Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 09, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-54286 | |
Entity Registrant Name | SURNA INC. | |
Entity Central Index Key | 0001482541 | |
Entity Tax Identification Number | 27-3911608 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 1780 55th Street | |
Entity Address, City or Town | Boulder | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80301 | |
City Area Code | (303) | |
Local Phone Number | 993-5271 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 237,526,638 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 2,283,879 | $ 2,284,881 |
Accounts receivable (net of allowance for doubtful accounts of $186,073 and $165,098, respectively) | 32,245 | 33,480 |
Inventory, net | 480,354 | 327,109 |
Prepaid expenses and other | 1,157,119 | 1,037,823 |
Total Current Assets | 3,953,597 | 3,683,293 |
Noncurrent Assets | ||
Property and equipment, net | 98,967 | 147,732 |
Goodwill | 631,064 | 631,064 |
Intangible assets, net | 6,792 | 7,227 |
Deposits | 24,183 | |
Operating lease right-of-use asset | 194,353 | 343,950 |
Total Noncurrent Assets | 955,359 | 1,129,973 |
TOTAL ASSETS | 4,908,956 | 4,813,266 |
CURRENT LIABILITIES | ||
Accounts payable and accrued liabilities | 1,674,088 | 1,784,961 |
Deferred revenue | 3,059,525 | 3,724,189 |
Accrued equity compensation | 108,945 | 128,434 |
Other liabilities | 37,078 | |
Current portion of operating lease liability | 238,140 | 266,105 |
Total Current Liabilities | 5,117,776 | 5,903,689 |
NONCURRENT LIABILITIES | ||
Note payable and accrued interest | 517,468 | |
Other liabilities | 37,078 | 74,156 |
Operating lease liability, net of current portion | 169,119 | |
Total Noncurrent Liabilities | 554,546 | 243,275 |
TOTAL LIABILITIES | 5,672,322 | 6,146,964 |
Commitments and Contingencies (Note 7) | ||
TEMPORARY EQUITY | ||
Series B Redeemable Convertible Preferred Stock, $0.00001 par value; 3,300 and 0 issued and outstanding, respectively | 3,960,000 | |
Series B Redeemable Convertible Preferred Stock Subscription Receivable | (1,365,000) | |
Series B Redeemable Convertible Preferred Stock Accrued Dividends | 1,447 | |
Total Temporary Equity | 2,596,447 | |
SHAREHOLDERS’ DEFICIT | ||
Preferred stock; 150,000,000 shares authorized | ||
Series A Preferred stock, $0.00001 par value; 42,030,331 shares issued and outstanding | 420 | 420 |
Common stock, $0.00001 par value; 350,000,000 shares authorized; 237,526,638 and 236,526,638 shares issued and outstanding, respectively | 2,376 | 2,366 |
Additional paid in capital | 25,017,065 | 26,107,159 |
Accumulated deficit | (28,379,674) | (27,443,643) |
Total Shareholders’ Deficit | (3,359,813) | (1,333,698) |
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT | $ 4,908,956 | $ 4,813,266 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Allowance for doubtful accounts, net | $ 186,073 | $ 165,098 |
Temporary Equity, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 |
Temporary Equity, Shares Issued | 3,300 | 0 |
Temporary Equity, Shares Outstanding | 3,300 | 0 |
Preferred stock, shares authorized | 150,000,000 | 150,000,000 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 350,000,000 | 350,000,000 |
Common stock, shares issued | 237,526,638 | 236,526,638 |
Common stock, shares outstanding | 237,526,638 | 236,526,638 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares issued | 42,030,331 | 42,030,331 |
Preferred stock, shares outstanding | 42,030,331 | 42,030,331 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenue, net | $ 3,706,436 | $ 1,634,669 | $ 10,582,470 | $ 5,127,018 |
Cost of revenue | 2,959,264 | 1,108,758 | 8,208,368 | 3,869,758 |
Gross profit | 747,172 | 525,911 | 2,374,102 | 1,257,260 |
Operating expenses: | ||||
Advertising and marketing expenses | 224,393 | 89,695 | 569,580 | 333,669 |
Product development costs | 98,623 | 84,433 | 322,807 | 304,229 |
Selling, general and administrative expenses | 866,699 | 634,447 | 2,493,930 | 2,453,976 |
Total operating expenses | 1,189,715 | 808,575 | 3,386,317 | 3,091,874 |
Operating loss | (442,543) | (282,664) | (1,012,215) | (1,834,614) |
Other income (expense): | ||||
Other income (expense), net | 35,934 | 13,621 | 79,452 | 29,018 |
Interest expense | (1,296) | (1,396) | (3,268) | (16,673) |
Total other income (expense) | 34,638 | 12,225 | 76,184 | 12,345 |
Loss before provision for income taxes | (407,905) | (270,439) | (936,031) | (1,822,269) |
Income taxes | ||||
Net loss | (407,905) | (270,439) | (936,031) | (1,822,269) |
Convertible Preferred Series B Stock Redemption Value Adjustment | (2,262,847) | (2,262,847) | ||
Convertible Preferred Series B Stock Dividends | (1,447) | (1,447) | ||
Net Loss Available to Common Shareholders | $ (2,672,199) | $ (270,439) | $ (3,200,325) | $ (1,822,269) |
Loss per common share – basic and dilutive | $ (0.01) | $ 0 | $ (0.01) | $ (0.01) |
Weighted average number of common shares outstanding, basic and dilutive | 237,526,638 | 236,526,638 | 237,171,327 | 234,711,893 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Shareholders' Deficit (Unaudited) - USD ($) | Preferred Stock [Member]Series A Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 420 | $ 2,283 | $ 25,326,593 | $ (25,684,927) | $ (355,631) |
Beginning balance, shares at Dec. 31, 2019 | 42,030,331 | 228,216,638 | |||
Balance, shares to be issued at Dec. 31, 2019 | 1,560,000 | ||||
Common shares issued in settlement of restricted stock units and award of stock bonuses | $ 83 | (83) | |||
Common shares issued in settlement of restricted stock units and award of stock bonuses, shares | 8,310,000 | ||||
Fair value of vested restricted stock units awarded to employees | 25,163 | 25,163 | |||
Common shares issued or to be issued on settlement of restricted stock units and award of stock bonuses, shares to be issued | (1,560,000) | ||||
Fair value of vested stock options accrued in 2019 and issued to employees and directors in 2020 | 503,466 | 503,466 | |||
Balance, shares to be issued at Sep. 30, 2020 | |||||
Fair value of vested stock options granted to employees and directors | 227,594 | 227,594 | |||
Net loss | (1,822,269) | (1,822,269) | |||
Ending balance, value at Sep. 30, 2020 | $ 420 | $ 2,366 | 26,082,733 | (27,507,196) | (1,421,677) |
Ending balance, shares at Sep. 30, 2020 | 42,030,331 | 236,526,638 | |||
Beginning balance, value at Jun. 30, 2020 | $ 420 | $ 2,366 | 26,058,307 | (27,236,757) | (1,175,664) |
Beginning balance, shares at Jun. 30, 2020 | 42,030,331 | 236,526,638 | |||
Balance, shares to be issued at Jun. 30, 2020 | |||||
Common shares issued or to be issued on settlement of restricted stock units and award of stock bonuses | |||||
Common shares issued or to be issued on settlement of restricted stock units and award of stock bonuses, shares to be issued | |||||
Balance, shares to be issued at Sep. 30, 2020 | |||||
Fair value of vested stock options granted to employees and directors | 24,426 | 24,426 | |||
Net loss | (270,439) | (270,439) | |||
Ending balance, value at Sep. 30, 2020 | $ 420 | $ 2,366 | 26,082,733 | (27,507,196) | (1,421,677) |
Ending balance, shares at Sep. 30, 2020 | 42,030,331 | 236,526,638 | |||
Beginning balance, value at Dec. 31, 2020 | $ 420 | $ 2,366 | 26,107,159 | (27,443,643) | (1,333,698) |
Beginning balance, shares at Dec. 31, 2020 | 42,030,331 | 236,526,638 | |||
Common shares issued in settlement of legal dispute | $ 10 | 66,990 | 67,000 | ||
Common shares to be issued in settlement of legal dispute, shares | 1,000,000 | ||||
Fair value of vested stock options granted to employees | 158,315 | 158,315 | |||
Fair value of vested stock options granted to directors | 21,174 | 21,174 | |||
Issuance of series B preferred stock and warrants, net | 927,721 | 927,721 | |||
Accrued dividends | (1,447) | (1,447) | |||
Adjustment to redemption value | (2,262,847) | (2,262,847) | |||
Balance, shares to be issued at Sep. 30, 2021 | |||||
Net loss | (936,031) | (936,031) | |||
Ending balance, value at Sep. 30, 2021 | $ 420 | $ 2,376 | 25,017,065 | (28,379,674) | (3,359,813) |
Ending balance, shares at Sep. 30, 2021 | 42,030,331 | 237,526,638 | |||
Beginning balance, value at Jun. 30, 2021 | $ 420 | $ 2,376 | 26,324,331 | (27,971,769) | (1,644,642) |
Beginning balance, shares at Jun. 30, 2021 | 42,030,331 | 237,526,638 | |||
Balance, shares to be issued at Jun. 30, 2021 | |||||
Fair value of vested stock options granted to employees | 14,545 | 14,545 | |||
Fair value of vested stock options granted to directors | 14,762 | 14,762 | |||
Issuance of series B preferred stock and warrants, net | 927,721 | 927,721 | |||
Accrued dividends | (1,447) | (1,447) | |||
Adjustment to redemption value | (2,262,847) | (2,262,847) | |||
Balance, shares to be issued at Sep. 30, 2021 | |||||
Net loss | (407,905) | (407,905) | |||
Ending balance, value at Sep. 30, 2021 | $ 420 | $ 2,376 | $ 25,017,065 | $ (28,379,674) | $ (3,359,813) |
Ending balance, shares at Sep. 30, 2021 | 42,030,331 | 237,526,638 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (936,031) | $ (1,822,269) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and intangible asset amortization expense | 54,973 | 90,867 |
Share-based compensation | 51,055 | 252,757 |
Common stock issued for other expense | 67,000 | |
Provision for doubtful accounts | 20,975 | 13,150 |
Provision for excess and obsolete inventory | (13,764) | (5,117) |
Loss on disposal of assets | 8,042 | 4,124 |
Amortization of ROU asset | 149,597 | 141,871 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (19,740) | 27,950 |
Inventory | (139,481) | 714,709 |
Prepaid expenses and other | (119,296) | (488,007) |
Accounts payable and accrued liabilities | (110,872) | (397,181) |
Deferred revenue | (664,663) | 2,044,830 |
Accrued interest | 3,268 | |
Lease deposit | (24,183) | |
Operating lease liability, net | (197,085) | (79,521) |
Accrued equity compensation | 108,945 | 101,472 |
Net cash (used in)/provided by operating activities | (1,761,260) | 599,635 |
Cash Flows From Investing Activities | ||
Purchases of property and equipment | (15,316) | (3,500) |
Proceeds from the sale of property equipment | 1,500 | |
Net cash used in investing activities | (13,816) | (3,500) |
Cash Flows From Financing Activities | ||
Cash proceeds from sale of preferred stock and warrants, net of issuance costs | 1,259,874 | |
Proceeds from issuance of note payable | 514,200 | 554,000 |
Net cash provided by financing activities | 1,774,074 | 554,000 |
Net change in cash and cash equivalents | (1,002) | 1,150,135 |
Cash and cash equivalents, beginning of period | 2,284,881 | 922,177 |
Cash and cash equivalents, end of period | 2,283,879 | 2,072,312 |
Supplemental cash flow information: | ||
Interest paid | ||
Income taxes paid | ||
Non-cash investing and financing activities: | ||
Adjustment of carrying value of series B preferred stock to redemption value | 2,262,847 | |
Subscription receivable - series B preferred stock | 1,365,000 | |
Options issued for accrued equity compensation | 128,434 | |
Accrued dividends | $ 1,447 |
General
General | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
General | Note 1 – General Description of Business Surna Inc. (the “Company”) was incorporated in Nevada on October 15, 2009 and operates under the trade name of Surna Cultivation Technologies. We are headquartered in Boulder, Colorado. Surna Inc. is an engineering and design company focused on selling environmental control and other technologies and services to the Controlled Environment Agriculture (CEA) industry. We leverage our experience in this space to bring value-added technology solutions to our customers that help improve their overall crop quality and yield, optimize energy and water efficiency, and satisfy evolving state and local construction codes, permitting and regulatory requirements. In service of the CEA industry, our principal service and product offerings include: (i) architectural design and licensed engineering of commercial scale thermodynamic systems specific to cultivation facilities, (ii) liquid-based process cooling systems and other climate control systems, (iii) air handling equipment and systems, (iv) LED lighting, benching and racking solutions for indoor cultivation, (v) automation and control devices, systems and technologies used for environmental, lighting and climate control, and (vi) preventive maintenance services for CEA facilities. Our customers include commercial, state- and provincial-regulated CEA growers in the U.S. and Canada and other international locations. Customers are those growers building new facilities and those expanding or retrofitting existing facilities. Currently, our revenue stream is derived primarily from supplying our products, services and technologies to commercial indoor facilities operating in the cannabis industry, ranging from several thousand to more than 100,000 square feet. Although most of our customers do, we neither produce nor sell cannabis or its related products. Impact of the COVID-19 Pandemic on Our Business The COVID-19 pandemic has prompted national, regional, and local governments, including those in the markets that the Company operates in, to implement preventative or protective measures to control its spread. As a result, there have been disruptions in business operations around the world, with an impact on our business. In our response to the COVID-19 pandemic and the government and business response, the Company took and continues to take measures to adjust its operations as necessary. In early 2020 the Company took measures to reduce expenses in light of reduced orders and to preserve cash, many of which were reversed by the end of the year when orders picked up and the overall business climate improved. Because the pandemic continues in different parts of the world and in different ways in the United States, the Company continues to actively monitor its operations and sales efforts and will make adjustments to its operations as necessary. We are experiencing unexpected and uncontrollable delays with our international supply of products and shipments from vendors due to a significant increase in shipments to U.S. ports, less cargo being shipped by air, a general shortage of containers, and domestic truck driver availability. While these delays have moderately improved in recent months, we, along with many other importers of goods across all industries, continue to experience severe congestion and extensive wait times for carriers at ports across the United States. In addition, restrictions imposed by local, state and federal agencies due to the COVID-19 pandemic have led to reduced personnel of importers, government staff and others in our supply chain. We have been working diligently with our network of freight partners and suppliers to expedite delivery dates and provide solutions to reduce further impact and delays. However, we are unable to determine the full impact of these delays and how long they will continue as they are out of our control. While the Company is continuing to navigate the financial, operational, and personnel challenges presented by the COVID-19 pandemic, the full extent of the impact on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic, the potential uncertainty related to and proliferation of new strains, and related actions taken by the U.S. government, state and local government officials, and international governments to prevent disease spread, all of which are uncertain, out of our control and cannot be predicted at this time. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) Financial Statement Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021. The balance sheet as of December 31, 2020 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto contained in the Annual Report on Form 10-K for the year ended December 31, 2020. The notes to the unaudited condensed consolidated financial statements are presented on a going concern basis. Basis of Consolidation and Reclassifications The condensed consolidated financial statements include the accounts of the Company and its controlled and wholly owned subsidiary, Hydro Innovations, LLC (“Hydro”). Intercompany transactions, profit, and balances are eliminated in consolidation. Going Concern The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has experienced recurring losses since its inception. Since inception, the Company has financed its activities principally through debt and equity financing, customer deposits and revenues from completed contracts. Management expects to incur additional losses and cash outflows in the foreseeable future in connection with its operating activities. Management believes that the economic dislocations in the overall economy, in the near term, will impact our revenues, losses and cash flows. There can be no assurance that the Company will be able to raise debt or equity financing in sufficient amounts, when and if needed, on acceptable terms or at all. If results of operations for 2021 do not meet management’s expectations, or additional capital is not available, management believes it has the ability to reduce certain expenditures. 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 the overall economy, market demand for the Company’s products and services, the quality of product development efforts, management of working capital, and continuation of normal payment terms and conditions for purchase of the Company’s products. The Company believes its cash balances and cash flow from operations will be insufficient to fund its operations for the next 12 months. If the Company is unable to substantially increase revenues, reduce expenditures, or otherwise generate cash flows from operations, then the Company will need to raise additional funding to continue as a going concern. The foregoing factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date the financial statements are issued. These condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. Use of Estimates Management makes estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and that affect the reported amounts of revenue and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Key estimates include: allocation of transaction prices to performance obligations under contracts with customers, standalone selling prices, timing of expected revenue recognition on remaining performance obligations under contracts with customers, valuation of intangible assets, valuation of equity-based compensation, valuation of deferred tax assets and liabilities, warranty accruals, accounts receivable and inventory allowances, and legal contingencies. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) Cash, Cash Equivalents and Restricted Cash All highly liquid investments with original maturities of three months or less at the date of purchase are considered to be cash equivalents. The Company may, from time to time, have deposits in financial institutions that exceed the federally insured amount. The Company has not experienced any losses to date on depository accounts. Income (Loss) Per Common Share Basic income (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration of common stock equivalents. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding and potentially dilutive common stock equivalents, including stock options, warrants and restricted stock units and other equity-based awards, except in cases where the effect of the common stock equivalents would be antidilutive. Potential common stock equivalents consist of common stock issuable upon exercise of stock options and warrants and the vesting of restricted stock units using the treasury method. During the nine months ended September 30, 2021 and 2020, there were warrants and options outstanding to purchase Company common stock and shares of convertible preferred stock and restricted stock units that were convertible into shares of the Company’s common stock. During the three- and nine-month periods ended September 30, 2021 and 2020, the Company incurred a net loss and consequently the common share equivalents of these potentially dilutive equity instruments have not been included in the calculations of loss per share because such inclusion would have been anti-dilutive. As of September 30, 2021, and 2020, there were respectively, 116,683,201 44,007,500 Goodwill The Company recorded goodwill in connection with its acquisition of Hydro Innovations, LLC in July 2014. Goodwill is reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value of the reporting unit has been reduced to less than its carrying value. The Company performs a quantitative impairment test annually on December 31 by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is considered not impaired. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company determined that it has one reporting unit. During the nine months ended September 30, 2021, the Company concluded that the projected impact of the COVID-19 pandemic on its sales, contract completion and revenues in the near term, together with the volatility in its share price during the quarter represented potential indicators of impairment. Accordingly, the Company performed an interim impairment analysis at September 30, 2021 and concluded that no impairment relating to goodwill existed at September 30, 2021. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) Temporary Equity Shares of preferred stock that are redeemable for cash or other assets are classified as temporary equity if they are redeemable, at the option of the holder, at a fixed or determinable price on a fixed or determinable date or upon the occurrence of an event that is not solely within the control of the issuer. Redeemable equity instruments are initially carried at the fair value of the equity instrument at the issuance date, net of issuance costs, which is subsequently adjusted to redemption value (including the amount for dividends earned but not yet declared or paid) at each balance sheet date if the instrument is currently redeemable or if it is probable that the instrument will become redeemable. The Company determined it is probable the Series B Preferred Stock will become redeemable at the option of the holder. As a result, on September 30, 2021, the Company adjusted carrying value of the Series B Preferred Stock to its redemption value of $ 3,960,000 2,262,847 Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 (Topic 606), Revenue from Contracts with Customers Under the revenue standard, a performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. Most of the Company’s contracts contain multiple performance obligations that include engineering and technical services as well as the delivery of a diverse range of climate control system equipment and components, which can span multiple phases of a customer’s project life cycle from facility design and construction to equipment delivery and system installation and start-up. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When there are multiple performance obligations within a contract, the Company allocates the transaction price to each performance obligation based on standalone selling price. When estimating the selling price, the Company uses various observable inputs. The best observable input is the Company’s actual selling price for the same good or service, however, this input is generally not available for the Company’s contracts containing multiple performance obligations. For engineering services, the Company estimates the standalone selling price by reference to certain physical characteristics of the project, such as facility size and mechanical systems involved, which are indicative of the scope and complexity of the mechanical engineering services to be provided. For equipment sales, the standalone selling price is determined by forecasting the expected costs of the equipment and then adding an appropriate margin, based on a range of acceptable margins established by management. Depending on the nature of the performance obligations, the Company may use a combination of different methods and observable inputs if certain performance obligations have highly variable or uncertain standalone selling prices. Once the selling prices are determined, the Company applies the relative values to the total contract consideration and estimates the amount of the transaction price to be recognized as each performance obligation is fulfilled. The Company recognizes revenue for the sale of goods when control transfers to the customer, which primarily occurs at the time of shipment. The Company’s historical rates of return are insignificant as a percentage of sales and, as a result, the Company does not record a reserve for returns at the time the Company recognizes revenue. The Company has elected to exclude from the measurement of the transaction price all taxes (e.g., sales, use, value added, and certain excise taxes) that are assessed by a governmental authority in connection with a specific revenue-producing transaction and collected by the Company from the customer. Accordingly, the Company recognizes revenue net of sales taxes. The revenue and cost for freight and shipping is recorded when control over the sale of goods passes to the Company’s customers. The Company also has performance obligations to perform certain engineering services that are satisfied over a period of time. Revenue is recognized from this type of performance obligation as services are rendered based on the percentage completion towards certain specified milestones. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) The Company offers assurance-type warranties for its products and products manufactured by others to meet specifications defined by the contracts with customers and does not have any material separate performance obligations related to these warranties. The Company maintains a warranty reserve based on historical warranty costs. Applying the practical expedient in ASC 606-10-32-18, which the Company has elected, the Company does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Accordingly, the remaining performance obligations related to customer contracts does not consider the effects of the time value of money. Applying the practical expedient in ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred since the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs include certain sales commissions and incentives, which are included in selling, general and administrative expenses, and are payable only when associated revenue has been collected and earned by the Company. The Company does not have material amounts of contract assets since revenue is recognized as control of goods is transferred or as services are performed. Contract liabilities consist of advance payments and deferred revenue. For the three and nine months ended September 30, 2021, the Company recognized revenue of $ 283,452 3,357,068 9,141 1,074,016 Remaining performance obligations, or backlog, represents the aggregate amount of the transaction price allocated to the remaining obligations that the Company has not performed under its customer contracts. The Company has elected not to use the optional exemption in ASC 606-10-50-14, which exempts an entity from such disclosures if a performance obligation is part of a contract with an original expected duration of one year or less. Accordingly, the information disclosed about remaining performance obligations includes all customer contracts, including those with an expected duration of one year or less. Industry uncertainty, project financing concerns, and the licensing and qualification of our prospective customers, which are out of the Company’s control, make it difficult for the Company to predict when it will recognize revenue on its remaining performance obligations. There are risks that the Company may not realize the full contract value on customer projects in a timely manner or at all, and completion of a customer’s cultivation facility project is dependent upon the customer’s ability to secure funding and real estate, obtain a license and then build their cultivation facility so they can take possession of the equipment. Accordingly, the time it takes for customers to complete a project, which corresponds to when the Company is able to recognize revenue, is driven by numerous factors including: (i) the large number of first-time participants interested in the indoor cannabis cultivation business; (ii) the complexities and uncertainties involved in obtaining state and local licensure and permitting; (iii) local and state government delays in approving licenses and permits due to lack of staff or the large number of pending applications, especially in states where there is no cap on the number of cultivators; (iv) the customer’s need to obtain cultivation facility financing; (v) the time needed, and coordination required, for our customers to acquire real estate and properly design and build the facility (to the stage when climate control systems can be installed); (vi) the large price tag and technical complexities of the climate control and air sanitation system; (vii) the availability of power; and (viii) delays that are typical in completing any construction project. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) As of September 30, 2021, the Company’s remaining performance obligations, or backlog, was $ 9,881,000 1,161,000 12 1,250,000 The remaining performance obligations expected to be recognized through 2022 are as follows: Schedule of Remaining Performance Obligations Expected to be Recognized 2021 2022 Total Remaining performance obligations related to engineering only paid contracts $ 112,000 $ 1,049,000 $ 1,161,000 Remaining performance obligations related to partial equipment paid contracts 3,091,000 5,629,000 $ 8,720,000 Total remaining performance obligations $ 3,203,000 $ 6,678,000 $ 9,881,000 The following table sets forth the Company’s revenue by source: Schedule of Revenue by Source For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Equipment and systems sales $ 3,523,948 $ 1,481,961 $ 9,933,313 $ 4,575,855 Engineering and other services 110,538 114,160 464,269 402,837 Shipping and handling 71,950 38,548 184,888 148,326 Total revenue $ 3,706,436 $ 1,634,669 $ 10,582,470 $ 5,127,018 Accounting for Share-Based Compensation The Company recognizes the cost resulting from all share-based compensation arrangements, including stock options, restricted stock awards and restricted stock units that the Company grants under its equity incentive plan in its condensed consolidated financial statements based on their grant date fair value. The expense is recognized over the requisite service period or performance period of the award. Awards with a graded vesting period based on service are expensed on a straight-line basis for the entire award. Awards with performance-based vesting conditions, which require the achievement of a specific company financial performance goal at the end of the performance period and required service period, are recognized over the performance period. Each reporting period, the Company reassesses the probability of achieving the respective performance goal. If the goals are not expected to be met, no compensation cost is recognized and any previously recognized amount recorded is reversed. If the award contains market-based vesting conditions, the compensation cost is based on the grant date fair value and expected achievement of market condition and is not subsequently reversed if it is later determined that the condition is not likely to be met or is expected to be lower than initially expected. The grant date fair value of stock options is based on the Black-Scholes Option Pricing Model (the “Black-Scholes Model”). The Black-Scholes Model requires judgmental assumptions including volatility and expected term, both based on historical experience. The risk-free interest rate is based on U.S. Treasury interest rates whose term is consistent with the expected term of the option. The Company determines the assumptions used in the valuation of option awards as of the date of grant. Differences in the expected stock price volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at those grant dates. As such, the Company may use different assumptions for options granted throughout the year. During the nine months ended September 30, 2021, the valuation assumptions used to determine the fair value of each option award on the date of grant were: expected stock price volatility ranged from 150.2 % to 152.51 %; expected term in years 10 and risk-free interest rate ranged from 0.55% to 1.49 %. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) The grant date fair value of restricted stock and restricted stock units is based on the closing price of the underlying stock on the date of the grant. The Company has elected to reduce share-based compensation expense for forfeitures as the forfeitures occur since the Company does not have historical data or other factors to appropriately estimate the expected employee terminations and to evaluate whether particular groups of employees have significantly different forfeiture expectations. The following is a summary of share-based compensation expenses included in the condensed consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020: Schedule of Share-based Compensation Costs For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Share-based compensation expense included in: Cost of revenue $ - $ 6,833 $ 29,944 $ 23,949 Advertising and marketing expenses - 2,500 13,292 7,500 Product development costs - 5,444 14,029 16,332 Selling, general and administrative expenses 29,307 41,221 102,735 306,448 Total share-based compensation expense included in consolidated statement of operations $ 29,307 $ 55,998 $ 160,000 $ 354,229 Included in the expense for the three and nine months ended September 30, 2021, is an accrual for $ 0 108,945 31,575 101,472 Concentrations Three customers accounted for 38 23 11 25 12 12 39 30 18 17 11 Three customers accounted for 40 26 22 32 23 21 10 Recently Issued Accounting Pronouncements In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company early adopted ASU 2020-06 effective January 1, 2021. The early adoption of ASU 2020-06 impacted the Company’s accounting for the issuance of its Series B Redeemable Convertible Preferred Stock as further discussed in Note 8 Temporary Equity Series B Redeemable Convertible Preferred Stock In March 2020, the FAS issued ASU No. 2020-04 “ Reference Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). In January 2020, the FASB issued ASU No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes, Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases | |
Leases | Note 2 – Leases In February 2016 the FASB issued ASU 2016-02, Leases (Topic 842) The new standard provides a number of optional practical expedients in transition. The Company has elected to apply the “package of practical expedients” which allow the Company to not reassess: (i) whether existing or expired arrangements contain a lease, (ii) the lease classification of existing or expired leases, or (iii) whether previous initial direct costs would qualify for capitalization under the new lease standard. The Company has also elected to apply the short-term lease exemption for all leases with an original term of less than 12 months, for purposes of applying the recognition and measurements requirements in the new lease standard. Upon adoption, the Company recognized its lease for manufacturing and office space (the “Facility Lease”) on the balance sheet as an operating lease right-of-use asset in the amount of $ 714,416 822,374 The Facility Lease commenced September 29, 2017 and continues through August 31, 2022. five years Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) Beginning September 1, 2018, and each subsequent September 1 during the term, the monthly rent under the Facility Lease will increase by 3% Under the Facility Lease, the landlord agreed to pay the Company or the Company’s contractors for tenant improvements made by the Company not to exceed $ 100,000 81,481 Under the Facility Lease, the Company pays the actual amounts for property taxes and insurance, excludes such payments from lease contract consideration, and records such payments as incurred. The Company also pays the landlord for common area maintenance, which is considered a nonlease component. For the Facility Lease, the Company has not elected the accounting policy to include both the lease and nonlease components as a single component and account for it as the lease. In determining the right-of-use asset and lease liability, the Company applied a discount rate to the minimum lease payments under the Facility Lease. ASC 842 requires the Company to use the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Since the discount rate is not implicit in the lease agreement, we utilized an estimated incremental borrowing rate provided by the Company’s depository bank. The lease cost, cash flows and other information related to the Facility Lease were as follows: Schedule of Lease Cost For the Nine Months Ended September 30, 2021 Operating lease cost $ 162,667 Operating cash outflow from operating lease $ 210,154 As of September 30, 2021 Operating lease right-of-use assset $ 194,353 Operating lease liability, current $ 238,140 Operating lease liability, long-term $ - Remaining lease term .9 Discount rate 5.00 % Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) Future annual minimum lease payments on the Facility Lease as of September 30, 2021 were as follows: Schedule of Future Annual Minimum Lease Payments Years ended December 31, 2021 (excluding the nine months ended September 30, 2021) 71,710 2022 170,891 Total minimum lease payments 242,601 Less imputed interest (4,461 ) Present value of minimum lease payments $ 238,140 On April 30, 2021, the Company entered into an agreement to sublease approximately 6,900 5,989 11,978 On July 27, 2021, the Company entered into a Lease Termination Agreement with its current landlord for the 18,952 August 31, 2022 See Contractual Payment Obligations On July 28, 2021, the Company entered into an agreement to lease 11,491 January 31, 2027 |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 3 – Inventory Inventory consisted of the following: Schedule of Inventory September 30, December 31, 2021 2020 Finished goods $ 319,335 $ 201,778 Work in progress 2,595 4,231 Raw materials 237,704 214,145 Allowance for excess & obsolete inventory (79,281 ) (93,045 ) Inventory, net $ 480,354 $ 327,109 Overhead expenses of $ 17,674 17,974 Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) Advance payments on inventory purchases are recorded in prepaid expenses until title for such inventory passes to the Company. Prepaid expenses included approximately $ 879,000 916,000 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 4 – Property and Equipment Property and equipment consisted of the following: Schedule of Property and Equipment September 30, December 31, 2021 2020 Furniture and equipment $ 296,851 $ 398,422 Vehicles 15,000 15,000 Leasehold improvements 215,193 215,193 527,044 628,615 Accumulated depreciation (428,076 ) (480,883 ) Property and equipment, net $ 98,967 $ 147,732 Depreciation expense was $ 54,538 4,721 1,180 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | Note 5 – Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following: Schedule of Accounts Payable and Accrued Liabilities September 30, December 31, 2021 2020 Accounts payable $ 864,558 $ 918,639 Sales commissions payable 40,758 48,263 Accrued payroll liabilities 255,462 288,071 Product warranty accrual 172,868 173,365 Other accrued expenses 340,442 356,623 Total $ 1,674,088 $ 1,784,961 |
Note Payable and Accrued Intere
Note Payable and Accrued Interest | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Note Payable and Accrued Interest | Note 6 – Note Payable and Accrued Interest On February 10, 2021, the Company entered into a note payable with its current bank in the principal amount of $ 514,200 The loan amount bears interest at 1 February 5, 2026 During the three and nine months ended September 30, 2021, interest of $ 1,296 3,268 Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7 – Commitments and Contingencies Litigation As of December 31, 2019, there were 6,750,000 6,750,000 10,000 33,985 8 40,000 1,000,000 67,000 107,000 35,000 40,000 5,000 1,000,000 67,000 From time to time, in the normal course of its operations, the Company is subject to litigation matters and claims. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict, and the Company’s view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a liability for contingent losses when it is both probable that a liability has been incurred and the amount of the loss is known. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company’s operations or its financial position, liquidity or results of operations. Leases The Company has a lease agreement for its manufacturing and office space. Refer to Note 2 Leases Other Commitments In the ordinary course of business, the Company enters into commitments to purchase inventory and may also provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers and employees that will require the Company to, among other things, indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. The Company maintains director and officer insurance, which may cover certain liabilities arising from its obligation to indemnify its directors and certain of its officers and employees, and former officers, directors, and employees of acquired companies, in certain circumstances. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) |
Temporary Equity
Temporary Equity | 9 Months Ended |
Sep. 30, 2021 | |
Temporary Equity | |
