10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2018
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______.

Commission File Number: 333-183246

STERLING CONSOLIDATED CORP.

(Exact name of registrant as specified in its charter)

Nevada	45-1840913
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1105 Green Grove Road

Neptune, New Jersey 07753

(Address of principal executive offices)

(732) 918-8004

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year,

if changed since last report)

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. Yes x No ¨

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). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer x	Smaller reporting company x
	Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨  No x

As of November 19, 2018 there were 41,465,540 shares of common stock, $0.001 par value issued and outstanding.

STERLING CONSOLIDATED CORP.

TABLE OF CONTENTS

FORM 10-Q REPORT

September 30, 2018

		Page  Number
PART I - FINANCIAL INFORMATION		F-1
Item 1.	Financial Statements.	F-1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	3
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	7
Item 4.	Controls and Procedures.	7
PART II - OTHER INFORMATION		8
Item 1.	Legal Proceedings.	8
Item 1A.	Risk Factors.	8
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	8
Item 3.	Defaults Upon Senior Securities.	8
Item 4.	Mine Safety Disclosures	8
Item 5.	Other Information.	9
Item 6.	Exhibits.	9
SIGNATURES		10

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

STERLING CONSOLIDATED CORP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2018			2017
	(Unaudited)			(Revised)
ASSETS
Current assets
Cash and cash equivalents	$	64,077		$	36,888
Account receivable, net		1,012,938			756,914
Inventory, net		2,136,636			2,505,175
Notes receivable and other current assets		25,016			37,861
Derivative asset		172			-
Total current assets		3,238,839			3,336,838
Property and equipment, net		1,640,212			1,751,216
Intangible assets, net		73,065			86,007
Deferred tax asset		571,264			533,581
Total assets	$	5,523,380		$	5,707,642
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses	$	1,259,773		$	1,272,926
Bank line of credit		828,858			828,858
Other liabilities		29,822			62,393
Derivative liability		-			2,176
Current portion of long-term notes payable, related party		52,702			52,702
Current portion of long-term notes payable		1,069,136			1,089,578
Total current liabilities		3,240,291			3,308,633
Other liabilities
Long-term notes payable, related parties		1,506,017			1,628,579
Long-term notes payable		12,645			15,577
Total other liabilities		1,518,662			1,644,156
Total liabilities		4,758,953			4,952,789
Stockholders' equity
Preferred stock, $0.001 par value; 10,000,000 shares authorized, no shares issued		-			-
Common stock, $0.001 par value; 200,000,000 shares authorized, 41,465,540 and 40,715,540 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively		41,466			40,716
Additional paid-in capital		2,060,068			1,963,318
Accumulated deficit		(1,337,107	)		(1,249,181	)
Total stockholders' equity		764,427			754,853
Total liabilities and stockholders' equity	$	5,523,380		$	5,707,642

See accompanying notes to consolidated financial statements

F-1

STERLING CONSOLIDATED CORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended September 30						For the Nine Months Ended September 30
	2018			2017			2018			2017
Revenues
O-rings and rubber product sales	$	1,678,243			1,537,617		$	4,913,040			4,794,900
Freight services		35,483			49,332			119,505			145,095
Total revenues		1,713,726		$	1,586,949			5,032,545		$	4,939,995
Cost of sales
Cost of goods		1,143,139			1,147,433			3,518,303			3,423,166
Cost of services		58,840			69,300			169,831			198,940
Total cost of sales		1,201,979			1,216,733			3,688,134			3,622,106
Gross profit		511,747			370,216			1,344,411			1,317,889
Operating expenses
Sales and marketing		81,898			59,312			232,535			168,126
General and administrative		343,424			368,147			1,007,286			1,026,566
Research and development		-			-			112,500			-
Total operating expenses		425,322			427,459			1,352,321			1,194,692
Operating income (loss)		86,425			(57,243	)		(7,910	)		123,197
Other income (expense)
Other income (expense)		(5,553	)		102,252			(1,037	)		116,746
Loss on sale of vehicle		-			-			-			(2,502	)
Gain on interest rate swap		(460	)		2,116			2,349			9,545
Loss on disposal of software		-			-			(20,498	)		-
Interest expense		(33,376	)		(40,181	)		(98,514	)		(115,437	)
Total other income (expense)		(39,389	)		64,187			(117,700	)		8,352
Income (loss) before provision for income taxes		47,036			6,944			(125,610	)		131,549
Provision (benefit) for income taxes		14,111			(76,217	)		(37,683	)		(26,113	)
Net income (loss)	$	32,925		$	83,161		$	(87,927	)	$	157,662
Net income (loss) per share of common stock:
Basic	$	0.00		$	0.00		$	(0.00	)	$	0.00
Fully diluted	$	0.00		$	0.00		$	(0.00	)	$	0.00
Weighted average number of shares outstanding
Basic		41,465,540			40,715,540			41,308,947			40,715,540
Fully diluted		52,265,540			40,715,540			41,308,947			40,715,540

See accompanying notes to consolidated financial statements

F-2

STERLING CONSOLIDATED CORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Nine Months Ended September 30
	2018			2017
Cash flows from operating activities
Net income (loss)	$	(87,927	)	$	157,662
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		103,448			101,385
Loss on disposal of software		20,498			-
Loss on sale of vehicle		-			2,502
Gain on interest rate swap		(2,349	)		(9,545	)
Stock for services		97,500			-
Changes in operating assets and liabilities:
Accounts receivable		(256,024	)		(246,129	)
Inventory		368,539			(207,323	)
Prepaids and other current assets		12,845			-
Deferred tax asset		(37,683	)		44,607
Accrued interest, related party		-			(35,285	)
Other assets		-			(18,373	)
Accounts payable and accrued interest payable		(13,153	)		318,366
Other liabilities		(32,570	)		(70,960	)
Net cash provided by operating activities		173,124			36,907
Cash flows from investing activities
Purchase of fixed and intangible assets		-			(32,984	)
Net cash used in investing activities		-			(32,984	)
Cash flows from financing activities
Net borrowing of bank line of credit		-			30,000
Payments on notes payable		(23,374	)		(65,084	)
Net paydown on related party note		(122,561	)		-
Net loan-related party		-			38,611
Net cash provided by (used in) financing activities		(145,935	)		3,527
Net change in cash and cash equivalents		27,189			7,450
Cash and cash equivalents at the beginning of period		36,888			6,814
Cash and cash equivalents at the end of period	$	64,077		$	14,264
Supplemental disclosures of cash flow information:
Cash paid for interest	$	98,514			115,437
Cash paid for taxes	$	750		$	750

See accompanying notes to consolidated financial statements

F-3

STERLING CONSOLIDATED CORP AND AFFILIATES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

NOTE 1 – BASIS OF PRESENTATION

The accompanying interim financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows as of and for the period ended, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2017 audited financial statements.  The results of operations for the periods ended September 30, 2018 and September 30, 2017 are not necessarily indicative of the operating results for the full years.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied by the Company in these condensed interim financial statements are the same as those applied by the Company in its audited consolidated financial statements as at and for the year ended December 31, 2017.

