UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
Commission
file number
(Exact Name Of Registrant As Specified In Its Charter)
(State of Incorporation) |
(I.R.S. Employer Identification No.) | |
| (Address of Principal Executive Offices) | (ZIP Code) |
Registrant’s
Telephone Number, Including Area Code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | None | None |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive
Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit such files).
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.
| Large accelerated filer ☐ | Accelerated filer ☐ | Smaller
reporting company | |
| Emerging
growth company |
On August 3, 2021, the Registrant had shares of common stock outstanding.
TABLE OF CONTENTS
| Item | Description | Page | ||
| PART I - FINANCIAL INFORMATION | ||||
| ITEM 1. | FINANCIAL STATEMENTS. | 3 | ||
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATION. | 13 | ||
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. | 18 | ||
| ITEM 4. | CONTROLS AND PROCEDURES. | 18 | ||
| PART II - OTHER INFORMATION | ||||
| ITEM 1. | LEGAL PROCEEDINGS. | 19 | ||
| ITEM 1A. | RISK FACTORS. | 19 | ||
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. | 19 | ||
| ITEM 3. | DEFAULT UPON SENIOR SECURITIES. | 19 | ||
| ITEM 4. | MINE SAFETY DISCLOSURE. | 19 | ||
| ITEM 5. | OTHER INFORMATION. | 19 | ||
| ITEM 6. | EXHIBITS. | 19 |
| 2 |
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS Back to Table of Contents
| 3 |
Data Call Technologies, Inc.
Condensed Balance Sheets
June 30, 2021 (Unaudited) and December 31, 2020
| June 30, 2021 | December 31, 2020 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Total current assets | ||||||||
| Property and equipment | ||||||||
| Less accumulated depreciation and amortization | ||||||||
| Net property and equipment | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accounts payable - related party | ||||||||
| Accrued salaries - related party | ||||||||
| Accrued interest – related party | ||||||||
| Short-term note payable to related party | ||||||||
| Total current liabilities | ||||||||
| Total liabilities | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $ par value. Authorized shares: Series A | ||||||||
| Preferred stock, $ par value. Authorized shares: Series B - shares issued and outstanding at June 30, 2021 and December 31, 2020 | ||||||||
| Common stock, $ par value. Authorized shares: shares issued and outstanding at June 30, 2021 and at December 31, 2020 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | |||||
| Total stockholders’ equity | ) | |||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
| 4 |
DATA CALL TECHNOLOGIES, INC.
Condensed Statements of Operations
Three and Six Months Ended June 30, 2021 and 2020 (Unaudited)
| Three Months | Three Months | Six Months | Six Months | |||||||||||||
| ended | ended | ended | ended | |||||||||||||
| June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | |||||||||||||
| Revenues | ||||||||||||||||
| Sales | $ | $ | $ | $ | ||||||||||||
| Cost of sales | ||||||||||||||||
| Gross margin | ||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||
| Depreciation and amortization expense | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Other (income) expense | ||||||||||||||||
| Interest income | ( | ) | - | ( | ) | ( | ) | |||||||||
| Interest expense | - | - | ||||||||||||||
| Total expenses | ||||||||||||||||
| Net income before income taxes | ||||||||||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||
| Net income per common share - basic and diluted | $ | $ | $ | $ | ||||||||||||
| Weighted average common shares: | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
The accompanying notes are an integral part of these financial statements.
| 5 |
Data Call Technologies, Inc.
Condensed Statement of Stockholders’ Equity
For The Six Months Ended June 30, 2021 (unaudited) and the year ended December 31, 2020
| Preferred Stock A | Preferred Stock B | Common Stock | Additional paid-in | Accumulated | Stockholders’ | |||||||||||||||||||||||||||||||
| shares | amount | shares | amount | shares | amount | capital | deficit | equity | ||||||||||||||||||||||||||||
| Balance year ended December 31, 2019 | $ | $ | $ | $ | $ | ( | ) | $ | | |||||||||||||||||||||||||||
| Shares issued for services | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Net Income (loss) | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance year ended December 31, 2020 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Shares issued for services | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Net Income (loss) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Balance period ended June 30, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
| 6 |
DATA CALL TECHNOLOGIES INC.
Condensed Statements of Cash Flows
Six Months Ended June 30, 2021 and 2020 (Unaudited)
| Six Months | Six Months | |||||||
| Ended | Ended | |||||||
| June 30, 2021 | June 30, 2020 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation | ||||||||
| Stock-based compensation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Prepaid expenses | - | ( | ) | |||||
| Accounts payable | ||||||||
| Accounts payable - related party | ( | ) | ||||||
| Accrued interest – related party | ( | ) | ||||||
| Accrued expenses - related party | ( | ) | ||||||
| Deferred revenues | - | - | ||||||
| Net cash provided by operating activities | ||||||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | - | ( | ) | |||||
| Net cash used in investing activities | - | ( | ) | |||||
| Cash flows from financing activities: | ||||||||
| Principal payments on borrowing from related party | ( | ) | ( | ) | ||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash at beginning of year | ||||||||
| Cash at end of period | $ | $ | ||||||
| Supplemental Cash Flow Information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
| 7 |
DATA CALL TECHNOLOGIES, INC.
Notes to Condensed Financial Statements
June 30, 2021 (Unaudited)
(1) Summary of Significant Accounting Policies
Organization, Ownership and Business
Data Call Technologies, Inc. (the “Company”) was incorporated under the laws of the State of Nevada in 2002. The Company’s mission is to integrate cutting-edge information delivery solutions that are currently deployed by the media, and put them within the control of retail and commercial enterprises. The Company’s software and services put its clients in control of real-time advertising, news, and other content, including emergency alerts.
The accompanying unaudited financial statements have been prepared in accordance with U. S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six-month period ended June 30, 2021 are not indicative of the results that may be expected for the year ending December 31, 2021.
As contemplated by the Securities and Exchange Commission (SEC) under Rules of Regulation S-X, the accompanying financial statements and related footnotes have been condensed and do not contain certain information that will be included in the Company’s annual financial statements and footnotes thereto. For further information, refer to the Company’s audited consolidated financial statements and related footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2020.
Cash and Cash Equivalents
For
purposes of the statement of cash flows, the Company considers all highly liquid investment instruments purchased with original maturities
of three months or less to be cash equivalents. There were
Revenue Recognition
On January 1 2018, we adopted Accounting Standards Update No. 2014-09, (Revenue from Contracts with Customers) (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC), Revenue Recognition. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606. The impact of adopting the new revenue standard was not material to our financial statements and there was no adjustment to beginning retained earnings on January 1, 2018.
Topic Under 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
We determine revenue recognition through the following steps:
| ● | identification of the contract, or contracts, with a customer; |
| ● | identification of the performance obligations in the contract; |
| ● | determination of the transaction price; |
| ● | allocation of the transaction price to the performance obligations in the contract; and |
| ● | recognition of revenue when, or as, we satisfy a performance obligation. |
| 8 |
Company recognizes revenues based on monthly fees for services provided to customers. Some customers prepay for annual services and the Company defers such amounts and amortizes them into revenues as the service is provided.
