Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 13, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Current Fiscal Year End Date | --12-31 | |
Entity Registrant Name | Rocky Mountain High Brands, Inc. | |
Entity Central Index Key | 0001670869 | |
Entity Incorporation, State or Country Code | NV | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Common Stock, Shares Outstanding | 133,811,183 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash | $ 68,811 | $ 613,686 |
Accounts Receivable, net of allowance of $0 and $5,275, respectively | 326,470 | 17,324 |
Inventory | 278,212 | 146,722 |
Prepaid Expenses and Other Current Assets | 398,441 | 388,074 |
TOTAL CURRENT ASSETS | 1,071,934 | 1,165,806 |
Property and Equipment, net | 22,705 | 34,280 |
Intangible Assets | 15,610 | 148,647 |
Other Assets | 20,503 | 26,245 |
TOTAL ASSETS | 1,130,752 | 1,374,978 |
CURRENT LIABILITIES | ||
Accounts Payable and Accrued Liabilities | 693,022 | 505,214 |
Convertible Notes Payable, net of debt discount | 651,775 | 666,596 |
Notes Payable | 30,000 | 37,493 |
Accrued Interest | 65,405 | 25,758 |
Deferred Revenue | 466,300 | 466,300 |
Derivative Liability | 263,530 | 376,172 |
TOTAL CURRENT LIABILITIES | 2,170,032 | 2,077,533 |
SHAREHOLDERS' DEFICIT | (1,039,280) | (702,555) |
Preferred Stock - Series A - Par Value of $.001; 1,000,000 shares designated; No shares issued and outstanding as of September 30, 2019 and December 31, 2018 | ||
Preferred Stock - Series B - Par Value of $.001; 7,000,000 shares designated; No shares issued and outstanding as of September 30, 2019 and December 31, 2018 | ||
Preferred Stock - Series C - Par Value of $.001; 2,000,000 shares designated; No shares issued and outstanding as of September 30, 2019 and December 31, 2018 | ||
Preferred Stock - Series D - Par Value of $.001; 2,000,000 shares designated; No shares issued and outstanding as of September 30, 2019 and December 31, 2018 | ||
Preferred Stock - Series E - Par Value of $.001; 789,474 shares designated; No shares issued and outstanding as of September 30, 2019 and December 31, 2018 | ||
Common Stock - Par Value of $.001; 200,000,000 shares authorized; 126,162,146 shares issued and outstanding as of September 30, 2019; 94,580,869 shares issued and outstanding as of December 31, 2018 | 126,162 | 94,581 |
Additional Paid-In Capital | 36,703,086 | 34,221,215 |
Accumulated Deficit | (37,867,494) | (35,018,351) |
Total Rocky Mountain High Brands Shareholders' Deficit | (1,038,246) | (702,555) |
Noncontrolling Interests | (1,034) | |
TOTAL SHAREHOLDERS' DEFICIT | (1,039,280) | (702,555) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 1,130,752 | $ 1,374,978 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) | Sep. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares |
Stock Transactions, Parenthetical Disclosures [Abstract] | ||
Preferred Stock Series A Par value | $ / shares | $ 0.001 | $ 0.001 |
Preferred Stock Series A shares designated | 1,000,000 | 1,000,000 |
Preferred Stock Series A, shares issued | 0 | 0 |
Preferred Stock Series A, shares outstanding | 0 | 0 |
Preferred Stock Series B Par value | $ / shares | $ 0.001 | $ 0.001 |
Preferred Stock Series B shares designated | 7,000,000 | 5,000,000 |
Preferred Stock Series B shares outstanding | 0 | 0 |
Preferred Stock Series C Par value | $ / shares | $ 0.001 | $ 0.001 |
Preferred Stock Series C shares designated | 2,000,000 | 2,000,000 |
Preferred Stock Series C shares issued | 0 | 0 |
Preferred Stock Series C shares outstanding | 0 | 0 |
Preferred Stock Series D shares designated | 2,000,000 | 2,000,000 |
Preferred Stock Series D Par value | 0.001 | 0.001 |
Preferred Stock Series D shares outstanding | 0 | 0 |
Preferred Stock Series E shares designated | 789,474 | 789,474 |
Preferred Stock Series E Par value | 0.10% | 0.10% |
Preferred Stock Series E shares outstanding | 0 | 0 |
Common Stock, par value | $ / shares | $ 0.001 | $ 0.001 |
Common Stock, shares designated | 200,000,000 | 200,000,000 |
Common Stock, shares issued | 126,162,146 | 94,580,869 |
Common Stock, shares outstanding | 126,162,146 | 94,580,869 |
Accounts Receivable, net allowance of | $ | $ 0 | $ 5,275 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Sales | $ 353,863 | $ 117,117 | $ 466,864 | $ 240,701 |
Cost of Sales | 352,517 | 110,940 | 467,101 | 275,730 |
Inventory Obsolescence | 107,594 | 13,721 | 107,594 | 25,145 |
Gross Loss | (106,248) | (7,544) | (107,831) | (60,174) |
Operating Expenses | ||||
General and Administrative | 617,378 | 823,173 | 2,270,864 | 2,813,479 |
Advertising and Marketing | 101,225 | 340,666 | 469,600 | 621,783 |
Impairment Expense | 118,066 | 118,066 | ||
Total Operating Expenses | 836,669 | 1,163,839 | 2,858,530 | 3,435,262 |
Loss from Operations | (942,917) | (1,171,383) | (2,966,361) | (3,495,436) |
Other (Income)/Expenses: | ||||
Interest Expense | 296,692 | 580,904 | 929,446 | 3,763,602 |
(Gain) Loss on Extinguishment of Debt | (689,991) | 191,138 | ||
Gain on Lawsuit Judgment and Legal Settlement | 688,724 | 230,840 | 688,724 | |
Gain on Change in Fair Value of Derivative Liability | (319,367) | (71,591) | (124,304) | (2,059,621) |
Total Other (Income) Expenses | (22,675) | (179,411) | (115,689) | 1,206,395 |
Loss Before Income Tax Provision | (920,242) | (991,972) | (2,850,672) | (4,701,831) |
Income Tax Provision | ||||
Net Loss | (920,242) | (991,972) | (2,850,672) | (4,701,831) |
Net Loss Attributable to Noncontrolling Interests | (1,529) | (1,529) | ||
Net Loss Attributable to Rocky Mountain High Brands | $ (918,713) | $ (991,972) | $ (2,849,143) | $ (4,701,831) |
Net Loss per Common Share - Basic and Diluted | $ (0.01) | $ (0.01) | $ (0.03) | $ (0.06) |
Weighted Average Shares Outstanding | 121,033,557 | 81,798,422 | 109,033,820 | 74,150,686 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating Activities: | ||
Net Loss | $ (2,850,672) | $ (4,701,831) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | $ 146,017 | $ 390,758 |
Stock-based payments to vendors | 67,750 | |
Warrants and options issued for services rendered | $ 91,982 | |
Non-cash interest expense | 919,013 | 3,638,816 |
Fees and penalties on debt | 120,251 | |
Noncash portion of gain on lawsuit judgment and legal settlement | 30,840 | 688,724 |
(Gain) Loss on change in fair value of derivative liability | (124,304) | (2,059,621) |
(Gain) Loss on extinguishment of debt | (689,991) | 191,138 |
Bad debt expense | 1,678 | 1,188 |
Depreciation and amortization expense | 30,436 | 19,701 |
Impairment of goodwill and other intangibles | 118,066 | |
Inventory obsolescence | 107,594 | 25,145 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (310,824) | (39,722) |
Inventory | (239,084) | (54,458) |
Prepaid expenses and other current assets | (116,211) | (39,878) |
Other assets | (1,852) | (4,232) |
Accounts payable and accrued liabilities | 189,337 | (60,428) |
NET CASH USED IN OPERATING ACTIVITIES | (2,847,933) | (3,102,165) |
Investing Activities: | ||
Investments in other assets | (500) | (31,220) |
Acquisition of property and equipment | (13,008) | |
NET CASH USED IN INVESTING ACTIVITIES | (500) | (44,228) |
Financing Activities: | ||
Proceeds from issuance of convertible notes | 367,500 | 825,000 |
Repayment of convertible notes | (172,932) | |
Repayment of notes payable | (7,493) | (10,206) |
Proceeds from issuance of common stock | 1,943,551 | 2,558,045 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 2,303,558 | 3,199,907 |
INCREASE (DECREASE) IN CASH | (544,875) | 53,514 |
CASH - BEGINNING OF PERIOD | 613,686 | 16,983 |
CASH - END OF PERIOD | 68,811 | 70,497 |
Supplemental cash flow information: | ||
Cash paid for interest | 10,433 | 10,567 |
Cash paid for taxes | ||
Supplemental disclosure of non-cash financing and investing activities: | ||
Common stock issued for conversion of debt | $ 188,870 | $ 4,000,604 |
Common stock issued for acquisition | 75,000 | |
Debt and accrued interest converted for common stock | $ 271,189 | $ 499,053 |
Derivative liability relieved upon conversion of related debt | 3,021,935 | |
Beneficial conversion feature recognized as debt discount | $ 367,500 | $ 4,000,230 |
Consolidated Shareholders Equit
Consolidated Shareholders Equity (Unaudited) - USD ($) | Common Stock | Preferred Stock A | Preferred Stock C | Preferred Stock E | Additional Paid-In Capital | Accumulated Deficit | Total RMBH Shareholders' Deficit | Noncontrolling Interest | Total |
Balances at Dec. 31, 2017 | 57,985,323 | 1,000,000 | |||||||
Amount Balance at Dec. 31, 2017 | $ 57,985 | $ 1,000 | $ 24,561,530 | $ (31,662,414) | $ (7,041,899) | $ (4,041,899) | |||
Shares issued upon conversion of convertible notes, shares | 8,440,262 | ||||||||
Shares issued upon Conversion of convertible notes, amount | $ 8,440 | 3,363,554 | 3,371,994 | 3,371,994 | |||||
Beneficial conversion feature of convertible notes | $ 3,328,740 | $ 3,328,740 | $ 3,328,740 | ||||||
Shares issued for cash, shares | $ 6,757,451 | ||||||||
Shares issued for cash, amount | 6,757 | 1,463,243 | 1,470,001 | 1,470,001 | |||||
Shares issued for compensation | 1,984,690 | ||||||||
amount issued for compensation | $ 1,985 | $ 154,280 | $ 156,265 | $ 156,265 | |||||
Shares issued to vendors for services rendered, shares | 296,271 | ||||||||
Shares issued to vendors for services rendered, amount | $ 296 | 61,204 | 61,500 | 61,500 | |||||
Net Income (Loss) | (2,332,064) | (2,332,064) | (2,332,064) | ||||||
Balances at Mar. 31, 2018 | 75,463,997 | 1,000,000 | |||||||
Amount Balance at Mar. 31, 2018 | $ 75,464 | $ 1,000 | 32,932,550 | (33,994,478) | (985,464) | (985,464) | |||
Balances at Dec. 31, 2017 | 57,985,323 | 1,000,000 | |||||||
Amount Balance at Dec. 31, 2017 | $ 57,985 | $ 1,000 | 24,561,530 | (31,662,414) | (7,041,899) | $ (4,041,899) | |||
Shares Issued for Aquisitions | 75,000 | ||||||||
Balances at Sep. 30, 2018 | 85,448,133 | 1,000,000 | |||||||
Amount Balance at Sep. 30, 2018 | $ 85,448 | $ 1,000 | 35,513,142 | (36,364,245) | (764,655) | $ (764,655) | |||
Balances at Mar. 31, 2018 | 75,463,997 | 1,000,000 | |||||||
Amount Balance at Mar. 31, 2018 | $ 75,464 | $ 1,000 | 32,932,550 | (33,994,478) | (985,464) | (985,464) | |||
Shares issued upon conversion of convertible notes, shares | 467,742 | ||||||||
Shares issued upon Conversion of convertible notes, amount | $ 468 | $ 116,719 | $ 117,187 | $ 117,187 | |||||
Shares issued for cash, shares | $ 5,453,434 | ||||||||
