Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 10, 2020 | Jun. 28, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | MJ Holdings, Inc. | ||
Entity Central Index Key | 0001456857 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
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 Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 14,867,296 | ||
Entity Common Stock, Shares Outstanding | 65,756,262 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash | $ 22,932 | $ 56,656 |
Accounts receivable | 11,675 | |
Inventory | 1,587,852 | |
Prepaid expenses | 476,742 | 481,216 |
Marketable securities - available for sale | 150,000 | |
Other current assets | 156,229 | |
Prepaid inventory | 337,560 | |
Total current assets | 817,578 | 2,463,284 |
Property and equipment, net | 4,574,082 | 2,628,951 |
Intangible assets | 300,000 | 300,000 |
Marketable securities - available for sale | 150,000 | |
Deposits | 289,817 | 138,634 |
Operating lease - right-of-use asset | 2,194,278 | |
Total assets | 8,175,755 | 5,680,869 |
Current liabilities | ||
Accounts payable and accrued expenses | 1,076,145 | 619,202 |
Customer deposit | 441,000 | 386,416 |
Current portion of long-term notes payable | 1,249,561 | 312,905 |
Operating lease obligation, short-term | 237,604 | |
Total current liabilities | 3,004,310 | 1,318,523 |
Non-current liabilities | ||
Long-term notes payable, net of current portion | 929,526 | 1,036,101 |
Operating lease obligation, net of current portion | 2,131,042 | |
Deferred rent | 204,026 | |
Total non-current liabilities | 3,060,568 | 1,240,127 |
Total liabilities | 6,064,878 | 2,558,650 |
Stockholders' equity | ||
Common stock, $0.001 par value, 95,000,000 shares authorized, 65,436,449 and 70,894,146 shares issued, issuable, and outstanding at December 31, 2019 and December 31, 2018, respectively | 65,436 | 70,894 |
Additional paid-in capital | 18,177,723 | 10,921,774 |
Common stock issuable | 19 | |
Subscription receivable | 10,000 | |
Accumulated deficit | (16,038,345) | (7,870,449) |
Total stockholders' deficit attributable to MJ Holdings, Inc. | 2,214,833 | 3,122,219 |
Noncontrolling interests | (103,956) | |
Total shareholders' equity | 2,110,877 | 3,122,219 |
Total liabilities and stockholders' equity | 8,175,755 | 5,680,869 |
Series A convertible Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock, $0.001 par value, 5,000,000 shares authorized, 0 shares issued; Series A convertible Preferred stock $1,000 slated value, 2,500 authorized, 0 shares issued and outstanding |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Preferred stock, stated value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, no par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 95,000,000 | 95,000,000 |
Common stock, shares issued | 65,436,449 | 70,894,146 |
Common stock, shares issuable | 65,436,449 | 70,894,146 |
Common stock, shares outstanding | 65,436,449 | 70,894,146 |
Series A convertible Preferred Stock [Member] | ||
Preferred stock, stated value | $ 1,000 | $ 1,000 |
Preferred stock, shares authorized | 2,500 | 2,500 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||
Revenue, net | $ 897,696 | $ 8,150 |
Operating expenses | ||
Cost of sales | 1,187,723 | 10,000 |
General and administrative | 6,774,597 | 4,194,751 |
Marketing and selling | 15,967 | 486,018 |
Depreciation and amortization | 371,512 | 123,256 |
Total operating expenses | 8,349,799 | 4,814,025 |
Operating loss | (7,452,103) | (4,805,875) |
Other income (expense) | ||
Interest expense | (127,656) | (15,151) |
Interest income | 10,540 | 598 |
Loss on impairment of investments | (1,110,356) | (187,500) |
Loss on write down of deposit | (13,343) | |
Other income | 421,066 | |
Total other (expense) | (819,749) | (202,053) |
Loss before provision for income tax | (8,271,852) | (5,007,928) |
Provision for income taxes | ||
Net Loss | (8,271,852) | (5,007,928) |
Deemed dividend related to beneficial conversion feature of convertible preferred stock | (2,500,000) | |
Loss attributable to non-controlling interests | (103,956) | |
Net loss attributable to common shareholders | $ (8,167,896) | $ (7,507,928) |
Net loss attributable to common stockholders per share - basic and diluted | $ (0.14) | $ (0.12) |
Weighted average number of shares outstanding - basic and diluted | 57,640,807 | 64,677,529 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders Equity - USD ($) | Preferred Stock [Member] | Common Stock Issuable [Member] | Common Stock [Member] | Additional Paid In Capital [Member] | Subscriptions Payable [Member] | Non Controlling Interest [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 400 | $ 62,675 | $ 1,704,764 | $ (362,521) | $ 1,804,918 | |||
Balance, shares at Dec. 31, 2017 | 400,000 | 62,675,407 | ||||||
Issuance of preferred stock for cash | $ 3 | 2,499,997 | 2,500,000 | |||||
Issuance of preferred stock for cash, shares | 2,500 | |||||||
Issuance of common stock for deposit on land acquisition | $ 29 | 49,971 | 50,000 | |||||
Issuance of common stock for deposit on land acquisition, shares | 29,070 | |||||||
Issuance of common stock for stock exchange with HCMC | $ 86 | 149,914 | 150,000 | |||||
Issuance of common stock for stock exchange with HCMC, shares | 85,714 | |||||||
Issuance of common stock for deposit related to Joint Venture | $ 250 | 187,250 | 187,500 | |||||
Issuance of common stock for deposit related to Joint Venture, shares | 250,000 | |||||||
Issuance of common stock for services | $ 45 | 59,945 | 59,990 | |||||
Issuance of common stock for services, shares | 44,781 | |||||||
Issuance of common stock for cash | $ (400) | $ 4,476 | 3,516,525 | 3,121,001 | ||||
Issuance of common stock for cash, shares | (400,000) | 4,475,841 | ||||||
Conversion of preferred stock for common stock | $ (3) | $ 3,333 | (3,330) | |||||
Conversion of preferred stock for common stock, shares | (2,500) | 3,333,333 | ||||||
Contributed services | 250,000 | 250,000 | ||||||
Issuance of stock options for services | 6,738 | 6,738 | ||||||
Deemed dividend related to beneficial conversion feature of convertible preferred stock | 2,500,000 | (2,500,000) | ||||||
Net loss | (5,007,928) | (5,007,928) | ||||||
Balance at Dec. 31, 2018 | $ 70,894 | 10,921,774 | (7,870,449) | 3,122,219 | ||||
Balance, shares at Dec. 31, 2018 | 70,894,146 | |||||||
Issuance of preferred stock for cash | ||||||||
Issuance of preferred stock for cash, shares | ||||||||
Issuance of common stock for services | $ 1,647 | 794,582 | 796,229 | |||||
Issuance of common stock for services, shares | 1,645,636 | |||||||
Issuance of common stock for stock subscriptions payable | $ 12,330 | 6,152,670 | 10,000 | 6,175,000 | ||||
Issuance of common stock for stock subscriptions payable, shares | 12,330,000 | |||||||
Return of common stock for cash | $ (20,000) | (20,000) | ||||||
Return of common stock for cash, shares | (20,000,000) | |||||||
Issuance of common stock for purchase of property and equipment | $ 65 | 49,935 | 50,000 | |||||
Issuance of common stock for purchase of property and equipment, shares | 66,667 | |||||||
Issuance of common stock for conversion of debt and interest | $ 19 | $ 500 | 258,762 | 259,281 | ||||
Issuance of common stock for conversion of debt and interest, shares | 18,562 | 500,000 | ||||||
Net loss | (103,956) | (8,167,896) | (8,271,852) | |||||
Balance at Dec. 31, 2019 | $ 19 | $ 65,436 | $ 18,177,723 | $ 10,000 | $ (103,956) | $ (16,038,345) | $ 2,110,877 | |
Balance, shares at Dec. 31, 2019 | 18,562 | 65,436,449 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows from Operating Activities | ||
Net loss attributable to MJ Holdings, Inc. | $ (8,167,896) | $ (7,507,928) |
Net loss attributable to noncontrolling interests | (103,956) | |
Net loss | (8,271,852) | (5,007,928) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of right to use asset | 150,007 | |
Amortization of deferred rent | 99,461 | |
Common stock issued for services | 796,236 | 66,728 |
Depreciation and amortization | 371,512 | 123,256 |
Impairment of cost method investments | 250,000 | |
Impairment of notes receivable | 160,356 | |
Impairment of deposits | 700,000 | |
Impairment of inventory | 1,271,402 | |
Impairment of joint venture | 187,500 | |
Contributed services | 250,000 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (11,675) | |
Interest receivable | (10,356) | |
Inventory | 316,450 | (1,587,852) |
Prepaid expenses and prepaid inventory | 342,034 | (813,276) |
Asset held for disposition | 584 | |
Deposits | (851,183) | (46,251) |
Accounts payable and accrued liabilities | 446,224 | 548,820 |
Deferred rent | (7,150) | |
Other current assets | (156,229) | |
Operating lease liability | (172,515) | |
Customer deposits | 54,584 | 386,416 |
Net cash used in operating activities | (4,622,155) | (5,792,542) |
Cash Flows from Investing Activities | ||
Purchase of property and equipment | (1,116,643) | |
Purchase of cost method investment | (250,000) | |
Issuance of note receivable | (150,000) | |
Purchase of fixed assets | (2,734,672) | |
Net cash used in investing activities | (1,516,643) | (2,734,672) |
Cash Flows from Financing Activities | ||
Proceeds from issuance of notes payable | 201,000 | 1,350,000 |
Proceeds from the issuance of convertible preferred stock | 2,500,000 | |
Proceeds from the issuance of common stock | 6,164,993 | 3,121,001 |
Proceeds from the common stock to be issued | 10,000 | |
Repayment of notes payable | (270,919) | (994) |
Repayment of convertible note due to related party | (900,000) | |
Net cash provided by financing activities | 6,105,074 | 6,070,007 |
Net decrease in cash | (33,724) | (2,457,207) |
Cash, beginning of period | 56,656 | 2,513,863 |
Cash, end of period | 22,932 | 56,656 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 116,153 | 6,629 |
Income taxes paid | ||
Non-cash investing and financing activities: | ||
Common stock issued to acquire available for sale securities | 150,000 | |
Common stock issued for deposit related to joint venture | 187,500 | |
Common stock issued for deposit of asset acquisition | 50,000 | |
Conversion of preferred stock into common stock | 3,333 | |
Deemed dividend on preferred stock | 2,500,000 | |
Return and cancellation of common stock | 20,000 | |
Common stock and debt issued for asset acquisition | 300,000 | |
Right of use asset obtained in exchange for operating lease obligation | 2,541,161 | |
Financing purchases of property and equipment | 900,000 | |
Common stock issued for conversion of debt and interest | $ 259,281 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Note 1 — Description of Business MJ Holdings, Inc. (OTCPK: MJNE) is a highly-diversified cannabis holding company providing cultivation management, asset and infrastructure development – currently concentrated in the Las Vegas market. It is the Company’s intention to grow its business and provide a 360-degree spectrum of infrastructure, including, cannabis cultivation, production of cannabis related products, management services, dispensaries and consulting services. The Company intends to grow its business through joint ventures with existing companies possessing complementary subject matter expertise, acquisition of existing companies and through the development of new opportunities. The Company intends to “prove the concept” profitably in the rapidly expanding Las Vegas market and then use that anticipated success as a template for replicating the concept in other developing states through a combination of strategic partnerships, acquisitions and opening new operations. The Company was incorporated on November 17, 2006, as Securitas EDGAR Filings, Inc. under the laws of the State of Nevada. Prior to the formation of Securitas EDGAR Filings Inc., the business was operated as Xpedient EDGAR Filings, LLC, a Florida Limited Liability Company, formed on October 31, 2005. On November 21, 2005, Xpedient EDGAR Filings LLC amended its Articles of Organization to change its name to Securitas EDGAR Filings, LLC. On January 21, 2009, Securitas EDGAR Filings LLC merged into Securitas EDGAR Filings, Inc., a Nevada corporation. On February 14, 2014, the Company amended and restated its Articles of Incorporation and changed its name to MJ Holdings, Inc. On November 22, 2016, in connection with a plan to divest ourselves of the Company’s real estate business, the Company submitted to its stockholders an offer to exchange (the “Exchange Offer”) its common stock for shares in MJ Real Estate Partners, LLC, (“MJRE”) a newly-formed LLC formed for the sole purpose of effecting the Exchange Offer. On January 10, 2017, the Company accepted for exchange 1,800,000 shares of its Common Stock in exchange for 1,800,000 shares of MJRE’s common units, representing membership interests in MJRE. Effective February 1, 2017, the Company transferred its ownership interests in the real estate properties and its subsidiaries, through which the Company held ownership of the real estate properties, to MJRE. MJRE also assumed the senior notes and any and all obligations associated with the real estate properties and business, effective February 1, 2017. Acquisition of Red Earth On December 15, 2017, the Company acquired all of the issued and outstanding membership interests of Red Earth, LLC, a Nevada limited liability company (“Red Earth”) established in October 2016, in exchange for 52,732,969 shares of its Common Stock and a promissory note in the amount of $900,000. The acquisition was accounted for as a “Reverse Merger”, whereby Red Earth was considered the accounting acquirer and became its wholly owned subsidiary. Upon the consummation of the acquisition, the now former members of Red Earth became the beneficial owners of approximately 88% of the Company’s Common Stock, obtained controlling interest of the Company, and retained certain of its key management positions. In accordance with the accounting treatment for a “reverse merger” or a “reverse acquisition”, the Company’s historical financial statements prior to the reverse merger will be replaced with the historical financial statements of Red Earth prior to the reverse merger in all future filings with the SEC. Red Earth is the holder of a Nevada Marijuana Establishment Certificate for the cultivation of marijuana. Our Business History In April 2018, the Company entered into a management agreement with Acres Cultivation, LLC, a Nevada limited liability company (the “Licensed Operator”) that holds a license for the legal cultivation of marijuana for sale under the laws of the State of Nevada. In January of 2019, the Company entered into a revised agreement, which replaced the April 2018 agreement, with the Licensed Operator in order to be more stringently aligned with Nevada marijuana laws. The material terms of the agreement remain unchanged. The Licensed Operator is contractually obligated to pay over to the Company eighty-five (85%) percent of gross revenues defined as gross proceeds from sales of marijuana products minus applicable state excise taxes and local sales tax. The agreement is to remain in force until April 2026. In April 2019, the Licensed Operator was acquired by Curaleaf Holdings, Inc., a publicly traded Canadian cannabis company. The acquisition was subject to all of the contractual obligations between the Company and the Licensed Operator. Pursuant to those agreements, the Licensed Operator engaged the Company to develop, manage and operate a licensed cultivation facility on property owned by the Licensed Operator. Between April and August of 2018, at the Company’s sole cost and expense, ‘sit completed the construction of a 120,000 square-foot outdoor grow facility, including the construction of an 8,000 square-foot building and installation of required security fencing, meeting all of the State of Nevada’s stringent building codes and regulations. Operation of this facility commenced in August 2018 with the Company first test grow. The Company commenced harvest operations in November of 2018 and completed the harvest on December 24, 2018 - yielding more than 5,000 total pounds of marijuana trim. In July of 2019, the Company planted its second marijuana crop; the Company elected to plant less marijuana in an effort to better control the cultivation of the plants and the post-harvest curing process. The Company completed the harvest of its second crop in November of 2019 yielding approximately 3,400 lbs. (dry weight) of considerably higher quality (versus the 2018 harvest) marijuana flower and trim. In April 2018, the State of Nevada finalized and approved the transfer of provisional Medical Marijuana Establishment Registration Certificate No. 012 (the “Certificate”) from Acres Medical, LLC to the Company’s wholly owned subsidiary, Red Earth, LLC (“Red Earth”). HDGLV, LLC (“HDGLV”), a wholly owned subsidiary of Red Earth, holds a triple-net leasehold interest in a 17,298 square-foot commercial building located on Western Avenue in the City of Las Vegas, which will be home to the Company’s indoor cultivation facility (the “Western Facility”). The initial term of the lease is for a period of ten years with two additional five-year lease options. HDGLV also possesses an option to purchase the building for $2,607,880 which is exercisable between months 25 and 60 of the initial term of the lease. In August of 2018, the Company received final approval from the State of Nevada, Department of Taxation, to commence cultivation activities with respect to the Certificate. Contemporaneously therewith, Red Earth was issued a Business License by the City of Las Vegas to operate a marijuana cultivation facility at the Western Facility. In October of 2018, the Company was requested by the City of Las Vegas Department of Building & Safety to make additional modifications to the building, specifically the removal and remediation of all asbestos materials in the building, which was completed in June of 2019 at a cost of approximately $140,000. In July of 2019, the City of Las Vegas asked the Company to amend its Business License and modify its Special Use Permit (“SUP”) to conform with updated marijuana cultivation requirements within the City. A new SUP was granted on October 9, 2019. The Company expects to receive its new business license in Q4 of 2020, which will then allow the Company to commence legal marijuana cultivation activities within the City of Las Vegas. Due to the failure of Element NV, LLC to make the required payments and the impact of the COVID-19 pandemic on the Company’s operations, the Company is eight months in arrears on rent payable on the Western Facility and has received a Notice of Default On June 22, 2018, the Company entered into a Corporate Advisory Agreement (“Advisory Agreement”) with a New York City based consulting company (the “Consultant”) to provide business management, corporate compliance and related services to the Company and its subsidiaries. The Advisory Agreement granted to the Consultant an option to acquire up to 10,000 additional shares of the Company’s common stock at an exercise price of $1.20. The options have a term of three years. The fair value of these stock options was determined to be $6,738 using the Black-Scholes-Merton option-pricing model based on the following assumptions: (i) volatility rate of 222%, (ii) discount rate of 2.88%, (iii) zero expected dividend yield, and (iv) expected life of three years. In September 2018, the Company terminated the Advisory Agreement pursuant to its terms and paid the Consultant compensation consisting of 25,000 shares of the Company’s restricted common stock and a $6,000 cash payment. On August 13, 2018, the Company filed a Certificate of Designation for its Series A Convertible Preferred Stock (the ‘Preferred Stock”) with the Secretary of State of the State of Nevada to designate a series of its convertible preferred stock, authorizing the issuance of 2,500 shares. The stated value of each share of Preferred Stock is $1,000. Subject to a standard “4.99% Beneficial Ownership Limitation blocker,” each share of Preferred Stock was convertible into shares of the Company’s common stock at any time or from time to time at a conversion price equivalent of $0.75 per share, subject to adjustment as described in Certificate of Designation. On August 13, 2018 (the “Transaction Closing Date”), the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”), pursuant to which the Company sold and issued 2,500 shares of its Series A Convertible Preferred Stock (the “Preferred Stock”) to a single institutional accredited investor for $1,000 per share or an aggregate subscription of $2,500,000. During the year ended December 31, 2018, the Preferred Stock was converted into 3,333,333 shares of the Company’s Common Stock at a conversion price of $0.75 per share, subject to adjustment as described in the Certificate of Designation. The Company also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the purchaser, which required the Company to register for resale the underlying common stock with the Securities and Exchange Commission. The registration statement on Form S-1/A was declared effective on October 24, 2018. On August 13, 2018 (the “Effective Transaction Date”), the Company closed the transaction contemplated by an Exclusive Distribution Agreement (the “Distribution Agreement”). The Agreement is between the Company and Healthier Choices Management Corp., a designer and seller (the “Seller” or “HCMC”) of a series of integrated products, all of which are designed to be utilized to consume cannabis products by vaporizing oil and other related products (the “Goods”). The Company has the exclusive right to distribute the Goods in the territory of Nevada (the “Territory”). The Distribution Agreement further requires the Company to advertise and market the Goods in the Territory. Pursuant to the terms of the Distribution Agreement, the Company purchased certain of the Goods from the Seller and paid the sum of two million dollars ($2,000,000). The funds were transferred to HCMC on the Effective Transaction Date. The Seller has applied for and received patent protection in respect of one of the products. The Distribution Agreement is subject to standard termination provisions; however, the Seller has the option to terminate the Distribution Agreement, on 30 days’ written notice, if the Company fails to purchase a sufficient minimum quantity of Goods from the Seller. The Company has met its obligations for the first year of the Agreement. Thereafter, for each renewal term, the Company’s minimum purchase obligation for the Goods is $500,000, subject to good faith negotiation at the end of each contract year. In connection with the transactions contemplated by the Agreement, the Seller granted to the Company a non-exclusive, non-transferrable, and non-sub licensable fully paid license agreement. The Company and HCMC entered into a Termination and Mutual Release Agreement (the “Termination Agreement”) dated November 15, 2019. Under the terms of the Termination Agreement, HCMC agreed to (i) make an initial purchase from the Company of 500,000 Q-Cups at $0.125 per Q-Cup for an aggregate purchase price of $62,500 (the “Initial Purchase”), and (ii) purchase up to a total of 1,600,000 Q-Cups (inclusive of the Initial Purchase) on an as needed basis at the same price of $0.125 at any time after the Effective Date of the Termination Agreement. On August 13, 2018, the Company entered into a Stock Exchange Agreement (the “Agreement”) with HCMC to acquire 1,500,000,000 shares of their common stock in exchange for 85,714 shares of the Company’s common stock. The value of the stock exchanged by each party on the date of exchange was $150,000. The number of shares exchanged represents less than a 5% ownership interest for each company, and the shares issued are restricted pursuant to Rule 144 of the Securities Act of 1933 (the “Act”). The Company recorded the 85,714 shares of HCMC common stock as an available for sale security and intends to mark the value to market each reporting period based on the current market value of its held shares in HCMC. As of the transaction date, the price as quoted on the OTC Markets for HCMC common stock was $0.0001 per share. To date, the Company has not sold any of the shares it received under the Agreement. In August of 2018, the Company executed a letter of intent (“LOI”) for the acquisition of all of the membership units of Farm Road, LLC, a Wyoming limited liability company (“Farm Road”). Farm Road was the owner of five parcels of farmland in the Amargosa Valley of Nevada totaling 260 acres and the concomitant 180 acre-feet of water rights. Pursuant