Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 10, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | BARFRESH FOOD GROUP INC. | |
Entity Central Index Key | 0001487197 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 130,085,820 | |
Trading Symbol | BRFH | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 2,907,307 | $ 1,041,569 |
Accounts receivable, net | 642,863 | 357,304 |
Inventory, net | 1,197,941 | 1,226,463 |
Prepaid expenses and other current assets | 121,254 | 98,457 |
Total current assets | 4,869,365 | 2,723,793 |
Property, plant and equipment, net of depreciation | 2,535,129 | 2,500,254 |
Intangible assets, net of amortization | 521,887 | 537,789 |
Deposits | 23,462 | |
Total Assets | 7,949,843 | 5,761,836 |
Current liabilities: | ||
Accounts payable | 742,875 | 1,101,882 |
Accrued expenses | 163,259 | 175,259 |
Accrued payroll | 638,706 | |
Accrued vacation | 146,929 | 155,586 |
Accrued Interest | 196,842 | |
Convertible note - related party, net of discount | 685,756 | |
Convertible note, net of discount | 866,310 | |
Derivative liabilities | 973,021 | |
Total current liabilities | 3,774,992 | 2,071,433 |
Long term liabilities: | ||
Accrued interest | 45,191 | 190,475 |
Convertible note - related party, net of discount | 239,992 | 841,836 |
Convertible note, net of discount | 344,217 | 1,367,487 |
Derivative liabilities | 758,644 | 1,325,653 |
Total liabilities | 5,163,036 | 5,796,884 |
Commitments and contingencies (Note 5,6,7and 11) | ||
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; 130,085,820 and 122,770,960 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 130 | 123 |
Additional paid in capital | 46,787,709 | 41,118,649 |
Accumulated deficit | (44,001,032) | (41,153,820) |
Total stockholders' equity | 2,786,807 | (35,048) |
Total Liabilities and Stockholders' Equity | $ 7,949,843 | $ 5,761,836 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
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 | 130,085,820 | 122,770,960 |
Common stock, shares outstanding | 130,085,820 | 122,770,960 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Revenue | $ 834,534 | $ 623,071 |
Cost of revenue | 387,724 | 278,466 |
Depreciation of Manufacturing Equipment | 12,106 | 11,584 |
Gross profit | 434,704 | 333,021 |
Operating expenses: | ||
General and administrative | 2,003,444 | 2,094,664 |
Depreciation and Amortization | 201,977 | 100,883 |
Total operating expenses | 2,205,421 | 2,195,547 |
Operating loss | (1,770,717) | (1,862,526) |
Other (income)/expenses | ||
Other (income)/expenses /loss from derivative liability | 406,012 | 444,736 |
Warrant modification | 307,460 | |
Interest | 363,073 | 30,876 |
Total other expense | 1,076,545 | 475,612 |
Net (loss) | $ (2,847,262) | $ (2,338,138) |
Per share information - basic and fully diluted: | ||
Weighted average shares outstanding | 126,480,323 | 118,682,325 |
Net (loss) per share | $ (0.02) | $ (0.02) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Cash Flows [Abstract] | ||
Net Cash (used for) Operating Activities | $ (1,873,982) | $ (1,491,691) |
Investing Activities | ||
Purchase of property and equipment | (160,590) | (172,231) |
Purchase of Intangibles | (2,293) | |
Net Cash (used for) Investing Activities | (160,590) | (174,524) |
Financing Activities | ||
Cash received for Warrant Exercises | 1,500,310 | |
Cash received for Stock | 2,400,000 | |
Issuance of short term notes | 250,000 | |
Issuance of convertible notes | 2,503,200 | |
Net Cash from Financing Activities | 3,900,310 | 2,753,200 |
Net Change in Cash and Cash Equivalents | 1,865,738 | 1,086,985 |
Cash and Cash Equivalents, Beginning of Year | 1,041,569 | 1,304,916 |
Cash and Cash Equivalents, End of Year | 2,907,307 | 2,391,901 |
Non Cash Financing and Investing Activities | ||
Total property and equipment included in accounts payable | 60,130 | 342,448 |
Discount on convertible notes | 790,135 | |
Convertible notes principal and interest settled through warrant exercise | $ 384,563 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies Barfresh Food Group Inc., (“we,” “us,” “our,” and the “Company”) was incorporated on February 25, 2010 in the State of Delaware. We are engaged in the manufacturing and distribution of ready to blend beverages, particularly, smoothies, shakes and frappes. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Basis of Consolidation The 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 in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates. Concentration of Credit Risk The amount of cash on deposit with financial institutions exceeds the $250,000 federally insured limit at March 31, 2019 and 2018. However, we believe that cash on deposit that exceeds $250,000 in the financial institutions is financially sound and the risk of loss is minimal. Fair Value Measurement Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange. Level 2 - Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs. Level 3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value. Our financial instruments consist of cash, accounts receivable, accounts payable, derivative liabilities, and convertible notes. The carrying value of our financial instruments approximates their fair value, except for the derivative liability in which carrying value is fair value. Accounts Receivable Accounts receivable are typically unsecured. Our credit policy calls for payment generally within 30 days. The credit worthiness of a customer is evaluated prior to a sale. As of March 31, 2019 and December 31, 2018, the company’s allowance for doubtful accounts was $61,788 and $61,788, respectively. The allowance was estimated based on evaluation of collectability of outstanding Accounts Receivable. Inventory Inventory consists of finished goods and is carried at the lower of cost or realizable value on a first in first out basis. The company monitors the remaining useful life of its inventory and establishes a reserve of obsolescence where appropriate. As of March 31, 2019 and December 31, 2018, the Company’s inventory reserve was $31,237 and $31,237, respectively. Intangible Assets Intangible assets are comprised of patents, net of amortization and trademarks. The patent costs are being amortized over the life of the patent, which is twenty years from the date of filing the patent application. In accordance with ASC Topic 350 Intangibles - Goodwill and Other In accordance with ASC 350 legal costs related to trademarks have been capitalized. We have determined that trademarks have an indeterminable life and therefore are not being amortized. Long-Lived Assets and Other Acquired Intangible Assets We evaluate the recoverability of property and equipment and finite-lived intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. We have not recorded any significant impairment charges during the years presented. 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 that are deemed to be reasonably assured. The estimated useful lives used for financial statement purposes are: Furniture and fixtures: 5 years Manufacturing equipment and customer equipment: 3 years to 7 years Vehicles 5 years Revenue Recognition In accordance with ASC 606, Revenue from Contracts with Customers, revenue is recognized when a customer obtains ownership of promised goods. The Company adopted this standard at the beginning of fiscal year 2018, with no significant impact to its financial position or results of operations, using the modified retrospective method. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods. The Company applies the following five steps: 1) Identify the contract with a customer A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for goods or services that are transferred is probable. For the Company, the contract is the approved sales order, which may also be supplemented by other agreements that formalize various terms and conditions with customers. 2) Identify the performance obligation in the contract Performance obligations promised in a contract are identified based on the goods or that will be transferred to the customer. For the Company, this consists of the delivery of frozen beverages, which provide immediate benefit to the customer. 3) Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods, and is generally stated on the approved sales order. Variable consideration, which typically includes volume-based rebates or discounts, are estimated utilizing the most likely amount method. 4) Allocate the transaction price to performance obligations in the contract 5) Recognize Revenue when or as the Company satisfies a performance obligation The Company recognizes revenue from the sale of frozen beverages when title and risk of loss passes and the customer accepts the goods, which generally occurs at delivery. Customer sales incentives such as volume-based rebates or discounts are treated as a reduction of sales at the time the sale is recognized. Shipping and handling costs are treated as fulfillment costs and presented in distribution, selling and administrative costs. The company evaluated the requirement to disaggregate revenue, and concluded that substantially all of its revenue comes from a single product, frozen beverages. Research and Development Expenditures for research activities relating to product development and improvement are charged to expense as incurred. We incurred $156,199 and $190,341, in research and development expenses for the three-months ended March 31, 2019 and 2018, respectively. Shipping and Handling Costs Shipping and handling costs are included in general and administrative expenses. For the three-month periods ended March 31, 2019 and 2018, shipping and handling costs totaled $98,339 and $138,248, respectively. Income Taxes The provision for income taxes is determined in accordance with the provisions of ASC Topic 740, Accounting for Income Taxes ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements, uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of evidence, it is more than likely than not that some portion or all of the deferred tax assets will not be recognized. For the three-months ended March 31, 2019 and 2018 we did not have any interest and penalties or any significant unrecognized uncertain tax positions. Derivative Liability The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of any derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as gain/loss from derivative liability. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. We analyzed the derivative financial instruments in accordance with ASC 815. The objective is to provide guidance for determining whether an equity-linked financial instrument is indexed to an entity’s own stock. This determination is needed for a scope exception which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non-derivative instrument that falls within the scope of ASC 815-40-05 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument is indexed to an entity’s own stock. A non-derivative instrument that is not indexed to an entity’s own stock cannot be classified as equity and must be accounted for as a liability. There is a two-step approach in determining whether an instrument or embedded feature is indexed to an entity’s own stock. First, the instrument’s contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument’s settlement provisions. The Company utilized the fair value standard set forth by the Financial Accounting Standards Board, defined as the amount at which the assets (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale. Earnings per Share We calculate net loss per share in accordance with ASC Topic 260, Earnings per Share Stock Based Compensation We calculate stock compensation in accordance with ASC Topic 718, Compensation-Stock Based Compensation Reclassifications Certain reclassifications of amounts previously reported have been made to the accompanying consolidated financial statements to maintain consistency between periods presented. The reclassifications had no impact on net income or stockholder’s equity. 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. 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 lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset represents the lessee’s right to use, or control use of, a specified asset for the lease term. The amendments in this ASU leaves the accounting for the organization 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 Company has evaluated the effect of the standard on our financial statements. Based on our evaluation, we will have one material lease subject to adoption of this standard, effective January 1, 2019. As disclosed in Note 7, we entered into a new office space lease that will take effect on April 1, 2019 and would expect to record a right-of-use asset and corresponding liability for amounts that approximate our future commitments of $258,140. |
Property Plant and Equipment
Property Plant and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property Plant and Equipment | Note 2. Property Plant and Equipment Major classes of property and equipment at March 31, 2019 and December 31, 2018: 2019 2018 Furniture and fixtures $ 1,524 $ 1,524 Manufacturing Equipment and customer equipment 3,243,121 3,118,391 Leasehold Improvements 4,886 4,886 Vehicles 29,696 29,696 3,279,227 3,154,497 Less: accumulated depreciation (1,376,921 ) (1,190,846 ) 1,902,307 1,963,651 Equipment not yet placed in service 632,822 536,605 Property and equipment, net of depreciation $ 2,535,129 $ 2,500,254 We recorded depreciation expense related to these assets of $186,074 and $96,564 for the three-months ended March 31, 2019 and 2018, respectively. Depreciation expense in Cost of Goods Sold was $12,106 and $11,584 for three-months ended March 31, 2019 and 2018 respectively |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 3. Intangible Assets As of March 31, 2019, intangible assets consist of patent costs of $764,891, trademarks of $103,309 and accumulated amortization of $346,313. As of December 31, 2018, intangible assets consist of patent costs of $764,891, trademarks of $103,309 and accumulated amortization of $330,411. 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 patents, which is December 2025. The amount charged to amortization was $15,902 and $15,902 for the three-months ended March 31, 2019 and 2018, respectively. Estimated future amortization expense related to patents as of March 31, 2019, is as follows: Total Amortization Years ending December 31, 2019 $ 47,708 2020 63,610 2021 63,610 2022 63,610 2023 63,610 Later years 116,430 $ 418,578 |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Parties | Note 4. Related Parties As disclosed below in Note 5, members of management and directors invested in the company’s convertible notes; and in Note 8, members of management and directors have received shares of stock and options in exchange for services. |
Convertible Notes (Related and
Convertible Notes (Related and Unrelated Party) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Notes (Related and Unrelated Party) | Note 5. Convertible Notes (Related and Unrelated Party) In March 2018, we closed an offering of $2,527,500 in convertible notes, Series CN Note 1 of 2, of which, management, directors and significant shareholders have invested $840,000. The convertible notes bear 10% interest per annum and are due and payable on March 14, 2020. The notes are convertible at any time prior to the due date into our common stock at a conversion price of $0.88 per share or 85% of the average closing price of the common stock over the twenty consecutive trading days immediately preceding the date of note holders’ election; but in no event lower than $0.60 per share. In addition, the interest is convertible at any time prior to the due dates into our common stock at conversion price of 85% of the average closing price of the common stock over the twenty consecutive trading days immediately preceding the date of note holders’ election; but in no event lower than $0.60 per share. There were 1,331,583 warrants issued, in conjunction with the convertible note offering. The fair value of the warrants, $0.17 per share ($220,548 in the aggregate), was calculated using the Black-Scholes option pricing model using the following assumptions: Expected life (in years) 3 Volatility (based on a comparable company) 54.82 % Risk Free interest rate 2.41 % Dividend yield (on common stock) - The value of $220,548 was recorded as a debt discount related to the issuance of the warrants. In April 2018, we offered investors in our March 2018 Convertible Note (“Series CN Notes”) the opportunity to accelerate the issuance of certain warrants associated with the CN Notes. Pursuant to the acceleration offer, Series CN Notes investors who invested an additional 10% to 20% of the Series CN Note amount, immediately received an additional 25% warrant coverage on their initial CN Note investment, which would otherwise have been issued after one year. During April 2018, we closed the CN Note acceleration offer in the amount of $177,300 in convertible notes, of which, management, directors and significant shareholders have invested $30,000. The CN Note acceleration offer convertible notes bear 10% interest per annum and are due and payable on March 14, 2020. The notes are convertible at any time prior to the due date into our common stock at conversion price of $0.88 per share or 85% of the average closing price of the common stock over the twenty consecutive trading days immediately preceding the date of note holders’ election; but in no events lower than $0.60 per share. In addition, the interest is convertible at any time prior to the due dates into our common stock at conversion price of 85% of the average closing price of the common stock over the twenty consecutive trading days immediately preceding the date of note holders’ election; but in no events lower than $0.60 per share. There were 937,373 warrants issued in conjunction with the Series CN Note acceleration offer convertible note offering. The fair value of the warrants, $0.25 per share ($235,519 in the aggregate), was calculated using the Black-Scholes option pricing model using the following assumptions: Expected life (in years) 3 Volatility (based on a comparable company) 55.49 % Risk Free interest rate 2.45 % Dividend yield (on common stock) - The value of $105,199 was recorded as a debt discount related to the issuance of the warrants as using the fair value would cause the debt discount to exceed the gross proceeds received. In November and December 2018, three investors elected to convert their convertible note issued on March 14, 2018 into stock. The total debt converted was $453,000 and $30,459 accrued interest into 804,396 shares of stock. In March 2019, an investor elected to exercise I-Warrants by using part of the investor’s convertible note. The total debt settled was $350,634 of principal and 33,929 of accrued interest. The convertible