Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 14, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | CANFIELD MEDICAL SUPPLY, INC. | |
Entity Central Index Key | 0001553788 | |
Document Type | 10-Q/A | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | true | |
Amendment Description | EXPLANATORY NOTE This Amendment No. 1 on Form 10-Q/A (“Amendment No. 1”) amends our Quarterly Report on Form 10-Q for the three months ended March 31, 2020, as filed with the U.S. Securities and Exchange Commission on May 13, 2020 prior to the filing of this Amendment No.1 (the “Original Filing”). Amendment No. 1 is being filed solely to correct a clerical error in the number of outstanding shares of the Company common stock set forth on the cover page of the Original Report. The correct number of shares of the Company’s common stock outstanding as of May 14, 2020, there was 69,357,618 as set forth on the cover page of this Amendment No.1. As required by Rule 12b-15 of the Securities Exchange Act of 1934, as amended, this Amendment contains new certifications by the Company’s principal executive officer and principal financial officer, which are being filed as exhibits to the Amendment. Because the Amendment includes no financial statements, the Company is not including certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Except as described above, no changes have been made to the Original Report. This Amendment does not modify, amend or update any financial information in the Original Report. This Amendment continues to speak as of the date of the Original Report, and the Company has not updated the disclosures contained therein to reflect any events that occurred at a date subsequent to the Original Report. | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 000-55114 | |
Entity Incorporation, State or Country Code | CO | |
Entity Common Stock, Shares Outstanding | 69,357,618 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 620,014 | $ 42,639 |
Accounts Receivable, net | 403,215 | 11,430 |
Prepaid Expenses | 4,192 | 5,449 |
Inventory | 479,263 | 304,012 |
Other receivables | 5,923 | 7,132 |
Total current assets | 1,512,607 | 370,662 |
Non-current assets: | ||
Deposit | 34,725 | 34,915 |
Goodwill | 9,448,852 | |
Investment in Salt Tequila USA, LLC | 250,000 | |
Right of use asset, net | 154,294 | 162,008 |
Property and equipment, net | 74,114 | 37,729 |
Total non-current assets | 9,961,985 | 234,652 |
Total Assets | 11,474,592 | 605,314 |
Current Liabilities | ||
Accounts payable and accrued expenses | 1,655,689 | 703,885 |
Right of use liability - current | 92,304 | 81,502 |
Due to related parties | 523,057 | 429,432 |
Bridge loan payable, net | 2,200,000 | |
Related party notes payable | 1,505,100 | |
Convertible Loan Payable | 100,000 | 2,202,664 |
Notes payable, current portion | 350,000 | 875,000 |
Royalty payable | 45,000 | 39,000 |
Revenue financing arrangements | 45,467 | 45,467 |
Shareholder advances | 150,000 | 46,250 |
Accrued interest payable | 826,393 | 1,604,498 |
Accrued interest payable - related parties | 546,362 | |
Total Current liabilities | 3,787,910 | 10,279,160 |
Long-term Liabilities: | ||
Right of use liability - noncurrent | 64,127 | 82,238 |
Total Long-term liabilities | 64,127 | 82,238 |
Total liabilities | 3,852,037 | 10,361,398 |
Common stock, (mezzanine shares), 12,605,283 shares, contingently convertible to notes payable at March 31, 2020 | 9,248,721 | |
Deficiency in stockholders' equity: | ||
Common Stock, $0.001 par, 100,000,000 shares authorized, 56,752,335 and 30,090,970 shares issued and outstanding, at March 31, 2020 and December 31, 2019, respectively | 56,752 | 30,091 |
Additional paid-in capital | 38,468,677 | 22,102,420 |
Treasury Stock, $0.001 par, 100,000 shares at cost | (50,000) | |
Accumulated deficit | (40,151,595) | (31,845,508) |
Total deficiency in stockholders' Equity | (1,626,166) | (9,756,084) |
Total liabilities mezzanine shares and deficiency in stockholders' equity | 11,474,592 | 605,314 |
Series A Convertible Preferred Stock [Member] | ||
Deficiency in stockholders' equity: | ||
Preferred stock value | 3,000 | |
Series B Convertible Preferred Stock [Member] | ||
Deficiency in stockholders' equity: | ||
Preferred stock value | $ 3,913 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Contingently convertible to notes payable shares | 12,605,283 | |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares outstanding | 56,752,335 | 30,090,970 |
Common stock, shares issued | 56,752,335 | 30,090,970 |
Treasury Stock cost | 100,000 | |
Treasury Stock par value | 0.001 | |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 0 | 3,000,000 |
Preferred stock, shares outstanding | 0 | 3,000,000 |
Series B Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 0 | 3,913,412 |
Preferred stock, shares outstanding | 0 | 3,913,412 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Sales (net of returns) | $ 112,003 | $ 2,665 |
Cost of goods sold | (107,214) | (13,102) |
Gross margin | 4,789 | (10,437) |
Operating expenses: | ||
Contracted services | 257,981 | 125,528 |
Salaries and wages | 241,676 | 197,942 |
Other selling, general and administrative | 1,031,264 | 111,829 |
Sales and marketing | 23,012 | 2,744 |
Total operating expenses | 1,553,933 | 438,043 |
Loss from operations | (1,549,144) | (448,480) |
Other income/ (expense): | ||
Interest income | 16,151 | |
Interest expense | (1,913,637) | (255,144) |
Total other income (expense) | (1,897,486) | (255,144) |
Provision for income tax | ||
Net loss | $ (3,446,630) | $ (703,624) |
Net loss per share (basic and diluted) | $ (0.05) | $ (0.02) |
Weighted average number of common shares outstanding | 64,390,890 | 37,470,253 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Deficiency in Stockholders' Equity (Unaudited) - USD ($) | Series A Convertible Preferred Stock | Series B Convertible Preferred Stock | Common Stock (no par) | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance at Dec. 31, 2018 | $ 3,000 | $ 3,913 | $ 26,235 | $ (100,000) | $ 18,945,497 | $ (26,709,777) | $ (7,831,132) |
Beginning Balance, in Shares at Dec. 31, 2018 | 3,000,000 | 3,913,412 | 26,234,583 | 272,585 | |||
Issuance of Common stock for cash | $ 27 | 19,973 | 20,000 | ||||
Issuance of Common stock for cash, in Shares | 27,258 | ||||||
Issuance of Common stock for services | $ 1 | 999 | 1,000 | ||||
Issuance of Common stock for services, in Shares | 1,363 | ||||||
Share-based compensation | |||||||
Net loss | (703,624) | (703,624) | |||||
Ending Balance at Mar. 31, 2019 | $ 3,000 | $ 3,913 | $ 26,263 | $ (100,000) | 18,966,469 | (27,413,401) | (8,513,755) |
Ending Balance, in Shares at Mar. 31, 2019 | 3,000,000 | 3,913,412 | 26,263,204 | 272,585 | |||
Beginning Balance at Dec. 31, 2018 | $ 3,000 | $ 3,913 | $ 26,235 | $ (100,000) | 18,945,497 | (26,709,777) | (7,831,132) |
Beginning Balance, in Shares at Dec. 31, 2018 | 3,000,000 | 3,913,412 | 26,234,583 | 272,585 | |||
Ending Balance at Dec. 31, 2019 | $ 3,000 | $ 3,913 | $ 30,090 | $ (50,000) | 22,102,421 | (31,845,507) | (9,756,084) |
Ending Balance, in Shares at Dec. 31, 2019 | 3,000,000 | 3,913,412 | 30,090,970 | 136,293 | |||
Issuance of dividends- preferred A | $ 1,605 | 1,439,030 | (1,440,635) | ||||
Issuance of dividends- preferred A, in Shares | 1,605,130 | ||||||
Issuance of dividends- preferred B | $ 1,702 | 2,347,448 | (2,349,150) | ||||
Issuance of dividends- preferred B, in Shares | 1,702,449 | ||||||
Issuance of common stock for convertible debt | 145,579 | 145,579 | |||||
Issuance of common stock for convertible debt, in Shares | |||||||
Conversion of series A convertible preferred stock | $ (4,605) | $ 6,276 | (1,671) | ||||
Conversion of series A convertible preferred stock, in Shares | (4,605,130) | 6,276,432 | |||||
Conversion of series B convertible preferred stock | $ (5,615) | $ 7,654 | (2,039) | ||||
Conversion of series B convertible preferred stock, in Shares | (5,615,861) | 7,653,980 | |||||
Incremental beneficial conversion for preferred A | 240,770 | (240,770) | |||||
Incremental beneficial conversion for preferred A, in Shares | |||||||
Issuance of warrants on convertible instruments | 2,486,706 | (828,903) | 1,657,803 | ||||
Issuance of warrants on convertible instruments, in Shares | |||||||
Issuance of Common stock for services | $ 818 | $ 50,000 | 549,182 | $ 600,000 | |||
Issuance of Common stock for services, in Shares | 817,753 | (136,293) | 600,000 | ||||
Share-based compensation | |||||||
Issuance of common stock for acquisition | $ 11,913 | 9,161,251 | 9,173,164 | ||||
Issuance of common stock for acquisition, in Shares | 11,913,200 | ||||||
Net loss | (3,446,630) | (3,446,630) | |||||
Ending Balance at Mar. 31, 2020 | $ 56,751 | $ 38,468,677 | $ (40,151,595) | $ (1,626,166) | |||
Ending Balance, in Shares at Mar. 31, 2020 | 56,752,335 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (3,446,630) | $ (703,624) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 2,294 | 2,905 |
Amortization of ROU Asset | 20,192 | 501 |
Gain from debt extinguishment | (763) | |
Interest on notes payable converted to common stock | 231,692 | |
Interest expense due to the issuance of warrants | 1,657,805 | |
Share-based compensation | ||
Shares issued in exchange for services | 600,000 | 1,000 |
Other noncash charges | (14,400) | |
Changes in working capital items: | ||
Accounts receivable | (80,198) | (2,087) |
Inventory | (153,836) | (75,459) |
Prepaid expenses and other current assets | 2,467 | 48,668 |
Deposits | 190 | 1 |
Accounts payable and accrued expenses | 226,187 | (244,877) |
Royalty payable | 6,000 | |
Accrued Interest payable | 24,140 | 254,552 |
Net cash used in operating activities | (924,860) | (718,420) |
Cash Flows From Investing Activities: | ||
Capital Expenditures | (2,419) | |
Investment in Salt Tequila USA, LLC | (150,000) | |
Net cash acquired in merger | 72,442 | |
Net cash used in investing activities | (79,977) | |
Cash Flows From Financing Activities: | ||
Proceeds from issuance of notes | 1,500,000 | 20,000 |
Repayment of shareholder advance | (120,000) | (13,084) |
Cash advance from shareholder | 240,000 | |
Proceeds from issuance of debt | 55,207 | |
Principal repayment of debt | (18,000) | |
Reduction of ROU Liability | (19,788) | |
Net cash provided by financing activities | 1,582,212 | 62,123 |
Net Change in Cash and Cash Equivalents | 577,375 | (656,297) |
Cash and Cash Equivalents, beginning of year | 42,639 | 938,040 |
Cash and Cash Equivalents, end of period | 620,014 | 281,743 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest | 23,851 | |
Supplemental Disclosure of Non-Cash Investing and Financing Activities | ||
Notes payable and accrued interest converted to common stock (12,605,283 shares) | 9,248,721 | |
Series A & B preferred stock and declared dividends converted to common stock | 14,587,623 | |
Liability issued for investment in SALT Tequila USA, LLC | $ 100,000 |
Business Organization and Natur
Business Organization and Nature of Operations | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Organization and Nature of Operations | Note 1 – Business Organization and Nature of Operations Canfield Medical Supply, Inc. (the “CMS”), was incorporated in the State of Ohio on September 3, 1992, and changed domicile to Colorado on April 18, 2012. CMS is in the business of home health services, primarily the selling of durable medical equipment and medical supplies to the public, nursing homes, hospitals and other end users. On December 31, 2019, CMS entered into an Agreement and Plan of Merger (the “Merger Agreement”) with SBG Acquisition Inc. (“Merger Sub”), a Nevada Corporation wholly-owned by CMS, and Splash Beverage Group, Inc. a Nevada corporation (“Splash”) pursuant to which Merger Sub merged with and into Splash (the “Merger”) with Splash as the surviving company and a wholly-owned subsidiary of CMS. The Merger was consummated on March 31, 2020. As the owners and management of Splash have voting and operating control of CMS following the Merger, the Merger transaction was accounted for as a reverse acquisition (that is with Splash as the acquiring entity), followed by a recapitalization. Splash specializes in the manufacturing, distribution, and sales & marketing of various beverages across multiple channels. Splash operates in both the non-alcoholic and alcoholic beverage segments. Additionally, Splash operates its own vertically integrated B-to-B and B-to-C e-commerce distribution platform called Qplash, further expanding its distribution abilities and visibility. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Basis of Presentation and Consolidation These condensed consolidated financial statements include the accounts of Splash Beverage Group and its wholly owned subsidiaries, Holdings and Splash Mex, in addition to the accounts of CMS at March 31, 2020, the merger consummation date. All intercompany balances have been eliminated in consolidation. Our accounting and reporting policies conform to accounting principles generally accepted in the United States of America (GAAP). The accompanying financial statements have been prepared by us without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the three months ended March 31, 2020 and 2019 have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these financial statements be read in conjunction with the consolidated financial statements and notes thereto included in our December 31, 2019 audited financial statements. The results of operations for the period ended March 31, 2020 are not necessarily indicative of the operating results for the full year. Use of Estimates The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash Equivalents and Concentration of Cash Balance We consider all highly liquid securities with an original maturity of three months or less to be cash equivalents. We had no cash equivalents at March 31, 2020 or December 31, 2019. Our cash in bank deposit accounts, at times, may exceed federally insured limits of $250,000. At March 31, 2020 we had $247,004 over the federally insured limits. Our bank deposit accounts in Mexico are uninsured. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are carried at their estimated collectible amounts and are periodically evaluated for collectability based on past credit history with clients and other factors. We establish provisions for losses on accounts receivable on the basis of loss experience, known and inherent risk in the account balance, and current economic conditions. At March 31, 2020 and December 31, 2019, our accounts receivable amounts are reflected net of allowances of $ 403,215 and $11,430, respectively. Inventory Inventory is stated at the lower of cost or net realizable value, accounted for using the weighted average cost method. The inventory balances at March 31, 2020 and December 31, 2019 consisted of finished goods held for distribution. The cost elements of inventory consist of purchase of products, transportation, and warehousing. We establish provisions for excess or inventory near expiration are based on management’s estimates of forecast turnover of inventories on hand and under contract. A significant change in the timing or level of demand for certain products as compared to forecast amounts may result in recording additional provisions for excess or expired inventory in the future. Provisions for excess inventory are included in cost of goods sold and have historically been adequate to provide for losses on inventory. We manage inventory levels and purchase commitments in an effort to maximize utilization of inventory on hand and under commitments. Property and Equipment We record property and equipment at cost when purchased. Depreciation is recorded for property, equipment, and software using the straight-line method over the estimated economic useful lives of assets, which range from 3-10 years. Company management reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable. Depreciation expense totaled $2,294 and $2,905 for the three months ended March 31, 2020 and March 31, 2019, respectively. Property and equipment as of March 31, 2020 and December 31, 2019 consisted of the following: March 31, December 31, Property and equipment, at cost 226,441 88,758 Accumulated depreciation (152,327 ) (51,029 ) Property and equipment, net 74,114 37,729 Licensing Agreements We capitalize the costs for our licensing agreements with ABG TapouT, LLC and Salt Tequila USA, LLC, which are amortized to expense on a straight-line basis over the term of the agreements. The initial amount of the TapouT agreement as entered into by a related party prior to the Company’s assumption in 2013 was $4,000,000 to be paid over several years pursuant to a guaranteed minimum royalty agreement. Royalty costs incurred under the agreements, guaranteed minimum royalty amounts, are expensed as incurred. We have not made any payments to Salt Tequila USA, LLC under the licensing agreement due to the immaterial level of our sales to date from the brand. Fair Value of Financial Instruments Financial Accounting Standards (“FASB”) guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: Level Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities. Level Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active). Level Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable. The liabilities and indebtedness presented on the consolidated financial statements approximate fair values at March 31, 2020 and December 31, 2019, consistent with recent negotiations of notes payable and due to the short duration of maturities. Convertible Instruments U.S. GAAP requires the bifurcation of certain conversion rights contained in convertible indebtedness and account for them as free standing derivative financial instruments according to certain criteria. This criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional as that term is described under applicable U.S. GAAP. When bifurcation is required, the embedded conversion options are bifurcated from the convertible note, resulting in the recognition of discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. With respect to convertible preferred stock, we record a dividend for the intrinsic value of conversion options embedded in preferred securities based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded in the preferred shares. Revenue Recognition We recognize revenue under ASC 606, Revenue from Contracts with Customers (Topic 606). This guidance sets forth a five-step model which depicts the recognition of revenue in an amount that reflects what we expect to receive in exchange for the transfer of goods or services to customers. We recognize revenue when our performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control of our products is transferred upon delivery to the customer. Revenue is measured as the amount of consideration that we expect to receive in exchange for transferring goods and is presented net of provisions for customer returns and allowances. The amount of consideration we receive and revenue we recognize varies with changes in customer incentives we offer to our customers and their customers. Sales taxes and other similar taxes are excluded from revenue. Distribution expenses to transport our products, where applicable, and warehousing expense after manufacture are accounted for within operating expenses. Cost of Goods Sold Cost of goods sold include the costs of products, packaging, transportation, warehousing, and costs associated with valuation allowances for expired, damaged or impaired inventory. Stock-Based Compensation We account for stock-based compensation in accordance with ASC 718, “ Compensation - Stock Compensation” Income Taxes We use the liability method of accounting for income taxes as set forth in ASC 740, “ Income Taxes” Company management assesses its income tax positions and records tax benefits for all years subject to examination based upon its evaluation of the facts, circumstances and information available at the reporting date. In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, our policy is to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements. Company management has determined that there are no material uncertain tax positions at March 31, 2020 and December 31, 2019. Net loss per share The net loss per share is computed by dividing the net loss by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's convertible debt or preferred stock (if any), are not included in the computation if the effect would be anti-dilutive. There were no potentially dilutive debt or equity instruments issued or outstanding during the three months ended March 31, 2020 or 2019. Advertising We conduct advertising for the promotion of our products. In accordance with ASC 720-35, advertising costs are charged to operations when incurred. Related Parties We are indebted to certain members of our Board of Directors at March 31, 2020 and December 31, 2019. Transactions between us and the Board members are summarized in Notes 4 and 8. Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “ Leases We adopted the standard on January 1, 2019, using the modified retrospective method. The adoption of this standard resulted in recognition of a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, for all leases with a term greater than 12 months. When available, we would use the rate implicit in the lease to discount lease payments to present value. However, our leases generally do not provide a readily determinable implicit rate. Therefore, our management estimates the incremental borrowing rate to discount lease payments based on the information at the lease commencement. The accounting for finance leases is substantially unchanged. Given the nature of our operation, the adoption of Topic 842 did not have a material impact on our balance sheet, statement of income, or liquidity. Refer to Note 10 – Operating Lease Obligations for information regarding our adoption of Topic 842 and the Company’s undiscounted future lease payments and the timing of those payments. Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. |
Going Concern
Going Concern | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going concern | Note 3 – Going Concern The accompanying 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. Our business operations have not yet generated significant revenues, and we have sustained net losses of approximately $3.4 million during the three months ended March 31, 2020 and have an accumulated deficit of approximately $40.2 million at March 31, 2020. In addition, we have current liabilities in excess of current assets of approximately $2.3 million at March 31, 2020. Further, we are in default on approximately $0.6 million of indebtedness, including accrued interest. Our ability to continue as a going concern in the foreseeable future is dependent upon our ability to generate revenues and obtain sufficient long-term financing to meet current and future obligations and deploy such to produce profitable operating results. Management has evaluated these conditions and plans to raise capital as needed and to generate revenues to satisfy our capital needs. No assurance can be given that we will be successful in these efforts. These factors, among others, raise substantial doubt about our ability to continue as a going concern for a reasonable period of time. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. |
Notes Payable, Related Party No
Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing Arrangements | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing Arrangements and Bridge Loan Payable | Note 4 – Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing Arrangements and Bridge Loan Payable Notes payable are generally nonrecourse and secured by all Company owned assets. Interest March 31, December 31, Notes Payable In October 2013, we entered into a short-term loan agreement with an entity in the amount of $25,000. The note matured and in March 2020 the full outstanding principal balance of $25,000 and unpaid accrued interest of $11,345 was converted into 234,767 shares of common stock according to the Merger Agreement. 7% $ - $ 25,000 In February 2014, we entered into a 12-month term loan agreement with an individual in the amount of $200,000. The note included warrants for 68,146 shares of common stock at $0.73 per share. The warrants expired on February 28, 2017 and none were exercised at that date. The note matured and remains unpaid. 15% 150,000 150,000 In March 2014, we entered into a 12-month term loan agreement with an individual in the amount of $500,000. The note included warrants for 681,461 shares of common stock at $0.92 per share. The warrants expired on February 28, 2017 and none were exercised at that date. The note matured and in March 2020 the full outstanding principal balance of $500,000 and unpaid accrued interest of $373,065 was converted into 1,124,802 shares of common stock according to the Merger Agreement. 15% - 500,000 In March 2014, we entered into a short-term loan agreement with an entity in the amount of $200,000. The note included warrants for 272,584 shares of common stock at $0.92 per share. The warrants expired on February 28, 2017 and none were exercised at that date. The loans matured and remain unpaid. 8% 200,000 200,000 $ 350,000 $ 875,000 Interest expense on notes payable was $49,430 and $28,813 for the three months ended March 31, 2020 and 2019, respectively. Accrued interest was $235,380 at March 31, 2020 Concurrently with the consummation of the Merger, notes payable of $525,000 and accrued interest were converted to shares of Splash common stock, which were exchanged for CMS shares. Pursuant to the terms of the conversion agreements, these investors have the right to rescind the common shares received and receive replacement notes payable if we fail to raise $9 million in a secondary initial public offering by September 30, 2020. As a result, these shares are classified as mezzanine equity in our condensed consolidated balance sheet. Interest March 31, December 31, Related Parties Notes Payable During 2012, we entered into two 6-month term loan agreements with an entity, totaling $150,000. The notes included warrants for 68,146 shares of common stock at $0.73 per share which expired unexercised in 2017. The note matured and in March 2020 the full outstanding principal balance of $41,500 and unpaid accrued interest of $31,515 was converted into 98,726 shares of common stock according to the Merger Agreement. 