Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 13, 2020 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | AgEagle Aerial Systems Inc. | |
Entity Central Index Key | 0000008504 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 001-36492 | |
Entity Incorporation, State Country Code | NV | |
Entity Common Stock, Shares Outstanding | 57,980,377 |
CONDENSED INTERIM CONSOLIDATED
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash | $ 24,693,417 | $ 717,997 |
Accounts receivable | 0 | 65,833 |
Inventories, net | 158,389 | 221,167 |
Prepaid and other current assets | 120,537 | 124,163 |
Total current assets | 24,972,343 | 1,129,160 |
Property and equipment, net | 93,658 | 37,776 |
Intangible assets, net | 405,865 | 520,573 |
Goodwill | 3,108,000 | 3,108,000 |
Total assets | 28,579,866 | 4,795,509 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Accounts payable | 158,353 | 57,432 |
Accrued expenses | 43,468 | 36,416 |
Accrued dividends | 0 | 163,555 |
Contract liabilities | 127,791 | 264,472 |
Promissory note | 107,439 | 0 |
Total current liabilities | 437,051 | 521,875 |
Total liabilities | 437,051 | 521,875 |
STOCKHOLDERS' EQUITY: | ||
Common stock, $0.001 par value, 250,000,000 shares authorized, 57,881,002 and 15,424,394 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 57,881 | 15,424 |
Additional paid-in capital | 46,335,395 | 12,456,989 |
Accumulated deficit | (18,250,461) | (8,198,785) |
Total stockholders' equity | 28,142,815 | 4,273,634 |
Total liabilities and stockholders' equity | 28,579,866 | 4,795,509 |
Series C Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock, Value | 0 | 4 |
Series D Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock, Value | $ 0 | $ 2 |
CONDENSED INTERIM CONSOLIDATE_2
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 57,881,002 | 15,424,394 |
Common stock, shares outstanding | 57,881,002 | 15,424,394 |
Series C Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 0 | 3,501 |
Preferred Stock, shares outstanding | 0 | 3,501 |
Series D Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000 | 2,000 |
Preferred stock, shares issued | 0 | 2,000 |
Preferred Stock, shares outstanding | 0 | 2,000 |
CONDENSED INTERIM CONSOLIDATE_3
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 750,325 | $ 41,616 | $ 1,157,930 | $ 107,785 |
Cost of sales | 430,683 | 32,728 | 620,196 | 85,875 |
Gross Profit | 319,642 | 8,888 | 537,734 | 21,910 |
Operating Expenses: | ||||
Selling | 16,242 | 23,302 | 32,751 | 52,108 |
General and administrative | 626,605 | 396,432 | 1,782,926 | 1,305,221 |
Professional fees | 254,532 | 152,192 | 958,436 | 531,885 |
Total operating expenses | 897,379 | 571,926 | 2,774,113 | 1,889,214 |
Loss from operations | (577,737) | (563,038) | (2,236,379) | (1,867,304) |
Other Expenses: | ||||
Loss on disposal of property and equipment | (594) | 0 | (594) | 0 |
Interest expense | (275) | 0 | (275) | (501) |
Total Other Expenses | (869) | 0 | (869) | (501) |
Loss Before Income Taxes | (578,606) | (563,038) | (2,237,248) | (1,867,805) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net Loss | (578,606) | (563,038) | (2,237,248) | (1,867,805) |
Deemed dividend on Series C Preferred stock and Series D warrants | 0 | 0 | (4,050,838) | 0 |
Deemed dividend on redemption of Series D Preferred stock | 0 | 0 | (3,763,591) | 0 |
Deemed dividend on issuance and repurchase of Series E Preferred stock | 0 | 0 | (1,227,120) | 0 |
Series D Preferred stock dividends | 0 | (40,889) | (69,778) | (121,333) |
Net Loss Available to Common Stockholders | $ (578,606) | $ (603,927) | $ (11,348,575) | $ (1,989,138) |
Net Loss Per Share - Basic and Diluted | $ (0.01) | $ (0.04) | $ (0.33) | $ (0.14) |
Weighted Average Number of Shares Outstanding During the Period - Basic and Diluted | 55,380,250 | 15,174,394 | 34,722,816 | 14,523,838 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Preferred Stock Series C | Preferred Stock Series D | Preferred Stock Series E | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance, beginning at Dec. 31, 2018 | $ 5 | $ 2 | $ 12,549 | $ 12,171,274 | $ (5,676,091) | $ 6,507,739 | |
Balance, beginning (shares) at Dec. 31, 2018 | 4,662 | 2,000 | 12,549,394 | ||||
Conversion of Series C | $ (1) | $ 1,900 | (1,899) | ||||
Conversion of Series C (shares) | (1,026) | 1,900,000 | |||||
Dividend on Series D Preferred Stock | (40,000) | (40,000) | |||||
Stock-based compensation expense | 60,920 | 60,920 | |||||
Net loss | (565,465) | (565,465) | |||||
Balance, ending at Mar. 31, 2019 | $ 4 | $ 2 | $ 14,449 | 12,190,195 | (6,241,556) | 5,963,194 | |
Balance, ending (shares) at Mar. 31, 2019 | 3,636 | 2,000 | 14,449,394 | ||||
Additional shares issued for acquisition | $ 175 | (175) | |||||
Additional shares issued for acquisition (Shares) | 175,000 | ||||||
Issuance of Common stock for consulting services | $ 550 | 189,950 | 190,500 | ||||
Issuance of Common stock for consulting services (Shares) | 550,000 | ||||||
Dividend on Series D Preferred Stock | (40,444) | (40,444) | |||||
Stock-based compensation expense | 84,467 | 84,467 | |||||
Net loss | (739,302) | (739,302) | |||||
Balance, ending at Jun. 30, 2019 | $ 4 | $ 2 | $ 15,174 | 12,424,093 | (6,980,858) | 5,458,415 | |
Balance, ending (shares) at Jun. 30, 2019 | 3,636 | 2,000 | 15,174,394 | ||||
Dividend on Series D Preferred Stock | (40,889) | (40,889) | |||||
Stock-based compensation expense | 71,988 | 71,988 | |||||
Net loss | (563,038) | (563,038) | |||||
Balance, ending at Sep. 30, 2019 | $ 4 | $ 2 | $ 15,174 | 12,455,192 | (7,543,896) | 4,926,476 | |
Balance, ending (shares) at Sep. 30, 2019 | 3,636 | 2,000 | 15,174,394 | ||||
Balance, beginning at Dec. 31, 2019 | $ 4 | $ 2 | $ 15,424 | 12,456,989 | (8,198,785) | 4,273,634 | |
Balance, beginning (shares) at Dec. 31, 2019 | 3,501 | 2,000 | 15,424,394 | ||||
Purchase of Acquisition | $ (164) | 164 | |||||
Purchase of Acquisition (shares) | (164,375) | ||||||
Conversion of Series C Preferred stock | $ (1) | $ 350 | (349) | ||||
Conversion of Series C Preferred stock (Shares) | (189) | 350,000 | |||||
Dividend on Series D Preferred Stock | (40,445) | (40,445) | |||||
Stock-based compensation expense | 54,635 | 54,635 | |||||
Net loss | (403,273) | (403,273) | |||||
Balance, ending at Mar. 31, 2020 | $ 3 | $ 2 | $ 15,610 | 12,470,994 | (8,602,058) | 3,884,551 | |
Balance, ending (shares) at Mar. 31, 2020 | 3,312 | 2,000 | 15,610,019 | ||||
Conversion of Series C Preferred stock | $ (3) | $ 13,248 | (13,245) | ||||
Conversion of Series C Preferred stock (Shares) | (3,312) | 13,247,984 | |||||
Conversion of Series D Preferred stock and accrued dividends | $ (2) | $ 3,500 | 200,502 | 204,000 | |||
Conversion of Series D Preferred stock and accrued dividends (Shares) | (1,890) | 3,500,000 | |||||
Conversion of Series D warrants | $ 2,948 | (2,948) | |||||
Conversion of Series D warrants (Shares) | 2,947,739 | ||||||
Issuance of Series E Preferred Stock, net of issuance costs | $ 1 | 1,009,999 | 1,010,000 | ||||
Issuance of Series E Preferred Stock, net of issuance costs (Shares) | 1,050 | ||||||
Repurchase of Series E Preferred stock | (1,110,880) | (1,110,880) | |||||
Repurchase of Series E Preferred stock (Shares) | (262) | ||||||
Conversion of Series E Preferred stock | $ (1) | $ 3,152 | (3,151) | ||||
Conversion of Series E Preferred stock (Shares) | (788) | 3,152,000 | |||||
Deemed dividend on Series C Preferred stock and Series D warrants | 4,050,838 | (4,050,838) | |||||
Deemed dividend on redemption of Series D Preferred stock | 3,763,591 | (3,763,591) | |||||
Sale of Common stock, net of issuance costs | $ 6,807 | 12,889,935 | 12,896,742 | ||||
Sale of Common stock, net of issuance costs (Shares) | 6,807,400 | ||||||
Issuance of Common stock for consulting services | $ 250 | 297,250 | 297,500 | ||||
Issuance of Common stock for consulting services (Shares) | 250,000 | ||||||
Sale of Common stock from conversion of warrants | $ 3,260 | 7 | 3,267 | ||||
Sale of Common stock from conversion of warrants (Shares) | 3,260,377 | ||||||
Exercise of options | $ 34 | (34) | |||||
Exercise of options (Shares) | 33,758 | ||||||
Stock-based compensation expense | $ 170 | 84,752 | 84,922 | ||||
Stock-based compensation expense (Shares) | 170,000 | ||||||
Net loss | (1,255,368) | (1,255,368) | |||||
Balance, ending at Jun. 30, 2020 | $ 48,979 | 33,637,610 | (17,671,855) | 16,014,734 | |||
Balance, ending (shares) at Jun. 30, 2020 | 110 | 48,979,277 | |||||
Conversion of Series D Preferred stock and accrued dividends | $ 636 | (636) | |||||
Conversion of Series D Preferred stock and accrued dividends (Shares) | (110) | 635,815 | |||||
Sale of Common stock, net of issuance costs | $ 3,356 | 9,896,644 | 9,900,000 | ||||
Sale of Common stock, net of issuance costs (Shares) | 3,355,705 | ||||||
Sales of Common stock from exercise of warrants | $ 3,906 | 2,630,550 | 2,634,456 | ||||
Sales of Common stock from exercise of warrants (Shares) | 3,906,236 | ||||||
Exercise of options | $ 1,004 | 46,396 | 47,400 | ||||
Exercise of options (Shares) | 1,003,969 | ||||||
Stock-based compensation expense | 124,831 | 124,831 | |||||
Net loss | (578,606) | (578,606) | |||||
Balance, ending at Sep. 30, 2020 | $ 57,881 | $ 46,335,395 | $ (18,250,461) | $ 28,142,815 | |||
Balance, ending (shares) at Sep. 30, 2020 | 57,881,002 |
CONDENSED INTERIM CONSOLIDATE_4
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (2,237,248) | $ (1,867,805) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Loss on disposal of fixed assets | 594 | 0 |
Depreciation and amortization | 128,318 | 128,682 |
Stock-based compensation expense | 264,389 | 217,375 |
Shares issued in exchange for professional services | 297,500 | 190,500 |
Changes in assets and liabilities: | ||
Accounts receivable | 65,833 | (8,951) |
Inventories | 62,778 | 1,301 |
Prepaid expenses and other assets | 3,626 | (30,981) |
Contract liability | (136,682) | 380,119 |
Accounts payable | 100,921 | (136,028) |
Accrued expenses and other liabilities | 7,052 | 4,528 |
Net cash used in operating activities | (1,442,919) | (1,121,260) |
CASH FLOW FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (70,086) | (57,715) |
Net cash used in investing activities | (70,086) | (57,715) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from (Payments on) promissory note | 107,439 | (40,998) |
Issuance of Series E Preferred stock | 1,010,000 | 0 |
Repurchase of Series E Preferred stock | (1,110,880) | 0 |
Sales of common stock, net of issuance cost | 22,796,743 | 0 |
Sales of common stock from conversion of pre-paid warrants | 2,637,723 | 0 |
Exercise of stock options | 47,400 | 0 |
Net cash provided by (used in) financing activities | 25,488,425 | (40,998) |
Net increase (decrease) in cash | 23,975,420 | (1,219,973) |
Cash at beginning of period | 717,997 | 2,601,730 |
Cash at end of period | 24,693,417 | 1,381,757 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest cash paid | 0 | 462 |
Income taxes paid | 0 | 0 |
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Conversion of Series B, C, D and E preferred stock into common stock | 6,551 | 1,026 |
Deemed dividends | $ 7,884,207 | $ 0 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Description of Business | Note 1 – Description of Business AgEagle Aerial Systems Inc. (“AgEagle” or “the Company”) designs, produces and supports technologically-advanced small, unmanned aerial vehicles (“UAVs” or “drones”). In addition, to providing new utility to UAVs, the Company pioneers and innovates advanced aerial imaging data collection and analytics technologies capable of addressing the impending food and environmental sustainability crises that threaten our planet. Historically, the Company’s daily efforts have focused on delivering the tools and strategies necessary to define and implement commercial drone construction and delivery, along with sustainability and precision farming solutions that solve important problems confronting the global agricultural industry. In fact, AgEagle, has spent ten years serving customers covering more than two million acres in 50 countries and monitoring 53 different crops. AgEagle remains intent on earning distinction as a trusted partner to clients seeking to adopt and support productive agricultural approaches to better farming practices which limit the impact on our natural resources, reduce reliance on inputs and materially increase crop yields and profits. In addition to UAV sales, in late 2018, the Company introduced a new drone-leasing program, alleviating farmers and agribusinesses from significant upfront costs associated with purchasing a drone, while also relieving them from ongoing drone maintenance and support requirements. Additionally, the new program provides the option of engaging a trained AgEagle pilot to operate the drone and manage the entire image collection process, creating a true turnkey aerial imagery capture solution for its customers. In the first half of 2019, the Company introduced HempOverview In the third quarter of 2019, AgEagle announced that it had begun to actively pursue expansion opportunities within the emerging Drone Logistics and Transportation market and revealed that it had received its first purchase orders from a major ecommerce company to manufacture and assemble UAVs designed to meet the critical specifications for drones that are meant to carry packaged goods in urban and suburban areas. Central to the Company’s long-term growth strategy, AgEagle will continue to identify opportunities to leverage its proprietary technological platform and industry expertise to penetrate new, high growth market sectors that may benefit from the Company’s advanced aerial imagery-based data