notes consist of the following components as of December 31, 2018 and March 31, 2019: December 31, 2018 March 31, 2019 Convertible notes $ 2,704,800 $ 2,704,800 Less: Debt discount (warrant value) (325,747 ) (325,747 ) Less: Debt discount (derivative value)(Note 6) (638,988 ) (638,988 ) Less: Debt discount (issuance costs paid) (27,000 ) (27,000 ) Less: Note conversion/settlements (453,000 ) (803,634 ) Add: Debt discount amortization 481,042 642,635 $ 1,741,107 $ 1,552,066 In December 2018, we closed an offering of $1,363,200 in convertible notes, Series CN 2 of 2, of which, management, directors and significant shareholders have invested $560,000. The convertible notes bear 10% interest per annum and are due and payable on November 30, 2020. The notes are convertible at any time prior to the due date into our common stock at conversion price of $0.88 per share or 85% of the average closing price of the common stock over the twenty consecutive trading days immediately preceding the date of note holders’ election; but in no event lower than $0.60 per share. In addition, the interest is convertible at any time prior to the due dates into our common stock at a conversion price of 85% of the average closing price of the common stock over the twenty consecutive trading days immediately preceding the date of note holders’ election; but in no event lower than $0.60 per share. There were 678,864 warrants issued, in conjunction with the convertible note offering. The fair value of the warrants, $0.31 per share ($212,763 in the aggregate), was calculated using the Black-Scholes option pricing model using the following assumptions: Expected life (in years) 3 Volatility (based on a comparable company) 59.00 % Risk Free interest rate 2.83 % Dividend yield (on common stock) - The value of $212,763 was recorded as a debt discount related to the issuance of the warrants. The convertible notes consist of the following components as of December 31, 2018 and March 31, 2019: December 31, 2018 March 31, 2019 Convertible notes $ 1,363,200 $ 1,363,200 Less: Debt discount (warrant value) (212,763 ) (212,763 ) Less: Debt discount (derivative value)(Note 6) (697,186 ) (697,186 ) Less: Debt discount (issuance costs paid) (23,700 ) (23,700 ) Add: Debt discount amortization 38,665 154,658 $ 468,216 $ 584,209 As of March 31, 2019, the outstanding balances due of the Series CN Notes, net of all related debt discount, total $2,136,276. The related party convertible notes (net) and unrelated party convertible notes (net) represent $925,749 and $1,210,527, respectively as of March 31, 2019. Future maturity of convertible notes at face value before effect of all discount, are as follow: Total Convertible Notes Years ending December 31, 2019 $ - 2020 3,264,366 2021 - 2022 - 2023 - $ 3,264,366 |
Derivative Liabilities
Derivative Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | Note 6. Derivative Liabilities As discussed in Note 5, Convertible Notes, the Company issued Series CN Note acceleration offer convertible notes payable that provide variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock, therefore the number of shares of common stock issuable upon conversion of the promissory note is indeterminate. The fair values of the Company’s derivative liabilities are estimated at the issuance date and are revalued at each subsequent reporting date. The Company recognized a derivative liability and debt discount of $569,588 at March 14, 2018 related to the Series CN Convertible notes 1 of 2; $69,400 at April 11, 2018 related to the Series CN Notes Warrant Acceleration; and $697,186 at November 30, 2018 related to the Series CN Convertible note 2 of 2. The derivative liability was revalued at March 31, 2019 with a value of $1,731,665. The Company recorded a loss of $406,012 and $444,736 for the three-months ended March 31, 2019 and March 31, 2018 respectively related to the derivative liability. The fair value of the derivative liability for CN Convertible Note 1 of 2 and CN Note Warrant Acceleration was calculated using the Black-Scholes model using the following assumptions. 31-Dec-18 31-Mar-19 Expected life 1.20 0.96 Volatility (based on comparable company) 72.03 % 102.60 % Risk Fee interest rate 2.48 % 2.27 % Dividend yield (on common stock) - - The fair value of the derivative liability for CN Convertible Note 2 of 2 was calculated using the Black-Scholes model using the following assumptions. 31-Dec-18 31-Mar-19 Expected life 1.92 1.68 Volatility (based on comparable company) 63.70 % 85.61 % Risk Fee interest rate 2.48 % 2.27 % Dividend yield (on common stock) - - Reconciliation of the derivative liability measured at fair value on a recurring basis with the use of significant unobservable inputs (level 3) from December 31, 2018 to March 31, 2019: December 31, 2018 $ 1,325,653 Loss from change in value 406,012 For the period ended December 31, 2018 $ 1,731,665 The following table presents the Company’s fair value hierarchy for applicable assets and liabilities measured at fair value as of December 31, 2018 and March 31, 2019. Level 1 Level 2 Level 3 Total Derivative Liability December 31, 2018 $ - - 1,325,653 $ 1,325,653 Level 1 Level 2 Level 3 Total Derivative Liability March 31, 2019 $ - - 1,731,665 $ 1,731,665 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7. Commitments and Contingencies We lease office space under non-cancelable operating lease which expires on March 31, 2019. Our periodic lease cost and operating cash flows for the three months ended March 31, 2018 and 2019 was $37,201 and $53,906, respectively. As of March 31, 2019, our right of use asset and related liability was $0. Subsequently we entered into a new four-year lease as of April 1, 2019. The lease requires monthly payments of $6,173 for the first year and increases to $6,359 for year two, $6,549 for year three and $6,746 for year four. There are no renewal options, covenants or purchase options. Once we record the lease as of April 1, 2019, we estimate future maturities of lease Liabilities to be (using a 10% discount rate which approximates our borrowing rate): Twelve months ending April 1, 2020 $ 74,081 2021 $ 76,304 2022 $ 78,593 2023 $ 80,951 Total Lease payments $ 309,929 Less Interest $ (51,789 ) Present value of lease liabilities $ 258,140 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Note 8. Stockholders’ Equity During the three-months ended March 31, 2019, we issued 134,984 shares of common stock, valued at $81,040 for services. We also issued 38,462 shares of our common stock, with a value of $25,000, to certain members of our Board of Directors in lieu of cash payments for Director fees. Also, we issued 161,133 options to purchase our common stock to certain members of the Board of Directors in lieu of cash payments for Director fees, valued at $75,000. The exercise price of the options is $0.65 per share, vest immediately, and are exercisable for periods of 8 years. In addition, we issued 105,000 options to purchase our common stock to employees. The exercise price of the options ranged from $0.65 to $0.69 per share, vest after 3 years, and are exercisable for periods of 8 years. In addition, we issued 4,000,000 shares of common stock for capital raise, valued at $2,400,000. The fair value of the options issued ($39,447, in the aggregate) was calculated using the Black-Sholes option pricing model, based on the criteria shown below. Expected life (in years) 5.5 to 8 Volatility (based on a comparable company) 63.83%-64.00 % Risk Free interest rate 2.47%-2.54 % Dividend yield (on common stock) - The shares of our common stock were valued at the trading price on the date of grant, $0.66 and $0.72 per share During the same period, we cancelled 78,000 options to purchase our common stock. Holder of 2,841,454 I warrants elected to exercise those warrant on a cash basis of $1,320,310 and cashless basis of $384,563 to offset convertible note and accrued interest; and received 2,841,454 shares of our common stock. Holder of 300,000 G warrants elected to exercise those warrant on a cash basis of $180,000 and received 300,000 shares of our common stock. During the first quarter of 2019, the Company completed additional funding efforts, including a Private Placement Offering for common shares priced at $0.60 per share, resulting in the receipt of proceeds in the amount of $2.4 million and the issuance of 4,000,000 shares. During the first quarter of 2019, the Company settled certain Executive Deferred Compensation payments with a combination of cash and warrants. The total amount of Deferred Executive compensation settled is $771,113. One-third of that total or $243,623, was paid in cash. The remaining balance of $487,246 was settled by granting the Executives warrants exercisable for five years to purchase the Company’s stock at an exercise price of $0.70 per share. The total amount of equity-based compensation included in additional paid in capital for the years ended March 31, 2019 and 2018 was $136,941 and $246,775, respectively, The following is a summary of outstanding stock options issued to employees and directors as of March 31, 2019: Number of Options Exercise price per share $ Average remaining term in years Aggregate intrinsic value at date of grant $ Outstanding January 1, 2019 7,428,014 .40 - .87 5.48 - Issued 105,000 .65 - .69 Cancelled (78,000 ) Outstanding March 31, 2019 7,455,014 .40 - .87 5.27 Exercisable, March 31 2019 3,586,396 .40 - .87 4.07 - The following is Changes in Stockholders’ Equity as of March 31, 2018 and March 31, 2019: Additional Common Stock paid in Accumulated Shares Amount Capital (Deficit) Total Balance January 1, 2018 118,690,527 $ 119 $ 37,992,799 $ (33,830,997 ) $ 4,161,921 Cashless exercise of options 8,812 - - - - Issuance of stock for services 99,206 - 100,000 - 100,000 Equity based compensation - - 246,775 - 246,775 Discount on convertible notes (warrants) - - 220,548 - 220,548 Net (loss) for the year - - - (2,338,138 ) (2,338,138 ) Balance March 31, 2018 118,798,545 $ 119 $ 38,560,122 $ (36,169,135 ) $ 2,391,106 Additional Common Stock paid in Accumulated Shares Amount Capital (Deficit) Total Balance January 1, 2019 122,770,960 $ 123 $ 41,118,649 $ (41,153,820 ) $ (35,048 ) Exercise of warrants 3,141,454 3 1,884,869 1,884,872 Issuance of stock for services 173,446 - 181,040 - 181,040 Equity based compensation - - 136,941 - 136,941 Warrants issued to Management - - 758,754 - 758,754 Issuance of stock for capital raise 4,000,000 4 2,399,996 - 2,400,000 Warrant modification - - 307,460 - 307,460 Net (loss) for the year - - - (2,847,262 ) (2,847,262 ) Balance March 31, 2019 130,085,860 $ 130 $ 46,787,709 $ (44,001,032 ) $ 2,786,807 |
