Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 15, 2016 | |
Document Information [Line Items] | ||
Entity Registrant Name | Pulse Beverage Corp | |
Entity Central Index Key | 1,420,569 | |
Trading Symbol | plsb | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 70,674,979 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash | $ 330,449 | $ 431,270 |
Accounts receivable, net (Note 3) | 688,197 | 386,462 |
Inventories (Note 4) | 897,746 | 988,910 |
Prepaid expenses | 57,080 | 15,461 |
Total Current Assets | 1,973,472 | 1,822,103 |
Property and equipment, net of accumulated depreciation of $318,440 and $266,099, respectively (Note 5) | 212,019 | 247,235 |
Intangible assets, net of accumulated amortization of $58,950 and $52,682, respectively (Note 5) | 1,130,947 | 1,131,793 |
Total Assets | 3,316,438 | 3,201,131 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 1,017,017 | 790,616 |
Promissory notes payable (Note 6) | 109,386 | |
Credit card indebtedness | 22,022 | 22,066 |
Loans payable, net (Note 7) | 1,450,000 | 755,771 |
Total Current Liabilities | 2,598,425 | 1,568,453 |
Stockholders’ Equity: | ||
Preferred stock, 1,000,000 shares authorized, $0.001 par value, none issued | ||
Common stock, 100,000,000 shares authorized, $0.00001 par value 70,674,979 and 68,447,202 issued and outstanding, respectively (Note 9) | 707 | 684 |
Additional paid-in capital | 15,098,011 | 14,879,160 |
Accumulated deficit | (14,380,705) | (13,247,166) |
Total Stockholders’ Equity | 718,013 | 1,632,678 |
Total Liabilities and Stockholders’ Equity | $ 3,316,438 | $ 3,201,131 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Property and Equipment, Accumulated Depreciation | $ 318,440 | $ 266,099 |
Intangible assets, accumulated amortization | $ 58,950 | $ 52,682 |
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred Stock, shares issued (in shares) | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common Stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common Stock, shares issued (in shares) | 70,674,979 | 70,674,979 |
Common Stock, shares outstanding (in shares) | 68,447,202 | 68,447,202 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Gross Sales | $ 1,003,780 | $ 1,276,066 | $ 1,741,195 | $ 2,021,222 |
Less: Promotional Allowances and Slotting Fees | (50,415) | (76,765) | (98,187) | (117,350) |
Net Sales | 953,365 | 1,199,301 | 1,643,008 | 1,903,872 |
Cost of Sales | 619,630 | 790,753 | 1,083,213 | 1,281,794 |
Gross Profit | 333,735 | 408,548 | 559,795 | 622,078 |
Expenses | ||||
Advertising, samples and displays | 16,912 | 20,376 | 37,239 | 39,369 |
Asset impairment | 3,183 | 13,741 | 8,268 | 17,846 |
Freight-out | 101,853 | 120,297 | 159,253 | 195,142 |
General and administration | 324,656 | 298,706 | 554,781 | 604,425 |
Salaries and benefits and broker/agent’s fees | 221,634 | 333,300 | 502,854 | 649,563 |
Stock-based compensation | 3,939 | |||
Total Operating Expenses | 668,238 | 786,420 | 1,266,334 | 1,506,345 |
Net Operating Loss | (334,503) | (377,872) | (706,539) | (884,267) |
Other Income (Expense) | ||||
Interest income (expense), net | (42,016) | 21 | (72,386) | (421) |
Interest expense - amortization of debt issuance costs | (170,964) | (250,934) | ||
Loss from discontinued operations (Note 11) | (28,784) | (103,680) | ||
Total Other Income (Expense) | (241,764) | 21 | (427,000) | (421) |
Net loss | $ (576,267) | $ (377,851) | $ (1,133,539) | $ (884,688) |
Net Loss Per Share – Basic and Diluted (in dollars per share) | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.02) |
Weighted Average Shares Outstanding – Basic and Diluted (in shares) | 69,915,000 | 64,606,000 | 69,301,000 | 59,692,000 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash Flow from Operating Activities | ||
Loss from discontinued operations | $ (103,680) | |
Loss from ongoing operations | (1,029,859) | (884,688) |
Net loss | (1,133,539) | (884,688) |
Adjustments to reconcile net loss to net cash used in operations: | ||
Amortization and depreciation | 58,608 | 52,333 |
Asset impairment | 8,268 | 17,846 |
Bad debt allowance | 40,000 | 1,035 |
Amortization of deferred financing fees | 250,933 | |
Shares and options issued for services | 81,373 | 115,000 |
Reduction of note receivable for services | 82,800 | |
Changes in operating assets and liabilities: | ||
(Increase) in accounts receivable | (341,735) | (239,324) |
(Increase) decrease in prepaid expenses | (4,118) | 8,853 |
Decrease (increase) in inventories | 82,897 | (59,710) |
Decrease in other current assets | 7,087 | |
Increase in accounts payable and accrued expenses | 260,743 | 103,797 |
Net Cash Used in Operating Activities | (696,570) | (794,971) |
Cash Flow to Investing Activities | ||
Purchase of property and equipment | (17,125) | (32,973) |
Increase in note receivable | (827) | |
Acquisition of intangible assets | (5,422) | (8,576) |
Net Cash Used in Investing Activities | (22,547) | (42,376) |
Cash Flow from Financing Activities | ||
Proceeds from loans, net of debt issuance costs | 763,360 | |
Repayment of loans payable | (145,064) | |
Proceeds from the sale of common stock, net of costs | 905,000 | |
Net Cash Provided by Financing Activities | 618,296 | 905,000 |
(Decrease) Increase in Cash | (100,821) | 67,653 |
Cash - Beginning of Period | 431,270 | 49,517 |
Cash - End of Period | 330,449 | 117,170 |
Non-Cash Financing and Investing Activities: | ||
Shares issued for prepaid services | 37,500 | |
Shares issued to settle debt | 100,000 | 30,000 |
Supplemental Disclosures: | ||
Interest paid | 65,470 | |
Income taxes paid |
Note 1 - Nature of Operations
Note 1 - Nature of Operations | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Nature of Operations [Text Block] | 1. Nature of Operations Darlington Mines Ltd. (“Darlington”) was incorporated in the State of Nevada on August 23, 2006. On February 15, 2011 Darlington Mines Ltd. closed a voluntary share exchange transaction with a private Colorado company, The Pulse Beverage Corporation, which was formed on March 17, 2010. The Pulse Beverage Corporation became a wholly-owned subsidiary. On February 16, 2011 Darlington’s name was changed to “The Pulse Beverage Corporation”. We manufacture and distribute Natural Cabana® Lemonade, Limeade and Coconut Water and PULSE® Heart & Body Health functional beverages. Our products are distributed nationwide primarily through a series of distribution agreements with various independent local and regional distributors and on a warehouse direct basis with major retail chain stores. Our products are also distributed internationally in Canada, China and Mexico. As of June 30, 2016, we had cash of $330,449 and a working capital deficiency of $624,953. On March 22, 2016, we entered into Amendment No. 1 to the Senior Secured Revolving Credit Facility Agreement (the “Amended Credit Facility”) whereby we were approved for an additional $1,000,000 loan under the Amended Credit Facility having the same terms as the initial $900,000 loan. The Amended and Restated Senior Secured Revolving Convertible Promissory Note matures November 6, 2016 unless extended by the Lender. During the six