Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 11, 2020 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-55787 | |
Entity Registrant Name | BrewBilt Manufacturing Inc. | |
Entity Central Index Key | 0001641751 | |
Entity Tax Identification Number | 47-0990750 | |
Entity Incorporation, State or Country Code | FL | |
Entity Address, Address Line One | 110 Spring Hill Road | |
Entity Address, Address Line Two | #10 Grass Valley | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95945 | |
City Area Code | 530 | |
Local Phone Number | 802-5023 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,462,792,070 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash | $ 80,058 | $ 1,444 |
Accounts receivable | 54,940 | 323,779 |
Earnings in excess of billings | 191,162 | 53,038 |
Inventory | 47,151 | 47,280 |
Prepaid expenses | 883 | 9,467 |
Other current assets | 156 | |
Total current assets | 374,194 | 435,164 |
Property, plant and equipment, net | 85,363 | 116,202 |
Right-of-use asset | 368,248 | 392,664 |
Deposits | 16,980 | 4,980 |
TOTAL ASSETS | 844,785 | 949,010 |
Current liabilities | ||
Accounts payable | 809,192 | 947,655 |
Accrued interest | 79,040 | 250,592 |
Accrued liabilities | 286,649 | 62,539 |
Billings in excess of revenue | 478,845 | 1,511,096 |
Convertible notes payable, net of discount | 75,904 | 829,384 |
Derivative liabilities | 1,285,625 | 2,273,269 |
Liability for unissued shares | 175,825 | 151,325 |
Promissory notes payable, net of discount | 97,298 | |
Related party liabilities | 142,152 | 84,072 |
Total current liabilities | 3,430,530 | 6,109,932 |
Long term debt | 279,531 | 307,887 |
Operating lease liabilities | 368,248 | 392,664 |
Total liabilities | 4,078,309 | 6,810,483 |
Commitments and Contingencies | ||
SHAREHOLDERS' EQUITY (DEFICIT) | ||
Common stock, $0.001 par value; 10,000,000,000 authorized; 1,874,269,389 shares issued and outstanding at September 30, 2020; 10,343,330 shares issued and outstanding at December 31, 2019 | 1,874,269 | 10,343 |
Additional paid in capital | (5,641,396) | (15,240,774) |
Accumulated deficit | 532,751 | 9,368,557 |
Total stockholder's deficit | (3,233,524) | (5,861,473) |
TOTAL LIABILITIES & EQUITY | 844,785 | 949,010 |
Series A Preferred Stock [Member] | ||
SHAREHOLDERS' EQUITY (DEFICIT) | ||
Preferred stock, Series A: $0.001 par value; 30,000,000 shares authorized; 851,000 shares issued and outstanding at September 30, 2020; 400,000 shares issued and outstanding at December 31, 2019; Preferred stock, Series B: $0.001 par value; 1,000 shares authorized; 1,000 shares issued and outstanding at June 30, 2020; 1,000 shares issued and outstanding at December 31, 2019 | 851 | 400 |
Series B Preferred Stock [Member] | ||
SHAREHOLDERS' EQUITY (DEFICIT) | ||
Preferred stock, Series A: $0.001 par value; 30,000,000 shares authorized; 851,000 shares issued and outstanding at September 30, 2020; 400,000 shares issued and outstanding at December 31, 2019; Preferred stock, Series B: $0.001 par value; 1,000 shares authorized; 1,000 shares issued and outstanding at June 30, 2020; 1,000 shares issued and outstanding at December 31, 2019 | $ 1 | $ 1 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 10,000,000,000 | 5,000,000,000 |
Common stock, issued | 1,874,269,389 | 10,343,330 |
Common stock, outstanding | 1,874,269,389 | 10,343,330 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 30,000,000 | 30,000,000 |
Preferred stock, issued | 851,000 | 400,000 |
Preferred stock, outstanding | 851,000 | 400,000 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 1,000 | 1,000 |
Preferred stock, issued | 1,000 | 1,000 |
Preferred stock, outstanding | 1,000 | 1,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 927,012 | $ 558,656 | $ 1,022,499 | $ 1,409,153 |
Cost of goods sold | 163,525 | 453,610 | 220,795 | 1,104,451 |
Gross profit (loss) | 763,487 | 105,046 | 801,704 | 304,702 |
Operating expenses: | ||||
Consulting fees | 17,163 | 15,000 | 4,054,413 | 45,000 |
G&A expenses | 46,293 | 100,971 | 221,059 | 305,153 |
Professional fees | 78,850 | 195,570 | 7,451 | |
Salaries and wages | 70,628 | 124,248 | 286,916 | 404,067 |
Total operating expense | 212,934 | 240,219 | 4,757,958 | 761,671 |
Loss from operations | 550,553 | (135,173) | (3,956,254) | (456,969) |
Other income (expenses) | ||||
Gain (loss) on derivative liability valuation | 305,406 | (2,997,742) | ||
Loss on conversion | (616,357) | (987,447) | ||
Interest expenses | (444,846) | (7,066) | (887,563) | (34,029) |
Total other income/expenses | (755,797) | (7,066) | (4,872,752) | (34,029) |
Net loss before income taxes | (205,244) | (142,239) | (8,829,006) | (490,998) |
Income tax expense | (6,800) | (6,800) | ||
Net (loss) | $ (212,044) | $ (142,239) | $ (8,835,806) | $ (490,998) |
Per share information | ||||
Weighted number of common shares outstanding, basic and diluted | 1,359,512,034 | 529,606,195 | ||
Net loss per common share | $ (0.00016) | $ (0.01668) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) | Preferred StockSeries A Preferred Stock [Member] | Preferred StockSeries B Preferred Stock [Member] | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, amount at Dec. 31, 2018 | $ (303,375) | $ (722,748) | $ (1,026,123) | |||
Capital distributions | (22,296) | (22,296) | ||||
Net loss | (262,897) | (262,897) | ||||
Ending balance, amount at Mar. 31, 2019 | (325,671) | (985,645) | (1,311,316) | |||
Beginning balance, amount at Dec. 31, 2018 | (303,375) | (722,748) | (1,026,123) | |||
Net loss | (490,998) | |||||
Ending balance, amount at Sep. 30, 2019 | (377,818) | (1,213,746) | (1,591,564) | |||
Ending balance, in shares at Sep. 30, 2019 | ||||||
Beginning balance, amount at Mar. 31, 2019 | (325,671) | (985,645) | (1,311,316) | |||
Capital distributions | (26,879) | (26,879) | ||||
Net loss | (85,862) | (85,862) | ||||
Ending balance, amount at Jun. 30, 2019 | (352,550) | (1,071,507) | (1,424,057) | |||
Capital distributions | (25,268) | (25,268) | ||||
Net loss | (142,239) | (142,239) | ||||
Ending balance, amount at Sep. 30, 2019 | (377,818) | (1,213,746) | (1,591,564) | |||
Ending balance, in shares at Sep. 30, 2019 | ||||||
Beginning balance, amount at Dec. 31, 2019 | $ 400 | $ 1 | $ 10,343 | (15,240,774) | 9,368,557 | $ (5,861,473) |
Beginning balance, in shares at Dec. 31, 2019 | 400,000 | 1,000 | 10,343,330 | 10,343,330 | ||
Conversion of promissory notes to stock | $ 32,261 | 366,617 | $ 398,878 | |||
Conversion of promissory notes to stock, in shares | 32,260,676 | |||||
Derivative settlements | (50,586) | (50,586) | ||||
Cancellation of shares issued for services | $ (8,008) | (42,257) | (50,265) | |||
Cancellation of shares issued for services | (8,008,334) | |||||
Preferred shares issued per agreement | $ 500 | 500 | ||||
Preferred shares issued per agreement | 500,000 | |||||
Net loss | (2,136,389) | (2,136,389) | ||||
Ending balance, amount at Mar. 31, 2020 | $ 900 | $ 1 | $ 34,596 | (14,967,000) | 7,232,168 | (7,699,335) |
Ending balance, in shares at Mar. 31, 2020 | 900,000 | 1,000 | 34,595,672 | |||
Beginning balance, amount at Dec. 31, 2019 | $ 400 | $ 1 | $ 10,343 | (15,240,774) | 9,368,557 | $ (5,861,473) |
Beginning balance, in shares at Dec. 31, 2019 | 400,000 | 1,000 | 10,343,330 | 10,343,330 | ||
Net loss | $ (8,835,806) | |||||
Ending balance, amount at Sep. 30, 2020 | $ 851 | $ 1 | $ 1,874,269 | (5,641,396) | 532,751 | $ (3,233,524) |
Ending balance, in shares at Sep. 30, 2020 | 851,000 | 1,000 | 1,874,269,389 | 1,874,269,389 | ||
Beginning balance, amount at Mar. 31, 2020 | $ 900 | $ 1 | $ 34,596 | (14,967,000) | 7,232,168 | $ (7,699,335) |
Beginning balance, in shares at Mar. 31, 2020 | 900,000 | 1,000 | 34,595,672 | |||
Conversion of promissory notes to stock | $ 259,074 | 4,421,942 | 4,681,016 | |||
Conversion of promissory notes to stock, in shares | 259,074,233 | |||||
Derivative settlements | (1,026,700) | (1,026,700) | ||||
Preferred shares issued per agreement | $ 400 | 3,999,600 | 4,000,000 | |||
Preferred shares issued per agreement | 400,000 | |||||
Preferred stock converted to common stock | $ (185) | $ 232,921 | 138,355 | 371,091 | ||
Preferred stock converted to common stock (in shares) | (185,177) | 232,920,612 | ||||
Net loss | (6,487,373) | (6,487,373) | ||||
Ending balance, amount at Jun. 30, 2020 | $ 1,115 | $ 1 | $ 526,591 | (7,433,803) | 744,795 | (6,161,301) |
Ending balance, in shares at Jun. 30, 2020 | 1,114,823 | 1,000 | 526,590,517 | |||
Conversion of promissory notes to stock | $ 554,137 | 2,147,327 | 2,701,464 | |||
Conversion of promissory notes to stock, in shares | 554,136,908 | |||||
Derivative settlements | (177,999) | (177,999) | ||||
Preferred stock converted to common stock | $ (264) | $ 632,339 | (15,719) | 616,356 | ||
Preferred stock converted to common stock (in shares) | (263,823) | 632,339,244 | ||||
Warrant exercise | $ 161,202 | (161,202) | ||||
Warrant exercise, in shares | 161,202,720 | |||||
Net loss | (212,044) | (212,044) | ||||
Ending balance, amount at Sep. 30, 2020 | $ 851 | $ 1 | $ 1,874,269 | $ (5,641,396) | $ 532,751 | $ (3,233,524) |
Ending balance, in shares at Sep. 30, 2020 | 851,000 | 1,000 | 1,874,269,389 | 1,874,269,389 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash Flows From Operating Activities | ||
Net profit (loss) | $ (8,835,806) | $ (490,998) |
Adjustments to reconcile net income to net cash provided from operating activities: | ||
Amortization of convertible debt discount | 473,587 | |
Change in derivative liability | 2,997,742 | |
Loss on conversion | 987,447 | |
Common stock issued for services | (25,000) | |
Preferred stock issued for services | 4,000,000 | |
Liability for unissued shares due to agreements | 25,000 | |
Decrease (increase) in operating assets | ||
Accounts receivable | 268,839 | 533,023 |
Deposits | (12,000) | |
Earnings in excess of billings | (138,124) | 301,841 |
Inventory | 129 | |
Prepaid expenses | 8,584 | (2,863) |
Other assets | 156 | 2,082 |
Accounts payable | (119,728) | (895) |
