Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 04, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | BARFRESH FOOD GROUP INC. | |
Entity Central Index Key | 1,487,197 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 95,157,137 | |
Trading Symbol | BRFH | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 1,305,126 | $ 1,986,004 |
Accounts Receivable | 318,874 | 28,596 |
Inventory | 265,189 | 327,961 |
Prepaid expenses and other current assets | 61,355 | 30,524 |
Total current assets | 1,950,544 | 2,373,085 |
Property, plant and equipment, net of depreciation | 1,390,568 | 688,772 |
Intangible asset, net of amortization | 611,891 | 617,257 |
Deposits | 17,451 | 16,451 |
Total Assets | 3,970,454 | 3,695,565 |
Current liabilities: | ||
Accounts payable | 380,821 | 131,804 |
Accrued expenses | 800,772 | 236,312 |
Deferred rent liability | 742 | 1,855 |
Short-term notes payable - related party, net of discount | 50,000 | 50,000 |
Short-term notes payable, net of discount | 50,000 | 50,000 |
Convertible note-related party, net of discount | 119,993 | |
Convertible note, net of discount | 234,045 | 1,975,878 |
Current portion of long term debt | 11,378 | 14,039 |
Total current liabilities | 1,527,758 | 2,579,881 |
Long Term Debt, net of current portion | 30,984 | 45,992 |
Total liabilities | 1,558,742 | 2,625,873 |
Commitments and contingencies (Note 6) | ||
Stockholders' equity: | ||
Preferred stock, $0.000001 par value, 5,000,000 shares authorized, none issued or outstanding | ||
Common stock, $0.000001 par value; 300,000,000 shares authorized; 94,714,583 and 86,186,453 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively | 95 | 86 |
Additional paid in capital | 22,357,518 | 15,798,338 |
Accumulated deficit | (19,945,901) | (14,728,731) |
Total stockholders' equity | 2,411,712 | 1,069,693 |
Total Liabilities and Stockholders' Equity | $ 3,970,454 | $ 3,695,566 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.000001 | $ 0.000001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.000001 | $ 0.000001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 94,714,583 | 86,186,453 |
Common stock, shares outstanding | 94,714,583 | 86,186,453 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
Revenue | $ 559,172 | $ 168,099 | $ 834,497 | $ 221,732 |
Cost of revenue | 277,934 | 90,202 | 418,670 | 119,550 |
Gross profit | 281,238 | 77,897 | 415,827 | 102,182 |
Operating expenses: | ||||
General and administrative | 2,724,652 | 1,614,587 | 5,298,717 | 2,767,566 |
Depreciation Amortization | 52,059 | 45,048 | 98,807 | 84,446 |
Total operating expenses | 2,776,711 | 1,659,635 | 5,397,524 | 2,852,012 |
Operating loss | (2,495,473) | (1,581,738) | (4,981,697) | (2,749,830) |
Other expenses | ||||
Interest | 14,142 | 147,741 | 235,473 | 285,477 |
Net (loss) | $ (2,509,615) | $ (1,729,479) | $ (5,217,170) | $ (3,035,307) |
Per share information - basic and fully diluted: | ||||
Weighted average shares outstanding | 94,635,203 | 77,880,413 | 91,955,895 | 73,219,231 |
Net (loss) per share | $ (0.03) | $ (0.02) | $ (0.06) | $ (0.04) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Cash Flows [Abstract] | ||
Net Cash used in operations | $ (3,728,465) | $ (2,435,727) |
Cash flow from investing activities: | ||
Investment in trademark | (25,343) | (320) |
Purchase of equipment | (796,270) | (137,803) |
Sale of equipment | 26,374 | 9,957 |
Net Cash used in investing activities | (795,239) | (128,166) |
Cash flow from financing activities: | ||
Issuance of common stock and warrants for cash | 3,569,995 | 5,277,489 |
Exercise of Warrant for cash | 265,000 | 0 |
Exercise of Option for cash | 25,500 | 313,550 |
Repayment of Short Term Notes payable | (75,000) | |
Repayment of Short Term Notes-related party | (300,000) | |
Repayment of long term debt | (17,669) | 13,653 |
Net cash used in financing activities | 3,842,826 | 5,229,692 |
Net increase (decrease) in cash | (680,878) | 2,665,799 |
Cash at beginning of period | 1,986,004 | 821,309 |
Cash at end of period | 1,305,126 | 3,487,108 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 6,143 | |
Cash paid for income taxes | ||
Non-cash financial activities | ||
Common Stock issued for services | 95,000 | 313,549 |
Common Stock issued on conversion of note | $ 2,529,453 | |
Common Stock issued on conversion of convertible note | 50,000 | 57,857 |
Fair value of warrants issued with convertible notes | $ 50,000 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Note 1. Basis of Presentation and Significant Accounting Policies Throughout this report, the terms our, we, us and the Company refer to Barfresh Food Group Inc., including its subsidiaries. The accompanying unaudited condensed financial statements of Barfresh Food Group Inc. at June 30, 2016 and 2015 have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial statements, instructions to Form 10-Q, and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed financial statements should be read in conjunction with the financial statements and notes thereto included in our annual report on Form 10-KT for the nine months ended December 31, 2015. In managements opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation to make our financial statements not misleading have been included. The results of operations for the periods ended June 30, 2016 and 2015 presented are not necessarily indicative of the results to be expected for the full year. The December 31, 2015 balance sheet has been derived from our audited financial statements included in our annual report on Form 10-KT for the nine months ended December 31, 2015. Basis of Consolidation The condensed consolidated financial statements include the financial statements of the Company and our wholly owned subsidiaries Barfresh Inc. and Barfresh Corporation, Inc. (formerly known as Smoothie, Inc.). All inter-company balances and transactions among the companies have been eliminated upon consolidation. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenues and expenses during the years reported. Actual results may differ from these estimates. Inventory Inventory consists of finished goods and is carried at the lower of cost or market on a first in first out basis. Intangible Assets Intangible assets are comprised of patents, net of amortization. The patent costs are being amortized over the life of the patents, which is twenty years from the date of filing the patent applications. In accordance with ASC Topic 350 Intangibles - Goodwill and Other Property, Plant and Equipment Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment loss, if any. Depreciation is calculated on a straight line basis over the estimated useful lives of the assets. Leasehold improvements are being amortized over the shorter of the useful life of the asset or the lease term that includes any expected renewal periods deemed to be reasonably assured. The estimated useful lives used for financial statement purposes are: Furniture and fixtures: 5 years Equipment: 7 years Leasehold improvements: 2 years Vehicle: 5 years Revenue Recognition We recognize revenue from products sold when there is persuasive evidence