties, current portion | $ 235,651 | $ 329,820 |
Note 6 - Convertible Notes Pa_3
Note 6 - Convertible Notes Payable (Details) - USD ($) | Jun. 05, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Convertible notes payable | $ 3,006,501 | $ 3,630,639 | ||
Loss on extinguishment of debt | 344,704 | (68,526) | ||
Amortization of debt discounts | 985,709 | 1,144,756 | ||
Unamortized discount | 1,343,624 | $ 846,833 | ||
Beneficial conversion feature | 1,482,500 | |||
Jeff Moss | ||||
Interest rate | 5.00% | |||
Principal amount | 798,800 | |||
Periodic payments | $ 2,605 | |||
Convertible notes payable | 735,329 | |||
Due date | May 4, 2027 | |||
Dwight Hargreaves | ||||
Interest rate | 6.00% | |||
Principal amount | $ 551,001 | 605,464 | ||
Periodic payments | $ 2,316 | |||
Convertible notes payable | 556,135 | |||
Due date | Jun. 5, 2026 | |||
Loss on extinguishment of debt | 192,272 | |||
Andy Galbach | ||||
Interest rate | 0.00% | |||
Principal amount | $ 172,179 | |||
Periodic payments | 2,644 | |||
Convertible notes payable | $ 1,239,000 | |||
Due date | May 27, 2022 | |||
Loss on extinguishment of debt | $ 129,321 | |||
Debt forgiving | $ 301,500 | |||
Carl Davis | ||||
Interest rate | 0.00% | |||
Principal amount | $ 450,000 | |||
Periodic payments | $ 1,442 | |||
Due date | Jul. 14, 2026 | |||
Loss on extinguishment of debt | $ 253,063 | |||
Debt forgiving | $ 148,500 |
Note 6 - Convertible Notes Pa_4
Note 6 - Convertible Notes Payable: Schedule of Convertible Notes Payable (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Convertible Notes Payable | $ 3,006,501 | $ 3,630,639 | |
Debt Instrument, Unamortized Discount | (1,343,624) | (846,833) | |
Convertible Notes Payable, net of discount | 1,662,877 | 2,783,806 | $ 3,094,735 |
Convertible notes payable, current | (562,242) | (1,110,118) | |
Convertible notes payable, net of current portion | 1,100,635 | 1,673,688 | |
Convertible Notes Payable 1 | |||
Convertible Notes Payable | 25,000 | 25,000 | |
Convertible Notes Payable 2 | |||
Convertible Notes Payable | 1,291,463 | 1,324,588 | |
Convertible Notes Payable 3 | |||
Convertible Notes Payable | 0 | 10,000 | |
Convertible Notes Payable 4 | |||
Convertible Notes Payable | 0 | 450,000 | |
Convertible Notes Payable 5 | |||
Convertible Notes Payable | 0 | 500 | |
Convertible Notes Payable 6 | |||
Convertible Notes Payable | 0 | 187,681 | |
Convertible Notes Payable 7 | |||
Convertible Notes Payable | 0 | 115,000 | |
Convertible Notes Payable 8 | |||
Convertible Notes Payable | 7,538 | 195,000 | |
Convertible Notes Payable 9 | |||
Convertible Notes Payable | 0 | 600,000 | |
Convertible Notes Payable 10 | |||
Convertible Notes Payable | 0 | 350,000 | |
Convertible Notes Payable 11 | |||
Convertible Notes Payable | 0 | 137,870 | |
Convertible Notes Payable 12 | |||
Convertible Notes Payable | 0 | 35,000 | |
Convertible Notes Payable 13 | |||
Convertible Notes Payable | 200,000 | 200,000 | |
Convertible Notes Payable 14 | |||
Convertible Notes Payable | $ 1,482,500 | $ 0 |
Note 6 - Convertible Notes Pa_5
Note 6 - Convertible Notes Payable: Schedule of Acitivity of Convertible Notes Payable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Convertible Notes Payable, net of discount at beginning | $ 2,783,806 | $ 3,094,735 |
Issuance of convertible notes payable for cash | 1,482,500 | 873,000 |
Issuance of convertible debentures for penalty interest | 492,890 | |
