NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -
ORGANIZATION AND NATURE OF BUSINESS
History
Carbon Credits International Inc. (“CCII”), which was formed on October 15, 2007 as a Nevada corporation, was the result of a spin off from Carbon Credits Industries, Inc. (“CCI”), its former parent issuer, on October 17, 2007, in which 24,196,000 shares of common stock were issued to the shareholders of CCI on a share for share basis ownership.
On December 23, 2011, CCII entered into a merger agreement with Lifestyle Wireless, Inc. (“LWI”), A Washington Corporation, whereby 30,008,000 shares of CCI common stock were cancelled and 6,321,830 shares of CCII common stock were issued to LWI, with CCII remaining as the surviving company. The effective date of the merger was January 10, 2012 under the Articles of Merger.
On July 1, 2013, CCII changed its name to Singlepoint Inc. (“Singlepoint” or “the Company”) and increased its authorized shares of common stock from 100,000,000 to 500,000,000 and authorized 30,000,000 preferred shares. On July 1, 2013, the ticker symbol changed from CARN to SING.
On July 20, 2016, the Company amended its Articles of Incorporation and increased its authorized common shares from 500,000,000 to 1,000,000,000.
On July 20, 2016, the Company increased the number of authorized Class A Convertible Preferred Stock from 30,000,000 to 60,000,000. The Class A Stock is entitled to vote 25 votes of common stock for each share of Class A Stock held with respect to all matters upon which common stockholders are entitled to vote or to which stockholders are entitled to give consent. Class A Stock converts into common stock of the Company at a ratio of six common shares for every 1 Class A Share.
On August 31, 2017, the Company amended its Articles of Incorporation and increased its authorized common shares from 1,000,000,000 to 2,000,000,000.
On August 31, 2017, the Company amended its Articles of Incorporation and increased the voting rights on its Class A Convertible Preferred Stock to 50 votes of common stock for each share of Class A Stock held with respect to all matters upon which common stockholders are entitled to vote, and increased the conversion ratio on its Class A Stock so that it converts into common stock of the Company at a ratio of 25 common shares for every one Class A share.
On May 17, 2017, the Company acquired a 90% interest in Discount Garden Supply, Inc. (“DIGS”) for cash and common stock.
On October 11, 2017, the Company acquired a 51% interest in Jiffy Auto Glass (“JAG”) for cash and common stock.
On August 31, 2018, the Company acquired a 51% interest in ShieldSaver, LLC (“ShieldSaver”) for cash and common stock.
Going Concern
The financial statements have been prepared assuming that the Company will continue as a going concern. As of March 31, 2019, the Company has yet to achieve profitable operations and is dependent on its ability to raise capital from stockholders or other sources to sustain operations and to ultimately achieve viable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The Company’s ability to continue in existence is dependent on the Company’s ability to develop the Company’s business plan and to achieve profitable operations. Since the Company does not anticipate achieving profitable operations and/or adequate cash flows in the near term, management will continue to pursue additional equity financing through private placements of the Company’s common stock.
NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission including Form 10-Q and Regulation S-X. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly state the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been omitted pursuant to such rules and regulations. These financial statements and the information included under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the audited financial statements and explanatory notes for the year ended December 31, 2018 as disclosed in our Form 10-K filed on April 5, 2019. The results of the three months ended March 31, 2019 (unaudited) are not necessarily indicative of the results to be expected for the pending full year ending December 31, 2019.
Principles of Consolidation
The consolidated financial statements include the accounts of Singlepoint, DIGS, JAG, and Singleseed, Inc. as of March 31, 2019 and December 31, 2018 and for the three months ended March 31, 2019 and 2018. All significant intercompany transactions have been eliminated in consolidation.
Revenues
It is the Company’s policy that revenue from product sales or services will be recognized in accordance with ASC 606 “Revenue from Contracts with Customers”. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. In applying the new revenue recognition model to contracts with customers, an entity: (1) identifies the contract(s) with a customer; (2) identifies the performance obligations in the contract(s); (3) determines the transaction price; (4) allocates the transaction price to the performance obligations in the contract(s); and (5) recognizes revenue when (or as) the entity satisfies a performance obligation. The accounting standards update applies to all contracts with customers except those that are within the scope of other topics in the FASB Accounting Standards Codification.