Accounts Receivable
Accounts
receivable consist primarily of trade receivables. The Company provides an allowance for doubtful trade receivables equal to the estimated
uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review
of the current status of each customer’s trade accounts receivable. The allowance for doubtful trade receivables was $
Property, Equipment and Depreciation
Property
and equipment are recorded at cost less accumulated depreciation. Upon retirement or sale, the cost of the assets disposed of and the
related accumulated depreciation are removed from the accounts, with any resultant gain or loss being recognized as a component of other
income or expense. Depreciation is computed over the estimated useful lives of the assets (
Advertising Costs
The cost of advertising is expensed as incurred.
Research and Development
Research and development costs are expensed as incurred.
Product Development Costs
Product development costs consist of cost incurred to develop the Company’s website and software for internal and external use. All product development costs are expensed as incurred.
Income Taxes
The Company is a taxable entity and recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect when the temporary differences reverse. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date of the rate change. A valuation allowance is used to reduce deferred tax assets to the amount that is more likely than not to be realized.
Use of Estimates
The preparation of financial statements in conformity with 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 date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could vary from those estimates.
Beneficial Conversion Feature
Convertible debt includes conversion terms that are considered in the money compared to the market price of the stock on the date of the related agreement. The Company calculates the beneficial conversion feature and records a debt discount with the amount being amortized to interest expense over the term of the note.
| 9 |
Management’s Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses. Actual results could differ from these estimates.
We account for stock-based compensation in accordance with “FASB ASC 718-10.” Stock-based compensation expense recognized during the period is based on the value of the portion of share-based awards that are ultimately expected to vest during the period. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The fair value of restricted stock is determined based on the number of shares granted and the closing price of the Company’s common stock on the date of grant. Compensation expense for all share-based payment awards is recognized using the straight-line amortization method over the vesting period.
Fair Value of Financial Instruments
The Company estimates the fair value of its financial instruments using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the Company estimates of fair value are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The use of different market assumption and/or estimation methodologies may have a material effect on the estimated fair value amounts. The interest rates payable by the Company on its notes payable approximate market rates. The Company believes that the fair value of its financial instruments comprising accounts receivable, notes receivable, accounts payable, and notes payable approximate their carrying amounts.
On January 1, 2009, the Company adopted an accounting standard for applying fair value measurements to certain assets, liabilities and transactions that are periodically measured at fair value. The adoption did not have a material effect on the Company’s financial position, results of operations or cash flows. In August 2009, the FASB issued an amendment to the accounting standards related to the measurement of liabilities that are routinely recognized or disclosed at fair value. This standard clarifies how a company should measure the fair value of liabilities, and that restrictions preventing the transfer of a liability should not be considered as a factor in the measurement of liabilities within the scope of this standard. This standard became effective for the Company on October 1, 2009. The adoption of this standard did not have a material impact on the Company’s financial statements. The fair value accounting standard creates a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below with Level 1 having the highest priority and Level 3 having the lowest.
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.
Level 3: Valuations derived from valuation techniques in which one or more significant inputs are unobservable.
The following table presents the Company’s Assets and Liabilities within the fair value hierarchy utilized to measure fair value on a recurring basis as of June 30, 2021 and December 31, 2020:
| (Level 1) | (Level 2) | (Level 3) | |||||||||||
| June 30, 2021 | $ | $ | $ | ||||||||||
| December 31, 2020 | $ | $ | $ | ||||||||||
| 10 |
Recent Accounting Pronouncements
In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases. The amendments in ASU 2018-10 provide additional clarification and implementation guidance on certain aspects of the previously issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) and have the same effective and transition requirements as ASU 2016-02. Upon the effective date, ASU 2018-10 will supersede the current lease guidance in ASC Topic 840, Leases. Under the new guidance, lessees will be required to recognize for all leases, lease with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make payments arising from a lease, measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2018-10 is effective for private companies and emerging growth public companies for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. During the year ended December 31, 2019 the Company assessed the impact this guidance had on its financial statements and concluded that at present ASU No. 2018-10 has no impact on its financial statements due to not having any commitment to stay in our property longer than a year.
In February 2018, the FASB issued Accounting Standards Update No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02), which allows companies to reclassify stranded tax effects resulting from the Tax Act, from accumulated other comprehensive income to retained earnings. The new standard became effective on January 1, 2019, with early adoption permitted. Tax effects are not anticipated as a result of this standard
The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information.
(2) Related Party Transactions
During
the second quarter of 2018, the Company issued unregistered shares as follows: (i) restricted shares to Tim Vance, the Company’s
CEO, in connection with the execution of a new
As
of June 30, 2021, and December 31, 2020, notes payable to related party had a balance of $
During
the six months ended June 30, 2021 and 2020 and repaid a total $
As
of June 30, 2021 and December 31, 2020 the total due to management for past accrued salaries is $
As
of June 30, 2021 and December 31, 2020, the total due to management represented by prepayment of expenses included in accounts payable
is $
| 11 |
(3) Capital Stock, Warrants and Options
The Company is authorized to issue up to shares of Preferred Stock, $ par value per share, of which shares of Series A convertible preferred stock are outstanding at June 30, 2021 and December 31, 2020. The Preferred Stock may be issued in one or more series, the terms of which may be determined at the time of issuance by the Board of Directors, without further action by stockholders, and may include voting rights (including the right to vote as a series on particular matters), preferences as to dividends and liquidation, conversion, redemption rights and sinking fund provisions.
Each
share of Series A Preferred Stock shall bear a preferential dividend of twelve percent (
During
the quarter ended September 30, 2014, the Company amended its Articles of Incorporation to authorize shares of Series B Preferred
Stock at a par value of $ and issued shares. The Series B shares were valued at $
During
the second quarter of 2018, the Company issued unregistered shares as follows: (i)
restricted shares to Tim Vance, the Company’s CEO, in connection with the execution of a new
The Company is authorized to issue up to shares of Common Stock, of which shares were issued and outstanding as of June 30, 2021 and December 31, 2020.
(4) Property and Equipment
During
the six-month period ended June 30, 2020, the company paid $
Major classes of property and equipment together with their estimated useful lives, consisted of the following:
| Years | June 30, 2021 | December 31, 2020 | |||||||||
| Equipment | $ | $ | |||||||||
| Office furniture | |||||||||||
| Leasehold improvements | |||||||||||
| Less accumulated depreciation and amortization | ( | ) | ( | ) | |||||||
| Net property and equipment | $ | $ | |||||||||
(5) Shareholder Notes Payable
As
of June 30, 2021 and December 31, 2020, the Company had short-term notes due to a related party of $
Payments
of interest during the six-month period ended June 30, 2021 totaled $
(6) Subsequent Events and Contingencies
The Company has evaluated subsequent events from the date on the balance sheet through the date these financial statements are being filed with the Securities and Exchange Commission. No additional material events or transactions have occurred during this subsequent event reporting period which required recognition or disclosure in the financial statements.
| 12 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATION Back to Table of Contents
Some of the statements contained in this quarterly report of Data Call Technologies, Inc., Nevada corporation (hereinafter referred to as “we”, “us”, “our”, “Company” and the “Registrant”) discuss future expectations, contain projections of our plan of operation or financial condition or state other forward-looking information. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. From time to time, we also may provide forward-looking statements in other materials we release to the public.