Issuance of convertible notes payable for debt settlement | 127,634 | |
Non-cash extinguishment | (2,470) | |
Repayment of notes | (335,896) | (1,127,634) |
Conversion of notes payable to common stock | (1,525,544) | (457,292) |
Discount from derivative liability and beneficial conversion feature | (1,018,737) | |
Amortization of debt discounts | 985,709 | 1,144,756 |
Penalty interest added to convertible note | 15,000 | |
Convertible note issued for interest | 192,272 | |
Settlement of convertible note | (450,000) | |
Discount from beneficial conversion feature | (1,482,500) | |
Convertible Notes Payable, net of discount at end | $ 1,662,877 | $ 2,783,806 |
Note 7 - Stockholders' Equity_2
Note 7 - Stockholders' Equity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Shares issued for acquisition, value | $ 5,848,013 | |
Common stock issued, amount | 674,469 | |
(Gain) loss on extinguishment of debt | (344,704) | $ 68,526 |
Shares issued for services, value | 43,474 | |
Stock Options Expense | 78,652 | $ 78,437 |
Unrecognized stock option expense | $ 43,748 | |
Warrant [Member] | ||
Warrants granted | 275,000 | 277,001 |
Warrant term | 2 months 23 days | 1 year 2 months 23 days |
Warrant exercise price | $ 1.01 | $ 1.01 |
Warrant expired | 2,001 | |
Warrant aggregate intrinsic value | $ 723,250 | $ 0 |
Series B Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 100 | 100 |
Preferred Stock, Par or Stated Value Per Share | $ 1 | $ 1 |
Preferred Stock, Shares Issued | 5 | 0 |
Preferred Stock, Shares Outstanding | 5 | 0 |
Series C Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 2,028,572 | 2,028,572 |
Preferred Stock, Par or Stated Value Per Share | $ 3.50 | $ 3.50 |
Preferred Stock, Shares Issued | 1,714,286 | 0 |
Preferred Stock, Shares Outstanding | 1,714,286 | 0 |
Series C Preferred Stock [Member] | Impossible Aerospace | ||
Shares issued for acquisition, shares | 1,714,286 | |
Shares issued for acquisition, value | $ 5,848,013 | |
Series D Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 1,628,572 | 1,628,572 |
Preferred Stock, Par or Stated Value Per Share | $ 3.50 | $ 3.50 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Class A | ||
Common stock issued, shares | 11,513,935 | |
Common stock issued, amount | $ 674,469 | |
Stock issued for debt conversion, shares | 12,861,995 | 68,602,751 |
Stock issued for debt conversion, Amount | $ 1,929,300 | |
Stock issued for settlement of debt, shares | 1,617,067 | 2,000,000 |
Stock issued for settlement of debt, Amount | $ 485,120 | $ 470,400 |
Fair value of stock | 330,528 | |
(Gain) loss on extinguishment of debt | $ 154,592 | |
Stock issued for penalty, shares | 300,000 | 2,700,000 |
Stock issued for penalty, Amount | $ 44,700 | $ 680,625 |
Common Class A | Principal | ||
Stock issued for debt conversion, Amount | 457,292 | |
Common Class A | Accrued Interest | ||
Stock issued for debt conversion, Amount | $ 66,544 | |
Common Class C | ||
Stock issued for settlement of debt, shares | 1,617,067 | |
Stock issued for settlement of debt, Amount | $ 485,120 | |
Fair value of stock | 330,528 | |
(Gain) loss on extinguishment of debt | $ 154,592 | |
Shares issued for compensation, shares | 2,590,000 | |
Shares issued for compensation, value | $ 240,093 | |
Shares issued for dividend | 7,097,595 | |
Shares issued for services, shares | 2,827,606 | |
Shares issued for services, value | $ 43,474 | |
