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MANAGEMENT PLANS
12 Months Ended
Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
MANAGEMENT PLANS

The Company reported operating losses of $397,939 in 2017 and $74,829 in 2016, net losses of $75,000 in 2017 and $325,000 in 2016, and stockholders’ deficiencies of $4,038,564 and $3,992,842 at December 31, 2017 and 2016, respectively. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.

 

The Company’s mission is to drive shareholder value by developing and bringing to market automated, cost effective, and innovative cybersecurity technologies. The Company’s strategy is to build its business by designing, developing, and marketing IT security-based products and solutions that fill technology gaps in cybersecurity.

 

The Company brought one product to market and intends to bring other proprietary products and solutions to market through a channel of partners and distributors. The products and solutions are designed to simplify the security needs in customer and partner environments, with a focus on Small Business Enterprises (SMEs). The Company enables its partners by providing recurring revenue-based business models that use its automated plug and play solutions. Products may be sold as standalone solutions or integrated into existing environments to further automate the management of security and related IT functions. The Company’s ability to succeed depends on how successful it is in differentiating itself in the market at a time when competition in these markets is on the rise. The Company works with its partner, Webroot, to increase its base of channel partners and to increase sales of Webroot’s cloud-based endpoint security solution, with the objective of growing its recurring revenue model.

 

The Company’s cybersecurity services business is conducted within its professional services organization (PSO). The Company provides services and technical resources to support both its channel partners and end customers. The Company’s goal is to expand its VMware business in both the local government and commercial sector by building VMware license sales volume and services concurrently.

 

The Company is working to expand its managed services business with its current federal enterprise customer and its customers.

 

Nodeware - In May 2016, the Company filed a provisional patent application for its proprietary product, Nodeware.  In May 2017, the Company filed a utility patent application for Nodeware. The patent application is ready for examination by the U.S. patent application examiner. The Company launched Nodeware in November 2016. Nodeware is an automated vulnerability management solution that enhances security by proactively identifying, monitoring, and addressing potential vulnerabilities on networks, creating a safeguard against hackers and ransomware with simplicity and affordability. Customers have the option to purchase Nodeware or Nodeware Plus to accommodate the varying network needs of their organizations. Nodeware provides a value-based solution designed for SMEs with single subnet or several subnets, whereas Nodeware Plus can accommodate larger organizations with more advanced network needs.

 

Nodeware assesses vulnerabilities in a computer network using scanning technology to capture a comprehensive view of the security exposure of a network infrastructure. Users receive alerts and view network information through a proprietary dashboard. Continuous and automated internal scanning and external on demand scanning are available within this offering.

 

Nodeware 2.0 was released to the market during 2017 providing the same solution with a set of new features, such as credentialed vulnerability scanning. This scans the customer’s system without requiring an agent, providing a more comprehensive view of customer vulnerabilities. This level of access often results in the discovery of more missing patches or vulnerabilities that can then be addressed by following instructions available within the Nodeware interface.

 

Nodeware creates an opportunity for resellers, including managed service providers, managed security service providers, distributors, and value-added resellers. The Company sells Nodeware in the commercial sector through its channel partners and agents.

 

Technology and Product Development - The Company’s goal is to position its products and solutions to enable vertical integration with other solutions. The Company has a technology and product development strategy aligned with its business strategy.

 

Cybersecurity Services - The Company provides cybersecurity consulting services to channel partners and direct customers across different vertical markets (banking, healthcare, manufacturing, etc.). Its cybersecurity projects use Nodeware to create a living document that a customer can use to go forward on a path of continuous improvement for its overall IT security. The Company validates overall network security with the goal of maintaining the integrity of confidential client information, preserving the continuity of services, and minimizing potential data damage from attempted threats and incidents.

 

Continue to Improve Operations and Capital Resources

 

The Company's goal is to increase sales and generate cash flow from operations on a consistent basis. The Company uses a formal financial review and budgeting process as a tool for improvement that has aided expense reduction and internal performance. The Company’s business plans require improving the results of its operations in future periods.

 

During 2017, the Company borrowed $32,000 from related parties under the terms of demand notes.

 

During 2017, the Company originated lines of credit with related parties totaling $175,000 and borrowed $140,000. At December 31, 2017, the Company had $35,000 available under these financing agreements.

 

During 2016, the Company raised $500,000 of additional working capital to build the infrastructure and to market its new Nodeware cybersecurity product.

 

On September 30, 2016, the Company extended the scheduled maturity of its $400,000 unsecured line of credit financing agreement (the “LOC Agreement”) with a member of its board of directors (“Board”) from December 31, 2017 to January 1, 2020. The Company also extended the maturity dates of notes payable of $146,300 and $264,000 from January 1, 2017 to January 1, 2020.

 

In August 2016, the Company completed a revised financing agreement with its financial institution resulting in a reduction of its financing costs and an increase in its advance rate.

 

The Company believes the capital resources available under its factoring line of credit, cash from additional related party and third-party loans and cash generated by improving the results of its operations provide sources to fund its ongoing operations and to support the internal growth of the Company. Although the Company has no assurances, the Company believes that related parties, who have previously provided working capital, and third parties will continue to provide working capital loans on similar terms, as in the past, as may be necessary to fund its on-going operations for at least the next 12 months, however substantial doubt about the Company’s ability to continue as a going concern has not been alleviated. If the Company experiences significant growth in its sales, the Company believes that this may require it to increase its financing line, finance additional accounts receivable, or obtain additional working capital from other sources to support its sales growth.