Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 17, 2021 | |
Document And Entity Information | ||
Entity Registrant Name | BASANITE, INC. | |
Entity Central Index Key | 0001448705 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Document Quarterly Report | true | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | NV | |
Entity File Number | 000-53574 | |
Entity Common Stock, Shares Outstanding | 227,013,913 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash | $ 355,759 | $ 259,505 |
Accounts receivable, net | 1,907 | |
Inventory | 535,985 | 446,575 |
Prepaid expenses | 43,945 | 40,283 |
Deposits and other current assets | 75,561 | 75,995 |
TOTAL CURRENT ASSETS | 1,011,250 | 824,265 |
Lease right-of-use asset | 944,098 | 1,004,167 |
Fixed assets, net | 1,120,229 | 1,020,035 |
TOTAL LONG TERM ASSETS | 2,064,327 | 2,024,202 |
TOTAL ASSETS | 3,075,577 | 2,848,467 |
CURRENT LIABILITIES | ||
Accounts payable | 318,152 | 249,353 |
Accrued expenses | 104,753 | 197,350 |
Accrued legal liability | 813,681 | 809,127 |
Notes payable | 175,275 | 128,021 |
Notes payable - convertible, net | 0 | 10,000 |
Notes payable - convertible - related party, net | 1,610,005 | 1,025,000 |
Subscription liability | 23,900 | 40,000 |
Due to stockholder | 300,000 | |
Lease liability - current portion | 280,520 | 267,289 |
TOTAL CURRENT LIABILITIES | 3,626,286 | 2,726,140 |
Lease liability - net of current portion | 751,934 | 826,388 |
TOTAL LIABILITIES | 4,378,220 | 3,552,528 |
STOCKHOLDERS' DEFICIT | ||
Preferred stock, $0.001 par value, 5,000,000 shares authorized, none issued and outstanding | ||
Common stock, $0.001 par value, 1,000,000,000 shares authorized, 226,886,785 and 224,836,785 shares issued and outstanding, respectively | 226,888 | 224,838 |
Additional paid-in capital | 32,786,061 | 28,714,488 |
Accumulated deficit | (34,315,592) | (29,643,387) |
TOTAL STOCKHOLDERS' DEFICIT | (1,302,643) | (704,061) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 3,075,577 | $ 2,848,467 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 226,886,785 | 224,836,785 |
Common stock, shares outstanding | 226,886,785 | 224,836,785 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue | ||
Products sales - rebar | $ 4,136 | $ 1,625 |
Total cost of goods sold | 1,316 | 619 |
Gross profit | 2,820 | 1,006 |
OPERATING EXPENSES | ||
Professional fees | 113,732 | 109,858 |
Payroll, taxes and benefits | 254,115 | 237,431 |
Consulting | 113,250 | 17,063 |
General and administrative | 583,770 | 217,953 |
Total operating expenses | 1,064,867 | 582,305 |
NET LOSS FROM OPERATIONS | (1,062,047) | (581,299) |
OTHER INCOME (EXPENSE) | ||
Gain on settlement of payables | 24,485 | 70,817 |
Loss on extinguishment of debt | (3,686,123) | |
Forgiveness of debt | 124,143 | |
Interest expense | (72,663) | (50,823) |
Total other income (expense) | (3,610,158) | 19,994 |
NET LOSS | $ (4,672,205) | $ (561,305) |
Net loss per share - basic and diluted | $ (0.0021) | $ (0.003) |
Weighted average number of shares outstanding - basic and diluted | 226,336,785 | 200,735,730 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Unaudited) - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2019 | $ 200,736 | $ 24,216,042 | $ (25,444,056) | $ (1,027,278) | |
Balance, shares at Dec. 31, 2019 | 200,735,730 | ||||
Net loss | (561,305) | (561,305) | |||
Balance at Mar. 31, 2020 | $ 200,736 | 24,216,042 | (26,005,361) | (1,588,583) | |
Balance, shares at Mar. 31, 2020 | 200,735,730 | ||||
Balance at Dec. 31, 2020 | $ 224,838 | 28,714,488 | (29,643,387) | (704,061) | |
Balance, shares at Dec. 31, 2020 | 224,836,785 | ||||
Warrants exercised for cash | $ 1,000 | 122,500 | 123,500 | ||
Warrants exercised for cash, Shares | 1,000,000 | ||||
Stock-based compensation | $ 600 | 173,400 | 174,000 | ||
Stock-based compensation, shares | 600,000 | ||||
Stock issued for cash | $ 450 | 8,955 | 90,000 | ||
Stock issued for cash, shares | 450,000 | ||||
Warrants issued | 3,686,123 | 3,686,123 | |||
Net loss | (4,672,205) | (4,672,205) | |||
Balance at Mar. 31, 2021 | $ 226,888 | $ 32,786,061 | $ (34,315,592) | $ (1,302,643) | |
Balance, shares at Mar. 31, 2021 | 226,886,785 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (4,672,205) | $ (561,305) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Lease right-of-use asset amortization | 60,069 | 51,591 |
Depreciation | 31,709 | 25,828 |
Amortization of debt discount | 16,900 | |
Gain on settlement of payable | 24,485 | |
Loss on extinguishment of debt | 3,686,123 | |
Loan Forgiveness | (124,143) | |
Stock-based compensation | 174,000 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses | (3,662) | (2,783) |
Inventory | (89,410) | 1,197 |
Accounts receivable | 2,341 | |
Other current assets | 48,086 | |
Accounts payable and accrued expenses | 116,071 | 48,828 |
Subscription liability | (16,100) | 416,667 |
Lease liability | (61,223) | (52,740) |
Net cash used in operating activities | (920,915) | (7,731) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of equipment | (131,903) | (59,377) |
Net cash used in investing activities | (131,903) | (59,377) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock | 213,500 | |
Proceeds from warrants exercised for cash | 123,500 | |
Repayment of convertible notes payable and convertible notes payable related party | (35,000) | (102,500) |
Proceeds from notes payable and notes payable related party | 175,275 | 109,541 |
Proceeds from convertible notes payable and convertible notes payable related party | 500,000 | 50,000 |
Advances from stockholders | 300,000 | |
Repayment of notes payable and notes payable related party | (4,703) | (17,244) |
Net cash provided by financing activities | 1,149,072 | 39,797 |
NET INCREASE (DECREASE) IN CASH | 96,254 | (27,311) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 259,505 | 129,152 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 355,759 | 101,841 |
Supplemental cash flow information: | ||
Cash paid for interest | 3,428 | 2,753 |
Forgiveness of Paycheck Protection Program loan and accrued interest | $ 124,143 |
ORGANIZATION, NATURE OF BUSINES
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN | NOTE 1 – ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN (A) Description of Business On May 30, 2006, Basanite, Inc. was organized as a Nevada corporation. Basanite and its wholly owned subsidiaries are herein referred to as the "Company", “we”, “our”, or “us”. Currently based in Pompano Beach, Florida, the Company intends to manufacture concrete-reinforcing products made from basalt fiber reinforced polymers (“BFRP”), such as its primary product BasaFlex. This UV-stable, chemical, acid and moisture resistant material is sustainable and environmentally friendly and has been engineered to replace steel as it never rusts, therefore, addressing the industry’s current corrosion issues. The Company’s wholly owned subsidiary created in 2018, Basanite Industries, LLC (“BI”) manufactures BasaFlex™, a basalt fiber reinforced polymer rebar. BFRP rebar is a stronger, lighter, sustainable, non-conductive and non-corrosive alternative for traditional steel rebar and wire mesh. BI leases a fully permitted and Underwriters Laboratories (“UL”) approved 36,900 square foot facility located in Pompano Beach, Florida, equipped with five customized Pultrusion machines. Each machine has two linear production lines (a total capacity of 10 manufacturing lines). BI’s operations team is currently in the processes of optimizing and scaling the manufacturing plant to produce 11,000 to 17,000 linear feet of BFRP rebar per line, per day, depending on the product mix. BI’s own fully equipped test lab is utilized to evaluate, validate and verify each product’s performance attributes. The manufacture of concrete reinforcement products made from continuous basalt fiber creates substantial benefits for the construction industry, including but