Shares issued for cash, amount | 5,453 | 1,039,108 | 1,044,561 | 1,044,561 | |||||
Shares issued for compensation | 124,247 | ||||||||
amount issued for compensation | $ 124 | $ 27,104 | $ 27,228 | $ 27,228 | |||||
Shares issued to vendors for services rendered, shares | 20,547 | ||||||||
Shares issued to vendors for services rendered, amount | $ 21 | $ 3,729 | $ 3,750 | $ 3,750 | |||||
Options issued for compensation, amount | 44,476 | 44,476 | 44,476 | ||||||
Net Income (Loss) | $ (1,377,795) | $ (1,377,795) | $ (1,377,795) | ||||||
Balances at Jun. 30, 2018 | 81,529,967 | 1,000,000 | |||||||
Amount Balance at Jun. 30, 2018 | $ 81,530 | $ 1,000 | 34,163,686 | (35,372,273) | (1,126,057) | (1,126,057) | |||
Shares Issued for Aquisitions | 373,134 | ||||||||
Amount Shares issued for aquisitions | $ 373 | 74,627 | 75,000 | 75,000 | |||||
Shares issued upon conversion of convertible notes, shares | 3,305,360 | ||||||||
Shares issued upon Conversion of convertible notes, amount | $ 3,305 | 508,118 | 511,423 | 511,423 | |||||
Beneficial conversion feature of convertible notes | 671,490 | 671,490 | 671,490 | ||||||
Shares Issued as part of legal settlement | (90,909) | ||||||||
Amount Shares Issued as part of legal settlement | $ (91) | $ (1,727) | $ (1,818) | $ (1,818) | |||||
Shares issued for cash, shares | $ 289,116 | ||||||||
Shares issued for cash, amount | 289 | 43,194 | 43,483 | 43,483 | |||||
Shares issued for compensation | 25,757 | ||||||||
amount issued for compensation | $ 26 | $ 3,764 | $ 3,790 | $ 3,790 | |||||
Shares issued to vendors for services rendered, shares | 15,708 | ||||||||
Shares issued to vendors for services rendered, amount | $ 16 | $ 2,484 | $ 2,500 | $ 2,500 | |||||
Options issued for compensation, amount | 47,506 | 47,506 | 47,506 | ||||||
Net Income (Loss) | $ (991,972) | $ (991,972) | $ (991,972) | ||||||
Balances at Sep. 30, 2018 | 85,448,133 | 1,000,000 | |||||||
Amount Balance at Sep. 30, 2018 | $ 85,448 | $ 1,000 | 35,513,142 | (36,364,245) | (764,655) | (764,655) | |||
Balances at Dec. 31, 2018 | 94,580,869 | ||||||||
Amount Balance at Dec. 31, 2018 | $ 94,581 | 342,212,115 | (35,018,351) | 702,555 | (702,555) | ||||
Shares issued upon conversion of convertible notes, shares | 1,750,000 | ||||||||
Shares issued upon Conversion of convertible notes, amount | $ 1,750 | $ 169,592 | $ 171,342 | $ 171,342 | |||||
Shares issued for cash, shares | $ 7,813,337 | ||||||||
Shares issued for cash, amount | 7,813 | 1,009,233 | 1,017,046 | 1,017,046 | |||||
Shares issued for compensation | 25,403 | ||||||||
amount issued for compensation | $ 25 | $ 3,976 | $ 4,001 | $ 4,001 | |||||
Net Income (Loss) | (1,263,260) | (1,263,260) | 1,263,260 | ||||||
Balances at Mar. 31, 2019 | 104,169,609 | ||||||||
Amount Balance at Mar. 31, 2019 | $ 104,170 | 35,404,015 | (36,281,611) | (773,426) | (773,426) | ||||
Balances at Dec. 31, 2018 | 94,580,869 | ||||||||
Amount Balance at Dec. 31, 2018 | $ 94,581 | 342,212,115 | (35,018,351) | 702,555 | $ (702,555) | ||||
Shares Issued for Aquisitions | |||||||||
Shares issued upon conversion of convertible notes, shares | 4,065,980 | ||||||||
Shares issued for cash, shares | $ 27,486,424 | ||||||||
Shares issued for compensation | 25,403 | ||||||||
Fractional shares issued as a result of the reverse split, shares | 3,470 | ||||||||
Stock option forfeiture | 1,000,000 | ||||||||
Balances at Sep. 30, 2019 | 126,162,146 | ||||||||
Amount Balance at Sep. 30, 2019 | $ 126,162 | 36,703,086 | (37,867,494) | (1,038,246) | (1,034) | $ (1,039,280) | |||
Balances at Mar. 31, 2019 | 104,169,609 | ||||||||
Amount Balance at Mar. 31, 2019 | $ 104,170 | $ 35,404,015 | $ (36,281,611) | $ (773,426) | $ (773,426) | ||||
Shares issued upon conversion of convertible notes, shares | 2,315,980 | 2,316 | 15,213 | 17,529 | 17,529 | ||||
Beneficial conversion feature of convertible notes | $ 367,500 | $ 367,500 | $ 367,500 | ||||||
Shares issued for cash, shares | $ 2,490,932 | ||||||||
Shares issued for cash, amount | 2,491 | 119,636 | 122,127 | 122,127 | |||||
Fractional shares issued as a result of the reverse split, shares | 3,470 | ||||||||
Fractional shares issued as a result of the reverse split, amount | $ 3 | $ (3) | |||||||
Stock option forfeiture | 7,530 | 7,530 | 7,530 | ||||||
Net Income (Loss) | $ (667,170) | $ (667,170) | $ (667,170) | ||||||
Balances at Jun. 30, 2019 | 108,979,991 | ||||||||
Amount Balance at Jun. 30, 2019 | $ 108,980 | $ 35,913,891 | $ (36,948,781) | $ (925,910) | (925,910) | ||||
Shares issued for cash, shares | $ 17,182,155 | $ 17,182,155 | |||||||
Shares issued for cash, amount | 1,782 | 787,195 | 804,377 | 804,377 | |||||
Sweet ally purchase of Sweet Rock, Inc., shares | |||||||||
Sweet ally purchase of Sweet Rock, Inc., amount | $ 495 | $ 495 | |||||||
Warrant forfeiture | 2,000 | 2,000 | 2,000 | ||||||
Net Income (Loss) | $ (918,713) | $ (918,713) | $ (1,529) | $ (920,242) | |||||
Balances at Sep. 30, 2019 | 126,162,146 | ||||||||
Amount Balance at Sep. 30, 2019 | $ 126,162 | $ 36,703,086 | $ (37,867,494) | $ (1,038,246) | $ (1,034) | $ (1,039,280) |
General
General | 9 Months Ended |
Sep. 30, 2019 | |
Business | |
Business | Rocky Mountain High Brands, Inc. (“RMHB” or the “Company”) was incorporated under the laws of the State of Nevada. On July 17, 2014, the Company changed its name from Republic of Texas Brands Incorporated to Totally Hemp Crazy, Inc and on October 23, 2015, the Company changed its name to Rocky Mountain High Brands, Inc. RMHB currently operates through its parent company, four wholly-owned subsidiaries, one majority-owned subsidiary, and one minority-owned subsidiary, which the Company controls. All subsidiaries are consolidated for financial reporting purposes. RMHB is a consumer goods company that specializes in developing, manufacturing, marketing, and distributing high-quality, health conscious, cannabidiol (“CBD”) and hemp- infused products that span various categories including beverage, food, fitness, skin care and more. RMHB also markets a naturally high alkaline spring water as part of our brand portfolio. In March 2018, the Company launched the HEMPd brand with tinctures, gummies, water soluble drops, capsules, lotions, salves, and E-juice liquids. In October 2018, the Company introduced CBD-infused waters in four flavors and plans to introduce additional HEMPd product offerings in the future. HEMPd products are marketed through the Company’s Wellness For Life Colorado, Inc. subsidiary. In November 2018, the Company discontinued sales of its vape-related products. On July 25, 2018 the Company acquired the assets of BFIT Brands, LLC (“BFIT”), an Arizona limited liability company. These assets include the cash, accounts receivable, inventory, FitWhey trademark, recipes and formulas of BFIT’s FitWhey branded water-based protein drinks containing caffeine and a vitamin-B pack. On June 12, 2019 the Company organized Sweet Rock, LLC (“Sweet Rock”), a 51% owned company, with Sweet Ally, Inc. Sweet Rock will manufacture and market CBD-infused chocolates, hard candies, and baked goods for distribution in the United States. RMHB also bottles and distributes its naturally high alkaline spring water under the name Eagle Spirit Spring Water and plans to re-introduce its hemp-infused energy drinks later in 2019 or early 2020. On April 22, 2019 the reverse split of the Company’s Stock, at a ratio of one share for every 20 shares, was effective. All common stock share and per share amounts in this document reflect this reverse split. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Basis of Presentation: | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2019 and the results of operations and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s form 10-K for the year ended December 31, 2018 filed with the SEC on April 15, 2019. Principles of Consolidation The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States. The consolidated financial statements include the accounts of the Company, its wholly-owned and controlled subsidiaries. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of the financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Certain of the Company’s estimates could be affected by external conditions, including those unique to its industry, and general economic conditions. It is possible that these external factors could have an effect on the Company’s estimates that could cause actual results to differ from its estimates. The Company re-evaluates all of its accounting estimates at least quarterly based on these conditions and record adjustments when necessary. Cash The Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. Revenue Recognition The Company follows the guidance of the Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers,” as amended. It records revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the selling price to the customer is fixed or determinable and collectability of the revenue is reasonably assured. The Company has not experienced any significant returns from customers and accordingly, in management’s opinion, no reserve for returns has been provided. Payments received prior to shipment of goods are recorded as deferred revenue. The following table represents sales by sales channel for each of the periods: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Online $ 30,356 $ 96,063 $ 127,667 $ 171,322 Private Label 322,000 — 322,000 — Distributor 66 6,449 381 47,237 Retailer 1,441 14,605 16,816 22,142 Total $ 353,863 $ 117,117 $ 446,864 $ 240,701 All sales for all periods presented were to domestic customers. Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC 606. The Company’s revenues accounted for under ASC 606, generally, do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The sales prices are generally fixed at the point of sale and all consideration from contracts is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration. Accounts Receivable and Allowance for Doubtful Accounts Receivable The Company has a policy of reserving for uncollectible accounts based on the best estimate of the amount of probable credit losses in our existing accounts receivable. We extend credit to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable and perform ongoing credit evaluations of customers and maintain an allowance for potential bad debts if required. It is determined whether an allowance for doubtful accounts is required by evaluating specific accounts where information indicates the customers may have an inability to meet financial obligations. In these cases, we Direct write-offs are taken in the period when we have exhausted our efforts to collect overdue and unpaid receivables or otherwise evaluate other circumstances that indicate the collectability of receivables. Inventories Inventories, which consist only of the Company’s finished products held for resale, are stated at the lower of cost, determined using the first-in, first-out, and net realizable value. Net realizable value is the estimated selling price, in the ordinary course of business, less estimated costs to dispose of the product. If the Company identifies excess, obsolete or unsalable items, its inventories are written down to their realizable value in the period in which the impairment is first identified. Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of sales in the Company’s statements of operations. Fair Value Measurements The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures,” which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short- and long-term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk. ASC 820 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 — quoted prices in active markets for identical assets or liabilities. • Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable. • Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions). The derivative liability, which relates to the conversion feature of convertible debt and common stock warrants and options, is classified as a Level 3 liability, and is the only financial liability measure at fair value on a recurring basis. The change in the Level 3 financial instrument is as follows: Balance, December 31, 2018 $ 376,172 Issued during the nine months ended September 30, 2019 $ 21,192 Exercises/Conversions $ (7,530) Change in fair value recognized in operations $ (126,304) Balance, September 30, 2019 $ 263,530 The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model, using the following assumptions as of September 30, 2019: Estimated Dividends None Expected Volatility 125.2% Risk Free Interest Rate 1.88% Expected term .1 to 3.25 years Property and Equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred. Leases The Company accounts for leases in accordance with Financial Accounting Standards Board (“FASB”) ( Topic 840 Leases Leases (Topic 842) Capitalized Software Direct costs related to software development, including coding, website application development, infrastructure development and graphics development, are capitalized and included in other assets. Amortization is provided for on a straight-line basis over the useful life of the software. Costs related to planning, content development, and operating and maintaining software are expensed as incurred. Impairment of Long-Lived Assets The Company evaluates intangible assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flow and recognizes an impairment loss when the estimated undiscounted future cash flow expected to result from the use of the asset plus the net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When the Company identifies an impairment, it reduces the carrying amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values. In August 2019 the Company recorded a $118,066 impairment on the intangible assets recorded as a result of the BFIT Brands, LLC acquisition in July 2018. No other impairment charges were recorded during the three and nine months ended September 30, 2019 and 2018. Share-based Payments Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values, in accordance with FASB ASC Topic 718. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). The Company had no common stock options or common stock equivalents granted or outstanding for all periods presented. The Company issued restricted stock to consultants and employees for various services. Cost for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is to be measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete. Convertible Instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities.” Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Preferred Stock We apply the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity” when determining the classification and measurement of preferred stock. Preferred shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. We classify conditionally redeemable preferred shares (if any), which includes preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control, as temporary equity. At all other times, we classified our preferred shares in stockholders’ equity. Our preferred shares do not feature any redemption rights within the holders’ control or conditional redemption features not within our control. Accordingly, unless otherwise noted, all issuances of preferred stock are presented as a component of consolidated shareholders’ deficit. Advertising Advertising and marketing expenses are charged to operations as incurred. Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company has no material uncertain tax positions. |
Going Concern
Going Concern | 9 Months Ended |
Sep. 30, 2019 | |
General: | |
General | The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has a shareholders’ deficit of $1,039,280 and an accumulated deficit of $37,867,494 as of September 30, 2019 and has generated operating losses since inception. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate revenues and its ability to continue raising capital. On June 27, 2018, the Company entered into a Securities Purchase Agreement (“SPA”) with GHS Investments, LLC (“GHS”), which provides for GHS to purchase up to $15,000,000 of the Company’s common stock over a 24-month period based on a contractually agreed upon market discount. The SPA replaces the Equity Financing Agreement the Company entered into with GHS on October 12, 2017. On August 8, 2018, the Company filed a registration statement with the Securities and Exchange Commission (“SEC”) to register up to 16,000,000 shares of our common stock to be purchased by GHS under the SPA. The registration statement became effective on October 10, 2018 and the Company sold all the available shares under the SPA. On May 15, 2019, the Company filed a registration statement for 30,000,000 shares to be purchased by GHS. This registration statement became effective on June 18, 2019 and the Company began selling shares in June. Management believes the SPA, along with bridge financing from GHS, will provide sufficient cash flows until cash flows from operations become consistently positive. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory consists of the following: September 30, 2019 December 31, 2018 Finished inventory $ 38,493 $ 84,730 Raw materials and packaging 239,719 61,992 Total $ 278,212 $ 146,722 For the three and nine months ended September 30, 2019 the Company recorded inventory obsolescence expense of $107,594 for each period. This expense primarily represented the write-down of expired FitWhey beverages and ingredients, obsolete FitWhey labels, and other expired ingredients. For the three and nine months ended September 30, 2018 the Company recorded inventory obsolescence expense of $13,721 and $25,145, respectively. The expense primarily represented the write-down of expired hemp-infused beverages and shots. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 9 Months Ended |
Sep. 30, 2019 | |
Going Concern | |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following: September 30, 2019 December 31, 2018 Prepaid officers’ compensation $ 179,041 $ 291,617 Prepaid directors’ compensation — 29,442 Prepaid production 167,400 — Other prepaid expenses and current assets 52,000 67,015 Total $ 398,441 $ 388,074 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant, and Equipment: | |
Property, Plant and Equipment | Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred. |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2019 | |
Acquisition | |
Acquisition | FitWhey Brands Inc. (acquisition of the assets of BFIT Brands, LLC) On July 25, 2018, the Company purchased the assets of BFIT Brands, LLC, an Arizona-based company. The acquired assets include the cash, accounts receivable, inventory, FitWhey trademark, recipes and formulas of BFIT’s FitWhey branded water-based protein drinks containing caffeine and a vitamin-B pack. The Company paid $230,438 including common stock issued to the owners of BFIT of $75,000, forgiveness of a note receivable of $80,000 plus accrued interest of $438, and $75,000 to be paid to the owners of BFIT over time based on 5% of net sales of FitWhey products. No liabilities were assumed by the Company in the transaction. The purchase price of the assets of BFIT Brands, LLC assets was preliminarily allocated as follows: Purchase Price Common stock issued $ 75,000 Note payable and accrued interest forgiven 80,438 Earnout liability 75,000 Total $ 230,438 Allocation Cash $ 15,612 Accounts receivable 5,763 Inventory 76,922 Software 31,000 Formulas 12,500 Trademark 2,500 Goodwill 86,141 Total $ 230,438 In August 2019 management determined the Company would suspend the production of water-based protein and caffeine-infused products until it develops a related hemp or CBD-infused product. As a result, the Company fully impaired the intangible assets related to its purchase of FitWhey. This resulted in an impairment charge of $118,066 for the three and nine months ended September 30, 2019. Because all intangible assets were 100% impaired, it was determined that completion of an outside valuation was no longer necessary. The following represents the unaudited pro forma statement of operations of the Company for the three and nine months ended September 30, 2018 had FitWhey been acquired on January 1, 2018: Three Months Ended Nine Months Ended September 30, 2018 September 30, 2018 Sales $ 121,911 $ 245,495 Cost of Sales 128,590 293,380 Inventory Obsolescence 13,721 25,145 Gross Profit (Loss) (20,400 ) (73,030) Operating Expenses 1,165,093 3,436,516 Loss From Operations (1,185,493 ) (3,509,546) Other (Income) Expenses (179,411 ) 1,206,395 Loss Before Income Tax Provision (1,006,082 ) (4,715,941) Income Tax Provision — — Net Loss $ (1,006,082 ) $ (4,715,941) Net Loss Per Common Share-Basic and Diluted $ (0.01 ) $ (0.06) Weighted Average Shares Outstanding 81,798,422 74,150,686 |
Accounts Payable amd Accrued Li
