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Share Name | Share Symbol | Market | Type |
---|---|---|---|
TPT Global Tech Inc (CE) | USOTC:TPTW | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0006 | 0.00 | 01:00:00 |
[X]
|
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
[ ]
|
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|
TPT Global Tech, Inc.
|
(Exact
name of registrant as specified in its charter)
|
Florida
|
|
81-3903357
|
State
or other jurisdiction of incorporation or organization
|
|
(I.R.S.
Employer Identification No.)
|
|
|
|
501 West Broadway, Suite 800
San Diego, CA
|
|
92101
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
---
|
---
|
---
|
Yes
|
[X]
|
|
No
|
[ ]
|
Yes
|
[X]
|
|
No
|
[ ]
|
Large
accelerated filer
|
|
[
]
|
Accelerated
filer
|
[
]
|
Non-accelerated
filer
|
|
[X]
|
Smaller
reporting company
|
[X]
|
|
|
|
Emerging
growth company
|
[X]
|
Yes
|
[ ]
|
|
No
|
[X]
|
|
|
Page
|
|
PART 1 – FINANCIAL INFORMATION
|
|
|
|
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|
|
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||
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||
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|
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||
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||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
PART II- OTHER INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
DEFICIT
|
|
|
PREFERRED STOCK,
$.001 PAR VALUE 100,000,000 SHARES AUTHORIZED:
|
|
|
Convertible
Preferred Series A, 1,000,000 designated - 1,000,000 shares issued
and outstanding as of June 30, 2019 and December 31,
2018
|
$
1,000
|
$
1,000
|
Convertible
Preferred Series B, 3,000,000 designated - 2,588,693 shares issued
and outstanding as of June 30, 2019 and December 31,
2018
|
2,589
|
2,589
|
Convertible
Preferred Series C – 3,000,000 shares designated, zero shares
issued and outstanding as of June 30, 2019 and December 31,
2018
|
—
|
—
|
Common stock, $.001
par value, 1,000,000,000 shares authorized, 136,953,904 shares
issued and outstanding as of June 30, 2019 and December 31,
2018
|
136,954
|
136,954
|
Subscriptions
payable
|
371,132
|
168,006
|
Additional paid-in
capital
|
12,681,369
|
12,567,881
|
Accumulated
deficit
|
(25,185,966
)
|
(18,802,928
)
|
Total stockholders'
deficit
|
(11,992,922
)
|
(5,926,498
)
|
|
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
$
18,319,943
|
$
10,821,717
|
|
For the three
months ended
June
30,
|
For the six months
ended
June
30,
|
||
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
REVENUES:
|
|
|
|
|
Products
|
$
15,086
|
$
36,780
|
$
33,769
|
$
78,430
|
Services
|
2,413,369
|
152,231
|
2,556,162
|
360,799
|
Total
Revenues
|
$
2,428,455
|
$
189,011
|
$
2,589,931
|
$
439,229
|
|
|
|
|
|
COST OF
SALES:
|
|
|
|
|
Products
|
$
15,100
|
$
39,895
|
$
35,600
|
$
82,395
|
Services
|
1,472,848
|
216,269
|
1,714,716
|
438,064
|
Total Costs of
Sales
|
$
1,487,948
|
$
256,164
|
$
1,750,316
|
$
520,459
|
Gross profit
(loss)
|
$
940,507
|
$
(67,153
)
|
$
839,615
|
$
(81,230
)
|
EXPENSES:
|
|
|
|
|
Sales and
marketing
|
$
44,317
|
$
21,012
|
$
44,317
|
$
39,898
|
Professional
|
275,190
|
333,271
|
996,453
|
678,679
|
Payroll and
related
|
367,018
|
178,017
|
564,559
|
370,756
|
General and
administrative
|
602,979
|
127,148
|
616,267
|
319,736
|
Depreciation
|
128,000
|
43,873
|
199,707
|
87,746
|
Amortization
|
354,129
|
169,600
|
560,131
|
369,200
|
Total
expenses
|
$
1,771,632
|
$
872,921
|
$
2,981,433
|
$
1,866,015
|
|
|
|
|
|
OTHER
INCOME (EXPENSE)
|
|
|
|
|
Derivative
expense
|
(2,068,906
)
|
—
|
(3,609,322
)
|
—
|
Interest
expense
|
(501,661
)
|
(48,131
)
|
(631,898
)
|
(78,541
)
|
Total
other income (expenses)
|
$
(2,570,567
)
|
$
(48,131
)
|
$
(4,241,220
)
|
$
(78,541
)
|
|
|
|
|
|
Net
loss before income taxes
|
(3,401,692
)
|
(988,205
)
|
(6,383,038
)
|
(2,025,786
)
|
Income
taxes
|
—
|
—
|
—
|
—
|
|
|
|
|
|
NET
LOSS
|
$
(3,401,692
)
|
$
(988,205
)
|
$
(6,383,038
)
|
$
(2,025,786
)
|
|
|
|
|
|
Loss per common
share: Basic and diluted
|
$
(0.02
)
|
$
(0.01
)
|
$
(0.05
)
|
$
(0.01
)
|
|
|
|
|
|
Weighted
average number of common shares outstanding:
|
|
|
|
|
Basic
and diluted
|
136,953,904
|
136,953,904
|
136,953,904
|
136,953,904
|
|
Series A Preferred
Stock
|
Series B Preferred