collection and analytics solutions. Corporate History; Recent Business Combination On March 26, 2018, our predecessor company, EnerJex Resources, Inc. (“EnerJex”), a Nevada company, consummated the transactions contemplated by the Agreement and Plan of Merger (the “Merger Agreement”), dated October 19, 2017, pursuant to which AgEagle Merger Sub, Inc., a Nevada corporation and a wholly-owned subsidiary of EnerJex, merged with and into AgEagle Aerial Systems Inc., a privately held company organized under the laws of the state of Nevada (“AgEagle Sub”), with AgEagle Sub surviving as a wholly-owned subsidiary of EnerJex (the “Merger”). In connection with the Merger, EnerJex changed its name to AgEagle Aerial Systems Inc. (the “Company, “we,” “our,” or “us”) and AgEagle Sub changed its name initially to “Eagle Aerial, Inc. and then to” AgEagle Aerial, Inc. On August 28, 2018, we closed the transaction contemplated by the Asset Purchase Agreement dated July 25, 2018 with AgEagle Aerial, Inc., a wholly-owned subsidiary of the Company; Agribotix, LLC, a Colorado limited liability company (“Agribotix” or the “Seller”); and the other parties named therein. Pursuant to the Asset Purchase Agreement, we acquired all right, title and interest in and to all assets owned by Agribotix, which included Agribotix’s primary product, FarmLens™, utilized in their business for providing integrated agricultural drone solutions and drone-enabled software technologies and services for precision agriculture. The Company believes that purchasing FarmLens FarmLens FarmLens To date, FarmLens In late September 2020, the Company began relocating its headquarters and drone manufacturing operations from Neodesha, Kansas to Wichita, Kansas. Impact of COVID-19 On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (“COVID-19”) and the risks to the international community as the virus spreads globally. On March 11, 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. In response to the pandemic, many states and jurisdictions in which we operate have issued stay-at-home orders and other measures aimed at slowing the spread of the coronavirus. We initially closed our offices only and had our executive and administrative staff work remotely. Our manufacturing operations continued operating however we experienced delays with some of our ongoing projects in terms of completion due to vendor delays. We continue to follow guidance from local authorities in determining the appropriate restrictions to put in place for our offices and manufacturing facility, such as social distancing and limited capacities, to ensure the health and safety of our employees. As of the date of this filing, our locations and primary suppliers continue to operate. We may experience constrained supply or other business disruptions that could materially impact our business, results of operations and overall financial performance in future periods. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies The accompanying interim unaudited condensed consolidated financial statements have been prepared under the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information, which includes condensed consolidated financial statements of the Company and its wholly owned subsidiaries as of September 30, 2020. Accordingly, the condensed consolidated financial statements do not include all the information and notes necessary for a comprehensive presentation of the financial position and results of operations and should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2019 and included in the Form 10-K filed with the SEC on April 13, 2020. It is management’s opinion that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year ending December 31, 2020. Basis of Presentation and Consolidation – The interim condensed consolidated financial statements include the accounts of AgEagle Aerial Systems Inc. and its wholly-owned subsidiaries AgEagle Aerial, Inc., EnerJex Kansas, Inc., Black Sable Energy, LLC and Black Raven Energy, Inc., which was dissolved effective November 2019. All significant intercompany balances and transactions have been eliminated in consolidation. The summary of significant accounting policies presented below is designed to assist in understanding the Company’s interim condensed consolidated financial statements. Such interim condensed consolidated financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“US GAAP”) in all material respects and have been consistently applied in preparing the accompanying interim condensed consolidated financial statements. Use of Estimates – Fair Value of Financial Instruments – Cash and Cash Equivalents – Receivables and Credit Polic – The Company estimates an allowance for doubtful accounts based upon an evaluation of the current status of receivables, historical experience and other factors, as necessary. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change. The Company determined that no allowance was necessary as of September 30, 2020 and December 31, 2019. Inventorie – Goodwill and Intangible Assets – Intangible assets from acquired businesses are recognized at fair value on the acquisition date and consist of customer programs, trademarks, customer relationships, technology and other intangible assets. Customer programs include values assigned to major programs of acquired businesses and represent the aggregate value associated with the customer relationships, contracts, technology and trademarks underlying the associated program and are amortized on a straight-line basis over a period of expected cash flows used to measure fair value, which ranges from four to five years. Revenue Recognition and Concentration – Revenue from Contracts with Customers Under fixed-price contracts, the Company agrees to perform the specified work for a pre-determined price. To the extent the Company’s actual costs vary from the estimates upon which the price was negotiated, it will generate more or less profit or could incur a loss. The Company accounts for a contract after it has been approved by all parties to the arrangement, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company generally recognizes revenue on sales to customers, dealers and distributors upon satisfaction of performance obligations, which generally occurs once controls transfer to customers, which is when product is shipped or delivered depending on specific shipping terms. Subscription services for use of the Company’s proprietary FarmLens HempOverview Sales concentration information for customers comprising more than 10% of the Company’s total net sales is summarized below: Percent of total sales for nine months Customers 2020 2019 Customer A 94.4 % 55.8 % Customer B — 12.2 % No accounts receivables were due from Customer A or B as of September 30, 2020 and December 31, 2019, respectively. The table below reflects our revenue for the periods indicated by product mix. For the nine months ended September 30, Type 2020 2019 Drone Assembly and Product Sales $ 1,105,971 $ 84,745 Software Platform Sales 51,959 23,040 Total $ 1,157,930 $ 107,785 Vendor Concentration – FarmLens Shipping Costs – Earnings Per Share – Potentially Dilutive Securities – Income Taxes – Stock-Based Compensation Awards – “Compensation – Stock Compensation,” The Black-Scholes option-pricing model requires the input of certain assumptions that require the Company’s judgment, including the expected term and the expected stock price volatility of the underlying stock. The assumptions used in calculating the fair value of stock-based compensation represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change resulting in the use of different assumptions, stock-based compensation expense could be materially different in the future. Recently Issued Accounting Pronouncements Adopted In January 2016, the FASB issued ASU 2016-01, Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, FASB issued Account Standards Update 2016-02 – Leases In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other In August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement Pending Adoption Other recent accounting pronouncements that have been issued or proposed by FASB did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements in the near term. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3 – Inventories Inventories consist of the following at: September 30, 2020 December 31, 2019 Raw materials $ 92,930 $ 193,022 Work-in-process 68,350 26,456 Finished goods 7,109 11,689 Gross inventory $ 168,389 $ 231,167 Less obsolete reserve (10,000 ) (10,000 ) Total $ 158,389 $ 221,167 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 4 — Property and Equipment Property and equipment consist of the following at: September 30, 2020 December 31, 2019 Property and equipment $ 197,063 $ 140,758 Less accumulated depreciation (103,405 ) (102,982 ) $ 93,658 $ 37,776 Depreciation expense for the three and nine months ended September 30, 2020 was $5,722 and $13,608, respectively; and for the three and nine months ended September 30, 2019, depreciation expense totaled $4,185 and $10,373, respectively, which is included in general and administrative expenses on the condensed interim consolidated statements of operations. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 5 – Intangible Assets Intangible assets are recorded at cost and consist of assets acquired in 2018 as a result of a business acquisition in 2018. Amortization is computed using the straight-line method over the estimate useful life of the asset. Intangible assets were comprised of the following at September 30, 2020: Intangible Assets Estimated Life Gross Cost Accumulated Amortization Net Book Value Intellectual property/technology 5 yrs. $ 433,400 $ (180,583 ) $ 252,817 Customer base 5 yrs. 72,000 (30,000 ) 42,000 Tradenames and trademarks 5 yrs. 58,200 (24,250 ) 33,950 Non-compete agreement 4 yrs. 160,900 (83,802 ) 77,098 Carrying value as of September 30, 2020 $ 724,500 $ (318,635 ) $ 405,865 The weighted average remaining amortization period in years is 2.71 years. Amortization expense for the three and nine months ended September 30, 2020 was $38,236 and $114,710, respectively, and $38,236 and $118,309, respectively, for the three and nine months ended September 2019, which is included in general and administrative expenses on the condensed interim consolidated statements of operations. Future amortization is as follows for fiscal years ending: 2020 (months remaining) 2021 2022 2023 Intellectual property/technology $ 21,670 $ 86,680 $ 86,680 $ 57,786 Customer base 3,600 14,400 14,400 9,600 Tradenames and trademarks 2,910 11,640 11,640 7,760 Non-compete agreement 10,057 40,225 26,817 — Total $ 38,237 $ 152,945 $ 139,537 $ 75,146 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Note 6 – Debt Promissory Notes On May 6, 2020, the Company received a loan in the amount of $107,439 from the Small Business Administration (SBA) as part of Coronavirus Aid, Relief and Economic Security Act’s Paycheck Protection Plan (PPP). The loan is unsecured, nonrecourse, accrues interest at one percent per annum, with a due date of May 6, 2022. Under the terms of the loan, a portion or all of the loan is forgivable to the extent that the loan proceeds are used to fund qualifying payroll, rent and utilities during a designated twenty-four-week period through October 21, 2020. The unforgiven portion of the PPP loan is payable over two years and can be extended to five years if agreed upon by both parties and bears interest at a rate of 1%, with a deferral of payments for the first six months. The Company intends to use the proceeds for purposes consistent with the PPP. While the Company currently believes that its use of the loan proceeds will meet the conditions for forgiveness of the loan, there can be no assurance that the Company will not take actions that could cause the Company to be ineligible for forgiveness of the loan, in whole or in part. As part of the liabilities assumed from the Merger, the Company recorded a promissory note for a principal amount of $125,556 and accrued interest of $4,171 payable over twelve months and maturing on March 27, 2019. The total amount outstanding as March 31, 2019 was $9,028, resulting in principal payments of $31,970 made in the first three months of 2019. The Company recorded interest of $462 for the three months ended March 31, 2019. The note was paid in full in April 2019. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders’ Equity | Note 7 – Stockholders’ Equity Common Stock Securities Purchase Agreement Dated May 11, 2020 On May 11, 2020, the Company and an institutional investor and existing Company shareholder (the “Investor”) entered into a securities purchase agreement (the “Purchase Agreement”) pursuant to which the Company agreed to sell to the Investor in a registered direct offering 2,400,000 shares of common stock, par value $0.001, and pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 3,260,377 shares of common stock, for gross proceeds of approximately $6 million (which includes subsequent payment of the exercise price of the Pre-Funded Warrants in the amount of $3,267). The purchase price for each share of common stock was $1.06 and the purchase price for each Pre-Funded Warrant was $1.05999. The exercise price for each Warrant was $0.001. Net proceeds from the sale were used to repurchase 262 shares of the Company’s Series E Preferred Stock, convertible into 1,048,000 shares of common stock currently held by the Investor at a repurchase price of $1.06 per share of common stock (see below). The Company expects to use the balance for working capital and general corporate purposes. The Company increased net loss available to common stockholders’ in computing earnings per share for the excess of the consideration paid for the Series E Preferred Stock over its carrying value totaling $848,880 as presented on the condensed interim consolidated statements of operations. Pursuant to the terms of the Purchase Agreement, the Company had agreed to certain restrictions on future stock offerings, including that during the 60-day period following the closing, the Company did not issue (or enter into any agreement to issue) any shares of common stock or common stock equivalents, subject to certain exceptions. The exercise price of the Warrants and the shares of the common stock issuable upon the exercise thereof were subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Warrants, and were exercisable on a “cashless” basis in certain circumstances. Securities Purchase Agreement Dated June 24, 2020 On June 24, 2020, the Company and the Investor entered into a Purchase Agreement pursuant to which the Company agreed to sell to the Investor in a registered direct offering 4,407,400 shares of common stock, par value $0.001, pre-funded warrants to purchase up to 1,956,236 shares of common stock, and warrants (the “Warrants”) to purchase up to 2,455,476 shares of common stock at an exercise price of $1.35 per share, for gross proceeds of $7 million (which includes subsequent payment of the exercise price of the Pre-Funded Warrants in the amount of $1,956) and net proceeds of $6,950,000 after issuance costs. Upon exercise of the Warrants in full by the Investor, the Company will receive additional gross proceeds of $3,314,892. The shares of common stock underlying the Pre-Funded Warrants and the Warrants are referred to as “June Warrant Shares.” The purchase price for each share of common Stock is $1.10 and the purchase price for each Pre-Funded Warrant is $1.099. The exercise price for each Pre-Funded Warrant is $0.001. Net proceeds from the sale will be used for working capital, capital expenditures and general corporate purposes. The Shares, Pre-funded Warrants, Warrants and June Warrant Shares are being offered by the Company pursuant to an effective shelf registration statement on Form S-3 (File No. 333-239157), which was declared effective on June 19, 2020. Pursuant to the terms of the Purchase Agreement, the Company agreed to certain restrictions on future stock offerings, including that during the 75-day period following the closing, the Company will not issue (or enter into any agreement to issue) any shares of common stock or common stock equivalents, subject to certain exceptions, including if the consolidated closing price on the trading market on which the Company’s common stock is traded at the time is greater than $1.90 (adjusted for any subsequent stock splits or similar capital adjustments) for five consecutive trading days, the Company may issue such securities at not less than $1.90 per common stock Equivalent. The Investor has a right from the date of the Purchase Agreement until December 31, 2020 to participate in a subsequent financing by the Company or any of its Subsidiaries of common stock or common stock Equivalents for cash consideration, indebtedness or a combination of units thereof (a “Subsequent Financing”), in an amount equal to 50% of the Subsequent Financing on the same terms, conditions and price provided for in the Subsequent Financing. The exercise price of the Prefunded Warrants and the Warrants and the number of June Warrant Shares issuable upon the exercise thereof will be subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Prefunded Warrants and the Warrants. The Warrants will be exercisable on a “cashless” basis only in the event there is no effective registration statement registering, or the prospectus contained therein is not available for the sale of the shares underlying the Warrants. The Pre-Funded Warrants allow for cashless exercise at any time. The Pre-Funded Warrants and the Warrants each contain a beneficial ownership limitation, such that none of such Pre-Funded Warrants nor the Warrants may be exercised, if, at the time of such exercise, the holder would become the beneficial owner of more than 9.99% of our outstanding shares of common stock following the exercise of such Pre-Funded Warrant or Warrant. During the three and nine months ended September 30, 2020 the Company received $2,632,500 in additional gross proceeds associated with exercise of 1,950,000 of the June Warrant Shares into common stock. As of September 30, 2020, 505,476 June Warrant Shares at an exercise price of $1.35 per share remain outstanding. Securities Purchase Agreement Dated August 4, 2020 On August 4, 2020, the Company and an institutional investor and existing Company stockholder (the “Investor”) entered into a Purchase Agreement pursuant to which the Company agreed to sell to the Investor in a registered direct offering 3,355,705 shares of common stock and warrants to purchase up to 2,516,778 shares of Common Stock at an exercise price of $3.30 per share (the “Warrants”), for proceeds of $9,900,000 net of issuance costs of $100,000. Upon exercise of the Warrants in full by the Investor, the Company will receive additional gross proceeds of approximately $8,305,367. The shares of Common Stock underlying the Warrants are referred to as “August Warrant Shares.” The purchase price for each share of Common Stock is $2.98. Net proceeds from the sale will be used for working capital, capital expenditures and general corporate purposes. The Shares, the Warrants and the August Warrant Shares are being offered by the Company pursuant to an effective shelf registration statement on Form S-3 (File No. 333-239157), which was declared effective on June 19, 2020. Pursuant to the terms of the Purchase Agreement, the Company has agreed to certain restrictions on future stock offerings, including that during the 75-day period following the closing, the Company will not issue (or enter into any agreement to issue) any shares of Common Stock or Common Stock equivalents, subject to certain exceptions, including if the consolidated closing price on the trading market on which the Company’s Common Stock is traded at the time is greater than $5.00 (adjusted for any subsequent stock splits or similar capital adjustments) for ten consecutive trading days, the Company may issue such securities at not less than $5.00 per Common Stock Equivalent. In addition, the Company’s executive officers and directors agreed that they shall not sell (or hedge in any manner) any of their shares of the Common Stock for a period ending September 7, 2020. The Investor has a right from the date of the Purchase Agreement until December 31, 2020, to participate in a subsequent financing by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents for cash consideration, indebtedness or a combination of units thereof (a “Subsequent Financing”), in an amount equal to 50% of the Subsequent Financing on the same terms, conditions and price provided for in the Subsequent Financing. The exercise price of the Warrants and the number of August Warrant Shares issuable upon the exercise thereof will be subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Warrants. The Warrants will be exercisable on a “cashless” basis only in the event there is no effective registration statement registering, or the prospectus contained therein is not available for the sale of the shares underlying the Warrants. The Warrants contain a beneficial ownership limitation, such that none of such Warrants may be exercised, if, at the time of such exercise, the holder would become the beneficial owner of more than 9.99% of our outstanding shares of Common Stock following the exercise of such Warrant. The Warrant is for a ten-month term and is not exercisable for the first six months. Issuances of Stock and Restricted Stock Units On April 13, 2020, the Company issued in connection with the 2019 Executive Compensation Plan, 100,000 restricted shares to Mr. Barrett Mooney and 70,000 restricted shares to Ms. Nicole Fernandez-McGovern. The Company recognized a total of $59,500 of expense at a fair value of $0.35 per share within stock compensation expense related to these issuances for the nine months ended September 30, 2020, which is included in general and administrative expenses on the condensed interim consolidated statements of operations. On May 18, 2020, the company issued in connection with the commencement of the Chief Executive officer, 100,000 shares of restricted stock units under the Company’s 2017 Omnibus Equity Incentive Plan (the “Equity Plan”), which will fully vest after one year of continued employment. The Company determined the fair-market value of the restricted stock units to be $134,000. In connection with the issuance of these restricted stock units, the Company recognized $33,688 and $49,794 in stock compensation expense for the three and nine months ended September 30, 2020, respectively, which is included in general and administrative expenses on the condensed interim consolidated statements of operations. The remaining unrecognized stock compensation expense of $84,206 will be recognized through May 2021. On June 30, 2020, the Company issued in connection with a consulting agreement, dated May 3, 2019, 250,000 shares of its common stock to the consulting company as a part of their compensation for services. The Company recognized a total of $297,500 of expense at a fair value of $1.19 per share related to these issuances. within general and administrative costs on the condensed interim consolidated statements of operations. In addition, the Consultant also held options to purchase 207,055 shares of the Company’s common stock that were cashless exercised at a price of $0.06 per share on July 20, 2020 into 201,791 shares of common stock. Series C Preferred Stock As a result of the Merger, the Company’s Series C Convertible Preferred Stock (the “Series C Preferred Stock”) included 2,879 of remaining shares after the conversion and retirement of all the Company’s promissory notes due. These shares were convertible into 1,471,425 shares of the Company’s common stock. Furthermore, an additional 4,000 shares of Series C Preferred Stock were issued and were convertible into 3,020,797 shares of the Company’s common stock, as they were issued to the current holder of Series C Preferred Stock in connection with a $4 million financing of Series C Preferred Stock (the “Financing”). On May 11, 2018, the Company issued an additional 250 shares of our Series C Preferred Stock, convertible into 163,265 shares of common stock and received a cash payment of $250,000 for the issuance of the Series C Preferred Stock. The Series C Preferred Stock included a beneficial ownership limitation preventing conversion of shares of Series C Preferred Stock into more than 9.99% of the number of shares of our common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the Series C Preferred Stock. Each share of Series C Preferred Stock was convertible into a number of shares of common stock equal to the quotient determined by dividing (x) the stated value of $1,000 per share, by (y) an original conversion price of $1.53. Until the volume weighted average price of common stock on NYSE exceeds $107.50 with average trading volume of 200,000 shares per day for ten consecutive trading days, the conversion price of Series C Preferred Stock was subject to full-ratchet, anti-dilution price protection. Under that provision, if, while that full-ratchet, anti-dilution price protection is in effect, the Company issues shares of common stock at a price per share (the “Dilutive Price”) that is less than the conversion price, then the conversion price of the Series C Preferred Stock is automatically reduced to be equal to the Dilutive Price. The effect of that reduction is that, upon the issuance of shares of common stock at a Dilutive Price, the Series C Preferred Stock would be convertible into a greater number of shares of common stock. The Series C preferred stock anti-dilution protection was initially triggered on December 27, 2018 as a result of the Company issuing the Series D Preferred Stock, (the “Series D Preferred Stock”) as described below. The Series D Preferred Stock had a $0.54 conversion price thereby qualifying as a subsequent equity offering at a price less than $1.53. On April 7, 2020, upon the issuance of the Series E Preferred Stock, (the “Series E Preferred Stock”) offering (see below), a subsequent anti-dilution provision was triggered for the Series C Preferred Stock whereby the conversion price was further adjusted from $0.54 per share to $0.25 per share (a “Down Round), which resulted in approximately 13,248,000 shares of common stock being issuable upon conversion of the remaining Series C Preferred Stock. As a result of this Down Round being triggered, the Company recorded a deemed dividend in the amount of $3,841,920 representing the intrinsic spread between the previous conversion price of $.54 and the adjusted conversion price of $.25 multiplied by approximately 13,248,000 common stock shares issuable upon conversion. The deemed dividend was recorded as a reduction of retained earnings and increase in additional paid-in-capital and increased the net loss to common stockholders by the same amount in computing earnings per share. During the month of January 2020, Alpha Capital Anstalt (“Alpha”) converted 189 shares of Series C Preferred Stock into 350,000 shares of common stock at a conversion price of $0.54. During the month of April 2020, Alpha converted 3,312 shares of Series C Preferred Stock into 13,247,984 shares of common stock