GrowGeneration (GRWG) 10-Q 2 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 02, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	GrowGeneration Corp.
Entity Central Index Key	1,604,868
Amendment Flag	false
Trading Symbol	GRWG
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		14,511,406

Consolidated Balance Sheet

Consolidated Balance Sheet - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Current assets:
Cash	$ 2,155,092	$ 606,644
Accounts receivable, net of allowance for doubtful accounts of $47,829 at June 30, 2017 and December 31, 2016	542,228	391,235
Inventory	4,436,136	2,574,438
Prepaid expenses and other current assets	547,745	35,256
Total current assets	7,681,201	3,607,573
Property and equipment, net	954,878	549,854
Intangible assets, net	18,811
Goodwill	523,000	243,000
Other assets	58,325	42,526
TOTAL ASSETS	9,236,215	4,442,953
Current liabilities:
Accounts payable	1,475,722	643,793
Payroll and payroll tax liabilities	114,233	77,068
Customer deposits	28,860	51,672
Sales tax payable	91,019	46,942
Current portion of long term debt	62,896	23,443
Total current liabilities	1,772,730	842,918
Long term debt, net of current portion	100,889	41,726
Total liabilities	1,873,619	884,644
Commitments and contingencies
Stockholders' Equity:
Common stock; $.001 par value; 100,000,000 shares authorized; 14,591,406 and 11,742,834 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively	14,591	11,743
Additional paid-in capital	9,121,345	4,696,221
Accumulated deficit	(1,773,340)	(1,149,655)
Total stockholders' equity	7,362,596	3,558,309
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 9,236,215	$ 4,442,953

Consolidated Balance Sheet (Par

Consolidated Balance Sheet (Parenthetical) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Allowance for accounts receivable	$ 47,829	$ 47,829
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	14,591,406	11,742,834
Common stock, shares outstanding	14,591,406	11,742,834

Consolidated Statement of Opera

Consolidated Statement of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Statement [Abstract]
Sales	$ 4,111,036	$ 1,906,998	$ 6,694,959	$ 3,448,597
Cost of sales	2,960,275	1,337,093	4,863,340	2,386,993
Gross profit	1,150,761	569,905	1,831,619	1,061,604
Operating expenses:
Store operations	750,000	381,232	1,297,323	686,749
General and administrative	225,092	117,830	406,824	183,845
Share based compensation	325,408	98,000	402,408	184,333
Depreciation and amortization	19,524	11,121	40,047	21,023
Salaries and related expenses	168,502	104,290	304,941	206,516
Total operating expenses	1,488,526	712,473	2,451,543	1,282,466
Income (loss) from operations	(337,765)	(142,568)	(619,924)	(220,862)
Other income (expense):
Interest expense	(2,610)	(1,113)	(3,761)	(1,665)
Total non-operating expense, net	(2,610)	(1,113)	(3,761)	(1,665)
Net income (loss)	$ (340,375)	$ (143,681)	$ (623,685)	$ (222,527)
Net income (loss) per shares, basic and diluted	$ (0.02)	$ (0.02)	$ (0.05)	$ (0.02)
Weighted average shares outstanding, basic and diluted	14,045,692	9,481,405	13,357,823	9,369,740

Consolidated Statement of Cash

Consolidated Statement of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities:
Net loss	$ (623,685)	$ (222,527)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for doubtful accounts receivable		3,688
Depreciation and amortization	40,047	21,023
Commission, non-cash		35,000
Stock-based compensation expense	402,408	184,333
Inventory valuation reserve		(9,873)
(Increase) decrease in:
Accounts receivable	(150,993)	(113,654)
Inventory	(1,861,698)	(828,768)
Prepaid expenses and other assets	(267,022)	12,076
Increase (decrease) in:
Accounts payable	831,929	168,803
Payroll and payroll tax liabilities	37,165	15,609
Customer deposits	(22,812)	(7,548)
Sales tax payable	44,077	14,444
Net cash used in operating activities	(1,570,584)	(727,392)
Cash flows from investing activities:
Purchase of furniture and equipment	(359,543)	(196,640)
Purchase of intangibles	(299,371)
Net cash used in investing activities	(658,914)	(196,640)
Cash flows from financing activities:
Principal payments on long term debt	(16,718)	(4,626)
Proceeds from long term debt	0	56,569
Proceeds from the sale of common stock and warrants, net of expenses	3,794,664	623,500
Net cash provided by financing activities	3,777,946	675,443
Net increase (decrease) in cash	1,548,448	(248,589)
Cash at the beginning of period	606,644	699,417
Cash at the end of period	2,155,092	450,828
Supplemental disclosures of cash flow information:
Cash paid for interest	3,761	1,666
Common stock and warrants issued for prepaid services	251,890
Acquisition of vehicles with debt financing	84,968
Insurance premium financing	30,366
Taxes paid

