Cover
Cover | 9 Months Ended |
Sep. 30, 2021 | |
Cover [Abstract] | |
Document Type | S-1/A |
Amendment Flag | true |
Amendment Description | AMENDMENT NO. 1 |
Entity Registrant Name | CEA Industries Inc. |
Entity Central Index Key | 0001482541 |
Entity Tax Identification Number | 27-3911608 |
Entity Incorporation, State or Country Code | NV |
Entity Address, Address Line One | 385 South Pierce Avenue |
Entity Address, Address Line Two | Suite C |
Entity Address, City or Town | Louisville, |
Entity Address, State or Province | CO |
Entity Address, Postal Zip Code | 80027 |
City Area Code | (303) |
Local Phone Number | 993-5271 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets | |||
Cash and cash equivalents | $ 2,283,879 | $ 2,284,881 | $ 922,177 |
Accounts receivable (net of allowance for doubtful accounts of $186,073 and $165,098, respectively) | 32,245 | 33,480 | 138,357 |
Inventory, net | 480,354 | 327,109 | 1,231,243 |
Prepaid expenses and other | 1,157,119 | 1,037,823 | 269,491 |
Total Current Assets | 3,953,597 | 3,683,293 | 2,561,268 |
Noncurrent Assets | |||
Property and equipment, net | 98,967 | 147,732 | 257,923 |
Goodwill | 631,064 | 631,064 | 631,064 |
Intangible assets, net | 6,792 | 7,227 | 11,930 |
Deposits | 24,183 | 51,000 | |
Operating lease right-of-use asset | 194,353 | 343,950 | 534,133 |
Total Noncurrent Assets | 955,359 | 1,129,973 | 1,486,050 |
TOTAL ASSETS | 4,908,956 | 4,813,266 | 4,047,318 |
CURRENT LIABILITIES | |||
Accounts payable and accrued liabilities | 1,674,088 | 1,784,961 | 1,832,959 |
Deferred revenue | 3,059,525 | 3,724,189 | 1,444,472 |
Accrued equity compensation | 108,945 | 128,434 | 503,466 |
Other liabilities | 37,078 | ||
Current portion of operating lease liability | 238,140 | 266,105 | 217,843 |
Total Current Liabilities | 5,117,776 | 5,903,689 | 3,998,740 |
NONCURRENT LIABILITIES | |||
Note payable and accrued interest | 517,468 | ||
Other liabilities | 37,078 | 74,156 | |
Operating lease liability, net of current portion | 169,119 | 404,209 | |
Total Noncurrent Liabilities | 554,546 | 243,275 | 404,209 |
TOTAL LIABILITIES | 5,672,322 | 6,146,964 | 4,402,949 |
Commitments and Contingencies (Note 7) | |||
TEMPORARY EQUITY | |||
Series B Redeemable Convertible Preferred Stock, $0.00001 par value; 3,300 and 0 issued and outstanding, respectively | 3,960,000 | ||
Series B Redeemable Convertible Preferred Stock Subscription Receivable | (1,365,000) | ||
Series B Redeemable Convertible Preferred Stock Accrued Dividends | 1,447 | ||
Total Temporary Equity | 2,596,447 | ||
SHAREHOLDERS’ DEFICIT | |||
Preferred stock; 150,000,000 shares authorized Series A Preferred stock, $0.00001 par value; 42,030,331 shares issued and outstanding | 420 | 420 | 420 |
Common stock, $0.00001 par value; 350,000,000 shares authorized; 1,583,511 and 1,576,844 shares issued and outstanding, respectively | 16 | 16 | 15 |
Additional paid in capital | 25,019,425 | 26,109,509 | 25,328,861 |
Accumulated deficit | (28,379,674) | (27,443,643) | (25,684,927) |
Total Shareholders’ Deficit | (3,359,813) | (1,333,698) | (355,631) |
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT | $ 4,908,956 | $ 4,813,266 | $ 4,047,318 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | |||
Accounts Receivable, Allowance for Credit Loss, Current | $ 186,073 | $ 165,098 | $ 151,673 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 |
Preferred Stock, Shares Authorized | 150,000,000 | 150,000,000 | 150,000,000 |
Preferred Stock, Shares Issued | 42,030,331 | 42,030,331 | 42,030,331 |
Preferred Stock, Shares Outstanding | 42,030,331 | 42,030,331 | 42,030,331 |
Common stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 |
Common Stock, Shares Authorized | 350,000,000 | 350,000,000 | 350,000,000 |
Common Stock, Shares, Issued | 1,583,511 | 1,576,844 | 1,521,444 |
Common Stock, Shares, Outstanding | 1,583,511 | 1,576,844 | 1,521,444 |
Temporary Equity, Par or Stated Value Per Share | $ 0.00001 | ||
Temporary Equity, Shares Issued | 3,300 | ||
Temporary Equity, Shares Outstanding | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||||||
Revenue, net | $ 3,706,436 | $ 1,634,669 | $ 10,582,470 | $ 5,127,018 | $ 8,514,272 | $ 15,224,454 |
Cost of revenue | 2,959,264 | 1,108,758 | 8,208,368 | 3,869,758 | 6,961,305 | 10,675,601 |
Gross profit | 747,172 | 525,911 | 2,374,102 | 1,257,260 | 1,552,967 | 4,548,853 |
Operating expenses: | ||||||
Advertising and marketing expenses | 224,393 | 89,695 | 569,580 | 333,669 | 430,012 | 675,703 |
Product development costs | 98,623 | 84,433 | 322,807 | 304,229 | 390,229 | 521,044 |
Selling, general and administrative expenses | 866,699 | 634,447 | 2,493,930 | 2,453,976 | 3,095,350 | 4,662,695 |
Total operating expenses | 1,189,715 | 808,575 | 3,386,317 | 3,091,874 | 3,915,591 | 5,859,442 |
Operating loss | (442,543) | (282,664) | (1,012,215) | (1,834,614) | (2,362,624) | (1,310,589) |
Other income (expense): | ||||||
Other income (expense), net | 35,934 | 13,621 | 79,452 | 29,018 | 621,340 | (27,977) |
Interest expense | (1,296) | (1,396) | (3,268) | (16,673) | (17,432) | |
Total other income (expense) | 34,638 | 12,225 | 76,184 | 12,345 | 603,908 | (27,977) |
Loss before provision for income taxes | (407,905) | (270,439) | (936,031) | (1,822,269) | (1,758,716) | (1,338,566) |
Income taxes | ||||||
Net loss | (407,905) | (270,439) | (936,031) | (1,822,269) | $ (1,758,716) | $ (1,338,566) |
Convertible Preferred Series B Stock Redemption Value Adjustment | (2,262,847) | (2,262,847) | ||||
Convertible Preferred Series B Stock Dividends | (1,447) | (1,447) | ||||
Net Loss Available to Common Shareholders | $ (2,672,199) | $ (270,439) | $ (3,200,325) | $ (1,822,269) | ||
Loss per common share – basic and dilutive | $ (1.69) | $ (0.17) | $ (2.02) | $ (1.16) | $ (1.12) | $ (0.88) |
Weighted average number of common shares outstanding, basic and dilutive | 1,583,511 | 1,576,844 | 1,581,142 | 1,564,746 | 1,574,454 | 1,517,748 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Shareholders' Deficit - USD ($) | Preferred Stock [Member] | Preferred Stock [Member]Series A Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total | ||
Beginning balance, value at Dec. 31, 2018 | $ 420 | $ 15 | $ 24,540,262 | $ (24,346,361) | $ 194,336 | |||
Beginning balance, shares at Dec. 31, 2018 | 42,030,331 | 1,499,932 | ||||||
Beginning balance, shares to be issued at Dec. 31, 2018 | 6,667 | |||||||
Common shares issued on settlement of restricted stock units and award of stock bonuses, vested restricted stock units canceled | [1] | [1] | ||||||
Common shares issued on settlement of restricted stock units and award of stock bonuses, vested restricted stock units canceled, shares | 14,933 | |||||||
Common shares issued on settlement of restricted stock units and award of stock bonuses, vested restricted stock units canceled, shares to be issued | 3,733 | |||||||
Stock Issued During Period, Value, Issued for Services | [1] | 75,000 | 75,000 | |||||
Common shares issued as compensation for services, shares | 6,579 | |||||||
Fair value of vested restricted stock units awarded to employees | 278,906 | 278,906 | ||||||
Fair value of vested stock options granted to employees and directors | 390,484 | 390,484 | ||||||
Fair value of vested incentive stock bonuses awarded to employees | 44,209 | 44,209 | ||||||
Net loss | (1,338,566) | (1,338,566) | ||||||
Ending balance, value at Dec. 31, 2019 | $ 420 | $ 420 | $ 15 | 25,328,861 | (25,684,927) | (355,631) | ||
Ending balance, shares at Dec. 31, 2019 | 42,030,331 | 42,030,331 | 1,521,444 | |||||
Ending balance, shares to be issued at Dec. 31, 2019 | 10,400 | |||||||
Common shares issued or to be issued on settlement of restricted stock units and award of stock bonuses, shares to be issued | (10,400) | |||||||
Fair value of vested stock options accrued in 2019 and issued to employees and directors in 2020 | 503,466 | 503,466 | ||||||
Common shares issued in settlement of restricted stock units and award of stock bonuses | $ 1 | (1) | ||||||
Common shares issued in settlement of restricted stock units and award of stock bonuses, shares | 55,400 | |||||||
Fair value of vested restricted stock units awarded to employees | 25,163 | 25,163 | ||||||
Fair value of vested stock options granted to employees and directors | 227,594 | 227,594 | ||||||
Net loss | (1,822,269) | (1,822,269) | ||||||
Ending balance, value at Sep. 30, 2020 | $ 420 | $ 16 | 26,085,083 | (27,507,196) | (1,421,677) | |||
Ending balance, shares at Sep. 30, 2020 | 42,030,331 | 1,576,844 | ||||||
Ending balance, shares to be issued at Sep. 30, 2020 | ||||||||
Beginning balance, value at Dec. 31, 2019 | $ 420 | $ 420 | $ 15 | 25,328,861 | (25,684,927) | (355,631) | ||
Beginning balance, shares at Dec. 31, 2019 | 42,030,331 | 42,030,331 | 1,521,444 | |||||
Beginning balance, shares to be issued at Dec. 31, 2019 | 10,400 | |||||||
Common shares issued or to be issued on settlement of restricted stock units and award of stock bonuses | $ 1 | (1) | ||||||
Common shares issued or to be issued on settlement of restricted stock units and award of stock bonuses, shares | 55,400 | |||||||
Common shares issued or to be issued on settlement of restricted stock units and award of stock bonuses, shares to be issued | (10,400) | |||||||
Fair value of vested stock options accrued in 2019 and issued to employees and directors in 2020 | 503,466 | 503,466 | ||||||
Fair value of vested restricted stock units awarded to employees | 25,163 | 25,163 | ||||||
Fair value of vested stock options granted to employees and directors | 252,020 | 252,020 | ||||||
Net loss | (1,758,716) | (1,758,716) | ||||||
Ending balance, value at Dec. 31, 2020 | $ 420 | $ 420 | $ 16 | 26,109,509 | (27,443,643) | (1,333,698) | ||
Ending balance, shares at Dec. 31, 2020 | 42,030,331 | 42,030,331 | 1,576,844 | |||||
Ending balance, shares to be issued at Dec. 31, 2020 | ||||||||
Beginning balance, value at Jun. 30, 2020 | $ 420 | $ 16 | 26,060,657 | (27,236,757) | (1,175,664) | |||
Beginning balance, shares at Jun. 30, 2020 | 42,030,331 | 1,576,844 | ||||||
Beginning balance, shares to be issued at Jun. 30, 2020 | ||||||||
Common shares issued or to be issued on settlement of restricted stock units and award of stock bonuses | ||||||||
Common shares issued or to be issued on settlement of restricted stock units and award of stock bonuses, shares to be issued | ||||||||
Fair value of vested stock options granted to employees and directors | 24,426 | 24,426 | ||||||
Net loss | (270,439) | (270,439) | ||||||
Ending balance, value at Sep. 30, 2020 | $ 420 | $ 16 | 26,085,083 | (27,507,196) | (1,421,677) | |||
Ending balance, shares at Sep. 30, 2020 | 42,030,331 | 1,576,844 | ||||||
Ending balance, shares to be issued at Sep. 30, 2020 | ||||||||
Beginning balance, value at Dec. 31, 2020 | $ 420 | $ 420 | $ 16 | 26,109,509 | (27,443,643) | (1,333,698) | ||
Beginning balance, shares at Dec. 31, 2020 | 42,030,331 | 42,030,331 | 1,576,844 | |||||
Beginning balance, shares to be issued at Dec. 31, 2020 | ||||||||
Common shares issued in settlement of legal dispute | 67,000 | 67,000 | ||||||
Common shares to be issued in settlement of legal dispute, shares | 6,667 | |||||||
Fair value of vested stock options granted to employees | 158,315 | 158,315 | ||||||
Fair value of vested stock options granted to directors | 21,174 | 21,174 | ||||||
Issuance of series B preferred stock and warrants, net | 927,721 | 927,721 | ||||||
Accrued dividends | (1,447) | (1,447) | ||||||
Adjustment to redemption value | (2,262,847) | (2,262,847) | ||||||
Net loss | (936,031) | (936,031) | ||||||
Ending balance, value at Sep. 30, 2021 | $ 420 | $ 16 | 25,019,425 | (28,379,674) | (3,359,813) | |||
Ending balance, shares at Sep. 30, 2021 | 42,030,331 | 1,583,511 | ||||||
Ending balance, shares to be issued at Sep. 30, 2021 | ||||||||
Beginning balance, value at Jun. 30, 2021 | $ 420 | $ 16 | 26,326,691 | (27,971,769) | (1,644,642) | |||
Beginning balance, shares at Jun. 30, 2021 | 42,030,331 | 1,583,511 | ||||||
Beginning balance, shares to be issued at Jun. 30, 2021 | ||||||||
Fair value of vested stock options granted to employees | 14,545 | 14,545 | ||||||
Fair value of vested stock options granted to directors | 14,762 | 14,762 | ||||||
Issuance of series B preferred stock and warrants, net | 927,721 | 927,721 | ||||||
Accrued dividends | (1,447) | (1,447) | ||||||
Adjustment to redemption value | (2,262,847) | (2,262,847) | ||||||
Net loss | (407,905) | (407,905) | ||||||
Ending balance, value at Sep. 30, 2021 | $ 420 | $ 16 | $ 25,019,425 | $ (28,379,674) | $ (3,359,813) | |||
Ending balance, shares at Sep. 30, 2021 | 42,030,331 | 1,583,511 | ||||||
Ending balance, shares to be issued at Sep. 30, 2021 | ||||||||
[1] | represents an amount less than $1. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash Flows From Operating Activities: | ||||
Net loss | $ (936,031) | $ (1,822,269) | $ (1,758,716) | $ (1,338,566) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||
Depreciation and intangible asset amortization expense | 54,973 | 90,867 | 120,103 | 161,180 |
Gain on forgiveness of note payable | (557,203) | |||
Share-based compensation | 51,055 | 252,757 | 277,183 | 788,599 |
Common stock issued for other expense | 67,000 | |||
Provision for doubtful accounts | 20,975 | 13,150 | 13,425 | 32,651 |
Provision for excess and obsolete inventory | (13,764) | (5,117) | 21,669 | (223,971) |
Loss on disposal of assets | 8,042 | 4,124 | 4,124 | 115,359 |
Amortization of ROU asset | 149,597 | 141,871 | 190,183 | |
Changes in operating assets and liabilities: | ||||
Accounts receivable | (19,740) | 27,950 | 91,452 | 39,179 |
Inventory | (139,481) | 714,709 | 882,466 | (71,386) |
Prepaid expenses and other | (119,296) | (488,007) | (768,333) | (141,143) |
Accounts payable and accrued liabilities | (110,872) | (397,181) | 26,157 | 23,830 |
Deferred revenue | (664,663) | 2,044,830 | 2,279,717 | 802,674 |
Accrued interest | 3,268 | 3,203 | ||
Lease deposit | (24,183) | |||
Operating lease liability, net | (197,085) | (79,521) | (135,828) | (20,039) |
Accrued equity compensation | 108,945 | 101,472 | 128,434 | 503,466 |
Net cash (used in)/provided by operating activities | (1,761,260) | 599,635 | 818,036 | 671,833 |
Cash Flows From Investing Activities | ||||
Purchases of property and equipment | (15,316) | (3,500) | (9,332) | (3,043) |
Proceeds from the sale of property equipment | 1,500 | |||
Net cash used in investing activities | (13,816) | (3,500) | (9,332) | (3,043) |
Cash Flows From Financing Activities | ||||
Cash proceeds from sale of preferred stock and warrants, net of issuance costs | 1,259,874 | |||
Proceeds from issuance of note payable | 514,200 | 554,000 | 554,000 | |
Net cash provided by financing activities | 1,774,074 | 554,000 | 554,000 | |
Net change in cash and cash equivalents | (1,002) | 1,150,135 | 1,362,704 | 668,790 |
Cash and cash equivalents, beginning of period | 2,284,881 | 922,177 | 922,177 | 253,387 |
Cash and cash equivalents, end of period | 2,283,879 | 2,072,312 | 2,284,881 | 922,177 |
Non-cash investing and financing activities: | ||||
Interest paid | ||||
Income taxes paid | ||||
Supplemental cash flow information: | ||||
Adjustment of carrying value of series B preferred stock to redemption value | 2,262,847 | |||
Subscription receivable - series B preferred stock | 1,365,000 | |||
Options issued for accrued equity compensation | 128,434 | |||
Accrued dividends | $ 1,447 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Note 1 – Description of Business Surna Inc. (the “Company”) was incorporated in Nevada on October 15, 2009. 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 and hemp, some producers grow crops indoors in response to market dynamics or as part of their preferred farming practice. In service of the CEA industry, our principal technologies include: (i) liquid-based process cooling systems and other climate control systems, (ii) air handling equipment and systems, (iii) a full-service engineering package for designing and engineering commercial scale thermodynamic systems specific to cultivation facilities, and (iv) automation and control devices, systems and technologies used for environmental, lighting and climate control. Our customers include commercial, state- and provincial-regulated CEA growers in the U.S. and Canada as well as other international locations. Customers are those growers building new facilities and those expanding or retrofitting existing facilities. Currently, our revenue stream is derived primarily from supplying our products, services and technologies to commercial indoor facilities ranging from several thousand to more than 100,000 square feet. Headquartered in Boulder, Colorado, we leverage our experience in this space to bring value-added climate control solutions to our customers that help improve their overall crop quality and yield, optimize energy and water efficiency, and satisfy the evolving state and local codes, permitting and regulatory requirements. Although our customers do, we neither produce nor sell cannabis or its related products. Impact of the COVID-19 Pandemic on Our Business The impact of the government and the business economic response to the COVID-19 pandemic has affected demand across the majority of our markets and disrupted work on projects. The COVID-19 pandemic is expected to have continued adverse effects on our sales, project implementation, operating margins, and working capital. As of the date of this filing, uncertainty continues to exist concerning the magnitude and duration of the economic impact of the COVID-19 pandemic. In response to the COVID-19 pandemic and its changing conditions the Company reduced its operational expenses to conserve its cash resources. Many expenses, including travel, marketing, headcount, work hours, and compensation were reduced, deferred, or eliminated while still allowing us to meet our customer obligations and develop new business. As the fiscal year progressed and our sales rebounded, and we were able to obtain additional funds through a forgivable bank loan, we restored our workforce and compensation. Due to the speed with which the COVID-19 pandemic developed and the resulting uncertainties, including the depth and duration of the disruptions to customers and suppliers, its future effect on our business, on our results of operations, and on our financial condition, cannot be predicted. We expect that the economic disruptions will continue to have an effect on our business over the longer term. Despite this uncertainty, we continue to monitor costs and continue to take actions to reduce costs so as to mitigate the impact of the COVID-19 pandemic to the best of our ability, although they may not be sufficient in the long-run for us to avoid reduced sales, increased losses and reduced operating cash flows. Refer to Risk Factors |
Basis of Presentation; Summary
Basis of Presentation; Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Basis of Presentation; Summary of Significant Accounting Policies | Note 2 – Basis of Presentation; Summary of Significant Accounting Policies Financial Statement Presentation The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect reported amounts and related disclosures. As further discussed in Note 3 Going Concern Reverse Stock Split On January 17, 2022, the Company’s Board of Directors approved a reverse stock split at a ratio of one-for-one hundred and fifty. Such reverse stock split was implemented effective January 27, 2022. All Common Stock, warrants, options and per share amounts set forth herein are presented to give retroactive effect to the Reverse Split for all periods presented Surna Inc. Notes to Consolidated Financial Statements Principles of Consolidation The 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. 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 as it applies to impairment analysis, valuation of equity-based compensation, valuation of deferred tax assets and liabilities, warranty accruals, inventory allowances, and legal contingencies. Cash and Cash Equivalents 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. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivables are recorded at the invoiced amount or based on revenue earned for items not yet invoiced, and generally do not bear interest. An allowance for doubtful accounts is established, as necessary, based on past experience and other factors, which, in management’s judgment, deserve current recognition in estimating bad debts. Based on the Company’s review, it establishes or adjusts the allowance for specific customers and the accounts receivable portfolio as a whole. As of December 31, 2020, and December 31, 2019, the allowance for doubtful accounts was $ 165,098 and $ 151,673 , respectively. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Inventory Inventory is stated at the lower of cost or net realizable value. The inventory is valued based on a first-in, first-out (“FIFO”) basis. Lower of cost or net realizable value is evaluated by considering obsolescence, excessive levels of inventory, deterioration and other factors. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolescence or impaired inventory. Excess and obsolete inventory is charged to cost of revenue and a new lower-cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. As of December 31, 2020, and December 31, 2019, the allowance for excess and obsolete inventory was $ 93,045 and $ 71,376 , respectively. Property and Equipment Property and equipment are stated at cost. For financial statement purposes, property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives, which is generally five years . Leasehold improvements are amortized on a straight-line basis over the lesser of their useful lives or the life of the lease. Upon sale or retirement of assets, the cost and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss is reflected in operations. Maintenance and repairs are charged to operations as incurred. Long-lived Assets Long-lived tangible assets, including property and equipment, are reviewed for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related asset’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. The Company has not identified any indicators of impairment during the years ended December 31, 2020 and 2019. Surna Inc. Notes to Consolidated Financial Statements Goodwill and Intangible Assets The Company recorded goodwill in connection with its acquisition of Hydro in July 2014. Goodwill is reviewed for impairment annually on December 31 st Separable identifiable intangibles consist of intellectual property such as patents and trademarks, and capitalized website costs. Except for trademarks, which are not amortized, the Company’s separable identifiable intangible assets are subject to amortization on a straight-line basis over their estimated useful lives. Trademarks are tested annually for impairment. Separable identifiable intangibles are also subject to evaluation for potential impairment if events or circumstances indicate the carrying value may not be recoverable. Fair Value Measurement The Company records its financial assets and liabilities at fair value. The accounting standard for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting standard establishes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 - inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 - inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 - inputs are unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. Due to their short-term nature, the carrying values of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses, approximate fair value. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses the Black-Scholes Option Pricing Model (the “Black-Scholes Model”) to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date. As of December 31, 2020, and December 31, 2019, there were no derivative financial instruments. Surna Inc. Notes to Consolidated Financial Statements Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 (Topic 606), Revenue from Contracts with Customers The following table sets forth the Company’s revenue by source: Schedule of Revenue by Source For the Years Ended December 31, 2020 2019 Equipment and systems sales $ 7,730,371 $ 13,692,863 Engineering and other services 568,131 1,239,130 Shipping and handling 215,770 292,461 Total revenue $ 8,514,272 $ 15,224,454 Revenue Recognition Accounting Policy Summary The Company accounts for revenue in accordance with ASC 606. 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. The Company does not provide construction services or system installation services. Some of the Company’s contracts with customers contain a single performance obligation, typically engineering only services contracts. 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 components 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 promise is fulfilled. Generally, satisfaction occurs when control of the promised goods is transferred to the customer or as services are rendered or completed in exchange for consideration in an amount for which the Company expects to be entitled. 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. Surna Inc. Notes to Consolidated Financial Statements Other Judgments and Assumptions The Company typically receives customer payments in advance of its performance of services or transfers of goods. 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. Contract Assets and Contract Liabilities Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. The Company receives payments from customers based on the terms established in its contracts. Contract assets include unbilled amounts where revenue recognized exceeds the amount billed to the customer and the right of payment is conditional, subject to completing a milestone, such as a phase of a project. The Company typically does not have material amounts of contract assets since revenue is recognized as control of goods are transferred or as services are performed. As of December 31, 2020, and 2019, the Company had no contract assets. Contract liabilities consist of advance payments in excess of revenue recognized. The Company’s contract liabilities are recorded as a current liability in deferred revenue in the consolidated balance sheets since the timing of when the Company expects to recognize revenue is generally less than one year. As of December 31, 2020, and December 31, 2019, deferred revenue, which was classified as a current liability, was $ 3,724,189 and $ 1,444,472 , respectively. For the year ended December 31, 2020, the Company recognized revenue of $ 1,103,447 related to the deferred revenue at January 1, 2020, or 76% . For the year ended December 31, 2019, the Company recognized revenue of $ 473,682 related to the deferred revenue at January 1, 2019, or 74% . Remaining Performance Obligations 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. Further, based on the current economic climate, the uncertainty regarding the COVID-19 virus, and the Company’s recent cost cutting measures, there is no assurance that the Company will be able to fulfill its backlog, and the Company may experience contract cancellations, project scope reductions and project delays. Surna Inc. Notes to Consolidated Financial Statements As of December 31, 2020, the Company’s remaining performance obligations, or backlog, was $ 8,448,000 , of which $ 2,643,000 , or 31% , was attributable to customer contracts for which the Company has only received an initial advance payment to cover the allocated value of the Company’s engineering services (“engineering only paid contracts”). There is the risk that the equipment portion of these engineering only paid contracts will not be completed or will be delayed. The reasons include the customer being dissatisfied with the quality or timeliness of the Company’s engineering services, delay or abandonment of the project because of the customer’s inability to obtain project financing or licensing, or other reasons such as a challenging business climate including an overall post-COVID-19 economic downturn, or change in business direction. After the customer has made an advance payment for a portion of the equipment to be delivered under the contract (“partial equipment paid contracts”), the Company is typically better able to estimate the timing of revenue recognition since the risks and delays associated with licensing, permitting and project funding are typically mitigated once the initial equipment payment is received. There is significant uncertainty regarding the timing of the Company’s recognition of revenue on its remaining performance obligations, and there is no certainty that these will result in actual revenues. The backlog at December 31, 2020, includes booked sales orders of $ 390,000 from several customers that the Company does not expect to be realized until 2022, if at all. Given the present economic uncertainty arising from the impact of the novel coronavirus COVID-19, the Company believes that several of its current contracts may be delayed or canceled. 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 $ 2,355,000 $ 288,000 $ 2,643,000 Remaining performance obligations related to partial equipment paid contracts 5,703,000 102,000 $ 5,805,000 Total remaining performance obligations $ 8,058,000 $ 390,000 $ 8,448,000 Product Warranty The Company warrants the products that it manufactures for a warranty period equal to the lesser of 12 months from start-up or 18 months from shipment. The Company’s warranty provides for the repair, rework, or replacement of products (at the Company’s option) that fail to perform within stated specification. The Company’s third-party suppliers also warrant their products under similar terms, which are passed through to the Company’s customers. The Company assesses the historical warranty claims on its manufactured products and, since 2016, warranty claims have been approximately 1% of annual revenue generated on these products. Based on the Company’s warranty policy, an accrual is established at 1% of the trailing 18 months revenue. The Company continues to assess the need to record a warranty reserve at the time of sale based on historical claims and other factors. As of December 31, 2020, and December 31, 2019, the Company had an accrued warranty reserve amount of $ 173,365 and $ 185,234 , respectively, which are included in accounts payable and accrued liabilities on the Company’s consolidated balance sheets. Cost of Sales Cost of sales includes product costs (material, direct labor and overhead costs), shipping and handling expense, outside engineering costs, engineering, project management and service salaries and benefits, client visits and warranty. Concentrations Three customers accounted for 28% , 11% and 10% of the Company’s revenue for the year ended December 31, 2020. One customer accounted for 44% of the Company’s revenue for the year ended December 31, 2019. The Company’s accounts receivable from two customers made up 48% and 38% , respectively, of the total balance as of December 31, 2020. The Company’s accounts receivable from three customers made up 59% , 16% , and 10% , respectively, of the total balance as of December 31, 2019. Three suppliers accounted for 27% , 25% and 12% of the Company’s purchases of inventory for the year ended December 31, 2020, and three suppliers accounted for 30% , 17% and 12% of the Company’s purchases of inventory for the year ended December 31, 2019. Surna Inc. Notes to Consolidated Financial Statements Product Development The Company expenses product development costs as incurred. Internal product development costs are expensed as incurred, and third-party product developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. For the years ended December 31, 2020 and December 31, 2019, the Company incurred $ 390,229 and $ 521,044 , respectively, on product development. 