Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | May 31, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | CalEthos, Inc. | ||
Entity Central Index Key | 0001174891 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | true | ||
Entity Public Float | $ 283,525 | ||
Entity Common Stock, Shares Outstanding | 12,960,621 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Balance Sheet
Balance Sheet - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash and cash equivalents | $ 123,000 | |
Prepaid expenses | 2,000 | 2,000 |
Total Assets | 2,000 | 125,000 |
Current Liabilities | ||
Accounts payable and accrued expenses | 611,000 | 363,000 |
Notes payable, net | 11,000 | |
Convertible promissory notes, net | 703,000 | 323,000 |
Total Liabilities | 1,325,000 | 686,000 |
Stockholders' Deficit | ||
Preferred stock, value | ||
Common stock par value $0.001, 100,000,000 shares authorized; 16,634,951 and 16,634,951, respectively, shares issued and outstanding | 17,000 | 17,000 |
Additional paid-in capital | 8,744,000 | 8,750,000 |
Stock subscription receivable | (2,000) | (2,000) |
Accumulated deficit | (10,082,000) | (9,326,000) |
Total Stockholders' Deficit | (1,323,000) | (561,000) |
Total Liabilities and Stockholders' (Deficit) Equity | 2,000 | 125,000 |
Series A Convertible Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock, value |
Balance Sheet (Parenthetical)
Balance Sheet (Parenthetical) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 16,634,951 | 16,634,951 |
Common stock, shares outstanding | 16,634,951 | 16,634,951 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 3,600,000 | 3,600,000 |
Preferred stock, shares issued | 85,975 | 85,975 |
Preferred stock, shares outstanding | 85,975 | 85,975 |
Preferred stock, liquidation preference, value | $ 119,000 | $ 119,000 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue | ||
Operating expenses | ||
Professional fees | 340,000 | 1,154,000 |
General and administrative expenses | 51,000 | 40,000 |
Total operating expenses | 391,000 | 1,194,000 |
Loss from operations | (391,000) | (1,194,000) |
Other expenses | ||
Financing costs | (227,000) | (305,000) |
Loss on extinguishment of series A convertible preferred stock | (138,000) | |
Total other expenses | (365,000) | (305,000) |
Loss before provision for income taxes | (756,000) | (1,499,000) |
Provision for income taxes | ||
Net loss | (756,000) | (1,499,000) |
Deemed dividend on conversion price reset of preferred stock series A | (36,000) | |
Net Loss attributable to common stockholders | $ (756,000) | $ (1,535,000) |
Net loss per share, basic and diluted | $ (0.05) | $ (0.09) |
Weighted average common shares outstanding - basic and diluted | 16,634,951 | 16,634,951 |
Statement of Changes in Stockho
Statement of Changes in Stockholders' Deficit - USD ($) | Series A Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Stock Subscription Receivable [Member] | Accumulated Deficit [Member] | Total |
Beginning Balance at Dec. 31, 2018 | $ 17,000 | $ 7,660,000 | $ (16,000) | $ (7,827,000) | $ (166,000) | |
Beginning Balance, shares at Dec. 31, 2018 | 35,975 | 16,634,951 | ||||
Proceeds from the sale of series A convertible preferred stock | 69,000 | 69,000 | ||||
Proceeds from the sale of series A convertible preferred stock, shares | 50,000 | |||||
Beneficial conversion feature ("BCF") associated with convertible promissory notes | 239,000 | 239,000 | ||||
Stock options issued for services | 577,000 | 577,000 | ||||
Conversion price reset for preferred stock series A | 36,000 | 36,000 | ||||
Deemed dividend on conversion price reset of preferred stock series A | (36,000) | (36,000) | ||||
Deposits from issuance of founder preferred shares | 14,000 | 14,000 | ||||
Fair value of warrants issued with the conversion of series A convertible preferred stock | ||||||
Debt premium on convertible promissory notes issued for conversion of series A convertible preferred stock | ||||||
Relative fair value of warrants issued with convertible promissory notes | 205,000 | 205,000 | ||||
Net loss | (1,499,000) | (1,499,000) | ||||
Ending Balance at Dec. 31, 2019 | $ 17,000 | 8,750,000 | (2,000) | (9,326,000) | (561,000) | |
Ending Balance, shares at Dec. 31, 2019 | 85,975 | 16,634,951 | ||||
Conversion of series A convertible preferred Stock to convertible promissory notes | (119,000) | (119,000) | ||||
Conversion of series A convertible preferred Stock to convertible promissory notes, shares | (85,975) | |||||
Fair value of warrants issued with the conversion of series A convertible preferred stock | 52,000 | 52,000 | ||||
Debt premium on convertible promissory notes issued for conversion of series A convertible preferred stock | 58,000 | 58,000 | ||||
Relative fair value of warrants issued with convertible promissory notes | 3,000 | 3,000 | ||||
Net loss | (756,000) | (756,000) | ||||
Ending Balance at Dec. 31, 2020 | $ 17,000 | $ 8,744,000 | $ (2,000) | $ (10,082,000) | $ (1,323,000) | |
Ending Balance, shares at Dec. 31, 2020 | 16,634,951 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | ||
Net loss | $ (756,000) | $ (1,499,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of convertible promissory notes discounts | 188,000 | 305,000 |
Loss on conversion of convertible preferred stock | 86,000 | |
Fair value of warrants issued with convertible promissory notes | 52,000 | |
Fair value of equity-based compensation | 577,000 | |
Changes in operating asset and liabilities | ||
Accounts payable and accrued expenses | 248,000 | 199,000 |
Net cash used in operating activities | (182,000) | (418,000) |
Cash flows from investing activity | ||
Cash held by officer | 12,000 | |
Net cash provided by investing activity | 12,000 | |
Cash flows from financing activities | ||
Proceeds from the issuance of convertible promissory notes | 49,000 | 460,000 |
Proceeds from the issuance of notes payable | 10,000 | |
Proceeds from issuance of convertible preferred stock | 69,000 | |
Net cash provided by financing activities | 59,000 | 529,000 |
Net change in cash | (123,000) | 123,000 |
Cash at beginning of reporting period | 123,000 | |
Cash at end of reporting period | 123,000 | |
Supplemental disclosure of cash flows information | ||
Interest paid | ||
Income tax paid | ||
Supplemental disclosure of non-cash financing activities: | ||
Conversion of series A preferred stock to convertible promissory notes | 119,000 | |
Fair value of warrants issued with the conversion of series A convertible preferred stock | 52,000 | |
Debt premium on issuance of convertible promissory notes for conversion of series A convertible preferred stock | 58,000 | |
Relative fair value of warrants issued with convertible notes | 3,000 | 205,000 |
Beneficial conversion feature issued with convertible notes | 239,000 | |
Stock subscription receivable | $ (14,000) |
Organization and Accounting Pol
Organization and Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Accounting Policies | Note 1 - Organization and Accounting Policies CalEthos, Inc. (the “Company”) was incorporated on March 20, 2002 under the laws of the State of Nevada. Since the second quarter of 2016, the Company has been a “shell” company, as defined in Rule 12b-2 under the Exchange Act. On December 20, 2018, we filed a Certificate of Amendment to our Articles of Incorporation with the Secretary of State of the State of Nevada to change the Company name from “RealSource Residential, Inc.” to “CalEthos, Inc.”. This amendment became effective immediately upon filing on December 20, 2018. Change in Control On May 16, 2018, certain majority stockholders of the Company, including certain former directors and officers of the Company, entered into a stock purchase agreement dated May 16, 2018 (the “Control Purchase Agreement”) with RealSource Acquisition Group, LLC, a Utah limited liability company (“RealSource Acquisition”), whereby RealSource Acquisition agreed to purchase an aggregate of 11,006,356 shares (440,256 shares after giving effect to the Reverse Stock Split (see Note 3) (the “Control Shares”) of the Company’s issued and outstanding shares of common stock for an aggregate purchase price of $180,000. Immediately prior to the closing under the Control Purchase Agreement on September 12, 2018 (the “Closing Date”), RealSource Acquisition assigned its rights under the Control Purchase Agreement to M1 Advisors, LLC, a Delaware limited liability company (“M1 Advisors”), pursuant to a purchase agreement and assignment and assumption of contract rights dated as of August 28, 2018 between RealSource Acquisition and M1 Advisors. M1 Advisors paid RealSource Acquisition $80,000 as consideration for such assignment. Effective on the Closing Date, and in accordance with the amended and restated by laws of the Company and the requirements of the Control Purchase Agreement, (a) each of Michael S. Anderson, Nathan W. Hanks and V. Kelly Randall resigned as directors of the Company, (b) Michael Campbell, the sole member of M1 Advisors, and Piers Cooper were elected to the Company’s board of directors, and (c) Mr. Hanks also resigned as president and chief executive officer of the Company, Mr. Randall also resigned as chief operating office and chief financial officer of the Company, Mr. Campbell was appointed the chief executive officer of the Company and Piers Cooper was appointed president of the Company. On the Closing Date, the Company entered into a series A preferred stock purchase agreement dated as of the Closing Date (the “Preferred Purchase Agreement”) with M1 Advisors, which is an entity controlled by Michael Campbell, the Company’s chief executive officer and a director of the Company at such time, Piers Cooper, the Company’s president and a director of the Company at such time, the members of RealSource Acquisition, and the other investors who were signatories thereto (collectively, the Purchasers”). Pursuant to the Preferred Purchase Agreement, the Company sold to the Purchasers an aggregate of 15,600,544 shares of the Company’s series A preferred stock, which has since been re-designated as Founder preferred stock (“Founder Preferred Stock”), for an aggregate purchase price of $16,000, or $0.001 per share. Of the Founder Preferred Stock purchased, 9,320,414 shares were purchased by M1 Advisors, 4,674,330 shares were purchased by Mr. Cooper and an aggregate of 1,195,000 shares were purchased by the members of RealSource Acquisition or their assigns. Immediately following the above transactions, an aggregate of 15,600,544 shares of Founder Preferred Stock and 630,207 shares of common stock was issued and outstanding. At such time, the shares of Founder Preferred Stock and common stock owned by M1 Advisors represented approximately 60.14% of the issued and outstanding shares of capital stock of the Company on a fully-diluted basis and the shares of Founder Preferred Stock owned by Mr. Cooper represented approximately 28.80% of the issued and outstanding shares of capital stock of the Company on a fully-diluted basis. The shares of Founder Preferred Stock acquired by M1 Advisors were purchased with funds that M1 Advisors borrowed from another entity controlled by Mr. Campbell. Business Activity Following the change in control, as described above, the board of directors determined to establish the Company in the rapidly-growing cannabis industry, initially in the State of California. As of December 31, 2020, the primary activity of the Company’s management is to develop and implement a plan to manufacture high-performance computer systems that are scalable, upgradeable and cost effective for processing cryptocurrencies, tokens and blockchain-based transactions, and if other opportunities warrant, acquire assets and all or part of other companies operating in the cryptocurrency mining hardware industry and or invest or joint venture with other more established companies already in the industry. The Company will not restrict its search to any specific business, segment of the cryptocurrency mining hardware industry or geographical location and the Company may participate in a business venture of virtually any kind or nature that is beneficial to the Company and its shareholders. Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and assuming that the Company will continue as a going concern. The Company has no established operations as of December 31, 2020. Accounting Policies The Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles. Going Concern and Liquidity The Company incurred a net loss of approximately $756,000 for the year ended December 31, 2020, and had an accumulated deficit of approximately $10,082,000 as of December 31, 2020. The Company has financed its activities principally through debt and equity financing and shareholder contributions. Management expects to incur additional losses and cash outflows in the foreseeable future in connection with its operating activities. The Company’s financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is subject to a number of risks similar to those of other similar stage companies, including dependence on key individuals; successful development, marketing and branding of products; uncertainty of product development and generation of revenues; dependence on outside sources of financing; risks associated with research and development; dependence on third-party suppliers and collaborators; protection of intellectual property; and competition with larger, better-capitalized companies. Ultimately, the attainment of profitable operations is dependent on future events, including obtaining adequate financing to fund its operations and generating a level of revenues adequate to support the Company’s cost structure. The Company will need to raise debt or equity financing in the future in order to continue its operations and achieve its growth targets. However, there can be no assurance that such financing will be available in sufficient amounts and on acceptable terms, when and if needed, or at all. The precise amount and timing of the funding needs cannot be determined accurately at this time, and will depend on a number of factors, including market demand for the Company’s products and services, the success of product development efforts, the timing of receipts for customer deposits, the management of working capital, and the continuation of normal payment terms and conditions for purchase of goods and services. The Company believes its cash balances and cash flow from operations will not be sufficient to fund its operations and growth for the next twelve months from the issuance date of these financial statements. If the Company is unable to substantially increase revenues, reduce expenditures, or otherwise generate cash flows from operations, then the Company will likely need to raise additional funding from investors or through other avenues to continue as a going concern. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Fair Value of Financial Instruments The Company has estimated the fair value of its financial instruments using the available market information and valuation methodologies considered to be appropriate and has determined that the book value of the Company’s prepaid expenses, accounts payable and accrued expenses, as of December 31, 2020 and 2019, respectively, approximate fair value based of their short-term nature. Fair Value Measurement Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Other inputs that are directly or indirectly observable in the marketplace. Level 3 - Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. As of and for the year ended December 31, 2020, the Company had no assets or liabilities that require fair value measurement. Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. Cash and cash equivalents are recorded at cost, which approximates its fair value. As of December 31, 2020 and 2019, the Company held only cash deposits at a financial institution. Related Parties The Company follows FASB Accounting Standards Codification (“ASC”) section 850-10 for the identification of related parties and disclosure of related party transactions. Pursuant to ASC section 850-10-20 the related parties include (a.) affiliates of the Company (“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act); (b.) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option of ASC section 825–10–15, to be accounted for by the equity method by the investing entity; (c.) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d.) principal owners of the Company; (e.) management of the Company; (f.) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g.) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a.) the nature of the relationship(s) involved; (b.) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c.) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d.) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. Commitments and Contingencies The Company follows ASC section 450-20 to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Debt Discounts The Company accounts for debt discounts originating in connection with conversion features that remain embedded in the related notes in accordance with ASC 470-20, Debt with Conversion and Other Options Warrant Liability In connection with financing arrangements, the Company has issued warrants to purchase shares of its common stock. The outstanding warrants are standalone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards. The Company measures the fair value of the awards using the Black-Scholes Merton (“BSM”) option pricing model as of the measurement date. Stock-Based Compensation We account for our stock-based compensation under ASC 718, “ Compensation – Stock Compensation We use the fair value method for equity instruments granted to non-employees and use the BSM model for measuring the fair value of options. The stock based fair value compensation is determined as of the date of the grant (measurement date) and is recognized over the vesting periods. Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes The Company is a United States Company, incorporated in the state of Delaware and has its office in California. The Company has no foreign operations. The tax reform bill that Congress voted to approve December 20, 2017, also known as the “Tax Cuts and Jobs Act”, made sweeping modifications to the Internal Revenue Code, including a much lower corporate tax rate, changes to credits and deductions, and a move to a territorial system for corporations that have overseas earnings. The act replaced the prior-law graduated corporate tax rate, which taxed income over $10 million at 35%, with a flat rate of 21%. The Company accounts for income taxes using an asset and liability approach, which requires the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. The measurement of current and deferred tax assets and liabilities is based on provisions of enacted tax laws; the effects of future changes in tax laws or rates are not anticipated. If necessary, the measurement of deferred tax assets is reduced by the amount of any tax benefits that are not expected to be realized based on available evidence. The Company has adopted guidance related to the accounting for uncertainty in income taxes which prescribes rules for recognition, measurement and classification in the financial statements of tax positions taken or expected to be taken in a tax return. The guidance prescribes a two-step approach which involves evaluating whether a tax position will be more likely than not (greater than 50 percent likelihood) sustained upon examination based on the technical merits of the position. The second step requires that any tax position that meets the more likely than not recognition threshold be measured and recognized in the financial statements at the largest amount of benefit that is a greater than 50 percent likelihood of being realized upon settlement. The Company’s policy is to recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense. The Company is not currently under examination by any taxing authority nor has the Company been notified of a pending examination. The statute of limitations for which the Company is generally no longer subject to federal or state income tax examinations by tax authorities is for years before 2013. Earnings Per Share We use ASC 260, “ Earnings Per Share There were 1,800,214 common share equivalents at December 31, 2020 and 1,397,000 common share equivalents at December 31, 2019. For the years ended December 31, 2020 and 2019, these potential shares were excluded from the shares used to calculate diluted. These securities were not included in the computation of diluted net earnings per share as their effect would have been antidilutive. Recent Accounting Pronouncements Changes to accounting principles are established by the Financial Accounting Standards Board’s (“FASB”) in the form of Accounting Standards Update (“ASU”) to the FASB’s Codification. We consider the applicability and impact of all ASUs on our financial position, results of operations, cash flows, or presentation thereof. The Company reviewed all recently issued pronouncement in 2021, but not yet effective, and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on the Company’s financial condition or the results of its operations. |
