Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 15, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-56230 | |
Entity Registrant Name | Kona Gold Beverage, Inc. | |
Entity Central Index Key | 0001802546 | |
Entity Tax Identification Number | 81-5175120 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 746 North Drive | |
Entity Address, Address Line Two | Suite A | |
Entity Address, Address Line Three | ||
Entity Address, City or Town | Melbourne | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 32934 | |
City Area Code | 844 | |
Local Phone Number | 714-2224 | |
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 | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 960,236,003 |
Unaudited Consolidated Balance
Unaudited Consolidated Balance Sheet - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 546,528 | $ 113,168 |
Accounts receivable, net of allowance for doubtful accounts of $7,709 and $3,967, respectively | 63,715 | |
Other receivables | 14,876 | 14,876 |
Inventory | 866,613 | 660,504 |
Prepaids | 62,200 | |
Other current assets | 6,517 | 5,572 |
Total current assets | 1,560,449 | 794,120 |
NON-CURRENT ASSETS | ||
Property, plant and equipment, net | 281,029 | 167,872 |
Right-of-use asset, net | 1,219,103 | 912,993 |
Intangible property, net | 74,744 | 69,488 |
Goodwill | 1,275,938 | 0 |
Note receivable, net of allowance $1,500,000 and $0, respectively | ||
Deposit | 12,750 | 6,500 |
Total non-current assets | 2,863,564 | 1,156,853 |
Total assets | 4,424,013 | 1,950,973 |
CURRENT LIABILITIES | ||
Accounts payable | 206,123 | 208,599 |
Amounts owed to customers | 10,508 | |
Credit card payables | 4,009 | 19,469 |
Current note payable | 1,994 | |
Current note payable - related party | 1,500 | 12,000 |
Current lease liability | 41,806 | 149,407 |
Convertible debt | 2,400,000 | 900,000 |
Derivative liability | 1,225,741 | 361,152 |
Accrued compensation | 389,583 | 257,500 |
Accrued stock compensation | 1,386,497 | 1,386,497 |
Accrued liabilities | 183,757 | 81,624 |
Total current liabilities | 5,841,010 | 3,386,756 |
NON-CURRENT LIABILITIES | ||
Line of credit | 198,470 | 398,470 |
Line of credit - related party | 1,478,151 | 1,495,151 |
Note payable - related party, net of current | 53,500 | 56,000 |
Note payable - acquisition | 590,418 | |
Note payable | 32,769 | |
PPP note payable | 117,487 | 95,161 |
Lease liability, net of current | 1,177,297 | 763,586 |
Total liabillities | 9,489,102 | 6,195,124 |
STOCKHOLDERS’ DEFICIT | ||
Common Stock, $.00001 par value, 2,500,000,000 authorized, 883,068,249, and 786,308,041, issued and outstanding, respectively | 8,831 | 7,863 |
Additional paid-in capital - warrants | 2,027,691 | 281,565 |
Additional paid-in capital | 6,601,818 | 4,746,447 |
Accumulated deficit | (13,703,438) | (9,280,036) |
Total stockholders’ deficit | (5,065,089) | (4,244,151) |
Total liabilities and stockholders’ deficit | 4,424,013 | 1,950,973 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS’ DEFICIT | ||
Preferred Stock, Value, Issued | ||
Series B Preferred Stock [Member] | ||
STOCKHOLDERS’ DEFICIT | ||
Preferred Stock, Value, Issued | 5 | 5 |
Series C Preferred Stock [Member] | ||
STOCKHOLDERS’ DEFICIT | ||
Preferred Stock, Value, Issued | ||
Series D Preferred Stock [Member] | ||
STOCKHOLDERS’ DEFICIT | ||
Preferred Stock, Value, Issued | $ 5 | $ 5 |
Unaudited Consolidated Balanc_2
Unaudited Consolidated Balance Sheet (Parenthetical) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Allowance for doubtful accounts | $ 7,709 | $ 3,967 |
Allowance for note receivable | $ 1,500,000 | $ 0 |
Preferred Stock, par value | $ 0.00001 | |
Preferred Stock, shares outstanding | 988,140 | |
Common Stock, par value | $ 0.00001 | $ 0.00001 |
Common Stock, shares authorised | 2,500,000,000 | 2,500,000,000 |
Common Stock, shares issued | 883,068,249 | 786,308,041 |
Common Stock, shares outstanding | 883,068,249 | 786,308,041 |
Series A Preferred Stock [Member] | ||
Preferred Stock, par value | $ 0.00001 | $ 0.00001 |
Preferred Stock, shares authorised | 0 | 0 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Series B Preferred Stock [Member] | ||
Preferred Stock, par value | $ 0.00001 | $ 0.00001 |
Preferred Stock, shares authorised | 1,200,000 | 1,200,000 |
Preferred Stock, shares issued | 488,000 | 488,000 |
Preferred Stock, shares outstanding | 488,000 | 488,000 |
Series C Preferred Stock [Member] | ||
Preferred Stock, par value | $ 0.00001 | $ 0.00001 |
Preferred Stock, shares authorised | 250 | 250 |
Preferred Stock, shares issued | 0 | 140 |
Preferred Stock, shares outstanding | 0 | 140 |
Series D Preferred Stock [Member] | ||
Preferred Stock, par value | $ 0.00001 | $ 0.00001 |
Preferred Stock, shares authorised | 500,000 | 500,000 |
Preferred Stock, shares issued | 500,000 | 500,000 |
Preferred Stock, shares outstanding | 500,000 | 500,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
REVENUES, NET OF SALES, RETURNS, AND ALLOWANCES OF $16,599 AND $6,600; and $61,041 AND $30,655, RESPECTIVELY | $ 545,375 | $ 312,709 | $ 1,798,999 | $ 741,812 |
COST OF REVENUES | 442,766 | 222,111 | 1,443,727 | 523,774 |
Gross profit | 102,609 | 90,598 | 355,272 | 218,038 |
OPERATING EXPENSES | ||||
Selling, general and administrative expenses | 756,110 | 500,233 | 1,968,841 | 1,840,004 |
Income (Loss) from operations | (653,501) | (409,635) | (1,613,569) | (1,621,966) |
Other income / (expense) | ||||
Interest expense | (17,149) | (20,628) | (52,091) | (38,246) |
Interest expense related to loan origination fee on convertible note | (70,000) | (10,000) | (135,000) | (25,000) |
Interest expense related to warrants on convertible note | (693,555) | (1,746,125) | (281,565) | |
Interest expense on convertible note | (36,767) | (80,121) | ||
Gain/(Loss) on derivative | (740,220) | (69,178) | (864,589) | (217,806) |
Tax expense | (19,523) | (27,065) | ||
Gain on the extinquishment of debt | 95,161 | |||
EIDL advance | 7,000 | |||
Other income | 6,291 | |||
Net Income (Loss) | $ (2,230,715) | $ (509,441) | $ (4,423,399) | $ (2,171,292) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES: | ||||
Basic and diluted | 829,027,793 | 771,268,436 | 829,027,793 | 771,268,436 |
NET LOSS PER COMMON SHARES: | ||||
Basic and diluted | $ 0 | $ 0 | $ (0.01) | $ 0 |
CONSOLIDATED STATEMENTS OF IN_2
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Allowence for net of sales | $ 16,599 | $ 6,600 | $ 61,041 | $ 30,655 |
STATEMENTS OF STOCKHOLDERS' DEF
STATEMENTS OF STOCKHOLDERS' DEFICIT (Unaudited) - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 7,640 | $ 50 | $ 4,155,777 | $ (6,154,441) | $ (1,990,976) |
Beginning balance, shares at Dec. 31, 2019 | 763,967,603 | 4,988,000 | |||
Common Stock Issued for Compensation | $ 50 | 318,450 | 318,500 | ||
Common Stock Issued for Compensation, shares | 5,000,000 | ||||
Net Income (loss) | (475,644) | (475,644) | |||
Ending balance, value at Mar. 31, 2020 | $ 7,690 | $ 50 | 4,474,227 | (6,630,085) | (2,148,120) |
Ending balance, shares at Mar. 31, 2020 | 768,967,603 | 4,988,000 | |||
Common Stock Issued for Sponsorship Agreements | $ 1 | 2,577 | 2,578 | ||
Common Stock Issued for Sponsorship Agreements, shares | 85,000 | ||||
Common Stock Issued for Compensation | $ 50 | 157,450 | 157,500 | ||
Common Stock Issued for Compensation, shares | 5,000,000 | ||||
Warrants related to convertible note | 281,565 | 281,565 | |||
Net Income (loss) | (1,066,920) | (1,066,920) | |||
Ending balance, value at Jun. 30, 2020 | $ 7,741 | $ 50 | 4,915,819 | (7,697,005) | (2,773,397) |
Ending balance, shares at Jun. 30, 2020 | 774,052,603 | 4,988,000 | |||
Common Stock Conversion to Preferred Stock | $ 0 | $ 0 | |||
Common Stock Conversion to Preferred Stock, shares | (140) | 140 | |||
Preferred Stock Conversion to Common Stock | $ 40 | $ (40) | |||
Preferred Stock Conversion to Common Stock, shares | 4,000,000 | (4,000,000) | |||
Accrued Common Stock Issues for Compensation | $ 0 | 2 | 2 | ||
Accrued Common Stock Issues for Compensation, Shares | 140 | ||||
Net Income (loss) | (509,441) | (509,441) | |||
Ending balance, value at Sep. 30, 2020 | $ 7,781 | $ 10 | 4,915,821 | (8,206,446) | (3,282,836) |
Ending balance, shares at Sep. 30, 2020 | 778,052,603 | 988,140 | |||
Common Stock Issued for Conversion of Convertible Debt | $ 83 | 112,191 | 112,274 | ||
Common Stock Issued for Conversion of Convertible Debt, shares | 8,255,438 | ||||
Net Income (loss) | (1,073,590) | (1,073,590) | |||
Ending balance, value at Dec. 31, 2020 | $ 7,863 | $ 10 | 5,028,012 | (9,280,036) | (4,244,153) |
Ending balance, shares at Dec. 31, 2020 | 786,308,041 | 988,140 | |||
Common Stock Issued for Conversion of Convertible Debt | $ 304 | 613,505 | 613,809 | ||
Common Stock Issued for Conversion of Convertible Debt, shares | 30,418,798 | ||||
Common Stock Issued for Acquisition | $ 90 | 270,810 | 270,900 | ||
Common Stock Issued for Acquisition, shares | 9,000,000 | ||||
Warrants related to convertible note | 1,052,571 | 1,052,571 | |||
Net Income (loss) | (1,819,503) | (1,819,503) | |||
Ending balance, value at Mar. 31, 2021 | $ 8,257 | $ 10 | 6,964,898 | (11,099,539) | (4,126,375) |
Ending balance, shares at Mar. 31, 2021 | 825,726,839 | 988,140 | |||
Common Stock Issued for Conversion of Convertible Debt | $ 250 | 508,924 | 509,174 | ||
Common Stock Issued for Conversion of Convertible Debt, shares | 25,045,798 | ||||
Net Income (loss) | (373,181) | (373,181) | |||
Ending balance, value at Jun. 30, 2021 | $ 8,508 | $ 10 | 7,473,822 | (11,472,720) | (3,990,381) |
Ending balance, shares at Jun. 30, 2021 | 850,772,637 | 988,140 | |||
Common Stock Issued for Conversion of Convertible Debt | $ 292 | 406,360 | 406,652 | ||
Common Stock Issued for Conversion of Convertible Debt, shares | 29,195,472 | ||||
Common Stock Issued for Compensation | $ 31 | 55,769 | 55,800 | ||
Common Stock Issued for Compensation, shares | 3,100,000 | ||||
Warrants related to convertible note | 693,555 | 693,555 | |||
Net Income (loss) | (2,230,715) | (2,230,715) | |||
Preferred Stock Conversion to Common Stock | $ 0 | $ 0 | 3 | (3) | 3 |
Preferred Stock Conversion to Common Stock, shares | 140 | 140 | |||
Ending balance, value at Sep. 30, 2021 | $ 8,831 | $ 10 | $ 8,629,509 | $ (13,703,438) | $ (5,065,086) |
Ending balance, shares at Sep. 30, 2021 | 883,068,249 | 988,280 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: | ||
Net loss | $ (4,423,399) | $ (2,171,292) |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation and Amortization | 32,755 | 24,778 |
Common Stock Issued in Exchange for Services | ||
Common Stock Issued in Acquisition | 270,900 | |
Common Stock Issued for Sponsorship | 2,578 | |
Common Stock Issued for Compensation | 55,800 | 476,002 |
Interest expense related to warrants on convertible debt | 1,746,126 | 281,565 |
Changes in operating assets and liabilities: | ||
Decrease (increase) in accounts receivable | (74,223) | 20,620 |
Decrease (increase) in other receivable | ||
Decrease (increase) in inventory | (206,109) | (24,019) |
Decrease (increase) in prepaids | (62,200) | |
Decrease (increase) in intercompany transactions | ||
Decrease (increase) in other current assets | (945) | (3,897) |
Decrease (increase) in deposits | (6,250) | |
Decrease (increase) in right-of-use asset | (306,110) | (306,006) |
Increase (decrease) in accounts payable | (2,476) | 74,304 |
Increase (decrease) in credit card payable | (15,461) | 8,116 |
Increase (decrease) in accrued compensation | 132,083 | 196,042 |
Increase (decrease) in accrued stock compensation | (4) | |
Increase (decrease) in accrued expenses | 102,133 | 37,666 |
Increase (decrease) in derivative liability | 864,589 | 217,806 |
Increase (decrease) in lease liability | 306,110 | 287,140 |
Net cash provided by (used in) operating activities | (1,586,677) | (878,601) |
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (145,912) | (54,134) |
Changes in goodwill | (1,275,938) | |
Changes in intellectual property | (5,256) | 6,132 |
Net cash provided by (used in) investing activities | (1,427,106) | (48,002) |
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES: | ||
Changes in note payable - related party | (13,000) | (9,000) |
Changes in line of credit - related party | (217,000) | 325,500 |
Changes in note payable - acquisition | 590,418 | |
Changes in note payable | 34,763 | |
Changes line of credit | ||
Changes in convertible debt | 3,029,636 | 500,000 |
Changes in PPP note payable | 22,326 | 95,161 |
Net cash provided by (used in) financing activities | 3,447,143 | 911,661 |
Net cash increase for period | 433,360 | (14,942) |
Cash at beginning of period | 113,168 | 36,223 |
Cash at end of period | 546,528 | 21,281 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for income taxes | 27,065 | |
Cash paid for interest | 52,091 | 38,246 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Preferred Stock Conversion to Common Shares | $ 3 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Kona Gold Beverage, Inc., a Delaware corporation (“Kona Gold,” the “Company,” “we,” “us,” or “our”), owns and operates a line of premier CBD lifestyle brand and other products. As of September 30, 2021 the Company has four wholly-owned subsidiaries: Kona Gold LLC, a Delaware limited liability company (“Kona”), HighDrate LLC, a Florida limited liability company (“HighDrate”), Gold Leaf Distribution LLC, a Florida limited liability company (“Gold Leaf”), and S and S Beverage, Inc. (“S and S”), a Wisconsin corporation, which the Company acquired in February 2021. The Company is primarily focused on product development in the functional beverage sector. Kona Gold creates hemp-infused energy drinks, which includes hemp energy drinks, CBD energy water, and also sells Kona Gold merchandise and apparel, which promotes the Company’s beverages. HighDrate focuses on the development and marketing of CBD-infused energy waters geared towards the fitness and wellness markets. S and S creates and sells unique lemon flavored drinks under the “Ooh La Lemin” brand name. Gold Leaf focuses on the distribution of premium beverages and snacks in key markets. The Company currently sells its products through resellers, the Company’s websites, and distributors that span across 27 states. The Company’s products are available in wide variety of stores, including grocery stores, convenience stores, smoke shops, and gift shops. As used herein, the terms “Kona Gold,” the “Company,” “we,” “us,” or “our, refer to Kona Gold individually or, as the context requires, collectively with its subsidiaries on a consolidated basis. The Company’s Business The Company has two reportable segments: ● Beverages. ● Distribution. Beverage Products The Company’s hemp-infused energy drink is available in both regular and sugar-free options. These energy drinks are infused with organic hemp protein powder and contain essential vitamins and ingredients that give consumers a natural energy boost. Hemp protein contains no gluten and is compatible with a variety of diets, including vegan and Kosher. Our hemp energy drinks are available in eight flavors: classic hemp, platinum hemp, sugar-free hemp, cherry vanilla, bubble gum, candy apple, cotton candy, and pink grapefruit. HighDrate’s CBD-infused energy water is great tasting, sugar-free, and powered by the patented technology of Alkame Holdings Inc.’s wholly-owned subsidiary, Alkame Water Inc. (“Alkame”), which uses its advanced water treatment to create a premium oxygenated alkaline water with natural antioxidants. Alkame believes that, pursuant to a double-blind placebo, peer-backed research project that it conducted, its Level 2 – inputs other than Level 1 that are observable, either directly or indirectly; such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets and liabilities in markets technology can boost the immune system and physical performance. HighDrate’s CBD-infused energy water contains 80 mg of caffeine and 10 mg of CBD. The Company believes that CBD aids the body’s endocannabinoid system in neuroprotection, stress recovery, immune balance, and homeostatic regulation. HighDrate’s CBD-infused energy water is available in six flavors: watermelon, kiwi strawberry, tropical coconut, Georgia peach, sour apple, and blue island punch. The Company’s product “Storm” is a high-alkaline CBD-infused water. This water is also powered by Alkame’s patented technology, which uses its advanced water treatment to create a premium oxygenated alkaline water with natural antioxidants. Storm high-alkaline CBD water contains 20 mg of CBD. Ooh La Lemin is lemonade for the modern age. Made natural and refreshing with no added sugar, low in carbs, and 15 calories. Ooh La Lemin is available in four distinct flavors: original lemonade, peach lemonade, strawberry lemonade, and blue raspberry lemonade. The Company also sells branded apparel. The Company uses only high-quality textiles and specialty inks and foils, which provide consumers with a premium fit and feel. The Company currently offers shirts, tanks, hats, and towels for sale. Effects of COVID-19 In January 2020, the World Health Organization (the “WHO”) announced a global health emergency because of a new strain of coronavirus (“COVID-19”) that originated in Wuhan, China and generated significant risks to the international community as the virus spread globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in global exposure. The COVID-19 pandemic is disrupting businesses and affecting production and sales across a range of industries, as well as causing volatility in the financial markets. The extent of the impact of the COVID-19 pandemic on the Company’s consumer demand, sales, and financial performance will depend on certain developments, including, among other things, the duration and spread of the outbreak and the impact on the Company’s consumers and employees, all of which are uncertain and cannot be predicted. Management is actively monitoring this situation and potential impacts on our financial condition, liquidity, and results of operations. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Basis of Presentation The accompanying consolidated financial statements are unaudited and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. These unaudited consolidated financial statements have been prepared on the accrual basis of accounting and in accordance with generally accepted accounting principles (“GAAP”) in the United States. B. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenue and expenses during the reporting period. Actual events and results could differ from those assumptions and estimates. C. Cash and Cash Equivalents For the purpose of reporting cash flows, the Company considers all unrestricted, highly liquid investments with an initial maturity of three months or less to be cash equivalents. D. Fair Value of Financial Instruments The estimated fair values for financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The carrying amounts of accounts payable, accrued liabilities, and notes payable approximate fair value given their short-term nature or effective interest rates. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted price in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarch is as follows: Level 1 – quoted prices in active markets for identical assets or liabilities; Level 2 – inputs other than Level 1 that are observable, either directly or indirectly; such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets and liabilities in markets that are not active, or inputs that are observable or an be corroborated by observable market data for substantially the full term of the assets or liabilities; or Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company analyzes all financial instruments with features of both liabilities and equity under Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity, Derivatives and Hedging The Company uses Level 2 inputs for its valuation methodology for the embedded conversion option liabilities as their fair value were determined by using the Black-Scholes option-pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. E. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at net realizable value. The Company determines provisions for uncollectible accounts, sales returns, and claims based upon factors including the credit risk and activity of specific customers, historical trends, and other information. If the Company becomes aware of a specific distributor’s or reseller’s inability to meet its financial obligations, bad debt charges are recorded based on an overall assessment of past due accounts receivable outstanding. Bad debt attributed to accounts receivable in the nine months ended September 30, 2021 and 2020, was approximately $ 21,000 41,600 7,709 3,967 F. Inventories The cost of inventory using the standard cost method, which approximates actual cost based on a first-in, first-out method. The Company’s inventories are valued at the lower cost or net realizable value. The Company’s inventory consists almost entirely of finished and unfinished goods, and freight, which include CBD energy waters, CBD waters, hemp energy drinks, lemonades, cans for production, and merchandise and apparel. The Company periodically evaluates and adjusts inventories for obsolescence. In the opinion of management, no provision for obsolescence is deemed necessary. The shelf life of all beverage inventory is two years, and at March 31, 2021, and December 31, 2020, all inventory was current, as reflected in the accompanying Consolidated Balance Sheets. G. Property, Plant and Equipment Property, plant and equipment are reported on the accompanying Consolidated Balance Sheet at cost less accumulated depreciation. Assets with a useful life greater than one year and cost greater than $ 100 Depreciation is provided using the straight-line method over the estimated useful lives of the asset as follows: Schedule of estimated useful lives of asset Estimated useful lives (in years) Furniture and fixtures 7 Machinery and equipment 7 Vehicles 5 Computer equipment 5 7 H. Goodwill and Intangible Assets Goodwill arises from business combinations and is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed. The Company has selected December 31 as the date to perform the annual impairment test. Intangible assets represent both indefinite lived and definite lived assets. Trademarks are deemed to have definite useful lives of ten years, are amortized, and are tested annually for impairment. Intangible assets are reported on the balance sheet at cost less accumulated amortization. The Company has selected December 31 as the date to perform the annual impairment test. Management determined that, for the year ending December 31, 2020, there were no identifiable assets or liabilities; therefore, the implied fair value of goodwill is zero. On January 21, 2021, the Company entered into an Agreement and Plan of Merger with S and S and the five S and S Legacy Shareholders and acquired all of the capital stock of S and S Because of this, goodwill was recorded in the amount of $ 1,275,938 Goodwill and Intangible Assets Goodwill and Intangible Assets I. Leases On January 1, 2019, the Company adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred. The amortization period for the right-of-use asset is from the lease commencement date to the earlier of the end of the lease term or the end of the useful life of the asset. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate or the risk-free rate with the election of the practical expedient. The Company has elected to use the risk-free rate. J. Revenue and Provision for Sales, Returns, and Allowances The Company sells its products, which primarily includes its hemp energy drinks, CBD energy waters, CBD waters, and logo apparel, to online customers or through resellers and distributors. In evaluating the timing of the transfer of control of products to customers, the Company considers several indicators, including significant risks and rewards of products, the Company’s right to payment, and the legal title of the products. The Company recognizes revenue from product sales to customers, distributors, and resellers when products that do not require further services by the Company are shipped, when there are no uncertainties surrounding customer acceptance, and when collectability is reasonably assured. Sales are made to customers under terms allowing certain limited rights of return. Amounts billed to customers in sales transactions related to shipping and handling, represent revenues earned for the goods provided and are included in net sales. Costs of shipping and handling are included in cost of products sold. The Company also sells its products, and beverages purchased for resale from several other beverage manufacturers, to convenience stores, grocery stores, and smoke and gift shops. In evaluating the timing of the transfer of control of products to customers, the Company considers several indicators, including significant risks and rewards of products, the Company’s right to payment, and the legal title of the products. The Company recognizes revenue from product sales to resellers when products that do not require further services by the Company are shipped or delivered, when there are no uncertainties surrounding customer acceptance and when collectability is reasonably assured. Cash received by the Company prior to shipment is recorded as deferred revenue. Sales are made to customers under terms allowing certain limited rights of return. Amounts billed to customers in sales transactions related to shipping and handling, represent revenues earned for the goods provided and are included in net sales. Costs of shipping and handling are included in cost of products sold. On January 1, 2019, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) To apply these principles, ASC Topic 606 outlines a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes: 1. Identifying the contract(s) or agreement(s) with a customer; 2. Identifying the separate performance obligations in the contract or agreement; 3. Determining the transaction price; 4. Allocating the transaction price to the separate performance obligations in the contract or agreement; and 5. Recognizing revenue as each performance obligation is satisfied. Pursuant to ASC Topic 606, the Company recognizes revenue when performance obligations under the terms of a contract are satisfied, which occurs typically upon the transfer of control, including the risks and rewards of ownership. With respect to the Company, performance is deemed to occur upon shipment or delivery of products to its customers based on the written contract terms, which is also when control is transferred. The Company evaluated the guidance in ASC 606-10-50-5 and the related implementation guidance to determine disaggregation of revenues that would be meaningful. The majority of the Company’s revenue earned from its Beverages Segment and its Distribution Segment is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. The Company does not have significant financing component or payment terms, and it does not have any material unsatisfied performance obligations. The Company’s revenues are obtained in similar geographical locations within the United States. Furthermore, the Company’s operations in each of its reporting segments are expected to have essentially the same future prospects, similar gross margins, sales trends, and the nature of its products and customers are essentially the same. The sales from the Company’s beverage product types are organized as one reportable segment, which the Company refers to as the Beverages Segment, and the sales of the Company’s products and products that are purchased from resellers that are distributed by Gold Leaf is organized as its second reportable segment, which the Company refers to as the Distribution Segment. The Company has also determined that disaggregated revenue by net sales by revenue source would be meaningful and allow investors to understand its business activities, historical performance, or future prospects. Disaggregated sales by revenue source, which includes sales to distributors, online sales, sales through Amazon, and Gold Leaf distribution sales, is included in Note 16, Revenue Sales are made to customers under terms allowing certain limited rights of return. The Company records an allowance and return for each quarter for 3% of total sales. The Company recorded sales, returns, and allowance at three months ending September 30, 2021 and 2020 of approximately $ 16,600 6,600 61,000 30,700 K. Cost of Revenues Cost of revenues consist primarily of expenses associated with the delivery and distribution of products. These include expenses related to direct procurement costs and shipping and handling costs. The Company bills shipping and handling fees charged to customers as part of sales and the associated expense as part of cost of revenues. The costs are charged to cost of revenues in the same period that the associated revenue is earned. L. Impairment of Long-Lived Assets The Company evaluates its long-lived assets for financial impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company evaluates the recoverability of long-lived assets used in operations by measuring the carrying amount of the assets against their estimated undiscounted future cash flows. If such evaluations indicated that the future undiscounted cash flows of certain long-lived assets are not sufficient to recover the carrying value of such assets, the assets are adjusted to fair values. Management completed an impairment review as of December 31, 2020 and determined long-lived assets were not impaired. M. Income Taxes The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes, The Company has no recorded liabilities for uncertain tax positions as of the accompanying Consolidated Balance Sheets dated September 30, 2021 and December 31, 2020, respectively. N. Stock-Based Compensation FASB’s ASC Topic 718, Stock Compensation The Company estimates the fair value of each restricted stock award as of the date of grant using the closing price as reported by the OTC Markets Group Inc. (the “OTCM”) on the date of grant. The fair value determined represents the cost for the award and is recognized over the vesting period during which an employee is required to provide service in exchange for the award. The Company accounts for forfeitures of restricted stock as they occur. O. Advertising Costs The Company expenses costs of advertising and promotions as incurred. The Company includes in advertising costs inventory given away as promotional merchandise or free samples to create sales. Advertising and promotion costs for the three months ended September 30, 2021 and 2020, was approximately $ 21,600 5,200 45,700 20,600 P. Concentration of Credit Risk The Company maintains cash balances at financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $ 250,000 Q. Basic and Diluted Earnings per Share In accordance with FASB’s ASC 260, Earnings per Share Diluted per-share loss is the same as basic per-share loss when there is a loss from continuing operations. R. Segments ASC 280-10, Segment Reporting The Company then applied the management approach to the identification of its two reportable segments – the Beverages Segment, consisting of the operations of Kona, HighDrate, and Ooh La Lemin, and the Distribution Segment, consisting of the operations of Gold Leaf. Specifically, the Company has evaluated guidance in ASC 280-10 and determined that aggregation is consistent with the objectives of ASC 280-10 in that aggregation into two reportable segments allows users of our financial statements to view the Company’s business through the eyes of management based upon the way management reviews performance and makes decisions. Additional factors that were considered included: whether or not an operating segment has similar economic characteristics, the nature of the products/services under each operating segment, the nature of the production/go-to-market process, the type and geographic location of our customers, and the distribution of our products/services. The Company further determined that its logo merchandise and apparel, which revenue comprises approximately 1% of the Company’s gross annual sales, and solely exists for promotion purposes, could be aggregated with the operations in the Beverages Segment. A description of the Company’s products is contained in Note 1, Organization and Description of Business. Segments. S. Registration Rights Agreement In May 2020, the Company completed a private placement transaction (the “2020 Private Placement”) of three secured convertible debentures (the “2020 Debentures”), convertible for up to 105,947,397 20,000,000 Pursuant to the terms of the Registration Rights Agreement, the Company agreed to file the 2020 Registration Statement with the SEC registering for resale the Conversion Shares and the Warrant Shares within 45 calendar days following the closing of the Private Placement. Further, the Company agreed to use its best efforts to have the 2020 Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the effectiveness deadline, or by the 5 th th The Company accounts for registration rights agreements in accordance with ASC subtopic 825-20, Registration Payment Arrangements Loss Contingencies In February 2021, the Company completed a private placement transaction (the “February 2021 Private Placement”) of two secured convertible debentures (the “February 2021 Debentures”), convertible for up to 154,958,678 shares (the “February 2021 Conversion Shares”) of Common Stock and granted a Warrant to purchase Common Stock (the “February 2021 Warrant”), exercisable for up to 50,000,000 shares of Common Stock (the “February 2021 Warrant Shares”), pursuant to that certain Securities Purchase Agreement between the Selling Stockholder and the Company, dated as of February 10, 2021 (the “February 2021 SPA”). The Company sold and issued the initial February 2021 Debenture (the “First February 2021 Debenture”) and granted the February 2021 Warrant promptly after entering in the February 2021 SPA. The Company will sell and issue the second February 2021 Debenture (the “Second February 2021 Debenture”) promptly after the SEC declares effective the February 2021 Registration Statement (as defined below). The February 2021 Debentures are due 12 months from their respective issuance dates and are secured by all of the Company’s assets and the assets of each of its subsidiaries pursuant to that certain Security Agreement by and among the Selling Stockholder, the Company’s subsidiaries, and the Company. Initially, the February 2021 Debentures are convertible at the lower of (i) the fixed conversion price, which is $ 0.03 At the Company’s option, it has the right to redeem, in part or in whole, the outstanding principal and interest under the February 2021 Debentures prior to their respective maturity dates; provided, that, as of the date of the holder’s receipt of the redemption notice, (i) the VWAP of the Common Stock is less than the February 2021 Fixed Conversion Price, initially $0.03 per share, and (ii) there is no Equity Conditions failure. The Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as well as a redemption premium equal to 15% of the outstanding principal amount being redeemed (the “Redemption Premium”). The Company must provide the holder 15 business days’ advance notice of its intent to make a redemption, setting forth the amount of principal and interest we desire then to redeem plus the applicable Redemption Premium The February 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of Common Stock or common stock equivalents at a price lower than the then-current conversion price of the February 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the February 2021 Debentures. Pursuant to the February 2021 SPA, the purchase price for the First February 2021 Debenture was $ 900,000 41,000 36,000 5,000 600,000 24,000 In connection with the February 2021 Private Placement, the Company also granted the February 2021 Warrant to purchase up to an aggregate of 50 million shares of the Common Stock. The February 2021 Warrant has a three-year term and is immediately exercisable at an exercise price of $ 0.03 The The February 2021 Warrant contains an adjustment provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common Stock or common stock equivalents at a price lower than the then-current exercise price of the February 2021 Warrant. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the exercise price of the February 2021 Warrant. The February 2021 Warrant is subject to an “exercise blocker” such that the Selling Stockholder cannot exercise any portion of the February 2021 Warrant that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following such exercise (excluding, for purposes of such determination, shares of the Common Stock issuable upon exercise of the February 2021 Warrant or conversion of the February 2021 Debentures that had not then been exercised or converted, respectively). The Selling Stockholder can increase that 4.99% “exercise blocker” to 9.99% upon at least 65 days’ prior written notice to the Company. Pursuant to the terms of the February 2021 Registration Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1 (the “February 2021 Registration Statement”) with the SEC registering for resale the February 2021 Conversion Shares and the February 2021 Warrant Shares within 30 calendar days following the closing of the February 2021 Private Placement. The Selling Stockholder has agreed to waive this 30-calendar-day provision for so long as the Company utilized its best efforts to file its Annual Report on Form 10-K for its fiscal year ended December 31, 2020, and promptly thereafter files the February 2021 Registration Statement. Further, the Company agreed to use its best efforts to have the February 2021 Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the effectiveness deadline, or by the 5th trading day following the date on which the Company is notified that the February 2021 Registration Statement will not be reviewed or is no longer subject to further review and comments. Pursuant to the February 2021 Registration Rights Agreement, the Company is subject to partial liquidated damages equal to 2.0% of the aggregate purchase price paid by the holder pursuant to the February 2021 SPA for either of the February 2021 Debentures then held by the holder for failure to file the February 2021 Registration Statement timely, failure to file with the SEC a request for acceleration in accordance with Rule 461 promulgated under the Securities Act, within five trading days after the date the Company is notified that the February 2021 Registration Statement will not be reviewed or is not subject to further review, the February 2021 Registration Statement is not declared effective by the effectiveness deadline, if after effectiveness, the February 2021 Registration Statement ceases for any reason to remain continuously effective as required or if the holders are not permitted to utilize the prospectus therein to resell for more than 30 consecutive calendar days or more than an aggregate of 40 calendar days during any 12-month period, or if after the six-month anniversary of the February 2021 Registration Rights Agreement, the Company does not have available adequate current public information as set forth in Rule 144(c). The parties agreed that the maximum aggregate liquidated damages payable to a holder of the February 2021 Debentures under the February 2021 Registration Rights Agreement is 24% of the aggregate purchase price paid by such holder pursuant to the February 2021 SPA. The Company also agreed, among other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses incurred by the Company in connection with the registration of the February 2021 Conversion Shares and the February 2021 Warrant Shares held by the Selling Stockholder. The Commission declared effective the February 2021 Registration Statement. In August 2021, the Company completed a private placement transaction (the “August 2021 Private Placement”) of two secured convertible debentures (the “August 2021 Debentures”), convertible for up to 1,111,111,110 shares (the “August 2021 Conversion Shares”) of Common Stock and granted a Warrant to purchase Common Stock (the “August 2021 Warrant”), exercisable for up to 100,000,000 shares of Common Stock (the “August 2021 Warrant Shares”), pursuant to that certain Securities Purchase Agreement between the Selling Stockholder and the Company, dated as of August 20, 2021 (the “August 2021 SPA”). The Company sold and issued the initial August 2021 Debenture (the “First August 2021 Debenture”) and granted the August 2021 Warrant promptly after entering in the August 2021 SPA. The Company will sell and issue the second August 2021 Debenture (the “Second August 2021 Debenture”) promptly after the SEC declares effective the August 2021 Registration Statement (as defined below). The August 2021 Debentures are due 12 months from their respective issuance dates and are secured by all of the Company’s assets and the assets of each of its subsidiaries pursuant to that certain Security Agreement by and among the Selling Stockholder, the Company’s subsidiaries, and the Company. Initially, the August 2021 Debentures are convertible at the lower of (i) the fixed conversion price, which is $0.03 per share, subject to adjustment (the “August 2021 Fixed Conversion Price”), or (ii) 75% of the lowest daily volume weighted average price (“VWAP”) of our Common Stock during the 15 trading days immediately preceding the conversion date, subject to adjustment (the “August 2021 Market Conversion Price”). The August 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of its Common Stock or common stock equivalents at a price lower than the then-current conversion price of the August 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the August 2021 Debentures. The August 2021 Debentures are subject to a “conversion blocker” such that the Selling Stockholder cannot convert any portion of the August 2021 Debentures that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following such conversion (excluding, for purposes of such determination, shares of the Common Stock issuable upon conversion of the August 2021 Debentures or exercise of the August 2021 Warrant that had not then been converted or exercised, respectively). The Selling Stockholder can increase that 4.99% “conversion blocker” to 9.99% upon at least 65 days’ prior written notice to the Company. The August 2021 Debentures accrue interest at an annual rate equal to 8% and are due and payable on their respective maturity dates (or sooner if the Selling Stockholder converts the August 2021 Debentures or otherwise accelerates the maturity date, as provided for in the August 2021 Debentures). Interest is payable either in cash or, if certain Equity Conditions (as defined in the August 2021 Debentures) are then satisfied, in shares of the Common Stock at the August 2021 Market Conversion Price on the trading day immediately prior to the date paid. At the Company’s option, it has the right to redeem, in part or in whole, the outstanding principal and interest under the August 2021 Debentures prior to their respective maturity dates; provided, that, as of the date of the holder’s receipt of the redemption notice, (i) the VWAP of the Common Stock is less than the August 2021 Fixed Conversion Price, initially $0.03 per share, and (ii) there is no Equity Conditions failure. The Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as well as a redemption premium equal to 15% of the outstanding principal amount being redeemed (the “Redemption Premium”). The Company must provide the holder 15 business days’ advance notice of its intent to make a redemption, setting forth the amount of principal and interest we desire then to redeem plus the applicable Redemption Premium The August 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of Common Stock or common stock equivalents at a price lower than the then-current conversion price of the August 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the August 2021 Debentures. Pursuant to the August 2021 SPA, the purchase price for the First August 2021 Debenture was $ 1,500,000 70,000 60,000 10,000 1,500,000 60,000 In connection with the August 2021 Private Placement, the Company also granted the August 2021 Warrant to purchase up to an aggregate of 50 3 0.03 The August 2021 Warrant contains an adjustment provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common Stock or common stock equivalents at a price lower than the then-current exercise price of the August 2021 Warrant. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the exercise price of the August 2021 Warrant. The August 2021 Warrant is subject to an “exercise blocker” such that the Selling Stockholder cannot exercise any portion of the August 2021 Warrant that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following such exercise (excluding, for purposes of such determination, shares of the Common Stock issuable upon exercise of the August 2021 Warrant or conversion of the August 2021 Debentures that had not then been exercised or converted, respectively). The Selling Stockholder can increase that 4.99% “exercise blocker” to 9.99% upon at least 65 days’ prior written notice to the Company. Pursuant to the terms of the August 2021 Registration Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1 (the “August 2021 Registration Statement”) with the SEC registering for resale the August 2021 Conversion Shares and the August 2021 Warrant Shares within 30 calendar days following the closing of the August 2021 Private Placement. The Selling Stockholder has agreed to waive this 30-calendar-day provision for so long as the Company utilized its best efforts to file its Annual Report on Form 10-K for its fiscal year ended December 31, 2020, and promptly thereafter files the August 2021 Registration Statement. Further, the Company agreed to use its best efforts to have the August 2021 Registration Statement declared effective by the SEC as soon as prac |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 3 – INVENTORY Inventory consisted of the following: Schedule of Inventory September 30, 2021 December 31, 2020 CBD Energy Water $ 111,414 $ 159,813 Hemp Energy Drink 248,507 343,119 Storm CBD Water 29,519 28,692 Ooh La Lemin Drink 162,004 — Merchandise and Apparel 11,564 11,948 Unfilled Cans, Trays and Sleeves 44,134 38,705 Miscellaneous Beverages 95,030 33,225 Raw Materials 17,444 Other Inventory 140,274 43,362 Point of Sale Inventory 6,723 1,640 Total Inventory $ 866,613 $ 660,504 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 4 – PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following: Schedule of property, plant and equipment September 30, 2021 December 31, 2020 Furniture and Fixtures $ 72,575 $ 57,879 Computers and Software 28,108 16,638 Machinery & Equipment 98,593 79,951 Vehicles 160,415 68,135 Less: Accumulated Depreciation (78,662 ) (54,731 ) Property, plant and equipment, net $ 281,029 $ 167,872 Depreciation for the three months ended September 30, 2021 and 2020, was approximately $ 12,500 9,200 32,800 24,800 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 5 – GOODWILL AND INTANGIBLE ASSETS In April 2019, Gold Leaf acquired 21,000,000 shares, representing 51.65% of the issued and outstanding shares of common stock, $0.01 par value per share, of BigSupersearch.com, Inc., a California corporation (“BigSupersearch”), and 14,000,000 shares of its Series A preferred stock, representing 76.26% of the issued and outstanding shares of preferred stock, for an aggregate of $61,000, which amount included the purchase price, attorney fees, and transfer fees. At the time of the acquisition, BigSupersearch was considered a “shell company” because it had no operations and no assets. Because no transfer of assets or liabilities occurred, the entire $61,000, representing the consideration paid for all of the issued and outstanding capital stock of BigSupersearch, was recorded as goodwill. Goodwill may not be amortized. Instead, it is tested at least annually for impairment. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The fair value of goodwill can be measured only as a residual and cannot be measured directly. The Company uses a methodology to determine an amount that achieves a reasonable estimate of the value of goodwill for purposes of measuring an impairment loss. That estimate is referred to as the implied fair value of goodwill. At December 31, 2019, BigSupersearch had a positive equity and the Company elected to perform a qualitative assessment to determine if it was more likely than not that the fair value of BigSupersearch exceeded its carrying value, including goodwill. In accordance with the Qualitative Assessment outlined in ASC 350-20-35, Goodwill – Subsequent Measurement , The Quantitative Assessment is a two-step process as outlined in ASC 350-20-35 and is used to identify both the existence of impairment and the amount of impairment. The first step is to determine the fair value. If the carrying amount is greater than zero and its fair value exceeds its carrying amount, then there is no impairment and the second step is not necessary. If the carrying amount of BigSupersearch exceeds the fair value, then goodwill will be measured for impairment in the second step. The amount of impairment loss recorded is the difference in the excess of the carrying amount over its fair value. Management determined that for the year ending December 31, 2019, BigSupersearch had no identifiable assets or liabilities; therefore, the implied fair value of goodwill is zero. Based on this assessment, goodwill was impaired by the full carrying amount of $ 61,000 0 On January 21, 2021, the Company entered into an Agreement and Plan of Merger with S and S and its shareholders and acquired all of the capital stock of S and S. To consummate the Acquisition, a Certificate of Merger was filed with the Wisconsin Department of Financial Institutions (the “Merger Certificate”) on February 1, 2021. On January 22, 2021, (i) Kona Gold, (ii) KGS Temporary Company, Inc. (Kona Gold Beverage, Inc.’s “Acquisition Subsidiary”), (iii) S and S, (iv) William J. Stineman and K&L Beverage, LLC, a Wisconsin limited liability company (as the indemnifying S and S shareholders), and (v) Mr. Stineman (as representative of the S and S Shareholders) entered into the Agreement and Plan of Merger (the “Merger Agreement”). S and S merged with and into our Acquisition Subsidiary; S and S was the surviving entity and became our wholly-owned subsidiary of Kona Gold Beverage, Inc. Pursuant to the Merger Agreement, and subject to the terms and conditions contained therein, we acquired all of the shares of capital stock of S and S from the five holders thereof (the “S and S Legacy Shareholders”). In consideration thereof, we issued to them an aggregate of nine million restricted shares of Kona Gold Beverage, Inc.’s common stock (the “Acquisition Stock”) on a pro rata basis. Kona Gold Beverage, Inc. did not grant them any registration rights in respect of the shares of Acquisition Stock. We also agreed to pay an aggregate of $1,050,000 (the “Aggregate Acquisition Payments”), the majority of which is allocated to certain creditors of S and S (including one of the S and S Legacy Shareholders) and approximately $ 89,000 400,000 2.00 1,275,938 Acquisition of S and S Beverage, Inc. Changes in goodwill are as follows: Schedule of changes in goodwill September 30, December 31, 2021 2020 Beginning of year $ — $ — Acquired goodwill 1,275,938 — Impairment — — Total goodwill $ 1,275,938 $ — Intangible assets consisted of the following: Schedule of intangible assets September 30, 2021 December 31, 2020 Trademark (HighDrate) $ 81,750 $ 81,750 Website Development (Ooh La Lemin) 12,201 — Less: Accumulated Amortization (19,207 ) (12,262 ) Total Intangible Asset $ 74,744 $ 69,488 Estimated future amortization expense related to the intangible asset is as follows: Schedule of estimated future amortization expense Fiscal year ending: December 31, 2021 (remaining 3 months) 2,349 December 31, 2022 9,395 December 31, 2023 9,395 December 31, 2024 9,395 December 31, 2025 9,395 Thereafter 34,815 Finite-Lived Intangible Assets, Net $ 74,744 |
NOTE RECEIVABLE
NOTE RECEIVABLE | 9 Months Ended |
Sep. 30, 2021 | |
Note Receivable | |
NOTE RECEIVABLE | NOTE 6 – NOTE RECEIVABLE On May 26, 2016, Robert Clark, formed Elev8 Hemp, LLC, a Delaware limited liability company (“Elev8 Hemp”), on behalf of Ryan Medico, the Company’s then-Chief Financial Officer. Mr. Medico was the sole owner of and served as President of Elev8 Hemp. In June 2016, the Company entered into a letter of intent with Elev8 Hemp to acquire it, such that it would become the Company’s wholly-owned subsidiary. Pursuant to the letter of intent, on June 7, 2016, the Company entered into an Acquisition Agreement with Elev8 Hemp (the “Elev8 Hemp Acquisition Agreement”), whereby the Company agreed to acquire 100 50,000 50,000 On October 10, 2016, the Company entered into a Membership Interest Purchase Agreement (the “Membership Interest Purchase Agreement”) with Elev8 Hemp, as the Company’s wholly-owned subsidiary, and Branded Legacy, Inc., formerly known as Elev8 Brands, Inc. and, prior to that, known as PLAD, Inc. (“Branded Legacy”), to sell 100 200,000,000 0.00001 On April 14, 2017, the Company’s Board of Directors (the “Board”) declared a dividend to its stockholders of an aggregate of 53,196,608 146,803,392 On March 6, 2018, the Company entered into a Securities Exchange and Settlement Agreement (the “First Exchange Agreement”) with Branded Legacy. Pursuant to the First Exchange Agreement, the Company exchanged with Branded Legacy the remaining 146,803,392 2,746,723 164,803,380 1,648 On November 26, 2019, we entered into a second Securities and Exchange Agreement with Branded Legacy, whereby we exchanged the remaining investment of 2,746,723 1,500,000 Related Party Disclosures Management could not ascertain with certainty of the collectability of the Branded Legacy Note due to the dollar amount and duration of the term; therefore, an allowance for $ 1,500,000 Schedule of note receivable September 30, 2021 December 31, 2020 Investment in Branded Legacy $ — $ — Note receivable 1,500,000 1,500,000 Less: Allowance for doubtful account (1,500,000 ) (1,500,000 ) Note receivable, net $ — $ — |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 7 – STOCK-BASED COMPENSATION The Company’s directors, officers, key employees, and non-employees were granted stock-based compensation consisting of restricted stock awards. Stock-based compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense at the date of issuance. The Company estimates the fair value of each restricted stock award as of the date of grant using closing price as reported by the OTCM on the date of grant. The Board has not adopted any employee stock purchase plans or other incentive plans, nor does the Company grant stock options to its directors, officers, and employees. The share-based payments granted for the nine months ended September 30, 2021 and the year ended December 31, 2020, were 12,100,000 10,085,140 For the nine months ended September 30, 2021 and 2020, the Company recognized stock-based compensation expense, which is included in selling, general and administrative expenses in the accompanying Consolidated Statements of Loss, as follows: Stock-based compensation expense Nine Months Ended September 30, Nine Months Ended September 30, 2021 2020 Employee stock awards $ 55,800 $ 476,000 Non-employee stock awards 270,900 2,577 Total stock-based compensation expense $ 326,700 $ 478,577 The Company expenses stock-based compensation cost in the current period at the grant date. No future years of compensation is expected for the next five fiscal years. The Company has a balance in accrued stock-based compensation at September 30, 2021 and December 31, 2020, of $ 1,386,497 1,386,497 |
LINE OF CREDIT
LINE OF CREDIT | 9 Months Ended |
Sep. 30, 2021 | |
Line Of Credit | |
LINE OF CREDIT | NOTE 8 – LINE OF CREDIT On May 5, 2018, Kona entered into a Line of Credit Agreement with Matthew Nicoletti as the lender, which established a revolving line of credit in the amount of up to $ 400,000 May 5, 2022 3.75 198,470 42,683 32,102 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 9 – RELATED PARTY TRANSACTIONS A. Long-term debt consists of two note payables with a related party: 1) On October 31, 2018, Kona issued a Standard Promissory Note in favor of Robert Clark, as lender, in the original principal amount of $ 20,000 500 8,500 2) On February 19, 2019, Gold Leaf issued a Standard Promissory Note in Favor of Robert Clark, as lender, in the original principal amount of $ 70,000 500 58,000 500 55,000 59,500 The future maturities are as follows: Schedule of future maturities December 31, 2021 (remaining 3 months) $ 55,000 Long-term Debt $ 55,000 B. Lines of credit consists of two agreements with a related party: 1) On April 4, 2019, Kona entered into a Line of Credit Agreement with Robert Clark. The agreement established a revolving line of credit in the amount of up to $ 1,500,000 3.75 1,372,651 1,369,651 73,906 36,397 2) On August 29, 2019, Gold Leaf entered into a Line of Credit Agreement with Robert Clark. The agreement established a revolving line of credit in the amount of up to $ 200,000 3.75 125,500 100,000 7,065 3,545 |
SECURITIES PURCHASE AGREEMENT,
SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND WARRANT | 9 Months Ended |
Sep. 30, 2021 | |
Securities Purchase Agreement Derivative Liabilities And Warrant | |
SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND WARRANT | NOTE 10 – SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND WARRANT 2020 Securities Purchase Agreement In May 2020, the Company completed the 2020 Private Placement of the 2020 Debentures and the 2020 Warrant pursuant to the 2020 SPA. The Company sold and issued the First 2020 Debenture and granted the 2020 Warrant promptly after entering in the 2020 SPA. The Company sold and issued the Second 2020 Debenture promptly after filing the 2020 Registration Statement initially with the SEC. The Company sold and issued the Third 2020 Debenture promptly after the SEC declared the 2020 Registration Statement effective. The 2020 Debentures are due 12 months from their respective issuance dates and are secured by all of the Company’s assets and the assets of each of its subsidiaries pursuant to that certain Security Agreement by and among the Selling Stockholder, the Company’s subsidiaries, and the Company. Initially, the 2020 Debentures are convertible at the lower of (i) the fixed conversion price, which is $ 0.05 At the Company’s option, it has the right to redeem, in part or in whole, the outstanding principal and interest under the 2020 Debentures prior to their respective maturity dates; provided that The 2020 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of the Common Stock or common stock equivalents at a price lower than the then-current conversion price of the 2020 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the 2020 Debentures. Pursuant to the terms of the Registration Rights Agreement, the Company agreed to file the 2020 Registration Statement with the SEC registering for resale the Conversion Shares and the Warrant Shares within 45 calendar days following the closing of the 2020 Private Placement. The Company also agreed, among other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses incurred by the Company in connection with the registration of the Conversion Shares and the Warrant Shares held by the Selling Stockholder. Pursuant to the 2020 SPA, the purchase price for the First 2020 Debenture was $ 250,000 15,000 10,000 5,000 100,000 12,274 8,255,438 150,000 1,118 7,094,732 Equity Transactions Pursuant to the 2020 SPA, the purchase price for the Second 2020 Debenture was $ 250,000 10,000 10,000 100,000 10,410 5,183,613 150,000 855 7,252,634 Equity Transactions Pursuant to the 2020 SPA, the purchase price for the Third 2020 Debenture was $ 500,000 10,000 10,000 200,000 1,425 10,887,819 Equity Transactions 7,496 14,436,426 Equity Transactions February 2021 Securities Purchase Agreement In February 2021, the Company completed a private placement transaction (the “February 2021 Private Placement”) of two secured convertible debentures (the “February 2021 Debentures”), convertible for up to 154,958,678 50,000,000 At the Company’s option, it has the right to redeem, in part or in whole, the outstanding principal and interest under the February 2021 Debentures prior to their respective maturity dates; provided, that, as of the date of the holder’s receipt of the redemption notice, (i) the VWAP of the Common Stock is less than the February 2021 Fixed Conversion Price, initially $0.03 per share, and (ii) there is no Equity Conditions failure. The Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as well as a redemption premium equal to 15% of the outstanding principal amount being redeemed (the “Redemption Premium”). The Company must provide the holder 15 business days’ advance notice of its intent to make a redemption, setting forth the amount of principal and interest we desire then to redeem plus the applicable Redemption Premium. The February 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of Common Stock or common stock equivalents at a price lower than the then-current conversion price of the February 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the February 2021 Debentures. 900,000 41,000 36,000 5,000 600,000 24,000 In connection with the February 2021 Private Placement, the Company also granted the February 2021 Warrant to purchase up to an aggregate of 50 million shares of the Common Stock. The February 2021 Warrant has a three-year term and is immediately exercisable at an exercise price of $0.03 per share, subject to adjustment. If the Company fails to maintain an effective registration statement with the SEC covering the resale of the February 2021 Warrant Shares, or if an Event of Default (as defined below) has occurred and is continuing, then the holder may exercise the February 2021 Warrant on a “cashless” basis. “Event of Default” means an event of default under the February 2021 SPA or the February 2021 Debentures. The February 2021 Warrant contains an adjustment provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common Stock or common stock equivalents at a price lower than the then-current exercise price of the February 2021 Warrant. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the exercise price of the February 2021 Warrant. Pursuant to the terms of the February 2021 Registration Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1 (the “February 2021 Registration Statement”) with the SEC registering for resale the February 2021 Conversion Shares and the February 2021 Warrant Shares within 30 calendar days following the closing of the February 2021 Private Placement. The Selling Stockholder has agreed to waive this 30-calendar-day provision for so long as the Company utilized its best efforts to file its Annual Report on Form 10-K for its fiscal year ended December 31, 2020, and promptly thereafter files the February 2021 Registration Statement. Further, the Company agreed to use its best efforts to have the February 2021 Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the effectiveness deadline, or by the 5th trading day following the date on which the Company is notified that the February 2021 Registration Statement will not be reviewed or is no longer subject to further review and comments. Pursuant to the February 2021 Registration Rights Agreement, the Company is subject to partial liquidated damages equal to 2.0% of the aggregate purchase price paid by the holder pursuant to the February 2021 SPA for either of the February 2021 Debentures then held by the holder for failure to file the February 2021 Registration Statement timely, failure to file with the SEC a request for acceleration in accordance with Rule 461 promulgated under the Securities Act, within five trading days after the date the Company is notified that the February 2021 Registration Statement will not be reviewed or is not subject to further review, the February 2021 Registration Statement is not declared effective by the effectiveness deadline, if after effectiveness, the February 2021 Registration Statement ceases for any reason to remain continuously effective as required or if the holders are not permitted to utilize the prospectus therein to resell for more than 30 consecutive calendar days or more than an aggregate of 40 calendar days during any 12-month period, or if after the six-month anniversary of the February 2021 Registration Rights Agreement, the Company does not have available adequate current public information as set forth in Rule 144(c). The parties agreed that the maximum aggregate liquidated damages payable to a holder of the February 2021 Debentures under the February 2021 Registration Rights Agreement is 24% of the aggregate purchase price paid by such holder pursuant to the February 2021 SPA. The Company also agreed, among other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses incurred by the Company in connection with the registration of the February 2021 Conversion Shares and the February 2021 Warrant Shares held by the Selling Stockholder. Pursuant to the February 2021 SPA, the purchase price for the First February 2021 Debenture was $900,000, less $41,000 for origination fees, which consisted of the “original issue discount” of $36,000 and $5,000 as a structuring fee. At September 30, 2021, the principal balance of the First February 2021 Debenture is $900,000. On May 5, 2021, the Company and YA II PN, LTD entered into a Limited Amendment Agreement dated as of May 5, 2021, by and between Kona Gold Beverage, Inc., a Delaware corporation (the “Company”), and YA II PN, LTD., a Cayman Islands exempt company (“Investor”). The Company and the Investor agree to a partial Second Closing, whereby the Investor will purchase a portion of the intended Second Convertible Debenture (the “Partial Second Convertible Debenture”) in the face amount of $ 200,000 192,000 Pursuant to the February 2021 SPA, the purchase price for the Second February 2021 Debenture was $600,000, less $200,000 for the “Partial Second Convertible Debenture”, dated May 5, 2021, less for origination fees, which consisted of the “original issue discount” of $16,000. On June 9, 2021, the Company converted $200,000 of the principal of, and $1,578 of accrued interest on the Second February 2021 Debenture into 6,719,269 shares of the Company’s common stock see Note 11, equity transactions August 2021 Securities Purchase Agreement In August 2021, the Company completed a private placement transaction (the “August 2021 Private Placement”) of two secured convertible debentures (the “August 2021 Debentures”), convertible for up to 1,111,111,110 shares (the “August 2021 Conversion Shares”) of Common Stock and granted a Warrant to purchase Common Stock (the “August 2021 Warrant”), exercisable for up to 100,000,000 shares of Common Stock (the “August 2021 Warrant Shares”), pursuant to that certain Securities Purchase Agreement between the Selling stockholder and the Company, dated as of August 20, 2021 (the “August 2021 SPA”). The Company sold and issued the initial August 2021 Debenture (the “First August 2021 Debenture”) and granted the August 2021 Warrant promptly after entering in the August 2021 SPA. The Company will sell and issue the second August 2021 Debenture (the “Second August 2021 Debenture”) promptly after the SEC declares effective the August 2021 Registration Statement (as defined below). The August 2021 Debentures are due 12 months from their respective issuance dates and are secured by all of the Company’s assets and the assets of each of its subsidiaries pursuant to that certain Security Agreement by and among the Selling Stockholder, the Company’s subsidiaries, and the Company. Initially, the August 2021 Debentures are convertible at the lower of (i) the fixed conversion price, which is $0.03 per share, subject to adjustment (the “August 2021 Fixed Conversion Price”), or (ii) 75% of the lowest daily volume weighted average price (“VWAP”) of our Common Stock during the 15 trading days immediately preceding the conversion date, subject to adjustment (the “August 2021 Market Conversion Price”). The August 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of its Common Stock or common stock equivalents at a price lower than the then-current conversion price of the August 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the August 2021 Debentures. The August 2021 Debentures are subject to a “conversion blocker” such that the Selling Stockholder cannot convert any portion of the August 2021 Debentures that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following such conversion (excluding, for purposes of such determination, shares of the Common Stock issuable upon conversion of the August 2021 Debentures or exercise of the August 2021 Warrant that had not then been converted or exercised, respectively). The Selling Stockholder can increase that 4.99% “conversion blocker” to 9.99% upon at least 65 days’ prior written notice to the Company. The August 2021 Debentures accrue interest at an annual rate equal to 8% and are due and payable on their respective maturity dates (or sooner if the Selling Stockholder converts the August 2021 Debentures or otherwise accelerates the maturity date, as provided for in the August 2021 Debentures). Interest is payable either in cash or, if certain Equity Conditions (as defined in the August 2021 Debentures) are then satisfied, in shares of the Common Stock at the August 2021 Market Conversion Price on the trading day immediately prior to the date paid. At the Company’s option, it has the right to redeem, in part or in whole, the outstanding principal and interest under the August 2021 Debentures prior to their respective maturity dates; provided, that, as of the date of the holder’s receipt of the redemption notice, (i) the VWAP of the Common Stock is less than the August 2021 Fixed Conversion Price, initially $0.03 per share, and (ii) there is no Equity Conditions failure. The Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as well as a redemption premium equal to 15% of the outstanding principal amount being redeemed (the “Redemption Premium”). The Company must provide the holder 15 business days’ advance notice of its intent to make a redemption, setting forth the amount of principal and interest we desire then to redeem plus the applicable Redemption Premium. The August 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of Common Stock or common stock equivalents at a price lower than the then-current conversion price of the August 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the August 2021 Debentures. In connection with the August 2021 Private Placement, the Company also granted the August 2021 Warrant to purchase up to an aggregate of 100 million shares of the Common Stock. The August 2021 Warrant has a three-year term and is immediately exercisable at an exercise price of $0.03 per share, subject to adjustment. If the Company fails to maintain an effective registration statement with the SEC covering the resale of the August 2021 Warrant Shares, or if an Event of Default (as defined below) has occurred and is continuing, then the holder may exercise the August 2021 Warrant on a “cashless” basis. “Event of Default” means an event of default under the August 2021 SPA or the August 2021 Debentures. The August 2021 Warrant contains an adjustment provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common Stock or common stock equivalents at a price lower than the then-current exercise price of the August 2021 Warrant. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the exercise price of the August 2021 Warrant. The August 2021 Warrant is subject to an “exercise blocker” such that the Selling Stockholder cannot exercise any portion of the August 2021 Warrant that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following such exercise (excluding, for purposes of such determination, shares of the Common Stock issuable upon exercise of the August 2021 Warrant or conversion of the August 2021 Debentures that had not then been exercised or converted, respectively). The Selling Stockholder can increase that 4.99% “exercise blocker” to 9.99% upon at least 65 days’ prior written notice to the Company. Pursuant to the terms of the August 2021 Registration Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1 (the “August 2021 Registration Statement”) with the SEC registering for resale the August 2021 Conversion Shares and the August 2021 Warrant Shares within 30 calendar days following the closing of the August 2021 Private Placement. The Selling Stockholder has agreed to waive this 30-calendar-day provision for so long as the Company utilized its best efforts to file its Annual Report on Form 10-K for its fiscal year ended December 31, 2020, and promptly thereafter files the August 2021 Registration Statement. Further, the Company agreed to use its best efforts to have the August 2021 Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the effectiveness deadline, or by the 5th trading day following the date on which the Company is notified that the August 2021 Registration Statement will not be reviewed or is no longer subject to further review and comments. Pursuant to the August 2021 Registration Rights Agreement, the Company is subject to partial liquidated damages equal to 2.0% of the aggregate purchase price paid by the holder pursuant to the August 2021 SPA for either of the August 2021 Debentures then held by the holder for failure to file the August 2021 Registration Statement timely, failure to file with the SEC a request for acceleration in accordance with Rule 461 promulgated under the Securities Act, within five trading days after the date the Company is notified that the August 2021 Registration Statement will not be reviewed or is not subject to further review, the August 2021 Registration Statement is not declared effective by the effectiveness deadline, if after effectiveness, the August 2021 Registration Statement ceases for any reason to remain continuously effective as required or if the holders are not permitted to utilize the prospectus therein to resell for more than 30 consecutive calendar days or more than an aggregate of 40 calendar days during any 12-month period, or if after the six-month anniversary of the August 2021 Registration Rights Agreement, the Company does not have available adequate current public information as set forth in Rule 144(c). The parties agreed that the maximum aggregate liquidated damages payable to a holder of the August 2021 Debentures under the August 2021 Registration Rights Agreement is 24% of the aggregate purchase price paid by such holder pursuant to the August 2021 SPA. The Company also agreed, among other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses incurred by the Company in connection with the registration of the August 2021 Conversion Shares and the August 2021 Warrant Shares held by the Selling Stockholder. Pursuant to the August 2021 SPA, the purchase price for the First August 2021 Debenture was $ 1,500,000 70,000 60,000 10,000 Derivative Liability The 2020 Debentures and the 2021 Debentures have been accounted for utilizing ASC 815. The Company has incurred a liability for the estimated fair value of the First 2020 Debenture. The estimated fair value of the 2020 Debentures and the 2021 Debentures have been calculated using the Black-Scholes fair value option-pricing model with key input variables provided by management, as of the date of issuance, with the valuation offset against additional paid in capital, and at each reporting date, with changes in fair value recorded as gains or losses on revaluation in other income (expense). The Company identified embedded features in the 2020 Debentures and the 2021 Debentures, which caused the 2020 Debentures and the 2021 Debentures to be classified as a liability. These embedded features included the right for the holder to request for the Company to settle the amounts owed pursuant to the 2020 Debentures and the 2021 Debentures to the holder by paying an amount of cash equal to the Black-Scholes value of the remaining unexercised portion of the 2020 Debentures and the 2021 Debentures on the date of the consummation of a fundamental transaction. The accounting treatment of derivative financial instruments requires that the Company treat the whole instrument as liability and record the fair value of the instrument as a derivative as of the inception date of the instrument and to adjust the fair value of the instrument as of each subsequent balance sheet date. The derivative liabilities were valued using Black-Scholes pricing model with the following average assumptions: Schedule of derivative liabilities September 30, 2021 Stock Price $ 0.0166 Exercise Price $ 0.0124 Expected Life 1 Volatility 87.6 % Dividend Yield 0 % Risk-Free Interest Rate 0.08 % Fair Value $ 1,225,741 The following table summarizes the changes in the Company’s assets and liabilities measured at fair value as of September 30, 2021: Schedule of assets and liabilities measured at fair value March 31, 2021 Quoted prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Convertible promissory notes with embedded conversion option $ 1,225,741 $ 1,225,741 Total $ 1,225,741 $ 1,225,741 The following table sets forth a summary of change in fair value of the Company’s derivative liabilities for the year ended September 30, 2021: Summary of change in fair value of derivative liability Fair value, January 1, 2020 $ — Change in fair value of embedded conversion features of debenture included in earnings — Embedded conversion option liability recorded in connection with the issuance of 2020 debenture 148,628 Fair value, June 30, 2020 $ 148,628 Change in fair value of embedded conversion features of debenture included in earnings (39,725 ) Embedded conversion option liability recorded in connection with the issuance of 2020 debentures 108,903 Fair value, September 30, 2020 $ 217,806 Change in fair value of embedded conversion features of debenture included in earnings (69,051 ) Embedded conversion option liability recorded in connection with the issuance of 2020 debentures 212,397 Fair value, December 31, 2020 $ 361,152 Change in fair value of embedded conversion features of debenture included in earnings (202,443 ) Embedded conversion option liability recorded in connection with the issuance of 2021 debentures 468,309 Fair value, March 31, 2021 $ 627,018 Change in fair value of embedded conversion features of debenture included in earnings (307,585 ) Embedded conversion option liability recorded in connection with the issuance of February 2021 debentures 166,088 Fair value, June 30, 2021 $ 485,521 Change in fair value of embedded conversion features of debenture included in earnings (120,306 ) Embedded conversion option liability recorded in connection with the issuance of August 2021 debentures 860,526 Fair value, September 30, 2021 $ 1,225,741 Warrant The Company also granted the 2020 Warrant, February 2021 Warrant, and the August 2021 Warrant to purchase up to an aggregate of 20 50 100 0.03 The 2020 Warrant, February 2021 Warrant, and the August 2021 Warrant, respectively, each contains an adjustment provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common Stock or common stock equivalents at a price lower than the then-current exercise price of the 2020 Warrant, February 2021 Warrant, and the August 2021 Warrant, respectively. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the exercise price of the 2020 Warrant, February 2021 Warrant, and the August 2021 Warrant, respectively. Each of the 2020 Warrant, February 2021 Warrant, and the August 2021 Warrant is subject to an “exercise blocker” such that the Selling Stockholder cannot exercise any portion of any of those warrants if such exercise would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following such exercise (excluding, for purposes of such determination, shares of the Common Stock issuable, respectively, upon exercise of the 2020 Warrant, February 2021 Warrant, and the August 2021 Warrant or conversion of the 2020 Debentures, February 2021 Debentures, and the August 2021 Debentures, respectively, that had not then been exercised or converted, respectively). The Selling Stockholder can increase that 4.99% “exercise blocker” to 9.99% upon at least 65 days’ prior written notice to the Company. During the year ended December 31, 2020, the Company granted the 2020 Warrant that was immediately exercisable for up to 20,000,000 50,000,000 |
PAYCHECK PROTECTION PROGRAM LOA
PAYCHECK PROTECTION PROGRAM LOAN | 9 Months Ended |
Sep. 30, 2021 | |
Paycheck Protection Program Loan | |
PAYCHECK PROTECTION PROGRAM LOAN | NOTE 11 – PAYCHECK PROTECTION PROGRAM LOAN On May 4, 2020, the Company entered into a Paycheck Protection Promissory Note in the original principal amount of $95,161 (the “First PPP Loan”) with Wells Fargo Bank, N.A (“Wells Fargo”). The First PPP Loan was made under, and is subject to, the terms and conditions of the Paycheck Protection Program (the “PPP”), which was established as part of the Coronavirus Aid, Relief and Economic Security Act the (“CARES Act”) and is administered by the U.S. Small Business Administration (the “SBA”). The PPP provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The term of the First PPP Loan was two years, with a maturity date of May 6, 2022 and it contains a favorable fixed annual interest rate of 1.00%. Payments of principal and interest on the First PPP Loan were deferred until the date on which the amount of the forgiveness determined under the PPP Program Requirements was remitted to Wells Fargo and then would continue monthly until the maturity of the First PPP Loan. If the we failed to apply for forgiveness within 10 months after the last day of the Covered Period, as defined in the PPP Program Requirements, monthly principal and interest payments would commence 10 months from the last day of the Covered Period. Payments of principal and interest must be made on such date as designated by Wells Fargo in the months that they are due. Thereafter, principal and interest would be payable monthly and may be prepaid at any time prior to maturity with no prepayment penalties. In January 2021, the Company entered into a second Paycheck Protection Promissory Note in the original principal amount of $ 117,487 1.00 Under the terms of the CARES Act, recipients can apply for and receive forgiveness for all, or a portion of the loan granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for certain permissible purposes as set forth in the PPP, including, but not limited to, payroll costs, mortgage interest, rent or utility costs (collectively, “Qualifying Expenses”), and on the maintenance of employee and compensation levels during a certain time period following the funding of the First PPP Loan and the Second PPP Loan. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period. The Company has used the proceeds of each of the PPP Loan and the Second PPP Loan for salaries and wages, building lease expense, and utilities. On April 27, 2021, the First PPP Loan was forgiven for the full amount. No assurance is provided that the Company will be able to obtain forgiveness of the Second PPP Loan in whole or in part. In May 2020, the Company also received an advance in the amount of $ 7,000 |
EQUITY TRANSACTIONS
EQUITY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
EQUITY TRANSACTIONS | NOTE 12 – EQUITY TRANSACTIONS Preferred Stock The Company’s issued and outstanding preferred stock, par value $ 0.00001 988,140 Series A Preferred Stock The Company had authorized 4,000,000 shares of Series A Preferred Stock, par value of $0 .00001 Series B Preferred Stock The Company has 1,200,000 .00001 488,000 Series C Preferred Stock On July 8, 2020, the Company reduced the authorized number of Series C Preferred Stock from 3,300,000 to 250 0.00001 September 30, 2021 and December 31, 2020, the Company had authorized 250 140 1,000 Series D Preferred Stock The Company had authorized 500,000 .00001 500,000 Common Stock The Company had authorized 2,500,000,000 786,308,041 Equity Transactions On December 23, 2020, the Company issued an aggregate of 8,255,438 100,000 12,274 0.0170 On January 12, 2021, the Company issued an aggregate of 10,887,819 200,000 1,425 0.0185 On January 25, 2021, the Company issued an aggregate of 7,094,732 150,000 0.0213 On January 25, 2021, the Company issued an aggregate of 5,183,613 100,000 10,411 0.0213 Pursuant to the Agreement and Plan of Merger with S and S , stock to the five Legacy Shareholders as follows: 6,300,000 shares to K & L Beverage; 1,980,000 360,000 270,000 90,000 . On February 19, 2021, the Company issued an aggregate of 7,252,634 150,000 855 0.0208 On May 5, 2021, the Company issued an aggregate of 14,436,426 300,000 7,496 0.0213 On June 9, 2021, the Company issued an aggregate of 6,719,269 200,000 1,578 0.030 On July 23, 2021, the Company issued an aggregate of 9,616,095 150,000 3,858 0.0160 For other equity issuances during the nine months ended September 30, 2021 and the year ended December 31, 2020, please see Note 13, Employees Sponsorships. |
EMPLOYEES
EMPLOYEES | 9 Months Ended |
Sep. 30, 2021 | |
Employees | |
EMPLOYEES | NOTE 13 – EMPLOYEES On August 12, 2015, the Company entered into an Employment Agreement with Robert Clark (the “Clark Employment Agreement”). On December 1, 2016, the Company entered into an Amendment to Employment Agreement (the “Clark Amendment”; and, together with the Clark Employment Agreement, the “Amended Clark Employment Agreement”). Pursuant to the terms of the Amendment Clark Employment Agreement, the Company agreed to issue, among other securities, 200,000,000 80,000,000 120,000,000 30,000,000 0.015 40,000,000 0.0250 50,000,000 0.0036 80,000,000 0.0025 40,000,000 1,000,000 50,000,000 180,000 17,100,000 170,000,000 The Company issued 5,000,000 0.0637 318,500 On April 3, 2020, the Company issued 5,000,000 157,500 0.0315 The Company issued 3,000,000 0.018 54,000 The Company issued 100,000 0.018 1,800 |
SPONSORSHIPS
SPONSORSHIPS | 9 Months Ended |
Sep. 30, 2021 | |
Sponsorships | |
SPONSORSHIPS | NOTE 14 – SPONSORSHIPS On May 1, 2019, the Company entered into a sponsorship agreement with Ryan Dodd, a professional waterski jumper (the “Dodd Agreement”), whereby the Company agreed to pay monthly sponsorship fees of $ 1,250 262,500 0.131 34,388 85,000 0.0315 2,578 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 15 – COMMITMENTS AND CONTINGENCIES Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. The following represents the Company’s commitments and contingencies as of December 31, 2020: Operating Lease – The Company currently leases approximately 4,500 square feet of corporate office and warehouse space located at 746 North Drive, Suite A, Melbourne, Florida 32934. The lease is for a five-year term, and expires on May 31, 2023. The initial monthly base rent was approximately $ 3,994 4,114 13,944 36,643 |
LEASE LIABILITIES
LEASE LIABILITIES | 9 Months Ended |
Sep. 30, 2021 | |
Lease Liabilities | |
LEASE LIABILITIES | NOTE 16 – LEASE LIABILITIES The Company reported the following operating lease liabilities as of September 30, 2021: A. Right-of-Use Operating Lease – On May 22, 2019, Kona Gold entered into a lease agreement for 30,000 square feet of office and warehouse space in Greer County, South Carolina. The agreement includes monthly payments of $ 13,100 6,500 40,287 107,432 B. On March 17, 2020, Kona entered into a lease agreement for equipment. The agreement includes monthly payments of $ 676 1,880 5,605 C. Right-of-Use Operating Lease – On August 30, 2021, Gold Leaf entered into a lease agreement for 30,000 square feet of office and warehouse space in Conway, South Carolina. The agreement includes monthly payments of $ 7,261 6,500 no Amounts recognized as right-of-use assets, net related to operating leases are included in noncurrent assets in the accompanying Consolidated Balance Sheet, while related lease liabilities are included in current portion of long-term debt and long-term debt. At September 30, 2021 and December 31, 2020, the right-of-use asset and lease liability related to the operating leases were as follows: Schedule of right-of-use asset and lease liability related to operating leases September 30, 2021 December 31, 2020 Right-of-use asset $ 1,503,115 $ 1,072,094 Amortization of right-of-use asset (284,012 ) (159,101 ) Right-of-use asset, net $ 1,219,103 $ 912,993 Operating lease liability Current portion of long-term lease $ 41,806 $ 149,407 Long-term lease 1,177,297 763,586 Total operating lease liability $ 1,219,103 $ 912,993 The future payments due under operating leases is as follows: Schedule of future payments due under operating leases Fiscal year ending: December 31, 2021 (3 months remaining) 41,806 December 31, 2022 230,954 December 31, 2023 242,966 December 31, 2024 251,127 December 31, 2025 254,282 2026 and thereafter 197,968 Operating Leases, Future Minimum Payments Due $ 1,219,103 |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2021 | |
Revenue | |
REVENUE | NOTE 17 – REVENUE The Company determined that the majority of the Company’s revenue earned from its two reporting segments is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. The Company does not have a significant financing component or payment terms, and the Company does not have any material unsatisfied performance obligations. The Company’s revenues are obtained in similar geographical locations within the United States. The Company’s operating segments are expected to have essentially the same future prospects, similar gross margins, sales trends, and the nature of our products and customers are essentially the same. Furthermore, the Company regularly reviews disaggregated revenue by source for evaluating the financial performance of its operations and making resource decisions. The Company’s revenue is broken down by the following: ● Distributors – revenue derived from direct sales to distributors for resale of its products: Kona Gold hemp-infused energy drinks, HighDrate CBD-infused energy waters, Storm CBD-infused water, and Ooh La Lemin lemonade beverages. ● Amazon Sales – revenue derived from customer purchases through Amazon.com of our Kona Gold hemp-infused energy drinks. ● Online Sales – revenue derived from customer purchases through the Company’s websites: KonaGoldHemp.com, HighDrateMe.com, and drinklemin.com of the following products: Kona Gold hemp-infused energy drinks and apparel, HighDrate CBD-infused energy waters, Storm CBD-infused water, and Ooh La Lemin lemonade beverages. ● Gold Leaf Distribution – revenue derived from Gold Leaf, which is the Company’s wholly-owned subsidiary, that focuses on the distribution of premium beverages and snacks in key markets. These markets include over 600 accounts in grocery stores, convenience stores, smoke shops, vape shops, and specialty stores located in Florida and South Carolina. Gold Leaf’s product line includes alkaline waters, beverages for kids, energy drinks, fruit flavored sodas, low-carb lemonade, healthy aloe juice drinks, and CBD-infused jellybeans, all of which complement the Company’s current product offerings. ● Shipping – revenue derived from shipping from direct sales of the Company’s product through KonaGoldHemp.com, HighDrateMe.com, and drinklemin.com. ● Sales Returns and Allowances – the amount reduced from all revenue sources to allow for product returns. The following tables presents our net revenues, by revenue source, and the period-over-period percentage change, for the period presented: Schedule of net revenues, by revenue source Three Months Ended September 30, 2020 2021 Revenue Source Revenue Revenue % Change Distributors $ 140,003 $ 150,929 8 % Amazon 46,078 41,669 ( 10 )% Online Sales 15,663 17,678 13 % Gold Leaf Distribution 108,719 347,247 219 % Shipping 8,846 4,451 50 % Sales Returns and Allowances (6,600 ) (16,599 ) 152 % Net Revenues $ 312,709 $ 545,375 74 % Nine Months Ended September 30, 2020 2021 Revenue Source Revenue Revenue % Change Distributors $ 367,912 $ 784,023 113 % Amazon 121,317 119,428 ( 2 )% Online Sales 35,176 57,725 64 % Gold Leaf Distribution 228,881 883,825 286 % Shipping 19,181 15,039 ( 22 )% Sales Returns and Allowances (30,655 ) (61,041 ) 99 % Net Revenues $ 741,812 $ 1,798,999 143 % The following tables presents our net revenues, by revenue source, as a percentage of total net revenues for the periods presented: Schedule of net revenues, by revenue source, as a percentage Three Months Ended September 30, Revenues 2020 2021 Distributors and Resellers 45 % 28 % Amazon 15 % 8 % Online Sales 5 % 3 % Gold Leaf Distribution 35 % 64 % Shipping 3 % 1 % Sales Returns, and Allowances ( 2 )% ( 3 )% Nine Months Ended September 30, Revenues 2020 2021 Distributors and Resellers 50 % 44 % Amazon 16 % 7 % Online Sales 5 % 3 % Gold Leaf Distribution 31 % 49 % Shipping 3 % 1 % Sales Returns, and Allowances ( 4 )% ( 3 )% |
SEGMENTS
SEGMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
SEGMENTS | NOTE 18 – SEGMENTS The Company has two reportable segments: ● Beverages. Includes four types of beverage products: (i) hemp-infused energy drinks, (ii) CBD-infused energy water, (iii) CBD-infused high-alkaline water, and (iv) lemonade beverages, as well as apparel with the Kona Gold logo. The Beverages Segment includes all of Kona’s and HighDrate’s operations. The Company considers this a single operating segment for purposes of presenting financial information and evaluating performance. As such, the accompanying C onsolidated F inancial S tatements present financial information in a format that is consistent with the internal financial information used by management. We do not accumulate revenues by product classification and, therefore, it is impractical to present such information. ● Distribution. Amounts that do not relate to a reportable segment have been allocated to “Corporate and Eliminations.” The following tables present information about our reportable segments. Schedule of Segment Reporting Information September 30, 2021 December 31, 2020 CURRENT ASSETS: Beverages Segment $ 1,386,003 $ 824,835 Distribution Segment (253,117 ) (146,894 ) Corporate and eliminations 427,563 105,671 Total Current Assets $ 1,560,449 $ 783,612 NON-CURRENT ASSETS: Beverages Segment $ 2,216,976 $ 1,063,074 Distribution Segment 638,620 85,546 Corporate and eliminations 7,968 8,233 Total Non-Current Assets $ 2,683,564 $ 1,156,853 CURRENT LIABILITIES: Beverages Segment $ 1,899,473 $ 1,879,305 Distribution Segment 144,926 72,576 Corporate and eliminations 3,796,611 1,424,367 Total Current Liabilities $ 5,841,010 $ 3,376,248 NON-CURRENT LIABILITIES: Beverages Segment $ 2,993,658 $ 2,616,018 Distribution Segment 654,434 192,350 Corporate and eliminations — — Total Non-Current Liabilities $ 3,648,092 $ 2,808,368 Three Months Ended September 30, Nine Months Ended September 30, 2020 2021 2020 2021 REVENUES, NET OF SALES, RETURNS, AND ALLOWANCES: Beverages Segment $ 245,918 $ 207,763 $ 613,016 $ 1,018,041 Distribution Segment 108,719 374,247 228,881 883,825 Corporate and Eliminations (41,928 ) (36,635 ) (100,085 ) (102,867 ) Total Revenues, Net of Sales, Returns, and Allowances $ 312,709 $ 545,375 $ 741,812 $ 1,798,999 COST OF REVENUES: Beverages Segment $ 160,289 201,413 417,159 864,872 Distribution Segment 83,912 258,151 173,638 622,210 Corporate and Eliminations (22,090 ) (16,798 ) (67,023 ) (43,355 ) Total Cost of Revenues $ 222,111 $ 442,766 $ 523,774 $ 1,443,727 OPERATING EXPENSES: Beverages Segment $ 339,688 $ 514,995 $ 1,380,612 $ 1,308,456 Distribution Segment 70,385 152,578 198,547 353,239 Corporate and Eliminations 90,160 88,537 260,845 307,146 Total Operating Expenses $ 500,233 $ 756,110 $ 1,840,004 $ 1,968,841 OTHER INCOME / (EXPENSE): Beverages Segment $ (19,455 ) $ (34,964 ) $ (35,887 ) $ 11,964 Distribution Segment (1,173 ) (1,708 ) 3,932 4,041 Corporate and Eliminations (79,178 ) (1,540,542 ) (517,371 ) (2,825,835 ) Total Other Income / (Expense) $ (99,806 ) $ 1,577,214 $ (549,326 ) $ (2,809,830 ) NET LOSS: Beverages Segment $ (273,514 ) $ (543,609 ) $ (1,220,642 ) $ (1,167,251 ) Distribution Segment (46,751 ) (38,190 ) (139,372 ) (87,583 ) Corporate and Eliminations (189,176 ) (1,648,916 ) (811,278 ) (3,168,565 ) Total Net Loss $ (509,441 ) $ (2,230,715 ) $ (2,171,292 ) $ (4,423,399 ) |