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 consolidated financial statements based on their grant date fair value. For awards subject to service conditions, compensation expense is recognized over the vesting period on a straight-line basis. Awards subject to performance conditions are attributed separately for each vesting tranche of the award and are recognized ratably from the service inception date to the vesting date for each tranche, based on the probability of vesting. The probability of awards with future performance conditions is evaluated each reporting period and compensation expense is adjusted based on the probability assessment. Awards are considered granted, and the service inception date begins, when mutual understanding of the key terms and conditions of the award between the Company and the recipient has been established. For awards that provide discretion to adjust the amount of the award, the service inception date for such awards could precede the grant date as a mutual understanding of the key terms and conditions of the award between the Company and the recipient has not yet been established. For awards in which the service inception date precedes the grant date, compensation cost is accrued beginning on the service inception date. Subsequent to December 31, 2020, the Company’s Board of Directors (the “Board”) approved annual incentive compensation awards to certain employees payable in non-qualified stock options, based on the Company’s performance and each employee’s contributions to such performance for the 2020 year. See Note 16. The non-qualified stock options were granted subsequent to December 31, 2020, were not subject to an additional service requirement and were immediately vested at the date of the grant. The final amount of the annual incentive compensation award, and number of non-qualified stock options granted, were determined, and communicated to the employee, subsequent to December 31, 2020. The estimated compensation expense of $ 128,434 related to the 2020 incentive awards was accrued as of December 31, 2020. Since such incentive awards will be settled in non-qualified stock options, the accrued compensation expense has been classified as a current liability until the number of non-qualified stock options is fixed pursuant to a grant by the Board. At that time, the incentive award becomes equity-classified. The grant date fair value of stock options is based on 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 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. Share-based compensation costs (including expenses from the accrued compensation liabilities related to the annual incentive awards subsequently settled in non-qualified stock options totaled $ 405,617 and $ 1,292,065 for the years ended December 31, 2020 and 2019, respectively. Such share-based compensation costs are classified in the Company’s consolidated financial statements in the same manner as if such compensation was paid in cash. Surna Inc. Notes to Consolidated Financial Statements The following is a summary of such share-based compensation costs included in the Company’s consolidated statements of operations for the years ended December 31, 2020 and 2019: Schedule of Share-based Compensation Costs For the Years Ended December 31, 2020 2019 Share-based compensation expense included in: Cost of revenue $ 31,006 $ 91,081 Advertising and marketing expenses 8,333 33,977 Product development costs 21,882 45,330 Selling, general and administrative expenses 344,396 1,121,677 Total share-based compensation expense included in consolidated statement of operations $ 405,617 $ 1,292,065 Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process in which: (i) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position, and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with the related tax authority. Basic and Diluted Net 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 periods when losses are reported 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. As of December 31, 2020, 194,757 potential common shares equivalents from warrants and options were excluded from the diluted EPS calculations as their effect is anti-dilutive. Commitments and Contingencies In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, customer disputes, government investigations and tax matters. An accrual for a loss contingency is recognized when it is probable that an asset had been impaired or a liability had been incurred and the amount of loss can be reasonably estimated. Other Risks and Uncertainties To achieve profitable operations, the Company must successfully develop, manufacture and market its products. There can be no assurance that any such products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products will be successfully marketed. These factors could have a material adverse effect upon the Company’s financial results, financial positi | |
Basis of Presentation; Summary of Significant Accounting Policies | Note 1 – General Basis of Presentation; Summary of Significant Accounting Policies Description of Business Surna Inc. (the “Company”) was incorporated in Nevada on October 15, 2009 and operates under the trade name of Surna Cultivation Technologies. We are headquartered in Boulder, Colorado. Surna Inc. is an engineering and design company focused on selling environmental control and other technologies and services to the Controlled Environment Agriculture (CEA) industry. We leverage our experience in this space to bring value-added technology solutions to our customers that help improve their overall crop quality and yield, optimize energy and water efficiency, and satisfy evolving state and local construction codes, permitting and regulatory requirements. In service of the CEA industry, our principal service and product offerings include: (i) architectural design and licensed engineering of commercial scale thermodynamic systems specific to cultivation facilities, (ii) liquid-based process cooling systems and other climate control systems, (iii) air handling equipment and systems, (iv) LED lighting, benching and racking solutions for indoor cultivation, (v) automation and control devices, systems and technologies used for environmental, lighting and climate control, and (vi) preventive maintenance services for CEA facilities. Our customers include commercial, state- and provincial-regulated CEA growers in the U.S. and Canada and 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 operating in the cannabis industry, ranging from several thousand to more than 100,000 square feet. Although most of 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 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, a general shortage of containers, and domestic truck driver availability. 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 September 30, 2021 (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 three and nine months ended September 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. Reverse Stock Split On January 17, 2022, the Company’s Board of Directors approved a reverse stock split at a ratio of one-for-one hundred and fifty. Such reverse stock split was implemented effective January 27, 2022. All Common Stock, warrants, options and per share amounts set forth herein are presented to give retroactive effect to the Reverse Split for all periods presented. 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 September 30, 2021 (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. 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 nine months ended September 30, 2021 and 2020, there were warrants and options outstanding to purchase Company common stock and shares of convertible preferred stock and restricted stock units that were convertible into shares of the Company’s common stock. During the three- and nine-month periods ended September 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. As of September 30, 2021, and 2020, there were respectively, 777,888 and 293,383 potentially dilutive equity instruments outstanding in respect of shares of convertible preferred stock and warrants and options outstanding to purchase Company common stock. Goodwill The Company recorded goodwill in connection with its acquisition of Hydro Innovations, LLC in July 2014. Goodwill is reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value of the reporting unit has been reduced to less than its carrying value. The Company performs a quantitative impairment test annually on December 31 by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is considered not impaired. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company determined that it has one reporting unit. During the nine months ended September 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 September 30, 2021 and concluded that no impairment relating to goodwill existed at September 30, 2021. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) Temporary Equity Shares of preferred stock that are redeemable for cash or other assets are classified as temporary equity if they are redeemable, at the option of the holder, at a fixed or determinable price on a fixed or determinable date or upon the occurrence of an event that is not solely within the control of the issuer. Redeemable equity instruments are initially carried at the fair value of the equity instrument at the issuance date, net of issuance costs, which is subsequently adjusted to redemption value (including the amount for dividends earned but not yet declared or paid) at each balance sheet date if the instrument is currently redeemable or if it is probable that the instrument will become redeemable. The Company determined it is probable the Series B Preferred Stock will become redeemable at the option of the holder. As a result, on September 30, 2021, the Company adjusted carrying value of the Series B Preferred Stock to its redemption value of $ 3,960,000 and recorded a $ 2,262,847 non-cash redemption value adjustment. This redemption value adjustment is treated as similar to a dividend on the preferred stock for GAAP purposes, accordingly, the redemption value adjustment is therefore added to the “Net Loss” to arrive at “Net Loss Attributable to Common Shareholders’” on the Company’s Consolidated Statements of Operations. In addition, as the Company does not have a balance of retained earnings, the redemption value adjustment was recorded against additional paid-in capital. Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 (Topic 606), Revenue from Contracts with Customers Under the revenue standard, a performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. Most of the Company’s contracts contain multiple performance obligations that include engineering and technical services as well as the delivery of a diverse range of climate control system equipment and components, which can span multiple phases of a customer’s project life cycle from facility design and construction to equipment delivery and system installation and start-up. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When there are multiple performance obligations within a contract, the Company allocates the transaction price to each performance obligation based on standalone selling price. When estimating the selling price, the Company uses various observable inputs. The best observable input is the Company’s actual selling price for the same good or service, however, this input is generally not available for the Company’s contracts containing multiple performance obligations. For engineering services, the Company estimates the standalone selling price by reference to certain physical characteristics of the project, such as facility size and mechanical systems involved, which are indicative of the scope and complexity of the mechanical engineering services to be provided. For equipment sales, the standalone selling price is determined by forecasting the expected costs of the equipment and then adding an appropriate margin, based on a range of acceptable margins established by management. Depending on the nature of the performance obligations, the Company may use a combination of different methods and observable inputs if certain performance obligations have highly variable or uncertain standalone selling prices. Once the selling prices are determined, the Company applies the relative values to the total contract consideration and estimates the amount of the transaction price to be recognized as each performance obligation is fulfilled. The Company recognizes revenue for the sale of goods when control transfers to the customer, which primarily occurs at the time of shipment. The Company’s historical rates of return are insignificant as a percentage of sales and, as a result, the Company does not record a reserve for returns at the time the Company recognizes revenue. The Company has elected to exclude from the measurement of the transaction price all taxes (e.g., sales, use, value added, and certain excise taxes) that are assessed by a governmental authority in connection with a specific revenue-producing transaction and collected by the Company from the customer. Accordingly, the Company recognizes revenue net of sales taxes. The revenue and cost for freight and shipping is recorded when control over the sale of goods passes to the Company’s customers. The Company also has performance obligations to perform certain engineering services that are satisfied over a period of time. Revenue is recognized from this type of performance obligation as services are rendered based on the percentage completion towards certain specified milestones. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) The Company offers assurance-type warranties for its products and products manufactured by others to meet specifications defined by the contracts with customers and does not have any material separate performance obligations related to these warranties. The Company maintains a warranty reserve based on historical warranty costs. Applying the practical expedient in ASC 606-10-32-18, which the Company has elected, the Company does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Accordingly, the remaining performance obligations related to customer contracts does not consider the effects of the time value of money. Applying the practical expedient in ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred since the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs include certain sales commissions and incentives, which are included in selling, general and administrative expenses, and are payable only when associated revenue has been collected and earned by the Company. The Company does not have material amounts of contract assets since revenue is recognized as control of goods is transferred or as services are performed. Contract liabilities consist of advance payments and deferred revenue. For the three and nine months ended September 30, 2021, the Company recognized revenue of $ 283,452 and $ 3,357,068 , respectively, related to the deferred revenue at January 1, 2021. For the three and nine months ended September 30, 2020, the Company recognized revenue of $ 9,141 and $ 1,074,016 , respectively, related to the deferred revenue at January 1, 2020. Remaining performance obligations, or backlog, represents the aggregate amount of the transaction price allocated to the remaining obligations that the Company has not performed under its customer contracts. The Company has elected not to use the optional exemption in ASC 606-10-50-14, which exempts an entity from such disclosures if a performance obligation is part of a contract with an original expected duration of one year or less. Accordingly, the information disclosed about remaining performance obligations includes all customer contracts, including those with an expected duration of one year or less. Industry uncertainty, project financing concerns, and the licensing and qualification of our prospective customers, which are out of the Company’s control, make it difficult for the Company to predict when it will recognize revenue on its remaining performance obligations. There are risks that the Company may not realize the full contract value on customer projects in a timely manner or at all, and completion of a customer’s cultivation facility project is dependent upon the customer’s ability to secure funding and real estate, obtain a license and then build their cultivation facility so they can take possession of the equipment. Accordingly, the time it takes for customers to complete a project, which corresponds to when the Company is able to recognize revenue, is driven by numerous factors including: (i) the large number of first-time participants interested in the indoor cannabis cultivation business; (ii) the complexities and uncertainties involved in obtaining state and local licensure and permitting; (iii) local and state government delays in approving licenses and permits due to lack of staff or the large number of pending applications, especially in states where there is no cap on the number of cultivators; (iv) the customer’s need to obtain cultivation facility financing; (v) the time needed, and coordination required, for our customers to acquire real estate and properly design and build the facility (to the stage when climate control systems can be installed); (vi) the large price tag and technical complexities of the climate control and air sanitation system; (vii) the availability of power; and (viii) delays that are typical in completing any construction project. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) As of September 30, 2021, the Company’s remaining performance obligations, or backlog, was $ 9,881,000 , of which $ 1,161,000 , or 12 %, was attributable to customer contracts for which the Company has only received an initial advance payment to cover the allocated value of the Company’s engineering services (“engineering only paid contracts”). There is the risk that the equipment portion of these engineering only paid contracts will not be completed or will be delayed. These reasons include the customer being dissatisfied with the quality or timeliness of the Company’s engineering services, delay or abandonment of the project because of the customer’s inability to obtain project financing or licensing, or other reasons such as a challenging business climate including an overall post-Covid-19 economic disruption or change in business direction. After the customer has made an advance payment for a portion of the equipment to be delivered under the contract (“partial equipment paid contracts”), the Company is typically better able to estimate the timing of revenue recognition since the risks and delays associated with licensing, permitting and project funding are typically mitigated once the initial equipment payment is received. There is significant uncertainty regarding the timing of the Company’s recognition of revenue on its remaining performance obligations, and there is no certainty that these will result in actual revenues. The backlog at September 30, 2021, includes booked sales orders of $ 1,250,000 from several customers that the Company does not expect to be realized until late 2022. The Company believes the sales orders in this portion of our backlog have an elevated level of risk and may, ultimately, be delayed or cancelled by our customers. 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 $ 112,000 $ 1,049,000 $ 1,161,000 Remaining performance obligations related to partial equipment paid contracts 3,091,000 5,629,000 $ 8,720,000 Total remaining performance obligations $ 3,203,000 $ 6,678,000 $ 9,881,000 The following table sets forth the Company’s revenue by source: Schedule of Revenue by Source For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Equipment and systems sales $ 3,523,948 $ 1,481,961 $ 9,933,313 $ 4,575,855 Engineering and other services 110,538 114,160 464,269 402,837 Shipping and handling 71,950 38,548 184,888 148,326 Total revenue $ 3,706,436 $ 1,634,669 $ 10,582,470 $ 5,127,018 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 nine months ended September 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 150.2 % to 152.51 %; expected term in years 10 0.55% to 1.49 %. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) 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 nine months ended September 30, 2021 and 2020: Schedule of Share-based Compensation Costs For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Share-based compensation expense included in: Cost of revenue $ - $ 6,833 $ 29,944 $ 23,949 Advertising and marketing expenses - 2,500 13,292 7,500 Product development costs - 5,444 14,029 16,332 Selling, general and administrative expenses 29,307 41,221 102,735 306,448 Total share-based compensation expense included in consolidated statement of operations $ 29,307 $ 55,998 $ 160,000 $ 354,229 Included in the expense for the three and nine months ended September 30, 2021, is an accrual for $ 0 and $ 108,945 , respectively, for the 2021 Annual Employee Incentive Compensation Plan. Included in the expense for the three and nine months ended September 30, 2020, is an accrual for $ 31,575 and $ 101,472 , respectively, for the 2020 Annual Employee Incentive Compensation Plan. Concentrations Three customers accounted for 38 %, 23 %, and 11 % of the Company’s revenue for the three months ended September 30, 2021 and three customers accounted for 25 %, 12 % and 12 % of the Company’s revenue for the nine months ended September 30, 2021. Two customers accounted for 39 % and 30 % of the Company’s revenue for the three months ended September 30, 2020 and three customers accounted for 18 %, 17 % and 11 % of the Company’s revenue for the nine months ended September 30, 2020. Three customers accounted for 40 %, 26 % and 22 % of the Company’s accounts receivable as of September 30, 2021. As of September 30, 2020, four customers accounted for 32 %, 23 %, 21 % and 10 % of the Company’s accounts receivable. Recently Issued Accounting Pronouncements In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company early adopted ASU 2020-06 effective January 1, 2021. The early adoption of ASU 2020-06 impacted the Company’s accounting for the issuance of its Series B Redeemable Convertible Preferred Stock as further discussed in Note 8 Temporary Equity Series B Redeemable Convertible Preferred Stock 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)—Clarify |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | Note 3 – Going Concern The accompanying 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. The Company incurred a net loss of approximately $ 1,759,000 for the year ended December 31, 2020 and had an accumulated deficit of approximately $ 27,444,000 and a shareholders’ deficit of approximately $ 1,334,000 as of December 31, 2020. Since inception, the Company has financed its activities principally through debt and equity financing, advance payments from customers and revenues from completed contracts. Management expects to incur additional losses and cash outflows in the foreseeable future in connection with its operating activities. The Company is subject to a number of risks similar to those of other similar stage and situated companies, including general economic conditions, its customers’ operations and prospects for and ability to obtain project financing, and market and business disruptions, that include the outbreak of COVID-19, dependence on key individuals, successful development, marketing and branding of products; uncertainty of product development and generation of revenues; dependence on outside sources of financing; risks associated with research, development; dependence on third-party suppliers and collaborators; protection of intellectual property; and competition with larger, better-capitalized companies. Ultimately, the attainment of profitable operations is dependent on future events, including obtaining adequate financing to fulfill its development activities and generating a level of revenues adequate to support the Company’s cost structure. Surna Inc. Notes to Consolidated Financial Statements 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. The Company’s ability to raise equity capital is also limited by the Company’s stock price, and any such issuance could be highly dilutive to existing shareholders. The Company’s 2020 revenue of approximately $ 8,514,000 which represents a decrease of 44% over the prior year. The Company’s revenue recognition on contracts continues to be unpredictable and inconsistent quarter-over-quarter, and the Company has incurred, and expects to incur, additional operating expenses to support such growth. The Company generated approximately $ 818,000 in cash flow from operating activities in 2020. However, as a result of the Company’s growth and its efforts to expand and upgrade its products, the Company’s working capital deficit as of December 31, 2020 was approximately $ 2,220,000 , compared to approximately $ 1,437,000 as of December 31, 2019. The Company also will be affected by constraints on the availability of capital to its customers and prospects who have commenced, or are contemplating, new or expanded cultivation facilities and the overall impact of the COVID-19 pandemic. The extent to which COVID-19 will impact the Company’s business and financial results will depend on future developments, which are uncertain and cannot be predicted. See Note 16. The duration and likelihood of operational success going forward resulting from the fiscal year 2020 measures of adjusting the workforce reductions and cost-cutting measures are uncertain. If these actions do not meet management’s expectations, or additional capital is not available, there is substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. Other factors that will impact the Company’s ability to continue operations include the market demand for the Company’s products and services, the ability to service its customers and prospects, potential contract cancellations, project scope reductions and project delays, the Company’s ability to fulfill its backlog, the management of working capital, and the 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 twelve months. If the Company is unable to increase revenues, or otherwise generate cash flows from operations, there is 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 consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. |
Leases
Leases | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
