Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jun. 30, 2018 | Jul. 31, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | AMMO, INC. | |
Entity Central Index Key | 1,015,383 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Is Entity a Well-known Seasoned Issuer | No | |
Is Entity a Voluntary Filer | No | |
Is Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 32,490,655 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,019 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 |
Current assets: | ||
Cash | $ 7,066,522 | $ 4,381,643 |
Accounts receivable, net of allowance for doubtful accounts of $20,046 at June 30, 2018 and $23,046 at March 31, 2018 | 815,731 | 1,201,117 |
Due from related parties | 13,208 | 14,204 |
Inventories, at lower cost or market, principally average cost method | 3,123,239 | 2,405,007 |
Prepaid expense | 205,951 | 321,074 |
Total current assets | 11,224,651 | 8,323,045 |
Equipment, net of accumulated depreciation of $168,081 at June 30, 2018 and $113,158 at March 31, 2018 | 1,752,767 | 1,241,326 |
Deposits | 148,478 | 16,300 |
Licensing agreements, net of accumulated amortization of $70,833 at June 30, 2018 and $58,333 at March 31, 2018 | 179,167 | 191,667 |
Patents, net of accumulated amortization of $70,896 at June 30, 2018 and $49,627 at March 31, 2018 | 879,104 | 900,373 |
TOTAL ASSETS | 14,184,167 | 10,672,711 |
Current liabilities: | ||
Accounts payable | 418,172 | 479,465 |
Accrued liabilities | 438,346 | 541,210 |
Insurance premium note payable | 69,773 | 99,907 |
Total current liabilities | 926,291 | 1,120,582 |
Shareholders' Equity: | ||
Common Stock, $0.001 par value, 100,000,000 shares authorized 31,537,784 and 28,394,503 shares issued and June 30, 2018 and March 31, 2018, respectively | 31,538 | 28,394 |
Additional paid-in capital | 22,748,317 | 17,264,888 |
Accumulated (Deficit) | (9,521,979) | (7,741,153) |
Total Shareholders' Equity | 13,257,876 | 9,552,129 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 14,184,167 | $ 10,672,711 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 |
Allowance for doubtful accounts | $ 20,046 | $ 23,046 |
Accumulated depreciation | $ (168,081) | $ (113,158) |
Common stock - par value | $ 0.001 | $ 0.001 |
Common stock - shares authorized | 100,000,000 | 100,000,000 |
Common stock - shares issued | 31,537,784 | 28,394,503 |
Common stock - shares outstanding | 31,537,784 | 28,394,503 |
Licensing Agreements [Member] | ||
Accumulated amortization | $ (70,833) | $ (58,333) |
Patents [Member] | ||
Accumulated amortization | $ (70,896) | $ (49,627) |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||
Net Sales | $ 1,250,028 | $ 315,579 |
Cost of Goods Sold, includes depreciation and amortization of $73,295 and $32,987 in 2018 and 2017, respectively, and federal excise taxes of $131,339 and $28,311 in 2018 and 2017, respectively | 1,105,456 | 294,764 |
Gross Margin | 144,572 | 20,815 |
Operating Expenses | ||
Selling and marketing | 351,416 | 270,901 |
Corporate general and administrative | 678,100 | 377,647 |
Employee salaries and related expenses | 878,988 | 150,088 |
Depreciation expense | 15,397 | 2,290 |
Total operating expenses | 1,923,901 | 800,926 |
Loss from Operations | (1,779,329) | (780,111) |
Other (Expenses) | ||
Interest expense | (1,497) | (22,741) |
(Loss) before Income Taxes | (1,780,826) | (802,852) |
Provision for Income Taxes | 0 | 0 |
Net (Loss) | $ (1,780,826) | $ (802,852) |
(Loss) per share | ||
Weighted average number of shares outstanding: Basic and Diluted | 30,393,076 | 18,425,818 |
(Loss) per share: Basic and Diluted | $ (0.06) | $ (0.04) |
CONSOLIDATED STATEMENTS OF OPE5
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||
Depreciation and amortization | $ 73,295 | $ 32,987 |
Federal excise taxes | $ 131,339 | $ 28,311 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) - 3 months ended Jun. 30, 2018 - USD ($) | Common Stock | Additional Paid-In Capital | Subscription Receivable | Accumulated (Deficit) | Total |
Beginning Balance, Shares at Mar. 31, 2018 | 28,394,503 | 28,394,503 | |||
Beginning Balance, Amount at Mar. 31, 2018 | $ 28,394 | $ 17,264,888 | $ (7,741,153) | $ 9,552,129 | |
Common stock issued for cash , Shares | 1,967,886 | ||||
Common stock issued for cash, Amount | $ 1,968 | 3,245,062 | $ 3,247,030 | ||
Common stock issued for exercised warrants , Shares | 1,007,400 | 1,007,400 | |||
Common stock issued for exercised warrants, Amount | $ 1,007 | 2,353,118 | $ 2,354,125 | ||
Common stock issued for cashless warrant exercise , Shares | 10,495 | 10,495 | |||
Common stock issued for cashless warrant exercise, Amount | $ 11 | (11) | |||
Fund raising cost | (545,359) | $ (545,359) | |||
Employee stock awards, Share | 157,500 | 157,500 | |||
Employee stock awards, Amount | $ 158 | 319,217 | $ 319,375 | ||
Stock grant | 111,402 | 111,402 | |||
Net loss for period | (1,780,826) | $ (1,780,826) | |||
Ending Balance, Shares at Jun. 30, 2018 | 31,537,784 | 31,537,784 | |||
Ending Balance, Amount at Jun. 30, 2018 | $ 31,538 | $ 22,748,317 | $ (9,521,979) | $ 13,257,876 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | ||
Net (Loss) | $ (1,780,826) | $ (802,852) |
Adjustments to reconcile Net (Loss) to Net Cash provided by operations: | ||
Depreciation and amortization | 88,692 | 35,277 |
Stock Grants | 111,402 | 0 |
Employee stock awards | 319,375 | 0 |
Changes in Current Assets and Liabilities | ||
Accounts receivable | 388,386 | (210,129) |
Allowance for doubtful accounts | (3,000) | 0 |
Due from related parties | 996 | 0 |
Inventories | (718,232) | (56,792) |
Prepaid expenses | 115,123 | 36,840 |
Deposits | (132,178) | 0 |
Accounts payable | (61,293) | 30,010 |
Accrued liabilities | (102,864) | 14,689 |
Net cash used in operating activities | (1,774,419) | (952,957) |
Cash flows from investing activities: | ||
Purchase of equipment | (566,364) | (856) |
Net cash used in investing activities | (566,364) | (856) |
Cash flows from financing activities: | ||
Convertible note payable | 0 | (100,000) |
Note payments - related party | 0 | (297,960) |
Insurance premium note payments | (30,134) | (39,223) |
Sale of common stock | 3,247,030 | 1,335,625 |
Common stock issued for exercised warrants | 2,354,125 | |
Organization and fund raising costs | (545,359) | 0 |
Net cash provided by financing activities | 5,025,662 | 898,442 |
Net increase in cash | 2,684,879 | (55,371) |
Cash, beginning of period | 4,381,643 | 100,135 |
Cash, end of period | 7,066,522 | 44,764 |
Supplemental cash flow disclosures | ||
Cash paid during the period for Interest | 1,497 | 4,616 |
Cash paid during the period for Income taxes | 0 | 0 |
Non-cash investing and financing activities: | ||
Common stock | (11) | 0 |
Additional paid-in-capital | $ 11 | $ 0 |
ORGANIZATION AND BUSINESS ACTIV
