XBRL Rendering Preview
v3.20.1
Document and Entity Information - USD ($)
12 Months Ended
Dec. 31, 2019
Mar. 23, 2020
Jun. 30, 2019
Document and Entity Information:      
Registrant Name ACQUIRED SALES CORP.    
Registrant CIK 0001391135    
SEC Form 10-K    
Period End date Dec. 31, 2019    
Fiscal Year End --12-31    
Tax Identification Number (TIN) 87-0479286    
Number of common stock shares outstanding   6,627,124  
Public Float     $ 8,779,755
Filer Category Non-accelerated Filer    
Entity a Well-known Seasoned Issuer No    
Entity a Voluntary Filer No    
Entity's Reporting Status Current Yes    
Entity Small Business true    
Emerging Growth Company false    
Entity Shell Company false    
Entity Interactive Data Current Yes    
Entity File Number 000-52102    
Amendment Flag false    
Document Fiscal Year Focus 2019    
Document Fiscal Period Focus FY    
Entity Incorporation, State Country Code NV    
Entity Address, Address Line One 31 N. Suffolk Lane, Lake Forest, Illinois    
Entity Address, State or Province IL    
Entity Address, Postal Zip Code 60045    
City Area Code 847    
Local Phone Number 915-2446    
v3.20.1
BALANCE SHEETS - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Current Assets    
Cash and Cash Equivalents $ 4,384,929 $ 0
Prepaid Expenses 9,583 0
Note Receivable from CBD LION 200,000 0
Total Current Assets 4,594,512 0
Investment in Ablis 399,200 0
Investment in Bendistillery and Bend Spirits 1,497,000 0
Total Assets 6,490,712 0
Accounts Payable - Related Party    
Accounts Payable - Related Party - Payable to William C. Jacobs 0 164,417
Accounts Payable - Related Party - Payable to Gerard M. Jacobs 0 24,583
Accounts Payable - Related Party - Payable to Other Related Party 0 4,000
Accounts Payable - Related Party 0 193,000
Accounts Payable 38,485 113,450
Notes Payable - Payable to Joshua A. Bloom 0 20,025
Notes Payable - Payable to Gerard M. Jacobs 0 10,766
Notes Payable - Related Party 0 30,791
Interest - Payable to Joshua A. Bloom 0 914
Interest - Payable to Gerard M. Jacobs 0 467
Interest Payable - Related Party 0 1,381
Preferred Stock Dividends Payable    
Series A Convertible Preferred Stock Dividends Payable 145,017 0
Series B Convertible Preferred Stock Dividends Payable 5,741 0
Preferred Stock Dividends Payable 150,758 0
Total Current Liabilities 189,243 338,622
Commitments and Contingencies 0 0
Shareholders' Equity    
Preferred stock 166 0
Common Stock, $0.001 par value; 100,000,000 shares authorized; 2,726,669 and 2,369,648 shares outstanding at December 31, 2019 and December 31, 2018, respectively 2,727 2,370
Additional paid-in capital 21,691,128 13,664,697
Accumulated Deficit (15,392,552) (14,005,689)
Total Shareholders' Equity (Deficit) 6,301,469 (338,622)
Total Liabilities and Shareholders' Equity $ 6,490,712 $ 0
v3.20.1
BALANCE SHEETS (Parenthetical) - $ / shares
Dec. 31, 2019
Dec. 31, 2018
Preferred Stock, par or stated value $ 0.001 $ 0.001
Preferred Stock, shares authorized 10,000,000 10,000,000
Common Stock, par or stated value $ 0.001 $ 0.001
Common Stock, shares authorized 100,000,000 100,000,000
Common Stock, shares outstanding 2,726,669 2,369,648
Series A Convertible Preferred Stock    
Preferred Stock, par or stated value $ 0.001 $ 0.001
Preferred Stock, shares authorized 400,000 400,000
Preferred Stock, shares issued 66,150 0
Preferred Stock, shares outstanding 66,150 0
Series B Convertible Preferred Stock    
Preferred Stock, par or stated value $ 0.001 $ 0.001
Preferred Stock, shares authorized 5,000,000 5,000,000
Preferred Stock, shares issued 100,000 0
Preferred Stock, shares outstanding 100,000 0
v3.20.1
STATEMENTS OF OPERATIONS - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Income Statement [Abstract]    
Selling, General and Administrative Expenses $ (64,734) $ (11,299)
Stock Compensation Expense (874,154) (72,500)
Consulting and Independent Contractor Fees (112,500) (60,000)
Professional Fees (211,543) (37,767)
Loss From Operations (1,262,931) (181,566)
Gain on Settlement 29,196 0
Interest Income 25,628 0
Interest Expense (27,998) (39,055)
Total Other Income 26,826 (39,055)
Loss Before Provision for Income Taxes (1,236,105) (220,621)
Provision for Income Taxes 0 0
Net Loss $ (1,236,105) $ (220,621)
Basic and Diluted Net Loss per Share $ (0.48) $ (0.09)
Basic and Diluted Weighted Average Number of Common Shares Outstanding: 2,577,349 2,369,648
v3.20.1
STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($)
Preferred Stock
Common Stock
Additional Paid-In Capital
Accumulated Deficit
Total
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2017 $ 2,370 $ 13,554,524 $ (13,785,068) $ (228,174)
Shares, Outstanding, Beginning Balance at Dec. 31, 2017 2,369,648      
Net Loss       (20,068) (20,068)
Stockholders' Equity Attributable to Parent, Ending Balance at Mar. 31, 2018 $ 2,370 13,554,524 (13,805,136) (248,242)
Shares, Outstanding, Ending Balance at Mar. 31, 2018 2,369,648      
Stock Compensation Expense     72,500   72,500
Net Loss       (91,401) (91,401)
Stockholders' Equity Attributable to Parent, Ending Balance at Jun. 30, 2018 $ 2,370 13,627,024 (13,896,537) (267,143)
Shares, Outstanding, Ending Balance at Jun. 30, 2018 2,369,648      
Issuance of warrants to purchase common stock     4,550   4,550
Net Loss       (34,807) (34,807)
Stockholders' Equity Attributable to Parent, Ending Balance at Sep. 30, 2018 $ 2,370 13,631,574 (13,931,344) (297,400)
Shares, Outstanding, Ending Balance at Sep. 30, 2018 2,369,648      
Net Loss     33,123 (74,345) (41,222)
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2018 $ 2,370 13,664,697 (14,005,689) (338,622)
Shares, Outstanding, Ending Balance at Dec. 31, 2018 2,369,648      
Exercise of rights to purchase warrants to purchase shares of common stock, Amount $ 210 1,892 2,102
Exercise of rights to purchase warrants to purchase shares of common stock, Shares 210,000      
Issuance of warrants to purchase common stock 26,773 26,773
Issuance of Series A Convertible Preferred Stock for cash, Amount $ 30 2,989,970 2,990,000
Issuance of Series A Convertible Preferred Stock for cash, Shares 29,900        
Series A Preferred Stock dividend payable (18,552) (18,552)
Net Loss (44,440) (44,440)
Stockholders' Equity Attributable to Parent, Ending Balance at Mar. 31, 2019 $ 30 $ 2,580 16,683,332 (14,068,681) 2,617,261
Shares, Outstanding, Ending Balance at Mar. 31, 2019 29,900 2,579,648      
Issuance of Series A Convertible Preferred Stock for cash, Amount $ 36 3,624,964 3,625,000
Issuance of Series A Convertible Preferred Stock for cash, Shares 36,250        
Series A Preferred Stock dividend payable (26,425) (26,425)
Stock Compensation Expense 834,186 834,186
Net Loss (896,815) (896,815)
Stockholders' Equity Attributable to Parent, Ending Balance at Jun. 30, 2019 $ 66 $ 2,580 21,142,482 (14,991,921) 6,153,207
Shares, Outstanding, Ending Balance at Jun. 30, 2019 66,150 2,579,648      
Exercise of warrants, Amount $ 147 8,778 8,925
Exercise of warrants, Shares 147,021      
Issuance of Series B Convertible Preferred Stock for cash, Amount $ 90 449,910 450,000
Issuance of Series B Convertible Preferred Stock for cash, Shares 90,000        
Series A Preferred Stock dividend payable       (50,020) (50,020)
Series B Preferred Stock dividend payable       (2,232) (2,232)
Stock Compensation Expense     37,961   37,961
Net Loss       (146,466) (146,466)
Stockholders' Equity Attributable to Parent, Ending Balance at Sep. 30, 2019 $ 156 $ 2,727 21,639,131 (15,190,639) 6,451,375
Shares, Outstanding, Ending Balance at Sep. 30, 2019 156,150 2,726,669      
Issuance of Series B Convertible Preferred Stock for cash, Amount $ 10 49,990 50,000
Issuance of Series B Convertible Preferred Stock for cash, Shares 10,000        
Series A Preferred Stock dividend payable       (50,020) (50,020)
Series B Preferred Stock dividend payable       (3,509) (3,509)
Stock Compensation Expense     2,007   2,007
Net Loss       (148,384) (148,384)
Stockholders' Equity Attributable to Parent, Ending Balance at Dec. 31, 2019 $ 166 $ 2,727 $ 21,691,128 $ (15,392,552) $ 6,301,469
Shares, Outstanding, Ending Balance at Dec. 31, 2019 166,150 2,726,669      
v3.20.1
STATEMENTS OF CASH FLOWS - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Cash Flows From Operating Activities    
Net Loss $ (1,236,105) $ (220,621)
Adjustments to Reconcile Loss to Net Cash Used in Operating Activities:    
Stock Compensation Expense 874,154 72,500
Financing Cost - Issuance of Warrants to Purchase Common Stock 26,773 37,673
Changes in Operating Assets and Liabilities:    
Prepaid Expenses (9,583) 0
Accounts Payable to Related Parties (191,776) 71,251
Accounts Payable (74,965) 7,025
Net Cash Used in Operating Activities (611,502) (32,172)
Cash Flows From Investing Activities    
Investment in Ablis (399,200) 0
Investment in Bendistillery and Bend Spirits (1,497,000) 0
Receipt of CBD Lion Loan Repayments 100,000 0
Loan to CBD Lion (300,000) 0
Net Cash Used in Investing Activities (2,096,200) 0
Cash Flows From Financing Activities    
Financing Cost - Proceeds From Borrowing Under Notes Payable to Related Parties 14,772 30,791
Financing Cost - Repayment of Borrowings Under Notes Payable to Related Parties (45,562) 0
Financing Cost - Repayment of Interest Payable to Related Parties (2,606) 0
Financing Cost - Interest Payable to Related Parties 0 1,381
Exercise of Warrants 11,027 0
Issuance of Series A Convertible Preferred Stock 6,615,000 0
Issuance of Series B Convertible Preferred Stock 500,000 0
Net Cash Provided by Financing Activities 7,092,631 32,172
Net Increase/(Decrease) in Cash 4,384,929 0
Cash and Cash Equivalents at Beginning of Year 0 0
Cash and Cash Equivalents at End of Year 4,384,929 0
Supplemental Cash Flow Information    
Cash paid for interest 2,606 0
Cash paid for income taxes $ 0 $ 0
v3.20.1
Note 1 - Basis of Presentation and Significant Accounting Policies
12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 1 - Basis of Presentation and Significant Accounting Policies

NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

 

Basis of PresentationAcquired Sales Corp. (hereinafter sometimes referred to as “Acquired Sales”, the “Company”, “AQSP”, “Acquired”, the “Company”, “we”, “us”, “our”, etc.) was organized under the laws of the State of Nevada on January 2, 1986.

 

Our business involves acquiring all or a portion of operating businesses involving the manufacture, sale and distribution of cannabinoid-infused products such as beverages, lotions, oils, hemp joints and cigarettes, tinctures, bath bombs, balms, body washes, gummies, food, other edibles, and non-prescription cannabinoid formulations (a “Canna-Infused Products Company”). In order to consummate a particular acquisition of a Canna-Infused Products Company, management of the Company is open-minded to the concept of also acquiring all or a portion of one or more operating businesses and/or assets that are related to such Canna-Infused Products Company, for example operating businesses and/or assets involving distilled spirits, beer, wine, paraphernalia and real estate.

 

To date, we have acquired 100% of the ownership interests in one Canna-Infused Products Company d/b/a Lifted Made, 4.99% of the ownership interests in a second Canna-Infused Products Company called Ablis Holding Company ("Ablis"), and 4.99% of the ownership interests in two other businesses that manufacture distilled spirits called Bendistillery Inc. ("Bendistillery") and Bend Spirits, Inc. ("Bend Spirits").

 

For more information, please refer to “Description of the Business of Acquired Sales Corp.” and to "The Lifted Made Business" under the section “ITEM 1. BUSINESS” above.

 

Use of Estimates – The preparation of financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) typically requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions. Key estimates in these financial statements include the allowance for doubtful accounts, inventory write-downs, estimated useful lives of property, plant and equipment, valuation allowance on deferred income tax assets and the fair value of stock options.

 

Cash and Cash Equivalents – Cash and cash equivalents as of December 31, 2019 and 2018 included cash on-hand. Cash equivalents are considered all accounts with an original maturity date within 90 days. Cash equivalents are carried at cost.

 

Notes Receivable – Notes receivable are classified on the balance sheet based on their maturity date.

 

Fair Value of Financial Instruments – The carrying amount of the financial instruments, which principally include cash, notes receivables, accounts payable and accrued expenses, approximates fair value due to the relative short maturity of such instruments.

 

Accounting Standards Codification (“ASC”) 820 defines fair value, establishes a framework for measuring fair value under U.S. GAAP and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair-value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value as follows:

 

Level 1 – Quoted prices in active markets for identical assets or liabilities

 

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quotes prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

Investments – Under US GAAP, the Company uses the cost method to account for our minority equity ownership interests in businesses in which the Company owns less than 20% of equity ownership, and have no substantial influence over the management of the businesses. Under the cost method of accounting, the Company reports the historical costs of the investments as assets on its balance sheet. However, US GAAP does not permit the consolidation of its financial statements with the financial statements of companies in which the Company owns minority equity ownership interests. US GAAP also requires the Company to record these types of investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. As such, the Company will not be allowed to consolidate into its financial statements any portion of the revenues, earnings or assets of companies in which it owns minority equity ownership interests such as Ablis, Bendistillery and Bend Spirits. Moreover, even if there is evidence that the fair market values of the investments have increased above their historical costs, US GAAP does not allow increasing the recorded values of the investments. Under US GAAP, the only adjustments that may be made to the historical costs of the investments are write downs of the values of the investments, which must be made if there is evidence that the fair market values of the investments have declined to below the recorded historical costs.

 

Income Taxes – Provisions for income taxes are based on taxes payable or refundable for the current year and deferred income taxes. Deferred income taxes are provided on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements and on tax carry forwards. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. A valuation allowance is provided against deferred income tax assets when it is not more likely than not that the deferred income tax assets will be realized.

 

Basic and Diluted Earnings (Loss) Per Common Share – Basic earnings (loss) per common share is determined by dividing earnings (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per common share is calculated by dividing earnings (loss) by the weighted-average number of common shares and dilutive common share equivalents outstanding during the period. When dilutive, the incremental potential common shares issuable upon exercise of stock options and warrants are determined by the treasury stock method. The following table summarizes the calculations of basic and diluted earnings (loss) per common share for the years ended December 31, 2019 and 2018:

 

    For the Year Ended
    December 31,
    2019   2018
Net Loss   $ (1,236,105)     $ (220,621)  
Weighted-Average Shares Outstanding   2,577,349      2,369,648   
         
Basic and Diluted Earnings Loss per Share   $ (0.48)     $ (0.09)  

 

At December 31, 2019, there were outstanding options to purchase 1,586,619 shares of common stock at between $0.001 and $2.00 per share, (b) rights to purchase warrants to purchase 2,625,000 shares of common stock at between $0.01 and $1.85 per share, and (c) financing warrants to purchase 31,250 shares of common stock at $0.03. As of the date of this report, none of these outstanding options, rights to purchase warrants or financing warrants have been exercised into shares of common stock. However, all of them may be exercised at any time in the sole discretion of the holder except for the rights to purchase warrants to purchase 1.25 million shares of our commons stock, are not exercisable until a performance contingency is met.

