Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 09, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2021 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-54286 | |
Entity Registrant Name | SURNA INC. | |
Entity Central Index Key | 0001482541 | |
Entity Tax Identification Number | 27-3911608 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 1780 55th Street | |
Entity Address, City or Town | Boulder | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80301 | |
City Area Code | (303) | |
Local Phone Number | 993-5271 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 237,526,638 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 1,643,463 | $ 2,284,881 |
Accounts receivable (net of allowance for doubtful accounts of $188,311 and $165,098, respectively) | 234,450 | 33,480 |
Inventory, net | 444,352 | 327,109 |
Prepaid expenses and other | 1,986,977 | 1,037,823 |
Total Current Assets | 4,309,242 | 3,683,293 |
Noncurrent Assets | ||
Property and equipment, net | 116,615 | 147,732 |
Goodwill | 631,064 | 631,064 |
Intangible assets, net | 6,937 | 7,227 |
Deposits | 16,122 | |
Operating lease right-of-use asset | 245,037 | 343,950 |
Total Noncurrent Assets | 1,015,775 | 1,129,973 |
TOTAL ASSETS | 5,325,017 | 4,813,266 |
CURRENT LIABILITIES | ||
Accounts payable and accrued liabilities | 1,909,544 | 1,784,961 |
Deferred revenue | 4,055,774 | 3,724,189 |
Accrued equity compensation | 108,945 | 128,434 |
Other liabilities | 37,078 | |
Current portion of operating lease liability | 261,187 | 266,105 |
Total Current Liabilities | 6,372,528 | 5,903,689 |
NONCURRENT LIABILITIES | ||
Note payable and accrued interest | 516,172 | |
Other liabilities | 37,078 | 74,156 |
Operating lease liability, net of current portion | 43,881 | 169,119 |
Total Noncurrent Liabilities | 597,131 | 243,275 |
TOTAL LIABILITIES | 6,969,659 | 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; 237,526,638 and 236,526,638 shares issued and outstanding, respectively | 2,376 | 2,366 |
Additional paid in capital | 26,324,331 | 26,107,159 |
Accumulated deficit | (27,971,769) | (27,443,643) |
Total Shareholders’ Deficit | (1,644,642) | (1,333,698) |
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT | $ 5,325,017 | $ 4,813,266 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts, net | $ 188,311 | $ 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 | 237,526,638 | 236,526,638 |
Common stock, shares outstanding | 237,526,638 | 236,526,638 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenue, net | $ 4,509,505 | $ 1,682,424 | $ 6,876,034 | $ 3,492,349 |
Cost of revenue | 3,227,181 | 1,407,599 | 5,249,104 | 2,761,000 |
Gross profit | 1,282,324 | 274,825 | 1,626,930 | 731,349 |
Operating expenses: | ||||
Advertising and marketing expenses | 168,042 | 95,053 | 345,187 | 243,974 |
Product development costs | 111,546 | 74,848 | 224,184 | 219,796 |
Selling, general and administrative expenses | 886,758 | 710,536 | 1,627,231 | 1,819,529 |
Total operating expenses | 1,166,346 | 880,437 | 2,196,602 | 2,283,299 |
Operating income/(loss) | 115,978 | (605,612) | (569,672) | (1,551,950) |
Other income (expense): | ||||
Other income (expense), net | 150,518 | 1,077 | 43,518 | 15,397 |
Interest expense | (1,254) | (8,982) | (1,972) | (15,277) |
Total other income (expense) | 149,264 | (7,905) | 41,546 | 120 |
Income/(loss) before provision for income taxes | 265,242 | (613,517) | (528,126) | (1,551,830) |
Income taxes | ||||
Net income/(loss) | $ 265,242 | $ (613,517) | $ (528,126) | $ (1,551,830) |
Income/(loss) per common share – basic | $ 0 | $ 0 | $ 0 | $ (0.01) |
Income/(loss) per common share – diluted | $ 0 | $ 0 | $ 0 | $ (0.01) |
Weighted average number of common shares outstanding, basic | 237,449,715 | 236,526,638 | 236,990,726 | 233,794,550 |
Weighted average number of common shares outstanding, diluted | 240,828,867 | 236,526,638 | 236,990,726 | 233,794,550 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Shareholders' Deficit (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Shares To Be Issued [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 420 | $ 2,283 | $ 25,326,593 | $ (25,684,927) | $ (355,631) | |
Beginning balance, shares at Dec. 31, 2019 | 42,030,331 | 228,216,638 | 1,560,000 | |||
Fair value of vested stock options granted to employees and directors | 706,634 | 706,634 | ||||
Common shares issued in settlement of restricted stock units and award of stock bonuses | $ 83 | (83) | ||||
Balance, shares | 8,310,000 | (1,560,000) | ||||
Fair value of vested restricted stock units awarded to employees | 25,163 | 25,163 | ||||
Net loss | (1,551,830) | (1,551,830) | ||||
Ending balance, value at Jun. 30, 2020 | $ 420 | $ 2,366 | 26,058,307 | (27,236,757) | (1,175,664) | |
Ending balance, shares at Jun. 30, 2020 | 42,030,331 | 236,526,638 | ||||
Beginning balance, value at Mar. 31, 2020 | $ 420 | $ 2,366 | 25,984,402 | (26,623,240) | (636,052) | |
Beginning balance, shares at Mar. 31, 2020 | 42,030,331 | 236,526,638 | ||||
Fair value of vested restricted stock units awarded to employees | 6,291 | 6,291 | ||||
Fair value of vested stock options granted to employees and directors | 67,614 | 67,614 | ||||
Net loss | (613,517) | (613,517) | ||||
Ending balance, value at Jun. 30, 2020 | $ 420 | $ 2,366 | 26,058,307 | (27,236,757) | (1,175,664) | |
Ending balance, shares at Jun. 30, 2020 | 42,030,331 | 236,526,638 | ||||
Beginning balance, value at Dec. 31, 2020 | $ 420 | $ 2,366 | 26,107,159 | (27,443,643) | (1,333,698) | |
Beginning balance, shares at Dec. 31, 2020 | 42,030,331 | 236,526,638 | ||||
Common shares issued in settlement of legal dispute | $ 10 | 66,990 | 67,000 | |||
Common shares to be issued in settlement of legal dispute, shares | 1,000,000 | |||||
Fair value of vested restricted stock units awarded to employees | 143,770 | 143,770 | ||||
Fair value of vested stock options granted to directors | 6,412 | 6,412 | ||||
Net loss | (528,126) | (528,126) | ||||
Ending balance, value at Jun. 30, 2021 | $ 420 | $ 2,376 | 26,324,331 | (27,971,769) | (1,644,642) | |
Ending balance, shares at Jun. 30, 2021 | 42,030,331 | 237,526,638 | ||||
Beginning balance, value at Mar. 31, 2021 | $ 420 | $ 2,366 | $ 67,000 | 26,241,935 | (28,237,011) | (1,925,290) |
Beginning balance, shares at Mar. 31, 2021 | 42,030,331 | 236,526,638 | 1,000,000 | |||
Common shares issued in settlement of legal dispute | $ 10 | $ (67,000) | 66,990 | |||
Common shares to be issued in settlement of legal dispute, shares | 1,000,000 | (1,000,000) | ||||
Fair value of vested restricted stock units awarded to employees | 15,336 | 15,336 | ||||
Fair value of vested stock options granted to directors | 70 | 70 | ||||
Net loss | 265,242 | 265,242 | ||||
Ending balance, value at Jun. 30, 2021 | $ 420 | $ 2,376 | $ 26,324,331 | $ (27,971,769) | $ (1,644,642) | |
Ending balance, shares at Jun. 30, 2021 | 42,030,331 | 237,526,638 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (528,126) | $ (1,551,830) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and intangible asset amortization expense | 37,180 | 60,987 |
Share-based compensation | 21,748 | 731,797 |
