Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 12, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2021 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 333-251016 | |
Entity Registrant Name | CANNAPHARMARX, INC | |
Entity Central Index Key | 0001081938 | |
Entity Tax Identification Number | 27-4635140 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | Suite 3600 | |
Entity Address, Address Line Two | 888 – 3rd Street SW | |
Entity Address, Address Line Three | Calgary | |
Entity Address, City or Town | Canada | |
Entity Address, State or Province | DE | |
Entity Address, Postal Zip Code | 5C5 | |
City Area Code | 949 | |
Local Phone Number | 652-6838 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | CPMD | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 89,124,710 | |
[custom:EntityAddressAddressLine4] | Alberta |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | |
Current assets | |||
Cash | $ 110,158 | $ 334,969 | |
HST Receivable | 1,996 | 551 | |
Prepaid expenses | 369,154 | 132,031 | |
Total current assets | 481,308 | 467,551 | |
Construction in progress | 1,608,994 | 1,566,316 | |
Office equipment | 7,717 | 2,435 | |
Investments | 6,750,779 | 6,711,289 | |
Total Assets | 8,848,798 | 8,747,591 | |
Current liabilities | |||
Accounts payable and accrued expenses | 4,116,507 | 3,585,000 | |
Accrued interest | [1] | 152,238 | 96,477 |
Accrued legal settlement | [2] | 190,000 | 190,000 |
Notes payable | 9,331,658 | 8,728,749 | |
Convertible Notes -net of discount | 812,790 | 997,558 | |
Derivative liability | 598,676 | 3,676,649 | |
Loan payable - related party | 41,219 | 274,758 | |
Total current liabilities | 15,243,088 | 17,549,190 | |
Total Liabilities | 15,243,088 | 17,549,190 | |
Commitments and contingencies | |||
Stockholders' Equity | |||
Common stock, $0.0001 par value; 300,000,000 shares authorized, 73,760,595 and 46,986,794 issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | 7,376 | 4,699 | |
Treasury stock, 133,200 and -0- shares as of June 30, 2021 and December 31, 2020, respectively | (13) | (13) | |
Additional paid in capital | 71,383,756 | 68,336,249 | |
Retained earnings (deficit) | (77,799,255) | (77,331,820) | |
Accumulated other comprehensive income (loss) | (519,334) | (345,714) | |
Total Stockholders' Equity (Deficit) | (6,394,290) | (8,801,599) | |
Total Liabilities and Stockholders' (Equity) | 8,848,798 | 8,747,591 | |
Series A Preferred Stock [Member] | |||
Stockholders' Equity | |||
Preferred Stock Value | 58,180 | 60,000 | |
Series B Preferred Stock [Member] | |||
Stockholders' Equity | |||
Preferred Stock Value | $ 475,000 | $ 475,000 | |
[1] | The Company has paid $209,500 in commitment fees to two arms length parties to arrange financing for pending Cremona acquisition. This financing is currently in the due diligence phase. | ||
[2] | Represents interest accrued on the outstanding convertible notes and other notes - see Note 11, Notes Payables) |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 300,000,000 | 300,000,000 |
Common stock, issued | 73,760,595 | 46,986,794 |
Common stock, outstanding | 73,760,595 | 46,986,794 |
Treasury stock, Shares | 133,200 | 0 |
Series A Preferred Stock [Member] | ||
Preferred shares, par value | $ 1 | $ 1 |
Preferred shares, authorized | 100,000 | 100,000 |
Preferred shares, issued | 58,180 | 60,000 |
Preferred shares, outstanding | 58,180 | 60,000 |
Series B Preferred Stock [Member] | ||
Preferred shares, par value | $ 1 | $ 1 |
Preferred shares, authorized | 3,000,000 | 3,000,000 |
Preferred shares, issued | 475,000 | 0 |
Preferred shares, outstanding | 475,000 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Operating Expenses: | ||||
General and administrative | 359,377 | 183,926 | 508,146 | 226,254 |
Acquisition expenses | 0 | (18,488) | 0 | 1,862,638 |
Amortization and depreciation | 776 | 31,477 | 1,184 | 63,141 |
Stock based compensation | 96,700 | 206,579 | 193,399 | 413,158 |
Travel and entertainment | 0 | 1,405 | 0 | 7,942 |
Rent | (4,664) | 17,597 | 4,814 | 17,597 |
Professional fees | 295,753 | 118,394 | 714,356 | 272,123 |
Board of Directors’ fees | 48,138 | 246,594 | 95,526 | 494,640 |
Total operating expenses | 796,080 | 787,484 | 1,517,425 | 3,357,493 |
Income (loss) from operations | (796,080) | (787,484) | (1,517,425) | (3,357,493) |
Other income (expense) | ||||
Interest (expense) | (609,848) | (641,377) | (1,038,720) | (1,360,702) |
(Loss) on extinguishment of debt | (706,974) | 0 | (989,263) | 0 |
Change in the fair value of derivative liability | 447,493 | (43,618) | 3,077,973 | (969,102) |
Other income (expense) net | (869,329) | (684,995) | 1,049,990 | (2,329,804) |
Income (loss) before provision for income taxes | (1,665,409) | (1,472,479) | (467,435) | (5,687,297) |
Provision (credit) for income tax | 0 | 0 | 0 | 0 |
Net income (loss) | $ (1,665,409) | $ (1,472,479) | $ (467,435) | $ (5,687,297) |
Basic and diluted earnings(loss) per common share | $ (0.03) | $ (0.04) | $ (0.01) | $ (0.15) |
Weighted average number of shares outstanding | 57,235,013 | 40,002,473 | 52,664,431 | 38,273,494 |
Comprehensive loss: | ||||
Net income (loss) | $ (1,665,409) | $ (1,472,479) | $ (467,435) | $ (5,687,297) |
Foreign currency translation adjustment | (77,042) | 13,481 | (173,620) | (53,793) |
Comprehensive income (loss) | $ (1,742,451) | $ (1,458,998) | $ (641,055) | $ (5,741,090) |
STATEMENTS OF CONSOLIDATED CASH
STATEMENTS OF CONSOLIDATED CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash Flows From Operating Activities: | ||
Net income (loss) | $ (467,435) | $ (5,741,090) |
Adjustments to reconcile net income to net cash provided by (used for) operating activities | ||
Stock-based compensation expense | 193,399 | 413,158 |
Amortization of intangible assets | 0 | 62,384 |
Advertising expense paid with common stock | 189,000 | 153,000 |
Common stock issued in connection with financing | 50,085 | 130,834 |
Amortization of debt discount | 735,949 | 1,009,149 |
Loss on the extinguishment of debt | 989,263 | 0 |
Change in the fair value of derivatives | (3,077,973) | 969,102 |
Depreciation | 1,190 | 758 |
Changes in operating assets and liabilities | ||
(Increase)/decrease in prepaid expenses | (238,498) | 1,788,111 |
HST Receivable | (1,430) | 25,991 |
Accrued interest | 54,087 | 54,671 |
Notes payable | 0 | 121,132 |
Accounts payable and accrued expense | 516,659 | 339,443 |
Net cash provided by (used for) operating activities | (1,055,704) | (673,357) |
Cash Flows From Investing Activities: | ||
Purchase of fixed assets | (6,406) | 0 |
Purchase of private company equity | (39,490) | 0 |
Changes in intangible assets | 0 | 62,435 |
Net cash provided by (used for) investing activities | (45,896) | 62,435 |
Cash Flows From Financing Activities: | ||
Proceeds from the sale of preferred stock | 55,000 | 0 |
Proceeds from convertible loans, net of repayments | 388,083 | 534,000 |
Proceeds from notes payable, net of repayment | 238,560 | (3,490) |
Proceeds from the sale of common stock in private placements | 291,064 | 0 |
Proceeds (repayment of related party loans), net | (233,539) | (83,259) |
Net cash provided by (used for) financing activities | 739,168 | 447,251 |
Effect of exchange rates on cash and cash equivalents | 137,621 | 165,917 |
Net Increase (Decrease) In Cash | (224,811) | 2,246 |
Cash At The Beginning Of The Period | 334,969 | 1,547 |
Cash At The End Of The Period | 110,158 | 3,793 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | 0 | 0 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Common stock issued as a financing expense on convertible notes | 50,085 | 130,849 |
Common stock issued for advertising expense | 189,000 | 153,000 |
Common stock issued related to investment in Great Northern Cannabis | 0 | 2,478,422 |
Common stock issued to convert convertible notes and accrued interest into equity | $ 764,353 | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 60,000 | $ 475,000 | $ 3,649 | $ (13) | $ 61,619,415 | $ (57,441,549) | $ 137,696 | $ 4,854,198 |
Beginning balance, shares at Dec. 31, 2019 | 60,000 | 475,000 | 36,486,999 | 133,200 | ||||
Net income (loss) | (4,214,818) | (4,214,818) | ||||||
Change in foreign currency translation | (67,273) | (67,273) | ||||||
Commitment shares issued with convertible note | $ 15 | 130,834 | 130,849 | |||||
Commitment shares issued with convertible note, shares | 153,940 | |||||||
Beneficial conversion feature of convertible notes | 438,000 | 438,000 | ||||||
Stock based compensation related to warrant issuances | 206,579 | 206,579 | ||||||
Ending balance, value at Mar. 31, 2020 | $ 60,000 | $ 475,000 | $ 3,664 | $ (13) | 62,394,828 | (61,656,367) | 70,423 | 1,347,534 |
Ending balance, shares at Mar. 31, 2020 | 60,000 | 475,000 | 36,640,939 | 133,200 | ||||
Net income (loss) | (1,472,479) | (1,472,479) | ||||||
Change in foreign currency translation | 13,481 | 13,481 | ||||||
Stock based compensation related to warrant issuances | 206,579 | 206,579 | ||||||
Shares issued for services | $ 30 | 152,970 | 153,000 | |||||
Shares issued for services, shares | 300,000 | |||||||
Shares received from share exchange with GN | $ 551 | 2,477,871 | 2,478,422 | |||||
Shares received from share exchange with GN, shares | 5,507,400 | |||||||
Ending balance, value at Jun. 30, 2020 | $ 60,000 | $ 475,000 | $ 4,245 | $ (13) | 65,232,248 | (63,128,846) | 83,904 | 2,726,536 |
Ending balance, shares at Jun. 30, 2020 | 60,000 | 475,000 | 42,448,339 | 133,200 | ||||
Beginning balance, value at Dec. 31, 2020 | $ 60,000 | $ 475,000 | $ 4,699 | $ (13) | 68,336,249 | (77,331,820) | (345,714) | (8,801,599) |
Beginning balance, shares at Dec. 31, 2020 | 60,000 | 475,000 | 46,986,794 | 133,200 | ||||
Net income (loss) | 1,197,974 | 1,197,974 | ||||||
Change in foreign currency translation | (96,578) | (96,578) | ||||||
Conversion of Series A Preferred to common stock | $ (200) | $ 25 | 175 | |||||
Conversion of Series A Preferred to common stock, shares | (200) | 250,000 | ||||||
Conversion of convertible notes to common shares | $ 144 | 192,426 | 192,570 | |||||
Conversion of convertible notes to common shares, shares | 1,442,101 | |||||||
Sale of common stock in private placement | $ 86 | 244,018 | 244,104 | |||||
Sale of common stock in private placement, shares | 860,000 | |||||||
Loss on loan conversions | 282,289 | 282,289 | ||||||
Beneficial conversion feature of convertible notes | 34,205 | 34,205 | ||||||
Stock based compensation related to warrant issuances | 96,700 | 96,700 | ||||||
Ending balance, value at Mar. 31, 2021 | $ 59,800 | $ 475,000 | $ 4,954 | $ (13) | 69,186,061 | (76,133,846) | (442,293) | (6,850,337) |
Ending balance, shares at Mar. 31, 2021 | 59,800 | 475,000 | 49,538,895 | 133,200 | ||||
Net income (loss) | (1,665,409) | (1,665,409) | ||||||
Change in foreign currency translation | (77,042) | (77,042) | ||||||
Purchase of Series A Preferred | $ 1,760 | 53,240 | 55,000 | |||||
