Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 11, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | Surna Inc. | |
Entity Central Index Key | 0001482541 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
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 | 237,526,638 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash, cash equivalents and restricted cash | $ 3,271,128 | $ 2,284,881 |
Accounts receivable (net of allowance for doubtful accounts of $165,098 and $165,098, respectively) | 26,732 | 33,480 |
Inventory, net | 519,159 | 327,109 |
Prepaid expenses and other | 2,064,588 | 1,037,823 |
Total Current Assets | 5,881,607 | 3,683,293 |
Noncurrent Assets | ||
Property and equipment, net | 141,825 | 147,732 |
Goodwill | 631,064 | 631,064 |
Intangible assets, net | 7,082 | 7,227 |
Deposits | 8,061 | |
Operating lease right-of-use asset | 294,900 | 343,950 |
Total Noncurrent Assets | 1,082,932 | 1,129,973 |
TOTAL ASSETS | 6,964,539 | 4,813,266 |
CURRENT LIABILITIES | ||
Accounts payable and accrued liabilities | 1,790,315 | 1,784,961 |
Deferred revenue | 6,087,093 | 3,724,189 |
Accrued equity compensation | 52,794 | 128,434 |
Other liabilities | 37,078 | |
Current portion of operating lease liability | 263,662 | 266,105 |
Total Current Liabilities | 8,230,942 | 5,903,689 |
NONCURRENT LIABILITIES | ||
Note payable and accrued interest | 514,918 | |
Other liabilities | 37,078 | 74,156 |
Operating lease liability, net of current portion | 106,891 | 169,119 |
Total Noncurrent Liabilities | 658,887 | 243,275 |
TOTAL LIABILITIES | 8,889,829 | 6,146,964 |
Commitments and Contingencies (Note 7) | ||
SHAREHOLDERS' DEFICIT | ||
Preferred stock, $0.00001 par value; 150,000,000 shares authorized; 42,030,331 shares issued and outstanding | 420 | 420 |
Common stock, $0.00001 par value; 350,000,000 shares authorized; 236,526,638 and 236,526,638 shares issued and outstanding, respectively | 2,366 | 2,366 |
Common stock, $0.00001 par value; 1,000,000 shares to be issued | 67,000 | |
Additional paid in capital | 26,241,935 | 26,107,159 |
Accumulated deficit | (28,237,011) | (27,443,643) |
Total Shareholders' Deficit | (1,925,290) | (1,333,698) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 6,964,539 | $ 4,813,266 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts, net | $ 165,098 | $ 165,098 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 150,000,000 | 150,000,000 |
Preferred stock, shares issued | 42,030,331 | 42,030,331 |
Preferred stock, shares outstanding | 42,030,331 | 42,030,331 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 350,000,000 | 350,000,000 |
Common stock, shares issued | 236,526,638 | 236,526,638 |
Common stock, shares outstanding | 236,526,638 | 236,526,638 |
Common stock, shares to be issued, par value | $ 0.00001 | |
Common stock, shares to be issued | $ 1,000,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Revenue, net | $ 2,366,529 | $ 1,809,925 |
Cost of revenue | 2,021,923 | 1,353,401 |
Gross profit | 344,606 | 456,524 |
Operating expenses: | ||
Advertising and marketing expenses | 177,145 | 148,921 |
Product development costs | 112,638 | 144,948 |
Selling, general and administrative expenses | 740,473 | 1,108,993 |
Total operating expenses | 1,030,256 | 1,402,862 |
Operating loss | (685,650) | (946,338) |
Other income (expense): | ||
Other income (expense), net | (107,000) | 14,320 |
Interest expense | (718) | (6,295) |
Total other income (expense) | (107,718) | 8,025 |
Loss before provision for income taxes | (793,368) | (938,313) |
Income taxes | ||
Net loss | $ (793,368) | $ (938,313) |
Loss per common share - basic and dilutive | $ 0 | $ 0 |
Weighted average number of common shares outstanding, basic and dilutive | 236,526,638 | 231,062,462 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Shareholders' Deficit (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2019 | $ 420 | $ 2,283 | $ 25,326,593 | $ (25,684,927) | $ (355,631) |
Balance, shares at Dec. 31, 2019 | 42,030,331 | 228,216,638 | |||
Balance, shares to be issued at Dec. 31, 2019 | 1,560,000 | ||||
Common shares issued or to be issued on settlement of restricted stock units and award of stock bonuses | $ 83 | $ (83) | |||
Common shares issued or to be issued on settlement of restricted stock units and award of stock bonuses, shares | 8,310,000 | ||||
Common shares issued or to be issued on settlement of restricted stock units and award of stock bonuses, shares to be issued | (1,560,000) | ||||
Fair value of vested restricted stock units awarded to employees | 18,872 | 18,872 | |||
Fair value of vested stock options granted to employees and directors | 639,020 | 639,020 | |||
Common shares to be issued in settlement of legal dispute | |||||
Fair value of vested stock options granted to employees | |||||
Fair value of vested stock options granted to directors | |||||
Net loss | (938,313) | (938,313) | |||
Balance at Mar. 31, 2020 | $ 420 | $ 2,366 | $ 25,984,402 | $ (26,623,240) | $ (636,052) |
Balance, shares at Mar. 31, 2020 | 42,030,331 | 236,526,638 | |||
Balance, shares to be issued at Mar. 31, 2020 | |||||
Balance at Dec. 31, 2020 | $ 420 | $ 2,366 | $ 26,107,159 | $ (27,443,643) | $ (1,333,698) |
Balance, shares at Dec. 31, 2020 | 42,030,331 | 236,526,638 | |||
Balance, shares to be issued at Dec. 31, 2020 | |||||
Balance, shares to be issued, value at Dec. 31, 2020 | |||||
Common shares to be issued in settlement of legal dispute | $ 67,000 | $ 67,000 | |||
Common shares to be issued in settlement of legal dispute, shares to be issued | 1,000,000 | ||||
Fair value of vested stock options granted to employees | 128,434 | 128,434 | |||
Fair value of vested stock options granted to directors | 6,342 | 6,342 | |||
Net loss | (793,368) | (793,368) | |||
Balance at Mar. 31, 2021 | $ 420 | $ 2,366 | $ 26,241,935 | $ (28,237,011) | $ (1,925,290) |
Balance, shares at Mar. 31, 2021 | 42,030,331 | 236,526,638 | |||
Balance, shares to be issued at Mar. 31, 2021 | 1,000,000 | ||||
Balance, shares to be issued, value at Mar. 31, 2021 | $ 67,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (793,368) | $ (938,313) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and intangible asset amortization expense | 18,377 | 30,735 |
Share-based compensation | 6,342 | 154,426 |
Other share-based expense | 67,000 | |
Provision for excess and obsolete inventory | (4,371) | (11,657) |
Loss on disposal of assets | 4,124 | |
Amortization of ROU Asset | 49,051 | 46,666 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 6,748 | 688 |
Inventory | (187,679) | (71,279) |
Prepaid expenses and other | (1,026,765) | 74,924 |
Accounts payable and accrued liabilities | 5,354 | 289,289 |
Deferred revenue | 2,362,905 | (291,104) |
Accrued interest | 718 | |
Lease deposit | (8,061) | |
Operating lease liability, net | (64,672) | (52,849) |
Accrued equity compensation | 52,794 | 36,463 |
Net cash provided by operating activities | 484,373 | (727,887) |
Cash Flows From Investing Activities | ||
Purchases of property and equipment | (12,326) | |
Net cash used in investing activities | (12,326) | |
Cash Flows From Financing Activities | ||
Proceeds from issuance of note payable | 514,200 | |
Net cash provided by financing activities | 514,200 | |
Net change in cash, cash equivalents and restricted cash | 986,247 | (727,887) |
Cash, cash equivalents and restricted cash, beginning of period | 2,284,881 | 922,177 |
Cash, cash equivalents and restricted cash, end of period | 3,271,128 | 194,290 |
Supplemental cash flow information: | ||
Interest paid | ||
Income taxes paid |
General
General | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | Note 1 – General Description of Business Surna Inc. (the “Company”) was incorporated in Nevada on October 15, 2009 and operates under a trade name of Surna Cultivation Technologies. We design, engineer and sell environmental control and other technologies for the Controlled Environment Agriculture (CEA) industry. The CEA industry is one of the fastest-growing sectors of the United States’ economy. From leafy greens (kale, Swiss chard, mustard, cress), microgreens (leafy greens harvested at the first true leaf stage), ethnic vegetables and small fruits (such as strawberries, blackberries and raspberries) to bell peppers, cucumbers, tomatoes, and cannabis, some producers grow crops indoors in response to market dynamics or as part of their preferred farming practice. In service of the CEA industry, our principal technologies include: (i) liquid-based process cooling systems and other climate control systems, (ii) air handling equipment and systems, (iii) a full-service engineering package for designing and engineering commercial scale thermodynamic systems specific to cultivation facilities, and (iv) automation and control devices, systems and technologies used for environmental, lighting and climate control. Our customers include commercial, state- and provincial-regulated CEA growers in the U.S. and Canada as well as other international locations. Customers are those growers building new facilities and those expanding or retrofitting existing facilities. Currently, our revenue stream is derived primarily from supplying our products, services and technologies to commercial indoor facilities ranging from several thousand to more than 100,000 square feet. Headquartered in Boulder, Colorado, we leverage our experience in this space to bring value-added climate control solutions to our customers that help improve their overall crop quality and yield, optimize energy and water efficiency, and satisfy the evolving state and local codes, permitting and regulatory requirements. Although our customers do, we neither produce nor sell cannabis or its related products. Impact of the COVID-19 Pandemic on Our Business The impact of the government and the business economic response to the COVID-19 pandemic has affected demand across the majority of our markets and disrupted work on projects. The COVID-19 pandemic is expected to have continued adverse effects on our sales, project implementation, operating margins, and working capital. As of the date of this filing, uncertainty continues to exist concerning the magnitude and duration of the economic impact of the COVID-19 pandemic. In response to the COVID-19 pandemic and the government and business response, during 2020, the Company took measures to adjust its operations. These actions included initial measures to cut costs and preserve cash, and encompassed downsizing workforce, compensation reductions, and reduced hours worked that were later changed upwards and in some cases fully restored late in 2020, as the Company gained new contracts, bank funding was available and the overall business climate improved. The Company continues to actively monitor its operations and sales efforts in light of the continuing effects of the COVID-19 pandemic and will make adjustments to its operations as necessary. Due to the speed with which the COVID-19 pandemic developed and the resulting uncertainties, including the depth and duration of the disruptions to customers and suppliers, its future effect on our business, on our results of operations, and on our financial condition, we cannot predict the overall effect on our business over the longer term. Addressing this uncertainty, we have undertaken various plans to reduce costs so as to mitigate the impact of the COVID-19 pandemic to the best of our ability, although they may not be sufficient in the long-run for us to avoid reduced sales, increased losses and reduced operating cash flows. Refer to Risk Factors Financial Statement Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021. The balance sheet as of December 31, 2020 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto contained in the Annual Report on Form 10-K for the year ended December 31, 2020. The notes to the unaudited condensed consolidated financial statements are presented on a going concern basis. Basis of Consolidation and Reclassifications The condensed consolidated financial statements include the accounts of the Company and its controlled and wholly owned subsidiary, Hydro Innovations, LLC (“Hydro”). Intercompany transactions, profit, and balances are eliminated in consolidation. Going Concern The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has experienced recurring losses since its inception. Since inception, the Company has financed its activities principally through debt and equity financing, customer deposits and revenues from completed contracts. Management expects to incur additional losses and cash outflows in the foreseeable future in connection with its operating activities. Management believes that the economic dislocations in the overall economy, in