Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 11, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Brownie's Marine Group, Inc | |
Entity Central Index Key | 1,166,708 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 58,752,938 | |
Trading Symbol | BWMG | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash | $ 129,068 | $ 141,822 |
Accounts receivable, net of $11,000 and $11,000 allowance for doubtful accounts, respectively | 9,154 | 59,474 |
Accounts receivable - related parties | 87,770 | 41,270 |
Inventory | 669,103 | 654,213 |
Prepaid expenses and other current assets | 101,698 | 58,012 |
Other current assets - related parties | 3,020 | |
Deferred tax asset, net - current | 190 | 190 |
Total current assets | 996,983 | 958,001 |
Property and equipment, net | 67,752 | 85,712 |
Deferred tax asset, net - non-current | 2,330 | 2,330 |
Other assets | 6,649 | 6,649 |
Total assets | 1,073,714 | 1,052,692 |
Current liabilities | ||
Accounts payable and accrued liabilities | 333,916 | 349,946 |
Customer deposits and unearned revenue | 31,175 | 25,238 |
Royalties payable - related parties | 161,154 | 152,546 |
Other liabilities | 211,247 | 231,551 |
Other liabilities and accrued interest - related parties | 84,500 | |
Convertible debentures, net | 312,743 | 371,965 |
Notes payable | 5,648 | 6,099 |
Notes payable - related parties | 8,848 | 11,098 |
Total current liabilities | 1,064,731 | 1,232,943 |
Long-term liabilities | ||
Notes payable - long-term portion | 3,040 | 6,133 |
Total liabilities | 1,067,771 | 1,239,076 |
Commitments and contingencies | ||
Stockholders' equity (deficit) | ||
Preferred stock; $0.001 par value: 10,000,000 shares authorized; 425,000 issued and outstanding | 425 | 425 |
Common stock; $0.0001 par value; 1,000,000,000 shares authorized; and 58,707,938 and 86,825,138 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively | 5,873 | 8,681 |
Common stock payable; $0.0001 par value; 138,941 and 195,610 shares, respectively | 14 | 20 |
Additional paid-in capital | 8,669,791 | 8,665,565 |
Accumulated deficit | (8,670,160) | (8,861,075) |
Total stockholders' equity (deficit) | 5,943 | (186,384) |
Total liabilities and stockholders' equity (deficit) | $ 1,073,714 | $ 1,052,692 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 11,000 | $ 11,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, share issued | 425,000 | 425,000 |
Preferred stock, share outstanding | 425,000 | 425,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock,shares issued | 58,707,938 | 86,825,138 |
Common stock, share outstanding | 58,707,938 | 86,825,138 |
Common stock payable, par value | $ 0.0001 | $ 0.0001 |
Common stock payable, shares outstanding | 138,941 | 195,610 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Net revenues | ||||
Net revenues | $ 421,170 | $ 467,930 | $ 702,532 | $ 761,995 |
Net revenues - related parties | 224,748 | 243,283 | 334,760 | 413,726 |
Total net revenues | 645,918 | 711,213 | 1,037,292 | 1,175,721 |
Cost of net revenues | ||||
Cost of net revenues | 436,283 | 458,499 | 761,684 | 805,772 |
Royalties expense - related parties | 16,079 | 17,101 | 25,618 | 28,420 |
Total cost of net revenues | 452,362 | 475,600 | 787,302 | 834,192 |
Gross profit | 193,556 | 235,613 | 249,990 | 341,529 |
Operating expenses | ||||
Selling, general and administrative | 160,208 | 167,078 | 313,014 | 331,531 |
Research and development costs | 63 | 21 | 1,415 | 7,809 |
Total operating expenses | 160,271 | 167,099 | 314,429 | 339,340 |
Income (loss) from operations | 33,285 | 68,514 | (64,439) | 2,189 |
Other (income) expense, net | ||||
Debt settlement | (140,366) | (233,825) | ||
Other (income) expense, net | (10,337) | (1,755) | (37,119) | 2,231 |
Interest expense | 7,758 | 9,254 | 15,517 | 18,532 |
Interest expense - related parties | 203 | 73 | 203 | |
Total other (income) expense, net | (142,945) | 7,702 | (255,354) | 20,966 |
Net income (loss) before provision for income taxes | 176,230 | 60,812 | 190,915 | (18,777) |
Provision for income tax expense | 43 | 43 | ||
Net income (loss) | $ 176,230 | $ 60,769 | $ 190,915 | $ (18,820) |
Basic income (loss) per common share | ||||
Diluted income (loss) per common share | ||||
Basic weighted average common shares outstanding | 62,949,592 | 73,202,855 | 74,894,245 | 70,276,729 |
Diluted weighted average common shares outstanding | 68,790,924 | 116,874,166 | 80,735,576 | 70,276,729 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders' Equity (deficit) (Unaudited) - 6 months ended Jun. 30, 2016 - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Common Stock Payable [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2015 | $ 425 | $ 8,681 | $ 20 | $ 8,665,565 | $ (8,861,075) | $ (186,384) |
Balance, shares at Dec. 31, 2015 | 425,000 | 86,825,138 | 195,610 | |||
Payment of Related Party Interest to Stock | $ 2 | 71 | 73 | |||
Payment of Related Party Interest to Stock, shares | 16,052 | |||||
Return of Prior Employee Compensation | $ (2,840) | $ (6) | 2,840 | (6) | ||
Return of Prior Employee Compensation, shares | (28,403,252) | (56,669) | ||||
Conversion of Employee Compensation Payable to Stock | $ 30 | 1,315 | 1,345 | |||
Conversion of Employee Compensation Payable to Stock, shares | 270,000 | |||||
Net Income | 190,915 | 190,915 | ||||
Balance at Jun. 30, 2016 | $ 425 | $ 5,873 | $ 14 | $ 8,669,791 | $ (8,670,160) | $ 5,943 |
Balance, shares at Jun. 30, 2016 | 425,000 | 58,707,938 | 138,941 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows provided by operating activities: | ||
Net income (loss) | $ 190,915 | $ (18,820) |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||
Depreciation | 10,664 | 10,869 |
Amortization of leasehold improvements | 7,296 | 6,396 |
Gain on cancellation of debt | (234,678) | |
Shares issued for interest expenses | 73 | |
Shares issued for payroll compensation | 1,339 | |
Change in deferred tax asset, net | 43 | |
Changes in operating assets and liabilities: | ||
Change in accounts receivable, net | 50,320 | 9,956 |
Change in accounts receivable - related parties | (46,500) | 7,274 |
Change in inventory | (14,890) | (7,287) |
Change in prepaid expenses and other current assets | (43,687) | (115,694) |
Change in other current assets - related parties | 3,020 | (2,132) |
Change in other assets | (339) | |
Change in accounts payable and accrued liabilities | 75,408 | 98,108 |
Change in customer deposits and unearned revenue | 5,937 | (21,827) |
Change in other liabilities | (20,304) | (562) |
Change in other liabilities and accrued interest - related parties | 25,701 | |
Change in royalties payable - related parties | 8,608 | 27,118 |
Net cash (used in) provided by operating activities | (6,479) | 18,804 |
Cash flows from investing activities: | ||
Purchase of fixed assets | (6,805) | |
Net cash used in investing activities | (6,805) | |
Cash flows from financing activities: | ||
Principal reduction on convertible debentures | (472) | |
Principal payments on notes payable | (3,553) | (6,547) |
Proceeds from notes payable - related parties | 27,000 | |
Principal payments on note payable - related parties | (2,250) | (9,485) |
Net cash (used in) provided by financing activities | (6,275) | 10,968 |
Net change in cash | (12,754) | 22,967 |
Cash, beginning of period | 141,822 | 19,188 |
Cash, end of period | 129,068 | 42,155 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 416 | 77 |
Cash paid for income taxes | ||
Supplemental disclosures of non-cash investing activities and future operating activities: | ||
Conversion of convertible debentures to stock | 4,680 | |
Conversion of accrued payroll to stock - related party | 27,000 | |
Conversion of accrued payroll to stock | 1,345 | |
Conversion of accrued interest on note payable - related party to stock | 73 | 203 |
Conversion of accrued interest and fees on convertible debentures to stock | 6,280 | |
Dissolution of joint venture | 24,740 | |
Devaluation of related party stock receivable | 4,537 | |
Gain on debt cancellation | $ 234,678 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | 1. Description of business and summary of significant accounting policies Description of business Basis of Presentation The condensed consolidated financial statements as of June 30, 2016 and for the three and six month periods ended June 30, 2016 and 2015 are unaudited and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position as of June 30, 2016, and the results of operations for the three and six month periods ended June 30, 2016 and 2015, the statement of stockholders equity for the six months ended June 30, 2016 and the statements of cash flows for the six month periods ended June 30, 2016 and 2015. The condensed consolidated results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the entire year. The condensed consolidated balance sheet as of December 31, 2015 has been derived from the Companys audited financial statements for the year ended December 31, 2015. While management of the Company believes that the disclosures presented are adequate to make the information not misleading, these condensed consolidated financial statements should be read in conjunction with our audited financial statements and the footnotes thereto for the fiscal year ended December 31, 2015 as filed with the Securities and Exchange Commission as part of the Companys Form 10-K which was filed on March 29, 2016. Definition of fiscal year Use of estimates Reclassifications Going Concern The Company is behind on payments due for matured convertible debentures, related parties notes payable, accrued liabilities and interest related parties, and certain vendor payables. The Company is handling delinquencies on a case by case basis. However, there can be no assurance that cooperation the Company has received thus far will continue. Because the Company does not expect that existing operational cash flow will be sufficient to fund presently anticipated operations, this raises substantial doubt about BWMGs ability to continue as a going concern within one year from date the financial statements are issued. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing. BWMG has issued a number of convertible debentures in the past as an interim measure to finance working capital needs and may continue to raise additional capital through sale of restricted common stock or other securities, and obtaining some short term loans. The Company has previously paid for some legal and consulting services with restricted stock to maximize working capital and intends to continue this practice when possible. In addition, the Company implemented some cost saving measures and will continue to explore more to reduce operating expenses. If BWMG fails to raise additional funds when needed, or does not have sufficient cash flows from sales, it may be required to scale back or cease operations, liquidate assets and possibly seek bankruptcy protection. The accompanying consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty. Cash and equivalents Accounts receivable Inventory Property and, Equipment and Leasehold Improvements The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful lives of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability. Revenue recognition Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs, and depreciation costs. General and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Change in job performance, job conditions, and estimated profitability may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Revenue and costs incurred for time and material projects are recognized as the work is performed. Product development costs Advertising and marketing costs Customer deposits and returns policy Income taxes The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, they would make an adjustment to the valuation allowance which would reduce the provision for income taxes. The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Comprehensive income Stock-based compensation Beneficial conversion features on convertible debentures Fair value of financial instruments Level 1 - Quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. Level 2 - Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. An investments level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes observable requires significant judgment by the Company. Management considers observable data to be market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, provided by multiple, independent sources that are actively involved in the relevant market. The categorization of an investment within the hierarchy is based upon the pricing transparency of the investment and does not necessarily correspond to the Companys perceived risk of that investment. At June 30, 2016, and December 31, 2015, the carrying amount of cash, accounts receivable, accounts receivable related parties, customer deposits and unearned revenue, royalties payable related parties, other liabilities, other liabilities and accrued interest related parties, notes payable, notes payable related parties, and accounts payable and accrued liabilities approximate fair value because of the short maturity of these instruments. Earnings per common share New accounting pronouncements |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | 2. INVENTORY Inventory consists of the following as of: June 30, 2016 December 31, 2015 Raw materials $ 416,372 $ 422,115 Work in process Finished goods 252,731 232,098 $ 669,103 $ 654,213 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Prepaid Expenses and Other Current Assets | 3. PREPAID EXPENSES AND OTHER CURRENT ASSETS June 30, 2016 December 31, 2015 Prepaid inventory $ 16,779 $ 42,076 Prepaid insurance 10,097 8,819 Prepaid fixed assets 8,775 Prepaid legal 60,000 Prepaid other 6,047 7,117 $ 101,698 $ 58,012 |
Property and Equipment, Net
Property and Equipment, Net | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 4. PROPERTY AND EQUIPMENT, NET Property and equipment consists of the following as of: June 30, 2016 December 31, 2015 Factory and office equipment $ 62,633 $ 62,633 Tooling 59,149 59,149 Computer equipment and software 23,932 23,932 Vehicles 44,160 44,160 Leasehold improvements 43,779 43,779 233,653 233,653 Less: accumulated depreciation and amortization (165,901 ) (147,941 ) $ 67,752 $ 85,712 Depreciation expense totaled $5,332 and $10,664 for the three and six month periods ending June 30, 2016 and $5,342 and $10,869 for the three and six month periods ending June 30, 2015, respectively. |
Other Assets
Other Assets | 6 Months Ended |
Jun. 30, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | 5. OTHER ASSETS Other assets of $6,649 at June 30, 2016 and December 31, 2015, respectively, consisted solely of refundable deposits. |
Customer Credit Concentrations
Customer Credit Concentrations | 6 Months Ended |
Jun. 30, 2016 | |
Risks and Uncertainties [Abstract] | |
Customer Credit Concentrations | 6. CUSTOMER CREDIT CONCENTRATIONS The Company sells to three (3) entities owned by the brother of Robert Carmichael, the Companys Chief Executive Officer, and three (3) companies owned or controlled by the Chief Executive Officer as further discussed in Note 7. RELATED PARTIES TRANSACTIONS. Combined sales to these six (6) entities for the three months ended June 30, 2016 and 2015, represented 34.80% and 34.21% respectively, of total net revenues. Combined sales to these six (6) entities for the six months ended June 30, 2016 and 2015, represented 32.27% and 35.19% respectively, of total net revenues. |
Related Parties Transactions
Related Parties Transactions | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Parties Transactions | 7. RELATED PARTIES TRANSACTIONS Notes payable related parties Notes payable related parties consists of the following at June 30, 2016 and December 31, 2015: June 30, 2016 December 31, 2015 Promissory note payable to Chief Executive Officer, unsecured, payable in twelve monthly principal payments of $2,250 beginning June 15, 2015, with interest at 10% per annum with payments monthly in shares of stock based on the monthly weighted average price of the stock, maturing May 15, 2016. $ 8,848 $ 11,098 Less amounts due within one year (8,848 ) (11,098 ) Long-term portion of notes payable related parties $ $ Current portion of notes payable related parties $ 8,848 $ 11,098 Effective April 22, 2015, the Company issued Mr. Carmichael, Chief Executive Officer of the Company, an unsecured promissory note presented in the table above in consideration for a $27,000 advance. For the three months ended June 30, 2016 the Company converted no shares of accrued interest on the note payable. For the six months ended June 30, 2016 the Company converted $73 of accrued interest on the note payable related party into 16,052 shares of restricted stock. Net revenues and accounts receivable related parties The Company sells products to Brownies Global Logistics, LLC. (BGL), 3D Buoy and 940 Associates, Inc., affiliated with the Companys Chief Executive Officer. Terms of sale are more favorable than those extended to BWMGs regular customers, but no more favorable than those extended to Brownies strategic partners. Terms of sale to BGL approximate cost or include a nominal margin. These terms are consistent with those extended to Brownies strategic partners. Strategic partner terms on a per order basis include promotion of BWMGs technologies and Brownies brand, offered only on product or services not offered for resale, and must provide for reciprocal terms or arrangements to BWMG on strategic partners product or services. BGL is fulfilling the strategic partner terms by providing exposure for BWMGs technologies and Brownies brand in the yachting and exploration community world-wide through its operations. Combined net revenues from these entities for three months ended June 30, 2016, and 2015, were $1,931 and $28,582, respectively. Combined net revenues from these entities for six months ended June 30, 2016, and 2015, were $2,521 and $42,388 respectively. Accounts receivable from these three entities at June 30, 2016 was $4,593. Accounts receivable from these three entities at December 31, 2015 was $8,391. Royalties expense related parties Equity based compensation to employee Other liabilities and accrued interest related parties Other liabilities and accrued interest related parties consist of the following at: June 30, 2016 December 31, 2015 Year-end 2012 bonus payable to Chief Executive Officer $ $ 67,000 Year-end 2012 bonus payable to employee 17,500 $ $ 84,500 On April 29, 2016 the Board of Directors determined that is was not in the best interest of either the Company or the recipients to pay bonuses based on the current and foreseeable share price and cancelled the bonuses payable. The results of this action are included in a reduction of shares payable as reflected on the Statement of Stockholders Deficit and the Balance Sheet. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 6 Months Ended |
