Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 15, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | Pure Harvest Corporate Group, Inc. | |
Entity Central Index Key | 0001351573 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 65,599,568 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash | $ 484,796 | $ 856,844 |
Accounts receivable | 151,261 | 91,371 |
Inventory | 1,188,504 | 1,047,690 |
Deferred rent | 92,444 | 113,778 |
Prepaids and other current assets | 235,622 | 235,335 |
Total current assets | 2,152,627 | 2,345,018 |
Long-term assets | ||
Property, plant and equipment | 1,617,050 | 1,599,088 |
Accumulated depreciation | (546,751) | (469,315) |
Deferred rent, net of current portion | 26,446 | |
Right of use asset | 469,565 | 537,393 |
Notes receivable and advances on pending acquisitions, net of allowance of $533,000 and $33,000, respectively | 2,250,000 | 2,750,000 |
Goodwill | 1,550,225 | 1,550,225 |
Intangible assets, net | 2,358,691 | 2,399,524 |
Other assets | 233,835 | 301,604 |
Total assets | 10,085,242 | 11,039,983 |
Current liabilities | ||
Accounts payable | 319,174 | 91,741 |
Accrued expenses | 1,502,845 | 1,324,936 |
Notes payable | 378,627 | 431,919 |
Convertible notes payable, net of discount of $24,606 and $146,967, respectively | 1,475,394 | 1,353,033 |
Related party convertible notes payable | 1,412,504 | 1,412,504 |
Total current liabilities | 5,088,544 | 4,614,133 |
Long term liabilities | ||
Notes payable | 6,000 | |
Right of use liability | 249,614 | 293,971 |
Convertible notes payable, net of discount of $1,563,561 and $1,723,835, respectively | 386,439 | 226,165 |
Derivative liabilities | 2,034,278 | 1,879,776 |
Total liabilities | 7,758,875 | 7,020,045 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity | ||
Preferred stock; $0.01 par value; 25,000,000 shares authorized; no shares issued and outstanding, respectively | ||
Common stock, $0.01 par value; 250,000,000 shares authorized, 65,099,568 and 64,117,846 shares issued and outstanding, respectively | 653,546 | 641,179 |
Additional paid-in capital | 11,922,301 | 11,111,799 |
Accumulated deficit | (10,249,480) | (7,733,040) |
Total stockholders' equity | 2,326,367 | 4,019,938 |
Total liabilities and stockholders' equity | $ 10,085,242 | $ 11,039,983 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Notes receivable and advances on pending acquisitions, allowance | $ 533,000 | $ 33,000 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares, issued | 65,099,568 | 64,117,846 |
Common stock, shares outstanding | 65,099,568 | 64,117,846 |
Convertible Notes Payable [Member] | ||
Convertible notes payable, discount current | $ 24,606 | $ 146,967 |
Convertible notes payable, discount noncurrent | $ 1,563,561 | $ 1,723,835 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
REVENUES | ||
Product sales and royalty income | $ 794,148 | $ 1,091 |
Cost of sales | 467,952 | |
Gross profit | 326,196 | 1,091 |
OPERATING EXPENSES | ||
Advertising and promotion | 17,014 | 2,559 |
General and administrative expenses, including stock-based compensation of $316,006 and $11,502, respectively | 1,556,558 | 520,499 |
Research and development | 3,708 | 35,151 |
Depreciation expense | 77,436 | 4,642 |
Total operating expenses | 1,654,716 | 562,851 |
Loss from operations | (1,328,520) | (561,760) |
Other income (expense): | ||
Interest expense | (521,371) | (130,741) |
Interest income | 55,000 | 65,565 |
Change in fair market value of derivative liabilities | (154,502) | |
Loss on equity method investment | (73,047) | |
Other income (expense) | 6,000 | |
Bad debt expense | (500,000) | (823) |
Total other income (expense) | (1,187,920) | (65,999) |
Loss before provision for income taxes | (2,516,440) | (627,759) |
Provision for income taxes | ||
NET LOSS | $ (2,516,440) | $ (627,759) |
Basic and diluted net loss per common share | $ (0.04) | $ (0.02) |
Basic and diluted weighted-average number of common shares outstanding | 65,068,510 | 37,894,108 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Stock-based compensation | $ 316,006 | $ 11,502 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (2,516,440) | $ (627,759) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 118,269 | 4,642 |
Stock-based compensation | 350,406 | 11,502 |
Common stock issued for services | (34,400) | |
Amortization of debt discount | 306,135 | 66,319 |
Loss from equity method investment | 73,047 | |
Allowance on notes receivable | 500,000 | 823 |
Change in fair value of derivative liability | 154,502 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (59,890) | 1,653 |
Interest receivable on notes receivable | (64,743) | |
Inventory | (140,814) | (96,894) |
Other assets | (5,278) | |
Deferred rent | 47,780 | 21,333 |
Prepaid and other current assets | (287) | |
Accounts payable | 227,433 | (15,211) |
Accrued expense | 181,272 | 96,188 |
Royalty payable | (770) | |
Right of use asset and liability | 23,471 | (1,878) |
Net cash used in operating activities | (774,794) | (605,618) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Notes receivable and advances of pending acquisitions | (1,130,529) | |
Purchase of machinery and equipment | (17,962) | (3,452) |
Net cash used in investing activities | (17,962) | (1,133,981) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Advances (payments) from (to) related parties | (43,750) | |
Proceeds from notes payable | 1,500,000 | |
Repayment of notes payable | (59,292) | |
Proceeds from sale of common stock | 480,000 | 100,000 |
Net cash provided by financing activities | 420,708 | 1,556,250 |
Change in cash and cash equivalents | (372,048) | (183,349) |
Cash and cash equivalents, beginning of period | 856,844 | 1,665,247 |
Cash and cash equivalents, end of period | 484,796 | 1,481,898 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 5,217 | |
Cash paid for income taxes | ||
Non-cash investing and financing activities: | ||
Discount on note payable due to common stock and warrants | 116,707 | |
Common stock issued for accrued interest | 3,363 | |
Common stock issued in connection with note extensions | $ 23,500 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholder's Equity (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2019 | $ 377,164 | $ 4,391,587 | $ (1,386,181) | $ 3,382,570 | |
Balance, shares at Dec. 31, 2019 | 37,716,330 | ||||
Stock-based compensation | 11,502 | 11,502 | |||
Issuance of common stock to note holder | $ 1,500 | 115,207 | 116,707 | ||
Issuance of common stock to note holder, shares | 150,000 | ||||
Issuance of common stock for cash | $ 2,000 | 98,000 | 100,000 | ||
Issuance of common stock for cash, shares | 200,000 | ||||
Net loss | (627,759) | (627,759) | |||
Balance at Mar. 31, 2020 | $ 380,664 | 4,616,296 | (2,013,940) | 2,983,020 | |
Balance, shares at Mar. 31, 2020 | 38,066,330 | ||||
Balance at Dec. 31, 2019 | $ 377,164 | 4,391,587 | (1,386,181) | 3,382,570 | |
Balance, shares at Dec. 31, 2019 | 37,716,330 | ||||
Issuance of common stock for accrued interest | $ 52,293 | ||||
Issuance of common stock for accrued interest, shares | 124,425 | ||||
Balance at Dec. 31, 2020 | $ 641,179 | 11,111,799 | (7,733,040) | 4,019,938 | |
Balance, shares at Dec. 31, 2020 | 64,117,846 | ||||
Stock-based compensation | 350,406 | 350,406 | |||
Issuance of common stock to note holder | $ 500 | 23,000 | 23,500 | ||
Issuance of common stock to note holder, shares | 50,000 | ||||
Issuance of common stock for cash | $ 12,582 | 467,418 | 480,000 | ||
Issuance of common stock for cash, shares | 1,258,161 | ||||
Issuance of common stock for services | $ (800) | (33,600) | (34,400) | ||
Issuance of common stock for services, shares | (80,000) | ||||
Issuance of common stock for accrued interest | $ 85 | 3,278 | 3,363 | ||
Issuance of common stock for accrued interest, shares | 8,515 | ||||
Net loss | (2,516,440) | (2,516,440) | |||
Balance at Mar. 31, 2021 | $ 653,546 | $ 11,922,301 | $ (10,249,480) | $ 2,326,367 | |
Balance, shares at Mar. 31, 2021 | 65,354,522 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Pure Harvest Corporate Group, Inc. (the “Company”), formerly Pure Harvest Cannabis Group, Inc., was formed as a Colorado corporation in April 2004. On December 31, 2018, the Company acquired all of the outstanding common stock of Pure Harvest Cannabis Producers, Inc., (“PHCP”) in exchange for 17,906,016 (post-split) shares of the Company’s common stock. The transaction was accounted for as a reverse acquisition. As a result of the acquisition of PHCP, the Company now operates in various segments of the cannabis and hemp-CBD industries with a focus on health and wellness products and applying education, research and development, and technology to each sector. The Company’s new business also involves the acquisition and operation of licensed marijuana cultivation facilities, manufacturing facilities, and dispensaries. The Company changed its name to Pure Harvest Cannabis Group, Inc. in February 2019. The Company changed its name to Pure Harvest Corporate Group, Inc. on June 8, 2020. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial information should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2020 of Pure Harvest Corporate Group, Inc. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the Unites States (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X pursuant to the requirements of the U.S. Securities and Exchange Commission (‘SEC”). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the interim periods are not necessarily indicative of the results of operations for the entire year. Going Concern The Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the above conditions raise substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustment to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. Management plans to fund future operations by raising capital and / or seeking joint venture opportunities. Significant Accounting Policies Note 2 of the Notes to Consolidated Financial Statements, included in the annual report on Form 10-K for the year ended December 31, 2020, includes a summary of the significant accounting policies used in the preparation of the consolidated financial statements. Principles of Consolidation The Company evaluates the need to consolidate affiliates based on standards set forth in Accounting Standards Codification (“ASC”) 810 Consolidation (“ASC 810”). The Consolidated financial statements include the accounts of the Company and its majority owned subsidiaries. All significant consolidated transactions and balances have been eliminated in consolidation. Use of Estimates In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include estimated fair market value of assets and liabilities acquired under business combinations, useful lives and potential impairment of property and equipment, recoverability of goodwill and estimates of fair value of share-based payments. Fair Value of Financial Instruments The Company applies the accounting guidance under Financial accounting Standards Board (“FASB” ACS 820-10, “Fair Value Measurements”, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of non-performance. The guidance also establishes a fair value hierarchy for measurements of fair value as follows: ● Level 1 - quoted market prices in active markets for identical assets or liabilities. ● Level 2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amount of the Company’s financial instruments approximates their fair value as of March 31, 2021 and December 31, 2020, due to the short-term nature of these instruments. The Company’s derivative liabilities are considered a Level 2 liability. Net Loss per Share Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share”. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding during the period. For the three months ended March 31, 2021 and 2020, dilutive instruments consisted of convertible notes payable, options and warrants to purchase shares of the Company’s common stock totaling approximately 51.6 million and 28.4 million shares of common stock, respectively, the effects of which to the net loss are anti-dilutive. Recent Accounting Pronouncements In January 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-01, “Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815”, which clarifies the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting under Topic 323, and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The Company adopted the new standard on January 1, 2021, which did not have a significant impact on the Company. The FASB issues ASUs to amend the authoritative literature in ASC. There have been several ASUs issued to date, including those above, that amend the original text of ASC. Management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to us or (iv) are not expected to have a significant impact our consolidated financial statements. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 3 – ACQUISITIONS Love Pharm, LLC On February 12, 2020, the Company entered into an Operating Agreement with Dr. James Rouse, MD regarding the ownership, operation, and management of Love Pharm, LLC. Love Pharm was recently organized in December 2019 to formulate, develop, manufacture, and brand hemp/CBD products for sale and distribution as well as to form a multi-channel media platform for public and patient education regarding the endocannabinoid system utilizing Dr. Rouse’s name, public image and his extensive experience and expertise in medicine and entrepreneurship. Under the Operating Agreement between the Company and Dr. Rouse, the Company owns 51% of Love Pharm and has a right of first refusal to purchase the remaining 49% of Love Pharm from Dr. Rouse. Additionally, Dr. Rouse will become the Company’s Chief Medical Advisor. Dr. Rouse will receive 400,000 shares of the Company’s common stock for services provided to the Company. As of the date of this filing Love Pharm has yet to commence operations. How Smooth It Is, Inc. On March 12, 2020, the Company entered into an agreement to acquire fifty-one percent (51%) of the outstanding membership interests in How Smooth It Is, Inc. (“HSII”) for $1,500,000 in cash and 7,000,000 shares of the Company’s restricted common stock. HSII is a state-licensed medical marijuana processor based in Riverdale, Michigan and plans to offer a wide range of cannabis-infused products including chocolate bars, gummies, beverages, and other branded products. HSII is based in a 5,800 square foot facility and has the capability of extracting, processing, and manufacturing an array of products containing THC and CBD. HSII has also submitted applications for four dispensary licenses in Riverdale, White Cloud, Alma and Mount Pleasant, MI. The acquisition of the 51% interest in HSII is subject to a number of conditions, including the approval of the Michigan Department of Licensing and Regulatory Affairs (LARA). As of the date of this filing, the acquisition of HSII has not been finalized. The acquisition of HSII has been terminated, see Note 9 for additional information. Sofa King Medicinal Wellness Products, LLC On March 13, 2020, the Company entered into an agreement to acquire all of the outstanding membership interests in Sofa King Medicinal Wellness Products, LLC (“SKM”) for 3,000,000 shares of the Company’s common stock. The completion of the acquisition is subject to a number of conditions, including the approval of the acquisition by the Colorado Marijuana Enforcement Division (MED). SKM is a vertically integrated cannabis operator located in Dumont, CO. In August 2020, the acquisition of SKM was finalized as the appropriate licenses have been approved. The operations of SKM have been included within operations from the date of acquisition of August 11, 2020. Test Kitchen, Inc. On August 14, 2020, the Company acquired Test Kitchen, Inc. (“TK”) in August of 2020 for 50,000 shares of restricted stock. Test Kitchen, Inc., a newly formed Colorado-based company specializing in pharmacognosy research, has begun developing and formulating new products using cutting edge technology and proprietary delivery systems. Test Kitchen was founded on the belief in the power of full engagement of products to be combined with mind-body practices to unlock human potential and create predictable experiences. The operations of TK have been included within operations from the date of acquisition. Solar Cultivation Technologies On September 29, 2020, the Company acquired all of the assets of Solar Cultivation Technologies, Inc. (“SCT”), a Denver-based solar company focused on bringing solar to the cannabis industry in an effort to minimize the industry’s carbon footprint. This acquisition will allow the Company to implement SCT’s solar, storage, and intelligent distribution technology throughout its operations in addition to providing these technologies to other operators in the cannabis industry. The operations of SCT have been included within operations from the date of acquisition. In November 2020, the Company transferred SCT assets for a minority interest in a limited liability company. EdenFlo, LLC On April 24, 2020, the Company acquired substantially all of the assets of EdenFlo, LLC (“EdenFlo”), a producer of CBD extracts and concentrates, for 7,000,000 shares of the Company’s common stock and the release of its obligation of a previous promissory note in the amount of $1,650,000, accrued interest of $46,879 and other advances made to EdenFlo to fund operations of $384,409. EdenFlo joins Prolific Nutrition and Love Pharm, LLC to secure and expand the Company’s position in the national Hemp/CBD industry. EdenFlo is a large-scale Colorado-based hemp-CBD producer and manufacturer of pure CBD isolate and full-spectrum hemp distillate. EdenFlo’s products are made from the highest quality ingredients, utilizing only the best extraction and distillation methods to ensure a final product of extreme purity. Their scientific procedures used for the remediation of THC provide some of the cleanest broad-spectrum (distillate) oil available in the cannabis extraction industry. The acquisition of EdenFlo will support the Company’s manufacturing operations by supplying the Company’s raw materials requirements for its branded products. Purchase Price and Allocations The transactions above were accounted for as business combinations in accordance with ASC Topic 805, Business Combinations. The Company has determined preliminary fair values of the assets acquired and liabilities assumed. These values are subject to change as we perform additional reviews of our assumptions utilized as well as valuations yet to be obtained. Goodwill is primarily attributable to the go-to-market synergies that are expected to arise because of the acquisitions. The goodwill is not deductible for tax purposes. The calculation of the purchase prices are as follows: EdenFlo, LLC SKM TK SCT Totals Purchase Price Purchase Price Purchase Price Purchase Price Purchase Price Allocation Allocation Allocation Allocation Allocation Cash $ 2,398 $ 24,437 $ - $ 2,258 $ 29,093 Accounts receivable - - - 24,525 24,525 Inventory 846,958 - - 11,102 858,060 Prepaids and other current assets 8,585 - - 16,929 25,514 Property and equipment 926,671 100,057 - 10,680 1,037,408 Other assets 11,553 - - - 11,553 Licenses - 2,450,000 - - 2,450,000 Goodwill 1,522,725 - 22,495 599,196 2,144,416 Accounts payable and accrued liabilities - (36,653 ) - (69,000 ) (105,653 ) Loans payable - (313,301 ) - - (313,301 ) Loans payable - related party (960,000 ) - - - (960,000 ) Bargain purchase - (784,540 ) - - (784,540 ) $ 2,358,890 $ 1,440,000 $ 22,495 $ 595,690 $ 4,417,075 The Company has made a provisional allocation of the purchase price in regard to the acquisitions related to the assets acquired and the liabilities assumed as of the purchase dates. The following table summarizes the preliminary purchase price allocations: EdenFlo, LLC SKM TK SCT Totals Notes receivable $ 1,650,000 $ - $ - $ - $ 1,650,000 Interest receivable 46,879 - - - 46,879 Additional advances 384,409 - - 476,507 860,916 Fair market value of common stock issued 280,000 1,440,000 22,495 119,183 1,861,678 Cash (received) paid (2,398 ) - - - (2,398 ) $ 2,358,890 $ 1,440,000 $ 22,495 $ 595,690 $ 4,417,075 The Company has completed the valuations necessary to finalize the acquisition fair values of the assets acquired and liabilities assumed and related allocation of purchase price of these acquisitions. |
Notes Receivable
