Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 17, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | SPORTS FIELD HOLDINGS, INC. | |
Entity Central Index Key | 0001539551 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity's Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 23,738,421 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash | $ 95,131 | $ 247 |
Restricted Cash | 65,611 | 81,686 |
Accounts Receivable, Net | 427,127 | 244,801 |
Contract Assets | 1,154,807 | 363,396 |
Prepaid Expenses and Other Current Assets | 50,224 | 79,965 |
Total Current Assets | 1,792,900 | 770,095 |
Property, Plant and Equipment, net | 4,509 | 19,567 |
Deposits | 2,090 | 2,090 |
TOTAL ASSETS | 1,799,499 | 791,752 |
Current Liabilities | ||
Accounts Payable | 3,988,801 | 4,495,829 |
Accrued Interest | 378,249 | 141,330 |
Accrued Expenses | 1,317,969 | 614,166 |
Contract Liabilities | 2,720,409 | 2,212,258 |
Current Portion of Promissory Notes | 1,407,932 | 592,846 |
Derivative Liability | 131,664 | 131,100 |
Convertible Notes, Net | 605,575 | 339,358 |
Total Current Liabilities | 10,550,599 | 8,526,887 |
Promissory Notes, Net of Current Portion | 115,157 | 930,592 |
Convertible Notes, Net of Current Portion | 134,000 | |
Total Liabilities | 10,799,756 | 9,457,479 |
Commitment and Contingencies | ||
Stockholders' Deficit | ||
Preferred Stock, $ 0.00001 par value; 20,000,000 shares authorized; none issued and outstanding | ||
Common Stock, $0.00001 par value; 250,000,000 shares authorized; 23,581,534 and 19,180,063 issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 237 | 192 |
Additional Paid-in Capital | 11,868,607 | 10,900,611 |
Accumulated Deficit | (20,869,101) | (19,566,530) |
Total Stockholders' Deficit | (9,000,101) | (8,665,727) |
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT | $ 1,799,499 | $ 791,752 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 23,581,534 | 19,180,063 |
Common stock, shares outstanding | 23,581,534 | 19,180,063 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Contract revenue | $ 264,840 | $ 3,077,289 | $ 3,767,849 | $ 5,201,964 |
Contract cost of sales | 226,061 | 3,098,858 | 3,144,303 | 4,831,958 |
Gross Profit | 38,779 | (21,569) | 623,546 | 370,006 |
Operating expenses | ||||
Selling, general and administrative | 402,672 | 844,237 | 1,336,720 | 2,099,183 |
Research and development | 990 | 1,179 | ||
Depreciation | 5,596 | 1,014 | 15,058 | 2,704 |
Total operating expenses | 408,268 | 846,241 | 1,351,778 | 2,103,066 |
Loss from operations | (368,489) | (867,810) | (728,232) | (1,773,060) |
Other income (expense) | ||||
Interest | (107,999) | (54,271) | (270,073) | (213,794) |
Gain (loss) from change in value of derivative | 8,984 | (186,300) | (564) | (210,700) |
Amortization of debt discount | (87,873) | (131,206) | ||
Miscellaneous income (expense) | (240,491) | 996 | (171,496) | 6,366 |
Total other income (expense) | (427,491) | (239,575) | (574,339) | (418,128) |
Loss before income taxes | (796,980) | (1,107,385) | (1,302,571) | (2,151,188) |
Provision for income taxes | ||||
Net loss | $ (796,980) | $ (1,107,385) | $ (1,302,571) | $ (2,151,188) |
Net loss per common share, basic and diluted | $ (0.03) | $ (0.06) | $ (0.06) | $ (0.12) |
Weighted average common shares, basic and diluted | 23,561,947 | 18,292,242 | 22,691,971 | 18,655,127 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Common Stock Subscription [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Dec. 31, 2017 | $ 174 | $ 10,593,735 | $ (4,500) | $ (15,823,096) | $ (5,233,687) | |
Beginning balance, shares at Dec. 31, 2017 | 17,403,527 | |||||
Shares issued for services | $ 1 | 15,086 | 15,087 | |||
Shares issued for services, shares | 52,932 | |||||
Stock compensation | 483 | 483 | ||||
Stock compensation, shares | ||||||
Net loss | (571,850) | (571,850) | ||||
Ending balance at Mar. 31, 2018 | $ 175 | 10,609,304 | (4,500) | (16,394,946) | (5,789,967) | |
Ending balance, shares at Mar. 31, 2018 | 17,456,459 | |||||
Beginning balance at Dec. 31, 2017 | $ 174 | 10,593,735 | (4,500) | (15,823,096) | (5,233,687) | |
Beginning balance, shares at Dec. 31, 2017 | 17,403,527 | |||||
Net loss | (2,151,188) | |||||
Ending balance at Sep. 30, 2018 | $ 191 | 10,878,968 | (4,500) | (17,974,284) | (7,099,625) | |
Ending balance, shares at Sep. 30, 2018 | 1,914,274 | |||||
Beginning balance at Mar. 31, 2018 | $ 175 | 10,609,304 | (4,500) | (16,394,946) | (5,789,967) | |
Beginning balance, shares at Mar. 31, 2018 | 17,456,459 | |||||
Shares issued for services | 11,812 | 11,812 | ||||
Shares issued for services, shares | 35,010 | |||||
Stock compensation | 500 | 500 | ||||
Shares issued in a private offering- net proceeds | $ 15 | 223,985 | 224,000 | |||
Shares issued in a private offering- net proceeds, shares | 1,493,332 | |||||
Net loss | (471,953) | (471,953) | ||||
Ending balance at Jun. 30, 2018 | $ 190 | 10,845,601 | (4,500) | (16,394,946) | (5,553,655) | |
Ending balance, shares at Jun. 30, 2018 | 18,984,801 | |||||
Shares issued for services | 10,274 | 10,274 | ||||
Shares issued for services, shares | 46,442 | |||||
Stock compensation | 4,462 | 4,462 | ||||
Stock compensation, shares | 11,500 | |||||
Shares issued in a private offering- net proceeds | $ 1 | 14,999 | 15,000 | |||
Shares issued in a private offering- net proceeds, shares | 100,000 | |||||
Net loss | (1,107,385) | |||||
Ending balance at Sep. 30, 2018 | $ 191 | 10,878,968 | (4,500) | (17,974,284) | (7,099,625) | |
Ending balance, shares at Sep. 30, 2018 | 1,914,274 | |||||
Beginning balance at Dec. 31, 2018 | $ 192 | 10,900,611 | (19,566,530) | (8,665,727) | ||
Beginning balance, shares at Dec. 31, 2018 | 19,180,063 | |||||
Shares issued for services | 2,123 | 2,123 | ||||
Shares issued for services, shares | 21,229 | |||||
Shares issued in a private offering- net proceeds | $ 41 | 404,960 | 405,001 | |||
Shares issued in a private offering- net proceeds, shares | 4,050,000 | |||||
Stock-based compensation | 8,618 | 8,618 | ||||
Net loss | (90,026) | (90,026) | ||||
Ending balance at Mar. 31, 2019 | $ 233 | 11,316,312 | (19,656,556) | (8,340,011) | ||
Ending balance, shares at Mar. 31, 2019 | 23,251,292 | |||||
Beginning balance at Dec. 31, 2018 | $ 192 | 10,900,611 | (19,566,530) | (8,665,727) | ||
Beginning balance, shares at Dec. 31, 2018 | 19,180,063 | |||||
Net loss | (1,302,571) | |||||
Ending balance at Sep. 30, 2019 | $ 237 | 11,868,607 | (20,869,101) | (9,000,101) | ||
Ending balance, shares at Sep. 30, 2019 | 23,581,534 | |||||
Beginning balance at Mar. 31, 2019 | $ 233 | 11,316,312 | (19,656,556) | (8,340,011) | ||
Beginning balance, shares at Mar. 31, 2019 | 23,251,292 | |||||
Stock compensation | $ 2 | 58,536 | 58,538 | |||
Stock compensation, shares | 177,147 | |||||
Shares issued in a private offering- net proceeds | $ 1 | 5,000 | 5,001 | |||
Shares issued in a private offering- net proceeds, shares | 50,000 | |||||
Intrinsic value of beneficial conversion feature | 165,000 | 165,000 | ||||
Stock-based compensation | 2,482 | 2,482 | ||||
Net loss | (415,565) | (415,565) | ||||
Ending balance at Jun. 30, 2019 | $ 236 | 11,547,330 | (20,072,121) | (8,524,555) | ||
Ending balance, shares at Jun. 30, 2019 | 23,478,439 | |||||
Shares issued for services | $ 1 | 23,510 | 23,511 | |||
Shares issued for services, shares | 95,175 | |||||
Shares issued in a private offering- net proceeds | 1,267 | 1,267 | ||||
Shares issued in a private offering- net proceeds, shares | 7,920 | |||||
Intrinsic value of beneficial conversion feature | 296,500 | 296,500 | ||||
Net loss | (796,980) | (796,980) | ||||
Ending balance at Sep. 30, 2019 | $ 237 | $ 11,868,607 | $ (20,869,101) | $ (9,000,101) | ||
Ending balance, shares at Sep. 30, 2019 | 23,581,534 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (1,302,571) | $ (2,151,188) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 15,058 | 2,704 |
Amortization of debt discount | 131,206 | |
Share based compensation | 95,272 | 46,251 |
Note issued for insurance premiums | 51,733 | |
Loss (gain) on derivative | 564 | 210,700 |
Changes in Operating Assets and Liabilities: | ||
Accounts receivable | (182,327) | (740,652) |
Other receivables | (36,015) | |
Prepaid expense and other current assets | 29,741 | (66,631) |
Accounts payable and accrued expenses | 567,705 | 1,641,433 |
Contract assets | (791,411) | (298,759) |
Contract liabilities | 508,151 | 808,257 |
Net cash used in operating activities | (876,878) | (576,979) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Repayment of promissory notes | (78,455) | (210,302) |
Proceeds of promissory notes | 26,373 | 300,000 |
Proceeds of convertible notes | 596,500 | |
Proceeds from private placement | 411,269 | 239,000 |
Net cash provided by financing activities | 955,687 | 328,698 |
Increase (decrease) in cash and restricted cash | 78,809 | (248,281) |
Cash and restricted cash, beginning of period | 81,933 | 281,662 |
Cash and restricted cash, end of period | 160,742 | 33,381 |
Cash paid during the period for: | ||
Interest | 14,385 | 126,777 |
Taxes | ||
Non-cash Investing and financing activities: | ||
Notes issued for insurance premiums | 101,074 | 78,349 |
Recording of beneficial conversion feature | 461,500 | |
Payables converted to promissory note | 134,000 | |
Original issuance discount from convertible notes | 60,000 | |
Debt discounts on convertible notes payable | $ 525,000 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | NOTE 1 – DESCRIPTION OF BUSINESS Sports Field Holdings, Inc. (“the Company”, “Sports Field Holdings”, “we”, “our”, or “us”) is a Nevada corporation engaged in product development, engineering, manufacturing, and the construction, design and building of athletic facilities, as well as supplying its own proprietary high end synthetic turf products to the sports industry. The Company is headquartered at 1020 Cedar Ave, Suite 200, St. Charles, IL 60174. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and disclosures required by GAAP for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the condensed financial position of the Company as of September 30, 2019, and the results of operations for the nine months ended September 30, 2019. The results of operations for the nine ended September 30, 2019 are not necessarily indicative of the operating results for the full year ending December 31, 2019 or any other period. The condensed consolidated balance sheet as of December 31, 2018, has been derived from audited financial statements but does not include all information required by GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related disclosures of the Company as of December 31, 2018 and for the year then ended, which were filed with the Securities and Exchange Commission (“SEC”) on Form 10-K on April 16, 2019. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Sports Field Holdings, Inc. and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. The Company’s significant estimates and assumptions include the accounts receivable allowance for doubtful accounts, warranty reserve, percentage of completion revenue recognition method, assumptions used in the fair value of stock-based compensation, valuation of derivative liabilities and the valuation allowance relating to the Company’s deferred tax assets. Revenues and Cost Recognition Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue. The Company generates revenue from fixed-price contracts, where revenue is recognized over time as work is completed because of the continuous transfer of control to the customer (typically using an input measure such as costs incurred to date relative to total estimated costs at completion to measure progress). Costs to obtain contracts are generally not significant and are expensed in the period incurred. The Company has determined that these construction projects provide a distinct service and therefore qualify as one performance obligation. Revenue from fixed-price contracts provide for a fixed amount of revenue for the entire project, and any changes to the scope of the project is addressed in a change order, which is treated as a modification of the original contract. To determine the proper revenue recognition method for contracts, the Company evaluates whether two or more contracts should be combined and accounted for as one single performance obligation and whether a single contract should be accounted for as more than one performance obligation. ASU 2014-09 defines a performance obligation as a contractual promise to transfer a distinct good or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s evaluation requires judgment and the decision to combine a group of contracts or separate a contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. To date, all of the Company’s contracts have a single performance obligation, as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contract and, therefore, is not distinct. However, if in the future the Company has contracts with multiple performance obligations, then the Company will allocate the contract’s transaction price to each performance obligation using the observable standalone selling price, if available, or alternatively the Company’s best estimate of the standalone selling price of each distinct performance obligation in the contract. Accounting for contracts involves the use of various techniques to estimate total transaction price and costs. For such contracts, transaction price, estimated cost at completion and total costs incurred to date are used to calculate revenue earned. Unforeseen events and circumstances can alter the estimate of the costs and potential profit associated with a particular contract. Total estimated costs, and thus contract revenue and income, can be impacted by changes in productivity, scheduling, the unit cost of labor, subcontracts, materials and equipment. Additionally, external factors such as weather, client needs, client delays in providing permits and approvals, labor availability, governmental regulation and politics may affect the progress of a project’s completion and thus the timing of revenue recognition. To the extent that original cost estimates are modified, estimated costs to complete increase, delivery schedules are delayed, or progress under a contract is otherwise impeded, cash flow, revenue recognition and profitability from a particular contract may be adversely affected. The nature of the Company’s contracts do not have variable consideration, such as liquidated damages, volume discounts, performance bonuses, incentive fees, and other terms that can either increase or decrease the transaction price. In contrast, the contracts are often modified to account for changes in contract specifications or requirements. Costs associated with contract modifications are included in the estimated costs to complete the contracts and are treated as project costs when incurred. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract. The effect of a contract modification on the transaction price, and the measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue on a cumulative catch-up basis. In some cases, settlement of contract modifications may not occur until after completion of work under the contract. As a significant change in one or more of these estimates could affect the profitability of its contracts, the Company reviews and updates its contract-related estimates regularly. The Company recognizes adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the cumulative impact of the profit adjustment is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on a contract, the projected loss is recognized in full in the period it is identified and recognized as an “Provision for Estimated Losses on Uncompleted Contracts” which is included in “Contract liabilities” on the Condensed Consolidated Balance Sheets. For contract revenue recognized over time, the Provision for Estimated Losses on Uncompleted Contracts is adjusted so that the gross profit for the contract remains zero in future periods. The Company estimates the collectability of contract amounts at the same time that it estimates project costs. If the Company anticipates that there may be issues associated with the collectability of the full amount calculated as the transaction price, the Company may reduce the amount recognized as revenue to reflect the uncertainty associated with realization of the eventual cash collection. The timing of when the Company bills its customers is generally dependent upon agreed-upon contractual terms, milestone billings based on the completion of certain phases of the work, or when services are provided. Sometimes, billing occurs subsequent to revenue recognition, resulting in unbilled revenue, which is a contract asset. However, the Company sometimes receives advances or deposits from its customers before revenue is recognized, resulting in deferred revenue, which is a contract liability. For the three-months and nine-months ended September 30, 2019 and 2018, revenues from contracts with customers is summarized by product category were as follows: Three Months Three Months Nine Months Nine Months 30-Sept-19 30-Sept-18 30-Sept-19 30-Sept-18 Product Category Athletic fields and tracks $ 253,123 $ 1,965,478 $ 3,207,075 $ 3,745,710 Vertical construction 11,716 1,111,811 560,773 1,456,254 Totals $ 264,840 $ 3,077,289 $ 3,767,849 $ 5,201,964 “Athletic fields and tracks” relates to the design, engineering and construction of outdoor playing fields, running tracks and related works, stadiums, scoreboards, dug outs, base and drainage work, and similar projects, while “Vertical construction” relates to the design, engineering and construction of an entire facility such as a dormitory, athletics facility, gymnasium, or a similar general construction project. Inventory Inventory is stated at the lower of cost (first-in, first out) or net realizable value and consists primarily of construction materials. Property, Plant and Equipment Property, plant and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets, which generally range from 3 to 5 years. Leasehold improvements are amortized over the remaining life of the lease. Gains and losses from the retirement or disposition of property and equipment are included in operations in the period incurred. Maintenance and repairs are expensed as incurred. Leases The Company has elected not to value the ROU asset or liability due to the immaterial amount of the lease and the expense will be recorded on a straight-line basis until the end of the lease. Income Taxes Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carry-forwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The differences relate primarily to net operating loss carryforward from date of acquisition and to the use of the cash basis of accounting for income tax purposes. The Company records an estimated valuation allowance on its deferred income tax assets if it is more likely than not that these deferred income tax assets will not be realized. The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company has not recorded any unrecognized tax benefits. Stock-Based Compensation The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on vesting dates and interim financial reporting dates until the service period is complete. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Awards granted to directors are treated on the same basis as awards granted to employees. Concentrations of Credit Risk Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such amounts may be in excess of the FDIC insurance limit. There were no concentrations of credit risk as September 30, 2019 and December 31, 2018. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable, net of the allowance for doubtful accounts. At September 30, 2019 and December 31, 2018, the allowance for doubtful accounts was $0, respectively. Research and Development Research and development expenses are charged to operations as incurred. Warranty Costs The Company generally provides a warranty on the products installed for up to 8 years with certain limitations and exclusions based upon the manufacturer’s product warranty. The Company’s subcontractors provide a one (1) year warranty to the Company against defects in material or workmanship. The Company has accrued a warranty reserve of $50,000 and $50,000 as of September 30, 2019 and December 31, 2018, respectively which is included in accounts payable and accrued expenses on the consolidated balance sheets. See Note 4 for warranty expenses incurred during for the nine and three months ended September 30, 2019 and 2018. Fair Value of Financial Instruments The Company follows ASC 820-10 of the FASB Accounting Standards Codification to measure the fair value of its financial instruments and disclosures about fair value of its financial instruments. ASC 820-10 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by ASC 820-10 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, inventory, prepaid expenses and other current assets, accounts payable and accrued expenses, and certain notes payable approximate their fair values because of the short maturity of these instruments. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. The Company’s Level 3 financial liabilities consist of the derivative conversion feature on a convertible note issued in 2016. The Company valued the conversion features using a Black Scholes model. These models incorporate transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, and volatility as of the date of issuance and each balance sheet date. The Company utilized the following management assumptions in valuing the derivative conversion feature at September 30, 2019 and December 31, 2018: 30-Sept-19 31-Dec-18 Exercise price $ 0.18 $ 0.38 Expected dividends 0 % 0 % Expected volatility 38.6 % 43.06 % Risk fee interest rate 2.16 % 2.63 % Term 1-year 1 year Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative liability at every reporting period and recognizes gains or losses in the statements of operations that are attributable to the change in the fair value of the derivative liability. Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheets as follows: Carrying Fair Value Measurement Using As of September 30, 2019 Value Level 1 Level 2 Level 3 Total Derivative conversion feature on convertible note $ 131,664 $ - $ - $ 131,664 $ 131,664 Carrying Fair Value Measurement Using As of December 31, 2018 Value Level 1 Level 2 Level 3 Total Derivative conversion feature on convertible note $ 131,100 $ - $ - $ 131,100 $ 131,100 The unobservable level 3 inputs used by the Company was the expected volatility assumption used in the option pricing model. Expected volatility is based on the historical stock price volatility of comparable companies’ common stock, as our stock does not have sufficient historical trading activity. The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the period December 31, 2018 through September 30, 2019: Fair Value Measurement Using Level 3 Inputs Derivative conversion feature on convertible note Total Balance, December 31, 2017 84,200 84,200 Change in fair value 46,900 46,900 Balance, December 31, 2018 131,100 131,100 Change in fair value 564 564 Balance, September 30, 2019 $ 131,664 $ 131,664 Changes in the unobservable input values could potentially cause material changes in the fair value of the Company’s Level 3 financial instruments. The significant unobservable inputs used in the fair value measurements is the expected volatility assumption. A significant increase (decrease) in the expected volatility assumption could potentially result in a higher (lower) fair value measurement. Beneficial Conversion Feature For conventional convertible debt where the rate of conversion is below market value, the Company records a “beneficial conversion feature” (“BCF”) and related debt discount. When the Company records a BCF the intrinsic value of the BCF would be recorded as a debt discount against the face amount of the respective debt instrument. The debt discount attributable to the BCF is amortized over the period from issuance to the date that the debt matures. Own-Share Lending Arrangements At the date of issuance, any own share-lending arrangement entered into on the Company’s shares in contemplation of a convertible debt offering or other financing is measured at fair value and recognized as an issuance cost with an offset to additional paid-in capital. If it becomes probable that the Company will default, the Company will recognize an expense equal to the then fair value of the unreturned shares, net of the fair value of probable recoveries, with an offset to additional paid-in capital. Loaned shares are excluded from basic and diluted earnings per share unless default of the share-lending arrangement occurs, at which time the loaned shares would be included in the basic and diluted earnings-per-share calculation. Derivative Instruments The Company evaluates its convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815-15. The result of this accounting treatment is that the fair value of the embedded 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 statements of operations as other income or expense. 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. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Net Loss Per Common Share The Company computes basic net loss per share by dividing net loss per share available to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods as applicable. The computation of basic and diluted loss per share excludes potentially dilutive securities because their inclusion would be anti-dilutive. Anti-dilutive securities excluded from the computation of basic and diluted net loss per share for the nine months ended September 30, 2019 and 2018, respectively, are as follows: 30-Sept-19 30-Sept-18 Warrants 183,338 679,588 Options 1,947,500 1,597,500 Convertible Notes 4,818,064 2,335,730 Totals 6,948,902 4,612,818 Significant Customers The Company’s business focuses on securing a smaller number of high quality, highly profitable projects, which sometimes results in having a concentration of sales and accounts receivable among a few customers. This concentration is customary among the design and build industry for a company of our size. As we continue to grow and are awarded more projects, this concentration will continue to decrease. For the nine months ended September 30, 2019, the Company had 3 customers representing 14.9%, 22.5% and 35.0% of revenue, respectively. For the nine months ended September 30, 2018, the Company had customers representing 26%, 19%, 18%, 15% and 12% of revenue. For the three months ended September 30, 2019, the Company had 1 customer representing 94.3% of revenue, respectively. For the three months ended September 30, 2018, the Company had customers representing 32%, 30%, 22% and 12% of revenue. Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), (“ASU 2016-02”) and issued subsequent amendments to the initial guidance. This ASU requires an entity to recognize a right-of-use asset (“ROU”) and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. Similar modifications have been made to lessor accounting in-line with revenue recognition guidance. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard is effective for the Company on January 1, 2019, with early adoption permitted. The Company has a single lease for $ 1,367 per month for office space, which lease expires in 2020. Accordingly, the Company has elected not to value the ROU asset or liability due to the immaterial amount of this lease and the expense will be recorded on a straight-line basis until the end of the lease. In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (ASC 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 simplifies the accounting for nonemployee share-based payment transactions. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The new standard will become effective for the Company beginning January 1, 2019, with early adoption permitted. The Company adopted ASU 2018-07 effective January 1, 2019 and it did not have a material impact on its financial statements. In August 2018, the FASB issue ASU 2018-13, Fair Value Measurement (ASC 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The new standard will become effective for the Company January 1, 2020, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures. Subsequent Events Management has evaluated subsequent events or transactions occurring through the date on which the financial statements were issued. |
Going Concern
Going Concern | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 3 – GOING CONCERN Our historical operating results indicate substantial doubt exists related to the Company’s ability to continue as a going concern. As reflected in the accompanying consolidated financial statements, as of September 30, 2019 the Company had a working capital deficit of $8,757,699. The Company had losses of $1,302,571 for the nine months ended September 30, 2019 and $2,151,188 for the nine months ended September 30, 2018 and had an accumulated deficit of $20,869,101 at September 30, 2019. Substantially all of our accumulated deficit has resulted from losses incurred on construction projects, costs incurred in connection with our research and development and general and administrative costs associated with our operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern through November 19, 2020. We expect that for the next 12 months, our operating cash burn will be approximately $2.3 million, excluding repayments of existing debts in the aggregate amount of $1.1 million. Our cash requirements relate primarily to working capital needed to operate and grow our business, including funding operating expenses and continued development and expansion of our products/services. Our ability to achieve profitability and meet future liquidity needs and capital requirements will depend upon numerous factors, including the timing and size of awarded contracts; the timing and amount of our operating expenses; the timing and costs of working capital needs; the timing and costs of expanding our sales team and business development opportunities; the timing and costs of developing a marketing program; the timing and costs of warranty and other post-implementation services; the timing and costs of hiring and training construction and administrative staff; the extent to which our brand and construction services gain market acceptance; the extent of our ongoing and any new research and development programs; and changes in our strategy or our planned activities. We have experienced and continue to experience negative cash flows from operations and we expect to continue to incur net losses in the foreseeable future. The Company will require additional funding to finance the growth of its current and expected future operations as well as to achieve its strategic objectives. The Company believes its current available cash along with anticipated revenues may be insufficient to meet its cash needs for the near future. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. If we are not able to obtain financing when needed, we may be unable to carry out our business plan. As a result, we may have to significantly limit our operations and our business, financial condition and results of operations would be materially harmed. To date, we have funded our operational short-fall primarily through private offerings of common stock, convertible notes and promissory notes, our line of credit and factoring of receivables. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. |
Costs and Estimated Earnings on
Costs and Estimated Earnings on Contracts in Process | 9 Months Ended |
Sep. 30, 2019 | |
Contractors [Abstract] | |
Costs and Estimated Earnings on Contracts in Process | NOTE 4 – COSTS AND ESTIMATED EARNINGS ON CONTRACTS IN PROCESS Following is a summary of costs, billings, and estimated earnings on contracts in process as of September 30, 2019 and December 31, 2018: 30-Sept-19 31-Dec-18 Costs incurred on contracts in progress $ 22,251,141 $ 19,817,415 Estimated earnings (losses) 1,195,138 378,469 23,446,279 19,438,946 Less billings to date (25,011,881 ) (21,287,808 ) $ (1,565,602 ) $ (1,848,862 ) The above accounts are shown in the accompanying consolidated balance sheet under these captions at September 30, 2019 and December 31, 2018. Contract assets consist of the following: 30-Sept-19 31-Dec-18 Costs and Estimated Earnings in Excess of Billings $ 1,154,807 $ 363,396 Contract assets increased by $791,411 compared to December 31, 2018 due primarily to an increase in project activity during the nine months ended September 30, 2019. Contract liabilities consist of the following: 30-Sept-19 31-Dec-18 Billings in Excess of Costs and Estimated Earnings $ 2,684,395 $ 1,961,580 Provision for Estimated Losses on Uncompleted Contracts 36,014 250,678 Contract Liabilities $ 2,720,409 $ 2,212,258 Contract liabilities increased $508,151 compared to December 31, 2018 primarily due to higher Billings in Excess of Costs & Estimated Earnings and increased project activity. During the nine months ended September 30, 2019 and 2018 the Company incurred warranty costs of $0 and $0, respectively. The Company generally provides a warranty on the products installed for up to 8 years with certain limitations and exclusions based upon the manufacturer’s product warranty. The Company’s subcontractors provide an 8 year warranty to the Company against defects in material or workmanship. The Company has accrued a warranty reserve of $50,000 and $50,000 as of September 30, 2019 and December 31, 2018, respectively which is included in accounts payable and accrued expenses on the consolidated balance sheets. |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | NOTE 5 – PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consists of the following: Depreciation expense for the nine months ended September 30, 2019 and 2018 was $15,058 and $2,704, respectively. 30-Sept-19 31-Dec-18 Furniture and equipment $ 19,803 $ 20,278 Leasehold improvements 24,292 24,292 Total 44,095 44,570 Less: accumulated depreciation (39,586 ) (25,003 ) $ 4,509 $ 19,567 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | NOTE 6 - LEASES On January 1, 2018, the Company entered into a new lease agreement for its office space in Illinois. The lease commenced on January 1, 2018 and expires on December 31, 2020. For 2018, the lease has minimum monthly payments of $1,367; thereafter, the minimum monthly payment shall increase by the lesser of CPI or 5%. Rent expense was $1,237 and $ 15,597 Future lease payments for the years ended December 31 are as follows: 2019 (remaining) $ 4,306 2020 18,085 Total $ 22,391 The table above assumes a 5% increase in minimum monthly payment each year. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 7 – DEBT Convertible Notes On May 7, 2015, the Company issued unsecured convertible promissory notes (each a “Note” and collectively the “Notes”) in an aggregate principal amount of $450,000 to three accredited investors (collectively the “Note Holders”) through a private placement. The notes pay interest equal to 9% of the principal amount of the notes, payable in one lump sum, and mature on February 1, 2016 unless the notes are converted into common stock if the Company undertakes a qualified offering of securities of at least $2,000,000 (the “Qualified Offering”). The principal of the notes is convertible into shares of common stock at a conversion price that is the lower of $1.00 per share or the price per share offered in a Qualified Offering. In order to induce the investors to invest in the notes, one of the Company’s shareholders assigned an aggregate of 45,000 shares of his common stock to such investors. The Company recorded a $45,000 debt discount relating to the 45,000 shares of common stock issued with an offsetting entry to additional paid in capital. The debt discount was amortized to interest expense over the contractual life of the notes. As part of the transaction, we incurred placement agent fees of $22,500 and legal fees of $22,500, which were recorded as debt issue costs and were amortized over the contractual life of the notes. The notes matured on February 1, 2016. On March 31, 2016, the Note Holders entered into a letter agreement whereby, effective as of February 1, 2016, they waived any and all defaults that may or may not have occurred prior to the date thereof (the “First Waiver”). As consideration for the First Waiver, the Company issued the Note Holders an aggregate of 45,000 shares of the Company’s common stock. The principal amount on the Notes increased from $450,000 to $490,500 as the initial interest amount, $40,500 as of February 1, 2016, was added to the principal amount of the Notes. The maturity date of the Notes was extended to July 1, 2016 and the Notes shall pay interest as of February 1, 2016 at a rate of 9% per annum, payable in one lump sum on the maturity date. In addition, on any note conversion date from February 1, 2016 through July 1, 2016, the Notes are convertible into shares of the Company’s common stock at a conversion price of $1.00 per share. On any Note conversion after July 1, 2016, the Notes are convertible into shares of the Company’s common stock at a conversion price that is the lower of (i) $1.00 per share and (ii) the volume-weighted average price for the last five trading days preceding the conversion date. All remaining terms of the Notes remained the same. Subsequent to the First Waiver, the Notes matured on July 1, 2016. On August 9, 2016, one Note Holder entered into a letter agreement whereby, effective as of August 1, 2016, they waived any and all defaults that may or may not have occurred prior to the date thereof (the “Second Waiver”). As consideration for the Second Waiver, the Company issued the Note Holder an aggregate of 40,000 shares of the Company’s common stock and added $15,000 to the principal amount of the note. The principal amount on the Note increased from $218,000 to $242,810 as the accrued interest amount, $9,810 as of August 1, 2016 and the aforementioned $15,000 of consideration, was added to the principal amount of the Note. The maturity date of the Note was extended to January 1, 2017 and the Note shall pay interest as of August 1, 2016 at a rate of 15% per annum, payable in one lump sum on the maturity date. In addition, on any note conversion date from August 9, 2016 through January 1, 2017, the Note is convertible into shares of the Company’s common stock at a conversion price of $1.00 per share. On any Note conversion after January 1, 2017, the Note is convertible into shares of the Company’s common stock at a conversion price that is the lower of (i) $1.00 per share and (ii) the volume-weighted average price for the last five trading days preceding the conversion date. All remaining terms of the Note remained the same. On October 18, 2017, a letter was sent to the board of directors and the CEO of the Company on behalf of the Note Holder, demanding that the Company repay its outstanding debt in the principal aggregate amount of $200,000, plus accrued interest, issued pursuant to the Note. On July 25, 2018, this Note Holder and another filed (“Note Holder Plaintiffs”) suit against the Company in the New York State Supreme Court, County of New York. The suit alleges that, as of July 24, 2018, the Company owes the plaintiffs a total amount of $466,177, which is inclusive of principal and interest. The plaintiffs filed a Motion for Summary Judgment in Lieu of Complaint and asked that judgment be entered against the Company. Glenn Tilley, a director of the Company, is the holder of $170,857 of principal as of September 30, 2019 and December 31, 2018 of the aforementioned Note. As of September 30, 2019, the Company was not compliant with the repayment terms of the Note but no defaults under the Note have been called by the note holder. The Company is currently conducting good faith negotiations with the note holder to further extend the maturity date, however, there can be no assurance that a further extension will be granted. The Company is currently accruing interest on the Note at the default interest rate of 15% per annum. The Note is convertible into shares of the Company’s common stock at a conversion price equal to the lower of i) $1.00 per share and ii) the volume-weighted average price for the last five trading days preceding the conversion date. On February 22, 2016 (the “Effective Date”), the Company issued a convertible note in the principal aggregate amount of $170,000 to a private investor (the “February 2016 Note”). As of December 31, 2018, the Company was not compliant with the repayment terms of the Note but no defaults under the note have been called by the note holder. The Company is currently conducting good faith negotiations with the Note Holder to further extend the maturity date, however, there can be no assurance that a further extension will be granted. The Note is convertible into shares of the Company’s common stock at a conversion price equal to the lower of i) $1.00 per share and ii) 65% of the volume-weighted average price for the last twenty trading days preceding the conversion date. The Note holder converted a portion of the principal $1,500 and accrued interest $1,748 to 16,901 shares of common stock during the second quarter ended June 30, 2017. The outstanding principal balance on the February 2016 note at September 30, 2019 and December 31, 2018 was $168,500. Accrued interest on this note was $58,195 and $ 37,913 as of September 30, 2019 and December 31, 2018, respectively. On May 1, 2019, the Company entered into a nine-month loan agreement with GHS Investment, LLC (“GHS”). Pursuant to the agreement, GHS agreed to loan the Company $330,000 for general operating expenses. The loan was issued with ten percent (10%) original issuance discount and the Company shall also pay interest at 10% per annum. As security for the loan, GHS received a second priority security position in the assets of the Company; as additional security, the Company has placed 6,600,000 shares of common stock into reserve. The Company may prepay this loan, in whole or in part, upon three business days written notice and in accordance with the following schedule: (a) If within 60 calendar days from the execution of this loan, 100 % of all outstanding amounts due on each outstanding loan in one or more payments; (b) on or after 60 calendar days from the execution of the loan and within 180 days from execution, 120% of all amounts due on each outstanding loan in one payment or more payments; (c) on or after 180 calendar days from the execution of this loan through maturity date, 100% of all amounts outstanding in one payment or more payments. After five months, the loan is convertible into shares of the Company’s common stock at a conversion price equal to shall equal $0.15. The conversion price was less than the fair value of the stock on this day, resulting in recognition of the intrinsic value of a beneficial conversion feature of $165,000. Both the original issue discount of $30,000 and the intrinsic value of the beneficial conversion feature of $165,000 will be amortized over the life of the loan. The Company accreted $108,333 of the debt discount during the nine months ended September 30, 2019 and will record accretion equal to the debt discount of $86,667 over the remaining term of the note. On March 1, 2019, the Company entered into a thirty-six -month loan agreement with a consultant. Pursuant to the agreement, the consultant agreed to convert amounts owed by the Company in the amount of $134,000 to a note with interest at 10% requiring semi-annual interest payments and a balloon payment of $134,000 due on the maturity date. In event of default on either the interest or principal payment, the consultant can convert the defaulted amount times 150% into common stock at the average closing price over the prior 10-days. At September 30, 2019 and December 31, 2018, the outstanding balance related to this agreement was $134,000 and $0, respectively. On September 11, 2019, the Company entered into a nine-month loan agreement with Labrys Fund, LP (“Labrys”) and issued Labrys a $330,000 convertible promissory note. Pursuant to the agreement, Labrys agreed to loan the Company $296,500, net of Labrys’s original issue discount of $30,000 and $3,500 for Labrys’s legal fees, for general operating expenses. The loan was issued with a ten percent (10%) original issuance discount, and the Company shall also pay interest at 10% per annum. As security for the loan, Labrys received 1,100,000 shares of common stock, which shares are to be returned to the Company’s treasury upon timely repayment or prepayment of the loan (“Loaned Shares”). As it was probable the Company would repay the loan at or prior to maturity, no amount related to the shares was expensed during the quarter ending September 30, 2019. In the event of default, in addition to other rights and remedies, Labrys may enter a Confession of Judgement against the Company for the outstanding amount due under the convertible note. During the first 180 days of the loan, the Company may prepay the loan in full upon three business days written notice. At any time after issuance, Labrys can convert the outstanding principal amount under the convertible note into shares of the Company’s common stock at a conversion price equal to $0.15, or, if an event of default has occurred, at a conversion price equal at 60% multiplied by the lowest trading price during the prior twenty (20) trading day period. The conversion price was less than the fair value of the stock onSeptember 11, 2019, resulting in recognition of the intrinsic value of a beneficial conversion feature of $296,500. Both Labrys’s original issue discount and legal fees in the aggregate amount of $33,500 and the intrinsic value of the beneficial conversion feature will be amortized over the life of the loan. The Company accreted $22,883 of the debt discount during the nine months ended September 30, 2019 and will record accretion of the remaining debt discount of $307,117 over the remaining term of the note. Promissory Notes On July 14, 2016, the Company closed a Credit Agreement (the “Credit Agreement”) by and among the Company and First Form, Inc. (the “Borrowers”) and Genlink Capital, LLC, as lender (“Genlink”). Pursuant to the Credit Agreement, Genlink agreed to loan the Company up to a maximum of $1 million for general operating expenses. An initial amount of $670,000 was funded by Genlink at the closing of the Credit Agreement. Any increase in the amount extended to the Borrowers shall be at the discretion of Genlink. The amounts borrowed pursuant to the Credit Agreement are evidenced by a Revolving Note (the “Revolving Note”) and the repayment of the Revolving Note is secured by a first position security interest in substantially all of the Company’s assets in favor of Genlink, as evidenced by a Security Agreement by and among the Borrowers and Genlink (the “Security Agreement”). The Revolving Note is due and payable, along with interest thereon, on December 20, 2017, and bears interest at the rate of 15% per annum, increasing to 19% upon the occurrence of an event of default. The Company incurred loan fees of $44,500 for entering into the Credit Agreement. The loan fees shall be amortized to interest expense over the life of the notes. The Company must pay a minimum of $75,000 in interest over the life of the loan. The principal balance on the note as of December 31, 2017 was $1,000,000. In December 2017, in exchange for an extension fee of $10,000, this Loan Agreement was converted into a one-year term loan and extend for one additional year, with monthly payments of $20,833 in principal plus interest at 15% and a balloon payment of $729,167 due at maturity on January 25, 2019. In November 2018, this Loan Agreement was amended in order to increase the principal amount to $1,125,000, and extended through November 25, 2020 with interest at 15% requiring monthly payments of $26,650 in principal (starting in March 2019) plus interest with a balloon payment of $592,000 due on the maturity date. As additional security for the term loan, the Company has placed 970,000 shares of common stock into reserve. Currently, the Company is in arrears on this loan. The outstanding principal balance at September 30, 2019 and December 31, 2018 was $1,125,000. Accrued interest on this note was $198,053 and $35,579 as of September 30, 2019 and December 31, 2018, respectively. As of November 8, 2018, the outstanding principal was $351,810 and accrued unpaid interest as $124,524, totaling $476,334. On November 8, 2018, the Note Holder Plaintiffs and the Company executed a Settlement Agreement pursuant to which the Note Holder Plaintiffs agreed to a full release and wavier of their claims, including but not limited to, dismissal with prejudice of the suit in exchange for (a) an initial payment of $250,000, and (b) promissory notes in the total amount of $150,000, payable over twenty-four (24) months, with interest at nine percent (9%) per annum. As security for the two promissory notes, the Company will place 850,000 shares of common stock into an escrow account (“Escrow”). In the event the Company does not make timely payments under the promissory notes, upon written notice and after expiration of a cure period, the escrow agent shall release from Escrow shares of common stock with a value equal to the missed installment payment or payments plus accrued interest on that payment or payments. The number of shares so issued shall be determined by dividing the amount of the past due installment payment by the volume-weighted average price of the Company’s common stock for the last five trading days preceding the due date of the installment payment. With respect to the common stock held in Escrow, Note Holder Plaintiffs do not have any shareholder rights, including but not limited to voting, dividend or ownership rights. Upon full performance of the promissory notes, all shares of common stock still remaining in Escrow shall revert back to the Company as treasury shares. Given that the Company is experiencing financial difficulties and the Note Holder Plaintiffs granted a concession by accepting total payments of $400,000 for the remaining balance of the principal and interest due, the Company accounted for such transactions as a troubled debt restructuring and recognized a total gain of $76,336 from the debt settlement. The gain on troubled debt restructuring was $0.00 per share. The outstanding principal balance on at September 30, 2019 and December 31, 2018 was $115,517 and $144,272, respectively. Accrued interest on this note was $4,884 and $ 653 as of September 30, 2019 and December 31, 2018, respectively. On March 30, 2018, the Company entered into an eighteen-month loan agreement with an investor. Pursuant to the agreement, the investor agreed to loan the Company $250,000 for general operating expenses. During the first nine months, the Company will pay interest only at 8% per annum. Thereafter, the Company shall pay principal and interest through maturity on December 31, 2019. Currently, the Company is in arrears on this loan. At September 30, 2019 and December 31, 2018, the outstanding balance related to this finance agreement was $208,333. On April 9, 2018, the Company entered into an eighteen-month loan agreement with a director. Pursuant to the agreement, the director agreed to loan the Company $50,000 for general operating expenses. During the first nine months, the Company will pay interest only at 8% per annum. Thereafter, the Company shall pay principal and interest through maturity on October 30, 2019. Currently, the Company is in arrears on this loan. At September 30, 2019 and December 31, 2018, the outstanding balance was $45,833. Future maturities of debt are as follows: For the years ending September 30 2019 $ 1,066,417 2020 1,062,247 2021 134,000 Total $ 2,262,664 |
Stockholders' Deficit
