Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 09, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Celsius Holdings, Inc. | |
Entity Central Index Key | 0001341766 | |
Document Type | 10-Q | |
Trading Symbol | CELH | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 57,307,853 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 2,762,813 | $ 7,743,181 |
Accounts receivable-net | 12,154,448 | 12,980,396 |
Note receivable-current | 1,224,529 | |
Unbilled royalty revenue | 89,587 | |
Inventories, net | 13,556,512 | 11,482,701 |
Prepaid expenses and other current assets | 2,832,174 | 2,299,375 |
Total current assets | 32,620,063 | 34,505,653 |
Note receivable-long term | 11,020,766 | |
Operating lease-right of use asset | 223,991 | |
Property and equipment-net | 103,093 | 121,854 |
Total Assets | 43,967,913 | 34,627,507 |
Current liabilities: | ||
Accounts payable and accrued expenses | 9,027,059 | 14,845,211 |
Other current liabilities | 65,395 | 19,933 |
Operating Lease Liability-current | 139,042 | |
Total current liabilities | 9,231,496 | 14,865,144 |
Long-term liabilities: | ||
Line of credit note payable-related party-net | 4,850,839 | 3,500,000 |
Convertible note payables -related party-net | 4,527,815 | 4,459,381 |
Operating Lease Liability-Long Term | 87,592 | |
Total Liabilities | 18,697,742 | 22,824,525 |
Stockholders' Equity: | ||
Common stock, $0.001 par value; 75,000,000 shares authorized, 57,198,365 and 57,002,508 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 57,198 | 57,003 |
Additional paid-in capital | 86,703,402 | 85,153,667 |
Accumulated other comprehensive Income/(Loss) | 233,668 | (26,997) |
Accumulated deficit | (61,724,097) | (73,380,691) |
Total Stockholders' Equity | 25,270,171 | 11,802,982 |
Total Liabilities and Stockholders' Equity | $ 43,967,913 | $ 34,627,507 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 75,000,000 | 75,000,000 |
Common stock, issued | 57,198,365 | 57,002,508 |
Common stock, outstanding | 57,198,365 | 57,002,508 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Revenue | $ 14,485,650 | $ 12,059,976 |
Cost of revenue | 8,764,592 | 7,296,295 |
Gross profit | 5,721,058 | 4,763,681 |
Selling and marketing expenses | 3,601,003 | 5,599,271 |
General and administrative expenses | 2,622,102 | 2,002,655 |
Total operating expense | 6,223,105 | 7,601,926 |
Loss from operations | (502,047) | (2,838,245) |
Other Income (Expense): | ||
Interest income/(expense)-net | (28,632) | (38,259) |
Amortization of Discount on Notes Payable | (85,940) | |
Gain on Investment repayment from China | 12,273,213 | |
Total Other Income/(Expense) | 12,158,641 | (38,259) |
Net Income/(Loss) | 11,656,594 | (2,876,504) |
Preferred stock dividend | (82,691) | |
Net Income/(Loss) available to common stockholders | $ 11,656,594 | $ (2,959,195) |
Income/(Loss) per share: | ||
Basic | $ 0.2 | $ (0.06) |
Diluted | $ 0.19 | $ (0.06) |
Weighted average shares outstanding: | ||
Basic | 57,155,445 | 47,449,553 |
Diluted | 61,687,409 | 47,449,553 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income/(Loss) (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net Loss available to common stockholders, as reported | $ 11,656,594 | $ (2,959,195) |
Other comprehensive income (loss): | ||
Unrealized foreign currency translation income (loss) | 260,665 | (53,504) |
Comprehensive income | $ 11,917,259 | $ (3,012,699) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Balances at beginning at Dec. 31, 2017 | $ 7 | $ 45,702 | $ 79,101,824 | $ (39,378) | $ (61,960,910) | $ 17,147,245 |
Balances at beginning (in shares) at Dec. 31, 2017 | 6,760 | 45,701,593 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock in exchange of preferred stock | $ (4) | $ 4,651 | (5,251) | (604) | ||
Issuance of common stock in exchange of preferred stock (in shares) | (4,000) | 4,651,163 | ||||
Stock option expense | 770,862 | 770,862 | ||||
Issuance of common stock pursuant to exercise of stock options - Cashless | $ 306 | (306) | ||||
Issuance of common stock pursuant to exercise of stock options - Cashless (in shares) | 306,340 | |||||
Issuance of common stock pursuant to exercise of stock options - Cash | $ 298 | 142,329 | 142,627 | |||
Issuance of common stock pursuant to exercise of stock options - Cash (in shares) | 297,773 | |||||
Preferred stock dividend payable | (82,691) | (82,691) | ||||
Foreign currency translation income (loss) | (53,504) | (53,504) | ||||
Net income (loss) | (2,876,504) | (2,876,504) | ||||
Balances at ending at Mar. 31, 2018 | $ 3 | $ 50,957 | 80,009,458 | (92,882) | (64,920,105) | 15,047,431 |
Balances at ending (in shares) at Mar. 31, 2018 | 2,760 | 50,956,869 | ||||
Balances at beginning at Dec. 31, 2018 | $ 0 | $ 57,003 | 85,153,667 | (26,997) | (73,380,691) | 11,802,982 |
Balances at beginning (in shares) at Dec. 31, 2018 | 0 | 57,002,508 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock option expense | 1,358,503 | 1,358,503 | ||||
Issuance of common stock pursuant to exercise of stock options - Cashless | $ 115 | (115) | ||||
Issuance of common stock pursuant to exercise of stock options - Cashless (in shares) | 115,107 | |||||
Issuance of common stock pursuant to exercise of stock options - Cash | $ 80 | 24,680 | 24,760 | |||
Issuance of common stock pursuant to exercise of stock options - Cash (in shares) | 80,750 | |||||
Beneficial Conversion Feature on Convertible Instruments | 166,667 | 166,667 | ||||
Preferred stock dividend payable | ||||||
Foreign currency translation income (loss) | 260,665 | 260,665 | ||||
Net income (loss) | 11,656,594 | 11,656,594 | ||||
Balances at ending at Mar. 31, 2019 | $ 0 | $ 57,198 | $ 86,703,402 | $ 233,668 | $ (61,724,097) | $ 25,270,171 |
Balances at ending (in shares) at Mar. 31, 2019 | 0 | 57,198,365 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net Income (loss) | $ 11,656,594 | $ (2,876,504) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 107,343 | 7,953 |
Stock-based compensation expense | 1,358,503 | 770,862 |
Gain on Investment repayment from China | (12,273,213) | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (2,488,198) | (2,698,222) |
Inventories net | (2,332,499) | (1,363,237) |
Prepaid expenses and other current assets | (707,984) | (1,977,614) |
Accounts payable and accrued expenses | (2,070,134) | 3,908,101 |
Accrued preferred dividends | (51,111) | |
Unbilled royalty revenue | (89,587) | |
Deposits/deferred revenue and other current liabilities | 45,463 | 4,059 |
Net cash used in operating activities | (6,793,712) | (4,275,713) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (11,717) | |
Net cash (used in) investing activities | (11,717) | |
Cash flows from financing activities: | ||
Proceeds from notes payable related party-net | 1,500,000 | |
Proceeds from exercise of stock options | 24,760 | 142,023 |
Net cash provided by financing activities | 1,524,760 | 142,023 |
Effect on exchange rate changes on cash and cash equivalents | 288,584 | (53,504) |
Net (decrease) increase in cash | (4,980,368) | (4,198,911) |
Cash at beginning of the period | 7,743,181 | 14,186,624 |
Cash at end of the period | 2,762,813 | 9,987,713 |
Cash paid during period for: | ||
Interest | 28,632 | 38,259 |
Non-cash investing and financing activities: | ||
Accrued preferred dividends | 82,691 | |
Non-Cash Items Related to China Settlement: | ||
Accounts Receivable | 3,314,146 | |
Inventory | 258,688 | |
Pre-paid expense and other current assets | 175,185 | |
Accounts payable and accrued expenses | $ 3,748,019 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Business Company Celsius Holdings The Company is engaged in the development, marketing, sale and distribution of “ functional |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation – US GAAP Commission Significant Estimates Segment Reporting Disclosed About Segments of an Enterprise and Related Information.) Our chief operating decision-maker is considered to be our Chief Executive Officer (CEO). The CEO reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance. The financial information reviewed by the CEO is identical to the information presented in the accompanying consolidated statement of operations. Therefore, the Company has determined that it operates in a single operating segment. For the three months ended March 31, 2019 and 2018 all material assets and revenues of the Company where in the United States except as disclosed in Note 2. Concentrations of Risk The Company uses single supplier relationships for its raw materials purchases and filling capacity, which potentially subjects the Company to a concentration of business risk. If these suppliers had operational problems or ceased making product available to the Company, operations could be adversely affected. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company places its cash and cash equivalents with high-quality financial institutions. At times, balances in the Company’s cash accounts may exceed the Federal Deposit Insurance Corporation limit. At March 31, 2019, the Company had approximately $2.5 million in excess of the Federal Deposit Insurance Corporation limit. For the three months ended March 31, 2019 and 2018, the Company had the following 10 percent or greater concentrations of revenue with its customers: 2019 2018 A* 17.9 % 18.0 % B* 0.1 % 11.6 % All other 82.0 % 70.4 % Total 100.0 % 100.0 % Revenues from customer A are derived from a customer located in Sweden and customer B are derived from a customer located in China. Revenues from all other customers were mainly derived in the United States. At March 31, 2019 and December 31, 2018, the Company had the following 10 percent or greater concentrations of accounts receivable with its customers: 2019 2018 A* 41.1 % 41.5 % All other 58.9 % 58.5 % Total 100.0 % 100.0 % *Receivables from customer A are derived from a customer located in Sweden. Cash Equivalents Accounts Receivable Inventories Property and Equipment Impairment of Long-Lived Assets Revenue Recognition Revenue is derived from the sale of beverages. The Company recognizes revenue when obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives the Company offers to its customers and their customers. Any discounts, slotting fees, sales incentives or similar arrangements with the customer are estimated at time of sale and deducted from revenue. Sales taxes and other similar taxes are excluded from revenue. Customer Advances Advertising Costs Research and Development Foreign Currency Translation-Chinese Yuan Renminbi — As of and for the three months ended March 31, 2019 and March 31, 2018, the exchange rates used to translate amounts in Chinese Yuan into USD for the purposes of preparing the consolidated financial statements were as follows: March 31, 2019 March 31, 2018 Exchange rate on balance sheet dates USD : CNY exchange rate 6.71 6.29 Average exchange rate for the period USD : CNY exchange rate 6.75 6.36 Fair Value of Financial Instruments Fair Value Measurements Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. Other than these noted previously, the Company did not have any other assets or liabilities measured at fair value at March 31, 2019 and December 31, 2018. Income Taxes — Accounting for Uncertain Income Tax Positions. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. The Company has adopted ASC 740-10-25 Definition of Settlement, Earnings per Share There were no other dilutive common shares equivalents, including convertible notes and warrants, as no common share equivalents had an exercise price below the ending closing price of the year. The effects of dilutive instruments have not been presented as the effects would be anti-dilutive. Share-Based Payments Cost of Sales Operating Expenses Shipping and Handling Costs Recent Accounting Pronouncements The Company adopts all applicable, new accounting pronouncements as of the specified effective dates. In June 2016, the FASB issued ASU No. 2016-13 & updated in Nov 2018 ASU 2018-19, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”), which requires the immediate recognition of management’s estimates of current and expected credit losses. ASU 2016-13 is effective for fiscal years and interim reporting periods within those years beginning after December 15, 2019. Early adoption is permitted after fiscal years beginning December 15, 2018. The Company is currently evaluating the potential impact of adopting this guidance on our financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this update modify the disclosure requirements on fair value measurements in Topic 820. The ASU is effective for the Registrants for fiscal years beginning after December 15, 2019, and interim periods therein. Early adoption is permitted. The Company is currently assessing the impact of this standard on their Financial Statements. All new accounting pronouncements issued but not yet effective are not expected to have a material impact on our results of operations, cash flows or financial position with the exception of the updated previously disclosed above, there have been no new accounting pronouncements not yet effective that have significance to our consolidated financial statements. Liquidity In addition to cash flow from operations, our primary sources of working capital have been private placements of our securities and our credit facilities with CD Financial, LLC (“CD Financial”), an affiliate of Carl DeSantis, a principal shareholder of the Company, as well as Charmnew Limited and Grieg International Limited. Charmnew Limited is an existing shareholder of record affiliated with Li Ka Shing, one of our principal shareholders. Grieg International Limited is an existing shareholder of record affiliated with Chau Hoi Shuen Solina, one of our principal shareholders. If our sales volumes do not meet our projections, expenses exceed our expectations, our plans change, we may be unable to generate enough cash flow from operations to cover our working capital requirements. In such case, we may be required to adjust our business plan, by reducing marketing, lower our working capital requirements and reduce other expenses or seek additional financing. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | 3. REVENUE The Company recognizes revenue when obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives the Company offers to its customers and their customers. Sales taxes and other similar taxes are excluded from revenue. Information about the Company’s net sales by reporting segment for the three months ended March 31, 2019 and 2018 are as follows: For the three months ended March 31, March 31, 2019 2018 North America $ 11,397,862 $ 8,096,080 Europe 2,999,664 2,506,433 Asia 52,764 1,389,277 Other 35,360 68,186 Net sales $ 14,485,650 $ 12,059,976 License Agreement In January 2019, the Company entered into a license and repayment of investment agreement with Qifeng Food Technology (Beijing) Co., Ltd (“Qifeng”). Under the agreement, Qifeng was granted the exclusive license rights to manufacture, market and commercialize Celsius branded products in China. The term of the agreement is 50 years, with annual royalty fees due from Qifeng after the end of each calendar year. The royalty fees are based on a percentage of Qifeng’s sales of Celsius branded products; however, the fees are fixed for the first five years of the agreement, totaling approximately $6.9 million, and then are subject to annual guaranteed minimums over the remaining term of the agreement. Under the agreement, the Company grants Qifeng exclusive license rights and provides ongoing support in product development, brand promotion and technical expertise. The ongoing support is integral to the exclusive license rights and, as such, both of these represent a combined, single performance obligation. The transaction price consists of the guaranteed minimums and the variable royalty fees, all of which are allocated to the single performance obligation. The Company recognizes revenue from the agreement over time because the customer simultaneously receives and consumes the benefits from the services. The Company uses the passage of time to measure progress towards satisfying its performance obligation because its efforts in providing the exclusive license rights and ongoing support occur on a generally even basis throughout the year. Total revenue recognized under the agreement was approximately $90,000 for the three months ended March 31, 2019 and is reflected in the Company’s Asia reporting segment which was determined by the minimum royalties due during first year, as per the licensing agreement. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 4. INVENTORIES Inventories consist of the following at: March 31, December 31, 2019 2018 Finished goods $ 10,775,168 $ 8,739,877 Raw Materials 2,887,471 2,817,476 Less: Inventory reserves (106,127 ) (74,652 ) Inventories-Net $ 13,556,512 $ 11,482,701 |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 3 Months Ended |
Mar. 31, 2019 | |
Prepaid Expenses And Other Current Assets | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 5. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets total $2,832,174 and $2,299,375, at March 31, 2019 and December 31, 2018, respectively, and consist mainly of prepaid advertising, prepaid insurance, prepaid slotting fees and net deposits on purchases. |
NOTE RECEIVABLE
NOTE RECEIVABLE | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE RECEIVABLE | 6. NOTE RECEIVABLE Note receivable consists of the following at: March 31, December 31, 2019 2018 Note Receivable-Current $ 1,224,529 $ - Note Receivable-Non-Current 11,020,766 - Total Note Receivable $ 12,245,295 $ - On January 1, 2019, the Company entered into a license and repayment of investment agreement with Qifeng Food Technology (Beijing) Co., Ltd (“Qifeng”). Under the agreement, Qifeng will repay the market investment Celsius has made into China to date, over a five-year period, under an unsecured, interest-bearing note receivable (“Note”). The initial outstanding principal under the Note was approximately $12.2 million, which was recorded as Other Income on the Consolidated Statements of Operations for the three months ended March 31, 2019. The amount recognized considered the net of the balances of the accounts receivable, accounts payable and accrued expenses, as well as the marketing investments that were performed in the China market. Scheduled principal payments plus accrued interest are due annually on March 31 of each year starting in 2020. The Note is recorded at amortized cost basis and accrues interest at a rate per annum equal to the weighted average of 5% of the outstanding principal up to $5 million and 2% of the outstanding principal above $5 million. For the three months ended March 31, 2019, the weighted average interest rate was 3.21% and interest income was $96,000. The Company assesses the Note for impairment periodically by evaluating whether it is probable that the Company will be unable to collect all the contractual interest and principal payments as scheduled in the Note agreement, based on historical experience about Qifeng’s ability to pay, the current economic environment and other factors. If the Note is determined to be impaired, the impairment is measured based on the present value of the expected future cash flows under the Note, discounted at the Note’s effective interest rate. At March 31, 2019, the Note was not deemed to be impaired. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
