Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 31, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --12-31 | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 000-54258 | ||
Entity Registrant Name | UNRIVALED BRANDS, INC. | ||
Entity Tax Identification Number | 26-3062661 | ||
Entity Address, Address Line One | 3242 S.Halladay Street | ||
Entity Address, Address Line Two | Suite 202 | ||
Entity Address, City or Town | Santa Ana | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92705 | ||
City Area Code | 888 | ||
Local Phone Number | 909-5564 | ||
Title of 12(b) Security | None | ||
Trading Symbol | UNRV | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 65,823,407 | ||
Entity Common Stock, Shares Outstanding | 527,729,921 | ||
Documents Incorporated by Reference | Documents Incorporated by Reference None | ||
Entity Central Index Key | 0001451512 | ||
Amendment Flag | false | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Entity Incorporation, State or Country Code | NV |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | Marcum LLP |
Auditor Location | Costa Mesa, California |
Auditor Firm ID | 688 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 6,891 | $ 217 |
Accounts receivable, net | 4,677 | 352 |
Short term investments | 0 | 34,045 |
Inventory, net | 7,179 | 759 |
Prepaid expenses and other current assets | 1,272 | 214 |
Notes receivable | 750 | 0 |
Current assets of discontinued operations | 4,495 | 2,020 |
Total current assets | 25,264 | 37,607 |
Property, equipment and leasehold improvements, net | 23,728 | 12,630 |
Intangible assets, net | 129,637 | 7,714 |
Goodwill | 48,132 | 6,171 |
Other assets | 26,915 | 12,644 |
Investments | 163 | 330 |
Assets of discontinued operations | 17,984 | 23,198 |
TOTAL ASSETS | 271,824 | 100,294 |
Current liabilities: | ||
Accounts payable and other accrued expenses | 31,904 | 8,225 |
Short-term debt | 45,749 | 8,033 |
Income taxes payable | 7,969 | 0 |
Current liabilities of discontinued operations | 2,087 | 10,164 |
Total current liabilities | 87,708 | 26,422 |
Long-term liabilities: | ||
Long-term debt, net of discounts | 10,006 | 6,632 |
Deferred tax liabilities | 6,123 | 0 |
Long-term lease liabilities | 21,316 | 7,775 |
Long-term liabilities of discontinued operations | 184 | 335 |
Total long-term liabilities | 37,629 | 14,742 |
Total liabilities | 125,337 | 41,164 |
COMMITMENTS AND CONTINGENCIES (Note 18) | ||
STOCKHOLDERS’ EQUITY: | ||
990,000,000 Shares authorized as of December 31, 2021 and 2020; 498,546,295 shares issued and 496,237,883 shares outstanding as of December 31, 2021; 196,512,867 shares issued and 194,204,459 shares outstanding as of December 31, 2020. | 521 | 218 |
Additional paid-in capital | 392,930 | 275,060 |
Treasury stock | (808) | (808) |
Accumulated deficit | (250,015) | (219,803) |
Total Unrivaled Brands, Inc. stockholders’ equity | 142,628 | 54,667 |
Non-controlling interest | 3,859 | 4,463 |
Total stockholders’ equity | 146,487 | 59,130 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 271,824 | $ 100,294 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 990,000,000 | 990,000,000 |
Common stock, shares, issued (in shares) | 498,546,295 | 196,512,867 |
Common stock, shares, outstanding (in shares) | 496,237,883 | 194,204,459 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Total revenues | $ 47,673 | $ 6,161 |
Cost of goods sold | 35,706 | 3,518 |
Gross profit | 11,967 | 2,643 |
Selling, general and administrative expenses | 48,257 | 19,319 |
Impairment of assets | 6,171 | 19,910 |
Gain on sale of assets | (3,133) | 0 |
Loss from operations | (39,328) | (36,586) |
Other income / (expense) | ||
Loss on extinguishment of debt | (5,976) | 0 |
Interest expense, net | (1,776) | (1,394) |
Unrealized gain on investments | 0 | 29,045 |
Gain on investments | 5,337 | 0 |
Other income / (loss) | (433) | 929 |
Total other income / (expense) | (2,848) | 28,580 |
Loss from continuing operations, before provision for income taxes | (42,176) | (8,006) |
Provision for income taxes | (885) | 0 |
Net loss from continuing operations | (43,061) | (8,006) |
Income / (loss) from discontinued operations | 12,103 | (22,865) |
Provision for income taxes for discontinued operations | (917) | 0 |
Net loss from discontinued operations | 11,186 | (22,865) |
NET LOSS | (31,875) | (30,871) |
Less: Income / (Loss) attributable to non-controlling interest from discontinued operations | (604) | (754) |
NET LOSS ATTRIBUTABLE TO UNRIVALED BRANDS, INC. | $ (31,271) | $ (30,117) |
Loss from continuing operations per common share attributable to Unrivaled Brands, Inc. common stockholders – diluted (in dollars per share) | $ (0.11) | $ (0.04) |
Loss from continuing operations per common share attributable to Unrivaled Brands, Inc. common stockholders – basic (in dollars per share) | (0.11) | (0.04) |
Net loss per common share attributable to Unrivaled Brands, Inc. common stockholders – basic (in dollars per share) | (0.08) | (0.16) |
Net loss per common share attributable to Unrivaled Brands, Inc. common stockholders – diluted (in dollars per share) | $ (0.08) | $ (0.16) |
Weighted-Average Number of Common Shares Outstanding – Basic (in shares) | 376,625,320 | 191,978,187 |
Weighted-Average Number of Common Shares Outstanding – Diluted (in shares) | 376,625,320 | 191,978,187 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | People’s California | Silverstreak | Umbrla, Inc. | Cumulative Effect, Period of Adoption, Adjustment | Series A Convertible Preferred Stock | Common Stock | Common StockPeople’s California | Common StockSilverstreak | Common StockUmbrla, Inc. | Additional Paid-In Capital | Additional Paid-In CapitalPeople’s California | Additional Paid-In CapitalSilverstreak | Additional Paid-In CapitalUmbrla, Inc. | Additional Paid-In CapitalCumulative Effect, Period of Adoption, Adjustment | Treasury Stock | Accumulated Deficit | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment | Non- Controlling Interest |
Beginning balance (in shares) at Dec. 31, 2019 | 8 | 118,004,978 | 2,308,412 | ||||||||||||||||
Beginning balance at Dec. 31, 2019 | $ 75,326 | $ 120 | $ 260,516 | $ (808) | $ (189,686) | $ 5,184 | |||||||||||||
Stock compensation - employee (in shares) | 3,894,544 | ||||||||||||||||||
Stock compensation - employees | 519 | $ 4 | 515 | ||||||||||||||||
Stock compensation - directors (in shares) | 1,359,090 | ||||||||||||||||||
Stock compensation - directors | 104 | $ 1 | 103 | ||||||||||||||||
Stock compensation - services expense (in shares) | 1,159,615 | ||||||||||||||||||
Stock compensation - services expense | 152 | $ 1 | 151 | ||||||||||||||||
Stock cancellation (in shares) | (21,924,177) | ||||||||||||||||||
Debt conversion - common stock (in shares) | 31,086,209 | ||||||||||||||||||
Debt conversion - common stock | 2,444 | $ 31 | 2,413 | ||||||||||||||||
Stock issued for cash (in shares) | 2,470,173 | ||||||||||||||||||
Stock issued for cash | 250 | $ 2 | 248 | ||||||||||||||||
Stock option expense (in shares) | 58,154,027 | ||||||||||||||||||
Stock option expense | 9,304 | $ 58 | 9,246 | ||||||||||||||||
Warrants issued | 1,868 | 1,868 | |||||||||||||||||
Contribution (distribution) to non-controlling interest | 33 | 33 | |||||||||||||||||
Net income (loss) attributable to non-controlling interest | (754) | (754) | |||||||||||||||||
Net loss attributable to Unrivaled Brands, Inc. | (30,117) | (30,117) | |||||||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 8 | 194,204,459 | 2,308,412 | ||||||||||||||||
Ending balance at Dec. 31, 2020 | 59,130 | $ (12) | $ 218 | 275,060 | $ (1,071) | $ (808) | (219,803) | $ 1,059 | 4,463 | ||||||||||
Stock compensation - employee (in shares) | 250,000 | ||||||||||||||||||
Stock compensation - employees | 67 | 67 | |||||||||||||||||
Stock compensation - directors (in shares) | 1,917,837 | ||||||||||||||||||
Stock compensation - directors | 495 | $ 2 | 493 | ||||||||||||||||
Stock compensation - services expense (in shares) | 4,556,603 | ||||||||||||||||||
Stock compensation - services expense | 1,079 | $ 5 | 1,074 | ||||||||||||||||
Debt conversion - common stock (in shares) | 24,939,780 | ||||||||||||||||||
Debt conversion - common stock | 5,056 | $ 25 | 5,031 | ||||||||||||||||
Stock issued for cash (in shares) | 9,677,419 | ||||||||||||||||||
Stock issued for cash | 3,756 | $ 10 | 3,746 | ||||||||||||||||
Stock option exercise (in shares) | 3,381,878 | ||||||||||||||||||
Stock option exercises | 5 | $ 3 | 2 | ||||||||||||||||
Stock option expense | 2,415 | 2,415 | |||||||||||||||||
Warrants issued | 5,978 | 5,978 | |||||||||||||||||
Series A (in shares) | 16,485,714 | 8 | |||||||||||||||||
Series A | 5,891 | $ 17 | 5,874 | ||||||||||||||||
Stock issued for acquisition (in shares) | 40,000,000 | 9,051,412 | 191,772,781 | ||||||||||||||||
Stock issued for acquisition (in shares) | $ 12,180 | $ 2,500 | $ 79,822 | $ 40 | $ 9 | $ 192 | $ 12,140 | $ 2,491 | $ 79,630 | ||||||||||
Net income (loss) attributable to non-controlling interest | (604) | (604) | |||||||||||||||||
Net loss attributable to Unrivaled Brands, Inc. | (31,271) | (31,271) | |||||||||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 8 | 496,237,883 | 2,308,420 | ||||||||||||||||
Ending balance at Dec. 31, 2021 | $ 146,487 | $ 521 | $ 392,930 | $ (808) | $ (250,015) | $ 3,859 | |||||||||||||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2020-06 [Member] |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss attributable to Unrivaled Brands, Inc. | $ (31,875) | $ (30,871) |
Less: Income from discontinued operations | 11,186 | (22,865) |
Net loss from continuing operations | (43,061) | (8,006) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Deferred tax expense | 835 | 0 |
Bad debt expense | (3,097) | 650 |
Depreciation and amortization | 6,198 | 3,920 |
Impairment loss | 6,171 | 19,910 |
Gain on sale of assets | (3,133) | 0 |
Discount on issuance of common stock | 756 | 0 |
Gain on debt forgiveness | (86) | 0 |
Gain on sale of investments | (5,337) | 0 |
Amortization of operating lease right of use asset | 3,193 | 857 |
Loss (gain) on extinguishment of debt | 5,976 | 0 |
Non-cash interest expense | 1,977 | 1,004 |
Non-cash portion of severance expense | 7,990 | 0 |
Stock-based compensation | 4,056 | 2,175 |
Unrealized gain on investments | 0 | (29,045) |
Other | 0 | 841 |
Change in operating assets and liabilities: | ||
Accounts receivable | 3,029 | 227 |
Inventory | 1,832 | 3,575 |
Prepaid expenses and other current assets | 579 | 461 |
Other assets | 684 | (524) |
Accounts payable and accrued expenses | (2,636) | (566) |
Operating lease liabilities | (1,083) | (1,093) |
Net cash provided by / (used in) operating activities - continuing operations | (15,160) | (5,614) |
Net cash provided by / (used in) operating activities - discontinued operations | (2,586) | (9,223) |
NET CASH PROVIDED BY / (USED IN) OPERATING ACTIVITIES | (17,745) | (14,837) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Sale of property, equipment and leasehold improvements | 15,264 | 20,772 |
Insurance proceeds for damaged assets | 0 | 452 |
Issuance of note receivable | 0 | (250) |
Cash from acquisitions | 2,309 | 57 |
Cash paid for acquisitions | (24,397) | 0 |
Proceeds from sales of investments | 39,382 | 0 |
Proceeds from sales of assets | 0 | 0 |
Net cash provided by / (used in) investing activities - continuing operations | 32,558 | 21,031 |
Net cash provided by / (used in) investing activities - discontinued operations | (11,768) | (9,228) |
NET CASH PROVIDED BY / (USED IN) INVESTING ACTIVITIES | 20,790 | 11,803 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of notes payable | 8,500 | 2,954 |
Payments of debt principal | (6,774) | (507) |
Proceeds from issuance of common stock | 3,005 | 250 |
Purchase of treasury stock | (228) | 0 |
Cash contribution from non-controlling interest | 0 | 152 |
Cash distribution to non-controlling interest | 0 | (145) |
Other | 0 | (8) |
Net cash provided by / (used in) financing activities - continuing operations | 4,502 | 2,696 |
Net cash provided by / (used in) financing activities - discontinued operations | 0 | 0 |
NET CASH PROVIDED BY / (USED IN) FINANCING ACTIVITIES | 4,502 | 2,696 |
NET CHANGE IN CASH | 7,547 | (338) |
Cash at beginning of period | 217 | 1,226 |
Cash reclassified to discontinued operations | (873) | (671) |
CASH AT END OF PERIOD | 6,891 | 217 |
SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITIES: | ||
Cash paid for interest | 633 | 1,177 |
SUPPLEMENTAL DISCLOSURE FOR NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Non-cash Capex | 2,986 | 0 |
Stock issued for the acquisition of OneQor | 0 | 9,305 |
Promissory note issued for severance | 2,100 | 0 |
Stock issued for prior year bonuses | 0 | 469 |
Stock options exercised on a net share basis | 3 | 0 |
Fixed assets in accounts payable | 100 | 484 |
Non-cash consideration for acquisition of Umbrla Inc | 79,032 | 0 |
Non-cash consideration for acquisition of People's, including acquisition liabilities outstanding | 58,749 | 0 |
Non-cash consideration for acquisition of Silverstreak, including acquisition liabilities outstanding | 8,500 | 0 |
Debt principal and interest converted to common stock | $ 5,056 | $ 2,444 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS Organization References in this document to “the Company”, “Unrivaled”, “we”, “us”, or “our” are intended to mean Unrivaled Brands, Inc., individually, or as the context requires, collectively with its subsidiaries on a consolidated basis. Effective July 7, 2021 the Company changed its corporate name from “Terra Tech Corp.” to “Unrivaled Brands, Inc.” in connection with the Company’s acquisition of UMBRLA, Inc (“UMBRLA”). Unrivaled is a holding company with the following subsidiaries: • 620 Dyer LLC, a California corporation (“Dyer”); • 1815 Carnegie LLC, a California limited liability company (“Carnegie”); • Black Oak Gallery, a California corporation (“Black Oak”); • Blüm San Leandro, a California corporation (“Blüm San Leandro”); • MediFarm, LLC, a Nevada limited liability company (“MediFarm”); • MediFarm I, LLC, a Nevada limited liability company (“MediFarm I”); • 121 North Fourth Street, LLC, a Nevada limited liability company ("121 North Fourth") • OneQor Technologies, Inc., a Delaware corporation ("OneQor") • UMBRLA, Inc., a Nevada corporation ("UMBRLA") • Halladay Holding, LLC (“Halladay”) • People's First Choice, LLC, a California limited liability company ("People's") • Silverstreak Solutions, Inc, a California corporation ("Silverstreak") |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and with the instructions to Securities Exchange Commission (“SEC”) Form 10-K and Regulation S-X and reflect the accounts and operations of the Company and those of our subsidiaries in which we have a controlling financial interest. In accordance with the provisions of FASB or ASC 810, “Consolidation” , we consolidate any variable interest entity (“VIE”), of which we are the primary beneficiary. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. ASC 810 requires a variable interest holder to consolidate a VIE if that party has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. We do not consolidate a VIE in which we have a majority ownership interest when we are not considered the primary beneficiary. We evaluate our relationships with all the VIEs on an ongoing basis to reassess if we continue to be the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of operations and cash flows for the years ended December 31, 2021 and 2020 have been included. Going Concern The accompanying financial statements have been prepared assuming that we will continue as a going concern. In an effort to achieve liquidity that would be sufficient to meet all of our commitments, we have undertaken a number of actions, including minimizing capital expenditures and reducing recurring expenses. However, we believe that even after taking these actions, we will not have sufficient liquidity to satisfy all of our future financial obligations. The risks and uncertainties surrounding our ability to raise capital, our limited capital resources, and the weak industry conditions impacting our business raise substantial doubt as to our ability to continue as a going concern. See Note 23 – ” Going Concern ” of the Notes to Consolidated Financial Statements for additional information. Non-Controlling Interest Non-controlling interest is shown as a component of stockholders’ equity on the consolidated balance sheets and the share of income (loss) attributable to non-controlling interest is shown as a component of income (loss) in the consolidated statements of operations. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of total net revenue and expenses in the reporting periods. The Company regularly evaluates estimates and assumptions related to allowances for doubtful accounts, sales returns, inventory valuation, stock-based compensation expense, goodwill and purchased intangible asset valuations, investments, deferred income tax asset valuation allowances, uncertain tax positions, and litigation and other loss contingencies. These estimates and assumptions are based on current facts, historical experience and various other factors that the Company believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue, costs and expenses that are not readily apparent from other sources. The actual results the Company experiences may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications did not affect net loss, revenues and stockholders’ equity. See Note 19, “Discontinued Operations” for further discussion regarding discontinued operations. Trade and other Receivables The Company extends non-interest bearing trade credit to its customers in the ordinary course of business which is not collateralized. Accounts receivable are shown on the face of the consolidated balance sheets, net of an allowance for doubtful accounts. The Company analyzes the aging of accounts receivable, historical bad debts, customer creditworthiness and current economic trends, in determining the allowance for doubtful accounts. The Company does not accrue interest receivable on past due accounts receivable. The reserve for doubtful accounts was $3.68 million and nil as of December 31, 2021 and 2020, respectively. Investments Investments in unconsolidated affiliates are accounted for under the cost or the equity method of accounting, as appropriate. The Company accounts for investments in limited partnerships or limited liability corporations, whereby the Company owns a minimum of 5% of the investee's outstanding voting stock, under the equity method of accounting. These investments are recorded at the amount of the Company’s investment and adjusted each period for the Company’s share of the investee’s income or loss, and dividends paid. As investments accounted for under the cost method do not have readily determinable fair values, the Company only estimates fair value if there are identified events or changes in circumstances that could have a significant adverse effect on the investment’s fair value. Publicly held equity securities are recorded at fair value with unrealized gains or losses resulting from changes in fair value reflected as unrealized gains or losses on equity securities in our consolidated statements of operations. Inventory Inventory is stated at the lower of cost or net realizable value, with cost being determined on the first-in, first-out (“FIFO”) method of accounting. The Company periodically reviews physical inventory for excess, obsolete, and potentially impaired items and reserves. The reserve estimate for excess and obsolete inventory is based on expected future use. The reserve estimates have historically been consistent with actual experience as evidenced by actual sale or disposal of the goods. Prepaid Expenses and Other Current Assets Prepaid expenses consist of various payments that the Company has made in advance for goods or services to be received in the future. These prepaid expenses include advertising, insurance, and service or other contracts requiring up-front payments. Property, Equipment and Leasehold Improvements, Net Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The approximate useful lives for depreciation of our property, equipment and leasehold improvements are as follows: thirty-two years for buildings; three to eight years for furniture and equipment; three to five years for computer and software; five years for vehicles and the shorter of the estimated useful life or the underlying lease term for leasehold improvements. Repairs and maintenance expenditures that do not extend the useful lives of related assets are expensed as incurred. Expenditures for major renewals and improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. The Company continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, “Property, Plant, and Equipment.” When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. See Note 7 , “Property, Equipment and Leasehold Improvements, Net” for further information. Intangible Assets Intangible assets continue to be subject to amortization, and any impairment is determined in accordance with ASC 360, “Property, Plant, and Equipment,” intangible assets are stated at historical cost and amortized over their estimated useful lives. The Company uses a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. The approximate useful lives for amortization of our intangible assets are as follows: Customer Relationships 3 to 5 Years Trademarks 2 to 8 Years Dispensary Licenses 14 years The Company reviews intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset (asset group), the Company will write the carrying value down to the fair value in the period identified. Intangible assets that have indefinite useful lives are tested annually for impairment, or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount of the asset group exceeds its fair value. Goodwill Goodwill is measured as the excess of consideration transferred and the net of the acquisition date fair value of assets acquired, and liabilities assumed in a business acquisition. In accordance with ASC 350, “Intangibles-Goodwill and Other,” goodwill and other intangible assets with indefinite lives are no longer subject to amortization but are tested for impairment annually or whenever events or changes in circumstances indicate that the asset might be impaired. The Company reviews the goodwill allocated to each of our reporting units for possible impairment annually as of September 30 and whenever events or changes in circumstances indicate carrying amount may not be recoverable. In the impairment test, the Company measures the recoverability of goodwill by comparing a reporting unit’s carrying amount, including goodwill, to the estimated fair value of the reporting unit. The carrying amount of each reporting unit is determined based upon the assignment of our assets and liabilities, including existing goodwill and other intangible assets, to the identified reporting units. Where an acquisition benefits only one reporting unit, the Company allocates, as of the acquisition date, all goodwill for that acquisition to the reporting unit that will benefit. Where the Company has had an acquisition that benefited more than one reporting unit, The Company has assigned the goodwill to our reporting units as of the acquisition date such that the goodwill assigned to a reporting unit is the excess of the fair value of the acquired business, or portion thereof, to be included in that reporting unit over the fair value of the individual assets acquired and liabilities assumed that are assigned to the reporting unit. If the carrying amount of a reporting unit is in excess or its fair value, the Company recognizes an impairment charge equal to the amount in excess. Notes Receivable The Company reviews all outstanding notes receivable for collectability as information becomes available pertaining to the Company’s inability to collect. An allowance for notes receivable is recorded for the likelihood of non-collectability. The Company accrues interest on notes receivable based net realizable value. The allowance for uncollectible notes was nil as of December 31, 2021 and 2020, respectively. Assets Held for Sale and Discontinued Operations Assets held for sale represent furniture, equipment, and leasehold improvements less accumulated depreciation as well as any other assets that are held for sale in conjunction with the sale of a business. The Company records assets held for sale in accordance with ASC 360 , “Property, Plant, and Equipment,” at the lower of carrying value or fair value less costs to sell. Fair value is based on the estimated proceeds from the sale of the facility utilizing recent purchase offers, market comparables and/or data. Our estimate as to fair value is regularly reviewed and subject to changes in the commercial real estate markets and our continuing evaluation as to the facility’s acceptable sale price. The reclassification takes place when the assets are available for immediate sale and the sale is highly probable. These conditions are usually met from the date on which a letter of intent or agreement to sell is ready for signing. The Company follows the guidance within ASC 205, “Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity” when assets held for sale represent a strategic shift in the Company’s operations and financial results. Fair Value of Financial Instruments, Non-Financial Instruments and Derivative Assets The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 –Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value. The Company has not elected the fair value option for any eligible financial instruments. The Company records its investment in Edible Garden AG, Inc. at fair value. On March 30, 2020, Edible Garden Corp., a wholly-owned subsidiary of Terra Tech Corp. (the "Company"), entered into and closed an Asset Purchase Agreement (the "Purchase Agreement") with Edible Garden AG Incorporated ("Edible Garden", or the "Purchaser"), pursuant to which Edible Garden sold and the Purchaser purchased substantially all of the assets of Edible Garden (the "Business"). The consideration paid for the Business included two option agreements to purchase up to a 20% interest in the Purchaser for a nominal fee. The first option gave the Company the right to purchase a 10% interest in the Purchaser for one dollar at any time between the one and five-year anniversary of the transaction, or at any time should a change in control event or public offering occur. The second option gave the Company the right to purchase an additional 10% interest in the Purchaser for one dollar at any point prior to the five-year anniversary of the transaction. During the year ended December 31, 2021, the Company exercised its options and acquired 5,000,000 shares of Edible Garden AG, Inc.'s common stock for two dollars. During 2021, the Company concluded that the investment in Edible Garden was impaired and recorded an impairment charge of $0.33 million, which is included in "Net Income from Discontinued Operations" for the year ended December 31, 2021. The following tables present the Company’s financial instruments that are measured and recorded at fair value on the Company’s balance sheets on a recurring basis, and their level within the fair value hierarchy as of December 31, 2020: Investments as of December 30, 2020: Amount Level 1 Level 2 Level 3 Warrants to acquire shares of HydroFarm $ 10,195 $ — $ 10,195 $ — Shares of HydroFarm 23,850 — 23,850 — Option to acquire common shares of Edible Garden: 330 — — 330 Total $ 34,375 $ — $ 34,045 $ 330 Business Combinations The Company accounts for its business acquisitions in accordance with ASC 805-10, “ Business Combinations. ” The Company allocates the total cost of the acquisition to the underlying net assets based on their respective estimated fair values. As part of this allocation process, the Company identifies and attributes values and estimated lives to the intangible assets acquired. These determinations involve significant estimates and assumptions regarding multiple, highly subjective variables, including those with respect to future cash flows, discount rates, asset lives, and the use of different valuation models, and therefore require considerable judgment. The Company’s estimates and assumptions are based, in part, on the availability of listed market prices or other transparent market data. These determinations affect the amount of amortization expense recognized in future periods. The Company bases its fair value estimates on assumptions it believes to be reasonable but are inherently uncertain. Revenue Recognition and Performance Obligations Revenue from our retail dispensaries is recorded at the time customers take possession of the product. Revenue from our retail dispensaries is recognized net of discounts, promotional adjustments and returns. We collect taxes on certain revenue transactions to be remitted to governmental authorities, which may include sales, excise and local taxes. These taxes are not included in the transaction price and are, therefore, excluded from revenue. Upon purchase, the Company has no further performance obligations and collection is assured as sales are paid for at time of purchase. The Company recognizes revenue from cultivation, manufacturing and distribution product sales when our customers obtain control of our products. Revenue is recorded when the customer is determined to have taken control of the product. This determination is based on the customer specific terms of the arrangement and gives consideration to factors including, but not limited to, whether the customer has an unconditional obligation to pay, whether a time period or event is specified in the arrangement and whether the Company can mandate the return or transfer of the products. Revenue is recorded net of taxes collected from customers that are remitted to governmental authorities with collected taxes recorded as current liabilities until remitted to the relevant government authority. Disaggregation of Revenue The table below includes revenue disaggregated by geographic location for the years ended December 31, 2021 and 2020: (in thousands) 2021 2020 California $ 42,120 $ 6,161 Oregon 5,553 — Total $ 47,673 $ 6,161 Contract Balances Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC Topic 606. Contract Estimates and Judgments The Company’s revenues accounted for under ASC Topic 606, generally, do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The sales prices are generally fixed at the point of sale and all consideration from contracts is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration. Cost of Goods Sold Cost of goods sold includes the costs directly attributable to product sales and includes amounts paid for finished goods, such as flower, edibles, and concentrates, as well as packaging and delivery costs. It also includes the labor and overhead costs incurred in cultivating and producing cannabis flower and cannabis-derived products. Overhead expenses include allocations of rent, administrative salaries, utilities, and related costs. Advertising Expenses The Company expenses advertising costs as incurred in accordance with ASC 720-35, “Other Expenses – Advertising Cost.” Advertising expenses from continuing operations totaled $1.29 million and $0.19 million in the years ended December 31, 2021 and 2020, respectively. Stock-Based Compensation The Company accounts for its stock-based awards in accordance with ASC Subtopic 718-10, “Compensation – Stock Compensation”, which requires fair value measurement on the grant date and recognition of compensation expense for all stock-based payment awards made to employees and directors, including restricted stock awards. For stock options, the Company estimates the fair value using a closed option valuation (Black-Scholes) model. The fair value of restricted stock awards is based upon the quoted market price of the common shares on the date of grant. The fair value is then expensed over the requisite service periods of the awards, net of estimated forfeitures, which is generally the performance period and the related amount is recognized in the consolidated statements of operations. The Black-Scholes option-pricing model requires the input of certain assumptions that require the Company’s judgment, including the expected term and the expected stock price volatility of the underlying stock. The assumptions used in calculating the fair value of stock-based compensation represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change resulting in the use of different assumptions, stock-based compensation expense could be materially different in the future. The Company accounts for forfeitures of stock-based awards as they occur. Income Taxes The provision for income taxes is determined in accordance with ASC 740, “Income Taxes” . The Company files a consolidated United States federal income tax return. The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. At December 31, 2020, such net operating losses were offset entirely by a valuation allowance. At December 31, 2021, we have released the valuation allowance due to our net deferred tax liability position. The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50.0% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations. Loss Per Common Share In accordance with the provisions of ASC 260, “Earnings Per Share,” net loss per share is computed by dividing net loss by the weighted-average shares of common stock outstanding during the period. During a loss period, the effect of the potential exercise of stock options, warrants, convertible preferred stock, and convertible debt are not considered in the diluted loss per share calculation since the effect would be anti-dilutive. The results of operations were a net loss for the years ended December 31, 2021 and 2020. Therefore, the basic and diluted weighted-average shares of common stock outstanding were the same for all years presented. Potentially dilutive securities that are not included in the calculation of diluted net loss per share because their effect is anti-dilutive are as follows (in common equivalent shares): Year Ended December 31, 2021 2020 Common stock warrants 30,677,637 1,076,555 Common stock options 88,251,380 17,492,830 118,929,017 18,569,385 Recently Adopted Accounting Standard s FASB ASU No. 2020-06 “ Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ” – Issued in August 2020, ASU 2020-06 simplifies the accounting for convertible instruments by eliminating the requirement to separate embedded conversion features from the host contract when the conversion features are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital. By removing the separation model, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost and the interest rate on convertible debt instruments will typically be closer to the coupon interest rate when applying the guidance in Topic 835, Interest. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those years. The Company adopted ASU 2020-06 as of January 1, 2021, utilizing the modified retrospective method of adoption. As a result of adoption of the new standard, previously recognized beneficial conversion features for convertible debt instruments outstanding as of January 1, 2021 were removed from additional paid-in capital and the debt discount. A cumulative impact adjustment was recorded to account for a reduction in interest expense due to a decrease in the discount, which is recognized as interest expense upon conversion of the convertible notes. The January 1, 2021 cumulative effect adjustment to the Company’s financial position was as follows (in thousands): As Reported Cumulative Effect Adjustment As Reported December 31, 2020 January 1, 2021 Additional Paid-In Capital $ 275,060 $ 1,071 $ 276,131 Accumulated Deficit $ 219,803 $ (1,059) $ 218,744 Debt Discount $ 50 $ (12) $ 38 FASB ASU No. 2019-12 , “Simplifying the Accounting for Income Taxes” - Issued in December 2020, ASU 2019-12 eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company adopted the standard January 1, 2021. Adoption had no material impact on the Company’s financial position or results of operations.. FASB Accounting Standards Update (“ASU”) No. 2016-13 , “Measurement of Credit Losses on Financial Instruments” - Issued in June 2016 , ASU 2016-13 replaces the “incurred loss” credit losses framework with a new accounting standard that requires management's measurement of the allowance for credit losses to be based on a broader range of reasonable and supportable information for lifetime credit loss estimates. The Company adopted the standard January 1, 2020. Adoption had no material impact on the Company’s financial position or results of operations. |
CONCENTRATIONS OF BUSINESS AND
CONCENTRATIONS OF BUSINESS AND CREDIT RISK | 12 Months Ended |
Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF BUSINESS AND CREDIT RISK | CONCENTRATIONS OF BUSINESS AND CREDIT RISK The Company maintains cash balances in several financial institutions that are insured by either the Federal Deposit Insurance Corporation or the National Credit Union Association up to certain federal limitations. At times, the Company’s cash balance exceeds these federal limitations and it maintains significant cash on hand at certain of its locations. The Company has not historically experienced any material loss from carrying cash on hand. The amount in excess of insured limitations was $5.42 million and $0.06 million as of December 31, 2021 and 2020, respectively. The Company provides credit in the normal course of business to its customers. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts based on factors surrounding the credit risk of specific customers, historical trends, and other information. There were no customers that comprised more than 10.0% of the Company's revenue for the years ended December 31, 2021 and 2020. The Company sources cannabis products for retail, cultivation and production from various vendors. However, as a result of the new regulations in the State of California, the Company’s California retail, cultivation and production operations must use vendors licensed by the State effective January 1, 2018. As a result, we are dependent upon the licensed vendors in California to supply products as of that date. If the Company is unable to enter into a relationship with sufficient members of properly licensed vendors, the Company’s sales may be impacted. During the years ended December 31, 2021 and 2020, we did not have any concentration of vendors for inventory purchases. However, this may change depending on the number of vendors who receive appropriate licenses to operate in the State of California. |
VARIABLE INTEREST ENTITY ARRANG
VARIABLE INTEREST ENTITY ARRANGEMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Investments [Abstract] | |
VARIABLE INTEREST ENTITY ARRANGEMENTS | VARIABLE INTEREST ENTITY ARRANGEMENTS NuLeaf, Inc. On October 26, 2017, the Company entered into operating agreements with NuLeaf, Inc. and formed NuLeaf Sparks Cultivation, LLC and NuLeaf Reno Production, LLC (collectively “NuLeaf”) to build and operate cultivation and production facilities of cannabis products in Nevada. The agreements were subject to approval by the State of Nevada, the City of Sparks and the City of Reno in Nevada. Under the terms of the agreements, the Company remitted to NuLeaf an upfront investment of $4.50 million in the form of convertible loans bearing an interest rate of 6% per annum. On June 28, 2018, the Company received approval from the State of Nevada. The remaining required approvals from local authorities were received in July 2018. As a result, the notes receivable balance was converted into a 50% ownership interest in NuLeaf. The investment in NuLeaf was initially recorded at cost and accounted for using the equity method. In February 2019, we amended and restated the NuLeaf agreements and obtained control of the operations of NuLeaf. The Company has determined these entities are variable interest entities in which the Company is the primary beneficiary by reference to the power and benefits criterion under ASC 810, “Consolidation.” The provisions within the amended agreement granted the Company the power to manage and make decisions that affect the operation of these entities. As the primary beneficiary of NuLeaf Sparks Cultivation, LLC and NuLeaf Reno Production, LLC, the Company began consolidating the accounts and operations of these entities on March 1, 2019. All intercompany transactions are eliminated in the consolidated financial statements. Effective March 1, 2019, we remeasured our equity method investment in NuLeaf to fair value and consolidated the results of NuLeaf within our consolidated financial statements. In November 2021, Nuleaf entered a definitive agreement with Jushi Holdings Inc to acquire NuLeaf, Inc. together with its subsidiaries and affiliated companies with an expected closing in 2022. Nuleaf operations are considered held for sale as of December 31, 2021 and are therefore included in Discontinued Operations as of and for the years ended December 31, 2021 and 2020. During the year ended December 31, 2021, revenue and net loss attributed to NuLeaf was $12.90 million and $0.69 million, respectively. During the year ended December 31, 2020, revenue and net loss attributed to NuLeaf was $8.13 million and $4.08 million, respectively. The aggregate carrying values of Sparks Cultivation, LLC and NuLeaf Reno Production, LLC assets and liabilities, after elimination of any intercompany transactions and balances, in the consolidated balance sheets were as follows: (in thousands) December 31, December 31, Current assets: Cash $ 1,544 $ 671 Accounts receivable, net 1,553 483 Inventory 1,359 3,118 Prepaid expenses and other current assets 39 21 Total current assets 4,495 4,293 Property, equipment and leasehold improvements, net 5,099 7,442 Other assets 295 395 TOTAL ASSETS $ 9,889 $ 12,130 Liabilities: Total current liabilities $ 350 $ 396 Total long-term liabilities 184 307 TOTAL LIABILITIES $ 534 $ 703 |
INVESTMENTS IN UNCONSOLIDATED A
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | 12 Months Ended |
Dec. 31, 2021 | |
Investments [Abstract] | |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | INVESTMENTS IN UNCONSOLIDATED AFFILIATES Hydrofarm On August 28, 2018, the Company entered into a Subscription Agreement with Hydrofarm Holdings Group, Inc. (“Hydrofarm”), one of the leading independent providers of hydroponic products in North America, pursuant to which the Company agreed to purchase from Hydrofarm and Hydrofarm agreed to sell to the Company 2,000,000 “Units”, each Unit consisting of one share of common stock and one warrant to purchase one-half of a share of common stock for an initial exercise price of $5.00 per share, for $2.50 per Unit for an aggregate purchase price of $5.00 million. The investment in Hydrofarm was recorded at cost and was included in other assets on the consolidated balance sheet as of December 31, 2020. On November 24, 2020, Hydrofarm’s board of directors and stockholders approved an amendment to their amended and restated certificate of incorporation effecting a 1-for-3.3712 reverse stock split of their issued and outstanding shares of common stock. Subsequent to the reverse split, the Company owned 593,261 shares of common stock in Hydrofarm, with an exercise price at $8.43 per share, and 296,630 warrants to purchase one share of common stock, with an exercise price of $16.86 per share. On December 14, 2020, Hydrofarm announced the closing of its initial public offering; shares of Hydrofarm began trading on the Nasdaq Global Select Market under the ticker symbol “HYFM.” Hydrofarm’s common shares outstanding on the closing date were 31,720,727; the Company’s ownership percentage in Hydrofarm was approximately 1.9%. Upon closing of Hydrofarm’s initial public offering, the Company determined that the investment in Hydrofarm no longer qualifies to be stated at cost, as the equity security has a readily determinable value and therefore should be recorded at fair value. In the fourth quarter of 2020, the Company recorded its investment in Hydrofarm of 593,261 common shares and the warrants to acquire an additional 296,630 of Hydrofarm common stock at an exercise price of $16.86, at their respective fair values. The difference in basis was recorded in current period earnings. On June 16, 2021, the Company completed disposition of 593,261 shares of Hydrofarm common stock and warrants to purchase 296,630 shares of Hydrofarm common stock at a current exercise price of $16.86 per share, for aggregate gross proceeds of $40.76 million in cash pursuant to a Securities Purchase Agreement (the “SPA”) between the Company and two accredited investors. There is no material relationship between the Company or its affiliates and either of the investors other than in respect of the transactions contemplated by the SPA. Edible Garden On March 30, 2020, Edible Garden Corp. (“Edible Garden”), a wholly-owned subsidiary of Terra Tech Corp. (the “Company”), entered into and closed an Asset Purchase Agreement (the “Purchase Agreement”) with Edible Garden Incorporated (the “Purchaser”), pursuant to which Edible Garden sold and the Purchaser purchased substantially all of the assets of Edible Garden (the “Business”). The consideration paid for the Business included two option agreements to purchase up to a 20% interest in the Purchaser for a nominal fee. The first option gives the Company the right to purchase a 10% interest in the Purchaser for one dollar at any time between the one and five-year anniversary of the transaction, or at any time should a change in control event or public offering occur. The second option gives the Company the right to purchase an additional 10% interest in the Purchaser for one dollar at any point prior to the five-year anniversary of the transaction. During the year ended December 31, 2021, the Company exercised its options and acquired 5,000,000 shares of Edible Garden's common stock for a nominal fee. Refer to Note 16, " Fair Value Measurements" |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Raw materials consist of materials and packaging for manufacturing of products owned by Unrivaled Brands. Work-in-progress consists of cultivation materials and live plants grown at Black Oak Gallery and Hegenberger. Finished goods consists of cannabis products sold in retail and distribution. Inventory as of December 31, 2021 and 2020 consisted of the following: (in thousands) December 31, December 31, Raw materials $ 2,258 $ — Work-in-progress 1,077 392 Finished goods 3,844 367 Total inventory $ 7,179 $ 759 |
PROPERTY EQUIPMENT AND LEASEHOL
PROPERTY EQUIPMENT AND LEASEHOLD IMPROVEMENTS NET | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET Property, equipment, and leasehold improvements, net consists of the following: (in thousands) December 31, December 31, Land and building $ 7,788 $ 206 Furniture and equipment 3,873 1,135 Computer hardware 348 152 Leasehold improvements 14,409 5,850 Vehicles 1,142 123 Construction in progress 1,832 8,500 Subtotal 29,392 15,966 Less accumulated depreciation (5,663) (3,336) Property, equipment and leasehold improvements, net $ 23,729 $ 12,630 Depreciation expense related to property, equipment and leasehold improvements for the years ended December 31, 2021 and 2020 was $2.06 million and $1.37 million, respectively. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Goodwill Goodwill arises from the purchase price for acquired businesses exceeding the fair value of tangible and intangible assets acquired less assumed liabilities. Goodwill is reviewed annually for impairment or more frequently if impairment indicators arise. The Company conducts its annual goodwill impairment assessment as of the last day of the third quarter, or more frequently under certain circumstances. For the purpose of the goodwill impairment assessment, the Company has the option to perform a qualitative assessment (commonly referred to as “step zero”) to determine whether further quantitative analysis for impairment of goodwill or indefinite-lived intangible assets is necessary or a quantitative assessment (“step one”) where the Company estimates the fair value of each reporting unit using a discounted cash flow method (income approach). Goodwill is assigned to the reporting unit, which is the operating segment level or one level below the operating segment. The balance of goodwill at December 31, 2021 and 2020 was $48.13 million and $6.17 million, respectively. The table below summarizes the changes in the carrying amount of goodwill: Balance at December 31, 2019 $ 21,471 Impairment (15,300) Balance at December 31, 2020 6,171 Goodwill arising from acquisitions 48,132 Impairment (6,171) Balance at December 31, 2021 $ 48,132 The Company tests for impairment annually on September 30, and between annual tests if the Company becomes aware of an event or a change in circumstances that would indicate the carrying value may be impaired. During the first quarter of 2020, the impact of COVID-19 on the retail industry as well as uncertainty around when the Company would be able to resume its normal operations contributed to a significant and prolonged decline in the Company’s stock price, resulting in the market capitalization of the Company falling below its carrying value. As a result, management determined that a triggering event had occurred as it was more likely than not that the carrying values of the Black Oak Gallery reporting unit exceeded its fair value. Accordingly, the Company performed a quantitative assessment of the fair value of Black Oak Gallery’s goodwill as of March 31, 2020 using a market capitalization approach. This analysis resulted in an impairment charge of $4.20 million recorded in the first quarter of 2021. The goodwill impairment charge was measured as the amount by which the carrying amount of the reporting unit, including goodwill, exceeded its fair value. During the second quarter of 2020, COVID-19 and civil unrest in Oakland, California continued to have a material negative impact on the financial results of the Black Oak Gallery reporting unit. As a result, management determined that a triggering event had occurred as it was more likely than not the carrying value Black Oak Gallery’s goodwill exceeded its fair value. Accordingly, the Company performed a quantitative assessment of the fair value of Black Oak Gallery’s goodwill as of June 30, 2020 using an income approach. The analysis resulted in an impairment charge of $2.75 million recorded in the second quarter of 2020. The goodwill impairment charge was measured as the amount by which the carrying amount of the reporting unit, including goodwill, exceeded its fair value. During the third quarter of 2020, COVID-19 and the aftermath of civil unrest in Oakland, California continued to have a material negative impact on the financial results of the Black Oak Gallery reporting unit. The Company completed its annual testing for impairment as of September 30, 2020 using the Guideline Public Company method. The results of the step one assessment indicated the carrying value of the reporting unit exceeded the fair value by $8.35 million as of September 30, 2020. As a result, the Company recognized an impairment charge of $8.35 million during the third quarter of 2020. We recorded an impairment loss of $6.17 million following the performance of our 2021 annual goodwill impairment test, which was performed as of September 30, 2021 and was completed during the fourth quarter of 2021. The impairment loss represented the excess of the carrying value of our Black Oak Gallery reporting unit over the estimated fair value based on a discounted cash flow analysis. The impairment recognizes the impact of COVID-19 on the financial performance of Black Oak Gallery's operations, as well as declines in our forecasted revenue and earnings. The impairment charges relating to goodwill and other assets are presented in the “Impairment of Assets” line in the Consolidated Statements of Operations. Intangible Assets, Net Intangible assets consisted of the following as of December 31, 2021 and 2020: (in Thousands) December 31, 2021 December 31, 2020 Estimated Useful Life Gross Accumulated Amortization Net Gross Accumulated Amortization Net Amortizing Intangible Assets: Customer Relationships 3 to 5 $ 7,400 $ (7,400) $ — $ 7,400 $ (7,400) $ — Trademarks and Patent 2 to 8 4,500 (750) 3,750 196 (187) 9 Operating Licenses 14 100,701 (6,864) 93,837 10,270 (3,485) 6,785 Total Amortizing Intangible Assets 112,601 (15,014) 97,587 17,866 (11,072) 6,794 Non-Amortizing Intangible Assets: Trade Name Indefinite 32,050 — 32,050 920 — 920 Total Non-Amortizing Intangible Assets 32,050 — 32,050 920 — 920 Total Intangible Assets, Net $ 144,651 $ (15,014) $ 129,637 $ 18,786 $ (11,072) $ 7,714 Long-lived assets other than goodwill and indefinite-lived intangible assets, held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The Company evaluates recoverability of assets to be held and used and if the carrying value is not recoverable, the Company fair values the asset and compares to the carrying value. If the asset is considered to be impaired, the impairment loss is measured as the amount by which the carrying amount of the asset exceeds its fair value. The analysis for impairment of long-lived assets other than goodwill and indefinite-lived intangible assets is the first impairment analysis performed and related impairment charges are recognized before the impairment of goodwill analysis. During 2021, the impact of COVID-19 on the retail industry had a negative impact on our revenues and management was forced to limit store operating hours due to the pandemic. Management believes the COVID-19 outbreak will continue to have a material negative impact on the Company’s financial results. These factors, including management’s revised forecast for the future performance of our Black Oak Gallery reporting unit, indicated the carrying value of Black Oak Gallery’s customer relationships and trade name may not be recoverable. Management evaluated the recoverability of the customer relationships using level 3 inputs and a probability-weighted approach to assess the potential impact of a long-term decline in our existing customer base due to the COVID-19 pandemic. The recoverability test indicated that the book value of customer relationships exceeded fair value. As a result, the Company recognized impairment charges of $0.46 million during 2021. The company evaluates impairment of the Black Oak Gallery trade name using level 3 inputs and an income approach. The recoverability test indicated that the fair value of the trade name exceeded the book value. Accordingly, no impairment charge has been recognized. The Company recorded amortization expense of $3.39 million and $2.55 million for the years ended December 31, 2021 and 2020, respectively. Based solely on the amortizable intangible assets recorded as of December 31, 2021, the Company estimates amortization expense for the next five years to be as follows: (in thousands) Year Ending December 31, 2022 2023 2024 2025 2026 and thereafter Total Amortization expense $ 9,443 $ 8,693 $ 7,193 $ 7,193 $ 65,065 $ 97,587 Actual amortization expense to be reported in future periods could differ from these estimates as a result of new intangible asset acquisitions, changes in useful lives or other relevant factors or changes. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2021 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consist of the following: (in thousands) December 31, December 31, Accounts Payable $ 16,804 $ 6,027 Tax Liabilities 5,147 337 Accrued Payroll and Benefits 1,409 782 Current Lease Liabilities 3,120 694 Other Accrued Expenses 5,423 385 Total Accounts Payable and Accrued Expenses $ 31,903 $ 8,225 |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2021 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | NOTES PAYABLE Notes payable consists of the following: (in thousands) December 31, December 31, Promissory note dated January 18, 2018, issued for the purchase of real property. The promissory note is collateralized by the land and building purchased and matures January 18, 2022. The promissory note bears interest at 12.0% for year one and escalates 0.5% per year thereafter. The full principle balance and accrued interest are due at maturity. In the event of default, the note is convertible at the holder's option. 6,500 $ 6,500 Promissory note dated October 5, 2018, issued for the purchase of real property. Matured October 5, 2021. The promissory note bore interest at 12.0% for year one and escalated 0.5% per year thereafter up to 13.5%. In the event of default, the note was convertible at the holder's option. — 1,600 Promissory note dated June 11, 2019, issued to accredited investors, which matured December 31, 2021 and bore interest at a rate of 7.5% per annum. The conversion price was the lower of $4.50 or 87% of the average of the two (2) lowest VWAPs in the thirteen (13) trading days prior to the conversion date. — 2,800 Promissory note dated October 21, 2019, issued to accredited investors, which matured April 21, 2021 and bore interest at a rate of 7.5% per annum. The conversion price was the lower of $4.50 or 87% of the average of the two (2) lowest VWAPs in the thirteen (13) trading days prior to the conversion date. — 725 Secured promissory note dated December 30, 2019, issued to Matthew Lee Morgan Trust (a related party), which matured January 30, 2021, and bore interest at a rate of 10% per annum. — 500 Secured promissory note dated January 10, 2020, issued to an unaffiliated third party. The note matured on July 10, 2021 and bore interest at a rate of 15.0% per annum. — 1,000 Promissory note dated July 29, 2020, issued to an unaffiliated third party. The note bore interest at a rate of 8% per annum and matured on April 28, 2021. — 1,000 Promissory note dated May 4, 2020, issued to Harvest Small Business Finance, LLC, an unaffiliated third party. The loan is part of the Paycheck Protection Program ("PPP Loan") offered by the U.S. Small Business Administration. The interest rate on the note is 1.0%. The note requires interest and principle payments seven months from July 2020. The note matures on May 4, 2022. 562 562 Unsecured promissory note dated January 22, 2021, issued to Michael Nahass (a related party), which matures January 25, 2022, and bears interest at a rate of 3% per annum. 1,050 Convertible promissory note dated January 25, 2021, issued to accredited investors, which matures July 22, 2022 and bears interest at a rate of 3% per annum. The conversion price is $0.175 per share. 3,500 Promissory note dated July 27, 2021, issued to Arthur Chan, which matures July 26, 2024, and bears interest at a rate of 8% per annum. 2,500 Senior Secured Promissory Note dated November 22, 2021 issued to Dominion Capital LLC, which matures on February 22, 2022 and bears interest at a rate of 12% per annum. 2,500 Unsecured promissory note without interest owed to a related party. The loan, which is paid in 20 equal installments, matures on August 1, 2022. 90 Promissory note dated June 1, 2020, issued as part of the Paycheck Protection Program ("PPP Loan") offered by the U.S. Small Business Administration. The interest rate on the note is 1.0%. The note matures on June 1, 2022. 297 Line of credit agreement entered on March 31, 2021, which matures on March 31, 2022 and bears interest of 2.9% per 30 days. 4,500 Promissory note dated October 1, 2021, issued to Sterling Harlan as part of the SilverStreak Solutions acquisition. The interest rate on the note is 3%. The note matures April 1, 2022. 2,000 Promissory note dated October 1, 2021, issued to Sterling Harlan as part of the SilverStreak Solutions acquisition. The interest rate on the note is 3%. The note matures October 1, 2022. 2,500 Secured promissory note dated November 22, 2021 issued to People's California, LLC, which matures on November 22, 2023 and bears interest at a rate of 8% per annum. Payments due include $2.00 million plus accrued interest for the first twelve months followed by payments of $1.00 million plus accrued interest until maturity. 28,569 Promissory note dated May 1, 2019, assumed by the Company on July 1, 2021 in connection with the purchase of real property, from a related party. The note matures on May 15, 2039 and bears interest at a rate of 9.89% per annum. 