0001493152-20-020829 | 10-Q | XBRL Viewer

Schedule of Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Raw materials and packaging	$ 6,354	$ 4,261
Finished products	3,082	6,247
Total	$ 9,436	$ 10,508

Condensed Balance Sheets - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Condensed Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Current assets:
Cash	$ 875		$ 875		$ 913
Accounts receivable, net of allowance for doubtful accounts and returns and discounts of $194 and $375, respectively	4,647		4,647		2,099
Receivable from related party	391		391		356
Inventory, net of reserve for obsolescence of $224 and $646, respectively	9,436		9,436		10,508
Prepaid expenses and other current assets	704		704		420
Total current assets	16,053		16,053		14,296
Property and equipment, net of accumulated depreciation of $316 and $482, respectively	984		984		1,053
Equipment held for sale, net of impairment reserves of $96 and $96, respectively	67		67		67
Intangible assets	613		613		576
Total assets	17,717		17,717		15,992
Current liabilities:
Accounts payable	5,441		5,441		5,539
Accrued expenses	835		835		646
Revolving line of credit	4,272		4,272		3,177
Current portion of note payable	470		470
Convertible note to a related party	5,128		5,128
Current portion of leases payable	114		114		49
Total current liabilities	16,260		16,260		9,411
Leases payable, less current portion	592		592		737
Convertible note to a related party					4,689
Note payable	300		300
Warrant liability	7		7		8
Total liabilities	17,159		17,159		14,845
Stockholders’ equity:
Series A Convertible Preferred stock, $10 par value, 500,000 shares authorized, 9,411 shares issued and outstanding	94		94		94
Common stock, $.0001 par value, 100,000,000 and 100,000,000 shares authorized, respectively; 62,960,570 and 47,595,206 shares issued and outstanding, respectively	6		6		5
Common stock issuable, 350,000 shares at September 30, 2020	285		285
Additional paid in capital	83,646		83,646		77,596
Accumulated deficit	(83,473)		(83,473)		(76,548)
Total stockholders’ equity	558	$ (2,208)	558	$ (2,208)	1,147
Total liabilities and stockholders’ equity	17,717		17,717		$ 15,992
Net Sales	10,562	8,740	30,938	26,669
Cost of goods sold	7,176	6,238	21,694	19,390
Gross profit	3,386	2,502	9,244	7,279
Operating expenses:
Delivery and handling expense	2,207	1,902	4,950	4,369
Selling and marketing expense	1,872	2,508	5,382	7,718
General and administrative expense	1,583	2,470	4,872	6,557
Total operating expenses	5,662	6,880	15,204	18,644
Loss from operations	(2,276)	(4,378)	(5,960)	(11,365)
Interest expense	(322)	(318)	(961)	(947)
Change in fair value of warrant liability	8	131	1	23
Net loss	(2,590)	(4,565)	(6,920)	(12,289)
Dividends on Series A Convertible Preferred Stock			(5)	(5)
Net Loss Attributable to Common Stockholders	$ (2,590)	$ (4,565)	$ (6,925)	$ (12,294)
Loss per share – basic and diluted	$ (0.04)	$ (0.14)	$ (0.12)	$ (0.38)
Weighted average number of shares outstanding – basic and diluted	62,940,091	33,716,359	56,706,141	32,179,119

Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net loss	$ (6,920)	$ (12,289)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	56	12
(Gain)/loss on sale of property & equipment		(30)
(Gain)/loss on termination of leases	(6)	2
Amortization of debt discount	290	225
Amortization of right of use assets	89	96
Fair value of vested options	722	1,077
Fair value of vested restricted shares granted to officers	285	520
Decrease in allowance for doubtful accounts	(181)	(400)
Decrease (increase) in inventory reserve	(422)	325
Change in fair value of warrant liability	(1)	(23)
Accrual of interest on convertible note to a related party	439	390
Lease liability	(18)	(10)
Changes in operating assets and liabilities:
Accounts receivable	(2,367)	(1,121)
Inventory	1,495	(2,520)
Prepaid expenses and other assets	(318)	(339)
Accounts payable	(100)	(196)
Accrued expenses	189	(347)
Net cash used in operating activities	(6,768)	(14,628)
Cash flows from investing activities:
Trademark costs	(37)
Proceeds from sale of property and equipment		30
Purchase of property and equipment	(121)	(273)
Net cash used in investing activities	(158)	(243)
Cash flows from financing activities:
Borrowings on line of credit	34,645	42,179
Repayments of line of credit	(33,710)	(42,175)
Capitalization of financing costs	(130)	(130)
Proceeds from note payable	770
Repayment of amounts due to/from officers		195
Principal repayments on capital lease obligation	(11)	(38)
Exercise of options	14
Exercise of warrants		365
Proceeds from sale of common stock	5,310	14,867
Net cash provided by financing activities	6,888	15,263
Net increase in cash	(38)	392
Cash at beginning of period	913	624
Cash at end of period	875	1,016
Supplemental disclosures of cash flow information:
Cash paid for interest	231	408
Non Cash Investing and Financing Activities
Dividends on Series A Convertible Preferred Stock	$ 5	$ 5

Stockholders’ Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	9 Months Ended
	Jul. 02, 2020	Apr. 30, 2020	Sep. 30, 2020	Sep. 30, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]
Issued common stock, value	$ 5
Average market price per share	$ 1.04
Proceeds from exercise of stock options			$ 14
Common shares issued on exercise of options, shares			27,500
Public Offering [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock Issued During Period, Shares, New Issues		15,333,334
Shares Issued, Price Per Share		$ 0.375
Proceeds from Issuance Initial Public Offering		$ 5,310
Preferred Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Issued common stock as dividend to preference shareholder	4,530

Inventory

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Inventory

3. Inventory

Inventory is valued at the lower of cost (first-in, first-out) or net realizable value, and net of reserves is comprised of the following (in thousands):

Schedule of Inventory

	September 30, 2020		December 31, 2019
Raw materials and packaging	$	6,354	$	4,261
Finished products		3,082		6,247
Total	$	9,436	$	10,508

The Company has recorded a reserve for slow moving and potentially obsolete inventory. The reserve at September 30, 2020, and December 31, 2019, was $224 and $646, respectively.

Leases Payable (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Leases Payable (Details Narrative) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Leases [Abstract]
Operating Lease, Expense	$ 45	$ 135	$ 51	$ 134
Lease liabilities	706		706		$ 786
Finance leases liability	27		27		89
Operating leases liability	$ 679		679		$ 697
Finance lease terminated			51
Payments of finance lease liability			11
Payments of operating lease liability			$ 18	$ 10
Weighted average remaining lease term for operating lease	4 years 3 months		4 years 3 months
Weighted average remaining lease term for finance lease	4 months 20 days		4 months 20 days
Weighted average discount rate for operating lease	12.60%		12.60%
Weighted average discount rate for finance lease	10.39%		10.39%

Warrant Liability

9 Months Ended

Sep. 30, 2020

Warrant Liability

Warrant Liability

10. Warrant Liability

Various sales of common stock made by the Company to finance operations have been accompanied by the issuance of warrants. Some of these warrant agreements contain fundamental transaction provisions which may give rise to an obligation of the Company to pay cash to the warrant holders. For accounting purposes, in accordance with ASC 480, Distinguishing Liabilities from Equity, those warrants with fundamental transaction terms are accounted for as liabilities given the terms may give rise to an obligation of the Company to the warrant holders. These liabilities are measured at fair value at each reporting period and the change in the fair value is recognized in earnings in the accompanying Statements of Operations.