On January 1, 2018, we adopted the new accounting standard ASC 606, Revenue from Contracts with Customers, and all of the related amendments (“new revenue standard”). Under this method, we are required to recognize the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings. The adjustment was not material, and therefore was not made. This results in no restatement of prior periods, which continue to be reported under the accounting standards in effect for those periods. We expect the impact of the adoption of the new revenue standard to continue to be immaterial on an ongoing basis.

The impact of recording this change as of January 1, 2018 resulted in no change to deferred revenue at that date and no corresponding change in retained earnings. The impact of adopting the new revenue standard in 2018 did not create a material impact on our financial statements.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to the accounts receivable and sales allowances, fair values of financial instruments, useful lives of intangible assets and property and equipment, inventory valuations, income taxes, and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Inventories

Inventories, which are entirely comprised of finished goods, are stated at the lower of cost (based on the first in, first out method) or market. Cost does not include shipping and handling fees, which are charged directly to income. The Company provides for estimated losses from obsolete or slow-moving inventories, which is approximately 20% of the total inventory, and writes down the cost of inventory at the time such determinations are made. Reserves are estimated based upon inventory on hand, historical sales activity, industry trends, the business environment, and the expected net realizable value. The net realizable value is determined based upon current awareness of market prices.

Inventory Type	September 30, 2018			December 31, 2017
Finished goods	$	2,901,179		$	3,090,939
Raw materials		-			-
Work-in-progress		1,221			-
Inventory Reserve		(585,764	)		(585,764	)
Net Inventory	$	2,136,636		$	2,505,175

Revenue Recognition

The Company recognizes revenue based on Account Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, and all of the related amendments (“new revenue standard”). In the case of Sterling, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, shipment of the product has occurred, price is fixed or determinable and collectability of the resulting receivable is reasonably assured.  For provision of third-party freight services provided by Integrity, revenue is recognized on a gross basis in accordance with ASC 606. Revenue is generally recognized when the contracted goods arrive at their destination point. When revenues and expenses straddle a period end due to the time between shipment and delivery, Integrity allocates revenue between reporting periods based on relative transit time in each period with expenses recognized as incurred. Cost of goods is comprised of sale of o-rings and related rubber products. Freight services is comprised of freight forwarding and related services earned by Integrity and rental services is comprised of revenue from rental of commercial space to third parties.

F-4

STERLING CONSOLIDATED CORP AND AFFILIATES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2018

Basic and Diluted Earnings per Share

The Company has adopted ASC Update 2017-11, Earnings Per Share (Topic 260), (the “new pronouncement”) for the period ended March 31, 2018. This new pronouncement calls for a change in the accounting for “down round” feature equity linked instruments such as option, warrants and convertible notes. “Down round” features are features that result in the strike price being reduced on the basis of the pricing of future equity offerings. Previous accounting guidance required a fair value measurement each accounting period on an ongoing basis and treatment of the instrument as a derivative liability with the change in the value of the liability recognized on the income statement. The new pronouncement requires that the effect of the down round feature is treated as a dividend and as a reduction of income available to commons shareholders in basic EPS. While the Company has 10,800,000 options currently outstanding as of September 30, 2018, all of these options are at a fixed price and were fully vested upon issuance on December 27, 2018. Consequently, they do not have “down round” features and the earnings per share calculations are unaffected by the new pronouncement.

The computation of basic earnings (loss) per share of common stock is based on the weighted average number of shares outstanding during the periods presented. The computation of fully diluted earnings (loss) per share includes common stock equivalents outstanding at the balance sheet date. The Company had 10,800,000 and zero stock options and warrants that were considered as common stock equivalents as of September 30, 2018 and 2017, respectively. Due to a net loss of $87,927 for the 9 months ended September 30, 2018, the options had an anti-dilutive effect upon earnings per share for the 9 months ended September 30, 2018.

	For the 3 months ended September 30, 2018		For the 3 months ended September 30, 2017		For the 9 months ended September 30, 2018		For the 9 months ended September 30, 2017
Weighted average shares of common stock outstanding		41,465,540		40,715,540		41,308,947		40,715,540
Weighted average options outstanding		10,800,000		-		-		-
Fully diluted common stock equivalents for EPS calculation		52,265,540		40,715,540		41,308,947		40,715,540

Recent Accounting Pronouncements

The Company’s management has considered all recent accounting pronouncements. Management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

NOTE 3 – STOCK TRANSACTIONS

On January 29, 2018, the Company signed a stock for services agreement authorizing the issuance of 750,000 shares of stock to a consultant at a valuation of $.13/share related to its development of DiMO, the Company’s proprietary cryptocurrency. $97,500 was expensed to research and development for the 3 months ended March 31, 2018 and the 9 months ended September 30, 2018. In the second quarter of 2018, these 750,000 shares authorized and subscribed in the first quarter of 2018, were issued.

Regulation A Offering and Property Dividend

On February 14, 2018, the Company announced a property dividend of its internally developed cryptocurrency, DiMO. The dividend called for 950 DiMO to be distributed to shareholders of record as of October 26, 2018 with a payment date of December 14, 2018. On October 12, 2018, the Company postponed the record date and distribution date while it negotiates its with a New York Blockchain development for the next technological phase of the dividend distribution.

Additionally, on February 14, 2018, the Company filed a registration statement under Regulation A to offer up to 55,555,555 shares of common stock at an offering price of $0.90/share. The Company has received 15 comments on this offering from the SEC which it is currently addressing. Until such time as the offering is approved by the SEC, no Regulation A stock will be sold.

NOTE 4 – NOTES PAYABLE

The mortgage on the Company’s headquarters in Neptune, NJ matures in October of 2018 at which time the Company would require a full refinance of the principal balance due. As of September 30, 2018 the principal balance due was $1,069,136. The Company has been served a notice of default in August 2018 prior to the re-finance due to failing to meet its net income financial covenant. The Company has signed a letter of intent with a New York asset-based lender to re-finance the entire mortgage and its current bank line of credit with proceeds from an asset-based loan and expects to close the re-financing in the 4^th quarter of 2018.

NOTE 5 – REVISION OF PRIOR YEAR FINANCIAL STATEMENTS:

The Company’s reclassification of its mortgage from non-current to current as of the year ended December 31, 2017 based on the fact that it requires a mandatory re-finance in October 2018, resulted in no change of net income.

In accordance with the guidance provided by the SEC’s Staff Accounting Bulletin 99, Materiality and Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements the Company has determined that the impact of adjustments relating to the correction of this accounting error are not material to previously issued annual audited consolidated financial statements. Accordingly, these changes are disclosed herein and will be disclosed prospectively.