Nature of Operations

Nature of Operations	6 Months Ended
	Jun. 30, 2017
Nature of Operations [Abstract]
NATURE OF OPERATIONS	1. NATURE OF OPERATIONS GrowGeneration Corp. (the “Company”) was incorporated on March 6, 2014 in Colorado under the name of EasyLife Corp. and changed its name to GrowGeneration Corp. It maintains its principal office in Denver, Colorado. The Company is engaged in the business of owning and operating retail hydroponic stores through its wholly owned subsidiaries, GrowGeneration Pueblo Corp, GrowGeneration California Corp, GrowGeneration Nevada Corp, GrowGeneration Washington Corp, and GGen Distribution Corp. The Company commenced operation with the purchase of four retail hydroponic stores in Pueblo and Canon City, Colorado on May 30, 2014. The Company currently owns and operates a total of 13 stores and is actively engaged in seeking to acquire and open additional hydroponic retail stores.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2017
Summary of Significant Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The Company’s financial statements are prepared on the accrual method of accounting. The accounting and reporting policies of the Company conform to generally accepted accounting principles (GAAP). The consolidated financial statements of the Company included the accounts of GrowGeneration Pueblo Corp, GrowGeneration California Corp, GrowGeneration Nevada Corp, GrowGeneration Washington Corp and GGen Distribution Corp. All material intercompany accounts, balances and transactions have been eliminated in consolidation. The various products sold support each other and are interrelated. Management makes significant operating decisions based upon the analysis of the entire Company and financial performance is evaluated on a company-wide basis. Accordingly, the various products sold are aggregated into one reportable operating segment as under guidance in the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC or “codification”) Topic 28 for segment reporting. Basis of Presentation - Unaudited Interim Financial Information The accompanying interim condensed consolidated financial statements are unaudited. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all of the normal recurring adjustments necessary to present fairly the financial position and results of operations as of and for the periods presented. The interim results are not necessarily indicative of the results to be expected for the full year or any future period. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company believes that the disclosures are adequate to make the interim information presented not misleading. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Report on Form 10-K filed on March 31, 2017 for the years ended December 31, 2016 and 2015. Reclassifications Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported consolidated net income (loss). Use of Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported revenues and expenses during the reporting period. Actual results could vary from the estimates that were used. Income Taxes The Company accounts for income taxes in accordance with FASB ACS 740, Income Taxes, which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. The differences related principally to depreciation of property and equipment, reserve for obsolete inventory and bad debt. Deferred tax assets and liabilities represent the future tax consequence for those differences, which will either be deductible or taxable when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established to reduce deferred tax assets to the amount expected to be realized. The Company adopted the provisions of FASB ACS 740-10-25, which prescribes a recognition threshold and measurement attribute for the recognition and measurement of tax positions taken or expected to be taken in income tax returns. FASB ASC 740-10-25 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with tax positions. The Company’s tax returns are subject to tax examinations by U.S. federal and state authorities until respective statute of limitation. Currently, the 2016, 2015 and 2014 tax years are open and subject to examination by taxing authorities. However, the Company is not currently under audit nor has the Company been contacted by any of the taxing authorities. The Company does not have any accrual for uncertain tax positions as of June 30, 2017. It is not anticipated that unrecognized tax benefits would significantly increase or decrease within 12 months of the reporting date.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	6 Months Ended
	Jun. 30, 2017
Recent Accounting Pronouncements [Abstract]
RECENT ACCOUNTING PRONOUNCEMENTS	3. RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued guidance creating the ASC Section 606, “Revenue from Contracts with Customers”. The new section will replace Section 605, “Revenue Recognition” and creates modifications to various other revenue accounting standards for specialized transactions and industries. The section is intended to conform revenue accounting principles with a concurrently issued International Financial Reporting Standards with previously differing treatment between United States practice and those of much of the rest of the world, as well as, to enhance disclosures related to disaggregated revenue information. The updated guidance was effective for annual reporting periods beginning on or after December 15, 2016, and interim periods within those annual periods. On July 9, 2015, the FASB approved a one year delay of the effective date. The Company will now adopt the new provisions of this accounting standard at the beginning of fiscal year 2018. In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory.” Under this ASU, inventory will be measured at the “lower of cost and net realizable value” and options that currently exist for “market value” will be eliminated. The ASU defines net realizable value as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” No other changes were made to the current guidance on inventory measurement. ASU 2015-11 is effective for interim and annual periods beginning after December 15, 2016. This update was adopted by the Company in the first quarter of fiscal year 2017. There was no material impact on the Company's consolidated financial statements as a result of the adoption of this accounting standard. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes”. The new guidance eliminates the requirement to separate deferred income tax liabilities and assets into current and noncurrent amounts. The amendments will require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The updated guidance will be effective for fiscal years beginning after December 15, 2016, including interim periods within those annual periods. The adoption of this standard did not have a material impact on the consolidated financial statements. In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued new guidance related to leases that outlines a comprehensive lease accounting model and supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms of great than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. The new guidance must be adopted using the modified retrospective approach and will be effective for the Company starting in the first quarter of fiscal 2019. Early adoption is permitted. The Company is in the process of determining the effects the adoption will have on its consolidated financial statements as well as whether to adopt the new guidance early. In March 2016, the FASB issued Accounting Standards Update 2016-09, Improvements to Employee Share-Based Payment Accounting In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04 simplifying the accounting for goodwill impairment for all entities. The new guidance eliminates the requirement to calculate the implied fair value of goodwill (Step 2 of the current two-step goodwill impairment test under ASC 350). Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (Step 1 of the current two-step goodwill impairment test). The ASU is effective prospectively for reporting periods beginning after December 15, 2019, with early adoption permitted for annual and interim goodwill impairment testing dates after January 1, 2017. We are currently evaluating the impact of the new guidance on our goodwill impairment testing process and consolidated financial statements.