of an arrangement, delivery has occurred or services have been rendered, the sales price is determinable and collection is reasonably assured. Earnings per Share We calculate net loss per share in accordance with ASC Topic 260, Earnings per Share Research and Development Expenditures for research activities relating to product development and improvement are charged to expense as incurred. We incurred credit of $8,335 in a prior period relates to credit received for refund and $0 in research and development expenses for the three-month periods ended June 30, 2016 and 2015, respectively, and $15,233 and credit of $2,061 in a prior period relates to credit received in research and development expenses for the six-month periods ended June 30, 2016 and 2015, respectively. Rent Expense We recognize rent expense on a straight-line basis over the reasonably assured lease term as defined in ASC Topic 840, Leases Recent Pronouncements From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. We believe that the impact of recently issued standards that are not yet effective may have an impact on our results of operations and financial position. ASU Update 2014-09 Revenue from Contracts with Customers (Topic 606) issued May 28, 2014 by FASB and IASB converged guidance on recognizing revenue in contracts with customers on an effective date after December 31, 2017 will be evaluated as to impact and implemented accordingly. ASU Update 2014-15 Presentation of Financial Statements-Going Concern (Sub Topic 205-40) issued August 27, 2014 by FASB defines managements responsibility to evaluate whether there is a substantial doubt about an organizations ability to continue as a going concern. The additional disclosure required is effective after December 31, 2015 and will be evaluated as to impact and implemented accordingly. In July 2015, the FASB issued ASU 2015-11, Inventory, which simplifies the measurement principle of inventories valued under the First-In, First-Out (FIFO) or weighted average methods from the lower of cost or market to the lower of cost and net realizable value. ASU 2015-11 is effective for reporting periods beginning after December 15, 2016 including interim periods within those annual periods. We do not expect the standard to have a material impact on our Consolidated Financial Statements. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, which requires that deferred tax assets and liabilities be classified as noncurrent on the consolidated balance sheet. ASU 2015-17 is effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an interim or annual reporting period. Upon adoption, ASU 2015-17 may be applied either prospectively or retrospectively. We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements. In February 2016, the FASB issued ASU No. 2016-02, Leases, to improve financial reporting about leasing transactions. This ASU will require organizations that lease assets (lessees) to recognize a lease liability and a right-of-use asset on its balance sheet for all leases with terms of more than twelve months. A lease liability is a lessees obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset represents the lessees right to use, or control use of, a specified asset for the lease term. The amendments in this ASU simplify the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. This ASU leaves the accounting for the organizations that own the assets leased to the lessee (lessor) largely unchanged except for targeted improvements to align it with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is evaluating the potential impact of ASU 2016-02 on its Consolidated Financial Statements. |
Property Plant and Equipment
Property Plant and Equipment | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property Plant and Equipment | Note 2. Property Plant and Equipment Major classes of property and equipment at June 30, 2016 and December 31, 2015: June 30, 2016 December 31, 2015 Furniture and fixtures $ 13,604 $ 13,604 Equipment 797,518 705,782 Leasehold Improvement 3,300 3,300 Vehicle 90,378 116,752 904,800 839,438 Less: accumulated depreciation (317,830 ) (249,732 ) 586,970 589,706 Equipment not yet placed in service 803,598 99,066 Property and equipment, net of depreciation $ 1,390,568 $ 688,772 We recorded depreciation expense related to these assets of $36,683 and $29,675 for the three-months ended June 30, 2016 and 2015, respectively and $68,098 and $53,700 for the six-months ended June 30, 2016 and 2015, respectively. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 3. Intangible Assets As of June 30, 2016 and December 31, 2015, intangible assets consist primarily of patent costs and trademarks of $785,818 and $760,475, less accumulated amortization of $173,927 and $143,218, respectively. The amounts carried on the balance sheet represent cost to acquire, legal fees and similar costs relating to the patents incurred by the Company. Amortization is calculated through the expiration date of the patent, which is August, 2025. The amount charged to expenses for amortization of the patent costs was $15,332 and $15,373 for the three-month periods ended June 30, 2016 and 2015, respectively, and $30,708 and $30,746 for the six-month periods ended June 30, 2016 and 2015, respectively. Estimated amortization expense related to the patent as of June 30, 2016 is as follows: Years Ending December 31, 2016 (6 months remaining) $ 30,797 2017 61,595 2018 61,595 2019 61,595 2020 61,595 2021 61,595 Thereafter 273,119 Total $ 611,891 |
Related Parties
Related Parties | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Parties | Note 4. Related Parties As disclosed below in Note 5, there remains $50,000 outstanding in a Short-Term Note Payable to a related party, who is a significant shareholder and a director. As disclosed below in Note 6, members of management, directors, and members of their families, participated in $635,000 of the total $2,670,000 convertible notes offering. As disclosed below in Note 9, members of management and directors have received shares of stock and options in exchange for services. |
Short-Term Notes Payable (Relat