 

At December 31, 2019, the Company had Series A Preferred Stock outstanding convertible into 6,615,000 shares of common stock. In addition, the Company has accepted subscriptions from four accredited investors to purchase 100,000 shares of Series B Preferred Stock for an aggregate purchase price of $500,000 in cash, convertible at the option of the holder into 100,000 shares of newly issued common stock of the Company, or $5.00 per share of common stock of the Company. None of these are including in the diluted earnings calculation, given they are considered antidilutive.

 

In comparison, at December 31, 2018, there were outstanding options to purchase 1,186,132 shares of common stock at between $0.001 and $0.60 per share, (b) rights to purchase warrants to purchase 2,950,000 shares of common stock at between $0.01 and $1.85 per share, and (c) financing warrants to purchase 37,500 shares of common stock at $0.03. As of the date of this report, none of these outstanding options, rights to purchase warrants or financing warrants have been exercised into shares of common stock. However, all of them may be exercised at any time in the sole discretion of the holder except for the rights to purchase warrants to purchase 1.25 million shares of our commons stock, are not exercisable until a performance contingency is met.

 

Recent Accounting PronouncementsIn December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes, eliminates certain exceptions to the general principles in Topic 740 and clarifies certain aspects of the current guidance to improve consistent application among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021 and interim periods within annual periods beginning after December 15, 2022, though early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. The Company is currently evaluating the impact of ASU 2019-12 on its financial statements.

 

In August 2018, the FASB issued ASU 2018-15, “Intangibles - Goodwill and Other - Internal Use Software (Subtopic 250-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs for internal-use software. The accounting for any hosting contract is unchanged. ASU 2018-15 is effective on January 1, 2020 with early adoption permitted, including adoption in any interim period. The Company is currently evaluating the impact of ASU 2019-12 on its financial statements.

 

Off Balance Sheet Arrangements – We have no off balance sheet arrangements.

v3.20.1
Note 2 - Risks and Uncertainties
12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 2 - Risks and Uncertainties

NOTE 2 - RISKS AND UNCERTAINTIES

 

Going Concern – The Company has a history of recurring losses which have resulted in an accumulated deficit of $15,392,552 as of December 31, 2019. During the year ended December 31, 2019, the Company recognized a net loss of $1,236,105.

 

As of December 31, 2019, the Company did not have any business or any sources of revenue. As a result, there is substantial doubt that the Company will be able to continue as a going concern. Bankruptcy of the Company at some point in the future is a possibility. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

The Company currently has no revenue-generating subsidiaries. Management plans to sustain the Company as a going concern by taking the following actions: (1) acquiring and/or developing profitable businesses that will create positive income from operations; and/or (2) completing private placements of the Company’s common stock and/or preferred stock. Management believes that by taking these actions, the Company will be provided with sufficient future operations and cash flow to continue as a going concern. However, there can be no assurances or guarantees whatsoever that the Company will be successful in consummating such actions on acceptable terms, if at all. Moreover, any such actions can be expected to result in substantial dilution to the existing shareholders of the Company.

 

The Company’s investments in Ablis, Bendistillery and Bend Spirits made the Company a minority owner of these companies. As a minority owner, the Company is not able to recognize any portion of Ablis’, Bendistillery’s or Bend Spirits’ revenues or earnings in the Company’s financial statements. The Company monitors its investments in Ablis, Bendistillery and Bend Spirits, and from time to time and will evaluate whether there has been a potential impairment of value.

v3.20.1
Note 3 - The Company's Investments In Ablis, Bendistillery And Bend Spirits
12 Months Ended
Dec. 31, 2020
Notes to Financial Statements  
Note 3 - The Company’s Investments In Ablis, Bendistillery And Bend Spirits

NOTE 3 – THE COMPANY’S INVESTMENTS IN ABLIS, BENDISTILLERY AND BEND SPIRITS

 

On April 30, 2019, the Company purchased 4.99% of the common stock of each of Ablis Holding Company, Bendistillery Inc., and Bend Spirits, Inc. for an aggregate purchase price of $1,896,200. The Company’s investments in Ablis, Bendistillery and Bend Spirits made the Company a minority owner of these companies. As a minority owner, the Company will not be able to recognize any portion of Ablis’, Bendistillery’s or Bend Spirits’ revenues or earnings in the Company’s financial statements.

 

Pursuant to US GAAP, the Company is obligated to periodically review its investments. The Company has limited ability to comment on these companies’ operations and financial performance. The Company’s ability to review the financial performance of its investment in these companies is limited: the financial statements of these companies are not audited; the Company is not active in the management of these companies; and these companies have not held meetings of their boards of directors since the closing of our investment. Consequently, the Company’s assessment of these companies is inherently limited to infrequent and relatively brief conversations with officers of these companies, and to reviews of unaudited financial statements that are delivered to us on an irregular basis.

 

Based on the financial and non-financial information regarding the year ended December 31, 2019, that the management of Ablis, Bendistillery and Bend Spirits provided to the Company in a conference call held on March 9, 2020, the Company has concluded that an impairment of its investment in these companies as of December 31, 2019 is not warranted. The factors that led the Company to the conclusion that an impairment of its investment in these companies has of December 31, 2019 is not warranted includes, among other things: positive sales trends during recent months; indications of the Companies’ ability to maintain profitability; and certain initiatives that are being undertaken by these companies in regard to leadership, sales representatives, and product distribution and pricing.

v3.20.1
Note 4 - Notes Receivable
12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 4 - Notes Receivable

NOTE 4 – NOTES RECEIVABLE

 

CBD Lion LLC

 

On August 8, 2019, the Company made an unsecured $300,000 loan to Lion (the “Loan”) evidenced by a promissory note (the “Note”) in connection with the proposed Merger Agreement with Lion. Per the terms of the Note, if the Transaction did not close and the merger agreement were terminated, then the Loan was to be repaid by Lion to the Company in six equal monthly installments of principal, together with accrued interest at the rate of 6% per year, with the first such installment due and payable by Lion to the Company on the first day of the first calendar month following the termination of the merger agreement. The Merger Agreement was terminated by the Company on November 14, 2019 and the Note became payable. During December 2019, the principal of the Note was repaid by Lion down to $200,000, and Lion also paid the accrued interest on the Note of $6,945.

 

Due to termination of the Merger Agreement, and per Section 5.15(b) of the Merger Agreement, as of December 31, 2019 the Company owed CBD Lion $31,500 for reimbursement of professional fees related to the audit of CBD Lion.

 

This left Lion with a net balance owed to the Company of $168,500 as of December 31, 2019. In March 2020, Lion and the Company agreed that the repayment of such $168,500 will be made in eleven equal monthly installments of principal due and payable by Lion to the Company on the first day of each calendar month starting on April 1, 2020, and that no additional interest will accrue. Imputed interest on the remaining amounts owed by Lion to the Company will be evaluated during the first quarter of 2020.

 

The William Noyes Webster Foundation, Inc.

 

The Foundation, a non-profit Massachusetts corporation, has received a provisional registration from the Commonwealth of Massachusetts to own and operate a medical marijuana cultivation facility in Plymouth, Massachusetts, and a medical marijuana dispensary in Dennis, Massachusetts. Jane W. Heatley (“Heatley”) is the founder and a member of the board of directors of the Foundation.

 

Teaming Agreement – The Company believes it is highly likely that the board of directors of the Foundation will only approve contracts that have been negotiated and approved by Heatley. Consequently, on July 8, 2014, the Company entered into a Teaming Agreement (the "Teaming Agreement") with Heatley, in which, among other things: (1) the Company and Heatley agreed to use their respective best efforts, working exclusively together as a team, and not as a partnership or other entity, in order to consummate transactions, agreements, contracts or other arrangements pursuant to which the Company will provide capital and expertise to the Foundation; and (2) Heatley agreed that Heatley shall not, and shall not permit the Foundation to, discuss or negotiate for debt or equity financing, or consulting services or other expertise, from any third party. The Company claims that Heatley violated the Teaming Agreement by discussing and negotiating for debt or equity financing, or consulting services or other expertise, from at least one third party. Heatley claims that the Company violated the Teaming Agreement alleging that the Company failed to lend funds to the Foundation in accordance with the Teaming Agreement. The Company believes Heatley's claim to be baseless. No assurances whatsoever can be made that Heatley will comply with the terms of the Teaming Agreement, nor that the Company will be able to adequately enforce the terms of the Teaming Agreement if it is ever the subject of litigation.