Stock
|
Common
Stock
|
Subscriptions
Payable
|
Additional
Paid-in
|
Accumulated
|
|
|||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
(Receivable)
|
Capital
|
Deficit
|
Total
|
Balance as of April 1,
2018
|
1,000,000
|
$
1,000
|
2,588,693
|
$
2,589
|
136,953,904
|
$
136,954
|
$
401,541
|
$
10,355,666
|
$
(14,463,020
)
|
$
(3,565,270
)
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of stock and stock options
for services
|
—
|
—
|
—
|
—
|
—
|
—
|
92,790
|
69,330
|
—
|
162,121
|
|
|
|
|
|
|
|
|
|
|
|
Cash received for common stock to be
contributed by officer
|
—
|
—
|
—
|
—
|
—
|
—
|
245,500
|
—
|
—
|
245,500
|
|
|
|
|
|
|
|
|
|
|
|
Conversion of
debt
|
|
|
|
|
|
|
2,000
|
|
|
2,000
|
Net loss
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
$
(988,205
)
|
$
(988,205
)
|
Balance as of June 30,
2018
|
1,000,000
|
$
1,000
|
2,588,693
|
$
2,589
|
136,953,904
|
$
136,954
|
$
741,832
|
$
10,424,996
|
$
(15,451,225
)
|
$
(4,143,854
)
|
|
Series A Preferred
Stock
|
Series B Preferred
Stock
|
Common
Stock
|
Subscriptions
Payable
|
Additional
Paid-in
|
Accumulated
|
|
|||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
(Receivable)
|
Capital
|
Deficit
|
Total
|
Balance as of December 31,
2017
|
1,000,000
|
$
1,000
|
2,588,693
|
$
2,589
|
136,953,904
|
$
136,954
|
$
(4,765
)
|
$
10,371,442
|
$
(13,425,439
)
|
$
(2,918,219
)
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of stock and stock options
for services
|
—
|
—
|
—
|
—
|
—
|
—
|
347,097
|
83,554
|
—
|
430,651
|
|
|
|
|
|
|
|
|
|
|
|
Cash received for common stock to be
contributed by officer
|
—
|
—
|
—
|
—
|
—
|
—
|
367,500
|
—
|
—
|
367,500
|
|
|
|
|
|
|
|
|
|
|
|
Conversion of
debt
|
|
|
|
|
|
|
2,000
|
|
|
2,000
|
Net loss
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
$
(2,025,786
)
|
$
(2,025,786
)
|
Balance as of June 30,
2018
|
1,000,000
|
$
1,000
|
2,588,693
|
$
2,589
|
136,953,904
|
$
136,954
|
$
741,832
|
$
10,424,996
|
$
(15,451,225
)
|
$
(4,143,854
)
|
|
Series A
Preferred Stock
|
Series B
Preferred Stock
|
Common
Stock
|
Subscriptions
Payable
|
Additional
Paid-in
|
Accumulated
|
|
|||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
(Receivable)
|
Capital
|
Deficit
|
Total
|
Balance as of
April 1, 2019
|
1,000,000
|
$
1,000
|
2,588,693
|
$
2,589
|
136,953,904
|
$
136,954
|
$
269,569
|
$
12,640,597
|
$
(21,784,274
)
|
$
(8,733,565
)
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of stock and stock options
for services
|
—
|
—
|
—
|
—
|
—
|
—
|
101,563
|
40,772
|
—
|
142,335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
$
(3,401,692
)
|
$
(3,401,692
)
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
June 30,
2019
|
1,000,000
|
$
1,000
|
2,588,693
|
$
2,589
|
136,953,904
|
$
136,954
|
$
371,132
|
$
12,681,369
|
$
(25,185,966
)
|
$
(11,992,922
)
|
|
Series A
Preferred Stock
|
Series B
Preferred Stock
|
Common
Stock
|
Subscriptions
Payable
|
Additional
Paid-in
|
Accumulated
|
|
|||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
(Receivable)
|
Capital
|
Deficit
|
Total
|
Balance as of
December 31,
2018
|
1,000,000
|
$
1,000
|
2,588,693
|
$
2,589
|
136,953,904
|
$
136,954
|
$
168,006
|
$
12,567,881
|
$
(18,802,928
)
|
$
(5,926,498
)
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of stock and stock options
for services
|
—
|
—
|
—
|
—
|
—
|
—
|
203,126
|
113,488
|
—
|
316,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
$
(6,383,038
)
|
$
(6,383,038
)
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
June 30, 2019
|
1,000,000
|
$
1,000
|
2,588,693
|
$
2,589
|
136,953,904
|
$
136,954
|
$
371,132
|
$
12,681,369
|
$
(25,185,966
)
|
$
(11,992,922
)
|
|
For the six months
ended June 30,
|
|
|
2019
|
2018
|
Cash flows from
operating activities:
|
|
|
Net
loss
|
$
(6,383,038
)
|
$
(2,025,786
)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
Depreciation
|
199,707
|
87,746
|
Amortization
|
560,131
|
369,200
|
Amortization
of debt discount
|
539,796
|
—
|
Derivative
expense
|
3,609,322
|
—
|
Share-based
compensation: Common stock
|
203,126
|
347,097
|
Stock options
|
113,488
|
83,554
|
Changes
in operating assets and liabilities:
|
|
|
Accounts
receivable
|
(189,829
)
|
(1,278
)
|
Prepaid
expenses and other assets
|
44,646
|
(30,658
)
|
Accounts
payable and accrued expenses
|
275,765
|
542,873
|
Other
liabilities
