Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 12, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | TARONIS TECHNOLOGIES, INC. | |
Entity Central Index Key | 0001353487 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity's Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 86,189,194 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash | $ 1,635,862 | $ 1,598,737 |
Accounts receivable, net of allowance for doubtful accounts of $800,082 and $418,997, respectively | 2,783,345 | 1,394,681 |
Inventory | 3,248,619 | 2,921,500 |
Prepaid and other current assets | 675,796 | 331,822 |
Total Current Assets | 8,343,622 | 6,246,740 |
Property and equipment, net of accumulated depreciation of $3,220,823 and $2,683,298, respectively | 15,796,192 | 9,686,103 |
Deposit on acquisition | 550,000 | |
Intangible assets, net of accumulated amortization of $1,287,519 and $824,150, respectively | 6,709,913 | 3,378,764 |
Restricted deposit | 816,466 | 806,466 |
Security deposits | 152,358 | 227,125 |
Right-of-use assets, net of accumulated amortization of $391,589 and $0, respectively | 3,750,420 | |
Goodwill | 11,123,231 | 6,690,724 |
Total Assets | 46,692,202 | 27,585,922 |
Current Liabilities | ||
Accounts payable | 4,092,959 | 2,600,706 |
Accrued expenses | 1,057,354 | 755,455 |
Financing leases liability, current | 90,303 | 90,303 |
Operating leases liability, current | 670,055 | |
Note payable, net of debt discount of $228,000 and $0, respectively | 1,575,255 | 94,008 |
Total Current Liabilities | 7,485,926 | 3,540,472 |
Long Term Liabilities | ||
Note payable, net of current | 1,531,491 | 601,582 |
Financing leases liability, net of current | 158,142 | 203,294 |
Operating leases liability, net of current | 3,080,365 | |
Senior convertible debenture, net of debt discount of $186,957 and $0, respectively | 1,313,043 | |
Total Liabilities | 13,568,967 | 4,345,348 |
Temporary Equity | ||
Series E Preferred stock: 455,882 shares designated; 0 and 36,765 shares issued and outstanding with a liquidation preference of approximately $0 at June 30, 2019 | 50,000 | |
Stockholders' Equity | ||
Common stock: $0.001 par; 190,000,000 shares authorized; 42,700,933 shares issued and outstanding at June 30, 2019 and 7,732,815 shares issued and outstanding at December 31, 2018. | 42,701 | 7,732 |
Additional paid-in-capital | 124,237,471 | 102,802,553 |
Accumulated deficit | (91,156,937) | (79,619,711) |
Total Stockholders' Equity | 33,123,235 | 23,190,574 |
Total Liabilities, Temporary Equity and Stockholders' Equity | $ 46,692,202 | $ 27,585,922 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 800,082 | $ 418,997 |
Accumulated depreciation | 3,220,823 | 2,683,298 |
Accumulated amortization of intangible assets | 1,287,519 | 824,150 |
Right-of-use assets, net of accumulated amortization | 391,589 | 0 |
Debt discount of note payable | 228,000 | 0 |
Debt discount senior convertible debenture | $ 186,957 | $ 0 |
Series E Preferred stock, shares designated | 455,882 | 455,882 |
Series E Preferred stock, shares issued | 0 | 36,765 |
Series E Preferred stock, shares outstanding | 0 | 36,765 |
Series E Preferred stock, liquidation preference | $ 0 | |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 190,000,000 | 190,000,000 |
Common stock, shares issued | 42,700,933 | 7,732,815 |
Common stock, shares outstanding | 42,700,933 | 7,732,815 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue: | ||||
Revenue | $ 5,860,061 | $ 2,907,712 | $ 10,773,393 | $ 4,079,464 |
Cost of Revenues | 3,206,435 | 1,972,586 | 5,887,250 | 2,730,459 |
Gross Profit | 2,653,626 | 935,126 | 4,886,143 | 1,349,005 |
Operating Expenses: | ||||
Selling, general and administration | 7,546,570 | 3,951,595 | 15,485,628 | 7,087,255 |
Research and development | 2,335 | 2,440 | 27,508 | 3,592 |
Depreciation and amortization | 557,393 | 401,929 | 989,443 | 579,474 |
Total Operating Expenses | 8,106,298 | 4,355,964 | 16,502,579 | 7,670,321 |
Operating Loss | (5,452,672) | (3,420,838) | (11,616,436) | (6,321,316) |
Other Income and (Expense): | ||||
Interest | 28,169 | (23,011) | 38,069 | (96,015) |
Accretion of debt discount | (70,754) | (116,711) | ||
Other income | 49,675 | 19,542 | 41,141 | 19,542 |
Total Other Income (Expense) | 77,844 | (74,223) | 79,210 | (193,184) |
Net Loss | (5,374,828) | (3,495,061) | (11,537,226) | (6,514,500) |
Deemed dividend | 855,541 | 314,100 | 3,863,241 | 1,244,400 |
Net loss attributable to common shareholders | $ (6,230,369) | $ (3,809,161) | $ (15,400,467) | $ (7,758,900) |
Net loss per share: Basic and Diluted | $ (0.22) | $ (4.77) | $ (0.71) | $ (13.87) |
Weighted average common shares: Basic and Diluted | 27,912,957 | 798,608 | 21,742,677 | 559,400 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Equity - USD ($) | Series A Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated (Deficit) [Member] | Total |
Balance at Dec. 31, 2017 | $ 1,000 | $ 89 | $ 71,854,568 | $ (64,582,868) | $ 7,272,789 |
Balance, shares at Dec. 31, 2017 | 1,000,000 | 89,143 | |||
Common stock issued for services | $ 32 | 349,194 | 349,226 | ||
Common stock issued for services, shares | 31,583 | ||||
Common stock warrant issued for services | 63,474 | 63,474 | |||
Exercise of Series C preferred stock warrants | 8,372,700 | 8,372,700 | |||
Conversion of Series C preferred stock into common stock | $ 484 | 1,044,816 | 1,045,300 | ||
Conversion of Series C preferred stock into common stock, shares | 483,892 | ||||
Conversion of Series E preferred stock into common stock | $ 7 | 380,943 | 380,950 | ||
Conversion of Series E preferred stock into common stock, shares | 6,788 | ||||
Amortization of stock based compensation | 105,075 | 105,075 | |||
Common stock issued for the exercise of warrants | $ 4 | 746 | 750 | ||
Common stock issued for the exercise of warrants, shares | 3,750 | ||||
Common stock issued for acquisition of assets | $ 48 | 1,259,568 | 1,259,616 | ||
Common stock issued for acquisition of assets, shares | 48,077 | ||||
Stock issuance costs | (753,543) | (753,543) | |||
Deemed dividend | (930,300) | (930,300) | |||
Net loss | (3,019,441) | (3,019,441) | |||
Balance at Mar. 31, 2018 | $ 1,000 | $ 663 | 81,747,241 | (67,602,309) | 14,146,596 |
Balance, shares at Mar. 31, 2018 | 1,000,000 | 663,233 | |||
Balance at Dec. 31, 2017 | $ 1,000 | $ 89 | 71,854,568 | (64,582,868) | 7,272,789 |
Balance, shares at Dec. 31, 2017 | 1,000,000 | 89,143 | |||
Common stock issued for settlement of accounts payable | 523,178 | ||||
Net loss | (6,514,500) | ||||
Balance at Jun. 30, 2018 | $ 1,000 | $ 1,180 | 85,521,638 | (71,097,368) | 14,426,450 |
Balance, shares at Jun. 30, 2018 | 1,000,000 | 1,180,491 | |||
Balance at Mar. 31, 2018 | $ 1,000 | $ 663 | 81,747,241 | (67,602,309) | 14,146,596 |
Balance, shares at Mar. 31, 2018 | 1,000,000 | 663,233 | |||
Common stock issued for services | $ 58 | 711,956 | 712,014 | ||
Common stock issued for services, shares | 57,758 | ||||
Common stock issued for settlement of accounts payable | $ 36 | 564,837 | 564,873 | ||
Common stock issued for settlement of accounts payable, shares | 36,073 | ||||
Common stock warrant issued for services | 79,125 | 79,125 | |||
Exercise of Series C preferred stock warrants | 2,826,900 | 2,826,900 | |||
Conversion of Series C preferred stock into common stock | $ 387 | (38,287) | (37,900) | ||
Conversion of Series C preferred stock into common stock, shares | 387,177 | ||||
Conversion of Series F preferred stock into common stock | $ 36 | 137,018 | 137,054 | ||
Conversion of Series F preferred stock into common stock, shares | 36,250 | ||||
Amortization of stock based compensation | 18,599 | 18,599 | |||
Stock issuance costs | (211,651) | (211,651) | |||
Deemed dividend | (314,100) | (314,100) | |||
Net loss | (3,495,059) | (3,495,061) | |||
Balance at Jun. 30, 2018 | $ 1,000 | $ 1,180 | 85,521,638 | (71,097,368) | 14,426,450 |
Balance, shares at Jun. 30, 2018 | 1,000,000 | 1,180,491 | |||
Balance at Dec. 31, 2018 | $ 7,733 | 102,802,553 | (79,619,711) | 23,190,574 | |
Balance, shares at Dec. 31, 2018 | 7,732,815 | ||||
Common stock issued for services | $ 3,581 | 1,838,831 | 1,842,412 | ||
Common stock issued for services, shares | 3,581,412 | ||||
Common stock warrant issued for services | 13,912 | 13,912 | |||
Conversion of Series E preferred stock into common stock | $ 500 | 6,300 | 6,800 | ||
Conversion of Series E preferred stock into common stock, shares | 500,000 | ||||
Amortization of stock based compensation | 18,789 | 18,789 | |||
Common stock issued for cash | $ 12,350 | 17,827,650 | 17,840,000 | ||
Common stock issued for cash, shares | 12,350,000 | ||||
Stock issuance costs | (1,119,569) | (1,119,569) | |||
Deemed dividend | (3,007,700) | (3,007,700) | |||
Net loss | (6,162,398) | (6,162,398) | |||
Balance at Mar. 31, 2019 | $ 24,164 | 118,380,766 | (85,782,109) | 32,622,820 | |
Balance, shares at Mar. 31, 2019 | 24,164,227 | ||||
Balance at Dec. 31, 2018 | $ 7,733 | 102,802,553 | (79,619,711) | 23,190,574 | |
Balance, shares at Dec. 31, 2018 | 7,732,815 | ||||
Common stock issued for settlement of accounts payable | |||||
Net loss | (11,537,226) | ||||
Balance at Jun. 30, 2019 | $ 42,701 | 124,237,472 | (91,156,937) | 33,123,235 | |
Balance, shares at Jun. 30, 2019 | 42,700,933 | ||||
Balance at Mar. 31, 2019 | $ 24,164 | 118,380,766 | (85,782,109) | 32,622,820 | |
Balance, shares at Mar. 31, 2019 | 24,164,227 | ||||
Common stock issued for services | $ 5,618 | 2,192,081 | 2,197,699 | ||
Common stock issued for services, shares | 5,618,496 | ||||
Amortization of stock based compensation | 4,561 | 4,561 | |||
Common stock issued for cash | $ 10,119 | 2,474,217 | 2,484,336 | ||
Common stock issued for cash, shares | 10,119,050 | ||||
Common stock issued for purchase of subsidary | $ 2,747 | 1,272,253 | 1,275,000 | ||
Common stock issued for purchase of subsidary, shares | 2,746,660 | ||||
Down round feature triggered for warrants | 855,541 | 855,541 | |||
Common stock issued for the exercise of warrants | $ 53 | 24,098 | 24,151 | ||
Common stock issued for the exercise of warrants, shares | 52,500 | ||||
Stock issuance costs | (110,504) | (110,504) | |||
Deemed dividend | (855,541) | (855,541) | |||
Net loss | (5,374,828) | (5,374,828) | |||
Balance at Jun. 30, 2019 | $ 42,701 | $ 124,237,472 | $ (91,156,937) | $ 33,123,235 | |
Balance, shares at Jun. 30, 2019 | 42,700,933 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash Flows from Operations | ||
Net Loss | $ (11,537,226) | $ (6,514,500) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation and amortization | 989,443 | 579,474 |
Accretion of debt discount | 116,711 | |
Stock based compensation | 23,350 | 165,369 |
Common stock and warrants issued for services | 4,054,023 | 1,203,839 |
Provision for doubtful accounts | 381,085 | |
Amortization of right-of-use assets | 391,589 | |
Changes in operating assets: | ||
Accounts receivable | (727,878) | 295,443 |
Inventory | 244,580 | 133,618 |
Prepaid and other current assets | (345,838) | 150,479 |
Accounts payable | 482,431 | 726,536 |
Accrued Expenses | 301,899 | (787,120) |
Payments on lease liabilities | (509,691) | |
Deferred revenue and customer deposits | (44,095) | |
Net cash used in operating activities | (6,252,234) | (3,974,246) |
Cash Flows from Investing Activities | ||
