Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 14, 2013 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'Pulse Beverage Corp | ' |
Entity Central Index Key | '0001420569 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
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 | ' | 51,618,924 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
Balance_Sheets_Unaudited
Balance Sheets (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current Assets | ' | ' |
Cash | $2,415,110 | $744,906 |
Accounts receivable | 804,114 | 202,755 |
Inventories | 1,220,832 | 715,517 |
Other current assets | 217,344 | 101,842 |
Total Current Assets | 4,657,400 | 1,765,020 |
Property and equipment, net of accumulated depreciation of $66,343 and $24,663, respectively | 470,049 | 482,874 |
Other Assets | ' | ' |
Loan receivable, net of current portion - related party | 184,081 | 188,030 |
Intangible assets, net of accumulated amortization of $47,652 and $23,631, respectively | 1,136,649 | 1,104,948 |
Total Other Assets | 1,320,730 | 1,292,978 |
Total Assets | 6,448,179 | 3,540,872 |
Current Liabilities | ' | ' |
Accounts payable and accrued expenses | 546,782 | 347,579 |
Total Current Liabilities | 546,782 | 347,579 |
Preferred Stock, 1,000,000 shares authorized, $0.001 par value, none issued | ' | ' |
Common Stock, 100,000,000 shares authorized, $0.00001 par value, 51,618,924 and 40,701,402 issued and outstanding, respectively | 516 | 407 |
Additional Paid In Capital | 12,641,441 | 7,817,539 |
Deficit | -6,740,560 | -4,624,653 |
Total Liabilities and Stockholders' Equity | 5,901,397 | 3,193,293 |
Total Liabilities and Stockholders' Equity | $6,448,179 | $3,540,872 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Statement of Financial Position [Abstract] | ' | ' |
Preferred Stock, par value | $0.00 | $0.00 |
Preferred Stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Common Stock, par value | $0.00 | $0.00 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 51,618,924 | 40,701,402 |
Common Stock, shares outstanding | 51,618,924 | 40,701,402 |
Accumulated Depreciation | $66,343 | $24,663 |
Accumulated Amortization | $47,652 | $23,631 |
Statements_of_Operations_Unaud
Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Income Statement [Abstract] | ' | ' | ' | ' |
Sales, gross | $1,102,025 | $846,391 | $3,379,814 | $2,178,615 |
Less: promotions and slotting | -93,315 | -44,444 | -251,924 | -120,194 |
Net Sales | 1,008,710 | 801,947 | 3,127,891 | 2,058,421 |
Cost of Sales | 662,944 | 513,256 | 2,026,118 | 1,339,086 |
Gross Profit | 345,766 | 288,691 | 1,101,773 | 719,335 |
Expenses | ' | ' | ' | ' |
Advertising, samples and displays | 111,703 | 37,096 | 242,555 | 77,586 |
Freight-out | 114,897 | 86,762 | 345,704 | 215,949 |
General and administration | 311,010 | 223,015 | 902,877 | 606,768 |
Salaries and benefits and broker/agent's fees | 373,455 | 248,451 | 1,042,608 | 610,892 |
Stock-based compensation | 80,791 | 345,305 | 394,845 | 1,002,384 |
Shareholder, broker and investor relations | 93,498 | 113,754 | 301,470 | 377,832 |
Total Operating Expenses | 1,085,354 | 1,054,383 | 3,230,059 | 2,891,411 |
Net Operating Loss | -739,588 | -765,692 | -2,128,286 | -2,172,076 |
Other Income (Expense) | ' | ' | ' | ' |
Loss on foreign exchange | ' | -334 | ' | -2,019 |
Asset impairment | ' | ' | -7,385 | ' |
Forgiveness of debt | ' | ' | 6,486 | 10,971 |
Interest income, net | 3,214 | -1,037 | 13,277 | 3,079 |
Total Other Income (Expense) | 3,214 | -1,371 | 12,378 | 12,031 |
Net Loss | ($736,374) | ($767,063) | ($2,115,908) | ($2,160,045) |
Net Loss Per Share - Basic and Diluted | ($0.01) | ($0.02) | ($0.04) | ($0.06) |
Weighted Average Shares Outstanding - Basic and Diluted | 51,492,000 | 35,405,000 | 49,308,000 | 34,268,000 |
Statements_of_Cash_Flows_Unaud
Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Operating Activities | ' | ' |
Net loss | ($2,115,908) | ($2,160,045) |
Less non-cash items: | ' | ' |
Amortization and depreciation | 65,701 | 26,863 |
Asset impairment | 7,385 | ' |
Shares and options issued for services | 666,628 | 1,103,101 |
Forgiveness of debt | ' | -10,971 |
Changes in operating assets and liabilities: | ' | ' |
(Increase) in accounts receivable | -601,359 | -384,545 |
Decrease (increase) in prepaid expenses | -57,346 | -27,504 |
(Increase) Decrease in inventories | -487,866 | -383,828 |
Increase in accounts payable and accrued expenses | 222,537 | 557,123 |