Accounts Payable amd Accrued Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accounts Payable amd Accrued Liabilities | Accounts payable and accrued liabilities consist of the following: September 30, 2019 December 31, 2018 Accounts payable $ 517,075 $ 308,717 Accrued compensation 30,000 25,500 Other accrued expenses 145,947 170,997 Total $ 693,022 $ 505,214 |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Convertible Notes Payable {1} | |
Convertible Notes Payable | Convertible notes payable consist of the following: Interest Rates Term Conversion Rates September 30, 2019 December 31, 2018 GHS Investments, LLC (fixed conversion) 10% .1 - .5 years $ 0.03 - 0.05 $ 973,750 $ 871,079 LSW Holdings, LLC (variable conversion) 6% — (a) 179,000 179,000 Discount (500,975 ) (383,483) Total $ 651,775 $ 666,596 (a) 50% discount on the average of the 3 lowest closing bid prices during the 10 trading days prior to conversion ($0.045). For the three months ended September 30, 2019 and 2018, interest expense on these notes, including amortization of the discount, was $295,585 and $308,239, respectively. For the nine months ended September 30, 2019 and 2018, interest expense on these notes, including amortization of the discount, was $928,142 and $1,048,765, respectively. All tangible and intangible assets of the Company are pledged as security. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes payable consist of the following: Interest Rate Term September 30, 2019 December 31, 2018 Notes payable 0 % Due $ 30,000 $ 37,493 As of September 30, 2019, notes payable includes two non-interest bearing notes totaling $30,000 that originated prior to the Company’s 2014 bankruptcy proceedings. As of December 31, 2018, notes payable also includes a three-year note executed on September 1, 2016 relating to the purchase of used office furniture and equipment from our landlord. The Company executed the note payable in the amount of $40,122 at an interest rate of 0% and with monthly payments of $1,115. The Company imputed interest on the note and recorded a discounted note balance of $36,634. The office furniture note was repaid in August 2019. For the three months ended September 30, 2019 and 2018, interest expense on the furniture and equipment note was $0 and $559, respectively. For the nine months ended September 30, 2019 and 2018, interest expense on the furniture and equipment note was $197 and $1,779, respectively. |
Deferred Revenue
Deferred Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Deferred Revenue Disclosure | In December 2017, the Company executed a three-year Master Manufacturing Agreement with CBD Alimentos SA de CV (“CBD-Alimentos”), a Mexican food and beverage distributor. Under the agreement (as amended), CBD Alimentos, through its sister company, CBD Life, will be our exclusive distributor in Mexico for all of our CBD-infused energy and functional beverages. In turn, we we |
Shareholders' Deficit
Shareholders' Deficit | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Shareholders' Deficit | Common Stock As of September 30, 2019, the Company has 200,000,000 shares of common stock authorized and 126,162,146 shares issued and outstanding. On April 22, 2019 the Company effected a 1-for-20 reverse stock split. All common share amounts in this report reflect this stock split. During the three months ended September 30, 2019 the Company issued 17,182,155 shares of common stock, all of which were issued for cash. During the nine months ended September 30, 2019 the Company issued 31,581,277 shares of common stock, including 4,065,980 shares for convertible notes payable conversions, 27,486,424 shares for cash, and 25,403 shares for compensation. The remaining 3,470 shares were issued as a result of the Company’s reverse stock split, which was effective on April 22, 2019. Preferred Stock The Company has 20,000,000 shares of preferred stock authorized as of September 30, 2019, of which 12,789,474 are specifically designated to a series of preferred stock and 7,210,526 remain undesignated. Series A Preferred Stock The Company has 1,000,000 shares of Series A Preferred Stock designated, of which none were outstanding as of September 30, 2019 and December 31, 2018. LSW Holdings LLC was the holder of these shares. Lily Li, who was the Company’s Executive Vice President until April 5, 2018, is the Managing Member of LSW and, in that capacity, had the authority to direct voting and investment decisions with regard to its holdings in the Company. On October 26, 2018 these shares were ruled void ab initio Series B Preferred Stock The Company has 7,000,000 shares of Series B Preferred Stock designated, of which none were outstanding as of September 30, 2019 and December 31, 2018. Series C Preferred Stock The Company has 2,000,000 shares of Series C Preferred Stock designated, of which none were outstanding as of September 30, 2019 and December 31, 2018. Series C Preferred Stock is 12% interest bearing, cumulative, exchangeable, non-voting, convertible preferred stock of the Company. Each Series C Preferred share is convertible to 2.5 shares of common stock. Series D Preferred Stock The Company has 2,000,000 shares of Series D Preferred Stock designated, of which none were outstanding as of September 30, 2019 and December 31, 2018. Series D Preferred Stock is a non-voting, non-interest bearing convertible preferred stock. Each Series D preferred share is convertible to 5 shares of common stock. Series E Preferred Stock On September 19, 2017, the Board of Directors approved a new Series E Preferred Stock. Holders of Series E Preferred Stock are entitled to cast 100 votes per share of Series E Preferred Stock on any proposal to increase our authorized capital stock, with no other voting rights. Series E Preferred Stock is convertible to common stock on a 20:1 basis. On the same day, the Board granted our Chairman 789,474 shares of Series E Preferred stock as payment for his deferred compensation. On October 31, 2017, Mr. Welch converted his 789,474 shares of Series E Preferred Stock to 39,474 shares of common stock. As of September 30, 2019 and December 31, 2018 there were no shares outstanding. Warrants During the nine months ended September 30, 2019 the Company granted no common stock warrants and none were exercised. During that period, 25,000 warrants were forfeited. Options During the nine months ended September 30, 2019 the Company granted 500,000 options to purchase common stock with a term of three years and an exercise price of $.06. The options never vested and were forfeited in May 2019. No options were exercised and no others were cancelled during the nine months ended September 30, 2019. |
Noncontrolling Interest
Noncontrolling Interest | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Noncontrolling Interest | In July 2019, the Company invested $500 in Sweet Rock, LLC, a Michigan limited liability company. The Company owns 51% and Sweet Ally, Inc. (“Sweet Ally”) invested $495 and owns 49%. The Company consolidates the financial statements of Sweet Rock and accounts for Sweet Ally’s ownership as a noncontrolling interest. During the three and nine months ended September 30, 2019 Sweet Rock incurred marketing expenses of $3,120. This activity is included in the consolidated financial statements of the Company with corresponding noncontrolling interests. |
Concentrations
Concentrations | 9 Months Ended |
Sep. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
Concentrations | During the three months ended September 30, 2019 the Company’s two largest customers accounted for approximately 91% and less than 1% of sales, respectively. During the three months ended September 30, 2018, the Company’s two largest customers accounted for approximately 12% and 3% of sales, respectively. During the nine months ended September 30, 2019 the Company’s two largest customers accounted for approximately 69% and 3% of sales, respectively. During the nine months ended September 30, 2018, the Company’s two largest customers accounted for approximately 6% and 6% of sales, respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes | |
Income Taxes | The reconciliation of income tax benefit at the U.S. statutory rate of 21% to the Company’s effective rate for the periods presented is Nine Months Ended September 30, 2019 September 30, 2018 U.S. federal statutory rate (21 %) (21%) State income tax, net of federal benefit (0.0 %) (0.0%) Increase in valuation allowance 21 % 21% Income tax provision (benefit) 0.0 % 0.0% The tax effects of temporary differences that give rise to the Company’s net deferred tax liability as of September 30, 2019 and December 31, 2018 are: September 30, 2019 December 31, 2018 Deferred Tax Assets Net Operating Losses $ 4,400,000 $ 3,960,000 Less: Valuation Allowance $ (4,400,000 ) $ (3,960,000) Deferred Tax Assets – Net — — As of September 30, 2019 the Company had approximately $21,000,000 of federal and state net operating loss carryovers (“NOLs”), which begin to expire in 2028. Utilization of the NOLs may be subject to limitation under the Internal Revenue Code Section 382 should there be a greater than 50% ownership change as determined under regulations. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against the entire deferred tax asset relating to NOLs for every period because it is more likely than not that all of the deferred tax asset will not be realized. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of foreign earnings. We have estimated our provision for income taxes in accordance with the Tax Act and guidance available as of the date of this filing but have kept the full valuation allowance. As a result, the Company has recorded no income tax expense during the three and nine months ended September 30, 2019. The Company’s deferred tax assets and liabilities were remeasured to reflect the reduction in the U.S. corporate income tax rate from 34% to 21%, resulting in a deferred tax expense of approximately $2,000,000 in 2017 that is still fully valued against as of June 30, 2019. This expense is attributable to the Company being in a net deferred tax asset position at the time of remeasurement. As the company maintains fully valuation allowance, this amount can be seen on the rate reconciliation as an adjustment to deferred tax asset and corresponding valuation allowance. |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 2019 | |
Commitments | |