Temporary Equity | Note 8 – Temporary Equity Series B Redeemable Convertible Preferred Stock On September 28, 2021, Surna Inc. (the “Company”) sold to an institutional investor (the “Investor”), 3,300 1,000 57,894,738 28,947,368 3,000,000 2,625,000 1,260,000 1,365,000 The Series B Preferred Stock has an annual dividend of 8 0.057 4.99 200 Pending completion of an amendment to the certificate of incorporation to increase the number of authorized shares of common stock and redeem the outstanding Series A Preferred Stock, as required by the Investor, $ 1,365,000 120 % of the stated value of $ 1,000 per share, 1,650 shares of the Series B Preferred Stock, and pay the dividend amount due thereon at 8 % to the date of redemption. The Series B Preferred Stock will be redeemed at the demand by the holders, at 120 % of the stated value of $ 1,000 , at any time after the earlier of (x) the consummation by the Company of a qualified offering, or (y) the first anniversary of the issuance of the Series B Preferred Shares. The Investor was granted a right of participation in future private offerings and has agreed to a 180-day lock-up in connection with a qualified offering. A “qualified offering” is the first public offering after the sale of the Series B Preferred Stock in which the common stock of the Company is listed on a national exchange. The Investor Warrant may be exercised until September 28, 2024 0.063 4.99 The Company granted the Investor registration rights for the shares of common stock underlying the Series B Preferred Stock and the Investor Warrants. The Company must file a registration statement no later than 180 days after the date of a qualified offering and have it effective in 45 days if there is no Securities and Exchange Commission (“SEC”) review, or if there is a review, within 75 days. The Company must keep the registration statement effective until all the shares registered have been sold or may be sold under Rule 144, without regard to volume and holding period restrictions. The Company engaged ThinkEquity LLC (“ThinkEquity”) as its placement agent and paid a total cash fee of 9 270,000 5,210,526 0.0693 Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) Probability of Redemption: As it was considered probable the Series B Preferred stock will become redeemable outside of the Company’s control, the Series B Preferred stock needs to be disclosed as temporary equity and restated at the balance sheet date at its redemption value of 120 % the stated value of $ 1,000 per share, or $ 3,960,000 . As a result, on September 30, 2021, the Company adjusted the carrying value of the Series B Preferred Stock to its redemption value of $ 3,960,000 and recorded a $ 2,262,847 non-cash redemption value adjustment. This redemption value adjustment is treated as similar to a dividend on the preferred stock for GAAP purposes; accordingly, the redemption value adjustment is therefore added to the “Net Loss” to arrive at “Net Loss Attributable to Common Shareholders’” on the Company’s Consolidated Statements of Operations. In addition, since the Company does not have a balance of retained earnings, the redemption value adjustment was recorded against additional paid-in capital. Series B Redeemable Convertible Stock Subscription Receivable Of the net proceeds of $ 2,624,874 1,365,000 850,000,000 the redemption of the outstanding shares of Series A Preferred Stock of the Company for common stock at the rate of 1 share of common stock for each 100 shares of preferred stock that is currently issued and outstanding, 1,365,000 Accordingly, as of September 30, 2021, these funds were disclosed as Series B Redeemable Convertible Stock Subscription Receivable on the Company’s consolidated balance sheet |
Stockholders_ Deficit
Stockholders’ Deficit | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Stockholders’ Deficit | Note 9 – Stockholders’ Deficit Preferred Stock As of September 30, 2021, and December 31, 2020, the Company has 150,000,000 0.00001 Series A Preferred Stock As of September 30, 2021, and December 31, 2020, the Company has 42,030,331 Series B Preferred Stock On September 28, 2021, the Company entered into a Securities Purchase Agreement (“Purchase Agreement”) with an institutional investor (the “Investor”), pursuant to which the Investor purchased from the Company 3,300 1,000 3,300,000 28,947,368 3,000,000 As a result of the PIPE Financing, referenced above and described in Note 8 3,300 shares issued and outstanding as of September 30, 2021. Common Stock As of September 30, 2021, and December 31, 2020, the Company was authorized to issue 350,000,000 0.00001 Effective December 31, 2020, 236,526,638 Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) During the nine months ended September 30, 2021, we issued 1,000,000 shares of common stock, valued at $ 67,000 as part of a legal settlements further described in Note 7 – Commitments and Contingencies – litigation above. Consequently, effective September 30, 2021, 237,526,638 |
Equity Incentive Plans
Equity Incentive Plans | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Equity Incentive Plans | Note 10 – Equity Incentive Plans 2017 Equity Incentive Plan Under the Company’s 2017 Equity Incentive Plan, as may be modified and amended by the Company from time to time (the “2017 Equity Plan”), the Board of Directors (the “Board”) (or the compensation committee of the Board, if one is established) may award stock options, stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock unit awards (“RSUs”), shares granted as a bonus or in lieu of another award, and other stock-based performance awards. The 2017 Equity Plan allocates 50,000,000 2021 Equity Incentive Plan On March 22, 2021, the Board approved the 2021 Equity Incentive Plan (the “2021 Equity Plan”), which was approved by the stockholders on July 22, 2021. The 2021 Equity Plan permits the Board to grant awards of up to 100,000,000 i.e. During the nine months ended September 30, 2021, the Company issued no shares of its common stock. During the nine months ended September 30, 2021, the Company granted awards for 3,266,570 3,035,800 230,770 As of September 30, 2021, of the 50,000,000 24,553,818 24,399,800 1,046,382 100,000,000 230,770 99,769,230 There was $ 90,255 3 Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) Non-Qualified Stock Options A summary of the non-qualified stock options granted to employees and consultants under the 2017 Equity Plan during the nine months ended September 30, 2021, are presented in the table below: Schedule of Stock Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding, December 31, 2020 14,251,000 $ 0.083 8.3 $ - Granted 3,035,800 $ 0.085 10.0 $ - Exercised - Forfeited (287,000 ) $ 0.122 6.6 $ - Expired - Outstanding, September 30, 2021 16,999,800 $ 0.083 7.9 $ - Exercisable, September 30, 2021 15,249,800 $ 0.085 7.7 $ - During the nine months ended September 30, 2021, we issued a total of 3,035,800 ● 1,035,800 10 0.13 ● 2,000,000 250,000 417,000 665,000 668,000 10 0.061 ● During the nine months ended September 30, 2021, 287,000 A summary of non-vested non-qualified stock options activity for employees and consultants under the 2017 Equity Plan for the nine months ended September 30, 2021, are presented in the table below: Summary of Non-vested Non-qualified Stock Option Activity Number of Options Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Grant-Date Fair Value Nonvested, December 31, 2020 - $ - $ - $ - Granted 3,035,800 $ 0.082 $ - $ - Vested (1,285,800 ) $ 0.112 $ 66,412 $ - Forfeited - $ - Expired - $ - Nonvested, September 30, 2021 1,750,000 $ 0.061 $ - $ 104,800 For the nine months ended September 30, 2021 and September 30, 2020, the Company recorded $ 29,881 171,624 Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) A summary of the non-qualified stock options granted to directors under the 2017 Equity Plan and the 2021 Equity Plan, during the nine months ended September 30, 2021, are presented in the table below: Schedule of Stock Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ($000) Outstanding, December 31, 2020 7,400,000 $ 0.067 7.5 $ - Granted 230,770 $ 0.065 10.0 $ - Exercised - Forfeited/Cancelled - Expired - Outstanding, September 30, 2021 7,630,770 $ 0.067 6.8 $ - Exerciseable, September 30, 2021 7,630,770 $ 0.067 6.8 $ - During the nine months ended September 30, 2021, we issued 230,770 A summary of non-vested non-qualified stock options activity for directors under the 2017 Equity Plan and the 2021 Equity Plan, for the nine months ended September 30, 2021, are presented in the table below: Summary of Non-vested Non-qualified Stock Option Activity Number of Options Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Grant-Date Fair Value Nonvested, December 31, 2020 1,000,000 $ 0.029 $ 31,000 $ - Granted 230,770 0.065 $ (1,154 ) $ - Vested (1,230,770 ) $ 0.036 $ (29,846 ) $ - Forfeited - Expired - Nonvested, September 30, 2021 - $ - $ - During the nine months ended September 30, 2021 and September 30, 2020, the Company incurred $ 21,174 55,970 1,230,770 1,521,352 Effective June 24, 2020 , 2 50% 5 Effective August 20, 2021, the Company issued 230,770 10 Restricted Stock Units There has been no activity related to RSUs during the nine months ended September 30, 2021. The Company recorded $ 25,163 Effective April 30, 2020, 800,000 Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2021 | |
Warrants | |
Warrants | Note 11 - Warrants The following table summarizes information with respect to outstanding warrants to purchase common stock during the nine months ended September 30, 2021: Schedule of Outstanding Warrants to Purchase Common Stock Weighted Weighted Average Average Remaining Aggregate Number Exercise Life Intrincic Outstanding Price In Months Value Outstanding at December 31, 2020 7,562,500 $ 0.25 6 $ 0 Issued 34,157,894 $ 0.06 36 - Exercised - - - - Expired (7,562,500 ) $ 0.25 - $ 0 Outstanding at September 30, 2021 34,157,894 $ 0.06 36 $ 0 The following table summarizes information about warrants outstanding at September 30, 2021: Schedule of Warrants Outstanding Weighted Average Life of Warrants Outstanding Warrants Exercise price Outstanding In Months 0.063 28,947,368 36 0.069 5,210,526 36 34,157,894 36 Effective June 30, 2021, 7,562,500 Effective September 28, 2021, we issued 28,947,368 0.063 3 5,210,526 0.0693 3 See Note 8 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12 – Income Taxes As of September 30, 2021, the Company has U.S. federal and state net operating losses (“NOLs”) of approximately $ 20,260,000 11,196,261 2034 through 2037 80% 80% 50% three-year period Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) The Company must assess the likelihood that its net deferred tax assets will be recovered from future taxable income, and to the extent the Company believes that recovery is not likely, the Company establishes a valuation allowance. Management’s judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against the net deferred tax assets. The Company recorded a full valuation allowance as of September 30, 2021 and December 31, 2020. Based on the available evidence, the Company believes it is more likely than not that it will not be able to utilize its net deferred tax assets in the foreseeable future. The Company intends to maintain valuation allowances until sufficient evidence exists to support the reversal of such valuation allowances. The Company makes estimates and judgments about its future taxable income that are based on assumptions that are consistent with the Company’s plans. Should the actual amounts differ from the Company’s estimates, the carrying value of the Company’s deferred tax assets could be materially impacted. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 13 – Related Party Transactions The company entered into a manufacturer representative agreement with RSX Enterprises in March 2021 to become a non-exclusive representative for the Company to assist in marketing and soliciting orders. James R. Shipley, a current director of the Company, has a significant ownership interest in RSX. Under the manufacturer representative agreement, RSX will act as a non-exclusive representative for the Company within the United States, Canada and Mexico and may receive a commission for qualified customer leads. The agreement has an initial term through December 31, 2021 with automatic one-year renewal terms unless prior notice is given 90 days prior to each annual expiration. During the three months ended September 30, 2021, the Company paid $ 26,873 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 – Subsequent Events In accordance with ASC 855, Subsequent Events On November 3, 2021, we increased our authorized capital to one billion shares of capital stock, of which 850,000,000 are designated as common stock and 150,000,000 are designated as preferred stock. On November 3, 2021, we were authorized to redeem the outstanding Series A Preferred Stock, which was completed on November 4, 2021. On November 4, 2021, we received the remaining $ 1,365,000 |
General (Policies)
General (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Surna Inc. (the “Company”) was incorporated in Nevada on October 15, 2009 and operates under the trade name of Surna Cultivation Technologies. We are headquartered in Boulder, Colorado. Surna Inc. is an engineering and design company focused on selling environmental control and other technologies and services to the Controlled Environment Agriculture (CEA) industry. We leverage our experience in this space to bring value-added technology solutions to our customers that help improve their overall crop quality and yield, optimize energy and water efficiency, and satisfy evolving state and local construction codes, permitting and regulatory requirements. In service of the CEA industry, our principal service and product offerings include: (i) architectural design and licensed engineering of commercial scale thermodynamic systems specific to cultivation facilities, (ii) liquid-based process cooling systems and other climate control systems, (iii) air handling equipment and systems, (iv) LED lighting, benching and racking solutions for indoor cultivation, (v) automation and control devices, systems and technologies used for environmental, lighting and climate control, and (vi) preventive maintenance services for CEA facilities. Our customers include commercial, state- and provincial-regulated CEA growers in the U.S. and Canada and other international locations. Customers are those growers building new facilities and those expanding or retrofitting existing facilities. Currently, our revenue stream is derived primarily from supplying our products, services and technologies to commercial indoor facilities operating in the cannabis industry, ranging from several thousand to more than 100,000 square feet. Although most of our customers do, we neither produce nor sell cannabis or its related products. |
Impact of the COVID-19 Pandemic on Our Business | Impact of the COVID-19 Pandemic on Our Business The COVID-19 pandemic has prompted national, regional, and local governments, including those in the markets that the Company operates in, to implement preventative or protective measures to control its spread. As a result, there have been disruptions in business operations around the world, with an impact on our business. In our response to the COVID-19 pandemic and the government and business response, the Company took and continues to take measures to adjust its operations as necessary. In early 2020 the Company took measures to reduce expenses in light of reduced orders and to preserve cash, many of which were reversed by the end of the year when orders picked up and the overall business climate improved. Because the pandemic continues in different parts of the world and in different ways in the United States, the Company continues to actively monitor its operations and sales efforts and will make adjustments to its operations as necessary. We are experiencing unexpected and uncontrollable delays with our international supply of products and shipments from vendors due to a significant increase in shipments to U.S. ports, less cargo being shipped by air, a general shortage of containers, and domestic truck driver availability. While these delays have moderately improved in recent months, we, along with many other importers of goods across all industries, continue to experience severe congestion and extensive wait times for carriers at ports across the United States. In addition, restrictions imposed by local, state and federal agencies due to the COVID-19 pandemic have led to reduced personnel of importers, government staff and others in our supply chain. We have been working diligently with our network of freight partners and suppliers to expedite delivery dates and provide solutions to reduce further impact and delays. However, we are unable to determine the full impact of these delays and how long they will continue as they are out of our control. While the Company is continuing to navigate the financial, operational, and personnel challenges presented by the COVID-19 pandemic, the full extent of the impact on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic, the potential uncertainty related to and proliferation of new strains, and related actions taken by the U.S. government, state and local government officials, and international governments to prevent disease spread, all of which are uncertain, out of our control and cannot be predicted at this time. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) |