 

Promissory Note – On July 14, 2014, the Foundation signed and delivered to the Company a Secured Promissory Note (the "Note") which is in the stated loan amount of $1,500,000, and is secured by a Security Agreement of even date therewith (the “Security Agreement”). The Note provides that the $1,500,000 loan may be advanced in one or more installments as the Foundation and the Company may mutually agree upon. The Foundation and the Company mutually agreed that the first installment of this loan would be $602,500. Pursuant to instructions from the Foundation, on July 14, 2014, the Company paid $2,500 owed by the Foundation to one of its consultants, and the Company advanced $600,000 directly to the Foundation. The amount and timing of subsequent loan installments under the Note, which could have totaled $897,500, had not yet been mutually agreed upon between the Foundation and the Company as of the date of the Note.

 

Between April and July 2015, the Company loaned an additional $135,350 to the Foundation, evidenced by the Note and secured by the Security Agreement. Following such additional loans, the principal of the loan from the Company to the Foundation, evidenced by the Note and secured by the Security Agreement, is now $737,850. The principal balance outstanding under the Note bore interest at the rate of 12.5% per annum, compounded monthly. It was contemplated that the first payment of accrued interest by the Foundation under the Note would be made as soon after the Foundation commences operations of the Plymouth Cultivation Facility and the Dennis Dispensary as the Foundation's cash flows shall reasonably permit, but in any event no later than one year after the Foundation commences operations. The principal of the Note would be payable in eight consecutive equal quarterly installments, commencing on the last day of the calendar quarter in which the Foundation commences operations. Principal on the Note and related accrued interest would be considered past due if the aforementioned payments were not received by their due dates.

 

Uncollectable Note and Interest Receivable – The Company assessed the collectability of the Note based on the adequacy of the Foundation’s collateral and the Foundation’s capability of repaying the Note according to its terms. Based on this assessment, on September 1, 2015, the Company concluded that Note and interest receivable would not be collectible. As such, the Company wrote off the Note totaling $737,850 and interest receivable totaling $97,427 as bad debt expense on September 1, 2015.

v3.20.1
Note 5 - Transactions with Related Parties
12 Months Ended
Dec. 31, 2019
Related Party Transactions [Abstract]  
Note 5 - Transactions with Related Parties

NOTE 5 – TRANSACTIONS WITH RELATED PARTIES

 

On June 21, 2016, a company affiliated with Gerard M. Jacobs, Chief Executive Officer of Acquired Sales, made a non-interest bearing loan of $4,000 to the Company, which is payable upon demand.

 

At December 31, 2019, there are no expense reimbursements owed to Gerard M. Jacobs. In comparison, at December 31, 2018, there were expense reimbursements owed to Gerard M. Jacobs totaling $24,583.

 

At December 31, 2019, there was a prepaid consulting fee of $7,500 paid to Gerard M. Jacobs. In comparison, at December 31, 2018, there were no prepaid consulting fees paid to Gerard M. Jacobs.

 

At December 31, 2019, there are no independent contractor fees or expense reimbursements owed to William C. Jacobs. In comparison, at December 31, 2018, there were independent contractor fees of $160,000 and expense reimbursements of $4,417 owed to William C. Jacobs totaling $164,417. William C. Jacobs is the son of Gerard M. Jacobs, Chief Executive Officer of Acquired Sales, and the nephew of director James S. Jacobs.

 

Financing Warrants – On July 13, 2018, the Audit Committee, Compensation Committee, and full Board of Directors of AQSP approved by unanimous written consent borrowings by AQSP on the following terms: (1) proceeds of the borrowings will be used to pay professional fees owed to our outside auditors, our stock transfer agent, and our securities counsel, and to pay other obligations of AQSP; (2) the borrowings will be evidenced by promissory notes of AQSP, accruing interest at the rate of 15% annually; (3) the notes will be jointly secured by a first lien security interest in all of the assets of AQSP, pursuant to a security agreement signed by AQSP in favor of the lenders, UCC filings in favor of the lenders, and a pledge to the lenders of the note payable by the William Noyes Webster Foundation Inc. to AQSP; (4) the notes shall be due and payable upon demand by the lenders delivered to AQSP; and (5) for each $1,000 loaned by AQSP on these terms, the lender of such $1,000 shall receive warrants to purchase 1,250 shares of common stock of AQSP, at an exercise price of $0.03 per share, exercisable at the discretion of such lender any time on or before July 16, 2023.

 

As of December 31, 2018, a total of $30,791 had been borrowed by AQSP on such terms, and warrants to purchase 25,000 shares of common stock of AQSP had been issued to Joshua A. Bloom and warrants to purchase 12,500 shares of common stock of AQSP had been issued to Gerard M. Jacobs. These loans were fully repaid by the Company on March 13, 2019.

 

The warrants to purchase common stock that were issued to Joshua A. Bloom and Gerard M. Jacobs on July 16, 2018 and July 18, 2018 were valued using the Black-Scholes valuation model as of the date they were issued. The values of these warrants were fully expensed because the notes were payable upon demand. The expense recognized related to the issuance of the warrants to Joshua A. Bloom on July 16, 2018 was $3,250. Gerard M. Jacobs’ warrants were issued to him on July 18, 2018, and the expense recognized related to the issuance of these warrants was $1,300.

 

The warrants to purchase common stock that were issued to Gerard M. Jacobs on November 8, 2018, and to Joshua A. Bloom on November 12, 2018, were valued using the Black-Scholes valuation model, which incorporated the following assumptions: expected future stock volatility 465%; risk-free interest rates of 2.98% and 2.94%, respectively; dividend yield of 0% and an expected terms of 2.38 years and 2.37 years, respectively. The expected future stock volatility was based on the volatility of Acquired Sales Corp.’s historical stock prices. The risk-free interest rate was based on the U.S. Federal treasury rate for instruments due over the expected term of the warrants. The expected term of each warrant was based on the midpoint between the date the warrant vests and the contractual term of the warrant. The values of the warrants were fully expensed as of the date of issuance because they are payable upon demand. The expense recognized related to the issuance of the warrants to Gerard M. Jacobs on November 8, 2018 was $11,250. The expense recognized related to the issuance of the warrants to Joshua A. Bloom on November 12, 2018 was $21,874.

v3.20.1
Note 6 - Shareholders' Equity
12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 6 - Shareholders' Equity

NOTE 6 – SHAREHOLDERS’ EQUITY

 

Share-Based Compensation – Share-based compensation expense recognized during the years ended December 31, 2019 and 2018 was $874,154 and $72,500, respectively.

 

Share-Based Compensation in 2019


During the year ended December 31, 2019, we issued warrants to purchase a total of 416,942 unregistered shares of our common stock at $1.00 per share to our investment bankers and finders. Using the Black-Scholes valuation model for each issuance, we recorded total share-based compensation expense of $874,154 for the issuances of these warrants.

 

The following is a summary of share-based compensation, stock option and warrant activity as of December 31, 2019 and changes during the year then ended:

 

  Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value
Exercisable Options, Rights to Purchase Warrants to Purchase Common Stock and Financing Warrants Outstanding, December 31, 2018 2,923,632    $ 0.87    4.93    $ 2,410,100   
Financing Warrants Issued During Q1 2019 18,750         
Warrants Granting the Right to Purchase Shares of Common Stock Issued During Q2 2019 410,942         
Options that Expired During Q2 2019 (9,434)        
Rights to Purchase Warrants to Purchase Shares of Common Stock Exercised During Q1 2019 (210,000)        
Warrants Granting the Right to Purchase Shares of Common Stock Issued During Q3 2019 5,400         
Warrants exercised during Q3 2019 (147,021)        
Warrants Granting the Right to Purchase Shares of Common Stock Issued During Q4 2019 600         
Exercisable Options, Rights to Purchase Warrants to Purchase Common Stock and Financing Warrants Outstanding, December 31, 2019 2,992,869    $ 0.97    3.47    $ 4,570,144   
Outstanding Options, Rights to Purchase Warrants to Purchase Common Stock and Financing Warrants, December 31, 2019 4,242,869    $ 1.23    3.92    $ 5,382,644   

 

 

Share-Based Compensation in 2018

 

