Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 10, 2016 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Long Island Iced Tea Corp. | |
Entity Central Index Key | 1,629,261 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 7,308,756 | |
Trading Symbol | LTEA | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash | $ 359,613 | $ 207,192 |
Accounts receivable, net (including amounts due from related parties of $56,493 and $67,992, respectively) | 1,469,666 | 363,096 |
Inventories, net | 978,159 | 712,558 |
Restricted cash | 127,580 | |
Short-term investments | 2,507,302 | |
Prepaid expenses and other current assets | 87,654 | 48,237 |
Total current assets | 5,402,394 | 1,458,663 |
Property and equipment, net | 253,299 | 360,920 |
Intangible assets | 23,741 | 27,494 |
Other assets | 55,633 | 67,438 |
Deferred financing costs | 954,113 | 1,838,082 |
Total assets | 6,689,180 | 3,752,597 |
Current Liabilities: | ||
Accounts payable | 886,601 | 601,681 |
Accrued expenses | 1,347,420 | 458,938 |
Current portion of automobile loans | 12,643 | 19,231 |
Current portion of equipment loan | 38,996 | 36,627 |
Total current liabilities | 2,285,660 | 1,116,477 |
Line of credit | 1,091,571 | |
Other liabilities | 30,000 | 30,000 |
Deferred rent | 2,710 | 4,648 |
Long term portion of automobile loans | 20,475 | 36,864 |
Long term portion of equipment loan | 46,876 | 76,477 |
Total liabilities | 2,385,721 | 2,356,037 |
Commitments and contingencies, Note 7 | ||
Stockholders' Equity | ||
Preferred stock, par value $0.0001; authorized 1,000,000 shares; no shares issued and outstanding | ||
Common stock, par value $0.0001; authorized 35,000,000 shares; 7,168,621 and 4,635,783 shares issued and outstanding, as of September 30, 2016 and December 31, 2015, respectively | 717 | 463 |
Additional paid-in capital | 15,222,983 | 3,926,074 |
Accumulated deficit | (10,920,241) | (2,529,977) |
Total stockholders' equity | 4,303,459 | 1,396,560 |
Total liabilities and stockholders' equity | $ 6,689,180 | $ 3,752,597 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, related parties | $ 56,493 | $ 67,992 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 35,000,000 | 35,000,000 |
Common stock, shares, issued | 7,168,621 | 4,635,783 |
Common stock, shares, outstanding | 7,168,621 | 4,635,783 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Net sales | $ 1,301,125 | $ 456,787 | $ 3,412,961 | $ 1,397,244 |
Cost of goods sold | 1,196,790 | 392,606 | 3,253,278 | 1,104,723 |
Gross profit | 104,335 | 64,181 | 159,683 | 292,521 |
Operating expenses: | ||||
General and administrative expenses | 2,170,522 | 646,788 | 3,957,763 | 1,264,436 |
Selling and marketing expenses | 661,247 | 371,211 | 2,031,873 | 994,544 |
Total operating expenses | 2,831,769 | 1,017,999 | 5,989,636 | 2,258,980 |
Operating Loss | (2,727,434) | (953,818) | (5,829,953) | (1,966,459) |
Other expenses: | ||||
Other income (expense) | 4,070 | 4,070 | (3,327) | |
Interest expense | (579,710) | (872) | (976,427) | (47,056) |
Loss on inducement | (1,587,954) | (1,587,954) | ||
Net loss | $ (4,891,028) | $ (954,690) | $ (8,390,264) | $ (2,016,842) |
Weighted average number of common shares outstanding - basic and diluted | 6,514,295 | 4,470,639 | 5,407,036 | 3,450,625 |
Basic and diluted net loss per share | $ (0.75) | $ (0.21) | $ (1.55) | $ (0.58) |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2016 - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2015 | $ 463 | $ 3,926,074 | $ (2,529,977) | $ 1,396,560 |
Balance, shares at Dec. 31, 2015 | 4,635,783 | |||
Issuance of common stock to consultants, employees, vendors, and customers | $ 5 | 205,695 | $ 205,700 | |
Issuance of common stock to consultants, employees, vendors, and customers, shares | 50,800 | 1,667 | ||
Issuance of common stock and warrants, net of costs | $ 23 | 861,767 | $ 861,790 | |
Issuance of common stock and warrants, net of costs, shares | 230,475 | |||
Issuance of warrants to placement agent | 38,056 | 38,056 | ||
Issuance of common stock to the Advisory Board and Board of Directors | $ 7 | 239,993 | 240,000 | |
Issuance of common stock to the Advisory Board and Board of Directors, shares | 65,824 | |||
Issuance of common stock and warrants in the Public Offering, net of costs | $ 127 | 5,867,090 | 5,867,217 | |
Issuance of common stock and warrants in the Public Offering, net of costs, shares | 1,270,156 | |||
Issuance of common stock in exchange for principal and warrants on Brentwood line of credit | $ 91 | 3,257,239 | 1,669,376 | |
Issuance of common stock in exchange for principal and warrants on Brentwood line of credit, shares | 908,083 | |||
Stock based compensation | $ 1 | 770,819 | 770,820 | |
Stock based compensation, shares | 7,500 | |||
Disgorgement on short swing profit | 56,250 | 56,250 | ||
Net loss | (8,390,264) | (8,390,264) | ||
Balance at Sep. 30, 2016 | $ 717 | $ 15,222,983 | $ (10,920,241) | $ 4,303,459 |
Balance, shares at Sep. 30, 2016 | 7,168,621 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash Flows From Operating Activities | ||
Net loss | $ (8,390,264) | $ (2,016,842) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Bad debt expense | 35,234 | 20,040 |
Depreciation and amortization expense | 120,871 | 80,331 |
Deferred rent | (1,938) | (801) |
Stock based compensation | 1,010,820 | 207,949 |
Loss on disposal of property and equipment | 515 | 3,327 |
Amortization of deferred financing costs | 883,969 | |
Paid-in-kind interest | 77,805 | |
Inducement expense | 1,587,954 | |
Changes in assets and liabilities: | ||
Accounts receivable | (1,141,804) | (203,375) |
Inventory | (265,601) | (452,577) |
Restricted cash | 127,580 | |
Prepaid expenses and other current assets | (39,417) | (22,782) |
Other assets | 11,805 | (58,895) |
Accounts payable | 430,620 | 243,707 |
Accrued expenses | 986,023 | 276,068 |
Other liabilities | (92,466) | |
Total adjustments | 3,824,436 | 526 |
Net cash used in operating activities | (4,565,828) | (2,016,316) |
Cash Flows From Investing Activities | ||
Investment in short-term investments | (2,507,302) | |
Purchases of property and equipment | (9,497) | (65,036) |
Net cash used in investing activities | (2,516,799) | (65,036) |
Cash Flows From Financing Activities | ||
Repayment of automobile loans | (22,977) | (13,318) |
Repayment of equipment loans | (27,232) | |
Proceeds from line of credit | 500,000 | |
Proceeds from the reverse merger with Cullen Agricultural Holding Corporation | 120,841 | |
Proceeds from the sale of common stock, net of costs | 568,468 | |
Proceeds from the sale of common stock and warrants, net of costs | 861,790 | 475,885 |
Proceeds from the Public Offering, net of costs | 5,867,217 | |
Proceeds from loan | ||
Proceeds from disgorgement of short swing profit | 56,250 | |
Net cash provided by financing activities | 7,235,048 | 1,951,876 |
Net increase (decrease) in cash | 152,421 | (129,476) |
Cash, beginning of period | 207,192 | 398,164 |
Cash, end of period | 359,613 | 268,688 |
Cash paid for interest | 19,898 | 2,954 |
Non-cash investing and financing activities: | ||
Issuance of common stock to consultants, vendors, employees, and customers | 205,700 | |
Net assets acquired in reverse merger | 1,751,655 | |
Conversion of loans payable and accrued interest to stockholders' equity | 555,910 | |
Costs related to issuance of common stock and warrants included in accrued expenses | 109,769 | |
Purchase of a truck in exchange for accounts receivable | 9,500 | |
Payment of accounts payable through the issuance of common stock | 134,270 | |
Issuance of common stock in exchange for Brentwood line of credit and related warrants | 1,669,376 | |
Bass Properties LLC Loan [Member] | ||
Cash Flows From Financing Activities | ||
Proceeds from loan | 150,000 | |
Cullen Agricultural Holding Corporation Loan [Member] | ||
Cash Flows From Financing Activities | ||
Proceeds from loan | 250,000 | |
Ivory Castle Limited Loan [Member] | ||
Cash Flows From Financing Activities | ||
Proceeds from loan | $ 400,000 |
Business Organization, Liquidit
Business Organization, Liquidity and Management's Plans | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Organization, Liquidity and Management's Plans | NOTE 1 BUSINESS ORGANIZATION, LIQUIDITY AND MANAGEMENTS PLANS Business Organization Long Island Iced Tea Corp, a Delaware C-Corporation (LIIT), was formed on December 23, 2014. LIIT was formed in order to allow for the completion of mergers between Cullen Agricultural Holding Corp. (Cullen) and Long Island Brand Beverages LLC (LIBB). On December 31, 2014, LIIT entered into a merger agreement, as amended as of April 23, 2015, with Cullen, a public company, Cullen Merger Sub, Inc. (Cullen Merger Sub), LIBB Acquisition Sub, LLC (LIBB Merger Sub), Long Island Brand Beverages LLC and the founders of LIBB (Founders). Pursuant to the merger agreement, (a) Cullen Merger Sub was to be merged with and into Cullen, with Cullen surviving and becoming a wholly-owned subsidiary of LIIT and (b) LIBB Merger Sub was to be merged with and into LIBB, with LIBB surviving and becoming a wholly-owned subsidiary of LIIT (the Mergers). As a result of the merger which was consummated on May 27, 2015, LIIT consisted of its wholly owned subsidiaries, LIBB (its operating subsidiary) and Cullen and Cullens wholly owned subsidiaries (collectively the Company). For accounting purposes, the Mergers were treated as an acquisition of Cullen by LIBB and as a recapitalization of LIBB, as the former LIBB members hold a large percent of the LIITs shares and will exercise significant influence over the operating and financial policies of the consolidated entity and the Company was a public shell company at the time of the transaction. Pursuant to Accounting Standards Codification (ASC) 805-10-55-11 through 55-15, the merger or acquisition of a private operating company into a non-operating public shell with nominal assets is considered a capital transaction in substance rather than a business combination. As a result, the condensed consolidated statements of operations and statements of cash flows of LIBB have been retroactively updated to reflect the recapitalization. Overview The Company is a holding company operating through its wholly-owned subsidiary, LIBB. The Company is engaged in the production and distribution of premium Non-Alcoholic ready-to-drink (NARTD) iced tea in the beverage industry. The Company is currently organized around our flagship brand Long Island Iced Tea, a premium NARTD tea made from a proprietary recipe and with quality components. The Companys mission is to provide consumers with premium iced tea offered at an affordable price. The Company aspires to be a market leader in the development of iced tea beverages that are convenient and appealing to consumers. There are two major target markets for Long Island Iced Tea: consumers on the go and health conscious consumers. Consumers on the go are families, employees, students and other consumers who lead a busy lifestyle. With increasingly hectic and demanding schedules, there is a need for products that are accessible and readily available. Health conscious consumers are individuals who are becoming more interested and better educated on what is included in their diets, causing them to shift away from the less healthy options, such as carbonated soft drinks, towards alternative beverages such as iced tea. During the second quarter of 2016, the Company began selling aloe juices and commenced selling a private label version of its iced tea product. For the three and nine months ended September 30, 2016, the Companys aloe juice product accounted for approximately 35% and 23%, respectively, of the Companys consolidated net sales. The Company sells its products to regional retail chains and to a mix of independent mid-to-large range distributors who in turn sell to retail outlets, such as big chain supermarkets, mass merchants, convenience stores, restaurants and hotels, principally in the New York, New Jersey, Connecticut and Pennsylvania markets. During 2016, the Company has also begun expansion into other geographic markets, such as Florida, Virginia, Massachusetts, New Hampshire, Nevada, Rhode Island and parts of the Midwest. The Companys products are currently available in 12 states that have a cumulative population of 100 million people. The Company has also begun to sell its products globally in regions such as South Korea and multiple Caribbean nations. Liquidity and Managements Plan The Company has been focused on the development of its brand and its infrastructure, as well as in the establishment of a network of distributors and qualified direct accounts. From inception, the Company has financed its operations through the issuance of debt and equity, and through utilizing trade credit with its vendors. As of September 30, 2016, the Company has cash of $359,613 and short-term investments of $2,507,302. The Company incurred net losses of $4,891,028 and $8,390,264 for the three and nine months ended September 30, 2016, respectively. At September 30, 2016, the Companys stockholders equity was $4,303,459. As of September 30, 2016, the Company had working capital of $3,116,734. During the nine months ended September 30, 2016, the Company raised net proceeds of $6,729,007 through the sale of 1,500,631 shares of common stock and 230,475 warrants to purchase common stock. On November 23, 2015, LIIT and LIBB entered into a Credit and Security Agreement (the Credit Agreement), by and among LIBB, as the borrower, LIIT and Brentwood LIIT Inc., as the lender. Brentwood LIIT Inc.s interest in the Credit Agreement and the related agreements and instruments thereunder was subsequently transferred to Brentwood LIIT (NZ) Ltd. (the Lender). Brentwood LIIT Inc. and the Lender are controlled by a related party, Eric Watson, who beneficially owned approximately 16% of the Company on November 23, 2015 and 18.2% as of September 30, 2016. The Credit Agreement provides for a revolving credit facility in an initial amount of up to $1,000,000, subject to increases at the Lenders discretion as provided in the Credit Agreement (the Available Amount), up to a maximum amount of $5,000,000 (which was subsequently reduced to $3,500,000 in connection with the closing of the Offering, as defined below) (the Facility Amount). The Available Amount may be increased, in increments of $500,000, up to the Facility Amount, and LIBB may obtain further advances, subject to the approval of the Lender. On November 23, 2015 and December 10, 2015, LIBB obtained an aggregate of $1,000,000 in advances from the Lender, constituting the full Available Amount at such time. On March 17, 2016, LIIT, LIBB and the Lender agreed to increase the Available Amount by $500,000 to $1,500,000 and approved an additional $500,000 in advances. On March 24, 2016, LIBB obtained $250,000 of the approved advance from the Lender and during May 2016, LIBB obtained the other $250,000 of the approved advances from the Lender, as a result of which the Available Amount was borrowed in full. On July 28 and 29, 2016, the Company sold 1,270,156 shares (the Shares) of common stock in a public offering (the Offering) at an offering price of $5.50 per share, pursuant to the Companys registration statement on Form S-1 (File No. 333-210669). The sale of the Shares generated gross proceeds of $6,985,858 and net proceeds of $5,867,217 after deducting commissions and other offering expenses. In connection with sale of the Shares, the Companys common stock was approved for listing on the NASDAQ Capital Market under its current symbol, LTEA. The Offering was terminated on August 4, 2016. No further sales of shares were made in the Offering. In connection with the sale of the Shares, the Company completed a recapitalization transaction (the Recapitalization) with the Lender. Pursuant to the Recapitalization, the Lender converted all of the outstanding principal and interest ($1,669,376) under the Credit Agreement into 421,972 shares of common stock and exchanged its warrant for 486,111 shares of common stock. As of September 30, 2016, the balance under the Credit Agreement was $0. In connection with the consummation of the Offering, on July 29, 2016, the selling agents were issued warrants to purchase an aggregate of 31,522 shares of common stock. These warrants will be exercisable for cash or on a cashless basis at an exercise price of $6.875 per share, commencing on January 14, 2017 and expiring on July 14, 2021. The exercise price and number of shares of common stock issuable upon exercise of the warrants are subject to adjustment for stock splits and similar adjustments. The warrants contain provisions for one demand registration of the sale of the underlying shares of common stock at the Companys expense, an additional demand registration at the warrant holders expense, and unlimited piggyback registration rights at the Companys expense until July 28, 2021. On October 12, 2016, the Company filed a shelf registration statement on Form S-3/A Amendment No. 1, under which the Company may from time to time, sell any combination of debt or equity securities up to an aggregate initial offering price not to exceed $50,000,000. (See Note 10 Subsequent Events) Liquidity and Managements Plan, continued The Company believes that as a result of the commitment for financing from a stockholder and its working capital as of September 30, 2016, its cash resources will be sufficient to fund the Companys net cash requirements for the next twelve months from the date these condensed consolidated financial statements are issued. However, in order to execute the Companys long-term growth strategy, the Company may need to raise additional funds through private equity offerings, debt financings, or other means. There are no assurances that the Company will be able to raise such funds on terms that would be acceptable to the Company. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the result that may be expected for the year ending December 31, 2016. These condensed consolidated financial statements should be read in conjunction with the financial statements for the year ended December 31, 2015 and related notes thereto included in the Companys Form 10-K filed with the United States Securities and Exchange Commission (SEC) on March 22, 2016. Principles of Consolidation The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, and also affect the amounts of revenues and expenses reported for each period. Actual results could differ from those which result from using such estimates. Management utilizes various other estimates, including but not limited to, assessing the collectability of accounts receivable, accrual of rebates to customers, the valuation of inventory, determining the estimated lives of long-lived assets, determining the potential impairment of intangibles, the fair value of warrants issued, the fair value of stock options, the fair value of a beneficial conversion feature and other legal claims and contingencies. The results of any changes in accounting estimates are reflected in the financial statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period that they are determined to be necessary. Revenue Recognition Revenue is stated net of sales discounts and rebates paid to customers (see Customer Marketing Programs and Sales Incentives, below). Net sales are recognized when all of the following conditions are met: (1) the price is fixed and determinable; (2) evidence of a binding arrangement exists (generally, purchase orders); (3) products have been delivered and there is no future performance required; and (4) amounts are collectible under normal payment terms. These conditions typically occur when the products are delivered to or picked up by the Companys customers. Customer Marketing Programs and Sales Incentives, continued The Company participates in various programs and arrangements with customers designed to increase the sale of its products. Among these programs are arrangements under which allowances can be earned by customers for various discounts to the end retailers or for participating in specific marketing programs. The Company believes that its participation in these programs is essential to ensuring volume and revenue growth in a competitive marketplace. In addition, during the three and nine months ended September 30, 2016, the Company issued shares of common stock in the amounts of 0 and 3,400, respectively, at a fair value of $4.00 per share, to customers and the owners of customers. Included in the costs of these programs were costs associated with the fair value of shares issued, which totaled $0 and $26,221 for the three months September 30, 2016 and 2015, respectively and $45,165 and $54,919 for the nine months ended September 30, 2016 and 2015, respectively. Additionally, the Company may be required to occasionally pay fees to its customers (Placement Fees) in order to place its products in the customers stores. In some cases, the Placement Fees carry no further benefit or minimum revenue guarantee other than the right to place the Companys product in the store of the customer. The Placement Fees are recorded as a reduction of revenue. If, at the time the Placement Fees are recognized in the statement of operations, the Company has cumulative negative revenue with that particular customer, such negative revenue is reclassified and recorded as a part of selling and marketing expense. For the three and nine months ended September 30, 2016, the Company recorded $0 and $11,087, respectively, of Placement Fees to selling and marketing expense. No such Placement Fees were recorded in selling and marketing expense for the three and nine months ended September 30, 2015. Shipping and Handling Costs Shipping and handling costs incurred to move finished goods from the Companys sales distribution centers to customer locations are included in selling and marketing expenses on the condensed consolidated statements of operations and totaled $117,998 and $27,563 for the three months ended September 30, 2016 and 2015, respectively and $319,668 and $71,813 for the nine months ended September 30, 2016 and 2015, respectively. Advertising The Company expenses advertising costs as incurred. Advertising expense totaled $84,433 and $29,130, respectively, for the three months ended September 30, 2016 and 2015 and $114,980 and $155,623, respectively, for the nine months ended September 30, 2016 and 2015. Research and Development The Company expenses the costs of research and development as incurred. For the three and nine months ended September 30, 2016, research and development expense related to new product initiatives were $0 and $46,667, respectively. These expenses were incurred pursuant to a product development agreement, which will require the Company to pay $40,000 in cash and $40,000 in common stock upon the completion of the arrangement. There were no research and development expenses incurred during the three and nine months ended September 30, 2015. Research and development expenses are included within general and administrative expenses within the condensed consolidated statement of operations. As of September 30, 2016, $50,000 was included in accrued expenses in the condensed consolidated balance sheet related to this arrangement. Operating Leases The Company records rent related to its operating leases on a straight line basis over the lease term. Cash and Cash Equivalents The Company considers all highly liquid instruments with an original maturity of three months or less when acquired to be cash equivalents. Restricted Cash Pursuant to the terms of the Credit Agreement with Lender, the Company was required to utilize $150,000 of certain $1,000,000 in proceeds from the Credit Agreement for initiatives related to the development of an alcohol business. As of December 31, 2015, $127,580 of the Companys cash on hand was restricted for use in the development of an alcohol business. On March 17, 2016, LIBB entered into an agreement with Lender whereby such restriction was lifted. Accounts Receivable The Company sells products to distributors and in certain cases directly to retailers, and extends credit, generally without requiring collateral, based on its evaluation of the customers financial condition. While the Company has a concentration of credit risk in the retail sector, it believes this risk is mitigated due to the diverse nature of the customers it serves, including, but not limited to, its type, geographic location, size, and beverage channel. Potential losses on the Companys receivables are dependent on each individual customers financial condition and sales adjustments granted after the balance sheet date. The Company carries its trade accounts receivable at net realizable value. Typically, accounts receivable have terms of net 30 days and do not bear interest. The Company monitors its exposure to losses on receivables and maintains allowances for potential losses or adjustments. The Company determines these allowances by (1) evaluating the aging of its receivables; (2) analyzing its history of sales adjustments; and (3) reviewing its high-risk customers. Past due receivable balances are written off when the Companys efforts have been unsuccessful in collecting the amount due. Accounts receivable, net, is as follows: As of September 30, 2016 December 31, 2015 Accounts receivable, gross $ 1,545,061 $ 405,096 Allowance for doubtful accounts (75,395 ) (42,000 ) Accounts receivable, net $ 1,469,666 $ 363,096 Concentrations of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash on deposit with financial institutions, short-term investments and accounts receivable. At times, the Companys cash in banks is in excess of the Federal Deposit Insurance Corporation (FDIC) insurance limit. The Company has not experienced any loss as a result of these deposits. These cash balances are maintained with one bank. As of September 30, 2016, the Company was exposed to concentrations of credit risk through short-term investments. As of September 30, 2016, three customers accounted for 25%, 11% and 11% of the Companys trade receivables, respectively. As of December 31, 2015, two customers accounted for 14% and 30% of the Companys trade receivables. The Company does not generally require collateral or other security to support customer receivables. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses, as required. Inventories The Companys inventory includes raw materials such as bottles, sweeteners, labels, flavors and packaging. Finished goods inventory consists primarily of bottled iced tea. The Company values its inventories at the lower of cost or net realizable value, net of reserves. Cost is determined using the first-in, first-out (FIFO) method. As of September 30, 2016 and December 31, 2015, the Company recorded a reserve of $28,615 and $41,790, respectively, to reduce the cost of certain products to estimated net realizable value. The following table summarizes inventories as of the dates presented: As of September 30, 2016 December 31, 2015 Finished goods, net $ 543,755 $ 565,624 Raw materials and supplies, net 434,404 146,934 Total inventories $ 978,159 $ 712,558 Property and Equipment Property and equipment is recorded at cost. Major property additions, replacements, and betterments are capitalized, while maintenance and repairs that do not extend the useful lives of an asset or add new functionality are expensed as incurred. Depreciation is recorded using the straight-line method over the respective estimated useful lives of the Companys assets. The estimated useful lives typically are 3 years for cold-drink containers, such as reusable fridges, wood racks, vending machines, barrels, and coolers, and are depreciated using the straight-line method over the estimated useful life of each group of equipment, as determined using the group-life method. Under this method, the Company does not recognize gains or losses on the disposal of individual units of equipment when the disposal occurs in the normal course of business. The Company capitalizes the costs of refurbishing its cold-drink containers and depreciates those costs over the estimated period until the next scheduled refurbishment or until the equipment is retired. The estimated useful lives are typically 3 to 5 years for office furniture and equipment and are depreciated on a straight-line basis. The estimated useful lives for trucks and automobiles are typically 3 to 5 years and are depreciated on a straight line basis. For the three months ended September 30, 2016 and 2015, depreciation expense was $39,420 and $27,043, respectively. For the nine months ended September 30, 2016 and 2015, depreciation expense was $117,118 and $76,578, respectively. The Company disposed of one of its vehicles on July 18, 2016. In connection with the disposal, the Company recognized a loss of $515. Intangible Assets Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually or when circumstances indicate that there could be an impairment. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. Intangibles assets with indefinite useful lives consist of the cost to purchase an internet domain name for $20,000. The domain name is considered to have a perpetual life and as such, is not amortized. Insignificant costs incurred associated with renewing this asset are expensed as incurred. Intangible assets with finite useful lives are amortized over their expected useful life. Intangible assets with useful lives are tested for impairment when circumstances indicate that there could be an impairment. Intangible assets with finite useful lives include website development costs of $3,741 and $7,494 as of September 30, 2016 and December 31, 2015, respectively. The estimated useful life of the capitalized costs of the Companys website is 3 years and is depreciated on a straight line basis. As of September 30, 2016, the cost of the website development was $15,000 and the accumulated amortization was $11,259. As of December 31, 2015, the cost of the website development was $15,000 and the accumulated amortization was $7,506. Amortization expense was $1,251 and $1,251 for the three months ended 2016 and 2015, respectively and $3,753 and $3,753 for the nine months ended September 30, 2016 and 2015, respectively. Deferred Offering Costs The Company capitalizes the costs related to proposed offerings of its equity instruments as deferred offering costs and records the deferred offering costs as an offset to additional paid in capital upon the completion of the associated capital raising activity. Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement, and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carry forwards will result in a benefit based on expected profitability by tax jurisdiction. In its interim financial statements, the Company follows the guidance in ASC 270, Interim Reporting and ASC 740 Income Taxes, whereby the Company utilizes the expected annual effective tax rate in determining its income tax provisions for the interim periods. That rate differs from U.S. statutory rates primarily as a result of valuation allowance related to the Companys net operating loss carryforward as a result of the historical losses of the Company. Income Taxes, continued Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liabilities. In managements opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. The Company accounts for uncertain tax positions in accordance with ASC 740 - Income Taxes. No uncertain tax provisions have been identified. The Company accrues interest and penalties, if incurred, on unrecognized tax benefits as components of the income tax provision in the accompanying condensed consolidated statements of operations. Our primary tax jurisdictions are our federal, various state, and local taxes. Generally, Federal, State and Local authorities may examine the Company's tax returns for three years from the date of filing. In accordance with ASC 740, the Company evaluates whether a valuation allowance should be established against the net deferred tax assets based upon the consideration of all available evidence and using a more likely than not standard. Significant weight is given to evidence that can be objectively verified. The determination to record a valuation allowance is based on the recent history of cumulative losses and current operating performance. In conducting the analysis, the Company utilizes an approach, which considers the current year loss, including an assessment of the degree to which any losses are driven by items that are unusual in nature and incurred to improve future profitability. In addition, the Company reviews changes in near-term market conditions and any other factors arising during the period, which may impact its future operating results. Earnings per share Basic net earnings per common share is computed by dividing net loss by the weighted-average number of common shares outstanding. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the impact of common shares issuable upon exercise of stock options and warrants. The computation of diluted earnings per share excludes those dilutive securities with an exercise price in excess of the average market price of the Companys common shares during the periods presented. The computation of diluted earnings per share excludes outstanding options in periods where the exercise of such options would be antidilutive. Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive. For the Three and Nine Months Ended September 30, 2016 2015 Options to purchase common stock 465,411 194,667 Warrants to purchase common stock 470,570 - Total potentially dilutive securities 935,981 194,667 Fair Values of Financial Instruments The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses, notes payable and other current liabilities, approximate fair value due to the short-term nature of these instruments. ASC 820 Fair Value Measurements and Disclosures provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly. Level 3 Significant unobservable inputs that cannot be corroborated by market data. Fair values for short-term money market investments are determined from quote prices in active markets for these money market funds, and are considered to be Level 1. The carrying value of financial instruments in the Companys consolidated financial statements at September 30, 2016 and December 31, 2015 are as follows: Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2) Significant Unobservable Inputs (Level 3) Short-term investments at September 30, 2016 $ 2,507,302 $ - $ - Short-term investments at December 31, 2015 $ - $ - $ - Seasonality The Companys business is seasonal with the summer months in the second and third quarter of the fiscal year typically generating the largest net sales. Recent Accounting Pronouncements In January 2016, the Financial Accounting Standards Board (FASB), issued Accounting Standards Update (ASU) 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which amends the guidance in U.S. generally accepted accounting principles on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and are to be adopted by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated financial statements. In February 2016, the FASB issued new lease accounting guidance (ASU No. 2016-02, Leases). The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated financial statements. On March 30, 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-09, Compensation Stock Compensation (Topic 718). This update requires that all excess tax benefits and tax deficiencies arising from share-based payment awards should be recognized as income tax expense or benefit on the income statement. The amendment also states that excess tax benefits should be classified along with other income tax cash flows as an operating activity. In addition, an entity can make an entity-wide accounting policy election to either estimate the number of awards expected to vest or account for forfeitures as they occur. The provisions of this update are effective for annual and interim periods beginning after December 15, 2016. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated financial statements. In April 2016, the FASB issued Accounting Standards Update ASU No. 2016-10 Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing (ASU 2016-10). ASU 2016-10 clarifies the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. The provisions of this update are effective for annual and interim periods beginning after December 15, 2017, with early application permitted. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated financial statements. In May 2016, the FASB issued Accounting Standards Update ASU No. 2016-12 Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients (ASU 2016-12). The core principal of ASU 2016-12 is the recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The provisions of this update are effective for annual and interim periods beginning after December 15, 2017, with early application permitted. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated financial statements. Recent Accounting Pronouncements, continued In August 2016, the FASB issued Accounting Standards Update ASU No. 2016-15 Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15). The amendments for this update provide guidance on the eight specific cash flows: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. The provisions of this update are effective for annual and interim periods beginning after December 15, 2016, with early application permitted. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated financial statements . Managements Evaluation of Subsequent Events The Company evaluates events that have occurred after the balance sheet date but before the condensed consolidated financial statements are issued. Based upon the review, other than as presented within Note 10, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements. |
Equipment Loan
Equipment Loan | 9 Months Ended |
Sep. 30, 2016 | |
Equipment Loan [Abstract] | |
Equipment Loan | NOTE 3 EQUIPMENT LOAN On November 23, 2015, the Company entered into a reimbursement agreement with Magnum Vending Corp. (Magnum), an entity managed by Philip Thomas, the Companys Chief Executive Officer and a director of the Company, and certain of his family members. In exchange for the exclusive right to stock vending machines owned by Magnum, the Company agreed to reimburse Magnum for the cost of products to stock the machines and the costs that Magnum incurred to acquire the machines including machines which were purchased with an equipment loan. The total principal amount of the payments underlying the agreement upon inception was $117,917. The reimbursements will be made in 35 monthly payments of principal and interest in the amount of $3,819 with an interest rate of 10%. Upon completion of these payments in October 2018, Magnum will transfer ownership of the vending machines to the Company. In addition, in exchange for the right to stock certain other vending machines that the Company has the right to use, the Company agreed to purchase the products required to be displayed in those vending machines from Magnum, at a price equal to Magnums cost for such products. The Company may terminate the agreement and all obligations to make future payments on ten days written notice to Magnum. As of September 30, 2016 and December 31, 2015, the outstanding balance on the equipment loan was $85,872 and $113,104, respectively. |
Line of Credit
Line of Credit | 9 Months Ended |
Sep. 30, 2016 | |
Line of Credit Facility [Abstract] | |
Line of Credit | NOTE 4 LINE OF CREDIT On November 23, 2015 and December 10, 2015, LIBB obtained an aggregate of $1,000,000 in advances from the Lender, constituting the full Available Amount at such time. On March 17, 2016, LIIT, LIBB and the Lender agreed to increase the Available Amount by $500,000 to $1,500,000 and approved an additional $500,000 in advances. On March 24, 2016, LIBB obtained $250,000 of the approved advance from the Lender and during May 2016, LIBB obtained an additional $250,000 of the approved advances from the Lender, as a result of which as of May 20, 2016 the Available Amount was borrowed in full. As of September 30, 2016 and December 31, 2015, the outstanding balance on the line of credit was $0 and $1,091,571, respectively. The credit facility bears interest at a rate equal to the prime rate (3.5% at December 31, 2015 and September 30, 2016) plus 7.5%, compounded monthly, and matures on November 23, 2018. Effective January 10, 2016, the Credit Agreement was amended such that interest was compounded on a quarterly basis. Upon the occurrence of an event of default, the Credit Agreement provides for an additional 8% interest pursuant to the terms of the agreement. The outstanding principal and interest under the credit facility are payable in cash on the maturity date. The Company also paid the Lender a one-time facility fee equal to 1.75% of the Facility Amount, which was capitalized and added to the principal amount of the loan, and will pay the Lender $30,000 for its expenses at the maturity date. The compounded interest and capitalized fees are excluded when determining whether the Available Amount has been exceeded. The credit facility is secured by a first priority security interest in all of the assets of LIIT and LIBB, including the membership interests in LIBB held by LIIT. LIIT also has guaranteed the repayment of LIBBs obligations under the credit facility. In addition, the credit facility will be guaranteed by Philip Thomas, the Companys Chief Executive Officer and a director of the Company, in certain limited circumstances up to a maximum amount of $200,000. The proceeds of the credit facility may be used for purposes disclosed in writing to the Lender in connection with each advance. In connection with the establishment of the credit facility, the Company issued a warrant to the Lender. The warrant entitled the holder to purchase 1,111,111 shares of the Companys common stock at an exercise price of $4.50 and included a cashless exercise provision. Also, as part of the Recapitalization, the warrant was exchanged for 486,111 shares of the Companys common stock. (See Induced Conversion The Lender will have certain piggyback registration rights, on customary terms, with respect to the shares of the Companys common stock issued or issuable upon conversion of the credit facility and upon exchange of the warrant. The proceeds of the credit facility may be used for purposes disclosed in writing to the Lender in connection with each advance. The Lender may accelerate the credit facility upon the occurrence of certain events of default, including a failure to make a payment under the credit facility when due, a violation of the covenants contained in the Credit Agreement and related documents, a filing of a bankruptcy petition or a similar event with respect to LIBB or the Company or the occurrence of an event of default under other material indebtedness of LIBB or the Company. The Company and LIBB also made certain customary representations, warranties and covenants, including negative covenants with respect to the incurrence of indebtedness. As of September 30, 2016, the Company was in compliance with these covenants. Deferred financing costs related to the Credit Agreement, which are included in the accompanying condensed consolidated balance sheet, are amortized over the three year term of the line of credit agreement. As of September 30, 2016, the net carrying amount of deferred financing costs was $954,113. As of December 31, 2015, the gross carrying amount of deferred financing costs were $1,903,879 with accumulated amortization of $65,797. During April 2016, the Company entered into an amendment to the agreement with the Lender, which provided for the Recapitalization. Upon a capital raise of at least $5,000,000, the Lender agreed to convert all of the outstanding principal and interest under the Credit Facility into 421,972 shares of common stock (assuming all approved advances are completed and there are no further advances by the Lender) at the closing of the Offering. In addition, the Lender agreed to exchange its 1,111,111 warrants for 486,111 shares of common stock at such time. The Credit Facility would remain outstanding except that the Facility Amount would be reduced to $3,500,000. In connection with the reduction in the capacity of the Credit Facility, the Company recorded a charge of $408,000 to interest expense to reduce proportionally the unamortized deferred financing costs. Any amounts drawn from the Facility Amount require lender approval. The Recapitalization was effectuated upon the closing of the Offering. In addition, the Company and LIBB entered into an Amendment No. 1 (the Registration Rights Amendment) to the Registration Rights Agreement (the Registration Rights Agreement), dated as of December 3, 2015, by and among LIBB, the Company and the Lender. The Registration Rights Amendment amended the Registration Rights Agreement, effective as of the closing of a Qualified Public Offering, so that the piggyback registration rights granted to the Lender thereunder will apply to the shares issuable in the Recapitalization. Induced conversion of the credit facility and the related warrants As disclosed above, on July 29, 2016, as part of the Recapitalization, the outstanding balance and accrued interest on the credit facility and the Lenders warrant to purchase 1,111,111 shares of the Companys common stock was converted into a total of 908,083 shares of the Companys common stock. The Company accounted for this transaction as an induced conversion in accordance with the Accounting Standards Codification (ASC) 470-20-40-16. The transaction qualifies as an inducement as the Company effectively lowered the exercise price of the warrant in order to induce the holder to convert the debt and warrants to shares of common stock. The Companys purpose for the inducement was to improve the Companys balance sheet and capitalization ahead of its proposed public offering. ASC 470-20-40-16 prescribes that, upon an induced conversion of convertible debt, the Company should recognize in earnings the difference between (a) the fair value of the securities issued upon conversion and (b) the fair value of the securities that would have been issued in accordance with the original conversion terms. The Company determined that during April 2016, the Companys common stock had a fair value of $5.50 per share. During April 2016, the Company determined that its common stock did not have sufficient trading volume for the market based trading price to be relied upon as a reliable measure of fair value. As such, the Company needed to utilize another measure in order to determine fair value. The Company determined that the best measure of fair value was the $5.50 price of shares issued upon the consummation of the Offering, which closed in July 2016. This fair value was consistent with the range of pricing established with the Companys bankers ahead of the Offering, and aligned with the fact that the inducement transaction would only be effected upon the closing of the Offering. During the three and nine months ended September 30, 2016, the Company recorded a non-cash charge of $1,587,954 related to the induced conversion, which is recorded on the Statement of Operations as loss on induced conversion of line of credit and warrants. The induced conversion charge was measured as of April 2016, the date the agreement was reached, and recorded on July 29, 2016, the date the conversion was consummated. The charge was calculated as follows: For the three and nine months ended September 30, 2016 Fair value of securities to be issued upon original conversion terms: Line of credit ($1,669,372 converted at $4.00 per share into 417,344 shares of common stock, which had a fair value of $5.50 per share) $ 2,295,392 Warrants (1,111,111 shares of common stock at a fair value of $5.50 per share, less $5,000,000 in exercise proceeds) 1,111,111 Total fair value of securities issued upon conversion $ 3,406,503 Fair value of securities issued upon conversion: Shares of common stock 908,083 Fair value per share $ 5.50 Aggregate fair value of common stock to be issued upon original conversion terms $ 4,994,457 Loss on induced conversion of line of credit and warrants $ (1,587,954 ) |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | NOTE 5 STOCKHOLDERS EQUITY From January 1, 2016 to March 14, 2016, the Company sold 171,725 units to investors at $4.00 per unit for gross proceeds of $686,900. Each unit consists of one share of common stock and a warrant to purchase one share of common stock. The Company incurred costs of $60,110 related to these sales resulting in net proceeds of $626,790. As part of these sales 25,000 units were sold to Thomas Cardella, who subsequently became a member of the Companys Board of Directors, and 7,500 shares were sold to Paul Vassilakos, a member of the Board of Directors. The sales were part of a private placement of up to $3,000,000 of units (the Second Offering) conducted by the Company on a best efforts basis through a placement agent (the Placement Agent) that commenced on November 24, 2015. The Offering terminated on March 14, 2016. The Placement Agent for the Second Offering was paid a commission equal to 10% of the aggregate purchase price from the Units sold to investors introduced to the Company by the Placement Agent. The Company also paid the Placement Agent a non-accountable expense allowance equal to 3% of the aggregate purchase price from the Units sold to (i) investors introduced to the Company by the Placement Agent and (ii) investors not introduced to the Company by the Placement Agent who purchase less than $500,000 of Units in the aggregate (together, the Covered Investors). From March 1, 2016 through March 14, 2016, the Placement Agent was only entitled to a 3% non-accountable allowance for investors introduced by our Company to the Placement Agent. In addition, the Placement Agent received warrants to purchase a number of shares of common stock equal to 10% of the total shares of common stock included in the Units sold in the Second Offering to the Covered Investors, with an exercise price of $4.50 per share. Each warrant issued pursuant to the Second Offering entitles the holder to purchase one share of the Companys common stock at an exercise price of $6.00 per share, commencing immediately and expiring on November 30, 2018. The exercise price and number of shares of common stock issuable on exercise of the warrants are subject to standard anti-dilution provisions. The Company, at its option, may call the warrants for redemption, in whole and not in part, at a price of $0.01 per warrant, if (i) the closing price per share of the common stock is at least $10.00 for 30 consecutive trading days ending on the third business day prior to the notice of redemption or (ii) the common stock is listed for trading on a national securities exchange and the closing price per share of common stock on the first day of trading on such exchange is at least $7.50. The right to exercise will be forfeited unless the warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record holder of a warrant will have no further rights except to receive the redemption price for such holders warrant upon surrender of such warrant. During the year ended December 31, 2015 and through March 14, 2016, the Company sold 345,725 units through the Placement Agent. As a result, on March 29, 2016, 34,573 warrants were issued to the Placement Agent. The warrants have an exercise price of $4.50 per share and expire on October 30, 2020. On March 29, 2016 and March 31, 