Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 18, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Tempus Applied Solutions Holdings, Inc. | |
Entity Central Index Key | 1,628,871 | |
Trading Symbol | TMPS | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 17,342,734 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 19,243 | $ 592,449 |
Restricted cash | 50,007 | |
Accounts receivable: | ||
Trade, net | 1,837,274 | 1,415,083 |
Other | 1,637 | 1,119 |
Related party | 384,498 | 435,948 |
Other assets | 98,084 | 98,871 |
Current assets of discontinued operations | 5,220 | 65 |
Total current assets | 2,345,956 | 2,593,542 |
PROPERTY AND EQUIPMENT, NET | 5,789,033 | 5,933,940 |
OTHER ASSETS | ||
Deposits | 49,428 | 51,428 |
Intangibles, net | 541,965 | 554,839 |
Noncurrent assets of discontinued operations | 501,711 | |
Total other assets | 591,393 | 1,107,978 |
Total assets | 8,726,382 | 9,635,460 |
Accounts payable: | ||
Trade | 2,462,222 | 3,363,229 |
Related party | 2,378,350 | 1,886,386 |
Accrued liabilities | 772,804 | 874,286 |
Capital Lease obligation | 5,835,181 | |
Notes Payable-Related Party | 6,200,000 | |
Customer deposits | 80,195 | 165,094 |
Current liabilities of discontinued operations | 2,796 | 569,937 |
Total current liabilities | 11,896,367 | 12,694,113 |
LONG TERM LIABILITIES | ||
Common stock warrant liability | 723,913 | 102,185 |
Total long term liabilities | 723,913 | 102,185 |
Total liabilities | 12,620,280 | 12,796,298 |
STOCKHOLDERS' DEFICIT | ||
Preferred stock, $0.0001 par value; 40,000,000 shares authorized, -0- and 4,578,070 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 458 | |
Common stock, $0.0001 par value; 100,000,000 shares authorized; 16,630,234 and 11,064,664 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 1,663 | 1,106 |
Additional paid in capital | 10,159,220 | 10,050,746 |
Accumulated deficit | (14,054,781) | (13,213,148) |
Total stockholders' deficit | (3,893,898) | (3,160,838) |
Total liabilities and stockholders' deficit | $ 8,726,382 | $ 9,635,460 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 40,000,000 | 40,000,000 |
Preferred stock, shares issued | 0 | 4,578,070 |
Preferred stock, shares outstanding | 0 | 4,578,070 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 16,630,234 | 11,064,664 |
Common stock, shares outstanding | 16,630,234 | 11,064,664 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
REVENUES | $ 4,072,366 | $ 4,921,511 | $ 8,459,205 | $ 8,593,611 |
COST OF REVENUE | 3,067,872 | 5,029,954 | 6,828,928 | 8,616,014 |
Gross profit (loss) | 1,004,494 | (108,443) | 1,630,277 | (22,403) |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 699,702 | 1,045,191 | 1,522,675 | 2,595,196 |
Total operating profit (loss) | 304,792 | (1,153,634) | 107,602 | (2,617,599) |
OTHER INCOME (EXPENSE) | ||||
Interest income | 97 | 97 | 1,793 | |
Interest expense | (166,711) | (341,833) | ||
Non-operational income (expense) | (711,460) | 1,182,225 | (607,499) | 872,556 |
Total other income (expense) | (878,074) | 1,182,225 | (949,235) | 874,349 |
NET LOSS FROM CONTINUING OPERATIONS | (573,282) | 28,591 | (841,633) | (1,743,250) |
NET LOSS FROM DISCONTINUED OPERATIONS | (740,332) | (832,346) | ||
NET LOSS | $ (573,282) | $ (711,741) | $ (841,633) | $ (2,575,596) |
BASIC AND DILUTED LOSS PER COMMON SHARE: | ||||
Continuing operations | $ (0.05) | $ 0 | $ (0.07) | $ (0.18) |
Discontinued operations | (0.07) | (0.09) | ||
NET LOSS PER SHARE: | $ (0.05) | $ (0.07) | $ (0.07) | $ (0.27) |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC AND DILUTED | 11,416,015 | 9,808,863 | 11,242,292 | 9,470,851 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Total | Common Stock $0.0001 par value | Preferred Stock $0.0001 par value | Additional paid in capital | Accumulated deficit |
Balance at Dec. 31, 2015 | $ (9,823,559) | $ 884 | $ 137 | $ 262,496 | $ (10,087,076) |
Balance, Shares at Dec. 31, 2015 | 8,836,421 | 1,369,735 | |||
Net Loss | (3,126,072) | (3,126,072) | |||
Stock Based Compensation | 151,150 | 151,150 | |||
Conversion of warrant liability to common stock | 2,797,362 | $ 198 | 2,797,164 | ||
Conversion of warrant liability to common stock, Shares | 1,986,112 | ||||
Conversion of warrant liability to preferred stock | 6,340,281 | $ 321 | 6,339,960 | ||
Conversion of warrant liability to preferred stock, Shares | 3,208,335 | ||||
Issuance of common stock for acquisition of Tempus Jets, Inc. | 500,000 | $ 24 | 499,976 | ||
Issuance of common stock for acquisition of Tempus Jets, Inc., Shares | 242,131 | ||||
Balance at Dec. 31, 2016 | (3,160,838) | $ 1,106 | $ 458 | 10,050,746 | (13,213,148) |
Balance, Shares at Dec. 31, 2016 | 11,064,664 | 4,578,070 | |||
Net Loss | (841,633) | (841,633) | |||
Stock Based Compensation | 29,573 | 29,573 | |||
Conversion of preferred shares to common stock | $ 458 | $ (458) | |||
Conversion of preferred shares to common stock, Shares | 4,578,070 | (4,578,070) | |||
Conversion of warrant liability to common stock | 79,000 | $ 99 | 78,901 | ||
Conversion of warrant liability to common stock, Shares | 987,500 | ||||
Balance at Jun. 30, 2017 | $ (3,893,898) | $ 1,663 | $ 10,159,220 | $ (14,054,781) | |
Balance, Shares at Jun. 30, 2017 | 16,630,234 |
Consolidated Statements of Sto6
Consolidated Statements of Stockholders' Deficit (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Stockholders' Equity [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES-CONTINUING OPERATIONS | ||
Net loss | $ (841,633) | $ (1,743,250) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Stock-based compensation expense | 29,573 | 117,118 |
Depreciation and amortization | 135,597 | 39,126 |
Loss on conversion of warrant liability to stock | 3,505,300 | |
Fair value adjustment of common stock warrants | 621,728 | (4,376,707) |
Changes in operating assets and liabilities: | ||
Accounts receivable-trade | (422,191) | (428,401) |
Accounts receivable-other | (518) | (317,441) |
Due to/from related parties | (21,145) | 53,022 |
Inventory | 7,293 | |
Other current assets | 787 | 323,714 |
Deposits | 2,000 | 463,572 |
Accounts payable-trade | (536,188) | 1,340,761 |
Accrued liabilities | (101,482) | (612,995) |
Deferred revenue | (31,467) | |
Customer deposits | (84,899) | (396,239) |
Net cash used for operating activities-continuing operations | (1,218,371) | (2,056,594) |
CASH FLOWS FROM INVESTING ACTIVITIES-CONTINUING OPERATIONS | ||
Purchases of property and equipment | 22,183 | (35,467) |
Purchases of intangible assets | (6,025) | (24,164) |
Decrease in restricted cash | 50,007 | 900,000 |
Net cash provided by investing activities-continuing operations | 66,165 | 840,369 |
CASH FLOWS FROM FINANCING ACTIVITIES-CONTINUING OPERATIONS | ||
Proceeds from conversion of warrants | 79,000 | |
Net cash provided by financing activities-continuing operations | 79,000 | |
CASH FLOWS FROM DISCONTINUED OPERATIONS | ||
Operating cash flows | (7,058) | 30,198 |
Investing cash flows | 506,993 | (7,365) |
Financing cash flows | ||
Net cash provided by discontinued operations | 499,935 | 22,833 |
Net decrease in cash | (573,271) | (1,193,392) |
CASH AND CASH EQUIVALENTS | ||
Cash and cash equivalents at the beginning of the period held by Tempus Applied | 592,449 | 1,288,495 |
Cash and cash equivalents at the beginning of the period held by Tempus Jets | 65 | |
Cash and cash equivalents at the beginning of the period | 592,449 | 1,288,495 |
Cash and cash equivalents at the end of the period | 19,243 | 95,103 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | 341,833 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Intangible assets acquired through acquisition of Tempus Jets, Inc. | 500,000 | |
Issuance of stock for exercise of warrants | 9,137,643 | |