On April 1, 2018, we issued to director James S. Jacobs and to William C. Jacobs, then an independent contractor and now our President and CFO, rights to purchase warrants, for an aggregate purchase price of $2.00, an aggregate of 250,000 shares of common stock of the Company (40,000 to James S. Jacobs, and 210,000 to William C. Jacobs), at an exercise price of $0.01 per share, such warrants to be fully vested and to be exercisable on or prior to December 31, 2024. Using the Black-Scholes valuation model, we recorded total stock compensation expense of $72,500 related to these rights to purchase warrants; this consists of $11,600 of stock compensation for the rights to purchase warrants issued to James S. Jacobs, and $60,900 of stock compensation for the rights to purchase warrants issued to William C. Jacobs.

v3.20.1
Note 7 - Income Taxes
12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 7 - Income Taxes

NOTE 7 – INCOME TAXES

 

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”).  The Tax Act reduced the U.S. federal statutory tax rate, broadened the corporate tax base through the elimination or reduction of deductions, exclusions, and credits, limited the ability of U.S. corporations to deduct interest expense, and transitioned to a territorial tax system which allows for the repatriation of foreign earnings to the U.S. with a 100% federal dividends received deduction prospectively. In addition, the Tax Act required a one-time transitional tax on foreign cash equivalents and previously unremitted earnings. Several of the new provisions enacted as part of the Tax Act require clarification and guidance from the U.S. Internal Revenue Service (“IRS”) and Treasury Department. These or other changes in U.S. tax laws could impact our profits, effective tax rate, and cash flows.

 

During the years ended December 31, 2019 and 2018, the Company did not incur any current tax on its continuing operations and there was no deferred tax provision or benefit from continuing operations. At December 31, 2019, the Company has total U.S. Federal net operating loss carry forwards of $2,440,592. $1,968,244 of the total net operating loss carryforwards were generated from tax years prior to January 1, 2018 and expire between December 31, 2029 and December 31, 2037. The remaining $472,349 in net operating loss carryforwards have an indefinite carryforward period and can only offset 80% of taxable income.

 

As of December 31, 2019, the Company had no unrecognized tax benefits that, if recognized, would affect the Company’s effective income tax rate over the next 12 months. The Company currently believes that all significant filing positions are highly certain and that all of its significant income tax filing positions and deductions would be sustained upon audit. Therefore, the Company has no significant reserves for uncertain tax positions and no adjustments to such reserves were required by generally accepted accounting principles. The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. The Company’s tax returns are subject to examination for the years ended December 31, 2014 through 2018. A reconciliation of the amount of tax benefit computed using the U.S. federal statutory income tax rate to the provision for income taxes on continuing operations is as follows:

 

      For the Years Ended
       December 31,
      2019 2018
Tax expenses (benefit) at statutory rate (21%) $ (254,542) $ (46,330)
Non-deductible expenses   $ 2,606  276 
Revision of prior years' deferred tax assets $ 12,600  (30,034)
Change in valuation allowance   $ 239,337  (1,488,585)
Provision for Income Taxes   $ -  $ - 

 

The decrease in the valuation allowance in 2018 was the result of the decrease in corporate tax rate as a result of the Tax Act; had the corporate tax rate stayed the same in 2018 as it were in 2017, the valuation allowance would have increased by $111,835 in 2018. The tax effects of temporary differences and carry forwards that gave rise to the net deferred income tax asset as of December 31, 2019 and 2018 were as follows:

 

    December 31,
    2019 2018
Operating loss carry forwards     $ 484,157      $ 428,393   
Stock-based compensation     1,816,938      2,874,127   
Other     0      233   
Less: Valuation allowance     (2,301,095)     (2,061,891)  
Net Deferred Income Tax Asset   $ -      -   

 

The deferred tax asset valuation allowance increased by $239,204 and decreased by $1,488,585 during the years ended December 31, 2019 and 2018, respectively.

v3.20.1
Note 8 - Contingent Contractual Obligations and Commercial Commitments
12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Note 8 - Contingent Contractual Obligations and Commercial Commitments

NOTE 8 – CONTINGENT CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

 

Payment of Finders’ Fees Related to Ablis

 

The Company has agreed to pay finders’ fees to two finders in regard to the potential purchase of an additional 15% of the stock of Ablis. The Company has agreed to pay those two finders additional warrants to purchase shares of common stock of the Company at an exercise price of $1 per share exercisable at any time on or before April 30, 2024; in the event that the Company closes on the purchase of up to an additional 15% of the common stock of Ablis, then the total amount of such warrants will be 2,814 unregistered shares of common stock of AQSP at an exercise price of $1 per share for each additional one percent of Ablis’ common stock so purchased (a maximum issuance of warrants to purchase an aggregate of 42,210 unregistered shares of common stock of the Company at an exercise price of $1 per share).

 

Previously, on April 30, 2019, the Company issued warrants to purchase 14,042 unregistered shares of common stock of the Company, issued to the two finders (7,021 warrants were issued to each finder) in regard to the purchase of 4.99% of the stock of Ablis. Using the Black-Scholes valuation model, these warrants were valued and expensed as being worth $40,708.

 

Payment of Brokers’ Fees Related to the Sale of Preferred Stock

 

The Company has committed to pay brokers’ fees in regard to the capital being raised for the Company by such brokers in the Company’s private placements of preferred stock, such fee to consist of warrants to purchase unregistered shares of common stock of the Company at an exercise price equal to the conversion price per share of such preferred stock, exercisable at any time during a five year period; the number of such shares will be calculated as six percent of the aggregate capital raised by such brokers in the private placement of preferred stock divided by the conversion price per share of such preferred stock.

 

In 2019, warrants to purchase 402,900 unregistered shares of common stock of the Company were issued to these brokers. Using the Black-Scholes valuation model, these warrants were valued and expensed as being worth $833,446.

 

Potential Issuance of Warrants to Purchase Shares of Common Stock of the Company

 

The Compensation Committee of the Company's Board of Directors may, from time to time, recommend that certain warrants to purchase shares of common stock of the Company should be issued to new or current members of the Company’s Board of Directors, to officers and employees of the Company and its subsidiaries, or to members of any advisory board or consultants to the Company.

 

Amounts Payable to Gerard M. Jacobs and William C. Jacobs

 

The Company’s CEO Gerard M. Jacobs runs the Company’s operations on a part-time basis and is compensated with equity. Gerard M. Jacobs has not historically received cash compensation, and, historically, the Company’s President and CFO William C. “Jake” Jacobs has worked for $5,000 per month. Effective as of June 19, 2019 through the earlier of the closing of the Company’s acquisition of CBD Lion LLC, which is now terminated or the closing of the Company’s acquisition of Warrender Enterprise Inc. d/b/a Lifted Made (formerly d/b/a Lifted Liquids) (“Lifted”), the Company has agreed to pay Gerard M. Jacobs and William C. “Jake” Jacobs consulting fees of $7,500 and $5,000 per month, respectively. In addition, upon the closing of the acquisition described herein, their salaries, equity incentives, expense reimbursements and bonuses will increase. There are also to be significant bonuses awarded to Gerard M. Jacobs and William C. “Jake” Jacobs in the event that the Company closes on the acquisition of Lifted, and in the event that the Company raises $15 million and $25 million, as described in the current report on Form 8-K, and its exhibit, filed with the SEC on or about June 25, 2019. Please note that as of December 31, 2019, the Company had not yet closed on its acquisition of Lifted, and the Company had not raised $15 million and $25 million, so no accruals for the bonuses triggered by these events had been made. As of March 22, 2020, the Company has closed on the acquisition of Lifted, and the bonuses have been accrued for but have not yet paid. The Company has not yet raised $15 million or $25 million.

 

Professional Contracts

 

In June 2019, the Company executed annual engagement contracts with its stock transfer agent and its securities attorney; the Company has a prepaid balance with its stock transfer agent.

v3.20.1
Note 9 - Subsequent Events
12 Months Ended
Dec. 31, 2019
Subsequent Events [Abstract]  
Note 9 - Subsequent Events

NOTE 9 – SUBSEQUENT EVENTS

 

Subsequent to the 12 month period ended December 31, 2019, all necessary Board approvals, Board Investment Committee approvals and stockholder approvals for the Lifted transaction were given on January 4, 2020, and January 10, 2020, respectively.

