Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 14, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | United Cannabis Corp | |
Entity Central Index Key | 0001436161 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Is Entity's Reporting Status Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Incorporation | CO | |
Entity File Number | 000-54582 | |
Entity Common Stock, Shares Outstanding | 85,314,264 |
UNAUDITED CONSOLIDATED BALANCE
UNAUDITED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 565,452 | $ 664,570 |
Accounts receivable, net | 4,938 | 171,747 |
Due from related parties | 134,766 | 86,971 |
Inventory | 511,356 | 2,552,118 |
Other current assets | 25,945 | 34,932 |
Total current assets | 1,242,457 | 3,510,338 |
Construction in process - extraction facilities | 185,699 | 1,937,187 |
Cultivation facility, laboratory equipment, and office furniture and fixtures, net of accumulated amortization and depreciation of $917,948 and $433,148 at September 30, 2019 and December 31, 2018, respectively | 4,603,797 | 2,119,745 |
Operating lease right-of-use asset | 2,136,876 | |
Granted patents, net of amortization of $15,132 and $9,795 at September 30, 2019 and December 31, 2018, respectively | 127,185 | 132,522 |
Intangible assets | 277,366 | 270,508 |
Other assets | 370,501 | 84,329 |
Goodwill | 106,874 | 4,838,603 |
Total assets | 9,050,755 | 12,893,232 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,725,357 | 1,302,502 |
Construction contracts payable | 888,686 | |
Installment loans payable | 117,981 | 57,799 |
Advance receipts and deferred revenue | 471,150 | 23,750 |
Current portion of operating leases | 574,230 | |
Notes payable to officers and directors | 1,180,963 | 1,155,436 |
Notes payable, net of a debt discount of $375,542 and $62,917 at September 30, 2019 and December 31, 2018, respectively | 8,654,458 | 1,512,083 |
Arbitration reserve | 650,000 | 650,000 |
Total current liabilities | 13,374,139 | 5,590,256 |
Long term liabilities: | ||
Operating leases | 1,570,478 | |
Total liabilities | 14,944,617 | 5,590,256 |
COMMITMENTS AND CONTINGENCIES - Note 19 | ||
STOCKHOLDERS' (DEFICIT) EQUITY | ||
Preferred stock, 10,000,000 shares authorized; 3,000 and 2,000 Series A shares outstanding at September 30, 2019 and December 31, 2018, respectively | 3,300 | 2,200 |
Common stock, 200,000,000 shares authorized; 85,314,264 and 77,466,979 shares outstanding at September 30, 2019 and December 31, 2018, respectively | 51,340,289 | 46,939,646 |
Accumulated deficit | (56,797,504) | (39,374,397) |
Total equity attributable to stockholders of the Company | (5,453,915) | 7,567,449 |
Non-controlling interest (deficit) | (439,947) | (264,473) |
Total stockholders' (deficit) equity | (5,893,862) | 7,302,976 |
Total liabilities and stockholders' equity | $ 9,050,755 | $ 12,893,232 |
UNAUDITED CONSOLIDATED BALANC_2
UNAUDITED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Accumulated depreciation | $ 917,948 | $ 433,148 |
Accumulated amortization | 15,132 | 9,795 |
Notes payable, debt discount | $ 375,542 | $ 62,917 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares outstanding | 85,314,264 | 77,466,979 |
Preferred Class A [Member] | ||
Preferred stock, shares outstanding | 3,000 | 2,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues | ||||
Product revenues | $ 4,722,171 | $ 2,099,591 | $ 12,796,611 | $ 4,026,298 |
Licensing fees and consulting | 1,970 | 32,712 | 67,984 | 135,000 |
Revenues, affiliate | 233,390 | 99,103 | ||
Total revenues | 4,724,141 | 2,132,303 | 13,097,985 | 4,260,401 |
Cost of revenues | (6,504,086) | (1,567,031) | (12,610,685) | (3,079,442) |
Gross profit | (1,779,945) | 565,272 | 487,300 | 1,180,959 |
Operating expenses | ||||
Marketing, advertising and new business development | 66,453 | 143,083 | 162,617 | 170,104 |
Research and development | 201,608 | 257,658 | 535,299 | 735,883 |
Legal, accounting, consulting and public reporting | 617,510 | 287,959 | 1,807,338 | 930,784 |
General and administrative | 2,817,667 | 1,152,822 | 6,219,742 | 3,218,804 |
Share-based expense for stock options granted to officers, directors and employees | 1,435,811 | 179,018 | 1,661,846 | 14,689,497 |
Total operating expenses | 5,139,049 | 2,020,540 | 10,386,842 | 19,745,072 |
Loss from operations | (6,918,994) | (1,455,268) | (9,899,542) | (18,564,113) |
Other costs and expenses | ||||
Goodwill impairment charge | (4,731,729) | (4,731,729) | ||
Loss on extinguishment of debt | (91,444) | (1,423,329) | ||
Interest expense | (85,743) | (121,162) | (206,403) | (172,265) |
Amortization of debt discount | (643,375) | (939,229) | (1,191,375) | (1,867,830) |
Loss on asset retirement | (146,204) | (146,204) | ||
Loss on issuance of common stock | (466,744) | (466,744) | ||
Loss before provision for taxes on income | (12,617,489) | (2,982,403) | (17,598,582) | (21,070,952) |
Provision for taxes on income | ||||
Net Income (Loss) | (12,617,489) | (2,982,403) | (17,598,582) | (21,070,952) |
Loss attributable to non-controlling interests | 86,153 | 37,538 | 175,474 | 121,837 |
Net (Loss) attributable to common shareholders | $ (12,531,336) | $ (2,944,865) | $ (17,423,108) | $ (20,949,115) |
Basic loss per common share | $ (0.15) | $ (0.04) | $ (0.21) | $ (0.31) |
Basic and fully diluted weighted average number of shares outstanding | 84,996,288 | 70,818,495 | 81,142,222 | 66,626,106 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Accumulated Deficit [Member] | Non-Controlling Interest [Member] | Total |
Beginning balance at Dec. 31, 2017 | $ 2,200 | $ 21,186,888 | $ (15,269,845) | $ (50,153) | $ (5,869,090) |
Beginning balance, shares at Dec. 31, 2017 | 2,000 | 62,862,066 | |||
Options issued to officers, directors and employees | $ 5,324,754 | 5,324,754 | |||
Options issued to officers, directors and employees, shares | |||||
Shares issued - draws under our equity line of credit | $ 1,917,176 | 1,917,176 | |||
Shares issued - draws under our equity line of credit, shares | 1,285,762 | ||||
Sale of common stock | $ 76,798 | 76,798 | |||
Sale of common stock, shares | 65,440 | ||||
Shares issued as compensation to employees | $ 42,300 | 42,300 | |||
Shares issued as compensation to employees, shares | 32,994 | ||||
Shares and warrants issued for advisory board services | $ 56,043 | 56,043 | |||
Shares and warrants issued for advisory board services, shares | 30,400 | ||||
Shares issued for professional services | $ 65,885 | 65,885 | |||
Shares issued for professional services, shares | 60,000 | ||||
Net Loss attributable to common shareholders | (7,206,560) | (7,206,560) | |||
Non-Controlling Interests - Cannabinoid Research Development Limited | (43,097) | (43,097) | |||
Non-Controlling Interest - Prana Therapeutics, Inc. | (12,353) | (12,353) | |||
Ending balance at Mar. 31, 2018 | $ 2,200 | $ 28,669,844 | (22,476,405) | (105,603) | 6,090,036 |
Ending balance, shares at Mar. 31, 2018 | 2,000 | 64,336,662 | |||
Beginning balance at Dec. 31, 2017 | $ 2,200 | $ 21,186,888 | (15,269,845) | (50,153) | (5,869,090) |
Beginning balance, shares at Dec. 31, 2017 | 2,000 | 62,862,066 | |||
Net Loss attributable to common shareholders | (20,949,115) | ||||
Ending balance at Sep. 30, 2018 | $ 2,200 | $ 44,943,406 | (36,218,959) | (171,991) | 8,554,656 |
Ending balance, shares at Sep. 30, 2018 | 2,000 | 74,180,490 | |||
Beginning balance at Dec. 31, 2017 | $ 2,200 | $ 21,186,888 | (15,269,845) | (50,153) | (5,869,090) |
Beginning balance, shares at Dec. 31, 2017 | 2,000 | 62,862,066 | |||
Ending balance at Dec. 31, 2018 | $ 2,200 | $ 46,939,646 | (39,374,397) | (264,473) | 7,302,976 |
Ending balance, shares at Dec. 31, 2018 | 2,000 | 77,466,979 | |||
Beginning balance at Mar. 31, 2018 | $ 2,200 | $ 28,669,844 | (22,476,405) | (105,603) | 6,090,036 |
Beginning balance, shares at Mar. 31, 2018 | 2,000 | 64,336,662 | |||
Options issued to officers, directors and employees | $ 9,185,725 | 9,185,725 | |||
Options issued to officers, directors and employees, shares | |||||
Shares issued - draws under our equity line of credit | $ 1,572,818 | 1,572,818 | |||
Shares issued - draws under our equity line of credit, shares | 1,622,232 | ||||
Adjustment of the sale of common stock | $ (15,642) | (15,642) | |||
Adjustment of the sale of common stock, shares | |||||
Shares issued as compensation to employees | $ 145,000 | 145,000 | |||
Shares issued as compensation to employees, shares | 146,536 | ||||
Shares and warrants issued for advisory board services | $ 50,318 | 50,318 | |||
Shares and warrants issued for advisory board services, shares | 25,297 | ||||
Shares issued for professional services | $ 60,189 | 60,189 | |||
Shares issued for professional services, shares | 63,245 | ||||
Net Loss attributable to common shareholders | (10,797,690) | (10,797,690) | |||
Non-Controlling Interests - Cannabinoid Research Development Limited | (23,896) | (23,896) | |||
Non-Controlling Interest - Prana Therapeutics, Inc. | (4,953) | (4,953) | |||
Ending balance at Jun. 30, 2018 | $ 2,200 | $ 39,668,252 | (33,274,095) | (134,452) | 6,261,905 |
Ending balance, shares at Jun. 30, 2018 | 2,000 | 66,193,972 | |||
Options issued to officers, directors and employees | $ 179,018 | 179,018 | |||
Options issued to officers, directors and employees, shares | |||||
Shares issued - draws under our equity line of credit | $ 3,733,670 | 3,733,670 | |||
Shares issued - draws under our equity line of credit, shares | 5,747,717 | ||||
Sale of common stock | $ 75,999 | 75,999 | |||
Sale of common stock, shares | 127,359 | ||||
Shares issued as compensation to employees | $ 42,600 | 42,600 | |||
Shares issued as compensation to employees, shares | 79,508 | ||||
Shares and warrants issued for advisory board services | $ 49,002 | 49,002 | |||
Shares and warrants issued for advisory board services, shares | 40,052 | ||||
Shares issued for professional services | $ 53,164 | 53,164 | |||
Shares issued for professional services, shares | 80,000 | ||||
Shares issued upon conversion of notes payable | $ 1,141,701 | 1,141,701 | |||
Shares issued upon conversion of notes payable, shares | 1,911,882 | ||||
Net Loss attributable to common shareholders | (2,944,865) | (2,944,865) | |||
Non-Controlling Interests - Cannabinoid Research Development Limited | (30,776) | 30,776 | |||
Non-Controlling Interest - Prana Therapeutics, Inc. | (6,762) | 6,762 | |||
Ending balance at Sep. 30, 2018 | $ 2,200 | $ 44,943,406 | (36,218,959) | (171,991) | 8,554,656 |
Ending balance, shares at Sep. 30, 2018 | 2,000 | 74,180,490 | |||
Beginning balance at Dec. 31, 2018 | $ 2,200 | $ 46,939,646 | (39,374,397) | (264,473) | 7,302,976 |
Beginning balance, shares at Dec. 31, 2018 | 2,000 | 77,466,979 | |||
Options issued to officers, directors and employees | $ 101,788 | 101,788 | |||
Options issued to officers, directors and employees, shares | |||||
Cancellation of preferred stock | $ (550) | (550) | |||
Cancellation of preferred stock. shares | (500) | ||||
Issuance of preferred stock to directors | $ 1,650 | 1,650 | |||
Issuance of preferred stock to directors, shares | 1,500 | ||||
Sale of common stock | $ 23,530 | 23,530 | |||
Sale of common stock, shares | 52,288 | ||||
Shares and warrants issued for advisory board services | $ 34,751 | 34,751 | |||
Shares and warrants issued for advisory board services, shares | 57,179 | ||||
Shares issued for professional services | $ 45,010 | 45,010 | |||
Shares issued for professional services, shares | 105,000 | ||||
Net Loss attributable to common shareholders | (1,825,849) | (1,825,849) | |||
Non-Controlling Interests - Cannabinoid Research Development Limited | (38,544) | (38,544) | |||
Non-Controlling Interest - Prana Therapeutics, Inc. | (7,607) | (7,607) | |||
Ending balance at Mar. 31, 2019 | $ 3,300 | $ 47,144,725 | (41,200,246) | (310,624) | 5,637,155 |
Ending balance, shares at Mar. 31, 2019 | 3,000 | 77,681,446 | |||
Beginning balance at Dec. 31, 2018 | $ 2,200 | $ 46,939,646 | (39,374,397) | (264,473) | 7,302,976 |
Beginning balance, shares at Dec. 31, 2018 | 2,000 | 77,466,979 | |||
Net Loss attributable to common shareholders | (17,423,108) | ||||
Ending balance at Sep. 30, 2019 | $ 3,300 | $ 51,340,289 | (56,797,504) | (439,947) | (5,893,862) |
Ending balance, shares at Sep. 30, 2019 | 3,000 | 85,314,264 | |||
Beginning balance at Mar. 31, 2019 | $ 3,300 | $ 47,144,725 | (41,200,246) | (310,624) | 5,637,155 |
Beginning balance, shares at Mar. 31, 2019 | 3,000 | 77,681,446 | |||
Options issued to officers, directors and employees | $ 124,247 | 124,247 | |||
Options issued to officers, directors and employees, shares | |||||
Sale of common stock | $ 320,471 | 320,471 | |||
Sale of common stock, shares | 1,200,000 | ||||
Shares and warrants issued for advisory board services | $ 34,751 | 34,751 | |||
Shares and warrants issued for advisory board services, shares | 62,650 | ||||
Shares issued for professional services | $ 29,928 | 29,928 | |||
Shares issued for professional services, shares | 75,000 | ||||
Shares issued upon conversion of notes payable | $ 2,128,913 | 2,128,913 | |||
Shares issued upon conversion of notes payable, shares | 6,013,880 | ||||
Net Loss attributable to common shareholders | (3,065,922) | (3,065,923) | |||
Non-Controlling Interests - Cannabinoid Research Development Limited | (35,023) | (35,023) | |||
Non-Controlling Interest - Prana Therapeutics, Inc. | (8,146) | (8,146) | |||
Ending balance at Jun. 30, 2019 | $ 3,300 | $ 49,783,035 | (44,266,168) | (353,794) | 5,166,373 |
Ending balance, shares at Jun. 30, 2019 | 3,000 | 85,032,976 | |||
Options issued to officers, directors and employees | $ 1,435,811 | 1,435,811 | |||
Options issued to officers, directors and employees, shares | |||||
Shares issued as compensation to employees | $ 70,000 | 70,000 | |||
Shares issued as compensation to employees, shares | 200,000 | ||||
Shares and warrants issued for advisory board services | $ 28,751 | 28,751 | |||
Shares and warrants issued for advisory board services, shares | 36,288 | ||||
Shares issued for professional services | $ 22,692 | 22,692 | |||
Shares issued for professional services, shares | 45,000 | ||||
Net Loss attributable to common shareholders | (12,531,336) | (12,531,336) | |||
Non-Controlling Interests - Cannabinoid Research Development Limited | (74,421) | (74,421) | |||
Non-Controlling Interest - Prana Therapeutics, Inc. | (11,732) | (11,732) | |||
Ending balance at Sep. 30, 2019 | $ 3,300 | $ 51,340,289 | $ (56,797,504) | $ (439,947) | $ (5,893,862) |
Ending balance, shares at Sep. 30, 2019 | 3,000 | 85,314,264 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (17,598,582) | $ (21,070,952) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Amortization of debt discount | 1,191,375 | 22,042 |
Non-cash interest expense | 206,403 | |
Depreciation and amortization | 490,137 | 264,445 |
Share-based compensation | 1,927,729 | 15,238,156 |
Discount on issuance of shares of common stock | 1,867,830 | |
Loss on extinguishment of debt | 1,423,329 | 466,744 |
Goodwill impairment | 4,731,729 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 166,809 | (80,249) |
Due from related party | (47,795) | (103,402) |
Other current assets | 8,987 | (26,332) |
Inventory | 2,040,762 | (2,033,898) |
Accounts payable and accrued expenses, net | 354,830 | 326,610 |
Deposits and other assets | (286,172) | |
Deferred revenue | 447,400 | (135,000) |
Right of use assets | 7,832 | |
Net cash used in operating activities | (4,935,227) | (5,264,006) |
Investing activities: | ||
Payment of construction contracts | (888,686) | |
Purchase of equipment and improvements to cultivation and extraction facilities | (1,133,684) | (2,619,251) |
Purchase of intangible assets | (6,858) | (94,250) |
Deposits and return of deposit | (71,576) | |
Net cash provided by (used in) investing activities | (2,029,228) | (2,785,077) |
Financing activities: | ||
Proceeds from issuance of common stock - equity financing line | 5,390,049 | |
Proceeds from notes payable | 9,963,500 | 845,000 |
Payments on notes payable | (3,345,750) | |
Proceeds from sale of common shares | 344,000 | 118,583 |
Proceeds from proposed joint venture that was never formed | 650,000 | |
Proceeds (payments) for advances from officers and directors | (72,914) | 554,143 |
Payments on installment loans | (23,499) | (59,104) |
Net cash provided by (used in) financing activities | 6,865,337 | 7,498,671 |
Net increase (decrease) in cash | (99,118) | (550,412) |
Cash, beginning of period | 664,570 | 825,645 |
Cash, end of period | 565,452 | 275,233 |
Supplemental schedule of cash flow information: | ||
Cash paid for interest | ||
Cash paid for income taxes | ||
Supplemental disclosure of non-cash investing and financing activities: | ||
Establishment of operating lease right of use asset | 2,136,876 | |
Establishment of operating lease liability | (2,144,708) | |
Conversion of notes payable | $ (1,575,000) |
BUSINESS ORGANIZATION AND NATUR
