Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 17, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --12-31 | |
Entity Registrant Name | Rocky Mountain High Brands, Inc. | |
Entity Central Index Key | 0001670869 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 409,977,163 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash | $ 32,240 | $ 53,606 |
Restricted Cash | 14,474 | |
Accounts Receivable, net of allowance of $0 and $0, respectively | 18,162 | |
Inventory | 150,039 | 238,035 |
Prepaid Expenses and Other Current Assets | 1,105,610 | 174,726 |
TOTAL CURRENT ASSETS | 1,287,889 | 499,003 |
Property and Equipment, net | 2,136,017 | 19,342 |
Intangible Assets | 1,408,367 | 13,008 |
Other Assets | 11,593 | 14,606 |
TOTAL ASSETS | 4,843,866 | 545,959 |
CURRENT LIABILITIES | ||
Accounts Payable and Accrued Liabilities | 1,262,740 | 1,143,217 |
Other Payables & Stock related payables | 3,003,912 | 30,406 |
Convertible Notes Payable, net of debt discount | 971,142 | 1,008,950 |
Notes Payable | 180,100 | 30,000 |
Accrued Interest | 115,737 | 96,134 |
Deferred Revenue | 510,696 | 445,925 |
Derivative Liability | 771,391 | 413,678 |
TOTAL LIABILITIES | 6,815,787 | 3,168,310 |
SHAREHOLDERS' DEFICIT | (1,971,921) | (2,622,351) |
Preferred Stock - Series A - Par Value of $.001; 1,000,000 shares designated; No shares issued and outstanding as of June 30, 2020 | ||
Preferred Stock - Series B - Par Value of $.001; 7,000,000 shares designated; No shares issued and outstanding as of June 30, 2020 | ||
Preferred Stock - Series C - Par Value of $.001; 2,000,000 shares designated; No shares issued and outstanding as of June 30, 2020 | ||
Preferred Stock - Series D - Par Value of $.001; 2,000,000 shares designated; No shares issued and outstanding as of June 30, 2020 | ||
Preferred Stock - Series E - Par Value of $.001; 789,474 shares designated; No shares issued and outstanding as of June 30, 2020 | ||
Preferred Stock - Series F - Par Value of $.001; 1,680 shares designated; No shares issued and outstanding as of June 30, 2020 | ||
Preferred Stock - Series G - Par Value of $.001; 10,000 shares designated; no shares issued and outstanding as of June 30, 2020, and 10 shares issued and outstanding as of December 31, 2019 | 10 | |
Preferred Stock - Series H - Par Value of $.001; 5,000 shares designated; No shares issued and outstanding as of June 30, 2020, | ||
Common Stock - Par Value of $.001; 1,000,000,000 shares authorized; 284,451,184 shares issued and outstanding as of June 30, 2020; 137,915,630 shares issued and outstanding as of December 31, 2019 | 284,451 | 137,915 |
Additional Paid-In Capital | 40,482,224 | 37,528,496 |
Accumulated Deficit | (42,734,969) | (40,285,145) |
Total Rocky Mountain High Brands Shareholders' Deficit | (1,968,294) | (2,618,724) |
Noncontrolling Interests | (3,627) | (3,627) |
TOTAL SHAREHOLDERS' DEFICIT | (1,971,921) | (2,622,351) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 4,843,866 | $ 545,959 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares designated | 12,806,154 | 12,801,154 |
Preferred Stock, shares issued and outstanding | 10 | |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common Stock, shares issued | 284,451,184 | 137,914,630 |
Common Stock, shares outstanding | 284,451,184 | 137,914,630 |
Accounts Receivable, net allowance of | $ 0 | $ 0 |
Series A Preferred | ||
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares designated | 1,000,000 | 1,000,000 |
Preferred Stock, shares issued and outstanding | ||
Series B Preferred | ||
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares designated | 7,000,000 | 7,000,000 |
Preferred Stock, shares issued and outstanding | ||
Series C Preferred | ||
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares designated | 2,000,000 | 2,000,000 |
Preferred Stock, shares issued and outstanding | ||
Series D Preferred | ||
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares designated | 2,000,000 | 2,000,000 |
Preferred Stock, shares issued and outstanding | ||
Series E Preferred | ||
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares designated | 789,474 | 789,474 |
Preferred Stock, shares issued and outstanding | ||
Series F Preferred | ||
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares designated | 1,680 | 1,680 |
Preferred Stock, shares issued and outstanding | ||
Series G Preferred | ||
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares designated | 10,000 | |
Preferred Stock, shares issued and outstanding | 10 | |
Series H Preferred | ||
Preferred Stock, par value | $ 0.001 | |
Preferred Stock, shares designated | 500 | |
Preferred Stock, shares issued and outstanding |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Sales | $ 669,489 | $ 36,572 | $ 782,932 | $ 113,001 |
Cost of Sales | 742,258 | 38,854 | 959,338 | 114,584 |
Gross Profit (Loss) | (72,769) | (2,282) | (176,406) | (1,583) |
Operating Expenses | ||||
General and Administrative | 1,248,234 | 696,846 | 1,832,303 | 1,653,486 |
Advertising and Marketing | 24,442 | 158,985 | 69,104 | 368,375 |
Total Operating Expenses | (1,272,676) | 858,831 | (1,901,407) | 2,021,861 |
Loss from Operations | (1,345,445) | (858,113) | (2,007,813) | (2,023,444) |
Other (Income)/Expenses: | ||||
Interest Expense | 108,863 | 339,368 | 260,418 | 632,754 |
Loss on Extinguishment of Debt | (689,991) | 74,164 | (230,840) | |
(Gain) Loss on Change in Fair Value of Derivative Liability | 15,894 | (390,520) | 37,429 | 195,063 |
Total Other (Income) Expenses | 124,757 | (190,943) | 369,011 | (93,014) |
Loss Before Income Tax Provision | (1,470,202) | (667,170) | (2,815,835) | (1,930,430) |
Income Tax Provision | ||||
Net Loss | (1,470,202) | (667,170) | (2,815,835) | (1,930,430) |
Net Loss Attributable to Noncontrolling Interests | ||||
Net Loss Attributable to Rocky Mountain High Brands | $ (1,470,202) | $ (667,170) | $ (2,815,835) | $ (1,930,430) |
Net Loss per Common Share - Basic and Diluted | $ (0.01) | $ (0.01) | $ (0.01) | $ (0.02) |
Weighted Average Shares Outstanding | 1,569,700 | 106,076,970 | 142,225,592 | 102,934 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating Activities: | ||
Net Loss | $ (1,470,202) | $ 1,930,430 |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 511,750 | 110,209 |
Non-cash interest expense | 622,367 | |
Non-cash portion of gain on lawsuit judgement and legal settlement | (30,840) | |
(Gain) Loss on change in fair value of derivative liability | 357,713 | 195,063 |
Loss on extinguishment of debt | (689,991) | |
Bad debt expense | 1,678 | |
Depreciation and amortization expense | 20,482 | 14,773 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 6,738 | 12,029 |
Inventory | (228,905) | |
Prepaid expenses and other current assets | (966,692) | (238,945) |
Other assets | (13,058) | (49,432) |
Accounts payable and accrued liabilities | (12,922) | 68,188 |
Other payables & Stock related payables | 3,003,912 | |
Deferred revenue | (223,267) | |
NET CASH (USED) IN OPERATING ACTIVITIES | (1,301,422) | 2,045,372 |
Financing Activities: | ||
Investments in intangible assets, net | (1,397,960) | |
Acquisition of property and equipment | 1,828,820 | |
Disposal of property and equipment | ||
NET CASH PROVIDED BY INVESTING ACTIVITIES | (3,226,720) | |
Proceeds from mezzanine Financing | 367,500 | |
Assumption of both notes | 1,007,000 | |
Increase of notes payable | 573,382 | (6,424) |
Proceeds from issuance of common stock | 201,523 | 1,139,173 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,781,905 | 1,500,249 |
INCREASE (DECREASE) IN CASH | (154,675) | (545,123) |
CASH AND RESTRICTED CASH - BEGINNING OF PERIOD | 123,455 | 613,686 |
CASH AND RESTRICTED CASH- END OF PERIOD | 32,240 | 68,563 |
Supplemental cash flow information: | ||
Cash paid for interest | 10,387 | |
Cash paid for taxes | ||
Supplemental disclosure of non-cash financing and investing activities: | ||
Common stock issued for conversion of debt | 9,976 | 188,870 |
Debt and accrued interest converted for common stock | 271,189 | |
Beneficial conversion feature recognized as debt discount | $ 367,500 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Deficit (Unaudited) - USD ($) | Common Stock | Preferred Stock F | Preferred Stock G | Preferred Stock H | APIC | Accumulated Deficit | Total RMHB Shareholders' Deficit | Noncontrolling Interest | Total |
Balances at Dec. 31, 2018 | 94,580,869 | ||||||||
Amount Balance at Dec. 31, 2018 | $ 94,581 | $ 34,221,215 | $ (35,018,351) | $ (702,555) | $ (702,555) | ||||
Stock issued for services, shares | |||||||||
Stock issued for services, amount | |||||||||
Stock issued for professional services, shares | |||||||||
Stock issued for professional services, amount | |||||||||
Shares issued upon conversion of convertible notes, shares | 1,750,000 | ||||||||
Shares issued upon Conversion of convertible notes, amount | $ 1,750 | 169,592 | 171,342 | 171,342 | |||||
Shares issued for cash, shares | 7,813,337 | ||||||||
Shares issued for cash, amount | $ 7,813 | 1,009,233 | 1,017,046 | 1,017,046 | |||||
Shares issued for compensation, shares | 25,403 | ||||||||
Shares issued for compensation, amount | $ 25 | 3,976 | 4,001 | 4,001 | |||||
Business of raw pharma, shares | |||||||||
Business of raw pharma, amount | |||||||||
Series G preferred shares converted to common shares, shares | |||||||||
Series G preferred shares converted to common shares, amount | |||||||||
Shares issued for payment of related party payables, shares | |||||||||
Shares issued for payment of related party payables, amount | |||||||||
Stock issued for prepaid services, shares | |||||||||
Stock issued for prepaid services, amount | |||||||||
Stock issued for legal settlement, shares | |||||||||
Stock issued for legal settlement, amount | |||||||||
Stock issued for marketing, shares | |||||||||
Stock issued for marketing, amount | |||||||||
Stock option forfeiture | |||||||||
Beneficial conversion feature recognized on convertible notes payable | |||||||||
Fractional shares issued as a result of the reverse split, shares | |||||||||
Fractional shares issued as a result of the reverse split, amount | |||||||||
Net Income (Loss) | (1,263,260) | (1,263,260) | (1,263,260) | ||||||
Balances at Mar. 31, 2019 | 104,169,609 | ||||||||
Amount Balance at Mar. 31, 2019 | $ 104,170 | 35,404,015 | (36,281,611) | (773,426) | (773,426) | ||||
Stock issued for services, shares | |||||||||
Stock issued for services, amount | |||||||||
Stock issued for professional services, shares | |||||||||
Stock issued for professional services, amount | |||||||||
Shares issued upon conversion of convertible notes, shares | 2,315,980 | ||||||||
Shares issued upon Conversion of convertible notes, amount | $ 2,316 | 15,213 | 17,529 | 17,529 | |||||
Shares issued for cash, shares | 2,480,932 | ||||||||
Shares issued for cash, amount | $ 2,491 | 119,636 | 122,127 | 122,127 | |||||
Shares issued for compensation, shares | |||||||||
Shares issued for compensation, amount | |||||||||
Business of raw pharma, shares | |||||||||
Business of raw pharma, amount | |||||||||
Series G preferred shares converted to common shares, shares | |||||||||
Series G preferred shares converted to common shares, amount | |||||||||
Shares issued for payment of related party payables, shares | |||||||||
Shares issued for payment of related party payables, amount | |||||||||