As a result of the aforementioned correction of accounting reclassifications, the relevant annual financial statements have been revised as follows:

Effects on financials for the year ended December 31, 2017:

	December 31, 2017
	As Previously Reported		Adjustment			As Revised
Balance Sheet
Current Liabilities
Current portion of long-term notes payable, related parties	$	-	$	52,702		$	52.702
Current portion of long-term notes payable		31,183		1,058,395			1,089,578
Total Current Liabilities		2,197,536		1,111,097			3,308,633
Other Liabilities
Long-term notes payable, related parties		1,681,281		(52,702	)		1,628,579
Long-term notes payable		1,073,972		(1,058,395	)		15,577
Total  Liabilities	$	4,952,789	$	-		$	4,952,789

NOTE 6 – SUBSEQUENT EVENTS

On October 1, 2018, one former executive exercised his option to purchase 500,000 shares of common stock at $0.03/share. The option exercise was made in cash and the Company received $15,000 for the issuance of 500,000 shares of common stock.  

Dividend Postponement

On October 12, 2018, the Company issued a press release announcing that it had to revise the dividend record and distribution date of the Company’s previously announced property dividend, and that the Company expects to announce a revised record and distribution date by December 31, 2018. 

F-5

Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Cautionary Notice Regarding Forward Looking Statements

The information contained in Item 2 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

This filing contains a number of forward-looking statements which reflect management’s current views and expectations with respect to our business, strategies, products, future results and events, and financial performance. All statements made in this filing other than statements of historical fact, including statements addressing operating performance, events, or developments which management expects or anticipates will or may occur in the future, including statements related to distributor channels, volume growth, revenues, profitability, new products, adequacy of funds from operations, statements expressing general optimism about future operating results, and non-historical information, are forward looking statements. In particular, the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “may,” variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements, and their absence does not mean that the statement is not forward-looking. These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results, performance or achievements could differ materially from historical results as well as those expressed in, anticipated, or implied by these forward-looking statements. We do not undertake any obligation to revise these forward-looking statements to reflect any future events or circumstances.

Readers should not place undue reliance on these forward-looking statements, which are based on management’s current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions (including those described below), and apply only as of the date of this filing. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Overview

We were incorporated in the State of Nevada as Oceanview Acquisition Corp. on January 31, 2011. On May 18, 2012, we amended our Articles of Incorporation to change our name to Sterling Consolidated Corp.

Our largest subsidiary is Sterling Seal & Supply, Inc. (“Sterling Seal”), a New Jersey corporation which was incorporated in 1997. Its predecessor was Sterling Plastic & Rubber Products, Inc., incorporated in New Jersey and was founded in 1970. Sterling Seal engages primarily in the distribution and sale of O-rings, rubber seals, oil seals, custom molded rubber parts, custom Teflon parts, Teflon rods, O-ring cord, bonded seals, O-ring kits, and stuffing box sealant.

We also own real property through our subsidiaries ADDR Properties, LLC (“ADDR”) and Q5 Ventures, LLC (“Q5”). ADDR owns a 28,000 square foot facility in Neptune, New Jersey, that is primarily used by Sterling Seal for its operations.

In addition, our subsidiary Integrity Cargo Freight Corporation (“Integrity”) is a freight forwarding business. Integrity shares a facility with Sterling Seal and manages the importation of Sterling Seal’s products and exports products on behalf of Sterling Seal to various countries. Currently eighty percent (80%) of Sterling Seal’s imports come from Asia, and ten percent (10%) of the Company’s sales are exported to various countries. However, all payables are billed and collected in USD, so Sterling does not bear any foreign exchange risk on open payables.

Results of Operations

Comparison for the three months ended September 30, 2018 and 2017

Net Revenue

Net revenue increased by approximately $126,777 or approximately 7.99 %, from $1,586,949 for the three months ended September 30, 2017 to $1,713,726 for the three months ended September 30, 2018. This increase was due primarily to increased product demand across the o-ring sector as well as product price increases in anticipation of coming tariffs on cost of goods.

3

Total Cost of Sales

Cost of sales decreased by approximately $14,754 or approximately 1.21 %, from $1,216,733 for the three months ended September 30, 2017 to $1,201,979 for the three months ended September 30, 2018. This decrease was due primarily to a decrease of $4,294 of cost of goods sold despite higher sales due to a price increase in anticipation of tariffs and a decrease of $10,460 in freight costs attributed to Integrity Cargo’s reduced sales.

Gross profit

Gross profit increased by approximately $141,531 or approximately 38.23 %, from $370,216 for the three months ended September 30, 2017 to $511,747 for the three months ended September 30, 2018. This increase was due primarily to the above described increases in sales and decrease in cost of sales. Gross profit percentage increased from approximately 23% for the 3 months ended September 30, 2017 to approximately 29.86% for the 3 months ended September 30, 2018. The gross profit percent increase is primarily attributed to recently increased prices in anticipation of industry tariffs on goods shipped from China.

Operating expenses

Operating expenses decreased by $2,137 or approximately 0.5 %, from $427,459 for the three months ended September 30, 2017 to $425,322 for the three months ended September 30, 2018. This decrease was comprised of an increase of $22,586 in sales and marketing expenses offset by a decrease of $24,723 in general and administrative costs. The increase in sales and marketing expenses is attributed to increased marketing activity related to the Company’s DiMO cryptocurrency project. The decrease in general and administrative costs is attributed to reduced software costs related to the company’s change to a more economical ERP accounting software.

Other income (expense)

Other income (expense) decreased by $103,376 or approximately 161%, from other income of $64,187 for three months ended September 30, 2017 to other expense of $39,389 for the three months ended September 30, 2018. This decrease can be explained primarily by a non-recurring gain recognized in the 3^rd quarter of 2017 on the write-off of a vendor payable of $78,973 and a refund of a copier lease of $20,547.

Net Income

As a result of the above factors, the Company showed a net income of $32,925 for the three months ended September 30, 2018, as compared to a net income of $83,161 for the three months ended September 30, 2017. This decrease of $50,236 or approximately 60.41 % is attributed to the factors described above.

Comparison for the nine months ended September 30, 2018 and 2017

Revenue

Revenue increased by approximately $92,550 or approximately 1.87%, from $4,939,995 for the nine months ended September 30, 2017 to $5,032,545 for the nine months ended September 30, 2018. This increase is due to an increase in demand for o-rings across the industrial sector.

Total Cost of Sales

Cost of sales increased by $66,028 or approximately 1.82 %, from $3,622,106 for the nine months ended September 30, 2017 to $3,688,134 for the nine months ended September 30, 2018. The increase in cost of sales was attributed to an increase in warehouse personnel head count and general price increases in rubber.

Gross profit

Gross profit increased approximately $26,522 or approximately 2.01 %, from $1,317,889 for the nine months ended September 30, 2017 to $1,344,411 for the nine months ended September 30, 2018. This increase can be attributed to the above described changes in revenue and cost of sales. Gross profit remained relatively consistent for the nine months ended September 30, 2018 (26.67%) compared to the nine months ended September 30, 2017 (26.71%).

