Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 22, 2021 | |
Affiliate, Collateralized Security [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-38739 | |
Entity Registrant Name | TOUGHBUILT INDUSTRIES, INC. | |
Entity Central Index Key | 0001668370 | |
Entity Tax Identification Number | 46-0820877 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 25371 Commercentre Drive | |
Entity Address, Address Line Two | Suite 200 | |
Entity Address, City or Town | Lake Forest | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92630 | |
City Area Code | 949 | |
Local Phone Number | 528-3100 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 129,299,607 | |
Common Stock [Member] | ||
Affiliate, Collateralized Security [Line Items] | ||
Title of 12(b) Security | Common Stock | |
Trading Symbol | TBLT | |
Security Exchange Name | NASDAQ | |
Series A Warrants [Member] | ||
Affiliate, Collateralized Security [Line Items] | ||
Title of 12(b) Security | Series A Warrants | |
Trading Symbol | TBLTW | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash | $ 31,189,160 | $ 2,194,850 |
Accounts receivable | 17,040,362 | 10,537,395 |
Factor receivables, net | 0 | 807,648 |
Inventory | 31,317,878 | 8,915,345 |
Prepaid assets | 1,045,496 | 1,003,774 |
Subscription receivable | 0 | 837,025 |
Total Current Assets | 80,592,896 | 24,296,037 |
Other Assets | ||
Property and equipment, net | 9,930,109 | 3,066,924 |
Other assets | 460,656 | 127,733 |
Total Assets | 90,983,661 | 27,490,694 |
Current Liabilities | ||
Accounts payable | 12,142,937 | 6,955,218 |
Accrued expenses | 1,441,533 | 598,473 |
Factor loan payable | 0 | 590,950 |
Warrant liabilities | 4,560,663 | 0 |
Total Current Liabilities | 18,145,133 | 8,144,641 |
Total Liabilities | 18,145,133 | 8,144,641 |
Commitment and Contingencies | ||
Shareholders' Equity | ||
Common stock, $0.0001 par value, 200,000,000 shares authorized, 129,299,607 and 43,918,831 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 12,930 | 4,392 |
Additional paid-in capital | 156,158,382 | 80,103,653 |
Accumulated deficit | (83,332,784) | (60,761,992) |
Total Shareholders' Equity | 72,838,528 | 19,346,053 |
Total Liabilities and Shareholders' Equity | 90,983,661 | 27,490,694 |
Series C Preferred Stock [Member] | ||
Shareholders' Equity | ||
Preferred Stock | 0 | 0 |
Series D Preferred Stock [Member] | ||
Shareholders' Equity | ||
Preferred Stock | 0 | 0 |
Series E Preferred Stock [Member] | ||
Shareholders' Equity | ||
Preferred Stock | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 4,268 | 4,268 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 129,299,607 | 43,918,831 |
Common stock, shares outstanding | 129,299,607 | 43,918,831 |
Series C Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 4,268 | 4,268 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series D Preferred Stock [Member] | ||
Preferred stock, par value | $ 1,000 | $ 1,000 |
Preferred stock, shares authorized | 5,775 | 5,775 |
Preferred stock, shares issued | 0 | 5,775 |
Preferred stock, shares outstanding | 0 | 5,775 |
Series E Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 15 | 15 |
Preferred stock, shares issued | 9 | 0 |
Preferred stock, shares outstanding | 9 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues, net of allowances | ||||
Total revenues, net of allowances | $ 17,215,938 | $ 16,663,389 | $ 45,351,558 | $ 27,412,547 |
Cost of Goods Sold | ||||
Total cost of goods sold | 11,771,315 | 9,834,009 | 31,479,176 | 16,537,654 |
Gross profit | 5,444,623 | 6,829,380 | 13,872,382 | 10,874,893 |
Operating expenses: | ||||
Selling, general and administrative expenses | 15,242,780 | 5,703,676 | 33,904,958 | 14,727,242 |
Research and development | 1,610,671 | 789,890 | 4,588,781 | 1,496,129 |
Total operating expenses | 16,853,451 | 6,493,566 | 38,493,739 | 16,223,371 |
Income (loss) from operations | (11,408,828) | 335,814 | (24,621,357) | (5,348,478) |
Other income (expense) | ||||
Warrant issuance costs | (588,221) | 0 | (588,221) | 0 |
Change in fair value of warrant liabilities | 2,902,342 | 0 | 2,902,342 | 0 |
Interest expense | 0 | (214,979) | (263,555) | (804,504) |
Total other income (expense) | 2,314,121 | (214,979) | 2,050,566 | (804,504) |
Net income (loss) | (9,094,707) | 120,835 | (22,570,791) | (6,152,982) |
Redemption of Series D Preferred Stock deemed dividend | 0 | 0 | 0 | (1,295,294) |
Net income (loss) attributable to common stockholders | $ (9,094,707) | $ 120,835 | $ (22,570,791) | $ (7,448,276) |
Basic and diluted net income (loss) per share attributed to common stockholders | ||||
Basic and diluted net income (loss) per common share | $ (0.07) | $ 0 | $ (0.25) | $ (0.32) |
Basic and diluted weighted average common shares outstanding | 122,060,087 | 38,414,631 | 90,619,171 | 23,154,481 |
Metal goods [Member] | ||||
Revenues, net of allowances | ||||
Total revenues, net of allowances | $ 8,078,180 | $ 5,368,015 | $ 18,130,530 | $ 10,824,861 |
Cost of Goods Sold | ||||
Total cost of goods sold | 6,419,003 | 3,136,146 | 13,680,028 | 6,871,998 |
Soft goods [Member] | ||||
Revenues, net of allowances | ||||
Total revenues, net of allowances | 9,137,758 | 11,295,374 | 27,221,028 | 16,587,686 |
Cost of Goods Sold | ||||
Total cost of goods sold | $ 5,352,312 | $ 6,697,863 | $ 17,799,148 | $ 9,665,656 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Series C Preferred Stock [Member]Preferred Stock [Member] | Series C Preferred Stock [Member]Common Stock [Member] | Series D Preferred Stock [Member]Preferred Stock [Member] | Series D Preferred Stock [Member]Common Stock [Member] | Series E Preferred Stock [Member]Preferred Stock [Member] |
Beginning Balance at Dec. 31, 2019 | $ 3,226,493 | $ 330 | $ 41,823,048 | $ (43,413,370) | $ 0 | $ 4,816,485 | $ 0 | ||
Balance, shares at Dec. 31, 2019 | 3,300,015 | 1,268 | 5,775 | ||||||
Redemption of Series D Preferred Stock | (3,140,154) | (1,295,294) | $ (1,844,860) | ||||||
Balance, shares | (2,212) | ||||||||
Issuance of common stock upon Series C preferred conversion | $ 13 | (13) | |||||||
Balance, shares | 126,800 | (1,268) | |||||||
Issuance of common stock upon conversion of convertible notes payable | (186,151) | $ 20 | (186,171) | ||||||
Balance, shares | 200,000 | ||||||||
Issuance of common stock and warrants | 9,388,740 | $ 495 | 9,388,245 | ||||||
Balance, shares | 4,945,000 | ||||||||
Issuance of common stock upon exercise of warrants | $ 241 | (241) | |||||||
Balance, shares | 2,407,953 | ||||||||
Stock based compensation expense | 96,490 | 96,490 | |||||||
Net income (loss) | (3,754,659) | (3,754,659) | |||||||
Ending Balance at Mar. 31, 2020 | 5,630,759 | $ 1,099 | 49,826,064 | (47,168,029) | $ 0 | $ 2,971,625 | 0 | ||
Balance, shares at Mar. 31, 2020 | 10,979,768 | 0 | 3,563 | ||||||
Beginning Balance at Dec. 31, 2019 | 3,226,493 | $ 330 | 41,823,048 | (43,413,370) | $ 0 | $ 4,816,485 | 0 | ||
Balance, shares at Dec. 31, 2019 | 3,300,015 | 1,268 | 5,775 | ||||||
Net income (loss) | (6,152,982) | ||||||||
Ending Balance at Sep. 30, 2020 | 25,850,304 | $ 3,842 | 75,412,814 | (49,566,352) | |||||
Balance, shares at Sep. 30, 2020 | 38,414,631 | ||||||||
Beginning Balance at Dec. 31, 2019 | 3,226,493 | $ 330 | 41,823,048 | (43,413,370) | $ 0 | $ 4,816,485 | 0 | ||
Balance, shares at Dec. 31, 2019 | 3,300,015 | 1,268 | 5,775 | ||||||
Balance, shares | 1,268 | 3,563 | |||||||
Balance, shares | 126,800 | 3,141,426 | |||||||
Ending Balance at Dec. 31, 2020 | 19,346,053 | $ 4,392 | 80,103,653 | (60,761,992) | $ 0 | $ 0 | 0 | ||
Balance, shares at Dec. 31, 2020 | 43,918,831 | 0 | 0 | ||||||
Beginning Balance at Mar. 31, 2020 | 5,630,759 | $ 1,099 | 49,826,064 | (47,168,029) | $ 0 | $ 2,971,625 | 0 | ||
Balance, shares at Mar. 31, 2020 | 10,979,768 | 0 | 3,563 | ||||||
Issuance of common stock upon conversion of convertible notes payable | 3,092,285 | $ 320 | 3,091,965 | ||||||
Balance, shares | 3,200,000 | ||||||||
Issuance of common stock and warrants | 18,734,000 | $ 2,070 | 18,731,930 | ||||||
Balance, shares | 20,700,000 | ||||||||
Issuance of common stock upon exercise of warrants | $ 3 | (3) | |||||||
Balance, shares | 33,437 | ||||||||
Issuance of common stock upon conversion of Series D Preferred Stock | $ 314 | 2,971,311 | $ (2,971,625) | ||||||
Balance, shares | 3,141,426 | (3,563) | |||||||
Issuance of common stock for services | 572,400 | $ 36 | 572,364 | ||||||
Balance, shares | 360,000 | ||||||||
Stock based compensation expense | 227,499 | 227,499 | |||||||
Net income (loss) | (2,519,158) | (2,519,158) | |||||||
Ending Balance at Jun. 30, 2020 | 25,737,785 | $ 3,842 | 75,421,130 | (49,687,187) | $ 0 | $ 0 | $ 0 | ||
Balance, shares at Jun. 30, 2020 | 38,414,631 | 0 | 0 | 0 | |||||
Stock based compensation expense | (8,316) | (8,316) | |||||||
Net income (loss) | 120,835 | 120,835 | |||||||
Ending Balance at Sep. 30, 2020 | 25,850,304 | $ 3,842 | 75,412,814 | (49,566,352) | |||||
Balance, shares at Sep. 30, 2020 | 38,414,631 | ||||||||
Beginning Balance at Dec. 31, 2020 | 19,346,053 | $ 4,392 | 80,103,653 | (60,761,992) | $ 0 | $ 0 | $ 0 | ||
Balance, shares at Dec. 31, 2020 | 43,918,831 | 0 | 0 | ||||||
Issuance of common stock upon conversion of warrants | 5,408,540 | $ 541 | 5,407,999 | ||||||
Balance, shares | 5,408,540 | ||||||||
Issuance of common stock for services | 189,000 | $ 15 | 188,985 | ||||||
Balance, shares | 150,000 | ||||||||
Issuance of common stock | 39,074,390 | $ 3,213 | 39,071,177 | ||||||
Balance, shares | 32,127,914 | ||||||||
Stock based compensation expense | 81,537 | 81,537 | |||||||
Net income (loss) | (6,053,659) | (6,053,659) | |||||||
Ending Balance at Mar. 31, 2021 | 58,045,861 | $ 8,161 | 124,853,351 | (66,815,651) | $ 0 | $ 0 | 0 | ||
Balance, shares at Mar. 31, 2021 | 81,605,285 | 0 | 0 | ||||||
Beginning Balance at Dec. 31, 2020 | 19,346,053 | $ 4,392 | 80,103,653 | (60,761,992) | $ 0 | $ 0 | 0 | ||
Balance, shares at Dec. 31, 2020 | 43,918,831 | 0 | 0 | ||||||
Net income (loss) | (22,570,791) | ||||||||
Ending Balance at Sep. 30, 2021 | 72,838,528 | $ 12,930 | 156,158,382 | (83,332,784) | $ 0 | $ 0 | 0 | ||
Balance, shares at Sep. 30, 2021 | 129,299,607 | 0 | 0 | ||||||
Beginning Balance at Mar. 31, 2021 | 58,045,861 | $ 8,161 | 124,853,351 | (66,815,651) | $ 0 | $ 0 | 0 | ||
Balance, shares at Mar. 31, 2021 | 81,605,285 | 0 | 0 | ||||||
Stock based compensation expense | 81,539 | 81,539 | |||||||
Net income (loss) | (7,422,426) | (7,422,426) | |||||||
Ending Balance at Jun. 30, 2021 | 50,704,974 | $ 8,161 | 124,934,890 | (74,238,077) | $ 0 | $ 0 | 0 | ||
Balance, shares at Jun. 30, 2021 | 81,605,285 | 0 | 0 | ||||||
Issuance of common stock and warrants | 31,154,890 | $ 4,769 | 31,150,121 | ||||||
Balance, shares | 47,690,322 | ||||||||
Issuance of common stock upon exercise of warrants | 4,000 | 4,000 | |||||||
Balance, shares | 4,000 | ||||||||
Stock based compensation expense | 69,371 | 69,371 | |||||||
Net income (loss) | (9,094,707) | (9,094,707) | |||||||
Ending Balance at Sep. 30, 2021 | $ 72,838,528 | $ 12,930 | $ 156,158,382 | $ (83,332,784) | $ 0 | $ 0 | $ 0 | ||
Balance, shares at Sep. 30, 2021 | 129,299,607 | 0 | 0 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (22,570,791) | $ (6,152,982) |
Adjustments to reconcile from net loss to net cash used in operating activities: | ||
Depreciation | 1,196,562 | 394,322 |
Amortization of debt discount and debt issuance cost | 0 | 634,892 |
Stock-based compensation expense | 232,447 | 315,673 |
Amortization of capitalized contract costs | 213,353 | 0 |
Common stock issued for services | 189,000 | 0 |
Warrant issuance costs | 588,221 | 0 |
Change in fair value of warrant liabilities | (2,902,342) | 0 |
Changes in operating assets and liabilities | ||
Accounts receivable, net | (6,502,967) | (10,508,916) |
Factor receivables, net | 807,648 | (1,933,040) |
Inventory | (22,402,533) | (4,468,533) |
Prepaid assets | (255,074) | (218,739) |
Other assets | (332,923) | (5,479) |
Accounts payable | 5,187,717 | 2,971,766 |
Accrued expenses | 843,061 | 183,757 |
Net cash used in operating activities | (45,708,621) | (18,787,279) |
Cash flows from investing activities: | ||
Proceeds from note receivable | 0 | 3,000,000 |
Purchases of property and equipment | (8,059,748) | (1,716,998) |
Net cash provided by (used in) investing activities | (8,059,748) | 1,283,002 |
Cash flows from financing activities: | ||
Proceeds from sales of common stock and warrants, net of costs | 0 | 28,122,740 |
Proceeds from exercise of warrants | 5,412,540 | 0 |
Proceeds from issuance of stock, net of costs | 77,941,089 | 0 |
Proceeds from factor loan payable | 0 | 1,388,240 |
Repayments of factor loan payable | (590,950) | 0 |
Repayments of Series D Preferred Stock | 0 | (3,140,154) |
Net cash provided by financing activities | 82,762,679 | 26,370,826 |
Net increase in cash | 28,994,310 | 8,866,549 |
Cash, beginning of period | 2,194,850 | 25,063 |
Cash, end of period | 31,189,160 | 8,891,612 |
Supplemental disclosure of cash flow information: | ||
Interest | 0 | 0 |
Income taxes | 0 | 0 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Cashless exercise of warrants | 0 | 244 |
Conversion of Series C Preferred Stock to common stock | 0 | 13 |
Conversion of convertible notes payable to common stock | 0 | 2,906,134 |
Conversion of Series D Preferred Stock to common stock | 0 | 2,971,311 |
Issuance of common stock for prepaid services | 0 | 572,400 |
Initial fair value of warrants | $ 7,463,005 | $ 0 |
NATURE OF OPERATIONS AND BASIS
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | NOTE 1: NATURE OF OPERATIONS AND BASIS OF PRESENTATION General The unaudited condensed consolidated financial statements of ToughBuilt Industries, Inc. (“ToughBuilt” or the “Company”) as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020 should be read in conjunction with the financial statements for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the Securities Exchange Commission (“SEC”) on March 26, 2021 and can also be found on the Company’s website (www.toughbuilt.com). ToughBuilt was incorporated under the laws of the State of Nevada on April 9, 2012 under the name Phalanx, Inc., and on December 29, 2015, Phalanx, Inc. changed its name to ToughBuilt Industries, Inc. On April 15, 2020, the Company effected a 1-for-10 reverse stock split (the “Reverse Split”) of its issued and outstanding common stock. As a result of the Reverse Split, each ten shares of issued and outstanding prior to the Reverse Split were converted into one share of common stock, with fractional shares resulting from the Reverse Split rounded up to the nearest whole number. All share and per share numbers in the unaudited condensed consolidated financial statements and notes below have been revised retroactively to reflect the Reverse Split. Nature of Operations In these notes, the terms “we,” “our,” “ours,” “us,” “it,” “its,” “ToughBuilt,” and the “Company” refer to ToughBuilt Industries, Inc., a Nevada corporation. The Company designs and distributes tools and accessories to the home improvement community and the building industry. The Company aspires to augment brand loyalty in part from the enlightened creativity of its end users throughout the global tool market industry. The Company holds exclusive patents and licenses to develop, manufacture, market and distribute various home improvement and construction product lines for both Do-it-Yourself (“DIY”) and professional trade markets under the TOUGHBUILT® brand name. TOUGHBUILT distributes products in the following categories, all designed and engineered in the United States and manufactured by third party vendors in China, with manufacturing being brought online in India and the Philippines: ● tool belts, tool bags and other personal tool organizer products; ● complete line of knee pads for various construction applications; and ● job-site tools and material support products consisting of a full line of miter-saws and table saw stands, saw horses/job site tables and roller stands. On June 2, 2020, the Company closed on a public offering of 19 million shares of common stock and 20.7 million warrants pursuant to a Form S-1 from which it received net proceeds of $17,185,640, after deducting underwriting discounts and expenses. On June 12, 2020, the Company closed on the public offering of 1.7 million additional shares of common stock for net proceeds of $1,548,360, after deducting underwriting discounts and expenses, pursuant to the underwriter exercising the overallotment option from the June 2, 2020 public offering. On January 28, 2020, the Company closed on a public offering 4.5 million shares of common stock and 49.45 million warrants (each exercisable into 1/20 th On January 19, 2021, the Company filed a prospectus supplement dated January 15, 2021 (the “ATM Prospectus Supplement”) to the shelf registration statement Form S-3 (File No. 333-251185) declared effective by the SEC on December 15, 2020 (the “First Form S-3”) for the offer and sale shares of common stock having an aggregate value of $8,721,746 from time to time through H.C. Wainwright & Co., LLC, as sales agent (“Wainwright”), pursuant to the At The Market Offering Agreement, dated December 7, 2020 (the “ATM Agreement”), between the Company and Wainwright. During January 2021, the Company has raised approximately $16,200,000 through the sale of 14.9 million shares of the Company’s common stock with net proceeds of $16,242,904 after deducting underwriting discounts and expenses . On February 2, 2021, the Company filed a second registration statement on Form S-3 (File No. 333-252630) (the “Second S-3”) containing a base prospectus covering the offering, issuance and sale by the Company of up to $100,000,000 of the Company’s common stock, preferred stock, warrants and units; and a sales agreement prospectus covering the offering, issuance and sale by us of up to a maximum aggregate offering price of $100,000,000 (which amount was included in the aggregate offering price set forth in the base prospectus) of the Company’s common stock that may be issued and sold under a second At The Market Offering Agreement, dated February 1, 2021, we entered into with Wainwright, as sales agent. The Second S-3 was declared effective by the SEC on February 8, 2021. The Company terminated the First S-3 simultaneously with the filing of the Second S-3. From February 2021 to July 2021, the Company sold an aggregate of 18,826,177 shares of common stock through the Wainwright under the Second S-3 with net proceeds of $24,602,110, after deducting underwriting discounts and expenses. On July 14, 2021, the Company raised gross proceeds of $40,000,000 in a registered direct offering pursuant to a Form S-3 involving the sale of shares and warrants to several institutional and accredited investors. These shares were sold pursuant to the Second S-3. There was a total of 46,029,920 shares of common stock sold with net proceeds of $36,259,050, after deducting underwriting discounts and expenses. Risk and Uncertainty Concerning Covid-19 In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and the World. We are currently monitoring the outbreak of COVID-19 and the related business and travel restrictions and changes to behavior intended to reduce its spread. All of our Chinese facilities were temporarily closed for a period of time. All of these facilities have been reopened. Depending on the progression of the outbreak, our ability to obtain necessary supplies and ship finished products to customers may be partly or completely disrupted globally. To date we have been able to obtain supplied and products needed. Also, our ability to maintain appropriate labor levels could be disrupted. If the coronavirus continues to progress, it could have a material negative impact on our results of operations and cash flow, in addition to the impact on its employees. We have concluded that while it is reasonably possible that the virus could have a negative impact on the results of operations, the specific impact is not readily determinable as of the date of these consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Liquidity As of September 30, 2021, the Company’s principal sources of liquidity consisted of approximately $31 million of cash and future cash generated from operations. The Company believes its current cash balances coupled with anticipated cash flow from operating activities will be sufficient to meet its working capital requirements for at least one year from the date of the issuance of the accompanying consolidated financial statements. The Company continues to control its cash expenses as a percentage of expected revenue on an annual basis and thus may use its cash balances in the short-term to invest in revenue growth. Based on current internal projections, the Company believes it has and/or will generate sufficient cash for its operational needs, for at least one year from the date of issuance of the accompanying consolidated financial statements. Management is focused on growing the Company’s existing product offering, as well as its customer base, to increase its revenues. The Company cannot give assurance that it can increase its cash balances or limit its cash consumption and thus maintain sufficient cash balances for its planned operations or future acquisitions. Future business demands may lead to cash utilization at levels greater than recently experienced. The Company may need to raise additional capital in the future. However, the Company cannot assure that it will be able to raise additional capital on acceptable terms, or at all. Subject to the foregoing, management believes that the Company has sufficient capital and liquidity to fund its operations for at least one year from the date of issuance of the accompanying consolidated financial statements. Basis of Presentation These interim condensed consolidated financial statements are unaudited and were prepared by the Company in accordance with generally accepted accounting principles in the United States of America (GAAP) and with the SEC’s instructions to Form 10-Q and Article 10 of Regulation S-X. The preparation of interim condensed consolidated financial statements requires management to make assumptions and estimates that impact the amounts reported. These interim consolidated condensed financial statements, reflect all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the Company’s results of operations, financial position and cash flows for the interim periods ended September 30, 2021 and 2020; however, certain information and footnote disclosures normally included in our audited annual financial statements, as included in the Company’s interim condensed consolidated financial statements on Form 10-Q, have been condensed or omitted pursuant to such SEC rules and regulations and accounting principles applicable for interim periods. It is important to note that the Company’s results of operations and cash flows for interim periods are not necessarily indicative of the results of operations and cash flows to be expected for a full fiscal year or any other interim period. The information included in this Quarterly Report on Form 10-Q should be read in connection with the financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020. Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Toughbuilt Industries UK Limited. All intercompany balances and transaction are eliminated. Reclassifications Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation. These reclassifications have no effect on previously reported total assets or net loss. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the valuation of accounts and factored receivables, valuation of long-lived assets, accrued liabilities, notes payable and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Cash The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. The Company did not have any cash equivalents at September 30, 2021 and December 31, 2020. Accounts Receivable Accounts receivable represent income earned from the sale of tools and accessories for which the Company has not yet received payment. Accounts receivable are recorded at the invoiced amount and adjusted for amounts management expects to collect from balances outstanding at period-end. The Company estimates the allowance for doubtful accounts based on an analysis of specific accounts and an assessment of the customer’s ability to pay, among other factors. At September 30, 2021 and December 31, 2020, no allowance for doubtful accounts was recorded. The Company accounts for the transfer of accounts receivable to a third party under a factoring type arrangement in accordance with Accounting Standards Codification (“ASC”) 860, Transfers and Servicing Inventory Inventory is valued at the lower of cost or net realizable value using the first-in, first-out method. The reported net value of inventory includes finished saleable products that will be sold or used in future periods. The Company reserves for obsolete and slow-moving inventory. At September 30, 2021 and 2020, there were no reserves for obsolete and slow-moving inventory. Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. The Company provides for depreciation on a straight-line basis over the estimated useful lives which are as follows: furniture 5 years, computers 3 years, production equipment 5 years, automobiles and transportation 5 years, tooling and molds 3 years, application development 3 years, website design 4 years, and steelbox 5 years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related assets when they are placed into service. The Company evaluates property and equipment for impairment periodically to determine if changes in circumstances or the occurrence of events suggest the carrying value of the asset or asset group may not be recoverable. Maintenance and repairs are charged to operations as incurred. Expenditures which substantially increase the useful lives of the related assets are capitalized. Long-lived Assets In accordance with ASC 360, “ Property, Plant, and Equipment, Fair Value of Financial Instruments and Fair Value Measurements The Company adheres to ASC 820, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances. ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). ● Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. ● Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. ● Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The fair value of the Company’s warrant liability recorded in the Company’s financial statements was determined using a Black-Scholes valuation methodology and the quoted price of the Company’s common stock in an active market, a Level 3 measurement. Volatility was based on the actual market activity of the Company for the period in which the Company was public and it’s peer group for the remaining period. The expected life was based on the remaining contractual term of the warrants, and the risk-free interest rate was based on the implied yield available on U.S. Treasury Securities with a maturity equivalent to the warrants’ expected life. The Company calculated the estimated fair value of warrants on the date of issuance and at each subsequent reporting date using the following assumptions: For the Nine Months Ended September 30, Risk-free interest rate 0.80% - 0.98% Contractual term 4.75 – 5 years Expected volatility 56.27 % - 57.67% Level 3 Fair Value Sensitivity Warrant liability The table below provides a reconciliation of the balances for the warrant liability which is measured at fair value using significant unobservable inputs (Level 3): Balance, January 1, 2021 $ — Fair value of warrant liability at issuance (2021 Offering Warrants as defined and described in Note 6) 7,463,005 Change in the fair value of warrant liability (2,902,342 ) Balance, September 30, 2021 $ 4,560,663 Revenue Recognition The Company recognizes revenues when product is delivered to the customer, and the ownership is transferred. The Company’s revenue recognition policy is based on the revenue recognition criteria established under the Financial Accounting Standards Board – Accounting Standards Codification 606 “Revenue From Contracts With Customers Income Taxes The Company accounts for income taxes following the asset and liability method in accordance with the ASC 740 “Income Taxes.” Under such method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The Company applies the accounting guidance issued to address the accounting for uncertain tax positions. This guidance clarifies the accounting for income taxes, by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements as well as provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company classifies interest and penalty expense related to uncertain tax positions as a component of income tax expense. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years that the asset is expected to be recovered or the liability settled. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the period in which related temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in its assessment of a valuation allowance. During 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was passed, which temporarily removed 80% limitations on net operating loss carryforwards for the years 2019 and 2020. The Company adopted FASB ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting of Income Taxes,” as of January 1, 2021. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The adoption of this guidance did not have a material impact on its financial statements. Stock Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718-10, “ Share-Based Payment Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing formula. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The Company’s determination of fair value using an option-pricing model is affected by the stock price as well as assumptions regarding the number of highly subjective variables. The Company estimates volatility based upon the historical stock price of the comparable companies and estimates the expected term for employee stock options using the simplified method for employees and directors and the contractual term. The risk-free rate is determined based upon the prevailing rate of United States Treasury securities with similar maturities. The Company recognizes forfeitures as they occur rather than applying a prospective forfeiture rate in advance. Common Stock Purchase Warrants The Company accounts for the common stock purchase warrants in accordance with the guidance contained in ASC 815-40, under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjusts the Warrants to fair value in respect of each reporting period. This liability is subject to re-measurement at each balance sheet date until the Warrants are exercised, and any change in fair value is recognized in the statements of operations. Earnings (Loss) Per Share The Company computes net earnings (loss) per share in accordance with ASC 260, “ Earnings per Share” Three Months Ended Nine Months Ended 2021 2020 2021 2020 Net income (loss) computation of basic and diluted net income (loss) per common share: Net income (loss) $ (9,094,707 ) $ 120,835 $ (22,570,791 ) $ (6,152,982 ) Less: Redemption of Series D Preferred Stock deemed dividend - - - (1,295,294 ) Net income (loss) attributable to common stockholders $ (9,094,707 ) $ 120,835 $ (22,570,791 ) $ (7,448,276 ) Basic and diluted net income (loss) per share: Basic and diluted net income (loss) per common share $ (0.07 ) 0.00. (0.25 ) (0.32 ) Basic and diluted weighted average common shares outstanding 122,060,087 38,414,631 90,619,171 23,154,481 Potentially dilutive securities that are not included in the calculation of diluted net loss per share because their effect is anti-dilutive are as follows as of September 30, (in common equivalent shares): 2021 2020 Warrants 42,289,317 21,925,102 Series A & B Notes - 213,105 Options and restricted stock units 203,135 197,193 Total anti-dilutive weighted average shares 42,492,452 22,335,400 No Segment Reporting The Company operates one reportable segment referred to as th e Advertising Advertising costs are expensed as incurred. Advertising expense for the three months ended September 30, 2021 and 2020 amounted to $2,618,475 and $467,982, respectively. Advertising expense for the nine months ended September 30, 2021 and 2020, amounted to $6,844,886 and $952,416, respectively. Patents Legal fees and similar costs incurred relating to patents are capitalized and are amortized over their estimated useful life once determined. Such costs amounted to $333,403 as of September 30, 2021, and are included in other assets on the accompanying consolidated balance sheet. Recent Accounting Pronouncements As an emerging growth company, the Company has elected to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Securities and Exchange Act of 1934, as amended. In February 2016, the FASB issued ASU 2016-02, “ Leases for In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (“Topic 326”)”. The ASU introduces a new accounting model, the Current Expected Credit Losses model (“CECL”), which requires earlier recognition of credit losses and additional disclosures related to credit risk. The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses at the time the financial asset is originated or acquired. ASU 2016-13 is effective for annual period beginning after December 15, 2022, including interim reporting periods within those annual reporting periods. The Company is currently evaluating this guidance to determine its impact it may have on its financial statements. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and simplifies the diluted earnings per share calculation in certain areas. The amendments in this ASU are effective for annual and interim periods beginning after December 15, 2021, although early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on its financial statements. |