7% $ - $ 41,500 In March 2014, we entered into a $50,000 12-month term loan agreement. The note included warrants for 136,292 shares of common stock at $0.92 per share. The warrants expired unexercised on February 28, 2017. The note matured and in March 2020 the full outstanding principal balance of $50,000 and unpaid accrued interest of $24,145 was converted into 99,252 shares of common stock according to the Merger Agreement. 8% - 50,000 During 2015, we entered into a 12-month term loan agreement with an individual in the amount $250,000. The note matured and in March 2020 the full outstanding principal balance of $250,000 and unpaid accrued interest of $101,850 was converted into 98,726 shares of common stock according to the Merger Agreement. 8% - 250,000 In February 2012, we entered into a loan agreement with an officer of the Company in the amount of $100. On September 25, 2018 an additional $10,500 loan agreement was entered into. The note matured and in March 2020 the full outstanding principal balance of $10,600 and unpaid accrued interest of $1,189 was converted into 15,734 shares of common stock according to the merger agreement. 7% - 10,600 During 2013, 2014, 2015, and 2016, we entered into several 12-month term loan agreements with an officer of the Company in the amounts of $57,000, $225,000, $105,000, and $9,000, respectively. The note matured and in March 2020 the full outstanding principal balance of $396,000 and unpaid accrued interest of $146,828 was converted into 727,344 shares of common stock according to the Merger Agreement. 7% - 396,000 During 2012, 2013, 2014, and 2016, we entered into 6-month term loan agreements with an officer of the Company in the amounts of $155,000, $210,000, $150,000 and $40,000, all respectively. The notes included warrants for issuances of 204,438 shares of common stock at $0.92 per share. The warrants expired unexercised on March 1, 2017. The note matured and in March 2020 the full outstanding principal balance of $495,000 and unpaid accrued interest of $213,010 was converted into 942,504 shares of common stock according to the Merger Agreement. 7% - 495,000 During 2013, 2014 and 2017, we entered into 12-month term loan agreements with an officer of the Company in the amounts of $60,000, $50,000 and $10,000. The note matured and in March 2020 the full outstanding principal balance of $120,000 and unpaid accrued interest of $50,305 was converted into 228,328 shares of common stock according to the Merger Agreement. 7% - 120,000 During 2018, we entered into a long term note payable with an entity owned by an officer for $12,000 to be payable on July 10, 2020. The note matured and in March 2020 the full outstanding principal balance of $12,000 and unpaid accrued interest of $1,050 was converted into 17,407 shares of common stock according to the Merger Agreement. 12% - 12,000 During 2019, we entered into a term note payable with an entity owned by an officer for $130,000 to be paid on August 8, 2019. The note matured and in March 2020 the full outstanding principal balance of $130,000 and unpaid accrued interest of $9,078 was converted into 182,525 shares of common stock according to the Merger Agreement. 12% - 130,000 $ - $ 1,505,100 Interest expense on related party notes payable was $37,967 and $24,814 for the three months ended March 31, 2020 and 2019, respectively. Accrued interest was $0 as of March 31, 2020. Concurrently with the consummation of the Merger, notes payable of $1,505,100 and accrued interest were converted to shares of Splash common stock, which were exchanged for CMS shares. Pursuant to the terms of the conversion agreements, these investors have the right to rescind the common shares received and receive replacement notes payable if we fail to raise $9 million in a secondary initial public offering by September 30, 2020. As a result, these shares are classified as mezzanine equity in our condensed consolidated balance sheet. Interest March 31, December 31, Convertible Bridge Loans Payable In May 2015, we entered into a 3-month term loan agreement with an individual in the amount of $100,000. The annual interest rate for this bridge loan was 32% for the first 90 days, and 4% thereafter, compounded monthly. See left $ 100,000 $ 100,000 In October 2015, we entered into a 3-month term loan agreement with two individuals in the amount of $25,000. On December 26, 2018, the outstanding principal and accrued interest of $14,388 was consolidated into a new $39,388 term loan due August 26, 2020. In March 2020 the full outstanding principal balance of $39,388 and unpaid accrued interest of $5,973 was converted into 59,694 shares of common stock according to the Merger Agreement. 12% - 39,388 In June 2015, we entered into a 3-month term loan with two individuals in the amount of $100,000. On December 26, 2018, the outstanding principal amount of $100,000 and accrued interest of $64,307 was consolidated into a new $164,307 term loan due August 26, 2020. In March 2020 the full outstanding principal balance of $164,307 and unpaid accrued interest of $24,916 was converted into 249,013 shares of common stock according to the Merger Agreement. 12% - 164,307 During 2016, 2017 and 2018, we entered into multiple loan agreements with an entity in varying amounts. On December 26, 2018, the outstanding principal of $235,500 and accrued interest of $155,861 was consolidated into a new $391,361 term due August 26, 2020. In March 2020 the full outstanding principal balance of $391,361 and unpaid accrued interest of $43,823 was converted into 435,184 shares of common stock according to the Merger Agreement. 12% - 391,361 During 2016, we entered into 3-month term loan agreements with an individual totaling $20,000. The loan was extended to August 14, 2020. In March 2020 the full outstanding principal balance of $20,000 and unpaid accrued interest of $10,096 was converted into 41,336 shares of common stock according to the Merger Agreement. 9% - 20,000 During 2014 through 2018, we entered into convertible promissory note agreements with various terms ranging from 90 days to 18 months at 18% interest with an entity which were consolidated into one loan at 12% in 2018 totaling $795,137 with a due date of August 26, 2020. In March 2020 the full outstanding principal balance of $795,137 and unpaid accrued interest of $89,037 was converted into 884,174 shares of common stock according to the Merger Agreement. 12% - 795,137 During 2015 and 2016, we entered into a series of 3-month term convertible promissory note agreements at 18% interest with an entity which were consolidated into one loan at 12% in 2018 totaling $692,471 with a due date of August 26, 2020. In March 2020 the full outstanding principal balance of $692,471 and unpaid accrued interest of $77,541 was converted into 770,012 shares of common stock according to the Merger Agreement. 12% - 692,471 $ 100,000 $ 2,202,664 During 2018, we issued convertible bridge loans payable which are convertible, at the holders’ option, into shares of our common stock. During 2018 multiple convertible bridge loans payable to five counterparties, and related unpaid interest were consolidated into five new convertible bridge loans payable totaling $2,082,665. The notes are of varying amounts and are due in August 2020, at an interest rate of 12%. We analyzed the notes and concluded the conversion terms did not constitute beneficial conversion features. The principal amount and any accrued and unpaid interest are convertible at the conversion price of a potential future offering of the Company. Interest expense on the convertible bridge loans payable was $93,785 and $70,480 for the three months ended March 31, 2020 and 2019, respectively. Accrued interest was $147,215 at March 31, 2020. On April 24, 2017, a note holder filed a complaint against the Company for a promissory note in default. The note holder is requesting summary judgment in the amount of $247,215. Concurrently with the consummation of the Merger, notes payable of $2,102,664 and accrued interest were converted to shares of Splash common stock, which were exchanged for CMS shares. Pursuant to the terms of the conversion agreements, these investors have the right to rescind the common shares received and receive replacement notes payable if we fail to raise $9 million in a secondary initial public offering by September 30, 2020. As a result, these shares are classified as mezzanine equity in our condensed consolidated balance sheet. Interest March 31, December 31, Revenue Financing Arrangements During August 2015, we entered into a 3-month term loan agreement with an entity in the amount of $50,000, with required daily payments of $999. we entered into two additional 3-month loan agreements with the entity in 2016 in the amounts of $60,000 and $57,000, with required daily payments of $928 and $713, respectively. The term loans matured and remain unpaid. On February 23, 2017, the note holder filed a complaint against the Company for a promissory note in default. The note holder is requesting summary judgment in the amount of $65,978. 10% 28,032 28,032 During November 2016, we entered into a short-term loan agreement with an entity in the amount of $55,000 with required daily payments of $1,299. The note was in default as of December 31, 2018. In 2019, we entered into a settlement agreement with monthly installment payments of $6,000. The loan is scheduled to be fully repaid in 2020. 12% 17,435 17,435 $ 45,464 $ 45,464 Interest expense on the revenue financing arrangements was $25,067 and $1,723 for the year ended March 31, 2020 and 2019, respectively. Accrued interest was $39,221 at March 31, 2020. Bridge Loan Payable We issued an additional bridge loan in October 2018 for $2 million with a one-year maturity to GMA Bridge Fund LLC (“GMA”). This bridge loan contains a 10% administration fee of which the full $200,000 was accrued at December 31, 2019 and included in bridge loan payable, net. We incurred $271,670 of loan costs, which was fully amortized at December 31, 2019. Interest on the bridge loan was 0.5% monthly for the first six months and 0.75% monthly for the next six months. At the same time the debt was issued, we entered into a separate agreement in which GMA provided consulting services for one year (“Consulting Agreement”). We compensated GMA for the Consulting Agreement services by issuance of a warrant with a 5-year term to acquire 1,362,922 shares of our common stock at an exercise price of $0.01 per share. The warrant vested immediately. The value of the warrant, based on a Black-Scholes option pricing model, was $991,423 and was expensed in full in 2018. Interest expense on the bridge loan for the three months ended March 31, 2020 was $49,584 and accrued interest at March 31, 2020 was $0. As part of GMA’s conversion agreement, we replaced the original warrants to purchase 1 million shares and granted additional warrants. To purchase 1 million shares. The value of the warrants based on a Black-Scholes option pricing model, was $1,657,805, and was expensed. Concurrently with the consummation of the Merger, the $2,500,000 note payable of was converted to shares of Splash common stock, which were exchanged for CMS shares. Pursuant to the terms of the conversion agreements, GMA has the right to rescind the common shares received and receive replacement notes payable if we fail to raise $9 million in a secondary initial public offering by September 30, 2020. As a result, these shares are classified as mezzanine equity in our condensed consolidated balance sheet. |
Licensing Agreement and Royalty
Licensing Agreement and Royalty Payable | 3 Months Ended |
Mar. 31, 2020 | |
Notes to Financial Statements | |
Licensing Agreement and Royalty Payable | Note 5 – Licensing Agreement and Royalty Payable We have a licensing agreement with ABG TapouT, LLC (“TapouT”), providing us with licensing rights to the brand “TapouT” on energy drinks, energy shots, water, teas and sports drinks for beverages sold in the United States of America, its territories, possessions, U.S. military bases and Mexico. Under the terms of the agreement, we are required to pay a 6% royalty on net sales, as defined. In 2020 and 2019, we are required to make monthly payments of $45,000 and $39,000, respectively. The unpaid amount of royalties was $45,000 at March 31, 2020. Guaranteed minimum royalty payments totaled $135,000 and $117,000 for the three months ended March 31, 2020 and 2019, which is included in general and administrative expenses. |
Deficiency in Stockholders' Equ