Cash and Cash Equivalents
Cash and Cash Equivalents | 12 Months Ended |
Dec. 31, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | Note 2 – Cash and Cash Equivalents Cash equivalents are short-term cash investments, which are made for varying periods of up to three (3) months, depending on the immediate cash requirements of the Company and earn interest at prevailing short-term investment rate. As of December 31, 2020 and 2019, the Company held only cash deposits at a financial institution amounting to $0 and $123,000, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 3 – Related Party Transactions The Company incurred approximately $180,000 for years ended December 31, 2020 and 2019, and paid approximately $112,000 and $180,000, respectively, to M1 Advisors for the services of the Company’s CEO and miscellaneous operating expenses. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | Note 4 – Accounts payable and accrued expenses as of December 31, are as follows: 2020 2019 Accounts payable $ 316,000 $ 187,000 Accrued expenses 255,000 176,000 Accrued interest 40,000 – Accounts payable and accrued expenses $ 611,000 $ 363,000 |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2020 | |
Notes Payable [Abstract] | |
Notes Payable | Note 5 – Notes Payable During the year ended December 31, 2020, the Company issued a promissory note for $11,000 (“Promissory Note”). The total proceeds were $10,000, due to approximately $1,000 for an original issue discount. The Promissory Note is non-interest bearing with the principal due and payable in August 2020. Any amount of unpaid principal on the date of maturity will accrue interest at rate of 10% per annum (default interest). The original issue discount was amortized over the term of the Promissory Note, which was one month. As of September 30, 2020, the Promissory note was in default, so the Company accrued approximately $1,000 of default interest. |
Convertible Promissory Notes
Convertible Promissory Notes | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Promissory Notes | Note 6 – During the year ended December 31, 2020, the Company issued convertible promissory notes in the amount of $213,000 (the “Notes”). The total cash proceeds were approximately $60,000, approximately $147,000 from the conversion of Series A Preferred Stock into convertible promissory note and approximately $6,000 original issue discount (“OID”). The Notes are non-interest bearing with the principal due and payable starting in February 2021. Any amount of unpaid principal on the date of maturity will accrue interest at rate of 10% per annum (default interest). The principal amount and all accrued interest are convertible into shares of the Company’s common stock, as of the date of issuance, at a rate of $1.00 per share (“Conversion Rate”). The conversion rate is adjustable if, at any time when any principal amount of the Notes remains unpaid or unconverted, the Company issues or sells any shares of the Company’s common stock for no consideration or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith), which is less than the Conversion Rate in effect on the date of such issuance (or deemed issuance) of such shares of common stock (a “Dilutive Issuance”). Immediately upon a Dilutive Issuance, the Conversion Rate will be reduced to the amount of the consideration per share received by the Company in such Dilutive Issuance. Events of default include failure to issue conversion shares, the occurrence of a breach or default under any other agreement, any money judgment, writ or similar process entered or filed against the Company or any its property or other assets for more than $100,000, bankruptcy filing, application for the appointment of a custodian, trustee or receiver, insolvency, the Company’s common stock delisted, or dissolution, winding up, or termination of the business of the Company. In connection with the issuance of the Notes, the Company issued to the purchasers of the Notes stock purchase warrants to purchase an aggregate of 359,000 shares of the Company’s common stock for a purchase price of $1.50 per share, subject to adjustments. In accordance with ASC 470 - Debt The Company determined that the conversion feature of the Notes would not be an embedded feature to be bifurcated and accounted for as a derivative in accordance with ASC 818-15 Derivatives and Hedging The convertible promissory notes consisted of the following: December 31, 2020 December 31, 2019 Principal Amount $ 708,000 $ 506,000 Original issue discount (3,000 ) (19,000 ) Warrant discount (2,000 ) (79,000 ) Conversion feature discount – (85,000 ) Net balance $ 703,000 $ 323,000 The discounts of $5,000 as of December 31, 2020, will be amortized and expensed over the remaining contractual life of the convertible promissory notes. The amortization expense will be approximately $5,000 for the year ending December 31, 2021. Interest expense on default convertible notes amounted to approximately $39,000 and $0 for the years ended December 31, 2020 and 2019. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Deficit | Note 7 – Stockholders’ Deficit Shares Authorized On August 28, 2018, the Company filed a Certificate of Change to the Articles of Incorporation with the Secretary of State of the State of Nevada to (i) reduce the authorized shares of common stock from 100,000,000 shares to 4,000,000 shares and (ii) to effectuate a stock combination or reverse stock split whereby every 25 outstanding shares of the Company’s common stock were converted into one share of common stock. This amendment became effective on August 30, 2018. All share and per share amounts in these financial statements have been restated to give effect to such reverse stock split. On December 20, 2018, the Company filed a Certificate of Amendment to the Articles of Incorporation with the Secretary of State of the State of Nevada to increase the Company’s authorized shares of common stock from 4,000,000 shares to 100,000,000 shares. This amendment became effective immediately upon filing on The Company is authorized to issue 200,000,000 shares of which 100,000,000 shares shall be preferred stock, par value $0.001 per share, and 100,000,000 shares shall be common stock, par value $0.001 per share. Common Stock In accordance with the Control Purchase Agreement, the Company was required to effectuate a reverse stock split of the Company’s common stock (the “Reverse Stock Split”). The Company’s board of directors approved the Reverse Stock Split of the Company’s authorized, issued and outstanding shares of common stock at a ratio of one for twenty-five. In connection with the Reverse Stock Split, which was effected on September 11, 2018, the issued and outstanding shares of the Company’s common stock decreased from 15,719,645 shares to 630,207 shares as of December 31, 2017. The par value was amended to be $0.001 per share. All share information has been retroactively restated for the Reverse Stock Split. As of December 31, 2020 and 2019, the Company issued 16,634,951 shares for both periods at $0.001 per share. Preferred Stocks Founders Preferred Stock On September 12, 2018, the Company’s board of directors approved, and the Company filed with the Secretary of State of the State of Nevada, a certificate of designation pursuant to which 15,754,744 shares of the Company’s authorized preferred stock were designated as Series A Preferred Stock. The Series A Preferred Stock had one vote per share, had other rights, including upon liquidation of the Company, identical to those of the Company’s common stock, and was automatically convertible into shares of the Company’s common stock, initially on a one-for-one basis, upon any increase in the Company’s authorized but unissued shares of the Company’s common stock to a number that will allow for the issued and outstanding shares of Series A Preferred Stock to be converted in full. On September 12, 2018, the Company issued and sold an aggregate of 15,754,744 shares of Series A Preferred Stock for an aggregate purchase price of $16,000. On October 14, 2018, the board of directors of Company approved, and on October 22, 2018, the holders of all of the outstanding shares of the Company’s Series A Preferred Stock consented to, an amendment to the certificate of designation that the Company filed with the Secretary of State of the State of Nevada to create the outstanding Series A Preferred Stock, to change the designation of the outstanding Series A Preferred Stock from “Series A Preferred Stock” to “Founder Preferred Stock.” An amendment to the Certificate to effect such change was filed with the Secretary of State of Nevada on October 29, 2018. On December 20, 2018, all of the Founder Preferred Stock was converted into 15,754,744 shares of the Company’s common stock. Series A Convertible Preferred Stock In January 2019, the Company issued and sold an aggregate of 50,000 shares of Series A Preferred Stock for an aggregate purchase price of $69,000, or $1.38 per share. The Company initiated a private placement of shares of series A convertible preferred stock. During the years ended December 31, 2019 and 2018, the Company sold 50,000 and 35,975, respectively, shares of Series A for total proceeds of approximately $69,000 and $50,000, respectively, or $1.38 per share. The Series A is convertible into shares of the Company’s common stock at the rate of $1.38 per share, subject to adjustments based on the Company’s future sales of financial instruments at a value less than $1.38 per share. The holders of the Series A have the right to convert any time after the date of issuance. With the issuance of the convertible promissory notes, as explained in Note 5 above, the Series A’s conversion rate adjusted to $1.00 per share. In accordance with ASC 470, the Company has calculated the effect of the conversion rate adjustment, which was approximately $36,000. The conversion rate adjustment has been treated as a deemed dividend, which has been presented in the Statement of Changes in Stockholders’ Deficit. The Series A is mandatorily convertible upon (i) the closing of the sale of shares of the Company’s common stock to the public in an underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $10,000,000 of gross proceeds to the Company, (ii) the close of business on the sixtieth consecutive day on which the closing price of the Company’s common stock on the OTC Markets is at least $2.80 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, stock combination or other similar recapitalization with respect to the common stock, or (iii) the affirmative vote of the holders of at least 