Stock issued for prepaid services, shares | |||||||||
Stock issued for prepaid services, amount | |||||||||
Stock issued for legal settlement, shares | |||||||||
Stock issued for legal settlement, amount | |||||||||
Stock issued for marketing, shares | |||||||||
Stock issued for marketing, amount | |||||||||
Stock option forfeiture | 7,530 | 7,530 | 7,530 | ||||||
Beneficial conversion feature recognized on convertible notes payable | 367,500 | 367,500 | 367,500 | ||||||
Fractional shares issued as a result of the reverse split, shares | 3,470 | ||||||||
Fractional shares issued as a result of the reverse split, amount | $ 3 | (3) | |||||||
Net Income (Loss) | (667,170) | (667,170) | (667,170) | ||||||
Balances at Jun. 30, 2019 | 108,979,991 | ||||||||
Amount Balance at Jun. 30, 2019 | $ 108,980 | 35,913,891 | (36,948,781) | (925,910) | (925,910) | ||||
Balances at Dec. 31, 2019 | 137,914,630 | 130 | 10,000 | ||||||
Amount Balance at Dec. 31, 2019 | $ 137,915 | $ 10 | 37,528,496 | (40,285,145) | (2,618,724) | (3,627) | (2,622,351) | ||
Stock issued for services, shares | |||||||||
Stock issued for services, amount | |||||||||
Stock issued for professional services, shares | |||||||||
Stock issued for professional services, amount | |||||||||
Shares issued upon conversion of convertible notes, shares | 12,437,084 | 12,437,084 | |||||||
Shares issued upon Conversion of convertible notes, amount | $ 12,437 | 195,963 | 208,400 | $ 208,400 | |||||
Shares issued for cash, shares | 200 | 11 | |||||||
Shares issued for cash, amount | 211,000 | 211,000 | $ 211,000 | ||||||
Shares issued for compensation, shares | 802,700 | 802,700 | |||||||
Shares issued for compensation, amount | $ 803 | 15,251 | 16,054 | $ 16,054 | |||||
Business of raw pharma, shares | |||||||||
Business of raw pharma, amount | |||||||||
Series G preferred shares converted to common shares, shares | 500,000 | (10,000) | 500,000 | ||||||
Series G preferred shares converted to common shares, amount | $ 500 | $ (10) | 490 | $ 490 | |||||
Shares issued for payment of related party payables, shares | 4,985,286 | ||||||||
Shares issued for payment of related party payables, amount | $ 4,895 | 93,010 | 97,905 | 97,905 | |||||
Stock issued for prepaid services, shares | |||||||||
Stock issued for prepaid services, amount | |||||||||
Stock issued for legal settlement, shares | |||||||||
Stock issued for legal settlement, amount | |||||||||
Stock issued for marketing, shares | |||||||||
Stock issued for marketing, amount | |||||||||
Stock option forfeiture | |||||||||
Beneficial conversion feature recognized on convertible notes payable | |||||||||
Fractional shares issued as a result of the reverse split, shares | |||||||||
Fractional shares issued as a result of the reverse split, amount | |||||||||
Net Income (Loss) | (979,622) | (979,622) | (979,622) | ||||||
Balances at Mar. 31, 2020 | 156,549,700 | 330 | 11 | ||||||
Amount Balance at Mar. 31, 2020 | $ 156,550 | 38,043,720 | (41,264,767) | (3,064,497) | (3,627) | (3,068,124) | |||
Balances at Dec. 31, 2019 | 137,914,630 | 130 | 10,000 | ||||||
Amount Balance at Dec. 31, 2019 | $ 137,915 | $ 10 | 37,528,496 | (40,285,145) | (2,618,724) | (3,627) | $ (2,622,351) | ||
Shares issued upon conversion of convertible notes, shares | 12,437,084 | ||||||||
Shares issued for compensation, shares | 802,700 | ||||||||
Series G preferred shares converted to common shares, shares | 500,000 | ||||||||
Balances at Jun. 30, 2020 | 284,451,184 | ||||||||
Amount Balance at Jun. 30, 2020 | $ 284,451 | 40,482,224 | (42,734,969) | (1,968,294) | (3,627) | $ (1,971,921) | |||
Balances at Mar. 31, 2020 | 156,549,700 | 330 | 11 | ||||||
Amount Balance at Mar. 31, 2020 | $ 156,550 | 38,043,720 | (41,264,767) | (3,064,497) | (3,627) | (3,068,124) | |||
Stock issued for services, shares | 150,000 | ||||||||
Stock issued for services, amount | $ 150 | 3,075 | 3,225 | 3,225 | |||||
Stock issued for professional services, shares | 600,000 | ||||||||
Stock issued for professional services, amount | $ 600 | 15,000 | 15,600 | 15,600 | |||||
Shares issued upon conversion of convertible notes, shares | 9,976,484 | ||||||||
Shares issued upon Conversion of convertible notes, amount | $ 9,976 | 89,004 | 98,980 | 98,980 | |||||
Shares issued for cash, shares | |||||||||
Shares issued for cash, amount | |||||||||
Shares issued for compensation, shares | 22,250,000 | ||||||||
Shares issued for compensation, amount | $ 22,250 | 489,500 | 511,750 | 511,750 | |||||
Business of raw pharma, shares | 27,000,000 | ||||||||
Business of raw pharma, amount | $ 27,000 | 513,000 | 540,000 | 540,000 | |||||
Series G preferred shares converted to common shares, shares | |||||||||
Series G preferred shares converted to common shares, amount | |||||||||
Shares issued for payment of related party payables, shares | |||||||||
Shares issued for payment of related party payables, amount | |||||||||
Stock issued for prepaid services, shares | 50,000,000 | ||||||||
Stock issued for prepaid services, amount | $ 50,000 | 980,000 | 1,000,000 | 1,000,000 | |||||
Stock issued for legal settlement, shares | 17,500,000 | ||||||||
Stock issued for legal settlement, amount | $ 17,500 | 370,000 | 387,500 | 387,500 | |||||
Stock issued for marketing, shares | 425,000 | ||||||||
Stock issued for marketing, amount | $ 425 | 8,925 | 9,350 | 9,350 | |||||
Stock option forfeiture | |||||||||
Beneficial conversion feature recognized on convertible notes payable | |||||||||
Fractional shares issued as a result of the reverse split, shares | |||||||||
Fractional shares issued as a result of the reverse split, amount | |||||||||
Net Income (Loss) | (1,470,202) | (1,470,202) | (1,470,202) | ||||||
Balances at Jun. 30, 2020 | 284,451,184 | ||||||||
Amount Balance at Jun. 30, 2020 | $ 284,451 | $ 40,482,224 | $ (42,734,969) | $ (1,968,294) | $ (3,627) | $ (1,971,921) |
General
General | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
General | NOTE 1 – General Rocky Mountain High Brands, Inc. (“RMHB” or the “Company”) was incorporated under the laws of the State of Nevada. On July 17, 2014, the Company changed its name from Republic of Texas Brands Incorporated to Totally Hemp Crazy, Inc and on October 23, 2015, the Company changed its name to Rocky Mountain High Brands, Inc. RMHB currently operates through its parent company, three wholly owned subsidiaries, two majority-owned subsidiaries, and one minority-owned subsidiary, which the Company controls. All subsidiaries are consolidated for financial reporting purposes. RMHB is a consumer goods company that specializes in the developing, manufacturing, marketing, and distributing high-quality, health conscious, hemp oil and hemp extract-infused products that span various categories including beverage, food, fitness, skin care, and more. RMHB also markets a naturally high alkaline spring water as part of our brand portfolio. All products comply with federal regulations on hemp products and contain 0.0% tetrahydrocannabinol (“THC”), the psychoactive constituent of cannabis. Recently, through a newly created subsidiary of RMHB, Rocky Mountain Productions, Inc. (“RMPI”), the Company acquired a bottling and canning facility and is now also in the business of canning both its own beverages as well as canning beverages for other customers. Furthermore, as a result of equipment included in the acquisition of the facility, RMHB is also in the business of bottling hand sanitizer. Because of the demand resulting with the COVID-19 pandemic, RMHB anticipates continuing in the bottling of hand sanitizer for the foreseeable future. In March 2018, the Company launched the HEMPd brand with gummies, water soluble drops, capsules, tinctures, lotions, and salves. The Company introduced four flavors of CBD-infused waters in 12 oz. cans in November 2018. In July 2018, the Company acquired the assets of BFIT Brands, LLC and formed a new subsidiary, FitWhey Brands Inc. FitWhey marketed a line-up of five water-based protein drinks that include caffeine and B vitamins. In August 2019, the Company suspended the production of FitWhey products. On June 12, 2019, the Company organized Sweet Rock, LLC (“Sweet Rock”), a 51% owned company, with Sweet Ally, Inc. Sweet Rock will manufacture and market CBD-infused chocolate, hard candies, and baked goods. On April 29, 2020, the Company formed Rocky Mountain Productions, Inc. (“RMPI”), a wholly owned Nevada corporation. On April 30, 2020, RMPI acquired Raw Pharma, LLC (“Raw Pharma”) for approximately $1,971,200, as adjusted by the Global Settlement Agreement, November 12, 2020. The company financed the acquisition by assuming bank debt, collateralized by equipment issuing common stock and cash payments. The facility has the capability to can and bottle products, including 12 oz. regular and sleek cans, 16 oz. cans, shots, and bottles. The following shows the allocation of the purchase price for Raw Pharma, LLC to acquired intangible assets, assumed liabilities and proforma goodwill: Total Purchase Price 1,971,200 Production Equipment 1,448,020 Leasehold Improvements 380,000 Total Proforma Goodwill $ 143,180 Effective April 30, 2020, the company’s subsidiary, Rocky Mountain Productions, Inc acquired all the assets relating and used in the acquired business for cash and 31,700,000 shares of the company’s common stock. The results of operations since April 30, 2020, are included in financial statement. The Company will report in the Annual Report, the balance sheet for comparison purposes as required by agreement with the Securities and Exchange Commission. During early 2019, the Company continued to market its lineup of naturally flavored hemp-infused functional beverages. The Company also bottles and distributes its naturally high alkaline spring water under the name Eagle Spirit Spring Water. On April 22, 2019, the reverse split of the Company’s stock, at a ratio of one share for every 20 shares, was effective. All common stock share and per share amounts in this document reflects this reverse split. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | NOTE 2 – Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2020, and the results of operations and cash flows for the periods presented. The results of operations for the three months ended June 30, 2020, are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Form 10-K for the year ended December 31, 2019, filed with the SEC on July 9, 2020. Principles of Consolidation The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States. The consolidated financial statements include the accounts of the Company, its wholly owned and controlled subsidiaries. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of the financial statements in conformity with Generally Accepted Accounting Principles (“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 dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Certain of the Company’s estimates could be affected by external conditions, including those unique to its industry, and general economic conditions. It is possible that these external factors could have an effect on the Company’s estimates that could cause actual results to differ from its estimates. The Company re-evaluates all its accounting estimates at least quarterly based on these conditions and record adjustments when necessary. Cash The Company maintains cash balances at various financial institutions. At times, these balances may exceed federally insured limits. Restricted Cash The Company classifies any cash that is legally restricted as to its withdrawal or usage as restricted cash. The following table provides a reconciliation of cash and restricted cash reported on the consolidated balance sheets to the total of those same amounts shown in our consolidated statements of cash flows: June 30, 2020 December 31, 2019 June 30, 2019 December 31, 2018 Cash $ 31,245 $ 53,606 $ 196,704 $ 147,386 Restricted cash — 14,474 80,751 466,300 Cash and restricted cash $ 31,245 $ 68,080 $ 277,455 $ 613,686 Accounts Receivable and Allowance for Doubtful Accounts Receivable The Company has a policy of reserving for uncollectible accounts based on the best estimate of the amount of probable credit losses in our existing accounts receivable. We extend credit to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable and perform ongoing credit evaluations of customers and maintain an allowance for potential bad debts if required. It is determined whether an allowance for doubtful accounts is required by evaluating specific accounts where information indicates the customers may have an inability to meet financial obligations. In these cases, we Direct write-offs are taken in the period when we have exhausted our efforts to collect overdue and unpaid receivables or otherwise evaluate other circumstances that indicate the collectability of receivables. Inventories If the Company identifies excess, obsolete, or unsalable items, its inventories are written down to their realizable value in the period in which the impairment is first identified. Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of sales in the Company’s statements of operations. Fair Value Measurements The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures,” which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short- and long-term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: • Level 1 — quoted prices in active markets for identical assets or liabilities. • Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable. • Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions). The derivative liability, which relates to the conversion feature of convertible debt and common stock warrants and options, is classified as a Level 3 liability, and is the only financial liability measure at fair value on a recurring basis. The change in the Level 3 financial instrument is as follows: Balance, December 31, 2019 $ 413,678 Issued during the three months ended June 30, 2020 357,719 Exercises/Conversions — Change in fair value recognized in operations — Balance, June 30, 2020 $ 771,391 The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model, using the following assumptions as of March 31, 2020: Estimated Dividends None Expected Volatility 145.0% Risk Free Interest Rate 0.041% Expected term .1 to 1.5 years Property and Equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets, which generally range from three to five years. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred. Leases On January 1, 2020, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) Capitalized Software Direct costs related to software development, including coding, website application development, infrastructure development and graphics development, are capitalized and included in other assets. Amortization is provided for on a straight-line basis over the useful life of the software. Costs related to planning, content development, and operating and maintaining software are expensed as incurred. Impairment of Long-Lived Assets The Company evaluates intangible assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flow and recognizes an impairment loss when the estimated undiscounted future cash flow expected to result from the use of the asset plus the net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When the Company identifies an impairment, it reduces the carrying amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values. No impairment charges were recorded during the three months ended June 30, 2020, and 2019. Share-based Payments Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values, in accordance with FASB ASC Topic 718. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). The Company had no common stock options or common stock equivalents granted or outstanding for all periods presented. The Company issued restricted stock to consultants and employees for various services. Cost for these transactions is measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is to be measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete. Convertible Instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities.” Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Preferred Stock We apply the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity” when determining the classification and measurement of preferred stock. Preferred shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. We classify conditionally redeemable preferred shares (if any), which includes preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control, as temporary equity. At all other times, we classified our preferred shares in stockholders’ equity. Our preferred shares do not feature any redemption rights within the holders’ control or conditional redemption features not within our control. Accordingly, unless otherwise noted, all issuances of preferred stock are presented as a component of consolidated shareholders’ deficit. Revenue Recognition The Company follows the guidance of the Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers,” as amended. It records revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the selling price to the customer is fixed or determinable and collectability of the revenue is reasonably assured. The Company has not experienced any significant returns from customers and accordingly, in management’s opinion, no reserve for returns has been provided. Payments received prior to shipment of goods are recorded as deferred revenue. The following table represents sales by sales channel for each of the periods: Three Months Ended June 30, 2020 June 30, 2019 Online $ 20,195 $ 21,103 Private Label 636,240 — Distributor 12,224 1,421 Retailer 830 14,048 Total $ 669,489 $ 36,572 All sales for all periods presented were to domestic customers, except private label sales of $80,194 for the three months ended June 30, 2020. These private label sales were to CBD Life, S.A. (“CBD Life”) of Mexico. All sales to CBD Life are delivered to Laredo, Texas, where the customer takes title. Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC 606. The Company’s revenues accounted for under ASC 606, generally, do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The sales prices are generally fixed at the point of sale and all consideration from contracts is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration. In June 2020, the Company produced and delivered 146,880 cans of Rocket High, California Limonada, and California Te Negro branded product to CBD Life. In July 2020 the customer informed the Company that numerous cans of the delivered product were leaking. The Company agreed to replace the entire production run at its own expense and accrued related costs of $68,648 as of June 30, 2020. The production-related costs, including start-up costs and production overruns, were approximately $109,000. The customer has not requested, and the Company has not offered, any refund of the sales amount or to provide any other consideration to the customer. The $80,194 sales amount is included in sales for the three months ended June 30, 2020. Advertising Advertising and marketing expenses are charged to operations as incurred. Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all the deferred tax assets will not be realized. ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions. Reclassifications Certain reclassifications have been made to prior year consolidated financial statements to conform to classifications used in the current year. |
Going Concern
Going Concern | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going concern | NOTE 3 – Going Concern The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of June 30, 2020, the Company has a shareholders’ deficit of $1,207,165 and an accumulated deficit of $42,471,932 and has generated operating losses since inception. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate revenues and its ability to continue raising capital. The Company has historically funded its operations with sales of equity and debt securities. The COVID-19 pandemic of 2020 has added uncertainty into the financial markets that the Company relies on for its operating and investment funding. It is unclear how long, or to what extent, the pandemic will impact the Company in 2020 and beyond. On April 30, 2020, the Company purchased certain assets of Raw Pharma, LLC (“Raw Pharma”) and agreed to sublease Raw Pharma’s production facility. Management believes its Securities Purchase Agreement dated December 20, 2019, with GHS Investments, LLC (“GHS”), along with bridge financing from GHS or other sources, will provide sufficient funds to make up for any operating cash flows. The Company’s business has been adversely affected by the instability, disruption, and quarantine restrictions caused by the recent COVID-19 pandemic. The COVID-19 pandemic may cause customers to suspend their decisions on ordering our products, make it impossible to attend or sponsor trade shows or other conferences in which our products are presented to distributors, customers and potential customers, for our customers to visit our physical location, and give rise to sudden significant changes in regional and global economic conditions and cycles that could interfere with purchases of goods, or commitments to develop new brands and private label products. Significant disruptions to communications and travel, including travel restrictions and other protective quarantine measures against COVID-19 by governmental agencies, have increased the difficulty in delivering goods to our customers and could ultimately make such deliveries impossible. Travel restrictions and protective measures against COVID-19 could cause us to incur additional unexpected labor costs and expenses or could restrain our ability to retain the highly skilled personnel we need for our operations. The COVID-19 pandemic has added uncertainty to the financial markets that the Company relies on for its operating and investment funding. It has also negatively impacted the Company’s ability to meet its external financial reporting deadlines. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | NOTE 4 – Inventory Inventory consists of the following: June 30, 2020 December 31, 2019 Finished inventory $ 51,591 $ 160,763 Raw materials and packaging 98,349 77,272 Total $ 149,940 $ 238,035 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 6 Months Ended |
Jun. 30, 2020 | |
Other Assets [Abstract] | |
Prepaid Expenses and Other Current Assets | NOTE 5 – Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following: June 30, 2020 December 31, 2019 Prepaid officers’ compensation $ — $ 143,233 Prepaid production 12,500 — Other prepaid expenses and current assets 1,093,110 31,493 Total $ 1,105,610 $ 174,726 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment, Gross [Abstract] | |