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1 BUSINESS ORGANIZATION AND NATURE OF OPERATIONS United Cannabis Corporation ("we", "our", "us", "UCANN", or the Company) a Colorado corporation, was originally formed as a California corporation under the name MySkin, Inc. on November 15, 2007. MySkin was engaged in the business of providing management services to a medical spa in Los Angeles, California which provided various advanced skin care services until March 31, 2014, when this business was sold to the prior President of the Company. In early 2014 we decided to exit the medical spa management business and change our focus to providing products, services and intellectual property to the cannabis industry. On March 26, 2014, we entered into a License Agreement with Earnest Blackmon, Tony Verzura and Chad Ruby pursuant to which Messrs. Blackmon, Verzura and Ruby licensed certain intellectual property to us in exchange for a total of 38,690,000 shares of our common stock. In connection with this transaction: · Messrs. Blackmon, Verzura and Ruby licensed to us all of their knowledge and know-how relating to the design and buildout of cultivation facilities, growing/cultivation systems, seed-to-sale protocols and procedures, products, a genetic catalogue including over 150 different strains, an advanced cannabinoid therapy program called "A.C.T. Now", security, regulatory compliance, and other methods and processes which relate to the cannabis industry. · The territory for this license is the entire world and the license runs in perpetuity. There are no royalty payments under the License Agreement. · Messrs. Blackmon, Verzura and Ruby were appointed to our board of directors effective April 7, 2014. · Mr. Blackmon was elected as our President; Mr. Ruby was elected as Chief Operating Officer and Mr. Verzura was elected as Vice President. · A total of 41,690,000 previously outstanding shares of common stock were cancelled resulting in a total of 43,620,000 shares of common stock outstanding on March 26, 2014. UCANN was formed as a Colorado corporation on March 25, 2014, and on May 2, 2014, MySkin, Inc. merged into UCANN, a wholly-owned subsidiary of MySkin, Inc., for the purpose of changing domicile from California to Colorado and changing the corporation's name to United Cannabis Corporation. On March 31, 2014, we sold all right, title and interest in the tangible and intangible assets, trademarks, customer lists, intellectual property and rights, which we owned and were related to our advanced skin care business since we entered into a new business and no longer had any use for these assets. The assets were sold to MySkin Services, Inc. (MTA), a business partly owned by Marichelle Stoppenhagen, our former officer and director, in exchange for the $15,000 payable which we owed to Ms. Stoppenhagen and/or MTA. In addition, MTA assumed all costs associated with these assets starting on March 31, 2014. On July 14, 2017, we completed the acquisition of Prana Therapeutics, Inc. (Prana) in a one-for-one exchange of 5,730,000 shares of our common stock for 5,730,000 shares of the common stock of Prana. The purchase price had a fair market value of $5,070,500, based upon the closing price of $0.85 per share on the OTC QB exchange on July 14, 2017, including the cost to purchase 400,000 shares of Prana common stock for $200,000. Prana is a polymolecular botanical drug development company focused on developing targeted therapeutics for prevention of the negative side effects of chemotherapy, management of rheumatoid arthritis and treatment of brain cancer. Management elected to purchase Prana, because of the successful indication of the effectiveness of its Epidiferphane chemical formulation in the treatment of (i) the negative side effects of chemotherapy, (ii) inflammation and pain associated with arthritis and back-centric pain, and (iii) the potential shrinkage of brain tumors. Our main line of business is the operation of state-of-the-art extraction facilities where we convert components of industrial hemp flower into finished CBD products. Substantially all of our revenues are derived from the sale of CBD products to our customers. We purchase industrial hemp flower from independent third-party farmers located throughout the continental United States. Government Regulation On December 12, 2018, Congress passed the 2018 Farm Bill, which was signed into law by President Trump the following week. The bill includes the following important provisions: · The 2018 Farm Bill defines hemp as the plant Cannabis sativa L and any part of the plant with a delta-9 THC concentration of not more than 0.3 percent by dry weight. This definition is consistent with the definition of “ ” · The 2018 Farm Bill removes hemp from the Controlled Substances Act, paving the way for the wholly legal cultivation, possession, sale and distribution of the hemp plant. · The 2018 Farm Bill delegates to states and Indian tribes the broad authority to regulate and limit the production and sale of hemp and hemp products within their borders. States and Indian tribes cannot, however, limit the transportation or shipment of hemp and hemp products through their respective jurisdictions. The Company does not grow, distribute, sell or knowingly purchase any marijuana plants or products. All of the Companys revenues are derived from the sale of legal CBD products that were extracted from industrial hemp plants or from licensing fees for the use of our patented product formulations. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation At July 1, 2019, we concluded that we had established a variable interest entity relationship with TEL, because we are the primary beneficiary, in accordance with U.S. GAAP. As a result, we elected to consolidate TEL beginning July1, 2019. At March 31, 2017, we concluded that we had established a variable interest entity relationship with CRD, because we are the primary beneficiary, in accordance with U.S. GAAP. As a result, we elected to consolidate CRD beginning March 31, 2017. In the opinion of our management, these unaudited consolidated financial statements reflect all adjustments, all of which are of a normal recurring nature, necessary to present fairly our consolidated financial position at September 30, 2019, the consolidated results of operations for the three and nine months ended September 30, 2019 and 2018, the consolidated statements of cash flows for the nine months ended September 30, 2019 and 2018 and the consolidated statements of stockholders’ equity for the nine months ended September 30, 2019 and 2018. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the entire fiscal year. Use of Estimates We make our estimate of the ultimate outcome for these items based on historical trends and other information available when our consolidated financial statements are prepared. We recognize changes in estimates in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Our actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term. Fair Value of Financial Instruments Level 1 Level 2 Level 3 The carrying amount of our cash and cash equivalents, accounts receivable, accounts payable, and other current assets and liabilities in our consolidated financial statements approximates fair value because of the short-term nature of the instruments. Investments in non-marketable equity securities are carried at cost less other-than-temporary impairments. The carrying amount of our notes payable and convertible debt at September 30, 2019, approximates their fair values based on our incremental borrowing rates. There have been no changes in Level 1, Level 2, and Level 3 categorizations and no changes in valuation techniques for these assets or liabilities for the nine months ended September 30, 2019 and 2018. Cash and Cash Equivalents Accounts Receivable, Net Inventory Property, Plant and Equipment, net Operating Lease Right of Use Asset and Liability - Granted Patents, Net Intangible Assets Long-Lived Assets Impairment Assessment As discussed below, we recorded an impairment charge related to the goodwill resulting from our purchase of Prana Therapeutics, Inc in the amount of $4,731,729 and $0 in the three and nine months ended September 30, 2019 and the year ended December 31, 2018, respectively. Goodwill Our goodwill consists of the following: September 30, December 31, Prana Therapeutics, Inc. $ — $ 4,731,729 Cannabinoid Research Development Company Limited 106,874 106,874 $ 106,874 $ 4,838,603 Our goodwill, which consists of our interest in a ninety-five percent owned subsidiary, Prana Therapeutics, Inc. (PTI) and a fifty percent owned subsidiary, Cannabinoid Research Development Company Limited (CRD), is not amortized, but is evaluated for impairment annually, or when indicators of a potential impairment are present. We test goodwill for impairment annually or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, rather than amortize. Goodwill impairment tests consist of a comparison of each reporting units fair value with its carrying value. Impairment exists when the carrying amount of goodwill exceeds the implied fair value for each reporting unit. To estimate the fair value, management used valuation techniques which included the discounted value of estimated future cash flows. The evaluation of impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and are subject to change as future events and circumstances change. Actual results may differ from assumed and estimated amounts. Management determined that an impairment write-down was required as of September 30, 2019. Thus, we recorded an impairment on our acquisition of Prana Therapeutics, Inc. in the amount of $4,019,229 in the three months ended September 30, 2019. Advance Receipts and Deferred Revenue Revenue Recognition Revenue from Contracts with Customers Revenue Recognition Affiliate Prana Prana Prana Prana Prana Revenue from Contracts with Customers. We have licensed Prana Hemp Prana Hemp Prana Hemp Prana Hemp Prana Hemp Revenue from Contracts with Customers. Cost of Revenues Research and Development Expenses General and Administrative Expenses Share-Based Compensation We account for stock option grants issued and vesting to employees based on ASC 718, Compensation Stock Compensation Income Taxes We follow the provisions of ASC 740, Income Taxes When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in our consolidated financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits, if any, are classified as interest expense and penalties and are included in selling, general and administrative expenses in our consolidated statements of operations. On December 22, 2017, the U.S. Tax Cuts and Jobs Act was enacted. U.S. tax reform introduced many changes, including lowering the U.S. corporate tax rate to 21 percent, changes in incentives, provisions to prevent U.S. base erosion and significant changes in the taxation of international income, including provisions which allow for the repatriation of foreign earnings without U.S. tax. The enactment of U.S. tax reform had no impact on our income taxes for the nine months ended September 30, 2019 or 2018, respectively. Commitments and Contingencies Certain conditions may exist as of the date our consolidated financial statements are issued, which may result in a loss but which will only be resolved when one or more future events occur or fail to occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of the legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. Net Loss Per Share Earnings per Share Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive. Nine Months Ended September 30, 2019 2018 Warrants to purchase common stock 1,384,039 1,284,031 Stock options 28,828,300 25,080,000 30,212,339 26,364,031 Other Comprehensive Income (Loss) Concentration of Credit Risk Recently Issued Accounting Pronouncements Reclassification |
GOING CONCERN
GOING CONCERN | 9 Months Ended |
Sep. 30, 2019 | |
GOING CONCERN [Abstract] | |
GOING CONCERN | NOTE 3 GOING CONCERN Our consolidated financial statements have been prepared on a going concern basis which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. During the nine months ended September 30, 2019, we incurred losses of $17,598,582, used cash of $4,935,227 in our operating activities, had a working capital deficit of $12,131,682 and had an accumulated deficit of $56,797,504 at September 30, 2019. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and, or, obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. There is no assurance that these events will be satisfactorily completed. |
DUE FROM RELATED PARTIES
DUE FROM RELATED PARTIES | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
DUE FROM RELATED PARTIES | NOTE 4 DUE FROM RELATED PARTIES Under the terms of a sales agreement with NutriMed, LLC and a licensing agreement with Advesa, Inc., we completed sales to related parties in the aggregate amount of $233,390 and $103,402 for the nine months ended September 30, 2019 and 2018, respectively. None of the sales to related parties for the nine months ended September 30, 2019 were from royalties. Amounts due (to) from related parties include the following: September 30, 2019 December 31, 2018 Advesa, Inc. $ (17,735 ) $ 42,349 NutriMed, LLC 152,501 44,622 $ 134,766 $ 86,971 In the normal course of business, we make non-interest-bearing advances to Advesa, Inc. (Advesa), which is controlled by one of our officers and directors, and we receive licensing fees from the sale of products licensed to Advesa by the Company. In the normal course of business, we sell products to NutriMed, LLC, which is controlled by two of our officers and directors. The products that we sell to NutriMed, LLC are at a price equivalent to the whole sale price that we charge to unrelated, third party distributors. |
OPERATING LEASES
OPERATING LEASES | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
OPERATING LEASES | NOTE 5 OPERATING LEASES Administrative Offices and Hemp Laboratory Golden, Colorado Effective August 1, 2017, we entered into a triple net lease of approximately 9,882 square feet of commercial space in Golden, Colorado in which our administrative offices and hemp laboratory are located. The term of the lease expires on July 31, 2020 and has no option for renewal. Basic rent is $3,302, $3,500 and $3,800 per month through, July 31, 2018, 2019 and 2020, respectively, plus we are responsible for all utilities. Extraction and Cultivation Facility Fort Morgan, Colorado Effective October 1, 2017, we entered into a triple net lease of approximately 40,000 square feet of industrial space located on five (5) acres of land in Weldona, Colorado that we us as our hemp extraction facility and hemp cultivation center. The term of the lease expires on September 30, 2019, with an annual option to renew the lease on an annual basis. A one-year renewal was accepted. The rent is $7,500 per month throughout the term of the lease, plus we are responsible for all utilities. The lease was extended on a month-to-month basis until October 30, 2019 at which time we vacated the building and moved all the extraction equipment to our Mead extraction facility. Extraction Facility Mead, Colorado Effective August 15, 2018, we entered into a triple net lease of approximately 14,300 square feet of industrial space in located in Mead, Colorado that, upon completion tenant modification and installation of extraction equipment, we will use the facility as our main extraction facility in Colorado. The initial term of the lease expires on August 31, 2019, with an annual option to renew the lease for an additional three-year period, on an annual basis. We have made a $75,000 security deposit with the landlord in connection with the lease. The monthly lease amount for the initial lease period is $12,596 per month and will increase annually by 3.0% or accordance with a consumer price index calculation, whichever is greater. Extraction Facility McMinnville, Tennessee Effective June 1, 2019, we entered into a triple net lease of approximately 10,000 square feet of commercial space located in McMinnville, Tennessee that we use as an extraction facility. The term of the lease expires on May 31, 2022 with the option to holdover the lease month-to-month at the end of the initial term. The basic rent is $10,000 per month for the entire term of the lease, plus we are responsible for all utilities and services. Staging Facility - Brighton, Colorado Effective September 1, 2019, we entered into a triple net lease of approximately 21,390 square feet of commercial space located in Brighton, Colorado that we use as our staging facility. The term of the lease expires on August 31,2024, with no option to renew beyond the initial term. The basic rent is $22,727, $23,409, $24,111, $24,823 and $25,579 per month through August 31, 2020, 2021, 2022, 2023 and 2024, respectively, plus we are responsible for all utilities. Testing Lab Golden, Colorado Effective November 1, 2018, we entered into a triple net lease of approximately 2,100 square feet of commercial space located in Golden, Colorado that we use as our testing laboratory. The term of the lease expires on October 31, 2020, with an option to renew for an additional two-year term