LEASES | 7. LEASES In February 2016, the FASB issued Accounting Standards Update 2016-02 (ASU 2016-02), Leases (Topic 842). ASU 2016-02 requires lessees to recognize a right-of-use (ROU) asset and lease liability in the balance sheet for all leases, including operating leases with terms of more than twelve months. The Company adopted ASU No. 2016-02, as amended, effective January 1, 2019. We recognized a ROU asset and a corresponding lease liability measured based on the present value of the future minimum lease payments utilizing our incremental borrowing rate as the basis for our computations. As of January 1, 2019, we recognized Right to use assets in the amount of $259,358 and a corresponding liability. The asset is being amortized over the life of the lease agreement. As of March 31, 2019, the value of the asset amounted to $223,991. The adoption of the guidance did not have a material impact on our Statement of Operations or Statement of Cash flows. The ROU represents our right to utilize the corresponding asset for the lease term and the related lease liability translates into an obligation to related to the lease payments. The operating lease liability as of March 31, 2019 amounted to $226,634 of which the short-term value amounted to $139,042 and the long-term portion was $87,592. Company entered into an office lease with a related party effective October 2015. The monthly rent amounts to $12,452 per month until October 2019 and then increases to $12,826 per month until the termination of the lease in October 2020. As of March 31, 2019, the remaining lease term is 19 months and the discount rate is 5%. Future annual minimum cash payments required under this operating type lease as of March 31, 2019 are as follows: Future Minimum Lease Payments 2019 $ 112,818 2020 128,259 Total Minimum Lease Payments $ 241,077 Less: Amount representing interest (14,443 ) Present value of lease liabilities $ 226,634 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 8. PROPERTY AND EQUIPMENT Property and equipment consist of the following at: March 31, December 31, 2019 2018 Furniture and equipment $ 451,576 $ 451,576 Less: accumulated depreciation (348,483 ) (329,722 ) Total $ 103,093 $ 121,854 Depreciation expense amounted to $18,761 and $7,953 during the three months ended March 31, 2019 and 2018, respectively |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 9. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consist of the following at: March 31, December 31, 2019 2018 Accounts payable $ 5,749,943 $ 5,825,446 Accrued expenses 3,277,116 9,019,765 Total $ 9,027,059 $ 14,845,211 |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Revenue And Other Current Liabilities | |
OTHER CURRENT LIABILITIES | 10. OTHER LIABILITIES Other current liabilities consist of the following at: March 31, December 31, 2019 2018 Other Liabilities $ 65,395 $ 19,933 Total $ 65,395 $ 19,933 |
NOTES PAYABLE - RELATED PARTY
NOTES PAYABLE - RELATED PARTY | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE - RELATED PARTY | 11. NOTES PAYABLE - RELATED PARTIES Line of credit convertible note payable - related parties consists of the following as of: March 31, December 31, 2019 2018 Note Payable – line of credit In July 2010, the Company entered into a line of credit note payable with a related party and major shareholder which carries interest of five percent per annum paid quarterly. The Company can borrow up to $9,500,000. The Company has pledged all its assets as security for the line of credit. The note matures in January 2020, at which time the principal amount is due. During April 2015, the Company issued $4,000,000 of convertible series D preferred series in exchange for cancellation of $4,000,000 of this line, reducing the amount to $4,500,000. During March 2018, the Company issued $1,000,000 of common stock in exchange for cancellation of $1,000,000 of this line, reducing the amount to $3,500,000. In December 2018, the company amended and restated the note payable into a convertible loan agreement continuing to carry a five percent per annum interest but payable semi-annually. As a result, of this substantial modification which was treated as a debt extinguishment, a new liability was established and a loss of $377,0418 on the extinguishment of debt was recognized. The Company can now borrow up to $5.0 million. The note matures in December 2020. In January 2019, the company increased the borrowed amount by $1,500,000. The unamortized discount of the note as of March 2019 amounted to $149,161. The balance at March 31, 2019 is convertible into 1,491,338 shares at a conversion price of $3.40 per share which was determined based on the average of the closing price for the shares during the ten (10) business days prior to the Advance Date, less a discount of 10%. Long-term portion $ 4,850,839 $ 3,500,000 March 31, December 31, 2019 2018 Convertible Note Payable -In December 2018, the Company entered into a convertible note payable with a related party and shareholder which carries interest of five percent per annum paid semi-annually. The Company can borrow up to $3.0 million. This note had an unamortized discount of $283,500 and $324,371 as of March 31, 2019 and as of December 31, 2018, respectively. The note matures in December 2020. The balance at March 31, 2019 is convertible into 1,002,553 shares at a fixed conversion price of $3.04 per share which was determined based on the average of the closing price for the shares during the ten (10) business days prior to the Advance Date, less a discount of 10%. 2,716,500 2,675,629 -In December 2018, the Company entered into a line of credit convertible note payable with a related party and shareholder which carries interest of five percent per annum paid semi-annually. The Company can borrow up to $2.0 million. This note had an unamortized discount of $188,685 and $216,248 as of March 31, 2019 and as of December 31, 2018, respectively. The note matures in December 2020. The balance at March 31, 2019 is convertible into 668,369 shares at a fixed conversion price of $3.04 per share which was determined based on the average of the closing price for the shares during the ten (10) business days prior to the Advance Date, less a discount of 10%. 1,811,315 1,783,752 Long-term portion-Net of Discount $ 4,527,815 $ 4,459,381 |
PREFERRED STOCK - RELATED PARTY
PREFERRED STOCK - RELATED PARTY | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
PREFERRED STOCK - RELATED PARTY | 12. PREFERRED STOCK – RELATED PARTY The Company entered into a securities purchase agreement with CDS Ventures of South Florida, LLC (“CDS”) and CD Financial, LLC (“CD”). CDS and CD are limited liability companies which are affiliates of Carl DeSantis, the Company’s principal shareholder. The Company issued 2,200 shares of its Series C Preferred Stock (the “Preferred C Shares”) in exchange for the conversion of a $550,000 short term loan from CDS and the conversion of $1,650,000 in indebtedness under the Company’s line of credit with CD (the “CD Line of Credit”). The Preferred C Shares are convertible into our common stock at the option of the holder thereof at a conversion price of $0.52 per share at any time until December 31, 2018, at which time they will automatically convert into shares of our common stock determined by dividing the liquidation preference of $1,000 per Preferred C Share by the conversion price then in effect. The conversion price is subject to adjustment in the event of stock dividends, stock splits and similar events. The Preferred C Shares accrue cumulative annual dividends at the rate of 6% per annum, payable by the issuance of additional Preferred C Shares. The holder of Preferred C Shares votes on an “as converted” basis, together with holders of common stock as a single class on all matters presented to shareholders for a vote, except as required by law. In April 2015, the Company issued 180 Preferred C Shares valued at $180,000 in settlement of $180,000 in accrued preferred C dividends. In October 2017, the Company issued 383 Preferred C Shares valued at $383,000 in settlement of $383,000 in accrued preferred C dividends. As of December 31, 2018, $255,903 of dividends has been accrued and converted into 256 of additional Preferred C. The Preferred C Shares matured on December 31, 2018 and were exchanged for 5,806,022 shares of Company common stock. On April 16, 2015, the Company entered into an amendment to its existing Loan and Security