Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 08, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | GrowGeneration Corp. | |
Entity Central Index Key | 0001604868 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Filer Number | 333-207889 | |
Entity Incorporation State Country Code | CO | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding | 36,707,607 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 15,982,681 | $ 14,639,981 |
Accounts receivable, net of allowance for doubtful accounts of $119,237 at September 30, 2019 and $133,288 at December 31, 2018 | 2,170,362 | 862,397 |
Inventory | 19,383,839 | 8,869,469 |
Prepaid expenses and other current assets | 2,370,439 | 606,037 |
Total current assets | 39,907,321 | 24,977,884 |
Property and equipment, net | 3,118,482 | 1,820,821 |
Operating leases right-of-use assets, net | 7,667,538 | |
Intangible assets, net | 226,974 | 114,155 |
Goodwill | 17,102,038 | 8,752,909 |
Other assets | 394,151 | 227,205 |
TOTAL ASSETS | 68,416,504 | 35,892,974 |
Current liabilities: | ||
Accounts payable | 4,957,782 | 1,819,411 |
Other accrued liabilities | 9,829 | 40,151 |
Payroll and payroll tax liabilities | 991,075 | 410,345 |
Customer deposits | 927,134 | 516,038 |
Sales tax payable | 463,315 | 191,958 |
Current maturities of operating leases right-of-use assets | 1,935,129 | |
Current maturities of long-term debt | 207,582 | 436,813 |
Total current liabilities | 9,491,846 | 3,414,716 |
Long-term convertible debt, net of debt discount and debt issuance costs | 2,044,113 | |
Operating leases right-of-use assets, net of current maturities | 5,869,512 | |
Long-term debt, net of current maturities | 264,779 | 375,626 |
Total liabilities | 15,626,137 | 5,834,455 |
Stockholders’ Equity: | ||
Common stock; $.001 par value; 100,000,000 shares authorized; 36,652,105 and 27,948,609 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 36,652 | 27,949 |
Additional paid-in capital | 59,178,587 | 38,796,562 |
Accumulated deficit | (6,424,872) | (8,765,992) |
Total stockholders’ equity | 52,790,367 | 30,058,519 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 68,416,504 | $ 35,892,974 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowance for doubtful accounts | $ 119,237 | $ 133,288 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 36,652,105 | 27,948,609 |
Common stock, shares outstanding | 36,652,105 | 27,948,609 |
Consolidated Statement of Opera
Consolidated Statement of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Sales | $ 21,778,487 | $ 8,406,255 | $ 54,349,092 | $ 19,939,572 |
Cost of sales | 15,276,906 | 6,249,129 | 38,340,670 | 14,863,600 |
Gross profit | 6,501,581 | 2,157,126 | 16,008,422 | 5,075,972 |
Operating expenses: | ||||
Store operations | 2,744,199 | 1,415,150 | 7,360,525 | 3,456,960 |
General and administrative | 803,707 | 375,002 | 1,928,020 | 1,137,910 |
Share based compensation | 553,492 | 367,098 | 1,075,735 | 920,446 |
Depreciation and amortization | 247,715 | 114,159 | 538,847 | 230,070 |
Salaries and related expenses | 1,020,627 | 460,928 | 2,449,733 | 1,187,738 |
Total operating expenses | 5,369,740 | 2,732,337 | 13,352,860 | 6,933,124 |
Income (loss) from operations | 1,131,841 | (575,211) | 2,655,562 | (1,857,152) |
Other income (expense): | ||||
Interest expense | (27,067) | 4,795 | (35,757) | (14,535) |
Interest income | 60,973 | 23,584 | 95,256 | 53,211 |
Other income (loss) | (1,838) | (1,214) | (17,635) | 8,102 |
Amortization of debt discount | (114,210) | (236,527) | (356,306) | (858,624) |
Total non-operating expense, net | (82,142) | (209,362) | (314,442) | (811,846) |
Net income (loss) | $ 1,049,699 | $ (784,573) | $ 2,341,120 | $ (2,668,998) |
Net income (loss) per shares, basic | $ 0.03 | $ (.03) | $ 0.07 | $ (0.12) |
Net income (loss) per shares, diluted | $ 0.03 | $ (.03) | $ 0.06 | $ (.12) |
Weighted average shares outstanding, basic | 35,707,788 | 25,646,011 | 31,523,679 | 22,056,665 |
Weighted average shares outstanding, diluted | 41,713,369 | 25,646,011 | 37,529,260 | 22,056,665 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity (Unaudited) - 9 months ended Sep. 30, 2019 - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2018 | $ 27,949 | $ 38,796,562 | $ (8,765,992) | $ 30,058,519 |
Balance shares at Dec. 31, 2018 | 27,948,609 | |||
Sale of Common stock and warrants, net of fees | $ 4,123 | 12,872,416 | 12,876,539 | |
Sale of Common stock and warrants, net of fees,shares | 4,123,254 | |||
Share based compensation | 256,551 | 256,551 | ||
Common stock issued upon warrant exercise | $ 1,722 | 1,262,406 | 1,264,128 | |
Common stock issued upon warrant exercise, shares | 1,722,463 | |||
Common stock issued upon cashless exercise of options | $ 506 | (506) | ||
Common stock issued upon cashless exercise of options, shares | 505,868 | |||
Common stock issued in connection with business combinations | $ 894 | 3,338,737 | 3,339,631 | |
Common stock issued in connection with business combinations, shares | 894,553 | |||
Common stock issued upon conversion of convertible debt | $ 1,259 | 2,309,573 | 2,310,832 | |
Common stock issued upon conversion of convertible debt, shares | 1,258,608 | |||
Common stock issued for services | $ 99 | 132,748 | 132,847 | |
Common stock issued for services, shares | 98,750 | |||
Common stock issued for accrued share-based compensation | $ 100 | 210,100 | 210,200 | |
Common stock issued for accrued share-based compensation, shares | 100,000 | |||
Net income | 2,341,120 | 2,341,120 | ||
Balance at Sep. 30, 2019 | $ 36,652 | $ 59,178,587 | $ (6,424,872) | $ 52,790,367 |
Balance shares at Sep. 30, 2019 | 36,652,105 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 2,341,120 | $ (2,668,998) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 538,847 | 230,069 |
Amortization of debt discount | 356,306 | 858,624 |
Stock-based compensation expense | 1,075,735 | 920,446 |
Noncash operating lease expense | 137,103 | |
(Increase) decrease in: | ||
Accounts receivable | (1,307,965) | (355,674) |
Inventory | (7,331,270) | (1,246,125) |
Prepaid expenses and other assets | (2,208,060) | (69,631) |
Increase (decrease) in: | ||
Accounts payable and accrued liabilities | 3,108,049 | 242,806 |
Payroll and payroll tax liabilities | 327,818 | 39,231 |
Customer deposits | 411,096 | 58,498 |
Sales tax payable | 271,357 | 116,812 |
Net cash used in operating activities | (2,279,864) | (1,873,942) |
Cash flows from investing activities: | ||
Assets acquired in business combinations | (8,528,698) | (5,762,763) |
Purchase of furniture and equipment | (1,536,508) | (454,999) |
Purchase of intangibles | (112,819) | (33,500) |
Net cash used in investing activities | (10,178,025) | (6,251,262) |
Cash flows from financing activities: | ||
Principal payments on long term debt | (340,078) | (218,740) |
Proceeds from issuance of convertible debt, net of expenses | 8,912,765 | |
Proceeds from the sale of common stock and exercise of warrants, net of expenses | 14,140,667 | 12,546,672 |
Net cash provided by financing activities | 13,800,589 | 21,240,697 |
Net increase in cash | 1,342,700 | 13,115,493 |
Cash at the beginning of period | 14,639,981 | 1,215,265 |
Cash at the end of period | 15,982,681 | 14,330,758 |
