Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2020 | |
Cover [Abstract] | |
Entity Registrant Name | QUANTA INC |
Entity Central Index Key | 0001691430 |
Document Type | S-1 |
Amendment Flag | false |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business Flag | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | |||
Cash | $ 11,000 | $ 433,143 | $ 35,820 |
Accounts receivable | 6,000 | 28,260 | 19,561 |
Inventories | 157,000 | 122,519 | |
Prepaid expenses | 7,500 | ||
Total current assets | 174,000 | 591,422 | 55,381 |
Equipment, net | 232,000 | 313,478 | 372,880 |
Operating lease right-of-use asset, net | 383,000 | 332,980 | |
Deposits | 17,000 | 33,652 | 16,770 |
Total assets | 806,000 | 1,271,532 | 445,031 |
Current liabilities: | |||
Accounts payable and accrued expenses | 460,000 | 73,598 | 9,617 |
Notes payable (net of discount of $25 and deferred finance charges of $89 at September 30, 2020), ($55,850 in default at December 31, 2019) | 420,000 | 55,850 | 180,000 |
Convertible note payable (net of premium of $125 and $0 and discount of $497 and $255, respectively) | 600,000 | 57,340 | |
Deferred revenue, license agreement | 43,000 | 32,742 | |
Operating lease liabilities, short-term | 99,000 | 85,662 | |
Settlement Reserve | 236,000 | ||
Derivative liabilities | 400,139 | ||
Total current liabilities | 1,858,000 | 705,331 | 189,617 |
Long term liabilities | |||
Deferred revenue, licenses agreement, long-term | 35,470 | ||
Notes payable, long term | 483,000 | ||
Operating lease liabilities, long-term | 315,000 | 251,791 | |
Total liabilities | 2,656,000 | 992,592 | |
Stockholders' equity (deficit) | |||
Preferred stock, value | 2,000 | ||
Common stock, value | 62,000 | 49,087 | 39,200 |
Shares to be issued | 3,320,000 | 2,847,868 | 306,000 |
Additional paid-in capital | 8,935,000 | 5,619,733 | 2,360,598 |
Accumulated deficit | (14,169,000) | (8,237,748) | (2,450,384) |
Total stockholders' equity (deficit) | (1,850,000) | 278,940 | 255,414 |
Total liabilities and stockholders' equity (deficit) | $ 806,000 | $ 1,271,532 | $ 445,031 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | |||
Notes payable, discount | $ 25,000 | ||
Notes payable, deferred finance charges | 89,000 | ||
Notes payable | 903,000 | $ 55,850 | |
Convertible note payable, premium | 125,000 | 0 | |
Convertible note payable, discount | $ 497,000 | $ 255,000 | |
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 2,500,000 | ||
Preferred stock, shares outstanding | 2,500,000 | ||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued | 60,779,130 | 49,087,255 | 39,200,090 |
Common stock, shares outstanding | 60,779,130 | 49,087,255 | 39,200,090 |
Shares to be issued, shares | 4,250,000 | 7,318,519 | 612,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
Total revenue | $ 324,000 | $ 393,000 | $ 999,000 | $ 931,000 | $ 225,254 | $ 1,268,988 |
Cost of goods sold | 52,000 | 74,000 | 151,000 | 230,000 | 183,681 | 303,720 |
Gross profit | 272,000 | 319,000 | 848,000 | 701,000 | 41,573 | 965,268 |
Operating expenses: | ||||||
Labor and related | 454,179 | 1,302,391 | ||||
Compensation and benefits | 371,000 | 338,000 | 1,157,000 | 832,000 | ||
Selling, general, and administrative | 840,000 | 784,000 | 3,494,000 | 2,670,000 | 1,055,805 | 4,799,030 |
Research and development | 62,000 | 115,000 | 307,000 | 196,000 | 207,600 | 351,670 |
Impairment of operating lease right of use asset | 255,000 | 255,000 | ||||
Total operating expenses | 1,528,000 | 1,237,000 | 5,213,000 | 3,698,000 | 1,717,584 | 6,453,091 |
Loss from operations | (1,256,000) | (918,000) | (4,365,000) | (2,997,000) | (1,676,011) | (5,487,823) |
Other income (expense): | ||||||
Change in fair value of derivative liability | (182,000) | 101,000 | 19,491 | |||
Discount Amortization | (117,000) | (396,000) | ||||
Extinguishment of derivative liabilities | 145,565 | |||||
Private placement costs | (238,395) | |||||
Gain on forgiveness of accrued interest | 21,000 | |||||
Gain (loss) on extinguishment of debt | (1,081,000) | (795,000) | 41,000 | |||
Interest expense | (70,000) | (10,000) | (476,000) | (20,000) | (226,239) | |
Interest income | 39 | 37 | ||||
Other income (expense), net | (1,450,000) | (10,000) | (1,566,000) | (20,000) | 62,039 | (299,541) |
Net loss | $ (2,706,000) | $ (928,000) | $ (5,931,000) | $ (3,017,000) | $ (1,613,972) | $ (5,787,364) |
Net loss per share, basic and diluted | $ (0.05) | $ (0.02) | $ (0.11) | $ (0.08) | $ (0.05) | $ (0.14) |
Weighted average common shares outstanding - basic and diluted | 57,844,835 | 41,823,505 | 56,034,097 | 40,092,030 | 35,100,108 | 42,808,603 |
Sales, Net [Member] | ||||||
Total revenue | $ 315,000 | $ 384,000 | $ 973,000 | $ 914,000 | $ 225,254 | $ 1,237,200 |
Distributor License Fees [Member] | ||||||
Total revenue | $ 9,000 | $ 9,000 | $ 26,000 | $ 17,000 | $ 31,788 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Series A Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Shares to be Issued [Member] | Accumulated Deficit [Member] | Total |
Balance at Mar. 31, 2018 | $ 21,909 | $ (11,909) | $ (836,412) | $ (826,412) | ||
Balance, shares at Mar. 31, 2018 | 21,908,810 | |||||
Shares issued for recapitalization | $ 6,500 | (6,500) | ||||
Shares issued for recapitalization, Shares | 6,500,000 | |||||
Costs of recapitalization | (495,760) | (495,760) | ||||
Shares issued for cash | $ 6,500 | 1,293,518 | 1,300,018 | |||
Shares issued for cash, share | 6,500,090 | |||||
Fair value of shares issued for settlement of convertible notes payable | $ 3,771 | $ 1,011,229 | $ 1,015,000 | |||
Fair value of shares issued for settlement of convertible notes payable, shares | 3,771,040 | |||||
Fair value of shares issued for services | 520 | 193,510 | 194,030 | |||
Fair value of shares issued for services, shares | $ 520,150 | |||||
Fair value of warrants issued for services | $ 376,510 | $ 376,510 | ||||
Cash received for shares to be issued | 306,000 | 306,000 | ||||
Net loss | (1,613,972) | (1,613,972) | ||||
Balance at Dec. 31, 2018 | $ 39,200 | 2,360,598 | 306,000 | (2,450,384) | 255,414 | |
Balance, shares at Dec. 31, 2018 | 39,200,090 | |||||
Shares issued for cash | $ 3,000 | $ 1,315,000 | $ (206,000) | $ 1,112,000 | ||
Shares issued for cash, share | 2,642,750 | |||||
Fair value of shares issued for services | 106,000 | 1,750,000 | 1,856,000 | |||
Fair value of shares issued for services, shares | $ 212,505 | |||||
Shares issued for cashless exercise of warrants | $ 3,000 | $ (3,000) | ||||
Shares issued for cashless exercise of warrants, shares | 2,590,910 | |||||
Net loss | (3,018,000) | (3,017,000) | ||||
Balance at Sep. 30, 2019 | $ 45,000 | 3,778,000 | 1,850,000 | (5,468,000) | 205,000 | |
Balance, shares at Sep. 30, 2019 | 44,646,255 | |||||
Balance at Dec. 31, 2018 | $ 39,200 | 2,360,598 | 306,000 | (2,450,384) | 255,414 | |
Balance, shares at Dec. 31, 2018 | 39,200,090 | |||||
Shares issued for cash | $ 6,331 | $ 2,084,044 | $ 2,090,375 | |||
Shares issued for cash, share | 6,330,750 | |||||
Fair value of shares issued for services | 213 | 106,040 | 2,317,868 | 2,424,121 | ||
Fair value of shares issued for services, shares | $ 212,505 | |||||
Cash received for shares to be issued | $ 530,000 | $ 530,000 | ||||
Issuance of shares | $ 612 | 305,388 | (306,000) | |||
Issuance of shares, shares | 612,000 | |||||
Shares issued for cashless exercise of warrants | $ 2,590 | (2,590) | ||||
Shares issued for cashless exercise of warrants, shares | 2,590,910 | |||||
Fair value of vested options | 711,404 | 711,404 | ||||
Fair value of shares issued for loan fee | $ 141 | 54,849 | 54,990 | |||
Fair value of shares issued for loan fee, shares | 141,000 | |||||
Net loss | (5,787,364) | (5,787,364) | ||||
Balance at Dec. 31, 2019 | $ 49,087 | 5,619,733 | 2,847,868 | (8,237,748) | 278,940 | |
Balance, shares at Dec. 31, 2019 | 49,087,255 | |||||
Balance at Jun. 30, 2019 | $ 42,000 | 2,374,000 | 2,303,000 | (4,539,000) | 180,000 | |
Balance, shares at Jun. 30, 2019 | 41,823,505 | |||||
Shares issued for cash | $ 3,000 | $ 937,000 | $ (454,000) | $ 486,000 | ||
Shares issued for cash, share | 2,642,750 | |||||
Fair value of shares issued for services | 467,000 | 467,000 | ||||
Fair value of shares issued for services, shares | $ 180,000 | |||||
Net loss | $ (928,000) | $ (928,000) | ||||
Balance at Sep. 30, 2019 | $ 45,000 | 3,778,000 | 1,850,000 | (5,468,000) | 205,000 | |
Balance, shares at Sep. 30, 2019 | 44,646,255 | |||||
Balance at Dec. 31, 2019 | $ 49,087 | 5,619,733 | 2,847,868 | (8,237,748) | 278,940 | |
Balance, shares at Dec. 31, 2019 | 49,087,255 | |||||
Shares issued for cash | $ 1,000 | $ 75,000 | $ 50,000 | $ 126,000 | ||
Shares issued for cash, share | 407,408 | |||||
Fair value of shares issued for services | 1,000 | 24,000 | 946,000 | 971,000 | ||
Fair value of shares issued for services, shares | $ 750,000 | |||||
Issuance of shares | $ 6,000 | $ 529,000 | $ (535,000) | |||
Issuance of shares, shares | 5,000,000 | |||||
Fair value of vested options | 250,000 | 250,000 | ||||
Fair value of shares issued to employees and officer | $ 1,000 | 105,000 | 106,000 | |||
Fair value of shares issued to employees and officer, shares | 451,198 | |||||
Shares issued for conversion of Convertible Notes | $ 3,000 | 208,000 | 211,000 | |||
Shares issued for conversion of Convertible Notes, shares | 3,955,747 | |||||
Fair value of preferred shares issued to officer | $ 2,000 | 463,000 | 465,000 | |||
Fair value of preferred shares issued to officer, shares | 2,500,000 | |||||
Beneficial conversion feature of issued convertible notes | 1,568,000 | 1,568,000 | ||||
Fair value of shares issued for loan fee | $ 1,000 | 93,000 | 11,000 | 105,000 | ||
Fair value of shares issued for loan fee, shares | 1,127,522 | |||||
Net loss | (5,931,000) | (5,931,000) | ||||
Balance at Sep. 30, 2020 | $ 2,000 | $ 62,000 | 8,935,000 | 3,320,000 | (14,169,000) | (1,850,000) |
Balance, shares at Sep. 30, 2020 | 2,500,000 | 60,779,130 | ||||
Balance at Jun. 30, 2020 | $ 2,000 | $ 57,000 | 7,474,000 | 3,116,000 | (11,463,000) | (814,000) |
Balance, shares at Jun. 30, 2020 | 2,500,000 | 56,900,978 | ||||
Shares issued for cash | $ 20,000 | $ 20,000 | ||||
Shares issued for cash, share | ||||||
Fair value of shares issued for services | (162,000) | 184,000 | 22,000 | |||
Fair value of shares issued for services, shares | $ (500,117) | |||||
Fair value of vested options | $ 68,000 | $ 68,000 | ||||
Fair value of shares issued to employees and officer | $ 1,000 | 54,000 | 55,000 | |||
Fair value of shares issued to employees and officer, shares | ||||||
Shares issued for conversion of Convertible Notes | $ 3,000 | 208,000 | 211,000 | |||
Shares issued for conversion of Convertible Notes, shares | 3,955,747 | |||||
Beneficial conversion feature of issued convertible notes | 1,277,000 | 1,277,000 | ||||
Fair value of shares issued for loan fee | $ 1,000 | 16,000 | 17,000 | |||
Fair value of shares issued for loan fee, shares | 422,522 | |||||
Net loss | (2,706,000) | (2,706,000) | ||||
Balance at Sep. 30, 2020 | $ 2,000 | $ 62,000 | $ 8,935,000 | $ 3,320,000 | $ (14,169,000) | $ (1,850,000) |
Balance, shares at Sep. 30, 2020 | 2,500,000 | 60,779,130 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ||||
Net loss | $ (5,931,000) | $ (3,017,000) | $ (1,613,972) | $ (5,787,364) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation | 162,000 | 122,000 | 86,875 | 173,902 |
Fair value of vested options | 250,000 | 711,404 | ||
Fair value of shares issued for services | 1,068,000 | 1,856,000 | 194,030 | 2,424,121 |
Fair value of common shares issued to employees and officer | 106,000 | |||
Fair value of preferred shares issued to officer | 465,000 | |||
Fair value of warrants issued for services | 376,510 | |||
Extinguishment of derivative liabilities | (145,565) | |||
Change in fair value of derivative | (101,000) | (19,491) | ||
Gail (Loss) on debt extinguishment | 795,000 | (41,000) | ||
Impairment of operating lease right of use asset | 255,000 | |||
Fee Notes Issued | 60,000 | |||
Net Gain on Settlement of AP and Accrued Expenses | (16,000) | |||
Accretion of Premium | 226,000 | |||
Private placement costs | 238,395 | |||
Amortization of convertible note discount | 396,000 | 185,330 | ||
Gain on forgiveness of accrued interest | (21,000) | |||
Amortization of right-of-use asset | 106,000 | 58,000 | 87,132 | |
Interest accrual | ||||
Changes in operating assets and liabilities: | ||||
Accounts receivable | 22,000 | (37,000) | (19,561) | (8,699) |
Inventories | (34,000) | (122,519) | ||
Prepaid Expenses | 7,000 | (7,500) | ||
Accounts payable and accrued liabilities | 386,000 | 29,000 | 9,617 | 63,981 |
Deferred revenue | (26,000) | 76,000 | 68,212 | |
Operating lease liabilities | (82,659) | |||
Net cash used in operating activities | (1,804,000) | (968,000) | (1,028,501) | (2,221,320) |
CASH FLOW FROM INVESTING ACTIVITIES: | ||||
Purchase of equipment | (80,000) | (84,000) | (175,000) | (114,500) |
Payment of security deposit | (16,770) | (16,882) | ||
Net cash used in investment activities | (80,000) | (84,000) | (191,770) | (131,382) |
CASH FLOW FROM FINANCING ACTIVITIES: | ||||
Proceeds from shares to be issued | 50,000 | 306,000 | 530,000 | |
Proceeds from shares issued for cash | 125,000 | 1,110,000 | 1,300,018 | 2,090,375 |
Proceeds from convertibles notes payable | 712,000 | 326,800 | ||
Proceeds from revenue sharing loan | 250,000 | |||
Proceeds from PPP and EIDL loans | 294,000 | |||
Proceeds from notes payable | 378,000 | 100,000 | ||
Principal payment of convertible note payable | (282,000) | (73,000) | ||
Principal payments of notes payable | (65,000) | (59,000) | (124,150) | |
Costs of recapitalization | (495,760) | |||
Net cash provided by financing activities | 1,462,000 | 1,051,000 | 1,210,258 | 2,750,025 |
Increase (decrease) in cash | (422,000) | (1,000) | (10,013) | 397,323 |
Cash and cash equivalents, beginning of period | 433,143 | 35,820 | 45,833 | 35,820 |
Cash and cash equivalents, end of period | 11,000 | 29,000 | 35,820 | 433,143 |
Supplemental Disclosures of Cash Flow Information: | ||||
Cash paid for taxes | 1,600 | 800 | ||
Cash paid for interest | 17,000 | 15,080 | ||
Non-cash investing and financing activities | ||||
Recognition of right-of-use asset and liability | 92,000 | 410,000 | ||
Reclass to long term Convertible Notes payable | (52,000) | |||
Premium on Convertible notes Payable | (70,000) | |||
Discount on Convertible Notes Payable | (725,000) | |||
Reclass to Settlement Payable | 7,000 | |||
Original issuance discount | (131,000) | 28,200 | ||
Discount revenue loan | (28,000) | |||
Conversions | 186,000 | |||
Recognition of beneficial conversion feature | 353,000 | |||
Shared to be issued | (535,000) | |||
Derivative liabilities allocated to convertible note discount | 173,000 | 326,800 | ||
Fair value of shares for loan fee | 54,990 | |||
Shares issued for cashless exercise of warrant | 2,590 | |||
Fair value of shares issued for settlement of convertible notes payable | $ 1,015,000 | |||
Common Stock for services | (6,000) | |||
Fair Value of Options | $ 529,000 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Description of Business and Summary of Significant Accounting Policies | NOTE 1 – DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Quanta, Inc. (the “Company”) is an applied science company focused on increasing energy levels in plant matter to increase performance within the human body. The Company’s operations are based in Burbank, California. On April 28, 2016, the Company was incorporated as Freight Solution, Inc. in the State of Nevada. Effective June 6, 2018, the Company (then known as Bioanomaly Inc.) was acquired by Freight Solution in a transaction accounted for as a reverse merger transaction. On July 11, 2018, the Company changed its name to Quanta, Inc. Subsequent to September 30, 2020, the Company experienced a change in control and appointment of a new Chief Executive Officer, among other corporate actions, and commenced a transition into a holding company. During the transition phase, the Company furloughed most of its employees, and has continued to sell its products online (see Note 12). Going Concern The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, for the nine months ended September 30, 2020, the Company incurred a net loss of $5,931 and used cash in operating activities of $1,804, and at September 30, 2020, the Company had a stockholders’ deficit of $1,850. These factors raise substantial doubt about the Company’s ability to continue as a, going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in their report on the Company’s December 31, 2019 audited financial statements, raised substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. At September 30, 2020, the Company had cash on hand in the amount of $11. Subsequent to September 30, 2020, the Company received $1,643 from the issuance of notes payable. Management estimates that the current funds on hand will be sufficient to continue operations through the next three months. The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing Basis of presentation and principles of Consolidation The accompanying unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2020 and 2019, have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods have been included. The results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2020. The Condensed Consolidated Balance Sheet information as of December 31, 2019 was derived from the Company’s audited Consolidated Financial Statements as of and for year ended December 31, 2019, included in the Company’s Annual Report on Form 10-K/A filed with the SEC on April 10, 2020. These financial statements should be read in conjunction with that report. The consolidated financial statements include the accounts of Quanta Inc, and its wholly-owned subsidiary, Bioanomaly, Inc. Intercompany transactions have been eliminated in consolidation. COVID-19 The global outbreak of COVID-19 has negatively affected the U.S. and global economies and has negatively impacted businesses, workforces, customers, and created significant volatility of financial markets. It has also disrupted the normal operations of many businesses, including ours. The extent of the impact of the pandemic on our business and financial results will depend largely on future developments, including the duration and severity of the outbreak, the length of restrictions and business closures, and the impact on capital and financial markets, all of which are highly uncertain and cannot be predicted. This outbreak could decrease spending, adversely affect demand for our products and harm our business and results of operations. In the quarter ended June 30, 2020 and September 30, 2020, we believe the COVID-19 pandemic did impact our operating results as shipments to customers in the second quarter and third quarter were down 13% and 10% from the first quarter of the year. However, we have not observed any material impairments of our assets or a significant change in the fair value of our assets due to the COVID-19 pandemic. While it is not possible at this time to estimate the full impact that COVID-19 will have on our business, restrictions resulting from COVID-19 on general economic conditions could, among other things, impair our ability to raise capital when needed. This situation is changing rapidly, and additional impacts may arise that we are not aware of currently. Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to, among others, allowance for doubtful accounts receivable, impairment analysis of long-term assets, valuation allowance on deferred income taxes, assumptions used in valuing stock instruments issued for services, assumptions made in valuing derivative liabilities, and the accrual of potential liabilities. Actual results may differ from these estimates. Revenue The Company follows the guidance of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients. Product Sales License revenue Cost of goods sold includes direct costs and fees related to the sale of our products. Leases Effective January 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company determines if an arrangement contains a lease at the inception of the contract. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term while lease liabilities represent our obligation to make lease payments arising from the lease. All leases with terms greater than twelve months result in the recognition of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease term. Leases with terms of twelve months or less at the commencement date are expensed on a straight-line basis over the lease term and do not result in the recognition of an asset or liability (see Note 5). Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a probability weighted average Black-Scholes-Merton model to value the derivative instruments at inception and on subsequent valuation dates through the September 30, 2020, reporting date. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period Convertible Notes with Fixed Rate Conversion Options The Company may enter into convertible notes, some of which contain, predominantly, fixed rate conversion features, whereby the outstanding principal and accrued interest may be converted by the holder, into common shares at a fixed discount to the market price of the common stock at the time of conversion. This results in a fair value of the convertible note being equal to a fixed monetary amount. The Company records the convertible note liability at its fixed monetary amount by measuring and recording a premium, as applicable, on the Note date with a charge to interest expense in accordance with ASC 480 - “Distinguishing Liabilities from Equity”. Stock Compensation The Company periodically issues stock options and restricted stock awards to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for such grants issued and vesting based on ASC 718, whereby the value of the award is measured on the date of grant and recognized as compensation expense on the straight-line basis over the vesting period. The Company recognizes the fair value of stock-based compensation within its Statements of Operations with classification depending on the nature of the services rendered. The fair value of the Company’s stock options is estimated using a Black-Scholes-Merton option pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton option pricing model and based on actual experience. The assumptions used in the Black-Scholes-Merton option pricing model could materially affect compensation expense recorded in future periods. Advertising costs Advertising costs are expensed as incurred. During the nine months ended September 30, 2020 and 2019, advertising costs totaled $53 and $58, respectively. Research and Development Costs Costs incurred for research and development are expensed as incurred. During the nine months ended September 30, 2020 and 2019, research and development costs totaled $307 and $197, respectively and include salaries, benefits, and overhead costs of personnel conducting research and development of the Company’s products. Net Loss per Share Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period, excluding shares of unvested restricted common stock. Shares of restricted stock are included in the basic weighted average number of common shares outstanding from the time they vest. At September 30, 2020, shares used in the calculation of basic net loss per common share include 4,125,000 of vested but unissued shares underlying awards of restricted common stock. Diluted earnings per share is computed by dividing the net income applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Shares of restricted stock are included in the diluted weighted average number of common shares outstanding from the date they are granted. Potential common shares are excluded from the computation when their effect is anti-dilutive. For the nine months ended September 30, 2020, the dilutive impact of stock options exercisable into 2,732,261 shares of common stock, convertible notes convertible into 61,171,291 shares of common stock, and 4,500,000 shares of unvested restricted common stock have been excluded from calculation of weighted average shares because their impact on the loss per share is anti-dilutive. It should be noted that under the contractual terms of the convertible notes; one note holder is limited no more than 4.99% of outstanding shares; the other note holders are limited to no more than 9.99% of the outstanding shares at any time within 61 days of conversion. Therefore at September 30, 2020, the note holders could not convert their respective notes into more than 20,361,669 common shares. Fair Value of Financial Instruments The Company follows the authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) for fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3—Unobservable inputs based on the Company’s assumptions. The Company is required to use observable market data if such data is available without undue cost and effort. The Company believes the carrying amount reported in the balance sheet for cash, accounts receivable, accounts payable and accrued liabilities, and notes payable, approximate their fair values because of the short-term nature of these financial instruments As of September 30, 2020, the Company’s balance sheet includes Level 2 liabilities comprised of the fair value of embedded derivative liabilities of $179 (see Note 8). Concentrations of risks For the nine months ended September 30, 2020 and 2019, one customer accounted for 15% or more of revenue. No other customer accounted for 10% or more of revenue. As of September 30, 2020, one customer accounted for 17% of accounts receivable, and one accounted for 10% of accounts receivable. No other customer accounted for 10% or more of accounts receivable. As of December 31, 2019, two customers accounted for 19% and 12% of accounts receivable, respectively. No other customer accounted for 10% or more of accounts receivable. As of September 30, 2020, four vendors accounted for 11% and 17% and 14% and 14% of accounts payable, respectively, and no other vendor accounted for 10% or more of accounts payable. As of September 30, 2020 no vendor accounted for 10% or more of accounts payable. The Company maintains the majority of its cash balances with one financial institution, in the form of demand deposits that are insured by the Federal Deposit Insurance Corporation, or FDIC. At times, deposits held may exceed the amount of insurance provided by the FDIC. The Company has not experienced any losses in its cash and believes it is not exposed to any significant credit risk. Segments The Company operates in one segment for the development and distribution of our CBD products. In accordance with the “ Segment Reporting Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326). ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted. The Company does not believe the potential impact of the new guidance and related codification improvements will be material to its financial position, results of operations and cash flows. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. | NOTE 1 – DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Quanta, Inc (“the Company”) was incorporated as Freight Solution, Inc. (“Freight Solution”) on April 28, 2016 in the State of Nevada. Effective June 6, 2018, Bioanomaly Inc. (“Bioanomaly”) was acquired by Freight Solution pursuant to a merger agreement in which the shareholders of Bioanomaly exchanged all of the outstanding shares of Bioanomaly for 21,908,810 newly issued shares of Freight Solution’s common stock. Freight Solution shareholders retained 6,500,000 shares of common stock, which represented 23% of the issued and outstanding stock following the merger. The acquisition was accounted for as a reverse merger transaction. In connection with the closing of the merger, Freight Solution’s management was replaced by Bioanomaly’s management. On July 11, 2018, the Company changed its name to Quanta, Inc. The Company is an applied science company focused on increasing energy levels in plant matter to increase performance within the human body. The Company’s operations are based in Burbank, California. Going Concern The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, for the year ended December 31, 2019, the Company incurred a net loss of $5,787,364 and used cash in operating activities of $2,221,320, and at December 31, 2019, the Company had a had a working capital deficiency of $113,909. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. At December 31, 2019, the Company had cash on hand in the amount of $433,143. Subsequent to December 31, 2019 the Company received $153,000 from the issuance of a convertible note payable and $30,000 for subscriptions to purchase shares of common stock. Management estimates that the current funds on hand will be sufficient to continue operations through the next six months. The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing Basis of presentation and principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting standards generally accepted in the United States of America. In December 2018, the Company its fiscal year end from March 31 to December 31. The transition period covering the nine-month period from April 1, 2018 to December 31, 2018 is included in the accompany consolidated financial statements. The consolidated financial statements include the accounts of Quanta Inc, and its wholly-owned subsidiary, Bioanomaly, Inc. All intercompany balances and transactions have been eliminated in consolidation. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to, among others, allowance for doubtful accounts receivable, impairment analysis of long-term assets, valuation allowance on deferred income taxes, assumptions used in valuing stock instruments issued for services, assumptions made in valuing derivative liabilities, and the accrual of potential liabilities. Actual results may differ from these estimates. Accounts Receivable Accounts receivable are recorded at the invoiced amount less an allowance for any uncollectible accounts if deemed necessary, and payments are generally due within thirty to forty-five days of invoicing. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history, and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. At December 31, 2019 and December 31, 2018, the Company did not record any allowance for uncollectible accounts. Inventories Inventories are stated at the lower of cost or net realizable value. We regularly review our inventory quantities on hand and record a provision for excess and obsolete inventory based primarily on our estimated forecast of product demand and our ability to sell the product(s) concerned. Demand for our products can fluctuate significantly. Additionally, our management’s estimates of future product demand may be inaccurate, which could result in an understated or overstated provision required for excess and obsolete inventory. At December 31, 2019 and 2018, the Company had no reserve for inventory obsolescence. Equipment Equipment is stated at cost less accumulated depreciation. Depreciation is provided over the estimated useful lives of the equipment, which is three years, using the straight-line method. Expenditures for major additions and improvements are capitalized and minor repairs and maintenance are charged to expense as incurred. When equipment is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Management assesses the carrying value of equipment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If there is indication of impairment, management prepares an estimate of future cash flows expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. For the year ended December 31, 2019 and for the nine-months period ended December 31, 2018, the Company determined there were no indicators of impairment of its property and equipment. Revenue The Company follows the guidance of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Product Sales Revenue is recorded at the transaction price, which is the amount of consideration the Company expects to receive in exchange for transferring products to a customer. Generally, the Company’s performance obligations are transferred to the customer at a point in time, typically upon delivery of products. The Company historically has offered no discounts, rebates, rights of return, or other allowances to clients which would result in the establishment of reserves against revenue. The Company sells its products (i) directly to customers (“DTC”) through online orders from our websites, and DTC sales at conventions and events; and (ii) through wholesalers, including physicians, pharmacies, fitness studios, grocery stores, and other organizations. License revenue Cost of goods sold includes direct costs and fees related to the sale of our products. Disaggregated Revenue The composition of the Company’s net revenues recognized during the year ended December 31, 2019 and the nine-month period ended December 31, 2018, disaggregated by source and nature, are as follows: Year ended Nine-months ended By Sales Channel: Direct to consumer $ 443,916 $ 67,806 Wholesale 793,284 157,448 License Revenue 31,788 - $ 1,268,988 $ 225,254 By Geographic Territory: California $ 766,469 $ 156,974 Other states 477,139 68,280 International 25,380 - $ 1,268,988 $ 225,254 Leases Prior to January 1, 2019, the Company accounted for leases under ASC 840, Accounting for Leases. Effective January 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standard in effect for those periods. The adoption of ASC 842 on January 1, 2019 resulted in the recognition of operating lease right-of-use assets and lease liabilities of $420,112 and did not result in a cumulative-effect adjustment to accumulated deficit (see Note 5). Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a probability weighted average Black-Scholes-Merton model to value the derivative instruments at inception and on subsequent valuation dates through the December 31, 2019, reporting date. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period Income taxes The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. Stock Compensation The Company issues stock options, warrants, shares of common stock, and restricted stock unit awards, as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation to employees in accordance with FASB ASC 718, Compensation – Stock Compensation In periods through December 31, 2018, the Company accounted for share-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50, Equity - Based Payments to Non-Employees On January 1, 2019, the Company adopted ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Advertising costs Advertising costs are expensed as incurred. During the year ended December 31, 2019 and the nine-month period ended December 31, 2018, advertising costs totaled $103,401 and $27,529, respectively. Research and Development Costs Costs incurred for research and development are expensed as incurred. During the year ended December 31, 2019 and the nine-month period ended December 31, 2018, research and development costs totaled $351,670 and 207,600, respectively and include salaries, benefits, and overhead costs of personnel conducting research and development of the Company’s products. Net Loss per Share Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Shares used in the calculation of basic net loss per common share include vested but unissued shares underlying awards of restricted common stock. Diluted loss per share reflects the potential dilution, using the treasury stock method that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the Company. In computing diluted loss per share, the treasury stock method assumes that outstanding warrants and convertible notes are exercised and the proceeds are used to purchase common stock at the average market price during the period. Warrants and convertible notes may have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options and warrants. For the year ended December 31, 2019, the dilutive impact of stock options exercisable into 3,290,000 shares of common stock, 8,000,000 shares of restricted stock to be issued, and convertible notes payable that can convert into 889,469 shares of common stock have been excluded from calculation of weighted average shares because their impact on the loss per share is anti-dilutive. For the year ended December 31, 2019, the dilutive impact of stock warrants exercisable into 3,000,000 shares of common stock have been excluded because their impact on the loss per share is anti-dilutive. Fair Value of Financial Instruments The Company follows the authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) for fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3—Unobservable inputs based on the Company’s assumptions. The Company is required to use of observable market data if such data is available without undue cost and effort. The Company believes the carrying amount reported in the balance sheet for cash, accounts receivable, accounts payable and accrued liabilities, and notes payable, approximate their fair values because of the short-term nature of these financial instruments As of December 31, 2019, the Company’s balance sheet includes Level 2 liabilities comprised of the fair value of embedded derivative liabilities of $400,139 (see Note 8). Concentrations of risks For the year ended December 31, 2019 and the nine-month period ended December 31, 2018, no customer accounted for 10% or more of revenue. As of December 31, 2019, two customers accounted for 19% and 12% of accounts receivable, respectively, and no other customer accounted for 10% or more of accounts receivable. As of December 31, 2018, no customer accounted for more than 10% of accounts receivable. Additionally, for the same periods, no vendor accounted for 10% or more of the Company’s cost of goods sold, or accounts payable at period-end. The Company maintains the majority of its cash balances with one financial institution, in the form of demand deposits that are insured by the Federal Deposit Insurance Corporation, or FDIC. At times, deposits held may exceed the amount of insurance provided by the FDIC. The Company has not experienced any losses in its cash and believes it is not exposed to any significant credit risk. Segments The Company operates in one segment for the development and distribution of our CBD products. In accordance with the “ Segment Reporting Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for interim and annual reporting periods beginning after December 15, 2022. The Company is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
License Agreement
License Agreement | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
License Agreement | ||
License Agreement | NOTE 2 – LICENSE AGREEMENT Effective January 22, 2019, the Company entered into an agreement with a wholesaler for the exclusive rights to distribute the Company’s products in the state of Colorado for three years. In consideration, the Company received an up-front payment of $100. The Company determined that the exclusive distribution agreement was a distinct agreement for the license of symbolic IP and thus should be recognized on a straight-line basis over the three-year life of the agreement. For the three and nine months ended September 30, 2020 the Company recognized revenue related to this agreement in the amount of $9 and $25, respectively. For the three and nine months ended September 30, 2019 the Company recognized revenue related to this agreement in the amount of $9 and $17, respectively. | NOTE 2 – LICENSE AGREEMENT Effective January 22, 2019, the Company entered into an agreement with a wholesaler for the exclusive rights to distribute the Company’s products in the state of Colorado for three years. In consideration, the Company received an up-front payment of $100,000. The Company determined that the exclusive distribution agreement was a distinct agreement for the license of symbolic IP and thus should be recognized on a straight-line basis over the three-year life of the agreement. For the year ended December 31, 2019, the Company recognized revenue related to this agreement of $31,788. For the nine month period ended December 31, 2018, no distribution fee revenue was recorded. |
Inventories
Inventories | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | ||
Inventories | NOTE 3 – INVENTORIES Inventories are valued at the lower of cost (first-in, first-out) or net realizable value, and consisted of the following: September 30, 2020 December 31, 2019 Raw materials and packaging $ 120 $ 103 Finished goods 37 20 $ 157 $ 123 | NOTE 3 – INVENTORIES Inventories are valued at the lower of cost (first-in, first-out) or net realizable value, and consisted of the following: December 31, 2019 December 31, 2018 Raw materials and packaging $ 102,428 $ - Finished goods 20,091 - $ 122,519 $ - |
Equipment
Equipment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Equipment | NOTE 4 - EQUIPMENT Equipment, stated at cost, less accumulated depreciation consisted of the following: September 30, 2020 December 31, 2019 Machinery-technology equipment $ 705 $ 607 Machinery-technology equipment under construction 12 30 717 637 Less accumulated depreciation (485 ) (324 ) $ 232 $ 313 Depreciation expense for the three and nine months ended September 30, 2020 was $55 and $162, respectively. Depreciation expense for the three and nine months ended September 30, 2019 was $50 and $122, respectively. As of September 30, 2020, the equipment under construction is approximately 80% complete, and is expected to be completed and placed into service during the year ended December 31, 2020. | NOTE 4 - EQUIPMENT Equipment, stated at cost, less accumulated depreciation consisted of the following: December 31, 2019 December 31, 2018 Machinery-technology equipment $ 607,000 $ 347,500 Machinery-technology equipment under construction 30,000 175,000 637,000 522,500 Less accumulated depreciation (323,522 ) (149,620 ) $ 313,478 $ 372,880 Depreciation expense for the year ended December 31, 2019 and transition period ended December 31, 2018 was $173,903 and $185,835, respectively. As of December 31, 2019, the equipment under construction is approximately 33% complete, and is expected to be completed and placed into service during the year ended December 31, 2020. |
Operating Leases
Operating Leases | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating Leases | NOTE 5 - OPERATING LEASES At December 31, 2019, the Company had one operating lease for its headquarters office space in Burbank, California. In February 2020, the Company took possession of a second leased facility consisting of office, research, and production space also located in Burbank, California. The lease commenced on January 1, 2020, and has a term for 5 years, with annual fixed rental payments ranging from $90 to $101. The aggregate total fixed rent is approximately $478 and resulted in the recognition of an operating lease right-of-use (“ROU”) asset and of corresponding lease liability of approximately $432 each. The Company also paid a security deposit of $17. At September 30, 2020, the Company did not have any other leases. During the nine months ended September 30, 2020, the Company consolidated it operations into one space located in Burbank, California. In connection with one lease that is no longer utilized, the Company recorded an impairment of the related net right of use asset of $255, and wrote of a deposit of $17 with the lessor. The total due to the lessor is $236 and is recorded as settlement reserve at September 30, 2020. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Generally the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives. The components of lease expense and supplemental cash flow information related to leases for the period are as follows: Nine months ended September 30, 2020 (in thousands) Lease Cost Operating lease cost (included in selling, general, and administrative expense in the Company’s statement of operations) $ 171,332 Other Information Cash paid for amounts included in the measurement of lease liabilities for 2020 $ 92 Weighted average remaining lease term – operating leases (in years) 3.25 Average discount rate – operating leases 4 % The supplemental balance sheet information related to leases for the period is as follows: At September 30, 2020 Operating leases Long-term right-of-use assets $ 382 Short-term operating lease liabilities $ 99 Long-term operating lease liabilities 315 Total operating lease liabilities $ 414 Maturities of the Company’s lease liabilities are as follows: Year Ending Operating Leases 2020 $ 23 2021 94 2022 96 2023 99 2024 102 Total lease payments 414 Less: Imputed interest/present value discount (- ) Present value of lease liabilities 414 Less current portion (99 ) Operating lease liabilities, long-term $ 315 Lease expenses were $72 and $171 during the three and nine months ended September 30, 2020, respectively. Lease expenses were $20 and $81 during the three and nine months ended September 30, 2019, respectively. | NOTE 5 - OPERATING LEASE The Company leases its headquarters office space in Burbank, California under an operating lease that expires on July 31, 2023. At December 31, 2019, the Company did not have any other leases. Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives. Prior to January 1, 2019, the Company accounted for leases under ASC 840, Accounting for Leases. Effective January 1, 2019, the Company adopted the guidance of ASC 842, Leases (“ASC 842”), which requires an entity to recognize a right-of-use asset and a lease liability for certain leases. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods. The adoption of ASC 842 on January 1, 2019, resulted in the recognition of operating lease right-of-use assets of $420,112 and corresponding lease liabilities of approximately the same amount. There was no cumulative-effect adjustment to accumulated deficit. As of December 31, 2019, the unamortized right of use asset was $332,980 and total lease liabilities were $337,453, of which $85,662 was current. The components of lease expense and supplemental cash flow information related to leases for the period are as follows: Year ended December 31, 2019 Lease Cost Operating lease cost (included in selling, general, and administrative expense in the Company’s statement of operations) $ 107,588 Other Information Cash paid for amounts included in the measurement of lease liabilities for 2019 $ 98,375 Weighted average remaining lease term – operating leases (in years) 3.5 Average discount rate – operating leases 4 % The supplemental balance sheet information related to leases for the period is as follows: At December 31, 2019 Operating leases Long-term right-of-use assets $ 332,980 Short-term operating lease liabilities $ 85,662 Long-term operating lease liabilities 251,791 Total operating lease liabilities $ 337,453 Maturities of the Company’s lease liabilities are as follows: Year Ending Operating Leases 2020 $ 97,625 2021 102,506 2022 107,632 2023 55,126 Total lease payments 362,889 Less: Imputed interest/present value discount (25,436 ) Present value of lease liabilities 337,453 Less current portion (85,662 ) Operating lease liabilities, long-term $ 251,791 Lease expense were $107,588 and $42,040 during the year ended December 31, 2019 and the nine-month period ended December 31, 2018, respectively. Subsequent to December 31, 2019, the Company commenced leasing a second facility in addition to its headquarters facility described above (See Note 13). |
Notes Payable
