Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 15, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | JACKSAM CORPORATION | |
Entity Central Index Key | 0000860543 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 60,851,972 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 | |
Entity Emerging Growth Company | true | |
Entity Small Business | true | |
Entity Ex Transition Period | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash | $ 543,724 | $ 1,074,105 |
Accounts receivable, net | 38,039 | 25,485 |
Inventory, net | 589,620 | 764,095 |
Prepaid expenses | 138,065 | 37,500 |
Total Current Assets | 1,309,448 | 1,901,185 |
Property and equipment, net | 14,080 | 14,346 |
Right of-use asset - operating lease | 35,767 | |
Other Assets | 1,200 | |
Total Assets | 1,360,495 | 1,915,531 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 407,127 | 537,601 |
Deferred revenue | 1,096,572 | 906,964 |
Convertible notes payable, current portion | 15,000 | 3,218,500 |
Notes Payable | 62,288 | 70,912 |
Right of use liability - operating lease | 41,159 | |
Accrued liabilities - other | 1,642,118 | 1,642,118 |
Total Current Liabilities | 3,264,264 | 6,376,095 |
Total Liabilities | 3,264,264 | 6,376,095 |
Commitment | ||
Stockholders' Deficit: | ||
Preferred stock - 10,000,000 authorized, $0.001 par value, 0 shares issued and outstanding | ||
Common stock - 90,000,000 authorized, $0.001 par value, 60,851,972 and 48,272,311 shares issued and outstanding, respectively | 60,852 | 48,272 |
Additional paid-in capital | 3,226,526 | 10,661 |
Accumulated deficit | (5,191,147) | (4,519,497) |
Total Stockholders' Deficit | (1,903,769) | (4,460,564) |
Total Liabilities, and Stockholders' Deficit | $ 1,360,495 | $ 1,915,531 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, shares par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Stock, shares par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 90,000,000 | 90,000,000 |
Common Stock, shares issued | 60,851,972 | 48,272,311 |
Common Stock, shares outstanding | 60,851,972 | 48,272,311 |
Consolidated Statements of Oper
Consolidated Statements of Operations (unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Consolidated Statements Of Operations | ||
Sales | $ 1,624,254 | $ 1,310,856 |
Cost of Sales | 1,130,620 | 734,005 |
Gross Profit | 493,634 | 576,851 |
Operating Expenses | ||
Salaries and wages (including contractors) | 544,918 | 310,803 |
Other Selling, general and administrative expenses | 590,584 | 368,353 |
Total operating expenses | 1,135,502 | 679,156 |
Loss from operations | (641,868) | (102,305) |
Other Expense | ||
Other expense | (2,548) | (2,958) |
Interest expense | (24,827) | (34,143) |
Total Other Expense | (27,375) | (37,101) |
Net Loss | $ (669,243) | $ (139,406) |
Net Loss Per Share Basic and Diluted | $ (0.01) | $ 0 |
Weighted average shares outstanding Basic and Diluted | 52,381,005 | 41,828,952 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit (unaudited) - USD ($) | Common Stock | Paid-In Capital | Accumulated Deficit | Total |
Begnning Balance, Shares at Dec. 31, 2017 | 41,828,952 | |||
Begnning Balance, Amount at Dec. 31, 2017 | $ 41,829 | $ 1,883,656 | $ (2,579,624) | $ (654,139) |
Convertible debt imputed interest | 25,332 | 25,332 | ||
Net loss | (139,406) | (139,406) | ||
Ending Balance, Shares at Mar. 31, 2018 | 41,828,952 | |||
Ending Balance, Amount at Mar. 31, 2018 | $ 41,829 | 1,908,988 | (2,719,030) | (768,213) |
Begnning Balance, Shares at Dec. 31, 2018 | 48,272,311 | |||
Begnning Balance, Amount at Dec. 31, 2018 | $ 48,272 | 10,661 | (4,519,497) | (4,460,564) |
Convertible debt imputed interest | 22,945 | 22,945 | ||
Cumulative effect of ASU 2016-02 | (2,407) | (2,407) | ||
Common stock issued for debt conversion, Shares | 10,579,661 | |||
Common stock issued for debt conversion, Amount | $ 10,580 | 3,192,920 | 3,203,500 | |
Exercise of common stock warrant, Shares | 2,000,000 | |||
Exercise of common stock warrant, Amount | $ 2,000 | 2,000 | ||
Net loss | (669,243) | (669,243) | ||
Ending Balance, Shares at Mar. 31, 2019 | 60,851,972 | |||
Ending Balance, Amount at Mar. 31, 2019 | $ 60,852 | $ 3,226,526 | $ (5,191,147) | $ (1,903,769) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash Flows from Operating Activities | ||
Net loss | $ (669,243) | $ (139,406) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 266 | 265 |
Imputed interest | 22,945 | 25,332 |
Net change in: | ||
Accounts receivable | (12,554) | |
Inventory | 174,475 | (108,833) |
Prepaid expenses | (100,565) | (25,000) |
Other assets | 1,785 | |
Accounts payable and accrued expenses | (130,474) | (533) |
Deferred revenue | 189,608 | (144,061) |
Net Cash used in Operating Activities | (523,757) | (392,236) |
Cash Flows from Investing Activities | ||
Purchase of property and equipment | ||
Net Cash used in Investing Activities | ||
Cash Flows from Financing Activities | ||
Proceeds from convertible notes payable | 1,575,000 | |
Payments on notes payable | (8,624) | (20,000) |
Proceeds from exercise of common stock warrants | 2,000 | |
Net cash provided by (used in) financing activities | (6,624) | 1,555,000 |
Net Change in Cash and Cash Equivalents | (530,381) | 1,162,764 |
Cash and Cash Equivalents, Beginning of Period | 1,074,105 | 1,146,374 |
Cash and Cash Equivalents, End of Period | 543,724 | 2,309,138 |
Cash Paid For: Income Taxes | ||
Cash Paid For: Interest | ||
Non-cash transactions: | ||
Common stock issued to settle convertible notes payable | 3,203,500 | 100,000 |
Capitalization of right of use asset for operating lease | 44,138 | |
Common stock issued in exchange for marketable securities | $ 200,004 |
Organization and Nature of Oper