|
(55,322
)
|
(7,924
)
|
Net
cash used in operating activities
|
$
(1,082,208
)
|
$
(635,176
)
|
|
|
|
Cash flows from
investing activities:
|
|
|
Cash paid for acquisition of assets of
SpeedConnect
|
$
(1,000,000
)
|
$
—
|
Net
cash provided (used in) by investing
activities
|
$
(1,000,000
)
|
$
—
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
Proceeds
from stock subscriptions
|
—
|
367,500
|
Proceeds
from convertible notes and notes payable – related
parties
|
456,390
|
300,000
|
Proceeds
from convertible notes and business advance
|
2,659,181
|
10,000
|
Payment
on business loans
|
(913,978
)
|
—
|
Payments
on convertible notes – related parties
|
(39,807
)
|
(44,894
)
|
Payments
on financing lease liabilities
|
(9,889
)
|
|
Net cash
provided by financing activities
|
$
2,151,897
|
$
632,916
|
|
|
|
|
|
|
Net change in
cash
|
$
69,689
|
$
(2,260
)
|
Cash and cash
equivalents - beginning of period
|
$
31,786
|
$
36,380
|
|
|
|
Cash and cash
equivalents - end of period
|
$
101,475
|
$
34,120
|
|
|
|
|
2019
|
2018
|
Interest
|
$
9,857
|
$
—
|
Taxes
|
$
—
|
$
—
|
|
2019
|
2018
|
Discount on
derivative financial instruments
|
$
2,011,600
|
$
—
|
Stock subscription
payable issued for conversion of debt
|
$
—
|
$
2,000
|
Acquisition of the
assets of SpeedConnect
|
$
2,662,013
|
$
—
|
Right of use
assets
|
$
5,381,180
|
—
|
Operating
lease liabilities
|
$
5,381,180
|
—
|
|
For the six months
ended June 30, 2019
|
For the six months
ended June 30, 2018
|
TPT
SpeedConnect
|
$
1,946,820
|
|
Copperhead
Digital
|
128,130
|
$
224,454
|
K
Telecom
|
33,769
|
78,430
|
San Diego
Media
|
17,165
|
114,257
|
Blue
Collar
|
464,047
|
—
|
P2P
|
—
|
22,088
|
Total
Revenue
|
$
2,589,931
|
$
439,229
|
|
2019
|
Series A Preferred
Stock
|
128,056,506
|
Series B Preferred
Stock
|
2,588,693
|
Stock Options and
Warrants
|
6,426,453
|
Convertible
Debt
|
63,048,113
|
|
200,119,764
|
Derivative
Instrument
|
Fair
Value
|
Fair
value of Geneva Roth Convertible Promissory Notes
|
$
302,523
|
Fair
value of Auctus Convertible Promissory Note
|
$
3,205,913
|
Fair
value of Odyssey Capital Convertible Promissory Note
|
$
764,458
|
Fair value of EMA
Financial Convertible Promissory Note
|
$
651,837
|
Fair
value of JSJ Investment Convertible Promissory Note
|
$
215,611
|
Fair
value of Warrants issued with the derivative
instruments
|
$
109,980
|
|
TPT Global
Tech
|
Effective
|
5-7-19
|
|
|
Purchaser
|
TPT Global
Tech
|
|
|
Provisional
Consideration Given:
|
|
Liabilities:
|
|
Cash paid
|
1,000,000
|
Promissory
Note
|
750,000
|
Deferred
revenue
|
258,188
|
Accounts
and other payables
|
653,824
|
Total Consideration
Value
|
$
2,662,013
|
|
|
Provisional Assets
Acquired:
|
|
|
|
Assets
|
|
Customer
base
|
$
400,000
|
Current
assets:
|
|
Prepaid
and other receivables
|
246,823
|
Deposits
|
13,190
|
Property
and equipment
|
1,939,000
|
Total Assets
Acquired
|
$
2,599,013
|
Goodwill –
provisional
|
$
63,000
|
|
2019
|
2018
|
Revenue
|
$
7,352.758
|
$
9,101,507
|
Cost of
Sales
|
4,754,166
|
5,171,840
|
Gross
Profit
|
$
2,598,592
|
$
3,929,667
|
Expenses
|
4.514,097
|
(4,423,743
)
|
Interest Expense
and Impairment
|
4,241,220
|
(78,541
)
|
Income
Taxes
|
—
|
—
|
Net
Loss
|
$
6,156,725
|
$
(572,617
)
|
|
2019
|
Revenue
|
$
1,946,820
|
Cost of
Sales
|
1,227,988
|
Gross
Profit
|
$
718,832
|
Expenses
|
(532,107
)
|
Interest
Expense
|
—
|
Income
taxes
|
—
|
Net
Income
|
$
186,725
|
|
2019
|
2018
|
Property and
equipment:
|
|
|
Telecommunications
fiber and equipment
|
$
5,213,045
|
3,274,045
|
Film production
equipment
|
369,903
|
369,903
|
Office furniture
and equipment
|
82,014
|
82,104
|
Leasehold
improvements
|
18,679
|
18,679
|
|
5,683,641
|
3,744,641
|
Accumulated
depreciation
|
(897,406
)
|
(697,699
)
|
Property and
equipment, net
|
$
4,786,235
|
3,046,942
|
|
2019
|
2018
|
Business loans and
advances, net of discounts (1)
|
$
1,574,322
|
615,692
|
Convertible notes
payable, net of discounts (2)
|
341,094
|
15,000
|
Factoring agreement
(3)
|
101,244
|
101,244
|
Debt – third
party
|
$
2,016,660
|
731,936
|
|
|
|
Line of credit,
related party secured by assets (4)
|
$
3,043,390
|
3,043,390
|
Debt– other
related party, net of discounts (5)
|
5,950,000
|
5,912,898
|
Convertible debt
– related party (2)
|
913,381
|
801,888
|
Shareholder debt
(6)
|
468,957
|
181,694
|
Debt –
related party
