Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Apr. 15, 2015 | Jun. 30, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | Logicquest Technology, Inc. | ||
Entity Central Index Key | 768216 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | Yes | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $90,317 | ||
Entity Common Stock, Shares Outstanding | 2,301,849 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
Current assets: | ||||
Cash and cash equivalents | $4,723 | |||
Accounts receivable, net | 357 | |||
Prepaid expenses and other current assets | 9,777 | |||
Total current assets | 14,857 | |||
Current liabilities: | ||||
Accounts payable | 727,500 | 11,097 | ||
Accounts payable to related party | 717,266 | |||
Accrued liabilities | 1,141,135 | 6,228 | ||
Accrued liabilities to related parties | 18,000 | 749,600 | ||
Note payable | 1,337,600 | |||
Note payable to related party | 1,310,600 | |||
Deferred revenue | 2,237 | |||
Total current liabilities | 3,224,235 | 2,797,028 | ||
Stockholders' deficit: | ||||
Preferred stock | ||||
Common stock, $0.001 par value, 200,000,000 shares authorized, 2,301,849 shares issued and outstanding at December 31, 2014 and 2013 | 2,302 | [1] | 2,302 | [1] |
Additional paid-in capital | 22,487,937 | 22,444,018 | ||
Accumulated deficit | -25,714,474 | -25,228,491 | ||
Total stockholders' deficit | -3,224,235 | -2,782,171 | ||
Total liabilities and stockholders' deficit | 14,857 | |||
Series D Convertible Non-Redeemable preferred stock [Member] | ||||
Stockholders' deficit: | ||||
Preferred stock | ||||
Series C Convertible Non-Redeemable preferred stock [Member] | ||||
Stockholders' deficit: | ||||
Preferred stock | ||||
Undesignated preferred stock [Member] | ||||
Stockholders' deficit: | ||||
Preferred stock | ||||
[1] | On March 19, 2015, the Company executed a 1-for-20 reverse stock split of the Company's common stock. All per share data included in these financial statements has been restated to give effect to the reverse stock split. |
BALANCE_SHEETS_Parenthetical
BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Common stock, par value per share | $0.00 | $0.00 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 2,301,849 | 2,301,849 |
Common stock, shares outstanding | 2,301,849 | 2,301,849 |
Undesignated preferred stock [Member] | ||
Preferred stock, par value per share | $0.00 | $0.00 |
Preferred stock, shares authorized | 9,999,942 | 9,999,942 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series D Convertible Non-Redeemable preferred stock [Member] | ||
Preferred stock, par value per share | $0.00 | $0.00 |
Preferred stock, shares authorized | 10 | 10 |
Preferred stock, shares issued | 10 | 10 |
Preferred stock, shares outstanding | 10 | 10 |
Preferred stock, per share liquidation preference | $8,725 | $8,725 |
Preferred stock, aggregate liquidation value | $87,250 | |
Series C Convertible Non-Redeemable preferred stock [Member] | ||
Preferred stock, par value per share | $0.00 | $0.00 |
Preferred stock, shares authorized | 48 | 48 |
Preferred stock, shares issued | 48 | 48 |
Preferred stock, shares outstanding | 48 | 48 |
Preferred stock, per share liquidation preference | $12,500 | $12,500 |
Preferred stock, aggregate liquidation value | $600,000 |
STATEMENTS_OF_OPERATIONS
STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | |||
Income Statement [Abstract] | ||||
Service revenue | $36,591 | $100,463 | ||
Cost of services | 43,926 | 102,168 | ||
Gross loss | -7,335 | -1,705 | ||
Selling, general and administrative expenses | 170,173 | 242,969 | ||
Loss from operations | -177,508 | -244,674 | ||
Other income | 11,097 | |||
Interest expense | -319,572 | -311,550 | ||
Net loss | ($485,983) | ($556,224) | ||
Net loss per share - basic and diluted | ($0.21) | [1] | ($0.24) | [1] |
Basic and diluted weighted average shares outstanding | 2,301,849 | 2,301,849 | ||
[1] | On March 19, 2015, the Company executed a 1-for-20 reverse stock split of the Company's common stock. All per share data included in these financial statements has been restated to give effect to the reverse stock split. |
STATEMENTS_OF_STOCKHOLDERS_DEF
STATEMENTS OF STOCKHOLDERS' DEFICIT (USD $) | Common Stock [Member] | Series C Preferred Stock [Member] | Series D Preferred Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2012 | $2,302 | $22,444,018 | ($24,672,267) | ($2,225,947) | ||
Balance, shares at Dec. 31, 2012 | 2,301,849 | 48 | 10 | |||
Net loss | -556,224 | -556,224 | ||||
Balance at Dec. 31, 2013 | 2,302 | 22,444,018 | -25,228,491 | -2,782,171 | ||
Balance, shares at Dec. 31, 2013 | 2,301,849 | 48 | 10 | |||
Forgiveness of payables to director | 43,919 | 43,919 | ||||
Net loss | -485,983 | -485,983 | ||||
Balance at Dec. 31, 2014 | $2,302 | $22,487,937 | ($25,714,474) | ($3,224,235) | ||
Balance, shares at Dec. 31, 2014 | 2,301,849 | 48 | 10 |
STATEMENTS_OF_CASH_FLOWS
STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | ||
Net loss | ($485,983) | ($556,224) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 357 | 2,876 |
Prepaid expenses and other current assets | 9,777 | 658 |
Accounts payable and accrued liabilities | 96,620 | -15,947 |
Accounts payable to related party | 119,234 | 198,025 |