Notes Payable | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Notes Payable | NOTE 6 – NOTES PAYABLE September 30, 2020 December 31, 2019 Secured (a) Notes payable secured by equipment $ 440 $ - (a) Deferred finance charges on notes payable secured by equipment (89 ) - (b) Note payable secured by assets 33 56 Unsecured (c) Note payable-Payroll Protection Loan 134 - (d) Note payable- Economic Injury Disaster Loan 160 - (e) Revenue sharing agreement 250 - (e) Deferred finance charges, revenue sharing (25 ) - Total notes payable outstanding 903 56 Current portion 420 - Long-term portion $ 483 $ 56 (a) In April 2020 and May 2020, the Company entered into two financing agreements aggregating $506. The notes were issued at a discount including fees for underwriting , legal and administrative costs along with deferred financing costs. The deferred financing costs are being amortized over the terms of the notes. The notes are secured by the Company’s equipment, and require monthly payments of principal and interest of $21, and mature in April 2022 and May 2022. During the nine months ended September 30, 2020, the Company made payments of $67 and at September 30, 2020, the balance due on these notes was $439. (b) Note payable, interest at 8.3% per annum, secured by all the assets of the Company. The note was due January 13, 2019 and on April 24, 2020, the note holder waived the default through December 31, 2020. At December 31, 2019, the balance of this Note was $56, During the nine months ended September 30, 2020, the company made principal payments of $22, and at September 30, 2020, the balance due on this note was $33. (c) On May 7, 2020, the Company was granted a loan (the “PPP loan”) from Bank of America in the aggregate amount of $134, pursuant to the Paycheck Protection Program (the “PPP”) under the CARES Act. The PPP loan agreement is dated May 4, 2020, matures on May 4, 2022, bears interest at a rate of 1% per annum, with the first six months of interest deferred, is payable monthly commencing on November 2020, and is unsecured and guaranteed by the U.S. Small Business Administration (“SBA”). The loan term may be extended to April 20, 2025, if mutually agreed to by the Company and lender. We applied ASC 470, Debt (d) On September 5, 2020, the Company received a $150 loan (the “EID Loan”) from the SBA under the SBA’s Economic Injury Disaster Loan program. The EID Loan has a thirty-year term and bears interest at a rate of 3.75% per annum. Monthly principal and interest payments of $0.7 per month are deferred for twelve months, and commence in June 2021. The EID Loan may be prepaid at any time prior to maturity with no prepayment penalties. The proceeds from the EID Loan must be used for working capital. The Loan contains customary events of default and other provisions customary for a loan of this type. The Company was in compliance with the terms of the EID loan as of September 30, 2020. (e) Between July 7, 2020, and July 29, 2020, the Company issued notes payable to a third-party investors totaling $250. Under the terms of the note, the Company is to pay 50% of the net revenues beginning on August 21, 2020, for a product to be designed and produced by the Company. The product has not been produced and therefore no payments have been made. The Company issued 280,000 shares of common stock as fees in conjunction with this financing. The Company recorded $28, of discount which is being amortized to interest expense over the expected term of the arrangement. | NOTE 6 – NOTES PAYABLE December 31, 2019 December 31, 2018 Note payable, in default, due January 13, 2019, interest at 8.3% per annum, secured by all the assets of the Company. As of the date of the financial statements, the note has not been fully paid, and the Company is in negotiations with the lender to cure this default. $ 55,850 $ 80,000 Note payable, unsecured, due January 6, 2019, interest at 10% per year. The note was paid off in 2019. - 100,000 Total notes payable (all current portion) $ 55,850 $ 180,000 |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Convertible Notes Payable | NOTE 7 – CONVERTIBLE NOTES PAYABLE Convertible notes payable consisted of the following: September 30, 2020 December 31, 2019 Unsecured (a) Convertible notes with fixed discount percentage conversion prices 223 282 (b) Convertible notes with fixed conversion prices 497 - Default penalty principal added, charged to loss on debt extinguishment 315 - Put premiums on stock settled debt 155 - Total convertible notes principal outstanding 1,035 282 Debt discount (590 ) (225 ) Convertible notes, net of discount and premium $ 600 $ 57 Current portion 600 57 Long-term portion $ - $ - (a) At December 31, 2019, there were $282 of convertible notes with adjustable conversion prices outstanding. During the nine months ended September 30, 2020, the Company issued one unsecured convertible promissory note for $153, bearing interest at 22% per annum, and maturing in February 2021. Also during the nine months ended September 30, 2020, the Company also issued two unsecured convertible notes payable for $30, bearing interest at 10% per annum, and maturing on December 31, 2020, that were issued as loan commitment fees for notes payable. At the option of the holder, the notes are convertible into shares of the Company’s common stock at a price per share discount of 39% to 50% of the average market price of the Company’s common stock, as defined. As a result, the Company determined that the conversion options of the convertible notes were not considered derivatives and qualify as stock settled debt under ASC 480 – “Distinguishing Liabilities from Equity”. Therefore the Company calculated fixed premiums totaling $226 which were charged to interest expense at the dates of the note issuance. During the nine months ended September 30, 2020, one convertible note payable for $282 was paid off and another was partially converted into common stock. At September 30, 2020, the balance of these convertible notes was $223. (b) At December 31, 2019, the Company had no convertible notes outstanding with fixed conversion prices. During the nine months ended September 30, 2020, the Company issued seven convertible notes with fixed conversion prices aggregating $497. The notes are unsecured, bear interest at 10% per annum, and mature through March 31, 2021. The notes were initially convertible into shares of the Company’s common stock at a fixed conversion price of $0.05 per share. The Company recorded debt discounts of $531 to account for loan fees, beneficial conversion features ($323), and original issue discounts. The debt discounts are amortized over the life of the notes or are amortized in full upon the conversion of the corresponding notes to common stock. On September 2, 2020, the Company issued a convertible note (see paragraph a above) having a conversion price less than $0.05 which triggered a term common to all notes in paragraph b, which changed the conversion terms to be the lower of $0.05 or 61% of the lowest traded price during the 15 days prior to the conversion. This event is also considered a default for which a penalty is charged equal to 150% of the accrued interest, default interest and principal, totaling $315. On December 9, 2020, the Company executed amendments to these notes effective September 30, 2020 (as further discussed at Note 12), which extended the maturity dates and fixed the conversion price at $0.015. Due to the change in conversion terms the notes now require the recognition of the beneficial conversion feature of the increased principal and lowering of the conversion price resulting in recognition of additional charges of $1,215. Loss on debt extinguishment was charged $901 and debt discounts were charged $315 with a credit to additional paid in capital for the debt discounts which will be amortized to interest expense over the extended term of the amended notes. At September 30, 2020 the new principal totaled $812. At December 31, 2019, the balance of unamortized discount on convertible notes was $225. During the nine months ended September 30, 2020, debt discount of $761 was recorded, and debt discount amortization of $396 was recorded. At September 30, 2020, the balance of the unamortized discount was $590. | NOTE 7 – CONVERTIBLE NOTES PAYABLE At December 31, 2018, there was no balance of convertible notes payable. During 2019, the Company issued two convertible promissory notes for the principal sum of $355,000, of which $326,800 was received as proceeds, and $28,200 was recorded as original issue discount (OID). During 2019, one convertible note for $73,000 was repaid. At December 31, 2019, one convertible note for $282,000 was outstanding. The outstanding note is unsecured, bears interest at 12%, and is due April 29, 2020. At the option of the holders, the notes issued in 2019 are convertible into shares of the Company’s common stock at a price per share discount of 39% to 40% of the average market price of the Company’s common stock, as defined. As a result, the Company determined that the conversion option of the convertible notes were not considered indexed to the Company’s own stock and characterized the fair value of the conversion features as derivative liabilities upon issuance. The Company determined that upon issuance of the convertible notes in October 2019, the initial fair value of the embedded conversion features totaled $565,195 (see Note 8), of which $326,800 was recorded as debt discount offsetting the face amount of the convertible notes, and the remainder of $238,395 was recorded as private placement costs. At December 31, 2018, there was no balance of discount on convertible notes payable. During 2019, note discount of $355,000 was recorded, made up of $28,200 OID and $326,800 of discount related to derivative liabilities. In addition, $54,990 of loan costs recorded on one convertible note (see below) are included with the discount. The discount and loan costs are amortized over the term of the related note payable. During 2019, total debt discount and loan costs amortization was $185,330, and at December 31, 2019, the unamortized debt discount and loan fee totaled $224,660. In connection with the issuance of one convertible note with the principal balance of $282,000, the Company issued as a commitment fee 141,000 shares of its common stock (the “Non-Returnable Shares”) as well as 705,000 shares of its common stock (the “Returnable Shares”). The Company recorded the fair value of the Non-Returnable fees of $54,990 as a loan cost. The Returnable Shares are an own-share lending arrangement issued in contemplation of a debt offering and such shares will be returned to the Company if no event of default has occurred prior to April 29, 2020, the maturity date of the note. At issuance, the fair value of the share lending arrangement was determined to be immaterial. In accordance with ASC 470-20, the shares are not deemed issued until it becomes more likely than not that they will not be returned and at such point the shares should be measured at fair value and such value recognized as a financing cost. At December 31, 2019, management determined that it is probable that the Company will pay the note in full when due, and meet all other conditions in the note agreement. Accordingly, management feels that it is more likely than not that the returnable shares will be returned to the Company and therefore the 705,000 Returnable Shares have not been recorded as being issued as of December 31, 2019, nor are they included in basic net loss per share or as potentially dilutive shares in calculating the diluted net loss per share. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative Financial Instruments | Note 8 – DERIVATIVE FINANCIAL INSTRUMENTS At December 31, 2019, the balance of the derivative liabilities was $400, which was fully extinguished upon pay-off of the related convertible note with a decrease of fair value of $114 and gain on debt extinguishment of $286 during the nine months ended September 30, 2020. The Company also recorded additions of $101 related to the conversion features of a note issued during the period (see Note 7), and recorded a gain on extinguishment of $101 upon conversion of the related convertible note. At September 30, 2020, the Company had no convertible notes outstanding that are considered to have embedded derivative liabilities that require bifurcation per the note agreements. The derivative liabilities were valued at the following dates using a binomial model with the following assumptions: September 30, 2020 December 31, 2019 Conversion feature: Risk-free interest rate 0.17 % 1.8 % Expected volatility 182 % 222 % Expected life (in years) 3 – 12 months 1 year Expected dividend yield - - Fair Value: - - Conversion feature $ - $ 400 The risk-free interest rate was based on rates established by the Federal Reserve Bank. The expected volatility is based on the historical volatility of the Company’s stock. The expected life of the conversion feature of the notes was based on the remaining terms of the related notes. The expected dividend yield was based on the fact that the Company has not customarily paid dividends to its common stockholders in the past and does not expect to pay dividends to its common stockholders in the future. | NOTE 8 – DERIVATIVE FINANCIAL INSTRUMENTS During 2019, the Company had convertible promissory notes outstanding that are convertible into shares of common stock of the Company at the option of the holder at price per share discounts ranging from 39% to 40% of the Company’s common stock market price, as defined in the note agreements. As the ultimate determination of shares to be issued upon conversion of these notes could exceed the current number of available authorized shares, the Company determined that the conversion features of the convertible notes were not considered indexed to the Company’s own stock and characterized the fair value of the conversion features as derivative liabilities. Accordingly, the conversion features of the notes were separated from the host contracts (i.e. the notes) and characterized as derivative liabilities to be re-measured at the end of every reporting period with the change in value reported in the statement of operations. At December 31, 2018, there was no balance of derivative liabilities. During the year ended December 31, 2019, the Company recorded additions of $565,195 related to the conversion features of notes issued during the period (see Note 7), and a decrease in fair value of derivatives of ($19,491). In addition, the Company recorded a decrease in derivative liability of ($145,565) related to derivative liabilities that were extinguished when the related convertible note payable was paid off (see Note 7). At December 31, 2019, the balance of the derivative liabilities was $400,139. The derivative liabilities were valued at the following dates using a probability weighted Black-Scholes-Merton model with the following assumptions: December 31, 2019 October 2019 Conversion feature: Risk-free interest rate 1.77 % 1.75 % Expected volatility 222 % 223 % Expected life (in years) 1 year 1 year Expected dividend yield - - Fair Value: Conversion feature $ 400,139 $ 565,195 The risk-free interest rate was based on rates established by the Federal Reserve Bank. The expected volatility is based on the historical volatility of the Company’s stock. The expected life of the conversion feature of the notes was based on the remaining terms of the related notes. The expected dividend yield was based on the fact that the Company has not customarily paid dividends to its common stockholders in the past and does not expect to pay dividends to its common stockholders in the future. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 9 – INCOME TAXES The Company had no income tax expense for the year ended December 31, 2019 and the nine-month period ended December 31, 2018. The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate: Year ended Nine-months ended Federal tax at statutory rate 21.0 % 21.0 % State tax, net of federal benefit 7.0 7.0 Change in valuation allowance (28.0 ) (28.0 ) Effective income tax rate 0.0 % 0.0 % Deferred tax assets and liabilities consist of the following: December 31, 2019 December 31, 2018 Deferred tax assets: Stock-based compensation $ 1,039,000 $ 160,000 Operating lease liability 94,000 - Derivative expenses 67,000 - Net operating loss carryforwards 1,132,000 425,000 Gross deferred tax assets 2,332,000 585,000 Less: valuation allowance (2,103,000 ) (540,000 ) Total deferred tax assets 229,000 45,000 Deferred tax liabilities: Depreciation 90,000 45,000 Derivative gain 46,000 - Operating lease right-of-use asset 93,000 - Total deferred tax liabilities 229,000 45,000 Net deferred tax asset (liability) $ - $ - The provisions of ASC Topic 740, Accounting for Income Taxes, require an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. For the year ended December 31, 2019 and the nine-month period ended December 31, 2018, based on all available objective evidence, including the existence of cumulative losses, the Company determined that it was more likely than not that the net deferred tax assets were not fully realizable. Accordingly, the Company established a full valuation allowance against its net deferred tax assets. The Company intends to maintain a full valuation allowance on net deferred tax assets until sufficient positive evidence exists to support reversal of the valuation allowance. During the year ended December 31, 2019 and the nine-month period ended December 31, 2018, the valuation allowance increased by $1.5 million and $0.5 million, respectively. At December 31, 2019 and 2018, the Company had available Federal and state net operating loss carryforwards (“NOL”s) to reduce future taxable income. For Federal purposes the amounts available were approximately $4.3 million and $1.6 million, respectively. For state purposes approximately $3.1 million and $1.1 was available at December 31, 2019 and 2018, respectively. The Federal carryforwards expire on various dates through 2039 and the state carryforwards expire through 2036. Due to restrictions imposed by Internal Revenue Code Section 382 regarding substantial changes in ownership of companies with loss carryforwards, the utilization of the Company’s NOL may be limited as a result of changes in stock ownership. NOLs incurred subsequent to the latest change in control are not subject to the limitation. The Company’s operations are based in California and it is subject to Federal and California state income tax. Tax years after 2015 are open to examination by United States and state tax authorities. The Company adopted the provisions of ASC 740, which requires companies to determine whether it is “more likely than not” that a tax position will be sustained upon examination by the appropriate taxing authorities before any tax benefit can be recorded in the financial statements. ASC 740 also provides guidance on the recognition, measurement, classification and interest and penalties related to uncertain tax positions. As of December 31, 2019 and December 31, 2018, no liability for unrecognized tax benefits was required to be recorded or disclosed. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Stockholders' Equity | NOTE 9 – STOCKHOLDERS’ EQUITY Series A Preferred Stock On April 14, 2020, the Company filed a Certificate of Designation for the Company’s Series A Preferred Stock with the Secretary of State of Nevada designating 2,500,000 shares of its authorized preferred stock as Series A Preferred Stock, par value of $0.001 per share. The Series A Preferred Stock is not entitled to receive any dividends or liquidation preference and are not convertible into shares of the Company’s common stock. The holders of the Series A Preferred Stock, in the aggregate, have voting power equal to 51% of the total votes of all of the outstanding common and preferred stock of the Company entitled to vote. Accordingly, each share of Series A Preferred Stock shall have voting rights equal to one and one-tenth (1.1) times a fraction, the numerator of which is the shares of outstanding common stock and undesignated preferred stock of the Company and the denominator of which is number of shares of outstanding Series A Preferred Stock. With respect to all matters upon which stockholders are entitled to vote or give consent, the holders of the outstanding shares of Series A Preferred Stock shall vote with the holders of the common stock and any outstanding preferred stock without regard to class, except as to those matters on which separate class voting is required by applicable law or the Company’s Articles of Incorporation. On April 14, 2020, The Company issued 2,500,000 shares of a newly created class of preferred stock, Series A Preferred Stock to the Company’s Chief Executive Officer in a private placement transaction. The fair value of the was determined to be $465 and was recorded as stock compensation. Common Stock During the nine months ended September 30, 2020, the Company issued 407,408 shares of common stock in a private placement of shares at a price of $0.26 per share for total proceeds of $125. The Company issued 3,955,747 common shares of stock to two holders of convertible notes at contracted prices. The fair value of the shares was $211 and the conversions reduced the convertible note principal due by $140. The Company issued 1,127,522 common shares of stock to secure financing for total fair value of $105. During the nine months ended September 30, 2020, the Company recognized beneficial conversion features totaling $1,569, as additional paid in capital for the difference between the conversion price of the convertible notes payable and the fair value as of the date of the amendments to the related convertible notes. | NOTE 10 – STOCKHOLDERS’ EQUITY The Company’s authorized capital consists of 125,000,000 shares, of which 100,000,000 shares are designated as shares of common stock, par value $0.001 per share, and 25,000,000 shares are designated as shares of preferred stock, par value $0.001 per share. No shares of preferred stock are currently outstanding. Shares of preferred stock may be issued in one or more series, each series to be appropriately designated by a distinguishing letter or title, prior to the issuance of any shares thereof. The voting powers, designations, preferences, limitations, restrictions, relative, participating, options and other rights, and the qualifications, limitations, or restrictions thereof, of the preferred stock are to be determined by the Board of Directors before the issuance of any shares of preferred stock in such series. Common stock issued for cash During the year ended December 31, 2019 and the nine-month period ended December 31, 2018, the Company completed private placements of shares at prices ranging from $.10 to $0.50 per share. A total of $2,926,375 was received, including $2,090,375 in 2019 for shares issued in 2019, $530,000 in 2019 for shares subscribed, and $306,000 in 2018 for shares issued in 2019. The Company agreed to issue a total 12,011,269 shares in the private placements, of which 6,942,750 shares were issued through December 31, 2019, and 5,068,519 shares are included in shares to be issued on the accompanying financial statements. |
Stock Based Compensation Paymen