Conversion of capital lease obligation to notes payable - related party | (5,835,181) | |
Conversion of account payables - trade to notes payables - related party | $ (364,819) |
Description of Organization and
Description of Organization and Business Operations | 6 Months Ended |
Jun. 30, 2017 | |
Description of Organization and Business Operations [Abstract] | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Tempus Applied Solutions Holdings, Inc. (“we”, the “Company” or “Tempus Holdings”) is a Delaware corporation organized on December 19, 2014. Tempus provides turnkey flight operations, customized design, engineering and modification solutions and training services that support critical aviation missions of the United States Department of Defense (the “DoD”), the U.S. intelligence community, foreign governments, heads of state and high net worth individuals worldwide. The Company has its headquarters in Williamsburg, Virginia. The Company’s activities are subject to significant risks and uncertainties, including without limitation the risks of deadline and budget overruns and risks specific to government and international contracting businesses. |
Going Concern
Going Concern | 6 Months Ended |
Jun. 30, 2017 | |
Going Concern [Abstract] | |
GOING CONCERN | 2. GOING CONCERN The Company’s consolidated financial statements have been prepared assuming that it will continue as a going concern. The Company has suffered recurring losses from operations since inception which raises substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty The Company’s ability to continue as a going concern is dependent on its ability to generate profitable operations in the future and/or obtain the necessary financing to meets its obligations and repay its liabilities arising from the normal business operations when they come due. The Company continues to explore possibilities for raising both working capital and longer-term capital from outside sources in various possible transactions. These plans, if successful, will mitigate the factors which raise substantial doubt about the Company’s ability to continue as a going concern. Nevertheless, whether, and when, the Company can attain positive operating cash flows for operations is highly dependent on the commencement of new contracts and the timing of their commencement. There can be no assurance that the Company’s cash flows or costs of operations will develop as currently expected. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The condensed consolidated unaudited interim financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements and notes are presented as permitted on Form 10-Q and do not contain information included in the Company’s annual statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested these condensed consolidated financial statements be read in conjunction with the December 31, 2016 audited consolidated financial statements and the accompanying notes thereto. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. These condensed consolidated unaudited financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of warrant liabilities, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities. Making estimates requires management to exercise significant judgement. It is at reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near-term due to one or more future non-conforming events. Accordingly, actual results could differ significantly from estimates. Property and Equipment Property and equipment is stated at cost, less accumulated depreciation and is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful lives, ranging from 3-5 years of respective assets. Expenditures for maintenance and repairs are charged to expense as incurred. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the statement of operations. Intangibles Intangibles are stated at cost, less accumulated amortization. Intangibles consist of computer software, Federal Aviation Administration (the “FAA”) licenses and independent research and development costs associated with the development of supplemental type certificates (“STCs”). STCs are authorizations granted by the FAA for specific modifications of a certain aircraft. An STC authorizes us to perform modifications, installations, and assemblies on applicable customer-owned aircraft. Costs incurred to obtain STC’s are capitalized and subsequently amortized against revenue being generated from aircraft modifications associated with the STC. The costs are expensed as services are rendered on each aircraft through cost of sales using the units of production method. The legal life of an STC is indefinite. We believe we have enough future sales to fully amortize our STC development costs. As of June 30, 2017 and 2016 we have recognized no amortization of these costs. On October 1, 2015, the Company purchased Proflight Aviation Services, LLC, which provides flight training services under a Federal Aviation Regulations (“FAR”) Part 141 certificate. The total purchase price of $50,000 was allocated to intangibles and is considered to be indefinite-lived. It is the Company’s policy to commence amortization of computer software upon the date that assets are placed into service. Amortization is computed on a straight-line basis over a 3-year life. Sales and Marketing The Company records costs for general advertising, promotion and marketing programs at the time those costs are incurred. Sales and Marketing expense was $124,750 and $485,617 for the six months ended June 30, 2017 and 2016, respectively. Long-Lived Assets The Company reviews its long-lived assets and certain related intangibles for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. As a result of its review, the Company does not believe that any such change has occurred. If such changes in circumstance are present, a loss is recognized to the extent the carrying value of the asset is in excess of the fair value of cash flows expected to result from the sale of the asset and amounts expected to be realized upon its eventual disposition. Fair Value of Financial Instruments The Company complies with ASC Topics 820, “Fair Value Measurement”, and 815, “Derivatives and Hedging” for its liabilities, which are re-measured and reported at fair value for each reporting period. The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, approximates the carrying amounts represented in the accompanying consolidated balance sheets. Revenue Recognition The Company uses the percentage-of-completion method for accounting for long-term aircraft maintenance and modification fixed-price contracts to recognize revenues and receivables for financial reporting purposes. Revenues from firm fixed price contracts are measured by the percentage of costs incurred to date to estimated total costs for each contract. Revenues from time-and-material line items are measured by direct labor hours or flight hours incurred during the period at the contracted hourly rates plus the cost of materials, if applicable. To the extent this earned revenue is not invoiced, it is recognized as earnings in excess of billings and is represented in other accounts receivable on the consolidated balance sheets. Revenue on leased aircraft and equipment representing rental fees and financing charges are recorded on a straight- line basis over the term of the leases. Currently, the Company’s consolidated revenues consist principally of revenues earned under aircraft management contracts (which are based on fixed expenses and fees plus variable expenses and fees tied to actual aircraft flight hours) and revenues earned from the provision of leased aircraft (which are based on actual aircraft flight hours) and modification of aircraft that will be utilized for the provision of leased aircraft services to our customers. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other relevant information. Management believes that its contract acceptance, billing and collection policies are adequate to minimize the potential credit risk associated with accounts receivable. The Company had $29,302 and $37,369 allowance for doubtful accounts as of June 30, 2017 and December 31, 2016, respectively. In June 2016, the Company entered a factoring agreement to sell without recourse, certain U.S. government contract receivables to an unrelated third-party financial institution. Under the current terms of the factoring agreement, the maximum amount of outstanding advances at any one time is $1.0 million. The discount rate included in the agreement was subject to change based on the historical performance of the receivables sold. Approximately, $2.0 million of receivables has been sold under the factoring agreement during fiscal year 2016 and the first and second quarters of 2017. The sale of these receivables accelerated the collection of the Company’s cash and reduced credit exposure during year. Sales of accounts receivable are reflected as a reduction of Accounts receivable trade, net in the Consolidated Balance Sheets, and any costs incurred by the Company associated with the factoring activity is reflected in Other Income / Expense in the Consolidated Statements of Operations, as they meet the applicable criteria of ASC 860, “Transfers and Servicing” (“ASC 860”). The amount due from the factoring company, net of advances received from the factoring company, was approximately $32,000 at June 30, 2017. The Company pays factoring fees associated with the sale of receivables based on the dollar value of the receivables sold. Such fees are immaterial and are included in the Other Income / Expense in the Consolidated Statement of Operations. In the normal course of business, the Company receives cash as security for certain contractual obligations, which are held on deposit until termination of the contract. Customer deposits are returned to the customer at contract termination or taken into income if the customer fails to perform under the contract. As of June 30, 2017 and December 31, 2016, the Company held $80,195 and $165,094, respectively, in customer deposits. Stock Based Compensation The Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors based upon fair value at the date of award using a fair value based option pricing model. The compensation expense is recognized on a straight-line basis over the requisite service period Foreign Currency Translation The measurement currency of the company is the U.S. Dollar. Transactions in foreign currencies are translated at the exchange rate in effect at the transaction date. Monetary assets and liabilities denominated in other than the measurement currency, if any, are translated at the exchange rates in effect at the balance sheet date. The resulting exchange gains and losses are recognized in earnings. Net Earnings (Loss) per Share Basic and diluted net loss per share information is presented under the requirements of ASC Topic 260, Earnings per Share. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period. Diluted net loss per share reflects the potential dilution of securities by adding other common stock equivalents, including stock options, warrants and convertible notes in the weighted-average number of common shares outstanding for a period, if dilutive. As the Company has incurred losses for the six months ended June 30, 2017 and 2016, the potentially dilutive shares are anti-dilutive and are thus not added into the loss per share calculations. For the six months ended June 30, 2017 and 2016, there were 11,242,292 and 9,470,851 weighted average shares outstanding, respectively. Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation in the accompanying consolidated financial statements. These reclassifications had no material effect on the previously reported results of operations or accumulated deficit. Correction of an Error The Company determined that it had been accounting for a lease agreement and its purchase obligation related to an aircraft in error. The Company should have accounted for its purchase obligation as a capital lease, thereby recording a capital lease aircraft asset and a corresponding capital lease liability of approximately $6,000,000 as of the end of the quarter ended June 30, 2016. The error was not material to the unaudited consolidated financial statements for the six months period ended June 30, 2016 since the correction of the error increased assets and liabilities by the same amount. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2017 | |
Recent Accounting Pronouncements [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | 4. RECENT ACCOUNTING PRONOUNCEMENTS Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under the update, revenue will be recognized based on a five-step model. The core principle of the model is that revenue will be recognized when the transfer of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In the third quarter of 2015, the FASB deferred the effective date of the standard to annual and interim periods beginning after December 15, 2017. Early adoption will be permitted for annual and interim periods beginning after December 15, 2016. The Company is currently evaluating the impact that adopting this ASU will have on its financial position, results of operations and cash flows. In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” This ASU is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures, and provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. Until the issuance of this ASU, U.S. GAAP lacked guidance about management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern or to provide related footnote disclosures. The amendments are effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016, with early adoption permitted. The Company has concluded that there is substantial doubt about its ability to continue as a going concern and has presented the required disclosures of this ASU in Note 2. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires the lessee to recognize assets and liabilities for leases with lease terms of more than twelve months. For leases with a term of twelve months or less, the Company is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Further, the lease requires a finance lease to recognize both an interest expense and an amortization of the associated expense. Operating leases generally recognize the associated expense on a straight-line basis. ASU 2016-02 requires the Company to adopt the standard using a modified retrospective approach and adoption beginning on January 1, 2019. The Company is currently evaluating the impact that ASU 2016-02 will have on its financial position, results of operations and cash flows. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718). The update amends the guidelines for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The standard is effective for annual and interim periods beginning January 1, 2017, and early adoption is permitted. The Company adopted 2016-09 effective January 1, 2017. The adoption of this standard did not have a material impact on the results of operations. With the exception of the new standards discussed above, there have been no recent accounting pronouncements or changes in accounting pronouncements during the six months ended June 30, 2017, as compared to the recent accounting pronouncements described in our Annual report on Form 10-K for the year ended December 31, 2016, that are of significance or potential significance to us. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Taxes [Abstract] | |
