Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 25, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | QUANTA INC | ||
Entity Central Index Key | 0001691430 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 625,911 | ||
Entity Common Stock, Shares Outstanding | 104,914,339 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 6,270 | $ 433,143 |
Accounts receivable | 685 | 28,260 |
Deferred charges, related party | 134,704 | |
Inventories, net of reserve | 19,220 | 122,519 |
Prepaid expenses | 7,500 | |
Total current assets | 160,879 | 591,422 |
Equipment, net | 200,523 | 313,478 |
Operating lease right-of-use asset, net | 362,227 | 332,980 |
Security deposits | 16,883 | 33,652 |
Total assets | 740,512 | 1,271,532 |
Current liabilities: | ||
Accounts payable and accrued expenses | 673,494 | 73,598 |
Notes payable (net of deferred finance charge of $74,817 at December 31, 2020) | 482,724 | 55,850 |
Deferred revenue, license agreement | 34,818 | 32,742 |
Operating lease liabilities | 100,901 | 85,662 |
Convertible note payable (net of discounts of $539,282 and $224,660, respectively) | 1,074,814 | 57,340 |
Lease settlement obligations | 235,759 | |
Derivative liabilities | 400,139 | |
Total current liabilities | 2,602,510 | 705,331 |
Long term liabilities | ||
Deferred revenue, licenses agreement, long-term | 35,470 | |
Notes payable, long term (net of deferred finance charge of $32,556 at December 31, 2020) | 451,368 | |
Operating lease liabilities, long-term | 294,880 | 251,791 |
Total liabilities | 3,348,758 | 992,592 |
Stockholders' equity (deficit): | ||
Preferred stock, $0.001 par value; 25,000,000 shares authorized; | ||
Common stock, $0.001 par value; 500,000,000 shares authorized; 46,756,970 and 49,087,255 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively | 46,757 | 49,087 |
Shares to be issued (4,875,000 and 7,318,519 shares to be issued as of December 31, 2020 and December 31, 2019, respectively) | 3,641,868 | 2,847,868 |
Additional paid-in capital | 10,102,805 | 5,619,733 |
Accumulated deficit | (16,402,176) | (8,237,748) |
Total stockholders'(deficit) equity | (2,608,246) | 278,940 |
Total liabilities and stockholders' (deficit) equity | 740,512 | 1,271,532 |
Series A Preferred Stock [Member] | ||
Stockholders' equity (deficit): | ||
Preferred stock, $0.001 par value; 25,000,000 shares authorized; | $ 2,500 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred finance charges, current | $ 74,817 | |
Deferred finance charges, noncurrent | 32,556 | |
Convertible note payable, discount | $ 539,282 | $ 224,660 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 46,756,970 | 49,087,255 |
Common stock, shares outstanding | 46,756,970 | 49,087,255 |
Shares to be issued, shares | 4,875,000 | 7,318,519 |
Series A Preferred Stock [Member] | ||
Preferred stock, shares issued | 2,500,000 | 0 |
Preferred stock, shares outstanding | 2,500,000 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total revenue | $ 1,158,115 | $ 1,268,988 |
Cost of goods sold | 281,270 | 303,720 |
Gross profit | 876,845 | 965,268 |
Operating expenses: | ||
Compensation and benefits | 1,281,750 | 1,302,391 |
Research and development (includes $420,000 and $343,300 to related party, respectively) | 452,443 | 351,670 |
Impairment of operating lease right of use asset | 255,093 | |
Selling, general, and administrative | 4,273,394 | 4,799,030 |
Total operating expenses | 6,262,680 | 6,453,091 |
Loss from operations | (5,385,835) | (5,487,823) |
Other income (expense): | ||
Interest expense | (512,907) | (226,202) |
Discount amortization | (755,538) | |
Extinguishment of derivative liabilities | 145,565 | |
Change in fair value of derivative liabilities | 101,226 | 19,491 |
Private placement costs | (381,084) | (238,395) |
Loss on extinguishment of debt | (1,230,290) | |
Other income and expense, net | (2,778,593) | (299,541) |
Net loss | $ (8,164,428) | $ (5,787,364) |
Net loss per share, basic and diluted | $ (0.14) | $ (0.14) |
Weighted average common shares outstanding - basic and diluted | 59,908,938 | 42,808,603 |
Sale of Products, Net [Member] | ||
Total revenue | $ 1,124,721 | $ 1,237,200 |
License Revenue [Member] | ||
Total revenue | $ 33,394 | $ 31,788 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Research and development , related party | $ 420,000 | $ 343,300 |
Consolidated Statements of Chan
Consolidated Statements of Changes in 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 Dec. 31, 2018 | $ 39,200 | $ 2,360,598 | $ 306,000 | $ (2,450,384) | $ 255,414 | |
Balance, shares at Dec. 31, 2018 | 39,200,090 | |||||
Issuance of shares previously subscribed | $ 612 | 305,388 | (306,000) | |||
Issuance of shares previously subscribed, shares | 612,000 | |||||
Shares issued for cash | $ 6,331 | 2,084,044 | 2,090,375 | |||
Shares issued for cash, shares | 6,330,750 | |||||
Cash received for shares to be issued | 530,000 | 530,000 | ||||
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 shares issued for services | 213 | 106,040 | 2,317,868 | 2,424,121 | ||
Fair value of shares issued for services, shares | $ 212,505 | |||||
Fair value of vested options | $ 711,404 | $ 711,404 | ||||
Fair value of shares issued for loan fees | $ 141 | 54,849 | 54,990 | |||
Fair value of shares issued for loan fees, 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 | |||||
Issuance of shares previously subscribed | $ 5,000 | 530,000 | (535,000) | |||
Issuance of shares previously subscribed, shares | 5,000,000 | |||||
Shares issued for cash | $ 407 | 74,593 | 50,000 | 125,000 | ||
Shares issued for cash, shares | 407,408 | |||||
Fair value of vested options | 290,132 | 290,132 | ||||
Fair value of shares issued for loan fees | $ 1,128 | 93,000 | 11,280 | 105,408 | ||
Fair value of shares issued for loan fees, shares | 1,127,522 | |||||
Fair value of preferred shares issued to officer | $ 2,500 | 462,500 | 465,000 | |||
Fair value of preferred shares issued to officer, shares | 2,500,000 | |||||
Fair value of shares issued to employees and officer | $ 1,201 | 130,000 | 1,267,720 | 1,398,921 | ||
Fair value of shares issued to employees and officer, shares | 1,201,198 | |||||
Shares issued for conversion of Convertible Notes | $ 6,885 | 329,294 | 336,179 | |||
Shares issued for conversion of Convertible Notes, shares | 6,885,019 | |||||
Beneficial conversion feature of issued convertible notes | 2,556,602 | 2,556,602 | ||||
Cancellation of shares | $ (16,951) | 16,951 | ||||
Cancellation of shares,shares | (16,951,432) | |||||
Net loss | (8,164,428) | (8,164,428) | ||||
Balance at Dec. 31, 2020 | $ 2,500 | $ 46,757 | $ 10,102,805 | $ 3,641,868 | $ (16,402,176) | $ (2,608,246) |
Balance, shares at Dec. 31, 2020 | 2,500,000 | 46,756,970 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ||
Net loss | $ (8,164,428) | $ (5,787,364) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 216,696 | 173,902 |
Fair value of shares issued to employees and officer | 1,398,921 | 2,424,121 |
Fair value of vested options | 290,132 | 711,404 |
Fair value of preferred shares issued to officer | 465,000 | |
Extinguishment of derivative liabilities | (145,565) | |
Change in fair value of derivatives | (101,226) | (19,491) |
Private placement costs (includes $79,748 recorded as interest expense in 2020) | 381,084 | 238,395 |
Amortization of convertible note discount | 755,538 | 185,330 |
Amortization of deferred revenue | (33,394) | 68,212 |
Loss on extinguishment of debt | 1,230,290 | |
Impairment of operating lease right of use asset | 255,093 | |
Amortization of operating lease right-of-use asset | 126,193 | 87,132 |
Gain on settlement of accounts payable and accrued expenses | (16,000) | |
Accretion of premium | 228,576 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 27,575 | (8,699) |
Deferred charges-related party | (134,704) | |
Inventories | 103,299 | (122,519) |
Prepaid expenses | 7,500 | (7,500) |
Security deposits | 16,769 | |
Accounts payable and accrued liabilities | 749,166 | 63,981 |
Operating lease liabilities | (82,659) | |
Net cash used in operating activities | (2,118,172) | (2,221,320) |
CASH FLOW FROM INVESTING ACTIVITIES: | ||
Purchase of equipment | (103,741) | (114,500) |
Payment of security deposit | (16,882) | |
Net cash used in investment activities | (103,741) | (131,382) |
CASH FLOW FROM FINANCING ACTIVITIES: | ||
Proceeds from shares issued for cash | 125,000 | 2,090,375 |
Proceeds from shares to be issued | 50,000 | 530,000 |
Proceeds from convertibles notes payable | 1,098,840 | 326,800 |
Proceeds from notes payable | 922,000 | |
Principal payments of notes payable | (118,800) | (124,150) |
Principal payment of convertible notes payable | (282,000) | (73,000) |
Net cash provided by financing activities | 1,795,040 | 2,750,025 |
Increase (decrease) in cash | (426,873) | 397,323 |
Cash, beginning of year | 433,143 | 35,820 |
Cash, end of year | 6,270 | 433,143 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid for taxes | 800 | |
Cash paid for Interest | 17,000 | 15,080 |
Non-cash investing and financing activities | ||
Derivative liabilities allocated to convertible note discount | 326,800 | |
Original issue discount | 43,000 | 28,200 |
Fair value of shares issued for loan fee | 76,000 | 54,990 |
Shares issued for cashless exercise of warrant | 2,590 | |
Recognition of right-of-use asset and liability | 432,000 | 410,000 |
Convertible notes issued for fees | 30,000 | |
Recognition of beneficial conversion feature | 2,556,602 | |
Shares issued for fee discount | 88,000 | |
Derivative allocated to discount | 183,000 | |
Issuance of shares to be issued | 535,000 | |
Fair value of shares to be issued for loan fee | $ 11,280 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Statement of Cash Flows [Abstract] | |
Interest expense | $ 79,748 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
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. On December 21, 2020, the Company entered into a Securities Exchange Agreement with Medolife Rx, Inc., a Wyoming corporation, (“Medolife Rx”) pursuant to which, the Company agreed to acquire 51% of Medolife Rx in exchange for 9,000 shares of newly created Series B Convertible Preferred Stock. On January 14, 2021, we completed the acquisition of 51% of Medolife, which has nominal assets, liabilities, and operations. (see Notes 12 and 13). 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, 2020, the Company incurred a net loss of $8,164,428 and used cash in operating activities of $2,118,172, and at December 31, 2020, the Company had a stockholders’ deficit of $2,608,246. 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, 2020, the Company had cash on hand in the amount of $6,270. Subsequent to December 31, 2020, the Company issued convertible notes payable and received net proceeds of $275,000 and received $1,263,000 for subscriptions to purchase 31,57,000 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. 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. Revenue recognition The Company follows the guidance of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Product Sales License revenue Cost of goods sold includes direct costs and fees related to the sale of our products. Accounts Receivable Accounts receivable are recorded net of 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, 2020 and December 31, 2019, the Company did not record any allowance for uncollectible accounts. Inventories Inventories are stated at the lower of cost or net realizable value with cost determined on a first-in, first-out (“FIFO”) basis. 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, 2020, a reserve for raw materials, product obsolescence and packaging for products that may no longer be viable of $9,125 has been established. No such reserves were established for fiscal year 2019. 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 years ended December 31, 2020 and 2019, the Company determined there were no indicators of impairment of its property and equipment. Impairment of Long-lived Assets The Company reviews its equipment, right-of-use assets, and other long-lived assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. For the years ended December 31, 2020 and 2019, the Company had no impairment of long-lived assets. Leases The Company accounts for its leases in accordance with the guidance of ASC 842, Leases. The Company determines whether a contract is, or contains, a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at lease commencement in determining the present value of unpaid lease payments The Company adopted ASC 842 on January 1, 2019. There was no 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, 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”. 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-based compensation The Company periodically 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 in accordance with FASB ASC 718, Compensation – Stock Compensation The fair value of the Company’s stock options is estimated using the 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 years ended December 31, 2020 and 2019, advertising costs totaled $78,895 and $103,401, respectively. Research and Development Costs Costs incurred for research and development are expensed as incurred. During the years ended December 31, 2020 and 2019, research and development costs totaled $452,443 and $351,670, 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, 2020 and 2019, the dilutive impact of common stock equivalents, e.g. stock options, warrants and convertible notes payable have been excluded from calculation of weighted average shares because their impact on the loss per share is anti-dilutive. As of December 31, 2020, 4,130,000 options were outstanding of which 2,956,477 were exercisable, no warrants were outstanding and exercisable, and convertible debt and accrued interest totaling $1,499,879 was convertible into 97,064,539 shares of common stock. It should be noted that contractually the limitations on the third-party notes (and the related warrant) limit the number of shares converted to either 4.99% or 9.99% of the then outstanding shares. As of December 31, 2020, and 2019 potentially dilutive securities consisted of the following: December 31, 2020 December 31, 2019 Stock options 4,130,000 3,290,000 Warrants - - Convertible notes payable 97,064,539 889,469 Total 101,194,539 4,179,469 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. As of December 31, 2020, the Company did not have any Level 2 liabilities comprised of the fair value of embedded derivative liabilities. Concentrations of risks For the years ended December 31, 2020 and 2019, no customer accounted for 10% or more of revenue. As of December 31, 2020, one customer accounted for 100% of accounts receivable. At December 31, 2019, two customers accounted for 19% and 12% of accounts receivable, and no other customer accounted for 10% or more 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. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity, and also improves and amends the related EPS guidance for both Subtopics. The ASU will be effective for annual reporting periods after December 15, 2021 and interim periods within those annual periods and early adoption is permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements. 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 | 12 Months Ended |
