Colorado
|
|
59-2928366
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
6 Park Center Court
Owings Mills, MD 21117
|
|
21227
|
(Address of principal executive offices)
|
|
(Zip Code)
|
☐
|
Large accelerated filer
|
☐
|
Accelerated filer
|
|
|
|
|
☐
|
Non-accelerated filer
|
☑
|
Smaller reporting company
|
|
|
|
|
|
PART I
|
|
|
|
|
|
|
|
|
|
Item 1.
|
Business
|
|
4
|
|
Item 1A.
|
Risk Factors
|
|
12
|
|
Item 1B.
|
Unresolved Staff Comments
|
|
20
|
|
Item 2.
|
Properties
|
|
20
|
|
Item 3.
|
Legal Proceedings
|
|
21
|
|
Item 4.
|
Mine Safety Disclosures
|
|
21
|
|
|
|
|
|
|
PART II
|
|
|
|
|
|
|
|
|
|
Item 5.
|
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
21
|
|
Item 6.
|
Selected Financial Data
|
|
27
|
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
28
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk`
|
|
35
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
36
|
|
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|
|
52
|
|
Item 9A.
|
Controls and Procedures
|
|
52
|
|
Item 9B.
|
Other Information
|
|
53
|
|
|
|
|
|
|
PART III
|
|
|
|
|
|
|
|
|
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
|
53
|
|
Item 11.
|
Executive Compensation
|
|
55
|
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
|
58
|
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
|
59
|
|
Item 14.
|
Principal Accounting Fees and Services
|
|
60
|
|
|
|
|
|
|
PART IV
|
|
|
|
|
|
|
|
|
|
Item 15.
|
Exhibits, Financial Statement Schedules
|
|
61
|
|
|
|
|
|
|
SIGNATURES
|
|
62
|
|
●
|
Investors may have difficulty buying and selling our shares or obtaining market quotations;
|
●
|
Market visibility for our common stock may be limited; and
|
●
|
variations in our quarterly operating results;
|
●
|
loss of a key relationship or failure to complete significant transactions;
|
●
|
additions or departures of key personnel; and
|
●
|
fluctuations in stock market price and volume.
|
FISCAL YEAR ENDED DECEMBER 31, 2017:
|
|
High
|
|
|
Low
|
|
||
Fourth Quarter
|
|
$
|
0.003
|
|
|
$
|
0.001
|
|
Third Quarter
|
|
$
|
0.003
|
|
|
$
|
0.002
|
|
Second Quarter
|
|
$
|
0.003
|
|
|
$
|
0.002
|
|
First Quarter
|
|
$
|
0.003
|
|
|
$
|
0.002
|
|
|
|
|
|
|
|
|
|
|
FISCAL YEAR ENDED DECEMBER 31, 2016:
|
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
$
|
0.003
|
|
|
`
|
0.002
|
|
Third Quarter
|
|
$
|
0.003
|
|
|
$
|
0.002
|
|
Second Quarter
|
|
$
|
0.003
|
|
|
$
|
0.002
|
|
First Quarter
|
|
$
|
0.003
|
|
|
$
|
0.002
|
|
(1)
|
Over-the-counter market quotations reflect inter-dealer prices without retail mark-up, mark-down or commission, and may not represent actual transactions.
|
(2)
|
Source: www.nasdaq.com
|
Plan Category
|
|
Number of
securities to be issued
upon exercise
of outstanding
options,
warrants and rights
|
|
|
Weighted-
average exercise
price of
outstanding
options, warrants
and rights
|
|
|
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
|
|
|||
Equity compensation plans approved by security holders
|
|
|
5,000,000
|
(1)
|
|
|
-
|
|
|
|
36,340,900
|
(2)
|
Equity compensation plans not approved by security holders
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
5,000,000
|
|
|
|
-
|
|
|
|
36,340,900
|
|
(1)
|
Represents shares reserved for the Company's 2010 Equity Incentive Plan.
|
(2)
|
Represents shares reserved for the Company's 2010 Service Provider Stock Compensation Plan.
|
SUMMARY COMPARISON OF OPERATING RESULTS
|
||||||||
|
Years ended December 31,
|
|||||||
|
2017
|
2016
|
||||||
Revenues, net
|
$
|
53,095
|
$
|
58,295
|
||||
Cost of sales
|
18,618
|
1,174
|
||||||
Gross profit (loss)
|
34,477
|
67,121
|
||||||
Total operating expenses
|
241,562
|
193,984
|
||||||
Loss from operations
|
(207,085
|
)
|
(136,863
|
)
|
||||
Total other income (expense)
|
4,407
|
|
(53,756
|
)
|
||||
Net loss
|
(202,678
|
)
|
(190,619
|
)
|
||||
Net loss per share
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
|
2017
|
2016
|
||||||
ViewScan
|
$
|
2,775
|
$
|
7,570
|
||||
Warranty
|
31,533
|
50,725
|
||||||
Service, installation, training, etc
|
18,787
|
0,0
|
||||||
Total
|
$
|
53,095
|
$
|
58.295
|
Stockholder
Demand loan payable with interest at 5% per month dated September 18, 2009. The loan is secured by the Company's accounts receivable. The note was payable in full on December 17, 2009 and is currently in default
|
50,000
|
50,000
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
37
|
|
|
|
|
|
|
Consolidated Balance Sheets
|
|
|
38
|
|
|
|
|
|
|
Consolidated Statements of Operations
|
|
|
39
|
|
|
|
|
|
|
Consolidated Statements of Stockholders' Deficit
|
|
|
40
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows
|
|
|
41
|
|
|
|
|
|
|
Notes to the Financial Statements
|
|
|
42
|
|
361 Hopedale Drive SE
|
|
P (732) 822-4427
|
Bayville, NJ 08721
|
|
F (732) 510-0665
|
View Systems, Inc. and Subsidiaries
|
||||||||
Consolidated Balance Sheets
|
||||||||
December 31, 2017 and 2016
|
||||||||
2017
|
2016
|
|||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash
|
$
|
82
|
$
|
94
|
||||
Accounts receivable
|
-
|
3,859
|
||||||
Inventory
|
-
|
1,088
|
||||||
Total current assets
|
82
|
5,041
|
||||||
Property and Equipment (Net)
|
1,397
|
2,197
|
||||||
Other Assets
|
||||||||
Deposits
|
-
|
1,595
|
||||||
Total other assets
|
-
|
1,595
|
||||||
Total assets
|
$
|
1,479
|
$
|
8,833
|
||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
||||||||
Current Liabilities
|
||||||||
Accounts payable and accrued expenses
|
$
|
436,574
|
$
|
432,841
|
||||
Deferred compensation
|
264,744
|
149,170
|
||||||
Accrued and withheld payroll taxes payable
|
193,654
|
187,030
|
||||||
Accrued interest payable
