Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 17, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | EDISON NATION, INC. | |
Entity Central Index Key | 0001717556 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 10,683,291 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 1,762,337 | $ 412,719 |
Accounts receivable, net | 3,086,195 | 2,108,099 |
Inventory | 1,190,998 | 1,369,225 |
Prepaid expenses and other current assets | 1,884,542 | 917,433 |
Income tax receivable | 147,889 | 147,889 |
Total current assets | 8,071,961 | 4,955,365 |
Property and equipment, net | 932,027 | 931,968 |
Right of use assets, net | 578,280 | 732,100 |
Intangible assets, net | 11,047,515 | 11,598,063 |
Goodwill | 5,392,123 | 5,392,123 |
Total assets | 26,021,906 | 23,609,619 |
Current liabilities: | ||
Accounts payable | 3,047,197 | 7,397,650 |
Accrued expenses and other current liabilities | 1,704,484 | 1,594,669 |
Deferred revenues | 1,061,989 | 159,591 |
Current portion of operating leases liabilities | 279,427 | 272,215 |
Income tax payable | 8,446 | 22,919 |
Line of credit, net of debt issuance costs of $0 and $15,573, respectively | 2,151,108 | 456,995 |
Current portion of convertible notes payable, net of debt issuance costs of $535,235 | 900,765 | |
Current portion of notes payable, net of debt issuance costs of $86,349 and $212,848, respectively | 970,710 | 1,365,675 |
Current portion of notes payable - related parties | 1,166,365 | 1,686,352 |
Due to related party | 26,784 | 17,253 |
Total current liabilities | 11,317,275 | 12,973,319 |
Operating leases liabilities -net of current portion | 326,482 | 482,212 |
Convertible notes payable - related parties, net of current portion, net of debt discount of $316,667 and $366,666, respectively | 1,111,495 | 1,061,495 |
Notes payable, net of current portion | 825,004 | 42,492 |
Notes payable - related parties, net of current portion | 1,501,148 | 1,595,669 |
Total liabilities | 15,081,404 | 16,155,187 |
Stockholders' equity | ||
Preferred stock, $0.001 par value, 30,000,000 shares authorized; 0 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively | ||
Common stock, $0.001 par value, 250,000,000 shares authorized; 9,618,401 and 8,015,756 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively | 9,618 | 8,016 |
Additional paid-in-capital | 30,802,083 | 26,259,575 |
Accumulated deficit | (18,850,350) | (18,495,461) |
Total stockholders' equity attributable to Edison Nation, Inc. | 11,961,351 | 7,772,130 |
Noncontrolling interests | (1,020,849) | (317,698) |
Total stockholders' equity | 10,940,502 | 7,454,432 |
Total liabilities and stockholders' equity | $ 26,021,906 | $ 23,609,619 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Preferred stock, par or stated value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 30,000,000 | 30,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par or stated value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares, issued | 9,618,401 | 8,015,756 |
Common stock, shares, outstanding | 9,618,401 | 8,015,756 |
Convertible Notes Payable [Member] | ||
Debt issuance costs, net | $ 535,235 | $ 535,235 |
Notes Payable [Member] | ||
Debt issuance costs, net | 86,349 | 212,848 |
Convertible Notes Payable - Related Parties [Member] | ||
Debt issuance costs, net | 316,667 | 366,666 |
Line of Credit [Member] | ||
Debt issuance costs, net | $ 0 | $ 15,573 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenues, net | $ 6,880,026 | $ 5,968,255 | $ 10,547,136 | $ 11,706,789 |
Cost of revenues | 4,889,784 | 3,924,252 | 7,308,196 | 7,869,810 |
Gross profit | 1,990,242 | 2,044,003 | 3,283,940 | 3,836,979 |
Operating expenses: | ||||
Selling, general and administrative | 2,770,930 | 3,392,596 | 6,963,643 | 6,441,784 |
Operating loss | (780,688) | (1,348,593) | (3,724,703) | (2,604,805) |
Other (expense) income: | ||||
Rental income | 25,703 | 25,703 | 51,407 | 51,407 |
Interest expense | (847,154) | (401,170) | (1,571,111) | (525,864) |
Gain on divestiture | 4,911,760 | |||
Total other (expense) income | (821,451) | (375,467) | 3,392,056 | (474,457) |
Loss before income taxes | (1,602,139) | (1,724,060) | (332,647) | (3,079,262) |
Income tax expense | 51,005 | 74,200 | ||
Net loss | (1,602,139) | (1,775,065) | (332,647) | (3,153,462) |
Net income (loss) attributable to noncontrolling interests | 22,241 | (39,648) | 22,241 | 17,245 |
Net loss attributable to Edison Nation, Inc. | $ (1,624,380) | $ (1,735,417) | $ (354,888) | $ (3,170,707) |
Net loss per share: | ||||
Net loss per share - basic and diluted | $ (0.18) | $ (0.30) | $ (0.04) | $ (0.55) |
Weighted average number of common shares outstanding - basic and diluted | 8,920,554 | 5,702,693 | 8,551,012 | 5,682,150 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Noncontrolling Interest [Member] | Total |
Balance at Dec. 31, 2018 | $ 5,655 | $ 20,548,164 | $ (5,565,756) | $ 951,576 | $ 15,939,639 |
Balance, shares at Dec. 31, 2018 | 5,654,830 | ||||
Issuance of common stock to note holders | $ 50 | 173,250 | 173,300 | ||
Issuance of common stock to note holders, shares | 50,000 | ||||
Issuance of common stock to vendors for services | $ 33 | 141,092 | 141,125 | ||
Issuance of common stock to vendors for services, shares | 33,000 | ||||
Stock-based compensation | 274,406 | 274,406 | |||
Net (loss) income | (3,170,707) | 17,245 | (3,153,462) | ||
Balance at Jun. 30, 2019 | $ 5,738 | 21,136,912 | (8,736,463) | 968,821 | 13,375,008 |
Balance, shares at Jun. 30, 2019 | 5,737,830 | ||||
Balance at Mar. 31, 2019 | $ 5,680 | 20,859,158 | (7,001,046) | 1,008,469 | 14,872,261 |
Balance, shares at Mar. 31, 2019 | 5,680,330 | ||||
Issuance of common stock to note holders | $ 35 | 99,165 | 99,200 | ||
Issuance of common stock to note holders, shares | 35,000 | ||||
Issuance of common stock to vendors for services | $ 23 | 88,602 | 88,625 | ||
Issuance of common stock to vendors for services, shares | 22,500 | ||||
Stock-based compensation | 89,987 | 89,987 | |||
Net (loss) income | (1,735,417) | (39,648) | (1,775,065) | ||
Balance at Jun. 30, 2019 | $ 5,738 | 21,136,912 | (8,736,463) | 968,821 | 13,375,008 |
Balance, shares at Jun. 30, 2019 | 5,737,830 | ||||
Balance at Dec. 31, 2019 | $ 8,016 | 26,259,576 | (18,495,462) | (317,698) | 7,454,432 |
Balance, shares at Dec. 31, 2019 | 8,015,756 | ||||
Issuance of common stock to note holders | $ 439 | 789,575 | 790,014 | ||
Issuance of common stock to note holders, shares | 439,400 | ||||
Issuance of common stock to consultants | $ 866 | 561,896 | 562,762 | ||
Issuance of common stock to consultants, shares | 866,250 | ||||
Returned common stock from noteholder | $ (153) | 153 | |||
Returned common stock from noteholder, shares | (153,005) | ||||
Issuance of common stock for divestiture | $ 150 | 404,850 | 405,000 | ||
Issuance of common stock for divestiture, shares | 150,000 | ||||
Issuance of warrants to noteholders and beneficial conversion option | 1,018,953 | 1,018,953 | |||
Stock-based compensation | 1,068,380 | 1,068,380 | |||
Issuance of common stock for Global Clean Solutions, LLC acquisition | $ 300 | 698,700 | 699,000 | ||
Issuance of common stock for Global Clean Solutions, LLC acquisition | 300,000 | ||||
Divestiture of Cloud B | (26,392) | (26,392) | |||
Distributions | (699,000) | (699,000) | |||
Net (loss) income | (354,888) | 22,241 | (332,647) | ||
Balance at Jun. 30, 2020 | $ 9,618 | 30,802,083 | (18,850,350) | (1,020,849) | 10,940,502 |
Balance, shares at Jun. 30, 2020 | 9,618,401 | ||||
Balance at Mar. 31, 2020 | $ 8,677 | 28,790,704 | (17,225,970) | (344,090) | 11,229,321 |
Balance, shares at Mar. 31, 2020 | 8,676,501 | ||||
Issuance of common stock to note holders | $ 279 | 588,411 | 588,690 | ||
Issuance of common stock to note holders, shares | 279,400 | ||||
Issuance of common stock to consultants | $ 212 | (212) | |||
Issuance of common stock to consultants, shares | 212,500 | ||||
Issuance of common stock for divestiture | $ 150 | 404,850 | 405,000 | ||
Issuance of common stock for divestiture, shares | 150,000 | ||||
Stock-based compensation | 319,630 | 319,630 | |||
Issuance of common stock for Global Clean Solutions, LLC acquisition | $ 300 | 698,700 | 699,000 | ||
Issuance of common stock for Global Clean Solutions, LLC acquisition | 300,000 | ||||
Distributions | (699,000) | (699,000) | |||
Net (loss) income | (1,624,380) | 22,241 | (1,602,139) | ||
Balance at Jun. 30, 2020 | $ 9,618 | $ 30,802,083 | $ (18,850,350) | $ (1,020,849) | $ 10,940,502 |
Balance, shares at Jun. 30, 2020 | 9,618,401 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash Flow from Operating Activities | ||
Net loss attributable to Edison Nation, Inc. | $ (354,888) | $ (3,170,707) |
Net income attributable to noncontrolling interests | 22,241 | 17,245 |
Net loss | (332,647) | (3,153,462) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 612,406 | 633,570 |
Amortization of financing costs | 1,227,046 | 391,223 |
Stock-based compensation | 1,588,427 | 708,490 |
Amortization of right of use asset | 153,820 | 155,408 |
Gain on divestiture | (4,911,760) | |
Changes in assets and liabilities: | ||
Accounts receivable | (978,097) | (1,215,155) |
Inventory | 178,227 | (336,544) |
Prepaid expenses and other current assets | (967,109) | (561,331) |
Accounts payable | (344,847) | 1,191,252 |
Accrued expenses and other current liabilities | 1,425,622 | 480,928 |
Operating lease liabilities | (148,518) | (144,132) |
Due from related party | 9,532 | (65,600) |
Net cash used in operating activities | (2,487,898) | (1,915,353) |
Cash Flows from Investing Activities | ||
Purchases of property and equipment | (61,917) | (106,770) |
Net cash used in investing activities | (61,917) | (106,770) |
Cash Flows from Financing Activities | ||
Borrowings under lines of credit, net | 1,678,540 | 240,000 |
Borrowings under convertible notes payable | 1,436,000 | 1,111,111 |
Borrowings under notes payable | 1,767,352 | 1,110,000 |
Repayments under lines of credit | (31,542) | |
Repayments under notes payable | (824,472) | (566,710) |
Repayments under notes payable - related parties | (14,508) | (40,997) |
Fees paid for financing costs | (143,479) | (427,411) |
Net cash provided by financing activities | 3,899,433 | 1,394,451 |
Net increase (decrease) in cash and cash equivalents | 1,349,618 | (627,672) |
Cash and cash equivalents - beginning of period | 412,719 | 2,052,731 |
Cash and cash equivalents - end of period | 1,762,337 | 1,425,059 |
Supplemental Disclosures of Cash Flow Information | ||
Interest | 144,740 | 74,908 |
Income taxes | 235,725 | |
Noncash investing and financing activity: | ||
Shares issued to note holders | 173,300 | |
Conversion under notes payable | $ 424,000 |
Basis of Presentation and Natur
Basis of Presentation and Nature of Operations | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Nature of Operations | Note 1 — Basis of Presentation and Nature of Operations The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and with Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2020 and the results of operations, changes in stockholders’ equity, and cash flows for the periods presented. The results of operations for the six and three months ended June 30, 2020 are not necessarily indicative of the operating results for the full fiscal year or any future period. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The Company’s accounting policies are described in the Notes to Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2019, and updated, as necessary, in this Quarterly Report on Form 10-Q. As used herein, the terms the “Company,” “Edison Nation” “we,” “us,” “our” and similar refer to Edison Nation, Inc., a Nevada corporation incorporated on July 18, 2017 under the laws of the State of Nevada as Idea Lab X Products, Inc. and also formerly known as Xspand Products Lab, Inc. prior to its name change on September 12, 2018, and/or its wholly-owned and majority-owned operating subsidiaries, and/or where applicable, its management. Edison Nation is a vertically-integrated, end-to-end, consumer product research & development, manufacturing, sales and fulfillment company. The Company’s proprietary web-enabled platform provides a low risk, high reward platform and process to connect innovators of new product ideas with potential licensees. As of June 30, 2020, Edison Nation, Inc. had six wholly-owned subsidiaries: S.R.M. Entertainment Limited (“SRM”), Scalematix, LLC (“Scalematix”), Ferguson Containers, Inc. (“Fergco”), CBAV1, LLC (“CB1”), Pirasta, LLC (“Pirasta”) and Edison Nation Holdings, LLC. Edison Nation, Inc. owns 50% of Best Party Concepts, LLC, Ed Roses, LLC and Global Clean Solutions, LLC, all of which are VIE’s. Edison Nation Holdings, LLC is the single member of Edison Nation, LLC and Everyday Edisons, LLC. Edison Nation, LLC is the single member of Safe TV Shop, LLC. COVID-19 COVID-19 has caused and continues to cause significant loss of life and disruption to the global economy, including the curtailment of activities by businesses and consumers in much of the world as governments and others seek to limit the spread of the disease, and through business and transportation shutdowns and restrictions on people’s movement and congregation. As a result of the pandemic, we have experienced, and continue to experience, weakened demand for our traditional products. Many of our customers have been unable to sell our products in their stores and theme parks due to government-mandated closures and have deferred or significantly reduced orders for our products. We expect these trends to continue until such closures are significantly curtailed or lifted. In addition, the pandemic has reduced foot traffic in the stores where our products are sold that remain open, and the global economic impact of the pandemic has temporarily reduced consumer demand for our products as they focus on purchasing essential goods. In the United States and Asia, many of our key accounts remain closed or are operating at significantly reduced volumes. As a result, we have made the strategic decision to expand our operations through our Edison Nation Medical (“Ed Med”) division. Through Ed Med, the Company wholesales Personal Protective Equipment (“PPE”) products and proprietary branded hand sanitizer through an online portal for hospitals, government agencies and distributors. Given these factors, the Company anticipates that the greatest impact from the COVID-19 pandemic in fiscal 2020 occurred in the first quarter of 2020 and resulted in a net sales decline as compared to the first quarter of 2019. In addition, certain of our suppliers and the manufacturers of certain of our products were adversely impacted by COVID-19. As a result, we faced delays or difficulty sourcing products, which negatively affected our business and financial results. Even if we are able to find alternate sources for such products, they may cost more and cause delays in our supply chain, which could adversely impact our profitability and financial condition. We have taken actions to protect our employees in response to the pandemic, including closing our corporate offices and requiring our office employees to work from home. At our distribution centers, certain practices are in effect to safeguard workers, including a staggered work schedule, and we are continuing to monitor direction from local and national governments carefully. Additionally, our two retail locations have been closed until further notice. As a result of the impact of COVID-19 on our financial results, and the anticipated future impact of the pandemic, we have implemented cost control measures and cash management actions, including: ● Furloughing a significant portion of our employees; and ● Implementing 20% salary reductions across our executive team and other members of upper level management; and ● Executing reductions in operating expenses, planned inventory levels and non-product development capital expenditures; and ● Proactively managing working capital, including reducing incoming inventory to align with anticipated sales. Liquidity For the six months ended June 30, 2020, our operations lost approximately $3,700,000, of which approximately $2,200,000 was non-cash and approximately $366,000 was related to transaction costs and restructuring charges for payroll and rents. At June 30, 2020, we had total current assets of $8,071,961 and current liabilities of $11,317,275 resulting in negative working capital of $3,245,314, of which $1,166,365 was related party notes payable. At June 30, 2020, we had total assets of $26,021,906 and total liabilities of $15,081,404 resulting in stockholders’ equity of $10,940,502. The foregoing factors raise substantial doubt about the Company’s ability to continue as a going concern for at least the next twelve months from the date of issuance of these condensed consolidated financial statements. The ability to continue as a going concern is dependent upon the Company’s ability to attract significant new sources of capital, attain a reasonable threshold of operating efficiencies and achieve profitable operations from the sale of its products. The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The following is additional information on our operating losses and working capital: The Company’s operating loss for the six months ended June 30, 2020 included $3,600,000 related to depreciation, amortization (including amortization for financing costs and right of use asset) and stock-based compensation. In addition, approximately $366,000 was related to transaction costs, restructuring charges and other non-recurring and redundant costs which are being removed or reduced. Management has considered possible mitigating factors within our management plans on our ability to continue for at least a year from the date these financial statements are filed. The following items are management plans to alleviate any going concern issues for at least the next twelve months from the date these condensed consolidated financial statements are available: ● Subsequent to June 30, 2020, the Company borrowed $200,000 through a loan agreement and received $250,000 through the exercise of a warrant. ● Raise further capital through the sale of addition equity. ● Borrow money under debt securities. ● The deferral of payments to related party debt holders for both principal of $2,667,513 and related interest expense. ● Annual cost saving initiatives related to synergies and the elimination of redundant costs of approximately $1,500,000. ● Possible sale of certain brands to other manufacturers. ● Edison Nation Medical’s procurement of Personal Protective Equipment (“PPE”) and hand sanitizers and the subsequent sale of PPE items and hand sanitizers to governmental agencies, educational facilities, medical facilities and distributors. ● Entry into joint ventures or total/partial acquisitions of operational entities to expand the sale of PPE and proprietary hand sanitizer through Edison Nation Medical. Our operating needs include the planned costs to operate our business, including amounts required to fund working capital and capital expenditures. Our future capital requirements and the adequacy of our available funds will depend on many factors, including our ability to successfully commercialize our products and services, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement our product and service offerings. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 — Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of Edison Nation, Inc. and its wholly-owned and majority owned subsidiaries. Variable Interest Entity Assessment A VIE is an entity (a) that has total equity at risk that is not sufficient to finance its activities without additional subordinated financial support from other entities, (b) where the group of equity holders does not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance, or the obligation to absorb the entity’s expected losses or the right to receive the entity’s expected residual returns, or both, or (c) where the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. In order to determine if an entity is considered a VIE, the Company first performs a qualitative analysis, which requires certain subjective decisions regarding its assessments, including, but not limited to, the design of the entity, the variability that the entity was designed to create and pass along to its interest holders, the rights of the parties, and the purpose of the arrangement. If the Company cannot conclude after a qualitative analysis whether an entity is a VIE, it performs a quantitative analysis. The qualitative analysis considered the design of the entity, the risks that cause variability, the purpose for which the entity was created, and the variability that the entity was designed to pass along to its variable interest holders. Use of Estimates Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the financial statements. The Company’s significant estimates used in these financial statements include, but are not limited to, accounts receivable reserves, the valuation allowance related to the Company’s deferred tax assets, the recoverability and useful lives of long-lived assets, debt conversion features, stock-based compensation, certain assumptions related to the valuation of the reserved shares and the assets acquired and liabilities assumed related to the Company’s acquisitions. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates. Cash and Cash Equivalents The Company has cash on deposit in several financial institutions which, at times, may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company has not experienced losses in such accounts and periodically evaluates the creditworthiness of its financial institutions. The Company reduces its credit risk by placing its cash and cash equivalents with major financial institutions. The Company had approximately $928,000 not covered by FDIC insurance limits as of June 30, 2020 of which approximately $113,000 was held in foreign bank accounts. Accounts Receivable As of June 30, 2020, the following customer represented more than 10% of total accounts receivable: June 30, 2020 Customer: Customer A 14 % Inventory Inventory is recorded at the lower of cost or net realizable value on a first-in, first-out basis. The Company reduces the carrying value of inventories for those items that are potentially excess, obsolete, or slow moving based on changes in customer demand, technology developments, or other economic factors. Revenue Recognition Generally, the Company considers all revenues as arising from contracts with customers. Revenue is recognized based on the five-step process outlined in the Accounting Standards Codification (“ASC”) 606: Step 1 – Identify the Contract with the Customer – A contract exists when (a) the parties to the contract have approved the contract and are committed to perform their respective obligations, (b) the entity can identify each party’s rights regarding the goods or services to be transferred, (c) the entity can identify the payment terms for the goods or services to be transferred, (d) the contract has commercial substance and it is probably that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Step 2 – Identify Performance Obligations in the Contract – Upon execution of a contract, the Company identifies as performance obligations each promise to transfer to the customer either (a) goods or services that are distinct, or (b) a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. To the extent a contract includes multiple promised goods or services, the Company must apply judgement to determine whether the goods or services are capable of being distinct within the context of the contract. If these criteria are not met, the goods or services are accounted for as a combined performance obligation. Step 3 – Determine the Transaction Price – When (or as) a performance obligation is satisfied, the Company shall recognize as revenue the amount of the transaction price that is allocated to the performance obligation. The contract terms are used to determine the transaction price. Generally, all contracts include fixed consideration. If a contract did include variable consideration, the Company would determine the amount of variable consideration that should be included in the transaction price based on expected value method. Variable consideration would be included in the transaction price, if in the Company’s judgement, it is probable that a significant future reversal of cumulative revenue under the contract would not occur. Step 4 – Allocate the Transaction Price – After the transaction price has been determined, the next step is to allocate the transaction price to each performance obligation in the contract. If the contract only has one performance obligation, the entire transaction price will be applied to that obligation. If the contract has multiple performance obligations, the transaction price is allocated to the performance obligations based on the relative standalone selling price (SSP) at contract inception. Step 5 – Satisfaction of the Performance Obligations (and Recognize Revenue) – Revenue is recognized when (or as) goods or services are transferred to a customer. The Company satisfies each of its performance obligations by transferring control of the promised good or service underlying that performance obligation to the customer. Control is the ability to direct the use of and obtain substantially all of the remaining benefits from an asset. It includes the ability to prevent other entities from directing the use of and obtaining the benefits from an asset. Indicators that control has passed to the customer include: a present obligation to pay; physical possession of the asset; legal title; risks and rewards of ownership; and acceptance of the asset(s). Performance obligations can be satisfied at a point in time or over time. Substantially all of the Company’s revenues continue to be recognized when control of the goods is transferred to the customer, which is upon shipment of the finished goods to the customer. All sales have fixed pricing and there are currently no material variable components included in the Company’s revenue. Additionally, the Company will issue credits for defective merchandise, historically these credits for defective merchandise have not been material. Based on the Company’s analysis of the new revenue standards, revenue recognition from the sale of finished goods to customers, which represents substantially all of the Company’s revenues, was not impacted by the adoption of the new revenue standards. Disaggregation of Revenue The Company’s primary revenue streams include the sale and/or licensing of consumer goods and packaging materials for innovative products. The Company’s licensing business is not material and has not been separately disaggregated for segment purposes. The disaggregated Company’s revenues for the three and six months ended June 30, 2020 and 2019 was as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Revenues: Product sales $ 6,829,111 $ 5,845,651 $ 10,456,012 $ 11,483,001 Service - 22,714 - 48,311 Licensing 50,915 99,890 91,124 175,477 Total revenues, net $ 6,880,026 $ 5,968,255 $ 10,547,136 $ 11,706,789 For the three and six months ended June 30, 2020 and 2019, the following customer represented more than 10% of total net revenues: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Customer: Customer A * % 27 % * % 25 % Customer B 11 % * * * Customer C 11 % * * * * Customer did not represent greater than 10% of total net revenue. For the three and six months ended June 30, 2020 and 2019, the following geographical regions represented more than 10% of total net revenues: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Region: North America 98 % 73 % 93 % 75 % Europe * 18 % * 18 % * Region did not represent greater than 10% of total net revenue. Fair Value of Financial Instruments The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”) which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 — quoted prices in active markets for identical assets or liabilities Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 — inputs that are unobservable (for example, cash flow modeling inputs based on assumptions) The carrying amounts of the Company’s financial instruments, such as cash, accounts receivable, accounts payable, accrued expenses and other current liabilities approximate fair values due to the short-term nature of these instruments. The carrying amount of the Company’s notes payable approximates fair value because the effective yields on these obligations, which include contractual interest rates, taken together with other features such as concurrent issuance of warrants, are comparable to rates of returns for instruments of similar credit risk. The loan held for investment was acquired at fair value, which resulted in a discount. Sequencing Policy Under ASC 815-40-35, the Company follows a sequencing policy whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares as a result of certain securities with a potentially indeterminable number of shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving the first allocation of shares. Pursuant to ASC 815, issuance of securities to the Company’s employees or directors are not subject to the sequencing policy. Foreign Currency Translation The Company uses the United States dollar as its functional and reporting currency since the majority of the Company’s revenues, expenses, assets and liabilities are in the United States. Assets and liabilities in foreign currencies are translated using the exchange rate at the balance sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the year. Equity accounts are translated at historical exchange rates. Gains and losses from foreign currency transactions and translation for the three and six months ended June 30, 2020 and 2019 and the cumulative translation gains and losses as of June 30, 2020 and December 31, 2019 were not material. Net Earnings or Loss per Share Basic net income (loss) per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number vested of common shares, plus the net impact of common shares (computed using the treasury stock method), if dilutive, resulting from the exercise of dilutive securities. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. As of June 30, 2020 and 2019, the Company excluded the common stock equivalents summarized below, which entitled the holders thereof to ultimately acquire shares of common stock, from its calculation of earnings per share, as their effect would have been anti-dilutive. June 30, 2020 June 30, 2019 Selling Agent Warrants 160,492 65,626 Shares reserved in exchange for the cancellation of certain non-voting membership interest in Edison Nation Holdings, LLC 990,000 990,000 Options 80,000 290,000 Convertible shares under notes payable 999,536 285,632 Warrants for noteholders 750,000 Restricted stock units 270,000 - Shares to be issued 46,500 20,000 Total 3,296,528 1,651,258 Recent Accounting Pronouncements In August 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40), new accounting guidance that addresses the accounting for implementation costs associated with a hosted service. The guidance provides that implementation costs be evaluated for capitalization using the same criteria as that used for internal-use software development costs, with amortization expense being recorded in the same income statement expense line as the hosted service costs and over the expected term of the hosting arrangement. This guidance is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The guidance will be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted this accounting guidance in the first quarter of 2020 and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. In August 2018, the FASB issued new accounting guidance that eliminates, adds and modifies certain disclosure requirements for fair value measurements. Among the changes, an entity will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019; early adoption is permitted. The Company adopted this accounting guidance in the first quarter of 2020 and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. In October 2018, the FASB issued new accounting guidance for Variable Interest Entities, which requires indirect interests held through related parties in common control arrangements be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. Early adoption is permitted. The Company adopted this accounting guidance in the first quarter of 2020 and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. In July 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): Part 1 – Accounting for Certain Financial Instruments with Down Round Features and Part 2 – Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with Scope Exception (“ASU No. 2017-11”). Part 1 of ASU No. 2017-11 addresses the complexity of accounting for certain financial instruments with down round features. Down round features are provisions in certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of ASU No. 2017-11 addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification®. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. For public business entities, the amendments in Part I of this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The amendments in Part II of this update do not require any transition guidance because those amendments do not have an accounting effect. The Company adopted this accounting guidance in the first quarter of 2020 and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. Subsequent Events The Company has evaluated subsequent events through the date which the financial statements were issued. Based upon such evaluation, except for items described in Note 10, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements. Segment Reporting The Company uses “the management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker is the Chairman and Chief Executive Officer (“CEO”) of the Company, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company deploys resources on a consolidated level to all brands of the Company and therefore the Company only identifies one reportable operating segment with multiple product offerings. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Note 3 — Acquisitions and Divestitures Divestiture of Subsidiary On February 17, 2020, the Company divested its Cloud B, Inc. subsidiary and entered into an Agreement for the Purchase and Sale of Cloud B, Inc.(the “Purchase Agreement”), with Pearl 33 Holdings, LLC (the “Buyer”), pursuant to which the Buyer purchased from the Company (and the Company sold and assigned) 80,065 shares of common stock of Cloud B (the “Cloud B Shares”) for $1.00 and an indemnification agreement as described below, constituting a 72.15% ownership interest in Cloud B, based on 110,964 shares of Cloud B’s common stock outstanding as of February 17, 2020. In accordance with the agreement, all of the liabilities of Cloud B were assumed by Pearl 33. On February 17, 2020, as part of the sale of Cloud B, Inc., the Company entered into an indemnification agreement with Pearl 33 Holdings, LLC in connection with the divestiture of Cloud B, Inc., whereby pursuant to such agreement the Company is limited to the issuance of 150,000 shares of the Company’s common stock to the Buyer for indemnification of claims against Cloud B Inc. In addition, the Company shall indemnify the Buyer for expenses (including attorneys’ fees and all other costs, expenses and obligations) in connection with defending any Claim in connection with the Cloud B. The Company has recorded $405,000 related to the fair value of the 150,000 shares of common stock which were issued to the Buyer on June 30, 2020. The table below shows the assets and liabilities that the Company was relieved of in the transaction: February 17, 2020 Accounts payable 4,005,605 Accrued Expenses 370,289 Income Tax Payable 14,473 Notes Payable 900,000 Non-Controlling Interest 26,393 Shares to be issued to Buyer (405,000 ) Gain on divestiture $ 4,911,760 On March 11, 2020, the Company issued 238,750 shares of our common stock to acquire the assets of HMNRTH, LLC. On July 1, 2020, the Company made payment in the amount of $70,850 to the principals of HMNRTH, LLC. The transaction was treated as an asset purchase and not accounted for as a business combination due to the limited inputs, processes and outputs, which did not meet the requirements to be a business. |