Organization and Nature of Operations | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Note 1: Organization and Nature of Operations | Jacksam Corporation (the “Company” or “Jacksam”) was organized under the laws of the State of Nevada on September 21, 1989 under the name Fulton Ventures, Inc. From November 16, 2009, through November 5, 2018, the name was China Grand Resorts Inc. The Company went dormant following its filing of Form 10Q for the period ended September 30, 2018, and remained dormant through September 14, 2018. Effective September 14, 2018, the Company’s wholly-owned subsidiary merged with and into Jacksam Corporation, a Delaware corporation incorporated in August 2013 (the “Merger”). Effective November 5, 2018, the Company merged with its operating subsidiary in a short form merger and changed its name to “Jacksam Corporation.” As a result of the Merger, we acquired and have since been operating the pre-merger business of Jacksam. In accordance with “reverse merger” or “reverse acquisition” accounting treatment, the Company’s historical financial statements as of period ends, and for periods ended, prior to the Merger will be replaced with the historical financial statements of Jacksam, prior to the Merger, in all future filings with the SEC. Jacksam is a technology company focused on developing and commercializing products utilizing a proprietary technology platform. The Company services the medical and recreational cannabis, hemp and CBD segments of the larger e-cigarette and vaporizer markets with oil vaporizer focused products. The Company has two principal product lines consisting of vape cartridges, batteries, and other consumables, coupled with filling and capping machines. Customers are primarily businesses operating in jurisdictions that have some form of cannabis legalization. These businesses include medical and recreational dispensaries, large and small scale processors and growers, and distributors. The Company expects continued growth as they take measures to invest in their own molds and intellectual property. The Company operates and sells products from the website www.Convectium.com. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Note 2: Significant Accounting Policies | Basis of Preparation The interim unaudited consolidated financial statements as of March 31, 2019, and for the three months ended March 31, 2019 and 2018, have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. They do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company’s audited financial statements and notes filed with the SEC for the year ended December 31, 2018. Inventory Inventories are stated at the lower of cost, determined on the first-in, first-out (FIFO) method or net realizable value. Cost principally consists of the purchase price (adjusted for lower of cost or market), customs, duties, and freight. The Company periodically reviews historical sales activity to determine potentially obsolete items and evaluates the impact of any anticipated changes in future demand. The March 31, 2019 and December 31, 2018 inventory consisted entirely of finished goods, $589,620 and $764,095, respectively. The Company will maintain an allowance based on specific inventory items that have shown no activity over a 24-month period. The Company tracks inventory as it is disposed, scrapped or sold at below cost to determine whether additional items on hand should be reduced in value through an allowance method. As of March 31, 2019, and December 31, 2018, the Company has determined that no allowance is required. Revenue Recognition The Company derives revenues from the sale of machines and product income. Revenues are recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods or services. Revenue is recognized based on the following five step model: - Identification of the contract with a customer - Identification of the performance obligations in the contract - Determination of the transaction price - Allocation of the transaction price to the performance obligations in the contract - Recognition of revenue when, or as, the Company satisfies a performance obligation Performance Obligations Sales of machines and consumable products are recognized when all the following criteria are satisfied: (i) a contract with an end user exists which has commercial substance; (ii) it is probable the Company will collect the amount charged to the end user; and (iii) the Company has completed its performance obligation whereby the end user has obtained control of the product. A contract with commercial substance exists once the Company receives and accepts a purchase order or once it enters into a contract with an end user. If collectability is not probable, the sale is deferred and not recognized until collection is probable or payment is received. Control of products typically transfers when title and risk of ownership of the product has transferred to the customer. The customer has a 10 day period to inspect the equipment and may return the product if it does not meet the agreed-upon specifications. For contracts with multiple performance obligations, the Company allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. The Company uses an observable price to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach when one is not available. Historically the Company’s contracts have not had multiple performance obligations. The large majority of the Company’s performance obligations are recognized at a point in time related to the sale of machines and consumable products. Sales, value add, and other taxes collected concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. Payment terms between invoicing and when payment is due is less than one year. As of March 31, 2019, none of the Company’s contracts contained a significant financing component. The Company elected the practical expedient to not adjust the amount of revenue to be recognized under a contract with an end user for the effects of time value of money when the timing difference between receipt of payment and recognition of revenue is less than one year. The majority of the Company’s contracts offer an assurance-type warranty of the products at no additional cost for a period of 3 years. Assurance-type warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Such warranties do not represent a separate performance obligation. At the time a sale is recognized, the Company estimated future warranty costs, which were trivial. Transaction Price Allocated to the Remaining Performance Obligations At a given point in time, the Company may have collected payment for future sales of product to begin production. These transactions are deferred until the product transfers to the customer and the performance obligation is considered complete. At March 31, 2019, $1,096,572 in revenue is expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. The Company expects to recognize all of our unsatisfied (or partially unsatisfied) performance obligations as revenue in the next twelve months. Contract Costs Costs incurred to obtain a customer contract are not material to the Company. The Company elected to apply the practical expedient to not capitalize contract costs to obtain contracts with a duration of one year or less, which are expensed and included within cost of goods and services. Critical Accounting Estimates Estimates are used to determine the amount of variable consideration in contracts, the standalone selling price among separate performance obligations and the measure of progress for contracts where revenue is recognized over time. The Company reviews and updates these estimates regularly. Disaggregation of Revenue All machine sales and most consumable products sales are completed in North America. Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Machine sales $ 643,002 $ 773,405 Consumable product sales 981,252 537,451 Total sales $ 1,624,254 $ 1,310,856 Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Potential common stock equivalents are determined using the treasury stock method. For diluted net loss per share purposes, the Company excludes stock options and other stock-based awards, including shares issued as a result of option exercises but which are subject to repurchase by the Company, whose effect would be anti-dilutive from the calculation. During the years ended December 31, 2018 and 2017, common stock equivalents were excluded from the calculation of diluted net loss per common share, as their effect was anti-dilutive due to the net loss incurred. Therefore, basic and diluted net loss per share was the same in all periods presented. The Company had 3,075,000 and 15,654,660 potentially dilutive securities that have been excluded from the computation of diluted weighted-average shares outstanding as of March 31, 2019 and December 31, 2018, as they would be anti-dilutive. Going Concern The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has negative working capital, recurring losses, and does not have a source of revenues sufficient to cover its operating costs. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon its ability to successfully execute the business plan and attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern. In the coming year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with operations and business developments. The Company may experience a cash shortfall and be required to raise additional capital. Historically, it has mostly relied upon convertible notes payable and cash flows from operations to finance its operations and growth. Management may raise additional capital by retaining net earnings or through future private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon it and its shareholders. Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the effect of recently issued standards that are not yet effective will not have a material effect on its consolidated financial position or results of operations upon adoption. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02). Under ASU No. 2016-2, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU No. 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. For public companies, The Company adopted this standard on January 1, 2019 using the modified retrospective method. The new standard provides a number of optional practical expedients in transition. The Company elected the ‘package of practical expedients’, which permitted the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs; and all of the new standard’s available transition practical expedients. On adoption, the Company recognized a right of use asset of $44,138, operating lease liabilities of $46,545 with a cumulative effect adjustment to accumulated deficit of $2,407, based on the present value of the remaining minimum rental payments under current leasing standards for its existing operating lease. The new standard also provides practical expedients for a company’s ongoing accounting. The Company elected the short-term lease recognition exemption for its leases. For those leases with a lease term of 12 months or less, the Company will not recognize ROU assets or lease liabilities. |
Property and equipment
Property and equipment | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Note 3: Property and equipment | Property and equipment consisted of the following: March 31, 2019 December 31, 2018 Furniture and Fixtures $ 10,425 $ 10,425 Equipment 7,579 7,579 Trade Show Display 2,640 2,640 Total 20,644 20,644 Less: Accumulated Depreciation (6,564 ) (6,298 ) Property and Equipment net $ 14,080 $ 14,346 Depreciation expense amounted to $265 and $265 for the three months ended March 31, 2019 and 2018, respectively. |
Accounts payable and accrued ex
Accounts payable and accrued expenses | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Note 4: Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following: March 31, 2019 December 31, 2018 Accounts payable $ 288,953 $ 456,163 Credit cards payable 22,967 24,517 Accrued interest 1,556 1,049 Sales tax payable 92,051 54,272 Other 1,600 1,600 Total Accounts payable and Accrued expenses $ 407,127 $ 537,601 |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Note 5: Notes Payable | A summary of Notes Payable are as follows: March 31, 2019 December 31, 2018 Note payable dated November 21, 2016, bearing interest at 12% per annum, due February 21, 2017, currently past due 62,288 70,912 Total notes payable 62,288 70,912 Less: current portion 62,288 70,912 Long term portion of notes payable $ - $ - As of March 31, 2019 and December 31, 2018, accrued interest on these loan outstanding balances for $1,566 and $1,049, respectively. |
Convertible Notes Payable
Convertible Notes Payable | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Note 6: Convertible Notes Payable | In December 2017, the Company issued non-interest bearing convertible debentures to 36 investors in exchange for $1,643,500 (the “2017 Notes”). The 2017 Notes have a three-year term and are convertible into the Company’s common stock at a per share price of $0.20 at any time subsequent to the issuance date. On the maturity date, if not previously converted, the 2017 Notes are subject to a mandatory conversion to the Company’s common stock. In January 2018, the Company issued non-interest bearing convertible notes with the same terms as the 2017 Notes in exchange for an additional $75,000. The Company determined that the 2017 Notes qualified as conventional convertible instruments. The Company evaluated the conversion feature and determined that no beneficial conversion feature existed on the issuance dates. During the quarter ended March 31, 2019 the Company issued 8,517,500 shares of common stock to convert $1,703,500 of these notes payable. As of March 31, 2019, the remaining outstanding balance of these notes is $15,000. In March 2018, the Company issued non-interest bearing convertible notes to two investors in exchange for $1,500,000 (the “2018 Notes”). The 2018 Notes have a one-year term and are convertible into the Company’s common stock at a per share price of $0.73 at any time subsequent to the issuance date. Upon either the maturity date or a successful financing involving the Company’s common stock or a financial instrument convertible into common stock at a valuation of $45,000,000 or more, the 2018 Notes are subject to mandatory conversion to the Company’s common stock, if not previously converted. The Company determined that the 2018 Notes qualified as conventional convertible instruments. Further the Company evaluated the conversion feature and determined that there was no beneficial conversion feature or derivative liabilities. During the quarter ended March 31, 2019 the Company issued 2,062,161 shares of common stock to convert these notes in full. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Note 7: Equity | Common Stock As of March 31, 2019, the authorized capital stock of the Company consists of 100,000,000 shares, of which 90,000,000 shares are designated as common stock and 10,000,000 shares of preferred stock. For the three months ended March 31, 2019: During the three months ended March 31, 2019, the Company had convertible debentures with a 0% stated interest rate outstanding. As a result, imputed interest was calculated based on a 4% rate and recorded to equity in the amount of $22,945. During the three months ended March 31, 2019, the Company issued 10,579,661 shares of common stock related to the conversion of $3,203,500 of Convertible Notes Payable. During the three months ended March 31, 2019, the Company received $2,000 related to the exercise of 2,000,000 stock warrants. Stock Warrants A summary of stock warrant information is as follows: Aggregate Number Aggregate Exercise Price Weighted Average Exercise Price Outstanding at December 31, 2018 5,000,000 5,000 0.001 Granted - - - Exercised (2,000,000 ) 2,000 0.001 Forfeited and cancelled - - - Outstanding at March 31, 2019 3,000,000 $ 3,000 $ 0.001 The weighted average remaining contractual life is approximately 1.9 years for stock warrants outstanding with a total intrinsic value of $4,947,000 on March 31, 2019. All of the above warrants were fully vested. |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Note 8: Commitments | Employment Agreements In December 2017, the Company entered into employment agreement with each of Daniel Davis and Mark Adams. As of the Effective Date, and for one year of the date therefrom, the Executive’s annual salary shall be equal to $180,000 and $120,000, respectively, per annum (the “Annual Salary”). The Annual Salary shall be paid to the Executive in equal installments in accordance with the Company’s usual payroll practices. Executive’s Annual Salary shall increase automatically at the rate of five percent (5%) per year for four years, beginning on the anniversary date of the Effective Date. In addition to the automatic raises set forth above, the Annual Salary may also be increased from time to time by merit and general increases in amounts determined by the Board. Performance Bonus. In addition to the Annual Salary, the Executive is eligible to earn an annual bonus of up to thirty percent (30%) of Executive’s Annual Salary (the “Performance Bonus”). The amount of the Performance Bonus will be determined in good faith by the Board, based upon the following factors: (a) Fifty percent (50%) of the Performance Bonus shall be based upon the achievement of the Executive’s individual objectives, as defined in writing and presented to Executive annually by the Board. (b) Fifty percent (50%) of the Performance Bonus shall be based upon the achievement of Company objectives – which shall include specifically, meeting or exceeding the revenue targets and other objectives as determined by the Board. The initial set of performance objectives, both for Executive individually and for the Company, will be reasonably established by the Board within sixty (60) days of the Effective Date of this Agreement. Subsequent performance objectives, both for Executive individually and for the Company, will be reasonably established by the Board within sixty (60) days of the beginning of the calendar year to which the Performance Bonus relates. The Performance Bonus shall be paid to Executive in the first regular payroll period after the Board makes a good faith determination that such Performance Bonus has been earned, but in no event shall the Performance Bonus be paid later than March 1 of the calendar year immediately following the calendar year in which the bonus was earned. Executive. In addition to salary, the agreement provided for the option of 1,000,000 common shares of the Company, which shall vest at a rate of 28,000 share for each full one-month period worked from the effective date. If this Agreement is terminated pursuant to written notice by company to executive on or before the date that is one year after the Effective Date, all the options shall vest and the Executive shall retain the options subject to their terms and the terms hereof. The options may contain terms providing the issuer the right to accelerate vesting and/or require the exercise of options prior to the initial public offering and listing of the issuer. The Company may arrange for the grant of additional options to the Executive from time to time based on the Executive’s performance and other relevant factors as the Board may determine in its discretion. All options to purchase Holdings Shares granted to the Executive shall be subject to the terms of the stock option agreement pursuant to which they are granted and the terms of the stock option plan under which they are granted in effect from time to time. Shares issuable on exercise of the options shall be subject to any escrow, trading restriction, or other requirement imposed by any stock exchange or securities regulatory authority upon initial public offering or listing of the shares. The Executive shall take such steps and execute and deliver such documents as may be required to effect the foregoing. The Company may terminate Executive’s employment for Cause immediately upon Notice from the Company to Executive. For purposes of this Agreement, “Cause” shall mean the occurrence of any of the following: (i) Executive’s conviction of or plea of nolo contendere to any felony crime involving fraud, dishonesty, or moral turpitude; (ii) Executive’s commission of, or participation in, a fraud against the Company. In the event Executive’s employment is terminated for Cause, the Company shall have no further obligations to Executive other than to pay all compensation and expense reimbursements