Agreement (the “Amendment”) with CD an affiliate of CDS Ventures and Mr. DeSantis. Pursuant to the Amendment, the outstanding principal amount of the CD note payable was reduced by $4.0 million, which amount was converted into 4,000 shares of a newly-designated Series D Preferred Stock (the “Preferred D Shares”). This related party was given a conversion price of $0.86 per common share, whereas other investors purchased common shares at $0.89 in the private placement, as discussed in note 12. The difference of $0.03 per share, which resulted in $139,535, was recorded as a dividend in accordance with ASC 470-20-35, subsequent measurement for debt with conversion and other options. The Preferred D Shares are convertible into our common stock at the option of the holder thereof at a conversion price of $0.86 per share until the earlier of the January 2, 2021 due date of our note payable with CD Financial or such earlier date as the note payable is satisfied (the “Maturity Date”). The conversion price is subject to adjustment in the event of stock dividends, stock splits and similar events. The Preferred D Shares accrue cumulative annual cash dividends at the rate of 5% per annum, payable quarterly in cash and have a liquidation preference of $1,000 per share. On the Maturity Date, the Preferred D Shares automatically convert into shares of our common stock in a number determined by dividing the $1,000 per Preferred D Share liquidation preference plus any accrued but unpaid dividends, by the conversion price then in effect. The Holder shall have the right, at its election, to require the Company to redeem all or any portion of the shares held by the holder in exchange for cash or common stock upon the occurrence of certain events which management believes are under the control of the Company. As of March 31, 2018, none of the contingent events have occurred and in accordance with ASC-480-10-25 “Distinguishing Liabilities from Equity” and Regulation S-X-Rule 5-02-27, the Company has classified these shares as permanent equity. The Preferred D Shares may also be redeemed by us at any time on or after December 31, 2017, at a redemption price equal to 104% of the liquidation preference. The holder of the Preferred D Shares votes on an “as converted” basis, together with holders of common stock as a single class on all matters presented to shareholders for a vote, except as required by law. In March 2018, the Preferred D shares were converted into 4,651,163 shares of common stock. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 13. RELATED PARTY TRANSACTIONS The Company’s office is rented from a company affiliated with CD Financial, LLC which is controlled by one of our shareholders Carl DeSantis. Currently, the lease expires on October 2020 with monthly rent of $12,452. The rental fee is commensurate with other properties available in the market. Other related party transactions are discussed in Notes 11 and 12 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | 14. STOCKHOLDERS’ EQUITY Issuance of common stock pursuant to services performed On July 19, 2018 the Company settled a legal matter that was filed in Superior Court of the State of California, Los Angeles County, by Statewide Beverage Company, Inc. (“Statewide”), a former distributor of the Company’s products. As part of the settlement the Company issued 60,000 shares of “restricted” stock, to the ten plaintiffs involved in the complaint for a total fair value of $279,600, or $4.66 per share, representing the closing stock price on the settlement date. The stock “restriction” pertains to the shareholders intention of using the shares for investment purposes only and not with a view to distribute or resell the shares or any part thereof or interest therein. However, the Stockholder’s rights allow for the selling or otherwise disposal of all or part of the shares pursuant to an exemption under the Securities Act of 1933, as amended (the Securities Act”) and applicable state securities laws or pursuant to registration of the share under such laws. Issuance of common stock pursuant to exercise of stock options During the three months ended March 31, 2019, the Company issued an aggregate of 195,857 shares of its common stock pursuant to the exercise of stock options granted under the Company’s 2015 Stock Incentive Plan. The Company received aggregate proceeds of $24,760 for 80,750 options exercised for cash, with the balance of the options having been exercised on a “cashless” basis. During the three months ended March 31, 2018, the Company issued an aggregate of 604,113 shares of its common stock pursuant to the exercise of stock options granted under the Company’s 2006 Stock Incentive Plan. The Company received aggregate proceeds of $142,627 for options exercised for cash, with the balance of the options having been exercised on a “cashless” basis. Issuance of preferred stock pursuant to private placement In March 2018, the 4,000 preferred D shares were converted into 4,651,163 shares of common stock. Refer to Note 12 for discussion on preferred stock issuances. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | 15. STOCK-BASED COMPENSATION The Company adopted an Incentive Stock Plan on January 18, 2007. This plan is intended to provide incentives which will attract and retain highly competent persons at all levels as employees of the Company, as well as independent contractors providing consulting or advisory services to the Company, by providing them opportunities to acquire the Company’s common stock or to receive monetary payments based on the value of such shares pursuant to Awards issued. While the plan terminates 10 years after the adoption date, issued options have their own schedule of termination. During 2013, the majority of the shareholders approved to increase the total available shares in the plan from 2.5 million to 3.5 million shares of common stock. During May 2014, the majority of the shareholders approved to increase the total available shares in the plan from 3.5 million to 4.25 million shares of common stock, during February 2015, the majority of the shareholders approved to increase the total available shares in the plan from 4.25 million to 4.6 million shares of common stock and during April 2015, the majority of the shareholders approved to increase the total available shares in the plan from 4.6 million to 5.1 million shares of common stock. Upon exercise, shares of new common stock are issued by the Company. The Company adopted the 2015 Stock Incentive Plan on April 30, 2015. This plan is intended to provide incentives which will attract and retain highly competent persons at all levels as employees of the Company, as well as independent contractors providing consulting or advisory services to the Company, by providing them opportunities to acquire the Company’s common stock or to receive monetary payments based on the value of such shares pursuant to Awards issued. The 2015 Plan permits the grant of options and shares for up to 5,000,000 shares. In addition, there is a provision for an annual increase of 15% to the shares included under the plan, with the shares to be added on the first day of each calendar year, beginning on January 1, 2017. As of March 31, 2019, 6,901,360 shares are available. Under the 2015 Stock Option Plan the Company has issued options to purchase approximately 5.64 million shares at an average price of $3.85 per share with a fair value of $5.97 million. For the three months ended March 31, 2019 and 2018, the Company issued options to purchase 1.27 million and 1.1 million shares. For the three months ended March 31, 2019 and 2018, the Company recognized an expense of approximately $1,358,503 and $770,862, respectively, of non-cash compensation expense (included in General and Administrative expense in the accompanying Consolidated Statement of Operations) determined by application of a Black Scholes option pricing model with the following inputs: exercise price, dividend yields, risk-free interest rate, and expected annual volatility. As of March 31, 2019, the Company had approximately $9,652,000 of unrecognized pre-tax non-cash compensation expense, which the Company expects to recognize, based on a weighted-average period of 3 years. The Company used straight-line amortization of compensation expense over the two to three-year requisite service or vesting period of the grant. There are options to purchase approximately 2.95 million shares that are vested as of March 31, 2019. The Company uses the Black-Scholes option-pricing model to estimate the fair value of its stock option awards and warrant issuances. The calculation of the fair value of the awards using the Black - Scholes option-pricing model is affected by the Company’s stock price on the date of grant as well as assumptions regarding the following: Three months ended March 31, 2019 2018 Expected volatility 71%-121% 62.91 – 62.98 Expected term 4.02-4.64 Years 4.77 – 5 Years Risk-free interest rate 2.55% - 2.72% 2.56% - 2.57% Forfeiture Rate 0.00% 0.00% Expected dividend yield 0.00% 0.00% The expected volatility was determined with reference to the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant. A summary of the status of the Company’s outstanding stock options as of March 31, 2019 and changes during the period ending