0001213900-21-046335.txt : 20210902 0001213900-21-046335.hdr.sgml : 20210902 20210902133536 ACCESSION NUMBER: 0001213900-21-046335 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 55 CONFORMED PERIOD OF REPORT: 20200331 FILED AS OF DATE: 20210902 DATE AS OF CHANGE: 20210902 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOXSCORE BRANDS, INC. CENTRAL INDEX KEY: 0001487718 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-NONSTORE RETAILERS [5960] IRS NUMBER: 223956444 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-165972 FILM NUMBER: 211232509 BUSINESS ADDRESS: STREET 1: 1080 N. BATAVIA STREET, SUITE A CITY: ORANGE STATE: CA ZIP: 92867 BUSINESS PHONE: (855) 558-8363 MAIL ADDRESS: STREET 1: 1080 N. BATAVIA STREET, SUITE A CITY: ORANGE STATE: CA ZIP: 92867 FORMER COMPANY: FORMER CONFORMED NAME: U-Vend, Inc. DATE OF NAME CHANGE: 20140521 FORMER COMPANY: FORMER CONFORMED NAME: INTERNET MEDIA SERVICES, INC. DATE OF NAME CHANGE: 20100323 10-Q 1 f10q0320_boxscorebrands.htm QUARTERLY REPORT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION  

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2020

 

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

  

Commission File Number: 333-165972

 

BOXSCORE BRANDS, INC.

(Exact name of Registrant as specified in its charter)

 

Delaware   22-3956444
(State or Other Jurisdiction of
Incorporation or Organization)
  (IRS Employer
Identification No.)

 

3275 S. Jones Blvd, Suite 104, Las Vegas, NV   89146
(Address of principal executive offices)    (Zip Code)

 

800-998-7962

(Registrant’s telephone number, including area code)

 

1759 Clear River Falls Lane, Henderson, NV 89012

(Former Name, Former Address and Former Fiscal Year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes     No 

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes     No 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer  Accelerated filer 
Non-accelerated filer  Smaller reporting company 
  Emerging growth company 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes    No  

 

The number of shares outstanding of the registrant’s common stock, $0.001 par value per share, was 226,604,039 as of September 2, 2021.

  

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
None        
         
         

 

 

 

 

BOXSCORE BRANDS, INC.

FORM 10-Q

For the Three Months Ended March 31, 2020

 

INDEX

 

  PAGE
 
PART I - FINANCIAL INFORMATION 1
 
Item 1. Financial Statements 1
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 18
   
Item 3. Quantitative and Qualitative Disclosure About Market Risk 22
   
Item 4. Controls and Procedures 22
   
PART II – OTHER INFORMATION 23
   
Item 2. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities 23
   
Item 3. Defaults Upon Senior Securities 23
   
Item 4. Mine Safety Disclosures 23
   
Item 5. Other Information 23
   
Item 6. Exhibits 23
   
SIGNATURES 24
   
EXHIBIT INDEX  

 

i

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

BOXSCORE BRANDS, INC.

 

Condensed Consolidated Balance Sheets

(Unaudited)

 

   March 31,   December  31, 
Assets  2020   2019 
Current assets        
Cash  $-   $- 
Accounts receivable   -    1,530 
Prepaid expenses and other assets   7,789    7,789 
Total current assets   7,789    9,319 
Noncurrent assets          
Property and equipment (net)   61,600    91,673 
Total assets  $69,389   $100,992 
           
Liabilities and Stockholders’ Deficit          
Current liabilities:          
Accounts payable  $348,247   $278,188 
Accrued expenses   382,361    399,551 
Accrued interest   1,351,714    1,205,325 
Other amounts due to related parties   -    67,022 
Senior convertible notes, net of discount   443,804    443,804 
Promissory notes payable   521,081    520,537 
Convertible notes payable, net of discount   3,938,328    3,867,316 
Current capital lease obligation   114,681    104,379 
Total current liabilities   7,100,216    6,886,122 
           
Noncurrent liabilities:          
Convertible notes payable, net of discount   1,082,527    1,089,699 
Capital lease obligation   55,748    76,471 
Derivative liabilities   13,947    13,553 
Total noncurrent liabilities   1,152,222    1,179,723 
           
Total Liabilities   8,252,438    8,065,845 
           
Stockholders’ deficit          
Common stock, $.001 par value, 600,000,000 shares authorized, 37,717,755 and 37,717,755 shares issued and outstanding, respectively   37,716    37,716 
Additional paid in capital   6,195,573    6,195,573 
Accumulated deficit   (14,416,338)   (14,198,142)
Total stockholders’ deficit   (8,183,049)   (7,964,853)
Total liabilities and stockholders’ deficit  $69,389   $100,992 

 

The accompanying notes are an integral part of the condensed consolidated unaudited financial statements.

 

1

 

 

BOXSCORE BRANDS, INC.

 

Condensed Consolidated Statements of Operations

(Unaudited)

 

   Three Months Ended   Three Months Ended 
   March 31,   March 31, 
   2020   2019 
Revenue  $-   $49,773 
           
Cost of goods sold   -    64,399 
           
Gross Profit (Loss)   -    (14,626)
           
Operating Expenses          
Selling   -    61,474 
General and administrative   51,582    114,612 
Depreciation   -    62,728 
Total operating expenses   51,582    238,814 
           
Operating loss   (51,582)   (253,440)
           
Other Expenses (Income)          
Loss on change in fair value of derivative liabilities   394    338,063 
Gain on settlement of liabilities   -    (156,709)
Loss on sale of assets   12,074    27,465 
Amortization and accretion of debt discount and deferred financing costs   2,657    134,292 
Interest expense   151,489    163,105 
Total other expenses (income)   166,614    506,216 
           
Income (loss) from operations before income taxes   (218,196)   (759,656)
           
Provision for income taxes   -    - 
           
Net income (loss)  $(218,196)  $(759,656)
           
Net loss per share – basic and diluted  $(0.01)  $(0.02)
           
Weighted average common shares – basic and diluted   37,717,755    34,340,619 

 

The accompanying notes are an integral part of the condensed consolidated unaudited financial statements.  

 

2

 

 

BOXSCORE BRANDS, INC.

 

Consolidated Statements of Changes in Stockholders’ Deficit

(Unaudited)

 

   Common Stock   Additional       Total 
   Shares   Amount   Paid in Capital   Accumulated Deficit   Stockholders' Deficit 
Balance as of December 31, 2018   32,176,659   $32,177   $5,692,058   $(12,301,991)  $(6,577,756)
Shares issued for services   2,871,096    2,871    38,132    -    41,003 
Shares issued for note conversion   400,000    400    19,600    -    20,000 
Reclassification of warrant liability to equity related to adoption of ASU 2017-11   -    -    118,675    -    118,675 
Net loss   -    -    -    (759,656)   (759,656)
Balance as of March 31, 2019   35,447,755   $35,448   $5,868,465   $(13,061,647)  $(7,157,734)
                          
Balance as of December 31, 2019   37,717,755   $37,716   $6,195,573   $(14,198,142)  $(7,964,853)
Net loss   -    -    -    (218,196)   (218,196)
Balance as of March 31, 2020   37,717,755   $37,716   $6,195,573   $(14,416,338)  $(8,183,049)

 

The accompanying notes are an integral part of the condensed consolidated unaudited financial statements.

 

3

 

 

BOXSCORE BRANDS, INC.

 

Condensed Consolidated Statements of Cash Flows

(Unaudited)

  

   Three Months Ended   Three Months Ended 
   March 31,   March 31, 
   2020   2019 
Cash Flows from Operating Activities        
Net loss  $(218,196)  $(759,656)
Adjustments to reconcile net loss to net cash used in operating activities:          
Stock based compensation   -    41,003 
Depreciation   -    62,728 
Amortization and accretion of debt discount and deferred financing costs   2,657    134,292 
Gain on settlement of liabilities   -    (156,709)
Loss on default of convertible notes   -    42,625 
Gain on change in fair value of derivative liabilities   394    338,063 
Loss on sale of assets   12,074    27,465 
Changes in operating assets and liabilities:          
Accounts receivable   1,530    25,651 
Inventory   -    59,135 
Prepaid expenses and other assets   -    13,636 
Accounts payable and accrued expenses   107,095    (225,934)
Accrued interest   146,389    110,972 
Other amounts due to related parties   (67,022)   (56,798)
Net cash used in operating activities   (15,079)   (343,527)
           
Cash Flows from Investing Activities:          
Proceeds from sale of property and equipment   18,000    350,000 
Net cash provided by investing activities   18,000    350,000 
           
Cash Flows from Financing Activities          
Proceeds from promissory notes   -    270,000 
Proceeds from convertible notes   7,500    75,000 
Repayments of capital lease obligations   (10,421)   (173,994)
Repayments of promissory notes   -    (226,593)
Net cash provided by (used in) financing activities   (2,921)   (55,587)
           
Net increase (decrease) in cash   -    (49,114)
           
Cash, beginning of period   -    63,078 
           
Cash, end of period  $-   $13,964 
           
Supplemental disclosures:          
Interest paid  $-   $- 
Income taxes paid  $-   $- 
Supplemental disclosures of non-cash investing and financing activities:          
Accounts payable and accrued payable exchanged for convertible note  $54,227   $60,000 
Note payable converted to equity  $-   $20,000 

 

The accompanying notes are an integral part of the condensed consolidated unaudited financial statements.

 

4

 

 

BOXSCORE BRANDS, INC.

Notes to Condensed Consolidated Financial Statements

For the Three Ended March 31, 2020 and 2019

(Unaudited)

 

Note 1 – Nature of the Business

 

BoxScore Brands, Inc. (formerly U-Vend Inc.) (the “Company”) formerly developed, marketed and distributed various self-serve electronic kiosks and mall/airport co-branded islands throughout North America. Due to the nationwide shutdown related to the COVID-19 pandemic, the Company spent a portion of 2020 restructuring and retiring certain corporate debt and obligations. The Company focused on implementing a new operational direction.  After a thorough evaluation process, the Company found that there is a substantial long-term demand for specific commodities relating to battery and new energy technologies. This presents a timely and unique opportunity based on rising demand characteristics.  By capitalizing on market trends and current sustainable energy government mandates and environmental, social and corporate governance (ESG) initiatives, we will focus on bringing a vertically-integrated solution to market.

  

Asset Sale

 

On March 18, 2019, the Company approved an asset sale of the assets related to the legacy MiniMelts brand for $350,000 in cash, which was approved by a majority of its stockholders. These MiniMelts assets generated 100% of the revenue reported during the year ended December 31, 2019. During the year ended December 31, 2018, MiniMelts sales accounted for approximately $1,100,000, or 85%, of the revenue reported during that period. Part of the proceeds from the sale was used to retire certain lease obligations as well as for general operating purposes.

 

Note 2 – Summary of Significant Accounting Policies

 

Basis of Presentation and Principles of Consolidation

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments consisting of normal recurring accruals considered necessary for a fair and non-misleading presentation of the financial statements have been included. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The balance sheet as of December 31, 2019 has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements. These interim consolidated financial statements should be read in conjunction with the December 31, 2019 audited consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on May 12, 2021.

 

The accompanying consolidated financial statements include the accounts of BoxScore Brands, Inc. and the operations of its wholly owned subsidiaries, U-Vend America, Inc., U-Vend Canada, Inc., and U-Vend USA LLC. All intercompany balances and transactions have been eliminated in consolidation.

  

Use of Estimates

 

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates and be based on events different from those assumptions. Future events and their effects cannot be predicted with certainty; estimating, therefore, requires the exercise of judgment. Thus, accounting estimates change as new events occur, as more experience is acquired, or as additional information is obtained.

 

Property and Equipment

 

Property and equipment are stated at cost less depreciation. Depreciation is provided using the straight-line method over the estimated useful life of the assets. Equipment has estimated useful live between three and seven years. Expenditures for repairs and maintenance are charged to expense as incurred.

 

5

 

 

Impairment of Long-lived Assets

 

Long-lived assets, such as property and equipment and intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount to the estimated future undiscounted cash flows expected to be generated by the asset group. If it is determined that an asset group is not recoverable, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds its fair value.

 

Common Shares Issued and Earnings Per Share

 

Common shares issued are recorded based on the value of the shares issued or consideration received, whichever is more readily determinable. The Company presents basic and diluted earnings per share. Basic earnings per share reflect the actual weighted average of shares issued and outstanding during the period. Diluted earnings per share are computed including the number of additional shares that would have been outstanding if dilutive potential shares had been issued. In a loss period, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potential common shares is anti-dilutive.

 

As of March 31, 2020 and December 31, 2019, respectively, there were approximately 159.9 million shares potentially issuable under convertible debt agreements, options, and warrants that could dilute basic earnings per share in the future that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive to the Company’s losses during the periods presented.

 

Preferred Stock Authorized

 

The Company has authorization for “blank check” preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to common stock. As of March 31, 2020 and December 31, 2019, there are 10,000,000 shares of preferred stock authorized, and no shares issued or outstanding.

 

Derivative Financial Instruments

 

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. Certain warrants issued by the Company contain terms that result in the warrants being classified as derivative liabilities for accounting purposes. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks.

 

Fair Value of Financial Instruments

 

For certain of the Company’s financial instruments, including cash and equivalents, accounts receivable, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:

 

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis

 

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.

 

Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). Level 3 instruments include derivative warrant instruments. The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2.

 

6

 

 

Certain of the Company’s debt and equity instruments include embedded derivatives that require bifurcation from the host contract under the provisions of ASC 815-40, “Derivatives and Hedging.” Certain warrants were issued between June 2013 and December 2014 were derivative liabilities outside the exception of applying ASU 2017-11, “Accounting for Certain Financial Instruments with Down Round Features.” When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. On January 1, 2020, the Company adopted ASU 2017-11 on its consolidated financial statements and reclassified $118,675 as equity form derivative liabilities. The estimated fair value of the derivative warrant instruments was calculated using a Black Scholes valuation model.

 

The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis As of March 31, 2020 and December 31, 2019 31, 2019:

 

   Carrying   Fair Value Measurement at 
   Value   March 31, 2020 
       Level 1   Level 2   Level 3 
                     
Derivative liabilities, debt and equity instruments  $13,947           $13,947 

 

   Carrying   Fair Value Measurement at 
   Value   December 31, 2020 
       Level 1   Level 2   Level 3 
                     
Derivative liabilities, debt and equity instruments  $13,553           $13,553 

 

Stock-Based Compensation

 

The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation,” that requires all stock-based awards granted to employees, directors, and non-employees to be measured at grant date fair value of the equity instrument issued, and recognized as expense. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period of the award, which is generally equivalent to the vesting period. The fair value of each stock option granted is estimated using the Black-Scholes option pricing model. The measurement date for the non-forfeitable awards to nonemployees that vest immediately is the date the award is issued.

 

Gain on Liabilities Settlement

 

During the three months ended March 31, 2019, creditors forgave aggregate amount of $156,709, of which approximately $64,000 were associated accrued expenses, $45,000 related to conversion of approximately $105,000 of accounts payable to a $60,000 convertible note, and $47,000 was connected to forgiveness of accounts payable.

 

Other amounts due to related parties

 

Amounts due from related parties represent past amounts owed for compensation and operating expenses paid by the related party on behalf of the Company. During the year ended December 31, 2019, the Company reclassified approximately $185,000 from due to related parties to accrued expenses, as a result of the individual no longer being an officer of the Company during 2019, and paid net $63,370 to related parties, resulting in a balance of $67,022 owed at December 31, 2019. During the three months ended March 31, 2020, this amount was reclassed to accrued expenses.

 

Revenue Recognition

 

Revenue is recognized at the time each vending transaction occurs, the payment method is approved, and the product is disbursed from the machine. Wholesale revenue, including revenue earned under contracts with major sports organizations, are recognized at the time the products are delivered to the customer based on the agreement with the customer. We recognize revenue under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), the core principle of which is that an entity should recognize revenue to depict the transfer of control for promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the revenue recognition principles, an entity is required to identify the contract(s) with a customer, identify the performance obligations, determine the transaction price, allocate the transaction price to the performance obligations and recognize revenue as the performance obligations are satisfied (i.e., either over time or at a point in time). ASC 606 further requires that companies disclose sufficient information to enable readers of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. 

 

7

 

 

Recently Issued and Adpoted Accounting Pronouncements

 

In February 2016, the FASB issued ASU 2016-02, “Leases”, which requires that lease arrangements longer than 12 months result in an entity recognizing a right-of-use asset and liability. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2019, and early adoption is permitted. As of the reporting date, the Company has not adopted ASU 2016-02 and has elected to defer implementation until January 1, 2022, as allowed by ASU 2019-10. The Company is still determining the impact ASC 842 will have on its financial position, results of operations, and cash flows.

 

In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception, (ASU 2017-11).” Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company adopted ASU 2017-11 on its consolidated financial statements. Upon adoption the Company derecognized 39,512,502 number of warrants based on review of contracts that determined the derivative treatment was specific to a feature in the instrument that reduced the strike price if the Company issued additional shares for an amount less than the strike price. As a result of this analysis the Company recorded a cumulative effect adjustment of $118,675 on January 1, 2019.

 

The Company has examined all other recent accounting pronouncements and determined that they will not have a material impact on its financial position, results of operations, or cash flows.

 

Note 3 – Going Concern

 

The accompanying consolidated financial statements have been prepared on a going concern basis. The Company reported net loss of $218,196 for the three months ended March 31, 2020 and has incurred accumulated losses totaling $14,416,338 through March 31, 2020. In addition, the Company has incurred negative cash flows from operating activities since its inception. The Company has relied on the proceeds from loans and private sales of its stock, in addition to its revenues, to finance its operations. These factors, among others, indicate that the Company may be unable to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

 

With the onset of the Covid 19 pandemic, the reduction of foot traffic and closure of retail locations, management has been proactively looking at new business models and opportunities to stabilize revenues and continue to grow the Company. Until the Company can generate significant cash from operations, its ability to continue as a going concern is dependent upon obtaining additional financing. The Company hopes to raise additional financing, potentially through the sale of debt or equity instruments, or a combination, to fund its operations for the next 12 months and allow the Company to continue the development of its business plans and satisfy its obligations on a timely basis. Should additional financing not be available, the Company will have to negotiate with its lenders to extend the repayment dates of its indebtedness. There can be no assurance that the Company will be able to successfully restructure its debt obligations in the event it fails to obtain additional financing. These conditions have raised substantial doubt as to the Company’s ability to continue as a going concern for one year from the issuance of the financial statements, which has not been alleviated.

 

8

 

 

Note 4 – Property and Equipment

 

Property and equipment consist of the following as of March 31, 2020 and December 31, 2019:

 

   March 31,
2020
   December 31,
2019
 
Freezers and other equipment  $61,600   $1,460,255 
Delivery vans   -    32,727 
Less: accumulated depreciation   -    (730,951)
Total  $61,600   $762,031 

 

Depreciation expense amounted to $0 and $62,728, respectively for the three months ended March 31, 2020 and 2019.

 

During the three months ended March 31, 2020, the Company recorded gain on sale of assets of $12,074 related to sale of the certain freezers and other equipment.

 

Note 5 – Debt

 

Senior Convertible Notes

 

During the year ended December 31, 2018, a Senior Convertible Note in the aggregate principal amount of $310,000 and a maturity date of December 31, 2018 payable to Cobrador Multi-Strategy Partners, LP (“Cobrador 1”), was extended until December 31, 2019. The Company also extended the expiration dates of Series A Warrants issued in connection with Cobrador 1 by one year. The fair value of the Series A Warrants did not materially change due to the extension.

 

On June 30, 2016, the Company issued a Senior Convertible Note in the face amount of $108,804 to Cobrador (“Cobrador 2”) in settlement of previously accrued interest, additional interest, fees and penalties. The additional interest, fees and penalties was $72,734 and this amount was charged to operations as debt discount amortization during the year ended December 31, 2016. The Senior Convertible Note was extended during the year ended December 31, 2018 and was due on December 31, 2019. It is convertible into shares of common stock at a conversion price $0.05 per share and bears interest at 7% per annum. The Company determined that Cobrador 2 had a beneficial conversion feature based on the difference between the conversion price and the market price on the date of issuance and allocated $87,043 as debt discount representing the beneficial conversion feature which was fully amortized at December 31, 2017.

 

During December 2017, the Company issued a Senior Convertible Note in the amount of $25,000 to Cobrador. The note bears interest at 7%, was due in December 2019, and is convertible into common shares at a conversion price of $0.05 per share. In addition, in conjunction with this note, the Company issued 500,000 warrants to purchase common shares at $0.05 with a contractual term of 5 years. The estimated value of the warrants was determined to be $1,421 and was recorded as interest expense during 2017 and a warrant liability due to the down round provision in the note agreement.

 

At March 31, 2020 and December 31, 2019, the Cobrador notes had a carrying value of $443,804.

 

As of the date of release of these financial statements, all senior convertible notes were in default. 

 

Promissory Notes Payable

 

During 2014, the Company issued an unsecured promissory note to a former employee of U-Vend Canada. The original amount of this note was $10,512 has a term of 3 years and accrues interest at 17% per annum. The total principal outstanding on this promissory note at March 31, 2020 and December 31, 2019 was $6,235.

 

Starting in 2015, the Company entered into a series of promissory notes from the same lender. All of the notes bear interest at a rate of 19% per annum and are payable together with interest over a period of six (6) months from the date of borrowing. As of December 31, 2015, we had note balance of $11,083. In 2016, the Company borrowed $76,500 and repaid $63,497. The balance outstanding on these notes was $24,116 at December 31, 2016. In 2017, the Company borrowed $36,400 and repaid $44,449. The balance outstanding on these notes was $16,067 at December 31, 2017. In 2018, the Company borrowed $143,908 and repaid $125,931. The balance outstanding on these notes was $34,044 at December 31, 2018. During the year ended December 31, 2019, the Company borrowed additional $38,325 and recorded additional original discount in the amount of $3,325 associated with the new borrowing. During the year ended December 31, 2019, the Company repaid $46,584 in principal and fully amortized $3,325 of debt discount. As of March 31, 2020 and December 31, 2019, the balance outstanding on these notes was $25,784.

 

9

 

 

During the year ended December 31, 2016, the Company issued two unsecured promissory notes and borrowed an aggregate amount of $80,000. The promissory notes bear interest at 10% per annum, with a provision for an increase in the interest rate upon an event of default as defined therein and were due at various due dates in May and September 2017. The due dates of both notes were extended to December 31, 2019. As of March 31, 2020 and December 31, 2019, the balance outstanding on these notes was $80,000.

 

In December 2017, the Company issued promissory notes in the aggregate principal balance of $28,000 to Cobrador. The notes accrue interest at 7% and have a two-year term. As of March 31, 2020 and December 31, 2019, the balance outstanding on these notes was $28,000.

 

On July 18, 2018, the Company issued a promissory note in the principal amount of $187,500 with net proceeds of $147,000. The Company agreed to pay $1,143 per business day for 164 days. The Company recorded $40,500 to debt discount. During 2018, the Company repaid $128,050 in principal and amortized $40,500 of debt discount resulting in an unamortized debt discount of $0 and carrying value of $59,450 at December 31, 2018. During the year ended December 31, 2019, this note was paid off.

 

On April 13, 2018, the Company issued a promissory note in the principal amount of $115,000. This note bears interest at the rate of 7% per annum, due on December 31, 2019. In 2019, the Company borrowed an additional $25,000 and repaid $60,000. The balance outstanding on this note at March 31, 2020 and December 31, 2019, was $80,000.

 

In October 2014, January 2015 and October 2015, the Company entered into three (3) separate 24-month equipment financing agreements (the “Agreements”) with Perkins Industries, LLC (“Perkins”) for equipment in the aggregate amount of $387,750 with an annual interest rate of 15%. The assets financed consisted of self-service electronic kiosks placed in service in the Company’s Southern California region. The Company is obligated to make monthly interest only payments in accordance with the Agreements. The Agreements include a put/call option at the end of year one and the end of year two. Neither of these options were exercised. During 2017 $100,000 was paid down on the notes. The carrying value as of December 31, 2018 was $287,750. Maturities of these notes were extended to December 31, 2019. During the year ended December 31, 2019, $39,266 was paid down on the notes. On April 1, 2019, total principal and accrued interest in the amount of $321,824 were restructured into two converted notes below. The carrying value as of March 31, 2020 and December 31, 2019 was $0.

 

Pursuant to the Agreements Perkins received a warrant to purchase an aggregate of 310,200 shares at an exercise price of $0.35 per share with a contractual term of three (3) years. The warrant was recorded as a debt discount and a warrant liability in the aggregate amount of $3,708 due to the down round provision, pursuant which the exercise price of the warrants was revised to $0.26 at December 31, 2016.

 

In October 2016, the Company and Perkins agreed to extend the termination date of two of the Agreements to October 17, 2017 and January 5, 2018. In consideration of this extension, the Company issued an additional 200,000 warrants with an exercise price of $0.05 per share and a five-year contractual term. The fair value of the warrants was not material and was charged to operations in the accompanying statement of operations for the year ended December 31, 2016.

 

During the year ended December 31, 2018 the Agreements were purchased by a third party and the due dates were extended to December 31, 2019.

 

On November 19, 2018, the Company issued a promissory note in the principal amount of $124,000 with net proceeds of $112,840. This note matures in 64 weeks. The Company recorded $11,160 to debt discount. During the year ended December 31, 2018, the Company repaid $9,784 in principal and amortized $872 of debt discount resulting in an unamortized debt discount of $10,288 and carrying value of $103,928 at December 31, 2018. During the year ended December 31, 2019, the Company repaid $48,154 in principal and amortized $9,744 of debt discount resulting in an unamortized debt discount of $544 and carrying value of $65,518 at December 31, 2019. During the three months ended March 31, 2020, the Company fully amortized $544 of debt discount. As of March 31, 2020, the balance outstanding on these notes was $66,062.