|
$
10,375,728
|
9,939,870
|
|
|
|
Total financing
arrangements
|
$
12,392,388
|
10,671,806
|
|
|
|
Less current
liabilities:
|
|
|
Business
loans, advances and agreements
|
$
(1,675,566
)
|
(716,936
)
|
Convertible notes
payable, net of discount
|
(341,094
)
|
(10,000
)
|
Notes
payable – related parties, net of discount
|
(9,462,347
)
|
(9,137,982
)
|
Convertible
notes payable – related party
|
(172,881
)
|
(202,688
)
|
|
(11,651,888
)
|
(10,067,606
)
|
Total non-current
liabilities
|
$
740,500
|
604,200
|
|
(1)
|
The
terms of $40,000 of this balance are similar to that of the Line of
Credit which bears interest at adjustable rates, 1 month Libor plus
2%, 4.4% as of June 30, 2019, and is secured by assets of the
Company, is due August 31, 2019, as amended, and included 8,000
stock options as part of the terms (see Note 7).
$500,500
is a line of credit that Blue Collar has with a bank, bears
interest at Prime plus 1.125%, 6.755% as of June 30, 2019, and is
due March 25, 2021.
$500,000
is a bank loan dated May 28, 2019 which bears interest at Prime
plus 6%, 11.5% as of June 30, 2019, is interest only for the first
year, thereafter payable monthly of principal and interest until
the due date of May 1, 2022. The bank loan is collateralized by
assets of the Company.
$10,000
is an amount the bears interest at 6%, subsequently increased to
11%, as it was due and not repaid on October 10, 2018. The
remaining balances generally bear interest at approximately 10%,
have maturity dates that are due on demand or are past due, are
unsecured and are classified as current in the balance
sheets.
|
|
(2)
|
During
2017, the Company issued convertible promissory notes in the amount
of $67,000 (comprised of $62,000 from two related parties and
$5,000 from a former officer of CDH), all which are due May 1, 2020
and bear 6% annual interest (12% default interest rate). The
convertible promissory notes are convertible, as amended, at $0.25
per share.
During
2016, the Company acquired SDM which consideration included a
convertible promissory note for $250,000 due August 31, 2018, as
amended, does not bear interest, unless delinquent in which the
interest is 12% per annum, and is convertible into common stock at
$1.00 per share. The SDM balance is $172,881 as of June 30,
2019.
During
2018, the Company issued convertible promissory notes in the amount
of $537,200 to related parties and $10,000 to a non-related party
which bear interest at 6% (11% default interest rate), are due 30
months from issuance and are convertible into Series C Preferred
Stock at $1.00 per share. During 2019, the Company issued these
same securities with the same terms in the amount of $141,300 to
related parties. Because the Series C Preferred Stock has a
conversion price of $0.15 per share, the issuance of Series C
Preferred Stock promissory notes will cause a beneficial conversion
feature of approximately $38,479 upon exercise of the convertible
promissory notes.
During
2019, the Company consummated Securities Purchase Agreements dated
March 15, 2019, April 12, 2019, May 15, 2019 and June 6,
2019 with Geneva Roth Remark Holdings, Inc. (“Geneva
Roth”) for the purchase of convertible promissory notes
in the amounts of $68,000, $65,000, $58,000 and $53,000
(“Geneva Roth Convertible Promissory Notes”). The
Geneva Roth Convertible Promissory Notes are due one year from
issuance, pays
interest at the rate of 12% per annum
and gives the
holder the right from time to time, and at any time during the period beginning
180 days from the origination
date to the maturity date or date
of default to
convert all or any part of the outstanding
balance into common stock of the Company limited to 4.99% of the
outstanding common stock of the Company. The conversion price is
61% multiplied by the average of the two lowest trading
prices for the common stock during the previous
20 trading days prior to the applicable
conversion date. The Geneva Roth Convertible
Promissory Notes may be prepaid in whole or in part of the
outstanding balance at 125% to 140% up to 180 days from
origination.
On
March 25, 2019, the Company consummated a Securities
Purchase Agreement dated March 18, 2019 with Auctus Fund, LLC.
(“Auctus”) for the purchase of a $600,000 Convertible
Promissory Note (“Auctus Convertible Promissory Note”).
