Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 22, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-53754 | |
Entity Registrant Name | VYSTAR CORPORATION | |
Entity Central Index Key | 0001308027 | |
Entity Tax Identification Number | 20-2027731 | |
Entity Incorporation, State or Country Code | GA | |
Entity Address, Address Line One | 725 Southbridge St | |
Entity Address, City or Town | Worcester | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 01610 | |
City Area Code | (508) | |
Local Phone Number | 791-9114 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,294,145,560 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 346,631 | $ 620,539 |
Accounts receivable, net | 442,252 | 236,106 |
Inventories | 5,431,236 | 6,546,481 |
Investments - equity securities, at fair value | 127,910 | |
Prepaid expenses and other | 501,804 | 565,550 |
Deferred commission costs | 82,350 | 106,954 |
Total current assets | 6,804,273 | 8,203,540 |
Property and equipment, net | 914,138 | 1,631,651 |
Operating lease right-of-use assets | 8,005,031 | 9,199,730 |
Finance lease right-of-use assets, net | 593,024 | 730,761 |
Other assets: | ||
Intangible assets, net | 1,550,200 | 1,835,987 |
Goodwill | 460,301 | 460,301 |
Inventories, long-term | 277,693 | 438,161 |
Deferred commission costs, net of current portion | 75,612 | 134,213 |
Other | 41,253 | 26,253 |
Total other assets | 2,405,059 | 2,894,915 |
Total assets | 18,721,525 | 22,660,597 |
Current liabilities: | ||
Accounts payable | 4,517,282 | 4,830,143 |
Accrued expenses | 1,163,707 | 3,422,796 |
Stock subscription payable | 1,125,421 | 2,589,556 |
Operating lease liabilities - current maturities | 687,000 | 1,095,500 |
Finance lease liabilities - current maturities | 147,000 | 172,900 |
Shareholder, convertible and contingently convertible notes payable and accrued interest - current maturities | 1,373,380 | 1,046,059 |
Related party debt - current maturities | 332,000 | 1,537,000 |
Unearned revenue | 1,246,790 | 1,904,256 |
Derivative liabilities | 1,833,100 | 1,766,700 |
Total current liabilities | 12,425,680 | 18,364,910 |
Long-term liabilities: | ||
Term notes | 1,402,900 | |
Operating lease liabilities, net of current maturities | 5,820,259 | 6,515,103 |
Finance lease liabilities, net of current maturities | 472,605 | 577,192 |
Unearned revenue, net of current maturities | 300,716 | 523,515 |
Related party debt, net of current maturities and debt discount | 3,879,934 | 2,035,934 |
Total long-term liabilities | 10,473,514 | 11,054,644 |
Total liabilities | 22,899,194 | 29,419,554 |
Stockholders’ deficit: | ||
Convertible preferred stock, $0.0001 par value 15,000,000 shares authorized; 8,698 and 13,698 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively (liquidation preference of $72,357 and $100,698 at September 30, 2021 and December 31, 2020, respectively) | 1 | 1 |
Common stock, $0.0001 par value, 1,500,000,000 shares authorized; 1,294,175,560 and 1,199,931,717 shares issued at September 30, 2021 and December 31, 2020, respectively, and 1,294,145,560 and 1,199,901,717 shares outstanding at September 30, 2021 and December 31, 2020, respectively | 129,415 | 119,990 |
Additional paid-in capital | 43,719,698 | 41,233,471 |
Accumulated deficit | (49,450,911) | (48,713,184) |
Common stock in treasury, at cost; 30,000 shares | (30) | (30) |
Total Vystar stockholders’ deficit | (5,601,827) | (7,359,752) |
Noncontrolling interest | 1,424,158 | 600,795 |
Total stockholders’ deficit | (4,177,669) | (6,758,957) |
Total liabilities and stockholders’ deficit | $ 18,721,525 | $ 22,660,597 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Convertible preferred stock, par value | $ 0.0001 | $ 0.0001 |
Convertible preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Convertible preferred stock, shares issued | 8,698 | 13,698 |
Convertible preferred stock, shares outstanding | 8,698 | 13,698 |
Convertible preferred stock, liquidation preference | $ 72,357 | $ 100,698 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,500,000,000 | 1,500,000,000 |
Common stock, shares issued | 1,294,175,560 | 1,199,931,717 |
Common stock, shares outstanding | 1,294,145,560 | 1,199,901,717 |
Treasury stock, shares | 30,000 | 30,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenue | $ 4,066,597 | $ 5,544,563 | $ 23,150,720 | $ 13,865,707 |
Cost of revenue | 1,932,290 | 2,527,403 | 10,576,205 | 6,450,421 |
Gross profit | 2,134,307 | 3,017,160 | 12,574,515 | 7,415,286 |
Operating expenses: | ||||
Salaries, wages and benefits | 1,188,835 | 1,535,449 | 4,713,623 | 3,655,162 |
Share-based compensation | 207,382 | 716,161 | 623,501 | 1,024,788 |
Agent fees | 312,214 | 579,750 | 2,641,654 | 635,919 |
Professional fees | 124,285 | 311,514 | 343,246 | 855,397 |
Advertising | 365,369 | 469,383 | 1,774,022 | 1,150,540 |
Rent | 331,056 | 300,965 | 967,287 | 894,275 |
Service charges | 147,466 | 132,542 | 456,481 | 360,465 |
Depreciation and amortization | 193,158 | 249,834 | 577,539 | 737,682 |
Other operating | 812,817 | 892,239 | 2,490,302 | 2,161,852 |
Total operating expenses | 3,682,582 | 5,187,837 | 14,587,655 | 11,476,080 |
Loss from operations | (1,548,275) | (2,170,677) | (2,013,140) | (4,060,794) |
Other income (expense): | ||||
Gain (loss) on settlement of debt, net | (1,419,461) | 2,675,926 | (1,419,461) | |
Interest expense, net | (186,732) | (430,711) | (540,062) | (1,646,104) |
Change in fair value of derivative liabilities | (88,200) | 143,000 | (1,400) | (336,900) |
Loss on legal settlement | (101,000) | (101,000) | ||
Other income (expense), net | (135,612) | 15,316 | (35,688) | 35,990 |
Total other income (expense), net | (410,544) | (1,792,856) | 2,098,776 | (3,467,475) |
Net income (loss) | (1,958,819) | (3,963,533) | 85,636 | (7,528,269) |
Net (income) loss attributable to noncontrolling interest | 439,512 | 372,759 | (823,363) | 703,846 |
Net loss attributable to Vystar | $ (1,519,307) | $ (3,590,774) | $ (737,727) | $ (6,824,423) |
Loss per share: | ||||
Basic | $ 0 | $ 0 | $ 0 | $ (0.01) |
Diluted | $ 0 | $ 0 | $ 0 | $ (0.01) |
Weighted average number of common shares | ||||
Basic | 1,281,650,465 | 1,159,968,315 | 1,262,724,051 | 1,159,968,315 |
Diluted | 1,281,650,465 | 1,159,968,315 | 1,262,724,051 | 1,159,968,315 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total Vystar Stockholders' Deficit [Member] | Noncontrolling Interest [Member] | Total |
Beginning Balance, value at Dec. 31, 2019 | $ 1 | $ 110,573 | $ 38,436,607 | $ (41,104,967) | $ (30) | $ (2,557,816) | $ 1,325,272 | $ (1,232,544) |
Beginning balance, shares at Dec. 31, 2019 | 13,828 | 1,105,762,080 | (30,000) | |||||
Share based compensation - options | 5,562 | 5,562 | 5,562 | |||||
Net income (loss) | (1,367,377) | (1,367,377) | (110,946) | (1,478,323) | ||||
Ending Balance, value at Mar. 31, 2020 | $ 1 | $ 110,573 | 38,442,169 | (42,472,344) | $ (30) | (3,919,631) | 1,214,326 | (2,705,305) |
Ending balance, shares at Mar. 31, 2020 | 13,828 | 1,105,762,080 | (30,000) | |||||
Beginning Balance, value at Dec. 31, 2019 | $ 1 | $ 110,573 | 38,436,607 | (41,104,967) | $ (30) | (2,557,816) | 1,325,272 | (1,232,544) |
Beginning balance, shares at Dec. 31, 2019 | 13,828 | 1,105,762,080 | (30,000) | |||||
Net income (loss) | (7,528,269) | |||||||
Ending Balance, value at Sep. 30, 2020 | $ 1 | $ 115,996 | 40,482,509 | (47,929,390) | $ (30) | (7,330,914) | 621,426 | (6,709,488) |
Ending balance, shares at Sep. 30, 2020 | 13,698 | 1,159,998,315 | (30,000) | |||||
Beginning Balance, value at Mar. 31, 2020 | $ 1 | $ 110,573 | 38,442,169 | (42,472,344) | $ (30) | (3,919,631) | 1,214,326 | (2,705,305) |
Beginning balance, shares at Mar. 31, 2020 | 13,828 | 1,105,762,080 | (30,000) | |||||
Share based compensation - options | 5,562 | 5,562 | 5,562 | |||||
Net income (loss) | (1,866,272) | (1,866,272) | (220,141) | (2,086,413) | ||||
Ending Balance, value at Jun. 30, 2020 | $ 1 | $ 110,573 | 38,447,731 | (44,338,616) | $ (30) | (5,780,341) | 994,185 | (4,786,156) |
Ending balance, shares at Jun. 30, 2020 | 13,828 | 1,105,762,080 | (30,000) | |||||
Common stock issued for services | $ 1,294 | 259,325 | 260,619 | 260,619 | ||||
Common stock issued for services, shares | 12,941,878 | |||||||
Share based compensation - options | 5,832 | 5,832 | 5,832 | |||||
Preferred stock conversion | $ 4 | (4) | ||||||
Preferred stock conversion, shares | (130) | 44,357 | ||||||
Common stock issued for settlement of loan | $ 4,125 | 1,769,625 | 1,773,750 | 1,773,750 | ||||
Common stock issued for settlement of loan,shares | 41,250,000 | |||||||
Net income (loss) | (3,590,774) | (3,590,774) | (372,759) | (3,963,533) | ||||
Ending Balance, value at Sep. 30, 2020 | $ 1 | $ 115,996 | 40,482,509 | (47,929,390) | $ (30) | (7,330,914) | 621,426 | (6,709,488) |
Ending balance, shares at Sep. 30, 2020 | 13,698 | 1,159,998,315 | (30,000) | |||||
Beginning Balance, value at Dec. 31, 2020 | $ 1 | $ 119,990 | 41,233,471 | (48,713,184) | $ (30) | (7,359,752) | 600,795 | (6,758,957) |
Beginning balance, shares at Dec. 31, 2020 | 13,698 | 1,199,931,717 | (30,000) | |||||
Common stock issued for services | $ 4,938 | 1,399,154 | 1,404,092 | 1,404,092 | ||||
Common stock issued for services, shares | 49,371,733 | |||||||
Common stock issued for settlement of related party payable | $ 1,136 | 334,129 | 335,265 | 335,265 | ||||
Common stock issued for settlement of related party payable, shares | 11,364,904 | |||||||
Share based compensation - options | 4,916 | 4,916 | 4,916 | |||||
Common stock issued for cash received in prior period | $ 167 | 24,833 | 25,000 | 25,000 | ||||
Common stock issued for cash received in prior period, shares | 1,666,667 | |||||||
Preferred stock conversion | $ 177 | (177) | ||||||
Preferred stock conversion, shares | (5,000) | 1,767,945 | ||||||
Net income (loss) | 918,127 | 918,127 | 1,053,065 | 1,971,192 | ||||
Ending Balance, value at Mar. 31, 2021 | $ 1 | $ 126,408 | 42,996,326 | (47,795,057) | $ (30) | (4,672,352) | 1,653,860 | (3,018,492) |
Ending balance, shares at Mar. 31, 2021 | 8,698 | 1,264,102,966 | (30,000) | |||||
Beginning Balance, value at Dec. 31, 2020 | $ 1 | $ 119,990 | 41,233,471 | (48,713,184) | $ (30) | (7,359,752) | 600,795 | (6,758,957) |
Beginning balance, shares at Dec. 31, 2020 | 13,698 | 1,199,931,717 | (30,000) | |||||
Net income (loss) | 85,636 | |||||||
Ending Balance, value at Sep. 30, 2021 | $ 1 | $ 129,415 | 43,719,698 | (49,450,911) | $ (30) | (5,601,827) | 1,424,158 | (4,177,669) |
Ending balance, shares at Sep. 30, 2021 | 8,698 | 1,294,175,560 | (30,000) | |||||
Beginning Balance, value at Mar. 31, 2021 | $ 1 | $ 126,408 | 42,996,326 | (47,795,057) | $ (30) | (4,672,352) | 1,653,860 | (3,018,492) |
Beginning balance, shares at Mar. 31, 2021 | 8,698 | 1,264,102,966 | (30,000) | |||||
Share based compensation - options | 3,691 | 3,691 | 3,691 | |||||
Net income (loss) | (136,547) | (136,547) | 209,810 | 73,263 | ||||
Ending Balance, value at Jun. 30, 2021 | $ 1 | $ 126,408 | 43,000,017 | (47,931,604) | $ (30) | (4,805,208) | 1,863,670 | (2,941,538) |
Ending balance, shares at Jun. 30, 2021 | 8,698 | 1,264,102,966 | (30,000) | |||||
Common stock issued for services | $ 2,920 | 703,077 | 705,997 | 705,997 | ||||
Common stock issued for services, shares | 29,205,927 | |||||||
Share based compensation - options | 3,691 | 3,691 | 3,691 | |||||
Common stock issued for cash received in prior period | $ 87 | 12,913 | 13,000 | 13,000 | ||||
Common stock issued for cash received in prior period, shares | 866,667 | |||||||
Net income (loss) | (1,519,307) | (1,519,307) | (439,512) | (1,958,819) | ||||
Ending Balance, value at Sep. 30, 2021 | $ 1 | $ 129,415 | $ 43,719,698 | $ (49,450,911) | $ (30) | $ (5,601,827) | $ 1,424,158 | $ (4,177,669) |
Ending balance, shares at Sep. 30, 2021 | 8,698 | 1,294,175,560 | (30,000) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||||||
Net income (loss) | $ (1,958,819) | $ 1,971,192 | $ (3,963,533) | $ (1,478,323) | $ 85,636 | $ (7,528,269) | |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||||||
(Gain) loss on settlement of debt, net | 1,419,461 | (2,675,926) | 1,419,461 | ||||
Share-based compensation | 207,382 | 716,161 | 623,501 | 1,024,788 | |||
Depreciation | 289,569 | 424,965 | |||||
Bad debts | 132,702 | 14,150 | |||||
Amortization of intangible assets | 287,970 | 312,717 | |||||
Noncash lease expense | 229,093 | 96,612 | |||||
Unamortized term debt issuance costs | 16,500 | ||||||
Amortization of debt discount | 26,335 | 720,916 | |||||
Change in fair value of derivative liabilities | 88,200 | (143,000) | 1,400 | 336,900 | $ 238,900 | ||
Interest expense on issuance of common stock | 160,000 | ||||||
Loss on sale of property and equipment | 170,801 | ||||||
Gain on sale of investments | (16,300) | ||||||
Net unrealized loss on available-for-sale investments | 47,578 | ||||||
(Increase) decrease in assets: | |||||||
Accounts receivable | (338,848) | (135,145) | |||||
Inventories | 1,275,713 | (818,516) | |||||
Prepaid expenses and other | 163,492 | 409,797 | |||||
Deferred commission costs | 83,205 | 72,965 | |||||
Increase (decrease) in liabilities: | |||||||
Accounts payable | (149,465) | (1,317,889) | |||||
Accrued expenses and interest payable | (2,077,141) | 1,550,909 | |||||
Unearned revenue | (880,266) | 837,617 | |||||
Net cash used in operating activities | (2,768,529) | (2,353,944) | |||||
Cash flows from investing activities: | |||||||
Acquisition of property and equipment | (54,157) | (130,195) | |||||
Proceeds from the sale of property and equipment | 311,300 | ||||||
Proceeds from the sale of investments | 144,210 | ||||||
Patents and trademark fees | (2,183) | (3,683) | |||||
Net cash provided by (used in) investing activities | 399,170 | (133,878) | |||||
Cash flows from financing activities: | |||||||
Net repayments on line of credit | (210,200) | ||||||
Proceeds from issuance of term debt | 1,402,900 | 2,211,400 | |||||
Proceeds from issuance of convertible notes payable | 290,000 | ||||||
Repayment of term debt | (794,106) | ||||||
Repayment of finance lease obligations | (130,488) | (128,464) | |||||
Proceeds from the issuance of notes - related parties | 533,039 | 645,000 | |||||
Advances from stock subscription receivable | 714,500 | ||||||
Proceeds from stock subscription receivable | 49,250 | ||||||
Net cash provided by financing activities | 2,095,451 | 2,487,380 | |||||
Net decrease in cash | (273,908) | (442) | |||||
Cash - beginning of period | $ 620,539 | $ 72,355 | 620,539 | 72,355 | 72,355 | ||
Cash - end of period | $ 346,631 | $ 71,913 | 346,631 | 71,913 | $ 620,539 | ||
Cash paid during the period for: | |||||||
Interest | 331,849 | 608,894 | |||||
Non-cash transactions: | |||||||
Common stock issued for accrued compensation | 2,110,089 | 201,200 | |||||
Common stock issued for settlement of related party payable | 335,265 | ||||||
Prepaid expenses with common stock | 291,000 | ||||||
Common stock issued for cash received in prior period | 38,000 | ||||||
Common stock issued for preferred stock | 177 | ||||||
Reduction of third-party vendor payable with transfer of inventories | 2,886,497 | ||||||
Acquisition of inventories with third-party vendor payable at commencement of second sale agreement | 2,886,497 | ||||||
Derivatives issued as a debt discount | 65,000 | 28,000 | |||||
Third-party settlement of the Company’s line of credit | 2,203,339 | ||||||
Common stock issued for settlement of term debt and accrued interest | $ 660,000 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS | NOTE 1 - DESCRIPTION OF BUSINESS Nature of Business Vystar Corporation (“Vystar”, the “Company”, “we,” “us,” or “our”) is based in Worcester, Massachusetts. The Company uses patented technology to produces a line of innovative air purifiers, which destroy viruses and bacteria through the use of ultraviolet light. Vystar is also the creator and exclusive owner to produce Vytex ® |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The condensed consolidated financial statements of the Company and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. In the opinion of management, all adjustments necessary for the fair presentation of the condensed consolidated financial statements have been included. Such adjustments are of a normal, recurring nature. The condensed consolidated financial statements, and the accompanying notes, are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and do not contain certain information included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Therefore, the interim condensed consolidated financial statements should be read in conjunction with that Annual Report on Form 10-K. The Company has evaluated subsequent events through the date of the filing of its Form 10-Q with the Securities and Exchange Commission. Other than those events disclosed in Note 18, the Company is not aware of any other significant events that occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on the Company’s financial statements. Basis of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly-owned or controlled operating subsidiaries. All significant intercompany accounts and transactions have been eliminated. COVID-19 In December 2019, a novel coronavirus (“COVID-19”) emerged and has subsequently spread worldwide. The World Health Organization declared COVID-19 a pandemic resulting in federal, state, and local governments mandating various restrictions, including travel restrictions, restrictions on public gatherings, stay at home orders and advisories and quarantining of people who may have been exposed to the virus. On March 24, 2020, Massachusetts required all non-essential businesses to close their physical workplaces. As a result, the Rotmans showroom, offices and warehouse temporarily closed. During that time, associates worked remotely where possible. The Company reopened on June 10, 2020 and continues to monitor developments, including government requirements and recommendations. The COVID-19 pandemic has caused, among other things, interruptions to our supply chains and suppliers, including problems with inventory availability with price volatility and higher cost of products and international freight due to the high demand of products and low supply for an unpredictable period of time. The pandemic continues to cause economic disruption. Although our showroom has reopened, some business segments are operating on a reduced scale. The COVID-19 pandemic is complex and continues to evolve with sporadic resurgences, new virus variants and the vaccine rollout. We cannot reasonably estimate the duration of COVID-19 and its impact on Vystar. Accordingly, the estimates and assumptions made as of September 30, 2021 could change in subsequent interim reports, and it is reasonably possible that such changes could be significant (although the potential effects cannot be measured at this time). Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the chief executive officer. The Company and the chief executive officer view the Company’s operations and manage its business as one reportable segment with different operating segments. Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Significant estimates made by management include, among others, allowance for obsolete inventory, the allocation of purchase price related to acquisitions, the recoverability of long-lived assets, valuation and impairment of intangible assets, fair values of right of use assets and lease liabilities, valuation of derivative liabilities, share-based compensation and other equity issuances. Although these estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future, actual results could differ from these estimates. Fair Value of Financial Instruments The Company’s financial instruments consist principally of cash, accounts receivable, investments - equity securities, accounts payable, accrued expenses and interest payable, shareholder notes payable, long-term debt and unearned revenue. The carrying values of all the Company’s financial instruments approximate or equal fair value because of their short maturities and market interest rates or, in the case of equity securities, being stated at fair value. In specific circumstances, certain assets and liabilities are reported or disclosed at fair value. Fair value is the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the Company’s principal market for such transactions. If there is not an established principal market, fair value is derived from the most advantageous market. Valuation inputs are classified in the following hierarchy: ● Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities. ● Level 2 inputs are directly or indirectly observable valuation inputs for the asset or liability, excluding Level 1 inputs. ● Level 3 inputs are unobservable inputs for the asset or liability. Highest priority is given to Level 1 inputs and the lowest priority to Level 3 inputs. Acceptable valuation techniques include the market approach, income approach, and cost approach. In some cases, more than one valuation technique is used. The derivative liabilities were recognized at fair value on a recurring basis through the date of the settlement and September 30, 2021 and are level 3 measurements. There have been no transfers between levels during the nine months ended September 30, 2021. Acquisitions Amounts paid for acquisitions are allocated to the assets acquired and liabilities assumed based on their estimated fair value at the date of acquisition. The fair value of identifiable intangible assets is based on valuations that use information and assumptions provided by management. Identifiable intangible assets with finite lives are amortized over their useful lives. Acquisition-related costs, including, legal, accounting, and other costs, are capitalized in asset acquisitions and for business combinations are expensed in the periods in which the costs are incurred. The results of operations of acquired assets are included in the financial statements from the acquisition date. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include all liquid investments with a maturity date of less than three months when purchased. Cash equivalents also include amounts due from third-party financial institutions for credit and debit card transactions which typically settle within five days. Restricted cash represents cash balances restricted as to withdrawal or use and are included in prepaid expenses and other on the condensed consolidated balance sheets. Accounts Receivable Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company routinely sells, without recourse, trade receivables resulting from retail furniture sales to two financial institutions at an average service charge of 1 % in 2021. Amounts sold during the nine months ending September 30, 2021 were approximately $ 4,556,000 . In April 2021, the Company sold a trade receivable from an RX Air purification unit sale to a financial corporation at a service charge of 1.7 % per month and a reserve of 15 %. Included in accounts receivable at September 30, 2021 is approximately $ 24,000 due from the factor. Retail furniture receivables retained by the Company are generally collateralized by the merchandise sold, represent valid claims against debtors for sales arising on or before the balance sheet date and are reduced to their estimated net realizable value. In addition, the Company grants credit to Vystar customers without requiring collateral. The amount of accounting loss for which Vystar is at risk in these unsecured accounts receivable is limited to their carrying value. Management provides for uncollectible amounts through a charge to earnings and a credit to an allowance for doubtful accounts based upon its assessment of the current status of individual accounts. Balances that are still outstanding after management has performed reasonable collection efforts are written off through a charge to the allowance and a credit to accounts receivable. As of September 30, 2021, the allowance for doubtful accounts was $ 125,000 no Inventories Inventories include those costs directly attributable to the product before sale. Inventories consist primarily of finished goods of furniture, mattresses, RxAir purifier units, foam toppers and pillows and are carried at net realizable value, which is defined as selling price less cost of completion, disposal and transportation. The Company evaluates the need to record write-downs for inventory on a regular basis. Appropriate consideration is given to obsolescence, slow-moving and other factors in evaluating net realizable values. Inventories not expected to be sold within 12 months are classified as long-term. Prepaid Expenses and Other Prepaid expenses and other include restricted cash, amounts related to prepaid insurance policies, which are expensed on a straight-line basis over the life of the underlying policy, and other expenses. Investments - Equity Securities Marketable equity securities have been categorized as available-for-sale and, as a result, are stated at fair value. Unrealized gains and losses are reflected in the statement of operations. The Company periodically reviews the available-for-sale securities for other than temporary declines in fair value below cost and more frequently when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company sold the securities in September 2021 and the cost was recoverable in all material respects. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided over the estimated useful lives of the assets, generally 5 10 Expenditures for major renewals and betterments are capitalized, while routine repairs and maintenance are expensed as incurred. When property items are retired or otherwise disposed of, the asset and related reserve accounts are relieved of the cost and accumulated depreciation, respectively, and the resultant gain or loss is reflected in earnings. As of September 30, 2021, the net balance of property and equipment is $ 914,138 603,771 1,631,651 587,081 Intangible Assets Patents represent legal and other fees associated with the registration of patents. The Company has five issued patents with the United States Patent and Trade Office (“USPTO”) as well as five issued international Patent Cooperation Treaty (“PCT”) patents. Patents are carried at cost and are being amortized on a straight-line basis over their estimated useful lives, typically ranging from 9 20 The Company has trademark protection for “Vystar”, “Vytex”, and “RxAir” among others. Trademarks are carried at cost and since their estimated life is indeterminable, no amortization is recognized. Instead, they are evaluated annually for impairment. Customer relationships, tradename and marketing related intangibles are carried at cost and are being amortized on a straight-line basis over their estimated useful lives, typically ranging from 5 to 10 years. Our intangible assets are reviewed for impairment annually or more frequently as warranted by events of changes in circumstances. Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be fully recoverable. We evaluate assets for potential impairment by comparing estimated future undiscounted net cash flows to the carrying amount of the assets. If the carrying amount of the assets exceeds the estimated future undiscounted cash flows, impairment is measured based on the difference between the carrying amount of the assets and fair value. Assets to be disposed of would be separately presented in the condensed consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell and are no longer depreciated. The assets and liabilities of a disposal group classified as held-for-sale would be presented separately in the appropriate asset and liability sections of the condensed consolidated balance sheet, if material. During the nine months ended September 30, 2021 and 2020, we did no Goodwill Goodwill reflects the cost of an acquisition in excess of the fair values assigned to identifiable net assets acquired. Goodwill is not amortized, rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. We perform our annual impairment test at the end of each calendar year, or more frequently if events or changes in circumstances indicate the asset might be impaired. Accounting for acquisitions requires us to recognize, separately from goodwill, the assets acquired and the liabilities assumed at their acquisition-date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition-date fair values of the assets acquired and the liabilities assumed. While we use best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, the estimates are inherently uncertain and subject to refinement. The impairment model permits, and we utilize, a simplified approach for determining goodwill impairment. In the first step, we evaluate the recoverability of goodwill by estimating the fair value of our reporting unit using multiple techniques, including an income approach using a discounted cash flow model and a market approach. Based on an equal weighting of the results of these two approaches, a conclusion of fair value is estimated. The fair value is then compared to the carrying value of our reporting unit. If the fair value of a reporting unit is less than its carrying value, the Company recognizes this amount as an impairment loss. Impairment losses, limited to the carrying value of goodwill, represent the excess of the carrying amount of goodwill over its implied fair value. Convertible Notes Payable Borrowings are recognized initially at the principal amount received. Borrowings are subsequently carried at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized as interest expense in the statements of operations over the period of the borrowings using the effective interest method. Derivatives The Company evaluates its debt instruments or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of Accounting Standards Codification (“ASC”) Topic 815-40, Derivative Instruments and Hedging: Contracts in Entity’s Own Equity The Company applies the accounting standard that provides guidance for determining whether an equity-linked financial instrument, or embedded feature, is indexed to an entity’s own stock. The standard applies to any freestanding financial instrument or embedded features that have the characteristics of a derivative, and to any freestanding financial instruments that are potentially settled in an entity’s own common stock. From time to time, the Company has issued notes with embedded conversion features. Certain of the embedded conversion features contain price protection or anti-dilution features that result in these instruments being treated as derivatives for accounting purposes. Accordingly, as of September 30, 2021, the Company has classified all conversion features as derivative liabilities and has estimated the fair value of these embedded conversion features using a Monte Carlo simulation model. Unearned Revenue Unearned revenue consists of customer advance payments, deposits on sales of undelivered merchandise and deferred warranty revenue on self-insured stain protection warranty coverage. Changes to unearned revenue during the nine months ended September 30, 2021 and 2020 are summarized as follows: SCHEDULE OF UNEARNED REVENUE 2021 2020 Balance, beginning of the period $ 2,427,771 $ 2,500,572 Customer deposits received 20,250,952 13,350,179 Warranty coverage purchased - 118,151 Gift cards purchased 9,610 4,150 Revenue earned (21,140,827 ) (12,634,863 ) Balance, end of the period $ 1,547,506 $ 3,338,189 Loss Per Share The Company presents basic and diluted loss per share. Because the Company reported a net loss in the nine months ended September 30, 2021 and 2020, common stock equivalents, including stock options and warrants, were anti-dilutive. Excluded from the computation of diluted loss per share were options to purchase 26,749,938 27,874,938 10,492,732 14,205,912 3,186,730 4,753,550 Revenue Our principal activities from which we generate our revenue are product sales. Revenue is measured based on considerations specified in a contract with a customer. A contract exists when it becomes a legally enforceable agreement with a customer. The contract is based on either the acceptance of standard terms and conditions at the retail store and on the websites for e-commerce customers, or the execution of terms and conditions contracts with retailers and wholesalers. These contracts define each party’s rights, payment terms and other contractual terms and conditions of the sale. Consideration is typically paid prior to shipment via credit card or check when our products are sold direct to consumers, which is typically within 1 to 2 days or approximately 30 days from the time control is transferred when sold to wholesalers, distributors and retailers. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience and, in some circumstances, published credit and financial information pertaining to the customer. A performance obligation is a promise in a contract to transfer a distinct product to the customer, which for us is transfer of finished goods to our customers. Performance obligations promised in a contract are identified based on the goods that will be transferred to the customer that are both capable of being distinct and are distinct in the context of the contract, whereby the transfer of the goods is separately identifiable from other promises in the contract. We have concluded the sale of finished goods and related shipping and handling are accounted for as the single performance obligation. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. The transaction price is determined based on the consideration to which we will be entitled to receive in exchange for transferring goods to the customer. We issue refunds to retail, e-commerce and print media customers, upon request, within 30 days of delivery. We estimate the amount of potential refunds at each reporting period using a portfolio approach of historical data, adjusted for changes in expected customer experience, including seasonality and changes in economic factors. For retailers, distributors and wholesalers, we do not offer a right of return or refund and revenue is recognized at the time products are shipped to customers. In all cases, judgment is required in estimating these reserves. Actual claims for returns could be materially different from the estimates. As of September 30, 2021 and December 31, 2020, reserves for estimated sales returns totaled $ 85,000 55,000 We recognize revenue when we satisfy a performance obligation in a contract by transferring control over a product to a customer when product is shipped based on fulfillment by the Company. The Company considers fulfillment when it passes all liability at the point of shipping through third party carriers or in-house delivery services. Delivery fees are charged to customers and are included in revenue in the accompanying condensed consolidated statements of operations and the costs associated with these deliveries are included in operating expenses in the accompanying condensed consolidated statements of operations through January 20, 2020. All subsequent delivery costs are included in revenues as a third-party delivery service was engaged beginning January 21, 2020. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of revenue in the accompanying condensed consolidated statements of operations. The Company also defers revenues for separately-priced stain protection warranty coverage for which it is ultimately self-insured. Revenue is recognized from the extended warranty sales on a straight-line basis over the respective contract term. The extended warranty terms primarily range from three to five years from the date of delivery. The Company ended this warranty program during 2020 but continues to amortize the previously contracted warranties over their original terms. The Company switched to a separately-priced stain protection warranty serviced by a third-party when the store reopened in June 2020. 612,000 920,000 308,000 118,000 390,000 158,000 241,000 Cost of Revenue Cost of revenue consists primarily of product and freight costs and fees paid to online retailers. Research and Development Research and development costs are expensed when incurred. Research and development costs include all costs incurred related to the research, development and testing. For the nine months ended September 30, 2021 and 2020, Vystar’s research and development costs were not significant. Advertising Costs Advertising costs, which include television, radio, newspaper, digital and other media advertising, are expensed upon first showing. Advertising costs were approximately $ 1,774,000 1,151,000 Share-Based Compensation The fair value of stock options is estimated on the grant date using the Black-Scholes option pricing model, based on weighted average assumptions. Expected volatility is based on historical volatility of our common stock. The Company has elected to use the simplified method described in the Securities and Exchange Commission Staff Accounting Bulletin Topic 14C to estimate the expected term of employee stock options. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The value of restricted stock awards is determined using the fair value of the Company’s common stock on the date of grant. The Company accounts for forfeitures as they occur. Compensation expense is recognized on a straight-line basis over the requisite service period of the award. Income Taxes Vystar recognizes income taxes on an accrual basis based on a tax position taken or expected to be taken in its tax returns. A tax position is defined as a position in a previously filed tax return or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets or liabilities. Tax positions are recognized only when it is more likely than not (i.e., likelihood of greater than 50% No The Company remains subject to income tax examinations from Federal and state taxing jurisdictions for 2018 through 2020. Concentration of Credit Risk Certain financial instruments potentially subject the Company to concentrations of credit risk. These financial instruments consist primarily of cash and accounts receivable. Cash held in operating accounts may exceed the Federal Deposit Insurance Corporation, or FDIC, insurance limits. While the Company monitors cash balances in our operating accounts on a regular basis and adjust the balances as appropriate, these balances could be impacted if the underlying financial institutions fail. To date, the Company has experienced no loss or lack of access to our cash; however, the Company can provide no assurances that access to our cash will not be impacted by adverse conditions in the financial markets. Credit concentration risk related to accounts receivable is mitigated as customer credit is checked prior to the sales. Other Risks and Uncertainties The Company is exposed to risks pertinent to the operations of a retailer, including, but not limited to, the ability to acquire new customers and maintain a strong brand as well as broader economic factors such as interest rates and changes in customer spending patterns. Recent Accounting Pronouncements In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