Property and Equipment

Property and Equipment	6 Months Ended
	Jun. 30, 2017
Property and Equipment [Abstract]
PROPERTY AND EQUIPMENT	4. PROPERTY AND EQUIPMENT June 30, 2017 December 31, Vehicles $ 230,809 $ 102,014 Leasehold improvements 167,074 131,411 Furniture, fixtures and equipment 669,449 389,396 1,067,332 622,821 (Accumulated depreciation) (112,454 ) (72,967 ) Property and Equipment, net $ 954,878 $ 549,854 Depreciation expense for the three months ended June 30, 2017 and 2016 was $19,444 and $11,121 respectively and for the six months ended June 30, 2017 and 2016 was $39,487 and $21,023, respectively.

Other Commitments

Other Commitments	6 Months Ended
	Jun. 30, 2017
Other Commitments [Abstract]
OTHER COMMITMENTS	5. OTHER COMMITMENTS Effective May 12, 2014, the Company entered into three-year employment agreements with its CEO and President which are automatically renewed annually for a term of one year unless the Company or the Executive gives notice to the other of termination at least six (6) months prior to the expiration of the initial term, or any successive term. The agreements require payment of monthly wages and benefits. The employment agreement automatically renewed for an additional one year term effective May 12, 2017. In April and May 2017, the Company also entered into three-year employment agreements with its COO and CFO, respectfully. These agreements require payment of monthly wages and benefits.

Long-Term Debt

Long-Term Debt	6 Months Ended
	Jun. 30, 2017
Long-Term Debt [Abstract]
LONG-TERM DEBT	6. LONG-TERM DEBT June 30, December 31, 2017 2016 Long term debt is as follows: Chrysler Capital, interest ranging from 9.8% and 10.9% per annum, payable in monthly installments of $1,889.59 beginning May 2017 through June 2022, secured by vehicles with a book value of $128,800 $ 87,071 $ - Hitachi Capital, interest at 8.0% per annum, payable in monthly installments of $631.13 beginning September 2015 through August 2019, secured by delivery equipment with a book value of $24,910 15,020 18,133 Wells Fargo Equipment Finance, interest at 3.5% per annum, payable in monthly installments of $518.96 beginning April 2016 through March 2021, secured by warehouse equipment with a book value of $25,437 21,401 24,559 RMT Equipment, interest at 10.9% per annum, payable in monthly installments of $1,154.79 beginning June 2016 through October 2018, secured by delivery equipment with a book value of $31,130 16,583 22,477 Note payable insurance premium financing, interest at 4.74% per annum, payable in 10 installments of $3,441, due January 2018 23,710 - $ 163,785 $ 65,169 Less Current Maturities (62,896 ) (23,443 ) Total Long-Term Debt $ 100,889 $ 41,726 Interest expense for the three months ended June 30, 2017 and 2016 was $2,610 and $1,113, respectively and for the six months ended June 30, 2017 and 2016 was $3,761 and $1,665, respectively.

