Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 15, 2021 | |
Registrant Name | Alpine 4 Holdings, Inc. | |
Registrant CIK | 0001606698 | |
SEC Form | 10-Q | |
Period End date | Mar. 31, 2021 | |
Fiscal Year End | --12-31 | |
Tax Identification Number (TIN) | 46-5482689 | |
Filer Category | Non-accelerated Filer | |
Current with reporting | Yes | |
Shell Company | false | |
Small Business | true | |
Emerging Growth Company | true | |
Ex Transition Period | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Incorporation, State or Country Code | DE | |
Entity FIle Number | 000-55205 | |
Entity Interactive data current | Yes | |
Entity Address, Address Line One | 2525 E Arizona Biltmore Circle | |
Entity Address, Address Line Two | Suite 237 | |
Entity Address, City or Town | Phoenix | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85016 | |
City Area Code | 480 | |
Local Phone Number | 702-2431 | |
Common Class A | ||
Number of common stock shares outstanding | 139,183,509 | |
Common Class B | ||
Number of common stock shares outstanding | 9,023,088 | |
Common Class C | ||
Number of common stock shares outstanding | 12,500,200 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS: | ||
Cash | $ 35,691,473 | $ 277,738 |
Restricted cash | 0 | 444,845 |
Accounts receivable, net | 7,092,279 | 6,484,869 |
Contract assets | 1,456,084 | 717,421 |
Inventory | 3,393,341 | 2,666,602 |
Prepaid expenses and other current assets | 416,682 | 32,301 |
Total current assets | 48,049,859 | 10,623,776 |
Property and equipment, net | 19,094,688 | 19,299,286 |
Intangible asset, net | 14,590,504 | 7,743,084 |
Right of use assets, net | 506,488 | 581,311 |
Goodwill | 2,084,982 | 2,084,982 |
Other non-current assets | 326,744 | 401,744 |
TOTAL ASSETS | 84,653,265 | 40,734,183 |
CURRENT LIABILITIES: | ||
Accounts payable | 3,641,713 | 4,854,467 |
Accrued expenses | 2,682,538 | 2,872,202 |
Contract liabilities | 403,400 | 233,485 |
Notes payable, current portion | 5,647,630 | 7,100,911 |
Notes payable, related parties | 203,672 | 238,651 |
Convertible notes payable, current portion, net of discount of $634,712 and $1,343,624 | 1,470,788 | 562,242 |
Financing lease obligation, current portion | 602,557 | 639,527 |
Operating lease obligation, current portion | 317,463 | 334,500 |
Total current liabilities | 14,969,761 | 16,835,985 |
Notes payable, net of current portion | 7,549,291 | 15,201,450 |
Convertible notes payable, net of current portion | 0 | 1,100,635 |
Financing lease obligations, net of current portion | 15,421,571 | 15,687,176 |
Operating lease obligations, net of current portion | 210,163 | 269,030 |
Deferred tax liability | 428,199 | 428,199 |
TOTAL LIABILITIES | 38,578,985 | 49,522,475 |
STOCKHOLDERS' EQUITY (DEFICIT:): | ||
Additional paid-in capital | 91,982,825 | 30,991,978 |
Accumulated deficit | (45,924,869) | (39,795,401) |
Total stockholders' equity (deficit) | 46,074,280 | (8,788,292) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 84,653,265 | 40,734,183 |
Series B Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY (DEFICIT:): | ||
Preferred stock, value | 5 | 5 |
Series C Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY (DEFICIT:): | ||
Preferred stock, value | 171 | 171 |
Series D Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY (DEFICIT:): | ||
Preferred stock, value | 143 | 0 |
Common Class A | ||
STOCKHOLDERS' EQUITY (DEFICIT:): | ||
Common shares | 13,691 | 12,636 |
Common Class B | ||
STOCKHOLDERS' EQUITY (DEFICIT:): | ||
Common shares | 902 | 902 |
Common Class C | ||
STOCKHOLDERS' EQUITY (DEFICIT:): | ||
Common shares | $ 1,412 | $ 1,417 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument, Unamortized Discount | $ 634,712 | $ 1,343,624 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Series B Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value Per Share | $ 1 | $ 1 |
Preferred Stock, Shares Authorized | 100 | 100 |
Preferred Stock, Shares Issued | 5 | 5 |
Preferred Stock, Shares Outstanding | 5 | 5 |
Series C Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value Per Share | $ 3.50 | $ 3.50 |
Preferred Stock, Shares Authorized | 2,028,572 | 2,028,572 |
Preferred Stock, Shares Issued | 1,714,286 | 1,714,286 |
Preferred Stock, Shares Outstanding | 1,714,286 | 1,714,286 |
Series D Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value Per Share | $ 3.50 | $ 3.50 |
Preferred Stock, Shares Authorized | 1,628,572 | 1,628,572 |
Preferred Stock, Shares Issued | 1,428,570 | 0 |
Preferred Stock, Shares Outstanding | 1,428,570 | 0 |
Common Class A | ||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 195,000,000 | 195,000,000 |
Common Stock, Shares, Issued | 136,923,432 | 126,363,158 |
Common Stock, Shares, Outstanding | 136,923,432 | 126,363,158 |
Common Class B | ||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Common Stock, Shares, Issued | 9,023,088 | 9,023,088 |
Common Stock, Shares, Outstanding | 9,023,088 | 9,023,088 |
Common Class C | ||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 15,000,000 | 15,000,000 |
Common Stock, Shares, Issued | 14,117,267 | 14,162,267 |
Common Stock, Shares, Outstanding | 14,117,267 | 14,162,267 |
Consolidated Statement of Opera
Consolidated Statement of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Text Block [Abstract] | ||
Revenue, net | $ 8,668,405 | $ 8,835,596 |
Cost of revenue | 7,913,786 | 7,075,852 |
Gross Profit | 754,619 | 1,759,744 |
Operating expenses: | ||
General and administrative expenses | 5,826,688 | 2,863,389 |
Total operating expenses | 5,826,688 | 2,863,389 |
Loss from operations | (5,072,069) | (1,103,645) |
Other income (expenses) | ||
Interest expense | (1,471,723) | (1,649,227) |
Change in value of derivative liability | 0 | 2,298,609 |
Gain on extinguishment of debt | 0 | 154,592 |
Gain on forgiveness of debt | 429,540 | 0 |
Change in fair value of contingent consideration | 0 | 500,000 |
Other income (expense) | (15,216) | 50,059 |
Total other income (expenses) | (1,057,399) | 1,354,033 |
Income (loss) before income tax | (6,129,468) | 250,388 |
Income tax (benefit) | 0 | 0 |
Net income (loss) | $ (6,129,468) | $ 250,388 |
Weighted average shares outstanding : | ||
Basic | 154,616,490 | 127,207,693 |
Diluted | 154,616,490 | 138,036,023 |
Basic Income (loss) per share | $ (0.04) | $ 0 |
Diluted income (loss) per share | $ (0.04) | $ (0.01) |
Consolidated Statements Changes
Consolidated Statements Changes In Stockholders' Equity (DEFICIT) (Unaudited) - USD ($) | Series B Preferred Stock [Member] | Series C Preferred Stock [Member] | Series D Preferred Stock [Member] | Common Stock Class A | Common Stock Class B | Common Stock Class C | Additional Paid-In Capital | Accumulated Deficit | Total |
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2019 | $ 10,007 | $ 500 | $ 996 | $ 19,763,883 | $ (31,745,528) | $ (11,970,142) | |||
Shares, Outstanding, Beginning Balance at Dec. 31, 2019 | 100,070,161 | 5,000,000 | 9,955,200 | ||||||
Issuance of shares of common stock for convertible note payable and accrued interest | $ 464 | 696,868 | 697,332 | ||||||
Issuance of shares of common stock for convertible note payable and accrued interest, shares | 4,648,879 | ||||||||
Issuance of shares of common stock for cash | $ 394 | 249,606 | 250,000 | ||||||
Issuance of shares of common stock for cash, shares | 3,941,753 | ||||||||
Issuance of shares of common stock for debt settlement | $ 162 | $ 162 | 330,204 | 330,528 | |||||
Issuance of shares of common stock for debt settlement, shares | 1,617,067 | 1,617,067 | |||||||
Issuance of shares of common stock for penalty | $ 30 | 44,670 | 44,700 | ||||||
Issuance of shares of common stock for penalty , shares | 300,000 | ||||||||
Issuance of shares of common stock for compensation | $ 402 | 603,061 | 603,463 | ||||||
Issuance of shares of common stock for compensation, shares | 4,023,088 | ||||||||
Issuance of shares of series B preferred stock | $ 5 | 5 | |||||||
Issuance of shares of series B preferred stock, shares | 5 | ||||||||
Share-based compensation expense | 19,556 | 19,556 | |||||||
Net loss | 250,388 | 250,388 | |||||||
Stockholders' Equity Attributable to Parent, Ending Balance at Mar. 31, 2020 | $ 5 | $ 11,057 | $ 902 | $ 1,158 | 21,707,848 | (31,495,140) | (9,774,170) | ||
Shares, Outstanding, Ending Balance at Mar. 31, 2020 | 5 | 110,577,860 | 9,023,088 | 11,572,267 | |||||
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2020 | $ 5 | $ 171 | $ 12,636 | $ 902 | $ 1,417 | 30,991,978 | (39,795,401) | (8,788,292) | |
Shares, Outstanding, Beginning Balance at Dec. 31, 2020 | 5 | 1,714,286 | 126,363,158 | 9,023,088 | 14,162,267 | ||||
Issuance of shares of common stock for cash, net of offering costs | $ 985 | 54,301,997 | 54,302,982 | ||||||
Issuance of shares of common stock for cash, net of offering costs, shares | 9,857,397 | ||||||||
Issuance of shares of common stock for convertible note payable and accrued interest | $ 70 | 109,760 | 109,830 | ||||||
Issuance of shares of common stock for convertible note payable and accrued interest, shares | 702,877 | ||||||||
Issuance of shares of series D preferred stock for acquisition | $ 143 | 6,653,166 | 6,653,309 | ||||||
Issuance of shares of series D preferred stock for acquisition, shares | 1,428,570 | ||||||||
Repurchase of class C common stock | $ (5) | (185,845) | (185,850) | ||||||
Repurchase of class C common stock, shares | (45,000) | ||||||||
Share-based compensation expense | 19,341 | 19,341 | |||||||
Beneficial conversion feature on convertible notes | 92,428 | 92,428 | |||||||
Net loss | (6,129,468) | (6,129,468) | |||||||
Stockholders' Equity Attributable to Parent, Ending Balance at Mar. 31, 2021 | $ 5 | $ 171 | $ 143 | $ 13,691 | $ 902 | $ 1,412 | $ 91,982,825 | $ (45,924,869) | $ 46,074,280 |
Shares, Outstanding, Ending Balance at Mar. 31, 2021 | 5 | 1,714,286 | 1,428,570 | 136,923,432 | 9,023,088 | 14,117,267 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
OPERATING ACTIVITIES: | ||
Net income (loss) | $ (6,129,468) | $ 250,388 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation | 498,590 | 78,171 |