Variable Interest Entities
Variable Interest Entities | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Note 4 — Variable Interest Entities The Company is involved in the formation of various entities considered to be Variable Interest Entities (“VIEs”). The Company evaluates the consolidation of these entities as required pursuant to ASC Topic 810 relating to the consolidation of VIEs. These VIEs are primarily partnerships formed to supply consumer goods to through various distribution and retail channels. The Company’s determination of whether it is the primary beneficiary of VIE is based in part on an assessment of whether or not the Company and its related parties are exposed to the majority of the risks and rewards of the entity. Typically, the Company is entitled to substantially all or portion of the economics of these VIEs. The Company is the primary beneficiary of the VIE entities. The following table presents the carrying values of the assets and liabilities of entities that are VIEs and consolidated by the Company at June 30, 2020: June 30, 2020 December 31, 2019 (Unaudited) Assets Current assets: Cash and cash equivalents $ 802,033 $ 6,234 Accounts receivable, net 955,246 21,697 Inventory 20,623 51,090 Prepaid expenses and other current assets 1,412,728 379,561 Total current assets 3,190,630 458,582 Property and equipment, net 24,001 32,661 Total assets $ 3,214,631 $ 491,243 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 194,738 $ 337,648 Accrued expenses and other current liabilities 15,806 - Deferred revenues 907,500 - Line of credit, net of debt issuance costs of $0 and $15,573, respectively 1,690,945 - Notes payable, current 150,000 - Due to related party 315,666 315,666 Total current liabilities 3,274,655 12,973,319 The following table presents the operations of entities that are VIEs and consolidated by the Company at June 30, 2020: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Revenues, net $ 1,051,945 $ 80,120 $ 1,274,477 $ 285,542 Cost of revenues 789,000 49,590 994,923 124,659 Gross profit 262,945 30,530 279,554 160,883 Operating expenses: Selling, general and administrative 136,648 100,961 203,562 192,699 Operating income 126,297 (70,431 ) 75,992 (31,816 ) Other (expense) income: Interest expense (21,331 ) - (56,956 ) - Total other (expense) income (21,331 ) - (56,956 ) - Loss before income taxes 104,966 (70,431 ) 19,036 (31,816 ) Income tax expense - - - - Net income $ 104,966 $ (70,431 ) $ 19,036 $ (31,816 ) At June 30, 2020 and December 31, 2019, there were no unconsolidated VIEs for which the Company holds a variable interest. On May 20, 2020 (the “Effective Date”), Edison Nation, Inc. (the “Company”) entered into an Agreement and Plan of Share Exchange (the “Share Exchange Agreement”) with PPE Brickell Supplies, LLC, a Florida limited liability company (“PPE”), and Graphene Holdings, LLC, a Wyoming limited liability company (“Graphene”, and together with PPE, the “Sellers”), whereby the Company purchased 25 membership units of Global Clean Solutions, LLC, a Nevada limited liability company (“Global”) from each of PPE and Graphene, for a total of fifty (50) units, representing fifty percent (50%) of the issued and outstanding units of Global (the “Purchase Units”). The Company issued 250,000 shares of its restricted common stock, $0.001 par value per share (the “Common Stock”) to PPE, and 50,000 shares of Common Stock to Graphene, in consideration for the Purchase Units. Global Clean Solutions, LLC is a VIE. The fair value of the shares of $699,000 was treated as a distribution to the noncontrolling interest members. Pursuant to the terms of the Share Exchange Agreement, the Sellers may earn additional shares of Common Stock upon Global realizing the following revenue targets: (i) In the event that Global’s total orders equal or exceed $1,000,000, Graphene shall receive 200,000 shares of Common Stock; (ii) In the event that Global’s total orders equal or exceed $10,000,000, PPE shall receive 100,000 shares of restricted Common Stock; and (iii) In the event that Global’s total orders equal or exceed $25,000,000, Graphene shall receive 125,000 shares of restricted Common Stock. Additionally, the Company shall be entitled to appoint two managers to the Board of Managers of Global. The fair value of the shares is expensed over the estimated vesting period and is adjusted based on the number of shares that vest. Amended Limited Liability Company Agreement On the Effective Date, the Company entered into an Amended Limited Liability Company Agreement of Global (the “Amended LLC Agreement”). The Amended LLC Agreement amends the original Limited Liability Company Agreement of Global, dated May 13, 2020. The Amended LLC defines the operating rules of Global and the ownership percentage of each member: Edison Nation, Inc. 50%, PPE 25% and Graphene 25%. Secured Line of Credit Agreement On the Effective Date, the Company (as “Guarantor”) entered into a Secured Line of Credit Agreement (the “Credit Agreement”) with Global and PPE. Under the terms of the Credit Agreement, PPE is to make available to Global a revolving credit loan in a principal aggregate amount at any one time not to exceed $2,500,000. Upon each drawdown of funds against the credit line, Global shall issue a Promissory Note (the “Note”) to PPE. The Note shall accrue interest at 3% per annum and have a maturity date of six (6) months. In the event of a default, any and all amounts due to PPE by Global, including principal and accrued but unpaid interest, shall increase by forty (40%) percent and the interest shall increase to five (5%) percent (the “Default Interest”). Security Agreement On the Effective Date, the Company (as “Guarantor”) entered into a Security Agreement (the “Security Agreement”) with Global (as “Borrower”) and PPE as the secured party, whereby the Company placed 1,800,000 shares of Common Stock (the “Reserve Shares”) in reserve with its transfer agent in the event of default under the Credit Agreement. In the event of a default that is not cured by the defined cure period, the PPE may liquidate the Reserve Shares until the Global’s principal, interest and associated expenses are recovered. The number of Reserve Shares may be increased through the issuance of True-Up shares in the event the original number of Reserve Shares is insufficient. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2020 | |
Credit Loss [Abstract] | |
Accounts Receivable | Note 5 — Accounts Receivable As of June 30, 2020 and December 31, 2019, accounts receivable consisted of the following: June 30, 2020 December 31, 2019 Accounts receivable $ 3,163,956 $ 2,185,859 Less: Allowance for doubtful accounts (77,761 ) (77,760 ) Total accounts receivable, net $ 3,086,195 $ 2,108,099 |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 6 — Inventory As of June 30, 2020 and December 31, 2019, inventory consisted of the following: June 30, 2020 December 31, 2019 Raw materials $ 25,648 $ 49,232 Finished goods 1,265,350 1,419,993 Reserve for obsolescence (100,000 ) (100,000 ) Total inventory $ 1,190,998 $ 1,69,225 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Note 7 — Debt As of June 30, 2020 and December 31, 2019, debt consisted of the following: June 30, 2020 December 31, 2019 Line of credit: Secured line of credit $ 1,690,945 $ - Receivables financing 460,163 472,567 Debt issuance costs - (15,573 ) Total lines of credit 2,151,108 456,995 Convertible notes payable: Senior convertible notes payable – related parties 1,428,161 1,428,161 Senior convertible notes payable 1,100,000 - Convertible notes payable 336,000 - Debt issuance costs (851,901 ) (366,666 ) Total convertible notes payable 2,012,260 1,061,495 Less: current portion of long-term convertible notes payable (900,765 ) - Noncurrent portion of long-term convertible notes payable 1,111,495 1,061,495 Notes payable: Notes payable 1,882,064 1,621,015 Debt issuance costs (86,350 ) (212,848 ) Total long-term debt 1,795,714 1,408,167 Less: current portion of long-term debt (970,710 ) (1,365,675 ) Noncurrent portion of long-term debt 825,004 42,492 Notes payable – related parties: Notes payable 2,667,513 3,282,021 Less: current portion of long-term debt – related parties (1,166,365 ) (1,686,352 ) Noncurrent portion of long-term debt – related parties $ 1,501,148 $ 1,595,669 Convertible Notes Payable On January 23, 2020, Edison Nation, Inc. (the “Company”) entered into a $1,100,000 loan agreement the (“Loan Agreement”) with Greentree Financial Group, Inc. (the “Investor”), pursuant to which the Investor purchased a 10% Convertible Promissory Note (the “Note”) from the Company, and the Company issued to the Investor a three year warrant (the “Warrant”) to purchase 550,000 shares of the Company’s common stock, $0.001 per share (“Common Stock”). The Note is convertible at any time at a price of $2.00 per share, subject to certain adjustments to the conversion price set forth in the Note. The Note reiterates the registration rights set forth in the Loan Agreement and the Warrant. There is no prepayment penalty on the Note. If the Note is not prepaid by the 90th day after the effective date of the Registration Statement, the Investor is required to convert the entire amount of principal and interest outstanding on the Note at that time, at a price of $2.00 per share, unless an event of default (as such events are described in the Note) under the Note has occurred, in which case the Note would be mandatorily converted at a price equal to 50% of the lowest trading price of the Common Stock for the last 10 trading days immediately prior to, but not including, the date that the Note mandatorily converts. In the event that the average of the 15 lowest closing prices for the Company’s common stock on NASDAQ or other primary trading market for the Company’s common stock (the average of such lowest closing prices being herein referred to, the “True-up Price”) during the period beginning on the effective date of the Registration Statement and ending on the 90 th On January 29, 2020, the Company and Greentree Financial Group, Inc. (the “Investor”), entered into an Amendment Agreement, amending the January 22, 2020 Loan Agreement, the Note, and the Warrant to: (i) correct the effective date set forth in the Loan Agreement, Note and Warrant to January 23, 2020 and the due date to October 23, 2020, (ii) clarify the terms of the registration right provision in the Loan Agreement such that the Company was required to register a total of 1,500,000 shares of Common Stock, which such amount of shares is the sum of 550,000 shares of Common Stock issuable upon conversion of the Note, 550,000 Warrant Shares, the 100,000 Origination Shares, and 300,000 shares of Common Stock to account for changes to the conversion and/or exercise price under the Note and Warrant, and (iii) to ensure that the total number of shares of Common Stock issued pursuant to the Loan Agreement, the Note, and/or the Warrant, each as amended, does not exceed 17.99% of the Company’s issued and outstanding Common Stock as of January 23, 2020. The Company is subject to a $35,000 penalty on a monthly basis if a registration statement is not effective after 105 days from January 23, 2020. The Company recognized a beneficial conversion option of $586,785 related to the 550,000 shares of Common Stock issuable upon conversion of the Note, a debt discount of $296,891 based on the relative fair value related to the 550,000 Warrant Shares, a debt discount of $201,324 based on the relative fair value related to the 160,000 Origination and Advisory Shares. On April 7, 2020, the Company entered into a Securities Purchase Agreement (the “Agreement”) with Jefferson Street Capital, LLC (the “Investor”) wherein the Company issued the Investor a Convertible Promissory Note (the “Note”) in the amount of $168,000 ($18,000 OID). The $150,000 of proceeds from the Note will be used for general working capital purposes The Note has a term of six (6) months, is due on October 7, 2020 and has a one-time interest charge of 2%. In addition, the Company issued the Investor 10,700 shares of Common Stock (the “Origination Shares”) as an origination fee. The transaction closed on April 9, 2020. The Investor shall have the right at any time to convert all or any part of the outstanding and unpaid principal, interest, fees, or any other obligation owed pursuant to this Note into fully paid and non-assessable shares of Common Stock at a conversion price equal to $2.05 per share. Upon an Event of Default, the Conversion Price shall equal the Alternate Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Alternate Conversion Price” shall equal the lesser of (i) 80% multiplied by the average of the three lowest daily volume weighted average prices (“VWAP”) during the previous twenty (20) Trading Days (as defined below) before the Issue Date of this Note (representing a discount rate of 20%) or (ii) 80% multiplied by the Market Price (as defined herein) (representing a discount rate of 20%). “Market Price” means the average of the three lowest daily VWAPs for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. On April 7, 2020, the Company entered into a Securities Purchase Agreement (the “Agreement”) with BHP Capital NY Inc. (the “Investor”) wherein the Company issued the Investor a Convertible Promissory Note (the “Note”) in the amount of $168,000 ($18,000 OID). The $150,000 of proceeds from the Note will be used for general working capital purposes The Note has a term of six (6) months, is due on October 7, 2020 and has a one-time interest charge of 2%. In addition, the Company issued the Investor 10,700 shares of Common Stock (the “Origination Shares”) as an origination fee. The transaction closed on April 9, 2020. The Investor shall have the right at any time to convert all or any part of the outstanding and unpaid principal, interest, fees, or any other obligation owed pursuant to this Note into fully paid and non-assessable shares of Common Stock at a conversion price equal to $2.05 per share. Upon an Event of Default, the Conversion Price shall equal the Alternate Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Alternate Conversion Price” shall equal the lesser of (i) 80% multiplied by the average of the three lowest daily volume weighted average prices (“VWAP”) during the previous twenty (20) Trading Days (as defined below) before the Issue Date of this Note (representing a discount rate of 20%) or (ii) 80% multiplied by the Market Price (as defined herein) (representing a discount rate of 20%). “Market Price” means the average of the three lowest daily VWAPs for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. 32E Financing On December 4, 2019, the Company agreed to issue and sell to 32 Entertainment LLC (“32E”) a 10% Senior Secured Note (the “32E Note”), in the principal amount of $250,000. The maturity date of the 32E Note is December 4, 2020. In addition, the Company issued to 32E 10,000 shares of common stock as an inducement to 32E to purchase the 32E Note. The $250,000 of proceeds from the 32E Note was used for general working capital needs of the Company and the repayment of debt related to Horberg Enterprises. Pursuant to the terms of the 32E Note, on December 4, 2019, the Company also issued 32E a Common Stock Purchase Warrant (the “32E Warrant”) to purchase 50,000 shares of common stock at an exercise price of $1.50 per share. The 32E Warrant expires on December 4, 2024. The 32E Warrant contains price protection provisions, as well as a provision allowing 32E to purchase the number of shares that 32E could have acquired if it held the number of shares of common stock acquirable upon complete exercise of the 32E Warrant, in the event that the Company grants, issues or sells common stock, common stock equivalents, rights to purchase common stock, warrants, securities or other property pro rate to holders of any class of the Company’s securities. If there is no effective registration statement registering the resale of the shares of common stock underlying the 32E Warrant, then the 32E Warrant may be exercised, based on a cashless exercise formula. The 32E Warrant also contains a conversion limitation provision, which prohibits 32E from exercising the 32E Warrant in an amount that would result in the beneficial ownership of greater than 4.9% of the total issued and outstanding shares of common stock, provided that (i) such exercise limitation may be waived by 32E with 61 days prior notice, and (ii) 32E cannot waive the exercise limitation if conversion of the 32E Warrant would result in 32E having beneficial ownership of greater than 9.9% of the total issued and outstanding shares of common stock. In connection with the sale of the 32E Note, also on December 4, 2019, the Company entered into a registration rights agreement whereby the Company agreed to register the 10,000 shares of common stock issued to 32E as an inducement on a registration statement on Form S-1 with the SEC. The Company was required to have such registration statement declared effective by the SEC within 90 calendar days (or 180 calendar days in the event of a “full review” by the SEC) following the earlier of 30 days from December 4, 2019 or the filing date of the registration statement on Form S-1, which such registration statement has not been filed or timely declared effective. If the registration statement is not filed or declared effective within the timeframe set forth in the registration rights agreement, the Company was supposed to be obligated to pay to 32E a monthly amount equal to 1% of the total subscription amount paid by 32E until such failure is cured. The Company has not made any such payment 32E. The registration rights agreement also contains mutual indemnifications by the Company and each investor, which the Company believes are customary for transactions of this type. On May 19, 2020, the Company entered into an Amendment (the “Amendment”) to the 32E Note. Under the terms of the Amendment, the Company issued to 32E an Amended Subordinate Secured Note (the “Replacement Note”) in the principal amount of $200,000 that accrues interest at 16% annually and matures on May 21, 2021. On May 28, 2020, the Company paid $50,000 toward the principal plus interest in the amount of $6,250 for a total of $56,250. 