Jun. 30, 2016 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | 8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities consists of the following as of: June 30, 2016 December 31, 2015 Accounts payable trade $ 125,429 $ 59,916 Accrued payroll & fringe benefits 27,525 27,245 Accrued year-end bonuses 45,000 Accrued payroll taxes & withholding 19,610 36,520 Accrued interest 161,352 181,265 $ 333,916 $ 349,946 Balances due certain vendors are in arrears to varying degrees. The Company is handling all delinquent accounts on a case-by-case basis. |
Other Liabilities
Other Liabilities | 6 Months Ended |
Jun. 30, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | 9. OTHER LIABILITIES Other liabilities consist of the following as of: June 30, 2016 December 31, 2015 Short-term loans $ 195,782 $ 215,782 Asset purchase agreement payable 12,857 12,857 On-line training liability 2,608 2,912 $ 211,247 $ 231,551 The short-term loans are comprised of three (3) loans due on demand from unrelated parties. The loans have no other stated terms except one for $200,000 indicated it was for settlement of debenture debt. Therefore, the Company used the proceeds from that loan toward settlement of convertible debentures. On-line training certificates are provided with all hookah units sold. The training certificates entitle the holder to an on-line interactive course at no additional charge to the holder. The number of on-line training certificates issued per unit is the same as the number of divers the unit as sold is designed to accommodate (i.e., a three diver unit configuration comes with three on-line training certificates). The certificates have eighteen-month redemption from the time customer purchases the unit before expiration. The Company owes the on-line training vendor an agreed upon negotiated rate for on-line certificates redeemed prior to expiration, and payment is due upon redemption. The Company estimates the on-line training liability based on a historical redemption rate of approximately 10%. The Company continues to monitor and maintain a reserve for certificate redemption that approximates the historical redemption rate. |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Notes Payable | 10. NOTES PAYABLE Notes payable consists of the following as of June 30, 2016 and December 31, 2015: June 30, 2016 December 31, 2015 Promissory note payable, secured by vehicle underlying loan having carrying value of $8,688 and $12,232 at June 30, 2016 and December 31, 2015, respectively, bearing interest at 1.9% per annum, due in monthly principal and interest payments of $523, maturing on December 5, 2017 $ 8,688 $ 12,232 Less amounts due within one year (5,648 ) (6,099 ) Long-term portion of notes payable $ 3,040 $ 6,133 As of June 30, 2016, principal payments on the notes payable are as follows: 2016 $ 2,555 2017 6,133 2018 2019 2020 Thereafter $ 8,688 |
Convertible Debentures
Convertible Debentures | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Convertible Debentures | 11. CONVERTIBLE DEBENTURES Convertible debentures consist of the following at June 30, 2016 and December 31, 2015: Origination Date Maturity Date Interest Rate Origination Principal Origination Discount June 30, 2016 Debenture Balance June 30, 2016 Accrued Interest December 31, 2015 Debenture Balance December 31, 2015 Accrued Interest Ref. 11/27/2010 5/27/2011 10 % 125,000 (53,517 ) $ $ $ 58,750 $ 34,709 (1 ) 5/3/2011 5/5/2012 10 % 300,000 (206,832 ) 300,000 155,000 300,000 140,000 (2 ) 8/31/2011 8/31/2013 5 % 10,000 (4,286 ) 10,000 2,435 10,000 2,183 (3 ) 2/10/2012 2/10/2014 10 % 5,500 472 216 (4 ) 2/10/2012 2/10/2014 10 % 39,724 2,743 3,917 2,743 4,157 (4 ) $ 312,743 $ 161,352 $ 371,965 $ 181,265 Reference numbers in right hand column of table entitled Ref. refer to paragraphs with corresponding numbers that immediately follow this paragraph. (1) The Company purchased in exchange for convertible debenture exclusive rights for license of certain intellectual property from an unrelated party. The parties agreed to a royalty of 2.5% of net revenues generated from the sale, sub-license or use of the technology or a reasonable negotiated rate based on similar invention. The debenture was convertible to common shares of the Company at May 27, 2011, along with accrued interest at the option of the lender. Conversion price per share is 30% discount as determined from the weighted average of the preceding 12 trading days closing market price. The Company valued the BCF of the convertible debenture at $53,517, its intrinsic value. The Company accreted the discount to the convertible debenture and will recognize interest expense through repayment in full or conversion. Because there was no assurance of success and the invention was still in design and pre-prototype phase, the Company recorded the initial net value of the debenture, $71,483, as research and development expense during the year ended 2010. Both parties agreed to confidentiality regarding the invention during the pre-prototype stage. In addition, the Company agreed to provide the licensor with design services, as well as assist in completing the prototype and initial production at the Companys prevailing wholesale rate for comparable services. On February 10, 2012, the holder of this debenture entered into an agreement with a third party to sell/assign the $125,000 principal balance, plus accrued interest. The purchase was to be in installments with transfer/assignment of the debenture upon payment, referred to as Closings. The first Closing was on or about February 15, 2012 for $7,500, with that amount assigned/transferred. The second Closing, occurred 90 days after the first closing for $11,750 paid/assigned. All subsequent Closings were to be for $11,750 and occur in 30 day increments after the second closing. This was to continue until the full principal balance of $125,000, plus accrued interest is purchased or assigned. The holder of the convertible note has voluntarily dissolved and ceased operation. In February 2016 both parties agreed to cancel the agreement and all remaining principal and interest balances. (2) On May 3, 2011, the Company borrowed $300,000 in exchange for a convertible debenture. The Debenture bears 10% interest per annum. The lender may at any time convert any portion of the debenture to common shares at a 30% discount of the Market Price of the stock based on the average of the previous ten (10) days weighted average closing prices on the date prior to the notice of conversion. The Company may prepay the debenture plus accrued interest at any time before maturity. In addition, as further inducement for loaning the Company the funds, the Company granted the lender 300,000 and 600,000 warrants at $337.50 and $472.50 per share (after restatement for 1 for -1,350- reverse stock split), respectively. As a result, the Company allocated fair market value (FMV) to both the BCF and to the warrants, or $206,832, which was recorded as a discount against the debenture. The Company accreted the discount to the convertible debenture through maturity and will accrue interest expense until paid in full or converted. Before discount, the Company determined the FMV of the warrants as $45,000 using the Black-Scholes valuation model. (3) The Company borrowed $10,000 in exchange for a convertible debenture. The lender at their option may convert all or part of the note plus accrued interest into common stock at a price of thirty percent (30%) discount as determined from the average four (4) highest closing bid prices over the preceding five (5) trading days. The Company valued the BCF of the convertible debenture at $4,286, which was accreted to interest expense. (4) The Company entered into three new debenture agreements upon sale or assignment by the original lender. Because the stated terms of the new debenture agreement and principal amounts were significantly different from the original debenture, including analysis of the value of the beneficial conversion feature at the assignment or purchase date, the transactions are treated as extinguishment of the old debentures and recorded as new for accounting purposes. |
Authorization of Preferred Stoc