Accrued interest | 403,736 | 5,982 |
Accrued liabilities | 224,110 | (5,049) |
Earnings in excess of revenues | (1,032,251) | (228,490) |
Long term debt | (28,356) | (100,133) |
Net cash provided( used by) operating activities | (801,935) | 14,500 |
Cash Flows From Investing Activities | ||
Property, plant and equipment, reductions | 30,839 | 36,363 |
Net cash used from investing activities | 30,839 | 36,363 |
Cash Flows From Financing Activities | ||
Contributed capital | (74,443) | |
Proceeds from convertible debt | 698,540 | |
Proceeds from promissory notes | 93,090 | |
Related party liabilities | 58,080 | |
Net cash provided from financing activities | 849,710 | (74,443) |
Net increase (decrease) in cash | 78,614 | (23,580) |
Cash, beginning of year | 1,444 | 43,285 |
Cash, end of year | 80,058 | 19,705 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid for income taxes | ||
Cash paid for interest | 34,029 | |
Schedule of non-cash investing & financing activities | ||
Lease adoption recognition | $ 423,360 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Description of Business Located in Grass Valley, CA, BrewBilt is one of the only California companies that custom designs, hand crafts, and integrates processing, fermentation and distillation processing systems for the craft beer, cannabis and hemp industries using “Best in Class” American made components integrated with stainless steel processing vessels using only American made steel. Founded in 2014, the company began in a backyard shop by Jeff Lewis with a vision of creating a profitable company in “Rural America” by hiring excellent personnel, designing and fabricating products to exceed customer’s expectations and compensating craftsmen with living wages and profit sharing to financially sustain their families within the community. Mr. Lewis has 15+ years of experience as a craft beer brewer, a custom tank/vessel designer, fabrication and integration expert and business owner who initially founded Portland Kettle Works, a nationally recognized manufacturer of craft beer brewing equipment located in the Northwest. BrewBilt has been built by having strong relationships with local suppliers of raw materials, equipment and services in California, an aggressive referral network of satisfied customers nationwide, and an Advisory Board consisting of successful business leaders that provide valuable product feedback and business expertise to management. The craft brewing & spirits industries continue to grow worldwide. California is where craft brewing began and now has over 900 operating breweries – being centrally located in this booming market was a large draw for BrewBilt to locate its manufacturing facility in the Sierra foothills. All BrewBilt products are designed and fabricated as “food grade” quality which enables the company to build vessels for food & beverage processing , the company is now building systems that are pharmaceutical grade for clients involved in distillation for the cannabis and hemp industries, thus making the revenue potential much greater. BrewBilt buys materials and components mostly from California suppliers which enables them to closely monitor quality, while the company’s revenues are generated from sales to customers throughout the country. The company is aggressively pursuing international orders and has held meetings with the Center for International Trade Development and U.S. Commercial Service to develop international opportunities. Presently, a great deal of sales interest in coming from Mexico, Japan, Europe, and Australia. BrewBilt competes against a number of companies, most of which are selling mass produced equipment from China made from less costly inferior quality Chinese steel which often is neither food nor pharmaceutical grade quality. While this broader market is very competitive, there continues to be little competition and strong market demand for higher quality, custom designed, hand crafted and integrated systems that BrewBilt produces. In July of 2016, BrewBilt moved from the small facility in Nevada City, CA to lease an eight thousand (8,000) square foot manufacturing facility in Grass Valley, CA. This facility was purchased by BrewBilt in January 2018 and upgraded with substantial tenant improvements. BrewBilt is prepared to expand again by leasing an additional seventy-six hundred (7,600) square feet in the same facility. BrewBilt obtains the majority of its leads through customer referrals and from online marketplaces. The company’s website is being expanded for online sales to include online educational/marketing videos that feature the company and its expanded integrated product line for the cannabis and hemp industries. BrewBilt has also created distribution sales agreements with individuals and companies to represent BrewBilt in both the domestic and international markets. The former company, Vet Online Supply Inc, a Florida corporation, was incorporated on May 31, 2014. Vet Online Supply Inc. manufactured and distributed wholistic CBD based pet products. On November 22, 2019, Vet Online Supply and Brewbilt Manufacturing (“BrewBilt”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) and completed a merger, whereby Brewbilt merged with and into Vet Online Supply, with BrewBilt remaining as the surviving entity (the “Merger”). Under U.S. generally accepted accounting principles, the merger is treated as a “reverse merger” under the purchase method of accounting, with BrewBilt as the accounting acquirer. On January 21, 2020, the Company filed Articles of Amendment to change its name to “BrewBilt Manufacturing Inc. The Company’s common stock will continue to trade on the OTCQB Market under the new Symbol “BBRW,” and the CUSIP number for the Company’s common stock is now 10756L108. Outstanding stock certificates for shares of the Company are not affected by the name change, and they continue to be valid and need not be exchanged. Financial Statement Presentation The audited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Fiscal year end The Company has selected December 31 as its fiscal year end. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates. Cash Equivalents The Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents. Revenue Recognition and Related Allowances The Company recognizes revenue when obligations under the terms of a contract with its customer are satisfied; generally, this occurs with the transfer of control of its products. Revenue is measured as the amount of consideration expected to be received in exchange for transferring products. If the conditions for revenue recognition are not met, the Company defers the revenue and related cost of sales until all conditions are met. As of September 30, 2020 and December 31, 2019, the Company has deferred $478,845 and $1,511,096, respectively, in revenue, and $191,162 and $53,038 in cost of sales, respectively, related to customer orders in progress. These amounts are recorded as billings in excess of revenues and earnings in excess of billings in the accompanying balance sheets. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the amount that management expects to collect from outstanding balances. Bad debts and allowances are provided based on historical experience and management’s evaluation of outstanding accounts receivable. Management evaluates past due or delinquency of accounts receivable based on the open invoices aged on due date basis. The allowance for doubtful accounts at September 30, 2020 and December 31, 2019 is $0. Inventories Inventories consist of raw materials, work in process and finished goods. Raw materials, which principally consist of raw stainless steel, raw stainless tubing, motors, pumps, and fittings, are stated at the lower of cost, determined on the first-in, first-out basis, or net realizable value. In addition, the Company is a manufacturer of premium CBD infused holistic pet products and as such will maintain inventory on site. The company directly drop ships to customers when ordered. The Company has wholesale distributors that purchase products in bulk inventory. Goodwill The excess of the cost over the fair value of net assets of acquired in the Merger is recorded as goodwill. Goodwill is not subject to amortization, but is reviewed for impairment annually, or more frequently whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. An impairment charge would be recorded to the extent the carrying value of goodwill exceeds its estimated fair value. The testing of goodwill under established guidelines for impairment requires significant use of judgment and assumptions. Changes in forecasted operations and other assumptions could materially affect the estimated fair values. Changes in business conditions could potentially require adjustments to these asset valuations. At December 31, 2019, the Company reviewed the goodwill recorded in the Merger and determined that an impairment expense of $2,289,884 was required. Warranty The Company is a manufacturer of products which are shipped to our customers directly from the Company. For products that are made from raw materials, the Company offers a 6-year limited warranty. The parts provided by outside vendors as finished goods that are added to a system produced by the Company as components, have a manufacturers’ warranty that is passed on to the end user of the complete system. To date, BrewBilt has spent less than $5,000 over the past 5 years for repairs (under warranty) on products they have built, with most of the costs going to cover travel and lodging expenses. As of September 30, 2020 and December 31, 2019, the Company has recorded a liability of $5,000 and $5,000, respectively, for warranties, which is included in accrued liabilities in the accompanying balance sheet. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses are carried at amortized cost and represent liabilities for goods and services provided to the Company prior to the end of the fiscal year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services. Fair Value of Financial Instruments Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk. In addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs is expanded. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels and which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1 - inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. Level 2 - inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. Financial assets and liabilities measured at fair value on a recurring basis: Input September 30, 2020 December 31, 2019 Level Fair Value Fair Value Derivative Liability 3 $ 1,285,625 $ 2,273,269 Total Financial Liabilities $ 1,285,625 $ 2,273,269 In management’s opinion, the fair value of convertible notes payable and advances payable is approximate to carrying value as the interest rates and other features of these instruments approximate those obtainable for similar instruments in the current market. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, exchange or credit risks arising from these financial instruments. As September 30, 2020 and December 31, 2019, the balances reported for cash, accounts receivable, prepaid expenses, accounts payable, and accrued liabilities, approximate the fair value because of their short maturities. Income Taxes The Company records deferred taxes in accordance with FASB ASC No. 740, Income Taxes. As of the date of this filing, the Company is current in filing their tax returns. The last return filed by the Company was December 31, 2019, and the Company has not accrued any potential penalties or interest from that period forward. Basic and Diluted Loss Per Share In accordance with ASC Topic 280 – “Earnings Per Share”, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) In February 2016, the FASB issued ASU 2016-02 (ASC Topic 842), Leases In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): |
GOING CONCERN
GOING CONCERN | 9 Months Ended |
Sep. 30, 2020 | |
Going Concern [Abstract] | |
GOING CONCERN | NOTE 2 – GOING CONCERN The Company has experienced net losses to date, and it has not generated sufficient revenue from operations to meet our operational overhead. We will need additional working capital to service debt and for ongoing operations, which raises substantial doubt about our ability to continue as a going concern. Management of the Company is preparing a strategy to meet operational shortfalls which may include equity funding, short term or long-term financing or debt financing, to enable the Company to reach profitable operations. Historically, the Company’s sole officer and director has provided short term loans to meet working capital shortfalls. We have recently entered into financing agreements with various third parties to meet our capital needs in fiscal 2020. The accompanying financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. |
MERGER TRANSACTION
MERGER TRANSACTION | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
MERGER TRANSACTION | NOTE 3 – MERGER TRANSACTION On November 22, 2019, Vet Online Supply and Brewbilt Manufacturing (“BrewBilt”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) and completed a merger, whereby Brewbilt merged with and into Vet Online Supply, with BrewBilt remaining as the surviving entity (the “Merger”). Under U.S. generally accepted accounting principles, the merger is treated as a “reverse merger” under the purchase method of accounting, with BrewBilt as the accounting acquirer. Pursuant with the Merger Asset Purchase Agreement, the Board of Directors has authorized that BrewBilt shall sell, assign and transfer all of its right, title and interest to its IP, fixed assets and “know how” to the Company (collectively, the “Seller’s Assets”). Vet Online Supply and BrewBilt mutually agree that BrewBilt will assign certain assets and provide the “Know-How” regarding the designing and building of the finest craft brewing equipment in the industry today. As consideration for the IP, fixed assets and the “Know -How”, the Company shall issue, or cause to be issued, $5,000,000 worth of Preferred Series A Stock (PAR $.001) within thirty (30) days from the date of the agreement. The number of Preferred Series A shares to be issued is 500,000 shares at a price of $10.00 per share and convertible pursuant the conversion rights as specified in the Articles of Incorporation and certificate of designation for VTNL. Th |
PREPAID EXPENSES
PREPAID EXPENSES | 9 Months Ended |
Sep. 30, 2020 | |
Notes to Financial Statements | |
PREPAID EXPENSES | NOTE 4 – PREPAID EXPENSES Prepaid fees represent amounts paid in advance for future contractual benefits to be received. Contracting expenses paid in advance are recorded as a prepaid asset and then amortized to the statements of operations when services are rendered, or over the life of the contract using the straight-line method. As of September 30, 2020, the Company accrued prepaid insurance expenses of $883 and as of December 31, 2019, the Company accrued prepaid insurance expenses and employee wages of $9,467. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following at September 30, 2020 and December 31, 2019: September 30, December 31, 2020 2019 Computer Equipment $ 18,313 $ 18,313 Leasehold Improvements 48,549 48,549 Machinery 250,762 250,762 Vehicles 6,717 6,717 Total 324,341 324,341 Less accumulated depreciation (238,978 ) (208,139 ) Net $ 85,363 $ 116,202 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2020 | |
Notes to Financial Statements | |
LEASES | NOTE 6 – LEASES The Company adopted the new lease guidance effective January 1, 2019 using the modified retrospective transition approach, applying the new standard to all of its leases existing at the date of initial application which is the effective date of adoption. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. We elected the package of practical expedients which permits us to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. We did not elect the hindsight practical expedient which permits entities to use hindsight in determining the lease term and assessing impairment. The adoption of the lease standard did not change our previously reported consolidated statements of operations and did not result in a cumulative catch-up adjustment to opening equity. The adoption of the new guidance resulted in the recognition of ROU assets of $423,360 and lease liabilities of $423,360. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In calculating the present value of the lease payments, the Company elected to utilize its incremental borrowing rate based on the remaining lease terms as of the January 1, 2019 adoption date. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred, if any. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Our lease has a remaining lease term of nine years. The Company has elected the practical expedient to combine lease and non-lease components as a single component. The lease expense is recognized over the expected term on a straight-line basis. Operating leases are recognized on the balance sheet as right-of-use assets, current operating lease liabilities and non-current operating lease liabilities. The new standard also provides practical expedients and certain exemptions for an entity’s ongoing accounting. We have elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases where the initial lease term is one year or less or for which the ROU asset at inception is deemed immaterial, we will not recognize ROU assets or lease liabilities. Those leases are expensed on a straight-line basis over the term of the lease. Operating Leases On January 1, 2018, the Company entered into a standard office lease for approximately 8,000 square feet of space, located in the Wolf Creek Industrial Building at 110 Spring Hill Dr. #10 Grass Valley, CA 95945. The lease has a term of 10 years, from January 1, 2018 through January 1, 2028, with a monthly rent of $4,861. ROU assets and lease liabilities related to our operating lease is as follows: September 30, December 31, 2020 2019 Right-of-use assets $ 368,248 $ 392,664 Current lease liabilities — — Non-current lease liabilities $ 368,248 $ 392,664 |
ACCURED LIABILITIES
ACCURED LIABILITIES | 9 Months Ended |
Sep. 30, 2020 | |
Notes to Financial Statements | |
ACCURED LIABILITIES | NOTE 7 – ACCURED LIABILITIES As of September 30, 2020 and December 31, 2019, accrued liabilities were comprised of the following: September 30, December 31, 2020 2019 Accrued liabilities Accrued wages $ 125,569 $ 5,784 Credit card 19,893 16,659 Customer deposits 103,550 — Payroll liabilities (103 ) (644 ) Sales tax payable 32,740 35,740 Warranty 5,000 5,000 Total accrued expenses $ 286,649 $ 62,539 |
BILLINGS IN EXCESS OF REVENUE A
BILLINGS IN EXCESS OF REVENUE AND EARNINGS IN EXCESS OF BILLINGS | 9 Months Ended |
Sep. 30, 2020 | |
Notes to Financial Statements | |
BILLINGS IN EXCESS OF REVENUE AND EARNINGS IN EXCESS OF BILLINGS | NOTE 8 – BILLINGS IN EXCESS OF REVENUE AND EARNINGS IN EXCESS OF BILLINGS Billings in excess of revenue is related to contracted amounts that have been invoiced to customers for which remaining performance obligations must be completed before the Company can recognize the revenue. Earnings in excess of billings is related to the cost of sales associated with the customer products that are incomplete. Changes in unearned revenue for the periods ended September 30, 2020 and December 31, 2019 were as follows: September 30, December 31, 2020 2019 Unearned revenue, beginning of the period $ 1,511,096 $ 1,905,346 Billings in excess of revenue during the period 316,347 536,420 Recognition of unearned revenue in prior periods (1,348,598 ) (930,670 ) Unearned revenue, end of the period $ 478,845 $ 1,511,096 As of September 30, 2020 and December 31, 2019, the Company has recorded $191,162 and $53,038, respectively in earnings in excess of billings for the cost of sales related to customer orders in progress. |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2020 | |
