Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 18, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | TEO Foods Inc. | |
Entity Central Index Key | 0001612188 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity an Emerging Growth Company? | true | |
Is Entity a Small Business? | true | |
Entity Ex Transition Period | false | |
Is Entity's Reporting Status Current? | Yes | |
Entity Shell Company | false | |
Entity File Number | 333-226801 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | NV | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 21,622,245 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and Cash Equivalents | $ 114,183 | $ 2,139 |
Accounts Receivables, Net | 410,502 | 0 |
Inventory, Net | 351,371 | 0 |
Related Party Receivables | 272,319 | 0 |
Notes Receivable, Related Party | 150,499 | 0 |
Tax Receivables | 972,318 | 0 |
Prepaid and Other Assets | 12,605 | 380,000 |
Total Current Assets | 2,283,797 | 382,139 |
Fixed Assets, Net | 132,048 | 0 |
Total Assets | 2,415,845 | 382,139 |
Current liabilities | ||
Accounts Payables and Accrued Liabilities | 1,058,404 | 17,184 |
Related Party Payables | 1,202 | 274 |
License Fee Payable | 767,000 | 875,000 |
Notes Payable | 134,000 | 134,000 |
Convertible Notes Payable - Current Portion | 220,000 | 220,000 |
Total Current Liabilities | 2,180,606 | 1,246,458 |
Long Term Liabilities | ||
Convertible Notes Payable - Long-Term | 0 | 100,000 |
Deferred Tax Liability | 26,230 | 0 |
TOTAL LIBILITIES | 2,206,836 | 1,346,458 |
Stockholders' Equity | ||
Preferred Stock $0.001 par value, 10,000,000 shares authorized, 9,022,900 shares issued and outstanding | 9,023 | 9,023 |
Common Stock, $0.001 par value, 490,000,000 shares authorized, 21,622,245 and 10,334,745 shares issued and outstanding, respectively | 21,623 | 10,335 |
Additional Paid In Capital | 1,168,229 | 47,017 |
Accumulated Deficit | (1,044,546) | (1,030,694) |
Other Comprehensive Income | 54,680 | 0 |
TOTAL EQUITY (DEFICIT) | 209,009 | (964,319) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,415,845 | $ 382,139 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Stockholders' equity (deficit): | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock shares, authorized | 10,000,000 | 10,000,000 |
Preferred stock shares, issued | 9,022,900 | 9,022,900 |
Preferred stock shares, outstanding | 9,022,900 | 9,022,900 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock shares, authorized | 490,000,000 | 490,000,000 |
Common stock shares, issued | 21,622,245 | 10,334,745 |
Common stock shares, outstanding | 21,622,245 | 10,334,745 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Unaudited Statements Of Operations | ||||
Revenues | $ 1,132,995 | $ 0 | $ 2,167,409 | $ 0 |
Cost of Sales | 967,083 | 0 | 1,766,485 | 0 |
GROSS PROFIT | 165,912 | 0 | 400,924 | 0 |
Operating expenses | ||||
Payroll | 128,762 | 0 | 278,026 | 0 |
General and administrative expenses | 82,734 | 0 | 224,512 | 274 |
Rent and Lease | 36,329 | 0 | 55,797 | 0 |
Professional Fees | 38,947 | 2,500 | 67,157 | 2,500 |
Advertising and Marketing | 18,801 | 0 | 45,417 | 0 |
Depreciation | 5,358 | 0 | 8,929 | 0 |
Total Operating Expenses | 310,931 | 2,500 | 679,838 | 2,774 |
NET OPERATING LOSS | (145,019) | (2,500) | (278,914) | (2,774) |
Other Income (Expense) | ||||
Interest expense | (33,130) | (1,170) | (47,323) | (1,170) |
Other Income (Expenses) | 65,624 | 0 | 116,398 | 0 |
Bargain Purchase Gain | 0 | 0 | 222,217 | 0 |
Total Other Income (Expenses) | 32,494 | (1,170) | 291,292 | (1,170) |
Net Income/(Loss) Before Income Tax | (112,525) | (3,670) | 12,378 | (3,994) |
Income Tax Expense | 0 | 0 | (26,230) | 0 |
NET LOSS | (112,525) | (3,670) | (13,852) | (3,994) |
Other Comprehensive Income/(Loss) | ||||
Foreign Currency Translation Adjustments | 25,350 | 0 | 54,680 | 0 |
COMPREHENSIVE INCOME/(LOSS) | $ (87,175) | $ (3,670) | $ 40,828 | $ (3,994) |
Earnings per common share - basic & diluted | $ (0.0104) | $ (0.0004) | $ (0.0007) | $ 0 |
Weighted average common - basic & diluted | 10,811,123 | 9,771,000 | 19,744,120 | 4,966,475 |
CONSOLIDATED STATEMENT OF EQUIT
CONSOLIDATED STATEMENT OF EQUITY (UNAUDITED) - USD ($) | Preferred Stock | Common Stock | Paid-In Capital | Accumulated Deficit | Other Comprehensive Income | Total |
Beginning Balance, Shares at Dec. 31, 2017 | 10,000,000 | |||||
Beginning Balance, Value at Dec. 31, 2017 | $ 10,000 | $ (1,010,000) | $ (1,000,000) | |||
Conversion of Preferred Stock, Shares | (977,100) | 9,771,000 | ||||
Conversion of Preferred Stock, Value | $ (977) | $ 977 | ||||
Net income (loss) | (274) | (274) | ||||
Ending Balance, Shares at Mar. 31, 2018 | 9,022,900 | 9,771,000 | ||||
Ending Balance, Value at Mar. 31, 2018 | $ 9,023 | $ 977 | (1,010,274) | (1,000,274) | ||
Beginning Balance, Shares at Dec. 31, 2017 | 10,000,000 | |||||
Beginning Balance, Value at Dec. 31, 2017 | $ 10,000 | (1,010,000) | (1,000,000) | |||
Net income (loss) | (3,994) | |||||
Ending Balance, Shares at Jun. 30, 2018 | 9,022,900 | 9,771,000 | ||||
Ending Balance, Value at Jun. 30, 2018 | $ 9,023 | $ 977 | (1,013,944) | (1,003,944) | ||
Beginning Balance, Shares at Mar. 31, 2018 | 9,022,900 | 9,771,000 | ||||
Beginning Balance, Value at Mar. 31, 2018 | $ 9,023 | $ 977 | (1,010,274) | (1,000,274) | ||
Net income (loss) | (3,670) | (3,670) | ||||
Ending Balance, Shares at Jun. 30, 2018 | 9,022,900 | 9,771,000 | ||||
Ending Balance, Value at Jun. 30, 2018 | $ 9,023 | $ 977 | (1,013,944) | (1,003,944) | ||
Beginning Balance, Value at Dec. 31, 2018 | $ 9,023 | $ 10,335 | 47,017 | (1,030,694) | (964,319) | |
Conversion of Preferred Stock, Shares | 9,022,900 | 10,334,745 | ||||
Stock Issued for Acqusition of Targa, Shares | 11,250,000 | |||||
Stock Issued for Acqusition of Targa, Value | $ 11,250 | 1,113,750 | 1,125,000 | |||
Stock Issued for Cash, Shares | 37,500 | |||||