Authorization of Preferred Stock | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Authorization of Preferred Stock | 12. AUTHORIZATION OF PREFERRED STOCK During the second quarter of 2010, the holder of the majority of the Companys outstanding shares of common stock approved an amendment to the Companys Articles of Incorporation authorizing the issuance of 10,000,000 shares of preferred stock. The preferred stock as authorized has such voting powers, designations, preferences, limitations, restrictions and relative rights as may be determined by our Board of Directors of the Company from time to time in accordance with the provisions of the Florida Business Corporation Act. Before modification, the existing Articles of Incorporation did not authorize the issuance of shares of preferred stock. The Company authorized the preferred stock for the purpose of added flexibility in seeking capital and potential acquisition targets. The amendment authorizing the issuance of shares of preferred stock grants the Board authority, without further action by our stockholders, to designate and issue preferred stock in one or more series and to designate certain rights, preferences and restrictions of each series, any or all of which may be greater than the rights of the common stock. As of June 30, 2016, and December 31, 2015, the 425,000 shares of preferred stock are owned by the Companys Chief Executive Officer. The preferred shares have 250 to 1 voting rights over the common stock, and are convertible into 31,481 shares of common stock. The preferred stock votes with the Companys common stock, except as otherwise required under Florida law. Accordingly, Mr. Carmichael will have approximately 55% of the combined voting power of the Common Stock and Series A Convertible Preferred Stock, voting as a single class and will control the outcome of any corporate transaction or other matter submitted to the shareholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. COMMITMENTS AND CONTINGENCIES From time to time the Company is subject to legal proceedings, claims and litigation arising in the ordinary course of business, including matters relating to product liability claims. Such product liability claims sometimes involving wrongful death or injury have historically been covered by product liability insurance, which provided coverage for each claim up to $1,000,000. During the third quarter of 2014, the Company did not renew its product liability insurance since the renewal policy amount was cost prohibitive. The Company is currently seeking a new insurance carrier or alternative means to satisfy this potential liability exposure, as well as to fulfil the sales terms of some of our customers, which require the insurance coverage. As previously disclosed, we are co-defendants under an action filed by an individual in June 2013 in the Circuit Court of Broward County claiming personal injury resulting from use of a Brownies Third Lung. Plaintiff has claimed damages in excess of $1,000,000. The insurance carriers legal counsel indicates unfavorable outcome is possible, but not probable. We believe such claim is without merit and intend to continue to aggressively defend such action. In addition, as previously disclosed, we are also co-defendant under an action filed March 2015, in the Circuit Court of Broward County claiming personal injury resulting from the use of a Brownies Third Lung product. This claim falls outside the Companys period of insurance coverage. As a result of a miscommunication with legal counsel a default has been entered against the Company in this action for failing to file a timely response. The Company has obtained different legal representation in this matter and is now attempting to have the default set aside. The Company still believes the claim to be a Workers Compensation claim relating exclusively against another defendant and without merit, and plans to aggressively defend this action. On August 14, 2014, the Company entered into a new lease commitment. Terms of the new lease include thirty-seven month term commencing on September 1, 2014; payment of $5,367 security deposit; base rent of approximately $4,000 per month over the term of the lease plus sales tax; and payment of 10.76% of annual operating expenses (i.e. common areas maintenance), which is approximately $2,000 per month subject to periodic adjustment. Base rent expense attributable to the Companys headquarters facility totaled approximately $12,000 and $12,000 for the three-month periods ending June 30, 2016 and 2015 and $24,000 and $24,000 for the six-month periods ending June 30, 2016 and 2015, respectively. Future minimum rental payments required under our operating lease agreement are as follows: Year 1 $ 30,000 Year 2 24,000 Year 3 Year 4 Year 5 $ 54,000 |
Equity Incentive Plan
Equity Incentive Plan | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Equity Incentive Plan | 14. EQUITY INCENTIVE PLAN On August 22, 2007, the Company adopted an Equity Incentive Plan (the Plan). Under the Plan, Stock Options may be granted to employees, directors, and consultants in the form of Incentive Stock Options or Nonstatutory Stock Options. Stock Purchase Rights, time vested and/performance invested Restricted Stock, and Stock Appreciation Rights and Unrestricted Shares may also be granted under the Plan. The initial maximum number of shares that may be issued under the Plan shall be 297 shares, and no more than 75 Shares of Common Stock may be granted to any one Participant with respect to Options, Stock Purchase Rights and Stock Appreciation Rights during any one calendar year period. Common Stock to be issued under the Plan may be either authorized and unissued or shares held in treasury by the Company. The term of the Plan shall be ten years. The Board of Directors may amend, alter, suspend, or terminate the Plan at any time. All 297 options were issued under the plan prior to January 1, 2010, and to-date all remain outstanding. |
Equity Based Incentive_Retentio
Equity Based Incentive/Retention Bonuses | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Equity Based Incentive/Retention Bonuses | 15. EQUITY BASED INCENTIVE/RETENTION BONUSES On November 2, 2012, the Board of Directors consented to grant equity based bonuses to certain key employees and consultants as an incentive to retain their services. Stock incentive bonuses were to vest, and be paid out on May 2, 2013, contingent upon continued employment or service. The stock bonus price per share was calculated based on last closing price as reported on per the OTCBB prior to the grant date for a total of $75,100. Shares were set aside and reserved for this transaction. The Company accrued operating expense ratably from the time of the awards through May 2, 2013, when vested. Of the 61,852 vested shares, only 5,185 have been issued to-date. On April 29, 2016 the Board of Directors determined that is was not in the best interest of either the Company or the recipients to pay bonuses based on the current and foreseeable share price and cancelled the bonuses payable. The results of this action are included in a reduction of shares payable as reflected on the statement of stockholders deficit and the balance sheet. |
Interest Expense Non-Related Pa
Interest Expense Non-Related Parties and Other Expense (Income), Net | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Interest Expense Non-Related Parties and Other Expense (Income), Net | 16. INTEREST EXPENSE NON-RELATED PARTIES AND OTHER EXPENSE (INCOME), NET For the three months ended June 30, 2016, non-related parties interest expense of $7,758 is comprised of $7,695 interest on convertible debentures and $63 interest on notes payable and other interest. For the three months ended June 30, 2015, non-related parties interest expense of $9,254 is comprised of $9,177 interest on convertible debentures and $77 interest on notes payable and other interest. For the six months ended June 30, 2016, non-related parties interest expense of $15,517 is comprised of $15,398 interest on convertible debentures and $119 interest on notes payable and other interest. For the six months ended June 30, 2015, non-related parties interest expense of $18,532 is comprised of $18,354 interest on convertible debentures and $178 interest on notes payable and other interest. For the three months ended June 30, 2016, $142,945 other income, net is comprised primarily of $140,366 cancelation of an employee bonus payable, $2,009 insurance premium refund, $5,609 from the expiration of online training liability certificates, $2,632 other expense, net of individually insignificant items, and $1,755 other expense. For the six months ended June 30, 2016, $255,354 other income, net is comprised primarily of $93,459 cancelation of a convertible debenture and its interest, $140,366 cancelation of an employee bonus payable, together totaling $233,825, $14,970 royalty income, $11,331 from the expiration of online training liability certificates, $2,009 insurance premium refund and $8,674 other expense, net of individually insignificant items, $11,137 insurance audit adjustments partially offset by $3,471 product royalty income, $1,800 sale of fixed assets and $3,635 other income, net of individually insignificant items. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. SUBSEQUENT EVENT In July 2016, the Company issued 45,000 shares of restricted common stock to Mr. Purdon, an employee of the company, as compensation for the month of July 2016. |
Description of Business and S24
Description of Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Description of Business | Description of business |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements as of June 30, 2016 and for the three and six month periods ended June 30, 2016 and 2015 are unaudited and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position as of June 30, 2016, and the results of operations for the three and six month periods ended June 30, 2016 and 2015, the statement of stockholders equity for the six months ended June 30, 2016 and the statements of cash flows for the six month periods ended June 30, 2016 and 2015. The condensed consolidated results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the entire year. The condensed consolidated balance sheet as of December 31, 2015 has been derived from the Companys audited financial statements for the year ended December 31, 2015. While management of the Company believes that the disclosures presented are adequate to make the information not misleading, these condensed consolidated financial statements should be read in conjunction with our audited financial statements and the footnotes thereto for the fiscal year ended December 31, 2015 as filed with the Securities and Exchange Commission as part of the Companys Form 10-K which was filed on March 29, 2016. |