Convertible Notes Payable | |
CONVERTIBLE NOTE PAYABLE | NOTE 9 – CONVERTIBLE NOTES PAYABLE As of September 30, 2020 and December 31, 2019, notes payable were comprised of the following: Original Original Due Interest Conversion September 30, December 31, Note Amount Note Date Date Rate Rate 2020 2019 APG Capital #2 31,500 6/25/2018 6/25/2019 12% Variable — 31,500 Auctus Fund #2 84,000 1/10/2018 10/10/2018 24% Variable — 31,285 Auctus Fund #3 175,000 2/6/2018 11/6/2018 24% Variable — 175,000 Auctus Fund #4 90,000 3/6/2018 12/6/2018 24% Variable — 90,000 Auctus Fund #5 100,000 6/14/2018 3/14/2019 24% Variable — 100,000 Auctus Fund #6 75,000 8/13/2018 5/13/2019 12% Variable — 75,000 Auctus Fund #7 25,000 10/11/2018 7/11/2019 12% Variable — 25,000 Auctus Fund #8 25,750 12/20/2018 9/20/2019 12% Variable — 25,750 Auctus Fund #9 57,000 4/12/2019 1/12/2020 12% Variable — 57,000 Auctus Fund #10 31,000 7/22/2020 7/22/2020 12% Variable — 31,000 Auctus Fund #11 113,000 8/19/2020 8/19/2021 12% Variable 113,000 — CBP #3 30,000 5/1/2020 5/1/2021 10% Variable 30,000 — CBP #4 30,000 7/23/2020 7/23/2021 10% Variable 30,000 — EMA Financial #2 50,000 12/15/2017 12/15/2018 12% Variable — 8,474 EMA Financial #3 100,000 3/5/2018 3/5/2019 24% Variable — 73,305 EMA Financial #4 25,000 10/10/2018 7/10/2019 24% Variable — 25,000 EMA Financial #6 80,500 8/17/2020 5/17/2021 12% Variable 80,500 — Emerging Corp Cap #1 83,333 2/12/2018 2/11/2019 22% Variable 34,857 74,933 Emerging Corp Cap #2 110,000 10/31/2018 10/31/2019 12% Variable 110,000 110,000 Optempus #1 25,000 7/2/2020 7/2/2021 10% Variable 25,000 — Optempus #2 25,000 7/7/2020 7/2/2021 10% Variable 25,000 — Power Up Lending #11 73,000 4/6/2020 4/6/321 10% Variable 73,000 — Power Up Lending #12 53,000 5/4/2020 5/4/2021 10% Variable 53,000 — Power Up Lending #13 63,000 6/3/2020 6/3/2021 10% Variable 63,000 — Power Up Lending #14 43,000 7/30/2020 7/30/2021 10% Variable 43,000 — Power Up Lending #15 53,000 9/21/2020 9/21/2021 10% Variable 53,000 — Tri-Bridge #1 15,000 5/26/2020 5/26/2021 10% Variable 15,000 — Tri-Bridge #2 25,000 7/24/2020 7/24/2021 10% Variable 25,000 — $ 773,357 $ 933,247 Debt discount (642,097 ) (100,137 ) Financing costs/Original issue discount (55,356 ) (3,726 ) Notes payable, net of discount $ 75,904 $ 829,384 During the nine months ending September 30, 2020, the Company received proceeds from new convertible notes of $698,540, and reclassified accounts payable of $44,000 into convertible notes payable. The Company recorded no payments on their convertible notes, default penalties of $194,920, and conversions of $1,184,909 of convertible note principal. The Company recorded loan fees on new convertible notes of $87,460, which increased the debt discounts recorded on the convertible notes during the nine months ending September 30, 2020. All of the Company’s convertible notes have a conversion rate that is variable, and therefore, the Company has accounted for their conversion features as derivative instruments (see Note 10). The Company also recorded amortization of $473,587 on their convertible note debt discounts and loan fees. As of September 30, 2020, the convertible notes payable are convertible into 384,712,480 shares of the Company’s common stock. During the nine months ended September 30, 2020, the Company recorded interest expense of $155,252 on its convertible notes payable. During the nine months ended September 30, 2020, the Company recorded conversions of $341,092 of convertible note interest and $39,275 in conversion fees. As of September 30, 2020, the accrued interest balance was $54,868. As of September 30, 2020, we have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Liabilities | |
DERIVATIVE LIABILITIES | NOTE 10 – DERIVATIVE LIABILITIES The following table represents the Company’s derivative liability activity for the embedded conversion features for convertible notes and warrants for the period ending September 30, 2020 and December 31, 2019: September 30, December 31, 2020 2019 Balance, beginning of period $ 2,273,269 $ 15,347,154 Initial recognition of derivative liability 3,675,034 — Conversion of derivative instruments to Common Stock (4,960,896 ) (5,077 ) Mark-to-Market adjustment to fair value 298,218 (13,068,808 ) Balance, end of period $ 1,285,625 $ 2,273,269 During the period ended September 30, 2020 and December 31, 2019, the Company recorded derivative liabilities for embedded conversion features related to convertible notes payable and warrants of $3,675,034 and $0, respectively. During the period ended September 30, 2020 and December 31, 2019, in conjunction with convertible notes payable principal and accrued interest being converted into common stock of the Company and cashless exercise of warrants, derivative liabilities were reduced by $4,960,896 and $5,077, respectively. For the period ended September 30, 2020 and December 31, 2019, the Company performed a final mark-to-market adjustment for the derivative liability related to the convertible notes and warrants, and the carrying amount of the derivative liability related to the conversion feature, and recognized a loss of $298,218 and a gain on the derivative liability valuation of $13,068,808, respectively. The Company uses the Black-Scholes option pricing model to estimate fair value for those instruments convertible into common shares at inception, at conversion or extinguishment date, and at each reporting date. During the nine months ended September 30, 2020, the company used the following assumptions in their Black-Scholes model: (1) risk free interest rate .08% - .37%, (2) term of 0.12 years – 4.89 years, (3) expected stock volatility of 169.67% - 1,563.40%, (4) expected dividend rate of 0%, (5) common stock price of $0.001 - $0.03, and (6) exercise price of $0.0008 - $0.03. These instruments were not issued with the intent of effectively hedging any future cash flow, fair value of any asset, liability, or any net investment in a foreign operation. The instruments do not qualify for hedge accounting, and as such, all future changes in the fair value will be recognized in earnings until such time as the instruments are exercised, converted, or expire. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11 – RELATED PARTY TRANSACTIONS Mr. Jef Lewis, Chief Executive Officer, Chairman of the Board, President, Secretary, and Treasurer On November 22, 2019, the Company appointed Jeffrey Lewis as the new Chief Executive Officer, Chairman of the Board, Corporate President, Secretary, and Treasurer of the Company. The Company and Mr. Lewis entered into an Employee Agreement that included the issuance of 1,000 Preferred Series B Control Shares, and an annual salary of $200,000. Unpaid wages will accrue interest at 6% per annum and may be converted to restricted common stock at fair market value at the time of conversion. During the nine months ended September 30, 2020, the Company accrued wages of $150,000, interest of $3,126 and made payments of $55,509. Pursuant to the Merger Agreement, Mr. Lewis is to receive 500,000 shares of Preferred Series A shares, valued at $5,000,000. The shares are convertible pursuant the conversion rights as specified in the Articles of Incorporation and Certificate of Designation for the Company. As of December 31, 2019, the shares had not been issued, and the Company recorded a liability for unissued shares in the amount of $500, goodwill of $2,289,884 and $2,289,334 to additional paid in capital. During the nine months ended September 30, 2020, the Company issued 500,000 shares of Preferred Series A to Mr. Lewis and $500 was reclassed from liabilities for unissued shares to equity. The Company is periodically advanced noninterest bearing operating funds from related parties. The advances are due on demand and unsecured. During the nine months ended September 30, 2020, the Company made payments of $27,500 to amounts due to Mr. Lewis and $22,838 was advanced to the Company by Mr. Lewis. As of September 30, 2019 and December 31, 2018, the Company owed Mr. Lewis $1,143 and $5,805, respectively for advances to the Company. Mr. Samuel Berry, Director On November 22, 2019, the Company entered into a Consulting Agreement with Mr. Samuel Berry. Mr. Berry will receive an annual salary of $50,000, payable in quarterly installments at $12,500 per quarter. Mr. Daniel Rushford, former President During the nine months ended September 30, 2020, the Company’s former President cancelled 8,008,334 shares of common stock issued to settle debt of $25,265 and $25,000 in stock based compensation pursuant to an employee agreement. The cancellation resulted in a liability of unissued shares of $25,000 and an increase in related party liabilities of $25,265. |
LONG TERM DEBT
LONG TERM DEBT | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
LONG TERM DEBT | NOTE 12 – LONG TERM DEBT As of September 30, 2020 and December 31, 2019, long term debt was comprised of the following: September 30, December 31, 2020 2019 Long term debt Equipment lease $ — $ 1,952 Equipment loan 115,614 115,614 Line of credit 102,329 96,664 Other loans 61,588 93,657 Total long term debt $ 279,531 $ 307,887 Paycheck Protection Program Loan On May 11, 2020, the Company was granted a loan (the “Loan”) from BSD Capital, LLC dba Lendistry, in the amount of $61,558, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The Loan, which was in the form of a Note dated May 11, 2020, issued by the Borrower, matures on May 11, 2022, and bears interest at a rate of 1% per annum, payable monthly commencing on November 11, 2020. The Note may be prepaid by the Borrower at any time prior to maturity with no prepayment penalties. Funds from the Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations. The Company intends to use the entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. |
PREFERRED STOCK
PREFERRED STOCK | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
