Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Jun. 26, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | Transportation & Logistics Systems, Inc. | |
Entity Central Index Key | 0001463208 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 499,900,491 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash | $ 32,626 | $ 50,026 |
Accounts receivable, net | 1,063,225 | 963,771 |
Prepaid expenses and other current assets | 427,394 | 1,246,555 |
Total Current Assets | 1,523,245 | 2,260,352 |
OTHER ASSETS: | ||
Security deposit | 201,250 | 76,500 |
Property and equipment, net | 686,728 | 240,406 |
Right of use assets, net | 1,705,996 | 1,750,430 |
Total Other Assets | 2,593,974 | 2,067,336 |
TOTAL ASSETS | 4,117,219 | 4,327,688 |
CURRENT LIABILITIES: | ||
Convertible notes payable, net of put premium of $311,660 and $385,385 and debt discounts of $3,162,352 and $2,210,950, respectively | 5,647,429 | 3,634,344 |
Notes payable, current portion, net of debt discount of $11,318 and $762,112, respectively | 1,733,440 | 2,425,003 |
Notes payable - related party | 500,000 | 500,000 |
Accounts payable | 2,138,152 | 1,517,082 |
Accrued expenses | 692,176 | 627,990 |
Insurance payable | 2,286,593 | 2,948,261 |
Contingency liability | 440,000 | 440,000 |
Lease liabilities, current portion | 341,483 | 333,126 |
Derivative liability | 13,978,061 | 2,135,939 |
Due to related parties | 269,884 | 325,445 |
Accrued compensation and related benefits | 1,174,844 | 886,664 |
Total Current Liabilities | 29,202,062 | 15,773,854 |
LONG-TERM LIABILITIES: | ||
Notes payable, net of current portion | 361,680 | |
Lease liabilities, net of current portion | 1,393,038 | 1,440,258 |
Total Long-term Liabilities | 1,754,718 | 1,440,258 |
Total Liabilities | 30,956,780 | 17,214,112 |
Commitments and Contingencies (See Note 9) | ||
SHAREHOLDERS' DEFICIT: | ||
Common stock, par value $0.001 per share; authorized 500,000,000 shares; 17,123,009 and 11,832,603 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 17,123 | 11,833 |
Common stock issuable, par value $0.001 per share; 25,000 and 25,000 shares | 25 | 25 |
Additional paid-in capital | 55,906,801 | 47,715,878 |
Accumulated deficit | (82,765,210) | (60,615,860) |
Total Shareholders' Deficit | (26,839,561) | (12,886,424) |
Total Liabilities and Shareholders' Deficit | 4,117,219 | 4,327,688 |
Series A Convertible Preferred Stock [Member] | ||
SHAREHOLDERS' DEFICIT: | ||
Preferred stock, par value $0.001; authorized 10,000,000 shares: | ||
Series B Convertible Preferred Stock [Member] | ||
SHAREHOLDERS' DEFICIT: | ||
Preferred stock, par value $0.001; authorized 10,000,000 shares: | $ 1,700 | $ 1,700 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 17,123,009 | 11,832,603 |
Common stock, shares outstanding | 17,123,009 | 11,832,603 |
Common stock issuable, par value | $ 0.001 | $ 0.001 |
Common stock issuable, shares | 25,000 | 25,000 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 4,000,000 | 4,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Series B Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,700,000 | 1,700,000 |
Preferred stock, shares issued | 1,700,000 | 1,700,000 |
Preferred stock, shares outstanding | 1,700,000 | 1,700,000 |
Preferred stock, liquidation value | $ 1,700 | $ 1,700 |
Convertible Notes Payable [Member] | ||
Debt put premium | 311,660 | 385,385 |
Debt net of debt discount | 3,162,352 | 2,210,950 |
Notes Payable [Member] | ||
Debt net of debt discount | $ 11,318 | $ 762,112 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
REVENUES | $ 8,635,060 | $ 5,803,207 |
COST OF REVENUES | 7,855,749 | 5,549,702 |
GROSS PROFIT | 779,311 | 253,505 |
OPERATING EXPENSES: | ||
Compensation and related benefits | 742,045 | 4,108,544 |
Legal and professional fees | 414,810 | 504,840 |
Rent | 164,350 | 98,831 |
General and administrative expenses | 245,283 | 665,332 |
Total Operating Expenses | 1,566,488 | 5,377,547 |
LOSS FROM OPERATIONS | (787,177) | (5,124,042) |
OTHER (EXPENSES) INCOME: | ||
Interest expense | (3,046,727) | (707,065) |
Interest expense - related parties | (107,138) | (539,888) |
Gain on debt extinguishment, net | 275,034 | 93,871 |
Other income | 67,831 | |
Derivative gain (expense) | 144,839 | (13,384,260) |
Total Other (Expenses) Income | (2,666,161) | (14,537,342) |
LOSS FROM CONTINUING OPERATIONS | (3,453,338) | (19,661,384) |
INCOME FROM DISCONTINUED OPERATIONS: | ||
Income from discontinued operations | 13,661 | |
NET LOSS | (3,453,338) | (19,647,723) |
Deemed dividend related to ratchet adjustment | (18,696,012) | |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (22,149,350) | $ (19,647,723) |
NET LOSS PER COMMON SHARE - BASIC AND DILUTED | ||
Net loss from continuing operations | $ (1.79) | $ (3.76) |
Income from discontinued operations | 0 | 0 |
Net loss per common share - basic and diluted | $ (1.79) | $ (3.76) |
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING: | ||
Basic and diluted | 12,353,129 | 5,229,764 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Shareholders' Deficit (Unaudited) - USD ($) | Preferred Stock Series A [Member] | Preferred Stock Series B [Member] | Common Stock [Member] | Common Stock Issuable [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 4,000 | $ 4,220 | $ 7,477,422 | $ (15,222,936) | $ (7,737,294) | ||
Balance, shares at Dec. 31, 2018 | 4,000,000 | 4,220,837 | |||||
Warrants issued in connection with debt | 63,581 | 63,581 | |||||
Cumulative effect adjustment for change in derivative accounting | 453,086 | 453,086 | |||||
Shares issued for services | $ 2,671 | 2,748,137 | 2,750,808 | ||||
Shares issued for services, shares | 2,670,688 | ||||||
Net loss | (19,647,723) | (19,647,723) | |||||
Balance at Mar. 31, 2019 | $ 4,000 | $ 6,891 | 10,289,140 | (34,417,573) | (24,117,542) | ||
Balance, shares at Mar. 31, 2019 | 4,000,000 | 6,891,525 | |||||
Balance at Dec. 31, 2019 | $ 1,700 | $ 11,833 | $ 25 | 47,715,878 | (60,615,860) | (12,886,424) | |
Balance, shares at Dec. 31, 2019 | 1,700,000 | 11,832,603 | 25,000 | ||||
Reduction of put premium upon conversion | 73,725 | 73,725 | |||||
Common stock issued for debt conversion | $ 5,290 | 336,229 | 341,519 | ||||
Common stock issued for debt conversion, shares | 5,290,406 | ||||||
Beneficial conversion effect related to debt conversions | 172,720 | 172,720 | |||||
Relative fair value of warrants issued in connection with convertible debt | 262,872 | 262,872 | |||||
Accretion of stock-based compensation | 31,250 | 31,250 | |||||
Reclassification of warrants from equity to derivative liabilities | (11,381,885) | (11,381,885) | |||||
Deemed dividend related to price protection | 18,696,012 | (18,696,012) | |||||
Net loss | (3,453,338) | (3,453,338) | |||||
Balance at Mar. 31, 2020 | $ 1,700 | $ 17,123 | $ 25 | $ 55,906,801 | $ (82,765,210) | $ (26,839,561) | |
Balance, shares at Mar. 31, 2020 | 1,700,000 | 17,123,009 | 25,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (3,453,338) | $ (19,647,723) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization expense | 14,188 | 308,816 | |
Amortization of debt discount to interest expense | 1,359,388 | 1,071,272 | |
Amortization of debt discount to interest expense - related party | 21,383 | ||
Stock-based compensation and consulting fees | 31,250 | 2,750,808 | |
Interest expense related to debt default | 1,387,785 | ||
Derivative (income) expense | (144,839) | 13,384,260 | |
Non-cash portion of gain on extinguishment of debt, net | (327,584) | (93,871) | |
Rent expense | 5,571 | 14,056 | |
Loss on disposal of property and equipment | 47,022 | ||
Change in operating assets and liabilities: | |||
Accounts receivable | (99,454) | (429,650) | |
Prepaid expenses and other current assets | 819,161 | (90,449) | |
Assets of discontinued operations | (86,379) | ||
Security deposit | (124,750) | (34,350) | |
Accounts payable and accrued expenses | 796,036 | 526,330 | |
Insurance payable | (661,668) | (15,058) | |
Liabilities of discontinued operations | 46,089 | ||
Accrued compensation and related benefits | 288,180 | 243,466 | |
NET CASH USED IN OPERATING ACTIVITIES | (110,074) | (1,983,978) | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of property and equipment | (460,510) | (51,256) | |
Proceeds from sale of property and equipment | 81,000 | ||
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES | (460,510) | 29,744 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from convertible notes payable - related party | 500,000 | ||
Proceeds from convertible notes payable | 1,860,000 | ||
Repayment of convertible notes payable | (159,988) | (273,585) | |
Net proceeds from notes payable | 1,033,510 | 3,521,120 | |
Repayment of notes payable | (2,124,777) | (2,033,973) | |
Net proceeds from notes payable - related party | 200,000 | ||
Repayment of notes payable - related party | (220,000) | ||
Net (repayments) proceeds from related parties | (55,561) | 28,815 | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 553,184 | 1,722,377 | |
NET DECREASE IN CASH | (17,400) | (231,857) | |
CASH, beginning of period | 50,026 | 296,196 | $ 296,196 |
CASH, end of period | 32,626 | 64,339 | $ 50,026 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||
Interest | 741,627 | 778,399 | |
Income taxes | |||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||
Debt discounts recorded | 262,893 | 1,222,986 | |
Increase in derivative liability and debt discount | 1,267,473 | ||
Increase in right of use asset and lease liability | 631,723 | ||
Conversion of debt and accrued interest for common stock | 341,518 | ||
Reclassification of accrued interest to debt | 80,155 | ||
Decrease in put premium and paid-in capital | 73,725 | ||
Reclassification of warrant value from equity to derivative liabilities | 11,381,885 | ||
Deemed dividend related to price protection | $ 18,696,012 |
Organization and Business Opera
Organization and Business Operations | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Operations | NOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS Transportation and Logistics Systems, Inc. (“ TLSS Company On March 30, 2017 (the “ Closing Date Share Exchange Agreement Reverse Merger On June 18, 2018 (the “ Acquisition Date Prime EFS SPA On July 24, 2018, the Company formed Shypdirect LLC (“ Shypdirect On June 19, 2020, Amazon Logistics, Inc. (“Amazon”) notified Prime EFS in writing that Amazon does not intend to renew its Delivery Service Partner (DSP) Agreement with Prime EFS when that agreement expires (see Note 13 – Subsequent Events). TLSS and its wholly-owned subsidiaries, Prime EFS and Shypdirect are hereafter referred to as the “Company”. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Basis of Presentation | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION Basis of presentation and principles of consolidation The condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and disclosures necessary for comprehensive presentation of financial position, results of operations or cash flow. However, these unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these unaudited interim condensed consolidated financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2019, and notes thereto included in the Company’s annual report on Form 10-K, filed on May 29, 2020. The Company follows the same accounting policies in the preparation of its annual and interim reports. The results of operations in interim periods are not necessarily an indication of operating results to be expected for the full year. The unaudited condensed consolidated financial statements of the Company include the accounts of TLSS and its wholly owned subsidiaries, Save On (through April 30, 2019), Prime EFS and Shypdirect. All intercompany accounts and transactions have been eliminated in consolidation. On May 1, 2019, the Company entered into a Share Exchange Agreement with Save On and Steven Yariv, whereby the Company returned all of the stock of Save On to Steven Yariv in exchange for Mr. Yariv conveying 1,000,000 shares of common stock of the Company back to the Company. Pursuant to Accounting Standard Codification (“ASC”) 205-20-45, the financial statement in which net income or loss of a business entity is reported shall report the results of operations of the discontinued operation in the period in which a discontinued operation either has been disposed of or is classified as held for sale. Accordingly, beginning in the second quarter of 2019, the period that Save On was disposed of, the Company reflects Save On as a discontinued operation and such presentation is retroactively applied to all periods presented in the accompanying condensed consolidated financial statements. Going concern The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. As reflected in the accompanying condensed consolidated financial statements, for the three months ended March 31, 2020, the Company had a net loss of $3,453,338 and net cash used in operations was $110,074. Additionally, the Company had an accumulated deficit, shareholders’ deficit, and a working capital deficit of $82,765,210, $26,839,561 and $27,678,817, respectively, at March 31, 2020. Furthermore, the Company failed to make required payments of principal and interest on certain of its convertible debt instruments and notes payable (see Note 6). On June 19, 2020, Amazon Logistics, Inc. (“Amazon”) notified Prime EFS in writing that Amazon does not intend to renew its Delivery Service Partner (DSP) Agreement with Prime EFS when that agreement expires (see Note 13 – Subsequent Events). It is management’s opinion that these factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. In April 2020, the Company’s subsidiaries, Prime EFS and Shypdirect, entered into Paycheck Protection Program promissory notes with M&T Bank in the aggregate amount of $3,446,152 (see Note 13). Management cannot provide assurance that the Company will ultimately achieve profitable operations, become cash flow positive, or raise additional debt and/or equity capital. The Company is seeking to raise capital through additional debt and/or equity financings to fund its operations in the future. Although the Company has historically raised capital from sales of common shares and from the issuance of convertible promissory notes and notes payable, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail its operations. These consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Use of estimates The preparation of the condensed consolidated financial statements, in accordance with U.S. GAAP 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates included in the accompanying unaudited condensed consolidated financial statements and footnotes include the valuation of accounts receivable, the useful life of property and equipment, the valuation of intangible assets, the valuation of right of use assets and related liabilities, assumptions used in assessing impairment of long-lived assets, estimates of current and deferred income taxes and deferred tax valuation allowances, the fair value of non-cash equity transactions, the valuation of derivative liabilities, and the value of claims against the Company. Fair value of financial instruments The Financial Accounting Standards Board (“FASB”) issued ASC 820 — Fair Value Measurements and Disclosures , The three levels of the fair value hierarchy are as follows: ● Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. ● Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. ● Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The Company measures certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at March 31, 2020 and December 31, 2019: At March 31, 2020 At December 31, 2019 Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Derivative liabilities — — $ 13,978,061 — — $ 2,135,939 A roll forward of the level 3 valuation financial instruments is as follows: For the Three Months ended For the Three Months ended Balance at beginning of period $ 2,135,939 $ 7,888,684 Initial valuation of derivative liabilities included in debt discount 1,267,474 - Initial valuation of derivative liabilities included in derivative expense 13,336,234 - Gain on extinguishment of debt related to repayment/conversion of debt (662,398 ) (246,111 ) Reclassification of warrants from equity to derivative liabilities 11,381,885 - Cumulative effect adjustment for change in derivative accounting - (838,471 ) Change in fair value included in derivative (gain) expense (13,481,073 ) 13,384,260 Balance at end of period $ 13,978,061 $ 20,188,362 The Company accounts for its derivative financial instruments, consisting of certain conversion options embedded in our convertible instruments and warrants, at fair value using level 3 inputs. The Company determined the fair value of these derivative liabilities using the Black-Scholes option pricing model, binomial lattice models, or other accepted valuation practices. When determining the fair value of its financial assets and liabilities using these methods, the Company is required to use various estimates and unobservable inputs, including, among other things, expected terms of the instruments, expected volatility of its stock price, expected dividends, and the risk-free interest rate. Changes in any of the assumptions related to the unobservable inputs identified above may change the fair value of the instrument. Increases in expected term, anticipated volatility and expected dividends generally result in increases in fair value, while decreases in the unobservable inputs generally result in decreases in fair value. ASC 825-10 “ Financial Instruments The carrying amounts reported in the condensed consolidated balance sheets for cash, accounts receivable, accounts payable and accrued expenses approximate their fair values based on the short-term maturity of these instruments. The carrying amount of the Company’s convertible notes payable and promissory note obligations approximate fair value, as the terms of these instruments are consistent with terms available in the market for instruments with similar risk. Cash and cash equivalents For purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. At March 31, 2020 and December 31, 2019, the Company did not have any cash equivalents. The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. There were no balances in excess of FDIC insured levels as of March 31, 2020 and December 31, 2019. The Company has not experienced any losses in such accounts through March 31, 2020. Accounts receivable Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. Property and equipment Property are stated at cost and are depreciated using the straight-line method over their estimated useful lives of five to six years. Leasehold improvements are depreciated over the shorter of the useful life or lease term including scheduled renewal terms. Maintenance and repairs are charged to expense as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Intangible asset Intangible assets are carried at cost less accumulated amortization, computed using the straight-line method over the estimated useful life, less any impairment charges. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The updated guidance requires lessees to recognize lease assets and lease liabilities for most operating leases. In addition, the updated guidance requires that lessors separate lease and non-lease components in a contract in accordance with the new revenue guidance in ASC 606. The updated guidance is effective for interim and annual periods beginning after December 15, 2018. On January 1, 2019, the Company adopted ASU No. 2016-02, applying the package of practical expedients to leases that commenced before the effective date whereby the Company elected to not reassess the following: (i) whether any expired or existing contracts contain leases and; (ii) initial direct costs for any existing leases. For contracts entered into on or after the effective date, at the inception of a contract the Company assessed whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether it obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. The Company will allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a term of 12 months or less. Operating lease ROU assets represents the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in general and administrative expenses in the condensed consolidated statements of operations. Impairment of long-lived assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. Segment reporting The Company uses “the management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker is the chief executive officer of the Company, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. On May 1, 2019, the Company disposed of its Save On business segment and the results of operations of Save On are included in discontinued operations. Accordingly, during the three months ended March 31, 2020 and 2019, the Company believes that it operates in one operating segment related to deliveries for on-line retailers in New York, New Jersey, Pennsylvania and other areas, and tractor trailer and box truck deliveries of product on the east coast of the United States from one distributor’s warehouse to another warehouse or from a distributor’s warehouse to the post office. Derivative financial instruments The Company has certain financial instruments that are embedded derivatives associated with capital raises. The Company evaluates all of its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815-10-05-4, Derivatives and Hedging Contracts in Entity’s Own Equity In July 2017, FASB issued ASU No. 2017-11, Earnings Per Share Distinguishing Liabilities from Equity Derivatives and Hedging Accounting for Certain Financial Instruments with Down Round Features Revenue recognition and cost of revenue The Company adopted ASC 606, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605, Revenue Recognition. This ASC is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASC also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer service orders, including significant judgments. For the Company’s Prime EFS and Shypdirect business activities, the Company recognizes revenues and the related direct costs of such revenue which generally include compensation and related benefits, gas costs, insurance, parking and tolls, truck rental fees, and maintenance fees as of the date the freight is delivered which is when the performance obligation is satisfied. In accordance with ASC Topic 606, the Company recognizes revenue on a gross basis. Our payment terms are net seven days from acceptance of delivery. The Company does not incur incremental costs obtaining service orders from its Prime EFS and Shypdirect customers, however, if the Company did, because all of Prime EFS and Shypdirect customer contracts are less than a year in duration, any contract costs incurred would be expensed rather than capitalized. The revenue that the Company recognizes arises from deliveries of packages on behalf of the Company’s customers. Primarily, the Company’s performance obligations under these service orders correspond to each delivery of packages that the Company makes under the service agreements. Control of the package transfers to the recipient upon delivery. Once this occurs, the Company has satisfied its performance obligation and the Company recognizes revenue. For the Company’s Save On business activities, through the date of disposition on May 1, 2019, the Company recognized revenues and the related direct costs of such revenue which included carrier fees and dispatch costs as of the date the freight was delivered by the carrier which was when the performance obligation is satisfied. Customer payments received prior to delivery were recorded as a deferred revenue liability and related carrier fees if paid prior to delivery were recorded as a deferred expense asset. In accordance with ASC Topic 606, the Company recognized revenue on a gross basis. Our payment terms for corporate customers were net 30 days from acceptance of delivery and individual customers generally were required to pay in advance. The Company did not incur incremental costs obtaining service orders from its Save On customers, however, if the Company did, because all of the Save On customer’s contracts were less than a year in duration, any contract costs incurred were expensed rather than capitalized. The revenue that the Company recognized arose from service orders it received from its Save On customers. The Company’s performance obligations under these service orders corresponded to each delivery of a vehicle that the Company made for its customer under the service orders; as a result, each service order generally contained only one performance obligation based on the delivery to be completed. Management has reviewed the revenue disaggregation disclosure requirements pursuant to ASC 606 and determined that no further disaggregation disclosure is required to be presented. Basic and diluted loss per share Pursuant to ASC 260-10-45, basic loss per common share is computed by dividing net loss attributable to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Potentially dilutive common shares consist of common stock issuable for stock warrants (using the treasury stock method) and shares issuable for convertible debt (using the as-if converted method). These common stock equivalents may be dilutive in the future. Potentially dilutive common shares were excluded from the computation of diluted shares outstanding as they would have an anti-dilutive impact on the Company’s net losses and consisted of the following: March 31, 2020 March 31, 2019 Stock warrants 181,563,164 1,442,434 Stock options 80,000 - Convertible debt 324,772,402 4,415,776 Series A convertible preferred stock - 8,333,333 Series B convertible preferred stock 1,700,000 - Stock-based compensation Stock-based compensation is accounted for based on the requirements of ASC 718 – “Compensation – Stock Compensation Improvements to Employee Share-Based Payment Recent Accounting Pronouncements In July 2017, FASB issued ASU No. 2017-11, Earnings Per Share Distinguishing Liabilities from Equity Derivatives and Hedging Accounting for Certain Financial Instruments with Down Round Features In August 2018, the FASB issued ASU 2018-13 to modify the disclosure requirements on fair value measurements. The amendments are effective for years beginning after December 15, 2019. An entity is permitted to early adopt any removed or modified disclosures and delay adoption of the additional disclosures until the effective date. Most amendments should be applied retrospectively, but certain amendments will be applied prospectively. The adoption of this standard did not have an impact on the Company’s consolidated financial position, results of operations and cash flows. There are currently no other accounting standards that have been issued but not yet adopted that we believe will have a significant impact on our consolidated financial position, results of operations or cash flows upon adoption. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | NOTE 3 – DISCONTINUED OPERATIONS On May 1, 2019, the Company entered into a Share Exchange Agreement with Save On and Steven Yariv, whereby the Company returned all of the stock of Save On to Steven Yariv in exchange for Mr. Yariv conveying 1,000,000 shares of common stock of the Company back to the Company. In addition, the Company granted an aggregate of 80,000 options to certain employees of Save On. Mr. Yariv ceased to be an officer or director of the Company effective with the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 as filed with the Securities and Exchange Commission on April 16, 2019. Pursuant to ASC 205-20-45, the financial statement in which net income or loss of a business entity is reported shall report the results of operations of the discontinued operation in the period in which a discontinued operation either has been disposed of or is classified as held for sale. Accordingly, the Company reflects Save On as discontinued operations beginning in the second quarter of 2019, the period that Save On was disposed of and retroactively for all periods presented in the accompanying condensed consolidated financial statements. The business of Save On are considered discontinued operations because: (a) the operations and cash flows of Save On were eliminated from the Company’s operations; and (b) the Company has no interest in the divested operations. As of March 31, 2020 and December 31, 2019, the Company did not have any remaining assets and liabilities classified as discontinued operations in the Company’s condensed consolidated financial statements as of March 31, 2020 and December 31, 2019. The summarized operating result of discontinued operations included in the Company’s condensed consolidated statements of operations is as follows: Three Months Ended March 31, 2020 2019 Revenues $ - $ 1,131,525 Cost of revenues - 851,196 Gross profit - 280,329 Operating expenses - 266,668 Income from discontinued operations - 13,661 Loss on disposal of discontinued operations - - Income from discontinued operations, net of income taxes $ - $ 13,661 |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Accounts Receivable | NOTE 4 – ACCOUNTS RECEIVABLE At March 31, 2020 and December 31, 2019, accounts receivable, net consisted of the following: March 31, 2020 December 31, 2019 Accounts receivable $ 1,083,225 $ 983,771 Allowance for doubtful accounts (20,000 ) (20,000 ) Accounts receivable, net $ 1,063,225 $ 963,771 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 5 - PROPERTY AND EQUIPMENT At March 31, 2020 and December 31, 2019, property and equipment consisted of the following: Useful Life March 31, 2020 December 31, 2019 Delivery trucks and vehicles 5 - 6 years $ 761,652 $ 301,142 Equipment 5 years 3,470 3,470 Subtotal 765,122 304,612 Less: accumulated depreciation (78,394 ) (64,206 ) Property and equipment, net $ 686,728 $ 240,406 For the three months ended March 31, 2020 and 2019, depreciation expense is included in general and administrative expenses and amounted to $14,188 and $47,040, respectively. During the three months ended March 31, 2019, the Company traded in, sold or disposed of delivery trucks and vehicles of $185,514 with related accumulated depreciation of $19,561, and received cash of $81,000 and reduced notes payable of $37,931, resulting in a loss of $47,022 which is included in general and administrative expenses on the accompanying condensed consolidated statement of operations. |