exercisable prior to 90 days before the end of the initial term. The basic rent is $2,161 and $2,226 per month through October 31, 2019 and 2020, respectively, plus we are responsible for all utilities. Production Lab Golden Colorado On April 23, 2019, we entered into a triple net lease of approximately 3,098 square feet of commercial space located in Golden, Colorado that we use as a production facility. The term of the lease expires on April 30, 2022, with no option to renew. The basic rent is $2,788, 2,870 and $2,959 per month through April 30, 2020, 2021 and 2020, respectively, plus we are responsible for all utilities Extraction and Cultivation Facility - Jamaica Our fifty percent (50%) owned subsidiary Cannabinoid Research Development Company Limited (CRD) leases approximately 28 acres of land upon which their cultivation and extraction facility is located near Kingston, Jamaica. The land is leased for $1 per year from the father of one of the directors and members of CRD. Future minimum payments for these leases are: For the twelve Months Ending September 30, 2020 2021 2022 2023 2024 $662,970 $605,626 $464,171 $300,992 $204,635 |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 6 INVENTORY At September 30, 2019 and December 31, 2018, our inventory was, as follows: September 30, 2019 December 31, 2018 Raw materials $ 131,030 $ 1,813,880 Work-in-process 319,576 666,845 Finished products 60,750 71,393 $ 511,356 $ 2,552,118 |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment, Net [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 7 PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net of accumulated depreciation and amortization, at September 30, 2019 and December 31, 2018 is, as follows: September 30, 2019 December 31, 2018 Cost of construction in process - extraction facility Tennessee extraction facility Equipment $ $ Mead, Colorado extraction facility Equipment and leasehold improvements $ $ 1,743,223 Jamaica cultivation and extraction facility: Leasehold improvements - laboratory 75,000 75,000 Leasehold improvements - cultivation 110,699 118,964 $ 185,699 $ 1,937,187 September 30, 2019 December 31, 2018 Extraction facility, laboratory equipment, and office furniture and fixtures Mead, Colorado extraction facility Equipment and machinery $ 2,678,696 $ 1,269,734 Furniture and fixtures 64,955 64,955 Leasehold improvements 1,341,553 237,581 Transportation equipment 169,370 60,228 Farm Equipment 531,245 531,245 Golden, Colorado administrative offices and laboratories Furniture and fixtures 64,350 49,282 Transportation equipment 215,672 200,704 Golden, Colorado industrial hemp laboratory - equipment 306,935 39,944 Leasehold improvements 83,379 Remote laboratory equipment 99,220 99,220 McMinnville, Tennessee extraction facility Equipment 159,912 Furniture and fixtures 6,713 5,521,745 2,552,893 Accumulated amortization and depreciation (917,948 ) (433,148 ) $ 4,603,797 $ 2,119,745 The amount of depreciation and amortization expense for the nine months ended September 30, 2019 and 2018 is $484,800 |
GRANTED PATENT
GRANTED PATENT | 9 Months Ended |
Sep. 30, 2019 | |
Granted Patent [Abstract] | |
GRANTED PATENT | NOTE 8 GRANTED PATENT On August 15, 2017, the United States Patent and Trademark Office issued to the Company US Patent #9730911 (the Patent) granting exclusive rights to its proprietary formulations based on compounds extracted from cannabis plant materials; more specifically the composition of matter pertaining to the use of phytocannabinoids, cannabinoids, and specific terpene profiles in liquid form. This composition of matter Patent provides protection for our proprietary formulations. The Patent protects the use of suspending both phytocannabinoids and cannabinoids with specific combinations of cannabis derived terpenes in liquid forms with an array of delivery methods including capsule, sublingual, topical, oral, suppository, and vaporization. Cannabinoids referenced in the application include ratios of tetrahydrocannabinolic acid (THCa), cannabidiolic acid (CBDa), tetrahydrocannabinol (THC), cannabinol (CBN), cannabidiol (CBD), cannabichromenic acid (CBCa), and cannabichromene (CBC). At August 15, 2017, we classified the costs associated with research, legal fees, application costs incurred in the process of being granted the Patent on our consolidated balance sheet in the amount of $142,317, and we began amortizing such cost of the Patent on a straight-line basis over a 15-year period. Amortization expense of the Patent is $5,337 and $5,337 for the nine months ended September 30, 2019 and 2018, respectively, and accumulated amortization is $15,132 and $9,795 at September 30, 2019 and December 31, 2018, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 9 INTANGIBLE ASSETS Our intangible assets are comprised of the costs incurred in pursuing provisional patent applications and applications for design mark and trademarks, which have presently not been approved or issued. The costs associated with our intangible assets are amortized on a straight-line basis over estimated useful lives of 15 years for patents and 10 years for design marks and trademarks, once the applications are approved. Costs associated with applications that are not approved will be expensed in the period that the application is rejected or abandoned. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 10 ACCOUNTS PAYABLE AND ACCRUED EXPENSES Our accounts payable and accrued expenses consist of: September 30, 2019 December 31, 2018 Trade accounts payable $ 1,490,458 $ 1,163,399 Accrued wages and related expenses 160,396 126,345 Accrued interest expense 74,503 2,572 Other accrued expenses 10,186 Total accrued expenses $ 1,725,357 $ 1,302,502 |
INSTALLMENT LOANS PAYABLE
INSTALLMENT LOANS PAYABLE | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
INSTALLMENT LOANS PAYABLE | NOTE 11 INSTALLMENT LOANS PAYABLE September 30, 2019 December 31, 2018 Installment Loans Payable $ 117,981 $ 57,799 Installment loans payable consist of two installment loans for the purchase of equipment used for Company purposes; the loans are 36 and 72 months in length, respectively. The outstanding balance on the 36-month installment loan was $38,361 and $57,799 at September 30, 2019 and December 31, 2018, respectively. The outstanding balance on the 72-month installment loan was $79,620 and $0 at September 30, 2019 and December 31, 2018, respectively. The terms of the 36-month installment loan specify monthly payments of $2,160. The terms of the 72-month installment loan specify monthly payments of $1,354. |
ADVANCE RECEIPTS AND DEFERRED R
ADVANCE RECEIPTS AND DEFERRED REVENUE | 9 Months Ended |
Sep. 30, 2019 | |
Deferred Revenue Disclosure [Abstract] | |
ADVANCE RECEIPTS AND DEFERRED REVENUE | NOTE 12 ADVANCE RECEIPTS AND DEFERRED REVENUE Our advance receipts and deferred revenue consist of: September 30, 2019 December 31, 2018 Deferred revenue WeedMD $ $ 23,750 Advance receipts Sale of Finished Products 471,150 $ 471,150 $ 23,750 On June 9, 2014, we received 1,187,500 common shares and 3,000,000 warrants to purchase common shares of WMD in exchange for future consulting services and use of our intellectual property. We recorded the $893,750 fair value of these securities as deferred revenue and we recognized $150,000 of this amount as revenue during the period July 1, 2014 through December 31, 2014, based upon our initial three-year estimate of the service period involved. We delivered the consulting services and use of our intellectual property to WMD on a relatively consistent monthly basis during the four-year period January 1, 2015 through December 31, 2018. Accordingly, we recognized $15,000 of deferred revenue per month during that period. We recognized $23,750 and $90,000 of revenue applicable to this arrangement in the nine months ended September 30, 2019 and 2018, respectively. Payments received in advance of the delivery of finished products purchased by customers are recognized as advanced receipts. As of September 30, 2019, and December 31, 2018, we had $471,150 and $0, respectively, of payments received from customers prior to the delivery of the respective finished products. Delivery of the finished products was completed in early October 2019. |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2019 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | NOTE 13 NOTES PAYABLE On February 11, 2019 and June 7, 2019, we issued notes to an unaffiliated third party (Holder), in the amount of $1,575,000 and $10,000,000, respectively (the Notes). The terms of the Notes allow us to draw down on the Notes in tranches, upon our election. The proceeds of the Notes were used to purchase equipment and for general working capital purposes. The debt discount on the Notes are amortized on a straight-line basis from the issue date, which approximates the effective interest rate method, over the term of the note, and this amortization is included in interest expense in our consolidated statements of operations. The Company may pay the Notes at any time prior to the maturity date, with the Holders consent. Until the 60th day after the date of each funding, the Company may pay the principal of the Notes, plus a premium of 10%, in addition to outstanding interest, without the Holders consent. From the 61st day after the date of each funding to the 120th date after the date of each funding, the Company may pay the principal of the Notes, plus a premium of 20%, in addition to outstanding interest, without the Holders consent. From the 121st day after the date of each funding to the 180th day after the date of each funding, the Company may pay the principal of the Notes, plus a premium of 30%, in addition to outstanding interest, without the Holders consent. After the Maturity Date, the Notes may only be paid with the Holders consent. The Holder is entitled, at its option, at any time after a default under the term of the Notes, to convert all or any part of the unpaid principal into shares of the Companys common stock at a price per share equal to 70% of the average of the two lowest trading prices of the Companys common stock during the 15 consecutive trading days ending on the latest complete trading day prior to the conversion date. On August 6, 2019 we issued a note to an unaffiliated third party in the amount of $498,750. The proceeds of the Notes were used to purchase industrial hemp biomass. The debt discount on the note is amortized on a straight-line basis from the issue date, which approximates the effective interest rate method, over the 90-day term of the note, and this amortization is included in Amortization of debt discount in our consolidated statements of operations. On November 4, 2019, the note was extended for 90 days, and the original issue discount was increased by $89,775. The loan is now due on February 2, 2020 in the total amount of $588,525. On August 8, 2019 we issued a note to an unaffiliated third party in the amount of $1,300,000. The proceeds of the Notes were used to purchase industrial hemp biomass. The note stipulates the payment of $100,000 every 30 days during the time that the note is outstanding The debt discount on the note is amortized on a straight-line basis from the issue date, which approximates the effective interest rate method, over the 90-day term of the note, and this amortization is included in Amortization of debt discount in our consolidated statements of operations. The note is secured by 35,000 pounds of industrial hemp biomass. On November 8, 2019, the note was extended for 30 day, with the holders option to renew the note for 5 (five) additional 30-day periods, and our commitment to pay $50,000 recognized as original issue discounts on approximately a two-week schedule, beginning November 22, 2019. The note may not be repaid without the holders permission until May 8, 2020. On August 12, 2019 we issued a note to an unaffiliated third party in the amount of $781,250. The proceeds of the notes were used to purchase industrial hemp biomass. The debt discount on the note is amortized on a straight-line basis from the issue date, which approximates the effective interest rate method, over the 90-day term of the note, and this amortization is included in Amortization of debt discount in our consolidated statements of operations. The note is collateralized by 50,000 pounds of industrial hemp biomass. Upon the commitment of the Company to pay $390,625 on or before November 19, 2019, the $781,250 note was extended on November 8, 2019 in the amount of $390,625. On August 12, 2019 we issued a note to an unaffiliated third party in the amount of $125,000. The proceeds of the note were used to purchase industrial hemp biomass. The debt discount on the note is amortized on a straight-line basis from the issue date, which approximates the effective interest rate method, over the 90-day term of the note, and this amortization is included in Amortization of debt discount in our consolidated statements of operations. The note is collateralized by 3,500 pounds of industrial hemp biomass, respectively. On November 12, 2019, the note was extended for 90 days, and the original issue discount was increased by $22,500. The loan is now due on February 2, 2020 in the total amount of $147,500. The following table summarizes our notes outstanding as of September 30, 2019 and December 31, 2018: Issue Date Security Maturity Date Interest Rate Draws Under the Note September 30, 2019 December 31, 2018 Note Dated November 7, 2018: 11/05/2018 Unsecured 5/04/2019 5% First Tranche $ $ 525,000 12/05/2018 Unsecured 6/03/2019 5% Second Tranche 525,000 12/26/2018 Unsecured 6/24/2019 5% Third Tranche 525,000 Note Dated February 11, 2019: 2/11/2019 Unsecured 8/10/2019 5% First Tranche 4/08/2019 Unsecured 10/06/2019 5% Second Tranche 650,000 Note Dated June 7, 2019: 6/07/19 Unsecured 12/04/19 5% First Trance 2,625,000 6/21/19 Unsecured 12/18/19 5% Second Tranche 1,050,000 7/11/19 Unsecured 1/07/20 5% Third Tranche 1,050,000 7/19/19 Unsecured 1/15/20 5% Fourth Tranche 525,000 9/19/19 Unsecured 3/17/20 5% Fifth Tranche 525,000 Note Dated August 6, 2019: 8/06/19 Secured 11/04/19 498,750 Note Dated August 8, 2019: 8/08/19 Secured 11/06/19 1,200,000 Notes Dated August 12, 2019: 8/12/19 Secured 11/10/19 781,250 8/12/19 Secured 11/10/19 125,000 Less unamortized discount (375,542 ) (62,917 ) $ 8,654,458 $ 1,512,083 During the nine months ended September 30, 2019 and 2018, we recognized $1,191,375 and $22,042 of amortization of debt discounts, respectively. Additionally, we recognized $119,845 and $172,265 of interest expense on notes payable during the nine months ended September 30, 2019 and 2018, respectively. As of September 30, 2019, and December 31, 2018, $73,504 and $2,572, respectively, of this interest is carried as accrued expenses on our consolidated balance sheets. We converted the first and third tranches of the note dated November 7, 2018, each in the amount of $525,000, on May 5, 2019, and June 25, 2019, respectively, and recognized an aggregate loss of $2,128,913 and issued 6,030,880 shares of our common stock to the Holder in connection with the conversions. We repaid the second tranche on May 8, 2019. We repaid the first tranche of the note dated February 11, 2019 on May 10, 2019 and we converted the second tranche on October 6, 2019 On October 11, 2019, we drew down the sixth tranche of the note dated June 7, 2019 in the amount of $200,000. |
NOTES PAYABLE TO OFFICERS AND D
NOTES PAYABLE TO OFFICERS AND DIRECTORS | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE TO OFFICERS AND DIRECTORS | NOTE 14 NOTES PAYABLE TO OFFICERS AND DIRECTORS Notes payable to officers and directors are due on demand and consisted of the following at September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Note payable to Earnie Blackmon, an officer and director $ 834,492 $ 840,807 Note payable to Tony Verzura, a former officer and former director 179,234 160,247 Note payable to Chad Ruby, an office and director 167,237 154,382 $ 1,180,963 $ 1,155,436 On April 6, 2016, we borrowed $25,000 from Ernest Blackmon and $25,000 from Tony Verzura and used the proceeds to repay principal and interest applicable on our $102,000 convertible promissory note dated October 12, 2015, to JSJ Investments Inc. The loans, together with interest at 12% per year, are payable on December 30, 2016. We may prepay the loans at any time. Historically, Messrs. Blackmon, Verzura and Ruby, who are officers and directors of the Company, have paid obligations and expenses on behalf of the Company from their own individual, personal funds. Such payments have been recorded in the consolidated balance sheets as a component of Notes Payable to Officers and Directors and bear interest at 12.5% to 15% per annum. On July 1, 2018, we elected to convert all accrued and unpaid wages owed to Messrs. Blackmon, Verzura, and Ruby in the aggregate amount of $310,408 as notes payable to them. Thus, $310,408 is classified as Notes payable to officers and directors on the consolidated balance sheet of the Company at September 30, 2019 and December 31, 2018. Interest on the notes is at a rate of 15% for the principal amount due Mr. Blackmon, and at a rate of 12.5% for on the principal amount owed Messrs. Verzura and Ruby. During the nine months ended September 30, 2019 and 2018, we recognized $99,541 and $57,305, respectively, of interest expense on notes payable to officers and directors. As of September 30, 2019, and December 31, 2018, $208,737 and $109,266, respectively, of accrued interest payable applicable to the notes is included in Notes payable to officers and directors on our consolidated balance sheets. Effective March 21, 2019, Tony Verzura resigned as an officer and director of the Company. |