Definition of Fiscal Year | Definition of fiscal year |
Use of Estimates | Use of estimates |
Reclassifications | Reclassifications |
Going Concern | Going Concern The Company is behind on payments due for matured convertible debentures, related parties notes payable, accrued liabilities and interest related parties, and certain vendor payables. The Company is handling delinquencies on a case by case basis. However, there can be no assurance that cooperation the Company has received thus far will continue. Because the Company does not expect that existing operational cash flow will be sufficient to fund presently anticipated operations, this raises substantial doubt about BWMGs ability to continue as a going concern within one year from date the financial statements are issued. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing. BWMG has issued a number of convertible debentures in the past as an interim measure to finance working capital needs and may continue to raise additional capital through sale of restricted common stock or other securities, and obtaining some short term loans. The Company has previously paid for some legal and consulting services with restricted stock to maximize working capital and intends to continue this practice when possible. In addition, the Company implemented some cost saving measures and will continue to explore more to reduce operating expenses. If BWMG fails to raise additional funds when needed, or does not have sufficient cash flows from sales, it may be required to scale back or cease operations, liquidate assets and possibly seek bankruptcy protection. The accompanying consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty. |
Cash and Equivalents | Cash and equivalents |
Accounts Receivable | Accounts receivable |
Inventory | Inventory |
Property and, Equipment and Leasehold Improvements | Property and, Equipment and Leasehold Improvements The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful lives of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability. |
Revenue Recognition | Revenue recognition Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs, and depreciation costs. General and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Change in job performance, job conditions, and estimated profitability may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Revenue and costs incurred for time and material projects are recognized as the work is performed. |
Product Development Costs | Product development costs |
Advertising and Marketing Costs | Advertising and marketing costs |
Customer Deposits and Returns Policy | Customer deposits and returns policy |
Income Taxes | Income taxes The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, they would make an adjustment to the valuation allowance which would reduce the provision for income taxes. The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. |
Comprehensive Income | Comprehensive income |
Stock-based Compensation | Stock-based compensation |
Beneficial Conversion Features on Convertible Debentures | Beneficial conversion features on convertible debentures |
Fair Value of Financial Instruments | Fair value of financial instruments Level 1 - Quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. Level 2 - Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. An investments level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes observable requires significant judgment by the Company. Management considers observable data to be market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, provided by multiple, independent sources that are actively involved in the relevant market. The categorization of an investment within the hierarchy is based upon the pricing transparency of the investment and does not necessarily correspond to the Companys perceived risk of that investment. At June 30, 2016, and December 31, 2015, the carrying amount of cash, accounts receivable, accounts receivable related parties, customer deposits and unearned revenue, royalties payable related parties, other liabilities, other liabilities and accrued interest related parties, notes payable, notes payable related parties, and accounts payable and accrued liabilities approximate fair value because of the short maturity of these instruments. |
Earnings Per Common Share | Earnings per common share |
New Accounting Pronouncements | New accounting pronouncements |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consists of the following as of: June 30, 2016 December 31, 2015 Raw materials $ 416,372 $ 422,115 Work in process Finished goods 252,731 232,098 $ 669,103 $ 654,213 |
Prepaid Expenses and Other Cu26
Prepaid Expenses and Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Schedule of Prepaid Expenses and Other Current Assets | June 30, 2016 December 31, 2015 Prepaid inventory $ 16,779 $ 42,076 Prepaid insurance 10,097 8,819 Prepaid fixed assets 8,775 Prepaid legal 60,000 Prepaid other 6,047 7,117 $ 101,698 $ 58,012 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment consists of the following as of: June 30, 2016 December 31, 2015 Factory and office equipment $ 62,633 $ 62,633 Tooling 59,149 59,149 Computer equipment and software 23,932 23,932 Vehicles 44,160 44,160 Leasehold improvements 43,779 43,779 233,653 233,653 Less: accumulated depreciation and amortization (165,901 ) (147,941 ) $ 67,752 $ 85,712 |
Related Parties Transactions (T
Related Parties Transactions (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Related Parties Notes Payable | Notes payable related parties consists of the following at June 30, 2016 and December 31, 2015: June 30, 2016 December 31, 2015 Promissory note payable to Chief Executive Officer, unsecured, payable in twelve monthly principal payments of $2,250 beginning June 15, 2015, with interest at 10% per annum with payments monthly in shares of stock based on the monthly weighted average price of the stock, maturing May 15, 2016. $ 8,848 $ 11,098 Less amounts due within one year (8,848 ) (11,098 ) Long-term portion of notes payable related parties $ $ Current portion of notes payable related parties $ 8,848 $ 11,098 |
Schedule of Other Liabilities and Accrued Interest Related Party | Other liabilities and accrued interest related parties consist of the following at: June 30, 2016 December 31, 2015 Year-end 2012 bonus payable to Chief Executive Officer $ $ 67,000 Year-end 2012 bonus payable to employee 17,500 $ $ 84,500 |
Accounts Payable and Accrued 29
Accounts Payable and Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consists of the following as of: June 30, 2016 December 31, 2015 Accounts payable trade $ 125,429 $ 59,916 Accrued payroll & fringe benefits 27,525 27,245 Accrued year-end bonuses 45,000 Accrued payroll taxes & withholding 19,610 36,520 Accrued interest 161,352 181,265 $ 333,916 $ 349,946 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | Other liabilities consist of the following as of: June 30, 2016 December 31, 2015 Short-term loans $ 195,782 $ 215,782 Asset purchase agreement payable 12,857 12,857 On-line training liability 2,608 2,912 $ 211,247 $ 231,551 |
Notes Payable (Tables)
Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable consists of the following as of June 30, 2016 and December 31, 2015: June 30, 2016 December 31, 2015 Promissory note payable, secured by vehicle underlying loan having carrying value of $8,688 and $12,232 at June 30, 2016 and December 31, 2015, respectively, bearing interest at 1.9% per annum, due in monthly principal and interest payments of $523, maturing on December 5, 2017 $ 8,688 $ 12,232 Less amounts due within one year (5,648 ) (6,099 ) Long-term portion of notes payable $ 3,040 $ 6,133 |
Schedule of Debt Principal Payments on Notes Payable | As of June 30, 2016, principal payments on the notes payable are as follows: 2016 $ 2,555 2017 6,133 2018 2019 2020 Thereafter $ 8,688 |
Convertible Debentures (Tables)
