Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 13, 2017 | |
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 | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 86,710,793 | |
Trading Symbol | BWMG | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash | $ 96,184 | $ 191,749 |
Accounts receivable, net of $22,713 and $18,000 allowance for doubtful accounts, respectively | 53,567 | 1,026 |
Accounts receivable - related parties | 54,989 | 68,239 |
Inventory | 706,643 | 672,520 |
Prepaid expenses and other current assets | 251,122 | 84,336 |
Total current assets | 1,162,505 | 1,017,870 |
Property and equipment, net | 36,848 | 56,908 |
Deferred tax asset, net - non-current | 2,520 | 2,520 |
Other assets | 6,649 | 6,649 |
Total assets | 1,208,522 | 1,083,947 |
Current liabilities | ||
Accounts payable and accrued liabilities | 386,108 | 323,578 |
Customer deposits and unearned revenue | 20,086 | 31,577 |
Royalties payable - related parties | 64,240 | |
Other liabilities | 139,429 | 176,614 |
Convertible debentures, net | 312,743 | 312,743 |
Notes payable - current portion | 2,002 | 6,133 |
Total current liabilities | 860,368 | 914,885 |
Total liabilities | 860,368 | 914,885 |
Commitments and contingencies | ||
Stockholders' 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; 81,493,402 and 68,906,212 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 8,149 | 6,890 |
Common stock payable; $0.0001 par value; 138,941 and 138,941 shares, respectively | 14 | 14 |
Additional paid-in capital | 8,954,826 | 8,792,782 |
Accumulated deficit | (8,615,260) | (8,631,049) |
Total stockholders' deficit | 348,154 | 169,062 |
Total liabilities and stockholders' deficit | $ 1,208,522 | $ 1,083,947 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 22,713 | $ 18,000 |
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 | 81,493,402 | 68,906,212 |
Common stock, share outstanding | 81,493,402 | 68,906,212 |
Common stock payable, par value | $ 0.0001 | $ 0.0001 |
Common stock payable, shares outstanding | 138,941 | 138,941 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net revenues | ||||
Net revenues | $ 574,684 | $ 597,882 | $ 1,149,690 | $ 1,300,414 |
Net revenues - related parties | 220,586 | 240,102 | 585,972 | 574,862 |
Total net revenues | 795,270 | 837,984 | 1,735,662 | 1,875,276 |
Cost of net revenues | ||||
Cost of net revenues | 394,429 | 368,979 | 794,192 | 933,889 |
Cost of net revenue-related parties | 109,589 | 148,144 | 293,043 | 344,917 |
Royalties expense - related parties | 12,761 | 20,714 | 42,247 | 46,332 |
Total cost of net revenues | 516,788 | 537,837 | 1,129,482 | 1,325,138 |
Gross profit | 278,482 | 300,147 | 606,180 | 550,138 |
Operating expenses | ||||
Selling, general and administrative | 225,194 | 161,929 | 555,561 | 474,944 |
Research and development costs | 12,730 | 10 | 13,935 | 1,425 |
Total operating expenses | 237,924 | 161,939 | 569,496 | 476,369 |
Income from operations | 40,558 | 138,208 | 36,684 | 73,769 |
Other (income) expense, net | ||||
Other (income) expense, net | (1,038) | (3,173) | (2,245) | (274,117) |
Interest expense | 7,750 | 7,734 | 23,140 | 23,251 |
Interest expense - related parties | 499 | 572 | ||
Total other (income) expense, net | 6,712 | 5,060 | 20,895 | (250,294) |
Net income before provision for income taxes | 33,846 | 133,148 | 15,789 | 324,063 |
Income tax | ||||
Net income | $ 33,846 | $ 133,148 | $ 15,789 | $ 324,063 |
Basic income per common share | $ 0 | $ 0 | $ 0 | $ 0 |
Diluted income per common share | $ 0 | $ 0 | $ 0 | $ 0 |
Basic weighted average common shares outstanding | 78,710,793 | 58,773,434 | 74,243,470 | 69,481,418 |
Diluted weighted average common shares outstanding | 136,867,655 | 63,618,438 | 132,400,332 | 74,326,422 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 15,789 | $ 324,063 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 20,060 | 27,157 |
Debt settlement | (233,825) | |
Shares issued for interest expense | 572 | |
Shares-based compensation | 66,393 | 36,000 |
Changes in operating assets and liabilities: | ||
Change in accounts receivable, net | (52,541) | 49,506 |
Change in accounts receivable - related parties | 13,250 | (14,002) |
Change in inventory | (34,123) | 41,993 |
Change in prepaid expenses and other current assets | (133,179) | (40,014) |
Change in other current assets - related parties | 3,020 | |
Change in accounts payable and accrued liabilities | 62,530 | 11,693 |
Change in customer deposits and unearned revenue | (11,491) | 2,679 |
Change in other liabilities | (37,185) | (22,135) |
Change in royalties payable - related parties | (937) | 323 |
Net cash (used in) provided by operating activities | (91,434) | 187,030 |
Cash flows from investing activities: | ||
Purchase of fixed assets | (7,586) | |
Net cash used in investing activities | (7,586) | |
Cash flows from financing activities: | ||
Principal reduction on convertible debentures | (472) | |
Principal payments on notes and loans payable | (4,131) | (5,084) |
Principal payments on note payable - related parties | (11,098) | |
Net cash used in financing activities | (4,131) | (16,654) |
Net change in cash | (95,565) | 162,790 |
Cash, beginning of period | 191,749 | 141,822 |
Cash, end of period | 96,184 | 304,612 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 954 | |
Non-cash investing and financing activities: | ||
Conversion of related party royalty payable to stock | 63,303 | |
Conversion of accrued payroll to stock | 36,000 | |
Conversion of accrued interest on note payable - related party to stock | 572 | |
Prepaid share-based compensation | $ 33,607 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