ACQUISITION OF S AND S BEVERAGE
ACQUISITION OF S AND S BEVERAGE, INC. | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITION OF S AND S BEVERAGE, INC. | NOTE 19 – ACQUISITION OF S AND S BEVERAGE, INC. On January 21, 2021, the Company entered into an Agreement and Plan of Merger with S and S and its shareholders and acquired all of the capital stock of S and S. To consummate the Acquisition, a Certificate of Merger with the Wisconsin Department of Financial Institutions (the “Merger Certificate”) on February 1, 2021. On January 22, 2021, (i) Kona Gold, (ii) KGS Temporary Company, Inc. (Kona Gold Beverage, Inc. “Acquisition Subsidiary”), (iii) S and S, (iv) William J. Stineman and K&L Beverage, LLC, a Wisconsin limited liability company (as the indemnifying S and S shareholders), and (v) Mr. Stineman (as representative of the S and S Shareholders) entered into the Agreement and Plan of Merger (the “Merger Agreement”). S and S merged with and into our Acquisition Subsidiary; S and S was the surviving entity and became our wholly-owned subsidiary of Kona Gold Beverage, Inc. Pursuant to the Merger Agreement, and subject to the terms and conditions contained therein, we acquired all of the shares of capital stock of S and S from the five S and S Legacy Shareholders. In consideration thereof, we issued to them an aggregate of nine million restricted shares of Kona Gold Beverage, Inc.’s common stock (the “Acquisition Stock”) on a pro rata basis. Kona Gold Beverage, Inc. did not grant them any registration rights in respect of the shares of Acquisition Stock. We also agreed to pay an aggregate of $1,050,000 (the “Aggregate Acquisition Payments”), the majority of which is allocated to certain creditors of S and S (including one of the S and S Legacy Shareholders) and approximately $ 89,000 400,000 2.00 The following is a balance sheet comparison of S and S as of January 21, 2021: Schedule of acquisition Balance Sheet Book Value Fair Value Accounts receivable, net of allowance of $24,280 $ 9,437 $ 33,717 Inventory 240,797 249,648 Property, plant and equipment, net (Website Development) 12,201 12,201 Total Assets $ 262,435 $ 295,566 Accounts payable and accrued liabilities $ 55,553 $ 956 Outstanding checks 23,058 — Interest payable 11,915 — Due to customers 19,667 — Current note payable - related party 811,761 1,050,000.00 Common Stock, $30.05 par value, 10,000 shares issued and outstanding, respectively 300,500 Additional paid-in-capital 437,701 Accumulated deficit (1,397,720 ) Total liabilities and stockholders’ deficit $ 262,435 The following are the accounts included in the Company’s accompanying balance sheet dated March 31, 2021 as a result of the S and S transaction: Balance Sheet Accounts receivable $ 33,717 Website Development (Ooh La Lemin) 12,201 Goodwill 1,275,938 Total Assets $ 1,321,856 Accounts payable and accrued liabilities $ 956 Loan on Acquisition 650,000 Due to merger payments 400,000 Common stock, $.00001 par value, 9,000,000 shares issued 90 Additional paid-in capital 270,810.00 Total liabilities and stockholders’ deficit $ 1,321,856 |
GOING CONCERN
GOING CONCERN | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 20 – GOING CONCERN The accompanying Consolidated Financial Statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying Consolidated Financial Statements, during the three months ending September 30, 2021, the Company incurred a net loss of approximately $2.2 2,230,715 4,423,399 1,586,677 3,125,595 1,370,123 4,244,153 The Company attributes this significant increase to losses incurred from corporate related expenses during the nine months ending September 30, 2021. During the first and third quarters of fiscal 2021, the Company signed two separate Securities Purchase Agreement, whereas, the Company incurred interest expense to related warrants on both convertible notes and a loss on the related derivatives, which were integral to the growth of the Company. During the third quarter, the Company attributes the increase to costs related to both our Beverage Segment and Distribution Segment of selling, general and administrative expenses, specifically salaries, which are integral to the success of the Company. In addition, corporate-related expenses, specifically audit related and legal expenses related to securities in the current year that are integral to the success of our Company. The Company continued to be impacted by the COVID-19 pandemic during the third quarter of the 2021 fiscal year as the Company continued to have logistical delays in delivery of our products to customers. In addition, the Company has experienced delays in obtaining product related to logistical delays. Despite the increase in losses and impacts from COVID-19, the Company realized an increase in sales in the first three quarters of fiscal 2021 over the previous first three quarters of fiscal 2020. The Company attributes this to the acquisition of S and S, which has added to the Company’s portfolio. In addition, the Company has signed more favorable agreements with larger, reputable tier 1 and mid-size distributors and grocery chains that had unforeseen delays and had been impacted by the COVID-19 pandemic. In addition, we also attribute the increase in sales to our Distribution Segment which has seen approximately 286% increase in the first three quarters of fiscal 2021 over the previous first three quarters of fiscal 2020; and approximately 244% increase in the three months ending September 30, 2021 over the three months ending September 30, 2020. We expect that revenue will increase during the balance of fiscal 2021 as distribution related to our current distributors that had been affected by COVID-19, but have resumed more normal distribution, are seeing fewer forward-looking impacts from the COVID-19 pandemic. The Company expects that it will continue to enter into additional, larger, more favorable agreements with larger, tier 1 and mid-size distributors in our Beverage Segment during the balance of fiscal 2021, and our Distribution Segment will continue to see growth with the expansion of a new location. As a result, the Company’s continuation as a going concern is dependent on the ability to obtain additional financing until we can generate sufficient cash flow from operations to meet our obligations. We intend to continue to seek additional debt or equity financing to continue our operations. There is no assurance that we will ever be profitable or that debt or equity financing will be available to us in the amounts, on terms, and at times deemed acceptable to us, if at all. The issuance of additional equity securities by us would result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, would increase our liabilities and future cash commitments. If we are unable to obtain financing in the amounts and on terms deemed acceptable to us, we may be unable to continue our business, as planned, and as a result may be required to scale back or cease operations for our business, the result of which would be that our stockholders would lose some or all of their investment. The accompanying Consolidated Financial Statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
CONCENTRATIONS
CONCENTRATIONS | 9 Months Ended |
Sep. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | NOTE 21 – CONCENTRATIONS The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, less intercompany transactions. In addition, certain customers had outstanding accounts receivables that individually represented 10% or more of the Company’s total outstanding accounts receivables, less intercompany transactions, but before receivable allowances. These customers are as follows: In the accompanying Consolidated Balance Sheet as of September 30, 2021, the Company’s net accounts receivable were $ 63,715 139,203 61,041 7,709 6,738 10,508 22,166 28,707 3,967 Schedule of accounts receivable September 30, 2021 December 31, 2020 Total Accounts Receivable $ 139,235 $ 22,166 Less: Sales Returns and Allowances 61,041 28,707 Less: Doubtful Accounts 7,709 3,967 Less: Intercompany Transactions 6,738 — Accounts Receivable, net $ 63,715 $ (10,508 ) The Company determined that four customers accounted for approximately 70 25 20 13 12 97,832 76 26 22 14 14 22,166 In the accompanying Consolidated Statements of Loss for the three months ended September 30, 2021, one customer represented 12% of the Company’s total net revenue of $545,375 for the three months ended September 30, 2021. In the accompanying Consolidated Statements of Loss for the three months ended September 30, 2020, no one customer represented 10% of the Company’s total net revenue of $312,709 for the three months ended September 30, 2020. In the accompanying Consolidated Statements of Loss for the nine months ended September 30, 2021, one customer represented 13% of the Company’s total net revenue of $1,798,999 for the nine months ended September 30, 2021. In the accompanying Consolidated Statements of Loss for the nine months ended September 30, 2020, no one customer represented 10% or more of the Company’s total net revenue of $741,812 for the nine months ended September 30, 2020 The raw materials used in the production of the Company’s products are obtained by the Company’s co-packers and consist primarily of materials such as the flavors, caffeine, sugars or sucralose, taurine, vitamins, CBD, and hemp seed protein contained in its beverages, the bottles and cans in which its beverages are packaged, and the labeling on the outside of its beverages. These principal raw materials are subject to price and availability fluctuations. The Company currently relies on a few key co-packers, which in turn rely on a few key suppliers. The Company continually endeavors to have back-up co-packers, which co-packers would in turn depend on their third-party suppliers to supply certain of the flavors and concentrates that are used in the Company’s beverages. The Company is also dependent on these co-packers to negotiate arrangements with their existing suppliers that would enable the Company to obtain access to certain of such concentrates or flavor formulas under certain extraordinary circumstances. Additionally, in a limited number of cases, the Company’s co-packers may have contractual restrictions with their suppliers or the Company’s co-packers may need to obtain regulatory approvals and licenses that may limit the co-packers’ ability to enter into agreements with alternative suppliers. Contractual restrictions in the agreements the Company has with certain distributors may also limit the Company’s ability to enter into agreements with alternative distributors. The Company believes that a satisfactory supply of co-packers will continue to be available at competitive prices, although there can be no assurance in this regard. With respect to Gold Leaf’s operations, the Company continually endeavors to contract with additional beverage vendors to ensure the Company has adequate inventory. The Company believes that a satisfactory supply of vendors will continue to be available at competitive prices, although there can be no assurance in this regard. The Company had certain vendors that individually represented 10% or more of the Company’s inventory purchases. For the three months ended September 30, 2021, the Company purchased 29% of its inventory from two vendors. Of these vendors, $ 45,242 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 22 – SUBSEQUENT EVENTS Management has evaluated subsequent events through November 15, 2021, the date that the September 30, 2021 Consolidated Financial Statements were issued, and has determined the following events have occurred that would warrant additional disclosure: (1) On October 4, 2021, the Company issued an aggregate of 16,127,104 150,000 48,751 0.0152 0.0122 (2) On October 14, 2021, the Company issued an aggregate of 17,688,056 200,000 1,643 0.0143 0.0114 (3) On October 25, 2021, the Company issued an aggregate of 16,124,161 150,000 1,567 0.0118 0.0094 (4) On November 2, 2021, the Company completed a private placement transaction pursuant to the August 2021 SPA, the purchase price for the August 2021 Debenture was $ 1,500,000 60,000 60,000 (5) On November 10, 2021, the Company issued an aggregate of 27,228,433 200,000 1,490 0.0093 0.0074 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | A. Basis of Presentation The accompanying consolidated financial statements are unaudited and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. These unaudited consolidated financial statements have been prepared on the accrual basis of accounting and in accordance with generally accepted accounting principles (“GAAP”) in the United States. |
Use of Estimates | B. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenue and expenses during the reporting period. Actual events and results could differ from those assumptions and estimates. |
Cash and Cash Equivalents | C. Cash and Cash Equivalents For the purpose of reporting cash flows, the Company considers all unrestricted, highly liquid investments with an initial maturity of three months or less to be cash equivalents. |
Fair Value of Financial Instruments | D. Fair Value of Financial Instruments The estimated fair values for financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The carrying amounts of accounts payable, accrued liabilities, and notes payable approximate fair value given their short-term nature or effective interest rates. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted price in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarch is as follows: Level 1 – quoted prices in active markets for identical assets or liabilities; Level 2 – inputs other than Level 1 that are observable, either directly or indirectly; such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets and liabilities in markets that are not active, or inputs that are observable or an be corroborated by observable market data for substantially the full term of the assets or liabilities; or Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company analyzes all financial instruments with features of both liabilities and equity under Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity, Derivatives and Hedging The Company uses Level 2 inputs for its valuation methodology for the embedded conversion option liabilities as their fair value were determined by using the Black-Scholes option-pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. |
Accounts Receivable and Allowance for Doubtful Accounts | E. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at net realizable value. The Company determines provisions for uncollectible accounts, sales returns, and claims based upon factors including the credit risk and activity of specific customers, historical trends, and other information. If the Company becomes aware of a specific distributor’s or reseller’s inability to meet its financial obligations, bad debt charges are recorded based on an overall assessment of past due accounts receivable outstanding. Bad debt attributed to accounts receivable in the nine months ended September 30, 2021 and 2020, was approximately $ 21,000 41,600 7,709 3,967 |
Inventories | F. Inventories The cost of inventory using the standard cost method, which approximates actual cost based on a first-in, first-out method. The Company’s inventories are valued at the lower cost or net realizable value. The Company’s inventory consists almost entirely of finished and unfinished goods, and freight, which include CBD energy waters, CBD waters, hemp energy drinks, lemonades, cans for production, and merchandise and apparel. The Company periodically evaluates and adjusts inventories for obsolescence. In the opinion of management, no provision for obsolescence is deemed necessary. The shelf life of all beverage inventory is two years, and at March 31, 2021, and December 31, 2020, all inventory was current, as reflected in the accompanying Consolidated Balance Sheets. |
Property, Plant and Equipment | G. Property, Plant and Equipment Property, plant and equipment are reported on the accompanying Consolidated Balance Sheet at cost less accumulated depreciation. Assets with a useful life greater than one year and cost greater than $ 100 Depreciation is provided using the straight-line method over the estimated useful lives of the asset as follows: Schedule of estimated useful lives of asset Estimated useful lives (in years) Furniture and fixtures 7 Machinery and equipment 7 Vehicles 5 Computer equipment 5 7 |
Goodwill and Intangible Assets | H. Goodwill and Intangible Assets Goodwill arises from business combinations and is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed. The Company has selected December 31 as the date to perform the annual impairment test. Intangible assets represent both indefinite lived and definite lived assets. Trademarks are deemed to have definite useful lives of ten years, are amortized, and are tested annually for impairment. Intangible assets are reported on the balance sheet at cost less accumulated amortization. The Company has selected December 31 as the date to perform the annual impairment test. Management determined that, for the year ending December 31, 2020, there were no identifiable assets or liabilities; therefore, the implied fair value of goodwill is zero. On January 21, 2021, the Company entered into an Agreement and Plan of Merger with S and S and the five S and S Legacy Shareholders and acquired all of the capital stock of S and S Because of this, goodwill was recorded in the amount of $ 1,275,938 Goodwill and Intangible Assets Goodwill and Intangible Assets |
Leases | I. Leases On January 1, 2019, the Company adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred. The amortization period for the right-of-use asset is from the lease commencement date to the earlier of the end of the lease term or the end of the useful life of the asset. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate or the risk-free rate with the election of the practical expedient. The Company has elected to use the risk-free rate. |
Revenue and Provision for Sales, Returns, and Allowances | J. Revenue and Provision for Sales, Returns, and Allowances The Company sells its products, which primarily includes its hemp energy drinks, CBD energy waters, CBD waters, and logo apparel, to online customers or through resellers and distributors. In evaluating the timing of the transfer of control of products to customers, the Company considers several indicators, including significant risks and rewards of products, the Company’s right to payment, and the legal title of the products. The Company recognizes revenue from product sales to customers, distributors, and resellers when products that do not require further services by the Company are shipped, when there are no uncertainties surrounding customer acceptance, and when collectability is reasonably assured. Sales are made to customers under terms allowing certain limited rights of return. Amounts billed to customers in sales transactions related to shipping and handling, represent revenues earned for the goods provided and are included in net sales. Costs of shipping and handling are included in cost of products sold. The Company also sells its products, and beverages purchased for resale from several other beverage manufacturers, to convenience stores, grocery stores, and smoke and gift shops. In evaluating the timing of the transfer of control of products to customers, the Company considers several indicators, including significant risks and rewards of products, the Company’s right to payment, and the legal title of the products. The Company recognizes revenue from product sales to resellers when products that do not require further services by the Company are shipped or delivered, when there are no uncertainties surrounding customer acceptance and when collectability is reasonably assured. Cash received by the Company prior to shipment is recorded as deferred revenue. Sales are made to customers under terms allowing certain limited rights of return. Amounts billed to customers in sales transactions related to shipping and handling, represent revenues earned for the goods provided and are included in net sales. Costs of shipping and handling are included in cost of products sold. On January 1, 2019, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) To apply these principles, ASC Topic 606 outlines a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes: 1. Identifying the contract(s) or agreement(s) with a customer; 2. Identifying the separate performance obligations in the contract or agreement; 3. Determining the transaction price; 4. Allocating the transaction price to the separate performance obligations in the contract or agreement; and 5. Recognizing revenue as each performance obligation is satisfied. Pursuant to ASC Topic 606, the Company recognizes revenue when performance obligations under the terms of a contract are satisfied, which occurs typically upon the transfer of control, including the risks and rewards of ownership. With respect to the Company, performance is deemed to occur upon shipment or delivery of products to its customers based on the written contract terms, which is also when control is transferred. The Company evaluated the guidance in ASC 606-10-50-5 and the related implementation guidance to determine disaggregation of revenues that would be meaningful. The majority of the Company’s revenue earned from its Beverages Segment and its Distribution Segment is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. The Company does not have significant financing component or payment terms, and it does not have any material unsatisfied performance obligations. The Company’s revenues are obtained in similar geographical locations within the United States. Furthermore, the Company’s operations in each of its reporting segments are expected to have essentially the same future prospects, similar gross margins, sales trends, and the nature of its products and customers are essentially the same. The sales from the Company’s beverage product types are organized as one reportable segment, which the Company refers to as the Beverages Segment, and the sales of the Company’s products and products that are purchased from resellers that are distributed by Gold Leaf is organized as its second reportable segment, which the Company refers to as the Distribution Segment. The Company has also determined that disaggregated revenue by net sales by revenue source would be meaningful and allow investors to understand its business activities, historical performance, or future prospects. Disaggregated sales by revenue source, which includes sales to distributors, online sales, sales through Amazon, and Gold Leaf distribution sales, is included in Note 16, Revenue Sales are made to customers under terms allowing certain limited rights of return. The Company records an allowance and return for each quarter for 3% of total sales. The Company recorded sales, returns, and allowance at three months ending September 30, 2021 and 2020 of approximately $ 16,600 6,600 61,000 30,700 |