the near term, will impact our revenues, losses and cash flows. There can be no assurance that the Company will be able to raise debt or equity financing in sufficient amounts, when and if needed, on acceptable terms or at all. If results of operations for 2021 do not meet management’s expectations, or additional capital is not available, management believes it has the ability to reduce certain expenditures. The precise amount and timing of the funding needs cannot be determined accurately at this time, and will depend on a number of factors, including the overall economy, market demand for the Company’s products and services, the quality of product development efforts, management of working capital, and continuation of normal payment terms and conditions for purchase of the Company’s products. The Company believes its cash balances and cash flow from operations will be insufficient to fund its operations for the next 12 months. If the Company is unable to substantially increase revenues, reduce expenditures, or otherwise generate cash flows from operations, then the Company will need to raise additional funding to continue as a going concern. The foregoing factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date the financial statements are issued. These condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. Use of Estimates Management makes estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and that affect the reported amounts of revenue and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Key estimates include: allocation of transaction prices to performance obligations under contracts with customers, standalone selling prices, timing of expected revenue recognition on remaining performance obligations under contracts with customers, valuation of intangible assets, valuation of equity-based compensation, valuation of deferred tax assets and liabilities, warranty accruals, accounts receivable and inventory allowances, and legal contingencies. Cash, Cash Equivalents and Restricted Cash All highly liquid investments with original maturities of three months or less at the date of purchase are considered to be cash equivalents. The Company may, from time to time, have deposits in financial institutions that exceed the federally insured amount. The Company has not experienced any losses to date on depository accounts. During the three months ended March 31, 2021, the Company transferred a balance of $180,000 into a new bank account which was to be used for the sole purpose of paying certain warranty claims. The balance on this restricted bank account as of March 31, 2021 was $86,697. Income (Loss) Per Common Share Basic income (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration of common stock equivalents. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding and potentially dilutive common stock equivalents, including stock options, warrants and restricted stock units and other equity-based awards, except in cases where the effect of the common stock equivalents would be antidilutive. Potential common stock equivalents consist of common stock issuable upon exercise of stock options and warrants and the vesting of restricted stock units using the treasury method. During the three months ended March 31, 2021 and 2020, there were warrants and options outstanding to purchase Company common stock and restricted stock units that were convertible into shares of the Company’s common stock. During the three-month periods ended March 31, 2021 and 2020, the Company incurred a net loss and consequently the common share equivalents of these potentially dilutive equity instruments have not been included in the calculations of loss per share because such inclusion would have been anti-dilutive. As of March 31, 2021, and 2020, there were respectively, 30,249,300 and 45,748,400, potentially dilutive equity instruments outstanding in respect of warrants and options outstanding to purchase Company common stock and restricted stock units that were convertible into shares of the Company’s common stock. Goodwill The Company recorded goodwill in connection with its acquisition of Hydro Innovations, LLC in July 2014. Goodwill is reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value of the reporting unit has been reduced to less than its carrying value. The Company performs a quantitative impairment test annually on December 31 by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is considered not impaired. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company determined that it has one reporting unit. During the three months ended March 31, 2021, the Company concluded that the projected impact of the COVID-19 pandemic on its sales, contract completion and revenues in the near term, together with the volatility in its share price during the quarter represented potential indicators of impairment. Accordingly, the Company performed an interim impairment analysis at March 31, 2021, and concluded that no impairment relating to goodwill existed at March 31, 2021. Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 (Topic 606), Revenue from Contracts with Customers Under the revenue standard, a performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. Most of the Company’s contracts contain multiple performance obligations that include engineering and technical services as well as the delivery of a diverse range of climate control system equipment and components, which can span multiple phases of a customer’s project life-cycle from facility design and construction to equipment delivery and system installation and start-up. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When there are multiple performance obligations within a contract, the Company allocates the transaction price to each performance obligation based on standalone selling price. When estimating the selling price, the Company uses various observable inputs. The best observable input is the Company’s actual selling price for the same good or service, however, this input is generally not available for the Company’s contracts containing multiple performance obligations. For engineering services, the Company estimates the standalone selling price by reference to certain physical characteristics of the project, such as facility size and mechanical systems involved, which are indicative of the scope and complexity of the mechanical engineering services to be provided. For equipment sales, the standalone selling price is determined by forecasting the expected costs of the equipment and then adding an appropriate margin, based on a range of acceptable margins established by management. Depending on the nature of the performance obligations, the Company may use a combination of different methods and observable inputs if certain performance obligations have highly variable or uncertain standalone selling prices. Once the selling prices are determined, the Company applies the relative values to the total contract consideration and estimates the amount of the transaction price to be recognized as each performance obligation is fulfilled. The Company recognizes revenue for the sale of goods when control transfers to the customer, which primarily occurs at the time of shipment. The Company’s historical rates of return are insignificant as a percentage of sales and, as a result, the Company does not record a reserve for returns at the time the Company recognizes revenue. The Company has elected to exclude from the measurement of the transaction price all taxes (e.g., sales, use, value added, and certain excise taxes) that are assessed by a governmental authority in connection with a specific revenue-producing transaction and collected by the Company from the customer. Accordingly, the Company recognizes revenue net of sales taxes. The revenue and cost for freight and shipping is recorded when control over the sale of goods passes to the Company’s customers. The Company also has performance obligations to perform certain engineering services that are satisfied over a period of time. Revenue is recognized from this type of performance obligation as services are rendered based on the percentage completion towards certain specified milestones. The Company offers assurance-type warranties for its products and products manufactured by others to meet specifications defined by the contracts with customers and does not have any material separate performance obligations related to these warranties. The Company maintains a warranty reserve based on historical warranty costs. Applying the practical expedient in ASC 606-10-32-18, which the Company has elected, the Company does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Accordingly, the remaining performance obligations related to customer contracts does not consider the effects of the time value of money. Applying the practical expedient in ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred since the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs include certain sales commissions and incentives, which are included in selling, general and administrative expenses, and are payable only when associated revenue has been collected and earned by the Company. The Company does not have material amounts of contract assets since revenue is recognized as control of goods is transferred or as services are performed. Contract liabilities consist of advance payments and deferred revenue. For the three months ended March 31, 2021, the Company recognized revenue of $1,880,364 related to the deferred revenue at January 1, 2021. For the three months ended March 31, 2020, the Company recognized revenue of $859,705 related to the deferred revenue at January 1, 2020. Remaining performance obligations, or backlog, represents the aggregate amount of the transaction price allocated to the remaining obligations that the Company has not performed under its customer contracts. The Company has elected not to use the optional exemption in ASC 606-10-50-14, which exempts an entity from such disclosures if a performance obligation is part of a contract with an original expected duration of one year or less. Accordingly, the information disclosed about remaining performance obligations includes all customer contracts, including those with an expected duration of one year or less. Industry uncertainty, project financing concerns, and the licensing and qualification of our prospective customers, which are out of the Company’s control, make it difficult for the Company to predict when it will recognize revenue on its remaining performance obligations. There are risks that the Company may not realize the full contract value on customer projects in a timely manner or at all, and completion of a customer’s cultivation facility project is dependent upon the customer’s ability to secure funding and real estate, obtain a license and then build their cultivation facility so they can take possession of the equipment. Accordingly, the time it takes for customers to complete a project, which corresponds to when the Company is able to recognize revenue, is driven by numerous factors including: (i) the large number of first-time participants interested in the indoor cannabis cultivation business; (ii) the complexities and uncertainties involved in obtaining state and local licensure and permitting; (iii) local and state government delays in approving licenses and permits due to lack of staff or the large number of pending applications, especially in states where there is no cap on the number of cultivators; (iv) the customer’s need to obtain cultivation facility financing; (v) the time needed, and coordination required, for our customers to acquire real estate and properly design and build the facility (to the stage when climate control systems can be installed); (vi) the large price tag and technical complexities of the climate control and air sanitation system; (vii) the availability of power; and (viii) delays that are typical in completing any construction project. As of March 31, 2021, the Company’s remaining performance obligations, or backlog, was $11,578,000, of which $2,006,000, or 17%, was attributable to customer contracts for which the Company has only received an initial advance payment to cover the allocated value of the Company’s engineering services (“engineering only paid contracts”). There is the risk that the equipment portion of these engineering only paid contracts will not be completed or will be delayed. These reasons include the customer being dissatisfied with the quality or timeliness of the Company’s engineering services, delay or abandonment of the project because of the customer’s inability to obtain project financing or licensing, or