Commitments | Office Leases On September 5, 2019 the Company amended its corporate office lease. The amendment extended the lease, which had expired August 31, 2019, through February 29, 2020. Monthly payments are $8,065 plus certain maintenance fees. On January 18, 2018, the RMHC entered into a 12-month office use agreement for office space in Denver, Colorado. Monthly payments are $91. The lease was renewed for another 12 months in January 2019. Monthly payments remained $91. Other Leases The Company rents storage space from various third parties on a month-to-month basis. |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 30, 2019 | |
Commitments | |
Legal Proceedings | Rocky Mountain High Brands, Inc. v Lyonpride Music, LLC, United States District Court Northern District of Texas, 3:18-cv-00045-C, now Lyonpride Music LLC v Rocky Mountain High Brands, Inc., Before the American Arbitration Association, 01-18-0003-1428. The Company filed a suit against Lyonpride Music, LLC (“Lyonpride”) for fraud and for declaratory relief with respect to a contract between the parties. Lyonpride is seeking monetary damages from the Company for breach of contract and the Company is seeking monetary damages against Lyonpride. The case has been referred to binding arbitration as referenced above. The parties are conducting discovery. The arbitration hearing has been rescheduled from November 5, 2019 to January 14, 2020. Dallas County Texas, Case Number DC-17-15441 filed November 8, 2017. Rocky Mountain High Brands, Inc. f/k/a Republic of Texas Brands, Inc. Plaintiff, vs. Jerry Grisaffi, Joe Radcliffe, LSW Holdings, LLC, Lily Li, Epic Group One, LLC, Kenneth Radcliffe, Dennis Radcliffe, Phil Uhrik, Michael Radcliffe, Frank Izzo, Morgan Albright, John Garrison, BB Winks, LLC, Crackerjack Classic, LLC, and Universal Consulting, LLC. The Company sought the return of our Series A Preferred Stock (“Series A”) issued to Jerry Grisaffi (“Grisaffi”), RMHB’s former Chairman of the Board, and common stock issued to certain other defendants or later obtained by certain other defendants for little or no consideration paid to the Company. The Company alleged, among other things, that Grisaffi breached his fiduciary duty to the Company by issuing these Series A shares to himself and common stock to himself and others. RMHB also sought to void the Indemnification and Release Agreement (“Indemnification”) between the Company and Grisaffi that was executed in June 2017. Grisaffi filed a counterclaim against the Company seeking payment for two promissory notes allegedly owed to him, as well as relief under the Indemnification. Those notes have been accounted for in the Company’s consolidated financial statements. Those counterclaim matters had been proactively addressed in the Company’s original suit, seeking to void the Indemnification and the two notes based on, among other things, fraud of Grisaffi. Grisaffi had also filed a derivative suit within the main lawsuit. The Company filed a motion to dismiss the derivative suit and on August 3, 2018 the Trial Court entered an Order Dismissing Derivative Claims, dismissing the derivative suit with prejudice. That Order is final. In June 2018 LSW Holdings, LLC (“LSW”) and Lily Li (“Li”) filed counterclaims against the Company, generally seeking an increase of voting rights of the Series A shares to 60:1, a declaration that the Series A shares were validly issued to Grisaffi, challenging the authorized share increase of the Company, claiming securities fraud by the Company with respect to the Series A Shares purchased from Grisaffi and other common stock allegedly purchased by LSW and Li, as well as fraud, breach of contract and negligent misrepresentation by the Company. LSW seeks $10,000,000 in damages from the Company, for the $3,500,000 which was paid to Grisaffi for the Series A shares and for which LSW claims to be the responsibility of the Company to cover, and the remaining $6,500,000 for money allegedly spent by LSW in “developing a distribution system in China” and other alleged “investments” of Li and LSW in the Company. LSW and Li also sought exemplary damages. On August 30, 2018, the Trial Court entered a final judgment and order in the Company’s favor and against Grisaffi. On August 29, 2018, after a show cause hearing, the Trial Court entered an order sanctioning Grisaffi for his repeated and unexcused refusals to make discovery in the case. As a sanction, the Trial Court struck Grisaffi’s pleadings in the case and, on August 30, 2018, entered a Default Judgment against him. Under the Trial Court’s Default Judgment: 1. The Court entered a monetary judgment against Grisaffi and in favor of the Company in the amount of $3,500,000 for fraud, breach of fiduciary duty, and conversion with respect to the Series A preferred stock. 2. The Court declared that the Employment Agreement with Grisaffi dated April 1, 2013 was void ab initio ab initio a. The 1,000,000 shares of Series A Preferred Stock issued to Grisaffi; b. The Convertible Promissory Note issued to Grisaffi in the principal amount of $184,300 dated April 1, 2016; and c. The Convertible Promissory Note issued to Grisaffi in the principal amount of $200,150 dated June 19, 2017. 3. The Court declared that Grisaffi’s sale of the Series A Preferred Stock to LSW was made with actual intent to hinder, delay, or defraud creditors and was thus a fraudulent transfer under Texas law. 4. The Court declared that the issuance of 500,000 shares of common stock to Li and the 550,000 shares of common stock issued to Epic One Group, LLC were made without lawful consideration, and constituted breaches of fiduciary duty by Grisaffi. 5. The Court declared that an Indemnification was procured through fraud and breach of fiduciary duty and is therefore void and unenforceable. 6. The Court ruled that Grisaffi shall take nothing by his counterclaims in the case. Furthermore, the Court ruled that our continuing claims against the other defendants in the case were to be severed and docketed under a separate cause of action and case number. We have continued to pursue our claims against the other defendants in the below referenced case. The judgment and order entered August 30, 2018 concludes our litigation in district court as against Grisaffi. On September 4, 2018, Mr. Grisaffi filed a Notice of Appeal in the case against him. In The Court Of Appeals For The Fifth District Of Texas Dallas, Texas, Jerry Grisaffi, Appellant v. Rocky Mountain High Brands, Inc, f/k/a Republic of Texas Brands, Inc., Appellee, No. 05-18-01020-CV. Grisaffi has filed an appeal of the Default Judgment, and submitted his brief on or about February 28, 2019. The Company is prepared and filed its brief. Grisaffi did not appeal the Order Dismissing Derivative Claims. Grisaffi only seeks in his appeal to reverse in part the Default Judgment by striking the paragraph awarding monetary damages, leaving the remainder of the Default Judgment intact. Appellate briefs were filed, and the appeal was submitted to oral argument by the parties, with such arguments being heard by the Court of Appeals on November 6, 2019. The parties are awaiting the decision of the Court of Appeals. RMHB is actively engaged in collection efforts on the Grisaffi Default Judgment. Dallas County Texas, Case Number DC-18-13491. Rocky Mountain High Brands, Inc. f/k/a Republic of Texas Brands, Inc. Plaintiff, vs. Joe Radcliffe, LSW Holdings, LLC, Lily Li, Epic Group One, LLC, Kenneth Radcliffe, Dennis Radcliffe, Phil Uhrik, Michael Radcliffe, Frank Izzo, Morgan Albright, John Garrison, BB Winks, LLC, Crackerjack Classic, LLC, and Universal Consulting, LLC. This was the surviving case of the above case, having been severed on September 12, 2018. In this case, on October 26, 2018 the Court granted our Motion For Summary Judgment, per a Summary Judgment Order, against LSW, holding that all Series A Preferred Shares in RMHB, including the shares issued to Grisaffi and later sold by him to LSW evidenced by Stock Certificate N0. 604 issued by RMHB, to LSW Holdings LLC in the amount of 1,000,000 shares, were void ab initio On February 4, 2019, the Court entered its Default Judgment against Li and LSW. In the Default Judgment, the Court ruled as follows: 1. The Employment Agreement with Grisaffi dated April 1, 2013 was void ab initio ab initio 2. The Series A Preferred Shares that RMHB issued to Grisaffi and later sold by Grisaffi to LSW were void ab initio 3. Grisaffi’s issuance and transfer to himself of the 1,000,000 Series A Preferred Shares, and his subsequent transfer of those shares to LSW Holdings, were fraudulent transfers and are voided and set aside; 4. Grisaffi breached his fiduciary duties to RMHB by, among other things: (i), purporting to sell the Series A Preferred Shares to LSW, (ii) causing the issuance of 550,000 shares of common stock to Epic Group One, LLC, and 500,000 shares of common stock to Li for no consideration, and (iii) causing the issuance of 5,684,432 shares to the Radcliffe Group at deeply discounted prices; 5. LSW and Li knowingly participated in Grisaffi’s breaches of fiduciary duty and are therefore jointly and severally liable for all damages and equitable relief arising from such breaches; 6. The issuance of 10,000,000 shares of common stock to Li was not authorized by the Board of Directors and was both void ab initio 7. RMHB is entitled to recover all damages proximately resulting from the improper issuance of the 10,000,000 shares of common stock to Li; 8. Li did not perform and materially breached her agreement to raise money for RMHB; 9. The 10,000,000 shares of purported common stock issued to Li belongs to RMHB and Li has no further rights or remedies arising out of or related to the 10,000,000 shares; 10. By virtue of their actions described above, Li and LSW have taken advantage of RMHB and have unjustly enriched themselves at Rocky Mountain High Brands’ expense, and RMHB is entitled to full restitution of all its losses and damages; 11. LSW Holdings and Li engaged in a civil conspiracy with Grisaffi to commit the wrongs against RMHB described above, and RMHB is entitled to recover from them actual, consequential, and special damages resulting from such wrongs, including their knowing participation in Grisaffi’s breaches of fiduciary duty, breaches of contract, receipt of fraudulent conveyances, and unjust enrichments. 12. The torts against RMHB committed by LSW Holdings and Li were aggravated by fraud and malice, and RMHB is therefore entitled to exemplary damages. 