Convertible Promissory Notes Pa
Convertible Promissory Notes Payable and Notes Payable | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Promissory Notes Payable and Notes Payable | NOTE 6 – CONVERTIBLE PROMISSORY NOTES PAYABLE AND NOTES PAYABLE Red Diamond Partners LLC and RDW Capital, LLC On April 25, 2017, the Company entered into a securities purchase agreement with RedDiamond Partners LLC (“ RedDiamond RedDiamond Notes On June 30, 2017, the Company issued RDW Capital, LLC a senior convertible note in the aggregate principal amount of $240,000, for an aggregate purchase price of $30,000. Through date of default, the principal due under the note accrued interest at a rate of 12% per annum. All principal and accrued interest under the note was due six months following the issue date of the note, and is convertible into shares of the Company’s common stock, at a conversion price equal to fifty (50%) of the lowest volume-weighted average price for the previous ten trading days immediately preceding the conversion. The note includes anti-dilution protection, including a down-round provision under which the conversion price could be affected by future equity offerings undertaken by the Company, as well as customary events of default, including non-payment of the principal or accrued interest due on the note. Upon an event of default, all obligations under the note will become immediately due and payable and the Company is required to make certain payments to the lender. On December 31, 2017 the Company failed to make its required maturity date payment of principal and interest. In accordance with the note, the Company entered into default on January 3, 2018, which increased the interest rate to 24% per annum. In connection with the issuance of these convertible promissory notes to RedDiamond and RDW Capital, LLC, the Company determined that the terms of these convertible promissory notes included a down-round provision under which the conversion price could be affected by future equity offerings undertaken by the Company. The Company evaluated these convertible promissory note transactions in accordance with ASC Topic 815, Derivatives and Hedging. Through December 31, 2018, the Company determined that the conversion feature of the convertible promissory notes was not afforded the exemption for conventional convertible instruments due to their respective variable conversion rate and price protection provisions. Accordingly, through December 31, 2018, under the provisions of FASB ASC Topic No. 815-40, “Derivatives and Hedging – Contracts in an Entity’s Own Stock”, the embedded conversion option contained in the convertible instruments were accounted for as derivative liabilities at the date of issuance and shall be adjusted to fair value through earnings at each reporting date. On January 1, 2019, the Company adopted ASU No. 2017-11, Earnings Per Share Distinguishing Liabilities from Equity Derivatives and Hedging Accounting for Certain Financial Instruments with Down Round Features, On April 9, 2019, the Company entered into agreements (the “ RedDiamond Amendments ● extend the maturity date of the notes to December 31, 2020; ● remove all convertibility features of the notes; and ● repay not less than half of the obligations then outstanding pursuant to the notes if the Company completes an offering of equity or equity linked securities (including warrants, convertible preferred stock, convertible debentures or convertible promissory note) which results in gross proceeds to the Company of at least $4,000,000, using a portion of the proceeds thereof. In connection with this debt modification, on April 9, 2019, the Company recorded a gain on debt extinguishment of $432,589, which consists of the removal of debt put premium of $385,385 since the debt is no longer convertible, and $47,204 related to the reversal of default interest payable. Pursuant to the RedDiamond Amendments, the conversion provisions contained in the convertible promissory notes held by RedDiamond and RDW Capital, LLC were suspended and ceased to be exercisable beginning as of April 9, 2019. However, under the RedDiamond Amendments, the conversion provisions contained in the convertible promissory notes held by Red Diamond and RDW Capital, LLC were subject to reinstatement upon the occurrence of an event of default. The parties agreed that it would be considered an event of default under the convertible promissory notes if the Company consummated any new offering of equity or equity linked securities containing a conversion or exercise price which is variable based upon the market trading price of the Company’s securities. On August 30, 2019, the Company entered into a new offering of equity or equity linked securities containing a conversion or exercise price which is variable based upon the market trading price of the Company’s securities. Accordingly, since the Company entered into a new offering of equity or equity linked securities containing a conversion or exercise price which is variable based upon the market trading price of the Company’s securities, in 2019, the conversion terms were reinstated and the Company recorded a put premium of $385,385 and recorded interest expense of $385,385. During the three months ended March 31, 2020, the Company issued 1,703,717 shares of its common stock upon the conversion of debt of $73,725. Upon conversion, the Company reclassified put premium of $73,725 to paid-in capital. The aggregate principal amounts due as of March 31. 2020 and December 31, 2019 amounted to $747,935 and $895,385, which included a put premium of $311,660 and $385,385, and principal balance of $436,275 and $510,000, and was included in convertible notes payable, a current liability, on the accompanying consolidated balance sheet, respectively. Bellridge Capital, LLC On June 18, 2018, the Company entered into a securities purchase agreement (the “ Bellridge Purchase Agreement Bellridge Bellridge Note In connection with the Bellridge Purchase Agreement, Bellridge was issued a warrant, with a term of two years, to purchase up to 4.75% of the fully-diluted outstanding common stock of the Company, for an aggregate purchase price of $100 (the “ First Bellridge Warrant Bellridge Note PA Warrant In August 2018, the Company defaulted on the Bellridge Note due to (i) default on the payment of monthly interest payments due, (ii) default caused by the late filing of the Company’s reports on Form 10-Q for the periods ended June 30, 2018 and September 30, 2018 and (iii) default of filing of a registration statement. Upon an event of default, all principal, accrued interest, and liquating damages and penalties were due upon request of Bellridge at 125% of such amounts. On December 27, 2018, Bellridge waived any and all defaults in existence on the Bellridge Note and the Company agreed to issue a warrant that is convertible into 2% of the issued and outstanding shares existing as the time the Company files a registration statement or makes an application to up list to a national stock exchange (the “ Second Bellridge Warrant Bellridge Warrants On April 9, 2019, the Company entered into a new agreement with this lender that modified the Bellridge Note and cancelled these warrants (see below). Through April 9, 2019, all principal and accrued interest under the Bellridge Note was convertible into shares of the Company’s common stock, at a conversion price equal to the lower of $1.50 and 65% of the lowest traded price during the fifteen trading days immediately prior to the conversion date. The Bellridge Note included anti-dilution protection, as well as customary events of default, including, but not limited to, non-payment of the principal or accrued interest due on the Bellridge Note and cross default provisions on other Company obligations or contracts. Upon an event of default, all obligations under the Bellridge Note become immediately due and payable and the Company is required to make certain payments to Bellridge. Bellridge was granted a right of first refusal on future financing transactions of the Company while the Bellridge Note remains outstanding, plus an additional three months thereafter. In connection with the issuance of the Bellridge Note, the Company entered into a security agreement with Bellridge pursuant to which the Company agreed that obligations under the Bellridge Note and related documents will be secured by all of the assets of the Company. In addition, all of the Company’s subsidiaries are guarantors of the Company’s obligations to Bellridge pursuant to the Bellridge Note and have granted a similar security interest over substantially all of their assets. A portion of the proceeds of the Bellridge Note were used to acquire 100% of the membership interests of Prime EFS. During the term of the Bellridge Note, in the event that the Company consummates any public or private offering or other financing or capital raising transaction of any kind (each a “ Bellridge Note Subsequent Offering In connection with the Bellridge Purchase Agreement, the Company entered into a registration rights agreement which, among other things, required the Company to file a registration statement with the Securities and Exchange Commission no later than 120 days after June 18, 2018. The Company failed to file such registration statement. Accordingly, in addition to any other rights the holders may have under the Bellridge Purchase Agreement or under applicable law, on the default date and on each monthly anniversary of each such default date (if the applicable event is not cured by such date) until the ninetieth day from such default date, the Company will pay to each holder an amount in cash, as partial liquidated damages and not as a penalty, equal to the product of one percent (1%) multiplied by the aggregate subscription amount paid by the holder pursuant to the Bellridge Purchase Agreement. Subsequent to the ninetieth day from such default date, the one percent (1%) penalty will increase to two percent (2%), with an aggregate cap of twenty percent (20%) per annum. If the Company fails to pay any of these partial liquidated damages in full within seven days after the date payable, the Company will pay interest thereon at a rate of 18% per annum to the holder, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. On December 27, 2018, Bellridge waived any and all defaults. In connection with the Bellridge Purchase Agreement, the Company paid a placement agent $120,000 in cash which is included in issue costs previously discussed above and this placement agent was issued the Bellridge Note PA Warrant, with a term of two years, to purchase up to 4.75% of the fully-diluted outstanding common stock of the Company, for an aggregate purchase price of $100. On April 9, 2019, the Company entered into an agreement with this placement agent that cancelled the Bellridge Note PA Warrant. In connection with the issuance of the Bellridge Note and the Bellridge Warrants, the Company determined that the Bellridge Note and the Bellridge Warrants contains terms that are not fixed monetary amounts at inception. Accordingly, under the provisions of ASC Topic No. 815-40, “Derivatives and Hedging – Contracts in an Entity’s Own Stock”, the embedded conversion option contained in the Bellridge Note and the Bellridge Warrants were accounted for as derivative liabilities at the date of issuance and shall be adjusted to fair value through earnings at each reporting date. The fair value of this embedded conversion option derivative and the Bellridge Warrants were determined using the Binomial valuation model and Monte-Carlo simulation model, respectively. Convertible debt modifications and warrant cancellations On April 9, 2019 (the “ Bellridge Modification Date Bellridge Modification Agreement ● the overall principal amount of the Bellridge Note was reduced from the original principal amount of $2,497,502 (principal amount was $2,223,918 at April 9, 2019) to $1,800,000, in exchange for the issuance to Bellridge of 800,000 shares of restricted common stock, to be delivered to Bellridge, either in whole or in part, at such time or times as when the beneficial ownership of such shares by Bellridge will not result in Bellridge’s beneficial ownership of more than the Beneficial Ownership Limitation and such shares are to be issued within three business days of the date the Bellridge has represented to the Company that it is below the Beneficial Ownership Limitation. Such issuances will occur in increments of no fewer than the lesser of (i) 50,000 shares and (ii) the balance of the 800,000 shares owed. The “Beneficial Ownership Limitation” is 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable pursuant to the Bellridge Modification Agreement. In connection with these shares, the Company recorded a loss on debt extinguishment of $10,248,000 in April 2019. As of August 19, 2019, 100,000 of these shares have been issued and on August 16, 2019, the Company issued 700,000 shares of Series B Preferred shares upon settlement of 700,000 shares of issuable common stock; ● the maturity date of the Bellridge Note was extended to August 31, 2020; ● the interest rate was reduced from 10% to 5% per annum; ● if the Company completes an offering of equity or equity linked securities (including warrants, convertible preferred stock, convertible debentures or convertible promissory note) which results in gross proceeds to the Company of at least $4,000,000, then the Company will use a portion of the proceeds thereof to repay not less than half of the obligations then outstanding pursuant to the Bellridge Note; ● if the Company completes an offering of debt which results in gross proceeds to the Company of at least $3,000,000, then the Company will use a portion of the proceeds thereof to repay any remaining obligations then outstanding pursuant to the Bellridge Note; ● the convertibility of the Bellridge Note was amended such that the Bellridge Note is only convertible at a conversion price to be mutually agreed upon between the Company and the holder. As of the date of this report, the Company and holder have not mutually agreed on a conversion price, Since the conversion terms are unknown, the Company will account for this conversion feature when the contingency is resolved; ● the registration rights previously granted to Bellridge were eliminated; and ● The First Bellridge Warrant and the Second Bellridge Warrant were cancelled and of no further force or effect as of the Bellridge Modification Date. In exchange, the Company issued Bellridge 360,000 shares of restricted common stock. In addition, on the Bellridge Modification Date, warrant holders holding warrants exercisable into an aggregate of 4.75% of the outstanding common stock of the Company all agreed to exercise such warrants for an aggregate of 240,000 shares of common stock of the Company. At March 31, 2020 and December 31, 2019, convertible notes payable related to this convertible debt amounted to $1,813,402, which consists of $1,813,402 of principal balance due and is net of unamortized debt discount of $0. August 30, 2019 convertible debt and related warrants On August 30, 2019, the Company closed Securities Purchase Agreements (the “ August 2019 Purchase Agreement August 2019 Notes August 2019 Warrants The August 2019 Notes bear interest at 10% per annum and become due and payable on November 30, 2020. During the existence of an Event of Default (as defined in the August 2019 Notes), interest accrues at the lesser of (i) the rate of 18% per annum, or (ii) the maximum amount permitted by law. Commencing on the four month anniversary of the August 2019 Notes, monthly payments of interest and monthly principal payments, based on a 12 month amortization schedule (each, an “ August 2019 Notes Amortization Payment August 2019 Note Stock Payment The August 2019 Notes may be prepaid, provided that Equity Conditions, as defined in the August 2019 Notes, have been met (or any such failure to meet the Equity Conditions has been waived): (i) from August 30, 2019 until and through November 30, 2019 at an amount equal to 105% of the aggregate of the outstanding principal balance of the August 2019 Notes and accrued and unpaid interest, and (ii) after August 30, 2019 at an amount equal to 115% of the aggregate of the outstanding principal balance of the August 2019 Notes and accrued and unpaid interest. In the event that the Company closes a registered public offering of securities for its own account (a “ Public Offering In connection with the August 2019 Purchase Agreement, the Company entered into a registration rights agreement, pursuant to which the Company agreed to file a registration statement on Form S-1 to register the resale of the shares issuable to the investors pursuant to the August 2019 Purchase Agreement. From the original issue date until the August 2019 Notes are no longer outstanding, the August 2019 Notes are convertible, in whole or in part, at any time, and from time to time, into shares of common stock at the option of the investor. The initial conversion price of the August 2019 Notes was the lower of: (i) $3.50 per share and (ii) the price per share paid by investors in the contemplated equity offering of up to $1,000,000. If an Event of Default (as defined in the August 2019 Notes) has occurred, regardless of whether it has been cured or remains ongoing, the August 2019 Notes were initially convertible at the lower of: (i) $3.50 and (ii) 70% of the second lowest closing price of the common stock as reported on the Trading Market (as defined in the August 2019 Notes) during the 20 consecutive Trading Day (as defined in the August 2019 Notes) period ending and including the Trading Day (as defined in the August 2019 Notes) immediately preceding the delivery or deemed delivery of the applicable notice of conversion. All such Conversion Price determinations are to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the common stock. The August 2019 Notes and related August 2019 Warrants include down-round provisions under which the August 2019 Note conversion price and August 2019 Warrant exercise price could be affected, on a full-ratchet basis, by future equity offerings undertaken by the Company. On September 6, 2019, the Company sold shares of its common stock at $2.50 per share and accordingly, the conversion price and warrant down-round provisions were triggered. As a result, the conversion price of the August 2019 Notes was reduced to $2.50 per share and the number of warrants was increased to 1,383,116 warrants and the exercise price was lowered to $2.50. On January 7, 2020, the Company issued new convertible debt with an initial conversion price of $0.40 per share and warrants exercisable at $0.40 per share and accordingly, the conversion price and warrant down-round provisions were triggered. As a result, the conversion price of August 2019 Notes was reduced to $0.40 per share, and the number of warrants was increased to 8,644,474 warrants and the exercise price was lowered to $0.40. As a result of the January 7, 2020 trigger of the down-round provisions, on January 7, 2020, the Company recorded a deemed dividend of $17,836,244 which represents the fair value transferred to the warrant holders from the down round feature being triggered. The Company calculated the difference between the warrants fair value on January 7, 2020, the date the down- round feature was triggered using the current exercise price and the new exercise price and the new number of warrants. The deemed dividend was recorded as an increase in accumulated deficit and increase in paid-in capital and increased the net loss to common shareholders by the same amount. In connection with the issuance of the August 2019 Notes, the Company determined that various terms of the August 2019 Notes, including the August 2019 Note Stock Payment terms discussed above, caused derivative treatment of the embedded conversion options. On August 30, 2019, the initial measurement date, the fair values of the embedded conversion option derivative of $1,953,968 was recorded as derivative liabilities and was allocated as a debt discount up to the net proceeds of the August 2019 Notes of $936,645, with the remainder of $1,017,323 charged to current period operations as initial derivative expense. On January 30, 2020, due to the default of the January 2020 August 2019 Notes Amortization Payment, the August 2019 Notes were deemed in default. Accordingly, the outstanding principal balance on date of default increased by 30% which amounted to $723,985, default interest accrues at 18%, and the default conversion terms apply. During the three months ended March 31, 2020, the Company repaid principal of $159,988, and the Company issued 3,586,689 shares its common stock upon the conversion of principal and default interest of $237,169 and accrued interest of $30,625. Additionally, accrued interest payable of $75,309 was reclassified to principal balance. At March 31, 2020, convertible notes payable related to August 30, 2019 convertible debt amounted to $1,554,729, which consists of $2,871,977 of principal balance and default interest due and is net of unamortized debt discount of $1,317,248. At December 31, 2019, convertible notes payable related to August 30, 2019 convertible debt amounted to $658,623, which consists of $2,469,840 of principal balance due and is net of unamortized debt discount of $1,811,217. October 3, 2019 convertible debt and related warrants On October 3, 2019, the Company closed on a securities purchase agreement (the “ October 3 Purchase Agreement October 3 Note October 3 Warrant October 3 Note Amortization Payment October 3 Note Stock Payment The October 3 Note may be prepaid, provided that certain Equity Conditions, as defined in the October 3 Note, have been met (or any such failure to meet the Equity Conditions has been waived): (i) from October 3, 2019 until and through January 3, 2020, at an amount equal to 105% of the aggregate of the outstanding principal balance of the October 3 Note and accrued and unpaid interest, and (ii) after January 3, 2020, at an amount equal to 115% of the aggregate of the outstanding principal balance of the October 3 Note and accrued and unpaid interest. In the event that the Company closes a Public Offering, the holder may elect to: (x) have its principal and accrued interest prepaid directly from the proceeds of the Public Offering at the prices set forth above, or (y) exchange its October 3 Note at the closing of the Public Offering for the securities being issued in the Public Offering at the Public Offering prices based upon the outstanding principal, accrued interest and other charges, or (z) continue to hold the October 3 Note. Except for a Public Offering and October 3 Note Amortization Payments, in order to prepay the October 3 Note, the Company must provide at least 20 days’ prior written notice to the holder, during which time the holder may convert the October 3 Note in whole or in part at the conversion price. For avoidance of doubt, the October 3 Note Amortization Payments are prepayments and are subject to prepayment penalties equal to 115% of the October 3 Note Amortization Payment. In the event the Company consummates a Public Offering while the October 3 Note is outstanding, then 25% of the net proceeds of such offering will, within two business days of the closing of such Public Offering, be applied to reduce the outstanding obligations pursuant to the October 3 Note. On the original issue date until the October 3 Note is no longer outstanding, the October 3 Note is convertible, in whole or in part, at any time, and from time to time, into shares of common stock at the option of the investor. The “Conversion Price” in effect on any Conversion Date means, as of any Conversion Date (as defined in the October 3 Note) or other date of determination, the lower of: (i) $2.51 per share and (ii) the price per share paid by investors in the contemplated equity offering of up to $1,000,000. If an Event of Default (as defined in the October 3 Note) has occurred, regardless of whether such Event of Default (as defined in the October 3 Note) has been cured or remains ongoing, the October 3 Note are convertible at the lower of: (i) $2.51 and (ii) 70% of the second lowest closing price of the common stock as reported on the Trading Market (as defined in the October 3 Note) during the 20 consecutive Trading Day (as defined in the October 3 Note) period ending and including the Trading Day (as defined in the October 3 Note) immediately preceding the delivery or deemed delivery of the applicable Notice of Conversion. All such Conversion Price determinations are to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the common stock. The October 3 Warrant is exercisable at any time on or after the date of the issuance and entitles the investor to purchase shares of the Company’s common stock for a period of five years from the initial date the October 3 Warrant became exercisable. Under the terms of the October 3 Warrant, the investor is entitled to exercise the October 3 Warrant to purchase up to 66,401 shares of the Company’s common stock at an initial exercise price of $3.51, subject to adjustment as detailed in the October 3 Warrant. In October 2019 the Company calculated the relative fair value of the October 3 Warrant in the amount of $82,771 which was added to debt discount and is being amortized over the term of the notes. The October 3 Note and related October 3 Warrant include a down-round provision under which the October 3 Note conversion price and warrant exercise price could be affected, on a full-ratchet basis, by future equity offerings undertaken by the Company. Subsequent to October 3, 2019, the Company issued convertible debt with a conversion price of $2.50 per share and accordingly, the convertible debt and warrant down-round provisions were triggered. As a result, the conversion price and the exercise price were lowered to $2.50 and the number of warrants was increased to 66,667 warrants. On January 7, 2020, the Company issued new convertible debt with an initial conversion price of $0.40 per share and warrants exercisable at $0.40 per share and accordingly, the conversion price and warrant down-round provisions were triggered. As a result, the conversion price of the October 3 Note was reduced to $0.40 per share, and the number of warrants was increased to 416,669 warrants and the exercise price was lowered to $0.40. As a result of the January 7, 2020 trigger of the down-round provisions, on January 7, 2020, the Company recorded a deemed dividend of $859,768 which represents the fair value transferred to the October 3 Warrant holder from the down-round feature being triggered. The Company calculated the difference between the October 3 Warrant’s fair value on January 7, 2020, the date the down-round feature was triggered using the current exercise price and the new exercise price and the new number of warrants. The deemed dividend was recorded as an increase in accumulated deficit and increase in paid-in capital and increased the net loss to common shareholders by the same amount. In connection with the issuance of the October 3 Note, the Company determined that various terms of the October 3 Note, including the October 3 Note Stock Payment terms discussed above, caused derivative treatment of the embedded conversion options. On October 3, 2019, the initial measurement date, the fair values of the embedded conversion option derivative of $123,795 was recorded as derivative liabilities and was allocated as a debt discount up to the net proceeds of the October 3 Note of $67,229, with the remainder of $56,566 charged to current period operations as initial derivative expense. In February 2020, due to the default of the February 2020 October 3 Note Amortization Payment, the October 3 Note was deemed in default. Accordingly, the outstanding principal balance on date of default increased by 30% which amounted to $50,000, default interest accrues at 18%, and the default conversion terms apply. At March 31, 2020, convertible notes payable related to the October 3, 2019 convertible debt amounted to $116,667, which consists of $216,667 of principal balance and default interest due and is net of unamortized debt discount of $100,000. At December 31, 2019, convertible notes payable related to the October 3, 2019 convertible debt amounted to $33,334, which consists of $166,667 of principal balance due and is net of unamortized debt discount of $133,333. Other convertible debt On October 14, 2019 and November 7, 2019, we entered into convertible note agreements with an accredited investor. Pursuant to the terms of these convertible note agreements, we issued and sold to an investor convertible promissory notes in the aggregate principal amount of $500,000 (the “ Fall 2019 Notes The Company has the right to prepay in cash all or a portion of the outstanding principal due under the