The Auctus Convertible Promissory Note is due December 18, 2019,
pays interest at the rate of 12% per annum and gives the holder the
right from time to time, and at any time during the period
beginning 180 days from the origination date or at the effective
date of the registration of the underlying shares of common stock,
which the holder has registration rights for, to convert all of the
outstanding balance into common stock of the Company limited to
4.99% of the outstanding common stock of the Company. The
conversion price is
the
lessor of the lowest trading price during the previous 25 trading
days prior the date of the Auctus Convertible Promissory Note
or
50% multiplied by the average of the two lowest
trading prices for the common stock during the previous 25 trading
days prior to the applicable conversion date. The Auctus
Convertible Promissory Note may be prepaid in full at 135% to 150%
up to 180 days from origination. 2,000,000 warrants were issued in
conjunction with the issuance of this debt. See Note
7.
On
June 4, 2019, the Company consummated a Securities
Purchase Agreement with Odyssey Capital Funding, LLC.
(“Odyssey”) for the purchase of a $525,000 Convertible
Promissory Note (“Odyssey Convertible Promissory
Note”). The Odyssey Convertible Promissory Note is due June
3, 2020, pays interest at the rate of 12% per annum and gives the
holder the right from time to time, and at any time during the
period beginning six months from the issuance date to convert all
of the outstanding balance into common stock of the Company limited
to 4.99% of the outstanding common stock of the Company. The
conversion price is 55% multiplied by the average of the two lowest
trading prices for the common stock during the previous 20 trading
days prior to the applicable conversion date. The Odyssey
Convertible Promissory Note may be prepaid in full at 125% to 145%
up to 180 days from origination.
On
June 6, 2019, the Company consummated a Securities
Purchase Agreement with JSJ Investments Inc. (“JSJ”)
for the purchase of a $112,000 Convertible Promissory Note
(“JSJ Convertible Promissory Note”). The JSJ
Convertible Promissory Note is due June 6, 2020, pays interest at
the rate of 12% per annum and gives the holder the right from time
to time, and at any time during the period beginning 180 days from
the origination date to convert all of the outstanding balance into
common stock of the Company limited to 4.99% of the outstanding
common stock of the Company. The conversion price is the lower of
the market price, as defined, or 55% multiplied by the average of
the two lowest trading prices for the common stock during the
previous 20 trading days prior to the applicable conversion date.
The JSJ Convertible Promissory Note may be prepaid in full at 135%
to 150% up to 180 days from origination. 333,333 warrants were
issued in conjunction with the issuance of this debt. See Note
7.
On
June 11, 2019, the Company consummated a Securities
Purchase Agreement with EMA Financial, LLC. (“EMA”) for
the purchase of a $250,000 Convertible Promissory Note (“EMA
Convertible Promissory Note”). The EMA Convertible Promissory
Note is due June 11, 2020, pays interest at the rate of 12% per
annum and gives the holder the right from time to time to convert
all of the outstanding balance into common stock of the Company
limited to 4.99% of the outstanding common stock of the Company.
The conversion price is 55% multiplied by the lowest traded price
for the common stock during the previous 25 trading days prior to
the applicable conversion date. The EMA Convertible Promissory Note
may be prepaid in full at 135% to 150% up to 180 days from
origination. 1,000,000 warrants were issued in conjunction with the
issuance of this debt. See Note 7.
The
Company may be in default under several of its new derivative
financial instruments for not having filed a Form S-1 with the
Securities and Exchange Commission by now. It is the intent of the
Company to complete its quarter Form 10-Q for the three months
ended June 31, 2019 and then incorporate that filing into a Form
S-1 to be filed as soon as practical.
|
|
(3)
|
One
Factoring Agreement with full recourse, due August 31, 2019, as
amended, was established in June 2016 with a company that is
controlled by a shareholder and is personally guaranteed by an
officer of the Company. The Factoring Agreement is such that the
Company pays a discount of 2% per each 30-day period for each
advance received against accounts receivable or future billings.
The Company was advanced funds from the Factoring Agreement for
which $101,244 in principal remained unpaid as of June 30, 2019 and
December 31, 2018.
Another
factoring agreement was entered into dated May 8, 2019 with
Advantage Capital Funding. $500,000 was actually funded to the
Company with a promise to pay $18,840 per week for 40 weeks until a
total of $753,610 is paid. $656,712 remains outstanding under this
factoring agreement as of June 30, 2019.
|
|
(4)
|
The
Line of Credit originated with a bank and was secured by the
personal assets of certain shareholders of Copperhead Digital.
During 2016, the Line of Credit was assigned to the Copperhead
Digital shareholders, who subsequent to the Copperhead Digital
acquisition by TPTG became shareholders of TPTG, and the secured
personal assets were used to pay off the bank. The Line of Credit
bears a variable interest rate based on the 1 Month LIBOR plus
2.0%, 4.4% as of June 30, 2019, is payable monthly, and is secured
by the assets of the Company. 1,000,000 shares of Common Stock of
the Company have been reserved to accomplish raising the funds to
pay off the Line of Credit. Since assignment of the Line of Credit
to certain shareholders, which balance on the date of assignment
was $2,597,790, those shareholders have loaned the Company $445,600
under the similar terms and conditions as the line of credit but
most of which were also given stock options totaling 85,120 (see
Note 7) and is due, as amended, August 31, 2019.