Outstanding Warrants
Outstanding Warrants | 3 Months Ended |
Mar. 31, 2019 | |
Outstanding Warrants | |
Outstanding Warrants | Note 9. Outstanding Warrants The following is a summary of all outstanding warrants as of March 31, 2019: 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 17,888,354 $ 0.53 - $1.00 1.70 $ - Warrants issued in connection with private placement of notes 1,335,000 $ 1.00 1.76 $ - Warrants issued in connection with convertible note 2,4680,259 $ 0.70 2.16 $ - Warrants issued in connection with settlement of deferred compensation 1,595,611 $ 0.70 5.00 $ - |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 10. 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 March 31, 2019, 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 three-month periods ended March 31, 2019 and 2018, we did not have any interest and penalties associated with tax positions. As of March 31, 2019, we did not have any significant unrecognized uncertain tax positions. |
Liquidity
Liquidity | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity | Note 11. Liquidity During the three months ended March 31, 2019, we used cash for operations of $1,873,982, and purchased equipment for $160,590. We raised cash from the issuance of stock in the amount of $2,400,000, and we received cash for the exercise of warrants in the amount of $1,550,310. During the three months ended March 31, 2018, we used $1,491,691 of cash for operations, $172,231 for the purchase of equipment, and $2,293 for trademarks. We raised cash in the amount of $2,503,200 from the issuance of convertible notes, and $250,000 from the issuance of short term notes. We have a history of operating losses and negative cash flow. As our operations grow, we expect to experience significant increases in our working capital requirements. These conditions raise substantial doubt over the Company’s ability to meet all of its obligations over the twelve months following the filing of this Form 10-Q. Management has evaluated these conditions, and concluded that current plans will alleviate this concern. As of March 31, 2019, we had $2,907,307 of cash on the balance sheet. We have continued to significantly reduce core operating expenses, reducing total General and Administrative Expense in 2018 by $1.7 million, or 18%, as compared with 2017. In addition, in the first quarter of 2019, the Company completed $4.3 million of funding efforts. These efforts included a Private Placement Offering for common shares priced at .60 cents per share, resulting in the receipt of capital investment in the amount of $2.4 million and the issuance of 4,000,000 shares. In addition, the Company offered to reduce the exercise price on its I Warrants from $1 to .60 cents, for a limited time. During the time this offer was open, I Warrant holders converted 2,841,454 warrants at .60 cents, resulting in the receipt of capital investment in the amount of $1.7 million. In addition, during the first quarter of 2019, one investor exercised G series warrants, resulting in the receipt of capital investment in the amount of $180,000. In addition, during the first quarter of 2019, the Company settled certain Executive Deferred Compensation payments with a combination of cash and warrants. The total amount of Deferred Executive compensation settled is $771,113. One-third of that total or $243,623, was paid in cash. The remaining balance of $487,246 was settled by granting the Executives warrants exercisable for five years to purchase the Company’s stock at an exercise price of $0.70 per share, the closing price of our common stock on March 19, 2019, resulting in additional cash savings to the Company. Net Cash Used For Operating Activities during the first quarter of 2019 was higher than is anticipated on a quarterly basis for the next twelve months. During the first quarter, the Company settled several large vendor payables and also made $243,623 in cash payments to settle a portion of deferred Executive Compensation amounts that had accrued over the prior 18 months. The Company’s forecast for the balance of 2019 reflect a significant improvement in cash flow from operations during the next twelve months, as the Company continues to increase contracts with school locations, military bases, and anticipates the roll-out of a National Account with over 2,500 locations. Additionally, the Company has implemented numerous cost reduction measures which will reduce cash expenses over the next twelve months, including relocation of its headquarters office, as well as entering into a new contract for personnel related services. These two measures alone will yield $200,000 per year in cash savings, and the Company continues to pursue additional measures to reduce cash expenses. Finally, the Company has received proposed Term Sheets from potential lenders for an ABL facility, and is of the view that an ABL facility will be available on acceptable terms, should the need arise. The Company has $1.9 million of convertible short term debt coming due in March of 2020. Approximately half of this debt is held by insiders. The Company expects that if for any reason available cash upon maturity of this debt is not adequate to repay the convertible short term debt, that it will be able to refinance such debt, in particular the portion held by insiders. Management has concluded that these actions have mitigated the substantial doubt of our ability to continue as a going concern. However, the Company cannot predict, with certainty, the outcome of its action to generate liquidity, including the availability of additional financing, or whether such actions would generate the expect liquidity as planned. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12. 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation The 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 in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates. |
Concentration of Credit Risk | Concentration of Credit Risk The amount of cash on deposit with financial institutions exceeds the $250,000 federally insured limit at March 31, 2019 and 2018. However, we believe that cash on deposit that exceeds $250,000 in the financial institutions is financially sound and the risk of loss is minimal. |
Fair Value Measurement | Fair Value Measurement Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange. Level 2 - Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs. Level 3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value. Our financial instruments consist of cash, accounts receivable, accounts payable, derivative liabilities, and convertible notes. The carrying value of our financial instruments approximates their fair value, except for the derivative liability in which carrying value is fair value. |
Accounts Receivable | Accounts Receivable Accounts receivable are typically unsecured. Our credit policy calls for payment generally within 30 days. The credit worthiness of a customer is evaluated prior to a sale. As of March 31, 2019 and December 31, 2018, the company’s allowance for doubtful accounts was $61,788 and $61,788, respectively. The allowance was estimated based on evaluation of collectability of outstanding Accounts Receivable. |
Inventory | Inventory Inventory consists of finished goods and is carried at the lower of cost or realizable value on a first in first out basis. The company monitors the remaining useful life of its inventory and establishes a reserve of obsolescence where appropriate. As of March 31, 2019 and December 31, 2018, the Company’s inventory reserve was $31,237 and $31,237, respectively. |
Intangible Assets | Intangible Assets Intangible assets are comprised of patents, net of amortization and trademarks. The patent costs are being amortized over the life of the patent, which is twenty years from the date of filing the patent application. In accordance with ASC Topic 350 Intangibles - Goodwill and Other In accordance with ASC 350 legal costs related to trademarks have been capitalized. We have determined that trademarks have an indeterminable life and therefore are not being amortized. |
Long-Lived Assets and Other Acquired Intangible Assets | Long-Lived Assets and Other Acquired Intangible Assets We evaluate the recoverability of property and equipment and finite-lived intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. We have not recorded any significant impairment charges during the years presented. |
