Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 15, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Mojo Organics, Inc. | |
Entity Central Index Key | 1,414,953 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 26,181,781 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 12,924 | $ 38,668 |
Accounts Receivable, net | 149,443 | 29,872 |
Inventory | 290,663 | 312,029 |
Prepaid expenses | 18,227 | 29,709 |
Total Current Assets | 471,257 | 410,278 |
Security deposit | 4,518 | 4,461 |
Total Assets | 475,775 | 414,739 |
Current Liabilities | ||
Accounts payable and accrued expenses | 113,437 | 39,329 |
Accrued payroll to related parties | 36,514 | 484,600 |
Total Current Liabilities | 149,951 | 523,929 |
Stockholders Equity/ (Deficit) | ||
Preferred stock, 10,000,000 shares authorized at $0.001 par value, no shares issued and outstanding | ||
Common stock, 190,000,000 shares authorized at $0.001 par value, 25,492,445 and 18,380,326 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 25,492 | 18,380 |
Additional paid in capital | 22,718,901 | 21,265,200 |
Accumulated deficit | (22,418,569) | (21,392,770) |
Total Stockholders Equity (Deficit) | 325,824 | (109,190) |
Total Liabilities and Stockholders Equity (Deficit) | $ 475,775 | $ 414,739 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 190,000,000 | 190,000,000 |
Common stock, issued | 25,492,445 | 18,380,326 |
Common stock, outstanding | 25,492,445 | 18,380,326 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenue | $ 344,077 | $ 411,803 | $ 586,037 | $ 662,515 |
Cost of Revenues | 225,711 | 237,492 | 369,505 | 383,626 |
Gross Profit | 118,366 | 174,311 | 216,532 | 278,889 |
Operating Expenses | ||||
Selling, general and administrative | 1,030,694 | 522,125 | 1,244,511 | 1,008,265 |
Total Operating Expenses | 1,030,694 | 522,125 | 1,244,511 | 1,008,265 |
Loss from Operations | (912,328) | (347,814) | (1,027,979) | (729,376) |
Other Income (Expense) | (698) | 2,180 | (698) | |
Loss Before Provision for Income Taxes | (912,328) | (348,512) | (1,025,799) | (730,074) |
Provision for Income Taxes | ||||
Net Loss | $ (912,328) | $ (348,512) | $ (1,025,799) | $ (730,074) |
Net loss per common share, basic and fully diluted | $ (0.04) | $ (0.02) | $ (0.05) | $ (0.04) |
Basic and diluted weighted average number of common shares outstanding | 22,995,547 | 18,273,876 | 20,700,686 | 18,081,565 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities | ||
Net Loss | $ (1,025,799) | $ (730,074) |
Adjustments to reconcile net loss to cash used by operating activitites: | ||
Stock-based compensation - stock options | 214,690 | 37,618 |
Stock portion of compensation paid in restricted Common Stock | 70,760 | |
Accrued payroll settled through issuance of restricted Common Stock | 598,100 | |
Stock and warrants issued to directors and employees | 577,263 | 463,970 |
Change in assets and liabilites: | ||
Increase in accounts receivable | (119,571) | (175,622) |
Decrease (increase) in inventory | 21,366 | (194,072) |
Increase in supplier deposits | (19,493) | |
Decrease in prepaid expenses | 11,425 | 5,656 |
Increase in accounts payable and accrued expenses | 74,108 | 56,165 |
Increase in accrued payroll to related parties | (448,086) | 214,628 |
Net cash used in operating activities | (25,744) | (341,224) |
Net cash from financing activities: | ||
Sale of common stock, net | 337,500 | |
Net cash provided by financing activities | 337,500 | |
Net decrease in cash and cash equivalents | (25,744) | (3,724) |
Cash and cash equivalents at beginning of period | 38,668 | 15,442 |
Cash and cash equivalents at end of period | 12,924 | 11,718 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest paid | ||
Taxes paid |
Condensed Statement of Changes
Condensed Statement of Changes in Stockholders' Equity (Deficit) (Unaudited) - 6 months ended Jun. 30, 2017 - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, Shares at Dec. 31, 2016 | 18,380,326 | |||
Beginning balance, Amount at Dec. 31, 2016 | $ 18,380 | $ 21,265,200 | $ (21,392,770) | $ (109,190) |
Stock based compensation | ||||
Stock options | 214,690 | 214,690 | ||
Issuance of restrcited Common Stock for stock portion of compensation, Shares | 366,000 | |||
Issuance of restrcited Common Stock for stock portion of compensation, Value | $ 366 | 70,394 | 70,760 | |
Accrued payroll settled through issuance of restricted Common Stock, Shares | 3,138,125 | |||
Accrued payroll settled through issuance of restricted Common Stock, Value | $ 3,138 | 594,962 | 598,100 | |
Issuance of restricted Common Stock for bonuses, Shares | 2,479,869 | |||
Issuance of restricted Common Stock for bonuses, Value | $ 2,480 | 394,283 | 396,763 | |