[custom:PurchaseOfseriesPreferreds] | 1,760 | |||||||
Conversion of Series A Preferred to common stock | $ (3,380) | $ 423 | 2,958 | |||||
Conversion of Series A Preferred to common stock, shares | (3,380) | 4,225,000 | ||||||
Conversion of convertible notes to common shares | $ 1,753 | 762,600 | 764,353 | |||||
Conversion of convertible notes to common shares, shares | 17,531,700 | |||||||
Sale of common stock in private placement | $ 40 | 46,920 | 46,960 | |||||
Sale of common stock in private placement, shares | 400,000 | |||||||
Loss on loan conversions | 706,974 | 706,974 | ||||||
Issuance of common stock for services | $ 180 | 188,820 | 189,000 | |||||
Issuance of common stock for services, shares | 1,800,000 | |||||||
Commitment shares issued with convertible note | $ 27 | 50,059 | 50,085 | |||||
Commitment shares issued with convertible note, shares | 265,000 | |||||||
Beneficial conversion feature of convertible notes | 289,426 | 289,426 | ||||||
Stock based compensation related to warrant issuances | 96,700 | 96,700 | ||||||
Ending balance, value at Jun. 30, 2021 | $ 58,180 | $ 475,000 | $ 7,376 | $ (13) | $ 71,383,756 | $ (77,799,255) | $ (519,334) | $ (6,394,290) |
Ending balance, shares at Jun. 30, 2021 | 58,180 | 475,000 | 73,760,595 | 133,200 |
NATURE OF OPERATIONS AND SIGNIF
NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES Nature of Operations CannaPharmaRx, Inc. (the “Company”) is a Delaware corporation. In November 2018 it formed an Ontario corporation, Hanover CPMD Acquisition Corporation, to facilitate the acquisition described below. As of the date of this Report, the Company intends to engage in acquisitions or joint ventures with a company or companies that will allow to become a national or internationally branded cannabis cultivation company, or otherwise engage in the cannabis industry. Management is engaged in seeking out and evaluating businesses for acquisition. However, if an opportunity in another industry arises the Company will review that opportunity as well. History The Company was originally incorporated in the State of Colorado in August 1998 under the name “Network Acquisitions, Inc.” It changed its name to Cavion Technologies, Inc. in February 1999 and subsequently to Concord Ventures, Inc. in October 2006. On December 21, 2000, the Company filed for protection under Chapter 11 of the United States Bankruptcy Code. In connection with the filing, on February 16, 2001, the Company sold its entire business, and all of its assets, for the benefit of its creditors. After the sale, the Company still had liabilities of $8.4 million and was subsequently dismissed by the Court from the Chapter 11 reorganization, effective March 13, 2001, at which time the last of the Company’s then remaining directors resigned. On March 13, 2001, the Company had no business or source of income, no assets, no employees or directors, outstanding liabilities of approximately $8.4 million, and had terminated its duty to file reports under securities law. In February 2008, after filing of a Form 10 registration statement pursuant to the Securities Exchange Act of 1934, as amended, we were re-listed on the OTC Bulletin Board. In April 2010, the Company re-domiciled in Delaware under the name CCVG, Inc. (“CCVG”). Effective December 31, 2010, the Company completed an Agreement and Plan of Merger and Reorganization (the “Reorganization") which provided for the merger of two of the Company’s wholly-owned subsidiaries. As a result of this reorganization, the Company’s name became “Golden Dragon Inc.,” which became the surviving publicly quoted parent holding company. On May 9, 2014, the Company entered into a Share Purchase Agreement (the “ Share Purchase Agreement Canna Colorado In October 2014, the Company changed its legal name to “CannaPharmaRx, Inc.” In April 2016, the Company ceased operations. As a result, the Company was then considered a “shell” company as defined under the Securities Exchange Act of 1934, as amended, as defined in Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act. Effective December 31, 2018, the Company and Hanover CPMD Acquisition Corp. (“CPMD Hanover”) a newly formed, wholly-owned subsidiary, entered into a Securities Purchase Agreement with Alternative Medical Solutions, Inc., an Ontario, Canada corporation (“AMS”), its shareholders, wherein the Company acquired all of the issued and outstanding securities of AMS. AMS is a corporation organized under the laws of the Province of Ontario, Canada. It is a late-stage marijuana licensed producer applicant in Canada. It is currently in the Pre-License Inspection and Licensing phase, which is Stage 5 of 6, with a fully approved license. Upon completion of the final construction of the facility, Health Canada will inspect the facility and relevant operating procedures to ensure it meets the standards that have been approved in the application. There can be no assurances that the Company will receive this license. The facility is a 48,750 square foot marijuana grow facility built on a 6.7-acre parcel of land located in Hanover, Ontario Canada. To date, the exterior construction of the building has been completed. However, no interior construction has begun. Upon full completion, the facility will contain up to 20 separate growing rooms which we believe will provide an annual production capacity of 9,500 kilos of marijuana (20,900 lbs.). Completion of the build-out of the facility is expected to take an estimated 20 weeks. Together with the remaining equipment needed to complete the grow the Company estimates that it will require approximately CAD$20.0 million in additional financing which it may seek to raise via equity and debt. There can be no assurances that the Company will successfully raise the financing required to complete the construction of the facility and begin cultivation. As a result of the completion of the acquisition of AMS on December 31, 2019, the Company no longer fits the definition of a “shell company,” as defined in Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act. It filed the required disclosure on Form 8-K/A with the SEC on February 14, 2019, advising that it was no longer a shell company pursuant to the aforesaid Rule. On January 6, 2021, the Company executed an Agreement of Purchase and Sale through its wholly owned subsidiary, Alternative Medical Solutions Inc. for the sale of the lands and premises located at Hanover, Ontario, Canada. The price is $2,000,000 CAD. As a result, and in anticipation of the closing, the Company recorded an impairment of goodwill and fixed assets relating to the property of $ 7,962,694 Effective February 25, 2019, the Company acquired 3,936,500 2,500,000 7,988,963 5,507,400 3,671,597 GN owns a 60,000 square foot cannabis cultivation and grow facility located on 38 acres in Stevensville, Ontario, Canada. Because the Company is a minority shareholder of GN and GN is a privately held company, the Company cannot confirm that the information it currently has on GN’s operations is complete or fully reliable. GN estimates annual total production capacity from the Stevensville facility of up to 12,500 kilograms of cannabis. GN believes the Stevensville facility to be complete, and GN’s subsidiary, 9869247 Canada Limited, received a license to cultivate from the Canadian Ministry of Health on July 5, 2019. As a result, in October 2019, GN commenced cultivation activities and began generating revenues during the first calendar quarter of 2020. The Company expects that it will obtain additional information on the business activities of GN as it has renewed discussions to acquire additional interests and is performing its due diligence procedures. Effective June 11, 2019, the Company entered into a Securities Purchase Agreement with Sunniva, Inc, a British Columbia, Canada corporation (“Sunniva”) wherein the Company agreed to acquire all of the issued and outstanding securities of Sunniva’s wholly-owned subsidiaries Sunniva Medical Inc. (“SMI”) and 1167025 B.C. LTD (“1167025”) for CAD $16.0 million in cash and a note in the principal amount of CAD $4.0 million. These companies are the current owners of the Sunniva Canada Campus, which includes construction assets for a planned 759,000 square-foot greenhouse located on an approximately 114-acre property in Okanagan Falls, British Columbia. On June 8, 2020, the Company received a notice of termination of this Purchase Agreement, as amended, from Sunniva. As a result, the Company incurred a charge of $ 1,881,126 COVID-19 On March 11, 2020, the World Health Organization (“WHO”) declared the Covid-19 outbreak to be a global pandemic. In addition to the devastating effects on human life, the pandemic is having a negative ripple effect on the global economy, leading to disruptions and volatility in the global financial markets. Most US states and many countries have issued policies intended to stop or slow the further spread of the disease. Covid-19 Basis of Presentation The accompanying financial statements have been prepared in accordance with the Financial Accounting Standards Board (“ FASB Codification GAAP All figures are in U.S. dollars unless indicated otherwise. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The most significant estimates relate to purchase price allocation of acquired businesses, impairment of long-lived assets and goodwill, valuation of financial instruments, income taxes, and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. Cash and Cash Equivalents The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. On June 30, 2021, and December 31, 2020, the Company cash and cash equivalents totaled $ 110,158 334,969 Comprehensive Gain or Loss ASC 220 “Comprehensive Income,” establishes standards for the reporting and display of comprehensive income and its components in the financial statements. As of June 30, 2021, and December 31, 2020, the Company determined that it had items that represented components of comprehensive income and, therefore, has included a statement of comprehensive income in the financial statements. Reclassifications Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position. Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risk. Terms of convertible and other promissory notes are reviewed to determine whether they contain embedded derivative instruments that are required to be accounted for separately from the host contract and recorded on the balance sheet at fair value. The fair value of derivative liabilities is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. For the periods ended June 30, 2021, and December 31, 2020, the Company had derivative liabilities of $ 598,676 3,676,649 Beneficial Conversion Features In accordance with FASB ASC 470-20, “Debt with Conversion and Other Options” the Company records a beneficial conversion feature (“BCF”) related to the issuance of convertible debt or preferred stock instruments that have conversion features at fixed rates that are in-the-money when issued. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The intrinsic value is generally calculated at the commitment date as the difference between the conversion price and the fair value of the common stock or other securities into which the security is convertible, multiplied by the number of shares into which the security is convertible. If certain other securities are issued with the convertible security, the proceeds are allocated among the different components. The portion of the proceeds allocated to the convertible security is divided by the contractual number of the conversion shares to determine the effective conversion price, which is used to measure the BCF. The effective conversion price is used to compute the intrinsic value. The value of the BCF is limited to the basis that is initially allocated to the convertible security. Foreign Currency Translation The functional currency and the reporting currency of CannaPharmaRx US operations is United States dollars, (“USD”). The functional currency of the Company’s Canadian operations in Canadian dollars (“CAD”), Management has adopted ASC 830 “Foreign Currency Matters” for transactions that occur in foreign currencies. Monetary assets denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Average monthly rates are used to translate revenues and expenses. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods. Assets and liabilities of the Company’s operations are translated into the reporting currency, United States dollars, at the exchange rate in effect at the balance sheet dates. Revenue and expenses are translated at average rates in effect during the reporting periods. Equity transactions are recorded at the historical rate when the transaction occurred. The resulting translation adjustment is reflected as accumulated other comprehensive income, a separate component of stockholders' equity in the statement of stockholders' equity. These translation adjustments are reflected in accumulated other comprehensive income, a separate component of the Company's stockholders' equity. Harmonized Sales Tax The Harmonized Sales Tax (“HST”) is a combination of the Canadian Goods and Services Tax (“GST”) and Provincial Sales Tax (“PST”) that is applied to taxable goods and services. By fusing sales tax at the federal level with sales tax at the provincial level, the participating provinces harmonized both taxes into a single federal-provincial sales tax. HST is a consumption tax paid by the consumer at the point of sale (POS). The vendor or seller collects the tax proceeds from consumers by adding the HST rate to the cost of goods and services. They then remit the total collected tax to the government periodically. The HST is in effect in five of the ten Canadian provinces: New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island. The HST is collected by the Canada Revenue Agency (CRA), which remits the appropriate amounts to the participating provinces. The HST may differ across these five provinces, as each province will set its own PST rates within the HST. In provinces and territories which have not enacted the HST, the CRA collects only the 5% goods and services tax. The current rate in Ontario is 13%. Capital Assets- Construction In Progress As of June 30, 2021, and December 31, 2020, the Company had $ 1,608,994 1,566,316 Stock-Based Compensation The Company has adopted ASC Topic 718, (Compensation—Stock Compensation) Long-Lived Assets The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances have indicated that an asset may not be recoverable. The long-lived asset is grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows is less than the carrying value of the assets, the assets are written down to the estimated fair value. The Company evaluated the recoverability of its long-lived assets on December 31, 2020 on its subsidiaries with material amounts on their respective balance sheets and determined that an impairment $ 146,084 The Company had a net balance at June 30, 2021 of $ 7,717 Fair Values of Assets and Liabilities The Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to determine fair value. Level 1: Valuation is based on quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2: Valuation is based on observable inputs other than Level 1 prices, such as quoted 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. For example, Level 2 assets and liabilities may include debt securities with quoted prices that are traded less frequently than exchange-traded instruments. Level 3: Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments and long-term derivative contracts. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company may also be required, from time to time, to measure certain other financial assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets. During the period ended December 31, 2020, the Company wrote down its fixed assets at the Hanover facility of approximately $ 186,000 Financial Instruments The estimated fair value for financial instruments was determined at discrete points in time based on relevant market information. These estimates involve uncertainties and could not be determined with exact precision. The fair value of the Company’s financial instruments, which include cash, prepaid expenses, accounts payable, and the related party loan, each approximate their carrying value due either to their short length to maturity or interest rates that approximate prevailing market rates. Income Taxes The Company accounts for income taxes under the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Income (Loss) Per Share Income (loss) per share is presented in accordance with Accounting Standards Update (“ ASU Earning per Share EPS Business Segments The Company’s activities during the three months ended June 30, 2021 and the year ended December 31, 2020, comprised a single segment. Recently Issued Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations. The Company adopted ASC 842 on January 1, 2019. However, the adoption of the standard had no impact on the Company’s financial statements since all Company leases are month to month or short-term rental. The Company adopted ASU 2019-12, Income Taxes, Topic 740 on January 1, 2021. There is no material impact on the Company’s financial statements. |
GOING CONCERN AND LIQUIDITY
GOING CONCERN AND LIQUIDITY | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN AND LIQUIDITY | NOTE 2. GOING CONCERN AND LIQUIDITY As of June 30, 2021 and December 31, 2020, the Company had $ 110,158 334,969 14,761,780 6,394,290 These financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. Based on its current financial projections, the Company believes it does not have sufficient existing cash resources to fund its current limited operations. It is the Company’s current intention to raise debt and/or equity financing to fund ongoing operating expenses. There is no assurance that these events will be satisfactorily completed or at terms acceptable to the Company. Any issuance of equity securities, if accomplished, could cause substantial dilution to existing stockholders. Any failure by the Company to successfully implement these plans would have a material adverse effect on its business, including the possible inability to continue operations. |
DEPOSITS
DEPOSITS | 6 Months Ended |
Jun. 30, 2021 | |
Deposits | |
DEPOSITS | NOTE 3. DEPOSITS As of June 30, 2021, and December 31, 2020, the Company had deposits of $ 80,680 0 1,308,830 On January 6, 2021 the Company executed an Agreement of Purchase and Sale through its wholly owned subsidiary, Alternative Medical Solutions Inc. for the sale of lands and premises located at Hanover, Ontario, Canada. A description of the property is detailed in Note 1 of these financial statements. The purchase price is $2,000,000 CAD. As a result, and in anticipation of the closing, the Company has recorded an impairment of goodwill and fixed assets relating to the property of $7,962,694 $80,680 |
PREPAID EXPENSES
PREPAID EXPENSES | 6 Months Ended |
Jun. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES | NOTE 4. PREPAID EXPENSES The following table sets forth the components of the Company’s prepaid expenses on June 30, 2021, and December 31, 2020: Schedule of prepaid expenses June 30, 2021 December 31, 2020 Prepaid expenses(a) 159,654 132,031 Prepaid financing(b) 209,500 – Total $ 369,154 $ 132,031 a) This prepayment remains in trust, from proceeds of the Astor Street, LLC promissory notes, currently being held with the intention of forming part of the initial payment of the pending Cremona acquisition. On March 29, 2021, the Company received the acceptance our Offer to Purchase certain assets and facilities located in Cremona, Alberta, Canada. The purchase price is $12,550,000 CAD. The Company has paid a $200,000 CAD deposit and closing is expected on April 29, 2021. The 55,200 square foot facility is capable of producing 5,200 kilograms of cannabis biomass per year. The facility previously held Health Canada licenses for cultivation and sales of medical dried flower, as well as extract and edible sales. After closing of the transaction, the Company intends to apply for new Health Canada licenses. Funding for this acquisition is in the due diligence phase. b) The Company has paid $209,500 in commitment fees to two arms length parties to arrange financing for pending Cremona acquisition. This financing is currently in the due diligence phase. |
INVESTMENT
INVESTMENT | 6 Months Ended |
Jun. 30, 2021 | |
Investments, All Other Investments [Abstract] | |
INVESTMENT | NOTE 5. INVESTMENT As of June 30, 2021, and December 31, 2020, the balance of investments was 6,750,779 and $6,711,289, respectively. On February 25, 2019, the Company acquired 3,936,500 2,500,000 7,988,963 11,264,438 7,070,841 4,193,597 On May, 2020, the Company exchanged 5,507,400 3,671,597 2,478,422 6,672,019 On October 6, 2020, the Company invested $ 50,000 83,333 On January 15, 2021, the Company invested an additional $ 50,000 83,333 |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT, AND EQUIPMENT | NOTE 6. PROPERTY, PLANT, AND EQUIPMENT The following table sets forth the components of the Company’s property and equipment on June 30, 2021, and December 31, 2020: Property and Equipment June 30, 2021 December 31, 2020 Gross Carrying Amount Accumulated Depreciation Net Book Value Gross Carrying Amount Accumulated Depreciation Net Book Value Computers, software, and office equipment $ 11,408 $ (3,691 ) $ 7,717 $ 4,869 $ (2,435 ) $ 2,435 Land – – – – – – Construction in progress 1,608,994 – 1,608,994 1,566,316 – 1,566,316 Total fixed assets $ 1,620,402 $ (3,691 ) $ 1,616,711 $ 1,571,185 $ (2,435 ) $ 1,566,316 For the periods ended June 30, 2021, and 2020, the Company recorded depreciation expense of $ 1,184 758 As of June 30, 2021 and December 31, 2020, the Company had $ 1,608,994 1,566,316 For construction in-progress assets, no depreciation is recorded until the asset is placed in service. When construction is completed, the asset should be reclassified as building, building improvements, or land improvement and should be capitalized and depreciated. Construction in progress includes all costs related to the construction of a medical cannabis facility. Cost also includes soft costs such as loan fees and interest and consulting fees and related expenses. The facility is not available for use and therefore not being amortized. The Company entered into a Purchase and Sale Agreement with a prospective buyer on January 6, 2021. This transaction closed on July 9, 2021 for proceeds of $2,000,000 CAD. Proceeds were used to retire and discharge the note for a repayment of principal of $1,000,000, interest of $124,735 and penalties of $475,265. |