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 that are deemed to be reasonably assured. The estimated useful lives used for financial statement purposes are: Furniture and fixtures: 5 years Manufacturing equipment and customer equipment: 3 years to 7 years Vehicles 5 years |
Revenue Recognition | Revenue Recognition In accordance with ASC 606, Revenue from Contracts with Customers, revenue is recognized when a customer obtains ownership of promised goods. The Company adopted this standard at the beginning of fiscal year 2018, with no significant impact to its financial position or results of operations, using the modified retrospective method. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods. The Company applies the following five steps: 1) Identify the contract with a customer A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for goods or services that are transferred is probable. For the Company, the contract is the approved sales order, which may also be supplemented by other agreements that formalize various terms and conditions with customers. 2) Identify the performance obligation in the contract Performance obligations promised in a contract are identified based on the goods or that will be transferred to the customer. For the Company, this consists of the delivery of frozen beverages, which provide immediate benefit to the customer. 3) Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods, and is generally stated on the approved sales order. Variable consideration, which typically includes volume-based rebates or discounts, are estimated utilizing the most likely amount method. 4) Allocate the transaction price to performance obligations in the contract 5) Recognize Revenue when or as the Company satisfies a performance obligation The Company recognizes revenue from the sale of frozen beverages when title and risk of loss passes and the customer accepts the goods, which generally occurs at delivery. Customer sales incentives such as volume-based rebates or discounts are treated as a reduction of sales at the time the sale is recognized. Shipping and handling costs are treated as fulfillment costs and presented in distribution, selling and administrative costs. The company evaluated the requirement to disaggregate revenue, and concluded that substantially all of its revenue comes from a single product, frozen beverages. |
Research and Development | Research and Development Expenditures for research activities relating to product development and improvement are charged to expense as incurred. We incurred $156,199 and $190,341, in research and development expenses for the three-months ended March 31, 2019 and 2018, respectively. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs are included in general and administrative expenses. For the three-month periods ended March 31, 2019 and 2018, shipping and handling costs totaled $98,339 and $138,248, respectively. |
Income Taxes | Income Taxes The provision for income taxes is determined in accordance with the provisions of ASC Topic 740, Accounting for Income Taxes ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements, uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of evidence, it is more than likely than not that some portion or all of the deferred tax assets will not be recognized. For the three-months ended March 31, 2019 and 2018 we did not have any interest and penalties or any significant unrecognized uncertain tax positions. |
Derivative Liability | Derivative Liability The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of any derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as gain/loss from derivative liability. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. We analyzed the derivative financial instruments in accordance with ASC 815. The objective is to provide guidance for determining whether an equity-linked financial instrument is indexed to an entity’s own stock. This determination is needed for a scope exception which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non-derivative instrument that falls within the scope of ASC 815-40-05 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument is indexed to an entity’s own stock. A non-derivative instrument that is not indexed to an entity’s own stock cannot be classified as equity and must be accounted for as a liability. There is a two-step approach in determining whether an instrument or embedded feature is indexed to an entity’s own stock. First, the instrument’s contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument’s settlement provisions. The Company utilized the fair value standard set forth by the Financial Accounting Standards Board, defined as the amount at which the assets (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale. |
Earnings Per Share | Earnings per Share We calculate net loss per share in accordance with ASC Topic 260, Earnings per Share |
Stock Based Compensation | Stock Based Compensation We calculate stock compensation in accordance with ASC Topic 718, Compensation-Stock Based Compensation |
Reclassifications | Reclassifications Certain reclassifications of amounts previously reported have been made to the accompanying consolidated financial statements to maintain consistency between periods presented. The reclassifications had no impact on net income or stockholder’s equity. |
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. 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 lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset represents the lessee’s right to use, or control use of, a specified asset for the lease term. The amendments in this ASU leaves the accounting for the organization 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 Company has evaluated the effect of the standard on our financial statements. Based on our evaluation, we will have one material lease subject to adoption of this standard, effective January 1, 2019. As disclosed in Note 7, we entered into a new office space lease that will take effect on April 1, 2019 and would expect to record a right-of-use asset and corresponding liability for amounts that approximate our future commitments of $258,140. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 Manufacturing equipment and customer equipment: 3 years to 7 years Vehicles 5 years |
Property Plant and Equipment (T
Property Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Major Classes of Property and Equipment | Major classes of property and equipment at March 31, 2019 and December 31, 2018: 2019 2018 Furniture and fixtures $ 1,524 $ 1,524 Manufacturing Equipment and customer equipment 3,243,121 3,118,391 Leasehold Improvements 4,886 4,886 Vehicles 29,696 29,696 3,279,227 3,154,497 Less: accumulated depreciation (1,376,921 ) (1,190,846 ) 1,902,307 1,963,651 Equipment not yet placed in service 632,822 536,605 Property and equipment, net of depreciation $ 2,535,129 $ 2,500,254 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Estimated Future Amortization Expense Related to Intangible Property | Estimated future amortization expense related to patents as of March 31, 2019, is as follows: Total Amortization Years ending December 31, 2019 $ 47,708 2020 63,610 2021 63,610 2022 63,610 2023 63,610 Later years 116,430 $ 418,578 |
Convertible Notes (Related an_2
Convertible Notes (Related and Unrelated Party) (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Fair Value Assumptions Used | Expected life (in years) 3 Volatility (based on a comparable company) 54.82 % Risk Free interest rate 2.41 % Dividend yield (on common stock) - Expected life (in years) 3 Volatility (based on a comparable company) 55.49 % Risk Free interest rate 2.45 % Dividend yield (on common stock) - Expected life (in years) 3 Volatility (based on a comparable company) 59.00 % Risk Free interest rate 2.83 % Dividend yield (on common stock) - |
Schedule of Convertible Notes | The convertible notes consist of the following components as of December 31, 2018 and March 31, 2019: December 31, 2018 March 31, 2019 Convertible notes $ 2,704,800 $ 2,704,800 Less: Debt discount (warrant value) (325,747 ) (325,747 ) Less: Debt discount (derivative value)(Note 6) (638,988 ) (638,988 ) Less: Debt discount (issuance costs paid) (27,000 ) (27,000 ) Less: Note conversion/settlements (453,000 ) (803,634 ) Add: Debt discount amortization 481,042 642,635 $ 1,741,107 $ 1,552,066 The convertible notes consist of the following components as of December 31, 2018 and March 31, 2019: December 31, 2018 March 31, 2019 Convertible notes $ 1,363,200 $ 1,363,200 Less: Debt discount (warrant value) (212,763 ) (212,763 ) Less: Debt discount (derivative value)(Note 6) (697,186 ) (697,186 ) Less: Debt discount (issuance costs paid) (23,700 ) (23,700 ) Add: Debt discount amortization 38,665 154,658 $ 468,216 $ 584,209 |
