Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 30, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | American Cannabis Company, Inc. | |
Entity Central Index Key | 945,617 | |
Document Type | S1 | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 46,663,474 | |
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets | |||
Cash and cash equivalents | $ 228,654 | $ 555,780 | $ 165,213 |
Accounts receivable, net | 151,736 | 48,285 | 57,642 |
Deposits | 6,500 | 9,345 | 181,941 |
Inventory | 67,728 | 67,435 | 44,606 |
Prepaid expenses and other current assets | 50,763 | 32,117 | 12,325 |
Total current assets | 505,381 | 712,962 | 461,727 |
Property and equipment-Cost | 20,247 | 18,585 | 9,927 |
Accumulated depreciation | (7,614) | (5,137) | (1,562) |
Property and equipment, net | 12,633 | 13,448 | 8,365 |
Other Assets | |||
Deposits | 4,500 | 4,500 | 0 |
Total Other Assets | 4,500 | 4,500 | 0 |
Total assets | 522,514 | 730,910 | 470,092 |
Current liabilities | |||
Accounts payable | 71,843 | 218,334 | 62,136 |
Advances from clients | 115,550 | 220,966 | 173,528 |
Convertible note, net of discount | 139,065 | 60,252 | 24,551 |
Accrued and other current liabilities | 71,750 | 93,468 | 125,518 |
Total current liabilities | 398,208 | 593,020 | 385,733 |
Total liabilities | 398,208 | 593,020 | 385,733 |
Stockholders equity | |||
Common stock, $0.00001 par value; 100,000,000 shares authorized; 44,808,731 and 44,518,750 issued and outstanding at December 31, 2015 and December 31, 2014, respectively | 465 | 448 | 446 |
Common stock to be issued, 898,940 and 30,000 shares, respectively | |||
Additional paid-in capital | 4,353,439 | 4,268,708 | 3,699,526 |
Accumulated deficit | (4,229,598) | (4,131,266) | (3,615,613) |
Total stockholders equity | 124,306 | 137,890 | 84,359 |
Total liabilities and stockholders' equity | $ 522,514 | $ 730,910 | $ 470,092 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | |||
Common stock Par Value | $ 0.00001 | $ .00001 | $ 0.00001 |
Common Stock Shares Authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common Stock Shares Issued | 46,585,814 | 44,808,731 | 44,518,750 |
Common Stock Shares Outstanding | 46,585,814 | 44,808,731 | 44,518,750 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues | ||||||
Consulting services | $ 211,863 | $ 268,488 | $ 459,473 | $ 464,058 | $ 693,225 | $ 677,633 |
Products and equipment | 231,785 | 200,257 | 524,579 | 448,354 | 2,106,662 | 581,379 |
Total revenues | 443,648 | 468,745 | 984,052 | 912,412 | 2,799,887 | 1,259,012 |
Costs of revenues | ||||||
Cost of consulting services | 51,278 | 88,632 | 99,800 | 146,483 | 182,161 | 322,134 |
Cost of products and equipment | 145,848 | 176,347 | 380,857 | 401,998 | 1,817,952 | 449,342 |
Total cost of revenues | 197,126 | 264,979 | 480,657 | 548,481 | 2,000,113 | 771,476 |
Gross profit | 246,522 | 203,766 | 503,395 | 363,931 | 799,774 | 487,536 |
Operating expenses | ||||||
General and administrative | 307,953 | 130,454 | 531,440 | 252,578 | 687,082 | 3,652,181 |
Investor Relations | 893 | 56,286 | 18,068 | 187,702 | 307,069 | 23,132 |
Selling and marketing | 19,662 | 113,224 | 40,477 | 207,529 | 307,474 | 190,164 |
Research and development | 1,413 | 11,350 | 1,413 | 41,722 | 51,115 | 12,863 |
Total Operating expenses | 329,921 | 311,314 | 591,398 | 689,531 | 1,352,740 | 3,878,340 |
Loss from Operations | (83,399) | (107,548) | (88,003) | (325,600) | (552,966) | (3,390,804) |
Other income (expense) | ||||||
Gain on extinguishment of debt | 72,771 | 72,771 | 72,771 | 35,000 | ||
Interest Income (expense) | (1,376) | (8,837) | (10,329) | (17,623) | (35,458) | (263,388) |
Total Other Income (expense) | (1,376) | 63,934 | (10,329) | 55,148 | 37,313 | (228,388) |
Loss before taxes | (84,775) | (43,614) | (98,332) | (270,452) | (515,653) | (3,619,192) |
Income tax expense (benefit) | 0 | 0 | ||||
NET LOSS | $ (84,775) | $ (43,614) | $ (98,332) | $ (270,452) | $ (515,653) | $ (3,619,192) |
Basic and diluted net income (loss) per common share | $ 0 | $ 0 | $ 0 | $ (0.01) | $ (0.01) | $ (0.11) |
Basic and diluted weighted average common shares outstanding | 46,375,168 | 45,752,033 | 45,628,580 | 45,275,183 | 44,637,046 | 32,545,546 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ||||
Net loss | $ (98,332) | $ (270,452) | $ (515,653) | $ (3,619,192) |
Adjustments to reconcile net income (loss) to net cash (used in) operating activities: | ||||
Depreciation | 2,477 | 1,474 | 3,575 | 1,077 |
Amortization of discount on convertible notes payable | 10,372 | 17,704 | 35,701 | 263,215 |
Stock-based compensation to employees | 14,422 | 80,394 | 124,099 | 3,320,328 |
Stock-based compensation to service providers | 9,198 | 107,385 | 195,087 | 31,500 |
Gain on extinguishment of debt | (72,771) | (72,771) | (35,000) | |
Bad debt expenses | 13,344 | 0 | 30,753 | 9,338 |
Changes in operating assets and liabilities | ||||
Accounts receivable | (116,795) | (44,842) | (21,396) | (65,730) |
Deposits current and non-current | 2,845 | 102,202 | 168,096 | (181,941) |
Inventory | (293) | (25,600) | (22,829) | (44,606) |
Prepaid expenses and other current assets | (18,646) | (5,606) | (19,792) | (7,807) |
Advances from clients | (105,416) | (144,115) | 47,438 | 162,419 |
Accrued and other current liabilities | (31,214) | (1,511) | 40,720 | 120,381 |
Accounts payable | (146,491) | 80,370 | 156,196 | 61,780 |
Net Cash provided by Operating Activities | (464,529) | (175,368) | 149,225 | 34,062 |
CASH FLOW FROM INVESTING ACTIVITIES: | ||||
Cash assumed from Brazil Interactive Media, Inc., net of expenses | 0 | 90,181 | ||
Purchases of property and equipment | (8,658) | (7,677) | ||
Net cash provided by (Used in) Investing Activities | (8,658) | 82,504 | ||
CASH FLOW FROM FINANCING ACTIVITIES | ||||
Proceeds from issuance of common shares to founders | 250,000 | 0 | ||
Distributions to stockholders | 0 | (4,000) | ||
Proceeds from stock-based compensation | 0 | 50 | ||
Proceeds from short-term notes payable | 0 | 35,000 | ||
Proceeds from issuance of convertible notes payable | 139,065 | |||
Proceeds from issuance of common shares | 250,000 | |||
Net cash Provided by Financing Activities | 139,065 | 250,000 | 250,000 | 31,050 |
NET INCREASE IN CASH | (327,126) | 62,300 | 390,567 | 147,616 |
CASH AT BEGINNING OF PERIOD | 555,780 | 165,213 | 165,213 | 17,597 |
CASH AT END OF YEAR | 228,654 | 227,513 | 555,780 | 165,213 |
Supplemental disclosure of cash flow information: | ||||
Cash paid during the period for interest | (80) | 261 | ||
Cash paid (received) during the period for income taxes, net | ||||
Supplemental disclosure of non-cash transactions | ||||
Conversion of notes payable to shares of common stock | $ 70,326 | |||
Convertible notes payable assumed from Brazil Interactive Media, Inc., net of accumulated discount amortization | $ (84,836) |
Consolidated Shareholders Equit
Consolidated Shareholders Equity - USD ($) | Common Stock Shares Issuable | Common Stock | Additional Paid-In Capital | Retained Earnings | Total |
Beginning Balance, Shares at Dec. 31, 2013 | 25,368,502 | ||||
Beginning Balance, Value at Dec. 31, 2013 | $ 254 | $ 546 | $ 7,579 | $ 8,379 | |
Distribution to stockholders | (4,000) | (4,000) | |||
Stock-based compensation granted prior to merger, Shares | 6,342,126 | ||||
Stock-based compensation granted prior to merger, Amount | $ 64 | 3,133,009 | 3,133,073 | ||
Recapitalization upon Reverse Merger, Shares | 8,714,372 | ||||
Recapitalization upon Reverse Merger, Value | $ 87 | 5,258 | 5,345 | ||
Stock-based compensation - restricted shares | 40,903 | 40,903 | |||
Stock-based compensation - warrants | $ 146,551 | $ 146,551 | |||
Common shares issuable for services to related party at Dec. 31, 2014 | 30,000 | 18,300 | 18,300 | ||
Common shares issued for services, Shares | 50,000 | ||||
Common shares issued for services, Value | $ 1 | $ 31,499 | $ 31,500 | ||
Conversion of convertible notes payable to common shares, Shares | 4,043,750 | ||||
Conversion of convertible notes payable to common shares, Value | $ 40 | 323,460 | 323,500 | ||
Net income (loss) | (3,619,192) | (3,619,192) | |||
Ending Balance, Shares at Dec. 31, 2014 | 30,000 | 44,518,750 | |||
Ending Balance, Value at Dec. 31, 2014 | $ 446 | 3,699,526 | (3,615,613) | 84,359 | |
Common shares issued for services, Shares | 35,607 | 250,000 | |||
Common shares issued for services, Value | $ 2 | 195,085 | 195,087 | ||
Shares issued for cash, Shares | 833,333 | ||||
Shares issued for cash, Amount | 250,000 | 250,000 | |||
Stock based compensation granted to employees, Shares | 164,981 | ||||
Stock based compensation granted to employees, Amount | $ 2 | 124,097 | 124,099 | ||
Recension and cancellation of common shares, Shares | (125,000) | ||||
Recension and cancellation of common shares, Amount | $ (2) | (2) | |||
Net income (loss) | (515,653) | (515,653) | |||
Ending Balance, Shares at Dec. 31, 2015 | 898,940 | 44,808,731 | |||
Ending Balance, Value at Dec. 31, 2015 | $ 448 | $ 4,268,708 | $ (4,131,266) | 137,890 | |
Common shares issued for services, Value | 9,198 | ||||
Net income (loss) | (98,332) | ||||
Ending Balance, Value at Jun. 30, 2016 | $ 124,306 |
1. Description of the Business
1. Description of the Business | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
1. Description of the Business | Note 1. Description of the Business American Cannabis Company, Inc. and its subsidiary Company, Hollister & Blacksmith, Inc., doing business as American Cannabis Consulting (American Cannabis Consulting), (collectively the Company) are based in Denver, Colorado and operate a fully-integrated business model that features end-to-end solutions for businesses operating in the regulated cannabis industry in states and countries where cannabis is regulated and/or has been de-criminalized for medical use and/or legalized for recreational use. The Company provides advisory and consulting services specific to this industry, designs industry-specific products and facilities, and manages a strategic group partnership that offers both exclusive and non-exclusive customer products commonly used in the industry. American Cannabis Company, Inc. is a publicly listed company quoted on the OTCQB under the symbol AMMJ. | Note 1. Description of the Business American Cannabis Company, Inc. and its subsidiary Company, Hollister& Blacksmith, Inc., doing business as American Cannabis Consulting (American Cannabis Consulting), (collectively the Company) are based in Denver, Colorado and operate a fully-integrated business model that features end-to-end solutions for businesses operating in the regulated cannabis industry in states and countries where cannabis is regulated and/or has been de-criminalized for medical use and/or legalized for recreational use. We provide advisory and consulting services specific to this industry, design industry-specific products and facilities, and sell both exclusive and non-exclusive customer products commonly used in the industry. American Cannabis Company, Inc. is a publicly listed Company quoted on the OTCQB under the symbol AMMJ. American Cannabis Company, Inc. was incorporated in the State of Delaware on September 24, 2001 under the name Naturewell, Inc. to develop and market clinical diagnostic products using immunology and molecular biologic technologies. On March 13, 2013, Naturewell, Inc. completed a merger transaction whereby it acquired 100% of issued and outstanding share capital of Brazil Interactive Media, Inc. (BIMI), which operated as a Brazilian interactive television company and television production company through its wholly owned Brazilian subsidiary company EsoTV Brasil Promoção Publicidade Licenciamento e Comércio Ltda. (EsoTV). Naturewells Articles of Incorporation were amended to reflect a new name: Brazil Interactive Media, Inc. On May 15, 2014, BIMI entered into a merger agreement (the Merger Agreement) to acquire 100% of the issued and outstanding shares of American Cannabis Consulting while simultaneously disposing of 100% of the issued share capital EsoTV (the Separation Agreement). Both the merger with American Cannabis Consulting and disposal of EsoTV were completed on September 29, 2014. BIMI subsequently amended its Articles of Incorporation to change its name to American Cannabis Company, Inc. On October 10, 2014, American Cannabis Company, Inc changed its stock symbol from BIMI to AMMJ. The foregoing descriptions of the Merger Agreement and Separation Agreement do not purport to be complete and are qualified in their entirety by the terms of such agreements, which are filed as exhibits to the Current Report on Form 8-K filed by the Company with the U.S. Securities and Exchange Commission (SEC) on October 3, 2014. Immediately following the completion of the Merger Agreement, former shareholders of American Cannabis Consulting owned 31,710,628 shares of American Cannabis Company, Inc.s common stock representing 78.44% of American Cannabis Company, Inc.s issued and outstanding share capital. Accordingly, American Cannabis Consulting was deemed to have been the accounting acquirer in a Reverse Merger which resulted in a recapitalization of the Company. Consequently, the Companys financial statements reflect the results of American Cannabis Consulting since Inception (March 5, 2013) and of American Cannabis Company, Inc. (formerly BIMI) from September 29, 2014 to December 31, 2014. See Note 14. Stockholders Equity for further information regarding the accounting related to the Reverse Merger. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
2. Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Accounting The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The Company has elected a fiscal year ending on December 31. Certain balance sheet reclassifications have been made to prior period balances to reflect the current periods presentation format; such reclassifications had no impact on the Companys consolidated statements of operations or consolidated statements of cash flows and had no material impact on the Companys consolidated balance sheets. Reclassifications Prior year amounts have been reclassified to conform to the current year presentation. Use of Estimates in Financial Reporting The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the financial statements in the period they are deemed to be necessary. Significant estimates made in the accompanying financial statements include but are not limited to following: those related to revenue recognition, allowance for doubtful accounts and unbilled services, lives and recoverability of equipment and other long-lived assets, contingencies and litigation. The Company is subject to uncertainties, such as the impact of future events, economic, environmental and political factors, and changes in the business climate; therefore, actual results may differ from those estimates. When no estimate in a given range is deemed to be better than any other when estimating contingent liabilities, the low end of the range is accrued. Accordingly, the accounting estimates used in the preparation of the Company's financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company's operating environment changes. Changes in estimates are made when circumstances warrant. Such changes and refinements in estimation methodologies are reflected in reported results of operations; if material, the effects of changes in estimates are disclosed in the notes to the financial statements. Unaudited Interim Financial Statements The accompanying unaudited financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. Significant Clients and Customers For the three months ended June 30, 2016, four customers individually accounted for $494,003 of the Companys total revenues; these customers accounted for approximately 79% of the Companys total revenues for the period. For the six months ended June 30, 2016, six customers individually accounted for $834,907 of the Companys total revenues; these customers accounted for approximately 71% of the Companys total revenues for the period. For the three months ended June 30, 2015, two customers individually accounted for 10% or more of the Companys revenues; these customers accounted for approximately 63% of the Companys total revenues for the period. For the six months ended June 30, 2015, three customers individually accounted for 10% or more of the Companys revenues; these customers accounted for approximately 70% of the Companys total revenues for the period. For the three months ended June 30, 2014, three customers individually accounted for 10% or more and 65% in aggregate of the Companys total revenues. For the six months ended June 30, 2014, three customers individually accounted for 10% or more and 66% in aggregate of the Companys total revenues. Net Income (Loss) Per Common Share The Company reports net income (loss) per common share in accordance with FASB ASC 260, Earnings per Share. This statement requires dual presentation of basic and diluted earnings with a reconciliation of the numerator and denominator of the earnings per share computations. Basic net income (loss) per share is computed by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period and excludes the effects of any potentially dilutive securities. Diluted net income (loss) per share gives effect to any dilutive potential common stock outstanding during the period. The computation does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings. Due to the Companys net losses for the three and six months ended June 30, 2016 and June 30, 2015, any potentially dilutive shares outstanding as of June 30, 2016 and June 30, 2015 respectively, were not presented in the EPS computations, as their effect would have been antidilutive. Recent Accounting Pronouncements The Company has reviewed all the recently issued, but not yet effective, accounting pronouncements and it does not believe any of these pronouncements will have a material impact on the Company. Reclassifications Prior year amounts have been reclassified to conform to the current year presentation. | Note 2. Summary of Significant Accounting Policies Basis of Accounting The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The Company has elected a fiscal year ending on December 31. Use of Estimates in Financial Reporting The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the financial statements in the period they are deemed to be necessary. Significant estimates made in the accompanying financial statements include but are not limited to following: those related to revenue recognition, allowance for doubtful accounts and unbilled services, lives and recoverability of equipment and other long-lived assets, contingencies and litigation. The Company is subject to uncertainties, such as the impact of future events, economic, environmental and political factors, and changes in the business climate; therefore, actual results may differ from those estimates. When no estimate in a given range is deemed to be better than any other when estimating contingent liabilities, the low end of the range is accrued. Accordingly, the accounting estimates used in the preparation of the Company's financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company's operating environment changes. Changes in estimates are made when circumstances warrant. Such changes and refinements in estimation methodologies are reflected in reported results of operations; if material, the effects of changes in estimates are disclosed in the notes to the financial statements. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents are held in operating accounts at a major financial institution. The company maintains its cash balances in three national financial institutions. Accounts at these institutions are insured by Federal Deposit Insurance Corporation insurance for up to $250,000 per institution. For the years ended December 31, 2015 and 2014, the Company had uninsured balances of $267,238 and $0, respectively. Management believes that these financial institutions are financially sound and the risk of loss is minimal. Restricted Cash Restricted cash is recorded at cost, which approximates fair value. There was no restricted cash included in current assets on our balance sheets as of December 31, 2015 and December 31, 2014. Restricted cash previously related to remaining proceeds from a short-term note entered into on March 21, 2014 and fully satisfied on May 15, 2014 (see Note 7. Convertible Notes Payable). Inventory Inventory is comprised of products and equipment owned by the Company to be sold to end-customers. Inventory is valued at cost, based on the specific identification method, unless and until the market value for the inventory is lower than cost, in which case an allowance is established to reduce the valuation to market value. As of December 31, 2014, market values of all of the Companys inventory were greater than cost, and accordingly, no such valuation allowances was recognized. As of December 31, 2015 and December 31, 2014, the Company had capitalized $57,170 and $40, 051 of costs associated with the construction of demo inventory, including but not limited to parts for the assembly of scalable cultivation systems; and accordingly, no amortization or depreciation expense was recorded related to this asset for each year, then ended. Deposits Deposits is comprised of advance payments made to third parties, primarily for inventory for which the Company has not yet taken title. When the Company takes title to inventory for which deposits are made, the related amount is classified as inventory, then recognized as a cost of revenues upon sale (see Costs of Revenues below). Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets is primarily comprised of advance payments made to third parties for independent contractors services or other general expenses. Prepaid services and general expenses are amortized over the applicable periods which approximate the life of the contract or service period. Accounts Receivable Accounts receivable are recorded at the net value of face amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and, based on a method of specific identification of any accounts receivable for which it deems the net realizable value to be less than the gross amount of accounts receivable recorded, establishes an allowance for doubtful accounts for those balances. In determining its need for an allowance for doubtful accounts, the Company considers historical experience, analysis of past due amounts, client creditworthiness and any other relevant available information. However, the Companys actual experience may vary from its estimates. If the financial condition of its clients were to deteriorate, resulting in their inability or unwillingness to pay the Companys fees, it may need to record additional allowances or write-offs in future periods. This risk is mitigated to the extent that the Company receives retainers from its clients prior to performing significant services. The allowance for doubtful accounts, if any, is recorded as a reduction in revenue to the extent the provision relates to fee adjustments and other discretionary pricing adjustments. To the extent the provision relates to a client's inability to make required payments on accounts receivables, the provision is recorded in operating expenses. As of December 31, 2015 and December 31, 2014 our allowance for doubtful accounts was $8,419 and $9,338, respectively. For December 31, 2015 and December 31, 2014, we recorded bad debt expense of $30,753 and $9,338, respectively, which is reflected as a component of general and administrative expenses on the consolidated statement of operations. Significant Customers For the year ended December 31, 2015 and December 31, 2014, in the aggregate, three customers and two customers, respectively, accounted for 74% and 52% of the Companys total revenues for each respective period. On a geographical basis, for the year ended December 31, 2015, approximately 91% and 9% of our total revenues were generated from the United States and Canada, respectively. For the year ended December 31, 2014, approximately 70% and 30% of our total revenues for the period were generated from the United States and Canada, respectively. Property and Equipment, net Property and Equipment is stated at net book value, cost less depreciation. Maintenance and repairs are expensed as incurred. Depreciation of owned equipment is provided using the straight-line method over the estimated useful lives of the assets, ranging from two to seven years. Depreciation of capitalized construction in progress costs, a component of property and equipment, net, begins once the underlying asset is placed into service. Property and equipment is reviewed for impairment as discussed below under Accounting for the Impairment of Long-Lived Assets. The Company had not capitalized any interest as of December 31, 2014 and 2013. Accounting for the Impairment of Long-Lived Assets The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Upon such an occurrence, recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to forecasted undiscounted net cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. For long-lived assets held for sale, assets are written down to fair value, less cost to sell. Fair value is determined based on discounted cash flows, appraised values or management's estimates, depending upon the nature of the assets. The Company did not record any impairment charges related to long-lived assets during the year ended December 31, 2015 and December 31, 2014. Beneficial Conversion Feature If the conversion features of conventional convertible debt provides for a rate of conversion that is below market value at issuance, this feature is characterized as a beneficial conversion feature (BCF). A BCF is recorded by the Company as a debt discount pursuant to Financial Accounting Standards Board (FASB) Accounting Standards Codification (ACF) Topic 470-20 Debt with Conversion and Other Options Revenue Recognition Revenue is recognized in accordance with FASB ASC Topic 605, Revenue Recognition The Company primarily generates revenues from professional services consulting agreements. These arrangements are generally entered into on a time basis, for a fixed-fee or on a contingent fee basis. Generally, a prepayment or retainer is required prior to performing services. Revenues from time-based engagements are recognized as the hours are incurred by the Company. Revenues from fixed-fee engagements are recognized under