PREFERRED STOCK | NOTE 13 – PREFERRED STOCK On March 28, 2017, the Company filed an amendment to its articles of incorporation designating 20,000 shares of its authorized preferred stock, par value $0.001 as Series B Voting Preferred Stock. The Series B Voting Preferred Stock shall have the right to vote the shares on any matter requiring shareholder approval on the basis of 4 times the votes of all the issued and outstanding shares of common stock, as well as any issued and outstanding preferred stock. On July 1, 2019, the Company filed a Certificate of Amendment to increase the number of authorized Series A Preferred Stock to 30,000,000, with a par value of $0.001. Each share of Preferred Series A Stock shall have a value of $10 per share and will convert into common stock at the closing price of the common stock on the date of conversion. The Series A stock shall have no voting rights on corporate matters, unless and until the Series A shares are converted into Common Shares, at which time they will have the same voting rights as all Common Shareholders have; their consent shall not be required for taking any corporate action. Pursuant to the Merger Agreement dated November 22, 2019, the Company will issue $5,000,000 worth of Preferred Series A Stock to Mr. Lewis. The number of Preferred Series A shares to be issued is 500,000 shares at a price of $10.00 per share and convertible pursuant the conversion rights as specified in the Articles of Incorporation and Certificate of Designation for the Company. As of December 31, 2019, the shares had not been issued, and the Company recorded a liability for unissued shares in the amount of $500, goodwill of $2,289,884 and $2,289,334 to additional paid in capital. On April 6, 2020, the Company executed an addendum to the Distribution & Licensing Agreement dated November 19, 2019, with Bgreen Partners, Inc. The Company issued 400,000 Preferred Series A shares at a price of $10.00 per share convertible pursuant the conversion rights as specified in the Articles of Incorporation and certificate of designation for the Company. During the nine months ended September 30, 2020, 449,000 shares of Series A Preferred stock were converted to 865,259,856 common shares in accordance with the conversion terms. The issuances resulted in a loss on conversion of $987,447 which was recorded to the statement of operations. During the nine months ended September 30, 2020, 500,000 shares of Preferred Series A Shares were issued pursuant to the Merger Agreement, and a $500 liability for unissued shares was reclassed to equity. As of September 30, 2020, 30,000,000 Series A Preferred shares and 1,000 Series B Preferred shares were authorized, of which 851,000 Series A shares were issued and outstanding, and 1,000 Series B shares were issued and outstanding. |
COMMON STOCK
COMMON STOCK | 9 Months Ended |
Sep. 30, 2020 | |
Notes to Financial Statements | |
COMMON STOCK | NOTE 14 – COMMON STOCK On April 22, 2019, the Company approved the authorization of a 1 for 3,000 reverse stock split of the Company’s outstanding shares of common stock. The Company’s financial statements have been retroactively adjusted for this stock split for all periods presented. During the year ended December 31, 2019, the holder of a convertible note converted $1,148 of accrued interest and $500 in conversion fees into 400,000 shares of common stock. The common stock was valued at $5,077 based on the market price of the Company’s stock on the date of conversion. On March 25, 2020, the Company filed a Certificate of Amendment to increase the number of authorized common shares from 5,000,000,000 to 10,000,000,000 with a par value of $0.001. During the nine months ended September 30, 2020, the Company’s former President cancelled 8,008,334 shares of common stock issued to settle debt of $25,265 and $25,000 in stock based compensation pursuant to an employee agreement. The cancellation resulted in a liability of unissued shares of $25,000 and an increase in related party liabilities of $25,265. During the nine months ended September 30, 2020, 449,000 shares of Series A Preferred stock were converted to 865,259,856 common shares in accordance with the conversion terms. The issuances resulted in a loss on conversion of $987,447 which was recorded to the statement of operations. During the nine months ended September 30, 2020, the holders of a convertible notes converted $1,184,809 of principal, $341,092 of accrued interest and $39,275 in conversion fees into 897,520,532 shares of common stock. The common stock was valued at $4,823,926 based on the market price of the Company’s stock on the date of conversion. As of September 30, 2020, 10,000,000,000 were authorized, of which 1,874,269,389 shares are issued and outstanding. Warrants We account for common stock purchase warrants as derivative liabilities and debt issuance costs on the balance sheet at fair value, and changes in fair value during the periods presented in the statement of operations, which is revalued at each balance sheet date subsequent to the initial issuance of the warrant. During the nine months ended September 30, 2020, warrant holders exercised the warrants and the Company issued 161,202,720 shares of common stock through a cashless exercise of the warrants in accordance with the conversion terms. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 15 – INCOME TAX Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. The deferred tax asset and the valuation allowance consist of the following at September 30, 2020: September 30, 2020 Net operating loss $ 3,509,865 Statutory rate 21 % Expected tax recovery 737,072 Change in valuation allowance (737,072 ) Income tax provision $ — Components of deferred tax asset: Non-capital tax loss carry-forwards 737,072 Less: valuation allowance (737,072 ) Net deferred tax asset $ — As of the date of this filing, the Company is current in filing their tax returns. The last return filed by the Company was December 31, 2019, and the Company has not accrued any potential penalties or interest from that period forward. |
COMMITMENTS
COMMITMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | NOTE 16 – COMMITMENTS AND CONTINGENCIES Distribution& Licensing Agreement On November 19, 2019, the Company entered into a Distribution & Licensing Agreement with Bgreen Partners, Inc., a California Corporation. The Agreement provides exclusive rights to various cannabis and agricultural products inclusive of grow-containers and CBD Extraction Systems to be used for mobile processing. The IP and rights are On April 6, 2020, the Company executed an addendum to the Distribution & Licensing Agreement dated November 19, 2019, with Bgreen Partners, Inc. The Company issued 400,000 Preferred Series A shares at a price of $10.00 per share convertible pursuant the conversion rights as specified in the Articles of Incorporation and certificate of designation for the Company. Employee Agreement On November 22, 2019, the Company entered into an Employment Agreement with Mr. Daniel Rushford. Mr. Rushford will receive an annual salary of $36,000 to be paid in equal monthly installments. Unpaid amounts will accrue annual interest of 6%. The term of the Agreement is for one year and is renewable upon mutual consent. Lease On January 1, 2018, the Company entered into a standard office lease for approximately 8,000 square feet of space, located in the Wolf Creek Industrial Building at 110 Spring Hill Dr. #10 Grass Valley, CA 95945. The lease has a term of 10 years, from January 1, 2018 through January 1, 2028, with a monthly rent of $4,861. Service Agreement On June 12, 2018, the Company entered into a preventative maintenance service agreement with Atlas Copco Compressions LLC. The agreement is for a period of 5 years, at a cost of $145.13 per month. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17 – SUBSEQUENT EVENTS Convertible Notes On October 14, 2020, the Company entered in a Convertible Promissory Note in the amount of $43,000. The note is unsecured, bears interest at 10% per annum, and matures on October 14, 2021. On October 21, 2020, the Company entered in a Convertible Promissory Note in the amount of $50,000. The note is unsecured, bears interest at 12% per annum, and matures on July 21, 2021. Subsequent Issuances On October 1, 2020, 40,000 shares of Preferred Series A stock was converted in to 105,263,158 shares of common stock. On October 6, 2020, 17,640 shares of Preferred Series A stock was converted in to 88,200,000 shares of common stock. On October 13, 2020, the holder of a convertible note converted a total of $30,000 of principal into 14,285,714 shares of our common stock. On October 13, 2020, the holder of a convertible note converted a total of $32,000 of principal into 15,238,095 shares of our common stock. On October 14, 2020, the holder of a convertible note converted a total of $14,650 of principal and interest into 6,976,190 shares of our common stock. On October 27, 2020, 9,000 shares of Preferred Series A stock was converted in to 40,000,000 shares of common stock. On October 27, 2020, 21,600 shares of Preferred Series A stock was converted in to 90,000,000 shares of common stock. On October 27, 2020, 25,000 shares of Preferred Series A stock was converted in to 100,000,000 shares of common stock. On October 28, 2020, 13,500 shares of Preferred Series A stock was converted in to 90,000,000 shares of common stock. On November 5, 2020, the holder of a convertible note converted a total of $25,000 of principal into 16,666,667 shares of our common stock. On November 6, 2020, the holder of a convertible note converted a total of $30,650 of principal and interest into 21,892,857 shares of our common stock. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | Organization and Description of Business Located in Grass Valley, CA, BrewBilt is one of the only California companies that custom designs, hand crafts, and integrates processing, fermentation and distillation processing systems for the craft beer, cannabis and hemp industries using “Best in Class” American made components integrated with stainless steel processing vessels using only American made steel. Founded in 2014, the company began in a backyard shop by Jeff Lewis with a vision of creating a profitable company in “Rural America” by hiring excellent personnel, designing and fabricating products to exceed customer’s expectations and compensating craftsmen with living wages and profit sharing to financially sustain their families within the community. Mr. Lewis has 15+ years of experience as a craft beer brewer, a custom tank/vessel designer, fabrication and integration expert and business owner who initially founded Portland Kettle Works, a nationally recognized manufacturer of craft beer brewing equipment located in the Northwest. BrewBilt has been built by having strong relationships with local suppliers of raw materials, equipment and services in California, an aggressive referral network of satisfied customers nationwide, and an Advisory Board consisting of successful business leaders that provide valuable product feedback and business expertise to management. The craft brewing & spirits industries continue to grow worldwide. California is where craft brewing began and now has over 900 operating breweries – being centrally located in this booming market was a large draw for BrewBilt to locate its manufacturing facility in the Sierra foothills. All BrewBilt products are designed and fabricated as “food grade” quality which enables the company to build vessels for food & beverage processing , the company is now building systems that are pharmaceutical grade for clients involved in distillation for the cannabis and hemp industries, thus making the revenue potential much greater. BrewBilt buys materials and components mostly from California suppliers which enables them to closely monitor quality, while the company’s revenues are generated from sales to customers throughout the country. The company is aggressively pursuing international orders and has held meetings with the Center for International Trade Development and U.S. Commercial Service to develop international opportunities. Presently, a great deal of sales interest in coming from Mexico, Japan, Europe, and Australia. BrewBilt competes against a number of companies, most of which are selling mass produced equipment from China made from less costly inferior quality Chinese steel which often is neither food nor pharmaceutical grade quality. While this broader market is very competitive, there continues to be little competition and strong market demand for higher quality, custom designed, hand crafted and integrated systems that BrewBilt produces. In July of 2016, BrewBilt moved from the small facility in Nevada City, CA to lease an eight thousand (8,000) square foot manufacturing facility in Grass Valley, CA. This facility was purchased by BrewBilt in January 2018 and upgraded with substantial tenant improvements. BrewBilt is prepared to expand again by leasing an additional seventy-six hundred (7,600) square feet in the same facility. BrewBilt obtains the majority of its leads through customer referrals and from online marketplaces. The company’s website is being expanded for online sales to include online educational/marketing videos that feature the company and its expanded integrated product line for the cannabis and hemp industries. BrewBilt has also created distribution sales agreements with individuals and companies to represent BrewBilt in both the domestic and international markets. The former company, Vet Online Supply Inc, a Florida corporation, was incorporated on May 31, 2014. Vet Online Supply Inc. manufactured and distributed wholistic CBD based pet products. On November 22, 2019, Vet Online Supply and Brewbilt Manufacturing (“BrewBilt”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) and completed a merger, whereby Brewbilt merged with and into Vet Online Supply, with BrewBilt remaining as the surviving entity (the “Merger”). Under U.S. generally accepted accounting principles, the merger is treated as a “reverse merger” under the purchase method of accounting, with BrewBilt as the accounting acquirer. On January 21, 2020, the Company filed Articles of Amendment to change its name to “BrewBilt Manufacturing Inc. The Company’s common stock will continue to trade on the OTCQB Market under the new Symbol “BBRW,” and the CUSIP number for the Company’s common stock is now 10756L108. Outstanding stock certificates for shares of the Company are not affected by the name change, and they continue to be valid and need not be exchanged. |
Financial Statement Presentation | Financial Statement Presentation The audited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Fiscal year end | Fiscal year end The Company has selected December 31 as its fiscal year end. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates. |
Cash Equivalents | Cash Equivalents The Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents. |
Revenue recognition and related allowances | Revenue Recognition and Related Allowances The Company recognizes revenue when obligations under the terms of a contract with its customer are satisfied; generally, this occurs with the transfer of control of its products. Revenue is measured as the amount of consideration expected to be received in exchange for transferring products. If the conditions for revenue recognition are not met, the Company defers the revenue and related cost of sales until all conditions are met. As of September 30, 2020 and December 31, 2019, the Company has deferred $478,845 and $1,511,096, respectively, in revenue, and $191,162 and $53,038 in cost of sales, respectively, related to customer orders in progress. These amounts are recorded as billings in excess of revenues and earnings in excess of billings in the accompanying balance sheets. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the amount that management expects to collect from outstanding balances. Bad debts and allowances are provided based on historical experience and management’s evaluation of outstanding accounts receivable. Management evaluates past due or delinquency of accounts receivable based on the open invoices aged on due date basis. The allowance for doubtful accounts at September 30, 2020 and December 31, 2019 is $0. |
Inventories | Inventories Inventories consist of raw materials, work in process and finished goods. Raw materials, which principally consist of raw stainless steel, raw stainless tubing, motors, pumps, and fittings, are stated at the lower of cost, determined on the first-in, first-out basis, or net realizable value. In addition, the Company is a manufacturer of premium CBD infused holistic pet products and as such will maintain inventory on site. The company directly drop ships to customers when ordered. The Company has wholesale distributors that purchase products in bulk inventory. |
Goodwill | Goodwill The excess of the cost over the fair value of net assets of acquired in the Merger is recorded as goodwill. Goodwill is not subject to amortization, but is reviewed for impairment annually, or more frequently whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. An impairment charge would be recorded to the extent the carrying value of goodwill exceeds its estimated fair value. The testing of goodwill under established guidelines for impairment requires significant use of judgment and assumptions. Changes in forecasted operations and other assumptions could materially affect the estimated fair values. Changes in business conditions could potentially require adjustments to these asset valuations. At December 31, 2019, the Company reviewed the goodwill recorded in the Merger and determined that an impairment expense of $2,289,884 was required. |
Warranty | Warranty The Company is a manufacturer of products which are shipped to our customers directly from the Company. For products that are made from raw materials, the Company offers a 6-year limited warranty. The parts provided by outside vendors as finished goods that are added to a system produced by the Company as components, have a manufacturers’ warranty that is passed on to the end user of the complete system. To date, BrewBilt has spent less than $5,000 over the past 5 years for repairs (under warranty) on products they have built, with most of the costs going to cover travel and lodging expenses. As of September 30, 2020 and December 31, 2019, the Company has recorded a liability of $5,000 and $5,000, respectively, for warranties, which is included in accrued liabilities in the accompanying balance sheet. |
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses Accounts payable and accrued expenses are carried at amortized cost and represent liabilities for goods and services provided to the Company prior to the end of the fiscal year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services. |
Fair Value Measurements | Fair Value of Financial Instruments Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk. In addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs is expanded. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels and which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1 - inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. Level 2 - inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. Financial assets and liabilities measured at fair value on a recurring basis: Input September 30, 2020 December 31, 2019 Level Fair Value Fair Value Derivative Liability 3 $ 1,285,625 $ 2,273,269 Total Financial Liabilities $ 1,285,625 $ 2,273,269 In management’s opinion, the fair value of convertible notes payable and advances payable is approximate to carrying value as the interest rates and other features of these instruments approximate those obtainable for similar instruments in the current market. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, exchange or credit risks arising from these financial instruments. As September 30, 2020 and December 31, 2019, the balances reported for cash, accounts receivable, prepaid expenses, accounts payable, and accrued liabilities, approximate the fair value because of their short maturities. |