 

Acquisition of 100% of Warrender Enterprise Inc. d/b/a Lifted Made (formerly d/b/a Lifted Liquids)

 

On February 24, 2020 we closed on the acquisition of 100% of the ownership of CBD-infused products maker Warrender Enterprise Inc. d/b/a Lifted Made (formerly d/b/a Lifted Liquids) of Zion, Illinois (the “Merger”), for consideration of (1) $3,750,000 in cash, (2) $3,750,000 in the form of a secured promissory note, (3) 3,900,455 shares of unregistered common stock of the Company (the "Stock Consideration"), (4) 645,000 shares of unregistered common stock of the Company that constitute deferred contingent compensation to be issued and delivered to certain persons specified by Nicholas S. Warrender in a schedule delivered by Nicholas S. Warrender to the Company at the closing of the Merger, and (5) warrants to purchase an aggregate of 1,820,000 shares of unregistered common stock of the Company at an exercise price of $5.00 per share that will be issued and delivered to certain persons specified by Nicholas S. Warrender in a schedule delivered by Nicholas S. Warrender to the Company at the closing of the Merger.

 

Pursuant to the Merger, Lifted Liquids, Inc. d/b/a Lifted Made, an Illinois corporation ("Lifted" or "Lifted Made"), is now operating as a wholly-owned subsidiary of the Company, led by Nicholas S. Warrender as Lifted's CEO and also as Vice Chairman and Chief Operating Officer of Acquired Sales.

 

Nicholas S. Warrender shall, subject to certain conditions, enjoy so-called “piggyback registration rights” and "demand registration rights" in regard to the Stock Consideration, pursuant to a Registration Rights Agreement.

 

From the date of acquisition (February 24, 2020) on, Lifted will be fully consolidated within the Company’s financial statements.

 

Remaining Payment Obligations of CBD Lion to the Company

 

On August 8, 2019, the Company made an unsecured $300,000 loan to Lion (the “Loan”) evidenced by a promissory note (the “Note”) in connection with the proposed Merger Agreement with Lion. Per the terms of the Note, if the Transaction did not close and the merger agreement were terminated, then the Loan was to be repaid by Lion to the Company in six equal monthly installments of principal, together with accrued interest at the rate of 6% per year, with the first such installment due and payable by Lion to the Company on the first day of the first calendar month following the termination of the merger agreement. The Merger Agreement was terminated by the Company on November 14, 2019 and the Note became payable. During December 2019, the principal of the Note was repaid by Lion down to $200,000, and Lion also paid the accrued interest on the Note of $6,945.

 

Due to termination of the Merger Agreement, and per Section 5.15(b) of the Merger Agreement, as of December 31, 2019 the Company owed CBD Lion $31,500 for reimbursement of professional fees related to the audit of CBD Lion.

 

This left Lion with a net balance owed to the Company of $168,500 as of December 31, 2019. In March 2020, Lion and the Company agreed that the repayment of such $168,500 will be made in eleven equal monthly installments of principal due and payable by Lion to the Company on the first day of each calendar month starting on April 1, 2020, and that no additional interest will accrue. Imputed interest on the remaining amounts owed by Lion to the Company will be evaluated during the first quarter of 2020.

 

Payment of Dividends to Holders of Series A Preferred Stock

 

Between February 28, 2020 and March 21, 2020, the Company made payments of dividends totaling $89,700 to holders of the Company’s Series A Convertible Preferred Stock.

v3.20.1
Note 1 - Basis of Presentation and Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2019
Policy Text Block [Abstract]  
Basis of Presentation

Basis of PresentationAcquired Sales Corp. (hereinafter sometimes referred to as “Acquired Sales”, the “Company”, “AQSP”, “Acquired”, the “Company”, “we”, “us”, “our”, etc.) was organized under the laws of the State of Nevada on January 2, 1986.

 

Our business involves acquiring all or a portion of operating businesses involving the manufacture, sale and distribution of cannabinoid-infused products such as beverages, lotions, oils, hemp joints and cigarettes, tinctures, bath bombs, balms, body washes, gummies, food, other edibles, and non-prescription cannabinoid formulations (a “Canna-Infused Products Company”). In order to consummate a particular acquisition of a Canna-Infused Products Company, management of the Company is open-minded to the concept of also acquiring all or a portion of one or more operating businesses and/or assets that are related to such Canna-Infused Products Company, for example operating businesses and/or assets involving distilled spirits, beer, wine, paraphernalia and real estate.

 

To date, we have acquired 100% of the ownership interests in one Canna-Infused Products Company d/b/a Lifted Made, 4.99% of the ownership interests in a second Canna-Infused Products Company called Ablis Holding Company ("Ablis"), and 4.99% of the ownership interests in two other businesses that manufacture distilled spirits called Bendistillery Inc. ("Bendistillery") and Bend Spirits, Inc. ("Bend Spirits").

 

For more information, please refer to “Description of the Business of Acquired Sales Corp.” and to "The Lifted Made Business" under the section “ITEM 1. BUSINESS” above.

Use of Estimates

Use of Estimates – The preparation of financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) typically requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions. Key estimates in these financial statements include the allowance for doubtful accounts, inventory write-downs, estimated useful lives of property, plant and equipment, valuation allowance on deferred income tax assets and the fair value of stock options.

Cash and Cash Equivalents

Cash and Cash Equivalents – Cash and cash equivalents as of December 31, 2019 and 2018 included cash on-hand. Cash equivalents are considered all accounts with an original maturity date within 90 days. Cash equivalents are carried at cost.

Notes Receivable

Notes Receivable – Notes receivable are classified on the balance sheet based on their maturity date.

Fair Value of Financial Instruments

Fair Value of Financial Instruments – The carrying amount of the financial instruments, which principally include cash, notes receivables, accounts payable and accrued expenses, approximates fair value due to the relative short maturity of such instruments.

 

Accounting Standards Codification (“ASC”) 820 defines fair value, establishes a framework for measuring fair value under U.S. GAAP and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair-value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value as follows:

 

Level 1 – Quoted prices in active markets for identical assets or liabilities

 

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quotes prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Investments

Investments – Under US GAAP, the Company uses the cost method to account for our minority equity ownership interests in businesses in which the Company owns less than 20% of equity ownership, and have no substantial influence over the management of the businesses. Under the cost method of accounting, the Company reports the historical costs of the investments as assets on its balance sheet. However, US GAAP does not permit the consolidation of its financial statements with the financial statements of companies in which the Company owns minority equity ownership interests. US GAAP also requires the Company to record these types of investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. As such, the Company will not be allowed to consolidate into its financial statements any portion of the revenues, earnings or assets of companies in which it owns minority equity ownership interests such as Ablis, Bendistillery and Bend Spirits. Moreover, even if there is evidence that the fair market values of the investments have increased above their historical costs, US GAAP does not allow increasing the recorded values of the investments. Under US GAAP, the only adjustments that may be made to the historical costs of the investments are write downs of the values of the investments, which must be made if there is evidence that the fair market values of the investments have declined to below the recorded historical costs.

Income Taxes

Income Taxes – Provisions for income taxes are based on taxes payable or refundable for the current year and deferred income taxes. Deferred income taxes are provided on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements and on tax carry forwards. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. A valuation allowance is provided against deferred income tax assets when it is not more likely than not that the deferred income tax assets will be realized.

Basic and Diluted Earnings (Loss) Per Common Share

Basic and Diluted Earnings (Loss) Per Common Share – Basic earnings (loss) per common share is determined by dividing earnings (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per common share is calculated by dividing earnings (loss) by the weighted-average number of common shares and dilutive common share equivalents outstanding during the period. When dilutive, the incremental potential common shares issuable upon exercise of stock options and warrants are determined by the treasury stock method. The following table summarizes the calculations of basic and diluted earnings (loss) per common share for the years ended December 31, 2019 and 2018:

 

    For the Year Ended
    December 31,
    2019   2018
Net Loss   $ (1,236,105)     $ (220,621)  
Weighted-Average Shares Outstanding   2,577,349      2,369,648   
         
Basic and Diluted Earnings Loss per Share   $ (0.48)     $ (0.09)  

 

At December 31, 2019, there were outstanding options to purchase 1,586,619 shares of common stock at between $0.001 and $2.00 per share, (b) rights to purchase warrants to purchase 2,625,000 shares of common stock at between $0.01 and $1.85 per share, and (c) financing warrants to purchase 31,250 shares of common stock at $0.03. As of the date of this report, none of these outstanding options, rights to purchase warrants or financing warrants have been exercised into shares of common stock. However, all of them may be exercised at any time in the sole discretion of the holder except for the rights to purchase warrants to purchase 1.25 million shares of our commons stock, are not exercisable until a performance contingency is met.