Stock Issued for Cash, Value | $ 38 | 7,462 | 7,500 | |||
Foreign Currency Translation Adjustments | 29,330 | 29,330 | ||||
Net income (loss) | 98,673 | 98,673 | ||||
Ending Balance, Shares at Mar. 31, 2019 | 9,022,900 | 21,622,245 | ||||
Ending Balance, Value at Mar. 31, 2019 | $ 9,023 | $ 21,623 | 1,168,229 | (932,021) | 29,330 | 296,184 |
Beginning Balance, Value at Dec. 31, 2018 | $ 9,023 | $ 10,335 | 47,017 | (1,030,694) | (964,319) | |
Net income (loss) | (13,852) | |||||
Ending Balance, Shares at Jun. 30, 2019 | 9,022,900 | 21,622,245 | ||||
Ending Balance, Value at Jun. 30, 2019 | $ 9,023 | $ 21,623 | 1,168,229 | (1,044,546) | 54,680 | 209,009 |
Beginning Balance, Shares at Mar. 31, 2019 | 9,022,900 | 21,622,245 | ||||
Beginning Balance, Value at Mar. 31, 2019 | $ 9,023 | $ 21,623 | 1,168,229 | (932,021) | 29,330 | 296,184 |
Foreign Currency Translation Adjustments | 25,350 | 25,350 | ||||
Net income (loss) | (112,525) | (112,525) | ||||
Ending Balance, Shares at Jun. 30, 2019 | 9,022,900 | 21,622,245 | ||||
Ending Balance, Value at Jun. 30, 2019 | $ 9,023 | $ 21,623 | $ 1,168,229 | $ (1,044,546) | $ 54,680 | $ 209,009 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (13,852) | $ (3,944) |
Adjustments to reconcile net loss to net cash used in operations: | ||
Depreciation | 8,929 | 0 |
Bargain Purchase Gain | (222,217) | 0 |
Change in Operating Assets and Liabilities: | ||
Accounts Receivables | 10,321 | 0 |
Receivables from Related Parties | (38,375) | 0 |
Inventory | 142,186 | 0 |
Tax Receivable | (248,182) | 0 |
Prepaid and Other Assets | 9,228 | 0 |
Accounts payable and accrued expenses | 420,650 | 3,670 |
Related Party Payables | 928 | 374 |
Deferred Taxes | 26,230 | 0 |
Net cash used in operating activities | 95,846 | 100 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of fixed assets | (14,486) | 0 |
Net Cash Received from Acquisition of Targa | 6,504 | 0 |
Net cash provided by investing activities | (7,982) | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from Issuance of Convertible Note Payable | 120,000 | 100,000 |
Proceeds from Issuance of Notes Payable | 0 | 25,000 |
Payments on Licensing Fee | (108,000) | (43,000) |
Repayment of Convertible Note Payable | (50,000) | 0 |
Proceeds from Issuance of Common Stock | 7,500 | 0 |
Net cash provided by financing activities | (30,500) | 82,000 |
Effect of Foreign Exchange Translation | 54,680 | 0 |
Net increase for the period | 112,044 | 82,100 |
Cash and Cash Equivalents, Beginning of the Period | 2,139 | 0 |
Cash and Cash Equivalents, End of the Period | 114,183 | 82,100 |
SUPPLEMENTAL INFORMATION | ||
Cash paid for income taxes | 0 | 0 |
Cash paid for Interest | 0 | 0 |
Disclosure of Non-Cash Investment and Finance Activities: | ||
Elimination of convertible notes by offset against Notes Receivable, Related Party and Related Party Receivables | 739,110 | 0 |
Elimination of Related Party Receivables and Payables offset | $ 360,824 | $ 0 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION Teo Foods Inc. (“ TEO Foods The Company’s principal activity is to produce and sell food packaged products for retail sale in the frozen, refrigerated and shelf stable categories. The Company has a license to use the TEO name and logo on food products it sells and to apply the TEO pasteurization/sterilization processes to its products for improved shelf life and safety. On January 31, 2019, the Company executed the Stock Purchase Agreement with NERYS USA Inc. (“Nerys USA”). The Company issued the closing payments as described in Note 4. Pursuant to the terms of the purchase agreement, Commercial Targa S.A. de C.V. (“Targa”) became a wholly owned subsidiary of the Company. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2109 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. Notes to the unaudited financial statements that would substantially duplicate the disclosure contained in the audited financial statements for the fiscal year ending December 31, 2018 have been omitted. These interim financial statements are condensed and should be read in conjunction with audited financial statements and the footnotes thereto for the fiscal year ended December 31, 2018 included in the Company’s 10-K as filed with the Securities and Exchange commission on April 16, 2019 All amounts referred to in the notes to the financial statements are in United States Dollars ($) unless stated otherwise. Cash and Cash Equivalents The Company considers all highly liquid debt instruments and other short-term investments with a maturity date of three months or less, when purchased, to be cash equivalents. Foreign Currency Translation The Company subsidiary’s primary functional currency is the Mexican peso, but it’s reporting currency is the U.S. dollar. The balance sheet accounts are translated at exchange rates in effect at the end of the period and income statement accounts are translated at average exchange rates for the period. Translation gains and losses are included as a separate component of stockholders’ deficit. Accounts Receivable Accounts receivable are reported at the customers’ outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The allowance for doubtful accounts at June 30, 2019 and December 31, 2018 was approximately, $44,000 and $43,000, respectively. Inventory and Cost of Sales Inventories are stated at the lower of cost or realizable value, using the average cost method. When an impairment indicator suggests that the carrying amounts of inventories might not be recoverable, the Company reviews such carrying amounts and estimates the net realizable value based on the most reliable evidence available at that time. An impairment loss is recorded if the net realizable value is less than the carrying value. Impairment indicators considered for these purposes are, among others, obsolescence, decrease in market prices, damage and a firm commitment