Fall 2019 Notes. The Company must provide the holders with written notice at least twenty business days prior to the date on which the Company will deliver payment of accrued interest and all or a portion, in $100,000 increments, of the principal. Each Fall 2019 Note is convertible, in whole or in part, at any time, and from time to time, into shares of common stock at the option of the investor. The “Conversion Price” in effect on any Conversion Date means, as of any date of determination, the lower of: (i) $2.50 per share and (ii) the twenty day per share closing trading price of the Company’s common stock during the twenty trading days that close with the last previous trading day ended three days prior to the date of exercise. The Fall 2019 Notes do not contain anti-dilutive provisions. In May 2020 and June 2020, due to the default of a May 2020 and June 2020 Fall 2019 Note Amortization Payments, the Fall 2019 Notes were deemed in default. Accordingly, default interest accrues at 18% and the Fall 2019 Notes became due on the respective dates of default. In connection with the issuance of these convertible notes, the Company determined that various terms of the Fall 2019 Notes caused derivative treatment of the embedded conversion options. On the date of each respective Fall 2019 Note, the initial measurement date, the aggregate fair values of the embedded conversion option derivative of $328,638 was recorded as derivative liabilities and was allocated as a debt discount up to the net proceeds of the Fall 2019 Notes of $328,638. At March 31, 2020, convertible notes payable related to the Fall 2019 Notes amounted to $299,327, which consists of $500,000 of principal balance due and is net of unamortized debt discount of $200,673. At December 31, 2019, convertible notes payable related to the Fall 2019 Notes amounted to $233,600, which consists of $500,000 of principal balance due and is net of unamortized debt discount of $266,400. During the three months ended March 31, 2020, the Company closed on securities purchase agreements with accredited investors (the “ Q1 2020 Purchase Agreements Q1 2020 Notes Q1 2020 Warrants Q1 2020 Note Amortization Payment Q1 2020 Note Stock Payment The Q1 2020 Notes may be prepaid, provided that Equity Conditions, as defined in the Q1 2020 Notes, have been met (or any such failure to meet the Equity Conditions has been waived): (i) from each Q1 2020 Note’s respective original issuance date until and through the day that falls on the third month anniversary of such original issue date (each a “ Q1 2020 Note 3 Month Anniversary From the original issue date of a Q1 2020 Note until such Q1 2020 Note is no longer outstanding, such Q1 2020 Note is convertible, in whole or in part, at any time, and from time to time, into shares of common stock at the option of the holder. The “Conversion Price” in effect on any Conversion Date (as defined in the applicable Q1 2020 Note) means, as of any date of determination, $0.40 per share, subject to adjustment as provided herein. If an Event of Default (as defined in the applicable Q1 2020 Note) has occurred, regardless of whether it has been cured or remains ongoing, the Q1 2020 Notes are convertible at the lower of: (i) $0.40 and (ii) 70% of the second lowest closing price of the common stock as reported on the Trading Market (as defined in the applicabl |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 7 – NOTES PAYABLE Secured merchant loans From November 22, 2019 to December 31, 2019, the Company entered into several secured merchant loans in the aggregate amount of $2,283,540. The Company received net proceeds of $1,355,986, net of original issue discounts and origination fees of $927,554. Pursuant to these several secured merchant loans, the Company was required to pay the noteholders by making daily and/or weekly payments on each business day or week until the loan amounts were paid in full. Each payment was deducted from the Company’s bank account. During the year ended December 31, 2019, the Company repaid an aggregate of $464,344 of the loans. During the three months ended March 31, 2020, the Company entered into a new secured merchant loan in the aggregate amount of $1,274,150, which consisted of $670,700 of principal transferred to this new loan by two of these secured merchants. The Company received net proceeds of $150,000, net of original issue discounts and origination fees of $453,450. During the three months ended March 31, 2020, the Company repaid an aggregate of $1,549,639 of these loans, which includes payments pursuant to settlement agreements as discussed below. ● In connection with a settlement agreement dated March 4, 2020, the Company paid off a merchant loan with a principal balance of $936,410 for a payment of $600,000 which was made by the Company in March 2020. ● In connection with a settlement agreement dated March 9, 2020, the Company agreed to pay $233,434 in full settlement for a merchant loan of with a principal balance of $364,740. The payment was due on March 11, 2020. During the three months ended March 31, 2020, the Company paid $48,344 of this settlement and the remaining payment due of $185,090 was paid in May 2020. ● In connection with a settlement agreement dated March 9, 2020, the Company agreed to pay $275,000 in full settlement for a merchant loan with a principal balance of $272,700 and a senior secured convertible debt in the amount of $95,874 and cancellation of 40,300 warrants held by the same creditor. The settlement payment was due, in full, on March 12, 2020; however, due to cash constraints at the time, the Company paid the $275,000 in weekly installments, which the creditor accepted, with its final payment on May 12, 2020. The Company paid $52,500 during the three months ended March 31, 2020 and the remainder of $222,500 was paid in May 2020. While the Company never received a default or demand letter, the creditor verbally told the Company on May 12, 2020, that the original full amount should be paid, although the creditor has not made any formal demand or commenced any action. The Company believes any such claim, if made, would be without merit. In connection with these settlement agreements, the Company recorded a loss on debt extinguishment of $214,641 which consisted of the payment of cash of $67,548 and the write off of debt of remaining debt discount of $614,809, offset by the reduction of principal balance of $467,716. At March 31, 2020, notes payable related to these secured merchant loans amounted to $393,972, which consists of $405,290 of principal balance due and is net of unamortized debt discount of $11,318. At December 31, 2019, notes payable related to these secured merchant loans amounted to $1,057,074, which consists of $1,819,196 of principal balance due and is net of unamortized debt discount of $762,122. Promissory notes In connection with the acquisition of Prime EFS on June 18, 2018, the Company assumed several notes payable liabilities amounting to $944,281 pursuant to secured merchant agreements (the “ Assumed Secured Merchant Loans On August 28, 2019, a remaining secured merchant loan balance of $184,750 was converted into a new note. Pursuant to this new note, the Company will pay the lender in twelve monthly installments of $17,705 beginning on November 25, 2019 to the maturity date of November 25, 2020. This new note bears interest at 15% per annum. This note is secured by the Company’s assets and is personally guaranteed by the former majority member of Prime EFS. During the three months ended March 31, 2020, the Company repaid $60,388 of this note. At March 31, 2020 and December 31, 2019, notes payable related to the new note amounted to $115,951 and $176,339. On August 28, 2019, secured merchant loan balances of $261,630 were converted into new notes payable. During the three months ended March 31, 2020, the Company repaid $135,742 of these notes. Pursuant to these new notes, the Company will pay the lenders in twelve monthly installments of $25,073 beginning on November 25, 2019 to the maturity date of November 25, 2020. During the three months ended March 31, 2020, the Company repaid $135,742 of these notes. During the three months ended March 31, 2020, $4,846 of accrued interest payable was reclassified to the principal balance. At March 31, 2020 and December 31, 2019, notes payable related to these notes amounted to $113,962 and $244,858, respectively. In connection with the acquisition of Prime EFS, the Company assumed several notes payable liabilities due to entities or individuals. These notes have effective interest rates ranging from 7% to 10%, and are unsecured. At March 31, 2020 and December 31, 2019, remaining notes payable to an entity amounted to $40,000 and $40,000, respectively. From October 31, 2018 to December 31, 2018, the Company entered into Original Discount Senior Secured Demand Promissory Notes with an investor (the “ Fall 2018 Promissory Notes During the year ended December 31, 2019, the Company entered into separate promissory notes with several individuals totaling $2,517,150, including $40,000 of a previous note rolled into these new notes, and received net proceeds of $2,238,900, net of original issue discounts of $238,250. These notes were due between 45 and 273 days from the respective note issuance date. In connection with these promissory notes, in 2019, the Company issued 58,000 warrants to purchase 58,000 shares of the Company’s common stock at an exercise price of $1.00 per share. The warrants are exercisable over a five-year period. During the year ended December 31, 2019, the Company repaid $1,118,400 of these notes. Additionally, during the year ended December 31, 2019, the Company issued 439,623 shares of its common stock and 439,623 five year warrants exercisable at $2.50 per share upon conversion of notes payable of $978,750 and accrued interest of $120,307 at a conversion price of $2.50 per share. Since the conversion price of $2.50 was equal to the fair value of the shares as determined by recent sales of the Company’s common shares, no beneficial feature conversion was recorded. During the three months ended March 31, 2020, the Company borrowed additional fund from individuals of $443,000, and received net proceeds of $423,000, net of original issue discount of $20,000, and the Company repaid $298,000 of these funds. At March 31, 2020 and December 31, 2019, notes payable to these individuals amounted to $565,000 and $420,000, respectively. Equipment and auto notes payable In connection with the acquisition of Prime EFS, the Company assumed several equipment notes payable liabilities due to entities. At March 31, 2020 and December 31, 2019, equipment notes payable to these entities amounted to $53,668 and $57,001, respectively. During the years ended December 31, 2019 and 2018, the Company entered into auto financing agreements in the amount of $44,905 and $162,868, respectively. During the years ended December 31, 2019 and 2018, the Company repaid $24,030 and $1,832 of these notes, respectively. At March 31, 2020 and December 31, 2019, auto notes payable to these entities amounted to $173,239 and $181,911, respectively. In November 2019, the Company entered into a promissory note for the purchase of five trucks in the amount of $460,510. The note is due in sixty monthly installments of $9,304. The first payment was paid in December 2019 and the remaining fifty-nine payments are due monthly commencing on January 27, 2020. The note is secured by the trucks and is personally guaranteed by the Company’s chief executive officer. During the three months ended March 31, 2020, the Company repaid $19,002 of this note. At March 31, 2020, equipment note payable to this entity amounted to $441,508. At March 31, 2020 and December 31, 2019, notes payable consisted of the following: March 31, 2020 December 31, 2019 Principal amounts $ 2,106,438 $ 3,187,125 Less: unamortized debt discount (11,318 ) (762,122 ) Principal amounts, net 2,095,120 2,425,003 Less: current portion of notes payable (1,733,440 ) (2,425,003 ) Notes payable – long-term $ 361,680 $ - For the three months ended March 31, 2020 and 2019, amortization of debt discounts related to notes payable amounted to $594,445 and $525,829, respectively, which has been included in interest expense on the accompanying condensed consolidated statements of operations. |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Deficit | NOTE 8– STOCKHOLDERS’ DEFICIT Preferred stock Series A preferred stock The Company increased its authorized preferred shares to 10,000,000 shares in July 2018. On April 9, 2019, the Company entered into agreements with all holders of its Series A Convertible Preferred Stock to exchange all 4,000,000 outstanding shares of preferred stock for an aggregate of 2,600,000 shares of restricted common stock. Upon conversion, pursuant to Section 9(i) of the Certificate of Designation, the Series A preferred stock became undesignated upon their return to the Company. Series B preferred shares In August 2019, the Company designated Series B Preferred Shares consisting of 1,700,000 shares with a par value of $0.001 and a stated value of $0.001. The Series B preferred shares have no voting rights and are not redeemable. Each share of Series B Preferred stock is convertible into one share of common stock at the option of the holder subject to beneficial ownership limitation. On August 16, 2019, the Company issued 1,000,000 Series B preferred shares for services rendered to the former member of Prime EFS who is considered a related party. The shares were valued at $2.50 per shares on an as if converted basis to common shares based on recent sales of the Company’s common stock of $2.50 per share. In connection with the issuance of these Series B Preferred shares, the Company recorded stock-based compensation of $2,500,000. On August 16, 2019, the Company issued 700,000 shares of Series B Preferred shares upon settlement of 700,000 shares of issuable common shares (see Note 6). Series C preferred shares Pursuant to the August 2019 Purchase Agreement (see Note 6), by and among the Company and the investors named therein (the “ August 2019 Investors August 2019 Reserve Requirement inter alia On June 5, 2020, the Company sold to John Mercadante, for $100.00, one share of Series C Preferred Stock which has voting power equal to 51% of the number of votes eligible to vote at any special or annual meeting of the Company’s stockholders (with the power to take action by written consent in lieu of a stockholders meeting) for the sole purpose of amending the Company’s Amended and Restated Articles of Incorporation to increase the number of shares of common stock that the Company is authorized to issue. Upon the effectiveness of the amendment, the Series C Preferred Stock will be automatically cancelled. The Series C Preferred Stock is not entitled to vote on any other matter, is not entitled to dividends, is not convertible into any other security of the Company and is not entitled to any distributions upon liquidation of the Company (See Note 13 – Subsequent Events). Common stock issued for services On February 25, 2019, the Company granted an aggregate of 2,670,688 shares of its common stock to an executive officer, employees and consultants of the Company for services rendered. The shares were valued at $2,750,808, or $1.03 per share, based on the quoted trading price on the date of grant. In connection with these shares, the Company recorded stock-based compensation of $2,750,808. Shares issued in connection with conversion of debt During the three months ended March 31, 2020, the Company issued 5,290,406 shares of its common stock upon the partial conversion of a convertible note principal and default interest balances due of $310,894, and accrued interest payable of due of $30,625 at the contractual conversion price. The Company accounted for the partial conversion of these convertible notes pursuant to the guidance of ASC 470-20, Debt with Conversion and Other Options. Stock options Stock option activities for the three months ended March 31, 2020 are summarized as follows: Number of Options Weighted Weighted Average Remaining Aggregate Balance Outstanding December 31, 2019 80,000 $ 8.84 - $ - Granted - - Cancelled - - Balance Outstanding March 31, 2020 80,000 $ 8.84 4.08 $ - Exercisable, March 31, 2020 20,000 $ 8.84 4.08 $ - Warrants Warrants issued in connection with convertible debt During the three months ended March 31, 2020, the Company closed the Q1 2020 Purchase Agreements with accredited investors. Pursuant to the terms of the Q1 2020 Purchase Agreements, the Company issued Q1 2020 Warrants to purchase up to 818,400 shares of the Company’s common stock (See Note 6). The Q1 2020 Warrants are exercisable at any time on or after the date of the issuance and entitle the investors to purchase shares of the Company’s common stock for a period of five years from the initial date the Q1 2020 Warrants become exercisable. Under the terms of the Q1 2020 Warrants, the investors are entitled to exercise the Q1 2020 Warrants to purchase up to 818,400 shares of the Company’s common stock at an initial exercise price of $0.40, subject to adjustment as detailed in the respective Q1 2020 Warrant. In connection with the 374,000 warrants issued in January 2020, the Company calculated the relative fair value of these warrants in the amount of $262,872 which was added to debt discount and will be amortized over the term of the notes (see Note 6). In connection with the 444,400 warrants issued in February and March 2020, the Company determined that various terms of these Q1 2020 Notes and Q1 2020 Warrants, including the default provisions in the Q1 2020 Notes discussed in Note 6, caused derivative treatment of the warrants. During the three months ended March 31, 2020, on the initial measurement dates, the fair value of the warrant derivatives of $456,631 was recorded as derivative liabilities and was allocated as a debt discount up to the net proceeds of the Q1 2020 Notes of $456,631. The fair value of these warrants was estimated using the Binomial valuation model with the assumptions as outlined in Note 6. Warrant price protection On August 30, 2019, pursuant to the terms of the August 2019 Purchase Agreements with accredited investors, the Company issued August 2019 Warrants to purchase up to 987,940 shares of the Company’s common stock (See Note 6). The August 2019 Warrants are exercisable at any time on or after the date of the issuance and entitles the investors to purchase shares of the Company’s common stock for a period of five years from the initial date the August 2019 Warrants become exercisable. Under the terms of the August 2019 Warrants, the investors were entitled to exercise the August 2019 Warrants to purchase up to 987,940 shares of the Company’s common stock at an initial exercise price of $3.50, subject to adjustment as detailed in the respective August 2019 Warrants. On September 6, 2019, the Company sold its common shares at $2.50 per share and accordingly, the August 2019 Warrant down-round provisions were triggered. As a result, the number of warrants was increased by 395,176 to 1,383,116 warrants and the exercise price was lowered to $2.50. On January 7, 2020, the Company issued new convertible debt with an initial conversion price of $0.40 per share and warrants exercisable at $0.40 per share and accordingly, the conversion price and warrant down-round provisions were triggered. As a result, the conversion price of this debt was reduced to $0.40 per share, and the number of warrants was increased to 8,644,474 warrants and the exercise price was lowered to $0.40. As a result of the January 7, 2020 trigger of the down-round provisions, on January 7, 2020, the Company recorded a deemed dividend of $17,836,244 which represents the fair value transferred to the warrant holders from the down-round feature being triggered. The Company calculated the difference between the August 2019 Warrants’ fair value on January 7, 2020, the date the down-round feature was triggered using the current exercise price and the new exercise price and the new number of warrants. The deemed dividend was recorded as an increase in accumulated deficit and increase in paid-in capital and increased the net loss to common shareholders by the same amount. In October 2019, pursuant to the terms of the October 3 Purchase Agreement with an accredited investor, the Company issued the October 3 Warrant to purchase up to 66,401 shares of the Company’s common stock (See Note 6). The October 3 Warrant is exercisable at any time on or after the date of the issuance and entitles the investor to purchase shares of the Company’s common stock for a period of five years from the initial date the October 3 Warrant becomes exercisable. Under the terms of the October 3 Warrant, the investor is entitled to exercise the October 3 Warrant to purchase up to 66,401 shares of the Company’s common stock at an initial exercise price of $3.51, subject to adjustment as detailed in the October 3 Warrant. The October 3 Warrant includes a down-round provision under which the October 3 Warrant exercise price could be affected, on a full-ratchet basis, by future equity offerings undertaken by the Company. Subsequent to October 3, 2019, the Company issued convertible debt with a conversion price of $2.50 per share and accordingly, the October 3 Warrant down-round provisions were triggered. As a result, the October 3 Warrant exercise price was lowered to $2.50 and the number of warrants was increased to 66,667 warrants. On January 7, 2020, the Company issued new convertible debt with an initial conversion price of $0.40 per share and warrants exercisable at $0.40 per share and accordingly, the conversion price and warrant down-round provisions were triggered. As a result, the conversion price of this debt was reduced to $0.40 per share, and the number of warrants was increased to 416,669 warrants and the exercise price was lowered to $0.40. As a result of the January 7, 2020 trigger of the down-round provisions, on January 7, 2020, the Company recorded a deemed dividend of $859,768 which represents the fair value transferred to the warrant holders from the down-round feature being triggered. The Company calculated the difference between October 3 Warrant’s fair value on January 7, 2020, the date the down-round feature was triggered using the current exercise price and the new exercise price and the new number of warrants. The deemed dividend was recorded as an increase in accumulated deficit and increase in paid-in capital and increased the net loss to common shareholders by the same amount. Other As discussed in Note 6 above, the Company issued debt that consists of the issuance of convertible notes with variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock, default provisions and payment of amortization Payments in stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Due to the fact that the number of shares of common stock issuable exceed the Company’s authorized share limit, effective January 30, 2020, the equity environment is tainted and all convertible debentures and warrants shall be included in the value of the derivative. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the warrants were recorded as derivative liabilities on the issuance date. On January 30, 2020, the Company evaluated all outstanding warrants to determine whether these instruments are tainted and, due to reasons discussed above, all warrants outstanding were considered tainted. Accordingly, the Company recorded a reclassification from paid-in capital to derivative liabilities of $11,381,885 for warrants becoming tainted. On January 30, 2020, the fair value of the warrants to be reclassified to derivative liabilities was determined using the Binomial valuation model. Subsequent to January 30, 2020, the Company issued shares of its common upon conversion of debt at price lower than $0.40. Accordingly, the exercise price of the August 2019 Warrants and October 3 Warrant discussed above was lowered to $0.0203 and the aggregate number of warrants was increased from 9,061,143 warrants to 178,607,053 warrants. Since these warrants were treated as derivative liabilities, no additional deemed dividend was recorded. Warrant activities for the three months ended March 31, 2020 are summarized as follows: Number of Warrants Weighted Weighted Average Remaining Contractual Term (Years) Aggregate Balance Outstanding December 31, 2019 3,649,861 $ 2.41 4.66 $ 311,070 Granted 818,400 0.40 Increase in warrants related to price protection 177,094,903 0.02 Balance Outstanding March 31, 2020 181,563,164 $ 0.05 4.22 $ 1,731,883 Exercisable, March 31, 2020 181,563,164 $ 0.05 4.22 $ 1,731,883 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 9 – COMMITMENTS AND CONTINGENCIES Employment agreement Simultaneously with the acquisition of Prime EFS, Prime EFS agreed to certain terms and conditions by which Prime EFS would continue to employ Frank Mazzola as its chief operating officer. Mr. Mazzola is related to the majority selling member of Prime EFS in the June 18, 2018 transaction. Although Mr. Mazzola proposed a form of written agreement intended to memorialize all material terms of the employment relationship, Prime EFS did not sign the draft proposed by Mr. Mazzola in June 2018 or approve of all terms he was asking for because Prime EFS found some of those terms unfair and unreasonable. Among other things, the draft proposed by Mr. Mazzola called for Prime EFS to make a 5-year commitment and to pay Mr. Mazzola a base salary of $520,000 per year, payable in accordance with Prime EFS’s usual pay practices. The draft proposed by Mr. Mazzola also called for his base salary to increase by $260,000 per year upon (i) Prime EFS achieving revenue of $20 million on an annualized basis (the “Initial Target Goal”) for four consecutive weeks; and (ii) each time Prime EFS achieves revenue of an additional $10 million increment above the Initial Target Goal (i.e., $30 million, $40 million, $50 million, etc.) on an annualized basis for four consecutive weeks. Prime EFS never agreed to any of these terms, orally or in writing. The draft proposed by Mr. Mazzola also called for his base salary to be subject to review annually by the Manager of Prime EFS and that his salary could be increased (but not decreased). Prime EFS agreed to this term. The draft proposed by Mr. Mazzola also provided that he would be entitled to participate in any bonus plan that the Manager of Prime EFS or its designee may approve for the senior executives of Prime EFS and shall be entitled to participate in benefits under the Prime EFS’s benefit plans, profit sharing and arrangements, including, without limitation, any employee benefit plan or arrangement made available in the future by Prime EFS to its employees or senior executives, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements. Prime EFS agreed to these terms. The draft proposed by Mr. Mazzola also provided that, notwithstanding the foregoing, during the term of his employment, Prime EFS would provide, at Prime EFS’s expense, health and major medical insurance benefits to Mr. Mazzola and his family members which were at least equal to the benefits provided to Mr. Mazzola and his family members by Prime EFS immediately prior to the June 18, 2018 acquisition. Prime EFS agreed to these terms. The draft proposed by Mr. Mazzola also provided that the contract would begin on June 18, 2018 and end on May 31, 2023. Prime EFS did not agree to this term. The draft proposed by Mr. Mazzola also provided that the term of the employment would automatically be extended for additional one-year periods unless, at least sixty (60) days prior to the end of the expiration of the term of employment, one party gives notice to the other of an intent not to extend. Prime EFS did not agree to this provision. The draft proposed by Mr. Mazzola also provided that his employment could not be terminated, even for cause, without the concurrence of two of the three “independent” directors of TLSS. Prime EFS did not agree to that provision and could not have done so, since TLSS did not have any independent directors at the time and nothing in the SPA, the stock purchase agreement between TLSS and the selling members of Prime EFS, dated June 18, 2018, obligated TLSS to appoint three or more independent directors. The prior owners of Prime EFS (the “ Prior Owners In addition, since June 18, 2018, the Prior Owners have never demanded that Prime EFS deliver a fully executed, integrated document memorializing all terms of the employment relationship between Prime EFS and Mr. Mazzola. On the basis of these facts, Prime EFS has obtained an opinion of counsel that Prime EFS has a strong argument that the Prior Owners waived Current management of TLSS first became aware, only recently, that the prior chief executive officer of TLSS, Steven Yariv, had material disagreements with the form of employment agreement proposed by Mr. Mazzola and therefore never signed it. In addition, on February 24, 2019, all officers of TLSS and Prime EFS, including Mr. Mazzola, orally agreed that, owing to the dire financial circumstances of the consolidated Company, no officer of TLSS or Prime EFS would be paid at a rate in excess of $350,000 per year unless and until the board of TLSS unanimously approved a different rate in writing. To date, the board of TLSS has not approved a different rate in writing. Mr. Mazzola now denies that he agreed to a permanent reduction in his salary, claiming instead that he agreed to a mere deferral. Legal matters From time to time, we may be involved in litigation relating to claims arising out of our operation