32E shall also receive 40,000 restricted stock units and surrender the warrant issued to it in the December 4, 2019 financing transaction. The Company accounted for the Amendment as a modification. Promissory Notes On January 2, 2020, the Company entered into that certain Loan Agreement with Tiburon Opportunity Fund (the “Lender”), dated January 2, 2020 (the “Loan Agreement”). Pursuant to the terms of the Loan Agreement, the Lender agreed to loan the Company $400,000. The Loan is interest bearing at the rate of 1.5% per month through the term of the Loan. Additionally, the Loan Agreement provides that the Company shall pay the Lender the entire unpaid principal and all accrued interest upon thirty days’ notice to the Company, but in any event, the notice shall not be sooner than June 1, 2020. On April 24, 2020, the Company and Lender entered into a Debt Conversion Agreement whereby the Lender was given the right and elected to exercise that right to convert principal and interest of $424,000 of funds loaned to the Company into shares of the Company’s common stock. The fair value of the Company’s common stock was $2.08 on the date of conversion and the conversion price was $2.00 per share for a total of 212,000 shares of restricted common stock issued by the Company. On January 2, 2020, Ed Roses, LLC (the “Partnership”) entered into a Loan Agreement (the “Agreement”) with Sook Hyun Lee (the “Lender”). Under the terms of the Agreement, the Lender agreed to lend $150,000 to the Partnership for general working capital. The Loan was due on April 15, 2020 (the “Maturity Date”) and accrues interest at 15% per annum. The Agreement shall automatically renew at the Maturity date for successive 90-day periods unless written notice is remitted by either party. On the Maturity date, the Partnership shall pay the Lender all unpaid principal and interest and a $30,000 commitment fee. The Lender shall have a collateral interest in the accounts receivable of the Partnership, including but not limited to 7 Eleven receivables. As collateral, Edison Nation, Inc. placed 75,000 shares of common stock in reserve. On January 10, 2020, the Company entered into a 5% Promissory Note Agreement with Equity Trust Company on behalf of Rawleigh Ralls (“Ralls”) for an aggregate principal amount of $267,000 (the “Ralls Note”), pursuant to which Ralls purchased the Ralls Note from the Company for $250,000 and an original issue discount of $17,000, and the Company issued to Ralls a warrant (the “Ralls Warrant”) to purchase 125,000 shares of the Company’s common stock valued at $86,725 estimated using the Black-Scholes option-valuation model. The proceeds from the Ralls Note will be used for general working capital needs of the Company. The Company will also issue 33,000 incentive shares to Ralls valued at $79,860 based on the closing stock price on January 10, 2020. The fair value of the warrants and incentive shares have been recorded as debt discount. The maturity date of the Ralls Note is July 10, 2020. Please see Note 12 — Subsequent Events On January 15, 2020, the Company entered into a 5% Promissory Note Agreement with Paul J. Solit & Julie B. Solit (“Solits”) for an aggregate principal amount of $107,000 (the “Solit Note”), pursuant to which the Solits purchased the Solit Note from the Company for $100,000 and an original issue discount of $7,000, and the Company issued to the Solits a warrant (the “Solit Warrant”) to purchase 50,000 shares of the Company’s common stock valued at $31,755 estimated using the Black-Scholes option-valuation model. The proceeds from the Solit Note will be used for general working capital needs of the Company. The Company will also issue 13,000 incentive shares to the Solits valued at $30,420 based on the closing stock price on January 15, 2020. The fair value of the warrants and incentive shares have been recorded as debt discount. The maturity date of the Solit Note is July 15, 2020. Please see Note 12 — Subsequent Events On January 17, 2020, the Company entered into a 5% Promissory Note Agreement with Richard O’Leary (“O’Leary”) for an aggregate principal amount of $53,500 (the “O’Leary Note”), pursuant to which O’Leary purchased the O’Leary Note from the Company for $50,000 and an original issue discount of $3,500, and the Company issued to O’Leary a warrant (the “O’Leary Warrant”) to purchase 25,000 shares of the Company’s common stock valued at $16,797 estimated using the Black-Scholes option-valuation model. The proceeds from the O’Leary Note will be used for general working capital needs of the Company. The Company will also issue 6,500 incentive shares to O’Leary valued at $15,535 based on the closing stock price on January 17, 2020. The fair value of the warrants and incentive shares have been recorded as debt discount. The maturity date of the O’Leary Note is July 17, 2020. Please see Note 12 — Subsequent Events On March 6, 2019, Edison Nation, Inc. (the “Company”) entered into a securities purchase agreement (the “SPA”) with an accredited investor (the “Investor”) pursuant to which the Investor purchased a 2% unsecured, senior convertible promissory note (the “Note”) from the Company. The Note was in the amount of $560,000 with an original issue discount of $60,000. The Company issued 15,000 shares of its common stock (“Common Stock”) valued at $74,100 based on the share price on the date of issuance to the Investor as additional consideration for the purchase of the Note. The Under the terms of the SPA, the Investor will have piggyback registration rights in the event the Company files a Form S-1 or Form S-3 within six months from March 6, 2019, as well as a pro rata right of first refusal in respect of participation in any debt or equity financings undertaken by the Company during the 18 months following March 6, 2019. The Company is also subject to certain customary negative covenants under the SPA, including but not limited to, the requirement to maintain its corporate existence and assets subject to certain exceptions, and to not to make any offers or sales of any security under circumstances that would have the effect of establishing rights or otherwise benefitting other investors in a manner more favorable in any material respect than those rights and benefits established in favor of the Investor under the terms of the SPA and the Note. The maturity date of the Note is six months from March 6, 2019. All principal amounts and the interest thereon are convertible into shares Common Stock only in the event that an Event of Default occurs. On January 24, 2020, the Company paid the Investor $588,366 to pay the Note in full. Paycheck Protection Program On April 15, 2020, Edison Nation, Inc. (the “Company”) entered into a loan agreement (“PPP Loan”) with First Choice Bank under the Paycheck Protection Program (the “PPP”), which is part of the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the United States Small Business Administration (“SBA”). The Company received proceeds of $789,852 from the PPP Loan. In accordance with the requirements of the PPP, the Company intends to use proceeds from the PPP Loan primarily for payroll costs, subject to thresholds, rent and utilities. The PPP Loan has a 1.00% interest rate per annum and matures on April 15, 2022 and is subject to the terms and conditions applicable to loans administered by the SBA under the PPP. Under the terms of the PPP, certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. Receivables Financing On February 21, 2020, the Company entered into a receivables financing arrangement for certain receivables of the Company not to exceed $1,250,000 at any one time. The agreement allows for borrowings up to 85% of the outstanding receivable based on the credit quality of the customer. The fee is between 1% and 2% of the total invoices financed. In April 2019, we entered into a receivables financing arrangement for certain receivables of the Company. The agreement allows for borrowings up to 80% of the outstanding receivable based on the credit quality of the customer. The fee is between 1% and 2% of the total invoices financed. On November 12, 2019, the Company entered into a Receivables Purchase Agreement with a financial institution (the “Receivables Purchase Agreement”), whereby the Company agreed to the sale of $250,000 of receivables for $200,000. The proceeds were used for general working capital. On November 18, 2019, the Company entered into a Future Receivables Purchase Agreement with a financial institution (the “Future Receivables Purchase Agreement”), whereby the Company agreed to the sale of $337,500 of receivables for $250,000. The proceeds were used to fund our receivables for overseas distributors. Christopher B. Ferguson, our Chairman and Chief Executive Officer, personally guaranteed the prompt and complete performance of the Company’s obligations under the Future Receivables Purchase Agreement. Line of Credit On the Effective Date, the Company (as “Guarantor”) entered into a Secured Line of Credit Agreement (the “Credit Agreement”) with Global and PPE. Under the terms of the Credit Agreement, PPE is to make available to Global a revolving credit loan in a principal aggregate amount at any one time not to exceed $2,500,000. Upon each drawdown of funds against the credit line, Global shall issue a Promissory Note (the “Note”) to PPE. The Note shall accrue interest at 3% per annum and have a maturity date of six (6) months. In the event of a default, any and all amounts due to PPE by Global, including principal and accrued but unpaid interest, shall increase by forty (40%) percent and the interest shall increase to five (5%) percent (the “Default Interest”). The scheduled maturities of the debt for the next five years as of December 31, 2019, are as follows: For the Years Ended December 31, Amount 2020 (excluding the six months ended June 30, 2020) 3,737,443 2021 206,760 2022 1,419,285 2023 1,440,278 2024 - Thereafter - 6,803,766 Less: debt discount (595,088 ) $ 6,208,678 For the three and six months ended June 30, 2020, interest expense was $847,154 and $1,571,111, respectively of which $75,692 and $152,326 were related party interest expense. For the three and six months ended June 30, 2019, interest expense was $401,170 and $525,864, respectively, of which $79,374 and $159,636 was related party interest expense, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8 — Income Taxes A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows: For the Six Months Ended June 30, 2020 2019 Tax at federal statutory rate 21.0 % 21.0 % U.S. income subject to valuation allowance -21.0 % -21.0 % Foreign tax 0.0 % -1.7 % Effective income tax rate 0.0 % -1.7 % The Company has determined that the gain on divestiture of $4,911,760 is a taxable transaction to the Company. The tax provision of approximately $1,030,000 would be offset by the utilization of the Company’s net operating loss carryforwards. The Company has sufficient net operating losses carryforwards to cover any tax liabilities generated due to the divestment of Cloud B, Inc. The Company does not have any deferred income tax expense from the gain due to the Company recording a full valuation allowance against all net operating losses in prior periods. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 9 — Related Party Transactions NL Penn Capital, LP and SRM Entertainment Group LLC As of June 30, 2020 and December 31, 2019, due to related party consists of net amounts due to SRM Entertainment Group LLC (“SRM LLC”) and NL Penn Capital, LP (“NL Penn”), the majority owner of both, which are owned by Chris Ferguson, our Chairman and Chief Executive Officer. The amount due to related parties is related to the acquisitions of Pirasta, LLC and Best Party Concepts, LLC offset by operating expenses that were paid by SRM and Edison Nation on behalf of SRM LLC and NL Penn. As of June 30, 2020 and December 31, 2019, the net amount due to related parties was $57,784 and $17,253, respectively. Such amounts are due currently. NL Penn and affiliated entities may lend additional capital to Edison Nation pursuant to terms and conditions similar to the current working capital lenders to Edison Nation such as Franklin Capital. In addition, Edison Nation borrows working capital from Franklin Capital, and Mr. Ferguson is a personal guarantor on the working capital facility provided to Edison Nation by Franklin Capital. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10 — Commitments and Contingencies Operating Leases The Company has entered into non-cancellable operating leases for office, warehouse, and distribution facilities, with original lease periods expiring through 2021. In addition to minimum rent, certain of the leases require payment of real estate taxes, insurance, common area maintenance charges, and other executory costs. Differences between rent expense and rent paid are recognized as adjustments to operating lease right-of-use assets on the consolidated balance sheets. As of June 30, 2020, the Company recorded operating lease liabilities of $326,482 and right of use assets for operating leases of $578,280. During the three and six months ended June 30, 2020, operating cash outflows relating to operating lease liabilities was $81,105 and $164,091, respectively, and the expense for right of use assets for operating leases was $75,997 and $153,818, respectively. As of June 30, 2020, the Company’s operating leases had a weighted-average remaining term of 3.7 years and weighted-average discount rate of 4.5%. Excluded from the measurement of operating lease liabilities and operating lease right-of-use assets were certain office, warehouse and distribution contracts that either qualify for the short-term lease recognition exception. On June 6, 2018, the Company’s wholly owned subsidiary, Best Party Concepts, LLC, entered into a lease for office space in Newtown, PA, which expired on May 30, 2020 and was not renewed. Total rent expense for the three and six months ended June 30, 2020 was $122,943 and $269,709, respectively. Total rent expense for the three and six months ended June 30, 2019 was $138,070 and $282,503, respectively. Rent expense is included in general and administrative expense on the consolidated statements of operations. Rental Income Fergco leases a portion of the building located in Washington, New Jersey that it owns under a month to month lease. Total rental income related to the leased space for both the three and six months ended June 30, 2020 and 2019 was both $25,703 and $51,407, respectively, and is included in other income on the consolidated statements of operations. Legal Contingencies The Company is involved in claims and litigation in the ordinary course of business, some of which seek monetary damages, including claims for punitive damages, which are not covered by insurance. For certain pending matters, accruals have not been established because such matters have not progressed sufficiently through discovery, and/or development of important factual information and legal information is insufficient to enable the Company to estimate a range of possible loss, if any. An adverse determination in one or more of these pending matters could have an adverse effect on the Company’s consolidated financial position, results of operations or cash flows. We are, and may in the future become, subject to various legal proceedings and claims that arise in or outside the ordinary course of business. On April 14, 2020, Oceanside Traders, LLC (“Plaintiff”) filed a complaint against Cloud B, Inc. and Edison Nation, Inc. (together the “Defendants”) with the Superior Court of Ocean County, New Jersey alleging a breach of contract in that the Defendants failed to pay Plaintiff for goods sold in the amount of $141,007 plus $138,180 for overpayments and $279,187 for lost profits for a total of $443,383. A default judgment was entered against Edison Nation in the case in the amount of $284,248.91. The same day the default judgment was entered, the Company filed a motion to vacate on the grounds that Edison Nation was not properly served with the complaint. On March 13, 2019, Rosenberg Fortuna & Laitman LLP and Mark Principe (together the “Plaintiffs”) filed a complaint against Safe TV Shop, LLC (the “Defendant”) with the Supreme Court of the State of New York, County of Nassau alleging a breach of indemnification arising out of the use of a certain packaging material. On February 12, 2020, the parties entered a Stipulation and Settlement and Consent Agreement, whereby the Plaintiff entered into a Consent Judgment in the amount of $50,000. The Company has accrued $50,000 for the amount of the judgment, but there have been no operations by the Plaintiff since the date of acquisition by the Company. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Note 11 — Stockholders’ Equity Preferred Stock On March 25, 2020, the Company filed a certificate of amendment to the Company’s articles of incorporation with the Secretary of State of the State of Nevada in order to: (i) increase the number of shares of the Company’s authorized preferred stock, par value $0.001 per share, from 0 shares to 30,000,000 shares of preferred stock; (ii) clarify the application of the forum selection clause in the Company’s amended and restated articles of incorporation, specifically that such clause does not apply to federal causes of actions arising under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and (iii) include affirmative changes to correspond to the Company’s First Amended and Restated Bylaws, confirming that the Company’s shareholders may vote by written consent. As of June 30, 2020 and December 31, 2019, there were 0 shares of preferred stock issued and outstanding, respectively. Stock-Based Compensation On September 6, 2018, the Company’s board of directors approved an amendment and restatement of the Company’s omnibus incentive plan solely to reflect the Company’s name change to Edison Nation, Inc. Thus, the Edison Nation, Inc. Omnibus Incentive Plan (the “Plan”) which remains effective as of February 9, 2018, provides for the issuance of up to 1,764,705 shares of common stock to help align the interests of management and our stockholders and reward our executive officers for improved Company performance. Stock incentive awards under the Plan can be in the form of stock options, restricted stock units, performance awards and restricted stock that are made to employees, directors and service providers. Awards are subject to forfeiture until vesting conditions have been satisfied under the terms of the award. The exercise price of stock options is equal to the fair market value of the underlying Company common stock on the date of grant. The following table summarizes stock option award activity for the six months ended June 30, 2020: Shares Weighted Average Exercise Price Remaining Contractual Life in Years Aggregate Intrinsic Value Balance, January 1, 2020 80,000 $ 7.01 3.7 - Granted - - - - Balance, June 30, 2020 80,000 $ 7.01 3.5 - Exercisable, June 30, 2020 53,333 $ 7.01 3.5 - As of June 30, 2020, there were 26,667 unvested options to purchase shares of the Company’s common stock or $15,535 of total unrecognized equity-based compensation expense that the Company expected to recognize over a remaining weighted-average period of 1 year. From time to time, the Company grants shares of common stock to consultants and non-employee vendors for services performed. The awards are valued at the market value of the underlying common stock at the date of grant and vest based on the terms of the contract which is usually upon grant. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12 — Subsequent Events On July 2, 2020, the Company issued 6,500 shares of common stock valued at $15,535 as incentive shares in connection with the O’Leary financing. On July 6, 2020, the Company issued 25,000 shares of common stock valued at $61,000 to a Consultant for consulting services. On July 14, 2020, the Company entered into an Amendment to Note Agreement and Common Stock Purchase Warrant (the “Amendment”) with Richard O’Leary. Under the terms of the Amendment, the parties amended the terms of the January 17, 2020 Note Agreement (the “Agreement”) and Common Stock Purchase Warrant (the “Warrant”) such that; (i) the maturity date of the Agreement was extended to January 17, 2021, (ii) the Original Issue Discount (“OID”) shall be increased to $7,000, (iii) the Lender shall be issued 6,500 Additional Incentive Shares and (iv) the expiration date of the Warrant shall be extended to June 30, 2021. On July 14, 2020, the Company issued the 6,500 Additional Incentive Shares valued at $24,570. On July 14, 2020, the Company entered into an Amendment to Note Agreement and Common Stock Purchase Warrant (the “Amendment”) with Equity Trust Company, a Custodian FBO: Rawleigh H. Ralls IRA. Under the terms of the Amendment, the parties amended the terms of the January 10, 2020 Note Agreement (the “Agreement”) and Common Stock Purchase Warrant (the “Warrant”) such that; (i) the maturity date of the Agreement was extended to January 10, 2021, (ii) the Original Issue Discount (“OID”) shall be increased to $34,000, (iii) the Lender shall be issued 33,000 Additional Incentive Shares and (iv) the Company shall prepare and file with the United States Securities and Exchange Commission a registration statement on Form S-1 within 30 days of the Effective Date of the Amendment, that registers a total of 191,000 shares of Common Stock, which such amount of shares is the sum of 125,000 Warrant Shares, the 33,000 Incentive Shares, and 33,000 Additional Incentive Shares. On July 14, 2020, the Company issued the 33,000 Additional Incentive Shares valued at $124,740. On July 14, 2020, the Company entered into an Amendment to Note Agreement and Common Stock Purchase Warrant (the “Amendment”) with Paul J. Solit and Julie B. Solit. Under the terms of the Amendment, the parties amended the terms of the January 15, 2020 Note Agreement (the “Agreement”) and Common Stock Purchase Warrant (the “Warrant”) such that; (i) the maturity date of the Agreement was extended to December 15, 2020, (ii) the Original Issue Discount (“OID”) shall be increased to $14,000 and (iii) the Lender shall be issued 13,000 Additional Incentive Shares. On July 14, 2020, the Company issued the 13,000 Additional Incentive Shares valued at $49,140. On July 23, 2020, the Company issued 320,000 shares of common stock valued at $1,158,400 to a note holder to satisfy $360,000 principal and $131,889 interest and fees against a note issued on January 23, 2020. On July 24, 2020, the Company issued 113,312 shares of common stock valued at $379,595 to a Consultant for consulting services based on achieving set revenue targets within the agreement. On July 24, 2020, the Company issued 113,312 shares of common stock valued at $379,595 to a Consultant for consulting services based on achieving set revenue targets within the agreement. On July 29, 2020, the Company issued Jefferson Street Capital, LLC (the “Investor”) a Convertible Promissory Note (the “Note”) in the amount of $224,000 ($24,000 OID) under the terms of the April 7, 2020 Securities Purchase Agreement entered into by the parties. The $200,000 of proceeds from the Note will be used for general working capital purposes The Note has a term of six (6) months, is due on January 29, 2021 and has a one-time interest charge of 2%. In addition, the Company issued the Investor 14,266 shares of Common Stock (the “Origination Shares”) as an origination fee. The transaction closed on July 31, 2020. With regard to conversion of the Note, the Investor shall not have the right to convert the Note into shares prior to 180 calendar days from the Issue Date. Provided that the Note remains unpaid, the Investor may elect to convert all or any part of the outstanding and unpaid principal, interest, fees, or any other obligation owed pursuant to this Note into fully paid and non-assessable shares of Common Stock at a conversion price equal to $2.05 per share after 180 calendar Days from the Issue Date. On August 3, 2020, the Company issued 30,000 shares of common stock valued at $116,700 to a Consultant for advisory services. On August 4, 2020, the Company issued 20,000 shares of common stock valued at $75,400 to a Consultant for advisory services. On August 4, 2020, the Company issued 370,000 shares of common stock valued at $1,394,900 to a note holder in satisfaction of $360,000 principal and $131,889 interest and fees against a note issued on January 23, 2020. On August 12, 2020, the Company entered into an Amendment to a Purchase of Inventory and Repurchase Agreement (the “Amendment”) dated November 12, 2019. Under the terms of the Amendment, (i) the repurchase date is extended to December 10, 2020; and (ii) the Company agreed to pay the Purchaser-Assignee a commitment fee of $13,053, and (iii) the Company agreed to pay the Purchaser-Assignee 2% per month for extension periods commencing July 1, 2020 through December 10, 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Edison Nation, Inc. and its wholly-owned and majority owned subsidiaries. |
Variable Interest Entity Assessment | Variable Interest Entity Assessment A VIE is an entity (a) that has total equity at risk that is not sufficient to finance its activities without additional subordinated financial support from other entities, (b) where the group of equity holders does not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance, or the obligation to absorb the entity’s expected losses or the right to receive the entity’s expected residual returns, or both, or (c) where the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. In order to determine if an entity is considered a VIE, the Company first performs a qualitative analysis, which requires certain subjective decisions regarding its assessments, including, but not limited to, the design of the entity, the variability that the entity was designed to create and pass along to its interest holders, the rights of the parties, and the purpose of the arrangement. If the Company cannot conclude after a qualitative analysis whether an entity is a VIE, it performs a quantitative analysis. The qualitative analysis considered the design of the entity, the risks that cause variability, the purpose for which the entity was created, and the variability that the entity was designed to pass along to its variable interest holders. |
Use of Estimates | Use of Estimates Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the financial statements. The Company’s significant estimates used in these financial statements include, but are not limited to, accounts receivable reserves, the valuation allowance related to the Company’s deferred tax assets, the recoverability and useful lives of long-lived assets, debt conversion features, stock-based compensation, certain assumptions related to the valuation of the reserved shares and the assets acquired and liabilities assumed related to the Company’s acquisitions. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company has cash on deposit in several financial institutions which, at times, may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company has not experienced losses in such accounts and periodically evaluates the creditworthiness of its financial institutions. The Company reduces its credit risk by placing its cash and cash equivalents with major financial institutions. The Company had approximately $928,000 not covered by FDIC insurance limits as of June 30, 2020 of which approximately $113,000 was held in foreign bank accounts. |
Accounts Receivable | Accounts Receivable As of June 30, 2020, the following customer represented more than 10% of total accounts receivable: June 30, 2020 Customer: Customer A 14 % |
Inventory | Inventory Inventory is recorded at the lower of cost or net realizable value on a first-in, first-out basis. The Company reduces the carrying value of inventories for those items that are potentially excess, obsolete, or slow moving based on changes in customer demand, technology developments, or other economic factors. |
Revenue Recognition | Revenue Recognition Generally, the Company considers all revenues as arising from contracts with customers. Revenue is recognized based on the five-step process outlined in the Accounting Standards Codification (“ASC”) 606: Step 1 – Identify the Contract with the Customer – A contract exists when (a) the parties to the contract have approved the contract and are committed to perform their respective obligations, (b) the entity can identify each party’s rights regarding the goods or services to be transferred, (c) the entity can identify the payment terms for the goods or services to be transferred, (d) the contract has commercial substance and it is probably that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Step 2 – Identify Performance Obligations in the Contract – Upon execution of a contract, the Company identifies as performance obligations each promise to transfer to the customer either (a) goods or services that are distinct, or (b) a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. To the extent a contract includes multiple promised goods or services, the Company must apply judgement to determine whether the goods or services are capable of being distinct within the context of the contract. If these criteria are not met, the goods or services are accounted for as a combined performance obligation. Step 3 – Determine the Transaction Price – When (or as) a performance obligation is satisfied, the Company shall recognize as revenue the amount of the transaction price that is allocated to the performance obligation. The contract terms are used to determine the transaction price. Generally, all contracts include fixed consideration. If a contract did include variable consideration, the Company would determine the amount of variable consideration that should be included in the transaction price based on expected value method. Variable consideration would be included in the transaction price, if in the Company’s judgement, it is probable that a significant future reversal of cumulative revenue under the contract would not occur. Step 4 – Allocate the Transaction Price – After the transaction price has been determined, the next step is to allocate the transaction price to each performance obligation in the contract. If the contract only has one performance obligation, the entire transaction price will be applied to that obligation. If the contract has multiple performance obligations, the transaction price is allocated to the performance obligations based on the relative standalone selling price (SSP) at contract inception. Step 5 – Satisfaction of the Performance Obligations (and Recognize Revenue) – Revenue is recognized when (or as) goods or services are transferred to a customer. The Company satisfies each of its performance obligations by transferring control of the promised good or service underlying that performance obligation to the customer. Control is the ability to direct the use of and obtain substantially all of the remaining benefits from an asset. It includes the ability to prevent other entities from directing the use of and obtaining the benefits from an asset. Indicators that control has passed to the customer include: a present obligation to pay; physical possession of the asset; legal title; risks and rewards of ownership; and acceptance of the asset(s). Performance obligations can be satisfied at a point in time or over time. Substantially all of the Company’s revenues continue to be recognized when control of the goods is transferred to the customer, which is upon shipment of the finished goods to the customer. All sales have fixed pricing and there are currently no material variable components included in the Company’s revenue. Additionally, the Company will issue credits for defective merchandise, historically these credits for defective merchandise have not been material. Based on the Company’s analysis of the new revenue standards, revenue recognition from the sale of finished goods to customers, which represents substantially all of the Company’s revenues, was not impacted by the adoption of the new revenue standards. |
Disaggregation of Revenue | Disaggregation of Revenue The Company’s primary revenue streams include the sale and/or licensing of consumer goods and packaging materials for innovative products. The Company’s licensing business is not material and has not been separately disaggregated for segment purposes. The disaggregated Company’s revenues for the three and six months ended June 30, 2020 and 2019 was as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Revenues: Product sales $ 6,829,111 $ 5,845,651 $ 10,456,012 $ 11,483,001 Service - 22,714 - 48,311 Licensing 50,915 99,890 91,124 175,477 Total revenues, net $ 6,880,026 $ 5,968,255 $ 10,547,136 $ 11,706,789 For the three and six months ended June 30, 2020 and 2019, the following customer represented more than 10% of total net revenues: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Customer: Customer A * % 27 % * % 25 % Customer B 11 % * * * Customer C 11 % * * * * Customer did not represent greater than 10% of total net revenue. For the three and six months ended June 30, 2020 and 2019, the following geographical regions represented more than 10% of total net revenues: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Region: North America 98 % 73 % 93 % 75 % Europe * 18 % * 18 % * Region did not represent greater than 10% of total net revenue. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”) which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 — quoted prices in active markets for identical assets or liabilities Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 — inputs that are unobservable (for example, cash flow modeling inputs based on assumptions) The carrying amounts of the Company’s financial instruments, such as cash, accounts receivable, accounts payable, accrued expenses and other current liabilities approximate fair values due to the short-term nature of these instruments. The carrying amount of the Company’s notes payable approximates fair value because the effective yields on these obligations, which include contractual interest rates, taken together with other features such as concurrent issuance of warrants, are comparable to rates of returns for instruments of similar credit risk. The loan held for investment was acquired at fair value, which resulted in a discount. |
Sequencing Policy | Sequencing Policy Under ASC 815-40-35, the Company follows a sequencing policy whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares as a result of certain securities with a potentially indeterminable number of shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving the first allocation of shares. Pursuant to ASC 815, issuance of securities to the Company’s employees or directors are not subject to the sequencing policy. |