owing for services rendered and reasonable business expenses incurred by Executive prior to the effective date of such termination. Upon termination of this Agreement pursuant, the Company shall provide to the Executive: (a) A lump sum payment equal to the greater of (i) twelve (12) months’ Annual Salary at the Executive’s then- current rate, or (ii) Executive’s Annual Salary for the remainder of the Term; (b) if applicable, to the extent permitted by the Company’s group insurance carrier and applicable law, continued group insurance benefits coverage, together with reimbursement of the individual life insurance premium for the period of time equal to the number of months in respect of which payment is due pursuant and (c) any other amounts (including but not limited to any earned Performance Bonus during Executive’s active employment that may be payable pursuant to this Agreement) accrued and earned by Executive prior to the effective date of termination. If a Change of Control occurs and the Executive is not offered continued employment on a comparable basis after the Change of Control, the Executive shall be entitled to receive, within thirty (30) days after the Change of Control, a sum equivalent to twelve (12) months’ Annual Salary, plus an additional 4% of Annual Salary in lieu of benefits, and any Performance Bonus that has been earned by Executive prior to the effective date of the Executive’s termination from the Company. Thereafter, the Company shall have no further obligations to the Executive under this Agreement other than payment of any other amounts accrued as owing to the Executive under this Agreement as of the date the Change of Control occurs. Leases The Company has a single operating lease for an office lease in Rancho Santa Margarita, California with an initial term of 37 months. Base monthly rent is approximately $3,200 per month plus net operating expenses. A deposit equal to one-month rent was paid and the commencement of the lease. The lease can be extended for a two-year period at the then fair market value. The lease contains variable lease payments for non-rental occupancy expenses. These non-lease components were not included in the determination of the right of use asset and lease liability as part of the transition to ASC 842 due to the practical expedients elected by the Company. The Company utilizes the incremental borrowing rate in determining the present value of lease payments unless the implicit rate is readily determinable. The Company used an estimated incremental borrowing rate of 10% to estimate the present value of the right of use liability. The Company has right-of-use assets of $35,767 and operating lease liabilities of $41,159 as of March 31, 2019. Operating lease expense for the three months ended March 31, 2019 was $9,463. The company had cash used in operating activities related to leases of $6,479 during the three months ended March 31, 2019. The lease has a remaining term of 1 year. The following table provides the maturities of lease liabilities at March 31, 2019: Maturity of Lease Liabilities at March 31, 2019 2019 $ 33,243 2020 10,001 2021 - 2022 - 2023 - 2024 and thereafter - Total future undiscounted lease payments 43,244 Less: Interest (2,085 ) Present value of lease liabilities $ 41,159 Minimum lease payments under the Company’s operating lease under ASC 840 as of December 31, 2018 for 2019 and 2020 were $48,968 and $20,600, respectively The Company also maintains short-term rental agreements for certain storage facilities. Total rent expense for these rentals was $5,948 for the three months ended March 31, 2019. Total rent expense for the three months ended March 31, 2018 was $15,789. |
Accrued Liabilities - Other
Accrued Liabilities - Other | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Note 9: Accrued Liabilities - Other | Prior to the Merger, China Grand Resorts, Inc., recorded various liabilities that were incurred by former related parties. The current management team is not aware of any written agreements in place governing the terms of the loans nor have they been in contact with the debt holders however recognizes that China Grand Resorts, Inc. previously reported these amounts as liabilities of the Company. In accordance with ASC 405-20-40 the liabilities may only be removed from the Company’s financial statements if they are paid, formally settled or judicially released. Management believes the relevant statute of limitations has passed and that no enforceable legal claim exists in relation to these liabilities of $1,642,118 but does not believe that is sufficient to remove the liability from the financial statements. Management does not intend to remove these liabilities, $1,642,118, from the Company’s financial statements until such time that the liability is formally settled or judicially released in accordance with ASC 405-20-40. Due to the lack of written agreements and other factors noted above management concluded to no longer accrue interest on these loans. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Note 10: Subsequent Events | Subsequent to quarter-end, on April 24, 2019, the Company terminated Daniel Davis as an Officer, Director and employee. On April 3, 2019, 2,000,000 shares were issued, for the warrants exercised in the quarter, see note 7. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Significant Accounting Policies | |
Basis of Preparation | The interim unaudited consolidated financial statements as of March 31, 2019, and for the three months ended March 31, 2019 and 2018, have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. They do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company’s audited financial statements and notes filed with the SEC for the year ended December 31, 2018. |
Inventory | Inventories are stated at the lower of cost, determined on the first-in, first-out (FIFO) method or net realizable value. Cost principally consists of the purchase price (adjusted for lower of cost or market), customs, duties, and freight. The Company periodically reviews historical sales activity to determine potentially obsolete items and evaluates the impact of any anticipated changes in future demand. The March 31, 2019 and December 31, 2018 inventory consisted entirely of finished goods, $589,620 and $764,095, respectively. The Company will maintain an allowance based on specific inventory items that have shown no activity over a 24-month period. The Company tracks inventory as it is disposed, scrapped or sold at below cost to determine whether additional items on hand should be reduced in value through an allowance method. As of March 31, 2019, and December 31, 2018, the Company has determined that no allowance is required. |