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 unaudited condensed consolidated financial statements as of September 30, 2017 and for the three and nine month periods ended September 30, 2017 and 2016 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 September 30, 2017, and the results of operations for the three and nine month periods ended September 30, 2017 and 2016, and the statements of cash flows for the nine month periods ended September 30, 2017 and 2016. The condensed consolidated results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the entire year. The consolidated balance sheet as of December 31, 2016 has been derived from the Company’s audited financial statements for the year ended December 31, 2016. 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, 2016 as filed with the Securities and Exchange Commission as part of the Company’s Form 10-K which was filed on April 17, 2017. Definition of fiscal year Use of estimates Reclassifications Going Concern Although the Company had net income for the nine months ended September 30, 2017 and the years ended December 31, 2016, 2015 and 2014, we have otherwise incurred annual losses since 2009, and expect we may have more losses in future periods. Cash and equivalents Accounts receivable Inventory Property, 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 Advertising and trade show expense incurred for the nine months ended September 30, 2017 and 2016, was $ and $ , respectively. Research and development costs Research and Development 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 investment’s 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 Company’s perceived risk of that investment. At September 30, 2017, and December 31, 2016, the carrying amount of cash, accounts receivable, accounts receivable – related parties, customer deposits and unearned revenue, royalties payable – related parties, other liabilities, notes payable, and accounts payable and accrued liabilities approximate fair value because of the short maturity of these instruments. Earnings per common share Potentially dilutive shares are included in dilutive earnings per share totaled 58,156,862 for the nine months ended September 30, 2017. New accounting pronouncements “Classification of Certain Cash Receipts and Cash Payments” In April 2016, the FASB issued ASU 2016–10 Revenue from Contract with Customers (Topic 606) In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Leases In July 2015, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2015-11, Inventory Simplifying the Measurement of Inventory The Company believes there was no other new accounting guidance adopted, but not yet effective that either has not already been disclosed in prior reporting periods or is relevant to the readers of our financial statements. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | 2. INVENTORY Inventory consists of the following as of: September 30, 2017 December 31, 2016 Raw materials $ 558,339 $ 402,407 Work in process — — Finished goods 148,304 270,113 $ 706,643 $ 672,520 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 9 Months Ended |
Sep. 30, 2017 | |
Prepaid Expenses And Other Current Assets | |
Prepaid Expenses and Other Current Assets | 3. PREPAID EXPENSES AND OTHER CURRENT ASSETS September 30, 2017 December 31, 2016 Prepaid inventory $ 108,383 $ 30,076 Prepaid insurance — 6,968 Prepaid other current assets 142,739 47,292 $ 251,122 $ 84,336 |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 4. PROPERTY AND EQUIPMENT, NET Property and equipment consists of the following as of: September 30, 2017 December 31, 2016 Factory and office equipment $ 125,832 $ 121,782 Computer equipment and software 27,469 31,519 Vehicles 44,161 44,160 Leasehold improvements 43,779 43,779 241,241 241,240 Less: accumulated depreciation and amortization (204,393 ) (184,332 ) $ 36,848 $ 56,908 Depreciation and amortization expense totaled $2,219 and $20,060 for the three and nine month periods ending September 30, 2017, and $9,197 and $27,157 for the three and nine month periods ending September 30, 2016, respectively. |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | 5. OTHER ASSETS Other assets of $6,649 at September 30, 2017 and December 31, 2016, respectively, consisted solely of refundable deposits. |
Customer Credit Concentrations
Customer Credit Concentrations | 9 Months Ended |
Sep. 30, 2017 | |
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 Company’s 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 September 30, 2017 and 2016, represented 27.76% and 28.64% respectively, of total net revenues. Combined sales to these six (6) entities for the nine months ended September 30, 2017 and 2016, represented 33.76% and 30.65% respectively, of total net revenues. |
Related Parties Transactions
Related Parties Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Parties Transactions | 7. RELATED PARTIES TRANSACTIONS Net revenues and accounts receivable – related parties The Company sells products to Brownie’s Global Logistics, LLC. (“BGL”), 3D Buoy and 940 Associates, Inc., affiliated with the Company’s Chief Executive Officer. Terms of sale are more favorable than those extended to BWMG’s regular customers, but no more favorable than those extended to Brownie’s strategic partners. Terms of sale to BGL approximate cost or include a nominal margin. These terms are consistent with those extended to Brownie’s strategic partners. Strategic partner terms on a per order basis include promotion of BWMG’s technologies and “Brownie’s” 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 BWMG’s technologies and “Brownie’s” brand in the yachting and exploration community world-wide through its operations. Combined net revenues from these entities for three months ended September 30, 2017, and 2016, were $223 and $5,734, respectively. Combined net revenues from these entities for nine months ended September 30, 