|
155,625
|
125,625
|
||||||
Accrued royalties payable
|
225,000
|
225,000
|
||||||
Loans from stockholders
|
637,034
|
591,208
|
||||||
Notes payable
|
50,000
|
50,000
|
||||||
Deferred revenue
|
59,715
|
66,148
|
||||||
Total current liabilities
|
2,022,346
|
1,827,022
|
||||||
Stockholders' Deficit
|
||||||||
Convertible preferred stock, authorized 10,000,000 shares, $.001 par value,
|
||||||||
Issued and outstanding 5,589,647
|
5,590
|
5,590
|
||||||
Common stock, authorized 950,000,000 shares, $.001 par value,
|
||||||||
Issued and outstanding 326,705,526
|
326,705
|
326,705
|
||||||
Common stock issuable
|
16,000
|
16,000
|
||||||
Additional paid-in capital
|
27,392,125
|
27,392,125
|
||||||
Accumulated deficit
|
(29,761,287
|
)
|
(29,558,609
|
)
|
||||
Total stockholders' deficit
|
(2,020,867
|
)
|
(1,818,189
|
)
|
||||
Total Liabilities and Stockholders' Deficit
|
$
|
1,479
|
$
|
8,833
|
View Systems, Inc. and Subsidiaries
|
||||||||
Consolidated Statements of Operations
|
||||||||
For the Years Ended
|
||||||||
December 31,
|
||||||||
2017
|
2016
|
|||||||
Revenues
|
||||||||
Products sales and installation
|
$
|
2,775
|
$
|
7,570
|
||||
Extended warranties
|
31,533
|
50,725
|
||||||
Service income
|
18,787
|
-
|
||||||
Total revenue
|
53,095
|
58,295
|
||||||
Cost of sales
|
18,618
|
1,174
|
||||||
Gross profit
|
34,477
|
57,121
|
||||||
Operating expenses
|
||||||||
General and administrative
|
73,752
|
44,883
|
||||||
Professional fees
|
43,398
|
5,000
|
||||||
Salaries and benefits
|
120,553
|
144,101
|
||||||
Bad debt expense
|
3,859
|
-
|
||||||
Total operating expenses
|
241,562
|
193,984
|
||||||
Loss from operations
|
(207,085
|
)
|
(136,863
|
)
|
||||
Other income (expense)
|
||||||||
Forgiveness of debt
|
41,031
|
-
|
||||||
Interest expense
|
(36,624
|
)
|
(53,756
|
)
|
||||
Total other income (expense)
|
4,407
|
(53,756
|
)
|
|||||
Net loss
|
$
|
(202,678
|
)
|
$
|
(190,619
|
)
|
||
Net loss per share (basic and diluted)
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
||
Weighted average shares outstanding (basic and diluted)
|
326,705,526
|
326,705,526
|
View Systems, Inc. and Subsidiaries
|
||||||||||||||||||||||||||||||||
Consolidated Statements of Stockholders' Deficit
|
||||||||||||||||||||||||||||||||
Additional
|
||||||||||||||||||||||||||||||||
Preferred
|
Common
|
Stock
|
Paid-in
|
Accumulated
|
||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Issuable
|
Capital
|
Deficit
|
Total
|
|||||||||||||||||||||||||
Balance, December 31, 2015
|
6,089,647
|
$
|
6,090
|
312,205,526
|
$
|
312,205
|
$
|
16,000
|
$
|
27,389,325
|
$
|
(29,367,990
|
)
|
$
|
(1,644,370
|
)
|
||||||||||||||||
Conversion of 500,000 shares preferred to common
|
(500,000
|
)
|
(500
|
)
|
7,500,000
|
7,500
|
-
|
(7,000
|
)
|
-
|
-
|
|||||||||||||||||||||
Common stock issued in payment of services
|
-
|
-
|
7,000,000
|
7,000
|
-
|
9,800
|
-
|
16,800
|
||||||||||||||||||||||||
Net loss for the year ended December 31, 2016
|
-
|
-
|
-
|
-
|
-
|
-
|
(190,619
|
)
|
(190,619
|
)
|
||||||||||||||||||||||
Balance, December 31, 2016
|
5,589,647
|
5,590
|
326,705,526
|
326,705
|
16,000
|
27,392,125
|
(29,558,609
|
)
|
(1,818,189
|
)
|
||||||||||||||||||||||
Net loss for the year ended December 31, 2017
|
-
|
-
|
-
|
-
|
-
|
-
|
(202,678
|
)
|
(202,678
|
)
|
||||||||||||||||||||||
Balance, December 31, 2017
|
5,589,647
|
$
|
5,590
|
326,705,526
|
$
|
326,705
|
$
|
16,000
|
$
|
27,392,125
|
$
|
(29,761,287
|
)
|
$
|
(2,020,867
|
)
|
View Systems, Inc. and Subsidiaries
|
||||||||
Consolidated Statements of Cash Flows
|
||||||||
For the Years Ended
|
||||||||
December 31,
|
||||||||
2017
|
2016
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(202,678
|
)
|
$
|
(190,619
|
)
|
||
Adjustments to reconcile net loss to net cash
|
||||||||
used in operations:
|
||||||||
Depreciation
|
800
|
800
|
||||||
Common stock issued in payment of services
|
-
|
16,800
|
||||||
Gain from renegotiated debt
|
(41,031
|
)
|
-
|
|||||
Bad debt expense
|
3,859
|
-
|
||||||
Change in operating assets and liabilities:
|
||||||||
(Increase) decrease in cash from:
|
||||||||
Accounts receivable
|
-
|
3,216
|
||||||
Inventory
|
1,088
|
-
|
||||||
Security deposit
|
1,595
|
-
|
||||||
Increase (decrease) in cash from:
|
||||||||
Accounts payable and accrued expenses
|
44,764
|
34,139
|
||||||
Deferred compensation
|
115,574
|
111,335
|
||||||
Accrued and withheld payroll taxes payable
|
6,624
|
5,221
|
||||||
Accrued interest payable
|
30,000
|
30,000
|
||||||
Deferred revenue
|
(6,433
|
)
|
(28,825
|
)
|
||||
Net cash used in operating activities
|
(45,838
|
)
|
(17,933
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Proceeds/payments from stockholders loans
|
45,826
|
26,505
|
||||||
Principal payments on notes payable
|
-
|
(11,095
|
)
|
|||||
Net cash provided by financing activities
|
45,826
|
15,410
|
||||||
Increase (decrease) in cash
|
(12
|
)
|
(2,523
|
)
|
||||
Cash at beginning of year
|
94
|
2,617
|
||||||
Cash at end of year
|
$
|
82
|
$
|
94
|
View Systems, Inc. and Subsidiaries
|
||||||||
Consolidated Statements of Cash Flows (Continued)
|
||||||||
For the Years Ended
|
||||||||
December 31,
|
||||||||
2017
|
2016
|
|||||||
Cash paid for:
|
||||||||
Interest
|
$
|
-
|
$
|
-
|
||||
Income Taxes
|
$
|
-
|
$
|
-
|
||||
Non-Cash Investing and Financing Activities:
|
||||||||
Expenses paid with common stock
|
$
|
-
|
$
|
16,800
|
Equipment
|
5-7 years
|
||
Software tools
|
3 years
|
Weighted Avg
|
||||||||||||
(Loss)
|
Shares
|
Per-share
|
||||||||||
(Numerator)
|
(Denominator)
|
Amount
|
||||||||||
Year ended December 31, 2017
|
||||||||||||