Dec. 31, 2020 | |
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 $100,000. 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 years ended December 31, 2020 and 2019, the Company recognized revenue related to the agreement of $33,394, and $31,788, respectively. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 3 – INVENTORIES Inventories are valued at the lower of cost (first-in, first-out) or net realizable value, and net of reserves, consisted of the following: December 31, 2020 December 31, 2019 Raw materials and packaging $ 16,076 $ 102,428 Finished goods 3,144 20,091 $ 19,220 $ 122,519 The Company has recorded a reserve for slow moving and potentially obsolete inventory. The reserve at December 31, 2020 was $9,125. There was no reserve at December 31, 2019. |
Equipment
Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Equipment | NOTE 4 - EQUIPMENT Equipment, stated at cost, less accumulated depreciation consisted of the following: December 31, 2020 December 31, 2019 Machinery-technology equipment $ 704,772 $ 607,000 Machinery-technology equipment under construction 35,969 30,000 740,741 637,000 Less accumulated depreciation (540,218 ) (323,522 ) $ 200,523 $ 313,478 Depreciation expense for the years ended December 31, 2020 and 2019 was $216,696 and $173,902, respectively. At December 31, 2020 and 2019, machinery-technology equipment included machinery acquired from Arthur G. Mikaelian, Ph.D (see Note 12) initially costing $592,500, with a net book value of $121,389 and $272,602, respectively. |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Operating Leases | NOTE 5 - OPERATING LEASE At December 31, 2019, the Company had one operating lease for its headquarters office space in Burbank, California (the “First” lease). At December 31, 2019, the balance of the First lease’s operating lease right-of-use (“ROU”) asset and corresponding lease liability were $332,980 and $337,453, respectively. 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 “Second” lease). The Second lease commenced on January 1, 2020, and has a term for 5 years, with annual fixed rental payments ranging from $90,000 to $101,296. The aggregate total fixed rent is approximately $477,822 and resulted in the recognition of an operating lease “ROU” asset and of a corresponding lease liability of $431,402 each. The Company also paid a security deposit of $16,883. At December 31, 2020, the Company did not have any other leases. During the year ended December 31, 2020, the Company consolidated it operations into the Second lease space. In connection with the First lease that is no longer utilized, the Company recorded an impairment of the related net ROU of $255,093, and wrote off a deposit of $16,769 with the lessor. The total due to the lessor for the First lease is $235,759 and is recorded as lease settlement obligation at December 31, 2020. At December 31, 2020, the balance of the Second lease’s ROU asset and corresponding lease liability were $362,227 and $395,781, respectively. 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: Year ended December 31, 2020 Lease Cost Operating lease cost (included in selling, general, and administrative expense in the Company’s statement of operations) $ 195,509 Other Information Cash paid for amounts included in the measurement of lease liabilities for 2020 $ 92,000 Weighted average remaining lease term – operating leases (in years) 3.0 Average discount rate – operating leases 4 % The supplemental balance sheet information related to leases for the period is as follows: At December 31, 2020 Operating leases Long-term right-of-use assets $ 362,227 Short-term operating lease liabilities $ 100,901 Long-term operating lease liabilities 294,880 Total operating lease liabilities $ 395,781 Maturities of the Company’s lease liabilities are as follows: Year Ending Operating Leases 2021 92,700 2022 95,481 2023 98,345 2024 118,266 Total lease payments 404,792 Less: Imputed interest 9,011 Present value of lease liabilities 395,781 Less current portion (100,901 ) Operating lease liabilities, long-term $ 294,880 Lease expense were $195,509 and $107,588 during the year ended December 31, 2020 and December 31, 2019, respectively. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 6 – NOTES PAYABLE December 31, 2020 December 31, 2019 (a) Notes payable secured by equipment (net of deferred finance charge of $74,817) $ 363,817 $ - (b) Note payable, secured by assets 33,350 55,850 (c) Note payable, Payroll Protection Loan 134,125 - (d) Note payable, Economic Injury Disaster Loan 160,000 - (e) Revenue sharing agreement 242,800 - Total notes payable outstanding 934,092 55,850 Current portion 482,724 55,850 Long term portion $ 451,368 $ - (a) In April 2020 and May 2020, the Company entered into two financing agreements aggregating $505,646. The notes have a stated interest rate of 10.9%. 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 $21,000, and mature in April 2022 and May 2022. During the year ended December 31, 2020, the Company made payments of $67,366 and at December 31, 2020, the balance due on these notes was $438,634. Deferred financing charges against these loans, included in both short term and long term aggregated $74,817 at December 31, 2020. (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. During the year ended December 31, 2020, the company made principal payments of $22,500. The note is in default and the Company is in discussion with the note holder. (c) On May 7, 2020, the Company was granted a loan (the “PPP loan”) from Bank of America in the aggregate amount of $134,125, 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 $160,000 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 December 31, 2020. (e) Between July 7, 2020, and July 29, 2020, the Company issued notes payable to third-party investors totaling $250,000. 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 $28,000, of discount which was fully amortized to interest expense in 2020. The Company has received a notice of default and demand for payment from three note holders (owed approximately $146,000). The Company has retained counsel who is in discussion with the note holders. See Note 13. |
Convertible Notes Payable
Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | NOTE 7 – CONVERTIBLE NOTES PAYABLE Convertible notes payable consisted of the following: December 31, 2020 December 31, 2019 Unsecured (a) Convertible notes with fixed discount percentage conversion prices $ 180,200 $ 282,000 Put premiums on stock settled debt 117,866 - (b) Convertible notes with fixed conversion prices 936,944 - Default penalty principal added, charged to loss on debt extinguishment 369,086 - Total convertible notes principal outstanding 1,614,096 282,000 Debt discount (539,282 ) (225,000 ) Convertible notes, net of discount and premium $ 1,074,814 $ 57,000 Current portion 1,074,814 57,000 Long-term portion $ - $ - (a) At December 31, 2019, there was a $282,000 convertible notes with adjustable conversion prices outstanding. During the year ended December 31, 2020, the Company issued one unsecured convertible promissory note for $153,000, bearing interest at 10% per annum, and maturing in February 2021. Also, during the year ended December 31, 2020, the Company issued two unsecured convertible notes payable for $30,000, bearing interest at 10% per annum, and maturing on December 31, 2020, that were issued as loan commitment fees for notes payable. On September 9, 2020 and September 20, 2020, the Company issued two unsecured convertible promissory notes for $150,200, bearing interest at 10% to 12%, per annum, and maturing in September 2021. 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 $225,685 which were charged to interest expense at the dates of the note issuance. On April 29, 2020, the $282,000 convertible note payable was paid off. During the year ended December 31, 2020, the $153,000 note and related premium of $107,819 was fully converted into common stock. At December 31, 2020, the balance of these convertible notes was $180,200. (b) At December 31, 2019, the Company had no convertible notes outstanding with fixed conversion prices. During the eight months ended August 31, 2020, the Company issued seven convertible notes with fixed conversion prices aggregating $496,944. 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 and expenses of $531,000 to account for loan fees, beneficial conversion features ($323,000), and original issue discounts ($76,944). 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 $314,441. At December 31, 2020 the new principal totaled $811,385. On December 9, 2020, the Company executed amendments to these notes effective September 30, 2020, which extended the maturity dates and fixed the conversion price at $0.015. The Company determined that the change in the note terms resulted in old and new debt instruments that were substantially different, with the old debt being extinguished. Due to the change in conversion terms the notes also require the recognition of the beneficial conversion feature of the increased principal ($314,441 default principal) and lowering of the conversion price resulting in recognition of additional charges. Loss on debt extinguishment was charged $757,293 and debt discounts were charged $314,441 with a credit to additional paid in capital for the debt discounts. In addition $243,285 related to the unamortized discounts as originally recorded was also charged to loss on debt extinguishment for the unamortized balance of debt discounts. In addition, loss on debt extinguishment was charged $229,712 for other costs related of the extinguishment. During the three months ended December 31, 2020, the Company issued nine convertible notes with fixed conversion prices aggregating $440,000. The notes are unsecured, bear interest at 10% per annum, and mature through June 30, 2021. The notes are convertible into common stock at $0.015 per share. The Company recorded debt discounts of $43,000. On December 2, 2020 default penalties of $54,645 were declared by the note holders. The principal balance of these notes totals $494,645 at December 31, 2020. Beneficial conversion features having a value of $451,646 were also recognized with a charge to debt discount offset with a credit to additional paid in capital. 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. At December 31, 2019, the balance of unamortized discount on convertible notes was $225,000. During the year ended December 31, 2020, debt discount of $2,556,602 was recorded, debt discount amortization of $775,538 was recorded, discount of $381,084 was recorded as private placement costs, and $1,085,698 was removed upon debt extinguishment. At December 31, 2020, the balance of the unamortized discount was $539,282. |
Derivative Liabilities and Fina