2,954 Notes payable - promissory notes $ 57,522 $ 14,687 Vehicle loans 204 29 Less: Short term debt (45,749) (8,033) Less: Debt discount (1,971) (51) Net Long Term Debt $ 10,006 $ 6,632 Scheduled Maturities of Debt Scheduled maturities of debt are as follows: (in thousands) Year Ending December 31, 2022 2023 2024 2039 Total Total Debt $ 45,749 $ 6,523 $ 2,500 $ 2,954 $ 57,726 Series A Preferred Stock Purchase Agreement On January 22, 2021, the Company entered into a Series A Preferred Stock Purchase Agreement with Michael A. Nahass, pursuant to which the Company agreed to purchase from Mr. Nahass the four shares of the Company’s Series A Preferred Stock held by Mr. Nahass for an aggregate purchase price of $3.10 million, of which (i) $1.00 million was paid in cash, (ii) $1.05 million was paid in the form of an unsecured promissory note bearing interest at the rate of 3% and maturing on July 25, 2021 and (iii) $1.05 million is in the form of an unsecured promissory note bearing interest at the rate of 3% and maturing on or about January 25, 2022. Mortgages Carnegie Mortgage On November 22, 2017, the Company entered into a $4.50 million promissory note for the purchase of land and a building in California with a third-party creditor. The promissory note is collateralized by the land and building purchased and matures in December 1, 2020. The interest rate for the first year is 12.0% and increases 0.5% per year through 2021. Payments of interest only were due monthly. The full principal balance and accrued interest were paid upon sale of the real estate during 2021. Dyer Mortgage On January 18, 2018, the Company entered into a $6.50 million promissory note for the purchase of land and a building in California with a third-party creditor. As part of the closing of the purchase of land, the Company issued warrants with a value of approximately $0.16 thousand and paid a cash fee of $0.20 million. The warrants and cash fee were recorded as a debt discount. The unamortized balance of such discount as of December 31, 2021 and 2020 was $0.04 million and $0.14 million, respectively. The interest rate for the first year was 12.0% and increased 0.5% per year, up to 13.0%, through 2021. Payments of interest are due monthly, while the principal balance is due at maturity. On January 7, 2021, the Company executed an amendment to the terms of the promissory note. The amendment extended the maturity date from January 18, 2021 to January 18, 2022. 620 Dyer paid a 1% fee to extend the maturity date. 4th Street Mortgage On October 5, 2018, the Company entered into a $1.60 million promissory note for the purchase of a building in Nevada with a third-party creditor. The promissory note is collateralized by the building purchased and matures in October 5, 2021. The interest rate for the first year is 12.0% and increases 0.5% per year through 2020. Payments of interest only are due monthly, while the full principal balance is due at maturity. The full principal balance and accrued interest were paid upon sale of the real estate during 2021. 2018 Master Securities Purchase Agreement and Convertible Promissory Notes In March 2018, the Company entered into the 2018 Master Securities Purchase Agreement with an accredited investor pursuant to which the Company sells to the accredited investor 7.5% Senior Convertible Promissory Notes in eight tranches averaging $5.00 million, for a total of $40.00 million. The Company converted $1.98 million of convertible notes into the Company’s common stock during the year ended December 31, 2021. As of December 31, 2021, $3.50 million of principal remains outstanding. For each note issued under the 2018 Master Securities Purchase Agreement, the principal and interest due and owed under the note is convertible into shares of Common Stock at any time at the election of the holder at a conversion price per share equal to the lower of (i) the original conversion price as defined in each note issuance or (ii) 87% of the average of the two lowest daily volume weighted average price of the Common Stock in the thirteen (13) trading days prior to the conversion date (“Conversion Price”). The Conversion Price is subject to adjustment for (i) stock splits, stock dividends, combinations, or similar events and (ii) full ratchet anti-dilution protection. Upon certain events of default, the conversion price will automatically become 70% of the average of the three (3) lowest volume weighted average prices of the Common Stock in the twenty (20) consecutive trading days prior to the conversion date for so long as such event of default remains in effect. In addition, at any time that (i) the daily volume weighted average price of the Common Stock for the prior ten (10) consecutive trading days is $10.50 or more and (ii) the average daily trading value of the Common Stock is greater than $2.50 million for the prior ten (10) consecutive trading days, then the Company may demand, upon one (1) days’ notice, that the holder convert the notes at the Conversion Price. The Company may prepay in cash any portion of the outstanding principal amount of the notes and any accrued and unpaid interest by, upon ten (10) days’ written notice to the holder, paying an amount equal to (i) 110% of the sum of the then-outstanding principal amount of the notes plus accrued but unpaid interest, if the prepayment date is within 90 days of the issuance date of the notes; (ii) 115% of the sum of the then-outstanding principal amount plus accrued but unpaid interest, if the prepayment date is between 91 days and 180 days of the issuance date of the notes; or (iii) 125% of the sum of the then-outstanding principal amount of the notes plus accrued but unpaid interest, if the prepayment date is after 180 days of the issuance date of the notes. During the years ended December 31, 2021 and 2020, the Company converted debt and accrued interest into 24,939,780 and 31,086,209 shares of the Company’s common stock, respectively. Amendment of Existing Senior Convertible Promissory Notes and Securities Purchase Agreement On January 25, 2021, the Company entered into several agreements with an accredited investor (the “Lender”) that holds the promissory notes under the 2018 Securities Purchase Agreement. The amendments, among other things, (1) extended the maturity date of the June 2019 Note from January 26, 2021 to December 31, 2021 and (2) extended the maturity date of the October 2019 Note from April 21, 2021 to December 31, 2021. In connection with the Note Amendments, the Company issued to the Lender warrants to purchase 5,000,000 shares of the Company’s common stock (the “ Old Note Warrants ”) at an exercise price of $0.01 per share. The Old Note Warrants are exercisable at any time before the close of business on June 25, 2026. The Old Note Warrants contain cashless exercise provisions and, to the extent not previously exercised, will be automatically exercised via cashless exercise on June 25, 2026. In conjunction with the above amendments, the Company entered into a Securities Purchase Agreement with certain accredited investors (the “ Purchasers ”), pursuant to which the Company agreed to sell to the Purchasers $3,500,000 in aggregate principal amount of the Company’s senior convertible promissory notes (the “ Notes ”) and warrants to purchase shares of the Company’s common stock (the “ Warrants ”), exercisable at any time before the close of business on June 25, 2026. The Warrants are comprised of 15,000,000 “A Warrants” with an exercise price of $0.01 per share and 15,000,000 “B Warrants” with an exercise price of $0.2284 per share. The Notes, which are convertible into common stock at any time at the discretion of the respective Purchasers at a conversion price of $0.175 per share of common stock, will bear an interest rate of 3%. The Notes mature on or about July 24, 2022 unless accelerated due to an event of default. The Company has the right to prepay the Notes at any time upon 10 days’ prior notice to the Purchasers. If the Company elects to prepay the Notes, the Company must pay the respective Purchasers an amount in cash equal to the product of (i) the sum of the then-outstanding principal amount of the Notes and all accrued but unpaid interest, multiplied by (ii) (x) 110%, if the prepayment date is within 90 days of the original issue date, (y) 115%, if the prepayment date is between 91 days and 180 days following the original issue date or (z) 125%, if the prepayment date is after the 180th day following the original issue date. The Company can demand that the Purchasers convert the Notes at any time, on five calendar days’ notice, that (i) the daily dollar volume-weighted average price for the Company’s common stock for the prior five consecutive trading days is $0.30 or more and (ii) (1) the shares underlying the Notes have been registered with the SEC or (2) there is a fundamental transaction that has been announced by the Company. The Notes contain standard and customary terms concerning events of default. Events of default include, among other things, any failure to make payments when due, failure to observe or perform material covenants or agreements contained in the Notes, a material default under the Securities Purchase Agreement or related transaction documents or any other material contract to which the Company or any of its subsidiaries is a party, the breach of any representation or warranty in the Notes or the Securities Purchase Agreement, the bankruptcy or insolvency of the Company or any of its subsidiaries, the Company’s common stock not being eligible for listing or quotation on a trading market and not eligible to resume listing or quotation for trading within 5 trading days, the Company’s failure to meet the current public information requirements under Rule 144 under the Securities Act of 1933, as amended, the Company’s failure to file required reports with the SEC, and the Company’s failure to maintain sufficient reserved shares for issuance upon conversion of the Notes and exercise of the Warrants. If any event of default occurs, subject to any cure period, the full principal amount, together with interest (including default interest of 18% per annum) and other amounts owing in respect thereof through the date of acceleration shall become, at the Purchaser’s election, immediately due and payable in cash. Management performed an analysis to determine the appropriate accounting treatment of the above transactions and concluded (1) a troubled debt restructuring had not occurred, and (2) as the total change in cash flows was greater than 10% of the carrying value of the debt, the transactions should be treated as a debt extinguishment for accounting purposes. A loss on extinguishment of debt of $5.98 million, equal to the difference between the carrying value of the old debt and the reacquisition price, was recognized in current period earnings. Debt Assumed in the UMBRLA Acquisition On July 1, 2021, upon the closing of the UMBRLA acquisition, the Company assumed debt instruments consisting of the following: Line of Credit : A line of credit agreement with Bespoke Financial, Inc. The line of credit is for the lesser of a maximum draw amount of $4.5 million and a borrowing base consisting of eligible accounts receivable inventory and cash that serves as collateral. The line of credit accrues interest at a rate of 2.9% every 30 days and expires on March 31, 2022. The total outstanding balance on the line of credit was $4.50 million as of December 31, 2021. Payroll Protection Program (“PPP”) Loans : In May 2020, Umbrla received loans under the Paycheck Protection Program offered by the U.S. Small Business Administration (“SBA”) of which $0.30 million remained outstanding on the acquisition date. The loan proceeds are available to be used to pay for payroll costs, including salaries, commissions and similar compensation, group health care benefits, rent, utilities and interest on certain other outstanding debt. The interest rate on the PPP Loans is a fixed rate of 1% per annum. The Company is required to make principal and interest payments in monthly installments. The PPP loans mature in the second quarter of 2022. The PPP Loans include events of default. Upon the occurrence of an event of default, the lender will have the right to exercise remedies against the Company, including the right to require immediate payment of all amounts due under the PPP Loans. Related Party Promissory Note : On January 1, 2021, UMBRLA issued an unsecured promissory note with a principal balance of $0.20 million to a related party. No interest accrues on the note, except in the case of default, when the note bears 4.0% of interest. Principal payments on the note are due in monthly installments. As of December 31, 2021, the outstanding principal on the note was $0.09 million. Debt Assumed in the Acquisition of People's Choice During the year ended December 31, 2021, in connection with the acquisition of People's Choice, the Company issued a secured promissory note in a principal amount of $30.6 million as partial consideration under the purchase agreement. The note accrues interest on the basis of a 360-day year at a fixed rate of eight percent (8%) per annum and matures on November 22, 2023. The Company agreed to pay the principal balance on the note in monthly installments, commencing on December 1, 2021. The note, of which $28.6 million remained outstanding as of December 31, 2021, is secured by the Company's membership interests in 620 Dyer LLC. The unamortized discount on the note was $1.93 million as of December 31, 2021. On January 1, 2021, People’s First Choice, LLC issued an unsecured promissory note with a principal balance of $5.00 million to a related party. Interest on the note accrues at a rate of 10.00% per annum, compounded quarterly. The note matures on June 30, 2022. The Company may prepay the note in whole or in part without premium or penalty, provided that any partial payment shall first be credited first to interest then due and payable. The note was fully repaid as of December 31, 2021. Debt Assumed with Purchase of Halladay Holding, LLC. On July 1, 2021, the Company entered into a Membership Interest Purchase Agreement with Nicholas Kovacevich and Dallas Imbimbo, who are Directors of the Company, pursuant to which the Company acquired 100% of the outstanding membership interests in Halladay Holding, LLC from Mr. Kovacevich and Mr. Imbimbo. Halladay Holding, LLC is the owner of real property located at 3242 S. Halladay Street, Santa Ana, CA 92705, where the Company operates a cannabis dispensary and maintains its principal office space. Upon consummation of the agreement, the Company assumed a mortgage, which had an outstanding balance of $2.97 million as of December 31, 2021. The loan, which accrues interest at a rate of 9.89% per annum, matures on May 1, 2039. Debt Assumed in the Acquisition of Silverstreak Solutions, Inc. ("Silverstreak") During the year ended December 31, 2021, in connection with the acquisition of Silverstreak, the Company issued (i) a $2,000,000 unsecured promissory note, with an interest rate of 3% per annum and a maturity date six months after closing of the purchase, and (ii) a $2,500,000 unsecured promissory note with an interest rate of 3% per annum and a maturity date of twelve months after the closing of the transaction. Additional Financing Arrangements On December 30, 2019, the Company issued a promissory note to Matthew Lee Morgan Trust (a related party), which matures on January 30, 2021. The note accrues interest at a rate of 10% per annum. The note was converted into 1,428,571 shares of the Company’s common stock in January of 2021. On January 10, 2020, the Company issued a promissory note to Arthur Chan, an unaffiliated third party, in the amount of $1.00 million dollars. The note accrues interest at a rate of 15.00% per annum and matures on January 10, 2021. The note is secured by the Company’s real estate located at 620 E. Dyer Rd., Santa Ana, CA. On January 8, 2021, the Company executed an amendment to the promissory note, which extended the maturity date from January 10, 2021 to July 10, 2021. On July 27, 2021, the Company entered into a Note Termination and Exchange Agreement with Arthur Chan, pursuant to which the Company issued to Mr. Chan 4,548,006 shares of the Company’s common stock at a price of $0.23 per share as payment in full of the principal, interest and fees payable under the Secured Promissory Note issued by the Company to Mr. Chan on January 10, 2020 in the original principal amount of $1.00 million. As a result, the Secured Promissory Note is no longer outstanding. Contemporaneously with the execution of the Exchange Agreement, the Company issued to Mr. Chan a promissory note in the amount of $2.50 million. The new note bears an interest rate of 8% and matures on July 26, 2024. On May 4, 2020, OneQor Technologies, Inc entered into a Promissory Note dated May 4, 2020 (the “PPP Note”) with Harvest Small Business Finance, LLC (the “Lender”), pursuant to which the Lender agreed to make a loan to the Company under the Paycheck Protection Program (the “PPP Loan”) offered by the U.S. Small Business Administration (the “SBA”) in a principal amount of $0.56 million pursuant to Title 1 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). The PPP Loan proceeds are available to be used to pay for payroll costs, including salaries, commissions, and similar compensation, group health care benefits, and paid leaves; rent; utilities; and interest on certain other outstanding debt. The amount that will be forgiven will be calculated in part with reference to OneQor’s full time headcount during the eight week week period following the funding of the PPP loan. The interest rate on the PPP Note is a fixed rate of 1% per annum. To the extent that the amounts owed under the PPP Loan, or a portion of them, are not forgiven, OneQor will be required to make principal and interest payments in monthly installments. The PPP Note matures in two years. The PPP Note includes events of default. Upon the occurrence of an event of default, the lender will have the right to exercise remedies against OneQor, including the right to require immediate payment of all amounts due under the PPP Note. On July 29, 2020, the Company issued a promissory note to an unaffiliated third party, in the amount of $1.00 million. The note incurs interest at a rate of 8.00% per annum and matured on April 28, 2021. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | LEASES A lease provides the lessee the right to control the use of an identified asset for a period of time in exchange for consideration. Operating lease right-of-use assets are included in other assets while lease liabilities are a line-item on the Company’s Consolidated Balance Sheets. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company determines if an arrangement is a lease at inception. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Most operating leases contain renewal options that provide for rent increases based on prevailing market conditions. The terms used to calculate the right-of-use assets and lease liabilities include the renewal options that the Company is reasonably certain to exercise. The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, the Company utilizes its secured borrowing rate. Right-of-use assets include any lease payments required to be made prior to commencement and exclude lease incentives. Both right-of-use assets and lease liabilities exclude variable payments not based on an index or rate, which are treated as period costs. The Company’s lease agreements do not contain significant residual value guarantees, restrictions or covenants. The Company occupies office and other facilities under lease agreements that expire at various dates. In addition, office, production and transportation equipment is leased under agreements that expire at various dates. The Company does not have any significant finance leases. Total operating lease costs for the years ended December 31, 2021 and December 31, 2020 were $2.95 million and $0.69 million, respectively. Short-term lease costs during the 2021 and 2020 fiscal years were not material. As of December 31, 2021 and December 31, 2020, short term lease liabilities of $3.12 million and $0.69 million are included in “ Accounts Payable and Accrued Expenses (in thousands) Operating right-of-use assets $ 24,448 Operating lease liabilities 24,436 The table below presents the maturities of operating lease liabilities as of December 31, 2021: (in thousands) 2022 $ 5,370 2023 5,301 2024 5,215 2025 4,324 2026 4,209 Thereafter 14,005 Total lease payments 38,424 Less: discount (13,988) Total operating lease liabilities $ 24,436 The table below presents the weighted average remaining lease term for operating leases and weighted average discount rate used in calculating operating lease right-of-use assets: December 31, Weighted average remaining lease term (years) 5.71 Weighted average discount rate 11.4 % |
TAX EXPENSE
TAX EXPENSE | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
TAX EXPENSE | TAX EXPENSE The provision for income taxes consisted of the following for the years ended December 31, 2021 and 2020. Year Ended December 31, Current: 2021 2020 Federal 108 — State 860 — Foreign — — Total current tax expense 968 — Year Ended December 31, Deferred: 2021 2020 Federal 1,112 — State (277) — Foreign — Total deferred tax expense 835 — Total Tax Provision 1,803 — The components of deferred income tax assets and (liabilities) are as follows: Year Ended December 31, 2021 2020 Deferred income tax assets: Options expense $ — $ 2,871 Depreciation — 194 Allowance for Doubtful Accounts — 291 Accrued Expenses 58 — Net operating Losses 5,010 19,676 Total 5,068 23,032 Deferred income tax liabilities: Fixed Assets and Intangibles (11,094) — Leases (96) — Unrealized gain on investments — (8,658) Total (11,190) 14,374 Valuation allowance — (14,374) Net deferred tax assets (liabilities) $ (6,122) $ — The net deferred tax liability as of December 31, 2021 is associated with the Company's continuing operations. The reconciliation between the Company’s effective tax rate and the statutory tax rate is as follows: Year Ended December 31, 2021 2020 Expected Income Tax Benefit at Statutory Tax Rate, Net $ (6,385) $ (6,151) Changes in income taxes resulting from: State taxes (net of federal tax benefits) 9,937 (2,045) Decrease in valuation allowance (14,375) (3,727) Foreign tax rate differential — — Gain/loss on distinguishment of debt 1,255 — Non-deductible 280E 5,421 2,683 Goodwill impairment 1,296 5,572 Debt discount 239 — Passthrough and managed 308 713 RTP adjustments and other 4,107 613 Reported income tax expense (benefit) $ 1,803 $ — For the years ended December 31, 2021 and 2020, the Company had subsidiaries that produced and sold cannabis or cannabis pure concentrates, subjecting the Company to the limits of Internal Revenue Code (“IRC”) Section 280E. Pursuant to IRC Section 280E, the Company is allowed only to deduct expenses directly related to sales of product. The State of California does not conform to IRC Section 280E and, accordingly the Company is allowed to deduct all operating expenses on its California income tax returns. As the Company files consolidated federal income tax returns, the taxable income generated from its subsidiaries subject to IRC Section 280E has been offset by losses generated by operations not subject to IRC Section 280E. As of December 31, 2021, the Company had federal net operating loss carryforwards of approximately $16.30 million, which do not expire, but are limited in utilization against 80% of taxable income. As of December 31, 2021, the Company had state net operating loss carryforwards of approximately $17.9 million, which begin to expire in 2038. These tax attributes are subject to an annual limitation from equity shifts, which constitute a change of ownership as defined under IRC Section 382, which will limit their utilization. Management completed an analysis of our owner shifts and believe we underwent ownership changes as defined by Section 382 on May 7, 2018 and July 1,2021. Net operating loss carryforwards have been reduced to reflect the maximum amount available subject to these limitations. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. As of December 31, 2021, we have determined that a valuation allowance is no longer required due to our net deferred tax liability position. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased. The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. All tax years are subject to examination. Under ASC 740-10, Income Taxes, we periodically review the uncertainties and judgments related to the application of complex income tax regulations to determine income tax liabilities in several jurisdictions. We use a “more likely than not” criterion for recognizing an asset for unrecognized income tax benefits or a liability for uncertain tax positions. We have determined we have unrecognized assets related to uncertain tax positions for IRC Section 280E as of December 31, 2021. We do not anticipate any significant changes in such uncertainties and judgments during the next twelve months. We settled prior year positions with adjustments to previously filed income tax returns. As of December 31, 2021, we had approximately $8.6 million of unrecognized tax benefits, all of which would affect the effective tax rate if recognized. Of the $8.6 million in unrecognized tax benefits, all of it relates to prior years through our acquisition of UMBRLA. |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Equity | EQUITY Preferred Stock On January 22, 2021, the Company entered into a Resignation and Release Agreement and a Series A Preferred Stock Purchase Agreement with Michael A. Nahass. Mr. Nahass agreed to resign from his positions as a director, executive officer and employee of the Company, and the Company agreed to purchase from Mr. Nahass the four shares of the Company’s Series A Preferred Stock held by Mr. Nahass for an aggregate purchase price of $3,100,000, of which (i) $1,000,000 was paid in cash, and $2.1 million was paid in the form of promissory notes. The Company recorded severance expense equal to the fair value of consideration paid to Mr. Nahass in current period earnings. On January 22, 2021, the Company entered into a Resignation and Release Agreement with Derek Peterson, pursuant to which Mr. Peterson agreed to resign from his positions as a director, executive officer and employee of the Company effective immediately upon the Company’s closing of a private placement in the amount of not less than $3,500,000 which occurred on January 25, 2021. In addition, the Company extended the time within which vested common stock options held by Mr. Peterson may be exercised to 150 days after the date of resignation. Mr. Peterson agreed to the cancellation of his Series A Preferred Stock through conversion into 16,485,714 shares of common stock and, in consideration of the conversion, was issued 4,945,055 warrants to purchase common stock, expiring in June 2026, with an exercise price of $0.01 per share, which are subject to a one-year lockup with registration rights. The Company recorded severance expense equal to the fair value of consideration paid to Mr. Peterson in current period earnings. On February 3, 2021, the Company filed (1) a Certificate of Withdrawal of Certificate of Designation of the Company’s Series A Preferred Stock with the Secretary of State of the State of Nevada, which withdraws the Certificate of Designation establishing the Company’s Series A Preferred Stock and eliminates the Company’s Series A Preferred Stock from the Company’s Articles of Incorporation and (2) a Certificate of Withdrawal of Certificate of Designation of the Company’s Series B Preferred Stock with the Secretary of State of the State of Nevada, which withdraws the Certificate of Designation establishing the Company’s Series B Preferred Stock and eliminates the Company’s Series B Preferred Stock from the Company’s Articles of Incorporation. Common Stock The Company authorized 990.00 million shares of common stock with $0.001 par value per share. As of December 31, 2021 and 2020, 496.24 million and 194.20 million shares of common stock were outstanding, respectively. Treasury Stock During 2019, the Company acquired 2.31 million shares of common stock and 4 shares of Series A Preferred stock as part of a litigation settlement. The shares were recorded at fair market value as of the date the agreement was executed. |
STOCKBASED COMPENSATION
STOCKBASED COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Equity Incentive Plans In the first quarter of 2016, the Company adopted the 2016 Equity Incentive Plan. In the fourth quarter of 2018, the Company adopted the 2018 Equity Incentive Plan. The following table contains information about both plans as of December 31, 2021: Awards Awards Awards Awards 2016 Equity Incentive Plan 2,000,000 — 499,953 1,500,047 2018 Equity Incentive Plan 43,976,425 3,875,921 14,409,604 25,690,900 2019 Equity Incentive Plan 84,150,000 34,884 73,014,717 11,100,399 Stock Options The following table summarizes the Company’s stock option activity and related information for the year ended December 31, 2021 and 2020: Number Weighted- Weighted- Aggregate Options Outstanding as of December 31, 2019 12,365,295 $ 1.61 Options Granted 12,803,918 $ 0.08 Options Exercised — $ — Options Forfeited (7,203,334) $ 1.19 Options Expired (473,049) $ 1.51 Options Outstanding as of December 31, 2020 17,492,830 $ 0.41 Options Granted 88,627,220 $ 0.23 Options Exercised (3,910,805) $ 0.08 Options Forfeited (13,547,745) $ 0.15 Options Expired (410,120) $ 0.41 Options Outstanding as of December 31, 2021 88,251,380 $ 0.20 8.8 years $ 10,334,294 Options Exercisable as of December 31, 2021 35,661,302 $ 0.27 7.6 years $ 3,591,052 The aggregate intrinsic value is calculated as the difference between the Company’s closing stock price of $0.26 on December 31, 2021 and the exercise price of options, multiplied by the number of options. As of December 31, 2021, there was $7.97 million total unrecognized stock-based compensation. Such costs are expected to be recognized over a weighted-average period of approximately 1.58 years. The weighted average fair value of awards granted was $0.23 and $0.08 during 2021 and 2020, respectively. The Company recognizes compensation expense for stock option awards on a straight-line basis over the applicable service period of the award. The service period is generally the vesting period. The following weighted-average assumptions were used to calculate stock-based compensation: Year Ended December 31, 2021 2020 Expected term 5 years 6 years Volatility 106.7 % 104.6 % Risk-Free Interest Rate 0.8 % 0.4 % Dividend Yield 0 % 0 % The Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Hence, the Company uses the “simplified method” described in Staff Accounting Bulletin 107 to estimate the expected term of share option grants. The expected stock price volatility assumption was determined by examining the historical volatilities for the Company’s common stock. The Company will continue to analyze the historical stock price volatility and expected term assumptions as more historical data for the Company’s common stock becomes available. The risk-free interest rate assumption is based on the U.S. treasury instruments whose term was consistent with the expected term of the Company’s stock options. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has never paid dividends on its common stock and does not anticipate paying dividends on its common stock in the foreseeable future. Accordingly, the Company has assumed no dividend yield for purposes of estimating the fair value of the Company stock-based compensation. Stock-Based Compensation Expense The following table sets forth the total stock-based compensation expense resulting from stock options and restricted grants of common stock to employees, directors and non-employee consultants in the consolidated statement of operations which are included in selling, general and administrative expenses: (in thousands, except for number of shares or options) December 31, 2021 December 31, 2020 Type of Award Number of Stock-Based Number of Stock- Stock Options 89,930,019 $ 2,415 4,174,428 $ 1,868 Stock Grants: Employees (Common Stock) 250,000 68 740,580 142 Directors (Common Stock) 1,917,837 494 173,610 105 Non–Employee Consultants (Common Stock) 4,556,603 1,078 715,065 60 Total Stock–Based Compensation Expense $ 4,055 $ 2,175 |