Number of shares converted | 200,000 | |
Common Class B | ||
Stock issued for debt conversion, shares | 200,000 | |
Issuance of shares of common stock for settlement of unpaid salaries, amount | $ 603,463 | |
Issuance of shares of common stock for settlement of unpaid salaries, shares | 4,023,088 | |
Shares issued for services, shares | 200,000 |
Note 7 - Stockholders' Equity_
Note 7 - Stockholders' Equity: Stock option activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Options | |||
Options outstanding, beginning balance | 1,790,000 | 1,790,000 | |
Options Granted | 0 | 0 | |
Options, Forfeited | 0 | 0 | |
Options Exercised | 0 | 0 | |
Options outstanding, ending balance | 1,790,000 | 1,790,000 | 1,790,000 |
Options Vested and expected to vest | 1,790,000 | ||
Options, Exercisable | 1,286,969 | ||
Weighted Average Price Per Share | |||
Weighted average price per share - beginning balance | $ 0.19 | $ 0.19 | |
Weighted average price per share - ending balance | 0.19 | $ 0.19 | $ 0.19 |
Weighted average price per share - Vested and Expected to Vest | 0.19 | ||
Weighted average price per share - Exercisable | $ 0.23 | ||
Weighted Average Remaining Contractual Life (Years) | |||
Weighted Average Remaining Contractual Term, Options, Outstanding | 7 years 1 month 2 days | 8 years 1 month 6 days | 9 years 1 month 6 days |
Weighted Average Remaining Contractual Term, Options, Vested and Expected to Vest | 7 years 1 month 2 days | ||
Weighted Average Remaining Contractual Term, Options, Exercisable | 6 years 11 months 15 days | ||
Aggregate Intrinsic Value | |||
Options, Outstanding at beginning, Intrinsic Value | $ 176,445 | $ 0 | |
Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | 6,176,855 | ||
Options, Exercisable, Intrinsic Value | 4,389,821 | ||
Options, Outstanding at end Intrinsic Value | $ 6,176,855 | $ 176,445 | $ 0 |
Note 7 - Stockholders' Equity_3
Note 7 - Stockholders' Equity: Schedule of Common Stock Outstanding Roll Forward (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Options outstanding | 1,790,000 | 1,790,000 | 1,790,000 |
Options outstanding, weighted average exercise price | $ 0.19 | $ 0.19 | $ 0.19 |
Options exercisable | 1,286,969 | ||
Options exercisable, weighted average exercise price | $ 0.23 | ||
Stock Option 1 | |||
Options outstanding | 979,000 | ||
Options outstanding, weighted average remaining contractual life (Years) | 7 years 4 months 17 days | ||
Options outstanding, weighted average exercise price | $ 0.05 | ||
Options exercisable | 577,500 | ||
Options exercisable, weighted average exercise price | $ 0.05 | ||
Stock Option 2 | |||
Options outstanding | 85,000 | ||
Options outstanding, weighted average remaining contractual life (Years) | 7 years 3 months 11 days | ||
Options outstanding, weighted average exercise price | $ 0.1 | ||
Options exercisable | 53,125 | ||
Options exercisable, weighted average exercise price | $ 0.1 | ||
Stock Option 3 | |||
Options outstanding | 388,500 | ||
Options outstanding, weighted average remaining contractual life (Years) | 6 years 6 months 29 days | ||
Options outstanding, weighted average exercise price | $ 0.13 | ||
Options exercisable | 339,938 | ||
Options exercisable, weighted average exercise price | $ 0.13 | ||
Stock Option 4 | |||
Options outstanding | 114,000 | ||
Options outstanding, weighted average remaining contractual life (Years) | 6 years 4 months 2 days | ||
