0001493152-19-012437.txt : 20190814 0001493152-19-012437.hdr.sgml : 20190814 20190814145220 ACCESSION NUMBER: 0001493152-19-012437 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 46 CONFORMED PERIOD OF REPORT: 20190630 FILED AS OF DATE: 20190814 DATE AS OF CHANGE: 20190814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADVANCED CREDIT TECHNOLOGIES INC CENTRAL INDEX KEY: 0001437517 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 262118480 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-170132 FILM NUMBER: 191025564 BUSINESS ADDRESS: STREET 1: 4947 OLDHAM STREET CITY: SARASOTA STATE: FL ZIP: 34238 BUSINESS PHONE: 612-961-4536 MAIL ADDRESS: STREET 1: 4947 OLDHAM STREET CITY: SARASOTA STATE: FL ZIP: 34238 10-Q 1 form10-q.htm

 

 

 

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 June 30, 2019

 

or

 

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

 

Commission File Number: 333-170132

 

Advanced Credit Technologies, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

(State or other jurisdiction of
incorporation or organization)

26-2118480

(I.R.S. Employer
Identification No.)

   

871 Venetia Bay Boulevard, #202

Venice, Florida

(Address of principal executive offices)

34285

(Zip Code)

   

(612)961-4536

(Registrant’s telephone number, including area code)

 

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post 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]

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes [  ] No [  ]

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class   Trading Symbol   Name of Each Exchange on Which Registered
Common   ACRT   OTC Pink

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

As of the date of this filing, there were 67,730,515 shares of the Issuer’s common stock issued and outstanding and held by approximately 116 shareholders, six of which are deemed affiliates within the meaning of Rule 12b-2 under the Exchange Act.

 

As of the date of this filing, there were 30,000 shares of the Issuer’s preferred stock issued and outstanding.

 

 

 

 
 

 

Advanced Credit Technologies, Inc.

 

FORM 10-Q

 

For The Fiscal Quarter Ended June 30, 2019

 

TABLE OF CONTENTS

 

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

 

 2 
 

 

PART I

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This quarterly report on Form 10-Q and the documents incorporated by reference herein contain forward-looking statements that are not statements of historical fact and may involve a number of risks and uncertainties. These statements related to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future prospects, developments and business strategies. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by forward-looking statements.

 

In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “proposed,” “intended,” or “continue” or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other “forward-looking” information. There may be events in the future that we are not able to accurately predict or control. Before you invest in our securities, you should be aware that the occurrence of any of the events described in this quarterly report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline and you could lose all or part of your investment. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this Annual Report to conform these statements to actual results.

 

The following factors are among those that may cause actual results to differ materially from our forward-looking statements:

 

  General economic and industry conditions;
  Out history of losses, deficits and negative operating cash flows;
  Our limited operating history;
  Industry competition;
  Environmental and governmental regulation;
  Protection and defense of our intellectual property rights;
  Reliance on, and the ability to attract, key personnel;
  Other factors including those discussed in “Risk Factors” in this quarterly report on Form 10-Q and our incorporated documents.

 

You should keep in mind that any forward-looking statement made by us in this quarterly report or elsewhere speaks only as of the date on which we make it. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this annual report after the date of filing, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this annual report or elsewhere might not occur.

 

In this annual report on Form 10-Q, the terms “ACRT,” “Company,” “we,” “us” and “our” refer to Advanced Credit Technologies, Inc. and its wholly-owned subsidiary CyberloQ Technologies, LTD.

 

 3 
 

 

Item 1. FINANCIAL STATEMENTS

 

Advanced Credit Technologies, Inc.

CONSOLIDATED CONDENSED BALANCE SHEETS

 

  June 30, 2019   December 31, 2018 
   (unaudited)     
ASSETS        
Current assets          
Cash  $50,823   $21,009 
Accounts Receivable   50,300    - 
Commitment Receivable   -    9,000 
Total Current Assets   101,123    30,009 
           
Fixed Assets          
Software and Computer Equipment, Net   505,748    550,679 
Total Fixed Assets   505,748    550,679 
           
Total Assets  $606,871   $580,688 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
Current Liabilities          
Accounts Payable and Accrued Expenses  $19,856   $9,851 
Deposits  $25,000   $- 
Customer Prepayments   27,087    39,585 
Loans Payable – Stockholders   35,000    45,000 
Total Current Liabilities   106,943    94,436 
           
Total Liabilities   106,943    94,436 
           
Commitments and Contingencies   -    - 
           
Stockholders’ Equity          
           
Common stock: $0.001 par value,100,000,000 shares authorized; 67,580,515 and 65,830,515 shares issued and outstanding as of June 30, 2019 and December 31, 2018 respectively  $67,581   $65,831 
          
Preferred Stock $0.001 per value - 30,000 shares authorized; issued and outstanding as of June 30, 2019 and December 31, 2018, respectively   30    30 
           
Shares to be Issued: 3,333,333 and 3,483,333 common shares as of June 30, 2019 and December 31, 2018, respectively   300,000    348,000 
           
Stock Subscription Receivable   (50,000)   (150,000)
           
Additional Paid in Capital  $4,093,922   $3,884,102 
           
Accumulated Deficit   (3,911,605)   (3,661,711)
           
Total Stockholders’ Equity   499,928    486,252 
           
Total Liabilities and Stockholders’ Equity  $606,871   $580,688 

 

See accompanying notes to financial statements

 

F-1

 

 

Advanced Credit Technologies, Inc.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

 

   For the Three Months Ended June 30,   For the Six Months Ended June 30, 
   2019   2018   2019   2018 
   (unaudited)   (unaudited)   (unaudited)   (unaudited) 
Revenue                    
Service Revenue  $66,606   $-   $72,855   $- 
Total Revenue   66,606    -    72,855    - 
                     
Operational Expense                    
Sales Commissions   9,941    -    9,941    - 
Professional Fees   16,486    15,734    44,191    44,548 
Research   5,165    -    6,193    1,500 
Stock Compensation   9,285    29,751    18,570    59,503 
Officer’s Compensation   67,500    67,500    135,000    137,489 
Travel and Entertainment   19,578    8,215    25,055    23,910 
Rent   150    225    300    375 
Depreciation   30,669    30,013    60,681    60,025 
Computer and Internet   6,300    1,648    9,774    3,658 
Office Supplies and Expenses   2,046    1,444    2,830    3,320 
Other Operating Expenses   6,381    2,534    10,114    15,084 
Total Operating Expenses   173,501    157,064    322,649    349,412 
                     
Loss from Operations   (106,895)   (157,064)   (249,794)   (349,412)
                     
Other Income (Expense)                    
Gain (Loss) of Settlement of Debt   -    -    -    (12,000)
Interest   (15)   (313)   (100)   (313)
                     
Total Other Income (Expenses)   (15)   (313)   (100)   (12,313)
                     
Provision for Income Taxes   -    -    -    - 
                     
Net Loss  $(106,910)  $(157,377)  $(249,894)  $(361,725)
                     
Loss per common share-Basic and diluted  $(0.002)  $(0.002)  $(0.00)  $(0.006)
                     
Weighted Average Number of Common Shares Outstanding Basic and diluted   67,016,348    63,180,885    66,804,556    63,052,145 

 

See accompanying notes to financial statements

 

F-2

 

 

Advanced Credit Technologies, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (unaudited)

From January 1, 2018 to June 30, 2019

 

   Common (Issued)   Common (Unissued)   Preferred Stock   Add’l Paid-In    Accum.    
   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Total 
Balance as of December 31, 2017   61,982,181   $61,982    150,000   $12,000    30,000   $30   $3,141,639   $(2,621,252)  $594,399 
                                              
Proceeds from Issuance of Common Stock   1,000,000    1,000    -    -    -    -    99,000    -    100,000 
                                              
Warrants Issued for Services   -    -    -    -    -    -    29,753    -    29,753 
                                              
Shares issued for conversion of debt   60,000    61              -    -    17,939    -    18,000 
                                              
Net loss for quarter ended March 31, 2018   -    -    -    -    -    -    -    (204,348)   (204,348)
                                              
Balance as of March 31, 2018   63,042,181   $63,043    150,000   $12,000    30,000   $30   $3,288,331   $(2,825,600)  $537,804 
                                              
Proceeds from Issuance of Common Stock   183,334    182    -    -    -    -    19,817    -    19,999 
                                              
Warrants Issued for Services   -    -    -    -    -    -    29,751    -    29,751 
                                              
Shares issued for conversion of debt   150,000    150    (150,000)   (12,000)   -    -    11,850    -    - 
                                              
Net loss for quarter ended June 30, 2018   -    -    -    -    -    -    -    (157,377)   (157,377)
                                              
Balance as of June 30, 2018   63,375,515   $63,375    -   $-    30,000   $30   $3,349,749   $(2,982,977)  $430,177 
                                              
Proceeds from Issuance of Common Stock   2,020,000    2,020    -    -    -    -    199,980    -    202,000 
                                              
Unissued Common Stock   -    -    -    100,000    -    -    -    -    100,000 
                                              
Warrants Issued for Services   -    -    -    -    -    -    9,285    -    9,285 
                                              
Shares issued for services   435,000    436    -    -    -    -    82,864    -    83,300 
                                              
Options Isssued for Services   -    -    -    -    -    -    203,536    -    203,536 
                                              
Net loss for quarter ended September 30, 2018   -    -    -    -    -    -    -    (473,623)   (473,623)
                                              
Balance as of September 30, 2018   65,830,515   $65,831    -   $100,000    30,000   $30   $3,845,414   $(3,456,600)  $554,675 
                                              
Unissued Common Stock   -    -    -    (150,000)   -    -    -    -    (150,000)
                                              
Warrants Issued for Services   -    -    -    -    -    -    9,285    -    9,285 
                                              
Shares issued for services   -    -    -    48,000    -    -    -    -    48,000 
                                              
Options Isssued for Services   -    -    -    -    -    -    29,403    -    29,403 
                                              
Stock subscriptions   -    -    -    200,000    -    -    -    -    200,000 
                                              
Shares issued for conversion of debt   -    -    -    -    -    -    -    -    - 
                                              
Net loss for quarter ended December 31, 2018   -    -    -    -    -    -    -    (205,111)   (205,111)
                                              
Balance as of December 31, 2018   65,830,515   $65,831    -   $198,000    30,000   $30   $3,884,102   $(3,661,711)  $486,252 
                                              
Proceeds from Issuance of Common Stock   200,000    200                        19,800    -    20,000 
                                              
Warrants Issued for Services                                 9,285    -    9,285 
                                              
Stock subscriptions                  75,000                   -    75,000 
                                              
Net loss for quarter ended March 31, 2019   -    -    -    -    -    -    -    (142,984)   (142,984)
                                              
Balance as of March 31, 2019   66,030,515    66,031    -    273,000    30,000    30    3,913,187    (3,804,695)   447,553 
                                              
Proceeds from Issuance of Common Stock   1,250,000    1,250                        123,750    -    125,000 
                                              
Stock Issued for Services   300,000    300         (48,000)             47,700    -    - 
                                              
Warrants Issued for Services                                 9,285    -    9,285 
                                              
Stock subscriptions                  25,000                   -    25,000 
                                              
Net loss for quarter ended June 30, 2019   -    -    -    -    -    -    -    (106,910)   (106,910)
                                              
Balance as of June 30, 2019   67,580,515    67,581    -    250,000    30,000    30    4,093,922    (3,911,605)   499,928 

 

See accompanying notes to financial statements

 

F-3

 

 

Advanced Credit Technologies, Inc.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30,

 

   2019   2018 
   (unaudited)   (unaudited) 
           
OPERATING ACTIVITIES          
Net loss  $(249,894)  $(361,725)
Adjustments to reconcile net loss to net cash used in operating activities:          
Gain (Loss) of Settlement of Debt   -    12,000 
Depreciation   60,681    60,025 
Stock Compensation   18,570    59,503 
Change in Operating Assets and Liabilities:          
Advanced Commissions   -    (1,646)
Accounts Receivable   (50,300)   - 
Commitment Receivable   9,000    - 
Accounts Payable and Accrued Expenses   10,005    17,672 
Deposits   25,000    - 
Customer Prepayments   (12,498)   6,832 
Net Cash Used in Operating Activities   (189,436)   (207,339)
           
INVESTING ACTIVITIES          
Software   (15,750)   - 
Net cash provided by (used) in investing activities   (15,750)   - 
           
FINANCING ACTIVITIES          
Proceeds from Common Stock Issuance   145,000    120,000 
Proceeds from Common Stock to be Issued   100,000    - 
Repayment of Note Principal   (10,000)   (25,000)
Net Cash Provided by Financing Activities   235,000    95,000 
           
Net Increase (Decrease) in Cash and Equivalents   29,814    (112,339)
Cash and Equivalents at Beginning of the Period   21,009    112,799 
Cash and Equivalents at End of the Period  $50,823   $460 
           
SUPPLEMENTAL CASH FLOW INFORMATION          
Interest Paid  $(100)  $313 
Income Taxes Paid  $-   $- 
           
NON-CASH DISCLOSURES          
Company issued 60,000 shares of Stock for payment of $6,000 accrued expenses  $-   $6,000 

 

See accompanying notes to financial statements

 

F-4

 

 

 Advanced Credit Technologies, Inc.

 

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (unaudited)

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization and Nature of Business

 

ACRT (“the Company’s TurnScor® and CyberloQ™ products”, “We” or the “Company”) is a development-stage technology company focused on fraud prevention and credit management. The Company was incorporated in the State of Nevada on February 25, 2008.

 

The Company offers a proprietary software platform branded as CyberloQ™ . While previously the Company licensed CyberloQ, in the third quarter of 2017, the Company acquired the CyberloQ technology and is now the exclusive owner of CyberloQ.