Amortization | 223,836 | 406,091 |
Gain on extinguishment of debt | 0 | (154,592) |
Gain of forgiveness of debt | (429,540) | 0 |
Change in fair value of contingent consideration | 0 | (500,000) |
Change in fair value of derivative liabilities | 0 | (2,298,609) |
Stock issued for penalties | 0 | 44,700 |
Employee stock compensation | 19,341 | 19,561 |
Amortization of debt discounts | 801,340 | 245,774 |
Non-cash lease expense | 74,823 | 63,216 |
Change in current assets and liabilities: | ||
Accounts receivable | (607,410) | 1,950,811 |
Inventory | (726,739) | 75,590 |
Contract assets | (738,663) | (365,970) |
Prepaid expenses and other assets | (309,381) | 140,673 |
Accounts payable | (1,242,754) | 239,089 |
Accrued expenses | (478,911) | 64,767 |
Contract liabilities | 169,915 | 24,239 |
Operating lease liability | (75,904) | (62,755) |
Deposits | 0 | (12,509) |
Net cash provided by (used in) operating activities | (8,950,925) | 208,635 |
INVESTING ACTIVITIES: | ||
Capital expenditures | (243,992) | (68,182) |
Cash paid for acquisitions | 0 | (2,033,355) |
Cash assumed in acquisition | 81,442 | 0 |
Net cash used in investing activities | (162,550) | (2,101,537) |
FINANCING ACTIVITIES: | ||
Proceeds from the sale of common stock, net of offering costs | 54,302,982 | 250,000 |
Proceeds from issuances of notes payable, related parties | 0 | 19,000 |
Proceeds from issuances of notes payable, non-related party | 11,800 | 748,710 |
Proceeds from issuances of convertible notes payable | 408,000 | 0 |
Proceeds from financing lease | 0 | 2,000,000 |
Repurchase of common stock | (185,850) | 0 |
Repayments of notes payable, related party | (34,979) | (9,822) |
Repayments of notes payable, non-related parties | (5,945,000) | (545,646) |
Repayments of convertible notes payable | (1,291,463) | (73,902) |
Proceeds from (repayment of) line of credit, net | (2,880,550) | (454,660) |
Cash paid on financing lease obligations | (302,575) | (85,364) |
Net cash provided by financing activities | 44,082,365 | 1,848,316 |
NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH | 34,968,890 | (44,586) |
CASH AND RESTRICTED CASH, BEGINNING BALANCE | 722,583 | 302,486 |
CASH AND RESTRICTED CASH, ENDING BALANCE | 35,691,473 | 257,900 |
CASH PAID FOR: | ||
Interest | 709,061 | 1,114,034 |
Income taxes | 0 | 0 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING: | ||
Penalty interest added to debt | 0 | 15,000 |
Common stock issued for convertible note payable and accrued interest | 109,830 | 697,332 |
Common stock issued for debt settlement | 0 | 330,528 |
Issuance of note payable for acquisition | 0 | 2,300,000 |
Common stock issued to settle unpaid salaries | 0 | 603,463 |
Issuance of shares of series D preferred stock for acquisition | 6,653,309 | 0 |
Beneficial conversion feature on convertible notes | $ 92,428 | $ 0 |
Note 1 - Organization and Basis
Note 1 - Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Text Block [Abstract] | |
Note 1 - Organization and Basis of Presentation | Note 1 – Organization and Basis of Presentation The unaudited consolidated financial statements were prepared by Alpine 4 Holdings, Inc. (‘we,” “our,” or the "Company"), pursuant to the rules and regulations of the Securities Exchange Commission ("SEC"). The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") were omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company's Annual Report on Form 10-K filed with the SEC on April 15, 2021. The results for the three months ended March 31, 2021, are not necessarily indicative of the results to be expected for the year ending December 31, 2021. The Company was incorporated under the laws of the State of Delaware on April 22, 2014. The Company was formed to serve as a vehicle to affect an asset acquisition, merger, exchange of capital stock, or other business combination with a domestic or foreign business. On March 2, 2021, the Company changed its name from Alpine 4 Technologies Ltd. to Alpine 4 Holdings, Inc. Effective January 1, 2019, the Company purchased all of the outstanding capital stock of Morris Sheet Metal Corp., an Indiana corporation (“MSM”), JTD Spiral, Inc. a wholly owned subsidiary of MSM, an Indiana corporation, Morris Enterprises LLC, an Indiana limited liability company, and Morris Transportation LLC, an Indiana limited liability company (collectively “Morris”). Effective November 6, 2019, the Company purchased all of the outstanding capital stock and units of Deluxe Sheet Metal, Inc., an Indiana corporation, and DSM Holding, LLC, an Indiana limited liability company, and purchased certain real estate from Lonewolf Enterprises, LLC, an Indiana limited liability company (collectively “Deluxe”) (see Note 8). Effective February 21, 2020, the Company purchased all of the outstanding units of Excel Fabrication, LLC., an Idaho limited liability company (“Excel”). Effective December 15, 2020, the Company purchased the assets of Impossible Aerospace Corporation, a Delaware corporation (“IA”). Effective February 8, 2021, the Company purchased the assets of Vayu (US), Inc., a Delaware corporation (“Vayu”). Effective May 1, 2021, the Company acquired all of the outstanding shares of stock of Thermal Dynamics, Inc., a Delaware corporation (“TDI”). Effective May 4, 2021, the Company acquired all of the outstanding membership interests of KAI Enterprises, LLC, a Florida limited liability company, the sole asset of which was all of the outstanding membership interests of Alternative Laboratories, LLC, a Delaware limited liability company (“Alt Labs”). As of the date of this Report, the Company is a holding company owning, directly or indirectly, eleven companies: · A4 Corporate Services, LLC; · ALTIA, LLC; · Quality Circuit Assembly, Inc.; · Morris Sheet Metal, Corp; · JTD Spiral, Inc.; · Excel Construction Services, LLC; · SPECTRUMebos, Inc.; · Impossible Aerospace, Inc.; · Vayu (US); · Thermal Dynamics, Inc.; and · Alternative Laboratories, LLC. Basis of presentation The accompanying consolidated financial statements present the balance sheets, statements of operations, stockholders' deficit and cash flows of the Company. The financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). Liquidity The Company’s financial statements are prepared in accordance with U.S. GAAP applicable to a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are issued. In accordance with Financial Accounting Standards Board (the “FASB”), Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40), our management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued. While the Company experienced a loss for the quarter ended March 31, 2021, of $6.1 million, and had a negative cash flow used in operations, there were significant non-recurring items related to the RSU purchases totaling approximately $1.8 million contributing to the loss. The Company received a total of approximately $54.0 million in February 2021 in the following two transactions: · The Company raised approximately $45.0 million in net proceeds in connection with a registered direct offering of its stock and; · The Company raised approximately $9.0 million in net proceeds in connection with an equity line of credit financing arrangement. The Company plans to continue to generate additional revenue (and improve cash flows from operations) partly from the acquisitions of two operating companies which closed in May 2021 combined with improved performance from the existing operating companies. Based on the capital raise as indicated above and management plans to improve cash flows from operations, management believes the Company has sufficient working capital to satisfy the Company’s estimated liquidity needs for the next 12 months. The Company ended the March 31, 2021 quarter with $36.0 million in cash, and as of the date of this Report had $14.3 million in cash after the purchase of the two operating companies in May 2021. During the quarter, the Company paid down liabilities of approximately $13.0 million. In addition, approximately $1.0 million was used to build inventory and for capital expenditures. The current ratio was at 3.2 times at March 31, 2021. However, there is no assurance that management’s plans will be successful due to the current economic climate in the United States and globally. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Text Block [Abstract] | |
Note 2 - Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of March 31, 2021, and December 31, 2020. Significant intercompany balances and transactions have been eliminated. Use of estimates The consolidated financial statements are prepared in accordance with U.S. GAAP. Preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable. In many instances, the Company could have reasonably used different accounting estimates and in other instances changes in the accounting estimates are reasonably likely to occur from period to period. This applies in particular to useful lives of non-current assets, valuation allowance for deferred tax assets and impairment of non-current assets. Actual results could differ significantly from our estimates. To the extent that there are material differences between these estimates and actual results, the Company’s future financial statement presentation, financial condition, results of operations and cash flows will be affected. The ultimate impact from COVID-19 on the Company’s operations and financial results during 2021 will depend on, among other things, the ultimate severity and scope of the pandemic, the pace at which governmental and private travel restrictions and public concerns about public gatherings will ease, and the speed with which the economy recovers. The Company is not able to fully quantify the impact that these factors will have on the Company’s financial results during 2021 and beyond. COVID-19 did have a negative impact on the Company’s financial performance in 2020. During the three months ended March 31, 2021, there was no impairment charge related to intangible assets and goodwill. Major Customers The Company had two customers that made up 14% and 9%, respectively, of accounts receivable as of March 31, 2021. The Company had two customers that made up 10% and 8%, respectively, of accounts receivable as of December 31, 2020. For the three months ended March 31, 2021, the Company had two customers that made up 15% and 10% of total revenues. For the three months ended March 31, 2020, the Company had two customers that made up 14% and 11%, respectively, of total revenues. Fair value measurements ASC 820, Fair Value Measurements and Disclosures , defines fair value 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. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 The Company's financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, convertible notes, notes and line of credit. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements. The carrying value of long-term debt approximates fair value since the related rates of interest approximate current market rates. As of March 31, 2021 and December 31, 2020, the Company has no financial assets or liabilities that required to be fair valued on a recurring basis. Earnings (loss) per shares The Company presents both basic and diluted net loss per share on the face of the consolidated statements of operations. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted per share calculations give effect to all potentially dilutive shares of common stock outstanding during the period, including stock options and warrants, and using the treasury-stock method. If antidilutive, the effect of potentially dilutive shares of common stock is ignored. The only potentially dilutive securities outstanding during the periods presented were the convertible debt, options and warrants. The following table illustrates the computation of basic and diluted earnings per share (“EPS”) for the three months ended March 31, 2021 and 2020: For the Three Months Ended March 31, 2021 For the Three Months Ended March 31, 2020 Net Income (Loss) Shares Per Share Amount Net Income (Loss) Shares Per Share Amount Basic EPS Net income (loss) $ (6,129,468) 154,616,490 $ (0.04) $ 250,388 127,207,693 $ 0.00 Effect of Dilutive Securities Convertible debt - - - (1,974,908) 10,828,330 - Dilute EPS Net income (loss) plus assumed conversions $ (6,129,468) 154,616,490 $ (0.04) $ (1,724,520) 138,036,023 $ (0.01) |
Note 3 - Leases
Note 3 - Leases | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Text Block [Abstract] | |
Note 3 - Leases | Note 3 – Leases The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate. As of March 31, 2021, the future minimum finance and operating lease payments were as follows: Finance Operating Twelve Months Ending March 31, Leases Leases 2022 $ 1,875,305 $ 330,493 2023 1,907,673 103,632 2024 1,926,222 105,664 2025 1,960,103 107,696 2026 1,851,918 - Thereafter 18,061,963 - Total payments 27,583,184 647,485 Less: imputed interest (11,559,056) (119,859) Total obligation 16,024,128 527,626 Less: current portion (602,557) (317,463) Non-current capital leases obligations $ 15,421,571 $ 210,163 As of October 1, 2020, the American Precision Fabricators, Inc. (“APF”) building lease with Harbor Island Properties, LLC was modified, assignment was transferred to Excel Fabrication, LLC (“Excel”), and Quality Circuit Assembly, Inc. (“QCA”). As part of the modification, the lease was extended through 2037 and the payment terms were amended effective January 15, 2021. Operating Leases The table below presents the lease related assets and liabilities recorded on the Company’s consolidated balance sheet as of March 31, 2021, and December 31, 2020: March 31, December 31, Classification on Balance Sheet 2021 2020 Assets Operating lease assets Operating lease right of use assets $ 506,488 $ 581,311 Total lease assets $ 506,488 $ 581,311 Liabilities Current liabilities Operating lease liability Current operating lease liability $ 317,463 $ 334,500 Noncurrent liabilities Operating lease liability Long-term operating lease liability 210,163 269,030 Total lease liability $ 527,626 $ 603,530 |
Note 4 - Notes Payable
Note 4 - Notes Payable | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Text Block [Abstract] | |
Note 4 - Notes Payable | Note 4 – Notes Payable The outstanding balances for the loans as of March 31, 2021, and December 31, 2020, were as follows: March 31, December 31, 2021 2020 Lines of credit, current portion $ (60,757) $ 2,819,793 Equipment loans, current portion 71,772 245,388 Term notes, current portion 5,636,615 4,035,730 Total current 5,647,630 7,100,911 PPP/EIDL loans 3,961,107 4,340,956 Long-term portion of equipment loans and term notes 3,588,184 10,860,494 Total notes payable $ 13,196,921 $ 22,302,361 The negative line of credit balance represents funds owed to the Company from the prior lender as a direct result of transitioning out of the credit facility. The funds are being remitted from the lender on a weekly basis. Future scheduled maturities of outstanding notes payable are as follows: Twelve Months March 31, 2022 $ 5,647,630 2023 5,421,973 2024 2,062,318 2025 - 2026 - Thereafter 65,000 Total $ 13,196,921 |
Note 5 - Notes Payable, Related
Note 5 - Notes Payable, Related Parties | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Text Block [Abstract] | |
Note 5 - Notes Payable, Related Parties | Note 5 – Notes Payable, Related Parties At March 31, 2021, and December 31, 2020, notes payable due to related parties consisted of the following: March 31, December 31, 2021 2020 Notes payable; non-interest bearing; due upon demand; unsecured $ 3,000 $ 3,000 Series of notes payable, bearing interest at rates from 0% to 20% per annum, with maturity dates from April 2018 to July 2021, unsecured 200,672 235,651 Total notes payable - related parties $ 203,672 $ 238,651 The above notes which were in default as of March 31, 2021, were due on demand by the lenders as of the date of this Report. |
Note 6 - Convertible Notes Paya
Note 6 - Convertible Notes Payable | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Text Block [Abstract] | |
Note 6 - Convertible Notes Payable | Note 6 – Convertible Notes Payable At March 31, 2021, and December 31, 2020, convertible notes payable consisted of the following: March 31, December 31, 2021 2020 Series of convertible notes payable issued prior to December 31, 2016, bearing interest at rates of 8% - 10% per annum, with due dates ranging from December 2016 through June 2017. The outstanding principal and interest balances are convertible into shares of Class A common stock at the option of the debt holder at exercise price of $1 per share. $ 15,000 $ 25,000 Secured convertible notes payable issued to the sellers of QCA on April 1, 2016 for an aggregate of $2,000,000, bearing interest at 5% per annum, due in monthly payments starting on July 1, 2016 and due in full on July 1, 2019. On August 6 and 11, 2019, the Company extended the due date of the two notes to December 31, 2020 and December 31, 2022, respectively. In May and June 2020, these convertible notes were amended -- see (A) below. The outstanding principal and interest balances was fully paid during the three months ended March 31, 2021. - 1,291,463 On December 7, 2018, the Company entered into a variable convertible note for $130,000 with net proceeds of $122,200. The note is due September 7, 2019 and bears interest at 12% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a discount of 40% to the lowest trading closing prices of the stock for 20 days prior to conversion. This note was amended in November 2019 to increase the principal amount by $180,000 due to penalty interest; increased the interest to 15%. The outstanding principal and interest balance of the note was converted during the three months ended March 31. 2021. - 7,538 On November 14, 2019, the Company issued convertible note for $200,000. The note is due November 13, 2020 and bears interest at 15% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a fixed price of $0.15 per share. As of March 31, 2021 this note is past due. 200,000 200,000 In December 2020 and January 2021, the Company issued convertible notes to individual investors. The notes are due three to six months from the date of issuance; accrue interest at 5 – 6.25% per annum and are convertible into shares of the Company's Class A common stock at a fixed rate of $0.25 to $3.00. 1,890,500 1,482,500 Total convertible notes payable 2,105,500 3,006,501 Less: discount on convertible notes payable (634,712) (1,343,624) Total convertible notes payable, net of discount 1,470,788 1,662,877 Less: current portion of convertible notes payable (1,470,788) (562,242) Long-term portion of convertible notes payable $ - $ 1,100,635 (A) In May and June 2020 the Company amended the following seller notes: The convertible note with Jeff Moss with a $720,185 balance as of May 4, 2020, was amended to extend the maturity date to May 4, 2027, at 5% interest with weekly payments of $2,605. The principal balance was increased to $798,800 and the balance outstanding at December 31, 2020, was $735,329. The convertible note with Dwight Hargreaves with a $551,001 balance as of June 5, 2020, was amended to extend the maturity date to June 5, 2026, at 6% interest with weekly payments of $2,316. The principal balance was increased to $605,464 and the balance outstanding at December 31, 2020, was $556,135. A loss on extinguishment of debt of $192,272 was recognized on these transactions. The discounts on convertible notes payable arise from beneficial conversion features. During the three months ended March 31, 2021, and the year ended December 31, 2020, the Company issued convertible notes with a fixed conversion price. The beneficial conversion feature related to these convertible notes that have been recorded as a discount on the convertible notes and as a component of equity was $92,428 and $1,482,500 for the three months ended March 31, 2021, and the year ended December 31, 2020, respectively. The discounts are being amortized over the terms of the convertible notes payable. Amortization of debt discounts during the three months ended March 31, 2021 and 2020, amounted to $801,340 and $245,774, respectively, and is recorded as interest expense in the accompanying consolidated statements of operations. The unamortized discount balance for these notes was $634,712 as of March 31, 2021, which is expected to be amortized over the next 12 months. A summary of the activity in the Company's convertible notes payable is provided below: Balance outstanding, December 31, 2020 $ 1,662,877 Issuance of convertible notes payable for cash 408,000 Repayment of notes (1,291,463) Conversion of notes payable to common stock (17,538) Amortization of debt discounts 801,340 Discount from beneficial conversion feature (92,428) Balance outstanding, March 31, 2021 $ 1,470,788 |