Convertible Debentures (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Debentures | Convertible debentures consist of the following at June 30, 2016 and December 31, 2015: Origination Date Maturity Date Interest Rate Origination Principal Origination Discount June 30, 2016 Debenture Balance June 30, 2016 Accrued Interest December 31, 2015 Debenture Balance December 31, 2015 Accrued Interest Ref. 11/27/2010 5/27/2011 10 % 125,000 (53,517 ) $ $ $ 58,750 $ 34,709 (1 ) 5/3/2011 5/5/2012 10 % 300,000 (206,832 ) 300,000 155,000 300,000 140,000 (2 ) 8/31/2011 8/31/2013 5 % 10,000 (4,286 ) 10,000 2,435 10,000 2,183 (3 ) 2/10/2012 2/10/2014 10 % 5,500 472 216 (4 ) 2/10/2012 2/10/2014 10 % 39,724 2,743 3,917 2,743 4,157 (4 ) $ 312,743 $ 161,352 $ 371,965 $ 181,265 Reference numbers in right hand column of table entitled Ref. refer to paragraphs with corresponding numbers that immediately follow this paragraph. (1) The Company purchased in exchange for convertible debenture exclusive rights for license of certain intellectual property from an unrelated party. The parties agreed to a royalty of 2.5% of net revenues generated from the sale, sub-license or use of the technology or a reasonable negotiated rate based on similar invention. The debenture was convertible to common shares of the Company at May 27, 2011, along with accrued interest at the option of the lender. Conversion price per share is 30% discount as determined from the weighted average of the preceding 12 trading days closing market price. The Company valued the BCF of the convertible debenture at $53,517, its intrinsic value. The Company accreted the discount to the convertible debenture and will recognize interest expense through repayment in full or conversion. Because there was no assurance of success and the invention was still in design and pre-prototype phase, the Company recorded the initial net value of the debenture, $71,483, as research and development expense during the year ended 2010. Both parties agreed to confidentiality regarding the invention during the pre-prototype stage. In addition, the Company agreed to provide the licensor with design services, as well as assist in completing the prototype and initial production at the Companys prevailing wholesale rate for comparable services. On February 10, 2012, the holder of this debenture entered into an agreement with a third party to sell/assign the $125,000 principal balance, plus accrued interest. The purchase was to be in installments with transfer/assignment of the debenture upon payment, referred to as Closings. The first Closing was on or about February 15, 2012 for $7,500, with that amount assigned/transferred. The second Closing, occurred 90 days after the first closing for $11,750 paid/assigned. All subsequent Closings were to be for $11,750 and occur in 30 day increments after the second closing. This was to continue until the full principal balance of $125,000, plus accrued interest is purchased or assigned. The holder of the convertible note has voluntarily dissolved and ceased operation. In February 2016 both parties agreed to cancel the agreement and all remaining principal and interest balances. (2) On May 3, 2011, the Company borrowed $300,000 in exchange for a convertible debenture. The Debenture bears 10% interest per annum. The lender may at any time convert any portion of the debenture to common shares at a 30% discount of the Market Price of the stock based on the average of the previous ten (10) days weighted average closing prices on the date prior to the notice of conversion. The Company may prepay the debenture plus accrued interest at any time before maturity. In addition, as further inducement for loaning the Company the funds, the Company granted the lender 300,000 and 600,000 warrants at $337.50 and $472.50 per share (after restatement for 1 for -1,350- reverse stock split), respectively. As a result, the Company allocated fair market value (FMV) to both the BCF and to the warrants, or $206,832, which was recorded as a discount against the debenture. The Company accreted the discount to the convertible debenture through maturity and will accrue interest expense until paid in full or converted. Before discount, the Company determined the FMV of the warrants as $45,000 using the Black-Scholes valuation model. (3) The Company borrowed $10,000 in exchange for a convertible debenture. The lender at their option may convert all or part of the note plus accrued interest into common stock at a price of thirty percent (30%) discount as determined from the average four (4) highest closing bid prices over the preceding five (5) trading days. The Company valued the BCF of the convertible debenture at $4,286, which was accreted to interest expense. (4) The Company entered into three new debenture agreements upon sale or assignment by the original lender. Because the stated terms of the new debenture agreement and principal amounts were significantly different from the original debenture, including analysis of the value of the beneficial conversion feature at the assignment or purchase date, the transactions are treated as extinguishment of the old debentures and recorded as new for accounting purposes. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments Under Operating Lease | Future minimum rental payments required under our operating lease agreement are as follows: Year 1 $ 30,000 Year 2 24,000 Year 3 Year 4 Year 5 $ 54,000 |
Description of Business and S34
Description of Business and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Advertising and trade show expense | $ 1,240 | $ 600 | $ 3,237 | $ 2,319 |
Percentage of minimum deposit for custom and large tank fill systems | 50.00% | |||
Percentage of restocking fees | 15.00% | |||
Potentially dilutive shares included in dilutive earnings per share | 5,841,332 | 43,671,311 | 5,841,322 | |
Furniture, Fixtures, Equipment and Leasehold Improvements [Member] | Minimum [Member] | ||||
Property, Plant and Equipment, Useful Life | 3 years | |||
Furniture, Fixtures, Equipment and Leasehold Improvements [Member] | Maximum [Member] | ||||
Property, Plant and Equipment, Useful Life | 5 years |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 416,372 | $ 422,115 |
Work in process | ||
Finished goods | 252,731 | 232,098 |
Inventory | $ 669,103 | $ 654,213 |
Prepaid Expenses and Other Cu36
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Abstract] | ||
Prepaid inventory | $ 16,779 | $ 42,076 |
Prepaid insurance | 10,097 | 8,819 |
Prepaid fixed assets | 8,775 | |
Prepaid legal | 60,000 | |
Prepaid other | 6,047 | 7,117 |
Prepaid expense and other assets, current | $ 101,698 | $ 58,012 |
Property and Equipment Net (Det
Property and Equipment Net (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 5,332 | $ 5,342 | $ 10,664 | $ 10,869 |
Property and Equipment Net - Sc
Property and Equipment Net - Schedule of Property and Equipment, Net (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment, Gross | $ 233,653 | $ 233,653 |
Less: accumulated depreciation and amortization | (165,901) | (147,941) |
Property Plant and Equipment, Net | 67,752 | 85,712 |
Factory and Office Equipment [Member] | ||
Property, Plant and Equipment, Gross | 62,633 | 62,633 |
Tooling [Member] | ||
Property, Plant and Equipment, Gross | 59,149 | 59,149 |
Computer Equipment and Software [Member] | ||
Property, Plant and Equipment, Gross | 23,932 | 23,932 |
Vehicles [Member] | ||
Property, Plant and Equipment, Gross | 44,160 | 44,160 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment, Gross | $ 43,779 | $ 43,779 |
Other Assets (Details Narrative
Other Assets (Details Narrative) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Other Assets [Abstract] | ||
Other assets | $ 6,649 | $ 6,649 |
Customer Credit Concentrations
Customer Credit Concentrations (Details Narrative) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Related Party [Member] | Sales Revenue [Member] | ||||
Concentration credits risk | 34.80% | 34.21% | 32.27% | 35.19% |
Related Parties Transactions (D
Related Parties Transactions (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Apr. 22, 2015 | |
Due to employees | $ (8,848) | $ (8,848) | $ (11,098) | |||
Debt converted into shares value | $ 73 | |||||
Debt converted into shares | 16,052 | |||||
Net revenus from related parties | $ 224,748 | $ 243,283 | $ 334,760 | $ 413,726 | ||
Percentage of gross revenues per quarter | 2.50% | 2.50% | ||||
Share based compensation | $ 1,339 | |||||
Mr.Carmichael [Member] | ||||||
Due to employees | $ 27,000 | |||||
Chief Executive Officer [Member] | Brownie's Southport Divers, Inc., Brownie's Palm Beach Divers, and Brownie's Yacht Toys [Member] | ||||||
Net revenus from related parties | $ 222,816 | 214,701 | 332,239 | 371,338 | ||
Accounts receivable from related parties | 83,178 | 83,178 | 32,880 | |||
Chief Executive Officer [Member] | Brownie's Global Logistics, LLC. ("BGL"), 3D Buoy and 940 Associates, Inc [Member] | ||||||
Net revenus from related parties | 1,931 | $ 28,582 | 2,521 | $ 42,388 | ||
Accounts receivable from related parties | $ 4,593 | $ 4,593 | $ 8,391 | |||
Alexander F. Purdon [Member] | ||||||
Shares issued price per share | $ .10 | $ .10 | ||||
Share based compensation | $ 1,345 |
Related Parties Transactions -
Related Parties Transactions - Schedule of Related Parties Notes Payable (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Related Party Transactions [Abstract] | ||
Promissory note payable to Chief Executive Officer, unsecured, payable in twelve monthly principal payments of $2,250 beginning June 15, 2015, with interest at 10% per annum with payments monthly in shares of stock based on the monthly weighted average price of the stock, maturing May 15, 2016. | $ 8,848 | $ 11,098 |
Less amounts due within one year | (8,848) | (11,098) |
Long-term portion of notes payable | ||
Notes Payable, Related Parties, Current | $ 8,848 | $ 11,098 |
Related Parties Transactions 43
Related Parties Transactions - Schedule of Related Parties Notes Payable (Details) (Parenthetical) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Debt instruments maturity date | May 27, 2011 | |
Promissory Note Payable [Member] | ||
Debt instruments monthly principal payments | $ 2,250 | $ 2,250 |
Debt instruments interest rate | 10.00% | 10.00% |
Debt instruments maturity date | May 15, 2016 | May 15, 2016 |
Related Parties Transactions 44
Related Parties Transactions - Schedule of Other Liabilities and Accrued Interest Related Party (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Other liabilities | $ 84,500 | |