Foreign Currency Translation | Foreign Currency Translation The Company uses the United States dollar as its functional and reporting currency since the majority of the Company’s revenues, expenses, assets and liabilities are in the United States. Assets and liabilities in foreign currencies are translated using the exchange rate at the balance sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the year. Equity accounts are translated at historical exchange rates. Gains and losses from foreign currency transactions and translation for the three and six months ended June 30, 2020 and 2019 and the cumulative translation gains and losses as of June 30, 2020 and December 31, 2019 were not material. |
Net Earnings or Loss Per Share | Net Earnings or Loss per Share Basic net income (loss) per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number vested of common shares, plus the net impact of common shares (computed using the treasury stock method), if dilutive, resulting from the exercise of dilutive securities. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. As of June 30, 2020 and 2019, the Company excluded the common stock equivalents summarized below, which entitled the holders thereof to ultimately acquire shares of common stock, from its calculation of earnings per share, as their effect would have been anti-dilutive. June 30, 2020 June 30, 2019 Selling Agent Warrants 160,492 65,626 Shares reserved in exchange for the cancellation of certain non-voting membership interest in Edison Nation Holdings, LLC 990,000 990,000 Options 80,000 290,000 Convertible shares under notes payable 999,536 285,632 Warrants for noteholders 750,000 Restricted stock units 270,000 - Shares to be issued 46,500 20,000 Total 3,296,528 1,651,258 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40), new accounting guidance that addresses the accounting for implementation costs associated with a hosted service. The guidance provides that implementation costs be evaluated for capitalization using the same criteria as that used for internal-use software development costs, with amortization expense being recorded in the same income statement expense line as the hosted service costs and over the expected term of the hosting arrangement. This guidance is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The guidance will be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted this accounting guidance in the first quarter of 2020 and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. In August 2018, the FASB issued new accounting guidance that eliminates, adds and modifies certain disclosure requirements for fair value measurements. Among the changes, an entity will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019; early adoption is permitted. The Company adopted this accounting guidance in the first quarter of 2020 and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. In October 2018, the FASB issued new accounting guidance for Variable Interest Entities, which requires indirect interests held through related parties in common control arrangements be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. Early adoption is permitted. The Company adopted this accounting guidance in the first quarter of 2020 and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. In July 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): Part 1 – Accounting for Certain Financial Instruments with Down Round Features and Part 2 – Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with Scope Exception (“ASU No. 2017-11”). Part 1 of ASU No. 2017-11 addresses the complexity of accounting for certain financial instruments with down round features. Down round features are provisions in certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of ASU No. 2017-11 addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification®. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. For public business entities, the amendments in Part I of this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The amendments in Part II of this update do not require any transition guidance because those amendments do not have an accounting effect. The Company adopted this accounting guidance in the first quarter of 2020 and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. |
Subsequent Events | Subsequent Events The Company has evaluated subsequent events through the date which the financial statements were issued. Based upon such evaluation, except for items described in Note 10, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements. |
Segment Reporting | Segment Reporting The Company uses “the management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker is the Chairman and Chief Executive Officer (“CEO”) of the Company, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company deploys resources on a consolidated level to all brands of the Company and therefore the Company only identifies one reportable operating segment with multiple product offerings. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Concentration of Risk of Accounts Receivable | As of June 30, 2020, the following customer represented more than 10% of total accounts receivable: June 30, 2020 Customer: Customer A 14 % |
Schedule of Disaggregation of Revenue | The disaggregated Company’s revenues for the three and six months ended June 30, 2020 and 2019 was as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Revenues: Product sales $ 6,829,111 $ 5,845,651 $ 10,456,012 $ 11,483,001 Service - 22,714 - 48,311 Licensing 50,915 99,890 91,124 175,477 Total revenues, net $ 6,880,026 $ 5,968,255 $ 10,547,136 $ 11,706,789 |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | For the three and six months ended June 30, 2020 and 2019, the following customer represented more than 10% of total net revenues: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Customer: Customer A * % 27 % * % 25 % Customer B 11 % * * * Customer C 11 % * * * * Customer did not represent greater than 10% of total net revenue. For the three and six months ended June 30, 2020 and 2019, the following geographical regions represented more than 10% of total net revenues: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Region: North America 98 % 73 % 93 % 75 % Europe * 18 % * 18 % * Region did not represent greater than 10% of total net revenue. |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | As of June 30, 2020 and 2019, the Company excluded the common stock equivalents summarized below, which entitled the holders thereof to ultimately acquire shares of common stock, from its calculation of earnings per share, as their effect would have been anti-dilutive. June 30, 2020 June 30, 2019 Selling Agent Warrants 160,492 65,626 Shares reserved in exchange for the cancellation of certain non-voting membership interest in Edison Nation Holdings, LLC 990,000 990,000 Options 80,000 290,000 Convertible shares under notes payable 999,536 285,632 Warrants for noteholders 750,000 Restricted stock units 270,000 - Shares to be issued 46,500 20,000 Total 3,296,528 1,651,258 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Business Combination of Assets and Liabilities | The table below shows the assets and liabilities that the Company was relieved of in the transaction: February 17, 2020 Accounts payable 4,005,605 Accrued Expenses 370,289 Income Tax Payable 14,473 Notes Payable 900,000 Non-Controlling Interest 26,393 Shares to be issued to Buyer (405,000 ) Gain on divestiture $ 4,911,760 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The following table presents the carrying values of the assets and liabilities of entities that are VIEs and consolidated by the Company at June 30, 2020: June 30, 2020 December 31, 2019 (Unaudited) Assets Current assets: Cash and cash equivalents $ 802,033 $ 6,234 Accounts receivable, net 955,246 21,697 Inventory 20,623 51,090 Prepaid expenses and other current assets 1,412,728 379,561 Total current assets 3,190,630 458,582 Property and equipment, net 24,001 32,661 Total assets $ 3,214,631 $ 491,243 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 194,738 $ 337,648 Accrued expenses and other current liabilities 15,806 - Deferred revenues 907,500 - Line of credit, net of debt issuance costs of $0 and $15,573, respectively 1,690,945 - Notes payable, current 150,000 - Due to related party 315,666 315,666 Total current liabilities 3,274,655 12,973,319 The following table presents the operations of entities that are VIEs and consolidated by the Company at June 30, 2020: For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Revenues, net $ 1,051,945 $ 80,120 $ 1,274,477 $ 285,542 Cost of revenues 789,000 49,590 994,923 124,659 Gross profit 262,945 30,530 279,554 160,883 Operating expenses: Selling, general and administrative 136,648 100,961 203,562 192,699 Operating income 126,297 (70,431 ) 75,992 (31,816 ) Other (expense) income: Interest expense (21,331 ) - (56,956 ) - Total other (expense) income (21,331 ) - (56,956 ) - Loss before income taxes 104,966 (70,431 ) 19,036 (31,816 ) Income tax expense - - - - Net income $ 104,966 $ (70,431 ) $ 19,036 $ (31,816 ) |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Credit Loss [Abstract] | |
Schedule of Accounts Receivable | As of June 30, 2020 and December 31, 2019, accounts receivable consisted of the following: June 30, 2020 December 31, 2019 Accounts receivable $ 3,163,956 $ 2,185,859 Less: Allowance for doubtful accounts (77,761 ) (77,760 ) Total accounts receivable, net $ 3,086,195 $ 2,108,099 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | As of June 30, 2020 and December 31, 2019, inventory consisted of the following: June 30, 2020 December 31, 2019 Raw materials $ 25,648 $ 49,232 Finished goods 1,265,350 1,419,993 Reserve for obsolescence (100,000 ) (100,000 ) Total inventory $ 1,190,998 $ 1,69,225 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | As of June 30, 2020 and December 31, 2019, debt consisted of the following: June 30, 2020 December 31, 2019 Line of credit: Secured line of credit $ 1,690,945 $ - Receivables financing 460,163 472,567 Debt issuance costs - (15,573 ) Total lines of credit 2,151,108 456,995 Convertible notes payable: Senior convertible notes payable – related parties 1,428,161 1,428,161 Senior convertible notes payable 1,100,000 - Convertible notes payable 336,000 - Debt issuance costs (851,901 ) (366,666 ) Total convertible notes payable 2,012,260 1,061,495 Less: current portion of long-term convertible notes payable (900,765 ) - Noncurrent portion of long-term convertible notes payable 1,111,495 1,061,495 Notes payable: Notes payable 1,882,064 1,621,015 Debt issuance costs (86,350 ) (212,848 ) Total long-term debt 1,795,714 1,408,167 Less: current portion of long-term debt (970,710 ) (1,365,675 ) Noncurrent portion of long-term debt 825,004 42,492 Notes payable – related parties: Notes payable 2,667,513 3,282,021 Less: current portion of long-term debt – related parties (1,166,365 ) (1,686,352 ) Noncurrent portion of long-term debt – related parties $ 1,501,148 $ 1,595,669 |
Schedule of Maturities of Long-term Debt | The scheduled maturities of the debt for the next five years as of December 31, 2019, are as follows: For the Years Ended December 31, Amount 2020 (excluding the six months ended June 30, 2020) 3,737,443 2021 206,760 2022 1,419,285 2023 1,440,278 2024 - Thereafter - 6,803,766 Less: debt discount (595,088 ) $ 6,208,678 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows: For the Six Months Ended June 30, 2020 2019 Tax at federal statutory rate 21.0 % 21.0 % U.S. income subject to valuation allowance -21.0 % -21.0 % Foreign tax 0.0 % -1.7 % Effective income tax rate 0.0 % -1.7 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes stock option award activity for the six months ended June 30, 2020: Shares Weighted Average Exercise Price Remaining Contractual Life in Years Aggregate Intrinsic Value Balance, January 1, 2020 80,000 $ 7.01 3.7 - Granted - - - - Balance, June 30, 2020 80,000 $ 7.01 3.5 - Exercisable, June 30, 2020 53,333 $ 7.01 3.5 - |
Basis of Presentation and Nat_2
Basis of Presentation and Nature of Operations (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2020 | Jun. 27, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Reduction in salary percetage | 20.00% | 20.00% | |||||||
Operating income (loss) | $ (780,688) | $ (1,348,593) | $ (3,724,703) | $ (2,604,805) | |||||
Operating income loss from non cash activities | 2,200,000 | ||||||||
Operating income loss from non recurring items | $ 366,000 | ||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Assets, current | $ 8,071,961 | $ 8,071,961 | $ 4,955,365 | ||||||
Liabilities, current | 11,317,275 | 11,317,275 | 12,973,319 | ||||||
Working capital | 3,245,314 | 3,245,314 | |||||||
Related party note payables | 1,166,365 | 1,166,365 | 1,686,352 | ||||||
Assets | 26,021,906 | 26,021,906 | 23,609,619 | ||||||
Liabilities | 15,081,404 | 15,081,404 | 16,155,187 | ||||||
Stockholders' equity | 10,940,502 | 13,375,008 | 10,940,502 | 13,375,008 | $ 11,229,321 | $ 7,454,432 | $ 14,872,261 | $ 15,939,639 | |
Debt interest expense | $ 847,154 | $ 401,170 | $ 2,667,513 | $ 525,864 | |||||
Description of cost cutting initiatives | Annual cost saving initiatives related to synergies and the elimination of redundant costs of approximately $1,500,000. | ||||||||
Related Party Debt Holders [Member] | |||||||||
Debt interest expense | $ 1,166,365 | ||||||||
Loan Agreement [Member] | |||||||||
Proceeds form loan | $ 200,000 | ||||||||
Proceeds from exercise of warrants | $ 250,000 | ||||||||
Related to Depreciation, Amortization and Stock-based Compensation | |||||||||
Operating income (loss) | 3,600,000 | ||||||||
Related to Transaction Costs and Restructuring Charges [Member] | |||||||||
Operating income (loss) | $ 366,000 | ||||||||
Best Party Concepts [Member] | |||||||||
Business acquisition, percentage of voting interests acquired | 50.00% | 50.00% | |||||||
Global Clean Solutions, LLC [Member] | |||||||||
Business acquisition, percentage of voting interests acquired | 50.00% | 50.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) | Jun. 30, 2020USD ($) |
Cash, FDIC insured amount | $ 928,000 |
Foreign Bank Accounts [Member] | |
Cash, FDIC insured amount | $ 113,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Accounts Receivable (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Customer A [Member] | |
Concentration risk, percentage | 14.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue from Contract with Customer, Excluding Assessed Tax | $ 6,880,026 | $ 5,968,255 | $ 10,547,136 | $ 11,706,789 |
Product sales [Member] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 6,829,111 | 5,845,651 | 10,456,012 | 11,483,001 |
Service [Member] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 22,714 | 48,311 | ||
Licensing [Member] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 50,915 | $ 99,890 | $ 91,124 | $ 175,477 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas (Details) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |||||
North America [Member] | ||||||||
Concentration Risk, Percentage | 98.00% | 73.00% | 93.00% | 75.00% | ||||
Europe [Member] | ||||||||
Concentration Risk, Percentage | [1] | 18.00% | [1] | [1] | 18.00% | |||
Customer A [Member] | ||||||||
Concentration Risk, Percentage | [2] | 27.00% | [2] | 25.00% | ||||
Customer B [Member] | ||||||||
Concentration Risk, Percentage | 11.00% | [2] | [2] | [2] | ||||
Customer C [Member] | ||||||||
Concentration Risk, Percentage | 11.00% | [2] | [2] | [2] | ||||
[1] | Region did not represent greater than 10% of total net revenue. | |||||||
[2] | Customer did not represent greater than 10% of total net revenue. |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,296,528 | 1,651,258 |
Edison Nation Holdings, LLC [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 990,000 | 990,000 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 160,492 | 65,626 |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 80,000 | 290,000 |
Convertible Shares Under Notes Payable[Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 999,536 | 285,632 |
Warrants for Noteholders [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 750,000 | |
Restricted Stock Units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 270,000 | |
Shares to be Issued [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 46,500 | 20,000 |
Acquisitions and Divestitures_2
Acquisitions and Divestitures (Details Narrative) - USD ($) | Jul. 01, 2020 | Mar. 11, 2020 | Feb. 17, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||
Common stock, shares outstanding | 9,618,401 | 8,015,756 | |||
HMNRTH, LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of shares issued for acquisition of assets | 238,750 | ||||
HMNRTH, LLC [Member] | Subsequent Event [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of shares issued for acquisition of assets, value | $ 70,850 | ||||
Purchase Agreement [Member] | Cloud B Shares [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of shares of common stock | 80,065 | ||||
Share issued price per share | $ 1 | ||||
Ownership interest | 72.15% | ||||
Common stock, shares outstanding | 110,964 | ||||
Indemnification Agreement [Member] | Pearl 33 Holdings, LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of common stock for acquisition | 150,000 | ||||
Number of common stock for acquisition, value | $ 405,000 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Schedule of Business Combination of Assets and Liabilities (Details) | Feb. 17, 2020USD ($) |
Business Combinations [Abstract] | |
Accounts payable | $ 4,005,605 |
Accrued Expenses | 370,289 |
Income Tax Payable | 14,473 |
Notes Payable | 900,000 |
Non-Controlling Interest | 26,393 |
Shares to be issued to Buyer | (405,000) |
Gain on divestiture | $ 4,911,760 |
Variable Interest Entities (Det
