Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 09, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | TOMI Environmental Solutions, Inc. | |
Entity Central Index Key | 0000314227 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 124,700,418 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and Cash Equivalents | $ 1,195,938 | $ 2,004,938 |
Accounts Receivable - net | 2,027,700 | 2,145,622 |
Inventories (Note 3) | 2,393,188 | 2,682,014 |
Deposits | 188,716 | 109,441 |
Prepaid Expenses | 259,140 | 301,797 |
Total Current Assets | 6,064,682 | 7,243,812 |
Property and Equipment - net (Note 4) | 1,528,907 | 1,588,591 |
Other Assets: | ||
Intangible Assets - net (Note 5) | 1,143,439 | 1,235,816 |
Operating Lease - Right of Use Asset (Note - 6) | 703,823 | 0 |
Capitalized Software Development Costs (Note 7) | 125,704 | 0 |
Other Assets | 76,309 | 11,395 |
Total Other Assets | 2,049,275 | 1,247,211 |
Total Assets | 9,642,863 | 10,079,614 |
Current Liabilities: | ||
Accounts Payable | 657,798 | 1,133,649 |
Accrued Expenses and Other Current Liabilities (Note 10) | 580,426 | 415,199 |
Accrued Officers Compensation | 29,792 | 70,000 |
Accrued Interest (Note 8) | 16,667 | 66,667 |
Customer Deposits | 0 | 1,486 |
Current Portion of Long-Term Operating Lease | 23,436 | 0 |
Deferred Rent | 0 | 13,215 |
Total Current Liabilities | 1,308,119 | 1,700,216 |
Long-Term Operating Lease, Net of Current Portion (Note 6) | 1,089,316 | 0 |
Deferred Rent and Tenant Improvement Allowances | 0 | 401,734 |
Convertible Notes Payable, net of discount of $0 and $17,534 at March 31, 2019 and December 31, 2018, respectively (Note 8) | 5,000,000 | 4,982,466 |
Total Long-term Liabilities | 6,089,316 | 5,384,200 |
Total Liabilities | 7,397,435 | 7,084,416 |
Commitments and Contingencies | 0 | 0 |
Stockholders' Equity: | ||
Cumulative Convertible Series A Preferred Stock; par value $0.01 per share share, 1,000,000 shares authorized; 510,000 shares issued and outstanding at March 31, 2019 and December 31, 2018 | 5,100 | 5,100 |
Cumulative Convertible Series B Preferred Stock; $1,000 stated value; 7.5% Cumulative dividend; 4,000 shares authorized; none issued and outstanding at March 31, 2019 and December 31, 2018 | 0 | 0 |
Common stock; par value $0.01 per share, 200,000,000 shares authorized; 124,690,418 and 124,290,418 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively. | 1,246,904 | 1,242,904 |
Additional Paid-in Capital | 43,129,467 | 42,948,705 |
Accumulated Deficit | (42,136,043) | (41,201,511) |
Total Shareholders' Equity | 2,245,428 | 2,995,198 |
Total Liabilities and Shareholders' Equity | $ 9,642,863 | $ 10,079,614 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) (Parenthetical) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Condensed Consolidated Balance Sheet Parenthetical | ||
Convertible Notes Payable, noncurrent, net of discount | $ 0 | $ 17,534 |
Stockholders' Equity ( Deficiency): | ||
Cumulative Convertible Preferred Stock Series A; Par Value | $ 0.01 | $ 0.01 |
Cumulative Convertible Preferred Stock Series A; Shares Authorized | 1,000,000 | 1,000,000 |
Cumulative Convertible Preferred Stock Series A; Issued Shares | 510,000 | 510,000 |
Cumulative Convertible Preferred Stock Series A; Stock Outstanding | 510,000 | 510,000 |
Cumulative Convertible Preferred Stock Series B; Stated value | $ 1,000 | $ 1,000 |
Cumulative Convertible Preferred Stock Series B; Cumulative dividend | 7.50% | 7.50% |
Cumulative Convertible Preferred Stock Series B; Shares Authorized | 4,000 | 4,000 |
Cumulative Convertible Preferred Stock Series B; Issued Shares | 0 | 0 |
Cumulative Convertible Preferred Stock Series B; Stock Outstanding | 0 | 0 |
Common Stock; Par Value | $ 0.01 | $ 0.01 |
Common Stock; Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock; Stock Issued | 124,690,418 | 124,290,418 |
Common Stock; Stock Outstanding | 124,690,418 | 124,290,418 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Consolidated Statement Of Operations | ||
Sales, net | $ 1,252,658 | $ 1,312,466 |
Cost of Sales | 493,310 | 491,659 |
Gross Profit | 759,348 | 820,807 |
Operating Expenses: | ||
Professional Fees | 105,481 | 106,458 |
Depreciation and Amortization | 176,845 | 162,738 |
Selling Expenses | 441,670 | 204,005 |
Research and Development | 92,577 | 132,487 |
Equity Compensation Expense (Note 9) | 80,917 | 12,685 |
Consulting fees | 35,006 | 35,026 |
General and Administrative | 694,880 | 663,887 |
Total Operating Expenses | 1,627,376 | 1,317,287 |
Loss from Operations | (868,028) | (496,480) |
Other Income (Expense): | ||
Amortization of Debt Discounts | (17,534) | (8,037) |
Interest Income | 1,030 | 1,198 |
Interest Expense | (50,000) | (60,000) |
Total Other Income (Expense) | (66,504) | (66,839) |
Net Loss | $ (934,532) | $ (563,319) |
Loss Per Share of Common Stock | ||
Basic and Diluted | $ (0.01) | $ 0 |
Basic and Diluted Weighted Average Common Shares Outstanding | 124,659,307 | 122,229,959 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) - 3 months ended Mar. 31, 2019 - USD ($) | Series A Preferred | Common Stock | Additional Paid in Capital | Accumulated Deficit | Total |
Beginning Balance, Shares at Dec. 31, 2018 | 510,000 | 124,290,418 | |||
Beginning Balance, Amount at Dec. 31, 2018 | $ 5,100 | $ 1,242,904 | $ 42,948,705 | $ (41,201,511) | $ 2,995,198 |
Equity Compensation | 140,762 | $ 140,762 | |||
Common stock issued for services provided, Shares | 400,000 | 400,000 | |||
Common stock issued for services provided, Amount | $ 4,000 | 40,000 | $ 44,000 | ||
Net Loss | (934,532) | (934,532) | |||
Ending Balance, Shares at Mar. 31, 2019 | 510,000 | 124,690,418 | |||
Ending Balance, Amount at Mar. 31, 2019 | $ 5,100 | $ 1,246,904 | $ 43,129,467 | $ (42,136,043) | $ 2,245,428 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash Flow From Operating Activities: | ||
Net Loss | $ (934,532) | $ (563,319) |
Adjustments to Reconcile Net loss to Net Cash Used In Operating Activities: | ||
Depreciation and Amortization | 176,845 | 162,738 |
Lease Expense | 39,644 | 0 |
Amortization of Debt Discount | 17,534 | 8,037 |
Equity Compensation Expense | 80,917 | 13,590 |
Value of Equity Issued for Services | 44,000 | 30,000 |
Bad Debt Expense | (105,000) | 0 |
Decrease (Increase) in: | ||
Accounts Receivable | 222,922 | (394,453) |
Inventory | 288,827 | 245,271 |
Prepaid Expenses | 6,792 | (6,266) |
Deposits | (79,275) | (15,714) |
Other Assets | (64,914) | 0 |
Increase (Decrease) in: | ||
Accounts Payable | (475,851) | (116,927) |
Accrued Expenses | 225,072 | 20,725 |
Accrued Interest | (50,000) | (64,000) |
Accrued Officer Compensation | (40,208) | 0 |
Deferred Rent | 0 | (781) |
Customer Deposits | (1,486) | (1,484) |
Net Cash Used in Operating Activities | (648,714) | (682,583) |
Cash Flow From Investing Activities: | ||
Capitalized Software Costs | (125,704) | 0 |
Purchase of Property and Equipment | (34,582) | 0 |
Net Cash Used in Investing Activities | (160,286) | 0 |
Cash Flow From Financing Activities: | ||
Net Cash Provided by Financing Activities | 0 | 0 |
(Decrease) In Cash and Cash Equivalents | (809,000) | (682,583) |
Cash and Cash Equivalents - Beginning | 2,004,938 | 4,550,003 |
Cash and Cash Equivalents - Ending | 1,195,938 | 3,867,420 |
Supplemental Cash Flow Information: | ||
Cash Paid For Interest | 100,000 | 124,000 |
Cash Paid For Income Taxes | 800 | 800 |
Non-Cash Investing and Financing Activities : | ||
Right of Use Asset Arising from Adoption of ASC 842 | 714,421 | 0 |
Issuance of Warrants and Options as Consideration for Accrued Expenses | $ 59,845 | $ 0 |
1. DESCRIPTION OF BUSINESS
1. DESCRIPTION OF BUSINESS | 3 Months Ended |
Mar. 31, 2019 | |
Business Combination, Description [Abstract] | |
NOTE 1. DESCRIPTION OF BUSINESS | TOMI Environmental Solutions, Inc., a Florida corporation (“TOMI”, the “Company”, “we”, “our” and “us”) is a global provider of disinfection and decontamination essentials through its premier Binary Ionization Technology® (BIT™) platform, under which it manufactures, licenses, services and sells its SteraMist™ brand of products, including SteraMist™ BIT™, a hydrogen peroxide-based mist and fog. Invented under a defense grant in association with the Defense Advanced Research Projects Agency (DARPA) of the U.S. Department of Defense, BIT™ is registered with the U.S. Environmental Protection Agency (“EPA”) and uses a low percentage hydrogen peroxide as its only active ingredient to produce a fog composed mostly of a hydroxyl radical ( . TOMI’s products are designed to service a broad spectrum of commercial structures, including, but not limited to, hospitals and medical facilities, bio-safety labs, pharmaceutical facilities, meat and produce processing facilities, universities and research facilities, vivarium labs, all service industries including cruise ships, office buildings, hotel and motel rooms, schools, restaurants, military barracks, police and fire departments, and athletic facilities. TOMI products are also used in single-family homes and multi-unit residences. TOMI’s mission is to help its customers create a healthier world through its product line in its divisions (Healthcare, Life Sciences, TOMI Service Network and Food Safety). |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation The interim unaudited condensed consolidated financial statements included herein, presented in accordance with generally accepted accounting principles utilized in the United States of America (“GAAP”), and stated in U.S. dollars, have been prepared by the Company, without an audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2018 and notes thereto which are included in the Annual Report on Form 10-K previously filed with the SEC on April 1, 2019. The Company follows the same accounting policies in the preparation of interim reports. The results of operations for the interim periods covered by this Form 10-Q may not necessarily be indicative of results of operations for the full fiscal year or any other interim period. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of TOMI and its wholly-owned subsidiary, TOMI Environmental Solutions, Inc., a Nevada corporation. All significant intercompany accounts and transactions have been eliminated in consolidation. Reclassification of Accounts Certain reclassifications have been made to prior-year comparative financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or financial position. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the accompanying condensed consolidated financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable, inventory, fair values of financial instruments, intangible assets, useful lives of intangible assets and property and equipment, fair values of stock-based awards, income taxes, and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of our assets and liabilities. Fair Value Measurements The authoritative guidance for fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The guidance describes a fair value hierarchy based on the levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following: 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 for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or corroborated by observable market data or substantially the full term of the assets or liabilities. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the value of the assets or liabilities. Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and convertible debt. All these items were determined to be Level 1 fair value measurements. The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses approximated fair value because of the short maturity of these instruments. The recorded value of convertible debt approximates its fair value as the terms and rates approximate market rates (See Note 8). Cash and Cash Equivalents For purposes of the statement of cash flows, cash and cash equivalents includes cash on hand held at financial institutions and other liquid investments with original maturities of three months or less. At times, these deposits may be in excess of insured limits. Accounts Receivable Our accounts receivable are credit worthy customers or, for certain international customers, are supported by pre-payments. For those customers to whom we extend credit, we perform periodic evaluations of them and maintain allowances for potential credit losses as deemed necessary. We have a policy of reserving for doubtful accounts based on our best estimate of the amount of potential credit losses in existing accounts receivable. We periodically review our accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Bad debt expense for the three months ended March 31, 2019 and 2018 was $58,490 and $0, respectively. At March 31, 2019 and December 31, 2018, the allowance for doubtful accounts was $195,000 and $300,000, respectively. As of March 31, 2019 and December 31, 2018, two customers accounted for 41% and 37% of accounts receivable, respectively. Two customers accounted for 45% of net revenue for the three months ended March 31, 2019 and three customers accounted for 33% of net revenue for the three months ended March 31, 2018. Inventories Inventories are valued at the lower of cost or market using the first-in, first-out (FIFO) method. Inventories consist primarily of finished goods. We expense costs to maintain certification to cost of goods sold as incurred. We review inventory on an ongoing basis, considering factors such as deterioration and obsolescence. We record an allowance for estimated losses when the facts and circumstances indicate that particular inventories may not be usable. Our reserve for obsolete inventory was $100,000 as of March 31, 2019 and December 31, 2018. Property and Equipment We account for property and equipment at cost less accumulated depreciation. We compute depreciation using the straight-line method over the estimated useful lives of the assets, generally three to five years. Depreciation for equipment, furniture and fixtures and vehicles commences once placed in service for its intended use. Leasehold improvements are amortized using the straight-line method over the lives of the respective leases or service lives of the improvements, whichever is shorter. Leases In February 2016, the FASB issued ASU No. 2016-02 (“ASC 842”), Leases, to require lessees to recognize all leases, with certain exceptions, on the balance sheet, while recognition on the statement of operations will remain similar to current lease accounting. Subsequently, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases, ASU No. 2018-11, Targeted Improvements, ASU No. 2018-20, Narrow-Scope Improvements for Lessors, and ASU 2019-01, Codification Improvements, to clarify and amend the guidance in ASU No. 2016-02. ASC 842 eliminates real estate-specific provisions and modifies certain aspects of lessor accounting. This standard is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. We adopted ASC 842 as of January 1, 2019 using the modified retrospective basis with a cumulative effect adjustment as of that date. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed us to carry forward the historical determination of contracts as leases, lease classification and not reassess initial direct costs for historical lease arrangements. Accordingly, previously reported financial statements, including footnote disclosures, have not been recast to reflect the application of the new standard to all comparative periods presented. Operating lease assets are included within operating lease right-of-use assets, and the corresponding operating lease liabilities are recorded as current portion of long-term operating lease, and within long-term liabilities as long-term operating lease, net of current portion on our condensed consolidated balance sheet as of March 31, 2019. We have elected not to present short-term leases on the consolidated balance sheet as these leases have a lease term of 12 months or less at lease inception and do not contain purchase options or renewal terms that we are reasonably certain to exercise. All other lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because most of our leases do not provide an implicit rate of return, we used our incremental borrowing rate based on the information available at adoption date in determining the present value of lease payments. Adoption of the new lease standard on January 1, 2019 had a material impact on our interim unaudited condensed consolidated financial statements. The most significant impacts related to the recognition of right-of-use ("ROU") asset of $714,421 and lease liability of $678,556 for our operating lease on the consolidated balance sheet. We also reclassified prepaid expenses of $35,865 and deferred rent balance, including tenant improvement allowances, and other liability balances of $414,949 relating to our existing lease arrangements as of December 31, 2018, into the ROU asset balance as of January 1, 2019. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. The standard did not materially impact our consolidated statement of operations and consolidated statement of cash flows. The cumulative effect of the changes made to our consolidated balance sheet as of January 1, 2019 for the adoption of the new lease standard was as follows: Balances at December 31, 2018 Effect of Adoption of New Lease Standard Balances at January 1, 2019 Assets Prepaid Expenses $ 301,797 $ (35,865 ) $ 265,932 Operating Lease Right of Use Asset $ — $ 714,421 $ 714,421 Liabilities Deferred Rent $ 13,215 $ (13,215 ) $ — Current Portion of Long-Term Operating Lease $ — $ — $ — Deferred Rent and Tenant Improvement Allowances $ 401,734 $ (401,734 ) $ — Long-Term Operating Lease, Net of Current Portion $ — $ 1,093,505 $ 1,093,505 Shareholders’ Equity Accumulated Deficit $ (41,201,511 ) $ — $ (41,201,511 ) Capitalized Software Development Costs In accordance with ASC 985-20 regarding the development of software to be sold, leased, or marketed, the Company expenses such costs as they are incurred until technological feasibility has been established, at and after which time those costs are capitalized until the product is available for general release to customers. The periodic expense for the amortization of capitalized software development costs will be included in cost of sales. Accounts Payable As of March 31, 2019, two vendors accounted for approximately 40% of accounts payable. As of December 31, 2018, three vendors accounted for approximately 63% of accounts payable One vendor accounted for approximately 67% and 70% of cost of sales for the three months ended March 31, 2019 and 2018, respectively. Accrued Warranties Accrued warranties represent the estimated costs, if any, that will be incurred during the warranty period of our products. We estimate the expected costs to be incurred during the warranty period and record the expense to the consolidated statement of operations at the date of sale. Our manufacturer assumes the warranty against product defects for one year from date of sale, which we extend to our customers upon sale of the product. We assume responsibility for product reliability and results. As of March 31, 2019 and December 31, 2018, our warranty reserve was $30,000 (See Note 13). Income Taxes Deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws in effect when the differences are expected to reverse. The measurement of deferred income tax assets is reduced, if necessary, by a valuation allowance for any tax benefits that are, on a more likely than not basis, not expected to be realized in accordance with Accounting Standards Codification (“ASC”) guidance for income taxes. Net deferred tax benefits have been fully reserved at March 31, 2019 and December 31, 2018. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. Net Loss Per Share Basic net loss per share is computed by dividing the Company’s net loss by the weighted average number of shares of common stock outstanding during the period presented. Diluted loss per share is based on the treasury stock method and includes the effect from potential issuance of shares of common stock, such as shares issuable pursuant to the exercise of options and warrants and conversions of preferred stock or debentures. Potentially dilutive securities as of March 31, 2019 consisted of 9,259,250 shares of common stock from convertible debentures, 26,800,611 shares of common stock issuable upon exercise of outstanding warrants, 620,000 shares of common stock issuable upon outstanding options and 510,000 shares of common stock issuable upon conversion of outstanding shares of Preferred A stock (“Convertible Series A Preferred Stock”). Diluted and basic weighted average shares are the same, as potentially dilutive shares are anti-dilutive. Potentially dilutive securities as of March 31, 2018 consisted of 11,111,100 shares of common stock from convertible debentures, 35,251,411 shares of common stock issuable upon exercise of outstanding warrants, 320,000 shares of common stock issuable upon outstanding options and 510,000 shares of common stock issuable upon conversion of outstanding shares of Preferred A stock (“Convertible Series A Preferred Stock”). Diluted and basic weighted average shares are the same, as potentially dilutive shares are anti-dilutive. Diluted net loss per share is computed similarly to basic net loss per share except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential shares of common stock had been issued and if such additional shares were dilutive. Options, warrants, preferred stock and shares associated with the conversion of debt to purchase approximately 37.2 million and 36.6 million shares of common stock were outstanding at March 31, 2019 and December 31, 2018, respectively, but were excluded from the computation of diluted net loss per share due to the anti-dilutive effect on net loss per share. For the Three Months Ended March 31, (Unaudited) 2019 2018 Net loss $ (934,532 ) $ (563,319 ) Adjustments for convertible debt - as converted Interest on convertible debt 50,000 60,000 Amortization of debt discount on convertible debt 17,534 8,037 Net loss attributable to common shareholders $ (866,998 ) $ (495,282 ) Weighted average number of shares of common stock outstanding: Basic and diluted 124,659,307 122,229,959 Net loss attributable to common shareholders per share: Basic and diluted $ (0.01 ) $ (0.00 ) Revenue Recognition We recognize revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Disaggregation of Revenue The following table presents our revenues disaggregated by revenue source. Net Revenue Product and Service Revenue For the three months ended March 31, (Unaudited) 2019 2018 SteraMist Product $ 1,029,000 $ 1,092,000 Service and Training 224,000 220,000 Total $ 1,253,000 $ 1,312,000 Revenue by Geographic Region For the three months ended March 31, (Unaudited) 2019 2018 United States $ 1,136,000 $ 945,000 International 117,000 367,000 Total $ 1,253,000 $ 1,312,000 Product revenue includes sales from our standard and customized equipment, solution and accessories sold with our equipment. Revenue is recognized upon transfer of control of promised products to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Service and training revenue include sales from our high-level decontamination and service engagements, validation of our equipment and technology and customer training. Service revenue is recognized as the agreed upon services are rendered to our customers in an amount that reflects the consideration we expect to receive in exchange for those services. Costs to Obtain a Contract with a Customer We apply a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling expenses. These costs include our internal sales force compensation program and certain partner sales incentive programs as we have determined annual compensation is commensurate with annual sales activities. Contract Balances As of March 31, 2019, and December 31, 2018 we did not have any unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. Arrangements with