Data Call Technologies, Inc. (“Data Call,” or the “Company”) was incorporated under the laws of the State of Nevada as Data Call Wireless on April 4, 2002. On March 1, 2006, we changed our name to Data Call Technologies, Inc.
Our mission is to continue to exponentially grow our offering of our proprietary subscription services by integrating cutting-edge information/content delivery solutions to and within the control of retail and commercial resellers CMS manufacturers and end-users. Our Company’s services put its clients in control of real-time news, sports, weather and other dynamic content, displayed within one or multiple locations, spanning from local, regional to global end points, through Digital Signage and Kiosk networks.
Our business plan continues to focus on growing our client base by effectively offering this real-time and licensed information/content displayed through Digital Signage and Kiosk networks, seeking to improve the delivery, security, and variety of information/content services to the growing Digital Signage and Kiosk community.
Overview - What Is Digital Signage?
You’ve seen Digital Signage, it’s everywhere. Whether you’re shopping, trying to find your way through the airport, in a taxi, or even along the highway on your way home, it’s there. LED and LCD displays are continually replacing printed marketing materials such as signs and placards, as well as the old-school whiteboard, for product and corporate branding, marketing and assisted selling. The appeal of instantly updating product videos and promotional messages on one or thousands of remotely located displays is driving the adoption of this growing marketing platform. Digital Signage presentations are typically comprised of repeating loops (playlists) of information used to brand, market or sell the owner’s products and services or corporate messaging. But once viewed, this information becomes repetitive and the viewer tunes it out, resulting in low retention of the client’s message. As digital signage has matured, the characteristics of the digital signage presentations have taken center-stage requiring fresh, relevant and dynamic content mixed within the marketing messages. Dynamic Content is key.
| 13 |
Digital Signage Matures
We are experiencing the Digital Signage Industry (back then called connected signage) steadily maturing and Data Call, through its multiple industry specific relationships, continues its engagement and influence in the direction of the Digital Signage industry. Data Call has been performing in this space for well over a decade. Our company has staked claim in assisting the industry’s birth and maintains its prime position to enjoy and benefit from this industry’s growth.
Early on, a business desiring to achieve commercial benefits from the use of digital signage was often confronted by a plethora of hardware and software solutions, all offering their own “standard” of what digital signage should be. Typical customers for digital signage were most-often offered expensive hardware to present digital signage with a very minimalistic content management solution (CMS), lacking the full package of content with which to build and tailor their systems for their target customer base.
Those early adopters of digital signage, often had to realize that their digital signage hardware vendors lacked the acumen to fully provide best practice of content strategy. The tools to manage content were provided, but not the content. From our inception, Data Call recognized that early signage providers and their typical customers lacked that key component - the offering of a comprehensive content package.
As the cost of platforms supporting infrastructure and digital displays have fallen significantly, digital signage has become more accessible to a wider range of potential users. Companies in our industry have come to understand, as we have preached since our inception, that the cost of Data Call’s integrated, content-flexible subscription service is extremely cost effective - and licensed for redistribution over their networks. The benefit that Data Call continues to provide our client base, in the form of ongoing content development, is expected to continue to provide our customers with desirable user-friendly content and content services.
The Need for Speed - Active Content
Active and dynamic content is the integral part of digital signage presentations that must be constantly updated with timely and relevant information to attract and retain target viewers to the products, services, or messaging offered by typical Digital Signage clients. For instance, a typical presentation may contain ten 15-second loops that provide the primary message of the presentation, but the active dynamic content, such as that provided by Data Call, is updated with new information constantly throughout the day. Those seeking to add active and dynamic content to their digital signage presentations are educated and advised to subscribe to Data Call’s dynamic content rather than attempting to illegally “cut and paste” or “scrape” broadcast content or RSS Feeds “not for commercial use” of others into their digital signage presentation.
By integrating Data Call’s content as a meaningful component of digital signage presentations, our clients can legally provide the entertainment and information content necessary to enhance the target customer’s information retention without disrupting the core message of the presentation. Some of the Infotainment categories provided by Data Call include news, sports, weather, financial data, the latest traffic alerts, among many others. With such a broad range of offerings, our clients have access to this active and dynamic content they need, regardless of the target customers and market they are addressing.
Our Business Opportunities
Our many opportunities for client development in the digital signage industry are growing exponentially. While many companies in our industry have traditionally outsourced all or part of their content creation, Data Call serves as a provider of dynamic active content to clients on a tailored basis. Whether a client desires general entertainment information for customers, such as news, sports, stock market quotes, etc. or location-specific content, such as local weather, traffic, etc., our research and experience has validated our long-held mantra that dynamic content draws and retains our clients’ target viewers to their digital signage and keeps viewers engaged throughout the client presentation.
Since our inception, management has developed and maintains strong relationships working with the leaders and associations of the digital signage industry. Collaborative efforts have successfully created, now industry standard, data formats and methods to facilitate the delivery of our dynamic content more easily and efficiently for integration into most hardware and software products.
| 14 |
Partners, Not Customers
Data Call’s enduring approach to our clients is to build long-lasting partnerships by creating client relationships that we believe are unique in the digital signage industry. We understand that each client has their own content requirements. In developing dynamic content for individual digital signage clients, we have identified three content-related factors: (i) reliability; (ii) objectivity; and (iii) ease of implementation. To address the reliability requirement, we are engaged in multiple license arrangements with the leading providers of news, weather, sports and financial information, among other client-desired content rather than either: (i) downloading and repackaging content sourced from the Internet (which may be illegal); or (ii) Scraping RSS feeds from news organizations (which may come and go at the provider’s whim - not to mention this practice is also illegal).
Licensing data from these premier providers has also served us by satisfying the second criteria, objectivity. Because it is commonly recognized that Internet content may often be unreliable, unverifiable and biased, early on, we determined that we could not simply use unfiltered Internet content for delivery to our clients. Our proper licensing of data facilitates the standard of delivery and implementation by our client/partners. Data Call does the heavy lifting by taking care of not just the licensing, but the proper formatting of that data for consumption by the industry utilizing our multiple formats offered. Data Call has understood that it’s Digital Signage and Kiosk clients needed a more complete service than to endeavor the sourcing of active content from multiple vendors. As a result, our flexible content plans permit our clients to do “one stop shopping” for all dynamic content requirements by licensing subscriptions through us.
We empower our clients to receive customized dynamic content subscriptions to be displayed in a multitude of ways (banners, tickers, scrolls or visualizations integrated with the overall presentations). We have created “Playlist Ready” offerings and produced and distribute multiple sets of common data layouts in the industry-standard formats such as XML (extensible markup language), JSON (JavaScript Object Notation), JPEG (Joint Photographic Experts Group), RSS (Rich Site Summary, often called Really Simple Syndication), MRSS (Media RSS) and MPEG (Moving Pictures Expert Group). With the advent of HTML5 (5th version of Hypertext Markup Language), even more delivery methods have been made available to our clients, many of whom have found any one or a combination of these formats to be easily integrated into their products. Nevertheless, we have also produced customized data formats and visualizations to the exact and specific requirements of our clients/partners, which, we believe ensures a higher level of reliability and ease of implementation.