2016, the Company entered into subscription agreements for the sale of 58,750 units for gross proceeds of $235,000 at $4.00 per unit, including 2,500 units sold to family members of Philip Thomas, CEO and a member of the Board of Directors and 2,500 to a relative of Thomas Panza, a greater than 10% owner of the Company (the March Sales). Each unit consists of one share of common stock and a warrant to purchase one share of common stock. Such subscriptions were closed and funded during April 2016. Each warrant issued in the March Sales entitles the holder to purchase one share of the Companys common stock at an exercise price of $6.00 per share, commencing immediately and expiring on March 29, 2019. The exercise price and number of shares of common stock issuable on exercise of the warrants are subject to standard anti-dilution provisions. The Company, at its option, may call the warrants for redemption, in whole and not in part, at a price of $0.01 per warrant, if (i) the closing price per share of the common stock is at least $10.00 for 30 consecutive trading days ending on the third business day prior to the notice of redemption or (ii) the common stock is listed for trading on a national securities exchange and the closing price per share of common stock on the first day of trading on such exchange is at least $7.50. The right to exercise will be forfeited unless the warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record holder of a warrant will have no further rights except to receive the redemption price for such holders warrant upon surrender of such warrant. During the year ended December 31, 2015, the Company entered into agreements with four members of its Advisory Board. Upon signing the agreement, each Advisory Board Member was entitled to receive 7,500 shares of common stock. These shares were issued on January 26, 2016. On January 26, 2016, 35,824 shares of common stock were issued to the non-employee members of the Board of Directors as compensation for their services during the year ended December 31, 2015. On March 31, 2016, the Company issued 3,400 shares of common stock to customers of the Company. As a result, for the three months ended March 31, 2016, the Company recorded $13,600 as a reduction to net sales in the accompanying condensed consolidated statements of operations. On March 31, 2016, the Company issued 1,200 shares of common stock to suppliers of the Company. As a result, for the three months ended March 31, 2016, the Company recorded $4,800 in cost of goods sold in the accompanying condensed consolidated statements of operations. On March 31, 2016, the Company issued 2,000 shares of common stock to brokers of the Company. As a result, for the three months ended March 31, 2016, the Company recorded $8,000 in selling and marketing expenses in the accompanying condensed consolidated statements of operations. On March 31, 2016, the Company issued 6,700 shares of common stock to consultants of the Company. As a result, for the three and nine months ended September 30, 2016, the Company recorded $0 and $26,800, respectively, in general and administrative expenses in the condensed consolidated statements of operations. On March 31, 2016, the Company issued 5,000 shares of common stock to a consultant pursuant to a consulting services agreement. The terms of the agreement require the consultant to perform services for the Company through February 23, 2017. For the three and nine months ended September 30, 2016, the Company recorded $5,455 and $10,909 of market research expense (reflected in selling and marketing expenses in the Condensed Consolidated Statement of Operations) and as a result, $9,091 was included in prepaid expenses in the accompanying balance sheet as of September 30, 2016. On March 31, 2016, the Company issued 15,833 shares of common stock to a consultant, who also became a member of the Companys Advisory Board on March 31, 2016. The shares were issued pursuant to a consulting agreement for future services. For the three and nine months ended September 30, 2016, the Company recorded $0 and $63,332 of market research expense and as a result, $0, was included in prepaid expenses in the accompanying balance sheet as of September 30, 2016. In addition, pursuant to the terms of the consulting agreement, the Company was required to make an advance payment of $20,000 which was made during April 2016. In addition the consultant will be paid an additional $30,000 in cash upon completion of the consultants services. On March 31, 2016, the Company issued 7,500 shares of common stock to an employee of the Company. During the three and nine months ended September 30, 2016, $0 and $30,000 was included in selling and marketing expenses in the accompanying condensed consolidated statements of operations related to this issuance. On April 6, 2016, $56,250 of proceeds was received from a shareholder who had purchased shares in September 2015 representing the disgorgement of a short swing profit on the shareholders September 2015 sale of the Companys stock. On July 29, 2016, the Company issued 10,000 shares of common stock to its Chief Financial Officer pursuant to his employment agreement. During the three and nine months ended September 30, 2016, $40,000 and $40,000 was included in general and administrative expenses in the accompanying condensed consolidated statements of operations related to this issuance. On July 29, 2016, the Company issued 5,000 shares of common stock to a consultant in exchange for services. During the three and nine months ended September 30, 2016, $20,000 and $20,000 was included in general and administrative expenses in the accompanying condensed consolidated statements of operations related to this issuance. On July 29, 2016, the Company issued 1,667 shares of common stock to a consultant pursuant to a consulting services agreement. During the three and nine months ended September 30, 2016, $9,169 and $9,169 was included in general and administrative expenses in the accompanying condensed consolidated statements of operations related to this issuance. |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Based Compensation | NOTE 6 – STOCK BASED COMPENSATION Stock Options On May 27, 2015, the Company’s board of directors adopted the 2015 Long-Term Incentive Equity Plan (“2015 Stock Option Plan”). The 2015 Stock Option Plan provides for the grant of stock options, stock appreciation rights, restricted stock and other stock-based awards to, among others, the officers, directors, employees and consultants of the Company. The total number of shares of common stock reserved under the Plan are 466,667. On May 27, 2015, as part of their employment agreements but not under the 2015 Stock Option Plan, the Company granted the officers of the Company and Mr. Panza, options to purchase 194,667 shares at an exercise price of $3.75 which are exercisable until May 26, 2020. These options vest on a quarterly basis over the two year period from the date of issuance. On August 18, 2016, as part of his consulting agreement but not under the 2015 Stock Option Plan, the Company’s board of directors granted to Julian Davidson, an option to purchase 286,744 shares of the Company’s common stock at an exercise price of $5.50 per share which expires on July 28, 2021. This option vested one third immediately, and then will vest one third on July 28, 2017 and the remainder on July 28, 2018. The following table summarizes the stock option activity of the Company: Shares Weighted Average Exercise Price Weighted Average Grant Date Fair Value Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at January 1, 2016 194,667 $ 3.75 $ 6.22 Granted 286,744 $ 5.50 $ 2.71 Exercised - $ - $ - Expired, forfeited or cancelled (16,000 ) $ 3.75 $ 6.22 Outstanding at September 30, 2016 465,411 $ 4.83 $ 4.06 4.4 $ 123,280 Exercisable at September 30, 2016 207,248 $ 4.56 $ 4.60 4.4 $ 77,050 The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s common stock on September 30, 2016. As of September 30, 2016, there was a total of $867,517 of unrecognized compensation expense related to stock options. The cost is expected to be recognized through 2018 over a weighted average period of 1.37 years. Stock Warrants From January 1, 2016 through March 14, 2016, in connection with the Second Offering, the Company issued warrants to purchase 171,725 shares of the Company’s common stock to investors at an exercise price of $6.00 per share. These warrants were fully vested upon issuance and expire on November 30, 2018. From January 1, 2016 through March 14, 2016, in connection with the Second Offering, the Company issued warrants to purchase 34,573 shares of the Company’s common stock to the placement agent at an exercise price of $4.50 per share. These warrants were fully vested upon issuance and expire on October 30, 2020. On March 29, 2016 and March 31, 2016 in connection with the March Sales, the Company issued warrants to purchase 58,750 shares of the Company’s common stock at an exercise price of $6.00 per share. These warrants were fully vested upon issuance and expire on March 29, 2019. On July 29, 2016, in connection with the consummation of the Offering, the Company issued warrants to purchase 31,522 shares of the Company’s common stock. These warrants will be exercisable for cash or on a cashless basis at an exercise price of $6.875 per share, commencing on January 14, 2017 and expiring on July 14, 2021. Stock Warrants The following table summarizes the stock warrant activity of the Company: Number of shares Weighted average exercise price Weighted average contractual life (years) Outstanding - January 1, 2016 1,285,111 $ 4.70 - Issued 296,570 $ 5.92 Expired - $ - Exchanged (See Note 4) (1,111,111 ) $ 4.50 Outstanding September 30, 2016 470,570 $ 5.95 2.46 Exercisable at September 30, 2016 470,570 $ 5.95 2.46 Stock-Based Compensation Expense The following tables summarize total stock-based compensation costs recognized for the three and nine months ended September 30, 2016 and 2015: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Stock options $ 438,113 $ 151,354 $ 740,820 $ 207,949 Warrants - - 30,000 - Common Stock - - 240,000 - Total $ 438,113 $ 151,354 $ 1,010,820 $ 207,949 The total amount of stock-based compensation was reflected within the statements of operations as: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 General and administrative $ 412,439 105,740 $ 853,859 $ 145,279 Sales and marketing 25,674 45,614 156,961 62,670 Total $ 438,113 $ 151,354 $ 1,010,820 $ 207,949 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 7 COMMITMENTS AND CONTINGENCIES Legal Proceedings The Company is involved in various claims and legal actions arising from time to time in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters in the ordinary course of business will not have a material adverse effect on the Companys financial position, results of operations or cash flows. Legal costs related to these matters are expensed as they are incurred. On August 1, 2014, an action was filed by LIBB in the Supreme Court in the State of New York entitled Long Island Brand Beverages LLC v. Revolution Marketing, LLC (Revolution) and Ascent Talent, Model Promotion Ltd. LIBB is seeking damages of $10,000,000 for several claims including breach of contract and fraud occurring during 2014. Revolution has filed a counterclaim for breach of contract and related causes of action, claiming damages in the sum of $310,880, and seeking punitive damages of $5,000,000. Ascent has filed a pre-answer motion to dismiss LIBBs complaint. LIBB filed papers in opposition to the motion to dismiss. In addition, Revolution has filed a motion to amend its answer to include cross-claims against Ascent which were not asserted in its original answer of record. On February 5, 2016, the Court rendered a decision, denying the motion to dismiss with the exception of two claims which the Court dismissed. In the same decision, the Court granted a separate motion filed by Revolution seeking to amend its answer to include cross claims against Ascent. The Companys management and legal counsel believe it is too early to determine the probable outcome of this matter. Brokerage Arrangements The Company maintains arrangements with sales brokers who help with bringing new distributors and retail outlets to the Company. These sales brokers receive a commission for these services. Commissions to these brokers currently range from 2-5% of sales. In addition, the Company sells its products through alternative vending channels. Commissions resulting from sales through these channels are currently 42%. Employment Agreements On February 1, 2016, the Company entered into an agreement with an employee. The employee is to be paid a base salary of $120,000 per annum through December 31, 2018. In addition, the employee was awarded 7,500 shares of common stock at the inception of the agreement (See Note 5). In addition, at December 31, 2016, the employee will be paid a bonus between 20% and 40% of the employees base salary, with the amount above 20% to be determined at the discretion of the Board of Directors. On June 6, 2016, the Company entered into an employment agreement with Richard Allen to serve as the Companys Chief Financial Officer. The agreement has a term of three years, and automatically renews for one year periods thereafter unless either party provides notice of its decision not to renew. Mr. Allen will receive a base salary of $170,000 and an incentive bonus of up to 50% of his base salary at the discretion of the Board of Directors. The Company granted Mr. Allen 8,333 shares of its common stock on May 31, 2017. The Company will grant to Mr. Allen that additional number of shares of the Companys common stock which shall have fair market values equal to $50,000 on each of May 31, 2018 and 2019. Consulting Agreements On June 6, 2016, the Company entered into an amendment to the consulting agreement with Julian Davidson which provides for him to serve as the Companys Executive Chairman. Either Mr. Davidson or the Company may terminate the consulting agreement with 30 days prior written notice. Pursuant to the consulting agreement, as in effect prior to its amendment and restatement as described below, the Company (a) paid to Mr. Davidson $10,000 per month, and (b) granted to Mr. Davidson 1,667 shares of common stock per month (an aggregate of 4,302 shares). The consulting agreement, as amended, contains provisions for protection of the Companys intellectual property and confidentiality and non-competition restrictions for Mr. Davidson (generally imposing restrictions during the term of the consulting agreement, on (i) ownership or management of, or employment or consultation with, competing companies, (ii) soliciting employees to terminate their employment (iii) soliciting business from the Companys customers, and (iv) soliciting prospective acquisition and investment candidates for purposes of acquiring or investing in such entity). On August 18, 2016, the Company entered into a second amendment to the consulting agreement with Julian Davidson. The amendment modified the condition that was required to be satisfied for certain changes in the compensation payable to Mr. Davidson under the consulting agreement to take effect. After the amendment, upon the Company completing an equity raise with gross proceeds of at least $6,900,000, the monthly cash fee to Mr. Davidson increases to $20,000 per month, the monthly stock grant to Mr. Davidson is eliminated and Mr. Davidson receives a one-time cash bonus of $95,000 and a one-time grant of 50,000 shares of the Companys common stock. The amendment also modified the compensation that will be payable to Mr. Davidson under his agreement. Mr. Davidson is entitled to receive an option to purchase 4% of the fully diluted common stock outstanding immediately after the Offering, or 286,744 shares of the Companys common stock. On August 18, 2016, the Company granted to Mr. Davidson and option to purchase 286,744 shares of common stock. (See Note 6 Stock Based Compensation) On October 5, 2016, the Company entered into an amended and restated consulting agreement with Julian Davidson (Davidson Amendment), effective as of September 29, 2016, which provides for him to continue to serve as the Companys Executive Chairman. Mr. Davidson was entitled to enter into the Davidson Amendment pursuant to the terms of his previously existing consulting agreement, as described above. Under the Davidson Amendment, (a) starting on September 29, 2016, the Company will pay to Mr. Davidson an annual fee of $250,000, payable $20,833 per month, (b) the Company will pay Mr. Davidson an incentive of $75,000 on the date of the agreement and will pay to him $165,000 on the first anniversary of such date, (c) on September 29, 2016, the Company granted Mr. Davidson 15,000 shares of the Companys common stock, (d) Mr. Davidson will be eligible to receive annually an additional fee of up to 50% of his annual fee based on Consultants performance over each calendar year, and (e) upon the Company completing an offering or offerings that raises gross proceeds of at least $3,000,000 from the sale of its equity securities, then the Company will issue to Mr. Davidson 20,000 shares of the Companys common stock and an option to purchase a 71,686 shares of the Companys common stock with an exercise price equal to the fair market value of the common stock as of such date. Unless such option is granted under a existing long-term incentive equity plan of the Company, the option will not be exercisable with respect to any of the underlying shares prior to obtaining shareholder approval for it. Either Mr. Davidson or the Company may terminate the consulting agreement with 30 days prior written notice. The consulting agreement contains provisions for protection of the Companys intellectual property and confidentiality and non-competition restrictions for Mr. Davidson (generally imposing restrictions during the term of the consulting agreement, on (i) ownership or management of, or employment or consultation with, competing companies, (ii) soliciting employees to terminate their employment (iii) soliciting business from the Companys customers, and (iv) soliciting prospective acquisition and investment candidates for purposes of acquiring or investing in such entity). |