Loss from operations which is the amount
|
||||||||||||
that is available to common stockholders
|
$
|
(202,678
|
)
|
326,705,526
|
$
|
(0.00
|
)
|
|||||
Year ended December 31, 2016
|
||||||||||||
Loss from operations which is the amount
|
||||||||||||
that is available to common stockholders
|
$
|
(190,619
|
)
|
326,705,526
|
$
|
(0.00
|
)
|
|||||
The components of the net deferred tax asset as of December 31, 2017 are as follows:
|
||||
Effect of net operating loss carry forward
|
$
|
8,209,000
|
||
Less evaluation allowance
|
(8,209,000
|
)
|
||
Net deferred tax asset
|
$
|
-
|
Year ended
|
||||||||
December 31,
|
December 31,
|
|||||||
2017
|
2016
|
|||||||
Net loss per financial statements which approximates
|
||||||||
net loss per income tax returns
|
$
|
( 202,678
|
)
|
$
|
(190,619
|
)
|
||
Income tax expense (benefit) applying prevailing
|
||||||||
Federal and state income tax rates
|
(59,000
|
)
|
(80,000
|
)
|
||||
Less valuation allowance
|
59,000
|
80,000
|
||||||
Net income tax expense (benefit)
|
$
|
-
|
$
|
-
|
Weighted
|
Weighted Average
|
Aggregate
|
||||||||||||||
Number of
|
Average Exercise
|
Remaining
|
Intrinsic
|
|||||||||||||
Options
|
Price
|
Contractual Life
|
Value
|
|||||||||||||
Outstanding at Dec 31, 2016
|
10,000,000
|
$
|
0.03
|
1.24
|
$
|
|||||||||||
Granted
|
||||||||||||||||
Exercised
|
||||||||||||||||
Forfeited
|
||||||||||||||||
Outstanding at Dec 31, 2017
|
10,000,000
|
$
|
0.03
|
0.50
|
$
|
|||||||||||
Exercisable at Dec 31, 2017
|
10,000,000
|
$
|
0.03
|
$
|
Annual Dividend
|
||
Expected Life (in years)
|
5.00
|
|
Risk Free Interest Rate
|
0.78%
|
|
Expected Volatility
|
325.25%
|
For the Years Ended
|
||||||||
2017
|
2016
|
|||||||
Revenues
|
||||||||
Security Systems
|
$
|
34,308
|
$
|
58,295
|
||||
Medical
|
18,787
|
-
|
||||||
$
|
53,095
|
$
|
58,295
|
|||||
Loss Before Taxes
|
||||||||
Security Systems
|
$
|
(138,257
|
)
|
$
|
(190,619
|
)
|
||
Medical
|
(64,421
|
)
|
-
|
|||||
$
|
(202,678
|
)
|
$
|
(190,619
|
)
|
(1)
|
pertain to the maintenance of records that in reasonable detail accurately and fairy reflect our transactions .
|
(2)
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and
|
(3)
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
|
|
|
|
|
|
|
|
|
NAME
|
|
AGE
|
|
POSITION
|
|
DIRECTOR SINCE
|
|
Gunther Than
|
|
70
|
|
Chief Executive Officer, Treasurer, Secretary and Director
|
|
1998
|
|
|
|
|
|
|
|
|
|
Martin Maassen
|
|
76
|
|
Director
|
|
1999
|
|
|
|
|
|
|
|
|
|
Name
|
|
Salary
|
|
Position
|
||||
Gunther Than (1)
|
|
$
|
0
|
|
|
|
As Chairman of the Board, Director
|
|
|
|
$
|
0
|
|
|
|
As Chief Executive Officer and Chief Financial Officer/Treasurer
|
|
Martin Maassen
|
|
$
|
0
|
|
|
|
As Director
|
|
Michael Bagnoli
|
|
$
|
0
|
|
|
|
As Secretary and Director
|
|
Name and Principal Position
|
Fiscal
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)
|
|
Nonequity
Incentive
Plan
Compen-
sation ($)
|
|
Non-
Qualified
Deferred
Compen-
sation
Earnings
($)
|
|
All
Other
Compen-
sation
($)
|
|
Total
($)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gunther Than
|
2017
|
|
$
|
120,000 (1)
|
|
$
|
-0-
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
120,000
|
|
(Principal Chief Executive Officer, President and Director)
|
2016
|
|
|
120,000 (2)
|
|
-0-
|
|
|
-0-
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martin Maassen
|
2017
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
(Director)
|
2016
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NUMBER OF
SHARES |
|
PERCENT OF
SHARES |
||||||||
NAME AND ADDRESS OF
|
|
TITLE
|
|
BENEFICIALLY
|
|
BENEFICIALLY
|
||||||
BENEFICIAL OWNER
|
|
OF CLASS
|
|
OWNED
|
|
OWNED
|
||||||
Martin Maassen
|
|
|
Common
|
|
|
|
10,829,624
|
(1)
|
|
|
3.1
|
%
|
1340 Fawn Ridge Drive
|
|
|
|
|
|
|
|
|
|
|
|
|
West Lafayette, Indiana 47906
|
|
|
|
|
|
|
|
|
|
|
|
|
Gunther Than
|
|
|
Common
|
|
|
|
20,812,200
|
(2)
|
|
|
6.3
|
%
|
1550 Caton Center Drive, Suite E
|
|
|
Preferred
|
|
|
|
5,089,647
|
|
|
|
91.1%
|
%
|
Baltimore, Maryland 21227
|
|
|
|
|
|
|
|
|
|
|
|
|
Address
|
|
|
|
|
|
|
|
|
|
|
|
|
All Directors and officers as a group (3 members)
|
|
|
Common
|
|
|
|
31,641,824
|
|
|
9.4
|
%
|
|
|
|
Preferred
|
|
|
|
5,089,647
|
%
|
|
|
91.1
|
%
|
|
|
|
2017
|
|
|
|
2016
|
|
Audit fees
|
|
$
|
10,000
|
|
|
$
|
10,000
|
|
Audit related fees
|
|
|
0
|
|
|
|
0
|
|
Tax fees
|
|
|
0
|
|
|
|
0
|
|
All other fees
|
|
|
0
|
|
|
|
0
|
|
10.1
|
View Systems, Inc. 2010 Equity Incentive Plan (Incorporated by reference to exhibit 10.1 to Form 10-Q filed May 14, 2010)
|
|
|
10.2
|
View Systems, Inc. 2010 Service Provider Stock Compensation Plan (Incorporated by reference to exhibit 10.4 to Form 10-Q filed August 19, 2010)
|
|
|
10.3
|
Employment agreement between View Systems and Gunther Than, dated December 1, 2009 (Incorporated by reference to exhibit 10.1 to Form 8-K, filed January 11, 2010)
|
|
|
10.4
|
Subcontractor Agreement dated March 9, 2009 between MasTec North America, Inc. and View Systems, Inc. (Incorporated by reference to exhibit 10.3 for Form 10-Q, Amendment No. 1, for the period ended March 31, 2009)
|
|
|
10.3
|
Purchase Agreement, dated June 1, 2012 (Incorporated by reference to exhibit 10.1 to Form 8-K, filed July 3, 2012)
|
|
|
10.4
|
Amendment to Purchase Agreement, dated June 28, 2012 (Incorporated by reference to exhibit 10.2 to Form 8-K, filed July 3, 2012)
|
|
|
21.1
|
List of Subsidiaries*
|
|
|
31.1
|
Rule 13a-15(e)/15d-15(e) Certification by the Chief Executive Officer and Chief Financial Officer *
|
|
|
32.1
|
Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *
|
|
View Systems, Inc.