During
the year ended December 31, 2018, these same shareholders and one
other loaned the Company money in the form of convertible loans of
$537,200 described in (2) above.
|
|
(5)
|
$350,000
represents cash due to the prior owners of the technology acquired
in December 2016 from the owner of the Lion Phone which is due to
be paid as agreed by TPTG and the former owners of the Lion Phone
technology and has not been determined.
$4,000,000
represents a promissory note included as part of the consideration
of ViewMe Live technology acquired in 2017, later agreed to as
being due and payable in full, with no interest with $2,000,000
from debt proceeds and the remainder from proceeds from the second
Company public offering intended to be in 2019.
On
September 1, 2018, the Company closed on its acquisition of Blue
Collar. Part of the acquisition included a promissory note of
$1,600,000 (fair value of $1,533,217, net of a discount to fair
value of $66,783 which is being amortized through expense through
the due date of May 1, 2019) and interest at 3% from the date of
closure. $37,102 was amortized as interest expense in the six
months ended June 30, 2019. The promissory note is secured by the
assets of Blue Collar.
|
|
(6)
|
The
shareholder debt represents funds given to TPTG or subsidiaries by
officers and managers of the Company as working capital. There are
no written terms of repayment or interest that is being accrued to
these amounts and they will only be paid back, according to
management, if cash flows support it. They are classified as
current in the balance sheets.
During
the six months ended June 30, 2019, the Company borrowed $50,000
from a related party for working capital with no written terms.
This was paid back prior to June 30, 2019 with $7,000 representing
interest on the funds.
|
|
|
|
|
Debt Derivative Liabilities
|
Balance, December
31, 2018
|
$
—
|
Debt discount from
initial derivative
|
1,731,000
|
Initial fair value
of derivative liabilities
|
2,592,736
|
Change in fair
value of derivative liabilities at end of period
|
1,016,986
|
Balance, June 30,
2019
|
$
5,340,322
|
Derivative expense
for the six months ended June 30, 2019
|
$
3,609,322
|
|
Options
Outstanding
|
Vested
|
Vesting
Period
|
Exercise Price
Outstanding and Exercisable
|
Expiration
Date
|
December 31,
2017
|
93,120
|
93,120
|
100% at
issue
|
$
0.05 to $0.22
|
12-31-19
|
Granted
|
3,000,000
|
—
|
12 to 18
months
|
$
0.10
|
2-28-20 to
3-20-21
|
December 31,
2018
|
3,093,120
|
1,954,230
|
|
$
0.05 to $0.22
|
12-31-19 to
3-20-21
|
Granted
|
—
|
|
|
|
|
June 30,
2018
|
3,093,120
|
2,176,453
|
|
$
0.05 to $0.22
|
12-31-19 to
3-20-21
|
(1)
|
Dividend
yield of 0%
|
(2)
|
expected
annual volatility of 307% - 311%
|
(3)
|
discount
rate of 2.2% to 2.3%
|
(4)
|
expected
life of 2 years, and
|
(5)
|
estimated
fair value of the Company’s common $0.125 to $0.155 per
share.
|
|
|
|
2019
|
2018
|
Accounts
payable:
|
|
|
Related
parties (1)
|
$
954,284
|
$
741,577
|
General
operating
|
3,096,771
|
3,036,601
|
Credit
card balances
|
257,109
|
246,949
|
Accrued
interest on debt
|
462,698
|
306,319
|
Accrued
expenses
|
495,765
|
33,062
|
Taxes
and fees payable
|
631,857
|
629,462
|
Total
|
$
5,898,482
|
$
4,993,970
|
|
(1)
|
Relates
to amounts due to management and members of the Board of Directors
according to verbal and written agreements that have not been paid
as of period end.