at a conversion price of $0.25. As of September 30, 2020, no Series C Preferred Stock remain issued and outstanding. Series D Preferred Stock On December 27, 2018, the Company entered into a Purchase Agreement with Alpha. Pursuant to the terms of the Agreement, the Board of Directors of the Company (the “Board”) designated a new series of preferred stock by filing a certificate of designation, the Series D Preferred Stock, which is non-convertible and provides for an 8% annual dividend and is subject to optional redemption by the Company. The Company issued 2,000 shares of Preferred Stock and a warrant to purchase 3,703,703 shares of common stock, par value $0.001 per share (the “Warrant,” and the shares of common stock underling the warrants, the “Series D Warrant Shares”) for $2,000,000 in gross proceeds. The Company also entered into a Registration Rights Agreement, granting registration rights to Alpha with respect to the Series D Warrant Shares. The Agreement provides that upon a subsequent financing or financings with net proceeds of at least $500,000, the Company must exercise its optional redemption of the Preferred Stock (as more fully described below in Item 5.03) and apply any and all net proceeds from such financing(s) to the redemption in full of the Preferred Stock. The Preferred Stock is non-convertible, provides for an 8% annual dividend payable semi-annually and has liquidation rights senior to the common stock, but pari passu with the Company’s Series C Preferred Stock. During the nine months ended September 30, 2020 and 2019, the Company recorded $69,778 and $121,333 of accrued dividends, respectively. As of September 30, 2020, and December 31, 2019, accumulated accrued dividends totaled $0 and $163,555, respectively, as presented on the condensed interim consolidated balance sheets. The Preferred Stock has no voting rights, except that the Company shall not undertake certain corporate actions as set forth in the Certificate of Designation that would materially impact the holders of Preferred Stock without their consent. The Preferred Stock is subject to optional redemption by the Company at 115% of the stated value of the Preferred Stock outstanding at the time of such redemption, plus any accrued but unpaid dividends and all liquidated damages or other amounts due. Any such optional redemption may only be exercised after giving notice and upon satisfaction of certain equity conditions set forth in the Certificate of Designation, including (i) all dividends, liquidated damages and other amounts have been paid; (ii) there is an effective registration statement covering the Series D Warrant Shares, or the Series D Warrant Shares can be exercised through a cashless exercise without restriction under Rule 144, (iii) the Series D Warrant Shares are listed on an exchange, (iv) the holder is not in possession of material, non-public information, (v) there is a sufficient number of authorized shares for issuance of all Series D Warrant Shares, and (vi) for each trading day in a period of 20 consecutive trading days prior to the redemption date, the daily trading volume for the common stock on the principal trading market exceeds $200,000 per trading day. On April 7, 2020, upon the issuance of the Series E Preferred Stock, (the “Series E Preferred Stock”) offering (see below), a subsequent anti-dilution provision was triggered for the Series D Warrants whereby the exercise price of the Warrant Shares was adjusted from $0.54 to $0.25 per share (a “Warrant Down Round). Upon the Warrant Down Round being triggered, the Company recognized $208,918 of a deemed dividend for the difference between the fair value of the original warrants right before modification and the fair value of the modified warrants. The fair value of the warrants was determined using the Black-Scholes option-pricing model based on the following assumptions: expected life of 3.5 years, expected dividend rate of 0%, volatility of 90.0%, and an interest rate of 0.29%. The deemed dividend to the preferred stockholders was a recorded as additional paid in capital and a reduction of retained earnings and as an increase to net loss attributable to common stockholders in computing earnings per share on the condensed interim consolidated statements of operations. On June 5, 2020, the Company and Alpha entered into a letter agreement whereby they agreed to amend the Original Series D Preferred Stock and terminate the Purchase Agreement. Alpha is a current holder of less than 10% of the Company’s issued and outstanding common stock and has no material relationship with the Company. On June 5, 2020, the Board of Directors of the Company approved an amendment to the Original Series D Preferred Stock Certificate of Designation for Nevada Profit Corporations with the Secretary of State of the State of Nevada (the “Original Series D Preferred Stock Certificate of Designation”). The amendment among other things, (i) provided for the ability of the Holder to convert the Original Series D, including all accrued, but unpaid dividends on the Original Series D, into shares of common stock, par value $0.001 per share of the Company, (ii) set a conversion price at $0.54 per share (subject to customary adjustments), and (iii) increased the stated value of the Original Series D from $1,000 to $1,116.67. The Amended and Restated Certificate of Designation of the Series D Preferred Stock was filed with the Secretary of the State of Nevada effective as of June 8, 2020. The holder of the Original Series D approved the amendment to the Original Series D. There is no class or series of stock which is senior to the Original Series D as to the payment of distributions upon dissolution of the Company, and therefore the approval of any other class or series of stock of the Company to the amendments to the Original Series D Preferred Stock Certificate of Designation is not required pursuant to Nevada law. On the date of the above amendment to the Original Series D Preferred Stock the fair value of the Company’s common stock price was $1.45 which is higher than the effective conversion price of $0.54 that was agreed to on June 5 th During the month of June 2020, the Series D Preferred Stockholder converted 1,890 shares of Series D Preferred Stock and all outstanding accrued dividends totaling $233,333 into 3,500,000 shares of common stock at a conversion price of $0.54. During the three months ended September 30, 2020, the Series D Preferred Stockholders converted the remaining 110 shares of the Series D Preferred Stock into 635,815 shares of common stock at a conversion price of $0.54 which includes an additional 421,308 of common stock shares to correct conversions that occurred in June 2020 computed using the stated value of $1,000 rather than $1,116.67. Series E Preferred Stock On April 7, 2020 the Company entered into a Purchase Agreement with Alpha, pursuant to the terms of the Agreement, the Board of Directors of the Company authorized 1,050 shares of a newly designated series of preferred stock, the Series E Convertible Preferred Stock. The Preferred Stock was convertible at $0.25 per share into an aggregate of 4,200,000 shares of the common stock, par value $0.001 per share. The purchase price for the Preferred Stock was $1,050,000 of which the Company received net proceeds of $1,010,000. The Preferred Stock has liquidation rights senior to the common stock, but pari passu with the Series C Preferred Stock and the Series D Preferred Stock. The Preferred Stock has no voting rights. The conversion price adjusts for stock splits and combinations and is subject to anti-dilution protection for subsequent equity issuances until such time as no shares of Series E Preferred Stock are outstanding. The Certificate of Designation of the Series E Convertible Preferred Stock was filed with the State of Nevada on April 2, 2020.The Company also entered into a Registration Rights Agreement, granting registration rights to Alpha with respect to the Conversion Shares and common stock underlying warrants currently owned by Alpha. On the date that the Series E Preferred Stock was consummated the fair value of the Company’s common stock price was $0.37 which is higher than the effective conversion price of $0.25 that was agreed to on April 7 th On May 11, 2020, the Company entered into a Purchase Agreement for the sale of common stock as described above with Alpha whereby we agreed to repurchase 262 shares of Series E Preferred Stock with the proceeds from the new issuance. The repurchase of the Preferred Series E Stock was convertible into 1,048,000 shares of common stock at a repurchase price of $1.06 per share. The Company increased its net loss available to common stockholders’ in computing earnings per share for the excess of the consideration paid for the Series E Preferred Stock over its carrying value totaling $848,880. Filing of Registration Statement Pursuant to the terms of the Registration Rights Agreement executed on April 7, 2020, the Company filed an initial registration statement registering the Conversion Shares and the Warrant Shares on April 27, 2020. The Company’s registration statement was declared effective May 6, 2020. Options On March 26, 2018, the EnerJex 2017 Omnibus Equity Incentive Plan (the “Plan”) became effective. Under the Plan, the Company can grant equity-based and other incentive awards to officers, employees and directors of, and consultants and advisers to, the Company. The purpose of the Plan is to help the Company attract, motivate and retain such persons and thereby enhance shareholder value. The Plan shall continue in effect, unless sooner terminated, until the tenth (10th) anniversary of the date on which it is adopted by the Board of Directors (except as to awards outstanding on that date). The Board of Directors in its discretion may terminate the Plan at any time with respect to any shares for which awards have not theretofore been granted; provided, however, that the Plan’s termination shall not materially and adversely impair the rights of a holder, without the consent of the holder, with respect to any award previously granted. On July 15, 2020 the Company held its 2020 annual meeting of stockholders and approved a proposal to increase the number of shares of common stock reserved for issuance under the Plan from 3,000,000 to 4,000,000. To the extent that an award lapses, expires, is canceled, is terminated unexercised or ceases to be exercisable for any reason, or the rights of its holder terminate, any shares subject to such award shall again be available for the grant of a new award. The number of shares for which awards which are options or SARs may be granted to a participant under the Plan during any calendar year is limited to 500,000. For purposes of qualifying awards as “performance-based” compensation under Code Section 162(m), the maximum amount of cash compensation that may be paid to any person under the Plan in any single calendar year shall be $500,000. During the nine months ended September 30, 2020, the Company issued options to purchase 481,167 shares of common stock, in the aggregate, to directors and employees of the Company at the fair value exercise price ranging from $0.41 to $3.10 per share expiring on dates between February 23, 2025 and September 29, 2025. The Company determined the fair-market value of the options to be $439,530. In connection with the issuance of these options to employees and directors, the Company recognized $26,575 and 29,262 in stock compensation expense for the three and nine months ended September 30, 2020. During the three and nine months ended September 30, 2020, the Company recognized $64,248 and $125,833, respectively, in stock compensation expense in connection with options previously issued to employees and directors in the prior years. During the nine months ended September 30, 2019, the Company issued options to purchase 1,054,000 shares of common stock, in the aggregate, to directors and employees of the Company at the fair value exercise price ranging from $0.29 to $0.54 per share expiring on dates between December 31, 2023 and March 28, 2029. The Company determined the fair-market value of the options to be $248,761. In connection with the issuance of these options to employees and directors, the Company recognized $15,873 and $32,362, respectively in stock compensation expense for the three and nine months ended September 30, 2019. During the three and nine months ended September 30, 2020, the Company recognized $56,115 and $185,014, respectively, in stock compensation expense in connection with options previously issued to employees and directors in the prior years. The fair value of options granted during the nine-month periods ending September 30, 2020 and 2019 were determined using the Black-Scholes option valuation model. The expected term of options granted is based on the simplified method in accordance with Securities and Exchange Commission Staff Accounting Bulletin 107 using the average of vesting period and contractual term. . The Company makes assumptions with respect to expected stock price volatility based on the average historical volatility of peers with similar attributes. In addition, the Company determines the risk-free rate by selecting the U.S. Treasury with maturities similar to the expected terms of grants, quoted on an investment basis in effect at the time of grant for that business day. The significant weighted average assumptions relating to the valuation of the Company’s stock options granted during the nine months ended September 30, 2020 were as follows: September 30, 2020 Dividend yield 0.00 % Expected life 3.5 Years Expected volatility 89.19 to 90.09 % Risk-free interest rate 0.16 to 0.29 % A summary of the options activity for the nine months ended September 30, 2020 is as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at January 1, 2020 2,480,470 $ 0.39 6.28 $ 378,111 Granted 481,167 1.52 4.75 — Exercised/Forfeited (851,483 ) 0.53 — — Outstanding at September 30, 2020 2,110,154 0.59 5.67 $ 3,605,844 Exercisable at period end 1,156,062 $ 0.31 5.89 $ 2,276,254 For options granted during the nine months ended September 30, 2020, the fair value of the Company’s stock was based upon the close of market price on the date of grant. As of September 30, 2020, the future expected stock-based compensation expense to be recognized in future years is $535,658 through September 30, 2022. During the nine months ended September 30, 2020, the Company had exercises of options to purchase 430,220 shares of common stock, in the aggregate, to directors and employees. During the month the nine months ended September 30, 2020, 466,344 options were converted into 430,220 shares of common stock at a weighted average exercise price of $0.22. The Company received cash proceeds of $47,400 associated with exercise of the exercise. Intrinsic value is measured using the fair market value at the date of exercise (for shares exercised) or at September 30, 2020 (for outstanding options), less the applicable exercise price. A summary of the options activity for the nine months ended September 30, 2019 is as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at January 1, 2019 1,494,158 $ 0.46 6.93 $ 409,678 Granted 1,054,000 0.37 6.61 — Exercised/Forfeited (144,688 ) 0.49 — — Outstanding at September 30, 2019 2,403,470 0.39 6.41 235,896 Exercisable at period end 1,339,467 $ 0.33 6.54 $ 226,958 |