 

On December 12, 2018, the Company issued a promissory note in the principal amount of $112,425 with net proceeds of $64,500. The Company agreed to pay $937 per business day for 120 days. The Company recorded $47,925 to debt discount. During the year ended December 31, 2018, the Company repaid $9,370 in principal and amortized $3,744 of debt discount resulting in an unamortized debt discount of $44,181 and carrying value of $58,874 at December 31, 2018. During the year ended December 31, 2019, the Company repaid $103,055 in principal and fully amortized $44,181 of remaining debt discount resulting in carrying value of $0 at December 31, 2019.

 

10

 

 

On March 5, 2019, the Company issued a non-equity linked promissory note for $100,000 to an investor with an annual 10% rate of interest and a one (1) year maturity. This investor also received a warrant for 500,000 shares at a strike price of $0.07 per share with a five (5) year maturity. The fair value of warrant was not material. As of March 31, 2020 and December 31, 2019, the outstanding balance was $100,000.

 

During the year ended December 31, 2019, the Company issued two promissory notes in the aggregate principal amount of $135,000, bearing interest of 7% and mature on August 8, 2019. As of March 31, 2020 and December 31, 2019, the balance outstanding on these notes was $135,000.

 

As of the date of release of these financial statements, all promissory notes were in default.

 

Convertible Notes Payable

 

2014 Stock Purchase Agreement

 

In 2014 and 2015 the Company entered into the 2014 Securities Purchase Agreement (the “2014 SPA”) pursuant to which it issued eight (8) convertible notes in the aggregate face amount of $146,000 due at various dates between August 2015 and March 2016. The principal on these notes is due at the holder’s option in cash or common shares at a conversion rate of $0.30 per share. In connection with these borrowings the Company granted a total of 360,002 warrants with an exercise price of $0.35 per share and a 5 year contractual term. The warrants issued have a down round provision and as a result are classified as a liability in the accompanying consolidated balance sheets. Pursuant to the down round provision, the exercise price of the warrants was reduced to $0.22 at December 31, 2016. During 2017 the Company repaid one of the notes in the amount of $50,000. On May 1, 2018, the Company granted 1,000,000 warrants with an exercise price of $0.15 per share and a 5 year contractual term, valued at $2,841, which was recorded as debt discount. As of March 31, 2020, December 31, 2019 and 2018, outstanding balances of these notes were $121,000. As of the date of release of these financial statements, these notes were in default.

 

The Company and Cobrador held three of the convertible notes in the aggregate face amount of $45,000 and agreed to extend the repayment date to November 17, 2020. The Company agreed to a revised conversion price of $0.05 per share and a revised warrant exercise price of $0.07 per share. The change in the value of warrants was not material and was charged to operations during the year ended December 31, 2017. As of March 31, 2020 and December 31, 2019, outstanding balances of these notes were $45,000.

 

2015 Stock Purchase Agreement

 

During the year ended December 31, 2015, the Company issued eleven subordinated convertible notes bearing interest at 9.5% per annum with an aggregate principal balance of $441,000 pursuant to the 2015 Stock Purchase Agreement (the “2015 SPA”). The notes were due in December 2017 and are payable at the noteholder’s option in cash or common shares at a conversion rate of $0.30 per share. The conversion rate was later revised to $0.05 due to down round provisions contained in the 2015 SPA, and the due date was extended to November 17, 2020. In connection with these borrowings, the Company issued a warrant to purchase 735,002 shares of the Company’s common stock at an exercise price of $0.40 per share and a 5 year contractual term. The exercise price was later revised to $0.22 per share pursuant to the down round provisions in the 2015 SPA. The Company allocated $8,113 of proceeds received to debt discount based on the computed fair value of the convertible notes and warrants issued. During the year ended December 31, 2016, the noteholder converted one note in the face amount of $35,000 into 700,000 shares of common stock. As of March 31, 2020 and December 31, 2019, the 2015 SPA had a balance of $406,000. The debt discount was fully amortized as of December 31, 2016. As of the date of release of these financial statements, these notes were in default.

 

2016 Stock Purchase Agreement

 

On June 30, 2016, the Company entered into the 2016 Stock Purchase Agreement (the “2016 SPA”) pursuant to which it issued five convertible notes in the aggregate principal amount of $761,597. The 2016 SPA notes are due in November 2020 and bear interest at 9.5% per annum. The notes are convertible into shares of common stock at a conversion price of $0.17 per share. With this note, the Company satisfied its obligations for: previously issued promissory notes of $549,000, accrued interest of $38,615, lease principal installments of $47,466, previously accrued registration rights penalties of $22,156, due to a former officer of $81,250, and additional interest, expenses, fine and penalties of $23,110. The Company charged additional interest, expenses, fines and penalties $23,110 to operations as amortization of debt discount and deferred financing costs during the year ended December 31, 2016.

 

In connection with the 2016 SPA, the Company granted a total of 2,239,900 warrants with an exercise price of $0.30 per share which was later revised to $0.05 per share due to down round provisions, with a 5 year contractual life. The Company allocated $19,242 to debt discount based on the computed fair value of the convertible notes and warrants issued and classified the debt discount is as a warrant liability due to the down round provision in the warrants.

 

11

 

 

On July 11, 2019, $85,000 in principal was converted into 1,700,000 shares of common stock.  

 

As of March 31, 2020 and December 31, 2019, the 2016 SPA had a carrying value of $676,597. As of the date of release of these financial statements, these notes are in default.

 

Other 2016 Financings

 

During the year ended December 31, 2016, the Company issued four convertible notes (the “Cobrador 2016 Notes”) in the aggregate principal amount of $115,000. The Cobrador 2016 Notes have a 2 year term, bear interest at 9.5% per annum, and are convertible into shares of common stock at a conversion price of $0.17 per share. The conversion price was subsequently revised to $0.05 per the down round provisions and the maturity date was extended to September 26, 2021. In connection with the Cobrador 2016 Notes, the Company granted a total of 338,235 warrants with an exercise price of $0.30 per share which was subsequently revised to $0.05 per share due to down round provisions with a 5 year contractual term. The Company allocated $1,994 to debt discount based on the computed fair value of the convertible notes and warrants issued and classified the debt discount as a warrant liability due to the down round provision in the warrants. During the year ended December 31, 2019, $20,000 was converted into 400,000 shares. As of March 31, 2020 and December 31, 2019, the Cobrador 2016 Notes had a carrying value of $95,000.

 

During the fourth quarter of 2016, the Company issued three additional convertible notes in the aggregate principal amount of $250,000. The notes have a 2 year term, bear interest at 9.5% per annum and are convertible into shares of common stock at a conversion price of $0.05 per share. In connection with these borrowings, the Company granted warrants to purchase 5,000,000 shares of common stock with an exercise price of $0.07 per share. The Company allocated $27,585 to debt discount based on the computed fair value of the convertible notes and warrants issued, and the debt discount was classified as a warrant liability due to the down round provision in the warrants. As of March 31, 2020 and December 31, 2019, the carrying value of the notes was $250,000. As of the date of release of these financial statements, these notes were in default.

 

2017 Financings

 

During the year ended December 31, 2017, the Company entered into 19 separate convertible notes agreements (the “2017 Convertible Notes)” in the aggregate principal amount of $923,882. The 2017 Convertible Notes each have a 2 year term, bear interest at 9.5%, and are convertible into shares of common stock at a conversion price of $0.05 per share. In connection with the 2017 Convertible Notes, the Company issued a total of 16,537,926 warrants with an exercise price of $0.07 per share with a 5 year term. The Company allocated $59,403 to a debt discount based on the computed fair value of the convertible notes and warrants issued and classified the debt discount as a warrant liability due to the down round provision in the warrants. During the year ended December 31, 2018, the Company amortized $31,940 of debt discount resulting in unamortized debt discount of $13,278 and carrying value of $910,608 at December 31, 2018. During the year ended December 31, 2019, the Company fully amortized remaining $13,278 of debt discount. As of March 31, 2020 and December 31, 2019, the carrying value of the notes was $924,282. As of the date of release of these financial statements, these notes were in default.

 

12

 

 

2018 Financings

 

During the year ended December 31, 2018, the Company entered into seventeen separate convertible notes agreements (the “2018 Convertible Notes)” in the aggregate principal amount of $537,500. The 2018 Convertible Notes each have a 2 year term, bear interest at 9.5% if paid in cash, 15% if paid in common stock, and are convertible into shares of common stock at a conversion price of $0.05 per share. In connection with the 2018 Convertible Notes, the Company issued a total of 10,750,000 warrants with an exercise price of $0.07 per share with a 5 year term. The Company allocated $33,384 to a debt discount based on the computed fair value of the convertible notes and warrants issued and classified the debt discount as a warrant liability due to the down round provision in the warrants. During the year ended December 31, 2018, the Company amortized $12,803 of debt discount resulting in an unamortized debt discount of $20,581 and carrying value of $516,919 at December 31, 2018. During the year ended December 31, 2019, the Company amortized $16,692 of debt discount resulting in an unamortized debt discount of $3,889 and carrying value of $533,611 at December 31, 2019. During the three months ended March 31, 2020, the Company amortized $2,113 of debt discount resulting in an unamortized debt discount of $1,776 and carrying value of $535,724 at March 31, 2020. As of the date of release of these financial statements, convertible notes in aggregate amount of $340,000 were in default.

 

On November 20, 2018, two officers converted $436,500 accrued compensation into two convertible note agreements in the principal amount of $436,500. The notes have a 2 year term, bear interest at 9.5% if paid in cash, 15% if paid in common stock, and is convertible into shares of common stock at a conversion price of $0.05 per share.

 

During the year ended December 31, 2018, the Company entered into three convertible notes agreements in the aggregate principal amount of $240,500 with a net proceed of $214,000. These notes had a 1-year term, and bears interest at 8%-12%. The notes are convertible into common stock at 60% to 61% multiplied by the lowest one to two trading price(s) during fifteen to twenty-five trading day period prior to the Conversion Date. The embedded conversion features were valued at $59,027, which were recorded as debt discount. In addition, the Company also recorded $26,500 as original debt discount. These notes were in default due to failure to comply with the reporting requirements of the Exchange Act, as a result, the Company recorded an additional $120,250 penalty in principal as of December 31, 2018. During the year ended December 31, 2018, the Company amortized $21,382 of debt discount resulting in unamortized debt discount of $64,145 and carrying value of $296,605 at December 31, 2018. During the year ended December 31, 2019, the Company repaid $64,300 in principal and amortized $21,381 of debt discount, recorded $42,764 in accretion of debt discount, resulting in unamortized debt discount of $0 and carrying value of $296,450 at December 31, 2019. During the three months ended March 31, 2020, the repayment in the amount of $400 was returned to the Company resulting in carrying value of $296,850 at March 31, 2020.

 

2019 Financings

 

On March 18, 2019, the Company issued a convertible promissory note for $85,250 with net proceed of $75,000 to an investor with an 8.0% rate of interest and a nine-month maturity. The Company has the option to pre-pay the note (principal and accrued interest) in cash within the 1st 90 days from issuance at a 25% premium, and 40% premium 91-180 days from the issuance date. Subsequent to 181 days, the Company shall have no right of prepayment and the holder may convert at a 40% discount to the prevailing market price. The note matured on December 11, 2019. The note is convertible into shares of common stock at the lesser of 1) lowest trading price of twenty-five days prior to March 18, 2019 or 2) 60% of lowest trading price of twenty-five days prior to the Conversion Day. In addition, the Company also recorded $10,250 as original debt discount. These notes were in default due to failure to comply with the reporting requirements of the Exchange Act, as a result, the Company recorded an additional $42,625 penalty in principal as of December 31, 2019. During the year ended December 31, 2019, the Company amortized $23,384 of debt discount resulting in unamortized debt discount of $0. As of March 31, 2020 and December 31, 2019, the carrying value of the note was $127,875. As of the date of release of these financial statements, convertible note was in default.

 

On March 14, 2019, the Company converted accounts payable of approximately $105,000 payables into a convertible note agreement in the principal amount of $60,000, remaining balance of the amount owed was released and recorded as a settlement of liability. The note has a 2 year term, bears interest at 9.5% if paid in cash, 15% if paid in common stock, and is convertible into shares of common stock at a conversion price of $0.05 per share.

 

On April 1, 2019, The Company converted an aggregate amount of principal and accrued interest of Perkins promissory note in the amount of $321,824 and accounts payable of $10,000 into two convertible notes. Both Notes have a 2 year term, bear interest at 9.5% if paid in cash, 15% if paid in common stock, and are convertible into shares of common stock at a conversion price of $0.05 per share. The outstanding principal balance was $331,824 at March 31, 2020 and December 31, 2019.

 

13

 

 

On April 15, 2019, the Company converted an accrued payable of $108,572, which was used to purchase vending machine, into a convertible note. The Note has a 2 year term, bear interest at 9.5% if paid in cash, 15% if paid in common stock, and are convertible into shares of common stock at a conversion price of $0.07 per share. The outstanding principal balance was $108,572 at March 31, 2020 and December 31, 2019.

 

On May 30, 2019, the Company issued a series of convertible notes under a $250,000 revolving Senior Secured credit facility to an investor, for working capital purposes. The notes carry an interest rate of 9.5% and a two-year term. The notes are convertible into common stock at $0.07 per share and are redeemable after one-year at the Company’s option. The notes also contain a 4.99% limitation of ownership on conversion. The investor had consented to higher draws on the facility in excess of the limit per the initial agreement. As of March 31, 2020 and December 31, 2019, $451,231 and $426,303 was drawn under the agreement, respectively. Subsequent to March 31, 2020, the agreement was modified formally to increase the limit on the facility by $206,231.

 

During the year ended December 31, 2019, the Company entered into several convertible notes agreements in the amount of $68,000. The Notes have a 2 year term, bear interest at 9.5% if paid in cash, 15% if paid in common stock, and are convertible into shares of common stock at a conversion price of $0.07 per share. The outstanding principal balance was of $68,000 at March 31, 2020 and December 31, 2019.

 

During the year ended December 31, 2019, the Company entered into a convertible notes agreement in the amount of $50,000. The Note has a 6 month term, bears interest at 9.5% if paid in cash, 15% if paid in common stock, and is convertible into shares of common stock at a conversion price of $0.01 per share. In connection with the Note, the Company issued 10,000,000 warrants with an exercise price of $0.02 per share with a 5 year term. The outstanding balance was of $50,000 at March 31, 2020 and December 31, 2019.

 

2020 Financings

 

On January 1, 2020, the Company issued a convertible note in the amount of $8,500 in conversion of accrued liabilities. The Note has a 2 year term, bears interest of 9.5% if paid in cash, 15% if paid in common stock, and is convertible into shares of common stock at a conversion price of $0.05 per share. The outstanding principal balance was $8,500 as of March 31, 2020.

 

On March 1, 2020, the Company issued a convertible note in the amount of $17,899 in conversion of accrued liabilities. The Note has a 2 year term, bears interest of 9.5% if paid in cash, 15% if paid in common stock, and is convertible into shares of common stock at a conversion price of $0.05 per share. The outstanding principal balance was $17,899 as of March 31, 2020.

 

Scheduled maturities of debt remaining as of March 31, 2020 for each respective fiscal year end are as follows:

 

2020  $5,037,720 
2021   913,396 
2022   36,399 
    5,987,515 
Less: unamortized debt discount   (1,776)
   $5,985,740 

 

The following table reconciles, for the three months ended March 31, 2020 and 2019, the beginning and ending balances for financial instruments related to the embedded conversion features that are recognized at fair value in the consolidated financial statements.

 

   March 31,
2020
   March 31,
2019
 
Balance of embedded derivative at the beginning of the period  $13,553   $28,357 
Additions related to embedded conversion features of convertible debt issued -   -    - 
Derivative liabilities reduction due to notes default   -    (112,408)
Change in fair value of conversion features   394    158,987 
Balance of embedded derivatives at the end of the period  $13,947   $74,936 

 

14

 

 

Note 8 – Capital Lease Obligations

 

The Company acquired capital assets under capital lease obligations. Pursuant to the agreement with the lessor, the Company makes quarterly lease payments and will make a guaranteed residual payment at the end of the lease as summarized below. At the end of the lease, the Company will own the equipment.

 

In August 2016, the Company and the lessor agreed to extend the term of the lease until December 31, 2020. As a consideration of the extension, the Company issued warrants to acquire 150,000 shares of common stock. The warrants have an exercise price of $0.30 per share, a term of three years, and were recorded as a debt discount and warrant liability due to the down round provision and as such are marked to market each reporting period.

 

During the year ended December 31, 2018 the Company entered into various capital lease agreements. The leases expire at various points through the year ended December 31, 2023.

 

The following schedule provides minimum future rental payments required as of March 31, 2020, under the current portion of capital leases.

 

2020   107,673 
2021   49,831 
2022   30,584 
2023   10,252 
Total minimum lease payments   198,340 
Less: Amount represented interest   (27,911)
Present value of minimum lease payments and guaranteed residual value  $170,429 

 

Note 9 – Capital Stock

 

The Company has authorized 600,000,000 shares of common stock.

 

During the three months ended March 31, 2019, the Company issued 3,271,000 shares of its common stock, comprised of 2,871,096 shares of common stock with a fair value of $41,003 for services rendered, and 400,000 shares in conversion of $20,000 of convertible notes. There were no common stock issuances during the three months ended December 31, 2020.

 

Note 10 – Stock Options and Warrants

 

Warrants

 

At March 31, 2020 the Company had the following warrant securities outstanding:

 

   Warrants   Exercise
Price
   Expiration
2015 Warrants - 2015 SPA convertible debt   735,002   $0.22   April - November 2020
2015 Warrants for services   127,067   $0.22    April - November 2020
2016 Warrants - 2016 SPA convertible debt   2,239,990   $0.05   June 2021
2016 Warrants for services   850,000   $0.05   June 2021
2016 Warrants - Convertible notes   338,236   $0.05   August - September 2021
2016 Warrants for services   200,000   $0.07   October 2020
2016 Warrants issued with Convertible Notes   5,000,000   $0.07   November -December 2021
2017 Warrants – 2017 financing   15,109,354   $0.07   December 2022
2018 Warrants – 2019 financing   9,991,905   $0.07   January - November 2023
2018 Warrants for services   2,250,000   $0.07   October - December 2023
2019 Warrants – 2020 financing   10,500,000   $0.07   March 2024
2019 Warrants for services   3,500,000   $0.07   March 2024
2020 Warrants for services   3,000,000   $0.05   February 2025
Total   51,276,404         

 

During the three months ended March 31, 2020, the Company issued warrants exercisable into 3,000,000 shares of common stock to its officer. The fair value of warrants was determined to be $12,594, and was estimated using the Black-Scholes-Merton option-pricing model with the following assumptions: expected volatility of 339%, risk-free interest rate 1.35%, expected dividend yield of 0%.

 

15

 

 

A summary of all warrants activity for the three months ended March 31, 2020 is as follows:

 

   Number of
Warrants
   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Term
 
Balance outstanding at December 31, 2020   51,276,404   $0.06    3.17 
Granted   3,000,000   $0.05    4.84 
Exercised   -    -    - 
Forfeited   -    -    - 
Cancelled   -    -    - 
Expired   (434,850)  $0.22    - 
Balance outstanding at March 31, 2020   51,276,404   $0.06    3.05 
Exercisable at March 31, 2020   51,276,404   $0.06    3.05 

 

The following table provides a summary of changes in the warrant liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2020 and the year ended December 31, 2019.

 

   March 31,
2020
   December 31,
2020
 
Balance of embedded derivative at the beginning of the period  $      -    129,355 
Fair value of warrants issued and recorded as liabilities   -    - 
Reclassification of warrant lability to equity related to adoption of ASU 2017-11   -    (118,675)
Loss (gain) on fair value adjustment   -    (10, 680)
Balance of embedded derivatives at the end of the period  $-    - 

 

Equity Incentive Plan

 

On July 22, 2011, the Board of Directors of the Company approved the Company’s 2011 Equity Incentive Plan (the “Plan”) and on July 26, 2011, stockholders holding a majority of shares of the Company approved, by written consent, the Plan and the issuance under the Plan of 5,000,000 shares. On November 16, 2017, the Board of Directors approved an increase of 10,000,000 shares to be made available for issuance under the Plan. Accordingly, the total number of shares of common stock available for issuance under the Plan is 15,000,000 shares. Awards may be granted to employees, officers, directors, consultants, agents, advisors and independent contractors of the Company and its related companies. Such options may be designated at the time of grant as either incentive stock options or nonqualified stock options. Stock-based compensation includes expense charges related to all stock-based awards. Such awards include options, warrants and stock grants. Generally, the Company issues stock options that vest over three years and expire in 5 to 10 years.

 

A summary of all stock option activity for the three months ended March 31, 2020 is as follows:

 

   Number of
Options
   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Term
 
Balance outstanding at December 31, 2020   502,500   $0.50    0.5 
Granted   -    -    - 
Exercised   -    -    - 
Cancelled or expired   -    -    - 
Balance outstanding at March 31, 2020   502,500   $0.50    0.3 
Exercisable at March 31, 2020   502,500   $0.50    0.3 

 

16

 

 

Note 11 – Commitments and Contingencies

 

Major League Baseball Properties, Inc. License Agreement

 

In March 2016, the Company entered into a license agreement beginning April 1, 2016 through December 31, 2019 with Major League Baseball Properties, Inc. (“MLB” “Licensor”) for the non-exclusive right to certain proprietary intangible property of the Licensor to be used in connection with the manufacturing, distribution, promotion and advertisement of the Company’s products sold within the U.S., the District of Columbia and U.S. territories. Under the license agreement, the Company is scheduled to pay the following guaranteed payments; $150,000 during 2016, $275,000 during 2017, $100,000 during 2018, and $115,000 during 2019. The Company is obligated to pay the licensor a royalty based on the product sold or advertising sold. The royalty paid will offset all or a portion of the guaranteed payments. The agreement is subject to customary default and termination clauses. The Company paid $0 during the three months ended March 31, 2019 and 2020, and has accrued $115,000 at December 31, 2019 and March 31, 2020.

 

As of March 31, 2020, the agreement with MLB has expired. The Company will not be continuing the relationship. 

 

Note 12 – Subsequent Events

 

The Company has evaluated events occurring subsequent to March 31, 2020 through the date these financial statements were issued and determined the following significant events require disclosure:

 

Subsequent to March 31, 2020, the Company issued a convertible promissory note in the principal amount of $147,000 to an unaffiliated investor to support the Company’s working capital requirements. The note bears interest at the rate of 9.5% per annum and is due and payable in two years. The note is convertible into shares of the Company’s common stock at $0.03 per share and is redeemable at the principal amount plus accrued unpaid interest after one year, at the Company’s option.

 

Subsequent to March 31, 2020, the Company issued multiple convertible promissory notes in the aggregate principal amount of $561,719 to unaffiliated investors. The notes bear interest at the rate of 9.5% per annum and are due and payable in two years. The notes are convertible into shares of the Company’s common stock at $0.05 per share and are redeemable at the principal amount plus accrued unpaid interest after one year, at the Company’s option.

 

Subsequent to March 31, 2020, the Company issued a convertible note for deferred compensation in the principal amount of $94,600. The notes bear interest at the rate of 9.5% per annum and is due and payable in two years. The note is convertible into shares of the Company’s common stock at $0.05 per share and is redeemable at the principal amount plus accrued unpaid interest after one year, at the Company’s option.

 

Subsequent to March 31, 2020, the Company issued 188,886,284 of its common stock in conversion of $689,096 of convertible notes.

 

Subsequent to March 31, 2020, the Company hired Patrick Avery as the Company’s Chief Operating Officer with a salary of $84,000.

 

17

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-Looking Statements

 

Certain statements contained herein constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “1995 Reform Act”). BoxScore Brands, Inc. desires to avail itself of certain “safe harbor” provisions of the 1995 Reform Act and is therefore including this special note to enable us to do so. Except for the historical information contained herein, this report contains forward-looking statements (identified by the words “estimate,” “project,” “anticipate,” “plan,” “expect,” “intend,” “believe,” “hope,” “strategy” and similar expressions), which are based on our current expectations and speak only as of the date made. These forward-looking statements are subject to various risks, uncertainties and factors that could cause actual results to differ materially from the results anticipated in the forward-looking statements, including, without limitation, those discussed under Part I, Item 1A “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2019, and those described herein that could cause actual results to differ materially from the results anticipated in the forward-looking statements, and the following:

  

Our limited operating history with our business model;

 

The low cash balance and limited financing currently available to us. We may in the near future have a number of obligations that we will be unable to meet without generating additional income or raising additional capital;

 

Further cost reductions or curtailment in future operations due to our low cash balance and negative cash flow;

 

Our ability to effect a financing transaction to fund our operations which could adversely affect the value of our stock;

 

Our limited cash resources may not be sufficient to fund continuing losses from operations;

 

The failure of our products and services to achieve market acceptance; and

 

The inability to compete in our market, especially against established industry competitors with greater market presence and financial resources.

 

The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of our results of operations and financial condition, and should be read in conjunction with the consolidated financial statements and footnotes that appear elsewhere in this report.

 

Overview

 

BoxScore Brands, Inc. (formerly U-Vend Inc.) (the “Company”) formerly developed, marketed and distributed various self-serve electronic kiosks and mall/airport co-branded islands throughout North America. Due to the nationwide shutdown related to the COVID-19 pandemic, the Company spent a portion of 2020 restructuring and retiring certain corporate debt and obligations. The Company focused on implementing a new operational direction.  After a thorough evaluation process, the Company found that there is a substantial long-term demand for specific commodities relating to battery and new energy technologies. This presents a timely and unique opportunity based on rising demand characteristics.  By capitalizing on market trends and current sustainable energy government mandates and ESG initiatives, we will focus on bringing a vertically-integrated solution to market.