FACTOR RECEIVABLES, LETTERS OF
FACTOR RECEIVABLES, LETTERS OF CREDIT PAYABLE AND LOAN PAYABLE | 9 Months Ended |
Sep. 30, 2021 | |
Factor Receivables Letters Of Credit Payable And Loan Payable | |
FACTOR RECEIVABLES, LETTERS OF CREDIT PAYABLE AND LOAN PAYABLE | NOTE 3: FACTOR RECEIVABLES, LETTERS OF CREDIT PAYABLE AND LOAN PAYABLE In April 2013, the Company entered into a financing arrangement with a third-party purchase order financing company (the “Factor”), whereby the Company assigned to the Factor selected sales orders from its customers in exchange for opening a letter of credit (“LC”) with its vendors to manufacture its products. The Company paid an initial fixed fee of 5% of the cost of products it purchased from the vendor upon opening the LC, and 1% each 30 days thereafter, after the LC is funded by the Factor until such time as the Factor receives the payment from the Company’s customers. The factoring agreement provides for full recourse against the Company for factored accounts receivable that are not collected by the Factor for any reason, and the collection of such accounts receivable is fully secured by substantially all of the receivables of the Company. The factoring advances for the LCs at September 30, 2021 and December 31, 2020 have been treated as a loan payable to third party in the accompanying balance sheets, and total outstanding accounts receivable factored, net of allowance for sales returns, discounts and rebates of $13,000 as of September 30, 2021 and December 31, 2020, were $0 and $807,648, respectively. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 4: PROPERTY AND EQUIPMENT, NET Property and equipment consists of the following: September 30, December 31, Furniture $ 738,928 $ 183,672 Computers 850,841 586,749 Production equipment 245,713 182,446 Automobile and transportation 635,542 635,542 Tooling and molds 5,407,684 1,989,366 Application development 1,760,816 93,435 Website design 765,573 507,088 Leasehold Improvements 993,197 42,249 Steelbox 882,000 - Less: accumulated depreciation (2,350,185 ) (1,153,623 ) Property and Equipment, net $ 9,930,109 $ 3,066,924 Depreciation and capitalized costs with respect thereto consists of the following: Three Months Ended Nine Months Ended 2021 2020 2021 2020 Depreciation expense $ 552,464 $ 176,691 $ 1,196,562 $ 394,322 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 5 – COMMITMENTS AND CONTINGENCIES On January 3, 2017, the Company executed a non-cancellable operating lease for its principal office with the lease commencing February 1, 2017 for a five (5) year term. The Company paid a security deposit of $29,297. The lease required the Company to pay its proportionate share of direct costs estimated to be 22.54% of the total property, a fixed monthly direct cost of $6,201 for each month during the term of the lease, and monthly rental pursuant to the lease terms. The Company entered into a lease for office space at 8669 Research Drive, in Irvine, CA, which is to replace the current corporate headquarters. The lease commenced on December 1, 2019 with no rent due until April 1, 2020. From April 1, 2020 through March 31, 2025, base rent will be due on the first of each month in the amount of $25,200 escalating annually on December 1 of each year to $29,480 beginning December 1, 2023. The Company paid an initial amount of $68,128 comprising the rent for April 2020, a security deposit and the amount due for property taxes, insurance and association fees. Future minimum lease and other commitments of the Company are as follows: For the years ending December 31, Building leases 2021 (remaining) $ 126,637 2022 343,821 2023 341,653 2024 358,085 Thereafter 89,521 $ 1,259,717 The Company recorded rent expense of $211,672 and $208,672 and $650,605 and $536,566 for the three and nine months ended September 30, 2021 and 2020, respectively. The Company recorded a slotting expense of $83,334 and $83,334 and $250,002 and $250,002 for the three and nine months ended September 30, 2021 and 2020, respectively. Employment Agreements with Officers On January 3, 2017, the Company entered into an employment agreement with its President and Chief Executive Officer for a five-year On January 3, 2017, the Company entered into an employment agreement with its Vice-President of Design and Development for a five-year On January 3, 2017, the Company entered into an employment agreement with its Chief Operating Officer and Secretary for a three-year The Company’s former Chief Financial Officer was appointed on June 14, 2019, with whom the Company entered into a verbal consulting arrangement at $10,000 per month. Effective July 2, 2020 such former Chief Financial Officer resigned from the Company. Effective July 1, 2020, the Company and the Chief Financial Officer agreed to a salary of $230,000 per annum. The employment agreements also entitle the officers to receive, among other benefits, the following compensation: (i) eligibility to receive an annual cash bonus at the sole discretion of the Board and as determined by the Compensation Committee commensurate with the policies and practices applicable to other senior executive officers of the Company; (ii) an opportunity to participate in any stock option, performance share, performance unit or other equity based long-term incentive compensation plan commensurate with the terms and conditions applicable to other senior executive officers and (iii) participation in benefit plans, practices, policies and programs provided by the Company (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent available to the Company’s other senior executive officers. Litigation Costs and Contingencies From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business. Other than as set forth below, management is currently not aware of any such legal proceedings or claims that could have, individually or in the aggregate, a material adverse effect on our business, financial condition, or operating results. In the normal course of business, the Company incurs costs to hire and retain external legal counsel to advise it on regulatory, litigation and other matters. The Company expenses these costs as the related services are received. If a loss is considered and the amount can be reasonable estimated, the Company recognizes an expense for the estimated loss. Edwin Minassian v. Michael Panosian and Toughbuilt Industries, Inc., Los Angeles Superior Court Case No. EC065533. On August 16, 2016, Plaintiff Edwin Minassian filed a complaint against Defendants ToughBuilt Industries, Inc. (the “Company”) and Michael Panosian in the Superior Court of California, County of Los Angeles, Case No. EC065533. The complaint alleges breach of oral contracts to pay Plaintiff for consulting and finder’s fees, and to hire him as an employee. The complaint further alleged claims of fraud and misrepresentation relating to an alleged payment in exchange for stock in the Company. The complaint seeks unspecified monetary damages, declaratory relief, stock in the Company, and other relief according to proof. On April 12, 2018, the Court entered judgments of default against the Company and Mr. Panosian in the amounts of $7,080 and $235,542, plus awarding Mr. Minassian a 7% ownership interest in the Company (the “Judgments”). Mr. Minassian served notice of entry of the judgments on April 17, 2018 and the Company and Mr. Panosian received notice of the entry of the default judgments on April 19, 2018. The Company and Panosian satisfied the judgments on September 14, 2018 by payment of $252,949 to Plaintiff Minassian and by issuing Plaintiff Minassian 376,367 shares of common stock of the Company. On October 18, 2018, the Company and Panosian filed a Notice of Appeal from the Order denying their motion for relief from the above-referenced default judgment. On October 1, 2019, the Second Appellate District of the California Court of Appeal issued its opinion reversing the trial court’s order denying ToughBuilt’s motion for relief from the default judgment and directing the trial court to grant ToughBuilt’s motion for relief, including allowing Toughbuilt to file an Answer and contest Minassian’s claims. The appellate court recently issued a remittitur officially transferring the matter from the appellate court back to the trial court for further proceedings consistent with its ruling, and the Company and Panosian have filed an Answer to the Complaint. The trial court has not yet set a trial date, and discovery in this case is just now beginning. The Company intends to vigorously defend the Complaint and seek to recover the compensation and stock previously paid to satisfy the now vacated default judgment. The Company believes it has a strong position, but cannot quantify the likelihood that it will prevail in the above litigation, or any likely liability or recoveries, because of the current status of the case and the unpredictability of litigation. Minassian seeks damages and stock based on a breach of an alleged oral agreement. Discovery is presently ongoing. In addition, Plaintiff Minassian is in violation of a court order for restitution and the Company is engaged in collection efforts to enforce that order. A trial date has been set for April 25, 2022. Design 1 st On November 26, 2019, Claimant Design 1 st The arbitration hearing occurred in April 2021. On July 14, 2021, the arbitrator concluded that neither party was entitled to prevail on their respective claims and rejected all counterclaims. Both parties are required to bear all fees and incurred in connection with the arbitration. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 6: STOCKHOLDERS’ EQUITY At September 30, 2021 and December 31, 2020, the Company had 200,000,000 shares of common stock, and 4,268 shares of Series C preferred stock authorized, both with a par value of $0.0001 per share. In addition, as of September 30, 2021 and December 31, 2020, the Company had 5,775 shares of Series D preferred stock, authorized, and 15 Series E Non-Convertible preferred stock, with a par value of $1,000 and $0.001 per share, respectively. Common Stock and Preferred Stock On February 24, 2020, the Company closed on the public offering of 0.445 million shares of its common stock, for gross proceeds of $912,250 based upon the overallotment option arising from the closing of its January 28, 2020 public offering. In the January 28, 2020 public offering, the Company sold 4.5 million shares of its common stock and 49.45 million warrants (each exercisable into 1/20 of a share of common stock for a total of 2.4725 million shares of common stock) from which it received gross proceeds of $9,472,250. On June 12, 2020, the Company closed on the public offering of 1.7 million shares of its common stock, for gross proceeds of $1,683,000 based upon the overallotment option arising from the closing of its June 2, 2020 public offering. In the June 2, 2020 public offering, the Company sold 19 million shares of its common stock and 20.7 million warrants from which it received gross proceeds of $19,017,000. During 2020, 1,268 shares of Series C Preferred Stock converted into 126,800 shares of the Company’s common stock and 3,563 shares of Series D Preferred Stock converted into 3,141,426 shares of the Company’s common stock. During 2020, $3,200,000 principal amount of Notes was converted into the Company’s common Stock During 2020, the Company granted 360,000 shares of common stock to consultants in consideration for services rendered. On January 19, 2021, the Company filed a prospectus supplement dated January 15, 2021 (the “ATM Prospectus Supplement”) to the shelf registration statement Form S-3 (File No. 333-251185) declared effective by the SEC on December 15, 2020 (the “First Form S-3”) for the offer and sale shares of common stock having an aggregate value of $8,721,746 from time to time through H.C. Wainwright & Co., LLC, as sales agent (“Wainwright”), pursuant to At The Market Offering Agreement, dated December 7, 2020 (the “ATM Agreement”), between the Company and Wainwright. During January 2021, the Company has raised approximately $16,200,000 through the sale of 14.9 million shares of the Company’s common stock. On February 2, 2021, the Company filed a second registration statement on Form S-3 (File No. 333-252630) (the “Second Form S-3”) containing a base prospectus covering the offering, issuance and sale by us of up to $100,000,000 of the Company’s common stock, preferred stock, warrants and units; and a sales agreement prospectus covering the offering, issuance and sale by us of up to a maximum aggregate offering price of $100,000,000 (which amount was included in the aggregate offering price set forth in the base prospectus) of the Company’s common stock that may be issued and sold under a second At The Market Offering Agreement, dated February 1, 2021, we entered into with Wainwright, as sales agent. The Second Form S-3 was declared effective by the SEC on February 8, 2021. From February 2021 to July 2021, the Company sold an aggregate of 18,826,177 shares of common stock through the Wainwright under the Second S-3 with net proceeds of $24,602,110, after deducting underwriting discounts and expense. On March 26, 2021, the Company filed with the Nevada Secretary of State a certificate of designation therein establishing the Series E Preferred Stock consisting of fifteen (15) shares, and the Company issued nine (9) shares of such preferred stock to an institutional investor pursuant to an exchange agreement, dated November 20, 2020, between the Company and the investor. On July 11, 2021, the Company entered into a Securities Purchase Agreement, dated July 11, 2021 (the “Agreement”) with several institutional and accredited investors (the “Purchasers”) pursuant to which the Company agreed to issue and sell in a registered direct offering (the “Offering”) an aggregate of 46,029,920 shares (the “Shares”) of its common stock and warrants (the “Warrants”) to purchase up to an aggregate of 23,014,960 shares of common stock at a combined offering price of $0.869 per share and accompanying warrant, for gross proceeds of approximately $40,000,000. The Warrants have an exercise price equal to $0.81 per share, and are immediately exercisable until the fifth anniversary of the date of issuance. The net proceeds to the Company from the Offering were $36,259,050, after deducting placement agent fees and expenses payable by the Company. The Offering closed on July 14, 2021. Pursuant to an engagement letter, dated July 10, 2021 (the “Engagement Letter”), with H.C. Wainwright & Co., LLC (the “Placement Agent”), the Company agreed to pay the Placement Agent a cash fee equal to 7.0% of the gross proceeds received in the Offering and a management fee equal to 0.5% of the gross proceeds received in the Offering. The Company also agreed to pay the Placement Agent $25,000 for non-accountable expenses, up to $50,000 for fees and expenses of legal counsel and other reasonable and customary out of-pocket expenses, and $15,950 for clearing fees. Also pursuant to the Engagement Letter, the Company, in connection with the Offering, issued to the Placement Agent or its designees warrants to purchase