Schedule of Future Maturities of Convertible Notes | Future maturity of convertible notes at face value before effect of all discount, are as follow: Total Convertible Notes Years ending December 31, 2019 $ - 2020 3,264,366 2021 - 2022 - 2023 - $ 3,264,366 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of the Derivative Liability | The fair value of the derivative liability for CN Convertible Note 1 of 2 and CN Note Warrant Acceleration was calculated using the Black-Scholes model using the following assumptions. 31-Dec-18 31-Mar-19 Expected life 1.20 0.96 Volatility (based on comparable company) 72.03 % 102.60 % Risk Fee interest rate 2.48 % 2.27 % Dividend yield (on common stock) - - The fair value of the derivative liability for CN Convertible Note 2 of 2 was calculated using the Black-Scholes model using the following assumptions. 31-Dec-18 31-Mar-19 Expected life 1.92 1.68 Volatility (based on comparable company) 63.70 % 85.61 % Risk Fee interest rate 2.48 % 2.27 % Dividend yield (on common stock) - - |
Schedule of Derivative Liability Measured at Fair Value on a Recurring Basis | Reconciliation of the derivative liability measured at fair value on a recurring basis with the use of significant unobservable inputs (level 3) from December 31, 2018 to March 31, 2019: December 31, 2018 $ 1,325,653 Loss from change in value 406,012 For the period ended December 31, 2018 $ 1,731,665 |
Schedule of Fair Value Hierarchy of Assets and Liabilities | The following table presents the Company’s fair value hierarchy for applicable assets and liabilities measured at fair value as of December 31, 2018 and March 31, 2019. Level 1 Level 2 Level 3 Total Derivative Liability December 31, 2018 $ - - 1,325,653 $ 1,325,653 Level 1 Level 2 Level 3 Total Derivative Liability March 31, 2019 $ - - 1,731,665 $ 1,731,665 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Estimate Future Maturities of Lease Liabilities | Twelve months ending April 1, 2020 $ 74,081 2021 $ 76,304 2022 $ 78,593 2023 $ 80,951 Total Lease payments $ 309,929 Less Interest $ (51,789 ) Present value of lease liabilities $ 258,140 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Summary of Fair Value of Options Using Black-Sholes Option Pricing Model | Expected life (in years) 5.5 to 8 Volatility (based on a comparable company) 63.83%-64.00 % Risk Free interest rate 2.47%-2.54 % 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 March 31, 2019: Number of Options Exercise price per share $ Average remaining term in years Aggregate intrinsic value at date of grant $ Outstanding January 1, 2019 7,428,014 .40 - .87 5.48 - Issued 105,000 .65 - .69 Cancelled (78,000 ) Outstanding March 31, 2019 7,455,014 .40 - .87 5.27 Exercisable, March 31 2019 3,586,396 .40 - .87 4.07 - |
Schedule of Changes in Stockholders' Equity | The following is Changes in Stockholders’ Equity as of March 31, 2018 and March 31, 2019: Additional Common Stock paid in Accumulated Shares Amount Capital (Deficit) Total Balance January 1, 2018 118,690,527 $ 119 $ 37,992,799 $ (33,830,997 ) $ 4,161,921 Cashless exercise of options 8,812 - - - - Issuance of stock for services 99,206 - 100,000 - 100,000 Equity based compensation - - 246,775 - 246,775 Discount on convertible notes (warrants) - - 220,548 - 220,548 Net (loss) for the year - - - (2,338,138 ) (2,338,138 ) Balance March 31, 2018 118,798,545 $ 119 $ 38,560,122 $ (36,169,135 ) $ 2,391,106 Additional Common Stock paid in Accumulated Shares Amount Capital (Deficit) Total Balance January 1, 2019 122,770,960 $ 123 $ 41,118,649 $ (41,153,820 ) $ (35,048 ) Exercise of warrants 3,141,454 3 1,884,869 1,884,872 Issuance of stock for services 173,446 - 181,040 - 181,040 Equity based compensation - - 136,941 - 136,941 Warrants issued to Management - - 758,754 - 758,754 Issuance of stock for capital raise 4,000,000 4 2,399,996 - 2,400,000 Warrant modification - - 307,460 - 307,460 Net (loss) for the year - - - (2,847,262 ) (2,847,262 ) Balance March 31, 2019 130,085,860 $ 130 $ 46,787,709 $ (44,001,032 ) $ 2,786,807 |
Outstanding Warrants (Tables)
Outstanding Warrants (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Outstanding Warrants | |
Summary of Outstanding Warrants | The following is a summary of all outstanding warrants as of March 31, 2019: 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 17,888,354 $ 0.53 - $1.00 1.70 $ - Warrants issued in connection with private placement of notes 1,335,000 $ 1.00 1.76 $ - Warrants issued in connection with convertible note 2,4680,259 $ 0.70 2.16 $ - Warrants issued in connection with settlement of deferred compensation 1,595,611 $ 0.70 5.00 $ - |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Cash federally insured limit value | $ 250,000 | $ 250,000 | |
Cash on deposit exceeds | 250,000 | ||
Allowance for doubtful accounts receivable | 61,788 | $ 61,788 | |
Inventory reserve | $ 31,237 | $ 31,237 | |
Intangible assets useful life | 20 years | ||
Research and development expenses | $ 156,199 | 190,341 | |
Shipping and handling costs | $ 98,339 | $ 138,248 | |
Percentage of tax benefits likelihood being realized upon ultimate settlement | greater than 50% | ||
April 1, 2019 [Member] | |||
Right-of-use asset and liability for future commitments | $ 258,140 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Estimated Useful Lives of Assets (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Manufacturing Equipment and Customer Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Manufacturing Equipment and Customer Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Vehicles [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 | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 186,074 | $ 96,564 |
Depreciation expense in Cost of Goods Sold | $ 12,106 | $ 11,584 |
Property Plant and Equipment -
Property Plant and Equipment - Schedule of Major Classes of Property and Equipment (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,279,227 | $ 3,154,497 |
Less: accumulated depreciation | (1,376,921) | (1,190,846) |
Property and equipment | 1,902,307 | 1,963,651 |
Equipment not yet placed in service | 632,822 | 536,605 |
Property and equipment, net of depreciation | 2,535,129 | 2,500,254 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,524 | 1,524 |
Manufacturing Equipment and Customer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,243,121 | 3,118,391 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,886 | 4,886 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 29,696 | $ 29,696 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Patent costs | $ 764,891 | $ 764,891 | |
Trademarks costs | 103,309 | 103,309 | |
Accumulated amortization on patents and trademarks | $ 346,313 | $ 330,411 | |
Expiration date of patents | 2025-12 | ||
Amortization of intangible assets | $ 15,902 | $ 15,902 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Estimated Future Amortization Expense Related to Intangible Property (Details) | Mar. 31, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2019 | $ 47,708 |
2020 | 63,610 |
2021 | 63,610 |
2022 | 63,610 |
2023 | 63,610 |
Later years | 116,430 |
Intangible asset, net of amortization | $ 418,578 |
Convertible Notes (Related an_3
Convertible Notes (Related and Unrelated Party) (Details Narrative) | Mar. 14, 2018USD ($)shares | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($)Segment$ / sharesshares | Apr. 30, 2018USD ($)Segment$ / sharesshares | Mar. 31, 2018USD ($)Segment$ / sharesshares | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($)$ / sharesshares |
Debt maturity date | Mar. 31, 2020 | ||||||
Fair value aggregate amount | $ 307,460 | ||||||
Debt instrument conversion amount | 1,900,000 | ||||||
Three Investors [Member] | |||||||
Debt instrument conversion amount | $ 453,000 | ||||||
Accrued interest | $ 30,459 | ||||||
Debt instrument conversion shares | shares | 804,396 | ||||||
Investors [Member] | |||||||
Debt instrument conversion amount | $ 350,634 | ||||||
Accrued interest | 33,929 | 33,929 | |||||
March 2018 Convertible Note [Member] | |||||||
Convertible notes | $ 177,300 | ||||||
Notes purchased by significant shareholder | $ 30,000 | ||||||
Debt interest rate | 10.00% | ||||||
Debt maturity date | Mar. 14, 2020 | ||||||
Debt conversion price | $ / shares | $ 0.88 | ||||||
Closing price of the common stock, percentage | 85.00% | ||||||
Consecutive trading days | Segment | 20 | ||||||
Debt conversion, description | The notes are convertible at any time prior to the due date into our common stock at conversion price of $0.88 per share or 85% of the average closing price of the common stock over the twenty consecutive trading days immediately preceding the date of note holders' election; but in no events lower than $0.60 per share. | ||||||
March 2018 Convertible Note One [Member] | |||||||
Closing price of the common stock, percentage | 85.00% | ||||||
Consecutive trading days | Segment | 20 | ||||||
Debt conversion, description | In addition, the interest is convertible at any time prior to the due dates into our common stock at conversion price of 85% of the average closing price of the common stock over the twenty consecutive trading days immediately preceding the date of note holders' election; but in no events lower than $0.60 per share. | ||||||
Warrant [Member] | |||||||
Warrant issued | shares | 678,864 | 937,373 | 1,331,583 | 1,331,583 | |||
Fair value of warrant per share | $ / shares | $ 0.31 | $ 0.25 | $ 0.17 | $ 0.17 | |||
Fair value aggregate amount | $ 212,763 | $ 235,519 | $ 220,548 | ||||
Debt discount | $ 212,763 | $ 105,199 | 220,548 | $ 220,548 | |||
Series CN Note 1 of 2 [Member] | |||||||
Convertible notes | 2,527,500 | 2,527,500 | |||||
Notes purchased by significant shareholder | $ 840,000 | $ 840,000 | |||||
Debt interest rate | 10.00% | 10.00% | |||||
Debt maturity date | Mar. 14, 2020 | ||||||
Debt conversion price | $ / shares | $ 0.88 | $ 0.88 | |||||
Closing price of the common stock, percentage | 85.00% | ||||||