 

Results of Operations

 

Three Months Ended March 31, 2020 Compared to Three Months Ended March 31, 2020

 

Revenue

 

For the three months ended March 31, 2020, the Company had no revenue compared to revenues of $49,773 during the three months ended March 31, 2019. The decrease in revenue was due to the sale of our revenue-generating MiniMelts assets in March 2019 (see note 1).

 

Cost of Goods Sold

 

For the three months ended March 31, 2020, the Company had no cost of goods sold compared to cost of goods sold of $64,399 during the three months ended March 31, 2019. The Company’s gross margin during the three months ended March 31, 2019 was (29)%. The decrease in 2020 was because all inventory was liquidated during the quarter ended March 31, 2019 prior to the sale of the MiniMelts assets (see Note 1).

 

18

 

 

Selling Expenses

 

Selling expenses for three months ended March 31, 2020 were $0 compared to $61,474 during the three months ended March 31, 2020. During the three months ended March 31, 2019, the Company expensed $38,333 for sponsorship and media commitment fees in connection with the Major League Baseball Properties, Inc. During the three months ended March 31, 2020, there were no fees recorded under the agreement with MLB as it expired on December 31, 2019.

 

General and Administrative Expenses

 

General and administrative expenses for the three months ended March 31, 2020 were $51,582, a decrease of $63,030 or 55%, compared to $114,612 for the three months ended March 31, 2020. The decrease in general and administrative expenses was mainly due to decrease in professional fees as a result of our reduction in operations as we contemplated our business restructuring.

 

Gain on settlement of liability

 

During the three months ended March 31, 2019, the Company recorded a gain on settlement of liabilities of $156,709. During the three months ended March 31, 2020, the Company there were no liability settlements.

  

Gain on Fair Value of Derivative Liabilities

 

Certain warrants issued by the Company have a “down round provision”. As such, the warrants have been recorded as derivative liabilities and are subject to remeasurement at each balance sheet date. The warrants are valued using the Black Scholes method and will continue to be adjusted each reporting period for changes in fair value until the warrant is exercised or expires. Gains or losses on revaluation are recorded as a component of other expense (income) on the accompanying consolidated statements of operations.

 

During the three months ended March 31, 2020, the Company recognized a loss on the change in fair value of derivative liabilities in the amount $394, as compared to $338,063 during the three months ended March 31, 2019, which was largely due to the volatility of our stock price.

 

Amortization of Debt Discount and Deferred Financing Costs

 

Amortization of debt discount and deferred financing costs for the three months ended March 31, 2020 were $2,657, compared to $134,292 for the three months ended March 31, 2019, due to the majority of the discount being amortized in prior periods.

 

Interest Expense

 

Interest expense for the three months ended March 31, 2020 was $151,489, as compared to $163,105 during the three months ended March 31, 2019.

 

Gain on sale of asset

 

During the three months ended March 31, 2020, the Company recorded $12,074 in loss on sale of assets. During the three months ended March 31, 2019, the Company sold certain equipment and recorded $27,465 in loss on sale of assets.

 

Net Loss

 

As a result of the foregoing, the net loss for the three months ended March 31, 2020 was $218,196 as compared to $759,656 incurred during the three months ended March 31, 2019.

 

19

 

 

Liquidity and Capital Resources

 

The accompanying consolidated financial statements have been prepared on a going concern basis. The Company had net loss of $218,196 during the three months ended March 31, 2020, has accumulated losses totaling $14,416,338, and has a working capital deficit of $7,092,427 at March 31, 2020. These factors, among others, indicate that the Company may be unable to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

 

The Company will need to raise additional financing in order to fund the its operations for the next 12 months, and to allow the Company to continue the development of its business plans and satisfy its obligations on a timely basis. Should additional financing not be available, the Company will have to negotiate with its lenders to extend the repayment dates of its indebtedness. There can be no assurance that the Company will be able to successfully restructure its debt obligations in the event it fails to obtain additional financing.

 

Operating Activities

 

During the three months ended March 31, 2020, the Company used $15,079 of cash in operating activities primarily as a result of the Company’s net loss of $218,196, offset by loss on change in fair value of derivative liabilities of $394, loss on sale of asset of $12,074, $2,657 in amortization and accretion of debt discount, and net changes in operating assets and liabilities of $187,992.

 

During the three months ended March 31, 2019, we used $343,527 of cash in operating activities primarily as a result of our net loss of $759,656, offset by loss on change in fair value of derivative liabilities of $338,063, loss on sale of asset of $27,465, share-based compensation of $41,003, $62,728 in depreciation expense, $134,292 in amortization and accretion of debt discount, loss on default of convertible notes of $42,625, gain of settlement of debt $156,709 and net changes in operating assets and liabilities of $(73,338).

 

Investing Activities

 

During the three months ended March 31, 2020, investing activities provided $18,000 in cash in proceeds from sale of property and equipment.

 

During the three months ended March 31, 2019, investing activities provided $350,000 in cash in proceeds from sale of property and equipment.

 

Financing Activities

 

During the three months ended March 31, 2020, we used $2,921 in financing activities, resulting from $7,500 in proceeds from convertible notes and $10,421 in repayments of capital lease obligations.

 

During the three months ended March 31, 2019, we used $55,587 in financing activities. Financing activities provided $270,000 in proceeds from promissory notes and $75,000 in proceeds from convertible notes. The Company used $226,593 in repayments of promissory notes and $173,994 in repayments of capital lease obligations.

 

Off-Balance Sheet Arrangements

 

The Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, an effect on its financial condition, financial statements, revenues or expenses.

 

Inflation

 

Although the Company’s operations are influenced by general economic conditions, it does not believe that inflation had a material effect on its results of operations during the last two years as it is generally able to pass the increase in material and labor costs to its customers or absorb them as it improves the efficiency of its operations.

 

20

 

 

Critical Accounting Policies

 

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. The consolidated financial statements as of March 31, 2020 describe the significant accounting policies and methods used in the preparation of the consolidated financial statements. Actual results could differ from those estimates and be based on events different from those assumptions. Future events and their effects cannot be predicted with certainty; estimating therefore, requires the exercise of judgment. Thus, accounting estimates change as new events occur, as more experience is acquired or as additional information is obtained. The following critical accounting policies are impacted significantly by judgments, assumptions and estimates used in the preparation of our consolidated financial statements:

 

Fair Value of Financial Instruments

 

For certain of the Company’s financial instruments, including cash and equivalents, accounts receivable, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:

 

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis

 

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.

 

Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). Level 3 instruments include derivative warrant instruments. The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2.

 

Derivative Financial Instruments

 

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. Certain warrants issued by the Company contain terms that result in the warrants being classified as derivative liabilities for accounting purposes. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks.

 

Recent Accounting Pronouncements

 

In February 2016, the FASB issued ASU 2016-02, “Leases”, which requires that lease arrangements longer than 12 months result in an entity recognizing a right-of-use asset and liability. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2019, and early adoption is permitted. As of the date of this report, the Company has not adopted ASU 2016-02 and has elected to defer implementation until January 1, 2022, as allowed by ASU 2019-10. The Company is still determining the impact ASC 842 will have on its financial position, results of operations, and cash flows.

 

21

 

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

Not required for smaller reporting companies.

 

Item 4. Controls and Procedures

 

(a) Evaluation of Disclosure Controls and Procedures:

 

As of the end of the period covered by this Form 10-Q, management performed, with the participation of our principal executive officer and principal financial officer, an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures. Based on the evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2020, our disclosure controls and procedures were not effective.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We identified the following material weakness as of March 31, 2020:

 

Insufficient personnel resources within the accounting function to segregate the duties over financial transaction processing and reporting;

 

Inability to apply GAAP consistently for routine transactions, and to unique transactions and contracts;

 

Inability to evaluate the adoption of new reporting standards; and

 

A lack of consistent management involvement during the financial statement preparation process.

 

To remediate our internal control weaknesses, management intends to implement the following measures, as finances allow:

 

  Adding sufficient accounting personnel or outside consultants to properly segregate duties and to effect a timely, accurate preparation of the financial statements;

 

  Adhering to internal procedures for timely submission of supporting documents to outside consultants;

 

  Developing and maintaining adequate written accounting policies and procedures, once we hire additional accounting personnel or outside consultants.

 

The additional hiring is contingent upon our efforts to obtain additional funding and the results of our operations. Management expects to secure funds in the coming fiscal year but provides no assurances that it will be able to do so.

 

(b) Changes in Internal Control over Financial Reporting:

 

There were no changes in the Company’s internal control over financial reporting during the three months ended March 31, 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. However, our management is currently seeking to improve our controls and procedures in an effort to remediate the deficiency described above.

 

22

 

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

None.

 

Item 1A. Risk Factors.

 

In addition to the other information set forth in this report, you should carefully consider the factors discussed under “Risk Factors” in our Annual Report on Form 10-K for the period ended December 31, 2019, as filed with the Securities and Exchange Commission on May 12, 2021. These factors could materially adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by any forward-looking statements contained in this report.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures.

 

None.

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits

 

31.1   Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) and15d-14(a)
32.1   Certification of Principal Executive Officer Pursuant to 18 U.S.C. 1350
101.INS   XBRL Instance Document
101.SCH   XBRL Taxonomy Extension Schema Document
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   XBRLTaxonomy Extension Definition Linkbase Document
101.LAB   XBRL Taxonomy Extension Label Linkbase Document
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document

 

23

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  BOXSCORE BRANDS, INC.
     
September 2, 2021 By: /s/ Andrew Boutsikakis
    Andrew Boutsikakis
    Chief Executive Officer, President and Chief Financial Officer

 

 

24

 

EX-31.1 2 f10q0320ex31-1_boxscore.htm CERTIFICATION

Exhibit 31.1

 

RULE 13a-14(a)/15d-14(a) CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

 

I, Andrew Boutsikakis, certify that:

 

1.I have reviewed this quarterly report on Form 10-Q of BoxScore Brands, Inc. for the quarterly period ended March 31, 2020.

 

2.Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

  a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: September 2, 2021  
   
/s/ Andrew Boutsikakis    
Andrew Boutsikakis  
President, Chief Executive Officer  
(Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer)  

 

EX-32.1 3 f10q0320ex32-1_boxscore.htm CERTIFICATION

Exhibit 32.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of BoxScore Brands, Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Andrew Boutsikakis , Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

Date September 2, 2021  
   
/s/ Andrew Boutsikakis    
Andrew Boutsikakis  
President, Chief Executive Officer  
(Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer)  

  