Multiple Performance Obligations Our contracts with customers may include multiple performance obligations. We enter into contracts that can include various combinations of products and services, which are primarily distinct and accounted for as separate performance obligations. Significant Judgments Our contracts with customers for products and services often dictate the terms and conditions of when the control of the promised products or services is transferred to the customer and the amount of consideration to be received in exchange for the products and services. Equity Compensation Expense We account for equity compensation expense using the Black Scholes model in accordance with FASB ASC 718, “Compensation—Stock Compensation.” Under the provisions of FASB ASC 718, equity compensation expense cost is estimated at the grant date based on the award’s fair value. On July 7, 2017, our shareholders approved the 2016 Equity Incentive Plan (the “2016 Plan”). The 2016 Plan authorizes the grant of stock options, stock appreciation rights, restricted stock, restricted stock units and performance units/shares. Up to 5,000,000 shares of common stock are authorized for issuance under the 2016 Plan. Shares issued under the 2016 Plan may be either authorized but unissued shares, treasury shares, or any combination thereof. Provisions in the 2016 Plan permit the reuse or reissuance by the 2016 Plan of shares of common stock for numerous reasons, including, but not limited to, shares of common stock underlying canceled, expired, or forfeited awards of stock-based compensation and stock appreciation rights paid out in the form of cash. Equity compensation expense will typically be awarded in consideration for the future performance of services to us. All recipients of awards under the 2016 Plan are required to enter into award agreements with the Company at the time of the award; awards under the 2016 Plan are expressly conditioned upon such agreements. For the three months ended March 31, 2019 and 2018, we issued 400,000 and 300,000 shares of common stock, respectively, out of the 2016 Plan. Concentrations of Credit Risk Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents. We maintain cash balances at financial institutions which exceed the current Federal Deposit Insurance Corporation limit of $250,000 at times during the year. Long-Lived Assets Including Acquired Intangible Assets We assess long-lived assets for potential impairments at the end of each year, or during the year if an event or other circumstance indicates that we may not be able to recover the carrying amount of the asset. In evaluating long-lived assets for impairment, we measure recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If our long-lived assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. We base the calculations of the estimated fair value of our long-lived assets on the income approach. For the income approach, we use an internally developed discounted cash flow model that includes, among others, the following assumptions: projections of revenues and expenses and related cash flows based on assumed long-term growth rates and demand trends; expected future investments to grow new units; and estimated discount rates. We base these assumptions on our historical data and experience, industry projections, micro and macro general economic condition projections, and our expectations. We had no long-lived asset impairment charges for the three months ended March 31, 2019 and 2018. Advertising and Promotional Expenses We expense advertising costs in the period in which they are incurred. Advertising and promotional expenses for the three months ended March 31, 2019 and 2018 were approximately $40,000 and $54,000, respectively Research and Development Expenses We expense research and development expenses in the period in which they are incurred. For the three months ended March 31, 2019 and 2018, research and development expenses were approximately $93,000 and $132,000, respectively. Shipping and Handling Costs We include shipping and handling costs relating to the delivery of products directly from vendors to the Company in cost of sales. Other shipping and handling costs, including third-party delivery costs relating to the delivery of products to customers, are classified as a general and administrative expense. Shipping and handling costs included in general and administrative expense were approximately $39,000 and $51,000 for the three months ended March 31, 2019 and 2018, respectively. Business Segments We currently have one reportable business segment due to the fact that we derive our revenue primarily from one product. A breakdown of revenue is presented in “Revenue Recognition” in Note 2 above. Recent Accounting Pronouncements In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment |
3. INVENTORIES
3. INVENTORIES | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
NOTE 3. INVENTORIES | Inventories consist of the following at: March 31, 2019 (Unaudited) December 31, 2018 Finished goods $ 2,493,188 $ 2,782,014 Inventory Reserve (100,000 ) (100,000 ) $ 2,393,188 $ 2,682,014 |
4. PROPERTY AND EQUIPMENT
4. PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
NOTE 4. PROPERTY AND EQUIPMENT | Property and equipment consist of the following at: March 31, 2019 (Unaudited) December 31, 2018 Furniture and fixtures $ 280,042 $ 277,976 Equipment 1,322,910 1,300,139 Vehicles 60,703 60,703 Computer and software 153,324 143,579 Leasehold improvements 355,898 355,898 Tenant Improvement Allowance 405,000 405,000 2,577,877 2,543,295 Less: Accumulated depreciation 1,048,970 954,704 $ 1,528,907 $ 1,588,591 For the three months ended March 31, 2019 and 2018, depreciation was $84,468 and $70,361, respectively. For the three months ended March 31, 2019, amortization of tenant improvement allowance in the amount of $9,798 was recorded as lease expense and included within general and administrative expense on the consolidated statement of operations. |
5. INTANGIBLE ASSETS
5. INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
NOTE 5. INTANGIBLE ASSETS | Intangible assets consist of patents and trademarks related to our Binary Ionization Technology. We amortize the patents over the estimated remaining lives of the related patents. The trademarks have an indefinite life. Amortization expense was $92,377 and $92,377 for the three months ended March 31, 2019 and 2018, respectively. Definite life intangible assets consist of the following: March 31, 2019 (Unaudited) December 31, 2018 Intellectual Property and Patents $ 2,848,300 $ 2,848,300 Less: Accumulated Amortization 2,201,653 2,109,276 Intangible Assets, net $ 646,647 $ 739,024 Indefinite life intangible assets consist of the following: Trademarks $ 496,792 $ 496,792 Total Intangible Assets, net $ 1,143,439 $ 1,235,816 Approximate amortization over the next five years is as follows: Year Ended: Amount April 1 – December 31, 2019 $ 277,000 December 31, 2020 370,000 December 31, 2021 - December 31, 2022 - December 31, 2023 - $ 647,000 |
6. LEASES
6. LEASES | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
NOTE 6. LEASES | In April 2018, we entered into a 10-year lease agreement for a new 9,000-square-foot facility that contains office, warehouse, lab and research and development space in Frederick, Maryland. The lease agreement was scheduled to commence on December 1, 2018 or when the property was ready for occupancy. The agreement provided for annual rent of $143,460, an escalation clause that increases the rent 3% year over year, a landlord tenant improvement allowance of $405,000 and additional landlord work as discussed in the lease agreement. We took occupancy of the property on December 17, 2018 and the lease was amended in March 2019 to provide for a 4-month rent holiday and a commencement date of April 1, 2019. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. The balances for our operating lease where we are the lessee are presented as follows within our condensed consolidated balance sheet: Operating leases: March 31, 2019 (Unaudited) Assets: Operating lease right-of-use asset $ 703,823 Liabilities: Current Portion of Long-Term Operating Lease $ 23,436 Long-Term Operating Lease, Net of Current Portion 1,089,316 $ 1,112,752 The components of lease expense are as follows within our condensed consolidated statement of operations: General and Administrative Expenses Three Months Ended March 31, 2019 (Unaudited) Operating lease expense $ 39,644 Other information related to leases where we are the lessee is as follows: March 31, 2019 (Unaudited) Weighted-average remaining lease term: Operating leases 10.00 years Discount rate: Operating leases 7.00% Supplemental cash flow information related to leases where we are the lessee is as follows: Three Months Ended March 31, 2019 (Unaudited) Cash paid for amounts included in the measurement of lease liabilities: $ - As of March 31, 2019, the maturities of our operating lease liability are as follows: Year Ended: Operating Lease April 1 - December 31, 2019 $ 65,753 December 31, 2020 146,688 December 31, 2021 151,088 December 31, 2022 155,621 December 31, 2023 160,290 Thereafter 910,280 Total minimum lease payments 1,589,720 Less: Interest 476,968 Present value of lease obligations 1,112,752 Less: Current portion 23,436 Long-term portion of lease obligations $ 1,089,316 As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2018 and under legacy lease accounting (ASC 840), future minimum lease payments under non-cancellable leases as of December 31, 2018 were as follows: Year Ended: Operating Lease December 31, 2019 $ 102,000 December 31, 2020 147,000 December 31, 2021 151,000 December 31, 2022 156,000 December 31, 2023 160,000 Thereafter 923,000 $ 1,639,000 |
7. CAPITALIZED SOFTWARE DEVELOP
7. CAPITALIZED SOFTWARE DEVELOPMENT COSTS | 3 Months Ended |
Mar. 31, 2019 | |
Capitalized Software Development Costs | |
NOTE 7. CAPITALIZED SOFTWARE DEVELOPMENT COSTS | In accordance with ASC 985-20 we capitalized certain software development costs associated with updating our continuing line of product offerings. As of March 31, 2019, a total of $125,704, of development costs are reported on our condensed consolidated balance sheet. |
8. CONVERTIBLE DEBT
8. CONVERTIBLE DEBT | 3 Months Ended |
Mar. 31, 2019 | |
Convertible Debt [Abstract] | |