Supplemental disclosures of non-cash financing activities: | ||
Cash paid for interest | 35,757 | 14,535 |
Common stock issued for accrued payroll | 108,420 | |
Common stock issued for prepaid services | 96,000 | |
Debt converted to equity | 2,310,832 | 3,195,484 |
Warrants issued for debt discount | 4,239,000 | |
Acquisition of vehicles with debt financing | 56,174 | |
Assets acquired by issuance of common stock | 3,339,631 | 5,222,799 |
Acquisition of assets with seller financing | 1,087,000 | |
Right to use assets acquired under operating leases | $ 5,801,725 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | 1. NATURE OF OPERATIONS GrowGeneration Corp (the “Company”) was incorporated on March 6, 2014 in Colorado under the name of Easylife Corp and changed its name to GrowGeneration Corp. It maintains its principal office in Denver, Colorado. GrowGeneration is the largest chain of hydroponic garden centers in North America and is a leading marketer and distributor of nutrients, growing media, advanced indoor and greenhouse lighting, ventilation systems and accessories for hydroponic gardening. Today, the Company owns and operates a chain of twenty three (23) retail hydroponic/gardening stores, with five (5) located in the state of Colorado, five (5) in the state of California, four (4) in the state of Michigan, two (2) in the state of Nevada, one (1) in the state of Washington, two (2) in the State of Oklahoma, one (1) in the state of Rhode Island, three (3) in Maine, and an online e-commerce store, HeavyGardens. In addition, two new locations one in Tulsa, OK and one in Oklahoma City, OK are expected to open in the fourth quarter of 2019. Our plan is to acquire, open and operate hydroponic/gardening stores and related businesses throughout the United States and Canada. The Company engages in its business through its wholly owned subsidiaries, GrowGeneration Pueblo Corp, GrowGeneration California Corp, Grow Generation Nevada Corp, GrowGeneration Washington Corp, GrowGeneration Rhode Island Corp, GrowGeneration Oklahoma Corp, GrowGeneration Canada, GrowGeneration HG Corp, GrowGeneration Hemp Corp, GGen Distribution Corp, GrowGeneration Michigan Corp, GrowGeneration New England Corp and GrowGeneration Management Corp. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The financial statements are prepared under the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 105-10, Generally Accepted Accounting Principles The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. Basis of Presentation - Unaudited Interim Financial Information The accompanying interim condensed consolidated financial statements are unaudited. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all of the normal recurring adjustments necessary to present fairly the financial position and results of operations as of and for the periods presented. The interim results are not necessarily indicative of the results to be expected for the full year or any future period. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The Company believes that the disclosures are adequate to make the interim information presented not misleading. These consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K filed on April 1, 2019 for the years ended December 31, 2018 and 2017. Leases We assess whether an arrangement is a lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We have elected the practical expedient to not separate lease and non-lease components for all assets. Operating lease assets and operating lease liabilities are calculated based on the present value of the future minimum lease payments over the lease term at the lease start date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease start date in determining the present value of future payments. The operating lease asset is increased by any lease payments made at or before the lease start date and reduced by lease incentives and initial direct costs incurred. The lease term includes options to renew or terminate the lease when it is reasonably certain that we will exercise that option. The exercise of lease renewal options is at our sole discretion. The depreciable life of lease assets and leasehold improvements are limited by the lease term. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Segment Reporting Management makes significant operating decisions based upon the analysis of the entire Company and financial performance is evaluated on a company-wide basis. Accordingly, the various products sold are aggregated into one reportable operating segment as under guidance in the FASB ASC Topic 280 for segment reporting. Use of Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported revenues and expenses during the reporting period. Actual results could vary from the estimates that were used. Income Taxes The Company accounts for income taxes in accordance with FASB ACS 740, Income Taxes, which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. The differences related principally to depreciation of property and equipment, reserve for obsolete inventory and bad debt. Deferred tax assets and liabilities represent the future tax consequence for those differences, which will either be deductible or taxable when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established to reduce deferred tax assets to the amount expected to be realized. The Company adopted the provisions of FASB ACS 740-10-25, which prescribes a recognition threshold and measurement attribute for the recognition and measurement of tax positions taken or expected to be taken in income tax returns. FASB ASC 740-10-25 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with tax positions. The Company's tax returns are subject to tax examinations by U.S. federal and state authorities until respective statute of limitation. Currently, the 2018, 2017 and 2016 tax years are open and subject to examination by taxing authorities. However, the Company is not currently under audit nor has the Company been contacted by any of the taxing authorities. The Company does not have any accrual for uncertain tax positions as of September 30, 2019. It is not anticipated that unrecognized tax benefits would significantly increase or decrease within 12 months of the reporting date. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | 3. RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements During the first quarter of 2019, the Company adopted the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-02, Leases Leases Leases On January 1, 2019, the Company also adopted ASU 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting.” ASU 2018-07 more closely aligns the accounting for employee and nonemployee share-based payments. The amendment is effective commencing in 2019 with early adoption permitted. The adoption of this new guidance did not have a material impact on our Financial Statements. In August 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, Disclosure Update and Simplification. These amendments eliminate, modify, or integrate into other SEC requirements certain disclosure rules. Among the amendments is the requirement to present an analysis of changes in stockholders’ equity in the interim financial statements included in Quarterly Reports on Form 10-Q. The analysis, which can be presented as a footnote or separate statement, is required for the current and comparative quarter and year-to-date interim periods. The amendments are effective for all filings made on or after November 5, 2018. The Company adopted these amendments in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2019. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities On August 28, 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging,” which better aligns risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments expand and refine hedge accounting for both nonfinancial and financial risk components and in some situations better align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The new standard was effective for the Company as of January 1, 2019. The adoption of this new standard on January 1, 2019 did not have any impact on our consolidated financial statements and footnote disclosures. Recently Issued Accounting Pronouncements – Pending Adoption In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 4. PROPERTY AND EQUIPMENT September 30, December 31, Vehicles $ 770,962 $ 535,857 Leasehold improvements 760,794 441,725 Furniture, fixtures and equipment 2,699,395 1,417,061 4,231,151 2,394,643 (Accumulated depreciation) (1,112,669 ) (573,822 ) Property and Equipment, net $ 3,118,482 $ 1,820,821 Depreciation expense for the three months ended September 30, 2019 and 2018 was $247,715 and $102,983, respectively and depreciation expense for the nine months ended September 30, 2019 and 2018 was $538,847 and $229,415, respectively. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | 5. LONG-TERM DEBT September 30, December 31, 2019 2018 Long term debt is as follows: Hitachi Capital, interest at 8.0% per annum, payable in monthly installments of $631.13 beginning September 2015 through August 2019, secured by delivery equipment with a book value of $24,910 $ - $ 3,211 Wells Fargo Equipment Finance, interest at 3.5% per annum, payable in monthly installments of $518.96 beginning April 2016 through March 2021, secured by warehouse equipment with a book value of $25,437 8,595 12,976 Notes payable issued in connection with seller financing of assets acquired, interest at 1%, payable in 24 installments of $24,996, due February 2020 125,000 350,000 Notes payable issued in connection with seller financing of assets acquired, interest at 1%, payable in 12 installments of $6,003, due September 2019 - 54,000 Notes payable issued in connection with seller financing of assets acquired, interest at 8.125%, payable in 60 installments of $8,440, due August 2023 338,766 392,252 $ 472,361 $ 812,439 Less Current Maturities (207,582 ) (436,813 ) Total Long-Term Debt $ 264,779 $ 375,626 Interest expense for the three months ended September 30, 2019 and 2018 was $27,067 and $(4,795), respectively and interest expense for the nine months ended September 30, 2019 and 2018 was $35,757 and $14,535, respectively. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
LEASES | 6. LEASES We determine if a contract contains a lease at inception. Our material operating leases consist of retail and warehouse locations as well as office space. Our leases generally have remaining terms of 1- 5 years, most of which include options to extend the leases for additional 3 to 5 year periods. Generally, the lease term is the minimum of the noncancelable period of the lease or the lease term inclusive of reasonably certain renewal periods. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases. Our leases typically contain rent escalations over the lease term. We recognize expense for these leases on a straight-line basis over the lease term. We elected this expedient to account for lease and non-lease components as a single component for our entire population of operating lease assets. We have elected the short-term lease recognition exemption for all applicable classes of underlying assets. Short-term disclosures include only those leases with a term greater than one month and 12 months or less, and expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less, that do not include an option to purchase the underlying asset that we are reasonably certain to exercise, are not recorded on the balance sheet. September 30, 2019 Right to use assets, operating lease assets $ 7,667,538 Current lease liability $ 1,935,129 Non-current lease liability 5,869,512 $ 7,804,641 September 30, 2019 Weighted average remaining lease term 3.9 years Weighted average discount rate 7.6 % Operating lease assets obtained for operating lease liabilities $ 3,050,164 Maturities of lease liabilities 2019 $ 537,140 2020 2,393,058 2021 2,422,455 2022 1,891,783 2023 1,297,329 2024 512,269 2025 349,573 2026 45,438 Total lease payments 9,449,045 Less: Imputed interest (1,644,404 ) Lease Liability at September 30, 2019 $ 7,804,641 |
Convertible Debt
Convertible Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBT | 7. CONVERTIBLE DEBT On January 12, 2018, the Company completed a private placement of a total of 36 units of the Company’s securities at the price of $250,000 per unit pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506 of Regulation D promulgated under the Securities Act. Each Unit consisted of (i) a .1% unsecured convertible promissory note of the principal amount of $250,000, and (ii) a 3-year warrant entitling the holder to purchase 37,500 shares of the Company’s common stock, par value $.001 per share (the “Common Stock”), at a price of $.01 per share or through cashless exercise. The convertible debt has a maturity date of January 12, 2021 and the principal balance and any accrued interest is convertible by the holder at any time into Common Stock of the Company at conversion price of $3.00 a share. Principal due and interest accrued on the notes will automatically convert into shares of Common Stock, at the conversion price, if at any time during the term of the notes, commencing twelve (12) months from the date of issuance, the Common Stock trades minimum daily volume of at least 50,000 shares for twenty (20) consecutive days with a volume weighted average price of at least $4.00 per share. As of September 30, 2019, all convertible debt and accrued interest has been converted to equity and no convertible debt remains outstanding. In relation to this transaction, the Company recorded a debt discount of $4,239,000 related to the fair market value of warrants issued as noted above. The debt discount, which was based on an imputed interest rate, is being amortized on a straight-line basis over the life of the convertible debt. During the nine months ended September 30, 2019 and 2018, convertible debt and accrued interest of approximately $3.1 million and $1.4 million, net of unamortized debt discount of $596,916 and $586,804, respectively, were converted into 1,258,608 and 475,001 shares of common stock, respectively, at the conversion rate of $3.00 per share. During the nine months ended September 30, 2019 and 2018, 405,000 and 813,750 warrants issued in connection with the convertible debt were exercised, resulting in the issuance of 404,490 and 813,540 shares of common stock, respectively. September 30, December 31, 2019 2018 Convertible debt $ - $ 3,075,000 Remaining unamortized debt discount and debt issue costs - (1,030,887 ) Convertible debt, net of debt discount and debt issue costs $ - $ 2,044,113 Amortization of debt discount for the three months ended September 30, 2019 and 2018 was $114,210 and $236,527, respectively and amortization of debt discount for the nine months ended September 30, 2019 and 2018 was $356,306 and $858,624, respectively. |