an aggregate of 2,761,795 shares of its common stock (which represents 6.0% of the Shares sold to investors in the Offering) at an exercise price equal to 125% of the offering price in the offering, or $1.08625 (the “Placement Agent Warrants”). The Placement Agent Warrants are immediately exercisable until the fifth anniversary of the commencement of sales of the offering. The Shares sold under the Agreement, the issuance of the Warrants and the Placement Agent Warrants, and the shares issuable pursuant to the Warrants and the Placement Agent Warrants (the “Warrant Shares”) were offered and sold by through a prospectus supplement included in the Company’s Second Form S-3 (as defined above). Warrants Placement Agent Warrants The Company has issued an aggregate of 24,758 warrants to the placement agents to purchase one share of its common stock per warrant at an exercise price of $120 per share for 4,758 warrants and $10 for 20,000 warrants. The warrants issued in its October 2016 Private Placement shall expire on October 17, 2021, and the warrants issued in its March 2018 Private Placement, May 2018 Private Placement and August 2018 Financing shall expire on September 4, 2023. The exercise price and number of shares of common stock or other securities issuable on exercise of such warrants are subject to customary adjustment in certain circumstances, including in the event of a stock dividend, recapitalization, reorganization, merger or consolidation of the Company. As of September 30, 2021 and December 31, 2020, 20,000 warrants issued to the placement agents at an exercise price of $10 and 4,437 at an exercise price of $120 are outstanding and are currently exercisable. Class B Warrants The holders of the Class B Warrants did not exercise any of their warrants during the nine months ended September 30, 2021. Class B Warrants have an exercise price of $120.00 per share and shall expire between October 17, 2021 and May 15, 2023. As of September 30, 2021 and December 31, 2020, the Company had 26,550 Class B Warrants issued and outstanding. Series A Warrants and Series B Warrants On January 24, 2019, the Company entered into an exchange agreement with two institutional investors pursuant to which these investors exercised Series A Warrants to purchase 42,412 shares of the Company’s common stock for total cash proceeds of $2,172,680 to the Company, net of costs of $159,958. The two investors also exchanged Series A Warrants to purchase 50,894 shares of its common stock into 50,894 shares of its common stock and received new warrants to purchase an aggregate of 933,056 shares of its common stock. These new warrants have terms substantially similar to the terms of the Company’s Series A Warrants, except that the per share exercise price of the new warrants is $36.70, and the warrants are not exercisable until July 24, 2019, the six-month anniversary of the date of issuance. Each warrant expires on the fifth anniversary of the original issuance date. As of September 30, 2021 and December 31, 2020, the Company had 519,001 Series A Warrants issued and outstanding. 2020 Offering Warrants In the January 28, 2020 public offering, the Company sold 49.45 million warrants (each exercisable into 1/20 th As of September 30, 2021, the Company had 15,367,574 2020 Offering Warrants issued and outstanding. 2021 Offering Warrants In the July 11, 2021 offering, the Company sold 23,014,960 warrants (each exercisable into 1 share of common stock) at an exercise price equal to $0.81 per share, and are immediately exercisable until the fifth anniversary of the date of issuance. In connection with the offering the Company issued to the Placement Agent or its designees warrants to purchase an aggregate of 2,761,795 shares of its common stock at an exercise price equal to 125% of the offering price in the offering, or $1.08625 (the “2021 Placement Agent Warrants”). The 2021 Placement Agent Warrants are immediately exercisable until the fifth anniversary of the commencement of sales of the offering. As of September 30, 2021, the Company had 23,014,960 and 2,761,795, 2021 Offering Warrants and 2021 Placement Agent Warrants issued and outstanding, respectively. The total fair value of such warrants amounted to $7,463,005 and $4,560,663 upon issuance, and September 30, 2021, respectively, and is included in warrant liabilities on the accompanying condensed consolidated balance sheets. Exchange As disclosed in Note 9, on November 20, 2020, the Company and the investor entered into an exchange agreement and issued a warrant to purchase up to an aggregate of 575,000 shares of the Company’s common stock for $1.00 per share which expire on August 20, 2024. As of September 30, 2021, such warrant was outstanding. Equity Incentive Plans The 2016 Equity Incentive Plan The 2016 Equity Incentive Plan (the “2016 Plan”) was adopted by the Board of Directors and approved by the shareholders on July 6, 2016. The awards per 2016 Plan may be granted through July 5, 2026 to the Company’s employees, consultants, directors and non-employee directors provided such consultants, directors and non-employee directors render good faith services not in connection with the offer and sale of securities in a capital-raising transaction. The maximum number of shares of our common stock that may be issued under the 2016 Plan is 200,000 shares, which amount will be (a) reduced by awards granted under the 2016 Plan, and (b) increased to the extent that awards granted under the 2016 Plan are forfeited, expire or are settled for cash (except as otherwise provided in the 2016 Plan). No employee will be eligible to receive more than 12,500 shares of common stock in any calendar year under the 2016 Plan pursuant to the grant of awards. On January 3, 2017, the Board of Directors of the Company approved and granted to the President/Chief Executive Officer of the Company, an option to purchase 12,500 shares of the Company’s Common Stock (“Option”) under the Company’s 2016 Plan. The Option will have an exercise price that is no less than $100.00 per share and will vest over four (4) years, with 25% of the total number of shares subject to the Option vesting on the one (1) year anniversary of the date of grant and, the remainder vesting in equal installments on the last day of each of the thirty-six (36) full calendar months thereafter. Vesting will depend on the Officer’s continued service as an employee with the Company and will be subject to the terms and conditions of the 2016 Plan and the written Stock Option Agreement governing the Option. As of December 31, 2018, the Company estimated the fair value of the options using the Black-Scholes option pricing model was $448,861 . The Company recorded compensation expense of $28,054 for the three months ended 30, 2020 and $84,161 for the nine months ended 30, 2020. The 2018 Equity Incentive Plan Effective July 1, 2018, the Board of Directors and the stockholders of the Company approved and adopted the Company’s 2018 Equity Incentive Plan (the “2018 Plan”). The 2018 Plan supplements, and does not replace, the existing 2016 Equity Incentive Plan. Awards may be granted under the 2018 Plan through September 30, 2023 to the Company’s employees, officers, consultants, and non-employee directors. The maximum number of shares of our common stock that may be issued under the 2018 Plan is 3.5 million (3,500,000) shares, which amount will be (a) reduced by awards granted under the 2018 Plan, and (b) increased to the extent that awards granted under the 2018 Plan are forfeited, expire or are settled for cash (except as otherwise provided in the 2018 Plan). Currently, no employee will be eligible to receive more than 350,000 shares of common stock (10% of authorized shares under the 2018 Plan) in any calendar year under the 2018 Plan pursuant to the grant of awards. When the Board first adopted the 2018 Plan on July 1, 2018, there were 100,000 shares authorized for issuance under the 2018 Plan. On September 12, 2018, the Board of Directors approved to increase the number of shares of common stock reserved for future issuance under the 2018 Plan from 100,000 shares to 200,000 shares. On June 9, 2019, the Board of Directors approved to increase the authorized shares under the 2018 Plan to 2 million (2,000,000) shares. On February 14, 2020, the Board of Directors approved to increase the number of shares of common stock reserved for future issuance under the 2018 plan to 3.5 million (3,500,000) shares. On September 14, 2018, 100,000 shares of common stock underlying awards under the 2018 Plan were granted to the employees and officers, 25% vesting immediately on the date of grant and 25% vesting each year thereafter on the three subsequent anniversaries of the grant date. The Company estimated the fair value of the options using the Black-Scholes option pricing model was $1,241,417. The key valuation assumptions used consist, in part, of the price of the Company’s common stock at $3.90 or $4.29 at the issuance date; a risk-free interest rate ranging of 1.9% and the expected volatility of the Company’s common stock ranging from of 40% (estimated based on the common stock of comparable public entities) On April 4, 2020, the Company granted 90,635 restricted stock units to two officers of the Company. These units have the following vesting term: 33% on January 1, 2021, 34% on January 1, 2022 and 33% on January 1, 2023. The fair value of these units as of granted date was $144,110 based upon the closing price of the Company’s stock. The Company recorded compensation expense of $69,371 and $(36,370) for the three months ended September 30, 2021 and 2020, respectively. The Company recorded compensation expense of $232,447 and $231,512 for the nine months ended September 30, 2021 and 2020, respectively As of September 30, 2021, the unrecognized compensation expense was $65,504 which will be recognized as compensation expense over 1.27 years. |
REVENUE RECOGNITION AND RESERVE
REVENUE RECOGNITION AND RESERVE FOR SALES RETURNS AND ALLOWANCES | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION AND RESERVE FOR SALES RETURNS AND ALLOWANCES | NOTE 7: REVENUE RECOGNITION AND RESERVE FOR SALES RETURNS AND ALLOWANCES The Company’s contracts with customers only include one performance obligation (i.e., sale of the Company’s products). Revenue is recognized in the gross amount at a point in time when delivery is completed and control of the promised goods is transferred to the customers. Revenue is measured as the amount of consideration the Company expects to be entitled to in exchange for those goods. The Company’s contracts do not involve financing elements as payment terms with customers are less than one year. Further, because revenue is recognized at the point in time goods are sold to customers, there are no contract asset or contract liability balances. The Company does not disclose remaining performance obligations related to contracts with durations of one year or less as allowed by the practical expedient applicable to such contracts. The Company disaggregates its revenues by major geographic region. See Note 8, Concentrations, Geographic Data, and Sales by Major Customers, for further information. The Company accounts for fees paid to Amazon for products sold through its Amazon Stores as operating expense. The Company offers various discounts, pricing concessions, and other allowances to customers, all of which are considered in determining the transaction price. Certain discounts and allowances are fixed and determinable at the time of sale and are recorded at the time of sale as a reduction to revenue. Other discounts and allowances can vary and are determined at management’s discretion (variable consideration). Specifically, the Company occasionally grants discretionary credits to facilitate markdowns and sales of slow-moving merchandise, and consequently accrues an allowance based on historic credits and management estimates. Further, the Company allows sales returns, consequently records a sales return allowance based upon historic return amounts and management estimates. These allowances (variable consideration) are estimated using the expected value method and are recorded at the time of sale as a reduction to revenue. The Company adjusts its estimate of variable consideration at least quarterly or when facts and circumstances used in the estimation process may change. The variable consideration is not constrained as the Company has sufficient history on the related estimates and does not believe there is a risk of significant revenue reversal. The Company also participates in cooperative advertising arrangements with some customers, whereby it allows a discount from invoiced product amounts in exchange for customer purchased advertising that features the Company’s products. Generally, these allowances range from 2% to 5% of gross sales and are generally based upon product purchases or specific advertising campaigns. Such allowances are accrued when the related revenue is recognized. These cooperative advertising arrangements provide a distinct benefit and fair value, and are accounted for as direct selling expenses. Sales commissions are expensed when incurred as the related revenue is recognized at a point in time and therefore, the amortization period is less than one year. As a result, these costs are recorded as direct selling expenses, as incurred. The Company has also elected to adopt the practical expedient related to shipping and handling fees which allows the Company to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as performance obligations. Therefore, shipping and handling activities are considered part of the Company’s obligation to transfer the products and therefore are recorded as direct selling expenses, as incurred During 2020, the Company incurred costs to obtain a contract. Such costs amounted to $853,412. The Company expects to recover those costs through future revenue during the period of the contract. The Company amortized these costs over one year which is the stated term of the contract. The Company’s reserve for sales returns and allowances amounted to $13,000 as of September 30, 2021 and December 31, 2020. |
CONCENTRATIONS
CONCENTRATIONS | 9 Months Ended |
Sep. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | NOTE 8: CONCENTRATIONS Concentration of Purchase Order Financing The Company used a third-party financing company for the quarters ended September 30, 2021which provided letters of credit to vendors for a fee against the purchase orders received by the Company for sale of products to its customers. The letters of credit were issued to the vendors to manufacture Company’s products pursuant to the purchase orders received by the Company. Concentration of Customers For the three and nine months ended September 30, 2021 and 2020, respectively, the Company had the following concentrations of customers: Percentage of Percentage of revenues for the revenues for the Percentage of accounts Three Months Ended Nine Months Ended receivables as of September 30, September 30, September 30, December 31, 2021 2020 2021 2020 2021 2020 Customer 1 12 % 14 % 9 % 16 % 8 % 16 % Customer 2 10 % 5 % 9 % 10 % 10 % 8 % Customer 3 15 % 11 % 16 % 15 % 9 % 6 % Customer 4 35 % 49 % 36 % 30 % 40 % 39 % Concentration of Suppliers For the three and nine months ended September 30, 2021 and 2020, respectively, the Company had the following concentrations of suppliers: Percentage of Percentage of purchases for the purchases for the Percentage of accounts Three Months Ended Nine Months Ended payable as of September 30, September 30, September 30, December 31, 2021 2020 2021 2020 2021 2020 Supplier 1 29 % 30 % 33 % 26 % 24 % 16 % Supplier 2 28 % 13 % 21 % 19 % 22 % 14 % Supplier 3 11 % 13 % 11 % 13 % 9 % 6 % Supplier 4 0 % 12 % 0 % 17 % 0 % 18 % Supplier 5 10 % 0 % 5 % 0 % 8 % 2 % Supplier 6 4 % 0 % 14 % 0 % 3 % 0 % Concentration of Credit Risk The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. The Company has not experienced any losses in such accounts through September 30, 2021 and 2020. The Company’s bank balances exceeded FDIC insured amounts at times during the nine months ended September 30, 2021 and 2020. The Company’s bank balance exceeded the FDIC insured amounts as of September 30, 2021 by approximately $31 million. Geographic Concentration For the three and nine months ended September 30, 2021 and 2020, respectively, the Company had the following geographic concentrations: Percentage of revenues for the Percentage of revenues for the Percentage of accounts Three Months Ended Nine Months Ended receivables as of September 30, September 30, September 30, December 31, 2021 2020 2021 2020 2021 2020 Australia 0 % 2 % 2 % 3 % 0 % 2 % Canada 3 % 4 % 4 % 5 % 6 % 5 % Europe 5 % 4 % 9 % 3 % 4 % 3 % United States of America 80 % 85 % 78 % 80 % 78 % 82 % Other 12 % 5 % 7 % 9 % 12 % 8 % |