NOTE 8. CONVERTIBLE DEBT | In March and May 2017, we closed a private placement transaction in which we issued to certain accredited investors unregistered senior callable convertible promissory notes (the “Notes”) and three-year warrants to purchase an aggregate of 999,998 shares of common stock at an exercise price of $0.69 per share in exchange for aggregate gross proceeds of $6,000,000. The Notes bear interest at a rate of 4% per annum. $5,300,000 in principal was originally scheduled to mature on August 31, 2018 and $700,000 in principal was originally scheduled to mature on November 8, 2018, unless earlier redeemed, repurchased or converted. The Notes are convertible at the option of the holder into common stock at a conversion price of $0.54 per share. Subsequent to September 1, 2017, we may redeem the Notes that are scheduled to mature on August 31, 2018 at any time prior to maturity at a price equal to 100% of the outstanding principal amount of the Notes to be redeemed, plus accrued and unpaid interest as of the redemption date. Prior to November 8, 2018, we may redeem the Notes that are scheduled to mature on such date at any time prior to maturity at a price equal to 100% of the outstanding principal amount of the Notes to be redeemed, plus accrued and unpaid interest as of the redemption date. Interest on the Notes is payable semi-annually in cash on February 28 and August 31 of each year, beginning on August 31, 2017. Interest expense related to the Notes for the three months ended March 31, 2019 and 2018 was $50,000 and $60,000, respectively. The warrants were valued at $62,559 using the Black-Scholes pricing model with the following assumptions: expected volatility: 104.06% –111.54%; expected dividend: $0; expected term: 3 years; and risk-free rate: 1.49%–1.59%. We recorded the warrants’ relative fair value of $61,904 as an increase to additional paid-in capital and a discount against the related Notes. The debt discount was amortized over the life of the Notes using the effective interest method. Amortization expense for the three months ended March 31, 2019 and 2018, was $17,534 and $8,037, respectively. In February and March 2018, we extended the maturity date of the Notes— we extended the maturity date to April 1, 2019 for $5,300,000 of principal on the Notes and to June 8, 2019 for the remaining $700,000 Note. No additional consideration was paid or accrued by us. The stated rate of the Notes was unchanged, and the estimated fair value of the new debt approximates its carrying amount (principal plus accrued interest at the date of the modification). We determined that the modification of these Notes is not a substantial modification in accordance with ASC 470-50, “Modifications and Extinguishments”. In May 2018, we offered a noteholder the option to convert its Note at a reduced conversion price of $0.46. Pursuant to the terms of the conversion offer, an aggregate of $700,000 of principal and $5,212 of accrued interest outstanding under the Note were converted into 1,877,960 shares of common stock. We recognized an induced conversion cost of $57,201 related to the conversion. In December 2018, a noteholder redeemed a note with a principal balance of $300,000 in exchange for $150,000 in cash. On March 30, 2019, the two-remaining noteholders agreed to extend the maturity dates of their notes totaling $5,000,000 to April 3, 2020. As part of the extensions, we agreed that if we do not make payment on or before the new maturity dates, after five (5) days written notice, the holders will have the right, but not the obligation, to convert the notes into our common shares at a conversion price of $0.11 per share or a total of 45,454,545 shares. All other provisions of the notes remain unchanged. We determined that the modification of these Notes is not a substantial modification in accordance with ASC 470-50, “Modifications and Extinguishments”. Convertible notes consist of the following at: March 31, 2019 (Unaudited) December 31, 2018 Convertible notes $ 5,000,000 $ 5,000,000 Initial discount (53,873 ) (53,873 ) Accumulated amortization 53,873 36,339 Convertible notes, net $ 5,000,000 $ 4,982,466 |
9. STOCKHOLDERS' EQUITY
9. STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | |
NOTE 9. STOCKHOLDERS' EQUITY | Our Board of Directors (the “Board”) may, without further action by our shareholders, from time to time, direct the issuance of any authorized but unissued or unreserved shares of preferred stock in series and at the time of issuance, determine the rights, preferences and limitations of each series. The holders of such preferred stock may be entitled to receive a preference payment in the event of any liquidation, dissolution or winding-up of the Company before any payment is made to the holders of our common stock. Furthermore, the Board could issue preferred stock with voting and other rights that could adversely affect the voting power of the holders of our common stock. Convertible Series A Preferred Stock Our authorized Convertible Series A Preferred Stock, $0.01 par value, consists of 1,000,000 shares. At March 31, 2019 and December 31, 2018, there were 510,000 shares issued and outstanding. The Convertible Series A Preferred Stock is convertible at the rate of one share of common stock for one share of Convertible Series A Preferred Stock. Convertible Series B Preferred Stock Our authorized Convertible Series B Preferred Stock, $1,000 stated value, 7.5% cumulative dividend, consists of 4,000 shares. At March 31, 2019 and December 31, 2018, there were no shares issued and outstanding, respectively. Each share of Convertible Series B Preferred Stock may be converted (at the holder’s election) into two hundred shares of our common stock. Common Stock During the three months ended March 31, 2018, we issued 300,000 shares of common stock valued at $30,000 to members of our board of directors (see Note 11). During the three months ended March 31, 2019, we issued 400,000 shares of common stock valued at $44,000 to members of our board of directors (see Note 11). Stock Options In January 2018, we issued options to purchase an aggregate of 100,000 shares of common stock to our Chief Operating Officer, valued at $11,780. The options have an exercise price of $0.12 per share and expire in January 2023. The options were valued using the Black-Scholes model using the following assumptions: volatility: 146%; dividend yield: 0%; zero coupon rate: 2.27%; and a life of 5 years. In January 2018, we issued options to purchase an aggregate of 20,000 shares of common stock to our Scientific Advisory Board members, valued at $1,810 in total. The options have an exercise price of $0.10 per share and expire in January 2028. The options were valued using the Black-Scholes model using the following assumptions: volatility: 147%; dividend yield: 0%; zero coupon rate: 2.41%; and a life of 10 years. In January 2019, pursuant to an employment agreement, we issued options to purchase an aggregate of 250,000 shares of common stock to our Chief Operating Officer, valued at $24,694. The options have an exercise price of $0.11 per share and expire in January 2024. The options were valued using the Black-Scholes model using the following assumptions: volatility: 144%; dividend yield: 0%; zero coupon rate: 2.47%; and a life of 5 years. The value of the options was expensed in the fourth quarter of 2018 and included in accrued expenses at December 31, 2018. In January 2019, we issued options to purchase an aggregate of 50,000 shares of common stock to our Chief Financial Officer, valued at $4,483. The options have an exercise price of $0.10 per share and expire in January 2024. The options were valued using the Black-Scholes model using the following assumptions: volatility: 143%; dividend yield: 0%; zero coupon rate: 2.58%; and a life of 5 years. The following table summarizes stock options outstanding as of March 31, 2019 and December 31, 2018: March 31, 2019 (Unaudited) December 31, 2018 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding, beginning of period 320,000 $ 0.52 200,000 $ 0.76 Granted 300,000 $ 0.11 120,000 $ 0.12 Exercised — — — — Outstanding, end of period 620,000 $ 0.32 320,000 $ 0.52 Options outstanding and exercisable by price range as of March 31, 2019 were as follows: Outstanding Options Average Weighted Exercisable Options Range Number Remaining Contractual Life in Years Number Weighted Average Exercise Price $ 0.05 20,000 1.78 20,000 $ 0.05 $ 0.10 70,000 5.97 70,000 $ 0.10 $ 0.11 250,000 4.76 250,000 $ 0.11 $ 0.12 100,000 3.78 100,000 $ 0.12 $ 0.27 40,000 5.76 40,000 $ 0.27 $ 0.55 100,000 6.85 100,000 $ 0.55 $ 2.10 40,000 0.76 40,000 $ 2.10 620,000 4.79 620,000 $ 0.32 Stock Warrants We did not issue any warrants during the three months ended March 31, 2018. In January 2019 we issued a warrant to purchase 1,000,000 shares of common stock to the CEO at an exercise price of $0.10 per share pursuant to an employment agreement. The warrant was valued at $89,654 and has a term of 5 years. We utilized the Black-Scholes model to fair value the warrant received by the CEO with the following assumptions: volatility, 143%; expected dividend yield, 0%; risk free interest rate, 2.58%; and a life of 5 years. The grant date fair value of each share of common stock underlying the warrant was $0.09. In January 2019 we issued a warrant to purchase 250,000 shares of common stock to an employee at an exercise price of $0.12 per share. The warrant was valued at $21,931 and has a term of 3 years. We utilized the Black-Scholes model to fair value the warrant received by the employee with the following assumptions: volatility, 148%; expected dividend yield, 0%; risk free interest rate, 2.55%; and a life of 3 years. The grant date fair value of each share of common stock underlying the warrant was $0.09. The value of the warrants was expensed in the fourth quarter of 2018 and included in accrued expenses at December 31, 2018. The following table summarizes the outstanding common stock warrants as of March 31, 2019 and December 31, 2018: March 31, 2019 (Unaudited) December 31, 2018 Number of Warrants Weighted Average Exercise Price Number of Warrants Weighted Average Exercise Price Outstanding, beginning of period 26,550,611 $ 0.34 35,501,411 $ 0.33 Granted 1,250,000 0.10 250,000 0.08 Exercised - - - - Expired (1,000,000 ) (0.30 ) (9,200,800 ) (0.30 ) Outstanding, end of period 26,800,611 $ 0.33 26,550,611 $ 0.34 Warrants outstanding and exercisable by price range as of March 31, 2019 were as follows: Outstanding Warrants Exercisable Warrants Exercise Price Number Average Weighted Remaining Contractual Life in Years Number Weighted Average Exercise Price $ 0.08 250,000 4.65 250,000 $ 0.08 $ 0.10 1,265,000 4.51 1,265,000 $ 0.10 $ 0.12 3,750,000 3.67 3,750,000 $ 0.12 $ 0.12 4,000,000 0.54 4,000,000 $ 0.12 $ 0.17 10,000 3.57 10,000 $ 0.17 $ 0.27 250,000 2.75 250,000 $ 0.27 $ 0.29 10,125,613 1.55 10,125,613 $ 0.29 $ 0.30 2,300,000 1.39 2,300,000 $ 0.30 $ 0.32 250,000 2.50 250,000 $ 0.32 $ 0.42 250,000 2.25 250,000 $ 0.42 $ 0.50 250,000 2.00 250,000 $ 0.50 $ 0.55 100,000 1.83 100,000 $ 0.55 $ 0.69 999,998 0.97 999,998 $ 0.69 $ 1.00 3,000,000 1.09 3,000,000 $ 1.00 26,800,611 1.81 26,800,611 $ 0.33 There were no unvested warrants outstanding as of March 31, 2019. |
10. COMMITMENTS AND CONTINGENCI
10. COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
NOTE 10. COMMITMENTS AND CONTINGENCIES | Legal Contingencies We may become a party to litigation in the normal course of business. In the opinion of management, there are no legal matters involving us that would have a material adverse effect upon our financial condition, results of operations or cash flows. In addition, from time to time, we may have to file claims against parties that infringe on our intellectual property. Product Liability As of March 31, 2019, and December 31, 2018, there were no claims against us for product liability. |
11. CONTRACTS AND AGREEMENTS
11. CONTRACTS AND AGREEMENTS | 3 Months Ended |
Mar. 31, 2019 | |
Contracts And Agreements | |
NOTE 11. CONTRACTS AND AGREEMENTS | Agreements with Directors In December 2017, we increased the annual board fee to directors to $40,000, to be paid in cash on a quarterly basis, with the exception of the audit committee chairperson, whose annual fee we increased to $45,000, also to be paid in cash on a quarterly basis. Director compensation also includes the annual issuance of our common stock. For the three months ended March 31, 2018, we issued an aggregate of 300,000 shares of common stock that were valued at $30,000 to members of our board of directors. For the three months ended March 31, 2019, we issued an aggregate of 400,000 shares of common stock that were valued at $44,000 to members of our board of directors. Other Agreements In June 2015, we launched the TOMI Service Network (“TSN”). The TSN is a national service network composed of existing full-service restoration industry specialists that have entered into licensing agreements with us to become Primary Service Providers (“PSPs”). The licensing agreements grant protected territories to PSPs to perform services using our SteraMist™ platform of products and also provide for potential job referrals to PSPs whereby we are entitled to referral fees. Additionally, the agreement provides for commissions due to PSPs for equipment and solution sales they facilitate to other service providers in their respective territories. As part of these agreements, we are obligated to provide to the PSPs various training, ongoing support and facilitate a referral network call center. As of March 31, 2019, we had entered into 89 licensing agreements in connection with the launch of the TSN. The licensing agreements contain fixed price minimum equipment and solution orders based on the population of the territories granted pursuant to the licensing agreements. The nature and terms of our TSN agreements may represent multiple deliverable arrangements. Each of the deliverables in these arrangements typically represent a separate unit of accounting. |