Options outstanding, weighted average exercise price | $ 0.26 | ||
Options exercisable | 106,875 | ||
Options exercisable, weighted average exercise price | $ 0.26 | ||
Stock Option 5 | |||
Options outstanding | 223,500 | ||
Options outstanding, weighted average remaining contractual life (Years) | 6 years 3 months 8 days | ||
Options outstanding, weighted average exercise price | $ 0.9 | ||
Options exercisable | 209,531 | ||
Options exercisable, weighted average exercise price | $ 0.9 |
Note 8 - Business Combination_2
Note 8 - Business Combination (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Bargain purchase gain | $ 0 | $ 2,143,779 |
Morris | ||
Success fee | 500,000 | |
Sale-leaseback | 3,267,000 | |
Deluxe | ||
Sale-leaseback | 9,000,000 | |
Bargain purchase gain | 2,143,779 | |
Excel | ||
Sale-leaseback | $ 2,000,000 |
Note 8 - Business Combination_
Note 8 - Business Combination: Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Contract liabilities | $ 233,485 | $ 170,040 |
Bargain purchase gain | 0 | (2,143,779) |
Purchase Price Paid, Contingent consideration | (500,000) | $ 0 |
Morris | ||
Cash | 192,300 | |
Accounts receivable | 2,146,541 | |
Inventory | 453,841 | |
Contract assets | 210,506 | |
Property and equipment | 4,214,965 | |
Customer list | 490,000 | |
Goodwill | 113,592 | |
Accounts payable | (234,236) | |
Accrued expenses | (351,865) | |
Contract liabilities | (92,043) | |
Notes payable | (1,033,695) | |
Purchase price allocation | 6,109,906 | |
Purchase Price Paid, Cash | 2,159,906 | |
Purchase Price Paid, Seller Notes | 3,450,000 | |
Purchase Price Paid, Acquisition Contingency | 500,000 | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 6,109,906 | |
Deluxe | ||
Cash | 140,948 | |
Accounts receivable | 2,785,454 | |
Inventory | 736,312 | |
Prepaid expenses and other current assets | 61,320 | |
Contract assets | 350,138 | |
Property and equipment | 9,502,045 | |
Customer list | 1,050,000 | |
Accounts payable | (1,122,317) | |
Accrued expenses and other current liabilities | (163,891) | |
Contract liabilities | (155,016) | |
Notes payable | (7,544,871) | |
Bargain purchase gain | (2,143,779) | |
Purchase price allocation | 3,496,343 | |
Purchase Price Paid, Cash | 1,100,000 | |
Purchase Price Paid, Seller Notes | 2,396,343 | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 3,496,343 | |
Excel | ||
Cash | 174,283 | |
Accounts receivable | 1,943,480 | |
Inventory | 9,075 | |
Property and equipment | 2,958,190 | |
Customer list | 410,000 | |
Goodwill | 7,629 | |
Accounts payable | (340,151) | |
Accrued expenses and other current liabilities | (262,506) | |
Purchase price allocation | 4,900,000 | |
Purchase Price Paid, Cash | 2,600,000 | |
Purchase Price Paid, Seller Notes | 2,300,000 | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 4,900,000 | |
Impossible Aerospace | ||
Cash | 453,876 | |
Inventory | 199,438 | |
Property and equipment | 108,753 | |
Patent | 5,800,138 | |
Non-solicitation covenant | 105,457 | |
Accrued expenses and other current liabilities | (374,799) | |
SBA loan (PPP funds) | (444,850) | |
Purchase price allocation | 5,848,013 | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 5,848,013 | |
Impossible Aerospace | Series C Preferred Stock [Member] | ||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | $ 5,848,013 |
Note 8 - Business Combination_3