Financial Statement Presentation | Financial Statement Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021. The balance sheet as of December 31, 2020 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto contained in the Annual Report on Form 10-K for the year ended December 31, 2020. The notes to the unaudited condensed consolidated financial statements are presented on a going concern basis. |
Basis of Consolidation and Reclassifications | Basis of Consolidation and Reclassifications The condensed consolidated financial statements include the accounts of the Company and its controlled and wholly owned subsidiary, Hydro Innovations, LLC (“Hydro”). Intercompany transactions, profit, and balances are eliminated in consolidation. |
Going Concern | Going Concern The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has experienced recurring losses since its inception. Since inception, the Company has financed its activities principally through debt and equity financing, customer deposits and revenues from completed contracts. Management expects to incur additional losses and cash outflows in the foreseeable future in connection with its operating activities. Management believes that the economic dislocations in the overall economy, in the near term, will impact our revenues, losses and cash flows. There can be no assurance that the Company will be able to raise debt or equity financing in sufficient amounts, when and if needed, on acceptable terms or at all. If results of operations for 2021 do not meet management’s expectations, or additional capital is not available, management believes it has the ability to reduce certain expenditures. 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 the overall economy, market demand for the Company’s products and services, the quality of product development efforts, management of working capital, and continuation of normal payment terms and conditions for purchase of the Company’s products. The Company believes its cash balances and cash flow from operations will be insufficient to fund its operations for the next 12 months. If the Company is unable to substantially increase revenues, reduce expenditures, or otherwise generate cash flows from operations, then the Company will need to raise additional funding to continue as a going concern. The foregoing factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date the financial statements are issued. These condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. |
Use of Estimates | Use of Estimates Management makes estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and that affect the reported amounts of revenue and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Key estimates include: allocation of transaction prices to performance obligations under contracts with customers, standalone selling prices, timing of expected revenue recognition on remaining performance obligations under contracts with customers, valuation of intangible assets, valuation of equity-based compensation, valuation of deferred tax assets and liabilities, warranty accruals, accounts receivable and inventory allowances, and legal contingencies. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash All highly liquid investments with original maturities of three months or less at the date of purchase are considered to be cash equivalents. The Company may, from time to time, have deposits in financial institutions that exceed the federally insured amount. The Company has not experienced any losses to date on depository accounts. |
Income (Loss) Per Common Share | Income (Loss) Per Common Share Basic income (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration of common stock equivalents. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding and potentially dilutive common stock equivalents, including stock options, warrants and restricted stock units and other equity-based awards, except in cases where the effect of the common stock equivalents would be antidilutive. Potential common stock equivalents consist of common stock issuable upon exercise of stock options and warrants and the vesting of restricted stock units using the treasury method. During the nine months ended September 30, 2021 and 2020, there were warrants and options outstanding to purchase Company common stock and shares of convertible preferred stock and restricted stock units that were convertible into shares of the Company’s common stock. During the three- and nine-month periods ended September 30, 2021 and 2020, the Company incurred a net loss and consequently the common share equivalents of these potentially dilutive equity instruments have not been included in the calculations of loss per share because such inclusion would have been anti-dilutive. As of September 30, 2021, and 2020, there were respectively, 116,683,201 44,007,500 |
Goodwill | Goodwill The Company recorded goodwill in connection with its acquisition of Hydro Innovations, LLC in July 2014. Goodwill is reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value of the reporting unit has been reduced to less than its carrying value. The Company performs a quantitative impairment test annually on December 31 by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is considered not impaired. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company determined that it has one reporting unit. During the nine months ended September 30, 2021, the Company concluded that the projected impact of the COVID-19 pandemic on its sales, contract completion and revenues in the near term, together with the volatility in its share price during the quarter represented potential indicators of impairment. Accordingly, the Company performed an interim impairment analysis at September 30, 2021 and concluded that no impairment relating to goodwill existed at September 30, 2021. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) |
Temporary Equity | Temporary Equity Shares of preferred stock that are redeemable for cash or other assets are classified as temporary equity if they are redeemable, at the option of the holder, at a fixed or determinable price on a fixed or determinable date or upon the occurrence of an event that is not solely within the control of the issuer. Redeemable equity instruments are initially carried at the fair value of the equity instrument at the issuance date, net of issuance costs, which is subsequently adjusted to redemption value (including the amount for dividends earned but not yet declared or paid) at each balance sheet date if the instrument is currently redeemable or if it is probable that the instrument will become redeemable. The Company determined it is probable the Series B Preferred Stock will become redeemable at the option of the holder. As a result, on September 30, 2021, the Company adjusted carrying value of the Series B Preferred Stock to its redemption value of $ 3,960,000 2,262,847 |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 (Topic 606), Revenue from Contracts with Customers Under the revenue standard, a performance obligation is a promise in a contract with a customer to transfer a distinct good or service to the customer. Most of the Company’s contracts contain multiple performance obligations that include engineering and technical services as well as the delivery of a diverse range of climate control system equipment and components, which can span multiple phases of a customer’s project life cycle from facility design and construction to equipment delivery and system installation and start-up. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. When there are multiple performance obligations within a contract, the Company allocates the transaction price to each performance obligation based on standalone selling price. When estimating the selling price, the Company uses various observable inputs. The best observable input is the Company’s actual selling price for the same good or service, however, this input is generally not available for the Company’s contracts containing multiple performance obligations. For engineering services, the Company estimates the standalone selling price by reference to certain physical characteristics of the project, such as facility size and mechanical systems involved, which are indicative of the scope and complexity of the mechanical engineering services to be provided. For equipment sales, the standalone selling price is determined by forecasting the expected costs of the equipment and then adding an appropriate margin, based on a range of acceptable margins established by management. Depending on the nature of the performance obligations, the Company may use a combination of different methods and observable inputs if certain performance obligations have highly variable or uncertain standalone selling prices. Once the selling prices are determined, the Company applies the relative values to the total contract consideration and estimates the amount of the transaction price to be recognized as each performance obligation is fulfilled. The Company recognizes revenue for the sale of goods when control transfers to the customer, which primarily occurs at the time of shipment. The Company’s historical rates of return are insignificant as a percentage of sales and, as a result, the Company does not record a reserve for returns at the time the Company recognizes revenue. The Company has elected to exclude from the measurement of the transaction price all taxes (e.g., sales, use, value added, and certain excise taxes) that are assessed by a governmental authority in connection with a specific revenue-producing transaction and collected by the Company from the customer. Accordingly, the Company recognizes revenue net of sales taxes. The revenue and cost for freight and shipping is recorded when control over the sale of goods passes to the Company’s customers. The Company also has performance obligations to perform certain engineering services that are satisfied over a period of time. Revenue is recognized from this type of performance obligation as services are rendered based on the percentage completion towards certain specified milestones. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) The Company offers assurance-type warranties for its products and products manufactured by others to meet specifications defined by the contracts with customers and does not have any material separate performance obligations related to these warranties. The Company maintains a warranty reserve based on historical warranty costs. Applying the practical expedient in ASC 606-10-32-18, which the Company has elected, the Company does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Accordingly, the remaining performance obligations related to customer contracts does not consider the effects of the time value of money. Applying the practical expedient in ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred since the amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs include certain sales commissions and incentives, which are included in selling, general and administrative expenses, and are payable only when associated revenue has been collected and earned by the Company. The Company does not have material amounts of contract assets since revenue is recognized as control of goods is transferred or as services are performed. Contract liabilities consist of advance payments and deferred revenue. For the three and nine months ended September 30, 2021, the Company recognized revenue of $ 283,452 3,357,068 9,141 1,074,016 Remaining performance obligations, or backlog, represents the aggregate amount of the transaction price allocated to the remaining obligations that the Company has not performed under its customer contracts. The Company has elected not to use the optional exemption in ASC 606-10-50-14, which exempts an entity from such disclosures if a performance obligation is part of a contract with an original expected duration of one year or less. Accordingly, the information disclosed about remaining performance obligations includes all customer contracts, including those with an expected duration of one year or less. Industry uncertainty, project financing concerns, and the licensing and qualification of our prospective customers, which are out of the Company’s control, make it difficult for the Company to predict when it will recognize revenue on its remaining performance obligations. There are risks that the Company may not realize the full contract value on customer projects in a timely manner or at all, and completion of a customer’s cultivation facility project is dependent upon the customer’s ability to secure funding and real estate, obtain a license and then build their cultivation facility so they can take possession of the equipment. Accordingly, the time it takes for customers to complete a project, which corresponds to when the Company is able to recognize revenue, is driven by numerous factors including: (i) the large number of first-time participants interested in the indoor cannabis cultivation business; (ii) the complexities and uncertainties involved in obtaining state and local licensure and permitting; (iii) local and state government delays in approving licenses and permits due to lack of staff or the large number of pending applications, especially in states where there is no cap on the number of cultivators; (iv) the customer’s need to obtain cultivation facility financing; (v) the time needed, and coordination required, for our customers to acquire real estate and properly design and build the facility (to the stage when climate control systems can be installed); (vi) the large price tag and technical complexities of the climate control and air sanitation system; (vii) the availability of power; and (viii) delays that are typical in completing any construction project. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) As of September 30, 2021, the Company’s remaining performance obligations, or backlog, was $ 9,881,000 1,161,000 12 1,250,000 The remaining performance obligations expected to be recognized through 2022 are as follows: Schedule of Remaining Performance Obligations Expected to be Recognized 2021 2022 Total Remaining performance obligations related to engineering only paid contracts $ 112,000 $ 1,049,000 $ 1,161,000 Remaining performance obligations related to partial equipment paid contracts 3,091,000 5,629,000 $ 8,720,000 Total remaining performance obligations $ 3,203,000 $ 6,678,000 $ 9,881,000 The following table sets forth the Company’s revenue by source: Schedule of Revenue by Source For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Equipment and systems sales $ 3,523,948 $ 1,481,961 $ 9,933,313 $ 4,575,855 Engineering and other services 110,538 114,160 464,269 402,837 Shipping and handling 71,950 38,548 184,888 148,326 Total revenue $ 3,706,436 $ 1,634,669 $ 10,582,470 $ 5,127,018 |