to the terms of a Membership Interest Purchase Agreement (“MIPA”) executed between the Company and Farm Road in November of 2018, the Company was to acquire Farm Road for $1,000,000 on the following terms: a deposit of $50,000 in cash and $50,000 of the Company’s restricted common stock upon execution of the LOI, was to be held in escrow until closing, $150,000 in cash payable at closing and a promissory note bearing 5% simple annual interest (the “Promissory Note”) in the amount of $750,000.00 payable to FR Holdings, LLC (an unrelated third party) (“FRH”) in 36 equal monthly interest only payments of three thousand one hundred twenty five ($3,125.00) dollars commencing on the March 1, 2019. On January 18, 2019, pursuant to the terms of the MIPA, the Company acquired a 100% interest in Farm Road. The terms of the Promissory Note include a balloon payment to be made on January 17, 2022 of any of the then remaining principal balance and accrued interest. The MIPA further provides that FRH shall be entitled to receive a consulting fee of five per cent (5%) of the gross sales from any commercial use of the property up to a maximum of five hundred thousand ($500,000.00) dollars payable to FRH within two years of the January 18, 2019 closing date. The land ac quired in Amargosa Valley will be the home of its Nye County cultivation facility upon closing of its purchase of the required licenses. Due to COVID-19, the Company has been unable to make the monthly interest payments to FRH. As of the date of this filing, the Company is 4 months in arrears. In September of 2018, the Company, through its wholly owned subsidiary Red Earth, applied for five Recreational Marijuana Establishment Licenses to operate up to five retail marijuana stores within the state of Nevada. The Company’s goal was to open a store within the City of Las Vegas, as well as additional dispensaries in Washoe County near Lake Tahoe, in North Las Vegas, unincorporated Clark County and Henderson, Nevada. The Company received notice in early December 2018 that none of the submitted applications received sufficiently high enough scores after being graded by the Nevada Department of Taxation (“NVDOT”). In connection with the license applications, the Company entered into a Memorandum of Understanding (“MOU”) with a third party (the “Party”). Pursuant to the terms of the MOU, the Party made payments to the Company totaling $232,500, which was paid during the year ended December 31, 2018. The Party was entitled to receive shares of the Company’s restricted common stock with a fair market value as of the trading day immediately preceding the date the first license application was submitted to NVDOT (September 20, 2018) equal to $232,500. The Company issued 91,177 shares of common stock to the Party in connection with this transaction. Subsequent to December 31, 2018, the Company entered into an agreement with the Party to relieve the Company and the Party of any further obligations under the MOU in exchange for an additional 373,823 shares of the Company’s restricted common stock. The additional shares were issued to the Party on July 19, 2019. The Company has joined with more than 15 other plaintiffs in an action against the State of Nevada in regard to how the applications were scored and as to why licenses were granted to other applicants in contravention of the guidelines published by the State of Nevada. On August 23, 2019, a Nevada District Court judge issued a preliminary injunction enjoining any of the entities that were granted licenses from opening new dispensaries based upon the failure of NVDOT (the administrative body tasked with adopting and enforcing marijuana regulations within the State of Nevada) to enforce a provision of Ballot Question 2 (“BQ2”), that was approved by Nevada voters in 2016 and adopted by the Nevada legislature and codified as NRS 453D, which legalized the sale and distribution of recreational use marijuana. The law requires that “each prospective owner, officer and board member of a marijuana establishment license applicant” undergo a background check. The judge found that many of the successful license applicants failed to comply with this requirement. On August 29, 2019, the judge modified the ruling and is allowing thirteen of the successful license applicants who the State of Nevada have certified as having complied with the requirements of BQ2 to open new dispensaries as granted in December of 2018. The plaintiffs shall now continue to trial on the merits of the pending litigation against the State of Nevada. In March of 2020, counsel for Red Earth withdrew from its representation of Red Earth. Red Earth is actively trying to retain substitute counsel, which as of the date of this filing Red Earth remains unrepresented in this matter. The trial, which was scheduled to commence in April of 2020, has been postponed by the State of Nevada as part of their implementation measures to stop the spread of COVID-19, as of the date of this filing the trial has not commenced. On September 21, 2018, the Company, through its wholly-owned subsidiary Prescott Management, LLC, entered into a contract to purchase an approximately 10,000 square foot office building located at 1300 South Jones Boulevard, Las Vegas, Nevada 89146 for $1,500,000, subject to seller financing in the amount of $1,100,000; amortizing over 30 years at an interest rate of 6.5% per annum with monthly installments of $6,953 beginning on November 1, 2018, and continuing on the same day of each month thereafter until October 31, 2023. Upon the one-year anniversary of the note, a principal reduction payment of $50,000 was due. The Company was unable to fulfill this obligation when due and the note holder has granted forbearance in regards to this obligation. The Company continues to be obligated to the monthly payment of principal and interest in the amount of $6,953 continuing until October 31, 2023, at which time the entire sum of principal in the amount of $1,087,705, plus any accrued interest, is due and payable. The Company closed the purchase on October 18, 2018. The building is home to the Company’s business operations. The Company has placed the building up for sale in order to better utilize the funds for its grow operations. On October 15, 2018, the Company entered into an employment agreement (the “Tierney Employment Agreement”) with Terrence M. Tierney. Pursuant to the Employment Agreement, the Company appointed Terrence M. Tierney, to the additional position of Chief Administrative Officer, in addition to his current role as Secretary. The initial term of employment was for a three-year period (or until September 30, 2021), unless extended or otherwise terminated in accordance with its terms. The effective date of the Tierney Employment Agreement was October 15, 2018, and continues until the earlier of: (i) the effective date of any subsequent employment agreement between Mr. Tierney and us; (ii) the effective date of any termination of employment as provided for in the Employment Agreement; or (iii) three (3) years from the effective date; provided, that the Tierney Employment Agreement automatically renews for successive periods of three (3) years unless either party gives written notice to the other party that it does not wish to automatically renew the Tierney Employment Agreement, which written notice must be received by the other party no less than ninety (90) days and no more than one hundred eighty (180) days prior to the expiration of the applicable term. Mr. Tierney will report to the Chief Executive Officer and the Board of Directors. On January 22, 2020, Mr. Tierney assumed the title of President of the Company and all duties required thereof. As of January 10, 2020, the Company was in default under the terms of the Tierney Employment Agreement. Mr. Tierney agreed to accrue 100% of his monthly salary for the period October 1, 2019 until December 31, 2019 with payments to resume on the first regular payroll period of 2020. Due to the ongoing effects of COVID-19, Mr. Tierney waived his entire salary for April and May of 2020. As of the date of filing of this report, Mr. Tierney has accrued total cash compensation due to him in the amount of $248,000. On August 7, 2020, Mr. Tierney’s employment was terminated by the Board with cause. Subsequent to Mr. Tierney’s termination, Mr. Tierney filed a lien in Clark County, Nevada in the net amount of $501,085 against the Company’s property located at 1300 S. Jones Blvd, Unit 110, Las Vegas, NV 89146 for unpaid compensation, expense reimbursement, accrued leave, severance pay and penalties. Additionally, on November 6, 2020, Mr. Tierney filed two liens in Nye County, NV in the net amount of $501,085 against the Company’s property located at 4295 Highway 73, Armagosa, NV 89020, also known as the Company’s THC park, and one lien in Nye County, NV in the net amount of $501,085 against the property owned by Acres Cultivation, LLC and the site of the Company’s three (3) acre grow. In October of 2018, the Company entered into a Revenue Participation Rights Agreement (the “Agreement”) with Let’s Roll NV, LLC and Blue Sky Companies, LLC (together, the “Subscribers”). Under the terms of the Agreement, the Company transferred its ownership interest in 3.95% of the gross revenue from the “Amargosa Outdoor Grow” to the Subscribers in exchange for $100,000 cash payment and a Subscription Agreement in the amount of $1,142,100. On or before April 30 th st see Note 15 — Subsequent Events In November of 2018, the Company formed Alternative Hospitality, Inc. (“Alternative”), a Nevada corporation as a joint venture with TVK, LLC (“TVK”), an unrelated Florida limited liability company. The principals of TVK, have over 40 years of broad experience operating and developing hotel properties. The Company owns fifty-one percent (51%) of Alternative and TVK owns the remaining forty-nine percent (49%). Alternative will develop hotel properties with a focus on the wellness aspects of cannabis and cannabis related products. Roger Bloss, one of the principal owners of TVK and a director of the Company, will serve as Alternative’s President. The Company’s Secretary, Terrence M. Tierney, served as TVK’s Vice President and Secretary of Alternative up through the date of his termination. Effective upon the termination of Mr. Tierney, Mr. Bernard Moyle was appointed to serve as Alternative’s Treasurer. In November of 2018, the Company commenced the harvest of more than 7,000 marijuana plants under its Management Agreement with Acres Cultivation, LLC (“Acres”) dated April 18, 2018. The Company completed the harvest of approximately 5,400 lbs. of marijuana trim in late December of 2018. The Company began realizing revenues from this harvest in the first quarter of 2019. Due to issues with its drying and curing equipment, the harvested marijuana trim returned lower than expected THC levels and less than optimal terpene profiles; however, the products returned much higher than average test passing results. In early 2019, the Nevada marijuana market saw a steep decline in the wholesale value of marijuana trim due to a number of factors, including a marked increase in available trim due to a glut of “failed flower” products from other cultivators. In July of 2019, the Company planted a second marijuana crop under its Cultivation and Sales Agreement (the “Cultivation Agreement”) with Acres dated January 18, 2019. The Company elected to plant less marijuana in an effort to better control the cultivation of the plants and the post-harvest curing process. The Company completed the harvest of its second crop in November of 2019 yielding approximately 3,400 lbs. (dry weight) of considerably higher quality (versus the 2018 harvest) marijuana flower and trim. The wholesale price for flower averaged approximately $1300 per lb. of which the Company received a lesser amount based upon the terms of the Cultivation Agreement. On December 21, 2018, the Company filed the Certificate of Incorporation for MJ International Research Company Limited (“MJ International”) in the country of Ireland. MJ International is a wholly owned subsidiary of the Company and the sole shareholder of MJ Holdings International Single Member S.A. and Gioura International Single Member Private Company. In January of 2019, the Company formed Coachill-Inn, LLC (“Coachill-Inn”), a subsidiary of Alternative Hospitality (“AH”), to develop a proposed hotel in Desert Hot Springs, CA. From January through June of 2019, the Company was actively engaged in negotiations with the property owner of the proposed location. In June of 2019, Coachill-Inn executed a purchase and sale agreement with Coachillin’ Holdings, LLC (“CHL”) to acquire a 256,132 sq. ft. parcel of land within a 100-acre industrial cannabis park in Desert Hot Springs, CA (the “Property”) to develop its first hotel project. The purchase price for the property was $5,125,000. CHL was to contribute $3,000,000 toward the purchase price of this property in exchange for a twenty-five percent (25%) ownership interest in Coachill-Inn. AH made an initial non-refundable deposit in the amount of $150,000 toward the purchase of the Property. As of the date of this filing, the Company has terminated its participation in the development due to financing issues. The $150,000 deposit was classified as an impaired asset as of December 31, 2019. Please see Note 7 —Asset Impairment In February of 2019, the Company’s largest shareholder, Red Dot Development, LLC (“Red Dot”), returned 20,000,000 shares of the Company’s common stock for cancellation in exchange for a payment of $20,000, which as of December 31, 2019 has been accrued as a payable by the Company. Beginning in March of 2019, pursuant to the filing of a Form D with the SEC, the Company offered for sale 15,000,000 of these shares at a per share price of $0.50 per share. As of December 31, 2019, the Company sold 12,330,000 shares for total proceeds of $6,165,000. On February 15, 2019, the Company entered into a Licensing Agreement (the “Agreement”) with Highland Brothers, LLC, (“HB”) an entity controlled by the Company’s former Chief Executive Officer and current director. Under the terms of the Agreement, HB granted the Company an exclusive license to use any and all branding materials of HB including, without limitation, its name, logo, and any and all intellectual property rights. In consideration of the license, the Company agreed to compensate HB seven percent (7%) of the net sales generated by the Company for any products utilizing and/or integrating property rights, brands or logos of HB commencing in 2020. The Agreement has a term of ten (10) years. On March 8, 2019, the Company entered into a fifteen year Suite License Agreement (the “Agreement”) with LV Stadium Events Company, LLC for the lease of a suite within the multipurpose stadium (the “Stadium”) constructed in Clark County, Nevada that is intended to be the home stadium for the Raiders National Football League team. Under the terms of the Agreement, the Company paid the initial deposit of $75,000, the second payment of $150,000 and the final payment on approximately October 15, 2020. Commencing with Year 6 of the Term, the License Fee for each Year of the Term shall be increased by an amount not to exceed three percent (3%) of the License Fee payable for the immediately preceding Year. In April of 2019, Roger Bloss was appointed to the Board of Directors of the Company. In April of 2019, the Company executed a Membership Interest Purchase Agreement (the “MIPA”) to acquire all of the membership interests in two Nevada limited liability companies that are each the holder of a State of Nevada marijuana license. Marijuana Establishment Registration Certificate, Application No. C202 and Marijuana Establishment Registration Certificate, Application No. P133 (collectively the “Certificates”). The terms of the MIPA required the Company to purchase the licenses for the total sum of $1,250,000 each - $750,000 in cash per license and $500,000 of the Company’s restricted common stock per license. The terms of the MIPA provide for a $250,000 non-refundable down payment and include a short term note in the amount of $500,000 carrying an annual interest rate of two percent (2%) that was due and payable on or before October 18, 2019. On October 17, 2019, the State of Nevada’s Governor issued an executive order restricting the transfer of all Nevada marijuana licenses (the “Moratorium”). As of the date of this filing, the Company has made deposits totaling $550,000 and has reduced the principal of the aforementioned note to $250,000. It is expected that the Company will receive all of the necessary regulatory approvals during the fourth quarter of 2020. The Company is required to issue $1,000,000 of shares of its restricted common stock in fulfillment of its obligations in the MIPA. As of the date of this filing, these shares have not been issued and the parties are renegotiating the pricing of these shares to more accurately reflect the anticipated value at closing. The Company also executed a $750,000 long term note (the “LT Note”) in favor of the current license holders that becomes due and payable upon the earliest of a) six months after the transfer of the Certificates to the Company, or b) six months after the production/cultivation is declared fully operational by the applicable regulatory agencies, or c) March 10, 2020. On February 19, 2020, the Company was put on notice by the Seller that it is in default under the terms of the MIPA, however, the parties are continuing to act in good faith towards a mutually satisfactory resolution. The LT Note carries an 8% annual interest rate and there is no penalty for any prepayment. Additionally, the Sellers shall receive, at closing, warrants to purchase up to 1,500,000 additional shares of the Company’s common stock; 1,000,000 warrants shall be exercisable for a period of three years from the closing date at an exercise price of $2.00 per share and 500,000 warrants shall be exercisable for a period of two years from the closing date at an exercise price of $1.50 per share (collectively the “Warrants”). The LT Note, Warrants and the restricted common shares issued will be held in escrow until the transaction closes. Additionally, pursuant to the terms of the MIPA, the Company was required to enter into a $15,000 per month sub-lease (retroactive to March 1, 2019) for the 10 acre c |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 — Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Red Earth, LLC, HDGLV, LLC, Icon Management, LLC, Alternative Hospitality, LLC, Condo Highrise Management, LLC and Prescott Management, LLC. Inter-company balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates and assumptions are required in the determination of the fair value of financial instruments and the valuation of stock-based compensation. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. Fair Value of Financial Instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2019 and 2018. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) for identical instruments that are highly liquid, observable and actively traded in over-the-counter markets. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable and can be corroborated by market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Level 1: Level 2 Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. The FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants. As of December 31, 2019 and 2018, the Company’s investment in marketable securities – available for sale was determined to be a level 1 investment. Cash Cash includes cash on hand and deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal and use and with an original maturity of three months or less. The Company maintains its cash in bank deposit accounts. The Company, at various times throughout the year, had cash in financial institutions in excess of Federally insured limits. However, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on its credit balances. Debt Issuance Costs Costs associated with obtaining, closing, and modifying loans and/or debt instruments are netted against the carrying amount of the debt instrument, and charged to interest expense over the term of the loan. Inventory Inventories consist of finished goods as of December 31, 2019. Inventories are valued at the lower of cost or net realizable value. The Company determines cost on the basis of the first in first out method. The Company periodically reviews inventories for obsolescence and any inventories identified as obsolete are reserved or written off. The Company has performed a valuation was has established a reserve against its finished goods inventory. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and any impairment losses. Depreciation is computed using the straight-line method over the useful lives of the assets. Major renewals and betterments are capitalized and depreciated; maintenance and repairs that do not extend the life of the respective assets are expensed as incurred. Upon disposal of assets, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in the consolidated statements of operations. Construction in progress primarily represents the construction or the renovation costs stated at cost less any accumulated impairment loss, which is not depreciated. Costs incurred are capitalized and transferred to property and equipment upon completion, at which time depreciation commences. Property and equipment are depreciated over their estimated useful lives as follows: Buildings 12 years Land Not depreciated Leasehold Improvements Lessor of lease term or 5 years Machinery and Equipment 5 years Furniture and Fixtures 5 years Long–lived Assets Long-lived assets, including real estate property and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate. If the assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair value. The Company did not record any impairments of long-lived assets during the year ended December 31, 2019 and 2018. Intangible assets subject to amortization Intangible assets include intellectual property either owned by the Company or for which the Company has a license. Intangible assets include licenses to cultivate, process and sell cannabis, trade names and non-compete agreements obtained through business acquisitions. Intangible assets acquired in a business combination are recognized at fair value using generally accepted valuation methods deemed appropriate for the type of intangible asset acquired. Generally, the Company utilizes the discounted cash flow method for valuing licenses, the relief from royalty method for valuing trade names and the with or without cash flow method for valuing non-compete agreements. Intangible assets with finite lives are amortized over their estimated useful lives and reported net of accumulated amortization, separately from goodwill. Amortization is calculated on the straight-line method based on the following estimated useful lives: Licenses 12-20 years Trade names 5-15 years Non-compete agreements 1-2 years The estimated useful lives, residual values, and amortization methods are reviewed at each year-end, and any changes in estimates are accounted for prospectively. During the years ended December 31, 2019 and 2018, the Company did not recognize any impairment losses. IAS 36 Impairment of Long-lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, “Impairment or Disposal of Long-Lived Assets.” ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flow analysis or appraisals. The Company recorded an impairment of its long-lived assets in the amount of $1,110,356 and $- for the years ended December 31, 2019 and 2018, respectively. Please see Note 7 —Asset Impairment Non-Controlling Interest Non-controlling interest is shown as a component of shareholders 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. Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 606 – Revenue from Contracts with Customers Generally, the Company considers all revenues as arising from contracts with customers. Revenue is recognized based on the five-step process outlined in the Accounting Standards Codification (“ASC”) 606: Step 1 – Identify the Contract with the Customer – A contract exists when (a) the parties to the contract have approved the contract and are committed to perform their respective obligations, (b) the entity can identify each party’s rights regarding the goods or services to be transferred, (c) the entity can identify the payment terms for the goods or services to be transferred, (d) the contract has commercial substance and it is probably that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Step 2 – Identify Performance Obligations in the Contract – Upon execution of a contract, the Company identifies as performance obligations each promise to transfer to the customer either (a) goods or services that are distinct, or (b) a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. To the extent a contract includes multiple promised goods or services, the Company must apply judgement to determine whether the goods or services are capable of being distinct within the context of the contract. If these criteria are not met, the goods or services are accounted for as a combined performance obligation. Step 3 – Determine the Transaction Price – When (or as) a performance obligation is satisfied, the Company shall recognize as revenue the amount of the transaction price that is allocated to the performance obligation. The contract terms are used to determine the transaction price. Generally, all contracts include fixed consideration. If a contract did include variable consideration, the Company would determine the amount of variable consideration that should be included in the transaction price based on expected value method. Variable consideration would be included in the transaction price, if in the Company’s judgement, it is probable that a significant future reversal of cumulative revenue under the contract would not occur. Step 4 – Allocate the Transaction Price – After the transaction price has been determined, the next step is to allocate the transaction price to each performance obligation in the contract. If the contract only has one performance obligation, the entire transaction price will be applied to that obligation. If the contract has multiple performance obligations, the transaction price is allocated to the performance obligations based on the relative standalone selling price (SSP) at contract inception. Step 5 – Satisfaction of the Performance Obligations (and Recognize Revenue) – Revenue is recognized when (or as) goods or services are transferred to a customer. The Company satisfies each of its performance obligations by transferring control of the promised good or service underlying that performance obligation to the customer. Control is the ability to direct the use of and obtain substantially all of the remaining benefits from an asset. It includes the ability to prevent other entities from directing the use of and obtaining the benefits from an asset. Indicators that control has passed to the customer include: a present obligation to pay; physical possession of the asset; legal title; risks and rewards of ownership; and acceptance of the asset(s). Performance obligations can be satisfied at a point in time or over time. The majority of the Company’s revenue was derived under the agreements, Consulting Agreement and Equipment Lease Agreement, entered into with Acres Cultivation, LLC. Revenue derived from consulting services fees are recognized over the term of the arrangement as services are provided. Revenue is presented net of discounts, fees and other related taxes. Revenue derived from equipment leases The Company recognized an insignificant amount of revenue during the year ended December 31, 2018. For the year ended December 31, 2019, the Company furthered its operations allowing it to generate approximately $900,000 in revenue. Stock-Based Compensation The Company’s share-based payment awards principally consist of grants of common stock. In accordance with the applicable accounting guidance, stock-based payment awards are classified as either equity or liabilities. For equity-classified awards, the Company measures compensation cost based on the grant date fair value and recognizes compensation expense in the consolidated statements of operations over the requisite service or performance period the award is expected to vest. The fair value of liability-classified awards is at each reporting date through the settlement date. Change in fair value during the requisite service period will be remeasured as compensation cost over that period. The Company utilizes its historical stock price to determine the volatility of any stock-based compensation. The expected dividend yield is 0% as the Company has not paid any dividends on its common stock and does not anticipate it will pay any dividends in the foreseeable future. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant date with a term equal to the expected term of the stock-based award. For stock-based financial instruments issued to parties other than employees, the Company uses the contractual term of the financial instruments as the expected term of the stock-based financial instruments. The assumptions used in calculating the fair value of stock-based financial instruments represent its best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and it uses different assumptions, its stock-based compensation expense could be materially different in the future. Convertible Instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815, Derivatives and Hedging Activities. Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. The Company evaluates convertible preferred stock in accordance with ASC 470-20-35-7. The issued Series A Preferred Stock was converted into shares of the Company’s Common Stock at a conversion price of $0.75 per share and the fair value of the common stock based on closing price of the Company’s common stock on the day of issuance of the Preferred Stock was $1.50 per share of common stock. Therefore, the intrinsic value is calculated at $0.75 per share. The Company determined that there is a beneficial conversion feature (“BCF”) of $2,500,000. Since the holder can convert the preferred stock into shares of common stock at any time, amortization of this type of discount on convertible preferred stock occurs upon issuance. The Company treated the amortization of the BCF as a dividend that reduces net income in arriving at income available to common stockholders. Operating Leases Prior to January 1, 2019, the Company accounted for leases under Accounting Standards Codification (ASC) 840, Accounting for Leases. Effective from January 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance on deferred tax assets is established when management considers it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax benefits from an uncertain tax position are only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Interest and penalties related to unrecognized tax benefits are recorded as incurred as a component of income tax expense. The Company has not recognized any tax benefits from uncertain tax positions for any of the reporting periods presented. Recent Accounting Pronouncements Leases: Leases (Topic 842) Stock Based Compensation: Compensation – Stock Compensation (Topic 718) Improvements to Nonemployee Share Based Payment Accounting. The amendments in this Update expand the scope of stock compensation to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance in this Update does not apply to transactions involving equity instruments granted to a lender or investor that provides financing to the issuer. The guidance is effective for fiscal years beginning after December 31, 2018 including interim periods within the fiscal year. The Company adopted with an effective date of January 1, 2019. |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | Note 3 — Going Concern The Company has recurring net losses, which have resulted in an accumulated deficit of $16,038,345 as of December 31, 2019. The Company incurred a net loss of $8,271,852, and negative working capital of $2,186,732 for the year ended December 31, 2019. At December 31, 2019, the Company had cash and cash equivalents of $22,932. These factors raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the financial statements. The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan, raise capital, and generate revenues. The Financial Statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company’s current capital resources include cash, and inventories. Historically, the Company has financed its operations principally through equity and debt financing. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 4 — Inventory At December 31, 2019 and 2018, inventory consisted of finish goods, which amounted to $- and $1,587,852, respectively. At December 31, 2019, the Company elected to impair its inventory in the amount of $1,271,402 due to the Company’s inability to market and sale the products acquired from Healthier Choice Management Corporation. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 5 — Property and Equipment Property and Equipment at December 31, 2019 and 2018 consisted of the following: December 31, December 31, Leasehold Improvements 323,281 17,535 Machinery and Equipment 1,052,203 919,782 Building and Land 3,150,000 1,500,000 Furniture and Fixtures 543,366 314,890 Total property and equipment 5,068,850 2,752,207 Less: Accumulated depreciation (494,768 ) (123,256 ) Property and equipment, net 4,574,082 2,628,951 Depreciation expense for the years ending December 31, 2019 and 2018 was $371,512 and $123,256, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 6 — Intangible Assets In October 2016, Red Earth entered into an Asset Purchase and Sale Agreement with the owner of a provisional Medical Marijuana Establishment Registration Certificate (the “Provisional Grow License”) issued by the state of Nevada for the cultivation of medical marijuana for $300,000. To initiate the purchase and transfer the Provisional Grow License, the Company paid a $25,000 deposit to the seller in October 2016. In February 2017, an investor advanced the Company $350,000 to fund the purchase of the Provisional Grow License. The Provisional Grow License remains in a provisional status until the Company has completed the build out of a cultivation facility and obtained approval from the state of Nevada to begin cultivation in the approved facility. Once approval from the state of Nevada is received, the Company will begin the cultivation process. |
Asset Impairment
Asset Impairment | 12 Months Ended |
Dec. 31, 2019 | |
Asset Impairment | |
Asset Impairment | Note 7 —Asset Impairment Asset impairment as of December 31, 2019 and 2018 consist of the following: December 31, December 31, Smile, LLC (i) 160,356 - Innovation Labs, Ltd. (ii) 250,000 - Coachill-Inn, LLC (iii) 150,000 - MJ Distributing, Inc. (iv) 550,000 - Total $ 1,110,356 $ - (i) On June 7, 2019, Smile, LLC (“Smile”)(the “Borrower”), a Nevada limited liability company, issued a Convertible Promissory Note (the “Note”) in the amount of $250,000 to Roger Bloss, a director of the Company, and MJ Holdings, Inc. for funds advanced to Smile. Mr. Bloss contributed $100,000 and MJ Holdings, Inc. $150,000 for a total of $250,000. The Note had a term of six (6) months, matured on December 6, 2019 and accrues interest at 1% per month. The Holder shall have the right from time to time, and at any time during the period beginning on the date which is 180 days following the date of this Note and ending on the later of: (i) the Initial Maturity date, and (ii) the Extended Maturity Date, or (iii) the date of payment of the Default amount, to convert the note into equity ownership of the Borrower. The conversion shall be negotiated in good faith. If the parties cannot agree to the Conversion Price, then a third party shall determine the Value of the Borrower and the Conversion Price shall be the Principal Amount (“PA”) of the Note as the numerator and the Value of the Borrower (“V”) shall be the denominator. PA/V=X *100=% of ownership. On December 5, 2019, the Borrower was granted a 6-month extension by the Company that changed the maturity date to June 6, 2020. The Note is currently in default. As such, the Company has elected to reserve the entire Note amount at December 31, 2019 due to the uncertainty of its ability to collect on the Note. (ii) On June 25, 2019, the Company entered into a Series Post Seed Preferred Stock and Series Post Seed Preferred Unit Investment Agreement (the “Agreement”) with Innovation Labs, Ltd. and Innovation Shares, LLC. Under the terms of the Agreement, the Company purchased 238,096 Series Post Seed Preferred Stock Shares and 238,096 Series Post Seed Preferred Units for a purchase price of $250,000. As of December 31, 2019, the Company has elected to reserve the entire amount of the investment due to the uncertainty of its ability to liquidate the investment to recover its $250,000 purchase price or recover the investment amount through dividends payable by Innovation Labs, Ltd. (iii) In January of 2019, the Company formed Coachill-Inn, LLC (“Coachill-Inn”), a subsidiary of Alternative Hospitality (“AH”), to develop a proposed hotel in Desert Hot Springs, CA. From January through June 2019, the Company was actively engaged in negotiations with the property owner of the proposed location. In June of 2019, Coachill-Inn executed a purchase and sale agreement with Coachillin’ Holdings, LLC (“CHL”) to acquire a 256,132 sq. ft. parcel of land within a 100-acre industrial cannabis park in Desert Hot Springs, CA (the “Property”) to develop the Company’s first hotel project. The purchase price for the property is $5,125,000. CHL was to contribute $3,000,000 toward the purchase price of this property in exchange for a twenty-five percent (25%) ownership interest in Coachill-Inn. AH made an initial non-refundable deposit in the amount of $150,000 toward the purchase of the Property. As of the date of this filing, the Company terminated its participation in the development due to financing issues and has no recourse to recover its deposit. (iv) On April 2, 2019, the Company executed a Membership Interest Purchase Agreement (“MIPA”) with MJ Distributing, Inc. (the “Seller”) to acquire all of the outstanding membership interests of MJ Distributing C202, LLC and MJ Distributing P133, LLC, each the holder of a State of Nevada provisional medical and recreational cultivation license and a provisional medical and recreational production license. The licenses were required to be perfected Demand for Payment |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 8 — Notes Payable Notes payable as of December 31, 2019 and 2018 consist of the following: December 31, December 31, Note payable bearing interest at 6.50%, originated November 1, 2018, due on October 31, 2023, originally $1,100,000 $ 1,086,662 $ 1,099,006 Convertible note payable – related party bearing interest at 5.00%, originated October 17, 2018, due on October 16, 2019 - 250,000 Note payable bearing interest at 5.0%, originated January 17, 2019, due on January 31, 2022 750,000 - Note payable bearing interest at 9.0%, originated January 17, 2019, due on January 16, 2020 originally $150,000 100,000 - Note payable bearing interest at 6.5% originated April 1, 2019, due on March 31, 2022 originally $250,000 242,425 - Total notes payable $ 2,179,087 $ 1,349,006 Less: current portion (1,249,561 ) (312,905 ) Long-term notes payable $ 929,526 $ 1,036,101 On September 21, 2018, the Company, through its wholly-owned subsidiary Prescott Management, LLC, entered into a contract to purchase an approximately 10,000 square foot office building located at 1300 South Jones Boulevard, Las Vegas, Nevada 89146 for $1,500,000, subject to seller financing in the amount of $1,100,000, amortizing over 30 years at an interest rate of 6.5% per annum with monthly installments of $6,952.75 beginning on November 1, 2018, and continuing on the same day of each month thereafter until October 31, 2019. Upon the one-year anniversary of the note, a principal reduction payment of $50,000 is due, and provided that the monthly payments and the principal reduction payment have been made, the payments will be recalculated and re-amortized on the same terms with a new scheduled monthly payment of $6,559 beginning on November 1, 2019 and continuing until October 31, 2023, at which time the entire sum of principal in the amount of $986,438, plus any accrued interest, is due and payable. The Company closed the purchase on October 18, 2018. The building is home to the Company’s business operations. Principal payments made in 2019 were $8,152. As of December 31, 2019, $1,086,662 principal and $5,886 interest remain due. On October 17, 2018, the Company executed a convertible promissory note for $250,000 with Roger Bloss, a Company director. The note accrued interest of 5.0% per annum at maturity. On July 15, 2019, the note was converted into 500,000 shares of restricted common stock. The note is paid in full. On January 17, 2019, the Company executed a promissory note for $750,000 with FR Holdings LLC, a Wyoming limited liability company. The note accrues interest at 5.0% per annum, payable in regular monthly installments of $3,125, due on or before the same day of each month beginning February 1, 2019 until January 31, 2022 at which the entire principal and any then accrued interest thereon shall be due and payable. As of December 31, 2019, $750,000 principal and $1,458 interest remain due. On January 17, 2019, the Company executed a short-term promissory note for $150,000 with Let’s Roll Holdings, LLC, and entity controlled by the Company’s Chief Cultivation Officer and a director. The note accrues interest at 9.0% per annum and is due on January 16, 2020. Principal payments in the amount of $50,000 were made during the year ended December 31, 2019. As of December 31, 2019, $100,000 principal and $10,794 interest remain due. On February 1, 2019, the Company executed a short-term promissory note for $101,000 with Roll On, LLC, and entity controlled by the Company’s Chief Cultivation Officer and a director. The note bears no interest. The note was paid in full on April 1, 2019. On February 14, 2019, the Company executed a short-term promissory note for $100,000 with Stran & Company. The note bears no interest during the first 90 days. Thereafter, interest shall accrue on the unpaid principal balance at a fixed rate of 0.5% per month. The note was paid in full on April 1, 2019. On April 1, 2019, the Company executed a promissory note for $250,000 with John T. Jacobs and Teresa D. Jacobs. The note accrues interest at 6.5% per annum, payable in regular monthly installments of $2,178, due on or before the same day of each month beginning May 1, 2019 until March 31, 2020 at which time a principal reduction of $50,000 shall be due, the payments shall be re-amortized (15-year amortization). On or before March 31, 2021, a second principal reduction of $50,000 shall be due, the payments shall be re-amortized (15-year amortization). Payments shall continue to be paid until March 31, 2022, at which time the entire sum of principal and accrued interest shall be due and payable. As of December 31, 2019, $242,425 principal and $1,318 interest remain due. Amount Fiscal year ending December 31: 2020 208,148 2021 394,197 2022 857,966 2023 104,841 2024 104,841 Thereafter 457,535 Total minimum loan payments $ 2,127,528 As part of the merger transaction (Please see Note |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9 — Commitments and Contingencies Employment Agreements On October 15, 2018, the Company entered into an employment agreement (the “Tierney Employment Agreement”) with Terrence M. Tierney. Pursuant to the Tierney Employment Agreement, the Company appointed Mr. Tierney, to the position of Chief Administrative Officer, in addition to his previous role as Secretary. The initial term of employment is for a three-year period (or until September 30, 2021), unless extended or otherwise terminated in accordance with its terms. The effective date of The Tierney Employment Agreement automatically renews for successive periods of three (3) years unless either party gives written notice to the other party that it does not wish to automatically renew. Mr. Tierney’s annual salary is equal to or greater than any other senior executive of the Company with the exception of the Chief Executive Officer. The Tierney Employment Agreement defers salary of $10,000 per month of Mr. Tierney’s salary until such time as the Company has achieved gross annual sales of $20,000,000 or net annual profits (as defined in the Tierney Employment Agreement) of $5,000,000 or has raised a total of $50,000,000 in equity or debt financing. In addition, the Company agreed to issue 500,000 shares of common stock pursuant to a stock award agreement within thirty (30) days of adoption of an omnibus benefit plan. Such shares have not yet been issued. On January 22, 2020, the Board appointed Mr. Tierney to the additional position of interim President. There are no changes to Mr. Tierney’s current employment agreement other than his additional duties as President. Mr. Tierney will have day-to-day oversight of the Company’s operations and continue to advise the Board on strategic initiatives and business development. Please see Note 15 — Subsequent Events On February 18, 2019, the Company entered into an employment agreement (the “Balaouras Employment Agreement”) with Paris Balaouras. Mr. Balaouras was appointed Chief Executive Officer of the Company on December 15, 2017. The initial term of employment was for a five-year period (or until December 31, 2022), unless extended or otherwise terminated in accordance with its terms. The effective date of the Balaouras Employment Agreement was January 1, 2019, and continues until the earlier of: (i) the effective date of any subsequent employment agreement between Mr. Balaouras and us; (ii) the effective date of any termination of employment as provided for in the Balaouras Employment Agreement; or (iii) five (5) years from the effective date; provided, that the Balaouras Employment Agreement automatically renews for successive periods of three (3) years unless either party gives written notice to the other party that it does not wish to automatically renew, which written notice must be received by the other party no less than ninety (90) days and no more than one hundred eighty (180) days prior to the expiration of the applicable term. Mr. Balaouras elected to waive any 2018 salary, which was recorded as an expense and additional to paid-in capital in 2018, and defer 52% of his 2019 salary; which such deferment shall continue until such time as the Company has operated on a positive cash flow basis for a period of not less than three months. At that time all deferred compensation shall be payable in equal monthly installments for a period of 24 months. At the sole election of Mr. Balaouras, he may be paid any deferred compensation in cash or in the Company’s common stock. Please see Note 15 — Subsequent Events On May 31, 2019, the Company’s Treasurer and Chief Financial Officer, John R. Wheeler resigned and was immediately replaced by Laurence Ruhe. Mr. Wheeler is to receive a total of 250,000 shares of the Company’s $.001 par value common stock (the “Stock”) for all past services provided to the Company. The initial 125,000 shares of Stock were issued to Mr. Wheeler on or before June 15, 2019 and the remaining Stock shall be issued in twelve equal monthly installments of 10,417 shares per month commencing on July 1, 2019. On June 1, 2019, the Company entered in an employment agreement with Mr. Laurence Ruhe to serve as the Company’s Chief Financial Officer. Mr. Ruhe shall serve a two-year term, effective June 1, 2019, with annual base compensation of $100,000 plus 46,836 of Stock to vest in twelve equal monthly installments of 3,903 shares commencing on July 1, 2019. Mr. Ruhe’s compensation will be reviewed annually and may be adjusted as determined by the Company’s Compensation Committee or Board. Additionally, Mr. Ruhe shall be entitled to receive an annual discretionary bonus as determined by the Board. Please see Note 15 — Subsequent Events On July 15, 2019 the Company’s Board of Directors (the “Board”) appointed Richard S. Groberg to be the President of the Company. Mr. Groberg shall initially serve a three-year term effective July 15, 2019 pursuant to a written employment agreement (the “Employment Agreement”) with an annual base compensation of $180,000, of which $5,000 per month shall be deferred until January 15, 2020 or such earlier date pursuant to the terms of the Employment Agreement and then shall be payable in cash or shares of the Company’s common stock (the “Stock”). The Employment Agreement provides for a restricted stock award of 400,000 shares of the Company’s Stock to vest: 25% six months after the effective date of the Employment Agreement; 25% on the first anniversary after the effective date of the Employment Agreement, 25% on the second anniversary after the effective date of the Employment Agreement and 25% on the third anniversary after the effective date of the Employment Agreement. Please see Note 15 — Subsequent Events Operating Leases The Company leases a two production / warehouse facility under a non-cancelable operating lease that expires in June 2027 and September 2029, respectively. For the years ended December 31, 2019 and 2018, the Company made lease payments in the amount of $223,640 and $19,220, respectively. As of December 31, 2019, the Company recorded operating lease liabilities of $2,368,646 and right of use assets for operating leases of $2,194,278. During the year ended December 31, 2019, operating cash outflows relating to operating lease liabilities was $172,515, and the expense for right of use assets for operating leases was $150,007. As of December 31, 2019, the Company’s operating leases had a weighted-average remaining term of 4.5 years and weighted-average discount rate of 4.5%. Future minimal rental and lease commitments under non-cancelable operating leases with terms in excess of one year as of December 31, 2019, are as follows: Amount Fiscal year ending December 31: 2020 350,640 2021 350,640 2022 350,755 2023 350,986 2024 351,333 Thereafter 1,150,995 Total minimum lease payments $ 2,905,349 Rent expense, incurred pursuant to operating leases for the year ended December 31, 2019 and 2018, was $415,910 and $311,994, respectively Litigation From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. When the Company is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company will record a liability for the loss. In addition to the estimated loss, the liability includes probable and estimable legal cost associated with the claim or potential claim. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company business. There is no pending litigation involving the Company at this time. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Capital Stock | Note 10 — Capital Stock General The Company is currently authorized to issue up to 95,000,000 shares of Common Stock and 5,000,000 shares of preferred stock, par value $0.001 per share. Common Stock Of the 95,000,000 shares of Common Stock authorized by the Company’s Articles of Incorporation, 65,436,449 shares of Common Stock are issued and outstanding as of December 31, 2019. Each holder of Common Stock is entitled to one vote per share on all matters to be voted upon by the stockholders and are not entitled to cumulative voting for the election of directors. Holders of Common Stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the board of directors out of funds legally available therefor subject to the rights of preferred stockholders. The Company has not paid any dividends and does not intend to pay any cash dividends to the holders of Common Stock in the foreseeable future. The Company anticipates reinvesting its earnings, if any, for use in the development of its business. In the event of liquidation, dissolution, or winding up of the Company, the holders of Common Stock are entitled, unless otherwise provided by law or the Company’s Articles of Incorporation, including any certificate of designations for a series of preferred stock, to share ratably in all assets remaining after payment of liabilities and the preferences of preferred stockholders. Holders of the Company’s Common Stock do not have preemptive, conversion, or other subscription rights. There are no redemptions or sinking fund provisions applicable to the Company’s Common Stock. Common Stock Issuances For the fiscal years ended December 31, 2019 and December 31, 2018, the Company issued and/or sold the following unregistered securities: 2019 Between January 1, 2019 and December 2019, the Company issued 1,645,636 shares of Common Stock to approximately 15 persons in exchange for services rendered on behalf of the Company valued at $796,229. The issuances were made pursuant to the exemptions for registration afforded by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D, promulgated under the Securities Act. Between January 1, 2019 and December 31, 2019, the Company sold an aggregate of 12,330,000 shares of Common Stock for $6,175,000 to approximately 20 investors all of whom were accredited investors. The issuances were made pursuant to the exemptions for registration afforded by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D, promulgated under the Securities Act. On February 10, 2019, the Company’s largest shareholder, Red Dot Development, LLC (“Red Dot”), returned 20,000,000 shares of the Company’s common stock to the Company for cancellation in exchange for a payment of $20,000, which as of December 31, 2019 has been accrued as a payable by the Company. On April 1, 2019, the Company issued 66,667 shares of common stock valued at $50,000 to the Sellers of THC park as per the terms of the Sales Agreement. On July 15, 2019, the Company issued 500,000 shares of common stock for the principal conversion of a $250,000 note payable. 2018 Between January 1, 2018 and December 31, 2018, the Company sold an aggregate of 4,475,841 shares of Common Stock for $3,121,001 to approximately 43 investors all of whom except one were accredited investors. The issuances were made pursuant to the exemptions for registration afforded by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D, promulgated under the Securities Act. Between January 1, 2018 and December 2018, the Company issued 44,781 shares of Common Stock to three persons, all of whom were accredited investors, in exchange for providing services to us valued at approximately $59,990. The issuances were made pursuant to the exemptions for registration afforded by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D, promulgated under the Securities Act. On September 4, 2018, the Company issued 85,714 shares of common stock to Healthier Choices Management Corp as per the terms of the Stock Exchange Agreement. On September 28, 2018, the Company issued 29,070 shares of common stock to the Sellers of the 260 acres of land purchased by the Company as per the terms of the Purchase Agreement. Between October 26, 2018 through December 3, 2018, the Company issued a total of 3,333,333 shares of common stock to an accredited investor upon the conversion of the Company’s Series A Convertible Preferred Stock. On October 15, 2018, the Company issued 250,000 shares of common stock to an accredited investor as per the terms of the Joint Venture Agreement. At December 31, 2019 and December 31, 2018, there are 65,436,449 and 70,894,146 shares of Common Stock issued and outstanding, respectively. Preferred Stock The Board is authorized, without further approval from the Company’s stockholders, to create one or more series of preferred stock, and to designate the rights, privileges, preferences, restrictions, and limitations of any given series of preferred stock. Accordingly, the Board may, without stockholder approval, issue shares of preferred stock with dividend, liquidation, conversion, voting, or other rights that could adversely affect the voting power or other rights of the holders of Common Stock. The issuance of preferred stock could have the effect of restricting dividends payable to holders of the Company’s Common Stock, diluting the voting power of its Common Stock, impairing the liquidation rights of its Common Stock, or delaying or preventing a change in control of the Company, all without further action by its stockholders. Of the 5,000,000 shares of preferred stock, par value $0.001 per share, authorized in the Company’s Articles of Incorporation, 2,500 shares are designated as Series A Convertible Preferred Stock. Series A Convertible Preferred Stock Each share of Series A Preferred Stock is convertible, at the option of the holder, into that number of shares of Common Stock determined by dividing the stated value of each share of Series A Preferred Stock (currently, $1,000) by the conversion price (currently, $0.75). The stated value and the conversion price are subject to adjustment as provided for in the Certificate of Designation. The Company is prohibited from effecting a conversion of the Series A Preferred Stock to the extent that, after giving effect to the conversion, the holder (together with such holder’s affiliates and any persons acting as a group with holder or any of such holder’s affiliates) would beneficially own in excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion. A holder, upon notice to us, may increase or decrease this beneficial ownership limitation; provided, that, in no event can the holder increase the beneficial ownership limitation in excess of 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon the conversion of the Series A Preferred Stock then held by holder. Such increase of the beneficial ownership limitation cannot be effective until the 61 st Preferred Stock Issuances 2019 None 2018 In connection with a Securities Purchase Agreement dated as of August 9, 2018, by and between the Selling Stockholder and the Company, the Company issued 2,500 shares of Series A Preferred Stock at a price of $1,000 per share or an aggregate subscription of $2,500,000. At December 31, 2019 and December 31, 2018, there are 0 and 0 shares of Series A Preferred Stock issued and outstanding, respectively. |
Basic and Diluted Earnings (Los
Basic and Diluted Earnings (Loss) per Common Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings (Loss) per Common Share | Note 11 — Basic and Diluted Earnings (Loss) per Common Share Basic earnings (loss) per share is computed by dividing the net income or net loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated using the treasury stock method and reflects the potential dilution that could occur if warrants were exercised and were not anti-dilutive. For the year ended December 31, 2019, basic and diluted loss per common share were the same since there were no potentially dilutive shares outstanding during the respective periods. The outstanding warrants and options as of December 31, 2019, to purchase 1,243,000 shares of common stock were not included in the calculations of diluted loss per share because the impact would have been anti-dilutive. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation | Note 12 — Stock Based Compensation Warrants and Options Prior to the Reverse Merger, the Company had issued warrants to acquire 166,665 shares of common stock as compensation for consulting services. The warrants expired between July 2019 and October 2019. On June 22, 2018, the Company entered into a Corporate Advisory Agreement (“Advisory Agreement”) with a New York City based consulting company (the “Consultant”) to provide business management, corporate compliance and related services to the Company and its subsidiaries. Pursuant to the Advisory Agreement, the Company granted the Consultant an option to acquire up to 10,000 additional shares of the Company’s common stock at an exercise price of $1.20. The options have a term of 3 years. In June of 2019, in conjunction with the Company’s offering under Rule 506 of Regulation D of the Securities Act (the “Offering”), the Company granted warrants to each participant in the Offering upon the following terms and conditions: (a) each participant has the right to acquire additional shares of the Company’s Common Stock equal to ten (10%) of the shares purchased in the offering (the “Warrants”); (b) one-half of the Warrants granted to each participant have an exercise price of $0.65 and the other one-half have an exercise price of $1.00, and (c) the Warrants shall be exercisable between June 5, 2019, the date of grant, and June 4, 2021 the date of expiration of the Warrants. A summary of the warrants and options issued, exercised and expired are below: Warrants and Options: Shares Weighted Avg. Balance at December 31, 2018 176,665 $ 5.61 Issued 1,233,000 $ 0.83 Exercised - - Expired 166,665 5.87 Balance at December 31, 2019 1,243,000 $ 0.83 Warrants outstanding for the year ending December 31, 2019 and 2018 were 1,233,000 and 166,665, respectively. Options outstanding for the year ending December 31, 2019 and 2018 were 10,000 and 10,000, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 13 — Income Taxes The Company did not incur any federal or state income tax expense or benefit for the years ended December 31, 2019 and 2018. The provision for income taxes differs from the amounts which would result from applying the federal statutory rate of 21% to the Company’s loss before income taxes as follows: December 31, December 31, Computed “expected” income tax benefit $ (1,737,089 ) (1,051,665 ) State income tax benefit, net of federal benefit - - Change in valuation allowance 1,737,089 1,028,817 Other - 22,848 Change in federal income tax rate - - IRC section 382 limitations on future NOL utilization - - Write-off of property & equipment deferred tax asset - - Provision for income taxes $ - - Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets for federal and state income taxes for the years ended December 31, 2019 and 2018 are as follows: 2019 2018 Deferred tax assets: Federal and state NOL carryforward $ 2,656,993 919,904 Property and equipment - 25,819 Reserves and accruals - 3,619 Other intangibles 63,000 47,302 Deferred expenses 100,116 213,371 Deferred rent - 42,846 Capitalized start-up expense - - Deferred tax assets 2,820,109 1,252,861 Less: Valuation allowance (2,820,109 ) (1,252,861 ) Net deferred tax assets $ - - A valuation allowance is required to be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. A full review of all positive and negative evidence needs to be considered. The Company has established a valuation allowance against all its deferred tax assets. On December 22, 2017, H.R. 1 (the “Act”) was enacted and included broad tax reforms. The Act reduced the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. As of December 31, 2019, the Company had a net operating loss carryforward for federal income tax purposes of approximately $13,295,544 million and credit carryforwards are subject to annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitations may result in the expiration of net operating losses and credits before utilization. The Company has not performed a Section 382 study as of December 31, 2019. The Company files income tax returns in the U.S. The Company is not currently under examination in any of these jurisdictions and all its tax years remain open to examination due to net operating loss carryforwards. The Company uses the “more likely than not” criterion for recognizing the income tax benefit of uncertain income tax positions and establishing measurement criteria for income tax benefits. Although it is reasonably possible that certain unrecognized tax benefits may increase or decrease within the next twelve months due to tax examination changes, settlement activities, expirations of statute of limitations, or the impact on recognition and measurement considerations related to the results of published tax cases or other similar activities, the Company does not anticipated any significant changes to unrecognized tax benefits over the next 12 months. During the year ended December 31, 2018, no interest or penalties were required to be recognized relating to unrecognized tax benefits. In the event the Company should need to recognize interest and penalties related to unrecognized income tax liabilities, this amount will be recorded as an accrued liability and an increase to income tax expense. As the Company operates in the legal cannabis industry, the Company is subject to Section 280E of the Internal Revenue Code (“IRC”) which prohibits businesses engaged in the trafficking of controlled substances (within the meaning of Schedule I and II of the CSA) from deducting normal business expenses associated with the sale of cannabis, such as payroll and rent, from gross income (revenue less cost of goods sold). Section 280E, therefore, has a significant impact on the retail side of cannabis, but a lesser impact on cultivation and manufacturing operations. Section 280E was originally intended to penalize criminal market operators, but because cannabis remains a Schedule I controlled substance for U.S. Federal purposes, the Internal Revenue Service (“IRS”) has subsequently applied Section 280E to state-legal cannabis businesses. The effective tax rate on a cannabis business depends on how large its ratio of non-deductible expenses is to its total revenues. In the states that the Company operates in that align their tax codes with Section 280E, it is also unable to deduct normal business expenses for state tax purposes. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable and a higher effective tax rate than most industries. Cannabis businesses operating in states that align their tax codes with the IRC are also unable to deduct normal business expenses for state tax purposes. The non-deductible expenses shown in the effective rate reconciliation above is comprised primarily of the impact of applying Section 280E to the Company’s businesses that are involved in selling cannabis, along with other typical non-deductible expenses such as lobbying expenses. The IRS has invoked Section 280E in tax audits against various cannabis businesses in the U.S. that are permitted under applicable state laws. Although the IRS issued a clarification allowing the deduction of certain expenses, the scope of such items is interpreted very narrowly, and the bulk of operating costs and general administrative costs are not permitted to be deducted. While there are currently several pending cases before various administrative and federal courts challenging these restrictions, there is no guarantee that these courts will issue an interpretation of Section 280E favorable to cannabis businesses. Further, there are several pieces of legislation being considered by the U.S. Congress that could change the interpretation of Section 280E by removing its applicability to the legalized cannabis industry. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 14 — Related Party Transactions On October 17, 2018, the Company executed a convertible promissory note for $250,000 with Roger Bloss, a director of the Company. The note accrued interest of 5.0% per annum at maturity. On July 15, 2019, the note was converted into 500,000 shares of restricted common stock. The note is paid in full. On February 1, 2019, the Company executed a short-term promissory note for $101,000 with Roll On, LLC, and entity controlled by the Company’s Chief Cultivation Officer and a director. The note bears no interest. The note was paid in full on April 1, 2019. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 15 — Subsequent Events On January 22, 2020, the Company’s President, Richard S. Groberg, tendered his resignation to the Company’s Board of Directors (the “Board”). The Board accepted Mr. Groberg’s resignation effective immediately. The Company and Mr. Groberg executed a mutual Separation Agreement. Additionally, on January 22, 2020 the Board appointed the Company’s Secretary and Chief Administrative Officer, Terrence M. Tierney, JD, age 58, to the additional position of interim President. Mr. Tierney was a consultant to the Company from July 1, 2018 until September 18, 2018 when he was appointed Secretary of the Company. On October 15, 2018, Mr. Tierney became the Chief Administrative Officer of the Company and signed a three-year employment agreement with the Company (which agreement has been previously filed with the SEC) that expires on September 30, 2021. There are no changes to Mr. Tierney’s current employment agreement other than his additional duties as President. Mr. Tierney will have day-to-day oversight of the Company’s operations and continue to advise the Board on strategic initiatives and business development. On February 11, 2020, the Company issued Terrence M. Tierney, the Company’s former President, 250,000 shares of common stock for services rendered. On February 19, 2020, the Company received a Demand for Payment (the “Demand”) from MJ Distributing (the “Seller”) as it related to the Membership Interest Purchase Agreement of MJ Distributing C 2020, LLC and MJ Distributing P133, LLC, the Amendment to the Membership Interest Purchase Agreement (the “First Amendment) and Amendment No. 2 to the Membership Interest Purchase Agreement (the “Second Amendment”). Under the terms of the Demand, the Company was to make payment in the amount of $261,533 and enter into a Third Amendment to the Membership Interest Purchase Agreement (the “Third Amendment”) on or before March 11, 2020. As of the date of this filing, the Company has failed to make the required payment under the Demand nor has it entered into a Third Amendment. On February 20, 2020, the Company’s subsidiary, Alternative Hospitality, Inc. (the “Borrower”), issued a Short Term Promissory Note (the “Note”) to Pyrros One, LLC (the “Holder”), an entity controlled by a relative of a director of the Company, in the amount of $110,405 that matures on February 19, 2021. The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $825 due on or before the twentieth day of each month commencing on April 20, 2020. The Borrower was required to make an interest and principal reduction payment in the amount of $1,233 on or before March 20, 2020. The Holder is granted a security interest in that certain real property located at 1300 S. Jones Blvd, Las Vegas, NV 89146, which is owned by the Borrower. On March 2, 2020, Mr. Ruhe tendered his resignation to the Company’s Board of Directors (the “Board”). The Board accepted Mr.Ruhe’s resignation effective immediately. Mr. Ruhe also stepped down as an advisor to the Company’s Audit Committee. Additionally, pursuant to the terms of Mr. Ruhe’s employment contract with the Company Mr. Ruhe shall forfeit 11,709 shares of invested common stock previously issued to Mr. Ruhe. The Board has commenced a search to find a suitable individual to replace Mr. Ruhe. On March 31, 2020, the Company’s subsidiary, Condo Highrise Management, LLC (the “Borrower”), issued a Short Term Promissory Note (the “Note”) to Pyrros One, LLC (the “Holder”), an entity controlled by a relative of a director of the Company, in the amount of $90,000 that matures on March 30, 2021. The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $675 due on or before the first day of each month commencing on May 1, 2020. The Holder is granted a security interest in that certain real property located at 4295 Hwy 343, Amargosa, NV 89020 which is owned by the Borrower. On March 31, 2020, the Company issued 31,251 shares of common stock to John R. Wheeler, its former Chief Financial Officer, as payment for services rendered. On March 31, 2020, the Company issued 18,562 shares of common stock to Roger Bloss, a director and current Chief Executive Officer of the Company, for services rendered. On April 7, 2020, the Company issued 20,000 shares of common stock to an accredited investor for purchasing shares through the Company’s Regulation D offering. On June 11, 2020, the Company, through its wholly owned subsidiary, Red Earth, LLC, and Element NV, LLC (“ENV”) entered into the First Amendment (the “Amendment”) to the Membership Interest Purchase Agreement dated August 28, 2019. Under the terms of the Amendment, ENV shall be required to make an additional cash contribution in the amount of $240,000 that shall be deemed the Final Contribution Payment. On July 22, 2020, the Company entered into a Securities Purchase Agreement (the “Agreement”) with Doug Brown (the “Investor”). Under the terms of the Agreement, the Investor agreed to purchase 4,500,000 shares of the Company’s common stock at $0.088808889 per share for a total purchase price of $400,000. The Investor was also to be issued a warrant granting the Investor the right to acquire 1,000,000 shares of the Company’s common stock at an exercise price of $0.10. The warrant was to be dated August 3, 2020 and have a term of three years. The Investor funded $250,000 of the purchase amount on July 31, 2020. On August 10, the Company returned $125,465 of the funds to the Investor for a net investment of $124,535. The Company is to issue the Investor 1,402,279 shares of common stock and a warrant granting the Investor the right to purchase 250,000 shares of common stock under the revised terms of the Agreement. On August 7, 2020, the Company’s Board of Directors terminated, with cause, the employment of Terrence M. Tierney, JD, effective