Notes Receivable | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Notes Receivable | NOTE 4 – NOTES RECEIVABLE In May and June 2019, the Company advanced $28,593 to two unrelated individuals in connection with potential acquisitions for the Company. The amounts were to be repaid, without interest, in October 2019. As of March 31, 2021 and December 31, 2020, the Company has continued collection efforts on these notes receivable but has provided an allowance of such due to the unlikelihood of closing the acquisitions or collecting on the notes receivable . In December 2019, the Company advanced $800,000 to How Smooth It Is, Inc., increased by $700,000 in January 2020, totaling $1,500,000 in connection with the potential acquisition of that entity by the Company. The note receivable was due June 1, 2020 and incurs interest at 6% per annum for sixty days and then is increased to 10% per annum thereafter. In March 2020, the Company entered into an acquisition agreement to acquire the entity for which the note receivable was used to offset a portion of the purchase price, see Note 3 for additional information. On April 9, 2020, the Company submitted the required applications to the Michigan Department of Licensing and Regulatory Affairs (LARA) to be approved and pre-qualified as a Processor to be added to the HSII license. Upon approval, PHCG will become 51% owners and can participate in revenue. The transaction will not close until the appropriate Michigan approvals are obtained. During the year ended December 31, 2020, the Company advanced HSII as an additional $247,845 for operations. The additional advances are not under a formal arrangement and thus do not incur interest and are due on demand. On March 12, 2020, the Company entered into an agreement to acquire fifty-one percent (51%) of the outstanding membership interests in How Smooth It Is, Inc. (“HSII”) for $1,500 ,000 in cash and 7,000,000 shares of the Company’s restricted common stock. On July 29, 2020, the Company terminated its agreement to acquire 51% of HSII. As a part of the termination agreement: ● The sole shareholder of HSII agreed to pay the Company $2,150,000 by August 7, 2020, and ● HSII agreed to manufacture up to 24 separate products for the Company (such as edibles and vaporizers) upon terms agreeable to both the Company and HSII. The products manufactured by HSII will be sold under Pure Harvest brands with the Company receiving royalties from the sale of the products. On December 31, 2020, the Company entered into an amended note receivable loan and security agreement for $2,750,000 with an initial maturity date of March 31, 2021. The note incurs interest at 8% per annum through the initial maturity date. As of the date of these financial statements the required monthly interest payments have been received. Under the agreement, if the loan is not repaid by March 31, 2021, as long as there have been no defaults, the loan will be extended to July 31, 2021. During the extended period, the interest rate increases to 12% per annum. In addition, with the extended period, the Company receives various royalties on products sold by the borrower for a period of three year commencing on April 1, 2021. On March 31, 2021, the note was extended to July 31, 2021 in accordance with the terms. The loan is secured by all the assets of. As of March 31, 2021, the Company estimated that a reserve of $500,000, should be applied to the outstanding note receivable. The determination was based upon a lawsuit filed against the Company as further disclosed in Note 9. In December 2019, the Company advanced $1,650,000 to EdenFlo, LLC in connection with the potential acquisition of that entity by the Company. The note receivable was due June 1, 2020 and incurs interest at 6% per annum for sixty days and then is increased to 10% per annum thereafter. In addition, the note receivable is secured by all the asset of EdenFlo, LLC and the amount loaned represents the expected cash portion to be paid in connection with the acquisition. See Note 3 for discussion regarding the acquisition of EdenFlo in April 2020. In 2020, prior to SCT’s acquisition, the Company advanced SCT $476,507 for operations. The additional advances were not under a formal arrangement and thus did not incur interest and were due on demand. See Note 3 for discussion regarding the acquisition of SCT. |
Lease Agreements
Lease Agreements | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Lease Agreements | NOTE 5 – LEASE AGREEMENTS In May 2019, the Company entered into a lease agreement for property to be used as a marijuana retail store. The initial term of the lease is for a period of three years. The Company has an option to purchase the property at prices ranging between $1,400,000 and $1,600,000 at various dates prior to May 1, 2022. The Company issued the landlord 400,000 shares of its post-split common stock in consideration for the option to purchase the property for which was recorded as deferred rent and is being amortized to rent expense using the straight-line method over the term of the lease. At inception of the lease, the Company recorded a right of use asset and liability. The Company used an effective borrowing rate of 10 percent within the calculation. In April 2020, in connection with the EdenFlo asset acquisition, the Company assumed a lease for a hemp processing facility. At inception of the lease, the Company recorded a right of use asset and liability of $140,988. The Company used an effective borrowing rate of 10 percent within the calculation. The lease runs through September 2021. In May 2020, the Company entered into a lease for their corporate offices. The lease requires monthly payments ranging from $12,330 to $12,861 through the maturity of the lease in October 2023. At inception of the lease, the Company recorded a right of use asset and liability of $399,766. The Company used an effective borrowing rate of 10.35 percent within the calculation. |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 6 –NOTES PAYABLE Convertible Notes Payable During the year ended December 31, 2019, the Company issued a series of convertible notes with original principal balances of $1,000,000. The convertible notes had original maturity dates ranging from November 1, 2021 to December 1, 2021 and incur interest at 20% per annum. In July 2020, the due date of the convertible notes was extended to November 1, 2023. In addition, convertible notes are convertible upon issuance at a fixed price of $0.50 per common share. In connection with the issuance, the Company recorded a beneficial conversion feature of $44,000 resulting in a discount to the convertible notes. The discount is being amortized to interest expense using the straight-line method, due to the short-term nature of the convertible notes, over the term. During the three months ended March 31, 2021 and 2020, the Company amortized $3,546 and $5,712, respectively, to interest expense. The remaining discount of $24,606 is expected to be amortized throughout 2021 to 2023. The convertible notes include other provisions such as first right of refusal on additional capital raises, authorization of holder to incur debts senior to the convertible notes, etc. Additionally, should the holder exercise the option to exercise, a warrant to purchase an additional share of common stock for which the terms are not defined in the agreement. Thus, the issuance of the warrant is contingent to which the Company has not accounted for. Should warrants be ultimately issued, the Company expects to record the fair value of such as additional interest expense. C onvertible Notes Payable In August 2020, the Company entered into an agreement for borrowings up to $4.0 million. Upon closing, the Company received $1,950,000 and provided for a six-month interest reserve. Additional amounts are advanced as varies milestones are reached. The borrowing incur interest at 15% per annum with principal and outstanding interest due three years from the date of issuance. The Company’s assets secure the borrowings. In addition, the borrowings have a variety of financial and non-financial covenants. In addition, the borrowings are convertible at the lesser of $2.00 or 75% of the average closing price of the Company’s common stock for the preceding 30 days. Additionally, for every dollar advanced under the borrowing, the holder receives two shares of common stock. In 2020, the Company issued the holder 4,192,500 shares of common stock in connection with the convertible note. The agreement also includes a variety of other provisions related to inventory sold with specific discounts, markups, etc. Due to the variable conversion price, the Company recorded derivative liabilities for the conversion feature on the date of issuance. The derivative liabilities are valued on the date the borrowings become convertible and revalued at each reporting period. During the three months ended March 31, 2021, the Company revalued the fair market value of the derivative liabilities of $1,749,157 resulting in a loss of $3,685. The valuation of the derivative liabilities was based upon the following Black-Scholes option pricing model average assumptions: an exercise price of $0.37 our stock price on the date of revalue of $0.50, expected dividend yield of 0%, expected volatility of 98.00%, risk free interest rate of 0.64% and expected term of 2.37 years. In connection with the derivative liabilities and common stock issued, the Company recorded a $1,950,000 discount. The discount is being amortized over the term of the borrowings using the straight-line method due to the short-term nature. During the three months ended March 31, 2021, the Company amortized $160,274 of the discount to interest expense. As of March 31, 2021, a discount of $1,563,561 remained for which will be amortized in periods from 2021 to 2023. Related Party Convertible Notes Payable On June 15, 2020, the Company borrowed $30,000 from an individual related to a significant member of management. The loan is evidenced by a promissory note which bears interest at 10% per year and is due and payable on October 8, 2020. At the option of the lender, the note principal and any accrued interest may be converted into shares of the Company’s common stock. The number of shares of the Company’s common stock which will be issued upon any conversion will be determined by dividing the amount to be converted by $0.40. On the date of issuance, the conversion price of $0.40 was the closing market price of the Company’s common stock and thus a beneficial conversion feature was not recorded. In September 2020, the note was converted into 75,000 shares of common stock. At various times in 2020, the Company borrowed a total of $430,000 from an individual related to a director of the Company and a director of