 

The CyberloQ Vault is a “cloud based’ security protocol that allows clients the ability to send/receive secure DATA without having to use traditional e-mail which is prone to a breach. This CyberloQ service uses CLOUD BASED encryption and a secure web portal to send/receive confidential DATA, the SENDER and RECEIVER both must have authenticated their position within the prescribed GEO coordinates as well as authenticate their mobile devices prior to SENDING/RECEIVING any DATA. Thus rendering a hack or breach utterly useless for the encrypted DATA is unusable without the CyberloQ authentication component.

 

In addition to CyberloQ, the Company offers a web-based proprietary software platform under the brand name Turnscor® which allows customers to monitor and manage their credit from the privacy of their own homes. Although individuals can sign-up for Turnscor on their own, the Company also intends to market Turnscor to certain institutional clients, where appropriate, in conjunction with CyberloQ as a value-added benefit to offer their customers.

 

On June 15, 2017, the Company created a private limited company in the United Kingdom named CyberloQ Technologies LTD. CyberloQ Technologies LTD is a wholly-owned subsidiary of the Company, and any business that the Company has in the United Kingdom will be transacted through CyberloQ Technologies LTD. However, to date CyberloQ Technologies LTD has not had any operating activity or generated any revenue for the Company.

 

Basis of Presentation

 

The financial statements of the Company have been prepared using the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America and the rules of the Securities and Exchange Commission. All amounts are presented in U.S. dollars. The Company has adopted a December 31 fiscal year end.

 

Certain information and note disclosures normally included in our annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with a reading of the financial statements and notes thereto included in our Annual Report on From 10-K for the fiscal year ended December 31, 2018, as filed with the U.S. Securities and Exchange Commission.

 

Principles of Consolidation – The consolidated financial statements include the accounts of the Company and its wholly-owned or controlled operating subsidiaries. All intercompany accounts and transactions have been eliminated.

 

Reclassification

 

Certain reclassifications have been made to conform previously reported data to the current presentation. These reclassifications have no effect on our net income (loss) or financial position as previously reported.

 

F-5

 

 

Use of Estimates

 

In preparing these financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the year reported. Actual results may differ from these estimates. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 

Cash and Cash Equivalents

 

Cash equivalents are comprised of certain highly liquid investments with maturities of three months or less when purchased. The Company maintains its cash in bank deposit accounts, which at times, may exceed federally insured limits. As of June 30, 2019 and December 31, 2018, the Company had no deposits in excess of federally-insured limits.

 

Research and Development, Software Development Costs, and Internal Use Software Development Costs

 

Software development costs are accounted for in accordance with ASC Topic No. 985. Software development costs are capitalized once technological feasibility of a product is established and such costs are determined to be recoverable. For products where proven technology exists, this may occur very early in the development cycle. Factors we consider in determining when technological feasibility has been established include (i) whether a proven technology exists; (ii) the quality and experience levels of the individuals developing the software; (iii) whether the software is similar to previously developed software which has used the same or similar technology; and (iv) whether the software is being developed with a proven underlying engine. Technological feasibility is evaluated on a product-by-product basis. Capitalized costs for those products that are canceled or abandoned are charged immediately to cost of sales. The recoverability of capitalized software development costs is evaluated on the expected performance of the specific products for which the costs relate.

 

Internal use software development costs are accounted for in accordance with ASC Topic No. 350 which requires the capitalization of certain external and internal computer software costs incurred during the application development stage. The application development stage is characterized by software design and configuration activities, coding, testing and installation. Training costs and maintenance are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality.

 

In accounting for website software development costs, we have adopted the provisions of ASC Topic No. 350. ASC Topic No. 350 provides that certain planning and training costs incurred in the development of website software be expensed as incurred, while application development stage costs are to be capitalized. During the periods ending June 30, 2019 and 2018, we expensed $6,193 and $1,500, respectively, for expenditures on research and development. None was paid to related parties.

 

Fixed Assets, Intangibles and Long-Lived Assets

 

The Company records its fixed assets at historical cost. The Company expenses maintenance and repairs as incurred. Upon disposition of fixed assets, the gross cost and accumulated depreciation are written off and the difference between the proceeds and the net book value is recorded as a gain or loss on sale of assets. The Company depreciates its fixed assets over their respective estimated useful lives ranging from three to fifteen years.

 

The Company follows FASB ASC 360-10, “Property, Plant, and Equipment,” which established a “primary asset” approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long-lived asset to be held and used. Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell. As of June 30, 2019 and December 31, 2018, the Company had not experienced impairment losses on its long-lived assets.

 

F-6

 

 

Revenue Recognition

 

Effective January 1, 2018, the Company adopted the requirements of ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09 or ASC 606). The adoption of ASC 606 resulted in changes to the Company’s accounting policies for revenue recognition previously recognized under ASC 605 (Legacy GAAP), as detailed below. However, since the Company had not earned any revenue prior to adopting ASC 606, this policy change had no effect on any financial statements from prior periods, thus no adjustments have been made to any prior periods related to the adoption of ASC 606.

 

Revenue Recognition Policy

 

Under ASC 606, the Company recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. To achieve the core principle of ASC 606, the Company performs the following steps:

 

1) Identify the contract(s) with a customer;

 

2) Identify the performance obligations in the contract;

 

3) Determine the transaction price;

 

4) Allocate the transaction price to the performance obligations in the contract; and

 

5) Recognize revenue when (or as) we satisfy a performance obligation.

 

The Company derives its revenue from two sources: (1) subscription revenues, which are comprised of subscription fees from customers utilizing the Company’s TurnScor®, CyberloQ™ and CyberloQ Vault products and from customers purchasing additional support beyond the standard support that is included in the basic subscription fees; and (2) related professional services and other revenue, which consists primarily of certain performance obligations related to set-up, ingestion, consulting and training fees. The Company’s subscription arrangements provide customers the right to access the Company’s hosted software applications. Customers do not have the right to take possession of the Company’s software during the hosting arrangement.

 

As of June 30, 2019, the Company had $0 in contract assets, as well as a contract liability of $37,087 to perform on contracts. As of December 31, 2018, the Company has $0 in contract assets, however there was a commitment receivable of $9,000 from a customer’s non-refundable two year (beginning August 28, 2018) service contract, as well as a contract liability of $39,585 to perform on that contract as of December 31, 2018. The contract liability will be reduced by $2,083 per month as the Company provides a non-exclusive, non-transferable license to use the CyberloQ Vault Services for the customer’s internal purposes and earns and recognizes related revenue.

 

   Contract Asset   Contract Liability 
December 31, 2018  $0   $39,585 
Less: revenue earned and recognized   -    (12,498)
June 30, 2019  $0   $27,087 

 

F-7

 

 

Fair Value Measurements

 

For certain financial instruments, including accounts receivable, accounts payable, accrued expenses, interest payable, advances payable and notes payable, the carrying amounts approximate fair value due to their relatively short maturities.

 

The Company has adopted FASB ASC 820-10, “Fair Value Measurements and Disclosures.” FASB ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

 

  Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
     
  Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
     
  Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

The Company did not identify any other non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value in accordance with FASB ASC 815.

 

In February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” now known as ASC Topic 825-10 “Financial Instruments.” ASC Topic 825-10 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. FASB ASC 825-10 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. The Company has adopted FASB ASC 825-10. The Company chose not to elect the option to measure the fair value of eligible financial assets and liabilities.

 

Segment Reporting

 

FASB ASC 280, “Segment Reporting” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has one operating segment.

 

Advertising

 

Advertising costs are expensed as incurred. Advertising expense for the periods ended June 30, 2019 and 2018 were $4,769 and $11,418, respectively.

 

Income Taxes

 

Deferred income taxes are provided using the liability method (in accordance with ASC 740) whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all-of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

 

F-8

 

 

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Applicable interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statements of operations. The Company is not aware of uncertain tax positions.

 

Earnings (Loss) Per Share

 

Earnings per share is calculated in accordance with the FASB ASC 260-10, “Earnings Per Share.” Basic earnings (loss) per share is based upon the weighted average number of common shares outstanding. Diluted earnings (loss) per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

 

At June 30, 2019 and December 31, 2018 the Company has 500,000 and 1,125,000 warrants as well as 1,200,000 and 1,200,000 options issued (respectively) that can be exercised and could be dilutive to the existing number of shares issued and outstanding. However, due to the Company’s periods of losses, the basic weighted average is equal to the diluted weighted average shares outstanding.

 

The computation of earnings per share of common stock is based on the weighted average number of shares outstanding at the date of the financial statements.

 

Stock Based Compensation

 

The Company adopted FASB ASC Topic 718 – Compensation – Stock Compensation (formerly SFAS 123R), which establishes the use of the fair value-based method of accounting for stock-based compensation arrangements under which compensation cost is determined using the fair value of stock-based compensation determined as of the date of grant and is recognized over the periods in which the related services are rendered. For stock-based compensation, the Company recognizes an expense in accordance with FASB ASC Topic 718 and values the equity securities based on the fair value of the security on the date of grant. Stock option and warrant awards are valued using the Black-Scholes option-pricing model, which according to ASC 820-10 is a level 3 value on the hierarchy. Black Scholes assumptions were calculated using stock price at grant date between $0.29 to $0.149; exercise prices between $0.15 to $0.20: life expectancy between ½ year to 5 years; and volatility ranging from 163% to 68%.

 

Recent Accounting Pronouncements

 

In July 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting. The amendments expand the scope of ASC 718, Compensation – Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees and to supersede the guidance in ASC 505-50, Equity-Based Payments to Non-Employees. The accounting for nonemployee awards will now be substantially the same as current guidance for employee awards. ASU 2018-07 impacts all entities that issue awards to nonemployees in exchange for goods or services to be used or consumed in the grantor’s own operations, as well as to nonemployees of an equity method investee that provide goods or services to the investee that are used or consumed in the investee’s operations. ASU 2018-07 aligns the measurement-date guidance for employee and nonemployee awards using the current employee model, meaning that the measurement date for nonemployee equity-classified awards generally will be the grant date, while liability-classified awards generally will be the settlement date. ASU 2018-07 is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company has determined that there is no retroactive effect on its financial reports from the adoption of this standard. The Company adopted ASU 2018-07 on January 1, 2019.

 

F-9

 

 

NOTE 2 – FIXED ASSETS

 

Software and computer equipment, recorded at cost, consisted of the following:

 

   June 30, 2019   December 31, 2018 
Software and computer equipment  $736,500   $720,750 
Less: accumulated depreciation   (230,752)   (170,071)
Property and equipment, net  $505,748   $550,679 

 

Depreciation expense was $30,669 and $60,681; $30,013 and 60,025 for the three and six month periods ended June 30, 2019 and 2018, respectively.

 

NOTE 3 – GOING CONCERN

 

The Company has incurred losses since Inception resulting in an accumulated deficit of $3,911,605 as of June 30, 2019 that includes a loss of $106,910 for the quarter ended June 30, 2019. Further losses are anticipated in the development of its business. Accordingly, there is substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued.

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that could result from the outcome of this uncertainty.

 

The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and, or, obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.

 

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

 

NOTE 4 – DEPOSITS

 

The Company holds amounts payable to others as “deposits”, these include; $15,000 prepaid stock purchase whose stock subscription agreement is dated July 2019; $10,000 down payment from a customer to secure future services.

 

NOTE 5 – STOCKHOLDERS’ EQUITY

 

Common Stock

 

The Company has 100,000,000 shares of $.001 par value common stock authorized as of June 30, 2019 and December 31, 2018.

 

The Company has an agreement to issue 3,333,333 common shares for $300,000 by June 30, 2019. Currently, the Company has collected $250,000 towards that agreement, and is disclosing the full amount and the related 3,333,333 common shares as “To be Issued”. Once the remaining stock subscription of $50,000 is collected, the Company will issue the entire 3,333,333 common shares. In addition, the Company received a $15,000 deposit to purchase 150,000 shares of common stock which were subscribed and issued in July.

 

F-10

 

 

During 2018, the Company received $322,000 in payment for 3,203,334 shares of common stock; received $83,300 in services for 435,000 shares of common stock. Also during the same period, the Company issued 60,000 shares of common stock in payment of $6,000 of accrued legal fees, recognizing a loss on settlement of debt of $12,000; also, the Company converted $12,000 of debt into 150,000 shares, these shares were previously recorded as “Shares to be Issued” in the Balance Sheet. There were 65,830,515 shares of common stock issued and outstanding as of December 31, 2018.

 

During 2019, the Company received $145,000 in payment for 1,450,000 shares of common stock; issued 300,000 shares to officers in conjunction with their 2018 service agreement, which were previously recorded as “Shares to be Issued” in the balance sheet. There were 67,580,515 shares of common stock issued and outstanding as of June 30, 2019.

 

Preferred Stock

 

The Company did not have any preferred stock prior to 2017. In April of 2017, the Company amended its articles of incorporation to create a new class of stock designated Series A Super Voting Preferred Stock consisting of thirty-thousand (30,000) shares at par value of $0.001 per share. Certain rights, preferences, privileges and restrictions were established for the Series A Preferred Stock as follows: (a) the amount to be represented in stated capital at all times for each share of Series A Preferred Stock shall be its par value of $0.001 per share; (b) except as otherwise required by law, holders of shares of Series A Preferred Stock shall vote together with the common stock as a single class and the holders of Series A Preferred Stock shall be entitled to five-thousand (5,000) votes per share of Series A Preferred Stock; and (c) in the event of any liquidation, dissolution or winding-up of the Company, either voluntary or involuntary, the holders of the Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of assets of the Corporation to the holders of the common stock, the original purchase price paid for the Series A Preferred Stock. All 30,000 shares of the Series A Super Voting Preferred Stock were issued in 2017.