Issuance of restricted Common Stock to related parties, Shares | 1,128,125 | |||
Issuance of restricted Common Stock to related parties, Value | $ 1,128 | 1,179,372 | 180,500 | |
Net loss | (1,025,799) | (1,025,799) | ||
Ending balance, Shares at Jun. 30, 2017 | 25,492,445 | |||
Ending balance, Amount at Jun. 30, 2017 | $ 25,492 | $ 22,718,901 | $ (22,418,569) | $ 325,824 |
Business
Business | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Business and Basis of Presentation | NOTE 1 – BUSINESS Overview MOJO Organics, Inc. (“MOJO” or the “Company”) was incorporated in the State of Delaware on August 2, 2007. Headquartered in Jersey City, NJ, the Company engages in new product development, production, marketing, distribution and sales of beverage brands that are natural, USDA Organic and Non GMO Project Verified. Interim Financial Statements The accompanying unaudited interim condensed financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q and article 10 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures included in these financial statements are adequate to make the information presented not misleading. The unaudited interim condensed financial statements included in this document have been prepared on the same basis as the annual audited financial statements, and in the Company’s opinion, reflect all adjustments necessary for a fair presentation in accordance with GAAP and SEC regulations for interim financial statements. The results for the six months ended June 30, 2017 are not necessarily indicative of the results that the Company will have for any subsequent period. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and the notes to those statements for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The financial statements are prepared in conformity with GAAP. Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash equivalents include investment instruments and time deposits purchased with a maturity of three months or less. As of June 30, 2017 and December 31, 2016, the Company did not have any cash equivalents. Accounts Receivable Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company provides for probable uncollectible amounts based upon its assessment of the current status of the individual receivables and after using reasonable collection efforts. The allowance for doubtful accounts as of June 30, 2017 and December 31, 2016 was zero. Inventories Inventories, consisting solely of finished goods, are stated at the lower of cost (first-in, first-out method) or net realizable value (“NRV”). When necessary, the Company provides allowances to adjust the carrying value of its inventories to the lower of cost or NRV. Supplier Deposits Supplier deposits consist of payments to manufacturers for future production. Revenue Recognition Revenue from sales of products is recognized when persuasive evidence of an arrangement exists, delivery of products has occurred, the sales price is fixed or determinable and collectability is reasonably assured. Costs incurred for sales incentives and discounts are accounted for as a reduction in revenue. Shipping and Handling Costs Shipping and handling costs incurred to move finished goods from our sales distribution centers to customer locations are included in the line Selling, General and Administrative Expenses in our Statements of Operations. Net Loss Per Common Share Basic EPS is computed by dividing the income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted average number of shares of common stock and common stock equivalents outstanding during the periods. The following potentially dilutive securities have been excluded from the computation of weighted average shares outstanding as they would have had an anti-dilutive impact on the Company’s net loss per common share: For the Six Months Ended June 30, 2017 2016 Shares underlying options outstanding 1,491,865 620,000 Shares underlying warrants outstanding 3,683,614 3,096,919 Total 5,175,479 3,716,919 For the Three Months Ended June 30, 2017 2016 Shares underlying options outstanding 2,354,149 620,000 Shares underlying warrants outstanding 4,012,366 3,096,919 Total 6,366,515 3,716,919 Income Taxes The Company provides for income taxes using the asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. As of June 30, 2017 and December 31, 2016, the Company had no accrued interest or penalties. The Company has had no Federal or state tax examinations in the past nor does it have any at the current time. Stock-Based Compensation ASC Topic 718, “ Accounting for Stock-Based Compensation The Company accounts for equity based transactions with non-employees under the provisions of ASC Subtopic 505-50, “ Equity-Based Payments to Non-Employees Fair value of financial instruments The carrying amounts of financial instruments, which include cash, accounts receivable, accounts payable, accrued expenses and debt obligations, approximate their fair values due to their short-term nature. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09. Revenue from Contracts with Customers Revenue Recognition Reclassifications Certain amounts in the June 30, 2016 Financial Statements have been reclassified to conform to the presentation used in the June 30, 2017 Financial Statements. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | NOTE 3 – COMMITMENTS AND CONTINGENCIES Employment Agreements On April 6, 2017, the Company entered into Amended and Restated Employment Agreements with Mr. Glenn Simpson (the “Simpson Agreement”), the Company’s Chairman and Chief Executive Officer (the “CEO”) and Mr. Peter Spinner (the “Spinner Agreement”), the Company’s Chief Operating Officer (the “COO”). The Simpson Agreement and the Spinner Agreement were effective April 1, 2017 and have eight year terms. Pursuant to the Simpson Agreement, Mr. Simpson will be paid a salary of $5,000 per month in cash and the right to receive 67,000 shares of restricted Common Stock per month. These shares have no voting rights, are not eligible for dividends and are non-transferable unless the restriction is lifted. The restriction shall be lifted only upon the generation of $3,000,000 in revenue by the Company during a consecutive twelve month period. Additionally, Mr. Simpson is entitled to an annual bonus comprised of cash and Common Stock based on performance goals established by the Board of Directors of the Company as set forth in the Simpson Agreement. The cash bonus is established at $44,400 per year. The stock bonus is set at 200,000 shares of Common Stock per year through December 31, 2025 based upon revenue performance goals. The revenue goals range from $2,400,000 to $19,200,000 per year. The bonus awards may be accelerated should revenue exceed the annual target amounts. Pursuant to the Spinner Agreement, Mr. Spinner will be paid a salary of $5,000 per month in cash and the right to receive 55,000 shares of restricted Common Stock per month. These shares have no voting rights, are not eligible for dividends and are non-transferable unless the restriction is lifted. The restriction shall be lifted only upon the generation of $3,000,000 in revenue by the Company during a consecutive twelve month period. Additionally, Mr. Spinner is entitled to an annual bonus comprised of cash and Common Stock based on performance goals established by the Board of Directors of the Company as set forth in the Spinner Agreement. The cash bonus is established at $38,400 per year. The stock bonus is set at 200,000 shares of Common Stock per year beginning in the year 2020 through December 31, 2025 based upon revenue performance goals. The revenue goals range from $5,200,000 to $19,200,000 per year. The bonus awards may be accelerated should revenue exceed the annual target amounts. Mr. Simpson was issued a one-time stock bonus equal to 1,882,237 shares of restricted Common Stock and stock options to purchase 995,546 shares of Common Stock at $0.16 per shares as part of the Simpson Agreement. The restricted shares have no voting rights, are not eligible for dividends and are non-transferable. The restriction shall be lifted only upon the generation of $3,000,000 in revenue by the Company during a consecutive twelve month period. See Notes 4 and 5. Lease Commitment The Company maintains office space in Jersey City, New Jersey. The Company leased the space pursuant to a lease agreement dated September 15, 2016 at a rate of $2,230 per month. The lease agreement was terminated on February 28, 2017. The Company signed a new lease agreement for the period March 1, 2017 to February 28, 2018. The new rent under this agreement is $2,259 per month. Lease expense amounted to $14,415 and $11,309 for the six months ended June 30, 2017 and 2016, respectively. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | NOTE 4 – STOCKHOLDERS’ EQUITY The Company has authorized 190,000,000 shares of common stock (“Common Stock”) and 10,000,000 shares of preferred stock (“Preferred Stock”), each having a par value of $0.001. In October 2015, the Company approved the 2015 Incentive Stock Plan (the “2015 Plan”), which provides the Company with the ability to issue stock options, stock awards and/or restricted stock purchase offers for up to an aggregate of 1,500,000 shares of Common Stock. In March 2013, the Company approved the 2012 Long-Term Incentive Equity Plan (the “2012 Plan”), which provides the Company with the ability to issue stock options, stock appreciation