66⅔% of the outstanding shares of Series A, given at a meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders all outstanding shares of Series A shall automatically be converted into shares of the Company’s common stock, at the then effective conversion rate. On any matter presented to the stockholders of the Company for their action or consideration at any meeting of stockholders of the Company (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Series A shall be entitled to cast the number of votes equal to the number of whole shares of common stock into which the shares of Series A held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the other provisions of the Articles of Incorporation, holders of Series A shall vote together with the holders of common stock as a single class. From and after the date of the issuance of any shares of Series A, a cumulative dividend on each outstanding share of Series A Preferred Stock shall accrue at a rate per annum equal to ten percent of the Series A original issue price. Accrued dividends on the Series A shall be paid in shares of the Company’s common stock, such shares to be valued for such purpose at the applicable series A conversion price. On February 11, 2020, the Company converted 85,975 shares of Series A Preferred Stock into a Convertible Promissory Notes in the principal amount approximately $147,000. Issuance of Stock Options The Company entered into three separate consulting agreements with provisions for the issuance of options under the Company’s 2019 Stock Options Plan to purchase 685,000, 250,000 and 15,000 shares of the Company’s common stock. The Options will have a life of three years from the vesting date and an exercise price of $0.001 per share with the following vesting terms: Option to purchase 685,000 shares i. 385,000 shares vest upon the signing of the consulting agreement; and ii. 300,000 shares vest on the first anniversary of the date on which the consultant serves as full-time employee as the Company’s Vice President of Capital Markets. As of the expiration of the contract, the employee was not hired by the Company. These options would have been issued if the performance condition was met. As the performance condition was not met prior to expiration of the contract, these options were neither issued nor ever granted. Option to purchase 250,000 shares i. 50,000 shares vest upon the completion of the Company’s first Retail Showcase Store. As the performance condition was not met prior to expiration of the contract, these options were neither issued nor ever granted; ii. 100,000 shares vest on the first anniversary date on which the consultant serves as the Vice President of Retail Store Development of the Company as full-time employee. As the performance condition was not met prior to expiration of the contract, these options were neither issued nor ever granted; and iii. 100,000 shares to vest 1/12 th Option to purchase 15,000 shares i. 15,000 shares to vest upon the completion of the Company’s first Retail Showcase Store. As the performance condition was not met prior to expiration of the contract, these options were neither issued nor ever granted. The options that could be granted to the consultants will be performance-based awards to be vested once the individuals are considered to be employees of the Company. Each of the consultants has the option to become a full-time employee only after Company has received a minimum of $5,000,000 in debt or equity financing for the Company’s operations (the “Financing”). This is the time that the Company would begin to operate and use the services of the three option holders. Until the Financing occurs, the Company will be in the predevelopment stage of its intended business model. As of 12/31/2020 all of these consultant agreements had been terminated, as such, no options were issued nor ever granted. An option to purchase 385,000 shares of the Company’s common stock, for $0.001 per share, was granted and vested on April 1, 2019. For the year ended December 31, 2019, the compensation expense, classified as professional fees in the statement of operations, was $577,000, which was calculated using the BSM fair value option-pricing model with key input variables provided by management, as of the date of issuance: volatility of 324%, fair value of common stock $1.50, term of option 3 years, risk free rate of 2.29% and dividend rate of $0. The table below summarizes the Company’s stock option activities for the reporting period ended December 31, 2020 and 2019 (all share and per share data reflects the reverse stock split): Number of Stock Option Shares Exercise Price Range Per Share Weighted Average Exercise Price Relative Fair Value Aggregate Intrinsic Value Balance, January 1, 2019 184,800 $ 12.50 $ 12.50 $ – $ – Granted 385,000 0.001 0.001 1.49 578,000 Canceled – – – – – Exercised – – – – – Expired – – – – – Balance, December 31, 2019 569,800 $ – $ 4.05 $ – $ 423,000 Granted – – – – – Canceled – – – – – Exercised – – – – – Expired (184,800 ) 12.50 12.50 – – Balance, December 31, 2020 385,000 $ – $ 0.001 $ – $ 7,315 Earned and exercisable, Dec 31, 2020 385,000 $ – $ 0.001 $ – $ 7,315 Unvested, December 31, 2020 – $ – $ – $ – $ – The following table summarizes information concerning outstanding and exercisable stock options as of December 31, 2020: Stock Options Outstanding Stock Options Exercisable Range of Exercise Prices Number Outstanding Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Average Remaining Contractual Life (in years) Weighted Average Exercise Price $ 0.001 385,000 1.25 $ 0.001 385,000 1.25 $ 0.001 Warrants Issued The table below summarizes the Company’s warrant activities for the reporting period ended December 31, 2020 and 2019 Number of warrants issued Exercise Price Weighted Average Exercise Price Balance, January 1, 2019 - $ - $ - Granted 253,000 1.50 1.50 Canceled - - - Exercised - - - Balance, December 31, 2019 253,000 1.50 1.50 Granted 100,804 1.50 1.50 Canceled - - - Exercised - - - Balance, December 31, 2020 353,804 1.50 1.50 |
Deferred Tax Assets and Income
Deferred Tax Assets and Income Tax Provision | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Deferred Tax Assets and Income Tax Provision | Note 8 – Deferred Tax Assets and Income Tax Provision Deferred Tax Assets At December 31, 2020, the Company had net operating loss (“NOL”) carry forwards for Federal income tax purposes of $1,425,000 that may be offset against future taxable income through 2038. No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying financial statements because the Company believes that the realization of the Company’s net deferred tax assets of approximately $1,425,000 was not considered more likely than not and accordingly, the potential tax benefits of the net operating loss carry-forwards are fully offset by a full valuation allowance. On September 12, 2018, the Company believes that an “ownership change” has occurred within the meaning of Sections 382 and 383 of the Code. An ownership change is generally defined as a more than 50 percentage point increase in equity ownership by “5 percent shareholders” (as that term is defined for purposes of Sections 382 and 383 of the Code) in any three-year period or since the last ownership change if such prior ownership change occurred within the prior three-year period. As a result of the ownership change on September 12, 2018, the limitations on the use of pre-change losses and other carry forward tax attributes in Sections 382 and 383 of the Code apply and the Company will not be able to utilize any portion of their NOL carry forwards from the years prior to December 31, 2017 and the portion of the NOL for 2018 allocable to the portion of the year prior to September 12, 2018. The utilization of the NOL for 2018 allocable to the portion of the year after September 12, 2018 and the NOLs from subsequent years should not be affected by the ownership change on the September 12, 2018. Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realization. The valuation allowance increased by approximately $93,000 and $161,000 for the reporting periods ended Components of deferred tax assets are as follows as of December 31: 2020 2019 Net deferred tax assets – Non-current: Expected income tax benefit from NOL carry-forwards $ 299,000 $ 206,000 Less valuation allowance (299,000 ) (206,000 ) Deferred tax assets, net of valuation allowance $ − $ − Income Tax Provision in the Statements of Operations A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows for the years ended December 31: 2020 2019 Federal statutory income tax rate 21.0 % 21.0 % Change in valuation allowance on net operating loss carry-forwards (21.0 ) (21.0 ) Effective income tax rate 0.0 % 0.0 % |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 9 – Subsequent Events The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The management of the Company determined the following reportable non-adjusting event: On January 5, 2021, Piers Cooper (“Mr. Cooper”), our President and a member of our Board of Directors, resigned as an officer and director of our company (“Termination Agreement”). As part of the Termination Agreement, Mr. Cooper’s agreed to return 3,674,330 shares of the Company’s common stock (“Cancelled Shares”). The Cancelled shares were to be returned within thirty days of Mr. Cooper’s execution of the Termination Agreement, which was January 5, 2021. The Cancelled Shares were returned and cancelled on April 19, 2021. In January 2021, the Company issued a promissory note for cash amounting to $15,000 with 8% annual interest per year and a maturity date of March 31, 2022. Interest will be computed starting January 11, 2021 and payable at maturity date together with the principal amount. In the event of default, the interest rate of the note shall increase to 10% per annum and computed on the basis of the actual number of days elapsed and a 365-day year. In February 2021, the Company issued a promissory note for cash amounting to $25,000 with 10% annual interest per year and a maturity date of February 19, 2022. The principal and accrued interest is payable in a single installment on or before the maturity date. In the event of default, the interest rate of the note shall increase to 15% per annum and computed on the basis of the actual number of days elapsed and a 365-day or 366-day year. In March 2021, the Company issued a convertible promissory note in the amount of $55,000 (the “Note”). The total proceeds were approximately $50,000, due to approximately $5,000 for an original issue discount. The Note is non-interest bearing with the