WARRANTS
WARRANTS | 12 Months Ended |
Dec. 31, 2021 | |
Warrants and Rights Note Disclosure [Abstract] | |
WARRANTS | WARRANTS The following table summarizes warrant activity for the years ended December 31, 2021 and 2020: Shares Weighted- Warrants Outstanding as of January 1, 2020 1,313,459 $ 2.67 Warrants Issued — $ — Warrants Expired (236,904) $ 5.73 Warrants Outstanding as of December 31, 2020 1,076,555 $ 1.99 Warrants Issued 85,336,515 $ 0.08 Warrants Exercised (586,198) $ 0.07 Warrants Outstanding as of December 31, 2021 85,826,872 $ 0.22 The weighted-average exercise price and weighted-average fair value of the warrants granted by the Company during 2021 were as follows: For the Year Ended December 31, 2021 Weighted- Weighted- Warrants Granted Whose Exercise Price Exceeded Fair Value at the Date of Grant $ 0.08 $ 0.21 Warrants Granted Whose Exercise Price Was Equal or Lower Than Fair Value at the Date of Grant $ — $ — The Company estimated the fair value of the warrants issued during 2021 utilizing the Black-Scholes option-pricing model with the following weighted-average inputs: Year Ended December 31, Volatility 112.6 % Term 3.8 years Risk-Free Interest Rate 0.2 % Expected Dividend Rate 0.0 % For the years ended December 31, 2021 and 2020, zero warrants were issued in connection with debt and recorded as a debt discount. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTSAs of December 31, 2020, the Company owned 593,261 common shares of Hydrofarm, a public company trading on the Nasdaq Global Select Market under the ticker symbol “HYFM.” As of December 31, 2020, the Company’s investment in Hydrofarm is stated at fair value and is presented in the “Short term investments” line within the consolidated balance sheet. As the Hydrofarm shares held by the Company were restricted from sale for a period of 180 days from the date of Hydrofarm’s initial public offering, the fair value of the Company’s investment was estimated utilizing the market price of the common shares at the end of each reporting period (a level one input), less a discount for lack of marketability (a level two input). The discount for marketability was estimated upon consideration of volatility and the length of the lock-up period On December 31, 2020, the HYFM stock price was $52.58 and the investment value was $23.85 million. Changes in the fair value of the Company’s investment are reported in current period earnings. As of December 31, 2020, the Company held 296,630 warrants to purchase one share of Hydrofarm’s common stock, with an exercise price of $16.86 per share. As the underlying shares are restricted from sale for a period of 180 days from the date of Hydrofarm’s initial public offering, the fair value of the warrants were estimated using the Black-Scholes option pricing model that uses several inputs, including market price of Hydrofarm’s common shares at the end of each reporting period (a level one input), less a discount for lack of marketability (a level two input). The discount for lack of marketability was estimated upon consideration of volatility and the length of the lock-up period. The estimated fair value of the warrants was $10.20 million as of December 31, 2020. Changes in the fair value of the warrants are reported in current period earnings. On June 16, 2021, the Company completed disposition of 593,261 shares of Hydrofarm common stock and warrants to purchase 296,630 shares of Hydrofarm common stock at a current exercise price of $16.86 per share, for aggregate gross proceeds of $40.76 million in cash pursuant to a Securities Purchase Agreement (the “SPA”) between the Company and two accredited investors. On March 30, 2020, Edible Garden Corp. (“Edible Garden”), then a wholly-owned subsidiary of the Company, entered into and closed an Asset Purchase Agreement (the “Purchase Agreement”) with Edible Garden Incorporated (the “Purchaser”), pursuant to which Edible Garden sold and the Purchaser purchased substantially all of the assets of Edible Garden (the “Business”). The consideration paid for the Business included two option agreements to purchase up to a 20% interest in the Purchaser for a nominal fee. The first option gives the Company the right to purchase a 10% interest in the Purchaser for one dollar at any time between the one and five-year anniversary of the transaction, or at any time should a change in control event or public offering occur. The second option gives the Company the right to purchase an additional 10% interest in the Purchaser for one dollar at any point prior to the five-year anniversary of the transaction. The second option is automatically terminated upon payment in full of the $3.00 million secured promissory note. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS On February 14, 2020, the Company acquired all of the assets of OneQor Technologies, Inc. (“OneQor”). The acquisition of OneQor was accounted for in accordance with ASC 805-10, “Business Combinations.” The total consideration transferred included 58,154,027 shares of the Company’s common stock, with a fair value of $9.31 million. The preliminary allocation of the purchase price was based upon a preliminary valuation, and the Company’s estimates and assumptions of the assets acquired and liabilities assumed were subject to change within the measurement period pending the finalization of a third-party valuation. The multi-period excess earnings method, an income approach, was utilized to estimate the fair value of OneQor’s customer relationships. The relief-from-royalty method, an income approach, was utilized to estimate the fair value of OneQor’s trade name. The following table summarizes the preliminary allocation of the purchase price: (in thousands) Assets acquired Accounts receivable $ 51 Inventory 81 Prepaid expenses 241 Property, plant and equipment 80 Customer relationships 3,070 Trade name 690 Goodwill 6,763 Other long-term assets 260 Total Assets acquired $ 11,237 Liabilities assumed Accounts payable and accrued expenses $ 1,481 Deferred income 300 Short-term debt 100 Long-term lease liabilities 108 Total liabilities assumed $ 1,990 In the view of management, goodwill reflected the future cash flow expectations for OneQor’s market position in the growing CBD industry, synergies and the assembled workforce, at the time of the acquisition. Goodwill recorded for the OneQor transaction is non-deductible for tax purposes. During 2020, Management suspended the operations of OneQor Technologies due to (i) a lack of proper growth in customer acquisition and revenue for this CBD operation during the COVID-19 pandemic and (ii) the overall financial health of the Company as a result of the COVID-19 pandemic and social unrest. During the year ended December 31, 2020, the Company recognized $1.21 million of revenue and a net loss of $12.29 million from OneQor. During the year ended December 31, 2021, the Company recognized a net loss of $0.16 million from OneQor. The results of OneQor's operations are included in Discontinued Operations (see Note 19, "Discontinued Operations"). UMBRLA, Inc. On July 1, 2021, the Company completed the acquisition of UMBRLA, Inc. Pursuant to Articles of Merger filed by the Company with the Nevada Secretary of State, which became effective upon filing on July 1, 2021. UMBRLA became a wholly owned subsidiary of the Company. The acquisition of UMBRLA was accounted for in accordance with ASC 805-10, “ Business Combinations .” The preliminary allocation of the purchase price was based upon a preliminary valuation, and the Company’s estimates and assumptions of the assets acquired and liabilities assumed were subject to change within the measurement period pending the finalization of a third-party valuation. The multi-period excess earnings method, an income approach, was utilized to estimate the fair value of UMBRLA customer relationships. The relief-from-royalty method, an income approach, was utilized to estimate the fair value of UMBRLA trade name. Consideration for the merger consisted of 191,772,781 shares of common stock issued on the acquisition date, 23,424,674 shares of common stock reserved for issuance in one year, and the assumption of all of UMBRLA’s stock options and warrants outstanding as of July 1, 2021. The fair value of the components of the purchase price is summarized below (in thousands): Purchase Price (in thousands): Stock $ 52,929 Liability for holdback shares 6,465 Stock options assumed 9,695 Warrants assumed 10,733 Less: cash transferred (1,290) Total consideration 78,532 The preliminary allocation of the purchase price was based upon a preliminary valuation, and the Company’s estimates and assumptions of the assets acquired and liabilities assumed were subject to change within the measurement period pending finalization of a third-party valuation. The relief-from-royalty method, an income approach, was utilized to estimate the fair value of UMBRLA’s trade name. The multi-period excess earnings method was utilized to estimate the fair value of UMBRLA’s licenses. The following table summarizes the preliminary allocation of the purchase price (in thousands): (in thousands) Assets acquired Accounts receivable 3,772 Inventory 6,532 Prepaid & other current assets 1,543 Fixed assets 1,450 Notes receivable 750 Other long-term assets 3 Right-of-use asset 460 Trade name 31,130 Licenses 40,760 Goodwill 16,216 Total assets acquired $ 102,617 Liabilities assumed Accounts payable/accrued expenses $ 15,849 Short-term lease liability 118 Long-term lease liability 342 Short-term debt 4,796 Long-term debt 674 Deferred tax liability 499 Uncertain Tax Position 1,806 Total liabilities assumed $ 24,084 For the fiscal year ended December 31, 2021, the Company recognized $21.50 million of revenue and a net loss of $6.88 million from UMBRLA. In the view of management, goodwill reflects the future cash flow expectations for UMBLRA market position in the cannabis industry, synergies and the assembled workforce. Goodwill recorded for the UMBRLA transaction is non-deductible for tax purposes. People’s California On August 15, 2021, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with People’s California, LLC, a California limited liability company (“People’s California”) and People’s First Choice, LLC, a California limited liability company and wholly owned subsidiary of People’s California (the “Target”), which operates cannabis dispensary operations. Upon the terms and subject to the satisfaction of the conditions described in the Purchase Agreement, the Company will acquire 100% of the outstanding equity of the Target in two separate closings (the “Acquisition”), with 80% of the equity of the Target transferred at the first closing and the remaining 20% of the equity transferred at the second closing. At the first closing of the Acquisition, People’s California shall receive from the Company: (a) a cash payment of $24.00 million less certain outstanding indebtedness and transaction expenses related to the Acquisition; (b) a secured note in an aggregate principal amount of $36.00 million less certain indebtedness; and (c) 40,000,000 shares of Company common stock valued at $0.40 per share, subject to terms and conditions of the agreement by and between the Company and People’s California, which includes a one-year lockup of the shares. The Purchase Agreement is subject to customary indemnification provisions. On August 4, 2021, in connection with the Acquisition, People’s California issued senior secured indebtedness to the Company, pursuant to the terms of a certain Secured Promissory Note (the “Deposit Note”). The Deposit Note provided for a one-time advance of $6.00 million (the “Loan”) by the Company to People’s California at a flat rate of 3% per annum. The Deposit Note matures on August 4, 2022. The full principal balance and all outstanding but unpaid interest is due and payable at the maturity date of August 4, 2022; provided that, if the Company consummates the first closing, pursuant to the terms of the Purchase Agreement, then the principal amount of the Deposit Note, but not the accrued interest, shall be deemed repaid, satisfied, or otherwise applied to the cash consideration paid for the equity of the Target and the Deposit Note shall be deemed satisfied. On September 1, 2021, in connection with the Acquisition, People’s California issued senior secured indebtedness to the Company, pursuant to the terms of a certain Secured Promissory Note (the “Second Deposit Note”). The Second Deposit Note provided for a one-time advance of $9.00 million (the “Loan”) by the Company to People’s California at a flat rate of 3% per annum. The Second Deposit Note matures on September 1, 2022. The full principal balance and all outstanding but unpaid interest is due and payable at the maturity date of September 1, 2022; provided that, if the Company consummates the first closing, pursuant to the terms of the Purchase Agreement, then the principal amount of the Second Deposit Note, but not the accrued interest, shall be deemed repaid, satisfied, or otherwise applied to the cash consideration paid for the equity of the Target and the Second Deposit Note shall be deemed satisfied. On September 1, 2021, the Company entered into a Management Agreement with the Target, which provided the Company with control over the Target’s operation and finances. Management concluded that effective September 1, 2021, the Company became the primary beneficiary of the Target as a result of the Management Agreement, and began consolidating the Target’s financial results. The Company applied acquisition accounting on September 1, 2021 and allocated the fair value of the Target to its assets and liabilities. The preliminary valuation of the Target was based on the purchase price described below (in thousands): Purchase Price (in thousands): Cash $ 24,000 Note payable $ 33,749 Common stock $ 16,000 Less: cash transferred $ (994) Total consideration $ 72,755 The preliminary allocation was based upon the Company’s estimates and assumptions of the assets acquired and liabilities assumed are subject to change within the measurement period pending the finalization of a third-party valuation. The following table summarizes the preliminary allocation of the purchase price: Assets acquired (in thousands) Inventory 662 Prepaids 74 Fixed Assets 554 Right-of-use asset 2,105 Trade name 4,500 Licenses 49,510 Goodwill 20,995 Total assets acquired $ 78,400 Liabilities assumed Accounts Payable/Accruals $ 2,586 Short-term lease liability 540 Long-term lease liability 1,565 Deferred tax liabilities 4,775 Total liabilities assumed $ 9,466 Silverstreak Solutions On October 1, 2021, the Company completed the acquisition of Silverstreak Solutions, Inc ("Silverstreak"). Silverstreak became a wholly owned subsidiary of the Company. The acquisition of Silverstreak was accounted for in accordance with ASC 805-10, “ Business Combinations .” The preliminary allocation of the purchase price was based upon a preliminary valuation, and the Company’s estimates and assumptions of the assets acquired and liabilities assumed were subject to change within the measurement period pending the finalization of a third-party valuation. The cost approach was utilized to estimate the fair value of the Silverstreak license. Consideration is comprised of (i) One Million Five Hundred Thousand Dollars ($1,500,000) in cash, (ii) 9,051,412 shares of restricted common stock, par value $0.001 per share, which is equal to the quotient obtained by (a) $2,500,000, by (b) the volume-weighted average price of the Purchaser Shares as reported through Bloomberg for the ten (10) consecutive trading days ending on the business day prior to the Closing, (iii) $2,000,000 in unsecured promissory notes with an interest rate of 3% and due six months after the Closing, and (iv) $2,500,000 in unsecured promissory notes with an interest rate of 3% and due twelve months after the Closing (the “Twelve-Month Notes”). The fair value of the components of the purchase price is summarized below (in thousands): Purchase Price (in thousands): Cash $ 1,500 Note payable 4,500 Common stock 2,500 Less: cash transferred (24) Total consideration $ 8,476 The preliminary allocation was based upon the Company’s estimates and assumptions of the assets acquired and liabilities assumed are subject to change within the measurement period pending the finalization of a third-party valuation. The following table summarizes the preliminary allocation of the purchase price: Assets acquired (in thousands) Inventory 215 Prepaid expenses 6 Fixed assets 257 Licenses 161 Goodwill 10,921 Total assets acquired $ 11,561 Liabilities assumed Accounts payable and accrued expenses $ 1,517 Deferred taxes 14 Taxes payable 1,553 Total liabilities assumed $ 3,084 Supplemental Pro-Forma Information (Unaudited) Supplemental information on an unaudited pro-forma basis is reflected as if each of the 2020 and 2021 acquisitions had occurred in the year prior to the year in which each acquisition closed, after giving effect to certain pro-forma adjustments primarily related to the amortization of acquired intangible assets. The unaudited pro-forma supplemental information is based on estimates and assumptions that the Company believes are reasonable. The supplemental unaudited pro-forma financial information is presented for comparative purposes only and is not necessarily indicative of what the Company’s financial position or results of operations actually would have been had the Company completed the acquisitions at the dates indicated, nor is it intended to project the future financial position or operating results of the Company as a result of the Purchase Agreement. For the Year Ended 12/31/2021 12/31/2020 Pro-forma revenues $ 95,867 $ 88,078 Pro-forma net loss from continuing operations (36,454) (1,077) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIESCalifornia and Oregon Operating LicensesUnrivaled Brands, Inc entities have operated compliantly and have been eligible for applicable licenses and renewals of our licenses. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS NuLeaf On November 17, 2021, Medifarm III, LLC (“Medifarm”), a wholly-owned subsidiary of the Company, entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with NuLeaf, Inc., a Nevada corporation (“NuLeaf”). Upon the terms and subject to the satisfaction of the conditions described in the Purchase Agreement, Medifarm will sell its fifty percent (50%) of the outstanding membership interests of each of NuLeaf Reno Production, LLC (“NuLeaf Reno”) and NuLeaf Sparks Cultivation, LLC (“NuLeaf Sparks”) to NuLeaf, which currently owns the remaining fifty percent (50%) of the membership interests of NuLeaf Reno and NuLeaf Sparks, for aggregate consideration of $6.5 million in cash. The company will recognize a gain upon completion of the sale of the assets, equal to the difference between the consideration paid and the book value of the assets as of the disposition date, less direct costs to sell, and reflect such loss in discontinued operations upon closing of the transaction, which is expected to occur during 2022. Nevada Dispensaries On May 8, 2019, MediFarm LLC, a wholly-owned subsidiary of Terra Tech Corp. (the “Company”), entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Picksy, LLC (the “Purchaser”) pursuant to which the Company agreed to sell and the Purchaser agreed to purchase substantially all of the assets of the Company related to the Company’s dispensary located at 1130 East Desert Inn Road, Las Vegas, NV 89109 (the “Business”). The aggregate consideration to be paid for the Business is $10.00 million, of which $7.20 million is cash (the “Purchase Price”). A portion of the Purchase Price is payable by the Purchaser pursuant to a 12 month Secured Promissory Note with a principal amount of $2.80 million (the “Note”). The Note is secured by all the assets sold pursuant to the Purchase Agreement. In conjunction with the Note, Purchaser and the Company entered into a Security Agreement granting the Company a security interest in all the assets sold pursuant to the Purchase Agreement. The transaction closed upon receiving all required government approvals during the year ended December 31, 2021. The Company recognized a gain of $5.43 million upon sale of the assets, equal to the difference between the consideration paid and the book value of the assets as of the disposition date, less direct costs to sell, and reflected such gain in income from discontinued operations. On August 19, 2019, MediFarm I LLC, a wholly-owned subsidiary of Terra Tech Corp. (the “Company”), entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Picksy Reno, LLC (the “Purchaser”) pursuant to which the Company agreed to sell and the Purchaser agreed to purchase substantially all of the assets of the Company related to the Company’s dispensary located at 1085 S Virginia St Suite A, Reno, NV 89502 (the “Business”). The aggregate consideration to be paid for the Business is $13.50 million, of which $9.30 million is cash (the “Purchase Price”). A portion of the Purchase Price is payable by the Purchaser pursuant to a 12 month Secured Promissory Note with a principal amount of $4.20 million (the “Note”). The Note is secured by all the assets sold pursuant to the Purchase Agreement. In conjunction with the Note, Purchaser and the Company entered into a Security Agreement granting the Company a security interest in all the assets sold pursuant to the Purchase Agreement. The transaction closed upon receiving all required government approvals during the year ended December 31, 2021. The Company recognized a gain of $2.37 million upon sale of the assets, equal to the difference between the consideration paid and the book value of the assets as of the disposition date, less direct costs to sell, and reflected such gain in income from discontinued operations. On April 15, 2020, MediFarm LLC, a wholly-owned subsidiary of Terra Tech Corp. (the “Company”), entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Natural Medicine, LLC, a non-affiliated third party (the “Purchaser”) pursuant to which the Company agreed to sell and the Purchaser agreed to purchase substantially all of the assets of the Company related to the Company’s dispensary located at 3650 S. Decatur Blvd., Las Vegas, NV. The aggregate consideration to be paid for the Business is $5.25 million, of which $2.50 million is cash and $2.75 million is payable by the Purchaser pursuant to a 12-month Secured Promissory Note bearing 8% interest per annum, which is secured by all of the assets sold pursuant to the Purchase Agreement. The transaction closed upon receiving all required government approvals during the year ended December 31, 2021. The Company recognized a gain of $5.03 million upon sale of the assets, equal to the difference between the consideration paid and the book value of the assets as of the disposition date, less direct costs to sell, and reflected such gain in income from discontinued operations. Real Estate As of December 31, 2020, the Company classified real property in Las Vegas, NV as available-for-sale, as it met the criteria of ASC 360-10-45-9. On August 9, 2021, the Company sold the property for $2.60 million in cash to 117 Real Estate Holdings LLC. A loss on the sale of the asset of $0.1 million was recorded during the year ended December 31, 2021 and is presented within net income from discontinued operations. As of December 31, 2020, the Company classified real property in Santa Ana, CA as available-for-sale, as it met the criteria of ASC 360-10-45-9. On August 10, 2021, the Company entered into a Stock Purchase Agreement with two individuals, pursuant to which the Company sold all of the share of common stock of its wholly-owned subsidiary, 1815 Carnegie Santa Ana, Corp. (“1815 Carnegie”) to those individuals for aggregate consideration of $1.7 million. 1815 Carnegie holds a permit to operate a cannabis dispensary in the City of Santa Ana, CA. On August 12, 2021, the Company also entered into a Supply agreement with an affiliate of purchasers to obtain a right of first refusal to purchase cannabis bulk and distillate to be integrated into the Company cannabis goods and products, as well as a Retail Space Agreement with 1815 Carnegie, pursuant to which the Company will receive guaranteed placement of 15 SKUs at the cannabis dispensary. Each agreement has a term of three years. The Company recorded a gain on the sale of the asset of $1.7 million during the year ended December 31, 2021, which is presented within net income from discontinued operations. On December 7, 2021, 620 Dyer LLC, a wholly-owned subsidiary of the Company, entered into a Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate (the “PSA”) with FRO III/SMA Acquisitions, LLC (the “Buyer”) pursuant to which the Company agreed to sell and the Buyer agreed to purchase the real property located at 620 East Dyer Road, Santa Ana, CA (the “Property”) for $13.4 million in cash. There is no material relationship between the Company or its affiliates and the Buyer other than in respect of the transactions contemplated by the PSA. The real estate asset was classified as available-for-sale as of December 31, 2021, pending final closing of the PSA. OneQor During 2020, Management suspended the operations of OneQor Technologies due to (i) a lack of proper growth in customer acquisition and revenue for this CBD operation during the COVID-19 pandemic and (ii) the overall financial health of the Company as a result of COVID-19 and social unrest. The Company plans to focus its attention and resources on growing its THC business. Blum Santa Ana On February 26, 2020, the Company agreed to transfer governance and control of our dispensary operation located at 2911 Tech Center Drive, Santa Ana, CA to Martin Vivero and Tetra House Co. (“Tetra”), who are unaffiliated third parties. The Company received $2.00 million at closing and $1.45 million during the 3rd Quarter of 2020 in exchange for these assets. MediFarm So Cal Inc. (“MediFarm So Cal”), a wholly-owned subsidiary of the Company, terminated the existing management services agreement with 55 OC Community Collective Inc. (“55 OC”). 55 OC is a mutual benefit corporation which holds a cannabis license with the City of Santa Ana in the State of California. Previously, MediFarm So Cal managed the dispensary known as “Blum Santa Ana” under the license of 55 OC. Control of 55 OC was transferred to Mr. Vivero and Tetra House Co. via a new management services agreement and the appointment of Mr. Vivero to the Board of Directors of 55 OC, which was pending final regulatory approval as of the date of our report. The Company recognized a loss upon sale of the assets equal to the difference between the consideration paid and the book value of the assets as of the disposition date, less direct costs to sell, and reflected such loss in discontinued operations. The following table summarizes the transaction: (in thousands) Total consideration $ 3,800 Net book value of assets divested and liabilities transferred Inventory 23 Prepaid and other current assets 33 Property, plant & equipment 98 Intangible assets and goodwill 6,565 Other long-term assets 54 Lease liability, net of right-of-use asset (78) Net book value of assets divested and liabilities transferred 6,695 Loss on sale $ (2,895) Edible Garden On March 30, 2020, Edible Garden Corp. (“Edible Garden”), a wholly-owned subsidiary of Unrivaled Brands, Inc. (the “Company”), entered into and closed an Asset Purchase Agreement (the “Purchase Agreement”) with Edible Garden AG Inc. (the “Purchaser”), pursuant to which Edible Garden sold and the Purchaser purchased substantially all of the assets of Edible Garden (the “Business”). The consideration paid for the Business included a five Michael James, the Company’s former Chief Financial Officer, is a principal of the Purchaser. There is no material relationship between the Company or its affiliates and the Purchaser other than as set forth in the previous sentence. The Purchase Agreement contains customary conditions, representations, warranties, indemnities and covenants by, among, and for the benefit of the parties. The Company recognized a loss upon sale of the assets equal to the difference between the consideration paid and the book value of the assets as of the disposition date and reflected such loss in discontinued operations. The following table summarizes the transaction: (in thousands) Consideration Fair value of note receivable $ 2,960 Fair value of options 330 Less: cash transferred to purchaser (30) Total consideration $ 3,260 Net book value of assets divested and liabilities transferred Accounts receivable $ 360 Inventory 520 Other current assets 80 Property, plant and equipment 4,100 Intangible assets 70 Other long-term assets 200 Accounts payable and accrued expenses (1,700) Lease liabilities, net of right of use assets (70) Net book value of assets divested and liabilities transferred 3,560 Loss on sale $ (300) The expected and completed sales of our Nevada operations, expected and completed sales of real estate assets, and assets divested during the years ended December 31, 2021 and 2020 represent a strategic shift that will have a major effect on the Company’s operations and financial results. As a result, Management determined the results of these components qualified for discontinued operations presentation in accordance with ASC 205, “Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity.” Operating results for discontinued operations were comprised of the following: (in thousands) Year ended December 31, 2021 2020 Total revenues $ 12,900 $ 13,354 Cost of goods sold 7,687 10,905 Gross profit 5,213 2,449 Selling, general and administrative expenses 6,523 10,495 Impairment of assets — 10,359 Loss on sale of assets (6,583) 1,962 Income (Loss) from operations $ 5,273 $ (20,367) Interest expense (976) (565) Other income (loss) 7,806 12 Income (Loss) from discontinued operations $ 12,103 $ (20,920) Income (Loss) from discontinued operations per common share attributable to Terra Tech Corp common stockholders - basic and diluted $ 0.02 $ (0.03) The carrying amounts of the major classes of assets and liabilities for the discontinued operations are as follows: (in thousands) December 31, December 31, Cash 1,544 671 Accounts receivable, net 1,553 483 Inventory 1,359 2,152 Prepaid expenses and other assets 39 23 Property, equipment and leasehold improvements, net 17,661 10,207 Other assets 323 582 Assets of discontinued operations $ 22,479 $ 14,118 Accounts payable and accrued expenses $ 1,170 $ 1,380 Short-term Debt — — Deferred gain on sale of assets — 8,783 Long-term lease liabilities 184 335 Liabilities of discontinued operations $ 1,354 $ 10,498 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION In 2020 given the limited nature of the company's assets, the Company had only one reportable segment. During 2021, the Company acquired assets and opened new operations, such that it has determined previously insignificant operating segments are now significant and are reportable segments requiring disclosure in accordance with ASC 280. Our reportable segments are as follows: (in thousands) % of Total Revenue Year Ended December 31, Year Ended December 31, Segment 2021 2020 2021 2020 Cannabis Retail $ 24,540 $ 5,400 51.5 % 87.6 % Cannabis Cultivation & Distribution $ 23,131 $ 460 48.5 % 7.5 % Corporate and Other $ 2 $ 301 — % 4.9 % Total $ 47,673 $ 6,161 100.0 % 100.0 % Cannabis Retail Either independently or in conjunction with third parties, we operate medical marijuana and adult use cannabis dispensaries in California. All our retail dispensaries offer a broad selection of medical and adult use cannabis products including flower, concentrates and edibles. Cannabis Cultivation and Distribution We operate distribution centers in California and Oregon that distribute our own branded products as well as third party products to our own dispensaries and to other non-affiliated medical marijuana and/or adult use cannabis dispensaries. (in thousands) For the Year Ended December 31, 2021 Cannabis Retail Cannabis Cultivation and Distribution Corporate and Other Total Total Revenues $ 24,540 $ 23,131 $ 2 $ 47,673 Cost of goods sold 13,706 22,000 — 35,706 Gross Profit 10,834 1,131 2 11,967 Selling, general and administrative expenses 12,327 7,961 27,969 48,257 Impairment of Assets 6,171 — — 6,171 (Gain) / Loss on sale of assets — 56 (3,189) (3,133) Loss from operations (7,664) (6,886) (24,778) (39,328) Other income / (expense): Extinguishment of debt income / (expense) — 116 (6,092) (5,976) Gain / (loss) on investments — — 5,337 5,337 Interest income / (expense) (85) (186) (1,505) (1,776) Other income / (loss) 110 85 (628) (433) Total other income 25 15 (2,888) (2,848) Loss from continuing operations before provision for income taxes $ (7,639) $ (6,871) $ (27,666) $ (42,176) Total assets at December 31, 2021 $ 67,821 $ 476 $ 203,527 $ 271,824 |
