Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 07, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | Envision Solar International, Inc. | |
Entity Central Index Key | 0001398805 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State County Code | NV | |
Entity File Number | 000-53204 | |
Entity Common Stock, Shares Outstanding | 5,252,163 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash | $ 2,432,300 | $ 3,849,456 |
Accounts receivable, net of $0 and $2,429 reserve for bad debt at March 31, 2020 and December 31, 2019, respectively | 978,611 | 764,534 |
Prepaid and other current assets | 383,621 | 147,686 |
Inventory, net | 2,525,731 | 1,843,880 |
Total current assets | 6,320,263 | 6,605,556 |
Property and equipment, net | 414,366 | 419,420 |
Other Assets | ||
Patents, net | 222,433 | 205,154 |
Deposits | 57,092 | 56,869 |
Total Other Assets | 279,525 | 262,023 |
Total Assets | 7,014,154 | 7,286,999 |
Current Liabilities | ||
Accounts Payable | 1,007,789 | 485,019 |
Accrued Expenses | 602,796 | 654,275 |
Sales Tax Payable | 28,431 | 6,213 |
Deferred Revenue | 99,056 | 93,609 |
Convertible note payable - related party, net of debt discount of $5,990 at December 31, 2019 | 0 | 214,427 |
Auto Loan - Current Portion | 6,576 | 9,294 |
Total liabilities | 1,744,648 | 1,462,837 |
Commitments and Contingencies (Note 7) | ||
Stockholders' Equity | ||
Preferred stock, $0.001 par value, 10,000,000 authorized, 0 outstanding as of March 31, 2020 and December 31, 2019, respectively | 0 | 0 |
Common stock, $0.001 par value, 9,800,000 shares authorized, 5,252,163 and 5,208,170 shares issued or issuable and outstanding at March 31, 2020 and December 31, 2019, respectively | 5,251 | 5,207 |
Additional Paid-in-Capital | 52,016,357 | 51,628,536 |
Accumulated Deficit | (46,752,102) | (45,809,581) |
Total Stockholders' Equity | 5,269,506 | 5,824,162 |
Total Liabilities and Stockholders' Equity | $ 7,014,154 | $ 7,286,999 |
Condensed Balance Sheets (Una_2
Condensed Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common Stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common Stock shares authorized | 9,800,000 | 9,800,000 |
Common Stock shares issued | 5,252,163 | 5,208,170 |
Common Stock shares outstanding | 5,252,163 | 5,208,170 |
Allowance for accounts receivable | $ 0 | $ 2,429 |
Convertible Notes Payable [Member] | Related Party [Member] | ||
Unamortized discount | $ 5,990 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 1,317,052 | $ 1,189,595 |
Cost of revenues | 1,356,693 | 1,242,697 |
Gross loss | (39,641) | (53,102) |
Operating expenses (including stock based compensation expense of $105,515 and $33,551 for the three months ended March 31, 2020 and 2019, respectively) | 902,000 | 522,667 |
Loss From operations | (941,641) | (575,769) |
Other income (expense) | ||
Interest income | 8,892 | 1,344 |
Interest Expense | (9,772) | (375,206) |
Total other income (expense) | (880) | (373,862) |
Net Loss | $ (942,521) | $ (949,631) |
Net loss per share - basic and diluted | $ (0.18) | $ (0.31) |
Weighted average shares outstanding - basic and diluted | 5,223,174 | 2,906,630 |
Condensed Statements of Opera_2
Condensed Statements of Operations (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Stock based compensation | $ 105,515 | $ 33,551 |
Condensed Statements of Changes
Condensed Statements of Changes in Stockholders' Equity (Unaudited) (Deficit) - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2018 | 2,906,630 | |||
Beginning balance, value at Dec. 31, 2018 | $ 2,907 | $ 39,392,073 | $ (41,875,659) | $ (2,480,679) |
Stock issued for director services, shares | 3,750 | |||
Stock issued for director services, value | $ 3 | 31,247 | 31,250 | |
Value of warrants and beneficial conversion features related to debt instruments | 3,967 | 3,967 | ||
Stock option expense | 2,301 | 2,301 | ||
Net loss | (949,631) | (949,631) | ||
Ending balance, shares at Mar. 31, 2019 | 2,910,380 | |||
Ending balance, value at Mar. 31, 2019 | $ 2,910 | 39,429,588 | (42,825,290) | (3,392,792) |
Beginning balance, shares at Dec. 31, 2019 | 5,208,170 | |||
Beginning balance, value at Dec. 31, 2019 | $ 5,207 | 51,628,536 | (45,809,581) | 5,824,162 |
Stock issued for director services, shares | 14,813 | |||
Stock issued for director services, value | $ 15 | 78,432 | 78,447 | |
Stock issued to escrow account - unvested, shares | (14,813) | |||
Stock issued to escrow account - unvested, value | $ (15) | 15 | 0 | |
Stock option expense | 27,068 | 27,068 | ||
Warrants exercised, shares | 43,993 | |||
Warrants exercised, value | $ 44 | 282,306 | 282,350 | |
Net loss | (942,521) | (942,521) | ||
Ending balance, shares at Mar. 31, 2020 | 5,252,163 | |||
Ending balance, value at Mar. 31, 2020 | $ 5,251 | $ 52,016,357 | $ (46,752,102) | $ 5,269,506 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating Activities: | ||
Net Loss | $ (942,521) | $ (949,631) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 8,936 | 9,929 |
Common stock issued for services | 78,447 | 31,250 |
Compensation expense related to grant of stock options | 27,068 | 2,301 |
Amortization of debt discount | 5,990 | 298,739 |
(Increase) decrease in: | ||
Accounts receivable | (214,077) | 101,080 |
Prepaid expenses and other current assets | (308,685) | (102,700) |
Inventory | (605,396) | (52,647) |
Deposits | (223) | 48,672 |
Increase (decrease) in: | ||
Accounts payable | 522,770 | 225,958 |
Accrued expenses | 67,167 | 84,179 |
Convertible note payable issued in lieu of salary - related party | (220,417) | 12,500 |
Sales tax payable | 22,218 | (129) |
Deferred revenue | 5,447 | 68,322 |
Net cash used in operating activities | (1,553,276) | (222,177) |
Investing Activities: | ||
Purchase of equipment | (125,142) | (3,110) |
Funding of patent costs | (18,370) | (10,119) |
Net cash used in investing activities | (143,512) | (13,229) |
Financing Activities: | ||
Borrowings (repayments) on convertible line of credit, net | 0 | 158,442 |
Repayments of auto loan | (2,718) | (2,583) |
Proceeds from warrant exercises | 282,350 | 0 |
Payments of equity offering costs | 0 | (38,686) |
Net cash provided by financing activities | 279,632 | 117,173 |
Net decrease in cash | (1,417,156) | (118,233) |
Cash at beginning of period | 3,849,456 | 244,024 |
Cash at end of period | 2,432,300 | 125,791 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest | 52,666 | 18,286 |
Cash paid for taxes | 0 | 0 |
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | ||
Recording of debt discount | 0 | 3,967 |
Transfer of prepaid asset to inventory | 72,750 | 79,850 |
Recording of right of use asset and corresponding liability | 0 | 872,897 |
Depreciation capitalized into inventory | $ 3,705 | $ 6,607 |
1. NATURE OF OPERATIONS, BASIS
1. NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Envision Solar International, Inc., a Nevada corporation (hereinafter the “Company,” “us,” “we,” “our” or “Envision”) is a sustainable technology innovation company based in San Diego, California. Focusing on what we refer to as “Solar 3.0,” we invent, design, engineer, manufacture and sell solar powered products that enable vital and highly valuable services in locations where it is either too expensive or too impactful to connect to the utility grid, or where the requirements for electrical power are so important that grid failures, like blackouts, are intolerable. When competing with utilities or typical solar companies, we rely on our products’ ease of deployment, reliability, accessibility, and total cost of ownership, rather than producing the cheapest kilowatt hour with the help of subsidies. Envision’s products and proprietary technology solutions target three markets that are experiencing significant growth with annual global spending in the billions of dollars: · electric vehicle charging infrastructure; · out of home advertising platforms; and · energy security and disaster preparedness. The Company focuses on creating renewably energized, high-quality products for electric vehicle (“EV”) charging, outdoor media and branding, and energy security that are rapidly deployable and attractively designed. Basis of Presentation The interim unaudited condensed financial statements included herein have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission. In management’s opinion, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly our results of operations and cash flows for the three months ended March 31, 2020 and 2019, and our financial position as of March 31, 2020, have been made. The results of operations for such interim periods are not necessarily indicative of the operating results to be expected for the full year. Certain information and disclosures normally included in the notes to the annual financial statements have been condensed or omitted from these interim financial statements. Accordingly, these interim unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2019. The December 31, 2019 balance sheet is derived from those statements. Risks and Uncertainties On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic. On March 19, 2020, California’s Governor Newsom issued a “shelter at home” order. Envision is exempt from the “shelter at home” order as it falls within the transportation and energy infrastructure sector identified by Presidential Policy Directive 21 (PPD-21). As a result, the Company is still able to produce product and continue delivering orders. However, we have seen some difficulty contacting prospective customers in our pipeline and some projects have been put on hold or have lost funding. Travel restrictions and trade show cancellations or deferrals have impacted our ability to develop new sales opportunities. At this time, we are unable to determine if the impact of COVID-19 will have an impact on the future results of our operations. The Company will continue to monitor its progress and communicate with shareholders as necessary. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires 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. Actual results could differ from those estimates. Significant estimates in the accompanying unaudited condensed financial statements include the allowance for doubtful accounts receivable, valuation of inventory and standard cost allocations, depreciable lives of property and equipment, valuation of intangible assets, estimates of loss contingencies, estimates of the valuation of right of use assets and corresponding lease liabilities, valuation of share-based payments, and the valuation allowance on deferred tax assets. Concentrations Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist of cash and accounts receivable. The Company maintains its cash in banks and financial institution deposits that at times may exceed federally insured limits. The Company has not experienced any losses in such accounts from inception through March 31, 2020. As of March 31, 2020, $2,406,057 of the Company’s cash deposits were greater than the federally insured limits. Major Customers For the three months ended March 31, 2020, revenues from three customers accounted for 26%, 17% and 14% of total revenues, with no other single customer accounting for more than 10% of revenues. At March 31, 2020, accounts receivable from two customers accounted for 37% and 21% of total accounts receivable, with no other single customer accounting for more than 10% of the accounts receivable balance. For the three months ended March 31, 2019, revenues from one customer accounted for more than 99% total revenues, with no other single customer accounting for more than 10% of revenues. At March 31, 2019, accounts receivable from one customer accounted for more than 99% of total accounts receivable, with no other single customer accounting for more than 10% of the accounts receivable balance. Cash and Cash Equivalents For the purposes of the unaudited condensed statements of cash flows, the Company considers all liquid investments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents at March 31, 2020 and December 31, 2019 respectively. Fair Value of Financial Instruments The Company’s financial instruments, including accounts receivable, accounts payable, accrued expenses, and short-term loans, are carried at historical cost basis. At March 31, 2020, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. Accounts Receivable Accounts receivable are customer obligations due under normal trade terms. Management reviews accounts receivable on a periodic basis to determine if any receivables may become uncollectible. Management’s evaluation includes several factors including the aging of the accounts receivable balances, a review of significant past due accounts, dialogue with the customer, the financial profile of a customer, our historical write-off experience, net of recoveries, and economic conditions. The Company includes any accounts receivable balances that are determined to be uncollectible in its overall allowance for doubtful accounts. Further, the Company may record a general reserve in its allowance for doubtful accounts to account for future changes that may negatively impact our overall collections. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Inventory Inventory is stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out method of accounting. Inventory costs primarily relate to purchased raw materials and components used in the manufacturing of our products, work in process for products being manufactured, and finished goods. Included in these costs are direct labor and certain manufacturing overhead costs associated with the manufacturing process. The Company regularly reviews inventory components and quantities on hand and performs annual physical inventory counts. A reserve is established if this review process determines the net realizable value of such inventory may be below the carrying value. Patents The Company believes it will achieve future economic value benefits for its various patents and patent ideas. All administrative costs for obtaining patents are accumulated on the balance sheet as a Patent asset until such time as a patent is issued. The costs of these intangible assets are classified as a long-term asset and amortized on a straight-line basis over the legal life of such asset, which is typically 20 years. In the event a patent is denied or abandoned, all accumulated administrative costs will be expensed in the period in which the patent was denied or abandoned. Patent amortization expense was $1,091 and $783 in the three-month periods ended March 31, 2020 and 2019, respectively. Leases The Company uses Financial Accounting Standards Board issued Accounting Standards Update No. 2016-02: “Leases (Topic 842)” to account for its leases whereby almost all leases are recognized on their balance sheet as a right of use asset and a corresponding lease liability. The Company adopted this standard as of January 1, 2019 using the effective date method and applying the package of practical expedients to leases that commenced before the effective date whereby the Company elected not to reassess the following: (i) whether any expired or existing contracts contain leases, and (ii) initial direct costs for any existing leases. For contracts entered into after the effective date, at the inception of a contract the Company will assess whether the contract is, or contains, a lease. The Company’s assessment will be based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. The Company will allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. The Company has elected not to recognize right of use assets and lease liabilities for short term leases that have a term of 12 months or less. Monthly lease payments on our sole operating lease range from $48,672 to $50,619 through the term of the lease. We calculated the present value of the remaining lease payment stream using our effective borrowing rate of 10%. We have recorded a right-of-use asset amounting to $197,744 included in property, plant and equipment and corresponding liability included in accrued expenses amounting to $218,225 related to this lease at March 31, 2020. Revenue Recognition Envision follows the revenue standards of Financial Accounting Standards Board Update No. 2014-09: “Revenue from Contracts with Customers (Topic 606).” The core principle of this Topic is that an entity recognizes 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. Revenue is recognized in accordance with that core principle by applying the following five steps: 1) identify the contracts with a customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations; and 5) recognize revenue when (or as) we satisfy a performance obligation. Revenues are primarily derived from the direct sales of manufactured products. Revenues may also consist of maintenance fees for the maintenance of previously sold products and revenues from sales of professional services. Revenues from inventoried product sales are recognized upon the final delivery of such product to the customer or when legal transfer of ownership takes place. Revenue values are fixed price arrangements determined at the time an order is placed or a contract is entered into. The customer is typically obligated to make payment for such products within a 30-45 day period after delivery. Revenues from maintenance fees for services provided by the Company are recognized equally over the period of the maintenance term. Revenue values are fixed price arrangements determined at the time an order is placed or a contract is entered into. The customer is typically obligated to make payment for the service in advance of the maintenance period. Extended maintenance or warranty services, where the customer has the option to purchase this extension as a separate purchase option, are considered a separate performance obligation. If the company does not control the extended services, in terms of having the responsibility for fulfillment of the obligation or the option to choose who will perform the services, the Company is acting as an agent and would report the revenues on a net basis. Revenues from professional services are recognized as services are performed. Revenue values are based upon fixed fee arrangements or hourly fee-based arrangements with agreed to hourly rates of service categories in line with expertise requirements. These services are billed to a customer as such services are provided and the customer will be obligated to make payments for such services typically within a 30-45 day period. The Company has a policy of recording sales incentives as a contra revenue. The Company includes shipping and handling fees billed to customers as revenues and shipping and handling costs as cost of revenues. Any deposits received from a customer prior to delivery of the purchased product or monies paid prior to the period for which a service is provided are accounted for as deferred revenue on the balance sheet. Sales tax is recorded on a net basis and excluded from revenue. The Company generally provides a standard one-year warranty on its products for materials and workmanship but may provide multiple year warranties as negotiated, and it will pass on the warranties from its vendors, if any, which generally covers this one-year period. In accordance with ASC 450-20-25, the Company accrues for product warranties when the loss is probable and can be reasonably estimated. At March 31, 2020, the Company has no product warranty accrual given the Company’s fluctuating historical financial warranty expense. Cost of Revenues The Company records direct material and component costs, direct labor and associated benefits, and manufacturing overhead costs such as supervision, manufacturing equipment depreciation, rent, and utility costs, all of which are included in inventory prior to a sale, as costs of revenues. The Company further includes shipping and handling fees billed to customers as revenues and shipping and handling costs as cost of revenues. Stock-Based Compensation The Company follows ASC 718, “Compensation – Stock Compensation.” ASC 718 requires companies to estimate and recognize the fair value of stock-based awards to employees and directors. The fair value of the portion of an award that is ultimately expected to vest is recognized as an expense over the shorter of the service periods or vesting periods using the straight-line attribution method. The Company adopted ASU 2018-07 and accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASC 718 and recognizes the fair value of such awards over the service period. The Company used the modified prospective method of adoption. There was no cumulative effect of adoption on January 1, 2019. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option pricing model. Net Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the periods presented. Diluted net loss per common share is computed using the weighted average number of common shares outstanding for the period, and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options, stock warrants, convertible debt instruments or other common stock equivalents. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. Options to purchase 288,808 common shares and warrants to purchase 2,491,797 common shares were outstanding at March 31, 2020. These shares were not included in the computation of diluted loss per share for the three months ended March 31, 2020 because the effects would have been anti-dilutive. These options and warrants may dilute future earnings per share. Segments The Company follows ASC 280-10 "Disclosures about Segments of an Enterprise and Related Information." During the three months ended March 31, 2020 and 2019, the Company only operated in one segment; therefore, segment information has not been presented. |