12. ACCRUED EXPENSES AND OTHER
12. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Expenses And Other Current Liabilities Usd | |
NOTE 12. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | Accrued expenses and other current liabilities consisted of the following at: March 31, 2019 (Unaudited) December 31, 2018 Commissions $ 271,750 $ 136,631 Payroll and related costs 142,497 144,359 Director fees 41,250 41,250 Sales Tax Payable 30,973 11,296 Accrued warranty (Note 13) 30,000 30,000 Other accrued expenses 63,956 51,663 Total $ 580,426 $ 415,199 |
13. ACCRUED WARRANTY
13. ACCRUED WARRANTY | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Warranty | |
NOTE 13. ACCRUED WARRANTY | Our manufacturer assumes warranty against product defects for one year from the sale to customers, which we extend to our customers upon sale of the product. We assume responsibility for product reliability and results. The warranty is generally limited to a refund of the original purchase price of the product or a replacement part. We estimate warranty costs based on historical warranty claim experience. The following table presents warranty reserve activities at: March 31, 2019 (Unaudited) December 31, 2018 Beginning accrued warranty costs $ 30,000 $ 5,000 Provision for warranty expense 1,324 47,454 Settlement of warranty claims (1,324 ) (22,454 ) Ending accrued warranty costs $ 30,000 $ 30,000 |
14. CUSTOMER CONCENTRATION
14. CUSTOMER CONCENTRATION | 3 Months Ended |
Mar. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
NOTE 14. CUSTOMER CONCENTRATION | The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s accounts receivable. As of March, 31, 2019 and December 31, 2018, two customers accounted for 41% and 37% of accounts receivable, respectively. Two customers accounted for 45% of net revenue for the three months ended March 31, 2019 and three customers accounted for 33% of net revenue for the three months ended March 31, 2018. |
15. SUBSEQUENT EVENTS
15. SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 15. SUBSEQUENT EVENTS | The Company has evaluated subsequent events through the date the financial statements were issued and up to the time of filing of the financial statements with the SEC. In April 2019, TOMI entered into a distribution agreement with an Israeli company, Cleancor Technologies Ltd., an advanced solution company for the industrial cleaning and repair of water and fire damages. In April 2019, we secured product registration for our SteraMist ® ™ In May 2019, we recorded a sale of over $400,000 for the Kansas Department of Health in the United States. |
2. SUMMARY OF SIGNIFICANT ACC_2
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The interim unaudited condensed consolidated financial statements included herein, presented in accordance with generally accepted accounting principles utilized in the United States of America (“GAAP”), and stated in U.S. dollars, have been prepared by the Company, without an audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2018 and notes thereto which are included in the Annual Report on Form 10-K previously filed with the SEC on April 1, 2019. The Company follows the same accounting policies in the preparation of interim reports. The results of operations for the interim periods covered by this Form 10-Q may not necessarily be indicative of results of operations for the full fiscal year or any other interim period. |
Principles of Consolidation | The accompanying condensed consolidated financial statements include the accounts of TOMI and its wholly-owned subsidiary, TOMI Environmental Solutions, Inc., a Nevada corporation. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Reclassification of Accounts | Certain reclassifications have been made to prior-year comparative financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or financial position. |
Use of Estimates | The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the accompanying condensed consolidated financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable, inventory, fair values of financial instruments, intangible assets, useful lives of intangible assets and property and equipment, fair values of stock-based awards, income taxes, and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of our assets and liabilities. |
Fair Value Measurements | The authoritative guidance for fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The guidance describes a fair value hierarchy based on the levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following: 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 for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or corroborated by observable market data or substantially the full term of the assets or liabilities. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the value of the assets or liabilities. Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and convertible debt. All these items were determined to be Level 1 fair value measurements. The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses approximated fair value because of the short maturity of these instruments. The recorded value of convertible debt approximates its fair value as the terms and rates approximate market rates (See Note 8). |
Cash and Cash Equivalents | For purposes of the statement of cash flows, cash and cash equivalents includes cash on hand held at financial institutions and other liquid investments with original maturities of three months or less. At times, these deposits may be in excess of insured limits. |
Accounts Receivable | Our accounts receivable are credit worthy customers or, for certain international customers, are supported by pre-payments. For those customers to whom we extend credit, we perform periodic evaluations of them and maintain allowances for potential credit losses as deemed necessary. We have a policy of reserving for doubtful accounts based on our best estimate of the amount of potential credit losses in existing accounts receivable. We periodically review our accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Bad debt expense for the three months ended March 31, 2019 and 2018 was $58,490 and $0, respectively. At March 31, 2019 and December 31, 2018, the allowance for doubtful accounts was $195,000 and $300,000, respectively. As of March 31, 2019 and December 31, 2018, two customers accounted for 41% and 37% of accounts receivable, respectively. Two customers accounted for 45% of net revenue for the three months ended March 31, 2019 and three customers accounted for 33% of net revenue for the three months ended March 31, 2018. |
Inventories | Inventories are valued at the lower of cost or market using the first-in, first-out (FIFO) method. Inventories consist primarily of finished goods. We expense costs to maintain certification to cost of goods sold as incurred. We review inventory on an ongoing basis, considering factors such as deterioration and obsolescence. We record an allowance for estimated losses when the facts and circumstances indicate that particular inventories may not be usable. Our reserve for obsolete inventory was $100,000 as of March 31, 2019 and December 31, 2018. |
Property and Equipment | We account for property and equipment at cost less accumulated depreciation. We compute depreciation using the straight-line method over the estimated useful lives of the assets, generally three to five years. Depreciation for equipment, furniture and fixtures and vehicles commences once placed in service for its intended use. Leasehold improvements are amortized using the straight-line method over the lives of the respective leases or service lives of the improvements, whichever is shorter. |
Leases | In February 2016, the FASB issued ASU No. 2016-02 (“ASC 842”), Leases, to require lessees to recognize all leases, with certain exceptions, on the balance sheet, while recognition on the statement of operations will remain similar to current lease accounting. Subsequently, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases, ASU No. 2018-11, Targeted Improvements, ASU No. 2018-20, Narrow-Scope Improvements for Lessors, and ASU 2019-01, Codification Improvements, to clarify and amend the guidance in ASU No. 2016-02. ASC 842 eliminates real estate-specific provisions and modifies certain aspects of lessor accounting. This standard is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. We adopted ASC 842 as of January 1, 2019 using the modified retrospective basis with a cumulative effect adjustment as of that date. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed us to carry forward the historical determination of contracts as leases, lease classification and not reassess initial direct costs for historical lease arrangements. Accordingly, previously reported financial statements, including footnote disclosures, have not been recast to reflect the application of the new standard to all comparative periods presented. Operating lease assets are included within operating lease right-of-use assets, and the corresponding operating lease liabilities are recorded as current portion of long-term operating lease, and within long-term liabilities as long-term operating lease, net of current portion on our condensed consolidated balance sheet as of March 31, 2019. We have elected not to present short-term leases on the consolidated balance sheet as these leases have a lease term of 12 months or less at lease inception and do not contain purchase options or renewal terms that we are reasonably certain to exercise. All other lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because most of our leases do not provide an implicit rate of return, we used our incremental borrowing rate based on the information available at adoption date in determining the present value of lease payments. Adoption of the new lease standard on January 1, 2019 had a material impact on our interim unaudited condensed consolidated financial statements. The most significant impacts related to the recognition of right-of-use ("ROU") asset of $714,421 and lease liability of $678,556 for our operating lease on the consolidated balance sheet. We also reclassified prepaid expenses of $35,865 and deferred rent balance, including tenant improvement allowances, and other liability balances of $414,949 relating to our existing lease arrangements as of December 31, 2018, into the ROU asset balance as of January 1, 2019. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. The standard did not materially impact our consolidated statement of operations and consolidated statement of cash flows. The cumulative effect of the changes made to our consolidated balance sheet as of January 1, 2019 for the adoption of the new lease standard was as follows: Balances at December 31, 2018 Effect of Adoption of New Lease Standard Balances at January 1, 2019 Assets Prepaid Expenses $ 301,797 $ (35,865 ) $ 265,932 Operating Lease Right of Use Asset $ — $ 714,421 $ 714,421 Liabilities Deferred Rent $ 13,215 $ (13,215 ) $ — Current Portion of Long-Term Operating Lease $ — $ — $ — Deferred Rent and Tenant Improvement Allowances $ 401,734 $ (401,734 ) $ — Long-Term Operating Lease, Net of Current Portion $ — $ 1,093,505 $ 1,093,505 Shareholders’ Equity Accumulated Deficit $ (41,201,511 ) $ — $ (41,201,511 ) |
Capitalized Software Development Costs | In accordance with ASC 985-20 regarding the development of software to be sold, leased, or marketed, the Company expenses such costs as they are incurred until technological feasibility has been established, at and after which time those costs are capitalized until the product is available for general release to customers. The periodic expense for the amortization of capitalized software development costs will be included in cost of sales. |