in the normal course of business. Elrac LLC v. Prime EFS On or about January 10, 2020, the Company was named as sole defendant in a civil action captioned Elrac LLC v. Prime EFS, Elrac Action Elrac In the event that Enterprise files such a counterclaim, Prime EFS will contest it vigorously and pursue its own claim for the repayment of a large portion of the escrow deposits plus interest. Nevertheless, given the documentation which Elrac submitted to court in the Elrac Action, including an affidavit from its controller, as of March 31, 2020 and December 31, 2019, the Company has reflected a liability of $440,000, the amount originally claimed as damages by Elrac in the Elrac Action, which has been included in contingency liability on the accompanying condensed consolidated balance sheet. BMF Capital v. Prime EFS LLC et al. The Company is aware of a settlement agreement made and entered into as of March 6, 2020, under which Prime EFS and certain related entities agreed to pay BMF Capital (“ BMF inter alia Bellridge Capital, L.P. and LLC v. TLSS Currently, the Company is in an ongoing dispute between the Company and two investors in the Company, namely Bellridge and SCS, LLC (“ SCS inter alia, ab initio. SCS, LLC v. Transport and Logistics Systems, Inc. On or about June 7, 2020, the Company was notified of the filing of civil action in the Supreme Court of the State of New York, New York County, captioned SCS, LLC v. Transportation and Logistics Systems, Inc The action was filed on May 26, 2020 and assigned Index No. 154433/2020. The plaintiff in this action alleges it is a limited liability company that entered into a renewable six-month consulting agreement with the Company dated September 5, 2019 and that the Company failed to make certain monthly payments due thereunder for the months of October 2019 through March 2020, summing to $42,000. The complaint alleges claims for breach of contract, quantum meruit Although the Company has not yet filed an answer in this action, because the time period within which it must file an answer has not expired, the Company will deny that it owes any sum to SCS, LLC, under the consulting agreement or otherwise. In addition, the Company expects to file counterclaims against SCS, LLC for an amount in excess of $42,000, on the grounds that SCS, LLC, breached its express obligations under the consulting agreement to hold Company confidential information “in strictest confidence” and to use that information, if at all, “for the sole and exclusive benefit” of the Company. Accordingly, the Company intends to mount a vigorous defense to the action, as Company management believes the action to be entirely bereft of merit. Shareholder Derivative Action On June 25, 2020, the Company was served with a purported shareholder derivative action filed in the Circuit Court of the 15 th SCS, LLC, derivatively on behalf of Transportation and Logistics Systems, Inc. v. John Mercadante, Jr., Douglas Cerny, Sebastian Giordano, Ascentaur LLC and Transportation and Logistics Systems, Inc The action was filed on June 18, 2020 with filing number 109085636. The plaintiff in this action alleges it is a limited liability company formed by a former chief executive officer and director of the Company, Lawrence Sands. The complaint alleges that between April 2019 and June 2020, the current chairman and chief executive officer of the Company, the current chief development officer of the Company and, since February 2020, the Company’s restructuring consultant, breached fiduciary duties owed to the Company. The Company’s restructuring consultant, defendant Sebastian Giordano, renders his services through defendant Ascentaur LLC. In the Company’s understanding, the full text of the complaint is, or soon will be, available on-line at the Court’s website. Briefly, the complaint alleges that the Company’s chief executive officer breached duties to the Company by, among other things, requesting, in mid-2019, that certain preferred equity holders, including SCS, convert their preferred shares into Company common stock in order to facilitate an equity offering by the Company and then not consummating an equity offering. The complaint also alleges that current management caused the Company to engage in wasteful and unnecessary transactions such as taking merchant cash advances (MCA) on disadvantageous terms. The complaint also alleges that current management “issued themselves over two million shares of common stock without consideration.” The complaint seeks unspecified compensatory and punitive damages for breach of fiduciary duty, negligent breach of fiduciary duty, constructive fraud, and civil conspiracy and the appointment of a receiver or custodian for the Company. The Company’s current management has tendered the complaint to its directors’ and officers’ liability carrier for defense and indemnity purposes. Company management, Mr. Giordano and Ascentaur LLC each advise that they deny each and every allegation of wrongdoing alleged in the complaint. Among other things, current management asserts that it made every effort to consummate an equity offering in late 2019 and early 2020 and could not do so solely because of the Company’s precarious financial condition. Current management also asserts it made clear to SCS and other preferred equity holders, before they converted their shares into common stock, that there was no guarantee the Company would be able to consummate an equity offering in late 2019 or early 2020. In addition, current management asserts that it received equity in the Company on terms that were entirely fair to the Company and entered into MCA transactions solely because there was no other financing available to the Company. Accordingly, current Company management, Mr. Giordano and Ascentaur LLC intend to mount a vigorous defense to the action, as they believe the action to be entirely bereft of merit. Other than discussed above, as of March 31, 2020, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on results of our operations. Amazon On June 19, 2020, Amazon Logistics, Inc. (“Amazon”) notified Prime EFS in writing that Amazon does not intend to renew its Delivery Service Partner (DSP) Agreement with Prime EFS when that agreement (expires see Note 13 – Subsequent Events). Leases See Note 11. |
Related Party Transactions and
Related Party Transactions and Balances | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Balances | NOTE 10– RELATED PARTY TRANSACTIONS AND BALANCES Due to related parties In connection with the acquisition of Prime EFS, the Company acquired a balance of $14,019 that was due from the former majority owner of Prime EFS. Pursuant to the terms of the SPA, the Company agreed to pay $489,174 in cash to the former majority owner of Prime EFS who then advanced back the $489,174 to Prime EFS. During the period from Acquisition Date of Prime EFS (June 18, 2018) to December 31, 2018, the Company repaid $216,155 of this advance. During the year ended December 31, 2019, the Company repaid $130,000 of this advance. During the three months ended March 31, 2020, the Company repaid $35,000 of this advance. This advance is non-interest bearing and is due on demand. At March 31, 2020 and December 31, 2019, amount due to this related party amounted to $94,000 and $129,000, respectively, and have been included in due to related parties on the accompanying condensed consolidated balance sheets. During the year ended December 31, 2019, an employee of Prime EFS who exerts significant influence over the business of Prime EFS, advanced the Company $88,000. Additionally, during the three months ended March 31, 2020, this employee advanced the Company $75,000 and was repaid $93,000. During the three months ended March 31, 2020, the Company paid this employee interest of $57,200 related to these working capital advances. At March 31, 2020 and December 31, 2019, amounts due to this related party amounted to $70,000 and $88,000, respectively, and have been included in due to related parties on the accompanying condensed consolidated balance sheets. During the year ended December 31, 2019, an entity which is controlled by an employee of Prime EFS who exerts significant influence over the business of Prime EFS advanced the Company $25,000. In January 2020, this advance was repaid. During the three months ended March 31, 2020, the Company paid this entity interest expense of $27,500 related to 2019 working capital advances made. At March 31, 2020 and December 31, 2019, amounts due to this related party entity amounted to $0 and $25,000, and has been included in due to related parties on the accompanying condensed consolidated balance sheets, respectively. Notes payable – related parties On July 3, 2019, the Company entered into a note agreement with an entity that is affiliated with the Company’s chief executive officer, in the amount of $500,000. Commencing on September 3, 2019, and continuing on the third day of each month thereafter, payments of interest only on the outstanding principal balance of this note is due and payable. Commencing on January 3, 2020 and continuing on the third day of each month thereafter through January 3, 2021, equal payments of principal and interest will be made. The principal amount of this note and all accrued, but unpaid interest under this note will be due and payable on the earlier to occur of (i) January 3, 2021 (the “ CEO Note Maturity Date At March 31, 2020 and December 31, 2019, notes payable – related party amounted to $500,000 and $500,000, respectively. |
Operating Lease Right-of-Use ('
Operating Lease Right-of-Use ('ROU') Assets and Operating Lease Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Lessee Disclosure [Abstract] | |
Operating Lease Right-of-Use ("ROU") Assets and Operating Lease Liabilities | NOTE 11 – OPERATING LEASE RIGHT-OF-USE (“ROU”) ASSETS AND OPERATING LEASE LIABILITIES On November 30, 2018, the Company entered into a commercial lease agreement for the lease of sixty parking spaces under an operating lease through November 2023 for a monthly rental fee of $6,000. Either party can cancel this lease on the annual anniversary date of the lease provided that the party who wishes to terminate provides the other party with at least 30-day prior written notice of such termination. In December 2018, the Company entered into a lease agreement for the lease of office and warehouse space and parking spaces under a non-cancelable operating lease through December 2023. From the lease commencement date until the last day of the second lease year, monthly rent will be $14,000. At the beginning of the 30 th In July 2019, the Company entered into a 4.5-year lease agreement for the lease of office and warehouse space and parking spaces under a non-cancelable operating lease through February 2024. From the lease commencement date until the last day of the second lease year, monthly rent will be $10,000. At the beginning of the 25 th In July 2019, the Company entered into a five-year lease agreement for the lease of office and warehouse space and parking spaces under a non-cancelable operating lease through August 2024. During the first year on the lease term, the base monthly rent will be $18,000 and will increase by 3% each lease year. Additionally, the Company will pay its portion of operating expenses. The Company will have one option to renew the term of this lease for an additional five years. As of December 31, 2019, the Company paid a security deposit of $18,000. In adopting ASC Topic 842, Leases (Topic 842), the Company has elected the ‘package of practical expedients’, which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs (see Note 2). In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 month or less. On January 1, 2019, upon adoption of ASC Topic 842, the Company recorded right-of-use assets and lease liabilities of $631,723. Additionally, during the year ended December 31, 2019, the Company entered into new operating lease agreements as discussed above, that require the Company to record a lease liability and a right of use asset on its consolidated balance sheet, at fair value. Accordingly, the Company recorded right-of-use assets and lease liabilities of $1,352,597. During the three months ended March 31, 2020 and 2019, in connection with these operating leases, other miscellaneous rental payments and common area maintenance costs, the Company recorded rent expense of $164,350 and $98,831, respectively, which is expensed during the period and included in operating expenses on the accompanying condensed consolidated statements of operations. The significant assumption used to determine the present value of the lease liability was a discount rate of 10% to 12% which was based on the Company’s estimated incremental borrowing rate. At March 31, 2020 and December 31, 2019, right-of-use asset (“ROU”) is summarized as follows: March 31, 2020 December 31, 2019 Office leases right of use assets $ 1,984,320 $ 1,984,320 Less: accumulated amortization into rent expense (278,324 ) (233,890 ) Balance of ROU assets as of end of period $ 1,705,996 $ 1,750,430 At March 31, 2020 and December 31, 2019, operating lease liabilities related to the ROU assets are summarized as follows: March 31, 2020 December 31, 2019 Lease liabilities related to office leases right of use assets $ 1,734,521 $ 1,773,384 Less: current portion of lease liabilities (341,483 ) (333,126 ) Lease liabilities – long-term $ 1,393,038 $ 1,440,258 At March 31, 2020, future minimum base lease payments due under non-cancelable operating leases are as follows: Year ended March 31, Amount 2021 $ 509,040 2022 522,913 2023 532,205 2024 485,440 2025 101,296 Total minimum non-cancelable operating lease payments 2,150,894 Less: discount to fair value (416,373 ) Total lease liability at March 31, 2020 $ 1,734,521 |
Concentrations
Concentrations | 3 Months Ended |
Mar. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentrations | NOTE 12 – CONCENTRATIONS For the three months ended March 31, 2020 and 2019, one customer, Amazon represented 97.9% and 99.0% of the Company’s total net revenues. At March 31, 2020, this one customer represented 93.9% of the Company’s accounts receivable balance. On June 19, 2020, Amazon Logistics, Inc. (“Amazon”) notified Prime EFS in writing that Amazon does not intend to renew its Delivery Service Partner (DSP) Agreement with Prime EFS when that agreement expires (see Note 13 – Subsequent Events). During the three months ended March 31, 2020 and 2019, the Company rented delivery vans and trucks from a limited number of vendors. Any shortage of supply of vans and trucks available to rent to the Company could have a material adverse effect on the Company’s business, financial condition and results of operations. All revenues are derived from customers in the United States. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 13 – SUBSEQUENT EVENTS Convertible debt and related warrants On April 1, 2020, the Company closed on a securities purchase agreement with an accredited investor (the “ April 1 Purchase Agreement April 1 Note April 1 Warrant April 1 Maturity Date April 1 Note Amortization Payment April 1 Note Stock Payment The April 1 Note may be prepaid, provided that certain Equity Conditions, as defined in the April 1 Note, have been met (or any such failure to meet the Equity Conditions has been waived): (i) from April 1, 2020 until and through July 1, 2020 at an amount equal to 105% of the aggregate of the outstanding principal balance of the April 1 Note and accrued and unpaid interest, and (ii) after July 1, 2020 at an amount equal to 115% of the aggregate of the outstanding principal balance of the April 1 Note and accrued and unpaid interest. In the event that the Company closes a Public Offering, the holder may elect to: (x) have its principal and accrued interest prepaid directly from the proceeds of the Public Offering at the prices set forth above, or (y) exchange its April 1 Note at the closing of the Public Offering for the securities being issued in the Public Offering at the Public Offering prices based upon the outstanding principal, accrued interest and other charges, or (z) continue to hold the April 1 Note. Except for a Public Offering and April 1 Note Amortization Payments, in order to prepay the April 1 Note, the Company must provide at least 30 days’ prior written notice to the holder, during which time the holder may convert the April 1 Note in whole or in part at the then-applicable conversion price. For avoidance of doubt, the April 1 Note Amortization Payments will be prepayments and are subject to prepayment penalties equal to 115% of the April 1 Note Amortization Payment. In the event the Company consummates a Public Offering while the April 1 Note is outstanding, then 25% of the net proceeds of such offering will, within two business days of the closing of such Public Offering, be applied to reduce the outstanding obligations pursuant to the April 1 Note. Until the April 1 Note is no longer outstanding, it is convertible, in whole or in part, at any time, and from time to time, into shares of common stock at the option of the investor. The “Conversion Price” in effect on any Conversion Date (as defined in the April 1 Note) means, as of any Conversion Date (as defined in the April 1 Note) or other date of determination, $0.40 per share, subject to adjustment as provided herein. If an Event of Default (as defined in the April 1 Note) has occurred, regardless of whether it has been cured or remains ongoing, the April 1 Note is convertible at the lower of: (i) $0.40 and (ii) 70% of the second lowest closing price of the common stock as reported on the Trading Market (as defined in the April 1 Note) during the 20 consecutive Trading Day (as defined in the April 1 Note) period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable notice of conversion. All such conversion price determinations are to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately. The April 1 Warrant is exercisable at any time on or after the date of the issuance and entitles the investor to purchase shares of the Company’s common stock for a period of five years from the initial date the April 1 Warrant becomes exercisable. Under the terms of the April 1 Warrant, the investor is entitled to exercise the April 1 Warrant to purchase up to 8,800 shares of the Company’s common stock at an initial exercise price of $0.40, subject to adjustment as detailed in the April 1 Warrant. In connection with the issuance of the April 1 Note, the Company determined that various terms of the April 1 Note and April 1 Warrant, including the April 1 Note Stock Payment terms discussed above and in Note 6, caused derivative treatment of the embedded conversion option and warrant. On the initial measurement dates, the fair values of the embedded conversion option derivative and warrant of $1,334 was recorded as derivative liabilities and was allocated as a debt discount up to the net proceeds of the April 1 Note of $1,334. Due to the default of August 2019 Note Amortization Payments due on our August 2019 Notes and other notes as discussed in Note 6, the April 1 Note was deemed in default. Accordingly, the outstanding principal balance on date of default increased by 30% which amounted to approximately $6,600, default interest accrues at 18%, and the default conversion terms apply. On April 20, 2020, the Company issued and sold to an investor a convertible promissory note in the principal amount of $456,500 (the “ April 20 Note April 20 Note Maturity Date April 20 Note Amortization Payment April 20 Note Stock Payment The April 20 Note may be prepaid, provided that Equity Conditions, as defined in the April 20 Note, have been met (or any such failure to meet the Equity Conditions has been waived): (i) from April 20, 2020 until and through July 20, 2020 at an amount equal to 105% of the aggregate of the outstanding principal balance of the April 20 Note and accrued and unpaid interest, and (ii) after July 20, 2020 at an amount equal to 115% of the aggregate of the outstanding principal balance of the April 20 Note and accrued and unpaid interest. In the event that the Company closes a Public Offering, the holder may elect to: (x) have its principal and accrued interest prepaid directly from the proceeds of the Public Offering at the prices set forth above, or (y) exchange its April 20 Note at the closing of the Public Offering for the securities being issued in the Public Offering at the Public Offering prices based upon the outstanding principal, accrued interest and other charges, or (z) continue to hold the April 20 Note. Except for a Public Offering and April 20 Note Amortization Payments, in order to prepay the April 20 Note, the Company must provide at least 30 days’ prior written notice to the holder, during which time the holder may convert the April 20 Note in whole or in part at the then=applicable conversion price. For avoidance of doubt, the April 20 Note Amortization Payments will be prepayments and are subject to prepayment penalties equal to 115% of the April 20 Note Amortization Payment. In the event the Company consummates a Public Offering while the April 20 Note is outstanding, then 25% of the net proceeds of such offering will, within two business days of the closing of such Public Offering, be applied to reduce the outstanding obligations pursuant to the April 20 Note. Until the April 20 Note is no longer outstanding, it is convertible, in whole or in part, at any time, and from time to time, into shares of common stock at the option of the investor. The “Conversion Price” in effect on any Conversion Date (as defined in the April 20 Note) means, as of any Conversion Date or other date of determination, the lower of: (i) $0.40 and (ii) 70% of the second lowest closing price of the common stock as reported on the Trading Market (as defined in the April 20 Note) during the 20 consecutive Trading Day (as defined in the April 20 Note) period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable notice of conversion. All such Conversion Price determinations are to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately. In connection with the issuance of the April 20 Note, the Company determined that various terms of the April 20 Note caused derivative treatment of the embedded conversion option and warrant. On the initial measurement dates, the fair values of the embedded conversion option derivative of $400,365 was recorded as derivative liabilities and was allocated as a debt discount of $400,365. Due to the default of August 2019 Note Amortization Payments due on our August 2019 Notes and other notes as discussed in Note 6, the April 20 Note was deemed in default. Accordingly, the outstanding principal balance on date of default increased by 30% which amounted to approximately $136,950, default interest accrues at 18%, and the default conversion terms apply. Paycheck Protection Program Promissory Notes On April 2, 2020, the Company’s subsidiary, Shypdirect, entered into a Paycheck Protection Program promissory note (the “ Shypdirect PPP Loan SBA Paycheck Protection Program CARES Act On April 15, 2020, the Company’s subsidiary, Prime EFS, entered into a Paycheck Protection promissory note (the “ Prime EFS PPP Loan PPP Loans Neither Prime EFS nor Shypdirect provided any collateral or guarantees for these PPP Loans, nor did they pay any facility charge to obtain the PPP Loans. These promissory notes provide for customary events of default, including, among others, those relating to failure to make payment, bankruptcy, breaches of representations and material adverse effects. Prime EFS and Shypdirect may prepay the principal of the PPP Loans at any time without incurring any prepayment charges. These PPP Loans may be forgiven partially or fully if the loan proceeds are used for covered payroll costs, rent and utilities, provided that such amounts are incurred during the twenty- four week period that commenced on May 1, 2020 and at least 60% of any forgiven amount has been used for covered payroll costs. Any forgiveness of these PPP Loans will be subject to approval by the SBA and M&T Bank and will require Prime EFS and Shypdirect to apply for such treatment in the future. The Company expects to exhaust such funds in the third quarter and file for forgiveness in the third quarter, although there is no guarantee that such forgiveness will be granted. Common shares issued for conversion of convertible debt and interest During the period from April 1, 2020 to June 29, 2020, the Company issued 123,279,793 shares of its common stock in connection with the conversion of convertible notes payable of $803,827 and accrued interest of $68,933, and fees of $500. The conversion price was based on contractual terms of the related debt. Common shares issued in connection cashless exercise of warrants During the period from June 1, 2020 to June 29, 2020, the Company issued 70,203,889 shares of its common stock in connection with the cashless exercise of warrants. The exercise price was based on contractual terms of the related debt. Warrants On June 16, 2020, the Company issued an aggregate of 28,100,000 five-year warrants for the purchase of 28,100,000 shares of the Company’s common stock at an exercise price of $0.06 per share, subject to adjustment as defined in the respective warrant to two consultants for services rendered. Series C preferred share Pursuant to the August 2019 Purchase Agreement (see Note 6), by and among the Company and the investors named therein (the “ August 2019 Investors August 2019 Reserve Requirement inter alia The Company was unable to comply with the August 2019 Reserve Requirement within 45 days after written notice from an August 2019 Investor. Accordingly, on June 5, 2020, the Company sold to John Mercadante, for $100.00, 1 share of Series C Preferred Stock which has voting power equal to 51% of the number of votes eligible to vote at any special or annual meeting of the Company’s stockholders (with the power to take action by written consent in lieu of a stockholders meeting) for the sole purpose of amending the Company’s Amended and Restated Articles of Incorporation to increase the number of shares of common stock that the Company is authorized to issue. Upon the effectiveness of the amendment, the Series C Preferred Stock will be automatically cancelled. The Series C Preferred Stock is not entitled to vote on any other matter, is not entitled to dividends, is not convertible into any other security of the Company and is not entitled to any distributions upon liquidation of the Company. Authorized shares On June 26, 2020, stockholders holding at least 51% of the voting power of the stock of the Company entitled to vote thereon consented, in writing, to amend the Company’s Amended and Restated Articles of Incorporation, by adoption of the Certificate of Amendment to the Amended and Restated Articles of Incorporation of the Company, which will authorize an increase of the number of shares of common stock that the Company may issue to 4,000,000,000 shares, par value $0.001 (the “ Certificate of Amendment The Company filed a preliminary information statement on Schedule 14C regarding the stockholders’ consent to the Certificate of Amendment with the SEC on June 8, 2020. The Company plans to file a definitive information statement on Schedule 14C on or before June 30, 2020 and to first mail that information statement to stockholders on or before June 30, 2020. The Certificate of Amendment is expected to take effect on July 20, 2020. Amazon Logistics Delivery Service Partner Agreement On June 19, 2020, Amazon Logistics, Inc. (“Amazon”) notified Prime EFS in writing, that Amazon does not intend to renew its Delivery Service Partner (DSP) Agreement with Prime EFS when that agreement (the “ In-Force Agreement Approximately 74% of the Company’s approximately $32 million of revenue reported in its recent Form 10-K Annual Report for the calendar year ended December 31, 2019 was attributable to Prime EFS’s last-mile DSP business with Amazon. Even if it lost the Amazon last-mile business, the Company intends to generate significant revenues from its mid-mile and long-haul business. While a termination of the Amazon last-mile business will have a material adverse impact on the Company’s business, the Company will continue to: (i) seek to expand its last-mile business with other non-Amazon customers, which includes having recently begun making deliveries for one of the largest carriers in the world; (ii) explore other strategic relationships; and (iii) identify potential acquisition opportunities, while continuing to execute our restructuring plan, commenced in February 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of presentation and principles of consolidation The condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and disclosures necessary for comprehensive presentation of financial position, results of operations or cash flow. However, these unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these unaudited interim condensed consolidated financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2019, and notes thereto included in the Company’s annual report on Form 10-K, filed on May 29, 2020. The Company follows the same accounting policies in the preparation of its annual and interim reports. The results of operations in interim periods are not necessarily an indication of operating results to be expected for the full year. The unaudited condensed consolidated financial statements of the Company include the accounts of TLSS and its wholly owned subsidiaries, Save On (through April 30, 2019), Prime EFS and Shypdirect. All intercompany accounts and transactions have been eliminated in consolidation. On May 1, 2019, the Company entered into a Share Exchange Agreement with Save On and Steven Yariv, whereby the Company returned all of the stock of Save On to Steven Yariv in exchange for Mr. Yariv conveying 1,000,000 shares of common stock of the Company back to the Company. Pursuant to Accounting Standard Codification (“ASC”) 205-20-45, the financial statement in which net income or loss of a business entity is reported shall report the results of operations of the discontinued operation in the period in which a discontinued operation either has been disposed of or is classified as held for sale. Accordingly, beginning in the second quarter of 2019, the period that Save On was disposed of, the Company reflects Save On as a discontinued operation and such presentation is retroactively applied to all periods presented in the accompanying condensed consolidated financial statements. |