ARBITRATION AND LITIGATION RESE
ARBITRATION AND LITIGATION RESERVE | 9 Months Ended |
Sep. 30, 2019 | |
Loss Contingency [Abstract] | |
ARBITRATION AND LITIGATION RESERVE | NOTE 15 ARBITRATION AND LITIGATION RESERVE On May 8, 2018, H2, LLC (H2) and the Company executed a letter of intent formalizing their intent to enter into a joint venture. The parties subsequently made monetary advances in anticipation of formalizing the joint venture through a definitive agreement. However, the joint venture was never formalized, and the letter of intent was terminated pursuant to its terms. Under the terms of the provisions in the letter of intent that survived its termination, the Company has the option to either provide H2 with 25% of the industrial hemp seeds purchased with $650,000 advanced by H2, or to refund the $650,000 advanced by H2. Pursuant to another provision in the letter of intent that survived termination, disputes are to be resolved via arbitration in Denver, Colorado. On August 10, 2018, H2 filed a lawsuit in the state of California naming the Company, as well as, naming Earnest Blackmon, our Chairman of the Board and Chief Executive Officer, and John Walsh, our Treasurer and Principal Accounting Officer. The lawsuit asserts various claims, including rescission of any purported contract or joint venture and asks for $16,500,000 in damages. Our counsel and Management believe the suit is without merit, and we will vigorously defend against the lawsuit. We filed with the court a motion to compel arbitration and stay the litigation against Mr. Blackmon and Mr. Walsh. On December 20, 2018, the court granted our motion and ordered H2 to arbitrate its dispute with the Company in Denver, Colorado, and stayed the litigation against Mr. Blackmon and Mr. Walsh pending the arbitration. The Company and H2 are currently in discussions regarding resolution of the dispute either via arbitration or by agreement. An arbitration hearing has been set to for March 2020. On July 30, 2018, the Company filed a complaint for patent infringement and a demand for jury trial against Pure Hemp Collective Inc. (Pure Hemp) in the United States District Court for the District of Colorado. The Company contends that Pure Hemp has willfully and directly infringed the Companys 9730911 Patent and seeks damages from Pure Hemp, among other relief. On October 29, 2018, Pure Hemp filed its answer, defenses and counterclaims, in which Pure Hemp contends the 9730911 Patent is not infringed by Pure Hemp and is invalid and unenforceable. Pure Hemp has also asserted a counterclaim under the Sherman Act against the Company in which it alleges the lawsuit is objectively baseless and requests the court enter an order awarding it its costs and attorneys fees as well as treble damages. The Company believes the Sherman Act counterclaim has no merit, and it is impossible to quantify the amount of any alleged damages allegedly suffered by Pure Hemp, or what its costs and fees in this case will be. On April 17, 2019, the Court entered an Order denying in its entirety Pure Hemps Early Motion for Partial Summary Judgment. In its motion, Pure Hemp had argued that the formulations claimed by the Company in the 9730911 Patent are non-patentable natural phenomena. In its Order, the Court disagreed with Pure Hemp and held that the concentrations of cannabinoids and related chemicals covered by the Patent are not natural phenomena and are patentable. Thus, the case continues in the United States District Court for the District of Colorado. On July 16, 2019, the Yocam Family Limited Partnership LLLP (Yocam) filed a complaint for breach of contract, unjust enrichment, and promissory estoppel against the Company in the Weld County District Court in connection with a hemp farming project. Yocam seeks an award of damages in the amount of $546,968, along with fees and costs incurred in connection with the lawsuit. The Company believes the claims and damages asserted have no merit. On September 3, 2019, the Company filed its Amended Answer and Counterclaims against Yocam for replevin, civil theft and unjust enrichment related to Yocams retention of certain farming equipment used on the project and retained illegally by Yocam. A trial by jury has been set for July13, 2020. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 16 STOCKHOLDERS EQUITY Preferred Stock On July 18, 2017, the Board of Directors adopted a resolution creating a series of Preferred Shares, no par value per share, designated as the Series A Preferred Shares. We subsequently issued 2,000 shares of our Series A Preferred Shares for $2,200 to our officers and directors. On March 20, 2019, we issued 2,000 additional shares of our Series A Preferred Shares to two officers and directors. Each preferred share is entitled to 15,000 votes on all matters submitted to the vote of our shareholders, is entitled to an annual dividend of $0.05 per share when, as, and if declared by our directors, and is convertible at any time, at the option of the holder of the preferred shares, into one share of our common stock. The Series A Preferred Shares do not have any intrinsic a value in that they have only have voting rights and not a value on a price per share basis. Mr. Verzura returned his 500 shares of Series A Preferred Shares to the Company upon his resignation as a director and officer of the Company on March 21, 2019. We subsequently cancelled Mr. Verzuras 500 shares of Series A Preferred Shares effective March 21, 2019. Authorized Common Shares At a meeting of the shareholders of the Company on May 15, 2019, the authorized shares of common stock of the Company were increased from 100,000,000 shares to 200,000,000 shares. Equity offerings February 14, 2018, we sold 65,440 shares of our common stock to an accredited investor for $57,083. Such shares were valued at $76,798 based on the previous trading days closing price. The difference between the proceeds received of $57,083 and the value of our common stock of $76,798 was recorded as a loss on the issuance of common stock. August 20, 2018, we sold 27,359 shares of our common stock to an accredited investor for $10,000. Such shares were valued at $13,249 based on the previous trading days closing price. The difference between the proceeds received of $10,000 and the value of our common stock of $13,249 was recorded as a loss on the issuance of common stock. August 31, 2018, we sold 100,000 shares of our common stock to an accredited investor for $51,500. Such shares were valued at $62,750 based on the previous trading days closing price. The difference between the proceeds received of $51,500 and the value of our common stock of $62,750 was recorded as a loss on the issuance of common stock. March 11, 2019, we sold 52,288 shares of our common stock to an accredited investor for $20,000. May 8, 2019, we sold 500,000 shares of our common stock to an accredited investor for $135,000. May 14, 2019, we sold 600,000 shares of our common stock to accredited investors for $162,000. June 11, 2019, we sold 100,000 shares of our common stock to an accredited investor for $27,000. Common Stock Issued for Services On December 31, 2018, we issued 251,497 shares of common stock valued at $75,700, based on the previous trading days closing price, as annual incentive bonuses for certain employees. We recorded the $75,700 value of the common stock as share-based compensation expense and included this in general and administrative expenses in our consolidated statements of operations. At various times throughout the year ended December 31, 2018, we issued 50,000 shares of our common stock valued at $36,156 for marketing services, and we recorded the value of the shares as share-based compensation and recorded this in marketing, advertising and new business development expenses in our consolidated statements of operations. At various times throughout the year ended December 31, 2018, we issued 310,000 shares of our common stock valued at $223,996 for legal services, and we recorded the value of the shares as share-based compensation and in legal, accounting, consulting and public reporting in our consolidated statements of operations. At various times throughout the year ended December 31, 2018, we issued 363,163 shares of our common stock valued at $297,400 as compensation to employees, and we recorded the value of the shares as share-based compensation, which we recorded in general and administrative expenses in our consolidated statements of operations. On December 31, 2018, we issued 147,227 shares of common stock valued at $96,000, based on the applicable previous trading days closing price, as a component of employee compensation. We recorded the $96,000 value of the common stock as share-based compensation expense and included this in general and administrative expenses in our consolidated statements of operations. During the nine months ended September 30, 2019, we issued 75,000 shares of our common stock valued at $52,621 for marketing services, and we recorded the value of the shares as share-based compensation and recorded this in marketing, advertising and new business development expenses in our consolidated statements of operations. During the nine months ended September 30, 2019, we issued 60,000 shares of our common stock valued at $24,339 for research and development consulting services, and we recorded the value of the shares as share-based compensation and recorded this in Research and development expenses in our consolidated statements of operations. During the nine months ended September 30, 2019, we issued 90,000 shares of our common stock valued at $38,430 for legal services, and we recorded the value of the shares as share-based compensation in Legal, accounting, consulting and public reporting in our consolidated statements of operations. Warrants: The following table summarizes our share warrants outstanding as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Number of Shares Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price Warrants outstanding, beginning of period 1,309,033 $ 0.27 $ 1,209,025 $ 0.21 Warrants issued to consultants 75,006 0.43 100,008 0.89 Warrants exercised Expired Warrants outstanding, end of period 1,384,039 0.21 1,309,033 $ 0.27 Warrants exercisable, end of period 1,384,039 $ 0.21 1,309,033 $ 0.27 The weighted-average remaining contractual life for warrants outstanding and exercisable at September 30, 2019 and December 31, 2018, is 2.62 years and 3.0 years, respectively; and the aggregate intrinsic value of warrants outstanding and exercisable at September 30, 2019 and December 31, 2018 is $0. 132,669 warrants issued during the year ended December 31, 2017 were valued utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 0.16 - $2.18 Exercise price $ 0.18 Risk free interest rate 1.01% - 1.37 % Expected term (years) 5 Expected volatility 322% - 504 % Expected dividends 0 % 100,008 warrants issued during the year ended December 31, 2018 were valued utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 0.16 - $2.18 Exercise price $ 0.18 Risk free interest rate 1.01% - 1.37 % Expected term (years) 5 Expected volatility 322% - 504 % Expected dividends 0 % 75,006 warrants issued during the nine months ended September 30, 2019 were valued utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 0.34 - $0.45 Exercise price $ 0.43 Risk free interest rate 1.76% - 2.52 % Expected term (years) 5 Expected volatility 140% - 185 % Expected dividends 0 % 2014 Equity Incentive Plan On November 20, 2014, our board of directors approved our 2014 Stock Incentive Plan (the Plan) and the Plan became effective on November 19, 2015. The Plan provides officers, directors, selected employees and outside consultants an opportunity to acquire or increase a direct ownership interest in our operations and future success. Our board of directors currently administers the Plan and makes all decisions concerning which officers, directors, employees and other persons are granted awards, how many to grant to each recipient, when awards are granted, the terms and conditions applicable to awards, how the Plan should be interpreted, whether to amend or terminate the Plan and whether to delegate administration of the Plan to a committee. A maximum of 4,000,000 common shares are subject to the Plan. The Plan provides for the grant of stock options, stock awards, restricted stock units and stock appreciation rights. Stock options may be non-qualified stock options or incentive stock options except that stock options granted to outside directors, consultants or advisers providing services to us shall in all cases be non-qualified stock options. The Plan will terminate on November 20, 2024, unless the administrator terminates the Plan earlier. As of September 30, 2019, and December 31, 2018, no common shares were available for issue under the Plan. 2017 Equity Incentive Plan On May 31, 2017, our board of directors approved our 2017 Stock Incentive Plan (the Plan) and the Plan became effective on May 31, 2017. The Plan provides officers, directors, selected employees and outside consultants an opportunity to acquire or increase a direct ownership interest in our operations and future success. Our board of directors currently administers the Plan and makes all decisions concerning which officers, directors, employees and other persons are granted awards, how many to grant to each recipient, when awards are granted, the terms and conditions applicable to awards, how the Plan should be interpreted, whether to amend or terminate the Plan and whether to delegate administration of the Plan to a committee. A maximum of 6,000,000 common shares are subject to the Plan. The Plan provides for the grant of stock options, stock awards, restricted stock units and stock appreciation rights. Stock options may be non-qualified stock options or incentive stock options except that stock options granted to outside directors, consultants or advisers providing services to us shall in all cases be non-qualified stock options. The Plan will terminate on May 31, 2027, unless the administrator terminates the Plan earlier. As of September 30, 2019, and December 31, 2018, 900,342 common shares were available for issue under the Plan. 2018 Equity Incentive Plan On January 31, 2018, our board of directors approved our 2018 Stock Incentive Plan (the Plan) and the Plan became effective on January 31, 2018. On June 21, 2018, our board of directors amended the Plan to increase the maximum number of our shares of common shares subject to the plan from 12,500,000 to 25,000,000. The Plan provides officers, directors, selected employees and outside consultants an opportunity to acquire or increase a direct ownership interest in our operations and future success. Our board of directors currently administers the Plan and makes all decisions concerning which officers, directors, employees and other persons are granted awards, how many to grant to each recipient, when awards are granted, the terms and conditions applicable to awards, how the Plan should be interpreted, whether to amend or terminate the Plan and whether to delegate administration of the Plan to a committee. The Plan provides for the grant of stock options, stock awards, restricted stock units and stock appreciation rights. Stock options may be non-qualified stock options or incentive stock options except that stock options granted to outside directors, consultants or advisers providing services to us shall in all cases be non-qualified stock options. The Plan will terminate on January 31, 2028, unless the administrator terminates the Plan earlier. As of September 30, 2019, and December 31, 2018, 81,040,000 common shares were available for issue under the Plan. Stock Options On January 12, 2016, we awarded 1,050,000 stock options to each of Messrs. Blackmon and Verzura and 980,000 stock options to Mr. Ruby under our 2014 Stock Incentive Plan. The options were fully vested at the time of grant and give the option holder the right to purchase shares of our common stock at $0.20 per share during the ten-year term of the option. We calculated the fair value of each option to be approximately $0.20 per option utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 0.20 Exercise price $ 0.20 Risk free interest rate 1.98 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % On February 28, 2018, we awarded 