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 and as a lease liability of $ 822,374 . The Facility Lease commenced September 29, 2017 and continues through August 31, 2022. The Company has the option to renew the Facility Lease for an additional five years . However, the renewal option to extend the Facility Lease is not included in the right-of-use asset or lease liability as the option is not reasonably certain of exercise. The Company regularly evaluates the renewal option and when it is reasonably certain of exercise, the Company will include the renewal period in its lease term. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) Beginning September 1, 2018, and each subsequent September 1 during the term, the monthly rent under the Facility Lease will increase by 3% . Total rent under the current building lease is charged to expense over the term of the lease on a straight-line basis, resulting in the same monthly rent expense throughout the lease. The difference between the rent expense amount and the actual rent paid is recorded to operating lease liability on the Company’s condensed consolidated balance sheets. Under the Facility Lease, the landlord agreed to pay the Company or the Company’s contractors for tenant improvements made by the Company not to exceed $ 100,000 , which were used for normal tenant improvements. The Company determined that these improvements were not specialized and could be utilized by a subsequent tenant and, as such, the improvements were considered assets of the lessor. As of January 1, 2019, the unamortized amount of tenant improvement allowance of $ 81,481 was treated as a reduction in measuring the right-of-use asset. Under the Facility Lease, the Company pays the actual amounts for property taxes and insurance, excludes such payments from lease contract consideration, and records such payments as incurred. The Company also pays the landlord for common area maintenance, which is considered a non lease component. For the Facility Lease, the Company has not elected the accounting policy to include both the lease and non lease components as a single component and account for it as the lease. In determining the right-of-use asset and lease liability, the Company applied a discount rate to the minimum lease payments under the Facility Lease. ASC 842 requires the Company to use the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Since the discount rate is not implicit in the lease agreement, we utilized an estimated incremental borrowing rate provided by the Company’s depository bank. The lease cost, cash flows and other information related to the Facility Lease were as follows: Schedule of Lease Cost For the Nine Months Ended September 30, 2021 Operating lease cost $ 162,667 Operating cash outflow from operating lease $ 210,154 As of September 30, 2021 Operating lease right-of-use asset $ 194,353 Operating lease liability, current $ 238,140 Operating lease liability, long-term $ - Remaining lease term .9 years Discount rate 5.00 % Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) Future annual minimum lease payments on the Facility Lease as of September 30, 2021 were as follows: Schedule of Future Annual Minimum Lease Payments Years ended December 31, 2021 (excluding the nine months ended September 30, 2021) 71,710 2022 170,891 Total minimum lease payments 242,601 Less imputed interest (4,461 ) Present value of minimum lease payments $ 238,140 On April 30, 2021, the Company entered into an agreement to sublease approximately 6,900 square feet of its office and manufacturing space. The sublease commenced on April 30, 2021 and will continue on a month-to-month basis until either party gives 30-days’ notice. Unless 30-days’ notice is provided sooner, this sublease will end upon termination of the Company’s Lease Agreement with its current landlord. Rent was initially charged at $ 5,989 per month and increased to $ 11,978 per month effective July 1, 2021. The Sublessor is also responsible for its prorated share of utilities and other related costs. This new sublease does not change the Company’s legal relationship or financial obligations with its landlord. The Company continues to be responsible for all the remaining financial obligations under its existing lease with the landlord. Accordingly, entering into the new sublease did not impact the carrying value of the Company’s operating lease right of use asset or operating lease liability. Moreover, after an initial two-month transitional period, the rental rate per square foot under the new sublease is identical to the rental rate per square foot for the Company’s existing lease with its landlord which indicates that there is no impairment to the carrying value of the Company’s operating lease right of use asset. On July 27, 2021, the Company entered into a Lease Termination Agreement with its current landlord for the 18,952 square foot office and manufacturing facility in Boulder, CO, which was previously scheduled to expire on August 31, 2022 . The termination provides for the Company to vacate the facility no later than November 15, 2021. In exchange for early termination from its lease obligation, the Company paid a nominal lease termination fee on July 28, 2021. The termination was also contingent upon a successor tenant executing a new lease with the landlord and the Company paying the remaining deferred rent and security deposit amounts ( See Contractual Payment Obligations On July 28, 2021, the Company entered into an agreement to lease 11,491 square feet of office and manufacturing space in Louisville, CO. The lease commences on November 1, 2021 and continues through January 31, 2027 . The Company has the option to renew the lease for an additional 60-month period. | Note 4 – Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) The new lease 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. On June 27, 2017, the Company entered into a lease for its manufacturing and office space (the “Facility Lease”), which commenced September 29, 2017 and continues through August 31, 2022. The Company occupied its 12,700 square foot space for $ 12,967 per month until January 1, 2018 . On January 2, 2018, the leased space was expanded to 18,600 square feet, and the monthly rental rate increased to $ 18,979 until August 31, 2018 . Beginning September 1, 2018 and 2019, the monthly rent increased to $ 19,549 and $ 20,135 , respectively. On each September 1 through the end of the lease, the monthly rent will increase by 3%. Pursuant to the current lease, the Company made a security deposit of $ 51,000 on July 31, 2017. The deposit of $ 1,600 paid to the previous owner of the property was forwarded to the current landlord. The Company has the option to renew the Facility Lease for an additional five years . During 2020, the Company entered into an agreement with its landlord to apply its rent deposit of $ 52,600 to rent payments due during the period. The deposit required on the lease will be reduced to approximately $32,000 and will be payable in 12 monthly installments from January through December of 2021. Further, the landlord also agreed to defer payment of fifty percent of the three months of lease payments (base rent only) for the period July to September 2020. The deferred lease payments amount to approximately $30,000 and will be payable in 12 monthly installments from January to December 2021. Total rent under the Facility Lease is charged to expense over the term of the lease on a straight-line basis, resulting in the same monthly rent expense throughout the lease. The difference between the rent expense amount and the actual rent paid is recorded to operating lease liability on the Company’s condensed consolidated balance sheets. As of January 1, 2019, the remaining deferred rent of $ 26,477 was reclassified to the operating lease liability under the new lease standard. Surna Inc. Notes to Consolidated Financial Statements Upon adoption of the new lease standard, the Company recognized its lease for manufacturing and office space (the “Facility Lease”) on the balance sheet as an operating lease right-of-use asset in the amount of $ 714,416 and as a lease liability of $ 822,374 . The renewal option to extend the Facility Lease is not included in the right-of-use asset or lease liability as the option is not reasonably certain of exercise. The Company regularly evaluates the renewal option and when it is reasonably certain of exercise, the Company will include the renewal period in its lease term. Under the Facility Lease, the landlord agreed to pay the Company or the Company’s contractors for tenant improvements made by the Company not to exceed $ 100,000 , which were used for normal tenant improvements. The Company determined that these improvements were not specialized and could be utilized by a subsequent tenant and, as such, the improvements were considered assets of the lessor. As of January 1, 2019, the unamortized amount of tenant improvement allowance of $ 81,481 was treated as a reduction in measuring the right-of-use asset. Under the Facility Lease, the Company pays the actual amounts for property taxes and insurance, excludes such payments from lease contract consideration, and records such payments as incurred. The Company also pays the landlord for common area maintenance, which is considered a non-lease component. For the Facility Lease, the Company has elected to exclude non-lease components from lease contract consideration. In determining the right-of-use asset and lease liability, the Company applied a discount rate to the minimum lease payments under the Facility Lease. ASC 842 requires the Company to use the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Since the discount rate is not implicit in the lease agreement, we utilized an estimated incremental borrowing rate provided by the Company’s depository bank. The lease cost, cash flows and other information related to the Facility Lease were as follows: Schedule of Lease Cost For the Year Ended December 31, 2020 Operating lease cost $ 216,889 Operating cash outflow from operating lease $ 160,934 As of December 31, 2020 Operating lease right-of-use asset $ 343,950 Operating lease liability, current $ 266,105 Operating lease liability, long-term $ 169,119 Remaining lease term 1.7 years Discount rate 5.00 % Future annual minimum lease payments on the Facility Lease as of December 31, 2020 were as follows: Schedule of Future Annual Minimum Lease Payments Years ended December 31, 2021 281,864 2022 170,891 Total minimum lease payments 452,755 Less imputed interest (17,531 ) Present value of minimum lease payments $ 435,224 Surna Inc. Notes to Consolidated Financial Statements |
Inventory
Inventory | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Inventory | Note 3 – Inventory Inventory consisted of the following: Schedule of Inventory September 30, December 31, 2021 2020 Finished goods $ 319,335 $ 201,778 Work in progress 2,595 4,231 Raw materials 237,705 214,145 Allowance for excess & obsolete inventory (79,281 ) (93,045 ) Inventory, net $ 480,354 $ 327,109 Overhead expenses of $ 17,674 and $ 17,974 were included in the inventory balance as of September 30, 2021, and December 31, 2020, respectively. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) Advance payments on inventory purchases are recorded in prepaid expenses until title for such inventory passes to the Company. Prepaid expenses included approximately $ 879,000 and $ 916,000 in advance payments for inventory for the periods ended September 30, 2021, and December 31, 2020, respectively. | Note 5 – Inventory Inventory consisted of the following: Schedule of Inventory 2020 2019 As of December 31, 2020 2019 Finished goods $ 201,778 $ 1,041,369 Work in progress 4,231 3,851 Raw materials 214,145 257,399 Allowance for excess & obsolete inventory (93,045 ) (71,376 ) Inventory, net $ 327,109 $ 1,231,243 Overhead expenses of $ 17,974 and $ 31,831 were included in the inventory balance as of December 31, 2020 and 2019, respectively. |
Property and Equipment
Property and Equipment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
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 September 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 (428,076 ) (480,883 ) Property and equipment, net $ 98,967 $ 147,732 Depreciation expense was $ 54,538 for the nine months ended September 30, 2021. For the nine months ended September 30, 2021, $ 4,721 was allocated to cost of sales and $ 1,180 was allocated to inventory with the remainder recorded as selling, general and administrative expense. | Note 6 – Property and Equipment Property and equipment consisted of the following: Schedule of Property and Equipment As of December 31, 2020 2019 Furniture and equipment $ 398,422 $ 389,090 Vehicles 15,000 15,000 Leasehold improvements 215,193 215,193 628,615 619,283 Accumulated depreciation (480,883 ) (361,360 ) Property and equipment, net $ 147,732 $ 257,923 Depreciation expense amounted to $ 119,524 for the year ended December 31, 2020, of which $ 6,394 was allocated to cost of revenue. Depreciation expense amounted to $ 157,860 for the year ended December 31, 2019, of which $ 7,010 was allocated to cost of revenue. As of December 31, 2018, the Company’s property and equipment, net included the gross cost of the equipment leased to a cultivation company affiliated with one of the Co-founders of $ 176,042 , and accumulated depreciation of $ 39,120 . During the year ended December 31, 2019, the Company wrote-off the carrying value of the leased equipment. See Note 10. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 7 – Intangible Assets Intangible assets consisted of the following: Schedule of Intangible Assets As of December 31, 2020 2019 Patents $ 8,110 $ 12,234 Website development costs 22,713 22,713 Trademarks 1,830 1,830 32,653 36,777 Accumulated amortization (25,426 ) (24,847 ) Intangible assets, net $ 7,227 $ 11,930 Surna Inc. Notes to Consolidated Financial Statements Patents when issued are amortized over 14 years, and web site development costs are amortized over five years . Trademarks are not amortized since they have an indefinite life. Amortization expense for intangibles amounted to $ 579 and $ 3,320 for the years ended December 31, 2020 and 2019, respectively. During the years ended December 31, 2020 and 2019, the Company wrote-off $ 4,124 and $ 7,778 , respectively, related to patents that had been abandoned. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
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 September 30, December 31, 2021 2020 Accounts payable $ 864,558 $ 918,639 Sales commissions payable 40,758 48,263 Accrued payroll liabilities 255,462 288,071 Product warranty accrual 172,868 173,365 Other accrued expenses 340,442 356,623 Total $ 1,674,088 $ 1,784,961 | Note 8 – Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following: Schedule of Accounts Payable and Accrued Liabilities 2020 2019 As of December 31, 2020 2019 Accounts payable $ 918,639 $ 1,299,015 Sales commissions payable 48,263 69,532 Accrued payroll liabilities 288,071 169,052 Product warranty accrual 173,365 185,234 Other accrued expenses 356,623 110,127 Total $ 1,784,961 $ 1,832,959 Accounts payable and other accrued expenses includes $ 402,651 relating to a one-time warranty issue experienced on three customers’ projects. The expenses related to parts and labor to repair units that had been delivered to these customers prior to year-end. Since the issue is limited to these three projects and is not anticipated to reoccur in the future, we have made no adjustment to the ongoing 1% warranty reserve that we accrue on all sales. |
Note Payable and Accrued Intere
Note Payable and Accrued Interest | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Debt Disclosure [Abstract] | ||
Note Payable and Accrued Interest | Note 6 – Note Payable and Accrued Interest On February 10, 2021, the Company entered into a note payable with its current bank in the principal amount of $ 514,200 , for working capital purposes. The loan amount bears interest at 1 % and is due on February 5, 2026 . The loan may be repaid in advance without penalty. The loan is also potentially forgivable in full provided proceeds are used for payment of payroll expenses, rent, utilities and mortgage interest and certain other terms and conditions are met. If any portion of the loan is not forgiven, payments will commence 10 months following the end of the 24-week deferral period. The loan has typical default provisions, including for change of ownership, general lender insecurity as to repayment, non-payment of amounts due, defaults on other debt instruments, insolvency, dissolution or termination of the business as a going concern and bankruptcy. During the three and nine months ended September 30, 2021, interest of $ 1,296 and $ 3,268 was accrued, respectively, in respect of this note payable. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) | Note 9 – Note Payable and Accrued Interest On April 22, 2020, the Company entered into a note payable with its current bank in the principal amount of $ 554,000 , for working capital purposes. The loan amount was subject to interest at 1 % and was initially due on April 20, 2022 . Subsequently, the term of the loan was potentially to be extended to April 20, 2025 . The loan could be repaid in advance without penalty. The loan was also potentially forgivable in full provided proceeds were used for payment of payroll expenses, rent, utilities and mortgage interest and certain other terms and conditions were met. The loan had typical default provisions, including for change of ownership, general lender insecurity as to repayment, non-payment of amounts due, defaults on other debt instruments, insolvency, dissolution or termination of the business as a going concern and bankruptcy. During the year ended December 31, 2020, interest of $ 3,203 was accrued in respect of this note payable. On December 11, 2020, the Company received notice from the bank that its loan received on April 22, 2020, in the principal amount of $ 554,000 and all accrued interest of $ 3,203 , was fully forgiven. This gain on loan forgiveness was recorded as Other Income in the Statement of Operations during the year. As further discussed in Note 16 Subsequent Events 514,200 for working capital purposes. Consistent with the loan provisions, the Company will use the proceeds to meet payroll and benefit expenses as well as for rent and utilities. The loan amount bears interest at 1 % and is due on February 5, 2026 . The loan may be repaid in advance without penalty. The loan has typical default provisions, including for change of ownership, general lender insecurity as to repayment, non-payment of amounts due, defaults on other debt instruments, insolvency, dissolution or termination of the business as a going concern and bankruptcy. |
Related Party Agreements and Tr
Related Party Agreements and Transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | ||
Related Party Agreements and Transactions | Note 13 – Related Party Transactions Related Party Agreements and 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. During the three months ended September 30, 2021, the Company paid $ 26,873 in commissions under this agreement. | Note 10 – Related Party Agreements and Transactions Agreements and Transaction with Company’s Co-Founders The following describes certain agreements and transactions between the Company and its co-founders (the “Co-founders”). The Co-founders held various executive officer and director positions with the Company until May 2018. One of the Co-founders also was a consultant to the Company until May 2018. The Co-founders are also shareholders of the Company. Based on information available to the Company, the Co-founders did not own more than 10 % of the Company’s outstanding common stock at any time during 2019 or 2020. Surna Inc. Notes to Consolidated Financial Statements Equipment, Demonstration and Product Testing Agreement In May 2017, the Company entered into a three-year equipment, demonstration and product testing agreement with a licensed cannabis cultivation company affiliated with one of the Co-founders. Under this agreement, the Company agreed to lease the cultivation company certain cultivation equipment in exchange for a quarterly fee of $ 16,500 , which was increased to $ 18,330 to reflect additional leased equipment requested by the cultivation company (the “Lease Fee”). In consideration for access to the cultivation facility to conduct demonstration tours and for the product testing and data to be provided by the cultivation company, the Company agreed to pay the cultivation company a quarterly fee of $ 12,000 (the “Demo and Testing Fee”). The Company and the cultivation company each made their respective payments under this agreement through June 30, 2018. Thereafter, the cultivation company failed to make any subsequent payments of the Lease Fee and, as a result, the Company did not pay the Demo and Testing Fee. During the second quarter of 2019, the Company notified the cultivation company of its breach for non-payment of the Lease Fee. In February 2020, the parties mutually agreed to terminate this agreement and release each other from all claims related to this agreement, including any unpaid Lease Fees or Demo and Testing Fees. The Company also agreed to transfer the equipment to the cultivation company for no additional consideration. During the year ended December 31, 2018, the Company recorded Demo and Testing Fees of $ 32,000 as operating expenses in the consolidated statements of operations. During the year ended December 31, 2018, the Company also recorded Lease Fees of $ 48,880 as “Other income, net” in the consolidated statements of operations. As of December 31, 2018, unpaid Lease Fees of $ 36,660 were included in accounts receivable and unpaid Demo and Testing Fees of $ 24,000 were included in accounts payable. During the third quarter of 2019, the Company determined that it was unlikely that any further payment of Lease Fees would be paid by the cultivation company, and the Company: (i) wrote off the balance of the accounts receivable related to unpaid Lease Fees, with a corresponding charge to “Other income, net” in the consolidated statements of operations, (ii) reversed the accounts payable related to the unpaid Demo and Testing Fees, with a corresponding credit to operating expenses, and (iii) wrote-off the remaining carrying value of the leased equipment of $ 107,581 , which was included in property and equipment on the Company’s consolidated balance sheet. For the year ended December 31, 2019, the net impact of the foregoing items on the consolidated statements of operations was a charge of $ 120,241 . Employment Agreement In May 2018, the Company and one of the Co-founders entered into an employment agreement which provided for an initial base salary of $ 150,000 per year and certain sales incentive. Pursuant to the employment agreement, the Company awarded 32,000 restricted stock units (“RSUs”) to the Co-founder that vested at certain dates in the future, subject to the co-founder’s continued employment. As of December 31, 2019: (i) the Company has issued 13,333 shares of common stock in settlement of vested RSUs, (ii) 6,667 shares of common stock in settlement of RSUs that vested December 31, 2019 were issued subsequent to December 31, 2019, (iii) the parties mutually agreed to cancel 6,667 RSUs, and (iii) 5,333 RSUs vested on April 30, 2020, however, the holder elected to cancel the RSUs. Consulting Agreement As further discussed in Note 16 Subsequent Events 6,500 for up to 50 hours per month for the various consulting activities undertaken and provide for reimbursement of expenses. The term of the agreement is set for three months. Any intellectual property developed by RSX will belong to the Company, and the contract provides for typical indemnification obligations and confidentiality provisions. Surna Inc. Notes to Consolidated Financial Statements |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | Note 7 – Commitments and Contingencies Litigation As of December 31, 2019, there were 45,000 restricted stock units that had not been settled due to a dispute with a former employee over the required withholding taxes to be paid to the Company for remittance to the appropriate tax authorities. The Company commenced an arbitration action against the former employee regarding the dispute. The former employee also made claims in the arbitration action against the Company for unpaid wages. As stated in a pleading in the arbitration, on March 9, 2020, the Company issued the former employee 45,000 shares of the Company’s common stock in settlement of these restricted stock units after taking measures to mitigate the Company’s exposure to penalties and liability for the failure to properly withhold income taxes. The Arbitrator issued an interim award of approximately $ 10,000 in the Company’s favor and a finding against the former employee. Effective June 9, 2020, the Arbitrator issued his final award in the Company’s favor in the Colorado arbitration. The Arbitrator found against the former employee and awarded the Company costs of $ 33,985 , with interest at 8 % per year. Effective July 22, 2020, the Colorado Court confirmed the Arbitration award and entered a final judgement in favor of the Company and against the former employee. The Company pursued collection of this debt and has now collected the debt owed. This former employee continued to pursue separate litigation against the Company for recovery of alleged consulting fees owed to him for the 2015 calendar year prior to his appointment as an executive officer of the Company. Effective March 30, 2021, this separate litigation has now been settled. While the Company disputed the merits of the claims, the Company has agreed and will be obliged to pay $ 40,000 over eight months and to issue upon execution of the settlement agreement an aggregate of 6,667 shares of common stock of the Company. These shares were issued on April 8, 2021 as “restricted securities,” subject to a lock-up agreement of six months, without registration rights, and pursuant to a private placement exemption and were valued at $ 67,000 . The settlement agreement also included mutual releases and no admission of liability. The cost to the Company of this settlement, $ 107,000 , in total, has been recognized in full in other expenses during the nine months ended September 30, 2021. As of September 30, 2021, $ 35,000 has been paid in respect of the $ 40,000 cash portion of the settlement and the remaining $ 5,000 is included in accounts payables and accrued liabilities. The issuance of the 6,667 shares of common stock, valued at $ 67,000 has been recognized in common stock issued during the nine months ended September 30, 2021. From time to time, in the normal course of its operations, the Company is subject to litigation matters and claims. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict, and the Company’s view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a liability for contingent losses when it is both probable that a liability has been incurred and the amount of the loss is known. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company’s operations or its financial position, liquidity or results of operations. Leases The Company has a lease agreement for its manufacturing and office space. Refer to Note 2 Leases Other Commitments In the ordinary course of business, the Company enters into commitments to purchase inventory and may also provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers and employees that will require the Company to, among other things, indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. The Company maintains director and officer insurance, which may cover certain liabilities arising from its obligation to indemnify its directors and certain of its officers and employees, and former officers, directors, and employees of acquired companies, in certain circumstances. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) | Note 11 – Commitments and Contingencies Litigation As of December 31, 2019, there were 45,000 restricted stock units that had not been settled due to a dispute with a former employee over the required withholding taxes to be paid to the Company for remittance to the appropriate tax authorities. The Company commenced an arbitration action against the former employee regarding the dispute. The former employee also made claims in the arbitration action against the Company for unpaid wages. As stated in a pleading in the arbitration, on March 9, 2020, the Company issued the former employee 45,000 shares of the Company’s common stock in settlement of these restricted stock units after taking measures to mitigate the Company’s exposure to penalties and liability for the failure to properly withhold income taxes. The Arbitrator issued an interim award of approximately $ 10,000 in the Company’s favor and a finding against the former employee. Effective June 9, 2020, the Arbitrator issued his final award in the Company’s favor in the Colorado arbitration. The Arbitrator found against the former employee and awarded the Company costs of $ 33,985 , with interest at 8 % per year. Effective July 22, 2020, the Colorado Court confirmed the Arbitration award and entered a final judgement in favor of the Company and against the former employee. The Company pursued collection of this debt and has now collected the debt owed. This former employee is continuing to pursue separate litigation against the Company for recovery of alleged consulting fees owed to him for the 2015 calendar year prior to his appointment as an executive officer of the Company. The Company strongly disputes the ongoing litigation and in the remote event of an adverse outcome, the amount of any settlement loss for this case is not reasonably estimable as of the date of the issuance of these financial statements. 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 can be reasonably estimated. 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. Other Commitments In the ordinary course of business, the Company may 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. |
Preferred and Common Stock
Preferred and Common Stock | 12 Months Ended |
Dec. 31, 2020 | |
Preferred And Common Stock | |
Preferred and Common Stock | Note 12 – Preferred and Common Stock Preferred Stock As of December 31, 2020, and 2019, there were 42,030,331 shares of Series A preferred stock, par value $ 0.00001 per share, issued and outstanding. The holders of Series A preferred stock have one vote per share of Series A preferred stock equivalent to one vote of the Company’s common stock. The Series A preferred stock ranks senior to the Company’s common stock. The holders of shares of Series A preferred stock are not entitled to receive dividends and have no conversion or preemptive rights. Upon liquidation, dissolution or winding up of the Company’s business, after payment to the holders of any senior securities, the holders of Series A preferred stock are entitled to receive a preferential cash payment per share of Series A preferred stock equal to the stated value of the preferred stock, prior to any payment to the holders of common stock. Common Stock During the year ended December 31, 2020, the Company did not issue any shares of its common stock in a private, non-registered transaction. During the year ended December 31, 2019, the Company did not issue any shares of its common stock in a private, non-registered transaction. Surna Inc. Notes to Consolidated Financial Statements During the year ended December 31, 2020, the Company issued shares of its common stock under the 2017 Equity Plan as follows: ● 6,667 shares to an employee in settlement of certain RSUs that vested December 31, 2019; ● 3,733 shares pursuant to a special incentive stock bonus approved by the Board for the period ended December 31, 2019; and ● 45,000 shares in settlement of restricted stock units to a former employee after taking measures to mitigate the Company’s exposure to penalties and liability for the failure to properly withhold income taxes, as further discussed in Note 11 – Commitments and Contingencies, Litigation During the year ended December 31, 2019, the Company issued shares of its common stock under the Company’s 2017 Equity Plan as follows: ● 1,316 shares of common stock were issued to independent directors in lieu of cash director fees; ● 5,263 shares of common stock were issued to independent directors as the 2019 equity retainer fee; ● 7,467 shares of common stock were issued to certain employees in settlement of vested restricted stock units; and ● 7,467 shares of common stock were issued to certain employees as a stock incentive bonus. |
Warrants
Warrants | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Warrants | ||