ORGANIZATION AND BUSINESS ACTIVITY | 3 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS ACTIVITY | NOTE 1 – ORGANIZATION AND BUSINESS ACTIVITY AMMO, Inc. is incorporated under the laws of Delaware. We have 100,000,000 shares of authorized Common Stock. AMMO, Inc. is a designer, manufacturer, and seller of performance-driven, high-quality ammunition products for sale to a variety of customers. The Company’s available markets include: sport and recreational shooters, hunters, individuals seeking home or personal protection, law enforcement, military and the international markets for both defense and commercial use. To enhance the strength of our brands and drive product demand, we emphasize product innovation and technology to improve the performance, quality, and affordability of our products while providing support to our distribution channel and consumers. We sell high-end, custom, and match grade ammunition at competitive prices. We emphasize an American heritage by using predominantly American-made components in our products that are produced, inspected, and packaged at our facility in Payson, Arizona. We received a federal firearms license from the Bureau of Alcohol, Tobacco, and Explosives in February 2017, and we received renewal for our registration with the International Traffic in Arms Regulations (ITAR) in May 2018 as both a manufacturer/exporter and broker. The accompanying unaudited consolidated financial statements and related disclosures included in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect all adjustments, which consist solely of normal recurring adjustments, needed to fairly present the financial results for these periods. Additionally, these consolidated financial statements and related disclosures are presented pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The accompanying financial statements should be read in conjunction with the audited financial statements and related disclosures contained in the Company’s Annual Transition Report filed with the SEC on Form 10-KT for three-month transition period ended March 31, 2018. The results for the three-month period ended June 30, 2018 are not necessarily indicative of the results that may be expected for the entire fiscal year. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to the rules and regulations of the SEC. In the opinion of management, all adjustments have been made, which consist only of normal recurring adjustments necessary for a fair statement of (a) the results of operations for the three-month periods ended June 30, 2018 and 2017, (b) the financial position at June 30, 2018 and (c) cash flows for the three-month periods ended June 30, 2018 and June 30, 2017. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Basis We use the accrual basis of accounting and accounting principles generally accepted in the United States of America ("GAAP") and all amounts are expressed in U.S. dollars. We have adopted a March 31 year end. The financial statements and related disclosures as of June 30, 2018, March 31, 2018, and June 30, 2017 are presented pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Unless the context otherwise requires, all references to "Ammo", "we", "us", "our," or the "Company" are to AMMO, Inc., a Delaware corporation. Principles of Consolidation The consolidated financial statements include the accounts of Ammo, Inc. and its wholly owned subsidiaries, SNI, LLC, and Ammo Technologies, Inc (inactive). All significant intercompany accounts and transactions are eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents For purposes of the statement of cash flows, we consider highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. Accounts Receivable and Allowance for Doubtful Accounts Our accounts receivable represent amounts due from customers for products sold and include an allowance for uncollectible accounts which is estimated based on the aging of the accounts receivable and specific identification of uncollectible accounts. At June 30, 2018 and March 31, 2018, we reserved $20,046 and $23,046, respectively, of allowance for doubtful accounts. License Agreements We are a party to a license agreement with Jesse James, a well-known motorcycle designer, and Jesse James Firearms, LLC, a Texas limited liability company, or JJF. The license agreement grants us the exclusive worldwide rights through October 15, 2021 to Mr. James' image rights and trademarks associated with him in connection with the marketing, promotion, advertising, sale, and commercial exploitation of Jesse James Branded Products. In addition, Mr. James agreed to make himself available for certain promotional activities and to promote Jesse James Branded Products through his own social media outlets. We agreed to pay Mr. James royalty fees on the sale of ammunition and non-ammunition Branded Products and to reimburse him for any out-of-pocket expenses and reasonable travel expenses. We also issued 100,000 shares of our common stock upon the execution of the license agreement with the potential issuance of up to 75,000 additional shares of common stock upon achieving certain gross sales with $15 million in gross sales required to earn the entire 75,000 shares. We are a party to a license agreement with Jeff Rann, a well-known wild game hunter and spokesman for the firearm and ammunition industries. The license agreement grants us through February 2022 the exclusive worldwide rights to Mr. Rann's image rights and trademarks associated with him in connection with the marketing, promotion, advertising, sale, and commercial exploitation of all Jeff Rann Branded Products. Mr. Rann agreed to make himself available for certain promotional activities and to promote the Branded Products through his own social media outlets. We agreed to pay Mr. Rann royalty fees on the sale of ammunition and non-ammunition Branded Products and to reimburse him for any out-of-pocket expenses and reasonable travel expenses. We also issued 100,000 shares of our common stock upon the execution of the license agreement with the potential issuance of 75,000 additional shares of common stock upon achieving certain gross sales with $15 million in gross sales required to earn the entire 75,000 shares. Patent On September 28, 2017, Ammo Technologies Inc. ("ATI"), an Arizona corporation, which is 100% owned by us, merged with Hallam, Inc, a Texas corporation, with ATI being the survivor. Under the terms of the Merger, we, the sole shareholder of Ammo Technologies Inc., issued to Hallam, Inc.'s two shareholders, 600,000 shares of our common stock, subject to restrictions, and payment of $200,000. The first payment of $100,000 to the Hallam, Inc. shareholders was paid on September 13, 2017, and the second payment of $100,000 was paid on February 6, 2018. The shares were valued at $1.25 and the aggregate value of $950,000 was recorded as a patent asset. This asset will be amortized from September 2017, the first full month of the acquired rights, through October 29, 2028. Amortization of the patent for the years ended June 30, 2018 and March 31, 2018 were $21,269 and $24,461, respectively. Under the terms of the Merger, ATI succeeded to all of the assets of Hallam, Inc. and assumed the liabilities of Hallam, Inc., which were none. The primary asset of Hallam, Inc. was an exclusive license to produce projectiles and ammunition using the Hybrid Luminescence Ammunition Technology under patent U.S. 8,402,896 B1 with a publication date of March 26, 2013 owned by University of Louisiana at Lafayette. The license was formally amended and assigned to Ammo Technologies Inc. pursuant to an Assignment and First Amendment to Exclusive License Agreement. Assumption Agreement dated to be effective as of August 22, 2017, the Merger closing date. Under the terms of the Exclusive License Agreement, the Company is obligated to pay a royalty to the patent holder, based on a $0.01 per unit basis for each round of ammunition sold that incorporates this patented technology through