Stockholders' Deficit | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Deficit | NOTE 8 – STOCKHOLDERS’ DEFICIT Preferred Stock The Company has authorized 20,000,000 shares of preferred stock, with a par value of $0.00001 per share. As of September 30, 2019, and December 31, 2018, the Company has -0- shares of preferred stock issued and outstanding. Common Stock The Company has authorized 250,000,000 shares of common stock, with a par value of $0.00001 per share. As of September 30, 2019, and December 31, 2018, the Company has 23,581,534 and 19,180,563 shares of common stock issued and outstanding, respectively. Common stock issued for services During the three and nine months ended September 30, 2019, 95,175 and 293,551 shares of common stock valued at $23,511 and $84,172, respectively, were issued to various consultants and employees for professional services provided to the Company. During the three and nine months ended September 30, 2018, 57,942 and 145,884 shares of common stock valued at $14,736 and $42,085, respectively, were issued to various consultants and employees for professional services provided to the Company. Sale of common stock During the nine-month period ended September 30, 2019, the Company sold an aggregate of 4,107,920 shares of Company common stock for $411,269 in cash. These shares were sold in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, as there was no general solicitation and the transactions did not involve a public offering. During the year ended December 31, 2018, the Company sold 1,593,332 shares of common stock to investors in exchange for $239,000 in gross proceeds in connection with the private placement of the Company’s common stock. 2016 Incentive Stock Option Plan On October 4, 2016, the Board approved the Sports Field 2016 Incentive Stock Option Plan (the “2016 Plan”). The Plan provides for the issuance of up to 2,500,000 shares of common stock of the Company through the grant of non-qualified options (the “Non-qualified Options”), incentive options (the “Incentive Options” and together with the Non-qualified Options, the “Options”) and restricted stock (the “Restricted Stock”) and unrestricted stock (the “Unrestricted Stock”) to directors, officers, consultants, attorneys, advisors and employees. Stock options issued for services On January 11, 2019, the Company issued 25,000 common stock options to a consultant for investor relations services at a fair value of $25,547. The options immediately vested and have a $0.35 strike price. On March 1, 2019, in exchange for retiring 400,000 in previously issued common stock options, the Company agreed to issue 550,000 common stock options to a consultant for investor relations services. The options vest ratably in one-half year increments and have a $0.10 strike price. On January 11, 2018, the Company issued 100,000 common stock options to a consultant for investor relations services at a fair value of $3,796. The options immediately vested and have a $0.35 strike price. On May 8, 2018, the Company issued 200,000 common stock options to a board member for his services, having a total fair value of approximately $10,169. The options vest ratably over a two-year period and have a $1 strike price. On July 1, 2018, the Company issued 100,000 common stock options to a consultant for investor relations services at a fair value of $11,110. The options immediately vested and have a $0.35 strike price. The Company uses the Black-Scholes option pricing model to determine the fair value of the options granted. In applying the Black-Scholes option pricing model to options granted, the Company used the following weighted average assumptions: For the Ended 30 September 2019 For the Risk free interest rate 2.52-2.76 % 2.32-2.75 % Dividend yield 0 % 0 % Expected volatility 42-43 % 41-44 % Expected life in years 5.0-11.0 3.5-5.0 Forfeiture Rate 0 % 0 % Since the Company has limited trading history, volatility was determined by averaging volatilities of comparable companies. The expected term of the option, taking into account both the contractual term of the option and the effects of employees’ expected exercise and post-vesting employment termination behavior: The expected life of options and similar instruments represents the period of time the option and/or warrant are expected to be outstanding. Pursuant to paragraph 718-10-S99-1, it may be appropriate to use the simplified method i.e., expected term = ((vesting term + original contractual term) / 2) The following is a summary of the Company’s stock option activity for the year ended December 31, 2018 and the nine months ended September 30, 2019: Number of Weighted Average Exercise Price Weighted Average Remaining Contractual Life Outstanding – December 31, 2017 1,297,500 $ 1.14 3.34 Exercisable – December 31, 2017 1,180,000 1.21 3.23 Granted 400,000 0.86 5.00 Exercised - - - Forfeited/Cancelled - - - Outstanding – December 31, 2018 1,697,500 1.05 3.14 Exercisable– December 31, 2018 1,697,500 1.05 3.14 Granted 650,000 0.14 9.98 Exercised - - - Forfeited/Cancelled (400,000 ) 0.35 - Outstanding - September 30, 2019 1,947,500 0.90 2.27 Exercisable - September 30, 2019 1,647,500 0.87 2.19 At September 30, 2019 and December 31, 2018, the total intrinsic value of options outstanding was $0 and $0, respectively. At September 30, 2019 and December 31, 2018, the total intrinsic value of options exercisable was $97,350 and $0, respectively. Stock-based compensation for stock options has been recorded in the condensed consolidated statements of operations and totaled $9,885 for the nine months ended September 30, 2019, and $4,166 for the nine months ended September 30, 2018, respectively. As of September 30, 2019, the remaining balance of unamortized expense is $156,790 and is expected to be amortized through 2021. Stock Warrants The following is a summary of the Company’s stock warrant activity for the year ended December 31, 2018 and the nine months ended September 30, 2019: At September 30, 2019 and December 31, 2018, the total intrinsic value of warrants outstanding and exercisable was $0 and $0, respectively. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 9 – RELATED PARTY TRANSACTIONS Jeromy Olson, the Chief Executive Officer of the Company, owns 50.0% of a sales management and consulting firm, NexPhase Global, LLC (“NexPhase”) that provides sales services to the Company. These services include the retention of two full-time senior sales representatives including the current National Sales Director of the Company. The NexPhase consulting agreement was terminated on October 1, 2017. For three months ended September 30, 2019 and 2018, NexPhase earned sales commissions of $0. For nine months ended September 30, 2019 and 2018, NexPhase earned sales commissions of $0, and had accounts payable from the Company of $113,175 at September 30, 2019 and December 31, 2018. Glenn Tilley, a director of the Company, is the holder of $170,857 of principal as of September 30, 2019 of the aforementioned Note. As of September 30, 2019, the Company was not compliant with the repayment terms of the Notes but no defaults under the note have been called by the note holder. The Company is currently conducting good faith negotiations with the note holder to further extend the maturity date, however, there can be no assurance that a further extension will be granted. The Company is currently accruing interest on the Note at the default interest rate of 15% per annum. The Note is convertible into shares of the Company’s common stock at a conversion price equal to the lower of i) $1.00 per share and ii) the volume-weighted average price for the last five trading days preceding the conversion date. On March 30, 2018, the Company entered into an eighteen-month loan agreement with an investor. Pursuant to the agreement, the investor agreed to loan the Company $250,000 for general operating expenses. During the first nine months, the Company will pay interest only at 8% per annum. Thereafter, the Company shall pay principal and interest through maturity on December 31, 2019. Currently, the Company is in arrears on this loan. At September 30, 2019 and December 31, 2018, the outstanding balance related to this finance agreement was $208,333. On April 9, 2018, the Company entered into an eighteen-month loan agreement with a director. Pursuant to the agreement, the director agreed to loan the Company $50,000 for general operating expenses. During the first nine months, the Company will pay interest only at 8% per annum. Currently, the Company is in arrears on this loan. Thereafter, the Company shall pay principal and interest through maturity on October 30, 2019. At September 30, 2019 and December 31, 2018, the outstanding balance was $45,833. In April 2019, Mr. Olson advanced to the Company $11,520, which amount was used in partial satisfaction of the amount to be paid to a former employee under a settlement agreement (see Note 10, Employee Separation). This demand note carries no interest. In April 2019, Mr. Keenan, Director of Finance, advanced to the Company $11,520, which amount was used in partial satisfaction of the amount to be paid to a former employee under a settlement agreement (see Note 10, Employee Separation). This demand note carries no interest. |
Employee Separation
Employee Separation | 9 Months Ended |
Sep. 30, 2019 | |
Retirement Benefits [Abstract] | |
Employee Separation | NOTE 10 – EMPLOYEE SEPARATION On March 27, 2019 the Company entered into a mutual general release and settlement agreement (the “Settlement Agreement”) with the former employee. Pursuant to the Settlement Agreement, the Company agreed to pay the former employee $69,000, payable in three equal installments of $23,000 on June 28 and September 30, 2019 (the “Settlement Amount”). The Settlement Agreement also contains a general release by the former employee of the Company relating to employment and compensation claims, such release however is predicated on the Company making payments pursuant to the Settlement Agreement. As of September 30, 2019, the outstanding balance on this obligation was $0. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 11 – COMMITMENTS AND CONTINGENCIES Services Agreements On July 11, 2017 (the “Effective Date”), the Company entered into a Services Agreement with a consultant. The consultant agreed to provide investor relations services to the Company for a period of 6 months. As compensation for the services, the Company shall pay the consultant $7,500 per month and is obligated to issue options for 100,000 shares of the Company common stock upon execution and, if renewed, at each renewal. The Company may terminate this agreement by providing at least 30 days advance written notice prior to the next renewal date. The Company has recorded compensation expense relating to the equity portion of the agreement of $14,905 during the year ended December 31, 2018. Employment Agreements In September 2014, Jeromy Olson entered into a 40 month employment agreement to serve in the capacity of CEO, with subsequent one year renewal periods (the “Olson Employment Agreement”). The CEO will receive a monthly salary of $10,000 that (1) will increase to $13,000 upon the Company achieving gross revenues of at least $10,000,000, as amended, and an operating margin of at least 15%, and (2) will increase to $16,000 per month upon the Company achieving gross revenues of at least $15,000,000 and an operating margin of at least 15%. The agreement provides for cash bonuses of 15% of the annual Adjusted EBITDA between $1 and $1,000,000, 10% of the annual Adjusted EBITDA between $1,000,001 and $2,000,000 and 5% of the annual Adjusted EBITDA greater than $2,000,000. For purposes of the agreement, Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization less share based payments, gains or losses on derivative instruments and other non-cash items approved by the Board of Directors. The CEO was issued 250,000 shares of common stock on the date of the agreement and received 250,000 shares of common stock on January 1, 2016. Lastly, the CEO will be issued qualified stock options as follows: ● 100,000 stock options at an exercise price of $1.50 per share that vest on December 31, 2015 ● 100,000 stock options at an exercise price of $1.75 per share that vest on December 31, 2016 ● 100,000 stock options at an exercise price of $2.50 per share that vest on December 31, 2017 On November 3, 2016, the Board, pursuant to the Olson Employment Agreement (as defined above), approved the issuance of (i) qualified options to purchase 100,000 shares of the Company’s Common Stock at a price of $1.50 vesting immediately with a grant date of November 3, 2016, (ii) qualified options to purchase 75,000 shares of the Company’s Common Stock at a price of $1.75 vesting on December 31, 2016, and (iii) qualified options to purchase 25,000 shares of the Company’s Common Stock at a price of $1.75 vesting on December 31, 2016, which options were issued in the first quarter of 2017. The CEO is due additional option grants pursuant to the consulting agreement, however, those grants were deferred to comply with the terms of the issuance of incentive options in the 2016 Plan. Pursuant to section 3 of the Olson Employment Agreement, Mr. Olson’s employment term was automatically renewed and will expire on January 19, 2020. Director Agreements On January 4, 2016, the Company entered into a director agreement with Glenn Tilley, concurrent with Mr. Tilley’s appointment to the Board of Directors of the Company (the “Board”) effective January 4, 2016. The director agreement may, at the option of the Board, be automatically renewed on such date that Mr. Tilley is re-elected to the Board. Pursuant to the director agreement, Mr. Tilley is to be paid a stipend of One Thousand Dollars ($1,000) per meeting of the Board, which shall be contingent upon his attendance at the meetings being in person, rather than via telephone or some other electronic medium. Additionally, Mr. Tilley shall receive non-qualified stock options (the “Options”) to purchase Two Hundred Thousand (200,000) shares of the Company’s common stock. The exercise price of the Options shall be One Dollar ($1.00) per share. The Options shall vest in equal amounts over a period of two (2) years at the rate of Twenty Five Thousand (25,000) shares per fiscal quarter on the last day of each such quarter, commencing January 4, 2016. The total grant date value of the options was $97,535 which was expensed over the vesting period. On May 15, 2017, the Company entered into a director agreement (“Minichiello Director Agreement”) with Tom Minichiello, concurrent with Mr. Minichiello’s appointment to the Board of Directors of the Company (the “Board”) effective May 15, 2017. The Minichiello Director Agreement may, at the option of the Board, be automatically renewed on such date that Mr. Minichiello is re-elected to the Board. Pursuant to the Director Agreement, Mr. Minichiello is to be paid a stipend of One Thousand Dollars ($1,000) per meeting of the Board, which shall be contingent upon his attendance at the meetings being in person, rather than via telephone or some other electronic medium. Additionally, Mr. Minichiello shall receive non-qualified stock options (the “Options”) to purchase up to Two Hundred Thousand (200,000) shares of the Company’s common stock. The exercise price of the Options shall be One Dollar ($1.00) per share. The Options shall vest in equal amounts over a period of two (2) years at the rate of Twenty Five Thousand (25,000) shares per fiscal quarter on the last day of each such quarter. The total grant date value of the options was $4,017 which shall be expensed over the vesting period. On May 8, 2018, the Company entered into a director agreement (“Tuntland Director Agreement”) with John Tuntland, concurrent with Mr. Tuntland’s appointment to the Board of Directors of the Company (the “Board”) effective May 8, 2018. The Tuntland Director Agreement may, at the option of the Board, be automatically renewed on such date that Mr. Tuntland is re-elected to the Board. Pursuant to the Director Agreement, Mr. Tuntland is to be paid a stipend of One Thousand Dollars ($1,000) per meeting of the Board, which shall be contingent upon his attendance at the meetings being in person, rather than via telephone or some other electronic medium. Additionally, Mr. Tuntland shall receive non-qualified stock options (the “Options”) to purchase up to Two Hundred Thousand (200,000) shares of the Company’s common stock. The exercise price of the Options shall be One Dollar ($1.00) per share. The Options shall vest in equal amounts over a period of two (2) years at the rate of Twenty Five Thousand (25,000) shares beginning in the third quarter of 2018. The total grant date value of the options was $10,169 which shall be expensed over the vesting period. Supply Agreement On December 2, 2015, IMG Academy LLC (“IMG”) and the Company entered into an Official Supplier Agreement (the “Agreement”). The term of the Agreement is January 1, 2016 through December 31, 2019 (the “Term”). Under the Agreement, The Company is to be the “Official Supplier” of IMG in connection with certain of the Company’s products and related services during the Term. Additionally, the Agreement provides the Company with certain promotional opportunities and supplier benefits including but not limited to (i) on-site signage and Company brand exposure (ii) the opportunity to install up to 4 test turf plots (the “Test Plots”) in order for the Company to conduct research on its turf products and the ability to use IMG athletes as participants in such testing (ii) opportunity to schedule site visits of test plots for potential Company customers and (iv) access to IMG’s personnel to include Head Coaches, Athletic Director and Administrators, subject to clearances and applicable rules of governing bodies such as NCAA. As consideration for its designation as IMG’s “Official Supplier” the Company must pay IMG three installments of $208,000 during the Term as specified in the Agreement. For the nine months ended September 30, 2019 and 2018, the company has recorded $117,378 of expense related to the agreement. Placement Agent and Finders Agreements The Company entered into an exclusive Financial Advisory and Investment Banking Agreement with Spartan Capital Securities, LLC (“Spartan”) effective November 20, 2013 (the “2013 Spartan Advisory Agreement”). The Company entered into a second exclusive Financial Advisory and Investment Banking Agreement with Spartan Capital Securities, LLC (“Spartan”) effective October 1, 2015, amended August 3, 2016 (the “2015 Spartan Advisory Agreement”), which replaced and superseded the 2013 Spartan Advisory Agreement. Pursuant to the 2015 Spartan Advisory Agreement, Spartan will act as the Company’s exclusive financial advisor and placement agent to assist the Company in connection with a best efforts private placement (the “2015 Financing”) of up to $3.5 million or 3,181,819 shares (the “Shares”) of the common stock of the Company at $1.10 per Share. Spartan shall have the right to place up to an additional $700,000 or 636,364 Shares in the 2015 Financing to cover over-allotments at the same price and on the same terms as the other Shares sold in the 2015 Financing. The 2015 Spartan Advisory Agreement expires on August 1, 2019. The Company, upon closing of the 2015 Financing, shall pay consideration to Spartan, in cash, a fee in an amount equal to 10% of the aggregate gross proceeds raised in the 2015 Financing. The Company shall grant and deliver to Spartan at the closing of the 2015 Financing, for nominal consideration, five year warrants (the “Warrants”) to purchase a number of shares of the Company’s Common Stock equal to 10% of the number of shares of Common Stock (and/or shares of Common Stock issuable upon exercise of securities or upon conversion or exchange of convertible or exchangeable securities) sold at such closing. The Warrants shall be exercisable at any time during the five year period commencing on the closing to which they relate at an exercise price equal to the purchase price per share of Common Stock paid by investors in the 2015 Financing or, in the case of exercisable, convertible, or exchangeable securities, the exercise, conversion or exchange price thereof. If the 2015 Financing is consummated by means of more than one closing, Spartan shall be entitled to the fees provided herein with respect to each such closing. (See Note 8 sale of common stock). Along with the above fees, the Company shall pay (i) $15,000 engagement fees upon execution of the agreement, (ii) 3% of the gross proceeds raised for expenses incurred by Spartan in connection with