Market demand, opportunity and technology converge at a single point in time, and Data Call continues hold its position. Our integrity persistently builds our business. Digital signage platforms steadily evolve to meet mass market requirements, costs for hardware and software are falling to the point of becoming commodities and the markets for digital signage are clarifying through historical trial and error.
Business Operations
In March of 2017, we released our Direct Lynk Manager (DLManager) customer portal at the Digital Signage Expo in Las Vegas. The DLManager incorporates the Direct Lynk Media platform with major enhancements and options that enable the client to self-serve in a webstore environment. This is a moderated space that allows proper “white glove” treatment by our staff that our clients have come to expect and appreciate. Once the client is comfortable with navigation of the portal, they may then set up multiple groups and displays within their account for testing results in a demo fashion free of charge. Upon completion of their content selections and distribution points, the client may purchase the proper number of licenses needed to support their sections through various plans offered within the portal.
Some of the current types of data and information, for which a client may subscribe to through the Direct Lynk System, in multiple formats include:
| ● | Headline News top world and national news headlines; |
| ● | Business News top business headlines; |
| ● | Financial Highlights world-based financial indicators ; |
| ● | Entertainment News top entertainment headlines; |
| ● | Health/Science News top science/health headlines; |
| ● | Strange News - latest off-beat news headlines; |
| ● | Sports Headlines top sports headlines |
| - AP News Minute Video |
| 15 |
| - AP This Day In History Videos | |
| - AP Entertainment Minute Videos | |
| ● | Latest Sports Lines - latest sports odds for NFL, NBA, NHL, NCAA Football and NCAA Basketball; |
| ● | National Football League latest game schedule and in-game updates; |
| ● | National Basketball Association - latest game schedule and in-game updates; |
| ● | Major League Baseball - latest game schedule and in-game updates; |
| ● | National Hockey League - latest game schedule and in-game updates; |
| ● | NCAA Football - latest game schedule and in-game updates; |
| ● | NCAA Men’s Basketball - latest game schedule and in-game updates; |
| ● | Professional Golf Association top 10 leaders continuously updated throughout the four-day tournament; |
| ● | NASCAR top 10 race positions updated every 20 laps throughout the race; |
| ● | Traffic Mapping; |
| ● | Animated Doppler Radar and Forecast Maps; |
| ● | Listings of the day’s horoscopes; |
| ● | Listings of the birthdays of famous persons born on each day; |
| ● | Health and Wellness |
| ● | Listings of historical events which occurred on each day in history; and |
| ● | Localized Traffic and Weather Forecasts. |
We continually add different types of content per client requests. We provide our DLM services to our clients and other potential customers through the Internet. All DLM Services are real-time information services providing a wide range of up-to-date information for display. These services are designed to work concurrently with customers’ existing digital signage systems. The Direct Lynk Messenger product is scheduled to be sunset within the next 12 months, as DLMedia gradually moves into a legacy status with the DLManager portal taking the forefront.
Since our inception in 2002, we have come to deeply understand that this industry provides an exciting platform for advertisers, including our clients, to promote, inform, educate, and entertain their customers and employees regarding their business products, services, and corporate communications. Through Digital Signage, and Digital Out of Home (DOOH) businesses can use a single display or a complex, networked series of displays and video walls to market their products and services directly at their facilities and elsewhere to their customers and employees in real time. Additionally, because the core of Digital Signage advertising takes place in real time, businesses can change their marketing and messaging efforts literally from moment to moment and over the course of a day or such other period as they may determine.
We believe that the ability of our clients to display in real-time, the information and content we deliver, better allows our clients to tailor their products, services, advertising and messaging to individual and target-group customers, thereby advertising and offering, for example, inventory and sales discounts that may be designed to appeal to those individual customers and target customer groups, increasing sales and revenues. We believe that the benefits of on-site, real-time Digital Signage displays compared to regular print or video advertising are substantial and include, among other advantages, being able to immediately change digitally-displayed images/advertisements depending on our client’s customers own situation, not simply being restricted by in-store print circulars produced days, weeks or even months in advance, which may become stale or obsolete prior to or shortly after publication and dissemination.
We specialize in enabling our clients to create their own Digital Signage content feeds which are delivered online directly to their chosen, electronic digital display devices at their various facilities. The only requirements our clients must have are: (i) a supported, third-party Digital Signage or Kiosk equipment solution - through a CMS or a standalone player, or similar device, which receives the data from our servers online; and (ii) an Internet connection. Our DLM System is supported by various, readily available third-party systems, varying in costs from inexpensive monthly cloud-based licenses to much more extensive and expensive content management/playback systems. Our Systems allow customers to select from their pre-determined data and information subscriptions offered. We enable our clients to also select location specific content they wish to receive based on how and where their Digital Signage network is configured.
| 16 |
In December of 2017 the company completed the arduous task of reconstructing our back-end systems architecture. This task was initialized to exploit the latest technology advances within our space, utilizing our data center efficiencies to further streamline our processes. One of the greater culminations of this effort yielded the Data Call API (Application Programming Interface) allowing our enterprise channel partners to embed our products within their offerings to further widen our reach.
Data Call continues to grow its client base through relationships that are gained through industry events such as seminars and trade shows. Our company has become a leader in syndicated content and custom content development for Digital Signage. Our licensed content is utilized on thousands of screens in hundreds of deployments. We are truly excited of our continued growth through our resellers, CMS manufacturers and end users.
Results of Operations
The following discussion should be read in conjunction with our financial statements.
During the last twelve months, the Company has implemented cost management measurements to review monthly expenditures. We will continue these efforts to streamline operations, as we focus on increasing sales and gross revenues over the next twelve months. We do not currently have any plans to increase our monthly expenditures or number of employees. We currently offer our Direct Lynk Messenger and DLMedia services to our clients and other potential customers through the Internet. Both DLM Services are Digital Signage products and real-time information services which provides a wide range of up-to-date information for display. Both DLM services are able to work concurrently with customers’ existing digital signage systems. The Direct Lynk Messenger product is slowly becoming a legacy product with the DLMedia product in the forefront.
We continually add subscribers for our technology throughout and intend to build and increase such subscribers moving forward.
Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020
Our revenues for the three months ended June 30, 2021 were $151,837, compared to $144,011 for the three-month period ended June 30, 2020, representing an increase of $7,826 or approximately 5%. The increase in revenues was mainly due to customers increasing their subscriptions after covid.
Costs of sales for the three months ended June 30, 2021 were $58,393 compared to $48,889 for the three-month period ended June 30, 2020, cost of sales for the quarter increased $9,504 These costs are related to the licensing and royalty expense increases due to the covid.
Gross margins for the three months ended June 30, 2021 were $93,444 compared to $95,122 as of June 30, 2020, or 61.5% for the three-month period ended June 30, 2021 as compared to 66.1% for the three-month period ending June 30, 2020.