Accounting for Share-Based Compensation | Accounting for Share-Based Compensation The Company recognizes the cost resulting from all share-based compensation arrangements, including stock options, restricted stock awards and restricted stock units that the Company grants under its equity incentive plan in its condensed consolidated financial statements based on their grant date fair value. The expense is recognized over the requisite service period or performance period of the award. Awards with a graded vesting period based on service are expensed on a straight-line basis for the entire award. Awards with performance-based vesting conditions, which require the achievement of a specific company financial performance goal at the end of the performance period and required service period, are recognized over the performance period. Each reporting period, the Company reassesses the probability of achieving the respective performance goal. If the goals are not expected to be met, no compensation cost is recognized and any previously recognized amount recorded is reversed. If the award contains market-based vesting conditions, the compensation cost is based on the grant date fair value and expected achievement of market condition and is not subsequently reversed if it is later determined that the condition is not likely to be met or is expected to be lower than initially expected. The grant date fair value of stock options is based on the Black-Scholes Option Pricing Model (the “Black-Scholes Model”). The Black-Scholes Model requires judgmental assumptions including volatility and expected term, both based on historical experience. The risk-free interest rate is based on U.S. Treasury interest rates whose term is consistent with the expected term of the option. The Company determines the assumptions used in the valuation of option awards as of the date of grant. Differences in the expected stock price volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at those grant dates. As such, the Company may use different assumptions for options granted throughout the year. During the nine months ended September 30, 2021, the valuation assumptions used to determine the fair value of each option award on the date of grant were: expected stock price volatility ranged from 150.2 % to 152.51 %; expected term in years 10 and risk-free interest rate ranged from 0.55% to 1.49 %. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) The grant date fair value of restricted stock and restricted stock units is based on the closing price of the underlying stock on the date of the grant. The Company has elected to reduce share-based compensation expense for forfeitures as the forfeitures occur since the Company does not have historical data or other factors to appropriately estimate the expected employee terminations and to evaluate whether particular groups of employees have significantly different forfeiture expectations. The following is a summary of share-based compensation expenses included in the condensed consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020: Schedule of Share-based Compensation Costs For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Share-based compensation expense included in: Cost of revenue $ - $ 6,833 $ 29,944 $ 23,949 Advertising and marketing expenses - 2,500 13,292 7,500 Product development costs - 5,444 14,029 16,332 Selling, general and administrative expenses 29,307 41,221 102,735 306,448 Total share-based compensation expense included in consolidated statement of operations $ 29,307 $ 55,998 $ 160,000 $ 354,229 Included in the expense for the three and nine months ended September 30, 2021, is an accrual for $ 0 108,945 31,575 101,472 |
Concentrations | Concentrations Three customers accounted for 38 23 11 25 12 12 39 30 18 17 11 Three customers accounted for 40 26 22 32 23 21 10 |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. Surna Inc. Notes to Condensed Consolidated Financial Statements September 30, 2021 (in US Dollars except share numbers) (Unaudited) In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company early adopted ASU 2020-06 effective January 1, 2021. The early adoption of ASU 2020-06 impacted the Company’s accounting for the issuance of its Series B Redeemable Convertible Preferred Stock as further discussed in Note 8 Temporary Equity Series B Redeemable Convertible Preferred Stock In March 2020, the FAS issued ASU No. 2020-04 “ Reference Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). In January 2020, the FASB issued ASU No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes, Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
General (Tables)
General (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Remaining Performance Obligations Expected to be Recognized | The remaining performance obligations expected to be recognized through 2022 are as follows: Schedule of Remaining Performance Obligations Expected to be Recognized 2021 2022 Total Remaining performance obligations related to engineering only paid contracts $ 112,000 $ 1,049,000 $ 1,161,000 Remaining performance obligations related to partial equipment paid contracts 3,091,000 5,629,000 $ 8,720,000 Total remaining performance obligations $ 3,203,000 $ 6,678,000 $ 9,881,000 |
Schedule of Revenue by Source | The following table sets forth the Company’s revenue by source: Schedule of Revenue by Source For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Equipment and systems sales $ 3,523,948 $ 1,481,961 $ 9,933,313 $ 4,575,855 Engineering and other services 110,538 114,160 464,269 402,837 Shipping and handling 71,950 38,548 184,888 148,326 Total revenue $ 3,706,436 $ 1,634,669 $ 10,582,470 $ 5,127,018 |
Schedule of Share-based Compensation Costs | The following is a summary of share-based compensation expenses included in the condensed consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020: Schedule of Share-based Compensation Costs For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Share-based compensation expense included in: Cost of revenue $ - $ 6,833 $ 29,944 $ 23,949 Advertising and marketing expenses - 2,500 13,292 7,500 Product development costs - 5,444 14,029 16,332 Selling, general and administrative expenses 29,307 41,221 102,735 306,448 Total share-based compensation expense included in consolidated statement of operations $ 29,307 $ 55,998 $ 160,000 $ 354,229 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases | |
Schedule of Lease Cost | The lease cost, cash flows and other information related to the Facility Lease were as follows: Schedule of Lease Cost For the Nine Months Ended September 30, 2021 Operating lease cost $ 162,667 Operating cash outflow from operating lease $ 210,154 As of September 30, 2021 Operating lease right-of-use assset $ 194,353 Operating lease liability, current $ 238,140 Operating lease liability, long-term $ - Remaining lease term .9 Discount rate 5.00 % |
Schedule of Future Annual Minimum Lease Payments | Future annual minimum lease payments on the Facility Lease as of September 30, 2021 were as follows: Schedule of Future Annual Minimum Lease Payments Years ended December 31, 2021 (excluding the nine months ended September 30, 2021) 71,710 2022 170,891 Total minimum lease payments 242,601 Less imputed interest (4,461 ) Present value of minimum lease payments $ 238,140 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following: Schedule of Inventory September 30, December 31, 2021 2020 Finished goods $ 319,335 $ 201,778 Work in progress 2,595 4,231 Raw materials 237,704 214,145 Allowance for excess & obsolete inventory (79,281 ) (93,045 ) Inventory, net $ 480,354 $ 327,109 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: Schedule of Property and Equipment September 30, December 31, 2021 2020 Furniture and equipment $ 296,851 $ 398,422 Vehicles 15,000 15,000 Leasehold improvements 215,193 215,193 527,044 628,615 Accumulated depreciation (428,076 ) (480,883 ) Property and equipment, net $ 98,967 $ 147,732 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following: Schedule of Accounts Payable and Accrued Liabilities September 30, December 31, 2021 2020 Accounts payable $ 864,558 $ 918,639 Sales commissions payable 40,758 48,263 Accrued payroll liabilities 255,462 288,071 Product warranty accrual 172,868 173,365 Other accrued expenses 340,442 356,623 Total $ 1,674,088 $ 1,784,961 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
2017 Equity Incentive Plan [Member] | Employees And Consultants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Stock Option Activity | A summary of the non-qualified stock options granted to employees and consultants under the 2017 Equity Plan during the nine months ended September 30, 2021, are presented in the table below: Schedule of Stock Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding, December 31, 2020 14,251,000 $ 0.083 8.3 $ - Granted 3,035,800 $ 0.085 10.0 $ - Exercised - Forfeited (287,000 ) $ 0.122 6.6 $ - Expired - Outstanding, September 30, 2021 16,999,800 $ 0.083 7.9 $ - Exercisable, September 30, 2021 15,249,800 $ 0.085 7.7 $ - |
Summary of Non-vested Non-qualified Stock Option Activity | A summary of non-vested non-qualified stock options activity for employees and consultants under the 2017 Equity Plan for the nine months ended September 30, 2021, are presented in the table below: Summary of Non-vested Non-qualified Stock Option Activity Number of Options Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Grant-Date Fair Value Nonvested, December 31, 2020 - $ - $ - $ - Granted 3,035,800 $ 0.082 $ - $ - Vested (1,285,800 ) $ 0.112 $ 66,412 $ - Forfeited - $ - Expired - $ - Nonvested, September 30, 2021 1,750,000 $ 0.061 $ - $ 104,800 |
2017 Equity Plan and 2021 Equity Plan [Member] | Directors [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Stock Option Activity | A summary of the non-qualified stock options granted to directors under the 2017 Equity Plan and the 2021 Equity Plan, during the nine months ended September 30, 2021, are presented in the table below: Schedule of Stock Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ($000) Outstanding, December 31, 2020 7,400,000 $ 0.067 7.5 $ - Granted 230,770 $ 0.065 10.0 $ - Exercised - Forfeited/Cancelled - Expired - Outstanding, September 30, 2021 7,630,770 $ 0.067 6.8 $ - Exerciseable, September 30, 2021 7,630,770 $ 0.067 6.8 $ - |
Summary of Non-vested Non-qualified Stock Option Activity | A summary of non-vested non-qualified stock options activity for directors under the 2017 Equity Plan and the 2021 Equity Plan, for the nine months ended September 30, 2021, are presented in the table below: Summary of Non-vested Non-qualified Stock Option Activity Number of Options Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value Grant-Date Fair Value Nonvested, December 31, 2020 1,000,000 $ 0.029 $ 31,000 $ - Granted 230,770 0.065 $ (1,154 ) $ - Vested (1,230,770 ) $ 0.036 $ (29,846 ) $ - Forfeited - Expired - Nonvested, September 30, 2021 - $ - $ - |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Warrants | |
Schedule of Outstanding Warrants to Purchase Common Stock | The following table summarizes information with respect to outstanding warrants to purchase common stock during the nine months ended September 30, 2021: Schedule of Outstanding Warrants to Purchase Common Stock Weighted Weighted Average Average Remaining Aggregate Number Exercise Life Intrincic Outstanding Price In Months Value Outstanding at December 31, 2020 7,562,500 $ 0.25 6 $ 0 Issued 34,157,894 $ 0.06 36 - Exercised - - - - Expired (7,562,500 ) $ 0.25 - $ 0 Outstanding at September 30, 2021 34,157,894 $ 0.06 36 $ 0 |
Schedule of Warrants Outstanding | The following table summarizes information about warrants outstanding at September 30, 2021: Schedule of Warrants Outstanding Weighted Average Life of Warrants Outstanding Warrants Exercise price Outstanding In Months 0.063 28,947,368 36 0.069 5,210,526 36 34,157,894 36 |
Schedule of Remaining Performan
Schedule of Remaining Performance Obligations Expected to be Recognized (Details) | Sep. 30, 2021USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Remaining performance obligations related to engineering only paid contracts | $ 1,161,000 |
Remaining performance obligations related to partial equipment paid contracts | 8,720,000 |
Total remaining performance obligations | 9,881,000 |
2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Remaining performance obligations related to engineering only paid contracts | 112,000 |
Remaining performance obligations related to partial equipment paid contracts | 3,091,000 |
Total remaining performance obligations | 3,203,000 |
2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Remaining performance obligations related to engineering only paid contracts | 1,049,000 |