13. LSW Holdings and Li shall take nothing by their counterclaims; and 14. RMHB is entitled to court costs and reasonable attorneys’ fees from LSW Holdings and Li. On August 12, 2019, the Court entered its Final Judgment in the Case. Prior to that, on June 25, 2019, the Court had entered an Agreed Order of Dismissal With Prejudice Of Certain Claims And Parties, after the Court was advised that claims dismissed by the order had been settled and released between RMHB and Joe Radcliffe, Kenneth Radcliffe, Dennis Radcliffe, Crackerjack Classic, LLC and Universal Consulting, LLC and joined by Epic One Group, LLC. The Final Judgment was entered against Lily Li and LSW Holdings, LLC. The Court incorporated the rulings of the February 4, 2019 Default Judgment into this Final Judgment, together with an award that RMHB have and recover, of and from, Lily Li and LSW Holdings, jointly and severally with Jerry Grisaffi, actual damages of $3.5 million for their knowing participation of Grisaffi’s breaches of fiduciary duties, breach of contract, fraudulent conveyances and unjust enrichment. The Court also awarded RMHB $88,000 in attorney fees, and the additional $10,000 in accordance with the previous Sanctions Order. LSW Holdings and Lily Li filed a Motion for New Trial, which was overruled by operation of law, and failed to timely file a Notice of Appeal. RMHB will begin its collection efforts against LSW Holdings and Lily Li on the Final Judgment. Rocky Mountain High Brands, Inc. v La Dolce Vita Trust and Christine Guthrie, In Her Capacity As Trustee, In The 382nd District Court of Rockwall County, Texas, Cause No. 1-18-1608. This is a case whereby the Company is attempting to collect on the Default Judgment obtained against Grisaffi. More specifically the Company is requesting the Court to order the La Dolce Vita Trust to turnover fraudulently transferred assets and for additional relief necessary to enforce the Company’s judgment against Grisaffi. This case is currently set for trial for December 16, 2019. Chet – 5 Broadcasting, Inc. v Rocky Mountain High Brands, Inc., Supreme Court of the State of New Your, County of Ulster, Case No. 18-4416. The Plaintiff sued the Company, seeking $21,000 in damages for breach of contract. The Company is contesting that claim in its entirety and has filed a counterclaim against the Plaintiff for an unspecified amount of damages. This case is new and the parties have not yet conducted any discovery. |
Other (Income)_Expenses
Other (Income)/Expenses | 9 Months Ended |
Sep. 30, 2019 | |
Other (Income)/Expenses: | |
Other (Income)/Expenses | Gain/Loss on Extinguishment of Debt On May 6, 2019 the Company recorded a gain on the extinguishment of debt of $689,991 related to the amendment of convertible debt. The conversion ratio on all of the Company’s fixed convertible notes payable outstanding as of that date (principal amount of $909,000) was changed from $.005 to $.05 and the due dates were extended. Gain on Lawsuit Judgment and Legal Settlement On May 30, 2019 the Company recorded a gain on l |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events | |
Subsequent Events. | Between October 1, 2019 and November 13, 2019 the Company issued 7,649,037 shares of common stock, all of which were for cash. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Significant Accounting Policies (Policies): | |
Basis of presentation | The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2019 and the results of operations and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s form 10-K for the year ended December 31, 2018 filed with the SEC on April 15, 2019. |
Principles of consolidation | The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States. The consolidated financial statements include the accounts of the Company, its wholly-owned and controlled subsidiaries. All intercompany balances and transactions have been eliminated. |
Use of Estimates | The preparation of the financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Certain of the Company’s estimates could be affected by external conditions, including those unique to its industry, and general economic conditions. It is possible that these external factors could have an effect on the Company’s estimates that could cause actual results to differ from its estimates. The Company re-evaluates all of its accounting estimates at least quarterly based on these conditions and record adjustments when necessary. |
Cash | The Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. |
Revenue recognition | The Company follows the guidance of the Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers,” as amended. It records revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the selling price to the customer is fixed or determinable and collectability of the revenue is reasonably assured. The Company has not experienced any significant returns from customers and accordingly, in management’s opinion, no reserve for returns has been provided. Payments received prior to shipment of goods are recorded as deferred revenue. The following table represents sales by sales channel for each of the periods: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Online $ 30,356 $ 96,063 $ 127,667 $ 171,322 Private Label 322,000 — 322,000 — Distributor 66 6,449 381 47,237 Retailer 1,441 14,605 16,816 22,142 Total $ 353,863 $ 117,117 $ 446,864 $ 240,701 All sales for all periods presented were to domestic customers. Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC 606. The Company’s revenues accounted for under ASC 606, generally, do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The sales prices are generally fixed at the point of sale and all consideration from contracts is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration. |
Accounts Receivable and Allowance for Doubtful Accounts Receivable | The Company has a policy of reserving for uncollectible accounts based on the best estimate of the amount of probable credit losses in our existing accounts receivable. We extend credit to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable and perform ongoing credit evaluations of customers and maintain an allowance for potential bad debts if required. It is determined whether an allowance for doubtful accounts is required by evaluating specific accounts where information indicates the customers may have an inability to meet financial obligations. In these cases, we Direct write-offs are taken in the period when we have exhausted our efforts to collect overdue and unpaid receivables or otherwise evaluate other circumstances that indicate the collectability of receivables. |
Inventories | Inventories, which consist only of the Company’s finished products held for resale, are stated at the lower of cost, determined using the first-in, first-out, and net realizable value. Net realizable value is the estimated selling price, in the ordinary course of business, less estimated costs to dispose of the product. If the Company identifies excess, obsolete or unsalable items, its inventories are written down to their realizable value in the period in which the impairment is first identified. Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of sales in the Company’s statements of operations. |
Fair Value Measurements | The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures,” which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short- and long-term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk. ASC 820 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 — quoted prices in active markets for identical assets or liabilities. • Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable. • Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions). The derivative liability, which relates to the conversion feature of convertible debt and common stock warrants and options, is classified as a Level 3 liability, and is the only financial liability measure at fair value on a recurring basis. The change in the Level 3 financial instrument is as follows: Balance, December 31, 2018 $ 376,172 Issued during the nine months ended September 30, 2019 $ 21,192 Exercises/Conversions $ (7,530) Change in fair value recognized in operations $ (126,304) Balance, September 30, 2019 $ 263,530 The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model, using the following assumptions as of September 30, 2019: Estimated Dividends None Expected Volatility 125.2% Risk Free Interest Rate 1.88% Expected term .1 to 3.25 years |
Property and equipment | Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred. |
Leases | The Company accounts for leases in accordance with Financial Accounting Standards Board (“FASB”) ( Topic 840 Leases Leases (Topic 842) |
Capitalized software | Direct costs related to software development, including coding, website application development, infrastructure development and graphics development, are capitalized and included in other assets. Amortization is provided for on a straight-line basis over the useful life of the software. Costs related to planning, content development, and operating and maintaining software are expensed as incurred. |
Impairment of Long-Lived Assets | The Company evaluates intangible assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flow and recognizes an impairment loss when the estimated undiscounted future cash flow expected to result from the use of the asset plus the net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When the Company identifies an impairment, it reduces the carrying amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values. In August 2019 the Company recorded a $118,066 impairment on the intangible assets recorded as a result of the BFIT Brands, LLC acquisition in July 2018. No other impairment charges were recorded during the three and nine months ended September 30, 2019 and 2018. |
Share-based Payments | Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values, in accordance with FASB ASC Topic 718. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). The Company had no common stock options or common stock equivalents granted or outstanding for all periods presented. The Company issued restricted stock to consultants and employees for various services. Cost for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is to be measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete. |
Convertible Instruments | The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities.” Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. |