2017, and 2016, were $3,289 and $7,666, respectively. Accounts receivable from these three entities at September 30, 2016 was $2,146. Accounts receivable from BGL, 3D Buoy and 940 Associates, Inc. at September 30, 2017 was $3,289, respectively. Accounts receivable from BGL, 3D Buoy and 940 Associates, Inc. at December 31, 2016 was $9,819. Royalties expense – related parties – On March 1, 2017, the Company and 940A entered into a second conversion agreement. Under the agreement the Company issued 940A 4,587,190 shares of restricted common stock in satisfaction of $63,303, which represented all past due and payable amounts to 940A under the Exclusive License Agreement as of March 1, 2017. As of the date of the agreement the Company was more than 3 months in arrears on royalty payments due under the Exclusive License Agreement. The shares were issued at a price per share of $0.0138, which exceeded the closing price of the Company’s common stock as reported on the OTC Markets on the date immediately preceding the closing. Stock options outstanding from patent purchase |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
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: September 30, 2017 December 31, 2016 Accounts payable trade and other $ 142,275 $ 110,020 Accrued payroll & fringe benefits 24,589 20,416 Accrued payroll taxes & withholding 19,417 16,400 Accrued interest 199,827 176,742 $ 386,108 $ 323,578 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 | 9 Months Ended |
Sep. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | 9. OTHER LIABILITIES Other liabilities consist of the following as of September 30, 2017 December 31, 2016 Short-term loans $ 139,429 $ 160,782 Asset purchase agreement payable — 12,857 On-line training liability — 2,975 $ 139,429 $ 176,614 |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable | 10. NOTES PAYABLE Notes payable consists of the following as of September 30, 2017 and December 31, 2016 September 30, 2017 December 31, 2016 Promissory note payable, secured by vehicle underlying loan having carrying value of $2,002 and $6,133 at September 30, 2017 and December 31, 2016, respectively, bearing interest at 1.9% per annum, due in monthly principal and interest payments of $523, maturing on December 5, 2017 $ 2,002 $ 6,133 Less amounts due within one year (2,002 ) (6,133 ) Long-term portion of notes payable $ — $ — As of September 30, 2017, principal payments on the notes payable are as follows: 2017 $ 2,002 $ 6,133 2018 — — 2019 — — 2020 — — 2021 — — Thereafter — — $ 2,002 $ 6,133 |
Convertible Debentures
Convertible Debentures | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Debentures | 11. CONVERTIBLE DEBENTURES Convertible debentures consist of the following at September 30, 2017 and December 31, 2016: Origination Date Maturity Date Interest Rate Origination Principal Origination Discount September 30, 2017 Debenture Balance September 30, 2017 Accrued Interest December 31, 2016 Debenture Balance December 31, 2016 Accrued Interest Ref. 5/3/2011 5/5/2012 5 % 300,000 (206,832 ) 300,000 177,500 300,000 170,000 (1 ) 8/31/2011 8/31/2013 5 % 10,000 (4,286 ) 10,000 2,813 10,000 2,687 (2 ) 2/10/2012 2/10/2014 10 % 39,724 — 2,743 4,124 2,743 4,055 (3 ) $ 312,743 $ 199,827 $ 312,743 $ 176,742 Reference numbers in right hand column of table entitled Ref. refer to paragraphs with corresponding numbers that immediately follow this paragraph. (1) 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 the 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 the discount, the Company determined the FMV of the warrants as $45,000 using the Black-Scholes valuation model. (2) 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. (3) 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. As of September 30, 2017, the principle amount was $2,743. The conversion price under the debentures is $0.37125 and the lender may convert at any time until the debenture plus accrued interest is paid in full. Various other fees and penalties apply if payments or conversions are not done timely by the Company. The lender will be limited to maximum conversion of 4.99% of the outstanding Common Stock of the Company at any one time. |
Authorization of Preferred Stoc
Authorization of Preferred Stock | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Authorization of Preferred Stock | 12. AUTHORIZATION OF PREFERRED STOCK During the second quarter of 2010, the holder of the majority of the Company’s outstanding shares of common stock approved an amendment to the Company’s 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 September 30, 2017, and December 31, 2016, the 425,000 shares of preferred stock are owned by the Company’s 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 Company’s 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 | 9 Months Ended |
Sep. 30, 2017 | |
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 fulfill the sales terms of some of our customers, which require the insurance coverage. As of August 15, 2017, the Company has obtained Product Liability Insurance, although prior claims are not covered under the new policy. The policy is already prepaid and will remain in effect until its renewal date of August 14, 2018. As previously disclosed, the Company and Trebor were co-defendants under an action filed by an individual in September 2013 in the Circuit Court of Broward County claiming personal injury resulting from use of a Brownie’s Third Lung. Plaintiff claimed damages in excess of $1,000,000. This matter was settled during the three months ended September 30, 2016 by the Company’s insurance carrier at no additional cost to the Company. In addition, as previously disclosed, the Company, Trebor and other third parties, are each named as co-defendants under an action