Warrants to Purchase Common Sto
Warrants to Purchase Common Stock | 9 Months Ended |
Sep. 30, 2020 | |
Notes to Financial Statements | |
Warrants to Purchase Common Stock | Note 8 – Warrants to Purchase Common Stock Warrant Issued On June 24, 2020, the Company entered into a Purchase Agreement, described above in Note 7, pursuant to which the Company agreed to sell to the Investor in a registered direct offering June Warrant Shares to purchase up to 2,455,476 shares of common stock at an exercise price of $1.35 per share. During the three and nine months ended September 30, 2020 the Company received $2,632,500 in additional gross proceeds associated with exercise of 1,950,000 of the June Warrant Shares into common stock. As of September 30, 2020, 505,476 of the June Warrant Shares at an exercise price of $1.35 per share remain outstanding. On August 4, 2020, the Company entered into a Purchase Agreement, described above in Note 7, pursuant to which the Company agreed to sell to the Investor in a registered direct offering Warrants to purchase up to 2,516,778 shares of common stock at an exercise price of $3.30 per share. Upon exercise of the Warrants in full by the Investor, the Company will receive additional gross proceeds of approximately $8,305,367. As of September 30, 2020, all of these Warrants remain outstanding. Warrant Conversions During the nine months ended September 30, 2020, 6,481,924 warrants were converted into 5,303,455 shares of common stock at a weighted average conversion price of $0.74. The Company received cash proceeds of $2,632,500 associated with exercise of the warrants. All warrants outstanding as of September 30, 2020 are scheduled to expire between June 06, 2021 and June 25, 2021 . A summary of activity related to warrants for the nine months ended September 30, 2020 follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at January 1, 2020 4,531,924 $ 0.72 4.05 Issued 4,972,254 2.34 0.92 Exercised (6,481,924 ) 0.74 — Outstanding at September 30, 2020 3,022,254 2.97 0.69 Exercisable at September 30, 2020 505,476 2.97 0.69 A summary of activity related to warrants for the nine months ended September 30, 2019 follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at January 1, 2019 4,531,924 $ 0.72 5.05 Outstanding at September 30, 2019 4,531,924 0.72 4.31 Exercisable at September 30, 2019 4,531,924 0.72 4.31 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9 – Commitments and Contingencies Operating Leases The Company leases office space located at 117 South 4 th The Company has a lease for offices in Boulder, Colorado for $2,000 a month. The Company renewed the lease on May 31, 2019 until December 31, 2020 on a month-to-month basis with an option to terminate at any time with a 30-day prior notice period. On August 3, 2020 (the “Effective Date”), the Company entered into a lease agreement (the “Wichita Lease”) with U.S. Business Centers, L.L.C. (the “Landlord”) with an expected commencement date of November 1, 2020 (the “Commencement Date”) and expected expiration date of October 31, 2023, unless the Wichita Lease is sooner terminated or extended. The Wichita Lease premises includes approximately 12,000 square feet, located at 8833 E. 34 th The Landlord may grant the Company the option to extend the term of the Wichita Lease for an additional 36 months (the “Option Term”). The aggregate estimated rent payments due over the Option Term of the Wichita Lease would be $314,640. In addition, the Landlord granted the Company the right to take occupancy of the Leased Premises rent free, beginning on September 1, 2020. The Company expects to use the Leased Premises as its new corporate headquarters and base of operations for manufacturing, assembly, design and engineering and testing of drones, drone subcomponents and drone-related equipment. Total rent expense associated with the above leases was $23,100 and $22,500 for the nine months ended September 30, 2020 and 2019, respectively, which is included in general and administrative expenses on the condensed interim statements of operations. GreenBlock Capital LLC Consulting Agreement On May 3, 2019, the Company entered into a consulting agreement with GreenBlock Capital LLC (“Consultant”) to serve as strategic advisor and consultant to the Company with respect to the development of business opportunities and the implementation of business strategies to be agreed to by both parties. The extent of the services will be set forth in separate scopes of work, from time to time, to be prepared and mutually agreed to by the parties. As compensation for the services under the terms of the agreement, Consultant shall receive (i) $25,000 per month during the term of the agreement, (ii) 500,000 shares of restricted common stock upon execution of the agreement, and (iii) up to 2,500,000 shares of restricted common stock upon the achievement of predetermined milestones. The Consultant was also previously engaged by the Company between March 2015 and August 2016 to provide consulting services. In addition, the Consultant held options to purchase 207,055 shares of the Company’s common stock that were cashless exercised at a price of $0.06 per share on July 20, 2020 into 201,791 shares of common stock. On October 31, 2019, the consulting agreement with the Consultant was terminated as a result of the Company no longer needing these services to be provided by an outside consultant. During the term of the agreement, the Company paid to the Consultant (i) $25,000 per month for six months and issued (ii) 500,000 restricted shares of common stock at the execution of the agreement. The agreement also provided for the issuance of up to an additional 2,500,000 shares of restricted common stock upon the achievement of milestones that were to be determined by the Company and the Consultant during the term of the agreement. There are no early termination penalties incurred as a result of the termination of the consulting agreement. The Consultant may still be entitled to receive the shares after termination of the Agreement, if the achievement of milestones that commenced during the term of the Agreement are completed. On June 30, 2020, the Company issued an additional 250,000 shares of its common stock to the Consultant as part of its compensation for services. The Company recognized a total of $297,500 of expense at a fair value of $1.19 per share within professional fees related to these issuances. Founder Leak-Out Agreement On April 7, 2020, as a condition to the consummation of the Series E Preferred Agreement, the Company entered into a Leak-Out Agreement with Mr. Bret Chilcott, founder and former director and President of the Company, and Alpha with respect to the shares Mr. Chilcott beneficially owns. The restriction on the disposition of the shares is for a period of seven months from the date of the closing of the Agreement. Thereafter, for a period of an additional six months, Mr. Chilcott may sell no more than $25,000 per calendar month of shares of Company common stock. On August 26, 2020, the Company, together with Mr. Chilcott and Alpha Capital Anstalt, who was a party to the Leak Out Agreement, agreed to amend the Leak Out Agreement to change the restrictions on the disposition of Mr. Chilcott’s shares that are subject to the Leak Out Agreement (the “Amended Leak Out Agreement”). The Amended Leak Out Agreement provides that Mr. Chilcott (together with his affiliates) may sell or otherwise dispose of his shares for a period of twelve (12) months commencing on September 7, 2020 (the “Restricted Period”) in an amount representing no more than 50,000 shares per calendar month during the Restricted Period. After the Restricted Period, the restrictions set forth in the Amended Leak Out Agreement cease. Approval of Compensation by Compensation Committee Mr. Barrett Mooney and Mr. Brett Chilcott resigned from their roles with the Company, effective May 5, 2020. Mr. Mooney now serves as Chairman of the Board, and Mr. Chilcott no longer serves as management of the Company. On April 16, 2020 the Compensation Committee agreed to the following terms: Mr. Barrett Mooney: Mr. Mooney was entitled to receive his current salary and benefits between the dates of March 6, 2020 and April 4, 2020. In addition, Mr. Mooney will be paid $50,000 in cash, $25,000 of which was paid in a lump sum in April 2020 and the balance will be paid in equal installments over a six-month period beginning on May 5, 2020. Mr. Mooney will remain eligible to receive bonuses of up to $15,000, as approved by the Board of Directors based on certain revenue and operational targets being achieved. Commencing May 5, 2020 when he accepted the appointment as Chairman of the Board, Mr. Mooney is entitled to receive (i) a quarterly grant of 16,500 stock options at the fair market value of the stock on the issuance date, vesting over two years and exercisable for a period of five years; and (ii) reimbursement for travel expenses. Mr. Mooney has agreed to also provide the Company with consulting services, as needed, at a fixed price of $4,500 per month on a month-to-month basis, plus reimbursement for travel expenses. Mr. Barrett Mooney, who is currently the Chairman of the Board, receives a monthly fee for consulting services he provides to the Company, which is outside of his role as Chairman of the Board. Mr. Mooney’s consulting fee increased to $10,000 per month commencing on August 1, 2020. Mr. Bret Chilcott: Mr. Chilcott is entitled to receive a base annual salary of $140,000, plus benefits, for the twelve-month period commencing May 5, 2020 and ending May 4, 2021. Subsequent to May 4, 2021, Mr. Chilcott will provide the Company with consulting services, as needed, at a fixed fee of $4,500 per month on a month-to-month basis plus reimbursement of travel expenses. 2020 Executive Compensation Plan The Compensation Committee also approved a 2020 Executive Compensation Plan for Nicole Fernandez-McGovern, the Chief Financial Officer and EVP of Operations, and the new Chief Executive Officer the Company. The Plan is as follows, with the Cash Bonus, Option and Restricted Stock Units (RSUs) components to be dependent upon achieving certain to-be-determined financial and operational milestones: Chief Executive Officer Chief Financial Officer/ EVP of Operations Annual Salary $ 250,000 $ 200,000 Cash Bonus $ 50,000 $ 30,000 Stock Options (Quarterly Grants) 15,000 15,000 RSUs 150,000 125,000 Appointment of Chief Executive Officer and Compensatory Arrangements On April 28, 2020, the Company extended an offer of employment that was accepted by Mr. Michael Drozd to serve as the Company’s new Chief Executive Officer. Mr. Drozd officially joined the Company on May 18, 2020. The Company previously announced that Mr. Barrett Mooney would resign from his role as Chief Executive Officer effective as of May 5, 2020, but would remain with the Company as Chairman of the Board thereafter. From May 5, 2020 through May 18, 2020, Ms. Nicole Fernandez-McGovern, the Company’s Chief Financial Officer, served as Interim Chief Executive Officer until Mr. Drozd officially commenced his new role on May 18, 2020. Ms. Fernandez-McGovern did not receive any additional compensation for serving as Interim Chief Executive Officer. From 2015 through 2019, Mr. Drozd served as President of Eurofins AgBio Division, a global business focused primarily on testing for the agriculture sector (seed, plant and animals). From 2014 until 2015, he was Chief Operating Officer of Arbiom, a French biotechnology company where he restructured the organization, materially increasing overall efficiency and improving resource allocations through numerous measured steps and initiatives. Mr. Drozd served as President and CEO of Aseptia/Wright Foods from 2011 through 2014, a leading technology company in shelf-stable food processing and co-packaging. Mr. Drozd will receive a base salary of $235,000 per