other reasons such as a challenging business climate including an overall post-Covid-19 economic downturn, or change in business direction. After the customer has made an advance payment for a portion of the equipment to be delivered under the contract (“partial equipment paid contracts”), the Company is typically better able to estimate the timing of revenue recognition since the risks and delays associated with licensing, permitting and project funding are typically mitigated once the initial equipment payment is received. There is significant uncertainty regarding the timing of the Company’s recognition of revenue on its remaining performance obligations, and there is no certainty that these will result in actual revenues. The backlog at March 31, 2021, includes booked sales orders of $449,000 from several customers that the Company does not expect to be realized until 2022, if at all. Given the present economic uncertainty arising from the impact of the novel coronavirus COVID-19, the Company believes that several of its current contracts may be delayed or cancelled in the short term. The remaining performance obligations expected to be recognized through 2022 are as follows: 2021 2022 Total Remaining performance obligations related to engineering only paid contracts $ 1,563,000 $ 443,000 $ 2,006,000 Remaining performance obligations related to partial equipment paid contracts 9,566,000 6,000 $ 9,572,000 Total remaining performance obligations $ 11,129,000 $ 449,000 $ 11,578,000 The following table sets forth the Company’s revenue by source: For the Three Months 2021 2020 Equipment and systems sales $ 2,163,468 $ 1,606,946 Engineering and other services 181,083 131,591 Shipping and handling 21,978 71,388 Total revenue $ 2,366,529 $ 1,809,925 Accounting for Share-Based Compensation The Company recognizes the cost resulting from all share-based compensation arrangements, including stock options, restricted stock awards and restricted stock units that the Company grants under its equity incentive plan in its condensed consolidated financial statements based on their grant date fair value. The expense is recognized over the requisite service period or performance period of the award. Awards with a graded vesting period based on service are expensed on a straight-line basis for the entire award. Awards with performance-based vesting conditions, which require the achievement of a specific company financial performance goal at the end of the performance period and required service period, are recognized over the performance period. Each reporting period, the Company reassesses the probability of achieving the respective performance goal. If the goals are not expected to be met, no compensation cost is recognized and any previously recognized amount recorded is reversed. If the award contains market-based vesting conditions, the compensation cost is based on the grant date fair value and expected achievement of market condition and is not subsequently reversed if it is later determined that the condition is not likely to be met or is expected to be lower than initially expected. The grant date fair value of stock options is based on the Black-Scholes Option Pricing Model (the “Black-Scholes Model”). The Black-Scholes Model requires judgmental assumptions including volatility and expected term, both based on historical experience. The risk-free interest rate is based on U.S. Treasury interest rates whose term is consistent with the expected term of the option. The Company determines the assumptions used in the valuation of option awards as of the date of grant. Differences in the expected stock price volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at those grant dates. As such, the Company may use different assumptions for options granted throughout the year. During the three months ended March 31, 2021, the valuation assumptions used to determine the fair value of each option award on the date of grant were: expected stock price volatility of 152.51%; expected term in years 10 and risk-free interest rate of 1.2%. The grant date fair value of restricted stock and restricted stock units is based on the closing price of the underlying stock on the date of the grant. The Company has elected to reduce share-based compensation expense for forfeitures as the forfeitures occur since the Company does not have historical data or other factors to appropriately estimate the expected employee terminations and to evaluate whether particular groups of employees have significantly different forfeiture expectations. The following is a summary of share-based compensation expenses included in the condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020: For the Three Months 2021 2020 Share-based compensation expense included in: Cost of revenue $ 14,135 $ 8,558 Advertising and marketing expenses 6,474 2,912 Product development costs 6,694 6,545 Selling, general and administrative expenses 31,833 172,874 Total share-based compensation expense included in consolidated statement of operations $ 59,136 $ 190,889 Included in the $59,136 expense for the three months ended March 31, 2021, is an accrual for $52,794 in respect of the 2021 Annual Employee Incentive Compensation Plan. Included in the $190,889 expense for the three months ended March 31, 2020, is an accrual for $36,463 in respect of the 2020 Annual Employee Incentive Compensation Plan. Concentrations Three customers accounted for 38%, 16%, and 11% of the Company’s revenue for the three months March 31, 2021. For the three months ended March 31, 2020, four customers accounted for 17%, 16%, 10% and 10% of the Company’s revenue. Two customers accounted for 60%, and 31% of the Company’s accounts receivable for the three months ended March 31, 2021. For the three months ended March 31, 2020, three customers accounted for 59%, 18%, and 15% of the Company’s accounts receivable. Recently Issued Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) In March 2020, the FAS issued ASU No. 2020-04 “ Reference Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). In January 2020, the FASB issued ASU No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes, Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | Note 2 – Leases In February 2016 the FASB issued ASU 2016-02, Leases (Topic 842) The new standard provides a number of optional practical expedients in transition. The Company has elected to apply the “package of practical expedients” which allow the Company to not reassess: (i) whether existing or expired arrangements contain a lease, (ii) the lease classification of existing or expired leases, or (iii) whether previous initial direct costs would qualify for capitalization under the new lease standard. The Company has also elected to apply the short-term lease exemption for all leases with an original term of less than 12 months, for purposes of applying the recognition and measurements requirements in the new lease standard. Upon adoption, the Company recognized its lease for manufacturing and office space (the “Facility Lease”) on the balance sheet as an operating lease right-of-use asset in the amount of $714,416 and as a lease liability of $822,374. The Facility Lease commenced September 29, 2017 and continues through August 31, 2022. The Company has the option to renew the Facility Lease for an additional five years. However, the renewal option to extend the Facility Lease is not included in the right-of-use asset or lease liability as the option is not reasonably certain of exercise. The Company regularly evaluates the renewal option and when it is reasonably certain of exercise, the Company will include the renewal period in its lease term. Beginning September 1, 2018, and each subsequent September 1 during the term, the monthly rent under the Facility Lease will increase by 3%. Total rent under the current building lease is charged to expense over the term of the lease on a straight-line basis, resulting in the same monthly rent expense throughout the lease. The difference between the rent expense amount and the actual rent paid is recorded to operating lease liability on the Company’s condensed consolidated balance sheets. Under the Facility Lease, the landlord agreed to pay the Company or the Company’s contractors for tenant improvements made by the Company not to exceed $100,000, which were used for normal tenant improvements. The Company determined that these improvements were not specialized and could be utilized by a subsequent tenant and, as such, the improvements were considered assets of the lessor. As of January 1, 2019, the unamortized amount of tenant improvement allowance of $81,481 was treated as a reduction in measuring the right-of-use asset. Under the Facility Lease, the Company pays the actual amounts for property taxes and insurance, excludes such payments from lease contract consideration, and records such payments as incurred. The Company also pays the landlord for common area maintenance, which is considered a nonlease component. For the Facility Lease, the Company has not elected the accounting policy to include both the lease and nonlease components as a single component and account for it as the lease. In determining the right-of-use asset and lease liability, the Company applied a discount rate to the minimum lease payments under the Facility Lease. ASC 842 requires the Company to use the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Since the discount rate is not implicit in the lease agreement, we utilized an estimated incremental borrowing rate provided by the Company’s depository bank. The lease cost, cash flows and other information related to the Facility Lease were as follows: For the Three Months Ended March 31, 2021 Operating lease cost $ 54,222 Operating cash outflow from operating lease $ 69,844 As of March 31, 2021 Operating lease right-of-use assset $ 294,900 Operating lease liability, current $ 263,662 Operating lease liability, long-term $ 106,891 Remaining lease term 1.4 years Discount rate 5.00 % Future annual minimum lease payments on the Facility Lease as of March 31, 2021 were as follows: Years ended December 31, 2021 (excluding the three months ended March 31, 2021) 212,020 2022 170,891 Total minimum lease payments 382,911 Less imputed interest (12,358 ) Present value of minimum lease payments $ 370,553 |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 3 – Inventory Inventory consisted of the following: March 31, December 31, 2021 2020 Finished goods $ 325,451 $ 201,778 Work in progress 10,083 4,231 Raw materials 272,299 214,145 Allowance for excess & obsolete inventory (88,674 ) (93,045 ) Inventory, net $ 519,159 $ 327,109 Overhead expenses of $17,443 and $17,974 were included in the inventory balance as of March 31, 2021, and December 31, 2020, respectively. Advance payments on inventory purchases are recorded in prepaid expenses until title for such inventory passes to the Company. Prepaid expenses included $1,960,000 and $916,000 in advance payments for inventory for the periods ended March 31, 2021, and December 31, 2020, respectively. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 4 – Property and Equipment Property and equipment consisted of the following: March 31, December 31, 2021 2020 Furniture and equipment $ 410,748 $ 398,422 Vehicles 15,000 15,000 Leasehold improvements 215,193 215,193 640,941 628,615 Accumulated depreciation (499,116 ) (480,883 ) Property and equipment, net $ 141,825 $ 147,732 Depreciation expense was $18,233 for the three months ended March 31, 2021. For the three months ended March 31, 2021, $1,249 was allocated to cost of sales and $312 was allocated to inventory with the remainder recorded as selling, general and administrative expense. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | Note 5 – Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following: March 31, December 31, 2021 2020 Accounts payable $ 860,087 $ 918,639 Sales commissions payable 13,649 48,263 Accrued payroll liabilities 275,024 288,071 Product warranty accrual 264,956 173,365 Other accrued expenses 376,599 356,623 Total $ 1,790,315 $ 1,784,961 |
Note Payable and Accrued Intere