Operating expenses

Operating expenses increased by approximately $157,629, or approximately 13.2 %, from $1,194,652 for the nine months ended September 30, 2017 to $1,352,321 for the nine months ended September 30, 2018. This increase was comprised of an increase of $64,409 in sales and marketing expenses offset by a decrease of $19,280 in general and administrative costs and an increase of $112,500 in research and development costs. The increase in sales and marketing expenses is attributed to increased marketing activity related to the Company’s DiMO cryptocurrency project. The decrease in general and administrative costs is attributed to reduced software costs related to the company’s change to a more economical ERP accounting software offset by higher legal fees relate to the Company’s DiMo cryptocurrency project. The increase in R&D is attributed to costs incurred for the research into and development of the Company’s strategic plan to bring Blockchain technology to the o-ring industry.

Other income (expense)

Other income (expense) decreased by $126,052 or approximately 1,500%, from other income of $8,352 for nine months ended September 30, 2017 to other expense of $117,700 for the nine months ended September 30, 2018. This decrease can be explained primarily by a non-recurring gain recognized in the 3^rd quarter of 2017 on the write-off of a vendor payable of $78,973 and a refund of a copier lease of $20,547.  The decrease can be further explained by the decrease of $16,923 in interest expense related to the Company’s interest rate swap.

Net Income (loss)

As a result of the above described changes in revenue and cost of sales, our net loss was $87,927 for the nine months ended September 30, 2018, as compared to a net income of $157,662 for the nine months ended September 30, 2017. This was a decrease of $245,589 or approximately 155.77 %. This decrease can be explained by increased research and development expense of $112,500 coupled with a loss on disposal of software of $20,498 incurred in the first quarter of 2018. This decrease is further explained by a non-recurring gain recognized in the 3^rd quarter of 2017 on the write-off of a vendor payable of $78,973 and a refund of a copier lease of $20,547.

Liquidity and Capital Resources

Cash requirements for, but not limited to, working capital, capital expenditures, and debt repayments have been funded from cash balances on hand, revolver borrowings, loans from officers, notes payable and cash generated from operations.

4

On September 30, 2018, we had cash and cash equivalents of approximately $64,077 as compared to approximately $36,888 as of December 31, 2017, representing an increase of $27,189. This increase can be explained by net cash provided by operating activities of $173,124 primarily attributed to a decrease in inventory of $368,539 offset by increases in accounts receivable of $256,024 and a decrease in accounts payable of $13,153; and net cash used in financing activities of $145,935 primarily attributed to paydown of loans to related party in the amount of $122,561. On September 30, 2018, our working capital deficit was approximately $1,452. 

The cash flow provided by operating activities increased from $36,907 for the nine months ended September 30, 2017 to net cash provided of $173,124 for the nine months ended September 30, 2018. This increase of $136,217 is primarily attributed to a reduction of inventory due to increased sales offset by a corresponding increase in accounts receivable and an increase in deferred tax asset.

The cash flow from investing activities is $0 for the nine months ended September 30, 2018 compared to net cash used of $32,984 for the nine months ended September 30, 2017. This increase is attributed to the fact that in the nine months ended 2017, the Company purchased $32,984 in fixed assets and did not make any fixed asset purchases in the nine months ended 2018.

The cash flow from financing activities decreased from net cash provided of $3,527 for the nine months ended September 30, 2017 to net cash used of $145,935 for the nine months ended September 30, 2018. This decrease is primarily attributed to a paydown on the related party loan in the amount of $122,561.  

Bank Loans

The Company refinanced its debt in 2013 with a New York commercial bank and there are currently a $828,858 line of credit and a $1,069,136 mortgage outstanding. The line of credit calls for a variable interest rate of the Wall St. Journal published prime rate plus 1% and requires an annual review. The mortgage has a variable rate of LIBOR plus 4.25% and is for a 5-year term expiring in October of 2018. The Company is currently in violation of one of its financial covenants and has been served a notice of default. The Company expects to refinance the mortgage and line of credit in the fourth quarter of 2018.

Critical Accounting Policies and Estimates

The preparation of our Consolidated Financial Statements, in accordance with accounting principles generally accepted in the United States, requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures pertaining to contingent assets and liabilities. Note 2, “Significant Accounting Policies,” to the Consolidated Financial Statements describes the significant accounting policies used to prepare the Consolidated Financial Statements. On an ongoing basis we evaluate our estimates, including, but not limited to, those related to bad debts, inventories, income taxes, and contingencies. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Actual results may differ from our estimates. 

We believe the following accounting policies and estimates are the most critical. Some of them involve significant judgments and uncertainties and could potentially result in materially different results under different assumptions and conditions.

Revenue recognition

The Company recognizes revenue based on Account Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, and all of the related amendments (“new revenue standard”). In the case of Sterling, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, shipment of the product has occurred, price is fixed or determinable and collectability of the resulting receivable is reasonably assured. The new revenue standard does not materially change this calculation method.  For provision of third-party freight services provided by Integrity, revenue is recognized on a gross basis in accordance with ASC 606. Revenue is generally recognized when the contracted goods arrive at their destination point. When revenues and expenses straddle a period end due to the time between shipment and delivery, Integrity allocates revenue between reporting periods based on relative transit time in each period with expenses recognized as incurred. Cost of goods is comprised of sale of o-rings and related rubber products. Freight services is comprised of freight forwarding and related services earned by Integrity and rental services is comprised of revenue from rental of commercial space to third parties.

5

Income taxes

Under the asset and liability method prescribed under ASC 740, Income Taxes, the Company uses the liability method of accounting for income taxes.  The liability method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements.  The resulting deferred tax assets or liabilities have been adjusted to reflect changes in tax laws as they occur.  A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized.

The Company recognizes the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a "more-likely-than-not" threshold, the amount to be recognized in the financial statements will be the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of December 31, 2017, the Company had no uncertain tax positions.

Fair values of financial instruments

In January 2010, the FASB ASC Topic 825, Financial Instruments, requires disclosures about fair value of financial instruments in quarterly reports as well as in annual reports.  For the Company, this statement applies to certain investments and long-term debt.  Also, the FASB ASC Topic 820, Fair Value Measurements and Disclosures, clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements.   

Various inputs are considered when determining the value of the Company’s investments and long-term debt.  The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities.  These inputs are summarized in the three broad levels listed below.

· Level 1 – observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets.

· Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc…).

· Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments).

The Company’s adoption of FASB ASC Topic 825, effectively at the beginning of the second quarter in FY 2010, did not have a material impact on the company’s financial statements.

The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared.

6

Stock-based compensation

The Company records stock-based compensation at fair value of the stock provided for services. The 10,800,000 of the stock options outstanding as of September 30, 2018 were fully vested and therefore, no compensation expense was recorded in the quarter ended September 30, 2018.