year, which shall be subject to annual performance review by the Compensation Committee of the Board and may be revised by the Committee, in its sole discretion. Mr. Drozd is entitled to receive an annual 20% bonus, which may be a mix of cash and stock options, based upon his performance as determined by certain metrics to be established by the Board and Mr. Drozd. He will receive an initial grant of 100,000 restricted stock units under the Company’s 2017 Omnibus Equity Incentive Plan (the “Equity Plan”), which will fully vest after one year of continued employment. Mr. Drozd is eligible to receive a quarterly award of 15,000 non-qualified stock options under the Equity Plan. At the time of issuance, the stock option award agreements will set forth the vesting, exercisability and exercise price of the stock options as of the date of the grants. On July 20, 2020, the Board of Directors of the Company, upon recommendation of the Compensation Committee, approved a change in the compensation of the directors and of Ms. Nicole Fernandez-McGovern, the Company’s Chief Financial Officer and EVP of Operations. The Compensation Committee engaged Albeck to perform an independent third-party study of compensation to assess the Company’s compensation of its Board and its executive officers in comparison to industry averages. As a result of the study, and upon the recommendation of the Compensation Committee, the Board approved an increase in Ms. Fernandez-McGovern’s annual salary from $200,000 to $220,000 and quarterly stock options from 12,500 to 15,000. In addition to the previously approved 2020 bonus structure, Ms. Fernandez-McGovern was awarded an additional performance-based bonus of $40,000, equal to 20% of her current salary. Also approved was a cash component for director compensation in the amount of $60,000 per year, payable quarterly, and an increase in quarterly stock options from 16,500 to 25,000 per director. The approved compensation is retroactive for all to July 1, 2020. As previously disclosed in an amendment to the Current Report on Form 8-K filed on April 20, 2020, Mr. Barrett Mooney, who is currently the Chairman of the Board, receives a monthly fee for consulting services he provides to the Company, which is outside of his role as Chairman of the Board. Mr. Mooney’s consulting fee has been increased to $10,000 per month commencing on August 1, 2020. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 10 — Related Party Transactions The following reflects the related party transactions during the nine months ended September 30, 2020 and 2019. The Company’s Chief Financial Officer, Nicole Fernandez-McGovern, is one of the principals of Premier Financial Filings, a full-service financial printer. Premier Financial Filings provided contracted financial services to the Company and their related expenses have been included within general and administrative expenses. For the three and nine months ended September 30, 2020, Premier Financial Filings provided services to the Company resulting in fees of $7,597 and $18,720, respectively recorded in general and administrative costs. There were $825 payables due to Premier Financials Filings as of September 30, 2020. The Company contracted external fractional CTO services to a firm whereby one of our board members is currently a shareholder. For the three and nine months ended September 30, 2020, the Company paid $25,000 and $86,000 in fees, respectively, recorded in professional fees on the condensed interim statements of operations. No expenses related to these services were incurred in 2019. Also, there are no payables due to this company as of September 30, 2020. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11 – Subsequent Events Valqari Agreement On October 14, 2020, in connection with, and as an incentive to the entry into a two-year exclusive manufacturing agreement to produce Drone Delivery Station for Valqari LLC (“Valqari”), The loan matures on April 14, 2021 (the “Maturity Date”), at which time all outstanding principal and interest that has accrued, but remains, unpaid shall be due. The Note provides for an automatic six month extension of the Maturity Date under the following circumstances (i) Valqari has received in writing, (x) a good faith acquisition offer at a consideration value greater than $15,000,000, (y) such offer, upon consummation, would result in a change in control (as defined in the note) of Valqari, and (z) at such time Valqari, is actively engaged in the negotiation or finalization of such acquisition transaction; or (ii) Valqari has initiated, or is in the process of initiating, a conversion to a “C-Corporation” under the Internal Revenue Code, whereas such conversion will be completed no later than one day prior to the extended Maturity Date. Valqari may not prepay the Note prior to the Maturity Date. In the event of a change in control or conversion of Valqari to a “C-Corporation” under the Internal Revenue Code on or before the Maturity Date, the Company may convert the outstanding principal amount of the Note and any unpaid accrued interest into (i) Class B Common Units of Valqari: immediately prior to the closing of a Change in Control or (ii) upon Valqari’s conversion to a C-Corporation, shares of Valqari common stock, in both cases at a conversion price no higher than a pre-money valuation of $15,000,000. The Note is subject to customary representations and warranties by Valqari, as well as events of default, which may lead to acceleration of the payment of the Note such as (i) failure to pay all of the outstanding principal, plus accrued interest on the Maturity Date, (ii) Valqari filing a petition or action under any bankruptcy, or other law, or (iii) an involuntary petition is filed again Valqari under any bankruptcy statute (that is not dismissed or discharged within 60 days). The indebtedness evidenced by the Note is subordinated in right of payment to the prior payment in full of any senior indebtedness (as defined in the Note) in existence on the date of the Note or incurred thereafter. Also, on October 14, 2020, AgEagle entered into a manufacturing agreement with Valqari for the manufacture and assembly of Valqari’s patented Drone Delivery Station, in accordance with the specification provided by, and the components designated by Valqari, for sale and delivery to its customers. AgEagle has been appointed as Valqari’s exclusive manufacturer of its products in the United States of America for a term of two-years, unless terminated earlier. Valqari, based in Chicago, Ilinois, is engaged in the development, manufacture and sale of a patented Drone Delivery Station, including related software, which is the only universal, standardized, safe and secure drone landing station that protects people, property and packages. |
Summary of Accounting Policies
Summary of Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation and Consolidation – The interim condensed consolidated financial statements include the accounts of AgEagle Aerial Systems Inc. and its wholly-owned subsidiaries AgEagle Aerial, Inc., EnerJex Kansas, Inc., Black Sable Energy, LLC and Black Raven Energy, Inc., which was dissolved effective November 2019. All significant intercompany balances and transactions have been eliminated in consolidation. The summary of significant accounting policies presented below is designed to assist in understanding the Company’s interim condensed consolidated financial statements. Such interim condensed consolidated financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“US GAAP”) in all material respects and have been consistently applied in preparing the accompanying interim condensed consolidated financial statements. |
Use of estimates | Use of Estimates – |
Fair Value of Financial Instruments | Fair Value of Financial Instruments – |
Cash and Cash Equivalents | Cash and Cash Equivalents – |
Receivables and Credit Policy | Receivables and Credit Polic – The Company estimates an allowance for doubtful accounts based upon an evaluation of the current status of receivables, historical experience and other factors, as necessary. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change. The Company determined that no allowance was necessary as of September 30, 2020 and December 31, 2019. |
Inventories | Inventorie – |
Goodwill and Intangible Assets | Goodwill and Intangible Assets – Intangible assets from acquired businesses are recognized at fair value on the acquisition date and consist of customer programs, trademarks, customer relationships, technology and other intangible assets. Customer programs include values assigned to major programs of acquired businesses and represent the aggregate value associated with the customer relationships, contracts, technology and trademarks underlying the associated program and are amortized on a straight-line basis over a period of expected cash flows used to measure fair value, which ranges from four to five years. |
Revenue Recognition and Concentration | Revenue Recognition and Concentration – Revenue from Contracts with Customers Under fixed-price contracts, the Company agrees to perform the specified work for a pre-determined price. To the extent the Company’s actual costs vary from the estimates upon which the price was negotiated, it will generate more or less profit or could incur a loss. The Company accounts for a contract after it has been approved by all parties to the arrangement, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company generally recognizes revenue on sales to customers, dealers and distributors upon satisfaction of performance obligations, which generally occurs once controls transfer to customers, which is when product is shipped or delivered depending on specific shipping terms. Subscription services for use of the Company’s proprietary FarmLens HempOverview Sales concentration information for customers comprising more than 10% of the Company’s total net sales is summarized below: Percent of total sales for nine months ended September 30, Customers 2020 2019 Customer A 94.4 % 55.8 % Customer B — 12.2 % No accounts receivables were due from Customer A or B as of September 30, 2020 and December 31, 2019, respectively. The table below reflects our revenue for the periods indicated by product mix. For the nine months ended September 30, Type 2020 2019 Drone Assembly and Product Sales $ 1,105,971 $ 84,745 Software Platform Sales 51,959 23,040 Total $ 1,157,930 $ 107,785 |
Vendor Concentration | Vendor Concentration – FarmLens |
Shipping Costs | Shipping Costs – |
Earnings Per Share | Earnings Per Share – |
Potentially Dilutive Securities | Potentially Dilutive Securities – |
Income Taxes | Income Taxes – |
Stock-Based Compensation Awards | Stock-Based Compensation Awards – “Compensation – Stock Compensation,” The Black-Scholes option-pricing model requires the input of certain assumptions that require the Company’s judgment, including the expected term and the expected stock price volatility of the underlying stock. The assumptions used in calculating the fair value of stock-based compensation represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change resulting in the use of different assumptions, stock-based compensation expense could be materially different in the future. |
Recently Issued Accounting Standards | Recently Issued Accounting Pronouncements Adopted In January 2016, the FASB issued ASU 2016-01, Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, FASB issued Account Standards Update 2016-02 – Leases In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other In August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement |
Summary of Accounting Policie_2
Summary of Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Sales concentration information | Sales concentration information for customers comprising more than 10% of the Company’s total net sales is summarized below: Percent of total sales for nine months ended September 30, Customers 2020 2019 Customer A 94.4 % 55.8 % Customer B — 12.2 % |
Revenue indicated by product mix | The table below reflects our revenue for the periods indicated by product mix. For the nine months ended September 30, Type 2020 2019 Drone Assembly and Product Sales $ 1,105,971 $ 84,745 Software Platform Sales 51,959 23,040 Total $ 1,157,930 $ 107,785 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consist of the following at: September 30, 2020 December 31, 2019 Raw materials $ 92,930 $ 193,022 Work-in-process 68,350 26,456 Finished goods 7,109 11,689 Gross inventory $ 168,389 $ 231,167 Less obsolete reserve (10,000 ) (10,000 ) Total $ 158,389 $ 221,167 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 4 — Property and Equipment Property and equipment consist of the following at: September 30, 2020 December 31, 2019 Property and equipment $ 197,063 $ 140,758 Less accumulated depreciation (103,405 ) (102,982 ) $ 93,658 $ 37,776 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible assets were comprised of the following at September 30, 2020: Intangible Assets Estimated Life Gross Cost Accumulated Amortization Net Book Value Intellectual property/technology 5 yrs. $ 433,400 $ (180,583 ) $ 252,817 Customer base 5 yrs. 72,000 (30,000 ) 42,000 Tradenames and trademarks 5 yrs. 58,200 (24,250 ) 33,950 Non-compete agreement 4 yrs. 160,900 (83,802 ) 77,098 Carrying value as of September 30, 2020 $ 724,500 $ (318,635 ) $ 405,865 |