2. LIQUIDITY
2. LIQUIDITY | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LIQUIDITY | 2. LIQUIDITY As reflected in the accompanying unaudited condensed financial statements for the three months ended March 31, 2020, the Company had a net loss and net cash used in operating activities of $942,521 and $1,553,276, respectively. Additionally, at March 31, 2020, the Company had an accumulated deficit of $46,752,102. The Company has incurred significant losses from operations since inception, and such losses are expected to continue. In April and May 2019, the Company received approximately $8.5 million of cash, net of offering costs and repayment of certain debt, under an equity offering. This cash eliminated most of the Company debt and provided working capital for ongoing operations. The cash balance at March 31, 2020 was $2,432,300 and our working capital was $4,575,615 at March 31, 2020. With this financing, management believes it has sufficient cash to fund its liabilities and operations for the next twelve months from the issue date of this report. In addition, we have warrants that are exercisable and could provide proceeds of $15,978,411 cash. The Company is also planning to submit a Form S-3 registration statement with the SEC to have a vehicle to raise capital in the future. |
3. INVENTORY
3. INVENTORY | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORY | 3. INVENTORY Inventory consists of the following: March 31, December 31, 2020 2019 Finished goods $ – $ 716,478 Work in process 1,656,005 303,594 Raw materials 881,150 835,232 Inventory allowance (11,424 ) (11,424 ) Total inventory $ 2,525,731 $ 1,843,880 |
4. ACCRUED EXPENSES
4. ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | 4. ACCRUED EXPENSES The major components of accrued expenses are summarized as follows: March 31, December 31, 2020 2019 Lease liability $ 218,225 $ 349,160 Accrued vacation 190,130 175,231 Accrued salaries 179,623 75,829 Accrued interest – 48,884 Other accrued expense 14,818 5,171 Total accrued expenses $ 602,796 $ 654,275 |
5. CONVERTIBLE NOTE PAYABLE - R
5. CONVERTIBLE NOTE PAYABLE - RELATED PARTY | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTE PAYABLE - RELATED PARTY | 5. CONVERTIBLE NOTE PAYABLE - RELATED PARTY On October 18, 2016, the Company entered into a five-year employment agreement, effective as of January 1, 2016, with Mr. Desmond Wheatley, the Chief Executive Officer, President, and Chairman of the Company (the “Agreement”). Pursuant to the Agreement, Mr. Wheatley received an annual deferred salary of $50,000 which Mr. Wheatley deferred until such time as Mr. Wheatley and the Board of Directors agreed that payment of the deferred salary and/or cessation of the deferral was appropriate. In August 2018, the Agreement was amended to provide that his salary shall defer until the earliest to occur of the following: (i) a permissible event specified in Section 409A of the Code, (ii) December 31, 2020, (iii) a change of control as defined in the Agreement, or (iv) a sale of all or substantially all of the assets of the Company. All deferred amounts were evidenced by an unsecured convertible promissory note payable by the Company to Mr. Wheatley bearing simple interest at the rate of 10% per annum, accruing until paid, convertible into shares of the Company’s common stock at $7.50 per share at any time in whole or in part at Mr. Wheatley’s discretion. As the conversion price was equivalent to the fair value of the common stock at various salary deferral dates prior to June 30, 2018, there was no beneficial conversion feature to this note through such date. Subsequent to June 30, 2018 through December 31, 2018 and based on the average daily closing price of our common stock, the Company recorded $8,672 of debt discount for the beneficial conversion feature value which is being amortized to interest expense over the term of the note. For the three months ended March 31, 2019 and based on the average daily closing price of our common stock, the Company recorded $3,967 of debt discount for the beneficial conversion feature value which is also being amortized to interest expense over the term of the note. There was no beneficial conversion value and therefore, no debt discount was recorded for any other periods subsequent to March 31, 2019. Additionally, on March 29, 2017 the Board of Directors granted Mr. Wheatley a $35,000 bonus for which Mr. Wheatley agreed to defer such bonus under the same terms of his salary deferral. On September 17, 2019, the Board of Directors adopted a resolution to pay off the convertible promissory note issued to Mr. Wheatley for his deferred compensation in the near future (subject to a recommendation on timing from Mr. Wheatley), and no additional salary will be deferred after September 15, 2019. As a result, this note was presented as a short-term liability as of December 31, 2019 with a balance of $214,427, net of debt discount of $5,990, with accrued and unpaid interest of $48,884 which was included in accrued expenses (See Note 4). In February 2020, the remaining debt discount of $5,990 was recorded as interest expense, additional interest of $3,442 was accrued, and the total note of $220,417 and interest of $52,326 was paid to Mr. Wheatley. |
6. AUTO LOAN
6. AUTO LOAN | 3 Months Ended |
Mar. 31, 2020 | |
Notes Payable [Abstract] | |
AUTO LOAN | 6. AUTO LOAN In October 2015, the Company purchased a new vehicle and financed the purchase through a dealer auto loan. The loan has a term of 60 months, requires minimum monthly payments of approximately $950, and bears interest at a rate of 5.99 percent. As of March 31, 2020, the loan has a short-term balance of $6,576. |
7. COMMITMENTS AND CONTINGENCIE
7. COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 7. COMMITMENTS AND CONTINGENCIES Legal Matters: From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of March 31, 2020, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations. Leases: In August 2016, the Company entered into a sublease for its current corporate headquarters and manufacturing facility. The sublease expires in August 2020 which is the same term of the master lease for which the Company is the subtenant. Monthly lease payments range from $48,672 per month currently increasing to $50,619 per month for the final year of the lease. On March 31, 2020, the Company entered into a new lease agreement beginning in September 2020 through August 2025. Monthly lease payments range from $52,000 per month to $58,526 per month in the final year of the lease. The lease includes two additional one-year options to renew. Other Commitments: The Company enters into various contracts or agreements in the normal course of business whereby such contracts or agreements may contain commitments. Since inception, the Company entered into agreements to act as a reseller for certain vendors; joint development contracts with third parties; referral agreements where the Company would pay a referral fee to the referrer for business generated; sales agent agreements whereby sales agents would receive a fee equal to a percentage of revenues generated by the agent; business development agreements and strategic alliance agreements where both parties agree to cooperate and provide business opportunities to each other and in some instances, provide for a right of first refusal with respect to certain projects of the other parties; agreements with vendors where the vendor may provide marketing, investor relations, public relations, technical consulting or subcontractor services, vendor arrangements with non-binding minimum purchasing provisions, and financial advisory agreements where the financial advisor would receive a fee and/or commission for raising capital for the Company. All expenses and liabilities relating to such contracts were recorded in accordance with generally accepted accounting principles during the periods. Although such agreements increase the risk of legal actions against the Company for potential non-compliance, there were no financial exposures that were not accounted for in our financial statements. |
8. COMMON STOCK
8. COMMON STOCK | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
COMMON STOCK | 8. COMMON STOCK Director Compensation On September 17, 2019, the Board, upon the recommendation of its Compensation Committee, granted two directors annual grants of 12,500 shares each, and the lead director was issued an annual grant of 17,500 shares, which vest quarterly in four (4) equal installments. The grant date was determined to be September 17, 2019 as that was when a mutual understanding of the key terms and conditions of the grants was reached. On the grant date, these shares had a per share fair value of $5.50 based on the quoted trading price, or $233,750. 10,625 shares vested in 2019. During the three months ended March 31, 2020, 10,625 of these shares vested generating an expense of $53,447. At March 31, 2020, 21,250 shares were held unvested in escrow for these directors representing $116,872 of unrecognized restricted stock grant expense. In addition, on October 1, 2019, the Board approved two grants of restricted stock of the Company to Mr. Wheatley under the 2011 Stock Incentive Plan. The total number of shares granted was determined based on an award of $150,000 divided by the per share quoted trading price on October 1, 2019. On the grant date, the shares had a per share fair value of $5.97 and 25,124 shares were granted. 12,562 shares vested in 2019. On March 31, 2020, an additional 4,188 of these shares vested generating an expense of $25,000 during the three months ended March 31, 2020. At March 31, 2020, 8,374 shares were held unvested in escrow for Mr. Wheatley representing $50,000 of unrecognized restricted stock grant expense. |
9. STOCK OPTIONS AND WARRANTS
9. STOCK OPTIONS AND WARRANTS | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OPTIONS AND WARRANTS | 9. STOCK OPTIONS AND WARRANTS Stock Options During the three months ended March 31, 2020, an option was granted to an employee to purchase up to 49,104 shares of the Company’s common stock. These options will vest over 4 years and have an exercise price of $4.57 per share. The Company estimated the fair value of these options at $222,612 utilizing the Black-Scholes pricing model. The assumptions used in the valuation of these options include volatility of 198.91% based on historical volatility, expected dividends of 0.0%, a discount rate of 1.79% and expected term of 7.0 years based on the simplified method. During the three months ended March 31, 2020 and 2019, the Company recorded non-cash stock-based compensation of $27,068 and $2,301, respectively. As of March 31, 2020, there is $384,108 of unrecognized stock option-based compensation expense that will be recognized over the next four years. The number of options to purchase capital stock that were outstanding at March 31, 2020 was 288,808. During the three months ended March 31, 2020, there were no options forfeited or expired. Warrants During the three months ended March 31, 2020, 43,993 warrants were exercised generating $282,350 of proceeds. At March 31, 2020, there were 2,491,797 warrants outstanding at a weighted average exercise price of $6.41. |
10. REVENUES
10. REVENUES | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | 10. REVENUES For each of the identified periods, revenues can be categorized into the following: For the Three Months Ended March 31, 2020 2019 Product sales $ 1,302,363 $ 1,187,465 Maintenance fees 3,679 2,130 Professional services 14,525 – Discounts and allowances (3,515 ) – Total revenues $ 1,317,052 $ 1,189,595 At March 31, 2020 and December 31, 2019, deferred revenue was $99,056 and $93,609, respectively. The March 31, 2020 balance includes $35,520 for product deposits on product scheduled to be delivered within the next six months and $63,536 for deferred maintenance fees pertaining to services to be provided through the third quarter of 2024. At December 31, 2018, the Company accrued expected contract losses of $71,744 on an order for a customer that shipped in 2019. As the units were delivered, the loss accrual was proportionally reduced. In the three months ended March 31, 2019, $37,982 was released from the accrual to reduce cost of revenues. |
1. NATURE OF OPERATIONS, BASI_2
1. NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations Envision Solar International, Inc., a Nevada corporation (hereinafter the “Company,” “us,” “we,” “our” or “Envision”) is a sustainable technology innovation company based in San Diego, California. Focusing on what we refer to as “Solar 3.0,” we invent, design, engineer, manufacture and sell solar powered products that enable vital and highly valuable services in locations where it is either too expensive or too impactful to connect to the utility grid, or where the requirements for electrical power are so important that grid failures, like blackouts, are intolerable. When competing with utilities or typical solar companies, we rely on our products’ ease of deployment, reliability, accessibility, and total cost of ownership, rather than producing the cheapest kilowatt hour with the help of subsidies. Envision’s products and proprietary technology solutions target three markets that are experiencing significant growth with annual global spending in the billions of dollars: · electric vehicle charging infrastructure; · out of home advertising platforms; and · energy security and disaster preparedness. The Company focuses on creating renewably energized, high-quality products for electric vehicle (“EV”) charging, outdoor media and branding, and energy security that are rapidly deployable and attractively designed. |