Derivative Liabilities and Financial Instruments | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities and Financial Instruments | Note 8 – DERIVATIVE LIABILITIES AND FINANCIAL INSTRUMENTS At December 31, 2020 December 31, 2019 Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Derivative Liability - $ - - - $ 400,139 - A roll-forward of the level 2 valuation financial instruments is as follows: Derivative Liabilities Balance at December 31, 2018 $ - Recognition of derivative liabilities upon initial valuation 565,195 Decrease in fair market value during the year ended December 31, 2019 (19,491 ) Gain on debt extinguishment recognized upon liquidation of related convertible notes during the year ended December 31, 2019 (145,565 ) Balance at December 31, 2019 400,139 Decrease in fair market value during the year ended December 31, 2020 (101,226 ) Gain on debt extinguishment recognized upon liquidation of related convertible notes during the year ended December 31, 2020 (298,913 ) Balance at December 31, 2020 $ - 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 convertible 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. During the year ended December 31, 2020, a decrease in the fair value of derivatives of $101,226 was recorded, and the balance of the derivative liabilities of $298,913 was fully extinguished upon pay-off of the related convertible note, and resulted in a gain on debt extinguishment of $298,913. At December 31, 2020, the Company had no convertible notes outstanding that are considered to have embedded derivative liabilities that require bifurcation per the note agreements. At December 31, 2019, the derivative liabilities were valued at the following dates using a probability weighted Black-Scholes-Merton model with the following assumptions: December 31, 2019 Conversion feature: Risk-free interest rate 1.77 % Expected volatility 222 % Expected life (in years) 1 year Expected dividend yield - Fair Value: Conversion feature $ 400,139 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, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 9 – INCOME TAXES The Company had no income tax expense for the years ended December 31, 2020 December 31, 2019. The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate: Year ended Year 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, 2020 December 31, 2019 Deferred tax assets: Stock-based compensation $ 1,599,000 $ 1,039,000 Operating lease liability 111,000 94,000 Derivative expenses 173,000 67,000 Net operating loss carryforwards 2,522,000 1,132,000 Gross deferred tax assets 4,405,000 2,332,000 Less: valuation allowance (4,405,000 ) (2,103,000 ) Total deferred tax assets 282,000 229,000 Deferred tax liabilities: Depreciation 135,000 90,000 Derivative gain 46,000 46,000 Operating lease right-of-use asset 101,000 93,000 Total deferred tax liabilities 282,000 229,000 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, 2020 and December 31, 2019, 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, 2020 and December 31, 2019, the valuation allowance increased by $2.3 million and $1.5 million, respectively. At December 31, 2020 and 2019, 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 $10.1 million and $4.3 million, respectively. For state purposes approximately $8.8 million and $3.1 was available at December 31, 2020 and 2019, respectively. The Federal carryforwards expire on various dates through 2040 and the state carryforwards expire through 2037. 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, 2020, and December 31, 2019, no liability for unrecognized tax benefits was required to be recorded or disclosed. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Deficit | NOTE 10 – STOCKHOLDERS’ DEFICIT The Company’s authorized capital consists of 525,000,000 shares, of which 500,000,000 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. 2,500,000 shares of preferred stock are currently outstanding at December 31, 2020, and designated as Series A. 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. Series A Preferred Stock On April 14, 2020, the Company filed a Certificate of Designation for the Company’s Series A Preferred Stock (“Series A”) 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 the Series A to the Company’s Chief Executive Officer in a private placement transaction. The fair value of the stock was determined to be $465,000 as determined by a third party valuation expert, and was recorded as stock compensation. On November 16, 2020, the Company entered into a Control Block Transfer Agreement with Eric Rice and Phillip Sands, pursuant to which, Mr. Rice agreed to transfer the 2,500,000 shares of the Series A to Mr. Sands, representing a transfer of majority voting control over the Company because the holder of such 2,500,000 shares 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 Phillip Sands in order to consummate the Company’s transition into a holding company, without requiring the Company to further dilute its stock through the issuance of new shares. Series B Preferred Stock On December 21, 2020, the Company entered into a Securities Exchange Agreement with Medolife Rx, Inc., a Wyoming corporation, (“Medolife Rx”) pursuant to which, the Company agreed to acquire 51% of Medolife Rx in exchange for 9,000 shares of newly created Series B Convertible Preferred Stock, which, were issued to Dr. Arthur Mikaelian upon closing on January 14, 2021. Dr. Mikaelian’s 9,000 shares of Series B Convertible Preferred Stock are convertible into fifty-four percent (54%) of the issued and outstanding shares of the Company’s common stock on a fully converted basis. Common Stock 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. The Secretary of State of Nevada approved the share increase. The Company has 500,000,000 shares of par value $0.001 common stock authorized and 46,756,970 shares outstanding as of December 31, 2020. At December 31, 2019 there were 100,000,000 shares of par value $0.001 common stock authorized and 49,087,255 shares outstanding. Common stock share cancellation by former executive 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 (16,951,432 shares were cancelled December 29, 2020), and to retain ownership of 1,000,000 shares of Common Stock. Common stock issued for cash During the year ended December 31, 2020, the Company agreed to issue 407,408 shares of common stock in a private placement of shares at a price of $0.26 per share for total proceeds of $125,000. During the years ended December 31, 2019, the Company completed a private placement 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 68,519 shares are included in shares to be issued on the accompanying financial statements. Common stock issued as compensation During the year ended December 31, 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 $71,001 based on the closing price of the Company’s common stock on the date shares were granted, and recorded as stock compensation in selling, general and administrative expense during the year ended December 31, 2020. During the year ended December 31, 2020, the Company recorded $1,267,720 to stock-based compensation as accretion of the expense related to grants of restricted stock (see below). During the year ended December 31, 2020, the Company issued 750,000 common shares of stock to service vendors for a total fair value of $60,200. 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 Arthur G. Mikaelian, Ph.D , a consultant for services (see Note 12). 1,000,000 shares vested immediately, and the balance of 7,000,000 shares 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, 2020 and 2019, total share-based expense recognized related to vested restricted shares totaled $1,267,720 and $2,317,868, respectively. At December 31, 2020, there was $431,411 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 year ended December 31, 2020: Number of shares Fair value of shares Non-vested shares, December 31, 2019 5,750,000 $ 1,699,000 Granted - - Vested (2,500,000 ) (1,268,000 ) Forfeited - - Non-vested shares, December 31, 2020 3,250,000 $ 431,000 As of December 31, 2020, no shares have been issued and 4,750,000 vested shares are included in shares to be issued on the accompanying financial statements Common stock issued for financing The Company issued 1,127,522 common shares of stock to secure financing for total fair value of $105,408. Common stock issued in conversion of convertible notes payable The Company issued 6,885,019 common shares of stock to holders of convertible notes for shares valued at $336,179. 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 year ended December 31, 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 $85,000 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 years ended December 31, 2020 and 2019, the Company recognized $290,132 and $711,404, respectively, of compensation expense relating to vested stock options. As of December 31, 2020, the amount of unvested compensation related to stock options was approximately $300,000 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 years ended December 31, 2020 and 2019: Number of options Weighted Average Contractual Options Outstanding as of December 31, 2018 - $ - - Granted 3,230,000 0.10 6.0 Exercised - - - Expired - - - 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 December 31, 2020 4,130,000 0.11 6.5 Options Exercisable as of December 31, 2020 2,956,477 $ 0.10 5.5 At December 31, 2020, the options outstanding had no intrinsic value. 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 $0.20 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, 2020 and 2019 is as follows: Number of warrants Weighted Average Contractual 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 - - - Granted - - - Exercised - - - Expired - - - Warrants Outstanding and Exercisable as of December 31, 2020 - $ - - |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 10 – STOCKHOLDERS’ DEFICIT The Company’s authorized capital consists of 525,000,000 shares, of which 500,000,000 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. 2,500,000 shares of preferred stock are currently outstanding at December 31, 2020, and designated as Series A. 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. Series A Preferred Stock On April 14, 2020, the Company filed a Certificate of Designation for the Company’s Series A Preferred Stock (“Series A”) 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 the Series A to the Company’s Chief Executive Officer in a private placement transaction. The fair value of the stock was determined to be $465,000 as determined by a third party valuation expert, and was recorded as stock compensation. On November 16, 2020, the Company entered into a Control Block Transfer Agreement with Eric Rice and Phillip Sands, pursuant to which, Mr. Rice agreed to transfer the 2,500,000 shares of the Series A to Mr. Sands, representing a transfer of majority voting control over the Company because the holder of such 2,500,000 shares 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 Phillip Sands in order to consummate the Company’s transition into a holding company, without requiring the Company to further dilute its stock through the issuance of new shares. Series B Preferred Stock On December 21, 2020, the Company entered into a Securities Exchange Agreement with Medolife Rx, Inc., a Wyoming corporation, (“Medolife Rx”) pursuant to which, the Company agreed to acquire 51% of Medolife Rx in exchange for 9,000 shares of newly created Series B Convertible Preferred Stock, which, were issued to Dr. Arthur Mikaelian upon closing on January 14, 2021. Dr. Mikaelian’s 9,000 shares of Series B Convertible Preferred Stock are convertible into fifty-four percent (54%) of the issued and outstanding shares of the Company’s common stock on a fully converted basis. Common Stock 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. The Secretary of State of Nevada approved the share increase. The Company has 500,000,000 shares of par value $0.001 common stock authorized and 46,756,970 shares outstanding as of December 31, 2020. At December 31, 2019 there were 100,000,000 shares of par value $0.001 common stock authorized and 49,087,255 shares outstanding. Common stock share cancellation by former executive 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 (16,951,432 shares were cancelled December 29, 2020), and to retain ownership of 1,000,000 shares of Common Stock. Common stock issued for cash During the year ended December 31, 2020, the Company agreed to issue 407,408 shares of common stock in a private placement of shares at a price of $0.26 per share for total proceeds of $125,000. During the years ended December 31, 2019, the Company completed a private placement 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 received 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 68,519 shares are included in shares to be issued on the accompanying financial statements. Common stock issued as compensation During the year ended December 31, 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 $71,001 based on the closing price of the Company’s common stock on the date shares were granted, and recorded as stock compensation in selling, general and administrative expense during the year ended December 31, 2020. During the year ended December 31, 2020, the Company recorded $1,267,720 to stock-based compensation as accretion of the expense related to grants of restricted stock (see below). During the year ended December 31, 2020, the Company issued 750,000 common shares of stock to service vendors for a total fair value of $60,200. 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 Arthur G. Mikaelian, Ph.D , a consultant for services (see Note 12). 