 

NOTE 6 – COMMITMENTS

 

The Company rents office space on a month to month basis for its main office at 871 Venetia Bay Blvd Suite #202 Venice, FL 34285. Monthly rent for this space is $50. All conditions have been met and paid by the Company.

 

In 2015, in conjunction with a proposed TurnScor Card platform, the Company signed Investor Royalty and Warrant Agreements with four parties. In exchange for the funds contributed by the four parties, the Company agreed to:

 

1. Pay the investors monthly residuals of 2.0% to 5% per month on the gross revenue after expenses generated by the Company’s primary platform in conjunction with the Company’s TurnScor Card;
   
2. Pay the investors a residual in perpetuity on 2% to 5% of all TurnScor Card sub-platform revenue generated; and
   
3. Issue warrants to investors all of which have either been exercised or expired.

 

The Company does not plan to proceed with the TurnScor Card at this time.

 

During fiscal year 2018, the Company wrote off $17,646 in advanced commissions paid to a sales person who dissolved their contractor agreement with the Company.

 

The Company has commission agreements as follows:

 

An agreement with a shareholder and officer of the Company stating that the executive will be entitled to a two-and-a half-percent (2.5%) commission of the gross revenue recorded by the Company for any customer contracts that are closed by the Company at the time of and during the duration of the agreement. These commissions are payable quarterly upon receipt of customer revenues.

 

F-11

 

 

An agreement with an independent company granting that company a non-exclusive, non-transferable license to provide the CyberloQ Vault Services to its customers and the revenues derived will be divided 50/50 between that independent company and Advanced Credit Technologies Inc.

An agreement with two sales managers granting each manager a 1% commission on the gross revenue of the Company. These commissions are payable quarterly upon receipt of customer revenues.

 

A one year renewable agreement with an independent company granting that company a non-exclusive, non-transferable license to provide the CyberloQ Vault Services to a certain territory and for a defined term. The independent company will pay Advanced Credit Technologies, Inc. a monthly fee of $100. Advanced Credit Technologies will pay a commission of 90% less transaction fees.

 

NOTE 7 – RELATED PARTY TRANSACTIONS

 

Acquisition of Cyberloq™

 

During 2017, the Company acquired the CyberloQ™ banking fraud prevention technology. (the “Technology”) Pursuant to the asset purchase agreement, the prior license agreement between the Company and CartenTech LLC was terminated, and the Company is now the exclusive owner of the CyberloQ™ banking fraud prevention technology along with all intellectual property rights associated with the Technology which is copyrighted with the United States Copyright Office. The owner of CartenTech LLC is Mark Carten, who is also a director of ACRT and its Chief Technology Officer. On July 28, 2017, the Company purchased the Technology with a value of $720,000. As consideration for the acquisition of and all rights to the Technology, CartenTech LLC received: (a) payment of $50,000, (b) a note for $150,000, and (c) 4,000,000 shares of the Company’s common stock. The software is being depreciated over its useful life of six-years in conjunction with the Company’s depreciation policy.

 

Issuance of Warrants/Options

 

All warrants and options are fully vested and exercisable.

The following is a summary of the warrants issued in connection with common stock:

 

Date  11/30/15   11/30/15   6/28/16   Wtd. Avg. Life  Wtd. Avg.Price 
Warrants   250,000    250,000    625,000       - 
Exercise price  $0.15   $0.20   $0.20       - 
Expected life   4 year    5 year    3 year       - 
Unexpired 12/31/18   250,000    250,000    625,000   3.667 years  $0.1889 
Unexpired 6/30/19   250,000    250,000    0    4.5 years  $0.1750 

 

The following is a summary of the options issued in connection with common stock:

 

Date  FY 2017   FY2018   Wtd. Avg. Life   Wtd. Avg. Price 
Options   100,000    1,100,000    -      
Exercise price  $0.15   $0.15    -      
Expected life   5 year    5 year    -      
Unexpired 12/31/18   100,000    1,100,000     5 years   $0.15 
Unexpired 6/30/19   100,000    1,100,000    5 years   $0.15 

 

F-12

 

 

In 2016 and 2017, Rex Schuette, one of the Company’s directors, was issued two warrants to potentially acquire a total of 1,250,000 additional shares of common stock. One warrant to potentially acquire an additional 625,000 shares of common stock expired on June 19, 2018, and the other warrant to potentially acquire an additional 625,000 shares of common stock expired on June 28, 2019. Both warrants are exercisable at $0.20 per share. The Company revalued the warrants based on information that has come forward that caused a recalculation of the 1,250,000 warrants value from the $51,592 (as disclosed in the December 31, 2017 footnote) to the corrected amount $96,643. This re-valuation had no material impact on 2017, given that the majority of expense was recorded in 2018 and 2019. The Company has issued non-qualified options to an independent contractor, during 2018 there have been 1,200,000 options issued to this contractor. All options are exercisable at $0.15 per share and have a 5 year life. All non-expired warrants are being expensed ratably through expiration; all non-expired options are expensed as stock compensation is vested. As of June 30, 2019, the remaining non-expired warrant amount to be expensed is $0; the amount expensed during the period for these warrants is $9,285 and for options is $0. The total number of warrants and options outstanding as of June 30, 2019 is 500,000 and 1,200,000 respectively.

 

Related Party Loans Payable

 

The following is a summary of related party loans payable:

 

   For the Periods Ended 
   June 30, 2019   December 31, 2018 
Loans payable - stockholders  $35,000   $45,000 
Loans from related parties  $0   $0 

 

Loans Payable - Stockholders

 

On December 29, 2014, the Company entered into a partially-convertible promissory note with a shareholder in the amount of $35,000. In January of 2015, the shareholder partially-exercised its conversion option, and in May of 2016 the shareholder exercised the remainder of its conversion option. In December 2017, the remaining unpaid principal and interest due on the note was settled in full for a $50,000 note and the Company recognized $151,324 in gain on settlement of debt. The $50,000 note has a current principle balance of $35,000, a stated interest rate of 0%, required payments of $5,000 on or before June 10, 2019, $5,000 on or before August 10, 2019 and the remainder due by the extended due date of September 15, 2019.

 

Loans from Related Parties

 

There are no loans from related parties at this time.

 

NOTE 8 – SUBSEQUENT EVENTS

 

On July 2, 2019, the Company entered into a subscription agreement to issue 150,000 shares of common stock for $15,000. The purchase was prepaid in June 2019 and is recorded as a Deposit liability on the June 30, 2019 Balance Sheet.

 

Other than the foregoing, the Company is not aware of any subsequent events through the date of this filing that require disclosure or recognition in these financial statements.

 

F-13

 

 

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

 

The following discussion is intended to assist you in understanding our business and the results of our operations. It should be read in conjunction with the Condensed Financial Statements and the related notes that appear elsewhere in this report as well as our Report on Form 10K filed with the Securities and Exchange Commission for the period ending December 31, 2018. Statements made in this Form 10-Q that are not historical or current facts are “forward-looking statements”. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

 

Company History

 

Advanced Credit Technologies Inc. (“ACRT”, ‘We” or the “Company”) was incorporated in Nevada on February 5, 2008. The Company has never been the subject of any bankruptcy, receivership or similar proceeding. The Company has never been involved in any material reclassification, merger, or consolidation.

 

On June 15, 2017, the Company created a private limited company in the United Kingdom named CyberloQ Technologies LTD. CyberloQ Technologies LTD is a wholly-owned subsidiary of the Company, and any business that the Company has in the United Kingdom will be transacted through CyberloQ Technologies LTD. However, to date CyberloQ Technologies LTD has had no activity, operational or otherwise.

 

Current Overview of the Company

 

ACRT is a development-stage technology company focused on fraud prevention and credit management.

 

The Company offers a proprietary software platform branded as CyberloQ™ . While previously the Company licensed CyberloQ, in the third quarter of 2017, the Company acquired the CyberloQ technology and is now the exclusive owner of CyberloQ.

 

CyberloQ is a banking fraud prevention technology that is offered to institutional clients in order to combat fraudulent transactions and unauthorized access to customer accounts. Through the use of a customer’s smart-phone, CyberloQ uses a multi-factor authentication system to control access to a bank card, transaction type or amount, website, database or digital service. The mobile applications for CyberloQ have been built, and have been successfully integrated into the banking ecosystem.

 

In addition to CyberloQ, the Company offers a web-based proprietary software platform under the brand name Turnscor® which allows customers to monitor and manage their credit from the privacy of their own homes. Although individuals can sign-up for Turnscor on their own, the Company also intends to market Turnscor to certain institutional clients, where appropriate, in conjunction with CyberloQ as a value-added benefit to offer their customers.

 

Furthermore, in 2018 the Company introduced CyberloQ Vault, a secure cloud-based storage solution which allows users to store, retrieve and share content securely.

 

Finally, the Company is able to develop secure databases for clients by developing and attaching a private blockchain to the SQL database and further securing the database through use of the Company’s CyberloQ technology. The blockchain being developed by the Company is a private blockchain and is an invitation-only network governed by a single entity. Entrants to the network require permission to read, write or audit the blockchain.

 

The Company currently has three officers — its President, Vice-President and Chief Technology Officer. The Company does not have any employees of the Company at this time.

 

 4 
 

 

Liquidity, Capital Resources and Material Changes in Financial Condition

 

As of June 30, 2019, the Company’s assets were $606,871 compared to $580,688 in assets as of December 31, 2018. The change in the Company’s financial condition can be attributed to an increase of $71,114 in its current assets from $30,009 to $101,123, offset by a net change in fixed assets of $44,931, ($60,681 of which was in depreciation expense) which reduced the Company’s long-lived assets from $550,679 to $505,748.

 

As of June 30, 2019, the Company’s liabilities were $106,943 compared to $94,436 in liabilities as of December 31, 2018. This change in the Company’s financial condition was due to an increase of $13,717 in accounts payable and accrued expenses, along with an increase of $25,000 in deposits, that were partially offset by a decrease of $12,498 in customer prepayments along with a decrease of $10,000 in loans payable to stockholders.

 

Net cash used in operating activities for the six month period ending June 30, 2019 was $189,436 compared to net cash used in operating activities for the six month period ending June 30, 2018 of $207,339. Cash provided by or used by operating activities is driven by our net loss and adjusted by non-cash items as well as changes in operating assets and liabilities. Non-cash adjustments for the six months ended June 30, 2019 include depreciation of $60,681 and stock compensation of $18,570.

 

Net cash provided by financing activities was $235,000 for the six month period ending June 30, 2019 as opposed to $95,000 for the six month period ending June 30, 2019.

 

The Company only had gross revenue of $66,606 in the second three months of 2019 and is currently reliant on its ability to raise additional capital to continue execution of its business plan to move the Company forward towards profitability. The Company does not anticipate any significant decrease in its operating expenses for the remainder of 2019. Unless the Company begins to generate increased operational revenue, it will be reliant on its ability to raise additional capital in order to continue its operations.

 

Results of Operations for the Six Months Ended June 30, 2018 and 2019

 

Company revenue was $72,855 for the six months ended June 30, 2019 as opposed to $0 for the six months ended June 30, 2018. This increase in revenue was due to the Company earning service revenue of $22,555 from its Turnscor platform along with $50,300 in accounts receivable for unpaid amounts due in conjunction with developing and securing a customer’s data with a private blockchain and Cyberloq.

 

The Company’s operating expenses were $322,649 for the six months ended June 30, 2019 as opposed to $349,412 for the six months ended June 30, 2018. This decrease in operating expenses was primarily due to a $40,753 decrease in stock compensation. This decrease was due to certain stock-based compensation paid to a former salesperson for the Company in 2018.

 

Additionally, the Company only paid $2,830 in office supplies and expenses for the six months ended June 30, 2019 as opposed to $3,320 in the six months ended June 30, 2018, while only paying $10,114 in other operating expenses for the six months ended June 30, 2019 compared to $15,084 for the six-month period ended June 30, 2018.

 

These decreases in the Company’s expenses were partially offset by the following increased expenses.

 

The Company paid sales commissions of $9,941 for the six month period ended June 30, 2019, compared to $0 in sales commissions for the six month period ended June 30, 2018. This increase in sales commissions was the result of increased revenue generated from the Company’s Turnscor platform which resulted in increased commission paid on such revenue.

 

The Company paid research expenses of $6,193 during the six month period ended June 30, 2019 as opposed to $1,500 during the six month period ended June 30, 2018. This increase in research expenses was related to the updating of the Company’s websites.

 

The Company paid computer and internet expenses of $9,774 during the six month period ended June 30, 2019 as opposed to $3,658 during the six month period ended June 30, 2018. This increase in computer and internet expenses was due to the Company’s development of its blockchain technology which requires increased data storage.

 

Finally, there were no material changes in the Company’s professional fees, officer compensation, travel and entertainment expenses, rent, and depreciation expenses in the first six months of 2019 as compared to the first six months of 2018.

 

As a result of the foregoing, the Company experienced a net loss from operations of $249,794 in the six months ended June 30, 2019 compared to a net loss from operations of $349,412 in the six months ended June 30, 2018.

 

 5 
 

 

Results of Operations for the Three Months Ended June 30, 2018 and 2019

 

Company revenue was $66,606 for the three months ended June 30, 2019 as opposed to $0 for the three months ended June 30, 2018. This increase in revenue was due to the Company earning service revenue of $16,306 from its Turnscor platform along with $50,300 in accounts receivable for unpaid amounts due in conjunction with developing and securing a customer’s data with a private blockchain and Cyberloq.

 

The Company’s operating expenses were $173,501 for the three months ended June 30, 2019 as opposed to $157,064 for the three months ended June 30, 2018. This increase in operating expenses was due to the following factors.