October 29, 2028. For the three months ended June 30, 2018, the Company accrued and paid $7,147 under this agreement. For the comparable period in 2017, no amounts were accrued and paid to the patent holder as this agreement was not executed. Impairment of Long-Lived Assets We continually monitor events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. No impairment expense was recognized for the three months ended June 30, 2018 and the three months ended June 30, 2017. Revenue Recognition We generate revenue from the production and sale of ammunition. We recognize revenue when it is realized or realizable and earned. We consider revenue realized or realizable and earned when all of the following criteria are met: · persuasive evidence of an arrangement exists · the product has been shipped to the customer · the sales price is fixed or determinable · collectability is reasonably assured At June 30, 2018 and March 31, 2018, the Company’s customers that comprised more than ten percent (10%) of total revenues and accounts receivable were as follows: PERCENTAGES Revenues Accounts Receivable For the Three-Months ended June 30, 2018 Customers: A 62.37 % 13.01 % B - 53.89 % 62.37 % 66.90 % For the Three-Months ended March 31, 2018 Customers: A - - B 35.49 % 54.55 % C 17.07 % 12.57 % D 15.55 % 0.00 % 68.11 % 67.12 % Advertising Costs We expense advertising costs as they are incurred. We incurred advertising and marketing costs of $146,615 and $84,331 for the three months ended June 30, 2018 and for the three months ended June 30, 2017, respectively. Inventories We state inventories at the lower of cost or market. We determine cost using the average cost method. Our inventory consists of raw materials, work in progress, and finished goods. Cost of inventory includes cost of parts, labor, quality control, and all other costs incurred to bring our inventories to condition ready to be sold. We periodically evaluate and adjust inventories for obsolescence. Property and Equipment We state property and equipment at cost, less accumulated depreciation. We capitalize major renewals and improvements, while we charge minor replacements, maintenance, and repairs to current operations. We compute depreciation by applying the straight-line method over estimated useful lives, which are generally five to seven years. Compensated Absences We accrue a liability for compensated absences in accordance with Accounting Standards Codifications 710 – Compensation – General Stock-Based Compensation We account for stock-based compensation at fair value in accordance with SFAS No. 123 and 123 (R) (ASC 718). There were 157,500 shares of common stock were issued to employees, members of the Board of Directors, and members of the Advisory Committee for services during the three months ended June 30, 2018. On March 12, 2018, we entered into an employment agreement with an executive, that included, among other provisions, an equity grant of 400,000 shares of restricted common stock that vests at the rate of 100,000 shares annually for four years. The $660,000 compensation value is being recognized ratably on a straight-line basis over the four-year period covered by the agreement. Additionally, on May 1, 2018, we entered into an employment agreement that included, among other provisions, an equity grant of 100,000 shares of restricted common stock that vest at a rate of 33,333 shares annually for three years. The $250,000 compensation value is being recognized on a straight-line basis over the three-year period covered by the agreement. Concentrations of Credit Risk Accounts at banks are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000 at various times. As of June 30, 2018, our bank account balances exceeded federally insured limits. Income Taxes We file federal and state income tax returns in accordance with the applicable rules of each jurisdiction. We account for income taxes under the asset and liability method in accordance with Accounting Standards Codification 740 - Income Taxes ("ASC 740"). The provision for income taxes includes federal, state, and local income taxes currently payable, and deferred taxes. We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable amounts in years in which those temporary differences are expected to be recovered or settled. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. In accordance with ASC 740, we recognize the effect of income tax positions only if those positions are more likely than not of being sustained. We measure recognized income tax positions at the largest amount that is greater than 50% likely of being realized. We reflect changes in recognition or measurement in the period in which the change in judgment occurs. We currently have substantial net operating loss carryforwards. We have recorded a valuation allowance equal to the net deferred tax assets due to the uncertainty of the ultimate realization of the deferred tax assets. Contingencies Certain conditions may exist as of the date the consolidated financial statements are issued that may result in a loss to us but will only be resolved when one or more future events occur or fail to occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of any legal proceedings or unasserted claims and the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability is reasonably estimated, the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of range of possible loss if determinable and material, would be disclosed. There were no known contingencies at June 30, 2018 or March 31, 2018. Recent Accounting Pronouncements In May 2014, FASB issued ASU 2014-09, “Revenue from Contracts with Customers”. This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The revised effective date for this ASU is for annual and interim periods beginning on or after December 15, 2017, and early adoption will be permitted, but not earlier than the original effective date of annual and interim periods beginning on or after December 15, 2016, for public entities. We will adopt this ASU when effective. Companies may use either a full retrospective or modified retrospective approach to adopt this ASU and our management is currently evaluation which transition approach to use. We have adopted AUS 2014-09 as of January 1, 2018, and it did not have a material impact on the Company’s consolidated results of operations, financial position or cash flows for the period ended March 31, 2018. In February 2016, the FASB issued ASU 2016-02 – “Leases (Topic 842)” Under ASU 2016-02, entities will be required to recognize lease asset and lease liabilities by lessees for those leases classified as operating leases. Among other changes in accounting for leases, a lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to (and a lessor) should include payments to be made in optional periods only if the lessee is reasonably certain to exercise an option to extend the lease or not to exercise an option to terminate the lease. Similarly, optional payments to purchase the underlying asset should be included in the measurement of lease assets and lease liabilities only if the lessee is reasonably certain to exercise that purchase option. The amendments in ASU 2016-02 will become effective for fiscal years beginning after December 15, 2018, including interim periods with those fiscal years for public business entities. We are currently evaluating the effect of the adoption