6,000,000 stock options to various employees under our 2017 Stock Incentive Plan. Of these options, 5,125,000 were fully vested at the time of grant with the remaining 875,000 vesting quarterly through December 31, 2019. The awarded options give the option holder the right to purchase shares of our common stock at $1.08 per share during the ten-year term of the option. We calculated the fair value of each option to be approximately $0.91 per option utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 1.05 Exercise price $ 1.08 Risk free interest rate 2.8 % Expected term (years) 5-10 Expected volatility 197 % Expected dividends 0 % The total grant-date fair value of these options was approximately $6,146,000. Stock-based compensation expense related to these stock options included in operating expenses for the twelve months ended December 31, 2018 was approximately $5,785,348. On June 29, 2018, we awarded 14,195,000 stock options to various employees under our 2018 Stock Incentive Plan. Of these options, 13,250,000 were fully vested at the time of grant with the remaining 945,000 vesting quarterly through July 1, 2022. The awarded options give the option holder the right to purchase shares of our common stock at $0.705 per share during the ten-year term of the option. We calculated the fair value of each option to be approximately $0.59 per option utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 0.705 Exercise price $ 0.705 Risk free interest rate 2.73% - 2.81 % Expected term (years) 5 Expected volatility 427% - 505 % Expected dividends 0 % The total grant-date fair value of these options was approximately $9,711,400. Stock-based compensation expense related to these stock options included in operating expenses for the twelve months ended December 31, 2018 was approximately $9,104,999. On September 24, 2018, we awarded 3,860,000 stock options to various employees under our 2018 Stock Incentive Plan. Of these options, 3,000,000 were fully vested at the time of grant with the remaining 860,000 vesting on September 24, 2024. The awarded options give the option holder the right to purchase shares of our common stock at $0.43 per share during the ten-year term of the option. We calculated the fair value of each option to be approximately $0.59 per option utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 0.40 Exercise price $ 0.43 Risk free interest rate 1.52% - 1.58 % Expected term (years) 5-7.5 Expected volatility 137% - 176 % Expected dividends 0 % The total grant-date fair value of these options was approximately $1,367,000. Stock-based compensation expense related to these stock options included in operating expenses for the nine months ended September 30, 2019 was approximately $1,037,000. The following table summarizes our stock options outstanding as of September 30, 2019 and December 31, 2018, respectively: Number of Weighted Weighted Stock options outstanding at December 31, 2017 6,637,500 8.9 $ 0.28 Issued 20,199,800 9.3 $ 0.57 Exercised Expired Stock options outstanding at December 31, 2018 26,837,300 9.2 $ 0.43 Issued 3,860,000 10.0 0.43 Exercised Expired Stock options outstanding at September 30, 2019 30,707,300 8.6 $ 0.42 Stock options exercisable at September 30, 2019 28,828,300 8.7 $ 0.42 The total price to exercise all outstanding stock options is $12,921,439. The weighted-average remaining contractual life for stock options outstanding and exercisable at September 30, 2019, is 8.4 years, and the aggregate intrinsic value of options outstanding and exercisable at September 30, 2019 is $0. On July 25, 2018, we repriced the exercise price per share from $1.08 to $0.58 per share for the stock options to purchase 6,000,000 shares of our common stock that were granted on March 28, 2018 and repriced the exercise price per share from $0.705 to $0.58 per share for the stock options to purchase 14,195,000 of our common stock that were granted on June 29, 2018. No adjustment to shared-based compensation in the consolidated financial statements for the nine months ended September 30, 2019 was necessary as a result of the repricing of the stock options. On August 17, 2018, we repriced the exercise price per share (i) from $0.70 to $0.43 for per share for stock options to purchase 600,000 shares of our common stock that were granted on January 1, 2015 (ii) from $0.56 to $0.43 for per share for stock options to purchase 2,900,000 shares of our common stock that were granted on January 12, 2016 (iii) from $0.92 to $0.43 for 57,500 per share for stock options to purchase 57,500 shares of our common stock that were granted on July 27, 2017 (iv) from $0.875 to $0.43 per share for stock options to purchase 1,000,000 shares of our common stock that were granted on December 8, 2017 (v) from $0.58 to $0.43 per share for stock options to purchase 6,000,000 shares of our common stock that were granted on March 28, 2018 and (vi) from $0.58 to $0.43 per share for stock options to purchase 14,195,000 of our common stock that were granted on June 29, 2018. No adjustment to shared-based compensation in the consolidated financial statements for the nine months ended September 30, 2019 was necessary as a result of the repricing of the stock options. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 17 SHARE-BASED COMPENSATION Share-based Compensation We recognize share-based compensation expense in cost of revenues, sales and marketing expenses, R&D expenses, general and administrative expenses, and other income and expenses, based on the fair value of common shares issued for services. In addition, we accrue share-based compensation expense for estimated share-based awards earned during the nine months ended September 30, 2019 and 2018, under our 2017 Equity Incentive Plan and our 2018 Equity Incentive Plan. Share-based compensation expense for the three and nine months ended September 30, 2019 and 2018 is, as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Options granted to officers, directors and employees $ 1,435,811 $ 179,018 $ 1,661,846 $ 14,689,497 Warrants and common stock issued for advisory board fees 28,751 49,002 98,253 76,322 Common stock issued for services 22,692 53,164 97,630 238,637 Common stock issued as compensation to employees 70,000 42,600 70,000 233,700 $ 1,557,254 $ 323,784 $ 1,927,729 $ 15,238,156 |
SIGNIFICANT CUSTOMER INFORMATIO
SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY | 9 Months Ended |
Sep. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY | NOTE 18 SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY The following tables show significant concentrations in our revenues and accounts receivable for the periods indicated: Percentage of Revenue: Nine Months Ended September 30, 2019 2018 Customer A 18% 14% Customer B 12% 14% Customer C 11% 9% Percentage of Accounts Receivable: September 30, 2019 December 31, 2018 Customer A 100% 98% Customer B % 2% Customer C % % The following tables show significant concentrations in our expenses and accounts payable for the periods indicated: Percentage of Expenses: Nine Months Ended September 30, 2019 2018 Vendor A 36% 4% Vendor B 5% 2% Vendor C 3% 2% Percentage of Accounts Payable: September 30, 2019 December 31, 2018 Vendor A 37% 25% Vendor B 20% 22% Vendor C 14% 7% |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 19 COMMITMENTS AND CONTINGENCIES Contractual Obligations and Commercial Commitments Clinical Trial Funding Commitment On August 3, 2018, the University of Florida received approval of an Investigational New Drug (IND) application from the Department of Health and Human Services Food and Drug Administration for a clinical investigation for breast cancer of our 95% owned subsidiary, Prana Therapeutics, Inc.s licensed flagship product, Epidiferphane (EDP). We have committed to spend approximately $300,000 during 2019 and 2020 to fund phase I and phase II clinical trials in connection with the IND approval. Research Laboratory Prana Therapeutics, Inc., our 95% owned subsidiary (PTI), utilizes laboratory facilities at the University of Florida School of Medicine for research purposes. PTI is negotiating a research agreement with University of Florida Trustees for 2019 and 2020 for the continued use of the laboratory facilities. Under the terms of the draft research agreement, PTI would pay UFT $700,000 in 2019 and $900,000 in 2020 in varying quarterly installments, beginning in June 2019. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 20 SUBSEQUENT EVENTS We entered into a contract to sell one of our customers approximately $16,250,000 of 60% CBD crude oil. Unfortunately, the customer advised us that, on October 30, 2019, their manufacturing and processing facility was destroyed by a fire. Accordingly, it appears that the customer will not be able to fully perform the complete terms of the agreement. In accordance with ASC 855-10 we have analyzed our operations subsequent to September 30, 2019 to the date these consolidated financial statements were issued, and have determined that, other than as disclosed above, we do not have any material subsequent events to disclose in these consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation At July 1, 2019, we concluded that we had established a variable interest entity relationship with TEL, because we are the primary beneficiary, in accordance with U.S. GAAP. As a result, we elected to consolidate TEL beginning July1, 2019. At March 31, 2017, we concluded that we had established a variable interest entity relationship with CRD, because we are the primary beneficiary, in accordance with U.S. GAAP. As a result, we elected to consolidate CRD beginning March 31, 2017. In the opinion of our management, these unaudited consolidated financial statements reflect all adjustments, all of which are of a normal recurring nature, necessary to present fairly our consolidated financial position at September 30, 2019, the consolidated results of operations for the three and nine months ended September 30, 2019 and 2018, the consolidated statements of cash flows for the nine months ended September 30, 2019 and 2018 and the consolidated statements of stockholders’ equity for the nine months ended September 30, 2019 and 2018. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the entire fiscal year. |
Use of Estimates | Use of Estimates We make our estimate of the ultimate outcome for these items based on historical trends and other information available when our consolidated financial statements are prepared. We recognize changes in estimates in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Our actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Level 1 Level 2 Level 3 The carrying amount of our cash and cash equivalents, accounts receivable, accounts payable, and other current assets and liabilities in our consolidated financial statements approximates fair value because of the short-term nature of the instruments. Investments in non-marketable equity securities are carried at cost less other-than-temporary impairments. The carrying amount of our notes payable and convertible debt at September 30, 2019, approximates their fair values based on our incremental borrowing rates. There have been no changes in Level 1, Level 2, and Level 3 categorizations and no changes in valuation techniques for these assets or liabilities for the nine months ended September 30, 2019 and 2018. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Accounts Receivable, Net | Accounts Receivable, Net |
Inventory | Inventory |
Property, Plant and Equipment, net | Property, Plant and Equipment, net |
Operating Lease Right of Use Asset and Liability | Operating Lease Right of Use Asset and Liability - |
Granted Patents, Net | Granted Patents, Net |
Intangible Assets | Intangible Assets |
Long-Lived Assets Impairment Assessment | Long-Lived Assets Impairment Assessment As discussed below, we recorded an impairment charge related to the goodwill resulting from our purchase of Prana Therapeutics, Inc in the amount of $4,731,729 and $0 in the three and nine months ended September 30, 2019 and the year ended December 31, 2018, respectively. |
Goodwill | Goodwill Our goodwill consists of the following: September 30, December 31, Prana Therapeutics, Inc. $ — $ 4,731,729 Cannabinoid Research Development Company Limited 106,874 106,874 $ 106,874 $ 4,838,603 Our goodwill, which consists of our interest in a ninety-five percent owned subsidiary, Prana Therapeutics, Inc. (PTI) and a fifty percent owned subsidiary, Cannabinoid Research Development Company Limited (CRD), is not amortized, but is evaluated for impairment annually, or when indicators of a potential impairment are present. We test goodwill for impairment annually or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, rather than amortize. Goodwill impairment tests consist of a comparison of each reporting units fair value with its carrying value. Impairment exists when the carrying amount of goodwill exceeds the implied fair value for each reporting unit. To estimate the fair value, management used valuation techniques which included the discounted value of estimated future cash flows. The evaluation of impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and are subject to change as future events and circumstances change. Actual results may differ from assumed and estimated amounts. Management determined that an impairment write-down was required as of September 30, 2019. Thus, we recorded an impairment on our acquisition of Prana Therapeutics, Inc. in the amount of $4,019,229 in the three months ended September 30, 2019. |
Advance Receipts and Deferred Revenue | Advance Receipts and Deferred Revenue |
Revenue Recognition | Revenue Recognition Revenue from Contracts with Customers Revenue Recognition Affiliate Prana Prana Prana Prana Prana Revenue from Contracts with Customers. We have licensed Prana Hemp Prana Hemp Prana Hemp Prana Hemp Prana Hemp Revenue from Contracts with Customers. |
Cost of Revenues | Cost of Revenues |
Research and Development Expenses | Research and Development Expenses |
General and Administrative Expenses | General and Administrative Expenses |
Share-Based Compensation | Share-Based Compensation We account for stock option grants issued and vesting to employees based on ASC 718, Compensation Stock Compensation |
Income Taxes | Income Taxes We follow the provisions of ASC 740, Income Taxes When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in our consolidated financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits, if any, are classified as interest expense and penalties and are included in selling, general and administrative expenses in our consolidated statements of operations. On December 22, 2017, the U.S. Tax Cuts and Jobs Act was enacted. U.S. tax reform introduced many changes, including lowering the U.S. corporate tax rate to 21 percent, changes in incentives, provisions to prevent U.S. base erosion and significant changes in the taxation of international income, including provisions which allow for the repatriation of foreign earnings without U.S. tax. The enactment of U.S. tax reform had no impact on our income taxes for the nine months ended September 30, 2019 or 2018, respectively. |
Commitments and Contingencies | Commitments and Contingencies Certain conditions may exist as of the date our consolidated financial statements are issued, which may result in a loss but which will only be resolved when one or more future events occur or fail to occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of the legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. |
Net Loss Per Share | Net Loss Per Share Earnings per Share Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive. Nine Months Ended September 30, 2019 2018 Warrants to purchase common stock 1,384,039 1,284,031 Stock options 28,828,300 25,080,000 30,212,339 26,364,031 |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) |
Concentration of Credit Risk | Concentration of Credit Risk |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements |
Reclassification | Reclassification |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of goodwill | Our goodwill consists of the following: September 30, December 31, Prana Therapeutics, Inc. $ — $ 4,731,729 Cannabinoid Research Development Company Limited 106,874 106,874 $ 106,874 $ 4,838,603 |
Schedule of potentially dilutive securities that have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive | Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive. Nine Months Ended September 30, 2019 2018 Warrants to purchase common stock 1,384,039 1,284,031 Stock options 28,828,300 25,080,000 30,212,339 26,364,031 |
DUE FROM RELATED PARTIES (Table