to sell. Property and Equipment Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs that do not improve or extend the lives of the respective assets are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income. Long-Lived Assets The Company accounts for its long-lived assets in accordance with Accounting Standards Codification (“ASC”) 360, Property, Plant and Equipment Beneficial Conversion Feature of Convertible Notes Payable The Company considers whether a beneficial conversion feature ("BCF") exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note. The BCF of a convertible note is a reduction of the carrying amount of the convertible note, as a debt discount, and is credited to additional paid-in-capital. Such discount is amortized over the expected term of the convertible note (or to the conversion date of the note, if sooner) and is charged to interest expense. A contingent beneficial conversion feature in a convertible note payable with conversion terms that change upon the occurrence of a future event (ex: fair value of the underlying stock declines after the note issuance date) is recognized when the contingency is resolved. Revenue Recognition Revenue is recognized when a customer obtains control of promised goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the company expects to receive in exchange for those goods or services. The Company applies the following five-step model in order to determine this amount: i. Identification of the promised goods in the contract; ii. Determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; iii. Measurement of the transaction price, including the constraint of variable consideration; iv. Allocation of the transaction price of the performance obligations; and v. Recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable the entity will collect the consideration it is entitled to in exchange for the goods and services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606, Revenue Recognition Use of Estimates The preparation of financial statements in conformity with GAAP requires 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. Fair Value of Financial Instruments Fair value is defined as the price that would be received in the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has categorized all investments recorded at fair value based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows: ● Level 1: Quoted prices in active markets for identical assets or liabilities that the organization has the ability to access at the reporting date. ● Level 2: Inputs other than quoted prices included in Level 1, which are either observable or that can be derived from or corroborated by observable data as of the reporting date. ● Level 3: Inputs include those that are significant to the fair value of the asset or liability and are generally less observable from objective resources and reflect the reporting entity's assumptions about the assumptions market participants would use in pricing the asset or liability. The Company's financial instruments consist of advances from related party, notes payable, convertible notes payable and license fee payable. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of the respective instruments. Loss Per Share of Common Stock Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. The calculation of diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Securities with anti-dilutive effects on net earnings (loss) per share are excluded. As of June 30, 2019, preferred shares convertible to 90,229,000 common shares were included in the diluted weighted average shares; however, notes convertible into common shares were excluded from the calculation of loss per common share as the notes are anti-dilutive. As of December 31, 2018, preferred shares convertible to 90,229,000 common shares and notes convertible into a maximum of 1,600,000 common shares were excluded from the calculation of loss per common share as the notes are anti-dilutive. Accounting Pronouncements Recently Adopted and Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 3 – GOING CONCERN These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has suffered recurring losses from operations and has insufficient working capital as of June 30, 2019 to develop its business plan and meet its obligation of the next 12 months. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders, the Company's ability to obtain necessary equity or debt financing to continue operations, and ultimately the Company's ability to generate profit from sales of packaged food products. These financial statements do not include any adjustments to classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company plans to obtain funds for operations through continued financial support from its stockholders, debt and private offerings of its equity. |
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT | 6 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
STOCK PURCHASE AGREEMENT | NOTE 4 – STOCK PURCHASE AGREEMENT On July 30, 2018, the Company entered into a Stock Purchase Agreement with Nerys USA to purchase all of the issued and outstanding equity of Targa. On January 31, 2019, TEO Foods Inc. acquired 100% of the equity interest of Targa, a private entity, in exchange for $160,000 in cash, $220,000 and $552,000 secured convertible notes payable and 11,250,000 common shares. The acquisition was effective as of January 1, 2019. In addition, an earn-out provision was added which, if certain conditions are met, would require an additional secured convertible promissory note of $310,000 and the issuance of an additional 3,750,000 common shares. In May of 2019, the purchase agreement was amended resulting in the earn-out provision being eliminated, the $220,000 (which had a principal balance remaining of $170,000) and $552,000 secured convertible notes