Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Apr. 12, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 000-1802546 | ||
Entity Registrant Name | KONA GOLD BEVERAGE, INC. | ||
Entity Central Index Key | 0001802546 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 825,726,839 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 113,168 | $ 36,223 |
Accounts receivable, net of allowance for doubtful accounts of $3,967 and $5,019, respectively | 0 | 63,593 |
Other receivables | 14,876 | 14,876 |
Inventory | 660,504 | 686,922 |
Other current assets | 5,572 | 2,943 |
Total current assets | 794,120 | 804,557 |
NON-CURRENT ASSETS | ||
Property, plant and equipment, net | 167,872 | 142,406 |
Right-of-use asset, net | 912,993 | 338,304 |
Intangible property, net | 69,488 | 77,663 |
Note receivable, net of allowance $1,500,000 and $0, respectively | ||
Deposit | 6,500 | 6,500 |
Total non-current assets | 1,156,853 | 564,873 |
Total assets | 1,950,973 | 1,369,430 |
CURRENT LIABILITIES | ||
Accounts payable | 208,599 | 23,438 |
Amounts owed to customers | 10,508 | |
Credit card payables | 19,469 | 5,364 |
Current note payable - related party | 12,000 | 12,000 |
Current lease liability | 149,407 | 71,032 |
Convertible debt | 900,000 | |
Derivative liability | 361,152 | |
Accrued compensation | 257,500 | |
Accrued stock compensation | 1,386,497 | 1,386,500 |
Accrued liabilities | 81,624 | 17,312 |
Total current liabilities | 3,386,756 | 1,515,646 |
NON-CURRENT LIABILITIES | ||
Line of credit | 398,470 | 398,470 |
Line of credit - related party | 1,495,151 | 1,092,151 |
Note payable - related party, net of current | 56,000 | 68,000 |
PPP note payable | 95,161 | |
Lease liability, net of current | 763,586 | 286,139 |
Total liabillities | 6,195,124 | 3,360,406 |
COMMITMENTS AND CONTINGENCIES (NOTE 13) | ||
STOCKHOLDERS' DEFICIT | ||
Common Stock, $.00001 par value, 2,500,000,000 authorized, 786,308,041 and 763,967,603, issued and outstanding, respectively | 7,863 | 7,640 |
Additional paid-in capital - warrants | 281,565 | |
Additional paid-in capital | 4,746,447 | 4,155,775 |
Accumulated deficit | (9,280,036) | (6,154,441) |
Total stockholders' deficit | (4,244,151) | (1,990,976) |
Total liabilities and stockholders' deficit | 1,950,973 | 1,369,430 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred Stock, value | 0 | 40 |
Series B Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred Stock, value | 5 | 5 |
Series C Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred Stock, value | 0 | 0 |
Series D Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred Stock, value | 5 | 5 |
S and S Beverage [Member] | ||
CURRENT ASSETS | ||
Cash and cash equivalents | 30,075 | |
Accounts receivable, net of allowance for doubtful accounts of $3,967 and $5,019, respectively | 9,438 | 81,094 |
Inventory | 240,797 | 254,996 |
Total current assets | 250,235 | 366,165 |
NON-CURRENT ASSETS | ||
Property, plant and equipment, net | 12,200 | 13,168 |
Total assets | 262,435 | 379,333 |
CURRENT LIABILITIES | ||
Accounts payable and accrued liabilities | 78,782 | 105,603 |
Outstanding checks | 6,362 | |
Interest payable | 11,915 | |
Due to customers | 19,667 | 47,553 |
Current note payable - related party | 801,761 | 78,760 |
Total current liabilities | 918,487 | 231,916 |
NON-CURRENT LIABILITIES | ||
Note payable - related party, net of current | 200,000 | |
Total liabillities | 918,487 | 431,916 |
STOCKHOLDERS' DEFICIT | ||
Common Stock, $.00001 par value, 2,500,000,000 authorized, 786,308,041 and 763,967,603, issued and outstanding, respectively | 300,500 | 300,500 |
Additional paid-in capital | 437,701 | 412,701 |
Accumulated deficit | (1,394,253) | (765,784) |
Total stockholders' deficit | (656,052) | (52,583) |
Total liabilities and stockholders' deficit | $ 262,435 | $ 379,333 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Allowance for doubtful accounts | $ 3,967 | $ 5,019 |
Allowance for note receivable | $ 1,500,000 | $ 0 |
Preferred Stock, par value | $ 0.00001 | $ 0.00001 |
Preferred Stock, shares issued | 988,140 | 4,988,000 |
Preferred Stock, shares outstanding | 988,140 | 4,988,000 |
Common Stock, par value | $ 0.00001 | $ 0.00001 |
Common Stock, shares authorised | 2,500,000,000 | 900,000,000 |
Common Stock, shares issued | 786,308,041 | 763,967,603 |
Common Stock, shares outstanding | 786,308,041 | 763,967,603 |
Series A Preferred Stock [Member] | ||
Preferred Stock, par value | $ 0.00001 | $ 0.00001 |
Preferred Stock, shares authorised | 4,000,000 | 4,000,000 |
Preferred Stock, shares issued | 0 | 4,000,000 |
Preferred Stock, shares outstanding | 0 | 4,000,000 |
Series B Preferred Stock [Member] | ||
Preferred Stock, par value | $ 0.00001 | $ 0.00001 |
Preferred Stock, shares authorised | 1,200,000 | 1,200,000 |
Preferred Stock, shares issued | 488,000 | 488,000 |
Preferred Stock, shares outstanding | 488,000 | 488,000 |
Series C Preferred Stock [Member] | ||
Preferred Stock, par value | $ 0.00001 | $ 0.00001 |
Preferred Stock, shares authorised | 250 | 3,300,000 |
Preferred Stock, shares issued | 140 | 0 |
Preferred Stock, shares outstanding | 140 | 0 |
Series D Preferred Stock [Member] | ||
Preferred Stock, par value | $ 0.00001 | $ 0.00001 |
Preferred Stock, shares authorised | 500,000 | 500,000 |
Preferred Stock, shares issued | 500,000 | 500,000 |
Preferred Stock, shares outstanding | 500,000 | 500,000 |
S and S Beverage [Member] | ||
Allowance for doubtful accounts | $ 24,280 | $ 0 |
Common Stock, par value | $ 30.05 | $ 30.05 |
Common Stock, shares authorised | 10,000 | 10,000 |
Common Stock, shares issued | 10,000 | 10,000 |
Common Stock, shares outstanding | 10,000 | 10,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
REVENUES, NET OF SALES, RETURNS, AND ALLOWANCES OF $28,707 AND $51,159, RESPECTIVELY | $ 910,227 | $ 1,631,653 |
COST OF REVENUES | 654,177 | 1,314,080 |
Gross profit | 256,050 | 317,573 |
OPERATING EXPENSES | ||
Selling, general and administrative expenses | 2,594,725 | 2,074,448 |
Bad Debt Expense | 20,099 | 1,514,160 |
Income (Loss) from operations | (2,358,774) | (3,271,035) |
Other income / (expense) | ||
Interest expense | (55,837) | (14,986) |
Interest expense related to loan origination fee on convertible note | (60,000) | |
Interest expense related to warrants on convertible note | (281,565) | |
Interest expense on convertible note | (21,557) | |
Loss on derivative | (361,152) | |
EIDL advance | 7,000 | |
Other income | 6,290 | 1,498,352 |
Net Income (Loss) | $ (3,125,595) | $ (1,787,669) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES: | ||
Basic and diluted | 775,469,306 | 710,868,609 |
NET LOSS PER COMMON SHARES: | ||
Basic and diluted | $ 0 | $ 0 |
S and S Beverage [Member] | ||
REVENUES, NET OF SALES, RETURNS, AND ALLOWANCES OF $28,707 AND $51,159, RESPECTIVELY | $ 342,972 | $ 865,261 |
COST OF REVENUES | 339,609 | 618,891 |
Gross profit | 3,363 | 246,370 |
OPERATING EXPENSES | ||
Selling, general and administrative expenses | 606,627 | 1,010,565 |
Income (Loss) from operations | (603,264) | (764,195) |
Other income / (expense) | ||
Interest expense | (11,915) | (10,597) |
Income tax expense, net | (13,290) | |
Net Income (Loss) | $ (628,469) | $ (774,792) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES: | ||
Basic and diluted | 10,000 | 10,000 |
NET LOSS PER COMMON SHARES: | ||
Basic and diluted | $ (62.85) | $ (77.48) |
CONSOLIDATED STATEMENTS OF IN_2
CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Allowence for net of sales | $ 28,707 | $ 51,159 |
STATEMENTS OF STOCKHOLDERS' DEF
STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) | Common Stock | Preferred Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2018 | 541,965,449 | 5,909,000 | |||
Beginning balance, value at Dec. 31, 2018 | $ 5,420 | $ 59 | $ 3,160,748 | $ (4,366,772) | $ (1,200,545) |
Common Stock Issued for Compensation, shares | 5,100,000 | ||||
Common Stock Issued for Compensation, value | $ 51 | 290,049 | (290,100) | ||
Common Stock Issued in Exchange for Trademark, shares | 500,000 | ||||
Common Stock Issued in Exchange for Trademark, value | $ 5 | 59,245 | 59,250 | ||
Common Stock Issued for Sponsorship Agreements, shares | 262,500 | ||||
Common Stock Issued for Sponsorship Agreements, value | $ 3 | 34,387 | (34,388) | ||
Shares of Stock Cancelled, shares | (64,860,346) | (650,000) | |||
Shares of Stock Cancelled, value | $ (649) | $ (7) | (185,846) | (186,502) | |
Common Stock Issued in Exchange for Services, shares | 10,000,000 | ||||
Common Stock Issued in Exchange for Services, value | $ 100 | 799,900 | 800,000 | ||
Preferred Stock Conversion to Common Shares, shares | 271,000,000 | (271,000) | |||
Preferred Stock Conversion to Common Shares, value | $ 2,710 | $ (3) | (2,707) | 0 | |
Net Income (loss) | (1,787,669) | (1,787,669) | |||
Ending balance, shares at Dec. 31, 2019 | 763,967,603 | 4,988,000 | |||
Ending balance, value at Dec. 31, 2019 | $ 7,640 | $ 50 | 4,155,777 | (6,154,441) | (1,990,976) |
Common Stock Issued for Compensation, shares | 10,000,000 | ||||
Common Stock Issued for Compensation, value | $ 100 | 475,900 | (476,002) | ||
Common Stock Issued for Sponsorship Agreements, shares | 85,000 | ||||
Common Stock Issued for Sponsorship Agreements, value | $ 1 | 2,577 | (2,578) | ||
Warrants related to convertible note | 281,565 | 281,565 | |||
Common Stock Conversion to Preferred Stock, shares | (140) | 140 | |||
Common Stock Conversion to Preferred Stock, value | $ 0 | $ 0 | |||
Preferred Stock Conversion to Common Shares, shares | 4,000,000 | (4,000,000) | |||
Preferred Stock Conversion to Common Shares, value | $ 40 | $ (40) | |||
Accrued Common Stock Issues for Compensation, shares | 140 | ||||
Accrued Common Stock Issues for Compensation, value | $ 0 | 2 | 2 | ||
Common Stock Issued for Conversion of Convertible Debt, shares | 8,255,438 | ||||
Common Stock Issued for Conversion of Convertible Debt, value | $ 83 | 112,191 | 112,274 | ||
Net Income (loss) | (3,125,595) | (3,125,595) | |||
Ending balance, shares at Dec. 31, 2020 | 786,308,041 | 988,140 | |||
Ending balance, value at Dec. 31, 2020 | $ 7,863 | $ 10 | $ 5,028,012 | $ (9,280,036) | $ (4,244,151) |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2018 | 10,000 | |||
Beginning balance, value at Dec. 31, 2018 | $ 300,500 | $ 9,008 | $ 309,508 | |
Loan Forgiveness | 412,701 | 412,701 | ||
Net Income (loss) | (774,792) | (774,792) | ||
Ending balance, shares at Dec. 31, 2019 | 10,000 | |||
Ending balance, value at Dec. 31, 2019 | $ 300,500 | 412,701 | (765,784) | (52,583) |
Loan Forgiveness | 25,000 | 25,000 | ||
Net Income (loss) | (628,469) | (628,469) | ||
Ending balance, shares at Dec. 31, 2020 | 10,000 | |||
Ending balance, value at Dec. 31, 2020 | $ 300,500 | $ 437,701 | $ (1,394,253) | $ (656,052) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: | ||
Net loss | $ (3,125,595) | $ (1,787,669) |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation and Amortization | 40,206 | 61,024 |
Common Stock Issued in Exchange for Services | 800,000 | |
Common Stock Issued for Sponsorship | 2,578 | 34,388 |
Common Stock Issued for Compensation | 476,002 | 290,100 |
Interest expense related to warrants on convertible note | 281,565 | |
Changes in operating assets and liabilities: | ||
Decrease (increase) in accounts receivable | 73,581 | (63,543) |
Decrease (increase) in other receivable | (14,876) | |
Decrease (increase) in inventory | 26,418 | (619,405) |
Decrease (increase) in prepaids | 36,134 | |
Decrease (increase) in other current assets | (2,109) | (1,001) |
Decrease (increase) in deposits | (6,500) | |
Decrease (increase) in right-of-use asset | (580,820) | (378,013) |
Increase (decrease) in accounts payable | 185,163 | 42,456 |
Increase (decrease) in credit card payable | 14,105 | 4,126 |
Increase (decrease) in accrued compensation | 257,500 | |
Increase (decrease) in accrued stock compensation | (3) | |
Increase (decrease) in accrued expenses | 64,312 | 15,261 |
Increase (decrease) in derivative liability | 361,152 | |
Increase (decrease) in lease liability | 555,822 | 357,171 |
Net cash provided by (used in) operating activities | (1,370,123) | (1,230,347) |
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (59,541) | (127,687) |
Common Stock Issued for Trademark | 59,250 | |
Changes in intellectual property | 8,175 | (81,750) |
Investment | 1,648 | |
Net cash provided by (used in) investing activities | (51,366) | (148,539) |
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES: | ||
Proceeds from shareholder payable | ||
Changes in note payable - related party | (12,000) | 60,000 |
Changes in line of credit - related party | 403,000 | 1,092,151 |
Changes line of credit | 255,000 | |
Changes in convertible debt | 1,012,274 | |
Changes in PPP note payable | 95,161 | |
Net cash provided by (used in) financing activities | 1,498,435 | 1,407,151 |
Net cash increase for period | 76,945 | 28,265 |
Cash at beginning of period | 36,223 | 7,958 |
Cash at end of period | 113,168 | 36,223 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for income taxes | ||
Cash paid for interest | 35,877 | 5,158 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Shares of Common Stock Returned | 186,500 | |
S and S Beverage [Member] | ||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: | ||
Net loss | (628,469) | (774,792) |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation and Amortization | 968 | 968 |
Changes in operating assets and liabilities: | ||
Decrease (increase) in accounts receivable | 71,656 | (81,094) |
Decrease (increase) in inventory | 14,199 | (74,888) |
Increase (decrease) in accounts payable | (26,821) | 88,338 |
Increase (decrease) in interest payable | 11,915 | |
Increase (decrease) in due to/from customers | (27,886) | 314,083 |
Net cash provided by (used in) operating activities | (584,438) | (486,613) |
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | ||
Net cash provided by (used in) investing activities | ||
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES: | ||
Changes in note payable - related party | 548,001 | 514,752 |
Net cash provided by (used in) financing activities | 548,001 | 514,752 |
Net cash increase for period | (36,437) | 28,139 |
Cash at beginning of period | 30,075 | 1,936 |
Cash at end of period | 30,075 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for income taxes | 13,290 | |
Cash paid for interest | $ 11,915 | $ 10,597 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2020 | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Kona Gold Beverage, Inc., a Delaware corporation (“Kona Gold,” the “Company,” “we,” “us,” or “our”), owns and operates a line of premier CBD lifestyle brand products. As of December 31, 2020, the Company has three wholly-owned subsidiaries: Kona Gold LLC, a Delaware limited liability company (“Kona”), HighDrate LLC, a Florida limited liability company (“HighDrate”), and Gold Leaf Distribution LLC, a Florida limited liability company (“Gold Leaf”). In February 2021, the Company acquired all of the capital stock of S and S Beverage, Inc. (See Note 22 – Subsequent Events The Company currently sells its products through resellers, the Company’s websites, and distributors that span across 27 states. The Company’s products are available in wide variety of stores, including convenience and grocery stores, smoke shops, and gift shops. As used herein, the terms “Kona Gold,” the “Company,” “we,” “us,” or “our, refer to Kona Gold individually or, as the context requires, collectively with its subsidiaries on a consolidated basis. The Company’s Business The Company has two reportable segments: ● Beverages. ● Distribution. Beverage Products The Company’s hemp-infused energy drink is available in both regular and sugar-free options. These energy drinks are infused with organic hemp protein powder and contain essential vitamins and ingredients that give consumers a natural energy boost. Hemp protein contains no gluten and is compatible with a variety of diets, including vegan and Kosher. Our hemp energy drinks are available in eight flavors: classic hemp, platinum hemp, sugar-free hemp, cherry vanilla, bubble gum, candy apple, cotton candy, and pink grapefruit. HighDrate’s CBD-infused energy water is great tasting, sugar-free, and powered by the patented technology of Alkame Holdings Inc.’s wholly-owned subsidiary, Alkame Water Inc. (“Alkame”), which uses its advanced water treatment to create a premium oxygenated alkaline water with natural antioxidants. Alkame believes that, pursuant to a double-blind placebo, peer-backed research project that it conducted, its Level 2 – inputs other than Level 1 that are observable, either directly or indirectly; such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets and liabilities in markets technology can boost the immune system and physical performance. HighDrate’s CBD-infused energy water contains 80 mg of caffeine and 10 mg of CBD. The Company believes that CBD aids the body’s endocannabinoid system in neuroprotection, stress recovery, immune balance, and homeostatic regulation. HighDrate’s CBD-infused energy water is available in six flavors: watermelon, kiwi strawberry, tropical coconut, Georgia peach, sour apple, and blue island punch. The Company’s product “Storm” is a high-alkaline CBD-infused water. This water is also powered by Alkame’s patented technology, which uses its advanced water treatment to create a premium oxygenated alkaline water with natural antioxidants. Storm high-alkaline CBD water contains 20 mg of CBD. The Company also sells branded apparel. The Company uses only high-quality textiles and specialty inks and foils, which provide consumers with a premium fit and feel. The Company currently offers shirts, tanks, hats, and towels for sale. Effects of COVID-19 In January 2020, the World Health Organization (the “WHO”) announced a global health emergency because of a new strain of coronavirus (“COVID-19”) that originated in Wuhan, China and generated significant risks to the international community as the virus spread globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in global exposure. The COVID-19 pandemic is disrupting businesses and affecting production and sales across a range of industries, as well as causing volatility in the financial markets. The extent of the impact of the COVID-19 pandemic on the Company’s consumer demand, sales, and financial performance will depend on certain developments, including, among other things, the duration and spread of the outbreak and the impact on the Company’s consumers and employees, all of which are uncertain and cannot be predicted. Management is actively monitoring this situation and potential impacts on our financial condition, liquidity, and results of operations. |
S and S Beverage [Member] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS S and S Beverage, Inc. (the “Company”), a Wisconsin Corporation, owns and operates a line of superior lemonade products in four distinct flavors under the Lemin brand. The Company is primarily focused on product development in the functional beverage sector. Accounting Standards Codification subtopic Segment Reporting 280-10 (“ASC 280-10”) establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. ASC 280-10 also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. The information disclosed herein materially represents all the financial information related to the Company’s only material principal operating segment. The Company currently sells its products through resellers, the Company website, and distributors that span across the United States. The Company’s products are available in wide variety of stores, including convenience and grocery stores, and gift shops. Effects of COVID-19 In January 2020, the World Health Organization (the “WHO”) announced a global health emergency because of a new strain of coronavirus (“COVID-19”) that originated in Wuhan, China and generated significant risks to the international community as the virus spread globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in global exposure. The COVID-19 pandemic is disrupting businesses and affecting production and sales across a range of industries, as well as causing volatility in the financial markets. The extent of the impact of the COVID-19 pandemic on the Company’s consumer demand, sales, and financial performance will depend on certain developments, including, among other things, the duration and spread of the outbreak and the impact on the Company’s consumers and employees, all of which are uncertain and cannot be predicted. Management is actively monitoring this situation and potential impacts on our financial condition, liquidity, and results of operations. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Basis of Presentation The accompanying consolidated financial statements are unaudited and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. These unaudited consolidated financial statements have been prepared on the accrual basis of accounting and in accordance with generally accepted accounting principles (“GAAP”) in the United States. B. Use of Estimates The preparation of the consolidated financial statements in conformity with 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 date of the financial statements. Estimates also affect the reported amounts of revenue and expenses during the reporting period. Actual events and results could differ from those assumptions and estimates. C. Cash and Cash Equivalents For the purpose of reporting cash flows, the Company considers all unrestricted, highly liquid investments with an initial maturity of three months or less to be cash equivalents. D. Fair Value of Financial Instruments The estimated fair values for financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The carrying amounts of accounts payable, accrued liabilities, and notes payable approximate fair value given their short-term nature or effective interest rates. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted price in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarch is as follows: Level 1 – quoted prices in active markets for identical assets or liabilities; Level 2 – inputs other than Level 1 that are observable, either directly or indirectly; such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets and liabilities in markets that are not active, or inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company analyzes all financial instruments with features of both liabilities and equity under Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity, Derivatives and Hedging The Company uses Level 2 inputs for its valuation methodology for the embedded conversion option liabilities as their fair value were determined by using the Black-Scholes option-pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. E. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at net realizable value. The Company determines provisions for uncollectible accounts, sales returns, and claims based upon factors including the credit risk and activity of specific customers, historical trends, and other information. If the Company becomes aware of a specific distributor’s or reseller’s inability to meet its financial obligations, bad debt charges are recorded based on an overall assessment of past due accounts receivable outstanding. Bad debt attributed to accounts receivable in the year ended December 31, 2020 and 2019 was $32,768 and $14,160, respectively. These amounts are included in selling, general and administrative expenses in the accompanying Consolidated Statements of Loss. Management will review annually to determine provisions and record an allowance as deemed necessary. In the opinion of management, a provision was deemed necessary for uncollectible accounts for Kona and no provision was deemed necessary for Gold Leaf. The balance of allowance for Uncollectible Accounts at December 31, 2020 and 2019 were $3,967 and $5,019, respectively, as reflected in the accompanying Consolidated Balance Sheets. F. Inventories The cost of inventory using the standard cost method, which approximates actual cost based on a first-in, first-out method. The Company’s inventories are valued at the lower cost or net realizable value. The Company’s inventory consists almost entirely of finished and unfinished goods, and freight, which include CBD energy waters, CBD waters, hemp energy drinks, cans for production, and merchandise and apparel. The Company periodically evaluates and adjusts inventories for obsolescence. In the opinion of management, no provision for obsolescence is deemed necessary. The shelf life of all beverage inventory is two years, and at December 31, 2020 and 2019, all inventory was current, as reflected in the accompanying Consolidated Balance Sheets. G. Property, Plant and Equipment Property, plant and equipment are reported on the accompanying Consolidated Balance Sheet at cost less accumulated depreciation. Assets with a useful life greater than one year and cost greater than $100 are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation is provided using the straight-line method over the estimated useful lives of the asset as follows: Estimated Furniture and fixtures 7 Machinery and equipment 7 Vehicles 5 Computer equipment 5 – 7 H. Goodwill and Intangible Assets Goodwill arises from business combinations and is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed. The Company has selected December 31 as the date to perform the annual impairment test. Intangible assets represent both indefinite lived and definite lived assets. Trademarks are deemed to have definite useful lives of ten years, are amortized, and are tested annually for impairment. Intangible assets are reported on the balance sheet at cost less accumulated amortization. The Company has selected December 31 as the date to perform the annual impairment test. Management determined that, for the year ending December 31, 2019, there were no identifiable assets or liabilities; therefore, the implied fair value of goodwill is zero. Based on this assessment, goodwill was impaired by the full carrying amount of $61,000 at December 31, 2019, see Note 4, Goodwill and Intangible Assets Goodwill and Intangible Assets I. Leases On January 1, 2019, the Company adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred. The amortization period for the right-of-use asset is from the lease commencement date to the earlier of the end of the lease term or the end of the useful life of the asset. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate or the risk-free rate with the election of the practical expedient. The Company has elected to use the risk-free rate. J. Revenue and Provision for Sales, Returns, and Allowances The Company sells its products, which primarily includes its hemp energy drinks, CBD energy waters, CBD waters, and logo apparel, to online customers or through resellers and distributors. In evaluating the timing of the transfer of control of products to customers, the Company considers several indicators, including significant risks and rewards of products, the Company’s right to payment, and the legal title of the products. The Company recognizes revenue from product sales to customers, distributors, and resellers when products that do not require further services by the Company are shipped, when there are no uncertainties surrounding customer acceptance, and when collectability is reasonably assured. Sales are made to customers under terms allowing certain limited rights of return. Amounts billed to customers in sales transactions related to shipping and handling, represent revenues earned for the goods provided and are included in net sales. Costs of shipping and handling are included in cost of products sold. The Company also sells its products, and beverages purchased for resale from several other beverage manufacturers to convenience stores, grocery stores, and smoke and gift shops. In evaluating the timing of the transfer of control of products to customers, the Company considers several indicators, including significant risks and rewards of products, the Company’s right to payment, and the legal title of the products. The Company recognizes revenue from product sales to resellers when products that do not require further services by the Company are shipped or delivered, when there are no uncertainties surrounding customer acceptance and when collectability is reasonably assured. Cash received by the Company prior to shipment is recorded as deferred revenue. Sales are made to customers under terms allowing certain limited rights of return. Amounts billed to customers in sales transactions related to shipping and handling, represent revenues earned for the goods provided and are included in net sales. Costs of shipping and handling are included in cost of products sold. On January 1, 2019, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) To apply these principles, ASC Topic 606 outlines a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes: 1. Identifying the contract(s) or agreement(s) with a customer; 2. Identifying the separate performance obligations in the contract or agreement; 3. Determining the transaction price; 4. Allocating the transaction price to the separate performance obligations in the contract or agreement; and 5. Recognizing revenue as each performance obligation is satisfied. Pursuant to ASC Topic 606, the Company recognizes revenue when performance obligations under the terms of a contract are satisfied, which occurs typically upon the transfer of control, including the risks and rewards of ownership. With respect to the Company, performance is deemed to occur upon shipment or delivery of products to its customers based on the written contract terms, which is also when control is transferred. The Company evaluated the guidance in ASC 606-10-50-5 and the related implementation guidance to determine disaggregation of revenues that would be meaningful. The majority of the Company’s revenue earned from its Beverages Segment and its Distribution Segment is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. The Company does not have significant financing component or payment terms, and it does not have any material unsatisfied performance obligations. The Company’s revenues are obtained in similar geographical locations within the United States. Furthermore, the Company’s operations in each of its reporting segments are expected to have essentially the same future prospects, similar gross margins, sales trends, and the nature of its products and customers are essentially the same. The sales from the Company’s beverage product types are organized as one reportable segment, which the Company refers to as the Beverages Segment, and the sales of the Company’s products and products that are purchased from resellers that are distributed by Gold Leaf is organized as its second reportable segment, which the Company refers to as the Distribution Segment. The Company has also determined that disaggregated revenue by net sales by revenue source would be meaningful and allow investors to understand its business activities, historical performance, or future prospects. Disaggregated sales by revenue source, which includes sales to distributors, online sales, sales through Amazon, and Gold Leaf distribution sales, is included in Note 16, Revenue Sales are made to customers under terms allowing certain limited rights of return. The Company records an allowance and return for each quarter for 3% of total sales. The Company recorded sales return, and allowance at the year ending December 31, 2020 and 2019 of approximately $28,707 and $51,159, respectively, which is included in the revenues, net of sales returns and allowances in the accompanying Consolidated Statements of Loss. K. Cost of Revenues Cost of revenues consist primarily of expenses associated with the delivery and distribution of products. These include expenses related to direct procurement costs and shipping and handling costs. The Company bills shipping and handling fees charged to customers as part of sales and the associated expense as part of cost of revenues. The costs are charged to cost of revenues in the same period that the associated revenue is earned. L. Impairment of Long-Lived Assets The Company evaluates its long-lived assets for financial impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company evaluates the recoverability of long-lived assets used in operations by measuring the carrying amount of the assets against their estimated undiscounted future cash flows. If such evaluations indicated that the future undiscounted cash flows of certain long-lived assets are not sufficient to recover the carrying value of such assets, the assets are adjusted to fair values. Management completed an impairment review as of December 31, 2020 and determined long-lived assets were not impaired. M. Income Taxes The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes, The Company has no recorded liabilities for uncertain tax positions as of the accompanying Consolidated Balance Sheets dated December 31, 2020 and 2019, respectively. N. Stock-Based Compensation FASB’s ASC Topic 718, Stock Compensation The Company estimates the fair value of each restricted stock award as of the date of grant using the closing price as reported by the OTC Markets Group Inc. (the “OTCM”) on the date of grant. The fair value determined represents the cost for the award and is recognized over the vesting period during which an employee is required to provide service in exchange for the award. The Company accounts for forfeitures of restricted stock as they occur. O. Advertising Costs The Company expenses costs of advertising and promotions as incurred. The Company includes in advertising costs inventory given away as promotional merchandise or free samples to create sales. Advertising and promotion costs for the years ended December 31, 2020 and 2019, were approximately $32,700 and $125,000, respectively, which amounts were included in selling, general and administrative expenses in the accompanying Consolidated Statements of Loss. P. Concentration of Credit Risk The Company maintains cash balances at financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial institutions and had determined the credit exposure to be negligible. Q. Basic and Diluted Earnings per Share In accordance with FASB’s ASC 260, Earnings per Share Diluted per-share loss is the same as basic per-share loss when there is a loss from continuing operations. R. Segments ASC 280-10, Segment Reporting The Company then applied the management approach to the identification of its two reportable segments – the Beverages Segment, consisting of the operations of Kona and HighDrate, and the Distribution Segment, consisting of the operations of Gold Leaf. Specifically, the Company has evaluated guidance in ASC 280-10 and determined that aggregation is consistent with the objectives of ASC 280-10 in that aggregation into two reportable segments allows users of our financial statements to view the Company’s business through the eyes of management based upon the way management reviews performance and makes decisions. Additional factors that were considered included: whether or not an operating segment has similar economic characteristics, the nature of the products/services under each operating segment, the nature of the production/go-to-market process, the type and geographic location of our customers, and the distribution of our products/services. The Company further determined that its logo merchandise and apparel, which revenue comprises approximately 1% of the Company’s gross annual sales, and solely exists for promotion purposes, could be aggregated with the operations in the Beverages Segment. A description of the Company’s products is contained in Note 1, Organization and Description of Business. Segments. S. Registration Rights Agreement In May 2020, the Company completed a private placement transaction (the “2020 Private Placement”) of three secured convertible debentures (the “2020 Debentures”), convertible for up to 105,947,397 shares (the “2020 Conversion Shares”) of Common Stock and a Warrant to purchase Common Stock (the “2020 Warrant”), exercisable for up to 20,000,000 shares of Common Stock (the “2020 Warrant Shares”), pursuant to that certain Securities Purchase Agreement between an otherwise unaffiliated third-party investor (the “Selling Stockholder”) and the Company, dated as of May 14, 2020 (the “2020 SPA”). The Company sold and issued the initial 2020 Debenture (the “First 2020 Debenture”) and granted the Warrant promptly after entering in the 2020 SPA. The Company sold and issued the second 2020 Debenture (the “Second 2020 Debenture”) promptly after filing the registration statement on Form S-1 (the “2020 Registration Statement”) with the Securities and Exchange Commission (the “SEC”). The Company sold and issued the third 2020 Debenture (the “Third 2020 Debenture”) promptly after the SEC declared the Registration Statement effective. The Company agreed to register the 2020 Conversion Shares and 2020 Warrant Shares pursuant to the terms of the Registration Rights Agreement between the Selling Stockholder and Company, dated as of May 14, 2020 (the “2020 Registration Rights Agreement”). Pursuant to the terms of the Registration Rights Agreement, the Company agreed to file the Registration Statement with the SEC registering for resale the Conversion Shares and the Warrant Shares within 45 calendar days following the closing of the Private Placement. Further, the Company agreed to use its best efforts to have the Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the effectiveness deadline, or by the 5 th th The Company accounts for registration rights agreements in accordance with ASC subtopic 825-20, Registration Payment Arrangements Loss Contingencies T. Recently Issued Accounting Pronouncements The Company has evaluated all recently issued accounting pronouncements, issued or proposed, by the FASB or other standards-setting bodies as of the period ending December 31, 2020. The Company does not expect a material impact on the Company’s financial position, result of operations, or cash flows from these pronouncements. |
S and S Beverage [Member] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Basic of presentation The accompanying consolidated financial statements are unaudited and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. These unaudited consolidated financial statements have been prepared on the accrual basis of accounting and in accordance with generally accepted accounting principles (“GAAP”) in the United States. B. Use of estimates The preparation of the consolidated financial statements in conformity with 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 date of the financial statements. Estimates also affect the reported amounts of revenue and expenses during the reporting period. Actual events and results could differ from those assumptions and estimates. C. Cash and cash equivalents For the purpose of reporting cash flows, the Company considers all unrestricted, highly liquid investments with an initial maturity of three months or less to be cash equivalents. D. Fair value of financial instruments The estimated fair values for financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The carrying amounts of accounts payable, accrued liabilities, and notes payable approximate fair value given their short-term nature or effective interest rates. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted price in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarch is as follows: Leve 1 – quoted prices in active markets for identical assets or liabilities; Level 2 – inputs other than Level 1 that are observable, either directly or indirectly; such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets and liabilities in markets that are not active, or inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. E. Accounts receivable Accounts receivable are recorded at net realizable value. The Company determines provisions for uncollectible accounts, sales returns, and claims based upon factors including the credit risk and activity of specific customers, historical trends, and other information. In the circumstance that the Company becomes aware of a specific customer’s inability to meet its financial obligations, bad debt charges are recorded based on an overall assessment of past due accounts receivable outstanding. No bad debt was recorded in the accompanying statement of income years ending December 31, 2020 and 2019, respectively. Management will review annually to determine provisions and record an allowance as deemed necessary. In the opinion of management, no provision is deemed necessary for sales returns and all accounts were deemed collectible at December 31, 2020 and 2019, respectively. The balance of allowance for Uncollectible Accounts as of December 31, 20120 and 2019 is $24,280 and $0, respectively. F. Inventories The Company’s inventories are valued at the lower cost or net realizable value. The Company’s inventories consist almost entirely of finished goods and freight. We periodically evaluate and adjust inventories for obsolescence. In the opinion of management, no provision for obsolescence is deemed necessary. The shelf life of all beverage inventory is two years, and as of the balance sheet dated December 31, 2020 and December 31, 2019, all inventory is current. G. Property, plant and equipment Property, plant and equipment are reported on the balance sheet at cost less accumulated depreciation. Assets with a useful life greater than one year and cost greater than $100 are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation is provided using the straight-line method over the estimated useful lives of the asset as follows: Estimated Furniture and fixtures 7 Machinery and equipment 7 Vehicles 5 Computer equipment 5 – 7 H. Revenue recognition The Company product sales include Lemin branded lemonade drinks. In evaluating the timing of the transfer of control of products to customers, we consider several indicators, including significant risks and rewards of products, our right to payment, and the legal title of the products. The Company recognizes revenue from product sales to customers, distributors and resellers when products that do not require further services by the Company are shipped, when there are no uncertainties surrounding customer acceptance and when collectability is reasonably assured. Sales are made to customers under terms allowing certain limited rights of return. Amounts billed to customers in sales transactions related to shipping and handling, represent revenues earned for the goods provided and are included in net sales. Costs of shipping and handling are included in cost of products sold. The Company also sells its products, and beverages purchased for resale from several other beverage manufacturers to convenience stores, grocery stores, and smoke and gift shops. In evaluating the timing of the transfer of control of products to customers, the Company considers several indicators, including significant risks and rewards of products, the Company’s right to payment, and the legal title of the products. The Company recognizes revenue from product sales to resellers when products that do not require further services by the Company are shipped or delivered, when there are no uncertainties surrounding customer acceptance and when collectability is reasonably assured. Cash received by the Company prior to shipment is recorded as deferred revenue. Sales are made to customers under terms allowing certain limited rights of return. Amounts billed to customers in sales transactions related to shipping and handling, represent revenues earned for the goods provided and are included in net sales. Costs of shipping and handling are included in cost of products sold. On January 1, 2019, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) To apply these principles, Topic 606 outlines a five-step process: 1. Identify the contract with a customer. 2. Identify the separate performance obligations in the contract. 3. Determine the transaction price. 4. Allocate the transaction price to the separate performance obligations in the contract. 5. Recognize revenue when (or as) the entity satisfies a performance obligation Pursuant to ASC Topic 606, the Company recognizes revenue when performance obligations under the terms of a contract are satisfied, which occurs typically upon the transfer of control, including the risks and rewards of ownership. With respect to the Company, performance is deemed to occur upon shipment or delivery of products to its customers based on the written contract terms, which is also when control is transferred. The Company evaluated the guidance in ASC 606-10-50-5 and the related implementation guidance to determine disaggregation of revenues that would be meaningful. The majority of the Company’s revenue earned from its Beverages and is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. The Company does not have significant financing component or payment terms, and it does not have any material unsatisfied performance obligations. The Company’s revenues are obtained in similar geographical locations within the United States. Furthermore, the Company’s operations in each of its reporting segments are expected to have essentially the same future prospects, similar gross margins, sales trends, and the nature of its products and customers are essentially the same. The sales from the Company’s beverage product types are organized as one reportable segment, which the Company refers to as the Beverages Segment I. Cost of revenue Cost of revenues consist primarily of expenses associated with the delivery and distribution of products. These include expenses related to direct procurement costs and shipping and handling costs. The Company bills shipping and handling fees charged to customers as part of sales and the associated expense as part of cost of revenues. The costs are charged to cost of revenues in the same period that the associated revenue is earned. J. Impairment of long-lived assets The Company evaluates its long-lived assets for financial impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company evaluates the recoverability of long-lived assets used in operations by measuring the carrying amount of the assets against their estimated undiscounted future cash flows. If such evaluations indicated that the future undiscounted cash flows of certain long-lived assets are not sufficient to recover the carrying value of such assets, the assets are adjusted to fair values. Management completed an impairment review as of December 31, 2020 and 2019 and determined long-lived assets were not impaired. K. Income taxes The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes, The Company has no recorded liabilities for uncertain tax positions as of the accompanying Consolidated Balance Sheets dated December 31, 2020 and December 31, 2019, respectively. L. Advertising costs The Company expenses costs of advertising and promotions as incurred. The Company includes in advertising costs inventory given away as promotional merchandise or free samples to create sales. Advertising and promotion costs for the year ended December 31, 2020 and 2019, were approximately $53,597 and $0, respectively, which amounts were included in selling, general and administrative expenses in the accompanying Consolidated Statements of Loss. M. Concentration of Credit Risk The Company maintain cash balances at financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial institutions and had determined the credit exposure to be negligible. N. Basic and diluted earnings per share In accordance with accounting guidance now codifies as FASB ASC 260 (Earnings per Share) Diluted per share loss is the same as basic per share loss when there is a loss from continuing operations. O. Segments ASC 280-10, Segment Reporting P. Recently issued accounting pronouncements The Company has evaluated all recently issued accounting pronouncements, issued or proposed, by the FASB or other standards-setting bodies as of the period ending September 30, 2020. The Company does not expect a material impact on the Company’s financial position, result of operations, or cash flows from these pronouncements. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2020 | |
INVENTORY | NOTE 3 – INVENTORY Inventory consisted of the following: December 31, 2020 December 31, 2019 CBD Energy Water $ 159,813 $ 107,719 Hemp Energy Drink 343,119 393,021 Storm CBD Water 28,692 41,760 Merchandise and Apparel 11,948 26,304 Unfilled Cans 38,705 86,459 Miscellaneous Beverages 33,225 - Other Inventory 43,362 31,659 Point of Sale Inventory 1,640 - Total Inventory $ 660,504 $ 686,922 |
S and S Beverage [Member] | |
INVENTORY | NOTE 3 – INVENTORY Inventory consisted of the following: December 31, December 31, Lemin $ 234,885 $ 143,686 Trays, Cans and Sleeves 5,912 87,064 Raw Materials - 24,246 Total Inventory $ 240,797 $ 254,996 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 4 – PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following: December 31, December 31, Furniture and Fixtures $ 57,879 $ 52,450 Computers and Software 16,638 14,225 Machinery & Equipment 79,951 50,187 Vehicles 68,135 46,200 Less: Accumulated Depreciation (54,731 ) (20,656 ) Property, plant and equipment, net $ 167,872 $ 142,406 Depreciation for the years ended December 31, 2020 and 2019, was approximately $34,075 and $56,937 respectively, and is included in selling, general and administrative expenses in the accompanying Consolidated Statements of Loss. |