filed in March 2015 in the Circuit Court of Broward County under Case No. CACE15-03238 by the Estate of Ernesto Rodriguez, claiming wrongful death and products liability resulting in the decedent’s drowning death while using a Brownie’s Third Lung product. This claim falls outside the Company’s period of insurance coverage. Plaintiff has claimed damages exceeding $1,000,000. A default judgment was entered against Trebor in 2015 due to its failure to timely respond to the complaint. The Company has obtained different legal representation in this matter and attempted to have the default set aside. On November 2, 2016, the court granted plaintiff’s motion for sanctions against our company for frivolous litigation relating to our attempt to have the matter dismissed and granted the plaintiff’s motion to strike our motion for summary judgment due to our initial default. The Company believes the claim to be a Workers Compensation claim relating exclusively against other non-affiliated defendants and without merit, and will aggressively defend this action and to appeal the default judgment. In the event Trebor is unable to overturn the default judgment and the defendants are determined to be at fault, we would seek to allocate damages among all of the other parties, including the plaintiff. At this time, the amount of any loss, or range of loss, cannot be reasonably estimated due to the undetermined validity of any claim or claims made by plaintiff and the mitigating factors among the parties. Therefore, the Company has not recorded reserves and contingent liabilities related to this matter. However, in the future, as the case progress, the Company may be required to record a contingent liability or reserve for these matters. 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. On December 1, 2016, we entered into an amendment to the initial lease agreement, commencing on October 1, 2017, extending the term for an additional eighty-four months, expiring September 30, 2024. The base rent was increased to $4,626 per month with a 3% annual escalation throughout the amended term. We believe that the facilities are suitable for their intended purpose, are being efficiently utilized and provide adequate capacity to meet demand for the foreseeable future. Base rent expense attributable to the Company’s headquarters facility totaled approximately $30,000 and $12,000 for the three-month periods ending September 30, 2017 and 2016 and $54,000 and $36,000 for the nine-month periods ending September 30, 2017 and 2016, respectively. The following is an estimate of future minimum rental payments required under our lease agreement on August 14, 2014 and as amended December 1, 2016 : Operating lease year 1 $ 24,239 year 2 49,931 year 3 51,429 year 4 52,972 year 5 and thereafter 96,710 $ 275,281 |
Equity Incentive Plan
Equity Incentive Plan | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
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 Non-statutory 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 maximum number of shares that may be issued under the Plan was 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 was ten years. The Plan expired on August 22, 2017. All 297 options issued under the Plan remain outstanding. |
Equity Based Incentive_Retentio
Equity Based Incentive/Retention Bonuses | 9 Months Ended |
Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
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 were issued. On April 29, 2016, the Board of Directors determined it 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. On August 1, 2017, Mikkel Pitzner, was appointed by the Company’s board of directors to serve on the Company’s board of directors, filling a vacancy on the board. Mr. Pitzner shall serve on the board of directors and shall hold office until the next election of directors by stockholders and until his successor is elected and qualified or until his earlier resignation or removal. The Company has agreed to pay Mr. Pitzner an annual fee of $6,000 and has issued Mr. Pitzner 2,000,000 shares of restricted common stock valued at $25,000. On August 1, 2017 the Company entered into six month advisory agreement with Wesley P. Siebenthal to provide certain advisory services to the Company and serve as its Chief Technology Advisor. As compensation for the services, the Company issued him 2,000,000 shares of its common stock valued at $25,000. On August 1, 2017, the Company entered into a six month employment agreement with Blake Carmichael, the son of the Company’s chief executive officer and an electrical engineer, to serve as the Company’s products development manager, electrical engineer and marketing team member. Under the terms of the employment agreement, in addition to a monthly salary of $3,600, the Company issued Mr. Carmichael 2,000,000 shares of common stock valued at $25,000. Mr. Carmichael is also entitled to performance bonuses at the discretion of the board of directors. Effective August 1, 2017, the board of directors issued Mr. Robert Carmichael, the Company’s chief executive officer, chief financial officer and member of the Company’s board of directors, 2,000,000 shares of restricted common stock valued at $25,000 in consideration of serving on the Company’s board of directors. As of September 30, 2017, a total of $66,393 share-based compensation was recorded. The share-based compensation of $50,000 was for the two directors, Robert Carmichael and Mikkel Pitzner. The remaining $16,393 share-based compensation was for two service contracts with an employee and an advisor. Since the Company has six months agreements with each share recipient, a prepaid compensation of $33,607 was recorded as of September 30, 2017. |
Interest Expense Non-Related Pa