Warrants | Note 11 - Warrants The following table summarizes information with respect to outstanding warrants to purchase common stock during the nine months ended September 30, 2021: Schedule of Outstanding Warrants to Purchase Common Stock Weighted Weighted Average Average Remaining Aggregate Number Exercise Life Intrinsic Outstanding Price In Months Value Outstanding at December 31, 2020 50,417 $ 37.50 6 $ 0 Issued 227,719 $ 9.00 36 - Exercised - - - - Expired (50,417 ) $ 37.50 - $ 0 Outstanding at September 30, 2021 227,719 $ 9.00 36 $ 0 The following table summarizes information about warrants outstanding at September 30, 2021: Schedule of Warrants Outstanding Weighted Average Life of Warrants Outstanding Warrants Exercise price Outstanding In Months 9.45 192,982 36 10.40 34,737 36 227,719 36 Effective June 30, 2021, 50,417 warrants issued in connection with our Q2 2018 unit offering expired unexercised. Effective September 28, 2021, we issued 192,982 warrants with an exercise price of $ 9.45 and a 3 -year term to the Holders of our Series B redeemable convertible preferred stock and 34,737 warrants with an exercise price of $ 10.40 and a 3 -year term to the placement agent in respect of the sale of the Series B redeemable convertible preferred stock. See Note 8 | Note 13 – Outstanding Warrants Warrants The following table summarizes information with respect to outstanding warrants to purchase common stock during the years ended December 31, 2020 and 2019: Schedule of Outstanding Warrants to Purchase Common Stock Weighted Weighted Average Average Aggregate Number Exercise Remaining Life Intrinsic Outstanding Price In Months Value Outstanding at December 31, 2018 266,735 $ 37.50 21 $ 0 Issued - - - - Exercised - - - - Expired (6,008 ) $ (99.00 ) - $ 0 Outstanding at December 31, 2019 260,727 $ 36.00 9 $ 0 Issued - - - - Exercised - - - - Expired (210,310 ) $ (34.50 ) - $ 0 Outstanding at December 31, 2020 50,417 $ 37.50 6 $ 0 Surna Inc. Notes to Consolidated Financial Statements The following table summarizes information about warrants outstanding at December 31, 2020. Schedule of Warrants Outstanding Weighted Average Life of Warrants Outstanding Warrants Exercise price Outstanding In Months 37.50 50,417 6 Series 2 Warrants In October 2014, the Company offered up to 60 investment units at a price per unit of $ 50,000 . Each unit consisted of (i) 1,667 shares of the Company’s common stock, (ii) a $ 50,000 10 % convertible promissory note (“Series 2 Convertible Note”), and (iii) warrants for the purchase of 333 shares of the Company’s common stock (“Series 2 Warrants”). As of December 31, 2018, Series 2 Warrants to purchase 6,008 shares of common stock were outstanding, all of which expired unexercised during the year ended December 31, 2019. Warrants Issued to Investment Bank Pursuant to a certain agreement for services rendered in connection with the conversion of the Series 2 Convertible Notes, during the year ended December 31, 2017, the Company issued to an investment bank or its designees a warrant (“Banker Warrant”) to purchase, at an exercise price $ 52.50 per share, 3,333 shares of the Company’s common stock. The Banker Warrants were fully vested on the date of issuance, were exercisable beginning December 20, 2017 and expired unexercised on June 20, 2020 . Q1 2017 Warrants In March 2017, the Company issued 111,875 investment units, for aggregate gross proceeds of $ 2,685,000 , or $ 24.00 per unit. Each unit consisted of 0.0067 of a 0.0067 of a ; however, one investor declined receipt of the warrant to purchase 3,125 shares of the Company’s common stock. Pursuant to the Q1 2017 Warrants, the holder thereof may at any time on or after six months after the issuance date and on or prior to the close of business on the date that is the third anniversary of the issuance date, purchase up to the number of shares of the Company’s common stock as set forth in the respective warrant. The exercise price per share of the common stock under the Q1 2017 Warrants is $ 39.00, subject to customary adjustments as provided in the warrant. Each Q1 2017 Warrant was callable at the Company’s option commencing six months from the issuance date, provided the closing price of the Company’s common stock was $ 63.00 or greater for five consecutive trading days. Commencing at any time after the date on which such call condition was satisfied, the Company had the right, upon 30 days’ notice to the holder, to redeem the warrant shares at a price of $ 1.50 per warrant share. The holder could have exercised the warrant at any time (in whole or in part) prior to the redemption date at the exercise price. These warrants expired unexercised in March 2020 . Q4 2017 Warrants In December 2017, the Company issued 98,227 investment units for aggregate proceeds of $ 1,768,080 , or $ 18.00 per unit. Each unit consisted of 0.0067 of a 0.0067 of a . The Q4 2017 Warrants had an exercise price of $ 30.00 per share, subject to customary adjustments as provided in the warrant, and had a term of three years. The Q4 2017 Warrants were callable at the Company’s option, provided the closing price of the Company’s common stock was $ 54.00 or greater for five consecutive trading days. Commencing at any time after the date on which the call condition is satisfied, the Company had the right, upon notice to the holders, to redeem the shares of common stock underlying each warrant at a price of $ 1.50 per share, but such redemption could not occur earlier than sixty-one (61) days following the date of the receipt of notice by the holder. The holder could exercise the warrant at any time (in whole or in part) prior to the redemption date at the exercise price. These warrants expired unexercised in December 2020. Q2 2018 Warrants In June 2018, the Company completed a private placement offering of investment units, with each unit consisting of 0.0067 of a 0.0067 of a $ 37.50 per share of the common stock underlying each warrant, subject to customary adjustments as provided in the warrant. The Q2 2018 Warrants are exercisable commencing July 1, 2018 until June 30, 2021 . The Q2 2018 Warrants are callable at the Company’s option, beginning on July 1, 2019 until the expiration thereof on June 30, 2021, provided the closing price of the Company’s common stock is $ 60.00 (subject to adjustment as provided in the warrant) or greater for five consecutive trading days. Commencing at any time after the date on which the call condition is satisfied, the Company has the right, upon notice to the holders, to redeem the shares of common stock underlying each warrant at a price of $ 1.50 per share, but such redemption may not occur earlier than sixty-one (61) days following the date of the receipt of notice by the holder. The holder may exercise the warrant (in whole or in part) prior to the redemption date at the exercise price. As of December 31, 2020, Q2 2018 Warrants to purchase 50,417 shares of common stock were outstanding. Surna Inc. Notes to Consolidated Financial Statements |
Equity Incentive Plans
Equity Incentive Plans | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Equity Incentive Plans | Note 10 – 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 333,333 shares of the Company’s common stock (“Plan Shares”) for issuance of equity awards under the 2017 Equity Plan. If any shares subject to an award are forfeited, expire, or otherwise terminate without issuance of such shares, the shares will, to the extent of such forfeiture, expiration, or termination, again be available for awards under the 2017 Equity Plan. 2021 Equity Incentive Plan On March 22, 2021, the Board approved the 2021 Equity Incentive Plan (the “2021 Equity Plan”), which was approved by the stockholders on July 22, 2021. The 2021 Equity Plan permits the Board to grant awards of up to 666,667 shares of common stock. The 2021 Plan provides for the grant of incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), non-qualified stock options, stock appreciation rights (“SARs”), restricted stock awards and restricted stock unit awards and other equity linked awards to our employees, consultants and directors. If an equity award (i) expires or otherwise terminates without having been exercised in full or (ii) is settled in cash ( i.e. During the nine months ended September 30, 2021, the Company issued no shares of its common stock. During the nine months ended September 30, 2021, the Company granted awards for 21,777 non-qualified stock options as described below. Of the total awards granted, 20,239 were under the 2017 Equity Plan and 230,770 were issued under the 2021 Equity Plan. As of September 30, 2021, of the 333,3333 shares authorized under the 2017 Plan for equity awards, 163,692 shares have been issued, awards related to 162,665 options remain outstanding, and 6,976 shares remain available for future equity awards. As of September 30, 2021, of the 666,667 shares authorized under the 2021 Equity Plan, 1,538 relate to outstanding options and 665,129 shares remain available for future equity awards. There was $ 90,255 in unrecognized compensation expense for unvested non-qualified stock options at September 30, 2021 which will be recognized over approximately 3 years. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) Non-Qualified Stock Options A summary of the non-qualified stock options granted to employees and consultants under the 2017 Equity Plan during the nine months ended September 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 95,007 $ 12.45 8.3 $ - Granted 20,239 $ 12.75 10.0 $ - Exercised - Forfeited (1,914 ) $ 18.30 6.6 $ - Expired - Outstanding, September 30, 2021 113,332 $ 12.45 7.9 $ - Exercisable, September 30, 2021 101,665 $ 12.75 7.7 $ - During the nine months ended September 30, 2021, we issued a total of 20,239 stock options to employees as follows: ● 6,906 stock options were issued to 21 employees in respect of the Company’s 2020 Annual Incentive Awards. The options vested immediately, have a term of 10 years and an exercise price of $ 19.50. ● 13,333 stock options were issued to our newly appointed Chief Financial Officer. The options vest as follows: 1,667 vested immediately, 2,780 on June 30, 2022, 665,000 on June 30, 2023 and 668,000 on June 30, 2024. The options have a term of 10 years and an exercise price of $ 9.15. ● During the nine months ended September 30, 2021, 1,914 fully vested stock options were forfeited following the departure of 3 former employees. A summary of non-vested non-qualified stock options activity for employees and consultants under the 2017 Equity Plan for the nine months ended September 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 20,239 $ 12.30 $ - $ - Vested (8,572 ) $ 16.80 $ 66,412 $ - Forfeited - $ - Expired - $ - Nonvested, September 30, 2021 11,667 $ 9.15 $ - $ 104,800 For the nine months ended September 30, 2021 and September 30, 2020, the Company recorded $ 29,881 and $ 171,624 as compensation expense related to vested options issued to employees and consultants, net of forfeitures, respectively. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) A summary of the non-qualified stock options granted to directors under the 2017 Equity Plan and the 2021 Equity Plan, during the nine months ended September 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 49,333 $ 10.05 7.5 $ - Granted 1,538 $ 9.75 10.0 $ - Exercised - Forfeited/Cancelled - Expired - Outstanding, September 30, 2021 50,871 $ 10.05 6.8 $ - Exercisable, September 30, 2021 50,871 $ 10.05 6.8 $ - During the nine months ended September 30, 2021, we issued 1,538 non-qualified stock options to directors as retroactive compensation for the first half of 2021 under the 2021 Equity Plan. A summary of non-vested non-qualified stock options activity for directors under the 2017 Equity Plan and the 2021 Equity Plan, for the nine months ended September 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 6,667 $ 4.35 $ 31,000 $ - Granted 1,538 9.75 $ (1,154 ) $ - Vested (8,205 ) $ 5.40 $ (29,846 ) $ - Forfeited - Expired - Nonvested, September 30, 2021 - $ - $ - During the nine months ended September 30, 2021 and September 30, 2020, the Company incurred $ 21,174 and $ 55,970 , respectively, as compensation expense related to 8,205 and 10,142 vested options, respectively, issued to directors. Effective June 24, 2020 , 13,333 50% upon grant and 50% on April 1, 2021, if the Director remained on the Board up to that time. The options have a term of 5 years and have an exercise price equal to the closing price of the Company’s common stock on The OTC Markets on the day immediately preceding the grant date. Effective August 20, 2021, the Company issued 1,538 non-qualified stock options under the 2021 Equity Plan to its directors. The options vested upon grant. The options have a term of 10 years and an exercise price equal to the closing price of the Company’s common stock on The OTC Markets on the day immediately preceding the grant date. Restricted Stock Units There has been no activity related to RSUs during the nine months ended September 30, 2021. The Company recorded $ 25,163 during the nine months ended September 30, 2020, as compensation expense related to vested RSUs issued to employees, directors and consultants. Effective April 30, 2020, 5,333 RSUs vested. However, the holder elected to cancel the RSUs. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) | Note 14 – Equity Incentive Plan Equity Incentive Plans On August 1, 2017, the Board adopted and approved the Company’s 2017 Equity Incentive Plan (the “2017 Equity Plan”) in order to attract, motivate, retain, and reward high-quality executives and other employees, officers, directors, consultants, and other persons who provide services to the Company by enabling such persons to acquire an equity interest in the Company. Under the 2017 Equity Plan, 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 333,333 shares of the Company’s common stock (“Plan Shares”) for issuance of equity awards under the 2017 Equity Plan. As of December 31, 2020, the Company has granted, under the 2017 Equity Plan, awards in the form of RSAs for services rendered by independent directors and consultants, non-qualified stock options, RSUs and stock bonus awards. The total unrecognized compensation expense for unvested non-qualified stock options at December 31, 2020 was $ 6,412 , which will be recognized over approximately 3 months. Restricted Stock Awards As of December 31, 2018, the Company had accrued fees owed to the Company’s independent directors totaling $ 15,000 , which were payable in equity. During the year ended December 31, 2019, the Company issued 1,316 shares of restricted stock, which were fully vested at the time of the award, in settlement of these accrued fees. During the year ended December 31, 2019, the Company also awarded 5,263 shares of restricted stock under the 2017 Equity Plan to the Company’s independent directors and consultants as an equity retainer fee for 2019. These restricted shares were fully vested at the time of the award and the aggregate value attributable to these shares was $ 60,000 , as calculated using the fair value of the Company’s common stock on date the Board approved these awards. Non-Qualified Stock Options The Company uses the Black-Scholes Model to determine the fair value of options granted. Option-pricing models require the input of highly subjective assumptions, particularly for the expected stock price volatility and the expected term of options. Changes in the subjective input assumptions can materially affect the fair value estimate. The expected stock price volatility assumptions are based on the historical volatility of the Company’s common stock over periods that are similar to the expected terms of grants and other relevant factors. The Company derives the expected term based on an average of the contract term and the vesting period taking into consideration the vesting schedules and future employee behavior with regard to option exercise. The risk-free interest rate is based on U.S. Treasury yields for a maturity approximating the expected term calculated at the date of grant. The Company has never paid any cash dividends on its common stock and the Company has no intention to pay a dividend at this time; therefore, the Company assumes that no dividends will be paid over the expected terms of option awards. 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. The valuation assumptions used to determine the fair value of each option award on the date of grant were: expected stock price volatility 114.97 % - 122.48 %; expected term in 5 years and risk-free interest rate 0.2 % - 2.37 %. Surna Inc. Notes to Consolidated Financial Statements Employee and Consultant Options A summary of the non-qualified stock options granted to employees and consultants under the 2017 Equity Plan during the years ended December 31, 2020 and 2019 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, 2018 70,400 $ 15.60 8.4 $ - Granted 13,333 $ 12.00 Exercised - - Forfeited (16,055 ) $ 17.40 Expired (111 ) $ 15.75 Outstanding, December 31, 2019 67,567 $ 14.40 7.7 $ - Granted 44,113 $ 10.50 10.0 - Exercised - Forfeited - Expired (16,673 ) $ 15.15 4.3 Outstanding, December 31, 2020 95,007 $ 12.45 8.3 $ - Exercisable, December 31, 2020 95,007 $ 12.45 8.3 $ - A summary of non-vested non-qualified stock options activity for employees and consultants under the 2017 Equity Plan for the years ended December 31, 2020 and 2019 are presented in the table below: Summary of Non-vested Non-qualified Stock Option Activity Number of Weighted Aggregate Grant-Date Nonvested, December 31, 2018 48,889 $ 12.90 $ - $ 628,756 Granted 13,333 $ 9.75 $ 130,120 Vested (32,833 ) $ 11.10 $ 362,998 Forfeited (16,056 ) $ 15.30 $ 246,344 Expired - - $ - Nonvested, December 31, 2019 13,333 $ 11.25 $ - $ 149,534 Granted 44,113 $ 8.85 $ 387,199 Vested (57,446 ) $ 9.30 $ 536,733 Forfeited - $ - Expired - $ - Nonvested, December 31, 2020 - $ - $ - For the years ended December 31, 2020 and 2019, the Company recorded $ 189,568 and $ 390,485 as compensation expense related to vested options issued to employees and consultants, net of forfeitures, respectively. As of December 31, 2020, there was no unrecognized share-based compensation related to unvested options. As of December 31, 2020, the Company had granted non-qualified options to purchase 68,333 shares which were performance-based. At December 31, 2020, non-qualified options to purchase 40,000 shares were forfeited due to the failure to satisfy the 2017, 2018 and 2019 revenue-based performance thresholds and 28,333 shares were forfeited due to employee terminations. No compensation expense had been recognized with respect to these performance-based awards since the likelihood of performance levels being obtained was determined to be remote. Surna Inc. Notes to Consolidated Financial Statements Director Options A summary of the non-qualified stock options granted to directors under the 2017 Equity Plan during the years ended December 31, 2020 and 2019 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, 2018 6,000 $ 20.25 8.6 $ - Granted - - Exercised - - Forfeited/Cancelled - - Expired - - Outstanding, December 31, 2019 6,000 $ 20.25 7.6 $ - Granted 43,333 $ 8.55 8.5 Exercised - - Forfeited/Cancelled - - Expired - - Outstanding, December 31, 2020 49,333 $ 10.05 7.5 $ - Exercisable, December 31, 2020 42,667 $ 10.95 8.0 $ - A summary of non-vested non-qualified stock options activity for directors under the 2017 Equity Plan for the years ended December 31, 2020 and 2019 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, 2019 - - $ - Granted - - Vested - - Forfeited - - Expired - - Nonvested, December 31, 2019 - - $ - - Granted 43,333 8.55 $ 373,000 Vested (36,667 ) 9.45 $ 344,000 Forfeited - - $ - Expired - - $ - Nonvested, December 31, 2020 6,666 4.35 $ 5,800 $ 29,000 During the years ended December 31, 2020 and 2019, the Company incurred $ 62,452 and $ 0 , respectively, as compensation expense related to 10,000 and 0 vested options, respectively, issued to directors. As of December 31, 2020, total unrecognized share-based compensation related to unvested options was $ 6,412 . Effective January 2, 2020, the Company issued 26,667 fully vested stock options to directors valued at $ 234,126 in respect of a 2019 special equity award that had been accrued for in full in the Company’s financial statements at December 31, 2019. Further on January 2, 2020, the Company issued an additional 3,333 fully vested, non-qualified stock options under the 2017 Equity Plan valued at $ 29,266 to directors. The options have a term of 5 years and have an exercise price equal to the closing price of the Company’s common stock on The OTC Markets on the day immediately preceding the grant date of $ 10.50. Effective June 24, 2020 , 13,333 non-qualified stock options under the 2017 Equity Plan, valued at $ 39,600 , to newly appointed directors. The options vested 50 % upon grant and 50 % on April 1, 2021, if the Director remains on the Board up to that time. The options have a term of 5 years and have an exercise price equal to the closing price of the Company’s common stock on The OTC Markets on the day immediately preceding the grant date of $ 4.35. As of December 31, 2020, awards related to 144,340 shares remain issued and outstanding. Surna Inc. Notes to Consolidated Financial Statements Restricted Stock Units A summary of the RSUs awarded to employees, directors and consultants under the 2017 Equity Plan during the years ended December 31, 2020 and 2019 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, 2018 65,782 $ 21.00 $ 730,185 Granted - - Vested and settled with share issuance (7,467 ) $ 27.15 Forfeited/canceled (7,982 ) $ 26.85 Outstanding, December 31, 2019 50,333 $ 19.20 $ - Outstanding, December 31, 2019 50,333 $ 19.20 $ - Granted - - Vested and settled with share issuance (45,000 ) $ 18.15 Forfeited/canceled (5,333 ) $ 27.00 Outstanding, December 31, 2020 - - $ - For the years ended December 31, 2020 and 2019, the Company recorded $ 25,163 and $ 278,906 as compensation expense related to vested RSUs issued to employees, directors and consultants. As of December 31, 2020, there was no unrecognized share-based compensation related to unvested RSUs. The total intrinsic value of RSUs vested and settled with share issuance was $ 199,125 and $ 79,120 for the years ended December 31, 2020 and 2019. During the year ended December 31, 2020, the total intrinsic value of RSUs vested and settled with share issuance was $ 1,105,750 , including the intrinsic value of $ 1,035,750 related to RSUs that had vested in 2018 but had not been settled until 2020 due to a dispute with a former employee over the required withholding taxes to be paid to the Company for remittance to the appropriate tax authorities as further discussed in Note 11 Commitments and Contingencies above. Effective April 30, 2020, 5,333 RSUs vested. However, the holder elected to cancel the RSUs. Incentive Stock Bonuses The Company has entered into certain “at-will” employment agreements with certain employees. Under these agreements, the employees are eligible to receive special incentive stock bonuses, provided the Board has determined, in its sole discretion, that the employee’s performance has been average or better for the applicable special bonus period. This special stock incentive bonus is payable only if the employee continues in the employment of the Company. For accounting purposes, the Company treats these special incentive stock bonuses as vesting over each bonus’s service period based on the fair value of the award at the time of grant. Even though these bonuses are subject to Board approval, the awards are vested over each service period because it is more likely than not that the Board will approve the award based on the “average or better” employee performance standard. Since the awards are denominated in shares of common stock, the fair value of the vested bonus is charged to additional paid-in capital. Surna Inc. Notes to Consolidated Financial Statements A summary of the incentive stock bonus awards granted to employees under the 2017 Equity Plan during the years ended December 31, 2020 and 2019 are presented in the table below: Schedule of Incentive Bonus Awards Granted to Employees Number of Shares Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Unvested, December 31, 2018 11,200 $ 16.80 $ 124,320 Awarded - - Vested (11,200 ) $ 16.80 Forfeited - - Unvested, December 31, 2019 - - Awarded - - Vested - - Forfeited - - Unvested, December 31, 2020 - - For the years ended December 31, 2020 and 2019, the Company recorded $ 0 and $ 44,209 as compensation expense related to vested stock bonus awards issued to employees, net of forfeitures of $ 0 and $ 0 , respectively. As of December 31, 2020, there was no unrecognized share-based compensation related to unvested stock bonus awards. The total intrinsic value of stock bonus awards vested and settled with share issuance was $ 0 and $ 58,240 for the years ended December 31, 2020 and 2019, respectively. |
Income Taxes
Income Taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income Taxes | Note 12 – Income Taxes As of September 30, 2021, the Company has U.S. federal and state net operating losses (“NOLs”) of approximately $ 20,260,000 , of which $ 11,196,261 will expire, if not utilized, in the years 2034 through 2037 , however, NOLs generated subsequent to December 31, 2017 do not expire but may only be used against taxable income to 80% . In response to the novel coronavirus COVID-19, the Coronavirus Aid, Relief, and Economic Security Act temporarily repealed the 80% limitation for NOLs arising in 2018, 2019 and 2020. Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, use of the Company’s NOLs carryforwards may be limited in the event of cumulative changes in ownership of more than 50% within a three . Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) 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 September 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. | Note 15 – Income Taxes For financial reporting purposes, there were no provisions for U.S. federal, state or international income taxes for the years ended December 31, 2020 or 2019 due to the Company’s net operating losses (“NOLs”) in such periods and full valuation allowance recorded against the net deferred tax assets. The differences between income taxes expected at the U.S. federal statutory income tax rate and the reported provision for income taxes are summarized as follows: Schedule of U.S. Federal Statutory Income Tax Rate and Reported Provision for Income Taxes 2020 2019 Income taxes computed at the federal statutory rate $ (369,000 ) $ (281,000 ) States taxes, net of federal benefits (69,000 ) (53,000 ) Permanent differences (136,000 ) 17,000 True-up adjustments 115,000 199,000 Adjustment to net operating loss (17,000 ) (86,000 ) Change in valuation allowance 476,000 204,000 Reported income tax (benefit) expense $ - $ - The components of the net deferred tax assets as of December 31, 2020 and 2019 are as follows: Schedule of Deferred Tax Assets 2020 2019 Deferred tax assets: Net operating losses $ 4,821,000 $ 4,081,000 Equity compensation 118,000 392,000 Other deferred tax assets 169,000 149,000 Total deferred tax assets 5,108,000 4,622,000 Deferred tax liabilities: Other deferred tax liabilities (68,000 ) (58,000 ) Total deferred tax liabilities (68,000 ) (58,000 ) Net deferred tax assets before valuation allowance 5,040,000 4,564,000 Less valuation allowance (5,040,000 ) (4,564,000 ) Net deferred tax assets $ - $ - Surna Inc. Notes to Consolidated Financial Statements As of December 31, 2020, the Company has U.S. federal and state net operating losses (“NOLs”) of approximately $ 19,322,000 , of which $ 11,196,261 will expire, if not utilized, in the years 2034 through 2037 , however, NOLs generated subsequent to December 31, 2017 do not expire but may only be used against taxable income to 80 %. In response to the novel coronavirus COVID-19, the Coronavirus Aid, Relief, and Economic Security Act temporarily repealed the 80 % limitation for NOLs arising in 2018, 2019 and 2020. Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, use of the Company’s NOLs carryforwards may be limited in the event of cumulative changes in ownership of more than 50 % within a three -year period. The Company must assess the likelihood that its net deferred tax assets will be recovered from future taxable income, and to the extent the Company believes that recovery is not likely, the Company establishes a valuation allowance. Management’s judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against the net deferred tax assets. The Company recorded a full valuation allowance as of December 31, 2020 and 2019. 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. The Company is subject to examination by the IRS for the calendar year 2016 and thereafter. These examinations may lead to ordinary course adjustments or proposed adjustments to the Company’s taxes or the Company’s net operating losses with respect to years under examination as well as subsequent periods. The Company has filed Colorado state income tax returns for years 2014 through 2019, Alaska, California and Connecticut state income tax returns for the years 2017 through 2019, Michigan state income tax returns for the years 2018 and 2019 and Alabama, District of Columbia, Massachusetts, Oklahoma and Texas state income taxes in 2019. The Company recognizes in its consolidated financial statements the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of operating expense. The Company does not believe there are any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within twelve months of the reporting date. There were no penalties or interest liabilities accrued as of December 31, 2020 or 2019, nor were any penalties or interest costs included in expense for the years ended December 31, 2020 and 2019. |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Subsequent Events [Abstract] | ||
Subsequent Events | Note 14 – Subsequent Events In accordance with ASC 855, Subsequent Events On November 3, 2021, we increased our authorized capital to one billion shares of capital stock, of which 850,000,000 are designated as common stock and 150,000,000 are designated as preferred stock. On November 3, 2021, we were authorized to redeem the outstanding Series A Preferred Stock, which was completed on November 4, 2021. On November 4, 2021, we received the remaining $ 1,365,000 from escrow in relation to the Series B Preferred Stock. On January 17, 2022, the Company’s Board of Directors approved a reverse stock split at a ratio of one-for-one hundred and fifty. Such reverse stock split was implemented effective January 27, 2022. 200,000,000 25,000,000 All Common Stock, warrants, options and per share amounts set forth herein are presented to give retroactive effect to the Reverse Split for all periods presented. On January 28, 2022, the Company agreed with the Series B investor to redeem 1,650 2.0 | Note 16 – Subsequent Events In accordance with ASC 855, Subsequent Events The Board approved annual incentive compensation awards to certain employees payable in non-qualified stock options, based on the Company’s performance and each employee’s contributions to such performance for the 2020 year. A total of 6,905 non-qualified stock options were granted under the 2017 Equity Plan subsequent to December 31, 2020, with an exercise price of $ 19.50 per share. These non-qualified stock options were immediately vested at the date of the grant. The estimated compensation expense of $ 128,434 related to the 2020 incentive awards was accrued as of December 31, 2020. The accrued compensation expense was classified as a current liability as of December 31, 2020. As further discussed in Note 10 Related Party Agreements and Transactions 6,500 for up to 50 hours per month for the various consulting activities undertaken and provide for reimbursement of expenses. The term of the agreement is set for three months. Any intellectual property developed by RSX will belong to the Company, and the contract provides for typical indemnification obligations and confidentiality provisions. As further discussed in Note 9 Note Payable and Accrued Interest 514,200 for working capital purposes. Consistent with the loan provisions, the Company will use the proceeds to meet payroll and benefit expenses as well as for rent and utilities. The loan amount bears interest at 1 % and is due on February 5, 2026. The loan may be repaid in advance without penalty. The loan has typical default provisions, including for change of ownership, general lender insecurity as to repayment, non-payment of amounts due, defaults on other debt instruments, insolvency, dissolution or termination of the business as a going concern and bankruptcy. As further discussed in Note 11 Commitments and Contingencies above, a former employee is pursuing litigation against the Company for recovery of alleged consulting fees owed to him for the 2015 calendar year prior to his appointment as an executive officer of the Company. The Company strongly disputes the ongoing litigation and in the remote event of an adverse outcome, the amount of any settlement loss for this case is not reasonably estimable as of the date of the issuance of these financial statements. On January 17, 2022, the Company’s Board of Directors approved a reverse stock split at a ratio of one-for-one hundred and fifty. Such reverse stock split was implemented effective January 27, 2022. The par value for the Common Stock was not affected. In connection with the aforementioned reverse stock split, the Company’s Board of Directors approved the reset of the authorized capital of the Company to be 200,000,000 25,000,000 All Common Stock, warrants, options and per share amounts set forth herein are presented to give retroactive effect to the Reverse Split for all periods presented. On January 28, 2022, the Company agreed with the Series B investor to redeem 1,650 2.0 |