Variable Interest Entities (Details Narrative) - USD ($) | May 20, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Common stock, par value | $ 0.001 | $ 0.001 | |
Share Exchange Agreement [Member] | Graphene Holdings, LLC [Member] | |||
Number of shares issued | 50,000 | ||
Fair value of treated distribution | $ 699,000 | ||
Number of shares issued,value | $ 200,000 | ||
Share Exchange Agreement [Member] | Graphene Holdings, LLC [Member] | Minimum [Member] | |||
Number of shares issued | 1,000,000 | ||
Share Exchange Agreement [Member] | Restricted Common Stock [Member] | Graphene Holdings, LLC [Member] | |||
Number of shares issued,value | $ 125,000 | ||
Share Exchange Agreement [Member] | Restricted Common Stock [Member] | Graphene Holdings, LLC [Member] | Minimum [Member] | |||
Number of shares issued | 25,000,000 | ||
Share Exchange Agreement [Member] | PPE Brickell Supplies, LLC [Member] | |||
Number of units purchased | 25 | ||
Purchase units, description | On May 20, 2020 (the "Effective Date"), Edison Nation, Inc. (the "Company") entered into an Agreement and Plan of Share Exchange (the "Share Exchange Agreement") with PPE Brickell Supplies, LLC, a Florida limited liability company ("PPE"), and Graphene Holdings, LLC, a Wyoming limited liability company ("Graphene", and together with PPE, the "Sellers"), whereby the Company purchased 25 membership units of Global Clean Solutions, LLC, a Nevada limited liability company ("Global") from each of PPE and Graphene, for a total of fifty (50) units, representing fifty percent (50%) of the issued and outstanding units of Global (the "Purchase Units"). | ||
Share Exchange Agreement [Member] | PPE Brickell Supplies, LLC [Member] | Restricted Common Stock [Member] | |||
Number of shares issued | 250,000 | ||
Common stock, par value | $ 0.001 | ||
Number of shares issued,value | $ 100,000 | ||
Share Exchange Agreement [Member] | PPE Brickell Supplies, LLC [Member] | Restricted Common Stock [Member] | Minimum [Member] | |||
Number of shares issued | 10,000,000 | ||
Amended Limited Liability Company Agreement of Global [Member] | Graphene Holdings, LLC [Member] | |||
Ownerish percentage | 25.00% | ||
Amended Limited Liability Company Agreement of Global [Member] | PPE Brickell Supplies, LLC [Member] | |||
Ownerish percentage | 25.00% | ||
Amended Limited Liability Company Agreement of Global [Member] | Edison Nation Holdings, LLC [Member] | |||
Ownerish percentage | 50.00% | ||
Secured Line of Credit Agreement [Member] | |||
Revolving credit loan amount | $ 2,500,000 | ||
Interest rate | 3.00% | ||
Debt interest description | In the event of a default, any and all amounts due to PPE by Global, including principal and accrued but unpaid interest, shall increase by forty (40%) percent and the interest shall increase to five (5%) percent (the "Default Interest"). | ||
Secured Line of Credit Agreement [Member] | Global Clean Solutions, LLC and PPE Brickell Supplies, LLC [Member] | |||
Interest rate | 3.00% | ||
Debt maturity date description | Maturity date of six (6) months | ||
Debt interest description | In the event of a default, any and all amounts due to PPE by Global, including principal and accrued but unpaid interest, shall increase by forty (40%) percent and the interest shall increase to five (5%) percent (the "Default Interest"). | ||
Secured Line of Credit Agreement [Member] | Global Clean Solutions, LLC and PPE Brickell Supplies, LLC [Member] | Minimum [Member] | |||
Revolving credit loan amount | $ 2,500,000 | ||
Security Agreement [Member] | PPE Brickell Supplies, LLC [Member] | Borrower [Member] | |||
Common stock placed for reverse shares | 1,800,000 |
Variable Interest Entities - Sc
Variable Interest Entities - Schedule of Variable Interest Entities (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Cash and cash equivalents | $ 1,762,337 | $ 1,762,337 | $ 412,719 | ||
Accounts receivable, net | 3,086,195 | 3,086,195 | 2,108,099 | ||
Inventory | 1,190,998 | 1,190,998 | 1,369,225 | ||
Prepaid expenses and other current assets | 1,884,542 | 1,884,542 | 917,433 | ||
Total current assets | 8,071,961 | 8,071,961 | 4,955,365 | ||
Property and equipment, net | 932,027 | 932,027 | 931,968 | ||
Total assets | 26,021,906 | 26,021,906 | 23,609,619 | ||
Accounts payable | 3,047,197 | 3,047,197 | 7,397,650 | ||
Accrued expenses and other current liabilities | 1,704,484 | 1,704,484 | 1,594,669 | ||
Deferred revenues | 1,061,989 | 1,061,989 | 159,591 | ||
Line of credit, net of debt issuance costs of $0 and $15,573, respectively | 2,151,108 | 2,151,108 | 456,995 | ||
Notes payable, current | 970,710 | 970,710 | 1,365,675 | ||
Due to related party | 26,784 | 26,784 | 17,253 | ||
Total current liabilities | 11,317,275 | 11,317,275 | 12,973,319 | ||
Revenues, net | 6,880,026 | $ 5,968,255 | 10,547,136 | $ 11,706,789 | |
Cost of revenues | 4,889,784 | 3,924,252 | 7,308,196 | 7,869,810 | |
Gross profit | 1,990,242 | 2,044,003 | 3,283,940 | 3,836,979 | |
Selling, general and administrative | 2,770,930 | 3,392,596 | 6,963,643 | 6,441,784 | |
Operating income | (780,688) | (1,348,593) | (3,724,703) | (2,604,805) | |
Interest expense | (847,154) | (401,170) | (1,571,111) | (525,864) | |
Total other (expense) income | (821,451) | (375,467) | 3,392,056 | (474,457) | |
Loss before income taxes | (1,602,139) | (1,724,060) | (332,647) | (3,079,262) | |
Income tax expense | 51,005 | 74,200 | |||
Net loss | (1,602,139) | (1,775,065) | (332,647) | (3,153,462) | |
Variable Income Interest Rate [Member] | |||||
Cash and cash equivalents | 802,033 | 802,033 | 6,234 | ||
Accounts receivable, net | 955,246 | 955,246 | 21,697 | ||
Inventory | 20,623 | 20,623 | 51,090 | ||
Prepaid expenses and other current assets | 1,412,728 | 1,412,728 | 379,561 | ||
Total current assets | 3,190,630 | 3,190,630 | 458,582 | ||
Property and equipment, net | 24,001 | 24,001 | 32,661 | ||
Total assets | 3,214,631 | 3,214,631 | 491,243 | ||
Accounts payable | 194,738 | 194,738 | 337,648 | ||
Accrued expenses and other current liabilities | 15,806 | 15,806 | |||
Deferred revenues | 907,500 | 907,500 | |||
Line of credit, net of debt issuance costs of $0 and $15,573, respectively | 1,690,945 | 1,690,945 | |||
Notes payable, current | 150,000 | 150,000 | |||
Due to related party | 315,666 | 315,666 | $ 315,666 | ||
Total current liabilities | 3,274,655 | 3,274,655 | |||
Revenues, net | 1,051,945 | 80,120 | 1,274,477 | 285,542 | |
Cost of revenues | 789,000 | 49,590 | 994,923 | 124,659 | |
Gross profit | 262,945 | 30,530 | 279,554 | 160,883 | |
Selling, general and administrative | 136,648 | 100,961 | 203,562 | 192,699 | |
Operating income | 126,297 | (70,431) | 75,992 | (31,816) | |
Interest expense | (21,331) | (56,956) | |||
Total other (expense) income | (21,331) | (56,956) | |||
Loss before income taxes | 104,966 | (70,431) | 19,036 | (31,816) | |
Income tax expense | |||||
Net loss | $ 104,966 | $ (70,431) | $ 19,036 | $ (31,816) |
Variable Interest Entities - _2
Variable Interest Entities - Schedule of Variable Interest Entities (Details) (Parenthetical) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Line of Credit [Member] | ||
Debt issuance costs | $ 0 | $ 15,573 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Credit Loss [Abstract] | ||
Accounts receivable | $ 3,163,956 | $ 2,185,859 |
Less: Allowance for doubtful accounts | (77,761) | (77,760) |
Total accounts receivable, net | $ 3,086,195 | $ 2,108,099 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 25,648 | $ 49,232 |
Finished goods | 1,265,350 | 1,419,993 |
Reserve for obsolescence | (100,000) | (100,000) |
Total inventory | $ 1,190,998 | $ 1,369,225 |
Debt (Details Narrative)
Debt (Details Narrative) | May 28, 2020USD ($)shares | May 19, 2020USD ($) | Apr. 24, 2020USD ($)$ / sharesshares | Apr. 15, 2020USD ($) | Apr. 07, 2020USD ($)d / TradingDays$ / sharesshares | Feb. 21, 2020USD ($) | Jan. 29, 2020USD ($)shares | Jan. 24, 2020USD ($)shares | Jan. 24, 2020USD ($) | Jan. 23, 2020USD ($)$ / sharesshares | Jan. 17, 2020USD ($)shares | Jan. 15, 2020USD ($)shares | Jan. 10, 2020USD ($)shares | Jan. 02, 2020USD ($)shares | Dec. 04, 2019USD ($)$ / sharesshares | Nov. 18, 2019USD ($) | Nov. 12, 2019USD ($) | Apr. 30, 2019 | Jun. 30, 2020USD ($)shares | Jun. 30, 2019USD ($)shares | Apr. 30, 2019 | Jun. 30, 2020USD ($)shares | Jun. 30, 2019USD ($)shares | Dec. 31, 2019USD ($)shares | Mar. 06, 2019USD ($)shares |
Proceeds from convertible notes payable | $ 1,436,000 | $ 1,111,111 | |||||||||||||||||||||||
Beneficial conversion option | $ 588,690 | $ 99,200 | 790,014 | 173,300 | |||||||||||||||||||||
Debt instrument, unamortized discount | $ 595,088 | 595,088 | |||||||||||||||||||||||
Proceeds from notes | 1,767,352 | 1,110,000 | |||||||||||||||||||||||
Payment of debt | $ 143,479 | 427,411 | |||||||||||||||||||||||
Common stock, shares, issued | shares | 9,618,401 | 9,618,401 | 8,015,756 | ||||||||||||||||||||||
Common stock, value, issued | $ 9,618 | $ 9,618 | $ 8,016 | ||||||||||||||||||||||
Interest expense | 847,154 | 401,170 | 2,667,513 | 525,864 | |||||||||||||||||||||
Interest expense, related party | 75,692 | 79,374 | 152,326 | 159,636 | |||||||||||||||||||||
Maximum [Member] | |||||||||||||||||||||||||
Receivables sold | $ 1,250,000 | ||||||||||||||||||||||||
Receivables borrowing, percentage | 85.00% | 80.00% | |||||||||||||||||||||||
Fee percentage of invoices financed | 2.00% | 2.00% | |||||||||||||||||||||||
Minimum [Member] | |||||||||||||||||||||||||
Fee percentage of invoices financed | 1.00% | 1.00% | |||||||||||||||||||||||
12% Convertible Promissory Note [Member] | |||||||||||||||||||||||||
Proceeds from convertible notes payable | $ 588,366 | ||||||||||||||||||||||||
12% Convertible Promissory Note [Member] | Investor [Member] | |||||||||||||||||||||||||
Stock issued during the period, shares | shares | 100,000 | ||||||||||||||||||||||||
Senior Convertible Promissory Note [Member] | |||||||||||||||||||||||||
Debt instrument, face amount | $ 560,000 | ||||||||||||||||||||||||
Debt instrument, unamortized discount | $ 60,000 | ||||||||||||||||||||||||
Payment of debt | $ 588,366 | ||||||||||||||||||||||||
Debt effective interest rate | 2.00% | ||||||||||||||||||||||||
Common stock, shares, issued | shares | 15,000 | ||||||||||||||||||||||||
Common stock, value, issued | $ 74,100 | ||||||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||||
Beneficial conversion option | $ 279 | $ 35 | $ 439 | $ 50 | |||||||||||||||||||||
Beneficial conversion option, shares | shares | 279,400 | 35,000 | 439,400 | 50,000 | |||||||||||||||||||||
Common Stock [Member] | 12% Convertible Promissory Note [Member] | |||||||||||||||||||||||||
Stock issued during the period, shares | shares | 60,000 | ||||||||||||||||||||||||
Greentree Financial Group, Inc. [Member] | Investor [Member] | |||||||||||||||||||||||||
Warrants purchase | shares | 550,000 | ||||||||||||||||||||||||
Warrants description | Loan Agreement, the Note, and the Warrant to: (i) correct the effective date set forth in the Loan Agreement, Note and Warrant to January 23, 2020 and the due date to October 23, 2020, (ii) clarify the terms of the registration right provision in the Loan Agreement such that the Company was required to register a total of 1,500,000 shares of Common Stock, which such amount of shares is the sum of 550,000 shares of Common Stock issuable upon conversion of the Note, 550,000 Warrant Shares, the 100,000 Origination Shares, and 300,000 shares of Common Stock to account for changes to the conversion and/or exercise price under the Note and Warrant, and (iii) to ensure that the total number of shares of Common Stock issued pursuant to the Loan Agreement, the Note, and/or the Warrant, each as amended, does not exceed 17.99% of the Company's issued and outstanding Common Stock as of January 23, 2020. The Company is subject to a $35,000 penalty on a monthly basis if a registration statement is not effective after 105 days from January 23, 2020. | ||||||||||||||||||||||||
Debt instrument, maturity date | Oct. 23, 2020 | ||||||||||||||||||||||||
Beneficial conversion option | $ 586,785 | ||||||||||||||||||||||||
Beneficial conversion option, shares | shares | 550,000 | ||||||||||||||||||||||||
Debt instrument, unamortized discount | $ 296,891 | ||||||||||||||||||||||||
Debt penalty | 35,000 | ||||||||||||||||||||||||
Greentree Financial Group, Inc. [Member] | Warrant shares [Member] | Investor [Member] | |||||||||||||||||||||||||
Stock issued during the period, value | 550,000 | ||||||||||||||||||||||||
Greentree Financial Group, Inc. [Member] | Origination and Advisory Shares [Member] | Investor [Member] | |||||||||||||||||||||||||
Debt instrument, unamortized discount | 201,324 | ||||||||||||||||||||||||
Stock issued during the period, value | $ 160,000 | ||||||||||||||||||||||||
32 Entertainment LLC [Member] | Senior Secured Note [Member] | |||||||||||||||||||||||||
Warrants purchase | shares | 50,000 | ||||||||||||||||||||||||
Warrants price | $ / shares | $ 1.50 | ||||||||||||||||||||||||
Warrants description | The 32E Warrant also contains a conversion limitation provision, which prohibits 32E from exercising the 32E Warrant in an amount that would result in the beneficial ownership of greater than 4.9% of the total issued and outstanding shares of common stock, provided that (i) such exercise limitation may be waived by 32E with 61 days prior notice, and (ii) 32E cannot waive the exercise limitation if conversion of the 32E Warrant would result in 32E having beneficial ownership of greater than 9.9% of the total issued and outstanding shares of common stock. | ||||||||||||||||||||||||
Warrants expiration date | Dec. 4, 2024 | ||||||||||||||||||||||||
Debt instrument, face amount | $ 250,000 | ||||||||||||||||||||||||
Stock issued during the period, shares | shares | 10,000 | ||||||||||||||||||||||||
Debt instrument, maturity date | Dec. 4, 2020 | ||||||||||||||||||||||||
Proceeds from notes | $ 250,000 | ||||||||||||||||||||||||
Debt instrument, description | If the registration statement is not filed or declared effective within the timeframe set forth in the registration rights agreement, the Company was supposed to be obligated to pay to 32E a monthly amount equal to 1% of the total subscription amount paid by 32E until such failure is cured. | ||||||||||||||||||||||||
Debt discount rate | 20.00% | ||||||||||||||||||||||||
32 Entertainment LLC [Member] | Subordinate Secured Note [Member] | |||||||||||||||||||||||||
Debt instrument, face amount | $ 200,000 | ||||||||||||||||||||||||
Debt instrument, maturity date | May 21, 2021 | ||||||||||||||||||||||||
Debt instrument, interest rate | 16.00% | ||||||||||||||||||||||||
Debt periodic payment, principal | $ 50,000 | ||||||||||||||||||||||||
Debt periodic payment, interest | 6,250 | ||||||||||||||||||||||||
Debt periodic payment | $ 56,250 | ||||||||||||||||||||||||
32 Entertainment LLC [Member] | Subordinate Secured Note [Member] | Restricted Stock Units [Member] | |||||||||||||||||||||||||
Stock issued during the period, shares | shares | 40,000 | ||||||||||||||||||||||||
Loan Agreement [Member] | |||||||||||||||||||||||||
Debt instrument, interest rate | 1.50% | ||||||||||||||||||||||||
Loans payable | $ 400,000 | ||||||||||||||||||||||||
Loan Agreement [Member] | Greentree Financial Group, Inc. [Member] | |||||||||||||||||||||||||
Convertible notes payable | $ 1,100,000 | ||||||||||||||||||||||||
Investor purchase percent | 10.00% | ||||||||||||||||||||||||
Debt instrument, conversion price | $ / shares | $ 2 | ||||||||||||||||||||||||
Debt instrument, face amount | $ 1,100,000 | ||||||||||||||||||||||||
Loan Agreement [Member] | Greentree Financial Group, Inc. [Member] | Subsequent Pricing Period [Member] | |||||||||||||||||||||||||
Warrants description | In the event that the average of the 15 lowest closing prices for the Company's common stock on NASDAQ or other primary trading market for the Company's common stock (the average of such lowest closing prices being herein referred to, the "True-up Price") during the period beginning on the effective date of the Registration Statement and ending on the 90th day after the effective date of the Registration Statement (the "Subsequent Pricing Period") is less than $2.00 per share, then the Company will issue the Lender additional shares of the Company's common stock (the "True-up Shares") within three days. No value has been assigned to the True-up Shares due to the contingency of an effective Registration Statement. | ||||||||||||||||||||||||
Debt instrument, conversion price | $ / shares | $ 2 | ||||||||||||||||||||||||
Loan Agreement [Member] | Greentree Financial Group, Inc. [Member] | Warrant [Member] | |||||||||||||||||||||||||
Warrants purchase | shares | 550,000 | ||||||||||||||||||||||||
Warrants price | $ / shares | $ 0.001 | ||||||||||||||||||||||||