 

The Company paid sales commissions of $9,941 for the three-month period ended June 30, 2019, compared to $0 in sales commissions for the three-month period ended June 30, 2018. This increase in sales commissions was the result of increased revenue generated from the Company’s Turnscor platform which resulted in increased commission paid on such revenue.

 

The Company paid research expenses of $5,165 during the three-month period ended June 30, 2019 as opposed to $0 during the three-month period ended June 30, 2018. This increase in research expenses was related to the updating of the Company’s websites.

 

The Company paid travel and entertainment expenses of $19,578 during the three-month period ended June 30, 2019 as opposed to $8,215 during the three-month period ended June 30, 2018. This increase in travel and entertainment expenses was due to a temporary increase in sales trips overseas and domestically.

 

The Company paid computer and internet expenses of $6,300 during the three-month period ended June 30, 2019 as opposed to $1,648 during the three-month period ended June 30, 2018. This increase in computer and internet expenses was due to the Company’s development of its blockchain technology which requires increased data storage.

 

Additionally, the Company paid other operating expenses of $6,381 during the three-month period ended June 30, 2019 as opposed to $2,534 during the three-month period ended June 30, 2018. This increase in other operating expenses was due to the cost of attendance at educational seminars related to the credit repair industry.

 

These increases in the Company’s expenses were partially offset by a $20,466 decrease in stock compensation. This decrease was due to certain stock-based compensation paid to a former salesperson for the Company in 2018.

 

Finally, there were no material changes in the Company’s professional fees, officer compensation, rent, depreciation expenses, and office supplies and expenses in the second quarter of 2019 as compared to the second quarter of 2018.

 

As a result of the foregoing, the Company experienced a net loss from operations of $106,910 in the three-month period ended June 30, 2019 compared to a net loss from operations of $157,377 in the three-month period ended June 30, 2018.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

The Company qualifies as a smaller reporting company as defined by §229.10(f)(1) and therefore is not required to provide the information required by this Item.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

 6 
 

 

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2019 in accordance with Committee of Sponsoring Organizations of the Treadway Commission’s 2013 Integrated Framework. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. In addition, due to its current size, the Company currently does not have sufficient staff to maintain appropriate segregation of duties, as it pertains to application and oversight of internal control processes. Material weaknesses have previously been identified, including lack of segregation of duties and lack of formal written policies and procedures surrounding financial close and reporting. However, the Company anticipates that as it grows and formalizes its internal control processes and procedures, it will add sufficient staff to perform internal control processes, as well as adequately provided oversight to ensure processes are working as designed. Such officer also confirmed that there was no change in our internal control over financial reporting during the three-month period ended June 30, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

PART II

 

OTHER INFORMATION

 

Item 1. Legal Proceedings

 

The Company is not currently a party to any legal proceedings or any administrative proceedings.

 

In addition, ACRT’s officers and directors have not been convicted in any criminal proceedings nor have they been permanently or temporarily enjoined, barred, suspended or otherwise limited from involvement in any type of securities or banking activities.

 

Item 1A. Risk Factors

 

The Company qualifies as a smaller reporting company as defined by §229.10(f)(1) and therefore is not required to provide the information required by this Item. However, the Company does acknowledge that there are risks associated with the business of the Company.

 

We will be competing with a variety of companies, many of which have significantly greater financial, technical, marketing and other resources than us. If we fail to attract and retain a large base of customers for our products, or if our competitors establish a more prominent market position relative to ours, this will inhibit our ability to grow and successfully execute our business plan. For example, Wells Fargo has introduced an “on/off” feature for their customers, Discover Card has “Freeze It” functionality, and Ondot Systems has already been operating in the mobile card security space for quite some time. However, the Company believes that the multi-purpose functionality of CyberloQ, along with its multi-purpose applications will give the Company a distinct advantage by comparison. CyberloQ can be used in the banking system to protect debit/credit cards, in the Health Care industry to protect PII ( Personal Identifying Information ) now that medical records are kept digitally, and can protect corporate data bases in any industry from outside intrusion via geo-fencing. The Company believes that these distinct features, along with the ability to “White Label” the technology for marketing partners, give the Company a distinction in the marketplace. However, there can be no assurance that we will be able to successfully compete with other companies in the marketplace.

 

In addition, the Company could incur increased costs, decreased revenue, or suffer reputational damage in the event of a cyber-attack. The Company’s business involves the collection, storage, processing and transmission of customers’ personal data, including financial information. In the event that the Company’s security measures are breached due to human error, malfeasance, system errors or vulnerabilities, or other irregularities, such breach could adversely affect our business through possible interruption of the Company’s operations, improper disclosure of data, damage to the Company’s reputation, and/or legal exposure.

 

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

During the three-month period ended June 30, 2019, the Company raised $125,000 for the operations of the Company through the unregistered sale of 1,250,000 shares of restricted common stock.

 

In addition, the Company issued 300,000 shares of restricted common stock to the Officers of the Company pursuant to the terms of their contractual annual stock awards for continuous service.

 

 7 
 

 

Furthermore, the Company has an agreement to issue 3,333,333 common shares for $300,000 by June 30, 2019. Currently, the Company has collected $250,000 towards that agreement, and is disclosing the full amount and the related 3,333,333 common shares as “To be Issued”. Once the remaining stock subscription of $50,000 is collected, the Company will issue the entire 3,333,333 common shares.

 

Finally, the Company has 150,000 shares of common stock to be issued as of June 30, 2019. These shares are valued at $15,000 and were issued in the third quarter of 2019.

 

All of the shares described above were issued by the Company in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended, provided by Section 4(2). All of the purchasers of the unregistered securities were all known to us and our management, through pre-existing business relationships, as long standing business associates, friends, and employees. All purchasers were provided access to all public material information, which they requested, and all information necessary to verify such information and were afforded access to our management in connection with their purchases. All purchasers of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to us. All certificates or agreements representing such securities that were issued contained restrictive legends, prohibiting further transfer of the certificates or agreements representing such securities, without such securities either being first registered or otherwise exempt from registration in any further resale or disposition.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

The Company is not in default on any financing arrangements at this time.

 

ITEM 4. OTHER INFORMATION

 

There exists no information required to be disclosed by us in a report on Form 8-K during the three-month period ended June 30, 2019, but not reported.

 

ITEM 5. EXHIBITS

 

Exhibits have been filed separately with the United States Securities and Exchange Commission in connection with the quarterly report on Form 10-Q or have been incorporated into the report by reference.

 

Exhibit   Description
3.1(i)   Articles of Incorporation*
3.2(i)   Amended Articles of Incorporation dated May 4, 2010*
3.3(i)   Amended Articles of Incorporation dated May 5, 2017**
3.4(ii)   By-Laws***
14.1   Code of Ethics***
14.2   Related-Party Transactions Policy***
14.3   Anti-Corruption Policy***
16.1   Letter re Change in Certifying Accountant ****
31.1   Rule 13a-14(a) / 15d-14(a) Certification of Principal Executive Officer & Principal Financial Officer.*****
32.1   Section 1350 Certification of the Principal Executive Officer & Principal Financial Officer.*****
101.1   Interactive data files pursuant to Rule 405 of Regulation S-T.******
*   Incorporated by reference through the Registration Statement on form S-1 filed with the Commission on October 26, 2010. (101141203)
**   Incorporated by reference through the Quarterly Report on form 10-Q filed with the Commission on May 11, 2017. (17832815)
***   Incorporated by reference through the Current Report on form 8-K filed with the Commission on November 6, 2017.
****   Incorporated by reference through the Current Report on form 8-K filed with the Commission on May 19, 2017.
*****   Filed herewith. In addition, in accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.
******   Furnished herewith. XBRL (Extensible Business Reporting Language) information is furnished and not filed for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

 8 
 

 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  ADVANCED CREDIT TECHNOLOGIES, INC.
     
  By: /s/ Christopher Jackson
    Christopher Jackson
Date: August 14, 2019   President, Secretary, Treasurer and Director
    Principal Executive Officer
    Principal Financial Officer

 

Pursuant to the requirements of the Securities Act of 1933, this report has been signed by the following persons in the capacities and on the dates indicated.

 

  ADVANCED CREDIT TECHNOLOGIES, INC.
     
  By: /s/ Mark Carten
Date: August 14, 2019   Mark Carten, Director
     
  By: /s/ Lynnwood Farr
Date: August 14, 2019   Lynnwood Farr, Director
     
  By: /s/ Enrico Giordano
Date: August 14, 2019   Enrico Giordano, Director
     
  By: /s/ Christopher Jackson
Date: August 14, 2019   Christopher Jackson, Director
     
  By: /s/ Rex Schuette
Date: August 14, 2019   Rex Schuette, Director

 

 9 
 

 

EX-31.1 2 ex31-1.htm

 

Exhibit 31.1


CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF

 

2002 AND RULE 13A-14 OF THE EXCHANGE ACT OF 1934

 

I, Christopher Jackson, certify that:

 

1. I have reviewed this 2nd quarterly report on Form 10-Q of Advanced Credit Technologies, Inc.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement 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. As certifying officer, 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 controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d015f)) for the registrant and have:

 

  (a) designed such disclosure controls and procedures, or caused such internal control over financial reporting 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. As certifying officer, I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and 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; 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.

 

 

  ADVANCED CREDIT TECHNOLOGIES, INC.
     
  By: /s/ Christopher Jackson
    Christopher Jackson
Date: August 14, 2019  

President, Treasurer, Secretary, Principal Executive Officer

And Principal Financial Officer

 

 
 

EX-32.1 3 ex32-1.htm

 

Exhibit 32.1

 


CERTIFICATION OF THE CHIEF 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 Quarterly Report of Advanced Credit Technologies, Inc., (the “Company”) on Form 10-Q for the period ended June 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christopher Jackson, President, Treasurer, Secretary and Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

 

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 results of operations of the Company.

 

  ADVANCED CREDIT TECHNOLOGIES, INC.
     
  By: /s/ Christopher Jackson
    Christopher Jackson
Date: August 14, 2019  

President, Treasurer, Secretary, Principal Executive Officer

And Principal Financial Officer

 

 
 

 

 

 