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(formerly U-Vend Inc.) (the &#x201c;Company&#x201d;) formerly developed, marketed and distributed various self-serve electronic kiosks and mall/airport co-branded islands throughout North America. Due to the&#xa0;nationwide shutdown related to the COVID-19 pandemic, the Company spent a portion of 2020 restructuring and retiring certain corporate debt and obligations. The Company focused on implementing a new operational direction.&#xa0; After a thorough evaluation process, the Company found that there is a substantial long-term demand for specific commodities relating to battery and new energy technologies. This presents a timely and unique opportunity based on rising demand characteristics.&#xa0; By capitalizing on market trends and current sustainable energy government mandates and environmental, social and corporate governance (ESG) initiatives, we will focus on bringing a vertically-integrated solution to market.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Asset Sale</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 18, 2019, the Company approved an asset sale of the assets related to the legacy MiniMelts brand for $350,000 in cash, which was approved by a majority of its stockholders. These MiniMelts assets generated 100% of the revenue reported during the year ended December 31, 2019. During the year ended December 31, 2018, MiniMelts sales accounted for approximately $1,100,000, or 85%, of the revenue reported during that period. Part of the proceeds from the sale was used to retire certain lease obligations as well as for general operating purposes.</p><br/> 350000 These MiniMelts assets generated 100% of the revenue reported during the year ended December 31, 2019. During the year ended December 31, 2018, MiniMelts sales accounted for approximately $1,100,000, or 85%, of the revenue reported during that period. <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font><b>Note 2 &#x2013; Summary of Significant Accounting Policies</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Basis of Presentation and Principles of Consolidation</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (&#x201c;GAAP&#x201d;) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments consisting of normal recurring accruals considered necessary for a fair and non-misleading presentation of the financial statements have been included. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The balance sheet as of December 31, 2019 has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements. These interim consolidated financial statements should be read in conjunction with the December 31, 2019 audited consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on May 12, 2021.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying consolidated financial statements include the accounts of BoxScore Brands, Inc. and the operations of its wholly owned subsidiaries, U-Vend America, Inc., U-Vend Canada, Inc., and U-Vend USA LLC. All intercompany balances and transactions have been eliminated in consolidation.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Use of Estimates</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates and be based on events different from those assumptions. Future events and their effects cannot be predicted with certainty; estimating, therefore, requires the exercise of judgment. Thus, accounting estimates change as new events occur, as more experience is acquired, or as additional information is obtained.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Property and Equipment</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Property and equipment are stated at cost less depreciation. Depreciation is provided using the straight-line method over the estimated useful life of the assets. Equipment has estimated useful live between three and seven years. Expenditures for repairs and maintenance are charged to expense as incurred.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Impairment of Long-lived Assets</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Long-lived assets, such as property and equipment and intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount to the estimated future undiscounted cash flows expected to be generated by the asset group. If it is determined that an asset group is not recoverable, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds its fair value.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Common Shares Issued and Earnings Per Share</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Common shares issued are recorded based on the value of the shares issued or consideration received, whichever is more readily determinable. The Company presents basic and diluted earnings per share. Basic earnings per share reflect the actual weighted average of shares issued and outstanding during the period. Diluted earnings per share are computed including the number of additional shares that would have been outstanding if dilutive potential shares had been issued. In a loss period, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potential common shares is anti-dilutive.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of March 31, 2020 and December 31, 2019, respectively, there were approximately 159.9 million shares potentially issuable under convertible debt agreements, options, and warrants that could dilute basic earnings per share in the future that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive to the Company&#x2019;s losses during the periods presented.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Preferred Stock Authorized</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has authorization for &#x201c;blank check&#x201d; preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to common stock. As of March 31, 2020 and December 31, 2019, there are 10,000,000 shares of preferred stock authorized, and no shares issued or outstanding.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Derivative Financial Instruments</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. Certain warrants issued by the Company contain terms that result in the warrants being classified as derivative liabilities for accounting purposes. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. 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ASC Topic 825, &#x201c;Financial Instruments,&#x201d; defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:</p><br/><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><font style="font-size: 10pt">&#x25cf;</font></td><td style="text-align: justify"><font style="font-size: 10pt">Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. 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The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2.</font></td> </tr></table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Certain of the Company&#x2019;s debt and equity instruments include embedded derivatives that require bifurcation from the host contract under the provisions of ASC 815-40, &#x201c;Derivatives and Hedging.&#x201d; Certain warrants were issued between June 2013 and December 2014 were derivative liabilities outside the exception of applying ASU 2017-11, &#x201c;Accounting for Certain Financial Instruments with Down Round Features.&#x201d; When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity&#x2019;s own stock. 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font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 9%; font-size: 10pt; text-align: right">&#xa0;</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Derivative liabilities, debt and equity instruments</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">13,553</td><td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; text-align: right">&#x2014;</td><td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; text-align: right">&#x2014;</td><td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">13,553</td><td style="font-size: 10pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Stock-Based Compensation</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for stock-based compensation in accordance with ASC 718, &#x201c;Compensation &#x2013; Stock Compensation,&#x201d; that requires all stock-based awards granted to employees, directors, and non-employees to be measured at grant date fair value of the equity instrument issued, and recognized as expense. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period of the award, which is generally equivalent to the vesting period. The fair value of each stock option granted is estimated using the Black-Scholes option pricing model. The measurement date for the non-forfeitable awards to nonemployees that vest immediately is the date the award is issued.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Gain on Liabilities Settlement</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the three months ended March 31, 2019, creditors forgave aggregate amount of $156,709, of which approximately $64,000 were associated accrued expenses, $45,000 related to conversion of approximately $105,000 of accounts payable to a $60,000 convertible note, and $47,000 was connected to forgiveness of accounts payable.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Other amounts due to related parties</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Amounts due from related parties represent past amounts owed for compensation and operating expenses paid by the related party on behalf of the Company. During the year ended December 31, 2019, the Company reclassified approximately $185,000 from due to related parties to accrued expenses, as a result of the individual no longer being an officer of the Company during 2019, and paid net $63,370 to related parties, resulting in a balance of $67,022 owed at December 31, 2019. During the three months ended March 31, 2020, this amount was reclassed to accrued expenses.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Revenue Recognition</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Revenue is recognized at the time each vending transaction occurs, the payment method is approved, and the product is disbursed from the machine. Wholesale revenue, including revenue earned under contracts with major sports organizations, are recognized at the time the products are delivered to the customer based on the agreement with the customer. We recognize revenue under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (&#x201c;ASC 606&#x201d;), the core principle of which is that an entity should recognize revenue to depict the transfer of control for promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the revenue recognition principles, an entity is required to identify the contract(s) with a customer, identify the performance obligations, determine the transaction price, allocate the transaction price to the performance obligations and recognize revenue as the performance obligations are satisfied (i.e., either over time or at a point in time). ASC 606 further requires that companies disclose sufficient information to enable readers of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.&#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Recently Issued and Adpoted Accounting Pronouncements</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In February 2016, the FASB issued ASU 2016-02, &#x201c;Leases&#x201d;, which requires that lease arrangements longer than 12 months result in an entity recognizing a right-of-use asset and liability. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2019, and early adoption is permitted. As of the reporting date, the Company has not adopted ASU 2016-02 and has elected to defer implementation until January 1, 2022, as allowed by ASU 2019-10. The Company is still determining the impact ASC 842 will have on its financial position, results of operations, and cash flows.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">In July 2017, the FASB issued ASU 2017-11, &#x201c;Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception, (ASU 2017-11).&#x201d; Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating&#xa0;<i>Topic 480, Distinguishing Liabilities from Equity,</i>&#xa0;because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company adopted ASU 2017-11 on its consolidated financial statements. Upon adoption the Company derecognized 39,512,502 number of warrants based on review of contracts that determined the derivative treatment was specific to a feature in the instrument that reduced the strike price if the Company issued additional shares for an amount less than the strike price. As a result of this analysis the Company recorded a cumulative effect adjustment of $118,675 on January 1, 2019.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">The Company has examined all other recent accounting pronouncements and determined that they will not have a material impact on its financial position, results of operations, or cash flows.</p><br/> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Basis of Presentation and Principles of Consolidation</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (&#x201c;GAAP&#x201d;) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments consisting of normal recurring accruals considered necessary for a fair and non-misleading presentation of the financial statements have been included. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The balance sheet as of December 31, 2019 has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements. These interim consolidated financial statements should be read in conjunction with the December 31, 2019 audited consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on May 12, 2021.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying consolidated financial statements include the accounts of BoxScore Brands, Inc. and the operations of its wholly owned subsidiaries, U-Vend America, Inc., U-Vend Canada, Inc., and U-Vend USA LLC. All intercompany balances and transactions have been eliminated in consolidation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Use of Estimates</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates and be based on events different from those assumptions. Future events and their effects cannot be predicted with certainty; estimating, therefore, requires the exercise of judgment. Thus, accounting estimates change as new events occur, as more experience is acquired, or as additional information is obtained.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Property and Equipment</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Property and equipment are stated at cost less depreciation. Depreciation is provided using the straight-line method over the estimated useful life of the assets. Equipment has estimated useful live between three and seven years. Expenditures for repairs and maintenance are charged to expense as incurred.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Impairment of Long-lived Assets</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Long-lived assets, such as property and equipment and intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount to the estimated future undiscounted cash flows expected to be generated by the asset group. If it is determined that an asset group is not recoverable, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds its fair value.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Common Shares Issued and Earnings Per Share</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Common shares issued are recorded based on the value of the shares issued or consideration received, whichever is more readily determinable. The Company presents basic and diluted earnings per share. Basic earnings per share reflect the actual weighted average of shares issued and outstanding during the period. Diluted earnings per share are computed including the number of additional shares that would have been outstanding if dilutive potential shares had been issued. In a loss period, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potential common shares is anti-dilutive.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of March 31, 2020 and December 31, 2019, respectively, there were approximately 159.9 million shares potentially issuable under convertible debt agreements, options, and warrants that could dilute basic earnings per share in the future that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive to the Company&#x2019;s losses during the periods presented.</p> 159900000 159900000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Preferred Stock Authorized</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has authorization for &#x201c;blank check&#x201d; preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to common stock. As of March 31, 2020 and December 31, 2019, there are 10,000,000 shares of preferred stock authorized, and no shares issued or outstanding.</p> 10000000 10000000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Derivative Financial Instruments</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. Certain warrants issued by the Company contain terms that result in the warrants being classified as derivative liabilities for accounting purposes. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><font style="text-decoration:underline">Fair Value of Financial Instruments</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">For certain of the Company&#x2019;s financial instruments, including cash and equivalents, accounts receivable, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, &#x201c;Fair Value Measurements and Disclosures,&#x201d; requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, &#x201c;Financial Instruments,&#x201d; defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:</p><br/><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><font style="font-size: 10pt">&#x25cf;</font></td><td style="text-align: justify"><font style="font-size: 10pt">Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis</font></td> </tr></table><br/><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><font style="font-size: 10pt">&#x25cf;</font></td><td style="text-align: justify"><font style="font-size: 10pt">Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.</font></td> </tr></table><br/><table cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><font style="font-size: 10pt">&#x25cf;</font></td><td style="text-align: justify"><font style="font-size: 10pt">Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). Level 3 instruments include derivative warrant instruments. The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2.</font></td> </tr></table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Certain of the Company&#x2019;s debt and equity instruments include embedded derivatives that require bifurcation from the host contract under the provisions of ASC 815-40, &#x201c;Derivatives and Hedging.&#x201d; Certain warrants were issued between June 2013 and December 2014 were derivative liabilities outside the exception of applying ASU 2017-11, &#x201c;Accounting for Certain Financial Instruments with Down Round Features.&#x201d; When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity&#x2019;s own stock. On January 1, 2020, the Company adopted ASU 2017-11 on its consolidated financial statements and reclassified $118,675 as equity form derivative liabilities. The estimated fair value of the derivative warrant instruments was calculated using a Black Scholes valuation model.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis As of March 31, 2020 and December 31, 2019 31, 2019:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt">&#xa0;</td><td style="font-size: 10pt; font-weight: bold">&#xa0;</td> <td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center">Carrying</td><td style="font-size: 10pt; font-weight: bold">&#xa0;</td><td style="font-size: 10pt; font-weight: bold">&#xa0;</td> <td colspan="10" style="font-size: 10pt; font-weight: bold; text-align: center">Fair Value Measurement at</td><td style="font-size: 10pt; 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font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 9%; font-size: 10pt; text-align: right">&#xa0;</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 9%; font-size: 10pt; text-align: right">&#xa0;</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 9%; font-size: 10pt; text-align: right">&#xa0;</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Derivative liabilities, debt and equity instruments</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; 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font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 9%; font-size: 10pt; text-align: right">&#xa0;</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Derivative liabilities, debt and equity instruments</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">13,553</td><td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; text-align: right">&#x2014;</td><td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; text-align: right">&#x2014;</td><td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">13,553</td><td style="font-size: 10pt; text-align: left">&#xa0;</td></tr> </table> 118675 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Stock-Based Compensation</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for stock-based compensation in accordance with ASC 718, &#x201c;Compensation &#x2013; Stock Compensation,&#x201d; that requires all stock-based awards granted to employees, directors, and non-employees to be measured at grant date fair value of the equity instrument issued, and recognized as expense. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period of the award, which is generally equivalent to the vesting period. The fair value of each stock option granted is estimated using the Black-Scholes option pricing model. The measurement date for the non-forfeitable awards to nonemployees that vest immediately is the date the award is issued.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Gain on Liabilities Settlement</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the three months ended March 31, 2019, creditors forgave aggregate amount of $156,709, of which approximately $64,000 were associated accrued expenses, $45,000 related to conversion of approximately $105,000 of accounts payable to a $60,000 convertible note, and $47,000 was connected to forgiveness of accounts payable.</p> -156709 64000 45000 105000 60000 47000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Other amounts due to related parties</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Amounts due from related parties represent past amounts owed for compensation and operating expenses paid by the related party on behalf of the Company. During the year ended December 31, 2019, the Company reclassified approximately $185,000 from due to related parties to accrued expenses, as a result of the individual no longer being an officer of the Company during 2019, and paid net $63,370 to related parties, resulting in a balance of $67,022 owed at December 31, 2019. During the three months ended March 31, 2020, this amount was reclassed to accrued expenses.</p> 185000 63370 67022 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Revenue Recognition</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Revenue is recognized at the time each vending transaction occurs, the payment method is approved, and the product is disbursed from the machine. Wholesale revenue, including revenue earned under contracts with major sports organizations, are recognized at the time the products are delivered to the customer based on the agreement with the customer. We recognize revenue under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (&#x201c;ASC 606&#x201d;), the core principle of which is that an entity should recognize revenue to depict the transfer of control for promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the revenue recognition principles, an entity is required to identify the contract(s) with a customer, identify the performance obligations, determine the transaction price, allocate the transaction price to the performance obligations and recognize revenue as the performance obligations are satisfied (i.e., either over time or at a point in time). 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As of the reporting date, the Company has not adopted ASU 2016-02 and has elected to defer implementation until January 1, 2022, as allowed by ASU 2019-10. The Company is still determining the impact ASC 842 will have on its financial position, results of operations, and cash flows.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">In July 2017, the FASB issued ASU 2017-11, &#x201c;Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception, (ASU 2017-11).&#x201d; Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating&#xa0;<i>Topic 480, Distinguishing Liabilities from Equity,</i>&#xa0;because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company adopted ASU 2017-11 on its consolidated financial statements. Upon adoption the Company derecognized 39,512,502 number of warrants based on review of contracts that determined the derivative treatment was specific to a feature in the instrument that reduced the strike price if the Company issued additional shares for an amount less than the strike price. 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font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 9%; font-size: 10pt; text-align: right">&#xa0;</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 9%; font-size: 10pt; text-align: right">&#xa0;</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 9%; font-size: 10pt; text-align: right">&#xa0;</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Derivative liabilities, debt and equity instruments</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">13,947</td><td style="font-size: 10pt; 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font-size: 10pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="width: 52%; font-size: 10pt; text-align: center">&#xa0;</td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 9%; font-size: 10pt; text-align: right">&#xa0;</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 9%; font-size: 10pt; text-align: right">&#xa0;</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 9%; font-size: 10pt; text-align: right">&#xa0;</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 9%; font-size: 10pt; text-align: right">&#xa0;</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Derivative liabilities, debt and equity instruments</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">13,553</td><td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; text-align: right">&#x2014;</td><td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; text-align: right">&#x2014;</td><td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">13,553</td><td style="font-size: 10pt; text-align: left">&#xa0;</td></tr> </table> 13947 13947 13553 13553 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 3 &#x2013; Going Concern</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying consolidated financial statements have been prepared on a going concern basis. The Company reported net loss of $218,196 for the three months ended March 31, 2020 and has incurred accumulated losses totaling $14,416,338 through March 31, 2020. In addition, the Company has incurred negative cash flows from operating activities since its inception. The Company has relied on the proceeds from loans and private sales of its stock, in addition to its revenues, to finance its operations. These factors, among others, indicate that the Company may be unable to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">With the onset of the Covid 19 pandemic, the reduction of foot traffic and closure of retail locations, management has been proactively looking at new business models and opportunities to stabilize revenues and continue to grow the Company. Until the Company can generate significant cash from operations, its ability to continue as a going concern is dependent upon obtaining additional financing. The Company hopes to raise additional financing, potentially through the sale of debt or equity instruments, or a combination, to fund its operations for the next 12 months and allow the Company to continue the development of its business plans and satisfy its obligations on a timely basis. Should additional financing not be available, the Company will have to negotiate with its lenders to extend the repayment dates of its indebtedness. There can be no assurance that the Company will be able to successfully restructure its debt obligations in the event it fails to obtain additional financing. These conditions have raised substantial doubt as to the Company&#x2019;s ability to continue as a going concern for one year from the issuance of the financial statements, which has not been alleviated.</p><br/> -218196 14416338 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 4 &#x2013; Property and Equipment</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Property and equipment consist of the following as of March 31, 2020 and December 31, 2019:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt">&#xa0;</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March 31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&#xa0;</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December&#xa0;31,<br/> 2019</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; font-size: 10pt; text-align: left">Freezers and other equipment</td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">61,600</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">1,460,255</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="font-size: 10pt; text-align: left">Delivery vans</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; text-align: right">32,727</td><td style="font-size: 10pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Less: accumulated depreciation</td><td style="font-size: 10pt; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(730,951</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt">Total</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: right">61,600</td><td style="padding-bottom: 4pt; font-size: 10pt; font-weight: bold; text-align: left">&#xa0;</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: right">762,031</td><td style="padding-bottom: 4pt; font-size: 10pt; font-weight: bold; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Depreciation expense amounted to $0 and $62,728, respectively for the three months ended March 31, 2020 and 2019.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the three months ended March 31, 2020, the Company recorded gain on sale of assets of $12,074 related to sale of the certain freezers and other equipment.</p><br/> 0 62728 12074 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt">&#xa0;</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March 31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&#xa0;</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December&#xa0;31,<br/> 2019</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; font-size: 10pt; text-align: left">Freezers and other equipment</td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">61,600</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">1,460,255</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="font-size: 10pt; text-align: left">Delivery vans</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; text-align: right">-</td><td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; text-align: right">32,727</td><td style="font-size: 10pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1.5pt">Less: accumulated depreciation</td><td style="font-size: 10pt; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(730,951</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt">Total</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: right">61,600</td><td style="padding-bottom: 4pt; font-size: 10pt; font-weight: bold; text-align: left">&#xa0;</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; font-weight: bold; text-align: right">762,031</td><td style="padding-bottom: 4pt; font-size: 10pt; font-weight: bold; text-align: left">&#xa0;</td></tr> </table> 61600 1460255 32727 730951 61600 762031 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 5 &#x2013; Debt</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Senior Convertible Notes</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2018, a Senior Convertible Note in the aggregate principal amount of $310,000 and a maturity date of December 31, 2018 payable to Cobrador Multi-Strategy Partners, LP (&#x201c;Cobrador 1&#x201d;), was extended until December 31, 2019. The Company also extended the expiration dates of Series A Warrants issued in connection with Cobrador 1 by one year. The fair value of the Series A Warrants did not materially change due to the extension.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 30, 2016, the Company issued a Senior Convertible Note in the face amount of $108,804 to Cobrador (&#x201c;Cobrador 2&#x201d;) in settlement of previously accrued interest, additional interest, fees and penalties. The additional interest, fees and penalties was $72,734 and this amount was charged to operations as debt discount amortization during the year ended December 31, 2016. The Senior Convertible Note was extended during the year ended December 31, 2018 and was due on December 31, 2019. It is convertible into shares of common stock at a conversion price $0.05 per share and bears interest at 7% per annum. The Company determined that Cobrador 2 had a beneficial conversion feature based on the difference between the conversion price and the market price on the date of issuance and allocated $87,043 as debt discount representing the beneficial conversion feature which was fully amortized at December 31, 2017.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During December 2017, the Company issued a Senior Convertible Note in the amount of $25,000 to Cobrador. The note bears interest at 7%, was due in December 2019, and is convertible into common shares at a conversion price of $0.05 per share. In addition, in conjunction with this note, the Company issued 500,000 warrants to purchase common shares at $0.05 with a contractual term of 5 years. The estimated value of the warrants was determined to be $1,421 and was recorded as interest expense during 2017 and a warrant liability due to the down round provision in the note agreement.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At March 31, 2020 and December 31, 2019, the Cobrador notes had a carrying value of $443,804.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of the date of release of these financial statements, all senior convertible notes were in default.<font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Promissory Notes Payable</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During 2014, the Company issued an unsecured promissory note to a former employee of U-Vend Canada. The original amount of this note was $10,512 has a term of 3 years and accrues interest at 17% per annum. The total principal outstanding on this promissory note at March 31, 2020 and December 31, 2019 was $6,235.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Starting in 2015, the Company entered into a series of promissory notes from the same lender. All of the notes bear interest at a rate of 19% per annum and are payable together with interest over a period of six (6) months from the date of borrowing. As of December 31, 2015, we had note balance of $11,083. In 2016, the Company borrowed $76,500 and repaid $63,497. The balance outstanding on these notes was $24,116 at December 31, 2016. In 2017, the Company borrowed $36,400 and repaid $44,449. The balance outstanding on these notes was $16,067 at December 31, 2017. In 2018, the Company borrowed $143,908 and repaid $125,931. The balance outstanding on these notes was $34,044 at December 31, 2018. During the year ended December 31, 2019, the Company borrowed additional $38,325 and recorded additional original discount in the amount of $3,325 associated with the new borrowing. During the year ended December 31, 2019, the Company repaid $46,584 in principal and fully amortized $3,325 of debt discount. As of March 31, 2020 and December 31, 2019, the balance outstanding on these notes was $25,784.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2016, the Company issued two unsecured promissory notes and borrowed an aggregate amount of $80,000. The promissory notes bear interest at 10% per annum, with a provision for an increase in the interest rate upon an event of default as defined therein and were due at various due dates in May and September 2017. The due dates of both notes were extended to December 31, 2019. As of March 31, 2020 and December 31, 2019, the balance outstanding on these notes was $80,000.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In December 2017, the Company issued promissory notes in the aggregate principal balance of $28,000 to Cobrador. The notes accrue interest at 7% and have a two-year term. As of March 31, 2020 and December 31, 2019, the balance outstanding on these notes was $28,000.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 18, 2018, the Company issued a promissory note in the principal amount of $187,500 with net proceeds of $147,000. The Company agreed to pay $1,143 per business day for 164 days. The Company recorded $40,500 to debt discount. During 2018, the Company repaid $128,050 in principal and amortized $40,500 of debt discount resulting in an unamortized debt discount of $0 and carrying value of $59,450 at December 31, 2018. During the year ended December 31, 2019, this note was paid off.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 13, 2018, the Company issued a promissory note in the principal amount of $115,000. This note bears interest at the rate of 7% per annum, due on December 31, 2019. In 2019, the Company borrowed an additional $25,000 and repaid $60,000. The balance outstanding on this note at March 31, 2020 and December 31, 2019, was $80,000.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In October 2014, January 2015 and October 2015, the Company entered into three (3) separate 24-month equipment financing agreements (the &#x201c;Agreements&#x201d;) with Perkins Industries, LLC (&#x201c;Perkins&#x201d;) for equipment in the aggregate amount of $387,750 with an annual interest rate of 15%. The assets financed consisted of self-service electronic kiosks placed in service in the Company&#x2019;s Southern California region. The Company is obligated to make monthly interest only payments in accordance with the Agreements. The Agreements include a put/call option at the end of year one and the end of year two. Neither of these options were exercised. During 2017 $100,000 was paid down on the notes. The carrying value as of December 31, 2018 was $287,750. Maturities of these notes were extended to December 31, 2019. During the year ended December 31, 2019, $39,266 was paid down on the notes. On April 1, 2019, total principal and accrued interest in the amount of $321,824 were restructured into two converted notes below. The carrying value as of March 31, 2020 and December 31, 2019 was $0.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Agreements Perkins received a warrant to purchase an aggregate of 310,200 shares at an exercise price of $0.35 per share with a contractual term of three (3) years. The warrant was recorded as a debt discount and a warrant liability in the aggregate amount of $3,708 due to the down round provision, pursuant which the exercise price of the warrants was revised to $0.26 at December 31, 2016.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In October 2016, the Company and Perkins agreed to extend the termination date of two of the Agreements to October 17, 2017 and January 5, 2018. In consideration of this extension, the Company issued an additional 200,000 warrants with an exercise price of $0.05 per share and a five-year contractual term. The fair value of the warrants was not material and was charged to operations in the accompanying statement of operations for the year ended December 31, 2016.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2018 the Agreements were purchased by a third party and the due dates were extended to December 31, 2019.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 19, 2018, the Company issued a promissory note in the principal amount of $124,000 with net proceeds of $112,840. This note matures in 64 weeks. The Company recorded $11,160 to debt discount. During the year ended December 31, 2018, the Company repaid $9,784 in principal and amortized $872 of debt discount resulting in an unamortized debt discount of $10,288 and carrying value of $103,928 at December 31, 2018. During the year ended December 31, 2019, the Company repaid $48,154 in principal and amortized $9,744 of debt discount resulting in an unamortized debt discount of $544 and carrying value of $65,518 at December 31, 2019. During the three months ended March 31, 2020, the Company fully amortized $544 of debt discount. As of March 31, 2020, the balance outstanding on these notes was $66,062.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 12, 2018, the Company issued a promissory note in the principal amount of $112,425 with net proceeds of $64,500. The Company agreed to pay $937 per business day for 120 days. The Company recorded $47,925 to debt discount. During the year ended December 31, 2018, the Company repaid $9,370 in principal and amortized $3,744 of debt discount resulting in an unamortized debt discount of $44,181 and carrying value of $58,874 at December 31, 2018. During the year ended December 31, 2019, the Company repaid $103,055 in principal and fully amortized $44,181 of remaining debt discount resulting in carrying value of $0 at December 31, 2019.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 5, 2019, the Company issued a non-equity linked promissory note for $100,000 to an investor with an annual 10% rate of interest and a one (1) year maturity. This investor also received a warrant for 500,000 shares at a strike price of $0.07 per share with a five (5) year maturity. The fair value of warrant was not material. As of March 31, 2020 and December 31, 2019, the outstanding balance was $100,000.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2019, the Company issued two promissory notes in the aggregate principal amount of $135,000, bearing interest of 7% and mature on August 8, 2019. As of March 31, 2020 and December 31, 2019, the balance outstanding on these notes was $135,000.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of the date of release of these financial statements, all promissory notes were in default.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><font style="text-decoration:underline">Convertible Notes Payable</font></b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">2014 Stock Purchase Agreement</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In 2014 and 2015 the Company entered into the 2014 Securities Purchase Agreement (the &#x201c;2014 SPA&#x201d;) pursuant to which it issued eight (8) convertible notes in the aggregate face amount of $146,000 due at various dates between August 2015 and March 2016. The principal on these notes is due at the holder&#x2019;s option in cash or common shares at a conversion rate of $0.30 per share. In connection with these borrowings the Company granted a total of 360,002 warrants with an exercise price of $0.35 per share and a 5 year contractual term. The warrants issued have a down round provision and as a result are classified as a liability in the accompanying consolidated balance sheets. Pursuant to the down round provision, the exercise price of the warrants was reduced to $0.22 at December 31, 2016. During 2017 the Company repaid one of the notes in the amount of $50,000. On May 1, 2018, the Company granted 1,000,000 warrants with an exercise price of $0.15 per share and a 5 year contractual term, valued at $2,841, which was recorded as debt discount. As of March 31, 2020, December 31, 2019 and 2018, outstanding balances of these notes were $121,000. As of the date of release of these financial statements, these notes were in default.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company and Cobrador held three of the convertible notes in the aggregate face amount of $45,000 and agreed to extend the repayment date to November 17, 2020. The Company agreed to a revised conversion price of $0.05 per share and a revised warrant exercise price of $0.07 per share. The change in the value of warrants was not material and was charged to operations during the year ended December 31, 2017. As of March 31, 2020 and December 31, 2019, outstanding balances of these notes were $45,000.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="text-decoration:underline">2015 Stock Purchase Agreement</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2015, the Company issued eleven subordinated convertible notes bearing interest at 9.5% per annum with an aggregate principal balance of $441,000 pursuant to the 2015 Stock Purchase Agreement (the &#x201c;2015 SPA&#x201d;). The notes were due in December 2017 and are payable at the noteholder&#x2019;s option in cash or common shares at a conversion rate of $0.30 per share. The conversion rate was later revised to $0.05 due to down round provisions contained in the 2015 SPA, and the due date was extended to November 17, 2020. In connection with these borrowings, the Company issued a warrant to purchase 735,002 shares of the Company&#x2019;s common stock at an exercise price of $0.40 per share and a 5 year contractual term. The exercise price was later revised to $0.22 per share pursuant to the down round provisions in the 2015 SPA. The Company allocated $8,113 of proceeds received to debt discount based on the computed fair value of the convertible notes and warrants issued. During the year ended December 31, 2016, the noteholder converted one note in the face amount of $35,000 into 700,000 shares of common stock. As of March 31, 2020 and December 31, 2019, the 2015 SPA had a balance of $406,000. The debt discount was fully amortized as of December 31, 2016. As of the date of release of these financial statements, these notes were in default.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">2016 Stock Purchase Agreement</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 30, 2016, the Company entered into the 2016 Stock Purchase Agreement (the &#x201c;2016 SPA&#x201d;) pursuant to which it issued five convertible notes in the aggregate principal amount of $761,597. The 2016 SPA notes are due in November 2020 and bear interest at 9.5% per annum. The notes are convertible into shares of common stock at a conversion price of $0.17 per share. With this note, the Company satisfied its obligations for: previously issued promissory notes of $549,000, accrued interest of $38,615, lease principal installments of $47,466, previously accrued registration rights penalties of $22,156, due to a former officer of $81,250, and additional interest, expenses, fine and penalties of $23,110. The Company charged additional interest, expenses, fines and penalties $23,110 to operations as amortization of debt discount and deferred financing costs during the year ended December 31, 2016.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In connection with the 2016 SPA, the Company granted a total of 2,239,900 warrants with an exercise price of $0.30 per share which was later revised to $0.05 per share due to down round provisions, with a 5 year contractual life. The Company allocated $19,242 to debt discount based on the computed fair value of the convertible notes and warrants issued and classified the debt discount is as a warrant liability due to the down round provision in the warrants.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 11, 2019, $85,000 in principal was converted into 1,700,000 shares of common stock. &#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of March 31, 2020 and December 31, 2019, the 2016 SPA had a carrying value of $676,597. As of the date of release of these financial statements, these notes are in default.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Other 2016 Financings</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2016, the Company issued four convertible notes (the &#x201c;Cobrador 2016 Notes&#x201d;) in the aggregate principal amount of $115,000. The Cobrador 2016 Notes have a 2 year term, bear interest at 9.5% per annum, and are convertible into shares of common stock at a conversion price of $0.17 per share. The conversion price was subsequently revised to $0.05 per the down round provisions and the maturity date was extended to September 26, 2021. In connection with the Cobrador 2016 Notes, the Company granted a total of 338,235 warrants with an exercise price of $0.30 per share which was subsequently revised to $0.05 per share due to down round provisions with a 5 year contractual term. The Company allocated $1,994 to debt discount based on the computed fair value of the convertible notes and warrants issued and classified the debt discount as a warrant liability due to the down round provision in the warrants. During the year ended December 31, 2019, $20,000 was converted into 400,000 shares. As of March 31, 2020 and December 31, 2019, the Cobrador 2016 Notes had a carrying value of $95,000.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the fourth quarter of 2016, the Company issued three additional convertible notes in the aggregate principal amount of $250,000. The notes have a 2 year term, bear interest at 9.5% per annum and are convertible into shares of common stock at a conversion price of $0.05 per share. In connection with these borrowings, the Company granted warrants to purchase 5,000,000 shares of common stock with an exercise price of $0.07 per share. The Company allocated $27,585 to debt discount based on the computed fair value of the convertible notes and warrants issued, and the debt discount was classified as a warrant liability due to the down round provision in the warrants. As of March 31, 2020 and December 31, 2019, the carrying value of the notes was $250,000. As of the date of release of these financial statements, these notes were in default.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">2017 Financings</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2017, the Company entered into 19 separate convertible notes agreements (the &#x201c;2017 Convertible Notes)&#x201d; in the aggregate principal amount of $923,882. The 2017 Convertible Notes each have a 2 year term, bear interest at 9.5%, and are convertible into shares of common stock at a conversion price of $0.05 per share. In connection with the 2017 Convertible Notes, the Company issued a total of 16,537,926 warrants with an exercise price of $0.07 per share with a 5 year term. The Company allocated $59,403 to a debt discount based on the computed fair value of the convertible notes and warrants issued and classified the debt discount as a warrant liability due to the down round provision in the warrants. During the year ended December 31, 2018, the Company amortized $31,940 of debt discount resulting in unamortized debt discount of $13,278 and carrying value of $910,608 at December 31, 2018. During the year ended December 31, 2019, the Company fully amortized remaining $13,278 of debt discount. As of March 31, 2020 and December 31, 2019, the carrying value of the notes was $924,282. As of the date of release of these financial statements, these notes were in default.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">2018 Financings</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2018, the Company entered into seventeen separate convertible notes agreements (the &#x201c;2018 Convertible Notes)&#x201d; in the aggregate principal amount of $537,500. The 2018 Convertible Notes each have a 2 year term, bear interest at 9.5% if paid in cash, 15% if paid in common stock, and are convertible into shares of common stock at a conversion price of $0.05 per share. In connection with the 2018 Convertible Notes, the Company issued a total of 10,750,000 warrants with an exercise price of $0.07 per share with a 5 year term. The Company allocated $33,384 to a debt discount based on the computed fair value of the convertible notes and warrants issued and classified the debt discount as a warrant liability due to the down round provision in the warrants. During the year ended December 31, 2018, the Company amortized $12,803 of debt discount resulting in an unamortized debt discount of $20,581 and carrying value of $516,919 at December 31, 2018. During the year ended December 31, 2019, the Company amortized $16,692 of debt discount resulting in an unamortized debt discount of $3,889 and carrying value of $533,611 at December 31, 2019. During the three months ended March 31, 2020, the Company amortized $2,113 of debt discount resulting in an unamortized debt discount of $1,776 and carrying value of $535,724 at March 31, 2020. As of the date of release of these financial statements, convertible notes in aggregate amount of $340,000 were in default.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 20, 2018, two officers converted $436,500 accrued compensation into two convertible note agreements in the principal amount of $436,500. The notes have a 2 year term, bear interest at 9.5% if paid in cash, 15% if paid in common stock, and is convertible into shares of common stock at a conversion price of $0.05 per share.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During&#xa0;the year ended December 31, 2018, the Company entered into three convertible notes agreements in the aggregate principal amount of $240,500 with a net proceed of $214,000. These notes had a 1-year term, and bears interest at 8%-12%. The notes are convertible into common stock at 60% to 61% multiplied by the lowest one to two trading price(s) during fifteen to twenty-five trading day period prior to the Conversion Date. The embedded conversion features were valued at $59,027, which were recorded as debt discount. In addition, the Company also recorded $26,500 as original debt discount. These notes were in default due to failure to comply with the reporting requirements of the Exchange Act, as a result, the Company recorded an additional $120,250 penalty in principal as of December 31, 2018. During the year ended December 31, 2018, the Company amortized $21,382 of debt discount resulting in unamortized debt discount of $64,145 and carrying value of $296,605 at December 31, 2018. During the year ended December 31, 2019, the Company repaid $64,300 in principal and amortized $21,381 of debt discount, recorded $42,764 in accretion of debt discount, resulting in unamortized debt discount of $0 and carrying value of $296,450 at December 31, 2019. During the three months ended March 31, 2020, the repayment in the amount of $400 was returned to the Company resulting in carrying value of $296,850 at March 31, 2020.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">2019 Financings</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 18, 2019, the Company issued a convertible promissory note for $85,250 with net proceed of $75,000 to an investor with an 8.0% rate of interest and a nine-month maturity. The Company has the option to pre-pay the note (principal and accrued interest) in cash within the 1st 90 days from issuance at a 25% premium, and 40% premium 91-180 days from the issuance date. Subsequent to 181 days, the Company shall have no right of prepayment and the holder may convert at a 40% discount to the prevailing market price. The note matured on December 11, 2019. The note is convertible into shares of common stock at the lesser of 1) lowest trading price of twenty-five days prior to March 18, 2019 or 2) 60% of lowest trading price of twenty-five days prior to the Conversion Day. In addition, the Company also recorded $10,250 as original debt discount. These notes were in default due to failure to comply with the reporting requirements of the Exchange Act, as a result, the Company recorded an additional $42,625 penalty in principal as of December 31, 2019.&#xa0;During the year ended December 31, 2019, the Company amortized $23,384 of debt discount resulting in unamortized debt discount of $0. As of March 31, 2020 and December 31, 2019, the carrying value of the note was $127,875. As of the date of release of these financial statements, convertible note was in default.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 14, 2019, the Company converted accounts payable of approximately $105,000 payables into a convertible note agreement in the principal amount of $60,000, remaining balance of the amount owed was released and recorded as a settlement of liability. The note has a 2 year term, bears interest at 9.5% if paid in cash, 15% if paid in common stock, and is convertible into shares of common stock at a conversion price of $0.05 per share.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 1, 2019, The Company converted an aggregate amount of principal and accrued interest of Perkins promissory note in the amount of $321,824 and accounts payable of $10,000 into two convertible notes. Both Notes have a 2 year term, bear interest at 9.5% if paid in cash, 15% if paid in common stock, and are convertible into shares of common stock at a conversion price of $0.05 per share. The outstanding principal balance was $331,824 at March 31, 2020 and December 31, 2019.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 15, 2019, the Company converted an accrued payable of $108,572, which was used to purchase vending machine, into a convertible note. The Note has a 2 year term, bear interest at 9.5% if paid in cash, 15% if paid in common stock, and are convertible into shares of common stock at a conversion price of $0.07 per share. The outstanding principal balance was $108,572 at March 31, 2020 and December 31, 2019.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font>On May 30, 2019, the Company issued a series of convertible notes under a $250,000 revolving Senior Secured credit facility to an investor, for working capital purposes. The notes carry an interest rate of 9.5% and a two-year term. The notes are convertible into common stock at $0.07 per share and are redeemable after one-year at the Company&#x2019;s option. The notes also contain a 4.99% limitation of ownership on conversion. The investor had consented to higher draws on the facility in excess of the limit per the initial agreement. As of March 31, 2020 and December 31, 2019, $451,231 and $426,303 was drawn under the agreement, respectively. Subsequent to March 31, 2020, the agreement was modified formally to increase the limit on the facility by $206,231.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2019, the Company entered into several convertible notes agreements in the amount of $68,000. The Notes have a 2 year term, bear interest at 9.5% if paid in cash, 15% if paid in common stock, and are convertible into shares of common stock at a conversion price of $0.07 per share. The outstanding principal balance was of $68,000 at March 31, 2020 and December 31, 2019.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2019, the Company entered into a convertible notes agreement in the amount of $50,000. The Note has a 6 month term, bears interest at 9.5% if paid in cash, 15% if paid in common stock, and is convertible into shares of common stock at a conversion price of $0.01 per share. In connection with the Note, the Company issued 10,000,000 warrants with an exercise price of $0.02 per share with a 5 year term. The outstanding balance was of $50,000 at March 31, 2020 and December 31, 2019.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">2020 Financings</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 1, 2020, the Company issued a convertible note in the amount of $8,500 in conversion of accrued liabilities. The Note has a 2 year term, bears interest of 9.5% if paid in cash, 15% if paid in common stock, and is convertible into shares of common stock at a conversion price of $0.05 per share. The outstanding principal balance was $8,500 as of March 31, 2020.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 1, 2020, the Company issued a convertible note in the amount of $17,899 in conversion of accrued liabilities. The Note has a 2 year term, bears interest of 9.5% if paid in cash, 15% if paid in common stock, and is convertible into shares of common stock at a conversion price of $0.05 per share. The outstanding principal balance was $17,899 as of March 31, 2020.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Scheduled maturities of debt remaining as of March 31, 2020 for each respective fiscal year end are as follows:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left">2020</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">5,037,720</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2021</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">913,396</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">2022</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">36,399</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">5,987,515</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Less: unamortized debt discount</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,776</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 4pt">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,985,740</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table reconciles, for the three months ended March 31, 2020 and 2019, the beginning and ending balances for financial instruments related to the embedded conversion features that are recognized at fair value in the consolidated financial statements.</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March&#xa0;31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March 31,<br/> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Balance of embedded derivative at the beginning of the period</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">13,553</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">28,357</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Additions related to embedded conversion features of convertible debt issued -</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Derivative liabilities reduction due to notes default</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(112,408</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Change in fair value of conversion features</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">394</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">158,987</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Balance of embedded derivatives at the end of the period</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">13,947</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">74,936</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/> 310000 108804 72734 0.05 0.07 87043 25000 0.07 0.05 500000 0.05 P5Y 1421 443804 443804 10512 P3Y 0.17 6235 6235 0.19 11083 76500 63497 24116 36400 44449 16067 143908 125931 34044 38325 3325 46584 3325 25784 25784 80000 0.10 80000 80000 28000 0.07 28000 28000 187500 147000 The Company agreed to pay $1,143 per business day for 164 days. 40500 128050 40500 0 59450 115000 0.07 25000 60000 80000 80000 387750 0.15 100000 287750 39266 321824 0 0 310200 0.35 P3Y 3708 0.26 200000 0.05 124000 112840 11160 9784 872 10288 103928 48154 9744 544 65518 544 66062 112425 64500 The Company agreed to pay $937 per business day for 120 days. 47925 9370 3744 44181 58874 103055 44181 0 100000 0.10 P1Y 500000 0.07 P5Y 100000 100000 135000 0.07 2019-08-08 135000 135000 8 146000 0.30 360002 0.35 P5Y 0.22 50000 1000000 0.15 P5Y 2841 121000 121000 3 45000 2020-11-17 0.05 0.07 45000 45000 11 0.095 441000 0.30 0.05 735002 0.40 P5Y 0.22 8113 35000 700000 406000 406000 5 761597 0.095 0.17 549000 38615 47466 22156 81250 23110 23110 2239900 0.30 0.05 P5Y 19242 85000 1700000 676597 676597 115000 P2Y 0.095 0.17 0.05 338235 0.30 0.05 P5Y 1994 During the year ended December 31, 2019, $20,000 was converted into 400,000 shares. 95000 95000 250000 P2Y 0.095 0.05 5000000 0.07 27585 250000 250000 923882 P2Y 0.095 0.05 16537926 0.07 P5Y 59403 31940 13278 910608 13278 924282 924282 537500 P2Y 0.095 0.15 0.05 10750000 0.07 P5Y 33384 12803 20581 516919 16692 3889 533611 2113 1776 535724 340000 436500 436500 P2Y 0.095 0.15 0.05 3 240500 214000 P1Y 0.08 0.12 0.60 0.61 59027 26500 120250 21382 64145 296605 64300 21381 42764 0 296450 400 296850 85250 75000 0.080 The Company has the option to pre-pay the note (principal and accrued interest) in cash within the 1st 90 days from issuance at a 25% premium, and 40% premium 91-180 days from the issuance date. Subsequent to 181 days, the Company shall have no right of prepayment and the holder may convert at a 40% discount to the prevailing market price. The note matured on December 11, 2019. The note is convertible into shares of common stock at the lesser of 1) lowest trading price of twenty-five days prior to March 18, 2019 or 2) 60% of lowest trading price of twenty-five days prior to the Conversion Day. In addition, the Company also recorded $10,250 as original debt discount. 42625 23384 0 127875 127875 105000 60000 P2Y 0.095 0.15 0.05 321824 10000 2 P2Y 0.095 0.15 0.05 331824 331824 108572 P2Y 0.095 0.15 0.07 108572 108572 250000 0.095 0.07 0.0499 451231 426303 206231 68000 P2Y 0.095 0.15 0.07 68000 68000 50000 P6M 0.095 0.15 0.01 10000000 0.02 P5Y 50000 50000 8500 P2Y 0.095 0.15 0.05 8500 17899 P2Y 0.095 0.15 0.05 17899 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left">2020</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">5,037,720</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2021</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">913,396</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">2022</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">36,399</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">5,987,515</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Less: unamortized debt discount</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,776</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 4pt">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,985,740</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 5037720 913396 36399 5987515 1776 5985740 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March&#xa0;31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March 31,<br/> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Balance of embedded derivative at the beginning of the period</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">13,553</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">28,357</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Additions related to embedded conversion features of convertible debt issued -</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Derivative liabilities reduction due to notes default</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(112,408</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Change in fair value of conversion features</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">394</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">158,987</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Balance of embedded derivatives at the end of the period</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">13,947</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">74,936</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 13553 28357 112408 394 158987 13947 74936 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 8 &#x2013; Capital Lease Obligations</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company acquired capital assets under capital lease obligations. Pursuant to the agreement with the lessor, the Company makes quarterly lease payments and will make a guaranteed residual payment at the end of the lease as summarized below. At the end of the lease, the Company will own the equipment.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In August 2016, the Company and the lessor agreed to extend the term of the lease until December 31, 2020. As a consideration of the extension, the Company issued warrants to acquire 150,000 shares of common stock. The warrants have an exercise price of $0.30 per share, a term of three years, and were recorded as a debt discount and warrant liability due to the down round provision and as such are marked to market each reporting period.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2018 the Company entered into various capital lease agreements. The leases expire at various points through the year ended December 31, 2023.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following schedule provides minimum future rental payments required as of March 31, 2020, under the current portion of capital leases.</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left">2020</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">107,673</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2021</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">49,831</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2022</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">30,584</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">2023</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">10,252</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Total minimum lease payments</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">198,340</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Less: Amount represented interest</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(27,911</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Present value of minimum lease payments and guaranteed residual value</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">170,429</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/> 150000 0.30 2023-12-31 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left">2020</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">107,673</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2021</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">49,831</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2022</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">30,584</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">2023</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">10,252</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Total minimum lease payments</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">198,340</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Less: Amount represented interest</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(27,911</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Present value of minimum lease payments and guaranteed residual value</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">170,429</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 107673 49831 30584 10252 198340 27911 170429 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 9 &#x2013; Capital Stock</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has authorized 600,000,000 shares of common stock.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">During the three months ended March 31, 2019, the Company issued 3,271,000 shares of its common stock, comprised of 2,871,096 shares of common stock with a fair value of $41,003 for services rendered, and 400,000 shares in conversion of $20,000 of convertible notes. There were no common stock issuances during the three months ended December 31, 2020.</p><br/> 600000000 3271000 2871096 41003 400000 20000 0 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 10 &#x2013; Stock Options and Warrants</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="text-decoration:underline">Warrants</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">At March 31, 2020 the Company had the following warrant securities outstanding:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Warrants</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Exercise<br/> Price</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Expiration</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 55%; text-align: left">2015 Warrants - 2015 SPA convertible debt</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">735,002</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.22</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 20%; text-align: center">April - November 2020</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2015 Warrants for services</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">127,067</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.22</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">&#xa0;April - November 2020</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2016 Warrants - 2016 SPA convertible debt</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,239,990</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.05</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">June 2021</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2016 Warrants for services</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">850,000</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.05</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">June 2021</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2016 Warrants - Convertible notes</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">338,236</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.05</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">August - September 2021</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2016 Warrants for services</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">200,000</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.07</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">October 2020</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2016 Warrants issued with Convertible Notes</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">5,000,000</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.07</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">November -December 2021</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2017 Warrants &#x2013; 2017 financing</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">15,109,354</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.07</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">December 2022</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2018 Warrants &#x2013; 2019 financing</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">9,991,905</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.07</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">January - November 2023</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2018 Warrants for services</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,250,000</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.07</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">October - December 2023</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2019 Warrants &#x2013; 2020 financing</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">10,500,000</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.07</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">March 2024</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2019 Warrants for services</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">3,500,000</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.07</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">March 2024</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">2020 Warrants for services</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">3,000,000</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">$</td><td style="padding-bottom: 1.5pt; text-align: right">0.05</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="text-align: center; padding-bottom: 1.5pt">February 2025</td></tr> <tr style="vertical-align: bottom; "> <td style="font-weight: bold; padding-bottom: 4pt">Total</td><td style="font-weight: bold; padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">51,276,404</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="text-align: center; padding-bottom: 4pt">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the three months ended March 31, 2020, the Company issued warrants exercisable into 3,000,000 shares of common stock to its officer. The fair value of warrants was determined to be $12,594, and was estimated using the Black-Scholes-Merton option-pricing model with the following assumptions: expected volatility of 339%, risk-free interest rate 1.35%, expected dividend yield of 0%.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">A summary of all warrants activity for the three months ended March 31, 2020 is as follows:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of<br/> Warrants</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> Average<br/> Exercise<br/> Price</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> Average<br/> Remaining<br/> Contractual<br/> Term</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; padding-bottom: 4pt; text-indent: -10pt; padding-left: 10pt">Balance outstanding at December 31, 2020</td><td style="width: 1%; padding-bottom: 4pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">51,276,404</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 4pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">0.06</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 4pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">3.17</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-indent: -10pt; padding-left: 20pt">Granted</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">3,000,000</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.05</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">4.84</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -10pt; padding-left: 20pt">Exercised</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-indent: -10pt; padding-left: 20pt">Forfeited</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -10pt; padding-left: 20pt">Cancelled</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 20pt">Expired</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(434,850</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">0.22</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt; text-indent: -10pt; padding-left: 10pt">Balance outstanding at March 31, 2020</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">51,276,404</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">0.06</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">3.05</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 4pt; text-indent: -10pt; padding-left: 10pt">Exercisable at March 31, 2020</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">51,276,404</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">0.06</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">3.05</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table provides a summary of changes in the warrant liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2020 and the year ended December 31, 2019.</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March&#xa0;31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December&#xa0;31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Balance of embedded derivative at the beginning of the period</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">&#xa0;&#xa0;&#xa0;&#xa0;&#xa0;&#xa0;-</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">129,355</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Fair value of warrants issued and recorded as liabilities</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Reclassification of warrant lability to equity related to adoption of ASU 2017-11</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(118,675</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Loss (gain) on fair value adjustment</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><font style="font-size: 10pt">(10, 680</font></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Balance of embedded derivatives at the end of the period</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="text-decoration:underline">Equity Incentive Plan</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 22, 2011, the Board of Directors of the Company approved the Company&#x2019;s 2011 Equity Incentive Plan (the &#x201c;Plan&#x201d;) and on July 26, 2011, stockholders holding a majority of shares of the Company approved, by written consent, the Plan and the issuance under the Plan of 5,000,000 shares. On November 16, 2017, the Board of Directors approved an increase of 10,000,000 shares to be made available for issuance under the Plan. Accordingly, the total number of shares of common stock available for issuance under the Plan is 15,000,000 shares. Awards may be granted to employees, officers, directors, consultants, agents, advisors and independent contractors of the Company and its related companies. Such options may be designated at the time of grant as either incentive stock options or nonqualified stock options. Stock-based compensation includes expense charges related to all stock-based awards. Such awards include options, warrants and stock grants. Generally, the Company issues stock options that vest over three years and expire in 5 to 10 years.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A summary of all stock option activity for the three months ended March 31, 2020 is as follows:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of<br/> Options</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> Average<br/> Exercise<br/> Price</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> Average<br/> Remaining<br/> Contractual<br/> Term</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; padding-bottom: 4pt">Balance outstanding at December 31, 2020</td><td style="width: 1%; padding-bottom: 4pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">502,500</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 4pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">0.50</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 4pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">0.5</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-left: 9pt">Granted</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 9pt">Exercised</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Cancelled or expired</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt; padding-left: 9pt; vertical-align: bottom">Balance outstanding at March 31, 2020</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">502,500</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">0.50</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">0.3</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 4pt">Exercisable at March 31, 2020</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">502,500</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">0.50</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">0.3</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/> 3000000 12594 3.39 0.0135 0.00 5000000 10000000 15000000 the Company issues stock options that vest over three years and expire in 5 to 10 years. <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Warrants</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Exercise<br/> Price</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Expiration</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 55%; text-align: left">2015 Warrants - 2015 SPA convertible debt</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">735,002</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.22</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 20%; text-align: center">April - November 2020</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2015 Warrants for services</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">127,067</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.22</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">&#xa0;April - November 2020</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2016 Warrants - 2016 SPA convertible debt</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,239,990</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.05</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">June 2021</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2016 Warrants for services</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">850,000</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.05</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">June 2021</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2016 Warrants - Convertible notes</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">338,236</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.05</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">August - September 2021</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2016 Warrants for services</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">200,000</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.07</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">October 2020</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2016 Warrants issued with Convertible Notes</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">5,000,000</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.07</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">November -December 2021</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2017 Warrants &#x2013; 2017 financing</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">15,109,354</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.07</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">December 2022</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2018 Warrants &#x2013; 2019 financing</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">9,991,905</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.07</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">January - November 2023</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2018 Warrants for services</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,250,000</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.07</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">October - December 2023</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2019 Warrants &#x2013; 2020 financing</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">10,500,000</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.07</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">March 2024</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2019 Warrants for services</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">3,500,000</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.07</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: center">March 2024</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">2020 Warrants for services</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">3,000,000</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">$</td><td style="padding-bottom: 1.5pt; text-align: right">0.05</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="text-align: center; padding-bottom: 1.5pt">February 2025</td></tr> <tr style="vertical-align: bottom; "> <td style="font-weight: bold; padding-bottom: 4pt">Total</td><td style="font-weight: bold; padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">51,276,404</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">&#xa0;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="text-align: center; padding-bottom: 4pt">&#xa0;</td></tr> </table> 735002 0.22 April - November 2020 127067 0.22 April - November 2020 2239990 0.05 June 2021 850000 0.05 June 2021 338236 0.05 August - September 2021 200000 0.07 October 2020 5000000 0.07 November -December 2021 15109354 0.07 December 2022 9991905 0.07 January - November 2023 2250000 0.07 October - December 2023 10500000 0.07 March 2024 3500000 0.07 March 2024 3000000 0.05 February 2025 51276404 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of<br/> Warrants</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> Average<br/> Exercise<br/> Price</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> Average<br/> Remaining<br/> Contractual<br/> Term</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; padding-bottom: 4pt; text-indent: -10pt; padding-left: 10pt">Balance outstanding at December 31, 2020</td><td style="width: 1%; padding-bottom: 4pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">51,276,404</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 4pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">0.06</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 4pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">3.17</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-indent: -10pt; padding-left: 20pt">Granted</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">3,000,000</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">0.05</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">4.84</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -10pt; padding-left: 20pt">Exercised</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-indent: -10pt; padding-left: 20pt">Forfeited</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -10pt; padding-left: 20pt">Cancelled</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 20pt">Expired</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(434,850</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">0.22</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt; text-indent: -10pt; padding-left: 10pt">Balance outstanding at March 31, 2020</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">51,276,404</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">0.06</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">3.05</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 4pt; text-indent: -10pt; padding-left: 10pt">Exercisable at March 31, 2020</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">51,276,404</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">0.06</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">3.05</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 51276404 0.06 P3Y62D 3000000 0.05 P4Y306D -434850 0.22 51276404 0.06 P3Y18D 51276404 0.06 P3Y18D <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March&#xa0;31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December&#xa0;31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Balance of embedded derivative at the beginning of the period</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">&#xa0;&#xa0;&#xa0;&#xa0;&#xa0;&#xa0;-</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">129,355</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Fair value of warrants issued and recorded as liabilities</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; 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Document Type 10-Q  
Current Fiscal Year End Date --12-31  
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Mar. 31, 2020
Dec. 31, 2019
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Cash
Accounts receivable 1,530
Prepaid expenses and other assets 7,789 7,789
Total current assets 7,789 9,319
Noncurrent assets    
Property and equipment (net) 61,600 91,673
Total assets 69,389 100,992
Current liabilities:    
Accounts payable 348,247 278,188
Accrued expenses 382,361 399,551
Accrued interest 1,351,714 1,205,325
Other amounts due to related parties   67,022
Senior convertible notes, net of discount 443,804 443,804
Promissory notes payable 521,081 520,537
Convertible notes payable, net of discount 3,938,328 3,867,316
Current capital lease obligation 114,681 104,379
Total current liabilities 7,100,216 6,886,122
Noncurrent liabilities:    
Convertible notes payable, net of discount 1,082,527 1,089,699
Capital lease obligation 55,748 76,471
Derivative liabilities 13,947 13,553
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Additional paid in capital 6,195,573 6,195,573
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Dec. 31, 2019
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Mar. 31, 2020
Mar. 31, 2019
Income Statement [Abstract]    
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Cost of goods sold   64,399
Gross Profit (Loss)   (14,626)
Operating Expenses    
Selling   61,474
General and administrative $ 51,582 114,612
Depreciation   62,728
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Other Expenses (Income)    
Loss on change in fair value of derivative liabilities 394 338,063
Gain on settlement of liabilities   (156,709)
Loss on sale of assets 12,074 27,465
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Shares issued for note conversion (in Shares) 400,000      
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Mar. 31, 2019
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Inventory 59,135
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Accounts payable and accrued expenses 107,095 (225,934)
Accrued interest 146,389 110,972
Other amounts due to related parties (67,022) (56,798)
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Cash Flows from Investing Activities:    
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Net cash provided by investing activities 18,000 350,000
Cash Flows from Financing Activities    
Proceeds from promissory notes 270,000
Proceeds from convertible notes 7,500 75,000
Repayments of capital lease obligations (10,421) (173,994)
Repayments of promissory notes (226,593)
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Cash, beginning of period 63,078
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Supplemental disclosures:    
Interest paid
Income taxes paid
Supplemental disclosures of non-cash investing and financing activities:    
Accounts payable and accrued payable exchanged for convertible note 54,227 60,000
Note payable converted to equity $ 20,000
XML 16 R7.htm IDEA: XBRL DOCUMENT v3.21.2
Nature of the Business
3 Months Ended
Mar. 31, 2020
Organization Consolidation And Presentation Of Financial Statements Abstract  
Nature of the Business