Short-Term Notes Payable (Related and Unrelated) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Short-Term Notes Payable (Related and Unrelated) | Note 5. Short-Term Notes Payable (Related and Unrelated) In December 2013, we closed an offering of $775,000 in short-term notes payable (Short-Term Notes), $500,000 of which was purchased by a significant shareholder and $100,000 was purchased by a company controlled by a director and significant shareholder. The Short-Term Notes bear interest at a rate of 2% per annum and were due and payable on December 20, 2014. We also issued 1,291,667 warrants to the Short-Term Note holders for the right to purchase shares of our common stock. Each warrant entitles the holder to purchase one share of our common stock at a price of $0.45 per share, may be exercised on a cashless basis and are exercisable for a period of five years. In accordance with the guidance in ASC Topic 470-20 Debt with Conversion and Other Options The relative value of the warrants was $298,232, which was the amount recorded as debt discount to the short term notes. The amounts recorded as debt discount were amortized over the one-year term, and accreted to interest expense. We estimated the effective interest rate as calculated to be approximately 52% but paid cash at a rate of 2% per annum. We exercised our right to extend the due date of the Short-Term Notes to June 20, 2015. The extended Short-Term Notes bear at the rate of 3% per annum and required us to issue additional warrants (Extension Warrants). We issued 898,842 Extension Warrants to the Short-Term Note holders for the right to purchase shares of our common stock. Each Extension Warrant entitles the holder to purchase one share of our common stock at a price of $0.485 per share, may be exercised on a cashless basis and are exercisable for a period of three years. As discussed above, we accounted for the warrants as per the guidance in ASC 470. The relative value of the Extension Warrants, $164,638, was the amount recorded as the new debt discount. The amounts recorded as debt discount were being amortized over the six-month term of the note, and accreted to interest expense. We estimated the effective interest rate as calculated to be approximately 53% but pay cash at a rate of 3% per annum. The fair value of the Extension Warrant, $0.23 per share, was calculated using the Black-Sholes option pricing model using the following assumptions: Expected life (in years) 3 Volatility (based on a comparable company) 76.88 % Risk Free interest rate 1.10 % Dividend yield (on common stock) -% On June 20, 2015, some of the Short-Term Notes were amended again, and some of the Short-Term Notes were redeemed. Short-Term Notes totaling $700,000 were amended to provide for repayment on June 20, 2015 of 50% of the face value, plus accrued interest to that date ($10,500), and extension of the remaining balance until September 20, 2015, and the interest rate on the notes that were extended was adjusted to 10%. The remaining Short-Term Notes were fully redeemed on June 20, 2015. One such note in the amount of $25,000 was redeemed for cash, and one such note in the amount of $50,000 was redeemed for 71,429 shares of our common stock. As a result of the above described amendments and redemptions of the Short-Term Notes, all remaining unamortized debt discount was expensed as of June 20, 2015. Of the balance of the notes due that were payable on September 20, 2015, one note for $250,000 was repaid on October 1, 2015, and two notes, one to a related party in the amount of $50,000, and one to an unrelated party in the amount of $50,000, were extended until October 31, 2016, with 10% interest. |
Convertible Notes (Related and
Convertible Notes (Related and Unrelated) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Convertible Notes (Related and Unrelated) | Note 6. Convertible Notes (Related and Unrelated) In August 2012, we closed an offering of $440,000 of convertible notes. The notes bear interest at a rate of 12% per annum and were due and payable on September 6, 2013. In addition, the notes were convertible, at any time after the original issue date until the notes are no longer outstanding, into our common stock at a conversion price of $0.372 per share. We also issued 956,519 warrants to the note holders for the right to purchase shares of our common stock. Each warrant entitled the holder to purchase one share of our common stock at a price of $0.46 per share for a term of seven years. When the convertible notes were due, we settled the notes by repaying $40,000 of the notes in cash, issuing new convertible notes in the amount of $400,000 and received payment for another note in the amount of $20,000. The new notes bear interest at a rate of 12% per annum and were due and payable on September 6, 2015. In addition, the new notes were convertible at any time after the original issue date until the new notes are no longer outstanding, into our common stock at a conversion price of $0.25 per share. We also issued warrants to the new note holders for the right to purchase shares of our common stock. Each warrant entitles the holder to purchase one share of our common stock at a price of $0.25 per share. There were 1,680,000 warrants issued. The warrants issued with the original notes were cancelled. In accordance with the guidance in ASC 470, we first calculated the fair value of the warrants issued and then determined the relative value of the notes and determined that there was a beneficial conversion feature. The fair value of the warrants, $0.13 per share ($216,531 in the aggregate), was calculated using the Black-Sholes option pricing model using the following assumptions: Expected life (in years) 3 Volatility (based on a comparable company) 85 % Risk Free interest rate 0.91 % Dividend yield (on common stock) - The relative value of the warrants to the notes was $142,873, which was recorded as a portion of the debt discount. We also recorded a beneficial conversion feature on the convertible notes of $125,905. The amounts recorded as debt discount are being amortized over the two- year term, and accreted to interest expense. We estimated the effective interest rate as calculated to be approximately 74% but will be paying cash at a rate of 12% per annum. All debt discount has been amortized. During September 2015, all of the holders of the convertible notes elected to convert the then outstanding $420,000 of notes, and accumulated interest of $21,955 to our common stock. We issued 1,767,822 shares of our common stock in conversion of these notes. During late 2015, we raised $2,670,000 through the issuance of convertible promissory notes. The notes bore interest at a rate of 10% and matured in one year. Upon completion of an equity financing which occurred during the current quarter, holders of approximately 96% of these notes elected to convert all outstanding principal and accrued and unpaid interest under the notes into the class of equity issued in such financing on the same terms as the other investors concurrently with the closing of such financing. During late 2015 we also issued 1,335,000 warrants to the note holders for the right to purchase shares of our common stock. Each warrant entitled the holder to purchase one share of our common stock at a price of $1.00 per share for a term of five years. Of the aggregate offering amount, $635,000 of the notes and warrants to purchase up to 317,500 shares of common stock were placed with members of the Companys management, including officers and directors of the Company, and family members of certain officers and directors. We elected early adoption of ASU 2015-03, accordingly issuance cost paid has been recorded as debt discount. The following is a breakdown of the convertible promissory note June 30, 2016 December 31, 2015 Convertible notes (including related party) 250,000 2,720,000 Less: Debt discount (warrant value) (15,955 ) (564,462 ) Less: Debt discount (issuance costs paid) - (69,667 ) $ 234,045 $ 2,085,871 We did not record any discount for beneficial conversion as the conversion terms were unknown at the time of issuance. The conversion price was set during the February 2016 equity transaction. At that time the Company evaluated whether a beneficial conversion feature should have been recorded, and concluded that so such beneficial conversion feature needed to be recorded. The fair value of the warrants, $0.586 per share ($782,863 in the aggregate), was calculated using the Black-Sholes option pricing model using the following assumptions: Expected life (in years) 3 Volatility (based on a comparable company) 77.5 % Risk Free interest rate 1.73 % Dividend yield (on common stock) - The relative value of the warrants to the notes was $600,629, which was the amount recorded as a portion of the debt discount. The amount recorded as debt discount are being amortized over the one-year term of the notes, one years, and accreted to interest expense. We estimated the effective interest rate as calculated to be approximately 34% but will be paying cash at a rate of 10% per annum. |