Property, Plant and Equipment | Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets, which generally range from three to five years. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2020 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets | NOTE 7 – Intangible Assets Intangible assets consist of capitalized software. For the three months ended June 30, 2020, and 2019, amortization expense was $2,601 and $2,601, respectively. |
Accounts Payable amd Accrued Li
Accounts Payable amd Accrued Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable amd Accrued Liabilities | NOTE 8 – Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consist of the following: June 30, 2020 December 31, 2019 Accounts payable $ 458,904 $ 440,788 Accrued compensation — 51,500 Common stock payable 396,850 417,850 Other accrued expenses 406,986 233,079 Total $ 1,262,740 $ 1,143,217 |
Convertible Notes Payable
Convertible Notes Payable | 6 Months Ended |
Jun. 30, 2020 | |
Convertible Notes Payable [Abstract] | |
Convertible Notes Payable | NOTE 9 – Convertible Notes Payable Interest Rates Term Conversion Rates December 31, 2019 GHS Investments, LLC (fixed conversion) 10% .3 - .75 years $ 0.01 $ 849,208 $ 1,035,750 Eagle Equities, LLC 8% 1.3 – 1.5 years (a) 298,750 — LSW Holdings, LLC (variable conversion) 6% — (b) 179,000 179,000 Discount (345,048 ) (205,800) Total $ 981,910 $ 1,008,950 (a) Fixed conversion rate for the first 180 days ($0.03 as of March 31, 2020). 40% discount on the lowest closing bid price during the 20 trading days prior to conversion after 180 days. (b) 50% discount on the average of the 3 lowest closing bid prices during the 10 trading days prior to conversion ($0.019). For the three months ended June 30, 2020, and 2019, interest expense on these notes, including amortization of the discount, was $135,671 and $293,189, respectively. As of June 30, 2020, and December 31, 2019, the Company’s derivate liability related to its convertible note’s payable was $728,976 and $403,971, respectively. All tangible and intangible assets of the Company are pledged as security. |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 10 – Notes Payable Notes payable consist of the following: Interest Rate Term June 30, 2020 December 31, 2019 Notes payable 0% Due $ 603,382 $ 30,000 As of June 30, 2020, and December 31, 2019, notes payable includes two non-interest-bearing notes totaling $30,000 that originated prior to the Company’s 2014 bankruptcy proceedings. |
Deferred Revenue
Deferred Revenue | 6 Months Ended |
Jun. 30, 2020 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Deferred Revenue Disclosure | NOTE 11 – Deferred Revenue In December 2017, the Company executed a three-year Master Manufacturing Agreement (“MMA”) with CBD Alimentos SA de CV (“CBD-Alimentos”), a Mexican food and beverage distributor. Under the agreement (as amended), CBD Alimentos, through its sister company, CBD Life, is our exclusive distributor in Mexico for all our CBD-infused energy and functional beverages. In turn, we are In accordance with the MMA, RMHB opened a separate operating bank account for all deposits made by CBD Life. CBD Life is required to always maintain a positive cash balance in the account. The Company has full unilateral authority to disburse funds from the bank account to vendors, suppliers, co-packers, and the Company solely for the purposes of production, other administrative costs, and the Company’s margin on the sale. During 2019 the Company transferred $80,000 ($.04 per can ordered) from the CBD Life restricted bank account to its corporate account in accordance with the terms of the MMA. As of June 30, 2020, and December 31, 2019, the balances in the separate operating bank account were $27,645 and $14,474, respectively, and are included in restricted cash on the Company’s balance sheet. A summary rolls forward of the Deferred Revenue balance from the December 28, 2018 (receipt of first deposit) until June 30, 2020, is as follows: December 28, 2018, deposit received $ 466,300 December 2019 delivery (20,375) Balance as of December 31, 2019 $ 445,925 January 30, 2020, deposit received 97,060 June 2020 deliveries 32,289 Balance as of June 30, 2020 $ 462,791 In July 2020 CBD Life informed the Company that numerous cans of the delivered product were leaking. The Company has agreed to replace the production run at its own expense and accrued related cost of $68,648 as of June 30, 2020. The production-related costs, including start-up costs and production overruns, were approximately $109,000. The Company has not agreed to refund the sales amount or provide any other consideration to the customer. |
Shareholders' Deficit
Shareholders' Deficit | 6 Months Ended |
Jun. 30, 2020 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Shareholders' Deficit | NOTE 12 – Shareholders’ Deficit Common Stock As of June 30, 2020, the Company has 1,000,000,000 shares of common stock authorized and 284,451,184 shares issued and outstanding. On April 22, 2019, the Company effected a 1-for-20 reverse stock split. All common share amounts in this report reflect this stock split. During the three months ended June 30, 2020, the Company issued 18,635,070 shares of common stock, including 12,437,084 shares for convertible notes payable conversions, 4,895,286 shares for amounts due to a board member, 802,700 shares for compensation, and 500,000 shares for Series G Preferred Stock conversions. Preferred Stock The Company has 20,000,000 shares of preferred stock authorized as of June 30, 2020, of which 12,801,154 are specifically designated to a series of preferred stock and 7,198,846 remain undesignated. Series A Preferred Stock The Company has 1,000,000 shares of Series A Preferred Stock designated, of which none were outstanding as of June 30, 2020 and December 31, 2019. LSW Holdings LLC was the holder of these shares. Lily Li, who was the Company’s Executive Vice President until April 5, 2018, is the Managing Member of LSW and, in that capacity, had the authority to direct voting and investment decisions with regard to its holdings in the Company. On October 26, 2018, these shares were ruled void ab initio Series B Preferred Stock The Company has 7,000,000 shares of Series B Preferred Stock designated, of which none were outstanding as of June 30, 2020, and December 31, 2019. Series C Preferred Stock The Company has 2,000,000 shares of Series C Preferred Stock designated, of which none were outstanding as of June 30, 2020, and December 31, 2019. Series C Preferred Stock is 12% interest bearing, cumulative, exchangeable, non-voting, convertible preferred stock of the Company. Each Series C Preferred share is convertible to 2.5 shares of common stock. Series D Preferred Stock The Company has 2,000,000 shares of Series D Preferred Stock designated, of which none were outstanding as of March 31, 2020, and December 31, 2019. Series D Preferred Stock is a non-voting, non-interest-bearing convertible preferred stock. Each Series D preferred share is convertible to 5 shares of common stock. Series E Preferred Stock The Company has 789,474 shares of Series E Preferred Stock designated, of which none were outstanding as of March 31, 2020, and December 31, 2019. Holders of Series E Preferred Stock are entitled to cast 100 votes per share of Series E Preferred Stock on any proposal to increase our authorized capital stock, with no other voting rights. Each share of Series E Preferred Stock is convertible to 20 shares of common stock. Series F Preferred Stock On December 20, 2019, the Board of Directors designated 1,680 shares of Series F Preferred Stock. On that same day, the Company sold 130 shares of Series F Preferred Stock to GHS Investments, LLC ("GHS") in accordance with a Securities Purchase Agreement with GHS. The Series F Preferred Stock has a par value of $.001, stated value of $1,200, accrues dividends at 12%, is convertible to common stock based on a 20-day trailing volume weighted average low share price, and is senior to other preferred stock. During the three months ended March 31, 2020, the Company sold 200 shares of Series F Preferred Stock to GHS. As of June 30, 2020, and December 31, 2019, there were 330 and 130 shares issued and outstanding, respectively. Series G Preferred Stock On December 20, 2019, the Board of Directors designated 10,000 shares of Series G Preferred Stock. On that same day, the Company granted 10,000 shares of Series G Preferred Stock to Charles Smith, a Board member, and Chief Operating Officer of the Company, in exchange for $10,000 owed to Mr. Smith in compensation. The Series G Preferred Stock has a par value of $.001, is non-interest and non-dividend earning, and each share is convertible to 50 shares of common stock. The holder of Series G Preferred Stock has the right to cast 20,000 votes for every one share of Series G Preferred Stock on any and all proposals to amend the Company’s Articles of Incorporation to increase the authorized capital stock of the Company. Mr. Smith exercised that right in December 2019 and the Series G Preferred Shares were converted to common stock on March 20, 2020. As of June 30, 2020, there were no shares of Series G Preferred Stock issued and outstanding. Series H Preferred Stock On February 25, 2020, the Board of Directors designated 5,000 shares of Series H Preferred Stock. The Board amended the designation on April 7, 2020. The Series H Preferred Stock has a par value of $.001, stated value of $1,200, accrues dividends at 12%, and is convertible to common stock based on a 20-day trailing volume weighted average low share price. As of June 30, 2020, there were 11 shares outstanding. As of December 31, 2019, there were no shares issued and outstanding. Warrants During the three months ended June 30, 2020, and 2019 the Company granted no common stock warrants, none were exercised, and none were forfeited. As of June 30, 2020, and December 31, 2019, there were 607,500 warrants outstanding. Exercise prices range from $.02 to $.40 per share. Options During the three months ended June 30, 2020, the Company did not grant any options to purchase the Company’s common stock and there were no exercises or forfeitures of such options. During the three months ended June 30, 2019, the Company granted 500,000 options to purchase common stock to an employee. There were no exercises or forfeitures during that period. As of June 30, 2020, and December 31, 2019, there were no options outstanding. |
Noncontrolling Interest
Noncontrolling Interest | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Noncontrolling Interest | NOTE 13– Noncontrolling Interests In July 2019, the Company invested $500 in Sweet Rock, LLC, a Michigan limited liability company. The Company owns 51% and Sweet Ally, Inc. (“Sweet Ally”) invested $495 and owns 49%. The Company consolidates the financial statements of Sweet Rock and accounts for Sweet Ally’s ownership as a noncontrolling interest. During the three months ended June 30, 2020, Sweet Rock recorded no revenue or expenses. |
Concentrations
Concentrations | 6 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentrations | NOTE 14– Concentrations During the three months ended June 30, 2020, the Company’s two largest customers accounted for approximately 71% and 12% of sales, respectively. During the three months ended June 30, 2019, the Company’s two largest customers accounted for approximately 17% and 2% of sales, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Taxes | |