SENIOR SECURED CONVERTIBLE NOTE
SENIOR SECURED CONVERTIBLE NOTES | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
SENIOR SECURED CONVERTIBLE NOTES | NOTE 9: SENIOR SECURED CONVERTIBLE NOTES On August 19, 2019, the Company entered int o During 2020, the Company received $3,000,000 in connection with the Investor Note. The Notes are senior secured obligations of the Company secured by a lien on all assets of the Company, bear no interest (unless an event default has occurred and is continuing) and mature on December 31, 2020. The Notes will be convertible at $1.00 into a fixed number of shares (the “Conversion Shares”). The Notes are convertible at the Holder’s option, in whole or in part, at any time after closing. The Conversion Price will be subject to adjustment for stock dividends, stock splits, anti-dilution and other customary adjustment events. The Company shall repay the Principal Amount of the Notes in 12 installments, with the first installment starting on February 1, 2020 (each, an “Installment Date”). Installments 1-3 shall be 1/36th of the Principal Amount, Installments 4-6 shall be 1/18th of the Principal Amount and Installments 7-12 shall be 1/8th of the Principal Amount. The repayment amount shall be payable in cash, or, subject to the satisfaction of equity conditions, at the option of the Company, in registered Common Stock or a combination of cash and registered Common Stock. However, if the 30-day volume weighted average price of the Common Stock (the “VWAP”) of the Company falls below 50% of the market price of a share of the Company’s common stock or the Company fails to satisfy certain other equity conditions, the repayment amount is payable in shares of Common Stock only unless the Investor(s) waive any applicable equity condition. If the Company elects to satisfy all or any portion of an installment in shares of Common Stock, the Company will pre-deliver such shares of Common Stock to the investor on the 23rd trading day prior to the applicable Installment Date, with a true-up of shares (if necessary) on the Installment Date. Any excess shares of Common Stock shall be applied to subsequent installments. The shares used to meet a Principal Repayment (“Installment Shares”) would be valued at a conversion price calculated as the lesser of (i) 85% of the arithmetic average of the three lowest daily VWAPs of the 20 trading days prior to the payment date or (ii) 85% of the VWAP of the trading day prior to payment date (“Installment Price”) with a floor of $0.10. All amortization payments shall be subject to the Investors’ right to (a) defer some or all of any Installment Payment to a subsequent Installment Date; and (b) at any time during an installment period, convert up to four times the installment amount at the Installment Price; provided shares received pursuant to such accelerated conversions shall be subject to a leak-out provision that solely limits sales of such shares received by the investor in such accelerated conversion (and not any other sales) to the greater of (a) $500,000 per trading day or (b) 40% of the volume traded on a given day as reported by Bloomberg LP. Upon completion of a Change of Control, the Holders may require the Company to purchase any outstanding Notes in cash at 125% of par plus accrued but unpaid interest. The Company shall have the right to redeem any and all amounts of the outstanding Note at 125% of the greater of (a) Principal Amount plus accrued but unpaid interest (if any), or (b) Conversion Value plus accrued but unpaid interest (if any) provided the Company has satisfied certain equity conditions. The Company must give the Investor(s) ninety (90) business days’ prior notice of any such redemption. Prior to all outstanding amounts under the Note being repaid in full, the Company will not create any new encumbrances on any of its or its subsidiaries’ assets without the prior written consent of the Lender, with a carve out for a working capital facility of which the details are to be determined. The Notes shall also be subject to standard events of default and remedies therefor. The Company filed a registration statement (“Effectiveness Date”) on Form S-1 (file No: 333-233655) covering the resale of the shares underlying the Series A Note, the Series B Note and Warrants which was declared effective by the SEC on October 15, 2019. In connection with the granting of the Notes, the Company shall issue detachable warrants to the Investor, exercisable in whole or in part at any time during the five years from the date of issuance, in amount equal to 50% of the conversion shares underlying the Notes and have an exercise price of $1.00 per share. To the extent the Company has a change of control or a spinoff, the warrants provide for a put for the warrants to the Company at their Black- Scholes Valuation. The value of the warrants amounted to $575,000 and was recoded as debt discount in the accompanying balance sheet. Until the 3 year anniversary of the maturity date, the investor shall have the right (but not the obligation) to participate in 50% of any subsequent equity or debt issuance. Consummation of the transaction has been subject to certain conditions precedent, including the Company agrees to procure an approval of this transaction at its annual shareholder meeting scheduled no later than 180 days after the Closing Date and agrees to procure voting agreements from principal shareholders prior to closing of the Company. On December 23, 2019, the Company entered into an exchange agreement with an institutional investor pursuant to which the investor is exchanging $5.5 million principal amount of its August 19, 2019 Series A Senior Secured Note for 5,775 shares of its Series D Preferred Stock, which was authorized by the Company’s Board of Directors on December 21, 2019. During the year ended December 31, 2020, the Company received $3,000,000 in connection with the Investor Note. Also, during the year ended December 31, 2020, $3,200,000 principal amount of Notes was converted into common stock. On November 20, 2020, the Company and the investor entered into an exchange agreement (the “Exchange Agreement”) whereas the investor exchanged the balance of $2,131,050 of outstanding Notes for the following: an aggregate cash payment of $744,972, an aggregate of 1,850,000 shares of the Company’s common stock, a warrant to purchase up to an aggregate of 575,000 shares of the Company’s common stock for $1.00 per share, and nine shares of Series E Non-Convertible Preferred Stock of the Company. The Series E Preferred Stock was issued in March 2021. In addition, the Company relinquished their note receivable of $1,480,000 owed from the investor. As a result of this transaction, the Company recorded a loss of $1,810,712. During April 2020, the Company entered into a promissory note with an approved lender in the principal amount of $399,300. The note was approved under the provisions of the Coronavirus, Aid, Relief and Economic Security Act (the “CARES Act”) and the terms of the Paycheck Protection Program of the U.S. Small Business Administration’s 7(a) Loan Program (“PPP Loan”). The Company repaid the PPP Loan in full during June 2020. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10: SUBSEQUENT EVENTS Management has evaluated subsequent events through the date which the condensed consolidated financial statements were issued noting that there were no items that would impact the accounting for events or transactions in the current period or require additional disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the valuation of accounts and factored receivables, valuation of long-lived assets, accrued liabilities, notes payable and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
Cash | Cash The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. The Company did not have any cash equivalents at September 30, 2021 and December 31, 2020. |
Accounts Receivable | Accounts Receivable Accounts receivable represent income earned from the sale of tools and accessories for which the Company has not yet received payment. Accounts receivable are recorded at the invoiced amount and adjusted for amounts management expects to collect from balances outstanding at period-end. The Company estimates the allowance for doubtful accounts based on an analysis of specific accounts and an assessment of the customer’s ability to pay, among other factors. At September 30, 2021 and December 31, 2020, no allowance for doubtful accounts was recorded. The Company accounts for the transfer of accounts receivable to a third party under a factoring type arrangement in accordance with Accounting Standards Codification (“ASC”) 860, Transfers and Servicing |
Inventory | Inventory Inventory is valued at the lower of cost or net realizable value using the first-in, first-out method. The reported net value of inventory includes finished saleable products that will be sold or used in future periods. The Company reserves for obsolete and slow-moving inventory. At September 30, 2021 and 2020, there were no reserves for obsolete and slow-moving inventory. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. The Company provides for depreciation on a straight-line basis over the estimated useful lives which are as follows: furniture 5 years, computers 3 years, production equipment 5 years, automobiles and transportation 5 years, tooling and molds 3 years, application development 3 years, website design 4 years, and steelbox 5 years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related assets when they are placed into service. The Company evaluates property and equipment for impairment periodically to determine if changes in circumstances or the occurrence of events suggest the carrying value of the asset or asset group may not be recoverable. Maintenance and repairs are charged to operations as incurred. Expenditures which substantially increase the useful lives of the related assets are capitalized. |
Long-lived Assets | Long-lived Assets In accordance with ASC 360, “ Property, Plant, and Equipment, |
Fair Value of Financial Instruments and Fair Value Measurements | Fair Value of Financial Instruments and Fair Value Measurements The Company adheres to ASC 820, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances. ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). ● Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. ● Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. ● Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The fair value of the Company’s warrant liability recorded in the Company’s financial statements was determined using a Black-Scholes valuation methodology and the quoted price of the Company’s common stock in an active market, a Level 3 measurement. Volatility was based on the actual market activity of the Company for the period in which the Company was public and it’s peer group for the remaining period. The expected life was based on the remaining contractual term of the warrants, and the risk-free interest rate was based on the implied yield available on U.S. Treasury Securities with a maturity equivalent to the warrants’ expected life. The Company calculated the estimated fair value of warrants on the date of issuance and at each subsequent reporting date using the following assumptions: For the Nine Months Ended September 30, Risk-free interest rate 0.80% - 0.98% Contractual term 4.75 – 5 years Expected volatility 56.27 % - 57.67% Level 3 Fair Value Sensitivity Warrant liability The table below provides a reconciliation of the balances for the warrant liability which is measured at fair value using significant unobservable inputs (Level 3): Balance, January 1, 2021 $ — Fair value of warrant liability at issuance (2021 Offering Warrants as defined and described in Note 6) 7,463,005 Change in the fair value of warrant liability (2,902,342 ) Balance, September 30, 2021 $ 4,560,663 |
Revenue Recognition | Revenue Recognition The Company recognizes revenues when product is delivered to the customer, and the ownership is transferred. The Company’s revenue recognition policy is based on the revenue recognition criteria established under the Financial Accounting Standards Board – Accounting Standards Codification 606 “Revenue From Contracts With Customers |
Income Taxes | Income Taxes The Company accounts for income taxes following the asset and liability method in accordance with the ASC 740 “Income Taxes.” Under such method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The Company applies the accounting guidance issued to address the accounting for uncertain tax positions. This guidance clarifies the accounting for income taxes, by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements as well as provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company classifies interest and penalty expense related to uncertain tax positions as a component of income tax expense. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years that the asset is expected to be recovered or the liability settled. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the period in which related temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in its assessment of a valuation allowance. During 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was passed, which temporarily removed 80% limitations on net operating loss carryforwards for the years 2019 and 2020. The Company adopted FASB ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting of Income Taxes,” as of January 1, 2021. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The adoption of this guidance did not have a material impact on its financial statements. |
Stock Based Compensation | Stock Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718-10, “ Share-Based Payment Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing formula. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The Company’s determination of fair value using an option-pricing model is affected by the stock price as well as assumptions regarding the number of highly subjective variables. The Company estimates volatility based upon the historical stock price of the comparable companies and estimates the expected term for employee stock options using the simplified method for employees and directors and the contractual term. The risk-free rate is determined based upon the prevailing rate of United States Treasury securities with similar maturities. The Company recognizes forfeitures as they occur rather than applying a prospective forfeiture rate in advance. |
Common Stock Purchase Warrants | Common Stock Purchase Warrants The Company accounts for the common stock purchase warrants in accordance with the guidance contained in ASC 815-40, under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjusts the Warrants to fair value in respect of each reporting period. This liability is subject to re-measurement at each balance sheet date until the Warrants are exercised, and any change in fair value is recognized in the statements of operations. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The Company computes net earnings (loss) per share in accordance with ASC 260, “ Earnings per Share” Three Months Ended Nine Months Ended 2021 2020 2021 2020 Net income (loss) computation of basic and diluted net income (loss) per common share: Net income (loss) $ (9,094,707 ) $ 120,835 $ (22,570,791 ) $ (6,152,982 ) Less: Redemption of Series D Preferred Stock deemed dividend - - - (1,295,294 ) Net income (loss) attributable to common stockholders $ (9,094,707 ) $ 120,835 $ (22,570,791 ) $ (7,448,276 ) Basic and diluted net income (loss) per share: Basic and diluted net income (loss) per common share $ (0.07 ) 0.00. (0.25 ) (0.32 ) Basic and diluted weighted average common shares outstanding 122,060,087 38,414,631 90,619,171 23,154,481 Potentially dilutive securities that are not included in the calculation of diluted net loss per share because their effect is anti-dilutive are as follows as of September 30, (in common equivalent shares): 2021 2020 Warrants 42,289,317 21,925,102 Series A & B Notes - 213,105 Options and restricted stock units 203,135 197,193 Total anti-dilutive weighted average shares 42,492,452 22,335,400 |