Accrued liabilities to related parties | 212,509 | 311,549 |
Deferred revenue | -2,237 | -5,576 |
Net cash used in operating activities | -49,723 | -64,639 |
Cash flows from financing activities: | ||
Proceeds from related party note payable | 45,000 | 65,600 |
Net cash provided by financing activities | 45,000 | 65,600 |
Net increase (decrease) in cash and cash equivalents | -4,723 | 961 |
Cash and cash equivalents at beginning of year | 4,723 | 3,762 |
Cash and cash equivalents at end of year | 4,723 | |
Supplemental Disclosure of Cash Flows Information: | ||
Cash paid for interest | ||
Cash paid for income taxes | ||
Non-Cash Financing and Investing Activities: | ||
Assignment of related party payables | 836,500 | |
Assignment of related party accrued liabilities | 918,190 | |
Assignment of related party note payable | 1,337,600 | |
Forgiveness of related party payables | $43,919 |
ORGANIZATION_AND_SUMMARY_OF_SI
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Logicquest Technology, Inc. (Formerly Bluegate Corporation) (the “Company") is a Nevada Corporation that consisted of the networking service (carrier/circuit) business. It provided internet connectivity to corporate clients on a subscription basis; essentially operating as a value added provider until it ceased operations effective June 30, 2014. | |
The Company was originally incorporated as Solis Communications, Inc. on July 23, 2001 and adopted a name change to Crescent Communications Inc. upon completion of a reverse acquisition of Berens Industries, Inc. In 2004, we changed our name to Bluegate Corporation (“Bluegate”). On March 19, 2015, we changed our name to Logicquest Technology, Inc. (“Logicquest”). | |
Following is a summary of the Company's significant accounting policies: | |
SIGNIFICANT ESTIMATES | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the periods. Actual results could differ from estimates making it reasonably possible that a change in the estimates could occur in the near term. | |
CASH AND CASH EQUIVALENTS | |
The Company considers all highly liquid short-term investments with an original maturity of three months or less when purchased, to be cash equivalents. | |
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | |
Accounts receivable are amounts due on sales, are unsecured and are carried at their estimated collectible amounts. Credit is generally extended on a short-term basis; thus accounts receivable do not bear interest although a finance charge may be applied to such receivables that are more than thirty days past due. Accounts receivable are periodically evaluated for collectability based on past credit history with clients. Provisions for losses on accounts receivable are determined on the basis of loss experience, known and inherent risk in the account balance and current economic conditions. | |
RELATED PARTY TRANSACTIONS | |
A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
For certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, note payable, accounts payable, and accrued liabilities, the carrying amounts approximate fair values due to their short maturities. | |
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. | |
It is not, however, practical to determine the fair value of accounts payable, accrued liabilities, and note payable to related parties and lease and management arrangement with related parties, if any, due to their related party nature. | |
INCOME TAXES | |
The Company uses the liability method of accounting for income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their financial amounts at year-end. The Company provides a valuation allowance to reduce deferred tax assets to their net realizable value. | |
STOCK-BASED COMPENSATION | |
Accounting Standard 718, “Accounting for Stock-Based Compensation" (“ASC 718”) established financial accounting and reporting standards for stock-based employee compensation plans. It defines a fair value based method of accounting for an employee stock option or similar equity instrument. Logicquest accounts for compensation cost for stock option plans in accordance with ASC 718. | |
The Company accounts for share based compensation to non-employees in accordance with Accounting Standard 505-50 “Accounting for Equity Instruments Issued to Non-Employees for Acquiring, or in Conjunction with Selling, Goods or Services.” | |
REVENUE RECOGNITION | |
Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. | |
Revenue is recognized based upon contractually determined monthly service charges to individual customers. Some services are billed in advance and, accordingly, revenues are deferred until the period in which the services are provided. | |
LOSS PER SHARE | |
Basic and diluted net loss per share is computed on the basis of the weighted average number of shares of common stock outstanding during each period. Potentially dilutive options that were outstanding during 2014 and 2013 were not considered in the calculation of diluted earnings per share because the Company's net loss rendered their impact anti-dilutive. Accordingly, basic and diluted losses per share were identical for the years ended December 31, 2014 and 2013. | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |
The Company does not expect any recent accounting pronouncements to have a material impact to its financial position or result of operations. |
GOING_CONCERN_CONSIDERATIONS
GOING CONCERN CONSIDERATIONS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Going Concern Considerations | |||||||||
GOING CONCERN CONSIDERATIONS | 2. GOING CONCERN CONSIDERATIONS | ||||||||
During the years ended December 31, 2014 and 2013, we have been unable to generate cash flows sufficient to support our operations and have been dependent on debt and equity raised from qualified individuals and loans from a related party. We experienced negative financial results as follows: | |||||||||
2014 | 2013 | ||||||||
Net loss | $ | (485,983 | ) | $ | (556,224 | ) | |||
Negative cash flow from operations | (49,723 | ) | (64,639 | ) | |||||
Negative working capital | (3,224,235 | ) | (2,782,171 | ) | |||||
Stockholders’ deficit | (3,224,235 | ) | (2,782,171 | ) | |||||
These factors raise substantial doubt about our ability to continue as a going concern. The financial statements contained herein do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be unable to continue in existence. Our ability to continue as a going concern is dependent upon our ability to generate sufficient cash flows to meet our obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations. However, there is no assurance that profitable operations or sufficient cash flows will occur in the future. | |||||||||
Our current operations are primarily funded by Ang Woon Han, the Company’s Director, Chief Executive Officer and President. | |||||||||
These steps have provided us with the cash flows to continue our business, but have not resulted in significant improvement in our financial position. We are considering alternatives to address our cash flow situation that include: | |||||||||
· | |||||||||
Raising capital through additional sale of our common stock and/or debt securities. | |||||||||
· | |||||||||
Reducing cash operating expenses to levels that are in line with current revenues. | |||||||||
These alternatives could result in substantial dilution of existing stockholders. There can be no assurance that our current financial position can be improved, that we can raise additional working capital or that we can achieve positive cash flows from operations. Our long-term viability as a going concern is dependent upon the following: | |||||||||
· | |||||||||
Our ability to locate sources of debt or equity funding to meet current commitments and near-term future requirements. | |||||||||
· | |||||||||
Our ability to achieve profitability and ultimately generate sufficient cash flow from operations to sustain our continuing operations. |
ACCOUNTS_RECEIVABLE_NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Receivables [Abstract] | |||||||||
ACCOUNTS RECEIVABLE, NET | 3. ACCOUNTS RECEIVABLE, NET | ||||||||
Accounts receivable, net consists of the following at December 31, 2014 and 2013: | |||||||||
2014 | 2013 | ||||||||
Accounts receivable | $ | — | $ | 2,668 | |||||
Less allowance for bad debts | — | (2,311 | ) | ||||||
$ | — | $ | 357 |
ACCOUNTS_PAYABLE_TO_RELATED_PA
ACCOUNTS PAYABLE TO RELATED PARTY | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounts Payable To Related Party | |||||||||
ACCOUNTS PAYABLE TO RELATED PARTY | 4. ACCOUNTS PAYABLE TO RELATED PARTY | ||||||||
The accounts payable to related party balance was owed to Sperco, LLC (“SLLC”) (an entity controlled by Stephen J. Sperco, the Company’s former CEO/President/Director) and is summarized below: | |||||||||
12/31/14 | 12/31/13 | ||||||||
During November 2009, Bluegate entered into an Asset Sale and Purchase Agreement to sell certain assets to SLLC, and as a result, these balances represent funds collected by Bluegate on behalf of SLLC. These balances were reduced each year by $52,000 as a result of SLLC agreeing to pay Bluegate for office space and associated services for the Sperco entities for the period from July 1, 2010 through July 31, 2011. | $ | — | $ | 46,766 | |||||
As a result of the November 2009 transaction, commencing January 1, 2010, Bluegate had no employees and agreed to pay SLLC a monthly amount of $15,000 for management, accounting and administrative services, as well as, infrastructure and network engineering support. In August 2012 the monthly amount was $18,500 and beginning September 2012 the monthly amount was revised to $15,500 to reflect support for a new project engagement. | — | 641,500 | |||||||
Commencing August 1, 2011, SLLC and Bluegate moved from Suite 600 to Suite 350 and Bluegate agreed to pay SLLC $1,000 rent on a month-to-month basis. | — | 29,000 | |||||||
$ | — | $ | 717,266 | ||||||
On September 11, 2014, the payables were assigned to Tang Chuan Choon, a third party. Thus, the balances were reduced to $0 as of December 31, 2014. Also see Note 7. |
NOTE_PAYABLE_TO_RELATED_PARTY
NOTE PAYABLE TO RELATED PARTY | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Note Payable To Related Party | |||||||||
NOTE PAYABLE TO RELATED PARTY | 5. NOTE PAYABLE TO RELATED PARTY | ||||||||
Note payable at December 31, 2014 is summarized below: | |||||||||
12/31/14 | 12/31/13 | ||||||||