Cost of Revenues | K. Cost of Revenues Cost of revenues consist primarily of expenses associated with the delivery and distribution of products. These include expenses related to direct procurement costs and shipping and handling costs. The Company bills shipping and handling fees charged to customers as part of sales and the associated expense as part of cost of revenues. The costs are charged to cost of revenues in the same period that the associated revenue is earned. |
Impairment of Long-Lived Assets | L. Impairment of Long-Lived Assets The Company evaluates its long-lived assets for financial impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company evaluates the recoverability of long-lived assets used in operations by measuring the carrying amount of the assets against their estimated undiscounted future cash flows. If such evaluations indicated that the future undiscounted cash flows of certain long-lived assets are not sufficient to recover the carrying value of such assets, the assets are adjusted to fair values. Management completed an impairment review as of December 31, 2020 and determined long-lived assets were not impaired. |
Income Taxes | M. Income Taxes The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes, The Company has no recorded liabilities for uncertain tax positions as of the accompanying Consolidated Balance Sheets dated September 30, 2021 and December 31, 2020, respectively. |
Stock-Based Compensation | N. Stock-Based Compensation FASB’s ASC Topic 718, Stock Compensation The Company estimates the fair value of each restricted stock award as of the date of grant using the closing price as reported by the OTC Markets Group Inc. (the “OTCM”) on the date of grant. The fair value determined represents the cost for the award and is recognized over the vesting period during which an employee is required to provide service in exchange for the award. The Company accounts for forfeitures of restricted stock as they occur. |
Advertising Costs | O. Advertising Costs The Company expenses costs of advertising and promotions as incurred. The Company includes in advertising costs inventory given away as promotional merchandise or free samples to create sales. Advertising and promotion costs for the three months ended September 30, 2021 and 2020, was approximately $ 21,600 5,200 45,700 20,600 |
Concentration of Credit Risk | P. Concentration of Credit Risk The Company maintains cash balances at financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $ 250,000 |
Basic and Diluted Earnings per Share | Q. Basic and Diluted Earnings per Share In accordance with FASB’s ASC 260, Earnings per Share Diluted per-share loss is the same as basic per-share loss when there is a loss from continuing operations. |
Segments | R. Segments ASC 280-10, Segment Reporting The Company then applied the management approach to the identification of its two reportable segments – the Beverages Segment, consisting of the operations of Kona, HighDrate, and Ooh La Lemin, and the Distribution Segment, consisting of the operations of Gold Leaf. Specifically, the Company has evaluated guidance in ASC 280-10 and determined that aggregation is consistent with the objectives of ASC 280-10 in that aggregation into two reportable segments allows users of our financial statements to view the Company’s business through the eyes of management based upon the way management reviews performance and makes decisions. Additional factors that were considered included: whether or not an operating segment has similar economic characteristics, the nature of the products/services under each operating segment, the nature of the production/go-to-market process, the type and geographic location of our customers, and the distribution of our products/services. The Company further determined that its logo merchandise and apparel, which revenue comprises approximately 1% of the Company’s gross annual sales, and solely exists for promotion purposes, could be aggregated with the operations in the Beverages Segment. A description of the Company’s products is contained in Note 1, Organization and Description of Business. Segments. |
Registration Rights Agreement | S. Registration Rights Agreement In May 2020, the Company completed a private placement transaction (the “2020 Private Placement”) of three secured convertible debentures (the “2020 Debentures”), convertible for up to 105,947,397 20,000,000 Pursuant to the terms of the Registration Rights Agreement, the Company agreed to file the 2020 Registration Statement with the SEC registering for resale the Conversion Shares and the Warrant Shares within 45 calendar days following the closing of the Private Placement. Further, the Company agreed to use its best efforts to have the 2020 Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the effectiveness deadline, or by the 5 th th The Company accounts for registration rights agreements in accordance with ASC subtopic 825-20, Registration Payment Arrangements Loss Contingencies In February 2021, the Company completed a private placement transaction (the “February 2021 Private Placement”) of two secured convertible debentures (the “February 2021 Debentures”), convertible for up to 154,958,678 shares (the “February 2021 Conversion Shares”) of Common Stock and granted a Warrant to purchase Common Stock (the “February 2021 Warrant”), exercisable for up to 50,000,000 shares of Common Stock (the “February 2021 Warrant Shares”), pursuant to that certain Securities Purchase Agreement between the Selling Stockholder and the Company, dated as of February 10, 2021 (the “February 2021 SPA”). The Company sold and issued the initial February 2021 Debenture (the “First February 2021 Debenture”) and granted the February 2021 Warrant promptly after entering in the February 2021 SPA. The Company will sell and issue the second February 2021 Debenture (the “Second February 2021 Debenture”) promptly after the SEC declares effective the February 2021 Registration Statement (as defined below). The February 2021 Debentures are due 12 months from their respective issuance dates and are secured by all of the Company’s assets and the assets of each of its subsidiaries pursuant to that certain Security Agreement by and among the Selling Stockholder, the Company’s subsidiaries, and the Company. Initially, the February 2021 Debentures are convertible at the lower of (i) the fixed conversion price, which is $ 0.03 At the Company’s option, it has the right to redeem, in part or in whole, the outstanding principal and interest under the February 2021 Debentures prior to their respective maturity dates; provided, that, as of the date of the holder’s receipt of the redemption notice, (i) the VWAP of the Common Stock is less than the February 2021 Fixed Conversion Price, initially $0.03 per share, and (ii) there is no Equity Conditions failure. The Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as well as a redemption premium equal to 15% of the outstanding principal amount being redeemed (the “Redemption Premium”). The Company must provide the holder 15 business days’ advance notice of its intent to make a redemption, setting forth the amount of principal and interest we desire then to redeem plus the applicable Redemption Premium The February 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of Common Stock or common stock equivalents at a price lower than the then-current conversion price of the February 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the February 2021 Debentures. Pursuant to the February 2021 SPA, the purchase price for the First February 2021 Debenture was $ 900,000 41,000 36,000 5,000 600,000 24,000 In connection with the February 2021 Private Placement, the Company also granted the February 2021 Warrant to purchase up to an aggregate of 50 million shares of the Common Stock. The February 2021 Warrant has a three-year term and is immediately exercisable at an exercise price of $ 0.03 The The February 2021 Warrant contains an adjustment provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common Stock or common stock equivalents at a price lower than the then-current exercise price of the February 2021 Warrant. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the exercise price of the February 2021 Warrant. The February 2021 Warrant is subject to an “exercise blocker” such that the Selling Stockholder cannot exercise any portion of the February 2021 Warrant that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following such exercise (excluding, for purposes of such determination, shares of the Common Stock issuable upon exercise of the February 2021 Warrant or conversion of the February 2021 Debentures that had not then been exercised or converted, respectively). The Selling Stockholder can increase that 4.99% “exercise blocker” to 9.99% upon at least 65 days’ prior written notice to the Company. Pursuant to the terms of the February 2021 Registration Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1 (the “February 2021 Registration Statement”) with the SEC registering for resale the February 2021 Conversion Shares and the February 2021 Warrant Shares within 30 calendar days following the closing of the February 2021 Private Placement. The Selling Stockholder has agreed to waive this 30-calendar-day provision for so long as the Company utilized its best efforts to file its Annual Report on Form 10-K for its fiscal year ended December 31, 2020, and promptly thereafter files the February 2021 Registration Statement. Further, the Company agreed to use its best efforts to have the February 2021 Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the effectiveness deadline, or by the 5th trading day following the date on which the Company is notified that the February 2021 Registration Statement will not be reviewed or is no longer subject to further review and comments. Pursuant to the February 2021 Registration Rights Agreement, the Company is subject to partial liquidated damages equal to 2.0% of the aggregate purchase price paid by the holder pursuant to the February 2021 SPA for either of the February 2021 Debentures then held by the holder for failure to file the February 2021 Registration Statement timely, failure to file with the SEC a request for acceleration in accordance with Rule 461 promulgated under the Securities Act, within five trading days after the date the Company is notified that the February 2021 Registration Statement will not be reviewed or is not subject to further review, the February 2021 Registration Statement is not declared effective by the effectiveness deadline, if after effectiveness, the February 2021 Registration Statement ceases for any reason to remain continuously effective as required or if the holders are not permitted to utilize the prospectus therein to resell for more than 30 consecutive calendar days or more than an aggregate of 40 calendar days during any 12-month period, or if after the six-month anniversary of the February 2021 Registration Rights Agreement, the Company does not have available adequate current public information as set forth in Rule 144(c). The parties agreed that the maximum aggregate liquidated damages payable to a holder of the February 2021 Debentures under the February 2021 Registration Rights Agreement is 24% of the aggregate purchase price paid by such holder pursuant to the February 2021 SPA. The Company also agreed, among other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses incurred by the Company in connection with the registration of the February 2021 Conversion Shares and the February 2021 Warrant Shares held by the Selling Stockholder. The Commission declared effective the February 2021 Registration Statement. In August 2021, the Company completed a private placement transaction (the “August 2021 Private Placement”) of two secured convertible debentures (the “August 2021 Debentures”), convertible for up to 1,111,111,110 shares (the “August 2021 Conversion Shares”) of Common Stock and granted a Warrant to purchase Common Stock (the “August 2021 Warrant”), exercisable for up to 100,000,000 shares of Common Stock (the “August 2021 Warrant Shares”), pursuant to that certain Securities Purchase Agreement between the Selling Stockholder and the Company, dated as of August 20, 2021 (the “August 2021 SPA”). The Company sold and issued the initial August 2021 Debenture (the “First August 2021 Debenture”) and granted the August 2021 Warrant promptly after entering in the August 2021 SPA. The Company will sell and issue the second August 2021 Debenture (the “Second August 2021 Debenture”) promptly after the SEC declares effective the August 2021 Registration Statement (as defined below). The August 2021 Debentures are due 12 months from their respective issuance dates and are secured by all of the Company’s assets and the assets of each of its subsidiaries pursuant to that certain Security Agreement by and among the Selling Stockholder, the Company’s subsidiaries, and the Company. Initially, the August 2021 Debentures are convertible at the lower of (i) the fixed conversion price, which is $0.03 per share, subject to adjustment (the “August 2021 Fixed Conversion Price”), or (ii) 75% of the lowest daily volume weighted average price (“VWAP”) of our Common Stock during the 15 trading days immediately preceding the conversion date, subject to adjustment (the “August 2021 Market Conversion Price”). The August 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of its Common Stock or common stock equivalents at a price lower than the then-current conversion price of the August 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the August 2021 Debentures. The August 2021 Debentures are subject to a “conversion blocker” such that the Selling Stockholder cannot convert any portion of the August 2021 Debentures that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following such conversion (excluding, for purposes of such determination, shares of the Common Stock issuable upon conversion of the August 2021 Debentures or exercise of the August 2021 Warrant that had not then been converted or exercised, respectively). The Selling Stockholder can increase that 4.99% “conversion blocker” to 9.99% upon at least 65 days’ prior written notice to the Company. The August 2021 Debentures accrue interest at an annual rate equal to 8% and are due and payable on their respective maturity dates (or sooner if the Selling Stockholder converts the August 2021 Debentures or otherwise accelerates the maturity date, as provided for in the August 2021 Debentures). Interest is payable either in cash or, if certain Equity Conditions (as defined in the August 2021 Debentures) are then satisfied, in shares of the Common Stock at the August 2021 Market Conversion Price on the trading day immediately prior to the date paid. At the Company’s option, it has the right to redeem, in part or in whole, the outstanding principal and interest under the August 2021 Debentures prior to their respective maturity dates; provided, that, as of the date of the holder’s receipt of the redemption notice, (i) the VWAP of the Common Stock is less than the August 2021 Fixed Conversion Price, initially $0.03 per share, and (ii) there is no Equity Conditions failure. The Company must pay an amount equal to the principal amount being redeemed plus outstanding and accrued interest thereon, as well as a redemption premium equal to 15% of the outstanding principal amount being redeemed (the “Redemption Premium”). The Company must provide the holder 15 business days’ advance notice of its intent to make a redemption, setting forth the amount of principal and interest we desire then to redeem plus the applicable Redemption Premium The August 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of Common Stock or common stock equivalents at a price lower than the then-current conversion price of the August 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the August 2021 Debentures. Pursuant to the August 2021 SPA, the purchase price for the First August 2021 Debenture was $ 1,500,000 70,000 60,000 10,000 1,500,000 60,000 In connection with the August 2021 Private Placement, the Company also granted the August 2021 Warrant to purchase up to an aggregate of 50 3 0.03 The August 2021 Warrant contains an adjustment provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common Stock or common stock equivalents at a price lower than the then-current exercise price of the August 2021 Warrant. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the exercise price of the August 2021 Warrant. The August 2021 Warrant is subject to an “exercise blocker” such that the Selling Stockholder cannot exercise any portion of the August 2021 Warrant that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following such exercise (excluding, for purposes of such determination, shares of the Common Stock issuable upon exercise of the August 2021 Warrant or conversion of the August 2021 Debentures that had not then been exercised or converted, respectively). The Selling Stockholder can increase that 4.99% “exercise blocker” to 9.99% upon at least 65 days’ prior written notice to the Company. Pursuant to the terms of the August 2021 Registration Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1 (the “August 2021 Registration Statement”) with the SEC registering for resale the August 2021 Conversion Shares and the August 2021 Warrant Shares within 30 calendar days following the closing of the August 2021 Private Placement. The Selling Stockholder has agreed to waive this 30-calendar-day provision for so long as the Company utilized its best efforts to file its Annual Report on Form 10-K for its fiscal year ended December 31, 2020, and promptly thereafter files the August 2021 Registration Statement. Further, the Company agreed to use its best efforts to have the August 2021 Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the effectiveness deadline, or by the 5th trading day following the date on which the Company is notified that the August 2021 Registration Statement will not be reviewed or is no longer subject to further review and comments. Pursuant to the August 2021 Registration Rights Agreement, the Company is subject to partial liquidated damages equal to 2.0% of the aggregate purchase price paid by the holder pursuant to the August 2021 SPA for either of the August 2021 Debentures then held by the holder for failure to file the August 2021 Registration Statement timely, failure to file with the SEC a request for acceleration in accordance with Rule 461 promulgated under the Securities Act, within five trading days after the date the Company is notified that the August 2021 Registration Statement will not be reviewed or is not subject to further review, the August 2021 Registration Statement is not declared effective by the effectiveness deadline, if after effectiveness, the August 2021 Registration Statement ceases for any reason to remain continuously effective as required or if the holders are not permitted to utilize the prospectus therein to resell for more than 30 consecutive calendar days or more than an aggregate of 40 calendar days during any 12-month period, or if after the six-month anniversary of the August 2021 Registration Rights Agreement, the Company does not have available adequate current public information as set forth in Rule 144(c). The parties agreed that the maximum aggregate liquidated damages payable to a holder of the August 2021 Debentures under the August 2021 Registration Rights Agreement is 24% of the aggregate purchase price paid by such holder pursuant to the August 2021 SPA. The Company also agreed, among other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses incurred by the Company in connection with the registration of the August 2021 Conversion Shares and the August 2021 Warrant Shares held by the Selling Stockholder. The Commission declared effective the August 2021 Registration Statement. |
Recently Issued Accounting Pronouncements | T. Recently Issued Accounting Pronouncements The Company has evaluated all recently issued accounting pronouncements, issued or proposed, by the FASB or other standards-setting bodies as of the period ending September 30, 2021. The Company does not expect a material impact on the Company’s financial position, result of operations, or cash flows from these pronouncements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives of asset | Schedule of estimated useful lives of asset Estimated useful lives (in years) Furniture and fixtures 7 Machinery and equipment 7 Vehicles 5 Computer equipment 5 7 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Schedule of Inventory September 30, 2021 December 31, 2020 CBD Energy Water $ 111,414 $ 159,813 Hemp Energy Drink 248,507 343,119 Storm CBD Water 29,519 28,692 Ooh La Lemin Drink 162,004 — Merchandise and Apparel 11,564 11,948 Unfilled Cans, Trays and Sleeves 44,134 38,705 Miscellaneous Beverages 95,030 33,225 Raw Materials 17,444 Other Inventory 140,274 43,362 Point of Sale Inventory 6,723 1,640 Total Inventory $ 866,613 $ 660,504 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | Schedule of property, plant and equipment September 30, 2021 December 31, 2020 Furniture and Fixtures $ 72,575 $ 57,879 Computers and Software 28,108 16,638 Machinery & Equipment 98,593 79,951 Vehicles 160,415 68,135 Less: Accumulated Depreciation (78,662 ) (54,731 ) Property, plant and equipment, net $ 281,029 $ 167,872 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in goodwill | Schedule of changes in goodwill September 30, December 31, 2021 2020 Beginning of year $ — $ — Acquired goodwill 1,275,938 — Impairment — — Total goodwill $ 1,275,938 $ — |
Schedule of intangible assets | Schedule of intangible assets September 30, 2021 December 31, 2020 Trademark (HighDrate) $ 81,750 $ 81,750 Website Development (Ooh La Lemin) 12,201 — Less: Accumulated Amortization (19,207 ) (12,262 ) Total Intangible Asset $ 74,744 $ 69,488 |
Schedule of estimated future amortization expense | Schedule of estimated future amortization expense Fiscal year ending: December 31, 2021 (remaining 3 months) 2,349 December 31, 2022 9,395 December 31, 2023 9,395 December 31, 2024 9,395 December 31, 2025 9,395 Thereafter 34,815 Finite-Lived Intangible Assets, Net $ 74,744 |
NOTE RECEIVABLE (Tables)
NOTE RECEIVABLE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Note Receivable | |
Schedule of note receivable | Schedule of note receivable September 30, 2021 December 31, 2020 Investment in Branded Legacy $ — $ — Note receivable 1,500,000 1,500,000 Less: Allowance for doubtful account (1,500,000 ) (1,500,000 ) Note receivable, net $ — $ — |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Stock-based compensation expense | Stock-based compensation expense Nine Months Ended September 30, Nine Months Ended September 30, 2021 2020 Employee stock awards $ 55,800 $ 476,000 Non-employee stock awards 270,900 2,577 Total stock-based compensation expense $ 326,700 $ 478,577 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of future maturities | Schedule of future maturities December 31, 2021 (remaining 3 months) $ 55,000 Long-term Debt $ 55,000 |
SECURITIES PURCHASE AGREEMENT_2
SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND WARRANT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Securities Purchase Agreement Derivative Liabilities And Warrant | |
Schedule of derivative liabilities | Schedule of derivative liabilities September 30, 2021 Stock Price $ 0.0166 Exercise Price $ 0.0124 Expected Life 1 Volatility 87.6 % Dividend Yield 0 % Risk-Free Interest Rate 0.08 % Fair Value $ 1,225,741 |
Schedule of assets and liabilities measured at fair value | Schedule of assets and liabilities measured at fair value March 31, 2021 Quoted prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Convertible promissory notes with embedded conversion option $ 1,225,741 $ 1,225,741 Total $ 1,225,741 $ 1,225,741 |
