Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 20, 2020 | |
Details | ||
Registrant CIK | 0001429393 | |
Fiscal Year End | --12-31 | |
Registrant Name | Trutankless, Inc. | |
SEC Form | 10-Q | |
Period End date | Mar. 31, 2020 | |
Tax Identification Number (TIN) | 26-2137574 | |
Number of common stock shares outstanding | 54,113,966 | |
Filer Category | Non-accelerated Filer | |
Current with reporting | Yes | |
Interactive Data Current | Yes | |
Shell Company | false | |
Small Business | true | |
Emerging Growth Company | false | |
Entity File Number | 000-54219 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 15720 N. Greenway Hayden Loop, Suite 2 | |
Entity Address, City or Town | Scottsdale | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85260 | |
City Area Code | 480 | |
Local Phone Number | 275-7572 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Document Quarterly Report | true | |
Document Transition Report | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash | $ 46,505 | $ 4,342 |
Accounts receivable, net | 310,942 | 270,381 |
Inventory | 36,686 | 106,958 |
Prepaid consulting expenses, current | 647,858 | 373,072 |
Total current assets | 1,041,991 | 754,753 |
Other Assets | ||
Prepaid consulting expenses, long term | 762,880 | 108,260 |
Right of use asset | 46,173 | 50,234 |
Other assets | 13,852 | 13,994 |
Total other assets | 822,905 | 172,488 |
Total assets | 1,864,896 | 927,241 |
Current liabilities | ||
Accounts payable and accrued liabilities | 991,823 | 1,189,370 |
Lease liability | 11,205 | 14,723 |
Accrued interest payable - related party | 160,697 | 18,668 |
Derivative liability, current | 1,327,828 | 613,716 |
Notes payable - related party | 69,150 | 69,150 |
Notes payable, net of debt discount | 0 | 411,807 |
Convertible notes payable, net of debt discount | 913,692 | 1,583,066 |
Total current liabilities | 3,474,395 | 3,900,500 |
Lease liability, long-term | 37,189 | 37,189 |
Convertible notes payable, long term, net of debt discount | 55,083 | 17,242 |
Notes payable, long-term, net of debt discount | 569,621 | 0 |
Related party - related party, long-term | 500,000 | 0 |
Total long-term liabilities | 1,161,893 | 54,431 |
Total liabilities | 4,636,288 | 3,954,931 |
Stockholders' deficit | ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized,0 and 76,000 shares issued and outstanding as ofMarch 31, 2020 and December 31, 2019, respectively | 0 | 76 |
Common stock, $0.001 par value, 100,000,000 shares authorized,54,287,962 and 45,427,303 shares issued and outstanding as ofMarch 31, 2020 and December 31, 2019, respectively | 54,288 | 45,427 |
Additional paid in capital | 32,489,101 | 28,928,084 |
Stock payable | 613,350 | 424,705 |
Accumulated deficit | (35,928,131) | (32,425,982) |
Total stockholders' deficit | (2,771,392) | (3,027,690) |
Total liabilities and stockholders' deficit | $ 1,864,896 | $ 927,241 |
CONSOLIDATED BALANCE SHEETS - P
CONSOLIDATED BALANCE SHEETS - Parenthetical - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Details | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Outstanding | 0 | 76,000 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 54,287,962 | 45,427,303 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Details | ||
Revenue | $ 539,561 | $ 638,275 |
Cost of goods sold | 246,532 | 468,363 |
Gross profit | 293,029 | 169,912 |
Operating expenses | ||
General and administrative | 378,732 | 396,224 |
Research and development | 64,078 | 50,733 |
Professional fees | 330,950 | 673,566 |
Total operating expenses | 773,760 | 1,120,523 |
Loss from operations | (480,731) | (950,611) |
Other expenses | ||
Interest expense | (554,820) | (184,218) |
Loss on change of derivative liability | (501,314) | 0 |
Gain (loss) on extinguishment of notes | (1,965,284) | 0 |
Total expenses | (3,021,418) | (184,218) |
Net loss before tax provision | (3,502,149) | (1,134,829) |
Tax provision | 0 | 0 |
Net income (loss) | $ (3,502,149) | $ (1,134,829) |
Net loss per common share- basic and diluted | $ (0.07) | $ (0.03) |
Weighted average number of common shares outstanding- basic and diluted | 51,072,014 | 35,266,502 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Subscriptions Payable | Retained Earnings | Total |
Equity Balance at Dec. 31, 2018 | $ 76 | $ 34,740 | $ 25,364,090 | $ 178,000 | $ (27,532,752) | $ (1,955,846) |
Equity Balance, Shares at Dec. 31, 2018 | 76,000 | 34,739,902 | ||||
Stock Issued During Period, Value, New Issues | $ 0 | $ 134 | 66,866 | 627,500 | 0 | 694,500 |
Stock Issued During Period, Shares, New Issues | 134,000 | |||||
Stock Issued During Period, Value, Issued for Services | 0 | $ 900 | 449,100 | 0 | 450,000 | |
Stock Issued During Period, Shares, Issued for Services | 900,000 | |||||
Stock and warrants issued for debt, value | 0 | $ 150 | 74,850 | 95,000 | 0 | 170,000 |
Stock issued for debt, shares | 150,000 | |||||
Net income (loss) | $ 0 | $ 0 | 0 | 0 | (1,134,829) | (1,134,829) |
Equity Balance, Shares at Mar. 31, 2019 | 76,000 | 35,923,902 | ||||
Equity Balance at Mar. 31, 2019 | $ 76 | $ 35,924 | 25,954,906 | 900,500 | (28,667,581) | (1,776,175) |
Equity Balance at Dec. 31, 2019 | $ 76 | $ 45,427 | 28,928,084 | 424,705 | (32,425,982) | (3,027,690) |
Equity Balance, Shares at Dec. 31, 2019 | 76,000 | 45,427,303 | ||||
Stock Issued During Period, Value, New Issues | $ 0 | $ 200 | 49,800 | 125,000 | 0 | 175,000 |
Stock Issued During Period, Shares, New Issues | 200,000 | |||||
Stock Issued During Period, Value, Issued for Services | 0 | $ 4,015 | 1,232,375 | 63,610 | 0 | 1,300,000 |
Stock Issued During Period, Shares, Issued for Services | 4,015,000 | |||||
Stock and warrants issued for debt, value | 0 | $ 4,941 | 2,403,506 | 0 | 0 | 2,408,447 |
Stock issued for debt, shares | 4,940,659 | |||||
Rescission and retirement of shares | 0 | $ (500) | (124,500) | 0 | 0 | (125,000) |
Rescission and retirement of shares, shares | 500,000 | |||||
Conversion of preferred stock to common stock | $ (76) | $ 205 | (164) | 35 | 0 | 0 |
Conversion of preferred stock to common stock, shares | (76,000) | 205,000 | ||||
Net income (loss) | $ 0 | $ 0 | 0 | 0 | (3,502,149) | (3,502,149) |
Equity Balance, Shares at Mar. 31, 2020 | 0 | 54,287,962 | ||||
Equity Balance at Mar. 31, 2020 | $ 0 | $ 54,288 | $ 32,489,101 | $ 613,350 | $ (35,928,131) | $ (2,771,392) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows from Operating Activities | ||
Net income (loss) | $ (3,502,149) | $ (1,134,829) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Shares issued for services | 1,300,000 | 450,000 |
Gain (loss) on change of derivative liability | 501,314 | 4,609 |
Rescission and retirement of shares for services | (97,380) | 0 |
Gain (loss) on extinguishment of notes | 1,965,284 | 0 |
Depreciation and amortization | 142 | 0 |
Non-cash operating lease expense | 4,061 | 0 |
Amortization of debt discount | 469,009 | 122,723 |
Changes in assets and liabilities | ||
Accounts receivable | (40,561) | (117,324) |
Inventory | 70,272 | 2,955 |
Prepaid expenses | (957,026) | 25,525 |
Customer deposit | 0 | (600) |
Accounts payable | (197,547) | (68,071) |
Lease liability | (3,518) | (2,068) |
Interest payable - related party | 142,029 | (7,420) |
Net cash used in operating activities | (346,070) | (724,500) |
Cash Flows from Investing Activities: | ||
Net cash used in investing activities | 0 | 0 |
Cash Flows from Financing Activities: | ||
Payments for advances | 0 | (2,823) |
Proceeds from convertible notes payable | 12,000 | 112,500 |
Repayments of convertible notes payable | (12,000) | (1,200) |
Proceeds from notes payable | 231,783 | 137,000 |
Repayments of notes payable | (18,550) | 0 |
Repayments of notes payable - related party | 0 | (30,000) |
Proceeds from sale of common stock, net of offering costs | 175,000 | 694,500 |
Net cash provided by financing activities | 388,233 | 909,977 |
Net increase in cash | 42,163 | 185,477 |
Cash, beginning of period | 4,342 | 9,668 |
Cash, end of period | 46,505 | 195,145 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 198,270 | 11,250 |
Cash paid for taxes | 0 | 0 |
SUPPLEMENTARY DISCLOSURE OF NON-CASHINVESTING AND FINANCING ACTIVITIES: | ||
Recognition of right of use asset and liability | 0 | 64,978 |
Reclassification of notes payable to convertible notes payable | 0 | 100,000 |
Settlement of notes payable and accrued interest for stock payable | $ 400,000 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Notes | |
Summary of Significant Accounting Policies | NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization The Company was incorporated on March 7, 2008 under the laws of the State of Nevada, as Alcantara Brands Corporation. On October 5, 2010, the Company amended its articles of incorporation and changed its name to Bollente Companies, Inc. On June 4, 2018, the Company amended its articles of incorporation and changed its name to Trutankless, Inc. The Company is involved in sales, marketing, research and development of a high quality, whole-house, smart electric tankless water heater that is more energy efficient than conventional products. Management anticipates the Company's trutankless water heater, with Wi-Fi capability and Trutankless' proprietary apps offered in the iOS and Android store, will augment existing products in the home automation space. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in the consolidated financial statements for the three months ended March 31, 2020 should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Form 10-K for the Company’s fiscal year ended December 31, 2019, as filed with the SEC. The consolidated balance sheet as of December 31, 2019, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP. The accompanying unaudited consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the year ending December 31, 2020. The consolidated financial statements include the accounts of Trutankless, Inc. and its wholly owned subsidiaries. On May 16, 2010, the Company acquired 100% of the outstanding stock of Bollente, Inc and Bollente International, Inc. All significant inter-company transactions and balances have been eliminated. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates. Cash For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value. Stock-based compensation The Company follows ASC 718-10, "Stock Compensation", which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 is a revision to SFAS No. 123, "Accounting for Stock-Based Compensation," and supersedes Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and its related implementation guidance. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized. Earnings per share The Company follows ASC Topic 260 to account for the earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. Inventory Inventories are stated at the lower of cost (average cost) or market (net realizable value). Revenue recognition We recognize revenue in accordance with generally accepted accounting principles as outlined in the Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts with Customers, which requires that five basic criteria be met before revenue can be recognized: (i) identify the contract with the customer; (ii) identity the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity satisfied a performance obligation. Revenue recognition occurs at the time product is shipped to customers, when control transfers to customers, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance. We only record revenue when collectability is probable. Fair value of financial instruments The Company measures fair value in accordance with ASC 820 - Fair Value Measurements. ASC 820 defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurements. ASC 820 establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are: Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 - Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3 - Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Valuation of instruments includes unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. As defined by ASC 820, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date. The reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the Company’s financial instruments that could have been realized as of March 31, 2020 or that will be recognized in the future, and do not include expenses that could be incurred in an actual settlement. The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, receivables from related parties, prepaid expenses and other, accounts payable, accrued liabilities, and related party and third-party notes payables approximate fair value due to their relatively short maturities. The Company’s notes payable to related parties approximates the fair value of such instrument based upon management’s best estimate of terms that would be available to the Company for similar financial arrangements at March 31, 2020 and December 31, 2019. Financial assets and liabilities measured at fair value on a recurring basis are summarized below as of March 31, 2020 and December 31, 2019: March 31, 2020 Level 1 Level 2 Level 3 Total Liabilities Derivative Financial Instruments $ - $ - $ 1,327,828 $ 1,327,828 December 31, 2019 Liabilities Derivative Financial Instruments $ - $ - $ 613,716 $ 613,716 As of March 31, 2020, the Company’s stock price was $0.19, risk-free discount rate of 0.15% and volatility of 263.5%. As of December 31, 2019, the Company’s stock price was $0.35, risk-free discount rate of 1.60% and volatility of 182%. The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs: Amount Balance December 31, 2019 $ 613,716 Debt discount originated from derivative liabilities 124,037 Financing cost recorded 88,761 Change in fair market value of derivative liabilities (501,314) Balance March 31, 2020 $ 1,327,828 |
Going Concern Disclosure
Going Concern Disclosure | 3 Months Ended |
Mar. 31, 2020 | |
Notes | |
Going Concern Disclosure | NOTE 2 - GOING CONCERN The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Management evaluated all relevant conditions and events that are reasonably known or reasonably knowable, in the aggregate, as of the date the consolidated financial statements are issued and determined that substantial doubt exists about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on the Company’s ability to generate revenues and raise capital. The Company has not generated sufficient revenues from product sales to provide sufficient cash flows to enable the Company to finance its operations internally. As of March 31, 2020, the Company had $46,505 cash on hand. At March 31, 2020 the Company has an accumulated deficit of $35,928,131. For the quarter ended March 31, 2020, the Company had a net loss of $(3,502,149), and cash used in operations of $(346,070). These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date of filing. Over the next twelve months management plans to raise additional capital and to invest its working capital resources in sales and marketing in order to increase the distribution and demand for its products. However, there is no guarantee the Company will generate sufficient revenues or raise capital to continue operations. If the Company fails to generate sufficient revenue and obtain additional capital to continue at its expected level of operations, the Company may be forced to scale back or discontinue its sales and marketing efforts. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. COVID-19 Pandemic In December 2019, an outbreak of a novel strain of coronavirus originated in Wuhan, China (“COVID-19”) and has since spread worldwide, including to the Unites States, posing public health risks that have reached pandemic proportions (the “COVID-19 Pandemic”). The COVID-19 Pandemic poses a threat to the health and economic wellbeing of our employees, customers and vendors. Like most businesses world-wide, the COVID-19 Pandemic has impacted the Company financially; however, management cannot presently predict the scope and severity with which COVID-19 will impact our business, financial condition, results of operations and cash flows. |
Inventory Disclosure
Inventory Disclosure | 3 Months Ended |
Mar. 31, 2020 | |
Notes | |
Inventory Disclosure | NOTE 3 - INVENTORY Inventories consist of the following at: March 31, 2020 December 31, 2019 Finished goods 36,686 106,958 Total $ 36,686 $ 106,958 |
Accounts Receivable, Net, Discl
Accounts Receivable, Net, Disclosure | 3 Months Ended |
Mar. 31, 2020 | |
Notes | |
Accounts Receivable, Net, Disclosure | NOTE 4 - ACCOUNTS RECEIVABLE, NET Accounts receivable consist of the following at: March 31, 2020 December 31, 2019 Accounts receivable 417,783 377,222 Allowance for doubtful accounts 106,841 106,958 Total $ 310,942 $ 270,381 |
Prepaid Consulting Expenses, Di
Prepaid Consulting Expenses, Disclosure | 3 Months Ended |
Mar. 31, 2020 | |
Notes | |
Prepaid Consulting Expenses, Disclosure | NOTE 5 - PREPAID CONSULTING EXPENSES Prepaid consulting expense was $1,410,738 and $481,335 as of the March 31, 2020 and December 31, 2019, respectively. During the three months ended March 31, 2020, the Company issued 4,015,000 shares of stock for consulting agreements with a term ranging from 6 months to 4 years. The Company considered the market price of the common stock issued and fair value of the services rendered and determined that the market prices of the shares on the date issued of $1,236,390 was the more readily determinable values. The Company recorded amortization of the prepaid stock compensation amounting to $306,987 and $114,397 for the three months ended March 31, 2020 and 2019, respectively. |
Related Party Disclosure
Related Party Disclosure | 3 Months Ended |
Mar. 31, 2020 | |
Notes | |
Related Party Disclosure | NOTE 6 - RELATED PARTY As of March 31, 2020, and December 31, 2019, the Company had two notes payable due to an officer and director of the Company in the amount of $69,150 and $69,150, respectively. The notes have interest rate that range from 0%-8% and are due on demand. In January 2019, the Company executed a lease agreement with Templar Asset Group, LLC, a related party. The lease term is one year at a rate of $4,200 per month for a period of one year with an option to continue a month to month basis thereafter (See Note 8). On February 5, 2020, the Company agreed to settle a certain $900,000 convertible note payable issued to a shareholder dated August 2, 2016 and $312,006 in accrued interest. As part of the settlement the Company issued 1,000,000, 5 year warrants exercisable at $0.50 per share, valued at $781,775 (see Note 9), 4,000,000 shares of common stock, valued at $1,240,000, based on the stock price on the day of issuance, in settlement of $400,000 of the principal balance of the note, and issued a new $500,000 11% promissory note. The issuance of the shares and warrants under the agreement resulted in the noteholder becoming a more than 5% shareholder and a related party. The new note is due in two payments, $250,000 January 2, 2022 and $250,000 on January 2, 2023. Interest will accrue from the date of this Note on the unpaid and outstanding Principal balance to be paid as follows: (a) Fifty-Four Thousand Nine Hundred Ninety-Three and 37/100 Dollars ($54,993.37) on January 4, 2021; plus (b) three hundred thousand (300,000) shares of common Stock, by January 3, 2022, plus (c) six hundred thousand (600,000) shares of common stock on January 3, 2023. The Company evaluated the modification under ASC 470-50 and determined that the modifications were considered substantial and qualified for extinguishment accounting under such guidance. As such the Company recorded a loss on extinguishment of debt of $1,725,879 associated with the excess reacquisition cost of the new debt over the carrying value of the original debt. Interest expense associated with the related party notes for the three months ended March 31, 2020 and 2019 was $10,274 and $1,965, respectively. |
Notes Payable Disclosure
Notes Payable Disclosure | 3 Months Ended |