Secured note payable to related party: During 2007, the Company entered into a line of credit agreement with SAI Corporation ("SAIC"), a corporation controlled by Stephen J. Sperco, to borrow up to $500,000. The line of credit has been amended several times due to Bluegate's need to borrow funds for working capital purposes and has been increased to $1,338,000. As a condition to and as additional consideration for SAIC's agreement to lend additional funds to the Company, the Company granted SAIC a security interest in its assets. Principal and interest is due on demand. Interest is at the rate of 15% per annum and payments are due and payable monthly at the end of each month until the outstanding principal balance is paid in full. The Company agreed to pay a late charge in the amount of $10,000 on any interest payment more than fifteen days delinquent. During 2014 and 2013, the Company incurred interest expense on the related party note payable of $319,572 and $311,550, respectively. | $ | — | $ | 1,310,600 | |||||
On September 11, 2014, the related party note payable in the amount of $1,337,600 was assigned to Tang Chuan Choon. Thus, the balance of note payable to related party was reduced to $0 as of December 31, 2014. Also see Note 7. |
ACCRUED_LIABILITIES_TO_RELATED
ACCRUED LIABILITIES TO RELATED PARTIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accrued Liabilities To Related Parties | |||||||||
ACCRUED LIABILITIES TO RELATED PARTIES | 6. ACCRUED LIABILITIES TO RELATED PARTIES | ||||||||
The accrued liabilities to related parties are summarized below: | |||||||||
12/31/14 | 12/31/13 | ||||||||
Accrued interest on the note payable to SAIC | $ | — | $ | 705,681 | |||||
Fees accrued through March 31, 2009 to former Board of Director, Dale Geary | — | 20,419 | |||||||
Fees accrued through March 31, 2009 to former Board of Director, Stephen J. Sperco | — | 17,500 | |||||||
Vehicle allowance accrued through December 31, 2008 to Stephen J. Sperco | — | 6,000 | |||||||
Fees paid by Ang Woon Han on behalf of the Company | 18,000 | — | |||||||
$ | 18,000 | $ | 749,600 | ||||||
On September 11, 2014, the accrued expenses to SAIC and former board of directors were assigned to Tang Chuan Choon. Therefore, these balances were reduced to $0. Also see Note 7. |
ASSIGNMENT_OF_RELATED_PARTY_LI
ASSIGNMENT OF RELATED PARTY LIABILITIES | 12 Months Ended |
Dec. 31, 2014 | |
Assignment Of Related Party Liabilities | |
ASSIGNMENT OF RELATED PARTY LIABILITIES | 7. ASSIGNMENT OF RELATED PARTY LIABILITIES |
On September 11, 2014, all of the balances that the Company owed to related parties, including accounts payable of $836,500 and accrued liabilities of $918,190, were assigned to Tang Chuan Choon. These assumed liabilities are unsecured and bear the same terms as the original related party liabilities. | |
The balance of note payable to related party was $1,337,600 as of September 11, 2014 and was recorded as note payable following the assignment. Under the same terms as the original related party note payable, the note payable is unsecured and due on demand. Interest is at the rate of 15% per annum and payments are due and payable monthly at the end of each month until the outstanding principal balance is paid in full. The interest expense incurred on this note payable is $319,572 and $0 for the years ended December 31, 2014 and 2013, respectively. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
INCOME TAXES | 8. INCOME TAXES | ||||||||
The composition of deferred tax assets at December 31, 2014 and 2013 were as follows: | |||||||||
2014 | 2013 | ||||||||
Deferred tax assets | |||||||||
Benefit from carryforward of net operating loss | $ | 2,585,000 | $ | 2,420,000 | |||||
Less valuation allowance | (2,585,000 | ) | (2,420,000 | ) | |||||
Net deferred tax asset | $ | — | $ | — | |||||
The difference between the income tax benefit in the accompanying statement of operations and the amount that would result if the U.S. Federal statutory rate of 34% were applied to pre-tax loss for 2014 and 2013 is attributable to the valuation allowance. | |||||||||
At December 31, 2014, for federal income tax and alternative minimum tax reporting purposes, the Company has $7,603,000 in unused net operating losses available for carryforward to future years which will expire in various years through 2034. |
STOCKHOLDERS_DEFICIT
STOCKHOLDERS' DEFICIT | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||
STOCKHOLDERS' DEFICIT | 9. STOCKHOLDERS’ DEFICIT | ||||||||||||
STOCK OPTION PLANS | |||||||||||||
In 2005 the Company adopted the 2005 Stock and Stock Option Plan (the “2005 Plan”). The purpose of the 2005 Plan is to further our interests, our subsidiaries and our stockholders by providing incentives in the form of stock options to key employees, consultants, directors and others who contribute materially to our success and profitability. The grants recognize and reward outstanding individual performances and contributions and will give such persons a proprietary interest in us, thus enhancing their personal interest in our continued success and progress. The 2005 Plan also assists us and our subsidiaries in attracting and retaining key employees and directors and is administered by the board of directors. The board of directors has the exclusive power to select the participants, to establish the terms of the stock and options granted to each participant, provided that all options granted shall be granted at an exercise price equal to at least 85% of the fair market value of the common stock covered by the option on the grant date and to make all determinations necessary or advisable under the 2005 Plan. The maximum aggregate number of shares of common stock that may be granted or optioned and sold under the 2005 Plan is 150,000 shares. As of December 31, 2014, 56,635 shares of common stock have been granted. | |||||||||||||