the Company. The loans are evidenced by a promissory notes which bears interest at 12% per year and are due and payable at dates ranging from December 10, 2020 to January 10, 2021. The proceeds were used for operations. At the option of the holders, the note principal and any accrued interest may be converted into shares of the Company’s common stock. The number of shares of the Company’s common stock which will be issued upon any conversion will be determined by dividing the amount to be converted by the lesser of $0.30 or 80% of the ten-day average closing price of the Company’s common stock immediately prior to the date of conversion. The holders also have the option to convert $900,000 owed to them from EdenFlo, LLC, as disclosed below, which debt was assumed the Company in connection with the acquisition of EdenFlo, at a price of $0.30 per share for a period of 12 months. Additionally, the holders were issued 215,000 shares of common stock in connection with the notes. On December 7, 2020, the loans were amended whereby the variable conversion price was removed. See below for additional accounting impact. Due to the variable conversion price, the Company recorded derivative liabilities for the conversion feature on the date of issuance. The derivative liabilities are valued on the date the convertible note payable become convertible and revalued at each reporting period. During the year ended December 31, 2020, the Company recorded initial derivative liabilities of $298,913 based upon the following Black-Scholes option pricing model average assumptions: an exercise price of $0.30 our stock price on the date of grant ranging from $0.40 - $0.49, expected dividend yield of 0%, expected volatility of 103.00%, risk free interest rate of 0.64% and expected terms of 0.5 years. Upon initial valuation, the derivative liabilities, as well as the fair market value of the 215,000 shares of common stock exceeded the face values of the convertible notes payable by $2,940, which was recorded as a day one loss in derivative liability. On December 7, 2020, the derivative liabilities were revalued at $540,475 resulting in a loss of $241,562. The value of the derivatives of $540,475 was recorded as a gain on extinguishment due to the modification of the exercise price. The inputs to value the derivative liabilities were similar to those on the date of issuance. In connection with the derivative liabilities and common stock issued, the Company recorded a $396,223 discount. The discount is being amortized over the term of the convertible note using the straight-line method due to the short-term nature. As of December 31, 2020, no discount remained. In connection with the EdenFlo asset acquisition, the Company assumed two notes payable with the former shareholders. Under the terms of the agreements $600,000 is payable on June 1, 2021 and does not incur interest and $300,000 is due on August 1, 2022 and does not incur interest. As disclosed above, both notes were modified to include a conversion feature at a price of $0.30 per share. The modification was treated as an extinguishment of the original note for which a loss on extinguishment of $448,000 was recorded. In connection with the SKM acquisition, the Company assumed four notes payable totaling $275,756 with the former membership. The notes do not incur interest and are due on demand. Notes Payable On March 6, 2020, the Company borrowed $1,500,000 from an unrelated third party. The loan is evidenced by a promissory note which bears interest at 8% per year. The note is due and payable as follows: ● $500,000, together with all accrued and unpaid interest, on April 13, 2020 ● $1,000,000, together with all accrued and unpaid interest, on May 6, 2020 Accrued interest will be paid in shares of the Company’s common stock based upon a 25% discount to the ten-day average closing price of the Company’s common stock immediately prior to May 6, 2020. Accrued interest will include 150,000 additional shares of the Company’s common stock and warrants to purchase 150,000 shares of the Company’s common stock. The warrants are exercisable at any time on or before January 1, 2025 at a price of $2.00 per share. The first payment of $500,000 was made on a timely basis. On issuance, the Company valued the 150,000 shares of common stock and the 150,000 warrants for common stock and recorded the relative fair market of $116,707 as a discount to the note payable. The Company is amortizing the discount over the term of the note payable using the straight-line method due to the short term of the note. During the three months ended March 31, 2020, the Company amortized $60,607 to interest expense. On April 20, 2020, the holder of the Note agreed to extend the due date for the $1,000,000 payment from May 6, 2020 to June 15, 2020. In consideration for extending the repayment date for the second amount to June 15, 2020, the Company issued to the note holder 200,000 shares of its common stock and warrants to purchase 200,000 shares of the Company’s common stock. The warrants are exercisable at a price of $2.00 per share and expire January 1, 2025. A late payment penalty of $5,000 per day will be due if the $1,000,000 is not paid by June 15, 2020. The Company determined the extension resulted in debt extinguishment accounting whereby the fair value of the additional consideration provided was in excess of the carrying value of the original note payable resulting in an extinguishment loss of $157,784. On June 9, 2020, the holder of the Note agreed to further extend the due date for the $1,000,000 payment to July 15, 2020. In consideration for extending the repayment date, the Company issued to the note holder an additional 200,000 shares of the Company’s common stock and warrants to purchase 200,000 shares of the Company’s common stock. The warrants are exercisable at a price of $2.00 per share and expire January 1, 2025. The Company determined the extension resulted in debt extinguishment accounting whereby the fair value of the additional consideration provided was in excess of the carrying value of the original note payable resulting in an extinguishment loss of $170,470. On July 14, 2020, the holder of the Note agreed to further extend the due date for the $1,000,000 payment to August 15, 2020. In consideration for extending the repayment date, the Company issued to the note holder an additional 100,000 shares of the Company’s common stock and warrants to purchase 200,000 shares of the Company’s common stock. The warrants are exercisable at a price of $2.00 per share and expire January 1, 2025. The Company determined the extension resulted in debt extinguishment accounting whereby the fair value of the additional consideration provided was in excess of the carrying value of the original note payable resulting in an extinguishment loss of $120,721. In addition, during the twelve months ended December 31, 2020, the Company issued 124,425 shares of common stock in satisfaction of $52,293 in accrued interest. The note was paid in full in August 2020. Note Payable - $200,000 On October 9, 2020, the Company borrowed $200,000 from an unrelated third party. The note incurred interest at 12% per annum and was due by November 9, 2020. The note was repaid. As further consideration, the Company issued 100,000 shares of its restricted common stock to the lender. The Company recorded the fair market value of the shares as a discount of $40,000 to the note for which all was amortized to interest expense during the year ended December 31, 2020. Note Payable - $173,705 On November 1, 2020, the Company entered into an agreement to convert accounts payable of $173,705 into a note payable. The note incurred interest at 8% per annum and is payable in monthly payments. Note Payable - $500,000 On November 17, 2020, the Company borrowed $500,000 from an unrelated third party. The note incurs interest at 8% per annum and initially matured on January 31, 2021. See below for discussion regarding the extension of the note. At the option of the lender, the loan and any accrued interest may be converted into shares of the Company’s common stock. The number of shares of the Company’s common stock which will be issued upon any conversion will be determined by dividing the amount to be converted by the lesser of 75% of the ten-day average closing price of the Company’s common stock immediately prior to the date of conversion or $0.50. Due to the variable conversion price, the Company recorded derivative liabilities for the conversion feature on the date of issuance. The derivative liabilities are valued on the date the borrowings become convertible and revalued at each reporting period. On March 31, 2021, the derivative liabilities were revalued at $285,120 resulting in a loss of $150,817. The derivative liabilities were revalued based upon the following Black-Scholes option pricing model average assumptions: an exercise price of $0.37 our stock price on the date of revalue of $0.50, expected dividend yield of 0%, expected volatility of 113.00%, risk free interest rate of 0.01% and expected term of 0.50 years. In connection with the derivative liabilities and common stock issued, the Company recorded a $287,454 discount. The discount is being amortized over the term of the borrowings using the straight-line method due to the short-term nature. During the three months ended March 31, 2021, the Company amortized $118,815 of the discount to interest expense. As of March 31, 2021, no discount remained. On January 31, 2021, the holder of the Note agreed to extend the due date for the Note to April 2, 2021. In consideration for extending the repayment date to April 2, 2021, the Company issued to the note holder 50,000 shares of its common stock and the interest rate of the Note was increased to 10% per annum. The Company recorded the fair market value of the common stock issued of $23,500 as a discount to the note for which was fully amortized to interest expense during the three months ended March 31, 2021. On April 16, 2021, the holder of the Note agreed to extend the due date for the Note to June 18, 2021. In consideration for extending the repayment date, the Company issued to the note holder 100,000 shares of its common stock, 100,000 shares of common stock for accrued interest through execution date and provided the holder with the option to extend the payment to September 15, 2021 for which an additional 150,000 shares of common stock would be provided, if extended. |
