Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Apr. 29, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | Thunder Energies Corp | |
Entity Central Index Key | 0001524872 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Ex transition | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Sep. 30, 2020 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Entity Ex Transition Period | false | |
Entity Common Stock Shares Outstanding | 76,340,735 | |
Entity interactive data current | Yes | |
Incorporation state | FL | |
Entity file number | 000-54464 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash | $ 55,841 | $ 36,060 |
Accounts receivable, net of allowance of $28,700 and $29,548, respectively | 722,063 | 111,011 |
Inventories, net | 52,184 | 57,364 |
Prepaid expenses | 169,985 | 19,382 |
Total current assets | 1,000,073 | 223,817 |
Property and equipment, net | 72,418 | 14,117 |
Intangible assets, net | 75,733 | 0 |
Operating lease right-of-use assets, net | 511,300 | 292,320 |
Other assets | 24,799 | 0 |
Total assets | 1,684,323 | 530,254 |
Current Liabilities | ||
Accounts payable | 41,467 | 233,082 |
Due to related party | 645,842 | 0 |
Loan payable to shareholder | 77,500 | 20,000 |
Customer advance payments | 436,699 | 73,836 |
Derivative liability | 124,215 | 0 |
Convertible notes payable, net of discount of $60,569 and $0, respectively | 143,197 | 0 |
Current portion of operating lease liabilities | 202,474 | 107,388 |
Accrued interest | 221,023 | 0 |
Other current liabilities | 70,239 | 5,819 |
Total current liabilities | 1,962,656 | 440,125 |
Long-term liabilities: | ||
Convertible notes payable, net of discount of $217,288 and $0, respectively | 2,712 | 0 |
Long term notes payable | 201,065 | 0 |
Operating lease liabilities, less current portion | 314,835 | 187,441 |
Total long-term liabilities | 518,612 | 187,441 |
Total liabilities | 2,481,268 | 627,566 |
Stockholders' Deficit | ||
Preferred stock - Series A: $0.001 par value, 50,000,000 authorized; 50,000,000 and 50,000,000 shares issued and outstanding, respectively | 50,015 | |
Common stock: $0.001 par value 900,000,000 authorized; 72,645,255 and 11,544,923 shares issued and outstanding, respectively | 72,645 | 0 |
Additional paid in capital | (1,543,849) | 0 |
Accumulated earnings (deficit) | 624,244 | (97,312) |
Total stockholders' deficit | (796,945) | (97,312) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 1,684,323 | 530,254 |
Series A Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock - Series A: $0.001 par value, 50,000,000 authorized; 50,000,000 and 50,000,000 shares issued and outstanding, respectively | 50,000 | 0 |
Series B Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock - Series A: $0.001 par value, 50,000,000 authorized; 50,000,000 and 50,000,000 shares issued and outstanding, respectively | 5 | 0 |
Series C Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock - Series A: $0.001 par value, 50,000,000 authorized; 50,000,000 and 50,000,000 shares issued and outstanding, respectively | $ 10 | $ 0 |
Condensed Balance Sheets (Una_2
Condensed Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Net of allowance | $ 28,700 | $ 29,548 |
Unamortized discount, current | 60,569 | 0 |
Unamortized discount, noncurrent | $ 217,288 | $ 0 |
Stockholders' Deficit | ||
Common stock, shares par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 900,000,000 | 900,000,000 |
Common stock, shares issued | 72,645,255 | 11,544,923 |
Common stock, shares outstanding | 72,645,255 | 11,544,923 |
Series A Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock, shares par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 50,000,000 | 50,000,000 |
Preferred stock, shares outstanding | 50,000,000 | 50,000,000 |
Series B Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock, shares par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 5,000 | 0 |
Preferred stock, shares outstanding | 5,000 | 0 |
Series C Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock, shares par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 10,000 | 0 |
Preferred stock, shares outstanding | 10,000 | 0 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net revenues | $ 1,296,431 | $ 510,874 | $ 6,577,162 | $ 1,747,931 |
Cost of sales | 383,790 | 559,365 | 3,743,271 | 1,460,231 |
Gross Profit | 912,641 | (48,491) | 2,833,891 | 287,700 |
Operating expenses: | ||||
Advertising and marketing expenses | 151,600 | 130,239 | 325,245 | 222,114 |
General and administrative | 605,977 | 103,687 | 1,502,877 | 232,765 |
Total operating expenses | 757,577 | 233,926 | 1,828,122 | 454,879 |
Profit (loss) from operations | 155,064 | (282,417) | 1,005,769 | (167,179) |
Other expense (income) | ||||
Change in derivative liability | 21,480 | 0 | 21,480 | 0 |
Accretion of debt discount | 61,262 | 0 | 61,262 | 0 |
Interest expense | 117,494 | 0 | 147,471 | 0 |
Other expense | 56,500 | 0 | 61,000 | 0 |
Other income | 0 | 0 | (7,000) | 0 |
Total other expense | 256,736 | 0 | 284,213 | 0 |
Profit (loss) before income taxes | (101,672) | (282,417) | 721,556 | (167,179) |
Income taxes | 0 | 0 | 0 | 0 |
Net profit (loss) | $ (101,672) | $ (282,417) | $ 721,556 | $ (167,179) |
Basic and diluted loss per share * | $ 0 | $ (0.04) | $ 0.03 | $ (0.02) |
Weighted average number of shares outstanding | ||||
Basic and diluted | 43,297,429 | 7,967,761 | 22,128,575 | 6,853,955 |
Condensed Statements of Changes
Condensed Statements of Changes in Stockholders Deficit (Unaudited) - USD ($) | Members equity | Series A Preferred Stock | Series B Preferred Stock | Series C Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2018 | ||||||||
Beginning balance, value at Dec. 31, 2018 | ||||||||
Net loss | 300,098 | 300,098 | ||||||
Ending balance, shares at Mar. 31, 2019 | ||||||||
Ending balance, value at Mar. 31, 2019 | 300,098 | 300,098 | ||||||
Members' investment | 21,513 | 21,513 | ||||||
Net loss | (184,860) | (184,860) | ||||||
Ending balance, shares at Jun. 30, 2019 | ||||||||
Ending balance, value at Jun. 30, 2019 | 21,513 | 115,238 | 136,751 | |||||
Members' investment | 211,841 | 211,841 | ||||||
Net loss | (282,417) | (282,417) | ||||||
Ending balance, shares at Sep. 30, 2019 | ||||||||
Ending balance, value at Sep. 30, 2019 | 233,354 | (167,179) | 66,175 | |||||
Beginning balance, shares at Dec. 31, 2019 | ||||||||
Beginning balance, value at Dec. 31, 2019 | (97,312) | (97,312) | ||||||
Acquisition of common shares in exchange for due to related party | (750,000) | (750,000) | ||||||
Members' distribution | (32,011) | (32,011) | ||||||
Net loss | 179,531 | 179,531 | ||||||
Ending balance, shares at Mar. 31, 2020 | ||||||||
Ending balance, value at Mar. 31, 2020 | (782,011) | 82,219 | (699,792) | |||||
Members' distribution | (556,180) | (556,180) | ||||||
Net loss | 643,697 | 643,697 | ||||||
Ending balance, shares at Jun. 30, 2020 | ||||||||
Ending balance, value at Jun. 30, 2020 | (1,338,191) | 725,916 | (612,275) | |||||
Acquisition of business, shares | 50,000,000 | 5,000 | 10,000 | 12,645,255 | ||||
Acquisition of business, value | 1,338,191 | $ 50,000 | $ 5 | $ 10 | $ 12,645 | (1,811,435) | (410,584) | |
Common shares issued for acquisition, shares | 60,000,000 | |||||||
Common shares issued for acquisition, value | $ 60,000 | 60,000 | ||||||
Liability paid by shareholder | 47,586 | 47,586 | ||||||
Debt discount issued in conjunction with debt | 220,000 | 220,000 | ||||||
Net loss | (101,672) | (101,672) | ||||||
Ending balance, shares at Sep. 30, 2020 | 50,000,000 | 5,000 | 10,000 | 72,645,255 | ||||
Ending balance, value at Sep. 30, 2020 | $ 50,000 | $ 5 | $ 10 | $ 72,645 | $ (1,543,849) | $ 624,244 | $ (796,945) |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 721,556 | $ (167,179) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation expense | 6,411 | 656 |
Amortization expense | 1,817 | 0 |
Accretion of debt discount | 61,262 | 0 |
Change in fair value of derivative instrument | 21,480 | 0 |
Bad debt expense | (848) | 0 |
Change in assets and liabilities: | ||
Accounts receivable | (610,204) | (222,501) |
Inventories, net | 5,180 | 0 |
Prepaid expenses | (94,103) | 0 |
Other current assets | (24,799) | 0 |
Accounts payable | (191,615) | 233,038 |
Customer advance payments | 362,863 | 0 |
Accrued interest | 147,371 | 0 |
Other current liabilities | 113,956 | 949 |
Net cash provided by (used in) operating activities | 520,327 | (155,037) |
Cash flows from investing activities: | ||
Purchase of intangible assets | (77,550) | 0 |
Purchases of equipment | (64,712) | (13,676) |
Net cash used in investing activities | (142,262) | (13,676) |
Cash flows from financing activities: | ||
Advances from shareholder, net | 57,500 | (29,411) |
Proceeds from short term notes payable | 221,065 | 0 |
Repayments of short term notes payable | (20,000) | 0 |
Proceeds from related party | 182,599 | 0 |
Repayments of due to related party | (286,757) | 15,000 |
Proceeds from short term convertible notes payable | 220,000 | 0 |
Contributions to members, net | (732,691) | 233,355 |
Net cash provided by (used in) financing activities | (358,284) | 218,944 |
Net increase in cash | 19,781 | 50,231 |
Cash Beginning of period | 36,060 | 0 |
Cash End of period | 55,841 | 50,231 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 0 | 0 |
Cash paid for taxes | 0 | 0 |
Non-cash transactions: | ||
Acquisition of common shares in exchange for due to related party | 750,000 | 0 |
Debt discount issued in conjunction with debt | 220,000 | 0 |
Common shares issued for acquisition | 60,000 | 0 |
Liability paid by founder | $ 47,586 | $ 0 |
1. NATURE OF BUSINESS
1. NATURE OF BUSINESS | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS | NOTE 1 – NATURE OF BUSINESS Corporate History and Background Thunder Energies Corporation (“we”, “us”, “our”, “TEC” or the “Company”) was incorporated in the State of Florida on April 21, 2011. On July 29, 2013, the Company filed with the Florida Secretary of State, Articles of Amendment to its Articles of Incorporation (the “Amendment”) which changed the name of the Company from CCJ Acquisition Corp. to Thunder Fusion Corporation. The Amendment also changed the principal office address of the Company to 150 Rainville Road, Tarpon Springs, Florida 34689. On May 1, 2014, the Company filed with the Florida Secretary of State, Articles of Amendment to its Articles of Incorporation (the “Amendment”) which changed the name of the Company from Thunder Fusion Corporation to Thunder Energies Corporation. The Company subsequently changed its principal office address to 3017 Greene St., Hollywood, Florida 33020. Acquisition of TNRG Preferred Stock On July 1, 2020, Yogev Shvo, a third party individual and principal shareholder of Nature Consulting LLC (“Nature” or “Purchaser”) personally acquired 100% of the issued and outstanding shares of preferred stock (the “Preferred Stock”) of TNRG from Saveene Corporation, a Florida corporation (the “Seller”) (The “Purchase”). The purchase price of $250,000 for the Preferred Stock was paid in cash and The Preferred Stock acquired by the Purchaser consisted of: 1. 50,000,000 shares of Series A Convertible Preferred Stock wherein each share is entitled to fifteen (15) votes and converts into ten (10) shares of the Company’s common stock. 2. 5,000 shares of Series B Convertible Preferred Stock wherein each share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. 3. 