ACCOUNT PAYABLE AND ACCRUED LIA
ACCOUNT PAYABLE AND ACCRUED LIABILITIES | 6 Months Ended |
Jun. 30, 2021 | |
Payables and Accruals [Abstract] | |
ACCOUNT PAYABLE AND ACCRUED LIABILITIES | NOTE 7. ACCOUNT PAYABLE AND ACCRUED LIABILITIES Accounts payables are recognized initially at the transaction price and subsequently measured at the undiscounted amount of cash or other consideration expected to be paid. Accrued expenses are recognized based on the expected amount required to settle the obligation or liability. The following table sets forth the components of the Company’s accrued liabilities on June 30, 2021 and December 31, 2020. Schedule of accounts payable and accrued liabilities June 30, 2021 December 31, 2020 Accounts payable and accrued expenses $ 4,116,507 $ 3,585,000 Accrued interest (a) 152,238 96,477 Accrued legal settlement (b) 190,000 190,000 Total accounts payable and accrued liabilities $ 4,458,745 $ 3,871,477 (a) Represents interest accrued on the outstanding convertible notes and other notes - see Note 11, Notes Payables) (b) The Company had previously been a party to an action filed by Gary M. Cohen, a former officer and director of the Company in 2014. In March 2015, the Company entered into a Settlement Agreement with Mr. Cohen wherein the Company agreed to repurchase 2,250,000 shares of its Common Stock from Mr. Cohen in consideration for $350,000. Mr. Cohen passed away while there was a remaining balance of $190,000 remaining to be paid in accordance with the Settlement Agreement. The Company has taken the position that his death has discharged any obligation the Company might have to make the balance of the payments. The Company has not received any demand for payment or otherwise been involved in any attempt to collect this balance for a period of greater than two years prior to the date of this Report. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 8. RELATED PARTY TRANSACTIONS The following table sets forth the components of the Company’s related party liabilities on June 30, 2021 and December 31, 2020. Schedule of related party transactions June 30, 2021 December 31, 2020 Loan payable, related parties $ 41,219 $ 274,758 Total loan payable, related parties $ 41,219 $ 274,758 Interest-free loans of $41,219 from the Company’s CEO and a director, respectively, amounting to $21,461 and $19,758 due to former directors. Effective March 22, 2019, the Company established its principal place of business and leases offices at 3600, 888 – 3rd St SW, Calgary, Alberta, Canada, T2P 5C5. The lease may be terminated by either party on 30 days’ notice. Rent is $2,000 CAD per month effective October 1, 2020 (retroactively reduced from $4,000 per month). This space was provided by a company to which, Mr. Orman, one of the Company’s directors, serves as a Director. See Note 14, Subsequent Events, below, for additional related party transactions. |
CONVERTIBLE NOTES AND DERIVATIV
CONVERTIBLE NOTES AND DERIVATIVE LIABILITIES | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES AND DERIVATIVE LIABILITIES | NOTE 9. CONVERTIBLE NOTES AND DERIVATIVE LIABILITIES The following tables set forth the components of the Company’s, convertible debentures as of June 30, 2021 and December 31, 2020: Components of convertible debentures June 30, December 31, Principal value of convertible notes $ 1,093,728 $ 1,662,000 Note discount (280,938 ) (664,442 ) Total convertible notes, net current $ 812,790 $ 997,558 On July 8, 2019, the Company commenced a private offering of Units at a price of $50,000 per Unit, each Unit consisting of 50,000 shares of the Company’s Common Stock and one $50,000 unsecured Convertible Note 31 1,550,000 1,550,000 In addition, the 5,505,530 5,075,000 1,550,000 3,525,000 552,602 During the year ended December 31, 2020, the Company issued a total of 24 582,500 595,500 1,000,500 160,000 100,000 135,000 During the year ended December 31, 2020 the Company recorded $ 257,345 1,690,933 664,442 During the year ended December 31, 2020 the Company issued 4,067,332 1,984,000 566,408 June 30, 2021 Activity During the six-month period ended June 30, 2021, the Company received proceeds from convertible notes of $ 388,083 During the six months ended June 30, 2021 the Company recorded $ 43,030 735,949 27,503 280,938 100,000 During the six months ended June 30, 2021 the Company issued 18,973,801 956,355 As of June 30, 2021, derivative liabilities were valued using a probability-weighted average Black-Scholes-Merton pricing model with the following assumptions: Schedule of assumptions used June 30, 2021 Exercise Price $ 0.0276 – 0.0345 Stock Price $ 0.05 Risk-free interest rate .08% Expected volatility 128.50% Expected life (in years) 0.50 - 1.00 Expected dividend yield 0% Fair Value: $ 598,676 The risk-free interest rate was based on rates established by the Federal Reserve Bank. The Company uses the historical volatility of its common stock to estimate the future volatility for its common stock. The expected life of the conversion feature of the notes was based on the remaining term of the notes. The expected dividend yield was based on the fact that the Company has not customarily paid dividends in the past and does not expect to pay dividends in the future. During the six months ended June 30, 2021 the Company recognized a gain of $ 3,077,973 969,102 |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2021 | |
Notes Payable | |
NOTES PAYABLE | NOTE 10. NOTES PAYABLE The following tables set forth the components of the Company’s, notes payable as of June 30, 2021 and December 31, 2020: Schedule of notes payable June 30, December 31, Principal value of Promissory Note $ 9,459,536 $ 8,977,721 Loan discounts (127,878 ) (248,972 ) Promissory Note, long term net of discount $ 9,331,658 $ 8,728,749 Pursuant to the terms of the Securities Purchase Agreement with AMS the Company issued a non-interest bearing CAD $ 10,000,000 7,330,000 December 31, 2021 The Company performed a valuation study as part of the AMS acquisition. The valuation study determined that the Promissory Note should be valued at $ 6,632,917 697,083 735,949 On July 3, 2019, the Company entered into a 12% $ 1,000,000 June 28, 2020 60,000 1,001,000 890,570 On April 21, 2020, the Company received a loan from the Government of Canada under the Canada Emergency Business Account program (CEBA). This loan was in the amount of $ 40,000 29,352 3 20,000 15,708 During the six months ended June 30, 2021 the Company entered into Note Agreements with secured investors amounting to $ 238,560 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11. INCOME TAXES As of June 30, 2021, the Company has approximately $ 75,600,000 2030 2034 The tax years from 2014 and forward remain open to examination by federal and state authorities due to net operating loss and credit carryforwards. The Company is currently not under examination by the Internal Revenue Service or any other taxing authorities. Since the company has never been profitable, the Company has established a full valuation allowance against the deferred tax asset associated with the NOLS. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12. COMMITMENTS AND CONTINGENCIES Effective March 22, 2019, the Company entered into a lease agreement to lease three offices at 3600 888 3 St SW, Calgary, Alberta, Canada, T2P 5C5. The lease may be terminated by either party on 30 days’ notice. Rent is $2,000 CAD per month (reduced from $4,000 per month effective October 1, 2020 retroactively adjusted). This space was provided by a company to which, Mr. Orman, one of the Company’s directors, serves as a Director. On March 29, 2021, the Company received the acceptance our Offer to Purchase certain assets and facilities located in Cremona, Alberta, Canada. The purchase price is $12,550,000 CAD. The Company has paid a $200,000 CAD deposit and closing is expected on April 29, 2021. The 55,200 square foot facility is capable of producing 5,200 kilograms of cannabis biomass per year. The facility previously held Health Canada licenses for cultivation and sales of medical dried flower, as well as extract and edible sales. After closing of the transaction, the Company intends to apply for new Health Canada licenses. Funding for this acquisition is in the due diligence phase. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 13. STOCKHOLDERS’ EQUITY Series A Preferred Stock In April 2018, the Company issued 60,000 1.00 · entitles the holder thereof to 1,250 votes on all matters submitted to a vote of the shareholders: · The holders of outstanding Series A Convertible Preferred Stock shall only be entitled to receive dividends upon declaration by the Board of Directors of a dividend payable on the Company’s Common Stock, whereupon the holders of the Series A Convertible Preferred Stock shall receive a dividend on the number of shares of Common Stock into which each share of Series A Convertible Preferred Stock is convertible; · Each Series A Preferred Share is convertible into 1,250 shares of Common Stock · not redeemable. The beneficial conversion (“BCF”) feature attributed to the purchase of Preferred Stock was deemed to have no value on the date of purchase because there was no public trading market for the Convertible Preferred Stock, and none is expected to develop in the future. Therefore, the BCF related to the Preferred Shares was considered to have no value on the date of issuance. The Company is authorized to issue up to 100,000 shares of Series A Preferred Stock, par value of $1.00. There were 58,180 60,000 The Board of Directors may, without stockholder approval, determine the dividend rates, redemption prices, preferences on liquidation or dissolution, conversion rights, voting rights, and any other preferences. Series B Preferred Stock / Common Stock In February 2019, the Company commenced an offering of up to $3 million in principal amount of Units at a price of $1.00 per Unit, each Unit consisting of one share of Series “B” Convertible Preferred Stock, each Convertible Preferred Share convertible into one share of the Company’s Common Stock at the election of the holder and one Common Stock