LITIGATION AND CLAIMS
LITIGATION AND CLAIMS | 12 Months Ended |
Dec. 31, 2021 | |
Litigation Settlement [Abstract] | |
LITIGATION AND CLAIMS | LITIGATION AND CLAIMSThe Company is the subject of lawsuits and claims arising in the ordinary course of business from time to time. The Company reviews any such legal proceedings and claims on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and it discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued if such disclosure is necessary for the Company’s financial statements to not be misleading. To estimate whether a loss contingency should be accrued by a charge to income, the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss. The Company does not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated. Based upon present information, the Company determined that there were no material matters that required an accrual as of December 31, 2021.The company is currently involved in a breach of contract action brought by former LTRMN, Inc. (“LTRMN”) employee, Kurtis Magee, alleging that he is owed a severance payment pursuant to his separation agreement with LTRMN (signed July 8, 2019). Magee was employed by LTRMN, Inc. for approximately 90 days as the Chief Administrative Officer of the company. When Magee was released from employment with LTRMN, the company negotiated a separation agreement with him that became payable upon the close of the acquisition of LTRMN by UMBRLA, Inc. Shortly thereafter a dispute arose whether Magee breached the separation agreement by using proprietary and confidential information of LTRMN to solicit LTRMN clients, and Magee filed suit in August 2020 seeking contract damages in the amount of $835,000, the amount of the severance payment. LTRMN, UMBRLA, and BRND HOUSE, Inc. are named as parties (“Defendants”). Defendants have successfully defended against two motions for a writ of attachment and a summary judgment motion. On October 27, 2021, Defendants’ demurrer to the First Amended Complaint (“FAC”) was overruled. Plaintiff's deposition is scheduled for April 6, 2022. Trial in this matter is set for December 5, 2022. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS On March 30, 2020, Edible Garden Corp. (“Edible Garden”), a wholly-owned subsidiary of Terra Tech Corp. (the “Company”), entered into and closed an Asset Purchase Agreement (the “Purchase Agreement”) with Edible Garden Incorporated (the “Purchaser”), pursuant to which Edible Garden sold and the Purchaser purchased substantially all of the assets of Edible Garden (the “Business”). Michael James, the Company’s former Chief Financial Officer, is a principal of the Purchaser. There is no material relationship between the Company or its affiliates and the Purchaser other than as set forth in the previous sentence. The Purchase Agreement contains customary conditions, representations, warranties, indemnities and covenants by, among, and for the benefit of the parties. On December 31, 2019, the Company entered into a secured promissory note agreement with the Matthew Lee Morgan Trust, which is affiliated with Matthew Morgan, formerly the Chief Executive Officer of OneQor. The note matured on January 30, 2021, and bears interest at a rate of 10% per annum. The note was converted into the Company’s common stock at maturity. During the fiscal year ended December 31, 2020, the Company issued promissory notes totaling $1.80 million to OneQor. Derek Peterson and Mike Nahass, formerly the Chief Executive Officer and Chief Operating Officer, respectively, had minority ownership interests in OneQor. At the end of the fiscal year, management made the decision to fully-reserve for these loans due to their confidence in the completion of the merger with OneQor, which would result in the cancellation of these loans. On July 1, 2021, the Company entered into a Membership Interest Purchase Agreement with Nicholas Kovacevich and Dallas Imbimbo, pursuant to which the Company acquired 100% of the outstanding membership interests in Halladay Holding, LLC from Mr. Kovacevich and Mr. Imbimbo. Halladay Holding, LLC is the owner of real property located at 3242 S. Halladay Street, Santa Ana, CA 92705, where the Company operates a cannabis dispensary and maintains its principal office space. Pursuant to the Purchase Agreement, as consideration for the Acquisition, the Company paid Mr. Kovacevich and Mr. Imbimbo an aggregate purchase price of $4.60 million in cash. The Company had an independent third-party perform a valuation of the Property prior to entering into the Purchase Agreement. Mr. Kovacevich is a director of the Company and Mr. Imbimbo was a director of the Company. As such, the Acquisition is a related party transaction. During the fiscal year ended December 31, 2021, the Company contracted for $0.45 million in goods and services of Greenlane Holdings, Inc. Mr. Kovacevich, a director of the Company, is the CEO of Greenlane Holdings, Inc. All related party transactions are monitored quarterly by the Company and approved by the Audit Committee of the Board of Directors. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
GOING CONCERN | GOING CONCERN We have incurred significant losses in prior periods. For the year ended December 31, 2021, we incurred a pre-tax net loss from continuing operations of $42.18 million and, as of that date, we had an accumulated deficit of $250.02 million . For the year ended December 31, 2020, we incurred a net loss from continuing operations of $8.01 million and, as of that date, we had an accumulated deficit of $219.80 million. We expect to experience further significant net losses in 2022 and the foreseeable future. At December 31, 2021, we had a consolidated cash balance of approximately $6.89 million. W e have not been able to generate sufficient cash from operating activities to fund our ongoing operations. Our future success is dependent upon our ability to achieve profitable operations and generate cash from operating activities. There is no guarantee that we will be able to generate enough revenue and/or raise capital to support our operations. We will be required to raise additional funds through public or private financing, additional collaborative relationships or other arrangements until we are able to raise revenues to a point of positive cash flow. We are evaluating various options to further reduce our cash requirements to operate at a reduced rate, as well as options to raise additional funds, including obtaining loans and selling common stock. There is no guarantee that we will be able to generate enough revenue and/or raise capital to support our operations, or if we are able to raise capital, that it will be available to us on acceptable terms, on an acceptable schedule, or at all. The issuance of additional securities may result in a significant dilution in the equity interests of our current stockholders. Obtaining loans, assuming these loans would be available, will increase our liabilities and future cash commitments. There is no assurance that we will be able to obtain further funds required for our continued operations or that additional financing will be available for use when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease our operations. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On January 21, 2022, the Company sold its land in Spanish Springs, Nevada for $0.45 million to an unrelated third party. On February 1, 2022 the Company granted 294,452 shares Common Stock to Apollo Management Group, Inc. in exchange for the $50,000 Convertible Promissory Note that Apollo Management Group, Inc. held. On February 8, 2022, the Company paid the outstanding principal and interest on the $1.05 million promissory note held by Michael Nahass. This payment satisfied the obligation and retired the note. On February 10, 2022, the Company announced the successful closing of the sale of the Company’s non-operating real property and building located on Dyer Road in Santa Ana, CA (the “Dyer Property”) for $13.40 million. The sale results in the Company retiring $9.00 million of outstanding debt on the property. The Company is continuing to evaluate its options with respect to the license originally connected to the Dyer property, including consideration of the retail density in the area. If the city of Santa Ana grants approval to relocate licenses elsewhere in the city, the Company may consider using the dispensary license to open a dispensary in an underserved part of Santa Ana. Part of the $9.00 million of outstanding debt, that the Company retired in the Dyer property sale, was the $2.50 million promissory note held by Dominion Capital. On February 12, 2022 the Company's shelf registration was declared effective by the SEC. The Company filed for a shelf registration renewal on Form S-3 with the SEC on September 17, 2021. Our existing registration statement was extended six months as the SEC reviewed our request. The registration statement will allow the Company to issue, from time to time at prices and on declared terms to be determined at or prior to the time of the offering, shares of our Common Stock, par value $0.001 per share, shares of our preferred stock, par value $0.001 per share (our “Preferred Stock”), debt securities, warrants, rights, or purchase contracts, either individually or in units, with a total value of up to $100.00 million. On February 16, 2022, the Company received notice of forgiveness of a portion of its PPP loan. Approximately $542,000 of the $562,000 note was forgiven. The remainder is to be paid off over the next three years. On February 23, 2022 Eric Baum became Chairman of the board of directors for the company, succeeding Nicholas Kovacevich. Mr. Kovacevich remains on the board of directors. On February 28, 2022, the Company sold 25,000,000 shares for an aggregate sales price of $4,375,000 to Arthur Chan, an unrelated party. The shares were restricted. On March 9, 2022, the Company paid the outstanding principal and interest due on the line of credit facility. The payment satisfied the obligation and retired the debt. On March 10, 2022, the Company terminated the employment of Oren Schauble, the Company’s President. On March 10, 2022, the Company terminated the employment of Uri Kenig, the Company’s Chief Operating Officer, effective as of March 25, 2022. On March 13, 2022, the Company terminated the employment of Francis Knuettel II, the Company’s Chief Executive Officer. Mr. Knuettel will remain a director of the Company. The Company anticipates it will enter into separation agreements (each, a “Separation Agreement”) with each of Mr. Knuettel, Mr. Schauble, and Mr. Kenig regarding the compensation to be granted to each of them regarding their separation from the Company. In addition, the Company anticipates entering into a consulting agreement with Mr. Schauble (the “Schauble Consulting Agreement”) pursuant to which he will continue to provide certain services to the Company through a future agreed upon date. The Company intends to disclose the material terms of the Separation Agreements and the Schauble Consulting Agreement, as required by applicable law, at a later date after those agreements have been finalized and executed. On March 13, 2022, the Company appointed Tiffany Davis, a director of the Company, as the interim Chief Executive Officer of the Company. Ms. Davis was most recently Chief Executive Officer and Chief Financial Officer of Generation Alpha, Inc. and prior to her appointment as Chief Executive Officer in October 2019, was Generation Alpha’s Chief Operating Officer from February 2018. The Company anticipates entering into a consulting agreement with Ms. Davis (the “Davis Consulting Agreement”) pursuant to which she will provide certain services to the Company through a future agreed upon date. The Company intends to disclose the material terms of the Davis Consulting Agreement, as required by applicable law, at a later date after that agreement has been finalized and executed. Ms. Davis will remain a director of the Company On March 17, 2022, the Company entered into a consulting agreement with Oren Schauble, formerly the Conpany's President. The company shall grant 910,623 restricted shares of the Company's Common Stock in four monthly installments. On April 5, 2022, the Company and Mr. Schauble agreed to terms on a separation agreement. The Company agreed to pay Mr. Schauble 50% of the Employee's base salary and continue his medical benefits for a period of six months. On April 7, 2022, the Company sold its NuLeaf cultivation and production operations in Nevada for $6.50 million. On April 11, 2022, the Company and People's California, LLC agreed to amend a portion of the November 22, 2021 Closing Documents (Primary Membership Interest Purchase Agreement, Secondary Membership Interest Purchase Agreement, Secured Promissory Note, and other ancillary agreements) . The company will pay People's California, LLC $3 million upon execution of this amendment and $5 million in June of 2022. The remainder of the promissory note held by People's California, LLC shall be subordinated to a future debt facility. The promissory note becomes convertible to the Company's Common Stock at a yet to be agreed upon exercise price. On April 12, 2022, the Company and Francis Knuettel, formerly the Company's Chief Executive Officer, agreed to terms on a separation agreement. The company agreed to pay Mr. Knuettel 50% of his annual base salary and continue his medical benefits for a period of six months. Mr. Knuettel's unvested shares and options shall vest immediately. As part of this agreement Mr. Knuettel has resigned as a director of the Company. On April 14, 2022, the Company and Dallas Imbimbo, an advisor to the company and a director of the Company, agreed to terms on a separation agreement. The company agreed to vest 100% of Mr. Imbimbo's restricted common stock granted pursuant to the Advisor agreement with Mr. Imbimbo. The company agreed to vest 100% of the options to purchase shares of the Company's common stock granted as part Mr. Imbimbo's Independent Director Agreement. The Company will pay Mr. Imbimbo $83,333.30 in cash compensation. As part of this agreement Mr. Imbimbo has resigned as a director of the Company and as an Advisor to the company. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and with the instructions to Securities Exchange Commission (“SEC”) Form 10-K and Regulation S-X and reflect the accounts and operations of the Company and those of our subsidiaries in which we have a controlling financial interest. In accordance with the provisions of FASB or ASC 810, “Consolidation” , we consolidate any variable interest entity (“VIE”), of which we are the primary beneficiary. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. ASC 810 requires a variable interest holder to consolidate a VIE if that party has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. We do not consolidate a VIE in which we have a majority ownership interest when we are not considered the primary beneficiary. We evaluate our relationships with all the VIEs on an ongoing basis to reassess if we continue to be the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of operations and cash flows for the years ended December 31, 2021 and 2020 have been included. |
Going Concern | Going Concern The accompanying financial statements have been prepared assuming that we will continue as a going concern. In an effort to achieve liquidity that would be sufficient to meet all of our commitments, we have undertaken a number of actions, including minimizing capital expenditures and reducing recurring expenses. However, we believe that even after taking these actions, we will not have sufficient liquidity to satisfy all of our future financial obligations. The risks and uncertainties surrounding our ability to raise capital, our limited capital resources, and the weak industry conditions impacting our business raise substantial doubt as to our ability to continue as a going concern. See Note 23 – ” Going Concern ” of the Notes to Consolidated Financial Statements for additional information. |
Non-Controlling Interest | Non-Controlling Interest Non-controlling interest is shown as a component of stockholders’ equity on the consolidated balance sheets and the share of income (loss) attributable to non-controlling interest is shown as a component of income (loss) in the consolidated statements of operations. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of total net revenue and expenses in the reporting periods. The Company regularly evaluates estimates and assumptions related to allowances for doubtful accounts, sales returns, inventory valuation, stock-based compensation expense, goodwill and purchased intangible asset valuations, investments, deferred income tax asset valuation allowances, uncertain tax positions, and litigation and other loss contingencies. These estimates and assumptions are based on current facts, historical experience and various other factors that the Company believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue, costs and expenses that are not readily apparent from other sources. The actual results the Company experiences may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications did not affect net loss, revenues and stockholders’ equity. See Note 19, “Discontinued Operations” for further discussion regarding discontinued operations. |
Trade and other Receivables | Trade and other Receivables The Company extends non-interest bearing trade credit to its customers in the ordinary course of business which is not collateralized. Accounts receivable are shown on the face of the consolidated balance sheets, net of an allowance for doubtful accounts. The Company analyzes the aging of accounts receivable, historical bad debts, customer creditworthiness and current economic trends, in determining the allowance for doubtful accounts. The Company does not accrue interest receivable on past due accounts receivable. The reserve for doubtful accounts was $3.68 million and nil as of December 31, 2021 and 2020, respectively. |
Investments | Investments Investments in unconsolidated affiliates are accounted for under the cost or the equity method of accounting, as appropriate. The Company accounts for investments in limited partnerships or limited liability corporations, whereby the Company owns a minimum of 5% of the investee's outstanding voting stock, under the equity method of accounting. These investments are recorded at the amount of the Company’s investment and adjusted each period for the Company’s share of the investee’s income or loss, and dividends paid. As investments accounted for under the cost method do not have readily determinable fair values, the Company only estimates fair value if there are identified events or changes in circumstances that could have a significant adverse effect on the investment’s fair value. Publicly held equity securities are recorded at fair value with unrealized gains or losses resulting from changes in fair value reflected as unrealized gains or losses on equity securities in our consolidated statements of operations. |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value, with cost being determined on the first-in, first-out (“FIFO”) method of accounting. The Company periodically reviews physical inventory for excess, obsolete, and potentially impaired items and reserves. The reserve estimate for excess and obsolete inventory is based on expected future use. The reserve estimates have historically been consistent with actual experience as evidenced by actual sale or disposal of the goods. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses consist of various payments that the Company has made in advance for goods or services to be received in the future. These prepaid expenses include advertising, insurance, and service or other contracts requiring up-front payments. |
Property, Equipment and Leasehold Improvements, Net | Property, Equipment and Leasehold Improvements, Net Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The approximate useful lives for depreciation of our property, equipment and leasehold improvements are as follows: thirty-two years for buildings; three to eight years for furniture and equipment; three to five years for computer and software; five years for vehicles and the shorter of the estimated useful life or the underlying lease term for leasehold improvements. Repairs and maintenance expenditures that do not extend the useful lives of related assets are expensed as incurred. Expenditures for major renewals and improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. The Company continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, “Property, Plant, and Equipment.” When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. See Note 7 , “Property, Equipment and Leasehold Improvements, Net” for further information. |
Intangible Assets | Intangible Assets Intangible assets continue to be subject to amortization, and any impairment is determined in accordance with ASC 360, “Property, Plant, and Equipment,” intangible assets are stated at historical cost and amortized over their estimated useful lives. The Company uses a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. The approximate useful lives for amortization of our intangible assets are as follows: Customer Relationships 3 to 5 Years Trademarks 2 to 8 Years Dispensary Licenses 14 years The Company reviews intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset (asset group), the Company will write the carrying value down to the fair value in the period identified. Intangible assets that have indefinite useful lives are tested annually for impairment, or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount of the asset group exceeds its fair value. |
Goodwill | Goodwill Goodwill is measured as the excess of consideration transferred and the net of the acquisition date fair value of assets acquired, and liabilities assumed in a business acquisition. In accordance with ASC 350, “Intangibles-Goodwill and Other,” goodwill and other intangible assets with indefinite lives are no longer subject to amortization but are tested for impairment annually or whenever events or changes in circumstances indicate that the asset might be impaired. The Company reviews the goodwill allocated to each of our reporting units for possible impairment annually as of September 30 and whenever events or changes in circumstances indicate carrying amount may not be recoverable. In the impairment test, the Company measures the recoverability of goodwill by comparing a reporting unit’s carrying amount, including goodwill, to the estimated fair value of the reporting unit. The carrying amount of each reporting unit is determined based upon the assignment of our assets and liabilities, including existing goodwill and other intangible assets, to the identified reporting units. Where an acquisition benefits only one reporting unit, the Company allocates, as of the acquisition date, all goodwill for that acquisition to the reporting unit that will benefit. Where the Company has had an acquisition that benefited more than one reporting unit, The Company has assigned the goodwill to our reporting units as of the acquisition date such that the goodwill assigned to a reporting unit is the excess of the fair value of the acquired business, or portion thereof, to be included in that reporting unit over the fair value of the individual assets acquired and liabilities assumed that are assigned to the reporting unit. If the carrying amount of a reporting unit is in excess or its fair value, the Company recognizes an impairment charge equal to the amount in excess. |
Notes Receivable | Notes Receivable The Company reviews all outstanding notes receivable for collectability as information becomes available pertaining to the Company’s inability to collect. An allowance for notes receivable is recorded for the likelihood of non-collectability. The Company accrues interest on notes receivable based net realizable value. The allowance for uncollectible notes was nil as of December 31, 2021 and 2020, respectively. |
Assets Held for Sale and Discontinued Operations | Assets Held for Sale and Discontinued Operations Assets held for sale represent furniture, equipment, and leasehold improvements less accumulated depreciation as well as any other assets that are held for sale in conjunction with the sale of a business. The Company records assets held for sale in accordance with ASC 360 , “Property, Plant, and Equipment,” at the lower of carrying value or fair value less costs to sell. Fair value is based on the estimated proceeds from the sale of the facility utilizing recent purchase offers, market comparables and/or data. Our estimate as to fair value is regularly reviewed and subject to changes in the commercial real estate markets and our continuing evaluation as to the facility’s acceptable sale price. The reclassification takes place when the assets are available for immediate sale and the sale is highly probable. These conditions are usually met from the date on which a letter of intent or agreement to sell is ready for signing. The Company follows the guidance within ASC 205, “Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity” when assets held for sale represent a strategic shift in the Company’s operations and financial results. |
Fair Value of Financial Instruments, Non-Financial Instruments and Derivative Assets | Fair Value of Financial Instruments, Non-Financial Instruments and Derivative Assets The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 –Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. |
Business Combinations | Business Combinations The Company accounts for its business acquisitions in accordance with ASC 805-10, “ Business Combinations. ” The Company allocates the total cost of the acquisition to the underlying net assets based on their respective estimated fair values. As part of this allocation process, the Company identifies and attributes values and estimated lives to the intangible assets acquired. These determinations involve significant estimates and assumptions regarding multiple, highly subjective variables, including those with respect to future cash flows, discount rates, asset lives, and the use of different valuation models, and therefore require considerable judgment. The Company’s estimates and assumptions are based, in part, on the availability of listed market prices or other transparent market data. These determinations affect the amount of amortization expense recognized in future periods. The Company bases its fair value estimates on assumptions it believes to be reasonable but are inherently uncertain. |