Net Cash Used in Operating Activities | -2,300,228 | -1,279,806 |
Repayment of note receivable - related party | 3,794 | 3,645 |
Acquisition of property and equipment | -36,240 | -133,031 |
Acquisition of intangible assets | -55,722 | -26,087 |
Net Cash Used in Investing Activities | -88,168 | -155,473 |
Financing Activities | ' | ' |
Proceeds from short-term loans | ' | 250,000 |
Proceeds from the sale of common stock, net of costs | 4,058,600 | 1,333,300 |
Net Cash Provided by Financing Activities | 4,058,600 | 1,583,300 |
Increase in Cash | 1,670,204 | 148,021 |
Cash - Beginning of Period | 744,906 | 87,918 |
Cash - End of Period | 2,415,110 | 235,939 |
Shares and options issued for services, debt and prepaid expenses | 461,483 | 411,079 |
Supplemental Disclosures: | ' | ' |
Interest paid | ' | ' |
Income taxes paid | ' | ' |
Nature_of_Operations
Nature of Operations | 9 Months Ended | ||
Sep. 30, 2013 | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||
Nature of Operations | ' | ||
1 | Nature of Operations | ||
We manufacture and distribute Natural Cabana® Lemonade and PULSE® brand of functional beverages. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | ||
Sep. 30, 2013 | |||
Accounting Policies [Abstract] | ' | ||
Summary of Significant Accounting Policies | ' | ||
2 | Summary of Significant Accounting Policies | ||
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 about 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. | |||
Property and Equipment | |||
Property and equipment includes bottle molds, manufacturing equipment, office equipment, warehouse equipment and display coolers which are all stated at historical cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets which range from three to five years. | |||
Long-Lived Assets | |||
We account for long-lived assets in accordance with ASC Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” ASC Topic 360-10-05 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. We assess recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. As of September 30 2013 and September 30 2012, we recognized an impairment of $7,385 and $nil, respectively. | |||
Intangible Assets | |||
Intangible assets are comprised primarily of the cost of formulations of our products and of trademarks that represent our exclusive ownership of Natural Cabana®, PULSE® and PULSE: Nutrition Made Simple®, all used in connection with the manufacture, sale and distribution of our beverages. We evaluate our trademarks annually for impairment or earlier if there is an indication of impairment. If there is an indication of impairment of identified intangible assets not subject to amortization, we compare the estimated fair value with the carrying amount of the asset. An impairment loss is recognized to write-down the intangible asset to its fair value if it is less than the carrying amount. The fair value is calculated using the income approach. However, preparation of estimated expected future cash flows is inherently subjective and is based on our best estimate of assumptions concerning expected future conditions. Based on our impairment analysis performed for Q3-2013, the estimated fair values of trademarks and other intangible assets exceeded their respective carrying values. | |||
Revenue Recognition | |||
Revenue is recognized in accordance with Staff Accounting Bulletin (“SAB”) No. 101, Revenue Recognition in Financial Statements, as revised by SAB No. 104. We recognize revenue 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. |
Loan_Receivable_Related_party
Loan Receivable - Related party | 9 Months Ended | ||
Sep. 30, 2013 | |||
Receivables [Abstract] | ' | ||
Loan Receivable - Related party | ' | ||
3 | Loan Receivable – Related party | ||
Pursuant to a Letter Agreement dated December 24, 2010 between us and Catalyst Development Inc., (“Catalyst”) a company owned by our Chief of Product Development, we loaned $200,000 to Catalyst. The loan bears interest at a rate of 4% per annum, is amortized over 25 years and matures on May 16, 2016 with a balloon payment due in the amount of $174,000. Catalyst repays this loan on a monthly basis at $1,055 principal and interest. As of September 30 2013, the remaining principal balance due is $189,320 of which $5,239 is current and included in Other Current Assets. |
Common_Stock
Common Stock | 9 Months Ended | ||
Sep. 30, 2013 | |||
Supplemental Cash Flow Elements [Abstract] | ' | ||
Common Stock | ' | ||
4 | Common Stock | ||