Stockholder's Deficit
Stockholder's Deficit | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Stockholder's Deficit | NOTE 7 – STOCKHOLDER’S DEFICIT Stock-Based Compensation The Company has entered into various employment and advisory agreements for which shares of common stock are issued with a variety of vesting provisions. The Company typically determines the fair market value of these awards on the date of grant and expensing that value over the vesting period which mirrors the service period. In May 2020, the Company entered into two-year employment agreements with Matthew Gregarek, the Company’s Chairman and Chief Executive Officer, David Burcham, the Company’s President, and Daniel Garza, the Company’s Chief Marketing Officer. Among various other salary and bonus terms, the agreements also provide for the award of shares of the Company’s restricted common stock and options to purchase shares of the Company’s common stock. Under these agreements, a total of 6,300,000 fully vested shares of common stock were granted upon execution of the agreements. An additional 1,300,000 shares of common stock were awarded that will vest on April 1, 2021. The agreements also provide for the future grant of additional shares of common stock should the individuals remain employed following the April 1, 2021 expiration date. For the three months ended March 31, 2021, the Company recorded $15,490 as stock-based compensation. The remaining expense outstanding is $60,854 for which will be recorded through 2022. During the year ended December 31, 2020, the Company entered into agreements with consultants for which provided investor awareness, research materials and other services. During the three months ended March 31, 2021, 80,000 shares of common stock were returned to the Company and cancelled. The Company recorded a reduction to stock-based compensation of $34,400 during the three months ended March 31, 2021. Options In May 2020, effective April 1, 2020, the individuals noted above were also granted a total of 5,750,000 options to purchase shares of the Company’s common stock. These options will vest in tranches at various dates through May 1, 2021 with escalating exercise prices ranging from $0.50 to $7.50 and are exercisable for approximately five years. These options were valued at $1,056,695 using a Black-Scholes Options Pricing Model. The fair value of the options granted in 2020 are estimated using a Black-Scholes Options Pricing Model with the following assumptions: Exercise price per share $ 3.40 Expected life (years) 2.97 Risk-free interest rate 0.64 % Expected volatility 135 % In 2021, the Company granted options to purchase 6,147,500 shares of common stock to employees and consultants. Some of the grants had effective dates within the 2020 calendar year. These options will vest in tranches at various points through 2023 with escalating prices ranging from $0.05 to $7.50 and are exercisable through various points through 2023. These options were valued at $1,070,043 using a Black-Scholes Options Pricing Model. For the three months ended March 31, 2021, the Company recorded $332,078 as stock-based compensation. The remaining expense outstanding is $737,965 for which will be recorded through 2023. The fair value of the options granted in 2021 are estimated using a Black-Scholes Options Pricing Model with the following assumptions: Exercise price per share $ 0.68 Expected life (years) 2.56 Risk-free interest rate 0.64 % Expected volatility 117 % Offering of Common Stock and Warrants In February 2019, the Company commenced a private offering of its common stock for up to $10 million in proceeds. The Company is offering up to 20 million shares of common stock at a purchase price of $0.50 per share. In addition, for each share purchased the investor will receive a warrant to purchase one additional share of common stock at a price of $2.00 per share. The warrants expire on December 31, 2021 or sooner at the Company’s option, if the Company’s stock trades for a price of $3.00 per share for 10 days with an average volume of 100,000 shares per day. During the nine months ended September 30, 2020, the Company received $150,000 related to the sale of 300,000 shares of common stock and warrants. On October 23, 2020, the Company sold 2,750,000 shares of its common stock to a private investor for $1,000,000 in proceeds. Between December 28 and December 30, 2020, the Company received $100,000 related to the sale of 200,000 shares of common stock and warrants. During the three months ended March 31, 2021, the Company received $480,000 related to the sale of 1,258,161 shares of common stock. Offering of Preferred Stock In March 2021, the Company commenced and subsequently closed a private offering of its preferred stock for up to $2 million in proceeds. The offering consisted of 20,000 shares of preferred stock at a price of $100 per share. The purchaser of the preferred stock has agreed to purchase the preferred stock in three tranches provided certain sales milestones are met. Concurrently with each issuance of preferred stock, the Company shall issue the preferred stockholder 500,000 warrants to purchase the Company’s common stock at a price of $0.75 per share. Preferred stockholders are entitled to a 10% dividend paid in additional shares of preferred stock on a quarterly basis and will receive dividend and liquidation preferences over the Company’s common stockholders. See Note 9 for subsequent sales and proceeds received. Common Stock and Warrants Issued with Notes Payable See Note 6 for issuance of shares in connection with note agreements. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 8 – RELATED PARTY TRANSACTIONS As of March 31, 2021 and December 31, 2020, the Company has $0 and $0, respectively, due to related parties. These amounts generally consist of accrued salaries and various expense reimbursements. See Note 7 for shares and options issued to management under employment contracts. In connection with the employment contracts, the Company accrued total deferred salaries and bonuses of $467,712 and $225,000 as of March 31, 2021, respectively. See Note 6 for discussion related to related party convertible notes payable. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 9 – SUBSEQUENT EVENTS Effective April 1, 2021, the Company amended the terms of the $500,000 convertible note detailed in Note 6 to extend the maturity date to June 18, 2021. In consideration for extending the repayment date to June 18, 2021, the Company issued 100,000 shares of its common stock to the note holder. The Company also issued 50,000 shares for the note holder’s extension in January 2021 and 100,000 shares in exchange for accrued interest, totaling 250,000 shares to the note holder. On April 5, 2021 the Company issued 250,000 shares to a third party for assignment of intellectual property, including patents and patent applications, agreed to on January 26, 2021. On April 14, 2021, the Company was sued by How Smooth It Is, Inc. in an effort to stall its obligations under the Business Loan and Security Agreement between the Company and HSII effective December 31, 2020. The Company is preparing its response to HSII’s complaint and believes that the suit is meritless and that the Company will likely prevail should the case go to trial. In the interim, the Company has provided a default notice to HSII and increased the interest rate on the amounts due to 25% as provided by the Business Loan and Security Agreement. On April 25, 2021, the Company revised the terms of the $1m convertible note detailed in Note 6 to redefine the accrual of interest under the convertible note and to adjust the balance due to reflect accrued interest prior to April 25, 2021. Under these revised terms, the outstanding principal is $1,300,000 and a late payment penalty shall be applied in the event the Company fails to make interest payments when due. On April 27, 2021, the Company amended the terms of the $4m Loan Agreement with an unrelated third party. Under the amended terms, further advances from the Loan Agreement are at the discretion of the Lender. On April 28, 2021, the Company received $500,000 related to additional borrowings under the $4m Loan Agreement detailed in Note 6. Pursuant to the Loan Agreement, the unrelated third party will be issued 1,000,000 shares in the second quarter of 2021. On April 29, 2021, the Company sold 6,660 shares of its Series A Preferred Stock to an unrelated third party and private investor for $660,000. Each Series A preferred share is: ● entitled to quarterly dividends of one-tenth of a Series A preferred share paid in common stock; ● convertible into 200 shares of the Company’s common stock; and ● entitled to 200 votes on any matter to be voted upon by the Company’s shareholders. The Company has evaluated subsequent events through the filing date of these consolidated financial statements and has disclosed that there are no other events that are material to the financial statements to be disclosed. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial information should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2020 of Pure Harvest Corporate Group, Inc. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the Unites States (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X pursuant to the requirements of the U.S. Securities and Exchange Commission (‘SEC”). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the interim periods are not necessarily indicative of the results of operations for the entire year. |
Going Concern | Going Concern The Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the above conditions raise substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustment to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. Management plans to fund future operations by raising capital and / or seeking joint venture opportunities. |