Operating expenses for the three months ended June 30, 2021 were $88,884 compared to $82,819 for the three-month period ended June 30, 2020, representing an increase of $6,065 from the same period in the prior year. Net income for the three months ended June 30, 2021 was $4,561 compared to a net income of $11,351 for the three-month period ended June 30, 2020 or a net change of $(6,790). The Company’s net income was due to our continuing efforts to reduce costs during this pandemic crisis.
Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020
Our revenues for the six months ended June 30, 2021 were $306,749, compared to $302,619 for the six-month period ended June 30, 2020, representing an increase of $4,130 or approximately 1.4%. The increase in revenues was mainly due to customers increasing their subscriptions.
Costs of sales for the six months ended June 30, 2021 were $111,408, compared to $98,434 for the same period of the prior year. The increase was due the costs related to the licensing and royalty expense required to provide the subscription services.
Gross margins for the six months ended June 30, 2021 were $195,341 compared to $204,185 as of June 30, 2020, or 63.7% for the six-month period ended June 30, 2021 as compared to 67.5% for the six-month period ending June 30, 2020.
| 17 |
Operating expenses for the six months ended June 30,2021 were $189,675 compared to $186,991 for the six-month period ended June 30, 2020, representing an increase of $2,684 from the same period in the prior year. Net income for the six months ended June 30, 2021 was $5,667 compared to a net income of $14,877 for the six-month period ended June 30, 2020. The decrease was due to the increase in Cost of Goods.
Liquidity and Capital Resources
As of June 30, 2021, we had total current assets of $95,181, consisting of $27,833 in cash and $67,348 in accounts receivable. had total current liabilities of $53,609 consisting or $28,269 in accounts payable, $21,391 in accrued interest, $349 in accrued expenses, and $3,600 in notes payable.
At June 30, 2021, we had a positive working capital of $41,572 and an accumulated deficit since inception of $9,981,836. The Company had net cash provided by operating activities of $3,326 during the six-month period ended June 30, 2021, which was mainly due to a net income of $5,667, an increase in accounts receivable of $2,044, an increase in stock compensation expense and options expense of $1,774, depreciation expense of $1,614 and a decrease in accounts payable of $1,287 and accrued interest expense of $2,400.
We had investing activities of $0 during the six-month period ended June 30, 2021 related to the purchase of property and equipment. We used $3,600 in our financing activities during the six months ended June 30, 2021 for the repayment of a shareholder notes payable.
Due to our strong financial position we do not see a need to raise additional funds. We will continue to generate sufficient revenues and generate new revenues to support our operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Back to Table of Contents
A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.
ITEM 4. CONTROLS AND PROCEDURES Back to Table of Contents
(a) Evaluation of Disclosure Controls and Procedures.
Our management, with the participation of our Principal Executive Officer and our Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2021 (the “Evaluation Date”). The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2020, our Principal Executive Officer and Principal Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective at the reasonable assurance level as described in our Annual Report on Internal Control Over Financial Reporting filed in our Annual Report on Form 10-K.
Our principal executive officers do not expect that our disclosure controls or internal controls will prevent all errors and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive officers have determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
(b) Changes in Internal Control over Financial Reporting
There have been no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) or in other factors that occurred during the three-month period ended June 30, 2021 that have significantly affected, or are reasonably likely to significantly affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS Back to Table of Contents
None.
ITEM 1A. RISK FACTORS Back to Table of Contents
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1. Description of Business, subheading Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K is not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Back to Table of Contents
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES Back to Table of Contents
None.
ITEM 4. MINE SAFETY DISCLOSURE Back to Table of Contents
None.
ITEM 5. OTHER INFORMATION Back to Table of Contents
None.
ITEM 6. EXHIBITS Back to Table of Contents
(a) The following documents are filed as exhibits to this report on Form 10-Q or incorporated by reference herein. Any document incorporated by reference is identified by a parenthetical reference to the SEC filing that included such document.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned.
DATA CALL TECHNOLOGIES INC.
| By: | /s/ Timothy E. Vance | |
| Timothy E. Vance | ||
| Chief Executive Officer and Chairman | ||
| (Principal Executive Officer) | ||
| Date: | August 6, 2021 | |
| By: | /s/ Gary Woerz | |
| Gary Woerz | ||
| Chief Financial Officer | ||
| (Principal Financial and Principal Accounting Officer) | ||
| Date: | August 6, 2021 |
| 20 |
Exhibit 31.1
CERTIFICATION
I, Timothy E. Vance, certify that:
1. I have reviewed this quarterly report of Data Call Technologies, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;
4. The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as 4efined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the issuer’s most recent fiscal quarter (the issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and
5. The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.
Date: August 6, 2021
| /s/ Timothy E. Vance | |
| CEO |
Exhibit 31.2
CERTIFICATION
I, Gary D. Woerz, certify that:
1. I have reviewed this quarterly report of Data Call Technologies, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;
4. The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as 4efined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the issuer’s most recent fiscal quarter (the issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and
5. The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.
Date: August 6, 2021
| /s/ Gary D. Woerz | |
| CFO |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Data Call Technologies, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2021 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Timothy E. Vance, CEO of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Timothy E. Vance | |
| Timothy E. Vance | |
| CEO | |
| Dated: August 6, 2021 |
A signed original of this written statement required by Section 906 has been provided to Data Call Technologies, Inc. and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Data Call Technologies, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2021 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Gary Woerz, CFO and Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Gary D. Woerz | |
| Gary D. Woerz | |
| CFO | |
| Dated: August 6, 2021 |
A signed original of this written statement required by Section 906 has been provided to Data Call Technologies, Inc. and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Condensed Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Common stock, par value | $ 0.001 | $ 0.001 |
| Common stock, shares authorized | 490,000,000 | 490,000,000 |
| Common stock, shares issued | 156,998,515 | 156,998,515 |
| Common stock, shares outstanding | 156,998,515 | 156,998,515 |
| Series A Convertible Preferred Stock [Member] | ||
| Preferred stock, par value | $ 0.001 | $ 0.001 |
| Preferred stock, par value | 10,000,000 | 10,000,000 |
| Preferred stock, convertible percentage | 12.00% | 12.00% |
| Preferred stock, shares issued | 800,000 | 800,000 |
| Preferred stock, shares outstanding | 800,000 | 800,000 |
| Series B Convertible Preferred Stock [Member] | ||
| Preferred stock, par value | $ 0.001 | $ 0.001 |
| Preferred stock, par value | 1,000,000 | 1,000,000 |
| Preferred stock, shares issued | 10,000 | 10,000 |
| Preferred stock, shares outstanding | 10,000 | 10,000 |
Condensed Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Revenues | ||||
| Sales | $ 151,837 | $ 144,011 | $ 306,749 | $ 302,619 |
| Cost of sales | 58,393 | 48,889 | 111,408 | 98,434 |
| Gross margin | 93,444 | 95,122 | 195,341 | 204,185 |
| Selling, general and administrative expenses | 88,077 | 82,146 | 188,061 | 185,645 |
| Depreciation and amortization expense | 807 | 673 | 1,614 | 1,346 |
| Total operating expenses | 88,884 | 82,819 | 189,675 | 186,991 |
| Other (income) expense | ||||
| Interest income | (1) | (1) | (1) | |
| Interest expense | 952 | 2,318 | ||
| Total expenses | 88,887 | 83,771 | 189,676 | 189,308 |
| Net income before income taxes | 4,561 | 11,351 | 5,667 | 14,877 |
| Provision for income taxes | ||||
| Net income | $ 4,561 | $ 11,351 | $ 5,667 | $ 14,877 |
| Net income per common share - basic and diluted | $ 0.00 | $ 0.00 | $ 0.00 | $ 0.00 |
| Weighted average common shares: | ||||
| Basic | 156,998,515 | 156,498,515 | 156,998,515 | 156,498,515 |