Summary of change in fair value of derivative liability | Summary of change in fair value of derivative liability Fair value, January 1, 2020 $ — Change in fair value of embedded conversion features of debenture included in earnings — Embedded conversion option liability recorded in connection with the issuance of 2020 debenture 148,628 Fair value, June 30, 2020 $ 148,628 Change in fair value of embedded conversion features of debenture included in earnings (39,725 ) Embedded conversion option liability recorded in connection with the issuance of 2020 debentures 108,903 Fair value, September 30, 2020 $ 217,806 Change in fair value of embedded conversion features of debenture included in earnings (69,051 ) Embedded conversion option liability recorded in connection with the issuance of 2020 debentures 212,397 Fair value, December 31, 2020 $ 361,152 Change in fair value of embedded conversion features of debenture included in earnings (202,443 ) Embedded conversion option liability recorded in connection with the issuance of 2021 debentures 468,309 Fair value, March 31, 2021 $ 627,018 Change in fair value of embedded conversion features of debenture included in earnings (307,585 ) Embedded conversion option liability recorded in connection with the issuance of February 2021 debentures 166,088 Fair value, June 30, 2021 $ 485,521 Change in fair value of embedded conversion features of debenture included in earnings (120,306 ) Embedded conversion option liability recorded in connection with the issuance of August 2021 debentures 860,526 Fair value, September 30, 2021 $ 1,225,741 |
LEASE LIABILITIES (Tables)
LEASE LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Lease Liabilities | |
Schedule of right-of-use asset and lease liability related to operating leases | Schedule of right-of-use asset and lease liability related to operating leases September 30, 2021 December 31, 2020 Right-of-use asset $ 1,503,115 $ 1,072,094 Amortization of right-of-use asset (284,012 ) (159,101 ) Right-of-use asset, net $ 1,219,103 $ 912,993 Operating lease liability Current portion of long-term lease $ 41,806 $ 149,407 Long-term lease 1,177,297 763,586 Total operating lease liability $ 1,219,103 $ 912,993 |
Schedule of future payments due under operating leases | Schedule of future payments due under operating leases Fiscal year ending: December 31, 2021 (3 months remaining) 41,806 December 31, 2022 230,954 December 31, 2023 242,966 December 31, 2024 251,127 December 31, 2025 254,282 2026 and thereafter 197,968 Operating Leases, Future Minimum Payments Due $ 1,219,103 |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue | |
Schedule of net revenues, by revenue source | Schedule of net revenues, by revenue source Three Months Ended September 30, 2020 2021 Revenue Source Revenue Revenue % Change Distributors $ 140,003 $ 150,929 8 % Amazon 46,078 41,669 ( 10 )% Online Sales 15,663 17,678 13 % Gold Leaf Distribution 108,719 347,247 219 % Shipping 8,846 4,451 50 % Sales Returns and Allowances (6,600 ) (16,599 ) 152 % Net Revenues $ 312,709 $ 545,375 74 % Nine Months Ended September 30, 2020 2021 Revenue Source Revenue Revenue % Change Distributors $ 367,912 $ 784,023 113 % Amazon 121,317 119,428 ( 2 )% Online Sales 35,176 57,725 64 % Gold Leaf Distribution 228,881 883,825 286 % Shipping 19,181 15,039 ( 22 )% Sales Returns and Allowances (30,655 ) (61,041 ) 99 % Net Revenues $ 741,812 $ 1,798,999 143 % |
Schedule of net revenues, by revenue source, as a percentage | Schedule of net revenues, by revenue source, as a percentage Three Months Ended September 30, Revenues 2020 2021 Distributors and Resellers 45 % 28 % Amazon 15 % 8 % Online Sales 5 % 3 % Gold Leaf Distribution 35 % 64 % Shipping 3 % 1 % Sales Returns, and Allowances ( 2 )% ( 3 )% Nine Months Ended September 30, Revenues 2020 2021 Distributors and Resellers 50 % 44 % Amazon 16 % 7 % Online Sales 5 % 3 % Gold Leaf Distribution 31 % 49 % Shipping 3 % 1 % Sales Returns, and Allowances ( 4 )% ( 3 )% |
SEGMENTS (Tables)
SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Schedule of Segment Reporting Information September 30, 2021 December 31, 2020 CURRENT ASSETS: Beverages Segment $ 1,386,003 $ 824,835 Distribution Segment (253,117 ) (146,894 ) Corporate and eliminations 427,563 105,671 Total Current Assets $ 1,560,449 $ 783,612 NON-CURRENT ASSETS: Beverages Segment $ 2,216,976 $ 1,063,074 Distribution Segment 638,620 85,546 Corporate and eliminations 7,968 8,233 Total Non-Current Assets $ 2,683,564 $ 1,156,853 CURRENT LIABILITIES: Beverages Segment $ 1,899,473 $ 1,879,305 Distribution Segment 144,926 72,576 Corporate and eliminations 3,796,611 1,424,367 Total Current Liabilities $ 5,841,010 $ 3,376,248 NON-CURRENT LIABILITIES: Beverages Segment $ 2,993,658 $ 2,616,018 Distribution Segment 654,434 192,350 Corporate and eliminations — — Total Non-Current Liabilities $ 3,648,092 $ 2,808,368 Three Months Ended September 30, Nine Months Ended September 30, 2020 2021 2020 2021 REVENUES, NET OF SALES, RETURNS, AND ALLOWANCES: Beverages Segment $ 245,918 $ 207,763 $ 613,016 $ 1,018,041 Distribution Segment 108,719 374,247 228,881 883,825 Corporate and Eliminations (41,928 ) (36,635 ) (100,085 ) (102,867 ) Total Revenues, Net of Sales, Returns, and Allowances $ 312,709 $ 545,375 $ 741,812 $ 1,798,999 COST OF REVENUES: Beverages Segment $ 160,289 201,413 417,159 864,872 Distribution Segment 83,912 258,151 173,638 622,210 Corporate and Eliminations (22,090 ) (16,798 ) (67,023 ) (43,355 ) Total Cost of Revenues $ 222,111 $ 442,766 $ 523,774 $ 1,443,727 OPERATING EXPENSES: Beverages Segment $ 339,688 $ 514,995 $ 1,380,612 $ 1,308,456 Distribution Segment 70,385 152,578 198,547 353,239 Corporate and Eliminations 90,160 88,537 260,845 307,146 Total Operating Expenses $ 500,233 $ 756,110 $ 1,840,004 $ 1,968,841 OTHER INCOME / (EXPENSE): Beverages Segment $ (19,455 ) $ (34,964 ) $ (35,887 ) $ 11,964 Distribution Segment (1,173 ) (1,708 ) 3,932 4,041 Corporate and Eliminations (79,178 ) (1,540,542 ) (517,371 ) (2,825,835 ) Total Other Income / (Expense) $ (99,806 ) $ 1,577,214 $ (549,326 ) $ (2,809,830 ) NET LOSS: Beverages Segment $ (273,514 ) $ (543,609 ) $ (1,220,642 ) $ (1,167,251 ) Distribution Segment (46,751 ) (38,190 ) (139,372 ) (87,583 ) Corporate and Eliminations (189,176 ) (1,648,916 ) (811,278 ) (3,168,565 ) Total Net Loss $ (509,441 ) $ (2,230,715 ) $ (2,171,292 ) $ (4,423,399 ) |
ACQUISITION OF S AND S BEVERA_2
ACQUISITION OF S AND S BEVERAGE, INC. (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of acquisition | Schedule of acquisition Balance Sheet Book Value Fair Value Accounts receivable, net of allowance of $24,280 $ 9,437 $ 33,717 Inventory 240,797 249,648 Property, plant and equipment, net (Website Development) 12,201 12,201 Total Assets $ 262,435 $ 295,566 Accounts payable and accrued liabilities $ 55,553 $ 956 Outstanding checks 23,058 — Interest payable 11,915 — Due to customers 19,667 — Current note payable - related party 811,761 1,050,000.00 Common Stock, $30.05 par value, 10,000 shares issued and outstanding, respectively 300,500 Additional paid-in-capital 437,701 Accumulated deficit (1,397,720 ) Total liabilities and stockholders’ deficit $ 262,435 The following are the accounts included in the Company’s accompanying balance sheet dated March 31, 2021 as a result of the S and S transaction: Balance Sheet Accounts receivable $ 33,717 Website Development (Ooh La Lemin) 12,201 Goodwill 1,275,938 Total Assets $ 1,321,856 Accounts payable and accrued liabilities $ 956 Loan on Acquisition 650,000 Due to merger payments 400,000 Common stock, $.00001 par value, 9,000,000 shares issued 90 Additional paid-in capital 270,810.00 Total liabilities and stockholders’ deficit $ 1,321,856 |
CONCENTRATIONS (Tables)
CONCENTRATIONS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
Schedule of accounts receivable | Schedule of accounts receivable September 30, 2021 December 31, 2020 Total Accounts Receivable $ 139,235 $ 22,166 Less: Sales Returns and Allowances 61,041 28,707 Less: Doubtful Accounts 7,709 3,967 Less: Intercompany Transactions 6,738 — Accounts Receivable, net $ 63,715 $ (10,508 ) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Computer Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Computer Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | May 31, 2020 | |
Offsetting Assets [Line Items] | ||||||
Bad debt | $ 21,000 | $ 41,600 | ||||
Allowance for Uncollectible Accounts | $ 7,709 | 7,709 | $ 3,967 | |||
Asstes capitalized cost | 100 | 100 | ||||
Impairment of goodwill | 1,275,938 | |||||
Sales, returns and allowance | 16,600 | $ 6,600 | 61,000 | 30,700 | $ 28,707 | |
Advertising costs | 21,600 | $ 5,200 | 45,700 | $ 20,600 | ||
FDIC limit | $ 250,000 | $ 250,000 | ||||
Convertible shares | 105,947,397 | |||||
Shares issued | 20,000,000 | |||||
Fixed conversion price | $ 0.03 | $ 0.03 | $ 0.05 | |||
Exercisable exercise price | $ 0.03 | $ 0.03 | ||||
First 2021 Debenture [Member] | ||||||
Offsetting Assets [Line Items] | ||||||
Purchase price | $ 900,000 | |||||
Origination fees | 41,000 | |||||
Original issue discount | $ 36,000 | 36,000 | ||||
Structuring fee | 5,000 | 5,000 | ||||
Second 2021 Debenture [Member] | ||||||
Offsetting Assets [Line Items] | ||||||
Purchase price | 600,000 | |||||
Original issue discount | 24,000 | 24,000 | ||||
First 2021 Second Debenture [Member] | ||||||
Offsetting Assets [Line Items] | ||||||
Purchase price | 1,500,000 | |||||
Origination fees | 70,000 | |||||
Original issue discount | 60,000 | 60,000 | ||||
Structuring fee | $ 10,000 | 10,000 | ||||
Second 2021 Second Debenture [Member] | ||||||
Offsetting Assets [Line Items] | ||||||
Purchase price | 1,500,000 | |||||
Origination fees | $ 60,000 | |||||
Second 2021 Second Warrant Shares [Member] | ||||||
Offsetting Assets [Line Items] | ||||||
Exercisable exercise price | $ 0.03 | $ 0.03 | ||||
Aggregate of common stock | 50,000,000 | |||||
Warrant term | 3 years | 3 years |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
CBD Energy Water | $ 111,414 | $ 159,813 |
Hemp Energy Drink | 248,507 | 343,119 |
Storm CBD Water | 29,519 | 28,692 |
Ooh La Lemin Drink | 162,004 | |
Merchandise and Apparel | 11,564 | 11,948 |
Unfilled Cans, Trays and Sleeves | 44,134 | 38,705 |
Miscellaneous Beverages | 95,030 | 33,225 |
Raw Materials | 17,444 | |
Other Inventory | 140,274 | 43,362 |
Point of Sale Inventory | 6,723 | 1,640 |
Total Inventory | $ 866,613 | $ 660,504 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Less: Accumulated Depreciation | $ (78,662) | $ (54,731) |
Property, Plant and Equipment, net | 281,029 | 167,872 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 72,575 | 57,879 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 28,108 | 16,638 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 98,593 | 79,951 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 160,415 | $ 68,135 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 12,500 | $ 9,200 | $ 32,800 | $ 24,800 |
GOODWILL AND INTANGIBLE ASSET (
GOODWILL AND INTANGIBLE ASSET (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Beginning of year | $ 0 | |
Acquired goodwill | 1,275,938 | |
Impairment | ||
Ending of year | $ 1,275,938 | $ 0 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSET (Details 1) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Trademark (HighDrate) | $ 81,750 | $ 81,750 |
Website Development (Ooh La Lemin) | 12,201 | |
Less: Accumulated Amortization | (19,207) | (12,262) |
Total Intangible Asset | $ 74,744 | $ 69,488 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSET (Details 2) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
December 31, 2021 (remaining 3 months) | $ 2,349 | |
December 31, 2022 | 9,395 | |
December 31, 2023 | 9,395 | |
December 31, 2024 | 9,395 | |
December 31, 2025 | 9,395 | |
Thereafter | 34,815 | |
Finite-Lived Intangible Assets, Net | $ 74,744 | $ 69,488 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - USD ($) | Mar. 10, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Aquisition description | Gold Leaf acquired 21,000,000 shares, representing 51.65% of the issued and outstanding shares of common stock, $0.01 par value per share, of BigSupersearch.com, Inc., a California corporation (“BigSupersearch”), and 14,000,000 shares of its Series A preferred stock, representing 76.26% of the issued and outstanding shares of preferred stock, for an aggregate of $61,000, which amount included the purchase price, attorney fees, and transfer fees. At the time of the acquisition, BigSupersearch was considered a “shell company” because it had no operations and no assets. Because no transfer of assets or liabilities occurred, the entire $61,000, representing the consideration paid for all of the issued and outstanding capital stock of BigSupersearch, was recorded as goodwill. | |||||
Goodwill | $ 1,275,938 | $ 61,000 | $ 0 | $ 0 | ||
Acquisition payments | $ 400,000 | 89,000 | ||||
Acquisition share price | $ 2 | |||||
Impairment of goodwill | $ 1,275,938 |
NOTE RECEIVABLE (Details)
NOTE RECEIVABLE (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Note Receivable | ||
Investment in Branded Legacy | ||
Note receivable | 1,500,000 | 1,500,000 |
Less: Allowance for doubtful account | (1,500,000) | (1,500,000) |
Note receivable, net |
NOTE RECEIVABLE (Details Narrat
NOTE RECEIVABLE (Details Narrative) - USD ($) | Mar. 06, 2018 | Apr. 14, 2017 | Oct. 10, 2016 | Nov. 26, 2019 | Sep. 30, 2016 | Mar. 31, 2021 | Sep. 30, 2021 | May 05, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | Jun. 30, 2016 |
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restricted shares issued for acquisition, amount | $ 270,900 | ||||||||||
Common stock par value | $ 0.00001 | $ 0.00001 | |||||||||
Common stock, shares outstanding | 146,803,392 | 883,068,249 | 786,308,041 | ||||||||
Debt instrument, principal amount | $ 200,000 | ||||||||||
Allowance for doubtful account | $ 1,500,000 | $ 1,500,000 | |||||||||
Branded Legacy [Member] | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Investment | $ 1,648 | ||||||||||
Stockholders [Member] | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Common stock dividends, shares | 53,196,608 | ||||||||||
First Exchange Agreement [Member] | Branded Legacy [Member] | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Remaining investment, shares | 146,803,392 | ||||||||||
Shares held by company | 2,746,723 | ||||||||||
Preferred stock, shares converted | 164,803,380 | ||||||||||
Second Exchange Agreement [Member] | Branded Legacy [Member] | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Remaining investment, shares | 2,746,723 | ||||||||||
Debt instrument, principal amount | $ 1,500,000 | ||||||||||
Elev 8 Hemp [Member] | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Ownership percentage | 100.00% | ||||||||||
Restricted shares issued for acquisition, amount | $ 50,000 | ||||||||||
Purchase price | $ 50,000 | ||||||||||
Elev 8 Hemp [Member] | Membership Interest Purchase Agreement [Member] | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Ownership percentage | 100.00% | ||||||||||
Business acquisition, shares issued | 200,000,000 | ||||||||||
Common stock par value | $ 0.00001 |
STOCK BASED COMPENSATION (Detai
STOCK BASED COMPENSATION (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Subsidiary, Sale of Stock [Line Items] | ||
Stock-based compensation expense | $ 326,700 | $ 478,577 |
Employee Stock [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Stock-based compensation expense | 55,800 | 476,000 |
Non Employee Stock [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Stock-based compensation expense | $ 270,900 | $ 2,577 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | ||
Stock-based compensation granted | $ 12,100,000 | $ 10,085,140 |
Accrued stock-based compensation | $ 1,386,497 | $ 1,386,497 |
LINE OF CREDIT (Details Narrati
LINE OF CREDIT (Details Narrative) - USD ($) | 1 Months Ended | ||
May 05, 2018 | Sep. 30, 2021 | Dec. 31, 2020 | |
Line Of Credit | |||
Revolving line of credit | $ 400,000 | ||
Mature date on line of credit | May 5, 2022 | ||
Interest rate | 3.75% | ||
Line of credit | $ 198,470 | $ 398,470 | |
Accrued interest | $ 42,683 | $ 32,102 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | Apr. 04, 2019 | Aug. 29, 2019 | Sep. 30, 2021 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | ||||
December 31, 2021 (remaining 3 months) | $ 55,000 | |||
Long-term Debt | 55,000 | |||
Lline of credit | 198,470 | $ 398,470 | ||
Accrued interest | 42,683 | 32,102 | ||
Kona Gold L L C [Member] | ||||
Related Party Transaction [Line Items] | ||||
Line of credit from related party | $ 1,500,000 | |||
Line of credit interest rate | 3.75% | |||
Lline of credit | 1,372,651 | 1,369,651 | ||
Accrued interest | 73,906 | 36,397 | ||
Gold Leaf L L C [Member] | ||||
Related Party Transaction [Line Items] | ||||
Line of credit from related party | $ 200,000 | |||
Line of credit interest rate | 3.75% | |||
Lline of credit | 125,500 | 100,000 | ||
Accrued interest | $ 7,065 | $ 3,545 |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Mar. 15, 2021 | Feb. 19, 2019 | Oct. 31, 2018 | Sep. 30, 2021 | May 05, 2021 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | ||||||
Principal amount | $ 200,000 | |||||
Principal payment | $ 500 | |||||
Note payable related party | $ 1,500 | $ 12,000 | ||||
Remaining outstanding principle | $ 58,000 | |||||
Kona Gold L L C [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Principal amount | $ 20,000 | |||||
Principal payment | $ 500 | |||||
Note payable related party | 8,500 | |||||
Gold Leaf L L C [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Principal amount | $ 70,000 | |||||
Principal payment | $ 500 | |||||
Note payable related party | $ 55,000 | $ 59,500 |
SECURITIES PURCHASE AGREEMENT_3
SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND WARRANT (Details) | 9 Months Ended |
Sep. 30, 2021USD ($)$ / shares | |
Securities Purchase Agreement Derivative Liabilities And Warrant | |
Stock Price | $ 0.0166 |
Exercise Price | $ 0.0124 |
Expected Life | 1 year |
Volatility | 87.60% |
Dividend Yield | 0.00% |
Risk-Free Interest Rate | 0.08% |
Fair Value | $ | $ 1,225,741 |
SECURITIES PURCHASE AGREEMENT_4
SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND WARRANT (Details 1) - USD ($) | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||||||
Derivative liability | $ 1,225,741 | $ 485,521 | $ 627,018 | $ 361,152 | $ 217,806 | $ 148,628 | |
Fair Value, Inputs, Level 2 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Derivative liability | 1,225,741 | ||||||
Convertible Promissory Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Derivative liability | 1,225,741 | ||||||
Convertible Promissory Notes [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Derivative liability | $ 1,225,741 |
SECURITIES PURCHASE AGREEMENT_5
SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND WARRANT (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | |
Securities Purchase Agreement Derivative Liabilities And Warrant | ||||||
Fair value at beginning | $ 485,521 | $ 627,018 | $ 361,152 | $ 217,806 | $ 148,628 | |
Change in fair value of embedded conversion features of debenture included in earnings | (120,306) | (307,585) | (202,443) | (69,051) | (39,725) | |
Embedded conversion option liability recorded in connection with the issuance of debenture | 860,526 | 166,088 | 468,309 | 212,397 | 108,903 | 148,628 |
Fair value at beginning | $ 1,225,741 | $ 485,521 | $ 627,018 | $ 361,152 | $ 217,806 | $ 148,628 |
SECURITIES PURCHASE AGREEMENT_6
SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND WARRANT (Details Narrative) - USD ($) | Jun. 09, 2021 | May 05, 2021 | Jan. 12, 2021 | Jul. 23, 2021 | Feb. 28, 2021 | Feb. 19, 2021 | Jan. 25, 2021 | Dec. 23, 2020 | Jan. 25, 2020 | Sep. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | May 31, 2020 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Conversion price | $ 0.03 | $ 0.05 | |||||||||||
Debt instrument face amount | $ 200,000 | ||||||||||||
Convertible debenture purchase price | $ 192,000 | ||||||||||||
Exercise price | $ 0.03 | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number | 50,000,000 | 20,000,000 | |||||||||||
Warrant 2020 [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Purchase up to an aggregate | 20,000,000 | ||||||||||||
Warrant 2021 [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Purchase up to an aggregate | 50,000,000 | ||||||||||||
Warrant 20212 [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Purchase up to an aggregate | 100,000,000 | ||||||||||||
First 2021 Debenture [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Original issue discount | $ 36,000 | ||||||||||||
Structuring fee | 5,000 | ||||||||||||
Supplemental Deferred Purchase Price | 900,000 | ||||||||||||
Amortization of Deferred Loan Origination Fees, Net | 41,000 | ||||||||||||
Second 2021 Debenture [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Original issue discount | 24,000 | ||||||||||||
Supplemental Deferred Purchase Price | 600,000 | ||||||||||||
First 20212 Debenture [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Structuring fee | 10,000 | ||||||||||||
First 2020 Debenture [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Conversion price | $ 0.0213 | ||||||||||||
Number of shares issued | 7,094,732 | ||||||||||||
First 2020 Debenture [Member] | Principal [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Conversion of Stock, Amount Converted | $ 150,000 | ||||||||||||
Second 2020 Debenture [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Conversion price | $ 0.030 | $ 0.0160 | $ 0.0208 | $ 0.0213 | |||||||||
Number of shares issued | 7,252,634 | 5,183,613 | |||||||||||
Second 2020 Debenture [Member] | Principal [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Conversion of Stock, Amount Converted | $ 150,000 | $ 100,000 | |||||||||||
Second 2020 Debenture [Member] | Accrued Interest [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Conversion of Stock, Amount Converted | $ 1,578 | $ 3,858 | $ 855 | 10,411 | |||||||||
Third 2020 Debenture [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Conversion price | $ 0.0213 | $ 0.0185 | |||||||||||
Number of shares issued | 14,436,426 | 10,887,819 | |||||||||||
Third 2020 Debenture [Member] | Principal [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Conversion of Stock, Amount Converted | $ 300,000 | $ 200,000 | |||||||||||
Third 2020 Debenture [Member] | Accrued Interest [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Conversion of Stock, Amount Converted | $ 7,496 | $ 1,425 | |||||||||||
Securities Purchase Agreement [Member] | First 2020 Debenture [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Debt instrument face amount | 250,000 | ||||||||||||
Origination fees | 15,000 | ||||||||||||
Original issue discount | 10,000 | ||||||||||||
Structuring fee | 5,000 | ||||||||||||
Number of shares issued | 8,255,438 | 7,094,732 | |||||||||||
Securities Purchase Agreement [Member] | First 2020 Debenture [Member] | Principal [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Conversion of Stock, Amount Converted | 150,000 | $ 100,000 | |||||||||||
Securities Purchase Agreement [Member] | First 2020 Debenture [Member] | Accrued Interest [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Conversion of Stock, Amount Converted | $ 1,118 | $ 12,274 | |||||||||||
Securities Purchase Agreement [Member] | First 20212 Debenture [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Debt instrument face amount | 1,500,000 | ||||||||||||
Origination fees | 70,000 | ||||||||||||
Original issue discount | 60,000 | ||||||||||||
Securities Purchase Agreement 2 [Member] | Second 2020 Debenture [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Debt instrument face amount | 250,000 | ||||||||||||