S and S Beverage [Member] | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 4 – PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following: December 31, December 31, Star-up Cost $ 11 $ 11 Website Costs 14,500 29,000 Less: Accumulated Depreciation (2,311 ) (15,843 ) Property, plant and equipment, net $ 12,200 $ 13,168 Amortization expense for the year ended December 31, 2020 was $968. For the year ended December 31, 2019, was $968, and is included in in selling, general and administrative expenses in the accompanying statements of income. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 5 – GOODWILL AND INTANGIBLE ASSETS In April 2019, Gold Leaf acquired 21,000,000 shares, representing all of the issued and outstanding shares of common stock, $0.01 par value per share, of BigSupersearch.com, Inc., a California corporation (“BigSupersearch”), and 14,000,000 shares of its Series A preferred stock, for $61,000, which amount included the purchase price, attorney fees, and transfer fees. At the time of the acquisition, BigSupersearch was considered a “shell company” because it had no operations and no assets. Because no transfer of assets or liabilities occurred, the entire $61,000, representing the consideration paid for all of the issued and outstanding capital stock of BigSupersearch, was recorded as goodwill. Gold Leaf has not commenced operations or done anything with BigSupersearch and it still remains a shell company. Goodwill may not be amortized. Instead, it is tested at least annually for impairment. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The fair value of goodwill can be measured only as a residual and cannot be measured directly. The Company uses a methodology to determine an amount that achieves a reasonable estimate of the value of goodwill for purposes of measuring an impairment loss. That estimate is referred to as the implied fair value of goodwill. At December 31, 2019, BigSupersearch had a positive equity and the Company elected to perform a qualitative assessment to determine if it was more likely than not that the fair value of BigSupersearch exceeded its carrying value, including goodwill. In accordance with the Qualitative Assessment outlined in ASC 350-20-35, Goodwill – Subsequent Measurement , The Quantitative Assessment is a two-step process as outlined in ASC 350-20-35 and is used to identify both the existence of impairment and the amount of impairment. The first step is to determine the fair value. If the carrying amount is greater than zero and its fair value exceeds its carrying amount, then there is no impairment and the second step is not necessary. If the carrying amount of BigSupersearch exceeds the fair value, then goodwill will be measured for impairment in the second step. The amount of impairment loss recorded is the difference in the excess of the carrying amount over its fair value. Management determined that for the year ending December 31, 2019, BigSupersearch had no identifiable assets or liabilities; therefore, the implied fair value of goodwill is zero. Based on this assessment, goodwill was impaired by the full carrying amount of $61,000. At December 31, 2020 and 2019, respectively, the Company had $0 in goodwill. Changes in goodwill are as follows: December 31, December 31, 2020 2019 Beginning of year $ - $ - Acquired goodwill - 61,000 Impairment - (61,000 ) Total goodwill $ - $ Intangible asset consisted of the following: December 31, December 31, Trademark (HighDrate) $ 81,750 $ 81,750 Less: Accumulated Amortization (12,262 ) (4,087 ) Total Intangible Asset $ 69,488 $ 77,663 Estimated future amortization expense related to the intangible asset is as follows: Fiscal year ending: December 31, 2021 8,175 December 31, 2022 8,175 December 31, 2023 8,175 December 31, 2024 8,175 December 31, 2025 8,175 Thereafter 28,613 $ 69,488 |
NOTE RECEIVABLE
NOTE RECEIVABLE | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE RECEIVABLE | NOTE 6 – NOTE RECEIVABLE On May 26, 2016, Robert Clark, formed Elev8 Hemp, LLC, a Delaware limited liability company (“Elev8 Hemp”), on behalf of Ryan Medico, the Company’s then-Chief Financial Officer. Mr. Medico was the sole owner of and served as President of Elev8 Hemp. In June 2016, the Company entered into a letter of intent with Elev8 Hemp to acquire it, such that it would become the Company’s wholly-owned subsidiary. Pursuant to the letter of intent, on June 7, 2016, the Company entered into an Acquisition Agreement with Elev8 Hemp (the “Elev8 Hemp Acquisition Agreement”), whereby the Company agreed to acquire 100% of the ownership of Elev8 Hemp and, in exchange, the Company agreed to issue to Mr. Medico five million restricted shares of the Common Stock, which had a fair market value of $50,000. The Elev8 Hemp Acquisition Agreement provided that if the Company failed to adequately capitalize the development of Elev8 Hemp to complete its objectives set forth in its business plan, then Mr. Medico would have the option until March 31, 2018 to purchase Elev8 Hemp from the Company for a purchase price of $50,000, which could be paid in shares of the Company’s Common Stock. On October 10, 2016, the Company entered into a Membership Interest Purchase Agreement (the “Membership Interest Purchase Agreement”) with Elev8 Hemp, as the Company’s wholly-owned subsidiary, and Branded Legacy, Inc., formerly known as Elev8 Brands, Inc. and, prior to that, known as PLAD, Inc. (“Branded Legacy”), to sell 100% of the then-issued and outstanding membership interests of Elev8 Hemp to Branded Legacy in consideration of its issuance to the Company of 200,000,000 shares of its common stock, par value $0.00001. In connection with this transaction, Mr. Medico became the Chief Executive Officer and the sole director of Branded Legacy. The parties desired to enter into the Membership Interest Purchase Agreement because the Company did not have adequate capital to fund the development of Elev8 Hemp’s business, as well as its own. Until July 2018, Mr. Medico also continued to serve as the Company’s Chief Financial Officer. On April 14, 2017, the Company’s Board of Directors (the “Board”) declared a dividend to its stockholders of an aggregate of 53,196,608 shares of common stock of Branded Legacy. The Company’s stockholders received one share of common stock of Branded Legacy for every 10 shares of the Company’s Common Stock held on the record date. On the record date, we had approximately 104 stockholders, all of whom received this dividend. After the payment of the dividend, the Company held 146,803,392 shares of common stock of Branded Legacy. On March 6, 2018, the Company entered into a Securities Exchange and Settlement Agreement (the “First Exchange Agreement”) with Branded Legacy. Pursuant to the First Exchange Agreement, the Company exchanged with Branded Legacy the remaining 146,803,392 shares of common stock held by the Company for 2,746,723 shares of Branded Legacy’s Series D preferred stock. The shares of Series D preferred stock were initially convertible into 164,803,380 shares of common stock of Branded Legacy. At December 31, 2018, the balance of the investment in Branded Legacy was $1,648. On November 26, 2019, we entered into a second Securities and Exchange Agreement with Branded Legacy, whereby we exchanged the remaining investment of 2,746,723 shares of Branded Legacy’s Series D preferred stock for its 10-year, unsecured, non-convertible promissory note in our favor in the original principal amount of $1,500,000 (the “Branded Legacy Note”). All principal and accrued and unpaid interest on the Branded Legacy Note is payable, in full, on November 27, 2029. As of the dates of the foregoing transactions, the Company and Branded Legacy were not considered related parties based upon the guidance set forth in ASC Topic 850, Related Party Disclosures Management could not ascertain with certainty of the collectability of the Branded Legacy Note due to the dollar amount and duration of the term; therefore, an allowance for $1,500,000 had been assessed and expensed, which was included in the Consolidated Statements of Loss for the year ended December 31, 2019. The Branded Legacy Note and the investment in Branded Legacy consisted of the following: December 31, December 31, Investment in Branded Legacy $ - $ - Note receivable 1,500,000 1,500,000 Less: Allowance for doubtful account (1,500,000 ) (1,500,000 ) Note receivable, net $ - $ - |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 7 – STOCK-BASED COMPENSATION The Company’s directors, officers, key employees, and non-employees were granted stock-based compensation consisting of restricted stock awards. Stock-based compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense at the date of issuance. The Company estimates the fair value of each restricted stock award as of the date of grant using closing price as reported by the OTCM on the date of grant. The Board has not adopted any employee stock purchase plans or other incentive plans, nor does the Company grant stock options to its directors, officers, and employees. The share-based payments granted for the years ended December 31, 2020 and 2019, were 10,085,140 and 15,862,000 shares of the Common Stock, respectively. The current stock-based Common Stock cancelled or forfeited for the years ended December 31, 2020 and 2019, was 0 and 64,860,346 shares of the Common Stock, respectively. For the years ended December 31, 2020 and 2019, the Company recognized stock-based compensation expense, which is included in selling, general and administrative expenses in the accompanying Consolidated Statements of Loss, as follows: Years Ended December 31, 2020 2019 Employee stock awards $ 476,002 $ 290,100 Non-employee stock awards 2,578 834,388 Total stock-based compensation expense $ 478,580 $ 1,124,488 The Company expenses stock-based compensation cost in the current period at the grant date. No future years of compensation is expected for the next five fiscal years. The Company has a balance in accrued stock-based compensation at December 31, 2020 and 2019, of $1,386,497 and $1,386,500, respectively. |
LINE OF CREDIT
LINE OF CREDIT | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
LINE OF CREDIT | NOTE 8 – LINE OF CREDIT On May 5, 2018, Kona entered into a Line of Credit Agreement with Matthew Nicoletti as the lender, which established a revolving line of credit in the amount of up to $400,000. The line of credit matures on May 5, 2022 and is reflected as non-current on the accompanying Consolidated Balance Sheets. Advances under the line of credit bear interest at the rate of 3.75 percent per annum. Payments of principal and accrued interest are payable on the maturity date. At December 31, 2020 and 2019, the line of credit had an outstanding principal balance of $398,470, respectively, and accrued interest of $32,102 and $17,037, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
RELATED PARTY TRANSACTIONS | NOTE 9 – RELATED PARTY TRANSACTIONS A. Long-term debt consists of two note payables with a related party: 1) On October 31, 2018, Kona issued a Standard Promissory Note in favor of Robert Clark, as lender, in the original principal amount of $20,000. Mr. Clark is the Company’s President, Chief Executive Officer, Secretary, and Chairman of the Board. The note bears no interest. Principal payments of $500 per month commenced in February 2019, with the final payment due in April 2021. The outstanding principal balance of this note at December 31, 2020 and 2019 was $8,500 and $14,500, respectively. 2) On February 19, 2019, Gold Leaf issued a Standard Promissory Note in Favor of Robert Clark, as lender, in the original principal amount of $70,000. The note bears no interest. Principal payments of $500 per month commenced in March 2019, with final payment due in March 2021. The outstanding principal balance of this note at December 31, 2020 and 2019 was $59,500 and $65,500, respectively. The future maturities are as follows: December 31, 2021 $ 68,000 $ 68,000 B. Lines of credit consists of two agreements with a related party: 1) On April 4, 2019, Kona entered into a Line of Credit Agreement with Robert. The agreement established a revolving line of credit in the amount of up to $1,500,000. Advances under this line of credit bear interest at the rate of 3.75 percent per annum. The line of credit matures on April 4, 2021, at which time all outstanding principal amounts and accrued interest are due and payable. At December 31, 2020 and 2019, outstanding principal was $1,369,651 and $922,151, respectively, and accrued interest was $36,397 and $0, respectively. 2) On August 29, 2019, Gold Leaf entered into a Line of Credit Agreement with Robert Clark. The agreement established a revolving line of credit in the amount of up to $200,000. Advances under this line of credit bear interest at the rate of 3.75 percent per annum. The line of credit matures on August 29, 2021, at which time all outstanding principal amounts and accrued interest are due and payable. At December 31, 2020 and 2019, outstanding principal was $125,500 and $100,000, respectively, and accrued interest was $3,545 and $0, respectively. |
S and S Beverage [Member] | |
RELATED PARTY TRANSACTIONS | NOTE 5 – RELATED PARTY TRANSACTIONS A. Long-term debt consists of four notes payable with a related party: 1) Long-term debt consists of one 8% interest per annum note payable for $200,000 from a related party. Payments of $9,045 per month were due beginning October 17, 2018. On June 1, 2020, an additional $35,000 was received on the same note, under new terms that the Note shall be payable in one (1) payment of principle plus interest at or before the maturity date of November 1, 2023. In the accompanying balance sheets dated December 31, 2020, and December 31, 2019, the balance of the note payable is $113,761 and 78,760, respectively, and accrued interest was $11,776 and $0, respectively. 2) Long-term debt consists of one 8% interest per annum note payable for $612,700 from a related party on November 1, 2019. Note shall be payable in one (1) payment of principle plus interest at or before the maturity date of November 1, 2023. On December 31, 2019, $412,700 has been forgiven in full by the related party. In the accompanying balance sheets dated December 31, 2020, and December 31, 2019, the balance of the note payable is $200,000, respectively. 3) Long-term debt consists of one 2% interest per annum note payable for $300,000 from a related party on February 1, 2020. Note shall be payable in one (1) payment of principle plus interest at or before the maturity date three (3) days after the sale of substantially all of the assets or equity. In the accompanying balance sheet dated December 31, 2020, the balance of the note payable is $300,000, and accrued interest was $9.953. F-49 4) Long-term debt consists of one 0% interest per annum note payable for $200,000 from a related party on July 31, 2020. Note shall be payable in one (1) payment of principle plus interest at or before the maturity date three (3) days after the sale of substantially all of the assets or equity. In the accompanying balance sheet dated December 31, 2020, the balance of the note payable is $198,000 and accrued interest was $0. 5) Long-term debt consists of one 8% interest per annum note payable for $25,000 from a related party on April 30, 2020. Note shall be payable in one (1) payment of principle plus interest at or before the maturity date of November 1, 2023. On November 30, 2020, this debt was forgiven. In the accompanying balance sheet dated December 31, 2020, there is no balance due. The future maturities are as follows: December 31, 2021 – December 31, 2022 $ - November 1, 2023 798,261 $ 798,261 |
2020 SECURITIES PURCHASE AGREEM
2020 SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND 2020 WARRANT | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
2020 SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND 2020 WARRANT | NOTE 9 – 2020 SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND 2020 WARRANT 2020 Securities Purchase Agreement In May 2020, the Company completed the 2020 Private Placement of the 2020 Debentures and the 2020 Warrant pursuant to the 2020 SPA. The Company sold and issued the First 2020 Debenture and granted the 2020 Warrant promptly after entering in the 2020 SPA. The Company sold and issued the Second 2020 Debenture promptly after filing the 2020 Registration Statement initially with the SEC. The Company sold and issued the Third 2020 Debenture promptly after the SEC declared the Registration Statement effective. The 2020 Debentures are due 12 months from their respective issuance dates and are secured by all of the Company’s assets and the assets of each of its subsidiaries pursuant to that certain Security Agreement by and among the Selling Stockholder, the Company’s subsidiaries, and the Company. Initially, the 2020 Debentures are convertible at the lower of (i) the fixed conversion price, which is $0.05 per share, subject to adjustment (the “2020 Fixed Conversion Price”), or (ii) 80% of the lowest daily volume weighted average price (“VWAP”) of our Common Stock during the 15 trading days immediately preceding the conversion date, subject to adjustment (the “2020 Market Conversion Price”). The 2020 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of its Common Stock or common stock equivalents at a price lower than the then-current conversion price of the 2020 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the 2020 Debentures. The 2020 Debentures are subject to a “conversion blocker” such that the Selling Stockholder cannot convert any portion of the 2020 Debentures that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following such conversion (excluding, for purposes of such determination, shares of the Common Stock issuable upon conversion of the 2020 Debentures or exercise of the 2020 Warrant that had not then been converted or exercised, respectively). The Selling Stockholder can increase that 4.99% “conversion blocker” to 9.99% upon at least 65 days’ prior written notice to the Company. The 2020 Debentures accrue interest at an annual rate equal to 8% and are due and payable on their respective maturity dates (or sooner if the Selling Stockholder converts the 2020 Debentures or otherwise accelerates the maturity date, as provided for in the 2020 Debentures). Interest is payable either in cash or, if certain Equity Conditions (as defined in the 2020 Debentures) are then satisfied, in shares of the Common Stock at the 2020 Market Conversion Price on the trading day immediately prior to the date paid. At the Company’s option, it has the right to redeem, in part or in whole, the outstanding principal and interest under the 2020 Debentures prior to their respective maturity dates; provided that The 2020 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of the Common Stock or common stock equivalents at a price lower than the then-current conversion price of the 2020 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the 2020 Debentures. Pursuant to the terms of the Registration Rights Agreement, the Company agreed to file the Registration Statement with the SEC registering for resale the Conversion Shares and the Warrant Shares within 45 calendar days following the closing of the 2020 Private Placement. The Company also agreed, among other things, to indemnify the Selling Stockholder from certain liabilities and to pay all fees and expenses incurred by the Company in connection with the registration of the Conversion Shares and the Warrant Shares held by the Selling Stockholder. Pursuant to the 2020 SPA, the purchase price for the First 2020 Debenture was $250,000, less $15,000 for origination fees, which consisted of the “original issue discount” of $10,000 and $5,000 as a structuring fee. On December 23, 2020, the Company converted $100,000 of the principal of, and $12,274 of accrued interest on, the First 2020 Debenture into 8,255,438 shares of the Company’s common stock, see Note 11, equity transactions Pursuant to the 2020 SPA, the purchase price for the Second 2020 Debenture was $250,000, less $10,000 for origination fees, which consisted of the “original issue discount” of $10,000 fee. At December 31, 2020, the principal balance of the Second 2020 Debenture is $250,000. Pursuant to the 2020 SPA, the purchase price for the Third 2020 Debenture was $500,000, less $20,000 for origination fees, which consisted of the “original issue discount” of $10,000 fee. At December 31, 2020, the principal balance of the Third 2020 Debenture is $500,000. Derivative Liability The 2020 Debentures have been accounted for utilizing ASC 815. The Company has incurred a liability for the estimated fair value of the First 2020 Debenture. The estimated fair value of the 2020 Debentures has been calculated using the Black-Scholes fair value option-pricing model with key input variables provided by management, as of the date of issuance, with the valuation offset against additional paid in capital, and at each reporting date, with changes in fair value recorded as gains or losses on revaluation in other income (expense). The Company identified embedded features in the 2020 Debentures, which caused the 2020 Debentures to be classified as a liability. These embedded features included the right for the holder to request for the Company to settle the amounts owed pursuant to the 2020 Debentures to the holder by paying an amount of cash equal to the Black-Scholes value of the remaining unexercised portion of the 2020 Debentures on the date of the consummation of a fundamental transaction. The accounting treatment of derivative financial instruments requires that the Company treat the whole instrument as liability and record the fair value of the instrument as a derivative as of the inception date of the instrument and to adjust the fair value of the instrument as of each subsequent balance sheet date. The derivative liabilities were valued using Black-Scholes pricing model with the following average assumptions: December 31, 2020 Stock Price $ 0.0340 Exercise Price $ 0.0332 Expected Life 1 Volatility 105 % Dividend Yield 0 % Risk-Free Interest Rate 2.30 % Fair Value $ 361,152 The following table summarizes the changes in the Company’s assets and liabilities measured at fair value as of December 31, 2020: December Quoted Significant Significant Convertible promissory notes with embedded conversion option $ 361,152 $ 361,152 Total $ 361,152 $ 361,152 The following table sets forth a summary of change in fair value of the Company’s derivative liabilities for the year ended December 31, 2020: Fair value, January 1, 2020 $ - Change in fair value of embedded conversion features of debenture included in earnings - Embedded conversion option liability recorded in connection with the issuance of debenture 148,628 Fair value, June 30, 2020 $ 148,628 Change in fair value of embedded conversion features of debenture included in earnings (39,725 ) Embedded conversion option liability recorded in connection with the issuance of debentures 108,903 Fair value, September 30, 2020 $ 217,806 Change in fair value of embedded conversion features of debenture included in earnings (69,051 ) Embedded conversion option liability recorded in connection with the issuance of debentures 212,397 Fair value, December 31, 2020 $ 361,152 Warrant The Company also granted the 2020 Warrant to purchase up to an aggregate of 20 million shares of the Common Stock. The 2020 Warrant has a three-year term and is immediately exercisable at an exercise price of $0.05 per share, subject to adjustment. If the Company fails to maintain an effective registration statement with the SEC covering the resale of the 2020 Warrant Shares, or if an Event of Default (as defined below) has occurred and is continuing, then the holder may exercise the 2020 Warrant on a “cashless” basis. “Event of Default” means an event of default under the 2020 SPA or the 2020 Debentures. The 2020 Warrant contains an adjustment provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common Stock or common stock equivalents at a price lower than the then-current exercise price of the 2020 Warrant. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the exercise price of the 2020 Warrant. The 2020 Warrant is subject to an “exercise blocker” such that the Selling Stockholder cannot exercise any portion of the 2020 Warrant that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following such exercise (excluding, for purposes of such determination, shares of the Common Stock issuable upon exercise of the 2020 Warrant or conversion of the 2020 Debentures that had not then been exercised or converted, respectively). The Selling Stockholder can increase that 4.99% “exercise blocker” to 9.99% upon at least 65 days’ prior written notice to the Company. During the year ended December 31, 2020, the Company granted the 2020 Warrant that was immediately exercisable for up to 20,000,000 shares of Common Stock. The 2020 Warrant was fully expensed as an interest expense related to the 2020 Warrant issued in connection with the consummation of the transactions contemplated by the 2020 SPA, and no liability was recorded as of December 31, 2020. |
PAYCHECK PROTECTION PROGRAM LOA
PAYCHECK PROTECTION PROGRAM LOAN | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
PAYCHECK PROTECTION PROGRAM LOAN | NOTE 11 – PAYCHECK PROTECTION PROGRAM LOAN On May 4, 2020, the Company entered into a Paycheck Protection Promissory Note in the original principal amount of $95,161 (the “PPP Loan”) with Wells Fargo Bank, N.A. The PPP Loan was made under, and is subject to, the terms and conditions of the Paycheck Protection Program (the “PPP”), which was established as part of the Coronavirus Aid, Relief and Economic Security Act the (“CARES Act”) and is administered by the U.S. Small Business Administration. The PPP provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The current term of the PPP Loan is two years, with a maturity date of May 6, 2022 and it contains a favorable fixed annual interest rate of 1.00%. Payments of principal and interest on the PPP Loan are deferred for the first six months of the term of the PPP Loan, or November 2020. Thereafter, principal and interest are payable monthly and may be prepaid by us at any time prior to maturity with no prepayment penalties. Under the terms of the CARES Act, recipients can apply for and receive forgiveness for all, or a portion of the loan granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for certain permissible purposes as set forth in the PPP, including, but not limited to, payroll costs, mortgage interest, rent or utility costs (collectively, “Qualifying Expenses”), and on the maintenance of employee and compensation levels during a certain time period following the funding of the PPP Loan. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period. The Company has used the proceeds of the PPP Loan for salaries and wages, building lease expense, and utilities. However, no assurance is provided that the Company will be able to obtain forgiveness of the PPP Loan in whole or in part. In May 2020, the Company also received an advance in the amount of $7,000 as part of the Economic Injury Disaster Loan program offered by the U.S. Small Business Administration. This advance was received after the Company filed its application with regarding to the PPP. The advance was not included in any of the documentation related to the PPP Loan. The Company is in the process of determining how this advance will be included as part of the PPP Loan forgiveness. |