Note Payable and Accrued Interest | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Note Payable and Accrued Interest | Note 6 – Note Payable and Accrued Interest On February 10, 2021, the Company entered into a note payable with its current bank in the principal amount of $514,200, for working capital purposes. The loan amount bears interest at 1% and is due on February 5, 2026. The loan may be repaid in advance without penalty. The loan is also potentially forgivable in full provided proceeds are used for payment of payroll expenses, rent, utilities and mortgage interest and certain other terms and conditions are met. The loan has typical default provisions, including for change of ownership, general lender insecurity as to repayment, non-payment of amounts due, defaults on other debt instruments, insolvency, dissolution or termination of the business as a going concern and bankruptcy. During the three ended March 31, 2021, interest of $718 was accrued in respect of this note payable. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7 – Commitments and Contingencies Litigation As of December 31, 2019, there were 6,750,000 restricted stock units that had not been settled due to a dispute with a former employee over the required withholding taxes to be paid to the Company for remittance to the appropriate tax authorities. The Company commenced an arbitration action against the former employee regarding the dispute. The former employee also made claims in the arbitration action against the Company for unpaid wages. As stated in a pleading in the arbitration, on March 9, 2020, the Company issued the former employee 6,750,000 shares of the Company’s common stock in settlement of these restricted stock units after taking measures to mitigate the Company’s exposure to penalties and liability for the failure to properly withhold income taxes. The Arbitrator issued an interim award of approximately $10,000 in the Company’s favor and a finding against the former employee. Effective June 9, 2020, the Arbitrator issued his final award in the Company’s favor in the Colorado arbitration. The Arbitrator found against the former employee and awarded the Company costs of $33,985, with interest at 8% per year. Effective July 22, 2020, the Colorado Court confirmed the Arbitration award and entered a final judgement in favor of the Company and against the former employee. The Company pursued collection of this debt and has now collected the debt owed. This former employee continued to pursue separate litigation against the Company for recovery of alleged consulting fees owed to him for the 2015 calendar year prior to his appointment as an executive officer of the Company. Effective March 30, 2021, this separate litigation has now been settled. While the Company disputed the merits of the claims, the Company has agreed and will be obliged to pay $40,000 over eight months and to issue upon execution of the settlement agreement an aggregate of 1,000,000 shares of common stock of the Company. As further discussed in Note 11 Subsequent Events From time to time, in the normal course of its operations, the Company is subject to litigation matters and claims. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict, and the Company’s view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a liability for contingent losses when it is both probable that a liability has been incurred and the amount of the loss is known. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company’s operations or its financial position, liquidity or results of operations. Leases The Company has a lease agreement for its manufacturing and office space. Refer to Note 2 Leases Other Commitments In the ordinary course of business, the Company enters into commitments to purchase inventory and may also provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers and employees that will require the Company to, among other things, indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. The Company maintains director and officer insurance, which may cover certain liabilities arising from its obligation to indemnify its directors and certain of its officers and employees, and former officers, directors, and employees of acquired companies, in certain circumstances. |
Equity Incentive Plan
Equity Incentive Plan | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Equity Incentive Plan | Note 8 – Equity Incentive Plan 2017 Equity Incentive Plan Under the Company’s 2017 Equity Incentive Plan, as may be modified and amended by the Company from time to time (the “2017 Equity Plan”), the Board of Directors (the “Board”) (or the compensation committee of the Board, if one is established) may award stock options, stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock unit awards (“RSUs”), shares granted as a bonus or in lieu of another award, and other stock-based performance awards. The 2017 Equity Plan allocates 50,000,000 shares of the Company’s common stock (“Plan Shares”) for issuance of equity awards under the 2017 Equity Plan. If any shares subject to an award are forfeited, expire, or otherwise terminate without issuance of such shares, the shares will, to the extent of such forfeiture, expiration, or termination, again be available for awards under the 2017 Equity Plan. During the three months ended March 31, 2021, the Company issued no shares of its common stock under the 2017 Equity Plan. As of March 31, 2021, awards related to 22,686,800 shares remain outstanding. There was no unrecognized compensation expense for unvested non-qualified stock options and RSUs at March 31, 2021. 2021 Equity Incentive Plan On March 22, 2021, the Board approved the 2021 Equity Incentive Plan (the “2021 Plan”), which permits the Board to grant awards of up to 100,000,000 shares of common stock, subject to and effective upon stockholder approval. The 2021 Plan provides for the grant of incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), non-qualified stock options, stock appreciation rights (“SARs”), restricted stock awards and restricted stock unit awards and other equity linked awards.to our employees, consultants and directors. If an equity award (i) expires or otherwise terminates without having been exercised in full or (ii) is settled in cash ( i.e. Approval of the 2021 Plan will be considered by stockholders at the Annual General Meeting of Stockholders to be held on May 28, 2021. If the 2021 Plan is not approved, it may be continued as an equity plan by the Board, but it will not be able to provide for tax qualified incentive options or satisfy exchange requirements. If not approved by the stockholders, the current intention of the Board is to continue the 2021 Plan and issue awards as appropriate thereunder. Non-Qualified Stock Options A summary of the non-qualified stock options granted to employees and consultants under the 2017 Equity Plan during the three months ended March 31, 2021, are presented in the table below: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding, December 31, 2020 14,251,000 $ 0.083 8.3 $ - Granted 1,035,800 $ 0.130 10.0 $ - Exercised - Forfeited - Expired - Outstanding, March 31, 2021 15,286,800 $ 0.084 8.2 $ - Exercisable, March 31, 2021 15,286,800 $ 0.084 8.2 $ - A summary of non-vested non-qualified stock options activity for employees and consultants under the 2017 Equity Plan for the three months ended March 31, 2021, are presented in the table below: Number of Options Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Grant-Date Fair Value Nonvested, December 31, 2020 - $ - $ - $ - Granted 1,035,800 $ 0.124 $ - $ 128,543 Vested (1,035,800 ) $ 0.124 $ - $ 128,543 Forfeited - $ - Expired - $ - Nonvested, March 31, 2021 - $ - $ - $ - For the three months ended March 31, 2021 and March 31, 2020, the Company recorded $0 and $106,288 as compensation expense related to vested options issued to employees and consultants, net of forfeitures, respectively. A summary of the non-qualified stock options granted to directors under the 2017 Equity Plan during the three months ended March 31, 2021, are presented in the table below: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ($000) Outstanding, December 31, 2020 7,400,000 $ 0.067 7.5 $ 2,780 Granted - Exercised - Forfeited/Cancelled - Expired - Outstanding, March 31, 2021 7,400,000 $ 0.067 7.2 $ 2,780 Exerciseable, March 31, 2021 6,400,000 $ 0.073 7.7 $ - A summary of non-vested non-qualified stock options activity for directors under the 2017 Equity Plan for the three months ended March 31, 2021, are presented in the table below: Number of Options Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Grant-Date Fair Value Nonvested, December 31, 2020 1,000,000 0.029 $ 29,000 $ 38,200 Granted - Vested - Forfeited - Expired - Nonvested, March 31, 2021 1,000,000 0.029 $ 29,000 $ 38,200 During the three months ended March 31, 2021 and 2020, the Company incurred $6,342 and $29,266, respectively, as compensation expense related to 500,000 and 500,000 vested options, respectively, issued to directors. Effective June 24, 2020 , As further discussed in Note 11 Subsequent Events Restricted Stock Units A summary of the RSUs awarded to employees, directors and consultants under the 2017 Equity Plan during the three months ended March 31, 2021, are presented in the table below: Number of Units Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Outstanding, December 31, 2020 - $ - Granted - Vested and settled with share issuance - Forfeited/canceled - Outstanding, March 31, 2021 - $ - For the three months ended March 31, 2021 and 2020, the Company recorded $0 and $18,872, respectively, as compensation expense related to vested RSUs issued to employees, directors and consultants. Effective April 30, 2020, 800,000 RSUs vested. However, the holder elected to cancel the RSUs. |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2021 | |
Warrants | |
Warrants | Note 9 – Warrants The following table summarizes information with respect to outstanding warrants to purchase common stock during the three months ended March 31, 2021: Weighted Weighted Average Number Average Exercise Remaining Life Aggregate Intrincic Outstanding Price In Months Value Outstanding at December 31, 2020 7,562,500 $ 0.25 6 $ 0 Issued - - - - Exercised - - - - Expired 0 $ 0.00 - $ 0 Outstanding at March 31, 2021 7,562,500 $ 0.25 6 $ 0 The following table summarizes information about warrants outstanding at March 31, 2021: Weighted Average Warrants Outstanding Warrants Exercise price Outstanding In Months 0.25 7,562,500 3 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 10 – Income Taxes As of March 31, 2021, the Company has U.S. federal and state net operating losses (“NOLs”) of approximately $20,115,000, of which $11,196,261 will expire, if not utilized, in the years 2034 through 2037, however, NOLs generated subsequent to December 31, 2017 do not expire but may only be used against taxable income to 80%. In response to the novel coronavirus COVID-19, the Coronavirus Aid, Relief, and Economic Security Act temporarily repealed the 80% limitation for NOLs arising in 2018, 2019 and 2020. Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, use of the Company’s NOLs carryforwards may be limited in the event of cumulative changes in ownership of more than 50% within a three-year period. The Company must assess the likelihood that its net deferred tax assets will be recovered from future taxable income, and to the extent the Company believes that recovery is not likely, the Company establishes a valuation allowance. Management’s judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against the net deferred tax assets. The Company recorded a full valuation allowance as of March 31, 2021 and December 31, 2020. Based on the available evidence, the Company believes it is more likely than not that it will not be able to utilize its net deferred tax assets in the foreseeable future. The Company intends to maintain valuation allowances until sufficient evidence exists to support the reversal of such valuation allowances. The Company makes estimates and judgments about its future taxable income that are based on assumptions that are consistent with the Company’s plans. Should the actual amounts differ from the Company’s estimates, the carrying value of the Company’s deferred tax assets could be materially impacted. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11 – Subsequent Events In accordance with ASC 855, Subsequent Events As further discussed in Note 8 Equity Incentive Plan As further discussed in Note 7 Commitments and Contingencies On April 30, 2021, the Company entered into an agreement to sublease approximately 6,900 square feet of its office and manufacturing space. The sublease commenced on April 30, 2021 and will continue on a month-to-month basis until either party gives 30-days’ notice. Rent will initially be charged at $5,989 per month, increasing to $11,978 per month effective July 1, 2021. The Sublessor will also be responsible for its prorated share of utilities and other related costs. |
General (Policies)