Preferred Stock | We apply the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity” when determining the classification and measurement of preferred stock. Preferred shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. We classify conditionally redeemable preferred shares (if any), which includes preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control, as temporary equity. At all other times, we classified our preferred shares in stockholders’ equity. Our preferred shares do not feature any redemption rights within the holders’ control or conditional redemption features not within our control. Accordingly, unless otherwise noted, all issuances of preferred stock are presented as a component of consolidated shareholders’ deficit. |
Advertising | Advertising and marketing expenses are charged to operations as incurred. |
Income Taxes | The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company has no material uncertain tax positions. |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
change in level 3 | Balance, December 31, 2018 $ 376,172 Issued during the nine months ended September 30, 2019 $ 21,192 Exercises/Conversions $ (7,530) Change in fair value recognized in operations $ (126,304) Balance, September 30, 2019 $ 263,530 |
The estimated fair value of the derivative instruments | Estimated Dividends None Expected Volatility 125.2% Risk Free Interest Rate 1.88% Expected term .1 to 3.25 years |
Sales by sales channel | Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Online $ 30,356 $ 96,063 $ 127,667 $ 171,322 Private Label 322,000 — 322,000 — Distributor 66 6,449 381 47,237 Retailer 1,441 14,605 16,816 22,142 Total $ 353,863 $ 117,117 $ 446,864 $ 240,701 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | September 30, 2019 December 31, 2018 Finished inventory $ 38,493 $ 84,730 Raw materials and packaging 239,719 61,992 Total $ 278,212 $ 146,722 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses | September 30, 2019 December 31, 2018 Prepaid officers’ compensation $ 179,041 $ 291,617 Prepaid directors’ compensation — 29,442 Prepaid production 167,400 — Other prepaid expenses and current assets 52,000 67,015 Total $ 398,441 $ 388,074 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Notes to Financial Statements | |
Property and equipment | September 30, 2019 December 31, 2018 Vehicles $ 29,598 $ 29,598 Furniture and equipment 45,322 41,422 Personal computers 17,901 17,901 92,821 88,921 Less: accumulated depreciation 70,116 54,641 Total $ 22,705 $ 34,280 |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Allocation of assets from acquisition | Purchase Price Common stock issued $ 75,000 Note payable and accrued interest forgiven 80,438 Earnout liability 75,000 Total $ 230,438 Allocation Cash $ 15,612 Accounts receivable 5,763 Inventory 76,922 Software 31,000 Formulas 12,500 Trademark 2,500 Goodwill 86,141 Total $ 230,438 |
Pro Forma Results | Three Months Ended Nine Months Ended September 30, 2018 September 30, 2018 Sales $ 121,911 $ 245,495 Cost of Sales 128,590 293,380 Inventory Obsolescence 13,721 25,145 Gross Profit (Loss) (20,400 ) (73,030) Operating Expenses 1,165,093 3,436,516 Loss From Operations (1,185,493 ) (3,509,546) Other (Income) Expenses (179,411 ) 1,206,395 Loss Before Income Tax Provision (1,006,082 ) (4,715,941) Income Tax Provision — — Net Loss $ (1,006,082 ) $ (4,715,941) Net Loss Per Common Share-Basic and Diluted $ (0.01 ) $ (0.06) Weighted Average Shares Outstanding 81,798,422 74,150,686 |
Accounts Payable amd Accrued _2
Accounts Payable amd Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | September 30, 2019 December 31, 2018 Accounts payable $ 517,075 $ 308,717 Accrued compensation 30,000 25,500 Other accrued expenses 145,947 170,997 Total $ 693,022 $ 505,214 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Convertible Notes Payable | Interest Rates Term Conversion Rates September 30, 2019 December 31, 2018 GHS Investments, LLC (fixed conversion) 10% .1 - .5 years $ 0.03 - 0.05 $ 973,750 $ 871,079 LSW Holdings, LLC (variable conversion) 6% — (a) 179,000 179,000 Discount (500,975 ) (383,483) Total $ 651,775 $ 666,596 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | Interest Rate Term September 30, 2019 December 31, 2018 Notes payable 0 % Due $ 30,000 $ 37,493 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes {3} | |
Schedule of reconciliation of income tax benefit | Nine Months Ended September 30, 2019 September 30, 2018 U.S. federal statutory rate (21 %) (21%) State income tax, net of federal benefit (0.0 %) (0.0%) Increase in valuation allowance 21 % 21% Income tax provision (benefit) 0.0 % 0.0% |
Schedule of Deferred Tax Assets and Liabilities | September 30, 2019 December 31, 2018 Deferred Tax Assets Net Operating Losses $ 4,400,000 $ 3,960,000 Less: Valuation Allowance $ (4,400,000 ) $ (3,960,000) Deferred Tax Assets – Net — — |
General (Details Narrative)
General (Details Narrative) | 1 Months Ended | 9 Months Ended |
Apr. 22, 2019 | Sep. 30, 2019 | |
Accounting Policies [Abstract] | ||
Name Change to Totally Hemp Crazy, Inc | Jul. 17, 2014 | |
Name Change to Rocky Mountain High Brands, Inc. | Oct. 23, 2015 | |
Acquired assets of BFIT Brands LLC | Jul. 25, 2018 | |
Reverse stock split, description | On April 22, 2019 the reverse split of the Company’s Stock, at a ratio of one share for every 20 shares, was effective. All common stock share and per share amounts in this document reflect this reverse split. |
Level 3 Financial Instrument Na
Level 3 Financial Instrument Narrative (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Level 3 Financial Instrument Narrative Details | ||
Opening Balance of Financial Instrument | $ 376,172 | |
Stock issued | $ 21,192 | |
Exercises | (7,530) | |
Change in fair value recognized in operations | (126,304) | |
Closing Balance of Finacial Instrument | $ 263,530 |
Estimated Fair Value Of Derivat
Estimated Fair Value Of Derivative Instruments Using Black-Scholes Option Pricing Model (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Jun. 30, 2019 | |
Estimated Fair Value Of Derivative Instruments Using Black-Scholes Option Pricing Model | ||
Estimated Dividends | ||
Expected Volatility | 125.20% | |
Risk Free Interest Rate | 1.88% | |
Expected Term in years Minimum | 1 month 6 days | |
Expected Term in years Maximum | 3 years 3 months |
Revenue From Contracts with Cus
Revenue From Contracts with Customers (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | ||||
Online sales | $ 30,356 | $ 96,063 | $ 127,667 | $ 171,322 |
Private label sales | 322,000 | 322,000 | ||
Distributor sales | $ 66 | $ 6,449 | $ 381 | $ 47,237 |
Retailer sales | 1,441 | 14,605 | 16,816 | 22,142 |
Total sales | $ 353,863 | $ 117,117 | $ 466,864 | $ 240,701 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Details Narrative) | 1 Months Ended |
Aug. 31, 2019USD ($) | |
Basis of Presentation: | |
Impairment of intangible assets | $ 118,066 |
Going Concern (Details)
Going Concern (Details) - USD ($) | Sep. 30, 2019 | May 15, 2019 | Dec. 31, 2018 | Aug. 08, 2018 | Jun. 27, 2018 |
Going Concern Details | |||||
Shareholders deficit | $ (1,039,280) | ||||
Accumulated deficit | $ (37,867,494) | $ (35,018,351) | |||
GHS Investments to purchase in stock | $ 15,000,000 | ||||
Shares registered on registration statement | 30,000,000 | 16,000,000 |
Inventory (Details)
Inventory (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | ||
Finished Inventory | $ 38,493 | $ 84,730 |
Raw Materials and Packaging | 239,719 | 61,992 |
Total Inventory | $ 278,212 | $ 146,722 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | ||||
Inventory obsolescence | $ 107,594 | $ 13,721 | $ 107,594 | $ 25,145 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Notes to Financial Statements | ||
Prepaid Officers Compensation | $ 179,041 | $ 291,617 |
Prepaid Directors Compensation | 29,442 | |
Prepaid production expenses | 167,400 | |
Other prepaid expenses and current assets | 52,000 | 67,015 |
Total prepaid expenses and other current assets | $ 398,441 | $ 388,074 |
Property And Equipment (Details
Property And Equipment (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Property And Equipment Details | ||
Vehicles | $ 29,598 | $ 29,598 |
Furniture and Equipment | 45,322 | 42,422 |
Personal computer book value | 17,901 | 17,901 |
Subtotal | 92,821 | 88,921 |
Less Accumulated Depreciation | 70,116 | 54,641 |
Total | $ 22,705 | $ 34,280 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 3,550 | $ 4,367 | $ 11,554 | $ 16,679 |
Acquisitions - Allocation of BF
Acquisitions - Allocation of BFIT Assets (Details) - USD ($) | 1 Months Ended | ||
Jul. 25, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | |
Common stock issued | $ 126,162 | $ 94,581 | |
Cash allocation | 68,811 | 613,686 | |
Accounts receivable allocation | 326,470 | 17,324 | |
Inventory allocation | $ 278,212 | $ 146,722 | |
BFIT Asset Allocations | |||
Common stock issued | $ 75,000 | ||
Note payable and accrued interest forgiven | 80,438 | ||
Earnout liability | 75,000 | ||
Total purchase price | 230,438 | ||
Cash allocation | 15,612 | ||
Accounts receivable allocation | 5,763 | ||
Inventory allocation | 76,922 | ||
Software | 31,000 | ||
Formulas | 12,500 | ||
Trademark | 2,500 | ||
Goodwill | 86,141 | ||
Total allocations | $ 230,438 |
Acquisitions - Pro Forma Statem
Acquisitions - Pro Forma Statement (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Sales | $ 121,911 | |||
Cost of sales | 128,590 | |||
Inventory obsolescence | $ 107,594 | 13,721 | $ 107,594 | $ 25,145 |
Gross loss | 20,400 | |||
Operating expenses | 1,165,093 | |||
Loss from operations | (1,185,493) | |||
Other (income) expenses | 179,411 | |||
Loss before income tax provision | (1,006,082) | |||
Income tax provision | ||||
Net loss | $ (1,006,082) | |||
Net Income (Loss) per Common Share - Basic and Diluted | $ (0.01) | $ (0.01) | $ (0.03) | $ (0.06) |
Weighted Average Shares Outstanding | 121,033,557 | 81,798,422 | 109,033,820 | 74,150,686 |
Pro Forma Statement of Operations | ||||
Sales | $ 245,495 | |||
Cost of sales | 293,380 | |||
Inventory obsolescence | 25,145 | |||
Gross loss | 73,030 | |||
Operating expenses | 3,436,516 | |||
Loss from operations | (3,509,546) | |||
Other (income) expenses | 1,206,395 | |||
Loss before income tax provision | (4,715,941) | |||
Income tax provision | ||||
Net loss | $ (4,715,941) | |||