not limited to, the following: ● BasaFlex™ never rusts – steel reinforcement products rust, causing time and repair costs down the road; ● BasaFlex™ is sustainable; with a longer lifecycle – production of our products results in exceptionally low carbon footprint when compared with steel. The lack of corrosion allows the “lifespan” of concrete products to be significantly longer; and ● BasaFlex™ has a lower final, in place cost – the physical nature of our products relative to steel (4X lighter, easily transportable, “coil-able”, safer and easier to use) reduces the all-in cost of reinforcement when all factors are considered. (B) Liquidity and Management Plan Since inception, the Company has incurred net operating losses and used cash in operations. As of March 31, 2021 and December 31, 2020, respectively, the Company reported: ● an accumulated deficit of $34,315,592 and $29,643,387; ● a working capital deficiency of $2,615,036 and $1,901,875; and ● cash used in operations of $920,915 and $2,799,499. Losses have principally occurred as a result of the substantial resources required for product research and development and for marketing of the Company's products; including the general and administrative expenses associated with the organization. At March 31, 2021, the Company had cash of $355,759 compared to $259,505 at December 31, 2020. We have historically satisfied our working capital requirements through the sale of restricted common stock and the issuance of warrants and promissory notes. Until we are able to internally generate positive cash flow, we will attempt to fund working capital requirements through third party financing, including through private placement of our securities as well as bridge loan arrangements. However, a number of factors continue to hinder the Company’s ability to attract new capital investment. We cannot provide any assurances that the required capital will be obtained or that the terms of such required capital may be acceptable to us. If we are unable to obtain adequate financing, we may reduce our operating activities to reduce our cash use until sufficient funding is secured. These conditions raise substantial doubt about the Company's ability to continue as a going concern. These consolidated financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (A) Use of Estimates in Financial Statements The presentation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Stock-based compensation and stock awards related to convertible debt instruments are recognized based on the fair value of the awards granted. The fair value of each award or conversion feature is typically estimated on the grant date using the Black-Scholes pricing model. The Black-Scholes pricing model requires the input of highly subjective assumptions, including the fair value of the underlying common stock, the expected term of the option, the expected volatility of the price of our common stock, risk-free interest rates and the expected dividend yield of our common stock. The assumptions used to determine the fair value of the stock awards represent management’s best estimates. These estimates involve inherent (B) Principles of Consolidation The consolidated financial statements include the accounts of Basanite, Inc. and its wholly owned subsidiaries, Basanite Industries, LLC and Basalt America, LLC. All intercompany balances have been eliminated in consolidation. (C) Cash The Company considers all highly liquid temporary cash instruments with an original maturity of three months or less to be cash equivalents. The Company places its cash, cash equivalents and restricted cash on deposit with financial institutions in the United States, which are insured by the Federal Deposit Insurance Company ("FDIC") up to $250,000. The Company's credit risk in the event of failure of these financial institutions is represented by the difference between the FDIC limit and the total amounts on deposit. Management monitors the financial institutions credit worthiness in conjunction with balances on deposit to minimize risk. The Company from time to time may have amounts on deposit in excess of the insured limits. (D) Inventories The Company’s inventories consist of raw materials, work in process and finished goods, both purchased and manufactured. Inventories are stated at the lower of cost or net realizable value. Cost is determined on the first-in, first-out basis. Raw materials inventory consists primarily of basalt fiber and other necessary elements to produce the basalt rebar. On a quarterly basis, the Company analyzes its inventory levels and records allowances for inventory that has become obsolete and inventory that has a cost basis in excess of the expected net realizable value. The Company’s inventory at March 31, 2021 and December 31, 2020 was comprised of: March 31, December 31, 2020 (Unaudited) Finished goods $ 465,688 $ 305,550 Work in process 32,487 35,286 Raw materials 37,810 105,739 Total inventory $ 535,985 $ 446,575 (E) Fixed assets Fixed assets consist of the following: March 31, December 31, 2020 (Unaudited) Computer equipment $ 15,780 $ 15,780 Machinery 675,236 667,536 Leasehold improvements 161,579 161,579 Office furniture and equipment 71,292 71,292 Land improvements 7,270 7,270 Website development 2,500 2,500 Construction in process 359,153 234,950 Total fixed assets 1,292,810 1,160,907 Accumulated depreciation (172,581 ) (140,872 ) Total fixed assets, net $ 1,120,229 $ 1,020,035 Depreciation expense for the three months ended March 31, 2021 and 2020 was $31,709 and $25,828, respectively. (F) Deposits and other current assets The Company’s deposits and other current assets consist of the deposits made on equipment, security deposits, utility deposits and other receivables. The deposits are reclassified as part of the fixed asset cost when received and placed into service. (G) Loss Per Share The basic loss per share is calculated by dividing the Company’s net loss available to common shareholders by the weighted average number of common shares during the period. The diluted loss per share is calculated by dividing the Company’s net loss by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. The following are potentially dilutive shares not included in the loss per share computation: March 31, December 31, 2020 (Unaudited) Options 4,502,500 4,542,500 Warrants 52,920,378 38,920,378 Convertible shares 165,114,331 112,233,406 222,537,209 155,696,284 (H) Stock-Based Compensation The Company recognizes compensation costs to employees under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Compensation – Stock Compensation. Under FASB ASC Topic 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the grant. The Company entered into a consulting agreement on July 9, 2020 for services in exchange for restricted common stock as compensation for the consulting services. The term of the agreement is for six months with the option for renewal quarterly. Upon execution of the agreement, 600,000 shares were due within 5 days of execution. The execution date fair value of the shares was $0.29 per share or $174,000. If the Company agrees to renew each quarter, an additional 350,000 shares are to be issued per quarter. On January 9, 2021, the Company agreed to renew another quarter and issued 350,000 restricted common shares. The execution date fair value of the shares was $0.29 per share or $101,500. The Company entered into a consulting agreement on October 13, 2020 for services in exchange for restricted common stock as compensation for the consulting services. The term of the agreement is for six months with the option for renewal quarterly. Upon execution of the agreement, no shares were due to be issued. If the Company agrees to renew each quarter, 250,000 shares are to be issued per quarter. On January 9, 2021, the Company agreed to renew another quarter and issued 250,000 restricted common shares. The execution date fair value of the shares was $0.29 per share or $72,500. The Company recognized $165,010 in stock-based compensation as of March 31, 2021. As of March 31, 2021, $17,400 of stock was issued for the consulting agreements but not earned as compensation and is included in prepaid expenses on the condensed consolidated balance sheet. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS There are several new accounting pronouncements issued or proposed by the FASB. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial position or operating results, except as disclosed. In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and other Options (Subtopic 70-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s instruments by removing major separation models required under current accounting principles generally accepted in the United States of America (“U.S. GAAP”). ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exceptions and also simplifies the diluted earnings per share calculation in certain areas. The standard is effective for public business entities, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years and interim periods within those fiscal years beginning after December 15, 2021. For all other entities, the standard will be effective for fiscal years beginning after December 12, 2023. Early adoption is permitted but no earlier than fiscal years beginning after December 15, 2020, and adoption must be as of the beginning of the Company’s annual fiscal year. The standard was adopted on January 1, 2021. By no longer recording embedded conversion features separately from the convertible debt instrument, and instead as a single liability, the Company’s financial statements will reflect a more simplified view of convertible debt instruments and cash interest expense that is more relevant than an imputed interest expense that results from the separation of conversion features previously required by U.S. GAAP. There was no material effect on the Company's condensed consolidated financial statements as of March 31, 2021. |
OPERATING LEASE
OPERATING LEASE | 3 Months Ended |
Mar. 31, 2021 | |
Lessee Disclosure [Abstract] | |
OPERATING LEASE | NOTE 4 – OPERATING LEASE On January 18, 2019, the Company entered into an agreement to lease approximately 25,470 square feet of office and manufacturing space in Pompano Beach, Florida through March 2024. On March 25, 2019, the Company entered into an amendment to the agreement to increase the square footage of leased premises to 36,900 square feet, increasing the Company’s base rent obligation to be approximately $33,825 per month for one year and nine months, and increasing annually at a rate of three percent for the remainder of the lease term. The right-of-use asset is composed of the sum of all remaining lease payments plus any initial direct cost and is amortized over the life of the expected lease term. For the expected term of the lease, the Company used the initial term of the five-year lease. If the Company does elect to exercise its option to extend the lease for another five years, that election will be treated as a lease modification and the lease will be reviewed for remeasurement. The future minimum lease payments to be made under the operating lease as of March 31, 2021 are: 2021 $ 313,558 2022 427,484 2023 440,308 2024 110,884 Total minimum lease payments 1,292,234 Discount (259,780 ) Operating lease liability $ 1,032,454 Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company used the incremental borrowing rate based on the information available at the lease commencement date. As of March 31, 2021, the weighted-average remaining lease term is 3 years and the weighted-average discount rate used to determine the operating lease liability was 15.0%. For the three months ended March 31, 2021 and 2020, the Company expensed $106,919 and $107,589, respectively, for rent. |
NOTES PAYABLE - CONVERTIBLE
NOTES PAYABLE - CONVERTIBLE | 3 Months Ended |
Mar. 31, 2021 | |
Notes Payable, by Type, Current and Noncurrent [Abstract] | |
NOTES PAYABLE - CONVERTIBLE | NOTE 5 – NOTES PAYABLE – CONVERTIBLE Notes payable – convertible totaled $0 and $10,000 at March 31, 2021 and December 31, 2020, respectively. On August 3, 2020, the Company issued an unsecured convertible promissory note to an investor in exchange for $10,000 bearing an interest rate of 18% per annum and payable in six months. The note included provisions which allowed the holder to convert the unpaid principal balance of the note into restricted common stock, of the Company at the conversion rate equal to the per share cash price paid for the shares by any third-party investor(s) with total proceeds to the Company of not less than $500,000 provided, however, in no event shall the conversion price ever be less than $0.01 per share. On February 16, 2021, the $10,000 note was paid along with accrued interest in the amount of $1,007. Interest expense for the Company’s convertible notes payable was $161 and $22,906 for the three months ended March 31, 2021 and March 31, 2020, respectively. Accrued interest for the Company’s convertible notes payable at March 31, 2021 and December 31, 2020 was $0 and $760, respectively, and is included in accrued expenses on the condensed consolidated balance sheets. |
NOTES PAYABLE - CONVERTIBLE - R
NOTES PAYABLE - CONVERTIBLE - RELATED PARTY | 3 Months Ended |
Mar. 31, 2021 | |
Notes Payable, by Type, Current and Noncurrent [Abstract] | |
NOTES PAYABLE - CONVERTIBLE - RELATED PARTY | NOTE 6 – NOTES PAYABLE – CONVERTIBLE – RELATED PARTY Notes payable – convertible – related party totaled $1,610,005 and $1,025,000 at March 31, 2021 and December 31, 2020, respectively. On August 3, 2020, the Company issued an unsecured convertible promissory note to Michael V. Barbera, the Chairman of the Board, in exchange for $25,000 bearing an interest rate of 18% per annum and payable in six months. The note included provisions which allowed the holder to convert the unpaid principal balance of the note into restricted common stock, of the Company at the conversion rate equal to the per share cash price paid for the shares by any third-party investor(s) with total proceeds to the Company of not less than $500,000 provided, however, in no event shall the conversion price ever be less than $0.01 per share. On February 16, 2021, the $25,000 note was paid along with accrued interest in the amount of $2,302. O n August 3, 2020, the Company issued a secured convertible promissory note to certain investors in exchange for $1,000,000 bearing an interest rate of 20% per annum and payable in six months. The holder may convert the unpaid principal balance of the note into restricted common stock, of the Company at the conversion rate equal to the per share cash price paid for the shares by any third-party investor(s) with total proceeds to the Company of not less than $500,000 provided, however, in no event shall the conversion price ever be less than $0.01 per share. This note contains a negative covenant that requires the Company to obtain consent prior to incurring any additional equity or debt investments and is secured by all of the assets of the Company. The Richard A. LoRicco Sr. and Lucille M. LoRicco Irrevocable Insurance Trust DTD 4/28/95, Louis Demaio as Trustee (the “Trust”) is the holder of $750,000 of the principal amount of this note. The Trust was created by Richard A. LoRicco Sr. and Lucille M. LoRicco, who were the parents of Ronald J. LoRicco Sr., one of the members of the Company’s Board of Directors and is maintained by an independent trustee . Ronald J. LoRicco Sr. does not have voting or investment control of or power over the Trust but is an anticipated, partial beneficiary of the Trust. On February 12, 2021, the Company exchanged the original debt for the newly issued an amended and restated secured convertible promissory note to certain