Share Based Payments and Stock
Share Based Payments and Stock Options | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
SHARE BASED PAYMENTS AND STOCK OPTIONS | 8. SHARE BASED PAYMENTS AND STOCK OPTIONS The Company accounts for share-based payments through the measurement and recognition of compensation expense for share-based payment awards made to employees and directors of the Company, including stock options and restricted shares. The following table presents share-based payment expense and new shares issued for the three and nine months ended September 30, 2019 and 2018. Three Months Ended Nine Months Ended 2019 2018 2019 2018 Total non-cash share-based compensation $ 553,492 $ 367,098 $ 1,075,735 $ 920,446 On March 6, 2014, the Company’s Board of Directors (the “Board”) and majority stockholders approved the 2014 Equity Incentive Plan (the “2014 Plan”) pursuant to which the Company may grant incentive and non-statutory options to employees, nonemployee members of the Board, consultants and other independent advisors who provide services to the Company. The maximum shares of Common Stock which may be issued over the term of the 2014 Plan shall not exceed 2,500,000 shares. Awards under the 2014 Plan are made by the Board. Options under the plan are to be issued at the market price of the stock on the day of the grant except to those issued to a ten-percent stockholder which is required to be issued at a price not less than 110% of the fair market value on the day of the grant. Each option is exercisable at such time or times, during such period and for such numbers of shares shall be determined by the plan administrator. No option may be exercisable for more than ten years (five years in the case of an incentive stock option granted to a ten-percent stockholder) from the date of grant. As of the date of this filing, there are a total of 2,113,834 options issued under the 2014 Plan (of which 1,718,334 options have been exercised and 395,500 remain outstanding), 375,000 shares of Common Stock issued, and 11,166 shares of Common Stock available to be issued. On January 7, 2018, the Board adopted the 2018 Equity Compensation Plan (the “2018 Plan”) and on April 20, 2018, the shareholders approved the 2018 Plan. The 2018 Plan is administered by the Board. The maximum number of shares of Common Stock which may be issued over the term of the plan shall not exceed 2,500,000 shares. The Board may grant options to purchase shares of Common Stock, stock appreciation rights, restricted stock units, restricted or unrestricted shares of Common Stock, performance shares, performance units, other cash-based awards and other stock-based awards. The Board may delegate authority to the chief executive officer and/or other executive officers to grant options and other awards to employees (other than themselves), subject to applicable law and the 2018 Plan. No options, stock purchase rights or awards may be made under the 2018 Plan on or after the ten-year anniversary of the adoption of the 2018 Plan by the Board, but the 2018 Plan will continue thereafter while previously granted options, stock appreciation rights or awards remain subject to the 2018 Plan. Options granted under the 2018 Plan may be either “incentive stock options” that are intended to meet the requirements of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) or “nonstatutory stock options” that do not meet the requirements of Section 422 of the Code. The Board will determine the exercise price of options granted under the 2018 Plan. The exercise price of stock options may not be less than the fair market value, on the date of grant, per share of our Common Stock issuable upon exercise of the option (or 110% of fair market value in the case of incentive options granted to a ten-percent stockholder). No option may be exercisable for more than ten years (five years in the case of an incentive stock option granted to a ten-percent stockholder) from the date of grant. Options outstanding at September 30, 2019 are as follows: Options Shares Weight - Average Exercise Price Weighted - Average Remaining Contractual Term Weighted - Average Grant Date Fair Value Outstanding at December 31, 2018 1,815,500 $ 1.66 2.65 years $ .78 Granted 925,000 3.01 $ 1.98 Exercised (657,500 ) .72 .16 Forfeited or expired - Outstanding at September 30, 2019 2,083,000 $ 2.56 3.57 years $ 1.51 Options vested at September 30, 2019 1,139,666 $ 2.10 2.95 years $ 1.08 |
Stock Purchase Warrants
Stock Purchase Warrants | 9 Months Ended |
Sep. 30, 2019 | |
Warrants and Rights Note Disclosure [Abstract] | |
STOCK PURCHASE WARRANTS | 9. STOCK PURCHASE WARRANTS A summary of the status of the Company's outstanding stock purchase warrants as of September 30, 2019 is as follows: Warrants Weighted - Average Exercise Price Outstanding at December 31, 2018 $ 3,279,667 $ 1.94 Issued 2,061,629 3.50 Exercised (1,549,965 ) .35 Forfeited - Outstanding at September 30, 2019 3,791,331 $ 3.25 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 10. EARNINGS PER SHARE Potentially dilutive securities, issued by the Company, were comprised of the following: September 30, September 30, Stock purchase warrants 3,791,331 3,179,500 Convertible debt warrants 131,250 536,250 Options 2,083,000 1,534,000 Total 6,005,581 5,249,750 The following table sets forth the composition of the weighted average shares (denominator) used in the basic and dilutive earnings per share computation for the three and nine months ended September 30, 2019 and 2018. Three Months Ended Nine months ended September 30, September 30, September 30, September 30, Net income (loss) $ 1,049,699 $ (784,573 ) $ 2,341,120 $ (2,668,998 ) Weighted average shares outstanding, basic 35,707,788 25,646,011 31,523,679 22,056,665 Effect of dilutive common stock equivalents 6,005,581 - 6,005,581 - Adjusted weighted average shares outstanding, dilutive 41,713,369 25,646,011 37,529,260 22,056,665 Basic income (loss) per shares $ .03 $ (.03 ) $ .07 $ (.12 ) Dilutive income (loss) per share $ .03 $ (.03 ) $ .06 $ (.12 ) |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS | 12. ACQUISITIONS The Company accounts for acquisitions in accordance with ASC 805 “Business Combinations.” Assets acquired and liabilities assumed are recorded in the accompanying consolidated balance sheets at their estimated fair values, as of the acquisition date. For all acquisitions, the preliminary allocation of the purchase price was based upon a preliminary valuation, and the Company’s estimates and assumptions are subject to change within the measurement period as valuations are finalized. The Company has not made any adjustments to