INCOME TAXES | 5. INCOME TAXES The Company did not record a tax provision or benefit for the period ended June 30, 2017, which is attributed primarily to the full valuation allowance that has been maintained against the Company’s net deferred tax assets as of June 30, 2017. The Company’s deferred tax assets consist principally of net operating losses, intangibles, and nondeductible reserves. The Company has not evaluated whether some or all of its net operating losses may be limited pursuant to IRC 382. In accordance with ASC 740, “Accounting for Income Taxes”, the Company continually assesses the adequacy of the valuation allowance by assessing the tax consequences of events that have been realized in the Company’s financial statements or tax returns, tax planning strategies, and future profitability. As of June 30, 2017, the Company does not believe it is more likely than not that the deferred tax assets will be realized. |
Stockholders' Deficit
Stockholders' Deficit | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders' Deficit [Abstract] | |
STOCKHOLDERS' DEFICIT | 6. STOCKHOLDERS’ DEFICIT Preferred Stock As of June 30, 2017, we had 40,000,000 shares authorized and no shares of preferred stock outstanding. There is a total of 2,200,000 Series A Warrants outstanding that are convertible into common stock or preferred stock. The rights and obligations of the holders of the preferred stock are set forth in the certificate of designations relating thereto. Holders of preferred stock have no voting rights with respect to their preferred stock, except as required by law. Shares of preferred stock rank pari passu to the shares of common stock in respect of preferences as to dividends, distributions and payments upon our liquidation, dissolution and winding up, except that in a liquidation event, the holders of preferred stock shall be entitled to receive in cash out of our assets an amount per share of preferred stock equal to the greater of $4.00 (plus any unpaid dividends and accrued charges, as equitably adjusted for stock splits, recapitalizations and similar transactions) and the amount per share such holder would receive if such holder converted such preferred stock into common stock immediately prior to the date of such payment (without regard to any limitations on conversion), provided that if the liquidation funds are insufficient to pay the full amount due to the holders, then each holder shall receive a percentage of the liquidation funds equal to the full amount of liquidation funds payable to such holder, as a percentage of the full amount of liquidation funds payable to all holders (on an as-converted basis, without regard to any limitations on conversion set forth herein) and all holders of common stock. During the six months ended June 30, 2017, 4,578,070 shares of preferred stock were converted for 4,578,070 shares of common stock. Common Stock As of June 30, 2017, we had 100,000,000 shares of common stock authorized and 16,630,234 shares of common stock issued and outstanding. Further, as of June 30, 2017, the company has 7,875,000 IPO and Placement Warrants outstanding exercisable into 7,875,000 shares of common stock that were issued in exchange for former Chart warrants, and 2,200,000 Series A Warrants and outstanding that are convertible into common stock or preferred stock. Holders of common stock have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the common stock. Holders of common stock are entitled to receive such dividends, if any, as may be declared from time to time by the board of directors in its discretion out of funds legally available therefor. Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors up for election at such time. During the six months ended June 30, 2017 the company issued 4,578,070 shares of common stock for conversion of 4,578,070 shares of preferred stock. During the six months ended June 30, 2017 the company issued 987,500 shares of common stock for conversion of 987,500 Series A warrants at a conversion price of $0.08 per share. |
Stock Options
Stock Options | 6 Months Ended |
Jun. 30, 2017 | |
Stock Options [Abstract] | |
STOCK OPTIONS | 7. STOCK OPTIONS The Company maintains a stock option plan under which the Company may grant incentive stock options and non-qualified stock options to employees and non-employee directors. Stock options have been granted with exercise prices at or above the fair market value of the underlying shares of common stock on the date of grant. Options vest and expire according to terms established at the grant date. The Company records compensation expense for the fair value of stock-based awards determined as of the grant date, including employee stock options. For the six months ended June 30, 2017 and 2016 there were -0- and 499,000 stock options granted, under the Company’s option plan, respectively. The Company recognized $29,573 and $117,118 in stock-based compensation expense for the six months ended June 30, 2017 and 2016, respectively. Stock options to purchase 126,000 and 322,000 shares of common stock were outstanding as of June 30, 2017 and December 31, 2016, respectively. The Company uses the Black-Scholes option-pricing model to value the options. The life of the option is equivalent to the expiration of the option award. The risk-free interest rate is assumed at 1.77%. The estimated volatility is based on management’s expectations of future volatility and is assumed at 60%. Estimated dividend payout is zero, as the Company has not paid dividends in the past and, at this time, does not expect to do so in the future. Shares Weighted Average Exercise Price Per Option Options outstanding, December 31, 2016 322,000 $ 2.05 Granted to employees and non-employee directors - - Exercised - - Canceled/expired/forfeited 196,000 - Options outstanding, June 30, 2017 126,000 2.05 Options exercisable, June 30, 2017 - $ - Compensation cost is recognized over the required service period which is three years for all granted options. As of June 30, 2017, $88,719 of total unrecognized compensation cost related to stock options was expected to be recognized over the remaining 6 quarters. As of June 30, 2016, $585,591 of total unrecognized compensation cost related to stock options was expected to be recognized over the remaining 10 quarters. |
Convertible Debt
Convertible Debt | 6 Months Ended |
Jun. 30, 2017 | |
Convertible Debt [Abstract] | |
CONVERTIBLE DEBT | 8. CONVERTIBLE DEBT On April 28, 2017, the Company entered into a Note Purchase Agreement with Santiago Business Co. International Ltd, (“ Santiago Note Bluebell |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Measurements [Abstract] | |