the completed or proportional performance methods. Management reviews arrangement to determine whether or not the fixed-fee is for a final deliverable or act which is significant to the arrangement as a whole. If it is, revenue is recognized under the completed performance method, in which revenue is recognized once the final act or deliverable is performed or delivered. Revenue recognized under the proportional performance method is recognized as services are performed. Under this method, the Company estimates the amount of completed work in comparison to the total services to be provided under the arrangement or deliverable in order to determine the amount of revenue to be recognized. Revenue recognition is affected by a number of factors that change the estimated amount of work required to complete the deliverable, such as changes in scope, timing, awaiting notification of license award from local government, and the level of client involvement. Losses, if any, on fixed-fee engagements are recognized in the period in which the loss first becomes probable and reasonably estimable. During the year ended December 31, 2015 and December 31, 2014, no such losses have occurred. The Company believes if an engagement terminates prior to completion it can recover the costs incurred related to the services provided. The Company occasionally enters into arrangements for which revenues are contingent upon achieving a pre-determined deliverable or future outcome. Any contingent revenue for these arrangements is not recognized until the contingency is resolved and collectability is reasonably assured. The Companys arrangements with clients may include terms to deliver multiple services or deliverables. These contracts specifically identify the services to be provided with the corresponding deliverable. The value for each deliverable is determined based on the prices charged when each element is sold separately or by other vendor-specific objective evidence (VSOE), or estimates of stand-alone selling prices. Revenues are recognized in accordance with the Companys accounting policies for the elements as described above. The elements qualify for separation when the deliverables have value on a stand-alone basis and the value of the separate elements can be established by VSOE or an estimated selling price. While assigning values and identifying separate elements requires judgment, selling prices of the separate elements are generally readily identifiable as the Company also sells those elements individually outside of a multiple services engagement. Contracts with multiple elements typically incorporate a fixed-fee or hourly pricing structure. Arrangements are typically terminable by either party upon sufficient notice and do not include provisions for refunds relating to services provided. Differences between the timing of billings and the recognition of revenue are recognized as either unbilled revenue (a component of accounts receivable) or deferred revenue on the consolidated balance sheet. Revenues recognized for services performed but not yet billed to clients are recorded as unbilled revenue. Reimbursable expenses, including those relating to travel, other out-of-pocket expenses and any third-party costs, are included as a component of revenues. Typically, an equivalent amount of reimbursable expenses are included in total direct client service costs. Reimbursable expenses related to time and materials and fixed-fee engagements are recognized as revenue in the period in which the expense is incurred and collectability is reasonably assured. Taxes collected from customers and remitted to governmental authorities are presented in the statement of operations on a net basis. Revenue from product and equipment sales, including delivery fees, is recognized when an order has been obtained, the price is fixed and determinable, the product is shipped, title has transferred and collectability is reasonably assured. Generally, our suppliers drop-ship orders to our clients with origin terms. For any shipments with destination terms, the Company defers revenue until delivery to the customer. During the year ended December 31, 2015 and December 31, 2014, sales returns were not significant and as such, no sales return allowance had been recorded as of December 31, 2015 nor at December 31, 2014. During the year ended December 31, 2015, the Company generated revenue from the sale of products to a company managed by a Director of the Company. Costs of Revenues The Companys policy is to recognize costs of revenue in the same manner in conjunction with revenue recognition. Cost of revenue includes the costs directly attributable to revenue recognition and includes compensation and fees for services, travel and other expenses for services and costs of products and equipment. Selling, general and administrative expenses are charged to expense as incurred. Advertising and Promotion Costs Advertising and promotion costs are included as a component of selling and marketing expense and are expensed as incurred. During the year ended December 31, 2015 and December 31, 2014, these costs were $79,989 and $29,858, respectively. Shipping and Handling Costs For product and equipment sales, shipping and handling costs are included as a component of cost of revenues. Stock-Based Compensation Restricted shares are awarded to employees and service providers and entitle the grantee to receive shares of common stock at the end of the established vesting period. The fair value of the grant is based on the stock price on the date of grant. We recognize related compensation costs on a straight-line basis over the requisite vesting period of the award, which to date hasbeen one year from the grant date. During the years ended December 31, 2015 and December 31, 2014, stock-based compensation expense for restricted shares was $319,187 and $3,370,128, respectively. Compensation expense for warrants and options is based on the fair value of the instruments on the grant date, which is determined using the Black-Scholes valuation model, and are expensed over the expected term of the awards. During the year ended December 31, 2015 and December 31, 2014, compensation expense for warrants and options was $0 and $146,551, respectively. Income Taxes Our corporate status changed from an S-Corporation, which it had been since inception, to a C-Corporation during the year ended December 31, 2014. As provided in Section 1361 of the Internal Revenue Code, for income tax purposes, S-Corporations are not subject to corporate income taxes; instead, the owners are taxed on their proportionate share of the S-Corporations taxable income. Accordingly, we were only subject to income taxes for a portion of 2014. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns in accordance with applicable accounting guidance for accounting for income taxes, using currently enacted tax rates in effect for the year in which the differences are expected to reverse. We record a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized. For the year ended December 31, 2015 and December 31, 2014, due to cumulative losses since our corporate status changed, we recorded a valuation allowance against our deferred tax asset that reduced our income tax benefit for the period to zero. As of December 31, 2015 and December 31, 2014, we had no liabilities related to federal or state income taxes and the carrying value of our deferred tax asset was zero. The years 2010 to 2015 remain subject to examination by the Companys major tax jurisdictions Net Income (Loss) Per Common Share The Company reports net income (loss) per common share in accordance with FASB ASC 260, Earnings per Share. This statement requires dual presentation of basic and diluted earnings with a reconciliation of the numerator and denominator of the earnings per share computations. Basic net income (loss) per share is computed by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period and excludes the effects of any potentially dilutive securities. Diluted net income (loss) per share gives effect to any dilutive potential common stock outstanding during the period. The computation does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings. Related Party Transactions The Company follows FASB ASC subtopic 850-10, Related Party Disclosures Pursuant to ASC 850-10-20, related parties include: a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 8251015, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. Material related party transactions are required to be disclosed in the consolidated financial statements, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which statements of operation are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which statements of operations are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. During the year ended December 31, 2015, the Company generated revenue from the sale of products to a company managed by a Director of the Company. See Note 10. Related Party Transactions for associated disclosures. Reclassifications Certain balance sheet reclassifications have been made to prior period balances to reflect the current periods presentation format; such reclassifications had no impact on the Companys consolidated statements of operations or consolidated statements of cash flows and had no material impact on the Companys consolidated balance sheets. Recent Accounting Pronouncements In August 2014, the FASB issued ASU 2014-15 Presentation of Financial Statements Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern (ASU 2014-15). By incorporating and expanding upon certain principles that are currently in U.S. auditing standards, ASU 2014-15 requires management to assess whether there is substantial doubt about the entitys ability to continue as a going concern . Specifically, ASU 2014-15 (1) provides a definition of the term substantial doubt, (2) requires an evaluation every reporting period including interim periods, (3) provides principles for considering the mitigating effect of managements plans, (4) requires certain disclosures when substantial doubt is alleviated as a result of consideration of managements plans, (5) requires an express statement and other disclosures when substantial doubt is not alleviated, and (6) requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company has not elected to early adopt the provisions of ASU 2014-15, and accordingly, the requirements of ASU 2014-15 will apply beginning with the year ended December 31, 2016. The Company is currently evaluating the effects, if any, that the application of ASU 2014-15 will have on disclosures associated with its consolidated financial statements. In May 2014, the FASB issued ASU 2014-9 Revenue from Contracts with Customers (Topic 606) (ASU 2014-9), which provides a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. This guidance is effective for annual reporting and interim periods beginning after December 15, 2016 and allows for either full retrospective or modified retrospective application, with early adoption not permitted. Accordingly, the standard becomes effective for the Company on January 1, 2017. The Company is currently evaluating the adoption method it will apply and the impact that this guidance will have on its consolidated financial statements and related disclosures. |
3. Accounts Receivable, net
3. Accounts Receivable, net | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Receivables [Abstract] | ||
3. Accounts Receivable, net | Note 3. Accounts Receivable, net Accounts receivable, net, was comprised of the following as of June 30, 2016 and December 31, 2015: 30-Jun-16 31-Dec-15 Gross accounts receivable $ 154,222 $ 56,704 Less: allowance for doubtful accounts (2,486 ) (8,419 ) Accounts receivable, net $ 151,736 $ 48,285 The Company had bad debt expense during the six months ended June 30, 2016 and 2015 of $13,344 and $0, respectively. During the six months ended June 30, 2016 and 2015, the Company wrote-off old receivables and their related allowances for bad debts of $19,277 and $0, respectively. | Note 3. Accounts Receivable, net Accounts receivable, net, was comprised of the following: December 31, 2015 December 31, 2014 Gross accounts receivable $ 56,704 $ 66,980 Less: allowance for doubtful accounts (8,419 ) (9,338 ) Accounts receivable, net $ 48,285 $ 57,642 For the years ended December 31, 2015 and December 31, 2014, the Company had bad debt expense of $30,753 and $9,338, respectively. |
4. Deposits
4. Deposits | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Banking and Thrift [Abstract] | ||
4. Deposits | Note 4. Deposits Deposits were comprised of the following as of June 30, 2016 and December 31, 2015: 30-Jun-16 31-Dec-15 Inventory deposits $ 6,500 $ 9,345 Operating lease deposits included in other Assets 4,500 4,500 Deposits $ 11,000 $ 13,845 Inventory deposits as of June 30, 2016 and December 31, 2015 reflect down payments made to suppliers or manufacturers under inventory purchase agreements. | Note 4. Deposits Deposits was comprised of the following as of December 31, 2015 and 2014: December 31, 2015 December 31, 2014 Inventory deposits $ 9,345 $ 179,941 Operating lease deposits 0 2,000 Deposits $ 9,345 $ 181,941 Inventory deposits reflect down payments made to suppliers or manufacturers under inventory purchase agreements. |