Interest Expense Non-Related Parties and Other Expense (Income), Net | 9 Months Ended |
Sep. 30, 2017 | |
Other Income and Expenses [Abstract] | |
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 September 30, 2017, non-related parties interest expense of $7,750 is comprised of interest on convertible debentures. For the three months ended September 30, 2016, non-related parties interest expense of $7,734 is comprised of $7,695 interest on convertible debentures and $39 interest on notes payable and other interest. For the nine months ended September 30, 2017, non-related parties interest expense of $23,140 is comprised of interest on convertible debentures. For the nine months ended September 30, 2016, non-related parties interest expense of $23,251 is comprised of $23,093 interest on convertible debentures and $158 interest on notes payable and other interest. For the three months ended September 30, 2017, $6,712 other expense, net is comprised primarily of $7,750 of interest expense, and $1,038 of other income. For the three months ended September 30, 2016, $3,173 other income, net is comprised primarily of $2,273 from the expiration of online training liability certificates and no other individually significant items For the nine months ended September 30, 2017, $20,895 other expense, net is comprised primarily of $23,140 of interest expense, and $2,245 of other income. For the nine month ended September 30, 2016, is comprised primarily of $23,823 of interest expense, and $274,117 of other income. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. SUBSEQUENT EVENTS Subsequent to the third quarter of 2017, the Company received gross proceeds of $60,000 pursuant to the sale of 1,304,348 Units at $0.046 per Unit, each Unit consisting of four shares of common stock, par value $0.0001 per share and one two year common stock purchase warrant exercisable at $0.0115 per share. |
Description of Business and S23
Description of Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Description of Business | Description of business |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements as of September 30, 2017 and for the three and nine month periods ended September 30, 2017 and 2016 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 September 30, 2017, and the results of operations for the three and nine month periods ended September 30, 2017 and 2016, and the statements of cash flows for the nine month periods ended September 30, 2017 and 2016. The condensed consolidated results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the entire year. The consolidated balance sheet as of December 31, 2016 has been derived from the Company’s audited financial statements for the year ended December 31, 2016. 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, 2016 as filed with the Securities and Exchange Commission as part of the Company’s Form 10-K which was filed on April 17, 2017. |
Definition of Fiscal Year | Definition of fiscal year |
Use of Estimates | Use of estimates |
Reclassifications | Reclassifications |
Going Concern | Going Concern Although the Company had net income for the nine months ended September 30, 2017 and the years ended December 31, 2016, 2015 and 2014, we have otherwise incurred annual losses since 2009, and expect we may have more losses in future periods. |
Cash and Equivalents | Cash and equivalents |
Accounts Receivable | Accounts receivable |
Inventory | Inventory |
Property, Equipment and Leasehold Improvements | Property, 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 Advertising and trade show expense incurred for the nine months ended September 30, 2017 and 2016, was $ and $ , respectively. |
Research and Development Costs | Research and development costs Research and Development |
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 investment’s 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 Company’s perceived risk of that investment. At September 30, 2017, and December 31, 2016, the carrying amount of cash, accounts receivable, accounts receivable – related parties, customer deposits and unearned revenue, royalties payable – related parties, other liabilities, notes payable, 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 Potentially dilutive shares are included in dilutive earnings per share totaled 58,156,862 for the nine months ended September 30, 2017. |
New Accounting Pronouncements | New accounting pronouncements “Classification of Certain Cash Receipts and Cash Payments” In April 2016, the FASB issued ASU 2016–10 Revenue from Contract with Customers (Topic 606) In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Leases In July 2015, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2015-11, Inventory Simplifying the Measurement of Inventory The Company believes there was no other new accounting guidance adopted, but not yet effective that either has not already been disclosed in prior reporting periods or is relevant to the readers of our financial statements. |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consists of the following as of: September 30, 2017 December 31, 2016 Raw materials $ 558,339 $ 402,407 Work in process — — Finished goods 148,304 270,113 $ 706,643 $ 672,520 |
Prepaid Expenses and Other Cu25
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Prepaid Expenses And Other Current Assets | |
Schedule of Prepaid Expenses and Other Current Assets | September 30, 2017 December 31, 2016 Prepaid inventory $ 108,383 $ 30,076 Prepaid insurance — 6,968 Prepaid other current assets 142,739 47,292 $ 251,122 $ 84,336 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment consists of the following as of: September 30, 2017 December 31, 2016 Factory and office equipment $ 125,832 $ 121,782 Computer equipment and software 27,469 31,519 Vehicles 44,161 44,160 Leasehold improvements 43,779 43,779 241,241 241,240 Less: accumulated depreciation and amortization (204,393 ) (184,332 ) $ 36,848 $ 56,908 |