this Financing, together with cost of background checks on the officers and directors of the Company, (iii) a monthly fee of $10,000 for 4 months for the period commencing October 1, 2015 through January 1, 2016; and contingent upon Spartan successfully raising $2.0 million under the 2015 Financing (iv) a monthly fee of $5,000 for 6 months for the period commencing September 1, 2016 through February 1, 2017; (v) a monthly fee of $7,500 for 6 months for the period commencing March 1, 2017 through August 1, 2017; (vi) a monthly fee of $10,000 for 12 months for the period commencing September 1, 2017 through August 1, 2018; (vii) a monthly fee of $13,700 for 12 months for the period commencing September 1, 2018 through August 1, 2019. The obligation to pay the monthly fee shall survive any termination of this agreement. As of September 30, 2019 and December 31, 2018, Spartan was owed fees of $292,250 and $292,250, respectively. Equity Financing Agreements On May 1, 2019, the Company entered into an Equity Financing Agreement with GHS Investments LLC (“GHS”) for an equity line. Although the Company is not required to sell shares under the Equity Financing Agreement, the Equity Financing Agreement gives the Company the option at its discretion to sell to GHS up to $4,000,000 worth of common stock, in increments, over the period ending on the earlier of (i) the date GHS has purchased an aggregate of $4,000,000 of our common stock pursuant to the Equity Financing Agreement, or (ii) the date that this registration statement is no longer in effect (the “Open Period”). The Company did not pay, and is not obligated to pay, GHS any amounts (in cash, shares of stock, or otherwise) as a commitment fee. During the Open Period, the Company may, in its sole discretion, deliver a put notice (“Put Notice”) to GHS which shall state the dollar amount the Company intends to sell to GHS on a designated closing date (the “Put Amount”). The purchase price of the common stock pursuant to a Put Notice will be set at the lowest closing price of the common stock during the ten consecutive trading day period immediately preceding the date on which the Company delivers the Put Notice to GHS (the “Market Price”). The Company is obligated to deliver a number of shares to GHS equal to Put Amount divided by the Market Price, along with an additional 20% share premium (15% as “Issuance Discount” shares and 5% as “Transaction Costs” shares pursuant to the Financing Agreement terms). Litigation On January 26, 2018, the Company and one of its historical clients executed a Settlement Agreement, pursuant to which the Company is obligated to remediate a track which was improperly installed by one of the Company’s subcontractors. No later the July 15, 2018, the Company was obligated to complete installment of a replacement track which is of the same or comparable specifications as in the original contract. Upon completion of the installation, the client is obligated to release from escrow a retainage amount of $110,000. During construction, the Company’s insurance company was obligated to release from escrow funds to cover the expected construction costs of $370,000; the remediation will be entirely funded with insurance proceeds. This remediation work has been completed. On July 25, 2018, two note holders filed suit against the Company in the New York State Supreme Court, County of New York. The suit alleges that, as of July 24, 2018, the Company owes the plaintiffs a total amount of $466,177, which is inclusive of principal and interest. The plaintiffs filed a Motion for Summary Judgment in Lieu of Complaint and asked that judgment be entered against the Company. As of November 8, 2018, the outstanding principal was $351,810 and accrued unpaid interest as $124,524, totaling $476,334. On November 8, 2018, the Note Holder Plaintiffs and the Company executed a Settlement Agreement pursuant to which the Note Holder Plaintiffs agreed to a full release and wavier of their claims, including but not limited to, dismissal with prejudice of the suit in exchange for (a) an initial payment of $250,000, and (b) promissory notes in the total amount of $150,000, payable over twenty-four (24) months, with interest at nine percent (9%) per annum. With respect to this Settlement Agreement, the Company recorded forgiveness of indebtedness income of $76,334. As security for the two promissory notes, the Company will place 850,000 shares of common stock into an escrow account (“Escrow”). In the event the Company does not make timely payments under the promissory notes, upon written notice and after expiration of a cure period, the escrow agent shall release from Escrow shares of common stock with a value equal to the missed installment payment or payments plus accrued interest on that payment or payments. The number of shares so issued shall be determined by dividing the amount of the past due installment payment by the volume-weighted average price of the Company’s common stock for the last five trading days preceding the due date of the installment payment. With respect to the common stock held in Escrow, Note Holder Plaintiffs do not have any shareholder rights, including but not limited to voting, dividend or ownership rights. Upon full performance of the promissory notes, all shares of common stock still remaining in Escrow shall revert back to the Company as treasury shares. Given that the Company is experiencing financial difficulties and the Note Holder Plaintiffs granted a concession by accepting total payments of $400,000 for the remaining balance of the principal and interest due, the Company accounted for such transactions as a troubled debt restructuring and recognized a total gain of $76,336 from the debt settlement. The gain on troubled debt restructuring was $0.00 per share. On March 27, 2019 the Company entered into a mutual general release and settlement agreement (the “Settlement Agreement”) with the former employee. Pursuant to the Settlement Agreement, the Company agreed to pay the former employee $69,000, payable in three equal installments of $23,000 on March 31, June 28 and September 30, 2019 (the “Settlement Amount”). The Settlement Agreement also contains a general release by the former employee of the Company relating to the Claim, such release however is predicated on the Company making payments pursuant to the Settlement Agreement. As of the date of this filing, the outstanding balance on this obligation was $0. On April 5, 2019, Spartan Capital Securities, LLC, an investment banker (“Spartan Capital”), filed a Demand for Arbitration with the American Arbitration Association (New York, New York; case no. 01-19-0001-0700). Spartan Capital alleges the Company owes various service fees and commissions, which the Company disputes both to legitimacy and amount. This arbitration is subject to inherent uncertainties, and an adverse result may arise that could harm our business. No assurance can be given that the Company will be able to resolve this matter or the timing of any such resolution. Upon information and belief, in October 2016, a high school student was injured while playing a school-sanctioned football game on a field installed by the Company. On or about April 17, 2019, the student filed suit in the Circuit Court for Baltimore City, Tyree Henry, et al. v. Sports Field Holdings, Inc., et al. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and disclosures required by GAAP for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the condensed financial position of the Company as of September 30, 2019, and the results of operations for the nine months ended September 30, 2019. The results of operations for the nine ended September 30, 2019 are not necessarily indicative of the operating results for the full year ending December 31, 2019 or any other period. The condensed consolidated balance sheet as of December 31, 2018, has been derived from audited financial statements but does not include all information required by GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related disclosures of the Company as of December 31, 2018 and for the year then ended, which were filed with the Securities and Exchange Commission (“SEC”) on Form 10-K on April 16, 2019. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Sports Field Holdings, Inc. and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. The Company’s significant estimates and assumptions include the accounts receivable allowance for doubtful accounts, warranty reserve, percentage of completion revenue recognition method, assumptions used in the fair value of stock-based compensation, valuation of derivative liabilities and the valuation allowance relating to the Company’s deferred tax assets. |
Revenues and Cost Recognition | Revenues and Cost Recognition Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue. The Company generates revenue from fixed-price contracts, where revenue is recognized over time as work is completed because of the continuous transfer of control to the customer (typically using an input measure such as costs incurred to date relative to total estimated costs at completion to measure progress). Costs to obtain contracts are generally not significant and are expensed in the period incurred. The Company has determined that these construction projects provide a distinct service and therefore qualify as one performance obligation. Revenue from fixed-price contracts provide for a fixed amount of revenue for the entire project, and any changes to the scope of the project is addressed in a change order, which is treated as a modification of the original contract. To determine the proper revenue recognition method for contracts, the Company evaluates whether two or more contracts should be combined and accounted for as one single performance obligation and whether a single contract should be accounted for as more than one performance obligation. ASU 2014-09 defines a performance obligation as a contractual promise to transfer a distinct good or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s evaluation requires judgment and the decision to combine a group of contracts or separate a contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. To date, all of the Company’s contracts have a single performance obligation, as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contract and, therefore, is not distinct. However, if in the future the Company has contracts with multiple performance obligations, then the Company will allocate the contract’s transaction price to each performance obligation using the observable standalone selling price, if available, or alternatively the Company’s best estimate of the standalone selling price of each distinct performance obligation in the contract. Accounting for contracts involves the use of various techniques to estimate total transaction price and costs. For such contracts, transaction price, estimated cost at completion and total costs incurred to date are used to calculate revenue earned. Unforeseen events and circumstances can alter the estimate of the costs and potential profit associated with a particular contract. Total estimated costs, and thus contract revenue and income, can be impacted by changes in productivity, scheduling, the unit cost of labor, subcontracts, materials and equipment. Additionally, external factors such as weather, client needs, client delays in providing permits and approvals, labor availability, governmental regulation and politics may affect the progress of a project’s completion and thus the timing of revenue recognition. To the extent that original cost estimates are modified, estimated costs to complete increase, delivery schedules are delayed, or progress under a contract is otherwise impeded, cash flow, revenue recognition and profitability from a particular contract may be adversely affected. The nature of the Company’s contracts do not have variable consideration, such as liquidated damages, volume discounts, performance bonuses, incentive fees, and other terms that can either increase or decrease the transaction price. In contrast, the contracts are often modified to account for changes in contract specifications or requirements. Costs associated with contract modifications are included in the estimated costs to complete the contracts and are treated as project costs when incurred. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract. The effect of a contract modification on the transaction price, and the measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue on a cumulative catch-up basis. In some cases, settlement of contract modifications may not occur until after completion of work under the contract. As a significant change in one or more of these estimates could affect the profitability of its contracts, the Company reviews and updates its contract-related estimates regularly. The Company recognizes adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the cumulative impact of the profit adjustment is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on a contract, the projected loss is recognized in full in the period it is identified and recognized as an “Provision for Estimated Losses on Uncompleted Contracts” which is included in “Contract liabilities” on the Condensed Consolidated Balance Sheets. For contract revenue recognized over time, the Provision for Estimated Losses on Uncompleted Contracts is adjusted so that the gross profit for the contract remains zero in future periods. The Company estimates the collectability of contract amounts at the same time that it estimates project costs. If the Company anticipates that there may be issues associated with the collectability of the full amount calculated as the transaction price, the Company may reduce the amount recognized as revenue to reflect the uncertainty associated with realization of the eventual cash collection. The timing of when the Company bills its customers is generally dependent upon agreed-upon contractual terms, milestone billings based on the completion of certain phases of the work, or when services are provided. Sometimes, billing occurs subsequent to revenue recognition, resulting in unbilled revenue, which is a contract asset. However, the Company sometimes receives advances or deposits from its customers before revenue is recognized, resulting in deferred revenue, which is a contract liability. For the three-months and nine-months ended September 30, 2019 and 2018, revenues from contracts with customers is summarized by product category were as follows: Three Months Three Months Nine Months Nine Months 30-Sept-19 30-Sept-18 30-Sept-19 30-Sept-18 Product Category Athletic fields and tracks $ 253,123 $ 1,965,478 $ 3,207,075 $ 3,745,710 Vertical construction 11,716 1,111,811 560,773 1,456,254 Totals $ 264,840 $ 3,077,289 $ 3,767,849 $ 5,201,964 “Athletic fields and tracks” relates to the design, engineering and construction of outdoor playing fields, running tracks and related works, stadiums, scoreboards, dug outs, base and drainage work, and similar projects, while “Vertical construction” relates to the design, engineering and construction of an entire facility such as a dormitory, athletics facility, gymnasium, or a similar general construction project. |
Inventory | Inventory Inventory is stated at the lower of cost (first-in, first out) or net realizable value and consists primarily of construction materials. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets, which generally range from 3 to 5 years. Leasehold improvements are amortized over the remaining life of the lease. Gains and losses from the retirement or disposition of property and equipment are included in operations in the period incurred. Maintenance and repairs are expensed as incurred. |
Leases | Leases The Company has elected not to value the ROU asset or liability due to the immaterial amount of the lease and the expense will be recorded on a straight-line basis until the end of the lease. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carry-forwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The differences relate primarily to net operating loss carryforward from date of acquisition and to the use of the cash basis of accounting for income tax purposes. The Company records an estimated valuation allowance on its deferred income tax assets if it is more likely than not that these deferred income tax assets will not be realized. The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company has not recorded any unrecognized tax benefits. |
Stock-Based Compensation | Stock-Based Compensation The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on vesting dates and interim financial reporting dates until the service period is complete. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Awards granted to directors are treated on the same basis as awards granted to employees. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such amounts may be in excess of the FDIC insurance limit. There were no concentrations of credit risk as September 30, 2019 and December 31, 2018. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable, net of the allowance for doubtful accounts. At September 30, 2019 and December 31, 2018, the allowance for doubtful accounts was $0, respectively. |
Research and Development | Research and Development Research and development expenses are charged to operations as incurred. |