Note 8 - Business Combination: Business Acquisition, Pro Forma Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Sales | $ 34,527,429 | $ 44,746,995 |
Cost of goods sold | 29,103,480 | 37,828,725 |
Gross profit | 5,423,949 | 6,918,270 |
Operating Expenses | 13,933,972 | 17,478,575 |
Loss from Operations | (8,510,023) | (10,560,305) |
Net loss from continuing operations | $ (10,646,319) | $ (13,732,688) |
Loss per share | $ (0.08) | $ (0.18) |
Note 9 - Income Taxes (Details)
Note 9 - Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Valuation allowance | $ 6,559,060 | $ 3,828,580 |
Uncertain tax positions | 0 | $ 0 |
Operating Loss Carryforwards | $ 23,500,000 |
Note 9 - Income Taxes_ Schedule
Note 9 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Federal Statutory Income Tax Rate, Amount | $ (1,690,473) | $ (657,965) |
State and Local Income Taxes, Amount | (482,992) | (187,990) |
Permanent differences, Amount | (495,960) | (406,359) |
Valuation allowance against net deferred tax assets, Amount | 2,576,374 | 1,165,260 |
Effective rate, Amount | $ (93,051) | $ (87,054) |
Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% |
State and Local Income Taxes, Percent | 6.00% | 6.00% |
Permanent differences, Percent | 6.20% | 13.00% |
Valuation allowance against net deferred tax assets, Percent | (32.00%) | (37.20%) |
Effective rate, Percent | 1.20% | 2.80% |
Note 9 - Income Taxes_ Schedu_2
Note 9 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Text Block [Abstract] | ||
Deferred Tax Assets, Operating Loss Carryforwards | $ 6,559,060 | $ 3,828,580 |
Deferred Tax Assets, Gross | 6,559,060 | 3,828,580 |
Deferred Tax Assets, Valuation Allowance, Current | (6,559,060) | (3,828,580) |
Total deferred income tax asset | 0 | 0 |
Book to tax differences in intangible assets | 428,199 | 521,250 |
Total deferred income tax liability | $ 428,199 | $ 521,250 |
Note 10 - Industry Segments_ Sc
Note 10 - Industry Segments: Schedule of Segment Reporting Information, by Segment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | $ 33,454,349 | $ 28,151,524 |
Gross Profit | 5,363,627 | 5,642,478 |
Income (loss) from operations | (5,893,864) | (2,479,726) |
Interest Expenses | 5,463,597 | 5,237,205 |
Net income (loss) | (8,049,873) | (3,133,165) |
Total Assets | 40,734,183 | 35,801,598 |
Goodwill | 2,084,982 | 2,517,453 |
Accounts receivable, net | 6,484,869 | 8,731,565 |
QCA | ||
Revenue | 10,521,932 | 9,050,560 |
Gross Profit | 6,559,060 | 2,270,301 |
Income (loss) from operations | 547,529 | 242,729 |
Depreciation and amortization | 347,586 | 307,172 |
Interest Expenses | 559,068 | 227,726 |
Net income (loss) | 18,945 | 292,399 |
Total Assets | 9,574,237 | 6,359,711 |
Goodwill | 1,963,761 | 1,963,761 |
Accounts receivable, net | 1,938,446 | 1,234,898 |
APF | ||
Revenue | 2,080,978 | 4,471,713 |
Gross Profit | 51,956 | 603,795 |
Income (loss) from operations | 1,545,567 | 189,013 |
Depreciation and amortization | 271,919 | 368,813 |
Interest Expenses | 165,274 | 346,927 |
Net income (loss) | (1,385,184) | 473,135 |
Total Assets | 1,157,699 | 5,344,175 |
Goodwill | 0 | 440,100 |
Accounts receivable, net | 45,022 | 831,477 |
Morris | ||
Revenue | 10,478,939 | 12,881,450 |
Gross Profit | 1,962,404 | 2,535,141 |
Income (loss) from operations | 402,807 | 673,650 |
Depreciation and amortization | 448,520 | 426,528 |
Interest Expenses | 1,016,204 | 425,177 |
Net income (loss) | (81,824) | 279,592 |