Purchase Warrant exercisable to purchase one share of Common Stock at an exercise price of $2.00 per share, which offering is to be offered only to “accredited investors,” as that term is defined in Rule 501 of Regulation D. This Offering was closed at the end of August 2019. As of December 31, 2020, the Company had accepted $475,000 in subscriptions in this offering. The Company is authorized to issue 3,000,000 shares of Series B Preferred Stock, par value of $1.00. There were 475,000 shares of Series B Convertible Preferred Stock issued and outstanding as of June 30, 2021, and December 31, 2020, respectively. The Company is authorized to issue 300,000,000 0.0001 73,760,595 The Board of Directors may, without stockholder approval, determine the dividend rates, redemption prices, preferences on liquidation or dissolution, conversion rights, voting rights, and any other preferences. Shares Issued in Connection with the Assignment Agreement with Great Northern Ltd On September 28, 2018, Great Northern Cannabis, Ltd (“GN”), entered a Letter of Intent with P2P Green Power Energy Solutions and certain individuals to acquire all of the issued and outstanding shares of AMS. On October 10, 2018, the Company entered into an Assignment and Assumption Agreement (“the AA Agreement”) with GN. Under the terms of the AA Agreement, the Company essentially purchased the right to acquire AMS from GN for the following consideration: · A refundable payment of CAD $200,000 · An accountable reimbursement of GN expenses and fees related to the AMS acquisition not to exceed CAD $300,000 · In the event that we didn’t enter into a management agreement with GN post-closing, we agreed to issue GN, 2,500,000 shares of our Common Stock trading under symbol “CPMD” All of the above consideration was expressly contingent upon the closing of the AMS acquisition which was consummated by the Company on December 31, 2019. The payments of $200,000 and $300,000 were made to GN. On August 30, 2019, the parties determined that no management agreement had been entered into so the Company issued 2,500,000 shares to GN valued at $5,800,000 as required pursuant to the Agreement. Under the guidelines of ASC 805, Business Combinations, since we disclosed that the AMS transaction was complete, the goodwill re-measurement period ended and therefore we could not adjust goodwill for this transaction. As a result, we recorded an acquisition expense on the Company’s income statement for $ 5,800,000 Shares Reserved for Issuance As of June 30, 2021, the Company had 272,654,379 72,725,000 475,000 197,131,851 2,322,528 Stock Options During the period ended June 30, 2021 and December 31, 2020, the Company did not record any stock-based compensation expense related to stock options, as there were none outstanding. Stock Purchase Warrants The following table reflects all outstanding and exercisable warrants on June 30, 2021 and December 31, 2020: Warrant activity Number of Warrants Outstanding (a) Weighted Average Exercise Price Average Remaining Contractual Life (Years) Warrants outstanding, January 1, 2018 – $ – – Warrants issued 350,000 0.57 1.50 Warrants exercised – – – Warrant forfeited – – – Warrants outstanding, December 31, 2018 350,000 $ 0.57 .12 Warrants issued (a) 1,519,750 $ 1.01 .59 Warrants outstanding December 31, 2019 1,869,750 $ 0.92 .80 Warrants exercised (25,000 ) – – Warrants outstanding December 31, 2020 1,844,750 $ 0.92 .50 Warrants issued (b) 477,778 $ 0.30 5.00 Warrants outstanding June 30, 2021 2,322,528 - Stock purchase warrants are exercisable for two-five years from the date of issuance. (a) The number of warrants reflected in this table does not include 475,000 warrants that were issued at various times during 2019 in connection with the issuance of the Company’s Series B Preferred stock. These warrants are exercisable for three years at a strike price of $2.00 per share. The Company accounts for warrants issued to purchase shares of its common stock or preferred stock as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity. Therefore, no stock-based compensation expense was recorded for the issuance of these 475,000 warrants. (b) The Company issued 477,448 common share purchase warrants during the second quarter to an accredited investor as part of a convertible debenture. These warrants are exercisable at $0.30 per share and expire at the end of five years. The value of the stock purchase warrants for the periods ended June 30, 2021, and December 31, 2020, was determined using the following Black-Scholes methodology: Assumptions used Expected dividend yield (1) 0.00 Risk-free interest rate range (2) 1.75 2.91 Volatility range (3) 1.23 442.92 Expected life (in years) 2.00 5.00 _____________ (1) The Company has no history or expectation of paying cash dividends on its Common Stock. (2) The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the awards in effect at the time of grant. (3) The volatility of the Company’s Common Stock is based on trading activity for the previous three year period ended at each stock purchase warrant contract date. During the six month period ended June 30, 2021 and June 30, 2020, the Company recorded $193,399 and $413,158, respectively, in stock-based compensation. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14. SUBSEQUENT EVENTS On July 2, 2021, the Company issued 1600 Preferred A shares to an accredited investor at $31.25 per share for net proceeds of $49,997. On July 9, 2021, the Company closed the sale of the Hanover property originally executed on January 6, 2021 to an arms-length party for proceeds of $2,000,000 CAD. These proceeds were used to repay the Koze mortgage against the property for $1,600,000 USD which included the original principal of $1,000,000 USD plus accrued interest of $124,735 USD and penalties of $475,265. This mortgage has now been discharged. On July 13, 2021, the Company issued 2400 Preferred A shares to an accredited investor at $31.25 per share for net proceeds of $75,000. On July 23, 2021, the Company issued 2400 Preferred A shares to an accredited investor at $31.25 per share for net proceeds of $75,000. |
NATURE OF OPERATIONS AND SIGN_2
NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations CannaPharmaRx, Inc. (the “Company”) is a Delaware corporation. In November 2018 it formed an Ontario corporation, Hanover CPMD Acquisition Corporation, to facilitate the acquisition described below. As of the date of this Report, the Company intends to engage in acquisitions or joint ventures with a company or companies that will allow to become a national or internationally branded cannabis cultivation company, or otherwise engage in the cannabis industry. Management is engaged in seeking out and evaluating businesses for acquisition. However, if an opportunity in another industry arises the Company will review that opportunity as well. |
History | History The Company was originally incorporated in the State of Colorado in August 1998 under the name “Network Acquisitions, Inc.” It changed its name to Cavion Technologies, Inc. in February 1999 and subsequently to Concord Ventures, Inc. in October 2006. On December 21, 2000, the Company filed for protection under Chapter 11 of the United States Bankruptcy Code. In connection with the filing, on February 16, 2001, the Company sold its entire business, and all of its assets, for the benefit of its creditors. After the sale, the Company still had liabilities of $8.4 million and was subsequently dismissed by the Court from the Chapter 11 reorganization, effective March 13, 2001, at which time the last of the Company’s then remaining directors resigned. On March 13, 2001, the Company had no business or source of income, no assets, no employees or directors, outstanding liabilities of approximately $8.4 million, and had terminated its duty to file reports under securities law. In February 2008, after filing of a Form 10 registration statement pursuant to the Securities Exchange Act of 1934, as amended, we were re-listed on the OTC Bulletin Board. In April 2010, the Company re-domiciled in Delaware under the name CCVG, Inc. (“CCVG”). Effective December 31, 2010, the Company completed an Agreement and Plan of Merger and Reorganization (the “Reorganization") which provided for the merger of two of the Company’s wholly-owned subsidiaries. As a result of this reorganization, the Company’s name became “Golden Dragon Inc.,” which became the surviving publicly quoted parent holding company. On May 9, 2014, the Company entered into a Share Purchase Agreement (the “ Share Purchase Agreement Canna Colorado In October 2014, the Company changed its legal name to “CannaPharmaRx, Inc.” In April 2016, the Company ceased operations. As a result, the Company was then considered a “shell” company as defined under the Securities Exchange Act of 1934, as amended, as defined in Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act. Effective December 31, 2018, the Company and Hanover CPMD Acquisition Corp. (“CPMD Hanover”) a newly formed, wholly-owned subsidiary, entered into a Securities Purchase Agreement with Alternative Medical Solutions, Inc., an Ontario, Canada corporation (“AMS”), its shareholders, wherein the Company acquired all of the issued and outstanding securities of AMS. AMS is a corporation organized under the laws of the Province of Ontario, Canada. It is a late-stage marijuana licensed producer applicant in Canada. It is currently in the Pre-License Inspection and Licensing phase, which is Stage 5 of 6, with a fully approved license. Upon completion of the final construction of the facility, Health Canada will inspect the facility and relevant operating procedures to ensure it meets the standards that have been approved in the application. There can be no assurances that the Company will receive this license. The facility is a 48,750 square foot marijuana grow facility built on a 6.7-acre parcel of land located in Hanover, Ontario Canada. To date, the exterior construction of the building has been completed. However, no interior construction has begun. Upon full completion, the facility will contain up to 20 separate growing rooms which we believe will provide an annual production capacity of 9,500 kilos of marijuana (20,900 lbs.). Completion of the build-out of the facility is expected to take an estimated 20 weeks. Together with the remaining equipment needed to complete the grow the Company estimates that it will require approximately CAD$20.0 million in additional financing which it may seek to raise via equity and debt. There can be no assurances that the Company will successfully raise the financing required to complete the construction of the facility and begin cultivation. As a result of the completion of the acquisition of AMS on December 31, 2019, the Company no longer fits the definition of a “shell company,” as defined in Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act. It filed the required disclosure