rights, restricted stock and/or stock based awards for up to an aggregate of 2,050,000 shares of Common Stock. Private Placement Offerings On January 20, 2016, the Company approved a subscription agreement (the “2016 Subscription”) whereby 1,428,572 shares of Common Stock were offered to accredited investors for $0.35 per share. For every two shares purchased, the investor received a warrant to acquire one share of Common Stock at an exercise price of $0.70 per share exercisable for a period of two years from the date of issuance representing a potential aggregate of 714,286 shares of Common Stock. The Company issued a total of 964,286 shares of Common Stock and two year purchase warrants to acquire a total 482,143 shares of Common Stock to four accredited investors in consideration of $337,500. Restricted Stock Compensation The CEO and COO agreed to forego the receipt of $598,100 owed to them for salary and bonus in exchange for shares of restricted Common Stock. In May 2017, the Company issued an aggregate 3,138,125 shares of restricted Common Stock as settlement of that liability. The shares issued have no voting rights, are not eligible for dividends and are non-transferable unless the restrictions are lifted. The restrictions shall be lifted only upon the generation of $3,000,000 in revenue by the Company during a consecutive twelve month period. Also in May 2017, the Company issued an aggregate 2,479,869 restricted shares of Common Stock to the CEO and COO as part of the Simpson Agreement and Spinner Agreement, respectively. These shares have no voting rights, are not eligible for dividends and are non-transferable unless the restrictions are lifted. The restrictions shall be lifted only upon the generation of $3,000,000 in revenue by the Company during a consecutive twelve month period. See Note 3 for further discussion. Pursuant to the Simpson Agreement and the Spinner Agreement, the Company issued 201,000 shares and 165,000 shares, respectively, to the CEO and COO for the stock portion of their monthly compensation for the quarter ended June 30, 2017. These restricted shares have no voting rights, are not eligible for dividends and are non-transferable unless the restrictions are lifted. The restriction shall be lifted only upon the generation of $3,000,000 in revenue by the Company during a consecutive twelve month period. During the quarter ended June 30, 2017, the Company issued 1,128,125 shares of restricted Common Stock to certain of its executive officers. The shares issued have no voting rights, are not eligible for dividends and are non-transferable unless the restrictions are lifted. The restrictions shall be lifted only upon the generation of $3,000,000 in revenue by the Company during a consecutive twelve month period. In connection with the issuance of restricted Common Stock to certain of its directors, executive officers and employees, unvested restricted shares are subject to forfeiture. With the exception of 1,726,485 shares issued to employees and directors and 582,626 shares issued to a former director, which vest based upon achieving certain milestones, the Company records compensation expense over the vesting period based upon the fair market value on the date of grant for each share, adjusted for forfeitures. The Company recorded $577,263 and $463,970 for restricted stock based compensation costs for the six months ended June 30, 2017 and June 30, 2016, respectively. As of June 30, 2017, there was $490,426 of total unrecognized compensation cost, net of estimated forfeitures, related to unvested share-based compensation which vests only upon the achievement of certain performance criteria. A summary of the restricted stock issuances to directors, executive officers and employees is as follows: Number of Shares Weighted Average Grant Date Fair Value Unvested share balance, January 1, 2016 4,210,306 $ 0.75 Granted — — Vested (1,901,193 ) 1.33 Forfeited — — Unvested share balance, December 31, 2016 2,309,113 $ 0.21 Granted 7,112,119 0.19 Vested (7,112,119 ) 0.19 Forfeited — — Unvested share balance, June 30, 2017 2,309,113 $ 0.21 Stock Warrants In connection with two private placement offerings in March 2014 (the “2014 Offerings”), investors received one purchase warrant at $0.91 per share for each share of Common Stock purchased. The warrants issued to Wyatts Torch Equity Partners, LP (“Wyatts”) were incorrectly calculated. On March 6, 2017, the Company issued warrants to purchase 915,447 shares of Common Stock at $0.91 per share to Wyatts to correct for this error. There was no financial impact resulting from this warrant understatement other than an understatement of potentially dilutive shares. In connection with the 