During the nine months ended September 30 2013: | |||
a) | received $4,102,700 pursuant to our $0.40 Unit offering. Pursuant to subscription agreements received and accepted, we issued a total of 10,256,750 $0.40 Units. We also issued 300,000 $0.40 Units pursuant to $120,000 received as at December 31, 2012. Each $0.40 Unit consisted of one common share and one common share purchase warrant to acquire one additional share at $0.65 expiring three years from date of purchase; | ||
b) | issued 125,000 Units at $0.80 per Unit for $100,000. Each Unit consisted of one common share and one common share purchase warrant to acquire one additional share at $1.00 expiring three years from date of purchase; | ||
c) | settled $23,333 of debt owing to two Advisory Board Members and a director by issuing 58,333 $0.40 Units; | ||
d) | issued 302,439 common shares, having an aggregate average fair value of $0.84 per share, pursuant to service agreements; | ||
e) | issued 30,000 common shares, having a fair value of $0.63 per share, pursuant to a letter agreement, as compensation for services to be rendered from January 1, 2013 to June 30, 2013; | ||
f) | issued 20,000 common shares having a fair value of $21,500 as compensation pursuant to an Advisory Board Agreement; | ||
g) | issued 275,000 common share purchase warrants to acquire one additional common share at $0.65 expiring February 22, 2016; | ||
h) | issued 100,000 common shares, having a fair value of $1.42 per share, as compensation for introduction to an investor; | ||
i) | issued 25,000 common shares at $0.50 per share for cash pursuant to a consultant exercising a stock option. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2013 | |
Other Liabilities Disclosure [Abstract] | ' |
Warrants | ' |
5. Warrants | |
As at September 30 2013 we had 20,169,247 common share purchase warrants outstanding having an average exercise price of $0.62 per common share and having an average expiration date of 32 months. |
Stockbased_Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Stock-based Compensation | ' |
6. Stock-based Compensation | |
On April 27, 2012 we granted performance equity compensation awards to certain officers, directors and consultants (the “Performance Equity Recipients”). We were to issue 480,000 common shares to Performance Equity Recipients for each 200,000 cases of any of our products sold to a maximum of 2,400,000 common shares issuable. As at September 28, 2012 we had sold 200,000 cases of product and thus, our Performance Equity Recipients earned, and were issued on December 21, 2012, 480,000 common shares having a fair value of $249,600. On June 30, 2013 we postponed further issuances for a period of one full year. As of March 31, 2013 a total of $404,736 of compensation was accrued which was reversed during the quarter ended June 30, 2013. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
7. Subsequent Events | |
The Company has evaluated all subsequent events through the date these financial statements were issued and determined that there are no subsequent events to record and no subsequent events to disclose. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Use of Estimates | ' |
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 about 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. | |
Property and Equipment | ' |
Property and Equipment | |
Property and equipment includes bottle molds, manufacturing equipment, office equipment, warehouse equipment and display coolers which are all stated at historical cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets which range from three to five years. | |
Long-Lived Assets | ' |
Long-Lived Assets | |
We account for long-lived assets in accordance with ASC Topic 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” ASC Topic 360-10-05 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. We assess recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value. As of September 30 2013 and September 30 2012, we recognized an impairment of $7,385 and $nil, respectively. | |
Intangible Assets | ' |
Intangible Assets | |