Principles of Consolidation | Principles of Consolidation The Company evaluates the need to consolidate affiliates based on standards set forth in Accounting Standards Codification (“ASC”) 810 Consolidation (“ASC 810”). The Consolidated financial statements include the accounts of the Company and its majority owned subsidiaries. All significant consolidated transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include estimated fair market value of assets and liabilities acquired under business combinations, useful lives and potential impairment of property and equipment, recoverability of goodwill and estimates of fair value of share-based payments. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company applies the accounting guidance under Financial accounting Standards Board (“FASB” ACS 820-10, “Fair Value Measurements”, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of non-performance. The guidance also establishes a fair value hierarchy for measurements of fair value as follows: ● Level 1 - quoted market prices in active markets for identical assets or liabilities. ● Level 2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amount of the Company’s financial instruments approximates their fair value as of March 31, 2021 and December 31, 2020, due to the short-term nature of these instruments. The Company’s derivative liabilities are considered a Level 2 liability. |
Net Loss Per Share | Net Loss per Share Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share”. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding during the period. For the three months ended March 31, 2021 and 2020, dilutive instruments consisted of convertible notes payable, options and warrants to purchase shares of the Company’s common stock totaling approximately 51.6 million and 28.4 million shares of common stock, respectively, the effects of which to the net loss are anti-dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-01, “Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815”, which clarifies the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting under Topic 323, and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The Company adopted the new standard on January 1, 2021, which did not have a significant impact on the Company. The FASB issues ASUs to amend the authoritative literature in ASC. There have been several ASUs issued to date, including those above, that amend the original text of ASC. Management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to us or (iv) are not expected to have a significant impact our consolidated financial statements. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Summary of Acquisition Related Preliminary Purchase Price | The calculation of the purchase prices are as follows: EdenFlo, LLC SKM TK SCT Totals Purchase Price Purchase Price Purchase Price Purchase Price Purchase Price Allocation Allocation Allocation Allocation Allocation Cash $ 2,398 $ 24,437 $ - $ 2,258 $ 29,093 Accounts receivable - - - 24,525 24,525 Inventory 846,958 - - 11,102 858,060 Prepaids and other current assets 8,585 - - 16,929 25,514 Property and equipment 926,671 100,057 - 10,680 1,037,408 Other assets 11,553 - - - 11,553 Licenses - 2,450,000 - - 2,450,000 Goodwill 1,522,725 - 22,495 599,196 2,144,416 Accounts payable and accrued liabilities - (36,653 ) - (69,000 ) (105,653 ) Loans payable - (313,301 ) - - (313,301 ) Loans payable - related party (960,000 ) - - - (960,000 ) Bargain purchase - (784,540 ) - - (784,540 ) $ 2,358,890 $ 1,440,000 $ 22,495 $ 595,690 $ 4,417,075 |
Schedule of Purchase Price Calculation | The following table summarizes the preliminary purchase price allocations: EdenFlo, LLC SKM TK SCT Totals Notes receivable $ 1,650,000 $ - $ - $ - $ 1,650,000 Interest receivable 46,879 - - - 46,879 Additional advances 384,409 - - 476,507 860,916 Fair market value of common stock issued 280,000 1,440,000 22,495 119,183 1,861,678 Cash (received) paid (2,398 ) - - - (2,398 ) $ 2,358,890 $ 1,440,000 $ 22,495 $ 595,690 $ 4,417,075 |
Stockholder's Deficit (Tables)
Stockholder's Deficit (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of Fair Value Black-Scholes Options Pricing | The fair value of the options granted in 2020 are estimated using a Black-Scholes Options Pricing Model with the following assumptions: Exercise price per share $ 3.40 Expected life (years) 2.97 Risk-free interest rate 0.64 % Expected volatility 135 % The fair value of the options granted in 2021 are estimated using a Black-Scholes Options Pricing Model with the following assumptions: Exercise price per share $ 0.68 Expected life (years) 2.56 Risk-free interest rate 0.64 % Expected volatility 117 % |
Organization and Description _2
Organization and Description of Business (Details Narrative) | Dec. 31, 2018shares |
Pure Harvest Cannabis Producers, Inc [Member] | Post-split [Member] | |
Number of common stock shares acquired | 17,906,016 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accounting Policies [Abstract] | ||
Antidilutive securities excluded from computation of earnings per share amount | 51,600,000 | 28,400,000 |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) | Aug. 14, 2020shares | Apr. 24, 2020USD ($)shares | Mar. 13, 2020shares | Mar. 12, 2020USD ($)ft²shares | Feb. 12, 2020shares | Jul. 29, 2020 | Apr. 09, 2020 |
Ownership percentage | 51.00% | ||||||
How Smooth It Is, Inc. [Member] | |||||||
Ownership percentage | 51.00% | 51.00% | |||||
Payment to acquire membership interests | $ | $ 1,500,000 | ||||||
Area of land | ft² | 5,800 | ||||||
Sofa King Medicinal Wellness Products, LLC [Member] | |||||||
Number of shares issued for membership interests | 3,000,000 | ||||||
Test Kitchen Inc [Member] | |||||||
Number of shares issued for membership interests | 50,000 | ||||||
EdenFlo, LLC [Member] | |||||||
Stock issued during period acquisition, shares | 7,000,000 | ||||||
Stock issued during period acquisition, value | $ | $ 1,650,000 | ||||||
Accrued interest | $ | 46,879 | ||||||
Other advances fund operations | $ | $ 384,409 | ||||||
Operating Agreement [Member] | Dr. James Rouse [Member] | |||||||
Ownership percentage | 51.00% | ||||||
Purchase right, percentage | 49.00% | ||||||
Number of shares issued for services provided | 400,000 | ||||||
Restricted Stock [Member] | How Smooth It Is, Inc. [Member] | |||||||
Number of shares issued for membership interests | 7,000,000 |
Acquisitions - Summary of Acqui
Acquisitions - Summary of Acquisition Related Preliminary Purchase Price (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Cash | $ 29,093 | |
Accounts receivable | 24,525 | |
Inventory | 858,060 | |
Prepaids and other current assets | 25,514 | |
Property and equipment | 1,037,408 | |
Other assets | 11,553 | |
Licenses | 2,450,000 | |
Goodwill | 1,550,225 | $ 1,550,225 |
Accounts payable and accrued liabilities | (105,653) | |
Loans payable | (313,301) | |
Loans payable - related party | (960,000) | |
Bargain purchase | (784,540) | |
Assets acquired and liabilities noncontrolling interest | 4,417,075 | |
EdenFlo, LLC [Member] | ||
Cash | 2,398 | |
Accounts receivable | ||
Inventory | 846,958 | |
Prepaids and other current assets | 8,585 | |
Property and equipment | 926,671 | |
Other assets | 11,553 | |
Licenses | ||
Goodwill | 1,522,725 | |
Accounts payable and accrued liabilities | ||
Loans payable | ||
Loans payable - related party | (960,000) | |
Bargain purchase | ||
Assets acquired and liabilities noncontrolling interest | 2,358,890 | |
Sofa King Medicinal Wellness Products, LLC [Member] | ||
Cash | 24,437 | |
Accounts receivable | ||
Inventory | ||
Prepaids and other current assets | ||
Property and equipment | 100,057 | |
Other assets | ||
Licenses | 2,450,000 | |
Goodwill | ||
Accounts payable and accrued liabilities | (36,653) | |
Loans payable | (313,301) | |
Loans payable - related party | ||
Bargain purchase | (784,540) | |
Assets acquired and liabilities noncontrolling interest | 1,440,000 | |
Test Kitchen Inc [Member] | ||
Cash | ||
Accounts receivable | ||
Inventory | ||
Prepaids and other current assets | ||
Property and equipment | ||
Other assets | ||
Licenses | ||
Goodwill | 22,495 | |
Accounts payable and accrued liabilities | ||
Loans payable | ||
Loans payable - related party | ||
Bargain purchase | ||
Assets acquired and liabilities noncontrolling interest | 22,495 | |
SCT [Member] | ||
Cash | 2,258 | |
Accounts receivable | 24,525 | |
Inventory | 11,102 | |
Prepaids and other current assets | 16,929 | |
Property and equipment | 10,680 | |
Other assets | ||
Licenses | ||
Goodwill | 599,196 | |
Accounts payable and accrued liabilities | (69,000) | |
Loans payable | ||
Loans payable - related party | ||
Bargain purchase | ||
Assets acquired and liabilities noncontrolling interest | $ 595,690 |
Acquisitions - Schedule of Purc
Acquisitions - Schedule of Purchase Price Calculation (Details) | Mar. 31, 2021USD ($) |
Notes receivable | $ 1,650,000 |
Interest receivable | 46,879 |
Additional advances | 860,916 |
Fair market value of common stock issued | 1,861,678 |
Cash (received) paid | (2,398) |
Total | 4,417,075 |
EdenFlo, LLC [Member] | |
Notes receivable | 1,650,000 |
Interest receivable | 46,879 |
Additional advances | 384,409 |
Fair market value of common stock issued | 280,000 |
Cash (received) paid | (2,398) |
Total | 2,358,890 |
Sofa King Medicinal Wellness Products, LLC [Member] | |
Notes receivable | |
Interest receivable | |
Additional advances | |
Fair market value of common stock issued | 1,440,000 |
Cash (received) paid | |
Total | 1,440,000 |
Test Kitchen Inc [Member] | |
Notes receivable | |
Interest receivable | |
Additional advances | |
Fair market value of common stock issued | 22,495 |
Cash (received) paid | |
Total | 22,495 |
SCT [Member] | |
Notes receivable | |
Interest receivable | |
Additional advances | 476,507 |
Fair market value of common stock issued | 119,183 |
Cash (received) paid | |
Total | $ 595,690 |
Notes Receivable (Details Narra
Notes Receivable (Details Narrative) - USD ($) | Dec. 31, 2020 | Apr. 24, 2020 | Mar. 12, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2021 | Aug. 07, 2020 | Jul. 29, 2020 | Jun. 15, 2020 | Apr. 09, 2020 | Jan. 31, 2020 | Jun. 30, 2019 | May 31, 2019 |
Notes receivable | $ 2,750,000 | $ 2,750,000 | $ 2,250,000 | |||||||||||
Debt interest rate | 10.00% | |||||||||||||
Ownership interest percentage | 51.00% | |||||||||||||
Note Receivable Loan and Security Agreement [Member] | ||||||||||||||
Debt maturity date | Mar. 31, 2021 | |||||||||||||
Debt interest rate | 8.00% | 8.00% | ||||||||||||
Debt instrument, face amount | $ 2,750,000 | $ 2,750,000 | ||||||||||||