months ended June 30, 2016 we received gross proceeds of $850,000 less transaction costs of $86,640 for net proceeds of $763,360. In connection with this additional loan, we agreed to issue 10,558,069 shares of our restricted common stock to the Lender as an Advisory Fee. Notwithstanding the above, the Lender is restricted from receiving these shares to the extent that, after giving effect to the receipt of the shares, the Lender would beneficially own more than 4.99% of our common stock. Any shares not issued as a result of this limitation will be issued at a later date, and from time to time, when the issuance of these will not result in the Lender beneficially owning more than 4.99% of our common stock. We have the right to repurchase these shares by paying $350,000 to the Lender on or before September 22, 2016. We intend to continually monitor and adjust our business plan as necessary to respond to developments in our business, our markets and the broader economy. As of August 15, 2016 we believe our cash on hand, available working capital, credit facility and equity financing alternatives will be made available to us to support our working capital needs through to June 30, 2017 which we believe, is sufficient to alleviate the uncertainties relating to our ability to successfully execute on our business plan and finance our operations through June 30, 2017. These alternatives may require significant cash payments for interest and other costs which could be highly dilutive to our existing shareholders. Our financial statements for the periods presented were prepared assuming we will continue in operation for the foreseeable future and will be able to realize assets and settle liabilities and commitments in the normal course of business. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Significant Accounting Policies [Text Block] | 2. Summary of Significant Accounting Policies Basis of presentation and consolidation The interim unaudited condensed consolidated financial statements for the three months and six months ended June 30, 2016 and 2015 have been prepared in accordance with accounting principles generally accepted in the United States. Our fiscal year end is on December 31st. These financial statements include our accounts and the accounts of our wholly-owned subsidiaries, Natural Cabana SA de CV (A Mexico Subsidiary) and Natural Cabana Distribution Inc. (A US Subsidiary discontinued on May 31, 2016. See Note 11). The foregoing unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information using the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these condensed consolidated financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included on Form 10-K for the year ended December 31, 2015. In our opinion, the unaudited interim condensed consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented. Operating results for the three months and six months ended June 30, 2016, are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. Use of Estimates The preparation of financial statements in accordance with United States generally accepted accounting principles requires us 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 in the reporting period. We regularly evaluate estimates and assumptions related to the useful life and recoverability of long-lived assets, stock-based compensation, and deferred income tax asset valuation allowances. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments as to the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by us may differ materially and adversely from our estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Cash and Cash Equivalents We maintain cash balances with financial institutions that may exceed federally insured limits. We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash equivalents include cash invested in money market accounts. As of June 30, 2016 and December 31, 2015, there were no cash equivalents. We place our cash and temporary cash investments with high credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit of $250,000. As of June 30, 2016 and December 31, 2015, we exceeded insurance limits by $nil and $86,711, respectively. Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured. Ownership and title of our products pass to customers upon delivery of the products to customers. Certain of our distributors may also perform a separate function as a co-packer on our behalf. In such cases, ownership of and title to our products that are co-packed on our behalf by those co-packers who are also distributors, passes to such distributors when we are notified by them that they have taken transfer or possession of the relevant portion of our finished goods. Net sales have been determined after deduction of discounts, slotting fees and other promotional allowances in accordance with ASC 605-50. All sales to distributors and customers are final; however, in limited instances, due to product quality issues or distributor terminations, we may accept returned product. To date, such returns have been de minimis. Seasonality Our sales are seasonal and we experience fluctuations in quarterly results as a result of many factors. Historically, we have generated a higher percentage of our revenues during the warm weather months of April through September. Timing of customer purchases will vary each year and sales can be expected to shift from one quarter to another. As a result, we believe that period-to-period comparisons of results of operations are not necessarily meaningful and should not be relied upon as any indication of future performance or results expected for the entire fiscal year. Recent Pronouncements We continually assess any new accounting pronouncements to determine their applicability to our operations and financial reporting. Where it is determined that a new accounting pronouncement affects our financial reporting, we undertake a study to determine the consequence of the change to our financial statements and assure that there are proper controls in place to ascertain that our financial statements properly reflect the change. During the first quarter of 2015, we adopted FASB’s guidance on reporting discontinued operations and disclosures of disposals of components of an entity. This standard raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The guidance is effective for annual reporting periods ending after December 15, 2014. Early adoption was permitted but only for disposals that have not been reported in financial statements previously issued. The adoption of this guidance has not had a material impact on our financial position, results of operations or cash flows. During the fourth quarter of 2015, we adopted ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs," which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, and amortization of those costs should be reported as interest expense. This ASU is effective for annual and interim periods beginning after December 15, 2015, and early adoption is permitted for financial statements that have not been previously issued. The new guidance should be applied on a retrospective