Accounts Payable and Accrued 27
Accounts Payable and Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consists of the following as of: September 30, 2017 December 31, 2016 Accounts payable trade and other $ 142,275 $ 110,020 Accrued payroll & fringe benefits 24,589 20,416 Accrued payroll taxes & withholding 19,417 16,400 Accrued interest 199,827 176,742 $ 386,108 $ 323,578 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Liabilities | Other liabilities consist of the following as of September 30, 2017 December 31, 2016 Short-term loans $ 139,429 $ 160,782 Asset purchase agreement payable — 12,857 On-line training liability — 2,975 $ 139,429 $ 176,614 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable consists of the following as of September 30, 2017 and December 31, 2016 September 30, 2017 December 31, 2016 Promissory note payable, secured by vehicle underlying loan having carrying value of $2,002 and $6,133 at September 30, 2017 and December 31, 2016, respectively, bearing interest at 1.9% per annum, due in monthly principal and interest payments of $523, maturing on December 5, 2017 $ 2,002 $ 6,133 Less amounts due within one year (2,002 ) (6,133 ) Long-term portion of notes payable $ — $ — |
Schedule of Principal Payments on Notes Payable | As of September 30, 2017, principal payments on the notes payable are as follows: 2017 $ 2,002 $ 6,133 2018 — — 2019 — — 2020 — — 2021 — — Thereafter — — $ 2,002 $ 6,133 |
Convertible Debentures (Tables)
Convertible Debentures (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Debentures | Convertible debentures consist of the following at September 30, 2017 and December 31, 2016: Origination Date Maturity Date Interest Rate Origination Principal Origination Discount September 30, 2017 Debenture Balance September 30, 2017 Accrued Interest December 31, 2016 Debenture Balance December 31, 2016 Accrued Interest Ref. 5/3/2011 5/5/2012 5 % 300,000 (206,832 ) 300,000 177,500 300,000 170,000 (1 ) 8/31/2011 8/31/2013 5 % 10,000 (4,286 ) 10,000 2,813 10,000 2,687 (2 ) 2/10/2012 2/10/2014 10 % 39,724 — 2,743 4,124 2,743 4,055 (3 ) $ 312,743 $ 199,827 $ 312,743 $ 176,742 Reference numbers in right hand column of table entitled Ref. refer to paragraphs with corresponding numbers that immediately follow this paragraph. (1) 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 the 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 the discount, the Company determined the FMV of the warrants as $45,000 using the Black-Scholes valuation model. (2) 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. (3) 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. As of September 30, 2017, the principle amount was $2,743. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments Under Operating Lease | The following is an estimate of future minimum rental payments required under our lease agreement on August 14, 2014 and as amended December 1, 2016 : Operating lease year 1 $ 24,239 year 2 49,931 year 3 51,429 year 4 52,972 year 5 and thereafter 96,710 $ 275,281 |
Description of Business and S32
Description of Business and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Allowance for doubtful accounts | $ 22,713 | $ 22,713 | $ 18,000 | ||
Advertising and trade show expense | 760 | $ 313 | 12,730 | $ 3,550 | |
Research and development costs | $ 12,730 | $ 10 | $ 13,935 | $ 1,425 | |
Percentage of minimum deposit for custom and large tank fill systems | 50.00% | ||||
Percentage of restocking fees | 15.00% | ||||
Potentially dilutive shares excluded in dilutive earnings per share | 58,156,862 | ||||
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 ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 558,339 | $ 402,407 |
Work in process | ||
Finished goods | 148,304 | 270,113 |
Inventory | $ 706,643 | $ 672,520 |
Prepaid Expenses and Other Cu34
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Prepaid Expenses And Other Current Assets | ||
Prepaid inventory | $ 108,383 | $ 30,076 |
Prepaid insurance | 6,968 | |
Prepaid other current assets | 142,739 | 47,292 |
Prepaid expense and other assets, current | $ 251,122 | $ 84,336 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization expense | $ 2,219 | $ 9,197 | $ 20,060 | $ 27,157 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment, Gross | $ 241,241 | $ 241,240 |
Less: accumulated depreciation and amortization | (204,393) | (184,332) |
Property Plant and Equipment, Net | 36,848 | 56,908 |
Factory and Office Equipment [Member] | ||
Property, Plant and Equipment, Gross | 125,832 | 121,782 |
Computer Equipment and Software [Member] | ||
Property, Plant and Equipment, Gross | 27,469 | 31,519 |
Vehicles [Member] | ||
Property, Plant and Equipment, Gross | 44,161 | 44,160 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment, Gross | $ 43,779 | $ 43,779 |
Other Assets (Details Narrative
Other Assets (Details Narrative) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Other Assets [Abstract] | ||
Other assets | $ 6,649 | $ 6,649 |
Customer Credit Concentrations
Customer Credit Concentrations (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Related Party [Member] | Sales Revenue [Member] | ||||
Concentration credits risk | 27.76% | 28.64% | 33.76% | 30.65% |
Related Parties Transactions (D
Related Parties Transactions (Details Narrative) - USD ($) | Mar. 02, 2017 | Nov. 02, 2012 | Mar. 03, 2009 | Nov. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Net revenues from related parties | $ 220,586 | $ 240,102 | $ 585,972 | $ 574,862 | |||||
Accounts receivable from related parties | 2,146 | 2,146 | |||||||
Total royalty expense | $ 12,761 | 20,714 | $ 42,247 | 46,332 | |||||