1,000,000 shares vested immediately, and the balance of 7,000,000 shares 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, 2020 and 2019, total share-based expense recognized related to vested restricted shares totaled $1,267,720 and $2,317,868, respectively. At December 31, 2020, there was $431,411 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 years ended December 31, 2020 and 2019: Number of shares Fair value of shares Non-vested shares, December 31, 2018 - $ - Granted 8,000,000 4,000,000 Vested (2,250,000 ) (2,301,000 ) Forfeited - - Non-vested shares, December 31, 2019 5,750,000 1,699,000 Granted - - Vested (2,500,000 ) (1,268,000 ) Forfeited - - Non-vested shares, December 31, 2020 3,250,000 $ 431,000 As of December 31, 2020, no shares have been issued and 4,750,000 vested shares are included in shares to be issued on the accompanying financial statements Common stock issued for financing The Company issued 1,127,522 common shares of stock to secure financing for total fair value of $105,408. Common stock issued in conversion of convertible notes payable The Company issued 6,885,019 common shares of stock to holders of convertible notes for shares valued at $336,179. 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 year ended December 31, 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 $85,000 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 years ended December 31, 2020 and 2019, the Company recognized $290,132 and $711,404, respectively, of compensation expense relating to vested stock options. As of December 31, 2020, the amount of unvested compensation related to stock options was approximately $300,000 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 years ended December 31, 2020 and 2019: Number of options Weighted Average Contractual Options Outstanding as of December 31, 2018 - $ - - Granted 3,230,000 0.10 6.0 Exercised - - - Expired - - - 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 December 31, 2020 4,130,000 0.11 6.5 Options Exercisable as of December 31, 2020 2,956,477 $ 0.10 5.5 At December 31, 2020, the options outstanding had no intrinsic value. 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. 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, 2020 and 2019 is as follows: Number of warrants Weighted Average Contractual 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 - - - Granted - - - Exercised - - - Expired - - - Warrants Outstanding and Exercisable as of December 31, 2020 - $ - - |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 12 – RELATED PARTY TRANSACTIONS On December 21, 2020, the Company entered into a Securities Exchange Agreement with Medolife Rx, Inc., a Wyoming corporation, (“Medolife Rx”) pursuant to which, the Company agreed to acquire 51% of Medolife Rx from entities controlled by Arthur G. Mikaelian, Ph.D. in exchange for 9,000 shares of newly created Series B Convertible Preferred Stock. Prior to this transaction, Dr. Mikaelian was a consultant and shareholder in the Company (See Notes 4 and 10). On January 14, 2021, the Company completed the acquisition of 51% of Medolife. At December 31, 2020 and through January 14, 2021, Medolife Rx had nominal assets, liabilities, and operations. During December 2021, the Company advanced $235,000 to Medolife Rx in anticipation of the closing of the acquisition transaction. The funds were used to pay certain expenses on behalf of the Company. At December 31, 2020, the balance of the advance was $134,704 and presented as deferred charges-related party. In connection with the acquisition of 51% of Medolife Rx, Dr. Mikaelian was appointed as a member of the Board of Directors of the Company, and also appointed to serve as the Company’s Chief Executive Officer, a role which Dr. Mikaelian assumed on January 14, 2021. The Company has an agreement with Dr. Mikaelian in consideration of the Company’s exclusive use of patented technology developed by Dr. Mikaelian. 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 10). During the year ended December 31, 2020 and 2019, the Company recognized royalty expenses of $420,000 and $343,300, respectively. On November 15, 2020, the Company entered into an interim compensation agreement with Mr. Phillip Sands providing for monthly compensation of $8,000 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 Phillip 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 Phillip 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. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 13 – SUBSEQUENT EVENTS Approval and Issuance of New Classes of Preferred Stock The Nevada Secretary of State approved the designations of the Series B and C convertible preferred stock on January 13, 2021 The Board of Directors of the Company previously approved the creation of 9,000 shares of Series B Convertible Preferred Stock and 1,000 shares of Series C Convertible Preferred Stock to be issued to certain Designees of Medolife Rx, Inc., a Wyoming corporation (“Medolife Rx”) pursuant to the conditions precedent to closing of the December 21, 2020 Securities Exchange Agreement, under which the Company acquired 51% of Medolife Rx. Series B Convertible Preferred Stock On January 14, 2021, the Board of Directors of the Company approved the issuance of all 9,000 of the 9,000 authorized shares of Series B Convertible Preferred Stock to Dr Arthur Mikaelian, in exchange for 51% of Medolife Rx (see Note 12). The stock will be valued on the basis of the greater of the assets acquired or the fair value of the Series B convertible preferred shares given in the exchange. Management has determined that the net asset value of Medolife Rx is not material as of the date of the acquisition of its 51% interest and therefore no valuation is performed. As the acquisition will not have a material impact on the Company’s consolidated financial statements, proforma disclosures have not been presented. Series B Preferred Stock – Designation Summary The terms of the Certificate of Designation of the Series B Convertible Preferred Stock, which was filed with the State of Nevada on January 12, 2021, state that the shares of Series B Convertible Preferred Stock are convertible into fifty-four percent (54%) of the issued and outstanding shares of the Company’s common stock on a fully converted basis. Each share of Series B Preferred Stock shall be convertible into 6,750 shares of Common Stock (“Conversion Ratio”), at the option of a Holder, at any time and from time to time, from and after the issuance of the Series B Preferred Stock; provided that, for a period of 24 months from the Issuance Date, if the Company issues shares of common stock, including common stock as the result of the purchase, exercise or conversion of outstanding derivative or convertible securities (or securities, including any derivative securities, containing the right to purchase, exercise or convert into shares of common stock) (the “Dilution Shares”) such that the outstanding number of shares of common stock on a fully diluted basis shall be greater than 112,500,000 shares (inclusive of conversions of Series B Preferred Stock at the Conversion Ratio immediately above), then the Conversion Ratio for the Series B Preferred Stock then outstanding and unconverted as of the date the Dilution Shares are issued shall be adjusted to equal the Conversion Ratio multiplied by a fraction, the numerator of which shall be the number of shares outstanding on a fully diluted basis after the issuance of the Dilution Shares, and the denominator shall be 112,500,000. Each holder of the Series B Preferred Stock shall have the right to vote on any matter that may from time to time be submitted to the Company’s shareholders for a vote, on an as-converted basis, either by written consent or by proxy. Series C Convertible Preferred Stock On January 14, 2021, the Board of Directors of the Company approved the issuance of all 1,000 authorized shares of Series C Convertible Preferred Stock to the following Medolife Rx Designees: Trillium Partners LP 500 Shares of Series C Preferred Stock Sagittarii Holdings, Inc. 500 Shares of Series C Preferred Stock The stock will be valued on the basis of the greater of the value of the services received or the fair value of the Series C convertible preferred shares issued. Series C Preferred Stock – Designation Summary The terms of the Certificate of Designation of the Series C Convertible Preferred Stock, which was filed with the State of Nevada on January 12, 2021, state that such Series C Convertible shares have a par value of $0.00001 per share and a stated value of $100 per share (the “Stated Value”) and each Series C Preferred Share shall be convertible into 6,750 shares of Common Stock (“Conversion Ratio”), at the option of a Holder, at any time and from time to time, from and after the issuance of the Series C Preferred Stock; provided that, for a period of 24 months from the Issuance Date, if the Company issues shares of common stock, including common stock as the result of the purchase, exercise or conversion of outstanding derivative or convertible securities (or securities, including any derivative securities, containing the right to purchase, exercise or convert into shares of common stock) (the “Dilution Shares”) such that the outstanding number of shares of common stock on a fully diluted basis shall be greater than 112,500,000 shares (inclusive of conversions of Series C Preferred Stock at the Conversion Ratio immediately above), then the Conversion Ratio for the Series C Preferred Stock then outstanding and unconverted as of the date the Dilution Shares are issued shall be adjusted to equal the Conversion Ratio multiplied by a fraction, the numerator of which shall be the number of shares outstanding on a fully diluted basis after the issuance of the Dilution Shares, and the denominator shall be 112,500,000. Subject to the beneficial ownership limitations of 9.99%, set forth in Section 5 (b) of the attached Series C Convertible Preferred Stock Certificate of Designation, each holder of the Series C Preferred Stock shall have the right to vote on any matter that may from time to time be submitted to the Company’s shareholders for a vote, on an as converted basis, either by written consent or by proxy. Notice of Default and Demand for Payment On February 5, 2021, the Company received a notification of default and demand for payment from an attorney represent three note holders. The note holder entered into Product Revenue Loan Agreements totaling $153,300 including accrued interest and attorney fees. The Company has engaged legal counsel to address the issue with the goal of a settlement rather than litigation. Common Stock Issued Between February 12, 2021 and the issuance date of this report on Form 10-K, the Company issued 31,575,000 shares of common stock under the Form S-1 offering (made effective on February 12, 2021). The Company received cash of $1,263,000. In January and February 2021, the Company issued a total of 6,500,000 shares of its common stock to individuals as compensation for services, valued at the fair value of the shares of the Company’s stock on the dates issued. Since December 31, 2020, a total of 20,082,369 of common shares were issued to convertible note holders in exchange for principal and interest of notes held. The conversions fully liquidated the principal and accrued interest in the Geneva Roth Remark and JSJ and partially converted the Trillium April 27, 2020 convertible notes payable. Convertible Notes Issued On January 31, 2021, the Company issued three convertible notes payable having a total principal of $303,000 including Original Issue Discount and received $175,000 in cash. The notes mature on August 31, 2021, bear interest of 10% and are convertible into common stock at a price of $0.015 per share. Any beneficial conversion feature will be charged to debt discount offsetting credits to additional paid in capital to the extent of the total cash received and any excess will be charged to private placement fees recorded as other income and expense. All debt discounts will be amortized to interest expense over the term of the notes. On February 11, 2021, the Company issued a convertible note payable having principal of $25,000 for services from an attorney in conjunction with the Form S1. The note matures on February 11, 2022, bears interest of 12% and is convertible into common stock at a discount to the lowest traded price over the thirty days prior to conversion. The note terms satisfy the criteria for Stock Settled Debt treatment under ASC 480 a premium will be calculated and charged to interest expense on date of the note issuance. The principal amount will be charged to professional fee expense. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
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 year ended December 31, 2020, the Company incurred a net loss of $8,164,428 and used cash in operating activities of $2,118,172, and at December 31, 2020, the Company had a stockholders’ deficit of $2,608,246. 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, 2020, the Company had cash on hand in the amount of $6,270. Subsequent to December 31, 2020, the Company issued convertible notes payable and received net proceeds of $275,000 and received $1,391,400 for subscriptions to purchase 34,785,000 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 consolidated financial statements have been prepared in accordance with accounting standards generally accepted in the United States of America. 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 | 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. |