basis for each period presented in the balance sheet. We adopted this change concurrently with our senior secured revolving loan together with related costs during the fourth quarter of 2015. In November 2015, the FASB issued (ASU) 2015-17, “Balance Sheet Classification of Deferred Taxes . ” In November 2014, the FASB issued ASU 2014-16, "Derivatives and Hedging (Topic 815)." Entities commonly raise capital by issuing different classes of shares, including preferred stock, that entitle the holders to certain preferences and rights over the other shareholders. The specific terms of those shares may include conversion rights, redemption rights, voting rights, and liquidation and dividend payment preferences, among other features. One or more of those features may meet the definition of a derivative under GAAP. Shares that include such embedded derivative features are referred to as hybrid financial instruments. The objective of this update is to eliminate the use of different methods in practice and thereby reduce existing diversity under GAAP in the accounting for hybrid financial instruments issued in the form of a share. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. We adopted this guidance in the first quarter 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows . In April 2015, the FASB issued ASU 2015-05, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement," which provides guidance about whether a cloud computing arrangement includes a software license. It also provides guidance related to a customer’s accounting for fees paid in a cloud computing arrangement. This standard provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This guidance is effective for interim and annual reporting periods beginning after December 15, 2015, and early adoption is permitted. We adopted this guidance on January 1, 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In May 2015, the FASB issued ASU 2015-07, "Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)," which removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. Further, the amendments remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015, and early adoption is permitted. The new guidance should be applied on a retrospective basis to all periods presented. We adopted this guidance on January 1, 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In September 2015, the FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement –Period Adjustments . ” Changes to the accounting for measurement-period adjustments relate to business combinations. Currently, an acquiring entity is required to retrospectively adjust the balance sheet amounts of the acquired business recognized at the acquisition date with a corresponding adjustment to goodwill as a result of changes made to the balance sheet amounts of the acquired business. The measurement period is the period after the acquisition date during which the acquirer may adjust the balance sheet amounts recognized for a business combination (generally up to one year from the date of acquisition). The changes eliminate the requirement to make such retrospective adjustments, and, instead require the acquiring entity to record these adjustments in the reporting period they are determined. The new standard is effective for both public and private companies for periods beginning after December 15, 2015. We adopted this guidance in the first quarter 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. Recent Accounting Pronouncements Issued But Not Adopted as of June 30, 2016 In July 2015, the FASB issued ASU 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory," which applies to inventory that is measured using first-in, first-out ("FIFO") or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using the last-in, first-out ("LIFO") method. This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim or annual reporting period. We do not expect the adoption of this guidance to have an impact on our consolidated financial statements. In January 2016, the FASB issued an accounting standard update which requires, among other things, that entities measure equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) at fair value, with changes in fair value recognized in earnings. Under the standard, entities will no longer be able to recognize unrealized holding gains and losses on equity securities classified today as available for sale as a component of other comprehensive income. For equity investments without readily determinable fair values the cost method of accounting is also eliminated, however subject to certain exceptions, entities will be able to elect to record equity investments without readily determinable fair values at cost, less impairment and plus or minus adjustments for observable price changes, with all such changes recognized in earnings. This new standard does not change the guidance for classifying and measuring investments in debt securities and loans. The standard is effective for us on July 1, 2018 (the first quarter of our 2019 fiscal year). We are currently evaluating the anticipated impact of this standard on our financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Topic 842 affects any entity that enters into a lease, with some specified scope exemptions. The guidance in this Update supersedes Topic 840, Leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For public companies, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact of adopting ASU No. 2016-02 on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation, or ASU No. 2016-09. The areas for simplification in this Update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. We are currently evaluating the impact of adopting ASU No. 2016-09 on our consolidated financial statements. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing |
Note 3 - Accounts Receivable
Note 3 - Accounts Receivable | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Financing Receivables [Text Block] | 3. Accounts Receivable Accounts receivable consists of the following as of: June 30, 2016 (Unaudited) December 31, 2015 Trade accounts receivable $ 868,121 $ 534,727 Less: Allowance for doubtful accounts (182,756 ) (156,090 ) Trade accounts receivable - net 685,365 378,637 Value added tax recoverable 2,832 2,290 Due from suppliers of services - 5,535 Total accounts receivable, net of allowance $ 688,197 $ 386,462 |
Note 4 - Inventories
Note 4 - Inventories | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Inventory Disclosure [Text Block] | 4. Inventories Inventories consists of the following: June 30, 2016 (Unaudited) December 31, 2015 Finished goods $ 243,294 $ 344,764 Raw materials 629,399 644,146 Inventory deposit 25,053 - Total inventory $ 897,746 $ 988,910 |
Note 5 - Property and Equipment