Deposit on acquisition | (550,000) | |
Cash acquired in acquisition of businesses | 69,325 | 69,000 |
Cash paid for acquisitions | (6,500,000) | (3,767,500) |
Cash paid for noncompete agreements | (2,000,000) | (1,658,279) |
Purchase of property and equipment | (3,666,920) | (90,452) |
Purchase of intangibles | (8,068) | |
Security deposit | 1,174,767 | (69,744) |
Net cash used in investing activities | (11,480,896) | (5,516,975) |
Cash Flows from Financing Activities | ||
Common shares issued for the exercise of warrants | 24,151 | 750 |
Proceeds for common stock issued for cash | 20,324,336 | |
Capital lease payments | (45,152) | (13,730) |
Notes payable repaid | (30,505) | (363,250) |
New notes entered into | 1,788,398 | 243,613 |
Net proceeds on related party notes and advances | 22,588 | |
Repayment of related party notes | (72,458) | |
Net proceeds on issuance of series C preferred stock units, net of costs | 449,100 | 11,199,600 |
Stock Issuance costs | (1,230,073) | (965,194) |
Repurchase of Series C & E preferred stock | (3,500,000) | |
Net cash provided by financing activities | 17,780,255 | 10,051,919 |
Net increase (decrease) in cash | 47,125 | 560,698 |
Cash and restricted cash, beginning of period | 2,405,203 | 586,824 |
Cash and restricted cash, end of period | 2,452,328 | 1,147,522 |
Supplemental disclosure of cash flow information Cash paid during the period for: | ||
Interest | 2,175 | 96,015 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Common shares issued for settlement of accounts payable | 523,178 | |
Fair value of common stock issued in Green Arc Supply acquisition | 1,259,616 | |
Conversion of Series C preferred stock into shares of common stock | 1,007,400 | |
Conversion of Series E preferred stock into shares of common stock | 6,800 | 380,950 |
Conversion of Series F preferred stock into shares of common stock | 137,054 | |
Series F preferred stock issued for the settlement of accounts payable | 556,016 | |
Deemed dividend in connection with the issuance of Series C Preferred stock | (3,863,241) | (1,244,400) |
Common stock issued for purchase of subsidiary | 1,275,000 | |
NG Enterprises Inc [Member] | ||
Supplemental disclosures of non-cash investing and financing activities: | ||
Assets acquired | 916,220 | |
Liabilities assumed | (148,720) | |
Green Arc Supply, L.L.C. [Member] | ||
Supplemental disclosures of non-cash investing and financing activities: | ||
Assets acquired | 2,398,625 | |
Liabilities assumed | (154,009) | |
Trico Welding Supplies, Inc [Member] | ||
Supplemental disclosures of non-cash investing and financing activities: | ||
Assets acquired | 3,052,000 | |
Liabilities assumed | (1,106,000) | |
Tyler Welders Supply [Member] | ||
Supplemental disclosures of non-cash investing and financing activities: | ||
Assets acquired | 1,619,905 | |
Liabilities assumed | (652,578) | |
Cylinder Solutions, Inc [Member] | ||
Supplemental disclosures of non-cash investing and financing activities: | ||
Assets acquired | 375,915 | |
Liabilities assumed | (40,911) | |
Complete Cutting & Welding Supplies, Inc [Member] | ||
Supplemental disclosures of non-cash investing and financing activities: | ||
Assets acquired | 1,083,360 | |
Liabilities assumed | $ (316,333) |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Taronis Technologies, Inc. (the “Company”) was organized in the State of Delaware on December 9, 2005. On January 31, 2019, with the filing of a Certificate of Amendment to the Certificate of Incorporation with the Delaware Secretary of State to effect a name change to “Taronis Technologies, Inc.” The Company is a technology-based company that is focused on addressing the global constraints on natural resources, including fuel and water. The Company has two core technology applications – renewable fuel gasification and water decontamination/sterilization which are derived from the Company’s Plasma Arc Flow System technology. The Company has operating facilities in the following states: Florida, Louisiana, Texas and California. On January 30, 2019, the Company filed a Certificate of Amendment to the Certificate of Incorporation with the Delaware Secretary of State to effect a one-for-twenty reverse split of the issued and outstanding common stock. The consolidated financial statements and accompanying notes give effect to the reverse stock split as if they occurred at the first period presented. The reverse stock splits did not modify the rights or preferences of the common stock. Proportional adjustments have been made to the conversion and exercise prices of our outstanding common stock warrants, convertible notes, and common stock options. The number of common stock shares issuable under our equity compensation plan was not affected by the 2019 Reverse Stock Split. All share and per share amounts for the common stock have been retroactively restated to give effect to the reverse splits. |
Going Concern and Managements'
Going Concern and Managements' Plan | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern and Managements' Plan | NOTE 2 - GOING CONCERN AND MANAGEMENTS’ PLAN As of June 30, 2019, the Company had cash of $1,635,862 and has reported a net loss of $11,537,226 and has used cash in operations of $6,252,234 for the six months ended June 30, 2019. In addition, as of June 30, 2019, the Company has a working capital of $857,696 and an accumulated deficit of $91,156,937. The Company utilizes cash in its operations of approximately $1,000,000 per month. These conditions indicate that there is substantial doubt about the Company’s ability to continue as a going concern within one year from the issuance date of the unaudited condensed consolidated financial statements. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan. The Company has financed its operations through equity and debt financing transactions, but does not believe it will need to do so in the immediate future. The Company does not believe it will continue incurring operating losses for the foreseeable future and that it will be cash-flow positive before year-end. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company can give no assurance that it will be successful in implementing its business plan. These unaudited condensed consolidated financial statements do not include any adjustments from this uncertainty. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | OTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information and include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended June 30, 2019 and 2018. As this is an interim period financial statement, certain adjustments are not necessary as with a financial period of a full year. Although management believes that the disclosures in these unaudited condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s financial statements for the year ended December 31, 2018, which contains the audited financial statements and notes thereto, for the years ended December 31, 2018 and 2017 included within the Company’s Form 10-K filed with the SEC on April 12, 2019. The interim results for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the year ended December 31, 2019 or for any future interim periods. Use of Estimates The Company prepares its financial statements in conformity with U.S. GAAP. These principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that these estimates are reasonable; however, actual results could differ from those estimates. The consolidated financial statements presented include intangible assets, goodwill, fair value of assets and liabilities related to acquisitions, recoverability of deferred tax assets, collection of its receivables and the useful life of property, plant and equipment. Business Combinations The Company accounts for business combinations under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805 “Business Combinations” using the acquisition method of accounting, and accordingly, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition. The excess of the purchase price over the estimated fair value is recorded as goodwill. All acquisition costs are expensed as incurred. Upon acquisition, the accounts and results of operations are consolidated as of and subsequent to the acquisition date. Concentrations of Credit Risk Financial instruments that subject the Company to credit risk consist principally of trade accounts receivable and cash. The Company performs certain credit evaluation procedures and does not require collateral for financial instruments subject to credit risk. The Company believes that credit risk is limited because the Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk of its customers, establishes an allowance for uncollectible accounts and, consequently, believes that its accounts receivable credit risk exposure beyond such allowances is limited. The Company maintains cash deposits with financial institutions which are insured by the Federal Deposit Insurance Corporation (“FDIC”), which, from time to time, may exceed federally insured limits. Cash is also maintained at foreign financial institutions. Cash in foreign financial institutions as of June 30, 2019 was $816,466. The Company has not experienced any losses and believes it is not exposed to significant credit risk from cash. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash, checking accounts, money market accounts and temporary investments with original maturities of three months or less when purchased. As of June 30, 2019, and 2018 the Company had no cash equivalents. Restricted cash consists of cash deposited with a financial institution for $816,466 held in an escrow account. The following table provides a reconciliation of cash and restricted cash reported in the unaudited condensed consolidated balance sheets that sum to the total of the same amounts show in the statement of cash flows. June 30, 2019 2018 Cash 1,635,862 1,147,522 Restricted deposits 816,466 - Total cash and restricted cash in the balance sheet 2,452,328 1,147,522 Revenue Recognition The Company follows the guidance of ASC Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”). The revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. Revenues under Topic 606 are required to be recognized either at a “point in time” or “over time”, depending on the facts and circumstances of the arrangement, and will be evaluated using a five-step model. The Company principally generates revenue through three operating streams: (1) the sale of MagneGas fuel for metal cutting and through the sales of other industrial and specialty gases and related products through the Company’s wholly owned subsidiaries, (2) by providing consulting services and (3) through the sales of the Plasma Arc Flow Systems. The Company’s revenue recognition policy is as follows: ● Revenue for metal-working fuel, industrial gases and welding supplies is recognized when performance obligations of the sale are satisfied. The majority of the Company’s terms of sale have a single performance obligation to transfer products. Accordingly, the Company recognizes revenue when control has been transferred to the customer, generally at the time of shipment of products. Under the previous revenue recognition accounting standard, the Company recognized revenue upon transfer of title and risk of loss, generally upon the