Deficiency in Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Deficiency in Stockholders' Equity | Note 6 – Deficiency in Stockholders’ Equity Common Stock In 2019, we issued 1,846,078 shares of our common stock in exchange for services provided to us. The shares were valued at $0.73 per share. We recognized share-based compensation expense of $1,354,500, which is classified within the contracted services line on the Statement of Operations. At March 31, 2020, we issued 817,753 shares of common stock in exchange for services provided to us. The shares were valued at $0.73 per share. We recognized share-based compensation expense of $600,000, which is classified within the contracted services line on the Statement of Operations. Series A Convertible Preferred Stock The Series A Convertible Preferred Stock are subject to adjustment in the event of any recapitalization, dividend, split, combination, or other similar event. Series A Convertible Preferred Stock were issued in units, with each unit consisting of one share of Series A Convertible Preferred Stock, par value $0.001, and one common stock purchase warrant. The warrants entitle the holders to purchase one share of the Company’s common stock at a price of $0.73 per share during the five-year period commencing on the date of the issuance of the warrants. Series A Preferred Stock rank, with respect to dividend rights and rights upon any voluntary or involuntary liquidation, dissolution or winding up of the Company (Liquidation Event), as senior in preference and priority to the common stock, par value $0.001, and any other class or series of equity security established and designated by the Company’s Board of Directors and in parity with Series B Convertible Preferred Stock. Liquidation preference is 150% of the original issue price, which totaled $4,500,000 at December 31, 2019. The liquidation preference ranks in parity with Series B Preferred Stock. The holders of the Series A Preferred Stock are entitled to receive cash dividends when and if declared, out of any assets available, prior to any declaration or payment of any dividend on any other class of preferred stock and common stock of the Company at an annual rate of 8% of the original issue price (equal to $0.06 per share per annum based on $0.73 per share purchase price). The cumulative dividend amounted to $1,364,361 as of March 31, 2020. We have not accrued this amount at December 31, 2019 as the dividends were not payable until when and if declared by the board as previously mentioned. Such dividends are cumulative and convertible into common stock under the same terms as the Series B Preferred Stock. Each holder of Series A Preferred Stock shall be entitled to vote on all matters submitted to a vote of the stockholders of the Company and shall be entitled to that number of votes equal to the number of shares of common stock into which the holder's shares of Series A Preferred Stock could then be converted at the record date for the determination of stockholders entitled to vote on such matters or, if no such record date is established, at the date such vote is taken or any written consent of stockholders is solicited, and the holders of shares of Series A Preferred Stock and Common Stock shall vote together (or tender written consents in lieu of a vote) as a single class on all matters submitted to the stockholders of the Company. Each share of Series A Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, into such number of fully paid and non-assessable shares of common stock as is determined by dividing the Series A original issue price ($0.73 per share) by the conversion price ($0.62 per share) in effect at the time of conversion, subject to certain dilution protections. The conversion price at which shares of common stock shall be deliverable upon conversion of Series A Preferred Stock without the payment of additional consideration by the holder thereof shall initially be $0.62 per share. All accrued and unpaid dividends may be converted by each holder of Series A Preferred Stock into common stock by first determining the number of shares of Series A Preferred Stock that could be purchased based on the Series A original issue price then in effect and then determining the number of shares of common stock such additional shares of Series A Preferred Stock are convertible into. Upon the consummation of an underwritten public offering of the common stock of the Company ("IPO"), each share of Series A Preferred Stock shall automatically be converted into such number of fully paid and non-assessable shares of common stock at a conversion price equal to the lesser of (i) the conversion price in effect immediately prior to the consummation of the IPO or (ii) fifty percent (50%) of the public offering price of the Common Stock in the IPO. All accrued and unpaid dividends may be converted by each holder of Series A Preferred Stock into common stock by first determining the number of shares of Series A Preferred Stock that could be purchased based on the Series A original issue price then in effect and then determining the number of shares of common stock such additional shares of Series A Preferred Stock are convertible into. Concurrently with the consummation of the Merger, Series A Preferred Stock of 3,000,000 shares and accrued dividends of 1,605,130 shares were converted to shares of Splash common stock, which were exchanged for 6,276,432 of CMS shares. Pursuant to the terms of the conversion agreements, these investors have the right to rescind the common shares received and receive preferred stock replacements shares if we fail to raise $9 million in a secondary initial public offering by September 30, 2020. These shares are classified in equity as part of Stockholders’ Equity section of the condensed consolidated balance sheet. Series B Convertible Preferred Stock During 2017, we issued 675,873 shares of Series B Convertible Preferred Stock at $1.10 per share resulting in total proceeds of $736,350 along with 337,936 warrants for the Company’s common stock. The warrants expire after 5 years and are exercisable at $1.10 per share. In 2018, we issued 180,459 shares of Series B Convertible Preferred Stock at $1.10 per share resulting in total proceeds of $198,609 along with 90,230 warrants for the Company’s common stock. The warrants expire after 5 years and are exercisable at $1.10 per share. We had issued Series B Convertible Preferred shares in units, each unit consisting of one share of Series B Convertible Preferred Stock, par value $0.001, and one-third share common stock warrant per share of Series B Convertible Preferred Stock, at a price of $1.10 per unit. Per the warrant agreement, we issued to the purchasers five-year warrants to purchase shares of the Company’s Common Stock, par value $0.001, at an exercise price of $1.10 per share. At December 31, 2019, 2,593,486 warrants were exercisable, respectively. Liquidation preference is 150% of the original issue price, which totaled $9,315,693 at December 31, 2019. The liquidation preference ranks in parity with Series A Preferred Stock. The holders of the Series B Convertible Preferred Stock are entitled to receive cash dividends, out of any assets available, prior to any declaration or payment of any dividend on any other class of preferred stock and common stock, we except that it is in parity with Series A Preferred stock, at an annual rate of 9% of the original issue price (equal to $0.10 per share per annum based on $0.73 per share purchase price). Such dividends are cumulative and convertible to common stock under the same terms as the Series A Preferred Stock. The cumulative dividend amounted to $2,179,134 as of March 31, 2020. We have not accrued this amount at December 31, 2019, as the dividends are not payable until when and if declared by the board. Each holder of Series B Preferred Stock shall be entitled to vote on all matters submitted to a vote of the stockholders of the Company and shall be entitled to that number of votes equal to the number of shares of Common Stock into which the holder's shares of Series B Preferred Stock could then be converted at the record date for the determination of stockholders entitled to vote on such matters or, if no such record date is established, at the date such vote is taken or any written consent of stockholders is solicited, and (b) the holders of shares of Series B Preferred Stock and Common Stock shall vote together (or tender written consents in lieu of a vote) as a single class on all matters submitted to the stockholders of the Company. Each share of Series B Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing the Series B original issue price ($1.10 per share) by the conversion price ($0.94 per share) in effect at the time of conversion, subject to certain dilution protections. The conversion price at which shares of Common Stock shall be deliverable upon conversion of Series B Preferred Stock without the payment of additional consideration by the holder thereof shall initially be $0.94 per share. All accrued and unpaid dividends may be converted by each holder of Series B Preferred Stock into Common Stock by first determining the number of shares of Series B Preferred Stock that could be purchased based on the Series B Original Issue Price then in effect and then determining the number of shares of Common Stock such additional shares of Series B Preferred Stock are convertible into. Upon the consummation of an underwritten public offering of the Common Stock of the Company ("IPO"), each share of Series B Preferred Stock shall automatically be converted into such number of fully paid and non-assessable shares of Common Stock at a conversion price equal to the lesser of (i) the conversion price in effect immediately prior to the consummation of the IPO or (ii) fifty percent (50%) of the public offering price of the Common Stock in the IPO. All accrued and unpaid dividends may be converted by each holder of Series B Preferred Stock into Common Stock by first determining the number of shares of Series B Preferred Stock that could be purchased based on the Series B original issue price then in effect and then determining the number of shares of common stock such additional shares of Series B Preferred Stock are convertible into. Concurrently with the consummation of the Merger, Series B Preferred Stock of 3,913,412 shares and accrued dividends of 1,702,449 shares were converted to shares of Splash common stock, which were exchanged for 7,653,979 CMS shares. Pursuant to the terms of the conversion agreements, these investors have the right to rescind the common shares received and receive preferred stock replacements shares if we fail to raise $9 million in a secondary initial public offering by September 30, 2020. These shares are still considered equity within the Stockholder’s Equity section of the condensed consolidated balance sheet. Undesignated Preferred Stock We have authorized a total of 27,258,436 shares of preferred stock, of which 8,177,531 of such authorized shares of preferred stock remain undesignated at December 31, 2019. At March 31, 2020 all remaining authorized preferred stock have been retired. Treasury Stock Since its inception, we have repurchased shares from our shareholders. To date, we have repurchased 1,226,630 shares, of which 817,753 have been retired. In connection with a 2018 consulting agreement, we are committed to issue the 408,877 shares held in treasury upon the occurrence of certain events or milestones. We issued 136,292 shares in July 2018, 136,292 shares in July 2019 and 136,292 shares at March 31, 2020. Warrant Issuance-Series A Convertible Preferred Stock As part of the sale and issuance of 4,088,765 shares of our Series A Convertible Preferred Stock, we issued 4,088,765 warrants to purchase shares of our common stock at a price of $0.73 per share. The warrants had a five-year term and expired during 2019. As an incentive to convert their Series A preferred stock we issued 1,000,000 new warrants to purchase shares of SBG common stock at $0.18 per share. Concurrently with the consummation of the Merger, these warrants were exchanged for 1,362,922 of CMS shares. These warrants have a 3-year term. Warrant Issuance-Series B Convertible Preferred Stock As part of the sale and issuance of 5,333,675 shares of our Series B Convertible Preferred Stock, we issued 2,666,839 warrants to purchase shares of our common stock at a price of $1.10 per share. The warrants have a 5-year term. At March 31, 2020, there are 1,935,409 warrants outstanding with a weighted average remaining life of 0.6 years. |
Share-Based Payments