10,000 shares of Series C Non-Convertible Preferred Stock wherein each share is entitled to one thousand (1,000) votes and is non-convertible into shares of the Company’s common stock. Acquisition of Assets of Nature On August 14, 2020 (the “Closing Date”), TNRG and the members of Nature entered into an Interest Purchase Agreement (the “Interest Purchase Agreement”), which closed on the same date. Pursuant to the terms of the Interest Purchase Agreement, the members of Nature sold all of their membership interests in Nature to TNRG in exchange for sixty million (60,000,000) shares of TNRG’s Common Stock. As a result of this transaction, Nature became a wholly-owned subsidiary of TNRG. The Interest Purchase Agreement contained customary representations and warranties and pre- and post-closing covenants of each party and customary closing conditions. Breaches of the representations and warranties will be subject to customary indemnification provisions, subject to specified aggregate limits of liability. The membership Interest Purchase Agreement will be treated as an asset acquisition by the Company for financial accounting purposes. Nature will be considered the acquirer for accounting purposes, and the historical financial statements of Nature, before the membership exchange will replace the historical financial statements of TNRG before the membership exchange and in all future filings with the SEC. Immediately following the Interest Purchase Agreement, the business of Nature became TNRG’s main operation. Nature is the premier source of turnkey CBD and Hemp extract solutions. The Company was formed on January 19, 2019. Description of Business, Principal Products, Services Nature Consulting LLC’s Mission Our mission is to be the leading seed-to-sale manufacturer and supplier of high-quality CBD and hemp products in the industry. We have identified the following issues as our critical drivers: 1. Strong Research and Development- Nature’s team is focused on delivering cutting edge, innovative research and development practices that keep it ahead of the competition while it focuses on creating new and exciting formulations, extraction methods, and product categories. 2. Quality Products & Processes- Nature’s products are manufactured using only the best ingredients meeting the highest specifications for purity, potency, and quality, ensuring consistency in its premium CBD and hemp. 3. Supply Chain Control- Nature controls the entire production process, from the farm to the final process. By handling every step along the way, the Company ensures a streamlined, seamless, reliable supply chain. Nature Consulting LLC’s Product Portfolio On August 14, 2020, we announced the closing of the acquisition of Nature. Nature manufactures, markets and distributes U.S. hemp-derived supplements and cosmetic products through e-commerce and wholesale distribution in the U.S. under the brand The Hemp Plug. The Company has prepared its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). |
2. BASIS OF PRESENTATION
2. BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | NOTE 2 – BASIS OF PRESENTATION The accompanying interim unaudited condensed financial statements (“Interim Financial Statements”) of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and are presented in accordance with the requirements of Rule 10-01 of Regulation S-X. Accordingly, these Interim Financial Statements do not include all of the information and notes required by GAAP for complete financial statements. These Interim Financial Statements should be read in conjunction with the financial statements and notes thereto for the period January 19, 2019 (date of formation) to December 31, 2019 included in the Form 8-K filed with the SEC on March 5, 2021. In the opinion of management, the Interim Financial Statements included herein contain all adjustments, including normal recurring adjustments, considered necessary to present fairly the Company’s financial position, the results of operations and cash flows for the periods presented. The operating results and cash flows of the interim periods presented herein are not necessarily indicative of the results to be expected for any other interim period or the full year. The Company currently operates in one business segment. The Company is not organized by market and is managed and operated as one business. A single management team reports to the chief operating decision maker, the Chief Executive Officer, who comprehensively manages the entire business. The Company does not currently operate any separate lines of businesses or separate business entities. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. Going Concern The Company had accumulated earnings of approximately $624,000 at September 30, 2020, had a working capital deficit of approximately $963,000 at September 30, 2020, had net loss of approximately $102,000 and approximately $282,000 for the three months ended September 30, 2020 and 2019, respectively, net income of approximately $722,000 and a net loss of $167,000 for the nine months ended September 30, 2020 and 2019, respectively, and net cash provided by operating activities of approximately $520,000 for the nine months ended September 30, 2020 and net cash used in operating activities of approximately $155,000 for the nine months ended September 30, 2019, with limited revenue earned since inception, and a lack of operational history. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating cost and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company include, obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans. There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The condensed financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
3. SUMMARY OF SIGNIFICANT ACCOU
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to GAAP and have been consistently applied in the preparation of the financial statements. Use of Estimates The preparation of these financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses during the reported periods. Actual results may differ from those estimates and such differences may be material to the financial statements. The more significant estimates and assumptions by management include among others: inventory valuation, amortization of intangible assets, depreciation of property and equipment, allowance for doubtful accounts, the recoverability of intangibles, derivative valuation, and lease asset amortization. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. Reverse Stock Split On May 14, 2019, the Board of Directors of the Company approved Articles of Amendment to the Company’s Articles of Incorporation that provided for a 1 for 20 reverse stock split of the Company’s Common Stock. The Company’s Articles of Amendment were filed with the Secretary of State of the State of Florida on May 17, 2019. The effective date of the reverse stock split was subject to approval by FINRA, and the reverse stock split was published to the market and effective on June 24, 2019. At the effective time of the reverse stock split, every 20 issued and outstanding shares of the Company’s Common Stock were automatically combined into one issued and outstanding share of common stock, without any change in the par value per share or number of authorized shares of Common Stock. All share and per share amounts contained in this Quarterly Report on Form 10-Q and the accompanying Financial Statements have been adjusted to reflect the Reverse Stock Split for all prior periods presented. Cash The Company’s cash is held in bank accounts in the United States and is insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The Company has not experienced any cash losses. Accounts Receivable Accounts receivable are non-interest-bearing obligations due under normal course of business. Management reviews accounts receivable on a monthly basis to determine if any receivables will be potentially uncollectible. Historical bad debts and current economic trends are used in evaluating the allowance for doubtful accounts. The Company includes any accounts receivable balances that are determined to be uncollectible in its overall allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available, the Company has an allowance for doubtful accounts of $28,700 and $29,548 as of September 30, 2020 and December 31, 2019, respectively. Cash Flows Reporting The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. Related Parties The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company. Income Taxes As a result of the Company’s Interest Purchase Agreement, the Company converted to a corporation (“Conversion”). Beginning on August 14, 2020, the Company’s results of operations are taxed as a C Corporation. Prior to the Conversion, the Company’s operations were taxed as a limited liability company, whereby the Company elected to be taxed as a partnership and the income or loss was required to be reported by each respective member on their separate income tax returns. Therefore, no provision for income taxes has been provided in the accompanying consolidated financial statements for periods prior to August 14, 2020. The unaudited computation of income taxes included in the Statements of Operations, represents the tax effects that would have been reported had the Company been subject to U.S. federal and state income taxes as a corporation for all periods presented. Taxes are based upon the statutory income tax rates and adjustments to income for estimated permanent differences occurring during each period. Actual rates and expenses could have differed had the Company actually been subject to U.S. federal and state income taxes for all periods presented. Income taxes are accounted for under an asset and liability approach. This process involves calculating the temporary and permanent differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The temporary differences result in deferred tax assets and liabilities, which would be recorded on the Balance Sheets in accordance with ASC 740, which established financial accounting and reporting standards for the effect of income taxes. The likelihood that its deferred tax assets will be recovered from future taxable income must be assessed and, to the extent that recovery is not likely, a valuation allowance is established. Changes in the valuation allowance in a period are recorded through the income tax provision in the consolidated Statements of Operations. ASC 740-10-30 was adopted from the date of its inception. ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s consolidated financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740-10, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740-10 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a result of the implementation of ASC 740-10 and currently, the Company does not have a liability for unrecognized income tax benefits. Advertising and Marketing Expenses Advertising and marketing expenses are recorded as marketing expenses when they are incurred. Advertising and marketing expense was $151,600 and $325,245, and $130,239 and $222,114 for the three and nine months ended September 30, 2020 and 2019, respectively. Revenue Recognition On January 19, 2019 (date of formation), the Company adopted Accounting Standards Codification ASC 606 (“ASC 606”), Revenue from Contracts with Customers The Company generates all of its revenue from contracts with customers. The Company recognizes revenue when we satisfy a performance obligation by transferring control of the promised services to a customer in an amount that reflects the consideration that we expect to receive in exchange for those services. The Company determines revenue recognition through the following steps: 1. Identification of the contract, or contracts, with a customer. 2. Identification of the performance obligations in the contract. 3. Determination of the transaction price. 4. Allocation of the transaction price to the performance obligations in the contract 5. Recognition of revenue when, or as, we satisfy a performance obligation. At contract inception, the Company assesses the services promised in our contracts with customers and identifies a performance obligation for each promise to transfer to the customer a service (or bundle of services) that is distinct. To identify the performance obligations, the Company considers all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. The Company allocates the entire transaction price to a single performance obligation. A description of our principal revenue generating activities are as follows: Other sales Mask sales The Company evaluates whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. Generally, when the Company is primarily obligated in a transaction, are subject to inventory risk, have latitude in establishing prices and selecting suppliers, or have several but not all of these indicators, revenue is recorded at the gross sale price. The Company generally records the net amounts as commissions earned if we are not primarily obligated and do not have latitude in establishing prices. Revenue is recognized when the product is shipped to the customer, provided that collection of the resulting receivable is reasonably assured. The Company primarily provides for no credit terms as it collects a deposit of 50% upon order and requires the remaining 50% be paid before the order is shipped. When credit terms are granted, terms of up to 120 days are provided, based on credit evaluations. No allowance has been provided for uncollectible accounts. Management has evaluated the receivables and believes they are collectible based on the nature of the receivables, historical experience of credit losses, and all other currently available evidence. Discounts are recorded as a reduction of the transaction price. Revenue excludes any amounts collected on behalf of third parties, including sales taxes. Customer Advance Payments Customer advance payments consists of customer orders paid in advance of the delivery of the order. Customer advance payments are classified as short-term as the typical order ships within approximately three weeks of placing the order. Customer advance payments are recognized as revenue when the product is shipped to the customer and all other revenue recognition criteria have been met. Customer advance payments were $436,699 and $73,836, as of September 30, 2020 and December 31, 2019, respectively, which were recognized as revenue during the subsequent period. Customer advance payments are included in current liabilities in the accompanying condensed consolidated Balance Sheets. Inventories The Company manufactures its own products made to order and when completed are shipped to the customer. The Company's inventories are valued by the first-in, first-out ("FIFO") cost method and are stated at the lower of cost or net realizable value. The Company had inventory of $52,184 and $57,364, mostly consisting finished goods, as of September 30, 2020 and December 31, 2019, respectively. Property and Equipment Property and equipment are carried at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets, generally five years. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Fixed assets are examined for the possibility of decreases in value when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Intangible Assets Intangible assets consist primarily of developed technology – website applications. Our intangible assets are being amortized on a straight-line basis over a period of five years. Impairment of Long-lived Assets We periodically evaluate whether the carrying value of property, equipment and intangible assets has been impaired when circumstances indicate the carrying value of those assets may not be recoverable. The carrying amount is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying value is not recoverable, the impairment loss is measured as the excess of the asset’s carrying value over its fair value. There are no impairments as of September 30, 2020 and December 31, 2019. Our impairment analyses require management to apply judgment in estimating future cash flows as well as asset fair values, including forecasting useful lives of the assets, assessing the probability of different outcomes, and selecting the discount rate that reflects the risk inherent in future cash flows. If the carrying value is not recoverable, we assess the fair value of long-lived assets using commonly accepted techniques, and may use more than one method, including, but not limited to, recent third-party comparable sales and discounted cash flow models. If actual results are not consistent with our assumptions and estimates, or our assumptions and estimates change due to new information, we may be exposed to an impairment charge in the future. Leases In accordance with ASC 842, Leases Fair Value of Financial Instruments The provisions of accounting guidance, FASB Topic ASC 825 requires all entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of September 30, 2020, the fair value of cash, accounts receivable, accounts payable, accrued expenses, and notes payable approximated carrying value due to the short maturity of the instruments, quoted market prices or interest rates which fluctuate with market rates. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities. • Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. There were no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. There have been no transfers between levels. The derivatives are evaluated under the hierarchy of ASC 480-10, ASC Paragraph 815-25-1 and ASC Subparagraph 815-10-15-74 addressing embedded derivatives. The fair value of the Level 3 financial instruments was performed internally by the Company using Monte Carlo valuation method. The following table summarize the Company’s fair value measurements by level at September 30, 2020 for the assets measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Derivative liability $ – $ – $ 124,215 The following table summarize the Company’s fair value measurements by level at December 31, 2019 for the assets measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Derivative liability $ – $ – $ - The carrying values of the Company’s financial instruments, including cash, other current assets, accounts payable, accruals, and other current liabilities approximate their fair values due to the short period of time to maturity or repayment. Debt The Company issues debt that may have separate warrants, conversion features, or no equity-linked attributes. Debt with warrants Convertible debt – derivative treatment If the conversion feature within convertible debt meets the requirements to be treated as a derivative, we estimate the fair value of the convertible debt derivative using Monte Carlo Method upon the date of issuance. If the fair value of the convertible debt derivative is higher than the face value of the convertible debt, the excess is immediately recognized as interest expense. Otherwise, the fair value of the convertible debt derivative is recorded as a liability with an offsetting amount recorded as a debt discount, which offsets the carrying amount of the debt. The convertible debt derivative is revalued at the end of each reporting period and any change in fair value is recorded as a gain or loss in the statement of operations. The debt discount is amortized through interest expense over the life of the debt. Convertible debt – beneficial conversion feature If the conversion feature does not qualify for either the derivative treatment or as a BCF, the convertible debt is treated as traditional debt. Earnings per Share The unaudited computation of net profit (loss) per share included in the Statements of Operations, represents the net profit (loss) per share that would have been reported had the Company been subject to ASC 260, “Earnings Per Share as a corporation for all periods presented. Diluted earnings (loss) per share are computed on the basis of the weighted average number of common shares (including common stock subject to redemption) plus dilutive potential common shares outstanding for the reporting period. In periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. The total number of potential additional dilutive securities outstanding for the three and nine months ended September 30, 2020 and 2019, was none since the Company had net losses and any additional potential common shares would have an anti-dilutive effect. The following potentially dilutive securities were excluded from the calculation of diluted net loss per share because the effects were anti-dilutive based on the application of the treasury stock method and because the Company incurred net losses during the period: September 30, 2020 December 31, 2019 Options to purchase shares of common stock – – Series A convertible preferred stock 50,000,000 50,000,000 Series B convertible preferred stock 5,000,000 – Series C convertible preferred stock 10,000,000 – Total potentially dilutive shares 65,000,000 50,000,000 Commitments and Contingencies The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no known commitments or contingencies as of September 30, 2020 and December 31, 2019. Concentrations, Risks, and Uncertainties Business Risk Substantial business risks and uncertainties are inherent to an entity, including the potential risk of business failure. The Company is headquartered and operates in the United States. To date, the Company has generated limited revenues from operations. There can be no assurance that the Company will be able to successfully continue to produce its products and failure to do so would have a material adverse effect on the Company’s financial position, results of operations and cash flows. Also, the success of the Company’s operations is subject to numerous contingencies, some of which are beyond management’s control. These contingencies include general economic conditions, price of raw material, competition, and governmental and political conditions. Interest rate risk Financial assets and liabilities do not have material interest rate risk. Credit risk The Company is exposed to credit risk from its cash in banks and accounts receivable. The credit risk on cash in banks is limited because the counterparties are recognized financial institutions. There was one customer that accounted for 10%, comprising 18.8% and 25.3%, or more of total revenue for the nine months ended September 30, 2020 and 2019. There were no customers that accounted for 10% or more of total revenue for the three months ended September 30, 2020. There were two customers that accounted for 10%, comprising 30.2%, or more of total revenue for the three months ended September 30, 2019. There was one customer that comprised 10%, comprising 96.0%, or more of accounts receivable at September 30, 2020. There were no customers that comprised 10% or more of accounts receivable at September 30, 2019. Seasonality The business is not subject to seasonal fluctuations. However, as a result of the COVID 19 pandemic, in 2020, the Company entered into the sale of KN95 masks but had to dispose of them at a loss. Major Suppliers In producing our supplement products, we source our ingredients from our suppliers on an ongoing as-needed basis. We have not entered into any contracts that obligate us to purchase a minimum quantity or exclusively from any food service distributor. Our supplements are manufactured at our facilities in Hollywood, Florida. We rely on a variety of suppliers. Should the relationship with an industry vendor be interrupted or discontinued, it is believed that alternate component suppliers could be identified to support the continued advancement of the Company. There were no suppliers that accounted for 10% or more of total expenditures for the nine months ended September 30, 2020. There were three suppliers that accounted for 10% or more, comprising 69.8% of total expenditures for the nine months ended September 30, 2019. There were no suppliers that accounted for 10% or more of total expenditures for the three months ended September 30, 2020. There were two suppliers that accounted for 10% or more, comprising 67.8% of total expenditures for the three months ended September 30, 2019. There were four suppliers that accounted for 67.2% of accounts payable at September 30, 2020 and one supplier that accounted for 78.4% of accounts payable at September 30, 2019. Recent Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes. Income Taxes Other recently issued accounting updates are not expected to have a material impact on the Company’s consolidated financial statements. |
EQUIPMENT
EQUIPMENT | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
EQUIPMENT | NOTE 4 – Equipment Equipment consisted of the following as of: Estimated Life September 30, 2020 December 31, 2019 Office equipment and furniture 5 years $ 21,782 $ 9,316 Computer equipment 3 years 23,455 6,424 Machinery and equipment 5 years 15,724 – Leasehold Improvements Shorter of the estimated useful life or lease term 19,491 – Accumulated depreciation (8,034 ) (1,623 ) $ 72,418 $ 14,117 Depreciation expense was $3,222 and $6,411 for the three and nine months ended September 30, 2020, respectively, and $656 and $656 for the three and nine months ended September 30, 2019, respectively, and is classified in general and administrative expenses in the Statements of Operations. |
5. INTANGIBLE ASSETS
5. INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 5 – INTANGIBLE ASSETS Intangible assets consisted of the following as of: Estimated Life September 30, 2020 December 31, 2019 Website 5 years $ 77,550 $ – Accumulated amortization (1,817 ) – $ 75,733 $ – Amortization Year ending: Expense 2020 (remaining six months) $ 3,878 2021 15,510 2022 15,510 2023 15,510 2024 15,510 Thereafter 9,815 Total amortization $ 75,733 Amortization expense was $1,207 and $1,817 for the three and none months ended September 30, 2020, respectively, and $0 and $0 for the three and nine months ended September 30, 2019, respectively, and is classified in general and administrative expenses in the Statements of Operations. |