on that date is as follows: Weighted Average Aggregate Average Exercise Intrinsic Remaining Shares (000’s) Price Value (000’s) Term (Yrs) Options Balance at December 31, 2018 4,840 $ 3.04 $ 5,338 5.05 Granted 1,269 $ 3.73 Exercised (342 ) $ 1.17 Forfeiture and cancelled (262 ) $ 2.67 At March 31, 2019 5,505 $ 3.33 $ 5,968 6.05 Exercisable at March 31, 2019 2,951 $ 2.45 The following table summarizes information about employee stock options outstanding at March 31, 2019: Outstanding Options Vested Options Number Number Outstanding Weighted Weighted Exercisable Weighted Weighted Range of at Average Average at Average Average Exercise March 31, Remaining Exercise March 31, Exercise Remaining Price 2019 (000’s) Term Price 2019 (000’s) Price Term $0.20 - $0.53 399 3.83 $ 0.27 399 $ 0.27 3.83 $0.65 - $1.80 792 1.01 $ 0.84 792 $ 0.84 1.01 $1.83 - $2.84 626 3.19 $ 2.06 612 $ 2.06 3.18 $3.20 - $6.20 3,680 7.87 $ 4.40 1,140 4.48 6.88 $7.20 - $22.00 8 0.38 $ 10.36 8 $ 10.36 0.38 Outstanding options 5,505 6.05 $ 3.33 2,951 $ 2.45 4.11 Restricted Stock Awards Restricted stock awards are awards of common stock that are subject to restrictions on transfer and to a risk of forfeiture if the holder leaves the Company before the restrictions lapse. The holder of a restricted stock award is generally entitled at all times on and after the date of issuance of the restricted shares to exercise the rights of a shareholder of the Company, including the right to vote the shares. The value of stock awards that vest over time was established by the market price on the date of its grant. A summary of the Company’s restricted stock activity for the three months ended March 31, 2019 For the Three Months ended March 31, 2019 March 31, 2018 Weighted Weighted Average Average (000’s) Grant Date (000’s) Grant Date Shares Fair Value Shares Fair Value Unvested at beginning of period 38,889 $ — — — Granted 3.64 100,000 3.64 Vested 8,333 — 33,333 — Unvested at end of period 30,556 $ 3.64 66,667 3.64 Unrecognized compensation expense related to outstanding restricted stock awards to employees and directors as of March 31, 2019 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 16. COMMITMENTS AND CONTINGENCIES The Company has entered into distribution agreements with liquidated damages in the event the Company cancels the distribution agreements without cause. Cause has been defined in various ways. It is management’s belief that no such agreement has created any liability as of March 31, 2019. On December 18, 2018, Rockstar, Inc. (“ Rockstar On April 8, 2019, Daniel Prescod filed suit against Celsius Holdings, Inc., Case No. 19STCV09321, pending in Superior Court for the State of California, County of Los Angeles (the “Prescod Litigation”). Daniel Prescod asserts that the Company’s use of citric acid in its products while simultaneously claiming “no preservatives” violates California Consumer Legal Remedies Act, California Business and Professions Code Section 17200, et seq., and California Business and Professions Code Section 17500, et seq., because citric acid acts as a preservative. The Company does not use citric acid as a preservative in its products, but rather as a flavoring, and therefore it believes that its “no preservatives” claim is fair and not deceptive. The Company intends to contest the claims vigorously. Since this matter is still in its initial stages, it is impossible to predict the outcome at this time. In addition to the foregoing, from time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 17. SUBSEQUENT EVENTS Between April 1, 2019 and May 9, 2019, the Company issued an aggregate of 109,488 shares of its common stock pursuant to the exercise of stock options granted under the Company’s 2015 Stock Incentive Plan. The Company received cash in the amount of $56,400 for options exercised. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation – US GAAP Commission |
Significant Estimates | Significant Estimates |
Segment Reporting | Segment Reporting Disclosed About Segments of an Enterprise and Related Information.) Our chief operating decision-maker is considered to be our Chief Executive Officer (CEO). The CEO reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance. The financial information reviewed by the CEO is identical to the information presented in the accompanying consolidated statement of operations. Therefore, the Company has determined that it operates in a single operating segment. For the three months ended March 31, 2019 and 2018 all material assets and revenues of the Company where in the United States except as disclosed in Note 2. |
Concentrations of Risk | Concentrations of Risk The Company uses single supplier relationships for its raw materials purchases and filling capacity, which potentially subjects the Company to a concentration of business risk. If these suppliers had operational problems or ceased making product available to the Company, operations could be adversely affected. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company places its cash and cash equivalents with high-quality financial institutions. At times, balances in the Company’s cash accounts may exceed the Federal Deposit Insurance Corporation limit. At March 31, 2019, the Company had approximately $2.5 million in excess of the Federal Deposit Insurance Corporation limit. For the three months ended March 31, 2019 and 2018, the Company had the following 10 percent or greater concentrations of revenue with its customers: 2019 2018 A* 17.9 % 18.0 % B* 0.1 % 11.6 % All other 82.0 % 70.4 % Total 100.0 % 100.0 % Revenues from customer A are derived from a customer located in Sweden and customer B are derived from a customer located in China. Revenues from all other customers were mainly derived in the United States. At March 31, 2019 and December 31, 2018, the Company had the following 10 percent or greater concentrations of accounts receivable with its customers: 2019 2018 A* 41.1 % 41.5 % All other 58.9 % 58.5 % Total 100.0 % 100.0 % *Receivables from customer A are derived from a customer located in Sweden. |
Cash Equivalents | Cash Equivalents |
Accounts Receivable | Accounts Receivable |
Inventories | Inventories |
Property and Equipment | Property and Equipment |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets |
Revenue Recognition | Revenue Recognition Revenue is derived from the sale of beverages. The Company recognizes revenue when obligations under the terms of a contract with the customer are satisfied. Product sales occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives the Company offers to its customers and their customers. Any discounts, slotting fees, sales incentives or similar arrangements with the customer are estimated at time of sale and deducted from revenue. Sales taxes and other similar taxes are excluded from revenue. |
Customer Advance | Customer Advances |
Advertising Costs | Advertising Costs |
Research and Development | Research and Development |
Foreign Currency Translation | Foreign Currency Translation-Chinese Yuan Renminbi — As of and for the three months ended March 31, 2019 and March 31, 2018, the exchange rates used to translate amounts in Chinese Yuan into USD for the purposes of preparing the consolidated financial statements were as follows: March 31, 2019 March 31, 2018 Exchange rate on balance sheet dates USD : CNY exchange rate 6.71 6.29 Average exchange rate for the period USD : CNY exchange rate 6.75 6.36 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments |
Fair Value Measurements | Fair Value Measurements Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. Other than these noted previously, the Company did not have any other assets or liabilities measured at fair value at March 31, 2019 and December 31, 2018. |
Income Taxes | Income Taxes — Accounting for Uncertain Income Tax Positions. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits. The Company has adopted ASC 740-10-25 Definition of Settlement, |
Earnings per Share | Earnings per Share There were no other dilutive common shares equivalents, including convertible notes and warrants, as no common share equivalents had an exercise price below the ending closing price of the year. The effects of dilutive instruments have not been presented as the effects would be anti-dilutive. |
Share-Based Payments | Share-Based Payments |
Cost of Sales | Cost of Sales |
Operating Expenses | Operating Expenses |
Shipping and Handling Costs | Shipping and Handling Costs |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company adopts all applicable, new accounting pronouncements as of the specified effective dates. In June 2016, the FASB issued ASU No. 2016-13 & updated in Nov 2018 ASU 2018-19, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”), which requires the immediate recognition of management’s estimates of current and expected credit losses. ASU 2016-13 is effective for fiscal years and interim reporting periods within those years beginning after December 15, 2019. Early adoption is permitted after fiscal years beginning December 15, 2018. The Company is currently evaluating the potential impact of adopting this guidance on our financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this update modify the disclosure requirements on fair value measurements in Topic 820. The ASU is effective for the Registrants for fiscal years beginning after December 15, 2019, and interim periods therein. Early adoption is permitted. The Company is currently assessing the impact of this standard on their Financial Statements. All new accounting pronouncements issued but not yet effective are not expected to have a material impact on our results of operations, cash flows or financial position with the exception of the updated previously disclosed above, there have been no new accounting pronouncements not yet effective that have significance to our consolidated financial statements. |