FAIR VALUE MEASUREMENTS | 9. FAIR VALUE MEASUREMENTS The Company complies with ASC Topics 820, “Fair Value Measurement”, and 815, “Derivatives and Hedging” for its liabilities, which are re-measured and reported at fair value for each reporting period. The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis as of December 31, 2016, and June 30, 2017, and indicates the fair value hierarchy of the valuation techniques the Company has used to determine such fair value. In general, fair values determined by Level 1 inputs use quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs use data points that are observable, such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs use unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability: December 31, Quoted Prices In Active Markets Significant Other Observable Inputs Significant Other Unobservable Inputs Description 2016 (Level 1) (Level 2) (Level 3) Liabilities: IPO and Placement Warrant Liability $ 78,750 $ 78,750 $ - $ - Series A Warrant Liability 23,435 - 23,435 - Total Warrant Liability $ 102,185 $ 78,750 $ 23,435 $ - June 30, Quoted Prices In Active Markets Significant Other Observable Inputs Significant Other Unobservable Inputs Description 2017 (Level 1) (Level 2) (Level 3) Liabilities: IPO and Placement Warrant Liability $ 93,913 $ 93,913 $ - $ - Series A Warrant Liability 630,000 - 630,000 - Total Warrant Liability $ 723,913 $ 93,913 $ 630,000 $ - The fair values of the Company’s warrant liabilities are determined through market, observable and corroborated sources. The approach is described below: IPO and Placement Warrants – The value of the IPO and Placement Warrants was calculated based upon the quoted price of the warrants that trade on the OTC markets under the ticker symbol TMPSW, which was $0.01 as of that date. Series A Warrants – The value of these warrants was calculated using a Black-Scholes option pricing model based on the value of the common stock, the assumed volatility of such shares and the risk free rate at the of time of valuation. Observable inputs used in the calculation of the valuations include the implied valuation of the Company’s securities based on prior sales, specifically the Financing associated with the Business Combination. Other inputs include a risk-free rate as of the valuation date and implied volatility derived from comparable publicly traded companies, as well as the quoted price of Tempus’ common shares and the quoted price of Tempus’ IPO and Placement Warrants. |
Property and Equipment, Net
Property and Equipment, Net | 6 Months Ended |
Jun. 30, 2017 | |
Property and Equipment, Net [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 10. PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following: June 30, December 31, 2017 2016 Office equipment $ 115,462 $ 167,088 Furniture and fixtures 456 456 Aircraft 6,015,505 6,015,505 Total 6,131,423 6,183,049 Accumulated depreciation (342,390 ) (249,109 ) Property and equipment, net $ 5,789,033 $ 5,933,940 |
Intangibles, Net
Intangibles, Net | 6 Months Ended |
Jun. 30, 2017 | |
Intangibles, Net [Abstract] | |
INTANGIBLES, NET | 11. INTANGIBLES, NET Intangibles, net consists of the following: June 30, December 31, 2017 2016 Infinite-lived intangible assets: FAA license $ 50,000 $ 50,000 Finite-lived intangible assets: STC costs 455,901 455,901 Accumulated amortization - - 455,901 455,901 Software 85,275 85,275 Accumulated amortization (49,211 ) (36,337 ) 36,064 48,938 Total intangible assets, net $ 541,965 $ 554,839 FAA licenses include the $50,000 purchase price for Proflight Aviation Services, LLC, which provides flight training services under a FAR Part 141 certificate. STC costs relate to our efforts to gain approval from the FAA for modifications to Gulfstream III, IV and V business jets to upgrade them for Future Air Navigation System (“FANS”) and Automatic Dependent Surveillance Broadcast (“ADS-B”) capabilities. Regulatory mandates in the U.S and abroad will require FANS / ADS-B compliance on certain preferred air routes on a rolling basis over the next four years. Tempus was awarded this STC in the fourth quarter of 2016. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 12. RELATED PARTY TRANSACTIONS Jackson River Aviation (“JRA”) is under common control with the Company.” JRA (through its subsidiary, TJI) provides FAR Part 135 aircraft charter services to the Company. Total purchases by the Company from JRA for the six months ended June 30, 2017 and 2016 were $2,117,808 and $162,576, respectively. Billings by the Company to JRA for the six months ended June 30, 2017 and 2016 were $461,250 and $53,302, respectively. As of June 30, 2017, the Company had a net outstanding payable to JRA of $333,143. As of December 31, 2016, the Company had a net outstanding receivable from JRA of $38,962. The majority of Tempus Intermediate Holdings, LLC (“TIH”) is owned by Firefly Financials, Ltd, which is under common control with the Company. The Manager of TIH is our CFO, Johan Aksel Bergendorff. TIH owns certain aircraft used by Tempus to provide services to certain customers. Total purchases by the Company from TIH for the six months ended June 30, 2017 and 2016 were $1,278,422 and 947,011, respectively. Total billings from the Company to TIH for the six months ended June 30, 2017 and 2016 were $46,146 and 118,294, respectively. The net outstanding payable from Tempus to TIH at June 30, 2017 and December 2016 was $1,518,213 and 1,284,886, respectively. Southwind Capital, LLC (“Southwind”) is controlled by R. Lee Priest, Jr., the Company’s Executive Vice President. Southwind owned certain aircraft used by Tempus to provide services to certain customers. Total purchases by the Company from Southwind for the six months ended June 30, 2017 and 2016 were $0 and $98,226, respectively. The net outstanding payable from Tempus to Southwind at June 30, 2017 and December 31, 2016 was $142,496. All related party transactions are entered into and performed under commercial terms consistent with what might be expected from a third- party service provider. See also ITEM 5. OTHER INFORMATION - 10% Senior Secured Convertible Note due April 28, 2018. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2017 | |
Discontinued Operations [Abstract] | |
DISCONTINUED OPERATIONS | 13. DISCONTINUED OPERATIONS On March 1, 2017, the Company entered into a Stock Purchase Agreement (the “Agreement”), to be effective January 1, 2017, for the sale of Tempus Jets, Inc. The following table shows the components of assets and liabilities that are classified as discontinued operations in the Company’s consolidated balance sheet as per June 30, 2017 and December 31, 2016: June 30, December 31, 2017 2016 Current assets of discontinued operations $ 5,220 $ 65 Noncurrent assets of discontinued operations $ 0 $ 501,711 Current liabilities of discontinued operations $ 2,796 $ 569,937 Net assets of discontinued operations $ 2,424 $ (68,161 ) Summarized operating results related to these entities are included in discontinued operations in the accompanying consolidated statements of operations and comprehensive loss for the three and six month ended June 30, 2017 and 2016. Six months ended Three months ended June 30 June 30, 2016 2017 2016 2017 2016 Revenue $ 588,731 $ 511,808 Gross profit (680,896 ) (593,284 ) Selling, general and administrative expenses (150,748 ) (146,346 ) Depreciation and amortization (702 ) (702 ) Net loss from discontinued operations - $ (832,346 ) - $ (740,332 ) |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Event [Abstract] | |
SUBSEQUENT EVENT | 14. SUBSEQUENT EVENT The company has evaluated subsequent events from June 30, 2017 and August 21, 2017, the date this report was available to be issued and determined to disclose the following: i. A number of the Company’s Series A Warrants were exercised resulting in the issuance of 812,500 new common shares. ii. As of August 14, 2017, the Company entered a definitive purchase agreement for the acquisition of six Lockheed L-1011, subject only to satisfactory completion of inspection of the aircraft. As payment for the aircraft, the Company expects to issue approximately 6.7 million shares to the seller during the third quarter of 2017. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated unaudited interim financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements and notes are presented as permitted on Form 10-Q and do not contain information included in the Company’s annual statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested these condensed consolidated financial statements be read in conjunction with the December 31, 2016 audited consolidated financial statements and the accompanying notes thereto. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. These condensed consolidated unaudited financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of warrant liabilities, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities. Making estimates requires management to exercise significant judgement. It is at reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near-term due to one or more future non-conforming events. Accordingly, actual results could differ significantly from estimates. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost, less accumulated depreciation and is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful lives, ranging from 3-5 years of respective assets. Expenditures for maintenance and repairs are charged to expense as incurred. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the statement of operations. |