LIQUIDITY AND GOING CONCERN
LIQUIDITY AND GOING CONCERN | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LIQUIDITY AND GOING CONCERN | NOTE 3 - LIQUIDITY AND GOING CONCERN The Company’s financial statements are prepared using the accrual method of accounting in accordance with U.S. GAAP and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. However, the Company has incurred significant losses and experienced negative cash flow since inception. At September 30, 2021, the Company had cash of $ 346,631 and a deficit in working capital of approximately $ 5.6 million. Further, at September 30, 2021 the accumulated deficit amounted to approximately $ 49.5 million. We use working capital to finance our ongoing operations, and since those operations do not currently cover all our operating costs, managing working capital is essential to our Company’s future success. Because of this history of losses and financial condition, there is substantial doubt about the Company’s ability to continue as a going concern. A successful transition to attaining profitable operations is dependent upon obtaining sufficient financing to fund the Company’s planned expenses and achieving a level of revenue adequate to support the Company’s cost structure. Management plans to finance future operations using cash on hand, increased revenue from RxAir air purification units, Vytex license fees and stock issuances to new and existing shareholders. The Company has also focused the efforts of key internal employees on the goal of creating efficiencies in each department in our retail furniture business, including purchasing, marketing, inventory control, advertising, accounting, warehousing and customer service. There can be no assurances the Company will be able to achieve projected levels of revenue in 2021 and beyond. If the Company is not able to achieve projected revenue and obtain alternate additional financing of equity or debt, the Company would need to significantly curtail or reorient operations during 2021, which could have a material adverse effect on the ability to achieve the business objectives, and as a result, may require the Company to file bankruptcy or cease operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts classified as liabilities that might be necessary should the Company be forced to take any such actions. The Company’s future expenditures will depend on numerous factors, including: the rate at which the Company can introduce RxAir air purification units and license Vytex NRL raw materials to manufacturers, and subsequently retailers; the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; market acceptance of the Company’s products, services and competing technological developments; the Company’s ability to successfully realize synergies through the integration of the merged companies, acquire new customers and maintain a strong brand; the success of our efforts to reduce expenses in our retail furniture business; and broader economic factors such as interest rates and changes in customer spending patterns. As the Company expands its activities and operations, cash requirements are expected to increase at a rate consistent with revenue growth after the Company has achieved sustained revenue generation. |
INVESTMENTS _ EQUITY SECURITIES
INVESTMENTS – EQUITY SECURITIES | 9 Months Ended |
Sep. 30, 2021 | |
Investments, All Other Investments [Abstract] | |
INVESTMENTS – EQUITY SECURITIES | NOTE 4 - INVESTMENTS – EQUITY SECURITIES Cost and fair value of investments - equity securities are as follows: SCHEDULE OF COST AND FAIR VALUE OF INVESTMENTS Gross Gross Fair Cost Unrealized Losses Unrealized Gains Value December 31, 2020 $ 141,225 $ (13,315 ) $ - $ 127,910 Investments, which represented equity securities in a publicly traded company were sold during the three months ended September 30, 2021 at a gain of approximately $ 16,000 which is included in other income (expense). Unrealized holding losses on available-for-sale securities were approximately $ 48,000 in the first nine months of 2020 and have been included in other income (expense) in the accompanying condensed statements of operations. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5 - PROPERTY AND EQUIPMENT Property and equipment, net consists of the following: SCHEDULE OF PROPERTY AND EQUIPMENT, NET September 30, December 31, 2021 2020 Furniture, fixtures and equipment $ 630,450 $ 1,385,430 Tooling and testing equipment 338,572 338,572 Parking lots 365,707 365,707 Leasehold improvements 134,014 79,857 Motor vehicles 49,166 49,166 Property and equipment, gross 1,517,909 2,218,732 Accumulated depreciation (603,771 ) (587,081 ) Property and equipment, net $ 914,138 $ 1,631,651 Depreciation expense for the nine months ended September 30, 2021 and 2020 was $ 289,569 424,965 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 6 - INTANGIBLE ASSETS Intangible assets consist of the following: SCHEDULE OF INTANGIBLE ASSETS Amortization September 30, December 31, Period 2021 2020 (in Years) Amortized intangible assets: Customer relationships $ 210,000 $ 210,000 6 10 Proprietary technology 610,000 610,000 10 Tradename and brand 1,050,000 1,050,000 5 10 Marketing related 380,000 380,000 5 Patents 361,284 359,101 6 20 Noncompete 50,000 50,000 5 Total 2,661,284 2,659,101 Accumulated amortization (1,120,156 ) (832,186 ) Intangible assets, net 1,541,128 1,826,915 Indefinite-lived intangible assets: Trademarks 9,072 9,072 Total intangible assets $ 1,550,200 $ 1,835,987 Amortization expense for the nine months ended September 30, 2021 and 2020 was $ 287,970 312,717 Estimated future amortization expense for finite-lived intangible assets is as follows: SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSE Amount Remaining in 2021 $ 95,991 2022 383,961 2023 377,350 2024 278,125 2025 129,261 Thereafter 276,440 Total $ 1,541,128 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2021 | |
Leases | |
LEASES | NOTE 7 LEASES The Company leases equipment, a showroom, offices and warehouse facilities. These leases expire at various dates through 2024 with options to extend to 2031 5,000 The table below presents the lease costs for the three and nine months ended September 30, 2021 and 2020: SCHEDULE OF LEASE COST 2021 2020 2021 2020 Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Operating lease cost $ 396,937 $ 395,188 $ 1,189,481 $ 1,184,302 Finance lease cost: Amortization of right-of-use assets 45,912 47,012 137,736 142,134 Interest on lease liabilities 8,371 10,585 26,792 33,416 Total lease cost $ 451,220 $ 452,785 $ 1,354,009 $ 1,359,852 During the nine months ended September 30, 2021 and 2020, the Company recognized sublease income of approximately $ 110,000 81,000 Our leases generally do not provide an implicit rate, and therefore we use our incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease. We used incremental borrowing rates as of the implementation date for operating leases that commenced prior to that date. The following table presents other information related to leases: SCHEDULE OF OTHER INFORMATION RELATED TO LEASES 2021 2020 2021 2020 Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 375,911 $ 375,911 $ 1,127,733 $ 1,124,706 Financing cash flows used for financing leases 52,427 53,577 157,281 161,881 Assets obtained in exchange for operating lease liabilities - - - - Assets obtained in exchange for finance lease liabilities - - - 75,739 Weighted average remaining lease term: Operating leases 9 9 9 9 Finance leases 4.4 5 4.4 5 Weighted average discount rate: Operating leases 5.59 % 5.54 % 5.59 % 5.54 % Finance leases 5.16 % 5.16 % 5.16 % 5.16 % The future minimum lease payments required under operating and financing lease obligations as of September 30, 2021 having initial or remaining non-cancelable lease terms in excess of one year are summarized as follows: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS REQUIRED UNDER OPERATING AND FINANCING LEASE OBLIGATIONS Operating Leases Finance Leases Total Remainder of 2021 $ 280,335 $ 69,972 $ 350,307 2022 967,827 139,882 1,107,709 2023 878,807 139,080 1,017,887 2024 870,000 139,080 1,009,080 2025 870,000 139,080 1,009,080 Thereafter 4,422,500 68,395 4,490,895 Total undiscounted lease liabilities 8,289,469 695,489 8,984,958 Less: imputed interest (1,782,210 ) (75,884 ) (1,858,094 ) Net lease liabilities $ 6,507,259 $ 619,605 $ 7,126,864 As of September 30, 2021, the Company does not have additional operating and finance leases that have not yet commenced. |
NOTES PAYABLE AND LOAN FACILITY
NOTES PAYABLE AND LOAN FACILITY | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND LOAN FACILITY | NOTE 8 NOTES PAYABLE AND LOAN FACILITY Letter of Credit The Company entered into a $ 125,000 125,000 Advances On May 29, 2020, Rotmans entered into a sale promotion consulting agreement with a national furniture sales event company. Under the agreement, Rotmans appointed the third-party as its exclusive agent to assist with a high-impact sale. Before the sale, the agent advanced the Company funds of approximately $ 2,300,000 649,000 2,585,000 Term Notes On April 16, 2020, Rotmans received $ 1,402,900 1,402,900 1.0 On January 24, 2021, the PPP loan was fully forgiven by the SBA. On February 2, 2021, Rotmans received an additional $ 1,402,900 On June 25, 2021, the PPP loan was fully forgiven by the SBA. Shareholder, Convertible and Contingently Convertible Notes Payable The following table summarizes shareholder, convertible and contingently convertible notes payable: SCHEDULE OF LONG-TERM DEBT September 30, December 31, 2021 2020 Shareholder, convertible and contingently convertible notes $ 1,241,895 $ 951,895 Accrued interest 131,485 94,164 Total shareholder notes and accrued interest 1,373,380 1,046,059 Less: current maturities (1,373,380 ) (1,046,059 ) Total long-term debt $ - $ - During the year ended December 31, 2018, the Company issued shareholder contingently convertible notes payable (the “Notes”), some of which were for contract work performed by other entities in lieu of compensation and expense reimbursement, totaling approximately $ 335,000 The Notes mature one year from issuance but may be extended one (1) additional year by the Company. 50 338,195 During the year ended December 31, 2019, the Company issued certain contingently convertible promissory notes in varying amounts to existing shareholders which totaled $ 613,700 35 50 During the quarter ended September 30, 2021, the Company issued certain contingently convertible promissory notes in varying amounts to existing shareholders which totaled $ 290,000 . The notes are unsecured and bear interest at an annual rate of five percent (5%) per annum from date of issuance. The face amount of the notes represents the amount due at maturity along with the accrued interest. In the event that the spin-off of RxAir does not occur within one year, the Company will convert these notes into common stock at a conversion price of $ 0.016 . If the spin-off does occur, these notes will convert into RxAir common stock with two conversion prices of $0.15 and $2, which equates to a blended conversion price of $0.18. All of these notes are outstanding as of September 30, 2021. At the issuance date of these notes, it was determined that they contain a beneficial conversion feature which amounts to approximately $ 90,000 Based on the variable conversion price of the notes issued prior to 2021, the Company recorded the embedded conversion features as derivative liabilities, which amounted to $ 639,100 and $ 491,700 at September 30, 2021 and December 31, 2020, respectively. Related Party Debt The following table summarizes related party debt: SCHEDULE OF RELATED PARTY DEBT September 30, December 31, 2021 2020 Rotman Family convertible notes $ 1,967,737 $ 1,832,707 Rotman Family nonconvertible notes 1,953,509 1,555,500 Accrued interest 334,021 189,394 Debt discount (43,333 ) (4,667 ) Long term debt, current 4,211,934 3,572,934 Less: current maturities (332,000 ) (1,537,000 ) Long term debt $ 3,879,934 $ 2,035,934 Rotman Family Convertible Notes The Company issued contingently convertible notes to several members of the Rotman Family during 2019 and 2020. These notes are unsecured, and bear interest at an annual rate at five percent ( 5 8 50 50 On June 3, 2021, the Company issued a contingently convertible promissory note totaling $ 130,030 50 0.165 The note matures two years from issuance. On August 17, 2021, the Company issued a contingently convertible promissory note totaling $ 5,000 to Jamie Rotman. The note is unsecured and bears interest at an annual rate of five percent ( 5 %) per annum from date of issuance. The face amount of the notes represents the amount due at maturity along with the accrued interest. In the event that the spin-off of RxAir does not occur within one year, the Company will convert the note into common stock at a conversion price of $ 0.016 . If the spin-off does occur, the note will convert into RxAir common stock with two conversion prices of $0.15 and $2, which equates to a blended conversion price of $0.18. At the issuance date of this note, it was determined that it contains a beneficial conversion feature which amounts to approximately $ 2,000 The following table summarizes the Rotman Family Convertible Notes: SCHEDULE OF NOTES PAYABLE Carrying Amount Including Accrued Interest Principal September 30, December 31, Issue Date Amount 2021 2020 Steven Rotman 8.00 July 2024 07/18/19 $ 105,000 $ 123,900 $ 117,600 Gregory Rotman 8.00 July 2024 07/18/19 55,207 65,160 61,847 Steven Rotman 5.00 July 2027 07/18/19 1,102,500 1,224,234 1,182,890 Bernard Rotman 5.00 July 2023 07/18/19 420,000 466,375 450,625 Steven Rotman 5.00 December 2021 12/19/19 100,000 108,958 105,207 Steven Rotman 5.00 February 2022 02/02/20 50,000 53,958 52,083 Gregory Rotman 5.00 June 2023 06/03/21 130,030 132,197 - Jamie Rotman 5.00 August 2023 08/17/21 5,000 5,032 - $ 1,967,737 2,179,814 1,970,252 Debt Discount (43,333 ) (4,667 ) $ 2,136,481 $ 1,965,585 Based on the variable conversion price for all of these convertible notes issued prior to August 2021, the Company recorded the embedded conversion features as derivative liabilities, which amounted to $ 1,194,000 and $ 1,275,000 at September 30, 2021 and December 31, 2020, respectively. Rotman Family Nonconvertible Notes During the nine months ended September 30, 2021, Steven Rotman advanced the Company funds totaling $ 398,009 5 In addition, the maturity date of advances made in 2020 has been extended to December 2022. The following table summarizes the Rotman Family Nonconvertible Notes: SCHEDULE OF NOTES PAYABLE Carrying Amount Including Accrued Interest Principal September 30, December 31, Issue Date Amount 2021 2020 Steven Rotman 5.00 July 2027 07/18/19 $ 367,500 $ 408,078 $ 394,297 Bernard Rotman 5.00 July 2023 07/18/19 140,000 155,458 150,208 Steven Rotman 5.00 December 2022 08/24/20 75,000 79,135 76,323 Steven Rotman 5.00 December 2022 09/01/20 100,000 105,403 101,653 Steven Rotman 5.00 December 2022 09/08/20 145,000 152,693 147,256 Steven Rotman 5.00 December 2022 09/15/20 200,000 210,417 202,917 Steven Rotman 5.00 December 2022 09/21/20 75,000 78,844 76,031 Steven Rotman 5.00 December 2022 10/02/20 50,000 52,500 50,625 Steven Rotman 5.00 December 2022 10/08/20 40,000 42,000 40,500 Steven Rotman 5.00 December 2022 10/15/20 48,000 50,400 48,600 Steven Rotman 5.00 December 2022 10/20/20 50,000 52,500 50,625 Steven Rotman 5.00 December 2022 11/02/20 70,000 73,500 70,875 Steven Rotman 5.00 December 2022 11/13/20 35,000 36,750 35,438 Steven Rotman 5.00 December 2022 11/18/20 35,000 36,750 35,438 Steven Rotman 5.00 December 2022 11/20/20 65,000 68,250 65,813 Steven Rotman 5.00 December 2022 12/22/20 60,000 63,000 60,750 Steven Rotman 5.00 March 2023 01/21/21 35,000 36,215 - Steven Rotman 5.00 March 2023 01/27/21 40,000 41,356 - Steven Rotman 5.00 March 2023 02/03/21 50,000 51,646 - Steven Rotman 5.00 March 2023 02/26/21 100,000 103,000 - Steven Rotman 5.00 March 2023 03/19/21 100,000 102,681 - Steven Rotman 5.00 March 2023 03/25/21 70,000 71,818 - Steven Rotman 5.00 June 2023 06/02/21 3,009 3,059 - $ 1,953,509 $ 2,075,453 $ 1,607,349 Approximate maturities for the succeeding years are as follows: SCHEDULE OF MATURITIES OF NOTES PAYABLE Remainder of 2021 $ 270,000 2022 1,223,000 2023 1,094,000 2024 223,000 2025 36,000 Thereafter 1,365,934 Long term debt $ 4,211,934 |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITIES | NOTE 9 - DERIVATIVE LIABILITIES As of September 30, 2021 and December 31, 2020, the Company had a $ 1,833,100 and $ 1,766,700 , respectively, derivative liability balance on the condensed consolidated balance sheet and recorded a loss from change in fair value of derivative liabilities of $ 88,200 and $ 1,400 for the three and nine months ended September 30, 2021, respectively. The derivative liability activity comes from the convertible notes payable. The Company analyzed the conversion features and warrants of the various note agreements for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these Convertible notes are subject to a variable conversion rate. The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with ASC 815, the Company has bifurcated the conversion feature of the notes and recorded a derivative liability. The embedded derivatives for the notes are carried on the Company’s condensed consolidated balance sheet at fair value. The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the condensed consolidated statement of operations and the associated fair value carrying amount on the consolidated balance sheet is adjusted by the change. The Company fair values the embedded derivative using a lattice-based valuation model or Monte Carlo simulation. The following table summarizes the derivative liabilities included in the condensed consolidated balance sheet at September 30, 2021 and December 31, 2020: Fair Value of Embedded Derivative Liabilities: SCHEDULE OF DERIVATIVE LIABILITIES 2021 2020 Balance, beginning of the period $ 1,766,700 $ 1,499,800 Initial measurement of liabilities 65,000 28,000 Change in fair value 1,400 238,900 Balance, end of the period $ 1,833,100 $ 1,766,700 |