Arrears on its royalty payments | $ 151,000 | ||||||||
Percentage of gross revenues per quarter | 2.50% | 2.50% | |||||||
Shares issued price per share | $ 0.0138 | $ 0.008885 | |||||||
Issuance of restricted shares, share | 4,587,190 | 10,000,000 | |||||||
Issuance of restricted shares | $ 63,303 | $ 88,850 | |||||||
Share-based compensation arrangement by share-based payment award, options issued | 5,185 | ||||||||
Mr.Carmichael [Member] | |||||||||
Share-based compensation arrangement by share-based payment award, options, outstanding, number, beginning balance | 234 | ||||||||
Share-based compensation arrangement by share-based payment award, options issued | 1,350 | ||||||||
Share-based compensation arrangement by share-based payment award, options, expirations in period | 10 years | ||||||||
Brownie's Southport Divers, Inc., Brownie's Palm Beach Divers, and Brownie's Yacht Toys [Member] | |||||||||
Accounts receivable from related parties | $ 51,700 | $ 51,700 | $ 58,420 | ||||||
Brownie's Southport Divers, Inc., Brownie's Palm Beach Divers, and Brownie's Yacht Toys [Member] | Chief Executive Officer [Member] | |||||||||
Net revenues from related parties | 220,363 | 234,368 | 582,683 | 567,196 | |||||
Brownie's Global Logistics, LLC. ("BGL"), 3D Buoy and 940 Associates, Inc [Member] | Chief Executive Officer [Member] | |||||||||
Net revenues from related parties | 223 | $ 5,734 | 3,289 | $ 7,666 | |||||
BGL [Member] | |||||||||
Accounts receivable from related parties | 3,289 | 3,289 | 9,819 | ||||||
3D Buoy [Member] | |||||||||
Accounts receivable from related parties | 3,289 | 3,289 | 9,819 | ||||||
940 Associates, Inc [Member] | |||||||||
Accounts receivable from related parties | $ 3,289 | $ 3,289 | $ 9,819 |
Accounts Payable and Accrued 40
Accounts Payable and Accrued Liabilities - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accounts payable trade and other | $ 142,275 | $ 110,020 |
Accrued payroll & fringe benefits | 24,589 | 20,416 |
Accrued payroll taxes & withholding | 19,417 | 16,400 |
Accrued interest | 199,827 | 176,742 |
Total | $ 386,108 | $ 323,578 |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Liabilities (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Other Liabilities Disclosure [Abstract] | ||
Short-term loans | $ 139,429 | $ 160,782 |
Asset purchase agreement payable | 12,857 | |
On-line training liability | 2,975 | |
Total | $ 139,429 | $ 176,614 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Notes Payable | $ 2,002 | $ 6,133 |
Less amounts due within one year | (2,002) | (6,133) |
Long-term portion of notes payable |
Notes Payable - Schedule of N43
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - Promissory Note Payable [Member] - Vehicle [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Secured long-term debt | $ 2,002 | $ 6,133 |
Percentage of debt instrument interest rate | 1.90% | 1.90% |
Debt instrument, periodic payment | $ 523 | $ 523 |
Debt instruments maturity date | Dec. 5, 2017 | Dec. 5, 2017 |
Notes Payable - Schedule of Pri
Notes Payable - Schedule of Principal Payments on Notes Payable (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
2,017 | $ 2,002 | $ 6,133 |
2,018 | ||
2,019 | ||
2,020 | ||
2,021 | ||
Thereafter | ||
Notes Payable | $ 2,002 | $ 6,133 |
Convertible Debentures (Details
Convertible Debentures (Details Narrative) - USD ($) | May 03, 2011 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | ||||
Accreted interest expense | $ 7,750 | $ 23,140 | $ 23,823 | ||||||
Convertible Debenture One [Member] | |||||||||
Borrowing convertible debenture | $ 300,000 | ||||||||
Debt instrument interest percentage | 10.00% | 5.00% | [1] | 5.00% | [1] | 5.00% | [1] | ||
Percentage of discount on conversion price | 30.00% | ||||||||
Reverse stock split | 1 for -1,350- | ||||||||
Debt discount | $ 206,832 | ||||||||
Fair market value of warrants | $ 45,000 | ||||||||
Convertible Debenture Two [Member] | |||||||||
Borrowing convertible debenture | $ 10,000 | $ 10,000 | |||||||
Debt instrument interest percentage | [2] | 5.00% | 5.00% | 5.00% | |||||
Percentage of discount on conversion price | 30.00% | ||||||||
Accreted interest expense | $ 4,286 | ||||||||
Maximum conversion of common stock, percentage | 4.99% | ||||||||
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] | |||||||||
Borrowing convertible debenture | $ 2,743 | $ 2,743 | |||||||
Debt instrument interest percentage | [3] | 10.00% | 10.00% | 10.00% | |||||
Debt conversion price per share | $ 0.37125 | $ 0.37125 | |||||||
[1] | 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 the 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 the discount, the Company determined the FMV of the warrants as $45,000 using the Black-Scholes valuation model. | ||||||||
[2] | 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. | ||||||||
[3] | 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. As of September 30, 2017, the principle amount was $2,743. |
Convertible Debentures - Schedu
Convertible Debentures - Schedule of Convertible Debentures (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Dec. 31, 2016 | May 03, 2011 | ||||
Period End Debenture, Net Balance | $ 312,743 | $ 312,743 | ||||
Debt Instrument, Increase, Accrued Interest | $ 199,827 | $ 176,742 | ||||
Convertible Debenture One [Member] | ||||||
Origination Date | [1] | May 3, 2011 | May 3, 2011 | |||
Maturity Date | [1] | May 5, 2012 | May 5, 2012 | |||
Interest Rate | 5.00% | [1] | 5.00% | [1] | 10.00% | |
Origination Principal Balance | [1] | $ 300,000 | $ 300,000 | |||
Origination Discount Balance | [1] | (206,832) | (206,832) | |||
Period End Debenture, Net Balance | [1] | 300,000 | 300,000 | |||
Debt Instrument, Increase, Accrued Interest | [1] | $ 177,500 | $ 170,000 | |||
Convertible Debenture Two [Member] | ||||||