Total Assets | 6,881,599 | 8,771,165 |
Goodwill | 113,592 | 113,592 |
Accounts receivable, net | 1,944,269 | 3,488,340 |
Deluxe | ||
Revenue | 7,330,236 | 1,574,474 |
Gross Profit | 224,413 | 174,046 |
Income (loss) from operations | 1,435,146 | 653,980 |
Depreciation and amortization | 723,658 | 119,671 |
Interest Expenses | 967,133 | 384,828 |
Net income (loss) | (2,304,345) | 1,104,971 |
Total Assets | 12,039,414 | 14,810,307 |
Goodwill | 0 | 0 |
Accounts receivable, net | 2,015,745 | 3,156,492 |
Excel | ||
Revenue | 3,042,264 | 0 |
Gross Profit | 401,033 | 0 |
Income (loss) from operations | 788,970 | 0 |
Depreciation and amortization | 242,697 | 0 |
Interest Expenses | 421,377 | 0 |
Net income (loss) | (1,210,347) | 0 |
Total Assets | 3,727,168 | 0 |
Goodwill | 0 | 0 |
Accounts receivable, net | 541,387 | 0 |
Unallocated and Eliminiations | ||
Revenue | 0 | 173,327 |
Gross Profit | 0 | 59,195 |
Income (loss) from operations | 3,074,517 | 2,067,654 |
Depreciation and amortization | 35,882 | 33,333 |
Interest Expenses | 2,334,541 | 3,852,547 |
Net income (loss) | (3,087,118) | 6,172,043 |
Total Assets | 1,011,203 | 516,240 |
Goodwill | 0 | 0 |
Accounts receivable, net | 0 | 20,358 |
Total Consolidated | ||
Revenue | 33,454,349 | 28,151,524 |
Gross Profit | 5,363,627 | 5,642,478 |
Income (loss) from operations | 5,893,864 | 2,479,726 |
Depreciation and amortization | 2,070,262 | 1,255,517 |
Interest Expenses | 5,463,597 | 5,237,205 |
Net income (loss) | (8,049,873) | 5,553,014 |
Total Assets | 40,734,183 | 35,801,598 |
Goodwill | 2,084,982 | 2,517,453 |
Accounts receivable, net | 6,484,869 | 8,731,565 |
Impossible Aerospace | ||
Total Assets | 6,342,863 | 0 |
Goodwill | $ 7,629 | $ 0 |
Note 11 - Derivative Liabilit_3
Note 11 - Derivative Liabilities and Fair Value Measurements: Schedule of Assumptions (Details) - Derivative Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Risk Free Interest Rate | 1.60% |
Dividend rate | 0.00% |
Minimum | |
Volatility | 287.00% |
Expected terms (years) | 6 months |
Maximum | |
Volatility | 298.00% |
Expected terms (years) | 1 year 3 months 4 days |
Note 11 - Derivative Liabilit_4
Note 11 - Derivative Liabilities and Fair Value Measurements: Fair Value, Net Derivative Asset (Liability) (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Derivative Liability | $ 0 | $ 2,298,609 | $ 1,892,321 |
Fair Value, Inputs, Level 1 | |||
Derivative Liability | 0 | 0 | |
Fair Value, Inputs, Level 2 | |||
Derivative Liability | 0 | 0 | |
Fair Value, Inputs, Level 3 | |||
Derivative Liability | $ 0 | $ 2,298,609 |
Note 11 - Derivative Liabilit_5
Note 11 - Derivative Liabilities and Fair Value Measurements: Schedule of Derivative Liabilities at Fair Value (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Derivative Liability at beginning | $ 2,298,609 | $ 1,892,321 |
Issuance of derivative liability | 1,538,865 | |
Derivative liability resolution | (864,679) | |
Change in value of derivative liability | (2,298,609) | (267,898) |
Derivative Liabilities at end | $ 0 | $ 2,298,609 |
Note 13 - Discontinued Operat_3
Note 13 - Discontinued Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Gain on disposition of discontinued operations | $ 0 | $ 2,419,849 |
VWES | ||
Gain on disposition of discontinued operations | $ 2,515,028 |
Note 13 - Discontinued Operat_4
Note 13 - Discontinued Operations: Disposal Groups, Including Discontinued Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | $ 33,454,349 | $ 28,151,524 |