DUE FROM RELATED PARTIES (Table) | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Schedule of Amounts Due From Related Parties | Amounts due (to) from related parties include the following: September 30, 2019 December 31, 2018 Advesa, Inc. $ (17,735 ) $ 42,349 NutriMed, LLC 152,501 44,622 $ 134,766 $ 86,971 |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Operating Leases | Future minimum payments for these leases are: For the twelve Months Ending September 30, 2020 2021 2022 2023 2024 $662,970 $605,626 $464,171 $300,992 $204,635 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | At September 30, 2019 and December 31, 2018, our inventory was, as follows: September 30, 2019 December 31, 2018 Raw materials $ 131,030 $ 1,813,880 Work-in-process 319,576 666,845 Finished products 60,750 71,393 $ 511,356 $ 2,552,118 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment, Net [Abstract] | |
Schedule of Property and Equipment | Property, plant and equipment, net of accumulated depreciation and amortization, at September 30, 2019 and December 31, 2018 is, as follows: September 30, 2019 December 31, 2018 Cost of construction in process - extraction facility Tennessee extraction facility Equipment $ $ Mead, Colorado extraction facility Equipment and leasehold improvements $ $ 1,743,223 Jamaica cultivation and extraction facility: Leasehold improvements - laboratory 75,000 75,000 Leasehold improvements - cultivation 110,699 118,964 $ 185,699 $ 1,937,187 September 30, 2019 December 31, 2018 Extraction facility, laboratory equipment, and office furniture and fixtures Mead, Colorado extraction facility Equipment and machinery $ 2,678,696 $ 1,269,734 Furniture and fixtures 64,955 64,955 Leasehold improvements 1,341,553 237,581 Transportation equipment 169,370 60,228 Farm Equipment 531,245 531,245 Golden, Colorado administrative offices and laboratories Furniture and fixtures 64,350 49,282 Transportation equipment 215,672 200,704 Golden, Colorado industrial hemp laboratory - equipment 306,935 39,944 Leasehold improvements 83,379 Remote laboratory equipment 99,220 99,220 McMinnville, Tennessee extraction facility Equipment 159,912 Furniture and fixtures 6,713 5,521,745 2,552,893 Accumulated amortization and depreciation (917,948 ) (433,148 ) $ 4,603,797 $ 2,119,745 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | Our accounts payable and accrued expenses consist of: September 30, 2019 December 31, 2018 Trade accounts payable $ 1,490,458 $ 1,163,399 Accrued wages and related expenses 160,396 126,345 Accrued interest expense 74,503 2,572 Other accrued expenses 10,186 Total accrued expenses $ 1,725,357 $ 1,302,502 |
INSTALLMENT LOANS PAYABLE (Tabl
INSTALLMENT LOANS PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Installment Loans Payable | September 30, 2019 December 31, 2018 Installment Loans Payable $ 117,981 $ 57,799 |
ADVANCE RECEIPTS AND DEFERRED_2
ADVANCE RECEIPTS AND DEFERRED REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Deferred Revenue Disclosure [Abstract] | |
Schedule of deferred revenue | Our advance receipts and deferred revenue consist of: September 30, 2019 December 31, 2018 Deferred revenue WeedMD $ $ 23,750 Advance receipts Sale of Finished Products 471,150 $ 471,150 $ 23,750 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Notes Payable [Abstract] | |
Schedule of Promissory Notes Issued | The following table summarizes our notes outstanding as of September 30, 2019 and December 31, 2018: Issue Date Security Maturity Date Interest Rate Draws Under the Note September 30, 2019 December 31, 2018 Note Dated November 7, 2018: 11/05/2018 Unsecured 5/04/2019 5% First Tranche $ $ 525,000 12/05/2018 Unsecured 6/03/2019 5% Second Tranche 525,000 12/26/2018 Unsecured 6/24/2019 5% Third Tranche 525,000 Note Dated February 11, 2019: 2/11/2019 Unsecured 8/10/2019 5% First Tranche 4/08/2019 Unsecured 10/06/2019 5% Second Tranche 650,000 Note Dated June 7, 2019: 6/07/19 Unsecured 12/04/19 5% First Trance 2,625,000 6/21/19 Unsecured 12/18/19 5% Second Tranche 1,050,000 7/11/19 Unsecured 1/07/20 5% Third Tranche 1,050,000 7/19/19 Unsecured 1/15/20 5% Fourth Tranche 525,000 9/19/19 Unsecured 3/17/20 5% Fifth Tranche 525,000 Note Dated August 6, 2019: 8/06/19 Secured 11/04/19 498,750 Note Dated August 8, 2019: 8/08/19 Secured 11/06/19 1,200,000 Notes Dated August 12, 2019: 8/12/19 Secured 11/10/19 781,250 8/12/19 Secured 11/10/19 125,000 Less unamortized discount (375,542 ) (62,917 ) $ 8,654,458 $ 1,512,083 |
NOTES PAYABLE TO OFFICERS AND_2
NOTES PAYABLE TO OFFICERS AND DIRECTORS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes payable to officers and directors | Notes payable to officers and directors are due on demand and consisted of the following at September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Note payable to Earnie Blackmon, an officer and director $ 834,492 $ 840,807 Note payable to Tony Verzura, a former officer and former director 179,234 160,247 Note payable to Chad Ruby, an office and director 167,237 154,382 $ 1,180,963 $ 1,155,436 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of share warrants outstanding | The following table summarizes our share warrants outstanding as of September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Number of Shares Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price Warrants outstanding, beginning of period 1,309,033 $ 0.27 $ 1,209,025 $ 0.21 Warrants issued to consultants 75,006 0.43 100,008 0.89 Warrants exercised Expired Warrants outstanding, end of period 1,384,039 0.21 1,309,033 $ 0.27 Warrants exercisable, end of period 1,384,039 $ 0.21 1,309,033 $ 0.27 |
Summary of stock options outstanding | The following table summarizes our stock options outstanding as of September 30, 2019 and December 31, 2018, respectively: Number of Weighted Weighted Stock options outstanding at December 31, 2017 6,637,500 8.9 $ 0.28 Issued 20,199,800 9.3 $ 0.57 Exercised Expired Stock options outstanding at December 31, 2018 26,837,300 9.2 $ 0.43 Issued 3,860,000 10.0 0.43 Exercised Expired Stock options outstanding at September 30, 2019 30,707,300 8.6 $ 0.42 Stock options exercisable at September 30, 2019 28,828,300 8.7 $ 0.42 |
Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of assumptions used for valuation utilizing the Black Scholes option pricing model for fair value | We calculated the fair value of each option to be approximately $0.20 per option utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 0.20 Exercise price $ 0.20 Risk free interest rate 1.98 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % We calculated the fair value of each option to be approximately $0.91 per option utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 1.05 Exercise price $ 1.08 Risk free interest rate 2.8 % Expected term (years) 5-10 Expected volatility 197 % Expected dividends 0 % We calculated the fair value of each option to be approximately $0.59 per option utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 0.705 Exercise price $ 0.705 Risk free interest rate 2.73% - 2.81 % Expected term (years) 5 Expected volatility 427% - 505 % Expected dividends 0 % We calculated the fair value of each option to be approximately $0.59 per option utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 0.40 Exercise price $ 0.43 Risk free interest rate 1.52% - 1.58 % Expected term (years) 5-7.5 Expected volatility 137% - 176 % Expected dividends 0 % |
Warrants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of assumptions used for valuation utilizing the Black Scholes option pricing model for fair value | 132,669 warrants issued during the year ended December 31, 2017 were valued utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 0.16 - $2.18 Exercise price $ 0.18 Risk free interest rate 1.01% - 1.37 % Expected term (years) 5 Expected volatility 322% - 504 % Expected dividends 0 % 100,008 warrants issued during the year ended December 31, 2018 were valued utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 0.16 - $2.18 Exercise price $ 0.18 Risk free interest rate 1.01% - 1.37 % Expected term (years) 5 Expected volatility 322% - 504 % Expected dividends 0 % 75,006 warrants issued during the nine months ended September 30, 2019 were valued utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 0.34 - $0.45 Exercise price $ 0.43 Risk free interest rate 1.76% - 2.52 % Expected term (years) 5 Expected volatility 140% - 185 % Expected dividends 0 % |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of share-based compensation expense | Share-based compensation expense for the three and nine months ended September 30, 2019 and 2018 is, as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Options granted to officers, directors and employees $ 1,435,811 $ 179,018 $ 1,661,846 $ 14,689,497 Warrants and common stock issued for advisory board fees 28,751 49,002 98,253 76,322 Common stock issued for services 22,692 53,164 97,630 238,637 Common stock issued as compensation to employees 70,000 42,600 70,000 233,700 $ 1,557,254 $ 323,784 $ 1,927,729 $ 15,238,156 |
SIGNIFICANT CUSTOMER INFORMAT_2
SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
Schedule of significant concentrations risk | The following tables show significant concentrations in our revenues and accounts receivable for the periods indicated: Percentage of Revenue: Nine Months Ended September 30, 2019 2018 Customer A 18% 14% Customer B 12% 14% Customer C 11% 9% Percentage of Accounts Receivable: September 30, 2019 December 31, 2018 Customer A 100% 98% Customer B % 2% Customer C % % The following tables show significant concentrations in our expenses and accounts payable for the periods indicated: Percentage of Expenses: Nine Months Ended September 30, 2019 2018 Vendor A 36% 4% Vendor B 5% 2% Vendor C 3% 2% Percentage of Accounts Payable: September 30, 2019 December 31, 2018 Vendor A 37% 25% Vendor B 20% 22% Vendor C 14% 7% |
BUSINESS ORGANIZATION AND NAT_2
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS (Details) - USD ($) | Jul. 14, 2017 | Mar. 31, 2014 | Sep. 30, 2019 | Dec. 31, 2018 | Mar. 26, 2014 |
Amount of payable owed to former officer and director, exchanged for assets sold | $ 15,000 | ||||
Number of common shares issued in exchange for certain intellectual property | 38,690,000 | ||||
Total number of common shares previously outstanding, cancelled during period | 41,690,000 | ||||
Common stock, shares outstanding | 85,314,264 | 77,466,979 | 43,620,000 | ||
Prana [Member] | |||||
Common shares received in exchange for future consulting services and use of our intellectual property | 5,730,000 | ||||
Fair market value of common stock | $ 5,070,500 | ||||
Closing price per share | $ 0.85 | ||||
Prana [Member] | Subscription Agreement [Member] | |||||
Shares of investment owned | 400,000 | ||||
Investments in non-marketable equity securities | $ 200,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||||
Allowance for doubtful accounts | $ 0 | $ 0 | $ 0 | ||
Bad debt expense, included in general and administrative expenses | 0 | $ 0 | |||
Goodwill | 106,874 | 106,874 | 4,838,603 | ||
Adjustment of operating lease right-of-use assets and lease liability | 910,315 | 910,315 | |||
Operating lease right-of-use asset | 2,136,876 | 2,136,876 | |||
Operating lease liability | 2,144,708 | 2,144,708 | 2,374,732 | ||
Present value of remaining minimum lease payments | 908,447 | 908,447 | |||
Rent expense | 237,856 | 230,024 | |||
Goodwill impairment charge | $ 4,731,729 | $ 4,731,729 | |||
Minimum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Estimated useful lives | 3 years | ||||
Estimated useful life | 10 years | ||||
Equity Method Investments, Percentage | 50.00% | 50.00% | |||
Maximum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Estimated useful lives | 5 years | ||||
Estimated useful life | 15 years | ||||
Equity Method Investments, Percentage | 20.00% | 20.00% | |||
Patents [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Estimated useful life | 15 years | ||||
PTI [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Equity Method Investments, Percentage | 95.00% | 95.00% | |||
Goodwill | 4,731,729 | ||||
Goodwill impairment charge | $ 4,731,729 | $ 4,731,729 | 0 | ||
TEL [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Equity Method Investments, Percentage | 85.00% | 85.00% | |||
CRD [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Equity Method Investments, Percentage | 50.00% | 50.00% | |||
Goodwill | $ 106,874 | $ 106,874 | $ 106,874 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of goodwill) (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Goodwill [Line Items] | ||
Goodwill | $ 106,874 | $ 4,838,603 |
PTI [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 4,731,729 | |
CRD [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 106,874 | $ 106,874 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of anti-dilutive securities) (Details) - shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted net loss per share | 30,212,339 | 26,364,031 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted net loss per share | 1,384,039 | 1,284,031 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted net loss per share | 28,828,300 | 25,080,000 |
GOING CONCERN (Details)
GOING CONCERN (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
GOING CONCERN [Abstract] | |||||
Net loss | $ 12,617,489 | $ 2,982,403 | $ 17,598,582 | $ 21,070,952 | |
Net cash used in operating activities | 4,935,227 | $ 5,264,006 | |||
Working capital deficit | 12,131,682 | 12,131,682 | |||
Accumulated deficit | $ 56,797,504 | $ 56,797,504 | $ 39,374,397 |
DUE FROM RELATED PARTIES (Narra
DUE FROM RELATED PARTIES (Narrative) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Advesa, Inc. [Member] | ||
Related Party Transaction [Line Items] | ||
Sales to related parties | $ 233,390 | $ 103,402 |
NutriMed, LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Sales to related parties | $ 233,390 | $ 103,402 |
DUE FROM RELATED PARTIES (Sched
DUE FROM RELATED PARTIES (Schedule of Amounts Due from Related Parties) (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | ||
Total due to related parties | $ (1,180,963) | $ (1,155,436) |
Total from related parties | 134,766 | 86,971 |
Advesa, Inc. [Member] | ||
Related Party Transaction [Line Items] | ||
Total due to related parties | (17,735) | |
Total from related parties | 42,349 | |
NutriMed, LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Total from related parties | $ 152,501 | $ 44,622 |
OPERATING LEASES (Narrative) (D
OPERATING LEASES (Narrative) (Details) | Sep. 02, 2019ft² | Jun. 02, 2019USD ($)ft² | Nov. 01, 2018ft² | Aug. 15, 2018USD ($)ft² | Oct. 01, 2017USD ($)ft² | Aug. 01, 2017USD ($)ft² | Apr. 23, 2019ft² | Dec. 31, 2024USD ($) | Dec. 31, 2023USD ($) | Dec. 31, 2022USD ($) | Apr. 30, 2022USD ($) | Dec. 31, 2021USD ($) | Apr. 30, 2021USD ($) | Dec. 31, 2020USD ($) | Oct. 31, 2020USD ($) | Apr. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Oct. 31, 2019USD ($) | Sep. 30, 2019USD ($)ft² | Dec. 31, 2018USD ($) |
CRD [Member] | ||||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||||
Equity Method Investments, Percentage | 50.00% | |||||||||||||||||||
Lease amount from father of directors and members | $ 1 | |||||||||||||||||||
Industrial Hemp Laboratory - Golden, Colorado [Member] | ||||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||||
Area of leased space | ft² | 9,882 | |||||||||||||||||||
Maturity date | Jul. 31, 2020 | |||||||||||||||||||
Basic rent per month | $ 3,302 | $ 3,302 | ||||||||||||||||||
Industrial Hemp Laboratory - Golden, Colorado [Member] | Subsequent Event [Member] | ||||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||||
Basic rent per month | $ 3,800 | $ 3,500 | ||||||||||||||||||
Colorado Extraction Facility [Member] | ||||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||||
Area of leased space | ft² | 14,300 | 40,000 | ||||||||||||||||||
Maturity date | Aug. 31, 2019 | Sep. 30, 2019 | ||||||||||||||||||
Basic rent per month | $ 12,596 | $ 7,500 | ||||||||||||||||||
Security deposit | $ 75,000 | |||||||||||||||||||
Mcminnville Extraction Facility [Member] | ||||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||||
Area of leased space | ft² | 10,000 | |||||||||||||||||||
Maturity date | May 31, 2022 | |||||||||||||||||||
Basic rent per month | $ 10,000 | |||||||||||||||||||
Colorado Staging Facility [Member] | ||||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||||
Area of leased space | ft² | 21,390 | |||||||||||||||||||
Maturity date | Aug. 31, 2024 | |||||||||||||||||||
Colorado Staging Facility [Member] | Subsequent Event [Member] | ||||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||||
Basic rent per month | $ 25,579 | $ 24,823 | $ 24,111 | $ 23,409 | $ 22,727 | |||||||||||||||
Colorado Testing Lab [Member] | ||||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||||
Area of leased space | ft² | 2,100 | |||||||||||||||||||
Maturity date | Oct. 31, 2020 | |||||||||||||||||||
Colorado Testing Lab [Member] | Subsequent Event [Member] | ||||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||||
Basic rent per month | $ 2,226 | $ 2,161 | ||||||||||||||||||
Colorado Production Lab [Member] | ||||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||||
Area of leased space | ft² | 3,098 | |||||||||||||||||||
Maturity date | Apr. 30, 2022 | |||||||||||||||||||