Share-Based Payments | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Payments | Note 7 – Share-Based Payments Warrant Issuance-GMA Consulting Services We issued 1,362,922 warrants to purchase shares of our common stock at $0.007 per share as part of our consulting agreement with GMA, at December 31, 2019, the weighted average life of the outstanding warrants is 3.75 years. The warrants entitle the holder to purchase one share per warrant of the Company’s common stock at a price of $0.01 per share during the five-year period commencing on October 2, 2018, or, if greater, the number of common shares with a market value equivalent to two percent of the enterprise value of the Company at an exercise price of $0.008 per share. As an incentive for GMA to convert their debt and accrued interest into shares of common stock, we retired the original 1,362,922 warrants and issued 2,725,844 pre-merger new warrants to purchase shares of our common stock at $0.18 per share. These warrants have a 3-year term. Stock Plan We have adopted the 2012 Stock Incentive Plan for SBG (the “Plan”), which provides for the grant of common stock and stock options to employees. We have reserved 4,088,765 shares for issuance under the Plan. The option exercise price generally may not be less than the underlying stock’s fair market value at the date of the grant and generally have a term of ten years. On December 31, 2018, the sole option holder at the time, our CEO, exercised his options to purchase 2,657,698 shares of common stock at a purchase price of $0.12 per share, totaling $312,000, which total purchase price was paid by the cancelation of the equivalent amount of debt owed by us to the CEO. On December 7, 2019, our Board of Directors granted 1,124,410 options to certain employees and consultants. None of these options were exercised at March 31, 2020. There are 1,124,410 options issued and outstanding under the Plan at March 31, 2020. As of March 31, 2020, the total number of options available for grant is 306,657. We measure employee stock-based awards at the grant-date fair value and recognizes employee compensation expense on a straight-line basis over the vesting period of the award. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions, including the fair value of our common stock, and for stock options, the expected life of the option, and expected stock price volatility and exercise price. We used the Black-Scholes option pricing model to value its stock option awards. The assumptions used in calculating the fair value of stock- based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards. The expected life of stock options was estimated using the “simplified method,” which calculates the expected term as the midpoint between the weighted average time to vesting and the contractual maturity, we have limited historical information to develop reasonable expectations about future exercise patterns and employment duration for its stock options grants. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. For stock price volatility, we use comparable public companies as a basis for its expected volatility to calculate the fair value of options granted. The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected life of the option. The estimation of the number of stock awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from the Company’s current estimates, such amounts are recognized as an adjustment in the period in which estimates are revised. We recognized stock-based compensation expense of $265,589 for the year ended December 31, 2019. There was no unrecognized compensation cost related to stock option awards at March 31, 2020. Concurrently with the consummation of the Merger, options to purchase 825,000 SBC shares were converted to options to purchase 1,124,410 CMS shares. Options Weighted Average Exercise Price Outstanding - beginning of year 1,124,410 $ 0.73 Granted - Exercised - $ - Cancelled/forfeited - $ - Outstanding - March 31, 2020 1,124,410 $ 0.73 Exercisable at March, 31 2020 1,124,410 $ 0.73 Weighted average grant date fair value of options during year N/A Weighted average duration to expiration of outstanding options at March 31, 2020 4.8 |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Parties | Note 8 – Related Parties During the normal course of business, we incurred expenses related to services provided by our CEO or Company expenses paid by our CEO, resulting in related party payables, net of $473,057 as of March 31, 2020. The related party payable to the CEO bears no interest payable and is due on demand. We also assumed a $50,000 note for the President of WesBev who is the majority shareholder of CMS. There are related party notes payable of $0 outstanding as of March 31, 2020 as discussed in Note 4. |
Investment in Salt Tequila USA,
Investment in Salt Tequila USA, LLC | 3 Months Ended |
Mar. 31, 2020 | |
Investments, All Other Investments [Abstract] | |
Investment in Salt Tequila USA, LLC | Note 9 – Investment in Salt Tequila USA, LLC On December 9, 2013, we entered into a marketing and distribution agreement with SALT Tequila USA, LLC (“SALT”) in Mexico for the manufacturing of our product line. The agreement was for a one-year term with an additional two-year renewal. On December 28, 2015, the agreement was extended through 2020. In the December 9, 2013 agreement, we received a 5% ownership interest in SALT, 12 months after the date of the agreement we received an additional 5% ownership interest in SALT, and 24 months after the date of the agreement we received an additional 5% interest, resulting in a total interest of 15% in SALT. We have not recorded the cost of the investment or our share of its results of operations as the amounts are considered immaterial. SALT also has sold product to an unrelated international alcohol distributor, American Spirits Exchange, for preliminary market testing in 9 of 16 states that they distribute to, that are government-controlled alcohol resellers. In 2019 we had no sales for SALT Tequila. On December 31, 2018, we created a Mexican subsidiary, Splash MEX SA DE CV (“Splash Mex”) for the exporting of SALT Tequila from Mexico to the USA, South and Central Americas. Splash Mex will also act as the manufacturing and distribution agent of TapouT in Central and South Americas. Applications for the appropriate licenses required for import and wholesale of alcohol in the USA have been completed for at the Federal and State levels. These licenses will permit direct alcohol sales to distributors and wholesalers thereby limiting the use of agents for importing SALT Tequila to the USA for distribution. On March 26, 2020, we entered into a new amended stock sale and purchase agreement. The agreement is for $1,000,000 to be paid in 4 tranches of $250,000 and entitles us to additional equity interest in Salt Tequila USA, LLC as follows: ● Tranche 1 – 7.5% ● Tranche 2 – 5.0% ● Tranche 3 – 5.0% ● Tranche 4 – 5.0% Once all tranches are paid-out we will have a total equity stake of 37.5% of Salt Tequila USA, LLC. |
Operating Lease Obligations
Operating Lease Obligations | 3 Months Ended |
Mar. 31, 2020 | |
Notes to Financial Statements | |
Operating Lease Obligations | Note 10 – Operating Lease Obligations Effective July 2018, we entered into a lease agreement for the right to use and occupy office space. The lease term commenced July 1, 2018 and is scheduled to expire after 36 months, on June 30, 2021. Prior to the current lease, we entered into a lease agreement in 2014 for the right to use and occupy office space. The lease term commenced November 1, 2014 and was scheduled to expire after 62 months, on March 31, 2020. The lease was terminated in February 2018. Effective November 2019, we entered into a new lease agreement for our NY affiliate. The lease is for six months and will expire on April 30, 2020. This lease was not subjected to the new lease standard, Topic 842. Effective November 2019, we entered into a new lease with Interport Logistics, LLC. The lease term commenced on November 11, 2019 and is scheduled to expire on November 11, 2020. Effective May 2019, we entered into a new lease in Mexico. The lease commenced May 1, 2019 and is scheduled to expire after 24 months, on April 1, 2021. The following table presents the discounted present value of minimum lease payments for our office and warehouses to the amounts reported as financial lease liabilities on the condensed consolidated balance sheet at March 31, 2020: Undiscounted Future Minimum Lease Payments Operating Lease 2020 $ 78,483 2021 59,191 Thereafter 26,012 Total 163,686 Amount representing imputed interest (7,255 ) Total operating lease liability 156,431 Current portion of operating lease liability 92,304 Operating lease liability, non-current $ 64,127 The table below presents information for lease costs related to our operating leases at March 31, 2020: Operating lease cost: Amortization of leased assets $ 72,884 Interest of lease liabilities 7,657 Total operating lease cost $ 80,541 The table below presents lease-related terms and discount rates at March 31, 2020: Remaining term on leases 31 months Incremented borrowing rate 5.0% |
Line of Credit
Line of Credit | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Line of Credit | Note 11 – Line of Credit At March 31, 2020 CMS owed $72,000 to a financial institution under a revolving line of credit which is classified within other current liabilities. The line of credit is secured by the assets of CMS is due on demand, and bears interest at variable rates approximately 6.1% at March 31, 2020. Interest expense under the note was approximately $1,100 during the three months ended March 31, 2020. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Business Combinations | Note 12 – Business Combinations As stated in Note 1, we consummated the merger of CMS on March 31, 2020 which was accounted for as a reverse merger. The value of our merger was approximately $9.2 million based on the valuation of the CMS equity on the date of consummation. The following summarizes our allocation of the purchase price for the acquisition: Cash and cash equivalents $ 72,442 Accounts receivable $ 311,586 Inventory $ 21,415 Property and equipment $ 38,110 Goodwill $ 9,448,832 Accounts payable, accrued expenses and other liabilities $ 719,221 Purchase price $ 9,173,164 |
Commitment and Contingencies
Commitment and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment and Contingencies | Note 13 – Commitment and Contingencies We are a party to asserted claims and are subject to regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but we do not anticipate that the outcome, if any, arising out of any such matter will have a material adverse effect on its business, financial condition or results of operations. Capital Raise In connection with the merger we are committed to our previous preferred stock and debt holders to raise $9 million in a secondary IPO, as defined in the agreements. Stock Price Guarantee We have a commitment to issue additional shares associated with specific stock price guarantee granted to an investor. See Note 4. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation These condensed consolidated financial statements include the accounts of Splash Beverage Group and its wholly owned subsidiaries, Holdings and Splash Mex, in addition to the accounts of CMS at March 31, 2020, the merger consummation date. All intercompany balances have been eliminated in consolidation. Our accounting and reporting policies conform to accounting principles generally accepted in the United States of America (GAAP). The accompanying financial statements have been prepared by us without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the three months ended March 31, 2020 and 2019 have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these financial statements be read in conjunction with the consolidated financial statements and notes thereto included in our December 31, 2019 audited financial statements. The results of operations for the period ended March 31, 2020 are not necessarily indicative of the operating results for the full year. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash Equivalents and Concentration of Cash Balance | Cash Equivalents and Concentration of Cash Balance We consider all highly liquid securities with an original maturity of three months or less to be cash equivalents. We had no cash equivalents at March 31, 2020 or December 31, 2019. Our cash in bank deposit accounts, at times, may exceed federally insured limits of $250,000. At March 31, 2020 we had $247,004 over the federally insured limits. Our bank deposit accounts in Mexico are uninsured. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are carried at their estimated collectible amounts and are periodically evaluated for collectability based on past credit history with clients and other factors. We establish provisions for losses on accounts receivable on the basis of loss experience, known and inherent risk in the account balance, and current economic conditions. At March 31, 2020 and December 31, 2019, our accounts receivable amounts are reflected net of allowances of $ 403,215 and $11,430, respectively. |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value, accounted for using the weighted average cost method. The inventory balances at March 31, 2020 and December 31, 2019 consisted of finished goods held for distribution. The cost elements of inventory consist of purchase of products, transportation, and warehousing. We establish provisions for excess or inventory near expiration are based on management’s estimates of forecast turnover of inventories on hand and under contract. A significant change in the timing or level of demand for certain products as compared to forecast amounts may result in recording additional provisions for excess or expired inventory in the future. Provisions for excess inventory are included in cost of goods sold and have historically been adequate to provide for losses on inventory. We manage inventory levels and purchase commitments in an effort to maximize utilization of inventory on hand and under commitments. |