Revenue Recognition | Revenue recognition The Company follows the guidance of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Product Sales License revenue Cost of goods sold includes direct costs and fees related to the sale of our products. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded net of 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, 2020 and December 31, 2019, the Company did not record any allowance for uncollectible accounts. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value with cost determined on a first-in, first-out (“FIFO”) basis. 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, 2020, a reserve for raw materials, product obsolescence and packaging for products that may no longer be viable of $9,125 has been established. No such reserves were established for fiscal year 2019. |
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 years ended December 31, 2020 and 2019, the Company determined there were no indicators of impairment of its property and equipment. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company reviews its equipment, right-of-use assets, and other long-lived assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. For the years ended December 31, 2020 and 2019, the Company had no impairment of long-lived assets. |
Leases | Leases The Company accounts for its leases in accordance with the guidance of ASC 842, Leases. The Company determines whether a contract is, or contains, a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at lease commencement in determining the present value of unpaid lease payments The Company adopted ASC 842 on January 1, 2019. There was no 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 December 31, 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 | 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-based Compensation | Stock-based compensation The Company periodically 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 in accordance with FASB ASC 718, Compensation – Stock Compensation The fair value of the Company’s stock options is estimated using the 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 Advertising costs are expensed as incurred. During the years ended December 31, 2020 and 2019, advertising costs totaled $78,895 and $103,401, respectively. |
Research and Development Costs | Research and Development Costs Costs incurred for research and development are expensed as incurred. During the years ended December 31, 2020 and 2019, research and development costs totaled $452,443 and $351,670, 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 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, 2020 and 2019, the dilutive impact of common stock equivalents, e.g. stock options, warrants and convertible notes payable have been excluded from calculation of weighted average shares because their impact on the loss per share is anti-dilutive. As of December 31, 2020, 4,130,000 options were outstanding of which 2,956,477 were exercisable, no warrants were outstanding and exercisable, and convertible debt and accrued interest totaling $1,499,879 was convertible into 97,064,539 shares of common stock. It should be noted that contractually the limitations on the third-party notes (and the related warrant) limit the number of shares converted to either 4.99% or 9.99% of the then outstanding shares. As of December 31, 2020, and 2019 potentially dilutive securities consisted of the following: December 31, 2020 December 31, 2019 Stock options 4,130,000 3,290,000 Warrants - - Convertible notes payable 97,064,539 889,469 Total 101,194,539 4,179,469 |
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 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. As of December 31, 2020, the Company did not have any Level 2 liabilities comprised of the fair value of embedded derivative liabilities. |
Concentrations of Risks | Concentrations of risks For the years ended December 31, 2020 and 2019, no customer accounted for 10% or more of revenue. As of December 31, 2020, one customer accounted for 100% of accounts receivable. At December 31, 2019, two customers accounted for 19% and 12% of accounts receivable, and no other customer accounted for 10% or more 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 |
Recent Accounting Pronouncements | 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. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity, and also improves and amends the related EPS guidance for both Subtopics. The ASU will be effective for annual reporting periods after December 15, 2021 and interim periods within those annual periods and early adoption is permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements. 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, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Potentially Dilutive Securities | As of December 31, 2020, and 2019 potentially dilutive securities consisted of the following: December 31, 2020 December 31, 2019 Stock options 4,130,000 3,290,000 Warrants - - Convertible notes payable 97,064,539 889,469 Total 101,194,539 4,179,469 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories are valued at the lower of cost (first-in, first-out) or net realizable value, and net of reserves, consisted of the following: December 31, 2020 December 31, 2019 Raw materials and packaging $ 16,076 $ 102,428 Finished goods 3,144 20,091 $ 19,220 $ 122,519 |
Equipment (Tables)
Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Equipment | Equipment, stated at cost, less accumulated depreciation consisted of the following: December 31, 2020 December 31, 2019 Machinery-technology equipment $ 704,772 $ 607,000 Machinery-technology equipment under construction 35,969 30,000 740,741 637,000 Less accumulated depreciation (540,218 ) (323,522 ) $ 200,523 $ 313,478 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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: Year ended December 31, 2020 Lease Cost Operating lease cost (included in selling, general, and administrative expense in the Company’s statement of operations) $ 195,509 Other Information Cash paid for amounts included in the measurement of lease liabilities for 2020 $ 92,000 Weighted average remaining lease term – operating leases (in years) 3.0 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 December 31, 2020 Operating leases Long-term right-of-use assets $ 362,227 Short-term operating lease liabilities $ 100,901 Long-term operating lease liabilities 294,880 Total operating lease liabilities $ 395,781 |
Schedule of Maturities of Operating Lease Liabilities | Maturities of the Company’s lease liabilities are as follows: Year Ending Operating Leases 2021 92,700 2022 95,481 2023 98,345 2024 118,266 Total lease payments 404,792 Less: Imputed interest 9,011 Present value of lease liabilities 395,781 Less current portion (100,901 ) Operating lease liabilities, long-term $ 294,880 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | December 31, 2020 December 31, 2019 (a) Notes payable secured by equipment (net of deferred finance charge of $74,817) $ 363,817 $ - (b) Note payable, secured by assets 33,350 55,850 (c) Note payable, Payroll Protection Loan 134,125 - (d) Note payable, Economic Injury Disaster Loan 160,000 - (e) Revenue sharing agreement 242,800 - Total notes payable outstanding 934,092 55,850 Current portion 482,724 55,850 Long term portion $ 451,368 $ - (a) In April 2020 and May 2020, the Company entered into two financing agreements aggregating $505,646. The notes have a stated interest rate of 10.9%. 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 $21,000, and mature in April 2022 and May 2022. During the year ended December 31, 2020, the Company made payments of $67,366 and at December 31, 2020, the balance due on these notes was $438,634. Deferred financing charges against these loans, included in both short term and long term aggregated $74,817 at December 31, 2020. (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. During the year ended December 31, 2020, the company made principal payments of $22,500. The note is in default and the Company is in discussion with the note holder. (c) On May 7, 2020, the Company was granted a loan (the “PPP loan”) from Bank of America in the aggregate amount of $134,125, 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 $160,000 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 December 31, 2020. (e) Between July 7, 2020, and July 29, 2020, the Company issued notes payable to third-party investors totaling $250,000. 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 $28,000, of discount which was fully amortized to interest expense in 2020. The Company has received a notice of default and demand for payment from three note holders (owed approximately $146,000). The Company has retained counsel who is in discussion with the note holders. See Note 13. |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Table) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes Payable | Convertible notes payable consisted of the following: December 31, 2020 December 31, 2019 Unsecured (a) Convertible notes with fixed discount percentage conversion prices $ 180,200 $ 282,000 Put premiums on stock settled debt 117,866 - (b) Convertible notes with fixed conversion prices 936,944 - Default penalty principal added, charged to loss on debt extinguishment 369,086 - Total convertible notes principal outstanding 1,614,096 282,000 Debt discount (539,282 ) (225,000 ) Convertible notes, net of discount and premium $ 1,074,814 $ 57,000 Current portion 1,074,814 57,000 Long-term portion $ - $ - (a) At December 31, 2019, there was a $282,000 convertible notes with adjustable conversion prices outstanding. During the year ended December 31, 2020, the Company issued one unsecured convertible promissory note for $153,000, bearing interest at 10% per annum, and maturing in February 2021. Also, during the year ended December 31, 2020, the Company issued two unsecured convertible notes payable for $30,000, bearing interest at 10% per annum, and maturing on December 31, 2020, that were issued as loan commitment fees for notes payable. On September 9, 2020 and September 20, 2020, the Company issued two unsecured convertible promissory notes for $150,200, bearing interest at 10% to 12%, per annum, and maturing in September 2021. 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 $225,685 which were charged to interest expense at the dates of the note issuance. On April 29, 2020, the $282,000 convertible note payable was paid off. During the year ended December 31, 2020, the $153,000 note and related premium of $107,819 was fully converted into common stock. At December 31, 2020, the balance of these convertible notes was $180,200. (b) At December 31, 2019, the Company had no convertible notes outstanding with fixed conversion prices. During the eight months ended August 31, 2020, the Company issued seven convertible notes with fixed conversion prices aggregating $496,944. 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 and expenses of $531,000 to account for loan fees, beneficial conversion features ($323,000), and original issue discounts ($76,944). 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 $314,441. At December 31, 2020 the new principal totaled $811,385. On December 9, 2020, the Company executed amendments to these notes effective September 30, 2020, which extended the maturity dates and fixed the conversion price at $0.015. The Company determined that the change in the note terms resulted in old and new debt instruments that were substantially different, with the old debt being extinguished. Due to the change in conversion terms the notes also require the recognition of the beneficial conversion feature of the increased principal ($314,441 default principal) and lowering of the conversion price resulting in recognition of additional charges. Loss on debt extinguishment was charged $757,293 and debt discounts were charged $314,441 with a credit to additional paid in capital for the debt discounts. In addition $243,285 related to the unamortized discounts as originally recorded was also charged to loss on debt extinguishment for the unamortized balance of debt discounts. In addition, loss on debt extinguishment was charged $229,712 for other costs related of the extinguishment. During the three months ended December 31, 2021, the Company issued nine convertible notes with fixed conversion prices aggregating $440,000. The notes are unsecured, bear interest at 10% per annum, and mature through June 30, 2021. The notes are convertible into common stock at $0.015 per share. The Company recorded debt discounts of $43,000. On December 2, 2020 default penalties of $54,645 were declared by the note holders. The principal balance of these notes totals $494,645 at December 31, 2020. Beneficial conversion features having a value of $451,646 were also recognized with a charge to debt discount offset with a credit to additional paid in capital. 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. |
Derivative Liabilities and Fi_2
Derivative Liabilities and Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of Derivative Liabilities | At December 31, 2020 December 31, 2019 Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Derivative Liability - $ - - - $ 400,139 - |