EQUITY TRANSACTIONS
EQUITY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
EQUITY TRANSACTIONS | NOTE 12 – EQUITY TRANSACTIONS Preferred Stock The Company’s issued and outstanding preferred stock, par value $0.00001 per share, at December 31, 2020 and 2019 was 988,140 and 4,988,000, respectively. The Board, without further stockholder approval, may issue preferred stock in one or more series from time to time and fix or alter the designations, relative rights, priorities, preferences, qualifications, limitations and restrictions of the shares of each series. Series A Preferred Stock The Company had authorized 4,000,000 shares of Series A Preferred Stock, par value of $0.00001 per share (the “Series A Preferred Stock”), of which no shares were authorized, issued or outstanding at December 31, 2020 and 4,000,000 shares were authorized, issued and outstanding at December 31, 2019. Each share of Series A Preferred Stock, when outstanding, could have been converted into one share of the Common Stock. Series B Preferred Stock The Company had authorized 1,200,000 shares of Series B Preferred Stock, par value of $0.00001 per share (the “Series B Preferred Stock”), of which 488,000 were issued and outstanding at December 31, 2020 and December 31, 2019, respectively. Each share of Series B Preferred Stock may be converted into one share of the Common Stock. Series C Preferred Stock On July 8, 2020, the Company reduced the authorized number of Series C Preferred Stock from 3,300,000 to 250 shares, par value $0.00001 per share (the “Series C Preferred Stock”), by filing a Certificate of Designation of the Preferences, Rights, and Limitations of the Series C Preferred Stock with the Secretary of State of the State of Delaware. The Company also amended the terms of the Series C Preferred Stock. The holders of shares of the Series Preferred C Stock are now entitled to 2,000,000 votes for every share of our Series Preferred C Stock held. The holders of the Series Preferred C Stock are not entitled to receive dividends. Upon any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, before any distribution or payment will be made to the holders of any stock ranking junior to the Series C Preferred Stock, the holders of the Series C Preferred Stock will be entitled to be paid out of the Company’s assets an amount equal to $1.00 in the aggregate for all issued and outstanding shares of the Series C Preferred Stock (as adjusted for any stock dividends, combinations, splits, recapitalizations, and the like with respect to such shares) (the “Preference Value”). After the payment of the full applicable Preference Value of each share of the Series C Preferred Stock, our remaining assets legally available for distribution, if any, will be distributed ratably to the holders of the Common Stock. The Series C Preferred Stock has conversion rights, whereby each share of the Series C Preferred Stock automatically converts into one share of Common Stock on the one-year anniversary of the issuance date. At December 31, 2020 and 2019, the Company had authorized 250 and 3,300,000 shares, respectively, of Series C Preferred Stock of which 140 and 0 shares, respectively, were issued and outstanding at December 31, 2020 and 2019, respectively. At such dates, each share of the Series C Preferred Stock was convertible into one and 1,000 shares, respectively of the Common Stock. Series D Preferred Stock The Company had authorized 500,000 shares of Series D Preferred Stock, par value of $0.00001 per share (the “Series D Preferred Stock”), of which 500,000 shares were issued and outstanding at December 31, 2020 and 2019, respectively. Each share of the Series D Preferred Stock may be converted into 1,000 shares of Common Stock. Common Stock The Company had authorized 2,500,000,000 and 900,000,000 shares of the Common Stock, respectively, of which 786,308,041 shares were issued and outstanding at December 31, 2020 and 763,967,603 were issued and outstanding at December 31, 2019. Equity Transactions On February 11, 2019, Matthew Nicoletti, owner and Chief Executive Officer of Quantum Capital Group LLC (“Quantum”) converted 55,000 shares of the Series C Preferred Stock into 55,000,000 shares of the Common Stock. At the conversion date, the shares of Common Stock had a per-share fair market value of $0.0840, representing a total fair value of $4,620,000, which was based on the closing price of the Common Stock as reported by the OTCM on the date of issuance. On March 18, 2019, the Company issued 58,000,000 shares of Common Stock in connection with the conversion of 58,000 of shares of the Series C Preferred Stock by Matthew Nicoletti, owner and Chief Executive Officer of Quantum. The shares of Common Stock at the date of conversion had a per-share fair market value of $0.0785 based on the closing price of our Common Stock as reported by the OTCM on the date of issuance. On April 17, 2019, the Company issued 52,000,000 shares of Common Stock in connection with the conversion of 52,000 shares of Series C Preferred Stock by Matthew Nicoletti, owner and Chief Executive Officer of Quantum. The shares of Common Stock, at the date of conversion, had a fair market value of $0.076 per share, or an aggregate fair value of $3,952,000, based on the closing price of the Common Stock as reported by the OTCM on the date of issuance. On July 15, 2019, the Company issued 106,000,000 shares of Common Stock in connection with the conversion of 106,000 shares of the Series C Preferred Stock by Matthew Nicoletti, owner and Chief Executive Officer of Quantum. The shares of Common Stock had a per-share fair market value of $0.1081, or a total fair value of $11,458,600, based on the closing price of the Common Stock as reported by the OTCM on the date of issuance. Pursuant to the terms of our offer letter to William Jeffrey Outlaw to serve as one of our Independent Directors, on July 30, 2019, we issued 10,000,000 shares of Common Stock to its independent director, William Jeffrey Outlaw, as payment of $800,000 for his services in that capacity. At the date of issuance, the per-share fair market value was $0.111 based on the closing price of the Common Stock as reported by the OTCM on the date of issuance. On July 10, 2020, the Company issued an aggregate of 4,000,000 shares of Common Stock upon the conversion of an aggregate of 4,000,000 shares of our Series A Preferred Stock by Robert Clark and Joseph Thornburg. The shares of our Common Stock on the date of issuance had a per-share fair market value of $0.0346, which was based on the closing price of our Common Stock as reported by the OTCM on the date of issuance. We issued the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that the shares of our Common Stock issuable upon conversion did not involve any public offering). On December 23, 2020, the Company issued an aggregate of 8,255,438 shares of Common Stock upon the conversion of $100,000 of the principal of, and $12,274 of accrued interest on, the First 2020 Debenture. At the time of conversion, the VWAP during the previous 15 trading days was $0.0170. The First 2020 Debenture was converted at the conversion price of $0.0136, which was the lower of the 2020 Fixed Conversion Price and the 2020 Market Conversion Price. For other equity issuances during the years ended December 31, 2020 and 2019, please see Note 12, Employees Sponsorships Settlement. |
S and S Beverage [Member] | |
EQUITY TRANSACTIONS | NOTE 6 – EQUITY TRANSACTIONS Common Stock The Company has authorized 10,000 shares of common stock with a par value of $30.50, of which 10,000 were issued and outstanding as of the year ended December 31, 2020, and year ended December 31, 2019, respectively. Transactions No equity transactions for the year ended December 31, 2020, and for the year ended December 31, 2019, respectively. |
EMPLOYEES
EMPLOYEES | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
EMPLOYEES | NOTE 13 – EMPLOYEES On April 30, 2019, these shares were cancelled and returned to the Company for accrual valued at $6,500 by Mr. Clark. On March 30, 2016, the Company entered into an Executive Employment Agreement with Ryan Medico (the “Executive Employment Agreement”), whereby Mr. Medico was hired to serve as the Company’s Chief Financial Officer until January 1, 2017. In connection with the Executive Employment Agreement and Mr. Medico’s service as the Chief Financial Officer, the Company agreed to pay Mr. Medico 20,000,000 shares of the Common Stock and negotiate a cash salary when the Company determined that it could pay such salary. These shares had a per-share fair market value of $0.014, or a total fair value of $280,000, at the date of issuance, which was the closing price per share of the Common Stock as reported by the OTCM on the date of issuance. On July 30, 2019, the 14,860,346 shares that had been issued to Ryan Medico were forfeited to the Company and cancelled. The subsequent forfeiture of the Common Stock was accounted for on the accompanying Consolidated Balance Sheets and Consolidated Statements of Stockholders’ Deficit as a reduction in the Common Stock and additional paid-in capital. On January 16, 2019, pursuant to the terms of an employment agreement between the Company and Chad Webb dated December 1, 2018, the Company issued to Mr. Webb 5,000,000 shares of Common Stock as payment of $277,000 in compensation owed for services provided. The shares had a per-share fair market value of $0.0554, based on the closing price of the Common Stock as reported by the OTCM on the date of issuance. On May 23, 2019, the Company issued 100,000 shares of Common Stock equal to $13,100, to each of Jazmin Gonzalez and Michelle Motta as an incentive bonus. At the date of issuance, the per-share fair market value was $0.131 based on the closing price of the Common Stock on the date of issuance as reported by the OTCM. On November 7, 2019, the 100,000 shares that were issued to Michelle Motta were forfeited to the Company and cancelled, which resulted in a reduction in compensation expense of $13,100. On July 30, 2019, 14,860,346 shares of Common Stock were forfeited to the Company. These shares were originally issued on April 7, 2016 for services rendered by Ryan Medico. The return of these shares increased additional paid-in capital by $149. On August 12, 2015, the Company entered into an Employment Agreement with Robert Clark (the “Clark Employment Agreement”). On December 1, 2016, the Company entered into an Amendment to Employment Agreement (the “Clark Amendment”; and, together with the Clark Employment Agreement, the “Amended Clark Employment Agreement”). Pursuant to the terms of the Amendment Clark Employment Agreement, the Company agreed to issue, among other securities, 200,000,000 shares of the Common Stock. Immediately, Mr. Clark decided to defer receipt of 80,000,000 of such shares; thus leaving 120,000,000 shares of the Common Stock to be issued to him. Those 120,000,000 shares of the Common Stock were issued to Mr. Clark, as follows: (i) on October 28, 2015, the Company issued 30,000,000 of such shares at the per-share fair market value of $0.015, based on the closing price of the Common Stock as reported by the OTCM on the date of issuance; (ii) on March 2, 2016, the Company issued 40,000,000 of such shares at the per-share fair market value of $0.0250 based on the closing price of the Common Stock as reported by the OTCM on the date of issuance; and (iii) on Mary 16, 2016, the Company issued 50,000,000 of such shares at the per-share fair market value of $0.0036 based on the closing price of the Common Stock as reported by the OTCM on the date of issuance. The Company accrued 80,000,000 shares of the Common Stock on December 31, 2016 that were not issued. At the date of accrual, the per-share fair market value of the shares was $0.0025 based on the closing price of the Common Stock as reported by the OTCM on the date of issuance. On April 19, 2018, 40,000,000 shares were cancelled and returned to the Company for accrual valued at $1,000,000 by Mr. Clark. On July 31, 2019, an additional 50,000,000 shares were cancelled and returned to the Company for accrual valued at $180,000. Accordingly, as of June 30, 2020, Mr. Clark was the record and beneficial owner of 17,100,000 of shares of the Common Stock and, subject to the July 2020 issuance to Mr. Clark of 140 shares of Series C Preferred, the Company accrued and owed to Mr. Clark an aggregate of 170,000,000 shares to be reissued to him upon his request pursuant to the terms of the oral agreement with him. The Company issued 5,000,000 shares of Common Stock on January 27, 2020 to Lori Radcliffe pursuant to that certain Employment Agreement dated October 7, 2019, by and between Ms. Radcliffe and the Company. At the date of issuance, the per-share fair market value of the shares was $0.0637 based on the closing price of the Common Stock as reported by the OTCM on the date of issuance, for a total value of $318,500. On April 3, 2020, the Company issued 5,000,000 shares of the Common Stock to Paul O’Renick pursuant to an Employment Agreement dated October 1, 2019 in exchange for compensation owed in the amount of $157,500 for services provided. At the date of issuance, the per-share fair market value was $0.0315 based on the closing price of the Common Stock as reported by the OTCM on the date of issuance. |
SPONSORSHIPS
SPONSORSHIPS | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
SPONSORSHIPS | NOTE 14 – SPONSORSHIPS On May 1, 2019, the Company entered into a sponsorship agreement with Ryan Dodd, a professional waterski jumper (the “Dodd Agreement”), whereby the Company agreed to pay monthly sponsorship fees of $1,250 for one year. On May 23, 2019, the Company issued Mr. Dodd 262,500 shares of Common Stock. At the date of issuance, the shares of Common Stock had a fair market value of $0.131 per share based on the closing price of the Common Stock on the date of issuance as reported by the OTCM, representing $34,388 as payment for the Company’s sponsorship. The Dodd Agreement was extended in January 2020 for an additional one-year term. On April 3, 2020, the Company issued 85,000 shares of the Common Stock to Ryan Dodd pursuant to the Dodd Agreement. At the date of issuance, the per-share fair market value was $0.0315 based on the closing price of the Common Stock as reported by the OTCM on the date of issuance, representing a payment of $2,578 for sponsorship fees. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | NOTE 15 – COMMITMENTS AND CONTINGENCIES Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. The following represents the Company’s commitments and contingencies as of December 31, 2020: Operating Lease – The Company currently leases approximately 4,500 square feet of corporate office and warehouse space located at 746 North Drive, Suite A, Melbourne, Florida 32934. The lease is for a five-year term, and expires on May 31, 2023. The initial monthly base rent was approximately $3,994, plus state taxes. The monthly base rent increases annually by three percent, beginning on June 1, 2019 and each June 1st thereafter. During the lease year that commenced on June 1, 2020, the Company’s monthly base rent will be $4,114. For the year ended December 31, 2020, the Company recognized operating lease expense of $58,069, which is included in in selling, general and administrative expenses in the accompanying Consolidated Statements of Loss. |
S and S Beverage [Member] | |
COMMITMENTS AND CONTINGENCIES | NOTE 7 – COMMITMENTS AND CONTIGENCIES Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. |
LEASE LIABILITIES
LEASE LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
LEASE LIABILITIES | NOTE 16 – LEASE LIABILITIES The Company reported the following operating lease liabilities as of September 30, 2020: A. Right-of-Use Operating Lease – On May 22, 2019, Gold Leaf entered into a lease agreement for 30,000 square feet of office and warehouse space in Greer County, South Carolina. The agreement includes monthly payments of $13,429, and included a $6,500 deposit. For the year ended December 31, 2020, the Company recognized right-of-use operating lease expense of $148,895, which is included in in selling, general and administrative expenses in the accompanying Consolidated Statements of Loss. B. On March 17, 2020, Kona entered into a lease agreement for equipment. The agreement includes monthly payments of $676. For the year ended December 31, 2020, the Company recognized right-of-use operating lease expense of $5,522, which is included in in selling, general and administrative expenses in the accompanying Consolidated Statements of Loss. Amounts recognized as right-of-use assets, net related to operating leases are included in noncurrent assets in the accompanying Consolidated Balance Sheet, while related lease liabilities are included in current portion of long-term debt and long-term debt. At December 31, 2020 and 2019, the right-of-use asset and lease liability related to the operating leases were as follows: December 31, 2020 December 31, 2019 Right-of-use asset $ 1,072,094 $ 378,013 Amortization of right-of-use asset (159,101 ) (39,709 ) Right-of-use asset, net $ 912,993 $ 338,304 Operating lease liability Current portion of long-term lease $ 149,407 $ 71,032 Long-term lease 763,586 286,139 Total operating lease liability $ 912,993 $ 357,171 The future payments due under operating leases is as follows: Fiscal year ending: December 31, 2021 149,407 December 31, 2022 154,416 December 31, 2023 160,631 December 31, 2024 167,587 December 31, 2025 167,537 2026 and thereafter 113,415 $ 912,993 |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
REVENUE | NOTE 17 – REVENUE The Company determined that the majority of the Company’s revenue earned from its two reporting segments is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. The Company does not have a significant financing component or payment terms, and the Company does not have any material unsatisfied performance obligations. The Company’s revenues are obtained in similar geographical locations within the United States. The Company’s operating segments are expected to have essentially the same future prospects, similar gross margins, sales trends, and the nature of our products and customers are essentially the same. Furthermore, the Company regularly reviews disaggregated revenue by source for evaluating the financial performance of its operations and making resource decisions. The Company’s revenue is broken down by the following: ● Distributors – revenue derived from direct sales to distributors for resale of its products: Kona Gold hemp-infused energy drinks, HighDrate CBD-infused energy waters, and Storm CBD-infused water. ● Amazon Sales – revenue derived from customer purchases through Amazon.com of our Kona Gold hemp-infused energy drinks. ● Online Sales – revenue derived from customer purchases through the Company’s websites: KonaGoldHemp.com and HighDrateMe.com of the following products: Kona Gold hemp-infused energy drinks and apparel, HighDrate CBD-infused energy waters, and Storm CBD-infused water. ● Gold Leaf Distribution – revenue derived from Gold Leaf, which is the Company’s wholly-owned subsidiary, that focuses on the distribution of premium beverages and snacks in key markets. These markets include over 500 accounts in grocery stores, convenience stores, smoke shops, vape shops, and specialty stores located in Florida and South Carolina. Gold Leaf’s product line includes alkaline waters, beverages for kids, energy drinks, fruit flavored sodas, low-carb lemonade, healthy aloe juice drinks, and CBD-infused jellybeans, all of which complement the Company’s current product offerings. ● Shipping – revenue derived from shipping from direct sales of the Company’s product through KonaGoldHemp.com and HighDrateMe.com. ● Sales Returns and Allowances – the amount reduced from all revenue sources to allow for product returns. The following tables presents our net revenues, by revenue source, and the period-over-period percentage change, for the period presented: Years Ended December 31, 2019 2020 Revenue Source Revenue Revenue % Change Distributors $ 1,315,007 $ 438,745 (67 )% Amazon 133,787 87,965 (34 )% Online Sales 93,124 55,190 (41 )% Gold Leaf Distribution 70,555 332,371 371 % Shipping 70,339 24,663 (65 )% Sales Returns and Allowances (51,159 ) (28,707 ) (44 )% Net Revenues $ 1,631,653 $ 910,227 (44 )% The following tables presents our net revenues, by revenue source, as a percentage of total net revenues for the periods presented: Years Ended December 31, Revenues 2019 2020 Distributors and Resellers 81 % 48 % Amazon 8 % 10 % Online Sales 6 % 6 % Gold Leaf Distribution 4 % 37 % Shipping 4 % 3 % Sales Returns, and Allowances (3 )% (3 )% |
SEGMENTS
SEGMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENTS | NOTE 18 – SEGMENTS The Company has two reportable segments: ● Beverages. C F S ● Distribution. Amounts that do not relate to a reportable segment have been allocated to “Corporate and Eliminations.” The following tables present information about our reportable segments. December 31, December 31, CURRENT ASSETS: Beverages Segment $ 824,835 $ 800,378 Distribution Segment (146,894 ) 44,809 Corporate and eliminations 105,671 (40,630 ) Total Current Assets $ 783,612 $ 804,557 NON-CURRENT ASSETS: Beverages Segment $ 1,063,074 $ 514,312 Distribution Segment 85,546 40,356 Corporate and eliminations 8,233 10,205 Total Non-Current Assets $ 1,156,853 $ 564,873 CURRENT LIABILITIES: Beverages Segment $ 1,879,305 $ 1,356,599 Distribution Segment 72,576 61,027 Corporate and eliminations 1,424,367 98,020 Total Current Liabilities $ 3,376,248 $ 1,515,646 NON-CURRENT LIABILITIES: Beverages Segment $ 2,616,018 $ 1,685,260 Distribution Segment 192,350 159,500 Corporate and eliminations - - Total Non-Current Liabilities $ 2,808,368 $ 1,844,760 Years Ended 2019 2020 REVENUES, NET OF SALES, RETURNS, AND ALLOWANCES: Beverages Segment $ 1,635,669 $ 718,455 Distribution Segment 83,051 332,371 Corporate and Eliminations (87,067 ) (140,599 ) Total Revenues, Net of Sales, Returns, and Allowances $ 1,631,653 $ 910,227 COST OF REVENUES: Beverages Segment 1,333,135 492,096 Distribution Segment 68,012 249,780 Corporate and Eliminations (87,067 ) (87,699 ) Total Cost of Revenues $ 1,314,080 $ 654,177 OPERATING EXPENSES: Beverages Segment $ 3,372,392 $ 1,729,768 Distribution Segment 150,401 276,248 Corporate and Eliminations 65,815 608,808 Total Operating Expenses $ 3,588,608 $ 2,614,824 OTHER INCOME / (EXPENSE): Beverages Segment $ 1,483,366 $ (45,292 ) Distribution Segment - 2,745 Corporate and Eliminations - (724,274 ) Total Other Income / (Expense) $ (1,483,366 ) $ (766,821 ) NET LOSS: Beverages Segment $ (1,586,492 ) $ (1,548,700 ) Distribution Segment (135,362 ) (190,912 ) Corporate and Eliminations (65,815 ) (1,385,983 ) Total Net Loss $ (1,787,669 ) $ (3,125,595 ) |
SETTLEMENT
SETTLEMENT | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
SETTLEMENT | NOTE 19 – SETTLEMENT On June 13, 2019, the Company, through its wholly-owned subsidiary, HighDrate, entered into the Settlement Agreement with Tre Holdco. Pursuant to the Settlement Agreement, Tre Holdco assigned U.S. Trademark Reg. No. 5,351,770 for “Highdrate” to the Company and, in exchange, the Company paid to Tre Holdco a cash payment of $22,500 and issued to Tre Holdco 500,000 shares Common Stock. On June 17, 2019, the Company issued these shares. The per-share fair market value at the date of issuance was $0.1185. The “HighDrate” trademark is included in intangible assets at a total value of $81,750, net of accumulated amortization in the accompanying Consolidated Balance Sheets dated September 30, 2020 and December 31, 2019. See Note 4, Goodwill and Intangible Assets On June 13, 2019, the Company, through its wholly-owned subsidiary, HighDrate, entered into a Confidential Settlement Agreement (the “Settlement Agreement”) with Tre Holdco Inc. (“Tre Holdco”). Pursuant to the Settlement Agreement, Tre Holdco assigned U.S. Trademark Reg. No. 5,351,770 for the mark “Highdrate” to the Company and, in exchange, the Company paid to Tre Holdco a cash payment in the amount of $22,500 and issued to Tre Holdco 500,000 shares of Common Stock. The shares were issued on June 17, 2019 and, on such date, the per-share fair market value, based on the closing price of common stock as reported by the OTCM, was $0.1185, representing a total fair value of $59,250. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2020 | |