5. Inventory
5. Inventory | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | ||
5. Inventory | Note 5. Inventory Inventory as of June 30, 2016 and December 31, 2015 of $67,728 and $67,435, respectively, was fully comprised of finished goods. | Note 5. Inventory Inventory as of December 31, 2015 and December 31, 2014 of $67,435 and $44,606 was comprised of finished goods in-transit to customers and also costs associated with the construction of demo inventory, including but not limited to parts for the assembly of scalable cultivation systems. The cost of this demo inventory was 57,170 as of December 31, 2015 and $40,051 as of December 31, 2014. |
6. Prepaid expenses and other c
6. Prepaid expenses and other current assets | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
6. Prepaid expenses and other current assets | Note 6. Prepaid expenses and other current assets Prepaid expenses and other current assets was comprised of the following as of June 30, 2016 and December 31, 2015: 30-Jun-16 31-Dec-15 Prepaid Insurance $ 2,350 $ 5,572 Prepaid Legal Services (Retainers) 37,900 12,900 Other prepayments to suppliers 10,513 13,645 Deposits $ 50,763 $ 32,117 |
6. Property and Equipment, net
6. Property and Equipment, net | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
6. Property and Equipment, net | Note 7. Property and Equipment, net Property and equipment, net, was comprised of the following as of June 30, 2016 and December 31, 2015: 30-Jun-16 31-Dec-15 Office equipment $ 9,275 $ 7,472 Furniture and fixtures 8,635 8,777 Machinery and equipment 2,337 2,336 Property and equipment, gross 20,247 18,585 Less: accumulated depreciation (7,614 ) (5,137 ) Property and equipment, net $ 12,633 $ 13,448 The Company recorded depreciation expense of $1,256 and $758 during the three months ended June 30, 2016 and 2015, respectively. During the six months ended June 30, 2016 and 2015, the Company recorded depreciation expense of $2,470 and $1,474, respectively. | Note 6. Property and Equipment, net Property and equipment, net, was comprised of the following: December 31, 2015 December 31, 2014 Office equipment $ 7,472 $ 5,742 Furniture and fixtures 8,777 2,935 Machinery and equipment 2,336 1,250 Property and equipment, gross 18,585 9,927 Less: accumulated depreciation (5,137 ) (1,562 ) Property and equipment, net $ 13,448 $ 8,365 For the year ended December 31, 2015 and December 31, 2014, the Company recorded depreciation expense of $3,575 and $1,077, respectively. |
7. Convertible Notes Payable
7. Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
7. Convertible Notes Payable | Note 7. Convertible Notes Payable On April 24, 2014, Brazil Interactive Media, Inc. issued convertible notes payable in the total amount of $395,000. The convertible notes payable have a maturity date of April 24, 2016, pay zero interest, and are convertible until maturity at the holders discretion into shares of the Companys common stock at $0.08 per share. Brazil Interactive Media, Inc.s share price on April 24, 2014 was $0.24 and accordingly, the intrinsic value of the beneficial conversion feature attached to these convertible notes payable was $590,000. However, as the amount of debt discount to be recognized cannot exceed the face value of the convertible notes payable, the convertible notes payable were discounted by the maximum permissible amount of $395,000 due to the intrinsic value of the beneficial conversion option. During the period from April 24, 2014 through the effective date of the Merger, September 29, 2014, no convertible notes payable were converted into shares of Brazil Interactive Media, Inc. common stock and $84,836 debt discount was amortized during the period. Accordingly as at the effective date of the Reverse Merger, September 29, 2014, a total of $395,000 of convertible notes payable and unamortized debt discount of $310,164 was recognized in the Companys consolidated financial statements. During the period from September 29, 2014 to December 31, 2014, $323,500 of the convertible notes payable were converted into 4,043,750 shares of common stock and $263,215 of debt discounted was amortized in the period. The balance of unamortized debt discount outstanding in respect of convertible notes payable that converted into shares of American Cannabis Company, Inc. common stock was amortized in full at the date of conversion. As of December 31, 2015, the convertible notes payable had a $71,500 face value and a discount of $11,248, for a net carrying value of $60,252 which is reflected on the Companys balance sheet as convertible notes payable, net. As of December 31, 2015, the convertible notes payable had a $71,500 face value and a discount of $46,949, for a net carrying value of $24,551 that is reflected on the Companys balance sheet as Convertible notes payable, net. The convertible notes payable are convertible into 893,750 shares of American Cannabis Company, Inc. common stock. As of April 11 th th On May 15, 2014, as a result of the issuance of the convertible notes payable, a secured promissory note that American Cannabis Consulting had originally entered into on March 21, 2014 was deemed to be fully satisfied. This secured promissory note had a principal amount of $35,000 and an interest rate of 5% per annum. The Company recorded interest expense related to this note of $260 during the year ended December 31, 2014. The Company recorded a gain on debt extinguishment of $35,000 during the year ended December 31, 2014. |
8. Notes Payable
8. Notes Payable | 6 Months Ended |
Jun. 30, 2016 | |
Payables and Accruals [Abstract] | |
8. Notes Payable | Note 8. Notes Payable As of June 30, 2016 and December 31, 2015, the Company reflected convertible notes payable as follows: Principal balance Loan Discount Accrued Interest Total Balance as of December 31, 2015 $ 71,500 (11,248 ) $ $ 60,252 Issued in the period 150,000 (10,935 ) 139,065 Amortization of debt discount 10,075 10,075 Converted into shares of common stock (71,500 ) 1,173 (70,327 ) Balance as of June 30, 2016 $ 150,000 (10,935 ) $ $ 139,065 The Company had convertible debentures which were originally issued on April 24, 2014, maturing on April 24, 2016, paid zero interest, and were convertible until maturity at the holders discretion into shares of the Companys common stock at $0.08 per share. On April 11th, 2016, the maturity date on this note was renegotiated to April 24th, 2018. On April 12, 2016, the Company received notice of a partial conversion of this note in the amount of $58,000 that was converted into 725,000 shares of common stock at a price of $0.08 per share. On May 6, 2016, the Company received notice for the conversion of the balance of the note in the amount of $13,500 that was converted into 168,750 shares of common stock at a price of $0.08 per share. Based on this conversion, as of June 30, 2016, the Company had remaining convertible debentures in the total amount of $0, and any unamortized debt discount remaining on the date of conversion was amortized in full to interest expense. On June 23, 2016, the Company entered into two convertible promissory notes: one for $50,000 and one for $330,000. As of the date of this filing, the Company received $150,000 in proceeds and recorded a discount of $10,935. The maturity date for each note is February 14, 2017. Each note pays 8% fixed interest and is convertible at the holders discretion into shares of the Companys common stock at a fixed price of $0.1135 per share. On August 4, 2016 the notes were amended and restated to delete portions of the notes that originally provided for a conversion formula used to determine the price per share and to delete a provision that provided for repayment of the notes through a separate investment agreement providing for the Company to sell its registered shares to an investor (See Subsequent Events Note 14). |
8. Accrued and Other Current Li
8. Accrued and Other Current Liabilities | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Payables and Accruals [Abstract] | ||
8. Accrued and Other Current Liabilities | Note 9. Accrued and Other Current Liabilities Accrued and other current liabilities was comprised of the following at June 30, 2016 and December 31, 2015: 30-Jun-16 31-Dec-15 Accrued payroll liabilities $ 9,808 $ 18,185 Accrual for products sold and shipped (in transit) 46,417 64,050 Other accruals 15,525 11,233 Accrued and other current liabilities $ 71,750 $ 93,468 | Note 8. Accrued and Other Current Liabilities Accrued and other current liabilities consisted of the following: December 31, 2015 December 31, 2014 Accrued legal fees $ 0 0 Accrued payroll liabilities 18,185 11,522 Accrued accounting fees 0 5,000 Due to directors 0 1,999 Accrual for inventory products sold and shipped (in transit) 64,050 0 Other 11,233 5,488 Accrued and other current liabilities $ 93,468 $ 125,518 |
9. Net Income (Loss) per Common
9. Net Income (Loss) per Common Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
9. Net Income (Loss) per Common Share | Note 9. Net Income (Loss) per Common Share The following is a reconciliation of weighted common shares outstanding used in the calculation of basic and diluted net income (loss) per common share: Year Ended Year Ended December 31, 2015 December 31, 2014 Net income (loss) $ (515,653 ) $ (3,619,192 ) Weighted average shares used for basic net income (loss) per common share 44,637,046 32,542,940 Incremental diluted shares Weighted average shares used for diluted net income (loss) per common share 44,637,046 32,542,940 Net income (loss) per common share: Basic $ (0.11 ) $ (0.01 ) Diluted $ (0.11 ) $ (0.01 ) As of December 31, 2015, no potentially dilutive shares were issued or outstanding. As a result of the net loss for the period, the Company excluded 681,569 total shares from its calculation of diluted net income (loss) per common share for the year ended December 31, 2014 because their effect would have been antidilutive. These shares were comprised of 38,255 shares of common stock, 26,289 of warrants and 617,055 of share equivalents associated with convertible notes payable. |
10. Related Party Transactions
10. Related Party Transactions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Related Party Transactions [Abstract] | ||
10. Related Party Transactions | Note 10. Related Party Transactions During the six months ended June 30, 2016, the Company incurred $14,500 of expense for accounting services payable to JDE Development LLC, a company in which Jesus M Quintero, the Companys Chief Financial Officer, is an owner. | Note 10. Related Party Transactions Previously, the Company purchased inventory and equipment from Baroud Development Group, in which Anthony Baroud, the Companys former Chief Technology Officer and a former Director of the Company, is an owner. During the year ended December 31, 2014, such purchases totaled $40,715. No such transactions occurred during 2015. For the year ended December 31, 2015, the Company generated revenue from the sale of products to an entity controlled by a Director. During the year ended December 31, 2014, prior to the Reverse Merger, the Company distributed a total of $4,000 to its co-founders and owners, Corey Hollister and Ellis Smith. During the year ended December 31, 2015 and December 31, 2014, the Company incurred $38,360 and $30,227, respectively, of expense payable to New Era CPAs, an accounting firm in which Antonio Migliarese, the Companys former Chief Financial Officer, was a partner. During the year ended December 31, 2015 and December 2014, the Company sold $25,214 and $0, respectively, of equipment and supplies to a customer managed by a Director of the Company. As of December 31, 2015 and December 2014, the Company was owed $17,512 and $0, respectively, from this customer. |
11. Commitments and Contingenci
11. Commitments and Contingencies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||