Note 1 – Nature of the Business


BoxScore Brands, Inc. (formerly U-Vend Inc.) (the “Company”) formerly developed, marketed and distributed various self-serve electronic kiosks and mall/airport co-branded islands throughout North America. Due to the nationwide shutdown related to the COVID-19 pandemic, the Company spent a portion of 2020 restructuring and retiring certain corporate debt and obligations. The Company focused on implementing a new operational direction.  After a thorough evaluation process, the Company found that there is a substantial long-term demand for specific commodities relating to battery and new energy technologies. This presents a timely and unique opportunity based on rising demand characteristics.  By capitalizing on market trends and current sustainable energy government mandates and environmental, social and corporate governance (ESG) initiatives, we will focus on bringing a vertically-integrated solution to market.


Asset Sale


On March 18, 2019, the Company approved an asset sale of the assets related to the legacy MiniMelts brand for $350,000 in cash, which was approved by a majority of its stockholders. These MiniMelts assets generated 100% of the revenue reported during the year ended December 31, 2019. During the year ended December 31, 2018, MiniMelts sales accounted for approximately $1,100,000, or 85%, of the revenue reported during that period. Part of the proceeds from the sale was used to retire certain lease obligations as well as for general operating purposes.


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Summary of Significant Accounting Policies
3 Months Ended
Mar. 31, 2020
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

Note 2 – Summary of Significant Accounting Policies


Basis of Presentation and Principles of Consolidation


The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments consisting of normal recurring accruals considered necessary for a fair and non-misleading presentation of the financial statements have been included. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The balance sheet as of December 31, 2019 has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements. These interim consolidated financial statements should be read in conjunction with the December 31, 2019 audited consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on May 12, 2021.


The accompanying consolidated financial statements include the accounts of BoxScore Brands, Inc. and the operations of its wholly owned subsidiaries, U-Vend America, Inc., U-Vend Canada, Inc., and U-Vend USA LLC. All intercompany balances and transactions have been eliminated in consolidation.


Use of Estimates


The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates and be based on events different from those assumptions. Future events and their effects cannot be predicted with certainty; estimating, therefore, requires the exercise of judgment. Thus, accounting estimates change as new events occur, as more experience is acquired, or as additional information is obtained.


Property and Equipment


Property and equipment are stated at cost less depreciation. Depreciation is provided using the straight-line method over the estimated useful life of the assets. Equipment has estimated useful live between three and seven years. Expenditures for repairs and maintenance are charged to expense as incurred.


Impairment of Long-lived Assets


Long-lived assets, such as property and equipment and intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount to the estimated future undiscounted cash flows expected to be generated by the asset group. If it is determined that an asset group is not recoverable, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds its fair value.


Common Shares Issued and Earnings Per Share


Common shares issued are recorded based on the value of the shares issued or consideration received, whichever is more readily determinable. The Company presents basic and diluted earnings per share. Basic earnings per share reflect the actual weighted average of shares issued and outstanding during the period. Diluted earnings per share are computed including the number of additional shares that would have been outstanding if dilutive potential shares had been issued. In a loss period, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potential common shares is anti-dilutive.


As of March 31, 2020 and December 31, 2019, respectively, there were approximately 159.9 million shares potentially issuable under convertible debt agreements, options, and warrants that could dilute basic earnings per share in the future that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive to the Company’s losses during the periods presented.


Preferred Stock Authorized


The Company has authorization for “blank check” preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to common stock. As of March 31, 2020 and December 31, 2019, there are 10,000,000 shares of preferred stock authorized, and no shares issued or outstanding.


Derivative Financial Instruments


The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. Certain warrants issued by the Company contain terms that result in the warrants being classified as derivative liabilities for accounting purposes. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks.


Fair Value of Financial Instruments


For certain of the Company’s financial instruments, including cash and equivalents, accounts receivable, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:


Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.

Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). Level 3 instruments include derivative warrant instruments. The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2.

Certain of the Company’s debt and equity instruments include embedded derivatives that require bifurcation from the host contract under the provisions of ASC 815-40, “Derivatives and Hedging.” Certain warrants were issued between June 2013 and December 2014 were derivative liabilities outside the exception of applying ASU 2017-11, “Accounting for Certain Financial Instruments with Down Round Features.” When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. On January 1, 2020, the Company adopted ASU 2017-11 on its consolidated financial statements and reclassified $118,675 as equity form derivative liabilities. The estimated fair value of the derivative warrant instruments was calculated using a Black Scholes valuation model.


The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis As of March 31, 2020 and December 31, 2019 31, 2019:


   Carrying   Fair Value Measurement at 
   Value   March 31, 2020 
       Level 1   Level 2   Level 3 
                     
Derivative liabilities, debt and equity instruments  $13,947           $13,947 

   Carrying   Fair Value Measurement at 
   Value   December 31, 2020 
       Level 1   Level 2   Level 3 
                     
Derivative liabilities, debt and equity instruments  $13,553           $13,553 

Stock-Based Compensation


The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation,” that requires all stock-based awards granted to employees, directors, and non-employees to be measured at grant date fair value of the equity instrument issued, and recognized as expense. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period of the award, which is generally equivalent to the vesting period. The fair value of each stock option granted is estimated using the Black-Scholes option pricing model. The measurement date for the non-forfeitable awards to nonemployees that vest immediately is the date the award is issued.


Gain on Liabilities Settlement


During the three months ended March 31, 2019, creditors forgave aggregate amount of $156,709, of which approximately $64,000 were associated accrued expenses, $45,000 related to conversion of approximately $105,000 of accounts payable to a $60,000 convertible note, and $47,000 was connected to forgiveness of accounts payable.


Other amounts due to related parties


Amounts due from related parties represent past amounts owed for compensation and operating expenses paid by the related party on behalf of the Company. During the year ended December 31, 2019, the Company reclassified approximately $185,000 from due to related parties to accrued expenses, as a result of the individual no longer being an officer of the Company during 2019, and paid net $63,370 to related parties, resulting in a balance of $67,022 owed at December 31, 2019. During the three months ended March 31, 2020, this amount was reclassed to accrued expenses.


Revenue Recognition


Revenue is recognized at the time each vending transaction occurs, the payment method is approved, and the product is disbursed from the machine. Wholesale revenue, including revenue earned under contracts with major sports organizations, are recognized at the time the products are delivered to the customer based on the agreement with the customer. We recognize revenue under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), the core principle of which is that an entity should recognize revenue to depict the transfer of control for promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the revenue recognition principles, an entity is required to identify the contract(s) with a customer, identify the performance obligations, determine the transaction price, allocate the transaction price to the performance obligations and recognize revenue as the performance obligations are satisfied (i.e., either over time or at a point in time). ASC 606 further requires that companies disclose sufficient information to enable readers of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. 


Recently Issued and Adpoted Accounting Pronouncements


In February 2016, the FASB issued ASU 2016-02, “Leases”, which requires that lease arrangements longer than 12 months result in an entity recognizing a right-of-use asset and liability. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2019, and early adoption is permitted. As of the reporting date, the Company has not adopted ASU 2016-02 and has elected to defer implementation until January 1, 2022, as allowed by ASU 2019-10. The Company is still determining the impact ASC 842 will have on its financial position, results of operations, and cash flows.


In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception, (ASU 2017-11).” Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company adopted ASU 2017-11 on its consolidated financial statements. Upon adoption the Company derecognized 39,512,502 number of warrants based on review of contracts that determined the derivative treatment was specific to a feature in the instrument that reduced the strike price if the Company issued additional shares for an amount less than the strike price. As a result of this analysis the Company recorded a cumulative effect adjustment of $118,675 on January 1, 2019.


The Company has examined all other recent accounting pronouncements and determined that they will not have a material impact on its financial position, results of operations, or cash flows.