Accounts Payable | As of March 31, 2019, two vendors accounted for approximately 40% of accounts payable. As of December 31, 2018, three vendors accounted for approximately 63% of accounts payable One vendor accounted for approximately 67% and 70% of cost of sales for the three months ended March 31, 2019 and 2018, respectively. |
Accrued Warranties | Accrued warranties represent the estimated costs, if any, that will be incurred during the warranty period of our products. We estimate the expected costs to be incurred during the warranty period and record the expense to the consolidated statement of operations at the date of sale. Our manufacturer assumes the warranty against product defects for one year from date of sale, which we extend to our customers upon sale of the product. We assume responsibility for product reliability and results. As of March 31, 2019 and December 31, 2018, our warranty reserve was $30,000 (See Note 13). |
Income taxes | Deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws in effect when the differences are expected to reverse. The measurement of deferred income tax assets is reduced, if necessary, by a valuation allowance for any tax benefits that are, on a more likely than not basis, not expected to be realized in accordance with Accounting Standards Codification (“ASC”) guidance for income taxes. Net deferred tax benefits have been fully reserved at March 31, 2019 and December 31, 2018. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. |
Net Loss Per Share | Basic net loss per share is computed by dividing the Company’s net loss by the weighted average number of shares of common stock outstanding during the period presented. Diluted loss per share is based on the treasury stock method and includes the effect from potential issuance of shares of common stock, such as shares issuable pursuant to the exercise of options and warrants and conversions of preferred stock or debentures. Potentially dilutive securities as of March 31, 2019 consisted of 9,259,250 shares of common stock from convertible debentures, 26,800,611 shares of common stock issuable upon exercise of outstanding warrants, 620,000 shares of common stock issuable upon outstanding options and 510,000 shares of common stock issuable upon conversion of outstanding shares of Preferred A stock (“Convertible Series A Preferred Stock”). Diluted and basic weighted average shares are the same, as potentially dilutive shares are anti-dilutive. Potentially dilutive securities as of March 31, 2018 consisted of 11,111,100 shares of common stock from convertible debentures, 35,251,411 shares of common stock issuable upon exercise of outstanding warrants, 320,000 shares of common stock issuable upon outstanding options and 510,000 shares of common stock issuable upon conversion of outstanding shares of Preferred A stock (“Convertible Series A Preferred Stock”). Diluted and basic weighted average shares are the same, as potentially dilutive shares are anti-dilutive. Diluted net loss per share is computed similarly to basic net loss per share except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential shares of common stock had been issued and if such additional shares were dilutive. Options, warrants, preferred stock and shares associated with the conversion of debt to purchase approximately 37.2 million and 36.6 million shares of common stock were outstanding at March 31, 2019 and December 31, 2018, respectively, but were excluded from the computation of diluted net loss per share due to the anti-dilutive effect on net loss per share. For the Three Months Ended March 31, (Unaudited) 2019 2018 Net loss $ (934,532 ) $ (563,319 ) Adjustments for convertible debt - as converted Interest on convertible debt 50,000 60,000 Amortization of debt discount on convertible debt 17,534 8,037 Net loss attributable to common shareholders $ (866,998 ) $ (495,282 ) Weighted average number of shares of common stock outstanding: Basic and diluted 124,659,307 122,229,959 Net loss attributable to common shareholders per share: Basic and diluted $ (0.01 ) $ (0.00 ) |
Revenue Recognition | We recognize revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Disaggregation of Revenue The following table presents our revenues disaggregated by revenue source. Net Revenue Product and Service Revenue For the three months ended March 31, (Unaudited) 2019 2018 SteraMist Product $ 1,029,000 $ 1,092,000 Service and Training 224,000 220,000 Total $ 1,253,000 $ 1,312,000 Revenue by Geographic Region For the three months ended March 31, (Unaudited) 2019 2018 United States $ 1,136,000 $ 945,000 International 117,000 367,000 Total $ 1,253,000 $ 1,312,000 Product revenue includes sales from our standard and customized equipment, solution and accessories sold with our equipment. Revenue is recognized upon transfer of control of promised products to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Service and training revenue include sales from our high-level decontamination and service engagements, validation of our equipment and technology and customer training. Service revenue is recognized as the agreed upon services are rendered to our customers in an amount that reflects the consideration we expect to receive in exchange for those services. Costs to Obtain a Contract with a Customer We apply a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling expenses. These costs include our internal sales force compensation program and certain partner sales incentive programs as we have determined annual compensation is commensurate with annual sales activities. Contract Balances As of March 31, 2019, and December 31, 2018 we did not have any unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. Arrangements with Multiple Performance Obligations Our contracts with customers may include multiple performance obligations. We enter into contracts that can include various combinations of products and services, which are primarily distinct and accounted for as separate performance obligations. Significant Judgments Our contracts with customers for products and services often dictate the terms and conditions of when the control of the promised products or services is transferred to the customer and the amount of consideration to be received in exchange for the products and services. |
Equity Compensation Expense | We account for equity compensation expense using the Black Scholes model in accordance with FASB ASC 718, “Compensation—Stock Compensation.” Under the provisions of FASB ASC 718, equity compensation expense cost is estimated at the grant date based on the award’s fair value. On July 7, 2017, our shareholders approved the 2016 Equity Incentive Plan (the “2016 Plan”). The 2016 Plan authorizes the grant of stock options, stock appreciation rights, restricted stock, restricted stock units and performance units/shares. Up to 5,000,000 shares of common stock are authorized for issuance under the 2016 Plan. Shares issued under the 2016 Plan may be either authorized but unissued shares, treasury shares, or any combination thereof. Provisions in the 2016 Plan permit the reuse or reissuance by the 2016 Plan of shares of common stock for numerous reasons, including, but not limited to, shares of common stock underlying canceled, expired, or forfeited awards of stock-based compensation and stock appreciation rights paid out in the form of cash. Equity compensation expense will typically be awarded in consideration for the future performance of services to us. All recipients of awards under the 2016 Plan are required to enter into award agreements with the Company at the time of the award; awards under the 2016 Plan are expressly conditioned upon such agreements. For the three months ended March 31, 2019 and 2018, we issued 400,000 and 300,000 shares of common stock, respectively, out of the 2016 Plan. |
Concentrations of Credit Risk | Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents. We maintain cash balances at financial institutions which exceed the current Federal Deposit Insurance Corporation limit of $250,000 at times during the year. |
Long-Lived Assets Including Acquired Intangible Assets | We assess long-lived assets for potential impairments at the end of each year, or during the year if an event or other circumstance indicates that we may not be able to recover the carrying amount of the asset. In evaluating long-lived assets for impairment, we measure recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If our long-lived assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. We base the calculations of the estimated fair value of our long-lived assets on the income approach. For the income approach, we use an internally developed discounted cash flow model that includes, among others, the following assumptions: projections of revenues and expenses and related cash flows based on assumed long-term growth rates and demand trends; expected future investments to grow new units; and estimated discount rates. We base these assumptions on our historical data and experience, industry projections, micro and macro general economic condition projections, and our expectations. We had no long-lived asset impairment charges for the three months ended March 31, 2019 and 2018. |
Advertising and Promotional Expenses | We expense advertising costs in the period in which they are incurred. Advertising and promotional expenses for the three months ended March 31, 2019 and 2018 were approximately $40,000 and $54,000, respectively |
Research and Development Expenses | We expense research and development expenses in the period in which they are incurred. For the three months ended March 31, 2019 and 2018, research and development expenses were approximately $93,000 and $132,000, respectively. |
Shipping and Handling Costs | We include shipping and handling costs relating to the delivery of products directly from vendors to the Company in cost of sales. Other shipping and handling costs, including third-party delivery costs relating to the delivery of products to customers, are classified as a general and administrative expense. Shipping and handling costs included in general and administrative expense were approximately $39,000 and $51,000 for the three months ended March 31, 2019 and 2018, respectively. |
Business Segments | We currently have one reportable business segment due to the fact that we derive our revenue primarily from one product. A breakdown of revenue is presented in “Revenue Recognition” in Note 2 above. |
Recent Accounting Pronouncements | In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment |
2. SUMMARY OF SIGNIFICANT ACC_3
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Accounting Change | Balances at December 31, 2018 Effect of Adoption of New Lease Standard Balances at January 1, 2019 Assets Prepaid Expenses $ 301,797 $ (35,865 ) $ 265,932 Operating Lease Right of Use Asset $ — $ 714,421 $ 714,421 Liabilities Deferred Rent $ 13,215 $ (13,215 ) $ — Current Portion of Long-Term Operating Lease $ — $ — $ — Deferred Rent and Tenant Improvement Allowances $ 401,734 $ (401,734 ) $ — Long-Term Operating Lease, Net of Current Portion $ — $ 1,093,505 $ 1,093,505 Shareholders’ Equity Accumulated Deficit $ (41,201,511 ) $ — $ (41,201,511 ) |
Net Loss Per Share | For the Three Months Ended March 31, (Unaudited) 2019 2018 Net loss $ (934,532 ) $ (563,319 ) Adjustments for convertible debt - as converted Interest on convertible debt 50,000 60,000 Amortization of debt discount on convertible debt 17,534 8,037 Net loss attributable to common shareholders $ (866,998 ) $ (495,282 ) Weighted average number of shares of common stock outstanding: Basic and diluted 124,659,307 122,229,959 Net loss attributable to common shareholders per share: Basic and diluted $ (0.01 ) $ (0.00 ) |