Note 7 - Stockholders' Equity
Note 7 - Stockholders' Equity | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Text Block [Abstract] | |
Note 7 - Stockholders' Equity | Note 7 – Stockholders' Equity Common Stock The Company had the following transactions in its common stock during the three months ended March 31, 2021: · On February 11, 2021, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors to purchase 8,333,333 shares of the Company’s Class A common stock for aggregate gross proceeds of approximately $50 million. A.G.P./Alliance Global Partners served as the placement agent and received a cash fee of 7% of the aggregate gross proceeds and warrants to purchase shares of the Company’s Class A Common Stock in an amount equal to 5% of the Shares from the offering with an exercise price of $6.60 per share and are not exercisable until August 16, 2021. Net proceeds from the sale of shares amounted to approximately $45 million. · issued 1,524,064 shares of Class A common stock to an investor for cash for total proceeds of $9.3 million. · issued 702,877 shares of Class A common stock for the conversion of total debt and accrued liabilities totaling $109,830. · repurchased 45,000 shares of Class C common stock for $185,850. Preferred Stock · On February 8, 2021, the Company issued 1,428,572 shares of Series D Preferred Stock in connection with the acquisition of assets of Vayu that were valued at $6,653,309. · In March 2021, the Company repurchased 514,286 outstanding restricted stock units (RSUs) which had not yet settled, from two individuals in privately negotiated transactions. The Company repurchased 314,286 shares of Series C Preferred Stock and 200,000 shares of Series D Preferred Stock at $3.50 per share. The RSUs had been issued to the individuals in connection with the IA and Vayu acquisitions. Stock Options The following summarizes the stock option activity: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life (Years) Value Outstanding at December 31, 2020 1,790,000 $ 0.19 7.09 $ 6,176,855 Granted - Forfeited - Exercised - Outstanding at March 31, 2021 1,790,000 $ 0.19 6.85 $ 6,105,255 Vested and expected to vest at March 31, 2021 1,790,000 $ 0.19 6.85 $ 6,105,255 Exercisable at March 31, 2021 1,186,656 $ 0.23 6.73 $ 3,982,899 The following table summarizes information about options outstanding and exercisable as of March 31, 2021: Options Outstanding Options Exercisable Weighted Weighted Weighted Average Average Average Exercise Number Remaining Exercise Number Exercise Price of Shares Life (Years) Price of Shares Price 0.05 979,000 7.13 0.05 489,500 0.05 0.10 85,000 7.03 0.10 42,500 0.10 0.13 388,500 6.34 0.13 338,250 0.13 0.26 114,000 6.09 0.26 106,875 0.26 0.90 223,500 6.02 0.90 209,531 0.90 1,790,000 1,186,656 During the three months ended March 31, 2021 and 2020, stock option expense amounted to $19,341 and $19,556, respectively. Unrecognized stock option expense as of March 31, 2021, amounted to $24,407, which will be recognized over a period extending through December 2022. Warrants The following summarizes the warrants activity: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Warrants Price Life (Years) Value Outstanding at December 31, 2020 275,000 $ 1.01 0.23 $ 723,250 Granted 416,667 6.60 Forfeited (75,000) 1.01 Exercised - Outstanding at March 31, 2021 616,667 $ 4.79 2.65 $ 518,000 Vested and expected to vest at March 31, 2021 616,667 $ 4.79 2.65 $ 518,000 Exercisable at March 31, 2021 200,000 $ 1.01 0.08 $ 518,000 The following table summarizes information about warrants outstanding and exercisable as of March 31, 2021: Warrants Outstanding Warrants Exercisable Weighted Weighted Weighted Average Average Average Exercise Number Remaining Exercise Number Exercise Price of Shares Life (Years) Price of Shares Price $ 1.01 200,000 0.08 $ 1.01 200,000 $ 1.01 6.60 416,667 3.89 $ 6.60 - $ - 616,667 200,000 During the three months ended March 31, 2021, the Company issued 416,667 warrants to a placement agent in connection with sale of its common stock (Note 7). The warrants have an exercise price of $6.60, become exercisable on August 16, 2021 and expire on February 16, 2025. The fair value of the warrants of $2,498,637 was determined using the Black-Scholes option pricing model with the following assumptions: Stock price $6.00 Risk-free interest rate 0.01% Expected life of the options 4 years Expected volatility 347% Expected dividend yield 0% The fair value of the warrants was recorded as offering costs with a corresponding credit to additional paid in capital. |
Note 8 - Business Combination
Note 8 - Business Combination | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Text Block [Abstract] | |
Note 8 - Business Combination | Note 8 – Business Combinations Vayu (US) Effective February 8, 2021, the Company purchased the assets of Vayu (US), Inc., a Delaware corporation (“Vayu”). Under the provision of Accounting Standards Codification (“ASC”) 805, the Company had to determine whether this acquisition was a business combination or an asset (or a group of assets) acquisition. In doing so, the Company determined that the acquisition of Vayu was in fact an asset purchase. Of the consideration given for the Vayu acquisition more than 95% was concentrated in a single asset or a group of assets in Intellectual Property. As such, the Company accounted for this acquisition as an asset acquisition in accordance with ASC 805-10-20. Accordingly, the assets acquired are initially recognized at the consideration paid, which was the fair value of the series D preferred stock issued, including direct acquisition costs, of which there were none. The cost is allocated to the group of assets acquired based on their relative fair values. The assets acquired and liabilities assumed of were as follows at the purchase date: Purchase Allocation Cash $ 81,442 Property and equipment 50,000 Intellectual property 6,981,256 Non-solicitation covenant 90,000 Accrued expenses and other current liabilities (411,539) SBA loan (PPP funds) (137,850) $ 6,653,309 The purchase price was paid as follows: Series D Preferred Stock $ 6,653,309 $ 6,653,309 The following are the unaudited pro forma results of operations for the three months ended March 31, 2021 and 2020, as if Excel, Impossible Aerospace, Inc. (“IA”), and Vayu had been acquired on January 1, 2020. The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results do include any anticipated cost savings or other effects of the planned integration of these entities, and are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the dates indicated. Pro Forma Combined Financials (unaudited) Three Months Ended March 31, 2021 2020 Sales $ 8,668,405 $ 9,843,175 Cost of goods sold 7,915,165 7,816,809 Gross profit 753,240 2,026,366 Operating expenses 5,967,965 4,265,430 Loss from operations (5,214,725) (2,239,065) Net loss (6,272,124) (793,849) Loss per share (0.04) (0.01) |
Note 9 - Industry Segments
Note 9 - Industry Segments | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Text Block [Abstract] | |
Note 9 - Industry Segments | Note 9 – Industry Segments This summary presents the Company's segments, QCA; APF; Morris Sheet Metal Corp, Morris Enterprises LLC, and Morris Transportation LLC (collectively, “Morris”); Deluxe Sheet Metal, Inc., DSM Holding, LLC (collectively, “DSM”), Excel, IA, and Vayu for the three months ended March 31, 2021, March 31, 2020, and December 31, 2020: Three Months Ended March 31, 2021 2020 Revenue QCA $ 3,738,309 $ 2,030,126 APF - 529,041 Morris 3,388,522 3,254,927 Deluxe 877,813 2,394,164 Excel 663,761 627,338 $ 8,668,405 $ 8,835,596 Gross profit (loss) QCA $ 912,277 $ 505,782 APF - (29,642) Morris 346,999 629,623 Deluxe (746,565) 514,195 Excel 241,908 139,786 $ 754,619 $ 1,759,744 Income (loss) from operations QCA $ 323,831 $ (109,152) APF (69,642) (228,444) Morris (267,903) 190,867 Deluxe (1,665,959) 79,962 Excel (169,940) (220,960) IA (1,275,922) - Vayu (941,857) - Unallocated and eliminations (1,004,677) (815,918) $ (5,072,069) $ (1,103,645) Depreciation and amortization QCA $ 123,945 $ 53,981 APF 39,414 71,961 Morris 83,817 151,264 Deluxe 182,930 176,250 Excel 65,975 30,806 IA 96,007 - Vayu 82,237 - Unallocated and eliminations 48,101 - $ 722,426 $ 484,262 Interest Expenses QCA $ 138,279 $ 120,445 APF 4,077 79,944 Morris 92,712 374,400 Deluxe 183,833 257,202 Excel 105,291 47,855 Unallocated and eliminations 947,531 769,381 $ 1,471,723 $ 1,649,227 Net income (loss) QCA $ 164,966 $ (185,690) APF (73,719) (365,115) Morris (355,087) 320,412 Deluxe (1,849,950) (79,306) Excel (275,231) (268,815) IA (919,232) - Vayu (869,007) - Unallocated and eliminations (1,952,208) 828,902 $ (6,129,468) $ 250,388 As of As of March 31, December 31, 2021 2020 Total Assets QCA $ 12,805,827 $ 9,574,237 APF 1,071,291 1,157,699 Morris 9,035,623 6,881,599 Deluxe 11,089,695 12,039,414 Excel 3,706,679 3,727,168 IA 6,158,133 6,342,863 Vayu 7,148,884 - Unallocated and eliminations 33,637,133 1,011,203 $ 84,653,265 $ 40,734,183 Goodwill QCA $ 1,963,761 $ 1,963,761 Morris 113,592 113,592 Excel 7,629 7,629 $ 2,084,982 $ 2,084,982 Accounts receivable, net QCA $ 2,742,176 $ 1,938,446 APF 45,022 45,022 Morris 2,325,268 1,944,269 Deluxe 1,356,367 2,015,745 Excel 623,446 541,387 $ 7,092,279 $ 6,484,869 |
Note 10 - Contingencies