Long Term Debt
Long Term Debt | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long Term Debt | Note 7. Long term Debt Long term debt at June 30, 2016 consists of installment agreements on three vehicles maturing on different dates through June 2020. The installment agreements, are with one financial institution and bear no interest. Monthly payments are $949 per month. The annual maturities of long term debt as of June 30, 2016 are as follows: For years ending December 31, 2016 $ 5,689 2017 11,390 2018 11,390 2019 11,390 2020 2,503 Total $ 42,362 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8. Commitments and Contingencies We lease office space under a non-cancelable operating lease, which will expire on November 7, 2016. The aggregate minimum requirements under non-cancelable leases as of June 30, 2016 is $31,200. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | Note 9. Stockholders Equity During the six months ended June 30, 2016 pursuant to a securities purchase agreement between us and certain accredited investors, we sold 7,561,818 shares of our common stock (Shares) and warrants to purchase up to 3,780,909 Shares (Warrants) for aggregate gross proceeds to us of $6,049,456. The financing consists of two components: a new equity raise in the amount of $3, 570,000 and the conversion into common equity of $2, 479,456 of principal and interest of convertible promissory notes previously issued. See discussion in Note 6. The Warrants are exercisable for a term of five-years at a per Share price of $1.00. The fair value of the warrants, $2,012,168, was estimated at the date of grant using the Black-Scholes option pricing model, with an allocation of the proceeds applied to the warrants. The fair value of the warrants has been included in the total additional paid in capital. The following assumptions were used in the Black-Scholes option pricing model: Expected life (in years) 5 Volatility (based on a comparable company) 78.12 % Risk Free interest rate 1.23 % Dividend yield (on common stock) - In addition, we had previously recorded debt discount on the convertible promissory note discussed above. As a result of the conversion we wrote off the remaining balance, $443,422, against additional paid in capital. Also, during the six months ended June 30, 2016, we issued 210,455 shares of our common stock upon the conversion of outstanding convertible debt, not included in the equity raise described above, representing $50,000 in principal and $2,613.70 in interest. During the six months ended June 30, 2016, the holder of warrants to purchase shares of common stock exercised their rights and purchased 500,000 shares of common stock for an aggregate price of $265,000. In addition the holders of 100,000 warrants exercised their right to a cash-less conversion and received 80,420 shares. Also during the six months ended June 30, 2016 we issued 64,599 shares of stock to a member of our board of directors in lieu of $50,000 in director fees due and 60,878 shares of common stock in lieu of cash for legal fees. We valued the shares based on the trading value on the date issued. In addition during the 6 months ended June 30, 2016 we issued 50,000 shares of stock at a price of $0.51 per share in exchange for outstanding options. During the six months ended June 30, 2016, we issued 1,262,000 options to purchase our common stock to employees of the Company. The exercise price of the options ranged from $0.6129 to $0.83 per share, and are exercisable for a period of 8 years and vest on the third anniversary of issuance. The fair value of the options ($528,280 in the aggregate) was calculated using the Black-Sholes option pricing model, based on the criteria shown below, and are being expensed over the vesting period of each option. Expected life (in years) 5.5 to 8 Volatility (based on a comparable company) 75.81% to 77.31 % Risk Free interest rate 1.49% to 1.73 % Dividend yield (on common stock) - The total amount of equity based compensation for the three and six month periods ended June 30, 2016 included in additional paid in capital was $270,252 and $515,041, respectively. The following is a summary of outstanding stock options issued to employees and directors as of June 30, 2016: Number of Options Exercise price per share $ Average remaining term in years Aggregate intrinsic value at date of grant $ Outstanding December 31, 2015 3,575,000 0.50 - 210,000 Issued 1,262,000 0.61-0.83 7.91 - Cancelled - - - - Exercised (50,000 ) 0.51 Outstanding June 30, 2016 4,787,000 0.45 -0.87 5.88 210,000 Exercisable 1,580,000 0.45 -0.80 2.47 - |
Outstanding Warrants
Outstanding Warrants | 6 Months Ended |
Jun. 30, 2016 | |
Outstanding Warrants | |
Outstanding Warrants | Note 10. Outstanding Warrants The following is a summary of all outstanding warrants as of June 30, 2016: Number of warrants price per share remaining term in years intrinsic value at date of grant Warrants issued in connection with private placements of common stock 17,025,464 $ 0.25 - 1.50 1.94 $ 1,590,567 Warrants issued in connection with private placement of convertible notes 1,680,000 $ 0.25 0.44 $ - Warrants issued in connection with short-term notes payable 3,525,509 $ 0.45-$0.485 2.99 $ 64,583 Warrants issued for services 300,000 $ .025 0.42 During the six-month period ended June 30, 2016 holders of 600,000 warrants to purchase shares of our common stock elected to exercise those warrants. We issued 480,420 shares of our common stock in exchange for the warrants and we received $240,000. |
Interest Expense
Interest Expense | 6 Months Ended |
Jun. 30, 2016 | |
Banking and Thrift [Abstract] | |