Common stock issued for other expense | 67,000 | |
Provision for doubtful accounts | 23,213 | 3,150 |
Provision for excess and obsolete inventory | (10,945) | 191,446 |
Loss on disposal of assets | 8,042 | 4,124 |
Amortization of ROU asset | 98,913 | 93,996 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (224,183) | 51,886 |
Inventory | (106,299) | 235,197 |
Prepaid expenses and other | (949,152) | 72,811 |
Accounts payable and accrued liabilities | 124,583 | (90,178) |
Deferred revenue | 331,585 | (576,483) |
Accrued interest | 1,972 | 1,047 |
Other liabilities | 20,241 | |
Lease deposit | (16,122) | 51,000 |
Operating lease liability, net | (130,156) | (106,363) |
Accrued equity compensation | 108,945 | (433,566) |
Net cash used in operating activities | (1,141,802) | (1,240,739) |
Cash Flows From Investing Activities | ||
Purchases of property and equipment | (15,316) | |
Proceeds from the sale of property equipment | 1,500 | |
Net cash used in investing activities | (13,816) | |
Cash Flows From Financing Activities | ||
Proceeds from issuance of note payable | 514,200 | 554,000 |
Net cash provided by financing activities | 514,200 | 554,000 |
Net change in cash and cash equivalents | (641,418) | (686,739) |
Cash and cash equivalents, beginning of period | 2,284,881 | 922,177 |
Cash and cash equivalents, end of period | 1,643,463 | 235,438 |
Supplemental cash flow information: | ||
Interest paid | ||
Income taxes paid |
General
General | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [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 COVID-19 pandemic has prompted national, regional, and local governments, including those in the markets that the Company operates in, to implement preventative or protective measures to control its spread. As a result, there have been many disruptions in business operations around the world, with an impact on our business. In our response to the COVID-19 pandemic and the government and business response, the Company took and continues to take measures to adjust its operations as necessary. In early 2020 the Company took measures to reduce expenses in light of reduced orders and to preserve cash, many of which were reversed by the end of the year when orders picked up and the overall business climate improved. Because the pandemic continues in different parts of the world and in different ways in the United States, the Company continues to actively monitor its operations and sales efforts and will make adjustments to its operations as necessary. We are experiencing unexpected and uncontrollable delays with our international supply of products and shipments from vendors due to a significant increase in shipments to U.S. ports, less cargo being shipped by air, and a general shortage of containers. While these delays have moderately improved in recent months, we, along with many other importers of goods across all industries, continue to experience severe congestion and extensive wait times for carriers at ports across the United States. In addition, restrictions imposed by local, state and federal agencies due to the COVID-19 pandemic have led to reduced personnel of importers, government staff and others in our supply chain. We have been working diligently with our network of freight partners and suppliers to expedite delivery dates and provide solutions to reduce further impact and delays. However, we are unable to determine the full impact of these delays and how long they will continue as they are out of our control. While the Company is continuing to navigate the financial, operational, and personnel challenges presented by the COVID-19 pandemic, the full extent of the impact on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic, the potential uncertainty related to and proliferation of new strains, and related actions taken by the U.S. government, state and local government officials, and international governments to prevent disease spread, all of which are uncertain, out of our control and cannot be predicted at this time. Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) 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 six months ended June 30, 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. Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) 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 six months ended June 30, 2021, the Company transferred a balance of $ 180,000 0 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 six months ended June 30, 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-months period ended June 30, 2020 and the six-months periods ended June 30, 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. However, during the three-month period ended June 30, 2021, we realized a net profit and therefore included 3,379,152 As of June 30, 2021, and 2020, there were respectively, 24,686,800 45,819,600 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 six months ended June 30, 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 June 30, 2021 and concluded that no Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 (Topic 606), Revenue from Contracts with Customers Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) 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. Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) For the three and six months ended June 30, 2021, the Company recognized revenue of $ 1,193,251 3,073,616 205,170 1,064,875 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 June 30, 2021, the Company’s remaining performance obligations, or backlog, was $ 7,987,000 2,038,000 26 1,282,000 The remaining performance obligations expected to be recognized through 2022 are as follows: Schedule of Remaining Performance Obligations Expected to be Recognized 2021 2022 Total Remaining performance obligations related to engineering only paid contracts $ 762,000 $ 1,276,000 $ 2,038,000 Remaining performance obligations related to partial equipment paid contracts 5,943,000 6,000 $ 5,949,000 Total remaining performance obligations $ 6,705,000 $ 1,282,000 $ 7,987,000 Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) The following table sets forth the Company’s revenue by source: Schedule of Revenue by Source For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Equipment and systems sales $ 4,245,897 $ 1,486,948 $ 6,409,365 $ 3,093,894 Engineering and other services 172,648 157,086 353,731 288,677 Shipping and handling 90,960 38,390 112,938 109,778 Total revenue $ 4,509,505 $ 1,682,424 $ 6,876,034 $ 3,492,349 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 six months ended June 30, 2021, the valuation assumptions used to determine the fair value of each option award on the date of grant were: expected stock price volatility ranged from 151.68 152.51 10 1.2 1.49 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 and six months ended June 30, 2021 and 2020: Schedule of Share-based Compensation Costs For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Share-based compensation expense included in: Cost of revenue $ 15,809 $ 8,558 $ 29,944 $ 17,116 Advertising and marketing expenses 6,818 2,088 13,292 5,000 Product development costs 7,335 4,343 14,029 10,888 Selling, general and administrative expenses 41,595 92,353 73,428 265,227 Total share-based compensation expense included in consolidated statement of operations $ 71,557 $ 107,342 $ 130,693 $ 298,231 Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) Included in the expense for the three and six months ended June 30, 2021, is an accrual for $ 56,151 108,945 33,436 69,897 Concentrations Three customers accounted for 28 27 11 18 18 13 21 21 15 16 10 Two customers accounted for 77 11 41 35 19 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. Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) |