Reportable business segment | Net Revenue Product and Service Revenue For the three months ended March 31, (Unaudited) 2019 2018 SteraMist Product $ 1,029,000 $ 1,092,000 Service and Training 224,000 220,000 Total $ 1,253,000 $ 1,312,000 Revenue by Geographic Region For the three months ended March 31, (Unaudited) 2019 2018 United States $ 1,136,000 $ 945,000 International 117,000 367,000 Total $ 1,253,000 $ 1,312,000 |
3. INVENTORIES (Tables)
3. INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventories Tables Abstract | |
Schedule of Inventories | March 31, 2019 (Unaudited) December 31, 2018 Finished goods $ 2,493,188 $ 2,782,014 Inventory Reserve (100,000 ) (100,000 ) $ 2,393,188 $ 2,682,014 |
4. PROPERTY AND EQUIPMENT (Tabl
4. PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | March 31, 2019 (Unaudited) December 31, 2018 Furniture and fixtures $ 280,042 $ 277,976 Equipment 1,322,910 1,300,139 Vehicles 60,703 60,703 Computer and software 153,324 143,579 Leasehold improvements 355,898 355,898 Tenant Improvement Allowance 405,000 405,000 2,577,877 2,543,295 Less: Accumulated depreciation 1,048,970 954,704 $ 1,528,907 $ 1,588,591 |
5. INTANGIBLE ASSETS (Tables)
5. INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Definite life intangible assets | March 31, 2019 (Unaudited) December 31, 2018 Intellectual Property and Patents $ 2,848,300 $ 2,848,300 Less: Accumulated Amortization 2,201,653 2,109,276 Intangible Assets, net $ 646,647 $ 739,024 |
Indefinite life intangible assets | Trademarks $ 496,792 $ 496,792 Total Intangible Assets, net $ 1,143,439 $ 1,235,816 |
Approximate amortization over the next five years | Year Ended: Amount April 1 – December 31, 2019 $ 277,000 December 31, 2020 370,000 December 31, 2021 - December 31, 2022 - December 31, 2023 - $ 647,000 |
6. LEASES (Tables)
6. LEASES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases Tables Abstract | |
Operating lease | Operating leases: March 31, 2019 (Unaudited) Assets: Operating lease right-of-use asset $ 703,823 Liabilities: Current Portion of Long-Term Operating Lease $ 23,436 Long-Term Operating Lease, Net of Current Portion 1,089,316 $ 1,112,752 |
Lease cost | General and Administrative Expenses Three Months Ended March 31, 2019 (Unaudited) Operating lease expense $ 39,644 |
Other information related to leases | March 31, 2019 (Unaudited) Weighted-average remaining lease term: Operating leases 10.00 years Discount rate: Operating leases 7.00% |
Maturities of lease payments | As of March 31, 2019, the maturities of our operating lease liability are as follows: Year Ended: Operating Lease April 1 - December 31, 2019 $ 65,753 December 31, 2020 146,688 December 31, 2021 151,088 December 31, 2022 155,621 December 31, 2023 160,290 Thereafter 910,280 Total minimum lease payments 1,589,720 Less: Interest 476,968 Present value of lease obligations 1,112,752 Less: Current portion 23,436 Long-term portion of lease obligations $ 1,089,316 As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2018 and under legacy lease accounting (ASC 840), future minimum lease payments under non-cancellable leases as of December 31, 2018 were as follows: Year Ended: Operating Lease December 31, 2019 $ 102,000 December 31, 2020 147,000 December 31, 2021 151,000 December 31, 2022 156,000 December 31, 2023 160,000 Thereafter 923,000 $ 1,639,000 |
8. CONVERTIBLE DEBT (Tables)
8. CONVERTIBLE DEBT (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Convertible Debt [Abstract] | |
Convertible Notes potential future financing and fundamental transactions | March 31, 2019 (Unaudited) December 31, 2018 Convertible notes $ 5,000,000 $ 5,000,000 Initial discount (53,873 ) (53,873 ) Accumulated amortization 53,873 36,339 Convertible notes, net $ 5,000,000 $ 4,982,466 |
9. STOCKHOLDERS' EQUITY (Tables
9. STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | |
Summary of stock options outstanding | March 31, 2019 (Unaudited) December 31, 2018 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding, beginning of period 320,000 $ 0.52 200,000 $ 0.76 Granted 300,000 $ 0.11 120,000 $ 0.12 Exercised — — — — Outstanding, end of period 620,000 $ 0.32 320,000 $ 0.52 |
Options outstanding and exercisable by price range | Outstanding Options Average Weighted Exercisable Options Range Number Remaining Contractual Life in Years Number Weighted Average Exercise Price $ 0.05 20,000 1.78 20,000 $ 0.05 $ 0.10 70,000 5.97 70,000 $ 0.10 $ 0.11 250,000 4.76 250,000 $ 0.11 $ 0.12 100,000 3.78 100,000 $ 0.12 $ 0.27 40,000 5.76 40,000 $ 0.27 $ 0.55 100,000 6.85 100,000 $ 0.55 $ 2.10 40,000 0.76 40,000 $ 2.10 620,000 4.79 620,000 $ 0.32 |
Summary of stock warrants outstanding | March 31, 2019 (Unaudited) December 31, 2018 Number of Warrants Weighted Average Exercise Price Number of Warrants Weighted Average Exercise Price Outstanding, beginning of period 26,550,611 $ 0.34 35,501,411 $ 0.33 Granted 1,250,000 0.10 250,000 0.08 Exercised - - - - Expired (1,000,000 ) (0.30 ) (9,200,800 ) (0.30 ) Outstanding, end of period 26,800,611 $ 0.33 26,550,611 $ 0.34 |
Warrants outstanding and exercisable by price range | Outstanding Warrants Exercisable Warrants Exercise Price Number Average Weighted Remaining Contractual Life in Years Number Weighted Average Exercise Price $ 0.08 250,000 4.65 250,000 $ 0.08 $ 0.10 1,265,000 4.51 1,265,000 $ 0.10 $ 0.12 3,750,000 3.67 3,750,000 $ 0.12 $ 0.12 4,000,000 0.54 4,000,000 $ 0.12 $ 0.17 10,000 3.57 10,000 $ 0.17 $ 0.27 250,000 2.75 250,000 $ 0.27 $ 0.29 10,125,613 1.55 10,125,613 $ 0.29 $ 0.30 2,300,000 1.39 2,300,000 $ 0.30 $ 0.32 250,000 2.50 250,000 $ 0.32 $ 0.42 250,000 2.25 250,000 $ 0.42 $ 0.50 250,000 2.00 250,000 $ 0.50 $ 0.55 100,000 1.83 100,000 $ 0.55 $ 0.69 999,998 0.97 999,998 $ 0.69 $ 1.00 3,000,000 1.09 3,000,000 $ 1.00 26,800,611 1.81 26,800,611 $ 0.33 |
12. ACCRUED EXPENSES AND OTHE_2
12. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Expenses And Other Current Liabilities Tables | |
Schedule of accrued expenses and other current liabilities | March 31, 2019 (Unaudited) December 31, 2018 Commissions $ 271,750 $ 136,631 Payroll and related costs 142,497 144,359 Director fees 41,250 41,250 Sales Tax Payable 30,973 11,296 Accrued warranty (Note 13) 30,000 30,000 Other accrued expenses 63,956 51,663 Total $ 580,426 $ 415,199 |
13. ACCRUED WARRANTY (Tables)
13. ACCRUED WARRANTY (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Warranty Tables Abstract | |
Warranty reserve activity | March 31, 2019 (Unaudited) December 31, 2018 Beginning accrued warranty costs $ 30,000 $ 5,000 Provision for warranty expense 1,324 47,454 Settlement of warranty claims (1,324 ) (22,454 ) Ending accrued warranty costs $ 30,000 $ 30,000 |
2. SUMMARY OF SIGNIFICANT ACC_4
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Prepaid Expenses | $ 259,140 | $ 301,797 |
Operating Lease Right of Use Asset | 703,823 | 0 |
Liabilities | ||
Deferred Rent | 0 | 13,215 |
Current Portion of Long-Term Operating Lease | 23,436 | 0 |
Deferred Rent and Tenant Improvement Allowances | 0 | 401,734 |
Long-Term Operating Lease, Net of Current Portion | 1,089,316 | 0 |
Shareholders' Equity | ||
Accumulated Deficit | $ (42,136,043) | (41,201,511) |
Effect of Adoption of New Lease Standard | ||
Assets | ||
Prepaid Expenses | (35,865) | |
Operating Lease Right of Use Asset | 714,421 | |
Liabilities | ||
Deferred Rent | (13,215) | |
Current Portion of Long-Term Operating Lease | 0 | |
Deferred Rent and Tenant Improvement Allowances | (401,734) | |
Long-Term Operating Lease, Net of Current Portion | 1,093,505 | |
Shareholders' Equity | ||
Accumulated Deficit | 0 | |
Updated Balance | ||
Assets | ||
Prepaid Expenses | 265,932 | |
Operating Lease Right of Use Asset | 714,421 | |
Liabilities | ||
Deferred Rent | 0 | |
Current Portion of Long-Term Operating Lease | 0 | |
Deferred Rent and Tenant Improvement Allowances | 0 | |
Long-Term Operating Lease, Net of Current Portion | 1,093,505 | |
Shareholders' Equity | ||
Accumulated Deficit | $ (41,201,511) |
2. SUMMARY OF SIGNIFICANT ACC_5
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Summary Of Significant Accounting Policies | ||
Net loss | $ (934,532) | $ (563,319) |
Interest on convertible debt | 50,000 | 60,000 |
Amortization of debt discount on convertible debt | 17,534 | 8,037 |
Net loss attributable to common shareholders | $ (866,998) | $ (495,282) |
Weighted average number of common shares outstanding: | ||
Basic and diluted | 124,659,307 | 122,229,959 |
Net loss attributable to common shareholders per share: | ||
Basic and diluted | $ (0.01) | $ 0 |
2. SUMMARY OF SIGNIFICANT ACC_6
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net Revenue | $ 1,252,658 | $ 1,312,466 |
SteraMist Product [Member] | ||
Net Revenue | 1,029,000 | 1,092,000 |
Service & Training [Member] | ||
Net Revenue | 224,000 | 220,000 |
United States [Member] | ||
Net Revenue | 1,136,000 | 945,000 |
International [Member] | ||
Net Revenue | $ 117,000 | $ 367,000 |
2. SUMMARY OF SIGNIFICANT ACC_7
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Bad Debt Expense | $ 58,490 | $ 0 | |
Allowance for doubtful accounts | 195,000 | 300,000 | |
Warranty reserve | $ 30,000 | $ 30,000 | |
Potentially dilutive securities, convertible debentures | 9,259,250 | 11,111,100 | |
Potentially dilutive securities, outstanding warrants | 26,800,611 | 35,251,411 | |
Potentially dilutive securities, outstanding options | 620,000 | 320,000 | |
Potentially dilutive securities, convertible Series A preferred stock | 510,000 | 510,000 | |
Advertising and promotional expenses | $ 40,000 | $ 54,000 | |
Research and Development Expenses | 92,577 | 132,487 | |
Shipping and Handling Costs | $ 39,000 | $ 51,000 | |
Accounts Receivable [Member] | Two Customers [Member] | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Concentration Risk, Percentage | 41.00% | 37.00% | |
Revenue, Net [Member] | Two Customers [Member] | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Concentration Risk, Percentage | 45.00% | 33.00% | |
Accounts Payable [Member] | Two Customers [Member] | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Concentration Risk, Percentage | 40.00% | 63.00% |
3. INVENTORIES (Details Narrati
3. INVENTORIES (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 2,493,188 | $ 2,782,014 |
Inventory reserve | (100,000) | (100,000) |
Inventory | $ 2,393,188 | $ 2,682,014 |
4. PROPERTY AND EQUIPMENT (Deta
4. PROPERTY AND EQUIPMENT (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Abstract] | ||
Furniture and fixtures | $ 280,042 | $ 277,976 |
Equipment | 1,322,910 | 1,300,139 |
Vehicles | 60,703 | 60,703 |
Computer and software | 153,324 | 143,579 |
Leasehold Improvements | 355,898 | 355,898 |
Tenant Improvement Allowance | 405,000 | 405,000 |
Property and Equipment Gross | 2,577,877 | 2,543,295 |
Less: Accumulated depreciation | 1,048,970 | 954,704 |
Property and Equipment Net | $ 1,528,907 | $ 1,588,591 |
4. PROPERTY AND EQUIPMENT (De_2
4. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property and Equipment | ||
Depreciation | $ 84,468 | $ 70,361 |
5. INTANGIBLE ASSETS (Details)
5. INTANGIBLE ASSETS (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intellectual Property and Patents | $ 2,848,300 | $ 2,848,300 |
Less: Accumulated Amortization | 2,201,653 | 2,109,276 |
Intangible Assets, net | $ 646,647 | $ 739,024 |
5. INTANGIBLE ASSETS (Details 1
5. INTANGIBLE ASSETS (Details 1) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Trademarks | $ 496,792 | $ 496,792 |
Total Intangible Assets, net | $ 1,143,439 | $ 1,235,816 |
5. INTANGIBLE ASSETS (Details 2
5. INTANGIBLE ASSETS (Details 2) | Mar. 31, 2019USD ($) |
Amortization | |
2020 | $ 277,000 |
2021 | 370,000 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Total | $ 647,000 |
5. INTANGIBLE ASSETS (Details N
5. INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 92,377 | $ 92,377 |
6. LEASES (Details)
6. LEASES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Assets | ||
Operating Lease Right of Use Asset | $ 703,823 | $ 0 |
Liabilities | ||