Debt instrument, description | Under the agreement, if the loan is not repaid by March 31, 2021, as long as there have been no defaults, the loan will be extended to July 31, 2021. During the extended period, the interest rate increases to 12% per annum. In addition, with the extended period, the Company receives various royalties on products sold by the borrower for a period of three year commencing on April 1, 2021. On March 31, 2021, the note was extended to July 31, 2021 in accordance with the terms. The loan is secured by all the assets of. As of March 31, 2021, the Company estimated that a reserve of $500,000, should be applied to the outstanding note receivable | |||||||||||||
How Smooth Inc [Member] | ||||||||||||||
Notes receivable | $ 1,500,000 | |||||||||||||
Advances to related party | $ 247,845 | $ 800,000 | 247,845 | $ 800,000 | $ 700,000 | |||||||||
Debt maturity date | Jun. 1, 2020 | |||||||||||||
Debt interest rate | 10.00% | 10.00% | ||||||||||||
How Smooth Inc [Member] | Sixty Days [Member] | ||||||||||||||
Debt interest rate | 6.00% | 6.00% | ||||||||||||
How Smooth It Is, Inc. [Member] | ||||||||||||||
Ownership interest percentage | 51.00% | 51.00% | ||||||||||||
Payment to acquire membership interests | $ 1,500,000 | |||||||||||||
Note payable | $ 2,150,000 | |||||||||||||
How Smooth It Is, Inc. [Member] | Restricted Stock [Member] | ||||||||||||||
Number of shares issued for membership interests | 7,000,000 | |||||||||||||
EdenFlo, LLC [Member] | ||||||||||||||
Advances to related party | $ 1,650,000 | $ 1,650,000 | ||||||||||||
Debt maturity date | Jun. 1, 2020 | |||||||||||||
Debt interest rate | 10.00% | 10.00% | ||||||||||||
Other advances fund operations | $ 384,409 | |||||||||||||
EdenFlo, LLC [Member] | Sixty Days [Member] | ||||||||||||||
Debt interest rate | 6.00% | 6.00% | ||||||||||||
Two Unrelated Individuals [Member] | ||||||||||||||
Notes receivable | $ 28,593 | $ 28,593 | ||||||||||||
SCT [Member] | ||||||||||||||
Other advances fund operations | $ 476,507 |
Lease Agreements (Details Narra
Lease Agreements (Details Narrative) - USD ($) | 1 Months Ended | ||||
May 31, 2020 | May 31, 2019 | Mar. 31, 2021 | Dec. 31, 2020 | Apr. 30, 2020 | |
Lease term | 3 years | ||||
Number of commitment fee shares | 400,000 | ||||
Effective borrowing rate | 10.35% | 10.00% | 10.00% | ||
Right of use asset | $ 399,766 | $ 469,565 | $ 537,393 | $ 140,988 | |
Lease liability | $ 399,766 | $ 140,988 | |||
Lease maturity date | Oct. 31, 2023 | ||||
Minimum [Member] | |||||
Property purchase price | $ 1,400,000 | ||||
Monthly lease payments | $ 12,330 | ||||
Maximum [Member] | |||||
Property purchase price | $ 1,600,000 | ||||
Monthly lease payments | $ 12,861 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) | Apr. 16, 2021shares | Mar. 31, 2021USD ($)$ / shares | Jan. 31, 2021USD ($)shares | Dec. 07, 2020USD ($) | Nov. 17, 2020USD ($)Integer$ / shares | Oct. 09, 2020USD ($)shares | Jul. 14, 2020USD ($)$ / sharesshares | Jun. 15, 2020USD ($)$ / sharesshares | Jun. 09, 2020USD ($)$ / sharesshares | Apr. 20, 2020USD ($)$ / sharesshares | Mar. 06, 2020USD ($)Integer$ / sharesshares | Sep. 30, 2020shares | Aug. 31, 2020USD ($)$ / shares | Jul. 31, 2020USD ($) | Mar. 31, 2021USD ($)$ / sharesshares | Mar. 31, 2020USD ($)shares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / shares | Apr. 25, 2021USD ($) | Nov. 01, 2020USD ($) |
Debt interest rate | 10.00% | |||||||||||||||||||
Conversion price per share | $ / shares | $ 0.40 | |||||||||||||||||||
Amortization of interest expense | $ 3,546 | $ 5,712 | ||||||||||||||||||
Debt discount | $ 24,606 | 24,606 | ||||||||||||||||||
Debt discount description | The remaining discount of $24,606 is expected to be amortized throughout 2021 to 2023. | |||||||||||||||||||
Amortized discount on interest expense | 306,135 | 66,319 | ||||||||||||||||||
Short term borrowing | $ 30,000 | |||||||||||||||||||
Issuance of common stock for cash, shares | shares | 215,000 | |||||||||||||||||||
Extinguishment loss | ||||||||||||||||||||
Payment of notes payable | 59,292 | |||||||||||||||||||
Issuance of common stock for accrued interest | $ 3,363 | |||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||
Issuance of common stock for cash, shares | shares | 1,258,161 | 200,000 | ||||||||||||||||||
Issuance of common stock for accrued interest | $ 85 | $ 52,293 | ||||||||||||||||||
Issuance of common stock for accrued interest, shares | shares | 8,515 | 124,425 | ||||||||||||||||||
EdenFlo Asset Acquisition [Member] | ||||||||||||||||||||
Extinguishment loss | $ 448,000 | |||||||||||||||||||
Individual related to Director [Member] | ||||||||||||||||||||
Debt interest rate | 12.00% | |||||||||||||||||||
Short term borrowing | $ 430,000 | |||||||||||||||||||
Director [Member] | ||||||||||||||||||||
Debt interest rate | 12.00% | |||||||||||||||||||
Short term borrowing | $ 430,000 | |||||||||||||||||||
The Holder [Member] | ||||||||||||||||||||
Debt interest rate | 80.00% | |||||||||||||||||||
Conversion price per share | $ / shares | $ 0.30 | |||||||||||||||||||
Unrelated Third Party [Member] | ||||||||||||||||||||
Convertible notes principal balance amount | $ 900,000 | |||||||||||||||||||
Debt interest rate | 8.00% | |||||||||||||||||||
Short term borrowing | $ 1,500,000 | |||||||||||||||||||
Note Holder [Member] | ||||||||||||||||||||
Convertible notes mature dates | Aug. 15, 2020 | Jul. 15, 2020 | Jun. 15, 2020 | |||||||||||||||||
Issuance of common stock for cash, shares | shares | 100,000 | 200,000 | 200,000 | |||||||||||||||||
Extinguishment loss | $ 120,721 | $ 170,470 | $ 157,784 | |||||||||||||||||
Notes payable | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | |||||||||||||||||
Warrants to purchase common stock | shares | 200,000 | 200,000 | 200,000 | |||||||||||||||||
Warrant exercisable date | Jan. 1, 2025 | Jan. 1, 2025 | Jan. 1, 2025 | |||||||||||||||||
Warrants exercise price | $ / shares | $ 2 | $ 2 | $ 2 | |||||||||||||||||
Payment of notes payable | $ 1,000,000 | |||||||||||||||||||
Debt instrument maturity date description | Payment from May 6, 2020 to June 15, 2020. | |||||||||||||||||||
Penalty payment | $ 5,000 | |||||||||||||||||||
Measurement Input, Exercise Price [Member] | ||||||||||||||||||||
Derivative liability, stock price | $ / shares | $ 0.30 | |||||||||||||||||||
Measurement Input, Expected Dividend Rate [Member] | ||||||||||||||||||||
Derivative liability, measurement input, percentage | 0 | |||||||||||||||||||
Measurement Input, Price Volatility [Member] | ||||||||||||||||||||
Derivative liability, measurement input, percentage | 103 | |||||||||||||||||||
Measurement Input, Risk Free Interest Rate [Member] | ||||||||||||||||||||
Derivative liability, measurement input, percentage | 0.64 | |||||||||||||||||||
Measurement Input, Expected Term [Member] | ||||||||||||||||||||
Derivative liability, measurement input term | 6 months | |||||||||||||||||||
Minimum [Member] | Measurement Input, Share Price [Member] | ||||||||||||||||||||
Derivative liability, stock price | $ / shares | $ 0.40 | |||||||||||||||||||
Maximum [Member] | Measurement Input, Share Price [Member] | ||||||||||||||||||||
Derivative liability, stock price | $ / shares | $ 0.49 | |||||||||||||||||||
Convertible Notes Payable [Member] | ||||||||||||||||||||
Convertible notes principal balance amount | $ 1,000,000 | |||||||||||||||||||
Convertible notes mature dates | Nov. 1, 2023 | |||||||||||||||||||
Debt interest rate | 15.00% | 20.00% | ||||||||||||||||||
Conversion price per share | $ / shares | $ 2 | $ 0.50 | ||||||||||||||||||
Beneficial conversion feature | $ 44,000 | |||||||||||||||||||
Debt maximum borrowing capacity | $ 4,000,000 | |||||||||||||||||||
Proceeds from issuance of debt | $ 1,950,000 | |||||||||||||||||||
Closing price percentage | 75.00% | |||||||||||||||||||
Shares owed to holders | shares | 4,192,500 | |||||||||||||||||||
Derivative liabilities | $ 1,749,157 | $ 1,749,157 | ||||||||||||||||||
Loss on derivative liability | 3,685 | |||||||||||||||||||
Amortized amount | 1,950,000 | |||||||||||||||||||
Amortized discount on interest expense | 160,274 | |||||||||||||||||||
Amortized discount | $ 1,563,561 | |||||||||||||||||||
Convertible Notes Payable [Member] | Subsequent Event [Member] | ||||||||||||||||||||
Convertible notes principal balance amount | $ 1,000,000 | |||||||||||||||||||
Notes payable | $ 1,300,000 | |||||||||||||||||||
Convertible Notes Payable [Member] | Measurement Input, Exercise Price [Member] | ||||||||||||||||||||
Derivative liability, measurement input, percentage | 0.37 | 0.37 | ||||||||||||||||||
Convertible Notes Payable [Member] | Measurement Input, Share Price [Member] | ||||||||||||||||||||
Derivative liability, measurement input, percentage | 0.50 | 0.50 | ||||||||||||||||||
Convertible Notes Payable [Member] | Measurement Input, Expected Dividend Rate [Member] | ||||||||||||||||||||
Derivative liability, measurement input, percentage | 0 | 0 | ||||||||||||||||||
Convertible Notes Payable [Member] | Measurement Input, Price Volatility [Member] | ||||||||||||||||||||
Derivative liability, measurement input, percentage | 98 | 98 | ||||||||||||||||||
Convertible Notes Payable [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||||||||||||||||||
Derivative liability, measurement input, percentage | 0.64 | 0.64 | ||||||||||||||||||
Convertible Notes Payable [Member] | Measurement Input, Expected Term [Member] | ||||||||||||||||||||
Derivative liability, measurement input term | 2 years 4 months 13 days | |||||||||||||||||||
Convertible Notes Payable [Member] | Minimum [Member] | ||||||||||||||||||||
Convertible notes mature dates | Nov. 1, 2021 | |||||||||||||||||||
Convertible Notes Payable [Member] | Maximum [Member] | ||||||||||||||||||||
Convertible notes mature dates | Dec. 1, 2021 | |||||||||||||||||||
Related Party Convertible Notes Payable [Member] | ||||||||||||||||||||
Derivative liabilities | $ 298,913 | |||||||||||||||||||
Loss on derivative liability | 2,940 | |||||||||||||||||||
Amortized discount | $ 396,223 | |||||||||||||||||||
Number of shares issued upon debt conversion | shares | 75,000 | |||||||||||||||||||
Issuance of common stock for cash, shares | shares | 215,000 | |||||||||||||||||||
Revalued derivative liability | 540,475 | |||||||||||||||||||
Gain on derivative liability | 241,562 | |||||||||||||||||||
Extinguishment loss | $ 540,475 | |||||||||||||||||||
Related Party Convertible Notes Payable [Member] | Minimum [Member] | ||||||||||||||||||||
Convertible notes mature dates | Dec. 10, 2020 | |||||||||||||||||||
Related Party Convertible Notes Payable [Member] | Maximum [Member] | ||||||||||||||||||||