Mar. 31, 2020 | |
Notes | |
Notes Payable Disclosure | NOTE 7 - NOTES PAYABLE Notes payable consist of the following at: March 31, 2020 December 31, 2019 Note payable, secured, 12% interest, due July 2020 $ - $ 150,000 Note payable, secured, 12% interest, due July 2020 - 100,000 Note payable, secured, 12% interest, due January 2020 - 50,000 Note payable, secured, 12% interest, due July 2020 - 100,000 Note payable, secured, 12% interest, due June 1, 2021 260,000 - Note payable, secured, 12% interest, due June 1, 2021 300,000 - Note payable, secured, 12% interest, due October 2019 - 5,750 Note payable, secured, 12% interest, due March 2020 - 12,000 Note payable, secured, 12% interest, due March 4, 2021 12,000 - Total Notes Payable $ 572,000 $ 417,750 Less unamortized debt discounts (2,379) (5,943) Total Notes Payable 569,621 411,807 Less current portion - (411,807) Total Notes Payable - long term $ 569,621 $ - On September 2, 2016, the Company issued a $100,000 12% promissory note. The note was due on September 1, 2017. As an incentive to enter into the agreement the noteholder was also granted 25,000 shares valued at $25,000 which was recognized as a debt discount. On May 16, 2019, the maturity date of the note was extended to July 1, 2020 for the issuance of 50,000 shares of common stock valued at $21,000, which was recognized as a debt discount over the extended maturity date, which was recognized as a debt discount over the extended maturity date. As of March 31, 2020, $18,621 of the debt discount has been amortized and the note was shown net of unamortized discount of $2,379. On February 2, 2018, the Company entered into an agreement with the note holder to split a certain note payable dated July 1, 2015 into two notes in the amount of $150,000 and $50,000, respectively. In addition to splitting the notes the noteholder also agreed to extend the due date of the new $50,000 note to July 1, 2018 and on June 4, 2018, for consideration of 15,000 shares the noteholder further agreed to extend the due date of the new $50,000 note to April 1, 2019. On November 15, 2018, both notes were further extended to January 1, 2020 for the issuance of 80,000 shares valued $40,800. On May 16, 2019, the maturity dates of both notes were extended to July 1, 2020 for the issuance of 50,000 shares of common stock valued at $21,000. The Company recorded the fair market value of all the shares issued for extensions to financing cost. On January 1, 2020, the Company entered into an agreement to consolidate three notes payable dated September 2, 2016 and February 2, 2018 into one $300,000, 12% note due June 1, 2021. As consideration the Company issued the note holder 175,000 shares of common stock valued at $68,250 which was recorded as financing expense. The Company evaluated the modification under ASC 470-50 and determined that the modifications were considered substantial and qualified for extinguishment accounting under such guidance. As such the Company recorded a loss on extinguishment of debt of $68,250 associated with the excess reacquisition cost of the new debt over the carrying value of the original debt. During the year ended December 31, 2018, the Company issued $160,000 of principal amount of 12% secured convertible promissory notes and warrants to purchase common stock. The notes were due between May and August 2018 and bear interest of percent (12%). The notes are secured by all of the Company’s assets. The outstanding principal amounts and accrued but unpaid interest of the notes is convertible at any time at the option of the holder into common stock at a conversion price of $1.00 per share. The notes were issued with warrants to purchase up to 160,000 shares of the Company’s common stock which were valued at $119,616. On May 16, 2019, the maturity date of the note was extended to January 11, 2020 for the issuance of 90,000 shares of common stock valued at $45,900. As of March 31, 2020, $165,516 of the debt discount was amortized and the note was shown net of unamortized discount of $0. On January 30, 2019, the Company issued a $100,000 12% promissory note. The note was due on September 30, 2019. As an incentive to enter into the agreement the noteholder was also granted 100,000 shares valued at $45,000 which was recognized as a debt discount. On May 16, 2019, the maturity date of the note was extended to September 30, 2020 for the issuance of 55,000 shares of common stock valued at $23,100 The Company recorded the fair market value of all the shares issued for extensions to financing cost. On January 1, 2020, the Company entered into an agreement to consolidate two notes payable dated June 11, 2018 and January 30, 2019 into one $260,000, 12% note due June 1, 2021. As consideration the Company issued the note holder 175,000 shares of common stock valued at $68,250 which was recognized as a financing cost. The Company evaluated the modification under ASC 470-50 and determined that the modifications were considered substantial and qualified for extinguishment accounting under such guidance. As such the Company recorded a loss on extinguishment of debt of $68,250 associated with the excess reacquisition cost of the new debt over the carrying value of the original debt. On March 1, 2019, the Company issued a $12,000 12% promissory note. The note was due on March 1, 2020 and was paid in full during the three months ended March 31, 2020. On March 4, 2020, the Company issued a $12,000 10% promissory note. The note is due on March 4, 2021. On March 4, 2020, the Company issued a $12,000 promissory note. On April 17, 2020, the note and accrued interest in the amount of $12,140 was paid. Convertible notes payable, net of debt discount consist of the following: March 31, 2020 December 31, 2019 Convertible note payable, secured, 12% interest, due August 31, 2019, convertible at $1 per share 50,000 50,000 Convertible note payable, secured, 12% interest, due 120 days after delivery of payment notice from lender or November 1, 2019, convertible at $0.25 per share - 900,000 Convertible note payable, secured, 12% interest, due May 2, 2020, convertible at $1 per share 100,000 100,000 Convertible note payable, secured, 12% interest, due May 2, 2020, convertible at $1 per share 50,000 50,000 Convertible note payable, secured, 12% interest, due May 22, 2020, convertible at $1 per share 5,000 5,000 Convertible note payable , secured, 12% interest, due Feb 24, 2020, convertible at $1 per share 75,000 75,000 Convertible notes payable, secured, 4% interest, due October 14, 2020 75,000 75,000 Convertible note payable, secured, 12% interest, due January 11, 2020, convertible at $0.50 per share (See Note 12) - 160,000 Convertible note payable, secured, 10% interest, due February 8, 2020, convertible at $0.50 per share 50,000 50,000 Convertible note payable ,12% interest, due May 2020, conversion price is the lesser of (i) 70% multiplied by the lowest Trading Price during the previous twenty-five (25) trading day period ending on the latest complete Trading Day prior to the date of the note and 70% of the market price. 562,000 337,000 Convertible note payable ,12% interest, due May 2020, conversion price is the lesser of (i) 70% multiplied by the lowest Trading Price during the previous twenty-five (25) trading day period ending on the latest complete Trading Day prior to the date of the note and 70% of the market price. 168,500 168,500 Convertible note payable, secured, 10% interest, due February 8, 2020, convertible at $0.50 per share 50,000 50,000 Convertible note payable, secured, 12% interest 18,700 31,500 Convertible note payable, secured, 10% interest, due October 2021, convertible at $0.50 per share due October 17, 2021 29,000 23,000 Convertible note payable, secured, 10% interest, due October 18, 2021, convertible at $0.50 per share 26,083 - Less unamortized discounts (290,708) (474,692) Total notes payable, net $ 968,775 $ 1,596,410 Less current portion (913,692) (1,583,066) Convertible notes payable, net - Long-term $ 55,083 $ 17,242 On May 2, 2017, the Company issued $100,000 of principal amount of 12% secured convertible promissory notes and 20,000 warrants to purchase common stock. The note is due on May 2, 2020 and is secured by the Company’s accounts receivable and inventory. The outstanding principal amounts and accrued but unpaid interest of the notes is convertible at any time at the option of the holder into common stock at a conversion price of $0.50 per share. The notes were issued with warrants to purchase up to 10,000 shares of the Company’s common stock at an exercise price of $1.00 per share. As of March 31, 2020, the note was shown net of unamortized discount of $419. On May 2, 2017, the Company issued $50,000 of principal amount of 10% secured convertible promissory notes and 10,000 warrants to purchase common stock. The note is due on May 2, 2020 and is secured by the Company’s accounts receivable and inventory. The outstanding principal amounts and accrued but unpaid interest of the notes is convertible at any time at the option of the holder into common stock at a conversion price of $0.50 per share. The notes were issued with warrants to purchase up to 10,000 shares of the Company’s common stock at an exercise price of $1.00 per share. As of March 31, 2020, the note was shown net of unamortized discount of $209. On May 22, 2017, the Company issued $5,000 of principal amount of 10% secured convertible promissory notes and 1,000 warrants to purchase common stock at an exercise price of $1. The note is due on May 22, 2020 and is secured by the Company’s accounts receivable and inventory. The outstanding principal amounts and accrued but unpaid interest of the notes is convertible at any time at the option of the holder into common stock at a conversion price of $0.50 per share. The notes the were issued with warrants to purchase up to 1,000 shares of the Company’s common stock at an exercise price of $1.00 per share. As of March 31, 2020, the note was shown net of