Stock Based Compensation Payments | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Stock Based Compensation Payments | NOTE 10 – STOCK BASED COMPENSATION The total charged to stock-based compensation for the nine months ended September 30, 2020, was $1,542. The total included the following: Preferred stock On April 14, 2020, The Company issued 2,500,000 shares of a newly created class of preferred stock, Series A Preferred Stock to the Company’s Chief Executive Officer in a private placement transaction. The fair value of the Series A Preferred shares was determined to be $465 and was recorded as stock compensation in selling, general and administrative expense during the nine months ended September 30, 2020. The Company determined the fair value of the Series A Preferred shares by obtaining an independent valuation of the fair value of the Company’s Series A Preferred shares. Common stock During the nine months ended September 30, 2020, the Company issued 451,198 shares of common stock to employees and officers of the Company. The fair value of the shares was determined to be $106 based on the closing price of the Company’s common stock on the dates shares were granted, and recorded as stock compensation in selling, general and administrative expense during the nine months ended September 30, 2020. During the nine months ended September 30, 2020, the Company recorded $929 to stock-based compensation as accretion of the expense related to grants of restricted stock (see below). During the nine months ended September 30, 2020, the Company issued 750,000 common shares of stock to service vendors for a total fair value of $42. Restricted common stock On May 20, 2019, the Company agreed to issue 8,000,000 shares of the Company’s common stock with vesting terms to a consultant for services. 1,000,000 shares vested immediately, and the balance of 7,000,000 shares will vest 625,000 shares per quarter over 2.8 years. In the event the consultants service with the Company terminates, any or all of the shares of common stock held by such recipient that have not vested as of the date of termination are forfeited to the Company in accordance with such restricted grant agreement. The total fair value of the 8,000,000 shares was determined to be $4,000 based on the price per shares of a contemporaneous private placement of the Company’s common stock on the date granted. The Company accounts for the share awards using a graded vesting attribution method over the requisite service period, as if each tranche were a separate award. During the nine months ended September 30, 2020, total share-based expense recognized related to vested restricted shares totaled $929. At September 30, 2020, there was $753 of unvested compensation related to these awards that will be amortized over a remaining vesting period of 1.4 years. The following table summarizes restricted common stock activity for the nine months ended September 30, 2020: Number of shares Fair value of shares Non-vested shares, December 31, 2019 5,750,000 $ 1,682 Granted - - Vested (1,875,000 ) (929 ) Forfeited - - Non-vested shares, September 30, 2020 3,875,000 $ 753 As of September 30, 2020, no shares have been issued and 4,125,000 vested shares are included in shares to be issued on the accompanying financial statements Stock Options During the year ended December 31, 2019, the Company issued options exercisable into 3,290,000 shares of common stock. The options initially had an exercise price of $0.23 per share, and this was amended in May 2020 to $0.10 per share. The Company used the Black-Scholes-Merton option pricing model to estimate the fair value of the modified option grants immediately before and immediately after the modification and determined the change in fair value related to the modification was de minimis. During the nine months ended September 30, 2020, the Company issued options exercisable into 900,000 shares of common stock. 600,000 of the options vested immediately, and 300,000 of the options vest over 24 months. The options have an exercise price of $0.10 to $0.14 per share, and expire in ten years. Total fair value of these options at grant date was approximately $85, which was determined using the Black-Scholes-Merton option pricing model with the following average assumption: stock price $0.14 per share, expected term ranging from five years, volatility 236%, dividend rate of 0% and risk-free interest rate of 0.17%. During the nine months ended September 30, 2020, the Company recognized $250 of compensation expense relating to vested stock options. As of September 30, 2020, the amount of unvested compensation related to stock options was approximately $346 which will be recorded as an expense in future periods as the options vest. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award; the expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; and the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future. A summary of stock option activity during the three months ended September 30, 2020: Number of options Weighted Average Contractual Options Outstanding as of December 31, 2019 3,230,000 $ 0.10 6.0 Granted 900,000 0.11 10.0 Exercised - - - Expired - - - Options Outstanding as of September 30, 2020 4,130,000 0.11 6.5 Options Exercisable as of September 30, 2020 2,732,261 $ 0.10 5.5 At September 30, 2020, the options outstanding had no intrinsic value. | NOTE 11 – SHARE-BASED PAYMENTS Restricted common stock On May 20, 2019, the Company agreed to issue 8,000,000 shares of the Company’s common stock with vesting terms to a consultant for services (see Note 12). 1,000,000 shares vested immediately, and the balance of 7,000,000 shares will vest 625,000 shares per quarter over 2.8 years. In the event the consultants service with the Company terminates, any or all of the shares of common stock held by such recipient that have not vested as of the date of termination are forfeited to the Company in accordance with such restricted grant agreement. The total fair value of the 8,000,000 shares was determined to be $4,000,000 based on the price per shares of a contemporaneous private placement of the Company’s common stock on the date granted. The Company accounts for the share awards using a graded vesting attribution method over the requisite service period, as if each tranche were a separate award. During the year ended December 31, 2019, total share-based expense recognized related to vested restricted shares totaled $2,317,868. At December 31, 2019, there was $1,628,132 of unvested compensation related to these awards that will be amortized over a remaining vesting period of 2.3 years. The following table summarizes restricted common stock activity for the year ended December 31, 2019: Number of shares Fair value of shares Non-vested shares, January 1, 2019 - $ - Granted 8,000,000 4,000,000 Vested (2,250,000 ) (2,317,868 ) Forfeited - - Non-vested shares, December 31, 2019 5,750,000 $ 1,682,132 As of December 31, 2019, no shares have been issued and 2,250,000 vested shares are included in shares to be issued on the accompanying financial statements Common stock issued for services During the year ended December 31, 2019, the Company issued 212,505 shares of common stock to a consultant for services rendered. The shares were valued at $106,253 based on the price per share of a contemporaneous private placement of the Company’s common stock on the date granted and included in selling, general, and administrative expense on the accompanying financial statements. Stock Options During the year ended December 31, 2019, the Company issued options exercisable into 3,290,000 shares of common stock. 1,800,000 options vested immediately, and the balance of 1,490,000 options vest over various periods up to four years. The options have an exercise price of $0.23 per share, and expire in ten years. Total fair value of these options at grant date was approximately $1,179,000, which was determined using the Black-Scholes-Merton option pricing model with the following average assumption: stock price ranging from $0.23 to $0.38 per share, expected term ranging from five to seven years, volatility ranging from 213% to 218%, dividend rate of 0% and risk-free interest rate of 1.77%. During the year ended December 31, 2019, the Company recognized $711,404 of compensation expense relating to vested stock options. As of December 31, 2019, the amount of unvested compensation related to stock options was approximately $468,000 which will be recorded as an expense in future periods as the options vest. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award; the expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; and the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future. A summary of stock option activity during the year ended December 31, 2019 and the nine-month period ended December 31, 2018 is as follows: Number of Weighted Average Contractual Options Outstanding and Exercisable as of March 31, 2018 - $ - - Granted - $ - - Exercised - - - Expired - - - Options Outstanding and Exercisable as of December 31, 2018 - $ - - Granted 3,290,000 0.23 6.0 Exercised - - - Expired - - - Options Outstanding as of December 31, 2019 3,290,000 0.23 6.0 Options Exercisable as of December 31, 2019 1,800,000 $ 0.23 5.8 At December 31, 2019, the aggregate intrinsic value of the stock options was $322,749. Stock Warrants In 2018, the Company issued warrants exercisable into 3,000,000 shares of common stock. The warrants were fully vested when issued, have an exercise price of $0.30 per share, and expire in 2022. Total fair value of these warrants at grant date was approximately $377,000, which was determined using the Black-Scholes-Merton option pricing model with the following average assumption: stock price of $0.05 per share, expected term of four years, volatility of 170%, dividend rate of 0% and risk-free interest rate of 1.76%. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award; the expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; and the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future. During the year ended December 31, 2019, there was a cashless exercise of all of the 3,000,000 warrants. A summary of warrant activity during the year ended December 31, 2019 and the nine-month period ended December 31, 2018 is as follows: Number of Weighted Average Contractual Warrants Outstanding and Exercisable as of March 31, 2018 - $ - - Granted 3,000,000 $ 0.30 4.00 Exercised - - - Expired - - - Warrants Outstanding and Exercisable as of December 31, 2018 3,000,000 $ 0.30 4.00 Granted - - - Exercised (3,000,000 ) $ 0.30 - Expired - - - Warrants Outstanding and Exercisable as of December 31, 2019 - $ - - |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | NOTE 11 – COMMITMENTS AND CONTINGENCIES The Company has an agreement with an individual in consideration of the Company’s exclusive use of patented technology developed by the individual. Pursuant to the agreement, as amended, the Company shall pay a royalty of 25% of all the net income from the sale of licensed products, as defined with a minimum royalty of $35 per month payable in cash or common stock of the Company. In addition, the Company agreed to issue 8,000,000 shares of the Company’s common stock with vesting terms to the individual (see Note 10). During the three and nine months ended September 30, 2020, the Company paid $62 and $296 to the individual. The Company entered into agreements to share revenue for a product to be designed and produced with several investors. The agreements specify payments of 50% of the net revenues from the specified new product sales. The investors advanced $250 for the right to receive the payments specified. The Company has not produced the specified product. The Company has recorded the advances as liabilities under notes payable. In addition, the Company issued 280,000 shares of common stock to the related investors and the recognized the fair value of $28 as a discount. The discount is being amortized to interest expense over the expected life of the agreement. The Company has determined that there is the potential for litigation under these agreements however no estimate of liability can be calculated as of September 30, 2020. | NOTE 12 – COMMITMENTS AND CONTINGENCIES The Company has an agreement with an individual in consideration of the Company’s exclusive use of patented technology developed by the individual. Pursuant to the agreement, as amended, the Company shall pay a royalty of 25% of all the net income from the sale of licensed products, as defined with a minimum royalty of $35,000 per month payable in cash or common stock of the Company. In addition, the Company agreed to issue 8,000,000 shares of the Company’s common stock with vesting terms to the individual (see Note 11). During the year ended December 31, 2019, the Company paid $343,300 to the individual. |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Subsequent Events [Abstract] | ||
Subsequent Events | NOTE 12 – SUBSEQUENT EVENTS Change in Control, Appointment of New Board Member and Chief Executive Officer and Other Corporate Actions On November 13, 2020, Mr. Phil Sands was appointed as a member of the Board of Directors of the Company, and to serve as our new Chief Executive Officer, a role which he assumed following the ten-day period after the mailing of a Schedule 14F to our shareholders of record, Eric Rice has resigned from all officer and director positions with the Company. On November 15, 2020, the Company entered into an interim compensation agreement with Mr. Phil Sands providing for monthly compensation of $8 commencing December 1, 2020 until March 1, 2021. On November 16, 2020, the Company entered into a Control Block Transfer Agreement with Eric Rice and Phil Sands, pursuant to which, Mr. Rice agreed to transfer 2,500,000 shares of the Company’s Series A Super Voting Preferred Stock to Mr. Sands, representing a transfer of majority voting control over the Company because the holder of such 2,500,000 shares of our Series A Super Voting Preferred Stock automatically carries a vote equal to 51% on all matters submitted to a vote of the holders of our Common Stock and Preferred Stock. Mr. Rice agreed to transfer the Control Block to Phil Sands in order to consummate the Company’s transition into a holding company (transition phase), without requiring the Company to further dilute its stock through the issuance of new shares. During the transition phase, the Company has furloughed most of its employees, and formulation of product has been intermittent while fulfilling orders has continued. Finished goods inventory is been replenished by packaging and labeling inventory classified as raw materials. Management believes that order fulfilment can continue into the first quarter of 2021, while any organizational and staffing changes are being evaluated. On November 16, 2020, the Company entered into a Share Cancellation Agreement with Eric Rice, holder of 18,030,032 shares of QNTA Common Stock, pursuant to which Mr. Rice agreed to cancel 17,030,032 shares, and to retain ownership of 1,000,000 shares of Common Stock. Mr. Rice agreed to cancel and return to treasury 17,030,032 shares in order to assist the Company with its plans to attract experienced management, reorganize into a holding company, while transitioning the Company’s existing CBD business operations into a newly formed operating subsidiary, without requiring QNTA to further dilute its stock through the issuance of new shares. On November 20, 2020, the Board of Directors approved an increase in the Company’s authorized shares of Common Stock from 100,000,000 to 500,000,000 shares by Unanimous Written Consent in order to provide the Company with sufficient shares to adequately pay down its debt, to allow for compensation to vendors and executives for ongoing services being rendered to the Company, and to accommodate for future financings and acquisitions. On November 20, 2020, the Board Received the Majority Shareholder’s Consent from Phil Sands, holder of 2,500,000 shares of our Series A Preferred Stock, approving the increase in our authorized shares of Common Stock to 500,000,000. No changes to our Preferred Stock are being made. The Secretary of the state of Nevada approved the amendment to the articles of incorporation and approved the share increase. Issuances of Common Stock In October 2020, the Company issued 2,509,217 shares of common stock for conversion of $43 of principal and $9 of accrued interest at contracted prices. Following the conversion, the principal and accrued interest of the related note were fully liquidated. Convertible Notes Issued In November 2020, the Company issued four notes payable for aggregate proceeds of $85,000 and received $77 in cash. The notes are convertible into common shares of stock at the fixed price of $0.015 per share. The notes mature in April 2021 and bear interest at 10%. The note holders were issued 155,000 of restricted shares of common stock at $0.0365 for total of $6 of fair value. The Company defaulted on these notes due to a failure to file the September 30, 2020 Form 10Q on a timely basis and therefore is subject default penalties of 150% of accrued interest and principal. On December 9, 2020, the Company issued a convertible promissory note to Trillium Partners LP for $25. The note: carries $3 of original issue discount (OID), may be converted into the Company’s common stock at $0.015 per share, bears interest at 10% and matures on June 30, 2021. The OID will be amortized to interest expense over the term of the note and the beneficial conversion feature will be recognized as a debt discount and additional paid in capital. On December 16, 2020, the Company issued a convertible promissory note to Trillium Partners LP for $23. The note: carries $3 of original issue discount (OID), may be converted into the Company’s common stock at $0.015 per share, bears interest at 10% and matures on June 30, 2021. The OID will be amortized to interest expense over the term of the note and the beneficial conversion feature will be credited to additional paid in capital and $20,000 will be recognized as a debt discount and amortized to interest expense over the term of the note. Amendments to Convertible Notes effective September 30, 2020 to Cure Defaults On December 9, 2020, the Company executed an amendment to its convertible note payable issued to Livingston Asset Management LLC on April 27, 2020, curing the defaults under the terms of the original note. The maturity was extended to June 30, 2021, the conversion terms were changed from fixed percentage discount to a fixed price of $0.015. Additionally, the investor is now entitled to deduct $1,000 for each conversion to cover related costs. On December 9, 2020, the Company executed an amendment to its convertible note payable issued to Alpha Capital Anstalt on April 27, 2020, curing the defaults under the terms of the original note. The principal was restated under the default terms to be $160, the maturity was extended to June 30, 2021, the conversion terms were changed from fixed percentage discount to a fixed price of $0.015. Additionally, the investor is now entitled to deduct $1,000 for each conversion to cover related costs. On December 9, 2020, the Company executed an amendment to its convertible note payable issued to Trillium Partners LP on April 27, 2020, curing the defaults under the terms of the original note. The principal was restated under the default terms to be $160, the maturity was extended to June 30, 2021, the conversion terms were changed from fixed percentage discount to a fixed price of $0.015. Additionally, the investor is now entitled to deduct $1,000 for each conversion to cover related costs. On December 9, 2020, the Company executed an amendment to its convertible note payable issued to an individual on April 27, 2020, curing the defaults under the terms of the original note. The principal was restated under the default terms to be $36, the maturity was extended to June 30, 2021, the conversion terms were changed from fixed percentage discount to a fixed price of $0.015. Additionally, the investor is now entitled to deduct $1,000 for each conversion to cover related costs. On December 9, 2020, the Company executed an amendment to its convertible note payable issued to Trillium Partners LP on May 27, 2020, curing the defaults under the terms of the original note. The principal was restated under the default terms to be $18, the maturity was extended to June 30, 2021, the conversion terms were changed from fixed percentage discount to a fixed price of $0.015. Additionally, the investor is now entitled to deduct $1,000 for each conversion to cover related costs. On December 9, 2020, the Company executed an amendment to its convertible note payable issued to Alpha Capital Anstalt on May 27, 2020, curing the defaults under the terms of the original note. The principal was restated under the default terms to be $9, the maturity was extended to June 30, 2021, the conversion terms were changed from fixed percentage discount to a fixed price of $0.015. Additionally, the investor is now entitled to deduct $1,000 for each conversion to cover related costs. On December 9, 2020, the Company executed an amendment to its convertible note payable issued to Trillium Partners LP on June 26, 2020, curing the defaults under the terms of the original note. The principal was restated under the default terms to be $154, the maturity was extended to June 30, 2021, the conversion terms were changed from fixed percentage discount to a fixed price of $0.015. Additionally, the investor is now entitled to deduct $1,000 for each conversion to cover related costs. On December 9, 2020, the Company executed an amendment to its convertible note payable issued to Trillium Partners LP on August 27, 2020, curing the defaults under the terms of the original note. The principal was restated under the default terms to be $71, the maturity was extended to June 30, 2021, the conversion terms were changed from fixed percentage discount to a fixed price of $0.015. Additionally, the investor is now entitled to deduct $1,000 for each conversion to cover related costs. The amendments to the notes above have been recognized in the financial statements as of September 30, 2020, as loss on debt extinguishment (for changes in principal amount of $315) the beneficial conversion features recorded as additional paid in capital and were charged to loss on debt extinguishment ($901) and debt discount of $315 which will be amortized with periodic charges to interest expense over the amended terms of the notes. Amendments to Convertible Notes Issued Subsequent to September 30, 2020 to Cure Defaults On December 9, 2020, the Company executed an amendment to its convertible note payable issued to Alpha Capital Anstalt on November 3, 2020, curing the defaults under the terms of the original note. The principal was restated under the default terms to be $35, the maturity was extended to June 30, 2021, the conversion terms were changed from fixed percentage discount to a fixed price of $0.015. Additionally, the investor is now entitled to deduct $1,000 for each conversion to cover related costs. On December 9, 2020, the Company executed an amendment to its convertible note payable issued to an individual on November 3, 2020, curing the defaults under the terms of the original note. The principal was restated under the default terms to be $26, the maturity was extended to June 30, 2021, the conversion terms were changed from fixed percentage discount to a fixed price of $0.015. Additionally, investor is now entitled to deduct $1,000 for each conversion to cover related costs. On December 9, 2020, the Company executed an amendment to its convertible note payable issued to another individual on November 3, 2020, curing the defaults under the terms of the original note. The principal was restated under the default terms to be $26, the maturity was extended to June 30, 2021, the conversion terms were changed from fixed percentage discount to a fixed price of $0.015. Additionally, the investor is now entitled to deduct $1,000 for each conversion to cover related costs. On December 9, 2020, the Company executed an amendment to its convertible note payable issued to Trillium Partners LP on November 3, 2020, curing the defaults under the terms of the original note. The principal was restated under the default terms to be $43, the maturity was extended to June 30, 2021, the conversion terms were changed from fixed percentage discount to a fixed price of $0.015. Additionally, the investor is now entitled to deduct $1,000 for each conversion to cover related costs. | NOTE 13 – SUBSEQUENT EVENTS In February 2020, the Company issued one unsecured convertible promissory note for $153,000, bearing interest at 22% per annum, and maturing in August 2020. The note is convertible at a 39% discount to the price of the Company’s common stock, as defined. In February 2020, the Company received $30,000 for subscriptions for shares of common stock to be issued in a private placement. On December 19, 2019, the Company entered into a non-cancelable real property lease agreement for approximately 3096 square feet of office, research, and production space in Burbank, California. The Company took possession of the space in February 2020. The lease term is for 60 months with an option to extend the term for an additional five years thereafter. The lease has with the annual fixed rental payments escalating from $7,500 to $8,441 during the original term. The aggregate total fixed rent is approximately $478,000 and will result in the recognition of an operating lease right-of-use asset of approximately $430,000 and corresponding lease liabilities of approximately the same amount. The Company also paid a security deposit of $16,883. In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, have adversely affected workforces, customers, economies, and financial markets globally, likely leading to an economic downturn. It has also disrupted the normal operations of many businesses. This outbreak could decrease spending, adversely affect demand for our product and harm our business and results of operations. It is not possible for us to predict the duration or magnitude of the adverse results of the outbreak and its effects on our business or results of operations at this time. In March 2020, the Company issued approximately 241,000 shares of common stock with a fair value of approximately $28,000 to employees for services. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Going Concern | Going Concern The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, for the nine months ended September 30, 2020, the Company incurred a net loss of $5,931 and used cash in operating activities of $1,804, and at September 30, 2020, the Company had a stockholders’ deficit of $1,850. These factors raise substantial doubt about the Company’s ability to continue as a, going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in their report on the Company’s December 31, 2019 audited financial statements, raised substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. At September 30, 2020, the Company had cash on hand in the amount of $11. Subsequent to September 30, 2020, the Company received $1,643 from the issuance of notes payable. Management estimates that the current funds on hand will be sufficient to continue operations through the next three months. The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing | Going Concern The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, for the year ended December 31, 2019, the Company incurred a net loss of $5,787,364 and used cash in operating activities of $2,221,320, and at December 31, 2019, the Company had a had a working capital deficiency of $113,909. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. At December 31, 2019, the Company had cash on hand in the amount of $433,143. Subsequent to December 31, 2019 the Company received $153,000 from the issuance of a convertible note payable and $30,000 for subscriptions to purchase shares of common stock. Management estimates that the current funds on hand will be sufficient to continue operations through the next six months. The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing |
Basis of Presentation and Principles of Consolidation | Basis of presentation and principles of Consolidation The accompanying unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2020 and 2019, have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods have been included. The results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2020. The Condensed Consolidated Balance Sheet information as of December 31, 2019 was derived from the Company’s audited Consolidated Financial Statements as of and for year ended December 31, 2019, included in the Company’s Annual Report on Form 10-K/A filed with the SEC on April 10, 2020. These financial statements should be read in conjunction with that report. The consolidated financial statements include the accounts of Quanta Inc, and its wholly-owned subsidiary, Bioanomaly, Inc. Intercompany transactions have been eliminated in consolidation. | Basis of presentation and principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting standards generally accepted in the United States of America. In December 2018, the Company its fiscal year end from March 31 to December 31. The transition period covering the nine-month period from April 1, 2018 to December 31, 2018 is included in the accompany consolidated financial statements. The consolidated financial statements include the accounts of Quanta Inc, and its wholly-owned subsidiary, Bioanomaly, Inc. All intercompany balances and transactions have been eliminated in consolidation. |
COVID-19 | COVID-19 The global outbreak of COVID-19 has negatively affected the U.S. and global economies and has negatively impacted businesses, workforces, customers, and created significant volatility of financial markets. It has also disrupted the normal operations of many businesses, including ours. The extent of the impact of the pandemic on our business and financial results will depend largely on future developments, including the duration and severity of the outbreak, the length of restrictions and business closures, and the impact on capital and financial markets, all of which are highly uncertain and cannot be predicted. This outbreak could decrease spending, adversely affect demand for our products and harm our business and results of operations. In the quarter ended June 30, 2020 and September 30, 2020, we believe the COVID-19 pandemic did impact our operating results as shipments to customers in the second quarter and third quarter were down 13% and 10% from the first quarter of the year. However, we have not observed any material impairments of our assets or a significant change in the fair value of our assets due to the COVID-19 pandemic. While it is not possible at this time to estimate the full impact that COVID-19 will have on our business, restrictions resulting from COVID-19 on general economic conditions could, among other things, impair our ability to raise capital when needed. This situation is changing rapidly, and additional impacts may arise that we are not aware of currently. | |
Use of Estimates | Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to, among others, allowance for doubtful accounts receivable, impairment analysis of long-term assets, valuation allowance on deferred income taxes, assumptions used in valuing stock instruments issued for services, assumptions made in valuing derivative liabilities, and the accrual of potential liabilities. Actual results may differ from these estimates. | Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to, among others, allowance for doubtful accounts receivable, impairment analysis of long-term assets, valuation allowance on deferred income taxes, assumptions used in valuing stock instruments issued for services, assumptions made in valuing derivative liabilities, and the accrual of potential liabilities. Actual results may differ from these estimates. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at the invoiced amount less an allowance for any uncollectible accounts if deemed necessary, and payments are generally due within thirty to forty-five days of invoicing. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history, and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. At December 31, 2019 and December 31, 2018, the Company did not record any allowance for uncollectible accounts. | |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. We regularly review our inventory quantities on hand and record a provision for excess and obsolete inventory based primarily on our estimated forecast of product demand and our ability to sell the product(s) concerned. Demand for our products can fluctuate significantly. Additionally, our management’s estimates of future product demand may be inaccurate, which could result in an understated or overstated provision required for excess and obsolete inventory. At December 31, 2019 and 2018, the Company had no reserve for inventory obsolescence. | |
Equipment | Equipment Equipment is stated at cost less accumulated depreciation. Depreciation is provided over the estimated useful lives of the equipment, which is three years, using the straight-line method. Expenditures for major additions and improvements are capitalized and minor repairs and maintenance are charged to expense as incurred. When equipment is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Management assesses the carrying value of equipment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If there is indication of impairment, management prepares an estimate of future cash flows expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. For the year ended December 31, 2019 and for the nine-months period ended December 31, 2018, the Company determined there were no indicators of impairment of its property and equipment. | |
Revenue | Revenue The Company follows the guidance of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients. Product Sales License revenue Cost of goods sold includes direct costs and fees related to the sale of our products. | Revenue The Company follows the guidance of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Product Sales Revenue is recorded at the transaction price, which is the amount of consideration the Company expects to receive in exchange for transferring products to a customer. Generally, the Company’s performance obligations are transferred to the customer at a point in time, typically upon delivery of products. The Company historically has offered no discounts, rebates, rights of return, or other allowances to clients which would result in the establishment of reserves against revenue. The Company sells its products (i) directly to customers (“DTC”) through online orders from our websites, and DTC sales at conventions and events; and (ii) through wholesalers, including physicians, pharmacies, fitness studios, grocery stores, and other organizations. License revenue Cost of goods sold includes direct costs and fees related to the sale of our products. Disaggregated Revenue The composition of the Company’s net revenues recognized during the year ended December 31, 2019 and the nine-month period ended December 31, 2018, disaggregated by source and nature, are as follows: Year ended Nine-months ended By Sales Channel: Direct to consumer $ 443,916 $ 67,806 Wholesale 793,284 157,448 License Revenue 31,788 - $ 1,268,988 $ 225,254 By Geographic Territory: California $ 766,469 $ 156,974 Other states 477,139 68,280 International 25,380 - $ 1,268,988 $ 225,254 |
Leases | Leases Effective January 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company determines if an arrangement contains a lease at the inception of the contract. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term while lease liabilities represent our obligation to make lease payments arising from the lease. All leases with terms greater than twelve months result in the recognition of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease term. Leases with terms of twelve months or less at the commencement date are expensed on a straight-line basis over the lease term and do not result in the recognition of an asset or liability (see Note 5). | Leases Prior to January 1, 2019, the Company accounted for leases under ASC 840, Accounting for Leases. Effective January 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standard in effect for those periods. The adoption of ASC 842 on January 1, 2019 resulted in the recognition of operating lease right-of-use assets and lease liabilities of $420,112 and did not result in a cumulative-effect adjustment to accumulated deficit (see Note 5). |
Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a probability weighted average Black-Scholes-Merton model to value the derivative instruments at inception and on subsequent valuation dates through the September 30, 2020, reporting date. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period | Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a probability weighted average Black-Scholes-Merton model to value the derivative instruments at inception and on subsequent valuation dates through the December 31, 2019, reporting date. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period |
Convertible Notes with Fixed Rate Conversion Options | Convertible Notes with Fixed Rate Conversion Options The Company may enter into convertible notes, some of which contain, predominantly, fixed rate conversion features, whereby the outstanding principal and accrued interest may be converted by the holder, into common shares at a fixed discount to the market price of the common stock at the time of conversion. This results in a fair value of the convertible note being equal to a fixed monetary amount. The Company records the convertible note liability at its fixed monetary amount by measuring and recording a premium, as applicable, on the Note date with a charge to interest expense in accordance with ASC 480 - “Distinguishing Liabilities from Equity”. | |
Income taxes | Income taxes The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. | |
Stock Compensation | Stock Compensation The Company periodically issues stock options and restricted stock awards to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for such grants issued and vesting based on ASC 718, whereby the value of the award is measured on the date of grant and recognized as compensation expense on the straight-line basis over the vesting period. The Company recognizes the fair value of stock-based compensation within its Statements of Operations with classification depending on the nature of the services rendered. The fair value of the Company’s stock options is estimated using a Black-Scholes-Merton option pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton option pricing model and based on actual experience. The assumptions used in the Black-Scholes-Merton option pricing model could materially affect compensation expense recorded in future periods. | Stock Compensation The Company issues stock options, warrants, shares of common stock, and restricted stock unit awards, as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation to employees in accordance with FASB ASC 718, Compensation – Stock Compensation In periods through December 31, 2018, the Company accounted for share-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50, Equity - Based Payments to Non-Employees On January 1, 2019, the Company adopted ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting |
Advertising Costs | Advertising costs Advertising costs are expensed as incurred. During the nine months ended September 30, 2020 and 2019, advertising costs totaled $53 and $58, respectively. | Advertising costs Advertising costs are expensed as incurred. During the year ended December 31, 2019 and the nine-month period ended December 31, 2018, advertising costs totaled $103,401 and $27,529, respectively. |
Research and Development Costs | Research and Development Costs Costs incurred for research and development are expensed as incurred. During the nine months ended September 30, 2020 and 2019, research and development costs totaled $307 and $197, respectively and include salaries, benefits, and overhead costs of personnel conducting research and development of the Company’s products. | Research and Development Costs Costs incurred for research and development are expensed as incurred. During the year ended December 31, 2019 and the nine-month period ended December 31, 2018, research and development costs totaled $351,670 and 207,600, respectively and include salaries, benefits, and overhead costs of personnel conducting research and development of the Company’s products. |
Net Loss Per Share | Net Loss per Share Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period, excluding shares of unvested restricted common stock. Shares of restricted stock are included in the basic weighted average number of common shares outstanding from the time they vest. At September 30, 2020, shares used in the calculation of basic net loss per common share include 4,125,000 of vested but unissued shares underlying awards of restricted common stock. Diluted earnings per share is computed by dividing the net income applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Shares of restricted stock are included in the diluted weighted average number of common shares outstanding from the date they are granted. Potential common shares are excluded from the computation when their effect is anti-dilutive. For the nine months ended September 30, 2020, the dilutive impact of stock options exercisable into 2,732,261 shares of common stock, convertible notes convertible into 61,171,291 shares of common stock, and 4,500,000 shares of unvested restricted common stock have been excluded from calculation of weighted average shares because their impact on the loss per share is anti-dilutive. It should be noted that under the contractual terms of the convertible notes; one note holder is limited no more than 4.99% of outstanding shares; the other note holders are limited to no more than 9.99% of the outstanding shares at any time within 61 days of conversion. Therefore at September 30, 2020, the note holders could not convert their respective notes into more than 20,361,669 common shares. | Net Loss per Share Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Shares used in the calculation of basic net loss per common share include vested but unissued shares underlying awards of restricted common stock. Diluted loss per share reflects the potential dilution, using the treasury stock method that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the Company. In computing diluted loss per share, the treasury stock method assumes that outstanding warrants and convertible notes are exercised and the proceeds are used to purchase common stock at the average market price during the period. Warrants and convertible notes may have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options and warrants. For the year ended December 31, 2019, the dilutive impact of stock options exercisable into 3,290,000 shares of common stock, 8,000,000 shares of restricted stock to be issued, and convertible notes payable that can convert into 889,469 shares of common stock have been excluded from calculation of weighted average shares because their impact on the loss per share is anti-dilutive. For the year ended December 31, 2019, the dilutive impact of stock warrants exercisable into 3,000,000 shares of common stock have been excluded because their impact on the loss per share is anti-dilutive. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows the authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) for fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3—Unobservable inputs based on the Company’s assumptions. The Company is required to use observable market data if such data is available without undue cost and effort. The Company believes the carrying amount reported in the balance sheet for cash, accounts receivable, accounts payable and accrued liabilities, and notes payable, approximate their fair values because of the short-term nature of these financial instruments As of September 30, 2020, the Company’s balance sheet includes Level 2 liabilities comprised of the fair value of embedded derivative liabilities of $179 (see Note 8). | Fair Value of Financial Instruments The Company follows the authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) for fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3—Unobservable inputs based on the Company’s assumptions. The Company is required to use of observable market data if such data is available without undue cost and effort. The Company believes the carrying amount reported in the balance sheet for cash, accounts receivable, accounts payable and accrued liabilities, and notes payable, approximate their fair values because of the short-term nature of these financial instruments As of December 31, 2019, the Company’s balance sheet includes Level 2 liabilities comprised of the fair value of embedded derivative liabilities of $400,139 (see Note 8). |
Concentrations of Risks | Concentrations of risks For the nine months ended September 30, 2020 and 2019, one customer accounted for 15% or more of revenue. No other customer accounted for 10% or more of revenue. As of September 30, 2020, one customer accounted for 17% of accounts receivable, and one accounted for 10% of accounts receivable. No other customer accounted for 10% or more of accounts receivable. As of December 31, 2019, two customers accounted for 19% and 12% of accounts receivable, respectively. No other customer accounted for 10% or more of accounts receivable. As of September 30, 2020, four vendors accounted for 11% and 17% and 14% and 14% of accounts payable, respectively, and no other vendor accounted for 10% or more of accounts payable. As of September 30, 2020 no vendor accounted for 10% or more of accounts payable. The Company maintains the majority of its cash balances with one financial institution, in the form of demand deposits that are insured by the Federal Deposit Insurance Corporation, or FDIC. At times, deposits held may exceed the amount of insurance provided by the FDIC. The Company has not experienced any losses in its cash and believes it is not exposed to any significant credit risk. | Concentrations of risks For the year ended December 31, 2019 and the nine-month period ended December 31, 2018, no customer accounted for 10% or more of revenue. As of December 31, 2019, two customers accounted for 19% and 12% of accounts receivable, respectively, and no other customer accounted for 10% or more of accounts receivable. As of December 31, 2018, no customer accounted for more than 10% of accounts receivable. Additionally, for the same periods, no vendor accounted for 10% or more of the Company’s cost of goods sold, or accounts payable at period-end. The Company maintains the majority of its cash balances with one financial institution, in the form of demand deposits that are insured by the Federal Deposit Insurance Corporation, or FDIC. At times, deposits held may exceed the amount of insurance provided by the FDIC. The Company has not experienced any losses in its cash and believes it is not exposed to any significant credit risk. |
Segments | Segments The Company operates in one segment for the development and distribution of our CBD products. In accordance with the “ Segment Reporting | Segments The Company operates in one segment for the development and distribution of our CBD products. In accordance with the “ Segment Reporting |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326). ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted. The Company does not believe the potential impact of the new guidance and related codification improvements will be material to its financial position, results of operations and cash flows. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. | Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for interim and annual reporting periods beginning after December 15, 2022. The Company is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Disaggregated Revenue | The composition of the Company’s net revenues recognized during the year ended December 31, 2019 and the nine-month period ended December 31, 2018, disaggregated by source and nature, are as follows: Year ended Nine-months ended By Sales Channel: Direct to consumer $ 443,916 $ 67,806 Wholesale 793,284 157,448 License Revenue 31,788 - $ 1,268,988 $ 225,254 By Geographic Territory: California $ 766,469 $ 156,974 Other states 477,139 68,280 International 25,380 - $ 1,268,988 $ 225,254 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | ||
Schedule of Inventories | Inventories are valued at the lower of cost (first-in, first-out) or net realizable value, and consisted of the following: September 30, 2020 December 31, 2019 Raw materials and packaging $ 120 $ 103 Finished goods 37 20 $ 157 $ 123 | Inventories are valued at the lower of cost (first-in, first-out) or net realizable value, and consisted of the following: December 31, 2019 December 31, 2018 Raw materials and packaging $ 102,428 $ - Finished goods 20,091 - $ 122,519 $ - |
Equipment (Tables)
Equipment (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of Equipment | Equipment, stated at cost, less accumulated depreciation consisted of the following: September 30, 2020 December 31, 2019 Machinery-technology equipment $ 705 $ 607 Machinery-technology equipment under construction 12 30 717 637 Less accumulated depreciation (485 ) (324 ) $ 232 $ 313 | Equipment, stated at cost, less accumulated depreciation consisted of the following: December 31, 2019 December 31, 2018 Machinery-technology equipment $ 607,000 $ 347,500 Machinery-technology equipment under construction 30,000 175,000 637,000 522,500 Less accumulated depreciation (323,522 ) (149,620 ) $ 313,478 $ 372,880 |
Operating Leases (Tables)
Operating Leases (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Schedule of Lease Expense and Supplemental Cash Flow Information Related to Leases | The components of lease expense and supplemental cash flow information related to leases for the period are as follows: Nine months ended September 30, 2020 (in thousands) Lease Cost Operating lease cost (included in selling, general, and administrative expense in the Company’s statement of operations) $ 171,332 Other Information Cash paid for amounts included in the measurement of lease liabilities for 2020 $ 92 Weighted average remaining lease term – operating leases (in years) 3.25 Average discount rate – operating leases 4 % | The components of lease expense and supplemental cash flow information related to leases for the period are as follows: Year ended December 31, 2019 Lease Cost Operating lease cost (included in selling, general, and administrative expense in the Company’s statement of operations) $ 107,588 Other Information Cash paid for amounts included in the measurement of lease liabilities for 2019 $ 98,375 Weighted average remaining lease term – operating leases (in years) 3.5 Average discount rate – operating leases 4 % |