Recent Accounting Pronouncements

The Company’s management has considered all recent accounting pronouncements. Management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a Smaller Reporting Company and are not required to provide the information under this item.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

The Company has adopted and maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the reports filed under the Exchange Act, such as this Quarterly Report on Form 10-Q, is collected, recorded, processed, summarized and reported within the time periods specified in the rules of the Securities and Exchange Commission. The Company’s disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management to allow timely decisions regarding required disclosure. As required under Exchange Act Rule 13a-15, the Company’s management, including the Principal Executive Officer and Principal Financial Officer, have conducted an evaluation of the effectiveness of disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Company’s Principal Executive Officer and Principal Financial Officer concluded that due to material weaknesses the Company’s disclosure controls and procedures are not effective to ensure that information required to be disclosed by the Company in the reports that the Company 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, and that such information is accumulated and communicated to the Company’s management, as appropriate, to allow timely decisions regarding required disclosure.

As defined by Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements and Related Independence Rule and Conforming Amendments,” established by the Public Company Accounting Oversight Board ("PCAOB"), a material weakness is a deficiency or combination of deficiencies that result in a more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management identified the following control deficiencies that represent material weaknesses as of September 30, 2018:

(1) Lack of an independent audit committee or audit committee financial expert. Although our board of directors serves as the audit committee it has no independent directors These factors are counter to corporate governance practices as defined by the various stock exchanges and may lead to less supervision over management.

(2) We do not have sufficient experience from our accounting personnel with the requisite U.S. GAAP public company reporting experience that is necessary for adequate controls and procedures.

(3) Need for greater integration, oversight, communication and financial reporting of the books and records of our satellite offices.

Our management determined that these deficiencies constituted material weaknesses.

Due to our small size, we were not able to immediately take any action to remediate these material weaknesses. Notwithstanding the assessment that our Internal Controls over Financial Reporting was not effective and that there were material weaknesses identified herein, we believe that our consolidated financial statements contained in this Annual Report fairly present our financial position, results of operations and cash flows for the years covered thereby in all material respects.

Changes in Internal Control

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during our fiscal quarter ended September 30, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

7

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are not currently involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors.

We are a Smaller Reporting Company and are not required to provide the information under this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

8

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit Number	Exhibit Title
31.1*	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS *	XBRL Instance Document
101.SCH *	XBRL Taxonomy Schema
101.CAL *	XBRL Taxonomy Calculation Linkbase
101.DEF *	XBRL Taxonomy Definition Linkbase
101.LAB *	XBRL Taxonomy Label Linkbase
101.PRE *	XBRL Taxonomy Presentation Linkbase

* Filed herewith.

** In accordance with SEC Release 33-8238, Exhibit 32.1 and 32.2 are being furnished and not filed.

9

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

STERLING CONSOLIDATED CORP.
By:	/s/ Darren DeRosa
	Darren DeRosa,
	Chief Executive Officer
	(Principal Executive Officer)
	Dated: November 19, 2018
By:	/s/ Scott Chichester
	Scott Chichester,
	Chief Financial Officer
	(Principal Financial and Accounting Officer)
	Dated: November 19, 2018

10

EX-31.1

Exhibit 31.1

CERTIFICATION

OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Darren DeRosa, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Sterling Consolidated Corp.

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 registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant 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 registrant, 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 registrant'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 registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrants’ other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 19, 2018

/s/ Darren DeRosa

Darren DeRosa

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Scott Chichester, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Sterling Consolidated Corp.

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 registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant 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 registrant, 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 registrant'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 registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrants’ other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 19, 2018

/s/ Scott Chichester 

Scott Chichester

Chief Financial Officer

(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Sterling Consolidated Corp. (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the period ended September 30, 2018 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q.

Dated: November 19, 2018

/s/ Darren DeRosa

Darren DeRosa

Chief Executive Officer

(Principal Executive Officer)

The foregoing certification is being furnished as an exhibit to the Form 10-Q pursuant to Item 601(b)(32) of Regulation S-K and Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and, accordingly, is not being filed as part of the Form 10-Q for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Sterling Consolidated Corp. (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the period ended September 30, 2018 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q.

Dated: November 19, 2018

/s/ Scott Chichester

Scott Chichester

Chief Financial Officer

(Principal Financial and Accounting Officer)

The foregoing certification is being furnished as an exhibit to the Form 10-Q pursuant to Item 601(b)(32) of Regulation S-K and Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and, accordingly, is not being filed as part of the Form 10-Q for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 19, 2018
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Entity Registrant Name	STERLING CONSOLIDATED Corp
Entity Central Index Key	0001555972
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Trading Symbol	STCC
Entity Common Stock, Shares Outstanding		41,465,540
Entity Emerging Growth Company	false
Entity Small Business	true

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Current assets
Cash and cash equivalents	$ 64,077	$ 36,888
Account receivable, net	1,012,938	756,914
Inventory, net	2,136,636	2,505,175
Notes receivable and other current assets	25,016	37,861
Derivative asset	172	0
Total current assets	3,238,839	3,336,838
Property and equipment, net	1,640,212	1,751,216
Intangible assets, net	73,065	86,007
Deferred tax asset	571,264	533,581
Total assets	5,523,380	5,707,642
Current liabilities
Accounts payable and accrued expenses	1,259,773	1,272,926
Bank line of credit	828,858	828,858
Other liabilities	29,822	62,393
Derivative liability	0	2,176
Current portion of long-term notes payable, related party	52,702	52,702
Current portion of long-term notes payable	1,069,136	1,089,578
Total current liabilities	3,240,291	3,308,633
Other liabilities
Long-term notes payable, related parties	1,506,017	1,628,579
Long-term notes payable	12,645	15,577
Total other liabilities	1,518,662	1,644,156
Total liabilities	4,758,953	4,952,789
Stockholders' equity
Preferred stock, $0.001 par value; 10,000,000 shares authorized, no shares issued	0	0
Common stock, $0.001 par value; 200,000,000 shares authorized, 41,465,540 and 40,715,540 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively	41,466	40,716
Additional paid-in capital	2,060,068	1,963,318
Accumulated deficit	(1,337,107)	(1,249,181)
Total stockholders' equity	764,427	754,853
Total liabilities and stockholders' equity	$ 5,523,380	$ 5,707,642

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Preferred Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	0	0
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	200,000,000	200,000,000
Common Stock, Shares, Issued	41,465,540	40,715,540
Common Stock, Shares, Outstanding	41,465,540	40,715,540