Origination fees | 10,000 | ||||||||||||
Original issue discount | 10,000 | ||||||||||||
Number of shares issued | 7,252,634 | 5,183,613 | |||||||||||
Securities Purchase Agreement 2 [Member] | Second 2020 Debenture [Member] | Principal [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Conversion of Stock, Amount Converted | $ 150,000 | $ 100,000 | |||||||||||
Securities Purchase Agreement 2 [Member] | Second 2020 Debenture [Member] | Accrued Interest [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Conversion of Stock, Amount Converted | $ 855 | 10,410 | |||||||||||
Securities Purchase Agreement 2 [Member] | Third 2020 Debenture [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Number of shares issued | 10,887,819 | ||||||||||||
Securities Purchase Agreement 2 [Member] | Third 2020 Debenture [Member] | Principal [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Conversion of Stock, Amount Converted | $ 200,000 | ||||||||||||
Securities Purchase Agreement 2 [Member] | Third 2020 Debenture [Member] | Accrued Interest [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Conversion of Stock, Amount Converted | $ 1,425 | ||||||||||||
Securities Purchase Agreement 3 [Member] | First 2020 Debenture [Member] | Accrued Interest [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Conversion of Stock, Amount Converted | $ 7,496 | ||||||||||||
Securities Purchase Agreement 3 [Member] | Second 2020 Debenture [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Number of shares issued | 14,436,426 | ||||||||||||
Securities Purchase Agreement 3 [Member] | Third 2020 Debenture [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Debt instrument face amount | 500,000 | ||||||||||||
Origination fees | 10,000 | ||||||||||||
Original issue discount | $ 10,000 | ||||||||||||
Securities Purchase Agreement 2021 [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Conversion of Stock, Amount Converted | $ 154,958,678 | ||||||||||||
Exercisable shares | 50,000,000 |
PAYCHECK PROTECTION PROGRAM L_2
PAYCHECK PROTECTION PROGRAM LOAN (Details Narrative) - USD ($) | 1 Months Ended | ||
Jan. 21, 2021 | May 31, 2020 | May 05, 2021 | |
Debt Instrument [Line Items] | |||
Principal amount | $ 200,000 | ||
Paycheck Protection Promissory Note [Member] | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 117,487 | ||
Interest rate | 1.00% | ||
U S Small Business Administration [Member] | |||
Debt Instrument [Line Items] | |||
Proceeds from loan | $ 7,000 |
EQUITY TRANSACTIONS (Details Na
EQUITY TRANSACTIONS (Details Narrative) - USD ($) | Oct. 14, 2021 | Oct. 04, 2021 | Jun. 09, 2021 | May 05, 2021 | Jan. 12, 2021 | Oct. 25, 2021 | Jul. 23, 2021 | Feb. 19, 2021 | Jan. 25, 2021 | Dec. 23, 2020 | Jul. 30, 2020 | Jan. 25, 2020 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jul. 08, 2020 | May 31, 2020 | Apr. 14, 2017 |
Class of Stock [Line Items] | |||||||||||||||||||
Preferred Stock, par value | $ 0.00001 | ||||||||||||||||||
Preferred stock, shares outstanding | 988,140 | ||||||||||||||||||
Common stock, shares authorized | 2,500,000,000 | 2,500,000,000 | |||||||||||||||||
Common Stock, shares issued | 883,068,249 | 786,308,041 | |||||||||||||||||
Common Stock, shares outstanding | 883,068,249 | 786,308,041 | 146,803,392 | ||||||||||||||||
Conversion price | $ 0.03 | $ 0.05 | |||||||||||||||||
Common stock shares issued | 20,000,000 | ||||||||||||||||||
William J Stineman [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Fair market value of share | $ 0.018 | ||||||||||||||||||
Stock issued | 1,980,000 | 3,000,000 | |||||||||||||||||
William F Stineman [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Stock issued | 360,000 | ||||||||||||||||||
Gary Kramer [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Stock issued | 270,000 | ||||||||||||||||||
Steven Sirus [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Stock issued | 90,000 | ||||||||||||||||||
First 2020 Debenture [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares converted | 7,094,732 | ||||||||||||||||||
Conversion price | $ 0.0213 | ||||||||||||||||||
First 2020 Debenture [Member] | Principal [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Conversion of Stock, Amount Converted | $ 150,000 | ||||||||||||||||||
Third 2020 Debenture [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares converted | 14,436,426 | 10,887,819 | |||||||||||||||||
Conversion price | $ 0.0213 | $ 0.0185 | |||||||||||||||||
Third 2020 Debenture [Member] | Principal [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Conversion of Stock, Amount Converted | $ 300,000 | $ 200,000 | |||||||||||||||||
Third 2020 Debenture [Member] | Accrued Interest [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Conversion of Stock, Amount Converted | $ 7,496 | $ 1,425 | |||||||||||||||||
Second 2020 Debenture [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares converted | 7,252,634 | 5,183,613 | |||||||||||||||||
Conversion price | $ 0.030 | $ 0.0160 | $ 0.0208 | $ 0.0213 | |||||||||||||||
Second 2020 Debenture [Member] | Principal [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Conversion of Stock, Amount Converted | $ 150,000 | $ 100,000 | |||||||||||||||||
Second 2020 Debenture [Member] | Accrued Interest [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Conversion of Stock, Amount Converted | $ 1,578 | $ 3,858 | $ 855 | 10,411 | |||||||||||||||
Second 2021 Debenture [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares converted | 17,688,056 | 16,127,104 | 16,124,161 | ||||||||||||||||
Conversion of Stock, Amount Converted | $ 200,000 | $ 150,000 | $ 150,000 | ||||||||||||||||
Conversion price | $ 0.0114 | $ 0.0122 | $ 0.0094 | ||||||||||||||||
Common stock shares issued | 6,719,269 | 9,616,095 | |||||||||||||||||
Second 2021 Debenture [Member] | Principal [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Conversion of Stock, Amount Converted | $ 200,000 | $ 150,000 | |||||||||||||||||
Securities Purchase Agreement [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Fair market value of share | $ 0.0170 | ||||||||||||||||||
Securities Purchase Agreement [Member] | First 2020 Debenture [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares converted | 8,255,438 | 7,094,732 | |||||||||||||||||
Securities Purchase Agreement [Member] | First 2020 Debenture [Member] | Principal [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Debt conversion, converted instrument, amount | $ 100,000 | ||||||||||||||||||
Conversion of Stock, Amount Converted | 150,000 | 100,000 | |||||||||||||||||
Securities Purchase Agreement [Member] | First 2020 Debenture [Member] | Accrued Interest [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Debt conversion, converted instrument, amount | 12,274 | ||||||||||||||||||
Conversion of Stock, Amount Converted | $ 1,118 | $ 12,274 | |||||||||||||||||
Series B Preferred Stock [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Preferred Stock, par value | $ 0.00001 | $ 0.00001 | |||||||||||||||||
Preferred stock, shares outstanding | 488,000 | 488,000 | |||||||||||||||||
Preferred stock, shares authorized | 1,200,000 | 1,200,000 | |||||||||||||||||
Preferred stock, shares issued | 488,000 | 488,000 | |||||||||||||||||
Series C Preferred Stock [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Preferred Stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||||||||||||
Preferred stock, shares outstanding | 0 | 140 | 140 | ||||||||||||||||
Preferred stock, shares authorized | 250 | 250 | 250 | ||||||||||||||||
Preferred stock, shares issued | 0 | 140 | 140 | ||||||||||||||||
Number of shares converted | 1,000 | ||||||||||||||||||
Series D Preferred Stock [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Preferred Stock, par value | $ 0.00001 | $ 0.00001 | |||||||||||||||||
Preferred stock, shares outstanding | 500,000 | 500,000 | |||||||||||||||||
Preferred stock, shares authorized | 500,000 | 500,000 | |||||||||||||||||
Preferred stock, shares issued | 500,000 | 500,000 |
EMPLOYEES (Details Narrative)
EMPLOYEES (Details Narrative) - USD ($) | Apr. 03, 2020 | Dec. 02, 2016 | Mar. 02, 2016 | Jan. 25, 2021 | Jul. 30, 2020 | Jan. 27, 2020 | Jul. 31, 2019 | May 16, 2016 | Apr. 19, 2016 | Oct. 28, 2015 | Sep. 30, 2021 | Dec. 31, 2020 | Apr. 14, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Common stock, shares issued | 883,068,249 | 786,308,041 | ||||||||||||
Common stock shares outstanding | 883,068,249 | 786,308,041 | 146,803,392 | |||||||||||
Employment Agreement [Member] | ||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Stock issued | 30,000,000 | |||||||||||||
Fair market value of share | $ 0.015 | |||||||||||||
Clark Employment Agreement [Member] | ||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Stock issued | 40,000,000 | 50,000,000 | ||||||||||||
Fair market value of share | $ 0.0250 | $ 0.0036 | $ 0.0025 | |||||||||||
Accrued unissued shares | 80,000,000 | |||||||||||||
Number of common stock cancelled | 50,000,000 | 40,000,000 | ||||||||||||
Number of common stock cancelled, value | $ 180,000 | $ 1,000,000 | ||||||||||||
Robert Clark [Member] | ||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Common stock, shares issued | 200,000,000 | |||||||||||||
Defer receipt, shares | 80,000,000 | |||||||||||||
Shares reserve for issuance | 120,000,000 | 17,100,000 | ||||||||||||
Common stock shares outstanding | 170,000,000 | |||||||||||||
Lori Radcliffe [Member] | ||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Stock issued | 5,000,000 | |||||||||||||
Fair market value of share | $ 0.0637 | |||||||||||||
Value of stock issued | $ 318,500 | |||||||||||||
Paul O Renick [Member] | ||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Stock issued | 5,000,000 | |||||||||||||
Fair market value of share | $ 0.0315 | |||||||||||||
Value of stock issued | $ 157,500 | |||||||||||||
William J Stineman [Member] | ||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Stock issued | 1,980,000 | 3,000,000 | ||||||||||||
Fair market value of share | $ 0.018 | |||||||||||||
Value of stock issued | $ 54,000 | |||||||||||||
John Torrence [Member] | ||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Stock issued | 100,000 | |||||||||||||
Fair market value of share | $ 0.018 | |||||||||||||
Value of stock issued | $ 1,800 |
SPONSORSHIPS (Details Narrative
SPONSORSHIPS (Details Narrative) - Ryan Dodd [Member] - USD ($) | Apr. 03, 2020 | May 23, 2019 |
Defined Benefit Plan Disclosure [Line Items] | ||
Sponsorship fees | $ 1,250 | |
Number of restricted common stock issued | 85,000 | 262,500 |
Fair market value of share | $ 0.0315 | $ 0.131 |
Payment for sponsorship | $ 2,578 | $ 34,388 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Product Liability Contingency [Line Items] | |||
Base rent | $ 4,114 | ||
Operating lease expense | $ 36,643 | $ 13,944 | |
FLORIDA | |||
Product Liability Contingency [Line Items] | |||
Base rent | $ 3,994 |
LEASE LIABILITIES (Details)
LEASE LIABILITIES (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Lease Liabilities | ||
Right-of-use asset | $ 1,503,115 | $ 1,072,094 |
Amortization of right-of-use asset | (284,012) | (159,101) |
Right-of-use asset, net | 1,219,103 | 912,993 |
Operating lease liability | ||
Current portion of long-term lease | 41,806 | 149,407 |
Long-term lease | 1,177,297 | 763,586 |
Total operating lease liability | $ 1,219,103 | $ 912,993 |
LEASE LIABILITIES (Details 1)
LEASE LIABILITIES (Details 1) | Sep. 30, 2021USD ($) |
Lease Liabilities | |
December 31, 2021 (3 months remaining) | $ 41,806 |
December 31, 2022 | 230,954 |
December 31, 2023 | 242,966 |
December 31, 2024 | 251,127 |
December 31, 2025 | 254,282 |
2026 and thereafter | 197,968 |
Operating Leases, Future Minimum Payments Due | $ 1,219,103 |
LEASE LIABILITIES (Details Narr
LEASE LIABILITIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Aug. 30, 2021 | Mar. 17, 2020 | May 22, 2019 | Sep. 30, 2021 | Sep. 30, 2021 | |
Offsetting Assets [Line Items] | |||||
Operating lease expenses | $ 36,643 | $ 13,944 | |||
Lease Agreement [Member] | |||||
Offsetting Assets [Line Items] | |||||
Operating lease expenses | $ 13,100 | ||||
Deposits | $ 6,500 | ||||
Right-of-use operating lease expense | 40,287 | 107,432 | |||
Lease Agreement 1 [Member] | |||||
Offsetting Assets [Line Items] | |||||
Operating lease expenses | $ 676 | ||||
Right-of-use operating lease expense | 1,880 | 5,605 | |||
Lease Agreement 2 [Member] | Gold Leaf L L C [Member] | |||||
Offsetting Assets [Line Items] | |||||
Operating lease expenses | $ 7,261 | ||||
Deposits | $ 6,500 | ||||
Right-of-use operating lease expense | $ 0 | $ 0 |
REVENUE (Details)
REVENUE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net Revenues | $ 545,375 | $ 312,709 | $ 1,798,999 | $ 741,812 |
Change in revenue, percentage | 74.00% | 143.00% | ||
Distributors [Member] | ||||
Net Revenues | $ 150,929 | 140,003 | $ 784,023 | 367,912 |
Change in revenue, percentage | 8.00% | 113.00% | ||
Amazon [Member] | ||||
Net Revenues | $ 41,669 | 46,078 | $ 119,428 | 121,317 |
Change in revenue, percentage | 10.00% | 2.00% | ||
Online Sales [Member] | ||||
Net Revenues | $ 17,678 | 15,663 | $ 57,725 | 35,176 |
Change in revenue, percentage | 13.00% | 64.00% | ||
Gold Leaf Distribution [Member] | ||||
Net Revenues | $ 347,247 | 108,719 | $ 883,825 | 228,881 |
Change in revenue, percentage | 219.00% | 286.00% | ||
Shipping [Member] | ||||
Net Revenues | $ 4,451 | 8,846 | $ 15,039 | 19,181 |
Change in revenue, percentage | 50.00% | 22.00% | ||
Sales Returns And Allowance [Member] | ||||
Net Revenues | $ (16,599) | $ (6,600) | $ (61,041) | $ (30,655) |
Change in revenue, percentage | 152.00% | 99.00% |
REVENUE (Details 1)
REVENUE (Details 1) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Distributors [Member] | ||||
Revenue, percentage | 28.00% | 45.00% | 44.00% | 50.00% |
Amazon [Member] | ||||
Revenue, percentage | 8.00% | 15.00% | 7.00% | 16.00% |
Online Sales [Member] | ||||
Revenue, percentage | 3.00% | 5.00% | 3.00% | 5.00% |
Gold Leaf Distribution [Member] | ||||
Revenue, percentage | 64.00% | 35.00% | 49.00% | 3100.00% |
Shipping [Member] | ||||
Revenue, percentage | 1.00% | 3.00% | 1.00% | 3.00% |
Sales Returns And Allowance [Member] | ||||
Revenue, percentage | 3.00% | 2.00% | 3.00% | 4.00% |
SEGMENTS (Details)
SEGMENTS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||||
Current assets | $ 1,560,449 | $ 1,560,449 | $ 783,612 | ||
Non-Current assets | 2,683,564 | 2,683,564 | 1,156,853 | ||
Current liabilities | 5,841,010 | 5,841,010 | 3,376,248 | ||
Non-Current liabilities | 3,648,092 | 3,648,092 | 2,808,368 | ||
Revenues, net of sales, returns, and allowances: | 545,375 | $ 312,709 | 1,798,999 | $ 741,812 | |
Cost of Revenues | 442,766 | 222,111 | 1,443,727 | 523,774 | |
Operating Expenses | 756,110 | 500,233 | 1,968,841 | 1,840,004 | |
Other Income / (Expense) | 1,577,214 | (99,806) | (2,809,830) | (549,326) | |
Net Income (Loss) | (2,230,715) | (509,441) | (4,423,399) | (2,171,292) | (3,125,595) |
Beverages Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Current assets | 1,386,003 | 1,386,003 | 824,835 | ||
Non-Current assets | 2,216,976 | 2,216,976 | 1,063,074 | ||
Current liabilities | 1,899,473 | 1,899,473 | 1,879,305 | ||
Non-Current liabilities | 2,993,658 | 2,993,658 | 2,616,018 | ||
Revenues, net of sales, returns, and allowances: | 207,763 | 245,918 | 1,018,041 | 613,016 | |
Cost of Revenues | 201,413 | 160,289 | 864,872 | 417,159 | |
Operating Expenses | 514,995 | 339,688 | 1,308,456 | 1,380,612 | |
Other Income / (Expense) | (34,964) | (19,455) | 11,964 | (35,887) | |
Net Income (Loss) | (543,609) | (273,514) | (1,167,251) | (1,220,642) | |
Distribution Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Current assets | (253,117) | (253,117) | (146,894) | ||
Non-Current assets | 638,620 | 638,620 | 85,546 | ||
Current liabilities | 144,926 | 144,926 | 72,576 | ||
Non-Current liabilities | 654,434 | 654,434 | 192,350 | ||
Revenues, net of sales, returns, and allowances: | 374,247 | 108,719 | 883,825 | 228,881 | |
Cost of Revenues | 258,151 | 83,912 | 622,210 | 173,638 | |
Operating Expenses | 152,578 | 70,385 | 353,239 | 198,547 | |
Other Income / (Expense) | (1,708) | (1,173) | 4,041 | 3,932 | |
Net Income (Loss) | (38,190) | (46,751) | (87,583) | (139,372) | |
Corporate Snd Eliminations [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Current assets | 427,563 | 427,563 | 105,671 | ||
Non-Current assets | 7,968 | 7,968 | 8,233 | ||
Current liabilities | 3,796,611 | 3,796,611 | 1,424,367 | ||
Non-Current liabilities | |||||
Revenues, net of sales, returns, and allowances: | (36,635) | (41,928) | (102,867) | (100,085) | |
Cost of Revenues | (16,798) | (22,090) | (43,355) | (67,023) | |
Operating Expenses | 88,537 | 90,160 | 307,146 | 260,845 | |
Other Income / (Expense) | (1,540,542) | (79,178) | (2,825,835) | (517,371) | |
Net Income (Loss) | $ (1,648,916) | $ (189,176) | $ (3,168,565) | $ (811,278) |
ACQUISITION OF S AND S BEVERA_3
ACQUISITION OF S AND S BEVERAGE, INC. (Details) - USD ($) | Sep. 30, 2021 | Jan. 21, 2021 | Dec. 31, 2020 |
Defined Benefit Plan Disclosure [Line Items] | |||
Inventory | $ 866,613 | $ 660,504 | |
Property, plant and equipment, net (Website Development) | 281,029 | 167,872 | |
Total Assets | 4,424,013 | 1,950,973 | |
Interest payable | 42,683 | 32,102 | |
Current note payable - related party | 1,500 | 12,000 | |
Common Stock, $30.05 par value, 10,000 shares issued and outstanding, respectively | 8,831 | 7,863 | |
Additional paid-in-capital | 6,601,818 | 4,746,447 | |
Accumulated deficit | (13,703,438) | (9,280,036) | |
Total liabilities and stockholders’ deficit | 4,424,013 | $ 1,950,973 | |
Accounts receivable | 33,717 | ||
Website Development (Ooh La Lemin) | 12,201 | ||
Goodwill | 1,275,938 | ||
Total Assets | 1,321,856 | ||
Accounts payable and accrued liabilities | 956 | ||
Loan on Acquisition | 650,000 | ||
Due to merger payments | 400,000 | ||
Common stock, $.00001 par value, 9,000,000 shares issued | 90 | ||
Additional paid-in capital | 270,810 | ||
Total liabilities and stockholders’ deficit | $ 1,321,856 | ||
Fair Value, Inputs, Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accounts receivable, net of allowance of $24,280 | $ 9,437 | ||
Inventory | 240,797 | ||
Property, plant and equipment, net (Website Development) | 12,201 | ||
Total Assets | 262,435 | ||
Accounts payable and accrued liabilities | 55,553 | ||
Outstanding checks | 23,058 | ||
Interest payable | 11,915 | ||
Due to customers | 19,667 | ||
Current note payable - related party | 811,761 | ||
Common Stock, $30.05 par value, 10,000 shares issued and outstanding, respectively | 300,500 | ||
Additional paid-in-capital | 437,701 | ||
Accumulated deficit | (1,397,720) | ||
Total liabilities and stockholders’ deficit | 262,435 | ||
Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accounts receivable, net of allowance of $24,280 | 33,717 | ||
Inventory | 249,648 | ||
Property, plant and equipment, net (Website Development) | 12,201 | ||
Total Assets | 295,566 | ||
Accounts payable and accrued liabilities | 956 | ||
Outstanding checks | |||
Interest payable | |||
Due to customers | |||
Current note payable - related party | $ 1,050,000 |
ACQUISITION OF S AND S BEVERA_4
ACQUISITION OF S AND S BEVERAGE, INC. (Details Narrative) - USD ($) | Mar. 10, 2021 | Sep. 30, 2021 |
Business Combination and Asset Acquisition [Abstract] | ||
Acquisition Costs, Period Cost | $ 400,000 | $ 89,000 |
Business Acquisition, Share Price | $ 2 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||
Net Loss | $ 2,230,715 | $ 509,441 | $ 4,423,399 | $ 2,171,292 | $ 3,125,595 | |||||
Net cash provided by (used in) operating activities | 1,586,677 | 878,601 | 1,370,123 | |||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 5,065,086 | $ 3,282,836 | $ 5,065,086 | $ 3,282,836 | $ 4,244,153 | $ 3,990,381 | $ 4,126,375 | $ 2,773,397 | $ 2,148,120 | $ 1,990,976 |
CONCENTRATIONS (Details)
CONCENTRATIONS (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Risks and Uncertainties [Abstract] | ||
Total Accounts Receivable | $ 139,235 | $ 22,166 |
Less: Sales Returns and Allowances | 61,041 | 28,707 |
Less: Doubtful Accounts | 7,709 | 3,967 |
Less: Intercompany Transactions | 6,738 | |
Accounts Receivable, net | $ 63,715 | $ (10,508) |
CONCENTRATIONS (Details Narrati
CONCENTRATIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Concentration Risk [Line Items] | |||||
Net accounts receivable | $ 63,715 | $ 63,715 | |||
Total Accounts Receivable | 139,203 | 139,203 | $ 22,166 | ||
Less: Sales Returns and Allowances | 61,041 | ||||
Less: Doubtful Accounts | 7,709 | 7,709 | 3,967 | ||
Intercompany transactions | 6,738 | 6,738 | |||
Accounts receivable | (63,715) | (63,715) | 10,508 | ||
Less: Sales Returns and Allowances | 16,600 | $ 6,600 | 61,000 | $ 30,700 | 28,707 |
Accounts receivable | $ 63,715 | 63,715 | (10,508) | ||
Concentrations, description | the three months ended September 30, 2021, one customer represented 12% of the Company’s total net revenue of $545,375 for the three months ended September 30, 2021. In the accompanying Consolidated Statements of Loss for the three months ended September 30, 2020, no one customer represented 10% of the Company’s total net revenue of $312,709 for the three months ended September 30, 2020. In the accompanying Consolidated Statements of Loss for the nine months ended September 30, 2021, one customer represented 13% of the Company’s total net revenue of $1,798,999 for the nine months ended September 30, 2021. In the accompanying Consolidated Statements of Loss for the nine months ended September 30, 2020, no one customer represented 10% or more of the Company’s total net revenue of $741,812 for the nine months ended September 30, 2020 | ||||
Vendors amount | 45,242 | ||||
Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Accounts receivable | $ (97,832) | $ (97,832) | $ (22,166) | ||
Concentration Risk, Percentage | 70.00% | 76.00% | |||
Accounts receivable | $ 97,832 | $ 97,832 | $ 22,166 | ||
Accounts Receivable [Member] | First Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration Risk, Percentage | 25.00% | 26.00% | |||
Accounts Receivable [Member] | Second Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration Risk, Percentage | 20.00% | 22.00% | |||
Accounts Receivable [Member] | Third Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration Risk, Percentage | 13.00% | 14.00% | |||
Accounts Receivable [Member] | Fourth Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration Risk, Percentage | 12.00% | 14.00% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Nov. 10, 2021 | Oct. 14, 2021 | Oct. 04, 2021 | Jun. 09, 2021 | Oct. 25, 2021 | Nov. 02, 2021 | Sep. 30, 2021 | May 05, 2021 | May 31, 2020 |
Subsequent Event [Line Items] | |||||||||
Debt Instrument, Convertible, Conversion Price | $ 0.03 | $ 0.05 | |||||||
Debt instrument face amount | $ 200,000 | ||||||||
Second 2021 Debenture [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares issued | 17,688,056 | 16,127,104 | 16,124,161 | ||||||
Conversion of Stock, Amount Converted | $ 200,000 | $ 150,000 | $ 150,000 | ||||||
Accrued interest | $ 48,751 | $ 1,643 | $ 1,567 | ||||||
Conversion Price1 | $ 0.0143 | $ 0.0152 | $ 0.0118 | ||||||
Debt Instrument, Convertible, Conversion Price | $ 0.0114 | $ 0.0122 | 0.0094 | ||||||
Second 2021 Debenture [Member] | Subsequent Event [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares issued | 27,228,433 | ||||||||
Conversion of Stock, Amount Converted | $ 200,000 | ||||||||
Accrued interest | $ 1,490 | ||||||||
Conversion Price1 | $ 0.0093 | ||||||||
Debt Instrument, Convertible, Conversion Price | $ 0.0074 | ||||||||
Second 20212 Debenture [Member] | Subsequent Event [Member] | Securities Purchase Agreement 20212 [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Debt instrument face amount | $ 1,500,000 | ||||||||
Origination fees | 60,000 | ||||||||
Original issue discount | $ 60,000 |