No Segment Reporting | No Segment Reporting The Company operates one reportable segment referred to as th e Advertising Advertising costs are expensed as incurred. Advertising expense for the three months ended September 30, 2021 and 2020 amounted to $2,618,475 and $467,982, respectively. Advertising expense for the nine months ended September 30, 2021 and 2020, amounted to $6,844,886 and $952,416, respectively. Patents Legal fees and similar costs incurred relating to patents are capitalized and are amortized over their estimated useful life once determined. Such costs amounted to $333,403 as of September 30, 2021, and are included in other assets on the accompanying consolidated balance sheet. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements As an emerging growth company, the Company has elected to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Securities and Exchange Act of 1934, as amended. In February 2016, the FASB issued ASU 2016-02, “ Leases for In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (“Topic 326”)”. The ASU introduces a new accounting model, the Current Expected Credit Losses model (“CECL”), which requires earlier recognition of credit losses and additional disclosures related to credit risk. The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses at the time the financial asset is originated or acquired. ASU 2016-13 is effective for annual period beginning after December 15, 2022, including interim reporting periods within those annual reporting periods. The Company is currently evaluating this guidance to determine its impact it may have on its financial statements. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and simplifies the diluted earnings per share calculation in certain areas. The amendments in this ASU are effective for annual and interim periods beginning after December 15, 2021, although early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on its financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SCHEDULE OF ESTIMATED FAIR VALUE OF WARRANTS | The Company calculated the estimated fair value of warrants on the date of issuance and at each subsequent reporting date using the following assumptions: For the Nine Months Ended September 30, Risk-free interest rate 0.80% - 0.98% Contractual term 4.75 – 5 years Expected volatility 56.27 % - 57.67% |
SCHEDULE OF RECONCILIATION OF BALANCES FOR WARRANT LIABILITY | The table below provides a reconciliation of the balances for the warrant liability which is measured at fair value using significant unobservable inputs (Level 3): Balance, January 1, 2021 $ — Fair value of warrant liability at issuance (2021 Offering Warrants as defined and described in Note 6) 7,463,005 Change in the fair value of warrant liability (2,902,342 ) Balance, September 30, 2021 $ 4,560,663 |
SCHEDULE OF EARNING PER SHARE | The Company computes net earnings (loss) per share in accordance with ASC 260, “ Earnings per Share” Three Months Ended Nine Months Ended 2021 2020 2021 2020 Net income (loss) computation of basic and diluted net income (loss) per common share: Net income (loss) $ (9,094,707 ) $ 120,835 $ (22,570,791 ) $ (6,152,982 ) Less: Redemption of Series D Preferred Stock deemed dividend - - - (1,295,294 ) Net income (loss) attributable to common stockholders $ (9,094,707 ) $ 120,835 $ (22,570,791 ) $ (7,448,276 ) Basic and diluted net income (loss) per share: Basic and diluted net income (loss) per common share $ (0.07 ) 0.00. (0.25 ) (0.32 ) Basic and diluted weighted average common shares outstanding 122,060,087 38,414,631 90,619,171 23,154,481 |
SCHEDULE OF POTENTIAL DILUTIVE SECURITIES | Potentially dilutive securities that are not included in the calculation of diluted net loss per share because their effect is anti-dilutive are as follows as of September 30, (in common equivalent shares): 2021 2020 Warrants 42,289,317 21,925,102 Series A & B Notes - 213,105 Options and restricted stock units 203,135 197,193 Total anti-dilutive weighted average shares 42,492,452 22,335,400 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment consists of the following: September 30, December 31, Furniture $ 738,928 $ 183,672 Computers 850,841 586,749 Production equipment 245,713 182,446 Automobile and transportation 635,542 635,542 Tooling and molds 5,407,684 1,989,366 Application development 1,760,816 93,435 Website design 765,573 507,088 Leasehold Improvements 993,197 42,249 Steelbox 882,000 - Less: accumulated depreciation (2,350,185 ) (1,153,623 ) Property and Equipment, net $ 9,930,109 $ 3,066,924 |
SCHEDULE OF DEPRECIATION AND CAPITALIZED COSTS | Depreciation and capitalized costs with respect thereto consists of the following: Three Months Ended Nine Months Ended 2021 2020 2021 2020 Depreciation expense $ 552,464 $ 176,691 $ 1,196,562 $ 394,322 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
SCHEDULE OF FUTURE MINIMUM LEASE COMMITMENTS | Future minimum lease and other commitments of the Company are as follows: For the years ending December 31, Building leases 2021 (remaining) $ 126,637 2022 343,821 2023 341,653 2024 358,085 Thereafter 89,521 $ 1,259,717 |
CONCENTRATIONS (Tables)
CONCENTRATIONS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
SCHEDULE OF CONCENTRATION RISK PERCENTAGE | Concentration of Customers For the three and nine months ended September 30, 2021 and 2020, respectively, the Company had the following concentrations of customers: Percentage of Percentage of revenues for the revenues for the Percentage of accounts Three Months Ended Nine Months Ended receivables as of September 30, September 30, September 30, December 31, 2021 2020 2021 2020 2021 2020 Customer 1 12 % 14 % 9 % 16 % 8 % 16 % Customer 2 10 % 5 % 9 % 10 % 10 % 8 % Customer 3 15 % 11 % 16 % 15 % 9 % 6 % Customer 4 35 % 49 % 36 % 30 % 40 % 39 % Concentration of Suppliers For the three and nine months ended September 30, 2021 and 2020, respectively, the Company had the following concentrations of suppliers: Percentage of Percentage of purchases for the purchases for the Percentage of accounts Three Months Ended Nine Months Ended payable as of September 30, September 30, September 30, December 31, 2021 2020 2021 2020 2021 2020 Supplier 1 29 % 30 % 33 % 26 % 24 % 16 % Supplier 2 28 % 13 % 21 % 19 % 22 % 14 % Supplier 3 11 % 13 % 11 % 13 % 9 % 6 % Supplier 4 0 % 12 % 0 % 17 % 0 % 18 % Supplier 5 10 % 0 % 5 % 0 % 8 % 2 % Supplier 6 4 % 0 % 14 % 0 % 3 % 0 % |
SCHEDULE OF GEOGRAPHICAL DISTRIBUTION OF REVENUE PERCENTAGE | Geographic Concentration For the three and nine months ended September 30, 2021 and 2020, respectively, the Company had the following geographic concentrations: Percentage of revenues for the Percentage of revenues for the Percentage of accounts Three Months Ended Nine Months Ended receivables as of September 30, September 30, September 30, December 31, 2021 2020 2021 2020 2021 2020 Australia 0 % 2 % 2 % 3 % 0 % 2 % Canada 3 % 4 % 4 % 5 % 6 % 5 % Europe 5 % 4 % 9 % 3 % 4 % 3 % United States of America 80 % 85 % 78 % 80 % 78 % 82 % Other 12 % 5 % 7 % 9 % 12 % 8 % |
NATURE OF OPERATIONS AND BASI_2
NATURE OF OPERATIONS AND BASIS OF PRESENTATION (Details Narrative) - USD ($) | Jul. 14, 2021 | Jul. 11, 2021 | Feb. 02, 2021 | Jan. 19, 2021 | Jun. 12, 2020 | Jun. 02, 2020 | Jun. 02, 2020 | Apr. 15, 2020 | Feb. 24, 2020 | Jan. 28, 2020 | Jan. 28, 2020 | Jan. 31, 2021 | Mar. 31, 2021 | Jul. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||
Reverse stock split, description | the Company effected a 1-for-10 reverse stock split (the “Reverse Split”) of its issued and outstanding common stock | ||||||||||||||||
Number of shares issued | 46,029,920 | ||||||||||||||||
Number of warrants exercisable | 23,014,960 | ||||||||||||||||
Proceeds from issuance of common stock | $ 36,259,050 | ||||||||||||||||
Proceeds from issuance of common stock | $ 77,941,089 | $ 0 | |||||||||||||||
Cash | $ 31,189,160 | $ 2,194,850 | |||||||||||||||
At The Market Offering Agreement [Member] | |||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||
Number of shares issued | 14,900,000 | 18,826,177 | |||||||||||||||
Proceeds from issuance of common stock | $ 40,000,000 | $ 8,721,746 | $ 18,826,177 | ||||||||||||||
Proceeds from issuance of common stock | $ 16,200,000 | ||||||||||||||||
Proceeds from public offering net of underwriting discounts and expenses | $ 16,242,904 | ||||||||||||||||
Second At The Market Offering Agreement [Member] | |||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||
Proceeds from issuance of common stock | $ 100,000,000 | ||||||||||||||||
Proceeds from public offering net of underwriting discounts and expenses | $ 24,602,110 | ||||||||||||||||
Common Stock [Member] | |||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||
Number of shares issued | 32,127,914 | ||||||||||||||||
Common Stock [Member] | At The Market Offering Agreement [Member] | |||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||
Number of shares issued | 46,029,920 | ||||||||||||||||
Proceeds from public offering net of underwriting discounts and expenses | $ 36,259,050 | ||||||||||||||||
Public Offering [Member] | |||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||
Number of shares issued | 1,700,000 | 445,000 | |||||||||||||||
Number of warrants exercisable | 2.4725 | 2.4725 | |||||||||||||||
Proceeds from public offering net of underwriting discounts and expenses | $ 17,185,640 | $ 8,549,470 | |||||||||||||||
Public Offering [Member] | Common Stock [Member] | |||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||
Number of shares issued | 19,000,000 | 19,000,000 | 445,000 | 4,500,000 | 4,500,000 | ||||||||||||
Proceeds from public offering net of underwriting discounts and expenses | $ 1,548,360 | $ 839,270 | |||||||||||||||
Public Offering [Member] | Warrant [Member] | |||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||
Number of shares issued | 20,700,000 | 20,700,000 | 49.45 | 49,450,000 |
SCHEDULE OF ESTIMATED FAIR VALU
SCHEDULE OF ESTIMATED FAIR VALUE OF WARRANTS (Details) | Sep. 30, 2021yr |
Minimum [Member] | Risk-free interest rate [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 0.80 |
Minimum [Member] | Contractual term [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 4.75 |
Minimum [Member] | Expected volatility [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 56.27 |
Maximum [Member] | Risk-free interest rate [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 0.98 |
Maximum [Member] | Contractual term [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 5 |
Maximum [Member] | Expected volatility [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 57.67 |
SCHEDULE OF RECONCILIATION OF B
SCHEDULE OF RECONCILIATION OF BALANCES FOR WARRANT LIABILITY (Details) - USD ($) | Aug. 19, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Change in the fair value of warrant liability | $ 575,000 | $ (2,902,342) | $ 0 | $ (2,902,342) | $ 0 |
Warrant [Member] | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Balance, January 1, 2021 | 0 | ||||
Fair value of warrant liability at issuance (2021 Offering Warrants as defined and described in Note 6) | 7,463,005 | ||||
Change in the fair value of warrant liability | (2,902,342) | ||||
Balance, September 30, 2021 | $ 4,560,663 | $ 4,560,663 |
SCHEDULE OF EARNING PER SHARE (
SCHEDULE OF EARNING PER SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Oct. 30, 2020 | Sep. 30, 2020 | |
Accounting Policies [Abstract] | |||||||||
Net income (loss) | $ (9,094,707) | $ (7,422,426) | $ (6,053,659) | $ 120,835 | $ (2,519,158) | $ (3,754,659) | $ (22,570,791) | $ (6,152,982) | $ (6,152,982) |
Less: Redemption of Series D Preferred Stock deemed dividend | 0 | 0 | 0 | (1,295,294) | (1,295,294) | ||||
Net income (loss) attributable to common stockholders | $ (9,094,707) | $ 120,835 | $ (22,570,791) | $ (7,448,276) | $ (7,448,276) | ||||
Basic and diluted net income (loss) per common share | $ (0.07) | $ 0 | $ (0.25) | $ (0.32) | $ (0.32) | ||||
Basic and diluted weighted average common shares outstanding | 122,060,087 | 38,414,631 | 90,619,171 | 23,154,481 | 23,154,481 |
SCHEDULE OF POTENTIAL DILUTIVE
SCHEDULE OF POTENTIAL DILUTIVE SECURITIES (Details) - shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 42,492,452 | 22,335,400 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 42,289,317 | 21,925,102 |
Series A and Series B Note [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 0 | 213,105 |
Options and Restricted Stock Units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive weighted average shares | 203,135 | 197,193 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | Jul. 11, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)SEGMENT | Oct. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) |
Property, Plant and Equipment [Line Items] | ||||||||||||
Cash equivalents | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |||
Allowance for doubtful accounts | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||
Allowances for sales discount | 13,000 | 13,000 | 13,000 | 13,000 | 13,000 | 13,000 | 13,000 | 13,000 | 13,000 | |||
Inventory reserves for obsolete | 0 | 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |||
Impairment loss | $ 0 | $ 0 | ||||||||||
Number of reportable segment | SEGMENT | 1 | |||||||||||
Advertising expenses | $ 2,618,475 | $ 467,982 | $ 6,844,886 | $ 952,416 | ||||||||
Legal fees | $ 50,000 | |||||||||||
Furniture and Fixtures [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Estimated useful life of property plant and equipment | 5 years | |||||||||||
Computer Equipment [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Estimated useful life of property plant and equipment | 3 years | |||||||||||
Product Equipment Member [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Estimated useful life of property plant and equipment | 5 years | |||||||||||
Transportation Equipment [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Estimated useful life of property plant and equipment | 5 years | |||||||||||
Tools, Dies and Molds [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Estimated useful life of property plant and equipment | 3 years | |||||||||||
Software Development [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Estimated useful life of property plant and equipment | 3 years | |||||||||||
Web Design [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Estimated useful life of property plant and equipment | 4 years | |||||||||||
Steel Box Member [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Estimated useful life of property plant and equipment | 5 years | |||||||||||
Patents [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Legal fees | $ 333,403 | |||||||||||
Minimum [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Estimated useful life of property plant and equipment | 3 years |
FACTOR RECEIVABLES, LETTERS O_2
FACTOR RECEIVABLES, LETTERS OF CREDIT PAYABLE AND LOAN PAYABLE (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Factor Receivables Letters Of Credit Payable And Loan Payable | ||
Fixed fee description | The Company paid an initial fixed fee of 5% of the cost of products it purchased from the vendor upon opening the LC, and 1% each 30 days thereafter, after the LC is funded by the Factor until such time as the Factor receives the payment from the Company’s customers. | |
Factor receivable allowance | $ 13,000 | $ 13,000 |
Factor receivable | $ 0 | $ 807,648 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (2,350,185) | $ (1,153,623) |
Property and Equipment, net | 9,930,109 | 3,066,924 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 738,928 | 183,672 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 850,841 | 586,749 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 245,713 | 182,446 |
Automobile and Transportation [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 635,542 | 635,542 |
Tooling And Molds [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 5,407,684 | 1,989,366 |