Temporary Equity
Temporary Equity | 9 Months Ended |
Sep. 30, 2021 | |
Temporary Equity | |
Temporary Equity | Note 8 – Temporary Equity Series B Redeemable Convertible Preferred Stock On September 28, 2021, Surna Inc. (the “Company”) sold to an institutional investor (the “Investor”), 3,300 shares of Series B Convertible Preferred Stock, stated value $ 1,000 per share, currently convertible into 385,965 shares of common stock, and a warrant to purchase up to 192,982 shares of common stock (“Investor Warrant”), for an aggregate purchase price of $ 3,000,000 (“Consideration”). The Company will receive net proceeds of approximately $ 2,625,000 . The Company has received net proceeds of approximately $ 1,260,000 in the quarter and will receive the remaining $ 1,365,000 pursuant to the terms of the escrow. The Series B Preferred Stock has an annual dividend of 8 % and has an initial common stock conversion price of $ 8.55. The conversion rate is subject to adjustment in various circumstances, including stock splits, stock dividends, pro rata distributions, fundamental transactions and upon a triggering event and subject to reset if the common stock of the Company sold in any subsequent equity transaction, including a qualified offering, is sold at a price below the then conversion price. The Series B Preferred Stock is mandatorily convertible on the third anniversary of its issuance. All conversions of the Series B Preferred Stock are subject to a blocker provision of 4.99 %. The Company will reserve 200 % of the number of shares of common stock into which the Series B Preferred Stock and Investor Warrant may be converted or exercised. Pending completion of an amendment to the certificate of incorporation to increase the number of authorized shares of common stock and redeem the outstanding Series A Preferred Stock, as required by the Investor, $ 1,365,000 of the Consideration was placed in escrow. The Company filed a Schedule 14C to affect the amendment and expects the amendment process to be completed in early November, at which time the escrowed amount will be released to the Company. If the amendment process is not achieved by December 7, 2021, then the Company will redeem, at 120 % of the stated value of $ 1,000 per share, 1,650 shares of the Series B Preferred Stock, and pay the dividend amount due thereon at 8 % to the date of redemption. The Series B Preferred Stock will be redeemed at the demand by the holders, at 120 % of the stated value of $ 1,000 , at any time after the earlier of (x) the consummation by the Company of a qualified offering, or (y) the first anniversary of the issuance of the Series B Preferred Shares. The Investor was granted a right of participation in future private offerings and has agreed to a 180-day lock-up in connection with a qualified offering. A “qualified offering” is the first public offering after the sale of the Series B Preferred Stock in which the common stock of the Company is listed on a national exchange. The Investor Warrant may be exercised until September 28, 2024 , at an initial exercise price of $ 9.41, subject to adjustment. The Investor Warrant provides for cashless exercise if the underlying shares of common stock are not registered for resale, and all issuances of common stock upon exercise are subject to a 4.99 % blocker provision. The Company granted the Investor registration rights for the shares of common stock underlying the Series B Preferred Stock and the Investor Warrants. The Company must file a registration statement no later than 180 days after the date of a qualified offering and have it effective in 45 days if there is no Securities and Exchange Commission (“SEC”) review, or if there is a review, within 75 days. The Company must keep the registration statement effective until all the shares registered have been sold or may be sold under Rule 144, without regard to volume and holding period restrictions. The Company engaged ThinkEquity LLC (“ThinkEquity”) as its placement agent and paid a total cash fee of 9 %, or $ 270,000 , and its expenses, less prepaid expenses, and issued to ThinkEquity and its designees a warrant to purchase up to an aggregate of 34,737 shares of common stock. The exercise price of the warrant initially will be $ 10.40 per share, subject to typical adjustment provisions, and exercisable for a term of three years. The warrant has registration rights. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) Probability of Redemption: As it was considered probable the Series B Preferred stock will become redeemable outside of the Company’s control, the Series B Preferred stock needs to be disclosed as temporary equity and restated at the balance sheet date at its redemption value of 120 % the stated value of $ 1,000 per share, or $ 3,960,000 . As a result, on September 30, 2021, the Company adjusted the carrying value of the Series B Preferred Stock to its redemption value of $ 3,960,000 and recorded a $ 2,262,847 non-cash redemption value adjustment. This redemption value adjustment is treated as similar to a dividend on the preferred stock for GAAP purposes; accordingly, the redemption value adjustment is therefore added to the “Net Loss” to arrive at “Net Loss Attributable to Common Shareholders’” on the Company’s Consolidated Statements of Operations. In addition, since the Company does not have a balance of retained earnings, the redemption value adjustment was recorded against additional paid-in capital. Series B Redeemable Convertible Stock Subscription Receivable Of the net proceeds of $ 2,624,874 receivable under the Securities Purchase Agreement relating to the Series B preferred stock and related warrants, $ 1,365,000 was put into escrow pending the completion of i) an amendment to the Articles of Incorporation to increase the number of authorized shares of common stock to 850,000,000 shares, (ii) the redemption of the outstanding shares of Series A Preferred Stock of the Company for common stock at the rate of one 0.0067 (iii) the authorization of a reverse stock split of the common stock in connection with the listing of the common stock on an eligible market (as defined in the Purchase Agreement), and, if the number of authorized shares of common stock is reduced in connection with such reverse stock split, the subsequent increase of the authorized shares of capital stock of the Company within established limits, at any time prior to June 30, 2022, and (iv) an amendment to the articles of incorporation to change the corporate name of the Company to CEA Industries Inc. If these amendments are completed by December 7, 2021, then the remaining $ 1,365,000 funds held in escrow will be released to the Company. Accordingly, as of September 30, 2021, these funds were disclosed as Series B Redeemable Convertible Stock Subscription Receivable on the Company’s consolidated balance sheet |
Stockholders_ Deficit
Stockholders’ Deficit | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Stockholders’ Deficit | Note 9 – Stockholders’ Deficit Preferred Stock As of September 30, 2021, and December 31, 2020, the Company has 150,000,000 shares authorized at a $ 0.00001 par value. Series A Preferred Stock As of September 30, 2021, and December 31, 2020, the Company has 42,030,331 shares issued and outstanding at the end of both periods. Series B Preferred Stock On September 28, 2021, the Company entered into a Securities Purchase Agreement (“Purchase Agreement”) with an institutional investor (the “Investor”), pursuant to which the Investor purchased from the Company 3,300 shares of Series B Preferred Stock with a stated value of $ 1,000 per share, or $ 3,300,000 of stated value in the aggregate (“Series B Preferred Stock”), and a warrant to purchase up to 192,982 shares of common stock of the Company (“Investor Warrant”), for an aggregate purchase price of $ 3,000,000 (“Consideration”). As a result of the PIPE Financing, referenced above and described in Note 8 3,300 shares issued and outstanding as of September 30, 2021. Common Stock As of September 30, 2021, and December 31, 2020, the Company was authorized to issue 350,000,000 shares of common stock with a par value of $ 0.00001 per share. Effective December 31, 2020, 1,576,844 shares of common stock were issued and outstanding. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) During the nine months ended September 30, 2021, we issued 6,667 shares of common stock, valued at $ 67,000 as part of a legal settlements further described in Note 7 – Commitments and Contingencies – litigation above. Consequently, effective September 30, 2021, 1,583,511 shares of common stock were issued and outstanding. |
Basis of Presentation; Summar_2
Basis of Presentation; Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Financial Statement Presentation | Financial Statement Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 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. | Financial Statement Presentation The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect reported amounts and related disclosures. As further discussed in Note 3 Going Concern |
Reverse Stock Split | Reverse Stock Split On January 17, 2022, the Company’s Board of Directors approved a reverse stock split at a ratio of one-for-one hundred and fifty. Such reverse stock split was implemented effective January 27, 2022. All Common Stock, warrants, options and per share amounts set forth herein are presented to give retroactive effect to the Reverse Split for all periods presented. | Reverse Stock Split On January 17, 2022, the Company’s Board of Directors approved a reverse stock split at a ratio of one-for-one hundred and fifty. Such reverse stock split was implemented effective January 27, 2022. All Common Stock, warrants, options and per share amounts set forth herein are presented to give retroactive effect to the Reverse Split for all periods presented Surna Inc. Notes to Consolidated Financial Statements |
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. | Principles of Consolidation The 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. |
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 September 30, 2021 (in US Dollars except share numbers) (Unaudited) | 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 as it applies to impairment analysis, valuation of equity-based compensation, valuation of deferred tax assets and liabilities, warranty accruals, inventory allowances, and legal contingencies. |
Cash and Cash Equivalents | Cash and Cash Equivalents 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. | |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivables are recorded at the invoiced amount or based on revenue earned for items not yet invoiced, and generally do not bear interest. An allowance for doubtful accounts is established, as necessary, based on past experience and other factors, which, in management’s judgment, deserve current recognition in estimating bad debts. Based on the Company’s review, it establishes or adjusts the allowance for specific customers and the accounts receivable portfolio as a whole. As of December 31, 2020, and December 31, 2019, the allowance for doubtful accounts was $ 165,098 and $ 151,673 , respectively. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. | |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value. The inventory is valued based on a first-in, first-out (“FIFO”) basis. Lower of cost or net realizable value is evaluated by considering obsolescence, excessive levels of inventory, deterioration and other factors. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolescence or impaired inventory. Excess and obsolete inventory is charged to cost of revenue and a new lower-cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. As of December 31, 2020, and December 31, 2019, the allowance for excess and obsolete inventory was $ 93,045 and $ 71,376 , respectively. | |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. For financial statement purposes, property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives, which is generally five years . Leasehold improvements are amortized on a straight-line basis over the lesser of their useful lives or the life of the lease. Upon sale or retirement of assets, the cost and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss is reflected in operations. Maintenance and repairs are charged to operations as incurred. | |
Long-lived Assets | Long-lived Assets Long-lived tangible assets, including property and equipment, are reviewed for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related asset’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. The Company has not identified any indicators of impairment during the years ended December 31, 2020 and 2019. Surna Inc. Notes to Consolidated Financial Statements | |
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 nine months ended September 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 September 30, 2021 and concluded that no impairment relating to goodwill existed at September 30, 2021. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) | Goodwill and Intangible Assets The Company recorded goodwill in connection with its acquisition of Hydro in July 2014. Goodwill is reviewed for impairment annually on December 31 st Separable identifiable intangibles consist of intellectual property such as patents and trademarks, and capitalized website costs. Except for trademarks, which are not amortized, the Company’s separable identifiable intangible assets are subject to amortization on a straight-line basis over their estimated useful lives. Trademarks are tested annually for impairment. Separable identifiable intangibles are also subject to evaluation for potential impairment if events or circumstances indicate the carrying value may not be recoverable. |
Fair Value Measurement | Fair Value Measurement The Company records its financial assets and liabilities at fair value. The accounting standard for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting standard establishes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 - inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 - inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 - inputs are unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. Due to their short-term nature, the carrying values of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses, approximate fair value. | |
Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses the Black-Scholes Option Pricing Model (the “Black-Scholes Model”) to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date. As of December 31, 2020, and December 31, 2019, there were no derivative financial instruments. Surna Inc. Notes to Consolidated Financial Statements | |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 (Topic 606), Revenue from Contracts with Customers Under the revenue standard, a performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. Most of the Company’s contracts contain multiple performance obligations that include engineering and technical services as well as the delivery of a diverse range of climate control system equipment and components, which can span multiple phases of a customer’s project life cycle from facility design and construction to equipment delivery and system installation and start-up. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When there are multiple performance obligations within a contract, the Company allocates the transaction price to each performance obligation based on standalone selling price. When estimating the selling price, the Company uses various observable inputs. The best observable input is the Company’s actual selling price for the same good or service, however, this input is generally not available for the Company’s contracts containing multiple performance obligations. For engineering services, the Company estimates the standalone selling price by reference to certain physical characteristics of the project, such as facility size and mechanical systems involved, which are indicative of the scope and complexity of the mechanical engineering services to be provided. For equipment sales, the standalone selling price is determined by forecasting the expected costs of the equipment and then adding an appropriate margin, based on a range of acceptable margins established by management. Depending on the nature of the performance obligations, the Company may use a combination of different methods and observable inputs if certain performance obligations have highly variable or uncertain standalone selling prices. Once the selling prices are determined, the Company applies the relative values to the total contract consideration and estimates the amount of the transaction price to be recognized as each performance obligation is fulfilled. The Company recognizes revenue for the sale of goods when control transfers to the customer, which primarily occurs at the time of shipment. The Company’s historical rates of return are insignificant as a percentage of sales and, as a result, the Company does not record a reserve for returns at the time the Company recognizes revenue. The Company has elected to exclude from the measurement of the transaction price all taxes (e.g., sales, use, value added, and certain excise taxes) that are assessed by a governmental authority in connection with a specific revenue-producing transaction and collected by the Company from the customer. Accordingly, the Company recognizes revenue net of sales taxes. The revenue and cost for freight and shipping is recorded when control over the sale of goods passes to the Company’s customers. The Company also has performance obligations to perform certain engineering services that are satisfied over a period of time. Revenue is recognized from this type of performance obligation as services are rendered based on the percentage completion towards certain specified milestones. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) The Company offers assurance-type warranties for its products and products manufactured by others to meet specifications defined by the contracts with customers and does not have any material separate performance obligations related to these warranties. The Company maintains a warranty reserve based on historical warranty costs. Applying the practical expedient in ASC 606-10-32-18, which the Company has elected, the Company does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Accordingly, the remaining performance obligations related to customer contracts does not consider the effects of the time value of money. Applying the practical expedient in ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred since the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs include certain sales commissions and incentives, which are included in selling, general and administrative expenses, and are payable only when associated revenue has been collected and earned by the Company. The Company does not have material amounts of contract assets since revenue is recognized as control of goods is transferred or as services are performed. Contract liabilities consist of advance payments and deferred revenue. For the three and nine months ended September 30, 2021, the Company recognized revenue of $ 283,452 and $ 3,357,068 , respectively, related to the deferred revenue at January 1, 2021. For the three and nine months ended September 30, 2020, the Company recognized revenue of $ 9,141 and $ 1,074,016 , respectively, related to the deferred revenue at January 1, 2020. Remaining performance obligations, or backlog, represents the aggregate amount of the transaction price allocated to the remaining obligations that the Company has not performed under its customer contracts. The Company has elected not to use the optional exemption in ASC 606-10-50-14, which exempts an entity from such disclosures if a performance obligation is part of a contract with an original expected duration of one year or less. Accordingly, the information disclosed about remaining performance obligations includes all customer contracts, including those with an expected duration of one year or less. Industry uncertainty, project financing concerns, and the licensing and qualification of our prospective customers, which are out of the Company’s control, make it difficult for the Company to predict when it will recognize revenue on its remaining performance obligations. There are risks that the Company may not realize the full contract value on customer projects in a timely manner or at all, and completion of a customer’s cultivation facility project is dependent upon the customer’s ability to secure funding and real estate, obtain a license and then build their cultivation facility so they can take possession of the equipment. Accordingly, the time it takes for customers to complete a project, which corresponds to when the Company is able to recognize revenue, is driven by numerous factors including: (i) the large number of first-time participants interested in the indoor cannabis cultivation business; (ii) the complexities and uncertainties involved in obtaining state and local licensure and permitting; (iii) local and state government delays in approving licenses and permits due to lack of staff or the large number of pending applications, especially in states where there is no cap on the number of cultivators; (iv) the customer’s need to obtain cultivation facility financing; (v) the time needed, and coordination required, for our customers to acquire real estate and properly design and build the facility (to the stage when climate control systems can be installed); (vi) the large price tag and technical complexities of the climate control and air sanitation system; (vii) the availability of power; and (viii) delays that are typical in completing any construction project. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) As of September 30, 2021, the Company’s remaining performance obligations, or backlog, was $ 9,881,000 , of which $ 1,161,000 , or 12 %, was attributable to customer contracts for which the Company has only received an initial advance payment to cover the allocated value of the Company’s engineering services (“engineering only paid contracts”). There is the risk that the equipment portion of these engineering only paid contracts will not be completed or will be delayed. These reasons include the customer being dissatisfied with the quality or timeliness of the Company’s engineering services, delay or abandonment of the project because of the customer’s inability to obtain project financing or licensing, or other reasons such as a challenging business climate including an overall post-Covid-19 economic disruption or change in business direction. After the customer has made an advance payment for a portion of the equipment to be delivered under the contract (“partial equipment paid contracts”), the Company is typically better able to estimate the timing of revenue recognition since the risks and delays associated with licensing, permitting and project funding are typically mitigated once the initial equipment payment is received. There is significant uncertainty regarding the timing of the Company’s recognition of revenue on its remaining performance obligations, and there is no certainty that these will result in actual revenues. The backlog at September 30, 2021, includes booked sales orders of $ 1,250,000 from several customers that the Company does not expect to be realized until late 2022. The Company believes the sales orders in this portion of our backlog have an elevated level of risk and may, ultimately, be delayed or cancelled by our customers. 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 $ 112,000 $ 1,049,000 $ 1,161,000 Remaining performance obligations related to partial equipment paid contracts 3,091,000 5,629,000 $ 8,720,000 Total remaining performance obligations $ 3,203,000 $ 6,678,000 $ 9,881,000 The following table sets forth the Company’s revenue by source: Schedule of Revenue by Source For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Equipment and systems sales $ 3,523,948 $ 1,481,961 $ 9,933,313 $ 4,575,855 Engineering and other services 110,538 114,160 464,269 402,837 Shipping and handling 71,950 38,548 184,888 148,326 Total revenue $ 3,706,436 $ 1,634,669 $ 10,582,470 $ 5,127,018 | Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 (Topic 606), Revenue from Contracts with Customers The following table sets forth the Company’s revenue by source: Schedule of Revenue by Source For the Years Ended December 31, 2020 2019 Equipment and systems sales $ 7,730,371 $ 13,692,863 Engineering and other services 568,131 1,239,130 Shipping and handling 215,770 292,461 Total revenue $ 8,514,272 $ 15,224,454 Revenue Recognition Accounting Policy Summary The Company accounts for revenue in accordance with ASC 606. 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. The Company does not provide construction services or system installation services. Some of the Company’s contracts with customers contain a single performance obligation, typically engineering only services contracts. 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 components 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 promise is fulfilled. Generally, satisfaction occurs when control of the promised goods is transferred to the customer or as services are rendered or completed in exchange for consideration in an amount for which the Company expects to be entitled. 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. Surna Inc. Notes to Consolidated Financial Statements Other Judgments and Assumptions The Company typically receives customer payments in advance of its performance of services or transfers of goods. 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. Contract Assets and Contract Liabilities Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. The Company receives payments from customers based on the terms established in its contracts. Contract assets include unbilled amounts where revenue recognized exceeds the amount billed to the customer and the right of payment is conditional, subject to completing a milestone, such as a phase of a project. The Company typically does not have material amounts of contract assets since revenue is recognized as control of goods are transferred or as services are performed. As of December 31, 2020, and 2019, the Company had no contract assets. Contract liabilities consist of advance payments in excess of revenue recognized. The Company’s contract liabilities are recorded as a current liability in deferred revenue in the consolidated balance sheets since the timing of when the Company expects to recognize revenue is generally less than one year. As of December 31, 2020, and December 31, 2019, deferred revenue, which was classified as a current liability, was $ 3,724,189 and $ 1,444,472 , respectively. For the year ended December 31, 2020, the Company recognized revenue of $ 1,103,447 related to the deferred revenue at January 1, 2020, or 76% . For the year ended December 31, 2019, the Company recognized revenue of $ 473,682 related to the deferred revenue at January 1, 2019, or 74% . Remaining Performance Obligations 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. Further, based on the current economic climate, the uncertainty regarding the COVID-19 virus, and the Company’s recent cost cutting measures, there is no assurance that the Company will be able to fulfill its backlog, and the Company may experience contract cancellations, project scope reductions and project delays. Surna Inc. Notes to Consolidated Financial Statements As of December 31, 2020, the Company’s remaining performance obligations, or backlog, was $ 8,448,000 , of which $ 2,643,000 , or 31% , was attributable to customer contracts for which the Company has only received an initial advance payment to cover the allocated value of the Company’s engineering services (“engineering only paid contracts”). There is the risk that the equipment portion of these engineering only paid contracts will not be completed or will be delayed. The reasons include the customer being dissatisfied with the quality or timeliness of the Company’s engineering services, delay or abandonment of the project because of the customer’s inability to obtain project financing or licensing, or other reasons such as a challenging business climate including an overall post-COVID-19 economic downturn, or change in business direction. After the customer has made an advance payment for a portion of the equipment to be delivered under the contract (“partial equipment paid contracts”), the Company is typically better able to estimate the timing of revenue recognition since the risks and delays associated with licensing, permitting and project funding are typically mitigated once the initial equipment payment is received. There is significant uncertainty regarding the timing of the Company’s recognition of revenue on its remaining performance obligations, and there is no certainty that these will result in actual revenues. The backlog at December 31, 2020, includes booked sales orders of $ 390,000 from several customers that the Company does not expect to be realized until 2022, if at all. Given the present economic uncertainty arising from the impact of the novel coronavirus COVID-19, the Company believes that several of its current contracts may be delayed or canceled. 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 $ 2,355,000 $ 288,000 $ 2,643,000 Remaining performance obligations related to partial equipment paid contracts 5,703,000 102,000 $ 5,805,000 Total remaining performance obligations $ 8,058,000 $ 390,000 $ 8,448,000 |