Property and Equipment | Property and Equipment We record property and equipment at cost when purchased. Depreciation is recorded for property, equipment, and software using the straight-line method over the estimated economic useful lives of assets, which range from 3-10 years. Company management reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable. Depreciation expense totaled $2,294 and $2,905 for the three months ended March 31, 2020 and March 31, 2019, respectively. Property and equipment as of March 31, 2020 and December 31, 2019 consisted of the following: March 31, December 31, Property and equipment, at cost 226,441 88,758 Accumulated depreciation (152,327 ) (51,029 ) Property and equipment, net 74,114 37,729 |
Licensing Agreements | Licensing Agreements We capitalize the costs for our licensing agreements with ABG TapouT, LLC and Salt Tequila USA, LLC, which are amortized to expense on a straight-line basis over the term of the agreements. The initial amount of the TapouT agreement as entered into by a related party prior to the Company’s assumption in 2013 was $4,000,000 to be paid over several years pursuant to a guaranteed minimum royalty agreement. Royalty costs incurred under the agreements, guaranteed minimum royalty amounts, are expensed as incurred. We have not made any payments to Salt Tequila USA, LLC under the licensing agreement due to the immaterial level of our sales to date from the brand. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial Accounting Standards (“FASB”) guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: Level Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities. Level Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active). Level Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable. The liabilities and indebtedness presented on the consolidated financial statements approximate fair values at March 31, 2020 and December 31, 2019, consistent with recent negotiations of notes payable and due to the short duration of maturities. |
Convertible Instruments | Convertible Instruments U.S. GAAP requires the bifurcation of certain conversion rights contained in convertible indebtedness and account for them as free standing derivative financial instruments according to certain criteria. This criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional as that term is described under applicable U.S. GAAP. When bifurcation is required, the embedded conversion options are bifurcated from the convertible note, resulting in the recognition of discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. With respect to convertible preferred stock, we record a dividend for the intrinsic value of conversion options embedded in preferred securities based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded in the preferred shares. |
Revenue recognition | Revenue Recognition We recognize revenue under ASC 606, Revenue from Contracts with Customers (Topic 606). This guidance sets forth a five-step model which depicts the recognition of revenue in an amount that reflects what we expect to receive in exchange for the transfer of goods or services to customers. We recognize revenue when our performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control of our products is transferred upon delivery to the customer. Revenue is measured as the amount of consideration that we expect to receive in exchange for transferring goods and is presented net of provisions for customer returns and allowances. The amount of consideration we receive and revenue we recognize varies with changes in customer incentives we offer to our customers and their customers. Sales taxes and other similar taxes are excluded from revenue. Distribution expenses to transport our products, where applicable, and warehousing expense after manufacture are accounted for within operating expenses. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold include the costs of products, packaging, transportation, warehousing, and costs associated with valuation allowances for expired, damaged or impaired inventory. |
Stock-Based Compensation | Stock-Based Compensation We account for stock-based compensation in accordance with ASC 718, “ Compensation - Stock Compensation” |
Income Taxes | Income Taxes We use the liability method of accounting for income taxes as set forth in ASC 740, “ Income Taxes” Company management assesses its income tax positions and records tax benefits for all years subject to examination based upon its evaluation of the facts, circumstances and information available at the reporting date. In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, our policy is to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements. Company management has determined that there are no material uncertain tax positions at March 31, 2020 and December 31, 2019. |
Net loss per share | Net loss per share The net loss per share is computed by dividing the net loss by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's convertible debt or preferred stock (if any), are not included in the computation if the effect would be anti-dilutive. There were no potentially dilutive debt or equity instruments issued or outstanding during the three months ended March 31, 2020 or 2019. |
Advertising | Advertising We conduct advertising for the promotion of our products. In accordance with ASC 720-35, advertising costs are charged to operations when incurred. |
Related Parties | Related Parties We are indebted to certain members of our Board of Directors at March 31, 2020 and December 31, 2019. Transactions between us and the Board members are summarized in Notes 4 and 8. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “ Leases We adopted the standard on January 1, 2019, using the modified retrospective method. The adoption of this standard resulted in recognition of a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, for all leases with a term greater than 12 months. When available, we would use the rate implicit in the lease to discount lease payments to present value. However, our leases generally do not provide a readily determinable implicit rate. Therefore, our management estimates the incremental borrowing rate to discount lease payments based on the information at the lease commencement. The accounting for finance leases is substantially unchanged. Given the nature of our operation, the adoption of Topic 842 did not have a material impact on our balance sheet, statement of income, or liquidity. Refer to Note 10 – Operating Lease Obligations for information regarding our adoption of Topic 842 and the Company’s undiscounted future lease payments and the timing of those payments. Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Property and equipment | Property and equipment as of March 31, 2020 and December 31, 2019 consisted of the following: March 31, December 31, Property and equipment, at cost 226,441 88,758 Accumulated depreciation (152,327 ) (51,029 ) Property and equipment, net 74,114 37,729 |
Notes Payable, Related Party _2
Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Notes Payables [Member] | |
Schedule of debt | Notes payable are generally nonrecourse and secured by all Company owned assets. Interest March 31, December 31, Notes Payable In October 2013, we entered into a short-term loan agreement with an entity in the amount of $25,000. The note matured and in March 2020 the full outstanding principal balance of $25,000 and unpaid accrued interest of $11,345 was converted into 234,767 shares of common stock according to the Merger Agreement. 7% $ - $ 25,000 In February 2014, we entered into a 12-month term loan agreement with an individual in the amount of $200,000. The note included warrants for 68,146 shares of common stock at $0.73 per share. The warrants expired on February 28, 2017 and none were exercised at that date. The note matured and remains unpaid. 15% 150,000 150,000 In March 2014, we entered into a 12-month term loan agreement with an individual in the amount of $500,000. The note included warrants for 681,461 shares of common stock at $0.92 per share. The warrants expired on February 28, 2017 and none were exercised at that date. The note matured and in March 2020 the full outstanding principal balance of $500,000 and unpaid accrued interest of $373,065 was converted into 1,124,802 shares of common stock according to the Merger Agreement. 15% - 500,000 In March 2014, we entered into a short-term loan agreement with an entity in the amount of $200,000. The note included warrants for 272,584 shares of common stock at $0.92 per share. The warrants expired on February 28, 2017 and none were exercised at that date. The loans matured and remain unpaid. 8% 200,000 200,000 $ 350,000 $ 875,000 |
Related Party Notes Payable [Member] | |
Schedule of debt | Interest March 31, December 31, Related Parties Notes Payable During 2012, we entered into two 6-month term loan agreements with an entity, totaling $150,000. The notes included warrants for 68,146 shares of common stock at $0.73 per share which expired unexercised in 2017. The note matured and in March 2020 the full outstanding principal balance of $41,500 and unpaid accrued interest of $31,515 was converted into 98,726 shares of common stock according to the Merger Agreement. 7% $ - $ 41,500 In March 2014, we entered into a $50,000 12-month term loan agreement. The note included warrants for 136,292 shares of common stock at $0.92 per share. The warrants expired unexercised on February 28, 2017. The note matured and in March 2020 the full outstanding principal balance of $50,000 and unpaid accrued interest of $24,145 was converted into 99,252 shares of common stock according to the Merger Agreement. 8% - 50,000 During 2015, we entered into a 12-month term loan agreement with an individual in the amount $250,000. The note matured and in March 2020 the full outstanding principal balance of $250,000 and unpaid accrued interest of $101,850 was converted into 98,726 shares of common stock according to the Merger Agreement. 8% - 250,000 In February 2012, we entered into a loan agreement with an officer of the Company in the amount of $100. On September 25, 2018 an additional $10,500 loan agreement was entered into. The note matured and in March 2020 the full outstanding principal balance of $10,600 and unpaid accrued interest of $1,189 was converted into 15,734 shares of common stock according to the merger agreement. 7% - 10,600 During 2013, 2014, 2015, and 2016, we entered into several 12-month term loan agreements with an officer of the Company in the amounts of $57,000, $225,000, $105,000, and $9,000, respectively. The note matured and in March 2020 the full outstanding principal balance of $396,000 and unpaid accrued interest of $146,828 was converted into 727,344 shares of common stock according to the Merger Agreement. 7% - 396,000 During 2012, 2013, 2014, and 2016, we entered into 6-month term loan agreements with an officer of the Company in the amounts of $155,000, $210,000, $150,000 and $40,000, all respectively. The notes included warrants for issuances of 204,438 shares of common stock at $0.92 per share. The warrants expired unexercised on March 1, 2017. The note matured and in March 2020 the full outstanding principal balance of $495,000 and unpaid accrued interest of $213,010 was converted into 942,504 shares of common stock according to the Merger Agreement. 7% - 495,000 During 2013, 2014 and 2017, we entered into 12-month term loan agreements with an officer of the Company in the amounts of $60,000, $50,000 and $10,000. The note matured and in March 2020 the full outstanding principal balance of $120,000 and unpaid accrued interest of $50,305 was converted into 228,328 shares of common stock according to the Merger Agreement. 7% - 120,000 During 2018, we entered into a long term note payable with an entity owned by an officer for $12,000 to be payable on July 10, 2020. The note matured and in March 2020 the full outstanding principal balance of $12,000 and unpaid accrued interest of $1,050 was converted into 17,407 shares of common stock according to the Merger Agreement. 12% - 12,000 During 2019, we entered into a term note payable with an entity owned by an officer for $130,000 to be paid on August 8, 2019. The note matured and in March 2020 the full outstanding principal balance of $130,000 and unpaid accrued interest of $9,078 was converted into 182,525 shares of common stock according to the Merger Agreement. 12% - 130,000 $ - $ 1,505,100 |
Convertible Bridge Loans Payable [Member] | |