Schedule of Level 2 Valuation Financial Instruments | A roll-forward of the level 2 valuation financial instruments is as follows: Derivative Liabilities Balance at December 31, 2018 $ - Recognition of derivative liabilities upon initial valuation 565,195 Decrease in fair market value during the year ended December 31, 2019 (19,491 ) Gain on debt extinguishment recognized upon liquidation of related convertible notes during the year ended December 31, 2019 (145,565 ) Balance at December 31, 2019 400,139 Decrease in fair market value during the year ended December 31, 2020 (101,226 ) Gain on debt extinguishment recognized upon liquidation of related convertible notes during the year ended December 31, 2020 (298,913 ) Balance at December 31, 2020 $ - |
Schedule of Fair Value Assumption of Derivative Instruments | At December 31, 2019, the derivative liabilities were valued at the following dates using a probability weighted Black-Scholes-Merton model with the following assumptions: December 31, 2019 Conversion feature: Risk-free interest rate 1.77 % Expected volatility 222 % Expected life (in years) 1 year Expected dividend yield - Fair Value: Conversion feature $ 400,139 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate | The Company had no income tax expense for the years ended December 31, 2020 December 31, 2019. The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate: Year ended Year 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, 2020 December 31, 2019 Deferred tax assets: Stock-based compensation $ 1,599,000 $ 1,039,000 Operating lease liability 111,000 94,000 Derivative expenses 173,000 67,000 Net operating loss carryforwards 2,522,000 1,132,000 Gross deferred tax assets 4,405,000 2,332,000 Less: valuation allowance (4,405,000 ) (2,103,000 ) Total deferred tax assets 282,000 229,000 Deferred tax liabilities: Depreciation 135,000 90,000 Derivative gain 46,000 46,000 Operating lease right-of-use asset 101,000 93,000 Total deferred tax liabilities 282,000 229,000 Net deferred tax asset (liability) $ - $ - |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Restricted Common Stock Activity | The following table summarizes restricted common stock activity for the years ended December 31, 2020 and 2019: Number of shares Fair value of shares Non-vested shares, December 31, 2018 - $ - Granted 8,000,000 4,000,000 Vested (2,250,000 ) (2,301,000 ) Forfeited - - Non-vested shares, December 31, 2019 5,750,000 1,699,000 Granted - - Vested (2,500,000 ) (1,268,000 ) Forfeited - - Non-vested shares, December 31, 2020 3,250,000 $ 431,000 |
Schedule of Stock Option Activity | A summary of stock option activity during the years ended December 31, 2020 and 2019: Number of options Weighted Average Contractual Options Outstanding as of December 31, 2018 - $ - - Granted 3,230,000 0.10 6.0 Exercised - - - Expired - - - 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 December 31, 2020 4,130,000 0.11 6.5 Options Exercisable as of December 31, 2020 2,956,477 $ 0.10 5.5 |
Schedule of Warrant Activity | A summary of warrant activity during the year ended December 31, 2020 and 2019 is as follows: Number of warrants Weighted Average Contractual 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 - - - Granted - - - Exercised - - - Expired - - - Warrants Outstanding and Exercisable as of December 31, 2020 - $ - - |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Policies (Details Narrative) | Dec. 21, 2020shares | Dec. 31, 2020USD ($)shares | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2020USD ($)Segmentsshares | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($)shares |
Net loss | $ (8,164,428) | $ (5,787,364) | |||||
Net cash used in operating activities | (2,118,172) | (2,221,320) | |||||
Stockholders'deficit | $ (2,608,246) | (2,608,246) | 278,940 | $ 255,414 | |||
Cash on hand | 6,270 | 6,270 | 433,143 | ||||
Issuance of convertible note payable | 275,000 | ||||||
Subscriptions to purchase, value | $ 1,263,000 | ||||||
Subscriptions to purchase, share | shares | 3,157,000 | ||||||
Reserve for raw materials, product obsolescence and packaging | $ 9,125 | $ 9,125 | |||||
Impairment of long-lived assets | |||||||
Advertising costs | 78,895 | 103,401 | |||||
Research and development costs | $ 452,443 | $ 351,670 | |||||
Options outstanding | shares | 4,130,000 | 4,130,000 | 3,230,000 | ||||
Options exercisable | shares | 2,956,477 | 2,956,477 | |||||
Accrued interest | $ 1,499,879 | ||||||
Debt conversion description | It should be noted that contractually the limitations on the third-party notes (and the related warrant) limit the number of shares converted to either 4.99% or 9.99% of the then outstanding shares. | ||||||
Derivative liability fair value | $ 565,195 | ||||||
Concentration risk percentage | 55.00% | 10.00% | 13.00% | ||||
Operating segments | Segments | 1 | ||||||
Accounts Receivable [Member] | Vendor Concentration Risk [Member] | |||||||
Concentration risk percentage | 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 | 10.00% | 10.00% | |||||
Customer One [Member] | Accounts Receivable [Member] | |||||||
Concentration risk percentage | 100.00% | 19.00% | |||||
Customer Two [Member] | Accounts Receivable [Member] | |||||||
Concentration risk percentage | 12.00% | ||||||
Common Stock [Member] | |||||||
Number of convertible common shares | shares | 97,064,539 | ||||||
Securities Exchange Agreement [Member] | Medolife Rx [Member] | |||||||
Acquisition percentage | 51.00% | ||||||
Share issued in exchange | shares | 9,000 |
Schedule of Potentially Dilutiv
Schedule of Potentially Dilutive Securities (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total | 101,194,539 | 4,179,469 |
Stock Options [Member] | ||
Total | 4,130,000 | 3,290,000 |
Warrant [Member] | ||
Total | ||
Convertible Notes Payable [Member] | ||
Total | 97,064,539 | 889,469 |
License Agreement (Details Narr
License Agreement (Details Narrative) - USD ($) | Jan. 22, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Revenues | $ 100,000 | $ 1,158,115 | $ 1,268,988 |
Distributor License Fees [Member] | |||
Revenues | $ 33,394 | $ 31,788 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Inventory reserve | $ 9,125 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials and packaging | $ 16,076 | $ 102,428 |
Finished goods | 3,144 | 20,091 |
Inventories | $ 19,220 | $ 122,519 |
Equipment (Details Narrative)
Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Depreciation expense | $ 216,696 | $ 173,902 |
Payments to acquire machinery | 103,741 | 114,500 |
Arthur G. Mikaelian [Member] | ||
Payments to acquire machinery | 592,500 | |
Machinery equipment net book value | $ 121,389 | $ 272,602 |
Equipment - Schedule of Equipme
Equipment - Schedule of Equipment (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Equipment, gross | $ 740,741 | $ 637,000 |
Less accumulated depreciation | (540,218) | (323,522) |
Equipment, net | 200,523 | 313,478 |
Machinery-technology Equipment [Member] | ||
Equipment, gross | 704,772 | 607,000 |
Machinery-technology Equipment Under Construction [Member] | ||
Equipment, gross | $ 35,969 | $ 30,000 |
Operating Leases (Details Narra
Operating Leases (Details Narrative) - USD ($) | Dec. 31, 2019 | Feb. 29, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Operating lease right-of-use asset | $ 332,980 | $ 431,402 | $ 362,227 | $ 332,980 |
Operating lease liability | $ 337,453 | 16,883 | $ 395,781 | 337,453 |
Operating lease description | At December 31, 2019, the Company had one operating lease for its headquarters office space in Burbank, California (the “First” lease). 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 “Second” lease). | |||
Lease term | 5 years | |||
Lease expenses | $ 195,509 | 107,588 | ||
Impairment of operating lease right of use asset | 255,093 | |||
Wrote of deposit | 16,769 | |||
Settlement reserve | $ 235,759 | |||
The Second lease [Member] | ||||
Rental payments | 477,822 | |||
The Second lease [Member] | Minimum [Member] | ||||
Rental payments | 90,000 | |||
The Second lease [Member] | Maximum [Member] | ||||
Rental payments | $ 101,296 |
Operating Leases - Schedule of
Operating Leases - Schedule of Lease Expense and Supplemental Cash Flow Information Related to Leases (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Leases [Abstract] | |
Operating lease cost (included in selling, general, and administrative expense in the Company's statement of operations) | $ 195,509 |
Cash paid for amounts included in the measurement of lease liabilities for 2020 | $ 92,000 |
Weighted average remaining lease term - operating leases (in years) | 3 years |
Average discount rate - operating leases | 4.00% |
Operating Leases - Schedule o_2
Operating Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) | Dec. 31, 2020 | Feb. 29, 2020 | Dec. 31, 2019 |
Leases [Abstract] | |||
Long-term right-of-use assets | $ 362,227 | $ 431,402 | $ 332,980 |
Short-term operating lease liabilities | 100,901 | 85,662 | |
Long-term operating lease liabilities | 294,880 | 251,791 | |
Total operating lease liabilities | $ 395,781 | $ 16,883 | $ 337,453 |
Operating Leases - Schedule o_3
Operating Leases - Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) | Dec. 31, 2020 | Feb. 29, 2020 | Dec. 31, 2019 |
Leases [Abstract] | |||
2021 | $ 92,700 | ||
2022 | 95,481 | ||
2023 | 98,345 | ||
2024 | 118,266 | ||
Total lease payments | 404,792 | ||
Less: Imputed interest | 9,011 | ||
Present value of lease liabilities | 395,781 | $ 16,883 | $ 337,453 |
Less current portion | (100,901) | (85,662) | |
Operating lease liabilities, long-term | $ 294,880 | $ 251,791 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Sep. 05, 2020 | May 07, 2020 | Jul. 29, 2020 | May 31, 2020 | Apr. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Notes payable | $ 505,646 | $ 505,646 | $ 934,092 | $ 55,850 | |||
Notes bear interest | 10.90% | 10.90% | |||||
Monthly interest and principal payments | $ 21,000 | $ 21,000 | |||||
Debt instrument maturity description | April 2022 and May 2022 | April 2022 and May 2022 | |||||
Principal payments | 67,366 | ||||||
Debt outstanding balance | 438,634 | ||||||
Deferred financing charges | 74,817 | ||||||
Debt discount | $ 539,282 | $ 225,000 | |||||
EID Loan [Member] | |||||||
Notes bear interest | 3.75% | ||||||
Proceeds from loans | $ 160,000 | ||||||
Monthly principal and interest payments per share | $ 0.7 | ||||||
Notes Payable [Member] | |||||||
Notes bear interest | 8.30% | ||||||
Principal payments | $ 22,500 | ||||||
Notes Payable [Member] | Third Party Investors [Member] | |||||||
Debt outstanding balance | $ 250,000 | ||||||
Proceeds from loans | $ 280,000 | ||||||
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 | ||||||
Received notice under demand of payment | $ 146,000 | ||||||
PPP Loan [Member] | |||||||
Notes bear interest | 1.00% | ||||||
Debt instrument maturity description | The loan term may be extended to April 20, 2025 | ||||||
Proceeds from loans | $ 134,125 | ||||||
Debt maturity date | May 4, 2022 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Dec. 31, 2020 | May 31, 2020 | Apr. 30, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |||||
Notes payable secured by equipment | [1] | $ 363,817 | |||
Note payable secured by assets | [2] | 33,350 | 55,850 | ||
Note payable, Payroll Protection Loan | [3] | 134,125 | |||
Note payable, Economic Injury Disaster Loan | [4] | 160,000 | |||
Revenue sharing agreement | [5] | 242,800 | |||
Total notes payable outstanding | 934,092 | $ 505,646 | $ 505,646 | 55,850 | |
Current portion | 482,724 | 55,850 | |||
Long-term portion | $ 451,368 | ||||
[1] | In April 2020 and May 2020, the Company entered into two financing agreements aggregating $505,646. The notes have a stated interest rate of 10.9%. 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 Companys equipment, and require monthly payments of principal and interest of $21,000, and mature in April 2022 and May 2022. During the year ended December 31, 2020, the Company made payments of $67,366 and at December 31, 2020, the balance due on these notes was $438,634. Deferred financing charges against these loans, included in both short term and long term aggregated $74,817 at December 31, 2020. | ||||
[2] | 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. During the year ended December 31, 2020, the company made principal payments of $22,500. The note is in default and the Company is in discussion with the note holder. | ||||
[3] | On May 7, 2020, the Company was granted a loan (the PPP loan) from Bank of America in the aggregate amount of $134,125, 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, to account for the PPP loan. The PPP loan may be prepaid at any time prior to maturity with no prepayment penalties. Funds from the PPP loan may only be used for qualifying expenses as described in the CARES Act, including qualifying payroll costs, qualifying group health care benefits, qualifying rent and debt obligations, and qualifying utilities. The Company intends to use the entire loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the loan may be forgiven if they are used for qualifying expenses. The Company intends to apply for forgiveness of the PPP loan with respect to these qualifying expenses, however, we cannot assure that such forgiveness of any portion of the PPP loan will occur. As for the potential loan forgiveness, once the PPP loan is, in part or wholly, forgiven and a legal release is received, the liability would be reduced by the amount forgiven and a gain on extinguishment would be recorded. The terms of the PPP loan provide for customary events of default including, among other things, payment defaults, breach of representations and warranties, and insolvency events. The Company was in compliance with the terms of the PPP loan as of December 31, 2020. | ||||