delivery of goods. ● Consulting Services are earned through various arrangements. The Company applies the five-step process outlined in ASC 606 when recognizing revenue with regards to the consulting services: ○ The Company enters into a written consulting agreement with a customer to provide professional services and has an enforceable right to payment for its performance completed to date; ○ All of the promised services are identified to determine whether those services represent performance obligations; ○ In consideration for the services to be rendered, the Company expects to receive incremental payments during the term of the agreement; ○ Payments are estimated for each performance obligation and allocated in accordance with payment terms; and ○ The nature of the consulting services is such that the customer will receive benefits of the Company’s performance only when the customer receives the professional services. Consequently, the entity recognizes revenue over time by measuring the progress toward complete satisfaction of the performance obligation. ● Plasma Arc Flow Units Revenue generated from sales of each unit is recognized upon delivery and completion of the performance obligation. Significant deposits are required before production commences. These deposits are classified as customer deposits. Contract Balances The timing of revenue recognition may differ from the timing of payment by customers. The Company records a receivable when revenue is recognized prior to payment and there is an unconditional right to payment. The following table represents external net sales disaggregated by product category for the six months ended June 30, 2019 2018 Gas sold $ 7,692,546 $ 2,520,106 Equipment rentals 473,067 135,058 Equipment sales 2,371,461 1,398,533 Other 236,319 25,767 Total Revenues from Customers 10,773,393 4,079,464 Preferred Stock The Company applies the accounting standards for distinguishing liabilities from equity under U.S. GAAP when determining the classification and measurement of its Preferred stock. Preferred shares subject to mandatory redemption are classified as liability instruments and are measured at fair value. Conditionally redeemable preferred shares (including preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, preferred shares are classified as permanent equity. Stock-Based Compensation The Company accounts for stock-based compensation costs under the provisions of Accounting Standards Codification 718, “Compensation—Stock Compensation” (“ASC 718”), which requires the measurement and recognition of compensation expense related to the fair value of stock-based compensation awards that are ultimately expected to vest. Stock based compensation expense recognized includes the compensation cost for all stock-based payments granted to employees, officers, and directors based on the grant date fair value estimated in accordance with the provisions of ASC 718. ASC 718 is also applied to awards modified, repurchased, or canceled during the periods reported. The Company incurred stock-based compensation charges for employees, officers and directors of $526,824 and $221,257 for the three months ended June 30, 2019 and 2018, respectively, $744,520 and $221,257 for the six months ended June 30, 2019 and 2018, respectively, and has included such amounts in selling, general and administrative expenses in the unaudited condensed consolidated statement of operations. The Company incurred stock-based compensation charges for non-employees, net of estimated forfeitures of $1,670,876 and $490,758 for the three months ended June 30, 2019 and 2018, respectively, and $3,309,504 and $839,983 for the six months ended June 30, 2019 and 2018, respectively, and has included such amounts in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations. Basic and Diluted Net (Loss) per Common Share Basic (loss) per common share is computed by dividing the net (loss) by the weighted average number of shares of common stock outstanding for each period. Diluted (loss) per share is computed by dividing the net (loss) by the weighted average number of shares of common stock outstanding plus the dilutive effect of shares issuable through the common stock equivalents. As of June 30, 2019, and 2018 the Company’s common stock equivalents outstanding were as follows: June 30, 2019 2018 Options 11,491 11,554 Common Stock Warrants 12,766,528 11,111 Convertible preferred stock - 149,531 Total common stock equivalents outstanding 12,778,019 172,196 Subsequent Events The Company evaluates events that have occurred after the balance sheet date, but prior to the date the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements, except as disclosed in Note 11. Recent Accounting Standards In August 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement. ASU 2018-13 modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The amendments in ASU 2018-13 will be effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. An entity is permitted to early adopt any removed or modified disclosures upon issuance of ASU No. 2018-13 and delay adoption of the additional disclosures until their effective date. The Company is currently evaluating the potential impact of adopting this guidance on its consolidated financial statements. In April 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. ASU 2019-04 provides further Updates related to financial instruments, following Updates 2016-01, 2016-13 and 2017-12. The amendments in ASU 2019-04 will be effective as of the beginning of the first annual reporting period beginning after April 25, 2019. Early adoption is permitted, including adoption on any date on or after April 25, 2019. The Company is currently evaluating the potential impact of adopting this guidance on its consolidated financial statements. In May 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-05, Financial Instruments – Credit Losses (Topic 362): Targeted Transition Relief. ASU 2019-05 is an update to ASU 2016-13, Financial Instruments – Credit Losses (Topic 362): Measurement of Credit Losses on Financial Instruments. The amendments in ASU 2019-05 will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted in any interim period after the issuance of this Update as long as an entity has adopted the amendments in Update 2016-13. The Company is currently evaluating the potential impact of adopting this guidance on its consolidated financial statements. In July 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-07, Codification Updates to SEC Sections. ASU 2019-07 provides amendments to SEC paragraphs pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification Investment Company Reporting Modernization |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 4 – ACQUISITIONS January Stock Purchase: On January 16, 2019, the Company entered into a Securities Purchase Agreement (“SPA”) with Melvin Ruyle Family Living Trust (the “Seller”) and Tyler Welders Supply, Inc., a Texas corporation (“TWS”) for the purchase of all of the issued and outstanding capital stock of TWS by the Company (“Transaction”). Under the terms of the SPA, the Company purchased one hundred percent (100%) of TWS’s issued and outstanding capital stock for the gross purchase price of $2,500,000 (“TWS Stock”). Effective at closing, the Company will assume business operations at its new location in Texas. The preliminary allocation of the consideration transferred is as follows: Cash $ 2,500,000 Total purchase price $ 2,500,000 Accounts receivable $ 572,264 Cash 43,394 Inventory 571,699 Customer relationships 250,000 Cylinders and trucks 182,549 Accounts payable assumed (652,578 ) Total purchase price allocation $ 967,327 Goodwill $ 1,532,673 February Stock Purchase: On February 15, 2019, the Company entered into a Securities Purchase Agreement (“SPA”) with Melvin Ruyle, Jered Ruyle and Janson Ruyle (collectively, the “Seller”) and Cylinder Solutions, Inc., a Texas corporation (“CS”) for the purchase of all of the issued and outstanding capital stock of CS by the Company (“Transaction”). Under the terms of the SPA, the Company purchased one hundred percent (100%) of CS’s issued and outstanding capital stock for the gross purchase price of $1,500,000 (“CS Stock”). Effective at closing, the Company assumed business operations at its new location in East Texas. The preliminary allocation of the consideration transferred is as follows: Cash $ 1,500,000 Total purchase price $ 1,500,000 Accounts receivable $ 13,902 Cash 25,931 Cylinders and trucks 336,081 Accounts payable assumed (40,911 ) Total purchase price allocation $ 335,004 Goodwill $ 1,164,996 February Asset Purchase: On February 22, 2019, Taronis Technologies, Inc. (the “Company”) entered into an Asset Purchase Agreement (“Agreement”) with Complete Cutting and Welding Supplies, Inc., a California corporation (the “Seller”) for the purchase of substantially all of the Seller’s tangible and intangible business assets (“Transaction”). Under the terms of the Agreement, the Company purchased from the Seller substantially all of the Seller’s right, title an interest to the Seller’s business assets and certain other assumed liabilities. The total purchase price paid was $2,500,000 cash. The Agreement includes certain other terms and conditions which are typical in asset purchase agreements. The allocation of the consideration transferred is as follows: Cash $ 2,500,000 Total purchase price $ 2,500,000 Accounts receivable $ 455,705 Customer relationships 250,000 Cylinders and trucks 377,655 Accounts payable assumed (316,333 ) Total purchase price allocation $ 767,027 Goodwill $ 1,732,973 All goodwill recorded as part of the purchase price allocations is currently anticipated to be tax deductible. Water Pilot, LLC Stock Purchase: On May 31, 2019, the Company entered into a Limited Liability Company Unit Purchase and Sale Agreement (“Agreement”) with the sellers listed on the signature page thereto (the “Sellers”) and Water Pilot, LLC, a Florida limited liability company, for the purchase of fifty-one percent (51%) ownership in Water Pilot, LLC. The purchase price for the ownership interest or “Units” was $1,275,000 payable in shares of the Company’s restricted common stock (“Stock Consideration”). The Stock Consideration was priced based on the five (5) day Volume Weighted Average Price of the Company’s common stock immediately preceding the closing date of the Agreement. At closing, the Company was named the Manager of Water Pilot, LLC and took control of the business. The Agreement also included terms and conditions which are standard in similarly situated purchase agreements. The transaction closed on May 31, 2019. The company recorded the full amount to intangible assets. The allocation of the consideration transferred is as follows: Stock Issued $ 1,275,000 Total purchase price $ 1,275,000 Developed technology $ 1,275,000 Total purchase price allocation $ 1,275,000 Goodwill $ - The following unaudited proforma financial information presents the consolidated results of operations of the Company with NG Enterprises Acquisition, LLC, MWS Green Arc Acquisition, LLC, Trico Welding Supplies, Inc., Paris Oxygen Company, Latex Welding Supply, Inc., United Welding Specialties of Longview, Inc., Tyler Welders Supply, Cylinder Solutions, Complete