Intangibles | Intangibles Intangibles are stated at cost, less accumulated amortization. Intangibles consist of computer software, Federal Aviation Administration (the “FAA”) licenses and independent research and development costs associated with the development of supplemental type certificates (“STCs”). STCs are authorizations granted by the FAA for specific modifications of a certain aircraft. An STC authorizes us to perform modifications, installations, and assemblies on applicable customer-owned aircraft. Costs incurred to obtain STC’s are capitalized and subsequently amortized against revenue being generated from aircraft modifications associated with the STC. The costs are expensed as services are rendered on each aircraft through cost of sales using the units of production method. The legal life of an STC is indefinite. We believe we have enough future sales to fully amortize our STC development costs. As of June 30, 2017 and 2016 we have recognized no amortization of these costs. On October 1, 2015, the Company purchased Proflight Aviation Services, LLC, which provides flight training services under a Federal Aviation Regulations (“FAR”) Part 141 certificate. The total purchase price of $50,000 was allocated to intangibles and is considered to be indefinite-lived. It is the Company’s policy to commence amortization of computer software upon the date that assets are placed into service. Amortization is computed on a straight-line basis over a 3-year life. |
Sales and Marketing | Sales and Marketing The Company records costs for general advertising, promotion and marketing programs at the time those costs are incurred. Sales and Marketing expense was $124,750 and $485,617 for the six months ended June 30, 2017 and 2016, respectively. |
Long-Lived Assets | Long-Lived Assets The Company reviews its long-lived assets and certain related intangibles for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. As a result of its review, the Company does not believe that any such change has occurred. If such changes in circumstance are present, a loss is recognized to the extent the carrying value of the asset is in excess of the fair value of cash flows expected to result from the sale of the asset and amounts expected to be realized upon its eventual disposition. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company complies with ASC Topics 820, “Fair Value Measurement”, and 815, “Derivatives and Hedging” for its liabilities, which are re-measured and reported at fair value for each reporting period. The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, approximates the carrying amounts represented in the accompanying consolidated balance sheets. |
Revenue Recognition | Revenue Recognition The Company uses the percentage-of-completion method for accounting for long-term aircraft maintenance and modification fixed-price contracts to recognize revenues and receivables for financial reporting purposes. Revenues from firm fixed price contracts are measured by the percentage of costs incurred to date to estimated total costs for each contract. Revenues from time-and-material line items are measured by direct labor hours or flight hours incurred during the period at the contracted hourly rates plus the cost of materials, if applicable. To the extent this earned revenue is not invoiced, it is recognized as earnings in excess of billings and is represented in other accounts receivable on the consolidated balance sheets. Revenue on leased aircraft and equipment representing rental fees and financing charges are recorded on a straight- line basis over the term of the leases. Currently, the Company’s consolidated revenues consist principally of revenues earned under aircraft management contracts (which are based on fixed expenses and fees plus variable expenses and fees tied to actual aircraft flight hours) and revenues earned from the provision of leased aircraft (which are based on actual aircraft flight hours) and modification of aircraft that will be utilized for the provision of leased aircraft services to our customers. |
Accounts Receivable | Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other relevant information. Management believes that its contract acceptance, billing and collection policies are adequate to minimize the potential credit risk associated with accounts receivable. The Company had $29,302 and $37,369 allowance for doubtful accounts as of June 30, 2017 and December 31, 2016, respectively. In June 2016, the Company entered a factoring agreement to sell without recourse, certain U.S. government contract receivables to an unrelated third-party financial institution. Under the current terms of the factoring agreement, the maximum amount of outstanding advances at any one time is $1.0 million. The discount rate included in the agreement was subject to change based on the historical performance of the receivables sold. Approximately, $2.0 million of receivables has been sold under the factoring agreement during fiscal year 2016 and the first and second quarters of 2017. The sale of these receivables accelerated the collection of the Company’s cash and reduced credit exposure during year. Sales of accounts receivable are reflected as a reduction of Accounts receivable trade, net in the Consolidated Balance Sheets, and any costs incurred by the Company associated with the factoring activity is reflected in Other Income / Expense in the Consolidated Statements of Operations, as they meet the applicable criteria of ASC 860, “Transfers and Servicing” (“ASC 860”). The amount due from the factoring company, net of advances received from the factoring company, was approximately $32,000 at June 30, 2017. The Company pays factoring fees associated with the sale of receivables based on the dollar value of the receivables sold. Such fees are immaterial and are included in the Other Income / Expense in the Consolidated Statement of Operations. In the normal course of business, the Company receives cash as security for certain contractual obligations, which are held on deposit until termination of the contract. Customer deposits are returned to the customer at contract termination or taken into income if the customer fails to perform under the contract. As of June 30, 2017 and December 31, 2016, the Company held $80,195 and $165,094, respectively, in customer deposits. |
Stock Based Compensation | Stock Based Compensation The Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors based upon fair value at the date of award using a fair value based option pricing model. The compensation expense is recognized on a straight-line basis over the requisite service period |
Foreign Currency Translation | Foreign Currency Translation The measurement currency of the company is the U.S. Dollar. Transactions in foreign currencies are translated at the exchange rate in effect at the transaction date. Monetary assets and liabilities denominated in other than the measurement currency, if any, are translated at the exchange rates in effect at the balance sheet date. The resulting exchange gains and losses are recognized in earnings. |