Major Customers and Vendors
Major Customers and Vendors | 9 Months Ended |
Sep. 30, 2016 | |
Risks and Uncertainties [Abstract] | |
Major Customers and Vendors | NOTE 8 MAJOR CUSTOMERS AND VENDORS For the three months ended September 30, 2016, three customers accounted for 22%, 11% and 11% of net sales. For the three months ended September 30, 2015, one customer accounted for 10% of net sales. For the nine months ended September 30, 2016, three customers accounted for 13%, 12%, and 10% of net sales. For the nine months ended September 30, 2015, no customers accounted for more than 10% of net sales. For the three months ended September 30, 2016 and September 30, 2015, the largest vendors represented approximately 78% (five vendors) and 80% (three vendors) of purchases, respectively. For the nine months ended September 30, 2016 and 2015, the largest vendors represented approximately 69% (four vendors) and 82% (four vendors) of purchases, respectively. As of September 30, 2016 two suppliers accounted for 18% and 13% of accounts payable, respectively. As of September 30, 2015 15% of accounts payable was with one vendor. |
Related Parties
Related Parties | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Parties | NOTE 9 - RELATED PARTIES During the year ended December 31, 2015, the Company entered into the Credit Agreement with the Lender, a related party (see Note 4). The Company recorded revenue related to sales to two entities, whose owners became employees of the Company during 2014. For the three months ended September 30, 2016 and 2015, sales to these related parties were $7,628 and $3,945, respectively and $7,936 and $35,140, respectively for the nine months ended September 30, 2016 and 2015. As of September 30, 2016, accounts receivable from these customers were $11,554. As of December 31, 2015, accounts receivable from these customers were $15,513. The Company recorded revenue related to sales to an entity, CFG Distributors LLC, whose owner became an employee of the Company during 2015. For the three months ended September 30, 2016 and 2015, sales to this related party were $25 and $742, respectively. For the nine months ended September 30, 2016 and 2015, sales to this related party were $463 and $11,716, respectively. As of September 30, 2016, the amount due from this customer was $44,939. As of December 31, 2015, accounts receivable from this customer were $51,961, which was included in accounts receivable. In addition, the Company recorded revenue related to sales to an entity owned by an immediate family member of Philip Thomas, CEO, stockholder, and member of the Board of Directors. Mr. Thomas is also an employee of this entity. For the three months ended September 30, 2016 and 2015, sales to this related party were $426 and $1,512, respectively. For the nine months ended September 30, 2016 and 2015, sales to this related party were $3,063 and $1,653, respectively. As of September 30, 2016 and December 31, 2015, there was $0 and $518, respectively, due from this related party which was included in accounts receivable in the condensed consolidated balance sheets. The Company also purchases product to supplement certain vending sales from this entity. For the three and nine months ended September 30, 2016, the Company purchased $0 and $17,514, respectively, of product from this vendor. As of September 30, 2016, the outstanding balance due to this entity included in accounts payable was $0. As of December 31, 2015, the outstanding balance due to this entity included in accounts payable was $3,242. During the three and nine months ended September 30, 2016, the Company accrued $77,250 and $232,250, respectively, in expenses related to fees payable to the Companys Board of Directors which were included in general and administrative expenses in the condensed consolidated statements of operations. The non-employee members of the Board of Directors will each receive common stock with a fair value of $35,000 and $30,000 in cash, for their services through 2016. A stockholder and a company owned by member of the Board of Directors of the Company has paid certain expenses on behalf of the Company. As of September 30, 2016, the accounts payable and accrued expenses due to these parties were $0. As of December 31, 2015 accounts payable and accrued expenses to these parties were $87,258. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 10 SUBSEQUENT EVENTS Filing of registration statement On October 12, 2016, the Company filed a shelf registration statement on Form S-3/A amendment No. 1, which became effective on October 14, 2016. The shelf registration statement allows the Company from time to time to sell any combination of debt or equity securities described in the registration statement up to aggregate initial offering price not to exceed $50,000,000. Financing Arrangement On October 27, 2016, the Company entered into a credit line (the UBS Credit Line) with UBS Bank USA (UBS). The UBS Credit Line has a borrowing capacity of $1,300,000 and bears interest at a floating rate, depending on the time requested for the borrowing. The interest is based on the ICE Swap Rate plus a margin of between 0.40% and 0.70%. As of November 11, 2016, the interest rate on the UBS Credit Line was 3.089%. The UBS Credit Line is collateralized by certain of the Companys short-term investments. As of November 11, 2016, $400,000 was outstanding on the UBS Credit Line. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the result that may be expected for the year ending December 31, 2016. These condensed consolidated financial statements should be read in conjunction with the financial statements for the year ended December 31, 2015 and related notes thereto included in the Companys Form 10-K filed with the United States Securities and Exchange Commission (SEC) on March 22, 2016. |
Principles of Consolidation | Principles of Consolidation The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, and also affect the amounts of revenues and expenses reported for each period. Actual results could differ from those which result from using such estimates. Management utilizes various other estimates, including but not limited to, assessing the collectability of accounts receivable, accrual of rebates to customers, the valuation of inventory, determining the estimated lives of long-lived assets, determining the potential impairment of intangibles, the fair value of warrants issued, the fair value of stock options, the fair value of a beneficial conversion feature and other legal claims and contingencies. The results of any changes in accounting estimates are reflected in the financial statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period that they are determined to be necessary. |
Revenue Recognition | Revenue Recognition Revenue is stated net of sales discounts and rebates paid to customers (see Customer Marketing Programs and Sales Incentives, below). Net sales are recognized when all of the following conditions are met: (1) the price is fixed and determinable; (2) evidence of a binding arrangement exists (generally, purchase orders); (3) products have been delivered and there is no future performance required; and (4) amounts are collectible under normal payment terms. These conditions typically occur when the products are delivered to or picked up by the Companys customers. |
Customer Marketing Programs and Sales Incentives | Customer Marketing Programs and Sales Incentives, continued The Company participates in various programs and arrangements with customers designed to increase the sale of its products. Among these programs are arrangements under which allowances can be earned by customers for various discounts to the end retailers or for participating in specific marketing programs. The Company believes that its participation in these programs is essential to ensuring volume and revenue growth in a competitive marketplace. In addition, during the three and nine months ended September 30, 2016, the Company issued shares of common stock in the amounts of 0 and 3,400, respectively, at a fair value of $4.00 per share, to customers and the owners of customers. Included in the costs of these programs were costs associated with the fair value of shares issued, which totaled $0 and $26,221 for the three months September 30, 2016 and 2015, respectively and $45,165 and $54,919 for the nine months ended September 30, 2016 and 2015, respectively. Additionally, the Company may be required to occasionally pay fees to its customers (Placement Fees) in order to place its products in the customers stores. In some cases, the Placement Fees carry no further benefit or minimum revenue guarantee other than the right to place the Companys product in the store of the customer. The Placement Fees are recorded as a reduction of revenue. If, at the time the Placement Fees are recognized in the statement of operations, the Company has cumulative negative revenue with that particular customer, such negative revenue is reclassified and recorded as a part of selling and marketing expense. For the three and nine months ended September 30, 2016, the Company recorded $0 and $11,087, respectively, of Placement Fees to selling and marketing expense. No such Placement Fees were recorded in selling and marketing expense for the three and nine months ended September 30, 2015. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs incurred to move finished goods from the Companys sales distribution centers to customer locations are included in selling and marketing expenses on the condensed consolidated statements of operations and totaled $117,998 and $27,563 for the three months ended September 30, 2016 and 2015, respectively and $319,668 and $71,813 for the nine months ended September 30, 2016 and 2015, respectively. |
Advertising | Advertising The Company expenses advertising costs as incurred. Advertising expense totaled $84,433 and $29,130, respectively, for the three months ended September 30, 2016 and 2015 and $114,980 and $155,623, respectively, for the nine months ended September 30, 2016 and 2015. |
Research and Development | Research and Development The Company expenses the costs of research and development as incurred. For the three and nine months ended September 30, 2016, research and development expense related to new product initiatives were $0 and $46,667, respectively. These expenses were incurred pursuant to a product development agreement, which will require the Company to pay $40,000 in cash and $40,000 in common stock upon the completion of the arrangement. There were no research and development expenses incurred during the three and nine months ended September 30, 2015. Research and development expenses are included within general and administrative expenses within the condensed consolidated statement of operations. As of September 30, 2016, $50,000 was included in accrued expenses in the condensed consolidated balance sheet related to this arrangement. |
Operating Leases | Operating Leases The Company records rent related to its operating leases on a straight line basis over the lease term. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid instruments with an original maturity of three months or less when acquired to be cash equivalents. |
Restricted Cash | Restricted Cash Pursuant to the terms of the Credit Agreement with Lender, the Company was required to utilize $150,000 of certain $1,000,000 in proceeds from the Credit Agreement for initiatives related to the development of an alcohol business. As of December 31, 2015, $127,580 of the Companys cash on hand was restricted for use in the development of an alcohol business. On March 17, 2016, LIBB entered into an agreement with Lender whereby such restriction was lifted. |
Accounts Receivable | Accounts Receivable The Company sells products to distributors and in certain cases directly to retailers, and extends credit, generally without requiring collateral, based on its evaluation of the customers financial condition. While the Company has a concentration of credit risk in the retail sector, it believes this risk is mitigated due to the diverse nature of the customers it serves, including, but not limited to, its type, geographic location, size, and beverage channel. Potential losses on the Companys receivables are dependent on each individual customers financial condition and sales adjustments granted after the balance sheet date. The Company carries its trade accounts receivable at net realizable value. Typically, accounts receivable have terms of net 30 days and do not bear interest. The Company monitors its exposure to losses on receivables and maintains allowances for potential losses or adjustments. The Company determines these allowances by (1) evaluating the aging of its receivables; (2) analyzing its history of sales adjustments; and (3) reviewing its high-risk customers. Past due receivable balances are written off when the Companys efforts have been unsuccessful in collecting the amount due. Accounts receivable, net, is as follows: As of September 30, 2016 December 31, 2015 Accounts receivable, gross $ 1,545,061 $ 405,096 Allowance for doubtful accounts (75,395 ) (42,000 ) Accounts receivable, net $ 1,469,666 $ 363,096 |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash on deposit with financial institutions, short-term investments and accounts receivable. At times, the Companys cash in banks is in excess of the Federal Deposit Insurance Corporation (FDIC) insurance limit. The Company has not experienced any loss as a result of these deposits. These cash balances are maintained with one bank. As of September 30, 2016, the Company was exposed to concentrations of credit risk through short-term investments. As of September 30, 2016, three customers accounted for 25%, 11% and 11% of the Companys trade receivables, respectively. As of December 31, 2015, two customers accounted for 14% and 30% of the Companys trade receivables. The Company does not generally require collateral or other security to support customer receivables. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses, as required. |
Inventories | Inventories The Companys inventory includes raw materials such as bottles, sweeteners, labels, flavors and packaging. Finished goods inventory consists primarily of bottled iced tea. The Company values its inventories at the lower of cost or net realizable value, net of reserves. Cost is determined using the first-in, first-out (FIFO) method. As of September 30, 2016 and December 31, 2015, the Company recorded a reserve of $28,615 and $41,790, respectively, to reduce the cost of certain products to estimated net realizable value. The following table summarizes inventories as of the dates presented: As of September 30, 2016 December 31, 2015 Finished goods, net $ 543,755 $ 565,624 Raw materials and supplies, net 434,404 146,934 Total inventories $ 978,159 $ 712,558 |
Property and Equipment | Property and Equipment Property and equipment is recorded at cost. Major property additions, replacements, and betterments are capitalized, while maintenance and repairs that do not extend the useful lives of an asset or add new functionality are expensed as incurred. Depreciation is recorded using the straight-line method over the respective estimated useful lives of the Companys assets. The estimated useful lives typically are 3 years for cold-drink containers, such as reusable fridges, wood racks, vending machines, barrels, and coolers, and are depreciated using the straight-line method over the estimated useful life of each group of equipment, as determined using the group-life method. Under this method, the Company does not recognize gains or losses on the disposal of individual units of equipment when the disposal occurs in the normal course of business. The Company capitalizes the costs of refurbishing its cold-drink containers and depreciates those costs over the estimated period until the next scheduled refurbishment or until the equipment is retired. The estimated useful lives are typically 3 to 5 years for office furniture and equipment and are depreciated on a straight-line basis. The estimated useful lives for trucks and automobiles are typically 3 to 5 years and are depreciated on a straight line basis. For the three months ended September 30, 2016 and 2015, depreciation expense was $39,420 and $27,043, respectively. For the nine months ended September 30, 2016 and 2015, depreciation expense was $117,118 and $76,578, respectively. The Company disposed of one of its vehicles on July 18, 2016. In connection with the disposal, the Company recognized a loss of $515. |