|
Summary
of future payments
|
$
6,436,103
|
Discount
|
(1,054,923
)
|
Net
Present Value
|
$
5,381,180
|
Weighted
average lease term
|
6
years
|
Discount
Rate
|
12
%
|
|
2019
|
2020
|
2021
|
2022
|
2023
|
Thereafter
|
|
|
|
|
|
|
|
Tower
Leases
|
$
1,913,493
|
$
1,466,659
|
$
975,744
|
$
630,800
|
$
252,960
|
$
141,525
|
|
|
|
|
|
|
|
Obligation
|
2019
|
In
Default
|
Accrued
Interest
|
Total
|
Telecom Equipment
Finance (1)
|
$
449,103
|
—
|
156,405
|
$
605,508
|
Telecommunications
Equipment (2)
|
—
|
101,347
|
33,624
|
134,971
|
Production
Equipment Lease (3)
|
2,919
|
—
|
—
|
2,919
|
Total
|
$
452,022
|
101,347
|
190,029
|
$
743,398
|
|
Gross
Carrying Amount
|
Accumulated
Amortization
|
Net Book
Value
|
Useful
Life
|
Customer
Base
|
$
2,347,200
|
(1,413,089
)
|
934,111
|
3-10
|
Developed
Technology
|
$
6,105,600
|
(1,398,272
)
|
4,707,328
|
9
|
Film
Library
|
$
957,000
|
(68,800
)
|
888,200
|
11
|
Trademarks and
Tradenames
|
$
132,000
|
(9,319
)
|
122,681
|
12
|
|
$
9,541,800
|
(2,889,480
)
|
6,652,320
|
|
|
|
|
|
|
Goodwill
|
$
987,361
|
—
|
987,361
|
—
|
|
Gross
Carrying Amount
|
Accumulated
Amortization
|
Net Book
Value
|
Useful
Life
|
Customer
Base
|
$
1,947,200
|
(1,374,933
)
|
572,267
|
3-10
|
Developed
Technology
|
$
6,105,600
|
(1,059,070
)
|
5,046,530
|
9
|
Film
Library
|
$
957,000
|
(32,700
)
|
924,300
|
11
|
Trademarks and
Tradenames
|
$
132,000
|
(3,515
)
|
128,485
|
12
|
|
$
9,141,800
|
(2,470,218
)
|
6,671,582
|
|
|
|
|
|
|
Goodwill
|
$
924,361
|
—
|
924,361
|
—
|
|
|
|
|
|
|
2019
|
2020
|
2021
|
2022
|
2023
|
Beyond
|
Customer
Base
|
$
47,557
|
$
103,455
|
$
103,455
|
$
103,455
|
$
103,455
|
$
472,734
|
Developed
Technology
|
339,202
|
678,404
|
678,404
|
678,404
|
678,404
|
1,654,510
|
Film
Library
|
50,900
|
87,000
|
87,000
|
87,000
|
87,000
|
489,300
|
Trademarks
and Tradenames
|
5,196
|
11,000
|
11,000
|
11,000
|
11,000
|
73,485
|
Total
|
$
442,855
|
$
879,859
|
$
879,859
|
$
879,859
|
$
879,859
|
$
2,652,320
|
|
|
|
|
●
|
cable
operators offering high-speed Internet connectivity services and
voice communications;
|
|
●
|
incumbent
and competitive local exchange carriers providing DSL services over
their existing wide, metropolitan and local area
networks;
|
|
●
|
3G
cellular, PCS and other wireless providers offering wireless
broadband services and capabilities, including developments in
existing cellular and PCS technology that may increase network
speeds or have other advantages over our services;
|
|
●
|
internet
service providers offering dial-up Internet
connectivity;
|
|
●
|
municipalities
and other entities operating free or subsidized WiFi
networks;
|
|
●
|
providers
of VoIP telephony services;
|
|
●
|
wireless
Internet service providers using licensed or unlicensed
spectrum;
|
|
●
|
satellite
and fixed wireless service providers offering or developing
broadband Internet connectivity and VoIP telephony;
|
|
●
|
electric
utilities and other providers offering or planning to offer
broadband Internet connectivity over power
lines; and
|
|
●
|
resellers
providing wireless Internet service by “piggy-backing”
on DSL or WiFi networks operated by others.
|
|
|
|
|
●
|
difficulties
in integrating acquired technologies and operations into our
business while maintaining uniform standards, controls, policies
and procedures;
|
|
●
|
increasing
cost and complexity of assuring the implementation and maintenance
of adequate internal control and disclosure controls and
procedures, and of obtaining the reports and attestations that are
required of a company filing reports under the Securities Exchange
Act;
|
|
●
|
difficulties
in consolidating and preparing our financial statements due to poor
accounting records, weak financial controls and, in some cases,
procedures at acquired entities based on accounting principles not
generally accepted in the United States, particularly those
entities in which we lack control; and
|
|
●
|
the
inability to predict or anticipate market developments and capital
commitments relating to the acquired company, business or
technology.
|
|
|
|
|
●
|
difficulties,
as a result of distance, language or culture differences, in
developing, staffing and managing foreign operations;
|
|
●
|
lack of
control over our joint ventures and other business
relationships;
|
|
●
|
currency
exchange rate fluctuations;
|
|
●
|
longer
payment cycles;
|
|
●
|
credit
risk and higher levels of payment fraud;
|
|
●
|
foreign
exchange controls that might limit our control over, or prevent us
from repatriating, cash generated outside the United
States;
|
|
●
|
potentially
adverse tax consequences;
|
|
●
|
expropriation
or nationalization of assets;
|
|
●
|
differences
in regulatory requirements that may make it difficult to offer all
of our services;
|
|
●
|
unexpected
changes in regulatory requirements;
|
|
●
|
trade
barriers and import and export restrictions; and
|
|
●
|
political
or social unrest and economic instability.
|
|
|
|
|
●
|
we may
not be able to obtain additional financing to fund working capital,
operating losses, capital expenditures or acquisitions on terms
acceptable to us or at all;
|
|
●
|
we may
be unable to refinance our indebtedness on terms acceptable to us
or at all;
|
|
●
|
if
substantial indebtedness continues it could make us more vulnerable
to economic downturns and limit our ability to withstand
competitive pressures; and
|
|
●
|
cash
flows from operations are currently negative and may continue to be
so, and our remaining cash, if any, may be insufficient to operate
our business.
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paying
dividends to our stockholders;
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incurring,
or cause certain of our subsidiaries to incur, additional
indebtedness;
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permitting
liens on or conduct sales of any assets pledged as
collateral;
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selling
all or substantially all of our assets or consolidate or merge with
or into other companies;
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repaying
existing indebtedness; and
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engaging
in transactions with affiliates.