GOING CONCERN | NOTE 20 – GOING CONCERN The accompanying Consolidated Financial Statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying Consolidated Financial Statements, during the year ending December 31, 2020, the Company incurred a net loss of $3,125,595, used cash in operations of $1,370,123 and had a stockholders’ deficit of $4,244,153 as of December 31, 2020. In the year ending December 31, 2019, the Company incurred a net loss of $1,787,669 and used cash in operations of $1,228,699 and had a stockholders’ deficit of $1,990,976 as of December 31, 2019. The Company attributes this decrease in sales to the discontinuation of smaller distributor agreements in an effort to sign more favorable agreements with larger, reputable tier 1 and mid-size distributors and grocery chains. These contracts saw unforeseen delays and were additionally impacted by the COVID-19 pandemic during the fiscal year. The COVID-19 delayed the Company’s launch of a variety of new products during most of the 2020 fiscal year – drinks and non-drink line broadening items. We expect that revenue will increase in fiscal year 2021 as distribution related to our current distributors affected by COVID-19 that have resumed distribution will continue to see fewer impacts from the COVID-19 pandemic going forward. Despite the impact from COVID-19 on our revenues in the fiscal year 2020, we still anticipate to sign larger, more favorable agreements with larger, tier 1 and mid-size distributors in our Beverage Segment during fiscal 2021. As a result, the Company’s continuation as a going concern is dependent on the ability to obtain additional financing until we can generate sufficient cash flow from operations to meet our obligations. We intend to continue to seek additional debt or equity financing to continue our operations. There is no assurance that we will ever be profitable or that debt or equity financing will be available to us in the amounts, on terms, and at times deemed acceptable to us, if at all. The issuance of additional equity securities by us would result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, would increase our liabilities and future cash commitments. If we are unable to obtain financing in the amounts and on terms deemed acceptable to us, we may be unable to continue our business, as planned, and as a result may be required to scale back or cease operations for our business, the result of which would be that our stockholders would lose some or all of their investment. The accompanying Consolidated Financial Statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
S and S Beverage [Member] | |
GOING CONCERN | NOTE 8 – GOING CONCERN The accompanying Consolidated Financial Statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying Consolidated Financial Statements, during the year ended December 31, 2020, the Company incurred a net loss of $628,469, used cash in operations of $584,438 and had a stockholders’ deficit of $656,052 as of December 31, 2020. In the year ending December 31, 2019, the Company incurred a net loss of $774,792, used cash in operations of $486,613 and had a stockholders’ deficit of $52,583 as of December 31, 2019. The Company attributes this loss to an increase in general and administrative expenses, primarily wages and salaries, which are essential and integral to our success; sales and marketing; and professional fees. In addition, the Company was impacted by the COVID-19 pandemic at the end of the third quarter. The COVID-19 delayed the distribution of products during most of the first three quarters of 2020 – drink line broadening items. We expect that revenue will remain consistent in the last quarter of fiscal 2020 with the third quarter as distribution related to our current distributors affected by COVID-19 that have resumed distribution, will continue to see impacts from the COVID-19 pandemic. As a result, the Company’s continuation as a going concern is dependent on the ability to obtain additional financing until we can generate sufficient cash flow from operations to meet our obligations. We intend to continue to seek additional debt or equity financing to continue our operations. In addition, we seek to be acquired and enter into an acquisition agreement. There is no assurance that we will ever be profitable or that debt or equity financing will be available to us in the amounts, on terms, and at times deemed acceptable to us, if at all. Obtaining commercial loans, assuming those loans would be available, would increase our liabilities and future cash commitments. If we are unable to obtain financing or be acquired in the amounts and on terms deemed acceptable to us, we may be unable to continue our business, as planned, and as a result may be required to scale back or cease operations for our business, the result of which would be that our stockholders would lose some or all of their investment. The accompanying Financial Statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended |
Dec. 31, 2020 | |
CONCENTRATIONS | NOTE 21 – CONCENTRATIONS The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, less intercompany transactions. In addition, certain customers had outstanding accounts receivables that individually represented 10% or more of the Company’s total outstanding accounts receivables, less intercompany transactions, but before receivable allowances. These customers are as follows: In the accompanying Consolidated Balance Sheet as of December 31, 2020, the Company’s net accounts receivable were $(10,508), representing total accounts receivable of approximately $22,166 less sales returns and allowance of approximately $28,707 and less doubtful accounts of approximately $3,967. In the accompanying Consolidated Balance Sheet as of were 7 December 31, December 31, Total Accounts Receivable $ 22,166 $ 119,771 Less: Sales Returns and Allowances 28,707 $ 51,1599 Less: Doubtful Accounts 3,967 $ 5,019 Accounts Receivable, net $ (10,508 ) $ 63,5934 The Company determined that four customers accounted for approximately 76% (or approximately 26%, 22%, 14% and 14%), or an aggregate of $16,904, of the outstanding total accounts receivable of $22,166 as of December 31, 2020 In the accompanying Consolidated Statements of Loss for the year ended December 31, 2020, no one customer represented 10% or more of the Company’s total net revenue of $910,227 for the year ended December 31, 2020. In the accompanying Consolidated S s Loss The raw materials used in the production of the Company’s products are obtained by the Company’s co-packers and consist primarily of materials such as the flavors, caffeine, sugars or sucralose, taurine, vitamins, CBD, and hemp seed protein contained in its beverages, the bottles in which its beverages are packaged, and the labeling on the outside of its beverages. These principal raw materials are subject to price and availability fluctuations. The Company currently relies on a few key co-packers, which in turn rely on a few key suppliers. The Company continually endeavors to have back-up co-packers, which co-packers would in turn depend on their third-party suppliers to supply certain of the flavors and concentrates that are used in the Company’s beverages. The Company is also dependent on these co-packers to negotiate arrangements with their existing suppliers that would enable the Company to obtain access to certain of such concentrates or flavor formulas under certain extraordinary circumstances. Additionally, in a limited number of cases, the Company’s co-packers may have contractual restrictions with their suppliers or the Company’s co-packers may need to obtain regulatory approvals and licenses that may limit the co-packers’ ability to enter into agreements with alternative suppliers. Contractual restrictions in the agreements the Company has with certain distributors may also limit the Company’s ability to enter into agreements with alternative distributors. The Company believes that a satisfactory supply of co-packers will continue to be available at competitive prices, although there can be no assurance in this regard. With respect to Gold Leaf’s operations, the Company continually endeavors to contract with additional beverage vendors to ensure the Company has adequate inventory. The Company believes that a satisfactory supply of vendors will continue to be available at competitive prices, although there can be no assurance in this regard. The Company had certain vendors that individually represented 10% or more of the Company’s inventory purchases. For the year ended December 31, 2020, the Company did not purchase in excess of 10% of its inventory from any single vendor. For the year ended December 31, 2019, the Company purchased 86% of the Company’s inventory from two vendors, of which no amount was due to these vendors as of December 31, 2019. |
S and S Beverage [Member] | |
CONCENTRATIONS | NOTE 9 – CONCENTRATIONS The Company has certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or outstanding accounts receivable individually represented 10% or more of the Company’s total outstanding accounts receivable, as follows: For the year ended December 31, 2020, three customers individually represented 77%, or approximately $255,300 of the Company’s total revenue, and four customers accounted for 100%, or $33,718, of the outstanding accounts receivable, and the Company has recorded an allowance for uncollectible accounts of $24,280. The net accounts receivable for the year ending December 31, 2020 is $9,438 in the accompanying balance sheet. For the year ended December 31, 2019, two customers individually represented 33%, or approximately $272,000 of the Company’s total revenue, and six customers accounted for 78%, or $41,669, of the outstanding accounts receivable in the accompanying balance sheet. The Company had certain vendors that individually represented 10% or more of the Company’s inventory purchases, as follows: For the year ended December 31, 2020 balance sheet, the Company purchased 100% of the Company’s inventory from three vendors, of which $4,365 amount was due to these vendors. For the year ended December 31, 2019 balance sheet, the Company purchased 89% of the Company’s inventory from three vendors, of which $36,313 amount was due to these vendors. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
SUBSEQUENT EVENTS | NOTE 22 – SUBSEQUENT EVENTS Management has evaluated subsequent events through April 14, 2021, the date that the December 31, 2020 Consolidated Financial Statements were issued, and has determined the following events have occurred that would warrant additional disclosure: (1) In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China. In January 2020, the WHO declared the COVID-19 outbreak a “Public Health Emergency of International Concern.” This worldwide outbreak has resulted in the implementation of significant governmental measures, including lockdowns, closures, quarantines, and travel bans intended to control the spread of the virus. Companies are also taking precautions, such as requiring employees to work remotely, imposing travel restrictions, and temporarily closing businesses and facilities. These restrictions, and future prevention and mitigation measures, have had an adverse impact on global economic conditions and are likely to have an adverse impact on consumer confidence and spending, which could materially adversely affect the supply of, as well as the demand for, the Company’s products. Uncertainties regarding the economic impact of COVID-19 are likely to result in sustained market turmoil, which could also negatively impact the Company’s business, financial condition, and cash flow. The extent of the effect of COVID-19 on the Company’s operational and financial performance will depend on future developments, including the duration, spread, and intensity of the outbreak, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. As a result, it is not currently possible to ascertain the overall impact of COVID-19 on the Company’s business. However, as the pandemic continued for much of the 2020 fiscal year and if it continues for a prolonged period in the 2021 fiscal year, it could have a continuing material adverse effect on the Company’s business, results of operations, financial condition, and cash flow and adversely impact the quoted price of the Common Stock on the OTCM’s OTCQB ® The extent to which the COVID-19 pandemic will further impact the Company’s business will depend on future developments and, given the uncertainty around the extent and timing of the potential future spread or mitigation and around the imposition or relaxation of protective measures, the Company cannot reasonably estimate the impact to its business at this time. (2) On January 12, 2021, the Company issued an aggregate of 10,887,819 shares of Common Stock upon the conversion of $200,000 of the principal of, and $1,425 of accrued interest on, the Third 2020 Debenture. At the time of conversion, the VWAP during the previous 15 trading days was $0.0231. The Third 2020 Debenture was converted at the conversion price of $0.0185, which was the lower of the 2020 Fixed Conversion Price and the 2020 Market Conversion Price. (3) On January 21, 2021, the Company entered into an Agreement and Plan of Merger with S and S Beverage, Inc. and its shareholders and acquired all of the capital stock of S and S Beverage Inc. (“S and S”). To consummate the Acquisition, a Certificate of Merger with the Wisconsin Department of Financial Institutions (the “Merger Certificate”) on February 1, 2021. On January 22, 2021, (i) Kona Gold, (ii) KGS Temporary Company, Inc. (Kona Gold Beverage, Inc. “Acquisition Subsidiary”), (iii) S and S, (iv) William J. Stineman and K&L Beverage, LLC, a Wisconsin limited liability company (as the indemnifying S and S shareholders), and (v) Mr. Stineman (as representative of the S and S Shareholders) entered into the Agreement and Plan of Merger (the “Merger Agreement”). S and S merged with and into our Acquisition Subsidiary; S and S was the surviving entity and became our wholly-owned subsidiary of Kona Gold Beverage, Inc. The Merger Agreement contains customary representations, warranties, covenants, and agreements of the parties, including certain indemnification rights in favor of us that are customary for a transaction of this nature and magnitude. Pursuant to the Merger Agreement, and subject to the terms and conditions contained therein, (4) On January 25, 2021, the Company issued an aggregate of 7,094,732 shares of Common Stock upon the conversion of $150,000 of the principal of, and $1,118 of accrued interest on, the First 2020 Debenture. At the time of conversion, the VWAP during the previous 15 trading days was $0.0266. The First 2020 Debenture was converted at the conversion price of $0.0213, which was the lower of the 2020 Fixed Conversion Price and the 2020 Market Conversion Price. (5) On January 25, 2021, the Company issued an aggregate of 5,183,613 shares of Common Stock upon the conversion of $100,000 of the principal of, and $10,411 of accrued interest on, the Second 2020 Debenture. At the time of conversion, the VWAP during the previous 15 trading days was $0.0266. The Second 2020 Debenture was converted at the conversion price of $0.0213, which was the lower of the 2020 Fixed Conversion Price and the 2020 Market Conversion Price. (6) On February 1, 2021 we entered into a Paycheck Protection Promissory Note in the original principal amount of $117,487 (the “PPP Loan”) with Wells Fargo Bank, N.A. The PPP Loan was made under, and is subject to, the terms and conditions of the Paycheck Protection Program (the “PPP”), which was established as part of the Coronavirus Aid, Relief and Economic Security Act and is administered by the U.S. Small Business Administration. The PPP provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The current term of the PPP Loan is five years, with a maturity date of February 1, 2026 and it contains a favorable fixed annual interest rate of 1.00%. Payments of principal and interest on the PPP Loan are deferred, and the Loan may be eligible for forgiveness pursuant to and in accordance with the PPP Program Requirements. (7) In February 2021, the Company completed a private placement transaction (the “2021 Private Placement”) of two secured convertible debentures (the “2021 Debentures”), convertible for up to 154,958,678 shares (the “2021 Conversion Shares”) of Common Stock and granted a Warrant to purchase Common Stock (the “2021 Warrant”), exercisable for up to 50,000,000 shares of Common Stock (the “2021 Warrant Shares”), pursuant to that certain Securities Purchase Agreement between the Selling stockholder and the Company, dated as of February 10, 2021 (the “2021 SPA”). The Company sold and issued the initial 2021 Debenture (the “First 2021 Debenture”) and granted the 2021 Warrant promptly after entering in the 2021 SPA. The Company will sell and issue the second 2021 Debenture (the “Second 2021 Debenture”) promptly after the SEC declares effective the 2021 Registration Statement (as defined below). The 2021 Debentures are due 12 months from their respective issuance dates and are secured by all of the Company’s assets and the assets of each of its subsidiaries pursuant to that certain Security Agreement by and among the Selling Stockholder, the Company’s subsidiaries, and the Company. Initially, the 2021 Debentures are convertible at the lower of (i) the fixed conversion price, which is $0.03 per share, subject to adjustment (the “2021 Fixed Conversion Price”), or (ii) 80% of the lowest daily volume weighted average price (“VWAP”) of our Common Stock during the 15 trading days immediately preceding the conversion date, subject to adjustment (the “2021 Market Conversion Price”). The 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of its Common Stock or common stock equivalents at a price lower than the then-current conversion price of the 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the 2021 Debentures. The 2021 Debentures are subject to a “conversion blocker” such that the Selling Stockholder cannot convert any portion of the 2021 Debentures that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following such conversion (excluding, for purposes of such determination, shares of the Common Stock issuable upon conversion of the 2021 Debentures or exercise of the 2021 Warrant that had not then been converted or exercised, respectively). The Selling Stockholder can increase that 4.99% “conversion blocker” to 9.99% upon at least 65 days’ prior written notice to the Company. The 2021 Debentures accrue interest at an annual rate equal to 8% and are due and payable on their respective maturity dates (or sooner if the Selling Stockholder converts the 2021 Debentures or otherwise accelerates the maturity date, as provided for in the 2021 Debentures). Interest is payable either in cash or, if certain Equity Conditions (as defined in the 2021 Debentures) are then satisfied, in shares of the Common Stock at the 2021 Market Conversion Price on the trading day immediately prior to the date paid. At the Company’s option, it has the right to redeem, in part or in whole, the outstanding principal and interest under the 2021 Debentures prior to their respective maturity dates; provided that The 2021 Debentures contain an adjustment provision that, subject to certain exceptions, reduces the conversion price if the Company issues shares of Common Stock or common stock equivalents at a price lower than the then-current conversion price of the 2021 Debentures. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the conversion price of the 2021 Debentures. Pursuant to the 2021 SPA, the purchase price for the First 2021 Debenture was $900,000, less $41,000 for origination fees, which consisted of the “original issue discount” of $36,000 and $5,000 as a structuring fee. Pursuant to the 2021 SPA, the purchase price for the Second 2021 Debenture will be $600,000, less $24,000 as an “original issue discount.” In connection with the 2021 Private Placement, the Company also granted the 2021 Warrant to purchase up to an aggregate of 50 million shares of the Common Stock. The 2021 Warrant has a three-year term and is immediately exercisable at an exercise price of $0.03 per share, subject to adjustment. If the Company fails to maintain an effective registration statement with the SEC covering the resale of the 2021 Warrant Shares, or if an Event of Default (as defined below) has occurred and is continuing, then the holder may exercise the 2021 Warrant on a “cashless” basis. “Event of Default” means an event of default under the 2021 SPA or the 2021 Debentures. The 2021 Warrant contains an adjustment provision that, subject to certain exceptions, reduces the exercise price if the Company issues shares of our Common Stock or common stock equivalents at a price lower than the then-current exercise price of the 2021 Warrant. Any stock splits, reverse stock splits, recapitalizations, mergers, combinations and asset sales, stock dividends, and similar events will also result in an adjustment of the exercise price of the 2021 Warrant. The 2021 Warrant is subject to an “exercise blocker” such that the Selling Stockholder cannot exercise any portion of the 2021 Warrant that would result in the Selling Stockholder and its affiliates holding more than 4.99% of the then-issued and outstanding shares of the Common Stock following such exercise (excluding, for purposes of such determination, shares of the Common Stock issuable upon exercise of the 2021 Warrant or conversion of the 2021 Debentures that had not then been exercised or converted, respectively). The Selling Stockholder can increase that 4.99% “exercise blocker” to 9.99% upon at least 65 days’ prior written notice to the Company. Pursuant to the terms of the 2021 Registration Rights Agreement with the Selling Stockholder, the Company agreed to file a registration statement on Form S-1 (the “2021 Registration Statement”) with the SEC registering for resale the 2021 Conversion Shares and the 2021 Warrant Shares within 30 calendar days following the closing of the 2021 Private Placement. The Selling Stockholder has agreed to waive this 30-calendar-day provision for so long as the Company is utilizing its best efforts to file its Annual Report on Form 10-K for its fiscal year ended December 31, 2020, and promptly thereafter files the 2021 Registration Statement. Further, the Company agreed to use its best efforts to have the 2021 Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the effectiveness deadline, or by the 5 th (8) Pursuant to the Agreement and Plan of Merger with S and S Beverage, Inc., the Company issued 9,000,000 shares of its common stock to the legacy S and S Beverage, Inc. shareholders as follows: 6,300,000 shares to K & L Beverage; 1,980,000 shares to William J. Stineman; 360,000 shares to William F. Stineman; 270,000 shares to Gary Kramer; and 90,000 shares to Steven Sirus. The per-share fair market value of the common stock was $0.0301, based on the closing price of the Company’s common stock, as reported by OTC Markets Group Inc. on February 5, 2021, the date on which the Company filed its Current Report on Form 8-K disclosing the acquisition. (9) On February 19, 2021, the Company issued an aggregate of 7,252,634 shares of Common Stock upon the conversion of $150,000 of the principal of, and $855 of accrued interest on, the Second 2020 Debenture. At the time of conversion, the VWAP during the previous 15 trading days was $0.0260. The Second 2020 Debenture was converted at the conversion price of $0.0208, which was the lower of the 2020 Fixed Conversion Price and the 2020 Market Conversion Price. |
S and S Beverage [Member] | |
SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENTS Management has evaluated subsequent events through March 29, 2021 (1) In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China. In January 2020, the WHO declared the COVID-19 outbreak a “Public Health Emergency of International Concern.” This worldwide outbreak has resulted in the implementation of significant governmental measures, including lockdowns, closures, quarantines, and travel bans intended to control the spread of the virus. Companies are also taking precautions, such as requiring employees to work remotely, imposing travel restrictions, and temporarily closing businesses and facilities. These restrictions, and future prevention and mitigation measures, have had an adverse impact on global economic conditions and are likely to have an adverse impact on consumer confidence and spending, which could materially adversely affect the supply of, as well as the demand for, the Company’s products. Uncertainties regarding the economic impact of COVID-19 are likely to result in sustained market turmoil, which could also negatively impact the Company’s business, financial condition, and cash flow. The extent of the effect of COVID-19 on the Company’s operational and financial performance will depend on future developments, including the duration, spread, and intensity of the outbreak, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. As a result, it is not currently possible to ascertain the overall impact of COVID-19 on the Company’s business. However, if the pandemic continues for a prolonged period, it could have a material adverse effect on the Company’s business, results of operations, financial condition, and cash flow and adversely impact the quoted price of the Common Stock on the OTCM’s OTCQB ® The extent to which the COVID-19 pandemic will further impact the Company’s business will depend on future developments and, given the uncertainty around the extent and timing of the potential future spread or mitigation and around the imposition or relaxation of protective measures, the Company cannot reasonably estimate the impact to its business at this time. (2) On January 21, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Kona Gold Beverage, Inc. (“Kona Gold”), pursuant to which it acquired all of the capital stock of the Company. The parties to the Merger Agreement are (i) Kona Gold, (ii) KGS Temporary Company, Inc., a wholly-owned subsidiary of Kona Gold (“Acquisition Subsidiary”), (iii) the Company, (iv) William J. Stineman and K&L Beverage, LLC (as the indemnifying parties on behalf of the Company’s shareholders), and (v) Mr. Stineman (as representative of the Company’s shareholders). As a result of the transactions contemplated by the Merger Agreement, the Company merged with and into the Acquisition Subsidiary. The Company was the surviving entity and became Kona Gold’s wholly-owned subsidiary. The Merger Agreement contains customary representations, warranties, covenants, and agreements of the parties, including certain indemnification rights in favor of Kona Gold that are customary for a transaction of that nature and magnitude. In consideration of the transactions contemplated by the Merger Agreement, Kona Gold issued to the Company’s shareholders an aggregate of nine million restricted shares of its common stock (the “Acquisition Stock”) on a pro rata basis. Kona Gold did not grant any registration rights in respect of the shares of Acquisition Stock. Kona Gold also agreed to pay an aggregate of $1,050,000 (the “Aggregate Acquisition Payments”), the majority of which is allocated to certain of the Company’s creditors (including one of the Company’s legacy shareholders) and approximately $89,000 of which (the “Remaining Acquisition Payments”) is allocated to the Company’s shareholders on a pro rata basis. $400,000 of the Aggregate Acquisition Payments were paid by February 11, 2021. The balance of the Aggregate Acquisition Payments, including the Remaining Acquisition Payments, are scheduled to be paid in monthly installments, in arrears on the tenth calendar day of each month, commencing on March 10, 2021, at a rate equivalent to $2.00 per case of Lemin Superior Lemonade that Kona Gold and the Company sells until the Aggregate Acquisition Payments have been paid in full. In addition to the Aggregate Acquisition Payments, Kona Gold assumed and agreed to pay certain other liabilities of the Company as set forth in the Merger Agreement. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Basis of presentation | A. Basis of Presentation The accompanying consolidated financial statements are unaudited and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. These unaudited consolidated financial statements have been prepared on the accrual basis of accounting and in accordance with generally accepted accounting principles (“GAAP”) in the United States. |