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues
Total revenues	$ 1,713,726	$ 1,586,949	$ 5,032,545	$ 4,939,995
Cost of sales
Total cost of sales	1,201,979	1,216,733	3,688,134	3,622,106
Gross profit	511,747	370,216	1,344,411	1,317,889
Operating expenses
Sales and marketing	81,898	59,312	232,535	168,126
General and administrative	343,424	368,147	1,007,286	1,026,566
Research and development	0	0	112,500	0
Total operating expenses	425,322	427,459	1,352,321	1,194,692
Operating income (loss)	86,425	(57,243)	(7,910)	123,197
Other income (expense)
Other income (expense)	(5,553)	102,252	(1,037)	116,746
Loss on sale of vehicle	0	0	0	(2,502)
Gain on interest rate swap	(460)	2,116	2,349	9,545
Loss on disposal of software	0	0	(20,498)	0
Interest expense	(33,376)	(40,181)	(98,514)	(115,437)
Total other income (expense)	(39,389)	64,187	(117,700)	8,352
Income (loss) before provision for income taxes	47,036	6,944	(125,610)	131,549
Provision (benefit) for income taxes	14,111	(76,217)	(37,683)	(26,113)
Net income (loss)	$ 32,925	$ 83,161	$ (87,927)	$ 157,662
Net income (loss) per share of common stock:
Basic	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Fully diluted	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Weighted average number of shares outstanding
Basic	41,465,540	40,715,540	41,308,947	40,715,540
Fully diluted	52,265,540	40,715,540	41,308,947	40,715,540
O-rings and rubber product sales [Member]
Revenues
Total revenues	$ 1,678,243	$ 1,537,617	$ 4,913,040	$ 4,794,900
Cost of sales
Total cost of sales	1,143,139	1,147,433	3,518,303	3,423,166
Freight services [Member]
Revenues
Total revenues	35,483	49,332	119,505	145,095
Cost of sales
Total cost of sales	$ 58,840	$ 69,300	$ 169,831	$ 198,940

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities
Net income (loss)	$ (87,927)	$ 157,662
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	103,448	101,385
Loss on disposal of software	20,498	0
Loss on sale of vehicle	0	2,502
Gain on interest rate swap	(2,349)	(9,545)
Stock for services	97,500	0
Changes in operating assets and liabilities:
Accounts receivable	(256,024)	(246,129)
Inventory	368,539	(207,323)
Prepaids and other current assets	12,845	0
Deferred tax asset	(37,683)	44,607
Accrued interest, related party	0	(35,285)
Other assets	0	(18,373)
Accounts payable and accrued interest payable	(13,153)	318,366
Other liabilities	(32,570)	(70,960)
Net cash provided by operating activities	173,124	36,907
Cash flows from investing activities
Purchase of fixed and intangible assets	0	(32,984)
Net cash used in investing activities	0	(32,984)
Cash flows from financing activities
Net borrowing of bank line of credit	0	30,000
Payments on notes payable	(23,374)	(65,084)
Net paydown on related party note	(122,561)	0
Net loan-related party	0	38,611
Net cash provided by (used in) financing activities	(145,935)	3,527
Net change in cash and cash equivalents	27,189	7,450
Cash and cash equivalents at the beginning of period	36,888	6,814
Cash and cash equivalents at the end of period	64,077	14,264
Supplemental disclosures of cash flow information:
Cash paid for interest	98,514	115,437
Cash paid for taxes	$ 750	$ 750

XML

BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE 1 – BASIS OF PRESENTATION

The accompanying interim financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows as of and for the period ended, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2017 audited financial statements.  The results of operations for the periods ended September 30, 2018 and September 30, 2017 are not necessarily indicative of the operating results for the full years.

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SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied by the Company in these condensed interim financial statements are the same as those applied by the Company in its audited consolidated financial statements as at and for the year ended December 31, 2017.

On January 1, 2018, we adopted the new accounting standard ASC 606, Revenue from Contracts with Customers, and all of the related amendments (“new revenue standard”). Under this method, we are required to recognize the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings. The adjustment was not material, and therefore was not made. This results in no restatement of prior periods, which continue to be reported under the accounting standards in effect for those periods. We expect the impact of the adoption of the new revenue standard to continue to be immaterial on an ongoing basis.

The impact of recording this change as of January 1, 2018 resulted in no change to deferred revenue at that date and no corresponding change in retained earnings. The impact of adopting the new revenue standard in 2018 did not create a material impact on our financial statements.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to the accounts receivable and sales allowances, fair values of financial instruments, useful lives of intangible assets and property and equipment, inventory valuations, income taxes, and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Inventories

Inventories, which are entirely comprised of finished goods, are stated at the lower of cost (based on the first in, first out method) or market. Cost does not include shipping and handling fees, which are charged directly to income. The Company provides for estimated losses from obsolete or slow-moving inventories, which is approximately 20% of the total inventory, and writes down the cost of inventory at the time such determinations are made. Reserves are estimated based upon inventory on hand, historical sales activity, industry trends, the business environment, and the expected net realizable value. The net realizable value is determined based upon current awareness of market prices.

Inventory Type	September 30, 2018			December 31, 2017
Finished goods	$	2,721,179		$	3,090,939
Raw materials		-			-
Work-in-progress		1,221			-
Inventory Reserve		(585,764	)		(585,764	)
Net Inventory	$	2,136,636		$	2,505,175

Revenue Recognition

The Company recognizes revenue based on Account Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, and all of the related amendments (“new revenue standard”). In the case of Sterling, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, shipment of the product has occurred, price is fixed or determinable and collectability of the resulting receivable is reasonably assured.  For provision of third-party freight services provided by Integrity, revenue is recognized on a gross basis in accordance with ASC 606. Revenue is generally recognized when the contracted goods arrive at their destination point. When revenues and expenses straddle a period end due to the time between shipment and delivery, Integrity allocates revenue between reporting periods based on relative transit time in each period with expenses recognized as incurred. Cost of goods is comprised of sale of o-rings and related rubber products. Freight services is comprised of freight forwarding and related services earned by Integrity and rental services is comprised of revenue from rental of commercial space to third parties.

Basic and Diluted Earnings per Share

The Company has adopted ASC Update 2017-11, Earnings Per Share (Topic 260), (the “new pronouncement”) for the period ended March 31, 2018. This new pronouncement calls for a change in the accounting for “down round” feature equity linked instruments such as option, warrants and convertible notes. “Down round” features are features that result in the strike price being reduced on the basis of the pricing of future equity offerings. Previous accounting guidance required a fair value measurement each accounting period on an ongoing basis and treatment of the instrument as a derivative liability with the change in the value of the liability recognized on the income statement. The new pronouncement requires that the effect of the down round feature is treated as a dividend and as a reduction of income available to commons shareholders in basic EPS. While the Company has 10,800,000 options currently outstanding as of September 30, 2018, all of these options are at a fixed price and were fully vested upon issuance on December 27, 2018. Consequently, they do not have “down round” features and the earnings per share calculations are unaffected by the new pronouncement.

The computation of basic earnings (loss) per share of common stock is based on the weighted average number of shares outstanding during the periods presented. The computation of fully diluted earnings (loss) per share includes common stock equivalents outstanding at the balance sheet date. The Company had 10,800,000 and zero stock options and warrants that were considered as common stock equivalents as of September 30, 2018 and 2017, respectively. Due to a net loss of $87,927 for the 9 months ended September 30, 2018, the options had an anti-dilutive effect upon earnings per share for the 9 months ended September 30, 2018.