Schedule of Supplemental Balance Sheet Information Related to Leases | The supplemental balance sheet information related to leases for the period is as follows: At September 30, 2020 Operating leases Long-term right-of-use assets $ 382 Short-term operating lease liabilities $ 99 Long-term operating lease liabilities 315 Total operating lease liabilities $ 414 | The supplemental balance sheet information related to leases for the period is as follows: At December 31, 2019 Operating leases Long-term right-of-use assets $ 332,980 Short-term operating lease liabilities $ 85,662 Long-term operating lease liabilities 251,791 Total operating lease liabilities $ 337,453 |
Schedule of Maturities of Operating Lease Liabilities | Maturities of the Company’s lease liabilities are as follows: Year Ending Operating Leases 2020 $ 23 2021 94 2022 96 2023 99 2024 102 Total lease payments 414 Less: Imputed interest/present value discount (- ) Present value of lease liabilities 414 Less current portion (99 ) Operating lease liabilities, long-term $ 315 | Maturities of the Company’s lease liabilities are as follows: Year Ending Operating Leases 2020 $ 97,625 2021 102,506 2022 107,632 2023 55,126 Total lease payments 362,889 Less: Imputed interest/present value discount (25,436 ) Present value of lease liabilities 337,453 Less current portion (85,662 ) Operating lease liabilities, long-term $ 251,791 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Schedule of Notes Payable | September 30, 2020 December 31, 2019 Secured (a) Notes payable secured by equipment $ 440 $ - (a) Deferred finance charges on notes payable secured by equipment (89 ) - (b) Note payable secured by assets 33 56 Unsecured (c) Note payable-Payroll Protection Loan 134 - (d) Note payable- Economic Injury Disaster Loan 160 - (e) Revenue sharing agreement 250 - (e) Deferred finance charges, revenue sharing (25 ) - Total notes payable outstanding 903 56 Current portion 420 - Long-term portion $ 483 $ 56 (a) In April 2020 and May 2020, the Company entered into two financing agreements aggregating $506. The notes were issued at a discount including fees for underwriting , legal and administrative costs along with deferred financing costs. The deferred financing costs are being amortized over the terms of the notes. The notes are secured by the Company’s equipment, and require monthly payments of principal and interest of $21, and mature in April 2022 and May 2022. During the nine months ended September 30, 2020, the Company made payments of $67 and at September 30, 2020, the balance due on these notes was $439. (b) Note payable, interest at 8.3% per annum, secured by all the assets of the Company. The note was due January 13, 2019 and on April 24, 2020, the note holder waived the default through December 31, 2020. At December 31, 2019, the balance of this Note was $56, During the nine months ended September 30, 2020, the company made principal payments of $22, and at September 30, 2020, the balance due on this note was $33. (c) On May 7, 2020, the Company was granted a loan (the “PPP loan”) from Bank of America in the aggregate amount of $134, pursuant to the Paycheck Protection Program (the “PPP”) under the CARES Act. The PPP loan agreement is dated May 4, 2020, matures on May 4, 2022, bears interest at a rate of 1% per annum, with the first six months of interest deferred, is payable monthly commencing on November 2020, and is unsecured and guaranteed by the U.S. Small Business Administration (“SBA”). The loan term may be extended to April 20, 2025, if mutually agreed to by the Company and lender. We applied ASC 470, Debt (d) On September 5, 2020, the Company received a $150 loan (the “EID Loan”) from the SBA under the SBA’s Economic Injury Disaster Loan program. The EID Loan has a thirty-year term and bears interest at a rate of 3.75% per annum. Monthly principal and interest payments of $0.7 per month are deferred for twelve months, and commence in June 2021. The EID Loan may be prepaid at any time prior to maturity with no prepayment penalties. The proceeds from the EID Loan must be used for working capital. The Loan contains customary events of default and other provisions customary for a loan of this type. The Company was in compliance with the terms of the EID loan as of September 30, 2020. (e) Between July 7, 2020, and July 29, 2020, the Company issued notes payable to a third-party investors totaling $250. Under the terms of the note, the Company is to pay 50% of the net revenues beginning on August 21, 2020, for a product to be designed and produced by the Company. The product has not been produced and therefore no payments have been made. The Company issued 280,000 shares of common stock as fees in conjunction with this financing. The Company recorded $28, of discount which is being amortized to interest expense over the expected term of the arrangement. | December 31, 2019 December 31, 2018 Note payable, in default, due January 13, 2019, interest at 8.3% per annum, secured by all the assets of the Company. As of the date of the financial statements, the note has not been fully paid, and the Company is in negotiations with the lender to cure this default. $ 55,850 $ 80,000 Note payable, unsecured, due January 6, 2019, interest at 10% per year. The note was paid off in 2019. - 100,000 Total notes payable (all current portion) $ 55,850 $ 180,000 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Table) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes Payable | Convertible notes payable consisted of the following: September 30, 2020 December 31, 2019 Unsecured (a) Convertible notes with fixed discount percentage conversion prices 223 282 (b) Convertible notes with fixed conversion prices 497 - Default penalty principal added, charged to loss on debt extinguishment 315 - Put premiums on stock settled debt 155 - Total convertible notes principal outstanding 1,035 282 Debt discount (590 ) (225 ) Convertible notes, net of discount and premium $ 600 $ 57 Current portion 600 57 Long-term portion $ - $ - (a) At December 31, 2019, there were $282 of convertible notes with adjustable conversion prices outstanding. During the nine months ended September 30, 2020, the Company issued one unsecured convertible promissory note for $153, bearing interest at 22% per annum, and maturing in February 2021. Also during the nine months ended September 30, 2020, the Company also issued two unsecured convertible notes payable for $30, bearing interest at 10% per annum, and maturing on December 31, 2020, that were issued as loan commitment fees for notes payable. At the option of the holder, the notes are convertible into shares of the Company’s common stock at a price per share discount of 39% to 50% of the average market price of the Company’s common stock, as defined. As a result, the Company determined that the conversion options of the convertible notes were not considered derivatives and qualify as stock settled debt under ASC 480 – “Distinguishing Liabilities from Equity”. Therefore the Company calculated fixed premiums totaling $226 which were charged to interest expense at the dates of the note issuance. During the nine months ended September 30, 2020, one convertible note payable for $282 was paid off and another was partially converted into common stock. At September 30, 2020, the balance of these convertible notes was $223. (b) At December 31, 2019, the Company had no convertible notes outstanding with fixed conversion prices. During the nine months ended September 30, 2020, the Company issued seven convertible notes with fixed conversion prices aggregating $497. The notes are unsecured, bear interest at 10% per annum, and mature through March 31, 2021. The notes were initially convertible into shares of the Company’s common stock at a fixed conversion price of $0.05 per share. The Company recorded debt discounts of $531 to account for loan fees, beneficial conversion features ($323), and original issue discounts. The debt discounts are amortized over the life of the notes or are amortized in full upon the conversion of the corresponding notes to common stock. On September 2, 2020, the Company issued a convertible note (see paragraph a above) having a conversion price less than $0.05 which triggered a term common to all notes in paragraph b, which changed the conversion terms to be the lower of $0.05 or 61% of the lowest traded price during the 15 days prior to the conversion. This event is also considered a default for which a penalty is charged equal to 150% of the accrued interest, default interest and principal, totaling $315. On December 9, 2020, the Company executed amendments to these notes effective September 30, 2020 (as further discussed at Note 12), which extended the maturity dates and fixed the conversion price at $0.015. Due to the change in conversion terms the notes now require the recognition of the beneficial conversion feature of the increased principal and lowering of the conversion price resulting in recognition of additional charges of $1,215. Loss on debt extinguishment was charged $901 and debt discounts were charged $315 with a credit to additional paid in capital for the debt discounts which will be amortized to interest expense over the extended term of the amended notes. At September 30, 2020 the new principal totaled $812. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Schedule of Fair Value Assumption of Derivative Instruments | The derivative liabilities were valued at the following dates using a binomial model with the following assumptions: September 30, 2020 December 31, 2019 Conversion feature: Risk-free interest rate 0.17 % 1.8 % Expected volatility 182 % 222 % Expected life (in years) 3 – 12 months 1 year Expected dividend yield - - Fair Value: - - Conversion feature $ - $ 400 | The derivative liabilities were valued at the following dates using a probability weighted Black-Scholes-Merton model with the following assumptions: December 31, 2019 October 2019 Conversion feature: Risk-free interest rate 1.77 % 1.75 % Expected volatility 222 % 223 % Expected life (in years) 1 year 1 year Expected dividend yield - - Fair Value: Conversion feature $ 400,139 $ 565,195 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate | The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate: Year ended Nine-months ended Federal tax at statutory rate 21.0 % 21.0 % State tax, net of federal benefit 7.0 7.0 Change in valuation allowance (28.0 ) (28.0 ) Effective income tax rate 0.0 % 0.0 % |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities consist of the following: December 31, 2019 December 31, 2018 Deferred tax assets: Stock-based compensation $ 1,039,000 $ 160,000 Operating lease liability 94,000 - Derivative expenses 67,000 - Net operating loss carryforwards 1,132,000 425,000 Gross deferred tax assets 2,332,000 585,000 Less: valuation allowance (2,103,000 ) (540,000 ) Total deferred tax assets 229,000 45,000 Deferred tax liabilities: Depreciation 90,000 45,000 Derivative gain 46,000 - Operating lease right-of-use asset 93,000 - Total deferred tax liabilities 229,000 45,000 Net deferred tax asset (liability) $ - $ - |
Stock Based Compensation Paym_2
Stock Based Compensation Payments (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Summary of Restricted Common Stock Activity | The following table summarizes restricted common stock activity for the nine months ended September 30, 2020: Number of shares Fair value of shares Non-vested shares, December 31, 2019 5,750,000 $ 1,682 Granted - - Vested (1,875,000 ) (929 ) Forfeited - - Non-vested shares, September 30, 2020 3,875,000 $ 753 | The following table summarizes restricted common stock activity for the year ended December 31, 2019: Number of shares Fair value of shares Non-vested shares, January 1, 2019 - $ - Granted 8,000,000 4,000,000 Vested (2,250,000 ) (2,317,868 ) Forfeited - - Non-vested shares, December 31, 2019 5,750,000 $ 1,682,132 |
Schedule of Stock Option Activity | A summary of stock option activity during the three months ended September 30, 2020: Number of options Weighted Average Contractual Options Outstanding as of December 31, 2019 3,230,000 $ 0.10 6.0 Granted 900,000 0.11 10.0 Exercised - - - Expired - - - Options Outstanding as of September 30, 2020 4,130,000 0.11 6.5 Options Exercisable as of September 30, 2020 2,732,261 $ 0.10 5.5 | A summary of stock option activity during the year ended December 31, 2019 and the nine-month period ended December 31, 2018 is as follows: Number of Weighted Average Contractual Options Outstanding and Exercisable as of March 31, 2018 - $ - - Granted - $ - - Exercised - - - Expired - - - Options Outstanding and Exercisable as of December 31, 2018 - $ - - Granted 3,290,000 0.23 6.0 Exercised - - - Expired - - - Options Outstanding as of December 31, 2019 3,290,000 0.23 6.0 Options Exercisable as of December 31, 2019 1,800,000 $ 0.23 5.8 |
Schedule of Warrant Activity | A summary of warrant activity during the year ended December 31, 2019 and the nine-month period ended December 31, 2018 is as follows: Number of Weighted Average Contractual Warrants Outstanding and Exercisable as of March 31, 2018 - $ - - Granted 3,000,000 $ 0.30 4.00 Exercised - - - Expired - - - Warrants Outstanding and Exercisable as of December 31, 2018 3,000,000 $ 0.30 4.00 Granted - - - Exercised (3,000,000 ) $ 0.30 - Expired - - - Warrants Outstanding and Exercisable as of December 31, 2019 - $ - - |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Policies (Details Narrative) | 2 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Dec. 10, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)Segmentsshares | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($)Segmentsshares | Jun. 30, 2020USD ($) | Oct. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2018USD ($) | |
Net loss | $ (2,706,000) | $ (928,000) | $ (5,931,000) | $ (3,017,000) | $ (1,613,972) | $ (5,787,364) | |||||
Net cash used in operating activities | (1,804,000) | (968,000) | (1,028,501) | (2,221,320) | |||||||
Stockholders' equity (deficit) | (1,850,000) | 205,000 | (1,850,000) | 205,000 | 255,414 | 278,940 | $ (814,000) | $ 180,000 | $ (826,412) | ||
Cash on hand | 11,000 | 11,000 | 35,820 | 433,143 | |||||||
Advertising costs | 53,000 | 58,000 | 27,529 | 103,401 | |||||||
Research and development costs | 62,000 | $ 115,000 | $ 307,000 | $ 196,000 | $ 207,600 | 351,670 | |||||
Net income loss vested unissued shares | shares | 4,125,000 | ||||||||||
Debt conversion description | It should be noted that under the contractual terms of the convertible notes; one note holder is limited no more than 4.99% of outstanding shares; the other note holders are limited to no more than 9.99% of the outstanding shares at any time within 61 days of conversion. | ||||||||||
Debt conversion, number of common stock issuable | shares | 20,361,669 | ||||||||||
Derivative liability fair value | 0 | $ 0 | $ 400,139 | $ 565,195 | |||||||
Operating segments | Segments | 1 | 1 | |||||||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Minimum [Member] | |||||||||||
Concentration risk percentage | 10.00% | ||||||||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Minimum [Member] | |||||||||||
Concentration risk percentage | 10.00% | 10.00% | |||||||||
Accounts Payable [Member] | Vendor Concentration Risk [Member] | Minimum [Member] | |||||||||||
Concentration risk percentage | 10.00% | ||||||||||
Customer One [Member] | Revenue Benchmark [Member] | |||||||||||
Concentration risk percentage | 15.00% | 15.00% | |||||||||
Customer One [Member] | Accounts Receivable [Member] | |||||||||||
Concentration risk percentage | 17.00% | 19.00% | |||||||||
Customer Two [Member] | Accounts Receivable [Member] | |||||||||||
Concentration risk percentage | 10.00% | 12.00% | |||||||||
Vendor One [Member] | Accounts Payable [Member] | |||||||||||
Concentration risk percentage | 11.00% | ||||||||||
Vendor Two [Member] | Accounts Payable [Member] | |||||||||||
Concentration risk percentage | 17.00% | ||||||||||
Vendor Three [Member] | Accounts Payable [Member] | |||||||||||
Concentration risk percentage | 14.00% | ||||||||||
Vendor Four [Member] | Accounts Payable [Member] | |||||||||||
Concentration risk percentage | 14.00% | ||||||||||
Level 2 [Member] | |||||||||||
Derivative liability fair value | $ 179,000 | $ 179,000 | |||||||||
Restricted Stock [Member] | |||||||||||
Potentially dilutive shares outstanding | shares | 4,500,000 | 8,000,000 | |||||||||
Convertible Notes Payable [Member] | |||||||||||
Potentially dilutive shares outstanding | shares | 61,171,291 | 889,469 | |||||||||
Stock Options [Member] | |||||||||||
Potentially dilutive shares outstanding | shares | 2,732,261 | 3,290,000 | |||||||||
Subsequent Event [Member] | |||||||||||
Issuance of convertible note payable | $ 1,643,000 |
Description of Business and S_5
Description of Business and Summary of Significant Accounting Policies (Details Narrative) (10-K) | Jun. 06, 2018shares | Sep. 30, 2020USD ($) | Mar. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)Segmentsshares | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($)Segmentsshares | Dec. 31, 2018USD ($) | Feb. 29, 2020USD ($) | Oct. 31, 2019USD ($) | Jan. 02, 2019USD ($) |
Net loss | $ (2,706,000) | $ (928,000) | $ (5,931,000) | $ (3,017,000) | $ (1,613,972) | $ (5,787,364) | ||||||
Net cash used in operating activities | (1,804,000) | (968,000) | (1,028,501) | (2,221,320) | ||||||||
Working capital deficiency | 113,909 | |||||||||||
Cash on hand | 11,000 | 11,000 | 35,820 | 433,143 | $ 35,820 | |||||||
Proceeds from issuance of convertible note payable | 712,000 | 326,800 | ||||||||||
Allowance of uncollectible accounts | ||||||||||||
Inventory reserve | ||||||||||||
Estimated useful lives of equipment | 3 years | |||||||||||
Impairment of property plant and equipment | ||||||||||||
Operating lease right-of-use asset, net | 383,000 | 383,000 | 332,980 | $ 432,000 | ||||||||
Operating lease liabilities, short-term | 99,000 | 99,000 | 85,662 | |||||||||
Advertising costs | 53,000 | 58,000 | 27,529 | 103,401 | ||||||||
Research and development costs | 62,000 | $ 115,000 | 307,000 | $ 196,000 | $ 207,600 | 351,670 | ||||||
Derivative liability fair value | $ 0 | $ 0 | $ 400,139 | $ 565,195 | ||||||||
Operating segments | Segments | 1 | 1 | ||||||||||
Revenue Benchmark [Member] | Customer One [Member] | ||||||||||||
Concentration risk percentage | 15.00% | 15.00% | ||||||||||
Accounts Receivable [Member] | Customer One [Member] | ||||||||||||
Concentration risk percentage | 17.00% | 19.00% | ||||||||||
Accounts Receivable [Member] | Customer Two [Member] | ||||||||||||
Concentration risk percentage | 10.00% | 12.00% | ||||||||||
Accounts Receivable [Member] | No Other Customer [Member] | ||||||||||||
Concentration risk percentage | 10.00% | 10.00% | ||||||||||
No Customer [Member] | Revenue Benchmark [Member] | ||||||||||||
Concentration risk percentage | 10.00% | 10.00% | ||||||||||
No Vendor [Member] | Accounts Payable [Member] | ||||||||||||
Concentration risk percentage | 10.00% | |||||||||||
Convertible Notes Payable [Member] | ||||||||||||
Potentially dilutive shares outstanding | shares | 61,171,291 | 889,469 | ||||||||||
Restricted Stock [Member] | ||||||||||||
Potentially dilutive shares outstanding | shares | 4,500,000 | 8,000,000 | ||||||||||
Stock Options [Member] | ||||||||||||
Potentially dilutive shares outstanding | shares | 2,732,261 | 3,290,000 | ||||||||||
Warrants [Member] | ||||||||||||
Potentially dilutive shares outstanding | shares | 3,000,000 | |||||||||||
ASC 842 [Member] | ||||||||||||
Operating lease right-of-use asset, net | $ 420,112 | |||||||||||
Operating lease liabilities, short-term | $ 420,112 | |||||||||||
Subsequent Event [Member] | ||||||||||||
Proceeds from issuance of convertible note payable | $ 153,000 | |||||||||||
Subscription for shares of common stock received | $ 30,000 | |||||||||||
Freight Solution [Member] | ||||||||||||
Shares issued and outstanding percentage | 23.00% | |||||||||||
Bioanomaly, Inc. [Member] | ||||||||||||
Business acquisition number of shares issued | shares | 21,908,810 | |||||||||||
Number of offering shares of common stock | shares | 6,500,000 |
Description of Business and S_6
Description of Business and Summary of Significant Accounting Policies - Schedule of Disaggregated Revenue (Details) (10-K) - USD ($) | Jan. 22, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 |
Net revenues recognized | $ 100,000 | $ 324,000 | $ 393,000 | $ 999,000 | $ 931,000 | $ 225,254 | $ 1,268,988 |
California [Member] | |||||||
Net revenues recognized | 156,974 | 766,469 | |||||
Other States [Member] | |||||||
Net revenues recognized | 68,280 | 477,139 | |||||
International [Member] | |||||||
Net revenues recognized | 25,380 | ||||||
Direct to Consumer [Member] | |||||||
Net revenues recognized | 67,806 | 443,916 | |||||
Wholesale [Member] | |||||||
Net revenues recognized | 157,448 | 793,284 | |||||
License Revenue [Member] | |||||||
Net revenues recognized | $ 31,788 |
License Agreement (Details Narr
License Agreement (Details Narrative) - USD ($) | Jan. 22, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 |
Revenues | $ 100,000 | $ 324,000 | $ 393,000 | $ 999,000 | $ 931,000 | $ 225,254 | $ 1,268,988 |
Agreement term | 3 years | ||||||
Distributor License Fees [Member] | |||||||
Revenues | $ 9,000 | $ 9,000 | $ 25,000 | $ 17,000 | $ 31,788 |
License Agreement (Details Na_2
License Agreement (Details Narrative) (10-K) - USD ($) | Jan. 22, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 |
Revenues | $ 100,000 | $ 324,000 | $ 393,000 | $ 999,000 | $ 931,000 | $ 225,254 | $ 1,268,988 |
Agreement term | 3 years | ||||||
Distributor License Fees [Member] | |||||||
Revenues | $ 9,000 | $ 9,000 | $ 25,000 | $ 17,000 | $ 31,788 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | |||
Raw materials and packaging | $ 120,000 | $ 102,428 | |
Finished goods | 37,000 | 20,091 | |
Inventories | $ 157,000 | $ 122,519 |
Inventories - Schedule of Inv_2
Inventories - Schedule of Inventories (Details) (10-K) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | |||
Raw materials and packaging | $ 120,000 | $ 102,428 | |
Finished goods | 37,000 | 20,091 | |
Inventories | $ 157,000 | $ 122,519 |
Equipment (Details Narrative)
Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||||||
Depreciation expense | $ 55,000 | $ 50,000 | $ 162,000 | $ 122,000 | $ 86,875 | $ 173,902 |
Percentage of equipment completion | 80.00% | 80.00% | 33.00% |
Equipment (Details Narrative) (
Equipment (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||||||
Depreciation expense | $ 55,000 | $ 50,000 | $ 162,000 | $ 122,000 | $ 86,875 | $ 173,902 |
Percentage of equipment completion | 80.00% | 80.00% | 33.00% |
Equipment - Schedule of Equipme
Equipment - Schedule of Equipment (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Equipment, gross | $ 717,000 | $ 637,000 | $ 522,500 |
Less accumulated depreciation | (485,000) | (323,522) | (149,620) |
Equipment, net | 232,000 | 313,478 | 372,880 |
Machinery-technology Equipment [Member] | |||
Equipment, gross | 705,000 | 607,000 | 347,500 |
Machinery-technology Equipment Under Construction [Member] | |||
Equipment, gross | $ 12,000 | $ 30,000 | $ 175,000 |
Equipment - Schedule of Equip_2
Equipment - Schedule of Equipment (Details) (10-K) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Equipment, gross | $ 717,000 | $ 637,000 | $ 522,500 |
Less accumulated depreciation | (485,000) | (323,522) | (149,620) |
Equipment, net | 232,000 | 313,478 | 372,880 |
Machinery-technology Equipment [Member] | |||
Equipment, gross | 705,000 | 607,000 | 347,500 |
Machinery-technology Equipment Under Construction [Member] | |||
Equipment, gross | $ 12,000 | $ 30,000 | $ 175,000 |
Operating Leases (Details Narra
Operating Leases (Details Narrative) - USD ($) | Dec. 31, 2019 | Feb. 29, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 |
Operating lease description | At December 31, 2019, the Company had one operating lease for its headquarters office space in Burbank, California. In February 2020, the Company took possession of a second leased facility consisting of office, research, and production space also located in Burbank, California. | The Company leases its headquarters office space in Burbank, California under an operating lease that expires on July 31, 2023. | ||||||
Lease term | 5 years | 5 years | ||||||
Rental payments | $ 478,000 | |||||||
Operating lease right-of-use asset | $ 332,980 | 432,000 | $ 383,000 | $ 383,000 | $ 332,980 | |||
Total lease liabilities | 337,453 | 432,000 | 414,000 | 414,000 | 337,453 | |||
Security deposits | 17,000 | 17,000 | ||||||
Impairment of operating lease right of use asset | 255,000 | |||||||
Wrote of deposit | 17,000 | |||||||
Settlement reserve | 236,000 | 236,000 | ||||||