of ASU 2016-02 will have on our consolidated results of operations, financial position or cash flows. On June 20, 2018, the FASB expanded the scope of Accounting Standards Codification (ASC) 718, Compensation – Stock Compensation, to include share-based payments to nonemployees for goods and services. The accounting board said the amendments in Accounting Standards Update (ASU) No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, align the guidance for stock compensation to employees and nonemployees. The amended guidance replaces ASC 505-50, Equity – Equity-Based Payments to Non-Employees. We anticipate that this ASC will not have a material effect on the Company’s financial statements. The amendments in ASU No. 2018-07 apply “to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards,” the FASB said. But the amended guidance does not cover stock compensation that is used to provide financing to the company that issued the shares or stock awards tied to a sale of goods or services as part of a contract accounted for according to ASC 606, Revenue From Contracts With Customers. The amendments are effective for public companies for fiscal years that begin after December 15, 2018, and the quarterly and other interim periods in those years, the FASB said. Private companies have until their fiscal years that start after Dec. 15, 2019, before applying the changes to annual reports. Private companies can wait until their fiscal years that start after Dec. 15, 2020, before they apply the changes to their reporting periods of less than a year. The accounting board also said the amended guidance can be applied before it becomes effective, but businesses are not permitted to use the guidance in ASU No. 2018-07 before it becomes effective, but businesses are not permitted to use the guidance in ASU No. 2018-07 before they have implemented ASC 606. We have evaluated the effect of the adoption of ASU 2018-07 will have on our consolidated results of operations, financial position or cash flows and determine the effects will not be material to the Company’s financial statements. Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. Loss Per Common Share We calculate basic loss per share using the weighted-average number of shares of common stock outstanding during each reporting period. Diluted loss per share includes potentially dilutive securities, such as outstanding options and warrants, using various methods, such as the treasury stock or modified treasury stock method, in the determination of dilutive shares outstanding during each reporting period. We have issued warrants to purchase 9,328,153 shares of common stock and equity grants of 500,000 shares of common stock that are potentially dilutive. All weighted average numbers were adjusted for the reverse stock split and merger transaction. Diluted earnings per share exclude all potentially dilutive shares because their effect is anti-dilutive. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 3 – INVENTORIES At June 30, 2018 and March 31, 2018, the inventory balances are composed of: June 30, 2018 March 31, 2018 Finished product $ 1,125,960 $ 809,680 Raw materials 1,761,587 1,471,666 Work in process 235,692 123,661 $ 3,123,239 $ 2,405,007 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4 – PROPERTY AND EQUIPMENT We state property and equipment at historical cost less accumulated depreciation. We compute depreciation using the straight-line method at rates intended to depreciate the cost of assets over their estimated useful lives, which are generally five to seven years. Upon retirement or sale of property and equipment, we remove the cost of the disposed assets and related accumulated depreciation from the accounts and any resulting gain or loss is credited or charged to selling, general, and administrative expenses. We charge expenditures for normal repairs and maintenance to expense as incurred. We capitalize additions and expenditures for improving or rebuilding existing assets that extend the useful life. Leasehold improvements made either at the inception of the lease or during the lease term are amortized over the shorter of their economic lives or the lease term including any renewals that are reasonably assured Property and equipment consisted of the following at June 30, 2018 and March 31, 2018: June 30, 2018 March 31, 2018 Leasehold Improvements $ 31,682 $ 17,772 Furniture and Fixtures 8,102 8,102 Vehicles 103,511 89,388 Equipment 832,451 879,871 Tooling 945,102 359,351 Total property and equipment $ 1,920,848 $ 1,354,484 Less accumulated depreciation (168,081 ) (113,158 Net property and equipment 1,752,767 1,241,326 Depreciation Expense for the three months ended June 30, 2018 and March 31, 2018 totaled $54,923 and $35,297, respectively. |
CAPITAL STOCK
CAPITAL STOCK | 3 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
CAPITAL STOCK | NOTE 5 – CAPITAL STOCK During the three month period ended June 30, 2018, we issued 3,143,281 shares of common stock as follows: · 1,967,886 shares were sold to investors for $3,247,030 · 1,007,400 shares were issued through exercised warrants of $2,354,125 · 10,495 shares were issued through a cashless warrant exercise · 157,500 shares valued at $319,375 were issued to employees, members of the Board of Directors, and members of the Advisory Committee as compensation In April of 2018, our second placement agreement to secure equity capital from qualified investors to provide funds to our operations ended. The offering consisted of Units priced at $1.65, which included one share of common stock and one five-year warrant to purchase an additional half-share of common stock for an exercise price of $2.00 per share. Effectively, every two units purchased provided the investor with a five-year warrant at an exercise price of $2.00 per share. Units sold under this agreement totaled 1,967,886 shares of common stock and 983,943 warrants for $3,247,030 for the three-month period ended June 30, 2018. For services provided under the placement agreements, the placement agent collected a 12% cash fee on the sale of every Unit and a fee payable in warrants equaling 12% of the total Units sold. These warrants have a term of seven years and an exercise price of $1.65 per share. The cash fee totaled $389,644 for the three month period ended June 30, 2018, including reimbursed expenses. Under this agreement, we recognized 236,244 warrants as authorized, but unissued as of June 30, 2018. At June 30, 2018, outstanding and exercisable stock purchase warrants consisted of the following: Number of Shares Weighted Averaged Exercise Price Weighted Average Life Remaining (Years) Outstanding at March 31, 2018 $ 8,872,160 $ 2.43 1.77 Granted 1,494,112 2.04 4.58 Exercised (1,022,119 ) 2.33 - Forfeited or cancelled - - - Expired (16,000 ) 2.32 - Outstanding at June 30, 2018 9,328,153 $ 1.93 2.80 Exercisable at June 30, 2018 9,328,153 $ 1.93 2.80 As of June 30, 2018, we had 9,328,153 warrants outstanding. Each warrant provides the holder the right to purchase up to one share of our Common Stock at a predetermined exercise price. The outstanding warrants consist of (1) warrants to purchase an aggregate of 4,223,260 shares of Common Stock at an average price of $2.50 per share over the next three years; (2) warrants to purchase 966,494 shares of Common Stock at an exercise price of $1.65 per share until March 2025; (3) warrants