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Going Concern
3 Months Ended
Mar. 31, 2020
Going Concern [Abstract]  
Going Concern

Note 3 – Going Concern


The accompanying consolidated financial statements have been prepared on a going concern basis. The Company reported net loss of $218,196 for the three months ended March 31, 2020 and has incurred accumulated losses totaling $14,416,338 through March 31, 2020. In addition, the Company has incurred negative cash flows from operating activities since its inception. The Company has relied on the proceeds from loans and private sales of its stock, in addition to its revenues, to finance its operations. These factors, among others, indicate that the Company may be unable to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.


With the onset of the Covid 19 pandemic, the reduction of foot traffic and closure of retail locations, management has been proactively looking at new business models and opportunities to stabilize revenues and continue to grow the Company. Until the Company can generate significant cash from operations, its ability to continue as a going concern is dependent upon obtaining additional financing. The Company hopes to raise additional financing, potentially through the sale of debt or equity instruments, or a combination, to fund its operations for the next 12 months and allow the Company to continue the development of its business plans and satisfy its obligations on a timely basis. Should additional financing not be available, the Company will have to negotiate with its lenders to extend the repayment dates of its indebtedness. There can be no assurance that the Company will be able to successfully restructure its debt obligations in the event it fails to obtain additional financing. These conditions have raised substantial doubt as to the Company’s ability to continue as a going concern for one year from the issuance of the financial statements, which has not been alleviated.


XML 19 R10.htm IDEA: XBRL DOCUMENT v3.21.2
Property and Equipment
3 Months Ended
Mar. 31, 2020
Property, Plant and Equipment [Abstract]  
Property and Equipment

Note 4 – Property and Equipment


Property and equipment consist of the following as of March 31, 2020 and December 31, 2019:


   March 31,
2020
   December 31,
2019
 
Freezers and other equipment  $61,600   $1,460,255 
Delivery vans   -    32,727 
Less: accumulated depreciation   -    (730,951)
Total  $61,600   $762,031 

Depreciation expense amounted to $0 and $62,728, respectively for the three months ended March 31, 2020 and 2019.


During the three months ended March 31, 2020, the Company recorded gain on sale of assets of $12,074 related to sale of the certain freezers and other equipment.


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Debt
3 Months Ended
Mar. 31, 2020
Debt Disclosure [Abstract]  
Debt

Note 5 – Debt


Senior Convertible Notes


During the year ended December 31, 2018, a Senior Convertible Note in the aggregate principal amount of $310,000 and a maturity date of December 31, 2018 payable to Cobrador Multi-Strategy Partners, LP (“Cobrador 1”), was extended until December 31, 2019. The Company also extended the expiration dates of Series A Warrants issued in connection with Cobrador 1 by one year. The fair value of the Series A Warrants did not materially change due to the extension.


On June 30, 2016, the Company issued a Senior Convertible Note in the face amount of $108,804 to Cobrador (“Cobrador 2”) in settlement of previously accrued interest, additional interest, fees and penalties. The additional interest, fees and penalties was $72,734 and this amount was charged to operations as debt discount amortization during the year ended December 31, 2016. The Senior Convertible Note was extended during the year ended December 31, 2018 and was due on December 31, 2019. It is convertible into shares of common stock at a conversion price $0.05 per share and bears interest at 7% per annum. The Company determined that Cobrador 2 had a beneficial conversion feature based on the difference between the conversion price and the market price on the date of issuance and allocated $87,043 as debt discount representing the beneficial conversion feature which was fully amortized at December 31, 2017.


During December 2017, the Company issued a Senior Convertible Note in the amount of $25,000 to Cobrador. The note bears interest at 7%, was due in December 2019, and is convertible into common shares at a conversion price of $0.05 per share. In addition, in conjunction with this note, the Company issued 500,000 warrants to purchase common shares at $0.05 with a contractual term of 5 years. The estimated value of the warrants was determined to be $1,421 and was recorded as interest expense during 2017 and a warrant liability due to the down round provision in the note agreement.


At March 31, 2020 and December 31, 2019, the Cobrador notes had a carrying value of $443,804.


As of the date of release of these financial statements, all senior convertible notes were in default. 


Promissory Notes Payable


During 2014, the Company issued an unsecured promissory note to a former employee of U-Vend Canada. The original amount of this note was $10,512 has a term of 3 years and accrues interest at 17% per annum. The total principal outstanding on this promissory note at March 31, 2020 and December 31, 2019 was $6,235.


Starting in 2015, the Company entered into a series of promissory notes from the same lender. All of the notes bear interest at a rate of 19% per annum and are payable together with interest over a period of six (6) months from the date of borrowing. As of December 31, 2015, we had note balance of $11,083. In 2016, the Company borrowed $76,500 and repaid $63,497. The balance outstanding on these notes was $24,116 at December 31, 2016. In 2017, the Company borrowed $36,400 and repaid $44,449. The balance outstanding on these notes was $16,067 at December 31, 2017. In 2018, the Company borrowed $143,908 and repaid $125,931. The balance outstanding on these notes was $34,044 at December 31, 2018. During the year ended December 31, 2019, the Company borrowed additional $38,325 and recorded additional original discount in the amount of $3,325 associated with the new borrowing. During the year ended December 31, 2019, the Company repaid $46,584 in principal and fully amortized $3,325 of debt discount. As of March 31, 2020 and December 31, 2019, the balance outstanding on these notes was $25,784.


During the year ended December 31, 2016, the Company issued two unsecured promissory notes and borrowed an aggregate amount of $80,000. The promissory notes bear interest at 10% per annum, with a provision for an increase in the interest rate upon an event of default as defined therein and were due at various due dates in May and September 2017. The due dates of both notes were extended to December 31, 2019. As of March 31, 2020 and December 31, 2019, the balance outstanding on these notes was $80,000.


In December 2017, the Company issued promissory notes in the aggregate principal balance of $28,000 to Cobrador. The notes accrue interest at 7% and have a two-year term. As of March 31, 2020 and December 31, 2019, the balance outstanding on these notes was $28,000.


On July 18, 2018, the Company issued a promissory note in the principal amount of $187,500 with net proceeds of $147,000. The Company agreed to pay $1,143 per business day for 164 days. The Company recorded $40,500 to debt discount. During 2018, the Company repaid $128,050 in principal and amortized $40,500 of debt discount resulting in an unamortized debt discount of $0 and carrying value of $59,450 at December 31, 2018. During the year ended December 31, 2019, this note was paid off.


On April 13, 2018, the Company issued a promissory note in the principal amount of $115,000. This note bears interest at the rate of 7% per annum, due on December 31, 2019. In 2019, the Company borrowed an additional $25,000 and repaid $60,000. The balance outstanding on this note at March 31, 2020 and December 31, 2019, was $80,000.


In October 2014, January 2015 and October 2015, the Company entered into three (3) separate 24-month equipment financing agreements (the “Agreements”) with Perkins Industries, LLC (“Perkins”) for equipment in the aggregate amount of $387,750 with an annual interest rate of 15%. The assets financed consisted of self-service electronic kiosks placed in service in the Company’s Southern California region. The Company is obligated to make monthly interest only payments in accordance with the Agreements. The Agreements include a put/call option at the end of year one and the end of year two. Neither of these options were exercised. During 2017 $100,000 was paid down on the notes. The carrying value as of December 31, 2018 was $287,750. Maturities of these notes were extended to December 31, 2019. During the year ended December 31, 2019, $39,266 was paid down on the notes. On April 1, 2019, total principal and accrued interest in the amount of $321,824 were restructured into two converted notes below. The carrying value as of March 31, 2020 and December 31, 2019 was $0.


Pursuant to the Agreements Perkins received a warrant to purchase an aggregate of 310,200 shares at an exercise price of $0.35 per share with a contractual term of three (3) years. The warrant was recorded as a debt discount and a warrant liability in the aggregate amount of $3,708 due to the down round provision, pursuant which the exercise price of the warrants was revised to $0.26 at December 31, 2016.


In October 2016, the Company and Perkins agreed to extend the termination date of two of the Agreements to October 17, 2017 and January 5, 2018. In consideration of this extension, the Company issued an additional 200,000 warrants with an exercise price of $0.05 per share and a five-year contractual term. The fair value of the warrants was not material and was charged to operations in the accompanying statement of operations for the year ended December 31, 2016.


During the year ended December 31, 2018 the Agreements were purchased by a third party and the due dates were extended to December 31, 2019.


On November 19, 2018, the Company issued a promissory note in the principal amount of $124,000 with net proceeds of $112,840. This note matures in 64 weeks. The Company recorded $11,160 to debt discount. During the year ended December 31, 2018, the Company repaid $9,784 in principal and amortized $872 of debt discount resulting in an unamortized debt discount of $10,288 and carrying value of $103,928 at December 31, 2018. During the year ended December 31, 2019, the Company repaid $48,154 in principal and amortized $9,744 of debt discount resulting in an unamortized debt discount of $544 and carrying value of $65,518 at December 31, 2019. During the three months ended March 31, 2020, the Company fully amortized $544 of debt discount. As of March 31, 2020, the balance outstanding on these notes was $66,062.


On December 12, 2018, the Company issued a promissory note in the principal amount of $112,425 with net proceeds of $64,500. The Company agreed to pay $937 per business day for 120 days. The Company recorded $47,925 to debt discount. During the year ended December 31, 2018, the Company repaid $9,370 in principal and amortized $3,744 of debt discount resulting in an unamortized debt discount of $44,181 and carrying value of $58,874 at December 31, 2018. During the year ended December 31, 2019, the Company repaid $103,055 in principal and fully amortized $44,181 of remaining debt discount resulting in carrying value of $0 at December 31, 2019.


On March 5, 2019, the Company issued a non-equity linked promissory note for $100,000 to an investor with an annual 10% rate of interest and a one (1) year maturity. This investor also received a warrant for 500,000 shares at a strike price of $0.07 per share with a five (5) year maturity. The fair value of warrant was not material. As of March 31, 2020 and December 31, 2019, the outstanding balance was $100,000.


During the year ended December 31, 2019, the Company issued two promissory notes in the aggregate principal amount of $135,000, bearing interest of 7% and mature on August 8, 2019. As of March 31, 2020 and December 31, 2019, the balance outstanding on these notes was $135,000.


As of the date of release of these financial statements, all promissory notes were in default.


Convertible Notes Payable


2014 Stock Purchase Agreement


In 2014 and 2015 the Company entered into the 2014 Securities Purchase Agreement (the “2014 SPA”) pursuant to which it issued eight (8) convertible notes in the aggregate face amount of $146,000 due at various dates between August 2015 and March 2016. The principal on these notes is due at the holder’s option in cash or common shares at a conversion rate of $0.30 per share. In connection with these borrowings the Company granted a total of 360,002 warrants with an exercise price of $0.35 per share and a 5 year contractual term. The warrants issued have a down round provision and as a result are classified as a liability in the accompanying consolidated balance sheets. Pursuant to the down round provision, the exercise price of the warrants was reduced to $0.22 at December 31, 2016. During 2017 the Company repaid one of the notes in the amount of $50,000. On May 1, 2018, the Company granted 1,000,000 warrants with an exercise price of $0.15 per share and a 5 year contractual term, valued at $2,841, which was recorded as debt discount. As of March 31, 2020, December 31, 2019 and 2018, outstanding balances of these notes were $121,000. As of the date of release of these financial statements, these notes were in default.


The Company and Cobrador held three of the convertible notes in the aggregate face amount of $45,000 and agreed to extend the repayment date to November 17, 2020. The Company agreed to a revised conversion price of $0.05 per share and a revised warrant exercise price of $0.07 per share. The change in the value of warrants was not material and was charged to operations during the year ended December 31, 2017. As of March 31, 2020 and December 31, 2019, outstanding balances of these notes were $45,000.


2015 Stock Purchase Agreement


During the year ended December 31, 2015, the Company issued eleven subordinated convertible notes bearing interest at 9.5% per annum with an aggregate principal balance of $441,000 pursuant to the 2015 Stock Purchase Agreement (the “2015 SPA”). The notes were due in December 2017 and are payable at the noteholder’s option in cash or common shares at a conversion rate of $0.30 per share. The conversion rate was later revised to $0.05 due to down round provisions contained in the 2015 SPA, and the due date was extended to November 17, 2020. In connection with these borrowings, the Company issued a warrant to purchase 735,002 shares of the Company’s common stock at an exercise price of $0.40 per share and a 5 year contractual term. The exercise price was later revised to $0.22 per share pursuant to the down round provisions in the 2015 SPA. The Company allocated $8,113 of proceeds received to debt discount based on the computed fair value of the convertible notes and warrants issued. During the year ended December 31, 2016, the noteholder converted one note in the face amount of $35,000 into 700,000 shares of common stock. As of March 31, 2020 and December 31, 2019, the 2015 SPA had a balance of $406,000. The debt discount was fully amortized as of December 31, 2016. As of the date of release of these financial statements, these notes were in default.


2016 Stock Purchase Agreement


On June 30, 2016, the Company entered into the 2016 Stock Purchase Agreement (the “2016 SPA”) pursuant to which it issued five convertible notes in the aggregate principal amount of $761,597. The 2016 SPA notes are due in November 2020 and bear interest at 9.5% per annum. The notes are convertible into shares of common stock at a conversion price of $0.17 per share. With this note, the Company satisfied its obligations for: previously issued promissory notes of $549,000, accrued interest of $38,615, lease principal installments of $47,466, previously accrued registration rights penalties of $22,156, due to a former officer of $81,250, and additional interest, expenses, fine and penalties of $23,110. The Company charged additional interest, expenses, fines and penalties $23,110 to operations as amortization of debt discount and deferred financing costs during the year ended December 31, 2016.


In connection with the 2016 SPA, the Company granted a total of 2,239,900 warrants with an exercise price of $0.30 per share which was later revised to $0.05 per share due to down round provisions, with a 5 year contractual life. The Company allocated $19,242 to debt discount based on the computed fair value of the convertible notes and warrants issued and classified the debt discount is as a warrant liability due to the down round provision in the warrants.


On July 11, 2019, $85,000 in principal was converted into 1,700,000 shares of common stock.  


As of March 31, 2020 and December 31, 2019, the 2016 SPA had a carrying value of $676,597. As of the date of release of these financial statements, these notes are in default.


Other 2016 Financings


During the year ended December 31, 2016, the Company issued four convertible notes (the “Cobrador 2016 Notes”) in the aggregate principal amount of $115,000. The Cobrador 2016 Notes have a 2 year term, bear interest at 9.5% per annum, and are convertible into shares of common stock at a conversion price of $0.17 per share. The conversion price was subsequently revised to $0.05 per the down round provisions and the maturity date was extended to September 26, 2021. In connection with the Cobrador 2016 Notes, the Company granted a total of 338,235 warrants with an exercise price of $0.30 per share which was subsequently revised to $0.05 per share due to down round provisions with a 5 year contractual term. The Company allocated $1,994 to debt discount based on the computed fair value of the convertible notes and warrants issued and classified the debt discount as a warrant liability due to the down round provision in the warrants. During the year ended December 31, 2019, $20,000 was converted into 400,000 shares. As of March 31, 2020 and December 31, 2019, the Cobrador 2016 Notes had a carrying value of $95,000.


During the fourth quarter of 2016, the Company issued three additional convertible notes in the aggregate principal amount of $250,000. The notes have a 2 year term, bear interest at 9.5% per annum and are convertible into shares of common stock at a conversion price of $0.05 per share. In connection with these borrowings, the Company granted warrants to purchase 5,000,000 shares of common stock with an exercise price of $0.07 per share. The Company allocated $27,585 to debt discount based on the computed fair value of the convertible notes and warrants issued, and the debt discount was classified as a warrant liability due to the down round provision in the warrants. As of March 31, 2020 and December 31, 2019, the carrying value of the notes was $250,000. As of the date of release of these financial statements, these notes were in default.


2017 Financings


During the year ended December 31, 2017, the Company entered into 19 separate convertible notes agreements (the “2017 Convertible Notes)” in the aggregate principal amount of $923,882. The 2017 Convertible Notes each have a 2 year term, bear interest at 9.5%, and are convertible into shares of common stock at a conversion price of $0.05 per share. In connection with the 2017 Convertible Notes, the Company issued a total of 16,537,926 warrants with an exercise price of $0.07 per share with a 5 year term. The Company allocated $59,403 to a debt discount based on the computed fair value of the convertible notes and warrants issued and classified the debt discount as a warrant liability due to the down round provision in the warrants. During the year ended December 31, 2018, the Company amortized $31,940 of debt discount resulting in unamortized debt discount of $13,278 and carrying value of $910,608 at December 31, 2018. During the year ended December 31, 2019, the Company fully amortized remaining $13,278 of debt discount. As of March 31, 2020 and December 31, 2019, the carrying value of the notes was $924,282. As of the date of release of these financial statements, these notes were in default.


2018 Financings


During the year ended December 31, 2018, the Company entered into seventeen separate convertible notes agreements (the “2018 Convertible Notes)” in the aggregate principal amount of $537,500. The 2018 Convertible Notes each have a 2 year term, bear interest at 9.5% if paid in cash, 15% if paid in common stock, and are convertible into shares of common stock at a conversion price of $0.05 per share. In connection with the 2018 Convertible Notes, the Company issued a total of 10,750,000 warrants with an exercise price of $0.07 per share with a 5 year term. The Company allocated $33,384 to a debt discount based on the computed fair value of the convertible notes and warrants issued and classified the debt discount as a warrant liability due to the down round provision in the warrants. During the year ended December 31, 2018, the Company amortized $12,803 of debt discount resulting in an unamortized debt discount of $20,581 and carrying value of $516,919 at December 31, 2018. During the year ended December 31, 2019, the Company amortized $16,692 of debt discount resulting in an unamortized debt discount of $3,889 and carrying value of $533,611 at December 31, 2019. During the three months ended March 31, 2020, the Company amortized $2,113 of debt discount resulting in an unamortized debt discount of $1,776 and carrying value of $535,724 at March 31, 2020. As of the date of release of these financial statements, convertible notes in aggregate amount of $340,000 were in default.


On November 20, 2018, two officers converted $436,500 accrued compensation into two convertible note agreements in the principal amount of $436,500. The notes have a 2 year term, bear interest at 9.5% if paid in cash, 15% if paid in common stock, and is convertible into shares of common stock at a conversion price of $0.05 per share.


During the year ended December 31, 2018, the Company entered into three convertible notes agreements in the aggregate principal amount of $240,500 with a net proceed of $214,000. These notes had a 1-year term, and bears interest at 8%-12%. The notes are convertible into common stock at 60% to 61% multiplied by the lowest one to two trading price(s) during fifteen to twenty-five trading day period prior to the Conversion Date. The embedded conversion features were valued at $59,027, which were recorded as debt discount. In addition, the Company also recorded $26,500 as original debt discount. These notes were in default due to failure to comply with the reporting requirements of the Exchange Act, as a result, the Company recorded an additional $120,250 penalty in principal as of December 31, 2018. During the year ended December 31, 2018, the Company amortized $21,382 of debt discount resulting in unamortized debt discount of $64,145 and carrying value of $296,605 at December 31, 2018. During the year ended December 31, 2019, the Company repaid $64,300 in principal and amortized $21,381 of debt discount, recorded $42,764 in accretion of debt discount, resulting in unamortized debt discount of $0 and carrying value of $296,450 at December 31, 2019. During the three months ended March 31, 2020, the repayment in the amount of $400 was returned to the Company resulting in carrying value of $296,850 at March 31, 2020.


2019 Financings


On March 18, 2019, the Company issued a convertible promissory note for $85,250 with net proceed of $75,000 to an investor with an 8.0% rate of interest and a nine-month maturity. The Company has the option to pre-pay the note (principal and accrued interest) in cash within the 1st 90 days from issuance at a 25% premium, and 40% premium 91-180 days from the issuance date. Subsequent to 181 days, the Company shall have no right of prepayment and the holder may convert at a 40% discount to the prevailing market price. The note matured on December 11, 2019. The note is convertible into shares of common stock at the lesser of 1) lowest trading price of twenty-five days prior to March 18, 2019 or 2) 60% of lowest trading price of twenty-five days prior to the Conversion Day. In addition, the Company also recorded $10,250 as original debt discount. These notes were in default due to failure to comply with the reporting requirements of the Exchange Act, as a result, the Company recorded an additional $42,625 penalty in principal as of December 31, 2019. During the year ended December 31, 2019, the Company amortized $23,384 of debt discount resulting in unamortized debt discount of $0. As of March 31, 2020 and December 31, 2019, the carrying value of the note was $127,875. As of the date of release of these financial statements, convertible note was in default.


On March 14, 2019, the Company converted accounts payable of approximately $105,000 payables into a convertible note agreement in the principal amount of $60,000, remaining balance of the amount owed was released and recorded as a settlement of liability. The note has a 2 year term, bears interest at 9.5% if paid in cash, 15% if paid in common stock, and is convertible into shares of common stock at a conversion price of $0.05 per share.


On April 1, 2019, The Company converted an aggregate amount of principal and accrued interest of Perkins promissory note in the amount of $321,824 and accounts payable of $10,000 into two convertible notes. Both Notes have a 2 year term, bear interest at 9.5% if paid in cash, 15% if paid in common stock, and are convertible into shares of common stock at a conversion price of $0.05 per share. The outstanding principal balance was $331,824 at March 31, 2020 and December 31, 2019.


On April 15, 2019, the Company converted an accrued payable of $108,572, which was used to purchase vending machine, into a convertible note. The Note has a 2 year term, bear interest at 9.5% if paid in cash, 15% if paid in common stock, and are convertible into shares of common stock at a conversion price of $0.07 per share. The outstanding principal balance was $108,572 at March 31, 2020 and December 31, 2019.


On May 30, 2019, the Company issued a series of convertible notes under a $250,000 revolving Senior Secured credit facility to an investor, for working capital purposes. The notes carry an interest rate of 9.5% and a two-year term. The notes are convertible into common stock at $0.07 per share and are redeemable after one-year at the Company’s option. The notes also contain a 4.99% limitation of ownership on conversion. The investor had consented to higher draws on the facility in excess of the limit per the initial agreement. As of March 31, 2020 and December 31, 2019, $451,231 and $426,303 was drawn under the agreement, respectively. Subsequent to March 31, 2020, the agreement was modified formally to increase the limit on the facility by $206,231.


During the year ended December 31, 2019, the Company entered into several convertible notes agreements in the amount of $68,000. The Notes have a 2 year term, bear interest at 9.5% if paid in cash, 15% if paid in common stock, and are convertible into shares of common stock at a conversion price of $0.07 per share. The outstanding principal balance was of $68,000 at March 31, 2020 and December 31, 2019.


During the year ended December 31, 2019, the Company entered into a convertible notes agreement in the amount of $50,000. The Note has a 6 month term, bears interest at 9.5% if paid in cash, 15% if paid in common stock, and is convertible into shares of common stock at a conversion price of $0.01 per share. In connection with the Note, the Company issued 10,000,000 warrants with an exercise price of $0.02 per share with a 5 year term. The outstanding balance was of $50,000 at March 31, 2020 and December 31, 2019.


2020 Financings


On January 1, 2020, the Company issued a convertible note in the amount of $8,500 in conversion of accrued liabilities. The Note has a 2 year term, bears interest of 9.5% if paid in cash, 15% if paid in common stock, and is convertible into shares of common stock at a conversion price of $0.05 per share. The outstanding principal balance was $8,500 as of March 31, 2020.


On March 1, 2020, the Company issued a convertible note in the amount of $17,899 in conversion of accrued liabilities. The Note has a 2 year term, bears interest of 9.5% if paid in cash, 15% if paid in common stock, and is convertible into shares of common stock at a conversion price of $0.05 per share. The outstanding principal balance was $17,899 as of March 31, 2020.


Scheduled maturities of debt remaining as of March 31, 2020 for each respective fiscal year end are as follows:


2020  $5,037,720 
2021   913,396 
2022   36,399 
    5,987,515 
Less: unamortized debt discount   (1,776)
   $5,985,740 

The following table reconciles, for the three months ended March 31, 2020 and 2019, the beginning and ending balances for financial instruments related to the embedded conversion features that are recognized at fair value in the consolidated financial statements.


   March 31,
2020
   March 31,
2019
 
Balance of embedded derivative at the beginning of the period  $13,553   $28,357 
Additions related to embedded conversion features of convertible debt issued -   -    - 
Derivative liabilities reduction due to notes default   -    (112,408)
Change in fair value of conversion features   394    158,987 
Balance of embedded derivatives at the end of the period  $13,947   $74,936 

XML 21 R12.htm IDEA: XBRL DOCUMENT v3.21.2
Capital Lease Obligations
3 Months Ended
Mar. 31, 2020
Leases [Abstract]  
Capital Lease Obligations

Note 8 – Capital Lease Obligations


The Company acquired capital assets under capital lease obligations. Pursuant to the agreement with the lessor, the Company makes quarterly lease payments and will make a guaranteed residual payment at the end of the lease as summarized below. At the end of the lease, the Company will own the equipment.


In August 2016, the Company and the lessor agreed to extend the term of the lease until December 31, 2020. As a consideration of the extension, the Company issued warrants to acquire 150,000 shares of common stock. The warrants have an exercise price of $0.30 per share, a term of three years, and were recorded as a debt discount and warrant liability due to the down round provision and as such are marked to market each reporting period.


During the year ended December 31, 2018 the Company entered into various capital lease agreements. The leases expire at various points through the year ended December 31, 2023.


The following schedule provides minimum future rental payments required as of March 31, 2020, under the current portion of capital leases.


2020   107,673 
2021   49,831 
2022   30,584 
2023   10,252 
Total minimum lease payments   198,340 
Less: Amount represented interest   (27,911)
Present value of minimum lease payments and guaranteed residual value  $170,429 

XML 22 R13.htm IDEA: XBRL DOCUMENT v3.21.2
Capital Stock
3 Months Ended
Mar. 31, 2020
Stockholders' Equity Note [Abstract]  
Capital Stock

Note 9 – Capital Stock


The Company has authorized 600,000,000 shares of common stock.