11. Commitments and Contingencies | Note 11. Commitments and Contingent Liabilities On March 1, 2016, the Company retained Brian Johnson as a consultant for an initial term of three months until May 31, 2016, and agreed to pay Mr. Johnson 10,000 shares of its restricted common stock per month for the three-month term payable on May 31, 2016, subject to adjustment for actual hours of service rendered. On June 1, 2016, the Company and Mr. Johnson agreed to an extension of the consulting engagement for an additional one-month term, ending on June 30, 2016. Mr. Johnson provided additional services and upon the termination of the engagement on June 30, 2016, the Company agreed to issue Mr. Johnson 87,600 shares of common stock as a final payment for services rendered from inception through June 30, 2016 at a value of $9,198. As of the date of this filing the shares have not been issued. On January 20, 2016, we were named as a defendant in a civil suit entitled: Anthony Baroud vs. Hollister & Blacksmith, Inc., dba American Cannabis Company filed in the Circuit Court of Cook County, Illinois. The lawsuit originally sought damages of $100,000 related to an employment contract. The Company filed a motion with the Court to dismiss the complaint and refer the Company and Mr. Baroud to arbitration. On May 18, 2016 the Court granted the Companys motion and dismissed Mr. Barouds complaint. Mr. Baroud has not pursued arbitration as of the date of this filing. | Note 11. Commitments and Contingencies Under the terms of our agreement with the manufacturer of our exit packing product, the Satchel TM Under the terms of the Companys various consulting agreements with clients, the Company is obligated to perform certain future services. On January 20, 2016, we were named as a defendant in a civil suit entitled: Anthony Baroud vs. Hollister & Blacksmith, Inc., dba American Cannabis Company filed in the Circuit Court of Cook County, Illinois. The lawsuit seeks damages of $100,000 related to an employment contract. The Company filed a motion to compel contractual arbitration that has yet to be ruled on by the Court. On April 14, 2014, the Company entered into a 106 day lease of office space to house its corporate offices which converted to a month to month lease at the end of the lease term. Under the terms of the lease, payments were $2,000 during the lease term and $4,000 per month after the lease term expired. On July 28, 2015, the Company entered into a 5 year lease for 6,500 square feet of office space to house its corporate offices. Under the terms of the lease, payments are $4,500 per month for the first 36 months of the lease, and escalate thereafter. The following table summarizes the Companys future lease obligations: Year Amount 2016 $ 54,000 2017 $ 54,000 2018 $ 54,000 2019 $ 56,320 2020 $ 33,610 Total $ 251,930 During the years ended December 31, 2015 and 2014, the company incurred $53,800 and $20,933, respectively, in rent expense. |
12. Stock-based Compensation
12. Stock-based Compensation | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Equity [Abstract] | ||
12. Stock-based Compensation | Note 12. Stock-based Compensation Warrants As of June 30, 2016 and December 31, 2015, the Company had fully-vested warrants to the Companys independent board member to purchase up to two hundred and fifty thousand (250,000) shares of common stock. Options In addition to the warrants as described above, the Companys independent board member shall be eligible to receive options for 400,000 shares of common stock under the Companys incentive plan, as and when duly approved by the Board of Directors. Stock Issuable in Compensation for Professional Services From time to time, the Company enters into agreements whereby a professional service provider will be compensated for services rendered to the Company by shares of common stock in lieu of cash. On March 1, 2016, the Company retained Brian Johnson as a consultant for an initial term of three months until May 31, 2016, and agreed to pay Mr. Johnson 10,000 shares of its restricted common stock per month for the three-month term payable on May 31, 2016, subject to adjustment for actual hours of service rendered. On June 1, 2016, the Company and Mr. Johnson agreed to an extension of the consulting engagement for an additional one-month term, ending on June 30, 2016. Mr. Johnson provided additional services and upon the termination of the engagement on June 30, 2016, the Company agreed to issue Mr. Johnson 87,600 shares of common stock as a final payment for services rendered from inception through June 30, 2016 at a value of $9,198 (See Note 11). . As of the date of this filing the shares have not been issued. | Note 12. Stock-based Compensation During the years ended December 31, 2015 and December 31, 2014, the Company recorded a total of $319,187 and $3,370,128, respectively, of stock-based compensation expense, which was the result of the following activity: Restricted Shares From time to time, the Company grants certain employees restricted shares of its common stock to provide further compensation in-lieu of wages and to align the employees interests with the interests of its stockholders. Because vesting is based on continued employment, these equity-based incentives are also intended to attract, retain and motivate personnel upon whose judgment, initiative and effort the Companys success is largely dependent. The following table summarizes the Companys restricted share award activity during the year ended December 31, 2015: Restricted Shares Weighted Average Common Stock Grant Date Fair Value Outstanding unvested at December 31, 2014 $ Granted 150,000 0.94 Vested restricted shares Forfeited Outstanding unvested at December 31, 2015 150,000 0.94 Granted 164,981 0.21 Vested restricted shares (100,000 ) 0.94 Forfeited (50,000 ) 0.94 Outstanding unvested at December 31, 2015 164,981 $ 0.94 During the year ended December 31, 2015, the Company granted 164,981 restricted shares and recognized $124,099 in associated employee stock-based compensation expense. There were 150,000 restricted shares granted as of December 31, 2014 and recognized $40,903 in associated employee stock-based compensation expense. The fair value of restricted stock units is determined based on the quoted closing price of the Companys common stock on the date of grant. Warrants In connection with his appointment to the Companys board of directors, the Company granted its independent board member, Vincent Tripp Keber, warrants to purchase up to two hundred and fifty thousand (250,000) shares of common stock at an exercise price of sixty-three cents ($0.63) per share, exercisable within five (5) years of the date of issuance on November 19, 2014. Additionally, Mr. Keber shall be eligible to receive options for 400,000 shares of common stock under the Companys incentive plan, as and when duly approved by the Board of Directors. The Company uses the Black-Scholes valuation model to determine the fair value of warrants as of the grant date. Assumptions used in this calculation for the warrant award to purchase 250,000 shares of common stock include expected volatility of 160.7%, based on an average of historical data of the Companys stock price and the stock prices of three comparable companies that are also included in the marijuana index, a risk-free rate of 1.62%, based on U.S. Treasury yields as published by the Federal Reserve, a dividend yield of 0.0%, as the Company has not historically paid dividends nor does it have any plans to do so in the foreseeable future, and an expected term of five years. The grant date fair value of the warrants, as calculated based on these assumptions, was $0.59 per share. During 2015 and 2014, the Company had the following warrant activity: Common Stock Warrants Weighted Average Grant Date Fair Value Outstanding unvested at December 31, 2013 $ Granted 250,000 0.59 Exercised Expired or forfeited Outstanding unvested at December 31, 2014 250,000 0.59 Granted Exercised Expired or forfeited Outstanding unvested at December 31, 2015 250,000 $ 0.59 Vested at December 31, 2015 250,000 $ 0.59 Unvested at December 31, 2015 $ Compensation expense associated with warrants was $146,551 for the year ended December 31, 2014 and is reflected on the consolidated statement of operations as a component of general and administrative expenses. No warrants were issued or outstanding during 2015, and accordingly, there was no compensation expense associated with warrants for the year ended December 31, 2015. As of December 31, 2015, as the exercise price per share exceeded the price per share of our common shares. There was no aggregate intrinsic value of outstanding warrants. |
13. Income Taxes
13. Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
13. Income Taxes | Note 13. Income Taxes As part of the Reverse Merger, the Companys corporate status changed from an S-Corporation, which it had been since inception, to a C-Corporation. As provided in Section 1361 of the Internal Revenue Code, for income tax purposes, S-Corporations are not subject to corporate income taxes; instead, the owners are taxed on their proportionate share of the S-Corporations taxable income. Accordingly, the Company was not subject to income tax for the year ended December 31, 2015 and was only subject to income taxes for a portion of the year ended December 31, 2014. The following table displays a reconciliation from the U.S. statutory rate to the effective tax rate and the provision for (benefit from) income taxes for the years ended December 31, 2015 and 2014, respectively: December 31, 2015 December 31, 2014 Tax benefit at the US statutory rate of 34% $ 175,322 $ 1,230,525 State income tax benefit 23,875 $ 167,569 Non-deductible expenses including non-deductible pre-merger losses (773 ) (2,057 ) Change in valuation allowance (198,424 ) (1,396,037 ) Total income tax benefit $ $ Deferred tax assets (liabilities) consisted of the following: December 31, 2015 December 31, 2014 Net operating loss carryforwards $ 76,630 $ 16,361 Stock based compensation 1,402,777 1,278,414 Beneficial conversion feature accumulated amortization 13,791 Valuation allowance (1,493,199 ) (1,294,775 ) Total deferred tax assets $ $ Due to cumulative net losses since the change in our corporate status to a C-Corporation, the Company determined that it is not more likely than not that its deferred tax asset would be realizable. Accordingly, the Company recorded a valuation allowance for the full amount of its deferred tax asset, resulting in a zero carrying value of the Companys deferred tax asset and no benefit from or provision for income taxes for the year ended December 31, 2015 and December 31, 2014. As of December 31, 2014, the carrying value of the Companys deferred tax assets was zero due to the valuation allowance. Federal and state operating loss carry forwards of $198,369 as of December 31, 2016 begin expiring on 2034. The years 2010 to 2015 remain subject to examination by the Companys major tax jurisdictions. Utilization of the net operating loss carry forwards and credits may be subject to a substantial annual limitation due to ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions. |
14. Stockholders Equity
14. Stockholders Equity | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Equity [Abstract] | ||
14. Stockholders Equity | Note 13. Stockholders Equity Preferred Stock American Cannabis Company, Inc. is authorized to issue 5,000,000 shares of preferred stock at $0.01 par value. No shares of preferred stock were issued and outstanding during the six months ended June 30, 2016 and 2015, respectively. Common Stock American Cannabis Company, Inc. is authorized to issue 100,000,000 common shares at $0.00001 par value per share. | Note 14. Stockholders Equity Preferred Stock The American Cannabis Company, Inc. is authorized to issue 5,000,000 shares of preferred stock at $0.01 par value. No shares of preferred stock were issued and outstanding during the year ended December 31, 2015 or the period from Inception (March 5, 2013) to December 31, 2013. Common Stock In connection with the September 29, 2014 Reverse Merger as described in Note 1. Description of the Business, American Cannabis Consulting was deemed to have been the accounting acquirer in accordance with U.S. GAAP. Consequently, the Companys consolidated financial statements reflect the results of American Cannabis Consulting since Inception (March 5, 2013) and of American Cannabis Company, Inc. (formerly BIMI) from September 29, 2014 to December 31, 2014. As a reverse triangular merger, the Reverse Merger resulted in a recapitalization of American Cannabis Company, Inc. (formerly BIMI). This recapitalization included retrospective restatement of all stock issuance by American Cannabis Consulting from Inception (March 5, 2013), whereby the issued and outstanding shares of American Cannabis Consulting common stock were retrospectively restated for a 1:3,171.0628 forward share split to recognize the exchange ratio associated with the Reverse Merger, and for the change in the par value of shares issued in connection with the Reverse Merger. On the date of the Reverse Merger, an additional 8,714,372 shares were issued, and accordingly, $87 of common stock was recorded (8,714,372 shares issued multiplied by the $0.00001 par value) and additional paid-in capital of $5,258 was recorded, reflecting the net assets assumed from Brazil Interactive Media, Inc. in connection with the Reverse Merger. As a result of the transactions described above, as of December 31, 2015, the balances of common stock and additional paid-in capital were $448 and $4,268,708, respectively. As a result of the transactions described above, as of December 31, 2014, the balances of common stock and additional paid-in capital were $446 and $3,699,526, respectively. American Cannabis Company, Inc. is authorized to issue 100,000,000 common shares at $0.00001 par value per share and 5,000,000 shares of preferred stock at $0.01 par value. |
15. Reportable Segments
15. Reportable Segments | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
15. Reportable Segments | Note 15. Reportable Segments The Company has no reportable segments as it only operates in the regulated cannabis industry, as a provider of professional consulting services, products and equipment. |
16. Subsequent Events
16. Subsequent Events | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Subsequent Events [Abstract] | ||