| Diluted | 156,998,515 | 162,976,248 | 156,998,515 | 162,976,248 |
Condensed Statement of Stockholders' Equity (Unaudited) - USD ($) |
Preferred Stock A [Member] |
Preferred Stock B [Member] |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Total |
|---|---|---|---|---|---|---|
| Balance at Dec. 31, 2019 | $ 800 | $ 10 | $ 156,498 | $ 9,864,000 | $ (9,965,049) | $ 56,259 |
| Balance, shares at Dec. 31, 2019 | 800,000 | 10,000 | 156,498,515 | |||
| Shares issued for services | $ 500 | 5,048 | 5,548 | |||
| Shares issued for services, shares | 500,000 | |||||
| Net Income (loss) | (22,454) | (22,454) | ||||
| Balance at Dec. 31, 2020 | $ 800 | $ 10 | $ 156,998 | 9,869,048 | (9,987,503) | 39,353 |
| Balance, shares at Dec. 31, 2020 | 800,000 | 10,000 | 156,998,515 | |||
| Shares issued for services | 1,774 | 1,774 | ||||
| Net Income (loss) | 5,667 | 5,667 | ||||
| Balance at Jun. 30, 2021 | $ 800 | $ 10 | $ 156,998 | $ 9,870,822 | $ (9,981,836) | $ 46,794 |
| Balance, shares at Jun. 30, 2021 | 800,000 | 10,000 | 156,998,515 |
Summary of Significant Accounting Policies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies | (1) Summary of Significant Accounting Policies
Organization, Ownership and Business
Data Call Technologies, Inc. (the “Company”) was incorporated under the laws of the State of Nevada in 2002. The Company’s mission is to integrate cutting-edge information delivery solutions that are currently deployed by the media, and put them within the control of retail and commercial enterprises. The Company’s software and services put its clients in control of real-time advertising, news, and other content, including emergency alerts.
The accompanying unaudited financial statements have been prepared in accordance with U. S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six-month period ended June 30, 2021 are not indicative of the results that may be expected for the year ending December 31, 2021.
As contemplated by the Securities and Exchange Commission (SEC) under Rules of Regulation S-X, the accompanying financial statements and related footnotes have been condensed and do not contain certain information that will be included in the Company’s annual financial statements and footnotes thereto. For further information, refer to the Company’s audited consolidated financial statements and related footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2020.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid investment instruments purchased with original maturities of three months or less to be cash equivalents. There were no cash equivalents as of June 30, 2021 or December 31, 2020.
Revenue Recognition
On January 1 2018, we adopted Accounting Standards Update No. 2014-09, (Revenue from Contracts with Customers) (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC), Revenue Recognition. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606. The impact of adopting the new revenue standard was not material to our financial statements and there was no adjustment to beginning retained earnings on January 1, 2018.
Topic Under 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
We determine revenue recognition through the following steps:
Company recognizes revenues based on monthly fees for services provided to customers. Some customers prepay for annual services and the Company defers such amounts and amortizes them into revenues as the service is provided.
Accounts Receivable
Accounts receivable consist primarily of trade receivables. The Company provides an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each customer’s trade accounts receivable. The allowance for doubtful trade receivables was $0 as of June 30, 2021 and December 31, 2020 as we believe all of our receivables are fully collectable.
Property, Equipment and Depreciation
Property and equipment are recorded at cost less accumulated depreciation. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, with any resultant gain or loss being recognized as a component of other income or expense. Depreciation is computed over the estimated useful lives of the assets (3-5 years) using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes. Maintenance and repairs are charged to operations as incurred.
Advertising Costs
The cost of advertising is expensed as incurred.
Research and Development
Research and development costs are expensed as incurred.
Product Development Costs
Product development costs consist of cost incurred to develop the Company’s website and software for internal and external use. All product development costs are expensed as incurred.
Income Taxes
The Company is a taxable entity and recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect when the temporary differences reverse. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date of the rate change. A valuation allowance is used to reduce deferred tax assets to the amount that is more likely than not to be realized.
Use of Estimates
The preparation of financial statements in conformity with 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 date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could vary from those estimates.
Beneficial Conversion Feature
Convertible debt includes conversion terms that are considered in the money compared to the market price of the stock on the date of the related agreement. The Company calculates the beneficial conversion feature and records a debt discount with the amount being amortized to interest expense over the term of the note.
Management’s Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses. Actual results could differ from these estimates.
We account for stock-based compensation in accordance with “FASB ASC 718-10.” Stock-based compensation expense recognized during the period is based on the value of the portion of share-based awards that are ultimately expected to vest during the period. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The fair value of restricted stock is determined based on the number of shares granted and the closing price of the Company’s common stock on the date of grant. Compensation expense for all share-based payment awards is recognized using the straight-line amortization method over the vesting period.
Fair Value of Financial Instruments
The Company estimates the fair value of its financial instruments using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the Company estimates of fair value are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The use of different market assumption and/or estimation methodologies may have a material effect on the estimated fair value amounts. The interest rates payable by the Company on its notes payable approximate market rates. The Company believes that the fair value of its financial instruments comprising accounts receivable, notes receivable, accounts payable, and notes payable approximate their carrying amounts.
On January 1, 2009, the Company adopted an accounting standard for applying fair value measurements to certain assets, liabilities and transactions that are periodically measured at fair value. The adoption did not have a material effect on the Company’s financial position, results of operations or cash flows. In August 2009, the FASB issued an amendment to the accounting standards related to the measurement of liabilities that are routinely recognized or disclosed at fair value. This standard clarifies how a company should measure the fair value of liabilities, and that restrictions preventing the transfer of a liability should not be considered as a factor in the measurement of liabilities within the scope of this standard. This standard became effective for the Company on October 1, 2009. The adoption of this standard did not have a material impact on the Company’s financial statements. The fair value accounting standard creates a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below with Level 1 having the highest priority and Level 3 having the lowest.
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.
Level 3: Valuations derived from valuation techniques in which one or more significant inputs are unobservable.
The following table presents the Company’s Assets and Liabilities within the fair value hierarchy utilized to measure fair value on a recurring basis as of June 30, 2021 and December 31, 2020:
Recent Accounting Pronouncements
In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases. The amendments in ASU 2018-10 provide additional clarification and implementation guidance on certain aspects of the previously issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) and have the same effective and transition requirements as ASU 2016-02. Upon the effective date, ASU 2018-10 will supersede the current lease guidance in ASC Topic 840, Leases. Under the new guidance, lessees will be required to recognize for all leases, lease with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make payments arising from a lease, measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2018-10 is effective for private companies and emerging growth public companies for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. During the year ended December 31, 2019 the Company assessed the impact this guidance had on its financial statements and concluded that at present ASU No. 2018-10 has no impact on its financial statements due to not having any commitment to stay in our property longer than a year.