Liquidity | Liquidity In addition to cash flow from operations, our primary sources of working capital have been private placements of our securities and our credit facilities with CD Financial, LLC (“CD Financial”), an affiliate of Carl DeSantis, a principal shareholder of the Company, as well as Charmnew Limited and Grieg International Limited. Charmnew Limited is an existing shareholder of record affiliated with Li Ka Shing, one of our principal shareholders. Grieg International Limited is an existing shareholder of record affiliated with Chau Hoi Shuen Solina, one of our principal shareholders. If our sales volumes do not meet our projections, expenses exceed our expectations, our plans change, we may be unable to generate enough cash flow from operations to cover our working capital requirements. In such case, we may be required to adjust our business plan, by reducing marketing, lower our working capital requirements and reduce other expenses or seek additional financing. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of revenue & accounts receivable with customers | For the three months ended March 31, 2019 and 2018, the Company had the following 10 percent or greater concentrations of revenue with its customers: 2019 2018 A* 17.9 % 18.0 % B* 0.1 % 11.6 % All other 82.0 % 70.4 % Total 100.0 % 100.0 % Revenues from customer A are derived from a customer located in Sweden and customer B are derived from a customer located in China. Revenues from all other customers were mainly derived in the United States. At March 31, 2019 and December 31, 2018, the Company had the following 10 percent or greater concentrations of accounts receivable with its customers: 2019 2018 A* 41.1 % 41.5 % All other 58.9 % 58.5 % Total 100.0 % 100.0 % *Receivables from customer A are derived from a customer located in Sweden. |
Schedule of exchange rates | As of and for the three months ended March 31, 2019 and March 31, 2018, the exchange rates used to translate amounts in Chinese Yuan into USD for the purposes of preparing the consolidated financial statements were as follows: March 31, 2019 March 31, 2018 Exchange rate on balance sheet dates USD : CNY exchange rate 6.71 6.29 Average exchange rate for the period USD : CNY exchange rate 6.75 6.36 |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of net sales by reporting segment | Information about the Company’s net sales by reporting segment for the three months ended March 31, 2019 and 2018 are as follows: For the three months ended March 31, March 31, 2019 2018 North America $ 11,397,862 $ 8,096,080 Europe 2,999,664 2,506,433 Asia 52,764 1,389,277 Other 35,360 68,186 Net sales $ 14,485,650 $ 12,059,976 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consist of the following at: March 31, December 31, 2019 2018 Finished goods $ 10,775,168 $ 8,739,877 Raw Materials 2,887,471 2,817,476 Less: Inventory reserves (106,127 ) (74,652 ) Inventories-Net $ 13,556,512 $ 11,482,701 |
NOTE RECEIVABLE (Tables)
NOTE RECEIVABLE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Schedule of note receivable | Note receivable consists of the following at: March 31, December 31, 2019 2018 Note Receivable-Current $ 1,224,529 $ - Note Receivable-Non-Current 11,020,766 - Total Note Receivable $ 12,245,295 $ - |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Future annual minimum cash payments required under operating lease | Future annual minimum cash payments required under this operating type lease as of March 31, 2019 are as follows: Future Minimum Lease Payments 2019 $ 112,818 2020 128,259 Total Minimum Lease Payments $ 241,077 Less: Amount representing interest (14,443 ) Present value of lease liabilities $ 226,634 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consist of the following at: March 31, December 31, 2019 2018 Furniture and equipment $ 451,576 $ 451,576 Less: accumulated depreciation (348,483 ) (329,722 ) Total $ 103,093 $ 121,854 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses consist of the following at: March 31, December 31, 2019 2018 Accounts payable $ 5,749,943 $ 5,825,446 Accrued expenses 3,277,116 9,019,765 Total $ 9,027,059 $ 14,845,211 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Revenue, Current [Abstract] | |
Schedule of other current liabilities | Other current liabilities consist of the following at: March 31, December 31, 2019 2018 Other Liabilities $ 65,395 $ 19,933 Total $ 65,395 $ 19,933 |
NOTES PAYABLE - RELATED PARTY (
NOTES PAYABLE - RELATED PARTY (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of note payable - related parties | Line of credit convertible note payable - related parties consists of the following as of: March 31, December 31, 2019 2018 Note Payable – line of credit In July 2010, the Company entered into a line of credit note payable with a related party and major shareholder which carries interest of five percent per annum paid quarterly. The Company can borrow up to $9,500,000. The Company has pledged all its assets as security for the line of credit. The note matures in January 2020, at which time the principal amount is due. During April 2015, the Company issued $4,000,000 of convertible series D preferred series in exchange for cancellation of $4,000,000 of this line, reducing the amount to $4,500,000. During March 2018, the Company issued $1,000,000 of common stock in exchange for cancellation of $1,000,000 of this line, reducing the amount to $3,500,000. In December 2018, the company amended and restated the note payable into a convertible loan agreement continuing to carry a five percent per annum interest but payable semi-annually. As a result, of this substantial modification which was treated as a debt extinguishment, a new liability was established and a loss of $377,0418 on the extinguishment of debt was recognized. The Company can now borrow up to $5.0 million. The note matures in December 2020. In January 2019, the company increased the borrowed amount by $1,500,000. The unamortized discount of the note as of March 2019 amounted to $149,161. The balance at March 31, 2019 is convertible into 1,491,338 shares at a conversion price of $3.40 per share which was determined based on the average of the closing price for the shares during the ten (10) business days prior to the Advance Date, less a discount of 10%. Long-term portion $ 4,850,839 $ 3,500,000 March 31, December 31, 2019 2018 Convertible Note Payable -In December 2018, the Company entered into a convertible note payable with a related party and shareholder which carries interest of five percent per annum paid semi-annually. The Company can borrow up to $3.0 million. This note had an unamortized discount of $283,500 and $324,371 as of March 31, 2019 and as of December 31, 2018, respectively. The note matures in December 2020. The balance at March 31, 2019 is convertible into 1,002,553 shares at a fixed conversion price of $3.04 per share which was determined based on the average of the closing price for the shares during the ten (10) business days prior to the Advance Date, less a discount of 10%. 2,716,500 2,675,629 -In December 2018, the Company entered into a line of credit convertible note payable with a related party and shareholder which carries interest of five percent per annum paid semi-annually. The Company can borrow up to $2.0 million. This note had an unamortized discount of $188,685 and $216,248 as of March 31, 2019 and as of December 31, 2018, respectively. The note matures in December 2020. The balance at March 31, 2019 is convertible into 668,369 shares at a fixed conversion price of $3.04 per share which was determined based on the average of the closing price for the shares during the ten (10) business days prior to the Advance Date, less a discount of 10%. 1,811,315 1,783,752 Long-term portion-Net of Discount $ 4,527,815 $ 4,459,381 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of black - scholes option-pricing model valuation assumption | The calculation of the fair value of the awards using the Black - Scholes option-pricing model is affected by the Company’s stock price on the date of grant as well as assumptions regarding the following: Three months ended March 31, 2019 2018 Expected volatility 71%-121% 62.91 – 62.98 Expected term 4.02-4.64 Years 4.77 – 5 Years Risk-free interest rate 2.55% - 2.72% 2.56% - 2.57% Forfeiture Rate 0.00% 0.00% Expected dividend yield 0.00% 0.00% |
Schedule of outstanding stock options | A summary of the status of the Company’s outstanding stock options as of March 31, 2019 and changes during the period ending on that date is as follows: Weighted Average Aggregate Average Exercise Intrinsic Remaining Shares (000’s) Price Value (000’s) Term (Yrs) Options Balance at December 31, 2018 4,840 $ 3.04 $ 5,338 5.05 Granted 1,269 $ 3.73 Exercised (342 ) $ 1.17 Forfeiture and cancelled (262 ) $ 2.67 At March 31, 2019 5,505 $ 3.33 $ 5,968 6.05 Exercisable at March 31, 2019 2,951 $ 2.45 |