Basis of Presentation | Basis of Presentation The interim unaudited condensed financial statements included herein have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission. In management’s opinion, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly our results of operations and cash flows for the three months ended March 31, 2020 and 2019, and our financial position as of March 31, 2020, have been made. The results of operations for such interim periods are not necessarily indicative of the operating results to be expected for the full year. Certain information and disclosures normally included in the notes to the annual financial statements have been condensed or omitted from these interim financial statements. Accordingly, these interim unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2019. The December 31, 2019 balance sheet is derived from those statements. |
Risks and Uncertainties | Risks and Uncertainties On March 11, 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic. On March 19, 2020, California’s Governor Newsom issued a “shelter at home” order. Envision is exempt from the “shelter at home” order as it falls within the transportation and energy infrastructure sector identified by Presidential Policy Directive 21 (PPD-21). As a result, the Company is still able to produce product and continue delivering orders. However, we have seen some difficulty contacting prospective customers in our pipeline and some projects have been put on hold or have lost funding. Travel restrictions and trade show cancellations or deferrals have impacted our ability to develop new sales opportunities. At this time, we are unable to determine if the impact of COVID-19 will have an impact on the future results of our operations. The Company will continue to monitor its progress and communicate with shareholders as necessary. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires 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. Actual results could differ from those estimates. Significant estimates in the accompanying unaudited condensed financial statements include the allowance for doubtful accounts receivable, valuation of inventory and standard cost allocations, depreciable lives of property and equipment, valuation of intangible assets, estimates of loss contingencies, estimates of the valuation of right of use assets and corresponding lease liabilities, valuation of share-based payments, and the valuation allowance on deferred tax assets. |
Concentrations | Concentrations Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist of cash and accounts receivable. The Company maintains its cash in banks and financial institution deposits that at times may exceed federally insured limits. The Company has not experienced any losses in such accounts from inception through March 31, 2020. As of March 31, 2020, $2,406,057 of the Company’s cash deposits were greater than the federally insured limits. Major Customers For the three months ended March 31, 2020, revenues from three customers accounted for 26%, 17% and 14% of total revenues, with no other single customer accounting for more than 10% of revenues. At March 31, 2020, accounts receivable from two customers accounted for 37% and 21% of total accounts receivable, with no other single customer accounting for more than 10% of the accounts receivable balance. For the three months ended March 31, 2019, revenues from one customer accounted for more than 99% total revenues, with no other single customer accounting for more than 10% of revenues. At March 31, 2019, accounts receivable from one customer accounted for more than 99% of total accounts receivable, with no other single customer accounting for more than 10% of the accounts receivable balance. |
Cash and Cash Equivalents | Cash and Cash Equivalents For the purposes of the unaudited condensed statements of cash flows, the Company considers all liquid investments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents at March 31, 2020 and December 31, 2019 respectively. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments, including accounts receivable, accounts payable, accrued expenses, and short-term loans, are carried at historical cost basis. At March 31, 2020, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. |
Accounts Receivable | Accounts Receivable Accounts receivable are customer obligations due under normal trade terms. Management reviews accounts receivable on a periodic basis to determine if any receivables may become uncollectible. Management’s evaluation includes several factors including the aging of the accounts receivable balances, a review of significant past due accounts, dialogue with the customer, the financial profile of a customer, our historical write-off experience, net of recoveries, and economic conditions. The Company includes any accounts receivable balances that are determined to be uncollectible in its overall allowance for doubtful accounts. Further, the Company may record a general reserve in its allowance for doubtful accounts to account for future changes that may negatively impact our overall collections. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. |
Inventory | Inventory Inventory is stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out method of accounting. Inventory costs primarily relate to purchased raw materials and components used in the manufacturing of our products, work in process for products being manufactured, and finished goods. Included in these costs are direct labor and certain manufacturing overhead costs associated with the manufacturing process. The Company regularly reviews inventory components and quantities on hand and performs annual physical inventory counts. A reserve is established if this review process determines the net realizable value of such inventory may be below the carrying value. |
Patents | Patents The Company believes it will achieve future economic value benefits for its various patents and patent ideas. All administrative costs for obtaining patents are accumulated on the balance sheet as a Patent asset until such time as a patent is issued. The costs of these intangible assets are classified as a long-term asset and amortized on a straight-line basis over the legal life of such asset, which is typically 20 years. In the event a patent is denied or abandoned, all accumulated administrative costs will be expensed in the period in which the patent was denied or abandoned. Patent amortization expense was $1,091 and $783 in the three-month periods ended March 31, 2020 and 2019, respectively. |