on Form 8-K/A with the SEC on February 14, 2019, advising that it was no longer a shell company pursuant to the aforesaid Rule. On January 6, 2021, the Company executed an Agreement of Purchase and Sale through its wholly owned subsidiary, Alternative Medical Solutions Inc. for the sale of the lands and premises located at Hanover, Ontario, Canada. The price is $2,000,000 CAD. As a result, and in anticipation of the closing, the Company recorded an impairment of goodwill and fixed assets relating to the property of $ 7,962,694 Effective February 25, 2019, the Company acquired 3,936,500 2,500,000 7,988,963 5,507,400 3,671,597 GN owns a 60,000 square foot cannabis cultivation and grow facility located on 38 acres in Stevensville, Ontario, Canada. Because the Company is a minority shareholder of GN and GN is a privately held company, the Company cannot confirm that the information it currently has on GN’s operations is complete or fully reliable. GN estimates annual total production capacity from the Stevensville facility of up to 12,500 kilograms of cannabis. GN believes the Stevensville facility to be complete, and GN’s subsidiary, 9869247 Canada Limited, received a license to cultivate from the Canadian Ministry of Health on July 5, 2019. As a result, in October 2019, GN commenced cultivation activities and began generating revenues during the first calendar quarter of 2020. The Company expects that it will obtain additional information on the business activities of GN as it has renewed discussions to acquire additional interests and is performing its due diligence procedures. Effective June 11, 2019, the Company entered into a Securities Purchase Agreement with Sunniva, Inc, a British Columbia, Canada corporation (“Sunniva”) wherein the Company agreed to acquire all of the issued and outstanding securities of Sunniva’s wholly-owned subsidiaries Sunniva Medical Inc. (“SMI”) and 1167025 B.C. LTD (“1167025”) for CAD $16.0 million in cash and a note in the principal amount of CAD $4.0 million. These companies are the current owners of the Sunniva Canada Campus, which includes construction assets for a planned 759,000 square-foot greenhouse located on an approximately 114-acre property in Okanagan Falls, British Columbia. On June 8, 2020, the Company received a notice of termination of this Purchase Agreement, as amended, from Sunniva. As a result, the Company incurred a charge of $ 1,881,126 COVID-19 On March 11, 2020, the World Health Organization (“WHO”) declared the Covid-19 outbreak to be a global pandemic. In addition to the devastating effects on human life, the pandemic is having a negative ripple effect on the global economy, leading to disruptions and volatility in the global financial markets. Most US states and many countries have issued policies intended to stop or slow the further spread of the disease. |
Covid-19 | Covid-19 |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared in accordance with the Financial Accounting Standards Board (“ FASB Codification GAAP All figures are in U.S. dollars unless indicated otherwise. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The most significant estimates relate to purchase price allocation of acquired businesses, impairment of long-lived assets and goodwill, valuation of financial instruments, income taxes, and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. On June 30, 2021, and December 31, 2020, the Company cash and cash equivalents totaled $ 110,158 334,969 |
Comprehensive Gain or Loss | Comprehensive Gain or Loss ASC 220 “Comprehensive Income,” establishes standards for the reporting and display of comprehensive income and its components in the financial statements. As of June 30, 2021, and December 31, 2020, the Company determined that it had items that represented components of comprehensive income and, therefore, has included a statement of comprehensive income in the financial statements. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position. |
Derivative Financial Instruments | Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risk. Terms of convertible and other promissory notes are reviewed to determine whether they contain embedded derivative instruments that are required to be accounted for separately from the host contract and recorded on the balance sheet at fair value. The fair value of derivative liabilities is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. For the periods ended June 30, 2021, and December 31, 2020, the Company had derivative liabilities of $ 598,676 3,676,649 |
Beneficial Conversion Features | Beneficial Conversion Features In accordance with FASB ASC 470-20, “Debt with Conversion and Other Options” the Company records a beneficial conversion feature (“BCF”) related to the issuance of convertible debt or preferred stock instruments that have conversion features at fixed rates that are in-the-money when issued. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The intrinsic value is generally calculated at the commitment date as the difference between the conversion price and the fair value of the common stock or other securities into which the security is convertible, multiplied by the number of shares into which the security is convertible. If certain other securities are issued with the convertible security, the proceeds are allocated among the different components. The portion of the proceeds allocated to the convertible security is divided by the contractual number of the conversion shares to determine the effective conversion price, which is used to measure the BCF. The effective conversion price is used to compute the intrinsic value. The value of the BCF is limited to the basis that is initially allocated to the convertible security. |
Foreign Currency Translation | Foreign Currency Translation The functional currency and the reporting currency of CannaPharmaRx US operations is United States dollars, (“USD”). The functional currency of the Company’s Canadian operations in Canadian dollars (“CAD”), Management has adopted ASC 830 “Foreign Currency Matters” for transactions that occur in foreign currencies. Monetary assets denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Average monthly rates are used to translate revenues and expenses. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods. Assets and liabilities of the Company’s operations are translated into the reporting currency, United States dollars, at the exchange rate in effect at the balance sheet dates. Revenue and expenses are translated at average rates in effect during the reporting periods. Equity transactions are recorded at the historical rate when the transaction occurred. The resulting translation adjustment is reflected as accumulated other comprehensive income, a separate component of stockholders' equity in the statement of stockholders' equity. These translation adjustments are reflected in accumulated other comprehensive income, a separate component of the Company's stockholders' equity. |
Harmonized Sales Tax | Harmonized Sales Tax The Harmonized Sales Tax (“HST”) is a combination of the Canadian Goods and Services Tax (“GST”) and Provincial Sales Tax (“PST”) that is applied to taxable goods and services. By fusing sales tax at the federal level with sales tax at the provincial level, the participating provinces harmonized both taxes into a single federal-provincial sales tax. HST is a consumption tax paid by the consumer at the point of sale (POS). The vendor or seller collects the tax proceeds from consumers by adding the HST rate to the cost of goods and services. They then remit the total collected tax to the government periodically. The HST is in effect in five of the ten Canadian provinces: New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island. The HST is collected by the Canada Revenue Agency (CRA), which remits the appropriate amounts to the participating provinces. The HST may differ across these five provinces, as each province will set its own PST rates within the HST. In provinces and territories which have not enacted the HST, the CRA collects only the 5% goods and services tax. The current rate in Ontario is 13%. |
Capital Assets- Construction In Progress | Capital Assets- Construction In Progress As of June 30, 2021, and December 31, 2020, the Company had $ 1,608,994 1,566,316 |
Long-Lived Assets | Stock-Based Compensation The Company has adopted ASC Topic 718, (Compensation—Stock Compensation) Long-Lived Assets The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances have indicated that an asset may not be recoverable. The long-lived asset is grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows is less than the carrying value of the assets, the assets are written down to the estimated fair value. The Company evaluated the recoverability of its long-lived assets on December 31, 2020 on its subsidiaries with material amounts on their respective balance sheets and determined that an impairment $ 146,084 The Company had a net balance at June 30, 2021 of $ 7,717 |
Fair Values of Assets and Liabilities | Fair Values of Assets and Liabilities The Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to determine fair value. Level 1: Valuation is based on quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2: Valuation is based on observable inputs other than Level 1 prices, such as quoted 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. For example, Level 2 assets and liabilities may include debt securities with quoted prices that are traded less frequently than exchange-traded instruments. Level 3: Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments and long-term derivative contracts. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company may also be required, from time to time, to measure certain other financial assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets. During the period ended December 31, 2020, the Company wrote down its fixed assets at the Hanover facility of approximately $ 186,000 |
Financial Instruments | Financial Instruments The estimated fair value for financial instruments was determined at discrete points in time based on relevant market information. These estimates involve uncertainties and could not be determined with exact precision. The fair value of the Company’s financial instruments, which include cash, prepaid expenses, accounts payable, and the related party loan, each approximate their carrying value due either to their short length to maturity or interest rates that approximate prevailing market rates. |
Income Taxes | Income Taxes The Company accounts for income taxes under the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. |
Income (Loss) Per Share | Income (Loss) Per Share Income (loss) per share is presented in accordance with Accounting Standards Update (“ ASU Earning per Share EPS |