Schedule of employee stock options outstanding | The following table summarizes information about employee stock options outstanding at March 31, 2019: Outstanding Options Vested Options Number Number Outstanding Weighted Weighted Exercisable Weighted Weighted Range of at Average Average at Average Average Exercise March 31, Remaining Exercise March 31, Exercise Remaining Price 2019 (000’s) Term Price 2019 (000’s) Price Term $0.20 - $0.53 399 3.83 $ 0.27 399 $ 0.27 3.83 $0.65 - $1.80 792 1.01 $ 0.84 792 $ 0.84 1.01 $1.83 - $2.84 626 3.19 $ 2.06 612 $ 2.06 3.18 $3.20 - $6.20 3,680 7.87 $ 4.40 1,140 4.48 6.88 $7.20 - $22.00 8 0.38 $ 10.36 8 $ 10.36 0.38 Outstanding options 5,505 6.05 $ 3.33 2,951 $ 2.45 4.11 |
Summary of restricted stock awards | A summary of the Company’s restricted stock activity for the three months ended March 31, 2019 For the Three Months ended March 31, 2019 March 31, 2018 Weighted Weighted Average Average (000’s) Grant Date (000’s) Grant Date Shares Fair Value Shares Fair Value Unvested at beginning of period 38,889 $ — — — Granted 3.64 100,000 3.64 Vested 8,333 — 33,333 — Unvested at end of period 30,556 $ 3.64 66,667 3.64 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - 10% or Greater Revenue [Member] | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Concentration Risk [Line Items] | |||
Total | 100.00% | 100.00% | |
Customer A [Member] | |||
Concentration Risk [Line Items] | |||
Total | [1] | 17.90% | 18.00% |
Customer B [Member] | |||
Concentration Risk [Line Items] | |||
Total | 0.10% | 11.60% | |
All Other [Member] | |||
Concentration Risk [Line Items] | |||
Total | 82.00% | 70.40% | |
[1] | Revenues from customer A are derived from a customer located in Sweden. Revenues from all other customers were mainly derived from the United States. Receivables from customer B are obtained from a customer located in China. |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - 10% or Accounts Receivable [Member] | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | ||
Concentration Risk [Line Items] | |||
Total | 100.00% | 100.00% | |
Customer A [Member] | |||
Concentration Risk [Line Items] | |||
Total | [1] | 41.10% | 41.50% |
All Other [Member] | |||
Concentration Risk [Line Items] | |||
Total | 58.90% | 58.50% | |
[1] | Revenues from customer A are derived from a customer located in Sweden. Revenues from all other customers were mainly derived from the United States. Receivables from customer B are obtained from a customer located in China. |
BASIS OF PRESENTATION AND SUM_6
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | ||
Exchange rate on balance sheet dates | 6.71 | 6.29 |
Average exchange rate for the period | 6.75 | 6.36 |
BASIS OF PRESENTATION AND SUM_7
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Amount excess of FDIC limit | $ 2,500,000 | ||
Allowance for doubtful accounts | 260,649 | $ 183,000 | |
Inventory reserve | 106,127 | 74,652 | |
Advertising expense | 1,200,000 | $ 4,000,000 | |
Research and development expense | $ 103,000 | 121,000 | |
Number of shares available | 6,901,360 | ||
Freight expense | $ 1,300,000 | 1,100,000 | |
Conversion Of Convertible Debt into common stock | 3,162,260 | ||
Accumulated deficit | (61,724,097) | $ (73,380,691) | |
Net (loss) available to common stockholders | 11,656,594 | (2,959,195) | |
Net cash used in operating activities | $ (6,793,712) | $ (4,275,713) | |
Minimum [Member] | |||
Useful life | 3 years | ||
Maximum [Member] | |||
Useful life | 7 years |
REVENUE (Details)
REVENUE (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net sales | $ 14,485,650 | $ 12,059,976 |
North America [Member] | ||
Net sales | 11,397,862 | 8,096,080 |
Europe [Member] | ||
Net sales | 2,999,664 | 2,506,433 |
Asia [Member] | ||
Net sales | 52,764 | 1,389,277 |
Other [Member] | ||
Net sales | $ 35,360 | $ 68,186 |
REVENUE (Details Narrative)
REVENUE (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | $ 14,485,650 | $ 12,059,976 |
License Agreement [Member] | ||
Royalty fees | 6,900,000 | |
Revenues | $ 90,000 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 10,775,168 | $ 8,739,877 |
Raw Materials | 2,887,471 | 2,817,476 |
Less: Inventory reserves | (106,127) | (74,652) |
Inventories, net | $ 13,556,512 | $ 11,482,701 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
D3M Licensing Group [Member] | Prepaid Consulting Agreement [Member] | ||
Prepaid expenses and other current assets | $ 2,832,174 | $ 2,299,375 |
NOTE RECEIVABLE (Details)
NOTE RECEIVABLE (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Notes to Financial Statements | ||
Note Receivable-Current | $ 1,224,529 | |
Note Receivable-Non-Current | 11,020,766 | |
Total Note Receivable | $ 12,245,295 |
NOTE RECEIVABLE (Details Narrat
NOTE RECEIVABLE (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Notes to Financial Statements | ||
Note Receivable | $ 12,245,295 | |
Note Receivable description | Scheduled principal payments plus accrued interest are due annually on March 31 of each year starting in 2020. The Note is recorded at amortized cost basis and accrues interest at a rate per annum equal to the weighted average of 5% of the outstanding principal up to $5 million and 2% of the outstanding principal above $5 million. | |
Weighted average interest rate | 3.21% | |
Interest income | $ 96,000 |
LEASES (Details)
LEASES (Details) | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 112,818 |
2020 | 128,259 |
Total Minimum Lease Payments | 241,077 |
Less: Amount representing interest | (14,443) |
Present value of lease liabilities | $ 226,634 |
LEASE (Details Narrative)
LEASE (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | |||
Right to use assets | $ 223,991 | $ 259,358 | |
Operating lease liability | 226,634 | ||
Short-term operating lease liability | 139,042 | ||
Long term operating lease liability | $ 87,592 | ||
Lease description | The monthly rent amounts to $12,452 per month until October 2019 and then increases to $12,826 per month until the termination of the lease in October 2020. | ||
Lease term | 19 months | ||
Discount rate | 5.00% |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (348,483) | $ (329,722) |
Total | 103,093 | 121,854 |
Furniture and Equipment [Member} | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 451,576 | $ 451,576 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 18,761 | $ 7,953 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 5,749,943 | $ 5,825,446 |
Accrued expenses | 3,277,116 | 9,019,765 |
Total | $ 9,027,059 | $ 14,845,211 |
OTHER LIABILITIES (Details)
OTHER LIABILITIES (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Deferred Revenue, Current [Abstract] | ||
Other Liabilities | $ 65,395 | $ 19,933 |
Total | $ 65,395 | $ 19,933 |
NOTES PAYABLE - RELATED PARTIES
NOTES PAYABLE - RELATED PARTIES (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Dec. 31, 2018 | Mar. 31, 2018 | Apr. 30, 2015 | Jul. 31, 2010 | Mar. 31, 2019 | |
Long-term portion | $ 3,500,000 | $ 4,850,839 | |||
5% Note Payable - Line of Credit [Member] | Carl DeSantis [Member] | CD Financial, LLC [Member] | |||||
Long-term portion | $ 3,500,000 | 4,850,839 | |||
Maximum borrowing capacity | $ 9,500,000 | 5,000,000 | |||
Debt maturity date | Dec. 31, 2020 | Jan. 2, 2020 | |||
Loss on debt extinguishment | $ (3,770,418) | ||||
Conversion of common stock | 1,491,338 | ||||
Unamortized discount | $ 149,161 | ||||
Conversion price | $ 3.40 | ||||
Discount rate | 10.00% | ||||
5% Note Payable - Line of Credit [Member] | Carl DeSantis [Member] | CD Financial, LLC [Member] | 5% Series D Preferred Stock [Member] | |||||
Number of shares issued upon debt cancellation | 1,000,000 | 4,000,000 | |||
Debt cancelled amount | $ 1,000,000 | $ 4,000,000 | |||
Increased in borrowed amount | $ 1,500,000 |
NOTES PAYABLE - RELATED PARTI_2
NOTES PAYABLE - RELATED PARTIES (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Convertible Note Payable | $ 4,527,815 | $ 4,459,381 |
5% Convertible Note Payable [Member] | Related Party And Shareholder [Member] | ||
Convertible Note Payable | 2,716,500 | 2,675,629 |
Maximum borrowing capacity | 3,000,000 | |
Unamortized discount | $ 283,500 | 324,371 |
Debt maturity date | Dec. 31, 2020 | |
Conversion of common stock | 1,002,553 | |
Conversion price | $ 3.04 | |
Discount rate | 10.00% | |
5% Line of Credit Convertible Note Payable [Member] | Related Party And Shareholder [Member] | ||
Convertible Note Payable | $ 1,811,315 | 1,783,752 |
Maximum borrowing capacity | 2,000,000 | |
Unamortized discount | $ 188,685 | $ 216,248 |
Debt maturity date | Dec. 31, 2020 | |
Conversion of common stock | 668,369 | |
Conversion price | $ 3.04 | |
Discount rate | 10.00% |
PREFERRED STOCK - RELATED PAR_2
PREFERRED STOCK - RELATED PARTY (Details Narrative) - Carl DeSantis [Member] - USD ($) | Apr. 16, 2015 | Aug. 26, 2013 | Mar. 31, 2018 | Oct. 31, 2017 | Apr. 30, 2015 | Dec. 31, 2018 | Dec. 31, 2017 |
CD Financial, LLC [Member] | 5% Series D Preferred Stock [Member] | Amendment Loan and Security Agreement [Member] | |||||||
Number of shares issued upon debt conversion | 4,000 | ||||||