Income Taxes | NOTE 15 – Income Taxes The reconciliation of income tax benefit at the U.S. statutory rate of 21% to the Company’s effective rate for the periods presented is Three Months Ended June 30, 2020 June 30, 2019 U.S. federal statutory rate (21 %) (21 %) State income tax, net of federal benefit (0.0 %) (0.0 %) Increase in valuation allowance 21 % 21 % Income tax provision (benefit) 0.0 % 0.0 % The tax effects of temporary differences that give rise to the Company’s net deferred tax liability as of June 30, 2020, and December 31, 2019, are: June 30, 2020 December 31, 2019 Deferred Tax Assets Net Operating Losses $ 4,700,000 $ 4,620,000 Less: Valuation Allowance $ (4,700,000 ) $ (4,620,000) Deferred Tax Assets – Net — — As of June 30, 2020, the Company had approximately $22,000,000 of federal and state net operating loss carryovers (“NOLs”), which begin to expire in 2028. Utilization of the NOLs may be subject to limitation under the Internal Revenue Code Section 382 should there be a greater than 50% ownership change as determined under regulations. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against the entire deferred tax asset relating to NOLs for every period because it is more likely than not that all the deferred tax asset will not be realized. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of foreign earnings. We have estimated our provision for income taxes in accordance with the Tax Act and guidance available as of the date of this filing but have kept the full valuation allowance. As a result, the Company has recorded no income tax expense during the three months ended June 30, 2020, and 2019. The Company’s deferred tax assets and liabilities were remeasured to reflect the reduction in the U.S. corporate income tax rate from 34% to 21%, resulting in a deferred tax expense of approximately $2,000,000 in 2017 that is still fully valued against as of March 31, 2020. This expense is attributable to the Company being in a net deferred tax asset position at the time of remeasurement. As the company maintains fully valuation allowance, this amount can be seen on the rate reconciliation as an adjustment to deferred tax asset and corresponding valuation allowance. |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2020 | |
Commitments | |
Commitments | NOTE 16 – Commitments The Company executed a three-year lease for corporate office space effective September 1, 2016. The lease included monthly payments of $7,715 in year one, $7,972 in year two, and $8,229 in year three plus common area maintenance. The lease was accounted for on a straight-line basis over its term. On September 5, 2019, the Company executed a six-month extension of its corporate office lease at $8,065 per month plus common area maintenance. The lease expired on February 29, 2020. On February 28, 2020, the Company executed a second six-month extension of its corporate office lease. The lease includes new, smaller space within the same office building at a monthly payment of $3,549 per month plus common area maintenance. On January 18, 2018, WFLC entered into a 12-month office use agreement for office space in Denver, Colorado. Monthly payments were $91. The lease automatically renews for 12 months each January. Monthly payments are $122. Other Leases The Company rents storage space from various third parties on a month-to-month basis. |
Legal Proceedings
Legal Proceedings | 6 Months Ended |
Jun. 30, 2020 | |
Commitments | |
Legal Proceedings | NOTE 17 – Legal Proceedings Rocky Mountain High Brands, Inc. v Lyonpride Music, LLC, United States District Court Northern District of Texas, 3:18-cv-00045-C, now Lyonpride Music LLC v Rocky Mountain High Brands, Inc., Before the American Arbitration Association, 01-18-0003-1428. The parties have settled the matter and the settlement documents have been signed by the parties. This matter has been concluded. Dallas County Texas, Case Number DC-17-15441 filed November 8, 2017. Rocky Mountain High Brands, Inc. f/k/a Republic of Texas Brands, Inc. Plaintiff, vs. Jerry Grisaffi, Joe Radcliffe, LSW Holdings, LLC, Lily Li, Epic Group One, LLC, Kenneth Radcliffe, Dennis Radcliffe, Phil Uhrik, Michael Radcliffe, Frank Izzo, Morgan Albright, John Garrison, BB Winks, LLC, Crackerjack Classic, LLC, and Universal Consulting, LLC. The Company sought the return of the Series A Preferred Stock (“Series A”) issued to Jerry Grisaffi (“Grisaffi”), RMHB’s former Chairman of the Board. The Company further alleged, among other things, that Grisaffi breached his fiduciary duty to the Company by issuing these Series A shares to himself. On August 30, 2018, the Trial Court in the 192nd District Court of Dallas County, Texas entered a final judgment in the Company’s favor and against Grisaffi in the amount of $3,500,000 for fraud, breach of fiduciary duty, and conversion with respect to the Series A preferred stock. The Court further voided ab initio the Series A Preferred Shares. The Court further ruled that Grisaffi take nothing by his counterclaims in the case. In The Court of Appeals For The Fifth District Of Texas Dallas, Texas, Jerry Grisaffi, Appellant v. Rocky Mountain High Brands, Inc, f/k/a Republic of Texas Brands, Inc., Appellee, No. 05-18-01020-CV. Grisaffi appealed the Judgment described above. The Court of Appeals affirmed in part and reversed in part the Judgment and remanded it to the trial court for the purpose of the Company electing its remedy. The Company has elected its remedy of the $3,500,000 judgment against Grisaffi. Grisaffi has again appealed this matter. On November 19, 2019, Grisaffi filed a chapter 11 bankruptcy in the United States Bankruptcy Court for the Northern District of Texas, Case No. 19-33855-sgj. The Company has filed an Adversary Proceeding to deny Grisaffi the ability to discharge the judgment. A Motion for Summary Judgment on the Adversary Proceeding has been filed and is set for hearing. The Chapter 11 case has been converted by the Bankruptcy Court to a Chapter 7 case. The Trustee who has been appointed is actively conducting proceedings to locate assets of Grisaffi. Dallas County Texas, Case Number DC-18-13491. Rocky Mountain High Brands, Inc. f/k/a Republic of Texas Brands, Inc. Plaintiff, vs. Joe Radcliffe, LSW Holdings, LLC, Lily Li, Epic Group One, LLC, Kenneth Radcliffe, Dennis Radcliffe, Phil Uhrik, Michael Radcliffe, Frank Izzo, Morgan Albright, John Garrison, BB Winks, LLC, Crackerjack Classic, LLC, and Universal Consulting, LLC. This Final Judgment against Lily Li and LSW Holdings, LLC is final for all purposes and was not appealed. The Company plans to outsource the collection of this Judgment. Other than collection of the Judgment this matter has been finalized. Rocky Mountain High Brands, Inc. v La Dolce Vita Trust and Christine Guthrie, In Her Capacity as Trustee, In The 382nd District Court of Rockwall County, Texas, Cause No. 1-18-1608. This is a case whereby the Company is attempting to collect on the Judgment obtained against Grisaffi. More specifically the Company is requesting the Court to order the La Dolce Vita Trust to turnover fraudulently transferred assets and for additional relief necessary to enforce the Company’s judgment against Grisaffi. The case has been stayed, and the Company will seek an order from the Bankruptcy Court to continue in this case or will work in conjunction with the Trustee appointed in the Chapter 7 case on this matter. Chet – 5 Broadcasting, Inc. v Rocky Mountain High Brands, Inc., Supreme Court of the State of New York, County of Ulster, Case No. 18-4416. The parties have settled this matter and the settlement documents have been signed by the parties. This matter has been concluded. |
Other (Income)_Expenses
Other (Income)/Expenses | 6 Months Ended |
Jun. 30, 2020 | |
Other (Income)/Expenses: | |
Other (Income)/Expenses | NOTE 18 – Other (Income)/Expenses Loss on Extinguishment of Debt For the three months ended June 30, 2020, the Company recorded a loss on extinguishment of debt of $74,164 related to the amendment and settlement of convertible notes payable. There was no gain or loss on extinguishment of debt during the three months ended June 30, 2019. Gain (Loss) on Change in Fair Value of Derivative Liability For the three months ended June 30, 2020, the Company recorded a loss on the change in fair value of derivative liability of $21,535 compared to a gain of $195,457 for the three months ended June 30, 2019. In 2020 the loss resulted from the change in the convertibility of two convertible notes payable that were made in February and March 2020 and increase in the valuation of the related derivative liability based on the change in the market value of the Company’s common stock. The gain in 2019 was due to the decrease in the market value of the Company’s common stock between January 1, 2019, and June 30, 2019. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events | |
Subsequent Events. | NOTE 19 – Subsequent Events Between April 1 and September 8, 2020, the Company issued 133,183,537 shares of common stock, including 27,000,000 for the acquisition of the assets of Raw Pharma, 21,925,000 for legal settlements, 9,976,484 for convertible notes payable conversions, 22,000,000 for director and employee compensation, 51,000,000 for payments to vendors, and 1,282,053 for cash. Between April 1 and September 8, 2020, holders of convertible notes payable converted $98,742 of outstanding principal. On April 7, 2020, the Company executed a three-year consulting agreement with Eagle Processing & Distribution, Inc. (“EPD”). Under the agreement, EPD is to provide outsourced services related to sales and distribution, marketing, social media, and website maintenance, logistics and order fulfillment, production, inventory management, customer service, risk management, and assistance with obtaining financing. EPD was granted 50,000,000 shares of common stock as compensation for the first eight months of the contract with compensation for the remainder of the contract to be negotiated prior to the end of the initial eight months. On June 30, 2020, EPD returned 25,000,000 common shares of the previously issued 50,000,000 shares pending the execution of an amendment to the April 7, 2020, consulting agreement. These common shares have not been cancelled and are included in shares outstanding. On April 21, 2020, the Company filed a Registration on Form S-8 to register 600,000 shares of common stock issued to a vendor as compensation for services provided. On April 29, 2020, the Company formed Rocky Mountain Productions, Inc. (“RMPI”), a wholly owned Nevada corporation. On April 30, 2020, RMPI purchased certain of the assets of Raw Pharma, LLC (“Raw Pharma”) including machinery, equipment, and fixtures. The facility has the capability to can and bottle product, including 12 oz. regular and sleek cans, 16 oz. cans, shots, and bottles. The purchase price for the assets consists of a combination of $1,750,000 in cash, 27,000,000 shares of common stock, and the assumption or refinancing of Raw Pharma’s bank debts secured by equipment in the amount of $1,007,000. The Company is also assuming the lease of Raw Pharma’s 20,000 square foot