to purchase 4,088,399 shares of our Common Stock at an exercise price of $2.00 per share until March 2025; and (4) 50,000 warrants to purchase shares of Common Stock at an exercise price of $0.50 until October 2019 On May 24, 2018, per the terms of the private offering, dated January 25, 2017, we called for the exercise of warrants to purchase a total of 4,947,600 shares of our Common Stock. According to the terms of the Warrant Purchase Agreement, the warrants could be called when the average price of our common stock traded at $5.00 per share or higher, for a consecutive 30 day period. This call provision was met on May 21, 2018. As a result, we issued formal notice to all warrant holders on May 24, 2018, advising them that they had until July 6, 2018, to exercise their warrants, or they would become null and void. The total number of warrants included in the January 25, 2017 offering were 4,947,600 and were priced as follows: 4,790,100 warrants at an exercise price of $2.50, 67,500 warrants at an exercise price of $1.25 and 90,000 warrants at an exercise price of $0.50. As of June 30, 2018, a total of 1,007,400 warrants were exercised to purchase an equivalent 1,007,400 shares of common stock at an average price of $2.34 per share. As of July 6, 2018, an additional 965,400 warrants were exercised to purchase an equivalent 965,400 shares of common stock at an average price of $2.50 and 2,974,800 warrants to purchase shares of Common Stock were cancelled. On July 12, 2018, the company filed a Form 8-K to report the activity of this event. Additionally, there was a cashless exercise of 14,719 warrants resulting in the issuance of 10,495 shares of Common Stock unrelated to the call for the exercise of warrants. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 6 - SUBSEQUENT EVENTS On July 3, 2018, we purchased equipment to manufacture larger calibers of ammunition to serve hunting and military customers. The equipment cost $665,500 and has a useful life of 7 years. On July 6, 2018, we filed a Form S-1 registration statement under the Securities Act covering the resale of shares of Common Stock issued or underlying warrants sold by a private placement that close in April 2018 (see Note 5). On July 6, 2018, we entered into a letter of intent to acquire an Arizona research and development company that has designed a series of custom projectiles that meet current requirements under research programs for U.S. and foreign customers. We are conducting due diligence on their patents pending and market acceptance for the products created. On July 17, 2018, the United States Patent and Trademark office granted our trademark for STREAK VISUAL AMMUNITION™, the brand name under which we market our visual one-way luminescent line of ammunition. On July 29, 2018, we entered into a private placement agreement to raise up to $13,000,000 in the form of debt maturing in 24 months carrying interest at the rate of 10% simple and convertible to common stock at the rate of $2.50 per common share. The placement agent will receive cash compensation in the amount of 7% of gross proceeds raised and an additional 3% of proceeds that convert to common shares. The agreement requires the Company to file a registration statement 90 days following an accepted funding under the agreement. On August 2, 2018, we placed a deposit for $1,000,000 with a lending institution under an agreement to acquire the lender’s position relative to financing provided to an industry participant. The deposit is returnable until September 1, 2018. The Company evaluated subsequent events through August 14, 2018, the date the financial statements were issued, and determined that there are not any other items to disclose. |
SUMMARY OF SIGNIFICANT ACCOUN14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
ACCOUNTING BASIS | Accounting Basis We use the accrual basis of accounting and accounting principles generally accepted in the United States of America ("GAAP") and all amounts are expressed in U.S. dollars. We have adopted a March 31 year end. The financial statements and related disclosures as of June 30, 2018, March 31, 2018, and June 30, 2017 are presented pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Unless the context otherwise requires, all references to "Ammo", "we", "us", "our," or the "Company" are to AMMO, Inc., a Delaware corporation. |
PRINCIPLES OF CONSOLIDATION | Principles of Consolidation The consolidated financial statements include the accounts of Ammo, Inc. and its wholly owned subsidiaries, SNI, LLC, and Ammo Technologies, Inc (inactive). All significant intercompany accounts and transactions are eliminated in consolidation. |
USE OF ESTIMATES | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
CASH AND CASH EQUIVALENTS | Cash and Cash Equivalents For purposes of the statement of cash flows, we consider highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. |
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS | Accounts Receivable and Allowance for Doubtful Accounts Our accounts receivable represent amounts due from customers for products sold and include an allowance for uncollectible accounts which is estimated based on the aging of the accounts receivable and specific identification of uncollectible accounts. At June 30, 2018 and March 31, 2018, we reserved $20,046 and $23,046, respectively, of allowance for doubtful accounts. |
LICENSING AGREEMENTS | License Agreements We are a party to a license agreement with Jesse James, a well-known motorcycle designer, and Jesse James Firearms, LLC, a Texas limited liability company, or JJF. The license agreement grants us the exclusive worldwide rights through October 15, 2021 to Mr. James' image rights and trademarks associated with him in connection with the marketing, promotion, advertising, sale, and commercial exploitation of Jesse James Branded Products. In addition, Mr. James agreed to make himself available for certain promotional activities and to promote Jesse James Branded Products through his own social media outlets. We agreed to pay Mr. James royalty fees on the sale of ammunition and non-ammunition Branded Products and to reimburse him for any out-of-pocket expenses and reasonable travel expenses. We also issued 100,000 shares of our common stock upon the execution of the license agreement with the potential issuance of up to 75,000 additional shares of common stock upon achieving certain gross sales with $15 million in gross sales required to earn the entire 75,000 shares. We are a party to a license agreement with Jeff Rann, a well-known wild game hunter and spokesman for the firearm and ammunition industries. The license agreement grants us through February 2022 the exclusive worldwide rights to Mr. Rann's image rights and trademarks associated with him in connection with the marketing, promotion, advertising, sale, and commercial exploitation of all Jeff Rann Branded Products. Mr. Rann agreed to make himself available for certain promotional activities and to promote the Branded Products through his own social media outlets. We agreed to pay Mr. Rann royalty fees on the sale of ammunition and non-ammunition Branded Products and to reimburse him for any out-of-pocket expenses and reasonable travel expenses. We also issued 100,000 shares of our common stock upon the execution of the license agreement with the potential issuance of 75,000 additional shares of common stock upon achieving certain gross sales with $15 million in gross sales required to earn the entire 75,000 shares. |