The Company incurs costs associated with product distribution, such as freight and handling costs. The Company has elected to treat these costs as fulfillment activities and recognizes these costs at the same time that it recognizes the underlying product revenue. As this policy election is in line with the Company’s previous accounting practices, the treatment of shipping and handling activities under Topic 606 did not have any impact on the Company’s results of operations, financial condition and/or financial statement disclosures. In accordance with the new guidance, the Company recognizes revenue at an amount that reflects the consideration that the Company expects to be entitled to receive in exchange for transferring goods or services to its customers. The Company’s policy is to record revenue when control of the goods transfers to the customer.
Revenue Sharing
In addition to selling the Company’s products to customers, the Company recognizes revenues by sharing commissions with Independent Sales Organizations as an agent on a net basis.
These revenues do not comprise a material amount of the Company’s net sales.
Cash and Cash Equivalents
The Company considers all highly liquid investments with the original maturities of ninety days or less at the time of purchase to be cash equivalents. The Company maintains deposits in financial institutions which are insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company had deposits in excess of amounts insured by the FDIC of approximately $108,000 as of March 31, 2019.
Convertible Instruments
The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with the Accounting Standards Committee (“ASC”) 815 “Derivatives and Hedging”. It provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative financial instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or other expense. Upon conversion or exercise of a derivative financial instrument, the instrument is marked to fair value at the conversion date and is reclassified to equity. The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of notes redemption
Income Taxes
The Company accounts for its income taxes in accordance with ASC 740 “Income Taxes”, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company has a net operating loss carryforward, however, due to the uncertainty of realization, the Company has provided a full valuation allowance for deferred tax assets resulting from this net operating loss carryforward.
Earnings (loss) Per Common Share
Basic loss per common share has been calculated based upon the weighted average number of common shares outstanding during the period in accordance with the ASC 260-10, “Earnings per Share”. Common stock equivalents are not used in the computation of loss per share, as their effect would be antidilutive. Diluted EPS includes the effect from potential issuance of common stock, including stock issuable pursuant to the assumed exercise of warrants and conversion of convertible notes and Class A Preferred Stock. Dilutive EPS is computed by dividing net income (loss) by the sum of the weighted average number of common stock outstanding, and the dilutive shares.
The following table summarizes the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive even though the exercise price could be less than the average market price of the common shares:
|
|
|
Three months
ended
|
|
|
|
|
March 31,
|
|
|
|
|
2019
|
|
|
|
|
|
|
|
Series A Preferred Stock
|
|
|
1,230,000,000
|
|
|
Convertible notes
|
|
|
229,585,686
|
|
|
Warrants
|
|
|
10,000,000
|
|
|
Potentially dilutive securities
|
|
|
1,469,585,686
|
|
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions.
Fair Value Measurements
On January 1, 2011, the Company adopted guidance which defines fair value, establishes a framework for using fair value to measure financial assets and liabilities on a recurring basis, and expands disclosures about fair value measurements. Beginning on January 1, 2011, the Company also applied the guidance to non-financial assets and liabilities measured at fair value on a non-recurring basis, which includes goodwill and intangible assets. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:
Level 1 - Valuation is based upon unadjusted quoted market prices for identical assets or liabilities in accessible active markets.
Level 2 - Valuation is based upon quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable in the market.
Level 3 - Valuation is based on models where significant inputs are not observable. The unobservable inputs reflect a company’s own assumptions about the inputs that market participants would use.
The Company’s financial instruments consist of cash, accounts receivable, investments, accounts payable, convertible notes payable, advances from related parties, and derivative liabilities. The estimated fair value of cash, accounts receivable, investments, accounts payable, convertible notes payable and advances from related parties approximate their carrying amounts due to the short-term nature of these instruments.
Certain non-financial assets are measured at fair value on a nonrecurring basis. Accordingly, these assets are not measured and adjusted to fair value on an ongoing basis but are subject to periodic impairment tests.
The Company’s derivative liabilities have been valued as Level 3 instruments.