Revenue Recognition | The Company derives revenues from the sale of machines and product income. Revenues are recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods or services. Revenue is recognized based on the following five step model: - Identification of the contract with a customer - Identification of the performance obligations in the contract - Determination of the transaction price - Allocation of the transaction price to the performance obligations in the contract - Recognition of revenue when, or as, the Company satisfies a performance obligation Performance Obligations Sales of machines and consumable products are recognized when all the following criteria are satisfied: (i) a contract with an end user exists which has commercial substance; (ii) it is probable the Company will collect the amount charged to the end user; and (iii) the Company has completed its performance obligation whereby the end user has obtained control of the product. A contract with commercial substance exists once the Company receives and accepts a purchase order or once it enters into a contract with an end user. If collectability is not probable, the sale is deferred and not recognized until collection is probable or payment is received. Control of products typically transfers when title and risk of ownership of the product has transferred to the customer. The customer has a 10 day period to inspect the equipment and may return the product if it does not meet the agreed-upon specifications. For contracts with multiple performance obligations, the Company allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. The Company uses an observable price to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach when one is not available. Historically the Company’s contracts have not had multiple performance obligations. The large majority of the Company’s performance obligations are recognized at a point in time related to the sale of machines and consumable products. Sales, value add, and other taxes collected concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. Payment terms between invoicing and when payment is due is less than one year. As of March 31, 2019, none of the Company’s contracts contained a significant financing component. The Company elected the practical expedient to not adjust the amount of revenue to be recognized under a contract with an end user for the effects of time value of money when the timing difference between receipt of payment and recognition of revenue is less than one year. The majority of the Company’s contracts offer an assurance-type warranty of the products at no additional cost for a period of 3 years. Assurance-type warranties provide a customer with assurance that the related product will function as the parties intended because it complies with agreed-upon specifications. Such warranties do not represent a separate performance obligation. At the time a sale is recognized, the Company estimated future warranty costs, which were trivial. Transaction Price Allocated to the Remaining Performance Obligations At a given point in time, the Company may have collected payment for future sales of product to begin production. These transactions are deferred until the product transfers to the customer and the performance obligation is considered complete. At March 31, 2019, $1,096,572 in revenue is expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. The Company expects to recognize all of our unsatisfied (or partially unsatisfied) performance obligations as revenue in the next twelve months. Contract Costs Costs incurred to obtain a customer contract are not material to the Company. The Company elected to apply the practical expedient to not capitalize contract costs to obtain contracts with a duration of one year or less, which are expensed and included within cost of goods and services. Critical Accounting Estimates Estimates are used to determine the amount of variable consideration in contracts, the standalone selling price among separate performance obligations and the measure of progress for contracts where revenue is recognized over time. The Company reviews and updates these estimates regularly. Disaggregation of Revenue All machine sales and most consumable products sales are completed in North America. Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Machine sales $ 643,002 $ 773,405 Consumable product sales 981,252 537,451 Total sales $ 1,624,254 $ 1,310,856 |
Net Loss Per Common Share | Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Potential common stock equivalents are determined using the treasury stock method. For diluted net loss per share purposes, the Company excludes stock options and other stock-based awards, including shares issued as a result of option exercises but which are subject to repurchase by the Company, whose effect would be anti-dilutive from the calculation. During the years ended December 31, 2018 and 2017, common stock equivalents were excluded from the calculation of diluted net loss per common share, as their effect was anti-dilutive due to the net loss incurred. Therefore, basic and diluted net loss per share was the same in all periods presented. The Company had 3,075,000 and 15,654,660 potentially dilutive securities that have been excluded from the computation of diluted weighted-average shares outstanding as of March 31, 2019 and December 31, 2018, as they would be anti-dilutive |
Going Concern | The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has negative working capital, recurring losses, and does not have a source of revenues sufficient to cover its operating costs. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon its ability to successfully execute the business plan and attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern. In the coming year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with operations and business developments. The Company may experience a cash shortfall and be required to raise additional capital. Historically, it has mostly relied upon convertible notes payable and cash flows from operations to finance its operations and growth. Management may raise additional capital by retaining net earnings or through future private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon it and its shareholders. |