principal due and payable starting in March 2022. Any amount of unpaid principal on the date of maturity will accrue interest at rate of 10% per annum (default interest). The principal amount and all accrued interest are convertible into shares of the Company’s common stock, as of the date of issuance, at a rate of $1.00 per share (“Conversion Rate”). The conversion rate is adjustable if, at any time when any principal amount of the Notes remains unpaid or unconverted, the Company issues or sells any shares of the Company’s common stock for no consideration or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith), which is less than the Conversion Rate in effect on the date of such issuance (or deemed issuance) of such shares of common stock (a “Dilutive Issuance”). Immediately upon a Dilutive Issuance, the Conversion Rate will be reduced to the amount of the consideration per share received by the Company in such Dilutive Issuance. Events of default include failure to issue conversion shares, the occurrence of a breach or default under any other agreement, any money judgment, writ or similar process entered or filed against the Company or any of its property or other assets for more than $100,000, bankruptcy filing, application for the appointment of a custodian, trustee or receiver, insolvency, the Company’s common stock delisted, or dissolution, winding up, or termination of the business of the Company. In connection with the issuance of the Notes, the Company issued to the purchasers of the Notes stock purchase warrants (the “Warrants”) to purchase an aggregate of 27,500 shares of the Company’s common stock for a purchase price of $1.50 per share, subject to adjustments. In February 2021, the Company signed a new consulting agreement that granted one of its shareholders an option to purchase 750,000 shares of the Company’s common stock at $0.001 per share for the consultancy work provided from August 2020 to February 2021. The options were fully vested on the date of issuance. In March 2021, the CEO agreed to forgive approximately $68,000 due to him. In March 2021, the CFO agreed to reduce amount due to him from approximately $127,000 to $30,000. For the reduction of $97,000, the Company will issue 75,000 shares of common stock. The remaining liability of $30,000 will be paid in cash. In April 2021, the Company issued a promissory note for cash amounting to $8,550 with 0% annual interest per year if paid at a maturity date of July 5, 2021. In the event of default, the interest rate of the note shall increase to 8% per annum and computed on the basis of the actual number of days elapsed and a 365-day or 366-day year. In April 2021, an option holder exercised two options for 385,000 and 750,000 shares of the Company's common stock at an exercise price of $0.001 for both options. The shares for the options have yet to be issued. In April 2021, the Company issued a promissory note for cash amounting to $50,000 with 10% annual interest per year and a maturity date of April 22, 2022. The principal and accrued interest is payable in a single installment on or before the maturity date. In the event of default, the interest rate of the note shall increase to 15% per annum and computed on the basis of the actual number of days elapsed and a 365-day or 366-day year. |
Organization and Accounting P_2
Organization and Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Change in Control | Change in Control On May 16, 2018, certain majority stockholders of the Company, including certain former directors and officers of the Company, entered into a stock purchase agreement dated May 16, 2018 (the “Control Purchase Agreement”) with RealSource Acquisition Group, LLC, a Utah limited liability company (“RealSource Acquisition”), whereby RealSource Acquisition agreed to purchase an aggregate of 11,006,356 shares (440,256 shares after giving effect to the Reverse Stock Split (see Note 3) (the “Control Shares”) of the Company’s issued and outstanding shares of common stock for an aggregate purchase price of $180,000. Immediately prior to the closing under the Control Purchase Agreement on September 12, 2018 (the “Closing Date”), RealSource Acquisition assigned its rights under the Control Purchase Agreement to M1 Advisors, LLC, a Delaware limited liability company (“M1 Advisors”), pursuant to a purchase agreement and assignment and assumption of contract rights dated as of August 28, 2018 between RealSource Acquisition and M1 Advisors. M1 Advisors paid RealSource Acquisition $80,000 as consideration for such assignment. Effective on the Closing Date, and in accordance with the amended and restated by laws of the Company and the requirements of the Control Purchase Agreement, (a) each of Michael S. Anderson, Nathan W. Hanks and V. Kelly Randall resigned as directors of the Company, (b) Michael Campbell, the sole member of M1 Advisors, and Piers Cooper were elected to the Company’s board of directors, and (c) Mr. Hanks also resigned as president and chief executive officer of the Company, Mr. Randall also resigned as chief operating office and chief financial officer of the Company, Mr. Campbell was appointed the chief executive officer of the Company and Piers Cooper was appointed president of the Company. On the Closing Date, the Company entered into a series A preferred stock purchase agreement dated as of the Closing Date (the “Preferred Purchase Agreement”) with M1 Advisors, which is an entity controlled by Michael Campbell, the Company’s chief executive officer and a director of the Company at such time, Piers Cooper, the Company’s president and a director of the Company at such time, the members of RealSource Acquisition, and the other investors who were signatories thereto (collectively, the Purchasers”). Pursuant to the Preferred Purchase Agreement, the Company sold to the Purchasers an aggregate of 15,600,544 shares of the Company’s series A preferred stock, which has since been re-designated as Founder preferred stock (“Founder Preferred Stock”), for an aggregate purchase price of $16,000, or $0.001 per share. Of the Founder Preferred Stock purchased, 9,320,414 shares were purchased by M1 Advisors, 4,674,330 shares were purchased by Mr. Cooper and an aggregate of 1,195,000 shares were purchased by the members of RealSource Acquisition or their assigns. Immediately following the above transactions, an aggregate of 15,600,544 shares of Founder Preferred Stock and 630,207 shares of common stock was issued and outstanding. At such time, the shares of Founder Preferred Stock and common stock owned by M1 Advisors represented approximately 60.14% of the issued and outstanding shares of capital stock of the Company on a fully-diluted basis and the shares of Founder Preferred Stock owned by Mr. Cooper represented approximately 28.80% of the issued and outstanding shares of capital stock of the Company on a fully-diluted basis. The shares of Founder Preferred Stock acquired by M1 Advisors were purchased with funds that M1 Advisors borrowed from another entity controlled by Mr. Campbell. |
Business Activity | Business Activity Following the change in control, as described above, the board of directors determined to establish the Company in the rapidly-growing cannabis industry, initially in the State of California. As of December 31, 2020, the primary activity of the Company’s management is to develop and implement a plan to manufacture high-performance computer systems that are scalable, upgradeable and cost effective for processing cryptocurrencies, tokens and blockchain-based transactions, and if other opportunities warrant, acquire assets and all or part of other companies operating in the cryptocurrency mining hardware industry and or invest or joint venture with other more established companies already in the industry. The Company will not restrict its search to any specific business, segment of the cryptocurrency mining hardware industry or geographical location and the Company may participate in a business venture of virtually any kind or nature that is beneficial to the Company and its shareholders. |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and assuming that the Company will continue as a going concern. The Company has no established operations as of December 31, 2020. |
Accounting Policies | Accounting Policies The Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles. |
Going Concern and Liquidity | Going Concern and Liquidity The Company incurred a net loss of approximately $756,000 for the year ended December 31, 2020, and had an accumulated deficit of approximately $10,082,000 as of December 31, 2020. The Company has financed its activities principally through debt and equity financing and shareholder contributions. Management expects to incur additional losses and cash outflows in the foreseeable future in connection with its operating activities. The Company’s financial statements have been presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is subject to a number of risks similar to those of other similar stage companies, including dependence on key individuals; successful development, marketing and branding of products; uncertainty of product development and generation of revenues; dependence on outside sources of financing; risks associated with research and development; dependence on third-party suppliers and collaborators; protection of intellectual property; and competition with larger, better-capitalized companies. Ultimately, the attainment of profitable operations is dependent on future events, including obtaining adequate financing to fund its operations and generating a level of revenues adequate to support the Company’s cost structure. The Company will need to raise debt or equity financing in the future in order to continue its operations and achieve its growth targets. However, there can be no assurance that such financing will be available in sufficient amounts and on acceptable terms, when and if needed, or at all. The precise amount and timing of the funding needs cannot be determined accurately at this time, and will depend on a number of factors, including market demand for the Company’s products and services, the success of product development efforts, the timing of receipts for customer deposits, the management of working capital, and the continuation of normal payment terms and conditions for purchase of goods and services. The Company believes its cash balances and cash flow from operations will not be sufficient to fund its operations and growth for the next twelve months from the issuance date of these financial statements. If the Company is unable to substantially increase revenues, reduce expenditures, or otherwise generate cash flows from operations, then the Company will likely need to raise additional funding from investors or through other avenues to continue as a going concern. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company has estimated the fair value of its financial instruments using the available market information and valuation methodologies considered to be appropriate and has determined that the book value of the Company’s prepaid expenses, accounts payable and accrued expenses, as of December 31, 2020 and 2019, respectively, approximate fair value based of their short-term nature. |