Interest Expense | Note 11. Interest Expense Interest expense includes direct interest of $5,887 and $17,661 for the three month periods ended June 30, 2016 and 2015, respectively, and $61,897 and $36,427 for the six month periods ended June 30, 2016 and 2015, respectively, calculated based on the interest rates stated in our various debt instruments. In addition, as more fully described in Notes 5 and 6 above, interest expense includes non-cash amortization of the debt discount of $8,256 and $129,303 for the three months ended June 30, 2016 and 2015, respectively and $173,578 and $246,967 for the six months ended June 30, 2016 and 2015, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12. Income Taxes We account for income taxes in interim periods in accordance with ASC Topic 740, Income Taxes (ASC 740). We have determined an estimated annual effective tax rate. The rate will be revised, if necessary, as of the end of each successive interim period during our fiscal year to our best current estimate. As of June 30, 2016 the estimated effective tax rate for the year will be zero. There are open statutes of limitations for taxing authorities in federal and state jurisdictions to audit our tax returns from 2009 through the current period. Our policy is to account for income tax related interest and penalties in income tax expense in the statement of operations. There have been no income tax related interest or penalties assessed or recorded. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This pronouncement also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. For the six month periods ended June 30, 2016 and 2015, we did not have any interest and penalties associated with tax positions. As of June 30, 2016 we did not have any significant unrecognized uncertain tax positions. |
Business Segments
Business Segments | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Business Segments | Note 13. Business Segments During the six-month periods ended June 30, 2016 and 2015, we operated in only one business segment. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14. Subsequent Events Management has evaluated all activity and concluded that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes to the financial statements. |
Basis of Presentation and Sig20
Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation The condensed consolidated financial statements include the financial statements of the Company and our wholly owned subsidiaries Barfresh Inc. and Barfresh Corporation, Inc. (formerly known as Smoothie, Inc.). All inter-company balances and transactions among the companies have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenues and expenses during the years reported. Actual results may differ from these estimates. |
Inventory | Inventory Inventory consists of finished goods and is carried at the lower of cost or market on a first in first out basis. |
Intangible Assets | Intangible Assets Intangible assets are comprised of patents, net of amortization. The patent costs are being amortized over the life of the patents, which is twenty years from the date of filing the patent applications. In accordance with ASC Topic 350 Intangibles - Goodwill and Other |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment loss, if any. Depreciation is calculated on a straight line basis over the estimated useful lives of the assets. Leasehold improvements are being amortized over the shorter of the useful life of the asset or the lease term that includes any expected renewal periods deemed to be reasonably assured. The estimated useful lives used for financial statement purposes are: Furniture and fixtures: 5 years Equipment: 7 years Leasehold improvements: 2 years Vehicle: 5 years |
Revenue Recognition | Revenue Recognition We recognize revenue from products sold when there is persuasive evidence of an arrangement, delivery has occurred or services have been rendered, the sales price is determinable and collection is reasonably assured. |
Earnings Per Share | Earnings per Share We calculate net loss per share in accordance with ASC Topic 260, Earnings per Share |
Research and Development | Research and Development Expenditures for research activities relating to product development and improvement are charged to expense as incurred. We incurred credit of $8,335 in a prior period relates to credit received for refund and $0 in research and development expenses for the three-month periods ended June 30, 2016 and 2015, respectively, and $15,233 and credit of $2,061 in a prior period relates to credit received in research and development expenses for the six-month periods ended June 30, 2016 and 2015, respectively. |
Rent Expense | Rent Expense We recognize rent expense on a straight-line basis over the reasonably assured lease term as defined in ASC Topic 840, Leases |
Recent Pronouncements | Recent Pronouncements From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. We believe that the impact of recently issued standards that are not yet effective may have an impact on our results of operations and financial position. ASU Update 2014-09 Revenue from Contracts with Customers (Topic 606) issued May 28, 2014 by FASB and IASB converged guidance on recognizing revenue in contracts with customers on an effective date after December 31, 2017 will be evaluated as to impact and implemented accordingly. ASU Update 2014-15 Presentation of Financial Statements-Going Concern (Sub Topic 205-40) issued August 27, 2014 by FASB defines managements responsibility to evaluate whether there is a substantial doubt about an organizations ability to continue as a going concern. The additional disclosure required is effective after December 31, 2015 and will be evaluated as to impact and implemented accordingly. In July 2015, the FASB issued ASU 2015-11, Inventory, which simplifies the measurement principle of inventories valued under the First-In, First-Out (FIFO) or weighted average methods from the lower of cost or market to the lower of cost and net realizable value. ASU 2015-11 is effective for reporting periods beginning after December 15, 2016 including interim periods within those annual periods. We do not expect the standard to have a material impact on our Consolidated Financial Statements. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, which requires that deferred tax assets and liabilities be classified as noncurrent on the consolidated balance sheet. ASU 2015-17 is effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an interim or annual reporting period. Upon adoption, ASU 2015-17 may be applied either prospectively or retrospectively. We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements. In February 2016, the FASB issued ASU No. 2016-02, Leases, to improve financial reporting about leasing transactions. This ASU will require organizations that lease assets (lessees) to recognize a lease liability and a right-of-use asset on its balance sheet for all leases with terms of more than twelve months. A lease liability is a lessees obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset represents the lessees right to use, or control use of, a specified asset for the lease term. The amendments in this ASU simplify the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. This ASU leaves the accounting for the organizations that own the assets leased to the lessee (lessor) largely unchanged except for targeted improvements to align it with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is evaluating the potential impact of ASU 2016-02 on its Consolidated Financial Statements. |
Basis of Presentation and Sig21