Revenue Recognition and Performance Obligations | Revenue Recognition and Performance Obligations Revenue from our retail dispensaries is recorded at the time customers take possession of the product. Revenue from our retail dispensaries is recognized net of discounts, promotional adjustments and returns. We collect taxes on certain revenue transactions to be remitted to governmental authorities, which may include sales, excise and local taxes. These taxes are not included in the transaction price and are, therefore, excluded from revenue. Upon purchase, the Company has no further performance obligations and collection is assured as sales are paid for at time of purchase. The Company recognizes revenue from cultivation, manufacturing and distribution product sales when our customers obtain control of our products. Revenue is recorded when the customer is determined to have taken control of the product. This determination is based on the customer specific terms of the arrangement and gives consideration to factors including, but not limited to, whether the customer has an unconditional obligation to pay, whether a time period or event is specified in the arrangement and whether the Company can mandate the return or transfer of the products. Revenue is recorded net of taxes collected from customers that are remitted to governmental authorities with collected taxes recorded as current liabilities until remitted to the relevant government authority. Disaggregation of Revenue The table below includes revenue disaggregated by geographic location for the years ended December 31, 2021 and 2020: (in thousands) 2021 2020 California $ 42,120 $ 6,161 Oregon 5,553 — Total $ 47,673 $ 6,161 Contract Balances Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC Topic 606. Contract Estimates and Judgments The Company’s revenues accounted for under ASC Topic 606, generally, do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The sales prices are generally fixed at the point of sale and all consideration from contracts is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold includes the costs directly attributable to product sales and includes amounts paid for finished goods, such as flower, edibles, and concentrates, as well as packaging and delivery costs. It also includes the labor and overhead costs incurred in cultivating and producing cannabis flower and cannabis-derived products. Overhead expenses include allocations of rent, administrative salaries, utilities, and related costs. |
Advertising Expenses | Advertising Expenses The Company expenses advertising costs as incurred in accordance with ASC 720-35, “Other Expenses – Advertising Cost.” Advertising expenses from continuing operations totaled $1.29 million and $0.19 million in the years ended December 31, 2021 and 2020, respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for its stock-based awards in accordance with ASC Subtopic 718-10, “Compensation – Stock Compensation”, which requires fair value measurement on the grant date and recognition of compensation expense for all stock-based payment awards made to employees and directors, including restricted stock awards. For stock options, the Company estimates the fair value using a closed option valuation (Black-Scholes) model. The fair value of restricted stock awards is based upon the quoted market price of the common shares on the date of grant. The fair value is then expensed over the requisite service periods of the awards, net of estimated forfeitures, which is generally the performance period and the related amount is recognized in the consolidated statements of operations. The Black-Scholes option-pricing model requires the input of certain assumptions that require the Company’s judgment, including the expected term and the expected stock price volatility of the underlying stock. The assumptions used in calculating the fair value of stock-based compensation represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change resulting in the use of different assumptions, stock-based compensation expense could be materially different in the future. The Company accounts for forfeitures of stock-based awards as they occur. |
Income Taxes | Income Taxes The provision for income taxes is determined in accordance with ASC 740, “Income Taxes” . The Company files a consolidated United States federal income tax return. The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. At December 31, 2020, such net operating losses were offset entirely by a valuation allowance. At December 31, 2021, we have released the valuation allowance due to our net deferred tax liability position. The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50.0% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations. |
Loss Per Common Share | Loss Per Common Share In accordance with the provisions of ASC 260, “Earnings Per Share,” net loss per share is computed by dividing net loss by the weighted-average shares of common stock outstanding during the period. During a loss period, the effect of the potential exercise of stock options, warrants, convertible preferred stock, and convertible debt are not considered in the diluted loss per share calculation since the effect would be anti-dilutive. The results of operations were a net loss for the years ended December 31, 2021 and 2020. Therefore, the basic and diluted weighted-average shares of common stock outstanding were the same for all years presented. Potentially dilutive securities that are not included in the calculation of diluted net loss per share because their effect is anti-dilutive are as follows (in common equivalent shares): Year Ended December 31, 2021 2020 Common stock warrants 30,677,637 1,076,555 Common stock options 88,251,380 17,492,830 118,929,017 18,569,385 |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standard s FASB ASU No. 2020-06 “ Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ” – Issued in August 2020, ASU 2020-06 simplifies the accounting for convertible instruments by eliminating the requirement to separate embedded conversion features from the host contract when the conversion features are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital. By removing the separation model, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost and the interest rate on convertible debt instruments will typically be closer to the coupon interest rate when applying the guidance in Topic 835, Interest. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those years. The Company adopted ASU 2020-06 as of January 1, 2021, utilizing the modified retrospective method of adoption. As a result of adoption of the new standard, previously recognized beneficial conversion features for convertible debt instruments outstanding as of January 1, 2021 were removed from additional paid-in capital and the debt discount. A cumulative impact adjustment was recorded to account for a reduction in interest expense due to a decrease in the discount, which is recognized as interest expense upon conversion of the convertible notes. The January 1, 2021 cumulative effect adjustment to the Company’s financial position was as follows (in thousands): As Reported Cumulative Effect Adjustment As Reported December 31, 2020 January 1, 2021 Additional Paid-In Capital $ 275,060 $ 1,071 $ 276,131 Accumulated Deficit $ 219,803 $ (1,059) $ 218,744 Debt Discount $ 50 $ (12) $ 38 FASB ASU No. 2019-12 , “Simplifying the Accounting for Income Taxes” - Issued in December 2020, ASU 2019-12 eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company adopted the standard January 1, 2021. Adoption had no material impact on the Company’s financial position or results of operations.. FASB Accounting Standards Update (“ASU”) No. 2016-13 , “Measurement of Credit Losses on Financial Instruments” - Issued in June 2016 , ASU 2016-13 replaces the “incurred loss” credit losses framework with a new accounting standard that requires management's measurement of the allowance for credit losses to be based on a broader range of reasonable and supportable information for lifetime credit loss estimates. The Company adopted the standard January 1, 2020. Adoption had no material impact on the Company’s financial position or results of operations. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Finite-lived Intangible Assets Amortization Expense | The approximate useful lives for amortization of our intangible assets are as follows: Customer Relationships 3 to 5 Years Trademarks 2 to 8 Years Dispensary Licenses 14 years |
Schedule of Derivative Liabilities at Fair Value | The following tables present the Company’s financial instruments that are measured and recorded at fair value on the Company’s balance sheets on a recurring basis, and their level within the fair value hierarchy as of December 31, 2020: Investments as of December 30, 2020: Amount Level 1 Level 2 Level 3 Warrants to acquire shares of HydroFarm $ 10,195 $ — $ 10,195 $ — Shares of HydroFarm 23,850 — 23,850 — Option to acquire common shares of Edible Garden: 330 — — 330 Total $ 34,375 $ — $ 34,045 $ 330 |
Schedule of Revenue by Major Customers by Reporting Segments | The table below includes revenue disaggregated by geographic location for the years ended December 31, 2021 and 2020: (in thousands) 2021 2020 California $ 42,120 $ 6,161 Oregon 5,553 — Total $ 47,673 $ 6,161 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Potentially dilutive securities that are not included in the calculation of diluted net loss per share because their effect is anti-dilutive are as follows (in common equivalent shares): Year Ended December 31, 2021 2020 Common stock warrants 30,677,637 1,076,555 Common stock options 88,251,380 17,492,830 118,929,017 18,569,385 |
Schedule of Error Corrections and Prior Period Adjustments | The January 1, 2021 cumulative effect adjustment to the Company’s financial position was as follows (in thousands): As Reported Cumulative Effect Adjustment As Reported December 31, 2020 January 1, 2021 Additional Paid-In Capital $ 275,060 $ 1,071 $ 276,131 Accumulated Deficit $ 219,803 $ (1,059) $ 218,744 Debt Discount $ 50 $ (12) $ 38 |
VARIABLE INTEREST ENTITY ARRA_2
VARIABLE INTEREST ENTITY ARRANGEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Investments [Abstract] | |
Schedule of Intercompany Transactions and Balances | The aggregate carrying values of Sparks Cultivation, LLC and NuLeaf Reno Production, LLC assets and liabilities, after elimination of any intercompany transactions and balances, in the consolidated balance sheets were as follows: (in thousands) December 31, December 31, Current assets: Cash $ 1,544 $ 671 Accounts receivable, net 1,553 483 Inventory 1,359 3,118 Prepaid expenses and other current assets 39 21 Total current assets 4,495 4,293 Property, equipment and leasehold improvements, net 5,099 7,442 Other assets 295 395 TOTAL ASSETS $ 9,889 $ 12,130 Liabilities: Total current liabilities $ 350 $ 396 Total long-term liabilities 184 307 TOTAL LIABILITIES $ 534 $ 703 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventory as of December 31, 2021 and 2020 consisted of the following: (in thousands) December 31, December 31, Raw materials $ 2,258 $ — Work-in-progress 1,077 392 Finished goods 3,844 367 Total inventory $ 7,179 $ 759 |
PROPERTY EQUIPMENT AND LEASEH_2
PROPERTY EQUIPMENT AND LEASEHOLD IMPROVEMENTS NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, equipment, and leasehold improvements, net consists of the following: (in thousands) December 31, December 31, Land and building $ 7,788 $ 206 Furniture and equipment 3,873 1,135 Computer hardware 348 152 Leasehold improvements 14,409 5,850 Vehicles 1,142 123 Construction in progress 1,832 8,500 Subtotal 29,392 15,966 Less accumulated depreciation (5,663) (3,336) Property, equipment and leasehold improvements, net $ 23,729 $ 12,630 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | The table below summarizes the changes in the carrying amount of goodwill: Balance at December 31, 2019 $ 21,471 Impairment (15,300) Balance at December 31, 2020 6,171 Goodwill arising from acquisitions 48,132 Impairment (6,171) Balance at December 31, 2021 $ 48,132 |
Schedule of Finite-Lived Intangible Assets | Intangible assets consisted of the following as of December 31, 2021 and 2020: (in Thousands) December 31, 2021 December 31, 2020 Estimated Useful Life Gross Accumulated Amortization Net Gross Accumulated Amortization Net Amortizing Intangible Assets: Customer Relationships 3 to 5 $ 7,400 $ (7,400) $ — $ 7,400 $ (7,400) $ — Trademarks and Patent 2 to 8 4,500 (750) 3,750 196 (187) 9 Operating Licenses 14 100,701 (6,864) 93,837 10,270 (3,485) 6,785 Total Amortizing Intangible Assets 112,601 (15,014) 97,587 17,866 (11,072) 6,794 Non-Amortizing Intangible Assets: Trade Name Indefinite 32,050 — 32,050 920 — 920 Total Non-Amortizing Intangible Assets 32,050 — 32,050 920 — 920 Total Intangible Assets, Net $ 144,651 $ (15,014) $ 129,637 $ 18,786 $ (11,072) $ 7,714 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Based solely on the amortizable intangible assets recorded as of December 31, 2021, the Company estimates amortization expense for the next five years to be as follows: (in thousands) Year Ending December 31, 2022 2023 2024 2025 2026 and thereafter Total Amortization expense $ 9,443 $ 8,693 $ 7,193 $ 7,193 $ 65,065 $ 97,587 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued expenses consist of the following: (in thousands) December 31, December 31, Accounts Payable $ 16,804 $ 6,027 Tax Liabilities 5,147 337 Accrued Payroll and Benefits 1,409 782 Current Lease Liabilities 3,120 694 Other Accrued Expenses 5,423 385 Total Accounts Payable and Accrued Expenses $ 31,903 $ 8,225 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Notes Payable [Abstract] | |
Schedule of Debt | Notes payable consists of the following: (in thousands) December 31, December 31, Promissory note dated January 18, 2018, issued for the purchase of real property. The promissory note is collateralized by the land and building purchased and matures January 18, 2022. The promissory note bears interest at 12.0% for year one and escalates 0.5% per year thereafter. The full principle balance and accrued interest are due at maturity. In the event of default, the note is convertible at the holder's option. 6,500 $ 6,500 Promissory note dated October 5, 2018, issued for the purchase of real property. Matured October 5, 2021. The promissory note bore interest at 12.0% for year one and escalated 0.5% per year thereafter up to 13.5%. In the event of default, the note was convertible at the holder's option. — 1,600 Promissory note dated June 11, 2019, issued to accredited investors, which matured December 31, 2021 and bore interest at a rate of 7.5% per annum. The conversion price was the lower of $4.50 or 87% of the average of the two (2) lowest VWAPs in the thirteen (13) trading days prior to the conversion date. — 2,800 Promissory note dated October 21, 2019, issued to accredited investors, which matured April 21, 2021 and bore interest at a rate of 7.5% per annum. The conversion price was the lower of $4.50 or 87% of the average of the two (2) lowest VWAPs in the thirteen (13) trading days prior to the conversion date. — 725 Secured promissory note dated December 30, 2019, issued to Matthew Lee Morgan Trust (a related party), which matured January 30, 2021, and bore interest at a rate of 10% per annum. — 500 Secured promissory note dated January 10, 2020, issued to an unaffiliated third party. The note matured on July 10, 2021 and bore interest at a rate of 15.0% per annum. — 1,000 Promissory note dated July 29, 2020, issued to an unaffiliated third party. The note bore interest at a rate of 8% per annum and matured on April 28, 2021. — 1,000 Promissory note dated May 4, 2020, issued to Harvest Small Business Finance, LLC, an unaffiliated third party. The loan is part of the Paycheck Protection Program ("PPP Loan") offered by the U.S. Small Business Administration. The interest rate on the note is 1.0%. The note requires interest and principle payments seven months from July 2020. The note matures on May 4, 2022. 562 562 Unsecured promissory note dated January 22, 2021, issued to Michael Nahass (a related party), which matures January 25, 2022, and bears interest at a rate of 3% per annum. 1,050 Convertible promissory note dated January 25, 2021, issued to accredited investors, which matures July 22, 2022 and bears interest at a rate of 3% per annum. The conversion price is $0.175 per share. 3,500 Promissory note dated July 27, 2021, issued to Arthur Chan, which matures July 26, 2024, and bears interest at a rate of 8% per annum. 2,500 Senior Secured Promissory Note dated November 22, 2021 issued to Dominion Capital LLC, which matures on February 22, 2022 and bears interest at a rate of 12% per annum. 2,500 Unsecured promissory note without interest owed to a related party. The loan, which is paid in 20 equal installments, matures on August 1, 2022. 90 Promissory note dated June 1, 2020, issued as part of the Paycheck Protection Program ("PPP Loan") offered by the U.S. Small Business Administration. The interest rate on the note is 1.0%. The note matures on June 1, 2022. 297 Line of credit agreement entered on March 31, 2021, which matures on March 31, 2022 and bears interest of 2.9% per 30 days. 4,500 Promissory note dated October 1, 2021, issued to Sterling Harlan as part of the SilverStreak Solutions acquisition. The interest rate on the note is 3%. The note matures April 1, 2022. 2,000 Promissory note dated October 1, 2021, issued to Sterling Harlan as part of the SilverStreak Solutions acquisition. The interest rate on the note is 3%. The note matures October 1, 2022. 2,500 Secured promissory note dated November 22, 2021 issued to People's California, LLC, which matures on November 22, 2023 and bears interest at a rate of 8% per annum. Payments due include $2.00 million plus accrued interest for the first twelve months followed by payments of $1.00 million plus accrued interest until maturity. 28,569 Promissory note dated May 1, 2019, assumed by the Company on July 1, 2021 in connection with the purchase of real property, from a related party. The note matures on May 15, 2039 and bears interest at a rate of 9.89% per annum. 2,954 Notes payable - promissory notes $ 57,522 $ 14,687 Vehicle loans 204 29 Less: Short term debt (45,749) (8,033) Less: Debt discount (1,971) (51) Net Long Term Debt $ 10,006 $ 6,632 |
Schedule of Maturities of Long-term Debt | (in thousands) Year Ending December 31, 2022 2023 2024 2039 Total Total Debt $ 45,749 $ 6,523 $ 2,500 $ 2,954 $ 57,726 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of Operating Lease ROU Assets and Lease Liabilities | The table below presents total operating right-of-use assets and lease liabilities as of December 31, 2021: (in thousands) Operating right-of-use assets $ 24,448 Operating lease liabilities 24,436 |
Schedule of Maturities of Operating Lease Liabilities | The table below presents the maturities of operating lease liabilities as of December 31, 2021: (in thousands) 2022 $ 5,370 2023 5,301 2024 5,215 2025 4,324 2026 4,209 Thereafter 14,005 Total lease payments 38,424 Less: discount (13,988) Total operating lease liabilities $ 24,436 |
Operating Lease Costs | The table below presents the weighted average remaining lease term for operating leases and weighted average discount rate used in calculating operating lease right-of-use assets: December 31, Weighted average remaining lease term (years) 5.71 Weighted average discount rate 11.4 % |
TAX EXPENSE (Tables)
TAX EXPENSE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes consisted of the following for the years ended December 31, 2021 and 2020. Year Ended December 31, Current: 2021 2020 Federal 108 — State 860 — Foreign — — Total current tax expense 968 — Year Ended December 31, Deferred: 2021 2020 Federal 1,112 — State (277) — Foreign — Total deferred tax expense 835 — Total Tax Provision 1,803 — |
Schedule of Deferred Tax Assets and Liabilities | The components of deferred income tax assets and (liabilities) are as follows: Year Ended December 31, 2021 2020 Deferred income tax assets: Options expense $ — $ 2,871 Depreciation — 194 Allowance for Doubtful Accounts — 291 Accrued Expenses 58 — Net operating Losses 5,010 19,676 Total 5,068 23,032 Deferred income tax liabilities: Fixed Assets and Intangibles (11,094) — Leases (96) — Unrealized gain on investments — (8,658) Total (11,190) 14,374 Valuation allowance — (14,374) Net deferred tax assets (liabilities) $ (6,122) $ — |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation between the Company’s effective tax rate and the statutory tax rate is as follows: Year Ended December 31, 2021 2020 Expected Income Tax Benefit at Statutory Tax Rate, Net $ (6,385) $ (6,151) Changes in income taxes resulting from: State taxes (net of federal tax benefits) 9,937 (2,045) Decrease in valuation allowance (14,375) (3,727) Foreign tax rate differential — — Gain/loss on distinguishment of debt 1,255 — Non-deductible 280E 5,421 2,683 Goodwill impairment 1,296 5,572 Debt discount 239 — Passthrough and managed 308 713 RTP adjustments and other 4,107 613 Reported income tax expense (benefit) $ 1,803 $ — |
STOCKBASED COMPENSATION (Tables
STOCKBASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The following table contains information about both plans as of December 31, 2021: Awards Awards Awards Awards 2016 Equity Incentive Plan 2,000,000 — 499,953 1,500,047 2018 Equity Incentive Plan 43,976,425 3,875,921 14,409,604 25,690,900 2019 Equity Incentive Plan 84,150,000 34,884 73,014,717 11,100,399 Year Ended December 31, 2021 2020 Expected term 5 years 6 years Volatility 106.7 % 104.6 % Risk-Free Interest Rate 0.8 % 0.4 % Dividend Yield 0 % 0 % |
Share-based Payment Arrangement, Option, Activity | The following table summarizes the Company’s stock option activity and related information for the year ended December 31, 2021 and 2020: Number Weighted- Weighted- Aggregate Options Outstanding as of December 31, 2019 12,365,295 $ 1.61 Options Granted 12,803,918 $ 0.08 Options Exercised — $ — Options Forfeited (7,203,334) $ 1.19 Options Expired (473,049) $ 1.51 Options Outstanding as of December 31, 2020 17,492,830 $ 0.41 Options Granted 88,627,220 $ 0.23 Options Exercised (3,910,805) $ 0.08 Options Forfeited (13,547,745) $ 0.15 Options Expired (410,120) $ 0.41 Options Outstanding as of December 31, 2021 88,251,380 $ 0.20 8.8 years $ 10,334,294 Options Exercisable as of December 31, 2021 35,661,302 $ 0.27 7.6 years $ 3,591,052 |
Share-based Payment Arrangement, Activity | The following table sets forth the total stock-based compensation expense resulting from stock options and restricted grants of common stock to employees, directors and non-employee consultants in the consolidated statement of operations which are included in selling, general and administrative expenses: (in thousands, except for number of shares or options) December 31, 2021 December 31, 2020 Type of Award Number of Stock-Based Number of Stock- Stock Options 89,930,019 $ 2,415 4,174,428 $ 1,868 Stock Grants: Employees (Common Stock) 250,000 68 740,580 142 Directors (Common Stock) 1,917,837 494 173,610 105 Non–Employee Consultants (Common Stock) 4,556,603 1,078 715,065 60 Total Stock–Based Compensation Expense $ 4,055 $ 2,175 |
WARRANTS (Tables)
WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of Stockholders' Equity Note, Warrants or Rights | The following table summarizes warrant activity for the years ended December 31, 2021 and 2020: Shares Weighted- Warrants Outstanding as of January 1, 2020 1,313,459 $ 2.67 Warrants Issued — $ — Warrants Expired (236,904) $ 5.73 Warrants Outstanding as of December 31, 2020 1,076,555 $ 1.99 Warrants Issued 85,336,515 $ 0.08 Warrants Exercised (586,198) $ 0.07 Warrants Outstanding as of December 31, 2021 85,826,872 $ 0.22 |
Schedule of Weighted Average Fair Value of the Warrants Granted | The weighted-average exercise price and weighted-average fair value of the warrants granted by the Company during 2021 were as follows: For the Year Ended December 31, 2021 Weighted- Weighted- Warrants Granted Whose Exercise Price Exceeded Fair Value at the Date of Grant $ 0.08 $ 0.21 Warrants Granted Whose Exercise Price Was Equal or Lower Than Fair Value at the Date of Grant $ — $ — |
Schedule of Warrants Utilizing Weighted Average Inputs | The Company estimated the fair value of the warrants issued during 2021 utilizing the Black-Scholes option-pricing model with the following weighted-average inputs: Year Ended December 31, Volatility 112.6 % Term 3.8 years Risk-Free Interest Rate 0.2 % Expected Dividend Rate 0.0 % |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Schedule of Allocation of Plan Assets | The relief-from-royalty method, an income approach, was utilized to estimate the fair value of OneQor’s trade name. The following table summarizes the preliminary allocation of the purchase price: (in thousands) Assets acquired Accounts receivable $ 51 Inventory 81 Prepaid expenses 241 Property, plant and equipment 80 Customer relationships 3,070 Trade name 690 Goodwill 6,763 Other long-term assets 260 Total Assets acquired $ 11,237 Liabilities assumed Accounts payable and accrued expenses $ 1,481 Deferred income 300 Short-term debt 100 Long-term lease liabilities 108 Total liabilities assumed $ 1,990 (in thousands) Assets acquired Accounts receivable 3,772 Inventory 6,532 Prepaid & other current assets 1,543 Fixed assets 1,450 Notes receivable 750 Other long-term assets 3 Right-of-use asset 460 Trade name 31,130 Licenses 40,760 Goodwill 16,216 Total assets acquired $ 102,617 Liabilities assumed Accounts payable/accrued expenses $ 15,849 Short-term lease liability 118 Long-term lease liability 342 Short-term debt 4,796 Long-term debt 674 Deferred tax liability 499 Uncertain Tax Position 1,806 Total liabilities assumed $ 24,084 Assets acquired (in thousands) Inventory 662 Prepaids 74 Fixed Assets 554 Right-of-use asset 2,105 Trade name 4,500 Licenses 49,510 Goodwill 20,995 Total assets acquired $ 78,400 Liabilities assumed Accounts Payable/Accruals $ 2,586 Short-term lease liability 540 Long-term lease liability 1,565 Deferred tax liabilities 4,775 Total liabilities assumed $ 9,466 Assets acquired (in thousands) Inventory 215 Prepaid expenses 6 Fixed assets 257 Licenses 161 Goodwill 10,921 Total assets acquired $ 11,561 Liabilities assumed Accounts payable and accrued expenses $ 1,517 Deferred taxes 14 Taxes payable 1,553 Total liabilities assumed $ 3,084 |
The Components Of The Purchase Price | The fair value of the components of the purchase price is summarized below (in thousands): Purchase Price (in thousands): Stock $ 52,929 Liability for holdback shares 6,465 Stock options assumed 9,695 Warrants assumed 10,733 Less: cash transferred (1,290) Total consideration 78,532 Purchase Price (in thousands): Cash $ 24,000 Note payable $ 33,749 Common stock $ 16,000 Less: cash transferred $ (994) Total consideration $ 72,755 Purchase Price (in thousands): Cash $ 1,500 Note payable 4,500 Common stock 2,500 Less: cash transferred (24) Total consideration $ 8,476 |
Business Acquisition, Pro Forma Information | For the Year Ended 12/31/2021 12/31/2020 Pro-forma revenues $ 95,867 $ 88,078 Pro-forma net loss from continuing operations (36,454) (1,077) |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Disposal groups, including discontinued operations | The following table summarizes the transaction: (in thousands) Total consideration $ 3,800 Net book value of assets divested and liabilities transferred Inventory 23 Prepaid and other current assets 33 Property, plant & equipment 98 Intangible assets and goodwill 6,565 Other long-term assets 54 Lease liability, net of right-of-use asset (78) Net book value of assets divested and liabilities transferred 6,695 Loss on sale $ (2,895) (in thousands) Consideration Fair value of note receivable $ 2,960 Fair value of options 330 Less: cash transferred to purchaser (30) Total consideration $ 3,260 Net book value of assets divested and liabilities transferred Accounts receivable $ 360 Inventory 520 Other current assets 80 Property, plant and equipment 4,100 Intangible assets 70 Other long-term assets 200 Accounts payable and accrued expenses (1,700) Lease liabilities, net of right of use assets (70) Net book value of assets divested and liabilities transferred 3,560 Loss on sale $ (300) | |
Schedule of discontinued operations | Operating results for discontinued operations were comprised of the following: (in thousands) Year ended December 31, 2021 2020 Total revenues $ 12,900 $ 13,354 Cost of goods sold 7,687 10,905 Gross profit 5,213 2,449 Selling, general and administrative expenses 6,523 10,495 Impairment of assets — 10,359 Loss on sale of assets (6,583) 1,962 Income (Loss) from operations $ 5,273 $ (20,367) Interest expense (976) (565) Other income (loss) 7,806 12 Income (Loss) from discontinued operations $ 12,103 $ (20,920) Income (Loss) from discontinued operations per common share attributable to Terra Tech Corp common stockholders - basic and diluted $ 0.02 $ (0.03) | |