Fair Value Measurement | Fair Value Measurement Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Other inputs that are directly or indirectly observable in the marketplace. Level 3 - Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. As of and for the year ended December 31, 2020, the Company had no assets or liabilities that require fair value measurement. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. Cash and cash equivalents are recorded at cost, which approximates its fair value. As of December 31, 2020 and 2019, the Company held only cash deposits at a financial institution. |
Related Parties | Related Parties The Company follows FASB Accounting Standards Codification (“ASC”) section 850-10 for the identification of related parties and disclosure of related party transactions. Pursuant to ASC section 850-10-20 the related parties include (a.) affiliates of the Company (“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act); (b.) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option of ASC section 825–10–15, to be accounted for by the equity method by the investing entity; (c.) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d.) principal owners of the Company; (e.) management of the Company; (f.) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g.) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a.) the nature of the relationship(s) involved; (b.) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c.) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d.) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. |
Commitments and Contingencies | Commitments and Contingencies The Company follows ASC section 450-20 to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. |
Debt Discounts | Debt Discounts The Company accounts for debt discounts originating in connection with conversion features that remain embedded in the related notes in accordance with ASC 470-20, Debt with Conversion and Other Options |
Warrant Liability | Warrant Liability In connection with financing arrangements, the Company has issued warrants to purchase shares of its common stock. The outstanding warrants are standalone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards. The Company measures the fair value of the awards using the Black-Scholes Merton (“BSM”) option pricing model as of the measurement date. |
Stock-Based Compensation | Stock-Based Compensation We account for our stock-based compensation under ASC 718, “ Compensation – Stock Compensation We use the fair value method for equity instruments granted to non-employees and use the BSM model for measuring the fair value of options. The stock based fair value compensation is determined as of the date of the grant (measurement date) and is recognized over the vesting periods. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes The Company is a United States Company, incorporated in the state of Delaware and has its office in California. The Company has no foreign operations. The tax reform bill that Congress voted to approve December 20, 2017, also known as the “Tax Cuts and Jobs Act”, made sweeping modifications to the Internal Revenue Code, including a much lower corporate tax rate, changes to credits and deductions, and a move to a territorial system for corporations that have overseas earnings. The act replaced the prior-law graduated corporate tax rate, which taxed income over $10 million at 35%, with a flat rate of 21%. The Company accounts for income taxes using an asset and liability approach, which requires the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. The measurement of current and deferred tax assets and liabilities is based on provisions of enacted tax laws; the effects of future changes in tax laws or rates are not anticipated. If necessary, the measurement of deferred tax assets is reduced by the amount of any tax benefits that are not expected to be realized based on available evidence. The Company has adopted guidance related to the accounting for uncertainty in income taxes which prescribes rules for recognition, measurement and classification in the financial statements of tax positions taken or expected to be taken in a tax return. The guidance prescribes a two-step approach which involves evaluating whether a tax position will be more likely than not (greater than 50 percent likelihood) sustained upon examination based on the technical merits of the position. The second step requires that any tax position that meets the more likely than not recognition threshold be measured and recognized in the financial statements at the largest amount of benefit that is a greater than 50 percent likelihood of being realized upon settlement. The Company’s policy is to recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense. The Company is not currently under examination by any taxing authority nor has the Company been notified of a pending examination. The statute of limitations for which the Company is generally no longer subject to federal or state income tax examinations by tax authorities is for years before 2013. |
Earnings Per Share | Earnings Per Share We use ASC 260, “ Earnings Per Share There were 1,800,214 common share equivalents at December 31, 2020 and 1,397,000 common share equivalents at December 31, 2019. For the years ended December 31, 2020 and 2019, these potential shares were excluded from the shares used to calculate diluted. These securities were not included in the computation of diluted net earnings per share as their effect would have been antidilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Changes to accounting principles are established by the Financial Accounting Standards Board’s (“FASB”) in the form of Accounting Standards Update (“ASU”) to the FASB’s Codification. We consider the applicability and impact of all ASUs on our financial position, results of operations, cash flows, or presentation thereof. The Company reviewed all recently issued pronouncement in 2021, but not yet effective, and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on the Company’s financial condition or the results of its operations. |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses as of December 31, are as follows: 2020 2019 Accounts payable $ 316,000 $ 187,000 Accrued expenses 255,000 176,000 Accrued interest 40,000 – Accounts payable and accrued expenses $ 611,000 $ 363,000 |
Convertible Promissory Notes (T
Convertible Promissory Notes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Promissory Notes | The convertible promissory notes consisted of the following: December 31, 2020 December 31, 2019 Principal Amount $ 719,000 $ 506,000 Original issue discount (3,000 ) (19,000 ) Warrant discount (2,000 ) (79,000 ) Conversion feature discount – (85,000 ) Net balance $ 714,000 $ 323,000 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Stock Option Activities | The table below summarizes the Company’s stock option activities for the reporting period ended December 31, 2020 and 2019 (all share and per share data reflects the reverse stock split): Number of Stock Option Shares Exercise Price Range Per Share Weighted Average Exercise Price Relative Fair Value Aggregate Intrinsic Value Balance, January 1, 2019 184,800 $ 12.50 $ 12.50 $ – $ – Granted 385,000 0.001 0.001 1.49 578,000 Canceled – – – – – Exercised – – – – – Expired – – – – – Balance, December 31, 2019 569,800 $ – $ 4.05 $ – $ 423,000 Granted – – – – – Canceled – – – – – Exercised – – – – – Expired (184,800 ) 12.50 12.50 – – Balance, December 31, 2020 385,000 $ – $ 0.001 $ – $ 7,315 Earned and exercisable, Dec 31, 2020 385,000 $ – $ 0.001 $ – $ 7,315 Unvested, December 31, 2020 – $ – $ – $ – $ – |
Summary of Outstanding and Exercisable Stock Option | The following table summarizes information concerning outstanding and exercisable stock options as of December 31, 2020: Stock Options Outstanding Stock Options Exercisable Range of Exercise Prices Number Outstanding Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Average Remaining Contractual Life (in years) Weighted Average Exercise Price $ 0.001 385,000 1.25 $ 0.001 385,000 1.25 $ 0.001 |
Schedule of Warrants Activity | The table below summarizes the Company’s warrant activities for the reporting period ended December 31, 2020 and 2019 Number of warrants issued Exercise Price Weighted Average Exercise Price Balance, January 1, 2019 - $ - $ - Granted 253,000 1.50 1.50 Canceled - - - Exercised - - - Balance, December 31, 2019 253,000 1.50 1.50 Granted 100,804 1.50 1.50 Canceled - - - Exercised - - - Balance, December 31, 2020 353,804 1.50 1.50 |
Deferred Tax Assets and Incom_2
Deferred Tax Assets and Income Tax Provision (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Deferred Tax Assets | Components of deferred tax assets are as follows as of December 31: 2020 2019 Net deferred tax assets – Non-current: Expected income tax benefit from NOL carry-forwards $ 299,000 $ 206,000 Less valuation allowance (299,000 ) (206,000 ) Deferred tax assets, net of valuation allowance $ − $ − |
Schedule of Reconciliation of Income Tax | A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows for the years ended December 31: 2020 2019 Federal statutory income tax rate 21.0 % 21.0 % Change in valuation allowance on net operating loss carry-forwards (21.0 ) (21.0 ) Effective income tax rate 0.0 % 0.0 % |
Organization and Accounting P_3
Organization and Accounting Policies (Details Narrative) - USD ($) | May 16, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2017 |
Preferred stock, shares outstanding | ||||
Preferred stock, shares issued | ||||
Common stock, shares outstanding | 16,634,951 | 16,634,951 | 630,207 | |
Common stock, shares issued | 16,634,951 | 16,634,951 | 630,207 | |
Net loss | $ (756,000) | $ (1,499,000) | ||
Accumulated deficit | $ (10,082,000) | $ (9,326,000) | ||
Income tax examination description | The act replaced the prior-law graduated corporate tax rate, which taxed income over $10 million at 35%, with a flat rate of 21%. | |||