Note 10 - Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Note 10 - Contingencies | Note 10 - Contingencies Legal Proceedings From time to time, the Company may become involved in lawsuits and other legal proceedings that arise in the course of business. Litigation is subject to inherent uncertainties, and it is not possible to predict the outcome of litigation with total confidence. As of the date of this Report, the Company was not aware of any legal proceedings or potential claims against it whose outcome would be likely, individually or in the aggregate, to have a material adverse effect on the Company’s business, financial condition, operating results, or cash flows, except as set forth below. In June 2020, the Company’s subsidiary Excel Fabrication, LLC filed a lawsuit against Fusion Mechanical, LLC, in the Fifth Judicial District Court, State of Idaho (Case Number CV42-20-2246). The Company claimed tortious interference and trade secret violations by the defendant. The defendant filed a motion to dismiss, which was denied by the Court. The defendant filed a second motion to dismiss and the Company filed a memorandum in response to the second motion to dismiss, for which a hearing was held on May 10, 2021. As of the date of this Report, discovery was proceeding. The Company intends to pursue vigorously its claims. In August 2020, the Company filed a lawsuit in the United States District Court, District of Arizona (Case No.2:20-cv-01679-DJH), against Alan Martin, the seller of Horizon Well Testing LLC (“HWT”) dba Venture West Energy Services, LLC. The Company brought claims for breach of contract, including but not limited to breaches of the seller’s representations and warranties in the purchase agreement in connection with the acquisition of HWT. The defendant answered and counterclaimed, claiming breach by the Company of its obligation to issue a promissory note (to be issued in connection with the acquisition of HWT). The parties have engaged in discovery and settlement negotiations, both of which were ongoing. |
Note 11 - Subsequent Events
Note 11 - Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Text Block [Abstract] | |
Note 11 - Subsequent Events | Note 11 – Subsequent Events On April 8, 2021, the Company entered into a settlement agreement with Kevin Smith wherein the outstanding balance of his notes amounting to $1,883,418 including accrued interest and net other costs was settled in full through a payment of approximately $887,000 and the exchange of 1,617,067 shares of the Company’s Class C common shares held by him to the same number of the Company’s Class A common stock. Alternative Laboratories Purchase Transaction On May 4, 2021, the Company entered into a purchase agreement to acquire all the membership interests in Alternative Laboratories, LLC (“Alt Labs”), a Delaware limited liability company, for a cash consideration of $10 million and 361,787 shares of the Company’s class A common stock. The acquisition of Alt Labs closed on May 7, 2021. Thermal Dynamics Purchase Transaction On April 27, 2021, the Company entered into a purchase agreement with Thermal Dynamics International, Inc. (“Thermal Dynamics”) to acquire 100% of its outstanding shares of stock for a cash consideration of $6,354,000 and 281,223 shares of the Company’s class A common stock. The acquisition of Thermal Dynamics closed on May 5, 2021. |
Note 2 - Summary of Significa_2
Note 2 - Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Policy Text Block [Abstract] | |
Principles of Consolidation | Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of March 31, 2021, and December 31, 2020. Significant intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of estimates The consolidated financial statements are prepared in accordance with U.S. GAAP. Preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable. In many instances, the Company could have reasonably used different accounting estimates and in other instances changes in the accounting estimates are reasonably likely to occur from period to period. This applies in particular to useful lives of non-current assets, valuation allowance for deferred tax assets and impairment of non-current assets. Actual results could differ significantly from our estimates. To the extent that there are material differences between these estimates and actual results, the Company’s future financial statement presentation, financial condition, results of operations and cash flows will be affected. The ultimate impact from COVID-19 on the Company’s operations and financial results during 2021 will depend on, among other things, the ultimate severity and scope of the pandemic, the pace at which governmental and private travel restrictions and public concerns about public gatherings will ease, and the speed with which the economy recovers. The Company is not able to fully quantify the impact that these factors will have on the Company’s financial results during 2021 and beyond. COVID-19 did have a negative impact on the Company’s financial performance in 2020. During the three months ended March 31, 2021, there was no impairment charge related to intangible assets and goodwill. |
Major Customers | Major Customers The Company had two customers that made up 14% and 9%, respectively, of accounts receivable as of March 31, 2021. The Company had two customers that made up 10% and 8%, respectively, of accounts receivable as of December 31, 2020. For the three months ended March 31, 2021, the Company had two customers that made up 15% and 10% of total revenues. For the three months ended March 31, 2020, the Company had two customers that made up 14% and 11%, respectively, of total revenues. |
Fair value measurements | Fair value measurements ASC 820, Fair Value Measurements and Disclosures , defines fair value 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. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 The Company's financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, convertible notes, notes and line of credit. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements. The carrying value of long-term debt approximates fair value since the related rates of interest approximate current market rates. As of March 31, 2021 and December 31, 2020, the Company has no financial assets or liabilities that required to be fair valued on a recurring basis. |
Earnings (loss) per share | Earnings (loss) per shares The Company presents both basic and diluted net loss per share on the face of the consolidated statements of operations. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted per share calculations give effect to all potentially dilutive shares of common stock outstanding during the period, including stock options and warrants, and using the treasury-stock method. If antidilutive, the effect of potentially dilutive shares of common stock is ignored. The only potentially dilutive securities outstanding during the periods presented were the convertible debt, options and warrants. The following table illustrates the computation of basic and diluted earnings per share (“EPS”) for the three months ended March 31, 2021 and 2020: For the Three Months Ended March 31, 2021 For the Three Months Ended March 31, 2020 Net Income (Loss) Shares Per Share Amount Net Income (Loss) Shares Per Share Amount Basic EPS Net income (loss) $ (6,129,468) 154,616,490 $ (0.04) $ 250,388 127,207,693 $ 0.00 Effect of Dilutive Securities Convertible debt - - - (1,974,908) 10,828,330 - Dilute EPS Net income (loss) plus assumed conversions $ (6,129,468) 154,616,490 $ (0.04) $ (1,724,520) 138,036,023 $ (0.01) |
Note 2 - Summary of Significa_3
Note 2 - Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Table Text Block Supplement [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table illustrates the computation of basic and diluted earnings per share (“EPS”) for the three months ended March 31, 2021 and 2020: For the Three Months Ended March 31, 2021 For the Three Months Ended March 31, 2020 Net Income (Loss) Shares Per Share Amount Net Income (Loss) Shares Per Share Amount Basic EPS Net income (loss) $ (6,129,468) 154,616,490 $ (0.04) $ 250,388 127,207,693 $ 0.00 Effect of Dilutive Securities Convertible debt - - - (1,974,908) 10,828,330 - Dilute EPS Net income (loss) plus assumed conversions $ (6,129,468) 154,616,490 $ (0.04) $ (1,724,520) 138,036,023 $ (0.01) |
Note 3 - Leases (Tables)
Note 3 - Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Table Text Block Supplement [Abstract] | |
Schedule of Future Minimum Lease Payments for Capital Leases | As of March 31, 2021, the future minimum finance and operating lease payments were as follows: Finance Operating Twelve Months Ending March 31, Leases Leases 2022 $ 1,875,305 $ 330,493 2023 1,907,673 103,632 2024 1,926,222 105,664 2025 1,960,103 107,696 2026 1,851,918 - Thereafter 18,061,963 - Total payments 27,583,184 647,485 Less: imputed interest (11,559,056) (119,859) Total obligation 16,024,128 527,626 Less: current portion (602,557) (317,463) Non-current capital leases obligations $ 15,421,571 $ 210,163 |
Schedule of Right of Use Assets and Lease Liabilities | The table below presents the lease related assets and liabilities recorded on the Company’s consolidated balance sheet as of March 31, 2021, and December 31, 2020: March 31, December 31, Classification on Balance Sheet 2021 2020 Assets Operating lease assets Operating lease right of use assets $ 506,488 $ 581,311 Total lease assets $ 506,488 $ 581,311 Liabilities Current liabilities Operating lease liability Current operating lease liability $ 317,463 $ 334,500 Noncurrent liabilities Operating lease liability Long-term operating lease liability 210,163 269,030 Total lease liability $ 527,626 $ 603,530 |
Note 4 - Notes Payable (Tables)
Note 4 - Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Table Text Block Supplement [Abstract] | |
Schedule of Notes Payable | The outstanding balances for the loans as of March 31, 2021, and December 31, 2020, were as follows: March 31, December 31, 2021 2020 Lines of credit, current portion $ (60,757) $ 2,819,793 Equipment loans, current portion 71,772 245,388 Term notes, current portion 5,636,615 4,035,730 Total current 5,647,630 7,100,911 PPP/EIDL loans 3,961,107 4,340,956 Long-term portion of equipment loans and term notes 3,588,184 10,860,494 Total notes payable $ 13,196,921 $ 22,302,361 |