Intangible Assets | Intangible Assets Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually or when circumstances indicate that there could be an impairment. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. Intangibles assets with indefinite useful lives consist of the cost to purchase an internet domain name for $20,000. The domain name is considered to have a perpetual life and as such, is not amortized. Insignificant costs incurred associated with renewing this asset are expensed as incurred. Intangible assets with finite useful lives are amortized over their expected useful life. Intangible assets with useful lives are tested for impairment when circumstances indicate that there could be an impairment. Intangible assets with finite useful lives include website development costs of $3,741 and $7,494 as of September 30, 2016 and December 31, 2015, respectively. The estimated useful life of the capitalized costs of the Companys website is 3 years and is depreciated on a straight line basis. As of September 30, 2016, the cost of the website development was $15,000 and the accumulated amortization was $11,259. As of December 31, 2015, the cost of the website development was $15,000 and the accumulated amortization was $7,506. Amortization expense was $1,251 and $1,251 for the three months ended 2016 and 2015, respectively and $3,753 and $3,753 for the nine months ended September 30, 2016 and 2015, respectively. |
Deferred Offering Costs | Deferred Offering Costs The Company capitalizes the costs related to proposed offerings of its equity instruments as deferred offering costs and records the deferred offering costs as an offset to additional paid in capital upon the completion of the associated capital raising activity. |
Income Taxes | Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement, and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carry forwards will result in a benefit based on expected profitability by tax jurisdiction. In its interim financial statements, the Company follows the guidance in ASC 270, Interim Reporting and ASC 740 Income Taxes, whereby the Company utilizes the expected annual effective tax rate in determining its income tax provisions for the interim periods. That rate differs from U.S. statutory rates primarily as a result of valuation allowance related to the Companys net operating loss carryforward as a result of the historical losses of the Company. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liabilities. In managements opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. The Company accounts for uncertain tax positions in accordance with ASC 740 - Income Taxes. No uncertain tax provisions have been identified. The Company accrues interest and penalties, if incurred, on unrecognized tax benefits as components of the income tax provision in the accompanying condensed consolidated statements of operations. Our primary tax jurisdictions are our federal, various state, and local taxes. Generally, Federal, State and Local authorities may examine the Company's tax returns for three years from the date of filing. In accordance with ASC 740, the Company evaluates whether a valuation allowance should be established against the net deferred tax assets based upon the consideration of all available evidence and using a more likely than not standard. Significant weight is given to evidence that can be objectively verified. The determination to record a valuation allowance is based on the recent history of cumulative losses and current operating performance. In conducting the analysis, the Company utilizes an approach, which considers the current year loss, including an assessment of the degree to which any losses are driven by items that are unusual in nature and incurred to improve future profitability. In addition, the Company reviews changes in near-term market conditions and any other factors arising during the period, which may impact its future operating results. |
Earnings Per Share | Earnings per share Basic net earnings per common share is computed by dividing net loss by the weighted-average number of common shares outstanding. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the impact of common shares issuable upon exercise of stock options and warrants. The computation of diluted earnings per share excludes those dilutive securities with an exercise price in excess of the average market price of the Companys common shares during the periods presented. The computation of diluted earnings per share excludes outstanding options in periods where the exercise of such options would be antidilutive. Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive. For the Three and Nine Months Ended September 30, 2016 2015 Options to purchase common stock 465,411 194,667 Warrants to purchase common stock 470,570 - Total potentially dilutive securities 935,981 194,667 |
Fair Value of Financial Instruments | Fair Values of Financial Instruments The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses, notes payable and other current liabilities, approximate fair value due to the short-term nature of these instruments. ASC 820 Fair Value Measurements and Disclosures provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly. Level 3 Significant unobservable inputs that cannot be corroborated by market data. Fair values for short-term money market investments are determined from quote prices in active markets for these money market funds, and are considered to be Level 1. The carrying value of financial instruments in the Companys consolidated financial statements at September 30, 2016 and December 31, 2015 are as follows: Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2) Significant Unobservable Inputs (Level 3) Short-term investments at September 30, 2016 $ 2,507,302 $ - $ - Short-term investments at December 31, 2015 $ - $ - $ - |
Seasonality | Seasonality The Companys business is seasonal with the summer months in the second and third quarter of the fiscal year typically generating the largest net sales. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2016, the Financial Accounting Standards Board (FASB), issued Accounting Standards Update (ASU) 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which amends the guidance in U.S. generally accepted accounting principles on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and are to be adopted by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated financial statements. In February 2016, the FASB issued new lease accounting guidance (ASU No. 2016-02, Leases). The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated financial statements. On March 30, 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-09, Compensation Stock Compensation (Topic 718). This update requires that all excess tax benefits and tax deficiencies arising from share-based payment awards should be recognized as income tax expense or benefit on the income statement. The amendment also states that excess tax benefits should be classified along with other income tax cash flows as an operating activity. In addition, an entity can make an entity-wide accounting policy election to either estimate the number of awards expected to vest or account for forfeitures as they occur. The provisions of this update are effective for annual and interim periods beginning after December 15, 2016. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated financial statements. In April 2016, the FASB issued Accounting Standards Update ASU No. 2016-10 Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing (ASU 2016-10). ASU 2016-10 clarifies the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. The provisions of this update are effective for annual and interim periods beginning after December 15, 2017, with early application permitted. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated financial statements. In May 2016, the FASB issued Accounting Standards Update ASU No. 2016-12 Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients (ASU 2016-12). The core principal of ASU 2016-12 is the recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The provisions of this update are effective for annual and interim periods beginning after December 15, 2017, with early application permitted. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated financial statements. In August 2016, the FASB issued Accounting Standards Update ASU No. 2016-15 Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15). The amendments for this update provide guidance on the eight specific cash flows: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. The provisions of this update are effective for annual and interim periods beginning after December 15, 2016, with early application permitted. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated financial statements . |
Management's Evaluation of Subsequent Events | Managements Evaluation of Subsequent Events The Company evaluates events that have occurred after the balance sheet date but before the condensed consolidated financial statements are issued. Based upon the review, other than as presented within Note 10, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable, net, is as follows: As of September 30, 2016 December 31, 2015 Accounts receivable, gross $ 1,545,061 $ 405,096 Allowance for doubtful accounts (75,395 ) (42,000 ) Accounts receivable, net $ 1,469,666 $ 363,096 |
Schedule of Inventory | The following table summarizes inventories as of the dates presented: As of September 30, 2016 December 31, 2015 Finished goods, net $ 543,755 $ 565,624 Raw materials and supplies, net 434,404 146,934 Total inventories $ 978,159 $ 712,558 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive. For the Three and Nine Months Ended September 30, 2016 2015 Options to purchase common stock 465,411 194,667 Warrants to purchase common stock 470,570 - Total potentially dilutive securities 935,981 194,667 |
Schedule of Fair Value of Financial Assets and Liabilities | The carrying value of financial instruments in the Companys consolidated financial statements at September 30, 2016 and December 31, 2015 are as follows: Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2) Significant Unobservable Inputs (Level 3) Short-term investments at September 30, 2016 $ 2,507,302 $ - $ - Short-term investments at December 31, 2015 $ - $ - $ - |
Line of Credit (Tables)
Line of Credit (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Line of Credit Facility [Abstract] | |
Schedule of Induced Conversion of Credit Facility and Related Warrants | The charge was calculated as follows: For the three and nine months ended September 30, 2016 Fair value of securities to be issued upon original conversion terms: Line of credit ($1,669,372 converted at $4.00 per share into 417,344 shares of common stock, which had a fair value of $5.50 per share) $ 2,295,392 Warrants (1,111,111 shares of common stock at a fair value of $5.50 per share, less $5,000,000 in exercise proceeds) 1,111,111 Total fair value of securities issued upon conversion $ 3,406,503 Fair value of securities issued upon conversion: Shares of common stock 908,083 Fair value per share $ 5.50 Aggregate fair value of common stock to be issued upon original conversion terms $ 4,994,457 Loss on induced conversion of line of credit and warrants $ (1,587,954 ) |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Options, Activity | The following table summarizes the stock option activity of the Company: Shares Weighted Average Exercise Price Weighted Average Grant Date Fair Value Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at January 1, 2016 194,667 $ 3.75 $ 6.22 Granted 286,744 $ 5.50 $ 2.71 Exercised - $ - $ - Expired, forfeited or cancelled (16,000 ) $ 3.75 $ 6.22 Outstanding at September 30, 2016 465,411 $ 4.83 $ 4.06 4.4 $ 123,280 Exercisable at September 30, 2016 207,248 $ 4.56 $ 4.60 4.4 $ 77,050 |
Schedule of Warrant Activity | The following table summarizes the stock warrant activity of the Company: Number of shares Weighted average exercise price Weighted average contractual life (years) Outstanding - January 1, 2016 1,285,111 $ 4.70 - Issued 296,570 $ 5.92 Expired - $ - Exchanged (See Note 4) (1,111,111 ) $ 4.50 Outstanding September 30, 2016 470,570 $ 5.95 2.46 Exercisable at September 30, 2016 470,570 $ 5.95 2.46 |
Schedule of Stock Based Compensation Expense | The following tables summarize total stock-based compensation costs recognized for the three and nine months ended September 30, 2016 and 2015: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Stock options $ 438,113 $ 151,354 $ 740,820 $ 207,949 Warrants - - 30,000 - Common Stock - - 240,000 - Total $ 438,113 $ 151,354 $ 1,010,820 $ 207,949 The total amount of stock-based compensation was reflected within the statements of operations as: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 General and administrative $ 412,439 105,740 $ 853,859 $ 145,279 Sales and marketing 25,674 45,614 156,961 62,670 Total $ 438,113 $ 151,354 $ 1,010,820 $ 207,949 |
Business Organization, Liquid21
Business Organization, Liquidity and Management's Plans (Details Narrative) - USD ($) | Oct. 12, 2016 | Jul. 29, 2016 | Jul. 29, 2016 | Mar. 31, 2016 | Mar. 29, 2016 | Mar. 17, 2016 | Nov. 23, 2015 | May 31, 2016 | Apr. 30, 2016 | Mar. 24, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Jul. 31, 2016 |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||||||||||
Cash | $ 359,613 | $ 359,613 | ||||||||||||||
Short-term investments | 2,507,302 | 2,507,302 | ||||||||||||||
Net loss | 4,891,028 | $ 954,690 | 8,390,264 | $ 2,016,842 | ||||||||||||
Stockholders' equity | 4,303,459 | 1,396,560 | 4,303,459 | |||||||||||||
Working capital deficit | $ 3,116,734 | 3,116,734 | ||||||||||||||
Proceeds from issuance or sale of equity, total | $ 6,729,007 | |||||||||||||||
Related party transaction, beneficial ownership percentage | 16.00% | 18.20% | 18.20% | |||||||||||||
Line of credit facility, current borrowing capacity | $ 1,000,000 | $ 1,500,000 | $ 1,500,000 | |||||||||||||
Line of credit facility, maximum borrowing capacity | 5,000,000 | $ 5,000,000 | 5,000,000 | |||||||||||||
Line of credit facility, increase decrease | $ 500,000 | 3,500,000 | ||||||||||||||
Increments line of credit | 500,000 | |||||||||||||||
Proceeds from lines of credit | $ 1,000,000 | 1,000,000 | 500,000 | |||||||||||||
Common stock shares sold | 1,270,156 | |||||||||||||||
Proceeds from the public offering, net of costs | $ 5,867,217 | |||||||||||||||
Common stock shares sold par value | $ 5.50 | $ 5.50 | ||||||||||||||
Common stock shares offering price per share | $ 5.50 | $ 5.50 | $ 4 | $ 4 | $ 5.50 | |||||||||||
Gross proceeds from sale of common stock | $ 6,985,858 | |||||||||||||||
Net proceeds from sale of common stock | $ 5,867,217 | |||||||||||||||
Issuance of common stock in exchange for principal and warrants on brentwood line of credit | $ 1,669,376 | |||||||||||||||
Line of credit | $ 0 | 0 | ||||||||||||||
Debt instruments converted shares of common stock | 421,972 | 908,083 | 4,994,457 | |||||||||||||
Warrants expiration date | Jul. 14, 2021 | Mar. 29, 2019 | Mar. 29, 2019 | |||||||||||||
Selling Agents [Member] | ||||||||||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||||||||||
Common stock shares offering price per share | $ 6.875 | $ 6.875 | ||||||||||||||
Minimum [Member] | ||||||||||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||||||||||
Line of credit facility, increase decrease | 500,000 | |||||||||||||||
Proceeds from the public offering, net of costs | $ 5,000,000 | |||||||||||||||
Maximum [Member] | ||||||||||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||||||||||
Line of credit facility, increase decrease | 1,500,000 | |||||||||||||||
Proceeds from the public offering, net of costs | $ 50,000,000 | |||||||||||||||
Previously Credit Agreement [Member] | ||||||||||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||||||||||
Line of credit facility, current borrowing capacity | 500,000 | |||||||||||||||
Proceeds from lines of credit | $ 250,000 | $ 250,000 | ||||||||||||||
Previously Credit Agreement [Member] | Minimum [Member] | ||||||||||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||||||||||
Line of credit facility, current borrowing capacity | 500,000 | |||||||||||||||
Previously Credit Agreement [Member] | Maximum [Member] | ||||||||||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||||||||||
Line of credit facility, current borrowing capacity | $ 1,500,000 | |||||||||||||||
Common Stock [Member] | ||||||||||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||||||||||
Net loss | ||||||||||||||||
Stockholders' equity | $ 717 | $ 463 | $ 717 | |||||||||||||
Stock issued during period, shares, new issues | 1,270,156 | |||||||||||||||