immediately. At the time of termination, Mr. Tierney served as the Company’s Secretary, Chief Administrative Officer and interim President. Under the terms of Mr. Tierney’s Employment Agreement, the Company shall be under no further obligation to the Executive, except to pay all accrued but unpaid base salary and accrued vacation to the date of termination thereof. On August 25, 2020, the Company entered into a Consulting Agreement (the “Agreement”) with Sylios Corp (the “Consultant”). Under the terms of the Agreement, the Consultant shall prepare the Company’s filings with the Securities and Exchange Commission (the “SEC”) including its Annual report on Form 10-K and Quarterly Reports on Form 10-Q. The Consultant shall receive $20,000 in cash compensation plus 100,000 shares of the Company’s common stock. The Agreement has a term of six (6) months or until the Company’s Quarterly report for the period ended September 30, 2020 is filed with the SEC. On September 1, 2020, the Board appointed David C. Dear as a director of the Company. On September 1, 2020, the Company entered into an Employment Agreement (the “Agreement”) with Paris Balaouras (the “Employee”). Under the terms of the Agreement, the Employee shall serve as the Company’s Chief Cultivation Officer for a term of three (3) years (the “Term”) commencing on September 15, 2020. The Employee shall receive a base salary of $105,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the board of directors of the Company in its sole discretion, in amount equal to up to 100% of Employee’s base salary for the then current fiscal year, shall be eligible to receive an annual discretionary stock grant during the Term which shall be vested in equal increments of 1/3 rd On September 1, 2020, the Company entered into an Employment Agreement (the “Agreement”) with Roger Bloss. Under the terms of the Agreement, the Employee shall serve as the Company’s Interim Chief Executive Officer for a term of six (6) months and the Chief Executive Officer and for an additional two (2) years and six (6) months as the Chief Executive Officer for a total of three (3) years (the “Term”) commencing on September 15, 2020. The Employee shall receive a base salary of $105,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the board of directors of the Company in its sole discretion, in amount equal to up to 100% of Employee’s base salary for the then current fiscal year, shall be eligible to receive an annual discretionary stock grant during the Term which shall be vested in equal increments of 1/3 rd On September 1, 2020, the Company entered into an Employment Agreement (the “Agreement”) with Bernard Moyle. Under the terms of the Agreement, the Employee shall serve as the Company’s Secretary/Treasurer for a term of three (3) years (the “Term”) commencing on September 15, 2020. The Employee shall receive a base salary of $60,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the board of directors of the Company in its sole discretion, in amount equal to up to 200% of Employee’s base salary for the then current fiscal year, shall, at commencement of the Term receive a grant of stock of 500,000 shares and shall be eligible to receive an annual discretionary stock grant during the Term which shall be vested in equal increments of 1/3 rd On September 15, 2020, the Company entered into a Board of Directors Services Agreement (the “Agreement”) with Messrs. Bloss, Dear and Balaouras (collectively, the “Directors”). Under the terms of the Agreement, each of the Directors shall provide services to the Company as a member of the Board of Directors for a period of not less than one year. Each of the Directors shall receive compensation as follows: (i) Fifteen Thousand and no/100 dollars ($15,000.00), paid in four (4) equal installments on the last calendar day of each quarter, and (ii) Fifteen Thousand (15,000) shares of the Company’s common stock on the last calendar day of each quarter. The Agreement for each of the Directors is effective as of October 1, 2020. On October 1, 2020, the Company entered into an Employment Agreement (the “Agreement”) with Jim Kelly. The Agreement became effective as of October 1, 2020. Under the terms of the Agreement, the Employee shall serve as the Company’s Interim Chief Financial Officer for a term of (i) the sooner of six (6) months, or (ii) the completion of all regulatory filings, including but not limited to the Company’s 2019 Annual Report on Form 10-K, the March 31, 2020 Quarterly Report on Form 10-Q, the June 30, 2020 Quarterly Report on Form 10-Q, the September 30, 2020 Quarterly Report on Form 10-Q and all required Current Reports on Form 8-K, with the Securities and Exchange Commission (“SEC”) to bring the Company current with the SEC. The Employee shall receive a base salary of $24,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the C-Suite of the Company in its sole discretion, in an amount equal to up to 400% of the Employee’s base salary for the then current fiscal year, and at commencement of the Term the Employee shall receive a grant of stock of 500,000 restricted shares of the Company’s common stock. On October 13, 2020, the Company’s former President and Secretary filed a lien in Clark County, Nevada in the net amount of $501,085 against the Company’s property located at 1300 S. Jones Blvd, Unit 110, Las Vegas, NV 89146 for unpaid compensation, expense reimbursement, accrued leave, severance pay and penalties. Additionally, on November 6, 2020, the Company’s former President and Secretary filed two liens in Nye County, NV in the net amount of $501,085 against the Company’s property located at 4295 Highway 73, Armagosa, NV 89020, also known as the Company’s THC park, and one lien in Nye County, NV in the net amount of $501,085 against the property owned by Acres Cultivation, LLC and the site of the Company’s three (3) acre grow. On December 8, 2020, the Company entered into Amendment No. 1 (the “Amendment”) to the Revenue Participation Rights Agreement previously entered into with Blue Sky Companies, LLC and Let’s Roll NV, LLC. Under the terms of the Amendment, the new effective Date of the Agreement shall be revised to the date that the first payment shall be due in 2021 from the 2020 3-acre grow. In addition, (i) the Company’s 2020 obligation under the original Agreement for the 2019 grow is deemed satisfied in full, (ii) on or before April 30, 2027, the Company shall pay a $26,000 exit fee. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Red Earth, LLC, HDGLV, LLC, Icon Management, LLC, Alternative Hospitality, LLC, Condo Highrise Management, LLC and Prescott Management, LLC. Inter-company balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates and assumptions are required in the determination of the fair value of financial instruments and the valuation of stock-based compensation. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2019 and 2018. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) for identical instruments that are highly liquid, observable and actively traded in over-the-counter markets. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable and can be corroborated by market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Level 1: Level 2 Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. The FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants. As of December 31, 2019 and 2018, the Company’s investment in marketable securities – available for sale was determined to be a level 1 investment. |
Cash | Cash Cash includes cash on hand and deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal and use and with an original maturity of three months or less. The Company maintains its cash in bank deposit accounts. The Company, at various times throughout the year, had cash in financial institutions in excess of Federally insured limits. However, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on its credit balances. |
Debt Issuance Costs | Debt Issuance Costs Costs associated with obtaining, closing, and modifying loans and/or debt instruments are netted against the carrying amount of the debt instrument, and charged to interest expense over the term of the loan. |
Inventory | Inventory Inventories consist of finished goods as of December 31, 2019. Inventories are valued at the lower of cost or net realizable value. The Company determines cost on the basis of the first in first out method. The Company periodically reviews inventories for obsolescence and any inventories identified as obsolete are reserved or written off. The Company has performed a valuation was has established a reserve against its finished goods inventory. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and any impairment losses. Depreciation is computed using the straight-line method over the useful lives of the assets. Major renewals and betterments are capitalized and depreciated; maintenance and repairs that do not extend the life of the respective assets are expensed as incurred. Upon disposal of assets, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in the consolidated statements of operations. Construction in progress primarily represents the construction or the renovation costs stated at cost less any accumulated impairment loss, which is not depreciated. Costs incurred are capitalized and transferred to property and equipment upon completion, at which time depreciation commences. Property and equipment are depreciated over their estimated useful lives as follows: Buildings 12 years Land Not depreciated Leasehold Improvements Lessor of lease term or 5 years Machinery and Equipment 5 years Furniture and Fixtures 5 years |
Long -lived Assets | Long–lived Assets Long-lived assets, including real estate property and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate. If the assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair value. The Company did not record any impairments of long-lived assets during the year ended December 31, 2019 and 2018. |
Intangible assets subject to amortization | Intangible assets subject to amortization Intangible assets include intellectual property either owned by the Company or for which the Company has a license. Intangible assets include licenses to cultivate, process and sell cannabis, trade names and non-compete agreements obtained through business acquisitions. Intangible assets acquired in a business combination are recognized at fair value using generally accepted valuation methods deemed appropriate for the type of intangible asset acquired. Generally, the Company utilizes the discounted cash flow method for valuing licenses, the relief from royalty method for valuing trade names and the with or without cash flow method for valuing non-compete agreements. Intangible assets with finite lives are amortized over their estimated useful lives and reported net of accumulated amortization, separately from goodwill. Amortization is calculated on the straight-line method based on the following estimated useful lives: Licenses 12-20 years Trade names 5-15 years Non-compete agreements 1-2 years The estimated useful lives, residual values, and amortization methods are reviewed at each year-end, and any changes in estimates are accounted for prospectively. During the years ended December 31, 2019 and 2018, the Company did not recognize any impairment losses. IAS 36 |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, “Impairment or Disposal of Long-Lived Assets.” ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flow analysis or appraisals. The Company recorded an impairment of its long-lived assets in the amount of $1,110,356 and $- for the years ended December 31, 2019 and 2018, respectively. Please see Note 7 —Asset Impairment |
Non-Controlling Interest | Non-Controlling Interest Non-controlling interest is shown as a component of shareholders 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. |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 606 – Revenue from Contracts with Customers Generally, the Company considers all revenues as arising from contracts with customers. Revenue is recognized based on the five-step process outlined in the Accounting Standards Codification (“ASC”) 606: Step 1 – Identify the Contract with the Customer – A contract exists when (a) the parties to the contract have approved the contract and are committed to perform their respective obligations, (b) the entity can identify each party’s rights regarding the goods or services to be transferred, (c) the entity can identify the payment terms for the goods or services to be transferred, (d) the contract has commercial substance and it is probably that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Step 2 – Identify Performance Obligations in the Contract – Upon execution of a contract, the Company identifies as performance obligations each promise to transfer to the customer either (a) goods or services that are distinct, or (b) a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. To the extent a contract includes multiple promised goods or services, the Company must apply judgement to determine whether the goods or services are capable of being distinct within the context of the contract. If these criteria are not met, the goods or services are accounted for as a combined performance obligation. Step 3 – Determine the Transaction Price – When (or as) a performance obligation is satisfied, the Company shall recognize as revenue the amount of the transaction price that is allocated to the performance obligation. The contract terms are used to determine the transaction price. Generally, all contracts include fixed consideration. If a contract did include variable consideration, the Company would determine the amount of variable consideration that should be included in the transaction price based on expected value method. Variable consideration would be included in the transaction price, if in the Company’s judgement, it is probable that a significant future reversal of cumulative revenue under the contract would not occur. Step 4 – Allocate the Transaction Price – After the transaction price has been determined, the next step is to allocate the transaction price to each performance obligation in the contract. If the contract only has one performance obligation, the entire transaction price will be applied to that obligation. If the contract has multiple performance obligations, the transaction price is allocated to the performance obligations based on the relative standalone selling price (SSP) at contract inception. Step 5 – Satisfaction of the Performance Obligations (and Recognize Revenue) – Revenue is recognized when (or as) goods or services are transferred to a customer. The Company satisfies each of its performance obligations by transferring control of the promised good or service underlying that performance obligation to the customer. Control is the ability to direct the use of and obtain substantially all of the remaining benefits from an asset. It includes the ability to prevent other entities from directing the use of and obtaining the benefits from an asset. Indicators that control has passed to the customer include: a present obligation to pay; physical possession of the asset; legal title; risks and rewards of ownership; and acceptance of the asset(s). Performance obligations can be satisfied at a point in time or over time. The majority of the Company’s revenue was derived under the agreements, Consulting Agreement and Equipment Lease Agreement, entered into with Acres Cultivation, LLC. Revenue derived from consulting services fees are recognized over the term of the arrangement as services are provided. Revenue is presented net of discounts, fees and other related taxes. Revenue derived from equipment leases The Company recognized an insignificant amount of revenue during the year ended December 31, 2018. For the year ended December 31, 2019, the Company furthered its operations allowing it to generate approximately $900,000 in revenue. |
Stock-Based Compensation | Stock-Based Compensation The Company’s share-based payment awards principally consist of grants of common stock. In accordance with the applicable accounting guidance, stock-based payment awards are classified as either equity or liabilities. For equity-classified awards, the Company measures compensation cost based on the grant date fair value and recognizes compensation expense in the consolidated statements of operations over the requisite service or performance period the award is expected to vest. The fair value of liability-classified awards is at each reporting date through the settlement date. Change in fair value during the requisite service period will be remeasured as compensation cost over that period. The Company utilizes its historical stock price to determine the volatility of any stock-based compensation. The expected dividend yield is 0% as the Company has not paid any dividends on its common stock and does not anticipate it will pay any dividends in the foreseeable future. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant date with a term equal to the expected term of the stock-based award. For stock-based financial instruments issued to parties other than employees, the Company uses the contractual term of the financial instruments as the expected term of the stock-based financial instruments. The assumptions used in calculating the fair value of stock-based financial instruments represent its best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and it uses different assumptions, its stock-based compensation expense could be materially different in the future. |
Convertible Instruments | Convertible Instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815, Derivatives and Hedging Activities. Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. The Company evaluates convertible preferred stock in accordance with ASC 470-20-35-7. The issued Series A Preferred Stock was converted into shares of the Company’s Common Stock at a conversion price of $0.75 per share and the fair value of the common stock based on closing price of the Company’s common stock on the day of issuance of the Preferred Stock was $1.50 per share of common stock. Therefore, the intrinsic value is calculated at $0.75 per share. The Company determined that there is a beneficial conversion feature (“BCF”) of $2,500,000. Since the holder can convert the preferred stock into shares of common stock at any time, amortization of this type of discount on convertible preferred stock occurs upon issuance. The Company treated the amortization of the BCF as a dividend that reduces net income in arriving at income available to common stockholders. |
Operating Leases | Operating Leases Prior to January 1, 2019, the Company accounted for leases under Accounting Standards Codification (ASC) 840, Accounting for Leases. Effective from January 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance on deferred tax assets is established when management considers it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax benefits from an uncertain tax position are only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Interest and penalties related to unrecognized tax benefits are recorded as incurred as a component of income tax expense. The Company has not recognized any tax benefits from uncertain tax positions for any of the reporting periods presented. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Leases: Leases (Topic 842) Stock Based Compensation: Compensation – Stock Compensation (Topic 718) Improvements to Nonemployee Share Based Payment Accounting. The amendments in this Update expand the scope of stock compensation to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance in this Update does not apply to transactions involving equity instruments granted to a lender or investor that provides financing to the issuer. The guidance is effective for fiscal years beginning after December 31, 2018 including interim periods within the fiscal year. The Company adopted with an effective date of January 1, 2019. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Property and Equipment Estimated Useful Lives | Property and equipment are depreciated over their estimated useful lives as follows: Buildings 12 years Land Not depreciated Leasehold Improvements Lessor of lease term or 5 years Machinery and Equipment 5 years Furniture and Fixtures 5 years |
Schedule of Estimeted Useful Lives of Intangible Assets | Amortization is calculated on the straight-line method based on the following estimated useful lives: Licenses 12-20 years Trade names 5-15 years Non-compete agreements 1-2 years |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and Equipment at December 31, 2019 and 2018 consisted of the following: December 31, December 31, Leasehold Improvements 323,281 17,535 Machinery and Equipment 1,052,203 919,782 Building and Land 3,150,000 1,500,000 Furniture and Fixtures 543,366 314,890 Total property and equipment 5,068,850 2,752,207 Less: Accumulated depreciation (494,768 ) (123,256 ) Property and equipment, net 4,574,082 2,628,951 |
Asset Impairment (Tables)
Asset Impairment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Asset Impairment | |
Schedule of Asset Impairment | Asset impairment as of December 31, 2019 and 2018 consist of the following: December 31, December 31, Smile, LLC (i) 160,356 - Innovation Labs, Ltd. (ii) 250,000 - Coachill-Inn, LLC (iii) 150,000 - MJ Distributing, Inc. (iv) 550,000 - Total $ 1,110,356 $ - (i) On June 7, 2019, Smile, LLC (“Smile”)(the “Borrower”), a Nevada limited liability company, issued a Convertible Promissory Note (the “Note”) in the amount of $250,000 to Roger Bloss, a director of the Company, and MJ Holdings, Inc. for funds advanced to Smile. Mr. Bloss contributed $100,000 and MJ Holdings, Inc. $150,000 for a total of $250,000. The Note had a term of six (6) months, matured on December 6, 2019 and accrues interest at 1% per month. The Holder shall have the right from time to time, and at any time during the period beginning on the date which is 180 days following the date of this Note and ending on the later of: (i) the Initial Maturity date, and (ii) the Extended Maturity Date, or (iii) the date of payment of the Default amount, to convert the note into equity ownership of the Borrower. The conversion shall be negotiated in good faith. If the parties cannot agree to the Conversion Price, then a third party shall determine the Value of the Borrower and the Conversion Price shall be the Principal Amount (“PA”) of the Note as the numerator and the Value of the Borrower (“V”) shall be the denominator. PA/V=X *100=% of ownership. On December 5, 2019, the Borrower was granted a 6-month extension by the Company that changed the maturity date to June 6, 2020. The Note is currently in default. As such, the Company has elected to reserve the entire Note amount at December 31, 2019 due to the uncertainty of its ability to collect on the Note. (ii) On June 25, 2019, the Company entered into a Series Post Seed Preferred Stock and Series Post Seed Preferred Unit Investment Agreement (the “Agreement”) with Innovation Labs, Ltd. and Innovation Shares, LLC. Under the terms of the Agreement, the Company purchased 238,096 Series Post Seed Preferred Stock Shares and 238,096 Series Post Seed Preferred Units for a purchase price of $250,000. As of December 31, 2019, the Company has elected to reserve the entire amount of the investment due to the uncertainty of its ability to liquidate the investment to recover its $250,000 purchase price or recover the investment amount through dividends payable by Innovation Labs, Ltd. (iii) In January of 2019, the Company formed Coachill-Inn, LLC (“Coachill-Inn”), a subsidiary of Alternative Hospitality (“AH”), to develop a proposed hotel in Desert Hot Springs, CA. From January through June 2019, the Company was actively engaged in negotiations with the property owner of the proposed location. In June of 2019, Coachill-Inn executed a purchase and sale agreement with Coachillin’ Holdings, LLC (“CHL”) to acquire a 256,132 sq. ft. parcel of land within a 100-acre industrial cannabis park in Desert Hot Springs, CA (the “Property”) to develop the Company’s first hotel project. The purchase price for the property is $5,125,000. CHL was to contribute $3,000,000 toward the purchase price of this property in exchange for a twenty-five percent (25%) ownership interest in Coachill-Inn. AH made an initial non-refundable deposit in the amount of $150,000 toward the purchase of the Property. As of the date of this filing, the Company terminated its participation in the development due to financing issues and has no recourse to recover its deposit. (iv) On April 2, 2019, the Company executed a Membership Interest Purchase Agreement (“MIPA”) with MJ Distributing, Inc. (the “Seller”) to acquire all of the outstanding membership interests of MJ Distributing C202, LLC and MJ Distributing P133, LLC, each the holder of a State of Nevada provisional medical and recreational cultivation license and a provisional medical and recreational production license. The licenses were required to be perfected Demand for Payment |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable as of December 31, 2019 and 2018 consist of the following: December 31, December 31, Note payable bearing interest at 6.50%, originated November 1, 2018, due on October 31, 2023, originally $1,100,000 $ 1,086,662 $ 1,099,006 Convertible note payable – related party bearing interest at 5.00%, originated October 17, 2018, due on October 16, 2019 - 250,000 Note payable bearing interest at 5.0%, originated January 17, 2019, due on January 31, 2022 750,000 - Note payable bearing interest at 9.0%, originated January 17, 2019, due on January 16, 2020 originally $150,000 100,000 - Note payable bearing interest at 6.5% originated April 1, 2019, due on March 31, 2022 originally $250,000 242,425 - Total notes payable $ 2,179,087 $ 1,349,006 Less: current portion (1,249,561 ) (312,905 ) Long-term notes payable $ 929,526 $ 1,036,101 |