unamortized discount of $19. On February 15, 2018, the Company issued a $75,000 12% secured convertible promissory note. The note was due on February 24, 2020 and is secured by the Company’s accounts receivable and inventory and is currently past due. The outstanding principal amounts and accrued but unpaid interest of the notes is convertible at any time at the option of the holder into common stock at a conversion price of $0.50 per share. On September 17, 2018, the Company issued a $50,000 10% promissory note. The note is due on September 18, 2020. As an incentive to enter into the agreement the noteholder was also granted 10,000 shares valued at $5,000 , based on market value of the shares of $0.50 on the date of issuance. On February 9, 2019, the note was amended for the issuance of 50,000 shares of common stock valued at $30,000 based on market value of the shares of $0.60 on the date of issuance, which was recognized as a debt discount, the note holder agreed to a convert the note at a price of $0.50 per share. Additionally, the maturity date of the note was changed to February 8, 2020. As of March 31, 2020, the shares have not been issued and were included in stock payable. As of March 31, 2020, $30,000 of the debt discount has been amortized and the note was shown net of unamortized discount of $0. On June 2, 2016, the Company issued $50,000 of principal amount of 12% secured convertible promissory notes and 50,000 warrants to purchase common stock. The note was due on August 31, 2018 and later extended to August 31, 2019 and bear interest of twelve percent (12%) and is currently past due. The outstanding principal amounts and accrued but unpaid interest of the notes is convertible at any time at the option of the holder into common stock at a conversion price of $1.00 per share. The notes were issued with warrants to purchase up to 50,000 shares of the Company’s common stock at an exercise price of $1.50 per share. On December 14, 2018, the Company issued a $50,000 4% convertible note. The note was originally due on February 14, 2019 and is convertible at a rate of $0.50 per shares. As an incentive to enter into the agreement the noteholder was also granted 10,000 shares valued at $5,000, based on market value of the shares of $0.60 on the date of issuance, which was recognized as a debt discount. As of March 31, 2020, $5,000 of the debt discount was amortized. On February 14, 2019, the noteholder agreed to extend the note through October 14, 2020. On January 25, 2019, the Company issued a $100,000 8% convertible note. The note is due on March 1, 2019, is currently past due, and is convertible at a rate of $0.50 per shares. On April 29, 2020, the noteholder the note was amended to be due on demand but not before January 25, 2021. Additionally, the note holder is due two shares of common stock for every dollar funded. As of December 31, 2019, the noteholder advanced a total of $47,500 and is due 95,000 shares valued at $38,250, based on market value of the shares of $0.40 on the date of issuance, and the Company has made payments of $28,800. As of March 31, 2020, there was an outstanding balance on the note in the amount of $18,700. As of March 31, 2020, $38,250 of the debt discount was amortized and the note was shown net of unamortized discount of $0. On February 8, 2019, the Company issued a $50,000 10% convertible note. The note is due on February 8, 2020. As an incentive to enter into the agreement the noteholder was also granted 60,000 shares valued at $30,000 which was recognized as a debt discount. For the three months ended March 31, 2020, the Company recorded amortization of the debt discount of $4,204 and $4,192, respectively. As of March 31, 2020, $30,000 of the debt discount has been amortized and the note was shown net of unamortized discount of $0. On February 19, 2019, the Company issued a $25,000 4% convertible note. The note is due on August 19, 2019 and is convertible at a rate of $0.50 per share. On February 14, 2019, the noteholder agreed to extend the note through October 14, 2020. As an incentive to enter into the agreement the noteholder was also granted 5,000 shares valued at $2,500. As of March 31, 2020, the shares have not been issued and were included in stock payable. As of March 31, 2020, $2,500 of the debt discount was amortized and the note was shown net of unamortized discount of $0. On October 18, 2019, the Company issued a $23,000 10% convertible note. The note is due on October 17, 2021 and was convertible at a rate of $0.50 per share. As an incentive to enter into the agreement, the noteholder was also granted 46,000 shares valued at $15,175, based on market value of the shares of $0.33 on the date of issuance, which was recognized as a debt discount. During the three months ended March 31, 2020, the Company restructured the note to reduce the conversion price to $0.10 per share and the noteholder advanced another $6,000. As consideration the Company issued an additional 244,000 shares (and warrants) of common stock valued at $86,691. The Company evaluated the modification under ASC 470-50 and determined that the modifications were considered substantial and qualified for extinguishment accounting under such guidance. As such the Company recorded a loss on extinguishment of debt of $102,905 associated with the excess reacquisition cost of the new debt over the carrying value of the original debt. On November 5, 2019, the Company entered into a $562,000 convertible note payable, including an original issue discount of $56,200 pursuant to which we borrowed $337,000, including a $37,000 original issue discount in the first tranche during the year ended December 31, 2019. Interest under the convertible promissory note is 12% per annum, and the principal and all accrued but unpaid interest is due 180 days from funding. The note is convertible at the lesser of (i) 70% multiplied by the lowest Trading Price during the previous twenty-five (25) trading day period ending on the latest complete Trading Day prior to the date of the note and 70% of the market price. As an incentive to enter into the agreement the noteholder was also granted 854,000 shares valued at $307,440. The Company analyzed the conversion feature and determined it was required to be bifurcated and recognized as a derivative liability. The Company analyzed the conversion feature and determined it was required to be bifurcated and recognized as a derivative liability. The derivative at inception was valued at $392,061, based on the Black Scholes Merton pricing model. As the fair value of the derivative and the shares issued at inception were in excess of the face amount of the note, the Company recorded a debt discount in the amount of $337,000 to be amortized utilizing the effective interest method of accretion over the term of the note. On January 30, 2020, the Company borrowed an additional $225,000, including a $19,200 original issue discount. As an incentive the noteholder was also granted an additional 476,493 shares valued at $109,593, the Company analyzed the conversion feature and determined it was required to be bifurcated and recognized as a derivative liability. The derivative at inception was valued at $212,798, based on the Black Scholes Merton pricing model. As the fair value of the derivative and the shares issued at inception were in excess of the face amount of the note the Company recorded a debt discount in the amount of $225,000 to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the excess of $161,011 was recognized as a financing cost on the Statement of Operations. For the three months ended March 31, 2020, the Company recorded amortization of the debt discount of $235,681. As of March 31, 2020, $339,946 of the debt discount has been amortized and the note was shown net of unamortized discount of $222,054. On May 5, 2020, Company paid the principal and accrued interest under the first tranche of $357,852. (see Note 12) On November 19, 2019, we entered into a $281,000 convertible note payable, including an original issue discount of $28,100 convertible promissory note pursuant to which we borrowed of $150,000, including a $18,500 discount during the year ended December 31, 2019. Interest under the convertible promissory note is 12% per annum, and the principal and all accrued but unpaid interest is due 180 days from funding. The note is convertible at the lesser of (i) 70% multiplied by the lowest Trading Price during the previous twenty-five (25) trading day period ending on the latest complete Trading Day prior to the date of the note and 70% of the market price. As an incentive to enter into the agreement the noteholder was also granted 427,000 shares valued at $175,070, the Company analyzed the conversion feature and determined it was required to be bifurcated and recognized as a derivative liability. The derivative at inception was valued at $192,226, based on the Black Scholes Merton pricing model. As the fair value of the derivative and the shares issued at inception were in excess of the face amount of the note the Company recorded a debt discount in the amount of $168,500 to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the excess of $104,041 was recognized as a financing cost on the Statement of Operations. For the three months ended March 31, 2020, the Company recorded amortization of the debt discount of $84,715. As of March 31, 2020, $123,814 of the debt discount has been amortized and the note was shown net of unamortized discount of $44,686. On May 20, 2020, the noteholder agreed to extend the due date of the first tranche of funding until July 19, 2020. (see Note 12) The embedded conversion feature in the convertible debt instruments above were convertible at issuance which qualified them as a derivative instrument since the number of shares issuable under the note is indeterminate based on guidance in ASC 815-15, “Derivatives and Hedging (“Topic No. 815-15”). Topic No. 815-15 requires the Company to bifurcate and separately account for the conversion features as an embedded derivative contained in the Company’s convertible debt. The Black-Scholes model, adopted by management as an appropriate financial model, utilized the following inputs to value the derivative liabilities at the date of issuance of the convertible note through March 31, 2020: Risk free interest rate 0.15% - 1.57% Expected term (years) 0.132 - 0.50 Expected volatility 188% - 263.5 Expected dividends 0% On January 8, 2020, the Company issued a $26,083 convertible note. The note is due on January 8, 2022 and is convertible at a rate of $0.10 per shares. As an incentive to enter into the agreement the noteholder was also granted 260,830 shares and 2-year warrants exercisable $0.125.The issuance of the note and warrants resulted in a discount from the beneficial conversion feature totaling $26,083, including $13,203 attributable to the conversion feature and $10,566 attributable to the warrants, and $2,313 was attributable to the shares. The excess fair value of the consideration given of $16,171 was recorded as financing expense. During the three months ended March 31, 2020, $2,962 of the discount was amortized and the note was shown net of unamortized discount of $23,121. Interest expense including amortization of the associated debt discount on all of the above convertible notes for the three months ended March 31, 2020 and 2019 was $727,493 and $184,281, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Notes | |