the preliminary valuations. The table below represents the allocation of the preliminary purchase price to the acquired net assets during the nine months ended September 30, 2019. Grand Rapids Hydro Green Chlorophyll Reno Hydroponics Palm Total Inventory $ 1,453,100 $ 1,038,600 $ 1,441,000 $ 238,000 $ 465,500 $ 4,636,200 Prepaids and other current assets 14,100 22,000 - 36,100 Furniture and equipment 50,000 100,000 100,000 25,000 25,000 300,000 Goodwill 2,376,900 2,305,900 2,596,100 516,300 554,000 8,349,200 Total $ 3,880,000 $ 3,458,600 $ 4,159,100 $ 779,300 $ 1,044,500 $ 13,321,500 The table below represents the consideration paid for the net assets acquired in business combinations. Grand Rapids Hydro Green Chlorophyll Reno Hydroponics Palm Total Cash $ 2,350,000 $ 2,647,700 $ 3,659,100 $ 525,000 $ 800,000 $ 9,981,800 Common stock 1,530,000 810,900 500,000 254,300 244,500 3,339,700 Total $ 3,880,000 $ 3,458,600 $ 4,159,100 $ 779,300 $ 1,044,500 $ 13,321,500 The following table discloses the date of the acquisitions noted above and the revenue and earnings included in the consolidated income statement from the date of acquisition to the period ended September 30, 2019. Grand Rapids Hydro Green Chlorophyll Reno Hydroponics Palm Total Acquisition date 9/3/2019 5/14/2019 1/21/2019 2/11/2019 2/7/2019 Revenue $ 612,900 $ 3,006,100 $ 4,489,000 $ 1,427,600 $ 2,318,500 $ 11,854,100 Earnings $ 121,400 $ 703,100 $ 668,900 $ 233,600 $ 497,500 $ 2,224,500 The following represents the pro forma consolidated income statement as if the acquisitions had been included in the consolidated results of the Company for the entire period for the nine months ended September 30, 2018. Pro forma consolidated income statement September 30, Revenue $ 5,552,000 Earnings $ 504,400 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS The Company has evaluated events and transaction occurring subsequent to September 30, 2019 up to the date of this filing of these consolidated financial statements. These statements contain all necessary adjustments and disclosures resulting from that evaluation. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The financial statements are prepared under the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 105-10, Generally Accepted Accounting Principles The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. |
Basis of Presentation - Unaudited Interim Financial Information | Basis of Presentation - Unaudited Interim Financial Information The accompanying interim condensed consolidated financial statements are unaudited. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all of the normal recurring adjustments necessary to present fairly the financial position and results of operations as of and for the periods presented. The interim results are not necessarily indicative of the results to be expected for the full year or any future period. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The Company believes that the disclosures are adequate to make the interim information presented not misleading. These consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K filed on April 1, 2019 for the years ended December 31, 2018 and 2017. |
Leases | Leases We assess whether an arrangement is a lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We have elected the practical expedient to not separate lease and non-lease components for all assets. Operating lease assets and operating lease liabilities are calculated based on the present value of the future minimum lease payments over the lease term at the lease start date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease start date in determining the present value of future payments. The operating lease asset is increased by any lease payments made at or before the lease start date and reduced by lease incentives and initial direct costs incurred. The lease term includes options to renew or terminate the lease when it is reasonably certain that we will exercise that option. The exercise of lease renewal options is at our sole discretion. The depreciable life of lease assets and leasehold improvements are limited by the lease term. Lease expense for operating leases is recognized on a straight-line basis over the lease term. |
Segment Reporting | Segment Reporting Management makes significant operating decisions based upon the analysis of the entire Company and financial performance is evaluated on a company-wide basis. Accordingly, the various products sold are aggregated into one reportable operating segment as under guidance in the FASB ASC Topic 280 for segment reporting. |
Use of Estimates | Use of Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported revenues and expenses during the reporting period. Actual results could vary from the estimates that were used. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with FASB ACS 740, Income Taxes, which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. The differences related principally to depreciation of property and equipment, reserve for obsolete inventory and bad debt. Deferred tax assets and liabilities represent the future tax consequence for those differences, which will either be deductible or taxable when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established to reduce deferred tax assets to the amount expected to be realized. The Company adopted the provisions of FASB ACS 740-10-25, which prescribes a recognition threshold and measurement attribute for the recognition and measurement of tax positions taken or expected to be taken in income tax returns. FASB ASC 740-10-25 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with tax positions. The Company's tax returns are subject to tax examinations by U.S. federal and state authorities until respective statute of limitation. Currently, the 2018, 2017 and 2016 tax years are open and subject to examination by taxing authorities. However, the Company is not currently under audit nor has the Company been contacted by any of the taxing authorities. The Company does not have any accrual for uncertain tax positions as of September 30, 2019. It is not anticipated that unrecognized tax benefits would significantly increase or decrease within 12 months of the reporting date. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | September 30, December 31, Vehicles $ 770,962 $ 535,857 Leasehold improvements 760,794 441,725 Furniture, fixtures and equipment 2,699,395 1,417,061 4,231,151 2,394,643 (Accumulated depreciation) (1,112,669 ) (573,822 ) Property and Equipment, net $ 3,118,482 $ 1,820,821 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | September 30, December 31, 2019 2018 Long term debt is as follows: Hitachi Capital, interest at 8.0% per annum, payable in monthly installments of $631.13 beginning September 2015 through August 2019, secured by delivery equipment with a book value of $24,910 $ - $ 3,211 Wells Fargo Equipment Finance, interest at 3.5% per annum, payable in monthly installments of $518.96 beginning April 2016 through March 2021, secured by warehouse equipment with a book value of $25,437 8,595 12,976 Notes payable issued in connection with seller financing of assets acquired, interest at 1%, payable in 24 installments of $24,996, due February 2020 125,000 350,000 Notes payable issued in connection with seller financing of assets acquired, interest at 1%, payable in 12 installments of $6,003, due September 2019 - 54,000 Notes payable issued in connection with seller financing of assets acquired, interest at 8.125%, payable in 60 installments of $8,440, due August 2023 338,766 392,252 $ 472,361 $ 812,439 Less Current Maturities (207,582 ) (436,813 ) Total Long-Term Debt $ 264,779 $ 375,626 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of lease balances within our condensed consolidated balance sheet | September 30, 2019 Right to use assets, operating lease assets $ 7,667,538 Current lease liability $ 1,935,129 Non-current lease liability 5,869,512 $ 7,804,641 |