Schedule of Minimum Loan Payments | Amount Fiscal year ending December 31: 2020 208,148 2021 394,197 2022 857,966 2023 104,841 2024 104,841 Thereafter 457,535 Total minimum loan payments $ 2,127,528 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental and Lease Commitments | Future minimal rental and lease commitments under non-cancelable operating leases with terms in excess of one year as of December 31, 2019, are as follows: Amount Fiscal year ending December 31: 2020 350,640 2021 350,640 2022 350,755 2023 350,986 2024 351,333 Thereafter 1,150,995 Total minimum lease payments $ 2,905,349 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Warrants and Options Issued, Exercised and Expired | A summary of the warrants and options issued, exercised and expired are below: Warrants and Options: Shares Weighted Avg. Balance at December 31, 2018 176,665 $ 5.61 Issued 1,233,000 $ 0.83 Exercised - - Expired 166,665 5.87 Balance at December 31, 2019 1,243,000 $ 0.83 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The provision for income taxes differs from the amounts which would result from applying the federal statutory rate of 21% to the Company’s loss before income taxes as follows: December 31, December 31, Computed “expected” income tax benefit $ (1,737,089 ) (1,051,665 ) State income tax benefit, net of federal benefit - - Change in valuation allowance 1,737,089 1,028,817 Other - 22,848 Change in federal income tax rate - - IRC section 382 limitations on future NOL utilization - - Write-off of property & equipment deferred tax asset - - Provision for income taxes $ - - |
Schedule of Components of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets for federal and state income taxes for the years ended December 31, 2019 and 2018 are as follows: 2019 2018 Deferred tax assets: Federal and state NOL carryforward $ 2,656,993 919,904 Property and equipment - 25,819 Reserves and accruals - 3,619 Other intangibles 63,000 47,302 Deferred expenses 100,116 213,371 Deferred rent - 42,846 Capitalized start-up expense - - Deferred tax assets 2,820,109 1,252,861 Less: Valuation allowance (2,820,109 ) (1,252,861 ) Net deferred tax assets $ - - |
Description of Business (Detail
Description of Business (Details Narrative) - USD ($) | Dec. 08, 2020 | Jun. 11, 2020 | Jan. 22, 2020 | Dec. 06, 2019 | Nov. 15, 2019 | Oct. 17, 2019 | Jun. 25, 2019 | Mar. 08, 2019 | Feb. 15, 2019 | Sep. 21, 2018 | Sep. 21, 2018 | Aug. 13, 2018 | Aug. 09, 2018 | Jun. 22, 2018 | Dec. 15, 2017 | Aug. 31, 2019 | Apr. 30, 2019 | Apr. 16, 2019 | Feb. 28, 2019 | Jan. 31, 2019 | Nov. 30, 2018 | Oct. 31, 2018 | Oct. 31, 2018 | Sep. 30, 2018 | Aug. 31, 2018 | Apr. 30, 2018 | Dec. 31, 2019 | Aug. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 06, 2020 | Oct. 31, 2020 | Aug. 07, 2020 | Mar. 01, 2019 | Jan. 10, 2017 |
Promissory note | $ 2,179,087 | $ 2,179,087 | $ 1,349,006 | ||||||||||||||||||||||||||||||||
Expected dividend yield | 0.00% | ||||||||||||||||||||||||||||||||||
Preferred stock, stated value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||||||||||||||
Deposite asset | $ 150,000 | $ 150,000 | |||||||||||||||||||||||||||||||||
Company's stock for resale | 15,000,000 | ||||||||||||||||||||||||||||||||||
Price per share | $ 0.50 | $ 0.50 | |||||||||||||||||||||||||||||||||
Shares sold during the period | 11,130,000 | 12,330,000 | |||||||||||||||||||||||||||||||||
Proceeds from sale of stock | $ 6,165,000 | ||||||||||||||||||||||||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||||||||
Number of shares issued, value | $ 5,565,000 | $ 3,121,001 | |||||||||||||||||||||||||||||||||
Debt instrument maturity date | Jun. 6, 2020 | ||||||||||||||||||||||||||||||||||
Warrants to purchase additional shares | 1,233,000 | 1,233,000 | 166,665 | ||||||||||||||||||||||||||||||||
Trailer Park [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 250,000 | ||||||||||||||||||||||||||||||||||
Decription of acquisition property | The Trailer Park can accommodate up to 90 trailers and RV's. There presently are 17 occupied trailers in the Trailer Park and we are making necessary upgrades to bring additional units to the facility to provide housing for our farm personnel. | ||||||||||||||||||||||||||||||||||
Cash payment for acquisition | $ 600,000 | ||||||||||||||||||||||||||||||||||
Issuance of restricted common stock | 50,000 | ||||||||||||||||||||||||||||||||||
Perodic installment amount | 2,178 | ||||||||||||||||||||||||||||||||||
Principal reduction payment | $ 50,000 | ||||||||||||||||||||||||||||||||||
Shares issued during the period | 66,667 | ||||||||||||||||||||||||||||||||||
Debt instrument interest description | Bearing interest at six and one-half percent | ||||||||||||||||||||||||||||||||||
Debt instrument maturity date description | on or before April 5, 2020 and April 5, 2021, respectively | ||||||||||||||||||||||||||||||||||
Balloon payment description | A final balloon payment of any and all outstanding principal and accrued interest is due and payable on or before April 5, 2022 | ||||||||||||||||||||||||||||||||||
Prepayment penalties | |||||||||||||||||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||||||||||||||
Conversion of preferred stock for common stock, shares | 3,333,333 | ||||||||||||||||||||||||||||||||||
Number of shares issued, value | $ 4,476 | ||||||||||||||||||||||||||||||||||
Series A convertible Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||
Agreement, description | Subject to a standard "4.99% Beneficial Ownership Limitation blocker," each share of Preferred Stock was convertible into shares of the Company's common stock at any time or from time to time at a conversion price equivalent of $0.75 per share, subject to adjustment as described in Certificate of Designation. | ||||||||||||||||||||||||||||||||||
Preferred stock, stated value | $ 1,000 | $ 1,000 | $ 1,000 | $ 1,000 | |||||||||||||||||||||||||||||||
Conversion price per share | 0.75 | ||||||||||||||||||||||||||||||||||
Additional Modifications of Buildings and Removal, remediation of Materials [Member] | |||||||||||||||||||||||||||||||||||
Cost incurred in modification of properties | $ 140,000 | ||||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||||||||||
Number of shares issued, value | $ 2,500,000 | ||||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Common Stock [Member] | |||||||||||||||||||||||||||||||||||
Conversion of preferred stock for common stock, shares | 3,333,333 | ||||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Series A convertible Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||
Preferred stock, stated value | 1,000 | ||||||||||||||||||||||||||||||||||
Conversion price per share | $ 0.75 | ||||||||||||||||||||||||||||||||||
Conversion of preferred stock for common stock, shares | 2,500 | ||||||||||||||||||||||||||||||||||
Revenue Participation Rights Agreement [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument maturity date | Apr. 30, 2027 | ||||||||||||||||||||||||||||||||||
Fifteen Year Suite License Agreement [Member] | |||||||||||||||||||||||||||||||||||
Terms of agreement | The Company entered into a fifteen year Suite License Agreement (the "Agreement") with LV Stadium Events Company, LLC for the lease of a suite within the multipurpose stadium (the "Stadium") constructed in Clark County, Nevada that is intended to be the home stadium for the Raiders National Football League team. Under the terms of the Agreement, the Company paid the initial deposit of $75,000, the second payment of $150,000 and the final payment on approximately October 15, 2020. Commencing with Year 6 of the Term, the License Fee for each Year of the Term shall be increased by an amount not to exceed three percent (3%) of the License Fee payable for the immediately preceding Year. | ||||||||||||||||||||||||||||||||||
MIPA [Member] | License [Member] | |||||||||||||||||||||||||||||||||||
Terms of agreement | Pursuant to the terms of the MIPA, the Company was required to enter into a $15,000 per month sub-lease (retroactive to March 1, 2019) for the 10 acre cultivation/production facility located in Pahrump, Nye County, NV and install a mobile production trailer. We acquired the production trailer from Solaris Farms, a related party, in April 2020 at a cost of $120,000. It is the intention of the Company, upon receipt of all necessary regulatory approvals, to move the cultivation license and production trailer from its current location to the Company's 260-acre facility. | ||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 500,000 | ||||||||||||||||||||||||||||||||||
Payment for acquisition | 1,250,000 | ||||||||||||||||||||||||||||||||||
Cash payment for acquisition | 750,000 | ||||||||||||||||||||||||||||||||||
Issuance of restricted common stock | $ 550,000 | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 2.00% | ||||||||||||||||||||||||||||||||||
Non-refundable down payment | $ 250,000 | ||||||||||||||||||||||||||||||||||
Debt instrument maturity date | Oct. 18, 2019 | ||||||||||||||||||||||||||||||||||
Moratorium [Member] | |||||||||||||||||||||||||||||||||||
Changes in acquisition of licenses | As of the date of this filing, the Company has made deposits totaling $500,000 and has reduced the principal of the aforementioned note to $250,000. It is expected that the Company will receive all of the necessary regulatory approvals during the fourth quarter of 2020. The Company is required to issue $1,000,000 of shares of our restricted common stock in fulfillment of our obligations in the MIPA. As of the date of this filing, these shares have not been issued and the parties are renegotiating the pricing of these shares to more accurately reflect the anticipated value at closing. The Company also executed a $750,000 long term note (the "LT Note") in favor of the current license holders that becomes due and payable upon the earliest of a) six months after the transfer of the Certificates to the Company, or b) six months after the production/cultivation is declared fully operational by the applicable regulatory agencies, or c) March 10, 2020. On February 19, 2020, the Company was put on notice by the Seller that it is in default under the terms of the MIPA, however, the parties are continuing to act in good faith towards a mutually satisfactory resolution. The LT Note carries an 8% annual interest rate and there is no penalty for any prepayment. | ||||||||||||||||||||||||||||||||||
Post Seed Preferred Unit Investement Agreeement [Member] | |||||||||||||||||||||||||||||||||||
Agreement, description | The Company entered into a Series Post Seed Preferred Stock and Series Post Seed Preferred Unit Investment Agreement (the "Agreement") with Innovation Labs, Ltd. and Innovation Shares, LLC. Under the terms of the Agreement, the Company purchased 238,096 Series Post Seed Preferred Stock Shares and 238,096 Series Post Seed Preferred Units for a purchase price of $250,000. | ||||||||||||||||||||||||||||||||||
Licensed Operator [Member] | Management agreement [Member] | |||||||||||||||||||||||||||||||||||
Terms of agreement | The material terms of the agreement remain unchanged. The Licensed Operator is contractually obligated to pay over to the Company eighty-five (85%) percent of gross revenues defined as gross proceeds from sales of marijuana products minus applicable state excise taxes and local sales tax. The agreement is to remain in force until April 2026. | ||||||||||||||||||||||||||||||||||
Agreement, description | Between April and August of 2018, at the Company's sole cost and expense, 'sit completed the construction of a 120,000 square-foot outdoor grow facility, including the construction of an 8,000 square-foot building and installation of required security fencing, meeting all of the State of Nevada's stringent building codes and regulations. Operation of this facility commenced in August 2018 with the Company first test grow. | ||||||||||||||||||||||||||||||||||
Consultant [Member] | Advisory Agreement [Member] | |||||||||||||||||||||||||||||||||||
Additional shares granted | 10,000 | ||||||||||||||||||||||||||||||||||
Exercise price | $ 1.20 | ||||||||||||||||||||||||||||||||||
Contractual term | 3 years | ||||||||||||||||||||||||||||||||||
Fair value of stock option | $ 6,738 | ||||||||||||||||||||||||||||||||||
Volatility rate | 222.00% | ||||||||||||||||||||||||||||||||||
Discount rate | 2.88% | ||||||||||||||||||||||||||||||||||
Expected dividend yield | 0.00% | ||||||||||||||||||||||||||||||||||
Expected life | 3 years | ||||||||||||||||||||||||||||||||||
Consultant compensation for termination of agreement, shares | 25,000 | ||||||||||||||||||||||||||||||||||
Consultant compensation for termination of agreement | $ 6,000 | ||||||||||||||||||||||||||||||||||
HCMC [Member] | Distribution Agreement [Member] | |||||||||||||||||||||||||||||||||||
Terms of agreement | Pursuant to the terms of the Distribution Agreement, the Company purchased certain of the Goods from the Seller and paid the sum of two million dollars ($2,000,000). | ||||||||||||||||||||||||||||||||||
Agreement, description | The Distribution Agreement is subject to standard termination provisions; however, the Seller has the option to terminate the Distribution Agreement, on 30 days' written notice, if the Company fails to purchase a sufficient minimum quantity of Goods from the Seller. The Company has met its obligations for the first year of the Agreement. Thereafter, for each renewal term, the Company's minimum purchase obligation for the Goods is $500,000, subject to good faith negotiation at the end of each contract year. In connection with the transactions contemplated by the Agreement, the Seller granted to the Company a non-exclusive, non-transferrable, and non-sub licensable fully paid license agreement. The Company and HCMC entered into a Termination and Mutual Release Agreement (the "Termination Agreement") dated November 15, 2019. Under the terms of the Termination Agreement, HCMC agreed to (i) make an initial purchase from the Company of 500,000 Q-Cups at $0.125 per Q-Cup for an aggregate purchase price of $62,500 (the "Initial Purchase"), and (ii) purchase up to a total of 1,600,000 Q-Cups (inclusive of the Initial Purchase) on an as needed basis at the same price of $0.125 at any time after the Effective Date of the Termination Agreement. | ||||||||||||||||||||||||||||||||||
FR Holdings LLC [Member] | Letter of Intent [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 750,000 | $ 750,000 | |||||||||||||||||||||||||||||||||
Debt instrument interest rate | 5.00% | 5.00% | |||||||||||||||||||||||||||||||||
Periodic installment interest period | 36 equal monthly | ||||||||||||||||||||||||||||||||||
Perodic installment amount | $ 3,125 | ||||||||||||||||||||||||||||||||||
Mr. Tierney [Member] | Tierney Employement Agreement [Member] | |||||||||||||||||||||||||||||||||||
Agreement, description | The Company was in default under the terms of the Tierney Employment Agreement. Mr. Tierney agreed to accrue 100% of his monthly salary for the period October 1, 2019 until December 31,2019 with payments to resume on the first regular payroll period of 2020. Due to the ongoing effects of COVID-19, Mr. Tierney waived his entire salary for April and May of 2020. As of the date of filing of this report Mr. Tierney has accrued total cash compensation due to him in the amount of $248,000. On August 7, 2020, Mr. Tierney's employment was terminated by the Board with cause. | ||||||||||||||||||||||||||||||||||
Mr. Tierney [Member] | Tierney Employement Agreement [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 501,085 | $ 501,085 | |||||||||||||||||||||||||||||||||
Coachill-Inn, LLC [Member] | |||||||||||||||||||||||||||||||||||
Decription of acquisition property | Acquire a 256,132 sq. ft. parcel of land within a 100-acre industrial cannabis park in Desert Hot Springs, CA (the "Property") to develop its first hotel project. | ||||||||||||||||||||||||||||||||||
Payment for acquisition | $ 5,125,000 | ||||||||||||||||||||||||||||||||||
Acquisition price description | The purchase price for the property is $5,125,000. CHL was to contribute $3,000,000 toward the purchase price of this property in exchange for a twenty-five percent (25%) ownership interest in Coachill-Inn. AH made an initial non-refundable deposit in the amount of $150,000 toward the purchase of the Property. As of the date of this filing, the Company terminated its participation in the development due to financing issues and has no recourse to recover its deposit. | ||||||||||||||||||||||||||||||||||
Seller [Member] | |||||||||||||||||||||||||||||||||||
Warrants to purchase additional shares | 1,500,000 | ||||||||||||||||||||||||||||||||||
Seller [Member] | Warrant One [Member] | |||||||||||||||||||||||||||||||||||
Warrants to purchase additional shares | 1,000,000 | ||||||||||||||||||||||||||||||||||
Exercisable for a period | 3 years | ||||||||||||||||||||||||||||||||||
Exercise price | $ 2 | ||||||||||||||||||||||||||||||||||
Seller [Member] | Warrant Two [Member] | |||||||||||||||||||||||||||||||||||
Warrants to purchase additional shares | 500,000 | ||||||||||||||||||||||||||||||||||
Exercisable for a period | 2 years | ||||||||||||||||||||||||||||||||||
Exercise price | $ 1.50 | ||||||||||||||||||||||||||||||||||
Buyer [Member] | Membership Interest Purchase Agreement [Member] | |||||||||||||||||||||||||||||||||||
Sale of ownership | 49.00% | ||||||||||||||||||||||||||||||||||
Proceeds from sale of ownership | $ 441,000 | ||||||||||||||||||||||||||||||||||
Buyer [Member] | MIPA2 [Member] | |||||||||||||||||||||||||||||||||||
Agreement, description | The Agreement required the Buyer to make an additional $3,559,000 payment to be utilized for the improvement and build-out of the Company's Western Avenue leasehold in Las Vegas, Nevada. The payment was due within ten (10) days of the receipt by Red Earth of a special use permit ("SUP") from the City of Las Vegas for our Western Avenue cultivation facility. The Company received the SUP on October 9, 2019. The Buyer, in conjunction with the Company, will jointly manage and operate the facility upon completion. The Agreement also requires the Buyer to make a final payment to the Company of $1,000,000 between 90 and 180 days of issuance of the SUP or no later than April 9, 2020. As of the date of this filing, the Buyer has not complied with the terms of the Agreement. The Company is currently in discussions with the Buyer regarding the past due payments. There is no guarantee that the Buyer will agree to remit the required funds to bring them current under the terms of the Agreement. | ||||||||||||||||||||||||||||||||||
Payment for acquisition | $ 3,559,000 | ||||||||||||||||||||||||||||||||||
Buyer [Member] | MIPA2 [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||||||
Agreement, description | Under the terms of the First Amendment, the Closing Purchase Price was adjusted to $441,000, the Buyer was required to make a capital contribution (the "Initial Contribution Payment") to the Target Company in the amount of $120,000 and the Buyer was required to make an additional cash contribution (the Final Contribution Payment") in the amount of $240,000. | ||||||||||||||||||||||||||||||||||
MJ Real Estate Partners, LLC (MJRE) [Member] | |||||||||||||||||||||||||||||||||||
Issuance of common stock for stock exchange | 1,800,000 | ||||||||||||||||||||||||||||||||||
Exchange of common stock acquired, shares | 1,800,000 | ||||||||||||||||||||||||||||||||||
Red Earth LLC [Member] | |||||||||||||||||||||||||||||||||||
Issuance of common stock for stock exchange | 52,732,969 | ||||||||||||||||||||||||||||||||||
Promissory note | $ 900,000 | ||||||||||||||||||||||||||||||||||
Description of reverse merger | The acquisition was accounted for as a "Reverse Merger", whereby Red Earth was considered the accounting acquirer and became its wholly owned subsidiary. Upon the consummation of the acquisition, the now former members of Red Earth became the beneficial owners of approximately 88% of the Company's Common Stock, obtained controlling interest of the Company, and retained certain of its key management positions. | ||||||||||||||||||||||||||||||||||
Percentage of controlling interest | 88.00% | ||||||||||||||||||||||||||||||||||
Lease term extension | The initial term of the lease is for a period of ten years with two additional five-year lease options. | ||||||||||||||||||||||||||||||||||
HDGLV [Member] | |||||||||||||||||||||||||||||||||||
Lease term extension | HDGLV also possesses an option to purchase the building for $2,607,880 which is exercisable between months 25 and 60 of the initial term of the lease. | ||||||||||||||||||||||||||||||||||
HCMC [Member] | Stock Exchange Agreement [Member] | |||||||||||||||||||||||||||||||||||
Issuance of common stock for stock exchange | 85,714 | ||||||||||||||||||||||||||||||||||
Exchange of common stock acquired, shares | 1,500,000,000 | ||||||||||||||||||||||||||||||||||
Share price | $ 0.0001 | ||||||||||||||||||||||||||||||||||
Value of the stock exchanged by each party | $ 150,000 | ||||||||||||||||||||||||||||||||||
Farm Road [Member] | Letter of Intent [Member] | |||||||||||||||||||||||||||||||||||
Agreement, description | The terms of the Promissory Note include a balloon payment to be made on January 17, 2022 of any of the then remaining principal balance and accrued interest. The MIPA further provides that FRH shall be entitled to receive a consulting fee of five per cent (5%) of the gross sales from any commercial use of the property up to a maximum of five hundred thousand ($500,000.00) dollars payable to FRH within two years of the January 18, 2019 closing date. The land ac quired in Amargosa Valley will be the home of its Nye County cultivation facility upon closing of its purchase of the required licenses. Due to COVID-19, the Company has been unable to make the monthly interest payments to FRH. As of the date of this filing, the Company is 4 months in arrears. | ||||||||||||||||||||||||||||||||||
Decription of acquisition property | Farm Road was the owner of five parcels of farmland in the Amargosa Valley of Nevada totaling 260 acres and the concomitant 180 acre-feet of water rights. | ||||||||||||||||||||||||||||||||||
Payment for acquisition | $ 1,000,000 | ||||||||||||||||||||||||||||||||||
Cash payment for acquisition | 50,000 | ||||||||||||||||||||||||||||||||||
Issuance of restricted common stock | 50,000 | ||||||||||||||||||||||||||||||||||
Cash payable for acquisition | $ 150,000 | ||||||||||||||||||||||||||||||||||
Prescott Management LLC [Member] | |||||||||||||||||||||||||||||||||||