Leases
Leases | 6 Months Ended |
Jun. 30, 2021 | |
Leases | |
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 $ 714,416 822,374 The Facility Lease commenced September 29, 2017 and continues through August 31, 2022. five years Beginning September 1, 2018, and each subsequent September 1 during the term, the monthly rent under the Facility Lease will increase by 3%. 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 81,481 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. Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) The lease cost, cash flows and other information related to the Facility Lease were as follows: Schedule of Lease Cost For the June 30, 2021 Operating lease cost $ 108,444 Operating cash outflow from operating lease $ 139,688 As of June 30, 2021 Operating lease right-of-use assset $ 245,037 Operating lease liability, current $ 261,187 Operating lease liability, long-term $ 43,881 Remaining lease term 1.2 Discount rate 5.00 % Future annual minimum lease payments on the Facility Lease as of June 30, 2021 were as follows: Schedule of Future Annual Minimum Lease Payments Years ended December 31, 2021 (excluding the six months ended June 30, 2021) 142,177 2022 170,891 Total minimum lease payments 313,068 Less imputed interest (8,000 ) Present value of minimum lease payments $ 305,068 On April 30, 2021, the Company entered into an agreement to sublease approximately 6,900 5,989 11,978 As referenced in Note 12 - Subsequent Events As referenced in Note 12 - Subsequent Events Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 3 – Inventory Inventory consisted of the following: Schedule of Inventory June 30, December 31, 2021 2020 Finished goods $ 321,171 $ 201,778 Work in progress 3,068 4,231 Raw materials 202,213 214,145 Allowance for excess & obsolete inventory (82,100 ) (93,045 ) Inventory, net $ 444,352 $ 327,109 Overhead expenses of $ 17,574 17,974 Advance payments on inventory purchases are recorded in prepaid expenses until title for such inventory passes to the Company. Prepaid expenses included approximately $ 1,873,000 916,000 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 4 – Property and Equipment Property and equipment consisted of the following: Schedule of Property and Equipment June 30, December 31, 2021 2020 Furniture and equipment $ 296,851 $ 398,422 Vehicles 15,000 15,000 Leasehold improvements 215,193 215,193 527,044 628,615 Accumulated depreciation (410,429 ) (480,883 ) Property and equipment, net $ 116,615 $ 147,732 Depreciation expense was $ 36,891 2,985 746 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 6 Months Ended |
Jun. 30, 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: Schedule of Accounts Payable and Accrued Liabilities June 30, December 31, 2021 2020 Accounts payable $ 1,090,806 $ 918,639 Sales commissions payable 81,287 48,263 Accrued payroll liabilities 293,929 288,071 Product warranty accrual 154,103 173,365 Other accrued expenses 289,419 356,623 Total $ 1,909,544 $ 1,784,961 Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) |
Note Payable and Accrued Intere
Note Payable and Accrued Interest | 6 Months Ended |
Jun. 30, 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 The loan amount bears interest at 1 February 5, 2026 During the three and six months ended June 30, 2021, interest of $ 1,254 1,972 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 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 6,750,000 10,000 33,985 8 40,000 1,000,000 107,000 20,000 40,000 20,000 1,000,000 67,000 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 Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) 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 Plans
Equity Incentive Plans | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Equity Incentive Plans | Note 8 – Equity Incentive Plans 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 During the six months ended June 30, 2021, the Company issued no shares of its common stock under the 2017 Equity Plan. During the six months ended June 30, 2021, the Company granted awards for 3,035,800 As of June 30, 2021, of the 50,000,000 24,553,818 24,686,800 759,382 There was $ 104,800 3 Non-Qualified Stock Options A summary of the non-qualified stock options granted to employees and consultants under the 2017 Equity Plan during the six months ended June 30, 2021, are presented in the table below: Schedule of Stock Option Activity 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 3,035,800 $ 0.085 10.0 $ - Exercised - Forfeited - Expired - Outstanding, June 30, 2021 17,286,800 $ 0.084 8.1 $ - Exercisable, June 30, 2021 15,536,800 $ 0.086 7.9 $ - Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) During the six months ended June 30, 2021, we issued a total of 3,035,800 ● 1,035,800 10 0.13 ● 2,000,000 250,000 417,000 665,000 668,000 10 0.061 A summary of non-vested non-qualified stock options activity for employees and consultants under the 2017 Equity Plan for the three months ended June 30, 2021, are presented in the table below: Summary of Non-vested Non-qualified Stock Option Activity Number of Options Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Grant-Date Fair Value Nonvested, December 31, 2020 - $ - $ - $ - Granted 3,035,800 $ 0.082 $ - $ 248,678 Vested (1,285,800 ) $ 0.112 $ - $ 143,878 Forfeited - $ - Expired - $ - Nonvested, June 30, 2021 1,750,000 $ 0.061 $ 6,125 $ 104,800 For the six months ended June 30, 2021 and June 30, 2020, the Company recorded $ 15,336 153,680 A summary of the non-qualified stock options granted to directors under the 2017 Equity Plan during the six months ended June 30, 2021, are presented in the table below: Schedule of Stock Option Activity 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 $ - Granted - Exercised - Forfeited/Cancelled - Expired - Outstanding, June 30, 2021 7,400,000 $ 0.067 7.0 $ - Exerciseable, June 30, 2021 7,400,000 $ 0.067 7.0 $ - A summary of non-vested non-qualified stock options activity for directors under the 2017 Equity Plan for the six months ended June 30, 2021, are presented in the table below: Summary of Non-vested Non-qualified Stock Option Activity 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 $ 35,500 $ 29,000 Granted - Vested (1,000,000 ) $ 0.029 $ (29,000 ) Forfeited - Expired - Nonvested, June 30, 2021 - $ - $ - Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) During the six months ended June 30, 2021 and June 30, 2020, the Company incurred $ 6,412 49,488 1,000,000 1,521,352 Effective June 24, 2020 , 2 50 5 Restricted Stock Units A summary of the RSUs awarded to employees, directors and consultants under the 2017 Equity Plan during the six months ended June 30, 2021, are presented in the table below: Schedule of Restricted Stock Units Activity 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, June 30, 2021 - - $ - For the six months ended June 30, 2021 and June 30, 2020, the Company recorded $ 0 25,163 Effective April 30, 2020, 800,000 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 i.e. The 2021 Plan was approved by stockholders at the Annual General Meeting of Stockholders held on July 22, 2021. Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) |