Schedule of other information related to leases | September 30, 2019 Weighted average remaining lease term 3.9 years Weighted average discount rate 7.6 % Operating lease assets obtained for operating lease liabilities $ 3,050,164 |
Schedule of future minimum rental payments | Maturities of lease liabilities 2019 $ 537,140 2020 2,393,058 2021 2,422,455 2022 1,891,783 2023 1,297,329 2024 512,269 2025 349,573 2026 45,438 Total lease payments 9,449,045 Less: Imputed interest (1,644,404 ) Lease Liability at September 30, 2019 $ 7,804,641 |
Convertible Debt (Tables)
Convertible Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of convertible debt | September 30, December 31, 2019 2018 Convertible debt $ - $ 3,075,000 Remaining unamortized debt discount and debt issue costs - (1,030,887 ) Convertible debt, net of debt discount and debt issue costs $ - $ 2,044,113 |
Share Based Payments and Stoc_2
Share Based Payments and Stock Options (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of share-based payment expense and new shares issued | Three Months Ended Nine Months Ended 2019 2018 2019 2018 Total non-cash share-based compensation $ 553,492 $ 367,098 $ 1,075,735 $ 920,446 |
Schedule of option outstanding | Options Shares Weight - Average Exercise Price Weighted - Average Remaining Contractual Term Weighted - Average Grant Date Fair Value Outstanding at December 31, 2018 1,815,500 $ 1.66 2.65 years $ .78 Granted 925,000 3.01 $ 1.98 Exercised (657,500 ) .72 .16 Forfeited or expired - Outstanding at September 30, 2019 2,083,000 $ 2.56 3.57 years $ 1.51 Options vested at September 30, 2019 1,139,666 $ 2.10 2.95 years $ 1.08 |
Stock Purchase Warrants (Tables
Stock Purchase Warrants (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of outstanding stock warrants | Warrants Weighted - Average Exercise Price Outstanding at December 31, 2018 $ 3,279,667 $ 1.94 Issued 2,061,629 3.50 Exercised (1,549,965 ) .35 Forfeited - Outstanding at September 30, 2019 3,791,331 $ 3.25 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of potentially dilutive securities | September 30, September 30, Stock purchase warrants 3,791,331 3,179,500 Convertible debt warrants 131,250 536,250 Options 2,083,000 1,534,000 Total 6,005,581 5,249,750 |
Schedule of weighted average shares basic and dilutive earnings per share | Three Months Ended Nine months ended September 30, September 30, September 30, September 30, Net income (loss) $ 1,049,699 $ (784,573 ) $ 2,341,120 $ (2,668,998 ) Weighted average shares outstanding, basic 35,707,788 25,646,011 31,523,679 22,056,665 Effect of dilutive common stock equivalents 6,005,581 - 6,005,581 - Adjusted weighted average shares outstanding, dilutive 41,713,369 25,646,011 37,529,260 22,056,665 Basic income (loss) per shares $ .03 $ (.03 ) $ .07 $ (.12 ) Dilutive income (loss) per share $ .03 $ (.03 ) $ .06 $ (.12 ) |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of purchase price | Grand Rapids Hydro Green Chlorophyll Reno Hydroponics Palm Total Inventory $ 1,453,100 $ 1,038,600 $ 1,441,000 $ 238,000 $ 465,500 $ 4,636,200 Prepaids and other current assets 14,100 22,000 - 36,100 Furniture and equipment 50,000 100,000 100,000 25,000 25,000 300,000 Goodwill 2,376,900 2,305,900 2,596,100 516,300 554,000 8,349,200 Total $ 3,880,000 $ 3,458,600 $ 4,159,100 $ 779,300 $ 1,044,500 $ 13,321,500 Grand Rapids Hydro Green Chlorophyll Reno Hydroponics Palm Total Cash $ 2,350,000 $ 2,647,700 $ 3,659,100 $ 525,000 $ 800,000 $ 9,981,800 Common stock 1,530,000 810,900 500,000 254,300 244,500 3,339,700 Total $ 3,880,000 $ 3,458,600 $ 4,159,100 $ 779,300 $ 1,044,500 $ 13,321,500 |
Schedule of revenue and earnings included in consolidated income statement | Grand Rapids Hydro Green Chlorophyll Reno Hydroponics Palm Total Acquisition date 9/3/2019 5/14/2019 1/21/2019 2/11/2019 2/7/2019 Revenue $ 612,900 $ 3,006,100 $ 4,489,000 $ 1,427,600 $ 2,318,500 $ 11,854,100 Earnings $ 121,400 $ 703,100 $ 668,900 $ 233,600 $ 497,500 $ 2,224,500 |
Schedule of proforma consolidated income statement | September 30, Revenue $ 5,552,000 Earnings $ 504,400 |
Nature of Operations (Details)
Nature of Operations (Details) | 9 Months Ended |
Sep. 30, 2019Store | |
Nature of Operations (Textual) | |
Number of stores | 23 |
Retail outlets, description | GrowGeneration is the largest chain of hydroponic garden centers in North America and is a leading marketer and distributor of nutrients, growing media, advanced indoor and greenhouse lighting, ventilation systems and accessories for hydroponic gardening. Today, the Company owns and operates a chain of twenty three (23) retail hydroponic/gardening stores, with five (5) located in the state of Colorado, five (5) in the state of California, four (4) in the state of Michigan, two (2) in the state of Nevada, one (1) in the state of Washington, two (2) in the State of Oklahoma, one (1) in the state of Rhode Island,, three (3) in Maine, and an online e-commerce store, HeavyGardens. In addition, two new locations one in Tulsa, OK and one in Oklahoma City, OK are expected to open in Q4 2019. Our plan is to acquire, open and operate hydroponic/gardening stores and related businesses throughout the United States and Canada. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies (Textual) | |
Unrecognized tax benefits period | 12 months |
Leases initial term | 12 months |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Details) - USD ($) | Jan. 02, 2019 | Sep. 30, 2019 |
Recent Accounting Pronouncements (Textual) | ||
Leases initial term | 12 months | |
Operating lease assets and liabilities | $ 3,200,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | $ 4,231,151 | $ 2,394,643 |
(Accumulated depreciation) | (1,112,669) | (573,822) |
Property and Equipment, net | 3,118,482 | 1,820,821 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 770,962 | 535,857 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 760,794 | 441,725 |
Furniture, fixtures and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | $ 2,699,395 | $ 1,417,061 |
Property and Equipment (Detai_2
Property and Equipment (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Property and Equipment (Textual) | ||||
Depreciation expense | $ 247,715 | $ 102,983 | $ 538,847 | $ 229,415 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Long-Term Debt | $ 472,361 | $ 812,439 |
Less Current Maturities | (207,582) | (436,813) |