6. DEBT TO FORMER SHAREHOLDER
6. DEBT TO FORMER SHAREHOLDER | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | |
DEBT TO FORMER SHAREHOLDER | NOTE 6 – DEBT TO FORMER SHAREHOLDER Om March 1, 2020, the members’ of Nature entered into the Ownership Interest Purchase Agreement (“Ownership Agreement”) whereby Yogev Shvo, a member of the Company, acquired the remaining 50% member ownership (“Seller”) giving Mr. Shvo 100% member ownership of the Company. As consideration for the Ownership Agreement, the Seller received a Promissory Note of $750,000. The Promissory Note bears interest at 15% per annum and matures March 1, 2021. During the nine months ended September 30, 2020, the Company made repayments of $269,257 for a balance of $480,743 as of September 30, 2020. As of the date of this filing, the Company has made repayments totaling $484,257 for a balance of $265,743. The Note is secured with the assets of the Company pursuant to a security agreement dated March 1, 2020. In addition, the Company’s Chairman has personally guaranteed the Note. The Company borrows funds from related parties for working capital purposes from time to time. The Company has recorded the principal balance due of $165,099 under Due to Related Parties in the accompanying Balance Sheet at September 30, 2020. The Company received advances of $182,599 and made repayments of $17,500 for the nine months ended September 30, 2020. Advances are non-interest bearing and due on demand. |
7. LOANS PAYABLE
7. LOANS PAYABLE | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE | NOTE 7 – LOANS PAYABLE Loan Payable to Shareholder The Company borrows funds from its shareholders from time to time for working capital purposes. As of December 31, 2019, the Company had outstanding borrowings of $20,000. During the nine months ended September 30, 2020, the Company had additional borrowings of $77,500 and made repayments of $20,000 for a balance of $77,500 at September 30, 2020. Advances are non-interest bearing and due on demand. Economic Injury Disaster Loan On May 14, 2020, the Company executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the SBA under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business. Pursuant to that certain Loan Authorization and Agreement (the “SBA Loan Agreement”), the Company borrowed an aggregate principal amount of the EIDL Loan of $150,000, with proceeds to be used for working capital purposes. Interest accrues at the rate of 3.75% per annum and will accrue only on funds actually advanced from the date of each advance. Installment payments, including principal and interest, are due monthly beginning May 14, 2021 (twelve months from the date of the SBA Note) in the amount of $731. The balance of principal and interest is payable thirty years from the date of the SBA Note. In connection therewith, the Company also received a $7,000 grant, which does not have to be repaid. During the three and nine months ended September 30, 2020, the $0 and $7,000, respectively, was recorded in Other Income in the Statements of Operations. In connection therewith, the Company executed (i) a note for the benefit of the SBA (the “SBA Note”), which contains customary events of default and (ii) a Security Agreement, granting the SBA a security interest in all tangible and intangible personal property of the Company, which also contains customary events of default (the “SBA Security Agreement”). Paycheck Protection Program Loan On May 6, 2020, the Company executed a note (the “PPP Note”) for the benefit of TD Bank, N.A. (the “Lender”) in the aggregate amount of $51,065 under the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The PPP is administered by the U.S. Small Business Administration (the “SBA”). The interest rate of the loan is 1.00% per annum and accrues on the unpaid principal balance computed on the basis of the actual number of days elapsed in a year of 360 days. Commencing seven months after the effective date of the PPP Note, the Company is required to pay the Lender equal monthly payments of principal and interest as required to fully amortize any unforgiven principal balance of the loan by the two-year anniversary of the effective date of the PPP Note (the “Maturity Date”). The PPP Note contains customary events of default relating to, among other things, payment defaults, making materially false or misleading representations to the SBA or the Lender, or breaching the terms of the PPP Note. The occurrence of an event of default may result in the repayment of all amounts outstanding under the PPP Note, collection of all amounts owing from the Company, or filing suit and obtaining judgment against the Company. Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of the loan granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. Recent modifications to the PPP by the U.S. Treasury and Congress have extended the time period for loan forgiveness beyond the original eight-week period, making it possible for the Company to apply for forgiveness of its PPP loan. No assurance can be given that the Company will be successful in obtaining forgiveness of the loan in whole or in part. The PPP Note of $51,065 was repaid in February 2021. |
8. CONVERTIBLE NOTE PAYABLE
8. CONVERTIBLE NOTE PAYABLE | 9 Months Ended |
Sep. 30, 2020 | |
Convertible Notes Payable [Abstract] | |
CONVERTIBLE NOTE PAYABLE | NOTE 8 – CONVERTIBLE NOTES PAYABLE Convertible Note Payable Short Term On April 22, 2019, the Company executed a convertible promissory note with GHS Investments, LLC (“GHS Note”). The GHS Note carries a principal balance of $57,000 together with an interest rate of eight (8%) per annum and a maturity date of February 21, 2020. All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share) in accordance with the terms of the note agreement shall be made in lawful money of the United States of America. Any amount of principal or interest on this GHS Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid. As of December 31, 2019, the principal balance outstanding was $57,000. The holder shall have the right from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of this note, to convert all or any part of the outstanding and unpaid principal amount into Common Stock. The conversion shall equal sixty-five percent (65%) of the lowest trading prices for the Common Stock during the twenty (20) day trading period ending on the latest complete trading day prior to the conversion date, representing a discount rate of thirty-five percent (35%). On March 24, 2020, the note obligation of $120,766 held by Emry was partially sold $35,000 of the face amount to the preferred shareholder Saveene. On March 24, 2020, Saveene converted the $35,000 purchase into 5,000 shares into series B and 10,000 shares of series C shares. The face amount of the Company note obligation post the aforementioned conversions and purchases is $85,766 as of December 31, 2020. As a result of the failure to timely file our Form 10-Q for the three month period ended September 30, 2020, the Convertible Notes Payable were in default. The Company is currently in discussions to restructure the terms of the note . Long Term On September 21, 2020, the Company issued a convertible promissory note in the principal amount of $220,000. The convertible promissory note bears interest at 8% per annum and is due and payable in twenty-four (24) months. The holder of this note has the right, at the holder's option, upon the consummation of a sale of all or substantially all of the equity interest in the Company or private placement transaction of the Company's equity securities or securities convertible into equity securities, exclusive of the conversion of this note or any similar notes, to convert the principal amount of this note, in whole or in part, plus any interest which accrues hereon, into fully paid and nonassessable shares at a conversion price of $0.05 per share. The Note includes customary events of default, including, among other things, payment defaults, covenant breaches, certain representations and warranties, certain events of bankruptcy, liquidation and suspension of the Company’s Common Stock from trading. If such an event of default occurs, the holders of the Note may be entitled to take various actions, which may include the acceleration of amounts due under the Note and accrual of interest as described above. The Company analyzed the conversion option in the notes for derivative accounting treatment under ASC Topic 815, “Derivatives and Hedging,” and determined that the instrument does not qualify for derivative accounting. The Company therefore performed an analysis to determine if the conversion option was subject to a beneficial conversion feature (“BCF”) and determined that the instrument does have a BCF. A BCF exists if the conversion price of the convertible debt instrument is less than the stock price on the commitment date. This typically occurs when the conversion price is less than the fair value of the stock on the date the instrument was issued. The value of a BCF is equal to the intrinsic value of the feature, the difference between the conversion price and the common stock into which it is convertible, and is recorded as additional paid in capital and as a debt discount in the Balance Sheet. As such, the proceeds of the notes were allocated, based on fair values, as $220,000 to the debt discount. The debt discount is accreted over the term of the convertible notes to interest expense in the accompanying condensed consolidated Statements of Operations. The principal balance due at September 30, 2020 is $220,000 and is presented as a long term liability in the balance sheet of $2,712, net of unamortized debt discount of $217,288. As a result of the failure to timely file our Form 10-Q for the three month period ended September 30, 2020, the Convertible Notes Payable were in default. On October 30, 2020, the Company entered into a Waiver Agreement (the “Agreement”) waiving the default provisions listed in the Notes related to the Company’s failure to timely file its Form 10-Q for the three month period ended September 30, 2020. Promissory Debenture On February 15, 2020 and on May 14, 2020, the Company entered into Promissory Agreement and Convertible Debentures (“Promissory Debentures”) with Emry for a principal sum of $70,000 (which was paid in two tranches: $50,000, paid on February 15, 2020, and $20,000, paid in April 2020) and $48,000 (which was paid in three tranches: $23,000, paid on May 14, 2020, $15,000, paid on May 22, 2020, and $10,000, paid on June 8, 2020), respectively. The Promissory Debentures bear interest, both before and after default, at 15% per month, calculated and compounded monthly. At the election of the holder, at any time during the period between the date of issuance and the one year anniversary of the Promissory Debentures, the Promissory Debentures are convertible into shares of the Company’s common stock at any time at a conversion price of $0.001 per share. In addition, the Promissory Debentures provide for an interest equal to 15% of the TNRG annual sales, payable on the 2 nd On June 24, 2020, Emry, holder of (i) Promissory Debentures in principal amount of $70,000 dated February 15, 2020, and (ii) that certain convertible promissory note in principal amount of $57,000 dated April 22, 2019, sold 50% of each (Promissory Debentures and convertible promissory note), including accrued and unpaid interest, fees and penalties, in separate transactions to third party companies, SP11 Capital Investments and E.L.S.R. CORP, Florida companies, such that SP11 Capital Investments and E.L.S.R. CORP each hold 50% of each respective debt instrument. On October 4, 2020, SP11 converted $35,000 of its Promissory Debentures at $0.01 per share into 3,500,000 shares of the Company’s common stock. The Company accounts for this embedded conversion feature as a derivative under ASC 815-10-15-83 and valued separately from the note at fair value. The embedded conversion feature of the note is revalued at each subsequent reporting date at fair value and any changes in fair value will result in a gain or loss in those periods. The Company recorded derivative liability of $102,735 and $0 during the nine months ended September 30, 2020 and 2019, respectively, recorded a change in derivative liability of $21,480 and $21,480, and $0 and $0 during the three and nine months ended September 30, 2020 and 2019, respectively and has $124,215 of unamortized debt discount remaining as of September 30, 2020. As a result of the failure to timely file our Form 10-Q for the three month period ended September 30, 2020, the Promissory Debentures were in default. The Company is currently in discussions to restructure the terms of the note . |