Share Based Payments and Stock

Share Based Payments and Stock Options	6 Months Ended
	Jun. 30, 2017
Share Based Payments and Stock Options [Abstract]
SHARE BASED PAYMENTS AND STOCK OPTIONS	7 . SHARE BASED PAYMENTS AND STOCK OPTIONS The Company accounts for share-based payments through the measurement and recognition of compensation expense for share-based payment awards made to employees and directors of the Company, including stock options and restricted shares. The following table presents share-based payment expense and new shares issued for the three and six months ended June 30, 2017 and 2016. Three Months Ended Six Months Ended 2017 2016 2017 2016 Restricted shares issued 205,000 140,000 205,000 140,000 Shares based expense from issuance of common stock $ 268,990 $ 98,000 $ 345,990 $ 98,000 Shares based expense from issuance of common stock options $ 56,418 - $ 56,418 $ 86,333 Total $ 325,408 $ 98,000 $ 402,408 $ 184,333 On March 6, 2014, the Company’s Board of Directors (the “Board”) and majority stockholders approved the 2014 Equity Incentive Plan pursuant to which the Company may grant incentive and non-statutory options to employees, nonemployee members of the Board, consultants and other independent advisors who provide services to the Company. The maximum shares of common stock which may be issued over the term of the plan shall not exceed 2,500,000 shares. Awards under the plan are made by the Board or a committee of the Board. Options under the plan are to be issued at the market price of the stock on the day of the grant except to those issued to holders of 10% or more of the Company’s common stock which is required to be issued at a price not less than 110% of the fair market value on the day of the grant. Each option is exercisable at such time or times, during such period and for such numbers of shares shall be determined by the plan administrator. However, no option shall have a term in excess of 5 years from the date of grant. Options outstanding at June 30, 2017 are as follows: Options Shares Weight - Average Exercise Price Weighted - Average Remaining Contractual Term Outstanding at December 31, 2016 1,872,000 $ 0.62 2.27 years Granted 150,000 $ 1.84 Exercised - - Forfeited or expired - - Outstanding at June 30, 2017 2,022,000 $ .69 2.01 years Options vested at June 30, 2017 1,922,000 $ .69

Stock Purchase Warrants

Stock Purchase Warrants	6 Months Ended
	Jun. 30, 2017
Stock Purchase Warrants [Abstract]
STOCK PURCHASE WARRANTS	8 . STOCK PURCHASE WARRANTS During the six months ended June 30, 2017, the Company granted 825,000 warrants to investors in a private placement and 100,000 warrants to an advisor pursuant to certain advisor agreement. These warrants are exercisable for a period of five years with an exercise price of $2.75. A summary of the status of the Company’s outstanding stock warrants as of June 30, 2017 is as follows: Warrants Weighted - Average Exercise Price Outstanding December 31, 2016 3,885,729 $ 0.70 Granted 2,225,000 2.75 Exercised (718,572 ) 0.70 Forfeited - - Outstanding June 30, 2017 5,392,157 $ 1.50

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Jun. 30, 2017
Stockholders' Equity [Abstract]
STOCKHOLDERS' EQUITY	9. STOCKHOLDERS’ EQUITY Common Stock The Company’s current Certificate of Incorporation authorizes the Company to issued 100,000,000 shares of common stock, par value $0.001 per share. As of June 30, 2017, there were 14,511,406 shares of common stock outstanding. 2017 Equity Transactions During the six months ended June 30, 2017 the Company sold a total of 1,825,000 units, consisting of one share of $.001 par value common stock and one common stock warrant, for net proceeds after offering costs of $3,291,565. During the six months ended June 30, 2017, warrants to purchase 718,572 shares of $.001 par value common stock were exercised resulting in proceeds to the Company of $503,000. During the six months ended June 30, 2017, the Company issued 125,000 shares of $.001 par value common stock to employees and consultants valued at $248,000. During the six months ended June 30, 2017, the Company issued 100,000 shares of $.001 par value common stock and 100,000 warrants for consulting services valued at $77,000. During the six months ended June 30, 2017, the Company issued 80,000 shares of $.001 par value common stock and 150,000 warrants for prepaid consulting services valued at $251,890.