Note 5 - Property and Equipment and Intangible Assets | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Property, Plant, and Equipment and Intangible Assets [Text Block] | 5. Property and Equipment and Intangible Assets Property and equipment consists of: June 30, 2016 (Unaudited) December 31, 2015 Manufacturing, warehouse, display equipment and molds $ 354,378 $ 337,253 Office equipment and furniture 41,581 41,581 Mobile display unit and vehicles 134,500 134,500 Less: depreciation (318,440 ) (266,099 ) Total property and equipment $ 212,019 $ 247,235 Depreciation expense for the three months ended June 30, 2016 and 2015 was $26,453, and $23,432, respectively and for the six months ended June 30, 2016 and 2015 was $52,341 and $45,490, respectively. Intangible assets consists of: June 30, 2016 (Unaudited) December 31, 2015 Formulations, rights and patents $ 969,696 $ 969,696 Website 62,675 62,675 Less: amortization (58,950 ) (52,682 ) Trademarks – not amortized due to indefinite life 157,526 152,104 Total intangible assets $ 1,130,947 $ 1,131,793 Amortization expense for the three months ended June 30, 2016 and 2015 was $3,134 and $3,710, respectively and for the six months ended June 30, 2016 and 2015 was $6,267 and $6,843, respectively. |
Note 6 - Promissory Notes Payab
Note 6 - Promissory Notes Payable | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Promissory Notes Payable [Text Block] | 6. Promissory Notes Payable On June 30, 2016 we negotiated settlements with two freight vendors by issuing promissory notes for a total of $109,386. These notes are unsecured as follows: a) Promissory Note #1 - $83,472 repayable in escalating monthly instalments starting July 24, 2016 and ending June 24, 2017 until paid. Interest is at 10%; and b) Promissory Note #2 - $25,914 repayable $500 per month without interest. |
Note 7 - Loans Payable
Note 7 - Loans Payable | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | 7. Loans Payable Loans payable consists of the following: June 30, 2016 (Unaudited) December 31, 2015 Short-term loan – (a) below $ 14,897 $ 15,000 Short-term loan – related party – (a) below 129,000 130,000 Total short-term loans 143,897 145,000 Senior Secured Revolving Note – (b) below 1,550,080 844,040 Less: unamortized debt issuance costs (243,977 ) (233,269 ) Net carrying value 1,306,103 610,771 Total loans payable $ 1,450,000 $ 755,771 a) I n September, 2015 we received short-term loans totaling $145,000 of which $130,000 was received from a family trust of our Chief Executive Officer. These loans are unsecured and are due on demand. Interest of $2,676 has been accrued at June 30, 2016 and included in accrued expenses. As of August 15, 2016 no demand for repayment has been received. b) On November 6, 2015, we entered into a Credit Agreement with TCA Global Credit Master Fund, LP (the “Lender”). Under the terms of the Credit Agreement, the Lender has committed to lend a total of $3,500,000 (the “Credit Facility”) to us pursuant to a senior secured revolving note (the “Note”). The initial tranche of $650,000 was funded on November 6, 2015 and a second tranche of $250,000 was funded on December 22, 2015 for a total of $900,000 advanced against this Credit Facility. This loan matures on November 6, 2016 unless extended by the Lender. We must meet specific monthly collateral requirements to further draw upon the Credit Facility. The Credit Facility is secured by a senior secured interest in all of our assets. We are charged a 12% per annum rate of interest plus a 6% per annum administration fee on the daily loan balance outstanding. Repayment terms are 20% of gross receipts. Associated with the closing of the Credit Facility we incurred $281,230 of debt issuance costs which is being amortized to interest expense over the term of the loan to November 6, 2016. The Lender has the right, in the Event of Default, to convert any outstanding amounts under the Note into restricted shares of the Company’s common stock based on 85% of the weighted value average price of our common shares over the prior 5 trading days prior to conversion. However, the Lender may not convert any portion of the Note to the extent that after giving effect to the shares which would be received on conversion, the Lender would beneficially own more than 4.99% of our common stock. In connection with the Credit Facility, we are obligated to pay a $150,000 facility fee which is included in accounts payable and accrued liabilities. As security for this fee we issued 3,000,000 shares of restricted common stock to the Lender who has the right to sell enough shares to recover its fee. These shares are issued and outstanding as of June 30, 2016, however, the value will be recognized as the related liability is extinguished. Any excess shares not sold by the Lender will be returned to us for cancellation. The right to repurchase these shares has expired. On March 22, 2016, we entered into Amendment No. 1 to the Senior Secured Revolving Credit Facility Agreement (the “Amended Credit Facility”) whereby we were approved for an additional $1,000,000 loan having the same terms as the initial $900,000 loan described above. The Amended and Restated Senior Secured Revolving Convertible Promissory Note matures November 6, 2016 unless extended by the Lender. During the six months ended June 30, 2016 we received gross proceeds of $850,000 less transaction costs of $86,640 for net proceeds of $763,360. In connection with this additional loan, we agreed to issue 10,558,069 shares of our restricted common stock to the Lender as an Advisory Fee. Notwithstanding the above, the Lender is restricted from receiving these shares to the extent that, after giving effect to the receipt of the shares, the Lender would beneficially own more than 4.99% of our common stock. Any shares not issued as a result of this limitation will be issued at a later date, and from time to time, when the issuance of these will not result in the Lender beneficially owning more than 4.99% of our common stock. We have the right to repurchase these shares by paying $350,000 to the Lender on or before September 22, 2016. |
Note 8 - Stock-based Compensati
Note 8 - Stock-based Compensation | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 8. Stock-based Compensation There is no unrecorded stock-based compensation to record in a future period. |
Note 9 - Common Stock
Note 9 - Common Stock | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | 9. Common Stock We have 100,000,000 shares of common stock authorized at a par value of $0.00001. On July 7, 2016 we filed Amendment #1 to our Schedule 14A Information Proxy Statement filed pursuant to Section 14 (a) of the Securities Exchange Act of 1934 to approve an amendment to our Articles of Incorporation such that we would be authorized to issue up to 500,000,000 shares of common stock. Equity transactions d uring the six months ended June 30, 2016: a) On January 31, 2016 we issued 238,889 common shares and on February 29, 2016 we issued 238,889 common shares having an aggregate fair value of $40,611 pursuant to an employment contract with an officer/director. This contract expired on March 8, 2016 and pursuant to the contract the officer/director is to return 50% of shares issued. A total of 210,548 shares are to be returned for cancellation. These shares were valued at $0.08 per share or $16,844 in total which amount was deducted from additional paid in capital; b) On April 12, 2016 we issued 50,000 