The fair value of the warrant liability was determined using the Black-Scholes-Merton option pricing model at September 30, 2020 and December 31, 2019, using the following assumptions:

	September 30, 2020			December 31, 2019

Stock Price	$	0.93		$	0.91
Risk free interest rate		0.80	%		1.95	%
Expected volatility		119.51	%		83.36	%
Expected life in years		0.67			1.42
Expected dividend yield		0	%		0	%
Number of Warrants containing fundamental transaction provisions		138,762			138,762
Fair Value of Warrants	$	7		$	8

The risk-free interest rate is based on rates established by the Federal Reserve Bank. The Company uses the historical volatility of its common stock to estimate its future volatility. The expected life of the warrant is based upon its remaining contractual life. The expected dividend yield reflects that the Company has not paid dividends to its common stockholders in the past and does not expect to do so in the foreseeable future.

The following table sets forth a summary of the changes in the estimated fair value of the warrant liability during the nine months ended September 30, 2020 and 2019:

Schedule of Warrant Liability

	September 30, 2020			September 30, 2019
Beginning Balance	$	8		$	38
Change in fair value		(1	)		(23	)
Ending balance	$	7		$	15

Summary of Non-vested Restricted Stock Activity (Details) - Restricted Stock [Member] $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested Shares, Beginning balance
Number of Issuable Shares, Beginning balance
Fair Value Unvested, Beginning balance \| $
Weighted Average Grant Date Fair Value, Unvested, Beginning balance \| $ / shares
Unvested Shares, Granted	594,740
Number of Issuable Shares, Granted
Fair Value, Granted \| $	$ 508
Weighted Average Grant Date Fair Value, Granted	0.85
Unvested Shares, Vested	(350,000)
Number of Issuable Shares, Vested	350,000
Fair Value, Vested \| $	$ (285)
Weighted Average Grant Date Fair Value, Vested \| $ / shares
Unvested Shares, Issued \| $
Number of Issuable Shares, Issued
Fair Value, Issued \| $
Weighted Average Grant Date Fair Value, Issued
Unvested Shares, Ending balance	244,740
Number of Issuable Shares, Ending balance	350,000
Fair Value, Unvested, Ending balance \| $	$ 223
Weighted Average Grant Date Fair Value, Unvested, Ending balance \| $ / shares	$ 0.85

Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment is comprised of the following (in thousands):

Schedule of Property and Equipment

	September 30, 2020			December 31, 2019
Right-of-use assets under operating leases	$	730		$	730
Right-of-use assets under finance leases		67			179
Computer hardware and software		400			543
Machinery and equipment		103			83
Total cost		1,300			1,535
Accumulated depreciation and amortization		(316	)		(482	)
Net book value	$	984		$	1,053

Schedule of Equipment Held for Sale

Equipment held for sale consists of the following (in thousands):

Schedule of Equipment Held for Sale

	September 30, 2020			December 31, 2019
Equipment held for sale	$	163		$	163
Reserve		(96	)		(96	)
Net book value	$	67		$	67

Schedule of Convertible Notes (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Convertible Note To Related Party
12% Convertible Note Payable	$ 3,400	$ 3,400
Accrued Interest	1,728	1,289
Total obligation	$ 5,128	$ 4,689

Inventory (Tables)

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory is valued at the lower of cost (first-in, first-out) or net realizable value, and net of reserves is comprised of the following (in thousands):

Schedule of Inventory

	September 30, 2020		December 31, 2019
Raw materials and packaging	$	6,354	$	4,261
Finished products		3,082		6,247
Total	$	9,436	$	10,508

Schedule of Warrant Liability Using Assumptions (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019	Apr. 21, 2017
Warrant Liability
Stock Price	$ 0.93	$ 0.91
Risk free interest rate	0.80%	1.95%
Expected volatility	119.51%	83.36%
Expected life in years	8 months 1 day	1 year 5 months 1 day
Expected dividend yield	0.00%	0.00%
Number of Warrants containing fundamental transaction provisions	138,762	138,762	1,416,667
Fair Value of Warrants	$ 7	$ 8

Share-based payments (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Value of restricted shares issued	$ 116	$ 285	$ 405
Stock price		$ 0.93		$ 0.91
Volatility		119.51%		83.36%
Dividend rate		0.00%		0.00%
Risk-free interest rate		0.80%		1.95%
2017 Incentive Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options to be issued		2,067,800
Stock options expiration period		ten years
Fair value of options granted		$ 1,168
Fair value assumptions, expected term		seven years
Volatility		120.00%
Dividend rate		0.00%
Amortized options, vesting at future date		May 20, 2024
Fair value of vested stock option		$ 722	1,077
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price		$ 0.44
Minimum [Member] \| 2017 Incentive Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate		0.56%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price		$ 0.89
Maximum [Member] \| 2017 Incentive Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate		1.63%
Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of option issued		1,732,800
Consultants Board Members and Former Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of option issued		335,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vested immediately		350,000
Number of shares to be vested during period		94,740
Number of options vested		350,000
Number of shares to be vested		75,000
Vesting period		four years
Value of restricted shares issued		$ 508
Number of restricted shares, value		285	$ 477
Aggregate value of unvested compensation		223
Fair value of vested stock option		$ 285
Restricted Stock [Member] \| Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Market price per share		$ 0.81
Restricted Stock [Member] \| Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Market price per share		$ 0.95
Restricted Stock [Member] \| Two Months From The Date Of Grant [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options vested		47,370
Restricted Stock [Member] \| Four Years from the Date of Grant [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options vested		18,750
Restricted Stock [Member] \| Director and Two Executive Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted shares issued		594,740
Share-based Payment Arrangement, Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vested immediately		582,800
Number of shares to be vested during period		575,000
Number of options vested		575,000
Vesting period		four-year vesting period
Aggregate value of unvested compensation		$ 1,594
Stock price		$ 0.93
Outstanding options, intrinsic value		$ 338

Schedule of Warrant Activity (Details)	9 Months Ended
Schedule of Warrant Activity (Details)	Sep. 30, 2020 USD ($) $ / shares shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares Outstanding, Beginning Balance	138,762
Shares Outstanding, Ending Balance	138,762
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares Outstanding, Beginning Balance	6,413,782
Weighted-Average Exercise Price, Outstanding Beginning Balance \| $ / shares	$ 2.06
Weighted-Average Remaining Contractual Terms (Years), Outstanding Beginning Balance	1 year 6 months 7 days
Aggregate Intrinsic Value Shares Outstanding Beginning \| $
Shares, Exercised
Weighted-Average Exercise Price, Exercised \| $ / shares
Shares, Forfeited or expired
Weighted-Average Exercise Price, Forfeited or expired \| $ / shares
Shares Outstanding, Ending Balance	6,413,782
Weighted-Average Exercise Price, Outstanding Ending Balance \| $ / shares	$ 2.06
Weighted-Average Remaining Contractual Terms (Years), Outstanding Ending Balance	9 months 7 days
Aggregate Intrinsic Value Shares Outstanding Ending \| $
Shares Exercisable, Ending Balance	6,413,782
Weighted-Average Exercise Price, Exercisable Ending Balance \| $ / shares	$ 2.06
Weighted-Average Remaining Contractual Terms (Years), Exercisable Ending Balance	9 months 7 days
Aggregate Intrinsic Value Shares Exercisable Ending \| $

Note Payable (Details Narrative) - USD ($) $ in Thousands	Apr. 20, 2020	Sep. 30, 2020
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Note payable		$ 770
Note payable, current		$ 470
PPP Loan Agreement [Member]
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Debt Instrument, Maturity Date	Apr. 20, 2022
Debt Instrument, Interest Rate, Stated Percentage	1.00%
Paycheck Protection Program [Member] \| City National Bank [Member]
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Aggregate amount	$ 770

Stock Warrants

9 Months Ended

Sep. 30, 2020

Stock Warrants

Stock Warrants

13. Stock Warrants

As of September 30, 2020, the Company has issued warrants to purchase an aggregate of 6,413,782 shares of common stock. The Company’s warrant activity during the nine months ended September 30, 2020 is as follows:

Schedule of Warrant Activity

Shares
Weighted-

Average Exercise Price

Weighted-

Average Remaining Contractual Terms (Years)

Aggregate

Intrinsic

Value

Outstanding at December 31, 2019 6,413,782 $ 2.06 1.52 $ -

Exercised - -

Forfeited or expired - -

Outstanding at September 30, 2020 6,413,782 $ 2.06 0.77 $ -

Exercisable at September 30, 2020 6,413,782 $ 2.06 0.77 $ -

There were no warrant transactions during the nine months ended September 30, 2020. As of September 30, 2020, the outstanding warrants have no intrinsic value. The intrinsic value was calculated as the difference between the closing market price as of September 30, 2020, which was $0.93, and the exercise price of the Company’s warrants to purchase common stock.

Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Leases [Abstract]
Remainder of 2020	$ 67
2021	221
2022	222
2023	226
2024	221
Total payments	957
Less: Amount representing interest	251
Present value of net minimum lease payments	706
Less: Current portion	(114)
Non-current portion	$ 592	$ 737

Note Payable

9 Months Ended

Sep. 30, 2020

Note Payable

Note Payable

8. Note Payable

On April 20, 2020, the Company was granted a loan (the “PPP loan”) from City National Bank in the aggregate amount of $770, pursuant to the Paycheck Protection Program (the “PPP”) under the CARES Act.

The PPP loan agreement is dated April 20, 2020, matures on April 20, 2022, bears interest at a rate of 1% per annum, with the first six months of interest deferred, is payable monthly commencing on November 2020, and is unsecured and guaranteed by the U.S. Small Business Administration. The loan term may be extended to April 20, 2025, if mutually agreed to by the Company and lender. We applied ASC 470, Debt, to account for the PPP loan. The PPP loan may be prepaid at any time prior to maturity with no prepayment penalties. Funds from the PPP loan may only be used for qualifying expenses as described in the CARES Act, including qualifying payroll costs, qualifying group health care benefits, qualifying rent and debt obligations, and qualifying utilities. The Company intends to use the entire loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the loan may be forgiven if they are used for qualifying expenses. The Company intends to apply for forgiveness of the PPP loan with respect to these qualifying expenses, however, we cannot assure that such forgiveness of any portion of the PPP loan will occur. As for the potential loan forgiveness, once the PPP loan is, in part or wholly, forgiven and a legal release is received, the liability would be reduced by the amount forgiven and a gain on extinguishment would be recorded. The terms of the PPP loan provide for customary events of default including, among other things, payment defaults, breach of representations and warranties, and insolvency events. The Company was in compliance with the terms of the PPP loan as of September 30, 2020. At September 30, 2020, the note payable balance was $770, of which $470 were reflected as the current portion of note payable.

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Use of estimates

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for reserves of uncollectible accounts, inventory obsolescence, depreciable lives of property and equipment, analysis of impairments of recorded long-term tangible and intangible assets, realization of deferred tax assets, accruals for potential liabilities and assumptions made in valuing stock instruments issued for services.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers (“ASC 606”). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which include (1) identifying the contract or agreement with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied.

The Company does not have any significant contracts with customers requiring performance beyond delivery, and contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than a promised service to the customer. Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs upon shipment from our facilities. The Company’s performance obligations are satisfied at that time.

All of the Company’s products are offered for sale as finished goods only, and there are no performance obligations required post-shipment for customers to derive the expected value from them.

The Company does not allow for returns, except for damaged products when the damage occurred pre-fulfillment. Damaged product returns have historically been insignificant. Because of this, the stand-alone nature of our products, and our assessment of performance obligations and transaction pricing for our sales contracts, we do not currently maintain a contract asset or liability balance for obligations. We assess our contracts and the reasonableness of our conclusions on a quarterly basis.

Loss per Common Share

Loss per Common Share

Basic earnings (loss) per share is computed by dividing the net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed by dividing the net income applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation when their effect is antidilutive.

For the periods ended September 30, 2020 and 2019, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have had an anti-dilutive effect. The potentially dilutive securities consisted of the following:

	September 30, 2020		September 30, 2019
Convertible note to a related party		2,266,667		2,266,667
Warrants		6,413,782		6,413,782
Common stock equivalent of Series A Convertible Preferred stock		37,644		37,644
Common stock issuable		350,000		-
Unvested restricted common stock		244,740		610,609
Options		4,716,357		4,373,566
Total		14,029,190		13,702,268

The Series A Convertible Preferred Stock is convertible into Common shares at the rate of 1:4.

Stock Compensation Expense

Stock Compensation Expense

The Company periodically issues stock options and restricted stock awards to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for such grants issued and vesting based on ASC 718, Compensation-Stock Compensation whereby the value of the award is measured on the date of grant and recognized as compensation expense on the straight-line basis over the vesting period. The Company recognizes the fair value of stock-based compensation within its Statements of Operations with classification depending on the nature of the services rendered.

The fair value of the Company’s stock options is estimated using the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model and based on actual experience. The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense recorded in future periods.

Advertising Costs

Advertising Costs

Advertising costs are expensed as incurred and are included in selling and marketing expense. Advertising costs for the three months ended September 30, 2020 and 2019, aggregated $536 and $661, respectively. Advertising costs for the nine months ended September 30, 2020 and 2019, aggregated $1,141 and $2,194, respectively.

Concentrations

Concentrations

Sales. During the three months ended September 30, 2020, two customers accounted for 24% and 12% of gross sales, respectively, and during the nine months ended September 30, 2020, two customers accounted for 25% and 13% of gross sales, respectively. During the three months ended September 30, 2019, the Company’s largest two customers accounted for 15% and 12% of gross sales, respectively. During the nine months ended September 30, 2019, these customers accounted for 23% and 13% of gross sales, respectively. No other customers exceeded 10% of sales in either period.

Accounts receivable. As of September 30, 2020, the Company had accounts receivable from one customer which comprised 23% of its gross accounts receivable. As of December 31, 2019, the Company had accounts receivable from one customer which comprised 14% of its gross accounts receivable. No other customer exceeded 10% of accounts receivable in either period.

Purchases from vendors. During the three months ended September 30, 2020, two vendors accounted for 13% and 11% of all purchases. During the nine months ended September 30, 2020, two vendors accounted for 11% and 11% of all purchases. During the three months ended September 30, 2019, the Company’s largest three vendors accounted for approximately 13%, 11% and 10% of all purchases, respectively. During the nine months ended September 30, 2019, two vendors accounted for 12% and 10% of all purchases, respectively. No other vendors exceeded 10% of all purchases in either period.

Accounts payable. As of September 30, 2020, of the Company’s two largest vendors, each accounted for 18% and 11% of the total accounts payable. As of December 31, 2019, of the Company’s three largest vendors, accounted for 19%, 15%, and 14% of the total accounts payable. No other vendors exceeded 10% of accounts payable in either period.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company uses various inputs in determining the fair value of its financial assets and liabilities and measures these assets on a recurring basis. Financial assets recorded at fair value are categorized by the level of subjectivity associated with the inputs used to measure their fair value. ASC 820 defines the following levels of subjectivity associated with the inputs:

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

Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

Level 3—Unobservable inputs based on the Company’s assumptions.