Software and Software Development Costs [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 1,760,816 | 93,435 |
Website Design [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 765,573 | 507,088 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 993,197 | 42,249 |
Steel Box [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | $ 882,000 |
SCHEDULE OF DEPRECIATION AND CA
SCHEDULE OF DEPRECIATION AND CAPITALIZED COSTS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 552,464 | $ 176,691 | $ 1,196,562 | $ 394,322 |
SCHEDULE OF FUTURE MINIMUM LEAS
SCHEDULE OF FUTURE MINIMUM LEASE COMMITMENTS (Details) | Dec. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 (remaining) | $ 126,637 |
2022 | 343,821 |
2023 | 341,653 |
2024 | 358,085 |
Thereafter | 89,521 |
Total | $ 1,259,717 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Jul. 11, 2021 | Jul. 02, 2020 | Nov. 26, 2019 | Jun. 14, 2019 | Sep. 14, 2018 | Apr. 12, 2018 | Jan. 03, 2017 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Apr. 30, 2020 |
Loss Contingencies [Line Items] | |||||||||||||
Operating lease term | 5 years | ||||||||||||
Security deposit | $ 29,297 | ||||||||||||
Direct costs estimated percentage | 22.54% | ||||||||||||
Direct cost lease per month | $ 6,201 | ||||||||||||
Lease description | The lease commenced on December 1, 2019 with no rent due until April 1, 2020. From April 1, 2020 through March 31, 2025, base rent will be due on the first of each month in the amount of $25,200 escalating annually on December 1 of each year to $29,480 beginning December 1, 2023. The Company paid an initial amount of $68,128 comprising the rent for April 2020 | ||||||||||||
Operating lease rental expense | $ 211,672 | $ 208,672 | $ 650,605 | $ 536,566 | |||||||||
Slotting expense | $ 83,334 | $ 250,002 | $ 83,334 | $ 250,002 | |||||||||
Number of shares issued | 46,029,920 | ||||||||||||
American Arbitration Association [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Loss contingency, damages sought, value | $ 169,094 | ||||||||||||
American Arbitration Association [Member] | Cross-Demand [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Loss contingency, damages sought, value | $ 394,956 | ||||||||||||
Chief Financial Officer [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Annual base salary | $ 230,000 | ||||||||||||
Michael Panosian [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Loss contingency, damages sought, value | $ 7,080 | ||||||||||||
Edwin Minassian [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Loss contingency, damages sought, value | $ 235,542 | ||||||||||||
Ownership percentage | 7.00% | ||||||||||||
Loss contingency, damages awarded, value | $ 252,949 | ||||||||||||
Number of shares issued | 376,367 | ||||||||||||
Paycheck Protection Program [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Initial rent paid | $ 68,128 | ||||||||||||
Employment Agreement [Member] | President/Chief Executive Officer [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Term of agreement | 5 years | ||||||||||||
Sign-on-bonus | $ 50,000 | ||||||||||||
Annual base salary | $ 350,000 | ||||||||||||
Increase percentage of base salary | 10.00% | ||||||||||||
Stock option to purchase shares of common stock | 125,000 | ||||||||||||
Stock option exercise price per share | $ 10 | ||||||||||||
Employment Agreement [Member] | Vice-President of Design and Development [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Term of agreement | 5 years | ||||||||||||
Sign-on-bonus | $ 35,000 | ||||||||||||
Annual base salary | $ 250,000 | ||||||||||||
Increase percentage of base salary | 10.00% | ||||||||||||
Employment Agreement [Member] | Chief Operating Officer and Secretary [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Term of agreement | 3 years | ||||||||||||
Annual base salary | $ 180,000 | ||||||||||||
Increase percentage of base salary | 10.00% | ||||||||||||
Verbal Consulting Arrangement [Member] | Chief Financial Officer [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Annual base salary | $ 10,000 | ||||||||||||
April 1, 2020 through March 31, 2025 [Member] | Minimum [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Operating lease rental expense | $ 25,200 | ||||||||||||
April 1, 2020 through March 31, 2025 [Member] | Maximum [Member] | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Operating lease rental expense | $ 29,480 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | Jul. 14, 2021 | Jul. 11, 2021 | Jul. 11, 2021 | Mar. 26, 2021 | Feb. 02, 2021 | Jan. 19, 2021 | Jun. 12, 2020 | Jun. 02, 2020 | Jun. 02, 2020 | Apr. 04, 2020 | Feb. 24, 2020 | Jan. 28, 2020 | Jan. 28, 2020 | Jan. 24, 2019 | Sep. 14, 2018 | Jul. 02, 2018 | Jan. 03, 2017 | Jan. 31, 2021 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Jul. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Nov. 20, 2020 | Dec. 21, 2019 | Aug. 19, 2019 | Jun. 09, 2019 | Dec. 31, 2018 | Sep. 12, 2018 |
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | ||||||||||||||||||||||||||||||
Preferred stock, shares authorized | 4,268 | 4,268 | 4,268 | ||||||||||||||||||||||||||||||
Preferred stock par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||||||||||||||||
Number of shares issued | 46,029,920 | ||||||||||||||||||||||||||||||||
Stock issued during the period, value | $ 39,074,390 | ||||||||||||||||||||||||||||||||
Proceeds from issuance of stock | $ 36,259,050 | ||||||||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ 77,941,089 | $ 0 | |||||||||||||||||||||||||||||||
Number of warrants issued | 20,000 | 20,000 | 20,000 | ||||||||||||||||||||||||||||||
Exercise price of warrants | $ 0.81 | $ 0.81 | |||||||||||||||||||||||||||||||
Warrants to purchase common stock | 23,014,960 | 23,014,960 | |||||||||||||||||||||||||||||||
Proceeds from warrants exercise | $ 5,412,540 | 0 | |||||||||||||||||||||||||||||||
Compensation expense | 232,447 | 315,673 | |||||||||||||||||||||||||||||||
Warrant offering price | $ 0.869 | $ 0.869 | $ 1 | ||||||||||||||||||||||||||||||
Cash fee equal to gross proceeds | 7.00% | 7.00% | |||||||||||||||||||||||||||||||
Management fee equal to gross proceeds | 0.50% | 0.50% | |||||||||||||||||||||||||||||||
Placement agent expenses | $ 25,000 | ||||||||||||||||||||||||||||||||
Legal fee | 50,000 | ||||||||||||||||||||||||||||||||
Clearing fee | $ 15,950 | ||||||||||||||||||||||||||||||||
Description for market capitalization | common stock (which represents 6.0% of the Shares sold to investors in the Offering) at an exercise price equal to 125% of the offering price in the offering, or $1.08625 (the “Placement Agent Warrants”). The Placement Agent Warrants are immediately exercisable until the fifth anniversary of the commencement of sales of the offering. | ||||||||||||||||||||||||||||||||
Offering price | $ 1.08625 | $ 1.08625 | |||||||||||||||||||||||||||||||
2021 Offering Warrants [Member] | Warrant [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Financial liabilities at fair value | $ 7,463,005 | 7,463,005 | |||||||||||||||||||||||||||||||
Placement Agent Warrants [Member] | Warrant [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Financial liabilities at fair value | 4,560,663 | 4,560,663 | |||||||||||||||||||||||||||||||
2016 Equity Incentive Plan [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Unrecognized compensation expense | 0 | 0 | |||||||||||||||||||||||||||||||
2018 Equity Incentive Plan [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Fair value of options | $ 448,861 | ||||||||||||||||||||||||||||||||
Compensation expense | $ 69,371 | $ (36,370) | 232,447 | 231,512 | |||||||||||||||||||||||||||||
Risk-free interest rate | 1.90% | ||||||||||||||||||||||||||||||||
Volatility rate | 40.00% | ||||||||||||||||||||||||||||||||
Unrecognized compensation expense | $ 65,504 | $ 65,504 | |||||||||||||||||||||||||||||||
Compensation expense recognition period | 1 year 3 months 7 days | ||||||||||||||||||||||||||||||||
2018 Equity Incentive Plan [Member] | January 1, 2021 [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Restricted stock units vesting term percentage | 33.00% | ||||||||||||||||||||||||||||||||
2018 Equity Incentive Plan [Member] | January 1, 2022 [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Restricted stock units vesting term percentage | 34.00% | ||||||||||||||||||||||||||||||||
2018 Equity Incentive Plan [Member] | January 1, 2023 [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Restricted stock units vesting term percentage | 33.00% | ||||||||||||||||||||||||||||||||
2018 Equity Incentive Plan [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Share price | $ 4.29 | $ 4.29 | |||||||||||||||||||||||||||||||
2018 Equity Incentive Plan [Member] | Minimum [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Share price | 3.90 | $ 3.90 | |||||||||||||||||||||||||||||||
At The Market Offering Agreement [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of shares issued | 14,900,000 | 18,826,177 | |||||||||||||||||||||||||||||||
Proceeds from issuance of stock | $ 40,000,000 | $ 8,721,746 | $ 18,826,177 | ||||||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ 16,200,000 | ||||||||||||||||||||||||||||||||
Second At The Market Offering Agreement [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Proceeds from issuance of stock | $ 100,000,000 | ||||||||||||||||||||||||||||||||
Offering price | $ 100,000,000 | ||||||||||||||||||||||||||||||||
Proceeds from issuance of common stock net of underwriting discounts and expenses | $ 24,602,110 | ||||||||||||||||||||||||||||||||
Exchange Agreement [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Exercise price of warrants | $ 1 | ||||||||||||||||||||||||||||||||
Warrants expiration date | Aug. 20, 2024 | ||||||||||||||||||||||||||||||||
Warrants to purchase common stock | 575,000 | ||||||||||||||||||||||||||||||||
Engagement Letter [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Warrants to purchase common stock | 2,761,795 | 2,761,795 | |||||||||||||||||||||||||||||||
Consultant [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Stock issued during period for services, shares | 360,000 | ||||||||||||||||||||||||||||||||
Board of Directors [Member] | 2016 Equity Incentive Plan [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Maximum number of shares eligible to receive by employees | 12,500 | ||||||||||||||||||||||||||||||||
Number of options to purchase common stock | 12,500 | ||||||||||||||||||||||||||||||||
Exercise price of options | $ 100 | ||||||||||||||||||||||||||||||||
Options vesting term | 4 years | ||||||||||||||||||||||||||||||||
Percentage of vesting of options | 25.00% | ||||||||||||||||||||||||||||||||
Compensation expense | $ 28,054 | $ 84,161 | |||||||||||||||||||||||||||||||
Share price | $ 3.060 | $ 3.060 | |||||||||||||||||||||||||||||||
Risk-free interest rate | 1.72% | ||||||||||||||||||||||||||||||||
Volatility rate | 315.83% | ||||||||||||||||||||||||||||||||
Board of Directors [Member] | 2016 Equity Incentive Plan [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of shares issued | 200,000 | ||||||||||||||||||||||||||||||||
Board of Directors [Member] | 2018 Equity Incentive Plan [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Eligible to receive common stock shares description | no employee will be eligible to receive more than 350,000 shares of common stock (10% of authorized shares under the 2018 Plan) in any calendar year under the 2018 Plan pursuant to the grant of awards. | ||||||||||||||||||||||||||||||||
Common stock reserved for future issuance | 100,000 | ||||||||||||||||||||||||||||||||
Board of Directors [Member] | 2018 Equity Incentive Plan [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of shares issued | 3,500,000 | ||||||||||||||||||||||||||||||||
Number of shares employee eligible to receive | 350,000 | ||||||||||||||||||||||||||||||||
Percentage of shares employee eligible to receive | 10.00% | ||||||||||||||||||||||||||||||||
Common stock reserved for future issuance | 2,000,000 | 200,000 | |||||||||||||||||||||||||||||||
Board of Directors [Member] | 2018 Equity Incentive Plan [Member] | Minimum [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Common stock reserved for future issuance | 100,000 | ||||||||||||||||||||||||||||||||
Employees and Officers [Member] | 2018 Equity Incentive Plan [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of options to purchase common stock | 100,000 | ||||||||||||||||||||||||||||||||
Percentage of vesting of options | 25.00% | ||||||||||||||||||||||||||||||||
Fair value of options | $ 1,241,417 | ||||||||||||||||||||||||||||||||
Employees and Officers [Member] | 2018 Equity Incentive Plan [Member] | Anniversaries of the Grant Date [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Percentage of vesting of options | 25.00% | ||||||||||||||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of shares issued | 32,127,914 | ||||||||||||||||||||||||||||||||
Stock issued during the period, value | $ 3,213 | ||||||||||||||||||||||||||||||||
Conversion of common stock, shares | 126,800 | ||||||||||||||||||||||||||||||||
Debt conversion, converted instrument, shares issued | 3,200,000 | ||||||||||||||||||||||||||||||||
Stock issued during period for services, shares | 150,000 | 360,000 | |||||||||||||||||||||||||||||||
Common Stock [Member] | At The Market Offering Agreement [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of shares issued | 46,029,920 | ||||||||||||||||||||||||||||||||
Warrant [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Proceeds from warrants exercise | $ 40,000,000 | ||||||||||||||||||||||||||||||||
Placement Agent Warrants [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of warrants issued | 24,758 | 24,758 | 4,437 | ||||||||||||||||||||||||||||||
Exercise price of warrants | $ 10 | $ 10 | $ 120 | ||||||||||||||||||||||||||||||
Placement Agent Warrants One [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of warrants issued | 4,758 | 4,758 | |||||||||||||||||||||||||||||||
Exercise price of warrants | $ 120 | $ 120 | |||||||||||||||||||||||||||||||
Placement Agent Warrants Two [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of warrants issued | 20,000 | 20,000 | |||||||||||||||||||||||||||||||
Exercise price of warrants | $ 10 | $ 10 | |||||||||||||||||||||||||||||||
Class B Warrants [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of warrants issued | 26,550 | 26,550 | 26,550 | ||||||||||||||||||||||||||||||
Exercise price of warrants | $ 120 | $ 120 | |||||||||||||||||||||||||||||||
Number of warrants outstanding | 26,550 | 26,550 | 26,550 | ||||||||||||||||||||||||||||||
Series A Warrants and Series B Warrants [Member] | Investors [Member] | Exchange Agreement [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Warrants to purchase common stock | 42,412 | ||||||||||||||||||||||||||||||||
Proceeds from warrants exercise | $ 2,172,680 | ||||||||||||||||||||||||||||||||
Stock issuance cost | $ 159,958 | ||||||||||||||||||||||||||||||||
Series A Warrants and Series B Warrants One [Member] | Investors [Member] | Exchange Agreement [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Warrants to purchase common stock | 50,894 | ||||||||||||||||||||||||||||||||
Number of shares issued for exercise of warrants | 50,894 | ||||||||||||||||||||||||||||||||
Series A Warrants [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of warrants issued | 519,001 | 519,001 | 519,001 | ||||||||||||||||||||||||||||||
Exercise price of warrants | $ 36.70 | ||||||||||||||||||||||||||||||||
Number of warrants outstanding | 519,001 | 519,001 | 519,001 | ||||||||||||||||||||||||||||||
Series A Warrant [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Warrants exercisable shares, description | Each warrant expires on the fifth anniversary of the original issuance date. | ||||||||||||||||||||||||||||||||
2020 Offering Warrants [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of warrants issued | 15,367,574 | 15,367,574 | |||||||||||||||||||||||||||||||
Number of warrants outstanding | 15,367,574 | 15,367,574 | |||||||||||||||||||||||||||||||