General (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Surna Inc. (the “Company”) was incorporated in Nevada on October 15, 2009 and operates under a trade name of Surna Cultivation Technologies. We design, engineer and sell environmental control and other technologies for the Controlled Environment Agriculture (CEA) industry. The CEA industry is one of the fastest-growing sectors of the United States’ economy. From leafy greens (kale, Swiss chard, mustard, cress), microgreens (leafy greens harvested at the first true leaf stage), ethnic vegetables and small fruits (such as strawberries, blackberries and raspberries) to bell peppers, cucumbers, tomatoes, and cannabis, some producers grow crops indoors in response to market dynamics or as part of their preferred farming practice. In service of the CEA industry, our principal technologies include: (i) liquid-based process cooling systems and other climate control systems, (ii) air handling equipment and systems, (iii) a full-service engineering package for designing and engineering commercial scale thermodynamic systems specific to cultivation facilities, and (iv) automation and control devices, systems and technologies used for environmental, lighting and climate control. Our customers include commercial, state- and provincial-regulated CEA growers in the U.S. and Canada as well as other international locations. Customers are those growers building new facilities and those expanding or retrofitting existing facilities. Currently, our revenue stream is derived primarily from supplying our products, services and technologies to commercial indoor facilities ranging from several thousand to more than 100,000 square feet. Headquartered in Boulder, Colorado, we leverage our experience in this space to bring value-added climate control solutions to our customers that help improve their overall crop quality and yield, optimize energy and water efficiency, and satisfy the evolving state and local codes, permitting and regulatory requirements. Although our customers do, we neither produce nor sell cannabis or its related products. |
Impact of the COVID-19 Pandemic on Our Business | Impact of the COVID-19 Pandemic on Our Business The impact of the government and the business economic response to the COVID-19 pandemic has affected demand across the majority of our markets and disrupted work on projects. The COVID-19 pandemic is expected to have continued adverse effects on our sales, project implementation, operating margins, and working capital. As of the date of this filing, uncertainty continues to exist concerning the magnitude and duration of the economic impact of the COVID-19 pandemic. In response to the COVID-19 pandemic and the government and business response, during 2020, the Company took measures to adjust its operations. These actions included initial measures to cut costs and preserve cash, and encompassed downsizing workforce, compensation reductions, and reduced hours worked that were later changed upwards and in some cases fully restored late in 2020, as the Company gained new contracts, bank funding was available and the overall business climate improved. The Company continues to actively monitor its operations and sales efforts in light of the continuing effects of the COVID-19 pandemic and will make adjustments to its operations as necessary. Due to the speed with which the COVID-19 pandemic developed and the resulting uncertainties, including the depth and duration of the disruptions to customers and suppliers, its future effect on our business, on our results of operations, and on our financial condition, we cannot predict the overall effect on our business over the longer term. Addressing this uncertainty, we have undertaken various plans to reduce costs so as to mitigate the impact of the COVID-19 pandemic to the best of our ability, although they may not be sufficient in the long-run for us to avoid reduced sales, increased losses and reduced operating cash flows. Refer to Risk Factors |
Financial Statement Presentation | Financial Statement Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021. The balance sheet as of December 31, 2020 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto contained in the Annual Report on Form 10-K for the year ended December 31, 2020. The notes to the unaudited condensed consolidated financial statements are presented on a going concern basis. |
Basis of Consolidation and Reclassifications | Basis of Consolidation and Reclassifications The condensed consolidated financial statements include the accounts of the Company and its controlled and wholly owned subsidiary, Hydro Innovations, LLC (“Hydro”). Intercompany transactions, profit, and balances are eliminated in consolidation. |
Going Concern | Going Concern The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has experienced recurring losses since its inception. Since inception, the Company has financed its activities principally through debt and equity financing, customer deposits and revenues from completed contracts. Management expects to incur additional losses and cash outflows in the foreseeable future in connection with its operating activities. Management believes that the economic dislocations in the overall economy, in the near term, will impact our revenues, losses and cash flows. There can be no assurance that the Company will be able to raise debt or equity financing in sufficient amounts, when and if needed, on acceptable terms or at all. If results of operations for 2021 do not meet management’s expectations, or additional capital is not available, management believes it has the ability to reduce certain expenditures. The precise amount and timing of the funding needs cannot be determined accurately at this time, and will depend on a number of factors, including the overall economy, market demand for the Company’s products and services, the quality of product development efforts, management of working capital, and continuation of normal payment terms and conditions for purchase of the Company’s products. The Company believes its cash balances and cash flow from operations will be insufficient to fund its operations for the next 12 months. If the Company is unable to substantially increase revenues, reduce expenditures, or otherwise generate cash flows from operations, then the Company will need to raise additional funding to continue as a going concern. The foregoing factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date the financial statements are issued. These condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. |
Use of Estimates | Use of Estimates Management makes estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and that affect the reported amounts of revenue and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Key estimates include: allocation of transaction prices to performance obligations under contracts with customers, standalone selling prices, timing of expected revenue recognition on remaining performance obligations under contracts with customers, valuation of intangible assets, valuation of equity-based compensation, valuation of deferred tax assets and liabilities, warranty accruals, accounts receivable and inventory allowances, and legal contingencies. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash All highly liquid investments with original maturities of three months or less at the date of purchase are considered to be cash equivalents. The Company may, from time to time, have deposits in financial institutions that exceed the federally insured amount. The Company has not experienced any losses to date on depository accounts. During the three months ended March 31, 2021, the Company transferred a balance of $180,000 into a new bank account which was to be used for the sole purpose of paying certain warranty claims. The balance on this restricted bank account as of March 31, 2021 was $86,697. |
Income (Loss) Per Common Share | Income (Loss) Per Common Share Basic income (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration of common stock equivalents. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding and potentially dilutive common stock equivalents, including stock options, warrants and restricted stock units and other equity-based awards, except in cases where the effect of the common stock equivalents would be antidilutive. Potential common stock equivalents consist of common stock issuable upon exercise of stock options and warrants and the vesting of restricted stock units using the treasury method. During the three months ended March 31, 2021 and 2020, there were warrants and options outstanding to purchase Company common stock and restricted stock units that were convertible into shares of the Company’s common stock. During the three-month periods ended March 31, 2021 and 2020, the Company incurred a net loss and consequently the common share equivalents of these potentially dilutive equity instruments have not been included in the calculations of loss per share because such inclusion would have been anti-dilutive. As of March 31, 2021, and 2020, there were respectively, 30,249,300 and 45,748,400, potentially dilutive equity instruments outstanding in respect of warrants and options outstanding to purchase Company common stock and restricted stock units that were convertible into shares of the Company’s common stock. |
Goodwill | Goodwill The Company recorded goodwill in connection with its acquisition of Hydro Innovations, LLC in July 2014. Goodwill is reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value of the reporting unit has been reduced to less than its carrying value. The Company performs a quantitative impairment test annually on December 31 by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is considered not impaired. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company determined that it has one reporting unit. During the three months ended March 31, 2021, the Company concluded that the projected impact of the COVID-19 pandemic on its sales, contract completion and revenues in the near term, together with the volatility in its share price during the quarter represented potential indicators of impairment. Accordingly, the Company performed an interim impairment analysis at March 31, 2021, and concluded that no impairment relating to goodwill existed at March 31, 2021. |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 (Topic 606), Revenue from Contracts with Customers Under the revenue standard, a performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. Most of the Company’s contracts contain multiple performance obligations that include engineering and technical services as well as the delivery of a diverse range of climate control system equipment and components, which can span multiple phases of a customer’s project life-cycle from facility design and construction to equipment delivery and system installation and start-up. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When there are multiple performance obligations within a contract, the Company allocates the transaction price to each performance obligation based on standalone selling price. When estimating the selling price, the Company uses various observable inputs. The best observable input is the Company’s actual selling price for the same good or service, however, this input is generally not available for the Company’s contracts containing multiple performance obligations. For engineering services, the Company estimates the standalone selling price by reference to certain physical characteristics of the project, such as facility size and mechanical systems involved, which are indicative of the scope and complexity of the mechanical engineering services to be provided. For equipment sales, the standalone selling price is determined by forecasting the expected costs of the equipment and then adding an appropriate margin, based on a range of acceptable margins established by management. Depending on the nature of the performance obligations, the Company may use a combination of different methods and observable inputs if certain performance obligations have highly variable or uncertain standalone selling prices. Once the selling prices are determined, the Company applies the relative values to the total contract consideration and estimates the amount of the transaction price to be recognized as each performance obligation is fulfilled. The Company recognizes revenue for the sale of goods when control transfers to the customer, which primarily occurs at the time of shipment. The Company’s historical rates of return are insignificant as a percentage of sales and, as a result, the Company does not record a reserve for returns at the time the Company recognizes revenue. The Company has elected to exclude from the measurement of the transaction price all taxes (e.g., sales, use, value