Warrants description | The Note is convertible at any time at a price of $2.00 per share, subject to certain adjustments to the conversion price set forth in the Note. The Note reiterates the registration rights set forth in the Loan Agreement and the Warrant. There is no prepayment penalty on the Note. If the Note is not prepaid by the 90th day after the effective date of the Registration Statement, the Investor is required to convert the entire amount of principal and interest outstanding on the Note at that time, at a price of $2.00 per share, unless an event of default (as such events are described in the Note) under the Note has occurred, in which case the Note would be mandatorily converted at a price equal to 50% of the lowest trading price of the Common Stock for the last 10 trading days immediately prior to, but not including, the date that the Note mandatorily converts. In the event that the average of the 15 lowest closing prices for the Company's common stock on NASDAQ or other primary trading market for the Company's common stock (the average of such lowest closing prices being herein referred to, the "True-up Price") during the period beginning on the effective date of the Registration Statement and ending on the 90th day after the effective date of the Registration Statement (the "Subsequent Pricing Period") is less than $2.00 per share, then the Company will issue the Lender additional shares of the Company's common stock (the "True-up Shares") within three days. No value has been assigned to the True-up Shares due to the contingency of an effective Registration Statement. The warrant has an exercise price of $2.00 per share, subject to certain adjustments to the exercise price set forth in the Warrant. The Warrant, as amended, expires on January 23, 2023. If the closing price per share of the Common Stock reported on the day immediately preceding an exercise of the Warrant is greater than $2.00 per share, the Warrant may be exercised cashlessly, based on a cashless exercise formula. The Warrant reiterates the registration rights set forth in the Loan Agreement and the Note. The Warrant also contains a repurchase provision, which at any time after the Registration Statement is effective and the Common Stock has traded at a price over $3.00 share for 20 consecutive days, gives the Company a 30-day option to repurchase any unexercised portion of the Warrant at a price of $1.00 per share | ||||||||||||||||||||||||
Warrants expiration date | Jan. 23, 2023 | ||||||||||||||||||||||||
Loan Agreement [Member] | Ed Roses, LLC [Member] | Sook Hyun Lee [Member] | |||||||||||||||||||||||||
Warrants expiration date | Apr. 15, 2020 | ||||||||||||||||||||||||
Debt instrument, interest rate | 15.00% | ||||||||||||||||||||||||
Loans payable | $ 150,000 | ||||||||||||||||||||||||
Common stock in reserve | shares | 75,000 | ||||||||||||||||||||||||
Commitment fee | $ 30,000 | ||||||||||||||||||||||||
Loan Agreement [Member] | Edison Nation Inc. [Member] | Paycheck Protection Program [Member] | |||||||||||||||||||||||||
Debt instrument, maturity date | Apr. 15, 2022 | ||||||||||||||||||||||||
Debt instrument, interest rate | 1.00% | ||||||||||||||||||||||||
Proceeds from loan | $ 789,852 | ||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Jefferson Street Capital, LLC [Member] | Investor [Member] | |||||||||||||||||||||||||
Debt instrument, conversion price | $ / shares | $ 2.05 | ||||||||||||||||||||||||
Debt instrument, face amount | $ 168,000 | ||||||||||||||||||||||||
Stock issued during the period, shares | shares | 10,700 | ||||||||||||||||||||||||
Debt instrument, unamortized discount | $ 18,000 | ||||||||||||||||||||||||
Proceeds from notes | $ 150,000 | ||||||||||||||||||||||||
Debt instrument, description | The Note has a term of six (6) months, is due on October 7, 2020 and has a one-time interest charge of 2%. | ||||||||||||||||||||||||
Debt conversion description | Upon an Event of Default, the Conversion Price shall equal the Alternate Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower's securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Alternate Conversion Price" shall equal the lesser of (i) 80% multiplied by the average of the three lowest daily volume weighted average prices ("VWAP") during the previous twenty (20) Trading Days (as defined below) before the Issue Date of this Note (representing a discount rate of 20%) or (ii) 80% multiplied by the Market Price (as defined herein) (representing a discount rate of 20%). "Market Price" means the average of the three lowest daily VWAPs for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. | ||||||||||||||||||||||||
Trading days | d / TradingDays | 20 | ||||||||||||||||||||||||
Securities Purchase Agreement [Member] | BHP Capital NY Inc [Member] | Investor [Member] | |||||||||||||||||||||||||
Debt instrument, conversion price | $ / shares | $ 2.05 | ||||||||||||||||||||||||
Debt instrument, face amount | $ 168,000 | ||||||||||||||||||||||||
Stock issued during the period, shares | shares | 10,700 | ||||||||||||||||||||||||
Debt instrument, unamortized discount | $ 18,000 | ||||||||||||||||||||||||
Proceeds from notes | $ 150,000 | ||||||||||||||||||||||||
Debt instrument, description | The Note has a term of six (6) months, is due on October 7, 2020 and has a one-time interest charge of 2%. | ||||||||||||||||||||||||
Debt conversion description | Upon an Event of Default, the Conversion Price shall equal the Alternate Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower's securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Alternate Conversion Price" shall equal the lesser of (i) 80% multiplied by the average of the three lowest daily volume weighted average prices ("VWAP") during the previous twenty (20) Trading Days (as defined below) before the Issue Date of this Note (representing a discount rate of 20%) or (ii) 80% multiplied by the Market Price (as defined herein) (representing a discount rate of 20%). "Market Price" means the average of the three lowest daily VWAPs for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. | ||||||||||||||||||||||||
Trading days | d / TradingDays | 20 | ||||||||||||||||||||||||
Debt discount rate | 20.00% | ||||||||||||||||||||||||
Debt Conversion Agreement [Member] | |||||||||||||||||||||||||
Debt instrument, conversion price | $ / shares | $ 2 | ||||||||||||||||||||||||
Debt instrument, face amount | $ 424,000 | ||||||||||||||||||||||||
Share issued price per share | $ / shares | $ 2.08 | ||||||||||||||||||||||||
Stock issued for restricted common stock | shares | 212,000 | ||||||||||||||||||||||||
5% Promissory Note Agreement [Member] | Ralls Note [Member] | |||||||||||||||||||||||||
Warrants purchase | shares | 125,000 | ||||||||||||||||||||||||
Warrants expiration date | Jul. 10, 2020 | ||||||||||||||||||||||||
Debt instrument, face amount | $ 267,000 | ||||||||||||||||||||||||
Debt instrument, unamortized discount | 17,000 | ||||||||||||||||||||||||
Payment of debt | 250,000 | ||||||||||||||||||||||||
Issuance of warrants purchase value | $ 86,725 | ||||||||||||||||||||||||
Incentive shares | shares | 33,000 | ||||||||||||||||||||||||
Incentive shares, value | $ 79,860 | ||||||||||||||||||||||||
5% Promissory Note Agreement [Member] | Solit Note [Member] | |||||||||||||||||||||||||
Warrants purchase | shares | 50,000 | ||||||||||||||||||||||||
Warrants expiration date | Jul. 15, 2020 | ||||||||||||||||||||||||
Debt instrument, face amount | $ 107,000 | ||||||||||||||||||||||||
Debt instrument, unamortized discount | 7,000 | ||||||||||||||||||||||||
Payment of debt | 100,000 | ||||||||||||||||||||||||
Issuance of warrants purchase value | $ 31,755 | ||||||||||||||||||||||||
Incentive shares | shares | 13,000 | ||||||||||||||||||||||||
Incentive shares, value | $ 30,420 | ||||||||||||||||||||||||
5% Promissory Note Agreement [Member] | 'O'Leary Note [Member] | |||||||||||||||||||||||||
Warrants purchase | shares | 25,000 | ||||||||||||||||||||||||
Warrants expiration date | Jul. 17, 2020 | ||||||||||||||||||||||||
Debt instrument, face amount | $ 53,500 | ||||||||||||||||||||||||
Debt instrument, unamortized discount | 3,500 | ||||||||||||||||||||||||
Payment of debt | 50,000 | ||||||||||||||||||||||||
Issuance of warrants purchase value | $ 16,797 | ||||||||||||||||||||||||
Incentive shares | shares | 6,500 | ||||||||||||||||||||||||
Incentive shares, value | $ 15,535 | ||||||||||||||||||||||||
Receivables Purchase Agreement [Member] | |||||||||||||||||||||||||
Receivables sold | $ 337,500 | $ 250,000 | |||||||||||||||||||||||
Proceeds from receivables | $ 250,000 | $ 200,000 | |||||||||||||||||||||||
Secured Line of Credit Agreement [Member] | |||||||||||||||||||||||||
Debt instrument, face amount | $ 2,500,000 | $ 2,500,000 | |||||||||||||||||||||||
Debt instrument, description | In the event of a default, any and all amounts due to PPE by Global, including principal and accrued but unpaid interest, shall increase by forty (40%) percent and the interest shall increase to five (5%) percent (the "Default Interest"). | ||||||||||||||||||||||||
Debt instrument, interest rate | 3.00% | 3.00% | |||||||||||||||||||||||
Debt instrument term | 6 months |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Debt issuance costs | $ (15,573) | |
Total lines of credit | 2,151,108 | 456,995 |
Convertible notes payable | 336,000 | |
Less: current portion of long-term convertible notes payable | 900,765 | |
Total long-term debt | 6,208,678 | |
Less: current portion of long-term debt | (970,710) | (1,365,675) |
Noncurrent portion of long-term debt | 825,004 | 42,492 |
Notes payable | 2,667,513 | 3,282,021 |
Less: current portion of long-term debt - related parties | (1,166,365) | (1,686,352) |
Noncurrent portion of long-term debt - related parties | 1,501,148 | 1,595,669 |
Senior Convertible Notes Payable [Member] | ||
Senior convertible notes payable - related parties | 1,428,161 | |
Senior convertible notes payable | 1,100,000 | 1,428,161 |
Debt issuance costs | (851,901) | (366,666) |
Total convertible notes payable | 2,012,260 | 1,061,495 |
Noncurrent portion of long-term convertible notes payable | 1,111,495 | |
Notes Payable [Member] | ||
Debt issuance costs | (86,350) | (212,848) |
Notes payable | 1,882,064 | 1,621,015 |
Total long-term debt | 1,795,714 | 1,408,167 |
Less: current portion of long-term debt | (970,710) | (1,365,675) |
Secured Line of Credit [Member] | ||
Lines of credit | 1,690,945 | |
Receivables Financing [Member] | ||
Lines of credit | $ 460,163 | $ 472,567 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Long-term Debt (Details) | Jun. 30, 2020USD ($) |
Debt Disclosure [Abstract] | |
2020 (excluding the six months ended June 30, 2020) | $ 3,737,443 |
2021 | 206,760 |
2022 | 1,419,285 |
2023 | 1,440,278 |
2024 | |
Thereafter | |
Long-term Debt, Gross | 6,803,766 |
Less: debt discount | (595,088) |
Long-term Debt | $ 6,208,678 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Income Tax Disclosure [Abstract] | |
Gain on divestiture | $ 4,911,760 |
Operating loss carryforwards | $ 1,030,000 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Tax at federal statutory rate | 21.00% | 21.00% |
U.S. income subject to valuation allowance | (21.00%) | (21.00%) |
Foreign tax | 0.00% | (1.70%) |
Effective income tax rate | 0.00% | (1.70%) |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Due to related parties, current | $ 26,784 | $ 17,253 |
SRM LLC and NL Penn Capital, LP. [Member] | ||
Due to related parties, current | $ 57,784 | $ 17,253 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Apr. 14, 2020 | Feb. 12, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Operating lease, liability | $ 326,482 | $ 326,482 | |||||
Right of use assets - operating leases, net | 578,280 | 578,280 | $ 732,100 | ||||
Operating cash outflows relating to operating lease liabilities | 81,105 | 164,091 | |||||
Operating lease expense | $ 75,997 | $ 153,818 | |||||
Operating lease, weighted average remaining lease term | 3 years 8 months 12 days | 3 years 8 months 12 days | |||||
Operating lease, weighted average discount rate, percent | 4.50% | 4.50% | |||||
Operating leases, rent expense | $ 122,943 | $ 138,070 | $ 269,709 | $ 282,503 | |||
Rental income | $ 25,703 | $ 25,703 | $ 51,407 | $ 51,407 | |||
Oceanside Traders, LLC [Member] | |||||||
Legal settlement amount | $ 443,383 | ||||||
Settlement costs | 284,249 | ||||||
Oceanside Traders, LLC [Member] | Plaintiff for Goods Sold [Member] | |||||||
Legal settlement amount | 141,007 | ||||||
Oceanside Traders, LLC [Member] | Overpayments [Member] | |||||||
Legal settlement amount | 138,180 | ||||||
Oceanside Traders, LLC [Member] | Lost Profits [Member] | |||||||
Legal settlement amount | $ 279,187 | ||||||
Rosenberg Fortuna & Laitman LLP [Member] | |||||||
Legal settlement amount | $ 50,000 | ||||||
Settlement costs | $ 50,000 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2020 | Dec. 31, 2019 | Feb. 09, 2018 | |
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 30,000,000 | 30,000,000 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Share-based compensation arrangement by share-based payment award, options, nonvested, number of shares | 26,667 | ||
Employee service share-based compensation, nonvested awards, compensation not yet recognized, stock options | $ 15,535 | ||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 1 year | ||
Omnibus Incentive Plan [Member] | |||
Share-based compensation arrangement by share-based payment award, number of shares authorized | 1,764,705 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Share-based Compensation, Stock Options, Activity (Details) | 6 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | |
Equity [Abstract] | |
Shares, Balance, January 1, 2020 | shares | 80,000 |
Shares, Granted | shares | |
Shares, Balance, June 30, 2020 | shares | 80,000 |
Shares, Exercisable, Balance, June 30, 2020 | shares | 53,333 |
Weighted Average Exercise Price, Balance, January 1, 2020 | $ / shares | $ 7.01 |
Weighted Average Exercise Price, Granted | $ / shares | |
Weighted Average Exercise Price, Balance, June 30, 2020 | $ / shares | 7.01 |
Weighted Average Exercise Price, Exercisable, Balance, June 30, 2020 | $ / shares | $ 7.01 |
Remaining Contractual Life in Years, Balance, January 1, 2020 | 3 years 8 months 12 days |
Remaining Contractual Life in Years, Granted | 0 years |
Remaining Contractual Life in Years, Balance, June 30, 2020 | 3 years 6 months |
Remaining Contractual Life in Years, Exercisable, Balance, June 30, 2020 | 3 years 6 months |
Aggregate Intrinsic Value, Balance, January 1, 2020 | $ | |
Aggregate Intrinsic Value, Granted | $ | |
Aggregate Intrinsic Value, Balance, June 30, 2020 | $ | |
Aggregate Intrinsic Value, Exercisable, Balance, June 30, 2020 | $ |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Aug. 12, 2020 | Aug. 04, 2020 | Aug. 03, 2020 | Jul. 29, 2020 | Jul. 24, 2020 | Jul. 23, 2020 | Jul. 14, 2020 | Jul. 06, 2020 | Jul. 02, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Stock issued during period, incentive shares value | $ 88,625 | $ 141,125 | |||||||||||
Original issue discount | $ 595,088 | ||||||||||||
Common stock, shares, outstanding | 9,618,401 | 8,015,756 | |||||||||||
Proceeds from notes | $ 1,767,352 | $ 1,110,000 | |||||||||||
Subsequent Event [Member] | Purchase of Inventory and Repurchase Agreement [Member] | |||||||||||||
Commitment fee | $ 13,053 | ||||||||||||
Agreement description | Under the terms of the Amendment, (i) the repurchase date is extended to December 10, 2020; and (ii) the Company agreed to pay the Purchaser-Assignee a commitment fee of $13,053, and (iii) the Company agreed to pay the Purchaser-Assignee 2% per month for extension | ||||||||||||
Subsequent Event [Member] | Consultant [Member] | |||||||||||||
Stock issued during the period, incentive shares | 25,000 | ||||||||||||
Stock issued during period, incentive shares value | $ 61,000 | ||||||||||||
Subsequent Event [Member] | Richard O'Leary [Member] | Note Agreement [Member] | Warrant [Member] | |||||||||||||
Extended maturity date of agreement | Jan. 17, 2021 | ||||||||||||
Original issue discount | $ 7,000 | ||||||||||||
Additional incentive shares | 6,500 | ||||||||||||
Expiration date of warrant | Jun. 30, 2021 | ||||||||||||
Additional incentive shares, value | $ 24,570 | ||||||||||||
Subsequent Event [Member] | Paul J. Solit and Julie B. Solit [Member] | Note Agreement [Member] | Warrant [Member] | |||||||||||||
Stock issued during the period, incentive shares | 13,000 | ||||||||||||
Extended maturity date of agreement | Dec. 15, 2020 | ||||||||||||
Original issue discount | $ 14,000 | ||||||||||||
Additional incentive shares | 13,000 | ||||||||||||
Additional incentive shares, value | $ 49,140 | ||||||||||||
Subsequent Event [Member] | Note Holder [Member] | |||||||||||||
Stock issued during the period, incentive shares | 320,000 | ||||||||||||
Stock issued during period, incentive shares value | $ 1,158,400 | ||||||||||||
Principal amount | $ 360,000 | 360,000 | |||||||||||
Interest | 131,889 | $ 131,889 | |||||||||||
Proceeds from notes | $ 370,000 | ||||||||||||
Stock issued during the period, shares | 1,394,900 | ||||||||||||
Subsequent Event [Member] | Consultant One [Member] | |||||||||||||
Stock issued during the period, incentive shares | 113,312 | ||||||||||||
Stock issued during period, incentive shares value | $ 379,595 | ||||||||||||
Subsequent Event [Member] | Consultant Two [Member] | |||||||||||||
Stock issued during the period, incentive shares | 113,312 | ||||||||||||
Stock issued during period, incentive shares value | $ 379,595 | ||||||||||||
Subsequent Event [Member] | Consultants [Member] | |||||||||||||
Stock issued during the period, incentive shares | 20,000 | 30,000 | |||||||||||
Stock issued during period, incentive shares value | $ 75,400 | $ 116,700 | |||||||||||
Subsequent Event [Member] | O'Leary Financing [Member] | |||||||||||||
Stock issued during the period, incentive shares | 6,500 | ||||||||||||
Stock issued during period, incentive shares value | $ 15,535 | ||||||||||||
Subsequent Event [Member] | Equity Trust Company [Member] | Note Agreement [Member] | Warrant [Member] | |||||||||||||
Stock issued during the period, incentive shares | 33,000 | ||||||||||||
Extended maturity date of agreement | Jan. 10, 2021 | ||||||||||||
Original issue discount | $ 34,000 | ||||||||||||
Additional incentive shares | 33,000 | ||||||||||||
Additional incentive shares, value | $ 124,740 | ||||||||||||
Common stock, shares, outstanding | 191,000 | ||||||||||||
Class of warrant or right, outstanding | 125,000 | ||||||||||||
Subsequent Event [Member] | Jefferson Street Capital, LLC [Member] | Investor [Member] | |||||||||||||
Original issue discount | $ 24,000 | ||||||||||||
Principal amount | 224,000 | ||||||||||||
Proceeds from notes | $ 200,000 | ||||||||||||
Debt instrument description | The Note has a term of six (6) months, is due on January 29, 2021 and has a one-time interest charge of 2%. | ||||||||||||
Stock issued during the period, shares | 14,266 | ||||||||||||
Debt instrument, conversion price | $ 2.05 |