Intangible assets are comprised primarily of the cost of formulations of our products and of trademarks that represent our exclusive ownership of Natural Cabana®, PULSE® and PULSE: Nutrition Made Simple®, all used in connection with the manufacture, sale and distribution of our beverages. We evaluate our trademarks annually for impairment or earlier if there is an indication of impairment. If there is an indication of impairment of identified intangible assets not subject to amortization, we compare the estimated fair value with the carrying amount of the asset. An impairment loss is recognized to write-down the intangible asset to its fair value if it is less than the carrying amount. The fair value is calculated using the income approach. However, preparation of estimated expected future cash flows is inherently subjective and is based on our best estimate of assumptions concerning expected future conditions. Based on our impairment analysis performed for Q3-2013, the estimated fair values of trademarks and other intangible assets exceeded their respective carrying values. | |
Revenue Recognition | ' |
Revenue Recognition | |
Revenue is recognized in accordance with Staff Accounting Bulletin (“SAB”) No. 101, Revenue Recognition in Financial Statements, as revised by SAB No. 104. We recognize revenue 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. |
Loan_Receivable_Related_party_
Loan Receivable - Related party (Details Narrative) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Receivables [Abstract] | ' |
Loan Receivable - Related party | $200,000 |
Interest Per Year | 4.00% |
Term | '25 years |
Due Date | 16-May-16 |
Ballon Payment on Due Date | 174,000 |
Monthly Payment with Interest | 1,055 |
Remaining Principal Balance | 189,320 |
Remaining Principal Balance, current | $5,239 |
Common_Stock_Details_Narrative
Common Stock (Details Narrative) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Supplemental Cash Flow Elements [Abstract] | ' |
Additonal Paid In Capital Common Stock | $4,102,700 |
Share Price | $0.40 |
Shares Issued | 10,256,750 |
Shares Issued | 300,000 |
Share Price | $0.40 |
Paid In Capital | 120,000 |
Warrant Options Description | 'Each $0.40 Unit consisted of one common share and one common share purchase warrant to acquire one additional share at $0.65 expiring three years from date of purchase; |
Shares Issued | 125,000 |
Share Price | $0.80 |
Paid In Capital | 100,000 |
Warrant Options Description | 'Each Unit consisted of one common share and one common share purchase warrant to acquire one additional share at $1.00 expiring three years from date of purchase; |
Debt Settled with Share Issuance | 23,333 |
Shares Issued | 58,333 |
Share Price | $0.40 |
Shares Issued | 152,439 |
Share Price Fair Value | $0.81 |
Shares for Services Description | 'pursuant to a professional services agreement, as compensation for services rendered and to be rendered for the period from January 25, 2013 to July 25, 2013; |
Shares Issued | 30,000 |
Share Price Fair Value | $0.63 |
Shares for Services Description | 'pursuant to a letter agreement, as compensation for services to be rendered from January 1, 2013 to June 30, 2013; |
Shares Issued | 10,000 |
Share Value | $13,000 |
Shares Issuance Explanation | 'as compensation pursuant to an Advisory Board Agreement; |
Warrants Issued | 275,000 |
Warrant Price Per Share | $0.65 |
Warrant Expiration | 22-Feb-16 |
Shares Issued | 100,000 |
Share Price Fair Value | $1.42 |
Shares for Services Description | 'compensation for introduction to an investor |
Shares Issued | 25,000 |
Share Price | $0.50 |
Shares for Services Description | 'for cash pursuant to a consultant exercising a stock option |
Warrants_Details_Narrative
Warrants (Details Narrative) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Other Liabilities Disclosure [Abstract] | ' |
Common Share Purchase Warrants Outstanding | 20,169,247 |
Average Exercise Price | $0.62 |
Average Expiration Date | '32 months |
Stockbased_Compensation_Detail
Stock-based Compensation (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ' |
Performance Equity Compensation Awards Description | ' | 'On April 27, 2012 we granted performance equity compensation awards to certain officers, directors and consultants (the BPerformance Equity RecipientsB). We are to issue 600,000 shares to Performance Equity Recipients on the basis of 480,000 common shares for each 200,000 cases of any of our products sold to a maximum of 2,400,000 common shares issuable. On June 30, 2013 we postponed further issuances for a period of one full year. As of March 31, 2013 a total of $404,736 of compensation was accrued which was reversed during the quarter ended June 30, 2013. | ' |
Shares Issued | ' | ' | 480,000 |
Share Value Fair Value | $404,736 | ' | $249,600 |