added, and certain excise taxes) that are assessed by a governmental authority in connection with a specific revenue-producing transaction and collected by the Company from the customer. Accordingly, the Company recognizes revenue net of sales taxes. The revenue and cost for freight and shipping is recorded when control over the sale of goods passes to the Company’s customers. The Company also has performance obligations to perform certain engineering services that are satisfied over a period of time. Revenue is recognized from this type of performance obligation as services are rendered based on the percentage completion towards certain specified milestones. The Company offers assurance-type warranties for its products and products manufactured by others to meet specifications defined by the contracts with customers and does not have any material separate performance obligations related to these warranties. The Company maintains a warranty reserve based on historical warranty costs. Applying the practical expedient in ASC 606-10-32-18, which the Company has elected, the Company does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Accordingly, the remaining performance obligations related to customer contracts does not consider the effects of the time value of money. Applying the practical expedient in ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred since the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs include certain sales commissions and incentives, which are included in selling, general and administrative expenses, and are payable only when associated revenue has been collected and earned by the Company. The Company does not have material amounts of contract assets since revenue is recognized as control of goods is transferred or as services are performed. Contract liabilities consist of advance payments and deferred revenue. For the three months ended March 31, 2021, the Company recognized revenue of $1,880,364 related to the deferred revenue at January 1, 2021. For the three months ended March 31, 2020, the Company recognized revenue of $859,705 related to the deferred revenue at January 1, 2020. Remaining performance obligations, or backlog, represents the aggregate amount of the transaction price allocated to the remaining obligations that the Company has not performed under its customer contracts. The Company has elected not to use the optional exemption in ASC 606-10-50-14, which exempts an entity from such disclosures if a performance obligation is part of a contract with an original expected duration of one year or less. Accordingly, the information disclosed about remaining performance obligations includes all customer contracts, including those with an expected duration of one year or less. Industry uncertainty, project financing concerns, and the licensing and qualification of our prospective customers, which are out of the Company’s control, make it difficult for the Company to predict when it will recognize revenue on its remaining performance obligations. There are risks that the Company may not realize the full contract value on customer projects in a timely manner or at all, and completion of a customer’s cultivation facility project is dependent upon the customer’s ability to secure funding and real estate, obtain a license and then build their cultivation facility so they can take possession of the equipment. Accordingly, the time it takes for customers to complete a project, which corresponds to when the Company is able to recognize revenue, is driven by numerous factors including: (i) the large number of first-time participants interested in the indoor cannabis cultivation business; (ii) the complexities and uncertainties involved in obtaining state and local licensure and permitting; (iii) local and state government delays in approving licenses and permits due to lack of staff or the large number of pending applications, especially in states where there is no cap on the number of cultivators; (iv) the customer’s need to obtain cultivation facility financing; (v) the time needed, and coordination required, for our customers to acquire real estate and properly design and build the facility (to the stage when climate control systems can be installed); (vi) the large price tag and technical complexities of the climate control and air sanitation system; (vii) the availability of power; and (viii) delays that are typical in completing any construction project. As of March 31, 2021, the Company’s remaining performance obligations, or backlog, was $11,578,000, of which $2,006,000, or 17%, was attributable to customer contracts for which the Company has only received an initial advance payment to cover the allocated value of the Company’s engineering services (“engineering only paid contracts”). There is the risk that the equipment portion of these engineering only paid contracts will not be completed or will be delayed. These reasons include the customer being dissatisfied with the quality or timeliness of the Company’s engineering services, delay or abandonment of the project because of the customer’s inability to obtain project financing or licensing, or other reasons such as a challenging business climate including an overall post-Covid-19 economic downturn, or change in business direction. After the customer has made an advance payment for a portion of the equipment to be delivered under the contract (“partial equipment paid contracts”), the Company is typically better able to estimate the timing of revenue recognition since the risks and delays associated with licensing, permitting and project funding are typically mitigated once the initial equipment payment is received. There is significant uncertainty regarding the timing of the Company’s recognition of revenue on its remaining performance obligations, and there is no certainty that these will result in actual revenues. The backlog at March 31, 2021, includes booked sales orders of $449,000 from several customers that the Company does not expect to be realized until 2022, if at all. Given the present economic uncertainty arising from the impact of the novel coronavirus COVID-19, the Company believes that several of its current contracts may be delayed or cancelled in the short term. The remaining performance obligations expected to be recognized through 2022 are as follows: 2021 2022 Total Remaining performance obligations related to engineering only paid contracts $ 1,563,000 $ 443,000 $ 2,006,000 Remaining performance obligations related to partial equipment paid contracts 9,566,000 6,000 $ 9,572,000 Total remaining performance obligations $ 11,129,000 $ 449,000 $ 11,578,000 The following table sets forth the Company’s revenue by source: For the Three Months 2021 2020 Equipment and systems sales $ 2,163,468 $ 1,606,946 Engineering and other services 181,083 131,591 Shipping and handling 21,978 71,388 Total revenue $ 2,366,529 $ 1,809,925 |
Accounting for Share-Based Compensation | Accounting for Share-Based Compensation The Company recognizes the cost resulting from all share-based compensation arrangements, including stock options, restricted stock awards and restricted stock units that the Company grants under its equity incentive plan in its condensed consolidated financial statements based on their grant date fair value. The expense is recognized over the requisite service period or performance period of the award. Awards with a graded vesting period based on service are expensed on a straight-line basis for the entire award. Awards with performance-based vesting conditions, which require the achievement of a specific company financial performance goal at the end of the performance period and required service period, are recognized over the performance period. Each reporting period, the Company reassesses the probability of achieving the respective performance goal. If the goals are not expected to be met, no compensation cost is recognized and any previously recognized amount recorded is reversed. If the award contains market-based vesting conditions, the compensation cost is based on the grant date fair value and expected achievement of market condition and is not subsequently reversed if it is later determined that the condition is not likely to be met or is expected to be lower than initially expected. The grant date fair value of stock options is based on the Black-Scholes Option Pricing Model (the “Black-Scholes Model”). The Black-Scholes Model requires judgmental assumptions including volatility and expected term, both based on historical experience. The risk-free interest rate is based on U.S. Treasury interest rates whose term is consistent with the expected term of the option. The Company determines the assumptions used in the valuation of option awards as of the date of grant. Differences in the expected stock price volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at those grant dates. As such, the Company may use different assumptions for options granted throughout the year. During the three months ended March 31, 2021, the valuation assumptions used to determine the fair value of each option award on the date of grant were: expected stock price volatility of 152.51%; expected term in years 10 and risk-free interest rate of 1.2%. The grant date fair value of restricted stock and restricted stock units is based on the closing price of the underlying stock on the date of the grant. The Company has elected to reduce share-based compensation expense for forfeitures as the forfeitures occur since the Company does not have historical data or other factors to appropriately estimate the expected employee terminations and to evaluate whether particular groups of employees have significantly different forfeiture expectations. The following is a summary of share-based compensation expenses included in the condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020: For the Three Months 2021 2020 Share-based compensation expense included in: Cost of revenue $ 14,135 $ 8,558 Advertising and marketing expenses 6,474 2,912 Product development costs 6,694 6,545 Selling, general and administrative expenses 31,833 172,874 Total share-based compensation expense included in consolidated statement of operations $ 59,136 $ 190,889 Included in the $59,136 expense for the three months ended March 31, 2021, is an accrual for $52,794 in respect of the 2021 Annual Employee Incentive Compensation Plan. Included in the $190,889 expense for the three months ended March 31, 2020, is an accrual for $36,463 in respect of the 2020 Annual Employee Incentive Compensation Plan. |
Concentrations | Concentrations Three customers accounted for 38%, 16%, and 11% of the Company’s revenue for the three months March 31, 2021. For the three months ended March 31, 2020, four customers accounted for 17%, 16%, 10% and 10% of the Company’s revenue. Two customers accounted for 60%, and 31% of the Company’s accounts receivable for the three months ended March 31, 2021. For the three months ended March 31, 2020, three customers accounted for 59%, 18%, and 15% of the Company’s accounts receivable. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) In March 2020, the FAS issued ASU No. 2020-04 “ Reference Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). In January 2020, the FASB issued ASU No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes, Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
General (Tables)
General (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Remaining Performance Obligations Expected to be Recognized | The remaining performance obligations expected to be recognized through 2022 are as follows: 2021 2022 Total Remaining performance obligations related to engineering only paid contracts $ 1,563,000 $ 443,000 $ 2,006,000 Remaining performance obligations related to partial equipment paid contracts 9,566,000 6,000 $ 9,572,000 Total remaining performance obligations $ 11,129,000 $ 449,000 $ 11,578,000 |
Schedule of Revenue by Source | The following table sets forth the Company’s revenue by source: For the Three Months 2021 2020 Equipment and systems sales $ 2,163,468 $ 1,606,946 Engineering and other services 181,083 131,591 Shipping and handling 21,978 71,388 Total revenue $ 2,366,529 $ 1,809,925 |