Corporate tax, amount | $ 10,000,000 | |||
Corporate tax | 21.00% | 21.00% | ||
Common share equivalents | 1,800,214 | 1,397,000 | ||
Control Purchase Agreement [Member] | ||||
Aggregate purchasers shares | 11,006,356 | |||
Number of shares after reserve stock split | 440,256 | |||
Purchase price of shares | $ 180,000 | |||
Payment made as consideration | $ 80,000 | |||
Preferred Purchase Agreement [Member] | ||||
Aggregate purchasers shares | 15,600,544 | |||
Purchase price of shares | $ 16,000 | |||
Purchase price per share | $ 0.001 | |||
Common stock, shares outstanding | 630,207 | |||
Common stock, shares issued | 630,207 | |||
Preferred Purchase Agreement [Member] | Founder Preferred Stock [Member] | ||||
Preferred stock, shares outstanding | 15,600,544 | |||
Preferred stock, shares issued | 15,600,544 | |||
Preferred Purchase Agreement [Member] | M1 Advisors [Member] | ||||
Aggregate purchasers shares | 9,320,414 | |||
Percentage of shares issued and outstanding | 60.14% | |||
Preferred Purchase Agreement [Member] | Mr. Cooper [Member] | ||||
Aggregate purchasers shares | 4,674,330 | |||
Percentage of shares issued and outstanding | 28.80% | |||
Preferred Purchase Agreement [Member] | Members of RealSource Acquisition [Member] | ||||
Aggregate purchasers shares | 1,195,000 |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Cash and Cash Equivalents [Abstract] | ||
Cash and cash equivalents | $ 123,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Proceeds from related parties | $ 180,000 | $ 180,000 |
M1 Advisors [Member] | ||
Payments to officers for services and miscellaneous operating expenses | $ 112,000 | $ 180,000 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 316,000 | $ 187,000 |
Accrued expenses | 255,000 | 176,000 |
Accrued interest | 40,000 | |
Accounts payable and accrued expenses | $ 611,000 | $ 363,000 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | |
Notes payable, net | $ 11,000 | ||
Proceeds from notes payable | 10,000 | ||
Original issue discount | $ 6,000 | ||
Debt instruments, interest rate | 10.00% | ||
Accrued interest | $ 40,000 | ||
Promissory Note [Member] | |||
Notes payable, net | 11,000 | ||
Proceeds from notes payable | 10,000 | ||
Original issue discount | $ 1,000 | ||
Debt instruments, interest rate | 10.00% | ||
Accrued interest | $ 1,000 |
Convertible Promissory Notes (D
Convertible Promissory Notes (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Convertible promissory note | $ 213,000 | ||
Proceeds from issuance of convertible debt | 49,000 | $ 460,000 | |
Proceeds from conversion of series A preferred stock | 147,000 | ||
Original issue discount | $ 6,000 | ||
Debt instruments, interest rate | 10.00% | ||
Debt instruments, conversion price | $ 1 | ||
Events of default description | Immediately upon a Dilutive Issuance, the Conversion Rate will be reduced to the amount of the consideration per share received by the Company in such Dilutive Issuance. Events of default include failure to issue conversion shares, the occurrence of a breach or default under any other agreement, any money judgment, writ or similar process entered or filed against the Company or any its property or other assets for more than $100,000, bankruptcy filing, application for the appointment of a custodian, trustee or receiver, insolvency, the Company's common stock delisted, or dissolution, winding up, or termination of the business of the Company. | ||
Issuance of warrants to purchase of common stock | 359,000 | ||
Issuance of warrant price per share | $ 1.50 | ||
Loss on extinguishment of debt | $ 86,000 | ||
Fair value of warrant amount | 3,000 | ||
Additional paid in capital | 8,744,000 | 8,750,000 | |
Beneficial conversion of warrants | 0 | ||
Amortization expenses | 187,000 | ||
Amortization of discount | 5,000 | ||
Interest expense on default convertible | 39,000 | $ 0 | |
Forecast [Member] | |||
Amortization expenses | $ 5,000 | ||
Fair Value of Notes and Face Value of Notes [Member] | |||
Additional paid in capital | 58,000 | ||
Warrant [Member] | |||
Loss on extinguishment of debt | $ 52,000 |
Convertible Promissory Notes -
Convertible Promissory Notes - Schedule of Convertible Promissory Notes (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Original issue discount | $ (6,000) | |
Convertible Promissory Notes [Member] | ||
Principal Amount | 708,000 | $ 506,000 |
Original issue discount | (3,000) | (19,000) |
Warrant discount | (2,000) | (79,000) |
Conversion feature discount | (85,000) | |
Net balance | $ 703,000 | $ 323,000 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Feb. 11, 2020 | Apr. 02, 2019 | Dec. 20, 2018 | Sep. 12, 2018 | Jan. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 19, 2018 | Aug. 28, 2018 | Aug. 27, 2018 | Dec. 31, 2017 |
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | 4,000,000 | 4,000,000 | 100,000,000 | |||||
Common stock conversion basis | To effectuate a stock combination or reverse stock split whereby every 25 outstanding shares of the Company's common stock were converted into one share of common stock. | |||||||||||
Authorized to issue shares | 200,000,000 | |||||||||||
Preferred stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | |||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Reserve stock split | In accordance with the Control Purchase Agreement, the Company was required to effectuate a reverse stock split of the Company's common stock (the "Reverse Stock Split"). The Company's board of directors approved the Reverse Stock Split of the Company's authorized, issued and outstanding shares of common stock at a ratio of one for twenty-five. | |||||||||||
Actual common stock issued and outstanding | 15,719,645 | |||||||||||
Decreased common stock, shares issued | 16,634,951 | 16,634,951 | 630,207 | |||||||||
Decreased common stock, shares outstanding | 16,634,951 | 16,634,951 | 630,207 | |||||||||
Founder's preferred stock converted into common stock | 15,754,744 | |||||||||||
Proceeds from common stock | $ 10,000,000 | |||||||||||
Description of sale of stock on transaction | The Series A is mandatorily convertible upon (i) the closing of the sale of shares of the Company's common stock to the public in an underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $10,000,000 of gross proceeds to the Company, (ii) the close of business on the sixtieth consecutive day on which the closing price of the Company's common stock on the OTC Markets is at least $2.80 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, stock combination or other similar recapitalization with respect to the common stock, or (iii) the affirmative vote of the holders of at least 66⅔% of the outstanding shares of Series A, given at a meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders all outstanding shares of Series A shall automatically be converted into shares of the Company's common stock, at the then effective conversion rate. | |||||||||||
Number of stock options issued during period | 385,000 | 385,000 | ||||||||||
Proceeds from stock option exercised | $ 5,000,000 | |||||||||||
Compensation expense | $ 577,000 | |||||||||||
Options, fair value assumptions, expected volatility rate | 324.00% | |||||||||||
Fair value of common stock | $ 1.50 | |||||||||||
Options, Fair value assumptions, expected term | 3 years | |||||||||||
Options, Fair value assumptions, risk free interest rate | 2.29% | |||||||||||
Options, Fair value assumptions, expected dividend | $ 0 | |||||||||||
2019 Stock Options Plan [Member] | Consulting Agreement One [Member] | ||||||||||||
Number of stock options issued during period | 685,000 | |||||||||||
Options vesting term | 3 years | |||||||||||
Options, exercise price | $ 0.001 | |||||||||||
2019 Stock Options Plan [Member] | Consulting Agreement One [Member] | Signing of the Consulting Agreement [Member] | ||||||||||||
Number of stock options issued during period | 385,000 | |||||||||||
2019 Stock Options Plan [Member] | Consulting Agreement One [Member] | Consultant Serves as the Vice president of Capital Markets [Member] | ||||||||||||
Number of stock options issued during period | 300,000 | |||||||||||
2019 Stock Options Plan [Member] | Consulting Agreement Two [Member] | ||||||||||||
Number of stock options issued during period | 250,000 | |||||||||||
Options vesting term | 3 years | |||||||||||
Options, exercise price | $ 0.001 | |||||||||||
2019 Stock Options Plan [Member] | Consulting Agreement Two [Member] | Consultant Serves as the Vice president of Capital Markets [Member] | ||||||||||||
Number of stock options issued during period | 100,000 | |||||||||||
2019 Stock Options Plan [Member] | Consulting Agreement Two [Member] | Completion of First Retail Showcase Store [Member] | ||||||||||||
Number of stock options issued during period | 50,000 | |||||||||||
2019 Stock Options Plan [Member] | Consulting Agreement Two [Member] | 1/12th Per Month Thereafter [Member] | ||||||||||||
Number of stock options issued during period | 100,000 | |||||||||||
2019 Stock Options Plan [Member] | Consulting Agreement Three [Member] | ||||||||||||
Number of stock options issued during period | 15,000 | |||||||||||
Options vesting term | 3 years | |||||||||||
Options, exercise price | $ 0.001 | |||||||||||
2019 Stock Options Plan [Member] | Consulting Agreement Three [Member] | Completion of First Retail Showcase Store [Member] | ||||||||||||
Number of stock options issued during period | 15,000 | |||||||||||
Series A Preferred Stock [Member] | ||||||||||||
Preferred stock, shares authorized | 15,754,744 | |||||||||||
Number of shares issued and sold, shares | 15,754,744 | 50,000 | 50,000 | 35,975 | ||||||||
Number of shares issued, value | $ 16,000 | $ 69,000 | $ 69,000 | $ 50,000 | ||||||||
Sale of stock shares price per share | $ 1.38 | $ 1.38 | $ 1.38 | |||||||||
Conversion rate adjustment, value | $ 36,000 | |||||||||||
Conversion of shares | 85,975 | |||||||||||
Conversion of debt | $ 147,000 | |||||||||||
Common Stock [Member] | ||||||||||||
Number of shares issued and sold, shares | 16,634,951 | 16,634,951 | ||||||||||
Shares issued price per share | $ 0.001 | $ 0.001 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Stock Options Activities (Details) - USD ($) | Apr. 02, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Equity [Abstract] | |||
Number of Number of Stock Option Shares, Outstanding, Beginning Balance | 569,800 | 184,800 | |
Number of Stock Option Shares, Granted | 385,000 | 385,000 | |
Number of Stock Option Shares, Canceled | |||
Number of Stock Option Shares, Exercised | |||