PATENT | Patent On September 28, 2017, Ammo Technologies Inc. ("ATI"), an Arizona corporation, which is 100% owned by us, merged with Hallam, Inc, a Texas corporation, with ATI being the survivor. Under the terms of the Merger, we, the sole shareholder of Ammo Technologies Inc., issued to Hallam, Inc.'s two shareholders, 600,000 shares of our common stock, subject to restrictions, and payment of $200,000. The first payment of $100,000 to the Hallam, Inc. shareholders was paid on September 13, 2017, and the second payment of $100,000 was paid on February 6, 2018. The shares were valued at $1.25 and the aggregate value of $950,000 was recorded as a patent asset. This asset will be amortized from September 2017, the first full month of the acquired rights, through October 29, 2028. Amortization of the patent for the years ended June 30, 2018 and March 31, 2018 were $21,269 and $24,461, respectively. Under the terms of the Merger, ATI succeeded to all of the assets of Hallam, Inc. and assumed the liabilities of Hallam, Inc., which were none. The primary asset of Hallam, Inc. was an exclusive license to produce projectiles and ammunition using the Hybrid Luminescence Ammunition Technology under patent U.S. 8,402,896 B1 with a publication date of March 26, 2013 owned by University of Louisiana at Lafayette. The license was formally amended and assigned to Ammo Technologies Inc. pursuant to an Assignment and First Amendment to Exclusive License Agreement. Assumption Agreement dated to be effective as of August 22, 2017, the Merger closing date. Under the terms of the Exclusive License Agreement, the Company is obligated to pay a royalty to the patent holder, based on a $0.01 per unit basis for each round of ammunition sold that incorporates this patented technology through October 29, 2028. For the three months ended June 30, 2018, the Company accrued and paid $7,147 under this agreement. For the comparable period in 2017, no amounts were accrued and paid to the patent holder as this agreement was not executed. |
IMPAIRMENT OF LONG-LIVED ASSETS | Impairment of Long-Lived Assets We continually monitor events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. No impairment expense was recognized for the three months ended June 30, 2018 and the three months ended June 30, 2017. |
REVENUE RECOGNITION | Revenue Recognition We generate revenue from the production and sale of ammunition. We recognize revenue when it is realized or realizable and earned. We consider revenue realized or realizable and earned when all of the following criteria are met: · persuasive evidence of an arrangement exists · the product has been shipped to the customer · the sales price is fixed or determinable · collectability is reasonably assured At June 30, 2018 and March 31, 2018, the Company’s customers that comprised more than ten percent (10%) of total revenues and accounts receivable were as follows: PERCENTAGES Revenues Accounts Receivable For the Three-Months ended June 30, 2018 Customers: A 62.37 % 13.01 % B - 53.89 % 62.37 % 66.90 % For the Three-Months ended March 31, 2018 Customers: A - - B 35.49 % 54.55 % C 17.07 % 12.57 % D 15.55 % 0.00 % 68.11 % 67.12 % |
ADVERTISING COSTS | Advertising Costs We expense advertising costs as they are incurred. We incurred advertising and marketing costs of $146,615 and $84,331 for the three months ended June 30, 2018 and for the three months ended June 30, 2017, respectively. |
INVENTORIES | Inventories We state inventories at the lower of cost or market. We determine cost using the average cost method. Our inventory consists of raw materials, work in progress, and finished goods. Cost of inventory includes cost of parts, labor, quality control, and all other costs incurred to bring our inventories to condition ready to be sold. We periodically evaluate and adjust inventories for obsolescence. |
PROPERTY AND EQUIPMENT | Property and Equipment We state property and equipment at cost, less accumulated depreciation. We capitalize major renewals and improvements, while we charge minor replacements, maintenance, and repairs to current operations. We compute depreciation by applying the straight-line method over estimated useful lives, which are generally five to seven years. |
COMPENSATED ABSENCES | Compensated Absences We accrue a liability for compensated absences in accordance with Accounting Standards Codifications 710 – Compensation – General |
STOCK-BASED COMPENSATION | Stock-Based Compensation We account for stock-based compensation at fair value in accordance with SFAS No. 123 and 123 (R) (ASC 718). There were 157,500 shares of common stock were issued to employees, members of the Board of Directors, and members of the Advisory Committee for services during the three months ended June 30, 2018. On March 12, 2018, we entered into an employment agreement with an executive, that included, among other provisions, an equity grant of 400,000 shares of restricted common stock that vests at the rate of 100,000 shares annually for four years. The $660,000 compensation value is being recognized ratably on a straight-line basis over the four-year period covered by the agreement. Additionally, on May 1, 2018, we entered into an employment agreement that included, among other provisions, an equity grant of 100,000 shares of restricted common stock that vest at a rate of 33,333 shares annually for three years. The $250,000 compensation value is being recognized on a straight-line basis over the three-year period covered by the agreement. |
CONCENTRATIONS OF CREDIT RISK | Concentrations of Credit Risk Accounts at banks are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000 at various times. As of June 30, 2018, our bank account balances exceeded federally insured limits. |
INCOME TAXES | Income Taxes We file federal and state income tax returns in accordance with the applicable rules of each jurisdiction. We account for income taxes under the asset and liability method in accordance with Accounting Standards Codification 740 - Income Taxes ("ASC 740"). The provision for income taxes includes federal, state, and local income taxes currently payable, and deferred taxes. We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable amounts in years in which those temporary differences are expected to be recovered or settled. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. In accordance with ASC 740, we recognize the effect of income tax positions only if those positions are more likely than not of being sustained. We measure recognized income tax positions at the largest amount that is greater than 50% likely of being realized. We reflect changes in recognition or measurement in the period in which the change in judgment occurs. We currently have substantial net operating loss carryforwards. We have recorded a valuation allowance equal to the net deferred tax assets due to the uncertainty of the ultimate realization of the deferred tax assets. |
CONTINGENCIES | Contingencies Certain conditions may exist as of the date the consolidated financial statements are issued that may result in a loss to us but will only be resolved when one or more future events occur or fail to occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of any legal proceedings or unasserted claims and the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability is reasonably estimated, the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of range of possible loss if determinable and material, would be disclosed. There were no known contingencies at June 30, 2018 or March 31, 2018. |