When applicable, the Company uses the Black-Scholes option pricing model to value stock options and warrants and the simplified method of calculating expected term as described in ASC 718. | |||||||||||||
SUMMARY OF STOCK OPTIONS | |||||||||||||
Non-statutory Stock Options | Shares | Exercise | |||||||||||
Price | |||||||||||||
Outstanding at January 1, 2013 | 23,332 | $ | 0.25 | ||||||||||
Forfeited | (23,332 | ) | 0.25 | ||||||||||
Outstanding at January 1, 2014 | — | ||||||||||||
Forfeited | — | ||||||||||||
Outstanding and exercisable at December 31, 2014 | — | ||||||||||||
There was no aggregate intrinsic value of the options at December 31, 2014. | |||||||||||||
SUMMARY OF STOCK WARRANTS | |||||||||||||
NUMBER OF | EXERCISE | WEIGHTED | |||||||||||
SHARES | PRICES ($) | AVERAGE | |||||||||||
UNDER | EXERCISE | ||||||||||||
WARRANTS | PRICE ($) | ||||||||||||
Outstanding at January 1, 2013 | 130,000 | 0.17 | 0.17 | ||||||||||
Forfeited or Canceled | (130,000 | ) | 0.17 | 0.17 | |||||||||
Outstanding at January 1, 2014 | — | ||||||||||||
Forfeited or Canceled | — | ||||||||||||
Outstanding and exercisable at December 31, 2014 | — | ||||||||||||
There was no aggregate intrinsic value of the warrants at December 31, 2014. | |||||||||||||
EQUITY TRANSACTIONS | |||||||||||||
As of December 31, 2014, the Company has outstanding: (i) 2,301,849 shares of common stock and, (ii) preferred stock convertible into 72,500 shares of common stock, resulting in on a fully diluted basis, 2,374,349 shares of common stock. The Company has 50,000,000 shares of common stock authorized by our Articles of Incorporation. The number of authorized shares has been increased to 200,000,000, effective March 19, 2015. | |||||||||||||
On September 11, 2014, SAI Corporation, the Company's majority shareholder, sold to Ang Woon Han 1,203,513 shares of common stock, which represents 52.3% of all issued and outstanding common stock as of that date. Additionally, SAI Corporation sold to Ang Woon Han 48 shares of Series C Convertible preferred stock and 10 shares of Series D Convertible preferred stock. | |||||||||||||
As a result of this transaction, the Company's business of networking services and internet connectivity ceased and the Company is currently engaged in preparing for a new business. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES |
Lease Commitment | |
Commencing August 1, 2011, SLLC and the Company moved from Suite 600 to Suite 350 and the Company agreed to pay SLLC $1,000 rent on a month-to-month basis. The lease was terminated at the end of April 2014. For the years ended December 31, 2014 and 2013, the Company’s rent expense was $4,000 and $12,000, respectively. |
FORGIVENESS_OF_PAYABLES
FORGIVENESS OF PAYABLES | 12 Months Ended |
Dec. 31, 2014 | |
Forgiveness Of Payables | |
FORGIVENESS OF PAYABLES | 11. FORGIVENESS OF PAYABLES |
In connection with the September 11, 2014 transaction described above, certain former directors forgave liabilities due to them related to accrued director fees. The amount totaled $43,919 and was recorded in equity due to the nature of the relationship between the directors and the Company. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 12. SUBSEQUENT EVENTS |
On October 31, 2014, the Company approved to 1) change the name of the Company from “Bluegate Corporation” to “Logicquest Technology, Inc.”; 2) increase the number of authorized shares of common stock, par value $0.001, from 50,000,000 to 200,000,000; and 3) perform reverse stock split of the Company’s issued and outstanding shares of common stock at a ratio of one post-split share per twenty pre-split shares. The changes were effective March 19, 2015. | |
The number of common shares of the Company has been retroactively restated in these financial statements to give effect to the reverse stock split. |
ORGANIZATION_AND_SUMMARY_OF_SI1
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ESTIMATES | SIGNIFICANT ESTIMATES |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the periods. Actual results could differ from estimates making it reasonably possible that a change in the estimates could occur in the near term. | |
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS |
The Company considers all highly liquid short-term investments with an original maturity of three months or less when purchased, to be cash equivalents. | |
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS |
Accounts receivable are amounts due on sales, are unsecured and are carried at their estimated collectible amounts. Credit is generally extended on a short-term basis; thus accounts receivable do not bear interest although a finance charge may be applied to such receivables that are more than thirty days past due. Accounts receivable are periodically evaluated for collectability based on past credit history with clients. Provisions for losses on accounts receivable are determined on the basis of loss experience, known and inherent risk in the account balance and current economic conditions. | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS |
A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS |
For certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, note payable, accounts payable, and accrued liabilities, the carrying amounts approximate fair values due to their short maturities. | |
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. | |
It is not, however, practical to determine the fair value of accounts payable, accrued liabilities, and note payable to related parties and lease and management arrangement with related parties, if any, due to their related party nature. | |
INCOME TAXES | INCOME TAXES |
The Company uses the liability method of accounting for income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their financial amounts at year-end. The Company provides a valuation allowance to reduce deferred tax assets to their net realizable value. | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION |
Accounting Standard 718, “Accounting for Stock-Based Compensation" (“ASC 718”) established financial accounting and reporting standards for stock-based employee compensation plans. It defines a fair value based method of accounting for an employee stock option or similar equity instrument. Logicquest accounts for compensation cost for stock option plans in accordance with ASC 718. | |
The Company accounts for share based compensation to non-employees in accordance with Accounting Standard 505-50 “Accounting for Equity Instruments Issued to Non-Employees for Acquiring, or in Conjunction with Selling, Goods or Services.” | |
REVENUE RECOGNITION | REVENUE RECOGNITION |
Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. | |
Revenue is recognized based upon contractually determined monthly service charges to individual customers. Some services are billed in advance and, accordingly, revenues are deferred until the period in which the services are provided. | |
LOSS PER SHARE | LOSS PER SHARE |
Basic and diluted net loss per share is computed on the basis of the weighted average number of shares of common stock outstanding during each period. Potentially dilutive options that were outstanding during 2014 and 2013 were not considered in the calculation of diluted earnings per share because the Company's net loss rendered their impact anti-dilutive. Accordingly, basic and diluted losses per share were identical for the years ended December 31, 2014 and 2013. | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS |
The Company does not expect any recent accounting pronouncements to have a material impact to its financial position or result of operations. |
GOING_CONCERN_CONSIDERATIONS_T
GOING CONCERN CONSIDERATIONS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Going Concern Considerations | |||||||||
Schedule of Financial Results | We experienced negative financial results as follows: | ||||||||
2014 | 2013 | ||||||||
Net loss | $ | (485,983 | ) | $ | (556,224 | ) | |||
Negative cash flow from operations | (49,723 | ) | (64,639 | ) | |||||
Negative working capital | (3,224,235 | ) | (2,782,171 | ) | |||||
Stockholders’ deficit | (3,224,235 | ) | (2,782,171 | ) |
ACCOUNTS_RECEIVABLE_NET_Tables
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Receivables [Abstract] | |||||||||
Schedule of Accounts Receivable, Net | Accounts receivable, net consists of the following at December 31, 2014 and 2013: | ||||||||
2014 | 2013 | ||||||||
Accounts receivable | $ | — | $ | 2,668 | |||||
Less allowance for bad debts | — | (2,311 | ) | ||||||
$ | — | $ | 357 |
ACCOUNTS_PAYABLE_TO_RELATED_PA1
ACCOUNTS PAYABLE TO RELATED PARTY (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounts Payable To Related Party | |||||||||
Schedule of Accounts Payable To Related Party | The accounts payable to related party balance was owed to Sperco, LLC (“SLLC”) (an entity controlled by Stephen J. Sperco, the Company’s former CEO/President/Director) and is summarized below: | ||||||||
12/31/14 | 12/31/13 | ||||||||
During November 2009, Bluegate entered into an Asset Sale and Purchase Agreement to sell certain assets to SLLC, and as a result, these balances represent funds collected by Bluegate on behalf of SLLC. These balances were reduced each year by $52,000 as a result of SLLC agreeing to pay Bluegate for office space and associated services for the Sperco entities for the period from July 1, 2010 through July 31, 2011. | $ | — | $ | 46,766 | |||||
As a result of the November 2009 transaction, commencing January 1, 2010, Bluegate had no employees and agreed to pay SLLC a monthly amount of $15,000 for management, accounting and administrative services, as well as, infrastructure and network engineering support. In August 2012 the monthly amount was $18,500 and beginning September 2012 the monthly amount was revised to $15,500 to reflect support for a new project engagement. | — | 641,500 | |||||||