	For the 3 months ended September 30, 2018		For the 3 months ended September 30, 2017		For the 9 months ended September 30, 2018		For the 9 months ended September 30, 2017
Weighted average shares of common stock outstanding		41,465,540		40,715,540		41,308,947		40,715,540
Weighted average options outstanding		10,800,000		-		-		-
Fully diluted common stock equivalents for EPS calculation		52,265,540		40,715,540		41,308,947		40,715,540

Recent Accounting Pronouncements

The Company’s management has considered all recent accounting pronouncements. Management believes that these recent pronouncements will not have a material effect on the Company’s financial statements. 

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STOCK TRANSACTIONS

9 Months Ended

Sep. 30, 2018

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 3 – STOCK TRANSACTIONS

On January 29, 2018, the Company signed a stock for services agreement authorizing the issuance of 750,000 shares of stock to a consultant at a valuation of $.13/share related to its development of DiMO, the Company’s proprietary cryptocurrency. $97,500 was expensed to research and development for the 3 months ended March 31, 2018 and the 9 months ended September 30, 2018. In the second quarter of 2018, these 750,000 shares authorized and subscribed in the first quarter of 2018, were issued.

Regulation A Offering and Property Dividend

On February 14, 2018, the Company announced a property dividend of its internally developed cryptocurrency, DiMO. The dividend called for 950 DiMO to be distributed to shareholders of record as of October 26, 2018 with a payment date of December 14, 2018. On October 12, 2018, the Company postponed the record date and distribution date while it negotiates its with a New York Blockchain development for the next technological phase of the dividend distribution.

Additionally, on February 14, 2018, the Company filed a registration statement under Regulation A to offer up to 55,555,555 shares of common stock at an offering price of $0.90/share. The Company has received 15 comments on this offering from the SEC which it is currently addressing. Until such time as the offering is approved by the SEC, no Regulation A stock will be sold.

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NOTES PAYABLE

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

NOTE 4 – NOTES PAYABLE

The mortgage on the Company’s headquarters in Neptune, NJ matures in October of 2018 at which time the Company would require a full refinance of the principal balance due. As of September 30, 2018 the principal balance due was $1,069,136. The Company has been served a notice of default in August 2018 prior to the re-finance due to failing to meet its net income financial covenant. The Company has signed a letter of intent with a New York asset-based lender to re-finance the entire mortgage and its current bank line of credit with proceeds from an asset-based loan and expects to close the re-financing in the 4th quarter of 2018.

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REVISION OF PRIOR YEAR FINANCIAL STATEMENTS:

9 Months Ended

Sep. 30, 2018

Accounting Changes and Error Corrections [Abstract]

Accounting Changes and Error Corrections [Text Block]

NOTE 5 – REVISION OF PRIOR YEAR FINANCIAL STATEMENTS:

The Company’s reclassification of its mortgage from non-current to current as of the year ended December 31, 2017 based on the fact that it requires a mandatory re-finance in October 2018, resulted in no change of net income.

In accordance with the guidance provided by the SEC’s Staff Accounting Bulletin 99, Materiality and Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements the Company has determined that the impact of adjustments relating to the correction of this accounting error are not material to previously issued annual audited consolidated financial statements. Accordingly, these changes are disclosed herein and will be disclosed prospectively.

As a result of the aforementioned correction of accounting reclassifications, the relevant annual financial statements have been revised as follows:

Effects on financials for the year ended December 31, 2017:

	December 31, 2017
	As Previously Reported		Adjustment			As Revised
Balance Sheet
Current Liabilities
Current portion of long-term notes payable, related parties	$	-	$	52,702		$	52,702
Current portion of long-term notes payable		31,183		1,058,395			1,089,578
Total Current Liabilities		2,197,536		1,111,097			3,308,633
Other Liabilities
Long-term notes payable, related parties		1,681,281		(52,702	)		1,628,579
Long-term notes payable		1,073,972		(1,058,395	)		15,577
Total  Liabilities	$	4,952,789	$	-		$	4,952,789

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 6 – SUBSEQUENT EVENTS

On October 1, 2018, one former executive exercised his option to purchase 500,000 shares of common stock at $0.03/share. The option exercise was made in cash and the Company received $15,000 for the issuance of 500,000 shares of common stock.

Dividend Postponement

On October 12, 2018, the Company issued a press release announcing that it had to revise the dividend record and distribution date of the Company’s previously announced property dividend, and that the Company expects to announce a revised record and distribution date by December 31, 2018.

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to the accounts receivable and sales allowances, fair values of financial instruments, useful lives of intangible assets and property and equipment, inventory valuations, income taxes, and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Inventory, Policy [Policy Text Block]

Inventories

Inventories, which are entirely comprised of finished goods, are stated at the lower of cost (based on the first in, first out method) or market. Cost does not include shipping and handling fees, which are charged directly to income. The Company provides for estimated losses from obsolete or slow-moving inventories, which is approximately 20% of the total inventory, and writes down the cost of inventory at the time such determinations are made. Reserves are estimated based upon inventory on hand, historical sales activity, industry trends, the business environment, and the expected net realizable value. The net realizable value is determined based upon current awareness of market prices.

Inventory Type	September 30, 2018			December 31, 2017
Finished goods	$	2,721,179		$	3,090,939
Raw materials		-			-
Work-in-progress		1,221			-
Inventory Reserve		(585,764	)		(585,764	)
Net Inventory	$	2,136,636		$	2,505,175

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

The Company recognizes revenue based on Account Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, and all of the related amendments (“new revenue standard”). In the case of Sterling, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, shipment of the product has occurred, price is fixed or determinable and collectability of the resulting receivable is reasonably assured.  For provision of third-party freight services provided by Integrity, revenue is recognized on a gross basis in accordance with ASC 606. Revenue is generally recognized when the contracted goods arrive at their destination point. When revenues and expenses straddle a period end due to the time between shipment and delivery, Integrity allocates revenue between reporting periods based on relative transit time in each period with expenses recognized as incurred. Cost of goods is comprised of sale of o-rings and related rubber products. Freight services is comprised of freight forwarding and related services earned by Integrity and rental services is comprised of revenue from rental of commercial space to third parties.

Earnings Per Share, Policy [Policy Text Block]

Basic and Diluted Earnings per Share

The Company has adopted ASC Update 2017-11, Earnings Per Share (Topic 260), (the “new pronouncement”) for the period ended March 31, 2018. This new pronouncement calls for a change in the accounting for “down round” feature equity linked instruments such as option, warrants and convertible notes. “Down round” features are features that result in the strike price being reduced on the basis of the pricing of future equity offerings. Previous accounting guidance required a fair value measurement each accounting period on an ongoing basis and treatment of the instrument as a derivative liability with the change in the value of the liability recognized on the income statement. The new pronouncement requires that the effect of the down round feature is treated as a dividend and as a reduction of income available to commons shareholders in basic EPS. While the Company has 10,800,000 options currently outstanding as of September 30, 2018, all of these options are at a fixed price and were fully vested upon issuance on December 27, 2018. Consequently, they do not have “down round” features and the earnings per share calculations are unaffected by the new pronouncement.