The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, short-term bank loans, accounts payable, notes payable and other payables, approximate their fair values because of the short maturity of these instruments. The carrying values of capital lease obligations and long-term financing obligations approximate their fair values because interest rates on these obligations are based on prevailing market interest rates.

As of September 30, 2020, and December 31, 2019, the Company’s balance sheets included Level 2 liabilities comprised of the fair value of warrant liabilities aggregating $7 and $8, respectively (see Note 10).

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted. The Company does not believe the potential impact of the new guidance and related codification improvements will be material to its financial position, results of operations and cash flows.

In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective for the Company January 1, 2024. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. Management is currently evaluating the effect of the adoption of ASU 2020-06 on the consolidated financial statements, but currently does not believe ASU 2020-06 will have a significant impact on the Company’s accounting for its convertible debt instruments. The effect will largely depend on the composition and terms of the financial instruments at the time of adoption.

Other recent accounting pronouncements issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

- Definition

Disclosure of accounting policy for revenue from contract with customer.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 17
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130561-203045

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 20
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130566-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130563-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 20
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130566-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130563-203045

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=84158767&loc=d3e18823-107790

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 20
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130566-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 19
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130564-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 20
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130566-203045

+ Details

Leases Payable

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases Payable

9. Leases Payable

The Company adopted ASC 842, Leases, effective October 1, 2018. The standard requires a lessee to record a right-of-use asset and a corresponding lease liability at the inception of the lease, initially measured at the present value of the lease payments. The Company leases its headquarters office, and certain office equipment and automobiles. The Company analyzes all leases at inception to determine if a right-of-use asset and lease liability should be recognized. Leases with an initial term of 12 months or less are not included on the condensed consolidated balance sheets. The lease liability is measured at the present value of future lease payments as of the lease commencement date.

ASC 842 requires recognition in the statement of operations of a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis.

During the three and nine months ended September 30, 2020 and 2019, lease costs totaled $45 and $51, and $135 and $134, respectively.

As of December 31, 2019, the Company’s lease liabilities totaled $786, made up of finance lease liabilities of $89 and operating lease liabilities of $697. During the nine months ended September 30, 2020, the Company terminated $51 of finance leases, and made payments of $11 towards finance lease liability and $18 towards operating lease liability. As of September 30, 2020, lease liabilities totaled $706, made up of finance lease liabilities of $27 and operating lease liabilities of $679.

As of September 30, 2020, the weighted average remaining lease terms for operating lease and finance lease are 4.25 years and 0.39 years, respectively. As of September 30, 2020, the weighted average discount rate for operating lease is 12.6% and 10.39% for finance lease.

Future minimum lease payments under the leases are as follows (in thousands):

Years Ending December 31,	Sep, 30
Remainder of 2020	$	67
2021		221
2022		222
2023		226
2024		221
Total payments		957
Less: Amount representing interest		(251	)
Present value of net minimum lease payments		706
Less: Current portion		(114	)
Non-current portion	$	592

Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2020
Summary of Investment Holdings [Line Items]
Shares, Exercised	(27,500)
Equity Option [Member]
Summary of Investment Holdings [Line Items]
Shares Outstanding, Beginning balance	3,265,580
Weighted-Average Exercise Price, Outstanding, Beginning	$ 2.19
Weighted-Average Remaining Contractual Terms (Years), Outstanding Beginning Balance	7 years 1 month 2 days
Aggregate Intrinsic Value, Shares Outstanding, Beginning Balance	$ 6
Shares, Granted	2,067,800
Weighted-Average Exercise Price, Granted	$ 0.67
Shares, Exercised	(34,500)
Weighted-Average Exercise Price, Exercised	$ 0.50
Shares, Unvested forfeited or expired	(394,480)
Weighted-Average Exercise Price, Unvested forfeited or expired	$ 1.93
Shares, Vested forfeited or expired	(188,043)
Weighted-Average Exercise Price, Vested forfeited or expired	$ 4.20
Shares Outstanding, Ending Balance	4,716,357
Weighted-Average Exercise Price, Outstanding, Ending Balance	$ 1.48
Weighted-Average Remaining Contractual Terms (Years), Outstanding Ending Balance	8 years 2 months 1 day
Aggregate Intrinsic Value, Shares Outstanding, Ending Balance	$ 505
Shares Exercisable, Ending Balance	2,169,690
Weighted-Average Exercise Price, Exercisable Ending Balance	$ 1.47
Weighted-Average Remaining Contractual Terms (Years), Exercisable Ending Balance	7 years 5 months 15 days
Aggregate Intrinsic Value, Shares Exercisable Ending Balance	$ 338

Property and Equipment (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 35	$ 8	$ 56	$ 12
Right-of-use Assets Under Finance Leases [Member]
Property, Plant and Equipment [Line Items]
Net book value of disposed right-of-use assets under finance leases			45
Amount terminated related to finance leases			51
Gain on lease termination			$ 6

Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Product Information [Line Items]
Advertising costs	$ 536	$ 661	$ 1,141	$ 2,194
Warrant liabilities	$ 7		$ 7		$ 8
Revenue Benchmark [Member] \| Maximum [Member]
Product Information [Line Items]
Percentage of sale accounted to customer			10.00%
Customer One [Member] \| Revenue Benchmark [Member]
Product Information [Line Items]
Percentage of sale accounted to customer	24.00%	15.00%	25.00%	23.00%
Customer One [Member] \| Accounts Receivable [Member]
Product Information [Line Items]
Percentage of sale accounted to customer			23.00%		14.00%
Customer Two [Member] \| Revenue Benchmark [Member]
Product Information [Line Items]
Percentage of sale accounted to customer	12.00%	12.00%	13.00%	13.00%
Vendor [Member] \| Maximum [Member]
Product Information [Line Items]
Percentage of sale accounted to customer	10.00%		10.00%
Vendor [Member] \| Accounts Payable [Member]
Product Information [Line Items]
Percentage of sale accounted to customer					10.00%
Vendor One [Member]
Product Information [Line Items]
Percentage of sale accounted to customer	13.00%	13.00%	11.00%	12.00%
Vendor One [Member] \| Accounts Payable [Member]
Product Information [Line Items]
Percentage of sale accounted to customer			18.00%		19.00%
Vendor Two [Member]
Product Information [Line Items]
Percentage of sale accounted to customer	11.00%	11.00%	11.00%	10.00%
Vendor Two [Member] \| Accounts Payable [Member]
Product Information [Line Items]
Percentage of sale accounted to customer			11.00%		15.00%
Vendor Three [Member]
Product Information [Line Items]
Percentage of sale accounted to customer		10.00%
Vendor Three [Member] \| Accounts Payable [Member]
Product Information [Line Items]
Percentage of sale accounted to customer					14.00%

Intangible Assets (Details Narrative) $ in Thousands	9 Months Ended
Intangible Assets (Details Narrative) $ in Thousands	Sep. 30, 2020 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Impairment of intangible assets	$ 0

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2020	Oct. 31, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2020
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020
Current Fiscal Year End Date	--12-31
Entity File Number	001-32501
Entity Registrant Name	REED'S, INC.
Entity Central Index Key	0001140215
Entity Tax Identification Number	35-2177773
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	201 Merritt 7
Entity Address, City or Town	Norwalk
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06851
City Area Code	(800)
Local Phone Number	997-3337
Title of 12(b) Security	Common Stock
Trading Symbol	REED
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		62,967,570

Stock Warrants (Tables)

9 Months Ended

Sep. 30, 2020

Stock Warrants

Schedule of Warrant Activity

Subsequent Events

9 Months Ended

Sep. 30, 2020

Subsequent Events [Abstract]

Subsequent Events

15. Subsequent Events

Subsequent to September 30, 2020, the Company issued 7,000 shares of common stock on the exercise of stock options.

Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts and returns and discounts	$ 194	$ 375
Inventory Valuation Reserves	224	646
Property and equipment, accumulated depreciation	316	482
Equipment, impairment reserves	$ 96	$ 96
Series A convertible preferred stock, par value	$ 10	$ 10
Series A convertible preferred stock, shares authorized	500,000	500,000
Series A convertible preferred stock, shares issued	9,411	9,411
Series A convertible preferred stock, shares outstanding	9,411	9,411
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares outstanding	62,960,570	47,595,206
Common stock, shares issued	62,960,570	47,595,206
Common stock, shares issuable	350,000

Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Significant Accounting Policies

2. Significant Accounting Policies

Use of estimates

Revenue Recognition

All of the Company’s products are offered for sale as finished goods only, and there are no performance obligations required post-shipment for customers to derive the expected value from them.

Loss per Common Share

	September 30, 2020		September 30, 2019
Convertible note to a related party		2,266,667		2,266,667
Warrants		6,413,782		6,413,782
Common stock equivalent of Series A Convertible Preferred stock		37,644		37,644
Common stock issuable		350,000		-
Unvested restricted common stock		244,740		610,609
Options		4,716,357		4,373,566
Total		14,029,190		13,702,268

The Series A Convertible Preferred Stock is convertible into Common shares at the rate of 1:4.

Stock Compensation Expense

Advertising Costs

Concentrations

Fair Value of Financial Instruments

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

Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

Level 3—Unobservable inputs based on the Company’s assumptions.

Recent Accounting Pronouncements

Schedule of Equipment Held for Sale (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Property, Plant and Equipment [Abstract]
Equipment held for sale	$ 163	$ 163
Reserve	(96)	(96)
Net book value	$ 67	$ 67

Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Intangible Assets

Intangible assets consist of the following (in thousands):

Summary of Intangible Assets

	September 30, 2020		December 31, 2019
Brand names	$	576	$	576
Trademarks		37		-
Total	$	613	$	576

Schedule of Potentially Dilutive Securities (Details) - shares	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	14,029,190	13,702,268
Convertible Note to a Related Party [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2,266,667	2,266,667
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	6,413,782	6,413,782
Series A Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	37,644	37,644
Common Stock Issuable [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	350,000
Unvested Restricted Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	244,740	610,609
Equity Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	4,716,357	4,373,566

Share-based payments

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Share-based payments

12. Share-based payments

Restricted common stock

The following table summarizes restricted stock activity during the nine months ended September 30, 2020:

Unvested
Shares Issuable
Shares Fair Value
at Date of
Issuance Weighted
Average
Grant Date
Fair Value

Balance, December 31, 2019 - - $ - -

Granted 594,740 - 508 0.85

Vested (350,000 ) 350,000 (285 ) -

Issued - - - -

Balance, September 30, 2020 244,740 350,000 $ 223 $ 0.85

During the nine months ended September 30, 2020, the Company issued 594,740 shares of restricted stock to a director and two executive employees. 350,000 of these shares vested immediately, 94,740 shares will vest in increments of 47,370 each over a two month period of October and November 2020, 75,000 shares will vest in increments of 18,750 each over four years from the date of grant, and 75,000 shares will vest over four years based on performance criteria determined by the Board of Directors or Compensation Committee. Unvested shares remain subject to forfeiture if vesting conditions are not met. The aggregate fair value of the stock awards was $508 based on the market price of our common stock price which ranged from $0.81 to $0.95 per share on the dates of grants and is amortized as shares vest. The total fair value of restricted common stock vesting during the nine months ended September 30, 2020 and 2019 was $285 and $477, respectively, and is included in general and administrative expenses in the accompanying statements of operations. As of September 30, 2020, the amount of unvested compensation related to issuances of restricted common stock was $223, which will be recognized as an expense in future periods as the shares vest. When calculating basic loss per share, these shares are included in weighted average common shares outstanding from the time they vest. When calculating diluted net income per share, these shares are included in weighted average common shares outstanding as of their grant date.

Stock options

Schedule of Stock Option Activity

The following table summarizes stock option activity during the nine months ended September 30, 2020:

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Terms (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2019		3,265,580		$	2.19		7.09	$	6
Granted		2,067,800		$	0.67
Exercised		(34,500	)	$	0.50
Unvested forfeited or expired		(394,480	)	$	1.93
Vested forfeited or expired		(188,043	)	$	4.20
Outstanding at September 30, 2020		4,716,357		$	1.48		8.17	$	505
Exercisable at September 30, 2020		2,169,690		$	1.47		7.46	$	338

During the nine months ended September 30, 2020, the Company approved options exercisable into 2,067,800 shares to be issued pursuant to Reed’s 2017 Incentive Compensation Plan. 1,732,800 options were issued to employees including 582,800 options that vested immediately, 575,000 options vesting annually over a four-year vesting period, and 575,000 options that will vest based on performance criteria to be established by the board. In addition, 335,000 options granted to consultants, board members, and former employees vest over various periods.

The stock options are exercisable at a price ranging from $0.44 to $0.89 per share and expire in ten years. The total fair value of these options at grant date was approximately $1,168, which was determined using a Black-Scholes-Merton option pricing model with the following average assumption: stock price ranging from $0.44 to $0.89 per share, expected term of seven years, volatility of 120%, dividend rate of 0%, and risk-free interest rate ranging from 0.56% to 1.63%. The expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future; and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award. The fair value of the options of $1,168 will be amortized as the options vest in future periods through May 20, 2024.

During the nine months ended September 30, 2020 and 2019, the Company recognized $722 and $1,077 of compensation expense relating to vested stock options. As of September 30, 2020, the aggregate amount of unvested compensation related to stock options was approximately $1,594 which will be recorded as an expense in future periods as the options vest.

As of September 30, 2020, the outstanding options have an intrinsic value of $338. The aggregate intrinsic value was calculated as the difference between the closing market price as of September 30, 2020, which was $0.93, and the exercise price of the outstanding stock options.

Line of Credit (Tables)

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Schedule of Amount Outstanding Under Credit Facilities

Amounts outstanding under the Company’s credit facilities are as follows (in thousands):

	September 30, 2020			December 31, 2019
Line of Credit	$	4,596		$	3,661
Capitalized finance costs		(324	)		(484	)
Net balance	$	4,272		$	3,177

Stockholders’ Equity

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Stockholders’ Equity

11. Stockholders’ Equity

Series A Convertible Preferred Stock

On July 2, 2020, the Company paid dividends on the Preferred Stock through the issuance of 4,530 of its common stock. The aggregate fair value of the common stock issued was $5 based on an average market price of $1.04 per share.

Common stock issuance

In April 2020, the Company conducted a public offering of 15,333,334 shares of its common shares at a public offering price of $0.375 per share. The net proceeds to the Company from this offering are $5,310, after deducting underwriting discounts and commissions and other offering expenses. Proceeds from the offering will provide capital for working capital, and general corporate purposes.

During the nine months ended September 30, 2020, the Company received proceeds of $14, and issued 27,500 shares of common stock, on the exercise of stock options.

Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Schedule of Potentially Dilutive Securities

	September 30, 2020		September 30, 2019
Convertible note to a related party		2,266,667		2,266,667
Warrants		6,413,782		6,413,782
Common stock equivalent of Series A Convertible Preferred stock		37,644		37,644
Common stock issuable		350,000		-
Unvested restricted common stock		244,740		610,609
Options		4,716,357		4,373,566
Total		14,029,190		13,702,268

Condensed Statements of Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Preferred Stock [Member]	Common Stock Issuable [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2018	$ 3	$ 94		$ 53,591	$ (60,431)	$ (6,743)
Shares, Outstanding, Beginning Balance at Dec. 31, 2018	25,729,461	9,411
Fair value of vested options				1,077		1,077
Dividends on Series A Convertible Preferred Stock					(5)	(5)
Dividends on Series A Convertible Preferred Stock, shares
Fair value of vested restricted shares granted to an officer for services				405		405
Fair value of vested restricted shares granted to officers for services, shares
Common shares issued pursuant to the rights offering, net of offering costs				14,867		14,867
Common shares issued pursuant to the rights offering, net of offering costs, shares	7,733,750
Shares granted to Directors for services				115		115
Shares granted to Directors for services, shares	33,796
Exercise of warrants				365		365
Exercise of warrants, shares	223,037
Net Loss					(12,289)	(12,289)
Ending balance, value at Sep. 30, 2019	$ 3	$ 94		70,420	(72,725)	(2,208)
Shares, Outstanding, Ending Balance at Sep. 30, 2019	33,720,044	9,411
Beginning balance, value at Jun. 30, 2019	$ 3	$ 94		70,051	(68,160)	1,988
Shares, Outstanding, Beginning Balance at Jun. 30, 2019	33,708,826	9,411
Fair value of vested options				223		223
Fair value of vested restricted shares granted to an officer for services				116		116
Shares granted to Directors for services				29		29
Shares granted to Directors for services, shares	8,072
Exercise of warrants				1		1
Exercise of warrants, shares	3,146
Net Loss					(4,565)	(4,565)
Ending balance, value at Sep. 30, 2019	$ 3	$ 94		70,420	(72,725)	(2,208)
Shares, Outstanding, Ending Balance at Sep. 30, 2019	33,720,044	9,411
Beginning balance, value at Dec. 31, 2019	$ 5	$ 94		77,596	(76,548)	1,147
Shares, Outstanding, Beginning Balance at Dec. 31, 2019	47,595,206	9,411
Fair value of vested options				722		722
Common shares issued on exercise of options				14		$ 14
Common shares issued on exercise of options, shares	27,500					27,500
Dividends on Series A Convertible Preferred Stock				5	(5)
Dividends on Series A Convertible Preferred Stock, shares	4,530
Fair value of vested restricted shares granted to an officer for services			$ 285			285
Fair value of vested restricted shares granted to officers for services, shares			350,000
Common shares issued pursuant to the rights offering, net of offering costs	$ 1			5,309		5,310
Common shares issued pursuant to the rights offering, net of offering costs, shares	15,333,334
Exercise of warrants, shares
Net Loss					(6,920)	(6,920)
Ending balance, value at Sep. 30, 2020	$ 6	$ 94	$ 285	83,646	(83,473)	558
Shares, Outstanding, Ending Balance at Sep. 30, 2020	62,960,570	9,411	350,000
Beginning balance, value at Jun. 30, 2020	$ 6	$ 94	$ 285	83,364	(80,883)	2,866
Shares, Outstanding, Beginning Balance at Jun. 30, 2020	62,928,540	9,411	350,000
Fair value of vested options				263		263
Common shares issued on exercise of options				14		14
Common shares issued on exercise of options, shares	27,500
Dividends on Series A Convertible Preferred Stock				5		5
Dividends on Series A Convertible Preferred Stock, shares	4,530
Fair value of vested restricted shares granted to officers for services, shares
Exercise of warrants
Exercise of warrants, shares
Net Loss					(2,590)	(2,590)
Ending balance, value at Sep. 30, 2020	$ 6	$ 94	$ 285	$ 83,646	$ (83,473)	$ 558
Shares, Outstanding, Ending Balance at Sep. 30, 2020	62,960,570	9,411	350,000

Related Party Activities (Details Narrative) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Royalty [Member]
Entity Listings [Line Items]
Royalty revenue	$ 26	$ 14
Chris Reed [Member]
Entity Listings [Line Items]
Deposit of security with lessor	$ 800
Number of common stock value placed	363,000
Value of common stock paced	$ 338
Receivable from related party	391
Amount received from related party	129
California Custom Beverage, LLC [Member]
Entity Listings [Line Items]
Receivable from related party			$ 356
California Custom Beverage, LLC [Member] \| Chris Reed [Member]
Entity Listings [Line Items]
Deposit of security with lessor				$ 1,200
Royalty percentage			5.00%
Referral fee percentage			5.00%
Royalty revenue receivable	26		$ 128
Inventory advances	138		228
Accounts payable due to related parties	$ 211		$ 182

Related Party Activities

9 Months Ended

Sep. 30, 2020

Related Party Activities

14. Related Party Activities

On December 31, 2018, the Company completed the sale of its Los Angeles manufacturing plant to California Custom Beverage, LLC (“CCB”), an entity owned by Christopher J. Reed, a related party, and CCB assumed the monthly payments on our lease obligation for the Los Angeles manufacturing plant. Our release from the obligation by the lessor, however, is dependent upon CCB’s deposit of $1,200 of security with the lessor. The deposit is secured by Mr. Reed’s pledge of common stock to the lessor and guaranteed personally by Mr. Reed and his wife. As of September 30, 2020, $800 has been deposited with the lessor and Mr. Reed has placed approximately 363,000 pledged shares valued at $338 that remain in escrow with the lessor.

Beginning in 2019, we are to receive a 5% royalty on CCB’s private label sales to existing customers for three years and a 5% referral fee on CCB’s private label sales to referred customers for three years. During the nine months ended September 30, 2020, the Company recorded royalty revenue from CCB of $26. During the nine months ended September 30, 2019, the Company recorded royalty revenue from CCB of $14.

At December 31, 2019, the Company had royalty revenue receivable from CCB of $128. In addition, at December 31, 2019, the Company has outstanding receivable from CCB of $228 consisting of inventory advances to CCB. The aggregate receivable from CCB at December 31, 2019 was $356. During the nine months ended September 30, 2020, the Company recorded additional royalty revenue receivable of $26, advance additional inventory and equipment of $138, and received payments of $129, leaving an aggregate receivable balance of $391 at September 30, 2020.

At September 30, 2020 and December 31, 2019, the Company had accounts payable due to CCB of $211 and $182, respectively.

Leases Payable (Tables)

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Schedule of Future Minimum Lease Payments

Future minimum lease payments under the leases are as follows (in thousands):

Years Ending December 31,	Sep, 30
Remainder of 2020	$	67
2021		221
2022		222
2023		226
2024		221
Total payments		957
Less: Amount representing interest		(251	)
Present value of net minimum lease payments		706
Less: Current portion		(114	)
Non-current portion	$	592

Property and Equipment

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment

4. Property and Equipment

Property and equipment is comprised of the following (in thousands):

Schedule of Property and Equipment

	September 30, 2020			December 31, 2019
Right-of-use assets under operating leases	$	730		$	730
Right-of-use assets under finance leases		67			179
Computer hardware and software		400			543
Machinery and equipment		103			83
Total cost		1,300			1,535
Accumulated depreciation and amortization		(316	)		(482	)
Net book value	$	984		$	1,053

Depreciation expense for the three months ended September 30, 2020 and 2019 was $35 and $8, respectively. Depreciation expense for the nine months ended September 30, 2020 and 2019 was $56 and $12, respectively. During the nine months ended September 30, 2020, the Company disposed of right-of-use assets under finance leases with a net book value of $45, and terminated $51 of related finance leases (see Note 9), resulting in a gain on lease termination of $6.