[4] | On September 5, 2020, the Company received a $160,000 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 December 31, 2020. | ||||
[5] | Between July 7, 2020, and July 29, 2020, the Company issued notes payable to third-party investors totaling $250,000. 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 $28,000, of discount which was fully amortized to interest expense in 2020. The Company has received a notice of default and demand for payment from three note holders (owed approximately $146,000). The Company has retained counsel who is in discussion with the note holders. See Note 13. |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) | Dec. 31, 2020USD ($) |
Debt Disclosure [Abstract] | |
Deferred finance charge | $ 74,817 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 02, 2020 | May 31, 2020 | Apr. 30, 2020 | |
Debt interest percentage | 10.90% | 10.90% | ||||
Debt face amount | $ 438,634 | $ 438,634 | ||||
Unamortized discount | 539,282 | 539,282 | $ 225,000 | |||
Amortization of debt discount | (755,538) | |||||
Debt extinguishment | 145,565 | |||||
Convertible Notes [Member] | ||||||
Unamortized discount | 539,282 | 539,282 | $ 225,000 | |||
Debt discount | 2,556,602 | |||||
Amortization of debt discount | 775,538 | |||||
Private placement cost | 381,084 | |||||
Debt extinguishment | 1,085,698 | |||||
Nine Convertible Notes Payable [Member] | ||||||
Unsecured convertible promissory note | $ 440,000 | $ 440,000 | ||||
Debt interest percentage | 10.00% | 10.00% | ||||
Debt instrument maturity date | Jun. 30, 2021 | |||||
Fixed conversion price | $ 0.015 | $ 0.015 | ||||
Debt instrument additional charges | $ 54,645 | $ 54,645 | ||||
Debt face amount | 494,645 | $ 494,645 | ||||
Unamortized discount | $ 451,646 | |||||
Debt discount | $ 43,000 |
Convertible Notes Payable - Sch
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |||
Convertible notes with fixed discount percentage conversion prices | [1] | $ 180,200 | $ 282,000 |
Put premiums on stock settled debt | 117,866 | ||
Convertible notes with fixed conversion prices | [2] | 936,944 | |
Default penalty principal added, charged to loss on debt extinguishment | 369,086 | ||
Total convertible notes principal outstanding | 1,614,096 | 282,000 | |
Debt discount | (539,282) | (225,000) | |
Convertible notes, net of discount and premium | 1,074,814 | 57,000 | |
Current portion | 1,074,814 | 57,000 | |
Long-term portion | |||
[1] | At December 31, 2019, there was a $282,000 convertible notes with adjustable conversion prices outstanding. During the year ended December 31, 2020, the Company issued one unsecured convertible promissory note for $153,000, bearing interest at 10% per annum, and maturing in February 2021. Also, during the year ended December 31, 2020, the Company issued two unsecured convertible notes payable for $30,000, bearing interest at 10% per annum, and maturing on December 31, 2020, that were issued as loan commitment fees for notes payable. On September 9, 2020 and September 20, 2020, the Company issued two unsecured convertible promissory notes for $150,200, bearing interest at 10% to 12%, per annum, and maturing in September 2021. 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 $225,685 which were charged to interest expense at the dates of the note issuance. On April 29, 2020, the $282,000 convertible note payable was paid off. During the year ended December 31, 2020, the $153,000 note and related premium of $107,819 was fully converted into common stock. At December 31, 2020, the balance of these convertible notes was $180,200. | ||
[2] | At December 31, 2019, the Company had no convertible notes outstanding with fixed conversion prices. During the eight months ended August 31, 2020, the Company issued seven convertible notes with fixed conversion prices aggregating $496,944. 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 and expenses of $531,000 to account for loan fees, beneficial conversion features ($323,000), and original issue discounts ($76,944). 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 $314,441. At December 31, 2020 the new principal totaled $811,385. |
Convertible Notes Payable - S_2
Convertible Notes Payable - Schedule of Convertible Notes Payable (Details) (Parenthetical) | Dec. 09, 2020USD ($)$ / shares | Sep. 20, 2020USD ($) | Sep. 09, 2020USD ($) | Sep. 02, 2020USD ($)Integer$ / shares | Apr. 29, 2020USD ($) | May 31, 2020USD ($) | Apr. 30, 2020USD ($) | Aug. 31, 2020USD ($)$ / shares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Convertible note outstanding | $ 438,634 | |||||||||
Debt interest percentage | 10.90% | 10.90% | ||||||||
Fixed premiums | 117,866 | |||||||||
Payments of convertible debt | 282,000 | 73,000 | ||||||||
Debt accrued interest, default interest and principal | $ 21,000 | $ 21,000 | ||||||||
Loss on debt extinguishment | (1,230,290) | |||||||||
Convertible Notes Payable [Member] | ||||||||||
Convertible note outstanding | $ 314,441 | $ 180,200 | 282,000 | |||||||
Unsecured convertible promissory note | $ 811,385 | |||||||||
Fixed premiums | 225,685 | |||||||||
Payments of convertible debt | 282,000 | |||||||||
Convertible notes | 153,000 | |||||||||
Debt converted into common stock | $ 107,819 | |||||||||
Fixed conversion price | $ / shares | $ 0.015 | |||||||||
Debt discount | $ 314,441 | 243,285 | ||||||||
Debt instrument additional charges | 811,385 | |||||||||
Loss on debt extinguishment | $ 757,293 | $ 229,712 | ||||||||
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 | |||||||||
Convertible Notes Payable [Member] | Maximum [Member] | ||||||||||
Debt conversion price percentage | 50.00% | |||||||||
One Unsecured Convertible Promissory Note [Member] | ||||||||||
Unsecured convertible promissory note | $ 153,000 | |||||||||
Debt interest percentage | 10.00% | |||||||||
Debt instrument maturity date | Feb. 28, 2021 | |||||||||
Two Convertible Promissory Note [Member] | ||||||||||
Unsecured convertible promissory note | $ 30,000 | |||||||||
Debt interest percentage | 10.00% | |||||||||
Debt instrument maturity date | Dec. 31, 2020 | |||||||||
Unsecured Convertible Promissory Note [Member] | ||||||||||
Unsecured convertible promissory note | $ 150,200 | $ 150,200 | ||||||||
Debt instrument maturity date | Sep. 30, 2021 | Sep. 30, 2021 | ||||||||
Unsecured Convertible Promissory Note [Member] | Minimum [Member] | ||||||||||
Debt interest percentage | 10.00% | 10.00% | ||||||||
Unsecured Convertible Promissory Note [Member] | Maximum [Member] | ||||||||||
Debt interest percentage | 12.00% | 12.00% | ||||||||
Seven Convertible Notes [Member] | ||||||||||
Debt interest percentage | 10.00% | |||||||||
Debt instrument maturity date | Mar. 31, 2021 | |||||||||
Convertible notes | $ 496,944 | |||||||||
Fixed conversion price | $ / shares | $ 0.05 | |||||||||
Debt discounts to account for loan fees | $ 531,000 | |||||||||
Debt beneficial conversion feature | 323,000 | |||||||||
Debt discount | $ 76,944 |
Derivative Liabilities and Fi_3
Derivative Liabilities and Financial Instruments (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative liabilities conversion features | $ 565,195 | ||
Decrease in fair value of derivatives | $ 101,226 | 19,491 | |
Gain on extiguishment debt | (1,230,290) | ||
Derivative liabilities | 400,139 | ||
Note [Member] | |||
Decrease in fair value of derivatives | 145,565 | ||
Gain on extiguishment debt | 298,913 | $ 145,565 | |
Derivative liabilities | $ 298,913 |
Derivative Liabilities and Fi_4
Derivative Liabilities and Financial Instruments - Schedule of Derivative Liability (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Derivative Liability | $ 400,139 | ||
Fair Value, Inputs, Level 1 [Member] | |||
Derivative Liability | |||
Level 2 [Member] | |||
Derivative Liability | 400,139 | ||
Fair Value, Inputs, Level 3 [Member] | |||
Derivative Liability |
Derivative Liabilities and Fi_5
Derivative Liabilities and Financial Instruments - Schedule of Level 3 Valuation Financial Instruments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Beginning balance | $ 400,139 | |
Recognition of derivative liabilities upon initial valuation | 565,195 | |
Decrease in fair market value | (101,226) | (19,491) |
Gain on debt extinguishment recognized upon liquidation of related convertible notes | (298,913) | (145,565) |
Ending balance | $ 400,139 |
Derivative Liabilities and Fi_6
Derivative Liabilities and Financial Instruments - Schedule of Fair Value Assumption of Derivative Instrument (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Fair Value: Conversion feature | $ 565,195 |
Risk Free Interest Rate [Member] | |
Conversion feature | 1.77 |
Expected Volatility [Member] | |
Conversion feature | 222 |
Expected Life [Member] | |
Conversion feature: Expected life (in years) | 1 year |
Expected Dividend Yield [Member] | |
Conversion feature | 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income tax expenses | ||
Increase in valuation allowance | 2,300,000 | 1,500,000 |
Federal, net operating loss forwards | 10,100,000 | 4,300,000 |
State, net operating loss forwards | 8,800,000 | 3,100,000 |
Unrecognized tax benefits | ||
Foreign Tax Authority [Member] | ||
Federal carryforwards, description | Expire on various dates through 2040 | |
State and Local Jurisdiction [Member] | ||
Federal carryforwards, description | Expire through 2037. |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal tax at statutory rate | 21.00% | 21.00% |
State tax, net of federal benefit | 7.00% | 7.00% |
Change in valuation allowance | (28.00%) | (28.00%) |
Effective income tax rate | 0.00% | 0.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Stock-based compensation | $ 1,599,000 | $ 1,039,000 |
Operating lease liability | 111,000 | 94,000 |
Derivative expenses | 173,000 | 67,000 |
Net operating loss carryforwards | 2,522,000 | 1,132,000 |
Gross deferred tax assets | 4,405,000 | 2,332,000 |
Less: valuation allowance | (4,405,000) | (2,103,000) |
Total deferred tax assets | 282,000 | 229,000 |
Depreciation | 135,000 | 90,000 |
Derivative gain | 46,000 | 46,000 |
Operating lease right-of-use asset | 101,000 | 93,000 |
Total deferred tax liabilities | 282,000 | 229,000 |
Net deferred tax asset (liability) |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Dec. 29, 2020 | Nov. 16, 2020 | May 31, 2020 | Apr. 14, 2020 | May 20, 2019 | Dec. 21, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 20, 2020 | Nov. 19, 2020 |
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | 100,000,000 | |||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||||||
Authorized prferred stock | 25,000,000 | 25,000,000 | |||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||||
Fair value of common stock shares issued | |||||||||||
Common stock, shares outstanding | 46,756,970 | 49,087,255 | |||||||||
Proceeds from issuance of stock | $ 125,000 | $ 2,090,375 | |||||||||
Number of shares issued for services | 2,424,121 | ||||||||||
Number of restricted common stock issued | 8,000,000 | ||||||||||
Number of restricted common stock vested | 2,500,000 | 2,250,000 | |||||||||
Number of common stock value convertible note | $ 336,179 | ||||||||||
Convertible notes principal due | |||||||||||
Number of options issued | 900,000 | 3,230,000 | |||||||||
Options exercise price | $ 0.11 | $ 0.10 | |||||||||
Restricted Stock [Member] | |||||||||||
Stock-based compensation related to grants of restricted stock | $ 1,267,720 | $ 2,317,868 | |||||||||
Number of restricted common stock issued | 8,000,000 | ||||||||||
Number of restricted common stock vested | 1,000,000 | 4,750,000 | |||||||||
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 | |||||||||
Fair value of restricted common stock | $ 4,000,000 | ||||||||||
Unvested compensation | $ 431,411 | ||||||||||
Options vesting term | 2 years 9 months 18 days | 1 year 4 months 24 days | |||||||||
Stock Options [Member] | |||||||||||
Stock-based compensation related to grants of restricted stock | $ 290,132 | $ 711,404 | |||||||||
Restricted common stock vesting term | 24 months | ||||||||||
Unvested compensation | $ 300,000 | ||||||||||
Number of options issued | 900,000 | 3,290,000 | |||||||||
Options exercise price | $ 0.10 | $ 0.23 | |||||||||
Number of options vested | 600,000 | ||||||||||
Number of options non vested | 300,000 | ||||||||||
Options vesting term | 24 months | ||||||||||
Fair value of options | $ 85,000 | ||||||||||
Stock price | $ 0.14 | ||||||||||
Expected term | 5 years | ||||||||||
Volatility | 236.00% | ||||||||||
Dividend rate | 0.00% | ||||||||||
Risk-free interest rate | 0.17% | ||||||||||
Minimum [Member] | Stock Options [Member] | |||||||||||
Options exercise price | $ 0.10 | ||||||||||
Maximum [Member] | Stock Options [Member] | |||||||||||
Options exercise price | $ 0.14 | ||||||||||
Common Stock [Member] | |||||||||||
Number of common stock shares issued | 5,000,000 | 612,000 | |||||||||