Going Concern | Going concern The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. As reflected in the accompanying condensed consolidated financial statements, for the three months ended March 31, 2020, the Company had a net loss of $3,453,338 and net cash used in operations was $110,074. Additionally, the Company had an accumulated deficit, shareholders’ deficit, and a working capital deficit of $82,765,210, $26,839,561 and $27,678,817, respectively, at March 31, 2020. Furthermore, the Company failed to make required payments of principal and interest on certain of its convertible debt instruments and notes payable (see Note 6). On June 19, 2020, Amazon Logistics, Inc. (“Amazon”) notified Prime EFS in writing that Amazon does not intend to renew its Delivery Service Partner (DSP) Agreement with Prime EFS when that agreement expires (see Note 13 – Subsequent Events). It is management’s opinion that these factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. In April 2020, the Company’s subsidiaries, Prime EFS and Shypdirect, entered into Paycheck Protection Program promissory notes with M&T Bank in the aggregate amount of $3,446,152 (see Note 13). Management cannot provide assurance that the Company will ultimately achieve profitable operations, become cash flow positive, or raise additional debt and/or equity capital. The Company is seeking to raise capital through additional debt and/or equity financings to fund its operations in the future. Although the Company has historically raised capital from sales of common shares and from the issuance of convertible promissory notes and notes payable, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail its operations. These consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Use of Estimates | Use of estimates The preparation of the condensed consolidated financial statements, in accordance with U.S. GAAP 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates included in the accompanying unaudited condensed consolidated financial statements and footnotes include the valuation of accounts receivable, the useful life of property and equipment, the valuation of intangible assets, the valuation of right of use assets and related liabilities, assumptions used in assessing impairment of long-lived assets, estimates of current and deferred income taxes and deferred tax valuation allowances, the fair value of non-cash equity transactions, the valuation of derivative liabilities, and the value of claims against the Company. |
Fair Value of Financial Instruments | Fair value of financial instruments The Financial Accounting Standards Board (“FASB”) issued ASC 820 — Fair Value Measurements and Disclosures , The three levels of the fair value hierarchy are as follows: ● Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. ● Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. ● Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The Company measures certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at March 31, 2020 and December 31, 2019: At March 31, 2020 At December 31, 2019 Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Derivative liabilities — — $ 13,978,061 — — $ 2,135,939 A roll forward of the level 3 valuation financial instruments is as follows: For the Three Months ended For the Three Months ended Balance at beginning of period $ 2,135,939 $ 7,888,684 Initial valuation of derivative liabilities included in debt discount 1,267,474 - Initial valuation of derivative liabilities included in derivative expense 13,336,234 - Gain on extinguishment of debt related to repayment/conversion of debt (662,398 ) (246,111 ) Reclassification of warrants from equity to derivative liabilities 11,381,885 - Cumulative effect adjustment for change in derivative accounting - (838,471 ) Change in fair value included in derivative (gain) expense (13,481,073 ) 13,384,260 Balance at end of period $ 13,978,061 $ 20,188,362 The Company accounts for its derivative financial instruments, consisting of certain conversion options embedded in our convertible instruments and warrants, at fair value using level 3 inputs. The Company determined the fair value of these derivative liabilities using the Black-Scholes option pricing model, binomial lattice models, or other accepted valuation practices. When determining the fair value of its financial assets and liabilities using these methods, the Company is required to use various estimates and unobservable inputs, including, among other things, expected terms of the instruments, expected volatility of its stock price, expected dividends, and the risk-free interest rate. Changes in any of the assumptions related to the unobservable inputs identified above may change the fair value of the instrument. Increases in expected term, anticipated volatility and expected dividends generally result in increases in fair value, while decreases in the unobservable inputs generally result in decreases in fair value. ASC 825-10 “ Financial Instruments The carrying amounts reported in the condensed consolidated balance sheets for cash, accounts receivable, accounts payable and accrued expenses approximate their fair values based on the short-term maturity of these instruments. The carrying amount of the Company’s convertible notes payable and promissory note obligations approximate fair value, as the terms of these instruments are consistent with terms available in the market for instruments with similar risk. |
Cash and Cash Equivalents | Cash and cash equivalents For purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. At March 31, 2020 and December 31, 2019, the Company did not have any cash equivalents. The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. There were no balances in excess of FDIC insured levels as of March 31, 2020 and December 31, 2019. The Company has not experienced any losses in such accounts through March 31, 2020. |
Accounts Receivable | Accounts receivable Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. |
Property and Equipment | Property and equipment Property are stated at cost and are depreciated using the straight-line method over their estimated useful lives of five to six years. Leasehold improvements are depreciated over the shorter of the useful life or lease term including scheduled renewal terms. Maintenance and repairs are charged to expense as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. |
Intangible Asset | Intangible asset Intangible assets are carried at cost less accumulated amortization, computed using the straight-line method over the estimated useful life, less any impairment charges. |
Leases | Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The updated guidance requires lessees to recognize lease assets and lease liabilities for most operating leases. In addition, the updated guidance requires that lessors separate lease and non-lease components in a contract in accordance with the new revenue guidance in ASC 606. The updated guidance is effective for interim and annual periods beginning after December 15, 2018. On January 1, 2019, the Company adopted ASU No. 2016-02, applying the package of practical expedients to leases that commenced before the effective date whereby the Company elected to not reassess the following: (i) whether any expired or existing contracts contain leases and; (ii) initial direct costs for any existing leases. For contracts entered into on or after the effective date, at the inception of a contract the Company assessed whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether it obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. The Company will allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a term of 12 months or less. Operating lease ROU assets represents the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in general and administrative expenses in the condensed consolidated statements of operations. |
Impairment of Long-Lived Assets | Impairment of long-lived assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. |
Segment Reporting | Segment reporting The Company uses “the management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker is the chief executive officer of the Company, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. On May 1, 2019, the Company disposed of its Save On business segment and the results of operations of Save On are included in discontinued operations. Accordingly, during the three months ended March 31, 2020 and 2019, the Company believes that it operates in one operating segment related to deliveries for on-line retailers in New York, New Jersey, Pennsylvania and other areas, and tractor trailer and box truck deliveries of product on the east coast of the United States from one distributor’s warehouse to another warehouse or from a distributor’s warehouse to the post office. |
Derivative Financial Instruments | Derivative financial instruments The Company has certain financial instruments that are embedded derivatives associated with capital raises. The Company evaluates all of its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815-10-05-4, Derivatives and Hedging Contracts in Entity’s Own Equity In July 2017, FASB issued ASU No. 2017-11, Earnings Per Share Distinguishing Liabilities from Equity Derivatives and Hedging Accounting for Certain Financial Instruments with Down Round Features |
Revenue Recognition and Cost of Revenue | Revenue recognition and cost of revenue The Company adopted ASC 606, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605, Revenue Recognition. This ASC is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASC also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer service orders, including significant judgments. For the Company’s Prime EFS and Shypdirect business activities, the Company recognizes revenues and the related direct costs of such revenue which generally include compensation and related benefits, gas costs, insurance, parking and tolls, truck rental fees, and maintenance fees as of the date the freight is delivered which is when the performance obligation is satisfied. In accordance with ASC Topic 606, the Company recognizes revenue on a gross basis. Our payment terms are net seven days from acceptance of delivery. The Company does not incur incremental costs obtaining service orders from its Prime EFS and Shypdirect customers, however, if the Company did, because all of Prime EFS and Shypdirect customer contracts are less than a year in duration, any contract costs incurred would be expensed rather than capitalized. The revenue that the Company recognizes arises from deliveries of packages on behalf of the Company’s customers. Primarily, the Company’s performance obligations under these service orders correspond to each delivery of packages that the Company makes under the service agreements. Control of the package transfers to the recipient upon delivery. Once this occurs, the Company has satisfied its performance obligation and the Company recognizes revenue. For the Company’s Save On business activities, through the date of disposition on May 1, 2019, the Company recognized revenues and the related direct costs of such revenue which included carrier fees and dispatch costs as of the date the freight was delivered by the carrier which was when the performance obligation is satisfied. Customer payments received prior to delivery were recorded as a deferred revenue liability and related carrier fees if paid prior to delivery were recorded as a deferred expense asset. In accordance with ASC Topic 606, the Company recognized revenue on a gross basis. Our payment terms for corporate customers were net 30 days from acceptance of delivery and individual customers generally were required to pay in advance. The Company did not incur incremental costs obtaining service orders from its Save On customers, however, if the Company did, because all of the Save On customer’s contracts were less than a year in duration, any contract costs incurred were expensed rather than capitalized. The revenue that the Company recognized arose from service orders it received from its Save On customers. The Company’s performance obligations under these service orders corresponded to each delivery of a vehicle that the Company made for its customer under the service orders; as a result, each service order generally contained only one performance obligation based on the delivery to be completed. Management has reviewed the revenue disaggregation disclosure requirements pursuant to ASC 606 and determined that no further disaggregation disclosure is required to be presented. |
Basic and Diluted Loss Per Share | Basic and diluted loss per share Pursuant to ASC 260-10-45, basic loss per common share is computed by dividing net loss attributable to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Potentially dilutive common shares consist of common stock issuable for stock warrants (using the treasury stock method) and shares issuable for convertible debt (using the as-if converted method). These common stock equivalents may be dilutive in the future. Potentially dilutive common shares were excluded from the computation of diluted shares outstanding as they would have an anti-dilutive impact on the Company’s net losses and consisted of the following: March 31, 2020 March 31, 2019 Stock warrants 181,563,164 1,442,434 Stock options 80,000 - Convertible debt 324,772,402 4,415,776 Series A convertible preferred stock - 8,333,333 Series B convertible preferred stock 1,700,000 - |
Stock-Based Compensation | Stock-based compensation Stock-based compensation is accounted for based on the requirements of ASC 718 – “Compensation – Stock Compensation Improvements to Employee Share-Based Payment |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In July 2017, FASB issued ASU No. 2017-11, Earnings Per Share Distinguishing Liabilities from Equity Derivatives and Hedging Accounting for Certain Financial Instruments with Down Round Features In August 2018, the FASB issued ASU 2018-13 to modify the disclosure requirements on fair value measurements. The amendments are effective for years beginning after December 15, 2019. An entity is permitted to early adopt any removed or modified disclosures and delay adoption of the additional disclosures until the effective date. Most amendments should be applied retrospectively, but certain amendments will be applied prospectively. The adoption of this standard did not have an impact on the Company’s consolidated financial position, results of operations and cash flows. There are currently no other accounting standards that have been issued but not yet adopted that we believe will have a significant impact on our consolidated financial position, results of operations or cash flows upon adoption. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The Company measures certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at March 31, 2020 and December 31, 2019: At March 31, 2020 At December 31, 2019 Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Derivative liabilities — — $ 13,978,061 — — $ 2,135,939 |
Schedule of Reconciliation of Derivative Liability for Level 3 Inputs | A roll forward of the level 3 valuation financial instruments is as follows: For the Three Months ended For the Three Months ended Balance at beginning of period $ 2,135,939 $ 7,888,684 Initial valuation of derivative liabilities included in debt discount 1,267,474 - Initial valuation of derivative liabilities included in derivative expense 13,336,234 - Gain on extinguishment of debt related to repayment/conversion of debt (662,398 ) (246,111 ) Reclassification of warrants from equity to derivative liabilities 11,381,885 - Cumulative effect adjustment for change in derivative accounting - (838,471 ) Change in fair value included in derivative (gain) expense (13,481,073 ) 13,384,260 Balance at end of period $ 13,978,061 $ 20,188,362 |
Schedule of Potentially Dilutive Shares Excluded from Computation of Diluted Shares Outstanding | Potentially dilutive common shares were excluded from the computation of diluted shares outstanding as they would have an anti-dilutive impact on the Company’s net losses and consisted of the following: March 31, 2020 March 31, 2019 Stock warrants 181,563,164 1,442,434 Stock options 80,000 - Convertible debt 324,772,402 4,415,776 Series A convertible preferred stock - 8,333,333 Series B convertible preferred stock 1,700,000 - |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Statements of Operations for Discontinued Operations | The summarized operating result of discontinued operations included in the Company’s condensed consolidated statements of operations is as follows: Three Months Ended March 31, 2020 2019 Revenues $ - $ 1,131,525 Cost of revenues - 851,196 Gross profit - 280,329 Operating expenses - 266,668 Income from discontinued operations - 13,661 Loss on disposal of discontinued operations - - Income from discontinued operations, net of income taxes $ - $ 13,661 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | At March 31, 2020 and December 31, 2019, accounts receivable, net consisted of the following: March 31, 2020 December 31, 2019 Accounts receivable $ 1,083,225 $ 983,771 Allowance for doubtful accounts (20,000 ) (20,000 ) Accounts receivable, net $ 1,063,225 $ 963,771 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | At March 31, 2020 and December 31, 2019, property and equipment consisted of the following: Useful Life March 31, 2020 December 31, 2019 Delivery trucks and vehicles 5 - 6 years $ 761,652 $ 301,142 Equipment 5 years 3,470 3,470 Subtotal 765,122 304,612 Less: accumulated depreciation (78,394 ) (64,206 ) Property and equipment, net $ 686,728 $ 240,406 |
Convertible Promissory Notes _2
Convertible Promissory Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Fair Value of Derivative Liabilities Estimated Using Black-Sholes Valuation Model | During the three months ended March 31, 2020 and 2019, the fair value of the derivative liabilities, warrants and conversion option was estimated using the Binomial valuation model and the Monte-Carlo simulation model with the following assumptions: 2020 2019 Expected dividend rate - - Expected term (in years) 1.00 to 5.00 0.05 to 0.25 Volatility 154.2% to 257.0 % 228.1 % Risk-free interest rate 0.14% to 1.62 % 2.40 % |
Schedule of Convertible Promissory Notes | At March 31, 2020 and December 31, 2019, convertible promissory notes are as follows: March 31, 2020 December 31, 2019 Principal amount $ 8,498,121 $ 5,459,909 Add: put premium 311,660 385,385 Less: unamortized debt discount (3,162,352 ) (2,210,950 ) Convertible notes payable, net 5,647,429 3,634,344 Less: current portion of convertible notes payable (5,647,429 ) (3,634,344 ) Convertible notes payable, net – long-term $ - $ - |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | At March 31, 2020 and December 31, 2019, notes payable consisted of the following: March 31, 2020 December 31, 2019 Principal amounts $ 2,106,438 $ 3,187,125 Less: unamortized debt discount (11,318 ) (762,122 ) Principal amounts, net 2,095,120 2,425,003 Less: current portion of notes payable (1,733,440 ) (2,425,003 ) Notes payable – long-term $ 361,680 $ - |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Summary of Stock Option Activities | Stock option activities for the three months ended March 31, 2020 are summarized as follows: Number of Options Weighted Weighted Average Remaining Aggregate Balance Outstanding December 31, 2019 80,000 $ 8.84 - $ - Granted - - Cancelled - - Balance Outstanding March 31, 2020 80,000 $ 8.84 4.08 $ - Exercisable, March 31, 2020 20,000 $ 8.84 4.08 $ - |
Summary of Warrant Activities | Warrant activities for the three months ended March 31, 2020 are summarized as follows: Number of Warrants Weighted Weighted Average Remaining Contractual Term (Years) Aggregate Balance Outstanding December 31, 2019 3,649,861 $ 2.41 4.66 $ 311,070 Granted 818,400 0.40 Increase in warrants related to price protection 177,094,903 0.02 Balance Outstanding March 31, 2020 181,563,164 $ 0.05 4.22 $ 1,731,883 Exercisable, March 31, 2020 181,563,164 $ 0.05 4.22 $ 1,731,883 |
Operating Lease Right-of-Use _2
Operating Lease Right-of-Use ('ROU') Assets and Operating Lease Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Lessee Disclosure [Abstract] | |
Schedule of Right of Use Asset | At March 31, 2020 and December 31, 2019, right-of-use asset (“ROU”) is summarized as follows: March 31, 2020 December 31, 2019 Office leases right of use assets $ 1,984,320 $ 1,984,320 Less: accumulated amortization into rent expense (278,324 ) (233,890 ) Balance of ROU assets as of end of period $ 1,705,996 $ 1,750,430 |
Schedule of Operating Lease Liability Related to ROU Asset | At March 31, 2020 and December 31, 2019, operating lease liabilities related to the ROU assets are summarized as follows: March 31, 2020 December 31, 2019 Lease liabilities related to office leases right of use assets $ 1,734,521 $ 1,773,384 Less: current portion of lease liabilities (341,483 ) (333,126 ) Lease liabilities – long-term $ 1,393,038 $ 1,440,258 |
Schedule of Lease Payments Due Under Operating Leases | At March 31, 2020, future minimum base lease payments due under non-cancelable operating leases are as follows: Year ended March 31, Amount 2021 $ 509,040 2022 522,913 2023 532,205 2024 485,440 2025 101,296 Total minimum non-cancelable operating lease payments 2,150,894 Less: discount to fair value (416,373 ) Total lease liability at March 31, 2020 $ 1,734,521 |
Organization and Business Ope_2
Organization and Business Operations (Details Narrative) - shares | May 01, 2019 | Mar. 30, 2017 | Jun. 18, 2018 |
Percentage of controlling interest retained | 80.00% | ||
Acquisition of business entity, percentage | 100.00% | ||
Share Exchange Agreement [Member] | Steven Yariv [Member] | |||
Number of common stock shares return | 1,000,000 | ||
Number of options granted to employees | 80,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies and Basis of Presentation (Details Narrative) | May 01, 2019shares | Mar. 31, 2020USD ($)Integer | Mar. 31, 2019USD ($) | Jan. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Apr. 30, 2019USD ($) | Jan. 02, 2019USD ($) | Dec. 31, 2018USD ($) |
Net loss | $ (3,453,338) | $ (19,647,723) | ||||||
Net cash used in operations | (110,074) | (1,983,978) | ||||||
Accumulated deficit | (82,765,210) | $ (60,615,860) | ||||||
Shareholders' deficit | (26,839,561) | $ (24,117,542) | (12,886,424) | $ (7,737,294) | ||||
Working capital deficit | 27,678,817 | |||||||
Cash equivalents | ||||||||
Cash in excess of FDIC limits | ||||||||
Number of operating segment | Integer | 1 | |||||||
Fair value of derivative liabilities | $ 11,381,885 | 838,471 | ||||||
Premium liability | $ 385,385 | |||||||
Cumulative adjustment to accumulated deficit | $ 453,086 | |||||||
Minimum [Member] | ||||||||
Property and equipment, estimated useful lives | 5 years | |||||||
Minimum [Member] | M&T Bank [Member] | ||||||||
Paycheck Protection Promissory notes | $ 3,446,152 | |||||||
Maximum [Member] | ||||||||
Property and equipment, estimated useful lives | 6 years | |||||||
Share Exchange Agreement [Member] | Steven Yariv [Member] | ||||||||
Number of common stock shares return | shares | 1,000,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies and Basis of Presentation - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Derivative liabilities | $ 13,978,061 | $ 2,135,939 |
Level 1 [Member] | ||
Derivative liabilities | ||
Level 2 [Member] | ||
Derivative liabilities | ||
Level 3 [Member] | ||
Derivative liabilities | $ 13,978,061 | $ 2,135,939 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies and Basis of Presentation - Schedule of Reconciliation of Derivative Liability for Level 3 Inputs (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cumulative effect adjustment for change in derivative accounting | $ 453,086 | |
Level 3 [Member] | ||
Balance at beginning of period | $ 2,135,939 | 7,888,684 |
Initial valuation of derivative liabilities included in debt discount | 1,267,474 | |
Initial valuation of derivative liabilities included in derivative expense | 13,336,234 | |
Gain on extinguishment of debt related to repayment/conversion of debt | (662,398) | (246,111) |
Reclassification of warrants from equity to derivative liabilities | 11,381,885 | |
Cumulative effect adjustment for change in derivative accounting | (838,471) | |
Change in fair value included in derivative (gain) expense | (13,481,073) | 13,384,260 |
Balance at end of period | $ 13,978,061 | $ 20,188,362 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies and Basis of Presentation - Schedule of Potentially Dilutive Shares Excluded from Computation of Diluted Shares Outstanding (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Stock Warrants [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 181,563,164 | 1,442,434 |
Stock Options [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 80,000 | |
Convertible Debt [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 324,772,402 | 4,415,776 |
Series A Convertible Preferred Stock [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 8,333,333 | |
Series B Convertible Preferred Stock [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 1,700,000 |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) - Share Exchange Agreement [Member] - Steven Yariv [Member] | May 01, 2019shares |
Number of common stock shares return | 1,000,000 |
Number of options granted to employees | 80,000 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Statements of Operations for Discontinued Operations (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Revenues | $ 1,131,525 | |
Cost of revenues | 851,196 | |
Gross profit | 280,329 | |
Operating expenses | 266,668 | |
Income from discontinued operations | 13,661 | |
Loss on disposal of discontinued operations | ||
Income from discontinued operations, net of income taxes | $ 13,661 |
Accounts Receivable, Net - Sche
Accounts Receivable, Net - Schedule of Accounts Receivable (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Accounts receivable | $ 1,083,225 | $ 983,771 |
Allowance for doubtful accounts | (20,000) | (20,000) |
Accounts receivable, net | $ 1,063,225 | $ 963,771 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 14,188 | $ 47,040 |
Delivery trucks and vehicles | 185,514 | |
Accumulated depreciation | 19,561 | |
Proceeds from sale of property and equipment | 81,000 | |
Reduction in notes payable | 37,931 | |
Loss on disposal of property and equipment | $ 47,022 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Subtotal | $ 765,122 | $ 304,612 |
Less: accumulated depreciation | (78,394) | (64,206) |
Property and equipment, net | $ 686,728 | 240,406 |
Minimum [Member] | ||
Property and equipment, useful life | 5 years | |
Maximum [Member] | ||
Property and equipment, useful life | 6 years | |
Delivery Trucks and Vehicles [Member] | ||
Subtotal | $ 765,122 | 301,142 |
Delivery Trucks and Vehicles [Member] | Minimum [Member] | ||
Property and equipment, useful life | 5 years | |
Delivery Trucks and Vehicles [Member] | Maximum [Member] | ||
Property and equipment, useful life | 6 years | |
Equipment [Member] | ||
Property and equipment, useful life | 5 years | |
Subtotal | $ 3,470 | $ 3,470 |
Convertible Promissory Notes _3
Convertible Promissory Notes Payable (Details Narrative) - USD ($) | Apr. 20, 2020 | Apr. 02, 2020 | Jan. 30, 2020 | Jan. 30, 2020 | Jan. 07, 2020 | Nov. 07, 2019 | Oct. 14, 2019 | Oct. 05, 2019 | Oct. 03, 2019 | Aug. 31, 2019 | Aug. 30, 2019 | Aug. 29, 2019 | Aug. 19, 2019 | Aug. 16, 2019 | Apr. 09, 2019 | Dec. 27, 2018 | Jun. 18, 2018 | Jun. 18, 2018 | Jan. 03, 2018 | Jun. 30, 2017 | Apr. 25, 2017 | Jun. 29, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 28, 2020 | Jun. 16, 2020 | Feb. 29, 2020 | Jan. 31, 2020 | Oct. 04, 2019 | Sep. 06, 2019 | Aug. 31, 2018 |
Proceeds from convertible promissory note | $ 1,860,000 | ||||||||||||||||||||||||||||||||
Debt original issue discount | $ 1,267,473 | $ 1,267,473 | |||||||||||||||||||||||||||||||
Proceeds from promissory notes | 1,033,510 | 3,521,120 | |||||||||||||||||||||||||||||||
Gain on debt extinguishment, net | 275,034 | 93,871 | |||||||||||||||||||||||||||||||
Number of shares of common stock upon conversion of debt | 341,519 | ||||||||||||||||||||||||||||||||
Put premium to paid in capital | 55,906,801 | $ 47,715,878 | |||||||||||||||||||||||||||||||
Convertible notes payable | 5,647,429 | 3,634,344 | |||||||||||||||||||||||||||||||
Warrant exercise price | $ 0.40 | ||||||||||||||||||||||||||||||||
Debt conversion price per share | $ 0.40 | ||||||||||||||||||||||||||||||||
Repayment of notes payable | 2,124,777 | 2,033,973 | |||||||||||||||||||||||||||||||
Deemed dividend | $ 17,836,244 | ||||||||||||||||||||||||||||||||