During the three months ended March 31, 2019, the Company issued 3,271,000 shares of its common stock, comprised of 2,871,096 shares of common stock with a fair value of $41,003 for services rendered, and 400,000 shares in conversion of $20,000 of convertible notes. There were no common stock issuances during the three months ended December 31, 2020.


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Stock Options and Warrants
3 Months Ended
Mar. 31, 2020
Share-based Payment Arrangement [Abstract]  
Stock Options and Warrants

Note 10 – Stock Options and Warrants


Warrants


At March 31, 2020 the Company had the following warrant securities outstanding:


   Warrants   Exercise
Price
   Expiration
2015 Warrants - 2015 SPA convertible debt   735,002   $0.22   April - November 2020
2015 Warrants for services   127,067   $0.22    April - November 2020
2016 Warrants - 2016 SPA convertible debt   2,239,990   $0.05   June 2021
2016 Warrants for services   850,000   $0.05   June 2021
2016 Warrants - Convertible notes   338,236   $0.05   August - September 2021
2016 Warrants for services   200,000   $0.07   October 2020
2016 Warrants issued with Convertible Notes   5,000,000   $0.07   November -December 2021
2017 Warrants – 2017 financing   15,109,354   $0.07   December 2022
2018 Warrants – 2019 financing   9,991,905   $0.07   January - November 2023
2018 Warrants for services   2,250,000   $0.07   October - December 2023
2019 Warrants – 2020 financing   10,500,000   $0.07   March 2024
2019 Warrants for services   3,500,000   $0.07   March 2024
2020 Warrants for services   3,000,000   $0.05   February 2025
Total   51,276,404         

During the three months ended March 31, 2020, the Company issued warrants exercisable into 3,000,000 shares of common stock to its officer. The fair value of warrants was determined to be $12,594, and was estimated using the Black-Scholes-Merton option-pricing model with the following assumptions: expected volatility of 339%, risk-free interest rate 1.35%, expected dividend yield of 0%.


A summary of all warrants activity for the three months ended March 31, 2020 is as follows:


   Number of
Warrants
   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Term
 
Balance outstanding at December 31, 2020   51,276,404   $0.06    3.17 
Granted   3,000,000   $0.05    4.84 
Exercised   -    -    - 
Forfeited   -    -    - 
Cancelled   -    -    - 
Expired   (434,850)  $0.22    - 
Balance outstanding at March 31, 2020   51,276,404   $0.06    3.05 
Exercisable at March 31, 2020   51,276,404   $0.06    3.05 

The following table provides a summary of changes in the warrant liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2020 and the year ended December 31, 2019.


   March 31,
2020
   December 31,
2020
 
Balance of embedded derivative at the beginning of the period  $      -    129,355 
Fair value of warrants issued and recorded as liabilities   -    - 
Reclassification of warrant lability to equity related to adoption of ASU 2017-11   -    (118,675)
Loss (gain) on fair value adjustment   -    (10, 680)
Balance of embedded derivatives at the end of the period  $-    - 

Equity Incentive Plan


On July 22, 2011, the Board of Directors of the Company approved the Company’s 2011 Equity Incentive Plan (the “Plan”) and on July 26, 2011, stockholders holding a majority of shares of the Company approved, by written consent, the Plan and the issuance under the Plan of 5,000,000 shares. On November 16, 2017, the Board of Directors approved an increase of 10,000,000 shares to be made available for issuance under the Plan. Accordingly, the total number of shares of common stock available for issuance under the Plan is 15,000,000 shares. Awards may be granted to employees, officers, directors, consultants, agents, advisors and independent contractors of the Company and its related companies. Such options may be designated at the time of grant as either incentive stock options or nonqualified stock options. Stock-based compensation includes expense charges related to all stock-based awards. Such awards include options, warrants and stock grants. Generally, the Company issues stock options that vest over three years and expire in 5 to 10 years.


A summary of all stock option activity for the three months ended March 31, 2020 is as follows:


   Number of
Options
   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Term
 
Balance outstanding at December 31, 2020   502,500   $0.50    0.5 
Granted   -    -    - 
Exercised   -    -    - 
Cancelled or expired   -    -    - 
Balance outstanding at March 31, 2020   502,500   $0.50    0.3 
Exercisable at March 31, 2020   502,500   $0.50    0.3 

XML 24 R15.htm IDEA: XBRL DOCUMENT v3.21.2
Commitments and Contingencies
3 Months Ended
Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 11 – Commitments and Contingencies


Major League Baseball Properties, Inc. License Agreement


In March 2016, the Company entered into a license agreement beginning April 1, 2016 through December 31, 2019 with Major League Baseball Properties, Inc. (“MLB” “Licensor”) for the non-exclusive right to certain proprietary intangible property of the Licensor to be used in connection with the manufacturing, distribution, promotion and advertisement of the Company’s products sold within the U.S., the District of Columbia and U.S. territories. Under the license agreement, the Company is scheduled to pay the following guaranteed payments; $150,000 during 2016, $275,000 during 2017, $100,000 during 2018, and $115,000 during 2019. The Company is obligated to pay the licensor a royalty based on the product sold or advertising sold. The royalty paid will offset all or a portion of the guaranteed payments. The agreement is subject to customary default and termination clauses. The Company paid $0 during the three months ended March 31, 2019 and 2020, and has accrued $115,000 at December 31, 2019 and March 31, 2020.


As of March 31, 2020, the agreement with MLB has expired. The Company will not be continuing the relationship. 


XML 25 R16.htm IDEA: XBRL DOCUMENT v3.21.2
Subsequent Events
3 Months Ended
Mar. 31, 2020
Subsequent Events [Abstract]  
Subsequent Events

Note 12 – Subsequent Events


The Company has evaluated events occurring subsequent to March 31, 2020 through the date these financial statements were issued and determined the following significant events require disclosure:


Subsequent to March 31, 2020, the Company issued a convertible promissory note in the principal amount of $147,000 to an unaffiliated investor to support the Company’s working capital requirements. The note bears interest at the rate of 9.5% per annum and is due and payable in two years. The note is convertible into shares of the Company’s common stock at $0.03 per share and is redeemable at the principal amount plus accrued unpaid interest after one year, at the Company’s option.


Subsequent to March 31, 2020, the Company issued multiple convertible promissory notes in the aggregate principal amount of $561,719 to unaffiliated investors. The notes bear interest at the rate of 9.5% per annum and are due and payable in two years. The notes are convertible into shares of the Company’s common stock at $0.05 per share and are redeemable at the principal amount plus accrued unpaid interest after one year, at the Company’s option.


Subsequent to March 31, 2020, the Company issued a convertible note for deferred compensation in the principal amount of $94,600. The notes bear interest at the rate of 9.5% per annum and is due and payable in two years. The note is convertible into shares of the Company’s common stock at $0.05 per share and is redeemable at the principal amount plus accrued unpaid interest after one year, at the Company’s option.


Subsequent to March 31, 2020, the Company issued 188,886,284 of its common stock in conversion of $689,096 of convertible notes.


Subsequent to March 31, 2020, the Company hired Patrick Avery as the Company’s Chief Operating Officer with a salary of $84,000.


XML 26 R17.htm IDEA: XBRL DOCUMENT v3.21.2
Accounting Policies, by Policy (Policies)
3 Months Ended
Mar. 31, 2020
Accounting Policies [Abstract]  
Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation


The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments consisting of normal recurring accruals considered necessary for a fair and non-misleading presentation of the financial statements have been included. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The balance sheet as of December 31, 2019 has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements. These interim consolidated financial statements should be read in conjunction with the December 31, 2019 audited consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on May 12, 2021.


The accompanying consolidated financial statements include the accounts of BoxScore Brands, Inc. and the operations of its wholly owned subsidiaries, U-Vend America, Inc., U-Vend Canada, Inc., and U-Vend USA LLC. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates


The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates and be based on events different from those assumptions. Future events and their effects cannot be predicted with certainty; estimating, therefore, requires the exercise of judgment. Thus, accounting estimates change as new events occur, as more experience is acquired, or as additional information is obtained.

Property and Equipment

Property and Equipment


Property and equipment are stated at cost less depreciation. Depreciation is provided using the straight-line method over the estimated useful life of the assets. Equipment has estimated useful live between three and seven years. Expenditures for repairs and maintenance are charged to expense as incurred.

Impairment of Long-lived Assets

Impairment of Long-lived Assets


Long-lived assets, such as property and equipment and intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount to the estimated future undiscounted cash flows expected to be generated by the asset group. If it is determined that an asset group is not recoverable, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds its fair value.

Common Shares Issued and Earnings Per Share

Common Shares Issued and Earnings Per Share


Common shares issued are recorded based on the value of the shares issued or consideration received, whichever is more readily determinable. The Company presents basic and diluted earnings per share. Basic earnings per share reflect the actual weighted average of shares issued and outstanding during the period. Diluted earnings per share are computed including the number of additional shares that would have been outstanding if dilutive potential shares had been issued. In a loss period, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potential common shares is anti-dilutive.


As of March 31, 2020 and December 31, 2019, respectively, there were approximately 159.9 million shares potentially issuable under convertible debt agreements, options, and warrants that could dilute basic earnings per share in the future that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive to the Company’s losses during the periods presented.

Preferred Stock Authorized

Preferred Stock Authorized


The Company has authorization for “blank check” preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to common stock. As of March 31, 2020 and December 31, 2019, there are 10,000,000 shares of preferred stock authorized, and no shares issued or outstanding.

Derivative Financial Instruments

Derivative Financial Instruments


The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. Certain warrants issued by the Company contain terms that result in the warrants being classified as derivative liabilities for accounting purposes. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks.

Fair Value of Financial Instruments

Fair Value of Financial Instruments


For certain of the Company’s financial instruments, including cash and equivalents, accounts receivable, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:


Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.

Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). Level 3 instruments include derivative warrant instruments. The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2.

Certain of the Company’s debt and equity instruments include embedded derivatives that require bifurcation from the host contract under the provisions of ASC 815-40, “Derivatives and Hedging.” Certain warrants were issued between June 2013 and December 2014 were derivative liabilities outside the exception of applying ASU 2017-11, “Accounting for Certain Financial Instruments with Down Round Features.” When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. On January 1, 2020, the Company adopted ASU 2017-11 on its consolidated financial statements and reclassified $118,675 as equity form derivative liabilities. The estimated fair value of the derivative warrant instruments was calculated using a Black Scholes valuation model.


The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis As of March 31, 2020 and December 31, 2019 31, 2019:


   Carrying   Fair Value Measurement at 
   Value   March 31, 2020 
       Level 1   Level 2   Level 3 
                     
Derivative liabilities, debt and equity instruments  $13,947           $13,947 

   Carrying   Fair Value Measurement at 
   Value   December 31, 2020 
       Level 1   Level 2   Level 3 
                     
Derivative liabilities, debt and equity instruments  $13,553           $13,553 
Stock-Based Compensation

Stock-Based Compensation


The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation,” that requires all stock-based awards granted to employees, directors, and non-employees to be measured at grant date fair value of the equity instrument issued, and recognized as expense. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period of the award, which is generally equivalent to the vesting period. The fair value of each stock option granted is estimated using the Black-Scholes option pricing model. The measurement date for the non-forfeitable awards to nonemployees that vest immediately is the date the award is issued.

Gain on Liabilities Settlement

Gain on Liabilities Settlement


During the three months ended March 31, 2019, creditors forgave aggregate amount of $156,709, of which approximately $64,000 were associated accrued expenses, $45,000 related to conversion of approximately $105,000 of accounts payable to a $60,000 convertible note, and $47,000 was connected to forgiveness of accounts payable.

Other amounts due to related parties

Other amounts due to related parties


Amounts due from related parties represent past amounts owed for compensation and operating expenses paid by the related party on behalf of the Company. During the year ended December 31, 2019, the Company reclassified approximately $185,000 from due to related parties to accrued expenses, as a result of the individual no longer being an officer of the Company during 2019, and paid net $63,370 to related parties, resulting in a balance of $67,022 owed at December 31, 2019. During the three months ended March 31, 2020, this amount was reclassed to accrued expenses.

Revenue Recognition

Revenue Recognition


Revenue is recognized at the time each vending transaction occurs, the payment method is approved, and the product is disbursed from the machine. Wholesale revenue, including revenue earned under contracts with major sports organizations, are recognized at the time the products are delivered to the customer based on the agreement with the customer. We recognize revenue under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), the core principle of which is that an entity should recognize revenue to depict the transfer of control for promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the revenue recognition principles, an entity is required to identify the contract(s) with a customer, identify the performance obligations, determine the transaction price, allocate the transaction price to the performance obligations and recognize revenue as the performance obligations are satisfied (i.e., either over time or at a point in time). ASC 606 further requires that companies disclose sufficient information to enable readers of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

Recently Issued and Adpoted Accounting Pronouncements

Recently Issued and Adpoted Accounting Pronouncements


In February 2016, the FASB issued ASU 2016-02, “Leases”, which requires that lease arrangements longer than 12 months result in an entity recognizing a right-of-use asset and liability. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2019, and early adoption is permitted. As of the reporting date, the Company has not adopted ASU 2016-02 and has elected to defer implementation until January 1, 2022, as allowed by ASU 2019-10. The Company is still determining the impact ASC 842 will have on its financial position, results of operations, and cash flows.


In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception, (ASU 2017-11).” Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company adopted ASU 2017-11 on its consolidated financial statements. Upon adoption the Company derecognized 39,512,502 number of warrants based on review of contracts that determined the derivative treatment was specific to a feature in the instrument that reduced the strike price if the Company issued additional shares for an amount less than the strike price. As a result of this analysis the Company recorded a cumulative effect adjustment of $118,675 on January 1, 2019.


The Company has examined all other recent accounting pronouncements and determined that they will not have a material impact on its financial position, results of operations, or cash flows.

XML 27 R18.htm IDEA: XBRL DOCUMENT v3.21.2
Summary of Significant Accounting Policies (Tables)
3 Months Ended
Mar. 31, 2020
Accounting Policies [Abstract]  
Schedule of fair value hierarchy on financial assets and liabilities recurring basis
   Carrying   Fair Value Measurement at 
   Value   March 31, 2020 
       Level 1   Level 2   Level 3 
                     
Derivative liabilities, debt and equity instruments  $13,947           $13,947 
   Carrying   Fair Value Measurement at 
   Value   December 31, 2020 
       Level 1   Level 2   Level 3 
                     
Derivative liabilities, debt and equity instruments  $13,553           $13,553 
XML 28 R19.htm IDEA: XBRL DOCUMENT v3.21.2
Property and Equipment (Tables)
3 Months Ended
Mar. 31, 2020
Property, Plant and Equipment [Abstract]  
Schedule of property and equipment
   March 31,
2020
   December 31,
2019
 
Freezers and other equipment  $61,600   $1,460,255 
Delivery vans   -    32,727 
Less: accumulated depreciation   -    (730,951)
Total  $61,600   $762,031 
XML 29 R20.htm IDEA: XBRL DOCUMENT v3.21.2
Debt (Tables)
3 Months Ended
Mar. 31, 2020
Debt Disclosure [Abstract]  
Schedule of maturities of debt
2020  $5,037,720 
2021   913,396 
2022   36,399 
    5,987,515 
Less: unamortized debt discount   (1,776)
   $5,985,740 
Schedule of financial instruments related to the embedded conversion features that are recognized at fair value in the consolidated financial statements
   March 31,
2020
   March 31,
2019
 
Balance of embedded derivative at the beginning of the period  $13,553   $28,357 
Additions related to embedded conversion features of convertible debt issued -   -    - 
Derivative liabilities reduction due to notes default   -    (112,408)
Change in fair value of conversion features   394    158,987 
Balance of embedded derivatives at the end of the period  $13,947   $74,936 
XML 30 R21.htm IDEA: XBRL DOCUMENT v3.21.2
Capital Lease Obligations (Tables)
3 Months Ended
Mar. 31, 2020
Leases [Abstract]  
Schedule of minimum future rental payments
2020   107,673 
2021   49,831 
2022   30,584 
2023   10,252 
Total minimum lease payments   198,340 
Less: Amount represented interest   (27,911)
Present value of minimum lease payments and guaranteed residual value  $170,429 
XML 31 R22.htm IDEA: XBRL DOCUMENT v3.21.2
Stock Options and Warrants (Tables)
3 Months Ended
Mar. 31, 2020
Share-based Payment Arrangement [Abstract]  
Schedule of outstanding warrant securities
   Warrants   Exercise
Price
   Expiration
2015 Warrants - 2015 SPA convertible debt   735,002   $0.22   April - November 2020
2015 Warrants for services   127,067   $0.22    April - November 2020
2016 Warrants - 2016 SPA convertible debt   2,239,990   $0.05   June 2021
2016 Warrants for services   850,000   $0.05   June 2021
2016 Warrants - Convertible notes   338,236   $0.05   August - September 2021
2016 Warrants for services   200,000   $0.07   October 2020
2016 Warrants issued with Convertible Notes   5,000,000   $0.07   November -December 2021
2017 Warrants – 2017 financing   15,109,354   $0.07   December 2022
2018 Warrants – 2019 financing   9,991,905   $0.07   January - November 2023
2018 Warrants for services   2,250,000   $0.07   October - December 2023
2019 Warrants – 2020 financing   10,500,000   $0.07   March 2024
2019 Warrants for services   3,500,000   $0.07   March 2024
2020 Warrants for services   3,000,000   $0.05   February 2025
Total   51,276,404         
Schedule of all warrants activity
   Number of
Warrants
   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Term
 
Balance outstanding at December 31, 2020   51,276,404   $0.06    3.17 
Granted   3,000,000   $0.05    4.84 
Exercised   -    -    - 
Forfeited   -    -    - 
Cancelled   -    -    - 
Expired   (434,850)  $0.22    - 
Balance outstanding at March 31, 2020   51,276,404   $0.06    3.05 
Exercisable at March 31, 2020   51,276,404   $0.06    3.05 
Schedule of changes in the warrant liabilities measured at fair value on a recurring basis
   March 31,
2020
   December 31,
2020
 
Balance of embedded derivative at the beginning of the period  $      -    129,355 
Fair value of warrants issued and recorded as liabilities   -    - 
Reclassification of warrant lability to equity related to adoption of ASU 2017-11   -    (118,675)
Loss (gain) on fair value adjustment   -    (10, 680)
Balance of embedded derivatives at the end of the period  $-    - 
Schedule of stock option activity
   Number of
Options
   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Term
 