STOCKHOLDERS_ DEFICIT
STOCKHOLDERS’ DEFICIT | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ DEFICIT | NOTE 10 STOCKHOLDERS’ DEFICIT Cumulative Convertible Preferred Stock On May 2, 2013, the Company began a private placement offering to sell up to 200,000 200,000 10 2,000,000 10% 0.075 0.05 25,000 As of September 30, 2021, the 8,698 72,000 3,186,730 As of December 31, 2020, the 13,698 101,000 4,801,840 Common Stock and Warrants During the nine months ended September 30, 2021, the Company issued 2,533,334 38,000 270,000 18,200,001 During the nine months ended September 30, 2021, 1,767,945 5,000 88,397 |
REVENUES
REVENUES | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | NOTE 11 - REVENUES SCHEDULE OF REVENUES Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 % of % of % of % of Net Sales Net Sales Net Sales Net Sales Net Sales Net Sales Net Sales Net Sales Merchandise: Case Goods Bedroom Furniture $ 398,807 9.8 $ 723,529 13.0 $ 1,725,588 7.5 $ 1,879,831 13.5 Dining Room Furniture 235,945 5.8 309,429 5.6 1,337,503 5.8 1,050,491 7.6 Occasional 422,044 10.4 981,164 17.7 3,186,248 13.8 2,387,054 17.2 1,056,796 26.0 2,014,122 36.3 6,249,339 27.1 5,317,376 38.3 Upholstery 1,627,212 40.0 1,582,989 28.6 8,200,995 35.4 3,850,867 27.8 Mattresses and Toppers 847,997 20.9 899,693 16.2 3,681,848 15.9 2,291,156 16.5 Broadloom, Flooring and Rugs 143,618 3.5 464,408 8.4 1,996,618 8.6 970,593 7.0 Warranty 142,709 3.5 119,329 2.2 589,729 2.5 400,789 2.9 Air Purification Units 192,755 4.7 29,309 0.5 1,783,965 7.7 222,133 1.6 Accessories and Other 55,510 1.4 434,713 7.8 648,226 2.8 812,793 5.9 $ 4,066,597 100.0 $ 5,544,563 100.0 $ 23,150,720 100.0 $ 13,865,707 100.0 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 12 - SHARE-BASED COMPENSATION Generally accepted accounting principles require share-based payments to employees, including grants of employee stock options, warrants, and common stock to be recognized in the income statement based on their fair values at the date of grant, net of estimated forfeitures. In total, the Company recorded $ 623,501 1,024,788 751,671 2,177,806 The Company used the Black-Scholes option pricing model to estimate the grant-date fair value of option and warrant awards: ● Expected Dividend Yield - because the Company does not currently pay dividends, the expected dividend yield is zero ● Expected Volatility in Stock Price - volatility based on the Company’s trading activity was used to determine expected volatility; ● Risk-free Interest Rate - reflects the average rate on a United States Treasury Bond with a maturity equal to the expected term of the option; and ● Expected Life of Award - because we have minimal experience with the exercise of options or warrants for use in determining the expected life of each award, we used the option or warrant’s contractual term as the expected life. In total for the nine months ended September 30, 2021 and 2020, the Company recorded $ 12,298 16,957 14,761 three years Options During 2004, the Board of Directors of the Company adopted a stock option plan (the “Plan”) and authorized up to 4,000,000 10,000,000 2,251,729 5,000,000 50,000,000 4 10 There were no The following table summarizes all stock option activity of the Company for the nine months ended September 30, 2021: SCHEDULE OF STOCK OPTION ACTIVITY Weighted Weighted Average Average Remaining Number Exercise Contractual of Shares Price Life (Years) Outstanding, December 31, 2020 27,874,938 $ 0.19 2.47 Exercisable, December 31, 2020 27,124,938 $ 0.19 2.59 Granted - - - Exercised - - - Forfeited (750,000 ) 0.57 - Outstanding, September 30, 2021 27,124,938 $ 0.19 2.67 Exercisable, September 30, 2021 26,749,938 $ 0.20 2.67 As of September 30, 2021 and 2020, there was no Warrants Warrants are issued to third parties as payment for services, debt financing compensation and conversion and in conjunction with the issuance of common stock. The fair value of each common stock warrant issued for services is estimated on the date of grant using the Black-Scholes option pricing model. The following table represents the Company’s warrant activity for the nine months ended September 30, 2021: SCHEDULE OF WARRANT ACTIVITY Weighted Weighted Average Number of Shares Weighted Average Fair Value Average Exercise Price Remaining Contractual Life (Years) Outstanding, December 31, 2020 14,205,912 - $ 0.08 2.53 Granted - - - - Exercised - - - - Forfeited (3,713,180 ) - 0.22 - Expired - - - - Outstanding, September 30, 2021 10,492,732 - $ 0.08 2.62 Exercisable, September 30, 2021 10,492,732 - $ 0.08 2.62 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 13 - RELATED PARTY TRANSACTIONS Officers and Directors Per Steven Rotman’s Employment agreement dated July 22, 2019, as amended, he is to be paid $ 125,000 per year in cash, $ 10,417 per month in shares based on a 20-day average price at a 50% discount to market, $ 5,000 per month in cash for expenses as well as access to a Company provided vehicle and health and life insurance. During the nine months ended September 30, 2021, the Company expensed approximately $ 317,000 related to this employment agreement. As of September 30, 2021, the Company had a stock subscription payable balance of $ 173,000 , or approximately 7,117,000 shares to be issued in the future and $ 105,000 of reimbursable expenses payable related to this party. In addition, 6,666,667 shares are owed to this party under a stock subscription agreement dated in July 2020 for $ 100,000 . On August 9, 2021, the Company issued 29,205,927 shares to Steven Rotman for past services. In addition, the Board of Directors authorized their board fees for 2021 be paid in common stock of the Company. Included in stock subscription payable is 10 291,000 Designcenters.com This entity is owned by Jamie Rotman, who is the daughter of the Company’s CEO, Steven Rotman. Designcenters.com (“Design”) provided bookkeeping and management services to the Company through July 2019. In exchange for such services, the Company had entered into a consulting agreement with the related party entity. As of September 30, 2021, the Company had a stock subscription payable balance of $ 42,000 850,000 Blue Oar Consulting, Inc. This entity is owned by Gregory Rotman, who is the son of the Company’s CEO, Steven Rotman. Blue Oar Consulting, Inc. (“Blue Oar”) provides business consulting services to the Company. In exchange for such services, the Company has entered into a consulting agreement with the related party entity. Per the consulting agreement, Blue Oar is to be paid $ 15,000 12,500 50% 349,000 11,364,904 180,000 155,265 214,000 8,786,000 135,000 4,666,667 70,000 Fluid Energy Conversion Inc. In May of 2019, the Company acquired the assets of Fluid Energy Conversion Inc. (“FEC”) for 2,500,000 103,750 2,500,000 |
COMMITMENTS
COMMITMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | NOTE 14 - COMMITMENTS Employment and Consulting Agreements The Company has entered into employment and consulting agreements with certain of our officers, employees, and affiliates. For employees, payment and benefits would become payable in the event of termination by us for any reason other than cause, or upon change in control of our Company, or by the employee for good reason. There is currently one employment agreement in place with the CEO, Steven Rotman. See compensation terms in Note 13. During the nine months ended September 30, 2021, the Company entered into various service agreements with consultants for financial reporting, advisory, and compliance services. The Company entered into a second exclusive sales agreement with a third-party agent to assist with promotional sales events at its Rotmans showroom. Inventory is purchased in the Company’s name on the agent’s credit lines. The agent has a purchase money security interest in the inventory and proceeds therefrom. The agent also agreed to advance funds, at their discretion, to the Company for operating expenses. The sale agreement will continue through December 31, 2021 unless terminated earlier by the agent. The Company agreed not to operate its business outside the ordinary course of business without the consent of the agent. The Company agreed to repay all advances by December 31, 2021. Litigation From time to time, the Company is party to certain legal proceedings that arise in the ordinary course and are incidental to our business. Future events or circumstances, currently unknown to management, will determine whether the resolution of pending or threatened litigation or claims will ultimately have a material effect on our consolidated financial position, liquidity or results of operations in any future reporting periods. EMA Financial On February 19, 2019, EMA Financial, Inc. filed a lawsuit in the Southern District of New York against the Company. The lawsuit alleged various breaches of an underlying convertible promissory note and stock purchase agreement and sought four claims for relief: (i) specific performance to enforce a stock conversion and contractual obligations; (ii) breach of contract; (iii) permanent injunction to enforce the stock conversion and contractual obligations; and (iv) legal fees and costs of the litigation. The complaint was filed with a motion seeking: (i) a preliminary injunction seeking an immediate resolution of the case through the stock conversion; (ii) a consolidation of the trial with the preliminary injunctive hearing; and (iii) summary judgment on the first and third claims for relief. The Company filed an opposition to the motion and upon oral argument the motion for injunctive relief was denied. The Court issued a decision permitting a motion for summary judgment to proceed and permitted the Company the opportunity to supplement its opposition papers together with the plaintiff who was also provided opportunity to submit reply papers. On April 5, 2019, the Company filed the opposition papers as well as a motion to dismiss the first and third causes of action in the complaint. On March 13, 2020, the Court granted the Company’s motion dismissing the first and third claims for relief and denied the motion for summary judgment as moot. The Company subsequently filed an amended answer with counterclaims. The affirmative defenses if granted collectively preclude the relief sought. In addition, Vystar filed counterclaims asserting: (a) violation of 10(b)(5) of the Securities and Exchange Act; (b) violation of Section 15(a)(1) of the Exchange Act (failure to register as a broker-dealer); (c) pursuant to the Uniform Declaratory Judgment Act, 28 U.S.C. §§ 2201, the Company requests the Court to declare: (i) pursuant to Delaware law, the underlying agreements are unconscionable; (ii) the underlying agreements are unenforceable and/or portions are unenforceable, such as the liquidated damages sections; (iii) to the extent the agreement is enforceable, Vystar in good faith requests the Court to declare the legal fee provisions of the agreements be mutual (d) unjust enrichment; (e) breach of contract (in the alternative); and (f) attorneys’ fees. On June 10, 2020, EMA filed a motion for summary judgment as to its remaining claims for relief and a motion to dismiss the Company’s affirmative defenses and counterclaims. The Company opposed the motion on July 10, 2020, and the same was fully submitted to the Court on July 28, 2020. On March 29, 2021, the Court issued a decision granting in part and denying in part the motion. Specifically, the Court granted that part of the motion seeking summary judgment and dismissal on the Company’s affirmative defense and counterclaim regarding S ed Notwithstanding such motion, the parties have exchanged discovery requests and responses and are seeking documents from third parties regarding their respective claims and defenses. Payment of Wages Actions On March 13, 2020, Robert LaChapelle, a former employee of Rotmans Furniture, the Company’s majority owned subsidiary, on behalf of himself and all others similarly situated, filed a class action complaint against Rotmans and two of its prior owners (including Steve Rotman, President of the Company) in the Worcester Superior Court alleging non-payment of overtime pay and Sunday premium pay pursuant to the Massachusetts Blue Laws (Ch. 136), the Massachusetts Overtime Law (Chapter 151, § 1A), and the Massachusetts Payment of Wages Law (Chapter 149 §§148 and 150). Specifically, LaChapelle has alleged that Rotmans failed to pay him and other sales people who were paid on a commission-only basis overtime pay at a rate of least 1.5 times the basic minimum wage or premium pay (also at 1.5 times the basic minimum wage) for hours they worked on Sundays. The parties settled with the named Plaintiffs, Robert LaChapelle and certain other employees, each on an individual basis, for a de minimus amount which was paid in March 2021. Plaintiffs’ counsel then filed a Stipulation of Dismissal of the Plaintiffs’ Complaint with prejudice. The settlement was included in operating expenses for the year ended December 31, 2020. However, after settlement, three additional former employees made similar claims and the Company is reviewing the matter. Stock Subscription Payable At September 30, 2021 and December 31, 2020, the Company recorded $ 1,125,421 2,589,556 SUMMARY ACTIVITY OF STOCK SUBSCRIPTION PAYABLE Amount Shares Balance, January 1, 2020 $ 1,150,125 31,439,401 Additions, net 1,640,631 71,991,955 Issuances, net (201,200 ) (4,000,000 ) Balance, December 31, 2020 2,589,556 99,431,356 Additions, net 683,954 29,688,661 Issuances, net (2,148,089 ) (81,110,994 ) Balance, September 30, 2021 $ 1,125,421 48,009,023 |
MAJOR CUSTOMERS AND VENDORS
MAJOR CUSTOMERS AND VENDORS | 9 Months Ended |
Sep. 30, 2021 | |
Major Customers And Vendors | |
MAJOR CUSTOMERS AND VENDORS | NOTE 15 - MAJOR CUSTOMERS AND VENDORS Major customers and vendors are defined as a customer or vendor from which the Company derives at least 10% of its revenue and cost of revenue, respectively. During the nine months ended September 30, 2021, the Company made approximately 17% 167,000 During the nine months ended September 30, 2020, there were no |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 16 - INCOME TAXES The provision (benefit) for income taxes for the three months ended September 30, 2021 and 2021 assumes a 21% effective tax rate for federal income taxes. SCHEDULE OF PROVISION FOR INCOME TAXES 2021 2020 Nine Months Ended September 30, 2021 2020 Federal statutory income tax rate (21.0 %) (21.0 %) Change in valuation allowance on net operating loss carryforwards 21.0 21.0 Effective income tax rate 0.0 % 0.0 % Deferred tax assets as of September 30, 2021 and December 31, 2020 are as follows: SCHEDULE OF DEFERRED TAX ASSETS 2021 2020 NOL carryforwards $ 7,275,000 $ 6,625,000 Less valuation allowance (7,275,000 ) (6,625,000 ) Deferred tax assets $ - $ - Deferred taxes are caused primarily by net operating loss carryforwards. For federal income tax purposes, the Company has a net operating loss carryforward of approximately $ 34,600,000 18,400,000 16,200,000 18,400,000 15,900,000 expires beginning in 2023 In addition, as of September 30, 2021, Rotmans has a net operating loss carryforward of approximately $ 4,200,000 710,000 3,490,000 3,300,000 expires beginning in 2022 Pursuant to Internal Revenue Code Section 382, the future realization of our net operating loss carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that may have occurred previously or that could occur in the future. |
PROFIT SHARING PLAN
PROFIT SHARING PLAN | 9 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
PROFIT SHARING PLAN | NOTE 17 - PROFIT SHARING PLAN The Company sponsors a qualified 401(k) profit sharing plan covering all eligible employees. The plan permits participants to make tax-deferred contributions to the plan by salary reduction. Company contributions are discretionary and are determined annually by the Board of Directors. There were no Company contributions in 2021 and 2020. Participant and Company contributions are limited to amounts allowed under the Internal Revenue Code. The Company offers no post-retirement benefits other than the plan discussed above and no significant post-employment benefits. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 18 - SUBSEQUENT EVENTS In connection with the closing of a leased warehouse in September, the Company exercised an option to purchase two equipment leases in October totaling approximately $ 59,000 34,000 |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements of the Company and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. In the opinion of management, all adjustments necessary for the fair presentation of the condensed consolidated financial statements have been included. Such adjustments are of a normal, recurring nature. The condensed consolidated financial statements, and the accompanying notes, are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and do not contain certain information included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Therefore, the interim condensed consolidated financial statements should be read in conjunction with that Annual Report on Form 10-K. The Company has evaluated subsequent events through the date of the filing of its Form 10-Q with the Securities and Exchange Commission. Other than those events disclosed in Note 18, the Company is not aware of any other significant events that occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on the Company’s financial statements. |
Basis of Consolidation | Basis of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly-owned or controlled operating subsidiaries. All significant intercompany accounts and transactions have been eliminated. |