Conversion price (in dollars per share) | $ 0.86 | ||||||
Liquidation preference (in dollars per share) | $ 1,000 | ||||||
Accrued dividend | $ 139,535 | ||||||
Preferred stock redemption date | Jan. 2, 2020 | ||||||
Share price (in dollars per share) | $ 0.89 | ||||||
Dividend payable (in dollars per share) | $ 0.03 | ||||||
Preferred stock redemption price, percent | 104.00% | ||||||
Conversion of preferred stock into common stock | 4,651,163 | ||||||
CD Financial, LLC [Member] | 5% Note Payable - Line of Credit [Member] | Amendment Loan and Security Agreement [Member] | |||||||
Line of credit reduction borrowing capacity | $ 4,000,000 | ||||||
CD Financial, LLC [Member] | 5% Note Payable - Line of Credit [Member] | Securities Purchase Agreement [Member] | |||||||
Original debt conversion amount | $ 1,650,000 | ||||||
CDS Ventures of South Florida, LLC & CD Financial, LLC [Member] | 6% Series C Preferred Stock [Member] | Securities Purchase Agreement [Member] | |||||||
Number of shares issued upon debt conversion | 2,200 | ||||||
Conversion price (in dollars per share) | $ 0.52 | ||||||
Liquidation preference (in dollars per share) | $ 1,000 | ||||||
CDS Ventures of South Florida, LLC [Member] | 6% Series C Preferred Stock [Member] | Securities Purchase Agreement [Member] | |||||||
Number of shares issued upon accrued dividend | 383 | 180 | |||||
Value of shares issued upon accrued dividend | $ 383,000 | $ 180,000 | |||||
Accrued dividend | $ 255,903 | ||||||
Preferred stock redemption date | Dec. 31, 2018 | ||||||
Number of preferred stock converted | 256 | ||||||
Conversion of preferred stock into common stock | 5,806,022 | ||||||
CDS Ventures of South Florida, LLC [Member] | Short Term Loan [Member] | Securities Purchase Agreement [Member] | |||||||
Original debt conversion amount | $ 550,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - CD Financial, LLC [Member] - Office [Member] - Carl DeSantis [Member] | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lease expiration | 2020-10 |
Monthly expense | $ 12,452 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jul. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Proceeds from Options exercised | $ 24,760 | $ 142,023 | ||
Number of options exercised | 342,000 | |||
Series D Preferred Stock [Member] | ||||
Number of preferred stock converted | 4,000 | 4,000 | ||
Conversion of preferred stock into common stock | 4,651,163 | |||
2006 Stock Incentive Plan [Member] | ||||
Number of option shares granted | 195,857 | 604,113 | ||
Value of option shares granted | $ 24,760 | $ 142,627 | ||
Proceeds from Options exercised | $ 24,760 | |||
Number of options exercised | 80,750 | |||
Restricted Common Stock [Member] | Statewide [Member] | ||||
Fair value of shares issued upon services rendered | $ 279,600 | |||
Stock price (in dollars per share) | $ 4.66 | |||
Stock issued for settlement of legal matter | 60,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Forfeiture Rate | 0.00% | 0.00% |
Expected dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Expected volatility | 71.00% | 62.91% |
Expected term | 4 years 7 days | 4 years 9 months 7 days |
Risk-free interest rate | 2.55% | 2.56% |
Maximum [Member] | ||
Expected volatility | 121.00% | 62.98% |
Expected term | 4 years 7 months 21 days | 5 years |
Risk-free interest rate | 2.72% | 2.57% |
STOCK-BASED COMPENSATION (Det_2
STOCK-BASED COMPENSATION (Details 1) | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Balance at beginning | shares | 4,840,000 |
Granted | shares | 1,269,000 |
Exercised | shares | (342,000) |
Forfeiture and cancelled | shares | (262,000) |
Balance at end | shares | 5,505,000 |
Exercisable at end | shares | 2,951,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Balance at beginning | $ / shares | $ 3.04 |
Granted | $ / shares | 3.73 |
Exercised | $ / shares | 1.17 |
Forfeiture and cancelled | $ / shares | 2.67 |
Balance at end | $ / shares | 3.33 |
Exercisable at end | $ / shares | $ 2.45 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Intrinsic Value [Roll Forward] | |
Balance at beginning | $ | $ 5,338,000 |
Balance at end | $ | $ 5,968,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Average Remaining Term [Roll Forward] | |
Balance at beginning | 5 years 18 days |
Balance at end | 6 years 18 days |
STOCK-BASED COMPENSATION (Det_3
STOCK-BASED COMPENSATION (Details 2) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Outstanding Options | |
Number Outstanding at end | shares | 5,505,000 |
Weighted Averaged Remaining Life | 6 years 18 days |
Weighted Averaged Exercise Price | $ / shares | $ 3.33 |
Vested Options | |
Number Exercisable at end | shares | 2,951,000 |
Weighted Averaged Exercise Price | $ / shares | $ 2.45 |
Weighted Averaged Remaining Life | 4 years 1 month 9 days |
$0.20 - $0.53 [Member] | |
Outstanding Options | |
Number Outstanding at end | shares | 399,000 |
Weighted Averaged Remaining Life | 3 years 9 months 29 days |
Weighted Averaged Exercise Price | $ / shares | $ 0.27 |
Vested Options | |
Number Exercisable at end | shares | 399,000 |
Weighted Averaged Exercise Price | $ / shares | $ 0.27 |
Weighted Averaged Remaining Life | 3 years 9 months 29 days |
$0.65 - $1.80 [Member] | |
Outstanding Options | |
Number Outstanding at end | shares | 792,000 |
Weighted Averaged Remaining Life | 1 year 4 days |
Weighted Averaged Exercise Price | $ / shares | $ 0.84 |
Vested Options | |
Number Exercisable at end | shares | 792,000 |
Weighted Averaged Exercise Price | $ / shares | $ 0.84 |
Weighted Averaged Remaining Life | 1 year 4 days |
$1.83 - $2.84 [Member] | |
Outstanding Options | |
Number Outstanding at end | shares | 626,000 |
Weighted Averaged Remaining Life | 3 years 2 months 8 days |
Weighted Averaged Exercise Price | $ / shares | $ 2.06 |
Vested Options | |
Number Exercisable at end | shares | 612,000 |
Weighted Averaged Exercise Price | $ / shares | $ 2.06 |
Weighted Averaged Remaining Life | 3 years 2 months 5 days |
$3.20 - $6.20 [Member] | |
Outstanding Options | |
Number Outstanding at end | shares | 3,680,000 |
Weighted Averaged Remaining Life | 7 years 10 months 14 days |
Weighted Averaged Exercise Price | $ / shares | $ 4.4 |
Vested Options | |
Number Exercisable at end | shares | 1,140,000 |
Weighted Averaged Exercise Price | $ / shares | $ 4.48 |
Weighted Averaged Remaining Life | 6 years 10 months 17 days |
$7.20 - $22.00 [Member] | |
Outstanding Options | |
Number Outstanding at end | shares | 8,000 |
Weighted Averaged Remaining Life | 4 months 17 days |
Weighted Averaged Exercise Price | $ / shares | $ 10.36 |
Vested Options | |
Number Exercisable at end | shares | 8,000 |
Weighted Averaged Exercise Price | $ / shares | $ 10.36 |
Weighted Averaged Remaining Life | 4 months 17 days |
STOCK-BASED COMPENSATION (Det_4
STOCK-BASED COMPENSATION (Details 3) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Number of Shares | ||
Unvested at beginning of period | 38,889,000 | |
Restricted stock granted | 0 | 100,000,000 |
Restricted stock vested | 8,333,000 | 33,333,000 |
Unvested at end of period | 30,556,000 | 66,667,000 |
Weighted Average Grant-Date Fair Value per Share | ||
Unvested at beginning of period | ||
Restricted stock granted | 3.64 | 3.64 |
Restricted stock vested | ||
Unvested at end of period | $ 3.64 | $ 3.64 |
STOCK-BASED COMPENSATION (Det_5
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | Jan. 18, 2007 | Apr. 30, 2015 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Feb. 28, 2015 | May 31, 2014 | Dec. 31, 2013 |
Number of shares available | 6,901,360 | 6,901,360 | ||||||
Average share price (in dollars per share) | $ 3.73 | |||||||
Unrecognized pre-tax non-cash compensation expense to non-vested option | $ 9,652,000 | $ 9,652,000 | ||||||
Period unrecognized pre-tax non-cash compensation expense to non-vested option | 3 years | |||||||
Number of shares vested | 2,950,000 | |||||||
Minimum [Member] | ||||||||
Vesting period | 2 years | |||||||
Maximum [Member] | ||||||||
Vesting period | 3 years | |||||||
General And Administrative Expense [Member] | ||||||||
Non-cash compensation expense | $ 1,358,503 | $ 770,862 | ||||||
Stock Incentive Plan [Member] | ||||||||
Plan expiration term | 10 years | |||||||
Number of shares authorized | 2,500,000 | 5,100,000 | 4,600,000 | 4,250,000 | 3,500,000 | |||
Stock Incentive Plan 2015 [Member] | ||||||||
Number of shares authorized | 5,000,000 | |||||||
Description of plan | Provision for an annual increase of 15% to the shares included under the plan, with the shares to be added on the first day of each calendar year, beginning on January 1, 2017 | |||||||
Purchase of common shares | 1,100,000 | |||||||
Stock Option Plan 2015 [Member] | ||||||||
Purchase of common shares | 1,270,000 | 5,640,000 | ||||||
Average share price (in dollars per share) | $ 3.85 | |||||||
Fair value of common shares purchased | $ 5,970,000 | |||||||
Director [Member] | ||||||||
Unrecognized compensation expense | $ 111,196 | $ 111,196 | ||||||
Weighted average period of unrecognized compensation expense | 11 months 1 day |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended |
May 09, 2019 | Mar. 31, 2019 | |
Stock options granted | 1,269,000 | |
Subsequent Event [Member] | Stock Incentive Plan 2015 [Member] | ||
Stock options granted | 109,488 | |
Options exercised, value | $ 56,400 |