16. Subsequent Events | Note 14. Subsequent Events The Company previously entered into an Investment Agreement with Tangiers Global, LLC, a Wyoming Limited Liability Company, on June 23, 2016. On August 4, 2016, the Company and Tangiers Global, LLC, amended and restated the two fixed convertible promissory notes disclosed in Note 8. The amendments deleted portions of the notes that originally provided for a conversion formula used to determine the conversion price per share, and deletes provisions for the repayment of the notes through sales of the Companys registered shares to Tangiers The Company owed 77,660 shares of common stock as part of accounting services provided to the Company by New Era CPAs, an accounting firm in which the Companys former Chief Financial Officer, is a partner. On July 29, 2016 the Company issued the 77,660 shares due Mr. Migliarese. | Note 16. Subsequent Events We have evaluated all events that occurred after the balance sheet date through the date when our financial statements were issued to determine if they must be reported. As of December 31, 2015, the convertible notes payable had a $71,500 face value and a discount of $11,248, for a net carrying value of $60,252 which is reflected on the Company's balance sheet as convertible notes payable, net. As of December 31, 2014, the convertible notes payable had a $71,500 face value and a discount of $46,949, for a net carrying value of $24,551 that is reflected on the Company's balance sheet as Convertible notes payable, net. The convertible notes payable are convertible into 893,750 shares of American Cannabis Company, Inc. common stock. As of April 11th, 2016, the maturity date on this note has been renegotiated to April 24th, 2018. On April 12, 2016, the Company received notice of partial conversion of this note in the amount of $58,000 convertible into 725,000 shares of restricted common stock at a price of $0.08 per share. Our management has determined that other than as disclosed above, there were no reportable subsequent events to be disclosed. |
2. Summary of Significant Acc25
2. Summary of Significant Accounting Policies (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Basis of Accounting | Basis of Accounting The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The Company has elected a fiscal year ending on December 31. Certain balance sheet reclassifications have been made to prior period balances to reflect the current periods presentation format; such reclassifications had no impact on the Companys consolidated statements of operations or consolidated statements of cash flows and had no material impact on the Companys consolidated balance sheets. | Basis of Accounting The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The Company has elected a fiscal year ending on December 31. |
Use of Estimates in Financial Reporting | Use of Estimates in Financial Reporting The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the financial statements in the period they are deemed to be necessary. Significant estimates made in the accompanying financial statements include but are not limited to following: those related to revenue recognition, allowance for doubtful accounts and unbilled services, lives and recoverability of equipment and other long-lived assets, contingencies and litigation. The Company is subject to uncertainties, such as the impact of future events, economic, environmental and political factors, and changes in the business climate; therefore, actual results may differ from those estimates. When no estimate in a given range is deemed to be better than any other when estimating contingent liabilities, the low end of the range is accrued. Accordingly, the accounting estimates used in the preparation of the Company's financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company's operating environment changes. Changes in estimates are made when circumstances warrant. Such changes and refinements in estimation methodologies are reflected in reported results of operations; if material, the effects of changes in estimates are disclosed in the notes to the financial statements. | Use of Estimates in Financial Reporting The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the financial statements in the period they are deemed to be necessary. Significant estimates made in the accompanying financial statements include but are not limited to following: those related to revenue recognition, allowance for doubtful accounts and unbilled services, lives and recoverability of equipment and other long-lived assets, contingencies and litigation. The Company is subject to uncertainties, such as the impact of future events, economic, environmental and political factors, and changes in the business climate; therefore, actual results may differ from those estimates. When no estimate in a given range is deemed to be better than any other when estimating contingent liabilities, the low end of the range is accrued. Accordingly, the accounting estimates used in the preparation of the Company's financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company's operating environment changes. Changes in estimates are made when circumstances warrant. Such changes and refinements in estimation methodologies are reflected in reported results of operations; if material, the effects of changes in estimates are disclosed in the notes to the financial statements. |
Unaudited Interim Financial Statements | Unaudited Interim Financial Statements The accompanying unaudited financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. | Reclassifications Certain balance sheet reclassifications have been made to prior period balances to reflect the current periods presentation format; such reclassifications had no impact on the Companys consolidated statements of operations or consolidated statements of cash flows and had no material impact on the Companys consolidated balance sheets. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents are held in operating accounts at a major financial institution. The company maintains its cash balances in three national financial institutions. Accounts at these institutions are insured by Federal Deposit Insurance Corporation insurance for up to $250,000 per institution. For the years ended December 31, 2015 and 2014, the Company had uninsured balances of $267,238 and $0, respectively. Management believes that these financial institutions are financially sound and the risk of loss is minimal. | |
Restricted Cash | Restricted Cash Restricted cash is recorded at cost, which approximates fair value. There was no restricted cash included in current assets on our balance sheets as of December 31, 2015 and December 31, 2014. Restricted cash previously related to remaining proceeds from a short-term note entered into on March 21, 2014 and fully satisfied on May 15, 2014 (see Note 7. Convertible Notes Payable). | |
Inventory | Inventory Inventory is comprised of products and equipment owned by the Company to be sold to end-customers. Inventory is valued at cost, based on the specific identification method, unless and until the market value for the inventory is lower than cost, in which case an allowance is established to reduce the valuation to market value. As of December 31, 2014, market values of all of the Companys inventory were greater than cost, and accordingly, no such valuation allowances was recognized. As of December 31, 2015 and December 31, 2014, the Company had capitalized $57,170 and $40, 051 of costs associated with the construction of demo inventory, including but not limited to parts for the assembly of scalable cultivation systems; and accordingly, no amortization or depreciation expense was recorded related to this asset for each year, then ended. | |
Deposits | Deposits Deposits is comprised of advance payments made to third parties, primarily for inventory for which the Company has not yet taken title. When the Company takes title to inventory for which deposits are made, the related amount is classified as inventory, then recognized as a cost of revenues upon sale (see Costs of Revenues below). | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets is primarily comprised of advance payments made to third parties for independent contractors services or other general expenses. Prepaid services and general expenses are amortized over the applicable periods which approximate the life of the contract or service period. | |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at the net value of face amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and, based on a method of specific identification of any accounts receivable for which it deems the net realizable value to be less than the gross amount of accounts receivable recorded, establishes an allowance for doubtful accounts for those balances. In determining its need for an allowance for doubtful accounts, the Company considers historical experience, analysis of past due amounts, client creditworthiness and any other relevant available information. However, the Companys actual experience may vary from its estimates. If the financial condition of its clients were to deteriorate, resulting in their inability or unwillingness to pay the Companys fees, it may need to record additional allowances or write-offs in future periods. This risk is mitigated to the extent that the Company receives retainers from its clients prior to performing significant services. The allowance for doubtful accounts, if any, is recorded as a reduction in revenue to the extent the provision relates to fee adjustments and other discretionary pricing adjustments. To the extent the provision relates to a client's inability to make required payments on accounts receivables, the provision is recorded in operating expenses. As of December 31, 2015 and December 31, 2014 our allowance for doubtful accounts was $8,419 and $9,338, respectively. For December 31, 2015 and December 31, 2014, we recorded bad debt expense of $30,753 and $9,338, respectively, which is reflected as a component of general and administrative expenses on the consolidated statement of operations. | |
Significant Clients and Customers | Significant Clients and Customers For the three months ended June 30, 2016, four customers individually accounted for $494,003 of the Companys total revenues; these customers accounted for approximately 79% of the Companys total revenues for the period. For the six months ended June 30, 2016, six customers individually accounted for $834,907 of the Companys total revenues; these customers accounted for approximately 71% of the Companys total revenues for the period. For the three months ended June 30, 2015, two customers individually accounted for 10% or more of the Companys revenues; these customers accounted for approximately 63% of the Companys total revenues for the period. For the six months ended June 30, 2015, three customers individually accounted for 10% or more of the Companys revenues; these customers accounted for approximately 70% of the Companys total revenues for the period. For the three months ended June 30, 2014, three customers individually accounted for 10% or more and 65% in aggregate of the Companys total revenues. For the six months ended June 30, 2014, three customers individually accounted for 10% or more and 66% in aggregate of the Companys total revenues. | Significant Customers For the year ended December 31, 2015 and December 31, 2014, in the aggregate, three customers and two customers, respectively, accounted for 74% and 52% of the Companys total revenues for each respective period. On a geographical basis, for the year ended December 31, 2015, approximately 91% and 9% of our total revenues were generated from the United States and Canada, respectively. For the year ended December 31, 2014, approximately 70% and 30% of our total revenues for the period were generated from the United States and Canada, respectively. |
Property and Equipment, net | Property and Equipment, net Property and Equipment is stated at net book value, cost less depreciation. Maintenance and repairs are expensed as incurred. Depreciation of owned equipment is provided using the straight-line method over the estimated useful lives of the assets, ranging from two to seven years. Depreciation of capitalized construction in progress costs, a component of property and equipment, net, begins once the underlying asset is placed into service. Property and equipment is reviewed for impairment as discussed below under Accounting for the Impairment of Long-Lived Assets. The Company had not capitalized any interest as of December 31, 2014 and 2013. | |
Accounting for the Impairment of Long-Lived Assets | Accounting for the Impairment of Long-Lived Assets The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Upon such an occurrence, recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to forecasted undiscounted net cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. For long-lived assets held for sale, assets are written down to fair value, less cost to sell. Fair value is determined based on discounted cash flows, appraised values or management's estimates, depending upon the nature of the assets. The Company did not record any impairment charges related to long-lived assets during the year ended December 31, 2015 and December 31, 2014. | |