Earnings Per Share

Earnings Per Share	6 Months Ended
	Jun. 30, 2017
Earnings Per Share [Abstract]
EARNINGS PER SHARE	10 . EARNINGS PER SHARE Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding. Diluted net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding plus the number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares. Potentially dilutive securities are excluded from the calculation when their effect would be anti-dilutive. For all periods presented in the consolidated financial statements, all potentially dilutive securities have been excluded from the diluted share calculations as they were anti-dilutive as a result of the net losses incurred for the respective periods. Accordingly, basic shares equal diluted shares for all periods presented. Potentially dilutive securities were comprised of the following: Six Months Ended 2017 2016 Warrants 5,392,157 3,548,315 Options 2,022,000 1,872,000 7,414,157 5,420,315

Asset Purchase

Asset Purchase	6 Months Ended
	Jun. 30, 2017
Asset Purchase [Abstract]
ASSET PURCHASE	11. ASSET PURCHASE In February 2017, the Company entered into an asset purchase agreement for the purchase of the assets of a hydroponic and garden supply business located in Santa Rosa, CA. The total purchase price was $572,000. The allocation of the purchase price was allocated as follows: Inventory $ 272,000 Fixed assets 50,000 Goodwill 250,000 Total $ 572,000 In March 2017, the Company entered into an asset purchase agreement for the purchase of the assets of a hydroponic and garden supply business located in Seattle, WA. The purchase was completed in May 2017. The total purchase price was $123,000. The allocation of the purchase price was allocated as follows: Inventory $ 78,000 Fixed assets 20,000 Goodwill 25,000 Total $ 123,000

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2017
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	12. SUBSEQUENT EVENTS The Company has evaluated events and transaction occurring subsequent to June 30, 2017 up to the date of this filing of these consolidated financial statements. These statements contain all necessary adjustments and disclosures resulting from that evaluation.

Summary of Significant Accoun18

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2017
Summary of Significant Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation The Company’s financial statements are prepared on the accrual method of accounting. The accounting and reporting policies of the Company conform to generally accepted accounting principles (GAAP). The consolidated financial statements of the Company included the accounts of GrowGeneration Pueblo Corp, GrowGeneration California Corp, GrowGeneration Nevada Corp, GrowGeneration Washington Corp and GGen Distribution Corp. All material intercompany accounts, balances and transactions have been eliminated in consolidation. The various products sold support each other and are interrelated. Management makes significant operating decisions based upon the analysis of the entire Company and financial performance is evaluated on a company-wide basis. Accordingly, the various products sold are aggregated into one reportable operating segment as under guidance in the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC or “codification”) Topic 28 for segment reporting.
Basis of Presentation - Unaudited Interim Financial Information	Basis of Presentation - Unaudited Interim Financial Information The accompanying interim condensed consolidated financial statements are unaudited. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all of the normal recurring adjustments necessary to present fairly the financial position and results of operations as of and for the periods presented. The interim results are not necessarily indicative of the results to be expected for the full year or any future period. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company believes that the disclosures are adequate to make the interim information presented not misleading. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Report on Form 10-K filed on March 31, 2017 for the years ended December 31, 2016 and 2015.
Reclassifications	Reclassifications Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported consolidated net income (loss).
Use of Estimates	Use of Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported revenues and expenses during the reporting period. Actual results could vary from the estimates that were used.
Income Taxes	Income Taxes The Company accounts for income taxes in accordance with FASB ACS 740, Income Taxes, which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. The differences related principally to depreciation of property and equipment, reserve for obsolete inventory and bad debt. Deferred tax assets and liabilities represent the future tax consequence for those differences, which will either be deductible or taxable when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established to reduce deferred tax assets to the amount expected to be realized. The Company adopted the provisions of FASB ACS 740-10-25, which prescribes a recognition threshold and measurement attribute for the recognition and measurement of tax positions taken or expected to be taken in income tax returns. FASB ASC 740-10-25 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with tax positions. The Company’s tax returns are subject to tax examinations by U.S. federal and state authorities until respective statute of limitation. Currently, the 2016, 2015 and 2014 tax years are open and subject to examination by taxing authorities. However, the Company is not currently under audit nor has the Company been contacted by any of the taxing authorities. The Company does not have any accrual for uncertain tax positions as of June 30, 2017. It is not anticipated that unrecognized tax benefits would significantly increase or decrease within 12 months of the reporting date.