common shares to a former Advisory Board Member for the past use of her name on our website. The value of these shares being $3,875 was charged to operations during the three months ended June 30, 2016; c) On May 5 and June 7, 2016 we issued 1,000,000 common shares and 200,000 common shares, respectively, to settle $120,000 of creditor debt. These shares were valued at $0.10 based on a negotiated settlement price dated April 21, 2016; d) During the three months ended June 30, 2016 we issued a total of 250,000 common shares at an average fair value of $0.12 per share to a service provider pursuant to a Consultant Agreement dated April 11, 2016. The aggregate value of these shares, being $29,792, was charged to operations during the three months ended June 30, 2016. We are committed to issuing an additional 250,000 shares on or before September 11, 2016; and e) On May 11, 2016 we issued 250,000 common shares at $0.15 per share to a service provider pursuant to a Strategic Advisory and Services Agreement. These shares were valued at the 5 days weight average price prior to issuance. The service provider is to source new equity or debt capital, as such, the value of these shares, being $37,500, has been included in prepaid expenses to be deducted from proceeds of a future financing or charged to operations should a financing not be completed. Equity transactions during the six months ended June 30, 2015: a) On March 27, 2015 we sold 10,050,000 Units at $0.10 per Unit for cash proceeds of $1,005,000 of which $100,000 was received as at December 31, 2014, $860,000 was received in cash and $45,000 was shares for debt. On May 27, 2015 we sold 750,000 Units at $0.10 per Unit for cash proceeds of $45,000, and debt settlement of $30,000. Each Unit consisted of one share of restricted common stock and one-half of a warrant. Each whole warrant allows the holder to purchase one additional share at a price of $0.20 per share at any time between March 10, 2016 and May 27, 2016. |
Note 10 - Warrants
Note 10 - Warrants | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Warrants Disclosure [Text Block] | 10. Warrants At June 30, 2016 we had 4,664,997 common stock purchases warrants outstanding having an average exercise price of $0.52 per common share and having an average expiration date of .58 years. During the six months ended June 30, 2016 warrants to acquire 16,415,083 common shares expired unexercised. |
Note 11 - Loss from Discontinue
Note 11 - Loss from Discontinued Operations | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | 11. Loss from Discontinued Operations During February, 2016 we began our own Southern California distributorship, Natural Cabana Distribution Inc. Through this subsidiary we began selling Natural Cabana® Lemonades/Limeades and Coconut Waters to existing accounts in Southern California while we searched for a suitable independent large distributorship in the area to replace our former distributor. We made this strategic decision in order to maintain existing regional retail accounts in the area. On May 31, 2016 we discontinued this temporary operation and moved our ongoing business to a large independent distributor. During the three months ended June 30, 2016 we received $20,838 of net revenue for this project. Cost of sales was $15,400 for a gross profit of $5,438. We incurred expenses of $11,153 and recorded a bad debt of $23,069. Our net loss from discontinued operations for the three months ended June 30, 2016 was $28,784. During the six months ended June 30, 2016 we received $73,740 of net revenue for this project. Cost of sales was $59,627 for a gross profit of $14,113. We incurred expenses of $94,724 and recorded a bad debt of $23,069. Our net loss from discontinued operations for the six months ended June 30, 2016 was $103,680 which also represents negative operating cash flow from discontinued operations. |
Note 12 - Subsequent Events
Note 12 - Subsequent Events | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | 12. Subsequent Events We evaluated all subsequent events through the date these financial statements were issued and determined that there are no subsequent events to record or disclose. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of presentation and consolidation The interim unaudited condensed consolidated financial statements for the three months and six months ended June 30, 2016 and 2015 have been prepared in accordance with accounting principles generally accepted in the United States. Our fiscal year end is on December 31st. These financial statements include our accounts and the accounts of our wholly-owned subsidiaries, Natural Cabana SA de CV (A Mexico Subsidiary) and Natural Cabana Distribution Inc. (A US Subsidiary discontinued on May 31, 2016. See Note 11). The foregoing unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information using the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these condensed consolidated financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included on Form 10-K for the year ended December 31, 2015. In our opinion, the unaudited interim condensed consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented. Operating results for the three months and six months ended June 30, 2016, are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in accordance with United States generally accepted accounting principles requires us 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 in the reporting period. We regularly evaluate estimates and assumptions related to the useful life and recoverability of long-lived assets, stock-based compensation, and deferred income tax asset valuation allowances. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments as to the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by us may differ materially and adversely from our estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents We maintain cash balances with financial institutions that may exceed federally insured limits. We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash equivalents include cash invested in money market accounts. As of June 30, 2016 and December 31, 2015, there were no cash equivalents. We place our cash and temporary cash investments with high credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit of $250,000. As of June 30, 2016 and December 31, 2015, we exceeded insurance limits by $nil and $86,711, respectively. |
Revenue Recognition, Allowances [Policy Text Block] | Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured. Ownership and title of our products pass to customers upon delivery of the products to customers. Certain of our distributors may also perform a separate function as a co-packer on our behalf. In such cases, ownership of and title to our products that are co-packed on our behalf by those co-packers who are also distributors, passes to such distributors when we are notified by them that they have taken transfer or possession of the relevant portion of our finished goods. Net sales have been determined after deduction of discounts, slotting fees and other promotional allowances in accordance with ASC 605-50. All sales to distributors and customers are final; however, in limited instances, due to product quality issues or distributor terminations, we may accept returned product. To date, such returns have been de minimis. |