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of convertible notes derivative liability – December 31, 2018
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
2,215,376
|
|
|
$
|
2,215,376
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of convertible notes derivative liability – March 31, 2019
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
2,149,878
|
|
|
$
|
2,149,878
|
|
The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of December 31, 2018 and March 31, 2019:
|
|
|
Derivative
Liability
|
|
|
Balance, December 31, 2018
|
|
|
2,215,376
|
|
|
Additions recognized as debt discount
|
|
|
-
|
|
|
Derivative liability settlements
|
|
|
(682,481
|
)
|
|
Mark-to-market at March 31, 2019
|
|
|
616,983
|
|
|
Balance, March 31, 2019
|
|
$
|
2,149,878
|
|
|
|
|
|
|
|
|
Net loss for the year included in earnings relating to the liabilities held at March 31, 2019
|
|
$
|
616,983
|
|
Recently Issued Accounting Pronouncements
Leases
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This standard requires all leases that have a term of over 12 months to be recognized on the balance sheet with the liability for lease payments and the corresponding right-of-use asset initially measured at the present value of amounts expected to be paid over the term. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the lease term. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard will be effective for our interim and annual periods beginning January 1, 2019 and must be applied on a modified retrospective basis to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We adopted this standard on January 1, 2019. The adoption of this standard did not have a material impact on our financial position or results of operations.
There were various other accounting standards and interpretations issued recently, none of which are expected to have a material impact on the Company’s financial position, operations or cash flows. Management has evaluated these new pronouncements through March 31, 2019.
NOTE 3 -
INVESTMENTS
Investments
The company records its investments using the cost method. If cost exceeds fair value, an impairment loss is recognized unless the impairment is considered temporary.
The Company had total investments of $60,000 as of March 31, 2019 and December 31, 2018, respectively.
2019 Acquisition – Direct Solar LLC
On February 22, 2019 the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Direct Solar LLC and AI Live Transfers LLC (collectively referred to as the “Sellers” or “Direct Solar”) whereby the Company agreed to acquire certain assets of the Sellers (the “Purchased Assets” as more fully set forth in the Asset Purchase Agreement). Pursuant to the Asset Purchase Agreement the Company agreed: (i) to pay the Sellers that number of shares of Company common stock equal to $2,040,000 (based on the average closing price of the Company common stock during the five trading days immediately preceding the closing of the transactions contemplated by the Asset Purchase Agreement), (ii) create a subsidiary (the “SUB”) and issue the Sellers equity interests in SUB equal to ownership of Forty Nine Percent (49%) of SUB; both subject to adjustment, and (iii) providing SUB (within 14 days of closing of the transactions contemplated by the Asset Purchase Agreement) with $250,000.
The closing of the transactions set forth in the Asset Purchase Agreement are subject to the satisfaction (or waiver) of certain conditions. The material conditions are as follows: (i) delivery of a bill of sale in the form mutually agreeable to the parties duly executed by Sellers, transferring the Tangible Personal Property included in the Purchased Assets to the Company; (2) an assignment agreement in the form mutually agreeable to the parties duly executed, effecting the assignment of the Purchased Assets; (3) [an] assignment[s] in the form mutually agreeable to the parties duly executed, transferring all of Sellers’ right, title and interest in and to the Intellectual Property Assets; (4) an Operating Agreement of the SUB to be in effect upon Closing in the form as mutually agreed to amongst the parties; (5) with respect to each Lease, an Assignment and Assumption of Lease in the form mutually agreeable to the parties; (6) transition services agreements in the forms mutually agreeable to the parties duly executed by certain employees of the Sellers; (7) completion, to the Company’s satisfaction, of an audit of Seller’s financial statements from inception to December 31, 2018 by the Company’s independent registered public accounting firm in accordance with the standards of the Public Company Accounting Oversight Board (United States); and the Company being satisfied with its due diligence review of the Sellers, its Business and the Purchased Assets, including without limitation speaking with and otherwise reviewing relationships with all suppliers, customers, employees, independent contractors, and clients of Sellers.
The Company waived certain conditions including but not limited to the completion of an audit of the Seller’s financial statements and the closing of the transactions set forth in the Asset Purchase Agreement was finalized per the Closing Certificate dated May 14, 2019.
Proforma Information (unaudited)
Direct Solar
The unaudited pro forma information of the consolidated results of the Company’s operations and the results of the May 2019 acquisition of Direct Solar as if it had been consummated on January 1, 2019 are not available as of the date of this filing.