Cost of revenue | 28,090,722 | 22,509,046 |
Gross Profit | 5,363,627 | 5,642,478 |
Operating expenses | 11,257,491 | 8,122,204 |
Loss from operations | (5,893,864) | (2,479,726) |
Other income (expenses) | (2,249,060) | (3,160,342) |
Net loss | (8,049,873) | (3,133,165) |
VWES | ||
Revenue | 0 | 0 |
Cost of revenue | 0 | 0 |
Gross Profit | 0 | 0 |
Operating expenses | 0 | 95,179 |
Loss from operations | 0 | (95,179) |
Other income (expenses) | 0 | 0 |
Net loss | $ 0 | $ (95,179) |
Note 14 - Subsequent Events (De
Note 14 - Subsequent Events (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2021 | Feb. 11, 2021 | Feb. 09, 2021 | Jan. 31, 2021 | Dec. 29, 2020 | Jan. 31, 2020 | Feb. 28, 2021 | Apr. 14, 2021 | Apr. 08, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Gain on debt extinguishment | $ 344,704 | $ (68,526) | |||||||||
Proceeds from sale of stock | 674,469 | $ 0 | |||||||||
Common stock issued, amount | 674,469 | ||||||||||
Investor [Member] | |||||||||||
Interest rate | 15.00% | ||||||||||
Common Class A | |||||||||||
Gain on debt extinguishment | $ (154,592) | ||||||||||
Common stock issued, shares | 11,513,935 | ||||||||||
Common stock issued, amount | $ 674,469 | ||||||||||
Stock issued for debt conversion | 12,861,995 | 68,602,751 | |||||||||
Series D Preferred Stock [Member] | Vayu [Member] | |||||||||||
Stock issued for acquisition | 1,428,572 | ||||||||||
Common Class C | |||||||||||
Gain on debt extinguishment | $ (154,592) | ||||||||||
Subsequent Event [Member] | |||||||||||
Repayment of related party debt | $ 10,900,000 | $ 11,000,000 | $ 1,883,418 | ||||||||
Convertible notes | $ 388,000 | ||||||||||
Conversion price | $ 3 | ||||||||||
Maturity term | 3 months | ||||||||||
Interest rate | 6.25% | ||||||||||
Subsequent Event [Member] | Purchase Agreement | |||||||||||
Sale of stock | 8,333,333 | ||||||||||
Proceeds from sale of stock | $ 46,000,000 | ||||||||||
Warrants exercise price | $ 6.60 | ||||||||||
Subsequent Event [Member] | Lines of Credit | |||||||||||
Repayment of related party debt | 2,400,000 | ||||||||||
Subsequent Event [Member] | Equipment Loans | |||||||||||
Repayment of related party debt | 1,400,000 | ||||||||||
Subsequent Event [Member] | Other Notes | |||||||||||
Repayment of related party debt | $ 7,100,000 | ||||||||||
Subsequent Event [Member] | Two Individuals | Restricted Stock Units (RSUs) [Member] | |||||||||||
Stock repurchased | 514,286 | ||||||||||
Subsequent Event [Member] | Common Class A | Investor [Member] | |||||||||||
Common stock issued, shares | 1,524,064 | ||||||||||
Common stock issued, amount | $ 9,300,000 | ||||||||||
Stock issued for debt conversion | 702,877 | ||||||||||
Subsequent Event [Member] | Series D Preferred Stock [Member] | |||||||||||
Stock repurchased | 200,000 | ||||||||||
Share Price | $ 3.50 | ||||||||||
Subsequent Event [Member] | Series C Preferred Stock [Member] | |||||||||||
Stock repurchased | 314,286 | ||||||||||
Share Price | $ 3.50 | ||||||||||
Subsequent Event [Member] | Series C Preferred Stock [Member] | Non-executive Employees [Member] | |||||||||||
Stock repurchased | 15,000 | ||||||||||
Share Price | $ 4.14 | ||||||||||
Subsequent Event [Member] | Common Class C | |||||||||||
Stock issued for settledment, shares | 1,617,067 | ||||||||||
Stock issued for settledment, value | $ 887,000 |