Seasonality Policy [Policy Text Block] | Seasonality Our sales are seasonal and we experience fluctuations in quarterly results as a result of many factors. Historically, we have generated a higher percentage of our revenues during the warm weather months of April through September. Timing of customer purchases will vary each year and sales can be expected to shift from one quarter to another. As a result, we believe that period-to-period comparisons of results of operations are not necessarily meaningful and should not be relied upon as any indication of future performance or results expected for the entire fiscal year. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Pronouncements We continually assess any new accounting pronouncements to determine their applicability to our operations and financial reporting. Where it is determined that a new accounting pronouncement affects our financial reporting, we undertake a study to determine the consequence of the change to our financial statements and assure that there are proper controls in place to ascertain that our financial statements properly reflect the change. During the first quarter of 2015, we adopted FASB’s guidance on reporting discontinued operations and disclosures of disposals of components of an entity. This standard raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The guidance is effective for annual reporting periods ending after December 15, 2014. Early adoption was permitted but only for disposals that have not been reported in financial statements previously issued. The adoption of this guidance has not had a material impact on our financial position, results of operations or cash flows. During the fourth quarter of 2015, we adopted ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs," which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, and amortization of those costs should be reported as interest expense. This ASU is effective for annual and interim periods beginning after December 15, 2015, and early adoption is permitted for financial statements that have not been previously issued. The new guidance should be applied on a retrospective basis for each period presented in the balance sheet. We adopted this change concurrently with our senior secured revolving loan together with related costs during the fourth quarter of 2015. In November 2015, the FASB issued (ASU) 2015-17, “Balance Sheet Classification of Deferred Taxes . ” In November 2014, the FASB issued ASU 2014-16, "Derivatives and Hedging (Topic 815)." Entities commonly raise capital by issuing different classes of shares, including preferred stock, that entitle the holders to certain preferences and rights over the other shareholders. The specific terms of those shares may include conversion rights, redemption rights, voting rights, and liquidation and dividend payment preferences, among other features. One or more of those features may meet the definition of a derivative under GAAP. Shares that include such embedded derivative features are referred to as hybrid financial instruments. The objective of this update is to eliminate the use of different methods in practice and thereby reduce existing diversity under GAAP in the accounting for hybrid financial instruments issued in the form of a share. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. We adopted this guidance in the first quarter 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows . In April 2015, the FASB issued ASU 2015-05, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement," which provides guidance about whether a cloud computing arrangement includes a software license. It also provides guidance related to a customer’s accounting for fees paid in a cloud computing arrangement. This standard provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This guidance is effective for interim and annual reporting periods beginning after December 15, 2015, and early adoption is permitted. We adopted this guidance on January 1, 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In May 2015, the FASB issued ASU 2015-07, "Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)," which removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. Further, the amendments remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015, and early adoption is permitted. The new guidance should be applied on a retrospective basis to all periods presented. We adopted this guidance on January 1, 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. In September 2015, the FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement –Period Adjustments . ” Changes to the accounting for measurement-period adjustments relate to business combinations. Currently, an acquiring entity is required to retrospectively adjust the balance sheet amounts of the acquired business recognized at the acquisition date with a corresponding adjustment to goodwill as a result of changes made to the balance sheet amounts of the acquired business. The measurement period is the period after the acquisition date during which the acquirer may adjust the balance sheet amounts recognized for a business combination (generally up to one year from the date of acquisition). The changes eliminate the requirement to make such retrospective adjustments, and, instead require the acquiring entity to record these adjustments in the reporting period they are determined. The new standard is effective for both public and private companies for periods beginning after December 15, 2015. We adopted this guidance in the first quarter 2016. The adoption of this guidance did not have a material impact on our financial position, results of operations or cash flows. Recent Accounting Pronouncements Issued But Not Adopted as of June 30, 2016 In July 2015, the FASB issued ASU 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory," which applies to inventory that is measured using first-in, first-out ("FIFO") or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using the last-in, first-out ("LIFO") method. This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim or annual reporting period. We do not expect the adoption of this guidance to have an impact on our consolidated financial statements. In January 2016, the FASB issued an accounting standard update which requires, among other things, that entities measure equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) at fair value, with changes in fair value recognized in earnings. Under the standard, entities will no longer be able to recognize unrealized holding gains and losses on equity securities classified today as available for sale as a component of other comprehensive income. For equity investments without readily determinable fair values the cost method of accounting is also eliminated, however subject to certain exceptions, entities will be able to elect to record equity investments