Cutting and Welding Supplies and Water Pilot, LLC for the three and six months ended June 30, 2019 and 2018, as if the above discussed acquisitions had occurred on January 1, 2018 instead of January 19, 2018, February 16, 2018, April 3, 2018, October 17, 2018, October 22, 2018, October 26, 2018, January 16, 2019, February 15, 2019, February 22, 2019 and May 31, 2019, respectively. The proforma information does not necessarily reflect the results of operations that would have occurred had the entities been a single company during those periods. For the three months ended For the six months ended 2019 2018 2019 2018 Revenues 5,803,945 5,656,244 11,279,238 11,245,774 Gross Profit 2,649,752 2,531,265 5,208,232 4,635,668 Operating Loss (4,871,623 ) (3,485,788 ) (13,944,138 ) (7,023,886 ) Net Loss (4,811,602 ) (3,413,974 ) (13,863,590 ) (7,213,808 ) Weighted Average Common Stock Outstanding 27,912,957 798,608 21,742,677 559,400 Loss per Common Share – Basic and Diluted (0.17 ) (4.27 ) (0.64 ) (12.90 ) |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 5 – NOTES PAYABLE On February 22, 2019, the Company entered into a Cylinder Purchase Agreement with Guillermo Gallardo to purchase 10,000 gas cylinders. The Company made an initial purchase of 1,000 cylinders on October 18, 2018 for $300,000. The Company purchased an additional 2,334 cylinders upon execution of this agreement for $700,200. The Company agreed to purchase the remaining 6,666 cylinders for $1,999,800 over a period of two years. There is no interest associated with this agreement. The balance due as of June 30, 2019 was $1,899,800. On May 3, 2019, the Company entered into a Securities Purchase Agreement with one or more investors identified on the signature pages thereto (“ Investors Common Stock Debentures Transaction Securities Offering On June 6, 2019, the Company entered into a non-recourse Agreement for the Purchase and Sale of Future Receipts with C6 Capital Funding, LLC. The Company sold $600,000 in future receipts at a purchase price of $828,000 with weekly payments of $24,645 until the sold amount is delivered. The balance due as of June 30, 2019 was $803,355. The Company made one payment of $24,645 during the six months ended June 30, 2019. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 6 - STOCKHOLDERS’ EQUITY Reverse Stock Splits On January 30, 2019, the Company filed an amendment to the Certificate of Incorporation to effect a one-for-twenty reverse split of the Company’s issued and outstanding common stock which was effectuated on January 30, 2019. The reverse stock splits did not modify the rights or preferences of the common stock. Proportional adjustments have been made to the conversion and exercise prices of the Company’s outstanding common stock warrants, convertible notes, common stock options. The number of shares of common stock issuable under the Company’s equity compensation plan was not impacted by the reverse split. The Company did not issue any fractional shares in connection with the reverse stock splits or change the par value per share. Fractional shares issuable entitle shareholders, to receive a cash payment in lieu of the fractional shares without interest. All share and per share amounts for the common stock have been retroactively restated to give effect to the reverse splits. Common Shares Issued for Cash January Securities Purchase Agreement On January 11, 2019, the Company entered into a Securities Purchase Agreement (“SPA”) with one or more investors identified on the signature pages thereto (“Investors”). Under the terms of the SPA, the Company issued an aggregate of 1,550,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) and warrants to purchase up to 1,550,000 shares of Common Stock (“Warrants”) for a total gross purchase price of $4,340,000 (exclusive of the exercise of the Warrants) (the “Offering”). The Company received aggregate net proceeds of approximately $4,029,600. The sale of the Common Stock at a price of $2.80 per share was made pursuant to a prospectus supplement and accompanying base prospectus relating to the Company’s shelf registration statement on Form S-3. February Underwriting Agreement On February 8, 2019, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with Maxim Group LLC (the “Underwriter”) to issue and sell an aggregate of 10,800,000 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (“Common Stock”) and warrants to purchase an aggregate of up to 8,100,000 shares of Common Stock (the “Warrants”), in an underwritten public offering, for a total gross purchase price of $13,500,000. The combined price to the public in the offering for each Share and accompanying Warrant to purchase 0.75 shares of Common stock is $1.25. The offering was made pursuant to the Company’s registration statement on Form S-3 and a prospectus supplement thereunder. During the six months ended June 30, 2019, the Company received total proceeds of $17,840,000 and issued 12,350,000 common shares. June Sales Agreement On June 6, 2019, the Company entered into a Sales Agreement (“Agreement”) with The Benchmark Company, LLC (the “Agent”) pursuant to which the Agent will act as the Company’s sales agent with respect to the issuance and sale of up to $7,280,000 of the Company’s shares of common stock, par value $0.001 per share (the “Shares”), from time to time in an at-the-market public offering (the “Offering”). Sales of the Shares, if any, through the Agent, were made directly on The Nasdaq Capital Market. The Shares were sold and issued pursuant the Company’s shelf registration statement on Form S-3 and a related prospectus supplement. During the six months ended June 30, 2019, the company sold 9,032,090 shares of common stock for total gross proceeds of $1,872,379 with the at-the-market public offering. Common Shares Issued for Services During the three and six months ended June 30, 2019, the Company issued 5,618,496 and 9,199,908 shares of common stock to consultants, respectively. The total fair value of these issuances during the three and six months ended June 30, 2019 was $2,197,699 and $4,040,112, respectively, which was recognized as stock-based compensation during the three and six months ended June 30, 2019. During the three and six months ended June 30, 2018, the Company issued 57,758 and 89,341 shares of common stock to consultants, respectively. The total fair value of these issuances during the three and six months ended June 30, 2018 was $712,014 and $1,061,239, respectively, which was recognized as stock-based compensation during the three and six months ended June 30, 2018. |
Preferred Stock
Preferred Stock | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Preferred Stock | NOTE 7 – PREFERRED STOCK On March 8, 2019, the Company entered into a Purchase and Conversion Agreement (the “Agreement”) with an institutional investor for (a) the repurchase by the Company of 499 shares of its Series C Preferred Stock (the “Series C Preferred”) and 31,765 shares of its Series E Preferred Stock (the “Series E Preferred”) from the investor, in exchange for an aggregate cash payment of $3,500,000, and (b) the conversion by the investor of 5,000 shares of Series E Preferred into 500,000 shares of common stock of the Company, par value $0.001 per share (collectively, the “Transaction”). Effective at closing, the classes of Series C Preferred and the Series E Preferred were cancelled and the Company no longer has any preferred shares of any class issued and outstanding. |
Common Stock Warrants
Common Stock Warrants | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Common Stock Warrants | NOTE 8 – COMMON STOCK WARRANTS On January 11, 2019, in conjunction with that certain Securities Purchase Agreement entered into on the same date, the Company granted certain institutional investors warrants to purchase up to 1,550,000 shares of Common Stock at an exercise price of $4.64 per warrant share. On February 8, 2019, in conjunction with that certain Underwriting Agreement entered into on the same date, the Company granted certain investors warrants to purchase an aggregate of up to 8,932,500 shares of Common Stock in an underwritten public offering. The exercise price of the warrants is $0.14 per warrant share due to a price reset triggered by the at-the-market transaction. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 9 - COMMITMENTS AND CONTINGENCIES Litigation Certain conditions may exist as of the date the consolidated financial statements are issued which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed, unless they involve guarantees, in which case the guarantees would be disclosed. There can be no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. It is possible that we may be subject to litigation or claims for indemnification in connection with the sale of our common stock in inadvertent unregistered transactions that occurred in 2018. The SEC may determine to investigate the unregistered transactions in our common stock, which could subject us to potential enforcement actions by the SEC under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”) and may result in injunctive relief or the imposition of fines. In addition, it is possible that we had other unregistered offers or sales of our common stock, other than the aforementioned inadvertent unregistered transactions that occurred in 2018, and we may be subject to litigation or claims for indemnification in connection with any such offers or sales. If any such claims were to succeed, we might not have sufficient funds to pay the resulting damages. There can be no assurance that the insurance coverage we maintain would cover any such expenses or be sufficient to cover any claims against us. In addition to the monetary value of any claim, any litigation, regulatory action or governmental proceeding to which we are a party could adversely affect us by harming our reputation, diverting the time and attention of management, and causing the Company to incur significant litigation expenses, which would all materially and adversely affect our business. In addition, we may be a party to litigation matters involving our business, which operates within a highly regulated industry. On September 4, 2018, we received notice that a law firm representing the estate of an individual who sustained life-ending injuries while working for an end user of our products had made a claim to our insurance carrier. The matter is under investigation by the U.S. Department of Transportation and the Occupational Health and Safety Administration. The Company is still investigating the cause of the accident and there have been no conclusive findings as of this time. It is unknown whether the final cause of the accident will be determined and whether those findings will negatively impact Company operations or sales. The Company continues to be fully operational and transparent with all regulatory agencies. In addition, on April 15, 2019, we received notice that a class action lawsuit was filed on behalf of our shareholders who purchased shares of the Company, f/k/a MagneGas Applied Technology Solutions, Inc. from January 28, 2019 through February 12, 2019, inclusive. The lawsuit seeks to recover damages for the Company’s investors under the federal securities laws. The litigation is in the early stages and it is unknown whether it will have a financial impact on the Company. On June 25, 2019, a shareholder derivative complaint was filed against certain of the Company’s directors and officers in the United States District Court for the District of Arizona. The case is captioned Falcone v. Dingess, et al., No. CV-19-04547-PHX-DJH (D. Ariz.). The complaint alleges, among other things, that the defendants violated federal securities laws, including Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, by making alleged false and/or misleading statements and failing to disclose certain information regarding the Company’s business with the City of San Diego. The factual allegations upon which these claims are based are similar to the factual allegations made in the class action lawsuit filed against the Company on April 15, 2019. The Company has not accrued for any liability related to this lawsuit at this time. As of June 30, 2019, the Company has not accrued for any litigation contingency. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | NOTE 10 – LEASES The Company has entered into various operating and finance lease agreements. The finance lease agreements The Company currently has seventeen office leases. The first operating lease is for its welding supply store in Clearwater, FL, effective September 1, 2018, for ten years. The initial lease rate was $6,728 per month with escalating payments. The second operating lease is for its welding supply store in Spring Hill, FL. This lease was effective May 1, 2018 and will end on April 30, 2019. The current lease rate is $1,338 per month. The third operating lease is for its welding supply store in Lakeland, FL, from March 31, 2016 through March 31, 2020. The initial lease rate was $2,100 per month with escalating payments. The fourth operating lease is for its welding supply store in Sarasota, FL, from August 1, 2016 through July 31, 2021. The current lease rate is $1,700 per month. The fifth operating lease is for its welding supply store in Sulphur Springs, TX, from February 1, 2019 through January 31, 2020. The current lease rate is $2,000 per month. The sixth operating lease is for its welding supply store in Woodland, CA, from April 4, 2018 through April 3, 2019. The current lease rate is $14,000 per month. The seventh operating lease is for its gas fill plant in Flint, TX, from August 24, 2015 through August 23, 2020. The current lease rate is $900 per month. The eighth operating lease is for its storage facility in Flint, TX, from August 1, 2016 through August 23, 2020. The current lease rate is $5,500 per month. The ninth operating lease is for its welding supply store in Shreveport, LA, from December 1, 2015 through May 31, 2021. The initial lease rate was $2,846 per month with escalating payments. The tenth operating lease is for its welding supply store in Palestine, TX, from August 13, 2015 through August 12, 2020. The current lease rate is $1,800 per month. The eleventh operating lease is for its welding supply store in Paris, TX, from October 18, 2018 through October 17, 2020. The current lease rate is $3,000 per month. The twelfth operating lease is for its welding supply store in Longview, TX, from October 27, 2018 through October 26, 2020. The current lease rate is $2,000 per month. The thirteenth operating lease is for its cylinder repair shop in Tyler, TX, from February 16, 2019 through February 15, 2020. The current lease rate is $2,500 per month. The fourteenth operating lease is for its welding supply store in Tyler, TX, from January 17, 2019 through January 16, 2020. The current lease rate is $6,500 per month. The fifteenth operating lease is for its welding supply store in Compton, CA, from February 22, 2019 through October 31, 2026. The current lease rate is $29,400 per month. The sixteenth operating lease is for its welding supply store in Pomona, CA, from February 22, 2019 through October 31, 2026. The current lease rate is $11,200 per month. The seventeenth operating lease is for its welding supply store in Oxnard, CA, from February 22, 2019 through February 1, 2020. The initial lease rate was $3,394 per month with escalating payments. The eighteenth operating lease is for its welding supply store in Lynwood, CA, from April 1, 2019 through September 30, 2023. The initial lease rate was $2,000 per month with escalating payments. The Company has no other operating with terms greater than 12 months. The Company adopted ASC Topic 842 effective January 1, 2019 using the prospective approach. In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 months or less. On January 1, 2019, upon adoption of ASC Topic 842, the Company recorded right-of-use asset of $4,037,472, lease liability of $4,037,472 and eliminated deferred rent of $0. The Company determined the lease liability using the Company’s estimated incremental borrowing rate of 8.0% to estimate the present value of the remaining monthly lease payments. Supplemental balance sheet information related to leases was as follows: Operating Leases: Operating lease right-of-use assets $ 3,750,420 Current portion included in current liabilities $ 670,055 Long-term portion included in non-current liabilities 3,080,365 Total operating lease liabilities $ 3,750,420 Finance Leases: Property and equipment, gross $ 414,685 Accumulated depreciation (166,240 ) Property and equipment, net $ 248,445 Other current liabilities $ 90,303 Other long-term liabilities 158,142 Total finance lease liabilities $ 248,445 Supplemental lease expense related to leases was as follows: For the Three Months For the Six Months Operating lease expense $ 319,935 $ 473,566 Finance lease expense: Amortization of right-of-use assets $ 19,068 $ 38,136 Interest on lease liabilities 2,930 6,083 Total finance lease expense $ 21,998 $ 44,219 Total lease expense $ 341,933 $ 517,785 Other information related to leases where the Company is the lessee is as follows: For the Six Months Weighted average remaining lease term: Operating leases 6.5 years Finance leases Weighted average discount rate: Operating leases 2.5 % Finance leases 4.7 % Supplemental cash flow information related to leases was as follows: For the Three Months For the Six Months Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 261,248 $ 509,691 Operating cash flows from finance leases (interest payments) 2,930 6,083 Financing cash flows from finance leases 22,576 45,152 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 104,537 $ 3,024,084 Finance leases - - Maturities of lease liabilities were as follows: Operating Leases Finance Leases Remainder of 2019 $ 509,798 $ 50,330 2020 801,911 91,420 2021 626,571 70,820 2022 595,541 40,034 Thereafter 2,361,431 15,236 Total lease payments 4,895,252 267,840 Less: Present value adjustment (1,144,832 ) (19,395 ) Total liability $ 3,750,420 $ 248,445 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 11 – SUBSEQUENT EVENTS May Securities Purchase Agreement During the period of July 1, 2019 through the date of this filing, YA Global elected to convert $999,915 of the Principal and Interest into 3,847,927 shares of common stock. The principal amount of debenture unconverted is $522,248 as of the date of this filing. June Sales Agreement During the period of July 1, 2019 through the date of this filing, the company sold 25,490,910 shares of common stock for total gross proceeds of $5,407,429 with the at-the-market public offering. This completes the Sales Agreement with The Benchmark Company, LLC. Consultants During the period of July 1, 2019 through the date of this filing, the Company issued 2,428,863 shares of common stock to various consultants as compensation for their services. Settlement Agreement On July 23, 2019, the Company entered into a Settlement and Mutual Release Agreement with its former employee and director Ermanno Santilli. Pursuant to the agreement, Ermanno Santilli was awarded an aggregate amount of $523,146, which included 393,154 shares of restricted common stock at an approximate fair value of $170,000. At the time of this filing, the settlement was paid in full. Warrants Exercised During the period of July 1, 2019 through the date of this filing, the company issued 8,378,250 shares of common stock for CMPO warrants exercised for total proceeds of $1,172,955. During the period of July 1, 2019 through the date of this filing, the company issued 1,162,500 shares of common stock for warrants exercised from the January 2019 securities purchase agreement for total proceeds of $0. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information and include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended June 30, 2019 and 2018. As this is an interim period financial statement, certain adjustments are not necessary as with a financial period of a full year. Although management believes that the disclosures in these unaudited condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s financial statements for the year ended December 31, 2018, which contains the audited financial statements and notes thereto, for the years ended December 31, 2018 and 2017 included within the Company’s Form 10-K filed with the SEC on April 12, 2019. The interim results for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the year ended December 31, 2019 or for any future interim periods. |
Use of Estimates | Use of Estimates The Company prepares its financial statements in conformity with U.S. GAAP. These principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that these estimates are reasonable; however, actual results could differ from those estimates. The consolidated financial statements presented include intangible assets, goodwill, fair value of assets and liabilities related to acquisitions, recoverability of deferred tax assets, collection of its receivables and the useful life of property, plant and equipment. |
Business Combinations | Business Combinations The Company accounts for business combinations under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805 “Business Combinations” using the acquisition method of accounting, and accordingly, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition. The excess of the purchase price over the estimated fair value is recorded as goodwill. All acquisition costs are expensed as incurred. Upon acquisition, the accounts and results of operations are consolidated as of and subsequent to the acquisition date. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that subject the Company to credit risk consist principally of trade accounts receivable and cash. The Company performs certain credit evaluation procedures and does not require collateral for financial instruments subject to credit risk. The Company believes that credit risk is limited because the Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk of its customers, establishes an allowance for uncollectible accounts and, consequently, believes that its accounts receivable credit risk exposure beyond such allowances is limited. The Company maintains cash deposits with financial institutions which are insured by the Federal Deposit Insurance Corporation (“FDIC”), which, from time to time, may exceed federally insured limits. Cash is also maintained at foreign financial institutions. Cash in foreign financial institutions as of June 30, 2019 was $816,466. The Company has not experienced any losses and believes it is not exposed to significant credit risk from cash. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash, checking accounts, money market accounts and temporary investments with original maturities of three months or less when purchased. As of June 30, 2019, and 2018 the Company had no cash equivalents. Restricted cash consists of cash deposited with a financial institution for $816,466 held in an escrow account. The following table provides a reconciliation of cash and restricted cash reported in the unaudited condensed consolidated balance sheets that sum to the total of the same amounts show in the statement of cash flows. June 30, 2019 2018 Cash 1,635,862 1,147,522 Restricted deposits 816,466 - Total cash and restricted cash in the balance sheet 2,452,328 1,147,522 |