Schedule of debt | Interest March 31, December 31, Convertible Bridge Loans Payable In May 2015, we entered into a 3-month term loan agreement with an individual in the amount of $100,000. The annual interest rate for this bridge loan was 32% for the first 90 days, and 4% thereafter, compounded monthly. See left $ 100,000 $ 100,000 In October 2015, we entered into a 3-month term loan agreement with two individuals in the amount of $25,000. On December 26, 2018, the outstanding principal and accrued interest of $14,388 was consolidated into a new $39,388 term loan due August 26, 2020. In March 2020 the full outstanding principal balance of $39,388 and unpaid accrued interest of $5,973 was converted into 59,694 shares of common stock according to the Merger Agreement. 12% - 39,388 In June 2015, we entered into a 3-month term loan with two individuals in the amount of $100,000. On December 26, 2018, the outstanding principal amount of $100,000 and accrued interest of $64,307 was consolidated into a new $164,307 term loan due August 26, 2020. In March 2020 the full outstanding principal balance of $164,307 and unpaid accrued interest of $24,916 was converted into 249,013 shares of common stock according to the Merger Agreement. 12% - 164,307 During 2016, 2017 and 2018, we entered into multiple loan agreements with an entity in varying amounts. On December 26, 2018, the outstanding principal of $235,500 and accrued interest of $155,861 was consolidated into a new $391,361 term due August 26, 2020. In March 2020 the full outstanding principal balance of $391,361 and unpaid accrued interest of $43,823 was converted into 435,184 shares of common stock according to the Merger Agreement. 12% - 391,361 During 2016, we entered into 3-month term loan agreements with an individual totaling $20,000. The loan was extended to August 14, 2020. In March 2020 the full outstanding principal balance of $20,000 and unpaid accrued interest of $10,096 was converted into 41,336 shares of common stock according to the Merger Agreement. 9% - 20,000 During 2014 through 2018, we entered into convertible promissory note agreements with various terms ranging from 90 days to 18 months at 18% interest with an entity which were consolidated into one loan at 12% in 2018 totaling $795,137 with a due date of August 26, 2020. In March 2020 the full outstanding principal balance of $795,137 and unpaid accrued interest of $89,037 was converted into 884,174 shares of common stock according to the Merger Agreement. 12% - 795,137 During 2015 and 2016, we entered into a series of 3-month term convertible promissory note agreements at 18% interest with an entity which were consolidated into one loan at 12% in 2018 totaling $692,471 with a due date of August 26, 2020. In March 2020 the full outstanding principal balance of $692,471 and unpaid accrued interest of $77,541 was converted into 770,012 shares of common stock according to the Merger Agreement. 12% - 692,471 $ 100,000 $ 2,202,664 |
Revenue Financing Arrangements [Member] | |
Schedule of debt | Interest March 31, December 31, Revenue Financing Arrangements During August 2015, we entered into a 3-month term loan agreement with an entity in the amount of $50,000, with required daily payments of $999. we entered into two additional 3-month loan agreements with the entity in 2016 in the amounts of $60,000 and $57,000, with required daily payments of $928 and $713, respectively. The term loans matured and remain unpaid. On February 23, 2017, the note holder filed a complaint against the Company for a promissory note in default. The note holder is requesting summary judgment in the amount of $65,978. 10% 28,032 28,032 During November 2016, we entered into a short-term loan agreement with an entity in the amount of $55,000 with required daily payments of $1,299. The note was in default as of December 31, 2018. In 2019, we entered into a settlement agreement with monthly installment payments of $6,000. The loan is scheduled to be fully repaid in 2020. 12% 17,435 17,435 $ 45,464 $ 45,464 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Options Activity | Options Weighted Average Exercise Price Outstanding - beginning of year 1,124,410 $ 0.73 Granted - Exercised - $ - Cancelled/forfeited - $ - Outstanding - March 31, 2020 1,124,410 $ 0.73 Exercisable at March, 31 2020 1,124,410 $ 0.73 Weighted average grant date fair value of options during year N/A Weighted average duration to expiration of outstanding options at March 31, 2020 4.8 |
Operating Lease Obligations (Ta
Operating Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Notes to Financial Statements | |
Maturities of lease liabilities | The following table presents the discounted present value of minimum lease payments for our office and warehouses to the amounts reported as financial lease liabilities on the condensed consolidated balance sheet at March 31, 2020: Undiscounted Future Minimum Lease Payments Operating Lease 2020 $ 78,483 2021 59,191 Thereafter 26,012 Total 163,686 Amount representing imputed interest (7,255 ) Total operating lease liability 156,431 Current portion of operating lease liability 92,304 Operating lease liability, non-current $ 64,127 |
Lease costs | The table below presents information for lease costs related to our operating leases at March 31, 2020: Operating lease cost: Amortization of leased assets $ 72,884 Interest of lease liabilities 7,657 Total operating lease cost $ 80,541 |
Summary of lease-related terms and discount rates | The table below presents lease-related terms and discount rates at March 31, 2020: Remaining term on leases 31 months Incremented borrowing rate 5.0% |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following summarizes our allocation of the purchase price for the acquisition: Cash and cash equivalents $ 72,442 Accounts receivable $ 311,586 Inventory $ 21,415 Property and equipment $ 38,110 Goodwill $ 9,448,832 Accounts payable, accrued expenses and other liabilities $ 719,221 Purchase price $ 9,173,164 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Property and equipment, at cost | $ 226,441 | $ 88,758 |
Accumulated depreciation | (152,327) | (51,029) |
Property and equipment, net | $ 74,114 | $ 37,729 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||
Depreciation expense | $ 2,294 | $ 2,905 | |
Accounts Receivable, net | 403,215 | $ 11,430 | |
Cash equivalents | 0 | $ 0 | |
Federally insured limits | $ 250,000 | ||
Potentially dilutive shares | 0 | 0 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Net losses | $ (3,446,630) | $ (703,624) | |
Accumulated deficit | (40,151,595) | $ (31,845,508) | |
Working capital | 2,300,000 | ||
Debt default | $ 600,000 |
Notes Payable, Related Party _3
Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing Arrangements (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Notes Payable | $ 350,000 | $ 875,000 |
Notes Payable 1 [Member] | ||
Interest Rate | 7.00% | |
Notes Payable | 25,000 | |
Principal amount | $ 25,000 | |
Maturity Date | Mar. 31, 2020 | |
Stock issued for conversion of debt, shares | 234,767 | |
Notes Payable 1 [Member] | Unpaid Accrued Interest | ||
Stock issued for conversion of debt | $ 25,000 | |
Notes Payable 1 [Member] | Principal | ||
Stock issued for conversion of debt | $ 11,345 | |
Notes Payable 2 [Member] | ||
Interest Rate | 15.00% | |
Notes Payable | $ 150,000 | 150,000 |
Principal amount | $ 200,000 | |
Warrant issued | 68,146 | |
Stock Price | $ 0.73 | |
Warrants expired date | Feb. 28, 2017 | |
Notes Payable 3 [Member] | ||
Interest Rate | 15.00% | |
Notes Payable | 500,000 | |
Principal amount | $ 500,000 | |
Maturity Date | Mar. 31, 2020 | |
Stock issued for conversion of debt, shares | 1,124,802 | |
Warrant issued | 681,461 | |
Stock Price | $ .92 | |
Warrants expired date | Feb. 28, 2017 | |
Notes Payable 3 [Member] | Unpaid Accrued Interest | ||
Stock issued for conversion of debt | $ 373,065 | |
Notes Payable 3 [Member] | Principal | ||
Stock issued for conversion of debt | $ 500,000 | |
Notes Payable 4 [Member] | ||
Interest Rate | 8.00% | |
Notes Payable | $ 200,000 | $ 200,000 |
Principal amount | $ 200,000 | |
Warrant issued | 272,584 | |
Stock Price | $ 0.92 | |
Warrants expired date | Feb. 28, 2017 |
Notes Payable, Related Party _4
Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing Arrangements (Details 1) - USD ($) | 3 Months Ended | |||||||
Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Related Parties Notes Payable | $ 1,505,100 | |||||||
Related Parties Notes Payable 1 [Member] | ||||||||
Interest Rate | 7.00% | |||||||
Related Parties Notes Payable | 41,500 | |||||||
Principal amount | $ 150,000 | |||||||
Maturity Date | Mar. 31, 2020 | |||||||
Stock issued for conversion of debt, shares | 98,726 | |||||||
Warrant issued | 68,146 | |||||||
Stock Price | $ 0.73 | |||||||
Warrants expired date | Dec. 31, 2017 | |||||||
Related Parties Notes Payable 1 [Member] | Principal | ||||||||
Stock issued for conversion of debt | $ 41,500 | |||||||
Related Parties Notes Payable 1 [Member] | Unpaid Accrued Interest | ||||||||
Stock issued for conversion of debt | $ 31,515 | |||||||
Related Parties Notes Payable 2 [Member] | ||||||||
Interest Rate | 8.00% | |||||||
Related Parties Notes Payable | 50,000 | |||||||
Principal amount | $ 50,000 | |||||||
Maturity Date | Mar. 31, 2020 | |||||||
Stock issued for conversion of debt, shares | 99,252 | |||||||
Warrant issued | 136,292 | |||||||
Stock Price | $ 0.92 | |||||||
Warrants expired date | Feb. 28, 2017 | |||||||
Related Parties Notes Payable 2 [Member] | Principal | ||||||||
Stock issued for conversion of debt | $ 50,000 | |||||||
Related Parties Notes Payable 2 [Member] | Unpaid Accrued Interest | ||||||||
Stock issued for conversion of debt | $ 24,145 | |||||||
Related Parties Notes Payable 3 [Member] | ||||||||
Interest Rate | 8.00% | |||||||
Related Parties Notes Payable | 250,000 | |||||||
Principal amount | $ 250,000 | |||||||
Maturity Date | Mar. 31, 2020 | |||||||
Stock issued for conversion of debt, shares | 98,726 | |||||||
Related Parties Notes Payable 3 [Member] | Principal | ||||||||
Stock issued for conversion of debt | $ 250,000 | |||||||
Related Parties Notes Payable 3 [Member] | Unpaid Accrued Interest | ||||||||
Stock issued for conversion of debt | $ 101,850 | |||||||
Related Parties Notes Payable 4 [Member] | ||||||||
Interest Rate | 7.00% | |||||||
Related Parties Notes Payable | 10,600 | |||||||
Principal amount | $ 10,600 | |||||||
Maturity Date | Mar. 31, 2020 | |||||||
Stock issued for conversion of debt, shares | 15,734 | |||||||
Related Parties Notes Payable 4 [Member] | Principal | ||||||||
Stock issued for conversion of debt | $ 10,600 | |||||||
Related Parties Notes Payable 4 [Member] | Unpaid Accrued Interest | ||||||||
Stock issued for conversion of debt | $ 1,189 | |||||||
Related Parties Notes Payable 5 [Member] | ||||||||
Interest Rate | 7.00% | |||||||
Related Parties Notes Payable | 396,000 | |||||||
Principal amount | $ 9,000 | $ 105,000 | $ 225,000 | $ 57,000 | ||||
Maturity Date | Mar. 31, 2020 | |||||||
Stock issued for conversion of debt, shares | 727,344 | |||||||
Related Parties Notes Payable 5 [Member] | Principal | ||||||||
Stock issued for conversion of debt | $ 396,000 | |||||||
Related Parties Notes Payable 5 [Member] | Unpaid Accrued Interest | ||||||||
Stock issued for conversion of debt | $ 146,828 | |||||||
Related Parties Notes Payable 6 [Member] | ||||||||
Interest Rate | 7.00% | |||||||
Related Parties Notes Payable | 495,000 | |||||||
Principal amount | $ 40,000 | 150,000 | 210,000 | $ 155,000 | ||||
Maturity Date | Mar. 31, 2020 | |||||||
Stock issued for conversion of debt, shares | 942,504 | |||||||
Warrant issued | 204,438 | |||||||
Stock Price | $ 0.92 | |||||||
Related Parties Notes Payable 6 [Member] | Principal | ||||||||
Stock issued for conversion of debt | $ 495,000 | |||||||
Related Parties Notes Payable 6 [Member] | Unpaid Accrued Interest | ||||||||
Stock issued for conversion of debt | $ 213,010 | |||||||
Related Parties Notes Payable 7 [Member] | ||||||||
Interest Rate | 7.00% | |||||||
Related Parties Notes Payable | 120,000 | |||||||
Principal amount | $ 10,000 | $ 50,000 | $ 60,000 | |||||
Maturity Date | Mar. 31, 2020 | |||||||
Stock issued for conversion of debt, shares | 228,328 | |||||||
Related Parties Notes Payable 7 [Member] | Principal | ||||||||
Stock issued for conversion of debt | $ 120,000 | |||||||
Related Parties Notes Payable 7 [Member] | Unpaid Accrued Interest | ||||||||
Stock issued for conversion of debt | $ 50,305 | |||||||
Related Parties Notes Payable 8 [Member] | ||||||||
Interest Rate | 12.00% | |||||||
Related Parties Notes Payable | 12,000 | |||||||
Principal amount | $ 12,000 | |||||||
Maturity Date | Mar. 31, 2020 | |||||||
Stock issued for conversion of debt, shares | 17,407 | |||||||
Related Parties Notes Payable 8 [Member] | Principal | ||||||||
Stock issued for conversion of debt | $ 12,000 | |||||||
Related Parties Notes Payable 8 [Member] | Unpaid Accrued Interest | ||||||||
Stock issued for conversion of debt | $ 1,050 | |||||||
Related Parties Notes Payable 9 [Member] | ||||||||
Interest Rate | 12.00% | |||||||
Related Parties Notes Payable | $ 130,000 | |||||||
Principal amount | $ 130,000 | |||||||
Maturity Date | Mar. 31, 2020 | |||||||
Stock issued for conversion of debt, shares | 182,525 | |||||||
Related Parties Notes Payable 9 [Member] | Principal | ||||||||
Stock issued for conversion of debt | $ 130,000 | |||||||
Related Parties Notes Payable 9 [Member] | Unpaid Accrued Interest | ||||||||