without readily determinable fair values at cost, less impairment and plus or minus adjustments for observable price changes, with all such changes recognized in earnings. This new standard does not change the guidance for classifying and measuring investments in debt securities and loans. The standard is effective for us on July 1, 2018 (the first quarter of our 2019 fiscal year). We are currently evaluating the anticipated impact of this standard on our financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Topic 842 affects any entity that enters into a lease, with some specified scope exemptions. The guidance in this Update supersedes Topic 840, Leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For public companies, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact of adopting ASU No. 2016-02 on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation, or ASU No. 2016-09. The areas for simplification in this Update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. We are currently evaluating the impact of adopting ASU No. 2016-09 on our consolidated financial statements. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing |
Note 3 - Accounts Receivable (T
Note 3 - Accounts Receivable (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes Tables | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | Accounts receivable consists of the following as of: June 30, 2016 (Unaudited) December 31, 2015 Trade accounts receivable $ 868,121 $ 534,727 Less: Allowance for doubtful accounts (182,756 ) (156,090 ) Trade accounts receivable - net 685,365 378,637 Value added tax recoverable 2,832 2,290 Due from suppliers of services - 5,535 Total accounts receivable, net of allowance $ 688,197 $ 386,462 |
Note 4 - Inventories (Tables)
Note 4 - Inventories (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes Tables | |
Schedule of Inventory, Current [Table Text Block] | Inventories consists of the following: June 30, 2016 (Unaudited) December 31, 2015 Finished goods $ 243,294 $ 344,764 Raw materials 629,399 644,146 Inventory deposit 25,053 - Total inventory $ 897,746 $ 988,910 |
Note 5 - Property and Equipme21
Note 5 - Property and Equipment and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | Property and equipment consists of: June 30, 2016 (Unaudited) December 31, 2015 Manufacturing, warehouse, display equipment and molds $ 354,378 $ 337,253 Office equipment and furniture 41,581 41,581 Mobile display unit and vehicles 134,500 134,500 Less: depreciation (318,440 ) (266,099 ) Total property and equipment $ 212,019 $ 247,235 |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Intangible assets consists of: June 30, 2016 (Unaudited) December 31, 2015 Formulations, rights and patents $ 969,696 $ 969,696 Website 62,675 62,675 Less: amortization (58,950 ) (52,682 ) Trademarks – not amortized due to indefinite life 157,526 152,104 Total intangible assets $ 1,130,947 $ 1,131,793 |
Note 7 - Loans Payable (Tables)
Note 7 - Loans Payable (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes Tables | |
Schedule of Debt [Table Text Block] | Loans payable consists of the following: June 30, 2016 (Unaudited) December 31, 2015 Short-term loan – (a) below $ 14,897 $ 15,000 Short-term loan – related party – (a) below 129,000 130,000 Total short-term loans 143,897 145,000 Senior Secured Revolving Note – (b) below 1,550,080 844,040 Less: unamortized debt issuance costs (243,977 ) (233,269 ) Net carrying value 1,306,103 610,771 Total loans payable $ 1,450,000 $ 755,771 |
Note 1 - Nature of Operations (
Note 1 - Nature of Operations (Details Textual) - USD ($) | Nov. 06, 2016 | Dec. 22, 2015 | Nov. 06, 2015 | Dec. 22, 2015 | Jun. 30, 2016 | Mar. 22, 2016 |
Amended Credit Facility [Member] | Advisory Fee [Member] | ||||||
Stock Issuable, Shares, Restricted Common Stock | 10,558,069 | |||||
Amended Credit Facility [Member] | Advisory Services Fee [Member] | ||||||
Debt Instrument, Fee Amount | $ 350,000 | |||||
Amended Credit Facility [Member] | ||||||
Line of Credit Facility, Additional Borrowings | $ 1,000,000 | |||||
Proceeds from Lines of Credit, Gross | 850,000 | |||||
Payments of Debt Issuance Costs | 86,640 | |||||
Proceeds from Lines of Credit | $ 763,360 | |||||
Common Stock Owned by Lender, Maximum Threshold | 4.99% | |||||
TCA Global Credit Master Fund Credit Facility [Member] | ||||||
Long-term Line of Credit | $ 900,000 | |||||
Payments of Debt Issuance Costs | $ 281,230 | |||||
Proceeds from Lines of Credit | $ 250,000 | $ 650,000 | $ 900,000 | |||
Common Stock Owned by Lender, Maximum Threshold | 4.99% | |||||
Cash | $ 330,449 | |||||
Working Capital | $ (624,953) |
Note 2 - Summary of Significa24
Note 2 - Summary of Significant Accounting Policies (Details Textual) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Cash, FDIC Insured Amount | $ 250,000 | |
Cash, Uninsured Amount | 0 | $ 86,711 |
Cash Equivalents, at Carrying Value | $ 0 | $ 0 |
Note 3 - Schedule of Accounts R
Note 3 - Schedule of Accounts Receivable (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Trade accounts receivable | $ 868,121 | $ 534,727 |
Less: Allowance for doubtful accounts | (182,756) | (156,090) |
Trade accounts receivable - net | 685,365 | 378,637 |
Value added tax recoverable | 2,832 | 2,290 |
Due from suppliers of services | 5,535 | |
Total accounts receivable, net of allowance | $ 688,197 | $ 386,462 |
Note 4 - Schedule of Inventory
Note 4 - Schedule of Inventory (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Finished goods | $ 243,294 | $ 344,764 |
Raw materials | 629,399 | 644,146 |
Inventory deposit | 25,053 | |
Total inventory | $ 897,746 | $ 988,910 |
Note 5 - Property and Equipme27
Note 5 - Property and Equipment and Intangible Assets (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Depreciation | $ 26,453 | $ 23,432 | $ 52,341 | $ 45,490 |
Amortization | $ 3,134 | $ 3,710 | $ 6,267 | $ 6,843 |
Note 5 - Schedule of Property a
Note 5 - Schedule of Property and Equipment (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Manufacturing, warehouse, display equipment and molds | $ 354,378 | $ 337,253 |
Office equipment and furniture | 41,581 | 41,581 |
Mobile display unit and vehicles | 134,500 | 134,500 |
Less: depreciation | (318,440) | (266,099) |
Total property and equipment | $ 212,019 | $ 247,235 |
Note 5 - Schedule of Intangible
Note 5 - Schedule of Intangible Assets (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Formulations, rights and patents | $ 969,696 | $ 969,696 |
Website | 62,675 | 62,675 |
Less: amortization | (58,950) | (52,682) |
Trademarks – not amortized due to indefinite life | 157,526 | 152,104 |
Total intangible assets | $ 1,130,947 | $ 1,131,793 |
Note 6 - Promissory Notes Pay30
Note 6 - Promissory Notes Payable (Details Textual) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Promissory Notes 1 and 2 [Member] | |
Debt Instrument, Face Amount | $ 109,386 |
Promissory Note 1 [Member] | |
Debt Instrument, Face Amount | $ 83,472 |
Debt Instrument, Interest Rate, Stated Percentage | 10.00% |
Promissory Note 2 [Member] | |
Debt Instrument, Face Amount | $ 25,914 |