|
|
|
|
|
|
|
|
By:
|
/s/ Gunther Than
|
|
|
|
Gunther Than
|
|
|
|
Chief Executive Officer
|
|
|
|
(Principal executive officer, principal financial officer, and principal accounting officer)
|
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Gunther Than
|
|
Director, Chief Executive Officer and Treasurer
|
|
April 17, 2018
|
Gunther Than
|
|
|
|
|
|
|
|
|
|
/s/ Martin J. Maassen
|
|
Director
|
|
April 17, 2018
|
Martin J. Maassen
|
|
|
|
|
EXHIBIT 31
CERTIFICATION
Certification of Principal Executive Officer
Required By Rule 13a-14(A) of the Securities Exchange Act of 1934, As Amended,
As Adopted Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002
I, Gunther Than, certify that
1. | I have reviewed this annual report on Form 10-K for year ended December 31, 2017 of View Systems 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 registrant as of, and for, the periods presented in this report; |
4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined 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 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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of 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 control 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. |
Date: April 17, 2018 | By: | /s/ Gunther Than | |
Gunther Than | |||
Chief Executive Officer/Principal Financial Officer |
Exhibit 32
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
In connection with the Annual Report of View Systems Inc. (the “Company”) on Form 10-K for the year ending December 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Gunther Than, Chief Executive Officer of the Company, certifies to the best of his knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 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; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
A signed original of this written statement required by Section 906 has been provided to the Company, and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
By /s/ Gunther Than
Gunther Than
Director, Chief Executive Officer and Treasurer
APRIL 17, 2018
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Apr. 16, 2018 |
Aug. 04, 2017 |
|
Document And Entity Information | |||
Entity Registrant Name | VIEW SYSTEMS INC | ||
Entity Central Index Key | 0001075857 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 624,410 | ||
Entity Common Stock, Shares Outstanding | 326,705,526 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2017 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred Stock Shares Par Value | $ 0.001 | $ 0.001 |
Preferred Stock Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock Shares Issued | 5,589,647 | 5,589,647 |
Preferred Stock Shares Outstanding | 5,589,647 | 5,589,647 |
Common Stock Shares Par Value | $ 0.001 | $ 0.001 |
Common Stock Shares Authorized | 950,000,000 | 950,000,000 |
Common Stock Shares Issued | 326,705,526 | 326,705,526 |
Common Stock Shares Outstanding | 326,705,526 | 326,705,526 |
Consolidated Statements of Operations - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Revenues | ||
Product sales and Installation | $ 2,775 | $ 7,570 |
Revenue from Extended warranties | 31,533 | 50,725 |
Service income | 18,787 | |
Total revenue | 53,095 | 58,295 |
Cost of sales | 18,618 | 1,174 |
Gross profit | 34,477 | 57,121 |
Operating expenses | ||
General and administrative | 73,752 | 44,883 |
Professional fees | 43,398 | 5,000 |
Salaries and benefits | 120,553 | 144,101 |
Bad debt expense | 3,859 | |
Total operating expenses | 241,562 | 193,984 |
Loss from operations | (207,085) | (136,863) |
Other Income (expense) | ||
Forgiveness of debt | 41,031 | |
Interest expense | (36,624) | (53,756) |
Total other income (expense) | 4,407 | (53,756) |
Net loss | $ (202,678) | $ (190,619) |
Net loss per share (basic and diluted) | $ (0.00) | $ (0.00) |
Weighted average shares outstanding (basic and diluted) | 326,705,526 | 326,705,526 |
Consolidated Statements of Stockholders Deficit - USD ($) |
Common Stock |
Preferred Stock |
Stock Issuable [Member] |
Additional Paid-In Capital |
Retained Earnings (Deficit) |
Total |
---|---|---|---|---|---|---|
Beginning Balance, Shares at Dec. 31, 2015 | 6,089,647 | 312,205,526 | ||||
Beginning Balance, Value at Dec. 31, 2015 | $ 6,090 | $ 312,205 | $ 16,000 | $ 27,389,325 | $ (29,367,990) | |
Conversion preferred to common, Shares | (500,000) | 7,500,000 | ||||
Conversion preferred to common, Value | $ (500) | $ 7,500 | (70,000) | |||
Stock issued for services, Shares | 7,000,000 | |||||
Stock issued for services, Value | $ 7,000 | 9,800 | ||||
Net Loss | (190,619) | $ (190,619) | ||||
Ending Balance, Shares at Dec. 31, 2016 | 5,589,647 | 326,705,526 | ||||
Ending Balance, Value at Dec. 31, 2016 | $ 5,590 | $ 326,705 | 16,000 | 27,392,125 | (29,558,609) | (1,818,189) |
Net Loss | (202,678) | (202,678) | ||||
Ending Balance, Shares at Dec. 31, 2017 | 5,589,647 | 326,705,526 | ||||
Ending Balance, Value at Dec. 31, 2017 | $ 5,590 | $ 326,705 | $ 16,000 | $ 27,392,125 | $ (2,976,128) | $ (2,020,867) |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
View Systems, Inc. and Subsidiaries (the "Company") designs, develops and sells computer software and hardware used in conjunction with surveillance capabilities. The technology utilizes the compression and decompression of digital inputs. In March 2002, the Company acquired Milestone Technology, Inc., which has developed a concealed weapons detection portal. In July 2009, the Company acquired FibreXpress, Inc., which is a company that specializes in developing and selling equipment and components for the fiber optic and communication cable industries. During the second quarter of 2017, the Company established a new business line in the Erectile Dysfunction Medical market by opening one clinic within its' Medical Therapeutics subsidiary.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the audited consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016
Basis of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Milestone Technology, Inc., FibreXpress, Inc. and Medical Therapeutics. All significant intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from the estimates that were used.
Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid investments with original maturities of three months or less
Accounts Receivable
Accounts receivable consists of amounts due from customers. Management periodically reviews the open accounts and makes a determination as to the ultimate collectability of each account. Once it is determined that collection is in doubt the account is written off as a bad debt. In order to provide for accounts that may become uncollectible in the future, the Company has established an allowance for doubtful accounts. The balance of the allowance for doubtful accounts is based on management's judgment and the Company's prior experience with managing accounts receivable.
Management's determination is that the accounts receivable are collectible and therefore no allowance for possible uncollectible accounts receivable has been recorded for the years ended December 31, 2017 and 2016, respectively.
Revenue Recognition
The Company has three main products, namely the concealed weapons detection system, the visual first responder system and the Viewmaxx digital video system. In all cases revenue is considered earned when the product is shipped to the customer, installed (if necessary) and accepted by the customer as a completed sale. The concealed weapons detection system and the digital video system each require installation and training. The customer can engage us for installation and training, which is a revenue source separate and apart from the sale of the product. In those cases revenue is recognized at the completion of the installation and training and acceptance by the customer. However, the customer can also self-install or can engage another firm to provide installation and training. Each product has an unconditional 30 day warranty, during which time the product can be returned for a complete refund. Customers can purchase extended warranties, which provide for replacement or repair of the unit beyond the period provided by the unconditional warranty. Warranties can be purchased for various periods but generally they are for one year period that begins after any other warranties expire. The revenue from warranties is recognized on a straight line basis over the period covered by the warranty. Prior to the issuance of financial statements management reviews any returns subsequent to the end of the accounting period which are from sales recognized during the accounting period, and makes appropriate adjustments as necessary. Product prices are fixed or determinable and products are only shipped when collectability is reasonably assured. For our Medical Business, service revenue is considered earned when the service is provided.
Inventories
IInventories stated at the lower of cost or market. Cost is determined by the first-in-first-out method (FIFO). As of December 31, 2016 the Company's inventory consisted of a number of assembled units as well as unassembled parts of the product.
Property and Equipment
Property and equipment is recorded at cost and depreciated over their useful lives, using the straight-line and accelerated depreciation methods. Upon sale or retirement, the cost and related accumulated depreciation are eliminated from the respective accounts, and the resulting gain or loss is included in the results of operations. The useful lives of property and equipment for purposes of computing depreciation are as follows:
Equipment 5-7 years
Software tools 3 years
Repairs and maintenance charges which do not increase the useful lives of assets are charged to operations as incurred. Depreciation expense for the periods ended December 31, 2017 and 2016 amounted to $800 and $800, respectively. Income Taxes
Income taxes are recorded under the assets and liabilities method whereby deferred tax assets and liabilities are recognized for the future tax consequences, measured by enacted tax rates, attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carry forwards. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the rate change becomes effective. Valuation allowances are recorded for deferred tax assets when it is more likely than not that such deferred tax assets will not be realized.
The Company files income tax
returns in the U.S. federal jurisdictions, and in various state jurisdictions. The Company is no longer subject to U.S.
federal, state and local examinations by tax authorities for years prior to 2010. The Company policy is to recognize
interest related to unrecognized tax benefits as income tax expense. The Company believes that it has appropriate
support for the income tax positions it takes and expects to take on its tax returns, and that its accruals for tax
liabilities are adequate for all open years based on an assessment of many factors including past experience and
interpretations of tax law applied to the facts of each matter.
Research and Development
Research and development costs are expensed as incurred.
Advertising
Advertising costs are charged to operations as incurred. Advertising costs for the six months ended September 30, 2017 and 2016 were $3,322 and $125, respectively.
Nonmonetary Transactions
Nonmonetary transactions are accounted for in accordance with ASC 845 " Nonmonetary Transactions" which requires the transfer or distribution of a nonmonetary asset or liability to be based generally, on the fair value of the asset or liability that is received or surrendered, whichever is more clearly evident.
Financial Instruments
For most financial instruments, including cash, accounts receivable, accounts payable and accruals, management believes that the carrying amount approximates fair value, as the majority of these instruments are short-term in nature.
Stock-Based Compensation
The Company accounts for share-based compensation at fair value. Share-based compensation cost for stock options granted to employees, board members and service providers is determined at the grant date using an option pricing model that uses level 3 unobservable inputs. The value of the award that is ultimately expected to vest is recognized as expense on a straight-line basis over the requisite service period.
Net Loss Per Common Share
Basic net loss per common share is computed by dividing net loss available to common stockholder by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares and dilutive potential common share equivalents then outstanding. Potential common shares consist of shares issuable upon the exercise of stock options and warrants in addition to shares that may be issued in the event that convertible debt is exchanged for shares of common stock. The calculation of the net loss per share available to common stockholders for the periods ended December 31, 2017 and 2016 does not include potential shares of common stock equivalents, as their impact would be antidilutive. The following reconciles amounts reported in the financial statements:
|
GOING CONCERN |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | 2. GOING CONCERN
The Company has incurred and continues to incur, losses from operations. For the years ended December 31, 2017 and 2016, the Company incurred net losses of $202,678 and $190,619, respectively. In addition, certain notes payable have come due and the note holders are demanding payment.
Management is very actively working to cure these situations. It has implemented major plans to for the future growth and development of the Company. Management is in the process of renegotiating more favorable repayment terms on the notes payable and the Company anticipates that these negotiations will result in extended payment plans.
Historically, the Company has financed its operations primarily through private financing. It is management's intention to finance operations during the remainder of 2018 primarily through increased sales although there will still be a need for additional equity financing. In addition, management is actively seeking out mergers and acquisitions which would be beneficial to the future growth of the Company. There can be no assurance, however, that this financing will be successful and the Company may be required to further reduce expenses and scale back operations.
As described in Note 4, the Company is currently in default on a $50,000 loan from a stockholder.
The consolidated financial statements presented above and the accompanying Notes have been prepared on a going concern basis, which contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future, and does not include any adjustments to reflect possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result from the outcome of any extraordinary regulatory action, which would affect our ability to continue as a going concern.
Due to the conditions and
events discussed above, there is substantial doubt about the Company's ability to continue as a going concern for a period of one year from the issuance of these financial statements. |
NEW ACCOUNTING PRONOUNCEMENTS |
12 Months Ended |
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Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | 3. NEW ACCOUNTING PRONOUNCEMENTS
In February 2016, the FASB issued new guidance on the accounting for leases, which supersedes previous lease guidance. Under this guidance, for all leases with terms in excess of one year, including operating leases, the Company will be required to recognize on its balance sheet a lease liability and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance retains a distinction between finance leases and operating leases and the classification criteria is substantially similar to previous guidance. Additionally, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed. The Company is currently evaluating the impact of this guidance on its consolidated balance sheets. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted.