Commitments and Contingencies | NOTE 8 - COMMITMENTS AND CONTINGENCIES Operating Lease Agreements The Company determines whether or not a contract contains a lease based on whether or not it provides the Company with the use of a specifically identified asset for a period of time, as well as both the right to direct the use of that asset and receive the significant economic benefits of the asset. The Company elected the transition relief package of practical expedients, and as a result, the Company did not assess 1) whether existing or expired contracts contain embedded leases, 2) lease classification for any existing or expired leases, and 3) whether lease origination costs qualified as initial direct costs. The Company elected the short-term lease practical expedient by establishing an accounting policy to exclude leases with a term of 12 months or less. The Company has entered into lease agreements as a lessee for the use of office space. These lease agreements are classified as operating leases and the liability and right-of-use asset are recognized on the balance sheet at lease commencement. Leases with an initial term of 12 months or less are not recorded on the balance sheet and are recognized as lease expense on a straight-line basis over the lease term. As a result of the adoption of ASC 842, the Company recognized an operating lease liability and right-of-use asset of $64,978. The discount rate utilized for classification and measurement purposes as of the inception date of the lease is based on the Company's collateralized incremental interest rate to borrow of 12%, as the rate implicit in the lease is not determinable. During 2018, the Company executed a lease agreement. The lease term is 39 months at a rate of $1,680 per month with 3% increases beginning January 1, 2021 and rent commencing on January 1, 2019. The Company was required to pay a $1,781 security deposit. In January 2019, the Company executed a lease agreement with Templar Asset Group, LLC, a related party. The lease term is one year at a rate of $4,200 per month for a period of one year with an option to continue a month to month basis thereafter. Under ASC 842, this lease is not recorded on the balance sheet as its term is 12 months or less. Undiscounted Cash Flows As of March 31, 2020, the right of use asset and lease liability were shown on the consolidated balance sheet at $46,173 and $48,394, respectively. The table below reconciles the fixed component of the undiscounted cash flows and the total remaining years to the operating lease liability recorded on the consolidated balance sheet as of March 31, 2020: Amounts due as of March 31, 2020 Operating Leases 2020 $ 15,120 2021 20,765 2022 21,370 Total minimum lease payments $ 57,255 Less: effect of discounting (8,861) Present value of future minimum lease payments $ 48,394 Less: current obligations under leases (11,205) Long-term lease obligations $ 37,189 |
Stock Warrants Disclosure
Stock Warrants Disclosure | 3 Months Ended |
Mar. 31, 2020 | |
Notes | |
Stock Warrants Disclosure | NOTE 9 - STOCK WARRANTS On January 8, 2020, the Company granted 208,664 warrants with terms of 3.3 years exercisable at $0.125 per share with the issuance of a convertible note payable, valued at $19,277. The warrants were valued using the Black-Scholes option pricing model. Assumptions used in the valuation include the following: a) market value of stock on measurement date of $0.38; b) risk-free rate of 1.61%; c) volatility factor of 166%; d) dividend yield of 0% On January 8, 2020, the Company granted 232,000 warrants 3.3 years warrants exercisable at $0.125 per share with the issuance of a convertible note payable, valued at $82,131. The warrants were valued using the Black-Scholes option pricing model. Assumptions used in the valuation include the following: a) market value of stock on measurement date of $0.38; b) risk-free rate of 1.61%; c) volatility factor of 166%; d) dividend yield of 0% On February 5, 2020, the Company granted 1,965,094 warrants with a term of 5 years exercisable at $0.50 per shares warrants, valued $566,269 as part of a note settlement agreement. Additionally, as part of the agreement the Company modified 1,666,666 previously issued to include the same terms of the warrants issued under the agreement. The Company valued the modification of warrants at $215,486, which the difference of the fair value of the warrants before and after the modification and recorded the value to loss on extinguishment of notes payable. The warrants were valued using the Black-Scholes option pricing model. Assumptions used in the valuation include the following: a) market value of stock on measurement date of $0.30-$0.31; b) risk-free rate of 1.48-1.49%; c) volatility factor of 175-177.6%; d) dividend yield of 0% On February 19, 2020, the Company converted the 76,000 outstanding Series A preferred shares, based on the automatic conversion terms into 205,000 common shares and 76,000 three year warrants exercisable at $1 per share The following is a summary of stock warrants activity during the periods ended March 31, 2020 and 2019. Number of Shares Weighted Average Exercise Price Balance, December 31, 2019 2,478,124 $1.00 Warrants granted and assumed 4,147,758 $0.47 Warrants expired - - Warrants canceled (1,666,666) $1.00 Warrants exercised - - Balance outstanding and exercisable, March 31, 2020 4,959,882 $0.56 Balance, December 31, 2018 2,395,624 $1.00 Warrants granted and assumed 50,500 $1.00 Warrants expired - - Warrants canceled - - Warrants exercised - - Balance outstanding and exercisable, March 31, 2019 2,446,124 $1.00 |
Stockholders' Equity Disclosure
Stockholders' Equity Disclosure | 3 Months Ended |
Mar. 31, 2020 | |
Notes | |
Stockholders' Equity Disclosure | NOTE 10 - STOCKHOLDERSÂ’ EQUITY The Company is authorized to issue 10,000,000 shares of it $0.001 par value preferred stock and 100,000,000 shares of its $0.001 par value common stock. The Company has also designated 76,000 shares of Series A Preferred Stock. Each share of Series A Preferred Stock is convertible, at any time, at the option of the holder , On January 3, 2020, the Company issued 200,000 shares of common stock for $50,000. On January 3, 2020, the Company issued 100,000 shares for services with a fair value of $39,000, based on stock price on date of issuance. On January 30, 2020, the Company issued 15,000 shares for services with a fair value of $6,390 that were due during the year ended December 31, 2019 and included in stock payable. On February 5, 2020, the Company issued 4,000,000 shares for the settlement of debt with a fair value of $1,240,000, based on stock price on date of issuance. On February 5, 2020, the Company issued 3,600,000 shares for services with a fair value of $1,116,000, based on stock price on date of issuance. On March 9, 2020, the Company cancelled a consulting agreement entered into during the year ended December 31, 2019. As a result, the Company received and cancelled (500,000) shares of common stock valued at $125,000, based on stock price on date of issuance. On March 10, 2020, the Company issued 300,000 shares for services with a fair value of $75,000 based on stock price on date of issuance. On March 11, 2020, the Company received $100,000 for the issuance of 500,000 shares of common stock. As of March 31, 2020, the shares have not been issued and included in stock payable. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Notes | |