Future amortization | Future amortization is as follows for fiscal years ending: 2020 (months remaining) 2021 2022 2023 Intellectual property/technology $ 21,670 $ 86,680 $ 86,680 $ 57,786 Customer base 3,600 14,400 14,400 9,600 Tradenames and trademarks 2,910 11,640 11,640 7,760 Non-compete agreement 10,057 40,225 26,817 — Total $ 38,237 $ 152,945 $ 139,537 $ 75,146 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The significant weighted average assumptions relating to the valuation of the Company’s stock options granted during the nine months ended September 30, 2020 were as follows: September 30, 2020 Dividend yield 0.00 % Expected life 3.5 Years Expected volatility 89.19 to 90.09 % Risk-free interest rate 0.16 to 0.29 % |
Summary of Stock Options | A summary of the options activity for the nine months ended September 30, 2020 is as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at January 1, 2020 2,480,470 $ 0.39 6.28 $ 378,111 Granted 481,167 1.52 4.75 — Exercised/Forfeited (851,483 ) 0.53 — — Outstanding at September 30, 2020 2,110,154 0.59 5.67 $ 3,605,844 Exercisable at period end 1,156,062 $ 0.31 5.89 $ 2,276,254 A summary of the options activity for the nine months ended September 30, 2019 is as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at January 1, 2019 1,494,158 $ 0.46 6.93 $ 409,678 Granted 1,054,000 0.37 6.61 — Exercised/Forfeited (144,688 ) 0.49 — — Outstanding at September 30, 2019 2,403,470 0.39 6.41 235,896 Exercisable at period end 1,339,467 $ 0.33 6.54 $ 226,958 |
Warrants to Purchase Common S_2
Warrants to Purchase Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Notes to Financial Statements | |
Summary of activity related to warrants | A summary of activity related to warrants for the nine months ended September 30, 2020 follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at January 1, 2020 4,531,924 $ 0.72 4.05 Issued 4,972,254 2.34 0.92 Exercised (6,481,924 ) 0.74 — Outstanding at September 30, 2020 3,022,254 2.97 0.69 Exercisable at September 30, 2020 505,476 2.97 0.69 A summary of activity related to warrants for the nine months ended September 30, 2019 follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at January 1, 2019 4,531,924 $ 0.72 5.05 Outstanding at September 30, 2019 4,531,924 0.72 4.31 Exercisable at September 30, 2019 4,531,924 0.72 4.31 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of cash Bonus, Option and RSUs | The Plan is as follows, with the Cash Bonus, Option and Restricted Stock Units (RSUs) components to be dependent upon achieving certain to-be-determined financial and operational milestones: Chief Executive Officer Chief Financial Officer/ EVP of Operations Annual Salary $ 250,000 $ 200,000 Cash Bonus $ 50,000 $ 30,000 Stock Options (Quarterly Grants) 15,000 15,000 RSUs 150,000 125,000 |
Summary of Accounting Policie_3
Summary of Accounting Policies (Details) - Sales Revenue, Net [Member] | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Customer A | ||
Concentration percentage | 94.40% | 55.80% |
Customer B | ||
Concentration percentage | 0.00% | 12.20% |
Summary of Accounting Policie_4
Summary of Accounting Policies (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues | $ 750,325 | $ 41,616 | $ 1,157,930 | $ 107,785 |
Product [Member] | ||||
Revenues | 1,105,971 | 84,745 | ||
Software Platform Sales [Member] | ||||
Revenues | $ 51,959 | $ 23,040 |
Summary of Accounting Policie_5
Summary of Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Summary Of Accounting Policies [Line Items] | |||||
Cash equivalents | $ 0 | $ 0 | $ 0 | ||
FDIC limit | 250,000 | 250,000 | |||
Allowance for doubtful accounts receivable | 0 | 0 | 0 | ||
Estimated obsolescence and shrinkage of inventory | 10,000 | $ 10,000 | |||
Shipping Costs | $ 98 | $ 240 | 6,122 | $ 271 | |
Research and Development Expenses | $ 38,948 | $ 0 | |||
Warrant [Member] | |||||
Summary Of Accounting Policies [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,022,254 | 4,531,924 | |||
Option [Member] | |||||
Summary Of Accounting Policies [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,110,154 | 2,270,665 | |||
Series C Convertible Preferred Stock [Member] | |||||
Summary Of Accounting Policies [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,636 | ||||
Convertible notes [Member] | |||||
Summary Of Accounting Policies [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 6,733,333 |
Inventories (Details)
Inventories (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 92,930 | $ 193,022 |
Work-in-process | 68,350 | 26,456 |
Finished goods | 7,109 | 11,689 |
Gross Inventory | 168,389 | 231,167 |
Less obsolete reserve | (10,000) | (10,000) |
Total inventory | $ 158,389 | $ 221,167 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Abstract] | ||
Property and equipment | $ 197,063 | $ 140,758 |
Less accumulated depreciation | (103,405) | (102,982) |
Property and equipment, net | $ 93,658 | $ 37,776 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 5,722 | $ 4,185 | $ 13,608 | $ 10,373 |
Intangible Assets (Details)
Intangible Assets (Details) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Gross Cost | $ 724,500 |
Accumulated Amortization | (318,635) |
Net Book Value | $ 405,865 |
Intellectual Property/Technology [Member] | |
Estimated Life | 5 years |
Gross Cost | $ 433,400 |
Accumulated Amortization | (180,583) |
Net Book Value | $ 252,817 |
Customer Base [Member] | |
Estimated Life | 5 years |
Gross Cost | $ 72,000 |
Accumulated Amortization | (30,000) |
Net Book Value | $ 42,000 |
Trademarks and Trade Names [Member] | |
Estimated Life | 5 years |
Gross Cost | $ 58,200 |
Accumulated Amortization | (24,250) |
Net Book Value | $ 33,950 |
Non-compete agreement [Member] | |
Estimated Life | 4 years |
Gross Cost | $ 160,900 |
Accumulated Amortization | (83,802) |
Net Book Value | $ 77,098 |
Intangible Assets (Details 1)
Intangible Assets (Details 1) | Sep. 30, 2020USD ($) |
2020 (months remaining) | $ 38,237 |
2021 | 152,945 |
2022 | 139,537 |
2023 | 75,146 |
Intellectual Property/Technology [Member] | |
2020 (months remaining) | 21,670 |
2021 | 86,680 |
2022 | 86,680 |
2023 | 57,786 |
Customer Base [Member] | |
2020 (months remaining) | 3,600 |
2021 | 14,400 |
2022 | 14,400 |
2023 | 9,600 |
Trademarks and Trade Names [Member] | |
2020 (months remaining) | 2,910 |
2021 | 11,640 |
2022 | 11,640 |
2023 | 7,760 |
Non-compete agreement [Member] | |
2020 (months remaining) | 10,057 |
2021 | 40,225 |
2022 | 26,817 |
2023 | $ 0 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 38,236 | $ 118,309 | $ 38,236 | $ 114,710 |
Weighted average remaining amortization period | 2 years 8 months 16 days |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | May 06, 2020 | Sep. 30, 2020 |
PPP | ||
Debt Instrument [Line Items] | ||
Proceeds from loan | $ 107,439 | |
Interest rate | 1.00% | |
Due date | May 6, 2022 | |
Term | 2 years | |
EnerJex | ||
Debt Instrument [Line Items] | ||
Due date | Mar. 27, 2019 | |
Principal amount | $ 125,556 | |
Accrued interest | 4,171 | |
Convertible Notes Payable | 9,028 | |
Interest expenses | 462 | |
Principal payments | $ 31,970 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | Apr. 07, 2020 | Sep. 30, 2020 |
Dividend yield | 0.00% | 0.00% |
Expected life | 3 years 6 months | 3 years 6 months |
Expected volatility | 90.00% | |
Risk-free interest rate | 0.29% | |
Minimum [Member] | ||
Expected volatility | 89.19% | |
Risk-free interest rate | 0.16% | |
Maximum [Member] | ||
Expected volatility | 90.09% | |
Risk-free interest rate | 0.29% |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - USD ($) | Oct. 04, 2017 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Options | |||||
Options Outstanding, Beginning Balance | 2,480,470 | 1,494,158 | 1,494,158 | ||
Options Granted | 481,167 | 1,054,000 | |||
Options Exercised/Forfeited | (851,483) | (144,688) | |||
Options Outstanding, Ending Balance | 2,110,154 | 2,403,470 | 2,480,470 | 1,494,158 | |
Options Exercisable at end | 1,156,062 | 1,339,467 | |||
Weighted Avg. Exercise Price | |||||
Weighted Avg. Exercise Price Outstanding, Beginning Balance | $ 0.39 | $ 0.46 | $ 0.46 | ||
Weighted Avg. Exercise Price Granted | $ 0.06 | 1.52 | 0.37 | ||
Weighted Avg. Exercise Price Exercised/Forfeited | 0.53 | 0.49 | |||
Weighted Avg. Exercise Price Outstanding, Ending balance | 0.59 | 0.39 | $ 0.39 | $ 0.46 | |
Weighted Avg. Exercise Price Exercisable at end | $ 0.31 | $ 0.33 | |||
Weighted Average Remaining Contractual Term | |||||
Weighted Average Remaining Contractual Term Outstanding | 5 years 8 months 2 days | 6 years 4 months 28 days | 6 years 3 months 11 days | 6 years 11 months 4 days | |
Weighted Average Remaining Contractual Term Granted | 4 years 9 months | 6 years 7 months 10 days | |||
Weighted Average Remaining Contractual Term Exercisable at end | 5 years 10 months 21 days | 6 years 6 months 14 days | |||
Aggregate Intrinsic Value | |||||
Aggregate Intrinsic Value Outstanding, Beginning Balance | $ 378,111 | $ 409,678 | $ 409,678 | ||
Aggregate Intrinsic Value Granted | 0 | 0 | |||
Aggregate Intrinsic Value Granted Exercised/Forfeited | 0 | 0 | |||
Aggregate Intrinsic Value Outstanding, at end | 3,605,844 | 235,896 | $ 378,111 | $ 409,678 | |
Aggregate Intrinsic Value Exercisable at end | $ 2,276,254 | $ 226,958 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Aug. 04, 2020 | May 11, 2020 | Apr. 13, 2020 | Apr. 07, 2020 | May 11, 2018 | Oct. 04, 2017 | Jun. 24, 2020 | Apr. 30, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Jul. 15, 2020 |
Option available under plan | 3,000,000 | 3,000,000 | ||||||||||||
Cash compensation | $ 500,000 | |||||||||||||
Reserved for issuance | 4,000,000 | |||||||||||||
Option granted | 481,167 | 1,054,000 | ||||||||||||
Term | 4 years 9 months | 6 years 7 months 10 days | ||||||||||||
Exercise price | $ 0.06 | $ 1.52 | $ 0.37 | |||||||||||
Modification of options to purchase common stock | 207,055 | |||||||||||||
Stock-based compensation expense | $ 264,389 | $ 217,375 | ||||||||||||
Future expected stock-based compensation expense | 535,658 | 535,658 | ||||||||||||
Accumulated accrued dividends | $ 69,778 | $ 121,333 | ||||||||||||
Accrued dividends | $ 0 | $ 0 | $ 163,555 | |||||||||||
Restricted common stock description | Company issued in connection with the 2019 Executive Compensation Plan, 100,000 restricted shares to Mr. Barrett Mooney and 70,000 restricted shares to Ms. Nicole Fernandez-McGovern. The Company recognized a total of $59,500 of expense at a fair value of $0.35 per share within stock compensation costs related to these issuances. | Company issued in connection with a consulting agreement, dated May 3, 2019, 250,000 shares of its common stock to the consulting company as a part of their compensation for services. The Company recognized a total of $297,500 of expense at a fair value of $1.19 per share related to these issuances. within general and administrative costs on the condensed interim consolidated statements of operations. In addition, the Consultant also held options to purchase 207,055 shares of the Company’s common stock that were cashless exercised at a price of $0.06 per share on July 20, 2020 into 201,791 shares of common stock. | ||||||||||||
Dividend yield | 0.00% | 0.00% | ||||||||||||
Expected life | 3 years 6 months | 3 years 6 months | ||||||||||||
Expected volatility | 90.00% | |||||||||||||
Risk-free interest rate | 0.29% | |||||||||||||
Option exercise | 1,156,062 | 1,339,467 | 1,156,062 | 1,339,467 | ||||||||||
Number of option converted | 466,344 | |||||||||||||
Number of shares issued | 430,220 | |||||||||||||
Weighted average exercise price | $ 0.22 | |||||||||||||
Proceeds from option exercises | $ 47,400 | $ 0 | ||||||||||||
Investors | ||||||||||||||
Stock description | Company and an institutional investor and existing Company stockholder (the “Investor”) entered into a Purchase Agreement pursuant to which the Company agreed to sell to the Investor in a registered direct offering 3,355,705 shares of common stock and warrants to purchase up to 2,516,778 shares of Common Stock at an exercise price of $3.30 per share (the “Warrants”), for proceeds of $9,900,000 net of issuance costs of $100,000. Upon exercise of the Warrants in full by the Investor, the Company will receive additional gross proceeds of approximately $8,305,367. The shares of Common Stock underlying the Warrants are referred to as “August Warrant Shares.” | |||||||||||||
Proceeds from exercise of warrants | $ 9,900,000 | |||||||||||||
Alpha Capital Anstalt [Member] | ||||||||||||||
Common stock issued upon conversion of preferred stock (shares) | 13,247,984 | |||||||||||||
Preferred stock converted (shares) | 3,312 | |||||||||||||
Maximum [Member] | ||||||||||||||
Expected volatility | 90.09% | |||||||||||||
Risk-free interest rate | 0.29% | |||||||||||||
Minimum [Member] | ||||||||||||||
Expected volatility | 89.19% | |||||||||||||
Risk-free interest rate | 0.16% | |||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||