Business Segments | Business Segments The Company’s activities during the three months ended June 30, 2021 and the year ended December 31, 2020, comprised a single segment. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations. The Company adopted ASC 842 on January 1, 2019. However, the adoption of the standard had no impact on the Company’s financial statements since all Company leases are month to month or short-term rental. The Company adopted ASU 2019-12, Income Taxes, Topic 740 on January 1, 2021. There is no material impact on the Company’s financial statements. |
PREPAID EXPENSES (Tables)
PREPAID EXPENSES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of prepaid expenses | Schedule of prepaid expenses June 30, 2021 December 31, 2020 Prepaid expenses(a) 159,654 132,031 Prepaid financing(b) 209,500 – Total $ 369,154 $ 132,031 a) This prepayment remains in trust, from proceeds of the Astor Street, LLC promissory notes, currently being held with the intention of forming part of the initial payment of the pending Cremona acquisition. On March 29, 2021, the Company received the acceptance our Offer to Purchase certain assets and facilities located in Cremona, Alberta, Canada. The purchase price is $12,550,000 CAD. The Company has paid a $200,000 CAD deposit and closing is expected on April 29, 2021. The 55,200 square foot facility is capable of producing 5,200 kilograms of cannabis biomass per year. The facility previously held Health Canada licenses for cultivation and sales of medical dried flower, as well as extract and edible sales. After closing of the transaction, the Company intends to apply for new Health Canada licenses. Funding for this acquisition is in the due diligence phase. b) The Company has paid $209,500 in commitment fees to two arms length parties to arrange financing for pending Cremona acquisition. This financing is currently in the due diligence phase. |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment June 30, 2021 December 31, 2020 Gross Carrying Amount Accumulated Depreciation Net Book Value Gross Carrying Amount Accumulated Depreciation Net Book Value Computers, software, and office equipment $ 11,408 $ (3,691 ) $ 7,717 $ 4,869 $ (2,435 ) $ 2,435 Land – – – – – – Construction in progress 1,608,994 – 1,608,994 1,566,316 – 1,566,316 Total fixed assets $ 1,620,402 $ (3,691 ) $ 1,616,711 $ 1,571,185 $ (2,435 ) $ 1,566,316 |
ACCOUNT PAYABLE AND ACCRUED L_2
ACCOUNT PAYABLE AND ACCRUED LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued liabilities | Schedule of accounts payable and accrued liabilities June 30, 2021 December 31, 2020 Accounts payable and accrued expenses $ 4,116,507 $ 3,585,000 Accrued interest (a) 152,238 96,477 Accrued legal settlement (b) 190,000 190,000 Total accounts payable and accrued liabilities $ 4,458,745 $ 3,871,477 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | Schedule of related party transactions June 30, 2021 December 31, 2020 Loan payable, related parties $ 41,219 $ 274,758 Total loan payable, related parties $ 41,219 $ 274,758 Interest-free loans of $41,219 from the Company’s CEO and a director, respectively, amounting to $21,461 and $19,758 due to former directors. Effective March 22, 2019, the Company established its principal place of business and leases offices at 3600, 888 – 3rd St SW, Calgary, Alberta, Canada, T2P 5C5. The lease may be terminated by either party on 30 days’ notice. Rent is $2,000 CAD per month effective October 1, 2020 (retroactively reduced from $4,000 per month). This space was provided by a company to which, Mr. Orman, one of the Company’s directors, serves as a Director. See Note 14, Subsequent Events, below, for additional related party transactions. |
CONVERTIBLE NOTES AND DERIVAT_2
CONVERTIBLE NOTES AND DERIVATIVE LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Components of convertible debentures | Components of convertible debentures June 30, December 31, Principal value of convertible notes $ 1,093,728 $ 1,662,000 Note discount (280,938 ) (664,442 ) Total convertible notes, net current $ 812,790 $ 997,558 |
Schedule of assumptions used | Schedule of assumptions used June 30, 2021 Exercise Price $ 0.0276 – 0.0345 Stock Price $ 0.05 Risk-free interest rate .08% Expected volatility 128.50% Expected life (in years) 0.50 - 1.00 Expected dividend yield 0% Fair Value: $ 598,676 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Notes Payable | |
Schedule of notes payable | Schedule of notes payable June 30, December 31, Principal value of Promissory Note $ 9,459,536 $ 8,977,721 Loan discounts (127,878 ) (248,972 ) Promissory Note, long term net of discount $ 9,331,658 $ 8,728,749 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Warrant activity | Warrant activity Number of Warrants Outstanding (a) Weighted Average Exercise Price Average Remaining Contractual Life (Years) Warrants outstanding, January 1, 2018 – $ – – Warrants issued 350,000 0.57 1.50 Warrants exercised – – – Warrant forfeited – – – Warrants outstanding, December 31, 2018 350,000 $ 0.57 .12 Warrants issued (a) 1,519,750 $ 1.01 .59 Warrants outstanding December 31, 2019 1,869,750 $ 0.92 .80 Warrants exercised (25,000 ) – – Warrants outstanding December 31, 2020 1,844,750 $ 0.92 .50 Warrants issued (b) 477,778 $ 0.30 5.00 Warrants outstanding June 30, 2021 2,322,528 - |
Assumptions used | Assumptions used Expected dividend yield (1) 0.00 Risk-free interest rate range (2) 1.75 2.91 Volatility range (3) 1.23 442.92 Expected life (in years) 2.00 5.00 |
NATURE OF OPERATIONS AND SIGN_3
NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 2 Months Ended | 4 Months Ended | 5 Months Ended | 6 Months Ended | 12 Months Ended |
Feb. 25, 2019 | May 08, 2020 | Jun. 08, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
AccountingPoliciesLineItems [Line Items] | |||||
Cash and cash equivalents | $ 110,158 | $ 334,969 | |||
Derivative Liability, Current | 598,676 | 3,676,649 | |||
Construction in progress | 1,608,994 | 1,566,316 | |||
Long lived asset impairment | 146,084 | ||||
Office equipment | $ 7,717 | ||||
Hanover Facility [Member] | |||||
AccountingPoliciesLineItems [Line Items] | |||||
Fixed assets wrote down | 186,000 | ||||
Sunniva [Member] | |||||
AccountingPoliciesLineItems [Line Items] | |||||
Write off of deposit | $ 1,881,126 | ||||
GN Common Stock [Member] | |||||
AccountingPoliciesLineItems [Line Items] | |||||
Stock exchanged, shares received | 3,671,597 | ||||
Common Stock [Member] | |||||
AccountingPoliciesLineItems [Line Items] | |||||
Stock exchanged, shares exchanged | 5,507,400 | ||||
Common Stock [Member] | GN Ventures [Member] | |||||
AccountingPoliciesLineItems [Line Items] | |||||
Shares given in business combination | 7,988,963 | ||||
GN Ventures [Member] | |||||
AccountingPoliciesLineItems [Line Items] | |||||
Shares given in business combination | 7,988,963 | ||||
GN Ventures [Member] | GN Common Stock [Member] | |||||
AccountingPoliciesLineItems [Line Items] | |||||
Shares acquired in business combination | 3,936,500 | ||||
GN Ventures [Member] | GN Warrants [Member] | |||||
AccountingPoliciesLineItems [Line Items] | |||||
Shares acquired in business combination | 2,500,000 | ||||
Lands And Premises Hanover Ontario C N [Member] | |||||
AccountingPoliciesLineItems [Line Items] | |||||
Asset Impairment Charges | $ 7,962,694 |
GOING CONCERN AND LIQUIDITY (De
GOING CONCERN AND LIQUIDITY (Details Narrative) - USD ($) | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Cash | $ 110,158 | $ 334,969 | $ 3,793 | $ 1,547 | ||
Working capital | 14,761,780 | |||||
Retained earnings | $ 6,394,290 | $ 6,850,337 | $ 8,801,599 | $ (2,726,536) | $ (1,347,534) | $ (4,854,198) |
DEPOSITS (Details Narrative)
DEPOSITS (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Jun. 30, 2021 | Jan. 06, 2021 | Jun. 08, 2020 | |
DepositsLineItems [Line Items] | ||||
Deposits | $ 0 | $ 80,680 | ||
Lands And Premises Hanover Ontario C N [Member] | ||||
DepositsLineItems [Line Items] | ||||
Deposits | $ 80,680 | |||
Asset impairment | $ 7,962,694 | |||
Sunniva [Member] | ||||
DepositsLineItems [Line Items] | ||||
Deposits | $ 1,308,830 |
Schedule of prepaid expenses (D
Schedule of prepaid expenses (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | |
PrepaidExpensesLineItems [Line Items] | |||
Prepaid expenses | $ 369,154 | $ 132,031 | |
Prepaid Expenses [Member] | |||
PrepaidExpensesLineItems [Line Items] | |||
Prepaid expenses | [1] | 159,654 | 132,031 |
Prepaid Financing [Member] | |||
PrepaidExpensesLineItems [Line Items] | |||
Prepaid expenses | $ 209,500 | $ 0 | |
[1] | The Company has paid $209,500 in commitment fees to two arms length parties to arrange financing for pending Cremona acquisition. This financing is currently in the due diligence phase. |
INVESTMENT (Details Narrative)
INVESTMENT (Details Narrative) - USD ($) | Jan. 15, 2021 | Feb. 25, 2019 | Oct. 06, 2020 | Dec. 31, 2019 | Jun. 30, 2021 | Dec. 31, 2020 | May 20, 2020 |
Entity Listings [Line Items] | |||||||
Investments | $ 6,750,779 | $ 6,711,289 | |||||
GN Ventures [Member] | |||||||
Entity Listings [Line Items] | |||||||
Stock received in acquisition, shares | 3,936,500 | ||||||
Warrants received in acquisition | 2,500,000 | ||||||
Stock issued for acquisition | 7,988,963 | ||||||
Consideration transferred | $ 11,264,438 | ||||||
Impairment of investment | $ 7,070,841 | ||||||
Investments | $ 4,193,597 | $ 6,672,019 | |||||
Stock exchanged, shares issued | 5,507,400 | ||||||
Stock exchanged, shares acquired | 3,671,597 | ||||||
Stock exchanged, value of shares acquired | $ 2,478,422 | ||||||
Klonetics Plant [Member] | Canada, Dollars | Class A Common Stock [Member] | |||||||
Entity Listings [Line Items] | |||||||
Payment for investment | $ 50,000 | $ 50,000 | |||||
Stock received for investment | 83,333 | 83,333 |
PROPERTY, PLANT, AND EQUIPMEN_2
PROPERTY, PLANT, AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,620,402 | $ 1,571,185 |
Accumulated depreciation | (3,691) | (2,435) |
Property, plant and equipment, net | 1,616,711 | 1,566,316 |
Computers Software Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 11,408 | 4,869 |
Accumulated depreciation | (3,691) | (2,435) |
Property, plant and equipment, net | 7,717 | 2,435 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 0 | 0 |
Accumulated depreciation | 0 | 0 |
Property, plant and equipment, net | 0 | 0 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,608,994 | 1,566,316 |
Accumulated depreciation | 0 | 0 |
Property, plant and equipment, net | $ 1,608,994 | $ 1,566,316 |
PROPERTY, PLANT, AND EQUIPMEN_3
PROPERTY, PLANT, AND EQUIPMENT (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 1,184 | $ 758 | |
Construction in progress | $ 1,608,994 | $ 1,566,316 |
ACCOUNT PAYABLE AND ACCRUED L_3
ACCOUNT PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |||
Accounts payable and accrued expenses | $ 4,116,507 | $ 3,585,000 | |
Accrued interest (a) | [1] | 152,238 | 96,477 |
Accrued legal settlement (b) | [2] | 190,000 | 190,000 |
Total accounts payable and accrued liabilities | $ 4,458,745 | $ 3,871,477 | |