Colorado Production Lab [Member] | Subsequent Event [Member] | ||||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||||
Basic rent per month | $ 2,959 | $ 2,870 | $ 2,788 | |||||||||||||||||
Jamaica Cultivation and Extraction Facility [Member] | ||||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||||
Area of leased space | ft² | 28 |
OPERATING LEASES (Schedule of F
OPERATING LEASES (Schedule of Future Minimum Payament) (Details) | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 662,970 |
2021 | 605,626 |
2022 | 464,171 |
2023 | 300,992 |
2024 | $ 204,635 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 131,030 | $ 1,813,880 |
Work-in-process | 319,576 | 666,845 |
Finished products | 60,750 | 71,393 |
Inventory | $ 511,356 | $ 2,552,118 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization | $ 490,137 | $ 264,445 | ||
Property, Plant and Equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization | $ 199,398 | $ 106,567 | $ 484,800 | $ 298,465 |
PROPERTY, PLANT AND EQUIPMENT_4
PROPERTY, PLANT AND EQUIPMENT, NET (Schedule of Property and Equipment) (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Cost of construction in process - extraction facility | $ 185,699 | $ 1,937,187 |
Extraction facility, laboratory equipment, and office furniture and fixtures | 5,521,745 | 2,552,893 |
Accumulated amortization and depreciation | (917,948) | (433,148) |
Cultivation facility and laboratory equipment and Office furniture and fixtures | 4,603,797 | 2,119,745 |
Equipment [Member] | Tennessee extraction facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost of construction in process - extraction facility | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 159,912 | |
Equipment [Member] | Mead, Colorado Extraction Facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost of construction in process - extraction facility | 1,743,223 | |
Leasehold Improvements - Laboratory [Member] | Jamaica Cultivation and Extraction Facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost of construction in process - extraction facility | 75,000 | 75,000 |
Leasehold Improvements - Cultivation [Member] | Jamaica Cultivation and Extraction Facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost of construction in process - extraction facility | 110,699 | 118,964 |
Equipment and machinery [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 2,678,696 | 1,269,734 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 64,955 | 64,955 |
Furniture and Fixtures [Member] | Tennessee extraction facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 6,713 | |
Furniture and Fixtures [Member] | Colorado Administrative Offices [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 64,350 | 49,282 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 1,341,553 | 237,581 |
Leasehold Improvements [Member] | Colorado Extraction Facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 83,379 | |
Transportation Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 169,370 | 60,228 |
Transportation Equipment [Member] | Colorado Extraction Facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 215,672 | 200,704 |
Farm Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 531,245 | 531,245 |
Golden, Colorado Industrial Hemp Laboratory - Equipment [Member] | Colorado Extraction Facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 306,935 | 39,944 |
Remote Laboratory Equipment [Member] | Colorado Extraction Facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | $ 99,220 | $ 99,220 |
GRANTED PATENT (Details)
GRANTED PATENT (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Aug. 15, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Accumulated amortization | $ 15,132 | $ 9,795 | ||
Patents [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful live | 15 years | |||
Amortization expense | $ 5,337 | $ 5,337 | ||
Accumulated amortization | $ 15,132 | $ 9,795 | ||
Research, legal fees | $ 142,317 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Patents [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 15 years |
Design Marks and Trademarks [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 10 years |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Schedule of consolidated balance sheets) (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Trade accounts payable | $ 1,490,458 | $ 1,163,399 |
Accrued wages and related expenses | 160,396 | 126,345 |
Accrued interest expense | 74,503 | 2,572 |
Other accrued expenses | 10,186 | |
Total accrued expenses | $ 1,725,357 | $ 1,302,502 |
INSTALLMENT LOANS PAYABLE (Deta
INSTALLMENT LOANS PAYABLE (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Short-term Debt [Line Items] | ||
Installment Loans Payable | $ 117,981 | $ 57,799 |
Installment One [Member] | ||
Short-term Debt [Line Items] | ||
Installment loan monthly payment | $ 2,160 | |
Term period | 36 months | |
Installment Two [Member] | ||
Short-term Debt [Line Items] | ||
Installment loan monthly payment | $ 1,354 | |
Term period | 72 months | |
36 Month Installment [Member] | ||
Short-term Debt [Line Items] | ||
Installment Loans Payable | $ 38,361 | 57,799 |
72 Month Installment [Member] | ||
Short-term Debt [Line Items] | ||
Installment Loans Payable | $ 79,620 | $ 0 |
INSTALLMENT LOANS PAYABLE (Sche
INSTALLMENT LOANS PAYABLE (Schedule of Loans Payable) (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Installment Loans Payable | $ 117,981 | $ 57,799 |
ADVANCE RECEIPTS AND DEFERRED_3
ADVANCE RECEIPTS AND DEFERRED REVENUE (Narrative) (Details) - USD ($) | Jun. 09, 2014 | Dec. 31, 2014 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Deferred Revenue Arrangement [Line Items] | |||||
Deferred revenue | $ 471,150 | $ 23,750 | |||
WeedMD RX Inc. (''WMD'') [Member] | |||||
Deferred Revenue Arrangement [Line Items] | |||||
Common shares received in exchange for future consulting services and use of our intellectual property | 1,187,500 | ||||
Warrants received in exchange for future consulting services and use of our intellectual property | 3,000,000 | ||||
Fair value of securities recorded as deferred revenue | $ 893,750 | ||||
Deferred revenue recognized per month | 15,000 | ||||
Total deferred revenue recognized | $ 150,000 | $ 23,750 | $ 90,000 |
ADVANCE RECEIPTS AND DEFERRED_4
ADVANCE RECEIPTS AND DEFERRED REVENUE (Schedule of deferred revenue) (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue | $ 471,150 | $ 23,750 |
WeedMD [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue | 23,750 | |
Advance receipts - Sale of Finished Products [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue | $ 471,150 |
NOTES PAYABLE (Narrative) (Deta
NOTES PAYABLE (Narrative) (Details) - USD ($) | Aug. 12, 2019 | Aug. 08, 2019 | Aug. 06, 2019 | Jun. 07, 2019 | Feb. 11, 2019 | Jun. 25, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Oct. 11, 2019 | May 05, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||||||||||||
Proceeds from notes payable | $ 9,963,500 | $ 845,000 | ||||||||||||
Amortization of debt discount | 1,191,375 | 22,042 | ||||||||||||
Interest expense | 119,845 | 172,265 | ||||||||||||
Accrued expenses | $ 73,504 | $ 73,504 | $ 2,572 | |||||||||||
Percentage of common stock at conversion price | 70.00% | |||||||||||||
Shares issued upon conversion of notes payable | $ 2,128,913 | $ 1,141,701 | ||||||||||||
Repayments of notes payable | $ 3,345,750 | |||||||||||||
Aggregate loss | $ (91,444) | $ (1,423,329) | ||||||||||||
2018 Convertible Notes [Member] | Note Dated November 7, 2018 [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Aggregate loss | $ 2,128,913 | |||||||||||||
Common shares issued in debt conversion | 6,030,880 | |||||||||||||
Holder [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Proceeds from notes payable | $ 10,000,000 | $ 1,575,000 | ||||||||||||
Notes payable premium percentage | 70.00% | |||||||||||||
Holder [Member] | Transaction One [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Notes payable premium percentage | 10.00% | |||||||||||||
Holder [Member] | Transaction Three [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Notes payable premium percentage | 30.00% | |||||||||||||
Holder [Member] | Transaction Two [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Notes payable premium percentage | 20.00% | |||||||||||||
First Tranche [Member] | 2018 Convertible Notes [Member] | Note Dated November 7, 2018 [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest Rate | 5.00% | 5.00% | ||||||||||||
Convertible Notes Payable | $ 525,000 | $ 525,000 | ||||||||||||
Third Tranche [Member] | 2018 Convertible Notes [Member] | Note Dated November 7, 2018 [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Convertible Notes Payable | $ 525,000 | |||||||||||||
Sixth Tranche [Member] | 2018 Convertible Notes [Member] | Note Dated November 7, 2018 [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Convertible Notes Payable | $ 200,000 | |||||||||||||
Unaffiliated third party [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Proceeds from notes payable | $ 781,250 | $ 1,300,000 | $ 498,750 | |||||||||||
Repayments of notes payable | 588,525 | |||||||||||||
Increase in discount on note payable | $ 50,000 | $ 89,775 | ||||||||||||
Notes security | 50,000 pounds of industrial hemp biomass | 35,000 pounds of industrial hemp biomass | ||||||||||||
Unaffiliated third party [Member] | Every 30 days [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Repayments of notes payable | $ 100,000 | |||||||||||||
Unaffiliated third party [Member] | Note Date November 19, 2019 [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Repayments of notes payable | $ 390,625 | |||||||||||||
Unaffiliated third party [Member] | Note Date November 8, 2019 [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Repayments of notes payable | 781,250 | |||||||||||||
Unaffiliated third party [Member] | Transaction One [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Proceeds from notes payable | 125,000 | |||||||||||||
Repayments of notes payable | 147,500 | |||||||||||||
Increase in discount on note payable | $ 22,500 | |||||||||||||
Notes security | 3,500 pounds of industrial hemp biomass |
NOTES PAYABLE (Schedule of Conv
NOTES PAYABLE (Schedule of Convertible Promissory Notes Issued) (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2019 | Jun. 25, 2019 | May 05, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||||
Less unamortized discount | $ (375,542) | $ (62,917) | ||
Total of outstanding amount | $ 8,654,458 | 1,512,083 | ||
2019 Convertible Notes [Member] | Note Dated August 6, 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Issue Date | Aug. 6, 2019 | |||
Security | Secured | |||
Maturity Date | Nov. 4, 2019 | |||
Interest Rate | ||||
Total principal outstanding | $ 498,750 | |||
2019 Convertible Notes [Member] | Note Dated August 8, 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Issue Date | Aug. 8, 2019 | |||
Security | Secured | |||
Maturity Date | Nov. 6, 2019 | |||
Interest Rate | ||||
Total principal outstanding | $ 1,200,000 | |||
2019 Convertible Notes [Member] | Note Dated August 12, 2019 [Member] | Secured Debt One [Member] | ||||
Debt Instrument [Line Items] | ||||
Issue Date | Aug. 12, 2019 | |||
Security | Secured | |||
Maturity Date | Nov. 10, 2019 | |||
Interest Rate | ||||
Total principal outstanding | $ 781,250 | |||
2019 Convertible Notes [Member] | Note Dated August 12, 2019 [Member] | Secured Debt Two [Member] | ||||
Debt Instrument [Line Items] | ||||
Issue Date | Aug. 12, 2019 | |||
Security | Secured | |||
Maturity Date | Nov. 10, 2019 | |||
Interest Rate | ||||
Total principal outstanding | $ 125,000 | |||
2019 Convertible Notes [Member] | Note Dated August 8, 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Total principal outstanding | ||||
2019 Convertible Notes [Member] | Note Dated August 12, 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Total principal outstanding | ||||
First Tranche [Member] | 2018 Convertible Notes [Member] | Note Dated November 7, 2018 [Member] | ||||
Debt Instrument [Line Items] | ||||
Issue Date | Nov. 5, 2018 | |||
Security | Unsecured | |||
Maturity Date | May 4, 2019 | |||
Interest Rate | 5.00% | |||
Total principal outstanding | $ 525,000 | 525,000 | ||
First Tranche [Member] | 2019 Convertible Notes [Member] | Note Dated February 11, 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Issue Date | Feb. 11, 2019 | |||
Security | Unsecured | |||
Maturity Date | Aug. 10, 2019 | |||
Interest Rate | 5.00% | |||
Total principal outstanding | ||||
First Tranche [Member] | 2019 Convertible Notes [Member] | Note Dated June 7, 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Issue Date | Jun. 7, 2019 | |||
Security | Unsecured | |||
Maturity Date | Dec. 4, 2019 | |||
Interest Rate | 5.00% | |||
Total principal outstanding | $ 2,625,000 | |||
Second Tranche [Member] | 2018 Convertible Notes [Member] | Note Dated November 7, 2018 [Member] | ||||
Debt Instrument [Line Items] | ||||
Issue Date | Dec. 5, 2018 | |||
Security | Unsecured | |||
Maturity Date | Jun. 3, 2019 | |||
Interest Rate | 5.00% | |||
Total principal outstanding | 525,000 | |||
Second Tranche [Member] | 2019 Convertible Notes [Member] | Note Dated February 11, 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Issue Date | Apr. 8, 2019 | |||
Security | Unsecured | |||
Maturity Date | Oct. 6, 2019 | |||
Interest Rate | 5.00% | |||
Total principal outstanding | $ 650,000 | |||
Second Tranche [Member] | 2019 Convertible Notes [Member] | Note Dated June 7, 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Issue Date | Jun. 21, 2019 | |||
Security | Unsecured | |||
Maturity Date | Dec. 18, 2019 | |||
Interest Rate | 5.00% | |||
Total principal outstanding | $ 1,050,000 | |||
Third Tranche [Member] | 2018 Convertible Notes [Member] | Note Dated November 7, 2018 [Member] | ||||
Debt Instrument [Line Items] | ||||
Total principal outstanding | $ 525,000 | |||
Third Tranche [Member] | 2018 Convertible Notes [Member] | Note Dated November 7, 2018 [Member] | ||||
Debt Instrument [Line Items] | ||||
Total principal outstanding | 525,000 | |||
Third Tranche [Member] | 2018 Convertible Notes [Member] | Note Dated November 7, 2018 [Member] | ||||
Debt Instrument [Line Items] | ||||
Issue Date | Dec. 26, 2018 | |||
Security | Unsecured | |||
Maturity Date | Jun. 24, 2019 | |||
Interest Rate | 5.00% | |||
Total principal outstanding | ||||
Third Tranche [Member] | 2019 Convertible Notes [Member] | Note Dated June 7, 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Issue Date | Jul. 11, 2019 | |||
Security | Unsecured | |||
Maturity Date | Jan. 7, 2020 | |||
Interest Rate | 5.00% | |||
Total principal outstanding | $ 1,050,000 | |||
Fourth Tranche [Member] | 2019 Convertible Notes [Member] | Note Dated June 7, 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Issue Date | Jul. 19, 2019 | |||
Security | Unsecured | |||
Maturity Date | Jan. 15, 2020 | |||
Interest Rate | 5.00% | |||
Total principal outstanding | $ 525,000 | |||
Fifth Tranche [Member] | 2019 Convertible Notes [Member] | Note Dated June 7, 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Issue Date | Sep. 19, 2019 | |||
Security | Unsecured | |||
Maturity Date | Mar. 17, 2020 | |||
Interest Rate | 5.00% | |||
Total principal outstanding | $ 525,000 |
NOTES PAYABLE TO OFFICERS AND_3
NOTES PAYABLE TO OFFICERS AND DIRECTORS (Narrative) (Details) - USD ($) | 9 Months Ended | ||||||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Jul. 02, 2018 | Dec. 30, 2016 | Apr. 06, 2016 | Oct. 12, 2015 | |
Related Party Transaction [Line Items] | |||||||
Notes payable | $ 310,408 | ||||||
Interest expense | 119,845 | $ 172,265 | |||||
Officer and Director [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Interest expense | 99,541 | 57,305 | |||||
Interest on notes payables | 208,737 | $ 109,266 | |||||
Accrued wages payable to officers and directors [Member] | Notes Payable Other Payables [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Convertible note payable, related party | 1,180,963 | $ 1,155,436 | |||||
Earnie Blackmon [Member] | Notes Payable Other Payables [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Convertible note payable, related party | 834,492 | 840,807 | |||||
Tony Verzura [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt instrument, face amount | $ 25,000 | ||||||
Tony Verzura [Member] | Notes Payable Other Payables [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Convertible note payable, related party | 179,234 | 160,247 | |||||
Chadwick Ruby [Member] | Notes Payable Other Payables [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Convertible note payable, related party | $ 167,237 | $ 154,382 | |||||
Ernest Blackmon [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt instrument, face amount | $ 25,000 | ||||||
Debt instrument, interest rate | 15.00% | ||||||
JSJ Investments Inc. [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Convertible note payable, related party | $ 102,000 | ||||||
Debt instrument, interest rate | 12.00% | ||||||