Balance outstanding at December 31, 2020   502,500   $0.50    0.5 
Granted   -    -    - 
Exercised   -    -    - 
Cancelled or expired   -    -    - 
Balance outstanding at March 31, 2020   502,500   $0.50    0.3 
Exercisable at March 31, 2020   502,500   $0.50    0.3 
XML 32 R23.htm IDEA: XBRL DOCUMENT v3.21.2
Nature of the Business (Details) - USD ($)
1 Months Ended 12 Months Ended
Mar. 18, 2019
Dec. 31, 2018
Accounting Policies [Abstract]    
Asset sale $ 350,000  
Revenue description These MiniMelts assets generated 100% of the revenue reported during the year ended December 31, 2019. During the year ended December 31, 2018, MiniMelts sales accounted for approximately $1,100,000, or 85%, of the revenue reported during that period.
XML 33 R24.htm IDEA: XBRL DOCUMENT v3.21.2
Summary of Significant Accounting Policies (Details) - USD ($)
3 Months Ended 12 Months Ended
Jan. 01, 2020
Jan. 01, 2019
Mar. 31, 2020
Mar. 31, 2019
Dec. 31, 2019
Apr. 15, 2019
Accounting Policies [Abstract]            
Shares issued under convertible debt agreements (in Shares)     159,900,000   159,900,000  
Preferred stock, shares authorized (in Shares)     10,000,000   10,000,000  
Reclassification of warrant liability derivative liability $ 118,675          
Creditors forgave aggregate amount       $ (156,709)    
Accrued expenses       64,000 $ 67,022 $ 108,572
Conversion liabilities       45,000    
Accounts Payable       105,000    
Convertible note       60,000    
Forgiveness of accounts payable       $ 47,000    
Due to related parties accrued expenses         185,000  
Related parties         $ 63,370  
Derecognized number of warrants shares (in Shares)     39,512,502      
Cumulative effect adjustments   $ 118,675        
XML 34 R25.htm IDEA: XBRL DOCUMENT v3.21.2
Summary of Significant Accounting Policies (Details) - Schedule of fair value hierarchy on financial assets and liabilities recurring basis - USD ($)
Dec. 31, 2020
Mar. 31, 2020
Fair Value Measurement [Member] | Level 1 [member]    
Summary of Significant Accounting Policies (Details) - Schedule of fair value hierarchy on financial assets and liabilities recurring basis [Line Items]    
Derivative liabilities, debt and equity instruments
Fair Value Measurement [Member] | Level 2 [member]    
Summary of Significant Accounting Policies (Details) - Schedule of fair value hierarchy on financial assets and liabilities recurring basis [Line Items]    
Derivative liabilities, debt and equity instruments
Fair Value Measurement [Member] | Level 3 [member]    
Summary of Significant Accounting Policies (Details) - Schedule of fair value hierarchy on financial assets and liabilities recurring basis [Line Items]    
Derivative liabilities, debt and equity instruments 13,553 13,947
Reported Value Measurements [Member]    
Summary of Significant Accounting Policies (Details) - Schedule of fair value hierarchy on financial assets and liabilities recurring basis [Line Items]    
Derivative liabilities, debt and equity instruments $ 13,553 $ 13,947
XML 35 R26.htm IDEA: XBRL DOCUMENT v3.21.2
Going Concern (Details)
3 Months Ended
Mar. 31, 2020
USD ($)
Going Concern [Abstract]  
Net loss $ (218,196)
Accumulated losses $ 14,416,338
XML 36 R27.htm IDEA: XBRL DOCUMENT v3.21.2
Property and Equipment (Details) - USD ($)
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Property and Equipment (Details) [Line Items]    
Depreciation expense $ 0 $ 62,728
Property, Plant and Equipment [Member]    
Property and Equipment (Details) [Line Items]    
Sale of assets $ 12,074  
XML 37 R28.htm IDEA: XBRL DOCUMENT v3.21.2
Property and Equipment (Details) - Schedule of property and equipment - USD ($)
Mar. 31, 2020
Dec. 31, 2019
Property, Plant and Equipment [Line Items]    
Less: accumulated depreciation $ (730,951)
Total 61,600 762,031
Freezers and other equipment [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 61,600 1,460,255
Delivery vans [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 32,727
XML 38 R29.htm IDEA: XBRL DOCUMENT v3.21.2
Debt (Details)
1 Months Ended 3 Months Ended 12 Months Ended
Mar. 01, 2020
USD ($)
$ / shares
Jan. 02, 2020
USD ($)
$ / shares
Jul. 11, 2019
USD ($)
shares
Apr. 15, 2019
USD ($)
$ / shares
Mar. 14, 2019
USD ($)
$ / shares
Mar. 05, 2019
USD ($)
$ / shares
shares
Dec. 12, 2018
USD ($)
May 01, 2018
USD ($)
$ / shares
shares
Mar. 31, 2020
USD ($)
$ / shares
shares
May 30, 2019
USD ($)
$ / shares
Apr. 01, 2019
USD ($)
$ / shares
Mar. 18, 2019
USD ($)
Nov. 20, 2018
USD ($)
$ / shares
Nov. 19, 2018
USD ($)
Jul. 18, 2018
USD ($)
Jun. 30, 2016
USD ($)
$ / shares
shares
Mar. 31, 2020
USD ($)
$ / shares
shares
Dec. 31, 2019
USD ($)
$ / shares
shares
Dec. 31, 2018
USD ($)
$ / shares
shares
Dec. 31, 2017
USD ($)
$ / shares
shares
Dec. 31, 2016
USD ($)
$ / shares
shares
Dec. 31, 2015
USD ($)
$ / shares
shares
Dec. 31, 2014
USD ($)
Mar. 31, 2019
USD ($)
Apr. 13, 2018
USD ($)
Nov. 16, 2017
shares
Oct. 31, 2016
$ / shares
shares
Nov. 17, 2015
$ / shares
Jan. 02, 2015
Debt (Details) [Line Items]                                                          
Common stock per share (in Dollars per share) | $ / shares                                 $ 0.05                        
Debt discount                                       $ 87,043                  
Conversion price (in Dollars per share) | $ / shares       $ 0.07                                                  
Warrants issued (in Shares) | shares                 51,276,404               51,276,404                        
Debt term       2 years                                                  
Balance outstanding                                 $ 25,784 $ 25,784       $ 11,083              
Borrowed amount                                     $ 143,908 36,400 $ 76,500                
Repayment of amount                                   46,584 125,931 44,449 63,497                
Balance outstanding on notes                                     34,044 $ 16,067 24,116                
Additional original discount                                   3,325                      
Long term debt carrying value                 $ 5,985,740               5,985,740                        
Additional warrants issued (in Shares) | shares                                                   10,000,000      
Number of convertible notes issued                                           8              
Common stock conversion price, revised (in Dollars per share) | $ / shares                   $ 0.07                                      
Accounts payable                                               $ 105,000          
Converted accrued payable       $ 108,572                           67,022           $ 64,000          
Interest       9.50%           9.50%                                      
Cash paid in common stock       15.00%                                                  
Outstanding principal balance                 108,572               108,572 108,572                      
Convertible notes                   $ 250,000                                      
Ownership conversion, percentage                   4.99%                                      
Agreement amount                                 451,231 $ 426,303                      
Initial agreement amount                                 206,231                        
2020 Financings [Member]                                                          
Debt (Details) [Line Items]                                                          
Conversion price (in Dollars per share) | $ / shares $ 0.05 $ 0.05                               $ 0.07                      
Debt term 2 years 2 years                               2 years                      
Outstanding principal amount                 68,000               68,000 $ 68,000                      
Interest 9.50% 9.50%                               9.50%                      
Cash paid in common stock 15.00% 15.00%                               15.00%                      
Convertible notes amount $ 17,899 $ 8,500             68,000               68,000                        
Principal outstanding amount                 17,899               8,500                        
Cobrador 1 [Member]                                                          
Debt (Details) [Line Items]                                                          
Balance outstanding                                 28,000 $ 28,000                      
Termination Agreements [Member]                                                          
Debt (Details) [Line Items]                                                          
Warrants exercise price (in Dollars per share) | $ / shares                                                     $ 0.05    
Additional warrants issued (in Shares) | shares                                                     200,000    
Convertible Notes [Member]                                                          
Debt (Details) [Line Items]                                                          
Conversion price (in Dollars per share) | $ / shares                                   $ 0.01                      
Debt term                                   6 months                      
Outstanding principal amount                 $ 50,000               $ 50,000 $ 50,000                      
Interest                                   9.50%                      
Cash paid in common stock                                   15.00%                      
Convertible notes amount                                   $ 50,000                      
Warrants issued (in Shares) | shares                                   10,000,000                      
Exercise price (in Dollars per share) | $ / shares                                   $ 0.02                      
Warrants term                                   5 years                      
2020 Financings [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount                                     310,000                    
Interest rate                                       7.00%                  
Convertible note issued                                       $ 25,000                  
Conversion price (in Dollars per share) | $ / shares                                       $ 0.05                  
Warrants issued (in Shares) | shares                                       500,000                  
Purchase common shares, per share (in Dollars per share) | $ / shares                                       $ 0.05                  
Debt term                                       5 years                  
Interest expense and warrant liability                                       $ 1,421                  
2020 Financings [Member] | Cobrador 2 [Member]                                                          
Debt (Details) [Line Items]                                                          
Additional face amount                               $ 108,804                          
Interest, fees and penalties amount                                         $ 72,734                
2020 Financings [Member] | Cobrador Notes [Member]                                                          
Debt (Details) [Line Items]                                                          
Interest rate                 7.00%               7.00%                        
Cobrador Notes [Member]                                                          
Debt (Details) [Line Items]                                                          
Carrying value                 $ 443,804               $ 443,804 $ 443,804                      
Promissory Notes Payable [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount                                                 $ 115,000        
Interest rate                                   7.00%                      
Debt term                                             3 years            
Original amount                                             $ 10,512            
Accrue interest                                             17.00%            
Balance outstanding                                 6,235 $ 6,235                      
Repayment of amount                                   60,000                      
Additional borrowed amount                                   25,000                      
Outstanding balance                                 80,000 80,000                      
Commercial Paper [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount                                       $ 28,000                  
Interest rate                                                         19.00%
Accrue interest                                       7.00%                  
Balance outstanding                                 80,000 80,000                      
Additional borrowed amount                                   38,325                      
Additional original discount                                   3,325                      
Two Unsecured Promissory Notes [Member]                                                          
Debt (Details) [Line Items]                                                          
Interest rate                                         10.00%                
Borrowed amount                                         $ 80,000                
Convertible Promissory Note [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount                 128,050           $ 187,500   128,050                        
Debt discount                 0               0                        
Net proceeds                             $ 147,000                            
Interest fees, description                             The Company agreed to pay $1,143 per business day for 164 days.                            
Amortization debt discount                                 40,500                        
Long term debt carrying value                 59,450               59,450                        
Convertible Promissory Note [Member] | Convertible Debt [Member]                                                          
Debt (Details) [Line Items]                                                          
Long term debt carrying value                 40,500               40,500                        
24-Month Equipment Financing Agreements [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount                 387,750               387,750                        
Long term debt carrying value                 $ 0               $ 0 0 287,750                    
Interest rate of debt                 15.00%               15.00%                        
Notes payable                                   39,266   $ 100,000                  
Warrant to purchase an aggregate shares (in Shares) | shares                                 310,200                        
Warrants exercise price (in Dollars per share) | $ / shares                 $ 0.35               $ 0.35                        
Warrants term                                 3 years                        
Warrant liability                                         $ 3,708                
Revised warrant exercise price (in Dollars per share) | $ / shares                                         $ 0.26                
24-Month Equipment Financing Agreements [Member] | Convertible Debt [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount                     $ 321,824                                    
Promissory Note [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount                           $ 124,000                              
Debt discount                                   544 10,288                    
Balance outstanding                                 $ 66,062                        
Repayment of amount                                   48,154                      
Net proceeds                           112,840                              
Amortization debt discount                           $ 11,160     544 9,744 872                    
Long term debt carrying value                                   65,518 103,928                    
Promissory Note [Member] | Convertible Debt [Member]                                                          
Debt (Details) [Line Items]                                                          
Repayment of amount                                     9,784                    
Promissory Note One [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount           $ 100,000 $ 112,425                                            
Debt discount                                     44,181                    
Debt term           1 year                                              
Repayment of amount                                   103,055 9,370                    
Balance outstanding on notes                 $ 100,000               100,000 100,000                      
Net proceeds             64,500                                            
Amortization debt discount             $ 47,925                     44,181 3,744                    
Long term debt carrying value                                   0 58,874                    
Interest rate of debt           10.00%                                              
Warrants term           5 years                                              
Debt description             The Company agreed to pay $937 per business day for 120 days.                                            
Warrant shares (in Shares) | shares           500,000                                              
Strike price per share (in Dollars per share) | $ / shares           $ 0.07                                              
Two Promissory Note [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount                                   135,000                      
Balance outstanding on notes                 135,000               135,000 $ 135,000                      
Note bears interest of debt                                   7.00%                      
Note matures                                   Aug. 08, 2019                      
2014 Stock Purchase Agreement [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount                                           $ 146,000              
Conversion price (in Dollars per share) | $ / shares                                           $ 0.30              
Balance outstanding on notes                 121,000               121,000 $ 121,000                      
Long term debt carrying value               $ 2,841                                          
Notes payable                                       50,000                  
Warrants exercise price (in Dollars per share) | $ / shares               $ 0.15                         $ 0.22 $ 0.35              
Warrants term               5 years                           5 years              
Warrants granted with debt, shares (in Shares) | shares               1,000,000                           360,002              
2014 Stock Purchase Agreement [Member] | Cobrador [Member]                                                          
Debt (Details) [Line Items]                                                          
Original amount                                 $ 45,000                        
Number of convertible notes issued                                 3                        
Repayment date                                 Nov. 17, 2020                        
Conversion price per share. (in Dollars per share) | $ / shares                                 $ 0.05                        
Warrant exercise price per share (in Dollars per share) | $ / shares                                 $ 0.07                        
Outstanding balance                                 $ 45,000 45,000                      
2015 Stock Purchase Agreement [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount                                           $ 441,000              
Conversion price (in Dollars per share) | $ / shares                                           $ 0.30           $ 0.05  
Amortization debt discount                                 406,000 406,000                      
Warrant to purchase an aggregate shares (in Shares) | shares                                           735,002              
Warrants exercise price (in Dollars per share) | $ / shares                                           $ 0.40              
Warrants term                                           5 years              
Revised warrant exercise price (in Dollars per share) | $ / shares                                           $ 0.22              
Note bears interest of debt                                           9.50%              
Number of convertible notes issued                                           11              
Proceeds allocated to debt discount                                           $ 8,113              
Common stock issued upon conversion of debt                                         $ 35,000                
Common stock issued upon conversion of debt, shares (in Shares) | shares                                         700,000                
2016 Stock Purchase Agreement [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount                               761,597                          
Debt discount                               $ 19,242                          
Conversion price (in Dollars per share) | $ / shares                               $ 0.17                          
Original amount                               $ 549,000                          
Long term debt carrying value                 676,597               676,597 676,597                      
Warrants exercise price (in Dollars per share) | $ / shares                               $ 0.30                          
Warrants term                               5 years                          
Revised warrant exercise price (in Dollars per share) | $ / shares                               $ 0.05                          
Note bears interest of debt                               9.50%                          
Number of convertible notes issued                               5                          
Warrants granted with debt, shares (in Shares) | shares                               2,239,900                          
Common stock issued upon conversion of debt     $ 85,000                                                    
Common stock issued upon conversion of debt, shares (in Shares) | shares     1,700,000                                                    
Accrued interest                               $ 38,615                          
Lease principal installments                               47,466                          
Accrued registration rights penalties                               22,156                          
Due to former office                               81,250                          
Additional interest, expenses, fine and penalties                               $ 23,110         $ 23,110                
Cobrador 2016 Notes [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount                                         115,000                
Debt discount                                         $ 1,994                
Conversion price (in Dollars per share) | $ / shares                                         $ 0.17                
Debt term                                         2 years                
Long term debt carrying value                 95,000               95,000 $ 95,000                      
Interest rate of debt                                         9.50%                
Warrants exercise price (in Dollars per share) | $ / shares                                         $ 0.30                
Warrants term                                         5 years                
Revised warrant exercise price (in Dollars per share) | $ / shares                                         $ 0.05                
Warrants granted with debt, shares (in Shares) | shares                                         338,235                
Common stock conversion price, revised (in Dollars per share) | $ / shares                                         $ 0.05                
Conversion of stock, description                                   During the year ended December 31, 2019, $20,000 was converted into 400,000 shares.                      
Other 2016 Financings [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount                                         $ 250,000                
Debt discount                                         $ 27,585                
Conversion price (in Dollars per share) | $ / shares                                         $ 0.05                
Debt term                                         2 years                
Long term debt carrying value                 250,000               250,000 $ 250,000                      
Interest rate of debt                                         9.50%                
Warrants exercise price (in Dollars per share) | $ / shares                                         $ 0.07                
Warrants granted with debt, shares (in Shares) | shares                                         5,000,000                
2017 Convertible Notes [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount                                       923,882                  
Debt discount                                       $ 59,403                  
Conversion price (in Dollars per share) | $ / shares                                       $ 0.05                  
Debt term                                       2 years                  
Amortization debt discount                                   13,278 31,940                    
Long term debt carrying value                 924,282               924,282 924,282 910,608                    
Interest rate of debt                                       9.50%                  
Warrants exercise price (in Dollars per share) | $ / shares                                       $ 0.07                  
Warrants term                                       5 years                  
Warrants granted with debt, shares (in Shares) | shares                                       16,537,926                  
Unamortized debt discount                                     13,278                    
2018 Convertible Notes [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount                         $ 436,500           537,500                    
Debt discount                                   16,692 $ 33,384                    
Convertible note issued                         $ 436,500                                
Conversion price (in Dollars per share) | $ / shares                         $ 0.05           $ 0.05                    
Debt term                         2 years           2 years                    
Amortization debt discount                                 2,113   $ 12,803                    
Long term debt carrying value                 535,724               535,724 533,611 $ 516,919                    
Interest rate of debt                         9.50%           9.50%                    
Warrants exercise price (in Dollars per share) | $ / shares                                     $ 0.07                    
Warrants term                                     5 years                    
Warrants granted with debt, shares (in Shares) | shares                                     10,750,000                    
Unamortized debt discount                                 1,776 3,889 $ 20,581                    
Interest percentage of common stock                         15.00%           15.00%                    
Convertible notes in aggregate amount                                 340,000                        
2018 Convertible Notes [Member] | Three Convertible Notes Agreements [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount                                   64,300 $ 240,500                    
Debt discount                                   42,764                      
Debt term                                     1 year                    
Net proceeds                                     $ 214,000                    
Amortization debt discount                                   21,381 21,382                    
Long term debt carrying value                                   296,450 $ 296,605                    
Number of convertible notes issued                                     3                    
Unamortized debt discount                                     $ 64,145                    
Embedded conversion feature                                     59,027                    
Repayment amount                                     26,500                    
Penalty in principal                                     $ 120,250                    
Unamortized debt discount                                   0                      
2018 Financings [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount                 296,850               296,850                        
Repayment amount                 400               400                        
2019 Financings [Member]                                                          
Debt (Details) [Line Items]                                                          
Principal amount         $ 60,000             $ 85,250                                  
Conversion price (in Dollars per share) | $ / shares         $ 0.05           $ 0.05                                    
Debt term         2 years           2 years                                    
Net proceeds                       $ 75,000                                  
Amortization debt discount                                   23,384                      
Long term debt carrying value                 127,875               127,875 127,875                      
Interest rate of debt                       8.00%                                  
Note bears interest of debt         9.50%           9.50%                                    
Number of convertible notes issued                     2                                    
Unamortized debt discount                                   0                      
Interest percentage of common stock         15.00%           15.00%                                    
Penalty in principal                                   42,625                      
Description of promissory note                       The Company has the option to pre-pay the note (principal and accrued interest) in cash within the 1st 90 days from issuance at a 25% premium, and 40% premium 91-180 days from the issuance date. Subsequent to 181 days, the Company shall have no right of prepayment and the holder may convert at a 40% discount to the prevailing market price. The note matured on December 11, 2019. The note is convertible into shares of common stock at the lesser of 1) lowest trading price of twenty-five days prior to March 18, 2019 or 2) 60% of lowest trading price of twenty-five days prior to the Conversion Day. In addition, the Company also recorded $10,250 as original debt discount.                                  
Accounts payable         $ 105,000           $ 10,000                                    
Outstanding principal amount                 $ 331,824   $ 321,824           $ 331,824 $ 331,824                      
Minimum [Member] | 2018 Convertible Notes [Member] | Three Convertible Notes Agreements [Member]                                                          
Debt (Details) [Line Items]                                                          
Interest rate of debt                                     8.00%                    
Interest percentage of common stock                                     60.00%                    
Maximum [Member] | 2018 Convertible Notes [Member] | Three Convertible Notes Agreements [Member]                                                          
Debt (Details) [Line Items]                                                          
Interest rate of debt                                     12.00%                    
Interest percentage of common stock                                     61.00%                    
XML 39 R30.htm IDEA: XBRL DOCUMENT v3.21.2
Debt (Details) - Schedule of maturities of debt
Mar. 31, 2020
USD ($)
Schedule of maturities of debt [Abstract]  
2020 $ 5,037,720
2021 913,396
2022 36,399
Total 5,987,515
Less: unamortized debt discount (1,776)
Debt, net $ 5,985,740
XML 40 R31.htm IDEA: XBRL DOCUMENT v3.21.2
Debt (Details) - Schedule of financial instruments related to the embedded conversion features that are recognized at fair value in the consolidated financial statements - USD ($)
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Schedule of financial instruments related to the embedded conversion features that are recognized at fair value in the consolidated financial statements [Abstract]    
Balance of embedded derivative at the beginning of the period $ 13,553 $ 28,357
Additions related to embedded conversion features of convertible debt issued -
Derivative liabilities reduction due to notes default   (112,408)
Change in fair value of conversion features 394 158,987
Balance of embedded derivatives at the end of the period $ 13,947 $ 74,936
XML 41 R32.htm IDEA: XBRL DOCUMENT v3.21.2
Capital Lease Obligations (Details)
3 Months Ended
Mar. 31, 2020
$ / shares
shares
Leases [Abstract]  
Warrants issued for common stock | shares 150,000
Warrants exercise price | $ / shares $ 0.30
Leases expire Dec. 31, 2023
XML 42 R33.htm IDEA: XBRL DOCUMENT v3.21.2
Capital Lease Obligations (Details) - Schedule of minimum future rental payments
Mar. 31, 2020
USD ($)
Schedule of minimum future rental payments [Abstract]  
2020 $ 107,673
2021 49,831
2022 30,584
2023 10,252
Total minimum lease payments 198,340
Less: Amount represented interest (27,911)
Present value of minimum lease payments and guaranteed residual value $ 170,429
XML 43 R34.htm IDEA: XBRL DOCUMENT v3.21.2
Capital Stock (Details) - Common Stock [Member] - USD ($)
3 Months Ended
Dec. 31, 2020
Mar. 31, 2019
Mar. 31, 2020
Capital Stock (Details) [Line Items]      
Common stock, shares authorized     600,000,000
Common stock, shares issued   3,271,000  
Issued of common stock for services, shares   2,871,096  
Issued of common stock for services, value (in Dollars)   $ 41,003  
Conversion of convertible notes, shares   400,000  
Conversion of convertible notes, value (in Dollars)   $ 20,000  
Issuance of common stock (in Dollars) $ 0    
XML 44 R35.htm IDEA: XBRL DOCUMENT v3.21.2
Stock Options and Warrants (Details) - USD ($)
1 Months Ended 3 Months Ended
Nov. 16, 2017
Jul. 22, 2011
Mar. 31, 2020
Stock Options and Warrants (Details) [Line Items]      
Warrants issued     3,000,000
Fair value of warrants (in Dollars)     $ 12,594
Expected volatility rate     339.00%
Risk-free interest rate     1.35%
Expected dividend yield rate     0.00%
Total number of shares of common stock available for issuance 15,000,000    
Additional warrants issued 10,000,000    
2011 Equity Incentive Plan [Member] | Common Stock [Member]      
Stock Options and Warrants (Details) [Line Items]      
Total number of shares of common stock available for issuance   5,000,000  
Description of stock options vested term   the Company issues stock options that vest over three years and expire in 5 to 10 years.  
XML 45 R36.htm IDEA: XBRL DOCUMENT v3.21.2
Stock Options and Warrants (Details) - Schedule of outstanding warrant securities
3 Months Ended
Mar. 31, 2020
$ / shares
shares
Class of Warrant or Right [Line Items]  
Warrants 51,276,404
2015 Warrants - 2015 SPA convertible debt [Member]  
Class of Warrant or Right [Line Items]  
Warrants 735,002
Exercise Price (in Dollars per share) | $ / shares $ 0.22
Expiration April - November 2020
2015 Warrants for services [Member]  
Class of Warrant or Right [Line Items]  
Warrants 127,067
Exercise Price (in Dollars per share) | $ / shares $ 0.22
Expiration April - November 2020
2016 Warrants - 2016 SPA convertible debt [Member]  
Class of Warrant or Right [Line Items]  
Warrants 2,239,990
Exercise Price (in Dollars per share) | $ / shares $ 0.05
Expiration June 2021
2016 Warrants for services [Member]  
Class of Warrant or Right [Line Items]  
Warrants 850,000
Exercise Price (in Dollars per share) | $ / shares $ 0.05
Expiration June 2021
2016 Warrants - Convertible notes [Member]  
Class of Warrant or Right [Line Items]  
Warrants 338,236
Exercise Price (in Dollars per share) | $ / shares $ 0.05
Expiration August - September 2021
2016 Warrants for services [Member]  
Class of Warrant or Right [Line Items]  
Warrants 200,000
Exercise Price (in Dollars per share) | $ / shares $ 0.07
Expiration October 2020
2016 Warrants issued with Convertible Notes [Member]  
Class of Warrant or Right [Line Items]  
Warrants 5,000,000
Exercise Price (in Dollars per share) | $ / shares $ 0.07
Expiration November -December 2021
2017 Warrants - 2017 financing [Member]  
Class of Warrant or Right [Line Items]  
Warrants 15,109,354
Exercise Price (in Dollars per share) | $ / shares $ 0.07
Expiration December 2022
2018 Warrants - 2018 financing [Member]  
Class of Warrant or Right [Line Items]  
Warrants 9,991,905
Exercise Price (in Dollars per share) | $ / shares $ 0.07
Expiration January - November 2023
2018 Warrants for services [Member]  
Class of Warrant or Right [Line Items]  
Warrants 2,250,000
Exercise Price (in Dollars per share) | $ / shares $ 0.07
Expiration October - December 2023
2019 Warrants - 2019 financing [Member]  
Class of Warrant or Right [Line Items]  
Warrants 10,500,000
Exercise Price (in Dollars per share) | $ / shares $ 0.07
Expiration March 2024
2019 Warrants for services [Member]  
Class of Warrant or Right [Line Items]  
Warrants 3,500,000
Exercise Price (in Dollars per share) | $ / shares $ 0.07
Expiration March 2024
2020 Warrants for services [Member]  
Class of Warrant or Right [Line Items]  
Warrants 3,000,000
Exercise Price (in Dollars per share) | $ / shares $ 0.05
Expiration February 2025
XML 46 R37.htm IDEA: XBRL DOCUMENT v3.21.2
Stock Options and Warrants (Details) - Schedule of all warrants activity - Warrant [Member]
3 Months Ended
Mar. 31, 2020
$ / shares
shares
Stock Options and Warrants (Details) - Schedule of all warrants activity [Line Items]  
Number of Warrants Balance outstanding 51,276,404
Weighted Average Exercise Price Balance outstanding (in Dollars per share) | $ / shares $ 0.06
Weighted Average Remaining Contractual Term Balance outstanding 3 years 62 days
Number of Warrants Balance outstanding 51,276,404
Weighted Average Exercise Price Balance outstanding (in Dollars per share) | $ / shares $ 0.06
Weighted Average Remaining Contractual Term Balance outstanding 3 years 18 days
Number of Warrants Exercisable 51,276,404
Weighted Average Exercise Price Exercisable (in Dollars per share) | $ / shares $ 0.06
Weighted Average Remaining Contractual Term Exercisable 3 years 18 days
Number of Warrants Granted 3,000,000
Weighted Average Exercise Price Granted (in Dollars per share) | $ / shares $ 0.05
Weighted Average Remaining Contractual Term Granted 4 years 306 days
Number of Warrants Exercised
Weighted Average Exercise Price Exercised (in Dollars per share) | $ / shares
Number of Warrants Forfeited
Weighted Average Exercise Price Forfeited
Number of Warrants Cancelled
Weighted Average Exercise Price Cancelled (in Dollars per share) | $ / shares
Number of Warrants Expired (434,850)
Weighted Average Exercise Price Expired (in Dollars per share) | $ / shares $ 0.22
Weighted Average Remaining Contractual Term Expired
XML 47 R38.htm IDEA: XBRL DOCUMENT v3.21.2
Stock Options and Warrants (Details) - Schedule of changes in the warrant liabilities measured at fair value on a recurring basis - USD ($)
3 Months Ended 12 Months Ended
Mar. 31, 2020
Dec. 31, 2019
Schedule of changes in the warrant liabilities measured at fair value on a recurring basis [Abstract]    
Balance of embedded derivative at the beginning of the period   $ 129,355
Fair value of warrants issued and recorded as liabilities  
Reclassification of warrant lability to equity related to adoption of ASU 2017-11   (118,675)
Loss (gain) on fair value adjustment   $ (10,680)
Balance of embedded derivatives at the end of the period  
XML 48 R39.htm IDEA: XBRL DOCUMENT v3.21.2
Stock Options and Warrants (Details) - Schedule of stock option activity - Equity Incentive Plan [Member]
3 Months Ended
Mar. 31, 2020
$ / shares
shares
Stock Options and Warrants (Details) - Schedule of stock option activity [Line Items]  
Number of Options Balance outstanding (in Shares) | shares 502,500
Weighted Average Exercise Price Balance outstanding $ 0.50
Weighted Average Remaining Contractual Term Balance outstanding 6 months
Number of Options Granted (in Shares) | shares
Weighted Average Exercise Price Granted
Weighted Average Remaining Contractual Term Granted
Number of Options,Exercised (in Shares) | shares
Weighted Average Exercise Price Exercised
Weighted Average Remaining Contractual Term Exercised
Number of Options Cancelled or expired
Weighted Average Exercise Price Cancelled or expired
Weighted Average Remaining Contractual Term Cancelled or expired
Number of Options Balance outstanding (in Shares) | shares 502,500
Weighted Average Exercise Price Balance outstanding $ 0.50
Weighted Average Remaining Contractual Term Balance outstanding 109 days
Number of Options Exercisable (in Shares) | shares 502,500
Weighted Average Exercise Price Exercisable $ 0.50
Weighted Average Remaining Contractual Term Exercisable 109 days
XML 49 R40.htm IDEA: XBRL DOCUMENT v3.21.2
Commitments and Contingencies (Details) - USD ($)
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Dec. 31, 2019
Commitments and Contingencies (Details) [Line Items]      
Payment on license agreement $ 0 $ 0  
Accrued license fees $ 115,000   $ 115,000
Major League Baseball Properties, Inc. License Agreement [Member]      
Commitments and Contingencies (Details) [Line Items]      
Guaranteed Payments, 2016     150,000
Guaranteed Payments, 2017     275,000
Guaranteed Payments, 2018     100,000
Guaranteed Payments, 2019     $ 115,000
XML 50 R41.htm IDEA: XBRL DOCUMENT v3.21.2
Subsequent Events (Details) - USD ($)
3 Months Ended
Apr. 15, 2019
Mar. 31, 2020
Subsequent Events (Details) [Line Items]    
Convertible notes value   $ 561,719
Term 2 years  
Convertible shares of common stock, conversion price (in Dollars per share) $ 0.07  
Common stock in conversion convertible notes   689,096
Promissory Note [Member]    
Subsequent Events (Details) [Line Items]    
Convertible notes value   $ 188,886,284
Interest rate   9.50%
Term   2 years
Convertible shares of common stock, conversion price (in Dollars per share)   $ 0.03
Redeemable [Member]    
Subsequent Events (Details) [Line Items]    
Term   1 year
Working Capital [Member]    
Subsequent Events (Details) [Line Items]    
Interest rate   9.50%
Convertible shares of common stock, conversion price (in Dollars per share)   $ 0.05
Working Capital [Member] | Promissory Note [Member]    
Subsequent Events (Details) [Line Items]    
Convertible notes value   $ 147,000
Chief Operating Officer [Member]    
Subsequent Events (Details) [Line Items]    
Company hired   $ 84,000
Redeemable [Member] | Working Capital [Member]    
Subsequent Events (Details) [Line Items]    
Term   1 year
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