| Significant Accounting Policies | 2.
Significant Accounting Policies Use
of estimates The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. Those estimates and assumptions include estimates for reserves of uncollectible accounts, inventory
obsolescence, depreciable lives of property and equipment, analysis of impairments of recorded long-term tangible and intangible
assets, realization of deferred tax assets, accruals for potential liabilities and assumptions made in valuing stock instruments
issued for services. Revenue
Recognition The
Company recognizes revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606), (“ASC 606”).
The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount
expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms
of contract(s), which include (1) identifying the contract or agreement with a customer, (2) identifying our performance obligations
in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance
obligations, and (5) recognizing revenue as each performance obligation is satisfied. The
Company does not have any significant contracts with customers requiring performance beyond delivery, and contracts with customers
contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. Shipping and handling activities
are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than a promised
service to the customer. Revenue and costs of sales are recognized when control of the products transfers to our customer, which
generally occurs upon shipment from our facilities. The Company’s performance obligations are satisfied at that time. All
of the Company’s products are offered for sale as finished goods only, and there are no performance obligations required
post-shipment for customers to derive the expected value from them. The
Company does not allow for returns, except for damaged products when the damage occurred pre-fulfillment. Damaged product returns
have historically been insignificant. Because of this, the stand-alone nature of our products, and our assessment of performance
obligations and transaction pricing for our sales contracts, we do not currently maintain a contract asset or liability balance
for obligations. We assess our contracts and the reasonableness of our conclusions on a quarterly basis. Loss
per Common Share Basic
earnings (loss) per share is computed by dividing the net income (loss) applicable to common stockholders by the weighted average
number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed by dividing the
net income applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional
common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock
method. Potential common shares are excluded from the computation when their effect is antidilutive. For
the periods ended June 30, 2020 and 2019, the calculations of basic and diluted loss per share are the same because potential
dilutive securities would have had an anti-dilutive effect. The potentially dilutive securities consisted of the following: Schedule of Potentially Dilutive Securities
June 30, 2020 June 30, 2019
Convertible note to a related party 2,266,667 2,266,667
Warrants 6,413,782 6,620,282
Common stock equivalent of Series A Convertible Preferred stock 37,644 37,644
Common stock issuable 350,000 -
Unvested restricted common stock 150,000 614,514
Options 4,777,907 4,365,566
Total 13,996,000 13,904,673 The
Series A Convertible Preferred Stock is convertible into Common shares at the rate of 1:4. Stock
Compensation Expense The
Company periodically issues stock options and restricted stock awards to employees and non-employees in non-capital raising transactions
for services and for financing costs. The Company accounts for such grants issued and vesting based on ASC 718, whereby the value
of the award is measured on the date of grant and recognized as compensation expense on the straight-line basis over the vesting
period. The Company recognizes the fair value of stock-based compensation within its Statements of Operations with classification
depending on the nature of the services rendered. The
fair value of the Company’s stock options is estimated using the Black-Scholes-Merton Option Pricing model, which uses certain
assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock,
and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing
model and based on actual experience. The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect
compensation expense recorded in future periods. Advertising
Costs Advertising
costs are expensed as incurred and are included in selling and marketing expense. Advertising costs for the three months ended
June 30, 2020 and 2019, aggregated $ 303 1,227 606 1,533 Concentrations Gross
sales. 26 13 25 14 29 14 28 12 10 Accounts
receivable. 23 14 Purchases
from vendors. 10 11 10 13 10 10 Accounts
payable. 12 11 19 15 14 Fair
Value of Financial Instruments The
Company uses various inputs in determining the fair value of its financial assets and liabilities and measures these assets on
a recurring basis. Financial assets recorded at fair value are categorized by the level of subjectivity associated with the inputs
used to measure their fair value. ASC 820 defines the following levels of subjectivity associated with the inputs: Level
1—Quoted prices in active markets for identical assets or liabilities. Level
2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level
3—Unobservable inputs based on the Company’s assumptions. The
carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, short-term bank
loans, accounts payable, notes payable and other payables, approximate their fair values because of the short maturity of these
instruments. The carrying values of capital lease obligations and long-term financing obligations approximate their fair values
because interest rates on these obligations are based on prevailing market interest rates. As
of June 30, 2020, and December 31, 2019, the Company’s balance sheets included Level 2 liabilities comprised of the fair
value of warrant liabilities aggregating $ 15 8 Recent
Accounting Pronouncements In
June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires entities to
use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain
types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses.
ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted. The Company does not believe
the potential impact of the new guidance and related codification improvements will be material to its financial position, results
of operations and cash flows. Other
recent accounting pronouncements issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified Public
Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on
the Company’s present or future financial statements. |