Income taxes | Income Taxes The Company records deferred taxes in accordance with FASB ASC No. 740, Income Taxes. As of the date of this filing, the Company is current in filing their tax returns. The last return filed by the Company was December 31, 2019, and the Company has not accrued any potential penalties or interest from that period forward. |
Basic and Diluted Loss Per Share | Basic and Diluted Loss Per Share In accordance with ASC Topic 280 – “Earnings Per Share”, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. |
New Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) In February 2016, the FASB issued ASU 2016-02 (ASC Topic 842), Leases In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of the fair value of our derivative liabilities | Financial assets and liabilities measured at fair value on a recurring basis: Input September 30, 2020 December 31, 2019 Level Fair Value Fair Value Derivative Liability 3 $ 1,285,625 $ 2,273,269 Total Financial Liabilities $ 1,285,625 $ 2,273,269 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following at September 30, 2020 and December 31, 2019: September 30, December 31, 2020 2019 Computer Equipment $ 18,313 $ 18,313 Leasehold Improvements 48,549 48,549 Machinery 250,762 250,762 Vehicles 6,717 6,717 Total 324,341 324,341 Less accumulated depreciation (238,978 ) (208,139 ) Net $ 85,363 $ 116,202 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Notes to Financial Statements | |
Schedule of Right of use of assets and lease liabilities | As of September 30, 2020 and December 31, 2019, long term debt was comprised of the following: September 30, December 31, 2020 2019 Long term debt Equipment lease $ — $ 1,952 Equipment loan 115,614 115,614 Line of credit 102,329 96,664 Other loans 61,588 93,657 Total long term debt $ 279,531 $ 307,887 |
ACCURED LIABILITIES (Tables)
ACCURED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Notes to Financial Statements | |
Schedule of Accured Liabilities | As of September 30, 2020 and December 31, 2019, accrued liabilities were comprised of the following: September 30, December 31, 2020 2019 Accrued liabilities Accrued wages $ 125,569 $ 5,784 Credit card 19,893 16,659 Customer deposits 103,550 — Payroll liabilities (103 ) (644 ) Sales tax payable 32,740 35,740 Warranty 5,000 5,000 Total accrued expenses $ 286,649 $ 62,539 |
BILLINGS IN EXCESS OF REVENUE_2
BILLINGS IN EXCESS OF REVENUE AND EARNINGS IN EXCESS OF BILLINGS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Notes to Financial Statements | |
Schedule of Changes in unearned revenue | Changes in unearned revenue for the periods ended September 30, 2020 and December 31, 2019 were as follows: September 30, December 31, 2020 2019 Unearned revenue, beginning of the period $ 1,511,096 $ 1,905,346 Billings in excess of revenue during the period 316,347 536,420 Recognition of unearned revenue in prior periods (1,348,598 ) (930,670 ) Unearned revenue, end of the period $ 478,845 $ 1,511,096 |
CONVERTIBLE NOTES PAYABLE (Tabl
CONVERTIBLE NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Convertible Notes Payable Tables Abstract | |
Schedule of Notes payable | As of September 30, 2020 and December 31, 2019, notes payable were comprised of the following: Original Original Due Interest Conversion September 30, December 31, Note Amount Note Date Date Rate Rate 2020 2019 APG Capital #2 31,500 6/25/2018 6/25/2019 12% Variable — 31,500 Auctus Fund #2 84,000 1/10/2018 10/10/2018 24% Variable — 31,285 Auctus Fund #3 175,000 2/6/2018 11/6/2018 24% Variable — 175,000 Auctus Fund #4 90,000 3/6/2018 12/6/2018 24% Variable — 90,000 Auctus Fund #5 100,000 6/14/2018 3/14/2019 24% Variable — 100,000 Auctus Fund #6 75,000 8/13/2018 5/13/2019 12% Variable — 75,000 Auctus Fund #7 25,000 10/11/2018 7/11/2019 12% Variable — 25,000 Auctus Fund #8 25,750 12/20/2018 9/20/2019 12% Variable — 25,750 Auctus Fund #9 57,000 4/12/2019 1/12/2020 12% Variable — 57,000 Auctus Fund #10 31,000 7/22/2020 7/22/2020 12% Variable — 31,000 Auctus Fund #11 113,000 8/19/2020 8/19/2021 12% Variable 113,000 — CBP #3 30,000 5/1/2020 5/1/2021 10% Variable 30,000 — CBP #4 30,000 7/23/2020 7/23/2021 10% Variable 30,000 — EMA Financial #2 50,000 12/15/2017 12/15/2018 12% Variable — 8,474 EMA Financial #3 100,000 3/5/2018 3/5/2019 24% Variable — 73,305 EMA Financial #4 25,000 10/10/2018 7/10/2019 24% Variable — 25,000 EMA Financial #6 80,500 8/17/2020 5/17/2021 12% Variable 80,500 — Emerging Corp Cap #1 83,333 2/12/2018 2/11/2019 22% Variable 34,857 74,933 Emerging Corp Cap #2 110,000 10/31/2018 10/31/2019 12% Variable 110,000 110,000 Optempus #1 25,000 7/2/2020 7/2/2021 10% Variable 25,000 — Optempus #2 25,000 7/7/2020 7/2/2021 10% Variable 25,000 — Power Up Lending #11 73,000 4/6/2020 4/6/321 10% Variable 73,000 — Power Up Lending #12 53,000 5/4/2020 5/4/2021 10% Variable 53,000 — Power Up Lending #13 63,000 6/3/2020 6/3/2021 10% Variable 63,000 — Power Up Lending #14 43,000 7/30/2020 7/30/2021 10% Variable 43,000 — Power Up Lending #15 53,000 9/21/2020 9/21/2021 10% Variable 53,000 — Tri-Bridge #1 15,000 5/26/2020 5/26/2021 10% Variable 15,000 — Tri-Bridge #2 25,000 7/24/2020 7/24/2021 10% Variable 25,000 — $ 773,357 $ 933,247 Debt discount (642,097 ) (100,137 ) Financing costs/Original issue discount (55,356 ) (3,726 ) Notes payable, net of discount $ 75,904 $ 829,384 |
DERIVATIVE LIABIITIES (Tables)
DERIVATIVE LIABIITIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Liabiities | |
Schedule of fair value of the conversion feature convertible note | The following table represents the Company’s derivative liability activity for the embedded conversion features for convertible notes and warrants for the period ending September 30, 2020 and December 31, 2019: September 30, December 31, 2020 2019 Balance, beginning of period $ 2,273,269 $ 15,347,154 Initial recognition of derivative liability 3,675,034 — Conversion of derivative instruments to Common Stock (4,960,896 ) (5,077 ) Mark-to-Market adjustment to fair value 298,218 (13,068,808 ) Balance, end of period $ 1,285,625 $ 2,273,269 |
LONG TERM DEBT (Tables)
LONG TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long term Debt | As of September 30, 2020 and December 31, 2019, long term debt was comprised of the following: September 30, December 31, 2020 2019 Long term debt Equipment lease $ — $ 1,952 Equipment loan 115,614 115,614 Line of credit 102,329 96,664 Other loans 61,588 93,657 Total long term debt $ 279,531 $ 307,887 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Income Taxes Tables Abstract | |
Schedule of Deferred Tax Asset and Valuation Allowance | The deferred tax asset and the valuation allowance consist of the following at September 30, 2020: September 30, 2020 Net operating loss $ 3,509,865 Statutory rate 21 % Expected tax recovery 737,072 Change in valuation allowance (737,072 ) Income tax provision $ — Components of deferred tax asset: Non-capital tax loss carry-forwards 737,072 Less: valuation allowance (737,072 ) Net deferred tax asset $ — |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Cash equivalent term (In days) | 90 days |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Fair Value, Measurements, Recurring [Member] - Derivative [Member] - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value of Liability | $ 1,285,625 | $ 2,273,269 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value of Liability | $ 1,285,625 | $ 2,273,269 |
MERGER TRANSACTION (Details Nar
MERGER TRANSACTION (Details Narrative) | Nov. 22, 2019 |
Merger Agreement | |
Business Merger Description | Pursuant with the Merger Asset Purchase Agreement, the Board of Directors has authorized that BrewBilt shall sell, assign and transfer all of its right, title and interest to its IP, fixed assets and “know how” to the Company (collectively, the “Seller’s Assets”). Vet Online Supply and BrewBilt mutually agree that BrewBilt will assign certain assets and provide the “Know-How” regarding the designing and building of the finest craft brewing equipment in the industry today. As consideration for the IP, fixed assets and the “Know -How”, the Company shall issue, or cause to be issued, $5,000,000 worth of Preferred Series A Stock (PAR $.001) within thirty (30) days from the date of the agreement. The number of Preferred Series A shares to be issued is 500,000 shares at a price of $10.00 per share and convertible pursuant the conversion rights as specified in the Articles of Incorporation and certificate of designation for VTNL. BrewBilt has designated that the said stock be issued in the name of its President, Jeffrey Lewis. |
PREPAID EXPENSES (Details Narra
PREPAID EXPENSES (Details Narrative) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Notes to Financial Statements | ||
Prepaid expenses | $ 883 | $ 9,467 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Total | $ 324,341 | $ 324,341 |
Less accumulated depreciation | (238,978) | (208,139) |
Net | 85,363 | 116,202 |
Computer Equipment | ||
Total | 18,313 | 18,313 |
Leasehold Improvements | ||
Total | 48,549 | 48,549 |
Machinery | ||
Total | 250,762 | 250,762 |
Vehicles | ||
Total | $ 6,717 | $ 6,717 |
LEASES (Details)
LEASES (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Notes to Financial Statements | ||
Right-of-use assets | $ 368,248 | $ 392,664 |
Current lease liabilities | ||
Non-current lease liabilities | $ 368,248 | $ 392,664 |
LEASES (Details Narrative)
LEASES (Details Narrative) | Jan. 02, 2018USD ($)ft² |
Notes to Financial Statements | |
Lease Area | ft² | 8,000 |
Property Description | Wolf Creek Industrial Building at 110 Spring Hill Dr. #10 Grass Valley, CA 95945 |
Lease Term | 10 years |
Monthly Rent | $ | $ 4,861 |