2016 Subscription, warrants to purchase 482,143 shares of Common Stock were issued at a price of $0.70 per share and are exercisable for a period of two years from the date of issuance. The following table summarizes warrant activity during the period: Outstanding at January 1, 2016 2,614,776 Issued in connection with the 2016 Subscription 482,143 Outstanding at December 31, 2016 3,096,919 Issued in connection with the 2014 Offerings 915,447 Outstanding at June 30, 2017 4,012,366 Exercisable at June 30, 2017 4,012,366 Advisory Services On October 3, 2013, the Company entered into an agreement with Ian Thompson for strategic business advisory services, public relations services and investor relations services with Ian Thompson. In connection with this agreement, the Company issued 167,204 shares of restricted Common Stock and recorded consulting fees of $501,612 during 2013, which was the fair market value of the stock on the date of issue. The stock is vested; however it is restricted from trading. Ian Thompson was also issued 200,000 shares of restricted Common Stock, which was to vest quarterly based upon the Company reaching certain market capitalization and revenue goals, in addition to providing the above services, with the last tranche vesting scheduled to vest on June 30, 2014. Consulting fees amounting to $105,000 and $280,000 were recorded in 2014 and 2013, respectively, related to the 200,000 shares of Common Stock. Throughout the term of the agreement, the Company requested that Ian Thompson render performance under the agreement and to provide evidence of same. Ian Thompson failed to perform in all material respects under the terms of the agreement and refused to provide evidence. On June 27, 2014, the Company terminated the agreement. The Company is taking all necessary steps for the cancellation of the 367,204 shares, due to lack of delivery of consideration and material breach of the agreement |
Stock Options
Stock Options | 6 Months Ended |
Jun. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Stock Options | NOTE 5 – STOCK OPTIONS On April 6, 2017, the Company granted stock options to purchase 356,559 shares and 1,500,000 shares of Common Stock pursuant to the 2012 Plan and the 2015 Plan, respectively. See note 3. The options were priced at the fair market value of the Common Stock and are immediately exercisable. The following table summarizes stock option activity under the Plans: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Outstanding, December 31, 2016 620,000 $ 0.255 2.2 Granted 1,856,559 $ 0.160 4.8 Expired — — — Forfeited — — — Outstanding, June 30, 2017 2,476,559 $ 0.184 4.1 Exercisable, June 30, 2017 2,476,559 $ 0.184 4.1 During the six months ended June 30, 2017 and 2016, compensation expense related to stock options of $214,690 and $37,618, respectively, was recorded. As of June 30, 2017, there was no unrecognized compensation cost related to non-vested stock options. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 6 – RELATED PARTY TRANSACTIONS As of June 30, 2017, accrued payroll of $36,514 was payable to the CEO, COO and Controller of the Company. See Note 7. As of December 31, 2016, accrued payroll of $484,600 was payable to the CEO and COO, and such amount included unpaid salary as well as unpaid bonus. During 2016, the CEO and the COO forgave unpaid salary due to them of $96,000 and $81,000, respectively. In January 2016, the Company sold 285,715 shares of Common Stock and warrants to purchase 142,857 shares of Common Stock at $0.70 per share to Wyatts for $100,000 pursuant to the 2016 Subscription. The managing member of Wyatts is the COO of the Company, as well as a Director of the Company. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 7 – SUBSEQUENT EVENTS In accordance with ASC Topic 855, “Subsequent Events,” In August 2017, the Company settled all of its accrued payroll balance at June 30, 2017. The CEO and the COO agreed to forego the receipt of cash owed to them as of June 30, 2017 of $10,000 each in exchange for shares of restricted Common Stock, which have no voting rights, are not eligible for dividends and are non-transferable unless the restrictions are lifted and the restrictions shall be lifted only upon the generation of $3,000,000 in revenue by the Company during a consecutive twelve month period. In addition, the Company paid its remaining accrued payroll balance of $16,514 in cash. |
Summary of Significant Accoun14