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Document and Entity Information - shares
6 Months Ended
Jun. 30, 2019
Aug. 14, 2019
Document And Entity Information    
Entity Registrant Name ADVANCED CREDIT TECHNOLOGIES INC  
Entity Central Index Key 0001437517  
Document Type 10-Q  
Document Period End Date Jun. 30, 2019  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business Flag true  
Entity Emerging Growth Company false  
Entity Ex Transition Period false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   67,730,515
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2019  
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Consolidated Condensed Balance Sheets - USD ($)
Jun. 30, 2019
Dec. 31, 2018
Current assets    
Cash $ 50,823 $ 21,009
Accounts Receivable 50,300
Commitment Receivable 9,000
Total Current Assets 101,123 30,009
Fixed Assets    
Software and Computer Equipment, Net 505,748 550,679
Total Fixed Assets 505,748 550,679
Total Assets 606,871 580,688
Current Liabilities    
Accounts Payable and Accrued Expenses 19,856 9,851
Deposits 25,000
Customer Prepayments 27,087 39,585
Loans Payable - Stockholders 35,000 45,000
Total Current Liabilities 106,943 94,436
Total Liabilities 106,943 94,436
Commitments and Contingencies
Stockholders' Equity    
Common stock: $0.001 par value,100,000,000 shares authorized; 67,580,515 and 65,830,515 shares issued and outstanding as of June 30, 2019 and December 31, 2018 respectively 67,581 65,831
Preferred Stock $0.001 per value - 30,000 shares authorized; issued and outstanding as of June 30, 2019 and December 31, 2018, respectively 30 30
Shares to be Issued: 3,333,333 and 3,483,333 common shares as of June 30, 2019 and December 31, 2018, respectively 300,000 348,000
Stock Subscription Receivable (50,000) (150,000)
Additional Paid in Capital 4,093,922 3,884,102
Accumulated Deficit (3,911,605) (3,661,711)
Total Stockholders' Equity 499,928 486,252
Total Liabilities and Stockholders' Equity $ 606,871 $ 580,688
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Consolidated Condensed Balance Sheets (Parenthetical) - $ / shares
Jun. 30, 2019
Dec. 31, 2018
Statement of Financial Position [Abstract]    
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 67,580,515 65,830,515
Common stock, shares outstanding 67,580,515 65,830,515
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 30,000 30,000
Preferred stock, shares issued 30,000 30,000
Preferred stock, shares outstanding 30,000 30,000
Common shares to be issued 3,333,333 3,483,333
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Consolidated Condensed Statements of Operations (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Revenue        
Service Revenue $ 66,606 $ 72,855
Total Revenue 66,606 72,855
Operational Expense        
Sales Commissions 9,941 9,941
Professional Fees 16,486 15,734 44,191 44,548
Research 5,165 6,193 1,500
Stock Compensation 9,285 29,751 18,570 59,503
Officer's Compensation 67,500 67,500 135,000 137,489
Travel and Entertainment 19,578 8,215 25,055 23,910
Rent 150 225 300 375
Depreciation 30,669 30,013 60,681 60,025
Computer and Internet 6,300 1,648 9,774 3,658
Office Supplies and Expenses 2,046 1,444 2,830 3,320
Other Operating Expenses 6,381 2,534 10,114 15,084
Total Operating Expenses 173,501 157,064 322,649 349,412
Loss from Operations (106,895) (157,064) (249,794) (349,412)
Other Income (Expense)        
Gain (Loss) of Settlement of Debt (12,000)
Interest (15) (313) (100) (313)
Total Other Income (Expenses) (15) (313) (100) (12,313)
Provision for Income Taxes
Net Loss $ (106,910) $ (157,377) $ (249,894) $ (361,725)
Loss per common share-Basic and diluted $ (0.002) $ (0.002) $ (0.00) $ (0.006)
Weighted Average Number of Common Shares Outstanding Basic and diluted 67,016,348 63,180,885 66,804,556 63,052,145
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Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($)
Common Stock (Issued) [Member]
Common Stock (Unissued) [Member]
Preferred Stock [Member]
Additional Paid-In Capital [Member]
Accumulated Deficit [Member]
Total
Balance at Dec. 31, 2017 $ 61,982 $ 12,000 $ 30 $ 3,141,639 $ (2,621,252) $ 594,399
Balance, shares at Dec. 31, 2017 61,982,181 150,000 30,000      
Proceeds from Issuance of Common Stock $ 1,000 99,000 100,000
Proceeds from Issuance of Common Stock, shares 1,000,000      
Warrants Issued for Services 29,753 29,753
Shares issued for conversion of debt $ 61 17,939 18,000
Shares issued for conversion of debt, shares 60,000      
Unissued Common Stock
Unissued Common Stock, shares      
Shares issued for services
Shares issued for services, shares      
Options Issued for Services
Stock subscriptions
Net loss (204,348) (204,348)
Balance at Mar. 31, 2018 $ 63,043 $ 12,000 $ 30 3,288,331 (2,825,600) 537,804
Balance, shares at Mar. 31, 2018 63,042,181 150,000 30,000      
Balance at Dec. 31, 2017 $ 61,982 $ 12,000 $ 30 3,141,639 (2,621,252) 594,399
Balance, shares at Dec. 31, 2017 61,982,181 150,000 30,000      
Net loss           (361,725)
Balance at Jun. 30, 2018 $ 63,375 $ 30 3,349,749 (2,982,977) 430,177
Balance, shares at Jun. 30, 2018 63,375,515 30,000      
Balance at Dec. 31, 2017 $ 61,982 $ 12,000 $ 30 3,141,639 (2,621,252) 594,399
Balance, shares at Dec. 31, 2017 61,982,181 150,000 30,000      
Balance at Dec. 31, 2018 $ 65,831 $ 198,000 $ 30 3,884,102 (3,661,711) 486,252
Balance, shares at Dec. 31, 2018 65,830,515 30,000      
Balance at Mar. 31, 2018 $ 63,043 $ 12,000 $ 30 3,288,331 (2,825,600) 537,804
Balance, shares at Mar. 31, 2018 63,042,181 150,000 30,000      
Proceeds from Issuance of Common Stock $ 182 19,817 19,999
Proceeds from Issuance of Common Stock, shares 183,334      
Warrants Issued for Services 29,751 29,751
Shares issued for conversion of debt $ 150 $ (12,000) 11,850
Shares issued for conversion of debt, shares 150,000 (150,000)      
Unissued Common Stock
Unissued Common Stock, shares      
Shares issued for services
Shares issued for services, shares      
Options Issued for Services
Stock subscriptions
Net loss (157,377) (157,377)
Balance at Jun. 30, 2018 $ 63,375 $ 30 3,349,749 (2,982,977) 430,177
Balance, shares at Jun. 30, 2018 63,375,515 30,000      
Proceeds from Issuance of Common Stock $ 2,020 199,980 202,000
Proceeds from Issuance of Common Stock, shares 2,020,000      
Warrants Issued for Services 9,285 9,285
Shares issued for conversion of debt
Shares issued for conversion of debt, shares      
Unissued Common Stock $ 100,000 100,000
Unissued Common Stock, shares      
Shares issued for services $ 436 82,864 83,300
Shares issued for services, shares 435,000      
Options Issued for Services 203,536 203,536
Stock subscriptions
Net loss (473,623) (473,623)
Balance at Sep. 30, 2018 $ 65,831 $ 100,000 $ 30 3,845,414 (3,456,600) 554,675
Balance, shares at Sep. 30, 2018 65,830,515 30,000      
Proceeds from Issuance of Common Stock
Proceeds from Issuance of Common Stock, shares      
Warrants Issued for Services 9,285 9,285
Shares issued for conversion of debt
Shares issued for conversion of debt, shares      
Unissued Common Stock $ (150,000) (150,000)
Unissued Common Stock, shares      
Shares issued for services $ 48,000 48,000
Shares issued for services, shares      
Options Issued for Services 29,403 29,403
Stock subscriptions 200,000 200,000
Net loss (205,111) (205,111)
Balance at Dec. 31, 2018 $ 65,831 $ 198,000 $ 30 3,884,102 (3,661,711) 486,252
Balance, shares at Dec. 31, 2018 65,830,515 30,000      
Proceeds from Issuance of Common Stock $ 200 19,800 20,000
Proceeds from Issuance of Common Stock, shares 200,000      
Warrants Issued for Services 9,285 9,285
Shares issued for conversion of debt
Shares issued for conversion of debt, shares      
Unissued Common Stock
Unissued Common Stock, shares      
Shares issued for services
Shares issued for services, shares      
Options Issued for Services
Stock subscriptions 75,000 75,000
Net loss (142,984) (142,984)
Balance at Mar. 31, 2019 $ 66,031 $ 273,000 $ 30 3,913,187 (3,804,695) 447,553
Balance, shares at Mar. 31, 2019 66,030,515 30,000      
Balance at Dec. 31, 2018 $ 65,831 $ 198,000 $ 30 3,884,102 (3,661,711) 486,252
Balance, shares at Dec. 31, 2018 65,830,515 30,000      
Net loss           (249,894)
Balance at Jun. 30, 2019 $ 67,581 $ 250,000 $ 30 4,093,922 (3,911,605) 499,928
Balance, shares at Jun. 30, 2019 67,580,515 30,000      
Balance at Mar. 31, 2019 $ 66,031 $ 273,000 $ 30 3,913,187 (3,804,695) 447,553
Balance, shares at Mar. 31, 2019 66,030,515 30,000      
Proceeds from Issuance of Common Stock $ 1,250     123,750   125,000
Proceeds from Issuance of Common Stock, shares 1,250,000          
Warrants Issued for Services 9,285 9,285
Shares issued for conversion of debt
Shares issued for conversion of debt, shares      
Unissued Common Stock
Unissued Common Stock, shares      
Shares issued for services $ 300 $ (48,000) 47,700
Shares issued for services, shares 300,000      
Options Issued for Services
Stock subscriptions 25,000 25,000
Net loss (106,910) (106,910)
Balance at Jun. 30, 2019 $ 67,581 $ 250,000 $ 30 $ 4,093,922 $ (3,911,605) $ 499,928
Balance, shares at Jun. 30, 2019 67,580,515 30,000      
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Consolidated Condensed Statements of Cash Flows (Unaudited) - USD ($)
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Jun. 30, 2019
Jun. 30, 2018
Dec. 31, 2018
Dec. 31, 2017
OPERATING ACTIVITIES                    
Net loss $ (106,910) $ (142,984) $ (205,111) $ (473,623) $ (157,377) $ (204,348) $ (249,894) $ (361,725)    
Adjustments to reconcile net loss to net cash used in operating activities:                    
Gain (Loss) of Settlement of Debt         12,000   $ (151,324)
Depreciation 30,669       30,013   60,681 60,025    
Stock Compensation 9,285       29,751   18,570 59,503    
Change in Operating Assets and Liabilities:                    
Advanced Commissions             (1,646)    
Accounts Receivable             (50,300)    
Commitment Receivable             9,000    
Accounts Payable and Accrued Expenses             10,005 17,672    
Deposits             25,000    
Customer Prepayments             (12,498) 6,832    
Net Cash Used in Operating Activities             (189,436) (207,339)    
INVESTING ACTIVITIES                    
Software             (15,750)    
Net cash provided by (used) in investing activities             (15,750)    
FINANCING ACTIVITIES                    
Proceeds from Common Stock Issuance             145,000 120,000    
Proceeds from Common Stock to be Issued             100,000    
Repayment of Note Principal             (10,000) (25,000)    
Net Cash Provided by Financing Activities             235,000 95,000    
Net Increase (Decrease) in Cash and Equivalents             29,814 (112,339)    
Cash and Equivalents at Beginning of the Period   $ 21,009   $ 460   $ 112,799 21,009 112,799 $ 112,799  
Cash and Equivalents at End of the Period $ 50,823   $ 21,009   $ 460   50,823 460 $ 21,009 $ 112,799
SUPPLEMENTAL CASH FLOW INFORMATION                    
Interest Paid             (100) 313    
Income Taxes Paid                
NON-CASH DISCLOSURES                    
Company issued 60,000 shares of Stock for payment of $6,000 accrued expenses             $ 6,000    
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Consolidated Condensed Statements of Cash Flows (Unaudited) (Parenthetical)
6 Months Ended
Jun. 30, 2018
USD ($)
shares
Statement of Cash Flows [Abstract]  
Stock issued for payment | shares 60,000
Payment for accrued expenses | $ $ 6,000
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Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization and Nature of Business

 

ACRT (“the Company’s TurnScor® and CyberloQ™ products”, “We” or the “Company”) is a development-stage technology company focused on fraud prevention and credit management. The Company was incorporated in the State of Nevada on February 25, 2008.

 

The Company offers a proprietary software platform branded as CyberloQ™ . While previously the Company licensed CyberloQ, in the third quarter of 2017, the Company acquired the CyberloQ technology and is now the exclusive owner of CyberloQ.

 

The CyberloQ Vault is a “cloud based’ security protocol that allows clients the ability to send/receive secure DATA without having to use traditional e-mail which is prone to a breach. This CyberloQ service uses CLOUD BASED encryption and a secure web portal to send/receive confidential DATA, the SENDER and RECEIVER both must have authenticated their position within the prescribed GEO coordinates as well as authenticate their mobile devices prior to SENDING/RECEIVING any DATA. Thus rendering a hack or breach utterly useless for the encrypted DATA is unusable without the CyberloQ authentication component.

 

In addition to CyberloQ, the Company offers a web-based proprietary software platform under the brand name Turnscor® which allows customers to monitor and manage their credit from the privacy of their own homes. Although individuals can sign-up for Turnscor on their own, the Company also intends to market Turnscor to certain institutional clients, where appropriate, in conjunction with CyberloQ as a value-added benefit to offer their customers.

 

On June 15, 2017, the Company created a private limited company in the United Kingdom named CyberloQ Technologies LTD. CyberloQ Technologies LTD is a wholly-owned subsidiary of the Company, and any business that the Company has in the United Kingdom will be transacted through CyberloQ Technologies LTD. However, to date CyberloQ Technologies LTD has not had any operating activity or generated any revenue for the Company.

 

Basis of Presentation

 

The financial statements of the Company have been prepared using the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America and the rules of the Securities and Exchange Commission. All amounts are presented in U.S. dollars. The Company has adopted a December 31 fiscal year end.

 

Certain information and note disclosures normally included in our annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with a reading of the financial statements and notes thereto included in our Annual Report on From 10-K for the fiscal year ended December 31, 2018, as filed with the U.S. Securities and Exchange Commission.

 

Principles of Consolidation – The consolidated financial statements include the accounts of the Company and its wholly-owned or controlled operating subsidiaries. All intercompany accounts and transactions have been eliminated.

 

Reclassification

 

Certain reclassifications have been made to conform previously reported data to the current presentation. These reclassifications have no effect on our net income (loss) or financial position as previously reported.

 

Use of Estimates

 

In preparing these financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the year reported. Actual results may differ from these estimates. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 

Cash and Cash Equivalents

 

Cash equivalents are comprised of certain highly liquid investments with maturities of three months or less when purchased. The Company maintains its cash in bank deposit accounts, which at times, may exceed federally insured limits. As of June 30, 2019 and December 31, 2018, the Company had no deposits in excess of federally-insured limits.

 

Research and Development, Software Development Costs, and Internal Use Software Development Costs

 

Software development costs are accounted for in accordance with ASC Topic No. 985. Software development costs are capitalized once technological feasibility of a product is established and such costs are determined to be recoverable. For products where proven technology exists, this may occur very early in the development cycle. Factors we consider in determining when technological feasibility has been established include (i) whether a proven technology exists; (ii) the quality and experience levels of the individuals developing the software; (iii) whether the software is similar to previously developed software which has used the same or similar technology; and (iv) whether the software is being developed with a proven underlying engine. Technological feasibility is evaluated on a product-by-product basis. Capitalized costs for those products that are canceled or abandoned are charged immediately to cost of sales. The recoverability of capitalized software development costs is evaluated on the expected performance of the specific products for which the costs relate.

 

Internal use software development costs are accounted for in accordance with ASC Topic No. 350 which requires the capitalization of certain external and internal computer software costs incurred during the application development stage. The application development stage is characterized by software design and configuration activities, coding, testing and installation. Training costs and maintenance are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality.

 

In accounting for website software development costs, we have adopted the provisions of ASC Topic No. 350. ASC Topic No. 350 provides that certain planning and training costs incurred in the development of website software be expensed as incurred, while application development stage costs are to be capitalized. During the periods ending June 30, 2019 and 2018, we expensed $6,193 and $1,500, respectively, for expenditures on research and development. None was paid to related parties.

 

Fixed Assets, Intangibles and Long-Lived Assets

 

The Company records its fixed assets at historical cost. The Company expenses maintenance and repairs as incurred. Upon disposition of fixed assets, the gross cost and accumulated depreciation are written off and the difference between the proceeds and the net book value is recorded as a gain or loss on sale of assets. The Company depreciates its fixed assets over their respective estimated useful lives ranging from three to fifteen years.

 

The Company follows FASB ASC 360-10, “Property, Plant, and Equipment,” which established a “primary asset” approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long-lived asset to be held and used. Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell. As of June 30, 2019 and December 31, 2018, the Company had not experienced impairment losses on its long-lived assets.