[1] | The Company has paid $209,500 in commitment fees to two arms length parties to arrange financing for pending Cremona acquisition. This financing is currently in the due diligence phase. | ||
[2] | Represents interest accrued on the outstanding convertible notes and other notes - see Note 11, Notes Payables) |
Schedule of related party trans
Schedule of related party transactions (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Related Party Transactions [Abstract] | ||
Total loan payable, related parties | $ 41,219 | $ 274,758 |
CONVERTIBLE NOTES AND DERIVAT_3
CONVERTIBLE NOTES AND DERIVATIVE LIABILITIES (Details - Convertible debentures) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Principal value of convertible notes | $ 1,093,728 | $ 1,662,000 |
Note discount | (280,938) | (664,442) |
Total convertible notes, net current | $ 812,790 | $ 997,558 |
CONVERTIBLE NOTES AND DERIVAT_4
CONVERTIBLE NOTES AND DERIVATIVE LIABILITIES (Details - Assumptions Used) | 6 Months Ended |
Jun. 30, 2021 | |
Measurement Input, Exercise Price [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liabilities description | 0.0276 – 0.0345 |
Measurement Input, Share Price [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liabilities description | 0.05 |
Measurement Input, Risk Free Interest Rate [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liabilities description | .08% |
Measurement Input, Price Volatility [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liabilities description | 128.50% |
Measurement Input, Expected Term [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liabilities description | 0.50 - 1.00 |
Measurement Input, Expected Dividend Rate [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liabilities description | 0% |
Measurement Input Expected Fair Value [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Derivative liabilities description | 598,676 |
CONVERTIBLE NOTES AND DERIVAT_5
CONVERTIBLE NOTES AND DERIVATIVE LIABILITIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jul. 08, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||||||||||
Beneficial conversion feature | $ 289,426 | $ 34,205 | $ 438,000 | |||||||
Unamortized note discount | 280,938 | $ 280,938 | $ 664,442 | |||||||
Amortization of note discount | 735,949 | $ 1,009,149 | ||||||||
Change in the fair value of derivatives | 447,493 | $ (43,618) | 3,077,973 | (969,102) | ||||||
Convertible Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt converted, amount converted | $ 956,355 | $ 1,984,000 | ||||||||
Debt converted, shares issued | 18,973,801 | 4,067,332 | ||||||||
Gain (loss) on conversion of debt | $ 566,408 | |||||||||
Conv Note 160 [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayment of convertible note | $ 160,000 | |||||||||
Debt converted, amount converted | $ 100,000 | |||||||||
Debt converted, shares issued | 135,000 | |||||||||
Convertible Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Unamortized note discount | 280,938 | $ 280,938 | 664,442 | |||||||
Interest expense, debt | 43,030 | 257,345 | ||||||||
Amortization of note discount | 735,949 | $ 1,690,933 | ||||||||
Proceeds from convertible notes | 388,083 | |||||||||
Accrued interest | 27,503 | 27,503 | ||||||||
Note in default | $ 100,000 | 100,000 | ||||||||
Change in the fair value of derivatives | $ 3,077,973 | $ 969,102 | ||||||||
Private Offering [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Unit description | 50,000 shares of the Company’s Common Stock and one $50,000 unsecured Convertible Note | |||||||||
Units issued new, units | 24 | 31 | ||||||||
Proceeds from sale of units | $ 1,550,000 | |||||||||
Beneficial conversion feature | $ 1,550,000 | |||||||||
Private Offering [Member] | Unsecured 5 Convertible Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from convertible notes | $ 582,500 | |||||||||
Private Offering [Member] | Unsecured 8 Convertible Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from convertible notes | 595,500 | |||||||||
Private Offering [Member] | Unsecured 10 Convertible Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from convertible notes | $ 1,000,500 | |||||||||
Private Offering [Member] | Units [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Units issued new, units | 5,505,530 | |||||||||
Stock issued new, value | $ 5,075,000 | |||||||||
Unamortized note discount | 1,550,000 | |||||||||
Interest expense, debt | 3,525,000 | |||||||||
Amortization of note discount | $ 552,602 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - Convertible Debentures [Member] - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Principal value of Promissory Note | $ 9,459,536 | $ 8,977,721 |
Loan discounts | (127,878) | (248,972) |
Promissory Note, long term net of discount | $ 9,331,658 | $ 8,728,749 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) | 4 Months Ended | 6 Months Ended | 8 Months Ended | |||||
Apr. 21, 2020USD ($) | Apr. 21, 2020CAD ($) | Jun. 30, 2021USD ($) | Jul. 03, 2019USD ($)shares | Dec. 29, 2020USD ($) | Dec. 29, 2020CAD ($) | Dec. 31, 2020USD ($) | Jun. 03, 2019USD ($) | |
Secured Notes Payable [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt maturity date | Dec. 31, 2021 | |||||||
Interest expense | $ 735,949 | |||||||
Secured Notes Payable [Member] | Canada, Dollars | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt face amount | $ 10,000,000 | |||||||
Secured Notes Payable [Member] | United States of America, Dollars | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt face amount | 7,330,000 | |||||||
Promissory note carrying amount | 6,632,917 | |||||||
Original issue discount | 697,083 | |||||||
Koze Investments [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt face amount | $ 1,000,000 | |||||||
Debt maturity date | Jun. 28, 2020 | |||||||
Interest expense | $ 60,000 | |||||||
Warrants issued, shares | shares | 1,001,000 | |||||||
Penalties accrued | $ 890,570 | |||||||
Canada Emergency Business Account [Member] | Canada, Dollars | ||||||||
Debt Instrument [Line Items] | ||||||||
Proceeds from loans | $ 40,000 | $ 20,000 | ||||||
Canada Emergency Business Account [Member] | United States of America, Dollars | ||||||||
Debt Instrument [Line Items] | ||||||||
Proceeds from loans | $ 29,352 | $ 15,708 | ||||||
Loan term | 3 years | 3 years | ||||||
Note Agreements [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Promissory note carrying amount | $ 238,560 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 75,600,000 |
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2030 |
State and Local Jurisdiction [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2034 |
STOCKHOLDERS' EQUITY (Details -
STOCKHOLDERS' EQUITY (Details - Warrant activity) - Warrant [Member] - $ / shares | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Warrants outstanding, ending balance | [1] | 1,844,750 | 1,869,750 | 350,000 | 0 | |
Warrants outstanding, ending balance | $ 0.92 | $ 0.92 | $ 0.57 | $ 0 | ||
Warrants issued | [1] | 477,778 | 1,519,750 | 350,000 | ||
Warrants issued | $ 0.30 | $ 1.01 | [1] | $ 0.57 | ||
Warrants issued | 5 years | 7 months 2 days | [1] | 1 year 6 months | ||
Warrants exercised | [1] | (25,000) | 0 | |||
Warrants exercised | $ 0 | $ 0 | ||||
Warrants forfeited | [1] | 0 | ||||
Warrants forfeited | $ 0 | |||||
Warrants outstanding | 6 months | 9 months 18 days | 1 month 13 days | |||
Warrants outstanding, beginning balance | [1] | 2,322,528 | 1,844,750 | 1,869,750 | 350,000 | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.92 | $ 0.92 | $ 0.57 | |||
[1] | The Company had previously been a party to an action filed by Gary M. Cohen, a former officer and director of the Company in 2014. In March 2015, the Company entered into a Settlement Agreement with Mr. Cohen wherein the Company agreed to repurchase 2,250,000 shares of its Common Stock from Mr. Cohen in consideration for $350,000. Mr. Cohen passed away while there was a remaining balance of $190,000 remaining to be paid in accordance with the Settlement Agreement. The Company has taken the position that his death has discharged any obligation the Company might have to make the balance of the payments. The Company has not received any demand for payment or otherwise been involved in any attempt to collect this balance for a period of greater than two years prior to the date of this Report. |
STOCKHOLDERS' EQUITY (Details_2
STOCKHOLDERS' EQUITY (Details - Warrant assumptions) - Warrant [Member] | 6 Months Ended | |
Jun. 30, 2021 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected dividend yield | 0.00% | [1] |
Risk-free interest rate - minimum | 1.75% | [2] |
Risk-free interest rate - maximum | 2.91% | [2] |
Volatility - minimum | 1.23% | [3] |
Volatility - maximum | 442.92% | [3] |
Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected life | 2 years | |
Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected life | 5 years | |
[1] | The Company issued 477,448 common share purchase warrants during the second quarter to an accredited investor as part of a convertible debenture. These warrants are exercisable at $0.30 per share and expire at the end of five years. | |
[2] | The Company has no history or expectation of paying cash dividends on its Common Stock. | |
[3] | The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the awards in effect at the time of grant. |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Apr. 30, 2018 | |
Class of Stock [Line Items] | |||||||
Common Stock, Shares Authorized | 300,000,000 | 300,000,000 | 300,000,000 | ||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Common Stock, Shares, Outstanding | 73,760,595 | 73,760,595 | 46,986,794 | ||||
Acquisition expenses | $ 0 | $ (18,488) | $ 0 | $ 1,862,638 | |||
Stock reserved for issuance | 272,654,379 | 272,654,379 | |||||
Series A Preferred Stock Conversion [Member] | |||||||
Class of Stock [Line Items] | |||||||
Stock reserved for issuance | 72,725,000 | 72,725,000 | |||||
Series B Preferred Stock Conversion [Member] | |||||||
Class of Stock [Line Items] | |||||||
Stock reserved for issuance | 475,000 | 475,000 | |||||
Convertible Note Conversions [Member] | |||||||
Class of Stock [Line Items] | |||||||
Stock reserved for issuance | 197,131,851 | 197,131,851 | |||||
Warrant Exercises [Member] | |||||||
Class of Stock [Line Items] | |||||||
Stock reserved for issuance | 2,322,528 | 2,322,528 | |||||
Alternative Medical Solutions [Member] | |||||||
Class of Stock [Line Items] | |||||||
Acquisition expenses | $ 5,800,000 | ||||||
Series A Preferred Stock [Member] | |||||||
Class of Stock [Line Items] | |||||||
Preferred shares, issued | 58,180 | 58,180 | 60,000 | 60,000 | |||
Preferred shares, par value | $ 1 | $ 1 | $ 1 | ||||
Convertible stock terms of conversion | Each Series A Preferred Share is convertible into 1,250 shares of Common Stock | ||||||
Preferred shares, outstanding | 58,180 | 58,180 | 60,000 |