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The financial statements are prepared in conformity with GAAP. Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents include investment instruments and time deposits purchased with a maturity of three months or less. As of June 30, 2017 and December 31, 2016, the Company did not have any cash equivalents. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company provides for probable uncollectible amounts based upon its assessment of the current status of the individual receivables and after using reasonable collection efforts. The allowance for doubtful accounts as of June 30, 2017 and December 31, 2016 was zero. |
Inventories | Inventories Inventories, consisting solely of finished goods, are stated at the lower of cost (first-in, first-out method) or net realizable value (“NRV”). When necessary, the Company provides allowances to adjust the carrying value of its inventories to the lower of cost or NRV. |
Supplier Deposits | Supplier Deposits Supplier deposits consist of payments to manufacturers for future production. |
Revenue Recognition | Revenue Recognition Revenue from sales of products is recognized when persuasive evidence of an arrangement exists, delivery of products has occurred, the sales price is fixed or determinable and collectability is reasonably assured. Costs incurred for sales incentives and discounts are accounted for as a reduction in revenue. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs incurred to move finished goods from our sales distribution centers to customer locations are included in the line Selling, General and Administrative Expenses in our Statements of Operations. |
Net Loss Per Common Share | Net Loss Per Common Share Basic EPS is computed by dividing the income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted average number of shares of common stock and common stock equivalents outstanding during the periods. The following potentially dilutive securities have been excluded from the computation of weighted average shares outstanding as they would have had an anti-dilutive impact on the Company’s net loss per common share: Six Months Ended June 30, Shares underlying options outstanding 1,491,865 620,000 Shares underlying warrants outstanding 3,683,614 3,096,919 Total 5,175,479 3,716,919 Three Months Ended June 30, 2017 2016 Shares underlying options outstanding 2,354,149 620,000 Shares underlying warrants outstanding 4,012,366 3,096,919 Total 6,366,515 3,716,919 |
Income Taxes | Income Taxes The Company provides for income taxes using the asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. As of June 30, 2017 and December 31, 2016, the Company had no accrued interest or penalties. The Company has had no Federal or state tax examinations in the past nor does it have any at the current time. |
Stock-Based Compensation | Stock-Based Compensation ASC Topic 718, “ Accounting for Stock-Based Compensation The Company accounts for equity based transactions with non-employees under the provisions of ASC Subtopic 505-50, “ Equity-Based Payments to Non-Employees |
Fair value of financial instruments | Fair value of financial instruments The carrying amounts of financial instruments, which include cash, accounts receivable, accounts payable, accrued expenses and debt obligations, approximate their fair values due to their short-term nature. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09. Revenue from Contracts with Customers Revenue Recognition |
Reclassifications | Reclassifications Certain amounts in the June 30, 2016 Financial Statements have been reclassified to conform to the presentation used in the June 30, 2017 Financial Statements. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule Of Antidilutive Securities Excluded From Computation Of Earnings Per Share | For the Six Months Ended 2017 2016 Shares underlying options outstanding 1,491,865 620,000 Shares underlying warrants outstanding 3,683,614 3,096,919 Total 5,175,479 3,716,919 For the Three Months Ended June 30, 2017 2016 Shares underlying options outstanding 2,354,149 620,000 Shares underlying warrants outstanding 4,012,366 3,096,919 Total 6,366,515 3,716,919 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | Number of Shares Weighted Average Grant Date Fair Value Unvested share balance, January 1, 2016 4,210,306 $ 0.75 Granted — — Vested (1,901,193 ) 1.33 Forfeited — — Unvested share balance, December 31, 2016 2,309,113 $ 0.21 Granted 7,112,119 0.19 Vested (7,112,119 ) 0.19 Forfeited — — Unvested share balance, June 30, 2017 2,309,113 $ 0.21 |
Schedule Of Stockholders Equity Note Warrants Or Rights | Outstanding at January 1, 2016 2,614,776 Issued in connection with the 2016 Subscription 482,143 Outstanding at December 31, 2016 3,096,919 Issued in connection with the 2014 Offerings 915,447 Outstanding at June 30, 2017 4,012,366 Exercisable at June 30, 2017 4,012,366 |
Stock Options (Tables)