Equipment held for sale consists of the following (in thousands):

Schedule of Equipment Held for Sale

	September 30, 2020			December 31, 2019
Equipment held for sale	$	163		$	163
Reserve		(96	)		(96	)
Net book value	$	67		$	67

The balance as of September 30, 2020, and December 31, 2019, consists of residual manufacturing equipment, at estimated net realizable value, which management anticipates selling during 2020.

Line of Credit

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Line of Credit

6. Line of Credit

Amounts outstanding under the Company’s credit facilities are as follows (in thousands):

	September 30, 2020			December 31, 2019
Line of Credit	$	4,596		$	3,661
Capitalized finance costs		(324	)		(484	)
Net balance	$	4,272		$	3,177

On October 4, 2018, the Company entered into a financing agreement with Rosenthal & Rosenthal, Inc. The financing agreement provides a maximum borrowing capacity of $13,000. Borrowings are based on a formula of eligible accounts receivable and inventories (the “permitted borrowings”) plus advances (an “over-advance” of up to $4,000) in excess of permitted borrowings. At September 30, 2020, the unused borrowing capacity under the financing agreement was $3,037. The line of credit matures on March 30, 2021.

Borrowings under the Rosenthal financing agreement bear interest at the greater of prime or 4.75%, plus an additional 2.0% to 3.5% depending on whether the borrowing is based upon receivables, inventory or is an over-advance. The effective interest rate as of September 30, 2020 on outstanding borrowings was 7.2%. Additionally, the line of credit is subject to monthly facility and administration fees, and aggregate minimum monthly fees (including interest) of $4.

The line of credit is secured by substantially all of the assets excluding intellectual property of the Company. The over-advance is secured by all of Reed’s intellectual property collateral. Additionally, any over-advance is guaranteed by an irrevocable stand-by letter of credit in the amount of $1,500, issued by Daniel J. Doherty III and the Daniel J. Doherty, III 2002 Family Trust, affiliates of Raptor/Harbor Reeds SPV LLC (“Raptor”). As of September 30, 2020, Raptor beneficially owns 11.5% of the Company’s outstanding common stock and Mr. Doherty is a member of the Company’s Board of Directors. In the event of a default under the financing agreement, Raptor has a put option to purchase from Rosenthal the entire amount of any outstanding over-advance plus accrued interest, prior to Rosenthal declaring an event of default under the financing agreement.

The financing agreement with Rosenthal includes customary restrictions that limit our ability to engage in certain types of transactions, including our ability to utilize tangible and intangible assets as collateral for other indebtedness. Additionally, the agreement contains a financial covenant that requires us to meet certain minimum working capital and tangible net worth thresholds as of the end of each quarter. We were in compliance with the terms of our agreement with Rosenthal as of September 30, 2020.

The Company annually incurs an additional $130 of fees from the bank, which is equal to 1% of the $13,000 borrowing limit. These costs have been capitalized and recorded as a debt discount and are amortized over the remaining life of the Rosenthal agreement. The 2020 fee will be amortized over 0.5 years and the 2019 fee is being amortized over 1.5 years. Amortization of debt discount was $290 and $225 for the nine months ended September 30, 2020 and 2019, respectively.

Subsequent Events (Details Narrative) - shares		9 Months Ended
Subsequent Events (Details Narrative) - shares	Nov. 16, 2020	Sep. 30, 2020
Subsequent Event [Line Items]
Common shares issued on exercise of options, shares		27,500
Subsequent Event [Member]
Subsequent Event [Line Items]
Common shares issued on exercise of options, shares	7,000

Convertible Note to a Related Party (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	Apr. 21, 2017	Sep. 30, 2020	Dec. 31, 2019
Schedule of Capitalization, Long-term Debt [Line Items]
Convertible Debt		$ 5,128	$ 4,689
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right	1,416,667	138,762	138,762
Warrants and Rights Outstanding, Maturity Date	Apr. 21, 2022
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 1.50
Raptor/Harbor Reeds SPV LLC [Member]
Schedule of Capitalization, Long-term Debt [Line Items]
Equity Method Investment, Ownership Percentage		11.50%	14.90%
Raptor Note [Member]
Schedule of Capitalization, Long-term Debt [Line Items]
Convertible Debt	$ 3,400
Debt Instrument, Interest Rate, Stated Percentage	12.00%
Debt Instrument, Maturity Date	Apr. 21, 2021
Debt Instrument, Convertible, Conversion Price	$ 1.50

Warrant Liability (Tables)

9 Months Ended

Sep. 30, 2020

Warrant Liability

Schedule of Warrant Liability Using Assumptions

The fair value of the warrant liability was determined using the Black-Scholes-Merton option pricing model at September 30, 2020 and December 31, 2019, using the following assumptions:

	September 30, 2020			December 31, 2019

Stock Price	$	0.93		$	0.91
Risk free interest rate		0.80	%		1.95	%
Expected volatility		119.51	%		83.36	%
Expected life in years		0.67			1.42
Expected dividend yield		0	%		0	%
Number of Warrants containing fundamental transaction provisions		138,762			138,762
Fair Value of Warrants	$	7		$	8

Schedule of Warrant Liability

The following table sets forth a summary of the changes in the estimated fair value of the warrant liability during the nine months ended September 30, 2020 and 2019:

Schedule of Warrant Liability

	September 30, 2020			September 30, 2019
Beginning Balance	$	8		$	38
Change in fair value		(1	)		(23	)
Ending balance	$	7		$	15

Stock Warrants (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stock price	$ 0.93	$ 0.91
Warrant [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Aggregate intrinsic value	$ 0
Stock Warrants [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Warrant to purchase common stock	6,413,782
Number of warrants outstanding, intrinsic value	$ 0
Stock price	$ 0.93

Convertible Note to a Related Party (Tables)

9 Months Ended

Sep. 30, 2020

Convertible Note To Related Party

Schedule of Convertible Notes

The Convertible Note to a Related Party consists of the following (in thousands):

Schedule of Convertible Notes

	September 30, 2020		December 31, 2019
12% Convertible Note Payable	$	3,400	$	3,400
Accrued Interest		1,728		1,289
Total obligation	$	5,128	$	4,689

Basis of Presentation and Liquidity

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Liquidity

1. Basis of Presentation and Liquidity

The accompanying interim condensed financial statements of Reed’s, Inc. (the “Company”, “we”, “us”, or “our”), are unaudited, but in the opinion of management contain all adjustments, including normal recurring adjustments, necessary to present fairly our financial position at September 30, 2020, the results of operations for the three and nine months ended September 30, 2020 and 2019, and cash flows for the nine months ended September 30, 2020 and 2019. The balance sheet as of December 31, 2019 is derived from the Company’s audited financial statements.

Certain information and footnote disclosures normally included in financial statements that have been prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. We believe that the disclosures contained in these condensed financial statements are adequate to make the information presented herein not misleading. For further information, refer to the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed with the Securities and Exchange Commission on March 18, 2020 and amended on April 8, 2020.

The results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2020.

COVID-19 Considerations

In the quarter ended September 30, 2020, the COVID-19 pandemic did not have a material net impact on our operating results. In the future, the pandemic may cause reduced demand for our products if, for example, the pandemic results in a recessionary economic environment which negatively effects the consumers who purchase our products. Based on the recent increase in demand for our products, we believe that over the long term, there will continue to be strong demand for our products.

Our ability to operate without significant negative operational impact from the COVID-19 pandemic will in part depend on our ability to protect our employees and our supply chain. The Company has endeavored to follow the recommended actions of government and health authorities to protect our employees. For the six months ended September 30, 2020, we maintained the consistency of our operations during the onset of the COVID-19 pandemic. We will continue to innovate in managing our business, coordinating with our employees and suppliers to do our part in the infection prevention and remain flexible in responding to our customers and suppliers. However, the uncertainty resulting from the pandemic could result in an unforeseen disruption to our workforce and supply chain (for example an inability of a key supplier or transportation supplier to source and transport materials) that could negatively impact our operations.