Product Warranty | Product Warranty The Company warrants the products that it manufactures for a warranty period equal to the lesser of 12 months from start-up or 18 months from shipment. The Company’s warranty provides for the repair, rework, or replacement of products (at the Company’s option) that fail to perform within stated specification. The Company’s third-party suppliers also warrant their products under similar terms, which are passed through to the Company’s customers. The Company assesses the historical warranty claims on its manufactured products and, since 2016, warranty claims have been approximately 1% of annual revenue generated on these products. Based on the Company’s warranty policy, an accrual is established at 1% of the trailing 18 months revenue. The Company continues to assess the need to record a warranty reserve at the time of sale based on historical claims and other factors. As of December 31, 2020, and December 31, 2019, the Company had an accrued warranty reserve amount of $ 173,365 and $ 185,234 , respectively, which are included in accounts payable and accrued liabilities on the Company’s consolidated balance sheets. | |
Cost of Sales | Cost of Sales Cost of sales includes product costs (material, direct labor and overhead costs), shipping and handling expense, outside engineering costs, engineering, project management and service salaries and benefits, client visits and warranty. | |
Concentrations | Concentrations Three customers accounted for 38 %, 23 %, and 11 % of the Company’s revenue for the three months ended September 30, 2021 and three customers accounted for 25 %, 12 % and 12 % of the Company’s revenue for the nine months ended September 30, 2021. Two customers accounted for 39 % and 30 % of the Company’s revenue for the three months ended September 30, 2020 and three customers accounted for 18 %, 17 % and 11 % of the Company’s revenue for the nine months ended September 30, 2020. Three customers accounted for 40 %, 26 % and 22 % of the Company’s accounts receivable as of September 30, 2021. As of September 30, 2020, four customers accounted for 32 %, 23 %, 21 % and 10 % of the Company’s accounts receivable. | Concentrations Three customers accounted for 28% , 11% and 10% of the Company’s revenue for the year ended December 31, 2020. One customer accounted for 44% of the Company’s revenue for the year ended December 31, 2019. The Company’s accounts receivable from two customers made up 48% and 38% , respectively, of the total balance as of December 31, 2020. The Company’s accounts receivable from three customers made up 59% , 16% , and 10% , respectively, of the total balance as of December 31, 2019. Three suppliers accounted for 27% , 25% and 12% of the Company’s purchases of inventory for the year ended December 31, 2020, and three suppliers accounted for 30% , 17% and 12% of the Company’s purchases of inventory for the year ended December 31, 2019. Surna Inc. Notes to Consolidated Financial Statements |
Product Development | Product Development The Company expenses product development costs as incurred. Internal product development costs are expensed as incurred, and third-party product developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. For the years ended December 31, 2020 and December 31, 2019, the Company incurred $ 390,229 and $ 521,044 , respectively, on product development. | |
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 nine months ended September 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 150.2 % to 152.51 %; expected term in years 10 0.55% to 1.49 %. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) 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 nine months ended September 30, 2021 and 2020: Schedule of Share-based Compensation Costs For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Share-based compensation expense included in: Cost of revenue $ - $ 6,833 $ 29,944 $ 23,949 Advertising and marketing expenses - 2,500 13,292 7,500 Product development costs - 5,444 14,029 16,332 Selling, general and administrative expenses 29,307 41,221 102,735 306,448 Total share-based compensation expense included in consolidated statement of operations $ 29,307 $ 55,998 $ 160,000 $ 354,229 Included in the expense for the three and nine months ended September 30, 2021, is an accrual for $ 0 and $ 108,945 , respectively, for the 2021 Annual Employee Incentive Compensation Plan. Included in the expense for the three and nine months ended September 30, 2020, is an accrual for $ 31,575 and $ 101,472 , respectively, for the 2020 Annual Employee Incentive Compensation Plan. | 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 consolidated financial statements based on their grant date fair value. For awards subject to service conditions, compensation expense is recognized over the vesting period on a straight-line basis. Awards subject to performance conditions are attributed separately for each vesting tranche of the award and are recognized ratably from the service inception date to the vesting date for each tranche, based on the probability of vesting. The probability of awards with future performance conditions is evaluated each reporting period and compensation expense is adjusted based on the probability assessment. Awards are considered granted, and the service inception date begins, when mutual understanding of the key terms and conditions of the award between the Company and the recipient has been established. For awards that provide discretion to adjust the amount of the award, the service inception date for such awards could precede the grant date as a mutual understanding of the key terms and conditions of the award between the Company and the recipient has not yet been established. For awards in which the service inception date precedes the grant date, compensation cost is accrued beginning on the service inception date. Subsequent to December 31, 2020, the Company’s Board of Directors (the “Board”) approved annual incentive compensation awards to certain employees payable in non-qualified stock options, based on the Company’s performance and each employee’s contributions to such performance for the 2020 year. See Note 16. The non-qualified stock options were granted subsequent to December 31, 2020, were not subject to an additional service requirement and were immediately vested at the date of the grant. The final amount of the annual incentive compensation award, and number of non-qualified stock options granted, were determined, and communicated to the employee, subsequent to December 31, 2020. The estimated compensation expense of $ 128,434 related to the 2020 incentive awards was accrued as of December 31, 2020. Since such incentive awards will be settled in non-qualified stock options, the accrued compensation expense has been classified as a current liability until the number of non-qualified stock options is fixed pursuant to a grant by the Board. At that time, the incentive award becomes equity-classified. The grant date fair value of stock options is based on 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 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. Share-based compensation costs (including expenses from the accrued compensation liabilities related to the annual incentive awards subsequently settled in non-qualified stock options totaled $ 405,617 and $ 1,292,065 for the years ended December 31, 2020 and 2019, respectively. Such share-based compensation costs are classified in the Company’s consolidated financial statements in the same manner as if such compensation was paid in cash. Surna Inc. Notes to Consolidated Financial Statements The following is a summary of such share-based compensation costs included in the Company’s consolidated statements of operations for the years ended December 31, 2020 and 2019: Schedule of Share-based Compensation Costs For the Years Ended December 31, 2020 2019 Share-based compensation expense included in: Cost of revenue $ 31,006 $ 91,081 Advertising and marketing expenses 8,333 33,977 Product development costs 21,882 45,330 Selling, general and administrative expenses 344,396 1,121,677 Total share-based compensation expense included in consolidated statement of operations $ 405,617 $ 1,292,065 |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process in which: (i) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position, and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with the related tax authority. | |
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 nine months ended September 30, 2021 and 2020, there were warrants and options outstanding to purchase Company common stock and shares of convertible preferred stock and restricted stock units that were convertible into shares of the Company’s common stock. During the three- and nine-month periods ended September 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. As of September 30, 2021, and 2020, there were respectively, 777,888 and 293,383 potentially dilutive equity instruments outstanding in respect of shares of convertible preferred stock and warrants and options outstanding to purchase Company common stock. | Basic and Diluted Net 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 periods when losses are reported 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. As of December 31, 2020, 194,757 potential common shares equivalents from warrants and options were excluded from the diluted EPS calculations as their effect is anti-dilutive. |
Commitments and Contingencies | Commitments and Contingencies In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, customer disputes, government investigations and tax matters. An accrual for a loss contingency is recognized when it is probable that an asset had been impaired or a liability had been incurred and the amount of loss can be reasonably estimated. | |
Other Risks and Uncertainties | Other Risks and Uncertainties To achieve profitable operations, the Company must successfully develop, manufacture and market its products. There can be no assurance that any such products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products will be successfully marketed. These factors could have a material adverse effect upon the Company’s financial results, financial position, and future cash flows. Surna Inc. Notes to Consolidated Financial Statements The Company is subject to risks common to similarly-situated companies including, but not limited to, general economic conditions, its customers’ operations and access to capital, and market and business disruptions including severe weather conditions, natural disasters, health hazards, terrorist activities, financial crises, political crises or other major events, or the prospect of these events, new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, uncertainty of market acceptance of products, product liability, and the need to obtain additional financing. As a supplier of services and equipment to cannabis cultivators, the Company is also subject to risks related to the cannabis industry. Although certain states have legalized medical and/or recreational cannabis, U.S. federal laws continue to prohibit marijuana in all its forms as well as its derivatives. Any changes in the enforcement of U.S. federal laws may adversely affect the implementation of state and local cannabis laws and regulations that permit medical or recreational cannabis and, correspondingly, may adversely impact the Company’s customers. The Company’s success is also dependent upon its ability to raise additional capital and to successfully develop and market its products. See Note 3. | |
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Company’s senior management team in deciding how to allocate resources and in assessing performance. The Company has one operating segment that is dedicated to the manufacture and sale of its products. | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company early adopted ASU 2020-06 effective January 1, 2021. The early adoption of ASU 2020-06 impacted the Company’s accounting for the issuance of its Series B Redeemable Convertible Preferred Stock as further discussed in Note 8 Temporary Equity Series B Redeemable Convertible Preferred Stock 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. | Recently Issued Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06: “ Accounting for Convertible Instruments and Contracts In An Entity’s Own Equity” (“ASU 2020-06”) 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. |
Description of Business | Description of Business Surna Inc. (the “Company”) was incorporated in Nevada on October 15, 2009 and operates under the trade name of Surna Cultivation Technologies. We are headquartered in Boulder, Colorado. Surna Inc. is an engineering and design company focused on selling environmental control and other technologies and services to the Controlled Environment Agriculture (CEA) industry. We leverage our experience in this space to bring value-added technology solutions to our customers that help improve their overall crop quality and yield, optimize energy and water efficiency, and satisfy evolving state and local construction codes, permitting and regulatory requirements. In service of the CEA industry, our principal service and product offerings include: (i) architectural design and licensed engineering of commercial scale thermodynamic systems specific to cultivation facilities, (ii) liquid-based process cooling systems and other climate control systems, (iii) air handling equipment and systems, (iv) LED lighting, benching and racking solutions for indoor cultivation, (v) automation and control devices, systems and technologies used for environmental, lighting and climate control, and (vi) preventive maintenance services for CEA facilities. Our customers include commercial, state- and provincial-regulated CEA growers in the U.S. and Canada and 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 operating in the cannabis industry, ranging from several thousand to more than 100,000 square feet. Although most of 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 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, a general shortage of containers, and domestic truck driver availability. 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 September 30, 2021 (in US Dollars except share numbers) (Unaudited) | |
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. | |
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. | |
Temporary Equity | Temporary Equity Shares of preferred stock that are redeemable for cash or other assets are classified as temporary equity if they are redeemable, at the option of the holder, at a fixed or determinable price on a fixed or determinable date or upon the occurrence of an event that is not solely within the control of the issuer. Redeemable equity instruments are initially carried at the fair value of the equity instrument at the issuance date, net of issuance costs, which is subsequently adjusted to redemption value (including the amount for dividends earned but not yet declared or paid) at each balance sheet date if the instrument is currently redeemable or if it is probable that the instrument will become redeemable. The Company determined it is probable the Series B Preferred Stock will become redeemable at the option of the holder. As a result, on September 30, 2021, the Company adjusted carrying value of the Series B Preferred Stock to its redemption value of $ 3,960,000 and recorded a $ 2,262,847 non-cash redemption value adjustment. This redemption value adjustment is treated as similar to a dividend on the preferred stock for GAAP purposes, accordingly, the redemption value adjustment is therefore added to the “Net Loss” to arrive at “Net Loss Attributable to Common Shareholders’” on the Company’s Consolidated Statements of Operations. In addition, as the Company does not have a balance of retained earnings, the redemption value adjustment was recorded against additional paid-in capital. |
Basis of Presentation; Summar_3
Basis of Presentation; Summary of Significant Accounting Policies (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
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 September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Equipment and systems sales $ 3,523,948 $ 1,481,961 $ 9,933,313 $ 4,575,855 Engineering and other services 110,538 114,160 464,269 402,837 Shipping and handling 71,950 38,548 184,888 148,326 Total revenue $ 3,706,436 $ 1,634,669 $ 10,582,470 $ 5,127,018 | The following table sets forth the Company’s revenue by source: Schedule of Revenue by Source For the Years Ended December 31, 2020 2019 Equipment and systems sales $ 7,730,371 $ 13,692,863 Engineering and other services 568,131 1,239,130 Shipping and handling 215,770 292,461 Total revenue $ 8,514,272 $ 15,224,454 |
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 $ 112,000 $ 1,049,000 $ 1,161,000 Remaining performance obligations related to partial equipment paid contracts 3,091,000 5,629,000 $ 8,720,000 Total remaining performance obligations $ 3,203,000 $ 6,678,000 $ 9,881,000 | 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 $ 2,355,000 $ 288,000 $ 2,643,000 Remaining performance obligations related to partial equipment paid contracts 5,703,000 102,000 $ 5,805,000 Total remaining performance obligations $ 8,058,000 $ 390,000 $ 8,448,000 |
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 nine months ended September 30, 2021 and 2020: Schedule of Share-based Compensation Costs For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Share-based compensation expense included in: Cost of revenue $ - $ 6,833 $ 29,944 $ 23,949 Advertising and marketing expenses - 2,500 13,292 7,500 Product development costs - 5,444 14,029 16,332 Selling, general and administrative expenses 29,307 41,221 102,735 306,448 Total share-based compensation expense included in consolidated statement of operations $ 29,307 $ 55,998 $ 160,000 $ 354,229 | The following is a summary of such share-based compensation costs included in the Company’s consolidated statements of operations for the years ended December 31, 2020 and 2019: Schedule of Share-based Compensation Costs For the Years Ended December 31, 2020 2019 Share-based compensation expense included in: Cost of revenue $ 31,006 $ 91,081 Advertising and marketing expenses 8,333 33,977 Product development costs 21,882 45,330 Selling, general and administrative expenses 344,396 1,121,677 Total share-based compensation expense included in consolidated statement of operations $ 405,617 $ 1,292,065 |
Leases (Tables)
Leases (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
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 Nine Months Ended September 30, 2021 Operating lease cost $ 162,667 Operating cash outflow from operating lease $ 210,154 As of September 30, 2021 Operating lease right-of-use asset $ 194,353 Operating lease liability, current $ 238,140 Operating lease liability, long-term $ - Remaining lease term .9 years Discount rate 5.00 % | The lease cost, cash flows and other information related to the Facility Lease were as follows: Schedule of Lease Cost For the Year Ended December 31, 2020 Operating lease cost $ 216,889 Operating cash outflow from operating lease $ 160,934 As of December 31, 2020 Operating lease right-of-use asset $ 343,950 Operating lease liability, current $ 266,105 Operating lease liability, long-term $ 169,119 Remaining lease term 1.7 years Discount rate 5.00 % |
Schedule of Future Annual Minimum Lease Payments | Future annual minimum lease payments on the Facility Lease as of September 30, 2021 were as follows: Schedule of Future Annual Minimum Lease Payments Years ended December 31, 2021 (excluding the nine months ended September 30, 2021) 71,710 2022 170,891 Total minimum lease payments 242,601 Less imputed interest (4,461 ) Present value of minimum lease payments $ 238,140 | Future annual minimum lease payments on the Facility Lease as of December 31, 2020 were as follows: Schedule of Future Annual Minimum Lease Payments Years ended December 31, 2021 281,864 2022 170,891 Total minimum lease payments 452,755 Less imputed interest (17,531 ) Present value of minimum lease payments $ 435,224 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Schedule of Inventory | Inventory consisted of the following: Schedule of Inventory September 30, December 31, 2021 2020 Finished goods $ 319,335 $ 201,778 Work in progress 2,595 4,231 Raw materials 237,705 214,145 Allowance for excess & obsolete inventory (79,281 ) (93,045 ) Inventory, net $ 480,354 $ 327,109 | Inventory consisted of the following: Schedule of Inventory 2020 2019 As of December 31, 2020 2019 Finished goods $ 201,778 $ 1,041,369 Work in progress 4,231 3,851 Raw materials 214,145 257,399 Allowance for excess & obsolete inventory (93,045 ) (71,376 ) Inventory, net $ 327,109 $ 1,231,243 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of Property and Equipment | Property and equipment consisted of the following: Schedule of Property and Equipment September 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 (428,076 ) (480,883 ) Property and equipment, net $ 98,967 $ 147,732 | Property and equipment consisted of the following: Schedule of Property and Equipment As of December 31, 2020 2019 Furniture and equipment $ 398,422 $ 389,090 Vehicles 15,000 15,000 Leasehold improvements 215,193 215,193 628,615 619,283 Accumulated depreciation (480,883 ) (361,360 ) Property and equipment, net $ 147,732 $ 257,923 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following: Schedule of Intangible Assets As of December 31, 2020 2019 Patents $ 8,110 $ 12,234 Website development costs 22,713 22,713 Trademarks 1,830 1,830 32,653 36,777 Accumulated amortization (25,426 ) (24,847 ) Intangible assets, net $ 7,227 $ 11,930 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
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 September 30, December 31, 2021 2020 Accounts payable $ 864,558 $ 918,639 Sales commissions payable 40,758 48,263 Accrued payroll liabilities 255,462 288,071 Product warranty accrual 172,868 173,365 Other accrued expenses 340,442 356,623 Total $ 1,674,088 $ 1,784,961 | Accounts payable and accrued liabilities consisted of the following: Schedule of Accounts Payable and Accrued Liabilities 2020 2019 As of December 31, 2020 2019 Accounts payable $ 918,639 $ 1,299,015 Sales commissions payable 48,263 69,532 Accrued payroll liabilities 288,071 169,052 Product warranty accrual 173,365 185,234 Other accrued expenses 356,623 110,127 Total $ 1,784,961 $ 1,832,959 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
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 nine months ended September 30, 2021: Schedule of Outstanding Warrants to Purchase Common Stock Weighted Weighted Average Average Remaining Aggregate Number Exercise Life Intrinsic Outstanding Price In Months Value Outstanding at December 31, 2020 50,417 $ 37.50 6 $ 0 Issued 227,719 $ 9.00 36 - Exercised - - - - Expired (50,417 ) $ 37.50 - $ 0 Outstanding at September 30, 2021 227,719 $ 9.00 36 $ 0 | The following table summarizes information with respect to outstanding warrants to purchase common stock during the years ended December 31, 2020 and 2019: Schedule of Outstanding Warrants to Purchase Common Stock Weighted Weighted Average Average Aggregate Number Exercise Remaining Life Intrinsic Outstanding Price In Months Value Outstanding at December 31, 2018 266,735 $ 37.50 21 $ 0 Issued - - - - Exercised - - - - Expired (6,008 ) $ (99.00 ) - $ 0 Outstanding at December 31, 2019 260,727 $ 36.00 9 $ 0 Issued - - - - Exercised - - - - Expired (210,310 ) $ (34.50 ) - $ 0 Outstanding at December 31, 2020 50,417 $ 37.50 6 $ 0 |
Schedule of Warrants Outstanding | The following table summarizes information about warrants outstanding at September 30, 2021: Schedule of Warrants Outstanding Weighted Average Life of Warrants Outstanding Warrants Exercise price Outstanding In Months 9.45 192,982 36 10.40 34,737 36 227,719 36 | The following table summarizes information about warrants outstanding at December 31, 2020. Schedule of Warrants Outstanding Weighted Average Life of Warrants Outstanding Warrants Exercise price Outstanding In Months 37.50 50,417 6 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
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 years ended December 31, 2020 and 2019 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, 2018 65,782 $ 21.00 $ 730,185 Granted - - Vested and settled with share issuance (7,467 ) $ 27.15 Forfeited/canceled (7,982 ) $ 26.85 Outstanding, December 31, 2019 50,333 $ 19.20 $ - Outstanding, December 31, 2019 50,333 $ 19.20 $ - Granted - - Vested and settled with share issuance (45,000 ) $ 18.15 Forfeited/canceled (5,333 ) $ 27.00 Outstanding, December 31, 2020 - - $ - | |
Schedule of Incentive Bonus Awards Granted to Employees | A summary of the incentive stock bonus awards granted to employees under the 2017 Equity Plan during the years ended December 31, 2020 and 2019 are presented in the table below: Schedule of Incentive Bonus Awards Granted to Employees Number of Shares Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Unvested, December 31, 2018 11,200 $ 16.80 $ 124,320 Awarded - - Vested (11,200 ) $ 16.80 Forfeited - - Unvested, December 31, 2019 - - Awarded - - Vested - - Forfeited - - Unvested, December 31, 2020 - - | |
2017 Equity 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 years ended December 31, 2020 and 2019 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, 2018 70,400 $ 15.60 8.4 $ - Granted 13,333 $ 12.00 Exercised - - Forfeited (16,055 ) $ 17.40 Expired (111 ) $ 15.75 Outstanding, December 31, 2019 67,567 $ 14.40 7.7 $ - Granted 44,113 $ 10.50 10.0 - Exercised - Forfeited - Expired (16,673 ) $ 15.15 4.3 Outstanding, December 31, 2020 95,007 $ 12.45 8.3 $ - Exercisable, December 31, 2020 95,007 $ 12.45 8.3 $ - | |
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 years ended December 31, 2020 and 2019 are presented in the table below: Summary of Non-vested Non-qualified Stock Option Activity Number of Weighted Aggregate Grant-Date Nonvested, December 31, 2018 48,889 $ 12.90 $ - $ 628,756 Granted 13,333 $ 9.75 $ 130,120 Vested (32,833 ) $ 11.10 $ 362,998 Forfeited (16,056 ) $ 15.30 $ 246,344 Expired - - $ - Nonvested, December 31, 2019 13,333 $ 11.25 $ - $ 149,534 Granted 44,113 $ 8.85 $ 387,199 Vested (57,446 ) $ 9.30 $ 536,733 Forfeited - $ - Expired - $ - Nonvested, December 31, 2020 - $ - $ - | |
2017 Equity Plan [Member] | Director [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 years ended December 31, 2020 and 2019 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, 2018 6,000 $ 20.25 8.6 $ - Granted - - Exercised - - Forfeited/Cancelled - - Expired - - Outstanding, December 31, 2019 6,000 $ 20.25 7.6 $ - Granted 43,333 $ 8.55 8.5 Exercised - - Forfeited/Cancelled - - Expired - - Outstanding, December 31, 2020 49,333 $ 10.05 7.5 $ - Exercisable, December 31, 2020 42,667 $ 10.95 8.0 $ - | |
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 years ended December 31, 2020 and 2019 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, 2019 - - $ - Granted - - Vested - - Forfeited - - Expired - - Nonvested, December 31, 2019 - - $ - - Granted 43,333 8.55 $ 373,000 Vested (36,667 ) 9.45 $ 344,000 Forfeited - - $ - Expired - - $ - Nonvested, December 31, 2020 6,666 4.35 $ 5,800 $ 29,000 | |
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 nine months ended September 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 95,007 $ 12.45 8.3 $ - Granted 20,239 $ 12.75 10.0 $ - Exercised - Forfeited (1,914 ) $ 18.30 6.6 $ - Expired - Outstanding, September 30, 2021 113,332 $ 12.45 7.9 $ - Exercisable, September 30, 2021 101,665 $ 12.75 7.7 $ - | |
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 nine months ended September 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 20,239 $ 12.30 $ - $ - Vested (8,572 ) $ 16.80 $ 66,412 $ - Forfeited - $ - Expired - $ - Nonvested, September 30, 2021 11,667 $ 9.15 $ - $ 104,800 | |
2017 Equity Plan and 2021 Equity 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 and the 2021 Equity Plan, during the nine months ended September 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 49,333 $ 10.05 7.5 $ - Granted 1,538 $ 9.75 10.0 $ - Exercised - Forfeited/Cancelled - Expired - Outstanding, September 30, 2021 50,871 $ 10.05 6.8 $ - Exercisable, September 30, 2021 50,871 $ 10.05 6.8 $ - | |
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 and the 2021 Equity Plan, for the nine months ended September 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 6,667 $ 4.35 $ 31,000 $ - Granted 1,538 9.75 $ (1,154 ) $ - Vested (8,205 ) $ 5.40 $ (29,846 ) $ - Forfeited - Expired - Nonvested, September 30, 2021 - $ - $ - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of U.S. Federal Statutory Income Tax Rate and Reported Provision for Income Taxes | The differences between income taxes expected at the U.S. federal statutory income tax rate and the reported provision for income taxes are summarized as follows: Schedule of U.S. Federal Statutory Income Tax Rate and Reported Provision for Income Taxes 2020 2019 Income taxes computed at the federal statutory rate $ (369,000 ) $ (281,000 ) States taxes, net of federal benefits (69,000 ) (53,000 ) Permanent differences (136,000 ) 17,000 True-up adjustments 115,000 199,000 Adjustment to net operating loss (17,000 ) (86,000 ) Change in valuation allowance 476,000 204,000 Reported income tax (benefit) expense $ - $ - |
Schedule of Deferred Tax Assets | The components of the net deferred tax assets as of December 31, 2020 and 2019 are as follows: Schedule of Deferred Tax Assets 2020 2019 Deferred tax assets: Net operating losses $ 4,821,000 $ 4,081,000 Equity compensation 118,000 392,000 Other deferred tax assets 169,000 149,000 Total deferred tax assets 5,108,000 4,622,000 Deferred tax liabilities: Other deferred tax liabilities (68,000 ) (58,000 ) Total deferred tax liabilities (68,000 ) (58,000 ) Net deferred tax assets before valuation allowance 5,040,000 4,564,000 Less valuation allowance (5,040,000 ) (4,564,000 ) Net deferred tax assets $ - $ - |
Schedule of Revenue by Source (
Schedule of Revenue by Source (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Product Information [Line Items] | ||||||
Total revenue | $ 3,706,436 | $ 1,634,669 | $ 10,582,470 | $ 5,127,018 | $ 8,514,272 | $ 15,224,454 |
Equipment and Systems Sales [Member] | ||||||
Product Information [Line Items] | ||||||
Total revenue | 3,523,948 | 1,481,961 | 9,933,313 | 4,575,855 | 7,730,371 | 13,692,863 |
Engineering and Other Services [Member] | ||||||
Product Information [Line Items] | ||||||
Total revenue | 110,538 | 114,160 | 464,269 | 402,837 | 568,131 | 1,239,130 |
Shipping and Handling [Member] | ||||||
Product Information [Line Items] | ||||||
Total revenue | $ 71,950 | $ 38,548 | $ 184,888 | $ 148,326 | $ 215,770 | $ 292,461 |
Schedule of Remaining Performan
Schedule of Remaining Performance Obligations Expected to be Recognized (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Remaining performance obligations related to engineering only paid contracts | $ 1,161,000 | $ 2,643,000 |