Stock Options (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Stock Options | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Outstanding, December 31, 2016 620,000 $ 0.255 2.2 Granted 1,856,559 $ 0.160 4.8 Expired — — — Forfeited — — — Outstanding, June 30, 2017 2,476,559 $ 0.184 4.1 Exercisable, June 30, 2017 2,476,559 $ 0.184 4.1 |
Summary of Significant Accoun18
Summary of Significant Accounting Policies - Antidilutive Securities Excluded From Computation Of Earnings Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accounting Policies [Abstract] | ||||
Shares underlying options outstanding | 2,354,149 | 620,000 | 1,491,865 | 620,000 |
Shares underlying warrants outstanding | 4,012,366 | 3,096,919 | 3,683,614 | 3,096,919 |
Total | 6,366,515 | 3,716,919 | 5,175,475 | 3,716,919 |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Sep. 15, 2016 | |
Monthly office fee | $ 2,259 | $ 2,230 | ||
Lease expense | $ 14,415 | $ 11,309 | ||
Common stock issued, per share | $ 0.001 | $ 0.001 | ||
CEO | ||||
Employment Agreement terms | Pursuant to the Simpson Agreement, Mr. Simpson will be paid a salary of $5,000 per month in cash and the right to receive 67,000 shares of restricted Common Stock per month. These shares have no voting rights, are not eligible for dividends and are non-transferable unless the restriction is lifted. The restriction shall be lifted only upon the generation of $3,000,000 in revenue by the Company during a consecutive twelve month period. Additionally, Mr. Simpson is entitled to an annual bonus comprised of cash and Common Stock based on performance goals established by the Board of Directors of the Company as set forth in the Simpson Agreement. The cash bonus is established at $44,400 per year. The stock bonus is set at 200,000 shares of Common Stock per year through December 31, 2025 based upon revenue performance goals. The revenue goals range from $2,400,000 to $19,200,000 per year. The bonus awards may be accelerated should revenue exceed the annual target amounts. | |||
Restricted Common Stock Issued | 1,882,237 | |||
Stock options issued | 995,546 | |||
Revenue required to life stock restriction | $ 3,000,000 | |||
COO | ||||
Employment Agreement terms | Pursuant to the Spinner Agreement, Mr. Spinner will be paid a salary of $5,000 per month in cash and the right to receive 55,000 shares of restricted Common Stock per month. These shares have no voting rights, are not eligible for dividends and are non-transferable unless the restriction is lifted. The restriction shall be lifted only upon the generation of $3,000,000 in revenue by the Company during a consecutive twelve month period. Additionally, Mr. Spinner is entitled to an annual bonus comprised of cash and Common Stock based on performance goals established by the Board of Directors of the Company as set forth in the Spinner Agreement. The cash bonus is established at $38,400 per year. The stock bonus is set at 200,000 shares of Common Stock per year beginning in the year 2020 through December 31, 2025 based upon revenue performance goals. The revenue goals range from $5,200,000 to $19,200,000 per year. The bonus awards may be accelerated should revenue exceed the annual target amounts. | |||
Restricted Common Stock Issued | 597,632 | |||
Stock options issued | 8,611,013 | |||
Revenue required to life stock restriction | $ 3,000,000 |
Stockholders' Equity (Deficit21
Stockholders' Equity (Deficit) - Schedule of Share-based Compensation, Restricted Stock Activity (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | ||
Unvested share balance | 2,309,113 | 4,210,306 |
Weighted Average Grant Date Fair Value, balance, Beginning | $ 0.21 | $ 0.75 |
Weighted Average Grant Date Fair Value, balance, End | $ 0.21 | $ 0.21 |
Number of Shares, Granted | 7,112,119 | |
Weighted Average Grant Date Fair Value, Granted | $ .19 | |
Number of Shares, Vested | (7,112,119) | (1,901,193) |
Weighted Average Grant Date Fair Value, Vested | $ .19 | $ 1.33 |
Number of Shares, Forfeited | ||
Weighted Average Grant Date Fair Value, Forfeited |
Stockholders' Equity (Deficit22
Stockholders' Equity (Deficit) - Schedule Of Stockholders Equity Note Warrants Or Rights (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |||
Warrants Outstanding | $ 4,012,366 | $ 3,096,919 | $ 2,614,776 |
Warrants Issued | 915,447 | 482,143 | |
Warrants Exercisable | 4,012,366 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Oct. 03, 2013 | May 31, 2017 | Jan. 20, 2016 | Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 06, 2017 | Dec. 31, 2016 | Oct. 31, 2015 | Oct. 03, 2014 | Jun. 30, 2013 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||
Common Stock, Shares Authorized | 190,000,000 | 190,000,000 | 190,000,000 | ||||||||||