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inability
to satisfy build-out or service deployment requirements upon which
our spectrum licenses or leases are, or may be,
conditioned;
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increases
in spectrum acquisition costs;
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adverse
changes to regulations governing our spectrum rights;
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|
the
risk that spectrum we have acquired or leased will not be
commercially usable or free of harmful interference from licensed
or unlicensed operators in our or adjacent bands;
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|
with
respect to spectrum we will lease in the United States, contractual
disputes with or the bankruptcy or other reorganization of the
license holders, which could adversely affect our control over the
spectrum subject to such license;
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●
|
failure
of the FCC or other regulators to renew our spectrum licenses as
they expire; and
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●
|
invalidation
of our authorization to use all or a significant portion of our
spectrum, resulting in, among other things, impairment charges
related to assets recorded for such spectrum.
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competition
from service providers using more traditional and commercially
proven means to deliver similar or alternative
services;
|
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●
|
competition
from new service providers using more efficient, less expensive
technologies, including products not yet invented or
developed;
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|
uncertain
consumer acceptance;
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realizing
economies of scale;
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|
responding
successfully to advances in competing technologies in a timely and
cost-effective manner;
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●
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migration
toward standards-based technology, requiring substantial capital
expenditures; and
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●
|
existing,
proposed or undeveloped technologies that may render our wireless
broadband and VoIP telephony services less profitable or
obsolete.
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successfully
develop or market new services or product offerings or enhance
existing services offerings;
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educate
third-party sales organizations adequately for them to promote and
sell our services offerings;
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●
|
develop,
market and distribute existing and future services offerings in a
cost-effective manner; or
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|
operate
the facilities needed to provide our services
offerings.
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(1)
|
The
value-added resellers and other vendors of hardware and software
for on-site installation do not typically have an offering similar
to our cloud-based services. However, they are the primary historic
service suppliers to our targeted customers and will actively work
to defend their customer base.
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|
(2)
|
There
are a number of providers offering services, but they typically
offer only one or two applications of their choosing instead of our
offering which bundles customer’s chosen
services.
|
|
(3)
|
There
are a few providers that offer more than two applications from the
cloud. However currently, these providers typically offer only
those applications they have chosen.
|
Our
industry is characterized by rapid change resulting from
technological advances and new services offerings. Certain
competitors have substantially greater capital resources, larger
customer bases, larger sales forces, greater marketing and
management resources, larger research and development staffs and
larger facilities than our and have more established reputations
with our target customers, as well as distribution channels that
are entrenched and may be more effective than
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|
our
subscribers may experience lower call quality than they experience
with traditional wireline telephone companies, including static,
echoes and transmission delays;
|
|
●
|
our
subscribers may experience higher dropped-call rates than they
experience with traditional wireline telephone
companies; and
|
|
●
|
a power
loss or Internet access interruption causes our service to be
interrupted.
|
|
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●
|
quarterly
variations in our results of operations or those of our
competitors;
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|
●
|
announcements
by us or our competitors of acquisitions, new products, significant
contracts, commercial relationships or capital
commitments;
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●
|
disruption
to our operations or those of other sources critical to our network
operations;
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|
●
|
the
emergence of new competitors or new technologies;
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●
|
our
ability to develop and market new and enhanced products on a timely
basis;
|
|
●
|
seasonal
or other variations in our subscriber base;
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●
|
commencement
of, or our involvement in, litigation;
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●
|
availability
of additional spectrum;
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|
●
|
dilutive
issuances of our stock or the stock of our subsidiaries, or the
incurrence of additional debt;
|
|
●
|
changes
in our board or management;
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●
|
adoption
of new or different accounting standards;
|
|
●
|
changes
in governmental regulations or in the status of our regulatory
approvals;
|
|
●
|
changes
in earnings estimates or recommendations by securities
analysts;
|
|
●
|
announcements
regarding WiMAX and other technical standards; and
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|
●
|
general
economic conditions and slow or negative growth of related
markets.
|
All of
the outstanding shares of common stock held by our present
officers, directors, and affiliate stockholders are
“restricted securities” within the meaning of Rule 144
under the Securities Act of 1933, as amended. As restricted Shares,
these shares may be resold only pursuant to an effective
registration statement or under the requirements of
|
|
(1)
|
Pursuant
to Rule 406T of Regulation S-T, this interactive data file is
deemed not filed or part of a registration statement or prospectus
for purposes of Sections 11 or 12 of the Securities Act of 1933, is
deemed not filed for purposes of Section 18 of the Securities
Exchange Act of 1934, and otherwise is not subject to liability
under these sections.
|
|
TPT GLOBAL TECH, INC.
|
|
|
(Registrant)
|
|
|
|
|
Dated:
August 19, 2019
|
By:
|
/s/
Stephen
J. Thomas, III
|
|
|
Stephen
J. Thomas, III
|
|
|
(Chief
Executive Officer, Principal Executive
|
|
|
Officer)
|
|
|
|
Dated:
August 19, 2019
|
By:
|
/s/
Gary L.
Cook
|
|
|
Gary L.
Cook
|
|
|
(Chief
Financial Officer, Principal Accounting
|
|
|
Officer)
|
|
|
|
1 Year TPT Global Tech (CE) Chart |
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