Remaining performance obligations related to partial equipment paid contracts | 8,720,000 | 5,805,000 |
Total remaining performance obligations | 9,881,000 | 8,448,000 |
2021 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Remaining performance obligations related to engineering only paid contracts | 112,000 | 2,355,000 |
Remaining performance obligations related to partial equipment paid contracts | 3,091,000 | 5,703,000 |
Total remaining performance obligations | 3,203,000 | 8,058,000 |
2022 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Remaining performance obligations related to engineering only paid contracts | 1,049,000 | 288,000 |
Remaining performance obligations related to partial equipment paid contracts | 5,629,000 | 102,000 |
Total remaining performance obligations | $ 6,678,000 | $ 390,000 |
Schedule of Share-based Compens
Schedule of Share-based Compensation Costs (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Total share-based compensation expense included in consolidated statement of operations | $ 29,307 | $ 55,998 | $ 160,000 | $ 354,229 | $ 405,617 | $ 1,292,065 |
Cost of Sales [Member] | ||||||
Total share-based compensation expense included in consolidated statement of operations | 6,833 | 29,944 | 23,949 | 31,006 | 91,081 | |
Advertising and Marketing Expenses [Member] | ||||||
Total share-based compensation expense included in consolidated statement of operations | 2,500 | 13,292 | 7,500 | 8,333 | 33,977 | |
Product Development Costs [Member] | ||||||
Total share-based compensation expense included in consolidated statement of operations | 5,444 | 14,029 | 16,332 | 21,882 | 45,330 | |
Selling, General and Administrative Expenses [Member] | ||||||
Total share-based compensation expense included in consolidated statement of operations | $ 29,307 | $ 41,221 | $ 102,735 | $ 306,448 | $ 344,396 | $ 1,121,677 |
Basis of Presentation; Summar_4
Basis of Presentation; Summary of Significant Accounting Policies (Details Narrative) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Jan. 17, 2022 | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)shares | Sep. 30, 2020USD ($)shares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jul. 28, 2021ft² | Jul. 27, 2021ft² | Apr. 30, 2021ft² | |
Product Information [Line Items] | |||||||||||
Accounts Receivable, Allowance for Credit Loss, Current | $ 186,073 | $ 186,073 | $ 165,098 | $ 151,673 | |||||||
Property, Plant and Equipment, Useful Life | 5 years | ||||||||||
Contract with Customer, Liability, Current | 3,059,525 | 3,059,525 | $ 3,724,189 | 1,444,472 | |||||||
Contract with Customer, Liability, Revenue Recognized | 283,452 | $ 9,141 | 3,357,068 | $ 1,074,016 | $ 1,103,447 | $ 473,682 | |||||
Deferred revenue | 76.00% | 74.00% | |||||||||
Revenue, Remaining Performance Obligation, Amount | $ 9,881,000 | $ 9,881,000 | $ 8,448,000 | ||||||||
Revenue, Remaining Performance Obligation, Percentage | 12.00% | 12.00% | 31.00% | ||||||||
Standard Product Warranty Description | The Company assesses the historical warranty claims on its manufactured products and, since 2016, warranty claims have been approximately 1% of annual revenue generated on these products. Based on the Company’s warranty policy, an accrual is established at 1% of the trailing 18 months revenue. | ||||||||||
Research and Development Expense | $ 98,623 | 84,433 | $ 322,807 | 304,229 | $ 390,229 | $ 521,044 | $ 32,000 | ||||
Share-based Payment Arrangement, Expense | 29,307 | 55,998 | $ 160,000 | $ 354,229 | $ 405,617 | $ 1,292,065 | |||||
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities | shares | 777,888 | 293,383 | 194,757 | ||||||||
Area of Land | ft² | 11,491 | 18,952 | 6,900 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Minimum | 150.20% | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Maximum | 152.51% | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum | 0.55% | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Maximum | 1.49% | ||||||||||
2020 Incentive Awards [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Share-based Payment Arrangement, Expense | $ 128,434 | ||||||||||
2021 Incentive Awards [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Share-based Payment Arrangement, Expense | $ 0 | $ 31,575 | $ 108,945 | $ 101,472 | |||||||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer One [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration Risk, Percentage | 38.00% | 39.00% | 25.00% | 18.00% | 28.00% | ||||||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Two [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration Risk, Percentage | 23.00% | 30.00% | 12.00% | 17.00% | 11.00% | ||||||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Three [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration Risk, Percentage | 11.00% | 12.00% | 11.00% | 10.00% | |||||||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | One Customer [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration Risk, Percentage | 44.00% | ||||||||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer One [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration Risk, Percentage | 40.00% | 32.00% | 48.00% | 59.00% | |||||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Two [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration Risk, Percentage | 26.00% | 23.00% | 38.00% | 16.00% | |||||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Three [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration Risk, Percentage | 22.00% | 21.00% | 10.00% | ||||||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Four [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration Risk, Percentage | 10.00% | ||||||||||
Supplier Concentration Risk [Member] | Purchases of Inventory [Member] | Supplier One [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration Risk, Percentage | 27.00% | 30.00% | |||||||||
Supplier Concentration Risk [Member] | Purchases of Inventory [Member] | Supplier Two [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration Risk, Percentage | 25.00% | 17.00% | |||||||||
Supplier Concentration Risk [Member] | Purchases of Inventory [Member] | Supplier Three [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Concentration Risk, Percentage | 12.00% | 12.00% | |||||||||
Accounts Payable and Accrued Liabilities [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Standard and Extended Product Warranty Accrual | $ 173,365 | $ 185,234 | |||||||||
2022 [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenue, Remaining Performance Obligation, Amount | $ 6,678,000 | $ 6,678,000 | 390,000 | ||||||||
Customer Contracts [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenue, Remaining Performance Obligation, Amount | 1,161,000 | 1,161,000 | 2,643,000 | ||||||||
Order or Production Backlog [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenue, Remaining Performance Obligation, Amount | $ 1,250,000 | $ 1,250,000 | |||||||||
Inventory Valuation and Obsolescence [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Inventory Adjustments | $ 93,045 | $ 71,376 | |||||||||
Forecast [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Reverse stock split, Description | On January 17, 2022, the Company’s Board of Directors approved a reverse stock split at a ratio of one-for-one hundred and fifty. Such reverse stock split was implemented effective January 27, 2022. |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Net Income (Loss) Attributable to Parent | $ 407,905 | $ 270,439 | $ 936,031 | $ 1,822,269 | $ 1,758,716 | $ 1,338,566 | |||
Retained Earnings (Accumulated Deficit) | 28,379,674 | 28,379,674 | 27,443,643 | 25,684,927 | |||||
Stockholders' Equity Attributable to Parent | 3,359,813 | 1,421,677 | 3,359,813 | 1,421,677 | 1,333,698 | 355,631 | $ 1,644,642 | $ 1,175,664 | $ (194,336) |
Revenue from Contract with Customer, Excluding Assessed Tax | $ 3,706,436 | $ 1,634,669 | 10,582,470 | 5,127,018 | $ 8,514,272 | 15,224,454 | |||
Decrease in revenue percentage | 44.00% | ||||||||
Net Cash Provided by (Used in) Operating Activities | $ (1,761,260) | $ 599,635 | $ 818,036 | 671,833 | |||||
Working capital deficit | $ 2,220,000 | $ 1,437,000 |
Schedule of Lease Cost (Details
Schedule of Lease Cost (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases | |||
Operating lease cost | $ 162,667 | $ 216,889 | |
Operating cash outflow from operating lease | 210,154 | 160,934 | |
Operating lease right-of-use asset | 194,353 | 343,950 | $ 534,133 |
Operating lease liability, current | 238,140 | 266,105 | 217,843 |
Operating lease liability, long-term | $ 169,119 | $ 404,209 | |
Operating Lease, Weighted Average Remaining Lease Term | 10 months 24 days | 1 year 8 months 12 days | |
Discount rate | 5.00% | 5.00% |
Schedule of Future Annual Minim
Schedule of Future Annual Minimum Lease Payments (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Leases | ||
Year one | $ 170,891 | $ 281,864 |
Year two | 170,891 | |
Total minimum lease payments | 242,601 | 452,755 |
Less imputed interest | (4,461) | (17,531) |
Present value of minimum lease payments | 238,140 | $ 435,224 |
Remainder of fiscal year | $ 71,710 |
Leases (Details Narrative)
Leases (Details Narrative) | Jul. 28, 2021ft² | Jul. 27, 2021ft² | Jul. 02, 2021USD ($) | Apr. 30, 2021USD ($)ft² | Sep. 02, 2019USD ($) | Sep. 02, 2018USD ($) | Jan. 02, 2018USD ($)ft² | Jun. 27, 2017USD ($)ft² | Sep. 30, 2021USD ($)ft² | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jan. 02, 2019USD ($) | Jul. 31, 2017USD ($) |
Area of Land | ft² | 11,491 | 18,952 | 6,900 | ||||||||||
Lessee, Operating Lease, Description | The Facility Lease commenced September 29, 2017 and continues through August 31, 2022. | ||||||||||||
Security Deposit | $ 51,000 | ||||||||||||
Operating Lease, Right-of-Use Asset | $ 194,353 | $ 343,950 | $ 534,133 | ||||||||||
Operating Lease, Liability | $ 238,140 | $ 435,224 | |||||||||||
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% | ||||||||||||
Rental expense | $ 11,978 | $ 5,989 | |||||||||||
Minimum [Member] | |||||||||||||
Area of Land | ft² | 100,000 | ||||||||||||
Accounting Standards Update 2016-02 [Member] | |||||||||||||
Deferred Rent Credit, Current | $ 26,477 | ||||||||||||
Operating Lease, Right-of-Use Asset | 714,416 | ||||||||||||
Operating Lease, Liability | 822,374 | ||||||||||||
Unamortized amount of tenant improvement allowance | 81,481 | ||||||||||||
Accounting Standards Update 2016-02 [Member] | Minimum [Member] | |||||||||||||
Tenant Improvements | 100,000 | ||||||||||||
Accounting Standards Update 2016-02 [Member] | Maximum [Member] | |||||||||||||
Tenant Improvements | $ 100,000 | ||||||||||||
Facility Lease [Member] | |||||||||||||
Area of Land | ft² | 18,600 | 12,700 | |||||||||||
Payments for Rent | $ 20,135 | $ 19,549 | $ 18,979 | $ 12,967 | |||||||||
Lessee, Operating Lease, Description | until August 31, 2018 | until January 1, 2018 | On each September 1 through the end of the lease, the monthly rent will increase by 3%. | ||||||||||
Payments for Deposits | $ 1,600 | ||||||||||||
Lessee, Operating Lease, Renewal Term | 5 years | 5 years | |||||||||||
Agreement with Landlord [Member] | |||||||||||||
Payments for Rent | $ 52,600 | ||||||||||||
Lessee, Operating Lease, Description | The deposit required on the lease will be reduced to approximately $32,000 and will be payable in 12 monthly installments from January through December of 2021. Further, the landlord also agreed to defer payment of fifty percent of the three months of lease payments (base rent only) for the period July to September 2020. The deferred lease payments amount to approximately $30,000 and will be payable in 12 monthly installments from January to December 2021. | ||||||||||||
Lease Termination Agreement [Member] | |||||||||||||
Lease Expiration Date | Jan. 31, 2027 | Aug. 31, 2022 |
Schedule of Inventory (Details)
Schedule of Inventory (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | |||
Finished goods | $ 319,335 | $ 201,778 | $ 1,041,369 |
Work in progress | 2,595 | 4,231 | 3,851 |
Raw materials | 237,705 | 214,145 | 257,399 |
Allowance for excess & obsolete inventory | (79,281) | (93,045) | (71,376) |
Inventory, net | $ 480,354 | $ 327,109 | $ 1,231,243 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |||
Cost, Overhead | $ 17,674 | $ 17,974 | $ 31,831 |
Prepaid inventory expenses | $ 879,000 | $ 916,000 |
Schedule of Property and Equipm
Schedule of Property and Equipment (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 527,044 | $ 628,615 | $ 619,283 |
Accumulated depreciation | (428,076) | (480,883) | (361,360) |
Property and equipment, net | 98,967 | 147,732 | 257,923 |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 296,851 | 398,422 | 389,090 |
Vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 15,000 | 15,000 | 15,000 |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 215,193 | $ 215,193 | $ 215,193 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||||||
Depreciation | $ 54,538 | $ 119,524 | $ 157,860 | ||||
Property, Plant and Equipment, Gross | $ 527,044 | 527,044 | 628,615 | 619,283 | |||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | 428,076 | 428,076 | 480,883 | 361,360 | |||
Selling, General and Administrative Expense | $ 866,699 | $ 634,447 | 2,493,930 | $ 2,453,976 | 3,095,350 | 4,662,695 | |
Co-Founders [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property, Plant and Equipment, Gross | $ 176,042 | ||||||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ 39,120 | ||||||
Property, Plant and Equipment [Member] | Cost of Sales [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Depreciation | $ 6,394 | $ 7,010 | |||||
Selling, General and Administrative Expense | 4,721 | ||||||
Property, Plant and Equipment [Member] | Inventory [Member] | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Selling, General and Administrative Expense | $ 1,180 |
Schedule of Intangible Assets (
Schedule of Intangible Assets (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 32,653 | $ 36,777 |
Accumulated amortization | (25,426) | (24,847) |
Intangible assets, Net | 7,227 | 11,930 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | 8,110 | 12,234 |
Web Site Development Costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | 22,713 | 22,713 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 1,830 | $ 1,830 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of Intangible Assets | $ 579 | $ 3,320 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Remaining Amortization Period | 14 years | |
Impairment of Intangible Assets, Finite-lived | $ 4,124 | $ 7,778 |
Web Site Development Costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Remaining Amortization Period | 5 years |
Schedule of Accounts Payable an
Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | |||
Accounts payable | $ 864,558 | $ 918,639 | $ 1,299,015 |
Sales commissions payable | 40,758 | 48,263 | 69,532 |
Accrued payroll liabilities | 255,462 | 288,071 | 169,052 |
Product warranty accrual | 172,868 | 173,365 | 185,234 |
Other accrued expenses | 340,442 | 356,623 | 110,127 |
Total | $ 1,674,088 | $ 1,784,961 | $ 1,832,959 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2019 | |
Product Information [Line Items] | |||
Accounts Payable and Accrued Liabilities, Current | $ 1,784,961 | $ 1,674,088 | $ 1,832,959 |
Standard Product Warranty Description | The Company assesses the historical warranty claims on its manufactured products and, since 2016, warranty claims have been approximately 1% of annual revenue generated on these products. Based on the Company’s warranty policy, an accrual is established at 1% of the trailing 18 months revenue. | ||
Three Customers [Member] | |||
Product Information [Line Items] | |||
Accounts Payable and Accrued Liabilities, Current | $ 402,651 | ||
Standard Product Warranty Description | Since the issue is limited to these three projects and is not anticipated to reoccur in the future, we have made no adjustment to the ongoing 1% warranty reserve that we accrue on all sales. |
Note Payable and Accrued Inte_2
Note Payable and Accrued Interest (Details Narrative) - USD ($) | Feb. 10, 2021 | Dec. 11, 2020 | Apr. 22, 2020 | Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||||
Debt Instrument, Face Amount | $ 514,200 | $ 554,000 | $ 554,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | 1.00% | ||||
Debt Instrument, Maturity Date | Feb. 5, 2026 | Apr. 20, 2022 | ||||
Debt Instrument, Increase, Accrued Interest | $ 3,203 | $ 1,296 | $ 3,268 | $ 3,203 | ||
Subsequent Event [Member] | ||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||||
Debt Instrument, Face Amount | $ 514,200 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | |||||
Debt Instrument, Maturity Date | Feb. 5, 2026 | |||||
Extended Maturity [Member] | ||||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||||
Debt Instrument, Maturity Date | Apr. 20, 2025 |
Related Party Agreements and _2
Related Party Agreements and Transactions (Details Narrative) - USD ($) | Jan. 07, 2021 | May 31, 2018 | May 31, 2017 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Equity Method Investment, Ownership Percentage | 50.00% | 50.00% | 50.00% | ||||||||
Research and Development Expense | $ 98,623 | $ 84,433 | $ 322,807 | $ 304,229 | $ 390,229 | $ 521,044 | $ 32,000 | ||||
Operating Lease, Expense | 48,880 | ||||||||||
Property, Plant and Equipment, Net | 98,967 | $ 98,967 | $ 147,732 | 257,923 | |||||||
Net of impact of foregoing item charge | $ 120,241 | ||||||||||
Related Party Transaction, Amounts of Transaction | $ 26,873 | ||||||||||
Leased Equipment [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Property, Plant and Equipment, Net | $ 107,581 | ||||||||||
Accounts Receivable [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Unpaid lease fees | 36,660 | ||||||||||
Accounts Payable [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Unpaid demo and testing Fees | $ 24,000 | ||||||||||
Employment Agreement [Member] | Restricted Stock Units (RSUs) [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares vested and to be settled with issued shares | 6,667 | ||||||||||
Co-Founders [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Equity Method Investment, Ownership Percentage | 10.00% | ||||||||||
Co-Founders [Member] | Equipment, Demonstration and Product Testing Agreement [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Revenue from Contract with Customer, Including Assessed Tax | $ 16,500 | ||||||||||
Due to Related Parties | 12,000 | ||||||||||
Co-Founders [Member] | Equipment, Demonstration and Product Testing Agreement [Member] | Maximum [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Revenue from Contract with Customer, Including Assessed Tax | $ 18,330 | ||||||||||
Co-Founders [Member] | Employment Agreement [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Salary and Wage, Excluding Cost of Good and Service Sold | $ 150,000 | ||||||||||
Co-Founders [Member] | Employment Agreement [Member] | Restricted Stock Units (RSUs) [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 32,000 | ||||||||||
Number of shares vested and to be settled with issued shares | 13,333 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | 6,667 | ||||||||||
Co-Founders [Member] | Employment Agreement [Member] | Restricted Stock Units (RSUs) [Member] | April 30, 2020 [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 5,333 | ||||||||||
Mr. James R. Shipley [Member] | Consulting Agreement [Member] | Subsequent Event [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Professional Fees | $ 6,500 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Apr. 08, 2021 | Mar. 30, 2021 | Jun. 09, 2020 | Mar. 09, 2020 | Sep. 30, 2021 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Loss Contingency, Damages Paid, Value | $ 40,000 | |||||
Proceeds from Issuance of Private Placement | $ 6,667 | $ 6,667 | ||||
Aggregate common shares issued upon execution of settlement | 67,000 | 67,000 | ||||
Other Nonoperating Expense | $ 107,000 | |||||
Payments for Legal Settlements | 35,000 | |||||
Litigation Settlement, Expense | 40,000 | |||||
Accounts Payable and Accrued Liabilities | $ 5,000 | |||||
Stock Issued During Period, Shares, New Issues | 6,667 | |||||
Stock Issued During Period, Value, New Issues | $ 67,000 | |||||
Former Employee [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Loss Contingency, Damages 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 | 45,000 | |||||
Number of units, vested and settled | 45,000 | |||||
Loss Contingency, Damages Awarded, Value | $ 10,000 |
Preferred and Common Stock (Det
Preferred and Common Stock (Details Narrative) - $ / shares | Mar. 09, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Preferred Stock, Shares Outstanding | 42,030,331 | 42,030,331 | 42,030,331 | |
Preferred Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 | $ 0.00001 | |
Stock Issued During Period, Shares, New Issues | 6,667 | |||
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of units, vested and settled | 45,000 | |||
2017 Equity Incentive Plan [Member] | Employee [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of common stock shares issued in settlement of vested restricted stock, shares | 6,667 | 7,467 | ||
Number of shares issued for stock incentive bonus | 3,733 | 7,467 | ||
2017 Equity Incentive Plan [Member] | Employee [Member] | Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of units, vested and settled | 45,000 | |||
2017 Equity Incentive Plan [Member] | Independent Directors [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock Issued During Period, Shares, New Issues | 1,316 | |||
2017 Equity Incentive Plan [Member] | Independent Directors [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock Issued During Period, Shares, New Issues | 5,263 | |||
Series A Preferred Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Preferred Stock, Shares Outstanding | 42,030,331 | 42,030,331 | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.00001 |
Schedule of Outstanding Warrant
Schedule of Outstanding Warrants to Purchase Common Stock (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Warrants | ||||
Warrants Outstanding, Beginning Balance | 50,417 | 260,727 | 266,735 | |
Weighted Average Exercise Price, Beginning Balance | $ 37.50 | $ 36 | $ 37.50 | |
Weighted Average Life of Outstanding Warrants in Months, Beginning Balance | 6 months | 9 months | 21 months | |
Aggregate Intrinsic Value, Beginning Balance | $ 0 | $ 0 | $ 0 | |
Warrants, Issued | 227,719 | |||
Weighted Average Exercise Price, Issued | $ 9 | |||
Aggregate Intrinsic Value, Issued | ||||
Warrants, Exercised | ||||
Weighted Average Exercise Price, Exercised | ||||
Aggregate Intrinsic Value, Exercised | ||||
Warrants, Expired | (50,417) | (210,310) | (6,008) | |
Weighted Average Exercise Price, Expired | $ 37.50 | $ (34.50) | $ (99) | |
Aggregate Intrinsic Value, Expired | $ 0 | $ 0 | $ 0 | |
Warrants Outstanding, Ending Balance | 227,719 | 50,417 | 260,727 | 266,735 |
Weighted Average Exercise Price, Ending Balance | $ 9 | $ 37.50 | $ 36 | $ 37.50 |
Weighted Average Life of Outstanding Warrants in Months, Ending Balance | 6 months | |||
Aggregate Intrinsic Value, Ending Balance | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted Average Life of Outstanding Warrants in Months, Issued | 36 months | |||
Weighted Average Life of Outstanding Warrants in Months, Ending Balance | 36 months |
Schedule of Warrants Outstandin
Schedule of Warrants Outstanding (Details) - $ / shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Exercise price | $ 9 | $ 37.50 | $ 36 | $ 37.50 |
Warrants Outstanding | 227,719 | 50,417 | 260,727 | 266,735 |
Weighted Average Life of Outstanding Warrants in Months | 36 months | |||
Warrants Range [Member] | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Exercise price | $ 9.45 | $ 37.50 | ||
Warrants Outstanding | 192,982 | 50,417 | ||
Weighted Average Life of Outstanding Warrants in Months | 36 months | 6 months | ||
Warrants Range One [Member] | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Exercise price | $ 10.40 | |||
Warrants Outstanding | 34,737 | |||
Weighted Average Life of Outstanding Warrants in Months | 36 months |
Warrants (Details Narrative)
Warrants (Details Narrative) | Sep. 28, 2021$ / sharesshares | Jun. 30, 2018Number$ / shares | Dec. 31, 2017USD ($)Number$ / sharesshares | Mar. 31, 2017USD ($)Number$ / sharesshares | Oct. 31, 2014USD ($)Numbershares | Jun. 30, 2021shares | Sep. 30, 2021$ / sharesshares | Dec. 31, 2017$ / sharesshares | Feb. 10, 2021 | Dec. 31, 2020$ / sharesshares | Apr. 22, 2020 | Dec. 31, 2019$ / sharesshares | Dec. 31, 2018$ / sharesshares |
Common Stock, Shares, Issued | shares | 1,583,511 | 1,576,844 | 1,521,444 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | 1.00% | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 9 | $ 37.50 | $ 36 | $ 37.50 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Expirations | shares | 50,417 | ||||||||||||
Class of Warrant or Right, Outstanding | shares | 227,719 | 50,417 | 260,727 | 266,735 | |||||||||
Weighted Average Life of Outstanding Warrants in Months, Ending Balance | 36 months | ||||||||||||
Series B Redeemable Convertible Preferred Stock [Member] | |||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 9.45 | ||||||||||||
Class of Warrant or Right, Outstanding | shares | 192,982 | ||||||||||||
Weighted Average Life of Outstanding Warrants in Months, Ending Balance | 3 years | ||||||||||||
Series B Redeemable Convertible Preferred Stock [Member] | Private Placement [Member] | |||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 10.40 | ||||||||||||
Class of Warrant or Right, Outstanding | shares | 34,737 | ||||||||||||
Weighted Average Life of Outstanding Warrants in Months, Ending Balance | 3 years | ||||||||||||
Investment Bank [Member] | |||||||||||||
Warrant description | The Banker Warrants were fully vested on the date of issuance, were exercisable beginning December 20, 2017 and expired unexercised on June 20, 2020 | ||||||||||||
Series 2 Warrants [Member] | |||||||||||||
Number of investment unit offered | Number | 60 | ||||||||||||
Offered investments, price per unit | $ | $ 50,000 | ||||||||||||
Common Stock, Shares, Issued | shares | 1,667 | ||||||||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | shares | 333 | 6,008 | |||||||||||
Series 2 Warrants [Member] | Series 2 Convertible Notes [Member] | |||||||||||||
Convertible Debt | $ | $ 50,000 | ||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||||||||||||
Warrant [Member] | Investment Bank [Member] | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | shares | 3,333 | 3,333 | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 52.50 | $ 52.50 | |||||||||||
Q1 2017 Warrants [Member] | |||||||||||||
Number of investment unit offered | Number | 111,875 | ||||||||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | shares | 3,125 | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 39 | ||||||||||||
Warrant description | These warrants expired unexercised in March 2020 | ||||||||||||
Proceeds from investment | $ | $ 2,685,000 | ||||||||||||
Proceeds from investment per unit | $ 24 | ||||||||||||
Conversion of stock, Description | Each unit consisted of | ||||||||||||
Shares Issued, Price Per Share | $ 63 | ||||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | Number | 5 | ||||||||||||
Redeem warrant shares at a price | $ 1.50 | ||||||||||||
Q4 2017 Warrants [Member] | |||||||||||||
Number of investment unit offered | Number | 98,227 | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 30 | 30 | |||||||||||
Proceeds from investment | $ | $ 1,768,080 | ||||||||||||
Proceeds from investment per unit | $ 18 | ||||||||||||
Conversion of stock, Description | Each unit consisted of | ||||||||||||
Shares Issued, Price Per Share | $ 54 | 54 | |||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | Number | 5 | ||||||||||||
Redeem warrant shares at a price | $ 1.50 | $ 1.50 | |||||||||||
Q2 2018 Warrants [Member] | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | shares | 50,417 | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 37.50 | ||||||||||||
Warrant description | The Q2 2018 Warrants are exercisable commencing July 1, 2018 until June 30, 2021 | ||||||||||||
Conversion of stock, Description | each unit consisting of | ||||||||||||
Shares Issued, Price Per Share | $ 60 | ||||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | Number | 5 | ||||||||||||
Redeem warrant shares at a price | $ 1.50 |
Schedule of Stock Option Activi
Schedule of Stock Option Activity (Details) - USD ($) | Jun. 24, 2020 | Jan. 02, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
2017 Equity Incentive Plan [Member] | Directors [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of Options, Granted | 43,333 | ||||
2017 Equity Incentive Plan [Member] | Employees And Consultants [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of Options, Granted | 20,239 | ||||
2017 Equity Incentive Plan [Member] | Employees And Consultants [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of Options, Granted | 44,113 | 13,333 | |||
2017 Equity Incentive Plan [Member] | Non-qualified Stock Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 5 years | ||||
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 | 49,333 | 6,000 | 6,000 | ||
Weighted Average Exercise Price, Outstanding Beginning | $ 10.05 | $ 20.25 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 5 years | 7 years 7 months 6 days | 8 years 7 months 6 days | ||
Aggregate Intrinsic Value, Outstanding Beginning | |||||
Number of Options, Granted | 43,333 | ||||
Weighted Average Exercise Price, Granted | |||||
Number of Options, Exercised | |||||
Weighted Average Exercise Price, Exercised | |||||
Number of Options, Forfeited/Cancelled | |||||
Weighted Average Exercise Price, Forfeited | |||||
Number of Options, Expired | |||||
Weighted Average Exercise Price, Expired | |||||
Weighted Average Remaining Contractual Term, Outstanding Ending | 7 years 6 months | ||||
Weighted Average Remaining Contractual Term, Granted | 8 years 6 months | ||||
Number of options, forfeited/cancelled | |||||
Number of Options, Outstanding Ending | 49,333 | 6,000 | |||
Weighted Average Exercise Price, Outstanding Ending | $ 10.05 | $ 20.25 | |||
Aggregate Intrinsic Value, Exercisable Ending | |||||
Weighted Average Exercise Price, Exercisable Ending | $ 10.95 | $ 8.55 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 8 years | ||||
Weighted Average Exercise Price, Outstanding Ending | $ 10.05 | $ 20.25 | |||
Aggregate Intrinsic Value, Outstanding Ending | |||||
Number of options, outstanding ending | 49,333 | 6,000 | |||
Weighted Average Exercise Price, Exercisable Ending | $ 10.95 | $ 8.55 | |||
Number of options, exercisable ending | 42,667 | ||||
Aggregate Intrinsic Value, Exercisable Ending | |||||
Number of Options, Expired | |||||
Aggregate Intrinsic Value, Outstanding Ending | |||||
Number of Options, Exercisable Ending | 42,667 | ||||
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] | |||||