Schedule of Share-based Compensation Costs | The following is a summary of share-based compensation expenses included in the condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020: For the Three Months 2021 2020 Share-based compensation expense included in: Cost of revenue $ 14,135 $ 8,558 Advertising and marketing expenses 6,474 2,912 Product development costs 6,694 6,545 Selling, general and administrative expenses 31,833 172,874 Total share-based compensation expense included in consolidated statement of operations $ 59,136 $ 190,889 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Schedule of Lease Cost | The lease cost, cash flows and other information related to the Facility Lease were as follows: For the Three Months Ended March 31, 2021 Operating lease cost $ 54,222 Operating cash outflow from operating lease $ 69,844 As of March 31, 2021 Operating lease right-of-use assset $ 294,900 Operating lease liability, current $ 263,662 Operating lease liability, long-term $ 106,891 Remaining lease term 1.4 years Discount rate 5.00 % |
Schedule of Future Annual Minimum Lease Payments | Future annual minimum lease payments on the Facility Lease as of March 31, 2021 were as follows: Years ended December 31, 2021 (excluding the three months ended March 31, 2021) 212,020 2022 170,891 Total minimum lease payments 382,911 Less imputed interest (12,358 ) Present value of minimum lease payments $ 370,553 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following: March 31, December 31, 2021 2020 Finished goods $ 325,451 $ 201,778 Work in progress 10,083 4,231 Raw materials 272,299 214,145 Allowance for excess & obsolete inventory (88,674 ) (93,045 ) Inventory, net $ 519,159 $ 327,109 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: March 31, December 31, 2021 2020 Furniture and equipment $ 410,748 $ 398,422 Vehicles 15,000 15,000 Leasehold improvements 215,193 215,193 640,941 628,615 Accumulated depreciation (499,116 ) (480,883 ) Property and equipment, net $ 141,825 $ 147,732 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following: March 31, December 31, 2021 2020 Accounts payable $ 860,087 $ 918,639 Sales commissions payable 13,649 48,263 Accrued payroll liabilities 275,024 288,071 Product warranty accrual 264,956 173,365 Other accrued expenses 376,599 356,623 Total $ 1,790,315 $ 1,784,961 |
Equity Incentive Plan (Tables)
Equity Incentive Plan (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Schedule of Restricted Stock Units Activity | Restricted Stock Units A summary of the RSUs awarded to employees, directors and consultants under the 2017 Equity Plan during the three months ended March 31, 2021, are presented in the table below: Number of Units Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Outstanding, December 31, 2020 - $ - Granted - Vested and settled with share issuance - Forfeited/canceled - Outstanding, March 31, 2021 - $ - |
2017 Equity Plan [Member] | Employees and Consultants [Member] | |
Schedule of Stock Option Activity | A summary of the non-qualified stock options granted to employees and consultants under the 2017 Equity Plan during the three months ended March 31, 2021, are presented in the table below: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding, December 31, 2020 14,251,000 $ 0.083 8.3 $ - Granted 1,035,800 $ 0.130 10.0 $ - Exercised - Forfeited - Expired - Outstanding, March 31, 2021 15,286,800 $ 0.084 8.2 $ - Exercisable, March 31, 2021 15,286,800 $ 0.084 8.2 $ - |
Summary of Non-vested Non-qualified Stock Option Activity | A summary of non-vested non-qualified stock options activity for employees and consultants under the 2017 Equity Plan for the three months ended March 31, 2021, are presented in the table below: Number of Options Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Grant-Date Fair Value Nonvested, December 31, 2020 - $ - $ - $ - Granted 1,035,800 $ 0.124 $ - $ 128,543 Vested (1,035,800 ) $ 0.124 $ - $ 128,543 Forfeited - $ - Expired - $ - Nonvested, March 31, 2021 - $ - $ - $ - |
2017 Equity Plan [Member] | Directors [Member] | |
Schedule of Stock Option Activity | A summary of the non-qualified stock options granted to directors under the 2017 Equity Plan during the three months ended March 31, 2021, are presented in the table below: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ($000) Outstanding, December 31, 2020 7,400,000 $ 0.067 7.5 $ 2,780 Granted - Exercised - Forfeited/Cancelled - Expired - Outstanding, March 31, 2021 7,400,000 $ 0.067 7.2 $ 2,780 Exerciseable, March 31, 2021 6,400,000 $ 0.073 7.7 $ - |
Summary of Non-vested Non-qualified Stock Option Activity | A summary of non-vested non-qualified stock options activity for directors under the 2017 Equity Plan for the three months ended March 31, 2021, are presented in the table below: Number of Options Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Grant-Date Fair Value Nonvested, December 31, 2020 1,000,000 0.029 $ 29,000 $ 38,200 Granted - Vested - Forfeited - Expired - Nonvested, March 31, 2021 1,000,000 0.029 $ 29,000 $ 38,200 |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Warrants | |
Schedule of Outstanding Warrants to Purchase Common Stock | The following table summarizes information with respect to outstanding warrants to purchase common stock during the three months ended March 31, 2021: Weighted Weighted Average Number Average Exercise Remaining Life Aggregate Intrincic Outstanding Price In Months Value Outstanding at December 31, 2020 7,562,500 $ 0.25 6 $ 0 Issued - - - - Exercised - - - - Expired 0 $ 0.00 - $ 0 Outstanding at March 31, 2021 7,562,500 $ 0.25 6 $ 0 |
Schedule of Warrants Outstanding | The following table summarizes information about warrants outstanding at March 31, 2021: Weighted Average Warrants Outstanding Warrants Exercise price Outstanding In Months 0.25 7,562,500 3 |
General (Details Narrative)
General (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash balance transferred to bank account | $ 180,000 | |
Restricted cash | $ 86,697 | |
Potentially dilutive equity instruments that are convertible into common stock | 30,249,300 | 45,748,400 |
Impairment of goodwill | ||
Revenue recognized | $ 859,705 | |
Remaining performance obligations | $ 11,578,000 | |
Remaining performance obligations, percentage | 17.00% | |
Expected stock price volatility | 152.51% | |
Expected term | 10 years | |
Risk-free interest rate | 1.20% | |
Share based compensation expense | $ 59,136 | $ 190,889 |
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | Customer One [Member] | ||
Concentration risk percentage | 38.00% | 17.00% |
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | Customer Two [Member] | ||
Concentration risk percentage | 16.00% | 16.00% |
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | Customer Three [Member] | ||
Concentration risk percentage | 11.00% | 10.00% |
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | Customer Four [Member] | ||
Concentration risk percentage | 10.00% | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer One [Member] | ||
Concentration risk percentage | 60.00% | 59.00% |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Two [Member] | ||
Concentration risk percentage | 31.00% | 18.00% |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Three [Member] | ||
Concentration risk percentage | 15.00% | |
2021 Incentive Awards [Member] | ||
Share based compensation expense | $ 52,794 | $ 36,463 |
2022 [Member] | ||
Remaining performance obligations | 449,000 | |
Customer Contracts [Member] | ||
Remaining performance obligations | $ 2,006,000 |
General - Schedule of Remaining
General - Schedule of Remaining Performance Obligations Expected to be Recognized (Details) | Mar. 31, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations related to engineering only paid contracts | $ 2,006,000 |
Remaining performance obligations related to partial equipment paid contracts | 9,572,000 |
Total remaining performance obligations | 11,578,000 |
2021 [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations related to engineering only paid contracts | 1,563,000 |
Remaining performance obligations related to partial equipment paid contracts | 9,566,000 |
Total remaining performance obligations | 11,129,000 |
2022 [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations related to engineering only paid contracts | 443,000 |
Remaining performance obligations related to partial equipment paid contracts | 6,000 |
Total remaining performance obligations | $ 449,000 |
General - Schedule of Revenue b
General - Schedule of Revenue by Source (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 2,366,529 | $ 1,809,925 |
Equipment and Systems Sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 2,163,468 | 1,606,946 |
Engineering and Other Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 181,083 | 131,591 |
Shipping and Handling [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 21,978 | $ 71,388 |
General - Schedule of Share-bas
General - Schedule of Share-based Compensation Costs (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Total share-based compensation expense included in consolidated statement of operations | $ 59,136 | $ 190,889 |
Cost of Sales [Member] | ||
Total share-based compensation expense included in consolidated statement of operations | 14,135 | 8,558 |
Advertising and Marketing Expenses [Member] | ||
Total share-based compensation expense included in consolidated statement of operations | 6,474 | 2,912 |
Product Development Costs [Member] | ||
Total share-based compensation expense included in consolidated statement of operations | 6,694 | 6,545 |
Selling, General and Administrative Expenses [Member] | ||
Total share-based compensation expense included in consolidated statement of operations | $ 31,833 | $ 172,874 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | Jan. 02, 2019 | |
Lessee, Lease, Description [Line Items] | |||
Operating lease right-of-use asset | $ 294,900 | $ 343,950 | |
Lease liability | $ 370,553 | ||
Operating lease term description | The Facility Lease commenced September 29, 2017 and continues through August 31, 2022. | ||
Monthly rent description | Beginning September 1, 2018, and each subsequent September 1 during the term, the monthly rent under the Facility Lease will increase by 3%. | ||
ASU 2016-02 [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease right-of-use asset | $ 714,416 | ||
Lease liability | 822,374 | ||
Unamortized amount of tenant improvement allowance | 81,481 | ||
ASU 2016-02 [Member] | Minimum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Tenant improvements | $ 100,000 | ||
Facility Lease [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease renewal term | 5 years |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Cost (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Operating lease cost | $ 54,222 | |
Operating cash outflow from operating lease | 69,844 | |
Operating lease right-of-use asset | 294,900 | $ 343,950 |
Operating lease liability, current | 263,662 | 266,105 |
Operating lease liability, long-term | $ 106,891 | $ 169,119 |
Remaining lease term | 1 year 4 months 24 days | |
Discount rate | 5.00% |
Leases - Schedule of Future Ann
Leases - Schedule of Future Annual Minimum Lease Payments (Details) | Mar. 31, 2021USD ($) |
Leases [Abstract] | |
2021 (excluding the three months ended March 31, 2021) | $ 212,020 |
2022 | 170,891 |
Total minimum lease payments | 382,911 |
Less imputed interest | (12,358) |
Present value of minimum lease payments | $ 370,553 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Overhead expenses | $ 17,443 | $ 17,974 |
Prepaid inventory expenses | $ 1,960,000 | $ 916,000 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 325,451 | $ 201,778 |
Work in progress | 10,083 | 4,231 |
Raw materials | 272,299 | 214,145 |
Allowance for excess & obsolete inventory | (88,674) | (93,045) |
Inventory, net | $ 519,159 | $ 327,109 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Depreciation expense | $ 18,233 | |
Selling, general and administrative expenses | 740,473 | $ 1,108,993 |
Property and Equipment [Member] | Cost of Sales [Member] | ||
Selling, general and administrative expenses | 1,249 | |
Property and Equipment [Member] | Inventory [Member] | ||
Selling, general and administrative expenses | $ 312 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 640,941 | $ 628,615 |
Accumulated depreciation | (499,116) | (480,883) |
Property and equipment, net | 141,825 | 147,732 |
Furniture and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 410,748 | 398,422 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 15,000 | 15,000 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 215,193 | $ 215,193 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 860,087 | $ 918,639 |
Sales commissions payable | 13,649 | 48,263 |
Accrued payroll liabilities | 275,024 | 288,071 |
Product warranty accrual | 264,956 | 173,365 |
Other accrued expenses | 376,599 | 356,623 |
Total | $ 1,790,315 | $ 1,784,961 |
Note Payable and Accrued Inte_2
Note Payable and Accrued Interest (Details Narrative) - USD ($) | Feb. 10, 2021 | Mar. 31, 2021 |