Remaining performance obligations related to partial equipment paid contracts | 5,629,000 |
Total remaining performance obligations | $ 6,678,000 |
Schedule of Revenue by Source (
Schedule of Revenue by Source (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Product Information [Line Items] | ||||
Total revenue | $ 3,706,436 | $ 1,634,669 | $ 10,582,470 | $ 5,127,018 |
Equipment and Systems Sales [Member] | ||||
Product Information [Line Items] | ||||
Total revenue | 3,523,948 | 1,481,961 | 9,933,313 | 4,575,855 |
Engineering and Other Services [Member] | ||||
Product Information [Line Items] | ||||
Total revenue | 110,538 | 114,160 | 464,269 | 402,837 |
Shipping and Handling [Member] | ||||
Product Information [Line Items] | ||||
Total revenue | $ 71,950 | $ 38,548 | $ 184,888 | $ 148,326 |
Schedule of Share-based Compens
Schedule of Share-based Compensation Costs (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Total share-based compensation expense included in consolidated statement of operations | $ 29,307 | $ 55,998 | $ 160,000 | $ 354,229 |
Cost of Sales [Member] | ||||
Total share-based compensation expense included in consolidated statement of operations | 6,833 | 29,944 | 23,949 | |
Advertising and Marketing Expenses [Member] | ||||
Total share-based compensation expense included in consolidated statement of operations | 2,500 | 13,292 | 7,500 | |
Product Development Costs [Member] | ||||
Total share-based compensation expense included in consolidated statement of operations | 5,444 | 14,029 | 16,332 | |
Selling, General and Administrative Expenses [Member] | ||||
Total share-based compensation expense included in consolidated statement of operations | $ 29,307 | $ 41,221 | $ 102,735 | $ 306,448 |
General (Details Narrative)
General (Details Narrative) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2021USD ($)ft² | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)ft²shares | Sep. 30, 2020USD ($)shares | Jul. 28, 2021ft² | Jul. 27, 2021ft² | Apr. 30, 2021ft² | |
Product Information [Line Items] | |||||||
Area of Land | ft² | 11,491 | 18,952 | 6,900 | ||||
Potentially dilutive equity instruments that are convertible into common stock | shares | 116,683,201 | 44,007,500 | |||||
Revenue recognized | $ 283,452 | $ 9,141 | $ 3,357,068 | $ 1,074,016 | |||
Remaining performance obligations | $ 9,881,000 | $ 9,881,000 | |||||
Remaining performance obligations, percentage | 12.00% | 12.00% | |||||
Share based compensation expense | $ 29,307 | $ 55,998 | $ 160,000 | $ 354,229 | |||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer One [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration risk percentage | 38.00% | 39.00% | 25.00% | 18.00% | |||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Two [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration risk percentage | 23.00% | 30.00% | 12.00% | 17.00% | |||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Three [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration risk percentage | 11.00% | 12.00% | 11.00% | ||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer One [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration risk percentage | 40.00% | 32.00% | |||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Two [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration risk percentage | 26.00% | 23.00% | |||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Three [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration risk percentage | 22.00% | 21.00% | |||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Four [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration risk percentage | 10.00% | ||||||
2021 Incentive Awards [Member] | |||||||
Product Information [Line Items] | |||||||
Share based compensation expense | $ 0 | $ 31,575 | $ 108,945 | $ 101,472 | |||
Customer Contracts [Member] | |||||||
Product Information [Line Items] | |||||||
Remaining performance obligations | 1,161,000 | 1,161,000 | |||||
Order or Production Backlog [Member] | |||||||
Product Information [Line Items] | |||||||
Remaining performance obligations | $ 1,250,000 | 1,250,000 | |||||
Series B Preferred Stock [Member] | |||||||
Product Information [Line Items] | |||||||
Temporary equity redemption value | 3,960,000 | ||||||
Temporary equity non cash redemption value adjustment | $ 2,262,847 | ||||||
Minimum [Member] | |||||||
Product Information [Line Items] | |||||||
Area of Land | ft² | 100,000 | 100,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 150.20% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.55% | ||||||
Maximum [Member] | |||||||
Product Information [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 152.51% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.49% |
Schedule of Lease Cost (Details
Schedule of Lease Cost (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Leases | ||
Operating lease cost | $ 162,667 | |
Operating cash outflow from operating lease | 210,154 | |
Operating lease right-of-use asset | 194,353 | $ 343,950 |
Operating lease liability, current | 238,140 | 266,105 |
Operating lease liability, long-term | $ 169,119 | |
Remaining lease term | 10 months 24 days | |
Discount rate | 5.00% |
Schedule of Future Annual Minim
Schedule of Future Annual Minimum Lease Payments (Details) | Sep. 30, 2021USD ($) |
Leases | |
2021 (excluding the nine months ended September 30, 2021) | $ 71,710 |
2022 | 170,891 |
Total minimum lease payments | 242,601 |
Less imputed interest | (4,461) |
Present value of minimum lease payments | $ 238,140 |
Leases (Details Narrative)
Leases (Details Narrative) | Jul. 28, 2021ft² | Jul. 27, 2021ft² | Jul. 02, 2021USD ($) | Apr. 30, 2021USD ($)ft² | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) | Jan. 02, 2019USD ($) |
Operating lease right-of-use asset | $ 194,353 | $ 343,950 | |||||
Lease liability | $ 238,140 | ||||||
Operating lease term description | The Facility Lease commenced September 29, 2017 and continues through August 31, 2022. | ||||||
Monthly rent description | Beginning September 1, 2018, and each subsequent September 1 during the term, the monthly rent under the Facility Lease will increase by 3% | ||||||
Area of land | ft² | 11,491 | 18,952 | 6,900 | ||||
Rent expense | $ 11,978 | $ 5,989 | |||||
Facility Lease [Member] | |||||||
Operating lease renewal term | 5 years | ||||||
Lease Termination Agreement [Member] | |||||||
Lease expire date | Jan. 31, 2027 | Aug. 31, 2022 | |||||
Accounting Standards Update 2016-02 [Member] | |||||||
Operating lease right-of-use asset | $ 714,416 | ||||||
Lease liability | 822,374 | ||||||
Unamortized amount of tenant improvement allowance | 81,481 | ||||||
Accounting Standards Update 2016-02 [Member] | Maximum [Member] | |||||||
Tenant improvements | $ 100,000 |
Schedule of Inventory (Details)
Schedule of Inventory (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 319,335 | $ 201,778 |
Work in progress | 2,595 | 4,231 |
Raw materials | 237,704 | 214,145 |
Allowance for excess & obsolete inventory | (79,281) | (93,045) |
Inventory, net | $ 480,354 | $ 327,109 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Overhead expenses | $ 17,674 | $ 17,974 |
Prepaid inventory expenses | $ 879,000 | $ 916,000 |
Schedule of Property and Equipm
Schedule of Property and Equipment (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 527,044 | $ 628,615 |
Accumulated depreciation | (428,076) | (480,883) |
Property and equipment, net | 98,967 | 147,732 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 296,851 | 398,422 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 15,000 | 15,000 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 215,193 | $ 215,193 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | $ 54,538 | |||
Selling, general and administrative expenses | $ 866,699 | $ 634,447 | 2,493,930 | $ 2,453,976 |
Property, Plant and Equipment [Member] | Cost of Sales [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Selling, general and administrative expenses | 4,721 | |||
Property, Plant and Equipment [Member] | Inventory [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Selling, general and administrative expenses | $ 1,180 |
Schedule of Accounts Payable an
Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 864,558 | $ 918,639 |
Sales commissions payable | 40,758 | 48,263 |
Accrued payroll liabilities | 255,462 | 288,071 |
Product warranty accrual | 172,868 | 173,365 |
Other accrued expenses | 340,442 | 356,623 |
Total | $ 1,674,088 | $ 1,784,961 |
Note Payable and Accrued Inte_2
Note Payable and Accrued Interest (Details Narrative) - USD ($) | Feb. 10, 2021 | Sep. 30, 2021 | Sep. 30, 2021 |
Debt Disclosure [Abstract] | |||
Loan principal amount | $ 514,200 | ||
Loan interest rate | 1.00% | ||
Loan due date | Feb. 5, 2026 | ||
Accrued interest | $ 1,296 | $ 3,268 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Apr. 08, 2021 | Mar. 30, 2021 | Jun. 09, 2020 | Mar. 09, 2020 | Sep. 30, 2021 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Obligate to pay for dispute | $ 40,000 | |||||
Issuance of private placement | $ 1,000,000 | $ 1,000,000 | ||||
Aggregate common shares issued upon execution of settlement | 67,000 | 67,000 | ||||
Other expenses | $ 107,000 | |||||
Payment of settlement | 35,000 | |||||
Settlement by cash | 40,000 | |||||
Accounts payables and accruals | $ 5,000 | |||||
Stock issuance, shares | 1,000,000 | |||||
Stock issuance, value | $ 67,000 | |||||
Former Employee [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Interim awarded value | $ 33,985 | |||||
Restricted stock units shares issued interest percentage | 8.00% | |||||
Restricted Stock Units (RSUs) [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of units, vested but not settled | 6,750,000 | |||||
Number of units, vested and settled | 6,750,000 | |||||
Interim awarded value | $ 10,000 |
Temporary Equity (Details Narra
Temporary Equity (Details Narrative) - USD ($) | Sep. 28, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Dec. 07, 2021 | Dec. 31, 2020 |
Temporary equity, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||
Common stock, shares authorized | 350,000,000 | 350,000,000 | 350,000,000 | ||
Temporary equity net proceeds | $ 2,625,000 | $ 1,260,000 | |||
Terms of escrow | $ 1,365,000 | ||||
Exercise price of warrant per share | $ 0.06 | $ 0.06 | $ 0.25 | ||
Equity Method Investments [Member] | |||||
Exercise price of warrant per share | 0.0693 | $ 0.0693 | |||
Percentage of placement agent cash fee | 9.00% | ||||
Placement agent expenses | $ 270,000 | ||||
Warrant to purchase common stock shares | 5,210,526 | ||||
Investor Warrant [Member] | |||||
Investor warrant exercise date | Sep. 28, 2024 | ||||
Exercise price of warrant per share | $ 0.063 | $ 0.063 | |||
Issuance of common stock exercise percentage provision | 4.99% | ||||
Series B Redeemable Convertible Preferred Stock [Member] | |||||
Temporary equity, shares authorized | 3,300 | ||||
Temporary equity, par value | $ 1,000 | ||||
Exercise price of warrant per share | $ 0.063 | ||||
Convertible Preferred Stock [Member] | |||||
Common stock, shares authorized | 57,894,738 | ||||
Temporary equity aggregate purchase price | $ 3,000,000 | ||||
Convertible Preferred Stock [Member] | Maximum [Member] | |||||
Warrants to purchase common stock | 28,947,368 | ||||
Series B Preferred Stock [Member] | |||||
Common stock, shares authorized | 850,000,000 | 850,000,000 | |||
Temporary equity aggregate purchase price | 3,000,000 | ||||
Terms of escrow | $ 1,365,000 | $ 1,365,000 | $ 1,365,000 | ||
Percentage of preferred stock dividend | 8.00% | ||||
Common stock conversion price per share | $ 0.057 | ||||
Percentage of preferred stock conversion provision | 4.99% | ||||
Percentage of common stock reserve | 200.00% | ||||
Debt Instrument, Redemption Price, Percentage | 120.00% | ||||
Debt Instrument, Convertible, Liquidation Preference, Per Share | $ 1,000 | $ 1,000 | |||
[custom:DebtInstrumentRedeemableShares-0] | 1,650 | 1,650 | |||
[custom:DebtInstrumentRedemptionPricePercentageDividendDueThereon] | 8.00% | ||||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 120.00% | ||||
[custom:DebtInstrumentRedeemptionStatedValue-0] | $ 1,000 | $ 1,000 | |||
Debt Instrument, Convertible, Liquidation Preference, Value | 3,960,000 | 3,960,000 | |||
Temporary Equity, Accretion to Redemption Value | 3,960,000 | ||||
[custom:TemporaryEquityNonCashRedemptionValueAdjustment] | 2,262,847 | ||||
Net proceeds securities purchase agreement | $ 2,624,874 | ||||
Temporary equity description | the redemption of the outstanding shares of Series A Preferred Stock of the Company for common stock at the rate of 1 share of common stock for each 100 shares of preferred stock that is currently issued and outstanding, | ||||
Series B Preferred Stock [Member] | Maximum [Member] | |||||
Warrants to purchase common stock | $ 28,947,368 | ||||
Series A Preferred Stock [Member] | |||||
Outstanding shares value | $ 1,365,000 | $ 1,365,000 | |||
Debt Instrument, Redemption Price, Percentage | 120.00% | ||||
Debt Instrument, Convertible, Liquidation Preference, Per Share | $ 1,000 | $ 1,000 |
Stockholders_ Deficit (Details
Stockholders’ Deficit (Details Narrative) - USD ($) | Sep. 28, 2021 | Apr. 08, 2021 | Mar. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | |||||
Preferred stock, shares authorized | 150,000,000 | 150,000,000 | |||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | |||
Common stock, shares authorized | 350,000,000 | 350,000,000 | |||
Common stock, par value | $ 0.00001 | $ 0.00001 | |||
Common Stock, Shares, Outstanding | 237,526,638 | 236,526,638 | |||
Common Stock, Shares, Issued | 237,526,638 | 236,526,638 | |||
Proceeds from Issuance of Private Placement | $ 1,000,000 | $ 1,000,000 | |||
Aggregate common shares issued upon execution of settlement | 67,000 | 67,000 | |||
Series A Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | |||
Preferred stock, shares issued | 42,030,331 | 42,030,331 | |||
Preferred stock, shares outstanding | 42,030,331 | 42,030,331 | |||
Series B Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, par value | $ 1,000 | ||||
Preferred stock, shares outstanding | 3,300 | ||||
Stock Repurchased During Period, Value | $ 3,300,000 | ||||
Temporary Equity, Aggregate Amount of Redemption Requirement | 3,000,000 | ||||
Common stock, shares authorized | 850,000,000 | ||||
Series B Preferred Stock [Member] | Maximum [Member] | |||||
Class of Stock [Line Items] | |||||
Stock and Warrants Issued During Period, Value, Preferred Stock and Warrants | $ 28,947,368 | ||||