The computation of basic earnings (loss) per share of common stock is based on the weighted average number of shares outstanding during the periods presented. The computation of fully diluted earnings (loss) per share includes common stock equivalents outstanding at the balance sheet date. The Company had 10,800,000 and zero stock options and warrants that were considered as common stock equivalents as of September 30, 2018 and 2017, respectively. Due to a net loss of $87,927 for the 9 months ended September 30, 2018, the options had an anti-dilutive effect upon earnings per share for the 9 months ended September 30, 2018.

	For the 3 months ended September 30, 2018		For the 3 months ended September 30, 2017		For the 9 months ended September 30, 2018		For the 9 months ended September 30, 2017
Weighted average shares of common stock outstanding		41,465,540		40,715,540		41,308,947		40,715,540
Weighted average options outstanding		10,800,000		-		-		-
Fully diluted common stock equivalents for EPS calculation		52,265,540		40,715,540		41,308,947		40,715,540

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

The Company’s management has considered all recent accounting pronouncements. Management believes that these recent pronouncements will not have a material effect on the Company’s financial statements. 

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SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Schedule of Inventory, Current [Table Text Block]

Inventory Type	September 30, 2018			December 31, 2017
Finished goods	$	2,721,179		$	3,090,939
Raw materials		-			-
Work-in-progress		1,221			-
Inventory Reserve		(585,764	)		(585,764	)
Net Inventory	$	2,136,636		$	2,505,175

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

Due to a net loss of $87,927 for the 9 months ended September 30, 2018, the options had an anti-dilutive effect upon earnings per share for the 9 months ended September 30, 2018.

	For the 3 months ended September 30, 2018		For the 3 months ended September 30, 2017		For the 9 months ended September 30, 2018		For the 9 months ended September 30, 2017
Weighted average shares of common stock outstanding		41,465,540		40,715,540		41,308,947		40,715,540
Weighted average options outstanding		10,800,000		-		-		-
Fully diluted common stock equivalents for EPS calculation		52,265,540		40,715,540		41,308,947		40,715,540

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REVISION OF PRIOR YEAR FINANCIAL STATEMENTS: (Tables)

9 Months Ended

Sep. 30, 2018

Accounting Changes and Error Corrections [Abstract]

Schedule of Error Corrections and Prior Period Adjustments [Table Text Block]

As a result of the aforementioned correction of accounting reclassifications, the relevant annual financial statements have been revised as follows:

Effects on financials for the year ended December 31, 2017:

	December 31, 2017
	As Previously Reported		Adjustment			As Revised
Balance Sheet
Current Liabilities
Current portion of long-term notes payable, related parties	$	-	$	52,702		$	52,702
Current portion of long-term notes payable		31,183		1,058,395			1,089,578
Total Current Liabilities		2,197,536		1,111,097			3,308,633
Other Liabilities
Long-term notes payable, related parties		1,681,281		(52,702	)		1,628,579
Long-term notes payable		1,073,972		(1,058,395	)		15,577
Total  Liabilities	$	4,952,789	$	-		$	4,952,789

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SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Finished goods	$ 2,721,179	$ 3,090,939
Raw materials	0	0
Work-in-progress	1,221	0
Inventory Reserve	(585,764)	(585,764)
Net Inventory	$ 2,136,636	$ 2,505,175

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SIGNIFICANT ACCOUNTING POLICIES (Details 1) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Weighted average shares of common stock outstanding	41,465,540	40,715,540	41,308,947	40,715,540
Weighted average options outstanding	$ 10,800,000	$ 0	$ 0	$ 0
Fully diluted common stock equivalents for EPS calculation	52,265,540	40,715,540	41,308,947	40,715,540

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SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Summary Of Significant Accounting Policies [Line Items]
Estimated Losses of Obsolete or Slow Moving Inventory Percent			20.00%
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants			10,800,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number	10,800,000		10,800,000
Share Based Payment Award Options Vested Issuance Date			Dec. 27, 2018
Net Income (Loss) Attributable to Parent	$ 32,925	$ 83,161	$ (87,927)	$ 157,662

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STOCK TRANSACTIONS (Details Textual) - USD ($)	1 Months Ended		3 Months Ended				9 Months Ended
	Feb. 14, 2018	Jan. 29, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Stockholders Equity Note [Line Items]
Dividend Called On Shares	950
Dividends Payable, Date of Record	Oct. 26, 2018
Dividends Payable, Date to be Paid	Dec. 14, 2018
Common Stock, Par or Stated Value Per Share			$ 0.001				$ 0.001		$ 0.001
Research and Development Expense			$ 0			$ 0	$ 112,500	$ 0
Consultant [Member]
Stockholders Equity Note [Line Items]
Stock Issued During Period, Shares, Issued for Services				750,000
Regulation A [Member]
Stockholders Equity Note [Line Items]
Stock Issued During Period, Shares, New Issues	55,555,555
Sale of Stock, Price Per Share	$ 0.90
proprietary cryptocurrency [Member]
Stockholders Equity Note [Line Items]
Common Stock, Par or Stated Value Per Share		$ 0.03
Research and Development Expense					$ 97,500		$ 97,500
Stock Issued During Period, Shares, Issued for Services		750,000

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NOTES PAYABLE (Details Textual) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Notes Payable, Current	$ 1,069,136	$ 1,089,578

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REVISION OF PRIOR YEAR FINANCIAL STATEMENTS: (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Current Liabilities
Current portion of long-term notes payable, related parties	$ 52,702	$ 52,702
Current portion of long-term notes payable	1,069,136	1,089,578
Total Current Liabilities	3,240,291	3,308,633
Other Liabilities
Long-term notes payable, related parties	1,506,017	1,628,579
Long-term notes payable	12,645	15,577
Total Liabilities	$ 4,758,953	4,952,789
Previously Reported [Member]
Current Liabilities
Current portion of long-term notes payable, related parties		0
Current portion of long-term notes payable		31,183
Total Current Liabilities		2,197,536
Other Liabilities
Long-term notes payable, related parties		1,681,281
Long-term notes payable		1,073,972
Total Liabilities		4,952,789
Restatement Adjustment [Member]
Current Liabilities
Current portion of long-term notes payable, related parties		52,702
Current portion of long-term notes payable		1,058,395
Total Current Liabilities		1,111,097
Other Liabilities
Long-term notes payable, related parties		(52,702)
Long-term notes payable		(1,058,395)
Total Liabilities		$ 0

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SUBSEQUENT EVENTS (Details Textual) - Subsequent Event [Member]	1 Months Ended
	Oct. 01, 2018 USD ($) $ / shares shares
Subsequent Event [Line Items]
Sale of Stock, Consideration Received on Transaction | $	$ 15,000
Sale of Stock, Number of Shares Issued in Transaction	500,000
One Former Executive [Member]
Subsequent Event [Line Items]
Purchase of Common Stock Exercised His Option	500,000
Sale of Stock, Price Per Share | $ / shares	$ 0.03