investors with a new principal balance of $1,610,005 bearing an interest rate of 20% per annum and fully payable in three months. This was accounted for as debt extinguishment and the new promissory note was recorded at fair value in accordance with ASC 470 “Debt”. The original principal of $1,000,000 and accrued interest of $110,005 calculated as of the date of amendment and restatement along with an additional advance of $500,000 determined the principal amount of the new note. In consideration of the additional advance and the extension of the maturity date of the original note, the Company issued to the noteholders 15,000,000 five-year common stock warrants with an exercise price of $0.20. The issuance of the warrants for the extension generated a loss on extinguishment of $3,686,136 for the fair value of the warrants issued. If prior to the maturity date, the Company consummates financing with proceeds of not less than $3,000,000, the noteholders, at their sole discretion, may elect to extend the maturity date by an additional six months such that the maturity date shall then be November 12, 2021. On May 12, 2021, the Company extended the debt and newly issued an amended and restated secured convertible promissory note to certain investors with a new principal balance of $1,689,746 bearing an interest rate of 20% per annum and fully payable in nine months. The original principal of $1,610,005 and accrued interest of $79,742 calculated as of the date of amendment and restatement determined the principal amount of the new note. In consideration of the additional advance and the extension of the maturity date of the original note, the Company issued to the noteholders 7,500,000 five-year common stock warrants with an exercise price of $0.35. Interest expense for the Company’s convertible notes payable – related parties was $66,916 and $0 for the three months ended March 31, 2021 and March 31, 2020, respectively. Accrued interest for the Company’s convertible notes payable – related parties at March 31, 2021 and December 31, 2020 was $41,184 and $86,574, respectively, and is included in accrued expenses on the condensed consolidated balance sheets. |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2021 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | NOTE 7 – NOTES PAYABLE Notes payable totaled $175,275 and $128,021 at March 31, 2021 and December 31, 2020, respectively. On March 30, 2021, the Company entered financing arrangements to finance the insurance premiums for its liability coverage. The financing has an interest rate of 9.636% and lasts through March 2022. The balance as of March 31, 2021 was $9,528. Due to the ongoing uncertainty about the severity and duration associated with the COVID-19 pandemic, the Company considered furloughing or eliminating employees and taking other measures to reduce operating costs until there is more certainty about the short-term and long-term effects of the COVID-19 pandemic on the nation’s economy and the Company’s business. On May 1, 2020, the Company entered a promissory note agreement with its bank in exchange for $123,318 bearing an interest rate of 1.0% per annum. The loan was made pursuant to the Paycheck Protection Program under the CARES Act after receiving confirmation from the U.S. Small Business Administration (“SBA”). The Paycheck Protection Program Flexibility Act requires that the funds be used to maintain the current number of employees as well as cover payroll-related costs, monthly mortgage or rent payments and utilities and not more than 40% can be expended on non-payroll-related costs. On January 4, 2021, the Small Business Administration forgave the promissory note of $123,318 and accrued interest of $825 issued under the Paycheck Protection Program. On February 25, 2021, the Company entered a promissory note agreement with its bank in exchange for $165,747 bearing an interest rate of 1.0% per annum. The loan was made pursuant to the Paycheck Protection Program under the Second Draw PPP Legislation after receiving confirmation from the SBA. The Paycheck Protection Program Flexibility Act requires that the funds be used to maintain the current number of employees as well as cover payroll-related costs, monthly mortgage or rent payments and utilities and not more than 40% can be expended on non-payroll-related costs. The applicable maturity date will be the maturity date as established by the SBA. If the SBA does not establish a maturity date or range of allowable maturity dates, the term will be five years. Interest expense for the Company’s notes payable was $376 and $2,323 for the three months ended March 31, 2021 and March 31, 2020, respectively. Accrued interest for the Company’s notes payable at March 31, 2021 and December 31, 2020 was $159 and $0, respectively, and is included in accrued expenses on the condensed consolidated balance sheets. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 – COMMITMENTS AND CONTINGENCIES Supplier Agreement MEP Consulting Engineers, Inc. On July 23, 2020, the Company entered into an Exclusive Supplier Agreement with MEP Consulting Engineers, Inc. (“MEP”) of Miami, FL. MEP engaged the Company as its sole and exclusive supplier for production of MEP’s proprietary “Hurricane Bar,” a BFRP reinforcing bar product owned by MEP. The agreement also provides MEP with exclusive distribution rights to the Company’s BasaFlexTM BFRP reinforcing bar and other Basanite products in Miami-Dade County. The agreement allows for MEP or its designated customers to place orders from time to time for up to the total value of $50,000,000 over the 5-year period. As compensation, MEP was provided the ability to exercise options to purchase a total of 5,000,000 restricted common shares of the Company, over the 5 years from the supplier agreement effective date, tied to sales performance. This option shall automatically expire after the end of the option period. An extension period is available through specific clauses in the agreement. To date, the compensation portion of the agreement has not been fully executed. CR Business Consultants, Inc. On October 22, 2020, the Company entered into an Exclusive Supplier Agreement with CR Business Consultants, Inc. (“CRBC”). CRBC agreed to utilize the Company as its exclusive supplier for all Basanite products, and the Company has granted CRBC exclusive distribution rights of the Company’s products in the Republic of Costa Rica and the and Republic of Panama. CRBC also has non-exclusive distribution rights in the Republic of El Salvador; Belize; the Republic of Guatemala; the Republic of Honduras; and the Republic of Nicaragua; Argentina, Plurinational State of Bolivia, Federative Republic of Brazil, Republic of Chile, Republic of Colombia, Republic of Ecuador, Cooperative Republic of Guyana, Republic of Paraguay, Republic of Peru, Republic of Suriname, Oriental Republic of Uruguay, Bolivarian Republic of Venezuela, and a part of France, French Guiana; and the Kingdom of the Netherlands; the Falkland; and the Republic of Trinidad and Tobago. Furthermore, CRBC can introduce additional customers to Basanite from other territories with no geographic restrictions. The agreement allows for CRBC or its designated customers to place orders from time to time for up to a total value of $50,000,000 over the 5-year period. As compensation, CRBC was provided the ability to exercise options to purchase a total of 5,000,000 restricted common shares of the Company, over the 5 years from the supplier agreement effective date, tied to sales performance. This option shall automatically expire after the end of the option period. An extension period is available through specific clauses in the agreement. Legal Matters In the ordinary course of operations, the Company may become a party to legal proceedings. Based upon information currently available, management believes that such legal