facility and certain equipment leases. The Company assumed no other liabilities in the transaction. In March and April 2020, the Company produced and delivered 146,880 and 149,760, respectively, cans of beverage to CBD Life. In July 2020 CBD Life informed the Company that numerous cans of the delivered product were leaking. The Company has agreed to replace the production run at its own expense and accrued related cost of $68,648 as of March 31, 2020. The production-related costs, including start-up costs and production overruns, were approximately $109,000 in June 2020. The Company has not agreed to refund the sales amount or provide any other consideration to the customer. The Company has investigated the cause of the leaking cans and is in the process of remediating the equipment issues it believes caused the packaging failures. Management believes the manufacturing issues will be resolved and the plant will be able to resume all production by September 15, 2020. Management has also held discussions with the prior owners of Raw Pharma (where the product was produced prior to our acquisition) and is negotiating an agreement to compensate the Company for losses related to the equipment issues. On April 29, 2020, the Company executed a $150,100 loan agreement with Comerica Bank under the Paycheck Protection Program (“PPP”) of the Small Business Administration (“SBA”). The loan bears interest at 1% and is due on April 29, 2022. If the Company meets certain PPP qualifications the loan will be forgiven by the SBA. Otherwise, monthly loan payments will commence November 1, 2020. On May 12, 2020, the Company executed a Settlement Agreement and Release with Texas Wellness Center (“TWC”), a subsidiary of GL Brands, Inc., related to the 200,000 can production run the Company ran for TWC in September 2019. Pursuant to the Settlement Agreement the Company agreed to issue 17,500,000 shares of common stock, with a market value of $367,500, on the settlement date. As of December 31, 2019, the Company reversed the $322,000 previously recorded in September 2019, recorded a common stock payable of $367,500 and accrued a $15,000 payment made to TWC in January 2020 to assist with TWC’s customer service-related issues. The companies mutually released each other from all other liabilities, including a $75,000 account payable to TWC for CBD used in the manufacturing of the beverages. The companies further agreed that if RMHB files a lawsuit seeking damages against its can vendor, it would pay TWC 30% of any net recovery. RMHB is not required to take any further action. On May 20, 2020, the Company executed a Release and Settlement Agreement with CHET-5 Broadcasting, Inc. (“CHET-5”) related to a breach of contract lawsuit filed by CHET-5 related to an advertising contract between the Company and CHET-5. The Company agreed to pay CHET-5 $9,000 in cash and 425,000 shares of common stock in exchange for full mutual releases. On September 9, 2020, the Company issued 420 shares of Series F Preferred Stock to GHS Investments, LLC in exchange for the maturity date extensions on three convertible notes payable and to waive any breaches related to the Company’s delinquent first and second quarter 2020 financial statement filings. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Significant Accounting Policies (Policies): | |
Basis of presentation | The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2020, and the results of operations and cash flows for the periods presented. The results of operations for the three months ended June 30, 2020, are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Form 10-K for the year ended December 31, 2019, filed with the SEC on July 9, 2020. |
Principles of consolidation | The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States. The consolidated financial statements include the accounts of the Company, its wholly owned and controlled subsidiaries. All intercompany balances and transactions have been eliminated. |
Use of Estimates | The preparation of the financial statements in conformity with Generally Accepted Accounting Principles (“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 dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Certain of the Company’s estimates could be affected by external conditions, including those unique to its industry, and general economic conditions. It is possible that these external factors could have an effect on the Company’s estimates that could cause actual results to differ from its estimates. The Company re-evaluates all its accounting estimates at least quarterly based on these conditions and record adjustments when necessary. |
Cash | The Company maintains cash balances at various financial institutions. At times, these balances may exceed federally insured limits. |
Restricted Cash | The Company classifies any cash that is legally restricted as to its withdrawal or usage as restricted cash. The following table provides a reconciliation of cash and restricted cash reported on the consolidated balance sheets to the total of those same amounts shown in our consolidated statements of cash flows: June 30, 2020 December 31, 2019 June 30, 2019 December 31, 2018 Cash $ 31,245 $ 53,606 $ 196,704 $ 147,386 Restricted cash — 14,474 80,751 466,300 Cash and restricted cash $ 31,245 $ 68,080 $ 277,455 $ 613,686 |
Revenue recognition | The Company follows the guidance of the Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers,” as amended. It records revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the selling price to the customer is fixed or determinable and collectability of the revenue is reasonably assured. The Company has not experienced any significant returns from customers and accordingly, in management’s opinion, no reserve for returns has been provided. Payments received prior to shipment of goods are recorded as deferred revenue. The following table represents sales by sales channel for each of the periods: Three Months Ended June 30, 2020 June 30, 2019 Online $ 20,195 $ 21,103 Private Label 636,240 — Distributor 12,224 1,421 Retailer 830 14,048 Total $ 669,489 $ 36,572 All sales for all periods presented were to domestic customers, except private label sales of $80,194 for the three months ended June 30, 2020. These private label sales were to CBD Life, S.A. (“CBD Life”) of Mexico. All sales to CBD Life are delivered to Laredo, Texas, where the customer takes title. Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC 606. The Company’s revenues accounted for under ASC 606, generally, do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The sales prices are generally fixed at the point of sale and all consideration from contracts is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration. In June 2020, the Company produced and delivered 146,880 cans of Rocket High, California Limonada, and California Te Negro branded product to CBD Life. In July 2020 the customer informed the Company that numerous cans of the delivered product were leaking. The Company agreed to replace the entire production run at its own expense and accrued related costs of $68,648 as of June 30, 2020. The production-related costs, including start-up costs and production overruns, were approximately $109,000. The customer has not requested, and the Company has not offered, any refund of the sales amount or to provide any other consideration to the customer. The $80,194 sales amount is included in sales for the three months ended June 30, 2020. |
Accounts Receivable and Allowance for Doubtful Accounts Receivable | The Company has a policy of reserving for uncollectible accounts based on the best estimate of the amount of probable credit losses in our existing accounts receivable. We extend credit to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable and perform ongoing credit evaluations of customers and maintain an allowance for potential bad debts if required. It is determined whether an allowance for doubtful accounts is required by evaluating specific accounts where information indicates the customers may have an inability to meet financial obligations. In these cases, we Direct write-offs are taken in the period when we have exhausted our efforts to collect overdue and unpaid receivables or otherwise evaluate other circumstances that indicate the collectability of receivables. |
Inventories | If the Company identifies excess, obsolete, or unsalable items, its inventories are written down to their realizable value in the period in which the impairment is first identified. Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of sales in the Company’s statements of operations. |
Fair Value Measurements | The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures,” which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short- and long-term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: • Level 1 — quoted prices in active markets for identical assets or liabilities. • Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable. • Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions). The derivative liability, which relates to the conversion feature of convertible debt and common stock warrants and options, is classified as a Level 3 liability, and is the only financial liability measure at fair value on a recurring basis. The change in the Level 3 financial instrument is as follows: Balance, December 31, 2019 $ 413,678 Issued during the three months ended June 30, 2020 357,719 Exercises/Conversions — Change in fair value recognized in operations — Balance, June 30, 2020 $ 771,391 The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model, using the following assumptions as of March 31, 2020: Estimated Dividends None Expected Volatility 145.0% Risk Free Interest Rate 0.041% Expected term .1 to 1.5 years |
Property and equipment | Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets, which generally range from three to five years. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred. |
Leases | On January 1, 2020, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) |
Capitalized software | Direct costs related to software development, including coding, website application development, infrastructure development and graphics development, are capitalized and included in other assets. Amortization is provided for on a straight-line basis over the useful life of the software. Costs related to planning, content development, and operating and maintaining software are expensed as incurred. |
Impairment of Long-Lived Assets | The Company evaluates intangible assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flow and recognizes an impairment loss when the estimated undiscounted future cash flow expected to result from the use of the asset plus the net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When the Company identifies an impairment, it reduces the carrying amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values. No impairment charges were recorded during the three months ended June 30, 2020, and 2019. |
Share-based Payments | Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values, in accordance with FASB ASC Topic 718. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). The Company had no common stock options or common stock equivalents granted or outstanding for all periods presented. The Company issued restricted stock to consultants and employees for various services. Cost for these transactions is measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is to be measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete. |