COVID-19 | COVID-19 In December 2019, a novel coronavirus (“COVID-19”) emerged and has subsequently spread worldwide. The World Health Organization declared COVID-19 a pandemic resulting in federal, state, and local governments mandating various restrictions, including travel restrictions, restrictions on public gatherings, stay at home orders and advisories and quarantining of people who may have been exposed to the virus. On March 24, 2020, Massachusetts required all non-essential businesses to close their physical workplaces. As a result, the Rotmans showroom, offices and warehouse temporarily closed. During that time, associates worked remotely where possible. The Company reopened on June 10, 2020 and continues to monitor developments, including government requirements and recommendations. The COVID-19 pandemic has caused, among other things, interruptions to our supply chains and suppliers, including problems with inventory availability with price volatility and higher cost of products and international freight due to the high demand of products and low supply for an unpredictable period of time. The pandemic continues to cause economic disruption. Although our showroom has reopened, some business segments are operating on a reduced scale. The COVID-19 pandemic is complex and continues to evolve with sporadic resurgences, new virus variants and the vaccine rollout. We cannot reasonably estimate the duration of COVID-19 and its impact on Vystar. Accordingly, the estimates and assumptions made as of September 30, 2021 could change in subsequent interim reports, and it is reasonably possible that such changes could be significant (although the potential effects cannot be measured at this time). |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the chief executive officer. The Company and the chief executive officer view the Company’s operations and manage its business as one reportable segment with different operating segments. |
Estimates | Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Significant estimates made by management include, among others, allowance for obsolete inventory, the allocation of purchase price related to acquisitions, the recoverability of long-lived assets, valuation and impairment of intangible assets, fair values of right of use assets and lease liabilities, valuation of derivative liabilities, share-based compensation and other equity issuances. Although these estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future, actual results could differ from these estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist principally of cash, accounts receivable, investments - equity securities, accounts payable, accrued expenses and interest payable, shareholder notes payable, long-term debt and unearned revenue. The carrying values of all the Company’s financial instruments approximate or equal fair value because of their short maturities and market interest rates or, in the case of equity securities, being stated at fair value. In specific circumstances, certain assets and liabilities are reported or disclosed at fair value. Fair value is the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the Company’s principal market for such transactions. If there is not an established principal market, fair value is derived from the most advantageous market. Valuation inputs are classified in the following hierarchy: ● Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities. ● Level 2 inputs are directly or indirectly observable valuation inputs for the asset or liability, excluding Level 1 inputs. ● Level 3 inputs are unobservable inputs for the asset or liability. Highest priority is given to Level 1 inputs and the lowest priority to Level 3 inputs. Acceptable valuation techniques include the market approach, income approach, and cost approach. In some cases, more than one valuation technique is used. The derivative liabilities were recognized at fair value on a recurring basis through the date of the settlement and September 30, 2021 and are level 3 measurements. There have been no transfers between levels during the nine months ended September 30, 2021. |
Acquisitions | Acquisitions Amounts paid for acquisitions are allocated to the assets acquired and liabilities assumed based on their estimated fair value at the date of acquisition. The fair value of identifiable intangible assets is based on valuations that use information and assumptions provided by management. Identifiable intangible assets with finite lives are amortized over their useful lives. Acquisition-related costs, including, legal, accounting, and other costs, are capitalized in asset acquisitions and for business combinations are expensed in the periods in which the costs are incurred. The results of operations of acquired assets are included in the financial statements from the acquisition date. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include all liquid investments with a maturity date of less than three months when purchased. Cash equivalents also include amounts due from third-party financial institutions for credit and debit card transactions which typically settle within five days. Restricted cash represents cash balances restricted as to withdrawal or use and are included in prepaid expenses and other on the condensed consolidated balance sheets. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company routinely sells, without recourse, trade receivables resulting from retail furniture sales to two financial institutions at an average service charge of 1 % in 2021. Amounts sold during the nine months ending September 30, 2021 were approximately $ 4,556,000 . In April 2021, the Company sold a trade receivable from an RX Air purification unit sale to a financial corporation at a service charge of 1.7 % per month and a reserve of 15 %. Included in accounts receivable at September 30, 2021 is approximately $ 24,000 due from the factor. Retail furniture receivables retained by the Company are generally collateralized by the merchandise sold, represent valid claims against debtors for sales arising on or before the balance sheet date and are reduced to their estimated net realizable value. In addition, the Company grants credit to Vystar customers without requiring collateral. The amount of accounting loss for which Vystar is at risk in these unsecured accounts receivable is limited to their carrying value. Management provides for uncollectible amounts through a charge to earnings and a credit to an allowance for doubtful accounts based upon its assessment of the current status of individual accounts. Balances that are still outstanding after management has performed reasonable collection efforts are written off through a charge to the allowance and a credit to accounts receivable. As of September 30, 2021, the allowance for doubtful accounts was $ 125,000 no |
Inventories | Inventories Inventories include those costs directly attributable to the product before sale. Inventories consist primarily of finished goods of furniture, mattresses, RxAir purifier units, foam toppers and pillows and are carried at net realizable value, which is defined as selling price less cost of completion, disposal and transportation. The Company evaluates the need to record write-downs for inventory on a regular basis. Appropriate consideration is given to obsolescence, slow-moving and other factors in evaluating net realizable values. Inventories not expected to be sold within 12 months are classified as long-term. |
Prepaid Expenses and Other | Prepaid Expenses and Other Prepaid expenses and other include restricted cash, amounts related to prepaid insurance policies, which are expensed on a straight-line basis over the life of the underlying policy, and other expenses. |
Investments - Equity Securities | Investments - Equity Securities Marketable equity securities have been categorized as available-for-sale and, as a result, are stated at fair value. Unrealized gains and losses are reflected in the statement of operations. The Company periodically reviews the available-for-sale securities for other than temporary declines in fair value below cost and more frequently when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company sold the securities in September 2021 and the cost was recoverable in all material respects. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided over the estimated useful lives of the assets, generally 5 10 Expenditures for major renewals and betterments are capitalized, while routine repairs and maintenance are expensed as incurred. When property items are retired or otherwise disposed of, the asset and related reserve accounts are relieved of the cost and accumulated depreciation, respectively, and the resultant gain or loss is reflected in earnings. As of September 30, 2021, the net balance of property and equipment is $ 914,138 603,771 1,631,651 587,081 |
Intangible Assets | Intangible Assets Patents represent legal and other fees associated with the registration of patents. The Company has five issued patents with the United States Patent and Trade Office (“USPTO”) as well as five issued international Patent Cooperation Treaty (“PCT”) patents. Patents are carried at cost and are being amortized on a straight-line basis over their estimated useful lives, typically ranging from 9 20 The Company has trademark protection for “Vystar”, “Vytex”, and “RxAir” among others. Trademarks are carried at cost and since their estimated life is indeterminable, no amortization is recognized. Instead, they are evaluated annually for impairment. Customer relationships, tradename and marketing related intangibles are carried at cost and are being amortized on a straight-line basis over their estimated useful lives, typically ranging from 5 to 10 years. Our intangible assets are reviewed for impairment annually or more frequently as warranted by events of changes in circumstances. |
Long-Lived Assets | Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be fully recoverable. We evaluate assets for potential impairment by comparing estimated future undiscounted net cash flows to the carrying amount of the assets. If the carrying amount of the assets exceeds the estimated future undiscounted cash flows, impairment is measured based on the difference between the carrying amount of the assets and fair value. Assets to be disposed of would be separately presented in the condensed consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell and are no longer depreciated. The assets and liabilities of a disposal group classified as held-for-sale would be presented separately in the appropriate asset and liability sections of the condensed consolidated balance sheet, if material. During the nine months ended September 30, 2021 and 2020, we did no |
Goodwill | Goodwill Goodwill reflects the cost of an acquisition in excess of the fair values assigned to identifiable net assets acquired. Goodwill is not amortized, rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. We perform our annual impairment test at the end of each calendar year, or more frequently if events or changes in circumstances indicate the asset might be impaired. Accounting for acquisitions requires us to recognize, separately from goodwill, the assets acquired and the liabilities assumed at their acquisition-date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition-date fair values of the assets acquired and the liabilities assumed. While we use best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, the estimates are inherently uncertain and subject to refinement. The impairment model permits, and we utilize, a simplified approach for determining goodwill impairment. In the first step, we evaluate the recoverability of goodwill by estimating the fair value of our reporting unit using multiple techniques, including an income approach using a discounted cash flow model and a market approach. Based on an equal weighting of the results of these two approaches, a conclusion of fair value is estimated. The fair value is then compared to the carrying value of our reporting unit. If the fair value of a reporting unit is less than its carrying value, the Company recognizes this amount as an impairment loss. Impairment losses, limited to the carrying value of goodwill, represent the excess of the carrying amount of goodwill over its implied fair value. |
Convertible Notes Payable | Convertible Notes Payable Borrowings are recognized initially at the principal amount received. Borrowings are subsequently carried at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized as interest expense in the statements of operations over the period of the borrowings using the effective interest method. |
Derivatives | Derivatives The Company evaluates its debt instruments or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of Accounting Standards Codification (“ASC”) Topic 815-40, Derivative Instruments and Hedging: Contracts in Entity’s Own Equity The Company applies the accounting standard that provides guidance for determining whether an equity-linked financial instrument, or embedded feature, is indexed to an entity’s own stock. The standard applies to any freestanding financial instrument or embedded features that have the characteristics of a derivative, and to any freestanding financial instruments that are potentially settled in an entity’s own common stock. From time to time, the Company has issued notes with embedded conversion features. Certain of the embedded conversion features contain price protection or anti-dilution features that result in these instruments being treated as derivatives for accounting purposes. Accordingly, as of September 30, 2021, the Company has classified all conversion features as derivative liabilities and has estimated the fair value of these embedded conversion features using a Monte Carlo simulation model. |
Unearned Revenue | Unearned Revenue Unearned revenue consists of customer advance payments, deposits on sales of undelivered merchandise and deferred warranty revenue on self-insured stain protection warranty coverage. Changes to unearned revenue during the nine months ended September 30, 2021 and 2020 are summarized as follows: SCHEDULE OF UNEARNED REVENUE 2021 2020 Balance, beginning of the period $ 2,427,771 $ 2,500,572 Customer deposits received 20,250,952 13,350,179 Warranty coverage purchased - 118,151 Gift cards purchased 9,610 4,150 Revenue earned (21,140,827 ) (12,634,863 ) Balance, end of the period $ 1,547,506 $ 3,338,189 |
Loss Per Share | Loss Per Share The Company presents basic and diluted loss per share. Because the Company reported a net loss in the nine months ended September 30, 2021 and 2020, common stock equivalents, including stock options and warrants, were anti-dilutive. Excluded from the computation of diluted loss per share were options to purchase 26,749,938 27,874,938 10,492,732 14,205,912 3,186,730 4,753,550 |
Revenue | Revenue Our principal activities from which we generate our revenue are product sales. Revenue is measured based on considerations specified in a contract with a customer. A contract exists when it becomes a legally enforceable agreement with a customer. The contract is based on either the acceptance of standard terms and conditions at the retail store and on the websites for e-commerce customers, or the execution of terms and conditions contracts with retailers and wholesalers. These contracts define each party’s rights, payment terms and other contractual terms and conditions of the sale. Consideration is typically paid prior to shipment via credit card or check when our products are sold direct to consumers, which is typically within 1 to 2 days or approximately 30 days from the time control is transferred when sold to wholesalers, distributors and retailers. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience and, in some circumstances, published credit and financial information pertaining to the customer. A performance obligation is a promise in a contract to transfer a distinct product to the customer, which for us is transfer of finished goods to our customers. Performance obligations promised in a contract are identified based on the goods that will be transferred to the customer that are both capable of being distinct and are distinct in the context of the contract, whereby the transfer of the goods is separately identifiable from other promises in the contract. We have concluded the sale of finished goods and related shipping and handling are accounted for as the single performance obligation. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. The transaction price is determined based on the consideration to which we will be entitled to receive in exchange for transferring goods to the customer. We issue refunds to retail, e-commerce and print media customers, upon request, within 30 days of delivery. We estimate the amount of potential refunds at each reporting period using a portfolio approach of historical data, adjusted for changes in expected customer experience, including seasonality and changes in economic factors. For retailers, distributors and wholesalers, we do not offer a right of return or refund and revenue is recognized at the time products are shipped to customers. In all cases, judgment is required in estimating these reserves. Actual claims for returns could be materially different from the estimates. As of September 30, 2021 and December 31, 2020, reserves for estimated sales returns totaled $ 85,000 55,000 We recognize revenue when we satisfy a performance obligation in a contract by transferring control over a product to a customer when product is shipped based on fulfillment by the Company. The Company considers fulfillment when it passes all liability at the point of shipping through third party carriers or in-house delivery services. Delivery fees are charged to customers and are included in revenue in the accompanying condensed consolidated statements of operations and the costs associated with these deliveries are included in operating expenses in the accompanying condensed consolidated statements of operations through January 20, 2020. All subsequent delivery costs are included in revenues as a third-party delivery service was engaged beginning January 21, 2020. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of revenue in the accompanying condensed consolidated statements of operations. The Company also defers revenues for separately-priced stain protection warranty coverage for which it is ultimately self-insured. Revenue is recognized from the extended warranty sales on a straight-line basis over the respective contract term. The extended warranty terms primarily range from three to five years from the date of delivery. The Company ended this warranty program during 2020 but continues to amortize the previously contracted warranties over their original terms. The Company switched to a separately-priced stain protection warranty serviced by a third-party when the store reopened in June 2020. 612,000 920,000 308,000 118,000 390,000 158,000 241,000 |