Debt Disclosure [Abstract] | ||
Loan principal amount | $ 514,200 | |
Loan interest rate | 1.00% | |
Loan due date | Feb. 5, 2026 | |
Accrued interest | $ 718 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Mar. 30, 2021 | Jun. 09, 2020 | Mar. 09, 2020 | Mar. 31, 2021 | Dec. 31, 2019 |
Obligate to pay for dispute | $ 40,000 | ||||
Aggregate common shares issued upon execution of settlement | 1,000,000 | ||||
Other expenses | $ 107,000 | ||||
Accounts payables and accruals | 40,000 | ||||
Stock issuance amount | $ 67,000 | ||||
Former Employee [Member] | |||||
Interim awarded value | $ 33,985 | ||||
Restricted stock units shares issued interest percentage | 8.00% | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Number of units, vested but not settled | 6,750,000 | ||||
Number of units, vested and settled | 6,750,000 | ||||
Interim awarded value | $ 10,000 |
Equity Incentive Plan (Details
Equity Incentive Plan (Details Narrative) - USD ($) | Apr. 01, 2021 | Jun. 24, 2020 | Apr. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Mar. 22, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based compensation expense | $ 6,342 | $ 154,426 | ||||
Incentive Stock Bonus Awards [Member] | Employees [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of share awards granted | 22,686,800 | |||||
Restricted Stock Units (RSUs) [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options vested | 800,000 | |||||
Restricted Stock Units (RSUs) [Member] | Employees, Directors and Consultants [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based compensation expense | $ 0 | 18,872 | ||||
2017 Equity Incentive Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of common stock shares issuance | 50,000,000 | |||||
2021 Equity Incentive Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of share awards granted | 100,000,000 | |||||
2017 Equity Incentive Plan [Member] | Directors [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based compensation expense | $ 6,342 | $ 29,266 | ||||
Number of options vested | 500,000 | 500,000 | ||||
2017 Equity Incentive Plan [Member] | Directors [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options vested | ||||||
2017 Equity Incentive Plan [Member] | Employees and Consultants [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options vested | 1,035,800 | |||||
2017 Equity Incentive Plan [Member] | Non-Qualified Stock Options [Member] | Directors [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options granted during the period | 2,000,000 | |||||
Non-qualified stock options vested percentage | 50.00% | |||||
Non-qualified stock options term | 5 years | 7 years 6 months | ||||
2017 Equity Incentive Plan [Member] | Non-Qualified Stock Options [Member] | Directors [Member] | Subsequent Event [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options vested | 1,000,000 | |||||
Non-qualified stock options vested percentage | 50.00% | |||||
2017 Equity Incentive Plan [Member] | Non-Qualified Stock Options [Member] | Employees and Consultants [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based compensation expense | $ 0 | $ 106,288 | ||||
Non-qualified stock options term | 8 years 3 months 19 days |
Equity Incentive Plan - Schedul
Equity Incentive Plan - Schedule of Stock Option Activity (Details) - 2017 Equity Incentive Plan [Member] - USD ($) | Jun. 24, 2020 | Mar. 31, 2021 |
Directors [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Granted | ||
Non-Qualified Stock Options [Member] | Directors [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Outstanding Beginning | 7,400,000 | |
Number of Options, Granted | ||
Number of Options, Exercised | ||
Number of Options, Forfeited/Cancelled | ||
Number of Options, Expired | ||
Number of Options, Outstanding Ending | 7,400,000 | |
Number of Options, Exercisable Ending | 6,400,000 | |
Weighted Average Exercise Price, Outstanding Beginning | $ 0.067 | |
Weighted Average Exercise Price, Granted | ||
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Forfeited/Cancelled | ||
Weighted Average Exercise Price, Expired | ||
Weighted Average Exercise Price, Outstanding Ending | 0.067 | |
Weighted Average Exercise Price, Exercisable Ending | $ 0.073 | |
Weighted Average Remaining Contractual Term, Outstanding Beginning | 5 years | 7 years 6 months |
Weighted Average Remaining Contractual Term, Granted | ||
Weighted Average Remaining Contractual Term, Outstanding Ending | 7 years 2 months 12 days | |
Weighted Average Remaining Contractual Term, Exercisable Ending | 7 years 8 months 12 days | |
Aggregate Intrinsic Value, Outstanding Beginning | $ 2,780 | |
Aggregate Intrinsic Value, Outstanding Ending | 2,780 | |
Aggregate Intrinsic Value, Exercisable Ending | ||
Employees and Consultants [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Granted | 1,035,800 | |
Employees and Consultants [Member] | Non-Qualified Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Outstanding Beginning | 14,251,000 | |
Number of Options, Granted | 1,035,800 | |
Number of Options, Exercised | ||
Number of Options, Forfeited/Cancelled | ||
Number of Options, Expired | ||
Number of Options, Outstanding Ending | 15,286,800 | |
Number of Options, Exercisable Ending | 15,286,800 | |
Weighted Average Exercise Price, Outstanding Beginning | $ 0.083 | |
Weighted Average Exercise Price, Granted | 0.130 | |
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Forfeited/Cancelled | ||
Weighted Average Exercise Price, Expired | ||
Weighted Average Exercise Price, Outstanding Ending | 0.084 | |
Weighted Average Exercise Price, Exercisable Ending | $ 0.084 | |
Weighted Average Remaining Contractual Term, Outstanding Beginning | 8 years 3 months 19 days | |
Weighted Average Remaining Contractual Term, Granted | 10 years | |
Weighted Average Remaining Contractual Term, Outstanding Ending | 8 years 2 months 12 days | |
Weighted Average Remaining Contractual Term, Exercisable Ending | 8 years 2 months 12 days | |
Aggregate Intrinsic Value, Outstanding Beginning | ||
Aggregate Intrinsic Value, Outstanding Ending | ||
Aggregate Intrinsic Value, Exercisable Ending |
Equity Incentive Plan - Summary
Equity Incentive Plan - Summary of Non-vested Non-qualified Stock Option Activity (Details) - 2017 Equity Incentive Plan [Member] | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Directors [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Options Nonvested, Beginning | shares | 1,000,000 |
Number of Options Nonvested, Granted | shares | |
Number of Options Nonvested, Vested | shares | |
Number of Options Nonvested, Forfeited | shares | |
Number of Options Nonvested, Expired | shares | |
Number of Options Nonvested, Ending | shares | 1,000,000 |
Weighted Average Grant-Date Fair Value, Beginning | $ / shares | $ 0.029 |
Weighted Average Grant-Date Fair Value, Granted | $ / shares | |
Weighted Average Grant-Date Fair Value, Vested | $ / shares | |
Weighted Average Grant-Date Fair Value, Forfeited | $ / shares | |
Weighted Average Grant-Date Fair Value, Expired | $ / shares | |
Weighted Average Grant-Date Fair Value, Ending | $ / shares | $ 0.029 |
Aggregated Intrinsic Value, Nonvested Beginning | $ 29,000 |
Aggregated Intrinsic Value, Nonvested Ending | 29,000 |
Grant Date Fair Value Nonvested, Beginning | 38,200 |
Grant Date Fair Value Nonvested, Granted | |
Grant Date Fair Value Nonvested, Vested | |
Grant Date Fair Value Nonvested, Forfeited | |
Grant Date Fair Value Nonvested, Expired | |
Grant Date Fair Value Nonvested, Ending | $ 38,200 |
Employees and Consultants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Options Nonvested, Beginning | shares | |
Number of Options Nonvested, Granted | shares | 1,035,800 |
Number of Options Nonvested, Vested | shares | (1,035,800) |
Number of Options Nonvested, Forfeited | shares | |
Number of Options Nonvested, Expired | shares | |
Number of Options Nonvested, Ending | shares | |
Weighted Average Grant-Date Fair Value, Beginning | $ / shares | |
Weighted Average Grant-Date Fair Value, Granted | $ / shares | 0.124 |
Weighted Average Grant-Date Fair Value, Vested | $ / shares | 0.124 |
Weighted Average Grant-Date Fair Value, Forfeited | $ / shares | |
Weighted Average Grant-Date Fair Value, Expired | $ / shares | |
Weighted Average Grant-Date Fair Value, Ending | $ / shares | |
Aggregated Intrinsic Value, Nonvested Beginning | |
Aggregated Intrinsic Value, Nonvested Ending | |
Grant Date Fair Value Nonvested, Beginning | |
Grant Date Fair Value Nonvested, Granted | 128,543 |
Grant Date Fair Value Nonvested, Vested | 128,543 |
Grant Date Fair Value Nonvested, Forfeited | |
Grant Date Fair Value Nonvested, Expired | |
Grant Date Fair Value Nonvested, Ending |
Equity Incentive Plan - Sched_2
Equity Incentive Plan - Schedule of Restricted Stock Units Activity (Details) - 2017 Equity Incentive Plan [Member] - Employees, Directors and Consultants [Member] | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Units, beginning | shares | |
Number of Units, Granted | shares | |
Number of Units, Vested and settled with share issuance | shares | |
Number of Units, Forfeited/canceled | shares | |
Number of Units, ending | shares | |
Weighted Average Grant Date Fair Value, beginning | $ / shares | |
Weighted Average Grant Date Fair Value, Granted | $ / shares | |
Weighted Average Grant Date Fair Value, Vested and settled with share issuance | $ / shares | |
Weighted Average Grant Date Fair Value, Forfeited/canceled | $ / shares | |
Weighted Average Grant Date Fair Value, ending | $ / shares | |
Aggregated Intrinsic Value, Outstanding beginning | $ | |
Aggregated Intrinsic Value, Outstanding ending | $ |
Warrants - Schedule of Outstand
Warrants - Schedule of Outstanding Warrants to Purchase Common Stock (Details) | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants Outstanding, Beginning Balance | shares | 7,562,500 |
Warrants, Issued | shares | |
Warrants, Exercised | shares | |
Warrants, Expired | shares | 0 |
Warrants Outstanding, Ending Balance | shares | 7,562,500 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 0.25 |
Weighted Average Exercise Price, Issued | $ / shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Expired | $ / shares | 0 |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 0.25 |
Weighted Average Life of Outstanding Warrants in Months, Beginning Balance | 6 months |
Weighted Average Life of Outstanding Warrants in Months, Ending Balance | 6 months |
Aggregate Intrinsic Value, Beginning Balance | $ | $ 0 |
Aggregate Intrinsic Value, Issued | $ | |
Aggregate Intrinsic Value, Exercised | $ | |
Aggregate Intrinsic Value, Expired | $ | 0 |
Aggregate Intrinsic Value, Ending Balance | $ | $ 0 |
Warrants - Schedule of Warrants
Warrants - Schedule of Warrants Outstanding (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Exercise price | $ 0.25 | $ 0.25 |
Warrants Outstanding | 7,562,500 | 7,562,500 |
Weighted Average Life of Outstanding Warrants in Months | 6 months | |
Warrants Range [Member] | ||
Exercise price | $ 0.25 | |
Warrants Outstanding | 7,562,500 | |
Warrants Range One [Member] | ||
Weighted Average Life of Outstanding Warrants in Months | 6 months |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Income Tax Disclosure [Abstract] | |
Net operating loss carry forward amount | $ 20,115,000 |
Net operating loss carry forward expected to expire amount | $ 11,196,261 |
Net operating loss expiration term | 2034 through 2037 |
NOLs usage against taxable income, percentage | 80.00% |
Percentage of ownership change | 50.00% |
NOLs carryforwards term | 3 years |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Jul. 01, 2021USD ($) | Apr. 30, 2021USD ($)ft² | Apr. 08, 2021shares | Apr. 01, 2021shares | Mar. 30, 2021shares | Jun. 24, 2020shares | Mar. 31, 2021shares |
Aggregate common shares issued upon execution of settlement | 1,000,000 | ||||||
Forecast [Member] | |||||||
Sublease rent charged | $ | $ 11,978 | ||||||
2017 Equity Incentive Plan [Member] | Directors [Member] | |||||||
Number of options vested | |||||||
2017 Equity Incentive Plan [Member] | Non-Qualified Stock Options [Member] | Directors [Member] | |||||||
Number of options granted during the period | 2,000,000 | ||||||
Subsequent Event [Member] | |||||||
Sublease rent charged | $ | $ 5,989 | ||||||
Subsequent Event [Member] | Office and Manufacturing [Member] | |||||||
Area of land | ft² | 6,900 | ||||||
Subsequent Event [Member] | Former Employee [Member] | |||||||
Aggregate common shares issued upon execution of settlement | 1,000,000 | ||||||
Subsequent Event [Member] | 2017 Equity Incentive Plan [Member] | Non-Qualified Stock Options [Member] | Directors [Member] | |||||||
Number of options vested | 1,000,000 |