Lease expenses | $ 72,000 | $ 20,000 | $ 171,000 | $ 81,000 | $ 42,040 | $ 107,588 | ||
Minimum [Member] | ||||||||
Rental payments | 90,000 | |||||||
Maximum [Member] | ||||||||
Rental payments | $ 101,000 |
Operating Leases (Details Nar_2
Operating Leases (Details Narrative) (10-K) - USD ($) | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Feb. 29, 2020 |
Leases [Abstract] | ||||||||
Operating lease description | At December 31, 2019, the Company had one operating lease for its headquarters office space in Burbank, California. In February 2020, the Company took possession of a second leased facility consisting of office, research, and production space also located in Burbank, California. | The Company leases its headquarters office space in Burbank, California under an operating lease that expires on July 31, 2023. | ||||||
Operating lease right-of-use asset, net | $ 332,980 | $ 383,000 | $ 383,000 | $ 332,980 | $ 432,000 | |||
Total lease liabilities | 337,453 | 414,000 | 414,000 | 337,453 | $ 432,000 | |||
Operating lease liabilities, short-term | $ 85,662 | 99,000 | 99,000 | 85,662 | ||||
Lease expenses | $ 72,000 | $ 20,000 | $ 171,000 | $ 81,000 | $ 42,040 | $ 107,588 |
Operating Leases - Schedule of
Operating Leases - Schedule of Lease Expense and Supplemental Cash Flow Information Related to Leases (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost (included in selling, general, and administrative expense in the Company's statement of operations) | $ 171,332,000 | $ 107,588 |
Cash paid for amounts included in the measurement of lease liabilities for 2020 | $ 92,000 | $ 98,375 |
Weighted average remaining lease term - operating leases (in years) | 3 years 2 months 30 days | 3 years 6 months |
Average discount rate - operating leases | 4.00% | 4.00% |
Operating Leases - Schedule o_2
Operating Leases - Schedule of Lease Expense and Supplemental Cash Flow Information Related to Leases (Details) (10-K) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost (included in selling, general, and administrative expense in the Company's statement of operations) | $ 171,332,000 | $ 107,588 |
Cash paid for amounts included in the measurement of lease liabilities for 2019 | $ 92,000 | $ 98,375 |
Weighted average remaining lease term - operating leases (in years) | 3 years 2 months 30 days | 3 years 6 months |
Average discount rate - operating leases | 4.00% | 4.00% |
Operating Leases - Schedule o_3
Operating Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) | Sep. 30, 2020 | Feb. 29, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||||
Long-term right-of-use assets | $ 383,000 | $ 432,000 | $ 332,980 | |
Short-term operating lease liabilities | 99,000 | 85,662 | ||
Long-term operating lease liabilities | 315,000 | 251,791 | ||
Total operating lease liabilities | $ 414,000 | $ 432,000 | $ 337,453 |
Operating Leases - Schedule o_4
Operating Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) (10-K) - USD ($) | Sep. 30, 2020 | Feb. 29, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||||
Long-term right-of-use assets | $ 383,000 | $ 432,000 | $ 332,980 | |
Short-term operating lease liabilities | 99,000 | 85,662 | ||
Long-term operating lease liabilities | 315,000 | 251,791 | ||
Total operating lease liabilities | $ 414,000 | $ 432,000 | $ 337,453 |
Operating Leases - Schedule o_5
Operating Leases - Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) | Sep. 30, 2020 | Feb. 29, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||||
2020 | $ 23,000 | |||
2021 | 94,000 | $ 97,625 | ||
2022 | 96,000 | 102,506 | ||
2023 | 99,000 | 107,632 | ||
2024 | 102,000 | 55,126 | ||
Total lease payments | 414,000 | 362,889 | ||
Less: Imputed interest/present value discount | (25,436) | |||
Present value of lease liabilities | 414,000 | $ 432,000 | 337,453 | |
Less current portion | (99,000) | (85,662) | ||
Operating lease liabilities, long-term | $ 315,000 | $ 251,791 |
Operating Lease - Schedule of M
Operating Lease - Schedule of Maturities of Operating Lease Liabilities (Details) (10-K) - USD ($) | Sep. 30, 2020 | Feb. 29, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||||
2020 | $ 94,000 | $ 97,625 | ||
2021 | 96,000 | 102,506 | ||
2022 | 99,000 | 107,632 | ||
2023 | 102,000 | 55,126 | ||
Total lease payments | 414,000 | 362,889 | ||
Less: Imputed interest/present value discount | (25,436) | |||
Present value of lease liabilities | 414,000 | $ 432,000 | 337,453 | |
Less current portion | (99,000) | (85,662) | ||
Operating lease liabilities, long-term | $ 315,000 | $ 251,791 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Sep. 05, 2020 | May 07, 2020 | Jul. 29, 2020 | May 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Financing agreements | $ 506,000 | |||||
Principal interest price per share | $ 21,000 | |||||
Debt instrument maturity description | April 2022 and May 2022 | |||||
Principal payments | $ 67,000 | |||||
Outstanding balance | 439,000 | |||||
Debt discount | $ 590,000 | $ 225,000 | ||||
EID Loan [Member] | ||||||
Principal interest price per share | $ 0.7 | |||||
Notes bear interest | 3.75% | |||||
Proceeds from loans | $ 150,000 | |||||
Notes Payable [Member] | ||||||
Debt instrument maturity description | January 13, 2019 and on April 24, 2020 | |||||
Principal payments | $ 22,000 | |||||
Outstanding balance | $ 33,000 | $ 56,000 | ||||
Notes bear interest | 8.30% | |||||
Notes Payable [Member] | Third Party Investors [Member] | ||||||
Debt instrument face amount | $ 250,000 | |||||
Terms of notes | Under the terms of the note, the Company is to pay 50% of the net revenues beginning on August 21, 2020, for a product to be designed and produced by the Company. The product has not been produced and therefore no payments have been made. The Company issued 280,000 shares of common stock as fees in conjunction with this financing. The Company recorded $28, of discount which is being amortized to interest expense over the expected term of the arrangement. | |||||
Debt discount | $ 28,000 | |||||
PPP Loan [Member] | ||||||
Notes bear interest | 1.00% | |||||
Proceeds from loans | $ 134,000 | |||||
Debt maturity date | May 4, 2022 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | |||
Secured: Notes payable secured by equipment | $ 440,000 | ||
Secured: Deferred finance charges on notes payable secured by equipment | (89,000) | ||
Secured: Note payable secured by assets | 33,000 | 55,850 | |
Unsecured: Note payable-Payroll Protection Loan | 134,000 | ||
Unsecured: Note payable- Economic Injury Disaster Loan | 160,000 | ||
Unsecured: Revenue sharing agreement | 250,000 | ||
Unsecured: Deferred finance charges, revenue sharing | (25,000) | ||
Total notes payable outstanding | 903,000 | 55,850 | |
Current portion | 420,000 | 55,850 | $ 180,000 |
Long-term portion | $ 483,000 |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (10-K) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Total notes payable (all current portion) | $ 420,000 | $ 55,850 | $ 180,000 |
Note Payable One [Member] | |||
Total notes payable (all current portion) | 55,850 | 80,000 | |
Note Payable Two [Member] | |||
Total notes payable (all current portion) | $ 100,000 |
Notes Payable - Schedule of N_3
Notes Payable - Schedule of Notes Payable (Details) (10-K) (Parenthetical) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Dec. 31, 2019 | |
Note Payable One [Member] | ||
Note payable due date | Jan. 13, 2019 | Jan. 13, 2019 |
Note payable interest rate | 8.30% | 8.30% |
Note Payable Two [Member] | ||
Note payable due date | Jan. 6, 2019 | Jan. 6, 2019 |
Note payable interest rate | 10.00% | 10.00% |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Unamortized discount | $ 590,000 | $ 225,000 |
Convertible Notes [Member] | ||
Unamortized discount | 590,000 | $ 225,000 |
Debt discount | 761,000 | |
Amortization of debt discount | $ 396,000 |
Convertible Notes Payable - Sc
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | ||||
Convertible notes with fixed discount percentage conversion prices | [1] | $ 223,000 | $ 282,000 | |
Convertible notes with fixed conversion prices | [2] | 497,000 | ||
Default penalty principal added, charged to loss on debt extinguishment | 315,000 | |||
Put premiums on stock settled debt | 155,000 | |||
Total convertible notes principal outstanding | 1,035,000 | 282,000 | ||
Debt discount | (590,000) | (225,000) | ||
Convertible notes, net of discount and premium | 600,000 | 57,000 | ||
Current portion | 600,000 | 57,340 | ||
Long-term portion | ||||
[1] | At December 31, 2019, there were $282 of convertible notes with adjustable conversion prices outstanding. During the nine months ended September 30, 2020, the Company issued one unsecured convertible promissory note for $153, bearing interest at 22% per annum, and maturing in February 2021. Also during the nine months ended September 30, 2020, the Company also issued two unsecured convertible notes payable for $30, bearing interest at 10% per annum, and maturing on December 31, 2020, that were issued as loan commitment fees for notes payable. At the option of the holder, the notes are convertible into shares of the Company's common stock at a price per share discount of 39% to 50% of the average market price of the Company's common stock, as defined. As a result, the Company determined that the conversion options of the convertible notes were not considered derivatives and qualify as stock settled debt under ASC 480 - "Distinguishing Liabilities from Equity". Therefore the Company calculated fixed premiums totaling $226 which were charged to interest expense at the dates of the note issuance. During the nine months ended September 30, 2020, one convertible note payable for $282 was paid off and another was partially converted into common stock. At September 30, 2020, the balance of these convertible notes was $223. | |||
[2] | At December 31, 2019, the Company had no convertible notes outstanding with fixed conversion prices. During the nine months ended September 30, 2020, the Company issued seven convertible notes with fixed conversion prices aggregating $497. The notes are unsecured, bear interest at 10% per annum, and mature through February 28, 2021. The notes are convertible into shares of the Company's common stock at a fixed conversion price of $0.05 per share. The Company recorded debt discounts of $531 to account for loan fees, beneficial conversion features ($323), and original issue discounts. The debt discounts are amortized over the life of the notes or are amortized in full upon the conversion of the corresponding notes to common stock. On September 2, the Company issued a convertible note (paragraph a) having a conversion price less than $0.05 which triggered a term common to all notes in paragraph b, which changed the conversion terms to be the lower of $0.05 or 61% of the lowest traded price during the 15 days prior to the conversion. This event is also considered a default for which a penalty is charged equal to 150% of the accrued interest, default interest and principal, totaling $315. On December 9, 2020, the Company executed amendments to these notes (as further discussed at Note 12), which extended the maturity dates and fixed the conversion price at $0.015. Due to the change in conversion terms the notes now require the recognition of the beneficial conversion feature of the increased principal and lowering of the conversion price resulting in recognition of additional charges of $1,215, Loss on debt extinguishment was charged $901 and debt discounts were charged $315 wit a credit to additional paid in capital the debt discounts will be amortized to interest expense over the extended term of the amended notes. At September 30, 2020 the new principal totaled $812. |
Convertible Notes Payable - _2
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) (Parenthetical) | Dec. 09, 2020USD ($)$ / shares | Sep. 02, 2020USD ($)Integer$ / shares | Feb. 29, 2020 | Sep. 30, 2020USD ($)$ / shares | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)$ / shares | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($) |
Fixed premiums | $ 155,000 | $ 155,000 | |||||||
Payments of convertible debt | 282,000 | 73,000 | |||||||
Loss on debt extinguishment | (1,081,000) | (795,000) | $ 41,000 | ||||||
Convertible Notes Payable [Member] | |||||||||
Convertible note outstanding | $ 282,000 | ||||||||
Fixed premiums | 226,000 | 226,000 | |||||||
Payments of convertible debt | 282,000 | ||||||||
Convertible notes | 223,000 | $ 223,000 | |||||||
Convertible Notes Payable [Member] | Subsequent Event [Member] | |||||||||
Fixed conversion price | $ / shares | $ 0.015 | ||||||||
Debt instrument additional charges | $ 1,215,000 | ||||||||
Debt discount | 315,000 | ||||||||
Loss on debt extinguishment | $ 901,000 | ||||||||
Convertible Notes Payable [Member] | Minimum [Member] | |||||||||
Debt conversion price percentage | 39.00% | ||||||||
Fixed conversion price | $ / shares | $ 0.05 | ||||||||
Debt triggered price | $ / shares | $ 0.05 | ||||||||
Debt conversion percentage | 0.61 | ||||||||
Debt trading days | Integer | 15 | ||||||||
Debt accrued interest, default interest and principal percentage | 150.00% | ||||||||
Debt accrued interest, default interest and principal | $ 315,000 | ||||||||
Convertible Notes Payable [Member] | Maximum [Member] | |||||||||
Debt conversion price percentage | 50.00% | ||||||||
One Unsecured Convertible Promissory Note [Member] | |||||||||
Unsecured convertible promissory note | $ 153,000 | $ 153,000 | |||||||
Debt interest percentage | 22.00% | 22.00% | |||||||
Debt maturity date | Feb. 28, 2021 | ||||||||
One Unsecured Convertible Promissory Note [Member] | Subsequent Event [Member] | |||||||||
Debt interest percentage | 22.00% | ||||||||
Debt maturity date | Aug. 31, 2020 | ||||||||
Two Convertible Promissory Note [Member] | |||||||||
Unsecured convertible promissory note | $ 30,000 | $ 30,000 | |||||||
Debt interest percentage | 10.00% | 10.00% | |||||||
Seven Convertible Notes [Member] | |||||||||
Convertible notes | $ 497,000 | $ 497,000 | |||||||
Convertible Notes Payable Two [Member] | |||||||||
Debt interest percentage | 10.00% | 10.00% | |||||||
Debt maturity date | Mar. 31, 2021 | ||||||||
Fixed conversion price | $ / shares | $ 0.05 | $ 0.05 | |||||||
Debt discounts to account for loan fees | $ 531,000 | $ 531,000 | |||||||
Beneficial conversion features | (323,000) | ||||||||
Debt principal amount | $ 812,000 | $ 812,000 |
Convertible Notes Payable (De_2
Convertible Notes Payable (Details Narrative) (10-K) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
Proceeds from notes payable | $ 378,000 | $ 100,000 | |||
Original issue discount | 590,000 | 225,000 | |||
Repayment of convertible note | 282,000 | 73,000 | |||
Derivative liabilities conversion features | $ 565,195 | 0 | 400,139 | ||
Private placement costs | 238,395 | ||||
Derivative liabilities | 400,139 | ||||
Two Convertible Notes Payable [Member] | |||||
Convertible notes payable issued | 355,000 | ||||
Proceeds from notes payable | 326,800 | ||||
Original issue discount | $ 28,200 | ||||
Derivative liabilities conversion features | 565,195 | ||||
Debt discount | 326,800 | ||||
Private placement costs | $ 238,395 | ||||
Number of returnable shares | 705,000 | ||||
Convertible Note One [Member] | |||||
Repayment of convertible note | $ 73,000 | ||||
Convertible note outstanding | $ 282,000 | ||||
Debt interest percentage | 12.00% | ||||
Debt maturity date | Apr. 29, 2020 | ||||
Convertible Note One [Member] | Minimum [Member] | |||||
Debt conversion price percentage | 39.00% | ||||
Convertible Note One [Member] | Maximum [Member] | |||||
Debt conversion price percentage | 40.00% | ||||
Convertible Note Two [Member] | |||||
Convertible notes payable issued | |||||
Original issue discount | $ 225,000 | ||||
Convertible note outstanding | 282,000 | ||||
Debt discount | 355,000 | ||||
Derivative liabilities | 326,800 | ||||
Loan costs | 54,990 | ||||
Loan fee | 224,660 | ||||
Amortization of debt discount | $ 185,330 | ||||
One Convertible Notes Payable [Member] | Non-Returnable Shares [Member] | |||||
Number of shares issued for commitment fee | 141,000 | ||||
Non-returnable fees recorded as a loan cost | $ 54,990 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Oct. 31, 2019 | |
Derivative liabilities | $ 400,000 | ||
Decrease in fair value of derivatives | $ 114,000 | 19,491 | |
Gain on Extiguishment Debt | 286,000 | ||
Derivative liabilities conversion features | 0 | 400,139 | $ 565,195 |
Note [Member] | |||
Derivative liabilities conversion features | $ 101,000 | $ 565,195 |
Derivative Financial Instrume_4
Derivative Financial Instruments (Details Narrative) (10-K) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2019 | Oct. 31, 2019 | |
Derivative liabilities conversion features | $ 0 | $ 400,139 | $ 565,195 | |
Decrease in fair value of derivatives | 114,000 | 19,491 | ||
Extinguishment of derivative liabilities | 145,565 | |||
Note [Member] | ||||
Derivative liabilities conversion features | $ 101,000 | $ 565,195 | ||
Minimum [Member] | ||||
Price per share discount percent | 39.00% | |||
Maximum [Member] | ||||
Price per share discount percent | 40.00% |
Derivative Financial Instrume_5
Derivative Financial Instruments - Schedule of Fair Value Assumption of Derivative Instruments (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Oct. 31, 2018 | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Oct. 31, 2019USD ($) | |
Fair Value: Conversion feature | $ 0 | $ 400,139 | $ 565,195 | |
Risk Free Interest Rate [Member] | ||||
Conversion feature | 0.17 | 1.77 | 1.75 | |
Expected Volatility [Member] | ||||
Conversion feature | 182 | 222 | 223 | |
Expected Life [Member] | ||||
Conversion feature: Expected life (in years) | 1 year | 1 year | ||
Expected Life [Member] | Minimum [Member] | ||||
Conversion feature: Expected life (in years) | 3 months | |||
Expected Life [Member] | Maximum [Member] | ||||
Conversion feature: Expected life (in years) | 12 months | |||
Expected Dividend Yield [Member] | ||||
Conversion feature | 0 | 0 | 0 |
Derivative Financial Instrume_6
Derivative Financial Instruments - Schedule of Fair Value Assumption of Derivative Instruments (Details) (10-K) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2018 | Dec. 31, 2019USD ($) | Sep. 30, 2020USD ($) | Oct. 31, 2019USD ($) | |
Fair Value: Conversion feature | $ 400,139 | $ 0 | $ 565,195 | |
Risk Free Interest Rate [Member] | ||||
Conversion feature | 1.77 | 0.17 | 1.75 | |
Expected Volatility [Member] | ||||
Conversion feature | 222 | 182 | 223 | |
Expected Life [Member] | ||||
Conversion feature: Expected life (in years) | 1 year | 1 year | ||
Expected Dividend Yield [Member] | ||||
Conversion feature | 0 | 0 | 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) (10-K) - USD ($) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Dec. 31, 2019 | |
Income tax expenses | ||
Increase in valuation allowance | 500,000 | 1,500,000 |
Federal, net operating loss forwards | 1,600,000 | 4,300,000 |
State, net operating loss forwards | 1,100,000 | 3,100,000 |
Unrecognized tax benefits | ||
Foreign Tax Authority [Member] | ||
Federal carryforwards, description | Expire on various dates through 2039. | |
State and Local Jurisdiction [Member] | ||
Federal carryforwards, description | Expire through 2036. |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate (Details) (10-K) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal tax at statutory rate | 21.00% | 21.00% |
State tax, net of federal benefit | 7.00% | 7.00% |
Change in valuation allowance | (28.00%) | (28.00%) |
Effective income tax rate | 0.00% | 0.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) (10-K) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Stock-based compensation | $ 1,039,000 | $ 160,000 |
Operating lease liability | 94,000 | |
Derivative expenses | 67,000 | |
Net operating loss carryforwards | 1,132,000 | 425,000 |
Gross deferred tax assets | 2,332,000 | 585,000 |
Less: valuation allowance | (2,103,000) | (540,000) |
Total deferred tax assets | 229,000 | 45,000 |
Depreciation | 90,000 | 45,000 |
Derivative gain | 46,000 | |
Operating lease right-of-use asset | 93,000 | |
Total deferred tax liabilities | 229,000 | 45,000 |
Net deferred tax asset (liability) |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Apr. 14, 2020 | Apr. 14, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 |
Authorized prferred stock | 25,000,000 | 25,000,000 | 25,000,000 | 25,000,000 | ||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Number of shares issued for services | 22,000 | 467,000 | 971,000 | 1,856,000 | 194,030 | 2,424,121 | ||
Proceeds from issuance of stock | $ 125,000 | $ 1,110,000 | $ 1,300,018 | $ 2,090,375 | ||||
Fair value of common stock shares issued | $ 20,000 | $ 486,000 | 126,000 | $ 1,112,000 | $ 1,300,018 | $ 2,090,375 | ||
Number of common stock value convertible note | 211,000 | 211,000 | ||||||
Beneficial conversion feature of issued convertible notes | $ 1,277,000 | 1,568,000 | ||||||
Secure Financing [Member] | ||||||||
Number of common stock shares secure financing | 1,127,522 | |||||||
Number of common stock value secure financing | $ 105,000 | |||||||
Beneficial conversion feature of issued convertible notes | $ 1,569,000 | |||||||
Two Holders [Member] | ||||||||
Number of common stock shares convertible note | 3,955,747 | |||||||
Number of common stock value convertible note | $ 140,000 | |||||||
Private Placement [Member] | ||||||||
Number of common stock shares issued | 407,408 | 12,011,269 | ||||||
Shares issued, price per share | $ 0.26 | $ 0.26 | ||||||
Proceeds from issuance of stock | $ 125,000 | $ 2,926,375 | ||||||
Fair value of common stock shares issued | $ 211,000 | $ 2,090,375 | ||||||
Series A Preferred Stock [Member] | ||||||||
Authorized prferred stock | 2,500,000 | 2,500,000 | ||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||
Voting Percentage | 51.00% | 51.00% | ||||||
Preferred stock Voting Rights | The holders of the Series A Preferred Stock, in the aggregate, have voting power equal to 51% of the total votes of all of the outstanding common and preferred stock of the Company entitled to vote. Accordingly, each share of Series A Preferred Stock shall have voting rights equal to one and one-tenth (1.1) times a fraction, the numerator of which is the shares of outstanding common stock and undesignated preferred stock of the Company and the denominator of which is number of shares of outstanding Series A Preferred Stock. | |||||||
Series A Preferred Stock [Member] | Chief Executive Officer [Member] | ||||||||
Number of common stock shares issued | 2,500,000 | |||||||
Series A Preferred Stock [Member] | Private Placement [Member] | Chief Executive Officer [Member] | ||||||||
Number of shares issued for services | 2,500,000 | |||||||
Fair value of shares issued for services | $ 465,000 |
Stockholders' Equity (Details_2
Stockholders' Equity (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
Shares authorized | 125,000,000 | |||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | ||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | 25,000,000 | 25,000,000 | ||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Proceeds from issuance of stock | $ 125,000 | $ 1,110,000 | $ 1,300,018 | $ 2,090,375 | ||
Number of common stock shares issued, value | $ 20,000 | $ 486,000 | $ 126,000 | $ 1,112,000 | 1,300,018 | $ 2,090,375 |
Common stock shares to be issued | 5,068,519 | |||||
Through December 31, 2019 [Member] | ||||||
Number of common stock shares issued | 6,942,750 | |||||
Private Placement [Member] | ||||||
Shares issued, price per share | $ 0.26 | $ 0.26 | ||||
Proceeds from issuance of stock | $ 125,000 | $ 2,926,375 | ||||
Number of common stock shares issued, value | $ 211,000 | 2,090,375 | ||||
Number of shares subscribed | $ 306,000 | $ 530,000 | ||||
Number of common stock shares issued | 407,408 | 12,011,269 | ||||
Private Placement [Member] | Minimum [Member] | ||||||
Shares issued, price per share | $ 0.10 | |||||
Private Placement [Member] | Maximum [Member] | ||||||
Shares issued, price per share | $ 0.50 |
Stock Based Compensation (Detai
Stock Based Compensation (Details Narrative) - USD ($) | Apr. 14, 2020 | May 20, 2019 | May 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 |
Stock-based compensation | $ 1,542,000 | ||||||||
Fair value of preferred shares issued to officer | (465,000) | ||||||||
Fair value of common stock shares issued | $ 20,000 | $ 486,000 | 126,000 | $ 1,112,000 | $ 1,300,018 | $ 2,090,375 | |||