Basis of Presentation and Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Estimated Useful Lives of Assets | The estimated useful lives used for financial statement purposes are: Furniture and fixtures: 5 years Equipment: 7 years Leasehold improvements: 2 years Vehicle: 5 years |
Property Plant and Equipment (T
Property Plant and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Major Classes of Property and Equipment | Major classes of property and equipment at June 30, 2016 and December 31, 2015: June 30, 2016 December 31, 2015 Furniture and fixtures $ 13,604 $ 13,604 Equipment 797,518 705,782 Leasehold Improvement 3,300 3,300 Vehicle 90,378 116,752 904,800 839,438 Less: accumulated depreciation (317,830 ) (249,732 ) 586,970 589,706 Equipment not yet placed in service 803,598 99,066 Property and equipment, net of depreciation $ 1,390,568 $ 688,772 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Estimated Amortization Expense Related to Patent | Estimated amortization expense related to the patent as of June 30, 2016 is as follows: Years Ending December 31, 2016 (6 months remaining) $ 30,797 2017 61,595 2018 61,595 2019 61,595 2020 61,595 2021 61,595 Thereafter 273,119 Total $ 611,891 |
Short-Term Notes Payable (Rel24
Short-Term Notes Payable (Related and Unrelated) (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Assumptions Used for Fair Value of Warrant | The fair value of the Extension Warrant, $0.23 per share, was calculated using the Black-Sholes option pricing model using the following assumptions: Expected life (in years) 3 Volatility (based on a comparable company) 76.88 % Risk Free interest rate 1.10 % Dividend yield (on common stock) -% |
Convertible Notes (Related an25
Convertible Notes (Related and Unrelated) (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Assumptions Used for Fair Value of Warrant | The fair value of the warrants, $0.13 per share ($216,531 in the aggregate), was calculated using the Black-Sholes option pricing model using the following assumptions: Expected life (in years) 3 Volatility (based on a comparable company) 85 % Risk Free interest rate 0.91 % Dividend yield (on common stock) - The fair value of the warrants, $0.586 per share ($782,863 in the aggregate), was calculated using the Black-Sholes option pricing model using the following assumptions: Expected life (in years) 3 Volatility (based on a comparable company) 77.5 % Risk Free interest rate 1.73 % Dividend yield (on common stock) - |
Schedule of Convertible Notes Payable Including Related Party | The following is a breakdown of the convertible promissory note June 30, 2016 December 31, 2015 Convertible notes (including related party) 250,000 2,720,000 Less: Debt discount (warrant value) (15,955 ) (564,462 ) Less: Debt discount (issuance costs paid) - (69,667 ) $ 234,045 $ 2,085,871 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Long Term Debt Tables | |
Schedule of Annual Maturities of Long Term Debt | The annual maturities of long term debt as of June 30, 2016 are as follows: For years ending December 31, 2016 $ 5,689 2017 11,390 2018 11,390 2019 11,390 2020 2,503 Total $ 42,362 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Schedule of Fair Value of Warrant Using Black Sholes Option Pricing Model | The following assumptions were used in the Black-Scholes option pricing model: Expected life (in years) 5 Volatility (based on a comparable company) 78.12 % Risk Free interest rate 1.23 % Dividend yield (on common stock) - The fair value of the options ($528,280 in the aggregate) was calculated using the Black-Sholes option pricing model, based on the criteria shown below, and are being expensed over the vesting period of each option. Expected life (in years) 5.5 to 8 Volatility (based on a comparable company) 75.81% to 77.31 % Risk Free interest rate 1.49% to 1.73 % Dividend yield (on common stock) - |
Summary of Outstanding Stock Options Issued to Employees and Directors | The following is a summary of outstanding stock options issued to employees and directors as of June 30, 2016: Number of Options Exercise price per share $ Average remaining term in years Aggregate intrinsic value at date of grant $ Outstanding December 31, 2015 3,575,000 0.50 - 210,000 Issued 1,262,000 0.61-0.83 7.91 - Cancelled - - - - Exercised (50,000 ) 0.51 Outstanding June 30, 2016 4,787,000 0.45 -0.87 5.88 210,000 Exercisable 1,580,000 0.45 -0.80 2.47 - |
Outstanding Warrants (Tables)
Outstanding Warrants (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Outstanding Warrants | |
Summary of Outstanding Warrants | The following is a summary of all outstanding warrants as of June 30, 2016: Number of warrants price per share remaining term in years intrinsic value at date of grant Warrants issued in connection with private placements of common stock 17,025,464 $ 0.25 - 1.50 1.94 $ 1,590,567 Warrants issued in connection with private placement of convertible notes 1,680,000 $ 0.25 0.44 $ - Warrants issued in connection with short-term notes payable 3,525,509 $ 0.45-$0.485 2.99 $ 64,583 Warrants issued for services 300,000 $ .025 0.42 |
Basis of Presentation and Sig29
Basis of Presentation and Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Accounting Policies [Abstract] | ||||
Intangible assets useful life | 20 years | |||
Research and development expenses | $ 8,335 | $ 0 | $ 15,233 | $ 2,061 |
Basis of Presentation and Sig30
Basis of Presentation and Significant Accounting Policies (Details) | 6 Months Ended |
Jun. 30, 2016 | |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 2 years |
Vehicle [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Property Plant and Equipment (D
Property Plant and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 36,683 | $ 29,675 | $ 68,098 | $ 53,700 |
Property Plant and Equipment -
Property Plant and Equipment - Schedule of Major Classes of Property and Equipment (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 904,800 | $ 839,438 |
Less: accumulated depreciation | (317,830) | (249,732) |
Property, plant and equipment | 586,970 | 589,706 |
Equipment not yet placed in service | 803,598 | 99,066 |
Property and equipment, net of depreciation | 1,390,568 | 688,772 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 13,604 | 13,604 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 797,518 | 705,782 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 3,300 | 3,300 |
Vehicle [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 90,378 | $ 116,752 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Patent costs | $ 785,818 | $ 785,818 | $ 760,475 | ||
Accumulated amortization on patents | 173,927 | $ 173,927 | $ 143,218 | ||
Expiration date of patent | 2025-12 | ||||
Amortization of patent costs | $ 15,332 | $ 15,373 | $ 30,708 | $ 30,746 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Estimated Amortization Expense Related to Patent (Details) | Jun. 30, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2016 (6 months remaining) | $ 30,797 |
2,017 | 61,595 |
2,018 | 61,595 |
2,019 | 61,595 |
2,020 | 61,595 |
2,021 | 61,595 |
Thereafter | 273,119 |
Intangible asset, net of amortization | $ 611,891 |
Related Parties (Details Narrat