Net Earnings (Loss) per Share | Net Earnings (Loss) per Share Basic and diluted net loss per share information is presented under the requirements of ASC Topic 260, Earnings per Share. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period. Diluted net loss per share reflects the potential dilution of securities by adding other common stock equivalents, including stock options, warrants and convertible notes in the weighted-average number of common shares outstanding for a period, if dilutive. As the Company has incurred losses for the six months ended June 30, 2017 and 2016, the potentially dilutive shares are anti-dilutive and are thus not added into the loss per share calculations. For the six months ended June 30, 2017 and 2016, there were 11,242,292 and 9,470,851 weighted average shares outstanding, respectively. |
Reclassification | Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation in the accompanying consolidated financial statements. These reclassifications had no material effect on the previously reported results of operations or accumulated deficit. |
Correction of an Error | Correction of an Error The Company determined that it had been accounting for a lease agreement and its purchase obligation related to an aircraft in error. The Company should have accounted for its purchase obligation as a capital lease, thereby recording a capital lease aircraft asset and a corresponding capital lease liability of approximately $6,000,000 as of the end of the quarter ended June 30, 2016. The error was not material to the unaudited consolidated financial statements for the six months period ended June 30, 2016 since the correction of the error increased assets and liabilities by the same amount. |
Stock Options (Tables)
Stock Options (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Stock Options [Abstract] | |
Schedule of the Black-Scholes option-pricing model to value the options | Shares Weighted Average Exercise Price Per Option Options outstanding, December 31, 2016 322,000 $ 2.05 Granted to employees and non-employee directors - - Exercised - - Canceled/expired/forfeited 196,000 - Options outstanding, June 30, 2017 126,000 2.05 Options exercisable, June 30, 2017 - $ - |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Measurements [Abstract] | |
Schedule of fair value liabilities | December 31, Quoted Prices In Active Markets Significant Other Observable Inputs Significant Other Unobservable Inputs Description 2016 (Level 1) (Level 2) (Level 3) Liabilities: IPO and Placement Warrant Liability $ 78,750 $ 78,750 $ - $ - Series A Warrant Liability 23,435 - 23,435 - Total Warrant Liability $ 102,185 $ 78,750 $ 23,435 $ - June 30, Quoted Prices In Active Markets Significant Other Observable Inputs Significant Other Unobservable Inputs Description 2017 (Level 1) (Level 2) (Level 3) Liabilities: IPO and Placement Warrant Liability $ 93,913 $ 93,913 $ - $ - Series A Warrant Liability 630,000 - 630,000 - Total Warrant Liability $ 723,913 $ 93,913 $ 630,000 $ - |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Property and Equipment, Net [Abstract] | |
Schedule of property and equipment, net | June 30, December 31, 2017 2016 Office equipment $ 115,462 $ 167,088 Furniture and fixtures 456 456 Aircraft 6,015,505 6,015,505 Total 6,131,423 6,183,049 Accumulated depreciation (342,390 ) (249,109 ) Property and equipment, net $ 5,789,033 $ 5,933,940 |
Intangibles, Net (Tables)
Intangibles, Net (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Intangibles, Net [Abstract] | |
Schedule of intangibles, net | June 30, December 31, 2017 2016 Infinite-lived intangible assets: FAA license $ 50,000 $ 50,000 Finite-lived intangible assets: STC costs 455,901 455,901 Accumulated amortization - - 455,901 455,901 Software 85,275 85,275 Accumulated amortization (49,211 ) (36,337 ) 36,064 48,938 Total intangible assets, net $ 541,965 $ 554,839 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Discontinued Operations [Abstract] | |
Schedule of components of assets and liabilities and consolidated statements of operations and comprehensive loss classified as discontinued operations | June 30, December 31, 2017 2016 Current assets of discontinued operations $ 5,220 $ 65 Noncurrent assets of discontinued operations $ 0 $ 501,711 Current liabilities of discontinued operations $ 2,796 $ 569,937 Net assets of discontinued operations $ 2,424 $ (68,161 ) Six months ended Three months ended June 30 June 30, 2016 2017 2016 2017 2016 Revenue $ 588,731 $ 511,808 Gross profit (680,896 ) (593,284 ) Selling, general and administrative expenses (150,748 ) (146,346 ) Depreciation and amortization (702 ) (702 ) Net loss from discontinued operations - $ (832,346 ) - $ (740,332 ) |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Details) - USD ($) | Oct. 01, 2015 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Summary of Significant Accounting Policies (Textual) | |||||||
Allowance for doubtful accounts | $ 29,302 | $ 29,302 | $ 37,369 | ||||
Total purchase price | $ 50,000 | 500,000 | |||||
Sales and marketing expense | 124,750 | $ 485,617 | |||||
Customer deposits | $ 80,195 | $ 80,195 | 165,094 | ||||
Weighted average shares outstanding | 11,416,015 | 9,808,863 | 11,242,292 | 9,470,851 | |||
Capital lease liability | $ 6,000,000 | ||||||
Amortization computed term | Amortization is computed on a straight-line basis over a 3-year life. | ||||||
Minimum [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Property pland and equipment estimated useful lives | 3 years | ||||||
Maximum [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Property pland and equipment estimated useful lives | 5 years | ||||||
Factoring Agreement [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Outstanding advances | $ 1,000,000 | ||||||
Net advances received | $ 32,000 | $ 32,000 | |||||
Receivables sold | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Stockholders' Deficit (Textual) | ||
Preferred stock, shares authorized | 40,000,000 | 40,000,000 |
Preferred stock, shares issued | 0 | 4,578,070 |
Preferred stock, shares outstanding | 0 | 4,578,070 |
conversion of shares issued | 4,578,070 | |
Conversion price per share | $ 0.08 | |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 16,630,234 | 11,064,664 |
Common stock, shares outstanding | 16,630,234 | 11,064,664 |
Series A Warrants [Member] | ||
Stockholders' Deficit (Textual) | ||
Preferred stock, shares outstanding | 2,200,000 | |
conversion of shares issued | 987,500 | |
Warrants conversion price | $ 0.08 | |
IPO and Placement Warrants [Member] | ||
Stockholders' Deficit (Textual) | ||
Warrants outstanding | $ 7,875,000 | |
Preferred Stock [Member] | ||
Stockholders' Deficit (Textual) | ||
Preferred stock, shares issued | 0 | |
Preferred stock, shares outstanding | 0 | |
conversion of shares issued | 4,578,070 | |
Conversion price per share | $ 4 | |
Common Stock [Member] | ||
Stockholders' Deficit (Textual) | ||
conversion of shares issued | 4,578,070 | |
Outstanding warrants exercisable shares | 7,875,000 | |
Common stock, shares issued | 16,630,234 | |
Common stock, shares outstanding | 16,630,234 | |
Common Stock [Member] | Series A Warrants [Member] | ||
Stockholders' Deficit (Textual) | ||
Outstanding warrants exercisable shares | 2,200,000 |
Stock Options (Details)
Stock Options (Details) - Employee and Non Employee Stock Option [Member] | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Schedule of stock option activity | |
Options outstanding shares, Beginning balance | shares | 322,000 |
Granted to employees and non-employee directors, shares | shares | |