Warrants exercisable shares, description | the Company sold 20.7 million warrants (each exercisable into 1 share of common stock for a total of 20.7 million shares of common stock.) | the Company sold 49.45 million warrants (each exercisable into 1/20th of a share of common stock for a total of 2.4725 million shares of common stock).In the June 2, 2020 public offering, the Company sold 20.7 million warrants (each exercisable into 1 share of common stock for a total of 20.7 million shares of common stock.) | |||||||||||||||||||||||||||||||
Number of warrants sold | 20.7 | 49,450,000 | |||||||||||||||||||||||||||||||
Number of warrants converted to common stock | 5,412,540 | ||||||||||||||||||||||||||||||||
Restricted Stock Units [Member] | 2018 Equity Incentive Plan [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of options to purchase common stock | 144,110 | ||||||||||||||||||||||||||||||||
Number of restricted stock units granted | 90,635 | ||||||||||||||||||||||||||||||||
2021 Offering Warrants [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of warrants issued | 23,014,960 | 23,014,960 | |||||||||||||||||||||||||||||||
Exercise price of warrants | $ 1.08625 | $ 1.08625 | |||||||||||||||||||||||||||||||
Number of warrants outstanding | 23,014,960 | 23,014,960 | |||||||||||||||||||||||||||||||
Warrants to purchase common stock | 1 | 1 | |||||||||||||||||||||||||||||||
Number of warrants sold | 23,014,960 | ||||||||||||||||||||||||||||||||
Number of warrants converted to common stock | 2,761,795 | ||||||||||||||||||||||||||||||||
Percentage of exercise price over offering price | 125.00% | 125.00% | |||||||||||||||||||||||||||||||
2021 Placement Agent Warrants [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of warrants issued | 2,761,795 | 2,761,795 | |||||||||||||||||||||||||||||||
Number of warrants outstanding | 2,761,795 | 2,761,795 | |||||||||||||||||||||||||||||||
Public Offering [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of shares issued | 1,700,000 | 445,000 | |||||||||||||||||||||||||||||||
Proceeds from initial public offering | $ 1,683,000 | $ 912,250 | |||||||||||||||||||||||||||||||
Number of shares exercisable for warrants | 2,472,500 | ||||||||||||||||||||||||||||||||
Stock issued during the period, value | $ 9,472,250 | ||||||||||||||||||||||||||||||||
Warrants to purchase common stock | 2.4725 | 2.4725 | |||||||||||||||||||||||||||||||
Public Offering [Member] | Common Stock [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of shares issued | 19,000,000 | 19,000,000 | 445,000 | 4,500,000 | 4,500,000 | ||||||||||||||||||||||||||||
Public Offering [Member] | Warrant [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of shares issued | 20,700,000 | 20,700,000 | 49.45 | 49,450,000 | |||||||||||||||||||||||||||||
Stock issued during the period, value | $ 19,017,000 | ||||||||||||||||||||||||||||||||
October 2016 Private Placement [Member] | Placement Agent Warrants [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Warrants expiration date | Oct. 17, 2021 | Oct. 17, 2021 | |||||||||||||||||||||||||||||||
August 2018 Financing [Member] | Placement Agent Warrants [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Warrants expiration date | Sep. 4, 2023 | Sep. 4, 2023 | |||||||||||||||||||||||||||||||
Series C Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Preferred stock, shares authorized | 4,268 | 4,268 | 4,268 | ||||||||||||||||||||||||||||||
Preferred stock par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||||||||||||||||
Series C Preferred Stock [Member] | Common Stock [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of shares issued | 126,800 | ||||||||||||||||||||||||||||||||
Conversion of common stock, shares | 1,268 | ||||||||||||||||||||||||||||||||
Series D Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Preferred stock, shares authorized | 5,775 | 5,775 | 5,775 | ||||||||||||||||||||||||||||||
Preferred stock par value | $ 1,000 | $ 1,000 | $ 1,000 | ||||||||||||||||||||||||||||||
Series D Preferred Stock [Member] | Board of Directors [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Preferred stock, shares authorized | 5,775 | ||||||||||||||||||||||||||||||||
Series D Preferred Stock [Member] | Common Stock [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of shares issued | 3,141,426 | ||||||||||||||||||||||||||||||||
Conversion of common stock, shares | 3,563 | ||||||||||||||||||||||||||||||||
Series E Non Convertible Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Preferred stock, shares authorized | 15 | 15 | 15 | ||||||||||||||||||||||||||||||
Preferred stock par value | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||||||||
Stock issued during the period, value | $ 1,000,000 | ||||||||||||||||||||||||||||||||
Series E Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Preferred stock, shares authorized | 15 | 15 | 15 | ||||||||||||||||||||||||||||||
Preferred stock par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||||||||||||||||
Series E Preferred Stock [Member] | Institutional Investor [Member] | |||||||||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||||||||
Number of shares issued | 9 |
REVENUE RECOGNITION AND RESER_2
REVENUE RECOGNITION AND RESERVE FOR SALES RETURNS AND ALLOWANCES (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Ceded Credit Risk [Line Items] | ||
Capitalized contracts costs incurred | $ 853,412 | |
Revenue recognition reserve for sales returns and allowances | $ 13,000 | $ 13,000 |
Revenue Benchmark [Member] | Minimum [Member] | Customer Concentration Risk [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration risk, percentage | 2.00% | |
Revenue Benchmark [Member] | Maximum [Member] | Customer Concentration Risk [Member] | ||
Ceded Credit Risk [Line Items] | ||
Concentration risk, percentage | 5.00% |
SCHEDULE OF CONCENTRATION RISK
SCHEDULE OF CONCENTRATION RISK PERCENTAGE (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer One [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 12.00% | 14.00% | 9.00% | 16.00% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 10.00% | 5.00% | 9.00% | 10.00% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Three [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 15.00% | 11.00% | 16.00% | 15.00% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Four [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 35.00% | 49.00% | 36.00% | 30.00% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer One [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 8.00% | 16.00% | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 10.00% | 8.00% | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Three [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 9.00% | 6.00% | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Four [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 40.00% | 39.00% | |||
Purchase [Member] | Supplier Concentration Risk [Member] | Supplier 1 [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 29.00% | 30.00% | 33.00% | 26.00% | |
Purchase [Member] | Supplier Concentration Risk [Member] | Supplier 2 [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 28.00% | 13.00% | 21.00% | 19.00% | |
Purchase [Member] | Supplier Concentration Risk [Member] | Supplier 3 [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 11.00% | 13.00% | 11.00% | 13.00% | |
Purchase [Member] | Supplier Concentration Risk [Member] | Supplier 4 [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 0.00% | 12.00% | 0.00% | 17.00% | |
Purchase [Member] | Supplier Concentration Risk [Member] | Supplier 5 [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 10.00% | 0.00% | 5.00% | 0.00% | |
Purchase [Member] | Supplier Concentration Risk [Member] | Supplier 6 [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 4.00% | 0.00% | 14.00% | 0.00% | |
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Supplier 1 [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 24.00% | 16.00% | |||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Supplier 2 [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 22.00% | 14.00% | |||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Supplier 3 [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 9.00% | 6.00% | |||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Supplier 4 [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 0.00% | 18.00% | |||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Supplier 5 [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 8.00% | 2.00% | |||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | Supplier 6 [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 3.00% | 0.00% |
SCHEDULE OF GEOGRAPHICAL DISTRI
SCHEDULE OF GEOGRAPHICAL DISTRIBUTION OF REVENUE PERCENTAGE (Details) - Geographic Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
AUSTRALIA | Revenue Benchmark [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 0.00% | 2.00% | 2.00% | 3.00% | |
AUSTRALIA | Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 0.00% | 2.00% | |||
CANADA | Revenue Benchmark [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 3.00% | 4.00% | 4.00% | 5.00% | |
CANADA | Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 6.00% | 5.00% | |||
Europe [Member] | Revenue Benchmark [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 5.00% | 4.00% | 9.00% | 3.00% | |
Europe [Member] | Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 4.00% | 3.00% | |||
North America [Member] | Revenue Benchmark [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 80.00% | 85.00% | 78.00% | 80.00% | |
North America [Member] | Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 78.00% | 82.00% | |||
Other [Member] | Revenue Benchmark [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 12.00% | 5.00% | 7.00% | 9.00% | |
Other [Member] | Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 12.00% | 8.00% |
CONCENTRATIONS (Details Narrati
CONCENTRATIONS (Details Narrative) $ in Millions | Sep. 30, 2021USD ($) |
Risks and Uncertainties [Abstract] | |
FDIC insured amounts | $ 31 |
SENIOR SECURED CONVERTIBLE NO_2
SENIOR SECURED CONVERTIBLE NOTES (Details Narrative) | Jul. 11, 2021$ / sharesshares | Nov. 20, 2020USD ($)$ / sharesshares | Aug. 19, 2019USD ($)Integer$ / shares | Sep. 30, 2021USD ($)shares | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)shares | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)shares | Apr. 30, 2020USD ($) | Dec. 23, 2019USD ($) | Dec. 21, 2019shares |
Short-term Debt [Line Items] | |||||||||||
Description for market capitalization | common stock (which represents 6.0% of the Shares sold to investors in the Offering) at an exercise price equal to 125% of the offering price in the offering, or $1.08625 (the “Placement Agent Warrants”). The Placement Agent Warrants are immediately exercisable until the fifth anniversary of the commencement of sales of the offering. | ||||||||||
Promissory note payable date | Dec. 31, 2020 | ||||||||||
Debt installment, description | The Company shall repay the Principal Amount of the Notes in 12 installments, with the first installment starting on February 1, 2020 (each, an “Installment Date”). Installments 1-3 shall be 1/36th of the Principal Amount, Installments 4-6 shall be 1/18th of the Principal Amount and Installments 7-12 shall be 1/8th of the Principal Amount. The repayment amount shall be payable in cash, or, subject to the satisfaction of equity conditions, at the option of the Company, in registered Common Stock or a combination of cash and registered Common Stock. | ||||||||||
Debt market price rate | 50.00% | ||||||||||
Conversion price, description | The shares used to meet a Principal Repayment (“Installment Shares”) would be valued at a conversion price calculated as the lesser of (i) 85% of the arithmetic average of the three lowest daily VWAPs of the 20 trading days prior to the payment date or (ii) 85% of the VWAP of the trading day prior to payment date (“Installment Price”) with a floor of $0.10. | ||||||||||
Debt instrument trading days | 20 | ||||||||||
Debt instrument, convertible percentage | 85.00% | ||||||||||
Accelerated conversion shares | Integer | 500,000 | ||||||||||
Percentage to purchase outstanding notes in cash | 125.00% | ||||||||||
Warrants conversion price percentage | 50.00% | ||||||||||
Debt instrument conversion price | $ / shares | $ 0.869 | $ 1 | |||||||||
Fair value of warrant liability | $ 575,000 | $ (2,902,342) | $ 0 | $ (2,902,342) | $ 0 | ||||||
Debt issuance, description | Until the 3 year anniversary of the maturity date, the investor shall have the right (but not the obligation) to participate in 50% of any subsequent equity or debt issuance. | ||||||||||
Preferred stock, shares authorized | shares | 4,268 | 4,268 | 4,268 | ||||||||
Number of warrant issued shares | shares | 23,014,960 | ||||||||||
Warrants exercise price | $ / shares | $ 0.81 | ||||||||||
Common Stock [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Debt conversion, converted instrument | $ 3,200,000 | ||||||||||
Debt conversion, converted instrument, shares issued | shares | 3,200,000 | ||||||||||
Series D Preferred Stock [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Preferred stock, shares authorized | shares | 5,775 | 5,775 | 5,775 | ||||||||
Investor [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Debt installment, description | All amortization payments shall be subject to the Investors’ right to (a) defer some or all of any Installment Payment to a subsequent Installment Date; and (b) at any time during an installment period, convert up to four times the installment amount at the Installment Price; provided shares received pursuant to such accelerated conversions shall be subject to a leak-out provision that solely limits sales of such shares received by the investor in such accelerated conversion (and not any other sales) to the greater of (a) $500,000 per trading day or (b) 40% of the volume traded on a given day as reported by Bloomberg LP. | ||||||||||
Debt market price rate | 40.00% | ||||||||||
Investor [Member] | Series A Note [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Promissory note face amount | $ 6,720,000 | ||||||||||
Payment of promissory note | $ 5,000,000 | ||||||||||
Investor [Member] | Notes [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Original issue discount, percentage | 15.00% | ||||||||||
Promissory note face amount | $ 4,780,000 | ||||||||||
Payment of promissory note | 4,780,000 | ||||||||||
Company received amount in connection with note | $ 3,000,000 | ||||||||||
Board of Directors [Member] | Series D Preferred Stock [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Preferred stock, shares authorized | shares | 5,775 | ||||||||||
Securities Purchase Agreement [Member] | Institutional Investor [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Cash proceeds on the promissory note | $ 11,500,000 | ||||||||||
Original issue discount, percentage | 15.00% | ||||||||||
Description for market capitalization | The Investor Note is subject to optional prepayment at any time at the option of the investor and mandatory prepayment, at the Company’s option, subject to certain equity conditions, at any time 45 Trading Days after the effectiveness of a resale registration statement (or otherwise the applicability of Rule 144 promulgated under the Securities Act of 1933, as amended). Notwithstanding the foregoing, the Company may not effect a mandatory prepayment if the shares underlying the Series A Note and the portion of the Series B Note that has become unrestricted exceeds 35% of the market capitalization of the Company. | ||||||||||
Exchange Agreement [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Number of warrant issued shares | shares | 575,000 | ||||||||||
Warrants exercise price | $ / shares | $ 1 | ||||||||||
Exchange Agreement [Member] | Investor [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Promissory note face amount | $ 5,500,000 | ||||||||||
Debt conversion, converted instrument | $ 2,131,050 | ||||||||||
Repayments of debt | $ 744,972 | ||||||||||
Debt conversion, converted instrument, shares issued | shares | 1,850,000 | ||||||||||
Number of warrant issued shares | shares | 575,000 | ||||||||||
Warrants exercise price | $ / shares | $ 1 | ||||||||||
Note receivable | $ 1,480,000 | ||||||||||
Gains losses debt | $ 1,810,712 | ||||||||||
Paycheck Protection Program [Member] | |||||||||||
Short-term Debt [Line Items] | |||||||||||
Promissory note face amount | $ 399,300 |