Warrants
Warrants | 6 Months Ended |
Jun. 30, 2021 | |
Warrants | |
Warrants | Note 9 – Warrants The following table summarizes information with respect to outstanding warrants to purchase common stock during the six months ended June 30, 2021: Schedule of Outstanding Warrants to Purchase Common Stock Number Weighted Average Exercise Weighted Average Remaining Life Aggregate Intrincic Outstanding Price In Months Value Outstanding at December 31, 2020 7,562,500 $ 0.25 6 $ 0 Issued - - - - Exercised - - - - Expired (7,562,500 ) $ 0.03 - $ 0 Outstanding at June 30, 2021 0 $ 0.00 0 $ 0 Effective June 30, 2021, 75,625,000 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 10 – Income Taxes As of June 30, 2021, the Company has U.S. federal and state net operating losses (“NOLs”) of approximately $ 19,850,000 11,196,261 2034 through 2037 80 80 50 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 June 30, 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. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 11 – Related Party Transactions The company entered into a manufacturer representative agreement with RSX Enterprises in March 2021 to become a non-exclusive representative for the Company to assist in marketing and soliciting orders. James R. Shipley, a current director of the Company, has a significant ownership interest in RSX. Under the manufacturer representative agreement, RSX will act as a non-exclusive representative for the Company within the United States, Canada and Mexico and may receive a commission for qualified customer leads. The agreement has an initial term through December 31, 2021 with automatic one-year renewal terms unless prior notice is given 90 days prior to each annual expiration. The Company has not paid or accrued any commissions under the agreement as of June 30, 2021. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12 – Subsequent Events In accordance with ASC 855, Subsequent Events On July 27, 2021, the Company entered into a Lease Termination Agreement with its current landlord for the 18,952 August 31, 2022 On July 28, 2021, the Company entered into an agreement to lease 11,491 January 31, 2027 |
General (Policies)
General (Policies) | 6 Months Ended |
Jun. 30, 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 COVID-19 pandemic has prompted national, regional, and local governments, including those in the markets that the Company operates in, to implement preventative or protective measures to control its spread. As a result, there have been many disruptions in business operations around the world, with an impact on our business. In our response to the COVID-19 pandemic and the government and business response, the Company took and continues to take measures to adjust its operations as necessary. In early 2020 the Company took measures to reduce expenses in light of reduced orders and to preserve cash, many of which were reversed by the end of the year when orders picked up and the overall business climate improved. Because the pandemic continues in different parts of the world and in different ways in the United States, the Company continues to actively monitor its operations and sales efforts and will make adjustments to its operations as necessary. We are experiencing unexpected and uncontrollable delays with our international supply of products and shipments from vendors due to a significant increase in shipments to U.S. ports, less cargo being shipped by air, and a general shortage of containers. While these delays have moderately improved in recent months, we, along with many other importers of goods across all industries, continue to experience severe congestion and extensive wait times for carriers at ports across the United States. In addition, restrictions imposed by local, state and federal agencies due to the COVID-19 pandemic have led to reduced personnel of importers, government staff and others in our supply chain. We have been working diligently with our network of freight partners and suppliers to expedite delivery dates and provide solutions to reduce further impact and delays. However, we are unable to determine the full impact of these delays and how long they will continue as they are out of our control. While the Company is continuing to navigate the financial, operational, and personnel challenges presented by the COVID-19 pandemic, the full extent of the impact on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic, the potential uncertainty related to and proliferation of new strains, and related actions taken by the U.S. government, state and local government officials, and international governments to prevent disease spread, all of which are uncertain, out of our control and cannot be predicted at this time. Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) |
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 six months ended June 30, 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. Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) |
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 six months ended June 30, 2021, the Company transferred a balance of $ 180,000 0 |
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 six months ended June 30, 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-months period ended June 30, 2020 and the six-months periods ended June 30, 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. However, during the three-month period ended June 30, 2021, we realized a net profit and therefore included 3,379,152 As of June 30, 2021, and 2020, there were respectively, 24,686,800 45,819,600 |