Convertible notes mature dates | Jan. 10, 2021 | |||||||||||||||||||
Notes Payable One [Member] | ||||||||||||||||||||
Convertible notes mature dates | Apr. 13, 2020 | |||||||||||||||||||
Amortized amount | $ 287,454 | |||||||||||||||||||
Amortized discount on interest expense | 118,815 | |||||||||||||||||||
Notes payable | $ 500,000 | |||||||||||||||||||
Notes Payable One [Member] | EdenFlo Asset Acquisition [Member] | ||||||||||||||||||||
Convertible notes principal balance amount | $ 600,000 | |||||||||||||||||||
Convertible notes mature dates | Jun. 1, 2021 | |||||||||||||||||||
Conversion price per share | $ / shares | $ 0.30 | |||||||||||||||||||
Notes Payable Two [Member] | ||||||||||||||||||||
Convertible notes mature dates | May 6, 2020 | |||||||||||||||||||
Notes payable | $ 1,000,000 | |||||||||||||||||||
Notes Payable Two [Member] | EdenFlo Asset Acquisition [Member] | ||||||||||||||||||||
Convertible notes principal balance amount | $ 300,000 | |||||||||||||||||||
Convertible notes mature dates | Aug. 1, 2022 | |||||||||||||||||||
Conversion price per share | $ / shares | $ 0.30 | |||||||||||||||||||
Four Notes Payable [Member] | Sofa King Medicinal Wellness Products, LLC [Member] | ||||||||||||||||||||
Notes payable | $ 275,756 | |||||||||||||||||||
Convertible Notes Payable [Member] | ||||||||||||||||||||
Amortization of interest expense | 60,607 | |||||||||||||||||||
Derivative liabilities | $ 285,120 | $ 285,120 | ||||||||||||||||||
Loss on derivative liability | $ 150,817 | |||||||||||||||||||
Debt instrument trading price days | 25.00% | |||||||||||||||||||
Debt instrument trading days | Integer | 10 | |||||||||||||||||||
Number of additional shares included in accrued interest | shares | 150,000 | |||||||||||||||||||
Warrants to purchase common stock | shares | 150,000 | |||||||||||||||||||
Warrant exercisable date | Jan. 1, 2025 | |||||||||||||||||||
Warrants exercise price | $ / shares | $ 2 | |||||||||||||||||||
Payment of notes payable | $ 500,000 | |||||||||||||||||||
Fair value of discount on note payable | $ 116,707 | |||||||||||||||||||
Convertible Notes Payable [Member] | Measurement Input, Exercise Price [Member] | ||||||||||||||||||||
Derivative liability, measurement input, percentage | $ / shares | 0.37 | 0.37 | ||||||||||||||||||
Convertible Notes Payable [Member] | Measurement Input, Share Price [Member] | ||||||||||||||||||||
Derivative liability, measurement input, percentage | $ / shares | 0.50 | 0.50 | ||||||||||||||||||
Convertible Notes Payable [Member] | Measurement Input, Expected Dividend Rate [Member] | ||||||||||||||||||||
Derivative liability, measurement input, percentage | 0 | 0 | ||||||||||||||||||
Convertible Notes Payable [Member] | Measurement Input, Price Volatility [Member] | ||||||||||||||||||||
Derivative liability, measurement input, percentage | 113 | 113 | ||||||||||||||||||
Convertible Notes Payable [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||||||||||||||||||
Derivative liability, measurement input, percentage | 0.01 | 0.01 | ||||||||||||||||||
Convertible Notes Payable [Member] | Measurement Input, Expected Term [Member] | ||||||||||||||||||||
Derivative liability, measurement input term | 6 months | |||||||||||||||||||
Note Payable - $200,000 [Member] | ||||||||||||||||||||
Convertible notes mature dates | Nov. 9, 2020 | |||||||||||||||||||
Debt interest rate | 12.00% | |||||||||||||||||||
Amortized discount on interest expense | $ 40,000 | |||||||||||||||||||
Notes payable | $ 200,000 | |||||||||||||||||||
Note Payable - $200,000 [Member] | Lender [Member] | Restricted Stock [Member] | ||||||||||||||||||||
Stock issued during the period restricted stock | shares | 100,000 | |||||||||||||||||||
Note Payable - $173,705 [Member] | ||||||||||||||||||||
Debt interest rate | 8.00% | |||||||||||||||||||
Notes payable | $ 173,705 | |||||||||||||||||||
Note Payable - $500,000 [Member] | ||||||||||||||||||||
Convertible notes mature dates | Apr. 2, 2021 | Jan. 31, 2020 | ||||||||||||||||||
Debt interest rate | 10.00% | 8.00% | ||||||||||||||||||
Conversion price per share | $ / shares | $ 0.50 | |||||||||||||||||||
Debt discount | $ 23,500 | |||||||||||||||||||
Shares owed to holders | shares | 50,000 | |||||||||||||||||||
Notes payable | $ 500,000 | |||||||||||||||||||
Debt instrument trading price days | 75.00% | |||||||||||||||||||
Debt instrument trading days | Integer | 10 | |||||||||||||||||||
Note Payable - $500,000 [Member] | Subsequent Event [Member] | ||||||||||||||||||||
Convertible notes mature dates | Jun. 18, 2021 | |||||||||||||||||||
Issuance of common stock for cash, shares | shares | 100,000 | |||||||||||||||||||
Number of additional shares included in accrued interest | shares | 150,000 | |||||||||||||||||||
Issuance of common stock for accrued interest, shares | shares | 100,000 |
Stockholder's Deficit (Details
Stockholder's Deficit (Details Narrative) - USD ($) | Dec. 30, 2020 | Oct. 23, 2020 | Jun. 15, 2020 | Mar. 31, 2021 | May 31, 2020 | Feb. 28, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | Sep. 30, 2020 |
Stock-based compensation | $ 316,006 | $ 11,502 | |||||||
Share Based Compensation | $ 737,965 | ||||||||
Number of granted common stock | 5,750,000 | 6,147,500 | |||||||
Options expiration period | 5 years | ||||||||
Fair value of stock options | $ 1,056,695 | $ 1,070,043 | |||||||
Proceeds from issuance of common stock | $ 100,000 | $ 480,000 | $ 100,000 | ||||||
Issuance of common stock for cash, shares | 215,000 | ||||||||
Consideration received on sale of stock | $ 200,000 | ||||||||
Sale of common stock and warrants | 1,258,161 | ||||||||
Private Investor [Member] | |||||||||
Number of common stock issued | 2,750,000 | ||||||||
Proceeds from issuance of common stock | $ 1,000,000 | ||||||||
Common Stock and Warrants [Member] | |||||||||
Consideration received on sale of stock | $ 150,000 | ||||||||
Sale of common stock and warrants | 300,000 | ||||||||
Private Offering [Member] | |||||||||
Proceeds from issuance of common stock | $ 2,000,000 | $ 10,000,000 | |||||||
Issuance of common stock for cash, shares | 20,000 | 20,000,000 | |||||||
Sale of stock price per share | $ 100 | $ 0.50 | $ 100 | ||||||
Number of warrants issued to purchase common stock | 500,000 | 1 | 500,000 | ||||||
Warrant exercise price | $ 0.75 | $ 2 | $ 0.75 | ||||||
Warrant expiration date | Dec. 31, 2021 | ||||||||
Common stock trade price per share | $ 3 | ||||||||
Average volume shares per day | 100,000 | ||||||||
Percentage of preferred stock dividend | 10.00% | ||||||||
Minimum [Member] | |||||||||
Stock option exercise price | $ 0.50 | 0.05 | |||||||
Maximum [Member] | |||||||||
Stock option exercise price | $ 7.50 | $ 7.50 | |||||||
Two-year Employment Agreements [Member] | |||||||||
Number of common stock issued | 6,300,000 | ||||||||
Shares vesting period | 2 years | ||||||||
Number of common stock awarded | 1,300,000 | ||||||||
Stock-based compensation | $ 15,490 | ||||||||
Remaining prepaid expenses | $ 60,854 | ||||||||
Number of common stock returned | 80,000 | ||||||||
Vesting period, description | vest on April 1, 2021 | ||||||||
Future granted share expiration date | Apr. 1, 2021 | ||||||||
Share Based Compensation | $ 34,400 |
Stockholder's Deficit - Schedul
Stockholder's Deficit - Schedule of Fair Value Black-Scholes Options Pricing (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | ||
Exercise price per share | $ 0.68 | $ 3.40 |
Expected life (years) | 2 years 6 months 21 days | 2 years 11 months 19 days |
Risk-free interest rate | 0.64% | 0.64% |
Expected volatility | 117.00% | 135.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Related Party Transactions [Abstract] | ||
Due to related parties | $ 0 | $ 0 |
Accrued deferred salaries | 467,712 | |
Accrued bonuses | $ 225,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Apr. 29, 2021 | Apr. 28, 2021 | Apr. 05, 2021 | Apr. 02, 2021 | Dec. 30, 2020 | Jun. 15, 2020 | Jul. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Apr. 27, 2021 | Apr. 25, 2021 | Apr. 14, 2021 | Aug. 31, 2020 |
Debt interest rate | 10.00% | ||||||||||||||
Repayment of debt | $ 59,292 | ||||||||||||||
Number of shares issued | 215,000 | ||||||||||||||
Number of shares sold | 1,258,161 | ||||||||||||||
Number of shares sold, value | $ 200,000 | ||||||||||||||
Convertible Notes Payable [Member] | |||||||||||||||
Debt maturity date | Nov. 1, 2023 | ||||||||||||||
Debt interest rate | 20.00% | 15.00% | |||||||||||||
Convertable note principal amount | $ 1,000,000 | ||||||||||||||
How Smooth Inc [Member] | |||||||||||||||
Debt maturity date | Jun. 1, 2020 | ||||||||||||||
Debt interest rate | 10.00% | ||||||||||||||
Loan Agreement [Member] | Forecast [Member] | |||||||||||||||
Number of shares issued | 1,000,000 | ||||||||||||||
Subsequent Event [Member] | |||||||||||||||
Convertible note | $ 500,000 | ||||||||||||||
Issuance of shares for assignment of intellectual property | 250,000 | ||||||||||||||
Subsequent Event [Member] | Series A Preferred Stock [Member] | |||||||||||||||
Convertible common shares | 200 | ||||||||||||||
Preferred stock, voting rights | Entitled to 200 votes on any matter to be voted upon by the Company's shareholders. | ||||||||||||||
Subsequent Event [Member] | Series A Preferred Stock [Member] | Unrelated Third Party and Private Investor [Member] | |||||||||||||||
Number of shares sold | 6,660 | ||||||||||||||
Number of shares sold, value | $ 660,000 | ||||||||||||||
Subsequent Event [Member] | Convertible Notes Payable [Member] | |||||||||||||||
Convertable note principal amount | $ 1,000,000 | ||||||||||||||
Outstanding principal | $ 1,300,000 | ||||||||||||||
Subsequent Event [Member] | Business Loan and Security Agreement [Member] | How Smooth Inc [Member] | |||||||||||||||
Debt interest rate | 25.00% | ||||||||||||||
Subsequent Event [Member] | Loan Agreement [Member] | |||||||||||||||
Loan agreement value | $ 4,000,000 | ||||||||||||||
Repayment of debt | $ 500,000 | ||||||||||||||
Subsequent Event [Member] | The Note Holder [Member] | |||||||||||||||
Number of shares issued for notes | 100,000 | ||||||||||||||
Subsequent Event [Member] | The Note Holder One [Member] | |||||||||||||||
Number of shares issued for notes | 50,000 | ||||||||||||||
Issuance of common stock for accrued interest, shares | 100,000 | ||||||||||||||
Subsequent Event [Member] | Extended Maturity [Member] | |||||||||||||||
Debt maturity date | Jun. 18, 2021 |