9. STOCKHOLDERS' EQUITY
9. STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 9 – STOCKHOLDERS’ EQUITY Common Stock The Company has been authorized to issue 900,000,000 shares of common stock, $0.001 par value. Each share of issued and outstanding common stock shall entitle the holder thereof to fully participate in all shareholder meetings, to cast one vote on each matter with respect to which shareholders have the right to vote, and to share ratably in all dividends and other distributions declared and paid with respect to common stock, as well as in the net assets of the corporation upon liquidation or dissolution. On May 14, 2019, the Board of Directors of the Company approved Articles of Amendment to the Company’s Articles of Incorporation that provided for a 1 for 20 reverse stock split of the Company’s Common Stock. The Company’s Articles of Amendment were filed with the Secretary of State of the State of Florida on May 17, 2019. All share and per share amounts contained in this Annual Report on Form 10-K and the accompanying Financial Statements have been adjusted to reflect the Reverse Stock Split for all prior periods presented. On August 14, 2020, the Company issued 60,000,000 common shares in conjunction with acquisition (see Note 1). Preferred Stock The Company has been authorized to issue 50,000,000 shares of $0.001 par value Preferred Stock. The Board of Directors is expressly vested with the authority to divide any or all of the Preferred Stock into series and to fix and determine the relative rights and preferences of the shares of each series so established, within certain guidelines established in the Articles of Incorporation. Series A: The certificate of designation for the Preferred A Stock provides that as a class it possesses a number of votes equal to fifteen (15) votes per share and may be converted into ten (10) $0.001 par value common shares. On October 10, 2013, the Company issued fifty million (50,000,000) shares of our Series “A” Convertible Preferred Stock to Hadronic, a Florida corporation maintaining its principal place of business at 35246 US Highway 19 North, Suite #215, Palm Harbor, Florida 34684. Our previous Directors, Dr. Ruggero M. Santilli and Mrs. Carla Santilli each own fifty percent of the equity in Hadronic. The Series “A” Convertible Preferred Stock has 15 votes per share and is convertible into 10 shares of our common stock at the election of the shareholder. Shares were valued at the par value of the common stock equivalents, $500,000. On January 9, 2020, Mina Mar (the “Purchaser”) acquired 50,000,000 shares of Series A Convertible Preferred Stock of the Company from Hadronic. Each share of Preferred Stock is entitled to fifteen (15) votes per share and at the election of the holder converts into ten (10) shares of Company common stock, so at completion of the stock purchase the Purchaser owns approximately 98.6% of the fully diluted outstanding equity securities of the Company and approximately 99% of the voting rights for the outstanding equity securities. The purchase price of $94,766 for the Preferred Stock was paid by the assumption of a Company note obligation of $85,766 by Emry, with the balance paid in cash. The consideration for the purchase was provided to the Purchaser from the private funds of the principal of the Purchaser. The purchase of the Preferred Stock was the result of a privately negotiated transaction and consummation of the purchase resulted in a change of control of the Company. On March 24, 2020, the note obligation of $120,766 held by Emry was partially sold $35,000 of the face amount to the preferred shareholder Saveene. On March 24, 2020, Saveene converted the $35,000 purchase into 5,000 shares into series B and 10,000 shares of series C shares. The face amount of the Company note obligation post the aforementioned conversions and purchases is $85,766. On March 24, 2020, Saveene (“Purchaser”) acquired 50,000,000 shares of Series A Convertible Preferred Stock of Company, from Mina Mar. Each share of Preferred Stock is entitled to fifteen (15) votes per share and at the election of the holder converts into ten (10) shares of Company common stock, so at the completion of the stock purchase, the Purchaser owns approximately 98.6% of the fully diluted outstanding equity securities of the Company and approximately 99% of the voting rights for the outstanding equity securities. The purchase price of $500,000 for the Preferred Stock was paid in cash. The consideration for the purchase was provided to the Purchaser from the private funds of the principal of the Purchaser. The purchase of the Preferred Stock was the result of a privately negotiated transaction and consummation of the purchase resulted in a change of control of the Company. Series B Convertible Preferred Stock was authorized for 10,000,000 shares of the “Company. Each share of Preferred Stock is entitled to one thousand (1,000) votes per share and at the election of the holder converts into one thousand (1,000) shares of Company common stock, so at the completion of the stock purchase, the Purchaser owns approximately 100% of the fully diluted outstanding equity securities of the Company and approximately 100% of the voting rights for the outstanding equity securities. The consideration for the purchase was provided to the Purchaser from the private funds of the principal of the Purchaser. Series C Non-Convertible Preferred Stock was authorized for 10,000,000 shares of the Company. Each share of Preferred Stock is entitled to one thousand (1,000) votes per share and at the election of the holder. The series C is The Purchaser owns approximately 100% of the fully diluted outstanding equity securities of the Company and approximately 100% of the voting rights for the outstanding equity securities. The consideration for the purchase was provided to the Purchaser from the private funds of the principal of the Purchaser. On July 1, 2020, Yogev Shvo, a third party individual and principal shareholder of Nature personally acquired 100% of the issued and outstanding shares of preferred stock (the “Preferred Stock”) of TNRG from Saveene Corporation, a Florida corporation (the “Seller”) (The “Purchase”). The purchase price of $250,000 for the Preferred Stock was paid in cash and The Preferred Stock acquired by the Purchaser consisted of: 1. 50,000,000 shares of Series A Convertible Preferred Stock wherein each share is entitled to fifteen (15) votes and converts into ten (10) shares of the Company’s common stock. 2. 5,000 shares of Series B Convertible Preferred Stock wherein each share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. 3. 10,000 shares of Series C Non-Convertible Preferred Stock wherein each share is entitled to one thousand (1,000) votes and is non-convertible into shares of the Company’s common stock. Change in Control On March 24, 2020, Saveene converted the $35,000 purchase into 5,000 shares of series B and 10,000 shares of series C shares. As a result, t The Company’s stock price on March 24, 2020 was $0.03, giving the Company a value of $0.03 per share times 11,244,923 shares outstanding or $337,348. The transaction was booked to loss on extinguishment of change in control and with the off-setting entry to additional paid-in capital due to it being a related party transaction. |
10. OPERATING LEASES
10. OPERATING LEASES | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
OPERATING LEASES | NOTE 10 – OPERATING LEASES The Company adopted ASC 842 as of December 31, 2019. The Company has an operating lease for the Company’s warehouse and office and accounts for this lease in accordance with ASC 842. Adoption of the standard resulted in the initial recognition of operating lease ROU asset of $ and operating lease liability of $344,203 as of December 31, 2019. Effective July 1, 2019, the Company’s customer service and distribution facility is located at 3017 Greene Street, Hollywood, Florida 33020. This facility is leased in monthly installments of approximately$10,319 plus Florida Sales Tax. The monthly rent shall be increased by four percent (4%) per annum each succeeding lease year. Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives. Our variable lease payments primarily consist of maintenance and other operating expenses from our real estate leases. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components. We have elected to account for these lease and non-lease components as a single lease component. We are also electing not to apply the recognition requirements to short-term leases of twelve months or less and instead will recognize lease payments as expense on a straight-line basis over the lease term. The components of lease expense and supplemental cash flow information related to leases for the period are as follows: In accordance with ASC 842, the components of lease expense were as follows: Nine Months ended September 30, Three Months ended September 30, 2020 2019 2020 2019 Operating lease expense $ 123,243 $ 21,474 $ 58,821 $ 21,474 Short term lease cost 1,797 – 674 – Total lease expense $ 125,040 $ 21,474 $ 59,495 $ 21,474 In accordance with ASC 842, other information related to leases was as follows: Nine Months ended September 30, 2020 Operating cash flows from operating leases $ 123,243 Cash paid for amounts included in the measurement of lease liabilities $ 123,243 Weighted-average remaining lease term—operating leases 2.6 years Weighted-average discount rate—operating leases 8% In accordance with ASC 842, maturities of operating lease liabilities as of June 30, 2020 were as follows: Year ending: Operating Lease 2020 (remaining three months) $ 58,251 2021 236,228 2022 170,668 2023 106,815 Total undiscounted cash flows $ 571,962 Reconciliation of lease liabilities: Weighted-average remaining lease terms 2 years Weighted-average discount rate 8% Present values $ 517,309 Lease liabilities—current 202,474 Lease liabilities—long-term 314,835 Lease liabilities—total $ 517,309 Difference between undiscounted and discounted cash flows $ 54,653 Operating lease cost was $58,821 and $123,243, and $21,474 and $21,474 for the three and nine months ended September 30, 2020 and 2019, respectively. |
11. RELATED PARTY TRANSACTIONS
11. RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11 – Related Party Transactions Other than as set forth below, and as disclosed in Notes 6, 7, 9, and 11, there have not been any transaction entered into or been a participant in which a related person had or will have a direct or indirect material interest. |
12. COMMITMENTS AND CONTINGENCI
12. COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 – COMMITMENTS AND CONTINGENCIES Legal From time to time, various lawsuits and legal proceedings may arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any legal proceedings or claims that it believes will have a material adverse effect on its business, financial condition or operating results, except as disclosed in Note 9, Subsequent Events. Guarantees T he Co ny ' s Promissory Note is co at a ze y s b s ta t a y of e Com a y ' s a s se s a is pe so l y g ua nte e d y e Co pan y ' s Chairman . Employment Contracts The Company has no employment contracts with its key employees. |
13. SUBSEQUENT EVENTS
13. SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 – SUBSEQUENT EVENTS The Company evaluated all events or transactions that occurred after September 30, 2020 up through the date the financial statements were available to be issued. During this period, the Company did not have any material recognizable subsequent events required to be disclosed as of and for the period ended September 30, 2020 except for the following: Common Stock On October 13, 2020, the Company issued 195,480 common shares, valued at $33,232 (based on the Company’s stock price on the date of issuance), to GHS Investments in settlement of services provided to the Company. On October 4, 2020, SP11 converted $35,000 of its Promissory Debentures at $0.01 per share into 3,500,000 shares of the Company’s common stock. Convertible Note Payable On October 9 and October 16, 2020, the Company issued a convertible promissory note in the principal amount totaling $600,000. The convertible promissory note bears interest at 8% per annum and is due and payable in twenty-four (24) months. The holder of this note has the right, at the holder's option, upon the consummation of a sale of all or substantially all of the equity interest in the Company or private placement transaction of the Company's equity securities or securities convertible into equity securities, exclusive of the conversion of this note or any similar notes, to convert the principal amount of this note, in whole or in part, plus any interest which accrues hereon, into fully paid and nonassessable shares at a conversion price of $0.05 per share. The Note includes customary events of default, including, among other things, payment defaults, covenant breaches, certain representations and warranties, certain events of bankruptcy, liquidation and suspension of the Company’s Common Stock from trading. If such an event of default occurs, the holders of the Note may be entitled to take various actions, which may include the acceleration of amounts due under the Note and accrual of interest as described above. The Company will analyze the conversion option in the notes for derivative accounting treatment under ASC Topic 815, “Derivatives and Hedging,” and determine if the instrument qualifies for derivative accounting. As a result of the failure to timely file our Form 10-Q for the three month period ended September 30, 2020, the Convertible Notes Payable were in default. On October 30, 2020, the Company entered into a Waiver Agreement (the “Agreement”) waiving the default provisions listed in several of the Notes related to the Company’s failure to timely file its Form 10-Q for the three month period ended September 30, 2020. The remaining Notes are in default and the Company is currently in discussions to restructure the terms of these Notes. Paycheck Protection Program Loan Round 2 On April 2, 2021, the Company executed a note (the “PPP Note”) for the benefit of First Federal Bank (the “Lender”) in the aggregate amount of $200,000 under the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) through a second draw. The PPP is administered by the U.S. Small Business Administration (the “SBA”). The terms of the second draw have the same general loan terms as the first draw PPP loan. Lawsuit On November 3, 2020, First Capital Venture Co., a subsidiary of the client, d/b/a Diamond CBD, filed a civil complaint against Thunder Energies Corporation (the “Defendants”), in the pending 17th Judicial Circuit Court in and for Broward County, Florida, (the “Florida Court”), Case Number CACE-20-019111 (the “Complaint”). On January 26, 2021 Plaintiffs were erroneously granted an Order of Default to which the Defendants immediately pointed out to the Court and on February 23, 2021 an Order Vacating the Default was granted in favor of the Defendants. The Plaintiff knew, or should have known, that the Order of Default was not valid but they proceeded on February 9, 2021 to publish false and misleading press releases. Thunder Energies Corporation is proceeding through discovery and is of the belief the suit will be decided in their favor. A pending Motion to Dismiss is before the Court. Plaintiff’s Complaint is based on a claim for tortious interference and misappropriation of trade secrets. Neither claim is supported by the Complaint. Thunder Energies Corporation has issued a cease and desist to the Plaintiff and is considering a counter claim concerning the false information and disclosures made by the Plaintiff that may have affected the Company’s business and shareholders. The Company is unable to predict the financial outcome of this matter at this time, and any views formed as to the viability of these claims or the financial exposure which could result may change from time to time as the matter proceeds through its course. Accordingly, adjustments, if any, that might result from the resolution of this matter have not been reflected in the consolidated financial statements. However, no assurance can be made that this matter together with the potential for reputational harm, will not result in a material financial exposure, which could have a material adverse effect on the Company's financial condition, results of operations, or cash flows. There were no other events subsequent to September 30, 2020, and up to the date of this filing that would require disclosure. |
3. SUMMARY OF SIGNIFICANT ACC_2
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
USE OF ESTIMATES | Use of Estimates The preparation of these financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses during the reported periods. Actual results may differ from those estimates and such differences may be material to the financial statements. The more significant estimates and assumptions by management include among others: inventory valuation, amortization of intangible assets, depreciation of property and equipment, allowance for doubtful accounts, the recoverability of intangibles, derivative valuation, and lease asset amortization. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. |
REVERSE STOCK SPLIT | Reverse Stock Split On May 14, 2019, the Board of Directors of the Company approved Articles of Amendment to the Company’s Articles of Incorporation that provided for a 1 for 20 reverse stock split of the Company’s Common Stock. The Company’s Articles of Amendment were filed with the Secretary of State of the State of Florida on May 17, 2019. The effective date of the reverse stock split was subject to approval by FINRA, and the reverse stock split was published to the market and effective on June 24, 2019. At the effective time of the reverse stock split, every 20 issued and outstanding shares of the Company’s Common Stock were automatically combined into one issued and outstanding share of common stock, without any change in the par value per share or number of authorized shares of Common Stock. All share and per share amounts contained in this Quarterly Report on Form 10-Q and the accompanying Financial Statements have been adjusted to reflect the Reverse Stock Split for all prior periods presented. |
CASH AND CASH EQUIVALENTS | Cash The Company’s cash is held in bank accounts in the United States and is insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The Company has not experienced any cash losses. |
ACCOUNTS RECEIVABLE | Accounts Receivable Accounts receivable are non-interest-bearing obligations due under normal course of business. Management reviews accounts receivable on a monthly basis to determine if any receivables will be potentially uncollectible. Historical bad debts and current economic trends are used in evaluating the allowance for doubtful accounts. The Company includes any accounts receivable balances that are determined to be uncollectible in its overall allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available, the Company has an allowance for doubtful accounts of $28,700 and $29,548 as of September 30, 2020 and December 31, 2019, respectively. |
CASH FLOWS REPORTING | Cash Flows Reporting The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. |
RELATED PARTIES | Related Parties The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company. |
INCOME TAX | Income Taxes As a result of the Company’s Interest Purchase Agreement, the Company converted to a corporation (“Conversion”). Beginning on August 14, 2020, the Company’s results of operations are taxed as a C Corporation. Prior to the Conversion, the Company’s operations were taxed as a limited liability company, whereby the Company elected to be taxed as a partnership and the income or loss was required to be reported by each respective member on their separate income tax returns. Therefore, no provision for income taxes has been provided in the accompanying consolidated financial statements for periods prior to August 14, 2020. The unaudited computation of income taxes included in the Statements of Operations, represents the tax effects that would have been reported had the Company been subject to U.S. federal and state income taxes as a corporation for all periods presented. Taxes are based upon the statutory income tax rates and adjustments to income for estimated permanent differences occurring during each period. Actual rates and expenses could have differed had the Company actually been subject to U.S. federal and state income taxes for all periods presented. Income taxes are accounted for under an asset and liability approach. This process involves calculating the temporary and permanent differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The temporary differences result in deferred tax assets and liabilities, which would be recorded on the Balance Sheets in accordance with ASC 740, which established financial accounting and reporting standards for the effect of income taxes. The likelihood that its deferred tax assets will be recovered from future taxable income must be assessed and, to the extent that recovery is not likely, a valuation allowance is established. Changes in the valuation allowance in a period are recorded through the income tax provision in the consolidated Statements of Operations. ASC 740-10-30 was adopted from the date of its inception. ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s consolidated financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740-10, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740-10 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a result of the implementation of ASC 740-10 and currently, the Company does not have a liability for unrecognized income tax benefits. |
ADVERTISING AND MARKETING COSTS | Advertising and Marketing Expenses Advertising and marketing expenses are recorded as marketing expenses when they are incurred. Advertising and marketing expense was $151,600 and $325,245, and $130,239 and $222,114 for the three and nine months ended September 30, 2020 and 2019, respectively. |
REVENUE RECOGNITION | Revenue Recognition On January 19, 2019 (date of formation), the Company adopted Accounting Standards Codification ASC 606 (“ASC 606”), Revenue from Contracts with Customers The Company generates all of its revenue from contracts with customers. The Company recognizes revenue when we satisfy a performance obligation by transferring control of the promised services to a customer in an amount that reflects the consideration that we expect to receive in exchange for those services. The Company determines revenue recognition through the following steps: 1. Identification of the contract, or contracts, with a customer. 2. Identification of the performance obligations in the contract. 3. Determination of the transaction price. 4. Allocation of the transaction price to the performance obligations in the contract 5. Recognition of revenue when, or as, we satisfy a performance obligation. At contract inception, the Company assesses the services promised in our contracts with customers and identifies a performance obligation for each promise to transfer to the customer a service (or bundle of services) that is distinct. To identify the performance obligations, the Company considers all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. The Company allocates the entire transaction price to a single performance obligation. A description of our principal revenue generating activities are as follows: Other sales Mask sales The Company evaluates whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. Generally, when the Company is primarily obligated in a transaction, are subject to inventory risk, have latitude in establishing prices and selecting suppliers, or have several but not all of these indicators, revenue is recorded at the gross sale price. The Company generally records the net amounts as commissions earned if we are not primarily obligated and do not have latitude in establishing prices. Revenue is recognized when the product is shipped to the customer, provided that collection of the resulting receivable is reasonably assured. The Company primarily provides for no credit terms as it collects a deposit of 50% upon order and requires the remaining 50% be paid before the order is shipped. When credit terms are granted, terms of up to 120 days are provided, based on credit evaluations. No allowance has been provided for uncollectible accounts. Management has evaluated the receivables and believes they are collectible based on the nature of the receivables, historical experience of credit losses, and all other currently available evidence. Discounts are recorded as a reduction of the transaction price. Revenue excludes any amounts collected on behalf of third parties, including sales taxes. |