Property and Equipment (Tables)

Property and Equipment (Tables)	6 Months Ended
	Jun. 30, 2017
Property and Equipment [Abstract]
Summary of property and equipment	June 30, 2017 December 31, Vehicles $ 230,809 $ 102,014 Leasehold improvements 167,074 131,411 Furniture, fixtures and equipment 669,449 389,396 1,067,332 622,821 (Accumulated depreciation) (112,454 ) (72,967 ) Property and Equipment, net $ 954,878 $ 549,854

Long-Term Debt (Tables)

Long-Term Debt (Tables)	6 Months Ended
	Jun. 30, 2017
Long-Term Debt [Abstract]
Schedule of long-term debt	June 30, December 31, 2017 2016 Long term debt is as follows: Chrysler Capital, interest ranging from 9.8% and 10.9% per annum, payable in monthly installments of $1,889.59 beginning May 2017 through June 2022, secured by vehicles with a book value of $128,800 $ 87,071 $ - Hitachi Capital, interest at 8.0% per annum, payable in monthly installments of $631.13 beginning September 2015 through August 2019, secured by delivery equipment with a book value of $24,910 15,020 18,133 Wells Fargo Equipment Finance, interest at 3.5% per annum, payable in monthly installments of $518.96 beginning April 2016 through March 2021, secured by warehouse equipment with a book value of $25,437 21,401 24,559 RMT Equipment, interest at 10.9% per annum, payable in monthly installments of $1,154.79 beginning June 2016 through October 2018, secured by delivery equipment with a book value of $31,130 16,583 22,477 Note payable insurance premium financing, interest at 4.74% per annum, payable in 10 installments of $3,441, due January 2018 23,710 - $ 163,785 $ 65,169 Less Current Maturities (62,896 ) (23,443 ) Total Long-Term Debt $ 100,889 $ 41,726

Share Based Payments and Stoc21

Share Based Payments and Stock Options (Tables)	6 Months Ended
	Jun. 30, 2017
Share Based Payments and Stock Options [Abstract]
Schedule of share-based payment expense and new shares issued	Three Months Ended Six Months Ended 2017 2016 2017 2016 Restricted shares issued 205,000 140,000 205,000 140,000 Shares based expense from issuance of common stock $ 268,990 $ 98,000 $ 345,990 $ 98,000 Shares based expense from issuance of common stock options $ 56,418 - $ 56,418 $ 86,333 Total $ 325,408 $ 98,000 $ 402,408 $ 184,333
Summary of option outstanding	Options Shares Weight - Average Exercise Price Weighted - Average Remaining Contractual Term Outstanding at December 31, 2016 1,872,000 $ 0.62 2.27 years Granted 150,000 $ 1.84 Exercised - - Forfeited or expired - - Outstanding at June 30, 2017 2,022,000 $ .69 2.01 years Options vested at June 30, 2017 1,922,000 $ .69

Stock Purchase Warrants (Tables

Stock Purchase Warrants (Tables)	6 Months Ended
	Jun. 30, 2017
Stock Purchase Warrants [Abstract]
Schedule of outstanding stock warrants	Warrants Weighted - Average Exercise Price Outstanding December 31, 2016 3,885,729 $ 0.70 Granted 2,225,000 2.75 Exercised (718,572 ) 0.70 Forfeited - - Outstanding June 30, 2017 5,392,157 $ 1.50

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Jun. 30, 2017
Earnings Per Share [Abstract]
Schedule of potentially dilutive securities	Six Months Ended 2017 2016 Warrants 5,392,157 3,548,315 Options 2,022,000 1,872,000 7,414,157 5,420,315

Asset Purchase (Tables)

Asset Purchase (Tables)	6 Months Ended
	Jun. 30, 2017
Santa Rosa, CA [Member]
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Schedule of allocation for the purchase price	Inventory $ 272,000 Fixed assets 50,000 Goodwill 250,000 Total $ 572,000
Seattle, WA [Member]
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Schedule of allocation for the purchase price	Inventory $ 78,000 Fixed assets 20,000 Goodwill 25,000 Total $ 123,000

Nature of Operations (Details)

Nature of Operations (Details) - Stores	Jun. 30, 2017	May 30, 2014
Nature of Operations (Textual)
Number of stores	13	4

Summary of Significant Accoun26

Summary of Significant Accounting Policies (Details)	6 Months Ended
	Jun. 30, 2017
Summary of Significant Accounting Policies (Textual)
Unrecognized tax benefits period	12 months

Property and Equipment (Details

Property and Equipment (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,067,332	$ 622,821
(Accumulated depreciation)	(112,454)	(72,967)
Property and Equipment, net	954,878	549,854
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	230,809	102,014
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	167,074	131,411
Furniture, fixtures and equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 669,449	$ 389,396

Property and Equipment (Detai28

Property and Equipment (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Property and Equipment (Textual)
Depreciation expense	$ 19,444	$ 11,121	$ 39,487	$ 21,023