Agreement, description | Pursuant to the terms of the MOU, the Party made payments to the Company totaling $232,500, which was paid during the year ended December 31, 2018. The Party was entitled to receive shares of our restricted common stock with a fair market value as of the trading day immediately preceding the date the first license application was submitted to NVDOT (September 20, 2018) equal to $232,500. The Company issued 91,177 shares of common stock to the Party in connection with this transaction. Subsequent to December 31, 2018, the Company entered into an agreement with the Party to relieve the Company and the Party of any further obligations under the MOU in exchange for an additional 373,823 shares of the Company's restricted common stock. The additional shares were issued to the Party on July 19, 2019. | ||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 1,100,000 | $ 1,086,662 | $ 1,086,662 | ||||||||||||||||||||||||||||||||
Decription of acquisition property | The Company, through its wholly-owned subsidiary Prescott Management, LLC, entered into a contract to purchase an approximately 10,000 square foot office building located at 1300 South Jones Boulevard, Las Vegas, Nevada 89146 for $1,500,000, subject to seller financing in the amount of $1,100,000; amortizing over 30 years at an interest rate of 6.5% per annum | ||||||||||||||||||||||||||||||||||
Payment for acquisition | $ 1,500,000 | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 6.50% | ||||||||||||||||||||||||||||||||||
Perodic installment amount | $ 6,953 | ||||||||||||||||||||||||||||||||||
Description of periodic payment | The Company continues to be obligated to the monthly payment of principal and interest in the amount of $6,953 continuing until October 31, 2023. | Monthly installments of $6,953 beginning on November 1, 2018, and continuing on the same day of each month thereafter until October 31, 2023. | |||||||||||||||||||||||||||||||||
Principal balance | $ 1,087,705 | $ 1,087,705 | |||||||||||||||||||||||||||||||||
Periodic installment pricipal period | $ 6,953 | $ 6,953 | $ 8,152 | ||||||||||||||||||||||||||||||||
Acres Cultivation, LLC [Member] | Mr. Tierney [Member] | Tierney Employement Agreement [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 501,085 | ||||||||||||||||||||||||||||||||||
Let's Roll NV, LLC and Blue Sky Companies, LLC [Member] | Revenue Participation Rights Agreement [Member] | |||||||||||||||||||||||||||||||||||
Agreement, description | On or before April 30th for the next 8 years (2019-2026), the Company shall calculate the pro rata gross revenue due to the Subscribers with payments being made on or before May 31st of each year. As of the date of this filing, the Subscribers have agreed to forgo any payments required under the Agreement until May of 2021. | ||||||||||||||||||||||||||||||||||
Ownership interest rate | 3.95% | ||||||||||||||||||||||||||||||||||
Exchange amount | $ 100,000 | ||||||||||||||||||||||||||||||||||
Agreement amount | $ 1,142,100 | ||||||||||||||||||||||||||||||||||
Alternative Hospitality, Inc [Member] | |||||||||||||||||||||||||||||||||||
Ownership description | The Company owns fifty-one percent (51%) of Alternative and TVK owns the remaining forty-nine percent (49%). | ||||||||||||||||||||||||||||||||||
Red Dot Development, LLC [Member] | |||||||||||||||||||||||||||||||||||
Shares returned during the period, shares | 20,000,000 | ||||||||||||||||||||||||||||||||||
Shares returned during the period | $ 20,000 | ||||||||||||||||||||||||||||||||||
Highland Brothers, LLC [Member] | Licensing Agreement [Member] | |||||||||||||||||||||||||||||||||||
Agreement, description | In consideration of the license, the Company agreed to compensate HB seven percent (7%) of the net sales generated by the Company for any products utilizing and/or integrating property rights, brands or logos of HB commencing in 2020. The Agreement has a term of ten (10) years. | ||||||||||||||||||||||||||||||||||
HCMC [Member] | Termination and Mutual Release Agreement [Member] | |||||||||||||||||||||||||||||||||||
Price per share | $ 0.125 | ||||||||||||||||||||||||||||||||||
Shares sold during the period | 500,000 | ||||||||||||||||||||||||||||||||||
Number of shares issued, value | $ 62,500 | ||||||||||||||||||||||||||||||||||
HCMC [Member] | Termination and Mutual Release Agreement [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||||||
Price per share | $ 0.125 | $ 0.125 | |||||||||||||||||||||||||||||||||
Shares sold during the period | 1,600,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Expected dividend yield | 0.00% | |
Beneficial conversion feature | $ 2,500,000 | |
Impairment of long-lived assets | 1,110,356 | |
Revenue | $ 897,696 | $ 8,150 |
Series A Preferred Stock [Member] | ||
Conversion price per shares | $ 0.75 | |
Shares issued price per share | 1.50 | |
Intrinsic value price per shares | $ 0.75 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Property, Plant and Equipment Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Buildings [Member] | |
Property, plant and equipment, estimated useful lives | 12 years |
Land [Member] | |
Property, plant and equipment, estimated useful lives, description | Not depreciated |
Leasehold Improvements [Member] | |
Property, plant and equipment, estimated useful lives, description | Lessor of lease term or 5 years |
Machinery and Equipment [Member] | |
Property, plant and equipment, estimated useful lives | 5 years |
Furniture and Fixtures [Member] | |
Property, plant and equipment, estimated useful lives | 5 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Licenses [Member] | Minimum [Member] | |
Estimated Useful Lives of Intangible Assets | 12 years |
Licenses [Member] | Maximum [Member] | |
Estimated Useful Lives of Intangible Assets | 20 years |
Trade Names [Member] | Minimum [Member] | |
Estimated Useful Lives of Intangible Assets | 5 years |
Trade Names [Member] | Maximum [Member] | |
Estimated Useful Lives of Intangible Assets | 15 years |
Non-Compete Agreements [Member] | Minimum [Member] | |
Estimated Useful Lives of Intangible Assets | 1 year |
Non-Compete Agreements [Member] | Maximum [Member] | |
Estimated Useful Lives of Intangible Assets | 2 years |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ (16,038,345) | $ (7,870,449) |
Net loss | (8,271,852) | (5,007,928) |
Working capital | (2,186,732) | |
Cash and cash equivalents | $ 22,932 | $ 56,656 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Inventory Details Narrative Abstract | ||
Inventory | $ 1,587,852 | |
Impairment to inventory | $ 1,271,402 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 371,512 | $ 123,256 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Total property and equipment | $ 5,068,850 | $ 2,752,207 |
Less: Accumulated depreciation | (494,768) | (123,256) |
Property and equipment, net | 4,574,082 | 2,628,951 |
Leasehold Improvements [Member] | ||
Total property and equipment | 323,281 | 17,535 |
Machinery and Equipment [Member] | ||
Total property and equipment | 1,052,203 | 919,782 |
Building and Land [Member] | ||
Total property and equipment | 3,150,000 | 1,500,000 |
Furniture and Fixtures [Member] | ||
Total property and equipment | $ 543,366 | $ 314,890 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - Provisional Grow License [Member] - USD ($) | 1 Months Ended | |
Feb. 28, 2017 | Oct. 31, 2016 | |
Investor [Member] | ||
Payment for business acquisition | $ 350,000 | |
Asset Purchase and Sale Agreement [Member] | ||
Agreement amount received from seller | $ 300,000 | |
Payment for deposit | $ 25,000 |
Asset Impairment - Schedule of
Asset Impairment - Schedule of Asset Impairment (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | |
Reserve account | $ 1,110,356 | ||
Smile, LLC [Member] | |||
Reserve account | [1] | 160,356 | |
Innovation Labs, Ltd [Member] | |||
Reserve account | [2] | 250,000 | |
Coachill-Inn, LLC [Member] | |||
Reserve account | [3] | 150,000 | |
MJ Distributing, Inc.[Member] | |||
Reserve account | [4] | $ 550,000 | |
[1] | On June 7, 2019, Smile, LLC ("Smile")(the "Borrower"), a Nevada limited liability company, issued a Convertible Promissory Note (the "Note") in the amount of $250,000 to Roger Bloss, a director of the Company, and MJ Holdings, Inc. for funds advanced to Smile. Mr. Bloss contributed $100,000 and MJ Holdings, Inc. $150,000 for a total of $250,000. The Note had a term of six (6) months, matured on December 6, 2019 and accrues interest at 1% per month. The Holder shall have the right from time to time, and at any time during the period beginning on the date which is 180 days following the date of this Note and ending on the later of: (i) the Initial Maturity date, and (ii) the Extended Maturity Date, or (iii) the date of payment of the Default amount, to convert the note into equity ownership of the Borrower. The conversion shall be negotiated in good faith. If the parties cannot agree to the Conversion Price, then a third party shall determine the Value of the Borrower and the Conversion Price shall be the Principal Amount ("PA") of the Note as the numerator and the Value of the Borrower ("V") shall be the denominator. PA/V=X *100=% of ownership. On December 5, 2019, the Borrower was granted a 6-month extension by the Company that changed the maturity date to June 6, 2020. The Note is currently in default. As such, the Company has elected to reserve the entire Note amount at December 31, 2019 due to the uncertainty of its ability to collect on the Note. | ||
[2] | On June 25, 2019, the Company entered into a Series Post Seed Preferred Stock and Series Post Seed Preferred Unit Investment Agreement (the "Agreement") with Innovation Labs, Ltd. and Innovation Shares, LLC. Under the terms of the Agreement, the Company purchased 238,096 Series Post Seed Preferred Stock Shares and 238,096 Series Post Seed Preferred Units for a purchase price of $250,000. As of December 31, 2019, the Company has elected to reserve the entire amount of the investment due to the uncertainty of its ability to liquidate the investment to recover its $250,000 purchase price or recover the investment amount through dividends payable by Innovation Labs, Ltd. | ||
[3] | In January of 2019, the Company formed Coachill-Inn, LLC ("Coachill-Inn"), a subsidiary of Alternative Hospitality ("AH"), to develop a proposed hotel in Desert Hot Springs, CA. From January through June 2019, the Company was actively engaged in negotiations with the property owner of the proposed location. In June of 2019, Coachill-Inn executed a purchase and sale agreement with Coachillin' Holdings, LLC ("CHL") to acquire a 256,132 sq. ft. parcel of land within a 100-acre industrial cannabis park in Desert Hot Springs, CA (the "Property") to develop the Company's first hotel project. The purchase price for the property is $5,125,000. CHL was to contribute $3,000,000 toward the purchase price of this property in exchange for a twenty-five percent (25%) ownership interest in Coachill-Inn. AH made an initial non-refundable deposit in the amount of $150,000 toward the purchase of the Property. As of the date of this filing, the Company terminated its participation in the development due to financing issues and has no recourse to recover its deposit. | ||
[4] | On April 2, 2019, the Company executed a Membership Interest Purchase Agreement ("MIPA") with MJ Distributing, Inc. (the "Seller") to acquire all of the outstanding membership interests of MJ Distributing C202, LLC and MJ Distributing P133, LLC, each the holder of a State of Nevada provisional medical and recreational cultivation license and a provisional medical and recreational production license. The licenses were required to be perfected pursuant to Nevada Revised Statutes 453A (NRS 453A - Medical Marijuana) and Nevada Revised Statures 453D (NRS453D - Recreation/Adult Use Marijuana). In January of 2020, the State of Nevada issued a Conditional Medical Marijuana Cultivation Certificate and a Conditional Medical Marijuana Production Certificate. On May 1, 2020, the State of Nevada issued a Conditional Recreational Marijuana Cultivation Certificate and a Conditional Recreational Marijuana Production Certificate. As of October 2019, the State of Nevada placed a moratorium on the transfer of all licenses within the state. The Company does not know when this moratorium will be lifted, but it expects the newly formed Cannabis Control Board to expedite transfers beginning in Q4 of 2020. Due to the ongoing impact of COVID-19 on the Company's business operations, it has been unable to comply with the payment obligations required of it in the MIPA. In February of 2020, the Company received a Demand for Payment from the Seller. As of the date of this filing, the Company has been in active negotiations with the Seller for an extension of the payment terms. There is no guarantee that the Company will be successful in its negotiations. In the event the Company is not successful, it would forfeit all funds paid to date. As such, the Company has elected to reserve the entire amount on deposit at December 31, 2019 due to its inability to recover the deposit. |
Asset Impairment - Schedule o_2
Asset Impairment - Schedule of Asset Impairment (Details) (Parenthetical) - USD ($) | Dec. 06, 2019 | Jun. 25, 2019 | Jun. 07, 2019 | Jan. 31, 2019 | Dec. 31, 2019 |
Contributed amont | $ 250,000 | ||||
Debt instrument term | 6 months | ||||
Debt instrument maturity date | Jun. 6, 2020 | ||||
Series Post Seed Preferred Stock [Member] | Innovation Labs, Ltd [Member] | |||||
Number of shares purchased | 238,096 | ||||
Number of shares purchased, value | $ 250,000 | ||||
Series Post Seed Preferred Unit Investment Agreement [Member] | Innovation Shares, LLC. [Member] | |||||
Number of shares purchased | 238,096 | ||||
Number of shares purchased, value | $ 250,000 | ||||
Recovery of purchase price | $ 250,000 | ||||
Parent Company [Member] | |||||
Contributed amont | 150,000 | ||||
Roger Bloss [Member] | |||||
Contributed amont | $ 100,000 | ||||
Coachill-Inn, LLC [Member] | |||||
Decription of acquisition property | Acquire a 256,132 sq. ft. parcel of land within a 100-acre industrial cannabis park in Desert Hot Springs, CA (the "Property") to develop its first hotel project. | ||||
Payment for acquisition | $ 5,125,000 | ||||
Acquisition price description | The purchase price for the property is $5,125,000. CHL was to contribute $3,000,000 toward the purchase price of this property in exchange for a twenty-five percent (25%) ownership interest in Coachill-Inn. AH made an initial non-refundable deposit in the amount of $150,000 toward the purchase of the Property. As of the date of this filing, the Company terminated its participation in the development due to financing issues and has no recourse to recover its deposit. | ||||
Convertible Promissory Note [Member] | |||||
Debt instrument term | 6 months | ||||
Debt instrument maturity date | Dec. 6, 2019 | ||||
Debt interest per month | 1.00% | ||||
Convertible Promissory Note [Member] | Roger Bloss [Member] | |||||
Debt instrument face amount | $ 250,000 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) | Dec. 06, 2019 | Jul. 15, 2019shares | Jun. 07, 2019 | Apr. 01, 2019USD ($) | Jan. 17, 2019USD ($) | Sep. 21, 2018USD ($)ft² | Sep. 21, 2018USD ($)ft² | Dec. 15, 2017USD ($)$ / shares | Sep. 30, 2018USD ($) | Dec. 31, 2019USD ($) | Feb. 14, 2019USD ($) | Feb. 01, 2019USD ($) | Oct. 17, 2018USD ($) |
Debt instrument maturity date | Jun. 6, 2020 | ||||||||||||
Convertible Promissory Note [Member] | |||||||||||||
Debt interest rate | 1.00% | ||||||||||||
Debt instrument maturity date | Dec. 6, 2019 | ||||||||||||
Convertible Promissory Note [Member] | Roger Bloss [Member] | |||||||||||||
Debt instrument principal value | $ 250,000 | ||||||||||||
Debt interest rate | 5.00% | ||||||||||||
Promissory Note [Member] | John T. Jacobs and Teresa D. Jacobs [Member] | |||||||||||||
Debt instrument principal value | $ 250,000 | $ 242,425 | |||||||||||
Debt interest rate | 6.50% | ||||||||||||
Debt instrument monthly installments | $ 2,178 | ||||||||||||
Interest payable | 1,318 | ||||||||||||
Debt instrument maturity date, description | Beginning May 1, 2019 until March 31, 2020 | ||||||||||||
Debt instrument principal payment reduction | $ 50,000 | ||||||||||||
Debt instrument payment term | The payments shall be re-amortized (15-year amortization) | ||||||||||||
Restricted Stock [Member] | Convertible Promissory Note [Member] | |||||||||||||
Restricted common stock, shares | shares | 500,000 | ||||||||||||
Second Payment [Member] | March 31, 2021 [Member] | Promissory Note [Member] | John T. Jacobs and Teresa D. Jacobs [Member] | |||||||||||||
Debt instrument principal payment reduction | $ 50,000 | ||||||||||||
Debt instrument payment term | The payments shall be re-amortized (15-year amortization) | ||||||||||||
Prescott Management LLC [Member] | |||||||||||||
Area of land | ft² | 10,000 | 10,000 | |||||||||||
Seller financing | $ 1,500,000 | ||||||||||||
Debt instrument principal value | $ 1,100,000 | 1,086,662 | |||||||||||
Debt interest rate | 6.50% | ||||||||||||
Debt instrument monthly installments | $ 6,953 | $ 6,953 | 8,152 | ||||||||||
Interest payable | 5,886 | ||||||||||||
Notes payable, description | The Company, through its wholly-owned subsidiary Prescott Management, LLC, entered into a contract to purchase an approximately 10,000 square foot office building located at 1300 South Jones Boulevard, Las Vegas, Nevada 89146 for $1,500,000, subject to seller financing in the amount of $1,100,000, amortizing over 30 years at an interest rate of 6.5% per annum with monthly installments of $6,952.75 beginning on November 1, 2018, and continuing on the same day of each month thereafter until October 31, 2019. Upon the one-year anniversary of the note, a principal reduction payment of $50,000 is due, and provided that the monthly payments and the principal reduction payment have been made, the payments will be recalculated and re-amortized on the same terms with a new scheduled monthly payment of $6,559 beginning on November 1, 2019 and continuing until October 31, 2023, at which time the entire sum of principal in the amount of $986,438, plus any accrued interest, is due and payable. The Company closed the purchase on October 18, 2018. The building is home to the Company's business operations. | ||||||||||||
Debt instrument payment term | The Company continues to be obligated to the monthly payment of principal and interest in the amount of $6,953 continuing until October 31, 2023. | Monthly installments of $6,953 beginning on November 1, 2018, and continuing on the same day of each month thereafter until October 31, 2023. | |||||||||||
Prescott Management LLC [Member] | One-Year Anniversary [Member] | |||||||||||||
Debt instrument monthly installments | $ 50,000 | ||||||||||||
Prescott Management LLC [Member] | New Scheduled Payment [Member] | Beginning on November 1, 2019 and Continuing Until October 31, 2023 [Member] | |||||||||||||
Debt instrument principal value | $ 986,438 | 986,438 | |||||||||||
Debt instrument monthly installments | $ 6,559 | ||||||||||||
FR Holdings LLC [Member] | Promissory Note [Member] | |||||||||||||
Debt instrument principal value | $ 750,000 | 750,000 | |||||||||||
Debt interest rate | 5.00% | ||||||||||||
Debt instrument monthly installments | $ 3,125 | ||||||||||||
Interest payable | 1,458 | ||||||||||||
Debt instrument maturity date, description | Beginning February 1, 2019 until January 31, 2022 | ||||||||||||
FR Holdings LLC [Member] | Short Term Promissory Note [Member] | Chief Cultivation Officer and Director [Member] | |||||||||||||
Debt instrument principal value | $ 150,000 | 100,000 | |||||||||||
Debt interest rate | 9.00% | ||||||||||||
Debt instrument monthly installments | $ 50,000 | ||||||||||||
Interest payable | $ 10,794 | ||||||||||||
Debt instrument maturity date | Jan. 16, 2020 | ||||||||||||
Roll On, LLC [Member] | Short Term Promissory Note [Member] | |||||||||||||
Debt instrument principal value | $ 101,000 | ||||||||||||
Debt interest rate | 0.00% | ||||||||||||
Roll On, LLC [Member] | Short Term Promissory Note [Member] | Chief Cultivation Officer and Director [Member] | |||||||||||||
Debt instrument principal value | $ 101,000 | ||||||||||||
Interest payable | |||||||||||||
Stran & Company [Member] | Short Term Promissory Note [Member] | |||||||||||||
Debt instrument principal value | $ 100,000 | ||||||||||||
Debt interest rate | 0.50% | ||||||||||||
Stran & Company [Member] | First 90 Days [Member] | Short Term Promissory Note [Member] | |||||||||||||
Debt interest rate | 0.00% | ||||||||||||
Red Earth, LLC [Member] | Convertible Note Payable [Member] | |||||||||||||
Debt instrument principal value | $ 900,000 | ||||||||||||
Debt interest rate | 0.50% | ||||||||||||
Notes payable, description | The note accrued interest, commencing six months from the issuance date, at a rate equal to one half of one percent (0.50%) per annum. | ||||||||||||
Debt instrument maturity date | Oct. 15, 2018 | ||||||||||||
Debt instrument conversion price | $ / shares | $ 0.75 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Total notes payable | $ 2,179,087 | $ 1,349,006 |
Less: current portion | (1,249,561) | (312,905) |
Long-term notes payable | 929,526 | 1,036,101 |
Note Payable One [Member] | ||
Total notes payable | 1,086,662 | 1,099,006 |
Convertible Note Payable - Related Party [Member] | ||
Total notes payable | 250,000 | |
Note Payable Two [Member] | ||
Total notes payable | 750,000 | |
Note Payable Three [Member] | ||
Total notes payable | 100,000 | |
Note Payable Four [Member] | ||
Total notes payable | $ 242,425 |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | Dec. 06, 2019 | Nov. 01, 2019 | Apr. 01, 2019 | Jan. 17, 2019 | Oct. 17, 2018 |
Debt instrument maturity date | Jun. 6, 2020 | ||||
Note Payable One [Member] | |||||
Debt interest rate | 6.50% | ||||
Debt instrument maturity date | Oct. 31, 2023 | ||||
Debt instrument principal value | $ 1,100,000 | ||||
Convertible Note Payable - Related Party [Member] | |||||
Debt interest rate | 5.00% | ||||
Debt instrument maturity date | Oct. 16, 2019 | ||||
Note Payable Two [Member] | |||||
Debt interest rate | 5.00% | ||||
Debt instrument maturity date | Jan. 31, 2022 | ||||
Note Payable Three [Member] | |||||
Debt interest rate | 9.00% | ||||
Debt instrument maturity date | Jan. 16, 2020 | ||||
Debt instrument principal value | $ 150,000 | ||||
Note Payable Four [Member] | |||||
Debt interest rate | 6.50% | ||||
Debt instrument maturity date | Mar. 31, 2022 | ||||
Debt instrument principal value | $ 250,000 |
Notes Payable - Schedule of Min
Notes Payable - Schedule of Minimum Loan Payments (Details) | Dec. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 208,148 |
2021 | 394,197 |
2022 | 857,966 |
2023 | 104,841 |
2024 | 104,841 |
Thereafter | 457,535 |
Total minimum loan payments | $ 2,127,528 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) | Jul. 01, 2019 | Jun. 15, 2019 | Jun. 01, 2019 | May 31, 2019 | Feb. 18, 2019 | Oct. 15, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Net income loss | $ (8,271,852) | $ (5,007,928) | ||||||
Proceeds from issuance or sale of equity | $ 6,165,000 | |||||||
Lease expiration | Jun. 30, 2027 | |||||||
Lease payments amount | $ 223,640 | 19,220 | ||||||
Operating lease liabilities | 2,368,646 | |||||||
Right use assets for operating leases | 2,194,278 | |||||||
Cash outflows operating lease liabilities | 172,515 | |||||||
Operating leases expense | $ 150,007 | |||||||
Operating leases remaining term | 4 years 6 months | |||||||
Operating leases weighted average discount rate | 4.50% | |||||||
Rent expense | $ 415,910 | $ 311,994 | ||||||
John R. Wheeler [Member] | ||||||||
Issuance of common stock for services, shares | 125,000 | 250,000 | ||||||
Common stock par value | $ 0.001 | |||||||
Treasurer and Chief Financial Officer [Member] | ||||||||
Issuance of shares in monthly installments | 10,417 | |||||||
Employment Agreement [Member] | Mr. Laurence Ruhe [Member] | ||||||||
Issuance of shares in monthly installments | 3,903 | |||||||
Agreement term | 2 years | |||||||
Annual base compensation | $ 100,000 | |||||||
Vesting shares | 46,836 | |||||||
Employment Agreement [Member] | Richard S. Groberg [Member] | ||||||||
Agreement term | 3 years | |||||||
Annual base compensation | $ 180,000 | |||||||
Annual base compensation per month | $ 5,000 | |||||||
Number of restricted stock awards | 400,000 | |||||||
Vesting percentage | 25.00% | |||||||
Vesting percentage, description | The Company's Stock to vest: 25% six months after the effective date of the Employment Agreement; 25% on the first anniversary after the effective date of the Employment Agreement, 25% on the second anniversary after the effective date of the Employment Agreement and 25% on the third anniversary after the effective date of the Employment Agreement. | |||||||
Employment Agreement [Member] | Richard S. Groberg [Member] | First Anniversary [Member] | ||||||||