Schedule of assets and liabilities for discontinued operations | The carrying amounts of the major classes of assets and liabilities for the discontinued operations are as follows: (in thousands) December 31, December 31, Cash 1,544 671 Accounts receivable, net 1,553 483 Inventory 1,359 2,152 Prepaid expenses and other assets 39 23 Property, equipment and leasehold improvements, net 17,661 10,207 Other assets 323 582 Assets of discontinued operations $ 22,479 $ 14,118 Accounts payable and accrued expenses $ 1,170 $ 1,380 Short-term Debt — — Deferred gain on sale of assets — 8,783 Long-term lease liabilities 184 335 Liabilities of discontinued operations $ 1,354 $ 10,498 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | (in thousands) % of Total Revenue Year Ended December 31, Year Ended December 31, Segment 2021 2020 2021 2020 Cannabis Retail $ 24,540 $ 5,400 51.5 % 87.6 % Cannabis Cultivation & Distribution $ 23,131 $ 460 48.5 % 7.5 % Corporate and Other $ 2 $ 301 — % 4.9 % Total $ 47,673 $ 6,161 100.0 % 100.0 % (in thousands) For the Year Ended December 31, 2021 Cannabis Retail Cannabis Cultivation and Distribution Corporate and Other Total Total Revenues $ 24,540 $ 23,131 $ 2 $ 47,673 Cost of goods sold 13,706 22,000 — 35,706 Gross Profit 10,834 1,131 2 11,967 Selling, general and administrative expenses 12,327 7,961 27,969 48,257 Impairment of Assets 6,171 — — 6,171 (Gain) / Loss on sale of assets — 56 (3,189) (3,133) Loss from operations (7,664) (6,886) (24,778) (39,328) Other income / (expense): Extinguishment of debt income / (expense) — 116 (6,092) (5,976) Gain / (loss) on investments — — 5,337 5,337 Interest income / (expense) (85) (186) (1,505) (1,776) Other income / (loss) 110 85 (628) (433) Total other income 25 15 (2,888) (2,848) Loss from continuing operations before provision for income taxes $ (7,639) $ (6,871) $ (27,666) $ (42,176) Total assets at December 31, 2021 $ 67,821 $ 476 $ 203,527 $ 271,824 (in thousands) For the Year Ended December 31, 2020 Cannabis Retail Cannabis Cultivation and Distribution Corporate and Other Total Total Revenues $ 5,400 $ 460 $ 301 $ 6,161 Cost of goods sold 2,253 293 972 3,518 Gross Profit 3,147 167 (671) 2,643 Selling, General and Administrative Expenses 7,145 1,307 10,867 19,319 Impairment of Assets 19,910 — — 19,910 (Gain) / Loss on sale of assets — — — — Loss from operations (23,908) (1,140) (11,538) (36,586) Other income / (expense): Interest income/(expense) — — (1,394) (1,394) Unrealized gain/(loss) on investments — — 29,045 29,045 Other income / (loss) 755 65 109 929 Total other income 755 65 27,760 28,580 Loss before provision for income taxes $ (23,153) $ (1,075) $ 16,222 $ (8,006) Total assets at December 31, 2020 $ 13,342 $ 37,390 $ 49,563 $ 100,294 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Finite-lived Intangible Assets Amortization Expense (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Trademarks | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 2 years |
Trademarks | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 8 years |
Customer Relationships | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
Customer Relationships | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Dispensary Licenses | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 14 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Derivative Liabilities at Fair Value (Details) | Dec. 31, 2020USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | $ 34,375 |
Warrants to acquire shares of HydroFarm | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 10,195 |
Shares of HydroFarm | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 23,850 |
Option to acquire common shares of Edible Garden: | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 330 |
Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 0 |
Level 1 | Warrants to acquire shares of HydroFarm | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 0 |
Level 1 | Shares of HydroFarm | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 0 |
Level 1 | Option to acquire common shares of Edible Garden: | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 0 |
Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 34,045 |
Level 2 | Warrants to acquire shares of HydroFarm | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 10,195 |
Level 2 | Shares of HydroFarm | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 23,850 |
Level 2 | Option to acquire common shares of Edible Garden: | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 0 |
Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 330 |
Level 3 | Warrants to acquire shares of HydroFarm | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 0 |
Level 3 | Shares of HydroFarm | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | 0 |
Level 3 | Option to acquire common shares of Edible Garden: | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total | $ 330 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Revenue by Major Customers by Reporting Segments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 47,673 | $ 6,161 |
California | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 42,120 | 6,161 |
Oregon | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 5,553 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Mar. 30, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Reserve for doubtful accounts | $ (3,097,000) | $ 650,000 | |
Allowance for notes receivable | 0 | 0 | |
Advertising expense | $ 1,290,000 | 190,000 | |
Edible Garden | |||
Property, Plant and Equipment [Line Items] | |||
Purchase interest | 20.00% | ||
Shares acquired | 5,000 | ||
Shares acquired, value | $ 2 | ||
Impairment of assets | $ 330,000 | ||
Edible Garden | Option One | |||
Property, Plant and Equipment [Line Items] | |||
Purchase interest | 10.00% | ||
Edible Garden | Option Two | |||
Property, Plant and Equipment [Line Items] | |||
Purchase interest | 10.00% | ||
Building | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, estimated useful lives | thirty-two years | ||
Furniture and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, estimated useful lives | three | ||
Furniture and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, estimated useful lives | eight years | ||
Computer equipment and software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, estimated useful lives | three | ||
Computer equipment and software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, estimated useful lives | five years | ||
Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, estimated useful lives | five years | ||
Trade and other Receivables | |||
Property, Plant and Equipment [Line Items] | |||
Reserve for doubtful accounts | $ 3,680,000 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 118,929,017 | 18,569,385 |
Common stock warrants | ||
Class of Stock [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 30,677,637 | 1,076,555 |
Common stock options | ||
Class of Stock [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 88,251,380 | 17,492,830 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cumulative Effect Adjustment (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Jan. 01, 2021 | Dec. 31, 2020 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Additional paid-in capital | $ 392,930 | $ 276,131 | $ 275,060 |
Accumulated deficit | $ 250,015 | 218,744 | 219,803 |
Debt Discount | $ 38 | ||
As Reported | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Additional paid-in capital | 275,060 | ||
Accumulated deficit | 219,803 | ||
Debt Discount | 50 | ||
Cumulative Effect Adjustment | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Additional paid-in capital | 1,071 | ||
Accumulated deficit | (1,059) | ||
Debt Discount | $ (12) |
CONCENTRATIONS OF BUSINESS AN_2
CONCENTRATIONS OF BUSINESS AND CREDIT RISK (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Risks and Uncertainties [Abstract] | ||
Cash, uninsured amount | $ 5,420 | $ 60 |
VARIABLE INTEREST ENTITY ARRA_3
VARIABLE INTEREST ENTITY ARRANGEMENTS - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Oct. 26, 2017 | |
Schedule of Investments [Line Items] | |||
Total revenues | $ 47,673 | $ 6,161 | |
Net Income (Loss) | (31,271) | (30,117) | |
NuLeaf | |||
Schedule of Investments [Line Items] | |||
Convertible debt | $ 4,500 | ||
Interest rate | 6.00% | ||
Equity method investment, ownership percentage | 50.00% | ||
Total revenues | 12,900 | 8,130 | |
Net Income (Loss) | $ (690) | $ 4,080 |
VARIABLE INTEREST ENTITY ARRA_4
VARIABLE INTEREST ENTITY ARRANGEMENTS - Schedule of intercompany transactions and balances (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 6,890 | |
Accounts receivable, net | 4,677 | $ 352 |
Inventory | 7,179 | 759 |
Prepaid expenses and other current assets | 1,272 | 214 |
Total current assets | 25,264 | 37,607 |
Property, equipment and leasehold improvements, net | 23,728 | 12,630 |
TOTAL ASSETS | 271,824 | 100,294 |
Liabilities: | ||
Total current liabilities | 87,708 | 26,422 |
Total long-term liabilities | 37,629 | 14,742 |
Total liabilities | 125,337 | 41,164 |
Variable Interest Entity, Primary Beneficiary | ||
Current assets: | ||
Cash | 1,544 | 671 |
Accounts receivable, net | 1,553 | 483 |
Inventory | 1,359 | 3,118 |
Prepaid expenses and other current assets | 39 | 21 |
Total current assets | 4,495 | 4,293 |
Property, equipment and leasehold improvements, net | 5,099 | 7,442 |
Other assets | 295 | 395 |
TOTAL ASSETS | 9,889 | 12,130 |
Liabilities: | ||
Total current liabilities | 350 | 396 |
Total long-term liabilities | 184 | 307 |
Total liabilities | $ 534 | $ 703 |
INVESTMENTS IN UNCONSOLIDATED_2
INVESTMENTS IN UNCONSOLIDATED AFFILIATES (Details) $ / shares in Units, $ in Thousands | Jun. 16, 2021USD ($)$ / sharesshares | Nov. 24, 2020$ / sharesshares | Aug. 28, 2018USD ($)$ / sharesshares | Dec. 31, 2020$ / sharesshares | Dec. 31, 2021$ / sharesshares | Dec. 31, 2020$ / sharesshares | Dec. 14, 2020shares | Mar. 30, 2020 |
Schedule of Investments [Line Items] | ||||||||
Initial exercise price (in dollars per share) | $ / shares | $ 0.23 | $ 0.08 | ||||||
Aggregate purchase price | $ | $ 5,000 | |||||||
Reverse stock split ratio | 0.296630 | |||||||
Common stock, shares, outstanding (in shares) | 194,204,459 | 496,237,883 | 194,204,459 | |||||
Hydrofarm | ||||||||
Schedule of Investments [Line Items] | ||||||||
Number of shares able to be purchased (in shares) | 1 | |||||||
Sale of stock and warrants (in shares) | 593,261 | |||||||
Shares purchased | 296,630 | |||||||
Gross proceeds | $ | $ 40,760 | |||||||
Edible Garden | ||||||||
Schedule of Investments [Line Items] | ||||||||
Purchase interest | 20.00% | |||||||
Shares acquired | 5,000,000 | |||||||
Edible Garden | Option One | ||||||||
Schedule of Investments [Line Items] | ||||||||
Purchase interest | 10.00% | |||||||
Edible Garden | Option Two | ||||||||
Schedule of Investments [Line Items] | ||||||||
Purchase interest | 10.00% | |||||||
Securities Purchase Agreement | ||||||||
Schedule of Investments [Line Items] | ||||||||
Shares issued, price per share | $ / shares | $ 16.86 | $ 16.86 | $ 16.86 | |||||
Securities Purchase Agreement | Hydrofarm | ||||||||
Schedule of Investments [Line Items] | ||||||||
Shares issued, price per share | $ / shares | $ 16.86 | |||||||
Subscription Agreement | Hydrofarm | ||||||||
Schedule of Investments [Line Items] | ||||||||
Number of units agreed to be purchased | 2,000,000 | |||||||
Number of warrants to purchase | 0.5 | |||||||
Subscription Agreement | Board Of Directors | Hydrofarm | ||||||||
Schedule of Investments [Line Items] | ||||||||
Initial exercise price (in dollars per share) | $ / shares | $ 5 | |||||||
Per unit price (in dollars per share) | $ / shares | $ 2.50 | |||||||
Owned shares of common stock | 593,261 | 593,261 | ||||||
Shares issued, price per share | $ / shares | $ 8.43 | |||||||
Debt conversion, converted instrument, warrants or options issued | 296,630 | 296,630 | ||||||
Common stock, shares, outstanding (in shares) | 31,720,727 | |||||||
Equity method investment, ownership percentage | 1.90% |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,258 | $ 0 |
Work-in-progress | 1,077 | 392 |
Finished goods | 3,844 | 367 |
Inventory, net | $ 7,179 | $ 759 |
PROPERTY EQUIPMENT AND LEASEH_3
PROPERTY EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET - Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 29,392 | $ 15,966 |
Less accumulated depreciation | (5,663) | (3,336) |
Property, equipment and leasehold improvements, net | 23,729 | 12,630 |
Depreciation | 2,060 | 1,370 |
Land and building | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 7,788 | 206 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 3,873 | 1,135 |
Computer hardware | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 348 | 152 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 14,409 | 5,850 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 1,142 | 123 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 1,832 | $ 8,500 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Line Items] | |||||||
Goodwill | $ 48,132 | $ 48,132 | $ 6,171 | $ 21,471 | |||
Goodwill impairment loss | 6,171 | 15,300 | |||||
Amount goodwill exceeded fair value | $ 8,350 | ||||||
Impairment loss | 6,171 | 19,910 | |||||
Amortization expense | 3,390 | $ 2,550 | |||||
Black Oak Gallery | |||||||
Goodwill [Line Items] | |||||||
Goodwill impairment loss | $ 6,170 | $ 8,350 | $ 2,750 | $ 4,200 | |||
Impairment loss | $ 460 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL - Schedule of Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | ||
Goodwil - Beginning balance | $ 6,171 | $ 21,471 |
Impairment | (6,171) | (15,300) |
Goodwill arising from acquisitions | 48,132 | |
Goodwill - Ending balance | $ 48,132 | $ 6,171 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Line Items] | ||
Accumulated Amortization | $ (15,014) | $ (11,072) |
Net Carrying Amount | 97,587 | |
Total Intangible Assets, Gross | 144,651 | 18,786 |
Total Intangible Assets, Net | 129,637 | 7,714 |
Trade Name | ||
Goodwill [Line Items] | ||
Gross Carrying Amount | 32,050 | 920 |
Net Carrying Amount | 32,050 | 920 |
Total Non-Amortizing Intangible Assets | ||
Goodwill [Line Items] | ||
Gross Carrying Amount | 32,050 | 920 |
Net Carrying Amount | 32,050 | 920 |
Customer Relationships | ||
Goodwill [Line Items] | ||
Gross Carrying Amount | 7,400 | 7,400 |
Accumulated Amortization | (7,400) | (7,400) |
Net Carrying Amount | $ 0 | 0 |
Customer Relationships | Minimum | ||
Goodwill [Line Items] | ||
Estimated Useful Life in Years | 3 years | |
Customer Relationships | Maximum | ||
Goodwill [Line Items] | ||
Estimated Useful Life in Years | 5 years | |
Trademarks and Patent | ||
Goodwill [Line Items] | ||
Gross Carrying Amount | $ 4,500 | 196 |
Accumulated Amortization | (750) | (187) |
Net Carrying Amount | $ 3,750 | $ 9 |
Trademarks and Patent | Minimum | ||
Goodwill [Line Items] | ||
Estimated Useful Life in Years | 2 years | |
Trademarks and Patent | Maximum | ||
Goodwill [Line Items] | ||
Estimated Useful Life in Years | 8 years | |
Operating Licenses | ||
Goodwill [Line Items] | ||
Estimated Useful Life in Years | 14 years | |
Gross Carrying Amount | $ 100,701 | $ 10,270 |
Accumulated Amortization | (6,864) | (3,485) |
Net Carrying Amount | 93,837 | 6,785 |
Total Amortizing Intangible Assets | ||
Goodwill [Line Items] | ||
Gross Carrying Amount | 112,601 | 17,866 |
Accumulated Amortization | (15,014) | (11,072) |
Net Carrying Amount | $ 97,587 | $ 6,794 |
INTANGIBLE ASSETS AND GOODWIL_5
INTANGIBLE ASSETS AND GOODWILL - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2022 | $ 9,443 |
2023 | 8,693 |
2024 | 7,193 |
2025 | 7,193 |
2026 and thereafter | 65,065 |
Total | $ 97,587 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accounts Payable | $ 16,804,000 | $ 6,027,000 |
Tax Liabilities | 5,147,000 | 337,000 |
Accrued Payroll and Benefits | 1,409,000 | 782,000 |
Current Lease Liabilities | 3,120,000 | 694,000 |
Other Accrued Expenses | 5,423,000 | 385,000 |
Total Accounts Payable and Accrued Expenses | $ 31,903,000 | $ 8,225,000 |
NOTES PAYABLE - Schedule of Deb
NOTES PAYABLE - Schedule of Debt (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||
Long-term debt | $ 10,006 | $ 6,632 |
Notes payable - promissory notes | 57,522,000 | 14,687,000 |
Vehicle loans | 204,000 | 29,000 |
Less: Short term debt | (45,749,000) | (8,033,000) |
Less: Debt discount | $ (1,971,000) | (51,000) |
Securities Purchase Agreement | ||
Debt Instrument [Line Items] | ||
Interest rate | 9.89% | |
Long-term debt | $ 2,954,000 | |
Securities Purchase Agreement One | ||
Debt Instrument [Line Items] | ||
Interest rate | 15.00% | |
Long-term debt | $ 0 | 1,000,000 |
Securities Purchase Agreement Two | ||
Debt Instrument [Line Items] | ||
Interest rate | 8.00% | |
Long-term debt | $ 0 | 1,000,000 |
Convertible promissory note one | ||
Debt Instrument [Line Items] | ||
Interest rate | 10.00% | |
Long-term debt | $ 0 | 500,000 |
Promissory note four | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 562,000 | 562,000 |
Unsecured Promissory Note | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.00% | |
Long-term debt | $ 1,050,000 | |
Convertible Promissory Note Two | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.00% | |
Conversion price (in dollars per share) | $ 0.175 | |
Long-term debt | $ 3,500,000 | |
Promissory note five | ||
Debt Instrument [Line Items] | ||
Interest rate | 8.00% | |
Long-term debt | $ 2,500,000 | |
Senior Secured Promissory Note | ||
Debt Instrument [Line Items] | ||
Interest rate | 12.00% | |
Long-term debt | $ 2,500,000 | |
Unsecured promissory note one | ||
Debt Instrument [Line Items] | ||
Long-term debt | 90,000 | |
Promissory Note Six | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 297,000 | |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.90% | |
Long-term debt | $ 4,500,000 | |
Promissory note seven | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.00% | |
Long-term debt | $ 2,000,000 | |
Promissory note eight | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.00% | |
Long-term debt | $ 2,500,000 | |
Secured Promissory Note Two | ||
Debt Instrument [Line Items] | ||
Interest rate | 8.00% | |
Long-term debt | $ 28,569,000 | |
Promissory Note | ||
Debt Instrument [Line Items] | ||
Interest rate | 12.00% | |
Interest rate increase | 0.50% | |
Long-term debt | $ 6,500,000 | 6,500,000 |
Promissory Note One | ||
Debt Instrument [Line Items] | ||
Interest rate | 12.00% | |
Long-term debt | $ 0 | 1,600,000 |
Promissory Note One | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate increase | 13.50% | |
Promissory Note One | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate increase | 0.50% | |
Promissory Note Two | ||
Debt Instrument [Line Items] | ||
Interest rate | 7.50% | |
Conversion price (in dollars per share) | $ 4.50 | |
Average of two lowest VWAPs | 87.00% | |
Long-term debt | $ 0 | 2,800,000 |
Promissory Note Three | ||
Debt Instrument [Line Items] | ||
Interest rate | 7.50% | |
Conversion price (in dollars per share) | $ 4.50 | |
Average of two lowest VWAPs | 87.00% | |
Long-term debt | $ 0 | $ 725,000 |
NOTES PAYABLE - Schedule of Mat
NOTES PAYABLE - Schedule of Maturities of Long-term Debt (Details) | Dec. 31, 2021USD ($) |
Debt Instrument [Line Items] | |
Total Debt | $ 57,726,000 |
2022 | |
Debt Instrument [Line Items] | |
Total Debt | 45,749,000 |
2023 | |
Debt Instrument [Line Items] | |
Total Debt | 6,523,000 |
2024 | |
Debt Instrument [Line Items] | |
Total Debt | 2,500,000 |
2039 | |
Debt Instrument [Line Items] | |
Total Debt | $ 2,954,000 |
NOTES PAYABLE - Narrative (Deta
NOTES PAYABLE - Narrative (Details) | Jan. 25, 2021USD ($)$ / sharesshares | Jan. 22, 2021USD ($) | Jan. 21, 2021 | Jan. 18, 2018USD ($) | Jan. 31, 2021shares | Mar. 31, 2018USD ($)tradingDaydailyVolumeWeightedAveragePricePerDay$ / shares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Nov. 22, 2021USD ($) | Jul. 27, 2021USD ($)$ / sharesshares | Jan. 01, 2021USD ($) | Jul. 29, 2020USD ($) | May 04, 2020 | Jan. 10, 2020USD ($) | Dec. 31, 2019 | Oct. 05, 2018USD ($) | Nov. 22, 2017USD ($) |
Debt Instrument [Line Items] | |||||||||||||||||
Unamortized debt discount remaining balance | $ 40,000 | $ 140,000 | |||||||||||||||
Debt conversion - common stock | $ 5,056,000 | $ 2,444,000 | |||||||||||||||
Conversion of shares | shares | 24,939,780 | ||||||||||||||||
Convertible preferred stock, shares issued upon conversion | shares | 31,086,209 | ||||||||||||||||
Common stock, shares, issued (in shares) | shares | 498,546,295 | 196,512,867 | |||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||||||||||||||
Notes payable - promissory notes | $ 57,522,000 | $ 14,687,000 | |||||||||||||||
Loss on extinguishment of debt | $ (5,976,000) | 0 | |||||||||||||||
Debt Discount | $ 38,000 | ||||||||||||||||
Paycheck Protection Program | OneQor Technologies, Inc | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest rate | 1.00% | ||||||||||||||||
Convertible promissory note one | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||
Secured Debt | Promissory Note | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Outstanding amount | $ 28,600,000 | ||||||||||||||||
Promissory note | $ 30,600,000 | ||||||||||||||||
Interest rate | 8.00% | ||||||||||||||||
Debt Discount | $ 1,930,000 | ||||||||||||||||
Secured Debt | Senior Secured Promissory Note | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Promissory note | $ 2,500,000 | ||||||||||||||||
Interest rate | 12.00% | ||||||||||||||||
Unsecured Debt | Promissory Note | Six Months | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Promissory note | $ 2,000,000 | ||||||||||||||||
Interest rate | 3.00% | ||||||||||||||||
Unsecured Debt | Promissory Note | Twelve Months | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Promissory note | $ 2,500,000 | ||||||||||||||||
Interest rate | 3.00% | ||||||||||||||||
July 1, 2021 | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Derivative, fixed interest rate | 2.90% | ||||||||||||||||
Maximum amount outstanding during period | $ 4,500,000 | ||||||||||||||||
Outstanding amount | $ 4,500,000 | ||||||||||||||||
May 2020 | Payroll Protection Program | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Derivative, fixed interest rate | 1.00% | ||||||||||||||||
Outstanding amount | $ 300,000 | ||||||||||||||||
January 1, 2021 | Related Party Promissory Note | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Derivative, fixed interest rate | 4.00% | ||||||||||||||||
Outstanding amount | $ 90,000 | ||||||||||||||||
Investment owned, balance, principal amount | $ 200,000 | ||||||||||||||||
Promissory Note | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest rate | 12.00% | ||||||||||||||||
Unaffiliated Third Party | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest rate | 8.00% | 15.00% | |||||||||||||||
Notes payable - promissory notes | $ 1,000,000 | $ 1,000,000 | |||||||||||||||
Stock Purchase Agreement | Michael A. Nahass | Series A Preferred Stock [Member] | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Fair value of common stock | $ 3,100,000 | ||||||||||||||||
Aggregate consideration | 1,000,000 | ||||||||||||||||
Unsecured debt, current | $ 1,050,000 | ||||||||||||||||
Rate of interest on promissory note, percentage | 3.00% | 3.00% | |||||||||||||||
Unsecured debt | $ 1,050,000 | ||||||||||||||||
Rate of interest on promissory note, other, percentage | 3 | ||||||||||||||||
Third Party Creditor | California | Promissory Note | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Land under purchase options, recorded | $ 6,500,000 | $ 1,600,000 | $ 4,500,000 | ||||||||||||||
Interest rate | 12.00% | 12.00% | 12.00% | ||||||||||||||
Interest rate increase per year through 2020 | 0.50% | 0.50% | 0.50% | ||||||||||||||
Warrants issued | $ 160 | ||||||||||||||||
Proceeds from fees received | $ 200,000 | ||||||||||||||||
Maturity extension fee | 1.00% | ||||||||||||||||
Third Party Creditor | California | Promissory Note | Maximum | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest rate | 13.00% | ||||||||||||||||
Securities Purchase Agreement | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, convertible, stock price trigger (in dollars per share) | $ / shares | $ 0.30 | ||||||||||||||||
Interest rate | 9.89% | ||||||||||||||||
Securities Purchase Agreement | A Warrant | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt conversion, converted instrument, warrants or options issued | shares | 15,000,000 | ||||||||||||||||
Per unit price (in dollars per share) | $ / shares | $ 0.01 | ||||||||||||||||
Common stock, shares, issued (in shares) | shares | 4,548,006 | ||||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.23 | ||||||||||||||||
Original principal | $ 1,000,000 | ||||||||||||||||
Promissory note amount | $ 2,500,000 | ||||||||||||||||
Derivative, fixed interest rate | 8.00% | ||||||||||||||||
Securities Purchase Agreement | B Warrants | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt conversion, converted instrument, warrants or options issued | shares | 15,000,000 | ||||||||||||||||
Per unit price (in dollars per share) | $ / shares | $ 0.2284 | ||||||||||||||||
Securities Purchase Agreement | 2017 | Convertible promissory note | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest rate | 7.50% | ||||||||||||||||
Warrants issued | $ 560,000 | ||||||||||||||||
Amount per tranches | $ 5,000,000 | ||||||||||||||||
Long-term debt, gross | $ 40,000,000 | ||||||||||||||||
Principle remains outstanding balance | $ 3,500,000 | ||||||||||||||||
Debt instrument, convertible, threshold trading days | tradingDay | 10 | ||||||||||||||||
Debt instrument, convertible, stock price trigger (in dollars per share) | $ / shares | $ 10.50 | ||||||||||||||||
Debt instrument, convertible, average daily trading value trigger | $ 2,500,000 | ||||||||||||||||
Debt instrument, convertible, notification period prior to conversion | tradingDay | 1 | ||||||||||||||||
Debt instrument, redemption, number of days written notice, prior to redemption | tradingDay | 10 | ||||||||||||||||
Securities Purchase Agreement | 2017 | Convertible promissory note | Debt Instrument, Redemption, Period One | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, redemption price, percentage | 110.00% | ||||||||||||||||
Debt instrument, redemption, prepayment period based on issuance date | tradingDay | 90 | ||||||||||||||||
Securities Purchase Agreement | 2017 | Convertible promissory note | Debt Instrument, Redemption, Period Two | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, redemption price, percentage | 115.00% | ||||||||||||||||
Securities Purchase Agreement | 2017 | Convertible promissory note | Debt Instrument, Redemption, Period Three | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, redemption price, percentage | 125.00% | ||||||||||||||||
Debt instrument, redemption, prepayment period based on issuance date | tradingDay | 180 | ||||||||||||||||
Securities Purchase Agreement | 2017 | Convertible promissory note | Debt Conversion Scenario Two | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, convertible, conversion ratio | 0.87 | ||||||||||||||||
Debt instrument, convertible, number Of lowest daily volume weighted average price days | dailyVolumeWeightedAveragePricePerDay | 2 | ||||||||||||||||
Debt instrument convertible, number of trading days period to determine second conversion ratio | tradingDay | 13 | ||||||||||||||||
Securities Purchase Agreement | 2017 | Convertible promissory note | Debt Conversion Scenario Three | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, convertible, conversion ratio | 0.70 | ||||||||||||||||
Debt instrument, convertible, number Of lowest daily volume weighted average price days | dailyVolumeWeightedAveragePricePerDay | 3 | ||||||||||||||||
Debt instrument convertible, number of trading days period to determine second conversion ratio | tradingDay | 20 | ||||||||||||||||
Securities Purchase Agreement | March 2018 | Convertible promissory note one | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt conversion - common stock | $ 1,980,000 | ||||||||||||||||
Securities Purchase Agreement | Maximum | 2017 | Convertible promissory note | Debt Instrument, Redemption, Period Two | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, redemption, prepayment period based on issuance date | tradingDay | 180 | ||||||||||||||||
Securities Purchase Agreement | Minimum | 2017 | Convertible promissory note | Debt Instrument, Redemption, Period Two | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, redemption, prepayment period based on issuance date | tradingDay | 91 | ||||||||||||||||
Securities Purchase Agreement | Accredited investor | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt conversion, converted instrument, warrants or options issued | shares | 5,000,000 | ||||||||||||||||
Per unit price (in dollars per share) | $ / shares | $ 0.01 | ||||||||||||||||
Senior notes, noncurrent | $ 3,500,000 | ||||||||||||||||
Debt instrument, convertible, conversion price (in dollars per share) | $ / shares | $ 0.175 | ||||||||||||||||
Default interest rate | 18.00% | ||||||||||||||||
Percentage of change in cash flow | 10.00% | ||||||||||||||||
Loss on extinguishment of debt | $ 5,980,000 | ||||||||||||||||
Securities Purchase Agreement | Matthew Lee Morgan | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||
Securities Purchase Agreement | Matthew Lee Morgan | December 30, 2019 | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||
Debt conversion - common stock (in shares) | shares | 1,428,571 | ||||||||||||||||
First Choice, LLC | January 1, 2021 | Related Party Promissory Note | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Derivative, fixed interest rate | 10.00% | ||||||||||||||||
Investment owned, balance, principal amount | $ 5,000,000 | ||||||||||||||||
Halladay Holding LLC | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Derivative, fixed interest rate | 9.89% | ||||||||||||||||
Outstanding amount | $ 2,970,000 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Operating lease costs | $ 2,950,000 | $ 690,000 |
Short-term lease liability | $ 3,120,000 | $ 694,000 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accounts payable and other accrued expenses | Accounts payable and other accrued expenses |
LEASES - Schedule of operating
LEASES - Schedule of operating lease ROU assets and lease liabilities (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Leases [Abstract] | |
Operating right-of-use assets | $ 24,448 |
Operating lease liabilities | $ 24,436 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets |
LEASES - Schedule of maturities
LEASES - Schedule of maturities of operating lease liabilities (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Leases [Abstract] | |
2022 | $ 5,370 |
2023 | 5,301 |
2024 | 5,215 |
2025 | 4,324 |
2026 | 4,209 |
Thereafter | 14,005 |
Total lease payments | 38,424 |
Less: discount | (13,988) |
Total operating lease liabilities | $ 24,436 |
LEASES - Schedule of Weighted A
LEASES - Schedule of Weighted Average Number of Shares (Details) | Dec. 31, 2021 |
Leases [Abstract] | |
Weighted average remaining lease term (years) | 5 years 8 months 15 days |
Weighted average discount rate | 11.40% |
TAX EXPENSE - Provision for Inc
TAX EXPENSE - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | ||
Federal | $ 108 | $ 0 |
State | 860 | 0 |
Foreign | 0 | 0 |
Total current tax expense | 968 | 0 |