Total Long-Term Debt | 264,779 | 375,626 |
Hitachi Capital [Member] | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 3,211 | |
Wells Fargo Equipment Finance [Member] | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 8,595 | 12,976 |
Notes payable issued in connection with seller financing [Member] | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 125,000 | 350,000 |
Notes payable issued in connection with seller financing one [Member] | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 54,000 | |
Notes payable issued in connection with seller financing two [Member] | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | $ 338,766 | $ 392,252 |
Long-Term Debt (Details Textual
Long-Term Debt (Details Textual) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)Installments | Sep. 30, 2018USD ($) | |
Long-Term Debt (Textual) | ||||
Interest expense | $ 27,067 | $ (4,795) | $ 35,757 | $ 14,535 |
Hitachi Capital [Member] | ||||
Long-Term Debt (Textual) | ||||
Long term debt, monthly payment | $ 631.13 | |||
Long term debt maturity date, description | Beginning September 2015 through August 2019. | |||
Long-term debt, book value | $ 24,910 | $ 24,910 | ||
Interest rate per annum | 8.00% | 8.00% | ||
Wells Fargo Equipment Finance [Member] | ||||
Long-Term Debt (Textual) | ||||
Long term debt, monthly payment | $ 518.96 | |||
Long term debt maturity date, description | Beginning April 2016 through March 2021. | |||
Long-term debt, book value | $ 25,437 | $ 25,437 | ||
Interest rate per annum | 3.50% | 3.50% | ||
Notes payable issued in connection with seller financing [Member] | ||||
Long-Term Debt (Textual) | ||||
Long term debt, monthly payment | $ 24,996 | |||
Long term debt maturity date, description | Due February 2020. | |||
Interest rate per annum | 1.00% | 1.00% | ||
Number of installments | Installments | 24 | |||
Notes payable issued in connection with seller financing one [Member] | ||||
Long-Term Debt (Textual) | ||||
Long term debt, monthly payment | $ 6,003 | |||
Long term debt maturity date, description | Due September 2019. | |||
Interest rate per annum | 1.00% | 1.00% | ||
Number of installments | Installments | 12 | |||
Notes payable issued in connection with seller financing two [Member] | ||||
Long-Term Debt (Textual) | ||||
Long term debt, monthly payment | $ 8,440 | |||
Long term debt maturity date, description | Due August 2023. | |||
Interest rate per annum | 8.125% | 8.125% | ||
Number of installments | Installments | 60 |
Leases (Details)
Leases (Details) | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Right to use assets, operating lease assets | $ 7,667,538 |
Current lease liability | 1,935,129 |
Non-current lease liability | 5,869,512 |
Total | $ 7,804,641 |
Leases (Details 1)
Leases (Details 1) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Leases [Abstract] | |
Weighted average remaining lease term | 3 years 10 months 25 days |
Weighted average discount rate | 7.60% |
Operating lease assets obtained for operating lease liabilities | $ 3,050,164 |
Leases (Details 2)
Leases (Details 2) | Sep. 30, 2019USD ($) |
Maturities of lease liabilities | |
2019 | $ 537,140 |
2020 | 2,393,058 |
2021 | 2,422,455 |
2022 | 1,891,783 |
2023 | 1,297,329 |
2024 | 512,269 |
2025 | 349,573 |
2026 | 45,438 |
Total lease payments | 9,449,045 |
Less: Imputed interest | (1,644,404) |
Lease Liability at September 30, 2019 | $ 7,804,641 |
Leases (Details Textual)
Leases (Details Textual) | 9 Months Ended |
Sep. 30, 2019 | |
Leases (Textual) | |
Lease term, Description | Short-term disclosures include only those leases with a term greater than one month and 12 months or less, and expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less, that do not include an option to purchase the underlying asset that we are reasonably certain to exercise, are not recorded on the balance sheet. |
Minimum [Member] | |
Leases (Textual) | |
Remaining leases terms | 1 year |
Extend the leases for additional terms | 3 years |
Maximum [Member] | |
Leases (Textual) | |
Remaining leases terms | 5 years |
Extend the leases for additional terms | 5 years |
Convertible Debt (Details)
Convertible Debt (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Convertible debt | $ 3,075,000 | |
Remaining unamortized debt discount and debt issue costs | (1,030,887) | |
Convertible debt, net of debt discount and debt issue costs | $ 2,044,113 |
Convertible Debt (Details Textu
Convertible Debt (Details Textual) - USD ($) | Jan. 12, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Convertible Debt (Textual) | ||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||
Debt discount related to fair value of warrants | $ 4,239,000 | $ 4,239,000 | ||||
Amortization of debt discount | $ 114,210 | $ 236,527 | $ 356,306 | $ 858,624 | ||
Converted shares of common stock | 404,490 | 813,540 | ||||
Convertible Debt [Member] | ||||||
Convertible Debt (Textual) | ||||||
Maturity date | Jan. 12, 2021 | |||||
Conversion price | $ 3 | $ 3 | ||||
Description of convertible debt | Principal due and interest accrued on the notes will automatically convert into shares of Common Stock, at the conversion price, if at any time during the term of the notes, commencing twelve (12) months from the date of issuance, the Common Stock trades minimum daily volume of at least 50,000 shares for twenty (20) consecutive days with a volume weighted average price of at least $4.00 per share. | |||||
Convertible debt and accrued interest | $ 3,100,000 | $ 1,400,000 | ||||
Net of unamortized debt discount | $ 596,916 | $ 586,804 | $ 596,916 | $ 586,804 | ||
Converted shares of common stock | 1,258,608 | 475,001 | ||||
Conversion rate per shares | $ 3 | |||||
Issue of warrants | 405,000 | 813,750 | ||||
Private Placement [Member] | ||||||
Convertible Debt (Textual) | ||||||
Offering units of shares | 36 | |||||
Securities unit price | $ 250,000 | |||||
Principal amount | $ 250,000 | |||||
Warrant term | 3 years | |||||
Common stock, par value | $ 0.001 | |||||
Warrants exercise price | $ 0.01 | |||||
Warrant holder to purchase shares | 37,500 | |||||
Percentage of unsecured convertible promissory note | 1.00% |
Share Based Payments and Stoc_3
Share Based Payments and Stock Options (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | ||||
Total non-cash share-based compensation | $ 553,492 | $ 367,098 | $ 1,075,735 | $ 920,446 |
Share Based Payments and Stoc_4
Share Based Payments and Stock Options (Details 1) - Options [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares, Outstanding beginning balance | 1,815,500 | |
Shares, Granted | 925,000 | |
Shares, Exercised, | (657,500) | |
Shares, Forfeited or expired | ||
Shares, Outstanding ending balance | 2,083,000 | 1,815,500 |
Shares, Options vested | 1,139,666 | |
Weighted - Average Exercise Price, Outstanding beginning balance | $ 1.66 | |
Weighted - Average Exercise Price, Granted | 3.01 | |
Weighted - Average Exercise Price, Exercised | .72 | |
Weighted - Average Exercise Price, Forfeited or expired | ||
Weighted - Average Exercise Price, Outstanding ending balance | 2.56 | $ 1.66 |
Weighted - Average Exercise Price, Options vested | $ 2.10 | |