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Common stock issued, per share | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Consideration for Stock issued (in Dollars) | $ 337,500 | ||||||||||||
Share-Based Compensation Arrangement By Share Based Payment Award Award Shares Which Vest Based Upon Certain Milestones | 2,026,884 | 2,026,884 | |||||||||||
Recorded Share-based Compensation Expense, in connection with restriced stock | $ 577,263 | $ 463,970 | |||||||||||
Unrecognized compensation expense related to unvested share-based compensation | $ 490,426 | $ 490,426 | |||||||||||
Restricted Common Stock issued | 3,138,125 | ||||||||||||
Agreement with Mr. Ian Thompson | |||||||||||||
Share-Based Compensation Arrangement By Share Based Payment Award Award Shares Which Vest Based Upon Certain Milestones | 200,000 | ||||||||||||
Shares issued for consulting work | 167,204 | ||||||||||||
Consulting fees | $ 501,612 | $ 105,000 | $ 280,000 | ||||||||||
Shares pending cancellation due to lack of delivery of consideration and break of the agreement | 367,204 | ||||||||||||
Employees and Directors | |||||||||||||
Share-Based Compensation Arrangement By Share Based Payment Award Award Shares Which Vest Based Upon Certain Milestones | 1,726,485 | ||||||||||||
Former Director | |||||||||||||
Share-Based Compensation Arrangement By Share Based Payment Award Award Shares Which Vest Based Upon Certain Milestones | 582,626 | ||||||||||||
CEO | |||||||||||||
Restricted Common Stock issued | 2,479,869 | 201,000 | |||||||||||
COO | |||||||||||||
Restricted Common Stock issued | 2,479,869 | 165,000 | |||||||||||
Executive Officers | |||||||||||||
Restricted Common Stock issued | 1,128,125 | ||||||||||||
Wyatt Torch Equity Partners, LP | |||||||||||||
Warrants issued | 915,447 | ||||||||||||
Exercise price, per share | $ 0.91 | ||||||||||||
2016 Subscription | |||||||||||||
Consideration for Stock issued (in Dollars) | $ 337,500 | ||||||||||||
Stock Issued During Period, Shares, New Issues | 1,428,572 | 964,286 | |||||||||||
Sale of Stock, Price Per Share (in Dollars per share) | $ .35 | ||||||||||||
Aggregate shares of common stock | 714,286 | 482,143 | |||||||||||
Warrants issued | 482,143 | ||||||||||||
Exercise price, per share | $ .70 | $ .70 | |||||||||||
Employee Stock Option | Long Term Incentive Equity Plan 2015 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,500,000 | ||||||||||||
Employee Stock Option | Long Term Incentive Equity Plan 2012 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,050,000 |
Stock Options (Details)
Stock Options (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | ||
Stock Options Outstanding | 2,476,559 | 620,000 |
Stock Options Outstanding, Weighted Average Exercise Price | $ 0.184 | $ .255 |
Stock Options Outstanding, Weighted Average Remaing Contractual Term | 4 years 1 month | 2 years 2 months |
Stock Options Granted | 1,856,559 | |
Stock Options Granted, Weighted Average Remaining Contractual Term | 4 years 9 months | |
Stock Options Expired | ||
Stock Options Expired, Weighted Average Exercise Price | ||
Stock Options Expired, Weighted Average Remaining Contractual Term | 0 years | |
Stock Options Forfeited | ||
Stock Options Forfeited, Weighted Average Exercise Price | ||
Stock Options Forfeited, Weighted Average Remaining Contractual Term | 0 years | |
Stock Optiones Exercisable | 2,476,559 | |
Stock Optiones Exercisable. Weighted Average Exercise Price | $ .184 | |
Stock Optiones Exercisable, Weighted Average Remaining Contractual Term | 4 years 1 month |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Apr. 06, 2017 | |
Compensation expense | $ 214,690 | $ 37,618 | |
Employee Stock Option | Long Term Incentive Equity Plan 2012 | |||
Stock options granted | 356,559 | ||
Employee Stock Option | Long Term Incentive Equity Plan 2015 | |||
Stock options granted | 1,500,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Jun. 30, 2017 | Jan. 31, 2016 | |
Common stock issued, value | $ 18,380 | $ 25,492 | |
Common stock issued, per share | $ 0.001 | $ 0.001 | |
CEO | |||
Accrued Payroll | $ 484,600 | $ 36,514 | |
Forgiveness of unpaid salary | 96,000 | ||
COO | |||
Accrued Payroll | 484,600 | 36,514 | |
Forgiveness of unpaid salary | $ 81,000 | ||
Controller | |||
Accrued Payroll | $ 36,514 | ||
Wyatts Torch Equity Partners, L.P. | |||
Common stock issued | 285,714 | ||
Common stock issued, value | $ 100,000 | ||
Warrants issued | 142,857 | ||
Common stock issued, per share | $ 0.70 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Accrued payroll | $ 113,437 | $ 39,329 |
Accrued payroll paid in cash | 16,514 | |
CEO | ||
Accrued payroll | 10,000 | |
COO | ||
Accrued payroll | $ 10,000 |