Leases | Leases The Company uses Financial Accounting Standards Board issued Accounting Standards Update No. 2016-02: “Leases (Topic 842)” to account for its leases whereby almost all leases are recognized on their balance sheet as a right of use asset and a corresponding lease liability. The Company adopted this standard as of January 1, 2019 using the effective date method and applying the package of practical expedients to leases that commenced before the effective date whereby the Company elected not to reassess the following: (i) whether any expired or existing contracts contain leases, and (ii) initial direct costs for any existing leases. For contracts entered into after the effective date, at the inception of a contract the Company will assess whether the contract is, or contains, a lease. The Company’s assessment will be based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. The Company will allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. The Company has elected not to recognize right of use assets and lease liabilities for short term leases that have a term of 12 months or less. Monthly lease payments on our sole operating lease range from $48,672 to $50,619 through the term of the lease. We calculated the present value of the remaining lease payment stream using our effective borrowing rate of 10%. We have recorded a right-of-use asset amounting to $197,744 included in property, plant and equipment and corresponding liability included in accrued expenses amounting to $218,225 related to this lease at March 31, 2020. |
Revenue Recognition | Revenue Recognition Envision follows the revenue standards of Financial Accounting Standards Board Update No. 2014-09: “Revenue from Contracts with Customers (Topic 606).” The core principle of this Topic is that an entity recognizes 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. Revenue is recognized in accordance with that core principle by applying the following five steps: 1) identify the contracts with a customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations; and 5) recognize revenue when (or as) we satisfy a performance obligation. Revenues are primarily derived from the direct sales of manufactured products. Revenues may also consist of maintenance fees for the maintenance of previously sold products and revenues from sales of professional services. Revenues from inventoried product sales are recognized upon the final delivery of such product to the customer or when legal transfer of ownership takes place. Revenue values are fixed price arrangements determined at the time an order is placed or a contract is entered into. The customer is typically obligated to make payment for such products within a 30-45 day period after delivery. Revenues from maintenance fees for services provided by the Company are recognized equally over the period of the maintenance term. Revenue values are fixed price arrangements determined at the time an order is placed or a contract is entered into. The customer is typically obligated to make payment for the service in advance of the maintenance period. Extended maintenance or warranty services, where the customer has the option to purchase this extension as a separate purchase option, are considered a separate performance obligation. If the company does not control the extended services, in terms of having the responsibility for fulfillment of the obligation or the option to choose who will perform the services, the Company is acting as an agent and would report the revenues on a net basis. Revenues from professional services are recognized as services are performed. Revenue values are based upon fixed fee arrangements or hourly fee-based arrangements with agreed to hourly rates of service categories in line with expertise requirements. These services are billed to a customer as such services are provided and the customer will be obligated to make payments for such services typically within a 30-45 day period. The Company has a policy of recording sales incentives as a contra revenue. The Company includes shipping and handling fees billed to customers as revenues and shipping and handling costs as cost of revenues. Any deposits received from a customer prior to delivery of the purchased product or monies paid prior to the period for which a service is provided are accounted for as deferred revenue on the balance sheet. Sales tax is recorded on a net basis and excluded from revenue. The Company generally provides a standard one-year warranty on its products for materials and workmanship but may provide multiple year warranties as negotiated, and it will pass on the warranties from its vendors, if any, which generally covers this one-year period. In accordance with ASC 450-20-25, the Company accrues for product warranties when the loss is probable and can be reasonably estimated. At March 31, 2020, the Company has no product warranty accrual given the Company’s fluctuating historical financial warranty expense. |
Cost of Revenues | Cost of Revenues The Company records direct material and component costs, direct labor and associated benefits, and manufacturing overhead costs such as supervision, manufacturing equipment depreciation, rent, and utility costs, all of which are included in inventory prior to a sale, as costs of revenues. The Company further includes shipping and handling fees billed to customers as revenues and shipping and handling costs as cost of revenues. |
Stock-Based Compensation | Stock-Based Compensation The Company follows ASC 718, “Compensation – Stock Compensation.” ASC 718 requires companies to estimate and recognize the fair value of stock-based awards to employees and directors. The fair value of the portion of an award that is ultimately expected to vest is recognized as an expense over the shorter of the service periods or vesting periods using the straight-line attribution method. The Company adopted ASU 2018-07 and accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASC 718 and recognizes the fair value of such awards over the service period. The Company used the modified prospective method of adoption. There was no cumulative effect of adoption on January 1, 2019. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option pricing model. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the periods presented. Diluted net loss per common share is computed using the weighted average number of common shares outstanding for the period, and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options, stock warrants, convertible debt instruments or other common stock equivalents. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. Options to purchase 288,808 common shares and warrants to purchase 2,491,797 common shares were outstanding at March 31, 2020. These shares were not included in the computation of diluted loss per share for the three months ended March 31, 2020 because the effects would have been anti-dilutive. These options and warrants may dilute future earnings per share. |