CUSTOMER ADVANCE PAYMENTS | Customer Advance Payments Customer advance payments consists of customer orders paid in advance of the delivery of the order. Customer advance payments are classified as short-term as the typical order ships within approximately three weeks of placing the order. Customer advance payments are recognized as revenue when the product is shipped to the customer and all other revenue recognition criteria have been met. Customer advance payments were $436,699 and $73,836, as of September 30, 2020 and December 31, 2019, respectively, which were recognized as revenue during the subsequent period. Customer advance payments are included in current liabilities in the accompanying condensed consolidated Balance Sheets. |
INVENTORIES | Inventories The Company manufactures its own products made to order and when completed are shipped to the customer. The Company's inventories are valued by the first-in, first-out ("FIFO") cost method and are stated at the lower of cost or net realizable value. The Company had inventory of $52,184 and $57,364, mostly consisting finished goods, as of September 30, 2020 and December 31, 2019, respectively. |
PROPERTY AND EQUIPMENT | Property and Equipment Property and equipment are carried at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets, generally five years. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Fixed assets are examined for the possibility of decreases in value when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. |
INTANGIBLE ASSETS | Intangible Assets Intangible assets consist primarily of developed technology – website applications. Our intangible assets are being amortized on a straight-line basis over a period of five years. |
IMPAIRMENT OF LONG-LIVED ASSETS | Impairment of Long-lived Assets We periodically evaluate whether the carrying value of property, equipment and intangible assets has been impaired when circumstances indicate the carrying value of those assets may not be recoverable. The carrying amount is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying value is not recoverable, the impairment loss is measured as the excess of the asset’s carrying value over its fair value. There are no impairments as of September 30, 2020 and December 31, 2019. Our impairment analyses require management to apply judgment in estimating future cash flows as well as asset fair values, including forecasting useful lives of the assets, assessing the probability of different outcomes, and selecting the discount rate that reflects the risk inherent in future cash flows. If the carrying value is not recoverable, we assess the fair value of long-lived assets using commonly accepted techniques, and may use more than one method, including, but not limited to, recent third-party comparable sales and discounted cash flow models. If actual results are not consistent with our assumptions and estimates, or our assumptions and estimates change due to new information, we may be exposed to an impairment charge in the future. |
LEASES | Leases In accordance with ASC 842, Leases |
FAIR VALUE OF FINANCIAL INSTRUMENTS | Fair Value of Financial Instruments The provisions of accounting guidance, FASB Topic ASC 825 requires all entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of September 30, 2020, the fair value of cash, accounts receivable, accounts payable, accrued expenses, and notes payable approximated carrying value due to the short maturity of the instruments, quoted market prices or interest rates which fluctuate with market rates. |
FAIR VALUE MEASUREMENTS | Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities. • Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. There were no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. There have been no transfers between levels. The derivatives are evaluated under the hierarchy of ASC 480-10, ASC Paragraph 815-25-1 and ASC Subparagraph 815-10-15-74 addressing embedded derivatives. The fair value of the Level 3 financial instruments was performed internally by the Company using Monte Carlo valuation method. The following table summarize the Company’s fair value measurements by level at September 30, 2020 for the assets measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Derivative liability $ – $ – $ 124,215 The following table summarize the Company’s fair value measurements by level at December 31, 2019 for the assets measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Derivative liability $ – $ – $ - The carrying values of the Company’s financial instruments, including cash, other current assets, accounts payable, accruals, and other current liabilities approximate their fair values due to the short period of time to maturity or repayment. |
DEBT | Debt The Company issues debt that may have separate warrants, conversion features, or no equity-linked attributes. Debt with warrants Convertible debt – derivative treatment If the conversion feature within convertible debt meets the requirements to be treated as a derivative, we estimate the fair value of the convertible debt derivative using Monte Carlo Method upon the date of issuance. If the fair value of the convertible debt derivative is higher than the face value of the convertible debt, the excess is immediately recognized as interest expense. Otherwise, the fair value of the convertible debt derivative is recorded as a liability with an offsetting amount recorded as a debt discount, which offsets the carrying amount of the debt. The convertible debt derivative is revalued at the end of each reporting period and any change in fair value is recorded as a gain or loss in the statement of operations. The debt discount is amortized through interest expense over the life of the debt. Convertible debt – beneficial conversion feature If the conversion feature does not qualify for either the derivative treatment or as a BCF, the convertible debt is treated as traditional debt. |
EARNINGS PER SHARE | Earnings per Share The unaudited computation of net profit (loss) per share included in the Statements of Operations, represents the net profit (loss) per share that would have been reported had the Company been subject to ASC 260, “Earnings Per Share as a corporation for all periods presented. Diluted earnings (loss) per share are computed on the basis of the weighted average number of common shares (including common stock subject to redemption) plus dilutive potential common shares outstanding for the reporting period. In periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. The total number of potential additional dilutive securities outstanding for the three and nine months ended September 30, 2020 and 2019, was none since the Company had net losses and any additional potential common shares would have an anti-dilutive effect. The following potentially dilutive securities were excluded from the calculation of diluted net loss per share because the effects were anti-dilutive based on the application of the treasury stock method and because the Company incurred net losses during the period: September 30, 2020 December 31, 2019 Options to purchase shares of common stock – – Series A convertible preferred stock 50,000,000 50,000,000 Series B convertible preferred stock 5,000,000 – Series C convertible preferred stock 10,000,000 – Total potentially dilutive shares 65,000,000 50,000,000 |
COMMITMENTS AND CONTINGENCIES | Commitments and Contingencies The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no known commitments or contingencies as of September 30, 2020 and December 31, 2019. |
CONCENTRATIONS, RISKS, AND UNCERTAINTIES | Concentrations, Risks, and Uncertainties Business Risk Substantial business risks and uncertainties are inherent to an entity, including the potential risk of business failure. The Company is headquartered and operates in the United States. To date, the Company has generated limited revenues from operations. There can be no assurance that the Company will be able to successfully continue to produce its products and failure to do so would have a material adverse effect on the Company’s financial position, results of operations and cash flows. Also, the success of the Company’s operations is subject to numerous contingencies, some of which are beyond management’s control. These contingencies include general economic conditions, price of raw material, competition, and governmental and political conditions. Interest rate risk Financial assets and liabilities do not have material interest rate risk. Credit risk The Company is exposed to credit risk from its cash in banks and accounts receivable. The credit risk on cash in banks is limited because the counterparties are recognized financial institutions. There was one customer that accounted for 10%, comprising 18.8% and 25.3%, or more of total revenue for the nine months ended September 30, 2020 and 2019. There were no customers that accounted for 10% or more of total revenue for the three months ended September 30, 2020. There were two customers that accounted for 10%, comprising 30.2%, or more of total revenue for the three months ended September 30, 2019. There was one customer that comprised 10%, comprising 96.0%, or more of accounts receivable at September 30, 2020. There were no customers that comprised 10% or more of accounts receivable at September 30, 2019. Seasonality The business is not subject to seasonal fluctuations. However, as a result of the COVID 19 pandemic, in 2020, the Company entered into the sale of KN95 masks but had to dispose of them at a loss. Major Suppliers In producing our supplement products, we source our ingredients from our suppliers on an ongoing as-needed basis. We have not entered into any contracts that obligate us to purchase a minimum quantity or exclusively from any food service distributor. Our supplements are manufactured at our facilities in Hollywood, Florida. We rely on a variety of suppliers. Should the relationship with an industry vendor be interrupted or discontinued, it is believed that alternate component suppliers could be identified to support the continued advancement of the Company. There were no suppliers that accounted for 10% or more of total expenditures for the nine months ended September 30, 2020. There were three suppliers that accounted for 10% or more, comprising 69.8% of total expenditures for the nine months ended September 30, 2019. There were no suppliers that accounted for 10% or more of total expenditures for the three months ended September 30, 2020. There were two suppliers that accounted for 10% or more, comprising 67.8% of total expenditures for the three months ended September 30, 2019. There were four suppliers that accounted for 67.2% of accounts payable at September 30, 2020 and one supplier that accounted for 78.4% of accounts payable at September 30, 2019. |
RECENT ACCOUNTING PRONOUNCEMENTS | Recent Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes. Income Taxes Other recently issued accounting updates are not expected to have a material impact on the Company’s consolidated financial statements. |
3. SUMMARY OF SIGNIFICANT ACC_3
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of fair value measurements | The following table summarize the Company’s fair value measurements by level at September 30, 2020 for the assets measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Derivative liability $ – $ – $ 124,215 The following table summarize the Company’s fair value measurements by level at December 31, 2019 for the assets measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Derivative liability $ – $ – $ - |
Schedule of antidilutive shares | The following potentially dilutive securities were excluded from the calculation of diluted net loss per share because the effects were anti-dilutive based on the application of the treasury stock method and because the Company incurred net losses during the period: September 30, 2020 December 31, 2019 Options to purchase shares of common stock – – Series A convertible preferred stock 50,000,000 50,000,000 Series B convertible preferred stock 5,000,000 – Series C convertible preferred stock 10,000,000 – Total potentially dilutive shares 65,000,000 50,000,000 |
EQUIPMENT (Tables)
EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of equipment | Equipment consisted of the following as of: Estimated Life September 30, 2020 December 31, 2019 Office equipment and furniture 5 years $ 21,782 $ 9,316 Computer equipment 3 years 23,455 6,424 Machinery and equipment 5 years 15,724 – Leasehold Improvements Shorter of the estimated useful life or lease term 19,491 – Accumulated depreciation (8,034 ) (1,623 ) $ 72,418 $ 14,117 |
5. INTANGIBLE ASSETS (Tables)
5. INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets consisted of the following as of: Estimated Life September 30, 2020 December 31, 2019 Website 5 years $ 77,550 $ – Accumulated amortization (1,817 ) – $ 75,733 $ – |
Schedule of amortization intangible assets | Amortization Year ending: Expense 2020 (remaining six months) $ 3,878 2021 15,510 2022 15,510 2023 15,510 2024 15,510 Thereafter 9,815 Total amortization $ 75,733 |
10. OPERATING LEASES (Tables)
10. OPERATING LEASES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of components of lease expense | n accordance with ASC 842, the components of lease expense were as follows: Nine Months ended September 30, Three Months ended September 30, 2020 2019 2020 2019 Operating lease expense $ 123,243 $ 21,474 $ 58,821 $ 21,474 Short term lease cost 1,797 – 674 – Total lease expense $ 125,040 $ 21,474 $ 59,495 $ 21,474 |
Schedule of other information related to leases | In accordance with ASC 842, other information related to leases was as follows: Nine Months ended September 30, 2020 Operating cash flows from operating leases $ 123,243 Cash paid for amounts included in the measurement of lease liabilities $ 123,243 Weighted-average remaining lease term—operating leases 2.6 years Weighted-average discount rate—operating leases 8% |
Schedule of maturities of operating lease liabilities | In accordance with ASC 842, maturities of operating lease liabilities as of June 30, 2020 were as follows: Year ending: Operating Lease 2020 (remaining three months) $ 58,251 2021 236,228 2022 170,668 2023 106,815 Total undiscounted cash flows $ 571,962 |
Schedule of Reconciliation of lease liabilities | Reconciliation of lease liabilities: Weighted-average remaining lease terms 2 years Weighted-average discount rate 8% Present values $ 517,309 Lease liabilities—current 202,474 Lease liabilities—long-term 314,835 Lease liabilities—total $ 517,309 Difference between undiscounted and discounted cash flows $ 54, 653 |
1. NATURE OF BUSINESS (Details
1. NATURE OF BUSINESS (Details Narrative) | 7 Months Ended |
Aug. 14, 2020shares | |
Nature Consulting [Member] | |
Stock issued for acquisition, shares | 60,000,000 |
2. BASIS OF PRESENTATION (Detai
2. BASIS OF PRESENTATION (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Accumulated deficit | $ 624,244 | $ 624,244 | $ (97,312) | ||
Net income (loss) | (101,672) | $ (282,417) | 721,556 | $ (167,179) | |
Working capital | $ (963,000) | (963,000) | |||
Net cash provided by operating activities | $ 520,327 | $ (155,037) |
3. SUMMARY OF SIGNIFICANT ACC_4
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Fair value measurements) - Fair Value Measurements Recurring [Member] - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value Inputs Level 1 [Member] | ||
Fair value of derivative liability | $ 0 | $ 0 |
Fair Value Inputs Level 2 [Member] | ||
Fair value of derivative liability | 0 | 0 |
Fair Value Inputs Level 3 [Member] | ||
Fair value of derivative liability | $ 124,215 | $ 0 |
3. SUMMARY OF SIGNIFICANT ACC_5
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Antidilutive shares) - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Total potentially dilutive shares | 65,000,000 | 50,000,000 |
Options [Member] | ||
Total potentially dilutive shares | 0 | 0 |
Series A Preferred Stock [Member] | ||
Total potentially dilutive shares | 50,000,000 | 50,000,000 |
Series B Preferred Stock [Member] | ||
Total potentially dilutive shares | 5,000,000 | 0 |
Series C Preferred Stock [Member] | ||
Total potentially dilutive shares | 10,000,000 | 0 |
3. SUMMARY OF SIGNIFICANT ACC_6
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 24, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Reverse stock split | 1 for 20 reverse stock split | |||||
FDIC insured limit | $ 250,000 | $ 250,000 | ||||
Allowance for doubtful accounts | 28,700 | 28,700 | $ 29,548 | |||
Advertising and marketing | 151,600 | $ 130,239 | 325,245 | $ 222,114 | ||
Revenues | 1,296,431 | $ 510,874 | 6,577,162 | 1,747,931 | ||
Customer advance payments | 436,699 | 436,699 | 73,836 | |||
Inventory | $ 52,184 | 52,184 | $ 57,364 | |||
Impairment of intangible assets | $ 0 | $ 0 | ||||
Intangible Asset, Useful Life | 5 years | |||||
Revenue [Member] | One Customer | ||||||
Concentration Risk, Percentage | 18.80% | 25.30% | ||||
Revenue [Member] | Two Customer | ||||||
Concentration Risk, Percentage | 30.20% | |||||
Accounts Receivable [Member] | One Customer | ||||||
Concentration Risk, Percentage | 96.00% | |||||
Expenditures [Member] | Three Suppliers | ||||||
Concentration Risk, Percentage | 69.80% | |||||
Expenditures [Member] | Two Suppliers | ||||||
Concentration Risk, Percentage | 67.80% | |||||
Accounts Payable [Member] | Four Suppliers | ||||||
Concentration Risk, Percentage | 67.20% | 78.40% | ||||
Other Sales [Member] | ||||||
Revenues | $ 3,522,961 | $ 1,747,931 | ||||
Mask Sales [Member] | ||||||
Revenues | $ 3,054,201 | $ 0 |
4. EQUIPMENT (Details)
4. EQUIPMENT (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Accumulated depreciation | $ (8,034) | $ (1,623) |
Equipment, net | $ 72,418 | 14,117 |
Office equipment and furniture [Member] | ||
Estimated Life | 5 years | |
Equipment, gross | $ 21,782 | 9,316 |
Computer Equipment [Member] | ||
Estimated Life | 3 years | |
Equipment, gross | $ 23,455 | 6,424 |
Machinery and Equipment [Member] | ||
Estimated Life | 5 years | |
Equipment, gross | $ 15,724 | |
Leasehold Improvements [Member] | ||
Estimated Life | Shorter of the estimated useful life or lease term | |
Equipment, gross | $ 19,491 |
4. EQUIPMENT (Details Narrative
4. EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 3,222 | $ 656 | $ 6,411 | $ 656 |
5. INTANGIBLE ASSETS (Details -
5. INTANGIBLE ASSETS (Details - Intangible assets) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Estimated Life | 5 years | |
Accumulated amortization | $ (1,817) | $ 0 |
Intangible assets, net | 75,733 | 0 |
Website [Member] | ||
Intangible assets, gross | $ 77,550 | $ 0 |
5. INTANGIBLE ASSETS (Details_2
5. INTANGIBLE ASSETS (Details - Amortization expense) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2020 (remaining six months) | $ 3,878 | |
2021 | 15,510 | |
2022 | 15,510 | |
2023 | 15,510 | |
2024 | 15,510 | |
Thereafter | 9,815 | |
Total amortization | $ 75,733 | $ 0 |
5. INTANGIBLE ASSETS (Details N
5. INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 1,207 | $ 0 | $ 1,817 | $ 0 |
6. DEBT TO FORMER SHAREHOLDER (
6. DEBT TO FORMER SHAREHOLDER (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Due to Related Parties | $ 645,842 | $ 0 | |
Advance from related party | 182,599 | $ 0 | |
Repayments of related party debt | 17,500 | ||
Due to related party [Member] | |||
Due to Related Parties | 165,099 | ||
Ownership Agreement [Member] | Seller [Member] | Promissory Note [Member] | |||
Promissory note face amount | $ 750,000 | ||
Interest rate | 15.00% | ||
Maturity date | Mar. 1, 2021 | ||
Repayment of debt | $ 269,257 | ||
Note payable balance | $ 480,743 |
7. LOANS PAYABLE (Details Narra
7. LOANS PAYABLE (Details Narrative) - USD ($) | 2 Months Ended | 3 Months Ended | 4 Months Ended | 9 Months Ended | ||||
Feb. 28, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | May 14, 2020 | May 06, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Loan Payable | $ 77,500 | $ 77,500 | $ 20,000 | |||||
Proceeds from loans payable | 182,599 | $ 0 | ||||||
Repayment of Loan Payable | 20,000 | 0 | ||||||
Other Income | 0 | $ 0 | 7,000 | 0 | ||||
EIDL Loan [Member] | ||||||||
Principal amount | $ 150,000 | $ 51,065 | ||||||
Interest rate | 3.75% | |||||||
Periodic Payment | $ 731 | |||||||
Grant received | $ 7,000 | |||||||
Other Income | 0 | $ 7,000 | ||||||
PPP Note [Member] | ||||||||
Interest rate | 1.00% | |||||||
PPP Note [Member] | Subsequent Event [Member] | ||||||||
Repayment of loan | $ 51,065 | |||||||
Shareholder [Member] | ||||||||
Loan Payable | $ 77,500 | 77,500 | $ 20,000 | |||||
Proceeds from loans payable | 77,500 | |||||||
Repayment of Loan Payable | $ 20,000 |
8. CONVERTIBLE NOTE PAYABLE (De
8. CONVERTIBLE NOTE PAYABLE (Details Narrative) - USD ($) | Oct. 04, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Apr. 22, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2020 | Sep. 21, 2020 | Feb. 05, 2020 | Dec. 31, 2019 |
Promissory Debenture [Member] | SP11 [Member] | ||||||||||
Debt Conversion, Shares Issued | 3,500,000 | |||||||||
Debt Conversion, amount | $ 35,000 | |||||||||
Promissory Debenture [Member] | Emry Capital [Member] | ||||||||||
Debt face amount | $ 70,000 | |||||||||
Debt stated interest rate | 15.00% | |||||||||
Derivative liability | $ 102,735 | $ 0 | $ 102,735 | $ 0 | ||||||
Recorded a change in derivative liability | 21,480 | $ 0 | 21,480 | $ 0 | ||||||
Unamortized debt discount | 124,215 | 124,215 | ||||||||
Convertible Promissory Note [Member] | ||||||||||
Debt face amount | $ 220,000 | |||||||||
Debt stated interest rate | 8.00% | |||||||||
Convertible notes payable | $ 85,766 | |||||||||
Unamortized debt discount | 217,288 | 217,288 | ||||||||
Conversion Price | $ 0.05 | |||||||||
Long term liability | $ 2,712 | $ 2,712 | ||||||||
Convertible Promissory Note [Member] | GHS Investments [Member] | ||||||||||
Debt face amount | $ 57,000 | |||||||||
Debt stated interest rate | 8.00% | |||||||||
Debt maturity date | Feb. 21, 2020 | |||||||||
Convertible notes payable | $ 57,000 |
9. STOCKHOLDERS_ EQUITY (Detail
9. STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | Jan. 09, 2020 | Mar. 24, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Saveene [Member] | ||||
Stock converted, amount converted | $ 35,000 | |||
Series A Preferred Stock [Member] | ||||
Preferred stock outstanding | 50,000,000 | 50,000,000 | ||
Proceeds from sale of preferred stock | $ 94,766 | |||
Series B Preferred Stock [Member] | ||||
Preferred stock outstanding | 5,000 | 0 | ||
Series B Preferred Stock [Member] | Saveene [Member] | ||||
Stock converted, shares issued | 5,000 | |||
Series C Preferred Stock [Member] | ||||
Preferred stock outstanding | 10,000 | 0 | ||
Series C Preferred Stock [Member] | Saveene [Member] | ||||
Stock converted, shares issued | 10,000 | |||
Preferred Stock | ||||
Purchase price | $ 250,000 |
10. OPERATING LEASES (Details -
10. OPERATING LEASES (Details - Components of lease expense) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||||
Operating lease expense | $ 123,243 | $ 21,474 | $ 58,821 | $ 21,474 |
Short term lease cost | 1,797 | 0 | 674 | 0 |
Total lease expense | $ 125,040 | $ 21,474 | $ 59,495 | $ 21,474 |
10. OPERATING LEASES (Details_2
10. OPERATING LEASES (Details - Other information related to leases) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 123,243 |
Cash paid for amounts included in the measurement of lease liabilities | $ 123,243 |
Weighted-average remaining lease term - operating leases | 2 years 7 months 6 days |
Weighted-average discount rate - operating leases | 8.00% |
10. OPERATING LEASES (Details_3
10. OPERATING LEASES (Details - Maturities of operating lease liabilities) | Sep. 30, 2020USD ($) |
Leases [Abstract] | |
2020 (remaining three months) | $ 58,251 |
2021 | 236,228 |
2022 | 170,668 |
2023 | 106,815 |
Total undiscounted cash flows | $ 571,962 |
10. OPERATING LEASES (Details_4
10. OPERATING LEASES (Details - Reconciliation of lease liabilities) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Leases [Abstract] | |
Weighted-average remaining lease terms | 2 years |
Weighted-average discount rate | 8.00% |
Present values | $ 517,309 |
Lease liabilities - current | 202,474 |
Lease liabilities - long-term | 314,835 |
Lease liabilities - total | 517,309 |
Difference between undiscounted and discounted cash flows | $ 54,653 |
10. OPERATING LEASES (Details N
10. OPERATING LEASES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Leases [Abstract] | |||||
Operating lease ROU asset | $ 511,300 | $ 511,300 | $ 292,320 | ||
Operating lease liability | $ 344,203 | ||||
Operating lease cost | $ 58,821 | $ 123,243 | $ 21,474 | $ 21,474 |