Other Commitments (Details)

Other Commitments (Details)	May 12, 2014	May 31, 2017	Apr. 30, 2017
Other Commitments (Textual)
Other commitments, Description	The Company entered into three-year employment agreements with its CEO and President which are automatically renewed annually for a term of one year unless the Company or the Executive gives notice to the other of termination at least six (6) months prior to the expiration of the initial term, or any successive term. The agreements require payment of monthly wages and benefits. The employment agreement automatically renewed for an additional one year term effective May 12, 2017.	The Company also entered into three-year employment agreements with its COO and CFO, respectfully.	The Company also entered into three-year employment agreements with its COO and CFO, respectfully.

Long-Term Debt (Details)

Long-Term Debt (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Long-Term Debt	$ 163,785	$ 65,169
Less Current Maturities	(62,896)	(23,443)
Total Long-Term Debt	100,889	41,726
Chrysler Capital [Member]
Debt Instrument [Line Items]
Long-Term Debt	87,071
Hitachi Capital [Member]
Debt Instrument [Line Items]
Long-Term Debt	15,020	18,133
Wells Fargo Equipment Finance [Member]
Debt Instrument [Line Items]
Long-Term Debt	21,401	24,559
RMT Equipment [Member]
Debt Instrument [Line Items]
Long-Term Debt	16,583	22,477
Note payable insurance premium financing (Member)
Debt Instrument [Line Items]
Long-Term Debt	$ 23,710

Long-Term Debt (Details Textual

Long-Term Debt (Details Textual)	3 Months Ended		6 Months Ended
	Jun. 30, 2017USD ($)	Jun. 30, 2016USD ($)	Jun. 30, 2017USD ($)Installments	Jun. 30, 2016USD ($)
Long-Term Debt (Textual)
Interest expense	$ 2,610	$ 1,113	$ 3,761	$ 1,665
Chrysler Capital [Member]
Long-Term Debt (Textual)
Long term debt, monthly payment			$ 1,889.59
Long term debt maturity date, description			Beginning May 2017 through June 2022.
Long-term debt, book value	$ 128,800		$ 128,800
Chrysler Capital [Member] | Maximum [Member]
Long-Term Debt (Textual)
Interest rate per annum	10.90%		10.90%
Chrysler Capital [Member] | Minimum [Member]
Long-Term Debt (Textual)
Interest rate per annum	9.80%		9.80%
Hitachi Capital [Member]
Long-Term Debt (Textual)
Long term debt, monthly payment			$ 631.13
Long term debt maturity date, description			Beginning September 2015 through August 2019.
Long-term debt, book value	$ 24,910		$ 24,910
Interest rate per annum	8.00%		8.00%
Wells Fargo Equipment Finance [Member]
Long-Term Debt (Textual)
Long term debt, monthly payment			$ 518.96
Long term debt maturity date, description			Beginning April 2016 through March 2021.
Long-term debt, book value	$ 25,437		$ 25,437
Interest rate per annum	3.50%		3.50%
RMT Equipment [Member]
Long-Term Debt (Textual)
Long term debt, monthly payment			$ 1,154.79
Long term debt maturity date, description			Beginning June 2016 through October 2018.
Long-term debt, book value	$ 31,130		$ 31,130
Interest rate per annum	10.90%		10.90%
Note payable insurance premium financing [Member]
Long-Term Debt (Textual)
Long term debt, monthly payment			$ 3,441
Long term debt maturity date, description			Due January 2018.
Interest rate per annum	4.74%		4.74%
Number of installments | Installments			10

Share Based Payments and Stoc32

Share Based Payments and Stock Options (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Share Based Payments and Stock Options [Abstract]
Restricted shares issued	$ 205,000	$ 140,000	$ 205,000	$ 140,000
Shares based expense from issuance of common stock	268,990	98,000	345,990	98,000
Shares based expense from issuance of common stock options	56,418		56,418	86,333
Total	$ 325,408	$ 98,000	$ 402,408	$ 184,333