Amortization of debt discounts | 1,359,388 | 1,071,272 | |||||||||||||||||||||||||||||||
Cumulative-effect on accumulated deficit | 453,086 | ||||||||||||||||||||||||||||||||
Fair value of derivative liabilities | 11,381,885 | 11,381,885 | $ 838,471 | ||||||||||||||||||||||||||||||
Initial derivative expense | 7,455,358 | ||||||||||||||||||||||||||||||||
Gain on derivative liability | 8,722,831 | $ 144,839 | (13,384,260) | ||||||||||||||||||||||||||||||
Subsequent Event [Member] | |||||||||||||||||||||||||||||||||
Number of shares of common stock upon conversion of debt, shares | 123,279,793 | ||||||||||||||||||||||||||||||||
Number of shares of common stock upon conversion of debt | $ 803,827 | ||||||||||||||||||||||||||||||||
Warrant term | 5 years | ||||||||||||||||||||||||||||||||
Warrant exercise price | $ 0.06 | ||||||||||||||||||||||||||||||||
Warrant Holders [Member] | |||||||||||||||||||||||||||||||||
Percentage of warrant purchase | 4.75% | ||||||||||||||||||||||||||||||||
Number of common stock issued | 240,000 | ||||||||||||||||||||||||||||||||
Offering of Equity [Member] | |||||||||||||||||||||||||||||||||
Debt instrument, description | If the Company completes an offering of equity or equity linked securities (including warrants, convertible preferred stock, convertible debentures or convertible promissory note) which results in gross proceeds to the Company of at least $4,000,000, then the Company will use a portion of the proceeds thereof to repay not less than half of the obligations then outstanding pursuant to the Bellridge Note | ||||||||||||||||||||||||||||||||
Proceeds from promissory notes | $ 4,000,000 | ||||||||||||||||||||||||||||||||
Offering of Debt [Member] | |||||||||||||||||||||||||||||||||
Debt instrument, description | If the Company completes an offering of debt which results in gross proceeds to the Company of at least $3,000,000, then the Company will use a portion of the proceeds thereof to repay any remaining obligations then outstanding pursuant to the Bellridge Note | ||||||||||||||||||||||||||||||||
Proceeds from promissory notes | $ 3,000,000 | ||||||||||||||||||||||||||||||||
Series B Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Number of shares of common stock upon conversion of debt, shares | |||||||||||||||||||||||||||||||||
Number of shares of common stock upon conversion of debt | |||||||||||||||||||||||||||||||||
Warrants [Member] | |||||||||||||||||||||||||||||||||
Debt principal balance | $ 2,469,840 | ||||||||||||||||||||||||||||||||
Debt original issue discount | $ 246,984 | $ 262,872 | |||||||||||||||||||||||||||||||
Warrant exercise price | $ 0.40 | $ 3.50 | $ 2.50 | ||||||||||||||||||||||||||||||
Warrants Purchase | 8,644,474 | 987,940 | 1,383,116 | ||||||||||||||||||||||||||||||
Warrants proceeds | $ 295,534 | ||||||||||||||||||||||||||||||||
Debt original issue discount percentage | 10.00% | ||||||||||||||||||||||||||||||||
Origination fees | $ 61,101 | ||||||||||||||||||||||||||||||||
Repayment of notes payable | 1,643,367 | ||||||||||||||||||||||||||||||||
Conversion of existing notes payable, value | $ 222,854 | ||||||||||||||||||||||||||||||||
Warrants [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||||
Warrant exercise price | $ 2.50 | ||||||||||||||||||||||||||||||||
Warrants Purchase | 66,667 | ||||||||||||||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||||||||||||
Number of shares of common stock upon conversion of debt, shares | 5,290,406 | ||||||||||||||||||||||||||||||||
Number of shares of common stock upon conversion of debt | $ 5,290 | ||||||||||||||||||||||||||||||||
Warrant Two [Member] | |||||||||||||||||||||||||||||||||
Aggregate purchase price of warrant | $ 82,771 | ||||||||||||||||||||||||||||||||
Warrant exercise price | $ 3.51 | ||||||||||||||||||||||||||||||||
Warrants Purchase | 66,401 | ||||||||||||||||||||||||||||||||
Warrants proceeds | $ 150,000 | ||||||||||||||||||||||||||||||||
Offering cost | $ 1,000,000 | ||||||||||||||||||||||||||||||||
Warrants One [Member] | |||||||||||||||||||||||||||||||||
Warrant exercise price | $ 0.40 | ||||||||||||||||||||||||||||||||
Warrants Purchase | 416,669 | ||||||||||||||||||||||||||||||||
RDW Capital, LLC [Member] | |||||||||||||||||||||||||||||||||
Debt principal balance | $ 240,000 | ||||||||||||||||||||||||||||||||
Purchase price | $ 30,000 | ||||||||||||||||||||||||||||||||
Debt instrument interest rate | 12.00% | ||||||||||||||||||||||||||||||||
Increased interest rate per month | 24.00% | ||||||||||||||||||||||||||||||||
Debt instrument, description | All principal and accrued interest under the note was due six months following the issue date of the note, and is convertible into shares of the Company's common stock, at a conversion price equal to fifty (50%) of the lowest volume-weighted average price for the previous ten trading days immediately preceding the conversion. | ||||||||||||||||||||||||||||||||
Bellridge Capital, L.P [Member] | |||||||||||||||||||||||||||||||||
Debt principal balance | $ 2,223,918 | ||||||||||||||||||||||||||||||||
Note maturity date | Aug. 31, 2020 | ||||||||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | ||||||||||||||||||||||||||||||||
Gain on debt extinguishment, net | $ 10,248,000 | ||||||||||||||||||||||||||||||||
Convertible debt | 2,497,502 | ||||||||||||||||||||||||||||||||
Reduction of convertible promissory debt | $ 1,800,000 | ||||||||||||||||||||||||||||||||
Number of restricted common stock issued | 800,000 | ||||||||||||||||||||||||||||||||
Beneficial ownership limitation, description | Such issuances will occur in increments of no fewer than the lesser of (i) 50,000 shares and (ii) the balance of the 800,000 shares owed. The "Beneficial Ownership Limitation" shall be 4.99% of the number of shares of the Company's common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable pursuant to this Agreement. | ||||||||||||||||||||||||||||||||
Number of owed shares | 800,000 | ||||||||||||||||||||||||||||||||
Percentage for beneficial ownership limitation | 4.99% | ||||||||||||||||||||||||||||||||
Number of common stock issued | 100,000 | ||||||||||||||||||||||||||||||||
Reduction of interest rate | 5.00% | ||||||||||||||||||||||||||||||||
Cancellation of warrants in exchange of common stock, shares | 360,000 | ||||||||||||||||||||||||||||||||
Bellridge Capital, L.P [Member] | Series B Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Number of common stock issued | 700,000 | ||||||||||||||||||||||||||||||||
Bellridge Capital, L.P [Member] | Common Stock [Member] | |||||||||||||||||||||||||||||||||
Number of common stock issued | 700,000 | ||||||||||||||||||||||||||||||||
Bellridge Capital, L.P [Member] | Warrants [Member] | |||||||||||||||||||||||||||||||||
Number of restricted common stock issued | 360,000 | 360,000 | |||||||||||||||||||||||||||||||
Convertible Debt [Member] | Bellridge Capital, LLC. [Member] | |||||||||||||||||||||||||||||||||
Percentage of warrant purchase | 2.00% | ||||||||||||||||||||||||||||||||
Warrant exercise price | $ 100 | ||||||||||||||||||||||||||||||||
Convertible Notes Payable [Member] | |||||||||||||||||||||||||||||||||
Debt original issue discount | $ 0 | 0 | |||||||||||||||||||||||||||||||
Convertible debt | 1,813,402 | 1,813,402 | |||||||||||||||||||||||||||||||
Notes [Member] | |||||||||||||||||||||||||||||||||
Debt original issue discount | $ 16,667 | ||||||||||||||||||||||||||||||||
Note maturity date | Jan. 3, 2021 | Nov. 30, 2020 | |||||||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | ||||||||||||||||||||||||||||||||
Debt instrument, description | During the existence of an Event of Default, interest accrues at the lesser of (i) the rate of 18% per annum, or (ii) the maximum amount permitted by law. Commencing on the four month anniversary of the October 3 Note, monthly payments of interest and monthly principal payments, based on a 12 month amortization schedule (each, an “October 3 Note Amortization Payment”), are due and payable, until the Maturity Date, at which time all outstanding principal, accrued and unpaid interest and all other amounts due and payable under the October 3 Notes will be immediately due and payable. The October 3 Note Amortization Payments are made in cash unless the investor requests it to be issued in the Company’s common stock in lieu of a cash payment (each, an “October 3 Note Stock Payment”). If the investor requests a October 3 Note Stock Payment, the number of shares of common stock issued is based on the amount of the applicable October 3 Note Amortization Payment divided by 80% of the lowest VWAP (as defined in the October 3 Note) during the five Trading Day (as defined in the October 3 Note) period prior to the due date of the October 3 Note Amortization Payment. | During the existence of an Event of Default (as defined in the August 2019 Notes), interest shall accrue at the lesser of (i) the rate of 18% per annum, or (ii) the maximum amount permitted by law. Commencing on the four month anniversary of the August 2019 Notes, monthly payments of interest and monthly principal payments, based on a 12 month amortization schedule (each, an "August 2019 Notes Amortization Payment"), shall be due and payable, until the Maturity Date, at which time all outstanding principal, accrued and unpaid interest and all other amounts due and payable hereunder shall be immediately due and payable. The Company's August 2019 Note Amortization Payments due on December 30, 2019 were paid on January 6, 2020 and the Company did not receive any default notice for this late payment. The August 2019 Note Amortization Payments shall be made in cash unless the investor requests it to be issued in the Company's common stock in lieu of a cash payment (an "August 2019 Note Stock Payment"). If the investor requests an August 2019 Note Stock Payment, the number of shares of common stock issued shall be based on the amount of the applicable August 2019 Amortization Payment divided by 80% of the lowest VWAP during the five Trading Day (as defined in the August 2019 Notes) period prior to the due date of the August 2019 Amortization Payment. | |||||||||||||||||||||||||||||||
Proceeds from promissory notes | $ 166,667 | ||||||||||||||||||||||||||||||||
Debt payment description | The October 3 Note may be prepaid, provided that certain Equity Conditions, as defined in the October 3 Note, have been met (or any such failure to meet the Equity Conditions has been waived): (i) from October 3, 2019 until and through January 3, 2020, at an amount equal to 105% of the aggregate of the outstanding principal balance of the October 3 Note and accrued and unpaid interest, and (ii) after January 3, 2020, at an amount equal to 115% of the aggregate of the outstanding principal balance of the October 3 Note and accrued and unpaid interest. In the event that the Company closes a Public Offering, the holder may elect to: (x) have its principal and accrued interest prepaid directly from the proceeds of the Public Offering at the prices set forth above, or (y) exchange its October 3 Note at the closing of the Public Offering for the securities being issued in the Public Offering at the Public Offering prices based upon the outstanding principal, accrued interest and other charges, or (z) continue to hold the October 3 Note. Except for a Public Offering and October 3 Note Amortization Payments, in order to prepay the October 3 Note, the Company must provide at least 20 days’ prior written notice to the holder, during which time the holder may convert the October 3 Note in whole or in part at the conversion price. For avoidance of doubt, the October 3 Note Amortization Payments are prepayments and are subject to prepayment penalties equal to 115% of the October 3 Note Amortization Payment. In the event the Company consummates a Public Offering while the October 3 Note is outstanding, then 25% of the net proceeds of such offering will, within two business days of the closing of such Public Offering, be applied to reduce the outstanding obligations pursuant to the October 3 Note. | Notes may be prepaid, provided that Equity Conditions, as defined in the August 2019 Notes, have been met (or any such failure to meet the Equity Conditions has been waived): (i) from August 30, 2019 until and through November 30, 2019 at an amount equal to 105% of the aggregate of the outstanding principal balance of the August 2019 Notes and accrued and unpaid interest, and (ii) after August 30, 2019 at an amount equal to 115% of the aggregate of the outstanding principal balance of the August 2019 Notes and accrued and unpaid interest. In the event that the Company closes a registered public offering of securities for its own account (a “Public Offering”), the holders may elect to: (x) have their principal and accrued interest prepaid directly from the proceeds of the Public Offering at the prices set forth above, or (y) exchange their August 2019 Notes at the closing of the Public Offering for the securities being issued in the Public Offering at the Public Offering prices based upon the outstanding principal, accrued interest and other charges, or (z) continue to hold their August 2019 Notes. Except for a Public Offering and August 2019 Amortization Payments, in order to prepay the August 2019 Notes, the Company must provide at least 20 days’ prior written notice to the holders, during which time the holders may convert their August 2019 Notes in whole or in part at the then-applicable conversion price. For avoidance of doubt, the August 2019 Amortization Payments are prepayments and are subject to prepayment penalties equal to 115% of the August 2019 Amortization Payment. In the event the Company consummates a Public Offering while the August 2019 Notes are outstanding, then 25% of the net proceeds of such offering will, within two business days of the closing of such Public Offering, be applied to reduce the outstanding obligations pursuant to the August 2019 Notes. | |||||||||||||||||||||||||||||||
Debt conversion description | The “Conversion Price” in effect on any Conversion Date means, as of any Conversion Date (as defined in the October 3 Note) or other date of determination, the lower of: (i) $2.51 per share and (ii) the price per share paid by investors in the contemplated equity offering of up to $1,000,000. If an Event of Default (as defined in the October 3 Note) has occurred, regardless of whether such Event of Default (as defined in the October 3 Note) has been cured or remains ongoing, the October 3 Note are convertible at the lower of: (i) $2.51 and (ii) 70% of the second lowest closing price of the common stock as reported on the Trading Market (as defined in the October 3 Note) during the 20 consecutive Trading Day (as defined in the October 3 Note) period ending and including the Trading Day (as defined in the October 3 Note) immediately preceding the delivery or deemed delivery of the applicable Notice of Conversion | The initial conversion price of the August 2019 Notes was the lower of: (i) $3.50 per share and (ii) the price per share paid by investors in the contemplated equity offering of up to $1,000,000. If an Event of Default (as defined in the August 2019 Notes) has occurred, regardless of whether it has been cured or remains ongoing, the August 2019 Notes were initially convertible at the lower of: (i) $3.50 and (ii) 70% of the second lowest closing price of the common stock as reported on the Trading Market (as defined in the August 2019 Notes) during the 20 consecutive Trading Day (as defined in the August 2019 Notes) period ending and including the Trading Day (as defined in the August 2019 Notes) immediately preceding the delivery or deemed delivery of the applicable notice of conversion. | |||||||||||||||||||||||||||||||
August 2019 Notes [Member] | |||||||||||||||||||||||||||||||||
Debt principal balance | $ 723,985 | $ 723,985 | |||||||||||||||||||||||||||||||
Debt original issue discount | $ 936,645 | ||||||||||||||||||||||||||||||||
Debt instrument interest rate | 30.00% | 30.00% | |||||||||||||||||||||||||||||||
Payments of principal and interest | 237,169 | ||||||||||||||||||||||||||||||||
Interest expenses | $ 75,309 | ||||||||||||||||||||||||||||||||
Number of shares of common stock upon conversion of debt, shares | 3,586,689 | ||||||||||||||||||||||||||||||||
Debt converted conversion percentage | 18.00% | ||||||||||||||||||||||||||||||||
Convertible debt | $ 1,554,729 | ||||||||||||||||||||||||||||||||
Repayment of notes payable | 159,988 | ||||||||||||||||||||||||||||||||
Fair value of embedded conversion option derivatives | 1,953,968 | ||||||||||||||||||||||||||||||||
Derivative expense | 1,017,323 | ||||||||||||||||||||||||||||||||
Accrued interest | 30,625 | ||||||||||||||||||||||||||||||||
Convertible Notes Payable One [Member] | |||||||||||||||||||||||||||||||||
Debt principal balance | 2,469,840 | ||||||||||||||||||||||||||||||||
Debt original issue discount | 1,317,248 | ||||||||||||||||||||||||||||||||
Payments of principal and interest | 2,871,977 | ||||||||||||||||||||||||||||||||
Convertible debt | 658,623 | ||||||||||||||||||||||||||||||||
Amortization of debt discounts | 1,811,217 | ||||||||||||||||||||||||||||||||
October 3 Note [Member] | |||||||||||||||||||||||||||||||||
Debt principal balance | 216,667 | 166,667 | |||||||||||||||||||||||||||||||
Debt instrument interest rate | 30.00% | ||||||||||||||||||||||||||||||||
Proceeds from promissory notes | $ 67,229 | ||||||||||||||||||||||||||||||||
Repayment of loan percentage | 18.00% | ||||||||||||||||||||||||||||||||
Debt conversion price per share | $ 0.40 | ||||||||||||||||||||||||||||||||
Convertible debt | 116,667 | 33,334 | |||||||||||||||||||||||||||||||
Deemed dividend | $ 859,768 | ||||||||||||||||||||||||||||||||
Accrued interest | $ 50,000 | ||||||||||||||||||||||||||||||||
Amortization of debt discounts | 100,000 | 133,333 | |||||||||||||||||||||||||||||||
Derivative expenses | $ 56,566 | ||||||||||||||||||||||||||||||||
October 3 Note [Member] | Warrants [Member] | |||||||||||||||||||||||||||||||||
Warrant exercise price | $ 0.40 | ||||||||||||||||||||||||||||||||
Warrants Purchase | 66,667 | ||||||||||||||||||||||||||||||||
Fall 2019 Notes [Member] | |||||||||||||||||||||||||||||||||
Debt principal balance | 500,000 | ||||||||||||||||||||||||||||||||
Debt original issue discount | 200,673 | ||||||||||||||||||||||||||||||||
Convertible notes payable | 299,327 | ||||||||||||||||||||||||||||||||
2020 Notes [Member] | |||||||||||||||||||||||||||||||||
Aggregate purchase price of warrant | 456,631 | ||||||||||||||||||||||||||||||||
Warrants proceeds | 456,631 | ||||||||||||||||||||||||||||||||
Derivative Liabilities [Member] | |||||||||||||||||||||||||||||||||
Debt principal balance | $ 1,387,785 | ||||||||||||||||||||||||||||||||
Increased interest rate per month | 30.00% | ||||||||||||||||||||||||||||||||
Interest expenses | $ 1,387,785 | ||||||||||||||||||||||||||||||||
Fair value of embedded conversion option derivatives | 5,880,876 | ||||||||||||||||||||||||||||||||
Convertible Notes [Member] | |||||||||||||||||||||||||||||||||
Amortization of debt discounts | 764,943 | $ 545,443 | |||||||||||||||||||||||||||||||
Convertible Notes [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||||
Debt instrument interest rate | 18.00% | ||||||||||||||||||||||||||||||||
Increased interest rate per month | 30.00% | ||||||||||||||||||||||||||||||||
Debt instrument, description | The outstanding principal balance on date of default increased by 30% which amounted to approximately $136,950, default interest accrues at 18%, and the default conversion terms apply. | ||||||||||||||||||||||||||||||||
Convertible debt | $ 136,950 | ||||||||||||||||||||||||||||||||
Maximum [Member] | |||||||||||||||||||||||||||||||||
Offering cost | $ 1,000,000 | ||||||||||||||||||||||||||||||||
Red Diamond Partners, LLC [Member] | |||||||||||||||||||||||||||||||||
Percentage of common stock option of lowest VWAP | 65.00% | ||||||||||||||||||||||||||||||||
Debt conversion price per share | $ 1.50 | ||||||||||||||||||||||||||||||||
Red Diamond Partners, LLC [Member] | The Red Diamond Notes [Member] | |||||||||||||||||||||||||||||||||
Payments of principal and interest | $ 270,000 | ||||||||||||||||||||||||||||||||
Increased interest rate per month | 1800.00% | ||||||||||||||||||||||||||||||||
Red Diamond Partners, LLC And RDW Capital LLC [Member] | |||||||||||||||||||||||||||||||||
Debt principal balance | $ 510,000 | 747,935 | 895,385 | ||||||||||||||||||||||||||||||
Note maturity date | Dec. 31, 2020 | ||||||||||||||||||||||||||||||||
Debt instrument, description | Repay not less than half of the obligations then outstanding pursuant to the notes if the Company completes an offering of equity or equity linked securities (including warrants, convertible preferred stock, convertible debentures or convertible promissory note) which results in gross proceeds to the Company of at least $4,000,000, using a portion of the proceeds thereof. | ||||||||||||||||||||||||||||||||
Proceeds from promissory notes | $ 4,000,000 | ||||||||||||||||||||||||||||||||
Gain on debt extinguishment, net | 432,589 | ||||||||||||||||||||||||||||||||
Debt put premium | 385,385 | 385,385 | $ 311,660 | 385,385 | |||||||||||||||||||||||||||||
Reversal of default interest payable | $ 47,204 | ||||||||||||||||||||||||||||||||
Interest expenses | $ 385,385 | ||||||||||||||||||||||||||||||||
Number of shares of common stock upon conversion of debt, shares | 1,703,717 | ||||||||||||||||||||||||||||||||
Number of shares of common stock upon conversion of debt | $ 73,725 | ||||||||||||||||||||||||||||||||
Put premium to paid in capital | 73,725 | ||||||||||||||||||||||||||||||||
Convertible notes payable | 436,275 | 510,000 | |||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||||||||
Proceeds from convertible promissory note | 2,046,000 | ||||||||||||||||||||||||||||||||
Debt original issue discount | $ 186,000 | ||||||||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | ||||||||||||||||||||||||||||||||
Debt instrument, description | During the existence of an Event of Default (as defined in the applicable Q1 2020 Note), which includes, amongst other events, any default in the payment of principal and interest payment (including Q1 2020 Note Amortization Payments) under any Q1 2020 Note or any other indebtedness, interest accrues at the lesser of (i) the rate of 18% per annum, or (ii) the maximum amount permitted by law. Commencing on the thirteenth month anniversary of each Q1 2020 Note, monthly payments of interest and monthly principal payments, based on a 12 month amortization schedule (each, a “Q1 2020 Note Amortization Payment”), will be due and payable | ||||||||||||||||||||||||||||||||
Proceeds from promissory notes | $ 1,860,000 | ||||||||||||||||||||||||||||||||
Warrant exercise price | $ 0.40 | $ 2.50 | |||||||||||||||||||||||||||||||
Debt conversion price per share | $ 0.40 | ||||||||||||||||||||||||||||||||
Warrants Purchase | 818,400 | ||||||||||||||||||||||||||||||||
Debt payment description | Notes may be prepaid, provided that Equity Conditions, as defined in the Q1 2020 Notes, have been met (or any such failure to meet the Equity Conditions has been waived): (i) from each Q1 2020 Note’s respective original issuance date until and through the day that falls on the third month anniversary of such original issue date (each a “Q1 2020 Note 3 Month Anniversary”) at an amount equal to 105% of the aggregate of the outstanding principal balance of the Q1 2020 Note and accrued and unpaid interest, and (ii) after the applicable Q1 2020 Note 3 Month Anniversary at an amount equal to 115% of the aggregate of the outstanding principal balance of the Q1 2020 Note and accrued and unpaid interest. In the event that the Company closes a Public Offering, each holder may elect to: (x) have its principal and accrued interest prepaid directly from the proceeds of the Public Offering at the prices set forth above, or (y) exchange its Q1 2020 Note at the closing of the Public Offering for the securities being issued in the Public Offering at the Public Offering prices based upon the outstanding principal, accrued interest and other charges, or (z) continue to hold its Q1 2020 Note(s). Except for a Public Offering and Q1 2020 Note Amortization Payments, in order to prepay a Q1 2020 Note, the Company must provide at least 30 days’ prior written notice to the holder thereof, during which time the holder may convert its Q1 2020 Note in whole or in part at the applicable conversion price. The Q1 2020 Note Amortization Payments are prepayments and are subject to prepayment penalties equal to 115% of the Q1 2020 Note Amortization Payment. In the event the Company consummates a Public Offering while the Q1 2020 Notes are outstanding, then 25% of the net proceeds of such offering will, within two business days of the closing of such Public Offering, be applied to reduce the outstanding obligations pursuant to theQ1 2020 Notes. | ||||||||||||||||||||||||||||||||
Debt conversion description | The “Conversion Price” in effect on any Conversion Date (as defined in the applicable Q1 2020 Note) means, as of any date of determination, $0.40 per share, subject to adjustment as provided herein. If an Event of Default (as defined in the applicable Q1 2020 Note) has occurred, regardless of whether it has been cured or remains ongoing, the Q1 2020 Notes are convertible at the lower of: (i) $0.40 and (ii) 70% of the second lowest closing price of the common stock as reported on the Trading Market (as defined in the applicable Q1 2020 Note) during the 20 consecutive Trading Day (as defined in the applicable Q1 2020 Note) period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable notice of conversion. | ||||||||||||||||||||||||||||||||
Deemed dividend | $ 17,836,244 | ||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||||
Debt instrument, description | This Note may be prepaid, provided that equity conditions, as defined in the Note, have been met (or any such failure to meet the Equity Conditions have been waived): (i) from April 20, 2020 until and through July 20, 2020 at an amount equal to 105% of the aggregate of the outstanding principal balance of the Note and accrued and unpaid interest, and (ii) after July 20, 2020 at an amount equal to 115% of the aggregate of the outstanding principal balance of the Note and accrued and unpaid interest. In the event that the Company closes a registered public offering of securities for its own account (a "Public Offering"), the holder may elect to: (x) have its principal and accrued interest prepaid directly from the Public Offering Proceeds at the prices set forth above, or (y) exchange its Note at the closing of the Public Offering for the securities being issued in the Public Offering at the Public Offering prices based upon the outstanding principal, accrued interest and other charges, or (z) continue to hold the Note. Except for a Public Offering and Note Amortization Payments, in order to prepay the Note, the Company shall provide at least 30 days' prior written notice to the holder, during which time the holder may convert the Note in whole or in part at the Conversion Price. For avoidance of doubt, the Note Amortization Payments shall be prepayments and are subject to prepayment penalties equal to 115% of the Note Amortization Payment. In the event the Company consummates a Public Offering while the Note is outstanding, then 25% of the net proceeds of such offering shall, within two business days of the closing of such public offering, be applied to reduce the outstanding obligations pursuant to the Note. Until the Note is no longer outstanding, it shall be convertible, in whole or in part, at any time, and from time to time, into shares of Common Stock at the option of the investor. The "Conversion Price" in effect on any Conversion Date means, as of any Conversion Date or other date of determination, the lower of: (i) $0.40 and (ii) 70% of the second lowest closing price of the Common Stock as reported on the Trading Market during the 20 consecutive Trading Day period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Notice of Conversion. All such Conversion Price determinations are to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately. | The April 1 Note may be prepaid, provided that certain Equity Conditions, as defined in the April 1 Note, have been met (or any such failure to meet the Equity Conditions has been waived): (i) from April 1, 2020 until and through July 1, 2020 at an amount equal to 105% of the aggregate of the outstanding principal balance of the April 1 Note and accrued and unpaid interest, and (ii) after July 1, 2020 at an amount equal to 115% of the aggregate of the outstanding principal balance of the April 1 Note and accrued and unpaid interest. In the event that the Company closes a Public Offering, the holder may elect to: (x) have its principal and accrued interest prepaid directly from the proceeds of the Public Offering at the prices set forth above, or (y) exchange its April 1 Note at the closing of the Public Offering for the securities being issued in the Public Offering at the Public Offering prices based upon the outstanding principal, accrued interest and other charges, or (z) continue to hold the April 1 Note. Except for a Public Offering and April 1 Note Amortization Payments, in order to prepay the April 1 Note, the Company must provide at least 30 days’ prior written notice to the holder, during which time the holder may convert the April 1 Note in whole or in part at the then-applicable conversion price. For avoidance of doubt, the April 1 Note Amortization Payments will be prepayments and are subject to prepayment penalties equal to 115% of the April 1 Note Amortization Payment. In the event the Company consummates a Public Offering while the April 1 Note is outstanding, then 25% of the net proceeds of such offering will, within two business days of the closing of such Public Offering, be applied to reduce the outstanding obligations pursuant to the April 1 Note. Until the April 1 Note is no longer outstanding, it is convertible, in whole or in part, at any time, and from time to time, into shares of common stock at the option of the investor. The “Conversion Price” in effect on any Conversion Date (as defined in the April 1 Note) means, as of any Conversion Date (as defined in the April 1 Note) or other date of determination, $0.40 per share, subject to adjustment as provided herein. If an Event of Default (as defined in the April 1 Note) has occurred, regardless of whether it has been cured or remains ongoing, the April 1 Note is convertible at the lower of: (i) $0.40 and (ii) 70% of the second lowest closing price of the common stock as reported on the Trading Market (as defined in the April 1 Note) during the 20 consecutive Trading Day (as defined in the April 1 Note) period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable notice of conversion. All such conversion price determinations are to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately. | |||||||||||||||||||||||||||||||