Year-End 2012 Bonus Payable to Chief Executive Officer [Member] | ||
Other liabilities | 67,000 | |
Year-End 2012 Bonus Payable to Employee [Member] | ||
Other liabilities | $ 17,500 |
Accounts Payable and Accrued 45
Accounts Payable and Accrued Liabilities - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accounts payable trade | $ 125,429 | $ 59,916 |
Accrued payroll & fringe benefits | 27,525 | 27,245 |
Accrued year-end bonuses | 45,000 | |
Accrued payroll taxes & withholding | 19,610 | 36,520 |
Accrued interest | 161,352 | 181,265 |
Accounts Payable and Accrued Liabilities, Total | $ 333,916 | $ 349,946 |
Other Liabilities (Details Narr
Other Liabilities (Details Narrative) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Other Liabilities Disclosure [Abstract] | |
Proceeds towards settlement of convertible debentures | $ 2,000,000 |
Online training liability historical redemption rate | 10.00% |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Other Liabilities Disclosure [Abstract] | ||
Short-term loans | $ 195,782 | $ 215,782 |
Asset purchase agreement payable | 12,857 | 12,857 |
On-line training liability | 2,608 | 2,912 |
Other Liabilities, Current | $ 211,247 | $ 231,551 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
Notes Payable | $ 8,688 | $ 12,232 |
Less amounts due within one year | (5,648) | (6,099) |
Long-term portion of notes payable | $ 3,040 | $ 6,133 |
Notes Payable - Schedule of N49
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Debt instruments maturity date | May 27, 2011 | |
Promissory Note Payable [Member] | ||
Debt instruments maturity date | May 15, 2016 | May 15, 2016 |
Promissory Note Payable [Member] | Vehicle [Member] | ||
Secured long-term debt | $ 8,688 | $ 12,232 |
Percenatge of debt instrument interest rate | 1.90% | 1.90% |
Debt instrument, payment terms | due in monthly principal and interest payments of $523 | due in monthly principal and interest payments of $523 |
Debt instruments maturity date | Dec. 5, 2017 | Dec. 5, 2017 |
Notes Payable - Schedule of Deb
Notes Payable - Schedule of Debt Principal Payments on Notes Payable (Details) | Jun. 30, 2016USD ($) |
Debt Disclosure [Abstract] | |
2,016 | $ 2,555 |
2,017 | 6,133 |
2,018 | |
2,019 | |
2,020 | |
Thereafter | |
Notes Payable | $ 8,688 |
Convertible Debentures (Details
Convertible Debentures (Details Narrative) - USD ($) | Feb. 10, 2012 | May 03, 2011 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |||
Percentage of royalty revenue | 2.50% | ||||||||
Percentage of discount on conversion price | 30.00% | ||||||||
Debt instrument maturity date | May 27, 2011 | ||||||||
Research and development costs | $ 63 | $ 21 | $ 1,415 | $ 7,809 | |||||
Debt indstrument principal balance | $ 125,000 | $ 125,000 | |||||||
Convertible Debenture One [Member] | |||||||||
Debt instrument maturity date | [1] | May 27, 2011 | |||||||
Debt instrument, convertible, beneficial conversion feature | $ 53,517 | ||||||||
Research and development costs | $ 71,483 | ||||||||
Debt indstrument principal balance | $ 125,000 | ||||||||
Long-term debt, gross | 7,500 | ||||||||
Debt instrument transfer or assignment in second closing | 11,750 | ||||||||
Debt instrument transfer or assignment in subsequent closing | $ 11,750 | ||||||||
Debt instrument interest percentage | [1] | 10.00% | 10.00% | ||||||
Convertible Debenture Two [Member] | |||||||||
Percentage of discount on conversion price | 30.00% | ||||||||
Debt instrument maturity date | [2] | May 5, 2012 | |||||||
Borrowing convertible debenture | $ 300,000 | ||||||||
Debt instrument interest percentage | 10.00% | 10.00% | [2] | 10.00% | [2] | ||||
Reverse stock split | 1 for -1,350 | ||||||||
Debt discount | $ 206,832 | ||||||||
Fair market value of warrants | $ 45,000 | ||||||||
Convertible Debenture Two [Member] | Warrant One [Member] | |||||||||
Number of warrants granted | 300,000 | ||||||||
Warrants exercise price per share | $ 337.50 | ||||||||
Convertible Debenture Two [Member] | Warrant Two [Member] | |||||||||
Number of warrants granted | 600,000 | ||||||||
Warrants exercise price per share | $ 472.50 | ||||||||
Convertible Debenture Three [Member] | |||||||||
Percentage of discount on conversion price | 30.00% | ||||||||
Debt instrument maturity date | [3] | Aug. 31, 2013 | |||||||
Borrowing convertible debenture | $ 10,000 | $ 10,000 | |||||||
Debt instrument interest percentage | [3] | 5.00% | 5.00% | ||||||
Accreted interest expense | $ 4,286 | ||||||||
[1] | (1) The Company purchased in exchange for convertible debenture exclusive rights for license of certain intellectual property from an unrelated party. The parties agreed to a royalty of 2.5% of net revenues generated from the sale, sub-license or use of the technology or a reasonable negotiated rate based on similar invention. The debenture was convertible to common shares of the Company at May 27, 2011, along with accrued interest at the option of the lender. Conversion price per share is 30% discount as determined from the weighted average of the preceding 12 trading days’ closing market price. The Company valued the BCF of the convertible debenture at $53,517, its intrinsic value. The Company accreted the discount to the convertible debenture and will recognize interest expense through repayment in full or conversion. Because there was no assurance of success and the invention was still in design and pre-prototype phase, the Company recorded the initial net value of the debenture, $71,483, as research and development expense during the year ended 2010. Both parties agreed to confidentiality regarding the invention during the pre-prototype stage. In addition, the Company agreed to provide the licensor with design services, as well as assist in completing the prototype and initial production at the Company’s prevailing wholesale rate for comparable services. On February 10, 2012, the holder of this debenture entered into an agreement with a third party to sell/assign the $125,000 principal balance, plus accrued interest. The purchase was to be in installments with transfer/assignment of the debenture upon payment, referred to as “Closings”. The first Closing was on or about February 15, 2012 for $7,500, with that amount assigned/transferred. The second Closing, occurred 90 days after the first closing for $11,750 paid/assigned. All subsequent Closings were to be for $11,750 and occur in 30 day increments after the second Closing. This was to continue until the full principal balance of $125,000, plus accrued interest is purchased or assigned. The holder of the convertible note has voluntarily dissolved and ceased operation. In February 2016 both parties agreed to cancel the agreement and all remaining principal and interest balances. | ||||||||
[2] | (2) On May 3, 2011, the Company borrowed $300,000 in exchange for a convertible debenture. The Debenture bears 10% interest per annum. The lender may at any time convert any portion of the debenture to common shares at a 30% discount of the “Market Price” of the stock based on the average of the previous ten (10) days weighted average closing prices on the date prior to the notice of conversion. The Company may prepay the debenture plus accrued interest at any time before maturity. In addition, as further inducement for loaning the Company the funds, the Company granted the lender 300,000 and 600,000 warrants at $337.50 and $472.50 per share (after restatement for 1 for -1,350- reverse stock split), respectively. As a result, the Company allocated fair market value (“FMV”) to both the BCF and to the warrants, or $206,832, which was recorded as a discount against the debenture. The Company accreted the discount to the convertible debenture through maturity and will accrue interest expense until paid in full or converted. Before discount, the Company determined the FMV of the warrants as $45,000 using the Black-Scholes valuation model. | ||||||||
[3] | (3) The Company borrowed $10,000 in exchange for a convertible debenture. The lender at their option may convert all or part of the note plus accrued interest into common stock at a price of thirty percent (30%) discount as determined from the average four (4) highest closing bid prices over the preceding five (5) trading days. The Company valued the BCF of the convertible debenture at $4,286, which was accreted to interest expense. |
Convertible Debentures - Schedu
Convertible Debentures - Schedule of Convertible Debentures (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2016 | Dec. 31, 2015 | May 03, 2011 | |||
Maturity Date | May 27, 2011 | ||||
Period End Debenture, Net Balance | $ 312,743 | $ 371,965 | |||
Debt Instrument, Increase, Accrued Interest | $ 161,352 | 371,965 | |||
Convertible Debenture One [Member] | |||||
Origination Date | [1] | Nov. 27, 2010 | |||
Maturity Date | [1] | May 27, 2011 | |||
Interest Rate | [1] | 10.00% | |||
Origination Principal Balance | [1] | $ 125,000 | |||
Origination Discount Balance | [1] | (53,517) | |||
Period End Debenture, Net Balance | [1] | 58,750 | |||
Debt Instrument, Increase, Accrued Interest | [1] | 34,709 | |||
Convertible Debenture Two [Member] | |||||
Origination Date | [2] | May 3, 2011 | |||
Maturity Date | [2] | May 5, 2012 | |||
Interest Rate | 10.00% | [2] | 10.00% | ||
Origination Principal Balance | [2] | $ 300,000 | |||
Origination Discount Balance | [2] | (206,832) | |||
Period End Debenture, Net Balance | [2] | 300,000 | 300,000 | ||