Use of estimates | B. Use of Estimates The preparation of the consolidated financial statements in conformity with 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 date of the financial statements. Estimates also affect the reported amounts of revenue and expenses during the reporting period. Actual events and results could differ from those assumptions and estimates. |
Cash and cash equivalents | C. Cash and Cash Equivalents For the purpose of reporting cash flows, the Company considers all unrestricted, highly liquid investments with an initial maturity of three months or less to be cash equivalents. |
Fair value of financial instruments | D. Fair Value of Financial Instruments The estimated fair values for financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The carrying amounts of accounts payable, accrued liabilities, and notes payable approximate fair value given their short-term nature or effective interest rates. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted price in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarch is as follows: Level 1 – quoted prices in active markets for identical assets or liabilities; Level 2 – inputs other than Level 1 that are observable, either directly or indirectly; such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets and liabilities in markets that are not active, or inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company analyzes all financial instruments with features of both liabilities and equity under Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity, Derivatives and Hedging The Company uses Level 2 inputs for its valuation methodology for the embedded conversion option liabilities as their fair value were determined by using the Black-Scholes option-pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. |
Accounts receivable and allowance for doubtful accounts | E. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at net realizable value. The Company determines provisions for uncollectible accounts, sales returns, and claims based upon factors including the credit risk and activity of specific customers, historical trends, and other information. If the Company becomes aware of a specific distributor’s or reseller’s inability to meet its financial obligations, bad debt charges are recorded based on an overall assessment of past due accounts receivable outstanding. Bad debt attributed to accounts receivable in the year ended December 31, 2020 and 2019 was $32,768 and $14,160, respectively. These amounts are included in selling, general and administrative expenses in the accompanying Consolidated Statements of Loss. Management will review annually to determine provisions and record an allowance as deemed necessary. In the opinion of management, a provision was deemed necessary for uncollectible accounts for Kona and no provision was deemed necessary for Gold Leaf. The balance of allowance for Uncollectible Accounts at December 31, 2020 and 2019 were $3,967 and $5,019, respectively, as reflected in the accompanying Consolidated Balance Sheets. |
Inventories | F. Inventories The cost of inventory using the standard cost method, which approximates actual cost based on a first-in, first-out method. The Company’s inventories are valued at the lower cost or net realizable value. The Company’s inventory consists almost entirely of finished and unfinished goods, and freight, which include CBD energy waters, CBD waters, hemp energy drinks, cans for production, and merchandise and apparel. The Company periodically evaluates and adjusts inventories for obsolescence. In the opinion of management, no provision for obsolescence is deemed necessary. The shelf life of all beverage inventory is two years, and at December 31, 2020 and 2019, all inventory was current, as reflected in the accompanying Consolidated Balance Sheets. |
Property, plant and equipment | G. Property, Plant and Equipment Property, plant and equipment are reported on the accompanying Consolidated Balance Sheet at cost less accumulated depreciation. Assets with a useful life greater than one year and cost greater than $100 are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation is provided using the straight-line method over the estimated useful lives of the asset as follows: Estimated Furniture and fixtures 7 Machinery and equipment 7 Vehicles 5 Computer equipment 5 – 7 |
Goodwill and Intangible Assets | H. Goodwill and Intangible Assets Goodwill arises from business combinations and is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed. The Company has selected December 31 as the date to perform the annual impairment test. Intangible assets represent both indefinite lived and definite lived assets. Trademarks are deemed to have definite useful lives of ten years, are amortized, and are tested annually for impairment. Intangible assets are reported on the balance sheet at cost less accumulated amortization. The Company has selected December 31 as the date to perform the annual impairment test. Management determined that, for the year ending December 31, 2019, there were no identifiable assets or liabilities; therefore, the implied fair value of goodwill is zero. Based on this assessment, goodwill was impaired by the full carrying amount of $61,000 at December 31, 2019, see Note 4, Goodwill and Intangible Assets Goodwill and Intangible Assets |
Leases | I. Leases On January 1, 2019, the Company adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred. The amortization period for the right-of-use asset is from the lease commencement date to the earlier of the end of the lease term or the end of the useful life of the asset. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate or the risk-free rate with the election of the practical expedient. The Company has elected to use the risk-free rate. |
Revenue and provision for sales, returns and allowances | J. Revenue and Provision for Sales, Returns, and Allowances The Company sells its products, which primarily includes its hemp energy drinks, CBD energy waters, CBD waters, and logo apparel, to online customers or through resellers and distributors. In evaluating the timing of the transfer of control of products to customers, the Company considers several indicators, including significant risks and rewards of products, the Company’s right to payment, and the legal title of the products. The Company recognizes revenue from product sales to customers, distributors, and resellers when products that do not require further services by the Company are shipped, when there are no uncertainties surrounding customer acceptance, and when collectability is reasonably assured. Sales are made to customers under terms allowing certain limited rights of return. Amounts billed to customers in sales transactions related to shipping and handling, represent revenues earned for the goods provided and are included in net sales. Costs of shipping and handling are included in cost of products sold. The Company also sells its products, and beverages purchased for resale from several other beverage manufacturers to convenience stores, grocery stores, and smoke and gift shops. In evaluating the timing of the transfer of control of products to customers, the Company considers several indicators, including significant risks and rewards of products, the Company’s right to payment, and the legal title of the products. The Company recognizes revenue from product sales to resellers when products that do not require further services by the Company are shipped or delivered, when there are no uncertainties surrounding customer acceptance and when collectability is reasonably assured. Cash received by the Company prior to shipment is recorded as deferred revenue. Sales are made to customers under terms allowing certain limited rights of return. Amounts billed to customers in sales transactions related to shipping and handling, represent revenues earned for the goods provided and are included in net sales. Costs of shipping and handling are included in cost of products sold. On January 1, 2019, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) To apply these principles, ASC Topic 606 outlines a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes: 1. Identifying the contract(s) or agreement(s) with a customer; 2. Identifying the separate performance obligations in the contract or agreement; 3. Determining the transaction price; 4. Allocating the transaction price to the separate performance obligations in the contract or agreement; and 5. Recognizing revenue as each performance obligation is satisfied. Pursuant to ASC Topic 606, the Company recognizes revenue when performance obligations under the terms of a contract are satisfied, which occurs typically upon the transfer of control, including the risks and rewards of ownership. With respect to the Company, performance is deemed to occur upon shipment or delivery of products to its customers based on the written contract terms, which is also when control is transferred. The Company evaluated the guidance in ASC 606-10-50-5 and the related implementation guidance to determine disaggregation of revenues that would be meaningful. The majority of the Company’s revenue earned from its Beverages Segment and its Distribution Segment is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. The Company does not have significant financing component or payment terms, and it does not have any material unsatisfied performance obligations. The Company’s revenues are obtained in similar geographical locations within the United States. Furthermore, the Company’s operations in each of its reporting segments are expected to have essentially the same future prospects, similar gross margins, sales trends, and the nature of its products and customers are essentially the same. The sales from the Company’s beverage product types are organized as one reportable segment, which the Company refers to as the Beverages Segment, and the sales of the Company’s products and products that are purchased from resellers that are distributed by Gold Leaf is organized as its second reportable segment, which the Company refers to as the Distribution Segment. The Company has also determined that disaggregated revenue by net sales by revenue source would be meaningful and allow investors to understand its business activities, historical performance, or future prospects. Disaggregated sales by revenue source, which includes sales to distributors, online sales, sales through Amazon, and Gold Leaf distribution sales, is included in Note 16, Revenue Sales are made to customers under terms allowing certain limited rights of return. The Company records an allowance and return for each quarter for 3% of total sales. The Company recorded sales return, and allowance at the year ending December 31, 2020 and 2019 of approximately $28,707 and $51,159, respectively, which is included in the revenues, net of sales returns and allowances in the accompanying Consolidated Statements of Loss. |
Cost of revenue | K. Cost of Revenues Cost of revenues consist primarily of expenses associated with the delivery and distribution of products. These include expenses related to direct procurement costs and shipping and handling costs. The Company bills shipping and handling fees charged to customers as part of sales and the associated expense as part of cost of revenues. The costs are charged to cost of revenues in the same period that the associated revenue is earned. |
Impairment of long-lived assets | L. Impairment of Long-Lived Assets The Company evaluates its long-lived assets for financial impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company evaluates the recoverability of long-lived assets used in operations by measuring the carrying amount of the assets against their estimated undiscounted future cash flows. If such evaluations indicated that the future undiscounted cash flows of certain long-lived assets are not sufficient to recover the carrying value of such assets, the assets are adjusted to fair values. Management completed an impairment review as of December 31, 2020 and determined long-lived assets were not impaired. |
Income taxes | M. Income Taxes The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes, The Company has no recorded liabilities for uncertain tax positions as of the accompanying Consolidated Balance Sheets dated December 31, 2020 and 2019, respectively. |
Stock based compensation | N. Stock-Based Compensation FASB’s ASC Topic 718, Stock Compensation The Company estimates the fair value of each restricted stock award as of the date of grant using the closing price as reported by the OTC Markets Group Inc. (the “OTCM”) on the date of grant. The fair value determined represents the cost for the award and is recognized over the vesting period during which an employee is required to provide service in exchange for the award. The Company accounts for forfeitures of restricted stock as they occur. |
Advertising costs | O. Advertising Costs The Company expenses costs of advertising and promotions as incurred. The Company includes in advertising costs inventory given away as promotional merchandise or free samples to create sales. Advertising and promotion costs for the years ended December 31, 2020 and 2019, were approximately $32,700 and $125,000, respectively, which amounts were included in selling, general and administrative expenses in the accompanying Consolidated Statements of Loss. |
Concentration of Credit Risk | P. Concentration of Credit Risk The Company maintains cash balances at financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial institutions and had determined the credit exposure to be negligible. |
Basic and diluted earnings per share | Q. Basic and Diluted Earnings per Share In accordance with FASB’s ASC 260, Earnings per Share Diluted per-share loss is the same as basic per-share loss when there is a loss from continuing operations. |
Segments | R. Segments ASC 280-10, Segment Reporting The Company then applied the management approach to the identification of its two reportable segments – the Beverages Segment, consisting of the operations of Kona and HighDrate, and the Distribution Segment, consisting of the operations of Gold Leaf. Specifically, the Company has evaluated guidance in ASC 280-10 and determined that aggregation is consistent with the objectives of ASC 280-10 in that aggregation into two reportable segments allows users of our financial statements to view the Company’s business through the eyes of management based upon the way management reviews performance and makes decisions. Additional factors that were considered included: whether or not an operating segment has similar economic characteristics, the nature of the products/services under each operating segment, the nature of the production/go-to-market process, the type and geographic location of our customers, and the distribution of our products/services. The Company further determined that its logo merchandise and apparel, which revenue comprises approximately 1% of the Company’s gross annual sales, and solely exists for promotion purposes, could be aggregated with the operations in the Beverages Segment. A description of the Company’s products is contained in Note 1, Organization and Description of Business. Segments. |
Registration Rights Agreement | S. Registration Rights Agreement In May 2020, the Company completed a private placement transaction (the “2020 Private Placement”) of three secured convertible debentures (the “2020 Debentures”), convertible for up to 105,947,397 shares (the “2020 Conversion Shares”) of Common Stock and a Warrant to purchase Common Stock (the “2020 Warrant”), exercisable for up to 20,000,000 shares of Common Stock (the “2020 Warrant Shares”), pursuant to that certain Securities Purchase Agreement between an otherwise unaffiliated third-party investor (the “Selling Stockholder”) and the Company, dated as of May 14, 2020 (the “2020 SPA”). The Company sold and issued the initial 2020 Debenture (the “First 2020 Debenture”) and granted the Warrant promptly after entering in the 2020 SPA. The Company sold and issued the second 2020 Debenture (the “Second 2020 Debenture”) promptly after filing the registration statement on Form S-1 (the “2020 Registration Statement”) with the Securities and Exchange Commission (the “SEC”). The Company sold and issued the third 2020 Debenture (the “Third 2020 Debenture”) promptly after the SEC declared the Registration Statement effective. The Company agreed to register the 2020 Conversion Shares and 2020 Warrant Shares pursuant to the terms of the Registration Rights Agreement between the Selling Stockholder and Company, dated as of May 14, 2020 (the “2020 Registration Rights Agreement”). Pursuant to the terms of the Registration Rights Agreement, the Company agreed to file the Registration Statement with the SEC registering for resale the Conversion Shares and the Warrant Shares within 45 calendar days following the closing of the Private Placement. Further, the Company agreed to use its best efforts to have the Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the effectiveness deadline, or by the 5 th th The Company accounts for registration rights agreements in accordance with ASC subtopic 825-20, Registration Payment Arrangements Loss Contingencies |
Recently issued accounting pronouncements | T. Recently Issued Accounting Pronouncements The Company has evaluated all recently issued accounting pronouncements, issued or proposed, by the FASB or other standards-setting bodies as of the period ending December 31, 2020. The Company does not expect a material impact on the Company’s financial position, result of operations, or cash flows from these pronouncements. |
S and S Beverage [Member] | |
Basis of presentation | A. Basic of presentation The accompanying consolidated financial statements are unaudited and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. These unaudited consolidated financial statements have been prepared on the accrual basis of accounting and in accordance with generally accepted accounting principles (“GAAP”) in the United States. |
Use of estimates | B. Use of estimates The preparation of the consolidated financial statements in conformity with 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 date of the financial statements. Estimates also affect the reported amounts of revenue and expenses during the reporting period. Actual events and results could differ from those assumptions and estimates. |
Cash and cash equivalents | C. Cash and cash equivalents For the purpose of reporting cash flows, the Company considers all unrestricted, highly liquid investments with an initial maturity of three months or less to be cash equivalents. |
Fair value of financial instruments | D. Fair value of financial instruments The estimated fair values for financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The carrying amounts of accounts payable, accrued liabilities, and notes payable approximate fair value given their short-term nature or effective interest rates. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted price in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarch is as follows: Leve 1 – quoted prices in active markets for identical assets or liabilities; Level 2 – inputs other than Level 1 that are observable, either directly or indirectly; such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets and liabilities in markets that are not active, or inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Accounts receivable and allowance for doubtful accounts | E. Accounts receivable Accounts receivable are recorded at net realizable value. The Company determines provisions for uncollectible accounts, sales returns, and claims based upon factors including the credit risk and activity of specific customers, historical trends, and other information. In the circumstance that the Company becomes aware of a specific customer’s inability to meet its financial obligations, bad debt charges are recorded based on an overall assessment of past due accounts receivable outstanding. No bad debt was recorded in the accompanying statement of income years ending December 31, 2020 and 2019, respectively. Management will review annually to determine provisions and record an allowance as deemed necessary. In the opinion of management, no provision is deemed necessary for sales returns and all accounts were deemed collectible at December 31, 2020 and 2019, respectively. The balance of allowance for Uncollectible Accounts as of December 31, 20120 and 2019 is $24,280 and $0, respectively. |
Inventories | F. Inventories The Company’s inventories are valued at the lower cost or net realizable value. The Company’s inventories consist almost entirely of finished goods and freight. We periodically evaluate and adjust inventories for obsolescence. In the opinion of management, no provision for obsolescence is deemed necessary. The shelf life of all beverage inventory is two years, and as of the balance sheet dated December 31, 2020 and December 31, 2019, all inventory is current. |
Property, plant and equipment | G. Property, plant and equipment Property, plant and equipment are reported on the balance sheet at cost less accumulated depreciation. Assets with a useful life greater than one year and cost greater than $100 are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation is provided using the straight-line method over the estimated useful lives of the asset as follows: Estimated Furniture and fixtures 7 Machinery and equipment 7 Vehicles 5 Computer equipment 5 – 7 |