Commencing August 1, 2011, SLLC and Bluegate moved from Suite 600 to Suite 350 and Bluegate agreed to pay SLLC $1,000 rent on a month-to-month basis. | — | 29,000 | |||||||
$ | — | $ | 717,266 |
NOTE_PAYABLE_TO_RELATED_PARTY_
NOTE PAYABLE TO RELATED PARTY (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Note Payable To Related Party | |||||||||
Schedule of Notes Payable to Related Party | Note payable at December 31, 2014 is summarized below: | ||||||||
12/31/14 | 12/31/13 | ||||||||
Secured note payable to related party: During 2007, the Company entered into a line of credit agreement with SAI Corporation ("SAIC"), a corporation controlled by Stephen J. Sperco, to borrow up to $500,000. The line of credit has been amended several times due to Bluegate's need to borrow funds for working capital purposes and has been increased to $1,338,000. As a condition to and as additional consideration for SAIC's agreement to lend additional funds to the Company, the Company granted SAIC a security interest in its assets. Principal and interest is due on demand. Interest is at the rate of 15% per annum and payments are due and payable monthly at the end of each month until the outstanding principal balance is paid in full. The Company agreed to pay a late charge in the amount of $10,000 on any interest payment more than fifteen days delinquent. During 2014 and 2013, the Company incurred interest expense on the related party note payable of $319,572 and $311,550, respectively. | $ | — | $ | 1,310,600 |
ACCRUED_LIABILITIES_TO_RELATED1
ACCRUED LIABILITIES TO RELATED PARTIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accrued Liabilities To Related Parties | |||||||||
Accrued Liabilites To Related Parties | The accrued liabilities to related parties are summarized below: | ||||||||
12/31/14 | 12/31/13 | ||||||||
Accrued interest on the note payable to SAIC | $ | — | $ | 705,681 | |||||
Fees accrued through March 31, 2009 to former Board of Director, Dale Geary | — | 20,419 | |||||||
Fees accrued through March 31, 2009 to former Board of Director, Stephen J. Sperco | — | 17,500 | |||||||
Vehicle allowance accrued through December 31, 2008 to Stephen J. Sperco | — | 6,000 | |||||||
Fees paid by Ang Woon Han on behalf of the Company | 18,000 | — | |||||||
$ | 18,000 | $ | 749,600 |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Schedule of Deferred Tax Assets | The composition of deferred tax assets at December 31, 2014 and 2013 were as follows: | ||||||||
2014 | 2013 | ||||||||
Deferred tax assets | |||||||||
Benefit from carryforward of net operating loss | $ | 2,585,000 | $ | 2,420,000 | |||||
Less valuation allowance | (2,585,000 | ) | (2,420,000 | ) | |||||
Net deferred tax asset | $ | — | $ | — |
STOCKHOLDERS_DEFICIT_Tables
STOCKHOLDERS' DEFICIT (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||
Schedule of Stock Option Activity | SUMMARY OF STOCK OPTIONS | ||||||||||||
Non-statutory Stock Options | Shares | Exercise | |||||||||||
Price | |||||||||||||
Outstanding at January 1, 2013 | 23,332 | $ | 0.25 | ||||||||||
Forfeited | (23,332 | ) | 0.25 | ||||||||||
Outstanding at January 1, 2014 | — | ||||||||||||
Forfeited | — | ||||||||||||
Outstanding and exercisable at December 31, 2014 | — | ||||||||||||
Schedule of Stock Warrants Activity | SUMMARY OF STOCK WARRANTS | ||||||||||||
NUMBER OF | EXERCISE | WEIGHTED | |||||||||||
SHARES | PRICES ($) | AVERAGE | |||||||||||
UNDER | EXERCISE | ||||||||||||
WARRANTS | PRICE ($) | ||||||||||||
Outstanding at January 1, 2013 | 130,000 | 0.17 | 0.17 | ||||||||||
Forfeited or Canceled | (130,000 | ) | 0.17 | 0.17 | |||||||||
Outstanding at January 1, 2014 | — | ||||||||||||
Forfeited or Canceled | — | ||||||||||||
Outstanding and exercisable at December 31, 2014 | — |
GOING_CONCERN_CONSIDERATIONS_D
GOING CONCERN CONSIDERATIONS (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Going Concern Considerations | |||
Net loss | ($485,983) | ($556,224) | |
Negative cash flow from operations | -49,723 | -64,639 | |
Negative working capital | -3,224,235 | -2,782,171 | |
Total stockholders' deficit | ($3,224,235) | ($2,782,171) | ($2,225,947) |
ACCOUNTS_RECEIVABLE_NET_Detail
ACCOUNTS RECEIVABLE, NET (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Receivables [Abstract] | ||
Accounts receivable | $2,668 | |
Less allowance for bad debts | -2,311 | |
Accounts receivable, net | $357 |
ACCOUNTS_PAYABLE_TO_RELATED_PA2
ACCOUNTS PAYABLE TO RELATED PARTY (Details) (USD $) | 13 Months Ended | 0 Months Ended | |||||
Jul. 31, 2011 | Sep. 01, 2012 | Aug. 01, 2012 | Jan. 01, 2010 | Aug. 01, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | |
Amounts due to related party | |||||||
Total | 717,266 | ||||||
SLLC [Member] | |||||||
Administrative fees due from related party | 52,000 | ||||||
General and Administrative Fees [Member] | |||||||
Initial monthly fee | 15,000 | ||||||
Increase/decrease in monthly fee | 15,500 | 18,500 | |||||
Term | Monthly | Monthly | Monthly | ||||
General and Administrative Fees [Member] | SLLC [Member] | |||||||
Amounts due to related party | 641,500 | ||||||
Rent Payable [Member] | |||||||
Monthly rent | 1,000 | ||||||
Term | Month-to-Month basis through April 30, 2014 | ||||||
Rent | SLLC [Member] | |||||||