Convertible Instruments | The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities.” Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. |
Preferred Stock | We apply the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity” when determining the classification and measurement of preferred stock. Preferred shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. We classify conditionally redeemable preferred shares (if any), which includes preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control, as temporary equity. At all other times, we classified our preferred shares in stockholders’ equity. Our preferred shares do not feature any redemption rights within the holders’ control or conditional redemption features not within our control. Accordingly, unless otherwise noted, all issuances of preferred stock are presented as a component of consolidated shareholders’ deficit. |
Advertising | Advertising and marketing expenses are charged to operations as incurred. |
Income Taxes | The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all the deferred tax assets will not be realized. ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions. |
Reclassifications | Certain reclassifications have been made to prior year consolidated financial statements to conform to classifications used in the current year. |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Reconcilation of cash and restricted cash | June 30, 2020 December 31, 2019 June 30, 2019 December 31, 2018 Cash $ 31,245 $ 53,606 $ 196,704 $ 147,386 Restricted cash — 14,474 80,751 466,300 Cash and restricted cash $ 31,245 $ 68,080 $ 277,455 $ 613,686 |
change in level 3 | Balance, December 31, 2019 $ 413,678 Issued during the three months ended June 30, 2020 357,719 Exercises/Conversions — Change in fair value recognized in operations — Balance, June 30, 2020 $ 771,391 |
The estimated fair value of the derivative instruments | Estimated Dividends None Expected Volatility 145.0% Risk Free Interest Rate 0.041% Expected term .1 to 1.5 years |
Sales by sales channel | Three Months Ended June 30, 2020 June 30, 2019 Online $ 20,195 $ 21,103 Private Label 636,240 — Distributor 12,224 1,421 Retailer 830 14,048 Total $ 669,489 $ 36,572 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | June 30, 2020 December 31, 2019 Finished inventory $ 51,591 $ 160,763 Raw materials and packaging 98,349 77,272 Total $ 149,940 $ 238,035 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses | June 30, 2020 December 31, 2019 Prepaid officers’ compensation $ — $ 143,233 Prepaid production 12,500 — Other prepaid expenses and current assets 1,093,110 31,493 Total $ 1,105,610 $ 174,726 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Notes to Financial Statements | |
Property and equipment | June 30, 2020 December 31, 2019 Vehicles $ 14,687 $ 14,687 Furniture and equipment 2,101,920 45,322 Personal computers 16,667 17,901 2,193,270 77,910 Less: accumulated depreciation 57,257 58,568 Total $ 2,136,017 $ 19,342 |
Accounts Payable amd Accrued _2
Accounts Payable amd Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | June 30, 2020 December 31, 2019 Accounts payable $ 458,904 $ 440,788 Accrued compensation — 51,500 Common stock payable 396,850 417,850 Other accrued expenses 406,986 233,079 Total $ 1,262,740 $ 1,143,217 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Convertible Notes Payable | Interest Rates Term Conversion Rates December 31, 2019 GHS Investments, LLC (fixed conversion) 10% .3 - .75 years $ 0.01 $ 849,208 $ 1,035,750 Eagle Equities, LLC 8% 1.3 – 1.5 years (a) 298,750 — LSW Holdings, LLC (variable conversion) 6% — (b) 179,000 179,000 Discount (345,048 ) (205,800) Total $ 981,910 $ 1,008,950 |
Notes Payable (Tables)
Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | Interest Rate Term June 30, 2020 December 31, 2019 Notes payable 0% Due $ 603,382 $ 30,000 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Summary rollforward of deferred revenue | December 28, 2018, deposit received $ 466,300 December 2019 delivery (20,375) Balance as of December 31, 2019 $ 445,925 January 30, 2020, deposit received 97,060 June 2020 deliveries 32,289 Balance as of June 30, 2020 $ 462,791 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Income Taxes {3} | |
Schedule of reconciliation of income tax benefit | Three Months Ended June 30, 2020 June 30, 2019 U.S. federal statutory rate (21 %) (21 %) State income tax, net of federal benefit (0.0 %) (0.0 %) Increase in valuation allowance 21 % 21 % Income tax provision (benefit) 0.0 % 0.0 % |
Schedule of Deferred Tax Assets and Liabilities | June 30, 2020 December 31, 2019 Deferred Tax Assets Net Operating Losses $ 4,700,000 $ 4,620,000 Less: Valuation Allowance $ (4,700,000 ) $ (4,620,000) Deferred Tax Assets – Net — — |
General (Details Narrative)
General (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended |
Apr. 22, 2019 | Jun. 30, 2020 | |
Accounting Policies [Abstract] | ||
Name Change to Totally Hemp Crazy, Inc | Jul. 17, 2014 | |
Name Change to Rocky Mountain High Brands, Inc. | Oct. 23, 2015 | |
Reverse stock split, description | On April 22, 2019 the reverse split of the Company’s Stock, at a ratio of one share for every 20 shares, was effective. All common stock share and per share amounts in this document reflect this reverse split. | |
Acquisition, purchase price | $ 1,971,200 | |
Shares issued for acquisition | 31,700,000 |
Reconcilation of Cash and Restr
Reconcilation of Cash and Restricted Cash (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Level 3 Financial Instrument Narrative Details | ||||
Cash | $ 32,240 | $ 53,606 | $ 196,704 | $ 147,386 |
Restricted cash | 14,474 | 80,751 | 466,300 | |
Cash and restricted cash | $ 32,240 | $ 123,455 | $ 68,563 | $ 613,686 |
Level 3 Financial Instrument Na
Level 3 Financial Instrument Narrative (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Level 3 Financial Instrument Narrative Details | ||
Opening Balance of Financial Instrument | $ 413,678 | |
Stock issued | $ 357,719 | |
Exercises | ||
Change in fair value recognized in operations | ||
Closing Balance of Finacial Instrument | $ 371,391 |
Estimated Fair Value Of Derivat
Estimated Fair Value Of Derivative Instruments Using Black-Scholes Option Pricing Model (Details) | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Estimated Dividends | |
Expected Volatility | 145.00% |
Risk Free Interest Rate | 0.41% |
Term Minimum | |
Expected Term in years Minimum | 1 month 6 days |
Maximum Exercise Price | |
Expected Term in years Minimum | 1 year 6 months |
Revenue From Contracts with Cus
Revenue From Contracts with Customers (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Contract with Customer, Asset, after Allowance for Credit Loss [Abstract] | ||
Online sales | $ 20,195 | $ 21,103 |
Private label sales | 636,240 | |
Distributor sales | $ 12,224 | $ 1,421 |
Retailer sales | 830 | 14,048 |
Total sales | $ 669,489 | $ 36,572 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Basis of Presentation: | ||
Impairment of intangible assets | ||
Related costs of damaged goods | 68,648 | |
Production related costs | 109,000 | |
Private label sales | $ 636,240 |
Going Concern (Details)
Going Concern (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Going Concern Details | ||
Shareholders deficit | $ (1,207,165) | |
Accumulated deficit | $ (42,734,969) | $ (40,285,145) |
Inventory (Details)
Inventory (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished Inventory | $ 51,591 | $ 160,763 |
Raw Materials and Packaging | 98,349 | 77,272 |
Total Inventory | $ 349,940 | $ 238,035 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Prepaid Officers Compensation | $ 143,233 | |
Prepaid production expenses | 12,500 | |
Other prepaid expenses and current assets | 1,093,110 | 31,493 |
Total prepaid expenses and other current assets | $ 1,105,610 | $ 174,726 |
Property And Equipment (Details
Property And Equipment (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Property And Equipment Details | ||
Vehicles | $ 14,687 | $ 14,687 |
Furniture and Equipment | 2,101,920 | 45,322 |
Personal computer book value | 16,667 | 17,901 |
Subtotal | 2,193,270 | 77,910 |
Less Accumulated Depreciation | 57,257 | 58,568 |
Total | $ 2,136,017 | $ 19,342 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 2,933 | $ 4,161 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 2,601 | $ 2,601 |
Accounts Payable amd Accrued _3
Accounts Payable amd Accrued Liabilities (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accounts Payable | $ 458,904 | $ 440,788 |
Accrued Compensation | 51,500 | |
Common stock payable | 396,850 | 417,850 |
Other Accrued Expenses | 406,986 | 233,079 |
Total | $ 1,262,740 | $ 1,143,217 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Convertible notes, term | 0 days | ||
Discount | $ (345,048) | $ (345,048) | $ (205,800) |
Total | 981,910 | $ 981,910 | 1,008,950 |
GHS Note Payable | |||
Convertible notes payable | $ 849,208 | 1,035,750 | |
Convertible notes interest rate | 10.00% | 10.00% | |
Conversion rate | 1.00% | ||
GHS Note Payable | Term Minimum | |||
Convertible notes, term | 3 months 18 days | ||
GHS Note Payable | Maximum Exercise Price | |||
Convertible notes, term | 9 months | ||
Eagle Equities Note Payable | |||
Convertible notes payable | $ 298,750 | ||
Convertible notes interest rate | 8.00% | 8.00% | |
Eagle Equities Note Payable | Term Minimum | |||
Convertible notes, term | 1 year 3 months 18 days | ||
Eagle Equities Note Payable | Maximum Exercise Price | |||
Convertible notes, term | 1 year 6 months | ||
LSW Note Payable | |||
Convertible notes payable | $ 179,000 | $ 179,000 | |
Convertible notes interest rate | 6.00% | 6.00% |
Convertible Notes Payable (De_2
Convertible Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Interest expense including amortization of discount | $ 135,671 | $ 293,189 | |
Derivative liability related to convertible notes payable | $ 728,976 | $ 403,971 | |
LSW Note Payable | |||
Conversion terms | 50% discount on the average of the 3 lowest closing bid prices during the 10 trading days prior to conversion ($0.019). | ||
Eagle Equities Note Payable | |||
Conversion terms | Fixed conversion rate for the first 180 days ($0.03 as of March 31, 2020). 40% discount on the lowest closing bid price during the 20 trading days prior to conversion after 180 days. |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Notes Payable | $ 603,382 | $ 30,000 |
Interest Rate | 0.00% | |
Note payable term | 0 days |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Two Non Interest Notes | ||
Note payable | $ 30,000 | $ 30,000 |
Deferred Revenue (Details)
Deferred Revenue (Details) - USD ($) | 1 Months Ended | |||
Jun. 30, 2020 | Dec. 31, 2019 | Jan. 30, 2020 | Dec. 28, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | ||||
Deferred revenue deposit | $ 97,060 | $ 466,300 | ||
Deferred revenue delivery | $ 80,194 | $ 20,375 | ||
Deferred revenue balance | $ 510,696 | $ 445,925 |
Deferred Revenue (Details Narra
Deferred Revenue (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2020 | Jan. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Jan. 30, 2020 | Jan. 31, 2019 | Dec. 28, 2018 | |