Related Parties (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Short-term notes payable to related parties | $ 50,000 | $ 50,000 |
Proceeds from issuance convertible note | 2,670,000 | |
Members Of Management [Member] | ||
Proceeds from issuance convertible note | $ 635,000 |
Short-Term Notes Payable (Rel36
Short-Term Notes Payable (Related and Unrelated) (Details Narrative) - USD ($) | Sep. 20, 2015 | Jun. 20, 2015 | Dec. 31, 2013 | Jun. 30, 2016 | Jun. 30, 2015 |
Debt face value | $ 775,000 | ||||
Short term debt interest rate | 2.00% | ||||
Notes payable due date | Dec. 20, 2014 | ||||
Issuance of warrants to purchase of common stock | 1,291,667 | ||||
Warrant, exercise price per share | $ .45 | ||||
Repayment of short term note | $ (75,000) | ||||
Extension Warrants [Member] | |||||
Warrant, exercise price per share | $ 0.23 | ||||
Amount recorded as debt discount | $ 164,638 | ||||
Estimated effective interest rate | 53.00% | ||||
Interest rate per annum | 3.00% | ||||
Short-Term Notes Payable [Member] | |||||
Issuance of warrants to purchase of common stock | 898,842 | ||||
Warrant, exercise price per share | $ 0.485 | ||||
Estimated effective interest rate | 50.00% | 3.00% | |||
Interest rate per annum | 10.00% | ||||
Short-term notes extend due date | Sep. 20, 2015 | Jun. 20, 2015 | |||
Interest expenses includes direct interest | $ 10,500 | ||||
Short-term notes | 700,000 | ||||
Note redeemed for cash | 25,000 | ||||
Note redeemed value | $ 50,000 | ||||
Note redeemed for shares of common stock | 71,429 | ||||
Short-Term Notes Payable [Member] | Warrant [Member] | |||||
Amount recorded as debt discount | $ 298,232 | ||||
Debt discount amortized over the life | 1 year | ||||
Estimated effective interest rate | 52.00% | ||||
Interest rate per annum | 2.00% | ||||
Note One [Member] | |||||
Debt face value | $ 50,000 | ||||
Short term debt interest rate | 10.00% | ||||
Notes payable due date | Oct. 1, 2015 | ||||
Short-term notes extend due date | Oct. 31, 2016 | ||||
Repayment of short term note | $ 250,000 | ||||
Significant Shareholder [Member] | |||||
Debt face value | $ 500,000 | ||||
Director and Significant Shareholder [Member] | |||||
Debt face value | $ 100,000 |
Short-Term Notes Payable (Rel37
Short-Term Notes Payable (Related and Unrelated) - Schedule of Assumptions Used for Fair Value of Warrant (Details) - Short Term Notes Payable [Member] | 6 Months Ended |
Jun. 30, 2016 | |
Expected life (in years) | 3 years |
Volatility (based on a comparable company) | 76.88% |
Risk Free interest rate | 1.10% |
Dividend yield (on common stock) | 0.00% |
Convertible Notes (Related an38
Convertible Notes (Related and Unrelated) (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2013 | Aug. 31, 2012 | Jun. 30, 2016 | |
Short-term Debt [Line Items] | ||||
Debt face value | $ 775,000 | |||
Issuance of convertible notes | $ 2,670,000 | |||
Notes payable due date | Dec. 20, 2014 | |||
Warrants execise price per share | $ .45 | |||
Fair value aggregate amount | 100,000 | |||
Convertible notes, beneficial conversion feature | ||||
Interest expenses | $ 21,955 | |||
Percentage of notes converted into equity instrument | 96.00% | |||
Warrant [Member] | ||||
Short-term Debt [Line Items] | ||||
Fair value of warrant per share | $ 0.13 | |||
Fair value aggregate amount | $ 216,531 | |||
Convertible Notes Payable [Member] | ||||
Short-term Debt [Line Items] | ||||
Debt face value | $ 440,000 | $ 400,000 | ||
Notes bear interest rate | 12.00% | 12.00% | ||
Notes payable due date | Sep. 6, 2013 | Sep. 6, 2015 | ||
Conversion price | $ 0.372 | $ 0.25 | ||
Number of warrants issued to purchase of common stock shares | 956,519 | 1,680,000 | ||
Warrants execise price per share | $ 0.46 | $ 0.25 | ||
Warrant, exercisable period | 7 years | |||
Repayment of debt | $ 40,000 | |||
Issuance of convertible notes other | 20,000 | |||
Amount recorded as debt discount | 142,873 | |||
Convertible notes, beneficial conversion feature | $ 125,905 | |||
Debt discount amortization period | 2 years | |||
Estimated effective interest rate | 74.00% | |||
Interest rate per annum | 12.00% | |||
Debt convertible amount | $ 420,000 | |||
Accumulated interest | $ 21,955 | |||
Number of common stock shares issued | 1,767,822 | |||
Convertible Promissory Notes [Member] | ||||
Short-term Debt [Line Items] | ||||
Notes bear interest rate | 10.00% | |||
Number of warrants issued to purchase of common stock shares | 1,335,000 | |||
Warrants execise price per share | $ 1 | |||
Fair value of warrant per share | $ 0.586 | |||
Fair value aggregate amount | $ 782,863 | |||
Convertible notes, beneficial conversion feature | $ 600,629 | |||
Estimated effective interest rate | 34.00% | |||
Interest rate per annum | 10.00% | |||
Offering cost | $ 635,000 | |||
Convertible Promissory Notes [Member] | Maximum [Member] | ||||
Short-term Debt [Line Items] | ||||
Number of warrants issued to purchase of common stock shares | 317,500 |
Convertible Notes (Related an39
Convertible Notes (Related and Unrelated) - Schedule of Assumptions Used for Fair Value of Warrant (Details) | 6 Months Ended |
Jun. 30, 2016 | |
Warrant One [Member] | |
Expected life (in years) | 3 years |
Volatility (based on a comparable company) | 85.00% |
Risk Free interest rate | 0.91% |
Dividend yield (on common stock) | |
Warrant Two [Member] | |
Expected life (in years) | 3 years |
Volatility (based on a comparable company) | 77.50% |
Risk Free interest rate | 1.73% |
Dividend yield (on common stock) |
Convertible Notes (Related an40
Convertible Notes (Related and Unrelated) - Schedule of Convertible Notes Payable Including Related Party (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Convertible Notes Related And Unrelated - Schedule Of Convertible Notes Payable Including Related Party Details | ||
Convertible notes (including related party) | $ 250,000 | $ 2,720,000 |
Less: Debt discount (warrant value) | (15,955) | (564,462) |
Less: Debt discount (issuance costs paid) | (69,667) | |
Total | $ 234,045 | $ 2,085,871 |
Long Term Debt (Details Narrati
Long Term Debt (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended |
Dec. 31, 2013 | Jun. 30, 2016 | |
Long term debt maturing date | Dec. 20, 2014 | |
Installment bears interest rate | $ 0 | |
Monthly intallment payment | $ 949 | |
One Vehicles [Member] | ||
Long term debt maturing date | Jun. 30, 2020 | |
Two Vehicles [Member] | ||
Long term debt maturing date | Jun. 30, 2020 | |
Three Vehicles [Member] | ||
Long term debt maturing date | Jun. 30, 2020 |
Long Term Debt - Schedule of An
Long Term Debt - Schedule of Annual Maturities of Long Term Debt (Details) | Jun. 30, 2016USD ($) |
Long Term Debt - Schedule Of Annual Maturities Of Long Term Debt Details | |
2,016 | $ 5,689 |
2,017 | 11,390 |
2,018 | 11,390 |
2,019 | 11,390 |
2,020 | 2,503 |
Long Term Debt | $ 42,362 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating lease expire date | Nov. 7, 2016 |
Aggregate minimum requirements under the non-cancellable lease | $ 31,200 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | |
Class of Stock [Line Items] | |||