Debt Instrument, Increase, Accrued Interest | [2] | $ 155,000 | 140,000 | ||
Convertible Debenture Three [Member] | |||||
Origination Date | [3] | Aug. 31, 2011 | |||
Maturity Date | [3] | Aug. 31, 2013 | |||
Interest Rate | [3] | 5.00% | |||
Origination Principal Balance | [3] | $ 10,000 | |||
Origination Discount Balance | [3] | (4,286) | |||
Period End Debenture, Net Balance | [3] | 10,000 | 10,000 | ||
Debt Instrument, Increase, Accrued Interest | [3] | $ 2,435 | 2,183 | ||
Convertible Debenture Four [Member] | |||||
Origination Date | [4] | Feb. 10, 2012 | |||
Maturity Date | [4] | Feb. 10, 2014 | |||
Interest Rate | [4] | 10.00% | |||
Origination Principal Balance | [4] | $ 5,500 | |||
Origination Discount Balance | [4] | ||||
Period End Debenture, Net Balance | [4] | 472 | |||
Debt Instrument, Increase, Accrued Interest | [4] | 216 | |||
Convertible Debenture Five [Member] | |||||
Origination Date | [4] | Feb. 10, 2012 | |||
Maturity Date | [4] | Feb. 10, 2014 | |||
Interest Rate | [4] | 10.00% | |||
Origination Principal Balance | [4] | $ 39,724 | |||
Origination Discount Balance | [4] | ||||
Period End Debenture, Net Balance | [4] | 2,743 | 2,743 | ||
Debt Instrument, Increase, Accrued Interest | [4] | $ 3,917 | $ 4,157 | ||
[1] | (1) The Company purchased in exchange for convertible debenture exclusive rights for license of certain intellectual property from an unrelated party. The parties agreed to a royalty of 2.5% of net revenues generated from the sale, sub-license or use of the technology or a reasonable negotiated rate based on similar invention. The debenture was convertible to common shares of the Company at May 27, 2011, along with accrued interest at the option of the lender. Conversion price per share is 30% discount as determined from the weighted average of the preceding 12 trading days’ closing market price. The Company valued the BCF of the convertible debenture at $53,517, its intrinsic value. The Company accreted the discount to the convertible debenture and will recognize interest expense through repayment in full or conversion. Because there was no assurance of success and the invention was still in design and pre-prototype phase, the Company recorded the initial net value of the debenture, $71,483, as research and development expense during the year ended 2010. Both parties agreed to confidentiality regarding the invention during the pre-prototype stage. In addition, the Company agreed to provide the licensor with design services, as well as assist in completing the prototype and initial production at the Company’s prevailing wholesale rate for comparable services. On February 10, 2012, the holder of this debenture entered into an agreement with a third party to sell/assign the $125,000 principal balance, plus accrued interest. The purchase was to be in installments with transfer/assignment of the debenture upon payment, referred to as “Closings”. The first Closing was on or about February 15, 2012 for $7,500, with that amount assigned/transferred. The second Closing, occurred 90 days after the first closing for $11,750 paid/assigned. All subsequent Closings were to be for $11,750 and occur in 30 day increments after the second Closing. This was to continue until the full principal balance of $125,000, plus accrued interest is purchased or assigned. The holder of the convertible note has voluntarily dissolved and ceased operation. In February 2016 both parties agreed to cancel the agreement and all remaining principal and interest balances. | ||||
[2] | (2) On May 3, 2011, the Company borrowed $300,000 in exchange for a convertible debenture. The Debenture bears 10% interest per annum. The lender may at any time convert any portion of the debenture to common shares at a 30% discount of the “Market Price” of the stock based on the average of the previous ten (10) days weighted average closing prices on the date prior to the notice of conversion. The Company may prepay the debenture plus accrued interest at any time before maturity. In addition, as further inducement for loaning the Company the funds, the Company granted the lender 300,000 and 600,000 warrants at $337.50 and $472.50 per share (after restatement for 1 for -1,350- reverse stock split), respectively. As a result, the Company allocated fair market value (“FMV”) to both the BCF and to the warrants, or $206,832, which was recorded as a discount against the debenture. The Company accreted the discount to the convertible debenture through maturity and will accrue interest expense until paid in full or converted. Before discount, the Company determined the FMV of the warrants as $45,000 using the Black-Scholes valuation model. | ||||
[3] | (3) The Company borrowed $10,000 in exchange for a convertible debenture. The lender at their option may convert all or part of the note plus accrued interest into common stock at a price of thirty percent (30%) discount as determined from the average four (4) highest closing bid prices over the preceding five (5) trading days. The Company valued the BCF of the convertible debenture at $4,286, which was accreted to interest expense. | ||||
[4] | (4)The Company entered into three new debenture agreements upon sale or assignment by the original lender. Because the stated terms of the new debenture agreement and principal amounts were significantly different from the original debenture, including analysis of the value of the beneficial conversion feature at the assignment or purchase date, the transactions are treated as extinguishment of the old debentures and recorded as new for accounting purposes. |
Authorization of Preferred St53
Authorization of Preferred Stock (Details Narrative) - shares | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 425,000 | 425,000 |
Preferred stock, voting rights | 250 to 1 | |
Percentage of voting rights | 55.00% | |
Series A Convertible Preferred Stock [Member] | ||
Convertible preferred stock, shares issued upon conversion | 31,481 |
Commitments and Contingencies54
Commitments and Contingencies (Details Narrative) - USD ($) | Aug. 14, 2014 | Jun. 30, 2013 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 |
Security deposit | $ 5,367 | |||||
Operating leases, rent expense, minimum rentals | $ 4,000 | |||||
Percentage of annual operating expenses | 10.76% | |||||
Operating leases, rent expense | $ 2,000 | |||||
Operating leases, rent expense, net, total | $ 12,000 | $ 12,000 | $ 24,000 | $ 24,000 | ||
Plaintiff [Member] | ||||||
Loss contingency, damages paid, value | $ 1,000,000 | |||||
Maximum [Member] | ||||||
Loss contingency, damages paid, value | $ 1,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Rental Payments Under Operating Lease (Details) | Jun. 30, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
year 1 | $ 30,000 |
year 2 | 24,000 |
year 3 | |
year 4 | |
year 5 | |
Operating Leases, Future Minimum Payments Due, Total | $ 54,000 |
Equity Incentive Plan (Details
Equity Incentive Plan (Details Narrative) - shares | 1 Months Ended | 6 Months Ended |
Aug. 22, 2007 | Jun. 30, 2016 | |
Equity Incentive Plan [Line Items] | ||
Share-based compensation arrangement by share-based payment award, options, grants in period, gross | 5,185 | |
Equity Incentive Plan [Member] | ||
Equity Incentive Plan [Line Items] | ||
Share-based compensation arrangement by share-based payment award, shares issued in period | 297 | |
Share-based compensation arrangement by share-based payment award, options, grants in period, gross | 75 | |
Share-based compensation arrangement by share-based payment award, options, outstanding, number | 297 |
Equity Based Incentive_Retent57
Equity Based Incentive/Retention Bonuses (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Nov. 02, 2012 | |
Equity Based Year End Bonuses and Conversion Of Board Of Directors Liability [Abstract] | ||
Stock incentive bonus | $ 75,100 | |
Share-based compensation arrangement by share-based payment award, options, vested, number of shares | 61,852 | |
Share-based compensation arrangement by share-based payment award, options, grants in period, gross | 5,185 |
Interest Expense Non-Related 58
Interest Expense Non-Related Parties and Other Expense (Income), Net (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Interest expense, non related party | $ 7,758 | $ 9,254 | $ 15,517 | $ 18,532 |
Other income | 142,945 | 255,354 | ||
Cancelation of employee bonus payable | 140,366 | 140,366 | ||
Insurance premium refund | 2,009 | 2,009 | ||
Other income from expiration of online training liability certificates | 5,609 | 11,331 | ||
Other expense, net of individually insignificant items | 2,632 | 8,674 | ||
Other expenses | 1,755 | |||
Induced conversion of convertible debt expense | 93,459 | |||
Royalty income, nonoperating | 14,970 | |||
Insurance audit adjustments partially offset | 11,137 | |||
Product royalty income | 3,471 | |||
Sale of property plant equipment | 1,800 | |||
Other operating income (expense), net | 3,635 | |||
Convertible Debentures [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Interest expense, debt | 7,695 | 9,177 | 15,398 | 18,354 |
Notes Payable [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Interest expense, debt | $ 63 | $ 77 | $ 119 | $ 178 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | 1 Months Ended |
Jul. 31, 2016shares | |
Alexander F. Purdon [Member] | |
Number of restricted stock shares issued during the period | 45,000 |