Consecutive trading days | Segment | 20 | ||||||
Debt conversion, description | The notes are convertible at any time prior to the due date into our common stock at conversion price of $0.88 per share or 85% of the average closing price of the common stock over the twenty consecutive trading days immediately preceding the date of note holders' election; but in no event lower than $0.60 per share. | ||||||
Convertible Notes [Member] | |||||||
Closing price of the common stock, percentage | 85.00% | 85.00% | |||||
Consecutive trading days | Segment | 20 | 20 | |||||
Debt conversion, description | In addition, the interest is convertible at any time prior to the due dates into our common stock at conversion price of 85% of the average closing price of the common stock over the twenty consecutive trading days immediately preceding the date of note holders' election; but in no event lower than $0.60 per share. | In addition, the interest is convertible at any time prior to the due dates into our common stock at conversion price of 85% of the average closing price of the common stock over the twenty consecutive trading days immediately preceding the date of note holders' election; but in no event lower than $0.60 per share. | |||||
Series CN Notes investors [Member] | Minimum [Member] | |||||||
Debt instrument effective rate | 10.00% | ||||||
Series CN Notes investors [Member] | Maximum [Member] | |||||||
Debt instrument effective rate | 20.00% | ||||||
Series CN Notes investors [Member] | Warrants [Member] | |||||||
Debt instrument effective rate | 25.00% | ||||||
Series CN Note 2 of 2 [Member] | |||||||
Convertible notes | $ 1,363,200 | ||||||
Notes purchased by significant shareholder | $ 560,000 | ||||||
Debt interest rate | 10.00% | ||||||
Debt maturity date | Nov. 30, 2020 | ||||||
Debt conversion price | $ / shares | $ 0.88 | ||||||
Closing price of the common stock, percentage | 85.00% | ||||||
Consecutive trading days | Segment | 20 | ||||||
Debt conversion, description | The notes are convertible at any time prior to the due date into our common stock at conversion price of $0.88 per share or 85% of the average closing price of the common stock over the twenty consecutive trading days immediately preceding the date of note holders' election; but in no event lower than $0.60 per share. | ||||||
Series CN Note [Member] | |||||||
Notes purchased by significant shareholder | 2,136,276 | 2,136,276 | |||||
Related Party Convertible Notes [Member] | |||||||
Notes purchased by significant shareholder | 925,749 | 925,749 | |||||
Unrelated Party Convertible Notes [Member] | |||||||
Notes purchased by significant shareholder | $ 1,210,527 | $ 1,210,527 |
Convertible Notes - Schedule of
Convertible Notes - Schedule of Fair Value Assumptions Used (Details) - Warrant [Member] | 1 Months Ended | ||
Dec. 31, 2018 | Apr. 30, 2018 | Mar. 31, 2018 | |
Expected Life [Member] | |||
Fair value assumptions, measurement input, term | 3 years | 3 years | 3 years |
Volatility [Member] | |||
Fair value assumptions, measurement input, percentage | 59.00% | 55.49% | 54.82% |
Risk Free Interest Rate [Member] | |||
Fair value assumptions, measurement input, percentage | 2.83% | 2.45% | 2.41% |
Dividend Yield [Member] | |||
Fair value assumptions, measurement input, percentage | 0.00% | 0.00% | 0.00% |
Convertible Notes - Schedule _2
Convertible Notes - Schedule of Convertible Notes (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Convertible notes | $ 866,310 | |
Convertible Note One[Member] | ||
Convertible notes | 2,704,800 | 2,704,800 |
Less: Debt discount (warrant value) | (325,747) | (325,747) |
Less: Debt discount (derivative value) (Note 7) | (638,988) | (638,988) |
Less: Debt discount (issuance costs paid) | (27,000) | (27,000) |
Less: Note conversion/ settlements | (803,634) | (453,000) |
Add: Debt discount amortization | 642,635 | 481,042 |
Total convertible notes | 1,552,066 | 1,741,107 |
Convertible Note Two [Member] | ||
Convertible notes | 1,363,200 | 1,363,200 |
Less: Debt discount (warrant value) | (212,763) | (212,763) |
Less: Debt discount (derivative value) (Note 7) | (697,186) | (697,186) |
Less: Debt discount (issuance costs paid) | (23,700) | (23,700) |
Add: Debt discount amortization | 154,658 | 38,665 |
Total convertible notes | $ 584,209 | $ 468,216 |
Convertible Notes - Schedule _3
Convertible Notes - Schedule of Future Maturities of Convertible Notes (Details) | Mar. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
Years ending December 31, 2019 | |
Years ending December 31, 2020 | 3,264,366 |
Years ending December 31, 2021 | |
Years ending December 31, 2022 | |
Years ending December 31, 2023 | |
Future maturity of convertible notes, total | $ 3,264,366 |
Derivative Liabilities (Details
Derivative Liabilities (Details Narrative) - USD ($) | 3 Months Ended | |||||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Nov. 30, 2018 | Apr. 11, 2018 | Mar. 14, 2018 | |
Current derivative liabilities | $ 973,021 | |||||
Revalued derivative liability | 1,731,665 | |||||
Loss on derivative liabilities | $ 406,012 | $ 444,736 | ||||
Series CN Convertible Notes 1 of 2 [Member] | ||||||
Current derivative liabilities | $ 569,588 | |||||
Series CN Notes Warrant Acceleration [Member] | ||||||
Current derivative liabilities | $ 69,400 | |||||
Series CN Convertible Note 2 of 2 [Member] | ||||||
Current derivative liabilities | $ 697,186 |
Derivative Liabilities - Schedu
Derivative Liabilities - Schedule of Fair Value of the Derivative Liability (Details) - Derivative Liabilities [Member] | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Series CN Convertible Note 1 of 2 and Series CN Note Warrant Acceleration [Member] | Expected Life [Member] | ||
Fair value assumptions, measurement input, term | 11 months 15 days | 1 year 2 months 12 days |
Series CN Convertible Note 1 of 2 and Series CN Note Warrant Acceleration [Member] | Volatility [Member] | ||
Fair value assumptions, measurement input, percentage | 102.60% | 72.03% |
Series CN Convertible Note 1 of 2 and Series CN Note Warrant Acceleration [Member] | Risk Free Interest Rate [Member] | ||
Fair value assumptions, measurement input, percentage | 2.27% | 2.48% |
Series CN Convertible Note 1 of 2 and Series CN Note Warrant Acceleration [Member] | Dividend Yield [Member] | ||
Fair value assumptions, measurement input, percentage | 0.00% | 0.00% |
Series CN Convertible Note 2 of 2 [Member] | Expected Life [Member] | ||
Fair value assumptions, measurement input, term | 1 year 8 months 5 days | 1 year 11 months 1 day |
Series CN Convertible Note 2 of 2 [Member] | Volatility [Member] | ||
Fair value assumptions, measurement input, percentage | 85.61% | 63.70% |
Series CN Convertible Note 2 of 2 [Member] | Risk Free Interest Rate [Member] | ||
Fair value assumptions, measurement input, percentage | 2.27% | 2.48% |
Series CN Convertible Note 2 of 2 [Member] | Dividend Yield [Member] | ||
Fair value assumptions, measurement input, percentage | 0.00% | 0.00% |
Derivative Liabilities - Sche_2
Derivative Liabilities - Schedule of Derivative Liability Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Inputs, Level 3 [Member] | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Derivative liabilities, beginning balance | $ 1,325,653 |
Loss from change in value | 406,012 |
Derivative liabilities, ending balance | $ 1,731,665 |
Derivative Liabilities - Sche_3
Derivative Liabilities - Schedule of Fair Value Hierarchy of Assets and Liabilities (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Derivative Liability | $ 1,731,665 | $ 1,325,653 |
Fair Value, Inputs, Level 1 [Member] | ||
Derivative Liability | ||
Fair Value, Inputs, Level 2 [Member] | ||
Derivative Liability | ||
Fair Value, Inputs, Level 3 [Member] | ||
Derivative Liability | $ 1,731,665 | $ 1,325,653 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating lease expire date | Mar. 31, 2019 | |
Lease cost | $ 53,906 | $ 37,201 |
Right use of asset | $ 0 | |
April 1, 2019 [Member] | ||
Lease discount rate | 10.00% | |
April 1, 2019 [Member] | Lease First Year [Member] | ||
Lease expense | $ 6,173 | |
April 1, 2019 [Member] | Lease Year Two [Member] | ||
Lease expense | 6,359 | |
April 1, 2019 [Member] | Lease Year Three [Member] | ||
Lease expense | 6,549 | |
April 1, 2019 [Member] | Lease Year Four [Member] | ||
Lease expense | $ 6,746 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Estimate Future Maturities of Lease Liabilities (Details) | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 74,081 |
2021 | 76,304 |
2022 | 78,593 |
2023 | 80,951 |
Total Lease payments | 309,929 |
Less Interest | (51,789) |
Present value of lease liabilities | $ 258,140 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Class of Stock [Line Items] | ||
Numbe of common stock issued for services | 134,984 | |
Numbe of common stock issued for services, value | $ 181,040 | $ 100,000 |
Common stock shares issued, shares | 4,000,000 | |
Fair value of stock options | $ 39,447 | |
Cancellation of options | 78,000 | |
Shares price per share | $ 0.60 | |
Proceeds from issuance | $ 2,400,000 | |
Deferred Executive compensation | 771,113 | |
Payment of cash | 243,623 | |
Equity-based compensation included additional paid in capital | $ 136,941 | 246,775 |
Convertible Note [Member] | ||
Class of Stock [Line Items] | ||
Proceeds from issuance | $ 2,503,200 | |
Date of Grant [Member] | ||
Class of Stock [Line Items] | ||
Common stock trading price, per share | $ 0.66 | |