proceedings, individually or in the aggregate, will not have a material adverse effect on the Company's business, financial condition, cash flows, or results of operations except as provided below. CalSTRS Judgement On March 31, 2014, the Company received a “Notice of Default” letter from legal counsel representing the California State Teachers Retirement System (“CalSTRS”) (the landlord for the Company’s office space) alerting that the Company was in default of its lease for failure to pay monthly rent for the office space located at 2400 East Commercial Boulevard, Suite 612, Fort Lauderdale, FL 33304. The letter demanded immediate payment of $41,937 for rent past due as of April 1, 2014. The Company had indicated in writing its intention to cooperate with the landlord while trying to resolve the matter. On February 11, 2015, the landlord, through its attorneys, filed a motion for summary judgment. The motion asked for $376,424 in unpaid rent, recovery of abated rents and tenant improvements and $12,442 in attorney’s costs incurred by the landlord. On April 22, 2015, the motion for unpaid rent, recovery of abated rents and tenant improvements and attorney’s costs was granted by the Circuit Court of the 17th Judicial Circuit in and for Broward County and the Company has reserved the entire judgement of $388,866. The total amount is accruing interest at the statutory rate of 4.75%. The accrued interest on the judgement at March 31, 2021 and December 31, 2020 is $109,815 and $105,260, respectively. RAW Materials Litigation On or about August 28, 2018, Raw Energy Materials Corp. filed an action for declaratory relief and breach of contract in Broward County, Florida, in the 17 th A mediation was scheduled on March 4, 2021 which resulted in an impasse. Negotiations were continued, and on April 14, 2021, Basanite, Inc. entered into a settlement and release agreement with RAW, LLC (“RAW”), Donald R. Smith, YellowTurtle Design LLC (“YellowTurtle”) and Elina B. Jenkins among others. The settlement agreement provides for, among other things, the following: (i) a dismissal of the legal action as to the above-referenced parties and their owners, agents, affiliated companies, successors and assigns, having Case Number 18-020596 (21) in the Seventeenth Judicial Circuit Court in and for Broward County, Florida (the “Litigation”) upon the Company’s timely purchase of the shares as set forth in the next paragraph below and (ii) mutual general releases for the above-referenced parties relating to the Litigation upon the Company’s timely purchase of the shares as set forth in the next paragraph below. Simultaneously with the execution of the settlement agreement settling the litigation in full and release of all claims among the parties, the Company entered into stock purchase agreements with both RAW and YellowTurtle to repurchase the 10,000,000 shares of the Company’s common stock held by RAW for $1,212,121 and the 6,500,000 shares of the Company’s common stock held by YellowTurtle for $787,879, or an aggregate purchase price of $2,000,000. If the purchase price is not paid on or before May 17, 2021, the purchase agreements and settlement agreement between the parties hereto shall become null and void, while RAW and YellowTurtle shall retain all of their above-referenced shares of common stock in the Company. To our knowledge, we are not currently subject to any legal proceedings. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' DEFICIT | NOTE 9 – STOCKHOLDERS’ DEFICIT On January 11, 2021, 600,000 shares were issued per the two consulting agreements entered on July 9, 2020 and October 16, 2020 for fundraising services. The value of the shares for both agreements is $174,000 and will be expensed over the renewable three-month term of the agreement. On January 26, 2021, an investor exercised 1,000,000 warrants for restricted common shares at a strike price of $0.1235 per share in exchange for $123,500. On January 26, 2021, the Company issued the 200,000 restricted common shares to the investor in exchange for the funds received and recorded as a subscription liability of $40,000 at December 31, 2020. On February 11, 2021, the Company issued 250,000 unrestricted common shares to an investor in exchange for $50,000. On February 12, 2021, upon the debt extinguishment and issuance of the amended note of $1,610,005, warrants were issued as compensation for the extension and a loss on extinguishment was generated in the amount of $3,686,123 for the fair value of the warrants. On March 29, 2021, an investor purchased 127,128 restricted common shares from the Company in exchange for $23,900. The restricted common stock had not been issued as of March 31, 2021 and therefore, is represented as a subscription liability. |
OPTIONS AND WARRANTS
OPTIONS AND WARRANTS | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
OPTIONS AND WARRANTS | NOTE 10 – OPTIONS AND WARRANTS Stock Options: The following table summarizes all option grants outstanding to consultants, directors and employees as of March 31, 2021 and December 31, 2020 and the related changes during these periods are presented below. March 31, December 31, Options outstanding and exercisable 4,502,500 4,542,500 Weighted-average exercise price $ 0.41 $ 0.41 Aggregate intrinsic value $ — 118,148 Weighted-average remaining contractual term (years) 3.37 3.86 The Company uses the “straight-line” attribution method for allocating compensation costs of each stock option over the requisite service period using the Black-Scholes Option Pricing Model to calculate the grant date fair value. During the three months ended March 31, 2021, 40,000 options were cancelled upon expiration. Stock Warrants: The following table summarizes all warrant grants outstanding to consultants, directors and employees as well as investors as of March 31, 2021 and December 31, 2020 and the related changes during these periods are presented below. March 31, December 31, Warrants outstanding and exercisable 52,920,378 38,920,378 Weighted-average exercise price $ 0.26 $ 0.27 Aggregate intrinsic value $ 2,095,500 $ 2,973,660 Weighted-average remaining contractual term (years) 3.65 3.37 During the three months ended March 31, 2021, 15,000,000 five-year warrants were issued. During the three months ended March 31, 2021, 1,000,000 warrants were exercised. During the three months ended March 31, 2021 and 2020, total stock-based compensation expense amounted to $165,010 and $0, respectively. |
RELATED PARTIES
RELATED PARTIES | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | NOTE 11 – RELATED PARTIES In addition to those transactions discussed in Note 6, the Company had the following related party transactions. Receipt of $300,000 for the future issuance of notes payable - related parties, represented as due to stockholders on the condensed consolidated statement of cash flows and detailed in Note 12 – Subsequent Events. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 12 – SUBSEQUENT EVENTS On April 2, 2021, the Company issued a promissory note with an investor in exchange for $200,000 bearing an interest rate of 18% per annum and payable in one year. The company also issued 2,000,000 common stock purchase warrants at an exercise price of $0.20 per share expiring in 5 years. On April 2, 2021, the Company issued a promissory note with Paul Sallarulo, a member of our Board of Directors, in exchange for $150,000 bearing an interest rate of 18% per annum and payable in one year. The company also issued 1,500,000 common stock purchase warrants at an exercise price of $0.20 per share expiring in 5 years. On April 2, 2021, the Company issued a promissory note with Michael V. Barbera, our Chairman of the Board, in exchange for $150,000 bearing an interest rate of 18% per annum and payable in one year. The company also issued 1,500,000 common stock purchase warrants at an exercise price of $0.20 per share expiring in 5 years. On April 9, 2021, the Company issued a promissory note with an investor in exchange for $50,000 bearing an interest rate of 18% per annum and payable in one year. The company also issued 500,000 common stock purchase warrants at an exercise price of $0.20 per share expiring in 5 years. On April 16, 2021, the Company issued a promissory note with an investor in exchange for $25,000 bearing an interest rate of 18% per annum and payable in one year. The company also issued 250,000 common stock purchase warrants at an exercise price of $0.25 per share expiring in 5 years. On April 16, 2021, the Company issued a promissory note with an investor in exchange for $20,000 bearing an interest rate of 18% per annum and payable in one year. The company also issued 200,000 common stock purchase warrants at an exercise price of $0.25 per share expiring in 5 years. On April 20, 2021, an investor purchased 45,662 restricted common shares from the Company in exchange for $10,000. The shares have not been issued as of the date of this report. On May 12, 2021, the Company extended an existing debt and newly issued a second amended and restated secured convertible promissory note to certain investors with a new principal balance of $1,689,746 bearing an interest rate of 20% per annum and fully payable in nine months. In consideration of the additional advance and the extension of the maturity date of the original note, the Company issued to the noteholders 7,500,000 five-year common stock warrants with an exercise price of $0.35. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates in Financial Statements | (A) Use of Estimates in Financial Statements The presentation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Stock-based compensation and stock awards related to convertible debt instruments are recognized based on the fair value of the awards granted. The fair value of each award or conversion feature is typically estimated on the grant date using the Black-Scholes pricing model. The Black-Scholes pricing model requires the input of highly subjective assumptions, including the fair value of the underlying common stock, the expected term of the option, the expected volatility of the price of our common stock, risk-free interest rates and the expected dividend yield of our common stock. The assumptions used to determine the fair value of the stock awards represent management’s best estimates. These estimates involve inherent |
Principles of Consolidation | (B) Principles of Consolidation The consolidated financial statements include the accounts of Basanite, Inc. and its wholly owned subsidiaries, Basanite Industries, LLC and Basalt America, LLC. All intercompany balances have been eliminated in consolidation. |
Cash | (C) Cash The Company considers all highly liquid temporary cash instruments with an original maturity of three months or less to be cash equivalents. The Company places its cash, cash equivalents and restricted cash on deposit with financial institutions in the United States, which are insured by the Federal Deposit Insurance Company ("FDIC") up to $250,000. The Company's credit risk in the event of failure of these financial institutions is represented by the difference between the FDIC limit and the total amounts on deposit. Management monitors the financial institutions credit worthiness in conjunction with balances on deposit to minimize risk. The Company from time to time may have amounts on deposit in excess of the insured limits. |
Inventories | (D) Inventories The Company’s inventories consist of raw materials, work in process and finished goods, both purchased and manufactured. Inventories are stated at the lower of cost or net realizable value. Cost is determined on the first-in, first-out basis. Raw materials inventory consists primarily of basalt fiber and other necessary elements to produce the basalt rebar. On a quarterly basis, the Company analyzes its inventory levels and records allowances for inventory that has become obsolete and inventory that has a cost basis in excess of the expected net realizable value. The Company’s inventory at March 31, 2021 December 31, 2020 was comprised of: March 31, December 31, 2020 (Unaudited) Finished goods $ 465,688 $ 305,550 Work in process 32,487 35,286 Raw materials 37,810 105,739 Total inventory $ 535,985 $ 446,575 |
Fixed assets | (E) Fixed assets Fixed assets consist of the following: March 31, December 31, 2020 (Unaudited) Computer equipment $ 15,780 $ 15,780 Machinery 675,236 667,536 Leasehold improvements 161,579 161,579 Office furniture and equipment 71,292 71,292 Land improvements 7,270 7,270 Website development 2,500 2,500 Construction in process 359,153 234,950 Total fixed assets 1,292,810 1,160,907 Accumulated depreciation (172,581 ) (140,872 ) Total fixed assets, net $ 1,120,229 $ 1,020,035 Depreciation expense for the three months ended March 31, 2021 and 2020 was $31,709 and $25,828, respectively. |
Loss Per Share | (G) Loss Per Share The basic loss per share is calculated by dividing the Company’s net loss available to common shareholders by the weighted average number of common shares during the period. The diluted loss per share is calculated by dividing the Company’s net loss by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. The following are potentially dilutive shares not included in the loss per share computation: March 31, December 31, 2020 (Unaudited) Options 4,502,500 4,542,500 Warrants 52,920,378 38,920,378 Convertible shares 165,114,331 112,233,406 222,537,209 155,696,284 |
Stock-Based Compensation | (H) Stock-Based Compensation The Company recognizes compensation costs to employees under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Compensation – Stock Compensation. Under FASB ASC Topic 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the grant. The Company entered into a consulting agreement on July 9, 2020 for services in exchange for restricted common stock as compensation for the consulting services. The term of the agreement is for six months with the option for renewal quarterly. Upon execution of the agreement, 600,000 shares were due within 5 days of execution. The execution date fair value of the shares was $0.29 per share or $174,000. If the Company agrees to renew each quarter, an additional 350,000 shares are to be issued per quarter. On January 9, 2021, the Company agreed to renew another quarter and issued 350,000 restricted common shares. The execution date fair value of the shares was $0.29 per share or $101,500. The Company entered into a consulting agreement on October 13, 2020 for services in exchange for restricted common stock as compensation for the consulting services. The term of the agreement is for six months with the option for renewal quarterly. Upon execution of the agreement, no shares were due to be issued. If the Company agrees to renew each quarter, 250,000 shares are to be issued per quarter. On January 9, 2021, the Company agreed to renew another quarter and issued 250,000 restricted common shares. The execution date fair value of the shares was $0.29 per share or $72,500. The Company recognized $165,010 in stock-based compensation as of March 31, 2021. As of March 31, 2021, $17,400 of stock was issued for the consulting agreements but not earned as compensation and is included in prepaid expenses on the condensed consolidated balance sheet. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Inventory | The Company’s inventory at March 31, 2021 and December 31, 2020 was comprised of: March 31, December 31, 2020 (Unaudited) Finished goods $ 465,688 $ 305,550 Work in process 32,487 35,286 Raw materials 37,810 105,739 Total inventory $ 535,985 $ 446,575 |