Weighted - Average Remaining Contractual Term, Outstanding | 3 years 6 months 25 days | 2 years 7 months 24 days |
Weighted - Average Remaining Contractual Term, Options vested | 2 years 11 months 12 days | |
Weighted - Average Grant Date Fair Value, Outstanding beginning balance | $ .78 | |
Weighted - Average Grant Date Fair Value, Granted | 1.98 | |
Weighted - Average Grant Date Fair Value, Exercised | .16 | |
Weighted - Average Grant Date Fair Value, Forfeited or expired | ||
Weighted - Average Grant Date Fair Value Outstanding ending balance | 1.51 | $ .78 |
Weighted - Average Grant Date Fair Value, Options vested | $ 1.08 |
Share Based Payments and Stoc_5
Share Based Payments and Stock Options (Details Textual) - shares | Mar. 06, 2014 | Sep. 30, 2019 | Jan. 07, 2018 |
Share Based Payments and Stock Options (Textual) | |||
Description of stock options | Options under the plan are to be issued at the market price of the stock on the day of the grant except to those issued to a ten-percent stockholder which is required to be issued at a price not less than 110% of the fair market value on the day of the grant. Each option is exercisable at such time or times, during such period and for such numbers of shares shall be determined by the plan administrator. No option may be exercisable for more than ten years (five years in the case of an incentive stock option granted to a ten-percent stockholder) from the date of grant. | Options granted under the 2018 Plan may be either "incentive stock options" that are intended to meet the requirements of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") or "nonstatutory stock options" that do not meet the requirements of Section 422 of the Code. The Board will determine the exercise price of options granted under the 2018 Plan. The exercise price of stock options may not be less than the fair market value, on the date of grant, per share of our Common Stock issuable upon exercise of the option (or 110% of fair market value in the case of incentive options granted to a ten-percent stockholder). No option may be exercisable for more than ten years (five years in the case of an incentive stock option granted to a ten-percent stockholder) from the date of grant. | |
Stock issued over the term of the plan | 2,500,000 | 2,500,000 | |
Stock Option [Member] | |||
Share Based Payments and Stock Options (Textual) | |||
Description of stock options | As of the date of this filing, there are a total of 2,113,834 options issued under the 2014 Plan (of which 1,718,334 options have been exercised and 395,500 remain outstanding), 375,000 shares of Common Stock issued, and 11,166 shares of Common Stock available to be issued. |
Stock Purchase Warrants (Detail
Stock Purchase Warrants (Details) - Warrant [Member] - $ / shares | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding at December 31, 2018 | 3,791,331 | 3,279,667 |
Issued | 2,061,629 | |
Exercised | (1,549,965) | |
Forfeited | ||
Outstanding at September 30, 2019 | 3,791,331 | 3,279,667 |
Weighted Average Exercise Price, Outstanding beginning balance | $ 3.25 | $ 1.94 |
Weighted Average Exercise Price, Granted/issued | 3.50 | |
Weighted Average Exercise Price, Exercised | 0.35 | |
Weighted Average Exercise Price, Forfeited | ||
Weighted Average Exercise Price, Outstanding ending balance | $ 3.25 | $ 1.94 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities warrants and options | 6,005,581 | 5,249,750 |
Convertible debt warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities warrants and options | 131,250 | 536,250 |
Stock purchase warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities warrants and options | 3,791,331 | 3,179,500 |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities warrants and options | 2,083,000 | 1,534,000 |
Earnings Per Share (Details 1)
Earnings Per Share (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Nature Of Operations Textual [Abstract] | ||||
Net income (loss) | $ 1,049,699 | $ (784,573) | $ 2,341,120 | $ (2,668,998) |
Weighted average shares outstanding, basic | 35,707,788 | 25,646,011 | 31,523,679 | 22,056,665 |
Effect of dilutive common stock equivalents | 6,005,581 | 6,005,581 | ||
Adjusted weighted average shares outstanding, dilutive | 41,713,369 | 25,646,011 | 37,529,260 | 22,056,665 |
Basic income (loss) per shares | $ 0.03 | $ (.03) | $ 0.07 | $ (0.12) |
Dilutive income (loss) per share | $ 0.03 | $ (.03) | $ 0.06 | $ (.12) |
Acquisitions (Details)
Acquisitions (Details) | Sep. 30, 2019USD ($) |
Business Acquisition [Line Items] | |
Inventory | $ 4,636,200 |
Prepaids and other current assets | 36,100 |
Furniture and equipment | 300,000 |
Goodwill | 8,349,200 |
Total | 13,321,500 |
Cash | 9,981,800 |
Common stock | 3,339,700 |
Total | 13,321,500 |
Grand Rapids Hydro [Member] | |
Business Acquisition [Line Items] | |
Inventory | 1,453,100 |
Prepaids and other current assets | |
Furniture and equipment | 50,000 |
Goodwill | 2,376,900 |
Total | 3,880,000 |
Cash | 2,350,000 |
Common stock | 1,530,000 |
Total | 3,880,000 |
Green Life Garden [Member] | |
Business Acquisition [Line Items] | |
Inventory | 1,038,600 |
Prepaids and other current assets | 14,100 |
Furniture and equipment | 100,000 |
Goodwill | 2,305,900 |
Total | 3,458,600 |
Cash | 2,647,700 |
Common stock | 810,900 |
Total | 3,458,600 |
Chlorophyll [Member] | |
Business Acquisition [Line Items] | |
Inventory | 1,441,000 |
Prepaids and other current assets | 22,000 |
Furniture and equipment | 100,000 |
Goodwill | 2,596,100 |
Total | 4,159,100 |
Cash | 3,659,100 |
Common stock | 500,000 |
Total | 4,159,100 |
Reno Hydroponics [Member] | |
Business Acquisition [Line Items] | |
Inventory | 238,000 |
Prepaids and other current assets | |
Furniture and equipment | 25,000 |
Goodwill | 516,300 |
Total | 779,300 |
Cash | 525,000 |
Common stock | 254,300 |
Total | 779,300 |
Palm Springs Hydroponics [Member] | |
Business Acquisition [Line Items] | |
Inventory | 465,500 |
Prepaids and other current assets | |
Furniture and equipment | 25,000 |
Goodwill | 554,000 |
Total | 1,044,500 |
Cash | 800,000 |
Common stock | 244,500 |
Total | $ 1,044,500 |
Acquisitions (Details 1)
Acquisitions (Details 1) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Business Acquisition [Line Items] | |
Revenue | $ 11,854,100 |
Earnings | $ 2,224,500 |
Grand Rapids Hydro [Member] | |
Business Acquisition [Line Items] | |
Acquisition date | Sep. 3, 2019 |
Revenue | $ 612,900 |
Earnings | $ 121,400 |
Green Life Garden [Member] | |
Business Acquisition [Line Items] | |
Acquisition date | May 14, 2019 |
Revenue | $ 3,006,100 |
Earnings | $ 703,100 |
Chlorophyll [Member] | |
Business Acquisition [Line Items] | |
Acquisition date | Jan. 21, 2019 |
Revenue | $ 4,489,000 |
Earnings | $ 668,900 |
Reno Hydroponics [Member] | |
Business Acquisition [Line Items] | |
Acquisition date | Feb. 11, 2019 |
Revenue | $ 1,427,600 |
Earnings | $ 233,600 |
Palm Springs Hydroponics [Member] | |
Business Acquisition [Line Items] | |
Acquisition date | Feb. 7, 2019 |
Revenue | $ 2,318,500 |
Earnings | $ 497,500 |
Acquisitions (Details 2)
Acquisitions (Details 2) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Business Combinations [Abstract] | |
Revenue | $ 5,552,000 |
Earnings | $ 504,400 |