Stock description | Company and an institutional investor and existing Company shareholder (the “Investor”) entered into a securities purchase agreement (the “Purchase Agreement”) pursuant to which the Company agreed to sell to the Investor in a registered direct offering 2,400,000 shares of common stock, par value $0.001, and pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 3,260,377 shares of common stock, for gross proceeds of approximately $6 million (which includes subsequent payment of the exercise price of the Pre-Funded Warrants in the amount of $3,267). The purchase price for each share of common stock was $1.06 and the purchase price for each Pre-Funded Warrant was $1.05999. The exercise price for each Warrant was $0.001. Net proceeds from the sale were used to repurchase 262 shares of the Company’s Series E Preferred Stock, convertible into 1,048,000 shares of common stock currently held by the Investor at a repurchase price of $1.06 per share of common stock (see below). The Company expects to use the balance for working capital and general corporate purposes. The Company increased net loss available to common stockholders’ in computing earnings per share for the excess of the consideration paid for the Series E Preferred Stock over its carrying value totaling $848,880 as presented on the condensed interim consolidated statements of operations. | Company and the Investor entered into a Purchase Agreement pursuant to which the Company agreed to sell to the Investor in a registered direct offering 4,407,400 shares of common stock, par value $0.001, pre-funded warrants to purchase up to 1,956,236 shares of common stock, and warrants (the “Warrants”) to purchase up to 2,455,476 shares of common stock at an exercise price of $1.35 per share, for gross proceeds of $7 million (which includes subsequent payment of the exercise price of the Pre-Funded Warrants in the amount of $1,956) and net proceeds of $6,950,000 after issuance costs. Upon exercise of the Warrants in full by the Investor, the Company will receive additional gross proceeds of $3,314,892. The shares of common stock underlying the Pre-Funded Warrants and the Warrants are referred to as “June Warrant Shares.” | ||||||||||||
Series C Convertible Preferred Stock [Member] | ||||||||||||||
Common stock issued upon conversion of preferred stock (shares) | 3,500,000 | |||||||||||||
Preferred stock converted (shares) | 1,890 | |||||||||||||
Shares converted amount | $ 233,333 | |||||||||||||
Accumulated accrued dividends | 163,555 | $ 0 | ||||||||||||
Stock description | Series E Preferred Stock, (the “Series E Preferred Stock”) offering (see below), a subsequent anti-dilution provision was triggered for the Series C Preferred Stock whereby the conversion price was further adjusted from $0.54 per share to $0.25 per share (a “Down Round), which resulted in approximately 13,248,000 shares of common stock being issuable upon conversion of the remaining Series C Preferred Stock. As a result of this Down Round being triggered, the Company recorded a deemed dividend in the amount of $3,841,920 representing the intrinsic spread between the previous conversion price of $.54 and the adjusted conversion price of $.25 multiplied by approximately 13,248,000 common stock shares issuable upon conversion. | |||||||||||||
Series C Convertible Preferred Stock [Member] | Alpha Capital Anstalt [Member] | ||||||||||||||
Common stock issued upon conversion of preferred stock (shares) | 2,879 | |||||||||||||
Common stock issued upon conversion of preferred stock (shares) | $ 250,000 | |||||||||||||
Additional Common stock issued upon conversion of preferred stock (shares) | 163,265 | |||||||||||||
Additional Preferred stock converted (shares) | 250 | |||||||||||||
Series C Convertible Preferred Stock [Member] | AgEagle | ||||||||||||||
Common stock issued upon conversion of preferred stock (shares) | 1,471,425 | |||||||||||||
Preferred stock converted (shares) | 2,879 | |||||||||||||
Additional Common stock issued upon conversion of preferred stock (shares) | 3,020,797 | |||||||||||||
Additional Preferred stock converted (shares) | 4,000 | |||||||||||||
Financing cost | $ 4,000,000 | |||||||||||||
Series E Convertible Preferred Stock [Member] | ||||||||||||||
Stock description | Company entered into a Securities Purchase Agreement with Alpha, pursuant to the terms of the Agreement, the Board of Directors of the Company authorized 1,050 shares of a newly designated series of preferred stock, the Series E Convertible Preferred Stock. The Preferred Stock was convertible at $0.25 per share into an aggregate of 4,200,000 shares of the common stock, par value $0.001 per share. The purchase price for the Preferred Stock was $1,050,000 of which the Company received net proceeds of $1,010,000. The Preferred Stock has liquidation rights senior to the common stock, but pari passu with the Series C Preferred Stock and the Series D Preferred Stock. The Preferred Stock has no voting rights. The conversion price adjusts for stock splits and combinations and is subject to anti-dilution protection for subsequent equity issuances until such time as no shares of Series E Preferred Stock are outstanding. The Certificate of Designation of the Series E Convertible Preferred Stock was filed with the State of Nevada on April 2, 2020.The Company also entered into a Registration Rights Agreement, granting registration rights to Alpha with respect to the Conversion Shares and common stock underlying warrants currently owned by Alpha. | |||||||||||||
Series D Convertible Preferred Stock [Member] | ||||||||||||||
Accumulated accrued dividends | $ 3,763,591 | |||||||||||||
Series C Convertible Preferred Stock [Member] | Alpha Capital Anstalt [Member] | ||||||||||||||
Common stock issued upon conversion of preferred stock (shares) | 350,000 | |||||||||||||
Preferred stock converted (shares) | 189 | |||||||||||||
Series A Preferred Stock [Member] | AgEagle | ||||||||||||||
Common stock issued upon conversion of preferred stock (shares) | 1,471,425 | |||||||||||||
Preferred Stock Series D | ||||||||||||||
Stock description | During the three months ended September 30, 2020, the Series D Preferred Stockholders converted the remaining 110 shares of the Series D Preferred Stock into 635,815 shares of common stock at a conversion price of $0.54 which includes an additional 421,308 of common stock shares to correct conversions that occurred in June 2020 computed using the stated value of $1,000 rather than $1,116.67. | |||||||||||||
June Warrant [Member] | ||||||||||||||
Exercise price | $ 1.35 | |||||||||||||
Proceeds from exercise of warrants | $ 2,632,500 | |||||||||||||
Number of shares exercised | 1,950,000 | |||||||||||||
Number of Warrant outstanding | 505,476 | 505,476 | ||||||||||||
2017 Omnibus Equity Incentive Plan [Member] | ||||||||||||||
Fair-value of options | $ 134,000 | |||||||||||||
Stock-based compensation expense | $ 33,688 | $ 49,794 | ||||||||||||
Future expected stock-based compensation expense | 84,206 | 84,206 | ||||||||||||
Fair value of restricted stock units | $ 134,000 | |||||||||||||
Directors and employees [Member] | ||||||||||||||
Option exercise | 430,220 | 430,220 | ||||||||||||
Employees and directors one [Member] | ||||||||||||||
Option to purchase stock | $ 481,167 | 1,054,000 | ||||||||||||
Fair-value of options | 439,530 | 248,761 | ||||||||||||
Stock-based compensation expense | $ 56,115 | $ 15,873 | 185,014 | 32,362 | ||||||||||
Fair value of restricted stock units | $ 439,530 | $ 248,761 | ||||||||||||
Employees and directors one [Member] | Maximum [Member] | ||||||||||||||
Exercise price | $ 0.41 | $ 0.29 | ||||||||||||
Expiration date | Feb. 23, 2025 | Dec. 31, 2023 | ||||||||||||
Employees and directors one [Member] | Minimum [Member] | ||||||||||||||
Exercise price | $ 3.10 | $ 0.54 | ||||||||||||
Expiration date | Jun. 29, 2025 | Mar. 28, 2029 | ||||||||||||
Employees and directors one [Member] | Equity Option [Member] | ||||||||||||||
Stock-based compensation expense | $ 64,248 | $ 125,833 |
Warrants to Purchase Common S_3
Warrants to Purchase Common Stock (Details) - $ / shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Warrants | ||||
Warrants Outstanding, Beginning Balance | 4,531,924 | 4,531,924 | 4,531,924 | |
Warrants Issued | 4,972,254 | |||
Warrants Exercised | (6,481,924) | |||
Warrants Outstanding, Ending Balance | 3,022,254 | 4,531,924 | 4,531,924 | 4,531,924 |
Warrants Exercisable at end | 505,476 | 4,531,924 | ||
Weighted Avg. Exercise Price | ||||
Weighted Avg. Exercise Price Outstanding, Beginning Balance | $ 0.72 | $ 0.72 | $ 0.72 | |
Weighted Avg. Exercise Price, Warrants Issued | 2.34 | |||
Weighted Avg. Exercise Price, Warrants Exercised | 0.74 | |||
Weighted Avg. Exercise Price Outstanding, Ending balance | 2.97 | 0.72 | $ 0.72 | $ 0.72 |
Weighted Avg. Exercise Price Exercisable at end | $ 2.97 | $ 0.72 | ||
Weighted-Average Remaining Contractual Term | ||||
Weighted-Average Remaining Contractual Term Outstanding | 8 months 9 days | 4 years 3 months 22 days | 4 years 18 days | 5 years 18 days |
Weighted-Average Remaining Contractual Term Issued | 11 months 1 day | |||
Weighted-Average Remaining Contractual Term Exercisable at end | 8 months 9 days | 4 years 3 months 22 days |
Warrants to Purchase Common S_4
Warrants to Purchase Common Stock (Details Narrative) - USD ($) | Aug. 04, 2020 | Jun. 24, 2020 | Sep. 30, 2020 |
Number of warrant converted | 6,481,924 | ||
Number of shares issued | 5,303,455 | ||
Weighted average conversion price | $ 0.74 | ||
Investors | |||
Warrant Issued | 2,516,778 | ||
Warrant exercise price | $ 3.30 | ||
Proceeds from warrant exercise | $ 8,305,367 | ||
Number of Warrant outstanding | 2,516,778 | ||
June Warrant [Member] | |||
Warrant Issued | 2,455,476 | ||
Warrant exercise price | $ 1.35 | $ 1.35 | |
Proceeds from warrant exercise | $ 2,632,500 | ||
Number of shares exercised | 1,950,000 | ||
Number of Warrant outstanding | 505,476 |
Commitments & Contingencies (De
Commitments & Contingencies (Details) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Chief Executive Officer [Member] | |
Annual Salary | $ 250,000 |
Cash Bonus | 50,000 |
Stock Options (Quarterly Grants) | 15,000 |
RSU | 150,000 |
Chief Financial Officer [Member] | |
Annual Salary | 200,000 |
Cash Bonus | 30,000 |
Stock Options (Quarterly Grants) | 15,000 |
RSU | $ 125,000 |
Commitments & Contingencies (_2
Commitments & Contingencies (Details Narrative) - USD ($) | Apr. 07, 2020 | May 03, 2019 | Jul. 20, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Aug. 03, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Line Items] | |||||||
Operating Leases, Rent Expense | $ 23,100 | $ 22,500 | |||||
Periodic payment | $ 500 | ||||||
Lease termination date | Sep. 30, 2019 | ||||||
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | |||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||
Base salary description | Mr. Drozd will receive a base salary of $235,000 per year, which shall be subject to annual performance review by the Compensation Committee of the Board and may be revised by the Committee, in its sole discretion. Mr. Drozd is entitled to receive an annual 20% bonus, which may be a mix of cash and stock options, based upon his performance as determined by certain metrics to be established by the Board and Mr. Drozd. He will receive an initial grant of 100,000 restricted stock units under the Company’s 2017 Omnibus Equity Incentive Plan (the “Equity Plan”), which will fully vest after one year of continued employment. Mr. Drozd is eligible to receive a quarterly award of 15,000 non-qualified stock options under the Equity Plan. At the time of issuance, the stock option award agreements will set forth the vesting, exercisability and exercise price of the stock options as of the date of the grants. | ||||||
Investors | |||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||
Security deposit | $ 9,720 | ||||||
Consulting Agreement [Member] | |||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||
Option Exercise price | $ 0.06 | ||||||
Option to purchase stock | $ 207,055 | ||||||
Number of common stock issued | 201,791 | ||||||
Expiration date | Jul. 20, 2020 | ||||||
Securities Purchase Agreement [Member] | Series E Convertible Preferred Stock [Member] | |||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||
Common stock issued upon conversion of preferred stock (shares) | 4,200,000 | ||||||
Preferred stock, shares authorized | 1,050 | ||||||
Conversion Price | $ 0.25 | ||||||
Common stock, par value | $ 0.001 | ||||||
Purchase Price | $ 1,050,000 | ||||||
Alpha Capital Anstalt [Member] | |||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||
Common stock issued upon conversion of preferred stock (shares) | 13,247,984 | ||||||
Preferred stock converted (shares) | 3,312 | ||||||
Base salary description | Board approved an increase in Ms. Fernandez-McGovern’s annual salary from $200,000 to $220,000 and quarterly stock options from 12,500 to 15,000. In addition to the previously approved 2020 bonus structure, Ms. Fernandez-McGovern was awarded an additional performance-based bonus of $40,000, equal to 20% of her current salary. Also approved was a cash component for director compensation in the amount of $60,000 per year, payable quarterly, and an increase in quarterly stock options from 16,500 to 25,000 per director. The approved compensation is retroactive for all to July 1, 2020. | ||||||
GreenBlock Capitalt [Member] | Consulting Agreement [Member] | |||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||
Consulting, Description | Consultant shall receive (i) $25,000 per month during the term of the agreement, (ii) 500,000 shares of restricted common stock upon execution of the agreement, and (iii) up to 2,500,000 shares of restricted common stock upon the achievement of predetermined milestones. |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
General and administrative expenses | $ 626,605 | $ 396,432 | $ 1,782,926 | $ 1,305,221 |
Professional fess | 254,532 | $ 152,192 | 958,436 | 531,885 |
Chief Technical Officer | ||||
Professional fess | 25,000 | 86,000 | ||
Premier Financial Filings | ||||
Related party payables | $ 235,896 | 235,896 | ||
Premier Financial Filings | Chief Financial Officer | Nicole Fernandez-McGovern | ||||
General and administrative expenses | $ 7,597 | $ 18,720 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - Valqari - Note | Oct. 14, 2020USD ($) |
Principal aggregate amount | $ 500,000 |
Loan maturity date | Apr. 14, 2021 |
Pre-money valuation | $ 15,000,000 |