Beneficial Conversion Feature | Beneficial Conversion Feature If the conversion features of conventional convertible debt provides for a rate of conversion that is below market value at issuance, this feature is characterized as a beneficial conversion feature (BCF). A BCF is recorded by the Company as a debt discount pursuant to Financial Accounting Standards Board (FASB) Accounting Standards Codification (ACF) Topic 470-20 Debt with Conversion and Other Options | |
Revenue Recognition | Revenue Recognition Revenue is recognized in accordance with FASB ASC Topic 605, Revenue Recognition The Company primarily generates revenues from professional services consulting agreements. These arrangements are generally entered into on a time basis, for a fixed-fee or on a contingent fee basis. Generally, a prepayment or retainer is required prior to performing services. Revenues from time-based engagements are recognized as the hours are incurred by the Company. Revenues from fixed-fee engagements are recognized under the completed or proportional performance methods. Management reviews arrangement to determine whether or not the fixed-fee is for a final deliverable or act which is significant to the arrangement as a whole. If it is, revenue is recognized under the completed performance method, in which revenue is recognized once the final act or deliverable is performed or delivered. Revenue recognized under the proportional performance method is recognized as services are performed. Under this method, the Company estimates the amount of completed work in comparison to the total services to be provided under the arrangement or deliverable in order to determine the amount of revenue to be recognized. Revenue recognition is affected by a number of factors that change the estimated amount of work required to complete the deliverable, such as changes in scope, timing, awaiting notification of license award from local government, and the level of client involvement. Losses, if any, on fixed-fee engagements are recognized in the period in which the loss first becomes probable and reasonably estimable. During the year ended December 31, 2015 and December 31, 2014, no such losses have occurred. The Company believes if an engagement terminates prior to completion it can recover the costs incurred related to the services provided. The Company occasionally enters into arrangements for which revenues are contingent upon achieving a pre-determined deliverable or future outcome. Any contingent revenue for these arrangements is not recognized until the contingency is resolved and collectability is reasonably assured. The Companys arrangements with clients may include terms to deliver multiple services or deliverables. These contracts specifically identify the services to be provided with the corresponding deliverable. The value for each deliverable is determined based on the prices charged when each element is sold separately or by other vendor-specific objective evidence (VSOE), or estimates of stand-alone selling prices. Revenues are recognized in accordance with the Companys accounting policies for the elements as described above. The elements qualify for separation when the deliverables have value on a stand-alone basis and the value of the separate elements can be established by VSOE or an estimated selling price. While assigning values and identifying separate elements requires judgment, selling prices of the separate elements are generally readily identifiable as the Company also sells those elements individually outside of a multiple services engagement. Contracts with multiple elements typically incorporate a fixed-fee or hourly pricing structure. Arrangements are typically terminable by either party upon sufficient notice and do not include provisions for refunds relating to services provided. Differences between the timing of billings and the recognition of revenue are recognized as either unbilled revenue (a component of accounts receivable) or deferred revenue on the consolidated balance sheet. Revenues recognized for services performed but not yet billed to clients are recorded as unbilled revenue. Reimbursable expenses, including those relating to travel, other out-of-pocket expenses and any third-party costs, are included as a component of revenues. Typically, an equivalent amount of reimbursable expenses are included in total direct client service costs. Reimbursable expenses related to time and materials and fixed-fee engagements are recognized as revenue in the period in which the expense is incurred and collectability is reasonably assured. Taxes collected from customers and remitted to governmental authorities are presented in the statement of operations on a net basis. Revenue from product and equipment sales, including delivery fees, is recognized when an order has been obtained, the price is fixed and determinable, the product is shipped, title has transferred and collectability is reasonably assured. Generally, our suppliers drop-ship orders to our clients with origin terms. For any shipments with destination terms, the Company defers revenue until delivery to the customer. During the year ended December 31, 2015 and December 31, 2014, sales returns were not significant and as such, no sales return allowance had been recorded as of December 31, 2015 nor at December 31, 2014. During the year ended December 31, 2015, the Company generated revenue from the sale of products to a company managed by a Director of the Company. | |
Costs of Revenues | Costs of Revenues The Companys policy is to recognize costs of revenue in the same manner in conjunction with revenue recognition. Cost of revenue includes the costs directly attributable to revenue recognition and includes compensation and fees for services, travel and other expenses for services and costs of products and equipment. Selling, general and administrative expenses are charged to expense as incurred. | |
Advertising and Promotion Costs | Advertising and Promotion Costs Advertising and promotion costs are included as a component of selling and marketing expense and are expensed as incurred. During the year ended December 31, 2015 and December 31, 2014, these costs were $79,989 and $29,858, respectively. | |
Shipping and Handling Costs | Shipping and Handling Costs For product and equipment sales, shipping and handling costs are included as a component of cost of revenues. | |
Stock-Based Compensation | Stock-Based Compensation Restricted shares are awarded to employees and service providers and entitle the grantee to receive shares of common stock at the end of the established vesting period. The fair value of the grant is based on the stock price on the date of grant. We recognize related compensation costs on a straight-line basis over the requisite vesting period of the award, which to date hasbeen one year from the grant date. During the years ended December 31, 2015 and December 31, 2014, stock-based compensation expense for restricted shares was $319,187 and $3,370,128, respectively. Compensation expense for warrants and options is based on the fair value of the instruments on the grant date, which is determined using the Black-Scholes valuation model, and are expensed over the expected term of the awards. During the year ended December 31, 2015 and December 31, 2014, compensation expense for warrants and options was $0 and $146,551, respectively. | |
Income Taxes | Income Taxes Our corporate status changed from an S-Corporation, which it had been since inception, to a C-Corporation during the year ended December 31, 2014. As provided in Section 1361 of the Internal Revenue Code, for income tax purposes, S-Corporations are not subject to corporate income taxes; instead, the owners are taxed on their proportionate share of the S-Corporations taxable income. Accordingly, we were only subject to income taxes for a portion of 2014. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns in accordance with applicable accounting guidance for accounting for income taxes, using currently enacted tax rates in effect for the year in which the differences are expected to reverse. We record a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized. For the year ended December 31, 2015 and December 31, 2014, due to cumulative losses since our corporate status changed, we recorded a valuation allowance against our deferred tax asset that reduced our income tax benefit for the period to zero. As of December 31, 2015 and December 31, 2014, we had no liabilities related to federal or state income taxes and the carrying value of our deferred tax asset was zero. The years 2010 to 2015 remain subject to examination by the Companys major tax jurisdictions | |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share The Company reports net income (loss) per common share in accordance with FASB ASC 260, Earnings per Share. This statement requires dual presentation of basic and diluted earnings with a reconciliation of the numerator and denominator of the earnings per share computations. Basic net income (loss) per share is computed by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period and excludes the effects of any potentially dilutive securities. Diluted net income (loss) per share gives effect to any dilutive potential common stock outstanding during the period. The computation does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings. Due to the Companys net losses for the three and six months ended June 30, 2016 and June 30, 2015, any potentially dilutive shares outstanding as of June 30, 2016 and June 30, 2015 respectively, were not presented in the EPS computations, as their effect would have been antidilutive. | Net Income (Loss) Per Common Share The Company reports net income (loss) per common share in accordance with FASB ASC 260, Earnings per Share. This statement requires dual presentation of basic and diluted earnings with a reconciliation of the numerator and denominator of the earnings per share computations. Basic net income (loss) per share is computed by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period and excludes the effects of any potentially dilutive securities. Diluted net income (loss) per share gives effect to any dilutive potential common stock outstanding during the period. The computation does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings. |
Related Party Transactions | Related Party Transactions The Company follows FASB ASC subtopic 850-10, Related Party Disclosures Pursuant to ASC 850-10-20, related parties include: a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 8251015, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. Material related party transactions are required to be disclosed in the consolidated financial statements, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which statements of operation are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which statements of operations are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. During the year ended December 31, 2015, the Company generated revenue from the sale of products to a company managed by a Director of the Company. See Note 10. Related Party Transactions for associated disclosures. | |
Reclassifications | Unaudited Interim Financial Statements The accompanying unaudited financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. | Reclassifications Certain balance sheet reclassifications have been made to prior period balances to reflect the current periods presentation format; such reclassifications had no impact on the Companys consolidated statements of operations or consolidated statements of cash flows and had no material impact on the Companys consolidated balance sheets. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company has reviewed all the recently issued, but not yet effective, accounting pronouncements and it does not believe any of these pronouncements will have a material impact on the Company. | Recent Accounting Pronouncements In August 2014, the FASB issued ASU 2014-15 Presentation of Financial Statements Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern (ASU 2014-15). By incorporating and expanding upon certain principles that are currently in U.S. auditing standards, ASU 2014-15 requires management to assess whether there is substantial doubt about the entitys ability to continue as a going concern . Specifically, ASU 2014-15 (1) provides a definition of the term substantial doubt, (2) requires an evaluation every reporting period including interim periods, (3) provides principles for considering the mitigating effect of managements plans, (4) requires certain disclosures when substantial doubt is alleviated as a result of consideration of managements plans, (5) requires an express statement and other disclosures when substantial doubt is not alleviated, and (6) requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company has not elected to early adopt the provisions of ASU 2014-15, and accordingly, the requirements of ASU 2014-15 will apply beginning with the year ended December 31, 2016. The Company is currently evaluating the effects, if any, that the application of ASU 2014-15 will have on disclosures associated with its consolidated financial statements. In May 2014, the FASB issued ASU 2014-9 Revenue from Contracts with Customers (Topic 606) (ASU 2014-9), which provides a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. This guidance is effective for annual reporting and interim periods beginning after December 15, 2016 and allows for either full retrospective or modified retrospective application, with early adoption not permitted. Accordingly, the standard becomes effective for the Company on January 1, 2017. The Company is currently evaluating the adoption method it will apply and the impact that this guidance will have on its consolidated financial statements and related disclosures. |