RECENT ACCOUNTING PRONOUNCEMENTS | Recent Accounting Pronouncements In May 2014, FASB issued ASU 2014-09, “Revenue from Contracts with Customers”. This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The revised effective date for this ASU is for annual and interim periods beginning on or after December 15, 2017, and early adoption will be permitted, but not earlier than the original effective date of annual and interim periods beginning on or after December 15, 2016, for public entities. We will adopt this ASU when effective. Companies may use either a full retrospective or modified retrospective approach to adopt this ASU and our management is currently evaluation which transition approach to use. We have adopted AUS 2014-09 as of January 1, 2018, and it did not have a material impact on the Company’s consolidated results of operations, financial position or cash flows for the period ended March 31, 2018. In February 2016, the FASB issued ASU 2016-02 – “Leases (Topic 842)” Under ASU 2016-02, entities will be required to recognize lease asset and lease liabilities by lessees for those leases classified as operating leases. Among other changes in accounting for leases, a lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to (and a lessor) should include payments to be made in optional periods only if the lessee is reasonably certain to exercise an option to extend the lease or not to exercise an option to terminate the lease. Similarly, optional payments to purchase the underlying asset should be included in the measurement of lease assets and lease liabilities only if the lessee is reasonably certain to exercise that purchase option. The amendments in ASU 2016-02 will become effective for fiscal years beginning after December 15, 2018, including interim periods with those fiscal years for public business entities. We are currently evaluating the effect of the adoption of ASU 2016-02 will have on our consolidated results of operations, financial position or cash flows. On June 20, 2018, the FASB expanded the scope of Accounting Standards Codification (ASC) 718, Compensation – Stock Compensation, to include share-based payments to nonemployees for goods and services. The accounting board said the amendments in Accounting Standards Update (ASU) No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, align the guidance for stock compensation to employees and nonemployees. The amended guidance replaces ASC 505-50, Equity – Equity-Based Payments to Non-Employees. We anticipate that this ASC will not have a material effect on the Company’s financial statements. The amendments in ASU No. 2018-07 apply “to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards,” the FASB said. But the amended guidance does not cover stock compensation that is used to provide financing to the company that issued the shares or stock awards tied to a sale of goods or services as part of a contract accounted for according to ASC 606, Revenue From Contracts With Customers. The amendments are effective for public companies for fiscal years that begin after December 15, 2018, and the quarterly and other interim periods in those years, the FASB said. Private companies have until their fiscal years that start after Dec. 15, 2019, before applying the changes to annual reports. Private companies can wait until their fiscal years that start after Dec. 15, 2020, before they apply the changes to their reporting periods of less than a year. The accounting board also said the amended guidance can be applied before it becomes effective, but businesses are not permitted to use the guidance in ASU No. 2018-07 before it becomes effective, but businesses are not permitted to use the guidance in ASU No. 2018-07 before they have implemented ASC 606. We have evaluated the effect of the adoption of ASU 2018-07 will have on our consolidated results of operations, financial position or cash flows and determine the effects will not be material to the Company’s financial statements. Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. |
LOSS PER COMMON SHARE | Loss Per Common Share We calculate basic loss per share using the weighted-average number of shares of common stock outstanding during each reporting period. Diluted loss per share includes potentially dilutive securities, such as outstanding options and warrants, using various methods, such as the treasury stock or modified treasury stock method, in the determination of dilutive shares outstanding during each reporting period. We have issued warrants to purchase 9,328,153 shares of common stock and equity grants of 500,000 shares of common stock that are potentially dilutive. All weighted average numbers were adjusted for the reverse stock split and merger transaction. Diluted earnings per share exclude all potentially dilutive shares because their effect is anti-dilutive. |
SUMMARY OF SIGNIFICANT ACCOUN15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Table) | 3 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of concentration | At June 30, 2018 and March 31, 2018, the Company’s customers that comprised more than ten percent (10%) of total revenues and accounts receivable were as follows: PERCENTAGES Revenues Accounts Receivable For the Three-Months ended June 30, 2018 Customers: A 62.37 % 13.01 % B - 53.89 % 62.37 % 66.90 % For the Three-Months ended March 31, 2018 Customers: A - - B 35.49 % 54.55 % C 17.07 % 12.57 % D 15.55 % 0.00 % 68.11 % 67.12 % |
INVENTORIES (Table)
INVENTORIES (Table) | 3 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | At June 30, 2018 and March 31, 2018, the inventory balances are composed of: June 30, 2018 March 31, 2018 Finished product $ 1,125,960 $ 809,680 Raw materials 1,761,587 1,471,666 Work in process 235,692 123,661 $ 3,123,239 $ 2,405,007 |
PROPERTY AND EQUIPMENT (Table)
PROPERTY AND EQUIPMENT (Table) | 3 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment consisted of the following at June 30, 2018 and March 31, 2018: June 30, 2018 March 31, 2018 Leasehold Improvements $ 31,682 $ 17,772 Furniture and Fixtures 8,102 8,102 Vehicles 103,511 89,388 Equipment 832,451 879,871 Tooling 945,102 359,351 Total property and equipment $ 1,920,848 $ 1,354,484 Less accumulated depreciation (168,081 ) (113,158 Net property and equipment 1,752,767 1,241,326 |
CAPITAL STOCK (Table)
CAPITAL STOCK (Table) | 3 Months Ended |
Jun. 30, 2018 | |
Notes to Financial Statements | |
Outstanding and exercisable stock purchase warrants | At June 30, 2018, outstanding and exercisable stock purchase warrants consisted of the following: Number of Shares Weighted Averaged Exercise Price Weighted Average Life Remaining (Years) Outstanding at March 31, 2018 $ 8,872,160 $ 2.43 1.77 Granted 1,494,112 2.04 4.58 Exercised (1,022,119 ) 2.33 - Forfeited or cancelled - - - Expired (16,000 ) 2.32 - Outstanding at June 30, 2018 9,328,153 $ 1.93 2.80 Exercisable at June 30, 2018 9,328,153 $ 1.93 2.80 |
SUMMARY OF SIGNIFICANT ACCOUN19
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended | |
Jun. 30, 2018 | Mar. 31, 2018 | |
Sales Revenue, Net [Member] | ||