Revenue Recognition | Revenue Recognition The Company follows the guidance of ASC Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”). The revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. Revenues under Topic 606 are required to be recognized either at a “point in time” or “over time”, depending on the facts and circumstances of the arrangement, and will be evaluated using a five-step model. The Company principally generates revenue through three operating streams: (1) the sale of MagneGas fuel for metal cutting and through the sales of other industrial and specialty gases and related products through the Company’s wholly owned subsidiaries, (2) by providing consulting services and (3) through the sales of the Plasma Arc Flow Systems. The Company’s revenue recognition policy is as follows: ● Revenue for metal-working fuel, industrial gases and welding supplies is recognized when performance obligations of the sale are satisfied. The majority of the Company’s terms of sale have a single performance obligation to transfer products. Accordingly, the Company recognizes revenue when control has been transferred to the customer, generally at the time of shipment of products. Under the previous revenue recognition accounting standard, the Company recognized revenue upon transfer of title and risk of loss, generally upon the delivery of goods. ● Consulting Services are earned through various arrangements. The Company applies the five-step process outlined in ASC 606 when recognizing revenue with regards to the consulting services: ○ The Company enters into a written consulting agreement with a customer to provide professional services and has an enforceable right to payment for its performance completed to date; ○ All of the promised services are identified to determine whether those services represent performance obligations; ○ In consideration for the services to be rendered, the Company expects to receive incremental payments during the term of the agreement; ○ Payments are estimated for each performance obligation and allocated in accordance with payment terms; and ○ The nature of the consulting services is such that the customer will receive benefits of the Company’s performance only when the customer receives the professional services. Consequently, the entity recognizes revenue over time by measuring the progress toward complete satisfaction of the performance obligation. ● Plasma Arc Flow Units Revenue generated from sales of each unit is recognized upon delivery and completion of the performance obligation. Significant deposits are required before production commences. These deposits are classified as customer deposits. |
Contract Balances | Contract Balances The timing of revenue recognition may differ from the timing of payment by customers. The Company records a receivable when revenue is recognized prior to payment and there is an unconditional right to payment. The following table represents external net sales disaggregated by product category for the six months ended June 30, 2019 2018 Gas sold $ 7,692,546 $ 2,520,106 Equipment rentals 473,067 135,058 Equipment sales 2,371,461 1,398,533 Other 236,319 25,767 Total Revenues from Customers 10,773,393 4,079,464 |
Preferred Stock | Preferred Stock The Company applies the accounting standards for distinguishing liabilities from equity under U.S. GAAP when determining the classification and measurement of its Preferred stock. Preferred shares subject to mandatory redemption are classified as liability instruments and are measured at fair value. Conditionally redeemable preferred shares (including preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, preferred shares are classified as permanent equity. |
Stock-based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation costs under the provisions of Accounting Standards Codification 718, “Compensation—Stock Compensation” (“ASC 718”), which requires the measurement and recognition of compensation expense related to the fair value of stock-based compensation awards that are ultimately expected to vest. Stock based compensation expense recognized includes the compensation cost for all stock-based payments granted to employees, officers, and directors based on the grant date fair value estimated in accordance with the provisions of ASC 718. ASC 718 is also applied to awards modified, repurchased, or canceled during the periods reported. The Company incurred stock-based compensation charges for employees, officers and directors of $526,824 and $221,257 for the three months ended June 30, 2019 and 2018, respectively, $744,520 and $221,257 for the six months ended June 30, 2019 and 2018, respectively, and has included such amounts in selling, general and administrative expenses in the unaudited condensed consolidated statement of operations. The Company incurred stock-based compensation charges for non-employees, net of estimated forfeitures of $1,670,876 and $490,758 for the three months ended June 30, 2019 and 2018, respectively, and $3,309,504 and $839,983 for the six months ended June 30, 2019 and 2018, respectively, and has included such amounts in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations. |
Basic and Diluted Net (loss) Per Common Share | Basic and Diluted Net (Loss) per Common Share Basic (loss) per common share is computed by dividing the net (loss) by the weighted average number of shares of common stock outstanding for each period. Diluted (loss) per share is computed by dividing the net (loss) by the weighted average number of shares of common stock outstanding plus the dilutive effect of shares issuable through the common stock equivalents. As of June 30, 2019, and 2018 the Company’s common stock equivalents outstanding were as follows: June 30, 2019 2018 Options 11,491 11,554 Common Stock Warrants 12,766,528 11,111 Convertible preferred stock - 149,531 Total common stock equivalents outstanding 12,778,019 172,196 |
Subsequent Events | Subsequent Events The Company evaluates events that have occurred after the balance sheet date, but prior to the date the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements, except as disclosed in Note 11. |
Recent Accounting Standards | Recent Accounting Standards In August 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement. ASU 2018-13 modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The amendments in ASU 2018-13 will be effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. An entity is permitted to early adopt any removed or modified disclosures upon issuance of ASU No. 2018-13 and delay adoption of the additional disclosures until their effective date. The Company is currently evaluating the potential impact of adopting this guidance on its consolidated financial statements. In April 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. ASU 2019-04 provides further Updates related to financial instruments, following Updates 2016-01, 2016-13 and 2017-12. The amendments in ASU 2019-04 will be effective as of the beginning of the first annual reporting period beginning after April 25, 2019. Early adoption is permitted, including adoption on any date on or after April 25, 2019. The Company is currently evaluating the potential impact of adopting this guidance on its consolidated financial statements. In May 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-05, Financial Instruments – Credit Losses (Topic 362): Targeted Transition Relief. ASU 2019-05 is an update to ASU 2016-13, Financial Instruments – Credit Losses (Topic 362): Measurement of Credit Losses on Financial Instruments. The amendments in ASU 2019-05 will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted in any interim period after the issuance of this Update as long as an entity has adopted the amendments in Update 2016-13. The Company is currently evaluating the potential impact of adopting this guidance on its consolidated financial statements. In July 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-07, Codification Updates to SEC Sections. ASU 2019-07 provides amendments to SEC paragraphs pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification Investment Company Reporting Modernization |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Reconciliation Statement of Cash Flows | The following table provides a reconciliation of cash and restricted cash reported in the unaudited condensed consolidated balance sheets that sum to the total of the same amounts show in the statement of cash flows. June 30, 2019 2018 Cash 1,635,862 1,147,522 Restricted deposits 816,466 - Total cash and restricted cash in the balance sheet 2,452,328 1,147,522 |
Schedule of Net Sales Disaggregation by Product Category | The following table represents external net sales disaggregated by product category for the six months ended June 30, 2019 2018 Gas sold $ 7,692,546 $ 2,520,106 Equipment rentals 473,067 135,058 Equipment sales 2,371,461 1,398,533 Other 236,319 25,767 Total Revenues from Customers 10,773,393 4,079,464 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | As of June 30, 2019, and 2018 the Company’s common stock equivalents outstanding were as follows: June 30, 2019 2018 Options 11,491 11,554 Common Stock Warrants 12,766,528 11,111 Convertible preferred stock - 149,531 Total common stock equivalents outstanding 12,778,019 172,196 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Allocation of Consideration Transferred | The preliminary allocation of the consideration transferred is as follows: Cash $ 2,500,000 Total purchase price $ 2,500,000 Accounts receivable $ 572,264 Cash 43,394 Inventory 571,699 Customer relationships 250,000 Cylinders and trucks 182,549 Accounts payable assumed (652,578 ) Total purchase price allocation $ 967,327 Goodwill $ 1,532,673 The preliminary allocation of the consideration transferred is as follows: Cash $ 1,500,000 Total purchase price $ 1,500,000 Accounts receivable $ 13,902 Cash 25,931 Cylinders and trucks 336,081 Accounts payable assumed (40,911 ) Total purchase price allocation $ 335,004 Goodwill $ 1,164,996 The allocation of the consideration transferred is as follows: Cash $ 2,500,000 Total purchase price $ 2,500,000 Accounts receivable $ 455,705 Customer relationships 250,000 Cylinders and trucks 377,655 Accounts payable assumed (316,333 ) Total purchase price allocation $ 767,027 Goodwill $ 1,732,973 The allocation of the consideration transferred is as follows: Stock Issued $ 1,275,000 Total purchase price $ 1,275,000 Developed technology $ 1,275,000 Total purchase price allocation $ 1,275,000 Goodwill $ - |