Exercised, shares | shares | |
Canceled/expired/forfeited, shares | shares | 196,000 |
Options outstanding shares, Ending balance | shares | 126,000 |
Options exercisable, shares | shares | |
Options outstanding, Beginning balance, Weighted Average Exercise Price Per Option | $ / shares | $ 2.05 |
Granted to employees and non-employee directors, Weighted Average Exercise Price Per Option | $ / shares | |
Exercised, Weighted Average Exercise Price Per Option | $ / shares | |
Canceled/expired/forfeited, Weighted Average Exercise Price Per Option | $ / shares | |
Options outstanding, Ending balance, Weighted Average Exercise Price Per Option | $ / shares | 2.05 |
Options exercisable, Weighted Average Exercise Price Per Option | $ / shares |
Stock Options (Details Textual)
Stock Options (Details Textual) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Stock Options (Textual) | |||
Stock-based compensation expense | $ 29,573 | $ 117,118 | |
Risk-free interest rate | 1.77% | ||
Volatility | 60.00% | ||
Dividend payout | $ 0 | ||
Unrecognized compensation cost | $ 88,719 | $ 585,591 | |
Stock Option [Member] | |||
Stock Options (Textual) | |||
Granted to employees and non-employee directors, shares | 0 | 499,000 | |
Purchase of common stock | 126,000 | 322,000 |
Convertible Debt (Details)
Convertible Debt (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Apr. 28, 2017 | |
Convertible Debt (Textual) | ||
Convertible into common stock of shares | 77,500,000 | |
Share capital, percentage | 82.30% | |
Conversion price per share | $ 0.08 | |
Senior Secured Convertible Note [Member] | ||
Convertible Debt (Textual) | ||
Debt note purchase agreement interest | 10.00% | |
Aggregate principal amount | $ 6,200,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Schedule of fair value assets and liabilities | ||
Total Warrant Liability | $ 723,913 | $ 102,185 |
Series A Warrant Liability [Member] | ||
Schedule of fair value assets and liabilities | ||
Total Warrant Liability | 630,000 | 23,435 |
IPO and Placement Warrant Liability [Member] | ||
Schedule of fair value assets and liabilities | ||
Total Warrant Liability | 93,913 | 78,750 |
Quoted Prices In Active Markets (Level 1) [Member] | ||
Schedule of fair value assets and liabilities | ||
Total Warrant Liability | 93,913 | 78,750 |
Quoted Prices In Active Markets (Level 1) [Member] | Series A Warrant Liability [Member] | ||
Schedule of fair value assets and liabilities | ||
Total Warrant Liability | ||
Quoted Prices In Active Markets (Level 1) [Member] | IPO and Placement Warrant Liability [Member] | ||
Schedule of fair value assets and liabilities | ||
Total Warrant Liability | 93,913 | 78,750 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Schedule of fair value assets and liabilities | ||
Total Warrant Liability | 630,000 | 23,435 |
Significant Other Observable Inputs (Level 2) [Member] | Series A Warrant Liability [Member] | ||
Schedule of fair value assets and liabilities | ||
Total Warrant Liability | 630,000 | 23,435 |
Significant Other Observable Inputs (Level 2) [Member] | IPO and Placement Warrant Liability [Member] | ||
Schedule of fair value assets and liabilities | ||
Total Warrant Liability | ||
Significant Other Unobservable Inputs (Level 3) [Member] | ||
Schedule of fair value assets and liabilities | ||
Total Warrant Liability | ||
Significant Other Unobservable Inputs (Level 3) [Member] | Series A Warrant Liability [Member] | ||
Schedule of fair value assets and liabilities | ||
Total Warrant Liability | ||
Significant Other Unobservable Inputs (Level 3) [Member] | IPO and Placement Warrant Liability [Member] | ||
Schedule of fair value assets and liabilities | ||
Total Warrant Liability |
Fair Value Measurements (Deta34
Fair Value Measurements (Details Textual) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
IPO and Placement Warrants [Member] | ||
Fair Value Measurements (Textual) | ||
Warrants price | $ 0.01 | $ 0.01 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Schedule of property and equipment, Net [Abstract] | ||
Total | $ 6,131,423 | $ 6,183,049 |
Accumulated depreciation | (342,390) | (249,109) |
Property and equipment, net | 5,789,033 | 5,933,940 |
Office equipment [Member] | ||
Schedule of property and equipment, Net [Abstract] | ||
Total | 115,462 | 167,088 |
Furniture and fixtures [Member] | ||
Schedule of property and equipment, Net [Abstract] | ||
Total | 456 | 456 |
Aircraft [Member] | ||
Schedule of property and equipment, Net [Abstract] | ||
Total | $ 6,015,505 | $ 6,015,505 |
Intangibles, Net (Details)
Intangibles, Net (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Schedule of intangibles, net [Abstract] | ||
Total intangible assets, net | $ 541,965 | $ 554,839 |
STC costs [Member] | ||
Schedule of intangibles, net [Abstract] | ||
Total intangible assets | 455,901 | 455,901 |
Accumulated amortization | ||
Total intangible assets, net | 455,901 | 455,901 |
Software [Member] | ||
Schedule of intangibles, net [Abstract] | ||
Total intangible assets | 85,275 | 85,275 |
Accumulated amortization | (49,211) | (36,337) |
Total intangible assets, net | 36,064 | 48,938 |
FAA license [Member] | ||
Schedule of intangibles, net [Abstract] | ||
Indefinite-lived intangible assets | $ 50,000 | $ 50,000 |
Intangibles, Net (Details Textu
Intangibles, Net (Details Textual) - USD ($) | Oct. 01, 2015 | Jun. 30, 2017 |
Intangibles, Net (Textual) | ||
Purchase price | $ 50,000 | $ 500,000 |
FAA license [Member] | ||
Intangibles, Net (Textual) | ||
Purchase price | $ 50,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Related Party Transactions (Textual) | |||
Senior secured convertible note, percentage | 10.00% | ||
Senior secured convertible note due date | Apr. 28, 2018 | ||
Jackson River Aviation [Member] | |||
Related Party Transactions (Textual) | |||
Total purchases | $ 2,117,808 | $ 162,576 | |
Total billings | 461,250 | 53,302 | |
Net outstanding payable | 333,143 | ||
Net outstanding receivable | $ 38,962 | ||
Tempus Intermediate Holdings, LLC [Member] | |||
Related Party Transactions (Textual) | |||
Total purchases | 1,278,422 | 947,011 | |
Total billings | 46,146 | 118,294 | |
Net outstanding payable | 1,518,213 | 1,284,886 | |
Southwind Capital, LLC [Member] | |||
Related Party Transactions (Textual) | |||
Total purchases | 0 | $ 98,226 | |
Net outstanding payable | $ 142,496 | $ 142,496 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Discontinued Operations [Abstract] | ||
Current assets of discontinued operations | $ 5,220 | $ 65 |
Noncurrent assets of discontinued operations | 501,711 | |
Current liabilities of discontinued operations | 2,796 | 569,937 |
Net assets of discontinued operations | $ 2,424 | $ (68,161) |
Discontinued Operations (Deta40
Discontinued Operations (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Discontinued Operations [Abstract] | ||||
Revenue | $ 511,808 | $ 588,731 | ||
Gross profit | (593,284) | (680,896) | ||
Selling, general and administrative expenses | (146,346) | (150,748) | ||
Depreciation and amortization | (702) | (702) | ||
Net loss from discontinued operations | $ (740,332) | $ (832,346) |
Subsequent Event (Details)
Subsequent Event (Details) | 1 Months Ended |
Aug. 21, 2017 | |
Subsequent Event [Member] | |
Subsequent Event (Textual) | |
Subsequent event, description | i. A number of the Company’s Series A Warrants were exercised resulting in the issuance of 812,500 new common shares. ii. As of August 14, 2017, the Company entered a definitive purchase agreement for the acquisition of six Lockheed L-1011, subject only to satisfactory completion of inspection of the aircraft. As payment for the aircraft, the Company expects to issue approximately 6.7 million shares to the seller during the third quarter of 2017. |