Stock issued for conversion of debt | $ 9,078 |
Notes Payable, Related Party _5
Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing Arrangements (Details 2) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Convertible Bridge Loans Payable | $ 100,000 | $ 2,202,664 |
Convertible Bridge Loans Payable 1 [Member] | ||
Interest Rate | 4.00% | |
Convertible Bridge Loans Payable | $ 100,000 | 100,000 |
Principal amount | $ 100,000 | |
Convertible Bridge Loans Payable 2 [Member] | ||
Interest Rate | 12.00% | |
Convertible Bridge Loans Payable | 39,388 | |
Principal amount | $ 39,388 | |
Stock issued for conversion of debt, shares | 59,694 | |
Convertible Bridge Loans Payable 2 [Member] | Principal | ||
Stock issued for conversion of debt | $ 39,388 | |
Convertible Bridge Loans Payable 2 [Member] | Unpaid Accrued Interest | ||
Stock issued for conversion of debt | $ 5,973 | |
Convertible Bridge Loans Payable 3 [Member] | ||
Interest Rate | 12.00% | |
Convertible Bridge Loans Payable | 164,307 | |
Principal amount | $ 164,307 | |
Stock issued for conversion of debt, shares | 249,013 | |
Convertible Bridge Loans Payable 3 [Member] | Principal | ||
Stock issued for conversion of debt | $ 164,307 | |
Convertible Bridge Loans Payable 3 [Member] | Unpaid Accrued Interest | ||
Stock issued for conversion of debt | $ 24,916 | |
Convertible Bridge Loans Payable 4 [Member] | ||
Interest Rate | 12.00% | |
Convertible Bridge Loans Payable | 391,361 | |
Principal amount | $ 391,361 | |
Maturity Date | Aug. 26, 2020 | |
Stock issued for conversion of debt, shares | 435,184 | |
Convertible Bridge Loans Payable 4 [Member] | Principal | ||
Stock issued for conversion of debt | $ 391,361 | |
Convertible Bridge Loans Payable 4 [Member] | Unpaid Accrued Interest | ||
Stock issued for conversion of debt | $ 43,823 | |
Convertible Bridge Loans Payable 5 [Member] | ||
Interest Rate | 9.00% | |
Convertible Bridge Loans Payable | 20,000 | |
Principal amount | $ 20,000 | |
Stock issued for conversion of debt, shares | 41,336 | |
Convertible Bridge Loans Payable 5 [Member] | Principal | ||
Stock issued for conversion of debt | $ 20,000 | |
Convertible Bridge Loans Payable 5 [Member] | Unpaid Accrued Interest | ||
Stock issued for conversion of debt | $ 10,096 | |
Convertible Bridge Loans Payable 6 [Member] | ||
Interest Rate | 12.00% | |
Convertible Bridge Loans Payable | 795,137 | |
Principal amount | $ 795,137 | |
Maturity Date | Aug. 26, 2020 | |
Stock issued for conversion of debt, shares | 884,174 | |
Convertible Bridge Loans Payable 6 [Member] | Principal | ||
Stock issued for conversion of debt | $ 795,137 | |
Convertible Bridge Loans Payable 6 [Member] | Unpaid Accrued Interest | ||
Stock issued for conversion of debt | $ 89,037 | |
Convertible Bridge Loans Payable 7 [Member] | ||
Interest Rate | 12.00% | |
Convertible Bridge Loans Payable | $ 692,471 | |
Principal amount | $ 692,471 | |
Maturity Date | Aug. 26, 2020 | |
Stock issued for conversion of debt, shares | 770,012 | |
Convertible Bridge Loans Payable 7 [Member] | Principal | ||
Stock issued for conversion of debt | $ 692,471 | |
Convertible Bridge Loans Payable 7 [Member] | Unpaid Accrued Interest | ||
Stock issued for conversion of debt | $ 77,541 |
Notes Payable, Related Party _6
Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing Arrangements (Details 3) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2016 | Dec. 31, 2019 | |
Revenue Financing Arrangements | $ 45,467 | $ 45,467 | |
Revenue Financing Arrangements 1 [Member] | |||
Interest Rate | 10.00% | ||
Revenue Financing Arrangements | $ 28,032 | 28,032 | |
Principal amount | 50,000 | $ 57,000 | |
Daily payments | $ 999 | ||
Revenue Financing Arrangements 2 [Member] | |||
Interest Rate | 12.00% | ||
Revenue Financing Arrangements | $ 17,435 | $ 17,435 | |
Principal amount | 55,000 | ||
Daily payments | $ 1,299 | ||
Revenue Financing Arrangements First [Member] | |||
Principal amount | 60,000 | ||
Daily payments | 928 | ||
Revenue Financing Arrangements Second [Member] | |||
Daily payments | $ 713 |
Notes Payable, Related Party _7
Notes Payable, Related Party Notes Payable, Revenue Financing Arrangements (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Accrued interest | $ 826,393 | $ 1,604,498 | |
Notes Payables [Member] | |||
Interest expense | 49,430 | $ 28,813 | |
Accrued interest | 235,380 | ||
Related Parties Notes Payable [Member] | |||
Interest expense | 37,967 | 24,814 | |
Accrued interest | 0 | ||
Convertible Bridge Loans Payable [Member] | |||
Interest expense | 93,785 | 70,480 | |
Accrued interest | 147,215 | ||
Revenue Financing Arrangements [Member] | |||
Interest expense | 25,067 | $ 1,723 | |
Accrued interest | 39,221 | ||
Bridge Loan Payable [Member] | |||
Interest expense | 49,584 | ||
Accrued interest | $ 0 |
Licensing Agreement and Royal_2
Licensing Agreement and Royalty Payable (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Notes to Financial Statements | |||
Payment for Licensing | $ 45,000 | $ 39,000 | |
Minimum royalty payments | 135,000 | $ 117,000 | |
Unpaid amount of royalties | $ 45,000 | $ 39,000 |
Deficiency in Stockholders_ Equ
Deficiency in Stockholders’ Equity (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jul. 31, 2019 | Jul. 31, 2018 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock issued in exchange for services, shares | 817,753 | 1,846,078 | ||||
Share Price | $ 0.73 | $ 0.73 | ||||
Stock issued in exchange for services, value | $ 600,000 | $ 1,354,500 | ||||
Treasury stock repurchased | 1,226,630 | |||||
Treasury stock retired | 817,753 | |||||
Stock held in treasury | 408,877 | |||||
Treasury Stock issued | 136,292 | 136,292 | 136,292 | |||
Series A Convertible Preferred Stock [Member] | ||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||
Preferred stock, issued shares | 0 | 3,000,000 | ||||
Preferred stock, outstanding shares | 0 | 3,000,000 | ||||
Preferred Stock, Liquidation Preference, Value | $ 4,500,000 | $ 4,500,000 | ||||
Dividend | $ 1,364,361 | |||||
Number of stock converted | 3,000,000 | |||||
Number of common stock issued | 6,276,432 | |||||
Warrant term | 5 years | |||||
Warrant issued | 4,088,765 | |||||
Stock Price | $ .73 | |||||
Series A Convertible Preferred Stock [Member] | Accrued Dividends [Member] | ||||||
Number of stock converted | 1,605,130 | |||||
Series A Convertible Preferred Stock [Member] | SBG [Member] | ||||||
Warrant term | 3 years | |||||
Warrant issued | 1,000,000 | |||||
Stock Price | $ 0.18 | |||||
Warrants exchanged | 1,362,922 | |||||
Series B Convertible Preferred Stock [Member] | ||||||
Stock issued in exchange for services, shares | 180,459 | 675,873 | ||||
Share Price | $ 1.10 | $ 1.10 | ||||
Stock issued in exchange for services, value | $ 198,609 | $ 736,350 | ||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||
Preferred stock, issued shares | 0 | 3,913,412 | ||||
Preferred stock, outstanding shares | 0 | 3,913,412 | ||||
Preferred Stock, Liquidation Preference, Value | $ 9,315,693 | |||||
Dividend | $ 2,179,134 | |||||
Number of stock converted | 913,430 | |||||
Number of common stock issued | 7,653,970 | |||||
Common stock issued | 90,230 | 337,936 | ||||
Warrant term | 5 years | 5 years | 5 years | |||
Warrant exercise price | $ 1.10 | $ 1.10 | ||||
Warrant issued | 5,333,675 | |||||
Stock Price | $ 1.10 | |||||
Warrants Outstanding | 1,935,409 | 2,593,486 | ||||
Series B Convertible Preferred Stock [Member] | Accrued Dividends [Member] | ||||||
Number of stock converted | 1,702,449 | |||||
Undesignated Preferred Stock[Member] | ||||||
Preferred stock, authorized shares | 27,258,436 |
Share-Based Payments (Details)
Share-Based Payments (Details) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Stock options outstanding, beginning balance | shares | 1,124,410 |
Stock options Granted | shares | |
Stock options exercised | shares | |
Stock options Cancelled/forfeited | shares | |
Stock options outstanding, ending balance | shares | 1,124,410 |
Stock options exercisable | shares | 1,124,410 |
Weighted average exercise price, outstanding | $ / shares | $ 0.73 |
Weighted average exercise price, exercised | $ / shares | |
Weighted average exercise price, Cancelled/forfeited | $ / shares | |
Weighted average exercise price, outstanding | $ / shares | 0.73 |
Weighted average exercise price, exercisable | $ / shares | 0.73 |
Weighted average grant date fair value of options during year | $ / shares | |
Weighted average duration to expiration of outstanding options | 4 years 9 months 18 days |
Share-Based Payments (Details N
Share-Based Payments (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Stock price | $ 0.73 | $ 0.73 | |
Number of option exercised | |||
Stock based compensation expense | |||
Stock Plan | |||
Stock price | $ 0.16 | ||
Reserved shares for issuance under the Plan | 4,088,765 | ||
Grant term | 10 years | ||
Number of option exercised | 2,657,698 | ||
Proceeds from Stock Options Exercised | $ 312,000 | ||
Options issued and outstanding | 1,124,410 | ||
Number of options available for grant | 306,657 | ||
Stock based compensation expense | $ 265,589 | ||
Unrecognized compensation cost | $ 0 | ||
GMA | |||
Warrant Issued for consulting Services | 1,362,922 | ||
Common stock price | $ 0.007 | ||
Weighted average life of outstanding warrants | 3 years 9 months | ||
Exercise price | $ 0.008 | ||
Warrant retired | 1,362,922 | ||
Warrant pre-merger issued | 2,725,844 | ||
Stock price | $ 0.18 | ||
Warrants term | 3 years | ||
Employees And Consultants | |||
Option granted | 1,124,410 |
Related Parties (Details Narrat
Related Parties (Details Narrative) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Related party payables | $ 1,505,100 | |
WesBev | ||
Related party payables | 50,000 | |
Chief Executive Officer [Member] | ||
Related party payables | $ 473,057 |
Investment in Salt Tequila US_2
Investment in Salt Tequila USA, LLC (Details Narrative) - Salt [Member] | 3 Months Ended |
Mar. 31, 2020 | |
Ownership interest | 15.00% |
Equity stake percentage | 37.50% |
Stock sale description | The agreement is for $1,000,000 to be paid in 4 tranches of $250,000 and entitles us to additional equity interest in Salt Tequila USA, LLC as follows: • Tranche 1 – 7.5% • Tranche 2 – 5.0% • Tranche 3 – 5.0% • Tranche 4 – 5.0% |
Operating Lease Obligations (De
Operating Lease Obligations (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Notes to Financial Statements | ||
2020 | $ 78,483 | |
2021 | 59,191 | |
Thereafter | 26,012 | |
Total | 163,686 | |
Amount representing imputed interest | (7,255) | |
Total operating lease liability | 156,431 | |
Current portion of operating lease liability | 92,304 | $ 81,502 |
Operating lease liability, non-current | $ 64,127 | $ 82,238 |
Operating Lease Obligations (_2
Operating Lease Obligations (Details 1) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Operating lease cost: | |
Amortization of leased assets | $ 72,884 |
Interest of lease liabilities | 7,657 |
Total operating lease cost | $ 80,541 |
Operating Lease Obligations (_3
Operating Lease Obligations (Details 2) | Mar. 31, 2020 |
Notes to Financial Statements | |
Remaining term on leases | 31 months |
Incremented borrowing rate | 5.00% |
Operating Lease Obligations (_4
Operating Lease Obligations (Details Narrative) | 3 Months Ended |
Mar. 31, 2020 | |
Operating lease term | 31 months |
First Lease [Member] | |
Lease commencement date | Jul. 1, 2018 |
Lease expiration date | Jun. 30, 2021 |
Operating lease term | 36 months |
Second Lease [Member] | |
Lease commencement date | Nov. 1, 2014 |
Lease expiration date | Mar. 31, 2020 |
Operating lease term | 62 months |
Lease termination date | Feb. 28, 2018 |
Third Lease [Member] | |
Lease commencement date | Nov. 1, 2019 |
Lease expiration date | Apr. 30, 2020 |
Operating lease term | 6 months |
Fourth Lease [Member] | |
Lease commencement date | Nov. 11, 2019 |
Lease expiration date | Nov. 11, 2020 |
Fifth Lease [Member] | |
Lease commencement date | May 1, 2019 |
Lease expiration date | Apr. 1, 2021 |
Operating lease term | 24 months |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Debt Disclosure [Abstract] | |
Line of credit | $ 72,000 |
Interest rate | 6.10% |
Interest expense | $ 1,100 |
Business Combinations (Details)
Business Combinations (Details) | Mar. 31, 2020USD ($) |
Business Combinations [Abstract] | |
Cash and cash equivalents | $ 72,442 |
Accounts receivable | 311,586 |
Inventory | 21,415 |
Property and equipment | 38,110 |
Goodwill | 9,448,832 |
Accounts payable, accrued expenses and other liabilities | 719,221 |
Purchase price | $ 9,173,164 |
Business Combinations (Details
Business Combinations (Details Narrative) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Business Combinations [Abstract] | |
Purchase price | $ 9,200,000 |
Commitment and Contingencies (D
Commitment and Contingencies (Details Narrative) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Capital Raise Description | In connection with the merger we are committed to our previous preferred stock and debt holders to raise $9 million in a secondary IPO, as defined in the agreements. |