Schedule of Proforma Information of Operations | The proforma information does not necessarily reflect the results of operations that would have occurred had the entities been a single company during those periods. For the three months ended For the six months ended 2019 2018 2019 2018 Revenues 5,803,945 5,656,244 11,279,238 11,245,774 Gross Profit 2,649,752 2,531,265 5,208,232 4,635,668 Operating Loss (4,871,623 ) (3,485,788 ) (13,944,138 ) (7,023,886 ) Net Loss (4,811,602 ) (3,413,974 ) (13,863,590 ) (7,213,808 ) Weighted Average Common Stock Outstanding 27,912,957 798,608 21,742,677 559,400 Loss per Common Share – Basic and Diluted (0.17 ) (4.27 ) (0.64 ) (12.90 ) |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: Operating Leases: Operating lease right-of-use assets $ 3,750,420 Current portion included in current liabilities $ 670,055 Long-term portion included in non-current liabilities 3,080,365 Total operating lease liabilities $ 3,750,420 Finance Leases: Property and equipment, gross $ 414,685 Accumulated depreciation (166,240 ) Property and equipment, net $ 248,445 Other current liabilities $ 90,303 Other long-term liabilities 158,142 Total finance lease liabilities $ 248,445 |
Supplemental Lease Expense Related to Leases | Supplemental lease expense related to leases was as follows: For the Three Months For the Six Months Operating lease expense $ 319,935 $ 473,566 Finance lease expense: Amortization of right-of-use assets $ 19,068 $ 38,136 Interest on lease liabilities 2,930 6,083 Total finance lease expense $ 21,998 $ 44,219 Total lease expense $ 341,933 $ 517,785 |
Schedule of Other Information Related to Leases | Other information related to leases where the Company is the lessee is as follows: For the Six Months Weighted average remaining lease term: Operating leases 6.5 years Finance leases Weighted average discount rate: Operating leases 2.5 % Finance leases 4.7 % |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows: For the Three Months For the Six Months Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 261,248 $ 509,691 Operating cash flows from finance leases (interest payments) 2,930 6,083 Financing cash flows from finance leases 22,576 45,152 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 104,537 $ 3,024,084 Finance leases - - |
Schedule of Operating Lease Maturity | Maturities of lease liabilities were as follows: Operating Leases Finance Leases Remainder of 2019 $ 509,798 $ 50,330 2020 801,911 91,420 2021 626,571 70,820 2022 595,541 40,034 Thereafter 2,361,431 15,236 Total lease payments 4,895,252 267,840 Less: Present value adjustment (1,144,832 ) (19,395 ) Total liability $ 3,750,420 $ 248,445 |
Going Concern and Managements_2
Going Concern and Managements' Plan (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
Cash | $ 1,635,862 | $ 1,147,522 | $ 1,635,862 | $ 1,147,522 | $ 1,598,737 | ||
Net loss | 5,374,828 | $ 6,162,398 | $ 3,495,061 | $ 3,019,441 | 11,537,226 | 6,514,500 | |
Cash in operation | 6,252,234 | $ 3,974,246 | |||||
Working capital | 857,696 | 857,696 | |||||
Accumulated deficit | $ 91,156,937 | 91,156,937 | $ 79,619,711 | ||||
Cash burn rate amount | $ 1,000,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Cash in foreign financial institution | $ 816,466 | $ 816,466 | |||
Cash equivalents | |||||
Restricted deposit | 816,466 | 816,466 | $ 806,466 | ||
Stock based compensation | 526,824 | 221,257 | |||
Employees [Member] | |||||
Stock based compensation | 526,824 | 221,257 | 744,520 | 221,257 | |
Non-Employee [Member] | |||||
Stock based compensation | $ 1,670,876 | $ 490,758 | $ 3,309,504 | $ 839,983 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Reconciliation Statement of Cash Flows (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
Accounting Policies [Abstract] | |||
Cash | $ 1,635,862 | $ 1,598,737 | $ 1,147,522 |
Restricted deposits | 816,466 | $ 806,466 | |
Total cash and restricted cash in the balance sheet | $ 2,452,328 | $ 1,147,522 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Net Sales Disaggregation by Product Category (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues from Customers | $ 5,860,061 | $ 2,907,712 | $ 10,773,393 | $ 4,079,464 |
Sales Revenue [Member] | ||||
Revenues from Customers | 10,773,393 | 4,079,464 | ||
Sales Revenue [Member] | Gas Sold [Member] | ||||
Revenues from Customers | 7,692,546 | 2,520,106 | ||
Sales Revenue [Member] | Equipment Rentals [Member] | ||||
Revenues from Customers | 473,067 | 135,058 | ||
Sales Revenue [Member] | Equipment Sales [Member] | ||||
Revenues from Customers | 2,371,461 | 1,398,533 | ||
Sales Revenue [Member] | Other [Member] | ||||
Revenues from Customers | $ 236,319 | $ 25,767 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Total common stock equivalents outstanding | 12,778,019 | 172,196 |
Options [Member] | ||
Total common stock equivalents outstanding | 11,491 | 11,554 |
Common Stock Warrants [Member] | ||
Total common stock equivalents outstanding | 12,766,528 | 11,111 |
Convertible Preferred Stock [Member] | ||
Total common stock equivalents outstanding | 149,531 |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | May 31, 2019 | Feb. 22, 2019 | Feb. 15, 2019 | Jan. 16, 2019 |
Total purchase price | $ 1,275,000 | $ 2,500,000 | $ 1,500,000 | $ 2,500,000 |
Securities Purchase Agreement [Member] | Texas Corporation [Member] | ||||
Ownership percentage | 100.00% | |||
Gross purchase price of capital stock purchase | $ 2,500,000 | |||
Securities Purchase Agreement [Member] | Cylinder Solutions, Inc [Member] | Melvin Ruyle, Jered Ruyle and Janson Ruyle (Seller's) [Member] | ||||
Ownership percentage | 100.00% | |||
Gross purchase price of capital stock purchase | $ 1,500,000 | |||
Asset Purchase Agreement [Member] | Taronis Technologies, Inc [Member] | ||||
Total purchase price | $ 2,500,000 | |||
Unit Purchase and Sale Agreement [Member] | Water Pilot, LLC [Member] | ||||
Ownership percentage | 51.00% | |||
Gross purchase price of capital stock purchase | $ 1,275,000 |
Acquisitions - Schedule of Allo
Acquisitions - Schedule of Allocation of Consideration Transferred (Details) - USD ($) | May 31, 2019 | Feb. 22, 2019 | Feb. 15, 2019 | Jan. 16, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Business Combinations [Abstract] | |||||||
Cash | $ 2,500,000 | $ 1,500,000 | $ 2,500,000 | ||||
Total purchase price | $ 1,275,000 | 2,500,000 | 1,500,000 | 2,500,000 | |||
Accounts Receivable | 455,705 | 13,902 | 572,264 | ||||
Cash | 25,931 | 43,394 | |||||
Inventory | 571,699 | ||||||
Customer relationships | 250,000 | 250,000 | |||||
Cylinders and trucks | 377,655 | 336,081 | 182,549 | ||||
Accounts payable assumed | (316,333) | (40,911) | (652,578) | ||||
Total purchase price allocation | 1,275,000 | 767,027 | 335,004 | 967,327 | |||
Stock Issued | 1,275,000 | $ 2,484,336 | $ 17,840,000 | ||||
Developed technology | 1,275,000 | ||||||
Goodwill | $ 1,732,973 | $ 1,164,996 | $ 1,532,673 | $ 11,123,231 | $ 6,690,724 |
Acquisitions - Schedule of Prof
Acquisitions - Schedule of Proforma Information of Operations (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Business Combinations [Abstract] | ||||
Revenues | $ 5,803,945 | $ 5,656,244 | $ 11,279,238 | $ 11,245,774 |
Gross Profit | 2,649,752 | 2,531,265 | 5,208,232 | 4,635,668 |
Operating Loss | (4,871,623) | (3,485,788) | (13,944,138) | (7,023,886) |
Net Loss | $ (4,811,602) | $ (3,413,974) | $ (13,863,590) | $ (7,213,808) |
Weighted Average Common Stock Outstanding | 27,912,957 | 798,608 | 21,742,677 | 559,400 |
Loss per Common Share – Basic and Diluted | $ (0.17) | $ (4.27) | $ (0.64) | $ (12.90) |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) | Jun. 06, 2019USD ($) | May 31, 2019USD ($) | May 03, 2019USD ($)$ / sharesshares | Feb. 22, 2019USD ($)Number | Oct. 18, 2018USD ($)Number | Jun. 30, 2019USD ($)$ / shares | Mar. 31, 2019USD ($) | Jun. 30, 2019USD ($)$ / shares | Dec. 31, 2018$ / shares |
Notes payable | $ 803,355 | $ 803,355 | |||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Number of common stock issued during period, value | $ 1,275,000 | $ 2,484,336 | $ 17,840,000 | ||||||
Notes Payable [Member] | |||||||||
Repayment of debt | $ 24,645 | ||||||||
Cylinder Purchase Agreement [Member] | |||||||||
Number of cylinder purchase | Number | 10,000 | 1,000 | |||||||
Payments to acquire cylinders | $ 300,000 | ||||||||
Notes payable | $ 1,899,800 | $ 1,899,800 | |||||||
Cylinder Purchase Agreement [Member] | Additional Cylinders [Member] | |||||||||
Number of cylinder purchase | Number | 2,334 | ||||||||
Payments to acquire cylinders | $ 700,200 | ||||||||
Cylinder Purchase Agreement [Member] | Remaining Cylinders [Member] | |||||||||
Number of cylinder purchase | Number | 6,666 | ||||||||
Payments to acquire cylinders | $ 1,999,800 | ||||||||
Securities Purchase Agreement [Member] | |||||||||
Number of common shares issued | shares | 500,000 | ||||||||
Common stock, par value | $ / shares | $ 0.001 | ||||||||
Convertible debentures | $ 1,500,000 | ||||||||
Number of common stock issued during period, value | 2,000,000 | ||||||||
Proceeds from issuance of stock | $ 1,920,000 | ||||||||
Conversion price percentage | 85.00% | ||||||||
Purchase and Sale of Future Receipts [Member] | C6 Capital [Member] | |||||||||
Number of receipts sold | $ 600,000 | ||||||||
Future receipts | 828,000 | ||||||||
Repayment of debt | $ 24,645 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Jun. 06, 2019 | May 31, 2019 | May 03, 2019 | Feb. 08, 2019 | Jan. 11, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Number of common stock issued during period, value | $ 1,275,000 | $ 2,484,336 | $ 17,840,000 | |||||||||
Proceeds for common stock issued | $ 20,324,336 | |||||||||||
Common shares issued for services, value | $ 2,197,699 | $ 1,842,412 | $ 712,014 | $ 349,226 | ||||||||
Consultants [Member] | ||||||||||||
Common shares issued for services, shares | 5,618,496 | 57,758 | 9,199,908 | 89,341 | ||||||||
Common shares issued for services, value | $ 2,197,699 | $ 712,014 | $ 4,040,112 | $ 1,061,239 | ||||||||
Securities Purchase Agreement [Member] | ||||||||||||
Number of common stock issued during period, shares | 500,000 | |||||||||||
Common stock, par value | $ 0.001 | |||||||||||
Number of common stock issued during period, value | $ 2,000,000 | |||||||||||
Warrants exercisable price per share | $ 4.64 | |||||||||||
Underwriting Agreement [Member] | ||||||||||||
Proceeds for common stock issued | $ 17,840,000 | $ 12,350,000 | ||||||||||
Warrants exercisable price per share | $ 0.14 | |||||||||||
Underwriting Agreement [Member] | Maxim Group LLC [Member] | ||||||||||||
Number of common stock issued during period, shares | 10,800,000 | |||||||||||
Common stock, par value | $ 0.001 | |||||||||||
Warrants to purchase of common stock | 8,100,000 | |||||||||||
Shares issued price per share | $ 1.25 | |||||||||||
Private placement, warrant gross purchase price | $ 13,500,000 | |||||||||||
Warrants exercisable price per share | $ 0.75 | |||||||||||
Sales Agreement [Member] | ||||||||||||
Number of common stock issued during period, shares | 7,280,000 | 9,032,090 | ||||||||||
Common stock, par value | $ 0.001 | |||||||||||