Messrs. Verzura and Ruby [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt instrument, interest rate | 12.50% |
ARBITRATION AND LITIGATION RE_2
ARBITRATION AND LITIGATION RESERVE (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Jul. 16, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | |
Arbitration settlement reserve | $ 650,000 | $ 650,000 | |
Proceeds from proposed joint venture that was never formed | 650,000 | ||
Amount of refund | 650,000 | ||
Lawsuit damages claims | $ 16,500,000 | ||
Yocam [Member] | |||
Amount of awarded damages | $ 546,968 |
STOCKHOLDERS' EQUITY (Equity Tr
STOCKHOLDERS' EQUITY (Equity Transactions Narrative) (Details) - USD ($) | Jun. 11, 2019 | May 14, 2019 | May 08, 2019 | Mar. 11, 2019 | Dec. 31, 2018 | Aug. 31, 2018 | Aug. 20, 2018 | Feb. 14, 2018 | Mar. 21, 2019 | Mar. 20, 2019 | Jul. 18, 2017 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | May 15, 2019 |
Class of Stock [Line Items] | ||||||||||||||||||||||
Proceeds from shares issued | $ 320,471 | $ 23,530 | $ 75,999 | $ 76,798 | ||||||||||||||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | |||||||||||||||||
Aggregate intrinsic value of warrants outstanding and exercisable | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||||||||||||
Warrant issued | 75,006 | 100,008 | ||||||||||||||||||||
Proceeds from issuance of common stock | $ 344,000 | $ 118,583 | ||||||||||||||||||||
Stock issued during period for services | 28,751 | $ 34,751 | $ 34,751 | 49,002 | $ 50,318 | $ 56,043 | ||||||||||||||||
General and administrative | $ 2,817,667 | $ 1,152,822 | $ 6,219,742 | $ 3,218,804 | ||||||||||||||||||
Tony Verzura [Member] | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Cancellation of preferred stock. shares | 500 | |||||||||||||||||||||
Warrants [Member] | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Warrant issued | 75,006 | 100,008 | 132,669 | |||||||||||||||||||
Weighted-average remaining contractual life, outstanding | 2 years 7 months 13 days | 3 years | ||||||||||||||||||||
Weighted-average remaining contractual life, exercisable | 2 years 7 months 13 days | 3 years | ||||||||||||||||||||
Preferred Class A [Member] | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Preferred stock dividend per share | $ 0.05 | |||||||||||||||||||||
Preferred Stock, Voting Rights | Each preferred share is entitled to 15,000 votes on all matters submitted to the vote of our shareholders, is entitled to an annual dividend of $0.05 per share when, as, and if declared by our directors, and is convertible at any time, at the option of the holder of the preferred shares, into one share of our common stock. | |||||||||||||||||||||
Preferred Class A [Member] | Officer and Director [Member] | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Proceeds from shares issued | $ 2,200 | |||||||||||||||||||||
Number of shares issued during period | 2,000 | 2,000 | ||||||||||||||||||||
Common Stock [Member] | Accredited Investor [Member] | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Stock issued during period | $ 62,750 | $ 13,249 | $ 76,798 | |||||||||||||||||||
Number of shares issued during period | 100,000 | 600,000 | 500,000 | 52,288 | 100,000 | 27,359 | 65,440 | |||||||||||||||
Proceeds from issuance of common stock | $ 27,000 | $ 162,000 | $ 135,000 | $ 20,000 | $ 51,500 | $ 10,000 | $ 57,083 | |||||||||||||||
Loss recognized on issuance of common stock | $ 62,750 | $ 13,249 | $ 76,798 | |||||||||||||||||||
Common Stock [Member] | Employees [Member] | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Stock issued during period for services | $ 75,700 | |||||||||||||||||||||
Number of shares issued for services during period | 251,497 | |||||||||||||||||||||
General and administrative | $ 75,700 | |||||||||||||||||||||
Common Stock [Member] | Marketing Services [Member] | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Stock issued during period | $ 52,621 | |||||||||||||||||||||
Number of shares issued during period | 75,000 | |||||||||||||||||||||
Stock issued during period for services | $ 36,156 | |||||||||||||||||||||
Number of shares issued for services during period | 50,000 | |||||||||||||||||||||
Common Stock [Member] | Legal Services [Member] | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Stock issued during period | $ 38,430 | |||||||||||||||||||||
Number of shares issued during period | 90,000 | |||||||||||||||||||||
Stock issued during period for services | $ 223,996 | |||||||||||||||||||||
Number of shares issued for services during period | 310,000 | |||||||||||||||||||||
Common Stock [Member] | Employee Compensation [Member] | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Stock issued during period for services | $ 96,000 | $ 297,400 | ||||||||||||||||||||
Number of shares issued for services during period | 147,227 | 363,163 | ||||||||||||||||||||
General and administrative | $ 96,000 | |||||||||||||||||||||
Common Stock [Member] | Research and development consulting services [Member] | ||||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||||
Stock issued during period | $ 24,339 | |||||||||||||||||||||
Number of shares issued during period | 60,000 |
STOCKHOLDERS' EQUITY (Common St
STOCKHOLDERS' EQUITY (Common Stock Issued For Services, Warrants) (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Number of Shares | ||
Warrants outstanding, beginning of period | 1,309,033 | 1,209,025 |
Warrants issued to consultants | 75,006 | 100,008 |
Warrants exercised | ||
Expired | ||
Warrants outstanding, end of period | 1,384,039 | 1,309,033 |
Warrants exercisable, end of period | 1,384,039 | 1,309,033 |
Weighted Average Exercise Price | ||
Warrants outstanding, beginning of period (in dollars per share) | $ 0.27 | $ 0.21 |
Warrants issued to consultants (in dollars per share) | 0.43 | 0.89 |
Warrants Exercised (in dollars per share) | ||
Expired (in dollars per share) | ||
Warrants outstanding, end of period (in dollars per share) | 0.21 | 0.27 |
Warrants exercisable, end of period (in dollars per share) | $ 0.21 | $ 0.27 |
STOCKHOLDERS' EQUITY (Schedule
STOCKHOLDERS' EQUITY (Schedule of Assumptions on Date of Valuation Utilizing for Fair Value of Warrants) (Details) - $ / shares | Jan. 12, 2016 | Sep. 24, 2018 | Feb. 28, 2018 | Jun. 29, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Warrants [Member] | |||||||
Class of Stock [Line Items] | |||||||
Exercise price (in dollars per share) | $ 0.43 | $ 0.18 | $ 0.18 | ||||
Expected term (years) | 5 years | 5 years | 5 years | ||||
Expected dividends (as a percent) | 0.00% | 0.00% | 0.00% | ||||
Warrants [Member] | Minimum [Member] | |||||||
Class of Stock [Line Items] | |||||||
Stock price (in dollars per share) | $ 0.34 | $ 0.16 | $ 0.16 | ||||
Risk free interest rate (as a percent) | 1.76% | 1.01% | 1.01% | ||||
Expected volatility (as a percent) | 140.00% | 322.00% | 322.00% | ||||
Warrants [Member] | Maximum [Member] | |||||||
Class of Stock [Line Items] | |||||||
Stock price (in dollars per share) | $ 0.45 | $ 2.18 | $ 2.18 | ||||
Risk free interest rate (as a percent) | 2.52% | 1.37% | 1.37% | ||||
Expected volatility (as a percent) | 185.00% | 504.00% | 504.00% | ||||
Stock Options [Member] | |||||||
Class of Stock [Line Items] | |||||||
Stock price (in dollars per share) | $ 0.20 | $ 0.40 | $ 1.05 | $ 0.705 | |||
Exercise price (in dollars per share) | $ 0.20 | $ 0.43 | $ 1.08 | $ 0.705 | |||
Risk free interest rate (as a percent) | 1.98% | 2.80% | |||||
Expected term (years) | 10 years | 5 years | |||||
Expected volatility (as a percent) | 173.00% | 197.00% | |||||
Expected dividends (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% | |||
Stock Options [Member] | Minimum [Member] | |||||||
Class of Stock [Line Items] | |||||||
Risk free interest rate (as a percent) | 1.52% | 2.73% | |||||
Expected term (years) | 5 years | 5 years | |||||
Expected volatility (as a percent) | 137.00% | 427.00% | |||||
Stock Options [Member] | Maximum [Member] | |||||||
Class of Stock [Line Items] | |||||||
Risk free interest rate (as a percent) | 1.58% | 2.81% | |||||
Expected term (years) | 7 years 6 months | 10 years | |||||
Expected volatility (as a percent) | 176.00% | 505.00% |
STOCKHOLDERS' EQUITY (Schedul_2
STOCKHOLDERS' EQUITY (Schedule of stock option activity) (Details) - Stock Options [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Number of Shares | ||
Stock options outstanding, beginning of period | 26,837,300 | 6,637,500 |
Issued | 3,860,000 | 20,199,800 |
Exercised | ||
Expired | ||
Stock options outstanding, end of period | 30,707,300 | 26,837,300 |
Stock options exercisable, end of period | 28,828,300 | |
Weighted Average Exercise Price | ||
Stock options outstanding, beginning of period | $ 0.43 | $ 0.28 |
Issued | 0.43 | 0.57 |
Exercised | ||
Expired | ||
Stock options outstanding, end of period | 0.42 | 0.43 |
Stock options exercisable, end of period | $ 0.42 | |
Weighted Average Remaining Life (Years) | ||
Stock options outstanding, beginning of period | 9 years 2 months 12 days | 8 years 10 months 25 days |
Stock options Issued, end of period | 10 years | 9 years 3 months 19 days |
Stock options outstanding, end of period | 8 years 7 months 6 days | 9 years 2 months 12 days |
Stock options exercisable, end of period | 8 years 8 months 12 days |
STOCKHOLDERS' EQUITY (Stock Opt
STOCKHOLDERS' EQUITY (Stock Option Activity Narrative) (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 24, 2018 | Aug. 17, 2018 | Jul. 25, 2018 | Jun. 29, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | Feb. 28, 2018 | Jan. 12, 2016 | Jan. 12, 2015 | |
2014 Stock Incentive Plan [Member] | Mr. Ruby [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Awarded stock options | $ 980,000 | ||||||||
Common stock, per share value | $ 0.20 | ||||||||
Stock Options [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Awarded stock options | $ 3,860,000 | $ 1,050,000 | |||||||
Fair value of options | 1,367,000 | 9,711,400 | 6,146,000 | ||||||
Weighted-average remaining contractual life for stock options outstanding and exercisable | 8 years 8 months 12 days | ||||||||
Aggregate intrinsic value of options outstanding and exercisable | $ 0 | ||||||||
Option vested | 3,000,000 | 5,125,000 | |||||||
Exercise price | $ 1.08 | ||||||||
Stock options compensation | $ 1,037,000 | $ 9,104,999 | $ 5,785,348 | ||||||
Total price to exercise all outstanding stock options | $ 12,921,439 | ||||||||
Stock options to purchase common stock | 6,000,000 | ||||||||
Stock Options [Member] | Granted on January 1, 2015 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock options to purchase common stock | 600,000 | ||||||||
Stock Options [Member] | Granted on January 12, 2016 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock options to purchase common stock | 2,900,000 | ||||||||
Stock Options [Member] | Granted on July 27, 2017 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock options to purchase common stock | 57,500 | ||||||||
Stock Options [Member] | Granted on December 8, 2017 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock options to purchase common stock | 1,000,000 | ||||||||
Stock Options [Member] | Granted on March 28, 2018 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock options to purchase common stock | 6,000,000 | ||||||||
Stock Options [Member] | Granted on June 29, 2018 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock options to purchase common stock | 14,195,000 | ||||||||
Stock Options [Member] | Minimum [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price | $ 1.08 | $ 0.705 | |||||||
Stock Options [Member] | Minimum [Member] | Granted on January 1, 2015 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price | $ 0.70 | ||||||||
Stock Options [Member] | Minimum [Member] | Granted on January 12, 2016 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price | 0.56 | ||||||||
Stock Options [Member] | Minimum [Member] | Granted on July 27, 2017 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price | 0.92 | ||||||||
Stock Options [Member] | Minimum [Member] | Granted on December 8, 2017 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price | 0.875 | ||||||||
Stock Options [Member] | Minimum [Member] | Granted on March 28, 2018 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price | 0.58 | ||||||||
Stock Options [Member] | Minimum [Member] | Granted on June 29, 2018 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price | 0.58 | ||||||||
Stock Options [Member] | Maximum [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price | $ 0.58 | $ 0.58 | |||||||
Stock Options [Member] | Maximum [Member] | Granted on January 1, 2015 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price | 0.43 | ||||||||
Stock Options [Member] | Maximum [Member] | Granted on January 12, 2016 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price | 0.43 | ||||||||
Stock Options [Member] | Maximum [Member] | Granted on July 27, 2017 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price | 0.43 | ||||||||
Stock Options [Member] | Maximum [Member] | Granted on December 8, 2017 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price | 0.43 | ||||||||
Stock Options [Member] | Maximum [Member] | Granted on March 28, 2018 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price | 0.43 | ||||||||
Stock Options [Member] | Maximum [Member] | Granted on June 29, 2018 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price | $ 0.43 | ||||||||
Stock Options [Member] | Vesting through December 31, 2019 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Option vested | 875,000 | ||||||||
Stock Options [Member] | Vesting quarterly through July 1, 2022 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Option vested | 945,000 | ||||||||
Exercise price | $ 0.705 | ||||||||
Stock Options [Member] | Vesting quarterly through September 24, 2024 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Option vested | 860,000 | ||||||||
Exercise price | $ 0.43 | ||||||||
Stock Options [Member] | 2017 Equity Incentive Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Awarded stock options | $ 6,000,000 | ||||||||
Stock Options [Member] | 2018 Equity Incentive Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Awarded stock options | $ 14,195,000 | ||||||||
Option vested | 13,250,000 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | ||||
Options granted to officers, directors and employees | $ 1,435,811 | $ 179,018 | $ 1,661,846 | $ 14,689,497 |
Warrants and common stock issued for advisory board fees | 28,751 | 49,002 | 98,253 | 76,322 |
Common stock issued for services | 22,692 | 53,164 | 97,630 | 238,637 |
Common stock issued as compensation to employees | 70,000 | 42,600 | 70,000 | 233,700 |
Share-based compensation | $ 1,557,254 | $ 323,784 | $ 1,927,729 | $ 15,238,156 |
SIGNIFICANT CUSTOMER INFORMAT_3
SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY (Schedule of concentration of risk) (Details) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue [Member] | Customer A [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 18.00% | 14.00% |
Revenue [Member] | Customer B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 12.00% | 14.00% |
Revenue [Member] | Customer C [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 11.00% | 9.00% |
Accounts Receivable [Member] | Customer A [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 100.00% | 98.00% |
Accounts Receivable [Member] | Customer B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 2.00% | |
Accounts Receivable [Member] | Customer C [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | ||
Expenses [Member] | Vendor A [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 36.00% | 4.00% |
Expenses [Member] | Vendor B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 5.00% | 2.00% |
Expenses [Member] | Vendor C [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 3.00% | 2.00% |
Accounts Payable [Member] | Vendor A [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 37.00% | 25.00% |
Accounts Payable [Member] | Vendor B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 20.00% | 22.00% |
Accounts Payable [Member] | Vendor C [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 14.00% | 7.00% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) | Aug. 03, 2018 | Mar. 31, 2020 | Sep. 30, 2019 |
IND [Member] | |||
Long-term Purchase Commitment [Line Items] | |||
Committed expense | $ 300,000 | ||
PTI [Member] | |||
Long-term Purchase Commitment [Line Items] | |||
Percentage of ownership | 95.00% | ||
Prana [Member] | |||
Long-term Purchase Commitment [Line Items] | |||
Total commitment upon execution of research agreement | $ 700,000 | ||
Prana [Member] | Subsequent Event [Member] | |||
Long-term Purchase Commitment [Line Items] | |||
Total commitment upon execution of research agreement | $ 900,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | 1 Months Ended |
Oct. 30, 2019USD ($) | |
Subsequent Event [Member] | Cannabidiol (CBD) [Member] | |
Subsequent Event [Line Items] | |
Value of sales contract with customer, voided due to fire | $ 16,250,000 |