 

Revenue Recognition

 

Effective January 1, 2018, the Company adopted the requirements of ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09 or ASC 606). The adoption of ASC 606 resulted in changes to the Company’s accounting policies for revenue recognition previously recognized under ASC 605 (Legacy GAAP), as detailed below. However, since the Company had not earned any revenue prior to adopting ASC 606, this policy change had no effect on any financial statements from prior periods, thus no adjustments have been made to any prior periods related to the adoption of ASC 606.

 

Revenue Recognition Policy

 

Under ASC 606, the Company recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. To achieve the core principle of ASC 606, the Company performs the following steps:

 

1) Identify the contract(s) with a customer;

 

2) Identify the performance obligations in the contract;

 

3) Determine the transaction price;

 

4) Allocate the transaction price to the performance obligations in the contract; and

 

5) Recognize revenue when (or as) we satisfy a performance obligation.

 

The Company derives its revenue from two sources: (1) subscription revenues, which are comprised of subscription fees from customers utilizing the Company’s TurnScor®, CyberloQ™ and CyberloQ Vault products and from customers purchasing additional support beyond the standard support that is included in the basic subscription fees; and (2) related professional services and other revenue, which consists primarily of certain performance obligations related to set-up, ingestion, consulting and training fees. The Company’s subscription arrangements provide customers the right to access the Company’s hosted software applications. Customers do not have the right to take possession of the Company’s software during the hosting arrangement.

 

As of June 30, 2019, the Company had $0 in contract assets, as well as a contract liability of $37,087 to perform on contracts. As of December 31, 2018, the Company has $0 in contract assets, however there was a commitment receivable of $9,000 from a customer’s non-refundable two year (beginning August 28, 2018) service contract, as well as a contract liability of $39,585 to perform on that contract as of December 31, 2018. The contract liability will be reduced by $2,083 per month as the Company provides a non-exclusive, non-transferable license to use the CyberloQ Vault Services for the customer’s internal purposes and earns and recognizes related revenue.

 

   Contract Asset   Contract Liability 
December 31, 2018  $0   $39,585 
Less: revenue earned and recognized   -    (12,498)
June 30, 2019  $0   $27,087 

 

Fair Value Measurements

 

For certain financial instruments, including accounts receivable, accounts payable, accrued expenses, interest payable, advances payable and notes payable, the carrying amounts approximate fair value due to their relatively short maturities.

 

The Company has adopted FASB ASC 820-10, “Fair Value Measurements and Disclosures.” FASB ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

 

  Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
     
  Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
     
  Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

The Company did not identify any other non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value in accordance with FASB ASC 815.

 

In February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” now known as ASC Topic 825-10 “Financial Instruments.” ASC Topic 825-10 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. FASB ASC 825-10 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. The Company has adopted FASB ASC 825-10. The Company chose not to elect the option to measure the fair value of eligible financial assets and liabilities.

 

Segment Reporting

 

FASB ASC 280, “Segment Reporting” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has one operating segment.

 

Advertising

 

Advertising costs are expensed as incurred. Advertising expense for the periods ended June 30, 2019 and 2018 were $4,769 and $11,418, respectively.

 

Income Taxes

 

Deferred income taxes are provided using the liability method (in accordance with ASC 740) whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all-of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

 

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Applicable interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statements of operations. The Company is not aware of uncertain tax positions.

 

Earnings (Loss) Per Share

 

Earnings per share is calculated in accordance with the FASB ASC 260-10, “Earnings Per Share.” Basic earnings (loss) per share is based upon the weighted average number of common shares outstanding. Diluted earnings (loss) per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

 

At June 30, 2019 and December 31, 2018 the Company has 500,000 and 1,125,000 warrants as well as 1,200,000 and 1,200,000 options issued (respectively) that can be exercised and could be dilutive to the existing number of shares issued and outstanding. However, due to the Company’s periods of losses, the basic weighted average is equal to the diluted weighted average shares outstanding.

 

The computation of earnings per share of common stock is based on the weighted average number of shares outstanding at the date of the financial statements.

 

Stock Based Compensation

 

The Company adopted FASB ASC Topic 718 – Compensation – Stock Compensation (formerly SFAS 123R), which establishes the use of the fair value-based method of accounting for stock-based compensation arrangements under which compensation cost is determined using the fair value of stock-based compensation determined as of the date of grant and is recognized over the periods in which the related services are rendered. For stock-based compensation, the Company recognizes an expense in accordance with FASB ASC Topic 718 and values the equity securities based on the fair value of the security on the date of grant. Stock option and warrant awards are valued using the Black-Scholes option-pricing model, which according to ASC 820-10 is a level 3 value on the hierarchy. Black Scholes assumptions were calculated using stock price at grant date between $0.29 to $0.149; exercise prices between $0.15 to $0.20: life expectancy between ½ year to 5 years; and volatility ranging from 163% to 68%.

 

Recent Accounting Pronouncements

 

In July 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting. The amendments expand the scope of ASC 718, Compensation – Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees and to supersede the guidance in ASC 505-50, Equity-Based Payments to Non-Employees. The accounting for nonemployee awards will now be substantially the same as current guidance for employee awards. ASU 2018-07 impacts all entities that issue awards to nonemployees in exchange for goods or services to be used or consumed in the grantor’s own operations, as well as to nonemployees of an equity method investee that provide goods or services to the investee that are used or consumed in the investee’s operations. ASU 2018-07 aligns the measurement-date guidance for employee and nonemployee awards using the current employee model, meaning that the measurement date for nonemployee equity-classified awards generally will be the grant date, while liability-classified awards generally will be the settlement date. ASU 2018-07 is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company has determined that there is no retroactive effect on its financial reports from the adoption of this standard. The Company adopted ASU 2018-07 on January 1, 2019.

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Fixed Assets
6 Months Ended
Jun. 30, 2019
Property, Plant and Equipment [Abstract]  
Fixed Assets

NOTE 2 – FIXED ASSETS

 

Software and computer equipment, recorded at cost, consisted of the following:

 

   June 30, 2019   December 31, 2018 
Software and computer equipment  $736,500   $720,750 
Less: accumulated depreciation   (230,752)   (170,071)
Property and equipment, net  $505,748   $550,679 

 

Depreciation expense was $30,669 and $60,681; $30,013 and 60,025 for the three and six month periods ended June 30, 2019 and 2018, respectively.

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Going Concern
6 Months Ended
Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern

NOTE 3 – GOING CONCERN

 

The Company has incurred losses since Inception resulting in an accumulated deficit of $3,911,605 as of June 30, 2019 that includes a loss of $106,910 for the quarter ended June 30, 2019. Further losses are anticipated in the development of its business. Accordingly, there is substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued.

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that could result from the outcome of this uncertainty.

 

The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and, or, obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.

 

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

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Deposits
6 Months Ended
Jun. 30, 2019
Deposits [Abstract]  
Deposits

NOTE 4 – DEPOSITS

 

The Company holds amounts payable to others as “deposits”, these include; $15,000 prepaid stock purchase whose stock subscription agreement is dated July 2019; $10,000 down payment from a customer to secure future services.

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Stockholders' Equity
6 Months Ended
Jun. 30, 2019
Equity [Abstract]  
Stockholders' Equity

NOTE 5 – STOCKHOLDERS’ EQUITY

 

Common Stock

 

The Company has 100,000,000 shares of $.001 par value common stock authorized as of June 30, 2019 and December 31, 2018.

 

The Company has an agreement to issue 3,333,333 common shares for $300,000 by June 30, 2019. Currently, the Company has collected $250,000 towards that agreement, and is disclosing the full amount and the related 3,333,333 common shares as “To be Issued”. Once the remaining stock subscription of $50,000 is collected, the Company will issue the entire 3,333,333 common shares. In addition, the Company received a $15,000 deposit to purchase 150,000 shares of common stock which were subscribed and issued in July.

  

During 2018, the Company received $322,000 in payment for 3,203,334 shares of common stock; received $83,300 in services for 435,000 shares of common stock. Also during the same period, the Company issued 60,000 shares of common stock in payment of $6,000 of accrued legal fees, recognizing a loss on settlement of debt of $12,000; also, the Company converted $12,000 of debt into 150,000 shares, these shares were previously recorded as “Shares to be Issued” in the Balance Sheet. There were 65,830,515 shares of common stock issued and outstanding as of December 31, 2018.

 

During 2019, the Company received $145,000 in payment for 1,450,000 shares of common stock; issued 300,000 shares to officers in conjunction with their 2018 service agreement, which were previously recorded as “Shares to be Issued” in the balance sheet. There were 67,580,515 shares of common stock issued and outstanding as of June 30, 2019.

 

Preferred Stock

 

The Company did not have any preferred stock prior to 2017. In April of 2017, the Company amended its articles of incorporation to create a new class of stock designated Series A Super Voting Preferred Stock consisting of thirty-thousand (30,000) shares at par value of $0.001 per share. Certain rights, preferences, privileges and restrictions were established for the Series A Preferred Stock as follows: (a) the amount to be represented in stated capital at all times for each share of Series A Preferred Stock shall be its par value of $0.001 per share; (b) except as otherwise required by law, holders of shares of Series A Preferred Stock shall vote together with the common stock as a single class and the holders of Series A Preferred Stock shall be entitled to five-thousand (5,000) votes per share of Series A Preferred Stock; and (c) in the event of any liquidation, dissolution or winding-up of the Company, either voluntary or involuntary, the holders of the Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of assets of the Corporation to the holders of the common stock, the original purchase price paid for the Series A Preferred Stock. All 30,000 shares of the Series A Super Voting Preferred Stock were issued in 2017.

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Commitments
6 Months Ended
Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments

NOTE 6 – COMMITMENTS

 

The Company rents office space on a month to month basis for its main office at 871 Venetia Bay Blvd Suite #202 Venice, FL 34285. Monthly rent for this space is $50. All conditions have been met and paid by the Company.

 

In 2015, in conjunction with a proposed TurnScor Card platform, the Company signed Investor Royalty and Warrant Agreements with four parties. In exchange for the funds contributed by the four parties, the Company agreed to:

 

1. Pay the investors monthly residuals of 2.0% to 5% per month on the gross revenue after expenses generated by the Company’s primary platform in conjunction with the Company’s TurnScor Card;
   
2. Pay the investors a residual in perpetuity on 2% to 5% of all TurnScor Card sub-platform revenue generated; and
   
3. Issue warrants to investors all of which have either been exercised or expired.

 

The Company does not plan to proceed with the TurnScor Card at this time.

 

During fiscal year 2018, the Company wrote off $17,646 in advanced commissions paid to a sales person who dissolved their contractor agreement with the Company.

 

The Company has commission agreements as follows:

 

An agreement with a shareholder and officer of the Company stating that the executive will be entitled to a two-and-a half-percent (2.5%) commission of the gross revenue recorded by the Company for any customer contracts that are closed by the Company at the time of and during the duration of the agreement. These commissions are payable quarterly upon receipt of customer revenues.

 

An agreement with an independent company granting that company a non-exclusive, non-transferable license to provide the CyberloQ Vault Services to its customers and the revenues derived will be divided 50/50 between that independent company and Advanced Credit Technologies Inc.

An agreement with two sales managers granting each manager a 1% commission on the gross revenue of the Company. These commissions are payable quarterly upon receipt of customer revenues.

 

A one year renewable agreement with an independent company granting that company a non-exclusive, non-transferable license to provide the CyberloQ Vault evention technology. (the “Technology”) Pursuant to the asset purchase agreement, the prior license agreement between the Services to a certain territory and for a defined term. The independent company will pay Advanced Credit Technologies, Inc. a monthly fee of $100. Advanced Credit Technologies will pay a commission of 90% less transaction fees.

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Related Party Transactions
6 Months Ended
Jun. 30, 2019
Related Party Transactions [Abstract]  
Related Party Transactions

NOTE 7 – RELATED PARTY TRANSACTIONS

 

Acquisition of Cyberloq™

 

During 2017, the Company acquired the CyberloQ™ banking fraud prCompany and CartenTech LLC was terminated, and the Company is now the exclusive owner of the CyberloQ™ banking fraud prevention technology along with all intellectual property rights associated with the Technology which is copyrighted with the United States Copyright Office. The owner of CartenTech LLC is Mark Carten, who is also a director of ACRT and its Chief Technology Officer. On July 28, 2017, the Company purchased the Technology with a value of $720,000. As consideration for the acquisition of and all rights to the Technology, CartenTech LLC received: (a) payment of $50,000, (b) a note for $150,000, and (c) 4,000,000 shares of the Company’s common stock. The software is being depreciated over its useful life of six-years in conjunction with the Company’s depreciation policy.

 

Issuance of Warrants/Options

 

All warrants and options are fully vested and exercisable.