 

At December 31, 2019, the Company had Series A Preferred Stock outstanding convertible into 6,615,000 shares of common stock. In addition, the Company has accepted subscriptions from four accredited investors to purchase 100,000 shares of Series B Preferred Stock for an aggregate purchase price of $500,000 in cash, convertible at the option of the holder into 100,000 shares of newly issued common stock of the Company, or $5.00 per share of common stock of the Company. None of these are including in the diluted earnings calculation, given they are considered antidilutive.

 

In comparison, at December 31, 2018, there were outstanding options to purchase 1,186,132 shares of common stock at between $0.001 and $0.60 per share, (b) rights to purchase warrants to purchase 2,950,000 shares of common stock at between $0.01 and $1.85 per share, and (c) financing warrants to purchase 37,500 shares of common stock at $0.03. As of the date of this report, none of these outstanding options, rights to purchase warrants or financing warrants have been exercised into shares of common stock. However, all of them may be exercised at any time in the sole discretion of the holder except for the rights to purchase warrants to purchase 1.25 million shares of our commons stock, are not exercisable until a performance contingency is met.

Recent Accounting Pronouncements

Recent Accounting PronouncementsIn December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes, eliminates certain exceptions to the general principles in Topic 740 and clarifies certain aspects of the current guidance to improve consistent application among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021 and interim periods within annual periods beginning after December 15, 2022, though early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. The Company is currently evaluating the impact of ASU 2019-12 on its financial statements.

 

In August 2018, the FASB issued ASU 2018-15, “Intangibles - Goodwill and Other - Internal Use Software (Subtopic 250-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs for internal-use software. The accounting for any hosting contract is unchanged. ASU 2018-15 is effective on January 1, 2020 with early adoption permitted, including adoption in any interim period. The Company is currently evaluating the impact of ASU 2019-12 on its financial statements.

Off Balance Sheet Arrangements

Off Balance Sheet Arrangements – We have no off balance sheet arrangements.

v3.20.1
Note 1 - Basis of Presentation and Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2019
Table Text Block Supplement [Abstract]  
Schedule of Earnings Per Share, Basic and Diluted

The following table summarizes the calculations of basic and diluted earnings (loss) per common share for the years ended December 31, 2019 and 2018:

 

    For the Year Ended
    December 31,
    2019   2018
Net Loss   $ (1,236,105)     $ (220,621)  
Weighted-Average Shares Outstanding   2,577,349      2,369,648   
         
Basic and Diluted Earnings Loss per Share   $ (0.48)     $ (0.09)  
v3.20.1
Note 6 - Shareholders' Equity (Tables)
12 Months Ended
Dec. 31, 2019
Table Text Block Supplement [Abstract]  
Schedule of Share-based Compensation, Stock Options and Warrant Activity

The following is a summary of share-based compensation, stock option and warrant activity as of December 31, 2019 and changes during the year then ended:

 

  Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value
Exercisable Options, Rights to Purchase Warrants to Purchase Common Stock and Financing Warrants Outstanding, December 31, 2018 2,923,632    $ 0.87    4.93    $ 2,410,100   
Financing Warrants Issued During Q1 2019 18,750         
Warrants Granting the Right to Purchase Shares of Common Stock Issued During Q2 2019 410,942         
Options that Expired During Q2 2019 (9,434)        
Rights to Purchase Warrants to Purchase Shares of Common Stock Exercised During Q1 2019 (210,000)        
Warrants Granting the Right to Purchase Shares of Common Stock Issued During Q3 2019 5,400         
Warrants exercised during Q3 2019 (147,021)        
Warrants Granting the Right to Purchase Shares of Common Stock Issued During Q4 2019 600         
Exercisable Options, Rights to Purchase Warrants to Purchase Common Stock and Financing Warrants Outstanding, December 31, 2019 2,992,869    $ 0.97    3.47    $ 4,570,144   
Outstanding Options, Rights to Purchase Warrants to Purchase Common Stock and Financing Warrants, December 31, 2019 4,242,869    $ 1.23    3.92    $ 5,382,644   
v3.20.1
Note 7 - Income Taxes (Tables)
12 Months Ended
Dec. 31, 2019
Table Text Block Supplement [Abstract]  
Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the amount of tax benefit computed using the U.S. federal statutory income tax rate to the provision for income taxes on continuing operations is as follows:

 

      For the Years Ended
       December 31,
      2019 2018
Tax expenses (benefit) at statutory rate (21%) $ (254,542) $ (46,330)
Non-deductible expenses   $ 2,606  276 
Revision of prior years' deferred tax assets $ 12,600  (30,034)
Change in valuation allowance   $ 239,337  (1,488,585)
Provision for Income Taxes   $ -  $ - 
Schedule of Deferred Tax Assets

The tax effects of temporary differences and carry forwards that gave rise to the net deferred income tax asset as of December 31, 2019 and 2018 were as follows:

 