Subsequent Events | NOTE 11 - SUBSEQUENT EVENTS On April 2, 2020, the Company filed a certificate of designation of preferences, rights and limitations of a new Series B Preferred Stock with the Secretary of State of Nevada, designating 10,000 shares of preferred stock, par value $0.001 of the Company, as Series B Preferred Stock. The new Series B Preferred Stock does not pay a dividend, does not have any liquidation preference over other securities issued by the Company and are not convertible into shares of the CompanyÂ’s common stock. For so long as any shares of the Series B Preferred Stock remain issued and outstanding, the holders thereof, voting separately as a class, shall have voting power equal to 51% of the total vote on all shareholder matters of the Company. Upon or after the third anniversary of the initial issuance date, the Company shall have the right, at the CompanyÂ’s option, to redeem all or a portion of the shares of Series B Preferred Stock, at a price per share equal to par value. On April 2, 2020, the board issued 5,000 shares of the Series B Preferred Stock to the CompanyÂ’s Chief Executive Officer and President, Michael Stebbins, and 5,000 shares of the Series B Preferred Stock to the CompanyÂ’s Secretary and Treasurer, Robertson Orr. April 1, 2020, the Company issued 500,000 shares of common stock for $100,000 cash. On November 5, 2019, the Company entered into a $562,000 convertible note payable, including an original issue discount of $56,200 pursuant to which we borrowed $337,000, including a $37,000 original issue discount in the first tranche. Interest under the convertible promissory note is 12% per annum, and the principal and all accrued but unpaid interest is due 180 days from funding. On May 5, 2020, Company paid the principal and accrued interest under the first tranche of $357,582. On March 4, 2020, the Company issued a $12,000 promissory note. On April 17, 2020, the note and accrued interest in the amount of $12,140 was paid. On May 5, 2020, the Company issued a $350,000 6% convertible note. The note is due on May 1, 2021 and is convertible at a rate of $0.125 per shares. As an incentive to enter into the agreement the noteholder was also granted 1,500,000 shares valued at $210,000. As of the date of the filing the shares have not been issued. On November 19, 2019, we entered into a $281,000 convertible note payable, including an original issue discount of $28,100 convertible promissory note pursuant to which we borrowed of $150,000, including a $18,500 discount during the year ended December 31, 2019. Interest under the convertible promissory note is 12% per annum, and the principal and all accrued but unpaid interest is due 180 days from funding. On May 20, 2020, the noteholder agreed to extend the due date of the first tranche of funding until July 19, 2020 On January 30, 2019, the Company issued a $100,000 8% promissory note. The note was due on March 1, 2019, is currently past due, and is convertible at a rate of $0.50 per shares. On April 29, 2020, the note was amended to be due on demand but not before January 25, 2021 and the conversion price was changed to $0.10. As consideration the Company granted 140,000 3 year warrants exercisable at $0.125 per share. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies: Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Policies | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in the consolidated financial statements for the three months ended March 31, 2020 should be read in conjunction with the consolidated financial statements and accompanying notes included in the CompanyÂ’s Form 10-K for the CompanyÂ’s fiscal year ended December 31, 2019, as filed with the SEC. The consolidated balance sheet as of December 31, 2019, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP. The accompanying unaudited consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the year ending December 31, 2020. The consolidated financial statements include the accounts of Trutankless, Inc. and its wholly owned subsidiaries. On May 16, 2010, the Company acquired 100% of the outstanding stock of Bollente, Inc and Bollente International, Inc. All significant inter-company transactions and balances have been eliminated. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies: Use of Estimates (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Policies | |
Use of Estimates | Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates. Cash For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies: Stock-based Compensation Policy (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Policies | |
Stock-based Compensation Policy | Stock-based compensation The Company follows ASC 718-10, "Stock Compensation", which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 is a revision to SFAS No. 123, "Accounting for Stock-Based Compensation," and supersedes Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and its related implementation guidance. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized. |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies: Earnings Per Share Policy (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Policies | |
Earnings Per Share Policy | Earnings per share The Company follows ASC Topic 260 to account for the earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation. |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies: Inventory Policy (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Policies | |
Inventory Policy | Inventory Inventories are stated at the lower of cost (average cost) or market (net realizable value). |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies: Revenue Recognition Policy (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Policies | |
Revenue Recognition Policy | Revenue recognition We recognize revenue in accordance with generally accepted accounting principles as outlined in the Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts with Customers, which requires that five basic criteria be met before revenue can be recognized: (i) identify the contract with the customer; (ii) identity the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity satisfied a performance obligation. Revenue recognition occurs at the time product is shipped to customers, when control transfers to customers, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance. We only record revenue when collectability is probable. |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies: Fair Value of Financial Instruments Policy (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Policies | |
Fair Value of Financial Instruments Policy | Fair value of financial instruments The Company measures fair value in accordance with ASC 820 - Fair Value Measurements. ASC 820 defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurements. ASC 820 establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are: Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 - Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3 - Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Valuation of instruments includes unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. As defined by ASC 820, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date. The reported fair values for financial instruments that use Level 2 and Level 3 inputs to determine fair value are based on a variety of factors and assumptions. Accordingly, certain fair values may not represent actual values of the Company’s financial instruments that could have been realized as of March 31, 2020 or that will be recognized in the future, and do not include expenses that could be incurred in an actual settlement. The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, receivables from related parties, prepaid expenses and other, accounts payable, accrued liabilities, and related party and third-party notes payables approximate fair value due to their relatively short maturities. The Company’s notes payable to related parties approximates the fair value of such instrument based upon management’s best estimate of terms that would be available to the Company for similar financial arrangements at March 31, 2020 and December 31, 2019. Financial assets and liabilities measured at fair value on a recurring basis are summarized below as of March 31, 2020 and December 31, 2019: March 31, 2020 Level 1 Level 2 Level 3 Total Liabilities Derivative Financial Instruments $ - $ - $ 1,327,828 $ 1,327,828 December 31, 2019 Liabilities Derivative Financial Instruments $ - $ - $ 613,716 $ 613,716 As of March 31, 2020, the Company’s stock price was $0.19, risk-free discount rate of 0.15% and volatility of 263.5%. As of December 31, 2019, the Company’s stock price was $0.35, risk-free discount rate of 1.60% and volatility of 182%. The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs: Amount Balance December 31, 2019 $ 613,716 Debt discount originated from derivative liabilities 124,037 Financing cost recorded 88,761 Change in fair market value of derivative liabilities (501,314) Balance March 31, 2020 $ 1,327,828 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies: Fair Value of Financial Instruments Policy: Fair Value Measurements, Recurring basis (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Tables/Schedules | |
Fair Value Measurements, Recurring basis | March 31, 2020 Level 1 Level 2 Level 3 Total Liabilities Derivative Financial Instruments $ - $ - $ 1,327,828 $ 1,327,828 December 31, 2019 Liabilities Derivative Financial Instruments $ - $ - $ 613,716 $ 613,716 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies: Fair Value of Financial Instruments Policy: Schedule of Derivative Liabilities at Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Tables/Schedules | |
Schedule of Derivative Liabilities at Fair Value | Amount Balance December 31, 2019 $ 613,716 Debt discount originated from derivative liabilities 124,037 Financing cost recorded 88,761 Change in fair market value of derivative liabilities (501,314) Balance March 31, 2020 $ 1,327,828 |
Notes Payable Disclosure_ Sched
Notes Payable Disclosure: Schedule of Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Tables/Schedules | |
Schedule of Notes Payable | March 31, 2020 December 31, 2019 Note payable, secured, 12% interest, due July 2020 $ - $ 150,000 Note payable, secured, 12% interest, due July 2020 - 100,000 Note payable, secured, 12% interest, due January 2020 - 50,000 Note payable, secured, 12% interest, due July 2020 - 100,000 Note payable, secured, 12% interest, due June 1, 2021 260,000 - Note payable, secured, 12% interest, due June 1, 2021 300,000 - Note payable, secured, 12% interest, due October 2019 - 5,750 Note payable, secured, 12% interest, due March 2020 - 12,000 Note payable, secured, 12% interest, due March 4, 2021 12,000 - Total Notes Payable $ 572,000 $ 417,750 Less unamortized debt discounts (2,379) (5,943) Total Notes Payable 569,621 411,807 Less current portion - (411,807) Total Notes Payable - long term $ 569,621 $ - |
Notes Payable Disclosure_ Sch_2