In May 2014, the FASB issued guidance on the recognition of revenue which provides a single, comprehensive revenue recognition model for all contracts with customers and supersedes most existing revenue recognition guidance. The main principle under this guidance is that an entity should recognize revenue at the amount it expects to be entitled to in exchange for the transfer of goods or services to customers. The Company is currently evaluating the impact of this guidance on its consolidated balance sheets and statement of operations. This guidance is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted for interim and annual reporting periods beginning after December 15, 2016. |
NOTES PAYABLE |
12 Months Ended |
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Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | 4. NOTES PAYABLE
Notes payable as of December 31, 2017 and December 31, 2016 consists of the of a demand loan payable dated September 18, 2009 in the amount of $50,000 with interest at the rate of 5% per month. The loan is secured by the Company's accounts receivable. The note was payable in full on December 17, 2009 and is currently in default. |
INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | 5. INCOME TAXES
For income tax purposes the Company has net operating loss carry forwards of $28,308,000 as of December 31, 2017 that may be used to offset future taxable income. In the instance of future corporate acquisitions, the net operating losses may be used to offset the future taxable income of a qualifying subsidiary corporation which meets IRS regulations governing such situations. The losses have accumulated since 1998 and they will start to expire in 2018. IRS regulations also provide that significant changes in ownership (greater than 50%) could result in the expiration of some of the net operating loss carry forwards. As of the date of this report the Company has not made an analysis of the changes in ownership to determine if any of these losses have expired.
The components of income tax expense (benefit) are as follows:
Net income tax benefit is not recognized at this time because there is no reasonable expectation that the benefit will be realized in the future.
The Company has adopted accounting rules that prescribe when to recognize and how to measure the financial statement effects, if any, of income tax positions taken or expected on its income tax returns. These new rules require management to evaluate the likelihood that, upon examination by relevant taxing jurisdictions, those income tax positions would be sustained.
Based on that evaluation, if it were more than fifty percent (50%) probable that a material amount of income tax would be imposed at the entity level upon examination by the relevant taxing authorities, a liability would be recognized in the accompanying balance sheet along with any interest and penalties that would result from that assessment. Should any such penalties and interest be incurred, the Company's policy would be to recognize them as operating expenses.
Due to continuous losses from operations the Company has assigned a full valuation allowance against its deferred tax assets.
The U.S. Tax Reform Act amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and business. For businesses, the Act reduces the corporate tax rate from a maximum of 35% to a flat 21% rate. The rate reduction is effective on January 1, 2018. As a result of the rate reduction, the Company has reduced the deferred tax asset balance as of December 31, 2017 by $3,680,000. As a result of the full valuation allowance on the net deferred tax assets, there was a corresponding adjustment to the valuation allowance for this same amount. Therefore, there is no impact on the Company's 2017 earnings for the law change. In accordance with SAB 118, the Company has determined that there is no deferred tax benefit or expense with respect to the re-measurement of certain deferred tax assets and liabilities due to the full valuation allowance against net deferred tax assets. Additional analysis of the law and the impact to the Company will be performed and any impact will be recorded in the respective quarter in 2018, if applicable. |
CONVERTIBLE PREFERRED STOCK |
12 Months Ended |
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Dec. 31, 2017 | |
Equity [Abstract] | |
CONVERTIBLE PREFERRED STOCK | 6. CONVERTIBLE PREFERRED STOCK
In July 2005 the Company issued 7,171,725 shares of Series A Preferred Stock in payment of services. The issuance had been previously authorized by the Board of Directors. Each share of Series A Preferred Stock has a liquidation preference, in the event of liquidation of the Company, of $0.001 per share before any payment or distribution is made to the holders of common stock.
During 2008 the Board of Directors approved a reverse split of the stock in which one new share of preferred stock was issued in exchange for each 80 shares of stock outstanding. Accordingly, the total issued of preferred stock was adjusted from 7,171,725 shares to 89,647 shares. The par value and the total authorized shares did not change.
Effective in 2010 the initial issuance of Series A Preferred can be converted into common stock in the ratio of 15:1. During 2011 the Board of Directors authorized the issuance of an additional 1,400,000 shares of Series A Preferred Stock in payment of a loan from a shareholder in the amount of $64,000 and also in payment of services in the amount of $34,000. These additional shares can be converted to common stock beginning in 2013. Each share is entitled to fifteen votes and shall be entitled to vote on any matters brought to a vote on the common stock shareholder.
During 2012 the Board of Directors authorized the issuance of an additional 1,500,000 shares of Series A Preferred Stock in payment of deferred compensation and current compensation in the amount of $161,463.
During 2013 the Board of Directors authorized the issuance of an additional 500,000 shares of Series A Preferred Stock in payment of professional services in the amount of $225,000.
During 2014 the Board of Directors authorized the issuance of an additional 2,000,000 shares of Series A Preferred Stock in payment of deferred and current compensation in the amount of $480,000.
During 2015 an owner of preferred stock elected to convert 1,400,000 shares of his preferred stock into 21,000,000 shares of the Company's common stock.
During 2015 the Board of Directors authorized the issuance of an additional 1,000,000 shares of Series A Preferred Stock in payment of deferred compensation of $37,500 and current compensation of $37,500.
During 2016 an owner of preferred stock elected to convert 500,000 shares of preferred stock into 7,500,000 shares of the Company's common stock. |
OPERATING LEASE |
12 Months Ended |
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Dec. 31, 2017 | |
Leases [Abstract] | |
OPERATING LEASE | 7. OPERATING LEASE
In 2015 the Company leased 1,500 sq. ft. of office space under a non-cancellable lease at 1900 Lansdowne Road, Baltimore, Maryland with a monthly rent of $1,595 for a period of 3 years. Effective July 31, 2016 the lease was terminated by mutual agreement with the landlord. In 2017, the Company leased office space at 6 Park Center Court, Owings Mills, Baltimore, Maryland for use as its' Medical Clinic and Corporate Office. The monthly rent is currently $2,126 and is on a month-to-month basis. Rent expense was $26,379 and $10,701 for the years ended December 31, 2017 and 2016, respectively. |
STOCK BASED COMPENSATION |
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STOCK BASED COMPENSATION | 8. STOCK BASED COMPENSATION
On April 2, 2010 the Company adopted its 2010 Equity Incentive Plan. Reserved for equity issuances under the Equity Incentive Plan are 50,000,000 shares of our common stock. During 2011 14,116,433 shares of common stock were issued under the provisions of the 2010 Equity Incentive Plan for which $92,065 of expenses were recognized.