Recently Issued Accounting Pronouncements | From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the effect of recently issued standards that are not yet effective will not have a material effect on its consolidated financial position or results of operations upon adoption. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02). Under ASU No. 2016-2, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU No. 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. For public companies, The Company adopted this standard on January 1, 2019 using the modified retrospective method. The new standard provides a number of optional practical expedients in transition. The Company elected the ‘package of practical expedients’, which permitted the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs; and all of the new standard’s available transition practical expedients. On adoption, the Company recognized a right of use asset of $44,138, operating lease liabilities of $46,545 with a cumulative effect adjustment to accumulated deficit of $2,407, based on the present value of the remaining minimum rental payments under current leasing standards for its existing operating lease. The new standard also provides practical expedients for a company’s ongoing accounting. The Company elected the short-term lease recognition exemption for its leases. For those leases with a lease term of 12 months or less, the Company will not recognize ROU assets or lease liabilities. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Significant Accounting Policies | |
Schedule of disaggregation of revenue | Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Machine sales $ 643,002 $ 773,405 Consumable product sales 981,252 537,451 Total sales $ 1,624,254 $ 1,310,856 |
Furniture and Equipment (Tables
Furniture and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Furniture And Equipment | |
Schedule of property and equipment | March 31, 2019 December 31, 2018 Furniture and Fixtures $ 10,425 $ 10,425 Equipment 7,579 7,579 Trade Show Display 2,640 2,640 Total 20,644 20,644 Less: Accumulated Depreciation (6,564 ) (6,298 ) Property and Equipment net $ 14,080 $ 14,346 |
Accounts payable and accrued _2
Accounts payable and accrued expenses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounts Payable And Accrued Expenses | |
Schedule of accounts payable and accrued expenses | March 31, 2019 December 31, 2018 Accounts payable $ 288,953 $ 456,163 Credit cards payable 22,967 24,517 Accrued interest 1,556 1,049 Sales tax payable 92,051 54,272 Other 1,600 1,600 Total Accounts payable and Accrued expenses $ 407,127 $ 537,601 |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Notes Payable Tables Abstract | |
Summary of Notes Payable | March 31, 2019 December 31, 2018 Note payable dated November 21, 2016, bearing interest at 12% per annum, due February 21, 2017, currently past due 62,288 70,912 Total notes payable 62,288 70,912 Less: current portion 62,288 70,912 Long term portion of notes payable $ - $ - |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity | |
Summary of stock option and stock warrant | Aggregate Number Aggregate Exercise Price Weighted Average Exercise Price Outstanding at December 31, 2018 5,000,000 5,000 0.001 Granted - - - Exercised (2,000,000 ) 2,000 0.001 Forfeited and cancelled - - - Outstanding at March 31, 2019 3,000,000 $ 3,000 $ 0.001 |
Commitments (Tables)
Commitments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity | |
Schedule of maturities of lease liabilities | Maturity of Lease Liabilities at March 31, 2019 2019 $ 33,243 2020 10,001 2021 - 2022 - 2023 - 2024 and thereafter - Total future undiscounted lease payments 43,244 Less: Interest (2,085 ) Present value of lease liabilities $ 41,159 |
Organization and Nature of Op_2
Organization and Nature of Operations (Details Narrative) | 3 Months Ended |
Mar. 31, 2019 | |
Organization And Nature Of Operations | |
State of Incorporation | Nevada |
Date of Incorporation | Sep. 21, 1989 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Significant Accounting Policies Details Narrative Abstract | ||
Machine sales | $ 643,002 | $ 773,405 |
Consumable product sales | 981,252 | 537,451 |
Total sales | $ 1,624,254 | $ 1,310,856 |
Significant Accounting Polici_5
Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Significant Accounting Policies Details Narrative Abstract | ||
Finished goods | $ 589,620 | $ 764,095 |
Potentially dilutive securities | 3,075,000 | 15,654,660 |
Term of assurance-type warranty, description | 3 years | |
Revenue to be recognized in future periods related to performance obligations | $ 1,096,572 | |
Right of use asset | 44,138 | |
Operating lease liabilities | 41,159 | |
Accumulated deficit | $ 2,407 |
Furniture and Equipment (Detail
Furniture and Equipment (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Total | $ 20,644 | $ 20,644 |
Less: Accumulated Depreciation | (6,564) | (6,298) |
Property and Equipment net | 14,080 | 14,346 |
Furniture and Fixtures [Member] | ||
Total | 10,425 | 10,425 |
Equipment [Member] | ||
Total | 7,579 | 7,579 |
Trade Show Display [Member] | ||
Total | $ 2,640 | $ 2,640 |
Furniture and Equipment (Deta_2
Furniture and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property And Equipment Details Narrative Abstract | ||
Depreciation expense | $ 266 | $ 265 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Total Accounts payable and Accrued expenses | $ 407,127 | $ 537,601 |
Accounts Payable [Member] | ||
Total Accounts payable and Accrued expenses | 288,953 | 456,163 |
Credit Cards Payable [Member] | ||
Total Accounts payable and Accrued expenses | 22,967 | 24,517 |
Accrued Interest [Member] | ||
Total Accounts payable and Accrued expenses | 1,556 | 1,049 |
Sales Tax Payable [Member] | ||
Total Accounts payable and Accrued expenses | 92,051 | 54,272 |
Other [Member] | ||
Total Accounts payable and Accrued expenses | $ 1,600 | $ 1,600 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Total notes payable | $ 62,288 | $ 70,912 |
Less: current portion | 62,288 | 70,912 |
Long term portion of notes payable | ||
Notes Payable [Member] | ||
Total notes payable | $ 62,288 | $ 70,912 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Notes Payable Details Narrative Abstract | ||
Accrued interest | $ 1,566 | $ 1,049 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) | 1 Months Ended | 3 Months Ended | ||||
Mar. 31, 2018USD ($)Number$ / shares | Jan. 31, 2018USD ($) | Dec. 31, 2017USD ($)Number$ / shares | Mar. 31, 2019USD ($)shares | Mar. 31, 2018$ / sharesshares | Dec. 31, 2018USD ($) | |
Debt instrument converted amount | $ 1,703,500 | |||||
Common stock shares issued for conversion of debt | shares | 8,517,500 | 2,062,161 | ||||