ACCURED LIABILITIES (Details)
ACCURED LIABILITIES (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Disclosure Accured Liabilities Details Abstract | ||
Accrued wages | $ 125,569 | $ 5,784 |
Credit card | 19,893 | 16,659 |
Customer deposits | 103,550 | |
Payroll liabilities | (103) | (644) |
Sales tax payable | 32,740 | 35,740 |
Warranty | 18,936 | 16,659 |
Total accrued expenses | $ 286,649 | $ 62,539 |
BILLINGS IN EXCESS OF REVENUE_3
BILLINGS IN EXCESS OF REVENUE AND EARNINGS IN EXCESS OF BILLINGS (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Unearned revenue, beginning of the period | $ 1,511,096 | $ 1,905,346 |
Billings in excess of revenue during the period | 316,347 | 536,420 |
Recognition of unearned revenue in prior periods | (1,348,598) | (930,670) |
Unearned revenue, end of the period | $ 478,845 | $ 1,511,096 |
CONVERTIBLE NOTES PAYABLE (Deta
CONVERTIBLE NOTES PAYABLE (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Notes payable | $ 773,357 | $ 933,247 |
Debt discount | (642,097) | (100,137) |
Financing costs./Original issue discount | (55,356) | (3,726) |
Notes payable, net of discount | 75,904 | 829,384 |
APG Capital #2 | ||
Original Note Amount | $ 31,500 | |
Derivative, Inception Date | Jun. 25, 2018 | |
Derivative, Maturity Date | Jun. 25, 2019 | |
Derivative, Variable Interest Rate | 12.00% | |
Notes payable | 31,500 | |
Auctus Fund #2 | ||
Original Note Amount | $ 84,000 | |
Derivative, Inception Date | Jan. 10, 2018 | |
Derivative, Maturity Date | Oct. 10, 2018 | |
Derivative, Variable Interest Rate | 24.00% | |
Notes payable | 31,285 | |
Auctus Fund #3 | ||
Original Note Amount | $ 175,000 | |
Derivative, Inception Date | Feb. 6, 2018 | |
Derivative, Maturity Date | Nov. 6, 2018 | |
Derivative, Variable Interest Rate | 24.00% | |
Notes payable | 175,000 | |
Auctus Fund #4 | ||
Original Note Amount | $ 90,000 | |
Derivative, Inception Date | Mar. 6, 2018 | |
Derivative, Maturity Date | Dec. 6, 2018 | |
Derivative, Variable Interest Rate | 24.00% | |
Notes payable | 90,000 | |
Auctus Fund #5 | ||
Original Note Amount | $ 100,000 | |
Derivative, Inception Date | Jun. 14, 2018 | |
Derivative, Maturity Date | Mar. 14, 2019 | |
Derivative, Variable Interest Rate | 24.00% | |
Notes payable | $ 100,000 | 100,000 |
Auctus Fund #6 | ||
Original Note Amount | $ 75,000 | |
Derivative, Inception Date | Aug. 13, 2018 | |
Derivative, Maturity Date | May 13, 2019 | |
Derivative, Variable Interest Rate | 12.00% | |
Notes payable | $ 75,000 | 75,000 |
Auctus Fund #7 | ||
Original Note Amount | $ 25,000 | |
Derivative, Inception Date | Oct. 11, 2018 | |
Derivative, Maturity Date | Jul. 11, 2019 | |
Derivative, Variable Interest Rate | 12.00% | |
Notes payable | $ 25,000 | 25,000 |
Auctus Fund #8 | ||
Original Note Amount | $ 25,750 | |
Derivative, Inception Date | Dec. 20, 2018 | |
Derivative, Maturity Date | Sep. 20, 2019 | |
Derivative, Variable Interest Rate | 12.00% | |
Notes payable | $ 25,750 | 25,750 |
Auctus Fund #9 | ||
Original Note Amount | $ 57,000 | |
Derivative, Inception Date | Apr. 12, 2019 | |
Derivative, Maturity Date | Jan. 12, 2020 | |
Derivative, Variable Interest Rate | 12.00% | |
Notes payable | $ 57,000 | 57,000 |
Auctus Fund #10 | ||
Original Note Amount | $ 31,000 | |
Derivative, Inception Date | Jul. 22, 2020 | |
Derivative, Maturity Date | Jul. 22, 2020 | |
Derivative, Variable Interest Rate | 12.00% | |
Notes payable | $ 31,000 | 31,000 |
EMA Financial #2 | ||
Original Note Amount | $ 50,000 | |
Derivative, Inception Date | Dec. 15, 2017 | |
Derivative, Maturity Date | Dec. 15, 2018 | |
Derivative, Variable Interest Rate | 12.00% | |
Notes payable | 8,474 | |
EMA Financial #3 | ||
Original Note Amount | $ 100,000 | |
Derivative, Inception Date | Mar. 5, 2018 | |
Derivative, Maturity Date | Mar. 5, 2019 | |
Derivative, Variable Interest Rate | 24.00% | |
Notes payable | 73,305 | |
EMA Financial #4 | ||
Original Note Amount | $ 25,000 | |
Derivative, Inception Date | Oct. 10, 2018 | |
Derivative, Maturity Date | Jul. 10, 2019 | |
Derivative, Variable Interest Rate | 24.00% | |
Notes payable | 25,000 | |
EMA Financial #5 | ||
Original Note Amount | $ 80,500 | |
Derivative, Inception Date | Jan. 30, 2020 | |
Derivative, Maturity Date | Oct. 31, 2020 | |
Derivative, Variable Interest Rate | 10.00% | |
Notes payable | $ 80,500 | |
Emerging Corp Capital #1 | ||
Original Note Amount | $ 83,333 | |
Derivative, Inception Date | Feb. 12, 2018 | |
Derivative, Maturity Date | Feb. 11, 2019 | |
Derivative, Variable Interest Rate | 22.00% | |
Notes payable | $ 34,857 | 74,933 |
Emerging Corp Capital #2 | ||
Original Note Amount | $ 110,000 | |
Derivative, Inception Date | Oct. 31, 2018 | |
Derivative, Maturity Date | Oct. 31, 2019 | |
Derivative, Variable Interest Rate | 12.00% | |
Notes payable | $ 110,000 | $ 110,000 |
CBP #3 | ||
Original Note Amount | $ 30,000 | |
Derivative, Inception Date | May 1, 2020 | |
Derivative, Maturity Date | May 1, 2021 | |
Derivative, Variable Interest Rate | 10.00% | |
Notes payable | $ 30,000 | |
Power Up Lending #11 | ||
Original Note Amount | $ 73,000 | |
Derivative, Inception Date | Apr. 6, 2020 | |
Derivative, Maturity Date | Apr. 6, 2021 | |
Derivative, Variable Interest Rate | 10.00% | |
Notes payable | $ 73,000 | |
Power Up Lending #12 | ||
Original Note Amount | $ 53,000 | |
Derivative, Inception Date | May 4, 2020 | |
Derivative, Maturity Date | May 4, 2021 | |
Derivative, Variable Interest Rate | 10.00% | |
Notes payable | $ 53,000 | |
Power Up Lending #13 | ||
Original Note Amount | $ 63,000 | |
Derivative, Inception Date | Jun. 3, 2020 | |
Derivative, Maturity Date | Jun. 3, 2021 | |
Derivative, Variable Interest Rate | 10.00% | |
Notes payable | $ 63,000 | |
Tri-Bridge | ||
Original Note Amount | $ 15,000 | |
Derivative, Inception Date | May 26, 2020 | |
Derivative, Maturity Date | May 26, 2021 | |
Derivative, Variable Interest Rate | 10.00% | |
Notes payable | $ 15,000 | |
Auctus Fund #11 | ||
Original Note Amount | $ 113,000 | |
Derivative, Inception Date | Aug. 19, 2020 | |
Derivative, Maturity Date | Aug. 19, 2021 | |
Derivative, Variable Interest Rate | 12.00% | |
Notes payable | $ 113,000 | |
CBP #4 | ||
Original Note Amount | $ 30,000 | |
Derivative, Inception Date | Jul. 23, 2020 | |
Derivative, Maturity Date | Jul. 23, 2021 | |
Derivative, Variable Interest Rate | 10.00% | |
Notes payable | $ 30,000 | |
Optempus #1 | ||
Original Note Amount | $ 25,000 | |
Derivative, Inception Date | Jul. 2, 2020 | |
Derivative, Maturity Date | Jul. 2, 2021 | |
Derivative, Variable Interest Rate | 10.00% | |
Notes payable | $ 25,000 | |
Optempus #2 | ||
Original Note Amount | $ 25,000 | |
Derivative, Inception Date | Jul. 7, 2020 | |
Derivative, Maturity Date | Jul. 2, 2021 | |
Derivative, Variable Interest Rate | 10.00% | |
Notes payable | $ 25,000 | |
Power Up Lending #14 | ||
Original Note Amount | $ 43,000 | |
Derivative, Inception Date | Jul. 30, 2020 | |
Derivative, Maturity Date | Jul. 30, 2021 | |
Derivative, Variable Interest Rate | 10.00% | |
Notes payable | $ 43,000 | |
Power Up Lending #15 | ||
Original Note Amount | $ 53,000 | |
Derivative, Inception Date | Sep. 21, 2020 | |
Derivative, Maturity Date | Sep. 21, 2021 | |
Derivative, Variable Interest Rate | 10.00% | |
Notes payable | $ 53,000 | |
Tri-Bridge #2 | ||
Original Note Amount | $ 25,000 | |
Derivative, Inception Date | Jul. 24, 2020 | |
Derivative, Maturity Date | Jul. 24, 2021 | |
Derivative, Variable Interest Rate | 10.00% | |
Notes payable | $ 25,000 |
DERIVATIVE LIABIITIES (Details)
DERIVATIVE LIABIITIES (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Disclosure Derivative Liabiities Details Abstract | ||
Balance, at merger date | $ 2,273,269 | $ 15,347,154 |
Initial recognition of derivative liability | 3,675,034 | |
Conversion of derivative instruments to Common Stock | (4,960,896) | (5,077) |
Mark-to-Market adjustment to fair value | 298,218 | (13,068,808) |
Balance, end of period | $ 1,285,625 | $ 2,273,269 |
DERIVATIVE LIABIITIES (Details
DERIVATIVE LIABIITIES (Details Narrative) - Liabilities, Total [Member] | 9 Months Ended |
Sep. 30, 2020$ / shares | |
Expected dividends | 0.00% |
Minimum [Member] | |
Expected volatility | 169.67% |
Expected term | 29 days |
Risk free interest rate | 0.08% |
Common Stock Price | $ .001 |
Exercise price | $ 0.0008 |
Maximum [Member] | |
Expected volatility | 1563.40% |
Expected term | 4 years 10 months 20 days |
Risk free interest rate | 0.37% |
Common Stock Price | $ .03 |
Exercise price | $ 0.03 |
LONG TERM DEBT (Details)
LONG TERM DEBT (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Equipment lease | $ 1,952 | |
Equipment loan | 115,614 | 115,614 |
Line of credit | 102,329 | 96,664 |
Other loan term loans | 61,588 | 93,657 |
Total long-term debt | $ 279,531 | $ 307,887 |
COMMON STOCK (Details Narrative
COMMON STOCK (Details Narrative) - shares | Apr. 22, 2019 | Sep. 30, 2020 | Dec. 31, 2019 |
Equity [Abstract] | |||
Reverse Stock Split | On April 22, 2019, the Company approved the authorization of a 1 for 3,000 reverse stock split of the Company’s outstanding shares of common stock. The Company’s financial statements have been retroactively adjusted for this stock split for all periods presented. | ||
Common stock, authorized | 10,000,000,000 | 5,000,000,000 | |
Common stock, outstanding | 1,874,269,389 | 10,343,330 | |
Common stock, issued | 1,874,269,389 | 10,343,330 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Operating loss carry-forwards | $ 3,509,865 | $ 3,509,865 | ||
Income tax rate | 21.00% | |||
Expected tax recovery | $ 737,072 | |||
Change in valuation allowance | (737,072) | |||
Income Tax provision | $ 6,800 | $ 6,800 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | Jan. 02, 2018USD ($)ft² |
Notes to Financial Statements | |
Lease Area | ft² | 8,000 |
Property Description | Wolf Creek Industrial Building at 110 Spring Hill Dr. #10 Grass Valley, CA 95945 |
Lease Term | 10 years |
Monthly Rent | $ | $ 4,861 |