Net Income (Loss) per Common Share - Basic and Diluted | $ (0.06) | |||
Weighted Average Shares Outstanding | 74,150,686 |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Aug. 31, 2019 | Jul. 25, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | |
Common Stock Value Issued to BFIT owners | $ 2,500 | $ 3,750 | $ 61,500 | ||
Impairment of intangible assets | $ 118,066 | ||||
Impairment, percent impaired | 10000.00% | ||||
FitWhey Brands, Inc. | |||||
Cash Paid for acquisition | $ 230,438 | ||||
Common Stock Value Issued to BFIT owners | 75,000 | ||||
Forgiveness of debt | 80,000 | ||||
Accrued Interest | 438 | ||||
Due to owners over time | $ 75,000 | ||||
Net sales percentage | 5.00% |
Accounts Payable amd Accrued _3
Accounts Payable amd Accrued Liabilities (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accounts Payable | $ 517,075 | $ 308,717 |
Accrued Compensation | 30,000 | 25,500 |
Other Accrued Expenses | 145,947 | 170,997 |
Total | $ 693,022 | $ 505,214 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Discount | $ 500,975 | $ 383,483 |
Total | 651,775 | 666,596 |
GHS Note Payable | ||
Convertible Notes Payable | $ 973,750 | 871,079 |
Convertible notes of term in years minimum | 1 month 6 days | |
Convertible notes of term in years maximum | 6 months | |
Convertible notes interest rate | 10.00% | |
Conversion rate minimum | 3.00% | |
Conversion rate maximum | 5.00% | |
LSW Note Payable | ||
Convertible Notes Payable | $ 179,000 | $ 179,000 |
Convertible notes interest rate | 6.00% |
Convertible Notes Payable (De_2
Convertible Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Interest expense including amortization of discount | $ 295,585 | $ 308,239 | $ 928,142 | $ 1,048,765 |
LSW Note Payable | ||||
Discount rates | 50.00% | |||
Conversion rate minimum | 4.50% |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | ||
Notes Payable | $ 30,000 | $ 37,493 |
Interest Rate | 0.00% | 0.00% |
Note payable term | 0 days |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Sep. 01, 2016 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 05, 2019 | |
Term of Note Payable | 3 years | |||||
Interest Expense on Notes | $ 0 | $ 559 | $ 197 | $ 1,779 | ||
Amended Office Lease | ||||||
Note Payable | $ 40,122 | |||||
Interest Rate of Note Payable | 0.00% | |||||
Monthly Payament Amount | $ 1,115 | |||||
Discount | $ 36,634 | |||||
Two Non Interest Notes | ||||||
Note Payable | $ 30,000 | $ 30,000 |
Deferred Revenue (Details)
Deferred Revenue (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Deferred revenue | $ 466,300 | $ 466,300 |
CBD Alimentos Manufacturing Agreement | ||
Initial deposit for manufacturing agreement | $ 466,300 |
Common Stock and Preferred Stoc
Common Stock and Preferred Stock (Details) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019USD ($)shares | Jun. 30, 2019shares | Sep. 30, 2019USD ($)shares | |
Common Stock Details | |||
Shares of Common Stock Authorized | 200,000,000 | 200,000,000 | |
Common Stock Outstanding | 126,162,146 | 126,162,146 | |
Reverse stock split ratio | 0.05 | ||
Shares of Common Stock Issued for Convertible Notes | 31,581,277 | ||
Common Stock issued for convertible notes payable conversion | 17,529 | 4,065,980 | |
Common stock issued for compensation | 25,403 | ||
Common stock issued for Cash | $ | $ 17,182,155 | $ 27,486,424 | |
Common stock issued as a result of reverse stock split | 3,470 | ||
Preferred Stock Authorized | 20,000,000 | 20,000,000 | |
Preferred Stock Designated | 12,789,474 | 12,789,474 | |
Undesignated Preferred Shares | 7,210,526 | 7,210,526 |
Series A Preferred Stock (Detai
Series A Preferred Stock (Details Narrative) - shares | Sep. 30, 2019 | Dec. 31, 2018 |
Preferred Stock Series A shares designated | 1,000,000 | 1,000,000 |
Series A Preferred stock outstanding |
Series B Preferred Stock (Detai
Series B Preferred Stock (Details Narrative) - shares | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Notes to Financial Statements | ||
Series B Authorized Stock | 7,000,000 | |
Shares Oustanding Series B | 0 | 0 |
Series C Preferred Stock (Detai
Series C Preferred Stock (Details Narrative) - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Series C Preferred Stock | ||
Series C Preferred Authorized | 2,000,000 | 2,000,000 |
Preferred Stock Series C shares outstanding | 0 | 0 |
Series C Preferred Shares bears interest at a rate per annum | 12.00% | |
Series C conversion | Each Series C Preferred share is convertible to 2.5 shares of common stock |
Series D Preferred Stock (Detai
Series D Preferred Stock (Details Narrative) - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Notes to Financial Statements | ||
Series D Preferred Authorized | 2,000,000 | 2,000,000 |
Shares Oustanding | 0 | 0 |
Series D conversion | Each Series D preferred share is convertible to 5 shares of common stock. |
Series E Preferred Stock (Detai
Series E Preferred Stock (Details Narrative) - $ / shares | 9 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2018 | Oct. 31, 2017 | |
Notes to Financial Statements | |||
Series E Preferred Stock Created | Sep. 19, 2017 | ||
Votes per share entiled to cast | $ 100 | ||
Series E conversion | Series E Preferred Stock is convertible to common stock on a 20:1 basis | ||
Series E Stock Granted to Chairman | 789,474 | ||
Welch Converted Series E | 789,474 | ||
Welch Common stock upon conversion | 39,474 | ||
Shares Outstanding | 0 | 0 |
Warrants and Options (Details)
Warrants and Options (Details) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Notes to Financial Statements | |
Common Stock warrants granted | 0 |
Common Stock warrants exercised | 0 |
Warrants forfeited | 25,000 |
Options granted to purchase Common stock | 500,000 |
Options Term | 3 years |
Exercise Price of Options | $ / shares | $ 0.06 |
Noncontrolling Interest (Detail
Noncontrolling Interest (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended |
Jul. 31, 2019 | Sep. 30, 2019 | |
Rocky Mountain High Brands, Inc. | ||
Investment in Sweet Rock, LLC | $ 500 | |
Ownership in investment, percent | 51.00% | |
Sweet Ally, Inc. | ||
Investment in Sweet Rock, LLC | $ 495 | |
Ownership in investment, percent | 49.00% | |
Sweet Rock, LLC | ||
Marketing expenses | $ 3,120 |
Concentrations (Details)
Concentrations (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Large Customer One | ||||
Major customer sales concentration | 91.00% | 12.00% | 69.00% | 6.00% |
Large Customer Two | ||||
Major customer sales concentration | 1.00% | 3.00% | 3.00% | 6.00% |
Reconciliation of income tax be
Reconciliation of income tax benefit (Details) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Reconciliation of income tax benefit Details | ||
U.S federal statutory rate | (21.00%) | (21.00%) |
State income tax, net of federal benefit | (0.00%) | (0.00%) |
Increase in valuation allowance | 21.00% | 21.00% |
Income tax provision (benefit) | 0.00% | 0.00% |
Net deferred tax liability (Det
Net deferred tax liability (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Net deferred tax liability Details | ||
Net Operating Losses | $ 4,400,000 | $ 3,960,000 |
Less: Valuation Allowance | (4,400,000) | (3,960,000) |
Deferred tax assets - net |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2017 | |
Income Tax | |||
Federal and state net operating loss carryovers | $ 21,000,000 | ||
Deferred tax expense | $ 2,000,000 | $ 2,000,000 | |
Federal corporate tax rate previous | 35.00% | ||
Federal corporate tax rate current | 21.00% | ||
U.S. corporate income tax rate previous | 34.00% | ||
U.S. corporate tax rate current | 21.00% |
Commitments (Details Narrative)
Commitments (Details Narrative) - USD ($) | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 05, 2019 | Jan. 18, 2019 | Jan. 18, 2018 | |
Lease expiration date | Feb. 29, 2020 | |||
Amended Office Lease | ||||
Monthly lease payment | $ 8,065 | |||
Denver Colorado Lease | ||||
Term of Lease | 12 months | 12 months | ||
Monthly lease payment | $ 91 | $ 91 |
Legal Proceedings (Details Narr
Legal Proceedings (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Feb. 04, 2019 | Dec. 31, 2018 | Jun. 19, 2017 | Apr. 01, 2016 | |
Voting Right Increase | 60:1 | ||||||
Damages sought | $ 10,000,000 | ||||||
Paid to Grisaffi | 3,500,000 | ||||||
Money spent by LSW | $ 6,500,000 | ||||||
Judgment against Grisaffi | $ 3,500,000 | ||||||
Attorney fees awarded in judgement | $ 88,000 | ||||||
Additional fees awarded in judgement | $ 10,000 | ||||||
Date Employment Agreement voided by court | Apr. 1, 2013 | ||||||
Preferred Stock Issued Voided | 7,530 | 1,000,000 | |||||
Convertible Promissory Note Voided | $ 200,150 | $ 184,300 | |||||
Plaintiff seeking in damages | $ 21,000 | ||||||
Common stock issued at discount | 126,162,146 | 94,580,869 | |||||
Lily Li | |||||||
Preferred Stock Issued Voided | 10,000,000 | ||||||
Common stock issued at discount | 500,000 | ||||||
Epic One Group | |||||||
Preferred Stock Issued Voided | 550,000 | ||||||
Common stock issued at discount | 550,000 | ||||||
LSW Holdings, LLC | |||||||
Preferred Stock Issued Voided | 1,000,000 | ||||||
Radcliffe Group | |||||||
Common stock issued at discount | 5,684,432 |
Other (Income)_Expenses (Detail
Other (Income)/Expenses (Details Narrative) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Nov. 13, 2019shares | May 30, 2019USD ($)shares | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)$ / shares | Sep. 30, 2018USD ($) | May 06, 2019USD ($) | |
Gain on extinguishment of debt related to amendement of convertible debt | $ (689,991) | $ 191,138 | |||||
Conversion ratio on fixed convertible notes payable | 0.05 | ||||||
Conversion ratio prior to change | $ / shares | $ 0.005 | ||||||
Principal amount of convertible notes payable | $ 909,000 | ||||||
Shares of common stock returned to company in legal settlement | shares | 7,649,037 | ||||||
Gain from legal settlement | $ 688,724 | ||||||
Legal Settlement | |||||||
Cash received from legal settlement | $ 200,000 | ||||||
Forgiveness of debt from legal settlement | $ 30,840 | ||||||
Shares of common stock returned to company in legal settlement | shares | 6,750,000 | ||||||
Former Chairman | |||||||
Gain from legal settlement | 654,289 | ||||||
Former Customer | |||||||
Gain from legal settlement | $ 34,435 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | 1 Months Ended |
Nov. 13, 2019shares | |
Accounting Policies [Abstract] | |
Common Stock Issued for cash | 7,649,037 |