payable, plus accrued interest, issued as part of the purchase price being assigned to Targa in exchange for an equal reduction of amounts owed to Targa by Nerys USA. In addition, Nerys USA assumed and settled an account payable balance due from Targa against amounts Targa owed to Nerys USA. The assignment of the Nerys notes to Targa resulted in a $722,000 reduction in the convertible notes payable and reduction in liabilities for the accrued interest due transferred of $17,110. This also resulted in an equal reduction of $739,110 of Related Party Receivable and Notes Receivable due to Targa from Nerys USA. In addition, $360,824 of Related Party Payables to Nerys USA were offset against Related Party Receivables from Nerys USA to Targa. Due to the state of operations of Targa, along with the economic impact of U.S. tariffs, the Company acquired Targa for less than the estimated fair value of its net assets. In accordance with ASC 805, Business Combinations The following unaudited pro forma financial results reflects the historical operating results of the Company, including the unaudited pro forma results of Targa for the six months ended June 30, 2018, as if this business combination had occurred as of January 1, 2018. The pro forma financial information set forth below reflects adjustments to the historical data of the Company to give effect to the Targa acquisition and the related equity issuances as if each had occurred on January 1, 2018. The pro forma information presented below does not purport to represent what the actual results of operations would have been for the period indicated, nor does it purport to represent the Company’s future results of operations. 2018 Net Revenue $ 3,859,231 Net Loss $ 463,817 Net Loss per Common Share – Basic & Diluted $ .029 Weighted Average Number of Shares of Common Stock Outstanding – Basic & Diluted 16,216,475 The calculations of pro forma net revenue and pro forma net loss give effect to the Targa business combination for the six months ended June 30, 2018 based on the historical net revenue and net income (loss), as applicable, of Targa. The operations for the six months ended June 30, 2019 are included in the accompanying statement of operations and comprehensive income. It does not give account to all purchase accounting adjustments as the purchase accounting has not been finalized. The Company has begun to assess the fair value of the various net assets acquired but has not yet completed this assessment. The Company is also in the process of identifying other intangible assets, such as customer relationships and know-how that may need to be recognized. Once identified, these other intangible assets, if any, will be recorded at their fair values. The Company is working to finalize the allocations as quickly as possible and anticipates that the allocation will not be final for approximately six months. Any adjustments necessary may be material to the consolidated balance sheet, but should not have a material impact to the June 30, 2019 reported operating results or cash flows. |
ROYALTY AND LICENSE AGREEMENT
ROYALTY AND LICENSE AGREEMENT | 6 Months Ended |
Jun. 30, 2019 | |
Research and Development [Abstract] | |
ROYALTY AND LICENSE AGREEMENT | NOTE 5 – ROYALTY AND LICENSE AGREEMENT On September 30, 2017, the Company entered into a Master Agreement with TEO Inc. ("TEO"). TEO is the founder and majority controlling shareholder of the Company. The Master Agreement provides the Company a license to use the TEO name and logo on food products it sells and to apply TEO's pasteurization/sterilization processes to its products for improved shelf life and safety. Additional provisions provide the Company production rights to TEO's pasteurizer/sterilizer and rights to lease its own system when certain sales/production increase. Pursuant to the master agreement, the Company agreed to pay an initial $1 million fee in installments with $100,000 due on June 30, 2018, $300,000 due on December 31, 2018 and the remaining $600,000 due in 12 equal monthly payments with the first payment due on January 31, 2019. TEO Inc. has agreed to maintain the license through December 31, 2019 and accrue and accept payments due as funds are available. As of June 30, 2019, the Company has paid $233,000 toward the license. Commencing January 1, 2020, a use/royalty and service fee of 5.5% of the Company's gross revenue for food sales processed using TEO's intellectual property is payable quarterly. The ongoing licensing is maintained by meeting minimum annual use/royalty and service fees. The Company may pay for the difference between the actual use and the minimum to maintain the license. The annual minimum is listed as follows: Year Minimum Service Fee 2020 $ 500,000 2021 750,000 2022 1,000,000 Thereafter Increase 10% per year As of June 30, 2019, and December 31, 2018, the outstanding balance of the license fee payable was $767,000 and $875,000, respectively |
NOTES PAYABLES
NOTES PAYABLES | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLES | NOTE 6 – NOTES PAYABLES Notes Payable On July 31, 2018, the Company issued a note for $100,000 in principal bearing interest at 8% maturing on October 31, 2018. This note was subsequently amended to extend the maturity date to December 31, 2019. As of June 30, 2019 and December 31, 2018, the outstanding principal balance of the note was $100,000. On December 10, 2018, the Company issued a note for $34,000 in principal bearing interest at 8% maturing on June 10, 2019. This note was subsequently amended to extend the maturity date to December 31, 2019. As of June 30, 2019 and December 31, 2018, the outstanding principal balance of the note was $34,000. Convertible Note Payable On June 28, 2018, the Company issued a note for $100,000. The note is for a two-year term and bears an 8% interest rate, due at maturity. The note is convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. On November 20, 2018 the Company issued a note for $220,000. The note was for a two-year term and bore an 8% interest rate, due at maturity. The note was convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. In February of 2019, the Company made a payment on the principal of $50,000 and in May of 2019, the note was settled (see Note 4). On January 31, 2019 the Company issued a note for $552,000. The note was for a two-year term and bore an 8% interest rate, due at maturity. The note was convertible into common shares at a 20% discount to the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share. In May of 2019, the note was settled (see Note 4). On February 4, 2019, the Company entered into a purchase agreement with one investor for the purchase of up to an aggregate of $350,000 in convertible notes payable in three payments commencing with the first in the amount of $120,000 on February 4, 2019, the second on April 1, 2019 in the amount of $110,000 and the third on June 1, 2019 in the amount of $120,000. The investor did not make the second purchase on April 1, 2019 or the third purchase on June 1, 2019. The purchase provisions of the agreement have expired with only the first purchase executed. The $120,000 note purchased in February can be converted to common stock at $0.20 per share or the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share and converts automatically upon certain conditions. The note bears no interest until June 30, 2019 and then bears 8% interest, if not converted to common stock. As of June 30, 2019, there is not a quoted bid price available as the Company’s shares are not listed on any exchanges. As the minimum conversion rate at the time of issuance is greater than or equal to the current stock value based on other similar transactions, these notes are not deemed to have an embedded derivative associated with them. |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY | NOTE 7 – EQUITY Preferred Stock Each share of Class A Preferred Stock may be converted by the holder upon request of the holder into 10 shares of common stock. Each holder is entitled to 100 votes for each share of Class A Preferred Stock held on the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company (and written actions of stockholders in lieu of meetings) with respect to any and all matters presented to the stockholders of the Company for their action or consideration. The holders are entitled to dividends, if any, as declared by the Company and participate pari passu with the common stock of the Company at the conversion rate. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 8 - INCOME TAXES Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The U.S. federal income tax rate is 21%. The provision for Federal income tax consists of the following June 30, 2019 and December 31, 2018: Federal income tax benefit attributable to: June 30, 2019 December 31, 2018 Current Operations $ 4,196 $ 4,346 Less: valuation allowance (4,196 ) (4,346 ) Net provision for Federal income taxes $ - $ - The cumulative tax effect at the expected rate of 21% of significant items comprising our net deferred tax amount is as follows: Deferred tax asset attributable to: June 30, 2019 December 31, 2018 Net operating loss carryover $ 9,450 $ 5,254 Less: valuation allowance (9,450 ) (5,254 ) Net deferred tax asset $ - $ - As of June 30, 2019, the Company has recorded an estimated tax liability of $26,230 related to the bargain purchase gain; however, the Company is still evaluating the purchase accounting, so this estimate may change. At June 30, 2019, the Company had net operating loss carry forwards of approximately $45,000 that may be offset against future taxable income. No tax benefit has been reported in the June 30, 2019 or December 31, 2018 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cut and Jobs Act (the “Tax Act”). The Tax Act establishes new tax laws that affects 2018 and future years, including a reduction in the U.S. federal corporate income tax rate to 21% effective January 1, 2018. For certain deferred tax assets and deferred tax liabilities. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years. ASC 740, Income Taxes The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of March 31, 2019, the Company had no accrued interest or penalties related to uncertain tax positions. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 9 - RELATED PARTY TRANSACTIONS The Company has various related party receivables and payables derived from normal operating activities. These balances are non-interest bearing and are periodically settled as cash flow permits. In addition, at June 30, 2019 and December 31, 2018, the Company had revolving receivables from related parties of $272,319 and $0, respectively. As of June 30, 2019, and December 31, 2018, the Company had notes receivable from related parties of $150,499 and $0, respectively. Preferred Share Issuance and Conversion On March 31, 2018, the Company issued 9,771,000 common shares to TEO Inc. for the conversion of 977,100 Class A Preferred Stock. TEO Inc. directed that the common shares resulting from the conversion be issued to the shareholders of TEO Inc. The common shares were issued to 31 shareholders with 78% of the shares controlled by the Company’s sole officer and director. Master License Agreement On September 30, 2017, the Company entered into a Master Agreement with TEO, the founder and majority controlling shareholder of the Company. See Note 5. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 – COMMITMENTS AND CONTINGENCIES Neither the Company nor its assets are subject to any legal action other than those that arise in the normal course of business. |
CONCENTRATIONS
CONCENTRATIONS | 6 Months Ended |