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 six months ended June 30, 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 June 30, 2021 and concluded that no |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 (Topic 606), Revenue from Contracts with Customers Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) 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. Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) For the three and six months ended June 30, 2021, the Company recognized revenue of $ 1,193,251 3,073,616 205,170 1,064,875 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 June 30, 2021, the Company’s remaining performance obligations, or backlog, was $ 7,987,000 2,038,000 26 1,282,000 The remaining performance obligations expected to be recognized through 2022 are as follows: Schedule of Remaining Performance Obligations Expected to be Recognized 2021 2022 Total Remaining performance obligations related to engineering only paid contracts $ 762,000 $ 1,276,000 $ 2,038,000 Remaining performance obligations related to partial equipment paid contracts 5,943,000 6,000 $ 5,949,000 Total remaining performance obligations $ 6,705,000 $ 1,282,000 $ 7,987,000 Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) The following table sets forth the Company’s revenue by source: Schedule of Revenue by Source For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Equipment and systems sales $ 4,245,897 $ 1,486,948 $ 6,409,365 $ 3,093,894 Engineering and other services 172,648 157,086 353,731 288,677 Shipping and handling 90,960 38,390 112,938 109,778 Total revenue $ 4,509,505 $ 1,682,424 $ 6,876,034 $ 3,492,349 |
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 six months ended June 30, 2021, the valuation assumptions used to determine the fair value of each option award on the date of grant were: expected stock price volatility ranged from 151.68 152.51 10 1.2 1.49 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 and six months ended June 30, 2021 and 2020: Schedule of Share-based Compensation Costs For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Share-based compensation expense included in: Cost of revenue $ 15,809 $ 8,558 $ 29,944 $ 17,116 Advertising and marketing expenses 6,818 2,088 13,292 5,000 Product development costs 7,335 4,343 14,029 10,888 Selling, general and administrative expenses 41,595 92,353 73,428 265,227 Total share-based compensation expense included in consolidated statement of operations $ 71,557 $ 107,342 $ 130,693 $ 298,231 Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) Included in the expense for the three and six months ended June 30, 2021, is an accrual for $ 56,151 108,945 33,436 69,897 |
Concentrations | Concentrations Three customers accounted for 28 27 11 18 18 13 21 21 15 16 10 Two customers accounted for 77 11 41 35 19 |
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. Surna Inc. Notes to Condensed Consolidated Financial Statements (in US Dollars except share numbers) (Unaudited) |
General (Tables)
General (Tables) | 6 Months Ended |
Jun. 30, 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: Schedule of Remaining Performance Obligations Expected to be Recognized 2021 2022 Total Remaining performance obligations related to engineering only paid contracts $ 762,000 $ 1,276,000 $ 2,038,000 Remaining performance obligations related to partial equipment paid contracts 5,943,000 6,000 $ 5,949,000 Total remaining performance obligations $ 6,705,000 $ 1,282,000 $ 7,987,000 |
Schedule of Revenue by Source | The following table sets forth the Company’s revenue by source: Schedule of Revenue by Source For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Equipment and systems sales $ 4,245,897 $ 1,486,948 $ 6,409,365 $ 3,093,894 Engineering and other services 172,648 157,086 353,731 288,677 Shipping and handling 90,960 38,390 112,938 109,778 Total revenue $ 4,509,505 $ 1,682,424 $ 6,876,034 $ 3,492,349 |
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 and six months ended June 30, 2021 and 2020: Schedule of Share-based Compensation Costs For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Share-based compensation expense included in: Cost of revenue $ 15,809 $ 8,558 $ 29,944 $ 17,116 Advertising and marketing expenses 6,818 2,088 13,292 5,000 Product development costs 7,335 4,343 14,029 10,888 Selling, general and administrative expenses 41,595 92,353 73,428 265,227 Total share-based compensation expense included in consolidated statement of operations $ 71,557 $ 107,342 $ 130,693 $ 298,231 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Leases | |
Schedule of Lease Cost | The lease cost, cash flows and other information related to the Facility Lease were as follows: Schedule of Lease Cost For the June 30, 2021 Operating lease cost $ 108,444 Operating cash outflow from operating lease $ 139,688 As of June 30, 2021 Operating lease right-of-use assset $ 245,037 Operating lease liability, current $ 261,187 Operating lease liability, long-term $ 43,881 Remaining lease term 1.2 Discount rate 5.00 % |
Schedule of Future Annual Minimum Lease Payments | Future annual minimum lease payments on the Facility Lease as of June 30, 2021 were as follows: Schedule of Future Annual Minimum Lease Payments Years ended December 31, 2021 (excluding the six months ended June 30, 2021) 142,177 2022 170,891 Total minimum lease payments 313,068 Less imputed interest (8,000 ) Present value of minimum lease payments $ 305,068 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following: Schedule of Inventory June 30, December 31, 2021 2020 Finished goods $ 321,171 $ 201,778 Work in progress 3,068 4,231 Raw materials 202,213 214,145 Allowance for excess & obsolete inventory (82,100 ) (93,045 ) Inventory, net $ 444,352 $ 327,109 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: Schedule of Property and Equipment June 30, December 31, 2021 2020 Furniture and equipment $ 296,851 $ 398,422 Vehicles 15,000 15,000 Leasehold improvements 215,193 215,193 527,044 628,615 Accumulated depreciation (410,429 ) (480,883 ) Property and equipment, net $ 116,615 $ 147,732 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following: Schedule of Accounts Payable and Accrued Liabilities June 30, December 31, 2021 2020 Accounts payable $ 1,090,806 $ 918,639 Sales commissions payable 81,287 48,263 Accrued payroll liabilities 293,929 288,071 Product warranty accrual 154,103 173,365 Other accrued expenses 289,419 356,623 Total $ 1,909,544 $ 1,784,961 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Restricted Stock Units Activity | A summary of the RSUs awarded to employees, directors and consultants under the 2017 Equity Plan during the six months ended June 30, 2021, are presented in the table below: Schedule of Restricted Stock Units Activity 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, June 30, 2021 - - $ - |
2017 Equity Incentive Plan [Member] | Employees and Consultants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
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 six months ended June 30, 2021, are presented in the table below: Schedule of Stock Option Activity 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 3,035,800 $ 0.085 10.0 $ - Exercised - Forfeited - Expired - Outstanding, June 30, 2021 17,286,800 $ 0.084 8.1 $ - Exercisable, June 30, 2021 15,536,800 $ 0.086 7.9 $ - |
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 June 30, 2021, are presented in the table below: Summary of Non-vested Non-qualified Stock Option Activity Number of Options Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Grant-Date Fair Value Nonvested, December 31, 2020 - $ - $ - $ - Granted 3,035,800 $ 0.082 $ - $ 248,678 Vested (1,285,800 ) $ 0.112 $ - $ 143,878 Forfeited - $ - Expired - $ - Nonvested, June 30, 2021 1,750,000 $ 0.061 $ 6,125 $ 104,800 |