Future Scheduled Maturities of Outstanding Notes Payable to Third Parties | Future scheduled maturities of outstanding notes payable are as follows: Twelve Months March 31, 2022 $ 5,647,630 2023 5,421,973 2024 - 2025 2,062,318 2026 - Thereafter 65,000 Total $ 13,196,921 |
Note 5 - Notes Payable, Relat_2
Note 5 - Notes Payable, Related Parties (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Table Text Block Supplement [Abstract] | |
Schedule of Notes Payable, Related Parties | At March 31, 2021 and December 31, 2020, notes payable due to related parties consisted of the following: March 31, December 31, 2021 2020 Notes payable; non-interest bearing; due upon demand; unsecured $ 3,000 $ 3,000 Series of notes payable, bearing interest at rates from 0% to 20% per annum, with maturity dates from April 2018 to July 2021, unsecured 200,672 235,651 Total notes payable - related parties $ 203,672 $ 238,651 |
Note 6 - Convertible Notes Pa_2
Note 6 - Convertible Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Table Text Block Supplement [Abstract] | |
Schedule of Convertible Notes Payable | At March 31, 2021, and December 31, 2020, convertible notes payable consisted of the following: March 31, December 31, 2021 2020 Series of convertible notes payable issued prior to December 31, 2016, bearing interest at rates of 8% - 20% per annum, with due dates ranging from April 2016 through October 2017. The outstanding principal and interest balances are convertible into shares of Class A common stock at the option of the debt holder at exercise prices ranging from $0.10 to $1 per share. $ 15,000 $ 25,000 Secured convertible notes payable issued to the sellers of QCA on April 1, 2016 for an aggregate of $2,000,000, bearing interest at 5% per annum, due in monthly payments starting on July 1, 2016 and due in full on July 1, 2019. On August 6 and 11, 2019, the Company extended the due date of the two notes to December 31, 2020 and December 31, 2022, respectively. In May and June 2020, these convertible notes were amended -- see (A) below. The outstanding principal and interest balances was fully paid during the three months ended March 31, 2021. - 1,291,463 On December 7, 2018, the Company entered into a variable convertible note for $130,000 with net proceeds of $122,200. The note is due September 7, 2019 and bears interest at 12% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a discount of 40% to the lowest trading closing prices of the stock for 20 days prior to conversion. This note was amended in November 2019 to increase the principal amount by $180,000 due to penalty interest; increased the interest to 15%. The outstanding principal and interest balance of the note was converted during the three months ended March 31. 2021. - 7,538 On November 14, 2019, the Company issued convertible note for $200,000. The note is due November 13, 2020 and bears interest at 15% per annum. The note is immediately convertible into shares of the Company's Class A common stock at a fixed price of $0.15 per share. As of March 31, 2021 this note is past due. 200,000 200,000 In December 2020 and January 2021, the Company issued convertible notes to individual investors. The notes are due three to six months from the date of issuance; accrue interest at 5 – 6.25% per annum and are convertible into shares of the Company's Class A common stock at a fixed rate of $0.25 to $3.00. 1,890,500 1,482,500 Total convertible notes payable 2,105,500 3,006,501 Less: discount on convertible notes payable (634,712) (1,343,624) Total convertible notes payable, net of discount 1,470,788 1,662,877 Less: current portion of convertible notes payable (1,470,788) (562,242) Long-term portion of convertible notes payable $ - $ 1,100,635 |
Schedule of Acitivity of Convertible Notes Payable | A summary of the activity in the Company's convertible notes payable is provided below: Balance outstanding, December 31, 2020 $ 1,662,877 Issuance of convertible notes payable for cash 408,000 Repayment of notes (1,291,463) Conversion of notes payable to common stock (17,538) Amortization of debt discounts 801,340 Discount from beneficial conversion feature (92,428) Balance outstanding, March 31, 2021 $ 1,470,788 |
Note 7 - Stockholders' Equity (
Note 7 - Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Table Text Block Supplement [Abstract] | |
Stock option activity | The following summarizes the stock option activity: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Life (Years) Value Outstanding at December 31, 2020 1,790,000 $ 0.19 7.09 $ 6,176,855 Granted - Forfeited - Exercised - Outstanding at March 31, 2021 1,790,000 $ 0.19 6.85 $ 6,105,255 Vested and expected to vest at March 31, 2021 1,790,000 $ 0.19 6.85 $ 6,105,255 Exercisable at March 31, 2021 1,186,656 $ 0.23 6.73 $ 3,982,899 |
Summary of options outstanding and exercisable | The following table summarizes information about options outstanding and exercisable as of March 31, 2021: Options Outstanding Options Exercisable Weighted Weighted Weighted Average Average Average Exercise Number Remaining Exercise Number Exercise Price of Shares Life (Years) Price of Shares Price 0.05 979,000 7.13 0.05 489,500 0.05 0.10 85,000 7.03 0.10 42,500 0.10 0.13 388,500 6.34 0.13 338,250 0.13 0.26 114,000 6.09 0.26 106,875 0.26 0.90 223,500 6.02 0.90 209,531 0.90 1,790,000 1,186,656 |
Warrants activity | The following summarizes the warrants activity: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Warrants Price Life (Years) Value Outstanding at December 31, 2020 275,000 $ 1.01 0.23 $ 723,250 Granted 416,667 6.60 Forfeited (75,000) 1.01 Exercised - Outstanding at March 31, 2021 616,667 $ 4.79 2.65 $ 518,000 Vested and expected to vest at March 31, 2021 616,667 $ 4.79 2.65 $ 518,000 Exercisable at March 31, 2021 200,000 $ 1.01 0.08 $ 518,000 |
Summary of warrants outstanding and exercisable | The following table summarizes information about warrants outstanding and exercisable as of March 31, 2021: Warrants Outstanding Warrants Exercisable Weighted Weighted Weighted Average Average Average Exercise Number Remaining Exercise Number Exercise Price of Shares Life (Years) Price of Shares Price $ 1.01 200,000 0.08 $ 1.01 200,000 $ 1.01 6.60 416,667 3.89 $ 6.60 - $ - 616,667 200,000 |
Stock Options, Valuation Assumptions | The fair value of the warrants of $2,498,637 was determined using the Black-Scholes option pricing model with the following assumptions: Stock price $6.00 Risk-free interest rate 0.01% Expected life of the options 4 years Expected volatility 347% Expected dividend yield 0% |
Note 8 - Business Combination (
Note 8 - Business Combination (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Table Text Block Supplement [Abstract] | |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The assets acquired and liabilities assumed of were as follows at the purchase date: Purchase Allocation Cash $ 81,442 Property and equipment 50,000 Intellectual property 6,981,256 Non-solicitation covenant 90,000 Accrued expenses and other current liabilities (411,539) SBA loan (PPP funds) (137,850) $ 6,653,309 The purchase price was paid as follows: Series D Preferred Stock $ 6,653,309 $ 6,653,309 |
Business Acquisition, Pro Forma Information | However, pro forma results do include any anticipated cost savings or other effects of the planned integration of these entities, and are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the dates indicated. Pro Forma Combined Financials (unaudited) Three Months Ended March 31, 2021 2020 Sales $ 8,668,405 $ 9,843,175 Cost of goods sold 7,915,165 7,816,809 Gross profit 753,240 2,026,366 Operating expenses 5,967,965 4,265,430 Loss from operations (5,214,725) (2,239,065) Net loss (6,272,124) (793,849) Loss per share (0.04) (0.01) |
Note 9 - Industry Segments (Tab
Note 9 - Industry Segments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Text Block [Abstract] | |
Schedule of Segment Reporting Information | This summary presents the Company's segments, QCA; APF; Morris Sheet Metal Corp, Morris Enterprises LLC, and Morris Transportation LLC (collectively, “Morris”); Deluxe Sheet Metal, Inc., DSM Holding, LLC (collectively, “DSM”), Excel, IA, and Vayu for the three months ended March 31, 2021, March 31, 2020, and December 31, 2020: Three Months Ended March 31, 2021 2020 Revenue QCA $ 3,738,309 $ 2,030,126 APF - 529,041 Morris 3,388,522 3,254,927 Deluxe 877,813 2,394,164 Excel 663,761 627,338 $ 8,668,405 $ 8,835,596 Gross profit (loss) QCA $ 912,277 $ 505,782 APF - (29,642) Morris 346,999 629,623 Deluxe (746,565) 514,195 Excel 241,908 139,786 $ 754,619 $ 1,759,744 Income (loss) from operations QCA $ 323,831 $ (109,152) APF (69,642) (228,444) Morris (267,903) 190,867 Deluxe (1,665,959) 79,962 Excel (169,940) (220,960) IA (1,275,922) - Vayu (941,857) - Unallocated and eliminations (1,004,677) (815,918) $ (5,072,069) $ (1,103,645) Depreciation and amortization QCA $ 123,945 $ 53,981 APF 39,414 71,961 Morris 83,817 151,264 Deluxe 182,930 176,250 Excel 65,975 30,806 IA 96,007 - Vayu 82,237 - Unallocated and eliminations 48,101 - $ 722,426 $ 484,262 Interest Expenses QCA $ 138,279 $ 120,445 APF 4,077 79,944 Morris 92,712 374,400 Deluxe 183,833 257,202 Excel 105,291 47,855 Unallocated and eliminations 947,531 769,381 $ 1,471,723 $ 1,649,227 Net income (loss) QCA $ 164,966 $ (185,690) APF (73,719) (365,115) Morris (355,087) 320,412 Deluxe (1,849,950) (79,306) Excel (275,231) (268,815) IA (919,232) - Vayu (869,007) - Unallocated and eliminations (1,952,208) 828,902 $ (6,129,468) $ 250,388 As of As of March 31, December 31, 2021 2020 Total Assets QCA $ 12,805,827 $ 9,574,237 APF 1,071,291 1,157,699 Morris 9,035,623 6,881,599 Deluxe 11,089,695 12,039,414 Excel 3,706,679 3,727,168 IA 6,158,133 6,342,863 Vayu 7,148,884 - Unallocated and eliminations 33,637,133 1,011,203 $ 84,653,265 $ 40,734,183 Goodwill QCA $ 1,963,761 $ 1,963,761 Morris 113,592 113,592 Excel 7,629 7,629 $ 2,084,982 $ 2,084,982 Accounts receivable, net QCA $ 2,742,176 $ 1,938,446 APF 45,022 45,022 Morris 2,325,268 1,944,269 Deluxe 1,356,367 2,015,745 Excel 623,446 541,387 $ 7,092,279 $ 6,484,869 |