Jun. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | NOTE 11 – CONCENTRATIONS Cash Deposit The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At June 30, 2019 no cash balances exceeded the federally insured limit. Co-Pack Agreement On April 20, 2018, the Company entered into a co-packing agreement with Targa. Targa is located in Tijuana, Mexico and produces and sells its own brands of products in Mexico which includes the NERYS line of imported California cheese products, frozen pizzas, various pasta meals and other products sold in major stores such as Wal-Mart, 7-Eleven, Soriana, OXXO and others. Targa is currently the Company's only vendor contracted to produce its products. The Company acquired Targa in January of 2019. See Note 4. |
TAX RECEIVABLES
TAX RECEIVABLES | 6 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
TAX RECEIVABLES | NOTE 12 – TAX RECEIVABLES Tax Receivables which are credits from the Mexican taxing authority. The Company has accumulated IVA tax payments that exceeded its IVA tax liabilities over the past several years. The Company has begun to apply for refunds of these accumulated overpayments and expect to obtain these refunds during 2019. |
INVENTORY
INVENTORY | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 13 – INVENTORY At June 30, 2019, inventory consisted of approximately $351,000 of raw materials and finished goods in a warehouse in Tijuana, Mexico. The Company has an allowance of approximately $8,000 for shrinkage as of June 30, 2019. |
FIXED ASSETS
FIXED ASSETS | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | NOTE 14 – FIXED ASSETS At June 30, 2019, fixed assets consisted of approximately $10,000 of furniture and equipment, $169,000 of machinery, $4,000 of computers and $15,000 of vehicles. Accumulated depreciation was approximately $130,000 as of June 30, 2019 and net fixed assets were approximately $68,000. Depreciation expense for the six months ended June 30, 2019 and 2018 was $8,929 and $0, respectively. The estimated useful lives range from 3 to 10 years. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 - SUBSEQUENT EVENTS The Company has evaluated subsequent events for recognition and disclosure through August 19, 2019 which is the date the financial statements were available to be issued. No other matters were identified affecting the accompanying financial statements and related disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2109 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. Notes to the unaudited financial statements that would substantially duplicate the disclosure contained in the audited financial statements for the fiscal year ending December 31, 2018 have been omitted. These interim financial statements are condensed and should be read in conjunction with audited financial statements and the footnotes thereto for the fiscal year ended December 31, 2018 included in the Company’s 10-K as filed with the Securities and Exchange commission on April 16, 2019 All amounts referred to in the notes to the financial statements are in United States Dollars ($) unless stated otherwise. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid debt instruments and other short-term investments with a maturity date of three months or less, when purchased, to be cash equivalents. |
Foreign Currency Translation | Foreign Currency Translation The Company subsidiary’s primary functional currency is the Mexican peso, but it’s reporting currency is the U.S. dollar. The balance sheet accounts are translated at exchange rates in effect at the end of the period and income statement accounts are translated at average exchange rates for the period. Translation gains and losses are included as a separate component of stockholders’ deficit. |
Accounts Receivable | Accounts Receivable Accounts receivable are reported at the customers’ outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The allowance for doubtful accounts at June 30, 2019 and December 31, 2018 was approximately, $44,000 and $43,000, respectively. |
Inventory and Cost of Sales | Inventory and Cost of Sales Inventories are stated at the lower of cost or realizable value, using the average cost method. When an impairment indicator suggests that the carrying amounts of inventories might not be recoverable, the Company reviews such carrying amounts and estimates the net realizable value based on the most reliable evidence available at that time. An impairment loss is recorded if the net realizable value is less than the carrying value. Impairment indicators considered for these purposes are, among others, obsolescence, decrease in market prices, damage and a firm commitment to sell. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs that do not improve or extend the lives of the respective assets are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income. |
Long-Lived Assets | Long-Lived Assets The Company accounts for its long-lived assets in accordance with Accounting Standards Codification (“ASC”) 360, Property, Plant and Equipment |
Beneficial Conversion Feature of Convertible Notes Payable | Beneficial Conversion Feature of Convertible Notes Payable The Company considers whether a beneficial conversion feature ("BCF") exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note. The BCF of a convertible note is a reduction of the carrying amount of the convertible note, as a debt discount, and is credited to additional paid-in-capital. Such discount is amortized over the expected term of the convertible note (or to the conversion date of the note, if sooner) and is charged to interest expense. A contingent beneficial conversion feature in a convertible note payable with conversion terms that change upon the occurrence of a future event (ex: fair value of the underlying stock declines after the note issuance date) is recognized when the contingency is resolved. |