Current Portion of Long-Term Operating Lease | 23,436 | 0 |
Long-Term Operating Lease, Net of Current Portion | 1,089,316 | $ 0 |
Operating lease expense | $ 39,644 | |
Weighted-average remaining lease term: Operating leases | 10 years | |
Discount rate: Operating leases | 7.00% | |
Cash paid for amounts included in the measurement of lease liabilities: | $ 0 |
6. LEASES (Details 1)
6. LEASES (Details 1) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Software | ||
April 1 - December 31, 2019 | $ 65,753 | $ 102,000 |
December 31, 2020 | 146,688 | 147,000 |
December 31, 2021 | 151,088 | 151,000 |
December 31, 2022 | 155,621 | 156,000 |
December 31, 2023 | 160,290 | 160,000 |
Thereafter | 910,280 | 923,000 |
Total payments | 1,589,720 | $ 1,639,000 |
Less: imputed interest | 476,968 | |
Total operating lease liability | $ 1,112,752 |
8. CONVERTIBLE DEBT (Details)
8. CONVERTIBLE DEBT (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Convertible Debt | ||
Convertible notes | $ 5,000,000 | $ 5,000,000 |
Initial discount | (53,873) | (53,873) |
Accumulated Amortization | 53,873 | 36,339 |
Convertible notes, net | $ 5,000,000 | $ 4,982,466 |
8. CONVERTIBLE DEBT (Details Na
8. CONVERTIBLE DEBT (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Remaining term (years) | 3 years | |
Expected dividend yield | 0.00% | |
Amortization expense | $ 17,534 | $ 8,037 |
Interest expense | $ 50,000 | $ 60,000 |
Minimum | ||
Expected volatility | 104.06% | |
Risk-free rate | 1.49% | |
Maximum | ||
Expected volatility | 111.54% | |
Risk-free rate | 1.59% |
9. STOCKHOLDERS' EQUITY (Detail
9. STOCKHOLDERS' EQUITY (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Number of Options | ||
Outstanding option, Beginning balance | 320,000 | 200,000 |
Granted, Options | 300,000 | 120,000 |
Exercised, Options | 0 | 0 |
Outstanding option, Ending balance | 620,000 | 320,000 |
Weighted Average Exercise Price | ||
Outstanding Weighted Average Exercise Price, Beginning balance | $ 0.52 | $ 0.76 |
Granted, Weighted Average Exercise Price | 0.11 | 0.12 |
Exercised, Weighted Average Exercise Price | 0 | 0 |
Outstanding Weighted Average Exercise Price, Ending balance | $ 0.32 | $ 0.52 |
9. STOCKHOLDERS' EQUITY (Deta_2
9. STOCKHOLDERS' EQUITY (Details 1) - $ / shares | 3 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Options outstanding and exercisable by price range | |||
Outstanding option, Number | 620,000 | 320,000 | 200,000 |
Average Weighted Remaining Contractual Life in Years, option | 4 years 9 months 15 days | ||
Exercisable Options, Number | 620,000 | ||
Weighted Average Exercise Price, Exercisable Options | $ 0.32 | ||
0.05 Range [Member] | |||
Options outstanding and exercisable by price range | |||
Outstanding option, Number | 20,000 | ||
Average Weighted Remaining Contractual Life in Years, option | 1 year 9 months 11 days | ||
Exercisable Options, Number | 20,000 | ||
Weighted Average Exercise Price, Exercisable Options | $ 0.05 | ||
0.10 Range [Member] | |||
Options outstanding and exercisable by price range | |||
Outstanding option, Number | 70,000 | ||
Average Weighted Remaining Contractual Life in Years, option | 5 years 11 months 19 days | ||
Exercisable Options, Number | 70,000 | ||
Weighted Average Exercise Price, Exercisable Options | $ 0.1 | ||
0.11 Range [Member] | |||
Options outstanding and exercisable by price range | |||
Outstanding option, Number | 250,000 | ||
Average Weighted Remaining Contractual Life in Years, option | 4 years 9 months 4 days | ||
Exercisable Options, Number | 250,000 | ||
Weighted Average Exercise Price, Exercisable Options | $ 0.11 | ||
0.12 Range [Member] | |||
Options outstanding and exercisable by price range | |||
Outstanding option, Number | 100,000 | ||
Average Weighted Remaining Contractual Life in Years, option | 3 years 9 months 11 days | ||
Exercisable Options, Number | 100,000 | ||
Weighted Average Exercise Price, Exercisable Options | $ 0.12 | ||
0.27 Range [Member] | |||
Options outstanding and exercisable by price range | |||
Outstanding option, Number | 40,000 | ||
Average Weighted Remaining Contractual Life in Years, option | 5 years 9 months 4 days | ||
Exercisable Options, Number | 40,000 | ||
Weighted Average Exercise Price, Exercisable Options | $ 0.27 | ||
0.55 Range [Member] | |||
Options outstanding and exercisable by price range | |||
Outstanding option, Number | 100,000 | ||
Average Weighted Remaining Contractual Life in Years, option | 6 years 10 months 6 days | ||
Exercisable Options, Number | 100,000 | ||
Weighted Average Exercise Price, Exercisable Options | $ 0.55 | ||
2.10 Range [Member] | |||
Options outstanding and exercisable by price range | |||
Outstanding option, Number | 40,000 | ||
Average Weighted Remaining Contractual Life in Years, option | 9 months 4 days | ||
Exercisable Options, Number | 40,000 | ||
Weighted Average Exercise Price, Exercisable Options | $ 2.1 |
9. STOCKHOLDERS' EQUITY (Deta_3
9. STOCKHOLDERS' EQUITY (Details 2) - Warrant [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding Warrants, Beginning Balance | 26,550,611 | 35,501,411 |
Granted, Warrants | 1,250,000 | 250,000 |
Exercised, Warrants | 0 | 0 |
Expired, Warrants | (1,000,000) | (9,200,800) |
Outstanding Warrants, Ending Balance | 26,800,611 | 26,550,611 |
Outstanding Weighted Average Exercise Price, Beginning balance | $ 0.34 | $ 0.33 |
Granted, Weighted Average Exercise Price | 0.10 | 0.08 |
Exercised, Weighted Average Exercise Price | 0 | 0 |
Expired, Weighted Average Exercise Price | (0.30) | (0.30) |
Outstanding Weighted Average Exercise Price, Ending balance | $ 0.33 | $ 0.34 |
9. STOCKHOLDERS' EQUITY (Deta_4
9. STOCKHOLDERS' EQUITY (Details 3) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding warrants, Number | 26,800,611 |
Average Weighted Remaining Contractual Life in Years, Warrant | 1 year 9 months 22 days |
Exercisable Warrants, Number | 26,800,611 |
Weighted Average Exercise Price, Exercisable Warrants | $ / shares | $ 0.33 |
0.08 Range [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding warrants, Number | 250,000 |
Average Weighted Remaining Contractual Life in Years, Warrant | 4 years 7 months 24 days |
Exercisable Warrants, Number | 250,000 |
Weighted Average Exercise Price, Exercisable Warrants | $ / shares | $ 0.08 |
0.10 Range [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding warrants, Number | 1,265,000 |
Average Weighted Remaining Contractual Life in Years, Warrant | 4 years 6 months 4 days |
Exercisable Warrants, Number | 1,265,000 |
Weighted Average Exercise Price, Exercisable Warrants | $ / shares | $ 0.10 |
0.12 Range [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding warrants, Number | 3,750,000 |
Average Weighted Remaining Contractual Life in Years, Warrant | 3 years 8 months 1 day |
Exercisable Warrants, Number | 3,750,000 |
Weighted Average Exercise Price, Exercisable Warrants | $ / shares | $ 0.12 |
0.12 Range [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding warrants, Number | 4,000,000 |
Average Weighted Remaining Contractual Life in Years, Warrant | 6 months 14 days |
Exercisable Warrants, Number | 4,000,000 |
Weighted Average Exercise Price, Exercisable Warrants | $ / shares | $ 0.12 |
0.17 Range [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding warrants, Number | 10,000 |
Average Weighted Remaining Contractual Life in Years, Warrant | 3 years 6 months 25 days |
Exercisable Warrants, Number | 10,000 |
Weighted Average Exercise Price, Exercisable Warrants | $ / shares | $ 0.17 |
0.27 Range [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding warrants, Number | 250,000 |
Average Weighted Remaining Contractual Life in Years, Warrant | 2 years 9 months |
Exercisable Warrants, Number | 250,000 |
Weighted Average Exercise Price, Exercisable Warrants | $ / shares | $ 0.27 |
0.29 Range [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding warrants, Number | 10,125,613 |
Average Weighted Remaining Contractual Life in Years, Warrant | 1 year 6 months 18 days |
Exercisable Warrants, Number | 10,125,613 |
Weighted Average Exercise Price, Exercisable Warrants | $ / shares | $ 0.29 |
0.30 Range [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding warrants, Number | 2,300,000 |
Average Weighted Remaining Contractual Life in Years, Warrant | 1 year 4 months 20 days |
Exercisable Warrants, Number | 2,300,000 |
Weighted Average Exercise Price, Exercisable Warrants | $ / shares | $ 0.30 |
0.32 Range [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding warrants, Number | 250,000 |
Average Weighted Remaining Contractual Life in Years, Warrant | 2 years 6 months |
Exercisable Warrants, Number | 250,000 |
Weighted Average Exercise Price, Exercisable Warrants | $ / shares | $ 0.32 |
0.42 Range [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding warrants, Number | 250,000 |
Average Weighted Remaining Contractual Life in Years, Warrant | 2 years 3 months |
Exercisable Warrants, Number | 250,000 |
Weighted Average Exercise Price, Exercisable Warrants | $ / shares | $ 0.42 |
0.50 Range [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding warrants, Number | 250,000 |
Average Weighted Remaining Contractual Life in Years, Warrant | 2 years |
Exercisable Warrants, Number | 250,000 |
Weighted Average Exercise Price, Exercisable Warrants | $ / shares | $ 0.50 |
0.55 Range [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding warrants, Number | 100,000 |
Average Weighted Remaining Contractual Life in Years, Warrant | 1 year 2 months 29 days |
Exercisable Warrants, Number | 100,000 |
Weighted Average Exercise Price, Exercisable Warrants | $ / shares | $ 0.55 |
0.69 Range [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding warrants, Number | 999,998 |
Average Weighted Remaining Contractual Life in Years, Warrant | 11 months 19 days |
Exercisable Warrants, Number | 999,998 |
Weighted Average Exercise Price, Exercisable Warrants | $ / shares | $ 0.69 |
1.00 Range [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding warrants, Number | 3,000,000 |
Average Weighted Remaining Contractual Life in Years, Warrant | 1 year 1 month 2 days |
Exercisable Warrants, Number | 3,000,000 |
Weighted Average Exercise Price, Exercisable Warrants | $ / shares | $ 1 |
9. STOCKHOLDERS' EQUITY (Deta_5
9. STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | |||
Preferred Stock Authorized | 1,000,000 | 1,000,000 | |
Preferred Stock Issued | 510,000 | 510,000 | |
Preferred Stock Outstanding | 510,000 | 510,000 | |
Preferred Stock par value | $ 0.01 | $ 0.01 | |
Cumulative Convertible Preferred Stock Series B Cumulative dividend | 7.50% | 7.50% | |
Common stock issued for services provided, Shares | 400,000 | 300,000 | |
Common stock issued for services provided, Amount | $ 44,000 | $ 30,000 | |
Equity based compensation | $ 80,917 | $ 12,685 |
12. ACCRUED EXPENSES AND OTHE_3
12. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Accrued Expenses And Other Current Liabilities | ||
Commissions | $ 271,750 | $ 136,631 |
Payroll and related costs | 142,497 | 144,359 |
Director fees | 41,250 | 41,250 |
Sales Tax Payable | 30,973 | 11,296 |
Accrued warranty (Note 13) | 30,000 | 30,000 |
Other accrued expenses | 63,956 | 51,663 |
Total | $ 580,426 | $ 415,199 |
13. ACCRUED WARRANTY (Details)
13. ACCRUED WARRANTY (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Accrued Warranty Details Abstract | ||
Beginning accrued warranty costs | $ 30,000 | $ 5,000 |
Provision for product warranty costs | 1,324 | 47,454 |
Settlement of warranty claims | (1,324) | (22,454) |
Ending accrued warranty costs | $ 30,000 | $ 30,000 |
14. CUSTOMER CONCENTRATION (Det
14. CUSTOMER CONCENTRATION (Details Narrative) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Revenue, Net [Member] | Two Customers [Member] | |||
Concentration risk percentage | 45.00% | ||
Revenue, Net [Member] | Three customers [Member] | |||
Concentration risk percentage | 33.00% | ||
Accounts Receivable [Member] | Two Customers [Member] | |||
Concentration risk percentage | 41.00% | 37.00% |