Cost of Revenue | Cost of Revenue Cost of revenue consists primarily of product and freight costs and fees paid to online retailers. |
Research and Development | Research and Development Research and development costs are expensed when incurred. Research and development costs include all costs incurred related to the research, development and testing. For the nine months ended September 30, 2021 and 2020, Vystar’s research and development costs were not significant. |
Advertising Costs | Advertising Costs Advertising costs, which include television, radio, newspaper, digital and other media advertising, are expensed upon first showing. Advertising costs were approximately $ 1,774,000 1,151,000 |
Share-Based Compensation | Share-Based Compensation The fair value of stock options is estimated on the grant date using the Black-Scholes option pricing model, based on weighted average assumptions. Expected volatility is based on historical volatility of our common stock. The Company has elected to use the simplified method described in the Securities and Exchange Commission Staff Accounting Bulletin Topic 14C to estimate the expected term of employee stock options. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The value of restricted stock awards is determined using the fair value of the Company’s common stock on the date of grant. The Company accounts for forfeitures as they occur. Compensation expense is recognized on a straight-line basis over the requisite service period of the award. |
Income Taxes | Income Taxes Vystar recognizes income taxes on an accrual basis based on a tax position taken or expected to be taken in its tax returns. A tax position is defined as a position in a previously filed tax return or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets or liabilities. Tax positions are recognized only when it is more likely than not (i.e., likelihood of greater than 50% No The Company remains subject to income tax examinations from Federal and state taxing jurisdictions for 2018 through 2020. |
Concentration of Credit Risk | Concentration of Credit Risk Certain financial instruments potentially subject the Company to concentrations of credit risk. These financial instruments consist primarily of cash and accounts receivable. Cash held in operating accounts may exceed the Federal Deposit Insurance Corporation, or FDIC, insurance limits. While the Company monitors cash balances in our operating accounts on a regular basis and adjust the balances as appropriate, these balances could be impacted if the underlying financial institutions fail. To date, the Company has experienced no loss or lack of access to our cash; however, the Company can provide no assurances that access to our cash will not be impacted by adverse conditions in the financial markets. Credit concentration risk related to accounts receivable is mitigated as customer credit is checked prior to the sales. |
Other Risks and Uncertainties | Other Risks and Uncertainties The Company is exposed to risks pertinent to the operations of a retailer, including, but not limited to, the ability to acquire new customers and maintain a strong brand as well as broader economic factors such as interest rates and changes in customer spending patterns. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SCHEDULE OF UNEARNED REVENUE | Changes to unearned revenue during the nine months ended September 30, 2021 and 2020 are summarized as follows: SCHEDULE OF UNEARNED REVENUE 2021 2020 Balance, beginning of the period $ 2,427,771 $ 2,500,572 Customer deposits received 20,250,952 13,350,179 Warranty coverage purchased - 118,151 Gift cards purchased 9,610 4,150 Revenue earned (21,140,827 ) (12,634,863 ) Balance, end of the period $ 1,547,506 $ 3,338,189 |
INVESTMENTS _ EQUITY SECURITI_2
INVESTMENTS – EQUITY SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments, All Other Investments [Abstract] | |
SCHEDULE OF COST AND FAIR VALUE OF INVESTMENTS | Cost and fair value of investments - equity securities are as follows: SCHEDULE OF COST AND FAIR VALUE OF INVESTMENTS Gross Gross Fair Cost Unrealized Losses Unrealized Gains Value December 31, 2020 $ 141,225 $ (13,315 ) $ - $ 127,910 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT, NET | Property and equipment, net consists of the following: SCHEDULE OF PROPERTY AND EQUIPMENT, NET September 30, December 31, 2021 2020 Furniture, fixtures and equipment $ 630,450 $ 1,385,430 Tooling and testing equipment 338,572 338,572 Parking lots 365,707 365,707 Leasehold improvements 134,014 79,857 Motor vehicles 49,166 49,166 Property and equipment, gross 1,517,909 2,218,732 Accumulated depreciation (603,771 ) (587,081 ) Property and equipment, net $ 914,138 $ 1,631,651 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | Intangible assets consist of the following: SCHEDULE OF INTANGIBLE ASSETS Amortization September 30, December 31, Period 2021 2020 (in Years) Amortized intangible assets: Customer relationships $ 210,000 $ 210,000 6 10 Proprietary technology 610,000 610,000 10 Tradename and brand 1,050,000 1,050,000 5 10 Marketing related 380,000 380,000 5 Patents 361,284 359,101 6 20 Noncompete 50,000 50,000 5 Total 2,661,284 2,659,101 Accumulated amortization (1,120,156 ) (832,186 ) Intangible assets, net 1,541,128 1,826,915 Indefinite-lived intangible assets: Trademarks 9,072 9,072 Total intangible assets $ 1,550,200 $ 1,835,987 |
SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSE | Estimated future amortization expense for finite-lived intangible assets is as follows: SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSE Amount Remaining in 2021 $ 95,991 2022 383,961 2023 377,350 2024 278,125 2025 129,261 Thereafter 276,440 Total $ 1,541,128 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases | |
SCHEDULE OF LEASE COST | The table below presents the lease costs for the three and nine months ended September 30, 2021 and 2020: SCHEDULE OF LEASE COST 2021 2020 2021 2020 Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Operating lease cost $ 396,937 $ 395,188 $ 1,189,481 $ 1,184,302 Finance lease cost: Amortization of right-of-use assets 45,912 47,012 137,736 142,134 Interest on lease liabilities 8,371 10,585 26,792 33,416 Total lease cost $ 451,220 $ 452,785 $ 1,354,009 $ 1,359,852 |
SCHEDULE OF OTHER INFORMATION RELATED TO LEASES | The following table presents other information related to leases: SCHEDULE OF OTHER INFORMATION RELATED TO LEASES 2021 2020 2021 2020 Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 375,911 $ 375,911 $ 1,127,733 $ 1,124,706 Financing cash flows used for financing leases 52,427 53,577 157,281 161,881 Assets obtained in exchange for operating lease liabilities - - - - Assets obtained in exchange for finance lease liabilities - - - 75,739 Weighted average remaining lease term: Operating leases 9 9 9 9 Finance leases 4.4 5 4.4 5 Weighted average discount rate: Operating leases 5.59 % 5.54 % 5.59 % 5.54 % Finance leases 5.16 % 5.16 % 5.16 % 5.16 % |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS REQUIRED UNDER OPERATING AND FINANCING LEASE OBLIGATIONS | The future minimum lease payments required under operating and financing lease obligations as of September 30, 2021 having initial or remaining non-cancelable lease terms in excess of one year are summarized as follows: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS REQUIRED UNDER OPERATING AND FINANCING LEASE OBLIGATIONS Operating Leases Finance Leases Total Remainder of 2021 $ 280,335 $ 69,972 $ 350,307 2022 967,827 139,882 1,107,709 2023 878,807 139,080 1,017,887 2024 870,000 139,080 1,009,080 2025 870,000 139,080 1,009,080 Thereafter 4,422,500 68,395 4,490,895 Total undiscounted lease liabilities 8,289,469 695,489 8,984,958 Less: imputed interest (1,782,210 ) (75,884 ) (1,858,094 ) Net lease liabilities $ 6,507,259 $ 619,605 $ 7,126,864 |
NOTES PAYABLE AND LOAN FACILI_2
NOTES PAYABLE AND LOAN FACILITY (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Short-term Debt [Line Items] | |
SCHEDULE OF LONG-TERM DEBT | The following table summarizes shareholder, convertible and contingently convertible notes payable: SCHEDULE OF LONG-TERM DEBT September 30, December 31, 2021 2020 Shareholder, convertible and contingently convertible notes $ 1,241,895 $ 951,895 Accrued interest 131,485 94,164 Total shareholder notes and accrued interest 1,373,380 1,046,059 Less: current maturities (1,373,380 ) (1,046,059 ) Total long-term debt $ - $ - |
SCHEDULE OF RELATED PARTY DEBT | The following table summarizes related party debt: SCHEDULE OF RELATED PARTY DEBT September 30, December 31, 2021 2020 Rotman Family convertible notes $ 1,967,737 $ 1,832,707 Rotman Family nonconvertible notes 1,953,509 1,555,500 Accrued interest 334,021 189,394 Debt discount (43,333 ) (4,667 ) Long term debt, current 4,211,934 3,572,934 Less: current maturities (332,000 ) (1,537,000 ) Long term debt $ 3,879,934 $ 2,035,934 |
SCHEDULE OF MATURITIES OF NOTES PAYABLE | Approximate maturities for the succeeding years are as follows: SCHEDULE OF MATURITIES OF NOTES PAYABLE Remainder of 2021 $ 270,000 2022 1,223,000 2023 1,094,000 2024 223,000 2025 36,000 Thereafter 1,365,934 Long term debt $ 4,211,934 |
Rotman Family Convertible Notes [Member] | |
Short-term Debt [Line Items] | |
SCHEDULE OF NOTES PAYABLE | The following table summarizes the Rotman Family Convertible Notes: SCHEDULE OF NOTES PAYABLE Carrying Amount Including Accrued Interest Principal September 30, December 31, Issue Date Amount 2021 2020 Steven Rotman 8.00 July 2024 07/18/19 $ 105,000 $ 123,900 $ 117,600 Gregory Rotman 8.00 July 2024 07/18/19 55,207 65,160 61,847 Steven Rotman 5.00 July 2027 07/18/19 1,102,500 1,224,234 1,182,890 Bernard Rotman 5.00 July 2023 07/18/19 420,000 466,375 450,625 Steven Rotman 5.00 December 2021 12/19/19 100,000 108,958 105,207 Steven Rotman 5.00 February 2022 02/02/20 50,000 53,958 52,083 Gregory Rotman 5.00 June 2023 06/03/21 130,030 132,197 - Jamie Rotman 5.00 August 2023 08/17/21 5,000 5,032 - $ 1,967,737 2,179,814 1,970,252 Debt Discount (43,333 ) (4,667 ) $ 2,136,481 $ 1,965,585 Based on the variable conversion price for all of these convertible notes issued prior to August 2021, the Company recorded the embedded conversion features as derivative liabilities, which amounted to $ 1,194,000 and $ 1,275,000 at September 30, 2021 and December 31, 2020, respectively. Rotman Family Nonconvertible Notes During the nine months ended September 30, 2021, Steven Rotman advanced the Company funds totaling $ 398,009 5 In addition, the maturity date of advances made in 2020 has been extended to December 2022. The following table summarizes the Rotman Family Nonconvertible Notes: SCHEDULE OF NOTES PAYABLE Carrying Amount Including Accrued Interest Principal September 30, December 31, Issue Date Amount 2021 2020 Steven Rotman 5.00 July 2027 07/18/19 $ 367,500 $ 408,078 $ 394,297 Bernard Rotman 5.00 July 2023 07/18/19 140,000 155,458 150,208 Steven Rotman 5.00 December 2022 08/24/20 75,000 79,135 76,323 Steven Rotman 5.00 December 2022 09/01/20 100,000 105,403 101,653 Steven Rotman 5.00 December 2022 09/08/20 145,000 152,693 147,256 Steven Rotman 5.00 December 2022 09/15/20 200,000 210,417 202,917 Steven Rotman 5.00 December 2022 09/21/20 75,000 78,844 76,031 Steven Rotman 5.00 December 2022 10/02/20 50,000 52,500 50,625 Steven Rotman 5.00 December 2022 10/08/20 40,000 42,000 40,500 Steven Rotman 5.00 December 2022 10/15/20 48,000 50,400 48,600 Steven Rotman 5.00 December 2022 10/20/20 50,000 52,500 50,625 Steven Rotman 5.00 December 2022 11/02/20 70,000 73,500 70,875 Steven Rotman 5.00 December 2022 11/13/20 35,000 36,750 35,438 Steven Rotman 5.00 December 2022 11/18/20 35,000 36,750 35,438 Steven Rotman 5.00 December 2022 11/20/20 65,000 68,250 65,813 Steven Rotman 5.00 December 2022 12/22/20 60,000 63,000 60,750 Steven Rotman 5.00 March 2023 01/21/21 35,000 36,215 - Steven Rotman 5.00 March 2023 01/27/21 40,000 41,356 - Steven Rotman 5.00 March 2023 02/03/21 50,000 51,646 - Steven Rotman 5.00 March 2023 02/26/21 100,000 103,000 - Steven Rotman 5.00 March 2023 03/19/21 100,000 102,681 - Steven Rotman 5.00 March 2023 03/25/21 70,000 71,818 - Steven Rotman 5.00 June 2023 06/02/21 3,009 3,059 - $ 1,953,509 $ 2,075,453 $ 1,607,349 |
Rotman Family Non Convertible Notes [Member] | |
Short-term Debt [Line Items] | |
SCHEDULE OF NOTES PAYABLE | The following table summarizes the Rotman Family Nonconvertible Notes: SCHEDULE OF NOTES PAYABLE Carrying Amount Including Accrued Interest Principal September 30, December 31, Issue Date Amount 2021 2020 Steven Rotman 5.00 July 2027 07/18/19 $ 367,500 $ 408,078 $ 394,297 Bernard Rotman 5.00 July 2023 07/18/19 140,000 155,458 150,208 Steven Rotman 5.00 December 2022 08/24/20 75,000 79,135 76,323 Steven Rotman 5.00 December 2022 09/01/20 100,000 105,403 101,653 Steven Rotman 5.00 December 2022 09/08/20 145,000 152,693 147,256 Steven Rotman 5.00 December 2022 09/15/20 200,000 210,417 202,917 Steven Rotman 5.00 December 2022 09/21/20 75,000 78,844 76,031 Steven Rotman 5.00 December 2022 10/02/20 50,000 52,500 50,625 Steven Rotman 5.00 December 2022 10/08/20 40,000 42,000 40,500 Steven Rotman 5.00 December 2022 10/15/20 48,000 50,400 48,600 Steven Rotman 5.00 December 2022 10/20/20 50,000 52,500 50,625 Steven Rotman 5.00 December 2022 11/02/20 70,000 73,500 70,875 Steven Rotman 5.00 December 2022 11/13/20 35,000 36,750 35,438 Steven Rotman 5.00 December 2022 11/18/20 35,000 36,750 35,438 Steven Rotman 5.00 December 2022 11/20/20 65,000 68,250 65,813 Steven Rotman 5.00 December 2022 12/22/20 60,000 63,000 60,750 Steven Rotman 5.00 March 2023 01/21/21 35,000 36,215 - Steven Rotman 5.00 March 2023 01/27/21 40,000 41,356 - Steven Rotman 5.00 March 2023 02/03/21 50,000 51,646 - Steven Rotman 5.00 March 2023 02/26/21 100,000 103,000 - Steven Rotman 5.00 March 2023 03/19/21 100,000 102,681 - Steven Rotman 5.00 March 2023 03/25/21 70,000 71,818 - Steven Rotman 5.00 June 2023 06/02/21 3,009 3,059 - $ 1,953,509 $ 2,075,453 $ 1,607,349 |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
SCHEDULE OF DERIVATIVE LIABILITIES | The following table summarizes the derivative liabilities included in the condensed consolidated balance sheet at September 30, 2021 and December 31, 2020: Fair Value of Embedded Derivative Liabilities: SCHEDULE OF DERIVATIVE LIABILITIES 2021 2020 Balance, beginning of the period $ 1,766,700 $ 1,499,800 Initial measurement of liabilities 65,000 28,000 Change in fair value 1,400 238,900 Balance, end of the period $ 1,833,100 $ 1,766,700 |
REVENUES (Tables)
REVENUES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF REVENUES | SCHEDULE OF REVENUES Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 % of % of % of % of Net Sales Net Sales Net Sales Net Sales Net Sales Net Sales Net Sales Net Sales Merchandise: Case Goods Bedroom Furniture $ 398,807 9.8 $ 723,529 13.0 $ 1,725,588 7.5 $ 1,879,831 13.5 Dining Room Furniture 235,945 5.8 309,429 5.6 1,337,503 5.8 1,050,491 7.6 Occasional 422,044 10.4 981,164 17.7 3,186,248 13.8 2,387,054 17.2 1,056,796 26.0 2,014,122 36.3 6,249,339 27.1 5,317,376 38.3 Upholstery 1,627,212 40.0 1,582,989 28.6 8,200,995 35.4 3,850,867 27.8 Mattresses and Toppers 847,997 20.9 899,693 16.2 3,681,848 15.9 2,291,156 16.5 Broadloom, Flooring and Rugs 143,618 3.5 464,408 8.4 1,996,618 8.6 970,593 7.0 Warranty 142,709 3.5 119,329 2.2 589,729 2.5 400,789 2.9 Air Purification Units 192,755 4.7 29,309 0.5 1,783,965 7.7 222,133 1.6 Accessories and Other 55,510 1.4 434,713 7.8 648,226 2.8 812,793 5.9 $ 4,066,597 100.0 $ 5,544,563 100.0 $ 23,150,720 100.0 $ 13,865,707 100.0 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SCHEDULE OF STOCK OPTION ACTIVITY | The following table summarizes all stock option activity of the Company for the nine months ended September 30, 2021: SCHEDULE OF STOCK OPTION ACTIVITY Weighted Weighted Average Average Remaining Number Exercise Contractual of Shares Price Life (Years) Outstanding, December 31, 2020 27,874,938 $ 0.19 2.47 Exercisable, December 31, 2020 27,124,938 $ 0.19 2.59 Granted - - - Exercised - - - Forfeited (750,000 ) 0.57 - Outstanding, September 30, 2021 27,124,938 $ 0.19 2.67 Exercisable, September 30, 2021 26,749,938 $ 0.20 2.67 |
SCHEDULE OF WARRANT ACTIVITY | The following table represents the Company’s warrant activity for the nine months ended September 30, 2021: SCHEDULE OF WARRANT ACTIVITY Weighted Weighted Average Number of Shares Weighted Average Fair Value Average Exercise Price Remaining Contractual Life (Years) Outstanding, December 31, 2020 14,205,912 - $ 0.08 2.53 Granted - - - - Exercised - - - - Forfeited (3,713,180 ) - 0.22 - Expired - - - - Outstanding, September 30, 2021 10,492,732 - $ 0.08 2.62 Exercisable, September 30, 2021 10,492,732 - $ 0.08 2.62 |
COMMITMENTS (Tables)
COMMITMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
SUMMARY ACTIVITY OF STOCK SUBSCRIPTION PAYABLE | SUMMARY ACTIVITY OF STOCK SUBSCRIPTION PAYABLE Amount Shares Balance, January 1, 2020 $ 1,150,125 31,439,401 Additions, net 1,640,631 71,991,955 Issuances, net (201,200 ) (4,000,000 ) Balance, December 31, 2020 2,589,556 99,431,356 Additions, net 683,954 29,688,661 Issuances, net (2,148,089 ) (81,110,994 ) Balance, September 30, 2021 $ 1,125,421 48,009,023 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF PROVISION FOR INCOME TAXES | SCHEDULE OF PROVISION FOR INCOME TAXES 2021 2020 Nine Months Ended September 30, 2021 2020 Federal statutory income tax rate (21.0 %) (21.0 %) Change in valuation allowance on net operating loss carryforwards 21.0 21.0 Effective income tax rate 0.0 % 0.0 % |
SCHEDULE OF DEFERRED TAX ASSETS | Deferred tax assets as of September 30, 2021 and December 31, 2020 are as follows: SCHEDULE OF DEFERRED TAX ASSETS 2021 2020 NOL carryforwards $ 7,275,000 $ 6,625,000 Less valuation allowance (7,275,000 ) (6,625,000 ) Deferred tax assets $ - $ - |
SCHEDULE OF UNEARNED REVENUE (D
SCHEDULE OF UNEARNED REVENUE (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Accounting Policies [Abstract] | ||
Balance, beginning of the period | $ 2,427,771 | $ 2,500,572 |
Customer deposits received | 20,250,952 | 13,350,179 |
Warranty coverage purchased | 118,151 | |
Gift cards purchased | 9,610 | 4,150 |
Revenue earned | (21,140,827) | (12,634,863) |