Note 1 - Organization and Bas_2
Note 1 - Organization and Basis of Presentation (Details) - USD ($) | 2 Months Ended | 3 Months Ended | ||
Feb. 28, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Proceeds from sale of convertible notes | $ 408,000 | $ 0 | ||
Proceeds from sale of stock | $ 45,000,000 | 674,000 | ||
Repayment of related party debt | 1,000,000 | |||
Net income (loss) | (6,129,468) | 250,388 | ||
Cash | 35,691,473 | $ 277,738 | ||
Repayments of convertible notes payable | $ (1,291,463) | $ (73,902) | ||
Investor [Member] | ||||
Proceeds from line of credit | $ 9,000,000 |
Note 2 - Summary of Significa_4
Note 2 - Summary of Significant Accounting Policies: Use of estimates (Details) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Text Block [Abstract] | |
Impairment of intangible assets and goodwill | $ 0 |
Note 2 - Summary of Significa_5
Note 2 - Summary of Significant Accounting Policies: Major Customers (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Accounts Receivable Concentration Risk | |||
Concentration Risk, Customer | Company had two customers that made up 14% and 9%, respectively, of accounts receivable | Company had two customers that made up 10% and 8%, respectively, of accounts receivable | |
Revenues Concentration Risk | |||
Concentration Risk, Customer | Company had two customers that made up 15% and 10% of total revenues | Company had two customers that made up 14% and 11%, respectively, of total revenues |
Note 2 - Summary of Significa_6
Note 2 - Summary of Significant Accounting Policies: Earnings (loss) per share : Computation of basic and diluted EPS (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Text Block [Abstract] | ||
Net income (loss) | $ (6,129,468) | $ 250,388 |
Convertible debt and options | 0 | (1,974,908) |
Net income (loss) plus assumed conversions | $ (6,129,468) | $ (1,724,520) |
Weighted Average Number of Shares Outstanding, Basic | 154,616,490 | 127,207,693 |
Convertible debt and options | 10,828,330 | |
Weighted Average Number of Shares Outstanding, Diluted | 154,616,490 | 138,036,023 |
Earnings Per Share, Basic | $ (0.04) | $ 0 |
Convertible debt and options | 0 | |
Earnings Per Share, Diluted | $ (0.04) | $ (0.01) |
Note 3 - Leases_ Schedule of Fu
Note 3 - Leases: Schedule of Future Minimum Lease Payments for Capital Leases (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Finance Leases | ||
2022 | $ 1,875,305 | |
2023 | 1,907,673 | |
2024 | 1,926,222 | |
2025 | 1,960,103 | |
2026 | 1,851,918 | |
Thereafter | 18,061,963 | |
Finance Lease, Liability, Payment, Due | 27,583,184 | |
Imputed Interest on Capital Lease | (11,559,056) | |
Total obligation | 16,024,128 | |
Financing lease obligation, current portion | (602,557) | |
Financing lease obligations, net of current portion | 15,421,571 | |
Operating Leases | ||
2022 | 330,493 | |
2023 | 103,632 | |
2024 | 105,664 | |
2025 | 107,696 | |
2026 | 0 | |
Thereafter | 0 | |
Total minimum lease payments | 647,485 | |
Less imputed interest | (119,859) | |
Total obligation | 527,626 | $ 670,554 |
Less:Operating lease obligation, current portion | (317,463) | (334,500) |
Operating lease obligations, net of current portion | $ 210,163 | $ 269,030 |
Note 3 - Leases_ Schedule of Ri
Note 3 - Leases: Schedule of Right of Use Assets and Lease Liabilities (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Text Block [Abstract] | ||
Operating lease right of use assets | $ 506,488 | $ 581,311 |
Operating lease obligation, current portion | 317,463 | 334,500 |
Operating lease obligations, net of current portion | 210,163 | 269,030 |
Operating Lease, Liability | $ 527,626 | $ 670,554 |
Note 4 - Notes Payable_ Schedul
Note 4 - Notes Payable: Schedule of Notes Payable (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Notes payable, current portion | $ 5,647,630 | $ 7,100,911 |
Notes Payable | 13,196,921 | 22,302,361 |
Lines of Credit | ||
Notes payable, current portion | (60,757) | 2,819,793 |
Equipment Loans | ||
Notes payable, current portion | 71,772 | 245,388 |
Short Term Notes | ||
Notes payable, current portion | 5,636,615 | 4,035,730 |
PPP/EIDL loans | ||
Long-term Debt | 3,961,107 | 4,340,956 |
Equipment, Noncurrent | ||
Long-term Debt | $ 3,588,184 | $ 10,860,494 |
Note 4 - Notes Payable_ Future
Note 4 - Notes Payable: Future Scheduled Maturities of Outstanding Notes Payable to Third Parties (Details) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Text Block [Abstract] | |
2021 | $ 5,647,630 |
2022 | 5,421,973 |
2023 | 2,062,318 |
2024 | 0 |
2025 | 0 |
Thereafter | 65,000 |
Total | $ 13,196,921 |
Note 5 - Notes Payable, Relat_3
Note 5 - Notes Payable, Related Parties: Schedule of Notes Payable, Related Parties (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Notes payable, related parties, current portion | $ 203,672 | $ 238,651 |
Notes Payable 1 | ||
Notes payable, related parties, current portion | 3,000 | 3,000 |
Notes Payable 2 | ||
Notes payable, related parties, current portion | $ 200,672 | $ 235,651 |
Note 6 - Convertible Notes Pa_3
Note 6 - Convertible Notes Payable (Details) - USD ($) | Jun. 05, 2020 | Jun. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Convertible notes payable | $ 2,105,500 | $ 3,006,501 | ||||
Loss on extinguishment of debt | 0 | $ 154,592 | ||||
Amortization of debt discounts | 801,340 | 245,774 | ||||
Unamortized discount | 634,712 | $ 1,343,624 | ||||
Beneficial conversion feature | 92,428 | $ 1,482,500 | ||||
Jeff Moss | ||||||
Interest rate | 5.00% | |||||
Principal amount | 798,800 | |||||
Periodic payments | $ 2,605 | |||||
Convertible notes payable | 735,329 | |||||
Due date | May 4, 2027 | |||||
Dwight Hargreaves | ||||||
Interest rate | 6.00% | |||||
Principal amount | $ 551,001 | $ 605,464 | ||||
Periodic payments | $ 2,316 | |||||
Convertible notes payable | $ 556,135 | |||||
Due date | Jun. 5, 2026 | |||||
Loss on extinguishment of debt | $ 192,272 |
Note 6 - Convertible Notes Pa_4
Note 6 - Convertible Notes Payable: Schedule of Convertible Notes Payable (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Convertible Notes Payable | $ 2,105,500 | $ 3,006,501 |
Debt Instrument, Unamortized Discount | (634,712) | (1,343,624) |
Convertible Notes Payable, net of discount | 1,470,788 | 1,662,877 |
Convertible notes payable, current | (1,470,788) | (562,242) |
Convertible notes payable, net of current portion | 0 | 1,100,635 |
Convertible Notes Payable 1 | ||
Convertible Notes Payable | 15,000 | 25,000 |
Convertible Notes Payable 2 | ||
Convertible Notes Payable | 0 | 1,291,463 |
Convertible Notes Payable 3 | ||
Convertible Notes Payable | 0 | 7,538 |
Convertible Notes Payable 4 | ||
Convertible Notes Payable | 200,000 | 200,000 |
Convertible Notes Payable 5 | ||
Convertible Notes Payable | $ 1,890,500 | $ 1,482,500 |
Note 6 - Convertible Notes Pa_5
Note 6 - Convertible Notes Payable: Schedule of Acitivity of Convertible Notes Payable (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Text Block [Abstract] | ||
Convertible Notes Payable, net of discount at beginning | $ 1,662,877 | |
Issuance of convertible notes payable for cash | 408,000 | |
Repayment of notes | (1,291,463) | |
Conversion of notes payable to common stock | (17,538) | |
Amortization of debt discounts | 801,340 | $ 245,774 |
Discount from beneficial conversion feature | (92,428) | |
Convertible Notes Payable, net of discount at end | $ 1,470,788 |
Note 7 - Stockholders' Equity_2
Note 7 - Stockholders' Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2021 | Feb. 11, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | |
Common stock issued, amount | $ 250,000 | |||
Stock Options Expense | $ 19,341 | 19,556 | ||
Unrecognized stock option expense | $ 24,407 | 24,407 | ||
Proceeds from sale of stock | $ 54,302,982 | $ 250,000 | ||
Purchase Agreement | ||||
Sale of stock | 8,333,333 | |||
Proceeds from sale of stock | $ 45,000,000 | |||
Placement agent | ||||
Warrants issued | 416,667 | |||
Warrants exercise price | $ 6.60 | $ 6.60 | ||
Warrants expire date | Feb. 16, 2025 | |||
Restricted Stock Units (RSUs) [Member] | ||||
Stock repurchased, shares | 514,286 | |||
Common Stock Class C | Investor [Member] | ||||
Stock repurchased, shares | 45,000 | |||
Stock repurchased, value | $ 185,850 | |||
Common Class A | Investor [Member] | ||||
Common stock issued, shares | 1,524,064 | |||
Common stock issued, amount | $ 9,300,000 | |||
Stock issued for debt conversion, shares | 702,877 | |||
Stock issued for debt conversion, Amount | $ 109,830 | |||
Vayu [Member] | ||||
Share Price | $ 3.50 | $ 3.50 | ||
Vayu [Member] | Series D Preferred Stock [Member] | ||||
Stock repurchased, shares | 200,000 | |||
Vayu [Member] | Series C Preferred Stock [Member] | ||||
Stock repurchased, shares | 314,286 |
Note 7 - Stockholders' Equity_
Note 7 - Stockholders' Equity: Stock option activity (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Options | ||
Outstanding, ending balance | 1,790,000 | |
Exercisable | 1,186,656 | |
Equity Option [Member] | ||
Options | ||
Outstanding, beginning balance | 1,790,000 | |
Granted | 0 | |
Forfeited | 0 | |
Exercised | 0 | |
Outstanding, ending balance | 1,790,000 | 1,790,000 |
Vested and expected to vest | 1,790,000 | |
Exercisable | 1,186,656 | |
Weighted Average Price Per Share | ||
Weighted average price per share - beginning balance | $ 0.19 | |
Weighted average price per share - ending balance | 0.19 | $ 0.19 |
Weighted average price per share - Vested and Expected to Vest | 0.19 | |
Weighted average price per share - Exercisable | $ 0.23 | |
Weighted Average Remaining Contractual Life (Years) | ||
Weighted Average Remaining Contractual Term, Outstanding | 6 years 10 months 6 days | 7 years 1 month 2 days |
Weighted Average Remaining Contractual Term, Vested and Expected to Vest | 6 years 10 months 6 days | |
Weighted Average Remaining Contractual Term, Exercisable | 6 years 8 months 23 days | |