Issuance of common stock in exchange for principal and warrants on brentwood line of credit | $ 91 | |||||||||||||||
Common Stock [Member] | Liquidity and Managements Plan [Member] | ||||||||||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||||||||||
Stock issued during period, shares, new issues | 1,500,631 | |||||||||||||||
Warrant [Member] | ||||||||||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||||||||||
Stock issued during period, shares, new issues | 230,475 | |||||||||||||||
Debt instruments converted shares of common stock | 486,111 | |||||||||||||||
Warrant [Member] | Selling Agents [Member] | ||||||||||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||||||||||
Common stock shares sold | 31,522 | |||||||||||||||
Warrants expiration date | Jul. 14, 2021 | |||||||||||||||
Aloe Juice Product [Member] | ||||||||||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||||||||||
Percentage of net sales | 35.00% | 23.00% |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Jul. 31, 2016 | Jul. 29, 2016 | |
Number of shares of common stock issued | $ 0 | $ 3,400 | |||||
Shares issued, price per share | $ 4 | $ 4 | $ 5.50 | $ 5.50 | |||
Sales discounts, returns and allowances, goods, total | $ 0 | $ 26,221 | $ 45,165 | $ 54,919 | |||
Advertising costs | 84,433 | 29,130 | 114,980 | 155,623 | |||
Placement fee to selling and marketing expense | 0 | 0 | 11,087 | 0 | |||
Shipping, handling and transportation costs | 117,998 | 27,563 | 319,668 | 71,813 | |||
Research and development expense | 0 | 46,667 | |||||
Research and development arrangement, contract to perform for others, costs incurred, gross | 40,000 | ||||||
Common stock issued upon completion | 40,000 | ||||||
Accrued liabilities | 50,000 | 50,000 | |||||
Amount restricted line of credit agreement | 150,000 | ||||||
Proceeds from line of credit | 1,000,000 | ||||||
Restricted cash and cash equivalents, current | $ 127,580 | ||||||
Inventory valuation reserves | 28,615 | 28,615 | 41,790 | ||||
Depreciation expense | 39,420 | 27,043 | 117,118 | 76,578 | |||
Recognized a loss | (515) | (3,327) | |||||
Indefinite-lived intangible assets (excluding goodwill) | 20,000 | $ 20,000 | |||||
Cold-Drink Containers [Member] | |||||||
Property, plant and equipment, estimated useful lives | P3Y | ||||||
Furniture And Equipment [Member] | Minimum [Member] | |||||||
Property, plant and equipment, estimated useful lives | P3Y | ||||||
Furniture And Equipment [Member] | Maximum [Member] | |||||||
Property, plant and equipment, estimated useful lives | P5Y | ||||||
Trucks And Automobiles [Member] | Minimum [Member] | |||||||
Property, plant and equipment, estimated useful lives | P3Y | ||||||
Trucks And Automobiles [Member] | Maximum [Member] | |||||||
Property, plant and equipment, estimated useful lives | P5Y | ||||||
Website [Member] | |||||||
Finite-lived intangible assets, net | 3,741 | $ 3,741 | 7,494 | ||||
Property, plant and equipment, estimated useful lives | P3Y | ||||||
Finite-lived intangible assets, gross | 15,000 | $ 15,000 | 15,000 | ||||
Finite-lived intangible assets, accumulated amortization | 11,259 | 11,259 | $ 7,506 | ||||
Amortization of intangible assets | $ 1,251 | $ 1,251 | $ 3,753 | $ 3,753 | |||
Customer One [Member] | |||||||
Concentration risk, percentage | 25.00% | 14.00% | |||||
Customer Two [Member] | |||||||
Concentration risk, percentage | 11.00% | 30.00% | |||||
Customer Three [Member] | |||||||
Concentration risk, percentage | 11.00% |
Summary of Significant Accoun23
Summary of Significant Accounting Policies - Schedule of Accounts Receivable (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Accounts receivable, gross | $ 1,545,061 | $ 405,096 |
Allowance for doubtful accounts | (75,395) | (42,000) |
Accounts receivable, net | $ 1,469,666 | $ 363,096 |
Summary of Significant Accoun24
Summary of Significant Accounting Policies - Schedule of Inventory (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Finished goods, net | $ 543,755 | $ 565,624 |
Raw materials and supplies, net | 434,404 | 146,934 |
Total inventories | $ 978,159 | $ 712,558 |
Summary of Significant Accoun25
Summary of Significant Accounting Policies - Schedule of Computation of Anti-Dilutive Earnings Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Total potentially dilutive securities | 936,213 | 194,667 | 936,213 | 194,667 |
Options To Purchase Common Stock [Member] | ||||
Total potentially dilutive securities | 465,411 | 194,667 | 465,411 | 194,667 |
Warrants To Purchase Common Stock [Member] | ||||
Total potentially dilutive securities | 470,570 | 470,570 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Schedule of Fair Value of Financial Assets and Liabilities (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Short-term investments | $ 2,507,302 | |
Level 1 [Member] | ||
Short-term investments | 2,507,302 | |
Level 2 [Member] | ||
Short-term investments | ||
Level 3 [Member] | ||
Short-term investments |
Equipment Loan (Details Narrati
Equipment Loan (Details Narrative) - USD ($) | Nov. 23, 2015 | Sep. 30, 2016 | Dec. 31, 2015 |
Short-term Debt [Line Items] | |||
Debt instrument, face amount | $ 117,917 | ||
Debt instrument, periodic payment, total | $ 3,819 | ||
Debt instrument, interest rate during period | 10.00% | ||
Equipment Loan [Member] | |||
Short-term Debt [Line Items] | |||
Loans payable, total | $ 85,872 | $ 113,104 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) - USD ($) | Oct. 12, 2016 | Jul. 29, 2016 | Jul. 29, 2016 | Mar. 24, 2016 | Mar. 17, 2016 | Nov. 23, 2015 | May 31, 2016 | Apr. 30, 2016 | Mar. 24, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Jul. 31, 2016 | Mar. 31, 2016 | Mar. 29, 2016 |
Line of Credit Facility [Line Items] | |||||||||||||||||
Proceeds from lines of credit | $ 1,000,000 | $ 1,000,000 | $ 500,000 | ||||||||||||||
Increase in line of credit draw limit | $ 500,000 | 3,500,000 | |||||||||||||||
Line of credit facility, prime rate | 3.50% | 3.50% | |||||||||||||||
Debt instrument, basis spread on variable rate | 7.50% | ||||||||||||||||
Line of credit facility, expiration date | Nov. 23, 2018 | ||||||||||||||||
Line of credit facility, default rate | 8.00% | ||||||||||||||||
Line of credit facility, commitment fee percentage | 1.75% | ||||||||||||||||
Line of credit facility, collateral fees, amount | $ 30,000 | ||||||||||||||||
Warrants issued to purchase shares of common stock | 1,111,111 | 1,111,111 | |||||||||||||||
Warrants exercise per share | $ 6.875 | $ 6.875 | $ 6 | $ 6 | |||||||||||||
Line of credit facility, current borrowing capacity | 1,000,000 | $ 1,500,000 | 1,500,000 | ||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 5,000,000 | 5,000,000 | 5,000,000 | ||||||||||||||
Line of credit related parties | 1,091,571 | $ 1,091,571 | |||||||||||||||
Deferred finance costs, gross | 1,903,879 | 1,903,879 | |||||||||||||||
Deferred finance costs, net | $ 954,113 | 954,113 | |||||||||||||||
Accumulated amortization, deferred finance costs | $ 65,797 | $ 65,797 | |||||||||||||||
Proceeds from the public offering, net of costs | 5,867,217 | ||||||||||||||||
Debt instruments converted shares of common stock | 421,972 | 908,083 | 4,994,457 | ||||||||||||||
Induced conversion of debt | $ 1,587,954 | ||||||||||||||||
Shares issued, price per share | $ 5.50 | $ 5.50 | $ 4 | $ 4 | $ 5.50 | ||||||||||||
Lender [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Warrants issued to purchase shares of common stock | 1,111,111 | ||||||||||||||||
Stock issuable upon exchange of warrants | 486,111 | ||||||||||||||||
Brentwood Note [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Debt instruments converted shares of common stock | 421,972 | ||||||||||||||||
Minimum [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Increase in line of credit draw limit | 500,000 | ||||||||||||||||
Proceeds from the public offering, net of costs | $ 5,000,000 | ||||||||||||||||
Maximum [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Increase in line of credit draw limit | 1,500,000 | ||||||||||||||||
Proceeds from the public offering, net of costs | $ 50,000,000 | ||||||||||||||||
LIBB [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Increase in line of credit draw limit | $ 250,000 | $ 250,000 | |||||||||||||||
Previously Credit Agreement [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Proceeds from lines of credit | $ 250,000 | $ 250,000 | |||||||||||||||
Line of credit facility, current borrowing capacity | 500,000 | ||||||||||||||||
Previously Credit Agreement [Member] | Minimum [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Line of credit facility, current borrowing capacity | 500,000 | ||||||||||||||||
Previously Credit Agreement [Member] | Maximum [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Line of credit facility, current borrowing capacity | $ 1,500,000 | ||||||||||||||||
Credit Facility [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Line of credit facility, remaining borrowing capacity | 3,500,000 | ||||||||||||||||
Unamortized deferred financing costs | $ 408,000 | ||||||||||||||||
Lender [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Debt instrument, convertible, conversion price | $ 4 | $ 4 | |||||||||||||||
Warrants issued to purchase shares of common stock | 1,111,111 | 1,111,111 | |||||||||||||||
Warrants exercise per share | $ 4.50 | $ 4.50 | |||||||||||||||
Chief Executive Officer and Director [Member] | |||||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||||
Line of credit facility, maximum amount guaranteed in certain limited circumstances | $ 200,000 | $ 200,000 |
Line of Credit - Schedule of In
Line of Credit - Schedule of Induced Conversion of Credit Facility and Related Warrants (Details) - USD ($) | Jul. 29, 2016 | Jul. 29, 2016 | Sep. 30, 2016 | Sep. 30, 2016 |
Total fair value of securities issued upon conversion | $ 3,406,503 | $ 3,406,503 | ||
Aggregate fair value of common stock to be issued upon original conversion terms | 421,972 | 908,083 | 4,994,457 | |
Fair value per share | $ 5.50 | $ 5.50 | ||
Loss on induced conversion of line of credit and warrants | $ 1,587,954 | |||
Line of Credit [Member] | ||||
Total fair value of securities issued upon conversion | $ 1,669,372 | |||
Aggregate fair value of common stock to be issued upon original conversion terms | 417,344 | |||
Line of Credit [Member] | Original Conversion Terms [Member] | ||||
Total fair value of securities issued upon conversion | $ 2,295,392 | $ 2,295,392 | ||
Warrant [Member] | Original Conversion Terms [Member] | ||||
Total fair value of securities issued upon conversion | $ 1,111,111 | $ 1,111,111 | ||
Shares of Common Stock [Member] | ||||
Aggregate fair value of common stock to be issued upon original conversion terms | 908,083 | 908,083 |
Line of Credit - Schedule of 30
Line of Credit - Schedule of Induced Conversion of Credit Facility and Related Warrants (Details) (Parenthetical) - USD ($) | Jul. 29, 2016 | Jul. 29, 2016 | Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Jul. 31, 2016 | Mar. 31, 2016 | Mar. 29, 2016 |
Line of credit, converted amount | $ 3,406,503 | $ 3,406,503 | ||||||
Line of credit, converted shares | 421,972 | 908,083 | 4,994,457 | |||||
Shares issued, price per share | $ 5.50 | $ 5.50 | $ 4 | $ 4 | $ 5.50 | |||
Number of warrant shares in common stock | 31,522 | 31,522 | 58,750 | 58,750 | ||||
Warrant exercise price | $ 6.875 | $ 6.875 | $ 6 | $ 6 | ||||
Proceeds from issuance of warrants | $ 861,790 | $ 475,885 | ||||||
Warrant [Member] | ||||||||
Line of credit, converted shares | 486,111 | |||||||
Number of warrant shares in common stock | 1,111,111 | 1,111,111 | ||||||
Warrant exercise price | $ 5.50 | $ 5.50 | ||||||
Line of Credit [Member] | ||||||||
Line of credit, converted amount | $ 1,669,372 | |||||||
Line of credit conversion price per share | 4 | $ 4 | ||||||
Line of credit, converted shares | 417,344 | |||||||
Shares issued, price per share | $ 5.50 | $ 5.50 | ||||||
Warrant [Member] | ||||||||
Proceeds from issuance of warrants | $ 5,000,000 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Jul. 29, 2016 | Jul. 29, 2016 | Apr. 06, 2016 | Mar. 31, 2016 | Mar. 31, 2016 | Mar. 29, 2016 | Mar. 14, 2016 | Jan. 26, 2016 | Nov. 24, 2015 | Jul. 29, 2016 | Apr. 30, 2016 | Mar. 31, 2016 | Mar. 14, 2016 | Sep. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Jul. 31, 2016 | Jun. 30, 2016 |
Number of units sold during the period | 1,270,156 | |||||||||||||||||||
Sale of units price per unit | $ 5.50 | $ 5.50 | ||||||||||||||||||
Net proceeds from sale of units | $ 56,250 | $ 568,468 | ||||||||||||||||||
Proceeds from sale of units with private placement | $ 5,867,217 | |||||||||||||||||||
Warrants exercise per share | $ 6.875 | $ 6.875 | $ 6 | $ 6 | $ 6 | $ 6.875 | $ 6 | $ 6 | ||||||||||||
Warrants expiration date | Jul. 14, 2021 | Mar. 29, 2019 | Mar. 29, 2019 | |||||||||||||||||
Number of common stock shares issued for services | 1,667 | |||||||||||||||||||
Number of common stock value issued | $ 205,700 | |||||||||||||||||||
Shares issued price per share | $ 5.50 | $ 5.50 | $ 5.50 | 4 | $ 4 | $ 5.50 | ||||||||||||||
Share based compensation | $ 1,010,820 | $ 207,949 | ||||||||||||||||||
Placement Agent [Member] | ||||||||||||||||||||
Number of units sold during the period | 345,725 | |||||||||||||||||||
Sale of units price per unit | $ 4.50 | $ 4.50 | ||||||||||||||||||
Percentage of nonaccountable expense allowance | 3.00% | 3.00% | ||||||||||||||||||
Percentage of warrants to purchase a shares of common stock | 10.00% | 10.00% | ||||||||||||||||||
Warrants exercise per share | $ 4.50 | |||||||||||||||||||
Warrants expiration date | Oct. 30, 2020 | |||||||||||||||||||
Number of warrants issued during the period | 34,573 | |||||||||||||||||||
March Sales [Member] | ||||||||||||||||||||
Warrants description | The exercise price and number of shares of common stock issuable on exercise of the warrants are subject to standard anti-dilution provisions. The Company, at its option, may call the warrants for redemption, in whole and not in part, at a price of $0.01 per warrant, if (i) the closing price per share of the common stock is at least $10.00 for 30 consecutive trading days ending on the third business day prior to the notice of redemption or (ii) the common stock is listed for trading on a national securities exchange and the closing price per share of common stock on the first day of trading on such exchange is at least $7.50. | |||||||||||||||||||
Warrants exercise per share | $ 6 | $ 6 | ||||||||||||||||||
Warrants expiration date | Mar. 29, 2019 | |||||||||||||||||||
Second Offering [Member] | ||||||||||||||||||||
Proceeds from sale of units with private placement | $ 3,000,000 | |||||||||||||||||||
Offering terminated date | Mar. 14, 2016 | |||||||||||||||||||
Second Offering [Member] | Placement Agent [Member] | ||||||||||||||||||||
Percentage of commission paid | 10.00% | 10.00% | ||||||||||||||||||
Percentage of nonaccountable expense allowance | 3.00% | 3.00% | ||||||||||||||||||
Warrants description | Each warrant issued pursuant to the Second Offering entitles the holder to purchase one share of the Companys common stock at an exercise price of $6.00 per share, commencing immediately and expiring on November 30, 2018. The exercise price and number of shares of common stock issuable on exercise of the warrants are subject to standard anti-dilution provisions. The Company, at its option, may call the warrants for redemption, in whole and not in part, at a price of $0.01 per warrant, if (i) the closing price per share of the common stock is at least $10.00 for 30 consecutive trading days ending on the third business day prior to the notice of redemption or (ii) the common stock is listed for trading on a national securities exchange and the closing price per share of common stock on the first day of trading on such exchange is at least $7.50. | |||||||||||||||||||
Warrants exercise per share | $ 4.50 | $ 4.50 | ||||||||||||||||||
Warrants expiration date | Nov. 30, 2018 | |||||||||||||||||||
Subscription Agreements [Member] | ||||||||||||||||||||
Number of units sold during the period | 58,750 | |||||||||||||||||||
Sale of units price per unit | $ 4 | |||||||||||||||||||
Gross proceeds from sale of units | $ 235,000 | |||||||||||||||||||
Consulting Services Agreement [Member] | General and Administrative [Member] | ||||||||||||||||||||
Number of common stock shares issued for services | 1,667 | |||||||||||||||||||
Number of common stock value issued | $ 9,169 | $ 9,169 | ||||||||||||||||||
Chief Financial Officer Employment Agreement [Member] | General And Administrative Expenses [Member] | ||||||||||||||||||||
Number of common stock value issued | 40,000 | 40,000 | ||||||||||||||||||
Chief Financial Officer Employment Agreement [Member] | General and Administrative [Member] | ||||||||||||||||||||
Number of common stock shares issued for services | 10,000 | |||||||||||||||||||
Consultant In Exchange For Services [Member] | General And Administrative Expenses [Member] | ||||||||||||||||||||
Number of common stock value issued | $ 20,000 | $ 20,000 | ||||||||||||||||||
Consultant In Exchange For Services [Member] | General and Administrative [Member] | ||||||||||||||||||||