Notes Payable Disclosure: Schedule of Convertible Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Tables/Schedules | |
Schedule of Convertible Notes Payable | March 31, 2020 December 31, 2019 Convertible note payable, secured, 12% interest, due August 31, 2019, convertible at $1 per share 50,000 50,000 Convertible note payable, secured, 12% interest, due 120 days after delivery of payment notice from lender or November 1, 2019, convertible at $0.25 per share - 900,000 Convertible note payable, secured, 12% interest, due May 2, 2020, convertible at $1 per share 100,000 100,000 Convertible note payable, secured, 12% interest, due May 2, 2020, convertible at $1 per share 50,000 50,000 Convertible note payable, secured, 12% interest, due May 22, 2020, convertible at $1 per share 5,000 5,000 Convertible note payable , secured, 12% interest, due Feb 24, 2020, convertible at $1 per share 75,000 75,000 Convertible notes payable, secured, 4% interest, due October 14, 2020 75,000 75,000 Convertible note payable, secured, 12% interest, due January 11, 2020, convertible at $0.50 per share (See Note 12) - 160,000 Convertible note payable, secured, 10% interest, due February 8, 2020, convertible at $0.50 per share 50,000 50,000 Convertible note payable ,12% interest, due May 2020, conversion price is the lesser of (i) 70% multiplied by the lowest Trading Price during the previous twenty-five (25) trading day period ending on the latest complete Trading Day prior to the date of the note and 70% of the market price. 562,000 337,000 Convertible note payable ,12% interest, due May 2020, conversion price is the lesser of (i) 70% multiplied by the lowest Trading Price during the previous twenty-five (25) trading day period ending on the latest complete Trading Day prior to the date of the note and 70% of the market price. 168,500 168,500 Convertible note payable, secured, 10% interest, due February 8, 2020, convertible at $0.50 per share 50,000 50,000 Convertible note payable, secured, 12% interest 18,700 31,500 Convertible note payable, secured, 10% interest, due October 2021, convertible at $0.50 per share due October 17, 2021 29,000 23,000 Convertible note payable, secured, 10% interest, due October 18, 2021, convertible at $0.50 per share 26,083 - Less unamortized discounts (290,708) (474,692) Total notes payable, net $ 968,775 $ 1,596,410 Less current portion (913,692) (1,583,066) Convertible notes payable, net - Long-term $ 55,083 $ 17,242 |
Notes Payable Disclosure_ Fair
Notes Payable Disclosure: Fair Value Measurement Inputs and Valuation Techniques (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Tables/Schedules | |
Fair Value Measurement Inputs and Valuation Techniques | Risk free interest rate 0.15% - 1.57% Expected term (years) 0.132 - 0.50 Expected volatility 188% - 263.5 Expected dividends 0% |
Commitments and Contingencies_
Commitments and Contingencies: Schedule of Future Minimum Rental Payments for Operating Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Tables/Schedules | |
Schedule of Future Minimum Rental Payments for Operating Leases | Amounts due as of March 31, 2020 Operating Leases 2020 $ 15,120 2021 20,765 2022 21,370 Total minimum lease payments $ 57,255 Less: effect of discounting (8,861) Present value of future minimum lease payments $ 48,394 Less: current obligations under leases (11,205) Long-term lease obligations $ 37,189 |
Stock Warrants Disclosure_ Sche
Stock Warrants Disclosure: Schedule of Warrants Activity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Tables/Schedules | |
Schedule of Warrants Activity | Number of Shares Weighted Average Exercise Price Balance, December 31, 2019 2,478,124 $1.00 Warrants granted and assumed 4,147,758 $0.47 Warrants expired - - Warrants canceled (1,666,666) $1.00 Warrants exercised - - Balance outstanding and exercisable, March 31, 2020 4,959,882 $0.56 Balance, December 31, 2018 2,395,624 $1.00 Warrants granted and assumed 50,500 $1.00 Warrants expired - - Warrants canceled - - Warrants exercised - - Balance outstanding and exercisable, March 31, 2019 2,446,124 $1.00 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies: Fair Value of Financial Instruments Policy: Fair Value Measurements, Recurring basis (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Details | ||
Fair value of derivative liabilities | $ 1,327,828 | $ 613,716 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies: Fair Value of Financial Instruments Policy: Schedule of Derivative Liabilities at Fair Value (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Details | |||
Derivative liability, current | $ 1,327,828 | $ 613,716 | |
Debt discount originated from derivative liabilities | 124,037 | ||
Financing cost recorded | 88,761 | ||
Loss on change of derivative liability | $ (501,314) | $ 0 |
Going Concern Disclosure (Detai
Going Concern Disclosure (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Details | |||
Cash on hand | $ 46,505 | $ 4,342 | |
Accumulated deficit | 35,928,131 | $ 32,425,982 | |
Net income (loss) | (3,502,149) | $ (1,134,829) | |
Cash used in operations | $ (346,070) | $ (724,500) |
Inventory Disclosure (Details)
Inventory Disclosure (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory | $ 36,686 | $ 106,958 |
Finished goods | ||
Inventory | $ 36,686 | $ 106,958 |
Accounts Receivable, Net, Dis_2
Accounts Receivable, Net, Disclosure (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Details | ||
Accounts receivable, gross | $ 417,783 | $ 377,222 |
Allowance for doubtful accounts receivable | 106,841 | 106,958 |
Accounts receivable, net | $ 310,942 | $ 270,381 |
Prepaid Consulting Expenses, _2
Prepaid Consulting Expenses, Disclosure (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Prepaid consulting expense | $ 1,410,738 | $ 481,335 | |
Value of stock issued for services | $ 1,300,000 | $ 450,000 | |
Prepaid consulting expenses, various agreements | |||
Stock issued for services | 4,015,000 | ||
Value of stock issued for services | $ 1,236,390 | ||
Amortization of the prepaid stock compensation | $ 306,987 | $ 114,397 |
Related Party Disclosure (Detai
Related Party Disclosure (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Notes payable - related party | $ 69,150 | $ 69,150 | |
Stock and warrants issued for debt, value | 2,408,447 | $ 170,000 | |
Interest expense associated with the related party notes | $ 10,274 | $ 1,965 | |
Issued February 5, 2020, for settlement of debt | |||
Stock issued for debt, shares | 4,000,000 | ||
Stock and warrants issued for debt, value | $ 1,240,000 | ||
Amount of debt settled | 400,000 | ||
Lease agreement with Templar Asset Group, LLC | |||
Monthly lease payments due | 4,200 | ||
Two notes payable due to an officer and director | |||
Notes payable - related party | $ 69,150 | $ 69,150 |
Notes Payable Disclosure_ Sch_3
Notes Payable Disclosure: Schedule of Notes Payable (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Discounts on notes payable | $ (2,379) | $ (5,943) |
Total Notes Payable | 569,621 | 411,807 |
Total Notes Payable - long term | 569,621 | 0 |
Note payable, secured, 12% interest, due July 2020 | ||
Notes payable | 0 | 150,000 |
Note payable, secured, 12% interest, due July 2020(2) | ||
Notes payable | 0 | 100,000 |
Note payable, secured, 12% interest, due Jan 2020 | ||
Notes payable | 0 | 50,000 |
Note payable, secured, 12% interest, due Jul 2020(3) | ||
Notes payable | 0 | 100,000 |
Note payable, secured, 12% interest, due June 1, 2021 | ||
Notes payable | 260,000 | 0 |
Note payable, secured, 12% interest, due June 1, 2021(2) | ||
Notes payable | 300,000 | 0 |
Note payable, secured, 12% interest, due Oct 2019 | ||
Notes payable | 0 | 5,750 |
Note payable, secured, 12% interest, due March 2020 | ||
Notes payable | 0 | 12,000 |
Note payable, secured, 12% interest, due March 4, 2021 | ||
Notes payable | $ 12,000 | $ 0 |
Notes Payable Disclosure (Detai
Notes Payable Disclosure (Details) - USD ($) | 2 Months Ended | 3 Months Ended | |
May 20, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | |
Gain (loss) on extinguishment of notes | $ 1,965,284 | $ 0 | |
Proceeds from notes payable | 231,783 | 137,000 | |
Stock and warrants issued for debt, value | 2,408,447 | 170,000 | |
Repayments of notes payable | 18,550 | 0 | |
Proceeds from convertible notes payable | 12,000 | 112,500 | |
Convertible note issued May 2017 | |||
unamortized discount | 419 | ||
Convertible note issued May 2017(2) | |||
unamortized discount | 209 | ||
Convertible note issued May 2017(3) | |||
unamortized discount | 19 | ||
Convertible note entered into Sept 17, 2018 | |||
Debt discount amortized | 30,000 | ||
Convertible note issued Dec 14, 2018 | |||
Debt discount amortized | 5,000 | ||
Convertible note issued Jan 25, 2019 | |||
Debt discount amortized | 38,250 | ||
Proceeds from convertible notes payable | $ 100,000 | ||
Convertible note issued Feb 8, 2019 | |||
Debt discount amortized | 30,000 | ||
Stock issued for debt, shares | 60,000 | ||
Stock and warrants issued for debt, value | $ 30,000 | ||
Proceeds from convertible notes payable | $ 50,000 | ||
Convertible note issued Feb 19, 2019 | |||
Debt discount amortized | $ 2,500 | ||
Stock issued for debt, shares | 5,000 | ||
Stock and warrants issued for debt, value | $ 2,500 | ||
Proceeds from convertible notes payable | 25,000 | ||
Convertible note issued Oct 18, 2019 | |||
Stock issued for debt, shares | 244,000 | ||
Gain (loss) on extinguishment of notes | $ 102,905 | ||
Stock and warrants issued for debt, value | 86,691 | ||
Proceeds from convertible notes payable | 6,000 | ||
Convertible note issued Nov 5, 2019 | |||
Debt discount amortized | 339,946 | ||
Convertible note issued Nov 19, 2019 | |||
Debt discount amortized | 123,814 | ||
Convertible note issued Jan 8, 2020 | |||
Debt discount amortized | $ 23,121 | ||
Stock issued for debt, shares | 260,830 | ||
Proceeds from convertible notes payable | $ 26,083 | ||
Interest expense - convertible debt | |||