NOTE 4 -
CONVERTIBLE NOTES PAYABLE
|
Convertible notes payable consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible note payable with an accredited investor dated October 31, 2017, with interest at 0%, due October 31, 2017, convertible at $0.007 per share. This note is currently in default.
|
|
|
10,500
|
|
|
|
10,500
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible note payable to investor (the “CVP Note”) dated October 10, 2017, with interest at 10%, an OID of $70,000, due October 6, 2019, convertible into shares of the Company’s common stock at the average of the 3 lowest closing bid prices of the Company’s common stock during the 20 trading days prior to conversion. The note provides for additional tranches of a maximum of $3,970,000, which includes OID of 10%. The note includes a warrant to purchase 5,000,000 shares of the Company’s common stock at a price of $0.10 per share. The note is secured by substantially all assets of the Company. The investor converted a total of $149,500 of principal and accrued interest of this note into 33,370,535 shares of the Company’s common stock during the three months ended March 31, 2019.
|
|
|
398,250
|
|
|
|
547,749
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible note payable to investor (the “UAHC Note”) dated October 10, 2017, with interest at 10%, an OID of $70,000, due October 6, 2019, convertible into shares of the Company’s common stock at the average of the 3 lowest closing bid prices of the Company’s common stock during the 20 trading days prior to conversion. The note includes a warrant to purchase 5,000,000 shares of the Company’s common stock at a price of $0.10 per share. The note is secured by substantially all assets of the Company. The investor converted a total of $50,000 of principal and accrued interest of this note into 11,160,714 shares of the Company’s common stock during the three months ended March 31, 2019.
|
|
|
620,000
|
|
|
|
670,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible note payable, to investor (the “Iliad Note”) dated November 5, 2018 totaling $500,000, plus OID of $50,000 and legal fee loan costs of $20,000. The note bears interest at 10% and matures on November 5, 2020.Total available under note is $5,520,000, including $500,000 OID (and $20,000 in legal fees due on first $500k tranche). The note is convertible into shares of the Company’s common stock after 180 days at the average of the 3 lowest closing bid prices of the Company’s common stock during the 20 trading days prior to conversion. The Company borrowed an additional $825,000 (including OID of $75,000) under this note during the three months ended March 31, 2019. The note is secured by substantially all assets of the Company.
|
|
|
1,395,000
|
|
|
|
570,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Total convertible notes payable
|
|
|
2,423,750
|
|
|
|
1,798,249
|
|
|
Less debt discounts
|
|
|
(1,143,003
|
)
|
|
|
(1,141,396
|
)
|
|
Convertible notes payable, net
|
|
|
1,280,747
|
|
|
|
656,853
|
|
|
Less current portion of convertible notes
|
|
|
(30,747
|
)
|
|
|
(156,853
|
)
|
|
Long-term convertible notes payable
|
|
$
|
1,250,000
|
|
|
$
|
500,000
|
|
Aggregate maturities of long-term debt as of March 31, 2019 are due in future years as follows:
|
2018
|
|
$
|
30,747
|
|
|
2019
|
|
|
1,250,000
|
|
|
|
|
|
|
|
|
|
|
$
|
1,280,747
|
|
JAG, the Company’s subsidiary, entered into a Funding Purchase Agreement on August 25, 2017, whereby JAG received proceeds of $100,000 with loan costs of $37,000, for a total loan of $137,000. This debt was refinanced in April 2018 for $65,000 under a credit agreement with another third-party, payable in weekly payments of approximately $800 through July 2019. The balance under this credit agreement was $44,067 and $52,989 as of March 31, 2019 and December 31, 2018 and is included in accrued expenses on the accompanying balance sheet.
Total amortization of debt discounts was $73,394 and $109,767 for the three months ended March 31, 2019 and 2018, respectively. Accrued interest on the above notes payable totaled $152,715 and $96,100 as of March 31, 2019 and December 31, 2018, respectively. Interest expense for the notes payable for the three months ended March 31, 2019 and 2018 was $73,194 and $24,849, respectively.
NOTE 5 -
DERIVATIVE LIABILITY
Derivative Liability- Debt
The fair value of the described embedded derivative on all convertible debt was valued at $2,149,878 and $2,215,376 at March 31, 2019 and December 31, 2018, respectively, which was determined using the Black Scholes Pricing Model with the following assumptions:
|
|
|
December 31,
2018
|
|
|
Dividend yield:
|
|
0
|
%
|
|
Term
|
|
0.5 – 1.0 year
|
|
|
Volatility
|
|
109.7–132.8
|
%
|
|
Risk free rate:
|
|
2.09–2.63
|
%
|
For the three months ended March 31, 2019 and 2018, the Company adjusted the recorded fair value of the derivative liability on debt to market resulting in non-cash, non-operating loss of $616,983 for the three months ended March 31, 2019 and gain of $197,758 for the three months ended March 31, 2018.