Series B Preferred Stock [Member] | Purchase Agreement [Member] | |||||
Class of Stock [Line Items] | |||||
Investor purchased shares | 3,300 |
Schedule of Stock Option Activi
Schedule of Stock Option Activity (Details) - USD ($) | Jun. 24, 2020 | Sep. 30, 2021 |
2017 Equity Incentive Plan [Member] | Employees And Consultants [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Granted | 3,035,800 | |
2017 Equity Plan and 2021 Equity Plan [Member] | Directors [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Granted | 230,770 | |
Non-qualified Stock Options [Member] | 2017 Equity Incentive Plan [Member] | Employees And Consultants [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Outstanding Beginning | 14,251,000 | |
Weighted Average Exercise Price, Outstanding Beginning | $ 0.083 | |
Weighted Average Remaining Contractual Term, Outstanding Beginning | 8 years 3 months 18 days | |
Aggregate Intrinsic Value, Outstanding Beginning | ||
Number of Options, Granted | 3,035,800 | |
Weighted Average Exercise Price, Granted | $ 0.085 | |
Weighted Average Remaining Contractual Term, Granted | 10 years | |
Aggregate Intrinsic Value, Granted | ||
Number of Options, Exercised | ||
Number of Options, Forfeited/Cancelled | (287,000) | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price | $ 0.122 | |
[custom:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTermForfeited] | 6 years 7 months 6 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Intrinsic Value | ||
Number of Options, Expired | ||
Number of Options, Outstanding Ending | 16,999,800 | |
Weighted Average Exercise Price, Outstanding Ending | $ 0.083 | |
Weighted Average Remaining Contractual Term, Outstanding Ending | 7 years 10 months 24 days | |
Aggregate Intrinsic Value, Outstanding Ending | ||
Number of Options, Exercisable Ending | 15,249,800 | |
Weighted Average Exercise Price, Exercisable Ending | $ 0.085 | |
Weighted Average Remaining Contractual Term, Exercisable Ending | 7 years 8 months 12 days | |
Aggregate Intrinsic Value, Exercisable Ending | ||
Number of Options, Forfeited/Cancelled | 287,000 | |
Aggregate Intrinsic Value, Outstanding Ending | ||
Non-qualified Stock Options [Member] | 2017 Equity Incentive Plan [Member] | Directors [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted Average Remaining Contractual Term, Outstanding Beginning | 5 years | |
Non-qualified Stock Options [Member] | 2017 Equity Plan and 2021 Equity Plan [Member] | Directors [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Outstanding Beginning | 7,400,000 | |
Weighted Average Exercise Price, Outstanding Beginning | $ 0.067 | |
Weighted Average Remaining Contractual Term, Outstanding Beginning | 7 years 6 months | |
Aggregate Intrinsic Value, Outstanding Beginning | ||
Number of Options, Granted | 230,770 | |
Weighted Average Exercise Price, Granted | $ 0.065 | |
Weighted Average Remaining Contractual Term, Granted | 10 years | |
Aggregate Intrinsic Value, Granted | ||
Number of Options, Exercised | ||
Number of Options, Forfeited/Cancelled | ||
Number of Options, Expired | ||
Number of Options, Outstanding Ending | 7,630,770 | |
Weighted Average Exercise Price, Outstanding Ending | $ 0.067 | |
Weighted Average Remaining Contractual Term, Outstanding Ending | 6 years 9 months 18 days | |
Aggregate Intrinsic Value, Outstanding Ending | ||
Number of Options, Exercisable Ending | 7,630,770 | |
Weighted Average Exercise Price, Exercisable Ending | $ 0.067 | |
Weighted Average Remaining Contractual Term, Exercisable Ending | 6 years 9 months 18 days | |
Aggregate Intrinsic Value, Exercisable Ending | ||
Number of Options, Forfeited/Cancelled | ||
Aggregate Intrinsic Value, Outstanding Ending |
Summary of Non-vested Non-quali
Summary of Non-vested Non-qualified Stock Option Activity (Details) | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
2017 Equity Incentive Plan [Member] | Employees And Consultants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Options Nonvested, Beginning | shares | |
Weighted Average Grant-Date Fair Value, Beginning | $ / shares | |
Aggregated Intrinsic Value, Nonvested Beginning | |
Grant Date Fair Value Nonvested, Beginning | |
Number of Options Nonvested, Granted | shares | 3,035,800 |
Weighted Average Grant-Date Fair Value, Granted | $ / shares | $ 0.082 |
Grant Date Fair Value Nonvested, Granted | |
Number of Options Nonvested, Vested | shares | (1,285,800) |
Weighted Average Grant-Date Fair Value, Vested | $ / shares | $ 0.112 |
Aggregated Intrinsic Value, Vested | $ 66,412 |
Grant Date Fair Value Nonvested, Vested | |
Number of Options Nonvested, Forfeited | shares | |
Grant Date Fair Value Nonvested, Forfeited | |
Number of Options Nonvested, Expired | shares | |
Grant Date Fair Value Nonvested, Expired | |
Number of Options Nonvested, Ending | shares | 1,750,000 |
Weighted Average Grant-Date Fair Value, Ending | $ / shares | $ 0.061 |
Aggregated Intrinsic Value, Nonvested Ending | |
Grant Date Fair Value Nonvested, Ending | 104,800 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ (66,412) |
2017 Equity Plan and 2021 Equity Plan [Member] | Directors [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Options Nonvested, Beginning | shares | 1,000,000 |
Weighted Average Grant-Date Fair Value, Beginning | $ / shares | $ 0.029 |
Aggregated Intrinsic Value, Nonvested Beginning | $ 31,000 |
Grant Date Fair Value Nonvested, Beginning | |
Number of Options Nonvested, Granted | shares | 230,770 |
Weighted Average Grant-Date Fair Value, Granted | $ / shares | $ 0.065 |
Grant Date Fair Value Nonvested, Granted | |
Number of Options Nonvested, Vested | shares | (1,230,770) |
Weighted Average Grant-Date Fair Value, Vested | $ / shares | $ 0.036 |
Aggregated Intrinsic Value, Vested | $ 1,154 |
Grant Date Fair Value Nonvested, Vested | |
Number of Options Nonvested, Forfeited | shares | |
Number of Options Nonvested, Expired | shares | |
Number of Options Nonvested, Ending | shares | |
Aggregated Intrinsic Value, Nonvested Ending | |
Grant Date Fair Value Nonvested, Ending | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | (1,154) |
Aggregated Intrinsic Value, Nonvested Forfeited | $ (29,846) |
Equity Incentive Plans (Details
Equity Incentive Plans (Details Narrative) - USD ($) | Aug. 20, 2020 | Jun. 24, 2020 | Apr. 30, 2020 | Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 22, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of share awards granted | 24,553,818 | ||||||
Share based compensation expense | $ 51,055 | $ 252,757 | |||||
2021 Equity Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of share awards granted | 100,000,000 | ||||||
Non-qualified Stock Options [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of share awards granted | 3,266,570 | ||||||
Non-qualified Stock Options [Member] | Chief Financial Officer [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Non-qualified stock options term | 10 years | ||||||
Number of options granted during the period | 2,000,000 | ||||||
Exercise price of stock options | $ 0.061 | ||||||
Number of options vested | 250,000 | ||||||
Non-qualified Stock Options [Member] | Chief Financial Officer [Member] | June 30, 2022 [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of options vested | 417,000 | ||||||
Non-qualified Stock Options [Member] | Chief Financial Officer [Member] | June 30, 2023 [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of options vested | 665,000 | ||||||
Non-qualified Stock Options [Member] | Chief Financial Officer [Member] | June 30, 2024 [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of options vested | 668,000 | ||||||
Non-qualified Stock Options [Member] | 21 Employees [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Non-qualified stock options term | 10 years | ||||||
Number of options granted during the period | 1,035,800 | ||||||
Exercise price of stock options | $ 0.13 | ||||||
Non-qualified Stock Options [Member] | Former Employee [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of options vested | 287,000 | ||||||
Non-qualified Stock Options [Member] | Employees And Consultants [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of share awards granted | 3,035,800 | ||||||
2017 Equity Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of share awards granted | 3,035,800 | ||||||
Restricted Stock Units (RSUs) [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of options vested | 800,000 | ||||||
Restricted Stock Units (RSUs) [Member] | Employees, Directors and Consultants [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share based compensation expense | 25,163 | ||||||
2017 Equity Incentive Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of common stock shares issuance | 50,000,000 | ||||||
Number of share awards granted | 24,399,800 | ||||||
Number of shares authorized | 50,000,000 | ||||||
Shares remain available for future | 1,046,382 | ||||||
2017 Equity Incentive Plan [Member] | Director [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share based compensation expense | $ 21,174 | $ 55,970 | |||||
Number of options vested | 1,230,770 | 1,521,352 | |||||
2017 Equity Incentive Plan [Member] | Non-qualified Stock Options [Member] | Directors [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Non-qualified stock options term | 5 years | ||||||
Number of options granted during the period | 2,000,000 | ||||||
Non-qualified stock options vested percentage | 50.00% | ||||||
2017 Equity Incentive Plan [Member] | Non-qualified Stock Options [Member] | Employees And Consultants [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share based compensation expense | $ 29,881 | $ 171,624 | |||||
Two Thousand Twenty One Equity Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of share awards granted | 230,770 | ||||||
2021 Equity Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of share awards granted | 230,770 | ||||||
Number of shares authorized | 100,000,000 | ||||||
Shares remain available for future | 99,769,230 | ||||||
Share based compensation expense | $ 90,255 | ||||||
Non-qualified stock options term | 3 years | ||||||
2021 Equity Plan [Member] | Non-qualified Stock Options [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 230,770 | ||||||
2021 Equity Plan [Member] | Non-qualified Stock Options [Member] | Directors [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Non-qualified stock options term | 10 years | ||||||
Number of options granted during the period | 230,770 |
Schedule of Outstanding Warrant
Schedule of Outstanding Warrants to Purchase Common Stock (Details) | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Warrants | |
Warrants Outstanding, Beginning Balance | shares | 7,562,500 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 0.25 |
Weighted Average Life of Outstanding Warrants in Months, Beginning Balance | 6 months |
Aggregate Intrinsic Value, Beginning Balance | $ | $ 0 |
Warrants, Issued | shares | 34,157,894 |
Weighted Average Exercise Price, Issued | $ / shares | $ 0.06 |
Weighted Average Life of Outstanding Warrants in Months, Issued | 36 months |
Aggregate Intrinsic Value, Issued | $ | |
Warrants, Exercised | shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Aggregate Intrinsic Value, Exercised | $ | |
Warrants, Expired | shares | (7,562,500) |
Weighted Average Exercise Price, Expired | $ / shares | $ 0.25 |
Aggregate Intrinsic Value, Expired | $ | $ 0 |
Warrants Outstanding, Ending Balance | shares | 34,157,894 |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 0.06 |
Weighted Average Life of Outstanding Warrants in Months, Ending Balance | 36 months |
Aggregate Intrinsic Value, Ending Balance | $ | $ 0 |
Schedule of Warrants Outstandin
Schedule of Warrants Outstanding (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise price | $ 0.06 | $ 0.25 |
Warrants Outstanding | 34,157,894 | 7,562,500 |
Weighted Average Life of Outstanding Warrants in Months | 36 months | |
Warrants Range [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise price | $ 0.063 | |
Warrants Outstanding | 28,947,368 | |
Weighted Average Life of Outstanding Warrants in Months | 36 months | |
Warrants Range One [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise price | $ 0.069 | |
Warrants Outstanding | 5,210,526 | |
Weighted Average Life of Outstanding Warrants in Months | 36 months |
Warrants (Details Narrative)
Warrants (Details Narrative) - $ / shares | Sep. 28, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Expirations | 7,562,500 | |||
Warrants Outstanding | 34,157,894 | 7,562,500 | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.06 | $ 0.25 | ||
Weighted Average Life of Outstanding Warrants in Months, Ending Balance | 36 months | |||
Series B Redeemable Convertible Preferred Stock [Member] | ||||
Warrants Outstanding | 28,947,368 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.063 | |||
Weighted Average Life of Outstanding Warrants in Months, Ending Balance | 3 years | |||
Series B Redeemable Convertible Preferred Stock [Member] | Private Placement [Member] | ||||
Warrants Outstanding | 5,210,526 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.0693 | |||
Weighted Average Life of Outstanding Warrants in Months, Ending Balance | 3 years |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Income Tax Disclosure [Abstract] | |
Net operating loss carry forward amount | $ 20,260,000 |
Net operating loss carry forward expected to expire amount | $ 11,196,261 |
Net operating loss expiration term | 2034 through 2037 |
NOLs usage against taxable income, percentage | 80.00% |
Percentage of ownership change | 50.00% |
NOLs carryforwards term | three-year period |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 3 Months Ended |
Sep. 30, 2021USD ($) | |
Related Party Transactions [Abstract] | |
Commission paid | $ 26,873 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Nov. 04, 2021 | Nov. 03, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Subsequent Event [Line Items] | ||||
Common Stock, Shares Authorized | 350,000,000 | 350,000,000 | ||
Preferred Stock, Shares Authorized | 150,000,000 | 150,000,000 | ||
Series B Preferred Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Common Stock, Shares Authorized | 850,000,000 | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Common Stock, Shares Authorized | 850,000,000 | |||
Preferred Stock, Shares Authorized | 150,000,000 | |||
Subsequent Event [Member] | Series B Preferred Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Received remaining escrow | $ 1,365,000 |