Share Based Payments and Stoc33

Share Based Payments and Stock Options (Details 1) - Options [Member]	6 Months Ended
	Jun. 30, 2017$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding Shares - Beginning balance | shares	1,872,000
Shares, Granted | shares	150,000
Shares, Exercised | shares
Shares, Forfeited or expired | shares
Outstanding Shares - Ending balance | shares	2,022,000
Shares, Options vested | shares	1,922,000
Outstanding Weighted - Average Exercise Price - Beginning Balance | $ / shares	$ 0.62
Weighted - Average Exercise Price, Granted | $ / shares	1.84
Weighted - Average Exercise Price, Exercised | $ / shares
Weighted - Average Exercise Price, Forfeited or expired | $ / shares
Outstanding Weighted - Average Exercise Price - Ending Balance | $ / shares	0.69
Options vested , Weighted - Average Exercise Price | $ / shares	$ 0.69
Outstanding at Beginning Weighted - Average Remaining Contractual Term	2 years 3 months 8 days
Outstanding at Ending Weighted - Average Remaining Contractual Term	2 years 4 days

Share Based Payments and Stoc34

Share Based Payments and Stock Options (Details Textual)	Mar. 06, 2014shares
Share Based Payments and Stock Options (Textual)
Description of stock options	Options under the plan are to be issued at the market price of the stock on the day of the grant except to those issued to holders of 10% or more of the Company's common stock which is required to be issued at a price not less than 110% of the fair market value on the day of the grant. Each option is exercisable at such time or times, during such period and for such numbers of shares shall be determined by the Plan Administrator. However, no option shall have a term in excess of 5 years from the date of grant.
Stock issued over the term of the plan	2,500,000

Stock Purchase Warrants (Detail

Stock Purchase Warrants (Details) - Stock Warrants [Member]	6 Months Ended
	Jun. 30, 2017$ / sharesshares
Stock Purchase Warrants [Line Items]
Outstanding Shares - Beginning balance | shares	3,885,729
Shares, Granted | shares	2,225,000
Shares, Exercised | shares	(718,572)
Shares, Forfeited | shares
Outstanding Shares - Ending balance | shares	5,392,157
Outstanding Weighted - Average Exercise Price - Beginning Balance | $ / shares	$ 0.70
Weighted - Average Exercise Price, Granted | $ / shares	2.75
Weighted - Average Exercise Price, Exercised | $ / shares	0.70
Weighted - Average Exercise Price, Forfeited | $ / shares
Outstanding Weighted - Average Exercise Price - Ending Balance | $ / shares	$ 1.50

Stock Purchase Warrants (Deta36

Stock Purchase Warrants (Details Textual) - Private Placement [Member]	6 Months Ended
	Jun. 30, 2017$ / sharesshares
Stock Purchase Warrants (Textual)
Granted warrants to investors	825,000
Warrants to advisor pursuant to certain advisor agreement	100,000
Warrants exercisable period	5 years
Warrants exercise price | $ / shares	$ 2.75

Stockholders' Equity (Details)

Stockholders' Equity (Details) - USD ($)	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Stockholders' Equity (Textual)
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares outstanding	14,591,406	11,742,834
Net proceeds after offering costs	$ 3,291,565
Sale of common stock, Description	The Company sold a total of 1,825,000 units, consisting of one share of $.001 par value common stock and one common stock warrant.
Sale of common stock	1,825,000
Sale of common stock price per share	$ 0.001
Consulting services [Member]
Stockholders' Equity (Textual)
Common stock, par value	$ 0.001
Common stock issued	100,000
Common stock value	$ 77,000
Warrants issued	100,000
Prepaid consulting services [Member]
Stockholders' Equity (Textual)
Common stock, par value	$ 0.001
Common stock issued	80,000
Common stock value	$ 251,890
Warrants issued	150,000
Employees and consultants [Member]
Stockholders' Equity (Textual)
Common stock, par value	$ 0.001
Common stock issued	125,000
Common stock value	$ 248,000
Common Stock [Member]
Stockholders' Equity (Textual)
Common stock, par value	$ 0.001
Common stock, shares outstanding	14,511,406
Proceeds from common stock value	$ 503,000
Warrants to purchase	718,572

Earnings Per Share (Details)

Earnings Per Share (Details) - shares	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Potentially dilutive securities (Line Items)
Potentially dilutive securities warrants and options	7,414,157	5,420,315
Options [Member]
Potentially dilutive securities (Line Items)
Potentially dilutive securities warrants and options	2,022,000	1,872,000
Warrants [Member]
Potentially dilutive securities (Line Items)
Potentially dilutive securities warrants and options	5,392,157	3,548,315

Asset Purchase (Details)

Asset Purchase (Details)	Jun. 30, 2017USD ($)
Santa Rosa, CA [Member]
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Inventory	$ 272,000
Fixed assets	50,000
Goodwill	250,000
Total	572,000
Seattle, WA [Member]
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Inventory	78,000
Fixed assets	20,000
Goodwill	25,000
Total	$ 123,000