Warranty Costs | Warranty Costs The Company generally provides a warranty on the products installed for up to 8 years with certain limitations and exclusions based upon the manufacturer’s product warranty. The Company’s subcontractors provide a one (1) year warranty to the Company against defects in material or workmanship. The Company has accrued a warranty reserve of $50,000 and $50,000 as of September 30, 2019 and December 31, 2018, respectively which is included in accounts payable and accrued expenses on the consolidated balance sheets. See Note 4 for warranty expenses incurred during for the nine and three months ended September 30, 2019 and 2018. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows ASC 820-10 of the FASB Accounting Standards Codification to measure the fair value of its financial instruments and disclosures about fair value of its financial instruments. ASC 820-10 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by ASC 820-10 are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, inventory, prepaid expenses and other current assets, accounts payable and accrued expenses, and certain notes payable approximate their fair values because of the short maturity of these instruments. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. The Company’s Level 3 financial liabilities consist of the derivative conversion feature on a convertible note issued in 2016. The Company valued the conversion features using a Black Scholes model. These models incorporate transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, and volatility as of the date of issuance and each balance sheet date. The Company utilized the following management assumptions in valuing the derivative conversion feature at September 30, 2019 and December 31, 2018: 30-Sept-19 31-Dec-18 Exercise price $ 0.18 $ 0.38 Expected dividends 0 % 0 % Expected volatility 38.6 % 43.06 % Risk fee interest rate 2.16 % 2.63 % Term 1-year 1 year |
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis | Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative liability at every reporting period and recognizes gains or losses in the statements of operations that are attributable to the change in the fair value of the derivative liability. Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheets as follows: Carrying Fair Value Measurement Using As of September 30, 2019 Value Level 1 Level 2 Level 3 Total Derivative conversion feature on convertible note $ 131,664 $ - $ - $ 131,664 $ 131,664 Carrying Fair Value Measurement Using As of December 31, 2018 Value Level 1 Level 2 Level 3 Total Derivative conversion feature on convertible note $ 131,100 $ - $ - $ 131,100 $ 131,100 The unobservable level 3 inputs used by the Company was the expected volatility assumption used in the option pricing model. Expected volatility is based on the historical stock price volatility of comparable companies’ common stock, as our stock does not have sufficient historical trading activity. The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the period December 31, 2018 through September 30, 2019: Fair Value Measurement Using Level 3 Inputs Derivative conversion feature on convertible note Total Balance, December 31, 2017 84,200 84,200 Change in fair value 46,900 46,900 Balance, December 31, 2018 131,100 131,100 Change in fair value 564 564 Balance, September 30, 2019 $ 131,664 $ 131,664 Changes in the unobservable input values could potentially cause material changes in the fair value of the Company’s Level 3 financial instruments. The significant unobservable inputs used in the fair value measurements is the expected volatility assumption. A significant increase (decrease) in the expected volatility assumption could potentially result in a higher (lower) fair value measurement. |
Beneficial Conversion Feature | Beneficial Conversion Feature For conventional convertible debt where the rate of conversion is below market value, the Company records a “beneficial conversion feature” (“BCF”) and related debt discount. When the Company records a BCF the intrinsic value of the BCF would be recorded as a debt discount against the face amount of the respective debt instrument. The debt discount attributable to the BCF is amortized over the period from issuance to the date that the debt matures. Own-Share Lending Arrangements At the date of issuance, any own share-lending arrangement entered into on the Company’s shares in contemplation of a convertible debt offering or other financing is measured at fair value and recognized as an issuance cost with an offset to additional paid-in capital. If it becomes probable that the Company will default, the Company will recognize an expense equal to the then fair value of the unreturned shares, net of the fair value of probable recoveries, with an offset to additional paid-in capital. Loaned shares are excluded from basic and diluted earnings per share unless default of the share-lending arrangement occurs, at which time the loaned shares would be included in the basic and diluted earnings-per-share calculation. |
Derivative Instruments | Derivative Instruments The Company evaluates its convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815-15. The result of this accounting treatment is that the fair value of the embedded 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 statements of operations as other income or expense. 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. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. |
Net Loss Per Common Share | Net Loss Per Common Share The Company computes basic net loss per share by dividing net loss per share available to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods as applicable. The computation of basic and diluted loss per share excludes potentially dilutive securities because their inclusion would be anti-dilutive. Anti-dilutive securities excluded from the computation of basic and diluted net loss per share for the nine months ended September 30, 2019 and 2018, respectively, are as follows: 30-Sept-19 30-Sept-18 Warrants 183,338 679,588 Options 1,947,500 1,597,500 Convertible Notes 4,818,064 2,335,730 Totals 6,948,902 4,612,818 |
Significant Customers | Significant Customers The Company’s business focuses on securing a smaller number of high quality, highly profitable projects, which sometimes results in having a concentration of sales and accounts receivable among a few customers. This concentration is customary among the design and build industry for a company of our size. As we continue to grow and are awarded more projects, this concentration will continue to decrease. For the nine months ended September 30, 2019, the Company had 3 customers representing 14.9%, 22.5% and 35.0% of revenue, respectively. For the nine months ended September 30, 2018, the Company had customers representing 26%, 19%, 18%, 15% and 12% of revenue. For the three months ended September 30, 2019, the Company had 1 customer representing 94.3% of revenue, respectively. For the three months ended September 30, 2018, the Company had customers representing 32%, 30%, 22% and 12% of revenue. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), (“ASU 2016-02”) and issued subsequent amendments to the initial guidance. This ASU requires an entity to recognize a right-of-use asset (“ROU”) and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. Similar modifications have been made to lessor accounting in-line with revenue recognition guidance. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard is effective for the Company on January 1, 2019, with early adoption permitted. The Company has a single lease for $ 1,367 per month for office space, which lease expires in 2020. Accordingly, the Company has elected not to value the ROU asset or liability due to the immaterial amount of this lease and the expense will be recorded on a straight-line basis until the end of the lease. In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (ASC 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 simplifies the accounting for nonemployee share-based payment transactions. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The new standard will become effective for the Company beginning January 1, 2019, with early adoption permitted. The Company adopted ASU 2018-07 effective January 1, 2019 and it did not have a material impact on its financial statements. In August 2018, the FASB issue ASU 2018-13, Fair Value Measurement (ASC 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The new standard will become effective for the Company January 1, 2020, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures. |
Subsequent Events | Subsequent Events Management has evaluated subsequent events or transactions occurring through the date on which the financial statements were issued. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Revenue from Contracts with Customers | For the three-months and nine-months ended September 30, 2019 and 2018, revenues from contracts with customers is summarized by product category were as follows: Three Months Three Months Nine Months Nine Months 30-Sept-19 30-Sept-18 30-Sept-19 30-Sept-18 Product Category Athletic fields and tracks $ 253,123 $ 1,965,478 $ 3,207,075 $ 3,745,710 Vertical construction 11,716 1,111,811 560,773 1,456,254 Totals $ 264,840 $ 3,077,289 $ 3,767,849 $ 5,201,964 |
Schedule of Assumptions in Valuing Derivative Conversion Feature | The Company utilized the following management assumptions in valuing the derivative conversion feature at September 30, 2019 and December 31, 2018: 30-Sept-19 31-Dec-18 Exercise price $ 0.18 $ 0.38 Expected dividends 0 % 0 % Expected volatility 38.6 % 43.06 % Risk fee interest rate 2.16 % 2.63 % Term 1-year 1 year |
Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheets as follows: Carrying Fair Value Measurement Using As of September 30, 2019 Value Level 1 Level 2 Level 3 Total Derivative conversion feature on convertible note $ 131,664 $ - $ - $ 131,664 $ 131,664 Carrying Fair Value Measurement Using As of December 31, 2018 Value Level 1 Level 2 Level 3 Total Derivative conversion feature on convertible note $ 131,100 $ - $ - $ 131,100 $ 131,100 |
Summary of Changes in Fair Value Including Net Transfers In and Out of all Financial Assets and Liabilities Measured on Recurring Basis | The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the period December 31, 2018 through September 30, 2019: Fair Value Measurement Using Level 3 Inputs Derivative conversion feature on convertible note Total Balance, December 31, 2017 84,200 84,200 Change in fair value 46,900 46,900 Balance, December 31, 2018 131,100 131,100 Change in fair value 564 564 Balance, September 30, 2019 $ 131,664 $ 131,664 |
Schedule of Anti-dilutive Securities Excluded from Computation of Basic and Diluted Net Loss Per Share | Anti-dilutive securities excluded from the computation of basic and diluted net loss per share for the nine months ended September 30, 2019 and 2018, respectively, are as follows: 30-Sept-19 30-Sept-18 Warrants 183,338 679,588 Options 1,947,500 1,597,500 Convertible Notes 4,818,064 2,335,730 Totals 6,948,902 4,612,818 |
Costs and Estimated Earnings _2
Costs and Estimated Earnings on Contracts in Process (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Contractors [Abstract] | |
Summary of Costs, Billings, and Estimated Earnings on Contracts in Process | Following is a summary of costs, billings, and estimated earnings on contracts in process as of September 30, 2019 and December 31, 2018: 30-Sept-19 31-Dec-18 Costs incurred on contracts in progress $ 22,251,141 $ 19,817,415 Estimated earnings (losses) 1,195,138 378,469 23,446,279 19,438,946 Less billings to date (25,011,881 ) (21,287,808 ) $ (1,565,602 ) $ (1,848,862 ) |
Schedule of Accounts Shown in Accompanying Consolidated Balance Sheet Under These Captions | Contract assets consist of the following: 30-Sept-19 31-Dec-18 Costs and Estimated Earnings in Excess of Billings $ 1,154,807 $ 363,396 |
Schedule of Costs and Estimated Earnings Included in Balance Sheet | Contract liabilities consist of the following: 30-Sept-19 31-Dec-18 Billings in Excess of Costs and Estimated Earnings $ 2,684,395 $ 1,961,580 Provision for Estimated Losses on Uncompleted Contracts 36,014 250,678 Contract Liabilities $ 2,720,409 $ 2,212,258 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Depreciation expense for the nine months ended September 30, 2019 and 2018 was $15,058 and $2,704, respectively. 30-Sept-19 31-Dec-18 Furniture and equipment $ 19,803 $ 20,278 Leasehold improvements 24,292 24,292 Total 44,095 44,570 Less: accumulated depreciation (39,586 ) (25,003 ) $ 4,509 $ 19,567 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Future Lease Payments for Operating Leases | Future lease payments for the years ended December 31 are as follows: 2019 (remaining) $ 4,306 2020 18,085 Total $ 22,391 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Future Maturities of Debt | For the years ending September 30 2019 $ 1,066,417 2020 1,062,247 2021 134,000 Total $ 2,262,664 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of Black-Scholes Option Pricing Model to Options Granted in Weighted Average Assumptions | The Company uses the Black-Scholes option pricing model to determine the fair value of the options granted. In applying the Black-Scholes option pricing model to options granted, the Company used the following weighted average assumptions: For the Ended 30 September 2019 For the Risk free interest rate 2.52-2.76 % 2.32-2.75 % Dividend yield 0 % 0 % Expected volatility 42-43 % 41-44 % Expected life in years 5.0-11.0 3.5-5.0 Forfeiture Rate 0 % 0 % |
Schedule of Stock Option Activity | The following is a summary of the Company’s stock option activity for the year ended December 31, 2018 and the nine months ended September 30, 2019: Number of Weighted Average Exercise Price Weighted Average Remaining Contractual Life Outstanding – December 31, 2017 1,297,500 $ 1.14 3.34 Exercisable – December 31, 2017 1,180,000 1.21 3.23 Granted 400,000 0.86 5.00 Exercised - - - Forfeited/Cancelled - - - Outstanding – December 31, 2018 1,697,500 1.05 3.14 Exercisable– December 31, 2018 1,697,500 1.05 3.14 Granted 650,000 0.14 9.98 Exercised - - - Forfeited/Cancelled (400,000 ) 0.35 - Outstanding - September 30, 2019 1,947,500 0.90 2.27 Exercisable - September 30, 2019 1,647,500 0.87 2.19 |
Significant Accounting Polici_4
Significant Accounting Policies (Details Narrative) - USD ($) | Jan. 02, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Income tax examination, likelihood of unfavorable settlement | greater than 50% likelihood | |||||
Allowance for doubtful accounts | $ 0 | $ 0 | $ 0 | |||
Warranty costs, description | The Company generally provides a warranty on the products installed for up to 8 years with certain limitations and exclusions based upon the manufacturer's product warranty. The Company's subcontractors provide an 8 year warranty to the Company against defects in material or workmanship. | |||||
Accrued warranty reserve | $ 50,000 | $ 50,000 | $ 50,000 | |||
ASU 2016-02 [Member] | ||||||
Payment for rent | $ 1,367 | |||||
Lease expiration year | 2020 | |||||
Sales Revenue, Net [Member] | Customer One [Member] | ||||||
Concentration of credit risk percentage | 14.90% | 32.00% | 26.00% | |||
Sales Revenue, Net [Member] | Customer Two [Member] | ||||||
Concentration of credit risk percentage | 22.50% | 30.00% | 19.00% | |||
Sales Revenue, Net [Member] | Customer Three [Member] | ||||||
Concentration of credit risk percentage | 35.00% | 22.00% | 18.00% | |||
Sales Revenue, Net [Member] | Customer Four [Member] | ||||||
Concentration of credit risk percentage | 12.00% | 15.00% | ||||
Sales Revenue, Net [Member] | Customer Five [Member] | ||||||
Concentration of credit risk percentage | 12.00% | |||||
Sales Revenue, Net [Member] | Customer [Member] | ||||||
Concentration of credit risk percentage | 94.30% | |||||
Minimum [Member] | ||||||
Estimated useful lives | 3 years | |||||
Maximum [Member] | ||||||
Estimated useful lives | 5 years |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule of Revenue from Contracts with Customers (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Totals | $ 264,840 | $ 3,077,289 | $ 3,767,849 | $ 5,201,964 |
Athletic Fields and Tracks [Member] | ||||
Totals | 253,123 | 1,965,478 | 3,207,075 | 3,745,710 |
Vertical Construction [Member] | ||||
Totals | $ 11,716 | $ 1,111,811 | $ 560,773 | $ 1,456,254 |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Assumptions in Valuing Derivative Conversion Feature (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019$ / shares | Dec. 31, 2018$ / shares | |
Exercise Price [Member] | ||
Derivative liability, measurement input | 0.18 | 0.38 |
Expected Dividends [Member] | ||
Derivative liability, measurement input | 0 | 0 |
Expected Volatility [Member] | ||
Derivative liability, measurement input | 0.386 | 0.4306 |
Risk Free Interest Rate [Member] | ||
Derivative liability, measurement input | 0.0216 | 0.0263 |
Term [Member] | ||
Derivative liability, term | 1 year | 1 year |
Significant Accounting Polici_7
Significant Accounting Policies - Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Significant Accounting Policies [Line Items] | ||
Derivative conversion feature on convertible note | $ 131,664 | $ 131,100 |
Carrying Value [Member] | ||
Significant Accounting Policies [Line Items] | ||
Derivative conversion feature on convertible note | 131,664 | 131,100 |
Level 1 [Member] | ||
Significant Accounting Policies [Line Items] | ||
Derivative conversion feature on convertible note | ||
Level 2 [Member] | ||
Significant Accounting Policies [Line Items] | ||
Derivative conversion feature on convertible note | ||
Level 3 [Member] | ||
Significant Accounting Policies [Line Items] | ||
Derivative conversion feature on convertible note | $ 131,664 | $ 131,100 |
Significant Accounting Polici_8
Significant Accounting Policies - Summary of Changes in Fair Value Including Net Transfers In and Out of all Financial Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Significant Accounting Policies [Line Items] | ||
Beginning, Balance | $ 131,100 | $ 84,200 |
Change in fair value | 564 | 46,900 |
Ending, Balance | 131,664 | 131,100 |
Level 3 [Member] | Derivative [Member] | ||
Significant Accounting Policies [Line Items] | ||
Beginning, Balance | 131,100 | 84,200 |
Change in fair value | 564 | 46,900 |
Ending, Balance | $ 131,664 | $ 131,100 |
Significant Accounting Polici_9
Significant Accounting Policies - Schedule of Anti-dilutive Securities Excluded from Computation of Basic and Diluted Net Loss Per Share (Details) - shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Totals | 6,948,902 | 4,612,818 |
Warrants [Member] | ||
Totals | 183,338 | 679,588 |
Options [Member] | ||
Totals | 1,947,500 | 1,597,500 |
Convertible Notes [Member] | ||