2017 Equity Incentive Plan [Member] | Directors [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Stock Option Activity | A summary of the non-qualified stock options granted to directors under the 2017 Equity Plan during the six months ended June 30, 2021, are presented in the table below: Schedule of Stock Option Activity 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 $ - Granted - Exercised - Forfeited/Cancelled - Expired - Outstanding, June 30, 2021 7,400,000 $ 0.067 7.0 $ - Exerciseable, June 30, 2021 7,400,000 $ 0.067 7.0 $ - |
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 six months ended June 30, 2021, are presented in the table below: Summary of Non-vested Non-qualified Stock Option Activity 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 $ 35,500 $ 29,000 Granted - Vested (1,000,000 ) $ 0.029 $ (29,000 ) Forfeited - Expired - Nonvested, June 30, 2021 - $ - $ - |
Warrants (Tables)
Warrants (Tables) | 6 Months Ended |
Jun. 30, 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 six months ended June 30, 2021: Schedule of Outstanding Warrants to Purchase Common Stock Number Weighted Average Exercise Weighted Average Remaining Life Aggregate Intrincic Outstanding Price In Months Value Outstanding at December 31, 2020 7,562,500 $ 0.25 6 $ 0 Issued - - - - Exercised - - - - Expired (7,562,500 ) $ 0.03 - $ 0 Outstanding at June 30, 2021 0 $ 0.00 0 $ 0 |
Schedule of Remaining Performan
Schedule of Remaining Performance Obligations Expected to be Recognized (Details) | Jun. 30, 2021USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Remaining performance obligations related to engineering only paid contracts | $ 2,038,000 |
Remaining performance obligations related to partial equipment paid contracts | 5,949,000 |
Total remaining performance obligations | 7,987,000 |
2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Remaining performance obligations related to engineering only paid contracts | 762,000 |
Remaining performance obligations related to partial equipment paid contracts | 5,943,000 |
Total remaining performance obligations | 6,705,000 |
2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Remaining performance obligations related to engineering only paid contracts | 1,276,000 |
Remaining performance obligations related to partial equipment paid contracts | 6,000 |
Total remaining performance obligations | $ 1,282,000 |
Schedule of Revenue by Source (
Schedule of Revenue by Source (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Product Information [Line Items] | ||||
Total revenue | $ 4,509,505 | $ 1,682,424 | $ 6,876,034 | $ 3,492,349 |
Equipment and Systems Sales [Member] | ||||
Product Information [Line Items] | ||||
Total revenue | 4,245,897 | 1,486,948 | 6,409,365 | 3,093,894 |
Engineering and Other Services [Member] | ||||
Product Information [Line Items] | ||||
Total revenue | 172,648 | 157,086 | 353,731 | 288,677 |
Shipping and Handling [Member] | ||||
Product Information [Line Items] | ||||
Total revenue | $ 90,960 | $ 38,390 | $ 112,938 | $ 109,778 |
Schedule of Share-based Compens
Schedule of Share-based Compensation Costs (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Total share-based compensation expense included in consolidated statement of operations | $ 71,557 | $ 107,342 | $ 130,693 | $ 298,231 |
Cost of Sales [Member] | ||||
Total share-based compensation expense included in consolidated statement of operations | 15,809 | 8,558 | 29,944 | 17,116 |
Advertising and Marketing Expenses [Member] | ||||
Total share-based compensation expense included in consolidated statement of operations | 6,818 | 2,088 | 13,292 | 5,000 |
Product Development Costs [Member] | ||||
Total share-based compensation expense included in consolidated statement of operations | 7,335 | 4,343 | 14,029 | 10,888 |
Selling, General and Administrative Expenses [Member] | ||||
Total share-based compensation expense included in consolidated statement of operations | $ 41,595 | $ 92,353 | $ 73,428 | $ 265,227 |
General (Details Narrative)
General (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Product Information [Line Items] | ||||
Cash balance transferred to bank account | $ 180,000 | $ 180,000 | ||
Restricted cash | $ 0 | $ 0 | ||
Potential common stock | 3,379,152 | |||
Potentially dilutive equity instruments that are convertible into common stock | 24,686,800 | 45,819,600 | ||
Impairment of goodwill | $ 0 | |||
Revenue recognized | $ 1,193,251 | $ 205,170 | 3,073,616 | $ 1,064,875 |
Remaining performance obligations | $ 7,987,000 | $ 7,987,000 | ||
Remaining performance obligations, percentage | 26.00% | 26.00% | ||
Expected term | 10 years | |||
Share based compensation expense | $ 71,557 | $ 107,342 | $ 130,693 | $ 298,231 |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer One [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk percentage | 28.00% | 21.00% | 18.00% | 16.00% |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Two [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk percentage | 27.00% | 21.00% | 18.00% | 10.00% |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Three [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk percentage | 11.00% | 15.00% | 13.00% | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer One [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk percentage | 77.00% | 41.00% | ||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Two [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk percentage | 11.00% | 35.00% | ||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Three [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk percentage | 19.00% | |||
2021 Incentive Awards [Member] | ||||
Product Information [Line Items] | ||||
Share based compensation expense | $ 56,151 | $ 33,436 | $ 108,945 | $ 69,897 |
Minimum [Member] | ||||
Product Information [Line Items] | ||||
Expected stock price volatility | 151.68% | |||
Risk-free interest rate | 1.20% | |||
Maximum [Member] | ||||
Product Information [Line Items] | ||||
Expected stock price volatility | 152.51% | |||
Risk-free interest rate | 1.49% | |||
2022 [Member] | ||||
Product Information [Line Items] | ||||
Remaining performance obligations | 1,282,000 | $ 1,282,000 | ||
Customer Contracts [Member] | ||||
Product Information [Line Items] | ||||
Remaining performance obligations | $ 2,038,000 | $ 2,038,000 |
Schedule of Lease Cost (Details
Schedule of Lease Cost (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Leases | ||
Operating lease cost | $ 108,444 | |
Operating cash outflow from operating lease | 139,688 | |
Operating lease right-of-use asset | 245,037 | $ 343,950 |
Operating lease liability, current | 261,187 | 266,105 |
Operating lease liability, long-term | $ 43,881 | $ 169,119 |
Remaining lease term | 1 year 2 months 12 days | |
Discount rate | 5.00% |
Schedule of Future Annual Minim
Schedule of Future Annual Minimum Lease Payments (Details) | Jun. 30, 2021USD ($) |
Leases | |
2021 (excluding the six months ended June 30, 2021) | $ 142,177 |
2022 | 170,891 |
Total minimum lease payments | 313,068 |
Less imputed interest | (8,000) |
Present value of minimum lease payments | $ 305,068 |