Aggregate Intrinsic Value | ||
Outstanding at beginning, Intrinsic Value | $ 6,176,855 | |
Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | 6,105,255 | |
Exercisable, Intrinsic Value | 3,982,899 | |
Outstanding at end Intrinsic Value | $ 6,105,255 | $ 6,176,855 |
Note 7 - Stockholders' Equity_3
Note 7 - Stockholders' Equity: Schedule of Common Stock Outstanding Roll Forward (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Options outstanding | 1,790,000 |
Options exercisable | 1,186,656 |
Stock Option 1 | |
Options outstanding | 979,000 |
Options outstanding, weighted average remaining contractual life (Years) | 7 years 1 month 16 days |
Options outstanding, weighted average exercise price | $ / shares | $ 0.05 |
Options exercisable | 489,500 |
Options exercisable, weighted average exercise price | $ / shares | $ 0.05 |
Stock Option 2 | |
Options outstanding | 85,000 |
Options outstanding, weighted average remaining contractual life (Years) | 7 years 11 days |
Options outstanding, weighted average exercise price | $ / shares | $ 0.1 |
Options exercisable | 42,500 |
Options exercisable, weighted average exercise price | $ / shares | $ 0.10 |
Stock Option 3 | |
Options outstanding | 388,500 |
Options outstanding, weighted average remaining contractual life (Years) | 6 years 4 months 2 days |
Options outstanding, weighted average exercise price | $ / shares | $ 0.13 |
Options exercisable | 338,250 |
Options exercisable, weighted average exercise price | $ / shares | $ 0.13 |
Stock Option 4 | |
Options outstanding | 114,000 |
Options outstanding, weighted average remaining contractual life (Years) | 6 years 1 month 2 days |
Options outstanding, weighted average exercise price | $ / shares | $ 0.26 |
Options exercisable | 106,875 |
Options exercisable, weighted average exercise price | $ / shares | $ 0.26 |
Stock Option 5 | |
Options outstanding | 223,500 |
Options outstanding, weighted average remaining contractual life (Years) | 6 years 7 days |
Options outstanding, weighted average exercise price | $ / shares | $ 0.90 |
Options exercisable | 209,531 |
Options exercisable, weighted average exercise price | $ / shares | $ 0.90 |
Note 7 - Stockholders' Equity;
Note 7 - Stockholders' Equity; Warrants activity (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Outstanding, ending balance | 1,790,000 | |
Exercisable | 1,186,656 | |
Warrant [Member] | ||
Outstanding, beginning balance | 275,000 | |
Granted | 416,667 | |
Forfeited | (75,000) | |
Exercised | 0 | |
Outstanding, ending balance | 616,667 | 275,000 |
Vested and expected to vest | 616,667 | |
Exercisable | 200,000 | |
Weighted Average Price Per Share | ||
Weighted average price per share - beginning balance | $ 1.01 | |
Weighted average price per share - Granted | 6.6 | |
Weighted average price per share - Forfeited | 1.01 | |
Weighted average price per share - ending balance | 4.79 | $ 1.01 |
Weighted average price per share - Vested and Expected to Vest | 4.79 | |
Weighted average price per share - Exercisable | $ 1.04 | |
Weighted Average Remaining Contractual Life (Years) | ||
Weighted Average Remaining Contractual Term, Outstanding | 2 years 7 months 24 days | 2 months 23 days |
Weighted Average Remaining Contractual Term, Vested and Expected to Vest | 2 years 7 months 24 days | |
Weighted Average Remaining Contractual Term, Exercisable | 29 days | |
Aggregate Intrinsic Value | ||
Outstanding at beginning, Intrinsic Value | $ 723,250 | |
Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | 518,000 | |
Exercisable, Intrinsic Value | 518,000 | |
Outstanding at end Intrinsic Value | $ 518,000 | $ 723,250 |
Note 7 - Stockholders' Equity_4
Note 7 - Stockholders' Equity: Warrants outstanding and exercisable (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Warrants Outstanding, shares | 616,667 |
Warrants Exercisable | 200,000 |
Warrant 1 | |
Warrants Outstanding, shares | 200,000 |
Warrants Outstanding,weighted average remaining contractual life (Years) | 29 days |
Warrants Outstanding,weighted average exercise price | $ / shares | $ 1.01 |
Warrants Exercisable | 200,000 |
Warrants Exercisable weighted average exercise price | $ / shares | $ 1.01 |
Warrant 2 | |
Warrants Outstanding, shares | 416,667 |
Warrants Outstanding,weighted average remaining contractual life (Years) | 3 years 10 months 21 days |
Warrants Exercisable weighted average exercise price | $ / shares | $ 6.6 |
Note 7 - Stockholders' Equity_5
Note 7 - Stockholders' Equity: Assumptions (Details) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2021$ / shares | |
Stock price | $ 6 |
Risk-free interest rate | 0.01% |
Expected life of the options | 4 years |
Expected volatility | 347.00% |
Expected dividend yield | 0.00% |
Note 8 - Business Combination_
Note 8 - Business Combination: Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination (Details) - Vayu | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Cash | $ 81,442 |
Property and equipment | 50,000 |
Intellectual property | 6,981,256 |
Non-solicitation covenant | 90,000 |
Accrued expenses and other current liabilities | (411,539) |
SBA loan (PPP funds) | (137,850) |
Purchase price allocation | 6,653,309 |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | 6,653,309 |
Series D Preferred Stock [Member] | |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | $ 6,653,309 |
Note 8 - Business Combination_2
Note 8 - Business Combination: Business Acquisition, Pro Forma Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Text Block [Abstract] | ||
Sales | $ 8,668,405 | $ 9,843,175 |
Cost of goods sold | 7,915,165 | 7,816,809 |
Gross profit | 753,240 | 2,026,366 |
Operating Expenses | 5,967,965 | 4,265,430 |
Loss from Operations | (5,214,725) | (2,239,065) |
Net loss | $ (6,272,124) | $ (793,849) |
Loss per share | $ (0.04) | $ (0.01) |
Note 9 - Industry Segments_ Sch
Note 9 - Industry Segments: Schedule of Segment Reporting Information, by Segment (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Revenue | $ 8,668,405 | $ 8,835,596 | |
Gross Profit | 754,619 | 1,759,744 | |
Income (loss) from operations | (5,072,069) | (1,103,645) | |
Interest Expenses | 1,471,723 | 1,649,227 | |
Net income (loss) | (6,129,468) | 250,388 | |
Total Assets | 84,653,265 | $ 40,734,183 | |
Goodwill | 2,084,982 | 2,084,982 | |
Accounts receivable, net | 7,092,279 | 6,484,869 | |
QCA | |||
Revenue | 3,738,309 | 2,030,126 | |
Gross Profit | 912,277 | 505,782 | |
Income (loss) from operations | 323,831 | (109,152) | |
Depreciation and amortization | 123,945 | 53,981 | |
Interest Expenses | 138,279 | 120,445 | |
Net income (loss) | 164,966 | (185,690) | |
Total Assets | 12,805,827 | 9,574,237 | |
Goodwill | 1,963,761 | 1,963,761 | |
Accounts receivable, net | 2,742,176 | 1,938,446 | |
APF | |||
Revenue | 0 | 529,041 | |
Gross Profit | 0 | (29,642) | |
Income (loss) from operations | (69,642) | (228,444) | |
Depreciation and amortization | 39,414 | 71,961 | |
Interest Expenses | 4,077 | 79,944 | |
Net income (loss) | (73,719) | (365,115) | |
Total Assets | 1,071,291 | 1,157,699 | |
Accounts receivable, net | 45,022 | 45,022 | |
Morris | |||
Revenue | 3,388,522 | 3,254,927 | |
Gross Profit | 346,999 | 629,623 | |
Income (loss) from operations | (267,903) | 190,867 | |
Depreciation and amortization | 83,817 | 151,264 | |
Interest Expenses | 92,712 | 374,400 | |
Net income (loss) | (355,087) | 320,412 | |
Total Assets | 9,035,623 | 6,881,599 | |
Goodwill | 113,592 | 113,592 | |
Accounts receivable, net | 2,325,268 | 1,944,269 | |
Deluxe | |||
Revenue | 877,813 | 2,394,164 | |
Gross Profit | (746,565) | 514,195 | |
Income (loss) from operations | (1,665,959) | 79,962 | |
Depreciation and amortization | 182,930 | 176,250 | |
Interest Expenses | 183,833 | 257,202 | |
Net income (loss) | (1,849,950) | (79,306) | |
Total Assets | 11,089,695 | 12,039,414 | |
Accounts receivable, net | 1,356,367 | 2,015,745 | |
Excel | |||
Revenue | 663,761 | 627,338 | |
Gross Profit | 241,908 | 139,786 | |
Income (loss) from operations | (169,940) | (220,960) | |
Depreciation and amortization | 65,975 | 30,806 | |
Interest Expenses | 105,291 | 47,855 | |
Net income (loss) | (275,231) | (268,815) | |
Total Assets | 3,706,679 | 3,727,168 | |
Goodwill | 7,629 | 7,629 | |
Accounts receivable, net | 623,446 | 541,387 | |
IA | |||
Income (loss) from operations | (1,275,922) | 0 | |
Depreciation and amortization | 96,007 | 0 | |
Net income (loss) | (919,232) | 0 | |
Total Assets | 6,158,133 | 6,342,863 | |
Vayu [Member] | |||
Income (loss) from operations | (941,857) | 0 | |
Depreciation and amortization | 82,237 | 0 | |
Net income (loss) | (869,007) | 0 | |
Total Assets | 7,148,884 | 0 | |
Unallocated and Eliminiations | |||
Income (loss) from operations | (1,004,677) | (815,918) | |
Depreciation and amortization | 48,101 | 0 | |
Interest Expenses | 947,531 | 769,381 | |
Net income (loss) | (1,952,208) | 828,902 | |
Total Assets | 33,637,133 | 1,011,203 | |
Total Consolidated | |||
Revenue | 8,668,405 | 8,835,596 | |
Gross Profit | 754,619 | 1,759,744 | |
Income (loss) from operations | (5,072,069) | (1,103,645) | |
Depreciation and amortization | 722,426 | 484,262 | |
Interest Expenses | 1,471,723 | 1,649,227 | |
Net income (loss) | (6,129,468) | $ 250,388 | |
Total Assets | 84,653,265 | 40,734,183 | |
Goodwill | 2,084,982 | 2,084,982 | |
Accounts receivable, net | $ 7,092,279 | $ 6,484,869 |
Note 11 - Subsequent Events (De
Note 11 - Subsequent Events (Details) - USD ($) | 3 Months Ended | 4 Months Ended | |||
Apr. 08, 2021 | May 04, 2021 | Apr. 27, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |
Note payable | $ 13,196,921 | $ 22,302,361 | |||
Subsequent Event [Member] | Common Class A | |||||
Sale of stock, consideration received per transaction, value | $ 10,000,000 | $ 6,354,000 | |||
Sale of stock, number of shares issued in transaction, shares | 361,787 | 281,223 | |||
Subsequent Event [Member] | Common Class C | |||||
Stock issued for settledment, shares | 1,617,067 | ||||
Stock issued for settledment, value | $ 887,000 | ||||
Note payable | $ 1,883,418 |