Fair value of common shares issued to employees and officer | $ 106,000 | ||||||||
Number of restricted common stock issued | 8,000,000 | ||||||||
Number of restricted common stock vested | 1,875,000 | 2,250,000 | |||||||
Number of options issued | 900,000 | 3,290,000 | |||||||
Options exercise price | $ 0.11 | $ 0.23 | |||||||
Accretion Expense [Member] | |||||||||
Stock-based compensation | $ 929,000 | ||||||||
Restricted Stock [Member] | |||||||||
Number of restricted common stock issued | 8,000,000 | ||||||||
Number of restricted common stock vested | 1,000,000 | 4,125,000 | 2,250,000 | ||||||
Restricted common stock vested, description | 1,000,000 shares vested immediately, and the balance of 7,000,000 shares will vest 625,000 shares per quarter over 2.8 years. | ||||||||
Restricted common stock vesting term | 2 years 9 months 18 days | 1 year 4 months 24 days | 2 years 3 months 19 days | ||||||
Fair value of restricted common stock | $ 4,000,000 | ||||||||
Share-based expense | $ 929,000 | $ 2,317,868 | |||||||
Unvested compensation | 753,000 | $ 753,000 | |||||||
Number of options vested immediately | 4,125,000 | ||||||||
Restricted Stock [Member] | Per Quarter [Member] | |||||||||
Number of restricted common stock vested | 625,000 | ||||||||
Stock Options [Member] | |||||||||
Stock-based compensation | $ 250,000 | ||||||||
Share-based expense | $ 711,404 | ||||||||
Unvested compensation | $ 346,000 | $ 346,000 | |||||||
Number of options issued | 900,000 | 3,290,000 | |||||||
Number of options vested immediately | 600,000 | 1,800,000 | |||||||
Number of options expected to vest | 300,000 | 300,000 | |||||||
Vesting period | 24 months | ||||||||
Options exercise price | $ 0.10 | $ 0.23 | |||||||
Fair value of options | $ 85,000 | $ 1,179,000 | |||||||
Stock price | $ 0.14 | $ 0.14 | |||||||
Expected term | 10 years | ||||||||
Volatility | 236.00% | ||||||||
Dividend rate | 0.00% | 0.00% | |||||||
Risk-free interest rate | 17.00% | 1.77% | |||||||
Option intrinsic value | $ 322,749 | ||||||||
Stock Options [Member] | Minimum [Member] | |||||||||
Options exercise price | $ 0.10 | ||||||||
Stock price | $ 0.23 | ||||||||
Expected term | 5 years | ||||||||
Volatility | 213.00% | ||||||||
Stock Options [Member] | Maximum [Member] | |||||||||
Options exercise price | $ 0.14 | ||||||||
Stock price | $ 0.38 | ||||||||
Expected term | 7 years | ||||||||
Volatility | 218.00% | ||||||||
Common Stock [Member] | |||||||||
Number of common stock shares issued | 2,642,750 | 407,408 | 2,642,750 | 6,500,090 | 6,330,750 | ||||
Fair value of common stock shares issued | $ 3,000 | $ 1,000 | $ 3,000 | $ 6,500 | $ 6,331 | ||||
Employees and Officers [Member] | Common Stock [Member] | |||||||||
Number of common stock shares issued | 451,198 | ||||||||
Fair value of common shares issued to employees and officer | $ (51,000) | ||||||||
Consultants [Member] | |||||||||
Number of common stock shares issued | 750,000 | ||||||||
Fair value of common stock shares issued | $ 42,000 | ||||||||
Series A Preferred Stock [Member] | Chief Executive Officer [Member] | |||||||||
Number of common stock shares issued | 2,500,000 | ||||||||
Fair value of preferred shares issued to officer | $ 465,000 |
Stock Based Compensation Paym_3
Stock Based Compensation Payments (Details Narrative) (10-K) - USD ($) | May 20, 2019 | May 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 |
Number of restricted common stock issued | 8,000,000 | |||||||
Number of restricted common stock vested | 1,875,000 | 2,250,000 | ||||||
Number of shares issued for services | 22,000 | 467,000 | 971,000 | 1,856,000 | 194,030 | 2,424,121 | ||
Number of options issued | 900,000 | 3,290,000 | ||||||
Options exercise price | $ 0.11 | $ 0.23 | ||||||
Options term | 6 years | 6 years | ||||||
Warrants [Member] | ||||||||
Stock price | $ 0.05 | |||||||
Expected term | 4 years | |||||||
Volatility | 170.00% | |||||||
Dividend rate | 0.00% | |||||||
Risk-free interest rate | 1.76% | |||||||
Number of warrants issued | 3,000,000 | |||||||
Warrants exercise price | $ 0.30 | |||||||
Warrants expiration period | Expire in 2022 | |||||||
Fair value of warrants | $ 377,000 | |||||||
Cashless exercise warrants | 3,000,000 | |||||||
Consultant [Member] | ||||||||
Number of stock issued for services, value | $ 212,505 | |||||||
Number of shares issued for services | 106,253 | |||||||
Restricted Stock [Member] | ||||||||
Number of restricted common stock issued | 8,000,000 | |||||||
Number of restricted common stock vested | 1,000,000 | 4,125,000 | 2,250,000 | |||||
Restricted common stock vested, description | 1,000,000 shares vested immediately, and the balance of 7,000,000 shares will vest 625,000 shares per quarter over 2.8 years. | |||||||
Restricted common stock vesting term | 2 years 9 months 18 days | 1 year 4 months 24 days | 2 years 3 months 19 days | |||||
Fair value of restricted common stock | $ 4,000,000 | |||||||
Share-based expense | $ 929,000 | $ 2,317,868 | ||||||
Unvested compensation | 1,628,132 | |||||||
Number of options vested | 4,125,000 | |||||||
Restricted Stock [Member] | Per Quarter [Member] | ||||||||
Number of restricted common stock vested | 625,000 | |||||||
Stock Options [Member] | ||||||||
Share-based expense | 711,404 | |||||||
Unvested compensation | $ 468,000 | |||||||
Number of options issued | 900,000 | 3,290,000 | ||||||
Number of options vested | 600,000 | 1,800,000 | ||||||
Number of options non vested | 1,490,000 | |||||||
Options vesting term | 4 years | |||||||
Options exercise price | $ 0.10 | $ 0.23 | ||||||
Options term | 10 years | |||||||
Fair value of options | $ 85,000 | $ 1,179,000 | ||||||
Stock price | $ 0.14 | $ 0.14 | ||||||
Expected term | 10 years | |||||||
Volatility | 236.00% | |||||||
Dividend rate | 0.00% | 0.00% | ||||||
Risk-free interest rate | 17.00% | 1.77% | ||||||
Options outstanding, aggregate intrinsic | $ 322,749 | |||||||
Stock Options [Member] | Minimum [Member] | ||||||||
Options exercise price | $ 0.10 | |||||||
Stock price | $ 0.23 | |||||||
Expected term | 5 years | |||||||
Volatility | 213.00% | |||||||
Stock Options [Member] | Maximum [Member] | ||||||||
Options exercise price | $ 0.14 | |||||||
Stock price | $ 0.38 | |||||||
Expected term | 7 years | |||||||
Volatility | 218.00% |
Stock Based Compensation - Summ
Stock Based Compensation - Summary of Restricted Common Stock Activity (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Non-vested shares, Beginning balance | 5,750,000 | |
Non-vested shares, Granted | 8,000,000 | |
Non-vested shares, Vested | (1,875,000) | (2,250,000) |
Non-vested shares, Forfeited | ||
Non-vested shares, Ending balance | 3,875,000 | 5,750,000 |
Fair value of non-vested shares, Beginning balance | $ 1,682,000 | |
Fair value of non-vested shares, Granted | 4,000,000 | |
Fair value of non-vested shares, Vested | (929,000) | (2,317,868) |
Fair value of non-vested shares, Forfeited | ||
Fair value of non-vested shares, Ending balance | $ 753,000 | $ 1,682,000 |
Stock Based Compensation Paym_4
Stock Based Compensation Payments - Summary of Restricted Common Stock Activity (Details) (10-K) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Non-vested shares, Beginning balance | 5,750,000 | |
Non-vested shares, Granted | 8,000,000 | |
Non-vested shares, Vested | (1,875,000) | (2,250,000) |
Non-vested shares, Forfeited | ||
Non-vested shares, Ending balance | 3,875,000 | 5,750,000 |
Fair value of non-vested shares, Beginning balance | $ 1,682,000 | |
Fair value of non-vested shares, Granted | 4,000,000 | |
Fair value of non-vested shares, Vested | (929,000) | (2,317,868) |
Fair value of non-vested shares, Forfeited | ||
Fair value of non-vested shares, Ending balance | $ 753,000 | $ 1,682,000 |
Stock Based Compensation - Sche
Stock Based Compensation - Schedule of Stock Option Activity (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |||
Number of Options Outstanding, Beginning | 3,230,000 | ||
Number of Options Outstanding, Granted | 900,000 | 3,290,000 | |
Number of Options Outstanding, Exercised | |||
Number of Options Outstanding, Expired | |||
Number of Options Outstanding, Ending | 4,130,000 | 3,230,000 | |
Number of Options Exercisable | 2,732,261 | 1,800,000 | |
Options Outstanding, Weighted average exercise price, Beginning | $ 0.10 | ||
Options Outstanding, Granted, Weighted average exercise price | 0.11 | $ 0.23 | |
Options Outstanding, Exercised, Weighted average exercise price | |||
Options Outstanding, Expired, Weighted average exercise price | |||
Options Outstanding, Weighted average exercise price, Ending | 0.11 | 0.10 | |
Options Exercisable, Weighted average exercise price | $ 0.10 | $ 0.23 | |
Options Outstanding, Contractual Life, Beginning | 6 years | 6 years | |
Options Outstanding, Granted, Contractual Life | 10 years | 0 years | 6 years |
Options Outstanding, Exercised, Contractual Life | 0 years | 0 years | 0 years |
Options Outstanding, Expired, Contractual Life | 0 years | 0 years | 0 years |
Options Outstanding, Contractual Life, Ending | 6 years 6 months | ||
Options Exercisable, Contractual Life | 5 years 6 months | 5 years 9 months 18 days |
Stock Based Compensation Paym_5
Stock Based Compensation Payments - Schedule of Stock Option Activity (Details) (10-K) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |||
Number of Options Outstanding and Exercisable | |||
Number of Options Outstanding, Granted | 900,000 | 3,290,000 | |
Number of Options Outstanding, Exercised | |||
Number of Options Outstanding, Expired | |||
Number of Options Outstanding and Exercisable | |||
Number of Options Outstanding, Ending | 4,130,000 | 3,230,000 | |
Number of Options Exercisable | 2,732,261 | 1,800,000 | |
Options Outstanding and Exercisable, Weighted average exercise price | |||
Options Outstanding, Granted, Weighted average exercise price | $ 0.11 | 0.23 | |
Options Outstanding, Exercised, Weighted average exercise price | |||
Options Outstanding, Expired, Weighted average exercise price | |||
Options Outstanding and Exercisable, Weighted average exercise price | |||
Options Outstanding, Weighted average exercise price, Ending | 0.11 | 0.10 | |
Options Exercisable, Weighted average exercise price | $ 0.10 | $ 0.23 | |
Options Outstanding and Exercisable, Contractual Life | 0 years | 0 years | |
Options Outstanding, Granted, Contractual Life | 10 years | 0 years | 6 years |
Options Outstanding, Exercised, Contractual Life | 0 years | 0 years | 0 years |
Options Outstanding, Expired, Contractual Life | 0 years | 0 years | 0 years |
Options Outstanding and Exercisable, Contractual Life | 0 years | ||
Options Outstanding, Contractual Life, Ending | 6 years | 6 years | |
Options Exercisable, Contractual Life | 5 years 6 months | 5 years 9 months 18 days |
Stock Based Compensation Paym_6
Stock Based Compensation Payments - Schedule of Warrant Activity (Details) (10-K) - $ / shares | 9 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Number of Warrants Outstanding and Exercisable, Beginning Balance | 3,000,000 | |
Number of Warrants Outstanding and Exercisable, Granted | 3,000,000 | |
Number of Warrants Outstanding and Exercisable, Exercised | (3,000,000) | |
Number of Warrants Outstanding and Exercisable, Expired | ||
Number of Warrants Outstanding and Exercisable, Ending Balance | 3,000,000 | |
Warrants Weighted Average Exercise Price, Beginning Balance | $ 0.30 | |
Warrants Weighted Average Exercise Price, Granted | 0.30 | |
Warrants Weighted Average Exercise Price, Exercised | 0.30 | |
Warrants Weighted Average Exercise Price, Expired | ||
Warrants Weighted Average Exercise Price, Ending Balance | $ 0.30 | |
Warrants Contractual Life in Years, Beginning Balance | 0 years | 4 years |
Warrants Contractual Life in Years, Granted | 4 years | 0 years |
Warrants Contractual Life in Years, Exercised | 0 years | 0 years |
Warrants Contractual Life in Years, Expired | 0 years | 0 years |
Warrants Contractual Life in Years, Ending Balance | 4 years | 0 years |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Several Investors [Member] | |||
Payments to revenue percentage | 50.00% | 50.00% | |
Proceeds from investors payment | $ 250,000 | ||
Number of common stock shares issued | 280,000 | ||
Stock issued to related investors | $ 28,000 | ||
Patented Technology Developed [Member] | |||
Royalty percentage | 25.00% | 25.00% | 25.00% |
Royalty | $ 35,000 | $ 35,000 | |
Common stock shares available for future issuance | 8,000,000 | 8,000,000 | 8,000,000 |
Patented Technology Developed [Member] | Individual [Member] | |||
Royalty | $ 343,300 | ||
Payment of royalty | $ 62,000 | $ 296,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrtive) (10-K) - Patented Technology Developed [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Royalty percentage | 25.00% | 25.00% |
Royalty | $ 35,000 | $ 35,000 |
Common stock shares available for future issuance | 8,000,000 | 8,000,000 |
Individual [Member] | ||
Royalty | $ 343,300 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Dec. 16, 2020 | Dec. 09, 2020 | Nov. 20, 2020 | Nov. 16, 2020 | Nov. 15, 2020 | Apr. 14, 2020 | Nov. 30, 2020 | Oct. 31, 2020 | Dec. 10, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 |
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | |||||||||||
Number of shares issued for services | 22,000 | 467,000 | 971,000 | 1,856,000 | 194,030 | 2,424,121 | |||||||||
Original issue discount | $ 590,000 | $ 590,000 | $ 225,000 | ||||||||||||
Loss on debt extinguishment | $ (1,081,000) | $ (795,000) | $ 41,000 | ||||||||||||
Convertible Notes Payable Two [Member] | |||||||||||||||
Fixed conversion price | $ 0.05 | $ 0.05 | |||||||||||||
Debt maturity date | Mar. 31, 2021 | ||||||||||||||
Debt interest percentage | 10.00% | 10.00% | |||||||||||||
Common Stock [Member] | |||||||||||||||
Number of common stock shares issued | 2,642,750 | 407,408 | 2,642,750 | 6,500,090 | 6,330,750 | ||||||||||
Number of shares issued for services | 1,000 | 520 | 213 | ||||||||||||
Fair value of shares issued for services | $ (500,117) | $ 180,000 | $ 750,000 | $ 212,505 | $ 520,150 | $ 212,505 | |||||||||
Series A Preferred Stock [Member] | |||||||||||||||
Preferred stock voting rights | The holders of the Series A Preferred Stock, in the aggregate, have voting power equal to 51% of the total votes of all of the outstanding common and preferred stock of the Company entitled to vote. Accordingly, each share of Series A Preferred Stock shall have voting rights equal to one and one-tenth (1.1) times a fraction, the numerator of which is the shares of outstanding common stock and undesignated preferred stock of the Company and the denominator of which is number of shares of outstanding Series A Preferred Stock. | ||||||||||||||
Consultant [Member] | |||||||||||||||
Number of shares issued for services | 106,253 | ||||||||||||||
Fair value of shares issued for services | $ 212,505 | ||||||||||||||
Subsequent Event [Member] | |||||||||||||||
Proceeds from debt | $ 1,643,000 | ||||||||||||||
Subsequent Event [Member] | Trillium Partners LP [Member] | |||||||||||||||
Fixed conversion price | $ 0.015 | $ 0.015 | |||||||||||||
Debt maturity date | Jun. 30, 2021 | Jun. 30, 2021 | |||||||||||||
Debt interest percentage | 10.00% | 10.00% | |||||||||||||
Convertible notes | $ 23,000 | $ 25,000 | |||||||||||||
Original issue discount | 3,000 | $ 3,000 | |||||||||||||
Debt discount | $ 20,000,000 | ||||||||||||||
Subsequent Event [Member] | Trillium Partners LP [Member] | Convertible Notes Payable Three [Member] | |||||||||||||||
Fixed conversion price | $ 0.015 | ||||||||||||||
Debt maturity date | Jun. 30, 2021 | ||||||||||||||
Deduction in debt conversion amount | $ 1,000 | ||||||||||||||
Debt default amount | $ 160,000 | ||||||||||||||
Subsequent Event [Member] | Trillium Partners LP [Member] | Convertible Notes Payable Five [Member] | |||||||||||||||
Fixed conversion price | $ 0.015 | ||||||||||||||
Debt maturity date | Jun. 30, 2021 | ||||||||||||||
Deduction in debt conversion amount | $ 1,000 | ||||||||||||||
Debt default amount | $ 18,000 | ||||||||||||||
Subsequent Event [Member] | Trillium Partners LP [Member] | Convertible Notes Payable Seven [Member] | |||||||||||||||
Fixed conversion price | $ 0.015 | ||||||||||||||
Debt maturity date | Jun. 30, 2021 | ||||||||||||||
Deduction in debt conversion amount | $ 1,000 | ||||||||||||||
Debt default amount | 154,000 | ||||||||||||||
Debt change in principal amount | 315,000 | ||||||||||||||
Loss on debt extinguishment | 901,000 | ||||||||||||||
Debt discount | $ 315,000 | ||||||||||||||
Subsequent Event [Member] | Trillium Partners LP [Member] | Convertible Notes Payable Nine [Member] | |||||||||||||||
Fixed conversion price | $ 0.015 | ||||||||||||||
Debt maturity date | Jun. 30, 2021 | ||||||||||||||
Deduction in debt conversion amount | $ 1,000 | ||||||||||||||
Debt default amount | $ 71,000 | ||||||||||||||
Subsequent Event [Member] | Trillium Partners LP [Member] | Convertible Notes Payable Thirteen [Member] | |||||||||||||||
Fixed conversion price | $ 0.015 | ||||||||||||||
Debt maturity date | Jun. 30, 2021 | ||||||||||||||
Deduction in debt conversion amount | $ 1,000 | ||||||||||||||
Debt default amount | $ 43,000 | ||||||||||||||
Subsequent Event [Member] | Livingston Asset Management LLC [Member] | Convertible Notes Payable One [Member] | |||||||||||||||
Fixed conversion price | $ 0.015 | ||||||||||||||
Debt maturity date | Jun. 30, 2021 | ||||||||||||||
Deduction in debt conversion amount | $ 1 | ||||||||||||||
Debt default amount | $ 71,000 | ||||||||||||||
Subsequent Event [Member] | Alpha Capital Anstalt [Member] | Convertible Notes Payable Two [Member] | |||||||||||||||
Fixed conversion price | $ 0.015 | ||||||||||||||
Debt maturity date | Jun. 30, 2021 | ||||||||||||||
Deduction in debt conversion amount | $ 1,000 | ||||||||||||||
Debt default amount | $ 160,000 | ||||||||||||||
Subsequent Event [Member] | Alpha Capital Anstalt [Member] | Convertible Notes Payable Six [Member] | |||||||||||||||
Fixed conversion price | $ 0.015 | ||||||||||||||
Debt maturity date | Jun. 30, 2021 | ||||||||||||||
Deduction in debt conversion amount | $ 1,000 | ||||||||||||||
Debt default amount | $ 9,000 | ||||||||||||||
Subsequent Event [Member] | Alpha Capital Anstalt [Member] | Convertible Notes Payable Eight [Member] | |||||||||||||||
Fixed conversion price | $ 0.015 | ||||||||||||||
Debt maturity date | Jun. 30, 2021 | ||||||||||||||
Deduction in debt conversion amount | $ 1,000 | ||||||||||||||
Debt default amount | $ 35,000 | ||||||||||||||
Subsequent Event [Member] | Common Stock [Member] | Four Notes Payable [Member] | |||||||||||||||
Proceeds from debt | $ 85,000 | ||||||||||||||
Cash received | $ 77 | ||||||||||||||
Fixed conversion price | $ 0.015 | ||||||||||||||
Debt maturity date | Apr. 30, 2021 | ||||||||||||||
Debt interest percentage | 10.00% | ||||||||||||||
Debt penalty description | default penalties of 150% of accrued interest and | ||||||||||||||
Deduction in debt conversion amount | $ 6,000 | ||||||||||||||
Debt conversion shares issued | 155,000 | ||||||||||||||
Shares issued, price per share | $ 0.0365 | ||||||||||||||
Subsequent Event [Member] | Board Of Directors [Member] | Minimum [Member] | |||||||||||||||
Common stock, shares authorized | 100,000,000 | ||||||||||||||
Subsequent Event [Member] | Board Of Directors [Member] | Maximum [Member] | |||||||||||||||
Common stock, shares authorized | 500,000,000 | ||||||||||||||
Subsequent Event [Member] | Phil Sands [Member] | |||||||||||||||
Common stock, shares authorized | 500,000,000 | ||||||||||||||
Subsequent Event [Member] | Phil Sands [Member] | Series A Preferred Stock [Member] | |||||||||||||||
Number of common stock shares issued | 2,500,000 | ||||||||||||||
Subsequent Event [Member] | Consultant [Member] | Common Stock [Member] | |||||||||||||||
Number of shares issued for services | 2,509,217 | ||||||||||||||
Fair value of shares issued for services | $ 43,000 | ||||||||||||||
Accrued interest | $ 9,000 | ||||||||||||||
Subsequent Event [Member] | Individual [Member] | Convertible Notes Payable Four [Member] | |||||||||||||||
Fixed conversion price | $ 0.015 | ||||||||||||||
Debt maturity date | Jun. 30, 2021 | ||||||||||||||
Deduction in debt conversion amount | $ 1,000 | ||||||||||||||
Debt default amount | $ 36,000 | ||||||||||||||
Subsequent Event [Member] | Individual [Member] | Convertible Notes Payable Eleven [Member] | |||||||||||||||
Fixed conversion price | $ 0.015 | ||||||||||||||
Debt maturity date | Jun. 30, 2021 | ||||||||||||||
Deduction in debt conversion amount | $ 1,000 | ||||||||||||||
Debt default amount | $ 26,000 | ||||||||||||||
Subsequent Event [Member] | Individual [Member] | Convertible Notes Payable Twelve [Member] | |||||||||||||||
Fixed conversion price | $ 0.015 | ||||||||||||||
Debt maturity date | Jun. 30, 2021 | ||||||||||||||
Deduction in debt conversion amount | $ 1,000 | ||||||||||||||
Debt default amount | $ 26,000 | ||||||||||||||
Subsequent Event [Member] | Compensation Agreement [Member] | Mr. Phil Sands [Member] | |||||||||||||||
Monthly compensation | $ 8,000 | ||||||||||||||
Subsequent Event [Member] | Control Block Transfer Agreement [Member] | Series A Super Voting Preferred Stock [Member] | |||||||||||||||
Number of common stock shares issued | 2,500,000 | ||||||||||||||
Preferred stock voting rights | Mr. Rice agreed to transfer 2,500,000 shares of the Company's Series A Super Voting Preferred Stock to Mr. Sands, representing a transfer of majority voting control over the Company because the holder of such 2,500,000 shares of our Series A Super Voting Preferred Stock automatically carries a vote equal to 51% on all matters submitted to a vote of the holders of our Common Stock and Preferred Stock. | ||||||||||||||
Subsequent Event [Member] | Share Cancellation Agreement [Member] | Eric Rice [Member] | |||||||||||||||
Number of shares cancelled | 17,030,032 | ||||||||||||||
Ownership shares of common stock | 1,000,000 | ||||||||||||||
Treasury shares | 17,030,032 | ||||||||||||||
Subsequent Event [Member] | Share Cancellation Agreement [Member] | Eric Rice [Member] | Common Stock [Member] | |||||||||||||||
Number of common stock shares issued | 18,030,032 |
Subsequent Events (Details Na_2
Subsequent Events (Details Narrative) (10-K) | Dec. 19, 2019USD ($)ft² | Mar. 31, 2020USD ($)shares | Feb. 29, 2020USD ($) | Sep. 30, 2020USD ($)shares | Sep. 30, 2019shares | Sep. 30, 2020USD ($)shares | Sep. 30, 2019USD ($)shares | Dec. 31, 2018USD ($)shares | Dec. 31, 2019USD ($)shares | Mar. 30, 2020USD ($) |
Proceeds from promissory note | $ 378,000 | $ 100,000 | ||||||||
Aggregate total fixed rent | $ 478,000 | |||||||||
Operating lease right-of-use asset, net | 432,000 | $ 383,000 | 383,000 | $ 332,980 | ||||||
Security deposit | $ 17,000 | $ 17,000 | ||||||||
Number of shares issued for services | shares | 22,000 | 467,000 | 971,000 | 1,856,000 | 194,030 | 2,424,121 | ||||
Minimum [Member] | ||||||||||
Aggregate total fixed rent | 90,000 | |||||||||
Maximum [Member] | ||||||||||
Aggregate total fixed rent | 101,000 | |||||||||
Private Placement [Member] | ||||||||||
Common stock, subscriptions amount | $ 306,000 | $ 530,000 | ||||||||
Non-cancelable Real Property Lease Agreement [Member] | ||||||||||
Area for land | ft² | 3,096 | |||||||||
Aggregate total fixed rent | $ 478,000 | |||||||||
Operating lease right-of-use asset, net | 430,000 | |||||||||
Security deposit | 16,883 | |||||||||
Non-cancelable Real Property Lease Agreement [Member] | Minimum [Member] | ||||||||||
Aggregate total fixed rent | 7,500 | |||||||||
Non-cancelable Real Property Lease Agreement [Member] | Maximum [Member] | ||||||||||
Aggregate total fixed rent | $ 8,441 | |||||||||
One Convertible Promissory Note [Member] | ||||||||||
Debt interest percentage | 22.00% | 22.00% | ||||||||
Debt maturity date | Feb. 28, 2021 | |||||||||
Subsequent Event [Member] | ||||||||||
Common stock, subscriptions amount | $ 30,000 | |||||||||
Subsequent Event [Member] | Employees [Member] | ||||||||||
Number of shares issued for services | shares | 241,000 | |||||||||
Number of stock issued for services, value | $ 28,000 | |||||||||
Subsequent Event [Member] | Private Placement [Member] | ||||||||||
Common stock, subscriptions amount | 30,000 | |||||||||
Subsequent Event [Member] | One Convertible Promissory Note [Member] | ||||||||||
Proceeds from promissory note | $ 153,000 | |||||||||
Debt interest percentage | 22.00% | |||||||||
Debt maturity date | Aug. 31, 2020 | |||||||||
Convertible discount rate | 39.00% |