Leases (Details Narrative)
Leases (Details Narrative) | Jul. 01, 2021USD ($) | Apr. 30, 2021USD ($)ft² | Jun. 30, 2021USD ($) | Dec. 31, 2020USD ($) | Jan. 02, 2019USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Operating lease right-of-use asset | $ 245,037 | $ 343,950 | |||
Lease liability | $ 305,068 | ||||
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%. | ||||
Area of land | ft² | 6,900 | ||||
Rent expense | $ 5,989 | ||||
Subsequent Event [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Rent expense | $ 11,978 | ||||
Facility Lease [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Operating lease renewal term | 5 years | ||||
Accounting Standards Update 2016-02 [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Operating lease right-of-use asset | $ 714,416 | ||||
Lease liability | 822,374 | ||||
Unamortized amount of tenant improvement allowance | 81,481 | ||||
Accounting Standards Update 2016-02 [Member] | Maximum [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Tenant improvements | $ 100,000 |
Schedule of Inventory (Details)
Schedule of Inventory (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 321,171 | $ 201,778 |
Work in progress | 3,068 | 4,231 |
Raw materials | 202,213 | 214,145 |
Allowance for excess & obsolete inventory | (82,100) | (93,045) |
Inventory, net | $ 444,352 | $ 327,109 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Overhead expenses | $ 17,574 | $ 17,974 |
Prepaid inventory expenses | $ 1,873,000 | $ 916,000 |
Schedule of Property and Equipm
Schedule of Property and Equipment (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 527,044 | $ 628,615 |
Accumulated depreciation | (410,429) | (480,883) |
Property and equipment, net | 116,615 | 147,732 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 296,851 | 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 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | $ 36,891 | |||
Selling, general and administrative expenses | $ 886,758 | $ 710,536 | 1,627,231 | $ 1,819,529 |
Property, Plant and Equipment [Member] | Cost of Sales [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Selling, general and administrative expenses | 2,985 | |||
Property, Plant and Equipment [Member] | Inventory [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Selling, general and administrative expenses | $ 746 |
Schedule of Accounts Payable an
Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 1,090,806 | $ 918,639 |
Sales commissions payable | 81,287 | 48,263 |
Accrued payroll liabilities | 293,929 | 288,071 |
Product warranty accrual | 154,103 | 173,365 |
Other accrued expenses | 289,419 | 356,623 |
Total | $ 1,909,544 | $ 1,784,961 |
Note Payable and Accrued Inte_2
Note Payable and Accrued Interest (Details Narrative) - USD ($) | Feb. 10, 2021 | Jun. 30, 2021 | Jun. 30, 2021 |
Debt Disclosure [Abstract] | |||
Loan principal amount | $ 514,200 | ||
Loan interest rate | 1.00% | ||
Loan due date | Feb. 5, 2026 | ||
Accrued interest | $ 1,254 | $ 1,972 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Mar. 30, 2021 | Jun. 09, 2020 | Mar. 09, 2020 | Jun. 30, 2021 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Obligate to pay for dispute | $ 40,000 | ||||
Aggregate common shares issued upon execution of settlement | 1,000,000 | ||||
Other expenses | $ 107,000 | ||||
Payment of settlement | 20,000 | ||||
Settlement by cash | 40,000 | ||||
Accounts payables and accruals | $ 20,000 | ||||
Stock issuance, shares | 1,000,000 | ||||
Stock issuance, value | $ 67,000 | ||||
Former Employee [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Interim awarded value | $ 33,985 | ||||
Restricted stock units shares issued interest percentage | 8.00% | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of units, vested but not settled | 6,750,000 | ||||
Number of units, vested and settled | 6,750,000 | ||||
Interim awarded value | $ 10,000 |
Schedule of Stock Option Activi
Schedule of Stock Option Activity (Details) - USD ($) | Jun. 24, 2020 | Jun. 30, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate Intrinsic Value, Granted | ||
2017 Equity Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted Average Remaining Contractual Term, Outstanding Beginning | 3 years | |
2017 Equity Incentive Plan [Member] | Directors [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Granted | ||
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, Outstanding Beginning | 7,400,000 | |
Weighted Average Exercise Price, Outstanding Beginning | $ 0.067 | |
Weighted Average Remaining Contractual Term, Outstanding Beginning | 5 years | 7 years 6 months |
Aggregate Intrinsic Value, Outstanding Beginning | ||
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 | |
Weighted Average Exercise Price, Outstanding Ending | $ 0.067 | |
Weighted Average Remaining Contractual Term, Outstanding Ending | 7 years | |
Aggregate Intrinsic Value, Outstanding Ending | ||
Number of Options, Exercisable Ending | 7,400,000 | |
Weighted Average Exercise Price, Exercisable Ending | $ 0.067 | |
Weighted Average Remaining Contractual Term, Exercisable Ending | 7 years | |
Aggregate Intrinsic Value, Exercisable Ending | ||
2017 Equity Incentive Plan [Member] | Employees and Consultants [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Granted | 3,035,800 | |
2017 Equity Incentive Plan [Member] | 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 | |
Weighted Average Exercise Price, Outstanding Beginning | $ 0.083 | |
Weighted Average Remaining Contractual Term, Outstanding Beginning | 8 years 3 months 18 days | |
Aggregate Intrinsic Value, Outstanding Beginning | ||
Number of Options, Granted | 3,035,800 | |
Weighted Average Exercise Price, Granted | $ 0.085 | |
Weighted Average Remaining Contractual Term, Granted | 10 years | |
Number of Options, Exercised | ||
Number of Options, Forfeited/Cancelled | ||
Number of Options, Expired | ||
Number of Options, Outstanding Ending | 17,286,800 | |
Weighted Average Exercise Price, Outstanding Ending | $ 0.084 | |
Weighted Average Remaining Contractual Term, Outstanding Ending | 8 years 1 month 6 days | |
Aggregate Intrinsic Value, Outstanding Ending | ||
Number of Options, Exercisable Ending | 15,536,800 | |
Weighted Average Exercise Price, Exercisable Ending | $ 0.086 | |
Weighted Average Remaining Contractual Term, Exercisable Ending | 7 years 10 months 24 days | |
Aggregate Intrinsic Value, Exercisable Ending |
Summary of Non-vested Non-quali
Summary of Non-vested Non-qualified Stock Option Activity (Details) - 2017 Equity Incentive Plan [Member] | 6 Months Ended |
Jun. 30, 2021USD ($)$ / sharesshares | |
Directors [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Options Nonvested, Beginning | shares | 1,000,000 |
Weighted Average Grant-Date Fair Value, Beginning | $ / shares | $ 0.029 |
Aggregated Intrinsic Value, Nonvested Beginning | $ 35,500 |
Grant Date Fair Value Nonvested, Beginning | $ 29,000 |
Number of Options Nonvested, Granted | shares | |
Number of Options Nonvested, Vested | shares | (1,000,000) |
Weighted Average Grant-Date Fair Value, Vested | $ / shares | $ 0.029 |