Segments | Segments The Company follows ASC 280-10 "Disclosures about Segments of an Enterprise and Related Information." During the three months ended March 31, 2020 and 2019, the Company only operated in one segment; therefore, segment information has not been presented. |
3. INVENTORY (Tables)
3. INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | March 31, December 31, 2020 2019 Finished goods $ – $ 716,478 Work in process 1,656,005 303,594 Raw materials 881,150 835,232 Inventory allowance (11,424 ) (11,424 ) Total inventory $ 2,525,731 $ 1,843,880 |
4. ACCRUED EXPENSES (Tables)
4. ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accrued expense schedule | March 31, December 31, 2020 2019 Lease liability $ 218,225 $ 349,160 Accrued vacation 190,130 175,231 Accrued salaries 179,623 75,829 Accrued interest – 48,884 Other accrued expense 14,818 5,171 Total accrued expenses $ 602,796 $ 654,275 |
10. REVENUES (Tables)
10. REVENUES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenues | For the Three Months Ended March 31, 2020 2019 Product sales $ 1,302,363 $ 1,187,465 Maintenance fees 3,679 2,130 Professional services 14,525 – Discounts and allowances (3,515 ) – Total revenues $ 1,317,052 $ 1,189,595 |
1. NATURE OF OPERATIONS, BASI_3
1. NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Uninsured cash | $ 2,406,057 | ||
Cash equivalents | 0 | $ 0 | |
Patent amortization | 1,091 | $ 783 | |
Accrued warranty reserve | $ 0 | ||
Lease borrowing rate | 10.00% | ||
Right-of-use asset | $ 197,744 | ||
Lease liability | $ 218,225 | ||
Revenues [Member] | One Customer [Member] | |||
Concentration percentage | 26.00% | 99.00% | |
Revenues [Member] | Another Customer [Member] | |||
Concentration percentage | 17.00% | ||
Revenues [Member] | Another Customer [Member] | |||
Concentration percentage | 14.00% | ||
Accounts Receivable [Member] | One Customer [Member] | |||
Concentration percentage | 37.00% | 99.00% | |
Accounts Receivable [Member] | Another Customer [Member] | |||
Concentration percentage | 21.00% | ||
Options [Member] | |||
Potentially dilutive stock equivalents outstanding | 288,808 | ||
Warrants [Member] | |||
Potentially dilutive stock equivalents outstanding | 2,491,797 |
2. LIQUIDITY (Details Narrative
2. LIQUIDITY (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | ||||
Net losses | $ (942,521) | $ (949,631) | ||
Net cash used in operations | (1,553,276) | (222,177) | ||
Accumulated deficit | (46,752,102) | $ (45,809,581) | ||
Proceeds from sale of stock | 8,500,000 | |||
Cash | 2,432,300 | $ 125,791 | $ 3,849,456 | $ 244,024 |
Working capital | 4,575,615 | |||
Possible proceeds from warrant exercises | $ 15,978,411 |
3. INVENTORY (Details)
3. INVENTORY (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 0 | $ 716,478 |
Work in process | 1,656,005 | 303,594 |
Raw materials | 881,150 | 835,232 |
Inventory Allowance | (11,424) | (11,424) |
Total Inventory | $ 2,525,731 | $ 1,843,880 |
4. ACCRUED EXPENSES (Details)
4. ACCRUED EXPENSES (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Lease liability | $ 218,225 | $ 349,160 |
Accrued vacation | 190,130 | 175,231 |
Accrued salaries | 179,623 | 75,829 |
Accrued interest | 0 | 48,884 |
Other accrued expense | 14,818 | 5,171 |
Total accrued expenses | $ 602,796 | $ 654,275 |
5. CONVERTIBLE NOTE PAYABLE -_2
5. CONVERTIBLE NOTE PAYABLE - RELATED PARTY (Details Narrative) - Convertible Note - Related Party [Member] - Wheatley [Member] - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
Debt discount for beneficial conversion feature | $ 3,967 | $ 8,672 | ||
Convertible note payable related party balance outstanding | $ 214,427 | |||
Unamortized discount | 5,990 | |||
Accrued interest | $ 3,442 | $ 48,884 | ||
Interest expense debt | 5,990 | |||
Repayment of note payable | 220,417 | |||
Payment of interest | $ 52,326 |
6. AUTO LOAN (Details Narrative
6. AUTO LOAN (Details Narrative) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Auto loan current | $ 6,576 | $ 9,294 |
Automobile Loan [Member] | ||
Auto loan current | $ 6,576 |
7. COMMITMENTS AND CONTINGENC_2
7. COMMITMENTS AND CONTINGENCIES (Details Narrative) | 3 Months Ended |
Mar. 31, 2020 | |
Lease 1 [Member] | |
Lease expiration date | August 2020 |
Monthly lease payments | $48,672 per month |
Final monthly payment | $50,519 |
Lease 2 [Member] | |
Lease expiration date | August 2025 |
Monthly lease payments | $52,000 per month |
Final monthly payment | $58,526 |
8. COMMON STOCK (Details Narrat
8. COMMON STOCK (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Oct. 01, 2019 | Dec. 31, 2019 | |
Share based compensation | $ 105,515 | $ 33,551 | ||
Restricted Stock [Member] | Three Directors [Member] | ||||
Share based compensation | $ 53,447 | |||
Stock grant vested | 10,625 | |||
Stock grant unvested | 21,250 | |||
Unrecognized restricted stock grant expense | $ 116,872 | |||
Restricted Stock [Member] | Wheatley [Member] | 2011 Stock Incentive Plan [Member] | ||||
Stock granted for compensation, shares | 25,124 | |||
Share based compensation | $ 25,000 | |||
Stock grant vested | 12,562 | 4,188 | ||
Stock grant unvested | 8,374 | |||
Unrecognized restricted stock grant expense | $ 50,000 |
9. STOCK OPTIONS AND WARRANTS (
9. STOCK OPTIONS AND WARRANTS (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Stock option compensation expense | $ 27,068 | $ 2,301 |
Proceeds from warrant exercises | $ 282,350 | $ 0 |
Employee Stock Option [Member] | ||
Stock options granted, shares | 49,104 | |
Option exercise price | $ 4.57 | |
Stock options granted, value | $ 222,612 | |
Weighted average remaining contractual life | 4 years | |
Volatility rate | 198.91% | |
Expected dividend rate | 0.00% | |
Discount rate | 1.79% | |
Expected term | 7 years | |
Total unrecognized compensation cost related to unvested options | $ 384,108 | |
Unrecognized compensation term | 4 years | |
Options outstanding | 288,808 | |
Options forfeited | 0 | |
Options expired | 0 | |
Warrants [Member] | ||
Warrants exercised | 43,993 | |
Proceeds from warrant exercises | $ 282,350 | |
Warrants outstanding | 2,491,797 | |
Warrant exercise price | $ 6.41 |
10. REVENUES (Details)
10. REVENUES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | $ 1,317,052 | $ 1,189,595 |
Discounts and allowances | (3,515) | 0 |
Product Sales [Member] | ||
Revenues | 1,302,363 | 1,187,465 |
Maintenance Fees [Member] | ||
Revenues | 3,679 | 2,130 |
Professional Services [member] | ||
Revenues | $ 14,525 | $ 0 |
10. REVENUES (Details Narrative
10. REVENUES (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | |
Deferred revenue | $ 99,056 | $ 93,609 | |
Deferred revenue recorded in prior year | $ 37,982 | ||
Product Deposits [Member] | |||
Deferred revenue | 35,520 | ||
Maintenance Fees [Member] | |||
Deferred revenue | $ 63,536 |