Issuance of warrants to purchase of common stock shares | 500,000 | ||
Issuance of warrants to purchase of common stock shares for total consideration | $ 265,000 | ||
Proceeds from issuance of stock | 3,569,995 | $ 5,277,489 | |
Debt instruments converted into shares value | 50,000 | $ 57,857 | |
Fair value of warrants | $ 100,000 | ||
Number of shares issued conversion olf cash less warrants | 80,420 | ||
Debt instruments converted into shares | 210,455 | ||
Debt instruments principal amount | $ 50,000 | ||
Debt instruments interest amount | 2,614 | ||
Equity based compensation | $ 270,252 | 515,041 | |
Convertible Promissory Note [Member] | |||
Class of Stock [Line Items] | |||
Additional paid in capital | $ 443,422 | $ 443,422 | |
Board Of Directors [Member] | |||
Class of Stock [Line Items] | |||
Number of stock issued during period | 60,878 | ||
Number of stock issued for fees due | $ 50,000 | ||
Number of stock issued for fees due, value | 64,599 | ||
Employees [Member] | |||
Class of Stock [Line Items] | |||
Number of shares issued for exchange options | 50,000 | ||
Issued options to purchase | 1,262,000 | ||
Exercise price of option ranged | $ 0.51 | $ 0.51 | |
Exercisable term | 8 years | ||
Fair value of the options | $ 528,280 | ||
Employees [Member] | Minimum [Member] | |||
Class of Stock [Line Items] | |||
Exercise price of option ranged | 0.6129 | $ 0.6129 | |
Employees [Member] | Maximum [Member] | |||
Class of Stock [Line Items] | |||
Exercise price of option ranged | $ 0.83 | $ 0.83 | |
Securities Purchase Agreement [Member] | Accredited Investors [Member] | |||
Class of Stock [Line Items] | |||
Proceeds from issuance of stock | $ 3,570,000 | ||
Debt instruments converted into shares value | $ 2,479,456 | ||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | Warrant One [Member] | |||
Class of Stock [Line Items] | |||
Number of shares sold | 7,561,818 | ||
Issuance of warrants to purchase of common stock shares | 3,780,909 | ||
Issuance of warrants to purchase of common stock shares for total consideration | $ 6,049,456 | ||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | Warrant [Member] | |||
Class of Stock [Line Items] | |||
Warrants exercisable term | 5 years | ||
Warrants exercisable price per share | $ 1 | ||
Fair value of warrants | $ 2,012,168 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Fair Value Assumptions of Option Using Black Sholes Option Pricing Model (Details) | 6 Months Ended |
Jun. 30, 2016 | |
Stock Option [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Expected life (in years) | 5 years |
Volatility (based on a comparable company) | 78.12% |
Risk Free interest rate | 1.23% |
Dividend yield (on common stock) | 0.00% |
Stock Option One [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Dividend yield (on common stock) | 0.00% |
Stock Option One [Member] | Minimum [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Expected life (in years) | 5 years 6 months |
Volatility (based on a comparable company) | 75.81% |
Risk Free interest rate | 1.49% |
Stock Option One [Member] | Maximum [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Expected life (in years) | 8 years |
Volatility (based on a comparable company) | 77.31% |
Risk Free interest rate | 1.73% |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Outstanding Stock Options Issued to Employees and Directors (Details) - Employees And Directors [Member] | 6 Months Ended |
Jun. 30, 2016USD ($)$ / sharesshares | |
Number of Options, Outstanding, Beginning balance | shares | 3,575,000 |
Number of Options, Issued | shares | 1,262,000 |
Number of Options, Cancelled | shares | |
Number of Options, Exercised | shares | (50,000) |
Number of Options, Outstanding, Ending balance | shares | 4,787,000 |
Number of Options, Exercisable | shares | 1,580,000 |
Exercise price per share, Outstanding, Beginning | $ 0.50 |
Exercise price per share, Cancelled | |
Number of Options, Exercised | $ 0.51 |
Options Issued, Average remaining term in years | 7 years 10 months 28 days |
Options Outstanding, Average remaining term in years | 5 years 10 months 17 days |
Options Exercisable, Average remaining term in years | 2 years 5 months 19 days |
Aggregate intrinsic value at date of grant, Outstanding, Beginning balance | $ | $ 210,000 |
Aggregate intrinsic value at date of grant, issued | $ | |
Aggregate intrinsic value at date of grant, Outstanding, Ending balance | $ | 210,000 |
Aggregate intrinsic value at date of grant, Exercisable | $ | |
Minimum [Member] | |
Exercise price per share, Issued | $ 0.61 |
Exercise price per share, Outstanding, Ending | 0.45 |
Exercise price per share, Exercisable | 0.45 |
Maximum [Member] | |
Exercise price per share, Issued | 0.83 |
Exercise price per share, Outstanding, Ending | 0.87 |
Exercise price per share, Exercisable | $ 0.80 |
Outstanding Warrants (Details N
Outstanding Warrants (Details Narrative) | 6 Months Ended |
Jun. 30, 2016USD ($)shares | |
Outstanding Warrants | |
Issuance of warrants to purchase of common stock shares | 600,000 |
Number of common stock issued for warrants | 480,420 |
Proceeds from issuance of warrants | $ | $ 240,000 |
Outstanding Warrants - Summary
Outstanding Warrants - Summary of Outstanding Warrants (Details) - Warrant [Member] | 6 Months Ended |
Jun. 30, 2016USD ($)$ / sharesshares | |
Short-Term Notes Payable [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of warrants | shares | 3,525,509 |
Remaining term in years | 2 years 11 months 27 days |
Intrinsic value at date of grant | $ | $ 64,583 |
Convertible Notes Payable [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of warrants | shares | 1,680,000 |
Price per share | $ 0.25 |
Remaining term in years | 5 months 9 days |
Intrinsic value at date of grant | $ | |
Convertible Short Term [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of warrants | shares | 300,000 |
Price per share | $ .025 |
Remaining term in years | 5 months 1 day |
Intrinsic value at date of grant | $ | |
Minimum [Member] | Short-Term Notes Payable [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Price per share | $ 0.45 |
Maximum [Member] | Short-Term Notes Payable [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Price per share | $ 0.485 |
Private Placement [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of warrants | shares | 17,025,464 |
Remaining term in years | 1 year 11 months 9 days |
Intrinsic value at date of grant | $ | $ 1,590,567 |
Private Placement [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Price per share | $ 0.25 |
Private Placement [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Price per share | $ 1.50 |
Interest Expense (Details Narra
Interest Expense (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Interest Expense Details Narrative | ||||
Interest expense | $ 5,887 | $ 17,661 | $ 61,897 | $ 36,427 |
Interest expense includes non-cash amortization of the debt discount | $ 8,256 | $ 129,303 | $ 173,578 | $ 246,967 |
Business Segments (Details Narr
Business Segments (Details Narrative) - Segment | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Reporting [Abstract] | ||
Number of business segment | 1 | 1 |