The following is a summary of the warrants issued in connection with common stock:

 

Date  11/30/15   11/30/15   6/28/16   Wtd. Avg. Life  Wtd. Avg.Price 
Warrants   250,000    250,000    625,000       - 
Exercise price  $0.15   $0.20   $0.20       - 
Expected life   4 year    5 year    3 year       - 
Unexpired 12/31/18   250,000    250,000    625,000   3.667 years  $0.1889 
Unexpired 6/30/19   250,000    250,000    0    4.5 years  $0.1750 

 

The following is a summary of the options issued in connection with common stock:

 

Date  FY 2017   FY2018   Wtd. Avg. Life   Wtd. Avg. Price 
Options   100,000    1,100,000    -      
Exercise price  $0.15   $0.15    -      
Expected life   5 year    5 year    -      
Unexpired 12/31/18   100,000    1,100,000     5 years   $0.15 
Unexpired 6/30/19   100,000    1,100,000    5 years   $0.15 

 

In 2016 and 2017, Rex Schuette, one of the Company’s directors, was issued two warrants to potentially acquire a total of 1,250,000 additional shares of common stock. One warrant to potentially acquire an additional 625,000 shares of common stock expired on June 19, 2018, and the other warrant to potentially acquire an additional 625,000 shares of common stock expired on June 28, 2019. Both warrants are exercisable at $0.20 per share. The Company revalued the warrants based on information that has come forward that caused a recalculation of the 1,250,000 warrants value from the $51,592 (as disclosed in the December 31, 2017 footnote) to the corrected amount $96,643. This re-valuation had no material impact on 2017, given that the majority of expense was recorded in 2018 and 2019. The Company has issued non-qualified options to an independent contractor, during 2018 there have been 1,200,000 options issued to this contractor. All options are exercisable at $0.15 per share and have a 5 year life. All non-expired warrants are being expensed ratably through expiration; all non-expired options are expensed as stock compensation is vested. As of June 30, 2019, the remaining non-expired warrant amount to be expensed is $0; the amount expensed during the period for these warrants is $9,285 and for options is $0. The total number of warrants and options outstanding as of June 30, 2019 is 500,000 and 1,200,000 respectively.

 

Related Party Loans Payable

 

The following is a summary of related party loans payable:

 

   For the Periods Ended 
   June 30, 2019   December 31, 2018 
Loans payable - stockholders  $35,000   $45,000 
Loans from related parties  $0   $0 

 

Loans Payable - Stockholders

 

On December 29, 2014, the Company entered into a partially-convertible promissory note with a shareholder in the amount of $35,000. In January of 2015, the shareholder partially-exercised its conversion option, and in May of 2016 the shareholder exercised the remainder of its conversion option. In December 2017, the remaining unpaid principal and interest due on the note was settled in full for a $50,000 note and the Company recognized $151,324 in gain on settlement of debt. The $50,000 note has a current principle balance of $35,000, a stated interest rate of 0%, required payments of $5,000 on or before June 10, 2019, $5,000 on or before August 10, 2019 and the remainder due by the extended due date of September 15, 2019.

 

Loans from Related Parties

 

There are no loans from related parties at this time.

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Subsequent Events
6 Months Ended
Jun. 30, 2019
Subsequent Events [Abstract]  
Subsequent Events

NOTE 8 – SUBSEQUENT EVENTS

 

On July 2, 2019, the Company entered into a subscription agreement to issue 150,000 shares of common stock for $15,000. The purchase was prepaid in June 2019 and is recorded as a Deposit liability on the June 30, 2019 Balance Sheet.

 

Other than the foregoing, the Company is not aware of any subsequent events through the date of this filing that require disclosure or recognition in these financial statements.

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Summary of Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]  
Organization and Nature of Business

Organization and Nature of Business

 

ACRT (“the Company’s TurnScor® and CyberloQ™ products”, “We” or the “Company”) is a development-stage technology company focused on fraud prevention and credit management. The Company was incorporated in the State of Nevada on February 25, 2008.

 

The Company offers a proprietary software platform branded as CyberloQ™ . While previously the Company licensed CyberloQ, in the third quarter of 2017, the Company acquired the CyberloQ technology and is now the exclusive owner of CyberloQ.

 

The CyberloQ Vault is a “cloud based’ security protocol that allows clients the ability to send/receive secure DATA without having to use traditional e-mail which is prone to a breach. This CyberloQ service uses CLOUD BASED encryption and a secure web portal to send/receive confidential DATA, the SENDER and RECEIVER both must have authenticated their position within the prescribed GEO coordinates as well as authenticate their mobile devices prior to SENDING/RECEIVING any DATA. Thus rendering a hack or breach utterly useless for the encrypted DATA is unusable without the CyberloQ authentication component.

 

In addition to CyberloQ, the Company offers a web-based proprietary software platform under the brand name Turnscor® which allows customers to monitor and manage their credit from the privacy of their own homes. Although individuals can sign-up for Turnscor on their own, the Company also intends to market Turnscor to certain institutional clients, where appropriate, in conjunction with CyberloQ as a value-added benefit to offer their customers.

 

On June 15, 2017, the Company created a private limited company in the United Kingdom named CyberloQ Technologies LTD. CyberloQ Technologies LTD is a wholly-owned subsidiary of the Company, and any business that the Company has in the United Kingdom will be transacted through CyberloQ Technologies LTD. However, to date CyberloQ Technologies LTD has not had any operating activity or generated any revenue for the Company.

Basis of Presentation

Basis of Presentation

 

The financial statements of the Company have been prepared using the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America and the rules of the Securities and Exchange Commission. All amounts are presented in U.S. dollars. The Company has adopted a December 31 fiscal year end.

 

Certain information and note disclosures normally included in our annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with a reading of the financial statements and notes thereto included in our Annual Report on From 10-K for the fiscal year ended December 31, 2018, as filed with the U.S. Securities and Exchange Commission.

 

Principles of Consolidation – The consolidated financial statements include the accounts of the Company and its wholly-owned or controlled operating subsidiaries. All intercompany accounts and transactions have been eliminated.

Reclassification

Reclassification

 

Certain reclassifications have been made to conform previously reported data to the current presentation. These reclassifications have no effect on our net income (loss) or financial position as previously reported.

Use of Estimates

Use of Estimates

 

In preparing these financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the year reported. Actual results may differ from these estimates. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Cash and Cash Equivalents

Cash and Cash Equivalents

 

Cash equivalents are comprised of certain highly liquid investments with maturities of three months or less when purchased. The Company maintains its cash in bank deposit accounts, which at times, may exceed federally insured limits. As of June 30, 2019 and December 31, 2018, the Company had no deposits in excess of federally-insured limits.

Research and Development, Software Development Costs, and Internal Use Software Development Costs

Research and Development, Software Development Costs, and Internal Use Software Development Costs

 

Software development costs are accounted for in accordance with ASC Topic No. 985. Software development costs are capitalized once technological feasibility of a product is established and such costs are determined to be recoverable. For products where proven technology exists, this may occur very early in the development cycle. Factors we consider in determining when technological feasibility has been established include (i) whether a proven technology exists; (ii) the quality and experience levels of the individuals developing the software; (iii) whether the software is similar to previously developed software which has used the same or similar technology; and (iv) whether the software is being developed with a proven underlying engine. Technological feasibility is evaluated on a product-by-product basis. Capitalized costs for those products that are canceled or abandoned are charged immediately to cost of sales. The recoverability of capitalized software development costs is evaluated on the expected performance of the specific products for which the costs relate.

 

Internal use software development costs are accounted for in accordance with ASC Topic No. 350 which requires the capitalization of certain external and internal computer software costs incurred during the application development stage. The application development stage is characterized by software design and configuration activities, coding, testing and installation. Training costs and maintenance are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality.

 

In accounting for website software development costs, we have adopted the provisions of ASC Topic No. 350. ASC Topic No. 350 provides that certain planning and training costs incurred in the development of website software be expensed as incurred, while application development stage costs are to be capitalized. During the periods ending June 30, 2019 and 2018, we expensed $6,193 and $1,500, respectively, for expenditures on research and development. None was paid to related parties.

Fixed Assets, Intangibles and Long-Lived Assets

Fixed Assets, Intangibles and Long-Lived Assets

 

The Company records its fixed assets at historical cost. The Company expenses maintenance and repairs as incurred. Upon disposition of fixed assets, the gross cost and accumulated depreciation are written off and the difference between the proceeds and the net book value is recorded as a gain or loss on sale of assets. The Company depreciates its fixed assets over their respective estimated useful lives ranging from three to fifteen years.

 

The Company follows FASB ASC 360-10, “Property, Plant, and Equipment,” which established a “primary asset” approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long-lived asset to be held and used. Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell. As of June 30, 2019 and December 31, 2018, the Company had not experienced impairment losses on its long-lived assets.

Revenue Recognition

Revenue Recognition

 

Effective January 1, 2018, the Company adopted the requirements of ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09 or ASC 606). The adoption of ASC 606 resulted in changes to the Company’s accounting policies for revenue recognition previously recognized under ASC 605 (Legacy GAAP), as detailed below. However, since the Company had not earned any revenue prior to adopting ASC 606, this policy change had no effect on any financial statements from prior periods, thus no adjustments have been made to any prior periods related to the adoption of ASC 606.

 

Revenue Recognition Policy

 

Under ASC 606, the Company recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. To achieve the core principle of ASC 606, the Company performs the following steps:

 

1) Identify the contract(s) with a customer;

 

2) Identify the performance obligations in the contract;

 

3) Determine the transaction price;

 

4) Allocate the transaction price to the performance obligations in the contract; and

 

5) Recognize revenue when (or as) we satisfy a performance obligation.

 

The Company derives its revenue from two sources: (1) subscription revenues, which are comprised of subscription fees from customers utilizing the Company’s TurnScor®, CyberloQ™ and CyberloQ Vault products and from customers purchasing additional support beyond the standard support that is included in the basic subscription fees; and (2) related professional services and other revenue, which consists primarily of certain performance obligations related to set-up, ingestion, consulting and training fees. The Company’s subscription arrangements provide customers the right to access the Company’s hosted software applications. Customers do not have the right to take possession of the Company’s software during the hosting arrangement.

 

As of June 30, 2019, the Company had $0 in contract assets, as well as a contract liability of $37,087 to perform on contracts. As of December 31, 2018, the Company has $0 in contract assets, however there was a commitment receivable of $9,000 from a customer’s non-refundable two year (beginning August 28, 2018) service contract, as well as a contract liability of $39,585 to perform on that contract as of December 31, 2018. The contract liability will be reduced by $2,083 per month as the Company provides a non-exclusive, non-transferable license to use the CyberloQ Vault Services for the customer’s internal purposes and earns and recognizes related revenue.

 

   Contract Asset   Contract Liability 
December 31, 2018  $0   $39,585 
Less: revenue earned and recognized   -    (12,498)
June 30, 2019  $0   $27,087 
Fair Value Measurements

Fair Value Measurements

 

For certain financial instruments, including accounts receivable, accounts payable, accrued expenses, interest payable, advances payable and notes payable, the carrying amounts approximate fair value due to their relatively short maturities.

 

The Company has adopted FASB ASC 820-10, “Fair Value Measurements and Disclosures.” FASB ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

 

  Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
     
  Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
     
  Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

The Company did not identify any other non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value in accordance with FASB ASC 815.

 

In February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” now known as ASC Topic 825-10 “Financial Instruments.” ASC Topic 825-10 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. FASB ASC 825-10 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. The Company has adopted FASB ASC 825-10. The Company chose not to elect the option to measure the fair value of eligible financial assets and liabilities.

Segment Reporting

Segment Reporting

 

FASB ASC 280, “Segment Reporting” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has one operating segment.

Advertising

Advertising

 

Advertising costs are expensed as incurred. Advertising expense for the periods ended June 30, 2019 and 2018 were $4,769 and $11,418, respectively.

Income Taxes

Income Taxes

 

Deferred income taxes are provided using the liability method (in accordance with ASC 740) whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all-of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

 

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Applicable interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statements of operations. The Company is not aware of uncertain tax positions.

Earnings (Loss) Per Share

Earnings (Loss) Per Share

 

Earnings per share is calculated in accordance with the FASB ASC 260-10, “Earnings Per Share.” Basic earnings (loss) per share is based upon the weighted average number of common shares outstanding. Diluted earnings (loss) per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

 

At June 30, 2019 and December 31, 2018 the Company has 500,000 and 1,125,000 warrants as well as 1,200,000 and 1,200,000 options issued (respectively) that can be exercised and could be dilutive to the existing number of shares issued and outstanding. However, due to the Company’s periods of losses, the basic weighted average is equal to the diluted weighted average shares outstanding.

 

The computation of earnings per share of common stock is based on the weighted average number of shares outstanding at the date of the financial statements.

Stock Based Compensation

Stock Based Compensation

 

The Company adopted FASB ASC Topic 718 – Compensation – Stock Compensation (formerly SFAS 123R), which establishes the use of the fair value-based method of accounting for stock-based compensation arrangements under which compensation cost is determined using the fair value of stock-based compensation determined as of the date of grant and is recognized over the periods in which the related services are rendered. For stock-based compensation, the Company recognizes an expense in accordance with FASB ASC Topic 718 and values the equity securities based on the fair value of the security on the date of grant. Stock option and warrant awards are valued using the Black-Scholes option-pricing model, which according to ASC 820-10 is a level 3 value on the hierarchy. Black Scholes assumptions were calculated using stock price at grant date between $0.29 to $0.149; exercise prices between $0.15 to $0.20: life expectancy between ½ year to 5 years; and volatility ranging from 163% to 68%.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

In July 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting. The amendments expand the scope of ASC 718, Compensation – Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees and to supersede the guidance in ASC 505-50, Equity-Based Payments to Non-Employees. The accounting for nonemployee awards will now be substantially the same as current guidance for employee awards. ASU 2018-07 impacts all entities that issue awards to nonemployees in exchange for goods or services to be used or consumed in the grantor’s own operations, as well as to nonemployees of an equity method investee that provide goods or services to the investee that are used or consumed in the investee’s operations. ASU 2018-07 aligns the measurement-date guidance for employee and nonemployee awards using the current employee model, meaning that the measurement date for nonemployee equity-classified awards generally will be the grant date, while liability-classified awards generally will be the settlement date. ASU 2018-07 is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company has determined that there is no retroactive effect on its financial reports from the adoption of this standard. The Company adopted ASU 2018-07 on January 1, 2019.