Revenue and provision for sales, returns and allowances | H. Revenue recognition The Company product sales include Lemin branded lemonade drinks. In evaluating the timing of the transfer of control of products to customers, we consider several indicators, including significant risks and rewards of products, our right to payment, and the legal title of the products. The Company recognizes revenue from product sales to customers, distributors and resellers when products that do not require further services by the Company are shipped, when there are no uncertainties surrounding customer acceptance and when collectability is reasonably assured. Sales are made to customers under terms allowing certain limited rights of return. Amounts billed to customers in sales transactions related to shipping and handling, represent revenues earned for the goods provided and are included in net sales. Costs of shipping and handling are included in cost of products sold. The Company also sells its products, and beverages purchased for resale from several other beverage manufacturers to convenience stores, grocery stores, and smoke and gift shops. In evaluating the timing of the transfer of control of products to customers, the Company considers several indicators, including significant risks and rewards of products, the Company’s right to payment, and the legal title of the products. The Company recognizes revenue from product sales to resellers when products that do not require further services by the Company are shipped or delivered, when there are no uncertainties surrounding customer acceptance and when collectability is reasonably assured. Cash received by the Company prior to shipment is recorded as deferred revenue. Sales are made to customers under terms allowing certain limited rights of return. Amounts billed to customers in sales transactions related to shipping and handling, represent revenues earned for the goods provided and are included in net sales. Costs of shipping and handling are included in cost of products sold. On January 1, 2019, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) To apply these principles, Topic 606 outlines a five-step process: 1. Identify the contract with a customer. 2. Identify the separate performance obligations in the contract. 3. Determine the transaction price. 4. Allocate the transaction price to the separate performance obligations in the contract. 5. Recognize revenue when (or as) the entity satisfies a performance obligation Pursuant to ASC Topic 606, the Company recognizes revenue when performance obligations under the terms of a contract are satisfied, which occurs typically upon the transfer of control, including the risks and rewards of ownership. With respect to the Company, performance is deemed to occur upon shipment or delivery of products to its customers based on the written contract terms, which is also when control is transferred. The Company evaluated the guidance in ASC 606-10-50-5 and the related implementation guidance to determine disaggregation of revenues that would be meaningful. The majority of the Company’s revenue earned from its Beverages and is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. The Company does not have significant financing component or payment terms, and it does not have any material unsatisfied performance obligations. The Company’s revenues are obtained in similar geographical locations within the United States. Furthermore, the Company’s operations in each of its reporting segments are expected to have essentially the same future prospects, similar gross margins, sales trends, and the nature of its products and customers are essentially the same. The sales from the Company’s beverage product types are organized as one reportable segment, which the Company refers to as the Beverages Segment |
Cost of revenue | I. Cost of revenue Cost of revenues consist primarily of expenses associated with the delivery and distribution of products. These include expenses related to direct procurement costs and shipping and handling costs. The Company bills shipping and handling fees charged to customers as part of sales and the associated expense as part of cost of revenues. The costs are charged to cost of revenues in the same period that the associated revenue is earned. |
Impairment of long-lived assets | J. Impairment of long-lived assets The Company evaluates its long-lived assets for financial impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company evaluates the recoverability of long-lived assets used in operations by measuring the carrying amount of the assets against their estimated undiscounted future cash flows. If such evaluations indicated that the future undiscounted cash flows of certain long-lived assets are not sufficient to recover the carrying value of such assets, the assets are adjusted to fair values. Management completed an impairment review as of December 31, 2020 and 2019 and determined long-lived assets were not impaired. |
Income taxes | K. Income taxes The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes, The Company has no recorded liabilities for uncertain tax positions as of the accompanying Consolidated Balance Sheets dated December 31, 2020 and December 31, 2019, respectively. |
Advertising costs | L. Advertising costs The Company expenses costs of advertising and promotions as incurred. The Company includes in advertising costs inventory given away as promotional merchandise or free samples to create sales. Advertising and promotion costs for the year ended December 31, 2020 and 2019, were approximately $53,597 and $0, respectively, which amounts were included in selling, general and administrative expenses in the accompanying Consolidated Statements of Loss. |
Concentration of Credit Risk | M. Concentration of Credit Risk The Company maintain cash balances at financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial institutions and had determined the credit exposure to be negligible. |
Basic and diluted earnings per share | N. Basic and diluted earnings per share In accordance with accounting guidance now codifies as FASB ASC 260 (Earnings per Share) Diluted per share loss is the same as basic per share loss when there is a loss from continuing operations. |
Segments | O. Segments ASC 280-10, Segment Reporting |
Recently issued accounting pronouncements | P. Recently issued accounting pronouncements The Company has evaluated all recently issued accounting pronouncements, issued or proposed, by the FASB or other standards-setting bodies as of the period ending September 30, 2020. The Company does not expect a material impact on the Company’s financial position, result of operations, or cash flows from these pronouncements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Schedule of estimated useful lives of asset | Depreciation is provided using the straight-line method over the estimated useful lives of the asset as follows: Estimated Furniture and fixtures 7 Machinery and equipment 7 Vehicles 5 Computer equipment 5 – 7 |
S and S Beverage [Member] | |
Schedule of estimated useful lives of asset | Depreciation is provided using the straight-line method over the estimated useful lives of the asset as follows: Estimated Furniture and fixtures 7 Machinery and equipment 7 Vehicles 5 Computer equipment 5 – 7 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Schedule of Inventory | Inventory consisted of the following: December 31, 2020 December 31, 2019 CBD Energy Water $ 159,813 $ 107,719 Hemp Energy Drink 343,119 393,021 Storm CBD Water 28,692 41,760 Merchandise and Apparel 11,948 26,304 Unfilled Cans 38,705 86,459 Miscellaneous Beverages 33,225 - Other Inventory 43,362 31,659 Point of Sale Inventory 1,640 - Total Inventory $ 660,504 $ 686,922 |
S and S Beverage [Member] | |
Schedule of Inventory | Inventory consisted of the following: December 31, December 31, Lemin $ 234,885 $ 143,686 Trays, Cans and Sleeves 5,912 87,064 Raw Materials - 24,246 Total Inventory $ 240,797 $ 254,996 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment | Property, plant and equipment consisted of the following: December 31, December 31, Furniture and Fixtures $ 57,879 $ 52,450 Computers and Software 16,638 14,225 Machinery & Equipment 79,951 50,187 Vehicles 68,135 46,200 Less: Accumulated Depreciation (54,731 ) (20,656 ) Property, plant and equipment, net $ 167,872 $ 142,406 |
S and S Beverage [Member] | |
Property, Plant and Equipment | Property, plant and equipment consisted of the following: December 31, December 31, Star-up Cost $ 11 $ 11 Website Costs 14,500 29,000 Less: Accumulated Depreciation (2,311 ) (15,843 ) Property, plant and equipment, net $ 12,200 $ 13,168 |
GOODWILL AND INTANGIBLE ASSET (
GOODWILL AND INTANGIBLE ASSET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Goodwill | Changes in goodwill are as follows: December 31, December 31, 2020 2019 Beginning of year $ - $ - Acquired goodwill - 61,000 Impairment - (61,000 ) Total goodwill $ - $ |
Intangible asset | Intangible asset consisted of the following: December 31, December 31, Trademark (HighDrate) $ 81,750 $ 81,750 Less: Accumulated Amortization (12,262 ) (4,087 ) Total Intangible Asset $ 69,488 $ 77,663 |
Estimated future amortization expense | Estimated future amortization expense related to the intangible asset is as follows: Fiscal year ending: December 31, 2021 8,175 December 31, 2022 8,175 December 31, 2023 8,175 December 31, 2024 8,175 December 31, 2025 8,175 Thereafter 28,613 $ 69,488 |
NOTE RECEIVABLE (Tables)
NOTE RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Schedule of note receivable | The Branded Legacy Note and the investment in Branded Legacy consisted of the following: December 31, December 31, Investment in Branded Legacy $ - $ - Note receivable 1,500,000 1,500,000 Less: Allowance for doubtful account (1,500,000 ) (1,500,000 ) Note receivable, net $ - $ - |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Compensation Related Costs [Abstract] | |
Stock-based compensation expense | The Company recognized stock-based compensation expense, which is included in selling, general and administrative expenses in the accompanying Consolidated Statements of Loss, as follows: Years Ended December 31, 2020 2019 Employee stock awards $ 476,002 $ 290,100 Non-employee stock awards 2,578 834,388 Total stock-based compensation expense $ 478,580 $ 1,124,488 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Schedule of future maturities | The future maturities are as follows: December 31, 2021 $ 68,000 $ 68,000 |
S and S Beverage [Member] | |
Schedule of future maturities | The future maturities are as follows: December 31, 2021 – December 31, 2022 $ - November 1, 2023 798,261 $ 798,261 |
2020 SECURITIES PURCHASE AGRE_2
2020 SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND 2020 WARRANT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Schedule of derivative liabilities | The derivative liabilities were valued using Black-Scholes pricing model with the following average assumptions: December 31, 2020 Stock Price $ 0.0340 Exercise Price $ 0.0332 Expected Life 1 Volatility 105 % Dividend Yield 0 % Risk-Free Interest Rate 2.30 % Fair Value $ 361,152 |
Schedule of assets and liabilities measured at fair value | The following table summarizes the changes in the Company’s assets and liabilities measured at fair value as of December 31, 2020: December Quoted Significant Significant Convertible promissory notes with embedded conversion option $ 361,152 $ 361,152 Total $ 361,152 $ 361,152 |
Summary of change in fair value of derivative liability | The following table sets forth a summary of change in fair value of the Company’s derivative liabilities for the year ended December 31, 2020: Fair value, January 1, 2020 $ - Change in fair value of embedded conversion features of debenture included in earnings - Embedded conversion option liability recorded in connection with the issuance of debenture 148,628 Fair value, June 30, 2020 $ 148,628 Change in fair value of embedded conversion features of debenture included in earnings (39,725 ) Embedded conversion option liability recorded in connection with the issuance of debentures 108,903 Fair value, September 30, 2020 $ 217,806 Change in fair value of embedded conversion features of debenture included in earnings (69,051 ) Embedded conversion option liability recorded in connection with the issuance of debentures 212,397 Fair value, December 31, 2020 $ 361,152 |
LEASE LIABILITIES (Tables)
LEASE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Schedule of right-of-use asset and lease liability related to operating leases | At December 31, 2020 and 2019, the right-of-use asset and lease liability related to the operating leases were as follows: December 31, 2020 December 31, 2019 Right-of-use asset $ 1,072,094 $ 378,013 Amortization of right-of-use asset (159,101 ) (39,709 ) Right-of-use asset, net $ 912,993 $ 338,304 Operating lease liability Current portion of long-term lease $ 149,407 $ 71,032 Long-term lease 763,586 286,139 Total operating lease liability $ 912,993 $ 357,171 |
Schedule of future payments due under operating leases | The future payments due under operating leases is as follows: Fiscal year ending: December 31, 2021 149,407 December 31, 2022 154,416 December 31, 2023 160,631 December 31, 2024 167,587 December 31, 2025 167,537 2026 and thereafter 113,415 $ 912,993 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Schedule of net revenues, by revenue source | The following tables presents our net revenues, by revenue source, and the period-over-period percentage change, for the period presented: Years Ended December 31, 2019 2020 Revenue Source Revenue Revenue % Change Distributors $ 1,315,007 $ 438,745 (67 )% Amazon 133,787 87,965 (34 )% Online Sales 93,124 55,190 (41 )% Gold Leaf Distribution 70,555 332,371 371 % Shipping 70,339 24,663 (65 )% Sales Returns and Allowances (51,159 ) (28,707 ) (44 )% Net Revenues $ 1,631,653 $ 910,227 (44 )% |
Schedule of net revenues, by revenue source, as a percentage | The following tables presents our net revenues, by revenue source, as a percentage of total net revenues for the periods presented: Years Ended December 31, Revenues 2019 2020 Distributors and Resellers 81 % 48 % Amazon 8 % 10 % Online Sales 6 % 6 % Gold Leaf Distribution 4 % 37 % Shipping 4 % 3 % Sales Returns, and Allowances (3 )% (3 )% |
SEGMENTS (Tables)
SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | The following tables present information about our reportable segments. December 31, December 31, CURRENT ASSETS: Beverages Segment $ 824,835 $ 800,378 Distribution Segment (146,894 ) 44,809 Corporate and eliminations 105,671 (40,630 ) Total Current Assets $ 783,612 $ 804,557 NON-CURRENT ASSETS: Beverages Segment $ 1,063,074 $ 514,312 Distribution Segment 85,546 40,356 Corporate and eliminations 8,233 10,205 Total Non-Current Assets $ 1,156,853 $ 564,873 CURRENT LIABILITIES: Beverages Segment $ 1,879,305 $ 1,356,599 Distribution Segment 72,576 61,027 Corporate and eliminations 1,424,367 98,020 Total Current Liabilities $ 3,376,248 $ 1,515,646 NON-CURRENT LIABILITIES: Beverages Segment $ 2,616,018 $ 1,685,260 Distribution Segment 192,350 159,500 Corporate and eliminations - - Total Non-Current Liabilities $ 2,808,368 $ 1,844,760 Years Ended 2019 2020 REVENUES, NET OF SALES, RETURNS, AND ALLOWANCES: Beverages Segment $ 1,635,669 $ 718,455 Distribution Segment 83,051 332,371 Corporate and Eliminations (87,067 ) (140,599 ) Total Revenues, Net of Sales, Returns, and Allowances $ 1,631,653 $ 910,227 COST OF REVENUES: Beverages Segment 1,333,135 492,096 Distribution Segment 68,012 249,780 Corporate and Eliminations (87,067 ) (87,699 ) Total Cost of Revenues $ 1,314,080 $ 654,177 OPERATING EXPENSES: Beverages Segment $ 3,372,392 $ 1,729,768 Distribution Segment 150,401 276,248 Corporate and Eliminations 65,815 608,808 Total Operating Expenses $ 3,588,608 $ 2,614,824 OTHER INCOME / (EXPENSE): Beverages Segment $ 1,483,366 $ (45,292 ) Distribution Segment - 2,745 Corporate and Eliminations - (724,274 ) Total Other Income / (Expense) $ (1,483,366 ) $ (766,821 ) NET LOSS: Beverages Segment $ (1,586,492 ) $ (1,548,700 ) Distribution Segment (135,362 ) (190,912 ) Corporate and Eliminations (65,815 ) (1,385,983 ) Total Net Loss $ (1,787,669 ) $ (3,125,595 ) |
CONCENTRATIONS (Tables)
CONCENTRATIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Schedule of accounts receivable | The breakdown of the Company’s accounts receivable is as follows: December 31, December 31, Total Accounts Receivable $ 22,166 $ 119,771 Less: Sales Returns and Allowances 28,707 $ 51,1599 Less: Doubtful Accounts 3,967 $ 5,019 Accounts Receivable, net $ (10,508 ) $ 63,5934 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment, Useful Life | 7 years |
Furniture and Fixtures [Member] | S and S Beverage [Member] | |
Property, Plant and Equipment, Useful Life | 7 years |
Machinery and Equipment [Member] | |
Property, Plant and Equipment, Useful Life | 7 years |
Machinery and Equipment [Member] | S and S Beverage [Member] | |
Property, Plant and Equipment, Useful Life | 7 years |
Vehicles [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Vehicles [Member] | S and S Beverage [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Computer Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Computer Equipment [Member] | Minimum [Member] | S and S Beverage [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Computer Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment, Useful Life | 7 years |
Computer Equipment [Member] | Maximum [Member] | S and S Beverage [Member] | |
Property, Plant and Equipment, Useful Life | 7 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Bad debt | $ 20,099 | $ 1,514,160 |
Allowance for Uncollectible Accounts | 3,967 | 5,019 |
Impairment of goodwill | 61,000 | |
Sales, returns and allowance | 28,707 | 51,159 |
Uncertain tax positions | 0 | 0 |
Advertising costs | 32,700 | 125,000 |
FDIC limit | 250,000 | |
Impairment of long-lived assets | 0 | |
S and S Beverage [Member] | ||
Allowance for Uncollectible Accounts | 24,280 | 0 |
Uncertain tax positions | 0 | 0 |
Advertising costs | 53,597 | 0 |
FDIC limit | 250,000 | |
Impairment of long-lived assets | 0 | 0 |
Accounts Receivable [Member] | ||
Bad debt | $ 32,768 | $ 14,160 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
CBD Energy Water | $ 159,813 | $ 107,719 |
Hemp Energy Drink | 343,119 | 393,021 |
Storm CBD Water | 28,692 | 41,760 |
Merchandise and Apparel | 11,948 | 26,304 |
Unfilled Cans | 38,705 | 86,459 |
Miscellaneous Beverages | 33,225 | |
Other Inventory | 43,362 | 31,659 |
Point of Sale Inventory | 1,640 | |
Total Inventory | 660,504 | 686,922 |
S and S Beverage [Member] | ||
Lemin | 234,885 | 143,686 |
Trays, Cans and Sleeves | 5,912 | 87,064 |
Raw Materials | 24,246 | |
Total Inventory | $ 240,797 | $ 254,996 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Less: Accumulated Depreciation | $ (54,731) | $ (20,656) |
Property, Plant and Equipment, net | 167,872 | 142,406 |
S and S Beverage [Member] | ||
Less: Accumulated Depreciation | (2,311) | (15,843) |
Property, Plant and Equipment, net | 12,200 | 13,168 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment, Gross | 57,879 | 52,450 |
Computer Equipment [Member] | ||
Property, Plant and Equipment, Gross | 16,638 | 14,225 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment, Gross | 79,951 | 50,187 |
Vehicles [Member] | ||
Property, Plant and Equipment, Gross | 68,135 | 46,200 |
Star-up Cost [Member] | S and S Beverage [Member] | ||
Property, Plant and Equipment, Gross | 11 | 11 |
Website Costs [Member] | S and S Beverage [Member] | ||
Property, Plant and Equipment, Gross | $ 14,500 | $ 29,000 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Depreciation | $ 34,075 | $ 56,937 |
S and S Beverage [Member] | ||
Amortization expense | $ 968 | $ 968 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSET (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Beginning of year | ||
Acquired goodwill | 61,000 | |
Impairment | (61,000) | |
End of year |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSET (Details 1) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Trademark | $ 81,750 | $ 81,750 |
Less: Accumulated Amortization | (12,262) | (4,087) |
Intangible assets | $ 69,488 | $ 77,663 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSET (Details 2) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 | $ 8,175 | |
2022 | 8,175 | |
2023 | 8,175 | |
2024 | 8,175 | |
2025 | 8,175 | |
Thereafter | 28,613 | |
Finite-Lived Intangible Assets, Net | $ 69,488 | $ 77,663 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSET (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of goodwill | $ 61,000 | ||
Goodwill | |||
Aquisition description | Gold Leaf acquired 21,000,000 shares, representing all of the issued and outstanding shares of common stock, $0.01 par value per share, of BigSupersearch.com, Inc., a California corporation (“BigSupersearch”), and 14,000,000 shares of its Series A preferred stock, for $61,000, which amount included the purchase price, attorney fees, and transfer fees. |
NOTE RECEIVABLE (Details)
NOTE RECEIVABLE (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Note receivable | $ 1,500,000 | $ 1,500,000 |
Less: Allowance for doubtful account | (1,500,000) | (1,500,000) |
Note receivable, net | ||
Branded Legacy [Member] | ||
Investment |
NOTE RECEIVABLE (Details Narrat
NOTE RECEIVABLE (Details Narrative) - USD ($) | Mar. 06, 2018 | Apr. 14, 2017 | Oct. 10, 2016 | Nov. 26, 2019 | Jun. 30, 2016 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Common stock par value | $ 0.00001 | $ 0.00001 | ||||||
Common stock, shares outstanding | 146,803,392 | 786,308,041 | 763,967,603 | |||||
Investment | ||||||||
Allowance for doubtful account | $ 1,500,000 | $ 1,500,000 | ||||||
Branded Legacy [Member] | ||||||||
Investment | $ 1,648 | |||||||
Stockholders [Member] | ||||||||
Common stock dividends, shares | 53,196,608 | |||||||
First Exchange Agreement [Member] | Branded Legacy [Member] | ||||||||
Remaining investment, shares | 146,803,392 | |||||||
Shares held by company | 2,746,723 | |||||||
Preferred stock, shares converted | 164,803,380 | |||||||
Second Exchange Agreement [Member] | Branded Legacy [Member] | ||||||||
Remaining investment, shares | 2,746,723 | |||||||
Debt instrument, principal amount | $ 1,500,000 | |||||||
Elev8 Hemp [Member] | ||||||||
Ownership percentage | 100.00% | |||||||
Restricted shares issued for acquisition, shares | 5,000,000 | |||||||
Restricted shares issued for acquisition, amount | $ 50,000 | |||||||
Purchase price | $ 50,000 | |||||||
Elev8 Hemp [Member] | Membership Interest Purchase Agreement [Member] | ||||||||
Ownership percentage | 100.00% | |||||||
Business acquisition, shares issued | 200,000,000 | |||||||
Common stock par value | $ 0.00001 |
STOCK BASED COMPENSATION (Detai
STOCK BASED COMPENSATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stock-based compensation expense | $ 478,580 | $ 1,124,488 |
Employee Stock [Member] | ||
Stock-based compensation expense | 476,002 | 290,100 |
NonEmployee Stock [Member] | ||
Stock-based compensation expense | $ 2,578 | $ 834,388 |
STOCK BASED COMPENSATION (Det_2
STOCK BASED COMPENSATION (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Compensation Related Costs [Abstract] | ||
Accrued stock-based compensation | $ 1,386,497 | $ 1,386,500 |
Stock-based compensation granted | $ 10,085,140 | $ 15,862,000 |
Stock-based compensation cancelled or forfeited | 0 | 64,860,346 |
LINE OF CREDIT (Details Narrati
LINE OF CREDIT (Details Narrative) - USD ($) | 24 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | May 05, 2018 | |
Notes to Financial Statements | |||
Revolving line of credit | $ 400,000 | ||
Interest rate | 3.75% | ||
Line of credit expiration date | May 5, 2022 | ||
Line of credit | $ 398,470 | $ 398,470 | |
Accrued interest | $ 32,102 | $ 17,037 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | Dec. 31, 2020USD ($) |
December 31, 2021 | $ 68,000 |
Long-term Debt | 68,000 |
S and S Beverage [Member] | |
December 31, 2021 | |
November 1, 2023 | 798,261 |
Long-term Debt | $ 798,261 |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Apr. 04, 2019 | Dec. 31, 2019 | Aug. 29, 2019 | Feb. 19, 2019 | Oct. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 |
Note payable related party | $ 12,000 | $ 12,000 | $ 12,000 | $ 12,000 | ||||
Proceeds from notes payable | 95,161 | |||||||
Lline of credit | 398,470 | 398,470 | 398,470 | $ 398,470 | ||||
Line of credit expiration date | May 5, 2022 | |||||||
Accrued interest | 17,037 | 32,102 | 17,037 | $ 32,102 | ||||
S and S Beverage [Member] | ||||||||
Note payable related party | 78,760 | 801,761 | 78,760 | 801,761 | ||||
S and S Beverage [Member] | Note Payable [Member] | ||||||||
Note payable related party | $ 200,000 | 200,000 | ||||||
Interest rate | 8.00% | |||||||
Periodic payment | $ 9,045 | |||||||
Proceeds from notes payable | $ 35,000 | |||||||
Maturity date | Nov. 1, 2023 | |||||||
Accrued interest | 0 | $ 11,776 | 0 | 11,776 | ||||
Notes payable | 78,760 | 113,761 | 78,760 | 113,761 | ||||
S and S Beverage [Member] | Note Payable 1 [Member] | ||||||||
Note payable related party | $ 612,700 | 612,700 | ||||||
Interest rate | 8.00% | |||||||
Maturity date | Nov. 1, 2023 | |||||||
Notes payable | 200,000 | $ 200,000 | 200,000 | 200,000 | ||||
Loan forgiveness related party | 412,700 | |||||||
S and S Beverage [Member] | Note Payable 2 [Member] | ||||||||
Note payable related party | $ 300,000 | 300,000 | ||||||
Interest rate | 2.00% | |||||||
Accrued interest | $ 9,953 | 9,953 | ||||||
Notes payable | 300,000 | 300,000 | ||||||
S and S Beverage [Member] | Note Payable 3 [Member] | ||||||||
Note payable related party | $ 200,000 | 200,000 | ||||||
Interest rate | 0.00% | |||||||
Accrued interest | $ 0 | 0 | ||||||
Notes payable | 198,000 | 198,000 | ||||||
S and S Beverage [Member] | Note Payable 4 [Member] | ||||||||
Note payable related party | $ 25,000 | 25,000 | ||||||
Interest rate | 8.00% | |||||||
Maturity date | Nov. 1, 2023 | |||||||
Kona Gold, LLC | ||||||||
Principal amount | $ 20,000 | |||||||
Note payable related party | 14,500 | $ 8,500 | 14,500 | 8,500 | ||||
Periodic payment | $ 500 | |||||||
Maturity date | Apr. 30, 2021 | |||||||
Line of credit from related party | $ 1,500,000 | |||||||
Lline of credit | 922,151 | 1,369,651 | 922,151 | 1,369,651 | ||||
Line of credit expiration date | Apr. 4, 2021 | |||||||
Accrued interest | 0 | 36,397 | 0 | 36,397 | ||||
Line of credit interest rate | 3.75% | |||||||
Gold Leaf, LLC | ||||||||
Principal amount | $ 70,000 | |||||||
Note payable related party | 65,500 | 59,500 | 65,500 | 59,500 | ||||
Periodic payment | $ 500 | |||||||
Maturity date | Mar. 31, 2021 | |||||||
Line of credit from related party | $ 200,000 | |||||||
Lline of credit | 100,000 | 125,500 | 100,000 | 125,500 | ||||
Line of credit expiration date | Aug. 29, 2021 | |||||||
Accrued interest | $ 0 | $ 3,545 | $ 0 | $ 3,545 | ||||
Line of credit interest rate | 3.75% |
2020 SECURITIES PURCHASE AGRE_3
2020 SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND 2020 WARRANT (Details) | 12 Months Ended |
Dec. 31, 2020USD ($)$ / shares | |
Notes to Financial Statements | |