Fair value of common stock shares issued | $ 5,000 | $ 612 | |||||||||
Number of shares issued for services | 213 | ||||||||||
Fair value of shares issued for services | $ 212,505 | ||||||||||
Number of common stock shares secure financing | 1,127,522 | ||||||||||
Number of common stock value secure financing | $ 105,408 | ||||||||||
Number of common stock shares convertible note | 6,885,019 | ||||||||||
Number of common stock value convertible note | $ 6,885 | ||||||||||
Common Stock [Member] | Convertible Notes Payable [Member] | |||||||||||
Number of common stock shares convertible note | 6,885,019 | ||||||||||
Number of common stock value convertible note | $ 336,179 | ||||||||||
Beneficial conversion feature | $ 2,480,738 | ||||||||||
Warrants [Member] | |||||||||||
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 | ||||||||||
Private Placement [Member] | |||||||||||
Number of common stock shares issued | 407,408 | ||||||||||
Fair value of common stock shares issued | 2,926,375 | ||||||||||
Shares issued, price per share | $ 0.26 | ||||||||||
Proceeds from issuance of stock | $ 125,000 | ||||||||||
Private Placement [Member] | 2019 Shares [Member] | |||||||||||
Fair value of common stock shares issued | 2,090,375 | ||||||||||
Private Placement [Member] | Subscribed Shares [Member] | |||||||||||
Fair value of common stock shares issued | 530,000 | ||||||||||
Private Placement [Member] | 2018 Shares [Member] | |||||||||||
Fair value of common stock shares issued | $ 306,000 | ||||||||||
Private Placement [Member] | Minimum [Member] | |||||||||||
Shares issued, price per share | $ 0.10 | ||||||||||
Private Placement [Member] | Maximum [Member] | |||||||||||
Shares issued, price per share | $ 0.50 | ||||||||||
Private Placement [Member] | Common Stock [Member] | |||||||||||
Number of common stock shares issued | 12,011,269 | 6,942,750 | |||||||||
Number of shares to be issued | 68,519 | ||||||||||
Eric Rice [Member] | |||||||||||
Common stock, shares outstanding | 1,000,000 | ||||||||||
Cancellation of common stock | 16,951,432 | 17,030,032 | |||||||||
Eric Rice [Member] | Common Stock [Member] | |||||||||||
Common stock, shares outstanding | 18,030,032 | ||||||||||
Employees and Officers [Member] | |||||||||||
Number of stock issued for compensation | 451,198 | ||||||||||
Number of stock issued for compensation, value | $ 71,001 | ||||||||||
Stock-based compensation related to grants of restricted stock | $ 1,267,720 | ||||||||||
Vendors [Member] | |||||||||||
Number of shares issued for services | 750,000 | ||||||||||
Fair value of shares issued for services | $ 60,200 | ||||||||||
Series A Preferred Stock [Member] | |||||||||||
Authorized prferred stock | 2,500,000 | ||||||||||
Preferred stock, par value | $ 0.001 | ||||||||||
Preferred stock, shares outstanding | 2,500,000 | 0 | |||||||||
Voting Percentage | 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] | Private Placement [Member] | |||||||||||
Number of common stock shares issued | 2,500,000 | ||||||||||
Fair value of common stock shares issued | $ 465,000 | ||||||||||
Series A Preferred Stock [Member] | Eric Rice [Member] | Control Block Transfer Agreement [Member] | |||||||||||
Voting Percentage | 51.00% | ||||||||||
Number of common stock shares issued | 2,500,000 | ||||||||||
Series B Preferred Stock [Member] | Securities Exchange Agreement [Member] | Medolife Rx, Inc [Member] | |||||||||||
Number of common stock shares issued | 9,000 | ||||||||||
Equity ownership percentage | 51.00% | ||||||||||
Preferred stock conversion description | Dr. Mikaelian's 9,000 shares of Series B Convertible Preferred Stock are convertible into fifty-four percent (54%) of the issued and outstanding shares of the Company's common stock on a fully converted basis. |
Stockholders' Deficit - Summary
Stockholders' Deficit - Summary of Restricted Common Stock Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Non-vested shares, Beginning balance | 5,750,000 | |
Non-vested shares, Granted | 8,000,000 | |
Non-vested shares, Vested | (2,500,000) | (2,250,000) |
Non-vested shares, Forfeited | ||
Non-vested shares, Ending balance | 3,250,000 | 5,750,000 |
Fair value of non-vested shares, Beginning balance | $ 1,699,000 | |
Fair value of non-vested shares, Granted | 4,000,000 | |
Fair value of non-vested shares, Vested | (1,268,000) | (2,301,000) |
Fair value of non-vested shares, Forfeited | ||
Fair value of non-vested shares, Ending balance | $ 431,000 | $ 1,699,000 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Stock Option Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Number of Options Outstanding, Beginning | 3,230,000 | |
Number of Options Outstanding, Granted | 900,000 | 3,230,000 |
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 | 2,956,477 | |
Options Outstanding, Weighted average exercise price, Beginning | $ 0.10 | |
Options Outstanding, Granted, Weighted average exercise price | 0.11 | 0.10 |
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 | |
Options Outstanding, Contractual Life, Beginning | 6 years | 0 years |
Options Outstanding, Granted, Contractual Life | 10 years | 6 years |
Options Outstanding, Exercised, Contractual Life | 0 years | 0 years |
Options Outstanding, Expired, Contractual Life | 0 years | 0 years |
Options Outstanding, Contractual Life, Ending | 6 years 6 months | 6 years |
Options Exercisable, Contractual Life | 5 years 6 months |
Stockholders' Deficit - Sched_2
Stockholders' Deficit - Schedule of Warrant Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Number of warrants outstanding begining balance | 3,000,000 | |
Number of warrants outstanding, Granted | ||
Number of warrants outstanding, Exercised | (3,000,000) | |
Number of warrants outstanding, Expired | ||
Number of warrants outstanding,ending balance | ||
Weighted average exercise price begining balance | $ 0.30 | |
Weighted average exercise price, Granted | ||
Weighted average exercise price, Exercised | 0.30 | |
Weighted average exercise price, Expired | ||
Weighted average exercise price, ending balance | ||
Warrants outstanding and Exercisable contractual life in years, Beginning | 4 years |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 3 Months Ended | ||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Concentration risk percentage | 55.00% | 10.00% | 13.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Dec. 21, 2020 | Nov. 16, 2020 | Nov. 15, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 14, 2021 |
Royalty | $ 420,000 | $ 343,000 | ||||
Series A Super Voting Preferred Stock [Member] | ||||||
Acquisition percentage | 51.00% | |||||
Mr. Philip Sands [Member] | ||||||
Officers compensation | $ 8,000 | |||||
Mr. Rice [Member] | Series A Super Voting Preferred Stock [Member] | ||||||
Number of shares transfered | 2,500,000 | |||||
Securities Exchange Agreement [Member] | Medolife Rx [Member] | ||||||
Acquisition percentage | 51.00% | |||||
Share issued in exchange | 9,000 | |||||
Payment in advance for acquisition transaction | 235,000 | |||||
Balance due | $ 134,704 | |||||
Securities Exchange Agreement [Member] | Medolife Rx [Member] | Subsequent Event [Member] | ||||||
Acquisition percentage | 51.00% | |||||
Securities Exchange Agreement [Member] | Dr. Mikaelian [Member] | ||||||
Royalty percentage | 25.00% | |||||
Royalty | $ 35,000 | |||||
Number of common stock shares issued | 8,000,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Feb. 12, 2021 | Feb. 11, 2021 | Jan. 31, 2021 | Jan. 14, 2021 | Jan. 12, 2021 | Jan. 02, 2021 | Feb. 28, 2021 | Jan. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 05, 2021 | Jan. 13, 2021 | May 31, 2020 | Apr. 30, 2020 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | ||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||||||||
Debt face amount | $ 438,634 | |||||||||||||
Cash received for issuance of common stock | 125,000 | $ 2,090,375 | ||||||||||||
Number of shares issued for services | 2,424,121 | |||||||||||||
Original issue discount | $ 539,282 | $ 225,000 | ||||||||||||
Debt interest percentage | 10.90% | 10.90% | ||||||||||||
Debt conversion description | It should be noted that contractually the limitations on the third-party notes (and the related warrant) limit the number of shares converted to either 4.99% or 9.99% of the then outstanding shares. | |||||||||||||
Convertible Notes [Member] | ||||||||||||||
Original issue discount | $ 539,282 | $ 225,000 | ||||||||||||
Common Stock [Member] | ||||||||||||||
Number of common stock shares issued | 5,000,000 | 612,000 | ||||||||||||
Number of shares issued for services | 213 | |||||||||||||
Subsequent Event [Member] | Convertible Notes [Member] | ||||||||||||||
Debt face amount | $ 303,000 | $ 303,000 | ||||||||||||
Original issue discount | $ 175,000 | $ 175,000 | ||||||||||||
Debt instrument maturity date | Aug. 31, 2021 | |||||||||||||
Debt interest percentage | 10.00% | 10.00% | ||||||||||||
Conversion price per share | $ 0.015 | $ 0.015 | ||||||||||||
Subsequent Event [Member] | Convertible Note Payable [Member] | ||||||||||||||
Debt face amount | $ 25,000 | |||||||||||||
Debt instrument maturity date | Feb. 11, 2022 | |||||||||||||
Debt interest percentage | 12.00% | |||||||||||||
Subsequent Event [Member] | Common Stock [Member] | ||||||||||||||
Number of common stock shares issued | 31,575,000 | |||||||||||||
Cash received for issuance of common stock | $ 1,263,000 | |||||||||||||
Number of shares issued for services | 6,500,000 | 6,500,000 | ||||||||||||
Common shares issued to convertible notes | 20,082,369 | |||||||||||||
Subsequent Event [Member] | Product Revenue Loan Agreements [Member] | ||||||||||||||
Debt face amount | $ 153,300 | |||||||||||||
Subsequent Event [Member] | Medolife Rx, Inc [Member] | ||||||||||||||
Equity ownership percentage | 51.00% | |||||||||||||
Subsequent Event [Member] | Series B Convertible Preferred Stock [Member] | ||||||||||||||
Preferred stock, shares authorized | 9,000 | |||||||||||||
Common stock issued and outstanding percentage | 54.00% | |||||||||||||
Preferred stock, conversion description | Series C Convertible shares have a par value of $0.00001 per share and a stated value of $100 per share (the "Stated Value") and each Series C Preferred Share shall be convertible into 6,750 shares of Common Stock ("Conversion Ratio"), at the option of a Holder, at any time and from time to time, from and after the issuance of the Series C Preferred Stock; provided that, for a period of twenty for (24) months from the Issuance Date, if the Company issues shares of common stock, including common stock as the result of the purchase, exercise or conversion of outstanding derivative or convertible securities (or securities, including any derivative securities, containing the right to purchase, exercise or convert into shares of common stock) (the "Dilution Shares") such that the outstanding number of shares of common stock on a fully diluted basis shall be greater than 112,500,000 shares (inclusive of conversions of Series C Preferred Stock at the Conversion Ratio immediately above), then the Conversion Ratio for the Series C Preferred Stock then outstanding and unconverted as of the date the Dilution Shares are issued shall be adjusted to equal the Conversion Ratio multiplied by a fraction, the numerator of which shall be the number of shares outstanding on a fully diluted basis after the issuance of the Dilution Shares, and the denominator shall be 112,500,000. Subject to the beneficial ownership limitations of 9.99%, set forth in Section 5 (b) of the attached Series C Convertible Preferred Stock Certificate of Designation, each holder of the Series C Preferred Stock shall have the right to vote on any matter that may from time to time be submitted to the Company's shareholders for a vote, on an as converted basis, either by written consent or by proxy. | |||||||||||||
Subsequent Event [Member] | Series C Convertible Preferred Stock [Member] | ||||||||||||||
Preferred stock, shares authorized | 1,000 | 1,000 | ||||||||||||
Equity ownership percentage | 9.99% | |||||||||||||
Conversion of shares into common stock | 6,750 | |||||||||||||
Preferred stock, conversion description | Each share of Series B Preferred Stock shall be convertible into 6,750 shares of Common Stock (“Conversion Ratio”), at the option of a Holder, at any time and from time to time, from and after the issuance of the Series B Preferred Stock; provided that, for a period of 24 months from the Issuance Date, if the Company issues shares of common stock, including common stock as the result of the purchase, exercise or conversion of outstanding derivative or convertible securities (or securities, including any derivative securities, containing the right to purchase, exercise or convert into shares of common stock) (the “Dilution Shares”) such that the outstanding number of shares of common stock on a fully diluted basis shall be greater than 112,500,000. | |||||||||||||
Preferred stock, par value | $ 0.00001 | |||||||||||||
Stated value per share | $ 100 | |||||||||||||
Subsequent Event [Member] | Series C Convertible Preferred Stock [Member] | Trillium Partners LP [Member] | ||||||||||||||
Number of common stock shares issued | 500 | |||||||||||||
Subsequent Event [Member] | Series C Convertible Preferred Stock [Member] | Sagittarii Holdings, Inc [Member] | ||||||||||||||
Number of common stock shares issued | 500 |