Interest expense including amortization of the associated debt discount | 727,493 | $ 184,281 | |
Note payable entered into September 2, 2016 | |||
Debt discount amortized | 18,621 | ||
unamortized discount | $ 2,379 | ||
Consideration for the consolidation of three notes payable to one - Jan 1, 2020 | |||
Stock issued for debt, shares | 175,000 | ||
Gain (loss) on extinguishment of notes | $ 68,250 | ||
Convertible promissory notes and warrants, issued in 2018 | |||
Debt discount amortized | $ 165,516 | ||
Notes payable entered into Jan 30, 2019 | |||
Stock issued for debt, shares | 100,000 | ||
Proceeds from notes payable | $ 100,000 | ||
Stock and warrants issued for debt, value | 45,000 | ||
Consideration for the consolidation of two notes payable to one - Jan 1, 2020 | |||
Stock issued for debt, shares | 175,000 | ||
Gain (loss) on extinguishment of notes | $ 68,250 | ||
Stock and warrants issued for debt, value | 68,250 | ||
Note payable entered into March 1, 2019 | |||
Proceeds from notes payable | $ 12,000 | ||
Repayments of notes payable | 12,000 | ||
Note payable entered into March 4, 2020 | |||
Proceeds from notes payable | $ 12,000 | ||
Repayments of notes payable | $ 12,140 |
Notes Payable Disclosure_ Sch_4
Notes Payable Disclosure: Schedule of Convertible Notes Payable (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Discounts on convertible notes payable | $ (290,708) | $ (474,692) |
Convertible notes payable, net of debt discount | (913,692) | (1,583,066) |
Convertible notes payable - long term, net of debt discount | 55,083 | 17,242 |
Convertible note payable due Aug 2019 | ||
Convertible debt | 50,000 | 50,000 |
Convertible promissory note, 12% interest, due Nov 2019 | ||
Convertible debt | 0 | 900,000 |
Convertible note payable due May 2020 | ||
Convertible debt | 100,000 | 100,000 |
Convertible note payable due May 2020(2) | ||
Convertible debt | 50,000 | 50,000 |
Convertible note payable due May 2020(3) | ||
Convertible debt | 5,000 | 5,000 |
Convertible note payable due Feb 2020 | ||
Convertible debt | 75,000 | 75,000 |
Convertible note payable due Oct 2020 | ||
Convertible debt | 75,000 | 75,000 |
Convertible note payable due Jan 2020 | ||
Convertible debt | 0 | 160,000 |
Convertible note payable due Feb 2020(2) | ||
Convertible debt | 50,000 | 50,000 |
Convertible note payable due May 2020(4) | ||
Convertible debt | 562,000 | 337,000 |
Convertible note payable due May 2020(5) | ||
Convertible debt | 168,500 | 168,500 |
Convertible note payable due Feb 2020(3) | ||
Convertible debt | 50,000 | 50,000 |
Convertible note payable due Unknown | ||
Convertible debt | 18,700 | 31,500 |
Convertible note payable due Oct 2021 | ||
Convertible debt | 29,000 | 23,000 |
Convertible note payable due Oct 2021(2) | ||
Convertible debt | $ 26,083 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Right of use asset | $ 46,173 | $ 50,234 |
Office lease agreement | ||
Right of use asset | 46,173 | |
Lease liability | $ 48,394 |
Commitments and Contingencies_2
Commitments and Contingencies: Schedule of Future Minimum Rental Payments for Operating Leases (Details) | Mar. 31, 2020USD ($) |
Details | |
Total minimum lease payments due | $ 57,255 |
Present value of future minimum lease payments | 48,394 |
Current obligations under leases | 11,205 |
Long-term lease obligations | $ 37,189 |
Stock Warrants Disclosure (Deta
Stock Warrants Disclosure (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Warrants granted and assumed | 4,147,758 | 50,500 |
Number of Series A Preferred Shares converted | 76,000 | |
Granted January 8, 2020 | ||
Warrants granted and assumed | 208,664 | |
Warrants exercise price per share | $ 0.125 | |
Warrants granted, valued at | $ 19,277 | |
Granted January 8, 2020(2) | ||
Warrants granted and assumed | 232,000 | |
Warrants exercise price per share | $ 0.125 | |
Warrants granted, valued at | $ 82,131 | |
Granted February 5, 2020 | ||
Warrants granted and assumed | 1,965,094 | |
Warrants exercise price per share | $ 0.50 | |
Warrants granted, valued at | $ 566,269 | |
Into Common Shares | ||
Number of shares converted into | 205,000 | |
Into Warrants | ||
Number of shares converted into | 76,000 |
Stock Warrants Disclosure_ Sc_2
Stock Warrants Disclosure: Schedule of Warrants Activity (Details) - shares | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Details | ||||
Warrants outstanding | 4,959,882 | 2,446,124 | 2,478,124 | 2,395,624 |
Warrants granted and assumed | 4,147,758 | 50,500 | ||
Warrants outstanding | (1,666,666) |
Stockholders' Equity Disclosu_2
Stockholders' Equity Disclosure (Details) - USD ($) | 2 Months Ended | 3 Months Ended | ||
May 20, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Preferred stock authorized | 10,000,000 | 10,000,000 | ||
Par value of preferred stock | $ 0.001 | $ 0.001 | ||
Common stock authorized | 100,000,000 | 100,000,000 | ||
Par value of common stock | $ 0.001 | $ 0.001 | ||
Number of Series A Preferred Shares converted | 76,000 | |||
Stock issued for cash, value | $ 175,000 | $ 694,500 | ||
Value of stock issued for services | 1,300,000 | 450,000 | ||
Stock and warrants issued for debt, value | $ 2,408,447 | $ 170,000 | ||
Series A | ||||
Preferred stock authorized | 76,000 | |||
Preferred Stock conversion terms | The new Series B Preferred Stock does not pay a dividend, does not have any liquidation preference over other securities issued by the Company and are not convertible into shares of the Company’s common stock. For so long as any shares of the Series B Preferred Stock remain issued and outstanding, the holders thereof, voting separately as a class, shall have voting power equal to 51% of the total vote on all shareholder matters of the Company. Upon or after the third anniversary of the initial issuance date, the Company shall have the right, at the Company’s option, to redeem all or a portion of the shares of Series B Preferred Stock, at a price per share equal to par value | Each share of Series A Preferred Stock is convertible, at any time, at the option of the holder, into five shares of our common stock and one warrant to purchase one share of our common stock at $1.00 per share. All Preferred Stock automatically converts into shares of the Company’s common stock and warrants after three years from the original issue date of the Preferred Stock. | ||
Into Common Shares | ||||
Number of shares converted into | 205,000 | |||
Into Warrants | ||||
Number of shares converted into | 76,000 | |||
Preferred stock conversion | ||||
Shares payable | 175,000 | |||
Issued January 3, 2020 | ||||
Stock issued for cash | 200,000 | |||
Stock issued for cash, value | $ 50,000 | |||
Stock issued for services | 100,000 | |||
Value of stock issued for services | $ 39,000 | |||
Issued January 30, 2020 | ||||
Stock issued for services | 15,000 | |||
Value of stock issued for services | $ 6,390 | |||
Issued February 5, 2020, for settlement of debt | ||||
Stock issued for debt, shares | 4,000,000 | |||
Stock and warrants issued for debt, value | $ 1,240,000 | |||
Issued February 5, 2020 | ||||
Stock issued for services | 3,600,000 | |||
Value of stock issued for services | $ 1,116,000 | |||
IMarch 9 2020, per cancelled consulting agreement | ||||
Rescission and retirement of shares, shares | (500,000) | |||
Issued March 10, 2020 | ||||
Stock issued for services | 300,000 | |||
Value of stock issued for services | $ 75,000 | |||
Stock subscriptions received | ||||
Shares payable | 500,000 | |||
Stock issued for cash, value | $ 100,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 2 Months Ended | 3 Months Ended | ||
May 20, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Preferred stock authorized | 10,000,000 | 10,000,000 | ||
Stock issued for cash, value | $ 175,000 | $ 694,500 | ||
Repayments of convertible notes payable | 12,000 | 1,200 | ||
Repayments of notes payable | 18,550 | 0 | ||
Proceeds from notes payable | $ 231,783 | $ 137,000 | ||
Warrants granted and assumed | 4,147,758 | 50,500 | ||
Note payable entered into March 4, 2020 | ||||
Repayments of notes payable | $ 12,140 | |||
Proceeds from notes payable | $ 12,000 | |||
Notes payable entered into Jan 30, 2019 | ||||
Proceeds from notes payable | $ 100,000 | |||
Warrants granted and assumed | 140,000 | |||
Convertible note issued Nov 5, 2019 | ||||
Repayments of convertible notes payable | $ 357,582 | |||
Convertible note issued May 5, 2020 | ||||
Proceeds from notes payable | $ 350,000 | |||
April 2, 2020 - Series B Preferred to the CEO | ||||
Stock issued, share-based compensation | 5,000 | |||
April 2, 2020 - Series B Preferred to Secretary and Treasurer | ||||
Stock issued, share-based compensation | 5,000 | |||
April 1, 2020 - Issuance of Common Stock | ||||
Stock issued for cash | 500,000 | |||
Stock issued for cash, value | $ 100,000 | |||
Series B | ||||
Preferred stock authorized | 10,000 | |||
Series A | ||||
Preferred stock authorized | 76,000 | |||
Preferred Stock conversion terms | The new Series B Preferred Stock does not pay a dividend, does not have any liquidation preference over other securities issued by the Company and are not convertible into shares of the Company’s common stock. For so long as any shares of the Series B Preferred Stock remain issued and outstanding, the holders thereof, voting separately as a class, shall have voting power equal to 51% of the total vote on all shareholder matters of the Company. Upon or after the third anniversary of the initial issuance date, the Company shall have the right, at the Company’s option, to redeem all or a portion of the shares of Series B Preferred Stock, at a price per share equal to par value | Each share of Series A Preferred Stock is convertible, at any time, at the option of the holder, into five shares of our common stock and one warrant to purchase one share of our common stock at $1.00 per share. All Preferred Stock automatically converts into shares of the Company’s common stock and warrants after three years from the original issue date of the Preferred Stock. |