XML 26 R17.htm IDEA: XBRL DOCUMENT v3.19.2
Summary of Significant Accounting Policies (Tables)
6 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]  
Schedule of Contract Asset and Contract Liability
  Contract Asset   Contract Liability 
December 31, 2018  $0   $39,585 
Less: revenue earned and recognized   -    (12,498)
June 30, 2019  $0   $27,087 
XML 27 R18.htm IDEA: XBRL DOCUMENT v3.19.2
Fixed Assets (Tables)
6 Months Ended
Jun. 30, 2019
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment

Software and computer equipment, recorded at cost, consisted of the following:

 

   June 30, 2019   December 31, 2018 
Software and computer equipment  $736,500   $720,750 
Less: accumulated depreciation   (230,752)   (170,071)
Property and equipment, net  $505,748   $550,679 
XML 28 R19.htm IDEA: XBRL DOCUMENT v3.19.2
Related Party Transactions (Tables)
6 Months Ended
Jun. 30, 2019
Related Party Transactions [Abstract]  
Summary of Warrants Issued

The following is a summary of the warrants issued in connection with common stock:

 

Date  11/30/15   11/30/15   6/28/16   Wtd. Avg. Life  Wtd. Avg.Price 
Warrants   250,000    250,000    625,000       - 
Exercise price  $0.15   $0.20   $0.20       - 
Expected life   4 year    5 year    3 year       - 
Unexpired 12/31/18   250,000    250,000    625,000   3.667 years  $0.1889 
Unexpired 6/30/19   250,000    250,000    0    4.5 years  $0.1750 
Summary of Options Issued

The following is a summary of the options issued in connection with common stock:

 

Date  FY 2017   FY2018   Wtd. Avg. Life   Wtd. Avg. Price 
Options   100,000    1,100,000    -      
Exercise price  $0.15   $0.15    -      
Expected life   5 year    5 year    -      
Unexpired 12/31/18   100,000    1,100,000     5 years   $0.15 
Unexpired 6/30/19   100,000    1,100,000    5 years   $0.15 
Schedule of Related Party Loans Payable

The following is a summary of related party loans payable:

 

   For the Periods Ended 
   June 30, 2019   December 31, 2018 
Loans payable - stockholders  $35,000   $45,000 
Loans from related parties  $0   $0 
XML 29 R20.htm IDEA: XBRL DOCUMENT v3.19.2
Summary of Significant Accounting Policies (Details Narrative)
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2019
USD ($)
$ / shares
Jun. 30, 2018
USD ($)
Jun. 30, 2019
USD ($)
Integer
$ / shares
shares
Jun. 30, 2018
USD ($)
Dec. 31, 2018
USD ($)
shares
Cash FDIC insured amount    
Research and development expense 5,165 6,193 $ 1,500  
Contract asset 0   0   0
Contract liability 27,087   27,087   39,585
Commitment receivable     $ 9,000
Contract with customer liability reduced $ 2,083   $ 2,083    
Operating segment | Integer     1    
Advertising expenses     $ 4,769 $ 11,418  
Income tax examination, likelihood percentage     Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority.    
Warrant [Member]          
Computation of earnings per share, amount | shares     1,500,000   1,125,000
Options [Member]          
Computation of earnings per share, amount | shares     1,200,000   1,200,000
Stock Option and Warrant Awards [Member]          
Volatility, minimum     163.00%    
Volatility, maximum     68.00%    
Minimum [Member]          
Estimated useful lives of fixed assets     3 years    
Minimum [Member] | Stock Option and Warrant Awards [Member]          
Stock price | $ / shares $ 0.29   $ 0.29    
Exercise prices | $ / shares 0.15   $ 0.15    
Life expectancy     6 months    
Maximum [Member]          
Estimated useful lives of fixed assets     15 years    
Maximum [Member] | Stock Option and Warrant Awards [Member]          
Stock price | $ / shares 0.149   $ 0.149    
Exercise prices | $ / shares $ 0.20   $ 0.20    
Life expectancy     5 years    
XML 30 R21.htm IDEA: XBRL DOCUMENT v3.19.2
Summary of Significant Accounting Policies - Schedule of Contract Asset and Contract Liability (Details)
6 Months Ended
Jun. 30, 2019
USD ($)
Accounting Policies [Abstract]  
Begnning Balance, Contract Asset $ 0
Less revenue earned and recognized
Ending Balance, Contract Asset 0
Begnning Balance, Contract Liability 39,585
Less revenue earned and recognized (12,498)
Ending Balance, Contract Liability $ 27,087
XML 31 R22.htm IDEA: XBRL DOCUMENT v3.19.2
Fixed Assets (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Property, Plant and Equipment [Abstract]        
Depreciation expense $ 30,669 $ 30,013 $ 60,681 $ 60,025
XML 32 R23.htm IDEA: XBRL DOCUMENT v3.19.2
Fixed Assets - Schedule of Property and Equipment (Details) - USD ($)
Jun. 30, 2019
Dec. 31, 2018
Property, Plant and Equipment [Abstract]    
Software and computer equipment $ 736,500 $ 720,750
Less: accumulated depreciation (230,752) (170,071)
Property and equipment, net $ 505,748 $ 550,679
XML 33 R24.htm IDEA: XBRL DOCUMENT v3.19.2
Going Concern (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Jun. 30, 2019
Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]                
Accumulated deficit $ 3,911,605   $ 3,661,711       $ 3,911,605  
Net loss $ 106,910 $ 142,984 $ 205,111 $ 473,623 $ 157,377 $ 204,348 $ 249,894 $ 361,725
XML 34 R25.htm IDEA: XBRL DOCUMENT v3.19.2
Deposits (Details Narrative)
6 Months Ended
Jun. 30, 2019
USD ($)
Deposits [Abstract]  
Deposits $ 15,000
Down payment from customer to secure future services $ 10,000
XML 35 R26.htm IDEA: XBRL DOCUMENT v3.19.2
Stockholders' Equity (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Jun. 30, 2019
Jun. 30, 2018
Dec. 31, 2018
Dec. 31, 2017
Apr. 30, 2017
Common stock - shares authorized 100,000,000   100,000,000       100,000,000   100,000,000    
Common stock - par value $ 0.001   $ 0.001       $ 0.001   $ 0.001    
Number of common shares issued during period, value $ 125,000 $ 20,000 $ 202,000 $ 19,999 $ 100,000          
Proceeds from issuance of common stock             $ 145,000 $ 120,000      
Payments for shares of common stock             1,450,000        
Stock issued for services, amount $ 48,000 $ 83,300          
Loss on settlement of debt         $ 12,000   $ (151,324)  
Shares issued for conversion of debt, amount                 $ 12,000    
Shares issued for conversion of debt, shares                 150,000    
Common stock, shares issued 67,580,515   65,830,515       67,580,515   65,830,515    
Common stock, shares outstanding 67,580,515   65,830,515       67,580,515   65,830,515    
Preferred stock, par value $ 0.001   $ 0.001       $ 0.001   $ 0.001    
Preferred stock , description             Certain rights, preferences, privileges and restrictions were established for the Series A Preferred Stock as follows: (a) the amount to be represented in stated capital at all times for each share of Series A Preferred Stock shall be its par value of $0.001 per share; (b) except as otherwise required by law, holders of shares of Series A Preferred Stock shall vote together with the common stock as a single class and the holders of Series A Preferred Stock shall be entitled to five-thousand (5,000) votes per share of Series A Preferred Stock; and (c) in the event of any liquidation, dissolution or winding-up of the Company, either voluntary or involuntary, the holders of the Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of assets of the Corporation to the holders of the common stock, the original purchase price paid for the Series A Preferred Stock. All 30,000 shares of the Series A Super Voting Preferred Stock were issued in 2017.        
Preferred stock, shares issued 30,000   30,000       30,000   30,000    
Common Stock [Member]                      
Proceeds from issuance of common stock                 $ 322,000    
Payments for shares of common stock                 3,203,334    
Stock issued for services, amount                 $ 83,330    
Stock issued for services, shares                 435,000    
Loss on settlement of debt                 $ 12,000    
Common Stock for Legal Fees [Member]                      
Number of common shares issued during period                 60,000    
Number of common shares issued during period, value                 $ 6,000    
Stock Subscription [Member]                      
Number of common shares issued during period             3,333,333        
Number of common shares issued during period, value             $ 50,000        
Subscribed and Issued in July [Member]                      
Number of common shares issued during period             150,000        
Received deposit to purchase shares of common stock             $ 15,000        
Officers [Member]                      
Number of common shares issued during period, value             $ 300,000        
Common Stock (Issued) [Member]                      
Number of common shares issued during period             3,333,333        
Number of common shares issued during period, value             $ 300,000        
Collected amount towards that agreement             $ 250,000        
Series A Preferred Stock [Member]                      
Preferred stock, designated                     30,000
Preferred stock, par value                     $ 0.001
Preferred stock, shares issued                   30,000  
XML 36 R27.htm IDEA: XBRL DOCUMENT v3.19.2
Commitments (Details Narrative) - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2019
Dec. 31, 2018
Rent expense, monthly $ 50  
Commission agreements description An agreement with a shareholder and officer of the Company stating that the executive will be entitled to a two-and-a half-percent (2.5%) commission of the gross revenue recorded by the Company for any customer contracts that are closed by the Company at the time of and during the duration of the agreement. An agreement with two sales managers granting each manager a 1% commission on the gross revenue of the Company.  
Monthly fee $ 100  
Service Other [Member]    
Commission paid   $ 17,646
Minimum [Member]    
Investors monthly residuals 2.00%  
Maximum [Member]    
Investors monthly residuals 5.00%  
XML 37 R28.htm IDEA: XBRL DOCUMENT v3.19.2
Related Party Transactions (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Dec. 31, 2017
Dec. 31, 2018
Jul. 28, 2017
Dec. 31, 2016
Dec. 29, 2014
Acquisition value             $ 720,000    
Payment for acquisition         $ 50,000        
Note payable issued for acquisition         $ 150,000        
Shares issued for software, shares         4,000,000        
Shares available         1,250,000     1,250,000  
Price per share           $ 0.15      
Warrants $ 51,592   $ 51,592            
Warrants revalued 96,643   96,643            
Non-qualified stock option awards           1,200,000      
Warrant term           5 years      
Non expired warrant amount $ 0   0            
Warrant expense     $ 9,285            
Warrant options     0            
Warrants outstanding 1,125,000   1,125,000            
Options outstanding 500,000   500,000            
Convertible promissory notes                 $ 35,000
Settlement of notes payable         $ 50,000        
Gain of Settlement of Debt $ (12,000) $ 151,324        
Promissory note 50,000   50,000            
Debt current principle balance $ 35,000   $ 35,000            
Debt interest percentage 0.00%   0.00%            
Debt extended date     Sep. 15, 2019            
June 10, 2019 [Member]                  
Debt current principle balance $ 5,000   $ 5,000            
August 10, 2019 [Member]                  
Debt current principle balance $ 5,000   $ 5,000            
Warrant 1 [Member]                  
Shares available 625,000   625,000            
Date of expiration     Jun. 19, 2018            
Price per share $ 0.20   $ 0.20            
Other Warrant [Member]                  
Shares available 625,000   625,000            
Date of expiration     Jun. 28, 2018            
Price per share $ 0.20   $ 0.20            
XML 38 R29.htm IDEA: XBRL DOCUMENT v3.19.2
Related Party Transactions - Summary of Warrants Issued (Details) - $ / shares
6 Months Ended
Jun. 30, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Warrants     1,250,000 1,250,000
Exercise price   $ 0.15    
Weighted average life, Unexpired 12/31/18 3 years 80 months 2 days      
Weighted average life, Unexpired 3/31/19 4 years 6 months      
Weighted average price, Unexpired 12/31/18 $ 0.1889      
Weighted average price, Unexpired 3/31/19 $ 0.1750      
11/30/15 One [Member]        
Warrants 250,000      
Exercise price $ 0.15      
Expected life 4 years      
Unexpired 12/31/18 250,000      
Unexpired 3/31/19 250,000      
11/30/15 Two [Member]        
Warrants 250,000      
Exercise price $ 0.20      
Expected life 5 years      
Unexpired 12/31/18 250,000      
Unexpired 3/31/19 250,000      
6/28/16 [Member]        
Warrants 625,000      
Exercise price $ 0.20      
Expected life 3 years      
Unexpired 12/31/18 625,000      
Unexpired 3/31/19 0      
XML 39 R30.htm IDEA: XBRL DOCUMENT v3.19.2
Related Party Transactions - Summary of Options Issued (Details) - $ / shares
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Jun. 30, 2019
Options     500,000
Options [Member]      
Options 1,100,000 100,000  
Excersise price $ 0.15 $ 0.15  
Expected life 5 years 5 years  
Unexpired 12/31/18 1,100,000 100,000  
Unexpired 3/31/19 1,100,000 100,000  
Options weighted average, Unexpired 12/31/18 5 years 5 years  
Options weighted average, Unexpired 6/30/19 5 years 5 years  
Options weighted average, Unexpired 12/31/18 $ 0.15 $ 0.15  
Options weighted average, Unexpired 6/30/19 $ 0.15 $ 0.15  
XML 40 R31.htm IDEA: XBRL DOCUMENT v3.19.2
Related Party Transactions - Schedule of Related Party Loans Payable (Details) - USD ($)
Jun. 30, 2019
Dec. 31, 2018
Related Party Transactions [Abstract]    
Loans payable- stockholders $ 35,000 $ 45,000
Loans from related parties $ 0 $ 0
XML 41 R32.htm IDEA: XBRL DOCUMENT v3.19.2
Subsequent Events (Details Narrative) - USD ($)
3 Months Ended
Jul. 02, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Number of stock issued during period, value   $ 125,000 $ 20,000 $ 202,000 $ 19,999 $ 100,000
Subsequent Event [Member] | Subscription Agreement [Member]              
Number of stock issued during period, shares 150,000            
Number of stock issued during period, value $ 15,000            
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