Debt converted conversion percentage | 70.00% | 70.00% | |||||||||||||||||||||||||||||||
Debt conversion price per share | $ 0.40 | $ 0.40 | |||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||
Warrant term | 5 years | ||||||||||||||||||||||||||||||||
Warrant exercise price | $ 3.51 | ||||||||||||||||||||||||||||||||
Debt conversion price per share | $ 2.50 | ||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Warrants [Member] | |||||||||||||||||||||||||||||||||
Debt original issue discount | $ 1,267,473 | ||||||||||||||||||||||||||||||||
Aggregate purchase price of warrant | $ 262,872 | ||||||||||||||||||||||||||||||||
Warrant exercise price | $ 0.40 | ||||||||||||||||||||||||||||||||
Warrants Purchase | 838,200 | ||||||||||||||||||||||||||||||||
Fair value of embedded conversion option derivatives | $ 8,722,831 | ||||||||||||||||||||||||||||||||
Initial derivative expense | 7,455,358 | ||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | August 2019 Notes [Member] | |||||||||||||||||||||||||||||||||
Debt principal balance | $ 613,800 | ||||||||||||||||||||||||||||||||
Debt instrument interest rate | 30.00% | ||||||||||||||||||||||||||||||||
Debt converted conversion percentage | 18.00% | ||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | 2020 Notes [Member] | |||||||||||||||||||||||||||||||||
Debt principal balance | $ 1,115,369 | ||||||||||||||||||||||||||||||||
Payments of principal and interest | 2,659,800 | ||||||||||||||||||||||||||||||||
Amortization of debt discounts | 1,544,431 | ||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Red Diamond Partners, LLC [Member] | |||||||||||||||||||||||||||||||||
Purchase price | $ 350,000 | ||||||||||||||||||||||||||||||||
Transaction costs | $ 5,000 | ||||||||||||||||||||||||||||||||
Percentage of common stock option of lowest VWAP | 65.00% | ||||||||||||||||||||||||||||||||
Convertible promissory notes default amount | $ 25,000 | ||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Red Diamond Partners, LLC [Member] | Three Red Diamond Notes [Member] | |||||||||||||||||||||||||||||||||
Debt principal balance | 270,000 | ||||||||||||||||||||||||||||||||
Proceeds from convertible promissory note | 265,000 | ||||||||||||||||||||||||||||||||
Debt original issue discount | $ 5,000 | ||||||||||||||||||||||||||||||||
Note maturity date | Dec. 31, 2018 | ||||||||||||||||||||||||||||||||
Debt instrument interest rate | 12.00% | ||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Red Diamond Partners, LLC [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||||
Debt principal balance | $ 355,000 | ||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Lender [Member] | Bellridge Capital, LLC. [Member] | |||||||||||||||||||||||||||||||||
Debt principal balance | $ 2,497,503 | $ 2,497,503 | |||||||||||||||||||||||||||||||
Purchase price | 1,665,000 | 1,665,000 | |||||||||||||||||||||||||||||||
Debt original issue discount | $ 832,503 | $ 832,503 | |||||||||||||||||||||||||||||||
Note maturity date | Dec. 18, 2019 | ||||||||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | 10.00% | |||||||||||||||||||||||||||||||
Payments of debt issuance costs | $ 177,212 | ||||||||||||||||||||||||||||||||
Debt interest monthly payments | $ 156,219 | $ 232,940 | |||||||||||||||||||||||||||||||
Warrant term | 2 years | 2 years | |||||||||||||||||||||||||||||||
Percentage of warrant purchase | 4.75% | 4.75% | |||||||||||||||||||||||||||||||
Aggregate purchase price of warrant | $ 100 | ||||||||||||||||||||||||||||||||
Repayment of loan percentage | 125.00% | ||||||||||||||||||||||||||||||||
Debt converted conversion percentage | 2.00% | ||||||||||||||||||||||||||||||||
Percentage on membership interests | 100.00% | 100.00% | |||||||||||||||||||||||||||||||
Proceeds from subsequent offering | $ 5,000,000 | ||||||||||||||||||||||||||||||||
Proceeds from subsequent offering description | The Company shall use 20% of the gross proceeds of the Bellridge Subsequent Offering and shall make payment to the Bellridge Note holder of an amount in cash equal to the product of (i) the sum of (x) the then outstanding principal amount of the Bellridge Note and (y) all accrued but unpaid interest, multiplied by (ii) (x) 110%, if the Prepayment Date (as defined in the Bellridge Note) is within 90 days of the date hereof the Closing Date (as defined in the Purchase Agreement), or (y) 125%, if the Prepayment Date is after the 90th day following the Closing Date, to which calculated amount the Company shall add all other amounts owed pursuant to the Bellridge Note, including, but not limited to, all late fees and liquidated damages. | ||||||||||||||||||||||||||||||||
Registration rights agreement description | The Company fails to pay any of these partial liquidated damages in full within seven days after the date payable, the Company will pay interest thereon at a rate of 18% per annum to the holder, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. | ||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Lender [Member] | Bellridge Capital, LLC. [Member] | Warrants [Member] | |||||||||||||||||||||||||||||||||
Warrant term | 2 years | 2 years | |||||||||||||||||||||||||||||||
Percentage of warrant purchase | 4.75% | 4.75% | |||||||||||||||||||||||||||||||
Aggregate purchase price of warrant | $ 100 | ||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Placement Agent [Member] | Bellridge Capital, LLC. [Member] | |||||||||||||||||||||||||||||||||
Payments of debt issuance costs | $ 120,000 | ||||||||||||||||||||||||||||||||
Warrant term | 2 years | 2 years | |||||||||||||||||||||||||||||||
Percentage of warrant purchase | 4.75% | 4.75% | |||||||||||||||||||||||||||||||
Aggregate purchase price of warrant | $ 100 | ||||||||||||||||||||||||||||||||
Convertible Note Agreement [Member] | |||||||||||||||||||||||||||||||||
Debt principal balance | 500,000 | ||||||||||||||||||||||||||||||||
Debt original issue discount | $ 328,638 | 266,400 | |||||||||||||||||||||||||||||||
Convertible notes payable | $ 233,600 | ||||||||||||||||||||||||||||||||
Debt conversion price per share | $ 2.50 | ||||||||||||||||||||||||||||||||
Embedded conversion option derivative | $ 328,638 | ||||||||||||||||||||||||||||||||
Convertible Note Agreement [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||
Debt principal balance | $ 500,000 | $ 500,000 | |||||||||||||||||||||||||||||||
Proceeds from convertible promissory note | $ 500,000 | $ 500,000 | |||||||||||||||||||||||||||||||
Note maturity date | Nov. 7, 2020 | Oct. 14, 2020 | |||||||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | 10.00% | |||||||||||||||||||||||||||||||
Payments of principal and interest | $ 200,000 | $ 300,000 | |||||||||||||||||||||||||||||||
Debt instrument, description | During the existence of an Event of Default (as defined in the Fall 2019 Notes), interest will accrue at the lesser of (i) the rate of 18% per annum, or (ii) the maximum amount permitted by law. Commencing on the seventh month anniversary of each respective note, monthly payments of interest and monthly principal payments are due and payable, until the respective maturity dates, at which time all outstanding principal, accrued and unpaid interest and all other amounts due and payable under such Fall 2019 Note will be immediately due and payable. | During the existence of an Event of Default (as defined in the Fall 2019 Notes), interest will accrue at the lesser of (i) the rate of 18% per annum, or (ii) the maximum amount permitted by law. Commencing on the seventh month anniversary of each respective note, monthly payments of interest and monthly principal payments are due and payable, until the respective maturity dates, at which time all outstanding principal, accrued and unpaid interest and all other amounts due and payable under such Fall 2019 Note will be immediately due and payable. | |||||||||||||||||||||||||||||||
Debt converted conversion percentage | 18.00% |
Convertible Promissory Notes _4
Convertible Promissory Notes Payable and Notes Payable - Schedule of Fair Value of Derivative Liabilities Estimated Using Black-Sholes Valuation Model (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Expected Dividend Rate [Member] | ||
Fair value derivative liabilities measurement, percentage | 0 | 0 |
Expected Term [Member] | Minimum [Member] | ||
Fair value derivative liabilities term (in years) | 1 year | 18 days |
Expected Term [Member] | Maximum [Member] | ||
Fair value derivative liabilities term (in years) | 5 years | 2 months 30 days |
Risk Free Interest Rate [Member] | ||
Fair value derivative liabilities measurement, percentage | 2.40 | |
Risk Free Interest Rate [Member] | Minimum [Member] | ||
Fair value derivative liabilities measurement, percentage | 154.2 | |
Risk Free Interest Rate [Member] | Maximum [Member] | ||
Fair value derivative liabilities measurement, percentage | 257 | |
Volatility [Member] | ||
Fair value derivative liabilities measurement, percentage | 228.1 | |
Volatility [Member] | Minimum [Member] | ||
Fair value derivative liabilities measurement, percentage | 0.14 | |
Volatility [Member] | Maximum [Member] | ||
Fair value derivative liabilities measurement, percentage | 1.62 |
Convertible Promissory Notes _5
Convertible Promissory Notes Payable and Notes Payable - Schedule of Convertible Promissory Notes (Details) - USD ($) | Mar. 31, 2020 | Jan. 30, 2020 | Dec. 31, 2019 |
Less: unamortized debt discount | $ (1,267,473) | ||
Less: current portion of convertible notes payable | $ (5,647,429) | $ (3,634,344) | |
Convertible Promissory Notes [Member] | |||
Principal amount | 8,498,121 | 5,459,909 | |
Add: put premium | 311,660 | 385,385 | |
Less: unamortized debt discount | (3,162,352) | (2,210,950) | |
Convertible notes payable, net | 5,647,429 | 3,634,344 | |
Less: current portion of convertible notes payable | (5,647,429) | (3,634,344) | |
Convertible notes payable, net - long-term |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) | Mar. 12, 2020USD ($) | Mar. 09, 2020USD ($) | Mar. 04, 2020USD ($) | Nov. 30, 2019USD ($)Days | Aug. 28, 2019USD ($)Days | Jul. 03, 2019 | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($) | Jan. 30, 2020USD ($) | Jan. 07, 2020$ / shares | Jun. 18, 2018USD ($) |
Proceeds from promissory notes | $ 1,033,510 | $ 3,521,120 | |||||||||||||
Payment of notes payable | 2,124,777 | 2,033,973 | |||||||||||||
Loss on debt extinguishment | 275,034 | 93,871 | |||||||||||||
Notes payable - related party | $ 500,000 | 500,000 | $ 500,000 | ||||||||||||
Unamortized debt discount | $ 1,267,473 | ||||||||||||||
Warrant exercise price | $ / shares | $ 0.40 | ||||||||||||||
Amortization of debt discounts | 1,359,388 | 1,071,272 | |||||||||||||
Warrants One [Member] | |||||||||||||||
Warrant exercise price | $ / shares | $ 0.40 | ||||||||||||||
Settlement Agreement [Member] | |||||||||||||||
Payment of notes payable | $ 275,000 | ||||||||||||||
Debt principal balance | 272,700 | ||||||||||||||
Convertible debt | 95,874 | ||||||||||||||
Cancellation of warrants | 40,300 | ||||||||||||||
Loss on debt extinguishment | 214,641 | ||||||||||||||
Payment of cash | 67,548 | ||||||||||||||
Remaining debt discount | 614,809 | ||||||||||||||
Reduction of principal balance of debt | 467,716 | ||||||||||||||
Secured Merchant Agreements [Member] | |||||||||||||||
Payment of notes payable | 60,388 | ||||||||||||||
Convertible debt | $ 17,705 | ||||||||||||||
Notes payable - related party | 176,339 | 115,951 | 176,339 | ||||||||||||
Notes payable liabilities assumed | $ 944,281 | ||||||||||||||
Promissory notes | 98,592 | 98,592 | 98,592 | ||||||||||||
Conversion of notes payable | $ 184,750 | ||||||||||||||
Debt instrument interest rate | 15.00% | ||||||||||||||
Secured Merchant Agreements One [Member] | |||||||||||||||
Payment of notes payable | 135,742 | ||||||||||||||
Convertible debt | $ 25,073 | ||||||||||||||
Notes payable - related party | 244,858 | 113,962 | 244,858 | ||||||||||||
Conversion of notes payable | $ 261,630 | ||||||||||||||
Accrued interest | 4,846 | ||||||||||||||
Several Secured Merchant Loan [Member] | |||||||||||||||
Notes payable | 2,283,540 | 2,283,540 | |||||||||||||
Proceeds from promissory notes | 1,355,986 | ||||||||||||||
Origination fees | 927,554 | ||||||||||||||
Payment of notes payable | 464,344 | ||||||||||||||
New Secured Merchant Loan [Member] | |||||||||||||||
Notes payable | 1,274,150 | ||||||||||||||
Proceeds from promissory notes | 150,000 | ||||||||||||||
Origination fees | 453,450 | ||||||||||||||
Payment of notes payable | 1,549,639 | ||||||||||||||
Debt principal balance | 670,700 | ||||||||||||||
Merchant Loan [Member] | |||||||||||||||
Payment of notes payable | $ 600,000 | ||||||||||||||
Debt principal balance | $ 936,410 | ||||||||||||||
Merchant Loan [Member] | Settlement Agreement [Member] | |||||||||||||||
Proceeds from promissory notes | 48,344 | ||||||||||||||
Payment of notes payable | 233,434 | 185,090 | |||||||||||||
Debt principal balance | $ 364,740 | ||||||||||||||
Note maturity date | Mar. 11, 2020 | ||||||||||||||
Repayment of principal amount | 52,500 | ||||||||||||||
Remaining of debt | 222,500 | ||||||||||||||
Weekly Installments [Member] | Settlement Agreement [Member] | |||||||||||||||
Payment of notes payable | $ 275,000 | ||||||||||||||
Final Payment [Member] | Settlement Agreement [Member] | |||||||||||||||
Note maturity date | May 12, 2020 | ||||||||||||||
Secured Merchant Loan [Member] | |||||||||||||||
Debt principal balance | 1,819,196 | 405,290 | 1,819,196 | ||||||||||||
Notes payable - related party | 1,057,074 | 393,972 | 1,057,074 | ||||||||||||
Unamortized debt discount | 762,122 | $ 11,318 | 762,122 | ||||||||||||
Notes and loans payable | 0 | 0 | |||||||||||||
Twelve Monthly Installments [Member] | Secured Merchant Agreements [Member] | |||||||||||||||
Note maturity date | Nov. 25, 2020 | ||||||||||||||
Number of installments | Days | 12 | ||||||||||||||
Twelve Monthly Installments [Member] | Secured Merchant Agreements One [Member] | |||||||||||||||
Note maturity date | Nov. 25, 2020 | ||||||||||||||
Promissory Notes [Member] | Entities or Individuals [Member] | Minimum [Member] | |||||||||||||||
Debt instrument interest rate | 7.00% | ||||||||||||||
Promissory Notes [Member] | Entities or Individuals [Member] | Maximum [Member] | |||||||||||||||
Debt instrument interest rate | 10.00% | ||||||||||||||
New Promissory Notes [Member] | Entities or Individuals [Member] | |||||||||||||||
Notes payable | 40,000 | $ 40,000 | 40,000 | ||||||||||||
Senior Secured Demand Promissory Notes [Member] | |||||||||||||||
Notes payable | $ 770,000 | $ 770,000 | |||||||||||||
Proceeds from promissory notes | 699,955 | ||||||||||||||
Origination fees | 45 | ||||||||||||||
Payment of notes payable | 50,000 | ||||||||||||||
Debt original issue discount | 70,000 | 70,000 | |||||||||||||
Debt instrument, periodic payment | 220,000 | $ 437,532 | |||||||||||||
Debt due date, description | The Company repaid $437,532 of the Fall 2018 Promissory Notes and interest due of $36,760 was reclassified to principal amount due. | ||||||||||||||
Senior Secured Demand Promissory Notes [Member] | Entities or Individuals [Member] | |||||||||||||||
Notes payable | 149,228 | 99,228 | $ 149,228 | ||||||||||||
Separate Promissory Notes [Member] | Several Individuals [Member] | |||||||||||||||
Notes payable | 2,517,150 | 443,000 | 2,517,150 | ||||||||||||
Proceeds from promissory notes | 423,000 | 2,238,900 | |||||||||||||
Payment of notes payable | 298,000 | 1,118,400 | |||||||||||||
Notes payable - related party | 565,000 | ||||||||||||||
Unamortized debt discount | $ 238,250 | $ 238,250 | |||||||||||||
Debt original issue discount | 20,000 | ||||||||||||||
Debt due date, description | These notes were due between 45 and 273 days from the respective note issuance date. | ||||||||||||||
Warrant issued | shares | 58,000 | ||||||||||||||
Number of warrants to purchase shares of common stock | shares | 58,000 | 58,000 | |||||||||||||
Warrant exercise price | $ / shares | $ 1 | $ 1 | |||||||||||||
Warrant term | 5 years | 5 years | |||||||||||||
Separate Promissory Notes [Member] | Several Individuals [Member] | Warrants One [Member] | |||||||||||||||
Conversion of notes payable | $ 978,750 | $ 978,750 | |||||||||||||
Accrued interest | $ 120,307 | $ 120,307 | |||||||||||||
Number of warrants to purchase shares of common stock | shares | 439,623 | 439,623 | |||||||||||||
Warrant exercise price | $ / shares | $ 2.50 | $ 2.50 | |||||||||||||
Warrant term | 5 years | 5 years | |||||||||||||
Separate Previous Promissory Notes [Member] | Several Individuals [Member] | |||||||||||||||
Notes payable | $ 40,000 | $ 40,000 | |||||||||||||
Notes payable - related party | 420,000 | 420,000 | |||||||||||||
Notes payable liabilities assumed | 342,500 | 342,500 | |||||||||||||
Equipment Notes Payable [Member] | |||||||||||||||
Notes payable | 292,778 | 292,778 | |||||||||||||
Notes payable liabilities assumed | 523,207 | 523,207 | |||||||||||||
Notes and loans payable | 57,001 | 53,668 | 57,001 | ||||||||||||
Equipment Notes Payable [Member] | |||||||||||||||
Notes and loans payable | 181,911 | 173,239 | 181,911 | ||||||||||||
Equipment Notes Payable [Member] | Auto Financing Agreement [Member] | |||||||||||||||
Payment of notes payable | 24,030 | 1,832 | |||||||||||||
Notes and loans payable | 44,905 | $ 162,868 | 44,905 | $ 162,868 | |||||||||||
Promissory Notes [Member] | |||||||||||||||
Notes payable | $ 460,510 | ||||||||||||||
Payment of notes payable | 19,002 | ||||||||||||||
Note maturity date | Jan. 3, 2021 | ||||||||||||||
Unamortized debt discount | $ 0 | $ 0 | |||||||||||||
Debt instrument interest rate | 20.00% | ||||||||||||||
Sixty Monthly Installments [Member] | |||||||||||||||
Convertible debt | $ 9,304 | ||||||||||||||
Number of installments | Days | 60 | ||||||||||||||
Remaining Fifty-Nine Payments [Member] | |||||||||||||||
Note maturity date | Jan. 27, 2020 | ||||||||||||||
Equipment Notes Payable One [Member] | |||||||||||||||
Notes and loans payable | 441,508 | ||||||||||||||
Notes Payable [Member] | |||||||||||||||
Amortization of debt discounts | $ 594,445 | $ 525,829 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Mar. 31, 2020 | Jan. 30, 2020 | Dec. 31, 2019 |
Less: unamortized debt discount | $ (1,267,473) | ||
Less: current portion of notes payable | $ (1,733,440) | $ (2,425,003) | |
Notes payable - long-term | 361,680 | ||
Notes Payable [Member] | |||
Principal amounts | 2,106,438 | 3,187,125 | |
Less: unamortized debt discount | (11,318) | (762,122) | |
Principal amounts, net | 2,095,120 | 2,425,003 | |
Less: current portion of notes payable | (1,733,440) | (2,425,003) | |
Notes payable - long-term | $ 361,680 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Jun. 05, 2020 | Mar. 31, 2020 | Feb. 29, 2020 | Jan. 31, 2020 | Jan. 07, 2020 | Aug. 29, 2019 | Aug. 16, 2019 | Apr. 09, 2019 | Feb. 25, 2019 | Aug. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 28, 2020 | Jun. 26, 2020 | Jun. 16, 2020 | Apr. 20, 2020 | Apr. 02, 2020 | Jan. 30, 2020 | Dec. 31, 2019 | Oct. 03, 2019 | Sep. 06, 2019 | Aug. 30, 2019 | Jul. 31, 2018 | Jun. 18, 2018 |
Preferred stock, authorized | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||
Common stock issuable, shares | 25,000 | 25,000 | 25,000 | |||||||||||||||||||||
Voting percentage | 100.00% | |||||||||||||||||||||||
Value of stock issued for service rendered | $ 2,750,808 | |||||||||||||||||||||||
Gain on debt extinguishment, net | $ 275,034 | $ 93,871 | ||||||||||||||||||||||
Warrant to purchase shares of common stock | 8,644,474 | |||||||||||||||||||||||
Warrant exercise price | $ 0.40 | |||||||||||||||||||||||
Debt original issue discount | $ 1,267,473 | |||||||||||||||||||||||
Debt conversion price, per share | $ 0.40 | |||||||||||||||||||||||
Deemed dividend | $ 17,836,244 | |||||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||||
Voting percentage | 51.00% | |||||||||||||||||||||||
Warrant term | 5 years | |||||||||||||||||||||||
Warrant exercise price | $ 0.06 | |||||||||||||||||||||||
Warrants [Member] | ||||||||||||||||||||||||
Warrant to purchase shares of common stock | 818,400 | 818,400 | ||||||||||||||||||||||
Warrant exercise price | $ 0.40 | $ 3.50 | $ 2.50 | |||||||||||||||||||||
Warrant issued | 374,000 | |||||||||||||||||||||||
Debt original issue discount | $ 262,872 | $ 246,984 | ||||||||||||||||||||||
Proceeds from warrant issuance | $ 295,534 | |||||||||||||||||||||||
Warrants [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||
Warrant exercise price | $ 2.50 | |||||||||||||||||||||||
Note Conversion Agreement [Member] | ||||||||||||||||||||||||
Gain on debt extinguishment, net | $ 172,720 | |||||||||||||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||||||||||||
Warrant exercise price | 0.40 | 2.50 | ||||||||||||||||||||||
Debt original issue discount | $ 186,000 | $ 186,000 | ||||||||||||||||||||||
Sale of stock, price per share | $ 2.50 | |||||||||||||||||||||||
Debt conversion price, per share | $ 0.40 | |||||||||||||||||||||||
Deemed dividend | $ 17,836,244 | |||||||||||||||||||||||
Securities Purchase Agreement [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||
Debt conversion price, per share | $ 0.40 | $ 0.40 | ||||||||||||||||||||||
Securities Purchase Agreement [Member] | Maximum [Member] | ||||||||||||||||||||||||
Warrant to purchase shares of common stock | 395,176 | 987,940 | ||||||||||||||||||||||
Securities Purchase Agreement [Member] | Minimum [Member] | ||||||||||||||||||||||||
Warrant to purchase shares of common stock | 1,383,116 | |||||||||||||||||||||||
Securities Purchase Agreement [Member] | Warrants [Member] | ||||||||||||||||||||||||
Warrant exercise price | $ 0.40 | $ 0.40 | ||||||||||||||||||||||
Debt original issue discount | $ 1,267,473 | $ 1,267,473 | ||||||||||||||||||||||
Fair value of warrants | $ 262,872 | |||||||||||||||||||||||
Conversion Debt [Member] | ||||||||||||||||||||||||
Conversion of common stock shares issued | 5,290,406 | |||||||||||||||||||||||
Value of conversion of shares issued | $ 310,894 | |||||||||||||||||||||||
Accrued interest payable | $ 30,625 | $ 30,625 | ||||||||||||||||||||||
2020 Warrants [Member] | ||||||||||||||||||||||||
Warrant issued | 444,400 | |||||||||||||||||||||||
2020 Warrants [Member] | Warrants [Member] | ||||||||||||||||||||||||
Warrant term | 5 years | 5 years | ||||||||||||||||||||||
2020 Notes [Member] | ||||||||||||||||||||||||
Warrant issued | 444,400 | |||||||||||||||||||||||
Fair value of warrants | $ 456,631 | |||||||||||||||||||||||
Proceeds from warrant issuance | $ 456,631 | |||||||||||||||||||||||
August 2019 Warrants [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||||||||||
Warrant term | 5 years | |||||||||||||||||||||||
Warrant exercise price | $ 3.50 | |||||||||||||||||||||||
August 2019 Warrants [Member] | Securities Purchase Agreement [Member] | Maximum [Member] | ||||||||||||||||||||||||
Warrant to purchase shares of common stock | 987,940 | |||||||||||||||||||||||
New Convertible Debt [Member] | ||||||||||||||||||||||||
Warrant exercise price | $ 0.40 | |||||||||||||||||||||||
Debt conversion price, per share | $ 0.40 | |||||||||||||||||||||||
Derivative liabilities | $ 11,381,885 | |||||||||||||||||||||||
New Convertible Debt [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||
Warrant exercise price | $ 0.0203 | |||||||||||||||||||||||
New Convertible Debt [Member] | Maximum [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||
Warrant to purchase shares of common stock | 178,607,053 | |||||||||||||||||||||||
New Convertible Debt [Member] | Minimum [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||
Warrant to purchase shares of common stock | 9,061,143 | |||||||||||||||||||||||
New Convertible Debt One [Member] | ||||||||||||||||||||||||
Warrant to purchase shares of common stock | 416,669 | |||||||||||||||||||||||
Warrant exercise price | $ 0.40 | |||||||||||||||||||||||
Debt conversion price, per share | $ 0.40 | |||||||||||||||||||||||
Deemed dividend | $ 859,768 | |||||||||||||||||||||||
Chief Executive Officer [Member] | ||||||||||||||||||||||||
Number of stock issued for service rendered | 2,670,688 | |||||||||||||||||||||||
Shares issued, price per share | $ 1.03 | |||||||||||||||||||||||
Stock-based compensation | $ 2,750,808 | |||||||||||||||||||||||
Value of stock issued for service rendered | $ 2,750,808 | |||||||||||||||||||||||
Investors [Member] | 2020 Warrants [Member] | Warrants [Member] | ||||||||||||||||||||||||
Warrant to purchase shares of common stock | 818,400 | 818,400 | ||||||||||||||||||||||
Warrant exercise price | $ 0.40 | $ 0.40 | ||||||||||||||||||||||
Accredited Investor [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||||||||||
Warrant to purchase shares of common stock | 66,401 | |||||||||||||||||||||||
Warrant term | 5 years | |||||||||||||||||||||||
Warrant exercise price | $ 3.51 | |||||||||||||||||||||||
Debt conversion price, per share | $ 2.50 | |||||||||||||||||||||||
Accredited Investor [Member] | October 3 Warrants [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||||||||||
Warrant to purchase shares of common stock | 66,667 | |||||||||||||||||||||||
Warrant exercise price | $ 2.50 | |||||||||||||||||||||||
Series A Convertible Preferred Stock [Member] | ||||||||||||||||||||||||
Preferred stock, authorized | 4,000,000 | 4,000,000 | 4,000,000 | |||||||||||||||||||||
Number of restricted common stock issued | 2,600,000 | |||||||||||||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||
Series B Convertible Preferred Stock [Member] | ||||||||||||||||||||||||
Preferred stock, authorized | 1,700,000 | 1,700,000 | 1,700,000 | 1,700,000 | ||||||||||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||
Preferred stock, stated value | $ 0.001 | |||||||||||||||||||||||
Number of preferred shares agreed to exchange into restricted common stock | 700,000 | |||||||||||||||||||||||
Common stock issuable, shares | 700,000 | |||||||||||||||||||||||
Series B Convertible Preferred Stock [Member] | August 2019 Purchase Agreement [Member] | ||||||||||||||||||||||||
Voting rights description | Pursuant to the August 2019 Purchase Agreement (see Note 6), by and among the Company and the investors named therein (the “August 2019 Investors”), the Company is required to keep reserved for issuance to the August 2019 Investors three times the number of shares of common stock issuable to the August 2019 Investors upon conversion or exercise, as applicable, of convertible notes and warrants held by the August 2019 Investors (the “August 2019 Reserve Requirement”). If the Company fails to meet the August 2019 Reserve Requirement within 45 days after written notice from an August 2019 Investor, the Company must, inter alia, sell to the Lead Investor (as defined in the August 2019 Purchase Agreement) for $100 a series of preferred stock which holds voting power equal to 51% of the number of votes eligible to vote at any special or annual meeting of the Company’s stockholders (with the power to take action by written consent in lieu of a stockholders meeting) for the sole purpose of amending the Company’s Amended and Restated Articles of Incorporation to increase the number of shares of common stock that the Company is authorized to issue, which such preferred stock will be automatically cancelled upon the effectiveness of the resulting increase in the Company’s authorized stock. | |||||||||||||||||||||||
Voting percentage | 51.00% | |||||||||||||||||||||||
Series B Convertible Preferred Stock [Member] | John Mercadante [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||
Voting rights description | On June 5, 2020, the Company sold to John Mercadante, for $100.00, one share of Series C Preferred Stock which has voting power equal to 51% of the number of votes eligible to vote at any special or annual meeting of the Company’s stockholders (with the power to take action by written consent in lieu of a stockholders meeting) for the sole purpose of amending the Company’s Amended and Restated Articles of Incorporation to increase the number of shares of common stock that the Company is authorized to issue. | |||||||||||||||||||||||
Voting percentage | 51.00% | |||||||||||||||||||||||
Series B Convertible Preferred Stock [Member] | Prime EFS, LLC [Member] | ||||||||||||||||||||||||