Origination Date | [2] | Aug. 31, 2011 | Aug. 31, 2011 | |||
Maturity Date | [2] | Aug. 31, 2013 | Aug. 31, 2013 | |||
Interest Rate | [2] | 5.00% | 5.00% | |||
Origination Principal Balance | [2] | $ 10,000 | $ 10,000 | |||
Origination Discount Balance | [2] | (4,286) | (4,286) | |||
Period End Debenture, Net Balance | [2] | 10,000 | 10,000 | |||
Debt Instrument, Increase, Accrued Interest | [2] | $ 2,813 | $ 2,687 | |||
Convertible Debenture Three [Member] | ||||||
Origination Date | [3] | Feb. 10, 2012 | Feb. 10, 2012 | |||
Maturity Date | [3] | Feb. 10, 2014 | Oct. 2, 2014 | |||
Interest Rate | [3] | 10.00% | 10.00% | |||
Origination Principal Balance | [3] | $ 39,724 | $ 2,743 | |||
Origination Discount Balance | [3] | |||||
Period End Debenture, Net Balance | [3] | 2,743 | 2,743 | |||
Debt Instrument, Increase, Accrued Interest | [3] | $ 4,124 | $ 4,055 | |||
[1] | 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 the 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 the discount, the Company determined the FMV of the warrants as $45,000 using the Black-Scholes valuation model. | |||||
[2] | 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. | |||||
[3] | 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. As of September 30, 2017, the principle amount was $2,743. |
Authorization of Preferred St47
Authorization of Preferred Stock (Details Narrative) - shares | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 425,000 | 425,000 |
Preferred stock, voting rights | 250 to 1 | |
Percentage of voting rights | 55.00% | |
Series A Convertible Preferred Stock [Member] | ||
Convertible preferred stock, shares issued upon conversion | 31,481 |
Commitments and Contingencies48
Commitments and Contingencies (Details Narrative) - USD ($) | Aug. 14, 2014 | Sep. 30, 2013 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
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 | $ 30,000 | $ 12,000 | $ 54,000 | $ 36,000 | |
Lease expiration date | Sep. 30, 2024 | |||||
Annual escalation percentage | 3.00% | |||||
Plaintiff [Member] | ||||||
Loss contingency, damages paid, value | $ 1,000,000 | |||||
Maximum [Member] | ||||||
Loss contingency, damages paid, value | $ 1,000,000 | |||||
Operating leases, rent expense, minimum rentals | $ 4,626 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Rental Payments Under Operating Lease (Details) | Sep. 30, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
year 1 | $ 24,239 |
year 2 | 49,931 |
year 3 | 51,429 |
year 4 | 52,972 |
year 5 and thereafter | 96,710 |
Operating Leases, Future Minimum Payments Due, Total | $ 275,281 |
Equity Incentive Plan (Details
Equity Incentive Plan (Details Narrative) - shares | Nov. 02, 2012 | Aug. 22, 2007 |
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 | |
Share-based compensation arrangement by share-based payment award, expirations date | Aug. 22, 2017 |
Equity Based Incentive_Retent51
Equity Based Incentive/Retention Bonuses (Details Narrative) - USD ($) | Aug. 01, 2017 | Mar. 02, 2017 | Nov. 02, 2012 | Nov. 30, 2016 | Sep. 30, 2017 |
Equity Based Incentive Retention Bonues [Line Items] | |||||
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 | ||||
Number of shares of restricted common stock | 4,587,190 | 10,000,000 | |||
Shares of restricted common stock value | $ 63,303 | $ 88,850 | |||
Stock-based Compensation | $ 66,393 | ||||
Prepaid compensation | 33,607 | ||||
Mikkel Pitzner [Member] | |||||
Equity Based Incentive Retention Bonues [Line Items] | |||||
Annual fee | $ 6,000 | ||||
Number of shares of restricted common stock | 2,000,000 | ||||
Shares of restricted common stock value | $ 25,000 | ||||
Wesley P. Siebenthal [Member] | Six Month Advisory Agreement [Member] | |||||
Equity Based Incentive Retention Bonues [Line Items] | |||||
Number of shares issued for services | 2,000,000 | ||||
Stock issued during period issued for services, value | $ 25,000 | ||||
Blake Carmichael [Member] | Six Month Employment Agreement [Member] | |||||
Equity Based Incentive Retention Bonues [Line Items] | |||||
Number of shares issued for services | 2,000,000 | ||||
Stock issued during period issued for services, value | $ 25,000 | ||||
Monthly salary | $ 3,600 | ||||
Robert Carmichael [Member] | |||||
Equity Based Incentive Retention Bonues [Line Items] | |||||
Number of shares of restricted common stock | 2,000,000 | ||||
Shares of restricted common stock value | $ 25,000 | ||||
Robert Carmichael and Mikkel Pitzner [Member] | |||||
Equity Based Incentive Retention Bonues [Line Items] | |||||
Stock-based Compensation | 50,000 | ||||
Employment and Advisory [Member] | |||||
Equity Based Incentive Retention Bonues [Line Items] | |||||
Stock-based Compensation | $ 16,393 |
Interest Expense Non-Related 52
Interest Expense Non-Related Parties and Other Expense (Income), Net (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Interest expense, non related party | $ 7,750 | $ 7,734 | $ 23,140 | $ 23,251 |
Other expenses | 6,712 | 20,895 | ||
Interest expenses | 7,750 | 23,140 | 23,823 | |
Other income | $ 1,038 | 3,173 | $ 2,245 | 274,117 |
Online training liability expense | 2,273 | |||
Convertible Debentures [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Interest expense, debt | 7,695 | 23,093 | ||
Notes Payable [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Interest expense, debt | $ 39 | $ 158 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Subsequent Event [Member] | ||
Gross proceeds from sale of common unit | $ 60,000 | |
Sale of common unit during the period | 1,304,348 | |
Sale of common units per unit | $ 0.046 | |
Number of unit consist of common stock | 4 | |
Common stock, par value | $ 0.0001 | |
Common stock purchase of warrant | 1 | |
Warrants term | 2 years | |
Warrants exercise price per share | $ 0.0115 |