Totals | 4,818,064 | 2,335,730 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Working capital deficit | $ (8,757,699) | $ (8,757,699) | |||||||
Net loss | (796,980) | $ (415,565) | $ (90,026) | $ (1,107,385) | $ (471,953) | $ (571,850) | (1,302,571) | $ (2,151,188) | |
Accumulated deficit | $ (20,869,101) | (20,869,101) | $ (19,566,530) | ||||||
Operating cash burn | 2,300,000 | ||||||||
Repayments of existing debts | $ 1,100,000 |
Costs and Estimated Earnings _3
Costs and Estimated Earnings on Contracts in Process (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Contractors [Abstract] | |||
Contract assets increased | $ 791,411 | $ 298,759 | |
Contract liabilities increased due to billings in excess of costs | 508,151 | 808,257 | |
Warranty cost | $ 0 | $ 0 | |
Warranty description | The Company generally provides a warranty on the products installed for up to 8 years with certain limitations and exclusions based upon the manufacturer's product warranty. The Company's subcontractors provide an 8 year warranty to the Company against defects in material or workmanship. | ||
Accrued warranty reserve | $ 50,000 | $ 50,000 |
Costs and Estimated Earnings _4
Costs and Estimated Earnings on Contracts in Process - Summary of Costs, Billings, and Estimated Earnings on Contracts in Process (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Contractors [Abstract] | ||
Costs incurred on contracts in progress | $ 22,251,141 | $ 19,817,415 |
Estimated earnings (losses) | 1,195,138 | 378,469 |
Costs and estimated earnings (losses) incurred on contracts in progress | 23,446,279 | 19,438,946 |
Less billings to date | (25,011,881) | (21,287,808) |
Cost in excess of billing on contracts in process, net | $ (1,565,602) | $ (1,848,862) |
Costs and Estimated Earnings _5
Costs and Estimated Earnings on Contracts in Process - Schedule of Accounts Shown in Accompanying Consolidated Balance Sheet Under These Captions (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Contractors [Abstract] | ||
Costs and Estimated Earnings in Excess of Billings | $ 1,154,807 | $ 363,396 |
Costs and Estimated Earnings _6
Costs and Estimated Earnings on Contracts in Process - Schedule of Costs and Estimated Earnings Included in Balance Sheet (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Contractors [Abstract] | ||
Billings in Excess of Costs and Estimated Earnings | $ 2,684,395 | $ 1,961,580 |
Provision for Estimated Losses on Uncompleted Contracts | 36,014 | 250,678 |
Contract Liabilities | $ 2,720,409 | $ 2,212,258 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 5,596 | $ 1,014 | $ 15,058 | $ 2,704 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 44,095 | $ 44,570 |
Less: accumulated depreciation | (39,586) | (25,003) |
Property, plant and equipment, net | 4,509 | 19,567 |
Furniture and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 19,803 | 20,278 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 24,292 | $ 24,292 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | Jan. 02, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Percentage of increase in minimum monthly payments | 5.00% | ||
New Lease Agreement [Member] | |||
Lease expiration date | Dec. 31, 2020 | ||
Minimum monthly lease payments | $ 1,367 | ||
Operating lease, description | The minimum monthly payment shall increase by the lesser of CPI or 5%. | ||
Rental expense | $ 1,237 | $ 15,597 |
Leases - Schedule of Future Lea
Leases - Schedule of Future Lease Payments for Operating Leases (Details) | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
2019 (remaining) | $ 4,306 |
2020 | 18,085 |
Total | $ 22,391 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | Sep. 11, 2019 | May 01, 2019 | Mar. 01, 2019 | Nov. 08, 2018 | Jul. 25, 2018 | Apr. 09, 2018 | Mar. 30, 2018 | Oct. 18, 2017 | Aug. 01, 2016 | Aug. 01, 2016 | Jul. 14, 2016 | Feb. 22, 2016 | Feb. 01, 2016 | May 07, 2015 | Nov. 30, 2018 | Dec. 31, 2017 | Dec. 20, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Short-term Debt [Line Items] | |||||||||||||||||||||||
Debt discount related to common stock issued | $ 156,790 | $ 156,790 | |||||||||||||||||||||
Owes plaintiffs amount | $ 466,177 | ||||||||||||||||||||||
Note accrued interest | 378,249 | 378,249 | $ 141,330 | ||||||||||||||||||||
Total operating expenses | 408,268 | $ 846,241 | 1,351,778 | $ 2,103,066 | |||||||||||||||||||
Labrys Fund, LP [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Debt discount related to common stock issued | $ 30,000 | ||||||||||||||||||||||
Genlink Capital LLC [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Aggregate principal amount | $ 670,000 | ||||||||||||||||||||||
Total operating expenses | $ 1,000,000 | ||||||||||||||||||||||
Loan Agreement [Member] | GHS Investments, LLC [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Aggregate principal amount | $ 330,000 | ||||||||||||||||||||||
Notes bear interest rate | 10.00% | ||||||||||||||||||||||
Common stock conversion price per share | $ 0.15 | ||||||||||||||||||||||
Debt discount related to common stock issued | $ 30,000 | 108,333 | 108,333 | ||||||||||||||||||||
Debt interest rate | 10.00% | ||||||||||||||||||||||
Debt instrument, term | 9 months | ||||||||||||||||||||||
Common stock reserved for future | 6,600,000 | ||||||||||||||||||||||
Debt instrument, payment terms | The Company may prepay this loan, in whole or in part, upon three business days written notice and in accordance with the following schedule: (a) If within 60 calendar days from the execution of this loan, 100 % of all outstanding amounts due on each outstanding loan in one or more payments; (b) on or after 60 calendar days from the execution of the loan and within 180 days from execution, 120% of all amounts due on each outstanding loan in one payment or more payments; (c) on or after 180 calendar days from the execution of this loan through maturity date, 100% of all amounts outstanding in one payment or more payments. After five months, the loan is convertible into shares of the Company's common stock at a conversion price equal to shall equal $0.15. | ||||||||||||||||||||||
Beneficial conversion feature | $ 165,000 | ||||||||||||||||||||||
Accretion to remaining debt disount | $ 86,667 | ||||||||||||||||||||||
Loan Agreement [Member] | Labrys Fund, LP [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Aggregate principal amount | $ 296,500 | ||||||||||||||||||||||
Notes bear interest rate | 10.00% | ||||||||||||||||||||||
Debt discount related to common stock issued | $ 33,500 | 22,883 | 22,883 | ||||||||||||||||||||
Shares issued in an offering- net proceeds, share | 1,100,000 | ||||||||||||||||||||||
Legal fees | $ 3,500 | ||||||||||||||||||||||
Debt conversion, description | In the event of default, in addition to other rights and remedies, Labrys may enter a Confession of Judgement against the Company for the outstanding amount due under the convertible note. During the first 180 days of the loan, the Company may prepay the loan in full upon three business days written notice. At any time after issuance, Labrys can convert the outstanding principal amount under the convertible note into shares of the Company’s common stock at a conversion price equal to $0.15, or, if an event of default has occurred, at a conversion price equal at 60% multiplied by the lowest trading price during the prior twenty (20) trading day period. | ||||||||||||||||||||||
Debt interest rate | 10.00% | ||||||||||||||||||||||
Beneficial conversion feature | $ 296,500 | ||||||||||||||||||||||
Accretion to remaining debt disount | 307,117 | ||||||||||||||||||||||
Convertible notes payable | $ 330,000 | ||||||||||||||||||||||
Thirty-Six Month Loan Agreement [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Aggregate principal amount | $ 134,000 | ||||||||||||||||||||||
Notes bear interest rate | 10.00% | ||||||||||||||||||||||
Outstanding principal balance | 134,000 | 134,000 | 0 | ||||||||||||||||||||
Debt conversion, description | In event of default on either the interest or principal payment, the consultant can convert the defaulted amount times 150% into common stock at the average closing price over the prior 10-days. | ||||||||||||||||||||||
Balloon payment | $ 134,000 | ||||||||||||||||||||||
Credit Agreement [Member] | Revolving Note [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Aggregate principal amount | $ 1,000,000 | ||||||||||||||||||||||
Notes bear interest rate | 15.00% | ||||||||||||||||||||||
Maturity date | Jan. 25, 2019 | ||||||||||||||||||||||
Interest amount | $ 75,000 | ||||||||||||||||||||||
Debt interest rate | 15.00% | ||||||||||||||||||||||
Balloon payment | $ 729,167 | ||||||||||||||||||||||
Increase interest rate | 19.00% | ||||||||||||||||||||||
Loan fees | 10,000 | $ 44,500 | |||||||||||||||||||||
Initial payment on note | $ 20,833 | ||||||||||||||||||||||
Settlement Agreement [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Aggregate principal amount | $ 150,000 | ||||||||||||||||||||||
Notes bear interest rate | 9.00% | ||||||||||||||||||||||
Aggregate shares of common stock assigned | 850,000 | ||||||||||||||||||||||
Initial payment on note | $ 250,000 | ||||||||||||||||||||||
Eighteen-Month Loan Agreement [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Aggregate principal amount | $ 50,000 | $ 250,000 | |||||||||||||||||||||
Notes bear interest rate | 8.00% | 8.00% | |||||||||||||||||||||
Maturity date | Oct. 30, 2019 | Dec. 31, 2019 | |||||||||||||||||||||
Outstanding principal balance | 208,333 | 208,333 | 208,333 | ||||||||||||||||||||
Eighteen-Month Loan Agreement One [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Outstanding principal balance | 45,833 | 45,833 | 45,833 | ||||||||||||||||||||
Promissory Notes [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Outstanding principal balance | 351,810 | 1,125,000 | 1,125,000 | 1,125,000 | |||||||||||||||||||
Note accrued interest | 124,524 | $ 198,053 | $ 198,053 | 35,579 | |||||||||||||||||||
Convertible notes payable | 476,334 | ||||||||||||||||||||||
First Waiver [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Notes bear interest rate | 9.00% | ||||||||||||||||||||||
Maturity date | Jul. 1, 2016 | ||||||||||||||||||||||
Common stock conversion price per share | $ 1 | ||||||||||||||||||||||
Shares issued in an offering- net proceeds, share | 45,000 | ||||||||||||||||||||||
Interest amount | $ 40,500 | ||||||||||||||||||||||
Debt conversion, description | On any Note conversion after July 1, 2016, the Notes are convertible into shares of the Company's common stock at a conversion price that is the lower of (i) $1.00 per share and (ii) the volume-weighted average price for the last five trading days preceding the conversion date. All remaining terms of the Notes remained the same. | ||||||||||||||||||||||
First Waiver [Member] | Minimum [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Outstanding principal balance | $ 450,000 | ||||||||||||||||||||||
First Waiver [Member] | Maximum [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Outstanding principal balance | $ 490,500 | ||||||||||||||||||||||
Convertible Notes Payable [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Aggregate principal amount | $ 450,000 | ||||||||||||||||||||||
Notes bear interest rate | 9.00% | ||||||||||||||||||||||
Maturity date | Feb. 1, 2016 | ||||||||||||||||||||||
Common stock, offering of securities | $ 2,000,000 | ||||||||||||||||||||||
Common stock conversion price per share | $ 1 | $ 1 | $ 1 | ||||||||||||||||||||
Aggregate shares of common stock assigned | 45,000 | ||||||||||||||||||||||
Debt discount related to common stock issued | $ 45,000 | ||||||||||||||||||||||
Shares issued in an offering- net proceeds, share | 45,000 | ||||||||||||||||||||||
Placement agent fees | $ 22,500 | ||||||||||||||||||||||
Legal fees | $ 22,500 | ||||||||||||||||||||||
Convertible Notes Payable [Member] | Glenn Tilley [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Aggregate principal amount | $ 170,857 | $ 170,857 | 170,857 | ||||||||||||||||||||
Notes bear interest rate | 15.00% | ||||||||||||||||||||||
Common stock conversion price per share | $ 1 | $ 1 | |||||||||||||||||||||
Debt conversion, description | The Note is convertible into shares of the Company's common stock at a conversion price equal to the lower of i) $1.00 per share and ii) 65% of the volume-weighted average price for the last twenty trading days preceding the conversion date. | ||||||||||||||||||||||
Convertible Notes Payable [Member] | Letter Agreement [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Repayments of debt | $ 200,000 | ||||||||||||||||||||||
Convertible Notes Payable [Member] | One Note Holder [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Aggregate principal amount | $ 15,000 | $ 15,000 | |||||||||||||||||||||
Notes bear interest rate | 15.00% | ||||||||||||||||||||||
Maturity date | Jan. 1, 2017 | ||||||||||||||||||||||
Common stock conversion price per share | $ 1 | $ 1 | |||||||||||||||||||||
Shares issued in an offering- net proceeds, share | 40,000 | ||||||||||||||||||||||
Debt conversion, description | on any note conversion date from August 9, 2016 through January 1, 2017, the Note is convertible into shares of the Company's common stock at a conversion price of $1.00 per share. On any Note conversion after January 1, 2017, the Note is convertible into shares of the Company's common stock at a conversion price that is the lower of (i) $1.00 per share and (ii) the volume-weighted average price for the last five trading days preceding the conversion date. | ||||||||||||||||||||||
Accrued interest | $ 9,810 | ||||||||||||||||||||||
Convertible Notes Payable [Member] | Minimum [Member] | One Note Holder [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Aggregate principal amount | $ 218,000 | 218,000 | |||||||||||||||||||||
Convertible Notes Payable [Member] | Maximum [Member] | One Note Holder [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Aggregate principal amount | $ 242,810 | $ 242,810 | |||||||||||||||||||||
February 2016 Note [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Aggregate principal amount | $ 170,000 | ||||||||||||||||||||||
Common stock, offering of securities | $ 1,500 | ||||||||||||||||||||||
Common stock conversion price per share | $ 1 | ||||||||||||||||||||||
Aggregate shares of common stock assigned | 16,901 | ||||||||||||||||||||||
Outstanding principal balance | $ 168,500 | $ 168,500 | 168,500 | ||||||||||||||||||||
Debt conversion, description | The Note is convertible into shares of the Company's common stock at a conversion price equal to the lower of i) $1.00 per share and ii) 65% of the volume-weighted average price for the last twenty trading days preceding the conversion date. | ||||||||||||||||||||||
Accrued interest | $ 1,748 | ||||||||||||||||||||||
Note accrued interest | 58,195 | 58,195 | 37,913 | ||||||||||||||||||||
Promissory Notes [Member] | |||||||||||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||||||||||
Aggregate principal amount | $ 1,125,000 | ||||||||||||||||||||||
Notes bear interest rate | 15.00% | ||||||||||||||||||||||
Maturity date | Nov. 25, 2020 | ||||||||||||||||||||||
Shares issued in an offering- net proceeds, share | 970,000 | ||||||||||||||||||||||
Outstanding principal balance | 115,517 | 115,517 | 144,272 | ||||||||||||||||||||
Note accrued interest | $ 4,884 | $ 4,884 | $ 653 | ||||||||||||||||||||
Balloon payment | $ 592,000 | ||||||||||||||||||||||
Initial payment on note | $ 26,650 | ||||||||||||||||||||||
Total payments of principal and interest due | 400,000 | ||||||||||||||||||||||
Gain on debt settlement | $ 76,336 | ||||||||||||||||||||||
Gain on troubled debt restructuring per share | $ 0 |
Debt - Schedule of Future Matur
Debt - Schedule of Future Maturities of Debt (Details) | Sep. 30, 2019USD ($) |
Debt Disclosure [Abstract] | |
2019 | $ 1,066,417 |
2020 | 1,062,247 |
2021 | 134,000 |
Total | $ 2,262,664 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Mar. 02, 2019 | Jan. 11, 2019 | Jul. 02, 2018 | May 08, 2018 | Jan. 11, 2018 | Oct. 04, 2016 | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | |||||||||||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||||||||
Preferred stock, shares issued | ||||||||||||||
Preferred stock, shares outstanding | ||||||||||||||
Common stock, shares authorized | 250,000,000 | 250,000,000 | 250,000,000 | |||||||||||
Common stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||||||||
Common stock, shares issued | 23,581,534 | 23,581,534 | 19,180,063 | |||||||||||
Common stock, shares outstanding | 23,581,534 | 23,581,534 | 19,180,063 | |||||||||||
Shares issued for services | $ 23,511 | $ 2,123 | $ 10,274 | $ 11,812 | $ 15,087 | |||||||||
Intrinsic value of options outstanding | 0 | $ 0 | $ 0 | |||||||||||
Intrinsic value of options exercisable | 97,350 | 97,350 | 0 | |||||||||||
Stock-based compensation | 9,885 | $ 4,166 | ||||||||||||
Un-amortization expense | 156,790 | 156,790 | ||||||||||||
Intrinsic value of warrants outstanding | 0 | 0 | 0 | |||||||||||
Intrinsic value of warrants exercisable | $ 0 | $ 0 | $ 0 | |||||||||||
2016 Incentive Stock Option Plan [Member] | ||||||||||||||
Description of options | The Plan provides for the issuance of up to 2,500,000 shares of common stock of the Company through the grant of non-qualified options (the "Non-qualified Options"), incentive options (the "Incentive Options" and together with the Non-qualified Options, the "Options") and restricted stock (the "Restricted Stock") and unrestricted stock (the "Unrestricted Stock") to directors, officers, consultants, attorneys, advisors and employees. | |||||||||||||
Consultant [Member] | ||||||||||||||
Shares issued for services, shares | 550,000 | 95,175 | 57,942 | 95,175 | 57,942 | |||||||||
Shares issued for services | $ 23,511 | $ 14,736 | $ 23,511 | $ 14,736 | ||||||||||
Stock options, issued | 25,000 | 100,000 | 100,000 | |||||||||||
Stock options, issued fair value | $ 25,547 | $ 11,110 | $ 3,796 | |||||||||||
Strike price | $ 0.35 | $ 0.35 | $ 0.35 | |||||||||||
Number of stock options exchange for retiring | 400,000 | |||||||||||||
Employee [Member] | ||||||||||||||
Shares issued for services, shares | 293,551 | 145,884 | 293,551 | 145,884 | ||||||||||