Note 2 contains a summary of changes in fair value of the Company’s Level 3 financial liabilities as of March 31, 2019.
NOTE 6 -
STOCKHOLDERS’ DEFICIT
Class A Convertible Preferred Shares
As of March 31, 2019 and December 31, 2018, the Company had authorized 60,000,000 shares of Series A Convertible Preferred Stock (“Class A Stock”) with $0.0001 par value per share, of which 49,200,000 and 50,950,000 shares were issued and outstanding as of March 31, 2019 and December 31, 2018, respectively.
Each share of Class A Stock is convertible at any time into 25 shares of common stock, totaling 1,230,000,000 shares of common stock assuming full conversion of all outstanding shares. No dividends are payable unless declared by the Board of Directors. Each share of Class A Stock votes with the shares of Common Stock and is entitled to 50 votes per share and ranks senior to all other classes of stock in liquidation in the amount of $1 per share.
On January 3, 2019, the Company issued 10,500,000, shares of common stock to a former director for the conversion of 1,750,000 shares of Class A Preferred Stock.
Common Shares
As of March 31, 2019, the Company’s authorized common stock is 2,000,000,000 shares at $0.0001 par value per share. 1,299,350,272 and 1,236,319,023 shares were issued and outstanding as of March 31, 2019 and December 31, 2018, respectively.
Shares issued during the Three months ended March 31, 2019
In January and February 2019, the Company issued an aggregate of 44,531,249 common shares to two investors for the conversion of a total of $199,500 of convertible debt.
On March 1, 2019, the Company issued an aggregate of 8,000,000 common shares to a consultant for consulting services at a price of $0.10 per share. The fair value of these shares of $800,000 was included in accrued expenses as of December 31, 2018.
NOTE 7 -
RELATED PARTY TRANSACTIONS
Accrued Officer Compensation
As of March 31, 2019 and December 31, 2018, a total of $404,000 and $349,000, respectively, was accrued for unpaid officer wages due the Company’s CEO under the CEO’s employment agreement.
Other
As of March 31, 2019 and December 31, 2018, a total of $16,619 and $30,287 was due our CEO and our President and is included in accounts payable.
As of March 31, 2019 and December 31, 2018, a total of $2,892 was due the founder of DIGS and is included in accounts payable.
The Company’s CEO advanced the Company funds during 2019 and 2018, with a balance of $605,000 and $585,000, plus accrued interest of $26,597 and $18,030 as of March 31, 2019 and December 31, 2018, respectively. These balances accrue interest at 12% beginning on October 1, 2018, are unsecured and due on demand.
As of March 31, 2019 and December 31, 2018, a total of $14,184 and $10,738, respectively, was due to the founder of DIGS for advances to DIGS.
As of March 31, 2019 and December 31, 2018, a total of $32,020 was due to an entity owned by the founder of ShieldSaver for advances to ShieldSaver prior to the Company’s acquisition of ShieldSaver on August 31, 2018. The founder of ShieldSaver is also the founder of JAG and is a related party.
The Company’s subsidiary DIGS previously sub-leased space on a month-to-month basis from an entity controlled by the founder of DIGS. Total payments related to this sub-lease for the three months ended March 31, 2019 and 2018 were $0 and $4,875, respectively.
See Note 6 for related party share issuances to a former director of the Company.
NOTE 8 – COMMITMENTS AND CONTINGENCIES
Currently the Company leases approximately 1,400 square feet of office space at 2999 North 44th St, Phoenix, AZ 85018 at a monthly rent of $3,375.97. The lease term expires September 2019.
See the Company’s Form 10-K for the year ended December 31, 2018 for details on our executive’s employment agreements. There have been no changes to these agreements.
NOTE 9 - REVENUE CLASSES
Selected financial information for the Company’s operating revenue for disaggregated revenue purposes are as follows:
|
|
|
Three Months
Ended
March 31,
|
|
|
Three Months
Ended
March 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
Retail
|
|
$
|
41,971
|
|
|
$
|
26,625
|
|
|
Services
|
|
|
220,919
|
|
|
|
162,258
|
|
|
Total
|
|
$
|
262,890
|
|
|
$
|
188,883
|
|
NOTE 10 - SUBSEQUENT EVENTS
See Note 3 for our acquisition with Direct Solar LLC.