Revenue Recognition | Revenue Recognition Revenue is recognized when a customer obtains control of promised goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the company expects to receive in exchange for those goods or services. The Company applies the following five-step model in order to determine this amount: i. Identification of the promised goods in the contract; ii. Determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; iii. Measurement of the transaction price, including the constraint of variable consideration; iv. Allocation of the transaction price of the performance obligations; and v. Recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable the entity will collect the consideration it is entitled to in exchange for the goods and services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606, Revenue Recognition |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received in the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has categorized all investments recorded at fair value based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows: ● Level 1: Quoted prices in active markets for identical assets or liabilities that the organization has the ability to access at the reporting date. ● Level 2: Inputs other than quoted prices included in Level 1, which are either observable or that can be derived from or corroborated by observable data as of the reporting date. ● Level 3: Inputs include those that are significant to the fair value of the asset or liability and are generally less observable from objective resources and reflect the reporting entity's assumptions about the assumptions market participants would use in pricing the asset or liability. The Company's financial instruments consist of advances from related party, notes payable, convertible notes payable and license fee payable. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of the respective instruments. |
Loss Per Share of Common Stock | Loss Per Share of Common Stock Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. The calculation of diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Securities with anti-dilutive effects on net earnings (loss) per share are excluded. As of June 30, 2019, preferred shares convertible to 90,229,000 common shares were included in the diluted weighted average shares; however, notes convertible into common shares were excluded from the calculation of loss per common share as the notes are anti-dilutive. As of December 31, 2018, preferred shares convertible to 90,229,000 common shares and notes convertible into a maximum of 1,600,000 common shares were excluded from the calculation of loss per common share as the notes are anti-dilutive. |
Accounting Pronouncements Recently Adopted and Recent Accounting Pronouncements | Accounting Pronouncements Recently Adopted and Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases |
STOCK PURCHASE AGREEMENT (Table
STOCK PURCHASE AGREEMENT (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
Pro forma information | The pro forma information presented below does not purport to represent what the actual results of operations would have been for the period indicated, nor does it purport to represent the Company’s future results of operations. 2018 Net Revenue $ 3,859,231 Net Loss $ 463,817 Net Loss per Common Share – Basic & Diluted $ .029 Weighted Average Number of Shares of Common Stock Outstanding – Basic & Diluted 16,216,475 |
ROYALTY AND LICENSE AGREEMENT (
ROYALTY AND LICENSE AGREEMENT (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Research and Development [Abstract] | |
The annual minimum use/royalty and service fee | The annual minimum is listed as follows: Year Minimum Service Fee 2020 $ 500,000 2021 750,000 2022 1,000,000 Thereafter Increase 10% per year |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Provision for income tax | The provision for Federal income tax consists of the following June 30, 2019 and December 31, 2018: Federal income tax benefit attributable to: June 30, 2019 December 31, 2018 Current Operations $ 4,196 $ 4,346 Less: valuation allowance (4,196 ) (4,346 ) Net provision for Federal income taxes $ - $ - |
Deferred tax asset | The cumulative tax effect at the expected rate of 21% of significant items comprising our net deferred tax amount is as follows: Deferred tax asset attributable to: June 30, 2019 December 31, 2018 Net operating loss carryover $ 9,450 $ 5,254 Less: valuation allowance (9,450 ) (5,254 ) Net deferred tax asset $ - $ - |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION (Details Narrative) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Authorized capital | $ 500,000,000 | |
Common stock shares, authorized | 490,000,000 | 490,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Preferred stock shares, authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narartive) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Allowance for doubtful accounts | $ 44,000 | $ 43,000 |
Preferred shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 90,229,000 | 100,000,000 |
Convertible Note [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,600,000 |
STOCK PURCHASE AGREEMENT (Detai
STOCK PURCHASE AGREEMENT (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Net Revenue | $ 1,132,995 | $ 0 | $ 2,167,409 | $ 0 | ||
Net Loss | $ (112,525) | $ 98,673 | $ (3,670) | $ (274) | $ (13,852) | $ (3,994) |
Net Loss per Common Share - Basic & Diluted | $ (0.0104) | $ (0.0004) | $ (0.0007) | $ 0 | ||
Weighted Average Number of Shares of Common Stock Outstanding - Basic & Diluted | 10,811,123 | 9,771,000 | 19,744,120 | 4,966,475 | ||
Stock Purchase Agreement [Member] | ||||||
Net Revenue | $ 3,859,231 | |||||
Net Loss | $ 463,817 | |||||
Net Loss per Common Share - Basic & Diluted | $ 0.029 | |||||
Weighted Average Number of Shares of Common Stock Outstanding - Basic & Diluted | 16,216,475 |
STOCK PURCHASE AGREEMENT (Det_2