Number of common stock shares issued for services | 5,000 | |||||||||||||||||||
Investor [Member] | ||||||||||||||||||||
Number of units sold during the period | 171,725 | |||||||||||||||||||
Sale of units price per unit | $ 4 | $ 4 | ||||||||||||||||||
Gross proceeds from sale of units | $ 686,900 | |||||||||||||||||||
Cost of sale | 60,110 | |||||||||||||||||||
Net proceeds from sale of units | $ 626,790 | |||||||||||||||||||
Thomas Cardella [Member] | ||||||||||||||||||||
Number of units sold during the period | 25,000 | |||||||||||||||||||
Paul Vassilakos [Member] | ||||||||||||||||||||
Number of units sold during the period | 7,500 | |||||||||||||||||||
Philip Thomas [Member] | Subscription Agreements [Member] | ||||||||||||||||||||
Number of units sold during the period | 2,500 | |||||||||||||||||||
Thomas Panza [Member] | Subscription Agreements [Member] | ||||||||||||||||||||
Number of units sold during the period | 2,500 | |||||||||||||||||||
Percentage of ownership | 10.00% | 10.00% | ||||||||||||||||||
Advisory Board Member One [Member] | ||||||||||||||||||||
Number of common stock shares issued for services | 7,500 | |||||||||||||||||||
Advisory Board Member Two [Member] | ||||||||||||||||||||
Number of common stock shares issued for services | 7,500 | |||||||||||||||||||
Advisory Board Member Three [Member] | ||||||||||||||||||||
Number of common stock shares issued for services | 7,500 | |||||||||||||||||||
Advisory Board Member Four [Member] | ||||||||||||||||||||
Number of common stock shares issued for services | 7,500 | |||||||||||||||||||
Non Employee [Member] | ||||||||||||||||||||
Number of common stock shares issued for services | 35,824 | |||||||||||||||||||
Customers [Member] | ||||||||||||||||||||
Number of common stock shares issued for services | 3,400 | |||||||||||||||||||
Customers [Member] | Net Sales [Member] | ||||||||||||||||||||
Share based compensation | $ 13,600 | |||||||||||||||||||
Suppliers [Member] | ||||||||||||||||||||
Number of common stock shares issued for services | 1,200 | |||||||||||||||||||
Suppliers [Member] | Cost Of Goods Sold [Member] | ||||||||||||||||||||
Share based compensation | $ 4,800 | |||||||||||||||||||
Brokers [Member] | ||||||||||||||||||||
Number of common stock shares issued for services | 2,000 | |||||||||||||||||||
Brokers [Member] | Selling And Marketing Expenses [Member] | ||||||||||||||||||||
Share based compensation | $ 8,000 | |||||||||||||||||||
Consultants [Member] | ||||||||||||||||||||
Number of common stock shares issued for services | 6,700 | |||||||||||||||||||
Consultants [Member] | General And Administrative Expenses [Member] | ||||||||||||||||||||
Share based compensation | $ 0 | $ 26,800 | ||||||||||||||||||
Consultants [Member] | Consulting Services Agreement [Member] | ||||||||||||||||||||
Number of common stock shares issued for services | 5,000 | |||||||||||||||||||
Consultants [Member] | Consulting Services Agreement [Member] | Prepaid Expenses [Member] | ||||||||||||||||||||
Share based compensation | 9,091 | |||||||||||||||||||
Consultants [Member] | Consulting Services Agreement [Member] | Market Research Expense [Member] | ||||||||||||||||||||
Share based compensation | 5,455 | 10,909 | ||||||||||||||||||
Consultants [Member] | Consulting Agreement [Member] | ||||||||||||||||||||
Number of common stock shares issued for services | 15,833 | |||||||||||||||||||
Advance payment | $ 20,000 | |||||||||||||||||||
Consulting services amount | $ 30,000 | |||||||||||||||||||
Consultants [Member] | Consulting Agreement [Member] | Prepaid Expenses [Member] | ||||||||||||||||||||
Share based compensation | 0 | |||||||||||||||||||
Consultants [Member] | Consulting Agreement [Member] | Market Research Expense [Member] | ||||||||||||||||||||
Share based compensation | 0 | 63,332 | ||||||||||||||||||
Employee [Member] | ||||||||||||||||||||
Number of common stock shares issued for services | 7,500 | |||||||||||||||||||
Employee [Member] | Selling and Marketing Expense [Member] | ||||||||||||||||||||
Share based compensation | $ 0 | $ 30,000 |
Stock Based Compensation (Detai
Stock Based Compensation (Details Narrative) - USD ($) | Jul. 29, 2016 | Mar. 31, 2016 | Mar. 29, 2016 | May 27, 2015 | Aug. 18, 2016 | Mar. 14, 2016 | Sep. 30, 2016 | Jul. 31, 2016 | Mar. 27, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based compensation arrangement by share-based payment award, options, grants in period, gross | 286,744 | ||||||||
Share-based compensation arrangements by share-based payment award, options, grants in period, weighted average exercise price | $ 5.50 | ||||||||
Shares issued price per share | $ 5.50 | $ 4 | $ 5.50 | ||||||
Employee service share-based compensation, nonvested awards, compensation not yet recognized, stock options | $ 867,517 | ||||||||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 1 year 4 months 13 days | ||||||||
Issuance of warrants to purchase of common stock | 31,522 | 58,750 | 58,750 | ||||||
Warrants exercise price per share | $ 6.875 | $ 6 | $ 6 | ||||||
Warrants expiration date | Jul. 14, 2021 | Mar. 29, 2019 | Mar. 29, 2019 | ||||||
Julian Davidson [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Option to purchase, shares | 286,744 | 71,686 | |||||||
Shares issued price per share | $ 5.50 | ||||||||
Common stock option expiry date | Jul. 28, 2021 | ||||||||
Option vested period | This option vests one third immediately, one third on July 28, 2017 and the remainder on July 28, 2018. | ||||||||
Investors [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Issuance of warrants to purchase of common stock | 171,725 | ||||||||
Warrants exercise price per share | $ 6 | ||||||||
Warrants expiration date | Nov. 30, 2018 | ||||||||
Placement Agent [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Issuance of warrants to purchase of common stock | 34,573 | ||||||||
Warrants exercise price per share | $ 4.50 | ||||||||
Warrants expiration date | Oct. 30, 2020 | ||||||||
Employment Agreements [Member] | Mr. Panza [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based compensation arrangement by share-based payment award, options, grants in period, gross | 194,667 | ||||||||
Share-based compensation arrangements by share-based payment award, options, grants in period, weighted average exercise price | $ 3.75 | ||||||||
Share-based compensation arrangement by share-based payment award, expiration date | May 26, 2020 | ||||||||
2015 Long-Term Incentive Equity Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Common stock, capital shares reserved for future issuance | 466,667 |
Stock Based Compensation - Sche
Stock Based Compensation - Schedule of Stock Options, Activity (Details) | 9 Months Ended |
Sep. 30, 2016USD ($)$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of shares, Outstanding beginning balance | shares | 194,667 |
Number of shares, Granted | shares | 286,744 |
Number of shares, Exercised | shares | |
Number of shares, Expired, forfeited or cancelled | shares | (16,000) |
Number of shares, Outstanding ending balance | shares | 465,411 |
Number of shares, Exercisable | shares | 207,248 |
Weighted Average Exercise Price, Outstanding beginning balance | $ 3.75 |
Weighted Average Exercise Price, Granted | 5.50 |
Weighted Average Exercise Price, Exercised | |
Weighted Average Exercise Price, Expired, forfeited or cancelled | 3.75 |
Weighted Average Exercise Price, Outstanding ending balance | 4.83 |
Weighted Average Exercise Price, Exercisable | 4.56 |
Weighted Average Grant Date Fair Value, Outstanding beginning balance | 6.22 |
Weighted Average Grant Date Fair Value, Granted | 2.71 |
Weighted Average Grant Date Fair Value, Exercised | |
Weighted Average Grant Date Fair Value, Expired, forfeited or cancelled | 6.22 |
Weighted Average Grant Date Fair Value, Outstanding ending balance | 4.06 |
Weighted Average Grant Date Fair Value, Exercisable | $ 4.60 |
Weighted Average Remaining Contractual Term (Years) | 4 years 4 months 24 days |
Weighted Average Exercisable Contractual Term (Years) | 4 years 4 months 24 days |
Weighted Average Outstanding Aggregate Intrinsic Value | $ | $ 123,280 |
Weighted Average Exercisable Aggregate Intrinsic Value | $ | $ 77,050 |
Stock Based Compensation - Sc34
Stock Based Compensation - Schedule of Warrant Activity (Details) - Warrant [Member] | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares, Outstanding beginning balance | shares | 1,285,111 |
Number of shares, Issued | shares | 296,570 |
Number of shares, Expired | shares | |
Number of shares, Exchanged | shares | (1,111,111) |
Number of shares, Outstanding ending balance | shares | 470,570 |
Number of shares, Exercisable | shares | 470,570 |
Weighted Average Exercise Price, Outstanding beginning balance | $ / shares | $ 4.70 |
Weighted Average Exercise Price, Issued | $ / shares | 5.92 |
Weighted Average Exercise Price, Expired | $ / shares | |
Weighted Average Exercise Price, Exchanged | $ / shares | 4.50 |
Weighted Average Exercise Price, Outstanding ending balance | $ / shares | 5.95 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 5.95 |
Weighted Average Remaining Contractual Term (Years) | 2 years 5 months 16 days |
Weighted Average Remaining Contractual Term (Years), Exercisable | 2 years 5 months 16 days |
Stock Based Compensation - Sc35
Stock Based Compensation - Schedule of Stock Based Compensation Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based compensation | $ 438,113 | $ 151,354 | $ 1,010,820 | $ 207,949 |
General and Administrative [Member] | ||||
Share-based compensation | 412,439 | 105,740 | 853,859 | 145,279 |
Sales and Marketing [Member] | ||||
Share-based compensation | 25,674 | 45,614 | 156,961 | 62,670 |
Stock Options [Member] | ||||
Share-based compensation | 438,113 | 151,354 | 740,820 | 207,949 |
Warrant [Member] | ||||
Share-based compensation | 30,000 | |||
Common Stock [Member] | ||||
Share-based compensation | $ 240,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Aug. 18, 2016 | Jun. 06, 2016 | Feb. 01, 2016 | Nov. 23, 2015 | Aug. 01, 2014 | Sep. 30, 2016 | Sep. 30, 2015 |
Commitments And Contingencies [Line Items] | |||||||
Loss contingency, damages sought, value | $ 10,000,000 | ||||||
Percentage of brokerage commissions through vending channels | 42.00% | ||||||
Number of common stock shares issued for services | 1,667 | ||||||
Periodic payment | $ 3,819 | ||||||
Number of common stock value issued | $ 205,700 | ||||||
One-time grant shares | $ 1,010,820 | $ 207,949 | |||||
Common Stock [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Stock issued during period, shares, new issues | 1,270,156 | ||||||
Number of common stock shares issued for services | 50,800 | ||||||
Number of common stock value issued | $ 5 | ||||||
Employee [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Labor and related expense | $ 120,000 | ||||||
Employees compensation percentage of incentive bonus | 20.00% | ||||||
Employee [Member] | Common Stock [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Stock issued during period, shares, new issues | 7,500 | ||||||
Richard Allen [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Officers' compensation | $ 170,000 | ||||||
Officers compensation, percentage of incentive bonus | 50.00% | ||||||
Richard Allen [Member] | May 31, 2017 [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Number of common stock shares granted during the period | 8,333 | ||||||
Richard Allen [Member] | May 31, 2018 [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Number of common stock granted during the period | $ 50,000 | ||||||
Richard Allen [Member] | May 31, 2019 [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Number of common stock granted during the period | 50,000 | ||||||
Julian Davidson [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Annual fees payment | $ 250,000 | ||||||
Option to purchase, shares | 286,744 | 71,686 | |||||
Julian Davidson [Member] | Consulting Agreement [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Consulting fees per month | $ 10,000 | ||||||
Number of common stock shares issued for services | 1,667 | ||||||
Number of common stock value issued | $ 50 | ||||||
Julian Davidson [Member] | September 29, 2016 [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Officers' compensation | $ 20,000 | ||||||
Number of common stock shares granted during the period | 3,000,000 | ||||||
Consulting fees per month | $ 20,833 | ||||||
Number of common stock shares issued for services | 15,000 | ||||||
Payment for incentive fee | $ 75,000 | ||||||
Periodic payment | $ 165,000 | ||||||
Mr. Davidson [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Officers' compensation | $ 95,000 | ||||||
Gross proceeds of sale of | $ 6,900,000 | ||||||
Option to purchase, shares | 286,744 | ||||||
Monthly cash fee increase | $ 20,000 | ||||||
One-time grant shares | $ 50,000 | ||||||
Option Purchase of common stock percentage | 4.00% | ||||||
Minimum [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Percentage of brokerage commissions | 2.00% | ||||||
Minimum [Member] | Employee [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Employees compensation percentage of incentive bonus | 20.00% | ||||||
Maximum [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Percentage of brokerage commissions | 5.00% | ||||||
Maximum [Member] | Employee [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Employees compensation percentage of incentive bonus | 40.00% | ||||||
Revolution Marketing [Member] | Punitive Damages [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Loss contingency, damages sought, value | 5,000,000 | ||||||
Revolution Marketing [Member] | Breach Of Contract [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Loss contingency, damages sought, value | $ 310,880 |
Major Customers and Vendors (De
Major Customers and Vendors (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Supplier One [Member] | Accounts Payable [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 18.00% | |||
Supplier Two [Member] | Accounts Payable [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 13.00% | |||
One Vendor [Member] | Accounts Payable [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 15.00% | |||
Customer One [Member] | Sales Revenue, Net [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 22.00% | 10.00% | 13.00% | |
Customer Two [Member] | Sales Revenue, Net [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 11.00% | 12.00% | ||
Customer Three [Member] | Sales Revenue, Net [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 11.00% | 12.00% | ||
No Customers [Member] | Sales Revenue, Net [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 10.00% | |||
Five Vendors [Member] | Cost of Goods, Total [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 78.00% | |||
Four Vendors [Member] | Cost of Goods, Total [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 78.00% | 69.00% | 82.00% | |
Three Vendors [Member] | Cost of Goods, Total [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 80.00% | |||
Four Vendors [Member] | Cost of Goods, Total [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 80.00% |
Related Parties (Details Narrat
Related Parties (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||||
Accounts receivable related parties | $ 56,493 | $ 56,493 | $ 67,992 | ||
Related party transaction purchases from related party | 0 | 17,514 | |||
Related party transaction, selling, general and administrative expenses from transactions with related party | 77,250 | 232,250 | |||
Accounts payable related parties | 0 | 0 | 87,258 | ||
Customers [Member] | |||||
Related Party Transaction [Line Items] | |||||
Accounts receivable related parties | 11,554 | 11,554 | 15,513 | ||
Accounts Payable [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 0 | 0 | 3,242 | ||
Non Employee Members [Member] | |||||
Related Party Transaction [Line Items] | |||||
Payment to be paid related party for services rendered | 30,000 | ||||
Stock to be issued for service | 35,000 | ||||
Related Party One [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | 7,628 | $ 3,945 | 7,936 | $ 35,140 | |
Related Party Two [Member] | Individual Counterparty [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | 25 | 742 | 463 | 11,716 | |
Accounts receivable related parties | 44,939 | 44,939 | 51,961 | ||
Immediate Family Member of Management or Principal Owner [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | 426 | $ 1,512 | 3,063 | $ 1,653 | |
Accounts receivable related parties | $ 0 | $ 0 | $ 518 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Nov. 11, 2016 | Oct. 27, 2016 | Oct. 12, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Nov. 23, 2015 |
Proceeds from the public offering, net of costs | $ 5,867,217 | |||||
Line of credits borrowing capacity | $ 5,000,000 | $ 5,000,000 | ||||
Subsequent Event [Member] | ||||||
Proceeds from the public offering, net of costs | $ 50,000,000 | |||||
Subsequent Event [Member] | UBS Bank [Member] | ||||||
Line of credits borrowing capacity | $ 1,300,000 | |||||
Line of credit interest rate description | ICE Swap Rate plus a margin of between 0.40% and 0.70% | |||||
Line of credit interest rate percentage | 3.089% | |||||
Line of credit | $ 400,000 |