Shares issued for services | $ 84,172 | $ 42,085 | $ 84,172 | $ 42,085 | ||||||||||
Board Member [Member] | ||||||||||||||
Stock options, issued | 200,000 | |||||||||||||
Stock options, issued fair value | $ 10,169 | |||||||||||||
Strike price | $ 1 | |||||||||||||
Vested period | 2 years | |||||||||||||
Common Stock [Member] | ||||||||||||||
Shares issued for services, shares | 95,175 | 21,229 | 46,442 | 35,010 | 52,932 | |||||||||
Shares issued for services | $ 1 | $ 1 | ||||||||||||
Strike price | $ 0.10 | |||||||||||||
Investor [Member] | Private Placement [Member] | ||||||||||||||
Sale of common stock | 4,107,920 | 1,593,332 | ||||||||||||
Sale of common stock value | $ 411,269 | $ 239,000 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Black-Scholes Option Pricing Model to Options Granted in Weighted Average Assumptions (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Dividend yield | 0.00% | 0.00% |
Forfeiture Rate | 0.00% | 0.00% |
Minimum [Member] | ||
Risk free interest rate | 2.52% | 2.32% |
Expected volatility | 42.00% | 41.00% |
Expected life in years | 5 years | 3 years 6 months |
Maximum [Member] | ||
Risk free interest rate | 2.76% | 2.75% |
Expected volatility | 43.00% | 44.00% |
Expected life in years | 11 years | 5 years |
Stockholders' Deficit - Sched_2
Stockholders' Deficit - Schedule of Stock Option Activity (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||
Number of Options, Outstanding beginning balance | 1,697,500 | 1,297,500 |
Number of Options, Exercisable beginning balance | 1,697,500 | 1,180,000 |
Number of Options, Granted | 650,000 | 400,000 |
Number of Options, Exercised | ||
Number of Options, Forfeited/Cancelled | (400,000) | |
Number of Options, Outstanding ending balance | 1,947,500 | 1,697,500 |
Number of Options, Exercisable ending balance | 1,647,500 | 1,697,500 |
Weighted Average Exercise Price, Outstanding beginning balance | $ 1.05 | $ 1.14 |
Weighted Average Exercise Price, Exercisable beginning balance | 1.05 | 1.21 |
Weighted Average Exercise Price, Granted | 0.14 | 0.86 |
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Forfeited/Cancelled | 0.35 | |
Weighted Average Exercise Price, Outstanding ending balance | 0.90 | 1.05 |
Weighted Average Exercise Price, Exercisable ending balance | $ 0.87 | $ 1.05 |
Weighted Average Remaining Contractual Life, Outstanding beginning balance | 3 years 1 month 20 days | 3 years 4 months 2 days |
Weighted Average Remaining Contractual Life, Exercisable beginning balance | 3 years 1 month 20 days | 3 years 2 months 23 days |
Weighted Average Remaining Contractual Life, Granted | 9 years 11 months 23 days | 5 years |
Weighted Average Remaining Contractual Life, Outstanding ending balance | 2 years 3 months 8 days | 3 years 1 month 20 days |
Weighted Average Remaining Contractual Life, Exercisable ending balance | 2 years 2 months 8 days | 3 years 1 month 20 days |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Nov. 08, 2018 | Apr. 09, 2018 | Mar. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Apr. 30, 2019 | Dec. 31, 2018 |
Eighteen-Month Loan Agreement [Member] | |||||||||
Aggregate principal amount | $ 50,000 | $ 250,000 | |||||||
Notes bear interest rate | 8.00% | 8.00% | |||||||
Maturity date | Oct. 30, 2019 | Dec. 31, 2019 | |||||||
Eighteen-Month Loan Agreement [Member] | Shareholder [Member] | |||||||||
Aggregate principal amount | $ 250,000 | ||||||||
Notes bear interest rate | 8.00% | ||||||||
Maturity date | Dec. 31, 2019 | ||||||||
Eighteen-Month Loan Agreement [Member] | Investor [Member] | |||||||||
Loan outstanding balance | $ 208,333 | $ 208,333 | $ 208,333 | ||||||
Settlement Agreement [Member] | |||||||||
Aggregate principal amount | $ 150,000 | ||||||||
Notes bear interest rate | 9.00% | ||||||||
NexPhase Global, LLC [Member] | |||||||||
Notes bear interest rate | 15.00% | ||||||||
Jeromy Olson, Chief Executive Officer [Member] | NexPhase Global [Member] | |||||||||
Holding percentage of management in vendors company | 50.00% | 50.00% | |||||||
Sales commission earned | $ 0 | $ 0 | $ 0 | $ 0 | |||||
Accounts payable, related parties | 113,175 | 113,175 | 113,175 | ||||||
Glenn Tilley Director[Member] | |||||||||
Aggregate principal amount | $ 170,857 | $ 170,857 | |||||||
Conversion price per share | $ 1 | $ 1 | |||||||
The Director [Member] | Eighteen-Month Loan Agreement [Member] | |||||||||
Aggregate principal amount | $ 50,000 | ||||||||
Notes bear interest rate | 8.00% | ||||||||
Maturity date | Oct. 30, 2019 | ||||||||
Loan outstanding balance | $ 45,833 | $ 45,833 | $ 45,833 | ||||||
Mr. Olson [Member] | Settlement Agreement [Member] | |||||||||
Due to related parties | $ 11,520 | ||||||||
Mr. Keenan [Member] | Settlement Agreement [Member] | |||||||||
Due to related parties | $ 11,520 |
Employee Separation (Details Na
Employee Separation (Details Narrative) - Settlement Agreement [Member] - Former Employee [Member] | Sep. 30, 2019USD ($) | Jun. 28, 2019USD ($) | Mar. 27, 2019USD ($)Installment | Mar. 31, 2019USD ($) |
Employee costs | $ 23,000 | $ 23,000 | $ 69,000 | |
Number of equal installments | Installment | 3 | |||
Outstanding balance, obligation | 23,000 | $ 23,000 | $ 69,000 | $ 23,000 |
Outstanding balance, obligation | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | May 01, 2019shares | Mar. 02, 2019shares | Nov. 08, 2018USD ($)$ / sharesshares | Nov. 08, 2018USD ($)shares | Jul. 25, 2018USD ($) | Jul. 25, 2018USD ($) | May 08, 2018USD ($)$ / sharesshares | Jul. 11, 2017USD ($)shares | May 15, 2017USD ($)$ / sharesshares | Dec. 31, 2016$ / sharesshares | Nov. 03, 2016$ / sharesshares | Aug. 03, 2016USD ($)$ / sharesshares | Jan. 04, 2016USD ($)$ / sharesshares | Jan. 02, 2016shares | Jan. 26, 2018USD ($) | Sep. 30, 2014USD ($)shares | Sep. 30, 2019USD ($)shares | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($)shares | Sep. 30, 2018USD ($)shares | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($)shares | Jan. 02, 2016USD ($) | Aug. 01, 2017USD ($) | Feb. 01, 2017USD ($) | Sep. 30, 2019USD ($)shares | Sep. 30, 2018USD ($)shares | Aug. 01, 2019USD ($) | Aug. 01, 2018USD ($) | Dec. 31, 2018USD ($) | Jun. 28, 2019USD ($) | Mar. 27, 2019USD ($) | Dec. 31, 2017$ / sharesshares | Dec. 31, 2015$ / sharesshares |
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Shares issued for services | $ 23,511 | $ 2,123 | $ 10,274 | $ 11,812 | $ 15,087 | ||||||||||||||||||||||||||||||||
Compensation expense | $ 9,885 | $ 4,166 | |||||||||||||||||||||||||||||||||||
Value of shares issued for the period | 1,267 | $ 5,001 | 405,001 | 15,000 | $ 224,000 | ||||||||||||||||||||||||||||||||
Owes plaintiffs amount | $ 466,177 | ||||||||||||||||||||||||||||||||||||
Note Holder [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Debt face value | $ 351,810 | $ 351,810 | |||||||||||||||||||||||||||||||||||
Accrued interest | 124,524 | ||||||||||||||||||||||||||||||||||||
Total payments of principal and interest due | 400,000 | ||||||||||||||||||||||||||||||||||||
Gain on debt settlement | $ 76,336 | ||||||||||||||||||||||||||||||||||||
Gain on troubled debt restructuring per share | $ / shares | $ 0 | ||||||||||||||||||||||||||||||||||||
Convertible Notes [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Promissory notes aggregate total | $ 476,334 | 476,334 | |||||||||||||||||||||||||||||||||||
Consultant [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Shares issued for services | $ 23,511 | $ 14,736 | $ 23,511 | $ 14,736 | |||||||||||||||||||||||||||||||||
Shares issued for services, shares | shares | 550,000 | 95,175 | 57,942 | 95,175 | 57,942 | ||||||||||||||||||||||||||||||||
Glenn Tilley Director[Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Debt face value | $ 170,857 | $ 170,857 | |||||||||||||||||||||||||||||||||||
Two Note Holders [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Owes plaintiffs amount | $ 466,177 | ||||||||||||||||||||||||||||||||||||
Services Agreements [Member] | Consultant [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Agreement term | 6 months | ||||||||||||||||||||||||||||||||||||
Shares issued for services | $ 7,500 | ||||||||||||||||||||||||||||||||||||
Shares issued for services, shares | shares | 100,000 | ||||||||||||||||||||||||||||||||||||
Agreement termination, description | The Company may terminate this agreement by providing at least 30 days advance written notice prior to the next renewal date. | ||||||||||||||||||||||||||||||||||||
Compensation expense | $ 14,905 | ||||||||||||||||||||||||||||||||||||
Employment Agreement [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Agreement term | 40 months | ||||||||||||||||||||||||||||||||||||
Monthly salary | $ 10,000 | ||||||||||||||||||||||||||||||||||||
Cash bonus percentage | 15.00% | ||||||||||||||||||||||||||||||||||||
EBITDA description | The agreement provides for cash bonuses of 15% of the annual Adjusted EBITDA between $1 and $1,000,000, 10% of the annual Adjusted EBITDA between $1,000,001 and $2,000,000 and 5% of the annual Adjusted EBITDA greater than $2,000,000. For purposes of the agreement, Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization less share based payments, gains or losses on derivative instruments and other non-cash items approved by the Board of Directors. | ||||||||||||||||||||||||||||||||||||
Employment Agreement [Member] | Sales Revenue, Net [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Increased amount of salary | $ 13,000 | ||||||||||||||||||||||||||||||||||||
Gross revenues | $ 10,000,000 | ||||||||||||||||||||||||||||||||||||
Operating margin rate | 15.00% | ||||||||||||||||||||||||||||||||||||
Employment Agreement [Member] | Chief Executive Officer [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Shares issued in an offering- net proceeds, share | shares | 250,000 | ||||||||||||||||||||||||||||||||||||
Shares received upon agreement execution | shares | 250,000 | ||||||||||||||||||||||||||||||||||||
Employment Agreement [Member] | Sales Revenue, Net [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Increased amount of salary | $ 16,000 | ||||||||||||||||||||||||||||||||||||
Gross revenues | $ 15,000,000 | ||||||||||||||||||||||||||||||||||||
Operating margin rate | 15.00% | ||||||||||||||||||||||||||||||||||||
Consulting Agreement [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Number of stock options issued or issuable | shares | 100,000 | 100,000 | 100,000 | ||||||||||||||||||||||||||||||||||
Exercise price of option vesting | $ / shares | $ 1.75 | $ 2.50 | $ 1.50 | ||||||||||||||||||||||||||||||||||
Consulting Agreement [Member] | Qualified Options to Purchase [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Options issued to purchase common shares approved | shares | 100,000 | ||||||||||||||||||||||||||||||||||||
Exercise price of an option | $ / shares | $ 1.50 | ||||||||||||||||||||||||||||||||||||
Consulting Agreement [Member] | Qualified Options to Purchase One [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Options issued to purchase common shares approved | shares | 75,000 | ||||||||||||||||||||||||||||||||||||
Exercise price of an option | $ / shares | $ 1.75 | ||||||||||||||||||||||||||||||||||||
Consulting Agreement [Member] | Qualified Options to Purchase Two [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Options issued to purchase common shares approved | shares | 25,000 | ||||||||||||||||||||||||||||||||||||
Exercise price of an option | $ / shares | $ 1.75 | ||||||||||||||||||||||||||||||||||||
Director Agreement [Member] | Glenn Tilley Director[Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Stipend to related party per visit to the meeting | $ 1,000 | ||||||||||||||||||||||||||||||||||||
Director Agreement [Member] | Glenn Tilley Director[Member] | Non-Qualified Stock Options [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Number of stock options issued or issuable | shares | 25,000 | ||||||||||||||||||||||||||||||||||||
Options issued to purchase common shares approved | shares | 200,000 | ||||||||||||||||||||||||||||||||||||
Exercise price of an option | $ / shares | $ 1 | ||||||||||||||||||||||||||||||||||||
Vesting period | 2 years | ||||||||||||||||||||||||||||||||||||
Grant date fair value of the options | $ 97,535 | ||||||||||||||||||||||||||||||||||||
Stock option vesting period, description | The Options shall vest in equal amounts over a period of two (2) years at the rate of Twenty Five Thousand (25,000) shares per fiscal quarter on the last day of each such quarter, commencing January 4, 2016. | ||||||||||||||||||||||||||||||||||||
Minichiello Director Agreement [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Stipend to related party per visit to the meeting | $ 1,000 | ||||||||||||||||||||||||||||||||||||
Minichiello Director Agreement [Member] | Non-Qualified Stock Options [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Number of stock options issued or issuable | shares | 25,000 | ||||||||||||||||||||||||||||||||||||
Options issued to purchase common shares approved | shares | 200,000 | ||||||||||||||||||||||||||||||||||||
Exercise price of an option | $ / shares | $ 1 | ||||||||||||||||||||||||||||||||||||
Vesting period | 2 years | ||||||||||||||||||||||||||||||||||||
Grant date fair value of the options | $ 4,017 | ||||||||||||||||||||||||||||||||||||
Stock option vesting period, description | The Options shall vest in equal amounts over a period of two (2) years at the rate of Twenty Five Thousand (25,000) shares per fiscal quarter on the last day of each such quarter. | ||||||||||||||||||||||||||||||||||||
Tuntland Director Agreement [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Stipend to related party per visit to the meeting | $ 1,000 | ||||||||||||||||||||||||||||||||||||
Tuntland Director Agreement [Member] | Non-Qualified Stock Options [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Number of stock options issued or issuable | shares | 25,000 | 25,000 | 25,000 | ||||||||||||||||||||||||||||||||||
Options issued to purchase common shares approved | shares | 200,000 | ||||||||||||||||||||||||||||||||||||
Exercise price of an option | $ / shares | $ 1 | ||||||||||||||||||||||||||||||||||||
Vesting period | 2 years | ||||||||||||||||||||||||||||||||||||
Grant date fair value of the options | $ 10,169 | ||||||||||||||||||||||||||||||||||||
Stock option vesting period, description | The Options shall vest in equal amounts over a period of two (2) years at the rate of Twenty Five Thousand (25,000) shares beginning in the third quarter of 2018. | ||||||||||||||||||||||||||||||||||||
Supply Agreement [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Compensation expense | 117,378 | $ 117,378 | |||||||||||||||||||||||||||||||||||
Payments for installments | 208,000 | 208,000 | |||||||||||||||||||||||||||||||||||
2015 Spartan Advisory Agreement [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Compensation expense | 292,250 | $ 292,250 | |||||||||||||||||||||||||||||||||||
Monthly fee | $ 10,000 | $ 7,500 | $ 5,000 | $ 13,700 | $ 10,000 | ||||||||||||||||||||||||||||||||
Contingent raised amount | $ 2,000,000 | ||||||||||||||||||||||||||||||||||||
2015 Spartan Advisory Agreement [Member] | Warrants [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Percentage of gross proceeds for consideration as fee amount | 10.00% | ||||||||||||||||||||||||||||||||||||
Warrants term | 5 years | ||||||||||||||||||||||||||||||||||||
Percentage of number of stock issued or issuable | 10.00% | ||||||||||||||||||||||||||||||||||||
Engagement fee upon execution of agreement | $ 15,000 | ||||||||||||||||||||||||||||||||||||
2015 Spartan Advisory Agreement [Member] | Private Placement [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Shares issued in an offering- net proceeds, share | shares | 3,181,819 | ||||||||||||||||||||||||||||||||||||
Agreement expiration | Aug. 1, 2019 | ||||||||||||||||||||||||||||||||||||
Value of shares issued for the period | $ 3,500,000 | ||||||||||||||||||||||||||||||||||||
Share issued price per share | $ / shares | $ 1.10 | ||||||||||||||||||||||||||||||||||||
2015 Spartan Advisory Agreement [Member] | Over-Allotments [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Shares issued in an offering- net proceeds, share | shares | 636,364 | ||||||||||||||||||||||||||||||||||||
Value of shares issued for the period | $ 700,000 | ||||||||||||||||||||||||||||||||||||
Equity Financing Agreement [Member] | GHS Investments, LLC [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Sale of common stock | shares | 4,000,000 | ||||||||||||||||||||||||||||||||||||
Share premium, percentage | 0.20 | ||||||||||||||||||||||||||||||||||||
Equity Financing Agreement [Member] | GHS Investments, LLC [Member] | Issuance Discount [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Share premium, percentage | 0.15 | ||||||||||||||||||||||||||||||||||||
Equity Financing Agreement [Member] | GHS Investments, LLC [Member] | Transaction Costs [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Share premium, percentage | 0.05 | ||||||||||||||||||||||||||||||||||||
Settlement Agreement [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Retainage amount | $ 110,000 | ||||||||||||||||||||||||||||||||||||
Construction costs | $ 370,000 | ||||||||||||||||||||||||||||||||||||
Debt face value | 150,000 | 150,000 | |||||||||||||||||||||||||||||||||||
Settlement Agreement [Member] | Note Holder Plaintiffs [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Debt face value | $ 150,000 | 150,000 | |||||||||||||||||||||||||||||||||||
Initial payment of litigation settlement | 250,000 | ||||||||||||||||||||||||||||||||||||
Forgiveness of indebtedness income | $ 76,334 | ||||||||||||||||||||||||||||||||||||
Debt interest rate | 9.00% | 9.00% | |||||||||||||||||||||||||||||||||||
Common stock reserved for future | shares | 850,000 | 850,000 | |||||||||||||||||||||||||||||||||||
Settlement Agreement [Member] | Former Employee [Member] | |||||||||||||||||||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||||||||||||
Due to related parties | 23,000 | $ 23,000 | 23,000 | $ 23,000 | $ 69,000 | ||||||||||||||||||||||||||||||||
Debt obligation | $ 0 | $ 0 |