On June 1, 2010 the Company adopted its 2010 Service Provider Stock Compensation Plan. Reserved for equity issuances under the Service Provider Stock Compensation Plan are 50,000,000 shares of our common stock. No equity issuances were made during the reporting period from the 2010 Service Provider Stock Compensation Plan.
During 2017 and 2016, the Company issued the following compensatory shares outside of its existing Stock Option and Restricted Share Plans at the discretion of the Board of Directors:
For the year ended December 31, 2016 there were 7,000,000 shares of common stock issued as a payment of interest in the amount of $16,800.
Independent contractors and consultants' expense was based on the estimated value of services rendered or the value of the common stock issued, if more reliably determined.
Stock Options and Warrants
On April 2, 2010, the Company adopted its 2010 Equity Incentive Plan, which authorized, among other forms of incentives, the issuance of stock options. Reserved for equity issuances under the 2010 Equity Incentive Plan are 50,000,000 shares of our common stock. No equity issuances have been made from the 2010 Equity Incentive Plan. Stock options, which may be tax qualified and non-qualified, are exercisable for a period of up to ten years at prices at or above market prices as established on the date of the grant.
Stock Options
Certain nonqualified stock options were issued during the period ended June 30, 2013 to a member of the board of directors as compensation for services performed.
The Company uses the Black-Scholes option pricing model to calculate the fair value of options. Significant assumptions used in this model include:
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RELATED PARTY TRANSACTIONS |
12 Months Ended |
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Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 9. RELATED PARTY TRANSACTIONS
Certain stockholders made cash advances to the Company to help with short-term working capital needs. The net proceeds from stockholders with unstructured payment plans amounted to $45,826 and $26,505 for the years ended December 31, 2017 and 2016, respectively. The total balance due on unstructured loans from stockholders amounted to $637,034 and $591,208 at December 31, 2017 and 2016, respectively. Loans from stockholders made with repayment terms are described in Note 4 above. |
ISSUABLE COMMON STOCK |
12 Months Ended |
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Dec. 31, 2017 | |
Equity [Abstract] | |
ISSUABLE COMMON STOCK | 10. ISSUABLE COMMON STOCK
As of December 31, 2017, and 2016 740,000 shares of the authorized shares, amounting to $16,000 had not been issued. |
CONTINGENT LIABILITY |
12 Months Ended |
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Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
CONTINGENT LIABILITY | 11. CONTINGENT LIABILITY
Effective January 1, 2015 the Board of Directors authorized a new employment contract with Gunther Than, CEO of View Systems, Inc. That employment contract provides that in the event of a change in control of the Board of Directors or a buyout or takeover or substantial change of management structure Mr. Than will receive a minimum of three year's salary plus 4.8 million shares of unrestricted stock of the equivalent in cash at Mr. Than's direction. Mr. Than's current base salary is $120,000 per annum. |
OPERATING SEGMENTS |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OPERATING SEGMENTS | 12. OPERATING SEGMENTS
The Company operates in two segments: (1) the design, development and sale of computer software and hardware used in conjunction with surveillance capabilities and (2) a newly established business line in the Erectile Dysfunction Medical field. The following table details net revenue and income before income taxes by segment:
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NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature of Operations | Nature of Operations
View Systems, Inc. and Subsidiaries (the "Company") designs, develops and sells computer software and hardware used in conjunction with surveillance capabilities. The technology utilizes the compression and decompression of digital inputs. In March 2002, the Company acquired Milestone Technology, Inc., which has developed a concealed weapons detection portal. In July 2009, the Company acquired FibreXpress, Inc., which is a company that specializes in developing and selling equipment and components for the fiber optic and communication cable industries. During the second quarter of 2017, the Company established a new business line in the Erectile Dysfunction Medical market by opening one clinic within its' Medical Therapeutics subsidiary. |
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Basis of Consolidation | Basis of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Milestone Technology, Inc., FibreXpress, Inc. and Medical Therapeutics. All significant intercompany accounts and transactions have been eliminated in consolidation. |
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Use of Estimates | Use of Estimates
Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from the estimates that were used.
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Cash and Cash Equivalents | Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid investments with original maturities of three months or less
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Accounts Receivable | Accounts Receivable
Accounts receivable consists of amounts due from customers. Management periodically reviews the open accounts and makes a determination as to the ultimate collectability of each account. Once it is determined that collection is in doubt the account is written off as a bad debt. In order to provide for accounts that may become uncollectible in the future, the Company has established an allowance for doubtful accounts. The balance of the allowance for doubtful accounts is based on management's judgment and the Company's prior experience with managing accounts receivable.
Management's determination is that the accounts receivable are collectible and therefore no allowance for possible uncollectible accounts receivable has been recorded for the years ended December 31, 2017 and 2016, respectively. |
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Revenue Recognition | Revenue Recognition
The Company has three main products, namely the concealed weapons detection system, the visual first responder system and the Viewmaxx digital video system. In all cases revenue is considered earned when the product is shipped to the customer, installed (if necessary) and accepted by the customer as a completed sale. The concealed weapons detection system and the digital video system each require installation and training. The customer can engage us for installation and training, which is a revenue source separate and apart from the sale of the product. In those cases revenue is recognized at the completion of the installation and training and acceptance by the customer. However, the customer can also self-install or can engage another firm to provide installation and training. Each product has an unconditional 30 day warranty, during which time the product can be returned for a complete refund. Customers can purchase extended warranties, which provide for replacement or repair of the unit beyond the period provided by the unconditional warranty. Warranties can be purchased for various periods but generally they are for one year period that begins after any other warranties expire. The revenue from warranties is recognized on a straight line basis over the period covered by the warranty. Prior to the issuance of financial statements management reviews any returns subsequent to the end of the accounting period which are from sales recognized during the accounting period, and makes appropriate adjustments as necessary. Product prices are fixed or determinable and products are only shipped when collectability is reasonably assured. For our Medical Business, service revenue is considered earned when the service is provided. |
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Inventories | Inventories
Inventories stated at the lower of cost or market. Cost is determined by the first-in-first-out method (FIFO). As of December 31, 2016 the Company's inventory consisted of a number of assembled units as well as unassembled parts of the product. |
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Property and Equipment | Property and Equipment
Property and equipment is recorded at cost and depreciated over their useful lives, using the straight-line and accelerated depreciation methods. Upon sale or retirement, the cost and related accumulated depreciation are eliminated from the respective accounts, and the resulting gain or loss is included in the results of operations. The useful lives of property and equipment for purposes of computing depreciation are as follows:
Equipment 5-7 years
Software tools 3 years
Repairs and maintenance charges which do not increase the useful lives of assets are charged to operations as incurred. Depreciation expense for the periods ended December 31, 2017 and 2016 amounted to $800 and $800, respectively. |
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Income Taxes | Income Taxes
Income taxes are recorded under the assets and liabilities method whereby deferred tax assets and liabilities are recognized for the future tax consequences, measured by enacted tax rates, attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carry forwards. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the rate change becomes effective. Valuation allowances are recorded for deferred tax assets when it is more likely than not that such deferred tax assets will not be realized.