Debt Instrument, Periodic Payment, Principal | $ 500 |
Note 7 - Loans Payable (Details
Note 7 - Loans Payable (Details Textual) - USD ($) | Nov. 06, 2016 | Dec. 22, 2015 | Nov. 06, 2015 | Dec. 22, 2015 | Jun. 30, 2016 | Mar. 22, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Unsecured, Short Term Loans [Member] | ||||||||
Short-term Debt | $ 145,000 | |||||||
Due to Related Parties, Current | $ 130,000 | |||||||
Interest Payable | $ 2,676 | |||||||
TCA Global Credit Master Fund Credit Facility [Member] | Accounts Payable and Accrued Liabilities [Member] | ||||||||
Line of Credit, Facility Fee | $ 150,000 | |||||||
TCA Global Credit Master Fund Credit Facility [Member] | TCA Global Credit Master Fund [Member] | ||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 3,000,000 | |||||||
TCA Global Credit Master Fund Credit Facility [Member] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 3,500,000 | |||||||
Proceeds from Lines of Credit | $ 250,000 | $ 650,000 | $ 900,000 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||
Line of Credit Facility, Commitment Fee Percentage | 6.00% | |||||||
Repayment Terms, Percentage of Gross Receipts | 20.00% | |||||||
Payments of Debt Issuance Costs | $ 281,230 | |||||||
Common Stock Value, Percent Weighted Average Value of Share Price | 85.00% | |||||||
Common Stock Owned by Lender, Maximum Threshold | 4.99% | |||||||
Amended Credit Facility [Member] | TCA Global Credit Master Fund [Member] | ||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 10,558,069 | |||||||
Amended Credit Facility [Member] | Advisory Services Fee [Member] | ||||||||
Debt Instrument, Fee Amount | $ 350,000 | |||||||
Amended Credit Facility [Member] | ||||||||
Proceeds from Lines of Credit | 763,360 | |||||||
Payments of Debt Issuance Costs | $ 86,640 | |||||||
Common Stock Owned by Lender, Maximum Threshold | 4.99% | |||||||
Line of Credit Facility, Additional Borrowings | $ 1,000,000 | |||||||
Proceeds from Lines of Credit, Gross | $ 850,000 | |||||||
Short-term Debt | 14,897 | $ 15,000 | ||||||
Due to Related Parties, Current | $ 129,000 | $ 130,000 |
Note 7 - Schedule of Loans Paya
Note 7 - Schedule of Loans Payable (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Short-term loan – (a) below | $ 14,897 | $ 15,000 |
Short-term loan – related party – (a) below | 129,000 | 130,000 |
Total short-term loans | 143,897 | 145,000 |
Senior Secured Revolving Note – (b) below | 1,550,080 | 844,040 |
Less: unamortized debt issuance costs | (243,977) | (233,269) |
Net carrying value | 1,306,103 | 610,771 |
Total loans payable | $ 1,450,000 | $ 755,771 |
Note 8 - Stock-based Compensa33
Note 8 - Stock-based Compensation (Details Textual) | Jun. 30, 2016USD ($) |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 0 |
Note 9 - Common Stock (Details
Note 9 - Common Stock (Details Textual) | Sep. 11, 2016shares | Jun. 08, 2016shares | May 11, 2016USD ($)$ / sharesshares | May 05, 2016shares | Apr. 12, 2016shares | Mar. 08, 2016USD ($)$ / sharesshares | Feb. 29, 2016shares | Jan. 31, 2016shares | May 27, 2015USD ($)$ / sharesshares | Mar. 27, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($) | Jun. 08, 2016USD ($) | Feb. 29, 2016USD ($) | Jun. 30, 2016USD ($)$ / sharesshares | Jul. 07, 2016shares | Apr. 21, 2016$ / shares | Dec. 31, 2015$ / sharesshares |
Subsequent Event [Member] | |||||||||||||||||
Common Stock, Shares Authorized | 500,000,000 | ||||||||||||||||
Employment Contract With An Officer/Director [Member] | |||||||||||||||||
Stock Issued During Period, Shares, New Issues | 238,889 | 238,889 | |||||||||||||||
Stock Issued During Period, Value, New Issues | $ | $ 40,611 | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | 210,548 | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Intrinsic Value | $ / shares | $ 0.08 | ||||||||||||||||
Value of Stock to be Canceled Due to Employment Contract | $ | $ 16,844 | ||||||||||||||||
Former Advisory Board Member [Member] | |||||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 50,000 | ||||||||||||||||
Stock Issued During Period, Value, Issued for Services | $ | $ 3,875 | ||||||||||||||||
Service Provider Pursuant to a Consultant Agreement [Member] | Scenario, Forecast [Member] | |||||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 250,000 | ||||||||||||||||
Service Provider Pursuant to a Consultant Agreement [Member] | |||||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 250,000 | ||||||||||||||||
Stock Issued During Period, Value, Issued for Services | $ | $ 29,792 | ||||||||||||||||
Stock Issued During Period, Average Fair Value Per Share, Issued for Services | $ / shares | $ 0.12 | ||||||||||||||||
Service Provider Pursuant to a Strategic Advisory and Services Agreement [Member] | |||||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 250,000 | ||||||||||||||||
Stock Issued During Period, Value, Issued for Services | $ | $ 37,500 | ||||||||||||||||
Stock Issued During Period, Average Fair Value Per Share, Issued for Services | $ / shares | $ 0.15 | ||||||||||||||||
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | |||||||||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.00001 | $ 0.00001 | |||||||||||||||
Stock Issued During Period, Shares, Settlement of Debt | 200,000 | 1,000,000 | |||||||||||||||
Extinguishment of Debt, Amount | $ | $ 30,000 | $ 120,000 | |||||||||||||||
Stock Issued During the Period, Settlement of Debt, Value Per Share | $ / shares | $ 0.10 | ||||||||||||||||
Units Issued During Period, Shares, New Issues | 750,000 | 10,050,000 | |||||||||||||||
Unit Price | $ / shares | $ 0.10 | $ 0.10 | |||||||||||||||
Units Issued During Period, Value, New Issues | $ | $ 1,005,000 | ||||||||||||||||
Proceeds from Issuance or Sale of Equity | $ | $ 45,000 | 860,000 | $ 100,000 | ||||||||||||||
Units Issued for Debt, Value | $ | $ 45,000 | ||||||||||||||||
Number of Common Stock to Units, Ratio | 1 | ||||||||||||||||
Number of Warrants to Units, Ratio | 0.5 | ||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 1 | ||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.20 | $ 0.52 |
Note 10 - Warrants (Details Tex
Note 10 - Warrants (Details Textual) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Mar. 27, 2015 | |
Warrants and Rights Outstanding | $ 4,664,997 | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.52 | $ 0.20 |
Class of Warrant or Right, Expiration Period | 211 days | |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights, Expired Unexercised | 16,415,083 |
Note 11 - Loss from Discontin36
Note 11 - Loss from Discontinued Operations (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | |
Disposal Group, Including Discontinued Operation, Revenue | $ 20,838 | $ 73,740 | |
Disposal Group, Including Discontinued Operation, Costs of Goods Sold | 15,400 | 59,627 | |
Disposal Group, Including Discontinued Operation, Gross Profit (Loss) | 5,438 | 14,113 | |
Disposal Group, Including Discontinued Operation, Operating Expense | 11,153 | 94,724 | |
Disposal Group, Including Discontinued Operation, Bad Debt Expense | 23,069 | 23,069 | |
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | $ (28,784) | $ (103,680) |