    December 31,
    2019 2018
Operating loss carry forwards     $ 484,157      $ 428,393   
Stock-based compensation     1,816,938      2,874,127   
Other     0      233   
Less: Valuation allowance     (2,301,095)     (2,061,891)  
Net Deferred Income Tax Asset   $ -      -   
v3.20.1
Note 1 - Basis of Presentation and Significant Accounting Policies (Details) - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Apr. 30, 2019
Apr. 02, 2018
Convertible Preferred Stock, Shares Reserved for Future Issuance 6,615,000      
Stock issued for cash , Value $ 100,000      
Stock issued for cash , Shares 500,000      
Share Price $ 5.00     $ 2.00
Ablis        
Ownership interests     4.99%  
Bendistillery        
Ownership interests     4.99%  
Stock Option        
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 1,586,619 1,186,132    
Warrant [Member]        
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 2,625,000 2,950,000    
Financing Warrant        
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 31,250 37,500    
v3.20.1
Note 1 - Basis of Presentation and Significant Accounting Policies: Basic and Diluted Earnings (Loss) Per Common Share: Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Text Block [Abstract]    
Net Loss $ (1,236,105) $ (220,621)
Weighted Average Shares Outstanding 2,577,349 2,369,648
Basic and Diluted Earnings Loss per Share $ (0.48) $ (0.09)
v3.20.1
Note 2 - Risks and Uncertainties (Details) - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Text Block [Abstract]    
Accumulated deficit $ (15,392,552) $ (14,005,689)
Net Loss $ (1,236,105) $ (220,621)
v3.20.1
Note 3 - The Company's Investments In Ablis, Bendistillery And Bend Spirits (Details) - Bendistillery
Apr. 30, 2019
USD ($)
Ownership interests 4.99%
Purchse price $ 1,896,200
v3.20.1
Note 4 - Notes Receivable (Details) - USD ($)
1 Months Ended 4 Months Ended
Aug. 08, 2019
Sep. 01, 2015
Dec. 31, 2019
Jul. 31, 2014
Jul. 31, 2015
Dec. 31, 2015
Jul. 14, 2014
William Noyes Webster Foundation Inc | Secured Promissory Note              
Debt Instrument, Face Amount             $ 1,500,000
Note receivable payment       $ 602,500 $ 135,350    
Advances       600,000      
Note Receivable           $ 737,850  
Debt Instrument, Interest Rate, Stated Percentage           12.50%  
Bad debt expense   $ 737,850          
William Noyes Webster Foundation Inc | Secured Promissory Note | Payment To Consultant              
Advances       $ 2,500      
William Noyes Webster Foundation Inc | Secured Promissory Note | Unfunded Portion of Note              
Debt Instrument, Face Amount             $ 897,500
William Noyes Webster Foundation Inc | Interest receivable {1}              
Bad debt expense   $ 97,427          
CBD Lion              
Advances     $ 168,500        
Loan $ 300,000            
Interest rate 6.00%            
Payment of loan     200,000        
Accrued interest     6,945        
Reimbursement of professional fees     $ 31,500        
v3.20.1
Note 5 - Amounts Owed To Related Parties (Details) - USD ($)
1 Months Ended 3 Months Ended
Jul. 13, 2019
Nov. 12, 2018
Nov. 08, 2018
Jul. 18, 2018
Jul. 16, 2018
Mar. 31, 2019
Sep. 30, 2018
Dec. 31, 2019
Dec. 31, 2018
Jun. 21, 2016
Issuance of warrants to purchase common stock           $ 26,773 $ 4,550      
Gerard M. Jacobs                    
Due to Other Related Parties, Current                   $ 4,000
Due to Related Parties, Current               $ 0 $ 24,583  
Prepaid consulting fee               7,500 0  
William C. Jacobs                    
Due to Related Parties, Current               0 164,417  
William C. Jacobs | Independent contractor fees                    
Due to Related Parties, Current               0 160,000  
William C. Jacobs | Expense reimbursements                    
Due to Related Parties, Current               $ 0 4,417  
Warrant 1 | Gerard M. Jacobs                    
Warrants issued       12,500            
Issuance of warrants to purchase common stock     $ 11,250 $ 1,300            
Volatility rate     465.00%              
Risk-free interest rates     2.98%              
Dividend yield     0.00%              
Expected terms     2 years 4 months 17 days              
Warrant 1 | Joshua A. Bloom                    
Warrants issued         25,000          
Issuance of warrants to purchase common stock   $ 21,874     $ 3,250          
Volatility rate   465.00%                
Risk-free interest rates   2.94%                
Dividend yield   0.00%                
Expected terms   2 years 4 months 13 days                
Financing warrants                    
Debt Instrument, Payment Terms (1) proceeds of the borrowings will be used to pay professional fees owed to our outside auditors, our stock transfer agent, and our securities counsel, and to pay other obligations of AQSP; (2) the borrowings will be evidenced by promissory notes of AQSP, accruing interest at the rate of 15% annually; (3) the notes will be jointly secured by a first lien security interest in all of the assets of AQSP, pursuant to a security agreement signed by AQSP in favor of the lenders, UCC filings in favor of the lenders, and a pledge to the lenders of the note payable by the William Noyes Webster Foundation Inc. to AQSP; (4) the notes shall be due and payable upon demand by the lenders delivered to AQSP; and (5) for each $1,000 loaned by AQSP on these terms, the lender of such $1,000 shall receive warrants to purchase 1,250 shares of common stock of AQSP, at an exercise price of $0.03 per share, exercisable at the discretion of such lender any time on or before July 16, 2023.                  
Long-term Debt, Gross                 $ 30,791  
v3.20.1
Note 6 - Shareholders' Equity (Details) - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Apr. 02, 2018
Stock compensation expense $ 874,154 $ 72,500  
Class of Warrant, Outstanding     250,000
Purchase price per share $ 5.00   $ 2.00
Warrant [Member]      
Stock compensation expense $ 874,154    
Purchase of warrants 416,942    
Share Price $ 1.00    
William C. Jacobs      
Class of Warrant, Outstanding     210,000
Class of Warrant, Exercise Price of Warrants     $ 0.01
James S. Jacobs      
Stock compensation expense   11,600  
Class of Warrant, Outstanding     40,000
Class of Warrant, Exercise Price of Warrants     $ 0.01
Joshua A. Bloom      
Stock compensation expense   $ 60,900  
v3.20.1
Note 6 - Shareholders' Equity: Schedule of Share-based Compensation, Stock Options and Warrant Activity (Details) - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Text Block [Abstract]    
Exercisable Options, Rights to Purchase Warrants and Financing Warrants Outstanding at beginning 2,923,632  
Financing Warrants Issued During Period 18,750  
Warrants Granting the Right to Purchase Shares of Common Stock Issued During Period 410,942  
Options Expired During Period (9,434)  
Rights to Purchase Warrants to Purchase Shares of Common Stock Exercised During Period (210,000)  
Warrants Granting the Right to Purchase Shares of Common Stock Issued During Period 5,400  
Warrants exercised during period (147,021)  
Warrants Granting the Right to Purchase Shares of Common Stock Issued During Period 600  
Exercisable Options, Rights to Purchase Warrants and Financing Warrants Outstanding at end 2,992,869 2,923,632
Outstanding Options, Rights to Purchase Warrants to Purchase Common Stock and Financing Warrants 4,242,869  
Exercisable Options, Rights to Purchase Warrants and Financing Warrants, Weighted Average Exercise Price at beginning $ 0.87  
Exercisable Options, Rights to Purchase Warrants and Financing Warrants, Weighted Average Exercise Price at end 0.97 $ 0.87
Outstanding Options, Rights to Purchase Warrants to Purchase Common Stock and Financing Warrants, Weighted Average Exercise Price $ 1.23  
Exercisable Options, Rights to Purchase Warrants and Financing Warrants Outstanding, Weighted Average Remaining Term 3 years 5 months 20 days 4 years 11 months 4 days
Outstanding Options, Rights to Purchase Warrants to Purchase Common Stock and Financing Warrants, Weighted Average Remaining Term 3 years 11 months 1 day  
Exercisable Options, Rights to Purchase Warrants and Financing Warrants, Intrinsic Value $ 2,410,100  
Exercisable Options, Rights to Purchase Warrants and Financing Warrants, Intrinsic Value 4,570,144 $ 2,410,100
Outstanding Options, Rights to Purchase Warrants to Purchase Common Stock and Financing Warrants, Intrinsic Value $ 5,382,644  
v3.20.1
Note 7 - Income Taxes (Details) - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Net Operating Loss Carryforwards $ 2,440,592  
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount $ 239,204 $ (1,488,585)
Increase in valuation allowance   $ 111,835
Minimum    
Operating Loss Carryforwards, Expiration Date Dec. 31, 2029  
Maximum    
Operating Loss Carryforwards, Expiration Date Dec. 31, 2037  
v3.20.1
Note 7 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Text Block [Abstract]    
Tax expenses (benefit) at statutory rate (21%) $ (254,542) $ (46,330)
Non-deductible expenses 2,606 276
Revision of prior years' deferred tax assets 12,600 (30,034)
Change in valuation allowance 239,337 (1,488,585)
Provision for Income Taxes $ 0 $ 0
v3.20.1
Note 7 - Income Taxes: Schedule of Deferred Tax Assets (Details) - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Text Block [Abstract]    
Operating loss carry forwards $ 484,157 $ 428,393
Stock-based compensation 1,816,938 2,874,127
Other 0 233
Less: Valuation allowance (2,301,095) (2,061,891)
Net Deferred Income Tax Asset $ 0 $ 0
v3.20.1
Note 8 - Contingent Contractual Obligations and Commercial Commitments (Details)
1 Months Ended 12 Months Ended
Apr. 30, 2019
USD ($)
shares
Dec. 31, 2019
USD ($)
$ / shares
shares
Dec. 31, 2018
USD ($)
Consulting fees   $ 112,500 $ 60,000
Warrant [Member]      
Purchase of warrants | shares   416,942  
CBD Lion      
Capital raise   $ 15,000,000  
Warrender Enterprise      
Capital raise   $ 25,000,000  
Ablis      
Ownership interests 4.99%    
Purchase of warrants | shares 14,042    
Value of warrants purchsed $ 40,708    
Ablis      
Percntage of common stock purchase   0.15  
Additional Percntage of common stock purchase   15.00%  
Additional Warrants to purchase | shares   2,814  
Maximum warrants issued | shares   42,210  
Warrant Exercise price | $ / shares   $ 1.00  
William C. Jacobs      
Consulting fees   $ 5,000  
Cash compensation received   5,000  
James S. Jacobs      
Consulting fees   $ 7,500  
Brokers | Warrant [Member]      
Purchase of warrants | shares   402,900  
Value of warrants purchsed   $ 833,446  
v3.20.1
Note 9 - Subsequent Events (Details) - USD ($)
1 Months Ended
Aug. 08, 2019
Mar. 21, 2020
Feb. 24, 2020
Dec. 31, 2019
CBD Lion        
Loan $ 300,000      
Interest rate 6.00%      
Payment of loan       $ 200,000
Accrued interest       6,945
Reimbursement of professional fees       31,500
Advances       $ 168,500
Subsequent Event | Series A Preferred Stock [Member]        
Payment of Dividends   $ 89,700    
Subsequent Event | Warrender Enterprise        
Cash     $ 3,750,000  
Secured promissory note     $ 3,750,000  
Stock Consideration     3,900,455  
Unregistered common stock     645,000  
Purchase of warrants     1,820,000  
Share Price     $ 5.00