Stock Price | $ 0.0345 |
Exercise Price | $ 0.0332 |
Expected Life | 1 year |
Volatility | 105.00% |
Dividend Yield | 0.00% |
Risk-Free Interest Rate | 2.30% |
Fair Value | $ | $ 361,152 |
2020 SECURITIES PURCHASE AGRE_4
2020 SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND 2020 WARRANT (Details 1) - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Derivative liability | $ 361,152 | $ 217,806 | $ 148,628 | |
Fair Value, Inputs, Level 1 [Member] | ||||
Derivative liability | ||||
Fair Value, Inputs, Level 2 [Member] | ||||
Derivative liability | 361,152 | |||
Fair Value, Inputs, Level 3 [Member] | ||||
Derivative liability | ||||
Convertible Promissory Notes [Member] | ||||
Derivative liability | 361,152 | |||
Convertible Promissory Notes [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Derivative liability | ||||
Convertible Promissory Notes [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Derivative liability | 361,152 | |||
Convertible Promissory Notes [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Derivative liability |
2020 SECURITIES PURCHASE AGRE_5
2020 SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND 2020 WARRANT (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | |
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | |
Notes to Financial Statements | |||
Fair value at beginning | $ 217,806 | $ 148,628 | |
Change in fair value of embedded conversion features of debenture included in earnings | 69,051 | (39,725) | |
Embedded conversion option liability recorded in connection with the issuance of debenture | 212,397 | 108,903 | 148,628 |
Fair value at end | $ 361,152 | $ 217,806 | $ 148,628 |
2020 SECURITIES PURCHASE AGRE_6
2020 SECURITIES PURCHASE AGREEMENT, DERIVATIVE LIABILITIES, AND 2020 WARRANT (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Dec. 23, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Convertible debt | $ 900,000 | ||
Number of warrants granted | 20,000,000 | ||
Exercise price | $ 0.05 | ||
Warrant exercisable | 20,000,000 | ||
Securities Purchase Agreement [Member] | First 2020 Debenture [Member] | |||
Conversion price | $ 0.05 | ||
Purchase Price | $ 250,000 | ||
Origination fees | 15,000 | ||
Original issue discount | 10,000 | ||
Structuring fee | 5,000 | ||
Convertible debt | 250,000 | ||
Number of shares issued | 8,255,438 | ||
Securities Purchase Agreement [Member] | First 2020 Debenture [Member] | Principal [Member] | |||
Conversion of Stock, Amount Converted | $ 100,000 | ||
Securities Purchase Agreement [Member] | First 2020 Debenture [Member] | Accrued Interest [Member] | |||
Conversion of Stock, Amount Converted | $ 12,274 | ||
Securities Purchase Agreement 2 [Member] | Second 2020 Debenture [Member] | |||
Purchase Price | 250,000 | ||
Origination fees | 10,000 | ||
Original issue discount | 10,000 | ||
Convertible debt | 250,000 | ||
Securities Purchase Agreement 3 [Member] | Third 2020 Debenture [Member] | |||
Purchase Price | 500,000 | ||
Origination fees | 20,000 | ||
Original issue discount | 10,000 | ||
Convertible debt | $ 500,000 |
PAYCHECK PROTECTION PROGRAM L_2
PAYCHECK PROTECTION PROGRAM LOAN (Details Narrative) - USD ($) | May 04, 2020 | May 31, 2020 |
Paycheck Protection Promissory Note [Member] | ||
Principal amount | $ 95,161 | |
Interest rate | 1.00% | |
Maturity date | May 6, 2022 | |
US Small Business Administration [Member] | ||
Proceeds from loan | $ 7,000 |
EQUITY TRANSACTIONS (Details Na
EQUITY TRANSACTIONS (Details Narrative) - USD ($) | Jul. 15, 2019 | Feb. 11, 2019 | Dec. 23, 2020 | Jul. 30, 2020 | Jul. 30, 2019 | Apr. 17, 2019 | Mar. 18, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 08, 2020 | Jul. 07, 2020 | Apr. 14, 2017 |
Preferred stock, shares par value | $ 0.00001 | $ 0.00001 | ||||||||||
Preferred stock, shares issued | 988,140 | 4,988,000 | ||||||||||
Preferred stock, shares outstanding | 988,140 | 4,988,000 | ||||||||||
Common stock, shares par value | $ 0.00001 | $ 0.00001 | ||||||||||
Common stock, shares authorized | 2,500,000,000 | 900,000,000 | ||||||||||
Common stock, shares issued | 786,308,041 | 763,967,603 | ||||||||||
Common stock, shares outstanding | 786,308,041 | 763,967,603 | 146,803,392 | |||||||||
Number of restricted common stock issued, shares | 0 | 64,860,346 | ||||||||||
Shares issued for subscription, value | $ (476,002) | $ (290,100) | ||||||||||
Shares issued for services, value | $ 800,000 | |||||||||||
Securities Purchase Agreement [Member] | ||||||||||||
Fair market value of share | $ 0.0136 | |||||||||||
Securities Purchase Agreement [Member] | First 2020 Debenture [Member] | ||||||||||||
Number of shares converted | 8,255,438 | |||||||||||
Securities Purchase Agreement [Member] | First 2020 Debenture [Member] | Principal [Member] | ||||||||||||
Debt conversion, converted instrument, amount | $ 100,000 | |||||||||||
Securities Purchase Agreement [Member] | First 2020 Debenture [Member] | Accrued Interest [Member] | ||||||||||||
Debt conversion, converted instrument, amount | $ 12,274 | |||||||||||
Matthew Nicoletti [Member] | ||||||||||||
Number of shares converted | 106,000,000 | 55,000,000 | ||||||||||
Number of stock issued | 106,000 | 55,000 | ||||||||||
Fair market value of share | $ 0.1081 | $ 0.0840 | ||||||||||
Value of stock issued | $ 11,458,600 | $ 4,620,000 | ||||||||||
Quantum [Member] | ||||||||||||
Number of shares converted | 52,000,000 | 58,000,000 | ||||||||||
Number of stock issued | 52,000 | 58,000 | ||||||||||
Fair market value of share | $ 0.076 | $ 0.0785 | ||||||||||
Value of stock issued | $ 3,952,000 | |||||||||||
William Jeffrey Outlaw [Member] | ||||||||||||
Fair market value of share | $ 0.111 | |||||||||||
Shares issued for services, shares | 10,000,000 | |||||||||||
Shares issued for services, value | $ 800,000 | |||||||||||
Series A Preferred Stock [Member] | ||||||||||||
Preferred stock, shares par value | $ 0.00001 | $ 0.00001 | ||||||||||
Preferred stock, shares authorized | 4,000,000 | 4,000,000 | ||||||||||
Preferred stock, shares issued | 0 | 4,000,000 | ||||||||||
Preferred stock, shares outstanding | 0 | 4,000,000 | ||||||||||
Series A Preferred Stock [Member] | Robert Clark and Joseph Thornburg [Member] | ||||||||||||
Number of shares converted | 4,000,000 | |||||||||||
Fair market value of share | $ 0.0346 | |||||||||||
Debt conversion, converted instrument, shares issued | 4,000,000 | |||||||||||
Series B Preferred Stock [Member] | ||||||||||||
Preferred stock, shares par value | $ 0.00001 | $ 0.00001 | ||||||||||
Preferred stock, shares authorized | 1,200,000 | 1,200,000 | ||||||||||
Preferred stock, shares issued | 488,000 | 488,000 | ||||||||||
Preferred stock, shares outstanding | 488,000 | 488,000 | ||||||||||
Number of shares converted | 1,000 | |||||||||||
Series C Preferred Stock [Member] | ||||||||||||
Preferred stock, shares par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||||
Preferred stock, shares authorized | 250 | 3,300,000 | 250 | 3,300,000 | ||||||||
Preferred stock, shares issued | 140 | 0 | ||||||||||
Preferred stock, shares outstanding | 140 | 0 | ||||||||||
Number of shares converted | 1,000 | 1,000 | ||||||||||
Series D Preferred Stock [Member] | ||||||||||||
Preferred stock, shares par value | $ 0.00001 | $ 0.00001 | ||||||||||
Preferred stock, shares authorized | 500,000 | 500,000 | ||||||||||
Preferred stock, shares issued | 500,000 | 500,000 | ||||||||||
Preferred stock, shares outstanding | 500,000 | 500,000 | ||||||||||
Number of shares converted | 1,000 | 1,000 | ||||||||||
S and S Beverage [Member] | ||||||||||||
Common stock, shares par value | $ 30.05 | $ 30.05 | ||||||||||
Common stock, shares authorized | 10,000 | 10,000 | ||||||||||
Common stock, shares issued | 10,000 | 10,000 | ||||||||||
Common stock, shares outstanding | 10,000 | 10,000 |
EMPLOYEES (Details Narrative)
EMPLOYEES (Details Narrative) - USD ($) | Apr. 03, 2020 | Dec. 02, 2016 | Mar. 02, 2016 | Jan. 27, 2020 | Jul. 31, 2019 | Jul. 30, 2019 | May 23, 2019 | Apr. 30, 2019 | Dec. 29, 2017 | May 16, 2016 | Apr. 19, 2016 | Oct. 28, 2015 | Dec. 31, 2020 | Jul. 08, 2020 | Jul. 07, 2020 | Dec. 31, 2019 | Jan. 16, 2019 | Sep. 07, 2018 | Jan. 24, 2018 | Apr. 14, 2017 | Dec. 31, 2016 | Mar. 30, 2016 | Mar. 03, 2016 |
Common stock, shares issued | 786,308,041 | 763,967,603 | |||||||||||||||||||||
Common stock value | $ 7,863 | $ 7,640 | |||||||||||||||||||||
Preferred stock, shares par value | $ 0.00001 | $ 0.00001 | |||||||||||||||||||||
Preferred stock, shares issued | 988,140 | 4,988,000 | |||||||||||||||||||||
Common stock shares outstanding | 786,308,041 | 763,967,603 | 146,803,392 | ||||||||||||||||||||
Accrued compensation | $ 257,500 | ||||||||||||||||||||||
Employment Agreement [Member] | |||||||||||||||||||||||
Stock issued | 30,000,000 | ||||||||||||||||||||||
Fair market value of share | $ 0.015 | ||||||||||||||||||||||
Clark Employment Agreement [Member] | |||||||||||||||||||||||
Stock issued | 40,000,000 | 50,000,000 | |||||||||||||||||||||
Fair market value of share | $ 0.0250 | $ 0.0036 | $ 0.0025 | ||||||||||||||||||||
Number of common stock cancelled | 50,000,000 | 40,000,000 | |||||||||||||||||||||
Number of common stock cancelled, value | $ 180,000 | $ 1,000,000 | |||||||||||||||||||||
Accrued unissued shares | 80,000,000 | ||||||||||||||||||||||
Amended Clark Employment Agreement [Member] | |||||||||||||||||||||||
Common stock value | $ 1,000,000 | ||||||||||||||||||||||
Fair market value of share | $ 0.0250 | ||||||||||||||||||||||
Accrued compensation | $ 1,000,000 | ||||||||||||||||||||||
Series C Preferred Stock [Member] | |||||||||||||||||||||||
Preferred stock, shares par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||||||||||||||||
Preferred stock, shares issued | 140 | 0 | |||||||||||||||||||||
Preferred stock value | $ 0 | $ 0 | |||||||||||||||||||||
Series D Preferred Stock [Member] | |||||||||||||||||||||||
Preferred stock, shares par value | $ 0.00001 | $ 0.00001 | |||||||||||||||||||||
Preferred stock, shares issued | 500,000 | 500,000 | |||||||||||||||||||||
Preferred stock value | $ 5 | $ 5 | |||||||||||||||||||||
Series D Preferred Stock [Member] | Clark Employment Agreement [Member] | |||||||||||||||||||||||
Preferred stock, shares par value | $ 0.0158 | ||||||||||||||||||||||
Preferred stock, shares issued | 500,000 | ||||||||||||||||||||||
Preferred stock value | $ 7,900 | ||||||||||||||||||||||
Series B Preferred Stock [Member] | |||||||||||||||||||||||
Preferred stock, shares par value | $ 0.00001 | $ 0.00001 | |||||||||||||||||||||
Preferred stock, shares issued | 488,000 | 488,000 | |||||||||||||||||||||
Preferred stock value | $ 5 | $ 5 | |||||||||||||||||||||
Series B Preferred Stock [Member] | Clark Employment Agreement [Member] | |||||||||||||||||||||||
Preferred stock, shares par value | $ 0.06 | ||||||||||||||||||||||
Preferred stock, shares issued | 650,000 | ||||||||||||||||||||||
Number of common stock cancelled | 6,500 | ||||||||||||||||||||||
Preferred stock value | $ 6,500 | ||||||||||||||||||||||
Clark [Member] | |||||||||||||||||||||||
Stock issued | 20,000,000 | ||||||||||||||||||||||
Fair market value of share | $ 0.014 | ||||||||||||||||||||||
Value of stock issued | $ 280,000 | ||||||||||||||||||||||
Number of common stock cancelled, value | $ 6,500 | ||||||||||||||||||||||
Shares forfited | 14,860,346 | ||||||||||||||||||||||
Paul O Renick [Member] | |||||||||||||||||||||||
Stock issued | 5,000,000 | ||||||||||||||||||||||
Fair market value of share | $ 0.0315 | ||||||||||||||||||||||
Value of stock issued | $ 157,500 | ||||||||||||||||||||||
Lori Radcliffe[Member] | |||||||||||||||||||||||
Stock issued | 5,000,000 | ||||||||||||||||||||||
Fair market value of share | $ 0.0637 | ||||||||||||||||||||||
Value of stock issued | $ 318,500 | ||||||||||||||||||||||
Robert Clark [Member] | |||||||||||||||||||||||
Common stock, shares issued | 200,000,000 | ||||||||||||||||||||||
Defer receipt, shares | 80,000,000 | ||||||||||||||||||||||
Shares reserve for issuance | 120,000,000 | 170,000,000 | |||||||||||||||||||||
Common stock shares outstanding | 17,100,000 | ||||||||||||||||||||||
Robert Clark [Member] | Series C Preferred Stock [Member] | |||||||||||||||||||||||
Preferred stock, shares issued | 140 | ||||||||||||||||||||||
Ryan Medico [Member] | Executive Employment Agreement [Member] | |||||||||||||||||||||||
Common stock value | $ 280,000 | ||||||||||||||||||||||
Shares reserve for issuance | 20,000,000 | ||||||||||||||||||||||
Fair market value of share | $ 0.014 | ||||||||||||||||||||||
Number of common stock cancelled | 14,860,346 | ||||||||||||||||||||||
Increase in additional paid-in capital | $ 149 | ||||||||||||||||||||||
Christopher Selinger [Member] | Selinger Employment Agreement [Member] | |||||||||||||||||||||||
Common stock, shares issued | 10,000,000 | ||||||||||||||||||||||
Common stock value | $ 136,000 | ||||||||||||||||||||||
Fair market value of share | $ 0.0136 | ||||||||||||||||||||||
Matthew Crystal [Member] | |||||||||||||||||||||||
Common stock, shares issued | 500,000 | ||||||||||||||||||||||
Common stock value | $ 6,800 | ||||||||||||||||||||||
Fair market value of share | $ 0.0136 | ||||||||||||||||||||||
Mr. Webb [Member] | |||||||||||||||||||||||
Common stock, shares issued | 5,000,000 | ||||||||||||||||||||||
Common stock value | $ 277,000 | ||||||||||||||||||||||
Fair market value of share | $ 0.0554 | ||||||||||||||||||||||
Jazmin Gonzalez and Michelle Motta [Member] | |||||||||||||||||||||||
Common stock, shares issued | 100,000 | ||||||||||||||||||||||
Common stock value | $ 131,000 | ||||||||||||||||||||||
Fair market value of share | $ 0.131 | ||||||||||||||||||||||
Number of common stock cancelled | 100,000 | ||||||||||||||||||||||
Reduction in compensation expense | $ 13,100 |
SPONSORSHIPS (Details Narrative
SPONSORSHIPS (Details Narrative) - USD ($) | Apr. 03, 2020 | May 23, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Number of restricted common stock issued | 0 | 64,860,346 | ||
Ryan Dodd [Member] | ||||
Sponsorship fees | $ 1,250 | |||
Number of restricted common stock issued | 85,000 | 262,500 | ||
Fair market value of share | $ 0.0315 | $ 0.131 | ||
Payment for sponsorship | $ 2,578 | $ 34,388 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Lease expiration term | 5 years | |
Base rent | $ 4,114 | |
Operating lease expense | $ 58,069 | |
Florida | ||
Lease commence date | Jun. 1, 2020 | |
Lease Expiration Date | May 31, 2023 | |
Base rent | $ 3,994 | |
Operating lease expense | $ 0 |
LEASE LIABILITIES (Details)
LEASE LIABILITIES (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Right-of-use asset | $ 765,052 | $ 378,013 |
Amortization of right-of-use asset | (120,742) | (39,709) |
Right-of-use asset, net | 912,993 | 338,304 |
Operating lease liability | ||
Current portion of long-term lease | 149,407 | 71,032 |
Long-term lease | 763,586 | 286,139 |
Total operating lease liability | $ 912,993 | $ 357,171 |
LEASE LIABILITIES (Details 1)
LEASE LIABILITIES (Details 1) | Dec. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 149,407 |
2022 | 154,416 |
2023 | 160,631 |
2024 | 167,587 |
2025 | 167,537 |
2026 and thereafter | 113,415 |
Operating Leases, Future Minimum Payments Due | $ 912,993 |
LEASE LIABILITIES (Details Narr
LEASE LIABILITIES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Mar. 17, 2020 | May 22, 2019 | Dec. 31, 2020 | |
Operating lease expenses | $ 58,069 | ||
Gold Leaf, LLC | |||
Operating lease expenses | $ 13,429 | 148,895 | |
Deposits | $ 6,500 | ||
Kona [Member] | |||
Operating lease expenses | $ 676 | $ 5,522 |
REVENUE (Details)
REVENUE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Net Revenues | $ 910,227 | $ 1,631,653 |
Change in revenue, percentage | (44.00%) | |
Distributors [Member] | ||
Net Revenues | $ 438,745 | 1,315,007 |
Change in revenue, percentage | (67.00%) | |
Amazon [Member] | ||
Net Revenues | $ 87,965 | 133,787 |
Change in revenue, percentage | (34.00%) | |
Online Sales [Member] | ||
Net Revenues | $ 55,190 | 93,124 |
Change in revenue, percentage | (41.00%) | |
Gold Leaf Distribution [Member] | ||
Net Revenues | $ 332,371 | 70,555 |
Change in revenue, percentage | 371.00% | |
Shipping [Member] | ||
Net Revenues | $ 24,663 | 70,339 |
Change in revenue, percentage | (65.00%) | |
Sales Returns and Allowances [Member] | ||
Net Revenues | $ (28,707) | $ (51,159) |
Change in revenue, percentage | (44.00%) |
REVENUE (Details 1)
REVENUE (Details 1) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Distributors [Member] | ||
Revenue, percentage | 50.00% | 81.00% |
Amazon [Member] | ||
Revenue, percentage | 16.00% | 8.00% |
Online Sales [Member] | ||
Revenue, percentage | 5.00% | 6.00% |
Gold Leaf Distribution [Member] | ||
Revenue, percentage | 31.00% | 4.00% |
Shipping [Member] | ||
Revenue, percentage | 3.00% | 4.00% |
Sales Returns and Allowances [Member] | ||
Revenue, percentage | (4.00%) | (3.00%) |
SEGMENTS (Details)
SEGMENTS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Current assets | $ 783,612 | $ 804,557 |
Non-Current assets | 1,156,853 | 564,873 |
Current liabilities | 3,386,756 | 1,515,646 |
Non-Current liabilities | 2,808,368 | 1,844,760 |
Revenues, net of sales, returns, and allowances: | 910,227 | 1,631,653 |
Cost of Revenues | 654,177 | 1,314,080 |
Operating Expenses | 2,614,824 | 3,588,608 |
Other Income / (Expense) | (766,821) | (1,483,366) |
Net Income (Loss) | (3,125,595) | (1,787,669) |
Beverages Segment [Member] | ||
Current assets | 824,835 | 800,378 |
Non-Current assets | 1,063,074 | 514,312 |
Current liabilities | 1,879,305 | 1,356,599 |
Non-Current liabilities | 2,616,018 | 1,685,260 |
Revenues, net of sales, returns, and allowances: | 718,455 | 1,635,669 |
Cost of Revenues | 492,096 | 1,333,135 |
Operating Expenses | 1,729,768 | 3,372,392 |
Other Income / (Expense) | (45,292) | 1,483,366 |
Net Income (Loss) | (1,548,700) | (1,586,492) |
Distribution Segment [Member] | ||
Current assets | (146,894) | 44,809 |
Non-Current assets | 85,546 | 40,356 |
Current liabilities | 72,576 | 61,027 |
Non-Current liabilities | 192,350 | 159,500 |
Revenues, net of sales, returns, and allowances: | 332,371 | 83,051 |
Cost of Revenues | 249,780 | 68,012 |
Operating Expenses | 276,248 | 150,401 |
Other Income / (Expense) | 2,745 | |
Net Income (Loss) | (190,912) | (135,362) |
Corporate and Eliminations [Member] | ||
Current assets | 105,671 | (40,630) |
Non-Current assets | 8,233 | 10,205 |
Current liabilities | 1,424,367 | 98,020 |
Non-Current liabilities | ||
Revenues, net of sales, returns, and allowances: | (140,599) | (87,067) |
Cost of Revenues | (87,699) | (87,067) |
Operating Expenses | 608,808 | 65,815 |
Other Income / (Expense) | (724,274) | |
Net Income (Loss) | $ (1,385,983) | $ (65,815) |
SEGMENTS (Details Narrative)
SEGMENTS (Details Narrative) | 12 Months Ended |
Dec. 31, 2020Integer | |
Segment Reporting [Abstract] | |
Number of reportable segment | 2 |
SETTLEMENT (Details Narrative)
SETTLEMENT (Details Narrative) - USD ($) | Jun. 13, 2019 | Jun. 17, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
HighDrate trademark [Member] | ||||
Finite lived intangible assets | $ 81,750 | $ 81,750 | ||
Tre Holdco Inc [Member] | ||||
Shares issued for settlement, value | $ 59,250 | |||
Settlement Agreement [Member] | Tre Holdco Inc [Member] | ||||
Payment for settlement | $ 22,500 | |||
Shares issued for settlement, shares | 500,000 | |||
Fair market value of share | $ 0.1185 | |||
Shares issued for settlement, value | $ 59,245 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net Income (Loss) | $ (3,125,595) | $ (1,787,669) | |
Net cash provided by (used in) operating activities | (1,370,123) | (1,230,347) | |
Stockholders' deficit | (4,244,151) | (1,990,976) | $ (1,200,545) |
S and S Beverage [Member] | |||
Net Income (Loss) | (628,469) | (774,792) | |
Net cash provided by (used in) operating activities | (584,438) | (486,613) | |
Stockholders' deficit | $ (656,052) | $ (52,583) |
CONCENTRATIONS (Details)
CONCENTRATIONS (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Risks and Uncertainties [Abstract] | ||
Total Accounts Receivable | $ 22,166 | $ 119,771 |
Less: Sales Returns and Allowances | 28,707 | 51,159 |
Less: Doubtful Accounts | 3,967 | 5,019 |
Accounts Receivable, net | $ (10,508) | $ 63,593 |
CONCENTRATIONS (Details Narrati
CONCENTRATIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts receivable | $ (10,508) | $ 63,593 |
Net Revenues | 910,227 | 1,631,653 |
Total Accounts Receivable | 22,166 | 119,771 |
Less: Sales Returns and Allowances | 28,707 | 51,159 |
Less: Doubtful Accounts | 3,967 | 5,019 |
Allowance for Uncollectible Accounts | 3,967 | 5,019 |
S and S Beverage [Member] | ||
Net Revenues | 342,972 | 865,261 |
Total Accounts Receivable | 9,438 | |
Less: Doubtful Accounts | 24,280 | 0 |
Allowance for Uncollectible Accounts | $ 24,280 | $ 0 |
Accounts Receivable [Member] | ||
Concentration Risk, Percentage | 76.00% | |
Accounts receivable | $ 22,166 | |
Accounts Receivable [Member] | One Customer [Member] | ||
Concentration Risk, Percentage | 16.00% | |
Accounts receivable | $ 19,471 | |
Accounts Receivable [Member] | First Customers [Member] | ||
Concentration Risk, Percentage | 26.00% | |
Accounts Receivable [Member] | SecondCustomers [Member] | ||
Concentration Risk, Percentage | 22.00% | |
Accounts Receivable [Member] | SecondCustomers [Member] | S and S Beverage [Member] | ||
Concentration Risk, Percentage | 33.00% | |
Net Revenues | $ 272,000 | |
Accounts Receivable [Member] | ThirdCustomers [Member] | ||
Concentration Risk, Percentage | 14.00% | |
Accounts Receivable [Member] | ThirdCustomers [Member] | S and S Beverage [Member] | ||
Concentration Risk, Percentage | 77.00% | |
Net Revenues | $ 255,300 | |
Accounts Receivable [Member] | Fourth Customers [Member] | ||
Concentration Risk, Percentage | 14.00% | |
Accounts Receivable [Member] | Fourth Customers [Member] | S and S Beverage [Member] | ||
Concentration Risk, Percentage | 100.00% | |
Accounts receivable | $ 33,718 | |
Allowance for Uncollectible Accounts | $ 24,280 | |
Accounts Receivable [Member] | Six Customers [Member] | S and S Beverage [Member] | ||
Concentration Risk, Percentage | 78.00% | |
Net Revenues | $ 41,669 | |
Purchase [Member] | Two Vendors [Member] | ||
Concentration Risk, Percentage | 86.00% | |
Purchase [Member] | Three Vendors [Member] | S and S Beverage [Member] | ||
Concentration Risk, Percentage | 100.00% | 89.00% |
Inventory Purchased | $ 4,365 | $ 36,313 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Mar. 10, 2021 | Feb. 01, 2021 | Jan. 12, 2021 | May 04, 2020 | Feb. 28, 2021 | Feb. 19, 2021 | Jan. 25, 2021 | Apr. 15, 2021 |
Paycheck Protection Promissory Note [Member] | ||||||||
Principal amount | $ 95,161 | |||||||
Interest rate | 1.00% | |||||||
Maturity date | May 6, 2022 | |||||||
Subsequent Event [Member] | ||||||||
Acquisition Payments | $ 1,050,000 | |||||||
Subsequent Event [Member] | K & L Beverage [Member] | ||||||||
Common Stock issued | 6,300,000 | |||||||
Subsequent Event [Member] | Legacy S and S Beverage [Member] | ||||||||
Common Stock issued | 9,000,000 | |||||||
Subsequent Event [Member] | William J. Stineman [Member] | ||||||||
Common Stock issued | 1,980,000 | |||||||
Subsequent Event [Member] | William F. Stineman [Member] | ||||||||
Common Stock issued | 360,000 | |||||||
Subsequent Event [Member] | Gary Kramer [Member] | ||||||||
Common Stock issued | 270,000 | |||||||
Subsequent Event [Member] | Steven Sirus [Member] | ||||||||
Common Stock issued | 90,000 | |||||||
Subsequent Event [Member] | S and S Beverage [Member] | ||||||||
Acquisition Payments | $ 1,050,000 | |||||||
Subsequent Event [Member] | Second 2020 Debenture [Member] | ||||||||
Number of shares issued | 7,252,634 | 5,183,613 | ||||||
Conversion price | $ 0.0208 | $ 0.0213 | ||||||
Subsequent Event [Member] | Second 2020 Debenture [Member] | Principal [Member] | ||||||||
Conversion of Stock, Amount Converted | $ 150,000 | $ 100,000 | ||||||
Subsequent Event [Member] | Second 2020 Debenture [Member] | Accrued Interest [Member] | ||||||||
Conversion of Stock, Amount Converted | $ 855 | $ 10,411 | ||||||
Subsequent Event [Member] | First 2021 Debenture [Member] | ||||||||
Principal amount | $ 900,000 | |||||||
Origination fees | 41,000 | |||||||
Original issue discount | 36,000 | |||||||
Structuring fee | 5,000 | |||||||
Subsequent Event [Member] | Second 2021 Debenture [Member] | ||||||||
Principal amount | 600,000 | |||||||
Original issue discount | $ 24,000 | |||||||
Subsequent Event [Member] | 2021 Debentures [Member] | ||||||||
Number of shares issued | 154,958,678 | |||||||
Subsequent Event [Member] | Paycheck Protection Promissory Note [Member] | ||||||||
Principal amount | $ 117,487 | |||||||
Interest rate | 1.00% | |||||||
Maturity date | Feb. 1, 2026 | |||||||
Subsequent Event [Member] | Third 2020 Debenture [Member] | ||||||||
Conversion price | $ 0.0185 | |||||||
Subsequent Event [Member] | Third 2020 Debenture [Member] | Principal [Member] | ||||||||
Conversion of Stock, Amount Converted | $ 200,000 | |||||||
Subsequent Event [Member] | Third 2020 Debenture [Member] | Accrued Interest [Member] | ||||||||
Conversion of Stock, Amount Converted | $ 1,425 | |||||||
Subsequent Event [Member] | First 2020 Debenture [Member] | ||||||||
Number of shares issued | 7,094,732 | |||||||
Conversion price | $ 0.0213 | |||||||
Subsequent Event [Member] | First 2020 Debenture [Member] | Principal [Member] | ||||||||
Conversion of Stock, Amount Converted | $ 150,000 | |||||||
Subsequent Event [Member] | First 2020 Debenture [Member] | Accrued Interest [Member] | ||||||||
Conversion of Stock, Amount Converted | $ 1,118 |