Schedule of Fixed Assets | Fixed assets consist of the following: March 31, December 31, 2020 (Unaudited) Computer equipment $ 15,780 $ 15,780 Machinery 675,236 667,536 Leasehold improvements 161,579 161,579 Office furniture and equipment 71,292 71,292 Land improvements 7,270 7,270 Website development 2,500 2,500 Construction in process 359,153 234,950 Total fixed assets 1,292,810 1,160,907 Accumulated depreciation (172,581 ) (140,872 ) Total fixed assets, net $ 1,120,229 $ 1,020,035 |
Schedule of Dilutive Shares Not Included in Loss Per Share Computation | The following are potentially dilutive shares not included in the loss per share computation: March 31, December 31, 2020 (Unaudited) Options 4,502,500 4,542,500 Warrants 52,920,378 38,920,378 Convertible shares 165,114,331 112,233,406 222,537,209 155,696,284 |
OPERATING LEASE (Tables)
OPERATING LEASE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Lessee Disclosure [Abstract] | |
Schedule of Maturity of Operating Lease Liability | The future minimum lease payments to be made under the operating lease as of March 31, 2021 are: 2021 $ 313,558 2022 427,484 2023 440,308 2024 110,884 Total minimum lease payments 1,292,234 Discount (259,780 ) Operating lease liability $ 1,032,454 |
OPTIONS AND WARRANTS (Tables)
OPTIONS AND WARRANTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Summary of Options and Warrants Assumptions to Estimate Fair Value of Options Granted | The following table summarizes all option grants outstanding to consultants, directors and employees as of March 31, 2021 and December 31, 2020 and the related changes during these periods are presented below. March 31, December 31, Options outstanding and exercisable 4,502,500 4,542,500 Weighted-average exercise price $ 0.41 $ 0.41 Aggregate intrinsic value $ — 118,148 Weighted-average remaining contractual term (years) 3.37 3.86 |
Stock Warrants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Summary of Options and Warrants Assumptions to Estimate Fair Value of Options Granted | The following table summarizes all warrant grants outstanding to consultants, directors and employees as well as investors as of March 31, 2021 and December 31, 2020 and the related changes during these periods are presented below. March 31, December 31, Warrants outstanding and exercisable 52,920,378 38,920,378 Weighted-average exercise price $ 0.26 $ 0.27 Aggregate intrinsic value $ 2,095,500 $ 2,973,660 Weighted-average remaining contractual term (years) 3.65 3.37 |
ORGANIZATION, NATURE OF BUSIN_2
ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accumulated deficit | $ 34,315,592 | $ 29,643,387 | |
Working capital deficiency | 2,615,036 | 1,901,875 | |
Net cash used in operations | (920,915) | $ (7,731) | |
Cash | $ 355,759 | $ 259,505 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Inventory) (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Finished goods | $ 465,688 | $ 305,550 |
Work in process | 32,487 | 35,286 |
Raw materials | 37,810 | 105,739 |
Total inventory | $ 535,985 | $ 446,575 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Fixed assets) (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | $ 1,292,810 | $ 1,160,907 |
Accumulated depreciation | (172,581) | (140,872) |
Total fixed assets, net | 1,120,229 | 1,020,035 |
Computer equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | 15,780 | 15,780 |
Machinery [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | 675,236 | 667,536 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | 161,579 | 161,579 |
Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | 71,292 | 71,292 |
Land improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | 7,270 | 7,270 |
Website development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | 2,500 | 2,500 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | $ 359,153 | $ 234,950 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Dilutive Shares Not Included in Loss Per Share Computation) (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive shares not included in loss per share computation | 222,537,209 | 155,696,284 |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive shares not included in loss per share computation | 4,502,500 | 4,542,500 |
Stock Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive shares not included in loss per share computation | 52,920,378 | 38,920,378 |
Convertible Debt Securities [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive shares not included in loss per share computation | 165,114,331 | 112,233,406 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Jan. 09, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Oct. 13, 2020 | Jul. 09, 2020 |
Cash insured amount | $ 250,000 | ||||
Depreciation expense | 31,709 | $ 25,828 | |||
Stock based compensation | 165,010 | ||||
Consulting Agreement [Member] | |||||
Shares due | 250,000 | 600,000 | |||
Restricted common shares issued | 350,000 | ||||
Fair falue of shares | $ 0.29 | $ 0.29 | |||
Stock based compensation | $ 17,400 | ||||
Shares to be issued | 350,000 | ||||
Fair value of restricted common shares issued | $ 101,500 | ||||
Consulting Agreement 1[Member] | |||||
Restricted common shares issued | 250,000 | ||||
Fair falue of shares | $ 0.29 | ||||
Fair value of restricted common shares issued | $ 72,500 |
OPERATING LEASE (Schedule of Fu
OPERATING LEASE (Schedule of Future Minimum Lease Payments under Operating Lease) (Details) | Mar. 31, 2021USD ($) |
Operating leases | |
2021 | $ 313,558 |
2022 | 427,484 |
2023 | 440,308 |
2024 | 110,884 |
Total minimum lease payments | 1,292,234 |
Discount | (259,780) |
Operating lease liability | $ 1,032,454 |
OPERATING LEASE (Details Narrat
OPERATING LEASE (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |
Mar. 25, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | |
Lessee Disclosure [Abstract] | |||
Weighted average discount rate | 15.00% | ||
Operating lease rent expense | $ 106,919 | $ 107,589 | |
Lease term | 3 years | ||
Base rent obligation | $ 33,825 |
NOTES PAYABLE - CONVERTIBLE (De
NOTES PAYABLE - CONVERTIBLE (Details Narrative) - USD ($) | Aug. 03, 2020 | Feb. 16, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||||
Note payable - convertible | $ 0 | $ 10,000 | |||
Par value of share | $ 0.001 | $ 0.001 | |||
Repayments of convertible debt | $ 35,000 | $ 102,500 | |||
Proceeds from convertible debt | 500,000 | 50,000 | |||
Note Payable related party - convertible [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest expense | 161 | $ 22,906 | |||
Accrued interest | $ 0 | $ 760 | |||
Unsecured convertible promissory note with Investor [Member] | |||||
Debt Instrument [Line Items] | |||||
Conversion price | $ 0.01 | ||||
Interest rate | 18.00% | ||||
Par value of share | $ 0.001 | ||||
Repayments of convertible debt | $ 10,000 | ||||
Proceeds from convertible debt | $ 500,000 | ||||
Accrued interest paid | $ 1,007 | ||||
Debt maturity | Feb. 3, 2021 | ||||
Amount of debt conversion | $ 10,000 |
NOTES PAYABLE - CONVERTIBLE -_2
NOTES PAYABLE - CONVERTIBLE - RELATED PARTY (Details Narrative) - USD ($) | May 12, 2021 | Feb. 12, 2021 | Aug. 03, 2020 | Feb. 16, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||||||
Notes payable - convertible - related party | $ 1,610,005 | $ 1,025,000 | |||||
Proceeds from convertible debt | $ 500,000 | $ 50,000 | |||||
Warrants term | 5 years | ||||||
Repayments of convertible debt | $ 35,000 | 102,500 | |||||
Loss on extinguishment | (3,686,123) | ||||||
Convertible promissory note with Investors [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from convertible debt | $ 3,000,000 | $ 500,000 | |||||
Conversion price | $ 0.01 | ||||||
Warrants term | 5 years | 5 years | |||||
Warrants issued | 7,500,000 | 15,000,000 | |||||
Exercise price of warrants | $ 0.35 | $ 0.35 | |||||
Interest rate | 20.00% | 20.00% | 20.00% | ||||
Debt term | 9 months | 3 months | 6 months | ||||
Debt maturity | Feb. 12, 2022 | Nov. 12, 2021 | Feb. 3, 2021 | ||||
Amount of debt conversion | $ 1,000,000 | ||||||
Debt principal amount | $ 1,689,746 | $ 1,610,005 | 750,000 | ||||