In February 2018, the FASB issued Accounting Standards Update No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02), which allows companies to reclassify stranded tax effects resulting from the Tax Act, from accumulated other comprehensive income to retained earnings. The new standard became effective on January 1, 2019, with early adoption permitted. Tax effects are not anticipated as a result of this standard
The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information.
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Related Party Transactions |
6 Months Ended |
|---|---|
Jun. 30, 2021 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | (2) Related Party Transactions
During the second quarter of 2018, the Company issued unregistered shares as follows: (i) restricted shares to Tim Vance, the Company’s CEO, in connection with the execution of a new 5 year employment agreement; and restricted shares to Gary Woerz, the Company’s CFO, in connection with the execution of a new 5 year employment agreement. The restricted shares were valued at $ per share using the closing price of the stock on the date of grant. Total expense associated with the issuances is calculated at $ to be recognized over the 5-year term of the agreements. During the three and six months ended June 30, 2021, the Company recorded $ and $, respectively, in stock-based compensation expense. During the three and six months ended June 30, 2020, the Company recorded $ and $, respectively, in stock-based compensation expense. The April 30, 2018 employment agreements calls for a 5-year term ending April 30, 2023, annual compensation of $98,000 per year for services as CEO, annual compensation of $57,200 per year for services as CFO.
As of June 30, 2021, and December 31, 2020, notes payable to related party had a balance of $3,600 and $7,200. The note in September, 2020 was renegotiated for principal and interest, therefore due to the terms of the agreement the note is no longer considered past due or in default. The interest for the note payable will no longer be calculated annually and will no longer be accrued.
During the six months ended June 30, 2021 and 2020 and repaid a total $3,600 and $4,920, respectively, to related parties on various note payables. During the six months ended June 30, 2021 and 2020 the Company made interest payments of $2,400 and $2,318, respectively.
As of June 30, 2021 and December 31, 2020 the total due to management for past accrued salaries is $349 and $337, respectively.
As of June 30, 2021 and December 31, 2020, the total due to management represented by prepayment of expenses included in accounts payable is $1,705 and $8,348, respectively.
|
Capital Stock, Warrants and Options |
6 Months Ended |
|---|---|
Jun. 30, 2021 | |
| Equity [Abstract] | |
| Capital Stock, Warrants and Options | (3) Capital Stock, Warrants and Options
The Company is authorized to issue up to shares of Preferred Stock, $ par value per share, of which shares of Series A convertible preferred stock are outstanding at June 30, 2021 and December 31, 2020. The Preferred Stock may be issued in one or more series, the terms of which may be determined at the time of issuance by the Board of Directors, without further action by stockholders, and may include voting rights (including the right to vote as a series on particular matters), preferences as to dividends and liquidation, conversion, redemption rights and sinking fund provisions.
Each share of Series A Preferred Stock shall bear a preferential dividend of twelve percent (12%) per year and is convertible into a number shares of the Company’s common stock, par value $ per share (“Common Stock”) based upon Fifty (50%) percent of the average closing bid price of the Common Stock During the ten (10) day period prior to the conversion. The Company has not declared or accrued any dividends and as of June 30, 2021 or December 31, 2020. Unaccrued and undeclared dividends were $2,400 and $2,400 as of June 30, 2021 and June 30, 2020, respectively.
During the quarter ended September 30, 2014, the Company amended its Articles of Incorporation to authorize shares of Series B Preferred Stock at a par value of $ and issued shares. The Series B shares were valued at $76,000 and were expensed during 2014. The Series B Preferred Stock may be issued to one or series by the terms of which may be and may include preferences as to dividends and liquidation, conversion, redemption rights and sinking fund provisions. The Series B Preferred Shares have the right to vote in the aggregate, on all shareholder matters votes equal to 51% of the total shareholder vote on any and all shareholder matters. The Series B Preferred Stock will be entitled to this 51% voting right no matter how many shares of common stock or other voting stock of Data Call Technology stock is issued and outstanding in the future.
During the second quarter of 2018, the Company issued unregistered shares as follows: (i) restricted shares to Tim Vance, the Company’s CEO, in connection with the execution of a new 5-year employment agreement; and restricted shares to Gary Woerz, the Company’s CFO, in connection with the execution of a new 5 year employment agreement. The restricted shares were valued at $ per share using the closing price of the stock on the date of grant. Total expense associated with the issuances is calculated at $ to be recognized over the 5-year term of the agreements. During the three and six months ended June 30, 2021, the Company recorded $887 and $1,774, respectively, in stock-based compensation expense. During the three and six months ended June 30, 2020, the Company recorded $ and $, respectively, in stock-based compensation expense. The April 30, 2018 employment agreements calls for a 5-year term ending April 30, 2023, annual compensation of $98,000 per year for services as CEO, annual compensation of $57,200 per year for services as CFO.
The Company is authorized to issue up to shares of Common Stock, of which shares were issued and outstanding as of June 30, 2021 and December 31, 2020.
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Property and Equipment |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property and Equipment | (4) Property and Equipment
During the six-month period ended June 30, 2020, the company paid $2,662 for the additions to PP&E.
Major classes of property and equipment together with their estimated useful lives, consisted of the following:
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Shareholder Notes Payable |
6 Months Ended |
|---|---|
Jun. 30, 2021 | |
| Debt Disclosure [Abstract] | |
| Shareholder Notes Payable | (5) Shareholder Notes Payable
As of June 30, 2021 and December 31, 2020, the Company had short-term notes due to a related party of $3,600 and $7,200, respectively. The Company made repayments on shareholder notes payable during the quarter ended June 30, 2021 and 2020 of $3,600 and $4,920, respectively.
Payments of interest during the six-month period ended June 30, 2021 totaled $2,400 (2020: $2,318).
|
Subsequent Events and Contingencies |
6 Months Ended |
|---|---|
Jun. 30, 2021 | |
| Subsequent Events [Abstract] | |
| Subsequent Events and Contingencies | (6) Subsequent Events and Contingencies
The Company has evaluated subsequent events from the date on the balance sheet through the date these financial statements are being filed with the Securities and Exchange Commission. No additional material events or transactions have occurred during this subsequent event reporting period which required recognition or disclosure in the financial statements. |
Summary of Significant Accounting Policies (Policies) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
| Organization, Ownership and Business | Organization, Ownership and Business
Data Call Technologies, Inc. (the “Company”) was incorporated under the laws of the State of Nevada in 2002. The Company’s mission is to integrate cutting-edge information delivery solutions that are currently deployed by the media, and put them within the control of retail and commercial enterprises. The Company’s software and services put its clients in control of real-time advertising, news, and other content, including emergency alerts.
The accompanying unaudited financial statements have been prepared in accordance with U. S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six-month period ended June 30, 2021 are not indicative of the results that may be expected for the year ending December 31, 2021.