The Company files income tax returns in the U.S. federal jurisdictions, and in various state jurisdictions. The Company is no longer subject to U.S. federal, state and local examinations by tax authorities for years prior to 2010. The Company policy is to recognize interest related to unrecognized tax benefits as income tax expense. The Company believes that it has appropriate support for the income tax positions it takes and expects to take on its tax returns, and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter.
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Research and Development | Research and Development
Research and development costs are expensed as incurred.
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Advertising | Advertising
Advertising costs are charged to operations as incurred. Advertising costs for the six months ended September 30, 2017 and 2016 were $3,322 and $125, respectively. |
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Nonmonetary Transactions | Nonmonetary Transactions
Nonmonetary transactions are accounted for in accordance with ASC 845 " Nonmonetary Transactions" which requires the transfer or distribution of a nonmonetary asset or liability to be based generally, on the fair value of the asset or liability that is received or surrendered, whichever is more clearly evident.
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Financial Instruments | Financial Instruments
For most financial instruments, including cash, accounts receivable, accounts payable and accruals, management believes that the carrying amount approximates fair value, as the majority of these instruments are short-term in nature.
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Stock-Based Compensation | Stock-Based Compensation
The Company accounts for share-based compensation at fair value. Share-based compensation cost for stock options granted to employees, board members and service providers is determined at the grant date using an option pricing model that uses level 3 unobservable inputs. The value of the award that is ultimately expected to vest is recognized as expense on a straight-line basis over the requisite service period.
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Net Loss Per Common Share | Net Loss Per Common Share
Basic net loss per common share is computed by dividing net loss available to common stockholder by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares and dilutive potential common share equivalents then outstanding. Potential common shares consist of shares issuable upon the exercise of stock options and warrants in addition to shares that may be issued in the event that convertible debt is exchanged for shares of common stock. The calculation of the net loss per share available to common stockholders for the periods ended December 31, 2017 and 2016 does not include potential shares of common stock equivalents, as their impact would be antidilutive. The following reconciles amounts reported in the financial statements:
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NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Common Share |
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INCOME TAXES (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of the net deferred tax assets |
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Components of income tax expense (benefit) |
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STOCK BASED COMPENSATION (Tables) |
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options |
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Assumptions Used | Annual Dividend -
Expected Life (in years) 5.00
Risk Free Interest Rate 0.78%
Expected Volatility 325.25% |
OPERATING SEGMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Segments |
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NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Accounting Policies [Abstract] | ||
Depreciation Expense | $ 800 | $ 800 |
Advertising Costs | $ 3,322 | $ 125 |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Net Loss Per Common Share (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Accounting Policies [Abstract] | ||
Net Loss | $ (202,678) | $ (190,619) |
Shares | 326,705,526 | 326,705,526 |
Per-share | $ 0.00 | $ (0.00) |
GOING CONCERN (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Net Loss | $ (202,678) | $ (190,619) |
Debt in Default | $ 50,000 |
NOTES PAYABLE (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Notes payable | $ 50,000 | $ 50,000 |
Due date | Dec. 17, 2009 | |
Interest rate | 5.00% |
INCOME TAXES - Components of the net deferred tax assets (Details) |
Dec. 31, 2017
USD ($)
|
---|---|
Income Tax Disclosure [Abstract] | |
Effect of net operating loss carry forward | $ 8,209,000 |
Less evaluation allowance | (8,209,000) |
Net deferred tax asset |
INCOME TAXES - Components of income tax expense (benefit) (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | ||
Net loss | $ (202,678) | $ (190,619) |
Income tax expense (benefit) applying prevailing Federal and state income tax rates | (59,000) | (80,000) |
Less valuation allowance | 59,000 | 80,000 |
Net income tax expense (benefit) |
INCOME TAXES (Details Narrative) |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
| |
Income Tax Disclosure [Abstract] | |
Net operating loss carryforwards | $ 28,308,000 |
Expiration date | Dec. 31, 2017 |
Tax Rate | 35.00% |
Reduced Tax Rate | 21.00% |
Reduced the deferred tax asset | $ 3,680,000 |
OPERATING LEASE (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Leases [Abstract] | ||
Monthly Rent | $ 2,126 | |
Rent Expense | $ 26,379 | $ 10,701 |
STOCK BASED COMPENSATION (Details Narrative) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2011 |
Dec. 31, 2010 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Shares for Equity Incentive Plan | 50,000,000 | ||
Shares issued For Expenses and Liabilitites | 7,000,000 | 14,116,433 | |
Amount of Expenses and Liabilities | $ 16,800 | $ 92,065 |
STOCK BASED COMPENSATION - Stock Options (Details) |
12 Months Ended |
---|---|
Dec. 31, 2017
$ / shares
shares
| |
Stock Based Compensation - Stock Options Details | |
Stock options, outstanding, beginning | shares | 10,000,000 |
Stock options, outstanding, ending | shares | 10,000,000 |
Stock options, exercisable | shares | 10,000,000 |
Stock options per share, outstanding, beginning | $ / shares | $ 0.03 |
Stock options per share, outstanding, ending | $ / shares | 0.03 |
Stock options per share, exercisable | $ / shares | $ 0.03 |
Stock options contractual life, outstanding, beginning | 1 year 2 months 4 days |
Stock options contractual life,outstanding, ending | 5 months |
Exercisable | 5 months |
STOCK BASED COMPENSATION - Assumptions Used (Details) |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Share-based Compensation [Abstract] | |
Expected Life (in years) | 5 years |
Risk Free Interest Rate | 0.78% |
Expected Volatility | 325.25% |
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Related Party Transactions [Abstract] | ||
Due to Shareholders | $ 637,034 | $ 591,208 |
Net Proceeds from Stockholders | $ 45,826 | $ 26,505 |
ISSUABLE COMMON STOCK (Details Narrative) |
Dec. 31, 2017
USD ($)
shares
|
---|---|
Equity [Abstract] | |
Stock unissued, shares | shares | 740,000 |
Stock unissued, value | $ | $ 16,000 |
CONTINGENT LIABILITY (Details Narrative) |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
shares
| |
Contingent Liability Details Narrative | |
Base Salary | $ | $ 120,000 |
Shares Issued as Salary | shares | 4,800,000 |
OPERATING SEGMENTS - Operating Segments (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Total revenue | $ 53,095 | $ 58,295 |
Net loss | (202,678) | (190,619) |
Security Systems [Member] | ||
Total revenue | 34,308 | 58,295 |
Net loss | (138,257) | (190,619) |
Medical [Member] | ||
Total revenue | 18,787 | |
Net loss | $ (64,421) |
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