Balance, end of the period | $ 1,547,506 | $ 3,338,189 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Apr. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||||||
Sales average service charge, percentage | 1.70% | 1.00% | |||||
Accounts Receivable, Sale | $ 24,000 | $ 4,556,000 | |||||
Sales reserve, percentage | 15.00% | ||||||
Allowance for doubtful accounts | $ 125,000 | 125,000 | $ 0 | ||||
Property and equipment | 914,138 | 914,138 | $ 1,631,651 | ||||
Accumulated depreciation of property and equipment | 603,771 | 603,771 | 587,081 | ||||
Impairment of long-lived assets | 0 | ||||||
Reserves for estimated sales returns | 85,000 | 55,000 | |||||
Recognized from deferred revenue arrangements | (21,140,827) | $ (12,634,863) | |||||
Deferred commission costs | 158,000 | 158,000 | 241,000 | ||||
Advertising expense | $ 1,774,000 | 1,151,000 | |||||
Income tax, likely hood percentage | greater than 50% | ||||||
Income tax examination, penalties and interest accrued | 0 | $ 0 | $ 0 | $ 0 | |||
Deferred Warranty Revenue [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Deferred revenue | 612,000 | $ 612,000 | $ 920,000 | ||||
Proceeds from deferred revenue arrangements | $ 308,000 | 118,000 | |||||
Recognized from deferred revenue arrangements | $ 390,000 | ||||||
Options to Purchase Common Shares [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 26,749,938 | 27,874,938 | |||||
Warrants to Purchase Common Shares [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 10,492,732 | 14,205,912 | |||||
Preferred Stock Convertible to Common Stock [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,186,730 | 4,753,550 | |||||
Minimum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, useful life | 5 years | ||||||
Intangible asset, useful life | 9 years | ||||||
Maximum [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, useful life | 10 years | ||||||
Intangible asset, useful life | 20 years |
LIQUIDITY AND GOING CONCERN (De
LIQUIDITY AND GOING CONCERN (Details Narrative) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cash | $ 346,631 | $ 620,539 |
Working capital deficit | 5,600,000 | |
Retained Earnings (Accumulated Deficit) | $ 49,450,911 | $ 48,713,184 |
SCHEDULE OF COST AND FAIR VALUE
SCHEDULE OF COST AND FAIR VALUE OF INVESTMENTS (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Investments, All Other Investments [Abstract] | ||
Cost | $ 141,225 | |
Gross Unrealized Losses | (13,315) | |
Gross Unrealized Gains | ||
Fair Value | $ 127,910 |
INVESTMENTS _ EQUITY SECURITI_3
INVESTMENTS – EQUITY SECURITIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2020 | |
Investments, All Other Investments [Abstract] | ||
Unrealized Gain (Loss) on Derivatives | $ 16,000 | $ 48,000 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,517,909 | $ 2,218,732 |
Accumulated depreciation | (603,771) | (587,081) |
Property and equipment, net | 914,138 | 1,631,651 |
Furniture Fixtures And Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 630,450 | 1,385,430 |
Tooling And Testing Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 338,572 | 338,572 |
Parking Lots [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 365,707 | 365,707 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 134,014 | 79,857 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 49,166 | $ 49,166 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 289,569 | $ 424,965 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross | $ 2,661,284 | $ 2,659,101 |
Accumulated amortization | (1,120,156) | (832,186) |
Intangible assets, net | 1,541,128 | 1,826,915 |
Trademarks | 9,072 | 9,072 |
Total intangible assets | $ 1,550,200 | 1,835,987 |
Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 9 years | |
Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 20 years | |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross | $ 210,000 | 210,000 |
Customer Relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 6 years | |
Customer Relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 10 years | |
Proprietary Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross | $ 610,000 | 610,000 |
Estimated Life | 10 years | |
Tradename and Brand [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross | $ 1,050,000 | 1,050,000 |
Tradename and Brand [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 5 years | |
Tradename and Brand [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 10 years | |
Marketing Related [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross | $ 380,000 | 380,000 |
Estimated Life | 5 years | |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross | $ 361,284 | 359,101 |
Patents [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 6 years | |
Patents [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 20 years | |
Noncompete [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross | $ 50,000 | $ 50,000 |
Estimated Life | 5 years |
SCHEDULE OF ESTIMATED FUTURE AM
SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSE (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remaining in 2021 | $ 95,991 | |
2022 | 383,961 | |
2023 | 377,350 | |
2024 | 278,125 | |
2025 | 129,261 | |
Thereafter | 276,440 | |
Total | $ 1,541,128 | $ 1,826,915 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 287,970 | $ 312,717 |
SCHEDULE OF LEASE COST (Details
SCHEDULE OF LEASE COST (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases | ||||
Operating lease cost | $ 396,937 | $ 395,188 | $ 1,189,481 | $ 1,184,302 |
Amortization of right-of-use assets | 45,912 | 47,012 | 137,736 | 142,134 |
Interest on lease liabilities | 8,371 | 10,585 | 26,792 | 33,416 |
Total lease cost | $ 451,220 | $ 452,785 | $ 1,354,009 | $ 1,359,852 |
SCHEDULE OF OTHER INFORMATION R
SCHEDULE OF OTHER INFORMATION RELATED TO LEASES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases | ||||
Operating cash flows used for operating leases | $ 375,911 | $ 375,911 | $ 1,127,733 | $ 1,124,706 |
Financing cash flows used for financing leases | 52,427 | 53,577 | 157,281 | 161,881 |
Assets obtained in exchange for operating lease liabilities | ||||
Assets obtained in exchange for finance lease liabilities | $ 75,739 | |||
Weighted average remaining lease term: operating leases | 9 years | 9 years | 9 years | 9 years |
Weighted average remaining lease term: finance leases | 4 years 4 months 24 days | 5 years | 4 years 4 months 24 days | 5 years |
Weighted average discount rate: operating leases | 5.59% | 5.54% | 5.59% | 5.54% |
Weighted average discount rate: finance leases | 5.16% | 5.16% | 5.16% | 5.16% |
SCHEDULE OF FUTURE MINIMUM LEAS
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS REQUIRED UNDER OPERATING AND FINANCING LEASE OBLIGATIONS (Details) | Sep. 30, 2021USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
Operating Leases Remainder of 2021 | $ 280,335 |
Operating Leases 2022 | 967,827 |
Operating Leases 2023 | 878,807 |
Operating Leases 2024 | 870,000 |
Operating Leases 2025 | 870,000 |
Operating Leases Thereafter | 4,422,500 |
Operating Leases Total undiscounted lease liabilities | 8,289,469 |
Operating Leases Less: imputed interest | (1,782,210) |
Operating lease, net lease liabilities | 6,507,259 |
Finance Lease, Liability, Payment, Due [Abstract] | |
Finance Leases Remainder of 2021 | 69,972 |
Finance Leases 2022 | 139,882 |
Finance Leases 2023 | 139,080 |
Finance Leases 2024 | 139,080 |
Finance Leases 2025 | 139,080 |
Finance Leases Thereafter | 68,395 |
Finance Leases Total undiscounted lease liabilities | 695,489 |
Finance Leases Less: imputed interest | (75,884) |
Finance lease, net lease liabilities | 619,605 |
Remainder of 2021 | 350,307 |
2022 | 1,107,709 |
2023 | 1,017,887 |
2024 | 1,009,080 |
2025 | 1,009,080 |
Thereafter | 4,490,895 |
Total undiscounted lease liabilities | 8,984,958 |
Less: imputed interest | (1,858,094) |
Net lease liabilities | $ 7,126,864 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Leases | ||
Lease expiration description | These leases expire at various dates through 2024 with options to extend to 2031 | |
Lease termination | $ 5,000 | |
Sublease income | $ 110,000 | $ 81,000 |
SCHEDULE OF LONG-TERM DEBT (Det
SCHEDULE OF LONG-TERM DEBT (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Shareholder, convertible and contingently convertible notes | $ 1,241,895 | $ 951,895 |
Accrued interest | 131,485 | 94,164 |
Total shareholder notes and accrued interest | 1,373,380 | 1,046,059 |
Less: current maturities | (1,373,380) | (1,046,059) |
Total long-term debt |
SCHEDULE OF RELATED PARTY DEBT
SCHEDULE OF RELATED PARTY DEBT (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Short-term Debt [Line Items] | ||
Long term debt, current | $ 4,211,934 | $ 3,572,934 |
Accrued interest | 334,021 | 189,394 |
Debt discount | (43,333) | (4,667) |
Less: current maturities | (332,000) | (1,537,000) |
Long term debt | 3,879,934 | 2,035,934 |
Rotman Family Convertible Notes [Member] | ||
Short-term Debt [Line Items] | ||
Long term debt, current | 1,967,737 | 1,832,707 |
Debt discount | (43,333) | (4,667) |
Rotman Family Non Convertible Notes [Member] | ||
Short-term Debt [Line Items] | ||
Long term debt, current | $ 1,953,509 | $ 1,555,500 |
SCHEDULE OF NOTES PAYABLE (Deta
SCHEDULE OF NOTES PAYABLE (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Short-term Debt [Line Items] | ||
Principal Amount | $ 4,211,934 | $ 3,572,934 |
Debt Discount | (43,333) | (4,667) |
Rotman Family Convertible Notes [Member] | ||
Short-term Debt [Line Items] | ||
Principal Amount | 1,967,737 | 1,832,707 |
Carrying Amount | 2,179,814 | 1,970,252 |
Debt Discount | (43,333) | (4,667) |
Notes payable | 2,136,481 | 1,965,585 |
Rotman Family Non Convertible Notes [Member] | ||
Short-term Debt [Line Items] | ||
Principal Amount | 1,953,509 | 1,555,500 |
Carrying Amount | $ 2,075,453 | 1,607,349 |
Steven Rotman [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | the maturity date of advances made in 2020 has been extended to December 2022. | |
Principal Amount | $ 398,009 | |
Steven Rotman [Member] | Rotman Family Convertible Notes One [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 8.00% | |
Note payable maturity date, description | July 2024 | |
Issue Date | Jul. 18, 2019 | |
Principal Amount | $ 105,000 | |
Carrying Amount | $ 123,900 | 117,600 |
Steven Rotman [Member] | Rotman Family Convertible Notes Two [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | July 2027 | |
Issue Date | Jul. 18, 2019 | |
Principal Amount | $ 1,102,500 | |
Carrying Amount | $ 1,224,234 | 1,182,890 |
Steven Rotman [Member] | Rotman Family Convertible Notes Three [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | December 2021 | |
Issue Date | Dec. 19, 2019 | |
Principal Amount | $ 100,000 | |
Carrying Amount | $ 108,958 | 105,207 |
Steven Rotman [Member] | Rotman Family Convertible Notes Four [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | February 2022 | |
Issue Date | Feb. 2, 2020 | |
Principal Amount | $ 50,000 | |
Carrying Amount | $ 53,958 | 52,083 |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes One [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | July 2027 | |
Issue Date | Jul. 18, 2019 | |
Principal Amount | $ 367,500 | |
Carrying Amount | $ 408,078 | 394,297 |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes Three [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | December 2022 | |
Issue Date | Aug. 24, 2020 | |
Principal Amount | $ 75,000 | |
Carrying Amount | $ 79,135 | 76,323 |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes Four [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | December 2022 | |
Issue Date | Sep. 1, 2020 | |
Principal Amount | $ 100,000 | |
Carrying Amount | $ 105,403 | 101,653 |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes Five [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | December 2022 | |
Issue Date | Sep. 8, 2020 | |
Principal Amount | $ 145,000 | |
Carrying Amount | $ 152,693 | 147,256 |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes Six [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | December 2022 | |
Issue Date | Sep. 15, 2020 | |
Principal Amount | $ 200,000 | |
Carrying Amount | $ 210,417 | 202,917 |
Steven Rotman [Member] | Rotman Family Nonconvertible Seven Notes [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | December 2022 | |
Issue Date | Sep. 21, 2020 | |
Principal Amount | $ 75,000 | |
Carrying Amount | $ 78,844 | 76,031 |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes Eight [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | December 2022 | |
Issue Date | Oct. 2, 2020 | |
Principal Amount | $ 50,000 | |
Carrying Amount | $ 52,500 | 50,625 |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes Nine [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | December 2022 | |
Issue Date | Oct. 8, 2020 | |
Principal Amount | $ 40,000 | |
Carrying Amount | $ 42,000 | 40,500 |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes Ten [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | December 2022 | |
Issue Date | Oct. 15, 2020 | |
Principal Amount | $ 48,000 | |
Carrying Amount | $ 50,400 | 48,600 |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes Eleven [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | December 2022 | |
Issue Date | Oct. 20, 2020 | |
Principal Amount | $ 50,000 | |
Carrying Amount | $ 52,500 | 50,625 |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes Twelve [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | December 2022 | |
Issue Date | Nov. 2, 2020 | |
Principal Amount | $ 70,000 | |
Carrying Amount | $ 73,500 | 70,875 |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes Thirteen [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | December 2022 | |
Issue Date | Nov. 13, 2020 | |
Principal Amount | $ 35,000 | |
Carrying Amount | $ 36,750 | 35,438 |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes Fourteen [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | December 2022 | |
Issue Date | Nov. 18, 2020 | |
Principal Amount | $ 35,000 | |
Carrying Amount | $ 36,750 | 35,438 |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes Fifteen [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | December 2022 | |
Issue Date | Nov. 20, 2020 | |
Principal Amount | $ 65,000 | |
Carrying Amount | $ 68,250 | 65,813 |
Steven Rotman [Member] | Rotman Family Nonconvertible Sixteen Notes [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | December 2022 | |
Issue Date | Dec. 22, 2020 | |
Principal Amount | $ 60,000 | |
Carrying Amount | $ 63,000 | 60,750 |
Steven Rotman [Member] | Rotman Family Nonconvertible Seventeen Notes [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | March 2023 | |
Issue Date | Jan. 21, 2021 | |
Principal Amount | $ 35,000 | |
Carrying Amount | $ 36,215 | |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes Eighteen [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | March 2023 | |
Issue Date | Jan. 27, 2021 | |
Principal Amount | $ 40,000 | |
Carrying Amount | $ 41,356 | |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes Nineteen [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | March 2023 | |
Issue Date | Feb. 3, 2021 | |
Principal Amount | $ 50,000 | |
Carrying Amount | $ 51,646 | |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes Twenty [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | March 2023 | |
Issue Date | Feb. 26, 2021 | |
Principal Amount | $ 100,000 | |
Carrying Amount | $ 103,000 | |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes Twenty One [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | March 2023 | |
Issue Date | Mar. 19, 2021 | |
Principal Amount | $ 100,000 | |
Carrying Amount | $ 102,681 | |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes Twenty Two [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | March 2023 | |
Issue Date | Mar. 25, 2021 | |
Principal Amount | $ 70,000 | |
Carrying Amount | $ 71,818 | |
Steven Rotman [Member] | Rotman Family Nonconvertible Notes Twenty Three [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | June 2023 | |
Issue Date | Jun. 2, 2021 | |
Principal Amount | $ 3,009 | |
Carrying Amount | $ 3,059 | |
Gregory Rotman [Member] | Rotman Family Convertible Notes One [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 8.00% | |
Note payable maturity date, description | July 2024 | |
Issue Date | Jul. 18, 2019 | |
Principal Amount | $ 55,207 | |
Carrying Amount | $ 65,160 | 61,847 |
Gregory Rotman [Member] | Rotman Family Convertible Notes Two [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | June 2023 | |
Issue Date | Jun. 3, 2021 | |
Principal Amount | $ 130,030 | |
Carrying Amount | $ 132,197 | |
Bernard Rotman [Member] | Rotman Family Convertible Notes One [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | July 2023 | |
Issue Date | Jul. 18, 2019 | |
Principal Amount | $ 420,000 | |
Carrying Amount | $ 466,375 | 450,625 |
Bernard Rotman [Member] | Rotman Family Nonconvertible Notes Two [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | July 2023 | |
Issue Date | Jul. 18, 2019 | |
Principal Amount | $ 140,000 | |
Carrying Amount | $ 155,458 | 150,208 |
Jamie Rotman [Member] | Rotman Family Convertible Notes One [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, Interest rate | 5.00% | |
Note payable maturity date, description | August 2023 | |
Issue Date | Aug. 17, 2021 | |
Principal Amount | $ 5,000 | |
Carrying Amount | $ 5,032 |
SCHEDULE OF MATURITIES OF NOTES
SCHEDULE OF MATURITIES OF NOTES PAYABLE (Details) | Sep. 30, 2021USD ($) |
Debt Disclosure [Abstract] | |
Remainder of 2021 | $ 270,000 |
2022 | 1,223,000 |
2023 | 1,094,000 |
2024 | 223,000 |
2025 | 36,000 |
Thereafter | 1,365,934 |
Long term debt | $ 4,211,934 |
NOTES PAYABLE AND LOAN FACILI_3
NOTES PAYABLE AND LOAN FACILITY (Details Narrative) | Aug. 17, 2021USD ($)$ / shares | Jun. 03, 2021USD ($)$ / shares | Feb. 02, 2021USD ($) | Sep. 30, 2021USD ($)$ / shares | Dec. 31, 2018USD ($) | Apr. 16, 2021USD ($) | Dec. 31, 2020USD ($) | Nov. 30, 2020USD ($) | May 29, 2020USD ($) | Apr. 16, 2020USD ($) | Dec. 31, 2019USD ($) |
Line of Credit Facility [Line Items] | |||||||||||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 2,585,000 | ||||||||||
Accounts payable | 4,517,282 | $ 4,830,143 | |||||||||
Debt face amount | $ 4,211,934 | 3,572,934 | |||||||||
Conversion price | $ / shares | $ 0.016 | ||||||||||
Derivative liabilities | $ 1,833,100 | 1,766,700 | $ 1,499,800 | ||||||||
Contingently Convertible Notes Payable [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt face amount | $ 335,000 | ||||||||||
Debt instrument, maturity description | The Notes mature one year from issuance but may be extended one (1) additional year by the Company. | ||||||||||
Debt closing discount rate, percentage | 0.50 | ||||||||||