Accrued interest paid | 79,742 | ||||||
Repayments of convertible debt | $ 1,610,005 | ||||||
Convertible promissory note with Michael V. Barbera [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from convertible debt | $ 500,000 | ||||||
Conversion price | $ 0.01 | ||||||
Interest rate | 18.00% | ||||||
Debt term | 6 months | ||||||
Debt maturity | Feb. 3, 2021 | ||||||
Amount of debt conversion | $ 25,000 | ||||||
Accrued interest paid | $ 2,302 | ||||||
Repayments of convertible debt | $ 25,000 | ||||||
Loss on extinguishment | $ 3,686,136 | ||||||
Note Payable related party - convertible [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Accrued interest | 41,184 | $ 86,574 | |||||
Interest expense | $ 66,916 | $ 0 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | Jan. 11, 2021 | Jan. 04, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Mar. 30, 2021 | Feb. 25, 2021 | Dec. 31, 2020 | May 01, 2020 |
Debt Instrument [Line Items] | ||||||||
Notes payable | $ 175,275 | $ 128,021 | ||||||
Proceeds from convertible debt | $ 500,000 | $ 50,000 | ||||||
Shares issued | 600,000 | |||||||
Warrants term | 5 years | |||||||
PPP | ||||||||
Debt Instrument [Line Items] | ||||||||
Promissory note forgave | $ 123,318 | |||||||
Accrued interest forgave | $ 825 | |||||||
Notes Payable | ||||||||
Debt Instrument [Line Items] | ||||||||
Accrued interest | $ 159 | $ 0 | ||||||
Interest expense | 376 | $ 2,323 | ||||||
Promissory Note Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate | 1.00% | |||||||
Debt principal amount | $ 165,747 | |||||||
Promissory Note Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate | 1.00% | |||||||
Debt principal amount | $ 123,318 | |||||||
Financing Arrangements | ||||||||
Debt Instrument [Line Items] | ||||||||
Notes payable | $ 9,528 | |||||||
Interest rate | 9.636% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||||
May 17, 2021 | Oct. 22, 2020 | Jul. 23, 2020 | Mar. 31, 2021 | May 12, 2021 | Dec. 31, 2020 | Apr. 22, 2015 | |
Other Commitments [Line Items] | |||||||
Default amount, payable for settlement | $ 41,937 | ||||||
Accelerated rent and damages | 376,424 | ||||||
Attorney costs | $ 12,442 | ||||||
Percentage of accrued interest rate | 4.75% | ||||||
Accrued interest on judgement | $ 109,815 | $ 105,260 | $ 388,866 | ||||
Options to purchase restricted common shares | 15,000,000 | ||||||
Subsequent Event [Member] | |||||||
Other Commitments [Line Items] | |||||||
Options to purchase restricted common shares | 7,500,000 | ||||||
Purchase Price | $ 2,000,000 | ||||||
YellowTurtle | Subsequent Event [Member] | |||||||
Other Commitments [Line Items] | |||||||
Common stock repurchased, shares | 6,500,000 | ||||||
Common stock repurchased, value | $ 787,879 | ||||||
RAW | Subsequent Event [Member] | |||||||
Other Commitments [Line Items] | |||||||
Common stock repurchased, shares | 10,000,000 | ||||||
Common stock repurchased, value | $ 1,212,121 | ||||||
Agreement with MEP [Member] | |||||||
Other Commitments [Line Items] | |||||||
Agreement amount | $ 50,000,000 | ||||||
Agreement period | 5 years | ||||||
Options to purchase restricted common shares | 5,000,000 | ||||||
Options to purchase restricted common shares, period | 5 years | ||||||
Agreement with CRBC [Member] | |||||||
Other Commitments [Line Items] | |||||||
Agreement amount | $ 50,000,000 | ||||||
Agreement period | 5 years | ||||||
Options to purchase restricted common shares | 5,000,000 | ||||||
Options to purchase restricted common shares, period | 5 years |
STOCKHOLDERS' DEFICIT (Details
STOCKHOLDERS' DEFICIT (Details Narrative) - USD ($) | Feb. 12, 2021 | Feb. 11, 2021 | Jan. 11, 2021 | Mar. 29, 2021 | Jan. 26, 2021 | Mar. 31, 2021 | Mar. 31, 2020 |
Class of Stock [Line Items] | |||||||
Shares issued | 600,000 | ||||||
Shares issued, value | $ 174,000 | $ 90,000 | |||||
Number of warrants exercised | 15,000,000 | ||||||
Loss on extinguishment | $ (3,686,123) | ||||||
Investor [Member] | |||||||
Class of Stock [Line Items] | |||||||
Loss on extinguishment | $ 3,686,123 | ||||||
Investor [Member] | Restricted Common Shares [Member] | |||||||
Class of Stock [Line Items] | |||||||
Shares issued | 127,128 | 200,000 | |||||
Shares issued, value | $ 23,900 | ||||||
Number of warrants exercised | 1,000,000 | ||||||
Proceeds from exercise of warrants | $ 123,500 | ||||||
Conversion Price | $ 0.1235 | ||||||
Investor [Member] | Unestricted Common Shares [Member] | |||||||
Class of Stock [Line Items] | |||||||
Shares issued | 250,000 | ||||||
Shares issued, value | $ 50,000 |
OPTIONS AND WARRANTS (Summary o
OPTIONS AND WARRANTS (Summary of Options and Warrants Grants to Consultants, Directors and Employees) (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options and Warrants outstanding and exercisable | 4,502,500 | 4,542,500 |
Weighted-average exercise price | $ 0.41 | $ 0.41 |
Aggregate intrinsic value | $ 0 | $ 118,148 |
Weighted-average remaining contractual term (years) | 3 years 4 months 13 days | 3 years 10 months 10 days |
Stock Warrants [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options and Warrants outstanding and exercisable | 52,920,378 | 38,920,378 |
Weighted-average exercise price | $ 0.26 | $ 0.27 |
Aggregate intrinsic value | $ 2,095,500 | $ 2,973,660 |
Weighted-average remaining contractual term (years) | 3 years 7 months 24 days | 3 years 4 months 13 days |
OPTIONS AND WARRANTS (Details N
OPTIONS AND WARRANTS (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Options cancelled | 40,000 | |
Warrants issued | 15,000,000 | |
Warrants term | 5 years | |
Warrant exercised | 1,000,000 | |
Stock-based compensation expense | $ 165,010 | $ 0 |
RELATED PARTIES (Details Narrat
RELATED PARTIES (Details Narrative) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Related Party Transactions [Abstract] | |
Receipt of future issuance of notes payable - related parties | $ 300,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | May 12, 2021 | Apr. 09, 2021 | Apr. 02, 2021 | Jan. 11, 2021 | Apr. 20, 2021 | Apr. 16, 2021 | Mar. 31, 2021 |
Subsequent Event [Line Items] | |||||||
Warrants issued | 15,000,000 | ||||||
Warrants term | 5 years | ||||||
Shares issued | 600,000 | ||||||
Shares issued, value | $ 174,000 | $ 90,000 | |||||
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt principal amount | $ 1,689,746 | ||||||
Interest rate | 20.00% | ||||||
Debt term | 9 months | ||||||
Warrants issued | 7,500,000 | ||||||
Warrants term | 5 years | ||||||
Exercise price of warrants | $ 0.35 | ||||||
Subsequent Event [Member] | Investor [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt principal amount | $ 50,000 | $ 200,000 | $ 25,000 | ||||
Interest rate | 18.00% | 18.00% | 18.00% | ||||
Debt term | 1 year | 1 year | 1 year | ||||
Warrants issued | 500,000 | 2,000,000 | 250,000 | ||||
Warrants term | 5 years | 5 years | 5 years | ||||
Exercise price of warrants | $ 0.20 | $ .20 | $ 0.20 | ||||
Shares issued | 45,662 | ||||||
Shares issued, value | $ 10,000 | ||||||
Subsequent Event [Member] | Paul Sallarulo [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt principal amount | $ 150,000 | ||||||
Interest rate | 18.00% | ||||||
Debt term | 1 year | ||||||
Warrants issued | 1,500,000 | ||||||
Warrants term | 5 years | ||||||
Exercise price of warrants | $ 0.20 | ||||||
Subsequent Event [Member] | Michael V. Barbera [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt principal amount | $ 150,000 | ||||||
Interest rate | 18.00% | ||||||
Debt term | 1 year | ||||||
Warrants issued | 1,500,000 | ||||||
Warrants term | 5 years | ||||||
Exercise price of warrants | $ 0.20 | ||||||
Subsequent Event [Member] | Investor [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt principal amount | $ 20,000 | ||||||
Interest rate | 18.00% | ||||||
Debt term | 1 year | ||||||
Warrants issued | 200,000 | ||||||
Warrants term | 5 years | ||||||
Exercise price of warrants | $ 0.20 |