STOCK PURCHASE AGREEMENT (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jan. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Secured convertible promissory notes | $ 220,000 | $ 220,000 | $ 220,000 | |||
Common Share | 37,500 | |||||
Bargain Purchase Gain | $ 0 | $ 0 | $ 222,217 | $ 0 | ||
Stock Purchase Agreement [Member] | ||||||
Cash | $ 160,000 | |||||
Secured convertible promissory notes | $ 772,000 | |||||
Common Share | 11,250,000 | |||||
Additional secured convertible promissory note issued | $ 310,000 | |||||
Additional common shares issued | 3,750,000 | |||||
Identifiable assets acquired | $ 3,405,052 | |||||
Identifiable liabilities | 1,125,835 | |||||
Net value | 2,279,217 | |||||
Purchase price | 2,057,000 | |||||
Bargain Purchase Gain | $ 222,217 |
ROYALTY AND LICENSE AGREEMENT_2
ROYALTY AND LICENSE AGREEMENT (Details) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Research and Development [Abstract] | |
2020 | $ 500,000 |
2021 | 750,000 |
2022 | $ 1,000,000 |
Thereafter | Increase 10% per year |
ROYALTY AND LICENSE AGREEMENT_3
ROYALTY AND LICENSE AGREEMENT (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Research and Development [Abstract] | ||
License fee | $ 233,000 | |
License fee payable | 767,000 | $ 875,000 |
Deemed dividend | $ 1,000,000 |
NOTES PAYABLES (Details Narrati
NOTES PAYABLES (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | |||||
Feb. 28, 2019 | Jan. 31, 2019 | Nov. 20, 2018 | Jun. 28, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 20, 2018 | |
Note payable | $ 134,000 | $ 134,000 | |||||
Convertible Note Payable | $ 220,000 | $ 220,000 | |||||
Convertible notes payable description | On February 4, 2019, the Company entered into a purchase agreement with one investor for the purchase of up to an aggregate of $350,000 in convertible notes payable in three payments commencing with the first in the amount of $120,000 on February 4, 2019, the second on April 1, 2019 in the amount of $110,000 and the third on June 1, 2019 in the amount of $120,000. The investor did not make the second purchase on April 1, 2019 or the third purchase on June 1, 2019. The purchase provisions of the agreement have expired with only the first purchase executed. The $120,000 note purchased in February can be converted to common stock at $0.20 per share or the 30-day average bid price of the Company's common shares, as may be quoted on the OTCQB, OTCQX or listing on a national stock exchange, but at no rate lower than $0.20 per share and converts automatically upon certain conditions. The note bears no interest until June 30, 2019 and then bears 8% interest, if not converted to common stock. | ||||||
8% Convertible Note Payable [Member] | |||||||
Interest rate | 8.00% | 8.00% | 8.00% | ||||
Convertible Note Payable | $ 552,000 | $ 220,000 | $ 100,000 | ||||
Principal payment | $ 50,000 | ||||||
8% Notes Payable [Member] | |||||||
Principal amount | $ 100,000 | ||||||
Interest rate | 8.00% | ||||||
Maturity date | Oct. 31, 2018 | ||||||
Note payable | $ 100,000 | ||||||
8% Notes Payable [Member] | |||||||
Principal amount | $ 34,000 | ||||||
Interest rate | 8.00% | ||||||
Maturity date | Dec. 31, 2019 | ||||||
Note payable | $ 34,000 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended |
Jan. 31, 2019 | Jun. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | ||
Preferred Stock viting rights | Each holder is entitled to 100 votes for each share of Class A Preferred Stock held on the record date for the determination of stockholders entitled to vote at each meeting of stockholders of the Company | |
Preferred Stock | Each share of Class A Preferred Stock may be converted by the holder upon request of the holder into 10 shares of common stock. | |
Sale of common stock | $ 7,500 | |
Sale of common stock, Shares | 37,500 | |
Share Price | $ 0.20 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Federal income tax benefit attributable to: | ||
Current Operations | $ 4,196 | $ 4,346 |
Less: valuation allowance | (4,196) | (4,346) |
Net provision for Federal income taxes | $ 0 | $ 0 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Deferred tax asset attributable to: | ||
Net operating loss carryover | $ 9,450 | $ 5,254 |
Less: valuation allowance | (9,450) | (5,254) |
Net deferred tax asset | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Income Tax Disclosure [Abstract] | |
Federal income tax rate | 21.00% |
Net operating loss carry forwards | $ 45,000 |
Deferred tax liability | $ 26,230 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | ||
Mar. 31, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | |
Receivable from related parties | $ 272,319 | $ 0 | |
Notes Receivable, related Party | $ 150,499 | $ 0 | |
TEO | |||
Preferred Share Issuance and Conversion | 977,100 | ||
Number of common stock converted | 771,000 |
CONCENTRATIONS (Details Narrati
CONCENTRATIONS (Details Narrative) | Jun. 30, 2019USD ($) |
Risks and Uncertainties [Abstract] | |
Federally insured limit | $ 0 |
INVENTORY (Details Narrative)
INVENTORY (Details Narrative) | Jun. 30, 2019USD ($) |
Inventory Disclosure [Abstract] | |
Inventory raw materials and finished goods | $ 351,000 |
Shrinkage | $ 8,000 |
FIXED ASSETS (Details Narrative
FIXED ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Accumulated depreciation | $ 130,000 | $ 130,000 | |||
Fixed assets Net | 132,048 | 132,048 | $ 0 | ||
Depreciation expense | 5,358 | $ 0 | $ 8,929 | $ 0 | |
Minimum [Member] | |||||
Estimated useful live | 3 years | ||||
Maximum [Member] | |||||
Estimated useful live | 10 years | ||||
Furniture and Fixtures [Member] | |||||
Fixed assets gross | 10,000 | $ 10,000 | |||
Machinery [Member] | |||||
Fixed assets gross | 169,000 | 169,000 | |||
Computer [Member] | |||||
Fixed assets gross | 4,000 | 4,000 | |||
Vehicles [Member] | |||||
Fixed assets gross | $ 15,000 | $ 15,000 |