3. Accounts Receivable, net (Ta
3. Accounts Receivable, net (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Receivables [Abstract] | ||
Accounts Receivable | 30-Jun-16 31-Dec-15 Gross accounts receivable $ 154,222 $ 56,704 Less: allowance for doubtful accounts (2,486 ) (8,419 ) Accounts receivable, net $ 151,736 $ 48,285 | December 31, 2015 December 31, 2014 Gross accounts receivable $ 56,704 $ 66,980 Less: allowance for doubtful accounts (8,419 ) (9,338 ) Accounts receivable, net $ 48,285 $ 57,642 |
4. Deposits (Tables)
4. Deposits (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Banking and Thrift [Abstract] | ||
Deposits | 30-Jun-16 31-Dec-15 Inventory deposits $ 6,500 $ 9,345 Operating lease deposits included in other Assets 4,500 4,500 Deposits $ 11,000 $ 13,845 | December 31, 2015 December 31, 2014 Inventory deposits $ 9,345 $ 179,941 Operating lease deposits 0 2,000 Deposits $ 9,345 $ 181,941 |
6. Prepaid expenses and other28
6. Prepaid expenses and other current assets (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Prepaid Expenses And Other Current Assets Tables | |
Prepaid Expenses and Other Current Assets | 30-Jun-16 31-Dec-15 Prepaid Insurance $ 2,350 $ 5,572 Prepaid Legal Services (Retainers) 37,900 12,900 Other prepayments to suppliers 10,513 13,645 Deposits $ 50,763 $ 32,117 |
6. Property and Equipment, net
6. Property and Equipment, net (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Property and Equipment, Net | 30-Jun-16 31-Dec-15 Office equipment $ 9,275 $ 7,472 Furniture and fixtures 8,635 8,777 Machinery and equipment 2,337 2,336 Property and equipment, gross 20,247 18,585 Less: accumulated depreciation (7,614 ) (5,137 ) Property and equipment, net $ 12,633 $ 13,448 | December 31, 2015 December 31, 2014 Office equipment $ 7,472 $ 5,742 Furniture and fixtures 8,777 2,935 Machinery and equipment 2,336 1,250 Property and equipment, gross 18,585 9,927 Less: accumulated depreciation (5,137 ) (1,562 ) Property and equipment, net $ 13,448 $ 8,365 |
8. Notes Payable (Tables)
8. Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes Payable Tables | |
Notes Payable | Principal balance Loan Discount Accrued Interest Total Balance as of December 31, 2015 $ 71,500 (11,248 ) $ $ 60,252 Issued in the period 150,000 (10,935 ) 139,065 Amortization of debt discount 10,075 10,075 Converted into shares of common stock (71,500 ) 1,173 (70,327 ) Balance as of June 30, 2016 $ 150,000 (10,935 ) $ $ 139,065 |
8. Accrued and Other Current 31
8. Accrued and Other Current Liabilities (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Payables and Accruals [Abstract] | ||
Accrued and Other Current Liabilities | 30-Jun-16 31-Dec-15 Accrued payroll liabilities $ 9,808 $ 18,185 Accrual for products sold and shipped (in transit) 46,417 64,050 Other accruals 15,525 11,233 Accrued and other current liabilities $ 71,750 $ 93,468 | December 31, 2015 December 31, 2014 Accrued legal fees $ 0 0 Accrued payroll liabilities 18,185 11,522 Accrued accounting fees 0 5,000 Due to directors 0 1,999 Accrual for inventory products sold and shipped (in transit) 64,050 0 Other 11,233 5,488 Accrued and other current liabilities $ 93,468 $ 125,518 |
9. Net Income (Loss) per Comm32
9. Net Income (Loss) per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Common Share | Year Ended Year Ended December 31, 2015 December 31, 2014 Net income (loss) $ (515,653 ) $ (3,619,192 ) Weighted average shares used for basic net income (loss) per common share 44,637,046 32,542,940 Incremental diluted shares Weighted average shares used for diluted net income (loss) per common share 44,637,046 32,542,940 Net income (loss) per common share: Basic $ (0.11 ) $ (0.01 ) Diluted $ (0.11 ) $ (0.01 ) |
11. Commitments and Contingen33
11. Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments And Contingencies Tables | |
Commitments and Contingencies | Year Amount 2016 $ 54,000 2017 $ 54,000 2018 $ 54,000 2019 $ 56,320 2020 $ 33,610 Total $ 251,930 |
12. Stock-based Compensation (T
12. Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Restricted Share Award Activity | Restricted Shares Weighted Average Common Stock Grant Date Fair Value Outstanding unvested at December 31, 2014 $ Granted 150,000 0.94 Vested restricted shares Forfeited Outstanding unvested at December 31, 2015 150,000 0.94 Granted 164,981 0.21 Vested restricted shares (100,000 ) 0.94 Forfeited (50,000 ) 0.94 Outstanding unvested at December 31, 2015 164,981 $ 0.94 |
Warrant Award Activity | Common Stock Warrants Weighted Average Grant Date Fair Value Outstanding unvested at December 31, 2013 $ Granted 250,000 0.59 Exercised Expired or forfeited Outstanding unvested at December 31, 2014 250,000 0.59 Granted Exercised Expired or forfeited Outstanding unvested at December 31, 2015 250,000 $ 0.59 Vested at December 31, 2015 250,000 $ 0.59 Unvested at December 31, 2015 $ |
13. Income Taxes (Tables)
13. Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | December 31, 2015 December 31, 2014 Tax benefit at the US statutory rate of 34% $ 175,322 $ 1,230,525 State income tax benefit 23,875 $ 167,569 Non-deductible expenses including non-deductible pre-merger losses (773 ) (2,057 ) Change in valuation allowance (198,424 ) (1,396,037 ) Total income tax benefit $ $ |
Deferred tax assets | December 31, 2015 December 31, 2014 Tax benefit at the US statutory rate of 34% $ 175,322 $ 1,230,525 State income tax benefit 23,875 $ 167,569 Non-deductible expenses including non-deductible pre-merger losses (773 ) (2,057 ) Change in valuation allowance (198,424 ) (1,396,037 ) Total income tax benefit $ $ |
1. Description of Business (Det
1. Description of Business (Details Narrative) | Dec. 31, 2015shares |
Description Of Business Details Narrative | |
Subsidiary Ownership, Shares | 31,710,628 |
Subsidiary Ownership, Percentage | 78.44% |
3. Accounts Receivable, net - A
3. Accounts Receivable, net - Accounts Receivable (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Receivables [Abstract] | |||
Gross accounts receivable | $ 154,222 | $ 56,704 | $ 66,980 |
Less: allowance for doubtful accounts | (2,486) | (8,419) | (9,338) |
Accounts receivable, net | $ 151,736 | $ 48,285 | $ 57,642 |
3. Accounts Receivable, net (De
3. Accounts Receivable, net (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Receivables [Abstract] | ||
Bad Debt Expense | $ 30,753 | $ 9,338 |
4. Deposits - Deposits (Details
4. Deposits - Deposits (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Banking and Thrift [Abstract] | |||
Inventory deposits | $ 6,500 | $ 9,345 | $ 179,941 |
Operating lease deposits | 4,500 | 0 | 2,000 |
Deposits | $ 11,000 | $ 9,345 | $ 181,941 |
5. Inventory (Details Narrative
5. Inventory (Details Narrative) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | |||
Finished Goods | $ 67,728 | $ 67,435 | $ 44,606 |
6. Property and Equipment, ne41
6. Property and Equipment, net - Property and Equipment, Net (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Property and equipment, gross | $ 20,247 | $ 18,585 | $ 9,927 |
Less: accumulated depreciation | (7,614) | (5,137) | (1,562) |
Property and equipment, net | 12,633 | 13,448 | 8,365 |
Office Equipment | |||
Property and equipment, gross | 9,275 | 7,472 | 5,742 |
Furniture and Fixtures | |||
Property and equipment, gross | 8,635 | 8,777 | 2,935 |
Machinery and Equipment | |||
Property and equipment, gross | $ 2,337 | $ 2,336 | $ 1,250 |
6. Property and Equipment, ne42
6. Property and Equipment, net (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | ||||||
Depreciation Expense | $ 1,256 | $ 758 | $ 2,477 | $ 1,474 | $ 3,575 | $ 1,077 |
6. Prepaid expenses and other43
6. Prepaid expenses and other current assets (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Prepaid Expenses And Other Current Assets Details | ||
Prepaid Insurance | $ 2,350 | $ 5,572 |
Prepaid Legal Services (Retainers) | 37,900 | 12,900 |
Other prepayments to suppliers | 10,513 | 13,645 |
Deposits | $ 50,763 | $ 32,117 |
8. Accrued and Other Current 44
8. Accrued and Other Current Liabilities - Accrued and Other Current Liabilities (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||||
Accrued legal fees | $ 0 | $ 0 | ||
Accrued payroll liabilities | $ 9,808 | 18,185 | $ 18,185 | 11,522 |
Accrued accounting fees | 0 | 5,000 | ||
Due to directors | 0 | 1,999 | ||
Accrual for inventory products sold and shipped (in transit) | 46,417 | 64,050 | 64,050 | 0 |
Other | 15,525 | 11,233 | 11,233 | 5,488 |
Accrued and other current liabilities | $ 71,750 | $ 93,468 | $ 93,468 | $ 125,518 |
8. Notes Payable (Details)
8. Notes Payable (Details) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Balance as of December 31, 2015 | |
Principal Balance | $ 71,500 |
Loan Discount | (11,248) |
Accrued Interest | |
Total | 60,252 |
Issued in Period | |
Principal Balance | 150,000 |
Loan Discount | (10,935) |
Accrued Interest | |
Total | 139,065 |
Amortization Of Debt Discount | |
Principal Balance | |
Loan Discount | 10,075 |
Accrued Interest | |
Total | 10,075 |
Converted into shares of common shares | |
Principal Balance | (71,500) |
Loan Discount | 1,173 |
Accrued Interest | |
Total | (70,327) |
Balance as of June 30, 2016 | |
Principal Balance | 150,000 |
Loan Discount | (10,935) |
Accrued Interest | |
Total | $ 139,065 |
9. Net Income (Loss) per Comm46
9. Net Income (Loss) per Common Share - Net Income (Loss) Per Common Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | ||||||
Net income (loss) | $ (84,775) | $ (43,614) | $ (98,332) | $ (270,452) | $ (515,653) | $ (3,619,192) |
Weighted average shares used for basic net income (loss) per common share | 44,637,046 | 32,542,940 | ||||
Incremental diluted shares | ||||||
Weighted average shares used for diluted net income (loss) per common share | 44,637,046 | 32,542,940 | ||||
Net income (loss) per common share: | ||||||
Basic | $ (.11) | $ (.01) | ||||
Diluted | $ (0.11) | $ (0.01) |
11. Commitments and Contingen47
11. Commitments and Contingencies (Details) | Dec. 31, 2015USD ($) |
Commitments And Contingencies Details | |
2,016 | $ 54,000 |
2,017 | 54,000 |
2,018 | 54,000 |
2,019 | 56,320 |
2,020 | 33,610 |
Total | $ 251,930 |
11. Commitments and Contingen48
11. Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments And Contingencies Details Narrative | ||
Rent Expense | $ 53,800 | $ 20,933 |
12. Stock-based Compensation -
12. Stock-based Compensation - Restricted Share Award Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Equity [Abstract] | ||
Outstanding Shares, Beginning | 150,000 | |
Outstanding Weighted Average Grant Date Fair Value, Beginning | $ 0.94 | |
Granted Shares | 164,981 | 150,000 |
Granted, Weighted Average Grant Date Fair Value | $ .21 | $ .94 |
Vested restricted shares, shares | (100,000) | |
Vested restricted shares, Weighted Average Grant Date Fair Value | $ .94 | |
Forfeited, Shares | (50,000) | |
Forfeited, Weighted Average Grant Date Fair Value | $ .94 | |
Outstanding Shares, End | 164,981 | 150,000 |
Outstanding Weighted Average Grant Date Fair Value, End | $ .94 | $ 0.94 |
12. Stock-based Compensation 50
12. Stock-based Compensation - Warrant Award Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Equity [Abstract] | ||
Warrants Outstanding, Shares, Beginning | 250,000 | |
Warrants Outstanding, Fair Value, Beginning | $ 0.59 | |
Granted, Shares | 250,000 | |
Granted, Fair Value | $ .59 | |
Warrants Outstanding, Shares, Ending | 250,000 | 250,000 |
Warrants Outstanding, Fair Value, Ending | $ 0.59 | $ 0.59 |
Vested, Shares | 250,000 | |
Vested, Fair value | $ 0.59 |
13. Income Taxes - Income Taxes
13. Income Taxes - Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit at the US statutory rate | $ 175,322 | $ 1,230,525 |
State income tax benefit | 23,875 | 167,569 |
Non-deductible expenses including non-deductible pre-merger losses | (773) | (2,057) |
Change in valuation allowance | (198,424) | (1,396,037) |
Total income tax benefit |
13. Income Taxes - Deferred Tax
13. Income Taxes - Deferred Tax Assets (liabilities) (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Income Taxes - Deferred Tax Assets Liabilities Details | ||
Net operating loss carryforwards | $ 76,630 | $ 16,361 |
Stock based compensation | 1,402,777 | 1,278,414 |
Beneficial conversion feature accumulated amortization | 13,791 | |
Valuation allowance | (1,493,199) | (1,294,775) |
Total deferred tax assets |
13. Income Taxes (Details Narra
13. Income Taxes (Details Narrative) | Dec. 31, 2015USD ($) |
Income Tax Disclosure [Abstract] | |
Net Operating Loss Carryforwards | $ 198,369 |