Customer deposit | $ 97,060 | $ 466,300 | |||||||||||
Revenue recorded | $ 669,489 | $ 36,572 | $ 782,932 | $ 113,001 | |||||||||
Operating bank account balance | $ 14,474 | $ 466,300 | $ 80,751 | $ 80,751 | $ 14,474 | ||||||||
Related costs to replace production | 68,648 | $ 68,648 | 68,648 | ||||||||||
Production related costs | 12,500 | ||||||||||||
Master Manufacturing Agreement | |||||||||||||
Purchase order | $ 932,600 | ||||||||||||
Production value | $ 20,375 | ||||||||||||
Revenue recorded | $ 80,194 | ||||||||||||
CBD Life | |||||||||||||
Deposit received | $ 156,000 | $ 466,300 | |||||||||||
Production related costs | $ 109,000 | ||||||||||||
Optimus Fulfill | |||||||||||||
Customer deposit | $ 156,000 | ||||||||||||
Refunds receieved | $ 20,000 |
Shareholders' Deficit - Common
Shareholders' Deficit - Common Stock and Preferred Stock (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
Apr. 22, 2019 | Mar. 31, 2020shares | Jun. 30, 2020shares | Dec. 31, 2019shares | |
Common Stock Details | ||||
Shares of Common Stock Authorized | 1,000,000,000 | |||
Common Stock, shares issued and outstanding | 284,451,184 | 137,914,630 | ||
Reverse stock split ratio | 0.05 | |||
Common stock issued during period | 18,635,070 | |||
Common stock issued for convertible notes payable conversion | 12,437,084 | 12,437,084 | ||
Common stock issued to board member | 4,895,286 | |||
Common stock issued for compensation | 802,700 | 802,700 | ||
Series G preferred shares converted to common shares, shares | 500,000 | 500,000 | ||
Preferred Stock Authorized | 20,000,000 | |||
Preferred Stock Designated | 12,801,154 | |||
Undesignated Preferred Shares | 7,198,846 |
Shareholders' Deficit - Series
Shareholders' Deficit - Series A Preferred Stock (Details Narrative) - shares | Jun. 30, 2020 | Dec. 31, 2019 |
Preferred stock, shares designated | 12,806,154 | 12,801,154 |
Preferred stock, shares outstanding | 10 | |
Series A Preferred | ||
Preferred stock, shares designated | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding |
Shareholders' Deficit - Serie_2
Shareholders' Deficit - Series B Preferred Stock (Details Narrative) - shares | Jun. 30, 2020 | Dec. 31, 2019 |
Preferred stock, shares designated | 12,806,154 | 12,801,154 |
Preferred stock, shares outstanding | 10 | |
Series B Preferred | ||
Preferred stock, shares designated | 7,000,000 | 7,000,000 |
Preferred stock, shares outstanding |
Shareholders' Deficit - Serie_3
Shareholders' Deficit - Series C Preferred Stock (Details Narrative) - shares | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Preferred stock, shares designated | 12,806,154 | 12,801,154 |
Preferred stock, shares outstanding | 10 | |
Series C Preferred | ||
Preferred stock, shares designated | 2,000,000 | 2,000,000 |
Preferred stock, shares outstanding | ||
Preferred stock, interest rate | 12.00% | |
Preferred stock , conversion terms | Series C Preferred Stock is 12% interest bearing, cumulative, exchangeable, non-voting, convertible preferred stock of the Company. Each Series C Preferred share is convertible to 2.5 shares of common stock. |
Shareholders' Deficit - Serie_4
Shareholders' Deficit - Series D Preferred Stock (Details Narrative) - shares | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Preferred stock, shares designated | 12,806,154 | 12,801,154 |
Preferred stock, shares outstanding | 10 | |
Series D Preferred | ||
Preferred stock, shares designated | 2,000,000 | 2,000,000 |
Preferred stock, shares outstanding | ||
Preferred stock , conversion terms | Series D Preferred Stock is a non-voting, non-interest bearing convertible preferred stock. Each Series D preferred share is convertible to 5 shares of common stock. |
Shareholders' Deficit - Serie_5
Shareholders' Deficit - Series E Preferred Stock (Details Narrative) - shares | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Preferred stock, shares designated | 12,806,154 | 12,801,154 |
Preferred stock, shares outstanding | 10 | |
Series E Preferred | ||
Preferred stock, shares designated | 789,474 | 789,474 |
Preferred stock, shares outstanding | ||
Preferred stock , terms | Holders of Series E Preferred Stock are entitled to cast 100 votes per share of Series E Preferred Stock on any proposal to increase our authorized capital stock, with no other voting rights. Each share of Series E Preferred Stock is convertible to 20 shares of common stock. |
Shareholders' Deficit - Serie_6
Shareholders' Deficit - Series F Preferred Stock (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | |
Dec. 20, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | |
Preferred stock, shares designated | 12,806,154 | 12,801,154 | |
Preferred stock, shares outstanding | 10 | ||
Preferred stock, shares sold | 18,635,070 | ||
Preferred Stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, stated value of shares | |||
Series F Preferred | |||
Preferred stock, shares designated | 1,680 | 1,680 | 1,680 |
Preferred stock, shares outstanding | 330 | 130 | |
Preferred stock, shares sold | 130 | 200 | |
Preferred Stock, par value | $ 0.001 | ||
Preferred stock, stated value of shares | $ 1,200 | ||
Preferred stock, dividend accrual rate | 12.00% | ||
Preferred stock , terms | The Series F Preferred Stock has a par value of $.001, stated value of $1,200, accrues dividends at 12%, is convertible to common stock based on a 20-day trailing volume weighted average low share price, and is senior to other preferred stock |
Shareholders' Deficit - Serie_7
Shareholders' Deficit - Series G Preferred Stock (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | |
Dec. 20, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | |
Preferred stock, shares designated | 12,806,154 | 12,801,154 | |
Preferred stock, shares outstanding | 10 | ||
Preferred Stock, par value | $ 0.001 | $ 0.001 | |
Series G Preferred | |||
Preferred stock, shares designated | 10,000 | 10,000 | 10,000 |
Preferred stock, shares outstanding | 10,000 | ||
Preferred stock, shares issued for compensation | 10,000 | ||
Compensation owed in exchange for shares issued | $ 10,000 | ||
Preferred Stock, par value | $ 0.001 | ||
Preferred stock, conversion terms | The holder of Series G Preferred Stock has the right to cast 20,000 votes for every one share of Series G Preferred Stock | ||
Preferred stock, shares issued upon conversion | 20,000 | ||
Preferred stock , terms | The Series G Preferred Stock has a par value of $.001, is non-interest and non-dividend earning, and each share is convertible to 50 shares of common stock. The holder of Series G Preferred Stock has the right to cast 20,000 votes for every one share of Series G Preferred Stock on any and all proposals to amend the Company’s Articles of Incorporation to increase the authorized capital stock of the Company |
Shareholders' Deficit - Serie_8
Shareholders' Deficit - Series H Preferred Stock (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | |
Feb. 25, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Preferred stock, shares designated | 12,806,154 | 12,801,154 | |
Preferred stock, shares outstanding | 10 | ||
Preferred Stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, stated value of shares | |||
Series H Preferred | |||
Preferred stock, shares designated | 5,000 | 5,000 | |
Preferred stock, shares outstanding | 11 | ||
Preferred Stock, par value | $ 0.001 | ||
Preferred stock, stated value of shares | $ 1,200 | ||
Preferred stock, dividend accrual rate | 12.00% | ||
Preferred stock , terms | The Series H Preferred Stock has a par value of $.001, stated value of $1,200, accrues dividends at 12%, and is convertible to common stock based on a 20-day trailing volume weighted average low share price |
Shareholders' Deficit - Warrant
Shareholders' Deficit - Warrants (Details Narrative) - Warrants - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Common stock warrants outstanding | 632,500 | 607,500 |
Common Stock warrants granted | $ 0 | $ 0 |
Common Stock warrants exercised | 0 | 0 |
Warrants forfeited | 0 | 0 |
Term Minimum | ||
Common stock warrants, exercise price | $ 0.02 | $ 0.02 |
Maximum Exercise Price | ||
Common stock warrants, exercise price | $ 0.40 | $ 0.40 |
Shareholders' Deficit - Options
Shareholders' Deficit - Options (Details Narrative) - shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Options outstanding | |||
Options | |||
Options issued | 500,000 | ||
Options outstanding | |||
Options forfeited | |||
Options exercised |
Noncontrolling Interest (Detail
Noncontrolling Interest (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended |
Jul. 31, 2019 | Jun. 30, 2020 | |
Rocky Mountain High Brands, Inc. | ||
Investment in Sweet Rock, LLC | $ 500 | |
Ownership in investment, percent | 51.00% | |
Sweet Ally, Inc. | ||
Investment in Sweet Rock, LLC | $ 495 | |
Ownership in investment, percent | 49.00% | |
Sweet Rock, LLC | ||
Marketing expenses | $ 0 |
Concentrations (Details)
Concentrations (Details) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Large Customer One | ||
Major customer sales concentration | 71.00% | 17.00% |
Large Customer Two | ||
Major customer sales concentration | 12.00% | 2.00% |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of income tax benefit (Details) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Reconciliation of income tax benefit Details | ||
U.S federal statutory rate | (21.00%) | (21.00%) |
State income tax, net of federal benefit | (0.00%) | (0.00%) |
Increase in valuation allowance | 21.00% | 21.00% |
Income tax provision (benefit) | 0.00% | 0.00% |
Income Taxes - Net deferred tax
Income Taxes - Net deferred tax liability (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Net deferred tax liability Details | ||
Net Operating Losses | $ 4,700,000 | $ 4,620,000 |
Less: Valuation Allowance | (4,700,000) | (4,620,000) |
Deferred tax assets - net |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 6 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2017 | |
Federal and state net operating loss carryovers | $ 22,000,000 | ||||
Deferred tax expense | $ 2,000,000 | $ 2,000,000 | |||
Federal corporate tax rate | 21.00% | 21.00% | |||
Federal corporate tax rate before change | 35.00% | ||||
U.S. Corporate Tax Rate Current | |||||
U.S. corporate tax rate | 21.00% | ||||
U.S. Corporate Tax Rate Previous | |||||
U.S. corporate tax rate | 34.00% |
Commitments (Details Narrative)
Commitments (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | ||||
Jan. 18, 2020 | Jan. 18, 2018 | Jun. 30, 2020 | Feb. 28, 2020 | Sep. 05, 2019 | Sep. 01, 2016 | |
Lease expiration date | Feb. 29, 2020 | |||||
Original Office Lease | ||||||
Lease payment due year one | $ 7,715 | |||||
Lease payment due year two | 7,972 | |||||
Lease payment due year three | $ 8,229 | |||||
Amended Office Lease | ||||||
Lease payment due year one | $ 8,065 | |||||
Second Amended Office Lease | ||||||
Lease payment due year one | $ 3,549 | |||||
Denver Colorado Lease | ||||||
Term of Lease | 12 months | |||||
Monthly lease payments | $ 122 | $ 91 |
Other (Income)_Expenses (Detail
Other (Income)/Expenses (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Loss on Extinguishment of Debt | $ (689,991) | $ 74,164 | $ (230,840) | |
(Gain) Loss on Change in Fair Value of Derivative Liability | $ 15,894 | $ (390,520) | $ 37,429 | $ 195,063 |