Date of Grant One [Member] | ||
Class of Stock [Line Items] | ||
Common stock trading price, per share | $ 0.72 | |
Common Stock [Member] | ||
Class of Stock [Line Items] | ||
Numbe of common stock issued for services | 173,446 | 99,206 |
Numbe of common stock issued for services, value | ||
Common stock shares issued, shares | 4,000,000 | |
Common stock shares issued, value | $ 2,400,000 | |
Executives Warrants [Member] | ||
Class of Stock [Line Items] | ||
Remaining balance of warrants | 487,246 | |
Warrant term | 5 years | |
Warrant exercise price | $ 0.70 | |
Board of Directors [Member] | ||
Class of Stock [Line Items] | ||
Common stock shares issued, shares | 38,462 | |
Common stock shares issued, value | $ 25,000 | |
Option issued to purchase common stock | 161,133 | |
Payments of director fee | $ 75,000 | |
Exercise price of options ranged | $ 0.65 | |
Stock option exercisable term | 8 years | |
Board of Directors [Member] | Minimum [Member] | ||
Class of Stock [Line Items] | ||
Exercise price of options ranged | $ 0.65 | |
Board of Directors [Member] | Maximum [Member] | ||
Class of Stock [Line Items] | ||
Exercise price of options ranged | $ 0.69 | |
Employees [Member] | ||
Class of Stock [Line Items] | ||
Option issued to purchase common stock | 105,000 | |
Stock option exercisable term | 8 years | |
Stock option vesting period | 3 years | |
Holders [Member] | Convertible Note [Member] | ||
Class of Stock [Line Items] | ||
Common stock shares issued, shares | 2,841,454 | |
Number of cashless basis of common stock issued | $ 384,563 | |
Holders [Member] | I Warrants [Member] | ||
Class of Stock [Line Items] | ||
Number of warrants exercised | 2,841,454 | |
Number of cashless basis of common stock issued | $ 1,320,310 | |
Holders [Member] | G Warrants [Member] | ||
Class of Stock [Line Items] | ||
Common stock shares issued, shares | 300,000 | |
Number of warrants exercised | 300,000 | |
Number of cashless basis of common stock issued | $ 180,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Fair Value of Options Using Black-Sholes Option Pricing Model (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Volatility (based on a comparable company), minimum | 63.83% |
Volatility (based on a comparable company), maximum | 64.00% |
Risk Free interest rate. minimum | 2.47% |
Risk Free interest rate, maximum | 2.54% |
Dividend yield (on common stock) | 0.00% |
Minimum [Member] | |
Expected life (in years) | 5 years 6 months |
Maximum [Member] | |
Expected life (in years) | 8 years |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Outstanding Stock Options Issued to Employees and Directors (Details) | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Number of Options, Cancelled | shares | (78,000) |
Employees and Directors [Member] | |
Number of Options, Outstanding, Beginning | shares | 7,428,014 |
Number of Options, Issued | shares | 105,000 |
Number of Options, Cancelled | shares | (78,000) |
Number of Options, Outstanding, Ending | shares | 7,455,014 |
Number of Options, Exercisable | shares | 3,586,396 |
Average remaining term in years, Outstanding, Beginning | 5 years 5 months 23 days |
Average remaining term in years, Outstanding, Ending | 5 years 3 months 8 days |
Average remaining term in years, Exercisable | 4 years 26 days |
Aggregate intrinsic value at date of grant, Outstanding, Beginning | $ | |
Aggregate intrinsic value at date of grant, Exercisable | $ | |
Employees and Directors [Member] | Minimum [Member] | |
Exercise price per share, Outstanding, Beginning | $ 0.40 |
Exercise price per share, Issued | 0.65 |
Exercise price per share, Outstanding, Ending | 0.40 |
Exercise price per share, Exercisable | 0.40 |
Employees and Directors [Member] | Maximum [Member] | |
Exercise price per share, Outstanding, Beginning | 0.87 |
Exercise price per share, Issued | 0.69 |
Exercise price per share, Outstanding, Ending | 0.87 |
Exercise price per share, Exercisable | $ 0.87 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Changes in Stockholders' Equity (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Balance | $ (35,048) | $ 4,161,921 |
Cashless exercise of options | ||
Issuance of stock for services | $ 181,040 | 100,000 |
Issuance of stock for services, shares | 134,984 | |
Equity based compensation | $ 136,941 | 246,775 |
Discount on convertible notes (warrants) | 220,548 | |
Exercise of warrants | 1,884,872 | |
Warrants issued to Management | 758,754 | |
Issuance of stock for capital raise | 2,400,000 | |
Warrant modification | 307,460 | |
Net loss | (2,847,262) | (2,338,138) |
Balance | 2,786,807 | 2,391,106 |
Common Stock [Member] | ||
Balance | $ 123 | $ 119 |
Balance, shares | 122,770,960 | 118,690,527 |
Cashless exercise of options | ||
Cashless exercise of options, shares | 8,812 | |
Issuance of stock for services | ||
Issuance of stock for services, shares | 173,446 | 99,206 |
Equity based compensation | ||
Discount on convertible notes (warrants) | ||
Exercise of warrants | $ 3 | |
Exercise of warrants, shares | 3,141,454 | |
Warrants issued to Management | ||
Issuance of stock for capital raise | $ 4 | |
Issuance of stock for capital raise, shares | 4,000,000 | |
Warrant modification | ||
Net loss | ||
Balance | $ 130 | $ 119 |
Balance, shares | 130,085,860 | 118,798,545 |
Additional Paid in Capital [Member] | ||
Balance | $ 41,118,649 | $ 37,992,799 |
Cashless exercise of options | ||
Issuance of stock for services | 181,040 | 100,000 |
Equity based compensation | 136,941 | 246,775 |
Discount on convertible notes (warrants) | 220,548 | |
Exercise of warrants | 1,884,869 | |
Warrants issued to Management | 758,754 | |
Issuance of stock for capital raise | 2,399,996 | |
Warrant modification | 307,460 | |
Net loss | ||
Balance | 46,787,709 | 38,560,122 |
Accumulated (Deficit) [Member] | ||
Balance | (41,153,820) | (33,830,997) |
Cashless exercise of options | ||
Issuance of stock for services | ||
Equity based compensation | ||
Discount on convertible notes (warrants) | ||
Exercise of warrants | ||
Warrants issued to Management | ||
Issuance of stock for capital raise | ||
Warrant modification | ||
Net loss | (2,847,262) | (2,338,138) |
Balance | $ (44,001,032) | $ (36,169,135) |
Outstanding Warrants - Summary
Outstanding Warrants - Summary of Outstanding Warrants (Details) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Convertible Note [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Warrants | shares | 24,680,259 |
Price per share | $ 0.70 |
Remaining term in years | 2 years 1 month 27 days |
Intrinsic value at date of grant | $ | |
Settlement of Deferred Compensation [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Warrants | shares | 1,595,611 |
Price per share | $ 0.70 |
Remaining term in years | 5 years |
Intrinsic value at date of grant | $ | |
Private Placements of Common Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Warrants | shares | 17,888,354 |
Remaining term in years | 1 year 8 months 12 days |
Intrinsic value at date of grant | $ | |
Private Placements of Common Stock [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Price per share | $ 0.53 |
Private Placements of Common Stock [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Price per share | $ 1 |
Private Placement of Notes [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Warrants | shares | 1,335,000 |
Price per share | $ 1 |
Remaining term in years | 1 year 9 months 3 days |
Intrinsic value at date of grant | $ |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Income Tax Disclosure [Abstract] | |
Estimated effective tax rate | $ 0 |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash for operations | $ 1,873,982 | $ 1,491,691 | ||
Purchased equipment | 160,590 | 172,231 | ||
Issuance of common stock | 2,400,000 | |||
Cash exercise of warrant | 1,500,310 | |||
Issuance of short term notes | 250,000 | |||
Cash | 2,907,307 | 2,391,901 | $ 1,041,569 | $ 1,304,916 |
Reducing general and administrative expenses | $ 1,700,000 | |||
Reducing general and administrative expenses, description | We have continued to significantly reduce core operating expenses, reducing total General and Administrative Expense in 2018 by $1.7 million, or 18%, as compared with 2017. | |||
Stock issued price per shares | $ 0.60 | |||
Proceeds from capital investment | $ 2,400,000 | |||
Number of shares issue | 4,000,000 | |||
Deferred Executive compensation | $ 771,113 | |||
Payment of cash | 243,623 | |||
Cash payments to settled portion of deferred compensation | 243,623 | |||
Yield cash saving amount | 200,000 | |||
Convertible short term debt amount | $ 1,900,000 | |||
Debt due date | Mar. 31, 2020 | |||
I Warrants [Member] | Maximum [Member] | ||||
Warrant exercise price | $ 1 | |||
I Warrants [Member] | Minimum [Member] | ||||
Warrant exercise price | $ 0.60 | |||
I Warrant Holders [Member] | ||||
Proceeds from capital investment | $ 1,700,000 | |||
Warrant exercise price | $ 0.60 | |||
Number of warrant converted | 2,841,454 | |||
G Series Warrants [Member] | ||||
Proceeds from capital investment | $ 180,000 | |||
Executives Warrants [Member] | ||||
Warrant exercise price | $ 0.70 | |||
Remaining balance of warrants | 487,246 | |||
Warrant term | 5 years | |||
Private Placement Offering [Member] | ||||
Completed funding efforts amount | $ 4,300,000 | |||
Stock issued price per shares | $ 0.60 | |||
Convertible Note [Member] | ||||
Issuance of common stock | 2,503,200 | |||
Trademarks [Member] | ||||
Purchased equipment | $ 2,293 |