Number of common stock issued during period, value | $ 1,872,379 | |||||||||||
Common Stock [Member] | ||||||||||||
Number of common stock issued during period, shares | 10,119,050 | 12,350,000 | ||||||||||
Number of common stock issued during period, value | $ 10,119 | $ 12,350 | ||||||||||
Common shares issued for services, shares | 5,618,496 | 3,581,412 | 57,758 | 31,583 | ||||||||
Common shares issued for services, value | $ 5,618 | $ 3,581 | $ 58 | $ 32 | ||||||||
Common Stock [Member] | Securities Purchase Agreement [Member] | ||||||||||||
Number of common stock issued during period, shares | 1,550,000 | |||||||||||
Common stock, par value | $ 0.001 | |||||||||||
Warrants to purchase of common stock | 1,550,000 | |||||||||||
Number of common stock issued during period, value | $ 4,340,000 | |||||||||||
Proceeds for common stock issued | $ 4,029,600 | |||||||||||
Shares issued price per share | $ 2.80 |
Preferred Stock (Details Narrat
Preferred Stock (Details Narrative) - USD ($) | Mar. 08, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Common stock, par value | $ 0.001 | $ 0.001 | |
Investor [Member] | Preferred Series E [Member] | |||
Number of shares converted | 5,000 | ||
Investor [Member] | Common Stock [Member] | |||
Number of shares converted | 500,000 | ||
Common stock, par value | $ 0.001 | ||
Investor [Member] | Purchase and Conversion Agreement [Member] | |||
Payments for repurchase of convertible preferred stock | $ 3,500,000 | ||
Series C Preferred Stock [Member] | Investor [Member] | Purchase and Conversion Agreement [Member] | |||
Number of shares repurchased, shares | 499 | ||
Series E Preferred Stock [Member] | Investor [Member] | Purchase and Conversion Agreement [Member] | |||
Number of shares repurchased, shares | 31,765 |
Common Stock Warrants (Details
Common Stock Warrants (Details Narrative) - USD ($) | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Feb. 08, 2019 | Jan. 11, 2019 | |
Warrants to purchase common stock | 8,880,000 | |||
Proceeds from warrant exercises | $ 24,151 | $ 750 | ||
Securities Purchase Agreement [Member] | ||||
Warrants to purchase common stock | 1,550,000 | |||
Warrants exercise price per share | $ 4.64 | |||
Underwriting Agreement [Member] | ||||
Warrants to purchase common stock | 52,500 | 8,932,500 | ||
Warrants exercise price per share | $ 0.14 | |||
Proceeds from warrant exercises | $ 24,151 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation settlement |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | Sep. 01, 2018 | May 01, 2018 | Jun. 30, 2019 | Jan. 02, 2019 | Dec. 31, 2018 |
Right of use asset | $ 3,750,420 | $ 4,037,472 | |||
Operating lease liability | 3,750,420 | 4,037,472 | |||
Deferred rent | $ 0 | ||||
Borrowing lease rate | 8.00% | ||||
First Operating Lease [Member] | |||||
Lease term | 10 years | ||||
Operating lease rate per month | $ 6,728 | ||||
Second Operating Lease [Member] | |||||
Operating lease rate per month | $ 1,338 | ||||
Lease maturity date | Apr. 30, 2019 | ||||
Third Operating Lease [Member] | |||||
Operating lease rate per month | $ 2,100 | ||||
Lease description | The third operating lease is for its welding supply store in Lakeland, FL, from March 31, 2016 through March 31, 2020. | ||||
Fourth Operating Lease [Member] | |||||
Operating lease rate per month | $ 1,700 | ||||
Lease description | The fourth operating lease is for its welding supply store in Sarasota, FL, from August 1, 2016 through July 31, 2021. | ||||
Fifth Operating Lease [Member] | |||||
Operating lease rate per month | $ 2,000 | ||||
Lease description | The fifth operating lease is for its welding supply store in Sulphur Springs, TX, from February 1, 2019 through January 31, 2020. | ||||
Sixth Operating Lease [Member] | |||||
Operating lease rate per month | $ 14,000 | ||||
Lease description | The sixth operating lease is for its welding supply store in Woodland, CA, from April 4, 2018 through April 3, 2019. | ||||
Seventh Operating Lease [Member] | |||||
Operating lease rate per month | $ 900 | ||||
Lease description | The seventh operating lease is for its gas fill plant in Flint, TX, from August 24, 2015 through August 23, 2020. | ||||
Eighth Operating Lease [Member] | |||||
Operating lease rate per month | $ 5,500 | ||||
Lease description | The eighth operating lease is for its storage facility in Flint, TX, from August 1, 2016 through August 23, 2020. | ||||
Ninth Operating Lease [Member] | |||||
Operating lease rate per month | $ 2,846 | ||||
Lease description | The ninth operating lease is for its welding supply store in Shreveport, LA, from December 1, 2015 through May 31, 2021. | ||||
Tenth Operating Lease [Member] | |||||
Operating lease rate per month | $ 1,800 | ||||
Lease description | The tenth operating lease is for its welding supply store in Palestine, TX, from August 13, 2015 through August 12, 2020. | ||||
Eleventh Operating Lease [Member] | |||||
Operating lease rate per month | $ 3,000 | ||||
Lease description | The eleventh operating lease is for its welding supply store in Paris, TX, from October 18, 2018 through October 17, 2020. | ||||
Twelfth Operating Lease [Member] | |||||
Operating lease rate per month | $ 2,000 | ||||
Lease description | The twelfth operating lease is for its welding supply store in Longview, TX, from October 27, 2018 through October 26, 2020. | ||||
Thirteenth Operating Lease [Member] | |||||
Operating lease rate per month | $ 2,500 | ||||
Lease description | The thirteenth operating lease is for its cylinder repair shop in Tyler, TX, from February 16, 2019 through February 15, 2020. | ||||
Fourteenth Operating Lease [Member] | |||||
Operating lease rate per month | $ 6,500 | ||||
Lease description | The fourteenth operating lease is for its welding supply store in Tyler, TX, from January 17, 2019 through January 16, 2020. | ||||
Fifteenth Operating Lease [Member] | |||||
Operating lease rate per month | $ 29,400 | ||||
Lease description | The fifteenth operating lease is for its welding supply store in Compton, CA, from February 22, 2019 through October 31, 2026. | ||||
Sixteenth Operating Lease [Member] | |||||
Operating lease rate per month | $ 11,200 | ||||
Lease description | The sixteenth operating lease is for its welding supply store in Pomona, CA, from February 22, 2019 through October 31, 2026. | ||||
Seventeenth Operating Lease [Member] | |||||
Operating lease rate per month | $ 3,394 | ||||
Lease description | The seveneenth operating lease is for its welding supply store in Oxnard, CA, from February 22, 2019 through February 1, 2020. | ||||
Eighteenth Operating Lease [Member] | |||||
Operating lease rate per month | $ 2,000 | ||||
Lease description | The eighteenth operating lease is for its welding supply store in Lynwood, CA, from April 1, 2019 through September 30, 2023. |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) | Jun. 30, 2019 | Jan. 02, 2019 | Dec. 31, 2018 |
Leases [Abstract] | |||
Operating lease right-of-use assets | $ 3,750,420 | $ 4,037,472 | |
Current portion included in current liabilities | 670,055 | ||
Long-term portion included in non-current liabilities | 3,080,365 | ||
Total operating lease liabilities | 3,750,420 | $ 4,037,472 | |
Finance Leases: Property and equipment, gross | 414,685 | ||
Finance Leases: Accumulated depreciation | (166,240) | ||
Finance Leases: Property and equipment, net | 248,445 | ||
Other current liabilities | 90,303 | 90,303 | |
Other long-term liabilities | 158,142 | $ 203,294 | |
Total finance lease liabilities | $ 248,445 |
Leases - Supplemental Lease Exp
Leases - Supplemental Lease Expense Related to Leases (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating lease expense | $ 319,935 | $ 473,566 |
Finance lease expense: Amortization of right-of-use assets | 19,068 | 38,136 |
Finance lease expense: Interest on lease liabilities | 2,930 | 6,083 |
Total finance lease expense | 21,998 | 44,219 |
Total lease expense | $ 341,933 | $ 517,785 |
Leases - Schedule of Other Info
Leases - Schedule of Other Information Related to Leases (Details) | Jun. 30, 2019 |
Leases [Abstract] | |
Weighted average remaining lease term: Operating leases | 6 years 6 months |
Weighted average remaining lease term: Finance leases | 0 years |
Weighted average discount rate: Operating leases | 2.50% |
Weighted average discount rate: Finance leases | 4.70% |
Leases - Schedule of Suppleme_2
Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 261,248 | $ 509,691 |
Operating cash flows from finance leases (interest payments) | 2,930 | 6,083 |
Financing cash flows from finance leases | 22,576 | 45,152 |
Right-of-use assets obtained in exchange for lease obligations: Operating leases | 104,537 | 3,024,084 |
Right-of-use assets obtained in exchange for lease obligations: Finance leases |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Maturity (Details) - USD ($) | Jun. 30, 2019 | Jan. 02, 2019 |
Leases [Abstract] | ||
Remainder of 2019 | $ 509,798 | |
2020 | 801,911 | |
2021 | 626,571 | |
2022 | 595,541 | |
Thereafter | 2,361,431 | |
Total lease payments | 4,895,252 | |
Less: Present value adjustment | (1,144,832) | |
Lease liability | 3,750,420 | $ 4,037,472 |
Remainder of 2019 | 50,330 | |
2020 | 91,420 | |
2021 | 70,820 | |
2022 | 40,034 | |
Thereafter | 15,236 | |
Total lease payments | 267,840 | |
Less: Present value adjustment | (19,395) | |
Lease liability | $ 248,445 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jul. 23, 2019 | May 31, 2019 | May 03, 2019 | Aug. 16, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Number of common stock issued during period, value | $ 1,275,000 | $ 2,484,336 | $ 17,840,000 | ||||||
Proceeds from warrant exercises | $ 24,151 | $ 750 | |||||||
Consultants [Member] | |||||||||
Number of shares issued for services rendered | 5,618,496 | 57,758 | 9,199,908 | 89,341 | |||||
Securities Purchase Agreement [Member] | |||||||||
Number of common stock issued during period, shares | 500,000 | ||||||||
Number of common stock issued during period, value | $ 2,000,000 | ||||||||
Subsequent Event [Member] | CMPO Warrants [Member] | |||||||||
Shares of common stock issued for warrants exercised | 8,378,250 | ||||||||
Proceeds from warrant exercises | $ 1,172,955 | ||||||||
Subsequent Event [Member] | Consultants [Member] | |||||||||
Number of shares issued for services rendered | 2,428,863 | ||||||||
Subsequent Event [Member] | May Securities Purchase Agreement [Member] | |||||||||
Debt principal amount convereted into common shares | $ 999,915 | ||||||||
Conversion of stock, shares converted | 3,847,927 | ||||||||
Principal amount of debenture unconverted | $ 522,248 | ||||||||
Subsequent Event [Member] | June Sales Agreement [Member] | |||||||||
Number of common stock issued during period, shares | 25,490,910 | ||||||||
Number of common stock issued during period, value | $ 5,407,429 | ||||||||
Subsequent Event [Member] | Settlement Agreement [Member] | Ermanno Santilli [Member] | |||||||||
Officers compensation | $ 523,146 | ||||||||
Number of restricted shares issued | 393,154 | ||||||||
Number of restricted shares issued, value | $ 170,000 | ||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | |||||||||
Shares of common stock issued for warrants exercised | 1,162,500 | ||||||||
Proceeds from warrant exercises | $ 0 |