Through September 30, 2020, the COVID-19 pandemic has not negatively impacted the Company’s liquidity position as of such date. Shipments to customers in the third quarter of 2020 were up 14% from the first quarter of 2020, and down slightly (2%) from the second quarter of 2020 with fluctuations consistent with historical seasonal patterns. Through September 30, 2020, we continue to generate cash flows to meet our short-term liquidity needs, and we expect to maintain access to the capital markets. We have also not observed any material impairments of our assets or a significant change in the fair value of our assets due to the COVID-19 pandemic.

For additional information on risk factors related to the pandemic or other risks that could impact our results, please refer to “Risk Factors” in Part II, Item 1A of this Form 10-Q.

Liquidity

The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern. Such assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

For the nine months ended September 30, 2020, the Company recorded a net loss of $6,920 and used cash in operations of $6,768. As of September 30, 2020, we had a cash balance of $875 with borrowing capacity of $3,037, a stockholder’s equity of $558 and a negative working capital of $207, compared to a cash balance of $913 with borrowing capacity of $3,235, stockholders’ equity of $1,147 and a working capital of $4,885 at December 31, 2019.

Historically, we have financed our operations through public and private sales of common stock, issuance of preferred and common stock, convertible debt instruments, term loans and credit lines from financial institutions, and cash generated from operations. We have taken decisive action to improve our margins, including fully outsourcing our manufacturing process, streamlining our product portfolio, negotiating improved vendor contracts, and restructuring our selling prices.

Summary of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Brand names	$ 576	$ 576
Trademarks	37
Total	$ 613	$ 576

Basis of Presentation and Liquidity (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net Income (Loss) Attributable to Parent	$ 2,590	$ 4,565	$ 6,920	$ 12,289
Net Cash Provided by (Used in) Operating Activities			6,768	14,628
Cash	875		875			$ 913
Line of Credit Facility, Current Borrowing Capacity	3,037		3,037			3,235
Stockholders' Equity Attributable to Parent	558	$ (2,208)	558	$ (2,208)	$ 2,866	1,147	$ 1,988	$ (6,743)
Working capital	$ 207		$ 207			$ 4,885

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

Schedule of Amount Outstanding Under Credit Facilities (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Debt Disclosure [Abstract]
Line of Credit	$ 4,596	$ 3,661
Capitalized finance costs	(324)	(484)
Net balance	$ 4,272	$ 3,177

- Definition

The carrying value as of the balance sheet date of the current portion of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Inventory (Details Narrative) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Inventory Valuation Reserves	$ 224	$ 646

Schedule of Warrant Liability (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Warrant Liability
Beginning Balance	$ 8	$ 38
Change in fair value	(1)	(23)
Ending balance	$ 7	$ 15

Intangible Assets

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

5. Intangible Assets

Intangible assets are comprised of brand names acquired, specifically Virgil’s, and costs related to trademarks. They have been assigned an indefinite life, as we currently anticipate that they will contribute cash flows to the Company perpetually. These indefinite-lived intangible assets are not amortized but are assessed for impairment annually and evaluated annually to determine whether the indefinite useful life remains appropriate. We first assess qualitative factors to determine whether it is more likely than not that the asset is impaired. If further testing is necessary, we compare the estimated fair value of our asset with its book value. If the carrying amount of the asset exceeds its fair value, as determined by the discounted cash flows expected to be generated by the asset, an impairment loss is recognized in an amount equal to that excess. Based on management’s measurement, there were no indications of impairment at September 30, 2020.

Intangible assets consist of the following (in thousands):

Summary of Intangible Assets

	September 30, 2020		December 31, 2019
Brand names	$	576	$	576
Trademarks		37		-
Total	$	613	$	576

Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Total cost	$ 1,300	$ 1,535
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	(316)	(482)
Net book value	984	1,053
Right-of-use Assets Under Operating Leases [Member]
Property, Plant and Equipment [Line Items]
Total cost	730	730
Right-of-use Assets Under Finance Leases [Member]
Property, Plant and Equipment [Line Items]
Total cost	67	179
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Total cost	400	543
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Total cost	$ 103	$ 83

Share-based payments (Tables)

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Summary of Non-vested Restricted Stock Activity

The following table summarizes restricted stock activity during the nine months ended September 30, 2020:

Schedule of Stock Option Activity

The following table summarizes stock option activity during the nine months ended September 30, 2020:

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Terms (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2019		3,265,580		$	2.19		7.09	$	6
Granted		2,067,800		$	0.67
Exercised		(34,500	)	$	0.50
Unvested forfeited or expired		(394,480	)	$	1.93
Vested forfeited or expired		(188,043	)	$	4.20
Outstanding at September 30, 2020		4,716,357		$	1.48		8.17	$	505
Exercisable at September 30, 2020		2,169,690		$	1.47		7.46	$	338

Convertible Note to a Related Party

9 Months Ended

Sep. 30, 2020

Convertible Note To Related Party

Convertible Note to a Related Party

7. Convertible Note to a Related Party

The Convertible Note to a Related Party consists of the following (in thousands):

Schedule of Convertible Notes

	September 30, 2020		December 31, 2019
12% Convertible Note Payable	$	3,400	$	3,400
Accrued Interest		1,728		1,289
Total obligation	$	5,128	$	4,689

On April 21, 2017, the Company issued a secured, convertible, subordinated, non-redeemable note in the principal amount of $3,400 and warrants to purchase 1,416,667 shares of common stock to Raptor. Raptor beneficially owned approximately 11.5% and 14.9% of the Company’s common stock at September 30, 2020 and December 31, 2019, respectively.

The Raptor Note bears interest at a rate of 12% per annum, compounded monthly, and is secured by the Company’s assets, subordinate to the first priority security interest of Rosenthal & Rosenthal (see Note 6). The note may not be prepaid and matures on April 21, 2021. It may be converted, at any time and from time to time, into shares of common stock of the Company, at a revised conversion price of $1.50.

The warrants expire on April 21, 2022 and have an adjusted exercise price of $1.50 per share. The note and warrants contain customary anti-dilution provisions, and the shares of common stock issuable upon conversion of the note and exercise of the warrants have been registered on Form S-3.

Line of Credit (Details Narrative) - USD ($) $ in Thousands		9 Months Ended		12 Months Ended
Line of Credit (Details Narrative) - USD ($) $ in Thousands	Oct. 04, 2018	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Debt Instrument [Line Items]
Annual fees		$ 130
Percentage of fees on borrowing capacity		1.00%
Period for amortization of fees		6 months		1 year 6 months
Amortization of debt discount		$ 290	$ 225
Daniel J. Doherty [Member]
Debt Instrument [Line Items]
Letter of credit	$ 1,500
Daniel J. Doherty [Member] \| Reeds Inc. [Member]
Debt Instrument [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners		11.50%
Financing Agreement [Member] \| Rosenthal and Rosenthal, Inc. [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	13,000
Excess of permitted borrowing amount	$ 4,000
Line of Credit Facility, Remaining Borrowing Capacity		$ 3,037
Line of Credit Facility, Expiration Date	Mar. 30, 2021
Line of credit, interest rate	4.75%	7.20%
Minimum monthly fees		$ 4
Financing Agreement [Member] \| Rosenthal and Rosenthal, Inc. [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Line of credit, interest rate	2.00%
Financing Agreement [Member] \| Rosenthal and Rosenthal, Inc. [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Line of credit, interest rate	3.50%