Debt, outstanding amount | 338,195 | 338,195 | |||||||||
Convertible Promissory Notes [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt face amount | 290,000 | $ 613,700 | |||||||||
Debt beneficial conversion feature | 90,000 | ||||||||||
Shareholder Contingently Convertible Notes Payable [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Derivative liabilities | 639,100 | 491,700 | |||||||||
Rotman Family Convertible Notes [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt face amount | 1,967,737 | 1,832,707 | |||||||||
Debt, outstanding amount | 2,179,814 | 1,970,252 | |||||||||
Derivative liabilities | $ 1,194,000 | $ 1,275,000 | |||||||||
Rotmans Furniture [Member] | Paycheck Protection Program [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Loan received | $ 1,402,900 | ||||||||||
Paycheck Protection Program [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt face amount | $ 1,402,900 | ||||||||||
Rotman Family Convertible Notes [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt instrument, Interest rate | 5.00% | ||||||||||
Conversion price | $ / shares | $ 0.016 | ||||||||||
Debt beneficial conversion feature | $ 2,000 | ||||||||||
Convertible debt | $ 5,000 | ||||||||||
Rotman Family Convertible Notes [Member] | Convertible Promissory Notes [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt instrument, maturity description | The note matures two years from issuance. | ||||||||||
Debt conversion percentage | 50.00% | ||||||||||
Conversion price | $ / shares | $ 0.165 | ||||||||||
Debt discount percentage | 50.00% | ||||||||||
Convertible debt | $ 130,030 | ||||||||||
Minimum [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Accounts payable | $ 649,000 | ||||||||||
Minimum [Member] | Convertible Promissory Notes [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt conversion percentage | 35.00% | ||||||||||
Minimum [Member] | Rotman Family Convertible Notes [Member] | Convertible Promissory Notes [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt instrument, Interest rate | 5.00% | ||||||||||
Maximum [Member] | Convertible Promissory Notes [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt conversion percentage | 50.00% | ||||||||||
Maximum [Member] | Rotman Family Convertible Notes [Member] | Convertible Promissory Notes [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt instrument, Interest rate | 8.00% | ||||||||||
United Community Bank [Member] | Paycheck Protection Program [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt face amount | $ 1,402,900 | ||||||||||
Debt instrument, Interest rate | 1.00% | ||||||||||
Stevenand Gregory Rotman [Member] | Rotman Family Convertible Notes [Member] | Convertible Promissory Notes [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt discount percentage | 50.00% | ||||||||||
Steven Rotman [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt face amount | $ 398,009 | ||||||||||
Debt instrument, Interest rate | 5.00% | ||||||||||
Debt instrument, maturity description | the maturity date of advances made in 2020 has been extended to December 2022. | ||||||||||
Fidelity Co-Operative Bank [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Revolving line of credit | $ 125,000 | ||||||||||
Cash deposit | $ 125,000 | ||||||||||
Fidelity Bank [Member] | Other Vendors [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 2,300,000 |
SCHEDULE OF DERIVATIVE LIABILIT
SCHEDULE OF DERIVATIVE LIABILITIES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||
Balance, beginning of the period | $ 1,766,700 | $ 1,499,800 | $ 1,499,800 | ||
Initial measurement of liabilities | 65,000 | 28,000 | |||
Change in fair value | $ 88,200 | $ (143,000) | 1,400 | $ 336,900 | 238,900 |
Balance, end of the period | $ 1,833,100 | $ 1,833,100 | $ 1,766,700 |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||
Derivative Liability, Current | $ 1,833,100 | $ 1,833,100 | $ 1,766,700 | ||
Change in fair value | $ 88,200 | $ (143,000) | $ 1,400 | $ 336,900 | $ 238,900 |
STOCKHOLDERS_ DEFICIT (Details
STOCKHOLDERS’ DEFICIT (Details Narrative) - USD ($) | May 02, 2013 | Sep. 30, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | |||
Preferred stock, shares outstanding | 8,698 | 13,698 | |
Commonstock and Warrants [Member] | |||
Class of Stock [Line Items] | |||
Number of shares of common stock | 1,767,945 | ||
Conversion of stock shares issued | 5,000 | ||
Principal and interest of conversion shares | $ 88,397 | ||
Equity Purchase Agreements [Member] | |||
Class of Stock [Line Items] | |||
Number of shares of common stock | 2,533,334 | ||
Proceeds from issuance of common stock | $ 38,000 | ||
Stock Subscription Agreement [Member] | |||
Class of Stock [Line Items] | |||
Common stock subscription received | $ 270,000 | ||
Stock issued under subscription agreement | 18,200,001 | ||
Holder [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock, shares outstanding | 8,698 | 13,698 | |
Preferred stock, undeclared dividends | $ 72,000 | $ 101,000 | |
Debt converted into common shares | 3,186,730 | 4,801,840 | |
10% Series A Cumulative Convertible Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock, shares in private placement offering | 200,000 | ||
Number of sale of shares | 200,000 | ||
Sale of stock price per share | $ 10 | ||
Number of sale of shares, value | $ 2,000,000 | ||
Preferred stock, dividend rate | 10.00% | ||
Conversion price per share | $ 0.075 | ||
Conversion price lowered | $ 0.05 | ||
Number of shares of common stock | 25,000 |
SCHEDULE OF REVENUES (Details)
SCHEDULE OF REVENUES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 4,066,597 | $ 5,544,563 | $ 23,150,720 | $ 13,865,707 |
Net Sales, percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Case Goods [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 1,056,796 | $ 2,014,122 | $ 6,249,339 | $ 5,317,376 |
Net Sales, percentage | 26.00% | 36.30% | 27.10% | 38.30% |
Case Goods [Member] | Bedroom Furniture [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 398,807 | $ 723,529 | $ 1,725,588 | $ 1,879,831 |
Net Sales, percentage | 9.80% | 13.00% | 7.50% | 13.50% |
Case Goods [Member] | Dining Room Furniture [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 235,945 | $ 309,429 | $ 1,337,503 | $ 1,050,491 |
Net Sales, percentage | 5.80% | 5.60% | 5.80% | 7.60% |
Case Goods [Member] | Occasional [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 422,044 | $ 981,164 | $ 3,186,248 | $ 2,387,054 |
Net Sales, percentage | 10.40% | 17.70% | 13.80% | 17.20% |
Upholstery [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 1,627,212 | $ 1,582,989 | $ 8,200,995 | $ 3,850,867 |
Net Sales, percentage | 40.00% | 28.60% | 35.40% | 27.80% |
Mattresses and Toppers [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 847,997 | $ 899,693 | $ 3,681,848 | $ 2,291,156 |
Net Sales, percentage | 20.90% | 16.20% | 15.90% | 16.50% |
Broadloom, Flooring and Rugs [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 143,618 | $ 464,408 | $ 1,996,618 | $ 970,593 |
Net Sales, percentage | 3.50% | 8.40% | 8.60% | 7.00% |
Warranty [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 142,709 | $ 119,329 | $ 589,729 | $ 400,789 |
Net Sales, percentage | 3.50% | 2.20% | 2.50% | 2.90% |
Air Purification Units [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 192,755 | $ 29,309 | $ 1,783,965 | $ 222,133 |
Net Sales, percentage | 4.70% | 0.50% | 7.70% | 1.60% |
Accessories and Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 55,510 | $ 434,713 | $ 648,226 | $ 812,793 |
Net Sales, percentage | 1.40% | 7.80% | 2.80% | 5.90% |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Granted | 0 | 0 |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Outstanding, Beginning balance | 27,874,938 | |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 0.19 | |
Weighted Average Remaining Contractual Life (Years), Outstanding, Beginning balance | 2 years 5 months 19 days | |
Number of Shares, Exercisable, Beginning balance | 27,124,938 | |
Weighted Average Exercise Price, Exercisable, Beginning balance | $ 0.19 | |
Weighted Average Remaining Contractual Life (Years), Exercisable, Beginning balance | 2 years 7 months 2 days | |
Number of Shares, Granted | ||
Weighted Average Exercise Price, Granted | ||
Number of Shares, Exercised | ||
Weighted Average Exercise Price, Exercised | ||
Number of Shares, Forfeited | (750,000) | |
Weighted Average Exercise Price, Forfeited | $ 0.57 | |
Number of Shares, Outstanding, Ending balance | 27,124,938 | |
Weighted Average Exercise Price, Outstanding, Ending balance | $ 0.19 | |
Weighted Average Remaining Contractual Life (Years), Outstanding, Ending balance | 2 years 8 months 1 day | |
Number of Shares, Exercisable, Ending balance | 26,749,938 | |
Weighted Average Exercise Price, Exercisable, Ending balance | $ 0.20 | |
Weighted Average Remaining Contractual Life (Years), Exercisable, Ending balance | 2 years 8 months 1 day |
SCHEDULE OF WARRANT ACTIVITY (D
SCHEDULE OF WARRANT ACTIVITY (Details) - Stock Warrants [Member] | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares, Outstanding, Beginning balance | shares | 14,205,912 |
Weighted Average Fair Value, Outstanding, Beginning balance | $ | |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 0.08 |
Weighted Average Remaining Contractual Life (Years), Outstanding, Beginning balance | 2 years 6 months 10 days |
Number of Shares, Granted | shares | |
Weighted Average Fair Value, Granted | |
Weighted Average Exercise Price, Granted | |
Number of Shares, Exercised | shares | |
Weighted Average Fair Value, Exercised | |
Weighted Average Exercise Price, Exercised | |
Number of Shares, Forfeited | shares | (3,713,180) |
Weighted Average Fair Value, Forfeited | |
Weighted Average Exercise Price, Forfeited | $ 0.22 |
Number of Shares, Expired | shares | |
Weighted Average Fair Value, Expired | |
Weighted Average Exercise Price, Expired | |
Number of Shares, Outstanding, Ending balance | shares | 10,492,732 |
Weighted Average Fair Value, Outstanding, Ending balance | $ | |
Weighted Average Exercise Price, Outstanding, Ending balance | $ 0.08 |
Weighted Average Remaining Contractual Life (Years), Outstanding, Ending balance | 2 years 7 months 13 days |
Number of Shares, Exercisable, Ending balance | shares | 10,492,732 |
Weighted Average Fair Value, Exercisable, Ending balance | $ | |
Weighted Average Exercise Price, Exercisable, Ending balance | $ 0.08 |
Weighted Average Remaining Contractual Life (Years), Exercisable, Ending balance | 2 years 7 months 13 days |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Apr. 30, 2009 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2014 | Dec. 31, 2004 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation | $ 207,382 | $ 716,161 | $ 623,501 | $ 1,024,788 | ||||
Accrued share-based compensation | $ 751,671 | $ 2,177,806 | ||||||
Expected dividend yield rate | 0.00% | |||||||
Unrecognized compensation expenses | 14,761 | $ 14,761 | ||||||
Unrecognized compensation years | 3 years | |||||||
Number of options granted | 0 | 0 | ||||||
Aggregate intrinsic value, outstanding | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Stock Option Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share based arrangement authorized shares | 4,000,000 | |||||||
Employee And Board [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation | $ 12,298 | $ 16,957 | ||||||
Board of Directors [Member] | Stock Option Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share based arrangement additional authorized shares | 10,000,000 | 50,000,000 | 5,000,000 | |||||
Number of shares available for issuance | 2,251,729 | 2,251,729 | ||||||
Share based arrangement vested period | 4 years | |||||||
Share based arrangement exercisable period | 10 years |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Feb. 28, 2021 | Jul. 31, 2020 | Jul. 22, 2019 | May 31, 2019 | Jul. 31, 2020 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2019 | Aug. 09, 2021 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | |||||||||||
Stock subscription payable | $ 173,000 | ||||||||||
Stock subscription payable, shares | 7,117,000 | ||||||||||
[custom:ReimbursableExpensesPayable-0] | $ 105,000 | $ 105,000 | |||||||||
Common stock issued for past services | 1,294,175,560 | 1,294,175,560 | 1,199,931,717 | ||||||||
Common stock subscriptions, shares | 10,000,000 | ||||||||||
Common stock subscriptions | $ 291,000 | $ 291,000 | |||||||||
Number of shares of common stock, value | $ 13,000 | $ 25,000 | |||||||||
Fluid Energy Conversion Inc. [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Stock subscription payable | $ 103,750 | ||||||||||
Stock subscription payable, shares | 2,500,000 | ||||||||||
Number of shares of common stock, shares | 2,500,000 | ||||||||||
Related Party Services Expensed [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Stock subscription payable | $ 42,000 | ||||||||||
Stock subscription payable, shares | 850,000 | ||||||||||
Stock Subscription Payable [Member] | Steven Rotman [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Common stock issued for past services | 29,205,927 | ||||||||||
Per Steven Rotman Employment Agreement [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Repayments of Related Party Debt | $ 5,000 | ||||||||||
Discount rate | 50.00% | ||||||||||
Per Steven Rotman Employment Agreement [Member] | Per Year [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Repayments of Related Party Debt | $ 125,000 | ||||||||||
Per Steven Rotman Employment Agreement [Member] | Per Month [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Repayments of Related Party Debt | $ 10,417 | ||||||||||
Employment Agreement [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Costs and Expenses, Related Party | $ 317,000 | ||||||||||
Stock Subscription Agreement [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Stock subscription payable | $ 100,000 | ||||||||||
Stock subscription payable, shares | 6,666,667 | ||||||||||
Stock Subscription Agreement [Member] | Blue Oar Consulting, Inc. [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Stock subscription payable | $ 70,000 | ||||||||||
Stock subscription payable, shares | 4,666,667 | ||||||||||
Blue Oar's Consulting Agreement [Member] | Blue Oar Consulting, Inc. [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Discount rate | 50.00% | 50.00% | |||||||||
Stock subscription payable | $ 214,000 | ||||||||||
Stock subscription payable, shares | 8,786,000 | ||||||||||
Number of shares of common stock, value | $ 180,000 | $ 349,000 | |||||||||
Number of shares of common stock, shares | 11,364,904 | ||||||||||
Gain (Loss) on settlement of related party | $ 155,265 | ||||||||||
Related party accounts payable | $ 135,000 | ||||||||||
Blue Oar's Consulting Agreement [Member] | Per Month [Member] | Blue Oar Consulting, Inc. [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Related party cash | 15,000 | ||||||||||
Related party cash paid in shares | $ 12,500 |
SUMMARY ACTIVITY OF STOCK SUBSC
SUMMARY ACTIVITY OF STOCK SUBSCRIPTION PAYABLE (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Stock subscription payable, Beginning balance | $ 2,589,556 | $ 1,150,125 |
Stock subscription payable shares, Beginning balance | 99,431,356 | 31,439,401 |
Stock subscription payable, Additions, net | $ 683,954 | $ 1,640,631 |
Stock subscription payable shares, Additions, net | 29,688,661 | 71,991,955 |
Stock subscription payable, Issuances, net | $ (2,148,089) | $ (201,200) |
Stock subscription payable shares, Issuances, net | (81,110,994) | (4,000,000) |
Stock subscription payable, Ending balance | $ 1,125,421 | $ 2,589,556 |
Stock subscription payable shares, Ending balance | 48,009,023 | 99,431,356 |
COMMITMENTS (Details Narrative)
COMMITMENTS (Details Narrative) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | |||
Stock subscription payable | $ 1,125,421 | $ 2,589,556 | $ 1,150,125 |
MAJOR CUSTOMERS AND VENDORS (De
MAJOR CUSTOMERS AND VENDORS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Product Information [Line Items] | ||||
Revenues | $ 4,066,597 | $ 5,544,563 | $ 23,150,720 | $ 13,865,707 |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | One Major Vendor [Member] | ||||
Product Information [Line Items] | ||||
Concentration of risk, percentage | 17.00% | |||
Revenues | $ 167,000 | $ 0 |
SCHEDULE OF PROVISION FOR INCOM
SCHEDULE OF PROVISION FOR INCOME TAXES (Details) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory income tax rate | (21.00%) | (21.00%) |
Change in valuation allowance on net operating loss carryforwards | 21.00% | 21.00% |
Effective income tax rate | 0.00% | 0.00% |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
NOL carryforwards | $ 7,275,000 | $ 6,625,000 |
Less valuation allowance | (7,275,000) | (6,625,000) |
Deferred tax assets |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Effective income tax rate expiration date description | The provision (benefit) for income taxes for the three months ended September 30, 2021 and 2021 assumes a 21% effective tax rate for federal income taxes. |
Net operating loss carryforward | $ 34,600,000 |
Rotmans Furniture [Member] | Federal [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforward | $ 4,200,000 |
Rotmans Furniture [Member] | State [Member] | |
Operating Loss Carryforwards [Line Items] | |
Effective income tax rate expiration date description | expires beginning in 2022 |
Net operating loss carryforward | $ 3,300,000 |
Georgia [Member] | |
Operating Loss Carryforwards [Line Items] | |
Effective income tax rate expiration date description | expires beginning in 2023 |
Net operating loss carryforward | $ 18,400,000 |
Massachusetts [Member] | |
Operating Loss Carryforwards [Line Items] | |
Effective income tax rate expiration date description | expires beginning in 2023 |
Net operating loss carryforward | $ 15,900,000 |
Expires Beginning in 2024 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforward | 18,400,000 |
Carried Forward Indefinitely [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforward | 16,200,000 |
Carried Forward Indefinitely [Member] | Rotmans Furniture [Member] | Federal [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforward | 3,490,000 |
Expires Beginning In 2029 [Member] | Rotmans Furniture [Member] | Federal [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforward | $ 710,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Nov. 30, 2021 | Oct. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Subsequent Event [Line Items] | ||||
Sale of equipment | $ 311,300 | |||
Subsequent Event [Member] | Equipment [Member] | ||||
Subsequent Event [Line Items] | ||||
Payments to acquire equipment on lease | $ 59,000 | |||
Sale of equipment | $ 34,000 |