As contemplated by the Securities and Exchange Commission (SEC) under Rules of Regulation S-X, the accompanying financial statements and related footnotes have been condensed and do not contain certain information that will be included in the Company’s annual financial statements and footnotes thereto. For further information, refer to the Company’s audited consolidated financial statements and related footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2020.
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| Cash and Cash Equivalents | Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid investment instruments purchased with original maturities of three months or less to be cash equivalents. There were no cash equivalents as of June 30, 2021 or December 31, 2020.
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| Revenue Recognition | Revenue Recognition
On January 1 2018, we adopted Accounting Standards Update No. 2014-09, (Revenue from Contracts with Customers) (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC), Revenue Recognition. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606. The impact of adopting the new revenue standard was not material to our financial statements and there was no adjustment to beginning retained earnings on January 1, 2018.
Topic Under 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
We determine revenue recognition through the following steps:
Company recognizes revenues based on monthly fees for services provided to customers. Some customers prepay for annual services and the Company defers such amounts and amortizes them into revenues as the service is provided.
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| Accounts Receivable | Accounts Receivable
Accounts receivable consist primarily of trade receivables. The Company provides an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each customer’s trade accounts receivable. The allowance for doubtful trade receivables was $0 as of June 30, 2021 and December 31, 2020 as we believe all of our receivables are fully collectable.
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| Property, Equipment and Depreciation | Property, Equipment and Depreciation
Property and equipment are recorded at cost less accumulated depreciation. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, with any resultant gain or loss being recognized as a component of other income or expense. Depreciation is computed over the estimated useful lives of the assets (3-5 years) using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes. Maintenance and repairs are charged to operations as incurred.
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| Advertising Costs | Advertising Costs
The cost of advertising is expensed as incurred.
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| Research and Development | Research and Development
Research and development costs are expensed as incurred.
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| Product Development Costs | Product Development Costs
Product development costs consist of cost incurred to develop the Company’s website and software for internal and external use. All product development costs are expensed as incurred.
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| Income Taxes | Income Taxes
The Company is a taxable entity and recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect when the temporary differences reverse. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date of the rate change. A valuation allowance is used to reduce deferred tax assets to the amount that is more likely than not to be realized.
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| Use of Estimates | Use of Estimates
The preparation of financial statements in conformity with 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 date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could vary from those estimates.
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| Beneficial Conversion Feature | Beneficial Conversion Feature
Convertible debt includes conversion terms that are considered in the money compared to the market price of the stock on the date of the related agreement. The Company calculates the beneficial conversion feature and records a debt discount with the amount being amortized to interest expense over the term of the note.
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| Management’s Estimates and Assumptions | Management’s Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses. Actual results could differ from these estimates.
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| Stock-Based Compensation |
We account for stock-based compensation in accordance with “FASB ASC 718-10.” Stock-based compensation expense recognized during the period is based on the value of the portion of share-based awards that are ultimately expected to vest during the period. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The fair value of restricted stock is determined based on the number of shares granted and the closing price of the Company’s common stock on the date of grant. Compensation expense for all share-based payment awards is recognized using the straight-line amortization method over the vesting period.
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| Fair Value of Financial Instruments | Fair Value of Financial Instruments
The Company estimates the fair value of its financial instruments using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the Company estimates of fair value are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The use of different market assumption and/or estimation methodologies may have a material effect on the estimated fair value amounts. The interest rates payable by the Company on its notes payable approximate market rates. The Company believes that the fair value of its financial instruments comprising accounts receivable, notes receivable, accounts payable, and notes payable approximate their carrying amounts.
On January 1, 2009, the Company adopted an accounting standard for applying fair value measurements to certain assets, liabilities and transactions that are periodically measured at fair value. The adoption did not have a material effect on the Company’s financial position, results of operations or cash flows. In August 2009, the FASB issued an amendment to the accounting standards related to the measurement of liabilities that are routinely recognized or disclosed at fair value. This standard clarifies how a company should measure the fair value of liabilities, and that restrictions preventing the transfer of a liability should not be considered as a factor in the measurement of liabilities within the scope of this standard. This standard became effective for the Company on October 1, 2009. The adoption of this standard did not have a material impact on the Company’s financial statements. The fair value accounting standard creates a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below with Level 1 having the highest priority and Level 3 having the lowest.
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.
Level 3: Valuations derived from valuation techniques in which one or more significant inputs are unobservable.
The following table presents the Company’s Assets and Liabilities within the fair value hierarchy utilized to measure fair value on a recurring basis as of June 30, 2021 and December 31, 2020:
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| Recent Accounting Pronouncements | Recent Accounting Pronouncements
In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases. The amendments in ASU 2018-10 provide additional clarification and implementation guidance on certain aspects of the previously issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) and have the same effective and transition requirements as ASU 2016-02. Upon the effective date, ASU 2018-10 will supersede the current lease guidance in ASC Topic 840, Leases. Under the new guidance, lessees will be required to recognize for all leases, lease with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make payments arising from a lease, measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2018-10 is effective for private companies and emerging growth public companies for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. During the year ended December 31, 2019 the Company assessed the impact this guidance had on its financial statements and concluded that at present ASU No. 2018-10 has no impact on its financial statements due to not having any commitment to stay in our property longer than a year.
In February 2018, the FASB issued Accounting Standards Update No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02), which allows companies to reclassify stranded tax effects resulting from the Tax Act, from accumulated other comprehensive income to retained earnings. The new standard became effective on January 1, 2019, with early adoption permitted. Tax effects are not anticipated as a result of this standard
The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information. |
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Summary of Significant Accounting Policies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
| Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents the Company’s Assets and Liabilities within the fair value hierarchy utilized to measure fair value on a recurring basis as of June 30, 2021 and December 31, 2020:
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Property and Equipment (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Property, Plant and Equipment | Major classes of property and equipment together with their estimated useful lives, consisted of the following:
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Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) |
Jun. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Fair Value, Inputs, Level 1 [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
| Fair value assets and liabilities | $ 0 | $ 0 |
| Fair Value, Inputs, Level 2 [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
| Fair value assets and liabilities | 0 | 0 |
| Fair Value, Inputs, Level 3 [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
| Fair value assets and liabilities | $ 0 | $ 0 |
Summary of Significant Accounting Policies (Details Narrative) - USD ($) |
6 Months Ended | |
|---|---|---|
Jun. 30, 2021 |
Dec. 31, 2020 |
|
| Property, Plant and Equipment [Line Items] | ||
| Cash equivalents | $ 0 | $ 0 |
| Allowance for doubtful trade receivables | $ 0 | $ 0 |
| Minimum [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Estimated useful lives of property and equipment | 3 years | |
| Maximum [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Estimated useful lives of property and equipment | 5 years |
Property and Equipment (Details Narrative) - USD ($) |
6 Months Ended | |
|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Property, Plant and Equipment [Abstract] | ||
| Purchase of property and equipment | $ 2,662 | |
Shareholder Notes Payable (Details Narrative) - USD ($) |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Dec. 31, 2020 |
|
| Debt Disclosure [Abstract] | |||
| Short-term note payable to related party | $ 3,600 | $ 7,200 | |
| Principal payment on debt - related party | 3,600 | $ 4,920 | |
| Interest payments | $ 2,400 | $ 2,318 | |
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