Number of stock issued for service rendered | 1,000,000 | |||||||||||||||||||||||
Shares issued, price per share | $ 2.50 | |||||||||||||||||||||||
Stock-based compensation | $ 2,500,000 |
Stockholders' Deficit - Summary
Stockholders' Deficit - Summary of Stock Option Activities (Details) | 3 Months Ended |
Mar. 31, 2020USD ($)$ / sharesshares | |
Equity [Abstract] | |
Number of Options Outstanding, Beginning Balance | shares | 80,000 |
Number of Options Outstanding, Granted | shares | |
Number of Options Outstanding, Cancelled | shares | |
Number of Options Outstanding, Ending Balance | shares | 80,000 |
Number of Options Outstanding, Exercisable | shares | 20,000 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 8.84 |
Weighted Average Exercise Price, Granted | $ / shares | |
Weighted Average Exercise Price, Cancelled | $ / shares | |
Weighted Average Exercise Price, Ending Balance | $ / shares | 8.84 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 8.84 |
Weighted Average Remaining Contractual Term (Years), Beginning Balance | 0 years |
Weighted Average Remaining Contractual Term (Years), Ending Balance | 4 years 29 days |
Weighted Average Remaining Contractual Term (Years), Exercisable | 4 years 29 days |
Aggregate Intrinsic Value, Beginning Balance | $ | |
Aggregate Intrinsic Value, Ending Balance | $ | |
Aggregate Intrinsic Value, exercisable | $ |
Stockholders' Deficit - Summa_2
Stockholders' Deficit - Summary of Warrant Activities (Details) - Warrants [Member] | 3 Months Ended |
Mar. 31, 2020USD ($)$ / sharesshares | |
Number of Warrants Balance Outstanding Beginning | shares | 3,649,861 |
Number of Warrants Granted | shares | 818,400 |
Number of Warrants Increase in warrants related to price protection | shares | 177,094,903 |
Number of Warrants Balance Outstanding Ending | shares | 181,563,164 |
Number of Warrants Exercisable Ending Balance | shares | 181,563,164 |
Weighted Average Exercise Price Balance Outstanding Beginning | $ / shares | $ 2.41 |
Weighted Average Exercise Price Granted | $ / shares | 0.40 |
Weighted Average Exercise Price Increase in warrants related to price protection | $ / shares | 0.02 |
Weighted Average Exercise Price Balance Outstanding Ending | $ / shares | 0.05 |
Weighted Average Exercise Price Exercisable Ending Balance | $ / shares | $ 0.05 |
Weighted Average Remaining Contractual Term (Years) Balance Outstanding Beginning | 4 years 7 months 28 days |
Weighted Average Remaining Contractual Term (Years) Balance Outstanding Ending | 4 years 2 months 19 days |
Weighted Average Remaining Contractual Term (Years) Exercisable Ending Balance | 4 years 2 months 19 days |
Aggregate Intrinsic Value Balance Outstanding Beginning | $ | $ 311,070 |
Aggregate Intrinsic Value Balance Outstanding Ending | $ | 1,731,883 |
Aggregate Intrinsic Value Exercisable Ending Balance | $ | $ 1,731,883 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | Jun. 10, 2020USD ($) | Mar. 19, 2020USD ($) | Mar. 06, 2020USD ($)shares | Jan. 10, 2020USD ($) | Aug. 30, 2019USD ($) | Feb. 24, 2019USD ($) | Jun. 18, 2018USD ($) | Apr. 30, 2020USD ($) | Mar. 31, 2020USD ($)Integer | Jan. 07, 2020shares | Dec. 31, 2019USD ($) |
Contingent liability | $ 440,000 | $ 440,000 | |||||||||
Number of warrants issued | shares | 8,644,474 | ||||||||||
Number of lawsuits, pending | Integer | 0 | ||||||||||
Prime EFS, LLC [Member] | |||||||||||
Payment of deductible and uninsured damages | $ 387,392 | ||||||||||
Prime EFS, LLC [Member] | Maximum [Member] | |||||||||||
Sought damages value | $ 382,000 | ||||||||||
Prime EFS, LLC [Member] | Maximum [Member] | Subsequent Event [Member] | |||||||||||
Payment for arbitration | $ 327,000 | ||||||||||
Prime EFS, LLC [Member] | Minimum [Member] | |||||||||||
Sought damages value | $ 58,000 | ||||||||||
Employment Agreement [Member] | |||||||||||
Executive's base salary | $ 520,000 | ||||||||||
Executive's base salary description | The draft proposed by Mr. Mazzola also called for his base salary to increase by $260,000 per year upon (i) Prime EFS achieving revenue of $20 million on an annualized basis (the "Initial Target Goal") for four consecutive weeks; and (ii) each time Prime EFS achieves revenue of an additional $10 million increment above the Initial Target Goal (i.e., $30 million, $40 million, $50 million, etc.) on an annualized basis for four consecutive weeks. Prime EFS never agreed to any of these terms, orally or in writing. The draft proposed by Mr. Mazzola also called for his base salary to be subject to review annually by the Manager of Prime EFS and that his salary could be increased (but not decreased). Prime EFS agreed to this term. | ||||||||||
Agreement expiration date | May 31, 2023 | ||||||||||
Operating lease, description | The draft proposed by Mr. Mazzola also provided that the term of the employment would automatically be extended for additional one-year periods unless, at least sixty (60) days prior to the end of the expiration of the term of employment, one party gives notice to the other of an intent not to extend. | ||||||||||
Employment Agreement [Member] | Officers [Member] | |||||||||||
Payment at rate of excess | $ 350,000 | ||||||||||
Settlement Agreement [Member] | BMF Capital [Member] | |||||||||||
Due to related parties | $ 275,000 | ||||||||||
Number of warrants issued | shares | 40,300 | ||||||||||
Insurance claim amount | $ 10,000 | ||||||||||
Litigation settlement amount | $ 275,000 | ||||||||||
Letter Agreement [Member] | Bellridge Capital, LLC. [Member] | |||||||||||
Sought damages value | $ 150,000 | ||||||||||
Contingency damages sought description | Bellridge claims that the Company is in breach of its obligations under an August 29, 2019 letter agreement to issue a confession of judgment and to pay Bellridge $150,000 per month against the amounts due under, inter alia, an April 2019 promissory note. In an April 28, 2020 letter, Bellridge contends that TLSS owed Bellridge $1,978,557.76 as of that date. In a purported standstill agreement subsequently proposed by Bellridge, Bellridge claims TLSS owes it $2,271,099.83, a figure which allegedly includes default rate interest. Bellridge also claims that a subordination agreement it signed with the Company on August 30, 2019, was void ab initio. Bellridge has also demanded the conversion of approximately $20,000 in indebtedness into the common stock of the Company, a conversion which the Company has not effectuated because the parties did not come to agreement on a conversion price. | ||||||||||
Amount owed to related parties | $ 1,978,558 | ||||||||||
Cliam amount | $ 2,271,100 | ||||||||||
Indebtedness into common stock | $ 20,000 | ||||||||||
Consulting Agreement [Member] | |||||||||||
Sought damages value | $ 42,000 | ||||||||||
Consulting Agreement [Member] | SCS LLC [Member] | |||||||||||
Amount of counter claims filed | $ 42,000 |
Related Party Transactions an_2
Related Party Transactions and Balances (Details Narrative) - USD ($) | Jul. 03, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 |
Advances to related party | $ 500,000 | ||||
Interest expense, related party debt | 107,138 | $ 539,888 | |||
Notes payable - related parties | 500,000 | $ 500,000 | |||
Promissory Notes [Member] | |||||
Due to related party | $ 500,000 | ||||
Maturity date | Jan. 3, 2021 | ||||
Note interest rate | 20.00% | ||||
Promissory Notes [Member] | Chief Executive Officer [Member] | |||||
Accrued interest payable | 105,884 | 83,445 | |||
Promissory Notes [Member] | |||||
Note interest rate | 18.00% | ||||
Former Majority Owner [Member] | |||||
Acquired balance due from former majority owner | 14,019 | ||||
Payment of cash acquired | 489,174 | ||||
Cash paid for acquisition | 489,174 | ||||
Repayment of related party debt | 35,000 | $ 216,155 | 130,000 | ||
Due to related party | 94,000 | 129,000 | |||
Employee [Member] | |||||
Repayment of related party debt | 93,000 | ||||
Due to related party | 70,000 | 88,000 | |||
Advances to related party | 75,000 | 88,000 | |||
Costs and expenses of related party | 57,200 | ||||
Employee [Member] | Prime EFS, LLC [Member] | |||||
Due to related party | 0 | $ 25,000 | |||
Advances to related party | 25,000 | ||||
Interest expense, related party debt | $ 27,500 |
Operating Lease Right-of-Use _3
Operating Lease Right-of-Use ('ROU') Assets and Operating Lease Liabilities (Details Narrative) - USD ($) | Jan. 02, 2019 | Nov. 30, 2018 | Jul. 31, 2019 | Dec. 31, 2018 | Jul. 31, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Jul. 31, 2019 |
Operating lease, right-of-use assets | $ 1,705,996 | $ 1,750,430 | |||||||
Operating lease, lease liabilities | 1,734,521 | $ 1,773,384 | |||||||
Operating lease, rent expense | $ 164,350 | $ 98,831 | |||||||
Minimum [Member] | |||||||||
Lease liability, discount rate | 10.00% | ||||||||
Maximum [Member] | |||||||||
Lease liability, discount rate | 12.00% | ||||||||
ASU 2016-02 [Member] | |||||||||
Operating lease, right-of-use assets | $ 631,723 | $ 1,352,597 | |||||||
Operating lease, lease liabilities | 631,723 | 1,352,597 | |||||||
Lease Agreement [Member] | |||||||||
Operating lease, expiration date | Nov. 30, 2023 | Feb. 28, 2024 | Dec. 31, 2023 | ||||||
Operating lease, monthly rent | $ 6,000 | $ 10,000 | |||||||
Payments for security deposit | $ 28,000 | $ 20,000 | |||||||
Operating lease, renewal term | 4 years 6 months | 4 years 6 months | |||||||
Lease Agreement [Member] | From Lease Commencement Date to Last Day of Second Lease Year [Member] | |||||||||
Operating lease, monthly rent | $ 14,000 | ||||||||
Lease Agreement [Member] | Twenty Fifth Month of Commencement Date [Member] | |||||||||
Operating lease, monthly rent | $ 14,420 | $ 10,500 | |||||||
Lease Agreement 1 [Member] | |||||||||
Operating lease, expiration date | Aug. 31, 2024 | ||||||||
Operating lease, monthly rent | $ 18,000 | ||||||||
Payments for security deposit | $ 18,000 | ||||||||
Operating lease, renewal term | 5 years | 5 years | |||||||
Lease Agreement 1 [Member] | Twenty Fifth Month of Commencement Date [Member] | |||||||||
Lease description | Increase by 3% each lease year |
Operating Lease Right-of-Use _4
Operating Lease Right-of-Use ('ROU') Assets and Operating Lease Liabilities - Schedule of Right of Use Asset (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Office leases right of use assets | $ 1,984,320 | $ 1,984,320 |
Less: accumulated amortization into rent expense | (278,324) | (233,890) |
Right of use asset, net | $ 1,705,996 | $ 1,750,430 |
Operating Lease Right-of-Use _5
Operating Lease Right-of-Use ('ROU') Assets and Operating Lease Liabilities - Schedule of Operating Lease Liability Related to ROU Asset (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Lease liabilities related to office leases right of use assets | $ 1,734,521 | $ 1,773,384 |
Less: current portion of lease liabilities | (341,483) | (333,126) |
Lease liabilities - long-term | $ 1,393,038 | $ 1,440,258 |
Operating Lease Right-of-Use _6
Operating Lease Right-of-Use ('ROU') Assets and Operating Lease Liabilities - Schedule of Lease Payments Due Under Operating Leases (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2021 | $ 509,040 | |
2022 | 522,913 | |
2023 | 532,205 | |
2024 | 485,440 | |
2025 | 101,296 | |
Total minimum non-cancelable operating lease payments | 2,150,894 | |
Less: discount to fair value | (416,373) | |
Total lease liability | $ 1,734,521 | $ 1,773,384 |
Concentrations (Details Narrati
Concentrations (Details Narrative) - One Customer [Member] | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Sales Revenue, Net [Member] | ||
Concentration risk, percentage | 97.90% | 99.00% |
Accounts Receivable [Member] | ||
Concentration risk, percentage | 93.90% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Jun. 26, 2020$ / sharesshares | Jun. 19, 2020USD ($) | Jun. 05, 2020 | Apr. 20, 2020USD ($)Days$ / shares | Apr. 15, 2020USD ($) | Apr. 02, 2020USD ($)Days$ / sharesshares | Aug. 29, 2019USD ($) | Apr. 30, 2020shares | Jun. 29, 2020USD ($)shares | Mar. 31, 2020USD ($)$ / sharesshares | Mar. 31, 2019USD ($) | Jun. 28, 2020$ / shares | Jun. 16, 2020$ / sharesshares | May 02, 2020 | Jan. 31, 2020USD ($) | Jan. 30, 2020USD ($) | Jan. 07, 2020$ / shares | Dec. 31, 2019USD ($)$ / sharesshares | Sep. 06, 2019$ / shares | Aug. 31, 2019$ / shares | Aug. 30, 2019USD ($) | Jun. 18, 2018 |
Debt original issue discount | $ 1,267,473 | |||||||||||||||||||||
Debt conversion price per share | $ / shares | $ 0.40 | |||||||||||||||||||||
Warrant exercise price | $ / shares | 0.40 | |||||||||||||||||||||
Stock issued during period, value, conversion of convertible securities | $ 341,519 | |||||||||||||||||||||
Voting percentage | 100.00% | |||||||||||||||||||||
Common stock, shares issued | shares | 17,123,009 | 11,832,603 | ||||||||||||||||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | ||||||||||||||||||||
Revenues | $ 8,635,060 | $ 5,803,207 | ||||||||||||||||||||
Warrants [Member] | ||||||||||||||||||||||
Debt principal balance | $ 2,469,840 | |||||||||||||||||||||
Proceeds from warrants | $ 295,534 | |||||||||||||||||||||
Debt original issue discount | $ 262,872 | $ 246,984 | ||||||||||||||||||||
Warrant exercise price | $ / shares | 0.40 | $ 2.50 | $ 3.50 | |||||||||||||||||||
Convertible Promissory Notes [Member] | ||||||||||||||||||||||
Debt principal balance | 8,498,121 | $ 5,459,909 | ||||||||||||||||||||
Debt original issue discount | 3,162,352 | 2,210,950 | ||||||||||||||||||||
Convertible notes payable | 5,647,429 | $ 3,634,344 | ||||||||||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||||||||||
Debt original issue discount | $ 186,000 | |||||||||||||||||||||
Debt instrument interest rate | 10.00% | |||||||||||||||||||||
Debt instrument, description | During the existence of an Event of Default (as defined in the applicable Q1 2020 Note), which includes, amongst other events, any default in the payment of principal and interest payment (including Q1 2020 Note Amortization Payments) under any Q1 2020 Note or any other indebtedness, interest accrues at the lesser of (i) the rate of 18% per annum, or (ii) the maximum amount permitted by law. Commencing on the thirteenth month anniversary of each Q1 2020 Note, monthly payments of interest and monthly principal payments, based on a 12 month amortization schedule (each, a “Q1 2020 Note Amortization Payment”), will be due and payable | |||||||||||||||||||||
Debt conversion price per share | $ / shares | 0.40 | |||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.40 | $ 2.50 | ||||||||||||||||||||
Securities Purchase Agreement [Member] | Warrants [Member] | ||||||||||||||||||||||
Debt original issue discount | $ 1,267,473 | |||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.40 | |||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||
Warrant to purchase shares of common stock | shares | 28,100,000 | |||||||||||||||||||||
Warrants term | 5 years | |||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.06 | |||||||||||||||||||||
Stock issued during period, shares, conversion of convertible securities | shares | 123,279,793 | |||||||||||||||||||||
Stock issued during period, value, conversion of convertible securities | $ 803,827 | |||||||||||||||||||||
Debt instrument, accrued interest | 68,933 | |||||||||||||||||||||
Debt instrument fee | $ 500 | |||||||||||||||||||||
Common shares issued in connection cashless exercise of warrants | shares | 70,203,889 | |||||||||||||||||||||
Voting percentage | 51.00% | |||||||||||||||||||||
Common stock, shares issued | shares | 4,000,000,000 | |||||||||||||||||||||
Common stock, par value | $ / shares | $ 0.001 | |||||||||||||||||||||
Subsequent Event [Member] | Warrants [Member] | ||||||||||||||||||||||
Warrant exercise price | $ / shares | $ 2.50 | |||||||||||||||||||||
Subsequent Event [Member] | Convertible Notes [Member] | ||||||||||||||||||||||
Debt instrument interest rate | 18.00% | |||||||||||||||||||||
Debt instrument, description | The outstanding principal balance on date of default increased by 30% which amounted to approximately $136,950, default interest accrues at 18%, and the default conversion terms apply. | |||||||||||||||||||||
Derivative liabilities | $ 400,365 | |||||||||||||||||||||
Debt instrument, increase decrease percent | 30.00% | |||||||||||||||||||||
Convertible debt | $ 136,950 | |||||||||||||||||||||
Subsequent Event [Member] | Shypdirect PPP Loan [Member] | M&T Bank [Member] | ||||||||||||||||||||||
Debt principal balance | $ 504,940 | |||||||||||||||||||||
Debt instrument interest rate | 1.00% | |||||||||||||||||||||
Debt instrument, description | Monthly principal and interest payments, less the amount of any potential forgiveness (discussed below), will commence on November 28, 2020. | |||||||||||||||||||||
Debt instrument, term | 2 years | |||||||||||||||||||||
Debt instrument, maturity date | Apr. 28, 2022 | |||||||||||||||||||||
Subsequent Event [Member] | Prime EFS PPP Loan [Member] | M&T Bank [Member] | ||||||||||||||||||||||
Debt principal balance | $ 2,941,212 | |||||||||||||||||||||
Debt instrument interest rate | 1.00% | |||||||||||||||||||||
Debt instrument, description | Monthly principal and interest payments, less the amount of any potential forgiveness (discussed below), will commence on November 16, 2020. | |||||||||||||||||||||
Debt instrument, term | 2 years | |||||||||||||||||||||
Debt instrument, maturity date | Apr. 16, 2022 | |||||||||||||||||||||
Subsequent Event [Member] | Paycheck Protection Promissory Note [Member] | ||||||||||||||||||||||
Percentage of payroll costs | 60.00% | |||||||||||||||||||||
Subsequent Event [Member] | Investors [Member] | Series C Preferred Stock [Member] | ||||||||||||||||||||||
Voting rights description | If the Company fails to meet the August 2019 Reserve Requirement within 45 days after written notice from an August 2019 Investor, the Company must, inter alia, sell to the Lead Investor (as defined in the August 2019 Purchase Agreement) for $100 a series of preferred stock which holds voting power equal to 51% of the number of votes eligible to vote at any special or annual meeting of the Company’s stockholders (with the power to take action by written consent in lieu of a stockholders meeting) for the sole purpose of amending the Company’s Amended and Restated Articles of Incorporation to increase the number of shares of common stock that the Company is authorized to issue, which such preferred stock will be automatically cancelled upon the effectiveness of the resulting increase in the Company’s authorized stock. | The Company was unable to comply with the August 2019 Reserve Requirement within 45 days after written notice from an August 2019 Investor. Accordingly, on June 5, 2020, the Company sold to John Mercadante, for $100.00, 1 share of Series C Preferred Stock which has voting power equal to 51% of the number of votes eligible to vote at any special or annual meeting of the Company's stockholders (with the power to take action by written consent in lieu of a stockholders meeting) for the sole purpose of amending the Company's Amended and Restated Articles of Incorporation to increase the number of shares of common stock that the Company is authorized to issue. | ||||||||||||||||||||
Voting percentage | 51.00% | 51.00% | ||||||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||||||||
Debt instrument, description | This Note may be prepaid, provided that equity conditions, as defined in the Note, have been met (or any such failure to meet the Equity Conditions have been waived): (i) from April 20, 2020 until and through July 20, 2020 at an amount equal to 105% of the aggregate of the outstanding principal balance of the Note and accrued and unpaid interest, and (ii) after July 20, 2020 at an amount equal to 115% of the aggregate of the outstanding principal balance of the Note and accrued and unpaid interest. In the event that the Company closes a registered public offering of securities for its own account (a "Public Offering"), the holder may elect to: (x) have its principal and accrued interest prepaid directly from the Public Offering Proceeds at the prices set forth above, or (y) exchange its Note at the closing of the Public Offering for the securities being issued in the Public Offering at the Public Offering prices based upon the outstanding principal, accrued interest and other charges, or (z) continue to hold the Note. Except for a Public Offering and Note Amortization Payments, in order to prepay the Note, the Company shall provide at least 30 days' prior written notice to the holder, during which time the holder may convert the Note in whole or in part at the Conversion Price. For avoidance of doubt, the Note Amortization Payments shall be prepayments and are subject to prepayment penalties equal to 115% of the Note Amortization Payment. In the event the Company consummates a Public Offering while the Note is outstanding, then 25% of the net proceeds of such offering shall, within two business days of the closing of such public offering, be applied to reduce the outstanding obligations pursuant to the Note. Until the Note is no longer outstanding, it shall be convertible, in whole or in part, at any time, and from time to time, into shares of Common Stock at the option of the investor. The "Conversion Price" in effect on any Conversion Date means, as of any Conversion Date or other date of determination, the lower of: (i) $0.40 and (ii) 70% of the second lowest closing price of the Common Stock as reported on the Trading Market during the 20 consecutive Trading Day period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Notice of Conversion. All such Conversion Price determinations are to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately. | The April 1 Note may be prepaid, provided that certain Equity Conditions, as defined in the April 1 Note, have been met (or any such failure to meet the Equity Conditions has been waived): (i) from April 1, 2020 until and through July 1, 2020 at an amount equal to 105% of the aggregate of the outstanding principal balance of the April 1 Note and accrued and unpaid interest, and (ii) after July 1, 2020 at an amount equal to 115% of the aggregate of the outstanding principal balance of the April 1 Note and accrued and unpaid interest. In the event that the Company closes a Public Offering, the holder may elect to: (x) have its principal and accrued interest prepaid directly from the proceeds of the Public Offering at the prices set forth above, or (y) exchange its April 1 Note at the closing of the Public Offering for the securities being issued in the Public Offering at the Public Offering prices based upon the outstanding principal, accrued interest and other charges, or (z) continue to hold the April 1 Note. Except for a Public Offering and April 1 Note Amortization Payments, in order to prepay the April 1 Note, the Company must provide at least 30 days’ prior written notice to the holder, during which time the holder may convert the April 1 Note in whole or in part at the then-applicable conversion price. For avoidance of doubt, the April 1 Note Amortization Payments will be prepayments and are subject to prepayment penalties equal to 115% of the April 1 Note Amortization Payment. In the event the Company consummates a Public Offering while the April 1 Note is outstanding, then 25% of the net proceeds of such offering will, within two business days of the closing of such Public Offering, be applied to reduce the outstanding obligations pursuant to the April 1 Note. Until the April 1 Note is no longer outstanding, it is convertible, in whole or in part, at any time, and from time to time, into shares of common stock at the option of the investor. The “Conversion Price” in effect on any Conversion Date (as defined in the April 1 Note) means, as of any Conversion Date (as defined in the April 1 Note) or other date of determination, $0.40 per share, subject to adjustment as provided herein. If an Event of Default (as defined in the April 1 Note) has occurred, regardless of whether it has been cured or remains ongoing, the April 1 Note is convertible at the lower of: (i) $0.40 and (ii) 70% of the second lowest closing price of the common stock as reported on the Trading Market (as defined in the April 1 Note) during the 20 consecutive Trading Day (as defined in the April 1 Note) period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable notice of conversion. All such conversion price determinations are to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately. | ||||||||||||||||||||
Trading days | Days | 20 | 20 | ||||||||||||||||||||
Debt conversion price per share | $ / shares | $ 0.40 | $ 0.40 | ||||||||||||||||||||
Debt converted conversion percentage | 70.00% | 70.00% | ||||||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | April Warrant [Member] | ||||||||||||||||||||||
Warrant to purchase shares of common stock | shares | 8,800 | |||||||||||||||||||||
Warrants term | 5 years | |||||||||||||||||||||
Warrant exercise price | $ / shares | $ 0.40 | |||||||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | April Note and April Warrant [Member] | ||||||||||||||||||||||
Derivative liabilities | $ 1,334 | |||||||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | April Note [Member] | ||||||||||||||||||||||
Debt principal balance | 6,600 | |||||||||||||||||||||
Debt original issue discount | $ 1,334 | |||||||||||||||||||||
Debt instrument interest rate | 18.00% | |||||||||||||||||||||
Debt instrument, increase decrease percent | 30.00% | |||||||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Investors [Member] | Convertible Promissory Notes [Member] | ||||||||||||||||||||||
Debt principal balance | $ 456,500 | $ 22,000 | ||||||||||||||||||||
Proceeds from warrants | $ 20,000 | |||||||||||||||||||||
Debt instrument original issue discount percentage | 10.00% | 10.00% | ||||||||||||||||||||
Debt original issue discount | $ 41,500 | $ 2,000 | ||||||||||||||||||||
Debt instrument interest rate | 6.00% | 6.00% | ||||||||||||||||||||
Debt instrument, description | The April 20 Note bears interest at 6% per annum and becomes due and payable on April 20, 2022 (the “April 20 Note Maturity Date”). During the existence of an Event of Default (as defined in the April 20 Note), which includes, amongst other events, any default in the payment of principal and interest payment (including any April 20 Note Amortization Payments) under any note or any other indebtedness, interest accrues at the lesser of (i) the rate of 18% per annum, or (ii) the maximum amount permitted by law. Commencing on the thirteenth month anniversary of the April 20 Note, monthly payments of interest and monthly principal payments, based on a 12 month amortization schedule, will be due and payable(each, an “April 20 Note Amortization Payment”), until the April 20 Note Maturity Date, at which time all outstanding principal, accrued and unpaid interest and all other amounts due and payable under the April 20 Note will be immediately due and payable. The April 20 Note Amortization Payments will be made in cash unless the investor requests it to be issued in the Company’s common stock in lieu of a cash payment (each, an “April 20 Note Stock Payment”). If the investor requests an April 20 Note Stock Payment, the number of shares of common stock issued will be based on the amount of the applicable April 20 Note Amortization Payment divided by 80% of the lowest VWAP (as defined in the April 20 Note) during the five Trading Day (as defined in the April 20 Note) period prior to the due date of the April 20 Note Amortization Payment. | The April 1 Note bears interest at 6% per annum and becomes due and payable on the date that is the 24-month anniversary of the original issue date of the April Note (the “April 1 Maturity Date”). During the existence of an Event of Default (as defined in the April 1 Note), which includes, amongst other events, any default in the payment of principal and interest payment (including April 1 Note Amortization Payments) under any note or any other indebtedness, interest accrues at the lesser of (i) the rate of 18% per annum, or (ii) the maximum amount permitted by law. Commencing on the thirteenth month anniversary of the April 1 Note, monthly payments of interest and monthly principal payments, based on a 12 month amortization schedule (each, an “April 1 Note Amortization Payment”), will be due and payable, until the April 1 Maturity Date, at which time all outstanding principal, accrued and unpaid interest and all other amounts due and payable under the April 1 Note will be immediately due and payable. The April 1 Note Amortization Payments will be made in cash unless the investor requests it to be issued in the Company’s common stock in lieu of a cash payment (each, an “April 1 Note Stock Payment”). If the investor requests an April 1 Note Stock Payment, the number of shares of common stock issued will be based on the amount of the applicable April Note 1 Amortization Payment divided by 80% of the lowest VWAP (as defined in the April 1 Note) during the five Trading Day (as defined in the April 1 Note) period prior to the due date of the April 1 Note Amortization Payment. | ||||||||||||||||||||
Trading days | Days | 5 | 5 | ||||||||||||||||||||
Convertible notes payable | $ 415,000 | |||||||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Investors [Member] | Convertible Promissory Notes [Member] | Warrants [Member] | ||||||||||||||||||||||
Warrant to purchase shares of common stock | shares | 8,800 | |||||||||||||||||||||
Subsequent Event [Member] | In-Force Agreement [Member] | Amazon Logistics, Inc [Member] | ||||||||||||||||||||||
Revenues | $ 32,000,000 | |||||||||||||||||||||
Revenue percentage | 74.00% |