Deferred: | ||
Federal | 1,112 | 0 |
State | (277) | 0 |
Foreign | 0 | |
Total deferred tax expense | 835 | 0 |
Reported income tax expense (benefit) | $ 1,803 | $ 0 |
TAX EXPENSE - Schedule of Defer
TAX EXPENSE - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred income tax assets: | ||
Options expense | $ 0 | $ 2,871 |
Depreciation | 0 | 194 |
Allowance for Doubtful Accounts | 0 | 291 |
Accrued Expenses | 58 | 0 |
Net operating Losses | 5,010 | 19,676 |
Total | 5,068 | 23,032 |
Deferred income tax liabilities: | ||
Fixed Assets and Intangibles | (11,094) | 0 |
Leases | (96) | 0 |
Unrealized gain on investments | 0 | (8,658) |
Total | (11,190) | (14,374) |
Valuation allowance | 0 | (14,374) |
Net deferred tax assets (liabilities) | $ (6,122) | $ 0 |
TAX EXPENSE - Schedule of Effec
TAX EXPENSE - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Expected Income Tax Benefit at Statutory Tax Rate, Net | $ (6,385) | $ (6,151) |
State taxes (net of federal tax benefits) | 9,937 | (2,045) |
Decrease in valuation allowance | (14,375) | (3,727) |
Foreign tax rate differential | 0 | 0 |
Gain/loss on distinguishment of debt | 1,255 | 0 |
Non-deductible 280E | 5,421 | 2,683 |
Goodwill impairment | 1,296 | 5,572 |
Debt discount | 239 | 0 |
Passthrough and managed | 308 | 713 |
RTP adjustments and other | 4,107 | 613 |
Reported income tax expense (benefit) | $ 1,803 | $ 0 |
TAX EXPENSE - Narrative (Detail
TAX EXPENSE - Narrative (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Investments, Owned, Federal Income Tax Note [Line Items] | |
Operating loss carryforwards | $ 16,300 |
Unrecognized tax benefits | 8,600 |
State and Local Jurisdiction | |
Investments, Owned, Federal Income Tax Note [Line Items] | |
Operating loss carryforwards | $ 17,900 |
EQUITY - Narrative (Details)
EQUITY - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 22, 2021 | Dec. 31, 2021 | Dec. 31, 2019 | Dec. 31, 2020 |
Class of Stock [Line Items] | ||||
Conversion of shares | 24,939,780 | |||
Common stock, shares authorized (in shares) | 990,000,000 | 990,000,000 | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Common stock, shares, issued (in shares) | 498,546,295 | 196,512,867 | ||
Common stock, shares, outstanding (in shares) | 496,237,883 | 194,204,459 | ||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Shares acquired (in shares) | 2,310,000 | |||
Preferred stock convertible series A | ||||
Class of Stock [Line Items] | ||||
Shares acquired (in shares) | 8 | 4 | ||
Michael Nahass | ||||
Class of Stock [Line Items] | ||||
Aggregate purchase price | $ 3.1 | |||
Payments for repurchase in cash | 1 | |||
Promissory notes | 2.1 | |||
Derek Peterson | ||||
Class of Stock [Line Items] | ||||
Private placement | $ 3.5 | |||
Warrants issued | 4,945,055 | |||
Per unit price (in dollars per share) | $ 0.01 | |||
Derek Peterson | Common Stock | ||||
Class of Stock [Line Items] | ||||
Conversion of shares | 16,485,714 |
STOCK-BASED COMPENSATION - Plan
STOCK-BASED COMPENSATION - Plan Details (Details) | Dec. 31, 2021shares |
2016 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Reserved for Issuance | 2,000,000 |
Awards Exercised | 0 |
Awards Outstanding | 499,953 |
Awards Available for Grant | 1,500,047 |
2018 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Reserved for Issuance | 43,976,425 |
Awards Exercised | 3,875,921 |
Awards Outstanding | 14,409,604 |
Awards Available for Grant | 25,690,900 |
2019 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Reserved for Issuance | 84,150,000 |
Awards Exercised | 34,884 |
Awards Outstanding | 73,014,717 |
Awards Available for Grant | 11,100,399 |
STOCK-BASED COMPENSATION - Shar
STOCK-BASED COMPENSATION - Share-based Payment Arrangement, Option, Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Shares | ||
Options outstanding - beginning balance (in shares) | 17,492,830 | 12,365,295 |
Options Granted (in shares) | 88,627,220 | 12,803,918 |
Options Exercise (in shares) | (3,910,805) | 0 |
Options Forfeited (in shares) | (13,547,745) | (7,203,334) |
Options Expired (in shares) | (410,120) | (473,049) |
Options/Warrants outstanding - ending balance (in shares) | 88,251,380 | 17,492,830 |
Options Exercisable (in shares) | 35,661,302 | |
Weighted- Average Exercise Price Per Share | ||
Options Outstanding, beginning balance (in dollars per share) | $ 0.41 | $ 1.61 |
Options Granted (in dollars per share) | 0.23 | 0.08 |
Options Exercised (in dollars per share) | 0.08 | 0 |
Options Forfeited (in dollars per share) | 0.15 | 1.19 |
Options Expired (in dollars per share) | 0.41 | 1.51 |
Options Outstanding, ending balance (in dollars per share) | 0.20 | $ 0.41 |
Options Exercisable (in dollars per share) | $ 0.27 | |
Weighted- Average Remaining Contractual Life | ||
Options Outstanding, term | 8 years 9 months 18 days | |
Options Exercisable. term | 7 years 7 months 6 days | |
Aggregate Intrinsic Value of In- the-Money Options | ||
Options outstanding | $ 10,334,294 | |
Options Exercisable | $ 3,591,052 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Closing stock price | $ 0.26 | |
Unrecognized stock-based compensation | $ 7,970 | |
Unrecognized stock-based compensation, weighted average period of recognition | 1 year 6 months 29 days | |
Weighted average fair value of awards granted (in dollars per share) | $ 0.23 | $ 0.08 |
STOCK-BASED COMPENSATION - Sh_2
STOCK-BASED COMPENSATION - Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Expected term | 5 years | 6 years |
Volatility | 106.70% | 104.60% |
Risk-Free Interest Rate | 0.80% | 0.40% |
Dividend Yield | 0.00% | 0.00% |
STOCK-BASED COMPENSATION - Sh_3
STOCK-BASED COMPENSATION - Share-based Payment Arrangement, Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-Based Compensation Expense | $ 4,055 | $ 2,175 |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares or Options Granted | 89,930,019 | 4,174,428 |
Stock-Based Compensation Expense | $ 2,415 | $ 1,868 |
Employees (Common Stock) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares or Options Granted | 250,000 | 740,580 |
Stock-Based Compensation Expense | $ 68 | $ 142 |
Directors (Common Stock) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares or Options Granted | 1,917,837 | 173,610 |
Stock-Based Compensation Expense | $ 494 | $ 105 |
Non–Employee Consultants (Common Stock) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares or Options Granted | 4,556,603 | 715,065 |
Stock-Based Compensation Expense | $ 1,078 | $ 60 |
WARRANTS - Schedule of Stockhol
WARRANTS - Schedule of Stockholders' Equity Note, Warrants or Rights (Details) - Warrant - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Warrant or Right [Line Items] | ||
Warrants outstanding - beginning balance (in shares) | 1,076,555 | 1,313,459 |
Warrants Granted (in shares) | 85,336,515 | 0 |
Warrants Expired (in shares) | (236,904) | |
Warrants Exercised (in shares) | (586,198) | |
Warrants outstanding - ending balance (in shares) | 85,826,872 | 1,076,555 |
Warrants Outstanding, beginning balance (in dollars per share) | $ 1.99 | $ 2.67 |
Warrants Granted (in dollars per share) | 0.08 | 0 |
Warrants Expired (in dollars per share) | 5.73 | |
Warrants Exercised (in dollars per share) | 0.07 | |
Warrants Outstanding, ending balance (in dollars per share) | $ 0.22 | $ 1.99 |
WARRANTS - Schedule of Weighted
WARRANTS - Schedule of Weighted-average fair value of the warrants granted (Details) - Warrant | 12 Months Ended |
Dec. 31, 2021$ / shares | |
Class of Warrant or Right [Line Items] | |
Weighted-Average Exercise Price, Warrants Granted Whose Exercise Price Exceeded Fair Value at the Date of Grant (in dollars per share) | $ 0.08 |
Weighted-Average Fair Value, Warrants Granted Whose Exercise Price Exceeded Fair Value at the Date of Grant (in dollars per share) | 0.21 |
Weighted-Average Exercise Price, Warrants Granted Whose Exercise Price Was Equal or Lower Than Fair Value at the Date of Grant (in dollars per share) | 0 |
Weighted-Average Fair Value, Warrants Granted Whose Exercise Price Was Equal or Lower Than Fair Value at the Date of Grant (in dollars per share) | $ 0 |
WARRANTS - Schedule of Warrants
WARRANTS - Schedule of Warrants utilizing weighted-average inputs (Details) - Warrant | Dec. 31, 2021 |
Volatility | |
Class of Warrant or Right [Line Items] | |
Measurement input | 1.126 |
Term | |
Class of Warrant or Right [Line Items] | |
Measurement input | 3.8 |
Risk-Free Interest Rate | |
Class of Warrant or Right [Line Items] | |
Measurement input | 0.002 |
Expected Dividend Rate | |
Class of Warrant or Right [Line Items] | |
Measurement input | 0 |
WARRANTS - Narrative (Details)
WARRANTS - Narrative (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Warrant | ||
Class of Warrant or Right [Line Items] | ||
Warrants issued, debt discount | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 16, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 30, 2020 |
Hydrofarm | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Common shares owned (in shares) | 593,261 | |||
Investment stock price (in dollars per share) | $ 52.58 | |||
Investment value | $ 23,850 | |||
Warrants held (in shares) | 296,630 | |||
Exercise price of warrants | $ 16.86 | |||
Warrants and Rights Outstanding | $ 10,200 | |||
Debt instrument, convertible, conversion price (in dollars per share) | $ 16.86 | |||
Gross proceeds | $ 40,760 | |||
Hydrofarm | Common Stock and Warrants | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt conversion, converted instrument, warrants or options issued | 593,261 | |||
Hydrofarm | Common Stock | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt conversion, converted instrument, warrants or options issued | 296,630 | |||
Edible Garden Corp | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Secured promissory note | $ 3,000 | |||
Estimated fair value of the options | $ 330 | |||
Edible Garden | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Purchase interest | 20.00% | |||
Shares acquired | 5,000,000 | |||
Impairment of assets | $ 330 | |||
Edible Garden | Option One | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Purchase interest | 10.00% | |||
Edible Garden | Option Two | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Purchase interest | 10.00% |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - USD ($) | Oct. 01, 2021 | Sep. 01, 2021 | Aug. 15, 2021 | Aug. 04, 2021 | Feb. 14, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 01, 2021 |
Business Acquisition [Line Items] | ||||||||
Total revenues | $ 47,673,000 | $ 6,161,000 | ||||||
Net loss from continuing operations | $ (43,061,000) | $ (8,006,000) | ||||||
Common stock, shares, issued (in shares) | 498,546,295 | 196,512,867 | ||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||||
OneQor Technologies, Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Business acquisition, equity interest issued or issuable, number of shares | 58,154,027 | |||||||
Stock options assumed | $ 9,310,000 | |||||||
Total revenues | $ 1,210,000 | |||||||
Net loss from continuing operations | $ 160,000 | $ (12,290,000) | ||||||
Umbrla, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Total revenues | 21,500,000 | |||||||
Net loss from continuing operations | $ 6,880,000 | |||||||
Common stock, shares, issued (in shares) | 191,772,781 | |||||||
Common stock, capital shares reserved for future issuance | 23,424,674 | |||||||
People’s California | ||||||||
Business Acquisition [Line Items] | ||||||||
Common stock, shares, issued (in shares) | 40,000,000 | |||||||
Cash acquired in excess of payments to acquire business | $ 24,000,000 | |||||||
Receivable with imputed interest, face amount | $ 36,000,000 | |||||||
Common stock, par value (in dollars per share) | $ 0.40 | |||||||
Interest rate | 3.00% | 3.00% | ||||||
Notes issued | $ 9,000,000 | $ 6,000,000 | ||||||
Cash | $ 24,000,000 | |||||||
Silverstreak | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash | $ 1,500,000 | |||||||
Restricted stock received (in shares) | 9,051,412 | |||||||
Par value (in dollars per share) | $ 0.001 | |||||||
Value of stock received | $ 2,500,000 | |||||||
Silverstreak | Six Months | ||||||||
Business Acquisition [Line Items] | ||||||||
Unsecured promissory notes | $ 2,000,000 | |||||||
Interest rate | 3.00% | |||||||
Silverstreak | Twelve Months | ||||||||
Business Acquisition [Line Items] | ||||||||
Unsecured promissory notes | $ 2,500,000 | |||||||
Interest rate | 3.00% |
BUSINESS COMBINATIONS - Schedul
BUSINESS COMBINATIONS - Schedule of Allocation of Plan Assets (Details) - USD ($) | Dec. 31, 2021 | Oct. 01, 2021 | Sep. 01, 2021 | Jul. 01, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets acquired | ||||||
Goodwill | $ 48,132,000 | $ 6,171,000 | $ 21,471,000 | |||
Liabilities assumed | ||||||
Short-term lease liability | 3,120,000 | 694,000 | ||||
Long-term lease liabilities | 21,316,000 | $ 7,775,000 | ||||
Total Debt | 57,726,000 | |||||
Umbrla, Inc. | ||||||
Assets acquired | ||||||
Accounts receivable | $ 3,772,000 | |||||
Inventory | 6,532,000 | |||||
Prepaid expenses | 1,543,000 | |||||
Property, plant and equipment | 1,450,000 | |||||
Notes receivable | 750,000 | |||||
Other long-term assets | 3,000 | |||||
Right-of-use asset | 460,000 | |||||
Trade name | 31,130,000 | |||||
Licenses | 40,760,000 | |||||
Goodwill | 16,216,000 | |||||
Total Assets acquired | 102,617,000 | |||||
Liabilities assumed | ||||||
Accounts payable/accrued expenses | 15,849,000 | |||||
Short-term lease liability | 118,000 | |||||
Long-term lease liabilities | 342,000 | |||||
Short-term debt | 4,796,000 | |||||
Total Debt | 674,000 | |||||
Deferred income | 499,000 | |||||
Uncertain Tax Position | 1,806,000 | |||||
Total liabilities assumed | $ 24,084,000 | |||||
People’s California | ||||||
Assets acquired | ||||||
Inventory | $ 662,000 | |||||
Prepaid expenses | 74,000 | |||||
Property, plant and equipment | 554,000 | |||||
Right-of-use asset | 2,105,000 | |||||
Trade name | 4,500,000 | |||||
Licenses | 49,510,000 | |||||
Goodwill | 20,995,000 | |||||
Total Assets acquired | 78,400,000 | |||||
Liabilities assumed | ||||||
Accounts payable/accrued expenses | 2,586,000 | |||||
Deferred taxes | 4,775,000 | |||||
Short-term lease liability | 540,000 | |||||
Long-term lease liabilities | 1,565,000 | |||||
Total liabilities assumed | $ 9,466,000 | |||||
OneQor Technologies, Inc | ||||||
Assets acquired | ||||||
Accounts receivable | 51,000 | |||||
Inventory | 81,000 | |||||
Prepaid expenses | 241,000 | |||||
Property, plant and equipment | 80,000 | |||||
Customer relationships | 3,070,000 | |||||
Other long-term assets | 260,000 | |||||
Trade name | 690,000 | |||||
Goodwill | 6,763,000 | |||||
Total Assets acquired | 11,237,000 | |||||
Liabilities assumed | ||||||
Accounts payable/accrued expenses | 1,481,000 | |||||
Short-term debt | 100,000 | |||||
Deferred income | 300,000 | |||||
Stock options assumed | 108,000 | |||||
Total liabilities assumed | $ 1,990,000 | |||||
Silverstreak | ||||||
Assets acquired | ||||||
Inventory | $ 215,000 | |||||
Prepaid expenses | 6,000 | |||||
Property, plant and equipment | 257,000 | |||||
Licenses | 161,000 | |||||
Goodwill | 10,921,000 | |||||
Total Assets acquired | 11,561,000 | |||||
Liabilities assumed | ||||||
Accounts payable/accrued expenses | 1,517,000 | |||||
Deferred taxes | 14,000 | |||||
Taxes payable | 1,553,000 | |||||
Total liabilities assumed | $ 3,084,000 |
BUSINESS COMBINATIONS - The Com
BUSINESS COMBINATIONS - The Components Of The Purchase Price (Details) - USD ($) | Oct. 01, 2021 | Sep. 01, 2021 | Jul. 01, 2021 |
Umbrla, Inc. | |||
Business Acquisition [Line Items] | |||
Stock | $ 52,929,000 | ||
Liability for holdback shares | 6,465,000 | ||
Stock options assumed | 9,695,000 | ||
Warrants assumed | 10,733,000 | ||
Less: cash transferred | (1,290,000) | ||
Total consideration | $ 78,532,000 | ||
People’s California | |||
Business Acquisition [Line Items] | |||
Cash | $ 24,000,000 | ||
Note payable | 33,749,000 | ||
Stock | 16,000,000 | ||
Less: cash transferred | (994,000) | ||
Total consideration | $ 72,755,000 | ||
Silverstreak | |||
Business Acquisition [Line Items] | |||
Cash | $ 1,500,000 | ||
Note payable | 4,500,000 | ||
Stock | 2,500,000 | ||
Less: cash transferred | (24,000) | ||
Total consideration | $ 8,476,000 |
BUSINESS COMBINATIONS - Pro For
BUSINESS COMBINATIONS - Pro Forma Information (Details) - OneQor Technologies, Inc - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||
Pro-forma revenues | $ 95,867 | $ 88,078 |
Pro-forma net loss from continuing operations | $ (36,454) | $ (1,077) |
DISCONTINUED OPERATIONS - Narra
DISCONTINUED OPERATIONS - Narrative (Details) - USD ($) shares in Thousands, $ in Thousands | Dec. 07, 2021 | Aug. 09, 2021 | Apr. 15, 2020 | Mar. 30, 2020 | May 08, 2019 | Aug. 19, 2019 | Dec. 31, 2021 | Nov. 17, 2021 | Aug. 10, 2021 | Sep. 30, 2020 | Feb. 26, 2020 | Oct. 26, 2017 |
Promissory Note | Secured Debt | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Promissory note | $ 30,600 | |||||||||||
Interest rate | 8.00% | |||||||||||
NuLeaf | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Equity method investment, ownership percentage | 50.00% | |||||||||||
Consideration | $ 6,500 | |||||||||||
NuLeaf | MediFarm LLC | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Equity method investment, ownership percentage | 50.00% | |||||||||||
NuLeaf | NuLeaf Sparks Cultivation, LLC | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Equity method investment, ownership percentage | 50.00% | |||||||||||
Edible Garden | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Purchase interest | 20.00% | |||||||||||
Shares acquired | 5,000 | |||||||||||
Edible Garden | Option One | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Purchase interest | 10.00% | |||||||||||
Edible Garden | Option Two | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Purchase interest | 10.00% | |||||||||||
Edible Garden | Promissory Note | Secured Debt | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Debt Instrument, Term | 5 years | |||||||||||
Promissory note | $ 3,000 | |||||||||||
Interest rate | 3.50% | |||||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Proceeds from sale of property | $ 13,400 | $ 2,600 | ||||||||||
Gain (loss) on sale of assets | $ (100) | |||||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Consideration | $ 1,700 | |||||||||||
Gain (loss) on sale of assets | $ 1,700 | |||||||||||
MediFarm LLC | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Consideration | $ 5,250 | $ 10,000 | $ 13,500 | |||||||||
Cash consideration | 2,500 | 7,200 | 9,300 | |||||||||
Notes receivable consideration | 2,750 | 2,800 | 4,200 | |||||||||
Loss on sale of assets | $ 5,030 | $ 5,430 | $ 2,370 | |||||||||
Interest rate | 8.00% | |||||||||||
Blum Santa Ana | Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Consideration | $ 3,800 | $ 1,450 | $ 2,000 |
DISCONTINUED OPERATIONS - Dispo
DISCONTINUED OPERATIONS - Disposals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Sep. 30, 2020 | Feb. 26, 2020 | |
Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations | Blum Santa Ana | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Consideration | $ 3,800 | $ 1,450 | $ 2,000 |
Inventory | 23 | ||
Prepaid and other current assets | 33 | ||
Property, plant & equipment | 98 | ||
Intangible assets and goodwill | 6,565 | ||
Other long-term assets | 54 | ||
Lease liability, net of right-of-use asset | (78) | ||
Net book value of assets divested and liabilities transferred | 6,695 | ||
Loss on sale | (2,895) | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Edible Garden | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Fair value of note receivable | 2,960 | ||
Fair value of options | 330 | ||
Less: cash transferred to purchaser | (30) | ||
Consideration | 3,260 | ||
Accounts receivable | 360 | ||
Inventory | 520 | ||
Other current assets | 80 | ||
Property, plant & equipment | 4,100 | ||
Intangible assets | 70 | ||
Other long-term assets | 200 | ||
Accounts payable and accrued expenses | (1,700) | ||
Lease liability, net of right-of-use asset | (70) | ||
Net book value of assets divested and liabilities transferred | 3,560 | ||
Loss on sale | $ (300) |
DISCONTINUED OPERATIONS - Sched
DISCONTINUED OPERATIONS - Schedule of discontinued operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total revenues | $ 47,673 | $ 6,161 |
Gross profit | 11,967 | 2,643 |
Selling, general and administrative expenses | 48,257 | 19,319 |
Interest expense | (1,776) | (1,394) |
Other income (loss) | $ (433) | $ 929 |
Net loss per common share attributable to Unrivaled Brands, Inc. common stockholders – diluted (in dollars per share) | $ (0.08) | $ (0.16) |
Net loss per common share attributable to Unrivaled Brands, Inc. common stockholders – diluted (in dollars per share) | $ (0.08) | $ (0.16) |
Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total revenues | $ 12,900 | $ 13,354 |
Cost of goods sold | 7,687 | 10,905 |
Gross profit | 5,213 | 2,449 |
Selling, general and administrative expenses | 6,523 | 10,495 |
Impairment of assets | 0 | 10,359 |
Loss on sale of assets | (6,583) | 1,962 |
Income (Loss) from operations | 5,273 | (20,367) |
Interest expense | (976) | (565) |
Other income (loss) | 7,806 | 12 |
Income (Loss) from discontinued operations | $ 12,103 | $ (20,920) |
Net loss per common share attributable to Unrivaled Brands, Inc. common stockholders – diluted (in dollars per share) | $ 0.02 | $ (0.03) |
Net loss per common share attributable to Unrivaled Brands, Inc. common stockholders – diluted (in dollars per share) | $ 0.02 | $ (0.03) |
DISCONTINUED OPERATIONS - Sch_2
DISCONTINUED OPERATIONS - Schedule of assets and liabilities for discontinued operations (Details) - Discontinued Operations - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cash | $ 1,544 | $ 671 |
Accounts receivable, net | 1,553 | 483 |
Inventory, net | 1,359 | 2,152 |
Prepaid expenses and other assets | 39 | 23 |
Property, equipment and leasehold improvements, net | 17,661 | 10,207 |
Other assets | 323 | 582 |
Assets of discontinued operations | 22,479 | 14,118 |
Accounts payable and accrued expenses | 1,170 | 1,380 |
Short-term debt | 0 | 0 |
Deferred gain on sale of assets | 0 | 8,783 |
Long-term lease liabilities | 184 | 335 |
Liabilities of discontinued operations | $ 1,354 | $ 10,498 |
SEGMENT INFORMATION - Revenue (
SEGMENT INFORMATION - Revenue (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($)Segment | |
Segment Reporting [Abstract] | ||
Number of reportable segments | Segment | 1 | |
Revenue, Major Customer [Line Items] | ||
Total revenues | $ 47,673 | $ 6,161 |
Revenue Benchmark | Revenue from Rights Concentration Risk | ||
Revenue, Major Customer [Line Items] | ||
% of Total Revenue | 100.00% | 100.00% |
Cannabis Retail | ||
Revenue, Major Customer [Line Items] | ||
Total revenues | $ 24,540 | $ 5,400 |
Cannabis Retail | Revenue Benchmark | Revenue from Rights Concentration Risk | ||
Revenue, Major Customer [Line Items] | ||
% of Total Revenue | 51.50% | 87.60% |
Cannabis Cultivation & Distribution | ||
Revenue, Major Customer [Line Items] | ||
Total revenues | $ 23,131 | $ 460 |
Cannabis Cultivation & Distribution | Revenue Benchmark | Revenue from Rights Concentration Risk | ||
Revenue, Major Customer [Line Items] | ||
% of Total Revenue | 48.50% | 7.50% |
Corporate and Other | ||
Revenue, Major Customer [Line Items] | ||
Total revenues | $ 2 | $ 301 |
Corporate and Other | Revenue Benchmark | Revenue from Rights Concentration Risk | ||
Revenue, Major Customer [Line Items] | ||
% of Total Revenue | 0.00% | 4.90% |
SEGMENT INFORMATION - Income St
SEGMENT INFORMATION - Income Statement (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue, Major Customer [Line Items] | ||
Total revenues | $ 47,673 | $ 6,161 |
Cost of goods sold | 35,706 | 3,518 |
Gross profit | 11,967 | 2,643 |
Selling, general and administrative expenses | 48,257 | 19,319 |
Impairment of assets | 6,171 | 19,910 |
Gain on sale of assets | (3,133) | 0 |
Loss from operations | (39,328) | (36,586) |
Loss on extinguishment of debt | (5,976) | 0 |
Gain on investments | 5,337 | 0 |
Interest income / (expense) | (1,776) | (1,394) |
Unrealized gain on investments | 0 | 29,045 |
Other income / (loss) | (433) | 929 |
Total other income / (expense) | (2,848) | 28,580 |
Loss before provision for income taxes | (42,176) | (8,006) |
Assets | 271,824 | 100,294 |
Cannabis Retail | ||
Revenue, Major Customer [Line Items] | ||
Total revenues | 24,540 | 5,400 |
Cost of goods sold | 13,706 | 2,253 |
Gross profit | 10,834 | 3,147 |
Selling, general and administrative expenses | 12,327 | 7,145 |
Impairment of assets | 6,171 | 19,910 |
Gain on sale of assets | 0 | 0 |
Loss from operations | (7,664) | (23,908) |
Loss on extinguishment of debt | 0 | |
Gain on investments | 0 | |
Interest income / (expense) | (85) | 0 |
Unrealized gain on investments | 0 | |
Other income / (loss) | 110 | 755 |
Total other income / (expense) | 25 | 755 |
Loss before provision for income taxes | (7,639) | (23,153) |
Assets | 67,821 | 13,342 |
Cannabis Cultivation & Distribution | ||
Revenue, Major Customer [Line Items] | ||
Total revenues | 23,131 | 460 |
Cost of goods sold | 22,000 | 293 |
Gross profit | 1,131 | 167 |
Selling, general and administrative expenses | 7,961 | 1,307 |
Impairment of assets | 0 | 0 |
Gain on sale of assets | 56 | 0 |
Loss from operations | (6,886) | (1,140) |
Loss on extinguishment of debt | 116 | |
Gain on investments | 0 | |
Interest income / (expense) | (186) | 0 |
Unrealized gain on investments | 0 | |
Other income / (loss) | 85 | 65 |
Total other income / (expense) | 15 | 65 |
Loss before provision for income taxes | (6,871) | (1,075) |
Assets | 476 | 37,390 |
Corporate and Other | ||
Revenue, Major Customer [Line Items] | ||
Total revenues | 2 | 301 |
Cost of goods sold | 0 | 972 |
Gross profit | 2 | (671) |
Selling, general and administrative expenses | 27,969 | 10,867 |
Impairment of assets | 0 | 0 |
Gain on sale of assets | (3,189) | 0 |
Loss from operations | (24,778) | (11,538) |
Loss on extinguishment of debt | (6,092) | |
Gain on investments | 5,337 | |
Interest income / (expense) | (1,505) | (1,394) |
Unrealized gain on investments | 29,045 | |
Other income / (loss) | (628) | 109 |
Total other income / (expense) | (2,888) | 27,760 |
Loss before provision for income taxes | (27,666) | 16,222 |
Assets | $ 203,527 | $ 49,563 |
LITIGATION AND CLAIMS (Details)
LITIGATION AND CLAIMS (Details) $ in Thousands | 1 Months Ended |
Aug. 31, 2020USD ($) | |
Litigation Settlement [Abstract] | |
Contract damages | $ 835 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Jul. 01, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||||
Notes payable - promissory notes | $ 57,522 | $ 14,687 | ||
Halladay Holding, Inc | ||||
Related Party Transaction [Line Items] | ||||
Outstanding membership interests acquired | 100.00% | |||
Aggregate purchase price | $ 4,600 | |||
OneQor Technologies, Inc | ||||
Related Party Transaction [Line Items] | ||||
Notes payable - promissory notes | $ 1,800 | |||
Greenlane Holdings, Inc | ||||
Related Party Transaction [Line Items] | ||||
Goods and services | $ 450 | |||
Securities Purchase Agreement | ||||
Related Party Transaction [Line Items] | ||||
Interest rate | 9.89% | |||
Securities Purchase Agreement | Matthew Lee Morgan | ||||
Related Party Transaction [Line Items] | ||||
Interest rate | 10.00% |
GOING CONCERN (Details)
GOING CONCERN (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2021 | |
Risks and Uncertainties [Abstract] | |||
Pre-tax net loss from continuing operations | $ 42,176 | $ 8,006 | |
Accumulated deficit | 250,015 | $ 219,803 | $ 218,744 |
Cash | $ 6,890 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Apr. 14, 2022 | Apr. 12, 2022 | Apr. 11, 2022 | Apr. 05, 2022 | Mar. 17, 2022 | Feb. 28, 2022 | Feb. 16, 2022 | Feb. 10, 2022 | Feb. 01, 2022 | Jan. 21, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 07, 2022 | Feb. 12, 2022 | Aug. 10, 2021 |
Long-term debt | $ 10,006 | $ 6,632 | ||||||||||||||
Proceeds from sale of property and building | $ 15,264,000 | $ 20,772,000 | ||||||||||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||||||||||||
Forecast | ||||||||||||||||
Amendment consideration to be paid | $ 5,000,000 | |||||||||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||||||||||||
Consideration | $ 1,700,000 | |||||||||||||||
Subsequent Event | ||||||||||||||||
Proceeds from sale of land | $ 450,000 | |||||||||||||||
Common stock, par value (in dollars per share) | $ 0.001 | |||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | |||||||||||||||
Stock, securities, warrants, rights, debt and purchase contracts authorized to be issued, value | $ 100,000,000 | |||||||||||||||
Amendment consideration to be paid | $ 3,000,000 | |||||||||||||||
Cash compensation | $ 83,333.3 | |||||||||||||||
Subsequent Event | Oren Schauble | ||||||||||||||||
Percent of base salary paid | 50.00% | |||||||||||||||
Subsequent Event | Francis Knuettel | ||||||||||||||||
Percent of base salary paid | 50.00% | |||||||||||||||
Subsequent Event | Restricted Stock | Oren Schauble | ||||||||||||||||
Shares granted (in shares) | 910,623 | |||||||||||||||
Subsequent Event | Restricted Stock | ||||||||||||||||
Shares sold (in shares) | 25,000,000 | |||||||||||||||
Aggregate sales price | $ 4,375,000 | |||||||||||||||
Subsequent Event | Common Stock | ||||||||||||||||
Shares sold (in shares) | 294,452 | |||||||||||||||
Subsequent Event | Disposal Group, Held-for-sale, Not Discontinued Operations | Dyer Property | ||||||||||||||||
Proceeds from sale of property and building | $ 13,400,000 | |||||||||||||||
Debt retired | 9,000,000 | |||||||||||||||
Subsequent Event | Disposal Group, Held-for-sale, Not Discontinued Operations | NuLeaf | ||||||||||||||||
Consideration | $ 6,500,000 | |||||||||||||||
Convertible promissory note | Subsequent Event | ||||||||||||||||
Promissory note amount | $ 50,000 | |||||||||||||||
Unsecured Promissory Note | ||||||||||||||||
Long-term debt | $ 1,050,000 | |||||||||||||||
Senior Secured Promissory Note | ||||||||||||||||
Long-term debt | 2,500,000 | |||||||||||||||
Senior Secured Promissory Note | Subsequent Event | ||||||||||||||||
Long-term debt | $ 2,500,000 | |||||||||||||||
Promissory note four | ||||||||||||||||
Long-term debt | $ 562,000 | $ 562,000 | ||||||||||||||
Promissory note four | Subsequent Event | ||||||||||||||||
Long-term debt | $ 562,000 | |||||||||||||||
Gain on debt forgiveness | $ 542,000 |