Amounts due to related party | 29,000 | ||||||
Asset Sale and Purchase Agreement [Member] | SLLC [Member] | |||||||
Amounts due to related party | $46,766 |
NOTE_PAYABLE_TO_RELATED_PARTY_1
NOTE PAYABLE TO RELATED PARTY (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2007 | Sep. 11, 2014 | |
Note Payable To Related Party | ||||
Secured note payable to related party | $1,310,600 | |||
Credit line issuer | SAI Corporation ("SAIC"), a corporation controlled by our CEO, Stephen J. Sperco | |||
Date of issuance of line of credit | 31-Dec-07 | |||
Maximimum borrowing capacity of secured line of credit | 1,338,000 | 500,000 | ||
Line of credit due date | On demand | |||
Line of credit interest rate | 15.00% | |||
Late payment penalty | $10,000 penalty for late payment | |||
Late payment penalty date | 15 days after due date | |||
Interest expense | 319,572 | 311,550 | ||
Debt instrument, face amount | $1,337,600 |
ACCRUED_LIABILITIES_TO_RELATED2
ACCRUED LIABILITIES TO RELATED PARTIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Total | $18,000 | $749,600 |
SAIC [Member] | ||
Accrued interest | 705,681 | |
CEO - Sperco [Member] | ||
Accrued vehicle allowance | 6,000 | |
Former Member of Board of Directors [Member] | ||
Accrued fees | 20,419 | |
Member of Board of Directors [Member] | ||
Accrued fees | 17,500 | |
Ang Woon Han [Member] | ||
Accrued fees | $18,000 |
ASSIGNMENT_OF_RELATED_PARTY_LI1
ASSIGNMENT OF RELATED PARTY LIABILITIES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 11, 2014 | |
Assignment Of Related Party Liabilities | |||
Amount of accounts payable to related party that was assigned during period to third party | $836,500 | ||
Amount of accrued liabilities to related party that was assigned during period to third party | 918,190 | ||
Debt instrument, face amount | 1,337,600 | ||
Debt instrument, interest rate | 15.00% | ||
Interest expense | $319,572 |
INCOME_TAXES_Narrative_Details
INCOME TAXES (Narrative) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforward amount | 7,603,000 |
Maximum [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforward expiration date | 31-Dec-34 |
INCOME_TAXES_Schedule_of_Defer
INCOME TAXES (Schedule of Deferred Tax Assets) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Income Tax Disclosure [Abstract] | ||
Benefit from carryforward of net operating loss | $2,585,000 | $2,420,000 |
Less valuation allowance | -2,585,000 | -2,420,000 |
Net deferred tax asset |
STOCKHOLDERS_DEFICIT_Stock_Opt
STOCKHOLDERS' DEFICIT (Stock Option Plans Narrative) (Details) (2005 Stock Option Plan [Member]) | 12 Months Ended |
Dec. 31, 2014 | |
2005 Stock Option Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized under the plan | 150,000 |
Options granted | 56,635 |
STOCKHOLDERS_DEFICIT_Summary_o
STOCKHOLDERS' DEFICIT (Summary of Stock Options Activity) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Number of Options | ||
Options outstanding at beginning of year | 23,332 | |
Options forfeited | -23,332 | |
Options at end of year | ||
Options exercisable at end of year | ||
Weighted Average Exercise Price | ||
Options outstanding at beginning of year | $0.25 | |
Options forfeited | $0.25 | |
Options at end of year |
STOCKHOLDERS_DEFICIT_Summary_o1
STOCKHOLDERS' DEFICIT (Summary of Warrants Activity) (Details) (Warrant [Member], USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Warrant [Member] | ||
Weighted Average Exercise Warrants | ||
Warrants outstanding beginning of year | 130,000 | |
Forfeited or Canceled | -130,000 | |
Warrants outstanding end of year | ||
Weighted Average Exercise Price | ||
Warrants outstanding beginning of year | $0.17 | |
Forfeited or Canceled | $0.17 | |
Warrants outstanding end of year |
STOCKHOLDERS_DEFICIT_Equity_Tr
STOCKHOLDERS' DEFICIT (Equity Transactions) (Details) | 12 Months Ended | |||
Dec. 31, 2014 | Mar. 19, 2015 | Sep. 11, 2014 | Dec. 31, 2013 | |
Stockholders' Equity Note [Abstract] | ||||
Common stock, shares outstanding | 2,301,849 | 2,301,849 | ||
Preferred stock convertible to common stock outstanding | 72,500 | |||
Common stock outstanding, fully diluted, upon conversion of preferred stock | 2,374,349 | |||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | |
Number of common shares sold by majority shareholder to Ang Woon Han | 1,203,513 | |||
Number of common shares sold expressed as percentage of all issued and outstanding common stock | 52.30% | |||
Number of Series C Convertible Preferred Stock sold to Ang Woon Han | 48 | |||
Number of Series D Convertible Preferred Stock sold to Ang Woon Han | 10 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Monthly rent owed on property | $1,000 | |
Rent expense | $4,000 | $12,000 |
FORGIVENESS_OF_PAYABLES_Detail
FORGIVENESS OF PAYABLES (Details) (USD $) | Dec. 31, 2014 |
Forgiveness Of Payables | |
Payables forgiven | $43,919 |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (USD $) | Mar. 19, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Oct. 31, 2014 |
Subsequent Event [Line Items] | ||||
Common stock, par value | $0.00 | $0.00 | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | |
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Common stock, par value | $0.00 | |||
Common stock, shares authorized | 200,000,000 |