Number of Options, Outstanding Beginning | 95,007 | ||||
Weighted Average Exercise Price, Outstanding Beginning | $ 12.45 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 8 years 3 months 18 days | ||||
Aggregate Intrinsic Value, Outstanding Beginning | |||||
Number of Options, Granted | 20,239 | ||||
Weighted Average Exercise Price, Granted | $ 12.75 | ||||
Number of Options, Exercised | |||||
Number of Options, Forfeited/Cancelled | (1,914) | ||||
Weighted Average Exercise Price, Forfeited | $ 18.30 | ||||
Number of Options, Expired | |||||
Weighted Average Remaining Contractual Term, Granted | 10 years | ||||
Number of options, forfeited/cancelled | 1,914 | ||||
Number of Options, Outstanding Ending | 113,332 | 95,007 | |||
Weighted Average Exercise Price, Outstanding Ending | $ 12.45 | $ 12.45 | |||
Weighted Average Remaining Contractual Term, Outstanding Ending | 7 years 10 months 24 days | ||||
Aggregate Intrinsic Value, Exercisable Ending | |||||
Weighted Average Exercise Price, Exercisable Ending | $ 12.75 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 7 years 8 months 12 days | ||||
Weighted Average Exercise Price, Outstanding Ending | $ 12.45 | $ 12.45 | |||
Aggregate Intrinsic Value, Outstanding Ending | |||||
Number of options, outstanding ending | 113,332 | 95,007 | |||
Weighted Average Exercise Price, Exercisable Ending | $ 12.75 | ||||
Number of options, exercisable ending | 101,665 | ||||
Aggregate Intrinsic Value, Exercisable Ending | |||||
Aggregate Intrinsic Value, Granted | |||||
Weighted Average Remaining Contractual Term, Forfeited | 6 years 7 months 6 days | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Intrinsic Value | |||||
Number of Options, Expired | |||||
Aggregate Intrinsic Value, Outstanding Ending | |||||
Number of Options, Exercisable Ending | 101,665 | ||||
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] | |||||
Number of Options, Outstanding Beginning | 95,007 | 67,567 | 70,400 | ||
Weighted Average Exercise Price, Outstanding Beginning | $ 12.45 | $ 14.40 | $ 15.60 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 8 years 4 months 24 days | ||||
Aggregate Intrinsic Value, Outstanding Beginning | |||||
Number of Options, Granted | 44,113 | 13,333 | |||
Weighted Average Exercise Price, Granted | $ 10.50 | $ 12 | |||
Number of Options, Exercised | |||||
Weighted Average Exercise Price, Exercised | |||||
Number of Options, Forfeited/Cancelled | (16,055) | ||||
Weighted Average Exercise Price, Forfeited | $ 17.40 | ||||
Number of Options, Expired | (16,673) | (111) | |||
Weighted Average Exercise Price, Expired | $ 15.15 | $ 15.75 | |||
Weighted Average Remaining Contractual Term, Outstanding Ending | 7 years 8 months 12 days | ||||
Aggregate Intrinsic Value, Outstanding vested and Expected to vest Ending | |||||
Weighted Average Remaining Contractual Term, Granted | 10 years | ||||
Aggregate Intrinsic Value, Outstanding Granted | |||||
Number of options, forfeited/cancelled | 16,055 | ||||
Weighted average remaining contractual term, expired | 4 years 3 months 18 days | ||||
Number of Options, Outstanding Ending | 95,007 | 67,567 | |||
Weighted Average Exercise Price, Outstanding Ending | $ 12.45 | $ 14.40 | |||
Weighted Average Remaining Contractual Term, Outstanding Ending | 8 years 3 months 18 days | ||||
Aggregate Intrinsic Value, Exercisable Ending | |||||
Number of options, outstanding vested and expected to vest ending | 95,007 | ||||
Weighted Average Exercise Price, Exercisable Ending | $ 12.45 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 8 years 3 months 18 days | ||||
Aggregate Intrinsic Value, Outstanding vested and Expected to vest Ending | |||||
Weighted Average Exercise Price, Outstanding Ending | $ 12.45 | $ 14.40 | |||
Aggregate Intrinsic Value, Outstanding Ending | |||||
Number of options, outstanding ending | 95,007 | 67,567 | |||
Weighted Average Exercise Price, Exercisable Ending | $ 12.45 | ||||
Aggregate Intrinsic Value, Outstanding vested and Expected to vest Ending | |||||
Aggregate Intrinsic Value, Exercisable Ending | |||||
Number of Options, Expired | 16,673 | 111 | |||
2017 Equity Plan and 2021 Equity Plan [Member] | Directors [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of Options, Granted | 1,538 | ||||
2017 Equity Plan and 2021 Equity 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 | 49,333 | ||||
Weighted Average Exercise Price, Outstanding Beginning | $ 10.05 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 7 years 6 months | ||||
Aggregate Intrinsic Value, Outstanding Beginning | |||||
Number of Options, Granted | 1,538 | ||||
Weighted Average Exercise Price, Granted | $ 9.75 | ||||
Number of Options, Exercised | |||||
Number of Options, Forfeited/Cancelled | |||||
Number of Options, Expired | |||||
Weighted Average Remaining Contractual Term, Granted | 10 years | ||||
Number of options, forfeited/cancelled | |||||
Number of Options, Outstanding Ending | 50,871 | 49,333 | |||
Weighted Average Exercise Price, Outstanding Ending | $ 10.05 | $ 10.05 | |||
Weighted Average Remaining Contractual Term, Outstanding Ending | 6 years 9 months 18 days | ||||
Aggregate Intrinsic Value, Exercisable Ending | |||||
Weighted Average Exercise Price, Exercisable Ending | $ 10.05 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 6 years 9 months 18 days | ||||
Weighted Average Exercise Price, Outstanding Ending | $ 10.05 | $ 10.05 | |||
Aggregate Intrinsic Value, Outstanding Ending | |||||
Number of options, outstanding ending | 50,871 | 49,333 | |||
Weighted Average Exercise Price, Exercisable Ending | $ 10.05 | ||||
Number of options, exercisable ending | 50,871 | ||||
Aggregate Intrinsic Value, Exercisable Ending | |||||
Aggregate Intrinsic Value, Granted | |||||
Number of Options, Expired | |||||
Aggregate Intrinsic Value, Outstanding Ending | |||||
Number of Options, Exercisable Ending | 50,871 |
Summary of Non-vested Non-quali
Summary of Non-vested Non-qualified Stock Option Activity (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
2017 Equity Incentive Plan [Member] | Directors [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Options Nonvested, Ending | 6,666 | ||
Weighted Average Grant-Date Fair Value, Ending | $ 4.35 | ||
Aggregated Intrinsic Value, Nonvested Ending | $ 5,800 | ||
Grant Date Fair Value Nonvested, Ending | $ 29,000 | ||
Number of Options Nonvested, Granted | 43,333 | ||
Weighted Average Grant-Date Fair Value, Granted | $ 8.55 | ||
Grant Date Fair Value Nonvested, Granted | $ 373,000 | ||
Number of Options Nonvested, Vested | (36,667) | ||
Weighted Average Grant-Date Fair Value, Vested | $ 9.45 | ||
Grant Date Fair Value Nonvested, Vested | $ 344,000 | ||
Number of Options Nonvested, Forfeited | |||
Weighted Average Grant-Date Fair Value, Forfeited | |||
Grant Date Fair Value Nonvested, Forfeited | |||
Number of Options Nonvested, Expired | |||
Weighted Average Grant-Date Fair Value, Expired | |||
Grant Date Fair Value Nonvested, Expired | |||
Number of Options Nonvested, Forfeited | |||
Number of Options Nonvested, Beginning | 6,666 | ||
Weighted Average Grant-Date Fair Value, Beginning | $ 4.35 | ||
Aggregated Intrinsic Value, Nonvested Beginning | $ 5,800 | ||
Grant Date Fair Value Nonvested, Beginning | $ 29,000 | ||
Number of Options Nonvested, Ending | 6,666 | ||
Weighted Average Grant-Date Fair Value, Ending | $ 4.35 | ||
Aggregated Intrinsic Value, Nonvested Ending | $ 5,800 | ||
Grant Date Fair Value Nonvested, Ending | $ 29,000 | ||
2017 Equity Incentive Plan [Member] | Employees And Consultants [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Options Nonvested, Ending | 11,667 | ||
Weighted Average Grant-Date Fair Value, Ending | $ 9.15 | ||
Aggregated Intrinsic Value, Nonvested Ending | |||
Grant Date Fair Value Nonvested, Ending | $ 104,800 | ||
Number of Options Nonvested, Granted | 20,239 | ||
Weighted Average Grant-Date Fair Value, Granted | $ 12.30 | ||
Grant Date Fair Value Nonvested, Granted | |||
Number of Options Nonvested, Vested | (8,572) | ||
Weighted Average Grant-Date Fair Value, Vested | $ 16.80 | ||
Grant Date Fair Value Nonvested, Vested | |||
Number of Options Nonvested, Forfeited | |||
Grant Date Fair Value Nonvested, Forfeited | |||
Number of Options Nonvested, Expired | |||
Grant Date Fair Value Nonvested, Expired | |||
Number of Options Nonvested, Forfeited | |||
Number of Options Nonvested, Beginning | |||
Weighted Average Grant-Date Fair Value, Beginning | |||
Aggregated Intrinsic Value, Nonvested Beginning | |||
Grant Date Fair Value Nonvested, Beginning | |||
Aggregated Intrinsic Value, Vested | $ 66,412 | ||
Number of Options Nonvested, Ending | 11,667 | ||
Weighted Average Grant-Date Fair Value, Ending | $ 9.15 | ||
Aggregated Intrinsic Value, Nonvested Ending | |||
Grant Date Fair Value Nonvested, Ending | 104,800 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ (66,412) | ||
2017 Equity Incentive Plan [Member] | Employees And Consultants [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Options Nonvested, Ending | 13,333 | ||
Weighted Average Grant-Date Fair Value, Ending | $ 11.25 | ||
Aggregated Intrinsic Value, Nonvested Ending | |||
Grant Date Fair Value Nonvested, Ending | $ 149,534 | ||
Number of Options Nonvested, Granted | 44,113 | 13,333 | |
Weighted Average Grant-Date Fair Value, Granted | $ 8.85 | $ 9.75 | |
Grant Date Fair Value Nonvested, Granted | $ 387,199 | $ 130,120 | |
Number of Options Nonvested, Vested | (57,446) | (32,833) | |
Weighted Average Grant-Date Fair Value, Vested | $ 9.30 | $ 11.10 | |
Grant Date Fair Value Nonvested, Vested | $ 536,733 | $ 362,998 | |
Number of Options Nonvested, Forfeited | (16,056) | ||
Weighted Average Grant-Date Fair Value, Forfeited | $ 15.30 | ||
Grant Date Fair Value Nonvested, Forfeited | $ 246,344 | ||
Number of Options Nonvested, Expired | |||
Weighted Average Grant-Date Fair Value, Expired | |||
Grant Date Fair Value Nonvested, Expired | |||
Number of Options Nonvested, Forfeited | 16,056 | ||
Number of Options Nonvested, Beginning | 13,333 | 48,889 | |
Weighted Average Grant-Date Fair Value, Beginning | $ 11.25 | $ 12.90 | |
Aggregated Intrinsic Value, Nonvested Beginning | |||
Grant Date Fair Value Nonvested, Beginning | $ 149,534 | $ 628,756 | |
Number of Options Nonvested, Ending | 13,333 | ||
Weighted Average Grant-Date Fair Value, Ending | $ 11.25 | ||
Aggregated Intrinsic Value, Nonvested Ending | |||
Grant Date Fair Value Nonvested, Ending | $ 149,534 | ||
2017 Equity Plan and 2021 Equity Plan [Member] | Directors [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Options Nonvested, Ending | 6,667 | ||
Weighted Average Grant-Date Fair Value, Ending | $ 4.35 | ||
Aggregated Intrinsic Value, Nonvested Ending | $ 31,000 | ||
Grant Date Fair Value Nonvested, Ending | |||
Number of Options Nonvested, Granted | 1,538 | ||
Weighted Average Grant-Date Fair Value, Granted | $ 9.75 | ||
Grant Date Fair Value Nonvested, Granted | |||
Number of Options Nonvested, Vested | (8,205) | ||
Weighted Average Grant-Date Fair Value, Vested | $ 5.40 | ||
Grant Date Fair Value Nonvested, Vested | |||
Number of Options Nonvested, Forfeited | |||
Number of Options Nonvested, Expired | |||
Number of Options Nonvested, Forfeited | |||
Number of Options Nonvested, Beginning | 6,667 | ||
Weighted Average Grant-Date Fair Value, Beginning | $ 4.35 | ||
Aggregated Intrinsic Value, Nonvested Beginning | $ 31,000 | ||
Grant Date Fair Value Nonvested, Beginning | |||
Aggregated Intrinsic Value, Vested | $ 1,154 | ||
Number of Options Nonvested, Ending | 6,667 | ||
Weighted Average Grant-Date Fair Value, Ending | $ 4.35 | ||
Aggregated Intrinsic Value, Nonvested Ending | $ 31,000 | ||
Grant Date Fair Value Nonvested, Ending | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | (1,154) | ||
Aggregated Intrinsic Value, Nonvested Forfeited | $ (29,846) |
Schedule of Restricted Stock Un
Schedule of Restricted Stock Units Activity (Details) - 2017 Equity Incentive Plan [Member] - Employees, Directors and Consultants [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Units, beginning | 50,333 | 65,782 |
Weighted Average Grant Date Fair Value, beginning | $ 19.20 | $ 21 |
Aggregated Intrinsic Value, Outstanding beginning | $ 730,185 | |
Number of Units, Granted | ||
Weighted Average Grant Date Fair Value, Granted | ||
Number of Units, Vested and settled with share issuance | (45,000) | (7,467) |
Weighted Average Grant Date Fair Value, Vested and settled with share issuance | $ 18.15 | $ 27.15 |
Number of Units, Forfeited/canceled | (5,333) | (7,982) |
Weighted Average Grant Date Fair Value, Forfeited/canceled | $ 27 | $ 26.85 |
Number of Units, ending | 50,333 | |
Weighted Average Grant Date Fair Value, ending | $ 19.20 | |
Aggregated Intrinsic Value, Outstanding ending |
Schedule of Incentive Bonus Awa
Schedule of Incentive Bonus Awards Granted to Employees (Details) - Incentive Stock Bonus Awards [Member] - 2017 Equity Incentive Plan [Member] - Employees [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Shares, Nonvested, Ending | 11,200 | ||
Weighted Average Grant-date Fair Value, Ending | $ 16.80 | ||
Aggregated Intrinsic Value, Nonvested Beginning | $ 124,320 | ||
Number of Shares, Awarded | |||
Weighted Average Grant-date Fair Value, Awarded | |||
Number of Shares, Vested | (11,200) | ||
Weighted Average Grant-Date Fair Value, Vested | $ 16.80 | ||
Number of Shares, Forfeited | |||
Weighted Average Grant-date Fair Value, Forfeited |
Equity Incentive Plans (Details
Equity Incentive Plans (Details Narrative) - USD ($) | Aug. 20, 2020 | Jun. 24, 2020 | Apr. 30, 2020 | Jan. 02, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 22, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock Issued During Period, Shares, New Issues | 6,667 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Minimum | 150.20% | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Maximum | 152.51% | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum | 0.55% | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Maximum | 1.49% | |||||||||
Share-based Payment Arrangement, Noncash Expense | $ 51,055 | $ 252,757 | $ 277,183 | $ 788,599 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 163,692 | |||||||||
Non-qualified Stock Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 21,777 | |||||||||
Non-qualified Stock Options [Member] | Employees And Consultants [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 20,239 | |||||||||
Non-qualified Stock Options [Member] | 21 Employees [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 10 years | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 6,906 | |||||||||
Non-qualified Stock Options [Member] | Former Employee [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 1,914 | |||||||||
Restricted Stock Units (RSUs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Vested | 199,125 | 79,120 | $ 1,035,750 | |||||||
Intrinsic value of vested and settled with issuance of share | 1,105,750 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 5,333 | |||||||||
Incentive Stock Bonus Awards [Member] | Employees [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Payment Arrangement, Noncash Expense | 0 | 44,209 | ||||||||
Intrinsic value of vested and settled with issuance of share | 0 | 58,240 | ||||||||
Shares Granted, Value, Share-based Payment Arrangement, Forfeited | 0 | 0 | ||||||||
2021 Equity Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 666,667 | |||||||||
2017 Equity Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 20,239 | |||||||||
Employees, Directors and Consultants [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Payment Arrangement, Noncash Expense | 25,163 | $ 25,163 | $ 278,906 | |||||||
Chief Financial Officer [Member] | Non-qualified Stock Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 10 years | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 1,667 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 13,333 | |||||||||
Chief Financial Officer [Member] | Non-qualified Stock Options [Member] | June 30, 2022 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 2,780 | |||||||||
Chief Financial Officer [Member] | Non-qualified Stock Options [Member] | June 30, 2023 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 665,000 | |||||||||
Chief Financial Officer [Member] | Non-qualified Stock Options [Member] | June 30, 2024 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 668,000 | |||||||||
2017 Equity Incentive Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common Stock, Capital Shares Reserved for Future Issuance | 333,333 | |||||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 6,412 | |||||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 3 months | |||||||||
2017 Equity Incentive Plan [Member] | Independent Directors [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Professional Fees | $ 15,000 | |||||||||
Stock Issued During Period, Shares, New Issues | 1,316 | |||||||||
2017 Equity Incentive Plan [Member] | Independent Directors [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Professional Fees | $ 60,000 | |||||||||
Stock Issued During Period, Shares, New Issues | 5,263 | |||||||||
2017 Equity Incentive Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common Stock, Capital Shares Reserved for Future Issuance | 6,976 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award | 333,333 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 162,665 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 333.3333 | |||||||||
2017 Equity Incentive Plan [Member] | Employees And Consultants [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of Options, Granted | 44,113 | 13,333 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 57,446 | 32,833 | ||||||||
2017 Equity Incentive Plan [Member] | Non-qualified Stock Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award | 68,333 | |||||||||
Stock option to purchase - thresholds - performance based | 40,000 | |||||||||
Number of shares forfeited for terminations | 28,333 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 5 years | |||||||||
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 Payment Arrangement, Noncash Expense | $ 29,881 | 171,624 | $ 189,568 | $ 390,485 | ||||||
Number of Options, Granted | 44,113 | 13,333 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 8 years 4 months 24 days | |||||||||
2017 Equity Incentive Plan [Member] | Non-qualified Stock Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Minimum | 114.97% | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Maximum | 122.48% | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 10 years | 5 years | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum | 0.20% | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Maximum | 2.37% | |||||||||
2017 Equity Incentive Plan [Member] | Independent Directors [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock Issued During Period, Shares, New Issues | 1,316 | |||||||||
2017 Equity Incentive Plan [Member] | Independent Directors [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock Issued During Period, Shares, New Issues | 5,263 | |||||||||
2017 Equity Incentive Plan [Member] | Director [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 6,412 | |||||||||
Share-based Payment Arrangement, Noncash Expense | $ 21,174 | $ 55,970 | $ 62,452 | $ 0 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 8,205 | 10,142 | ||||||||
2017 Equity Incentive Plan [Member] | Director [Member] | Non-qualified Stock Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award | 3,333 | 10,000 | 0 | |||||||
Number of Options, Granted | 29,266 | |||||||||
2017 Equity Incentive Plan [Member] | Two New Independent Directors [Member] | Non-qualified Stock Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award | 13,333 | |||||||||
Number of Options, Granted | 39,600 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 5 years | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 50.00% | |||||||||
Share based compensation arrangement stock issued and outstanding | 144,340 | |||||||||
2017 Equity Incentive Plan [Member] | Two New Independent Directors [Member] | Non-qualified Stock Options [Member] | April 1, 2021 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 50.00% | |||||||||
2017 Equity Incentive Plan [Member] | Directors [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of Options, Granted | 43,333 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 36,667 | |||||||||
2017 Equity Incentive Plan [Member] | Directors [Member] | Non-qualified Stock Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of Options, Granted | 43,333 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 5 years | 7 years 7 months 6 days | 8 years 7 months 6 days | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 50.00% | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 13,333,000,000 | |||||||||
2019 Special Equity Award [Member] | Director [Member] | Non-qualified Stock Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award | 26,667 | |||||||||
Number of Options, Granted | 234,126 | |||||||||
2021 Equity Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 230,770 | |||||||||
2021 Equity Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common Stock, Capital Shares Reserved for Future Issuance | 665,129 | |||||||||
Share-based Payment Arrangement, Noncash Expense | $ 90,255 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 3 years | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 1,538 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 666,667 | |||||||||
2021 Equity Plan [Member] | Non-qualified Stock Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of Options, Granted | 1,538 | |||||||||
2021 Equity Plan [Member] | Directors [Member] | Non-qualified Stock Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 10 years | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 1,538 |
Schedule of U.S. Federal Statut
Schedule of U.S. Federal Statutory Income Tax Rate and Reported Provision for Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||||
Income taxes computed at the federal statutory rate | $ (369,000) | $ (281,000) | ||||
States taxes, net of federal benefits | (69,000) | (53,000) | ||||
Permanent differences | (136,000) | 17,000 | ||||
True-up adjustments | 115,000 | 199,000 | ||||
Adjustment to net operating loss | (17,000) | (86,000) | ||||
Change in valuation allowance | 476,000 | 204,000 | ||||
Reported income tax (benefit) expense |
Schedule of Deferred Tax Assets
Schedule of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating losses | $ 4,821,000 | $ 4,081,000 |
Equity compensation | 118,000 | 392,000 |
Other deferred tax assets | 169,000 | 149,000 |
Total deferred tax assets | 5,108,000 | 4,622,000 |
Other deferred tax liabilities | 68,000 | 58,000 |
Total deferred tax liabilities | (68,000) | (58,000) |
Net deferred tax assets before valuation allowance | 5,040,000 | 4,564,000 |
Less valuation allowance | (5,040,000) | (4,564,000) |
Net deferred tax assets |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Operating Loss Carryforwards | $ 20,260,000 | $ 19,322,000 |
Net operating loss carry forward expected to expire amount | $ 11,196,261 | $ 11,196,261 |
Net operating loss expiration term | 2034 through 2037 | 2034 through 2037 |
NOLs usage against taxable income, percentage | 80.00% | 80.00% |
Equity Method Investment, Ownership Percentage | 50.00% | 50.00% |
NOLs carryforwards term | 3 years | |
Income Tax Examination, Penalties and Interest Expense | $ 0 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jan. 28, 2022 | Jan. 07, 2021 | Jan. 02, 2021 | Jan. 17, 2022 | Jan. 27, 2022 | Nov. 04, 2021 | Nov. 03, 2021 | Sep. 30, 2021 | Feb. 10, 2021 | Dec. 31, 2020 | Dec. 11, 2020 | Apr. 22, 2020 | Dec. 31, 2019 |
Subsequent Event [Line Items] | |||||||||||||
Deferred Compensation Liability, Current | $ 108,945 | $ 128,434 | $ 503,466 | ||||||||||
Debt Instrument, Face Amount | $ 514,200 | $ 554,000 | $ 554,000 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | 1.00% | |||||||||||
Common Stock, Shares Authorized | 350,000,000 | 350,000,000 | 350,000,000 | ||||||||||
Preferred Stock, Shares Authorized | 150,000,000 | 150,000,000 | 150,000,000 | ||||||||||
Series B Preferred Stock [Member] | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Common Stock, Shares Authorized | 850,000,000 | ||||||||||||
Forecast [Member] | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Reverse stock split, Description | On January 17, 2022, the Company’s Board of Directors approved a reverse stock split at a ratio of one-for-one hundred and fifty. Such reverse stock split was implemented effective January 27, 2022. | ||||||||||||
Subsequent Event [Member] | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Debt Instrument, Face Amount | $ 514,200 | ||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | ||||||||||||
Common Stock, Shares Authorized | 200,000,000 | 850,000,000 | |||||||||||
Preferred Stock, Shares Authorized | 25,000,000 | 150,000,000 | |||||||||||
Subsequent Event [Member] | Series B Preferred Stock [Member] | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Shares redeemed | 1,650 | ||||||||||||
Redemption value | $ 2,000,000 | ||||||||||||
Replacement Reserve Escrow | $ 1,365,000 | ||||||||||||
Subsequent Event [Member] | Consulting Agreement [Member] | Mr. James R. Shipley [Member] | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Professional Fees | $ 6,500 | ||||||||||||
Subsequent Event [Member] | 2017 Equity Incentive Plan [Member] | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Number of Options, Granted | 6,905 | ||||||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 19.50 | ||||||||||||
Deferred Compensation Liability, Current | $ 128,434 |
Temporary Equity (Details Narra
Temporary Equity (Details Narrative) - USD ($) | Sep. 28, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Dec. 07, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Temporary Equity, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 | |||||
Common Stock, Shares Authorized | 350,000,000 | 350,000,000 | 350,000,000 | 350,000,000 | |||
Temporary equity net proceeds | $ 2,625,000 | $ 1,260,000 | |||||
Escrow Deposit | $ 1,365,000 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 9 | $ 9 | $ 37.50 | $ 36 | $ 37.50 | ||
Equity Method Investments [Member] | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | 10.40 | $ 10.40 | |||||
Percentage of placement agent cash fee | 9.00% | ||||||
Investment Company, Shareholder Service Fee Expense | $ 270,000 | ||||||
Warrants to purchase of common stock shares | 34,737 | ||||||
Investor Warrant [Member] | |||||||
Class of Warrant or Right, Date from which Warrants or Rights Exercisable | Sep. 28, 2024 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 9.41 | $ 9.41 | |||||
[custom:IssuanceOfCommonStockExercisePercentageProvision] | 4.99% | ||||||
Series B Redeemable Convertible Preferred Stock [Member] | |||||||
Temporary Equity, Shares Authorized | 3,300 | ||||||
Temporary Equity, Par or Stated Value Per Share | $ 1,000 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 9.45 | ||||||
Convertible Preferred Stock [Member] | |||||||
Common Stock, Shares Authorized | 385,965 | ||||||
Temporary Equity, Aggregate Amount of Redemption Requirement | $ 3,000,000 | ||||||
Convertible Preferred Stock [Member] | Maximum [Member] | |||||||
Stock and Warrants Issued During Period, Value, Preferred Stock and Warrants | 192,982 | ||||||
Series B Preferred Stock [Member] | |||||||
Common Stock, Shares Authorized | 850,000,000 | 850,000,000 | |||||
Temporary Equity, Aggregate Amount of Redemption Requirement | 3,000,000 | ||||||
Escrow Deposit | $ 1,365,000 | $ 1,365,000 | $ 1,365,000 | ||||
Preferred Stock, Dividend Rate, Percentage | 8.00% | ||||||
Common Stock, Convertible, Conversion Price, Increase | $ 8.55 | ||||||
Percentage of preferred stock conversion provision | 4.99% | ||||||
Percentage of common stock reserve | 200.00% | ||||||
Debt Instrument, Redemption Price, Percentage | 120.00% | ||||||
Debt Instrument, Convertible, Liquidation Preference, Per Share | $ 1,000 | $ 1,000 | |||||
Redeemable shares | 1,650 | 1,650 | |||||
Redemption price percentage dividend due thereon | 8.00% | ||||||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 120.00% | ||||||
Debt instrument redeemption stated value | $ 1,000 | $ 1,000 | |||||
Debt Instrument, Convertible, Liquidation Preference, Value | 3,960,000 | 3,960,000 | |||||
Temporary Equity, Accretion to Redemption Value | 3,960,000 | ||||||
Temporary equity non cash redemption value adjustment | 2,262,847 | ||||||
Proceeds from Issuance of Long-term Debt and Capital Securities, Net | $ 2,624,874 | ||||||
Temporary Equity, Description | the redemption of the outstanding shares of Series A Preferred Stock of the Company for common stock at the rate of | ||||||
Series B Preferred Stock [Member] | Maximum [Member] | |||||||
Stock and Warrants Issued During Period, Value, Preferred Stock and Warrants | $ 192,982 | ||||||
Series A Preferred Stock [Member] | |||||||
Preferred Stock, Value, Outstanding | $ 1,365,000 | $ 1,365,000 | |||||
Debt Instrument, Redemption Price, Percentage | 120.00% | ||||||
Debt Instrument, Convertible, Liquidation Preference, Per Share | $ 1,000 | $ 1,000 |
Stockholders_ Deficit (Details
Stockholders’ Deficit (Details Narrative) - USD ($) | Sep. 28, 2021 | Apr. 08, 2021 | Mar. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Class of Stock [Line Items] | ||||||
Preferred Stock, Shares Authorized | 150,000,000 | 150,000,000 | 150,000,000 | |||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||
Preferred Stock, Shares Outstanding | 42,030,331 | 42,030,331 | 42,030,331 | |||
Common Stock, Shares Authorized | 350,000,000 | 350,000,000 | 350,000,000 | |||
Common Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||
Common Stock, Shares, Issued | 1,583,511 | 1,576,844 | 1,521,444 | |||
Proceeds from Issuance of Private Placement | $ 6,667 | $ 6,667 | ||||
Aggregate common shares issued upon execution of settlement | 67,000 | 67,000 | ||||
Common Stock, Shares, Outstanding | 1,583,511 | 1,576,844 | 1,521,444 | |||
Series A Preferred Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Preferred stock, par value | $ 0.00001 | |||||
Preferred Stock, Shares Outstanding | 42,030,331 | 42,030,331 | ||||
Series B Preferred Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Preferred stock, par value | $ 1,000 | |||||
Preferred Stock, Shares Outstanding | 3,300 | |||||
Stock Repurchased During Period, Value | $ 3,300,000 | |||||
Temporary Equity, Aggregate Amount of Redemption Requirement | 3,000,000 | |||||
Common Stock, Shares Authorized | 850,000,000 | |||||
Series B Preferred Stock [Member] | Maximum [Member] | ||||||
Class of Stock [Line Items] | ||||||
Stock and Warrants Issued During Period, Value, Preferred Stock and Warrants | $ 192,982 | |||||
Series B Preferred Stock [Member] | Purchase Agreement [Member] | ||||||
Class of Stock [Line Items] | ||||||
Stock Repurchased During Period, Shares | 3,300 |