Convertible notes payable, current portion | $ 15,000 | $ 3,218,500 | ||||
Convertible Debentures (2017 Notes) [Member] | Investors [Member] | ||||||
Number of investors | Number | 36 | |||||
Proceeds from issuance of convertible debt | $ 1,643,500 | |||||
Maturity period | 3 years | |||||
Conversion price | $ / shares | $ 0.20 | |||||
Terms of conversion feature | On the maturity date, if not previously converted, the 2017 Notes are subject to a mandatory conversion to the Company’s common stock | |||||
Convertible notes (2017 Notes) [Member] | Investors [Member] | ||||||
Proceeds from issuance of convertible debt | $ 75,000 | |||||
Convertible Notes (2018 Notes) [Member] | Investors [Member] | ||||||
Number of investors | Number | 2 | |||||
Proceeds from issuance of convertible debt | $ 1,500,000 | |||||
Maturity period | 1 year | |||||
Conversion price | $ / shares | $ 0.73 | $ 0.73 | ||||
Terms of conversion feature | Upon either the maturity date or a successful financing involving the Company’s common stock or a financial instrument convertible into common stock at a valuation of $45,000,000 or more, the 2018 Notes are subject to mandatory conversion to the company’s common stock, if not previously converted |
Equity (Details)
Equity (Details) - Stock Options and Warrants [Member] | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Aggregate Number | |
Outstanding, beginning | shares | 5,000,000 |
Granted | shares | |
Exercised | shares | (2,000,000) |
Forfeited and cancelled | shares | |
Outstanding, ending | shares | 3,000,000 |
Aggregate Exercise Price | |
Outstanding, beginning | $ | $ 5,000 |
Granted | $ | |
Exercised | $ | 2,000 |
Forfeited and cancelled | $ | |
Outstanding, ending | $ | $ 3,000 |
Weighted Average Exercise Price | |
Outstanding, beginning | $ / shares | $ 0.001 |
Granted | $ / shares | |
Exercised | $ / shares | 0.001 |
Expired | $ / shares | |
Outstanding, ending | $ / shares | $ 0.001 |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Equity Details Narrative Abstract | |||
Capital stock, shares authorized | 100,000,000 | ||
Common stock, shares authorized | 90,000,000 | 90,000,000 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |
Imputed interest | $ 22,945 | $ 25,332 | |
Imputed interest percentage | 4.00% | ||
Common stock issued for debt conversion, value | $ 3,203,500 | ||
Excersie of stock options, Amount | $ 2,000 | ||
Weighted average remaining contractual life | 1 year 10 months 25 days | ||
Total intrinsic value | $ 4,947,000 | ||
Convertible debentures stated interest rate | 0.00% |
Commitments (Details)
Commitments (Details) | Mar. 31, 2019USD ($) |
Maturity of Lease Liabilities at March 31, 2019 | |
2019 | $ 33,243 |
2020 | 10,001 |
2021 | |
2022 | |
2023 | |
2024 and thereafter | |
Total future undiscounted lease payments | 43,244 |
Less: Interest | (2,085) |
Present value of lease liabilities | $ 41,159 |
Commitments (Details Narrative)
Commitments (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Dec. 31, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Operating lease monthly rent expenses | $ 3,200 | |||
Operating lease expenses | $ 5,948 | $ 15,789 | ||
Operating lease contract term | 37 months | |||
Incremental borrowing rate | 10.00% | |||
Right of-use asset - operating lease | $ 35,767 | |||
Operating lease liabilities | $ 41,159 | |||
Operating lease remaining term | 1 year | |||
Operating lease expense | $ 9,463 | |||
Cash used in operating activities related to leases | $ 6,479 | |||
Operating lease future minimum payments, 2019 | 48,968 | |||
Operating lease future minimum payments, 2020 | $ 20,600 | |||
Description for the extention of the lease term | The lease can be extended for a two-year period at the then fair market value | |||
Employment Agreement [Member] | ||||
Executive salary description | Executives Annual Salary shall increase automatically at the rate of five percent (5%) per year for four years, beginning on the anniversary date of the Effective Date. In addition to the automatic raises set forth above, the Annual Salary may also be increased from time to time by merit and general increases in amounts determined by the Board. | |||
Performance bonus | 30.00% | |||
Performance bonus based upon achievement of executives individual objectives | 50.00% | |||
Performance bonus based upon achievement of Company objectives | 50.00% | |||
Description for initial set of performance objectives | The initial set of performance objectives, both for Executive individually and for the Company, will be reasonably established by the Board within sixty (60) days of the Effective Date of this Agreement. Subsequent performance objectives, both for Executive individually and for the Company, will be reasonably established by the Board within sixty (60) days of the beginning of the calendar year to which the Performance Bonus relates | |||
Description for the amount payable upon termination of the agreement | A lump sum payment equal to the greater of (i) twelve (12) months' Annual Salary at the Executive's then- current rate, or (ii) Executive's Annual Salary for the remainder of the Term | |||
Description for change in control upon termination of agreement | If a Change of Control occurs and the Executive is not offered continued employment on a comparable basis after the Change of Control, the Executive shall be entitled to receive, within thirty (30) days after the Change of Control, a sum equivalent to twelve (12) months Annual Salary, plus an additional 4% of Annual Salary in lieu of benefits, and any Performance Bonus that has been earned by Executive prior to the effective date of the Executives termination from the Company. | |||
Employment Agreement [Member] | Option [Member] | ||||
Description for issuance and vesting of options under agreement | Executive. In addition to salary, the agreement provided for the option of 1,000,000 common shares of the Company, which shall vest at a rate of 28,000 share for each full one-month period worked from the effective date. | |||
Employment Agreement [Member] | Daniel Davis [Member] | ||||
Annual salary | $ 180,000 | |||
Employment Agreement [Member] | Mark Adams [Member] | ||||
Annual salary | $ 120,000 |
Accrued Liabilities - Other (De
Accrued Liabilities - Other (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Accrued Liabilities - Other | ||
Accrued Liabilities - other | $ 1,642,118 | $ 1,642,118 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Apr. 03, 2019shares |
Subsequent Event [Member] | |
Shares issued | 2,000,000 |