Number of Stock Option Shares, Expired | (184,800) | ||
Number of Stock Option Shares, Outstanding, Ending Balance | 385,000 | 569,800 | |
Number of Stock Option Earned and Exercisable, Ending Balance | 385,000 | ||
Number of Stock Option Unvested, Ending Balance | |||
Exercise Price Range Per Share, Outstanding, Beginning | $ 12.50 | ||
Exercise Price Range Per Share, Granted | 0.001 | ||
Exercise Price Range Per Share, Canceled | |||
Exercise Price Range Per Share, Exercised | |||
Exercise Price Range Per Share, Expired | 12.50 | ||
Exercise Price Range Per Share, Outstanding, Ending | |||
Exercise Price Range Per Share, Earned and Exercisable | |||
Exercise Price Range Per Share, Unvested | |||
Weighted Average Exercise Price, Outstanding, Beginning | 4.05 | 12.50 | |
Weighted Average Exercise Price, Granted | 0.001 | ||
Weighted Average Exercise Price, Canceled | |||
Weighted Average Exercise Price, Exercised | |||
Weighted Average Exercise Price, Expired | 12.50 | ||
Weighted Average Exercise Price, Outstanding, Ending | 0.001 | 4.05 | |
Weighted Average Exercise Price, Earned and Exercisable | 0.001 | ||
Weighted Average Exercise Price, Unvested | |||
Relative Fair Value, Outstanding, Beginning | |||
Relative Fair Value, Granted | 1.49 | ||
Relative Fair Value, Canceled | |||
Relative Fair Value, Exercised | |||
Relative Fair Value, Expired | |||
Relative Fair Value, Outstanding, Ending | |||
Relative Fair Value, Earned and Exercisable | |||
Relative Fair Value, Unvested | |||
Aggregate Intrinsic Value, Beginning Balance | $ 423,000 | ||
Aggregate Intrinsic Value, Granted | $ 578,000 | ||
Aggregate Intrinsic Value, Ending Balance | $ 7,315 | $ 423,000 | |
Aggregate Intrinsic Value, Earned and Exercisable | 7,315 | ||
Aggregate Intrinsic Value, Unvested |
Stockholders' Deficit - Summary
Stockholders' Deficit - Summary of Outstanding and Exercisable Stock Options (Details) - Exercise Price Range One [Member] | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Range of Exercise Prices | $ 0.001 |
Stock Options Outstanding, Shares | shares | 385,000 |
Stock Options Outstanding, Average Remaining Contractual Life (in Years) | 1 year 2 months 30 days |
Stock Options Outstanding, Weighted Average Exercise Price | $ 0.001 |
Stock Options Exercisable, Shares | shares | 385,000 |
Stock Options Exercisable, Average Remaining Contractual Life (in Years) | 1 year 2 months 30 days |
Stock Options Exercisable, Weighted Average Exercise Price | $ 0.001 |
Stockholders' Deficit - Sched_2
Stockholders' Deficit - Schedule of Warrants Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Number of warrants issued, Outstanding, Beginning of period | 253,000 | |
Number of warrants issued, Granted | 100,804 | 253,000 |
Number of warrants issued, Cancelled | ||
Number of warrants issued, Exercised | ||
Number of warrants issued, Outstanding, End of period | 353,804 | 253,000 |
Exercise Price balance, Outstanding, Beginning of period | $ 1.50 | |
Exercise Price, Granted | 1.50 | 1.50 |
Exercise Price, Cancelled | ||
Exercise Price, Exercised | ||
Exercise Price, Outstanding, End of period | 1.50 | 1.50 |
Weighted Average Exercise Price balance, Outstanding, Beginning of period | 1.50 | |
Weighted Average Exercise Price, Granted | 1.50 | 1.50 |
Weighted Average Exercise Price, Cancelled | ||
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Outstanding, End of period | $ 1.50 | $ 1.50 |
Deferred Tax Assets and Incom_3
Deferred Tax Assets and Income Tax Provision (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss deferred tax | $ 1,425,000 | |
Net operating loss expiration description | Future taxable income through 2038. | |
Deferred tax assets, net | $ 1,425,000 | |
Equity ownership interest | 50.00% | |
Increase in deferred tax assets valuation allowances | $ 93,000 | $ 161,000 |
Deferred Tax Assets and Incom_4
Deferred Tax Assets and Income Tax Provision - Schedule of Components of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Expected income tax benefit from NOL carry-forwards | $ 299,000 | $ 206,000 |
Less valuation allowance | (299,000) | (206,000) |
Deferred tax assets, net of valuation allowance |
Deferred Tax Assets and Incom_5
Deferred Tax Assets and Income Tax Provision - Schedule of Reconciliation of Income Tax (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory income tax rate | 21.00% | 21.00% |
Change in valuation allowance on net operating loss carry-forwards | (21.00%) | (21.00%) |
Effective income tax rate | 0.00% | 0.00% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jan. 05, 2021 | Apr. 30, 2021 | Mar. 31, 2021 | Feb. 28, 2021 | Jan. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt instrument, interest rate | 10.00% | ||||||
Convertible promissory note issued during period | $ 213,000 | ||||||
Proceeds from issuance of convertible debt | 49,000 | $ 460,000 | |||||
Original issue discount | $ 6,000 | ||||||
Debt instruments conversion price per share | $ 1 | ||||||
Events of default description | Immediately upon a Dilutive Issuance, the Conversion Rate will be reduced to the amount of the consideration per share received by the Company in such Dilutive Issuance. Events of default include failure to issue conversion shares, the occurrence of a breach or default under any other agreement, any money judgment, writ or similar process entered or filed against the Company or any its property or other assets for more than $100,000, bankruptcy filing, application for the appointment of a custodian, trustee or receiver, insolvency, the Company's common stock delisted, or dissolution, winding up, or termination of the business of the Company. | ||||||
Issuance of warrants to purchase of common stock | 359,000 | ||||||
Issuance of warrant price per share | $ 1.50 | ||||||
Stock option exercised | |||||||
Option exercise price | |||||||
Common Stock [Member] | |||||||
Stock issued during the period, shares | 16,634,951 | 16,634,951 | |||||
Shares issued price per share | $ 0.001 | $ 0.001 | |||||
Promissory Note [Member] | |||||||
Debt instrument, interest rate | 10.00% | ||||||
Original issue discount | $ 1,000 | ||||||
Convertible Promissory Notes [Member] | |||||||
Debt instrument, face amount | 708,000 | $ 506,000 | |||||
Original issue discount | 3,000 | $ 19,000 | |||||
Chief Financial Officer [Member] | |||||||
Due to related party | $ 127,000 | ||||||
Subsequent Event [Member] | Option [Member] | |||||||
Option exercise price | $ 0.001 | ||||||
Subsequent Event [Member] | Promissory Note [Member] | |||||||
Debt instrument, face amount | $ 50,000 | $ 25,000 | $ 15,000 | ||||
Debt instrument, interest rate | 10.00% | 10.00% | 8.00% | ||||
Debt instrument, maturity date | Apr. 22, 2022 | Feb. 19, 2022 | Mar. 31, 2022 | ||||
Debt instrument, description | The principal and accrued interest is payable in a single installment on or before the maturity date. In the event of default, the interest rate of the note shall increase to 15% per annum and computed on the basis of the actual number of days elapsed and a 365-day or 366-day year. | The principal and accrued interest is payable in a single installment on or before the maturity date. In the event of default, the interest rate of the note shall increase to 15% per annum and computed on the basis of the actual number of days elapsed and a 365-day or 366-day year. | Interest will be computed starting January 11, 2021 and payable at maturity date together with the principal amount. In the event of default, the interest rate of the note shall increase to 10% per annum and computed on the basis of the actual number of days elapsed and a 365-day year. | ||||
Subsequent Event [Member] | Convertible Promissory Notes [Member] | |||||||
Debt instrument, interest rate | 10.00% | ||||||
Convertible promissory note issued during period | $ 55,000 | ||||||
Proceeds from issuance of convertible debt | 50,000 | ||||||
Original issue discount | $ 5,000 | ||||||
Debt instrument maturity date, description | The Note is non-interest bearing with the principal due and payable starting in March 2022. | ||||||
Debt instruments conversion price per share | $ 1 | ||||||
Events of default description | Immediately upon a Dilutive Issuance, the Conversion Rate will be reduced to the amount of the consideration per share received by the Company in such Dilutive Issuance. Events of default include failure to issue conversion shares, the occurrence of a breach or default under any other agreement, any money judgment, writ or similar process entered or filed against the Company or any of its property or other assets for more than $100,000, bankruptcy filing, application for the appointment of a custodian, trustee or receiver, insolvency, the Company's common stock delisted, or dissolution, winding up, or termination of the business of the Company. | ||||||
Subsequent Event [Member] | Convertible Promissory Notes [Member] | Warrant [Member] | |||||||
Issuance of warrants to purchase of common stock | 27,500 | ||||||
Issuance of warrant price per share | $ 1.50 | ||||||
Subsequent Event [Member] | Promissory Notes [Member] | |||||||
Debt instrument, face amount | $ 8,550 | ||||||
Debt instrument, interest rate | 0.00% | ||||||
Debt instrument, maturity date | Jul. 5, 2021 | ||||||
Debt instrument, description | Company issued a promissory note for cash amounting to $8,550 with 0% annual interest per year if paid at a maturity date of July 5, 2021. In the event of default, the interest rate of the note shall increase to 8% per annum and computed on the basis of the actual number of days elapsed and a 365-day or 366-day year. | ||||||
Subsequent Event [Member] | New Consulting Agreement [Member] | |||||||
Stock issued during the period, shares | 750,000 | ||||||
Shares issued price per share | $ 0.001 | ||||||
Subsequent Event [Member] | Piers Cooper [Member] | Termination Agreement [Member] | |||||||
Stock issued during the period, cancelled | 3,674,330 | ||||||
Subsequent Event [Member] | Chief Executive Officer [Member] | |||||||
Payment of related party debt | $ 68,000 | ||||||
Subsequent Event [Member] | Chief Financial Officer [Member] | |||||||
Related party debt forgiveness amount | 97,000 | ||||||
Due to related party | 30,000 | ||||||
Payment of related party debt | $ 30,000 | ||||||
Subsequent Event [Member] | Chief Financial Officer [Member] | Common Stock [Member] | |||||||
Stock issued during the period, shares | 75,000 | ||||||
Subsequent Event [Member] | Holder One [Member] | Option [Member] | |||||||
Stock option exercised | 385,000 | ||||||
Subsequent Event [Member] | Holder Two [Member] | Option [Member] | |||||||
Stock option exercised | 750,000 |