Grant Date Fair Value Nonvested, Vested | $ (29,000) |
Number of Options Nonvested, Forfeited | shares | |
Number of Options Nonvested, Expired | shares | |
Number of Options Nonvested, Ending | shares | |
Aggregated Intrinsic Value, Nonvested Ending | |
Grant Date Fair Value Nonvested, Ending | |
Employees and Consultants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Options Nonvested, Beginning | shares | |
Weighted Average Grant-Date Fair Value, Beginning | $ / shares | |
Aggregated Intrinsic Value, Nonvested Beginning | |
Grant Date Fair Value Nonvested, Beginning | |
Number of Options Nonvested, Granted | shares | 3,035,800 |
Weighted Average Grant-Date Fair Value, Granted | $ / shares | $ 0.082 |
Grant Date Fair Value Nonvested, Granted | $ 248,678 |
Number of Options Nonvested, Vested | shares | (1,285,800) |
Weighted Average Grant-Date Fair Value, Vested | $ / shares | $ 0.112 |
Grant Date Fair Value Nonvested, Vested | $ 143,878 |
Number of Options Nonvested, Forfeited | shares | |
Grant Date Fair Value Nonvested, Forfeited | |
Number of Options Nonvested, Expired | shares | |
Grant Date Fair Value Nonvested, Expired | |
Number of Options Nonvested, Ending | shares | 1,750,000 |
Weighted Average Grant-Date Fair Value, Ending | $ / shares | $ 0.061 |
Aggregated Intrinsic Value, Nonvested Ending | $ 6,125 |
Grant Date Fair Value Nonvested, Ending | $ 104,800 |
Schedule of Restricted Stock Un
Schedule of Restricted Stock Units Activity (Details) - 2017 Equity Incentive Plan [Member] - Employees, Directors and Consultants [Member] | 6 Months Ended |
Jun. 30, 2021USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Units, beginning | shares | |
Weighted Average Grant Date Fair Value, beginning | $ / shares | |
Aggregated Intrinsic Value, Outstanding beginning | $ | |
Number of Units, Granted | shares | |
Weighted Average Grant Date Fair Value, Granted | $ / shares | |
Number of Units, Vested and settled with share issuance | shares | |
Weighted Average Grant Date Fair Value, Vested and settled with share issuance | $ / shares | |
Number of Units, Forfeited/canceled | shares | |
Weighted Average Grant Date Fair Value, Forfeited/canceled | $ / shares | |
Number of Units, ending | shares | |
Weighted Average Grant Date Fair Value, ending | $ / shares | |
Aggregated Intrinsic Value, Outstanding ending | $ |
Equity Incentive Plans (Details
Equity Incentive Plans (Details Narrative) - USD ($) | Jun. 24, 2020 | Apr. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Mar. 22, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of share awards granted | 24,553,818 | ||||
Share based compensation expense | $ 21,748 | $ 731,797 | |||
Non-qualified Stock Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of share awards granted | 3,035,800 | ||||
Non-qualified Stock Options [Member] | Chief Financial Officer [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Non-qualified stock options term | 10 years | ||||
Number of options granted during the period | 2,000,000 | ||||
Exercise price of stock options | $ 0.061 | ||||
Number of options vested | 250,000 | ||||
Non-qualified Stock Options [Member] | Chief Financial Officer [Member] | June 30, 2022 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of options vested | 417,000 | ||||
Non-qualified Stock Options [Member] | Chief Financial Officer [Member] | June 30, 2023 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of options vested | 665,000 | ||||
Non-qualified Stock Options [Member] | Chief Financial Officer [Member] | June 30, 2024 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of options vested | 668,000 | ||||
Non-qualified Stock Options [Member] | 21 Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Non-qualified stock options term | 10 years | ||||
Number of options granted during the period | 1,035,800 | ||||
Exercise price of stock options | $ 0.13 | ||||
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 | 25,163 | |||
2017 Equity 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] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of common stock shares issuance | 50,000,000 | ||||
Number of share awards granted | 24,686,800 | ||||
Number of shares authorized | 50,000,000 | ||||
Shares remain available for future | 759,382 | ||||
Share based compensation expense | $ 104,800 | ||||
Non-qualified stock options term | 3 years | ||||
2017 Equity Incentive Plan [Member] | Director [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation expense | $ 6,412 | $ 49,488 | |||
Number of options vested | 1,000,000 | 1,521,352 | |||
2017 Equity Incentive Plan [Member] | Directors [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of options vested | 1,000,000 | ||||
2017 Equity Incentive Plan [Member] | Employees and Consultants [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of options vested | 1,285,800 | ||||
2017 Equity Incentive Plan [Member] | Non-qualified Stock Options [Member] | Directors [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Non-qualified stock options term | 5 years | 7 years 6 months | |||
Number of options granted during the period | 2,000,000 | ||||
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 | $ 15,336 | $ 153,680 | |||
Non-qualified stock options term | 8 years 3 months 18 days |
Schedule of Outstanding Warrant
Schedule of Outstanding Warrants to Purchase Common Stock (Details) | 6 Months Ended |
Jun. 30, 2021USD ($)$ / sharesshares | |
Warrants | |
Warrants Outstanding, Beginning Balance | shares | 7,562,500 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 0.25 |
Weighted Average Life of Outstanding Warrants in Months, Beginning Balance | 6 months |
Aggregate Intrinsic Value, Beginning Balance | $ | $ 0 |
Warrants, Issued | shares | |
Weighted Average Exercise Price, Issued | $ / shares | |
Aggregate Intrinsic Value, Issued | $ | |
Warrants, Exercised | shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Aggregate Intrinsic Value, Exercised | $ | |
Warrants, Expired | shares | (7,562,500) |
Weighted Average Exercise Price, Expired | $ / shares | $ 0.03 |
Aggregate Intrinsic Value, Expired | $ | $ 0 |
Warrants Outstanding, Ending Balance | shares | 0 |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 0 |
Weighted Average Life of Outstanding Warrants in Months, Ending Balance | 0 months |
Aggregate Intrinsic Value, Ending Balance | $ | $ 0 |
Warrants (Details Narrative)
Warrants (Details Narrative) | 6 Months Ended |
Jun. 30, 2021shares | |
Warrants | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Expirations | 75,625,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Income Tax Disclosure [Abstract] | |
Net operating loss carry forward amount | $ 19,850,000 |
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 | three-year period |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - ft² | Jul. 28, 2021 | Jul. 27, 2021 | Apr. 30, 2021 |
Subsequent Event [Line Items] | |||
Area of land | 6,900 | ||
Subsequent Event [Member] | Lease Termination Agreement [Member] | |||
Subsequent Event [Line Items] | |||
Area of land | 11,491 | 18,952 | |
Lease expire date | Jan. 31, 2027 | Aug. 31, 2022 |