Concentration Percentage | 62.37% | 68.11% |
Sales Revenue, Net [Member] | A [Member] | ||
Concentration Percentage | 62.37% | 0.00% |
Sales Revenue, Net [Member] | B [Member] | ||
Concentration Percentage | 0.00% | 35.49% |
Sales Revenue, Net [Member] | C [Member] | ||
Concentration Percentage | 17.07% | |
Sales Revenue, Net [Member] | D [Member] | ||
Concentration Percentage | 15.55% | |
Accounts receivable [Member] | ||
Concentration Percentage | 66.90% | 67.12% |
Accounts receivable [Member] | A [Member] | ||
Concentration Percentage | 13.01% | 0.00% |
Accounts receivable [Member] | B [Member] | ||
Concentration Percentage | 53.89% | 54.55% |
Accounts receivable [Member] | C [Member] | ||
Concentration Percentage | 12.57% | |
Accounts receivable [Member] | D [Member] | ||
Concentration Percentage | 0.00% |
SUMMARY OF SIGNIFICANT ACCOUN20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | May 01, 2018 | Mar. 12, 2018 | Feb. 06, 2018 | Sep. 13, 2017 | Sep. 28, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Mar. 31, 2018 |
Allowance for doubtful accounts | $ 20,046 | $ 23,046 | ||||||
Impairment expense | 0 | $ 0 | ||||||
Advertising and marketing costs | 146,615 | $ 84,331 | ||||||
Federal Deposit Insurance Corporation limit | 250,000 | |||||||
Contingency | $ 0 | $ 0 | ||||||
Common stock issued to employees for services | 157,500 | |||||||
Option granted | 1,494,112 | 4,542,338 | ||||||
Warrant [Member] | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 9,328,153 | |||||||
Equity grants [Member] | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 500,000 | |||||||
Employment agreement | Executive [Member] | ||||||||
Option granted | 100,000 | 400,000 | ||||||
Vesting period | 3 years | 4 years | ||||||
Compensation expenses | $ 250,000 | $ 660,000 | ||||||
Minimum [Member] | ||||||||
Property and equipment useful life | 5 years | |||||||
Maximum [Member] | ||||||||
Property and equipment useful life | 7 years | |||||||
Patents [Member] | ||||||||
Shares issued for patents, Share | 600,000 | |||||||
Shares issued for patents, Amount | $ 950,000 | |||||||
Share price | $ 1.25 | |||||||
Payment of note payable related party | $ 7,147 | $ 0 | ||||||
Amortization | $ 21,269 | $ 24,461 | ||||||
Jeff Rann | Licensing Agreements [Member] | ||||||||
Common stock issued for cash , Shares | 100,000 | |||||||
Additional common stock issued | 75,000 | |||||||
Gross sale | $ 15,000,000 | |||||||
Expiration Period | Oct. 15, 2021 | |||||||
Jesse James | Licensing Agreements [Member] | ||||||||
Common stock issued for cash , Shares | 100,000 | |||||||
Additional common stock issued | 75,000 | |||||||
Gross sale | $ 15,000,000 | |||||||
Expiration Period | Feb. 28, 2022 | |||||||
Hallam, Inc | ||||||||
Payment of note payable related party | $ 200,000 | |||||||
Hallam, Inc | Shareholders | ||||||||
Payment of note payable related party | $ 100,000 | $ 100,000 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Finished product | $ 1,125,960 | $ 809,680 |
Raw materials | 1,761,587 | 1,471,666 |
Work in process | 235,692 | 123,661 |
Inventory, net | $ 3,123,239 | $ 2,405,007 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 |
Total property and equipment | $ 1,920,848 | $ 1,354,484 |
Less accumulated depreciation | (168,081) | (113,158) |
Net property and equipment | 1,752,767 | 1,241,326 |
Leasehold Improvements [Member] | ||
Total property and equipment | 31,682 | 17,772 |
Furniture and Fixtures [Member] | ||
Total property and equipment | 8,102 | 8,102 |
Vehicles [Member] | ||
Total property and equipment | 103,511 | 89,388 |
Equipment [Member] | ||
Total property and equipment | 832,451 | 879,871 |
Tooling | ||
Total property and equipment | $ 945,102 | $ 359,351 |
PROPERTY AND EQUIPMENT (Detai23
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 54,923 | $ 35,297 |
CAPITAL STOCK (Details)
CAPITAL STOCK (Details) - $ / shares | Jul. 06, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Mar. 31, 2018 |
Notes to Financial Statements | ||||
Number of shares, Outstanding Beginning | 9,328,153 | 8,872,160 | ||
Number of shares granted | 1,494,112 | 4,542,338 | ||
Number of shares exercised | (1,022,119) | |||
Number of shares forfeited or cancelled | 2,974,800 | 0 | ||
Number of shares expired | (16,000) | |||
Number of shares Outstanding ending | 9,328,153 | |||
Number of shares exercisable | 9,328,153 | 8,872,160 | ||
Weighted Average Exercise Price Outstanding Beginning | $ 1.93 | $ 2.43 | ||
Weighted Average Exercise Price granted | 2.04 | |||
Weighted Average Exercise Price exercised | 2.33 | |||
Weighted Average Exercise Price forfeited or cancelled | 0 | |||
Weighted Average Exercise Price expired | 2.32 | |||
Weighted Average Exercise Price Outstanding ending | 1.93 | |||
Weighted Average Exercise Price exercisable | $ 1.93 | $ 2.23 | ||
Weighted Average Life Remaining (Years) Outstnding Beginning | 1 year 9 months 7 days | |||
Weighted Average Life Remaining (Years), granted | 4 years 6 months 29 days | |||
Weighted Average Life Remaining (Years) Outstnding ending | 2 years 9 months 18 days | |||
Weighted Average Life Remaining (Years), exercisable | 2 years 9 months 18 days |
CAPITAL STOCK (Details Narrativ
CAPITAL STOCK (Details Narrative) - USD ($) | Jul. 06, 2018 | May 24, 2018 | Apr. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Apr. 30, 2017 |
Common stock issued | 1,967,886 | |||||
Sale of common stock, Shares | 3,247,030 | |||||
Common stock issued for exercised warrants , Shares | 965,400 | 1,007,400 | ||||
Common stock issued for exercised warrants, Amount | $ 2,354,125 | |||||
Common stock issued for cashless warrant exercise , Shares | 10,495 | |||||
Employee stock awards, Share | 157,500 | |||||
Employee stock awards, Amount | $ 319,375 | $ 0 | ||||
Exercise price | $ 2.50 | $ 2.34 | ||||
Warrants outstanding | 9,328,153 | |||||
Number of common stock purchased for warrants | 4,947,600 | |||||
Number of shares forfeited or cancelled | 2,974,800 | 0 | ||||
Number of additional cashless exercise of warrants | 14,719 | |||||
Warrant One [Member] | ||||||
Warrants exercise price | $ 2.50 | $ 2.50 | ||||
Number of common stock purchased for warrants | 4,790,100 | 4,223,260 | ||||
Warrant Two [Member] | ||||||
Warrants exercise price | $ 1.25 | $ 1.65 | ||||
Number of common stock purchased for warrants | 67,500 | 966,494 | ||||
Warrant Three [Member] | ||||||
Warrants exercise price | $ 0.50 | $ 2 | ||||
Number of common stock purchased for warrants | 90,000 | 4,088,399 | ||||
Warrant Four [Member] | ||||||
Warrants exercise price | $ 0.50 | |||||
Number of common stock purchased for warrants | 50,000 | |||||
Placement agent agreement | 2017 Equity Incentive Plan | ||||||
Sale of common stock, Shares | 1,967,886 | |||||
Unit price | $ 1.65 | |||||
Exercise price | $ 2 | |||||
Warrants sold | 983,943 | |||||
Value of sale of common stock and warrants | $ 3,247,030 | |||||
Cash fee in percentage | 12.00% | |||||
Warrants term | 5 years | 7 years | ||||
Warrants exercise price | $ 1.65 | |||||
Cash fee | $ 389,644 | |||||
Warrants authorized, but unissued | 673,605 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($) | Jul. 03, 2018 | Jul. 29, 2018 | Aug. 02, 2018 |
Equipment cost | $ 665,500 | ||
Useful life | 7 years | ||
Deposit | $ 1,000,000 | ||
Private placement agreement | |||
Debt | $ 13,000,000 | ||
Interest rate | 10.00% | ||
Term | 24 months | ||
Conversion price | $ 2.50 |