Vesting percentage | 25.00% | |||||||
Employment Agreement [Member] | Richard S. Groberg [Member] | Second Anniversary [Member] | ||||||||
Vesting percentage | 25.00% | |||||||
Employment Agreement [Member] | Richard S. Groberg [Member] | Third Anniversary [Member] | ||||||||
Vesting percentage | 25.00% | |||||||
Employment Agreement [Member] | Terrence M Tierney [Member] | ||||||||
Employee term | 3 years | |||||||
Cost of good sandservicessold | $ 20,000,000 | |||||||
Net income loss | 5,000,000 | |||||||
Proceeds from issuance or sale of equity | $ 50,000,000 | |||||||
Share based compensation arrangement | 500,000 | |||||||
Employment agreements, description | On October 15, 2018, the Company entered into an employment agreement (the "Tierney Employment Agreement") with Terrence M. Tierney. Pursuant to the Tierney Employment Agreement, the Company appointed Mr. Tierney, to the position of Chief Administrative Officer, in addition to his previous role as Secretary. The initial term of employment is for a three-year period (or until September 30, 2021), unless extended or otherwise terminated in accordance with its terms. The effective date of The Tierney Employment Agreement automatically renews for successive periods of three (3) years unless either party gives written notice to the other party that it does not wish to automatically renew. Mr. Tierney's annual salary is equal to or greater than any other senior executive of the Company with the exception of the Chief Executive Officer. The Tierney Employment Agreement defers salary of $10,000 per month of Mr. Tierney's salary until such time as the Company has achieved gross annual sales of $20,000,000 or net annual profits (as defined in the Tierney Employment Agreement) of $5,000,000 or has raised a total of $50,000,000 in equity or debt financing. In addition, the Company agreed to issue 500,000 shares of common stock pursuant to a stock award agreement within thirty (30) days of adoption of an omnibus benefit plan. | |||||||
Issuance of common stock for services, shares | 500,000 | |||||||
Annual base compensation | $ 10,000 | |||||||
Employment Agreement [Member] | Paris Balaouras [Member] | ||||||||
Employment agreements, description | The Company entered into an employment agreement (the "Balaouras Employment Agreement") with Paris Balaouras. Mr. Balaouras was appointed Chief Executive Officer of the Company on December 15, 2017. The initial term of employment was for a five-year period (or until December 31, 2022), unless extended or otherwise terminated in accordance with its terms. The effective date of the Balaouras Employment Agreement was January 1, 2019, and continues until the earlier of: (i) the effective date of any subsequent employment agreement between Mr. Balaouras and us; (ii) the effective date of any termination of employment as provided for in the Balaouras Employment Agreement; or (iii) five (5) years from the effective date; provided, that the Balaouras Employment Agreement automatically renews for successive periods of three (3) years unless either party gives written notice to the other party that it does not wish to automatically renew, which written notice must be received by the other party no less than ninety (90) days and no more than one hundred eighty (180) days prior to the expiration of the applicable term. Mr. Balaouras elected to waive any 2018 salary, which was recorded as an expense and additional to paid-in capital in 2018, and defer 52% of his 2019 salary; which such deferment shall continue until such time as the Company has operated on a positive cash flow basis for a period of not less than three months. At that time all deferred compensation shall be payable in equal monthly installments for a period of 24 months. |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Rental and Lease Commitments (Details) | Dec. 31, 2019USD ($) |
Income Tax Disclosure [Abstract] | |
2020 | $ 350,640 |
2021 | 350,640 |
2022 | 350,755 |
2023 | 350,986 |
2024 | 351,333 |
Thereafter | 1,150,995 |
Total minimum lease payments | $ 2,905,349 |
Capital Stock (Details Narrativ
Capital Stock (Details Narrative) - USD ($) | Jul. 15, 2019 | Apr. 01, 2019 | Feb. 10, 2019 | Oct. 15, 2018 | Sep. 28, 2018 | Sep. 04, 2018 | Aug. 13, 2018 | Aug. 09, 2018 | Apr. 16, 2019 | Dec. 03, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Common stock authorized | 95,000,000 | 95,000,000 | ||||||||||
Preferred stock authorized | 5,000,000 | 5,000,000 | ||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||||||
Common stock, shares issued | 65,436,449 | 70,894,146 | ||||||||||
Common stock, shares outstanding | 65,436,449 | 70,894,146 | ||||||||||
Value of stock issued for services | $ 796,229 | $ 59,990 | ||||||||||
Number of shares issued, value | $ 5,565,000 | 3,121,001 | ||||||||||
Stock, issued during the period conversion, shares | ||||||||||||
Proceeds from sale of common stock | $ 6,164,993 | $ 3,121,001 | ||||||||||
Preferred stock, shares issued | 0 | 0 | ||||||||||
Common Stock Issuances [Member] | ||||||||||||
Common stock, shares issued | 65,436,449 | 70,894,146 | ||||||||||
Common stock, shares outstanding | 65,436,449 | 70,894,146 | ||||||||||
Preferred Stock [Member] | ||||||||||||
Preferred stock authorized | 5,000,000 | |||||||||||
Preferred stock, par value | $ 0.001 | |||||||||||
Number of shares issued for services | ||||||||||||
Value of stock issued for services | ||||||||||||
Number of shares issued | ||||||||||||
Number of shares issued, value | ||||||||||||
Stock, issued during the period conversion | (2,500) | |||||||||||
Stock, issued during the period conversion, shares | $ (3) | |||||||||||
Series A convertible Preferred Stock [Member] | ||||||||||||
Preferred stock authorized | 2,500 | 2,500 | ||||||||||
Preferred stock, par value | $ 1,000 | $ 1,000 | $ 1,000 | |||||||||
Conversion price | $ 0.75 | |||||||||||
Preferred stock, shares issued | 0 | 0 | ||||||||||
Preferred stock, shares outstanding | 0 | 0 | ||||||||||
Red Dot Development, LLC [Member] | ||||||||||||
Number of shares returned | 20,000,000 | |||||||||||
Number of shares returned, value | $ 20,000 | |||||||||||
Note Payable [Member] | ||||||||||||
Stock, issued during the period conversion | 500,000 | |||||||||||
Stock, issued during the period conversion, shares | $ 250,000 | |||||||||||
Sales Agreement [Member] | THC Park [Member] | ||||||||||||
Number of shares issued | 66,667 | |||||||||||
Number of shares issued, value | $ 50,000 | |||||||||||
Stock Exchange Agreement [Member] | HCMC [Member] | ||||||||||||
Number of shares issued | 85,714 | |||||||||||
Securities Purchase Agreement [Member] | ||||||||||||
Number of shares issued | 2,500 | |||||||||||
Number of shares issued, value | $ 2,500,000 | |||||||||||
Shares issued price per share | $ 1,000 | |||||||||||
Securities Purchase Agreement [Member] | Series A convertible Preferred Stock [Member] | ||||||||||||
Preferred stock, par value | $ 1,000 | |||||||||||
Stock, issued during the period conversion | 2,500 | |||||||||||
15 Persons [Member] | ||||||||||||
Number of shares issued for services | 1,645,636 | |||||||||||
Value of stock issued for services | $ 796,229 | |||||||||||
20 Investors [Member] | ||||||||||||
Number of shares issued | 12,330,000 | |||||||||||
Number of shares issued, value | $ 6,175,000 | |||||||||||
Seller [Member] | Purchase Agreement [Member] | ||||||||||||
Number of shares issued | 29,070 | |||||||||||
Accredited Investor [Member] | ||||||||||||
Number of shares issued for services | 44,781 | |||||||||||
Value of stock issued for services | $ 59,990 | |||||||||||
Accredited Investor [Member] | Series A convertible Preferred Stock [Member] | ||||||||||||
Number of shares issued | 3,333,333 | |||||||||||
Accredited Investor [Member] | Joint Venture Agreement [Member] | ||||||||||||
Number of shares issued | 250,000 | |||||||||||
43 Investsor [Member] | ||||||||||||
Number of shares issued | 4,475,841 | |||||||||||
Proceeds from sale of common stock | $ 3,121,001 | |||||||||||
Holder [Member] | Series A convertible Preferred Stock [Member] | ||||||||||||
Ownership percentage | 4.99% | |||||||||||
Debt conversion, description | We are prohibited from effecting a conversion of the Series A Preferred Stock to the extent that, after giving effect to the conversion, the holder (together with such holder's affiliates and any persons acting as a group with holder or any of such holder's affiliates) would beneficially own in excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion. A holder, upon notice to us, may increase or decrease this beneficial ownership limitation; provided, that, in no event can the holder increase the beneficial ownership limitation in excess of 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon the conversion of the Series A Preferred Stock then held by holder. |
Basic and Diluted Earnings (L_2
Basic and Diluted Earnings (Loss) Per Common Share (Details Narrative) | 12 Months Ended |
Dec. 31, 2019shares | |
Earnings Per Share [Abstract] | |
Anti-dilute purchase of common stock not inculded in diluted loss per share | 1,243,000 |
Stock Based Compensation (Detai
Stock Based Compensation (Details Narrative) - $ / shares | Jun. 22, 2018 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Warrants to purchase common stock | 166,665 | |||
Warrants expiration, description | July 2019 and October 2019 | |||
Warrants outstanding | 1,233,000 | 166,665 | ||
Options outstanding | 10,000 | 10,000 | ||
Warrant [Member] | ||||
Warrants ,description | (a) each participant has the right to acquire additional shares of the Company's Common Stock equal to ten (10%) of the shares purchased in the offering (the "Warrants"); (b) one-half of the Warrants granted to each participant have an exercise price of $0.65 and the other one-half have an exercise price of $1.00, and (c) the Warrants shall be exercisable between June 5, 2019, the date of grant and June 4, 2021 the date of expiration of the Warrants. | |||
Corporate Advisory Agreement [Member] | ||||
Number of option granted, shares | 10,000 | |||
Option exercise price per | $ 1.20 | |||
Options term | 3 years |
Stock Based Compensation - Summ
Stock Based Compensation - Summary of Warrants and Options Issued, Exercised and Expired (Details) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Shares, Beginning Balance | 10,000 |
Shares, Ending Balance | 10,000 |
Warrants and Options [Member] | |
Shares, Beginning Balance | 176,665 |
Shares, Issued | 1,233,000 |
Shares, Exercised | |
Shares, Expired | 166,665 |
Shares, Ending Balance | 1,243,000 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 5.61 |
Weighted Average Exercise Price, Issued | $ / shares | 0.83 |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Expired | $ / shares | 5.87 |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 0.83 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 21.00% | |
Income taxes, description | The Act reduced the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. | |
Income taxes interest or penalties | ||
Operating loss carryforwards | $ 13,295,544 |
Income Taxes - Schedule of Pro
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Computed "expected" income tax benefit | $ (1,737,089) | $ (1,051,665) |
State income tax benefit, net of federal benefit | ||
Change in valuation allowance | 1,737,089 | 1,028,817 |
Other | 22,848 | |
Change in federal income tax rate | ||
IRC section 382 limitations on future NOL utilization | ||
Write-off of property & equipment deferred tax asset | ||
Provision for income taxes |
Income Taxes - Schedule of Com
Income Taxes - Schedule of Components of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Federal and state NOL carryforward | $ 2,656,993 | $ 919,904 |
Property and equipment | 25,819 | |
Reserves and accruals | 3,619 | |
Other intangibles | 63,000 | 47,302 |
Deferred expenses | 100,116 | 213,371 |
Deferred rent | 42,846 | |
Capitalized start-up expense | ||
Deferred tax assets | 2,820,109 | 1,252,861 |
Less: Valuation allowance | (2,820,109) | (1,252,861) |
Net deferred tax assets |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jul. 15, 2019 | Jun. 07, 2019 | Feb. 01, 2019 | Oct. 17, 2018 |
Convertible Promissory Note [Member] | ||||
Debt interest rate | 1.00% | |||
Convertible Promissory Note [Member] | Restricted Stock [Member] | ||||
Restricted common stock, shares | 500,000 | |||
Convertible Promissory Note [Member] | Roger Bloss [Member] | ||||
Debt instrument principal value | $ 250,000 | |||
Debt interest rate | 5.00% | |||
Short Term Promissory Note [Member] | Roll On, LLC [Member] | ||||
Debt instrument principal value | $ 101,000 | |||
Debt interest rate | 0.00% | |||
Short Term Promissory Note [Member] | Roll On, LLC [Member] | Chief Cultivation Officer and Director [Member] | ||||
Debt instrument principal value | $ 101,000 | |||
Interest payable |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Dec. 08, 2020 | Oct. 01, 2020 | Sep. 15, 2020 | Sep. 01, 2020 | Aug. 25, 2020 | Aug. 10, 2020 | Jul. 22, 2020 | Mar. 31, 2020 | Mar. 02, 2020 | Feb. 20, 2020 | Feb. 11, 2020 | Dec. 06, 2019 | Oct. 15, 2018 | Apr. 16, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 06, 2020 | Oct. 13, 2020 | Jun. 11, 2020 | Feb. 19, 2020 |
Debt instrument, maturity date | Jun. 6, 2020 | |||||||||||||||||||
Stock issued during period value of common stock | $ 5,565,000 | $ 3,121,001 | ||||||||||||||||||
Investor funded on purchase amount | $ 6,165,000 | |||||||||||||||||||
Common stock | 65,436,449 | 70,894,146 | ||||||||||||||||||
Terrence M. Tierney [Member] | Employment Agreement [Member] | ||||||||||||||||||||
Stock issued for service, shares | 500,000 | |||||||||||||||||||
Investor funded on purchase amount | $ 50,000,000 | |||||||||||||||||||
Salary to officer | $ 10,000 | |||||||||||||||||||
Accredited Investor [Member] | ||||||||||||||||||||
Stock issued for service, shares | 44,781 | |||||||||||||||||||
Subsequent Event [Member] | Membership Interest Purchase Agreement [Member] | ||||||||||||||||||||
Purchase payments due | $ 261,533 | |||||||||||||||||||
Subsequent Event [Member] | First Amendment [Member] | Red Earth LLC [Member] | ||||||||||||||||||||
Debt instrument face amount | $ 240,000 | |||||||||||||||||||
Subsequent Event [Member] | Revenue Participation Rights Agreement [Member] | ||||||||||||||||||||
Debt instrument, maturity date | Apr. 30, 2027 | |||||||||||||||||||
Exit fees payable | $ 26,000 | |||||||||||||||||||
Subsequent Event [Member] | Alternative Hospitality, Inc [Member] | Short Term Promissory Note [Member] | Pyrros One, LLC [Member] | ||||||||||||||||||||
Debt instrument face amount | $ 110,405 | |||||||||||||||||||
Debt instrument, maturity date | Feb. 19, 2021 | |||||||||||||||||||
Debt instrument interest rate during period | 9.00% | |||||||||||||||||||
Debt instrument interest payment | $ 825 | |||||||||||||||||||
Debt instrument, interest rate terms | The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $825 due on or before the twentieth day of each month commencing on April 20, 2020. | |||||||||||||||||||
Debt instrument interest and principal reduction payment | $ 1,233 | |||||||||||||||||||
Debt instrument, payment terms | The Borrower was required to make an interest and principal reduction payment in the amount of $1,233 on or before March 20, 2020. | |||||||||||||||||||
Debt instrument, description | The Holder is granted a security interest in that certain real property located at 1300 S. Jones Blvd, Las Vegas, NV 89146, which is owned by the Borrower. | |||||||||||||||||||
Subsequent Event [Member] | Condo Highrise Management, LLC [Member] | Short Term Promissory Note [Member] | Pyrros One, LLC [Member] | ||||||||||||||||||||
Debt instrument face amount | $ 90,000 | |||||||||||||||||||
Debt instrument, maturity date | Mar. 30, 2021 | |||||||||||||||||||
Debt instrument interest rate during period | 9.00% | |||||||||||||||||||
Debt instrument interest payment | $ 675 | |||||||||||||||||||
Debt instrument, interest rate terms | The Note shall bear interest at a rate of 9% per annum with interest-only payments in the amount of $675 due on or before the first day of each month commencing on May 1, 2020. | |||||||||||||||||||
Debt instrument, description | The Holder is granted a security interest in that certain real property located at 4295 Hwy 343, Amargosa, NV 89020, which is owned by the Borrower. | |||||||||||||||||||
Subsequent Event [Member] | Paris Balaouras [Member] | Employment Agreement [Member] | ||||||||||||||||||||
Salary to officer | $ 105,000 | |||||||||||||||||||
Annual discretionary bonus percentage | 100.00% | |||||||||||||||||||
Employment agreement description | On September 1, 2020, the Company entered into an Employment Agreement (the "Agreement") with Paris Balaouras (the "Employee"). Under the terms of the Agreement, the Employee shall serve as the Company's Chief Cultivation Officer for a term of three (3) years (the "Term") commencing on September 15, 2020. The Employee shall receive a base salary of $105,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the board of directors of the Company in its sole discretion, in amount equal to up to 100% of Employee's base salary for the then current fiscal year, shall be eligible to receive an annual discretionary stock grant during the Term which shall be vested in equal increments of 1/3rd each over a three year period beginning on the first anniversary of employment, shall be eligible to receive a compensatory stock grant of 667,000 shares for and in consideration of past compensation (approximately $500,000 over the past 2.5 years) foregone by Employee; such grant exercisable at Employee's option as such time as Employer is profitable at the NOI level on a trailing twelve (12) month basis or upon other commercial reasonable terms as the Board may determine and shall be awarded options to purchase 500,000 shares of the Company's common stock, exercisable at a price of $.75 per share. | |||||||||||||||||||
Stock reserved for future issuance | 667,000 | |||||||||||||||||||
Consideration of past compensation | $ 500,000 | |||||||||||||||||||
Stock awarded options to purchase | 500,000 | |||||||||||||||||||
Stock option exercisable price | $ .75 | |||||||||||||||||||
Subsequent Event [Member] | Roger Bloss [Member] | Employment Agreement [Member] | ||||||||||||||||||||
Salary to officer | $ 105,000 | |||||||||||||||||||
Annual discretionary bonus percentage | 100.00% | |||||||||||||||||||
Employment agreement description | On September 1, 2020, the Company entered into an Employment Agreement (the "Agreement") with Roger Bloss. Under the terms of the Agreement, the Employee shall serve as the Company's Interim Chief Executive Officer for a term of six (6) months and the Chief Executive Officer and for an additional two (2) years and six (6) months as the Chief Executive Officer for a total of three (3) years (the "Term".) commencing on September 15, 2020. The Employee shall receive a base salary of $105,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the board of directors of the Company in its sole discretion, in amount equal to up to 100% of Employee's base salary for the then current fiscal year, shall be eligible to receive an annual discretionary stock grant during the Term which shall be vested in equal increments of 1/3rd each over a three year period beginning on the first anniversary of employment and shall be awarded options to purchase 500,000 shares of the Company's common stock, exercisable at a price of $.75 per share. | |||||||||||||||||||
Stock awarded options to purchase | 500,000 | |||||||||||||||||||
Stock option exercisable price | $ 0.75 | |||||||||||||||||||
Subsequent Event [Member] | Bernard Moyle [Member] | Employment Agreement [Member] | ||||||||||||||||||||
Salary to officer | $ 60,000 | |||||||||||||||||||
Annual discretionary bonus percentage | 200.00% | |||||||||||||||||||
Employment agreement description | On September 1, 2020, the Company entered into an Employment Agreement (the "Agreement") with Bernard Moyle. Under the terms of the Agreement, the Employee shall serve as the Company's Secretary/Treasurer for a term of three (3) years (the "Term") commencing on September 15, 2020. The Employee shall receive a base salary of $60,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the board of directors of the Company in its sole discretion, in amount equal to up to 200% of Employee's base salary for the then current fiscal year, shall, at commencement of the Term receive a grant of stock of 500,000 shares and shall be eligible to receive an annual discretionary stock grant during the Term which shall be vested in equal increments of 1/3rd each over a three year period beginning on the first anniversary of employment and shall be awarded options to purchase 500,000 shares of the Company's common stock, exercisable at a price of $.75 per share. | |||||||||||||||||||
Stock awarded options to purchase | 500,000 | |||||||||||||||||||
Stock option exercisable price | $ 0.75 | |||||||||||||||||||
Subsequent Event [Member] | Jim Kelly [Member] | Employment Agreement [Member] | ||||||||||||||||||||
Stock restricted shares of common stock | 500,000 | |||||||||||||||||||
Salary to officer | $ 24,000 | |||||||||||||||||||
Annual discretionary bonus percentage | 400.00% | |||||||||||||||||||
Employment agreement description | On October 1, 2020, the Company entered into an Employment Agreement (the "Agreement") with Jim Kelly. The Agreement became effective as of October 1, 2020. Under the terms of the Agreement, the Employee shall serve as the Company's Interim Chief Financial Officer for a term of (i) the sooner of six (6) months, or (ii) the completion of all regulatory filings, including but not limited to the Company's 2019 Annual Report on Form 10-K, the March 31, 2020 Quarterly Report on Form 10-Q, the June 30, 2020 Quarterly Report on Form 10-Q, the September 30, 2020 Quarterly Report on Form 10-Q and all required Current Reports on Form 8-K, with the Securities and Exchange Commission ("SEC") to bring the Company current with the SEC. The Employee shall receive a base salary of $24,000 annually, shall be eligible to receive an annual discretionary bonus during the Term, based on performance criteria determined by the C-Suite of the Company in its sole discretion, in an amount equal to up to 400% of the Employee's base salary for the then current fiscal year, and at commencement of the Term the Employee shall receive a grant of stock of 500,000 restricted shares of the Company's common stock. | |||||||||||||||||||
Subsequent Event [Member] | Terrence M. Tierney [Member] | ||||||||||||||||||||
Stock issued during period shares of common stock | 250,000 | |||||||||||||||||||
Subsequent Event [Member] | Mr. Ruhe [Member] | Board Of Directors [Member] | ||||||||||||||||||||
Options forfeitures in period | 11,709 | |||||||||||||||||||
Subsequent Event [Member] | John R. Wheeler [Member] | ||||||||||||||||||||
Stock issued for service, shares | 31,251 | |||||||||||||||||||
Subsequent Event [Member] | Roger Bloss [Member] | ||||||||||||||||||||
Stock issued for service, shares | 18,562 | |||||||||||||||||||
Subsequent Event [Member] | Accredited Investor [Member] | ||||||||||||||||||||
Stock issued for service, shares | 20,000 | |||||||||||||||||||
Subsequent Event [Member] | Doug Brown [Member] | Purchase Agreement [Member] | ||||||||||||||||||||
Stock issued during period shares of common stock | 4,500,000 | |||||||||||||||||||
Stock issued during period value of common stock | $ 400,000 | |||||||||||||||||||
Subsequent event description | Under the terms of the Agreement, the Investor agreed to purchase 4,500,000 shares of the Company's common stock at $0.088808889 per share for a total purchase price of $400,000. The Investor was also issued a warrant granting the Investor the right to acquire 1,000,000 shares of the Company's common stock at an exercise price of $0.10. The warrant is dated August 3, 2020 and has a term of three years. | |||||||||||||||||||
Common stock price per shares | $ 0.088808889 | |||||||||||||||||||
Warrant Issued | 1,000,000 | |||||||||||||||||||
Exercise price | $ 0.10 | |||||||||||||||||||
Class of warrant or righst date | Aug. 3, 2020 | |||||||||||||||||||
Warrant term | 3 years | |||||||||||||||||||
Investor funded on purchase amount | $ 250,000 | |||||||||||||||||||
Common stock | 0 | |||||||||||||||||||
Subsequent Event [Member] | David Brown [Member] | Purchase Agreement [Member] | ||||||||||||||||||||
Repayment of investor funded amount | $ 125,465 | |||||||||||||||||||
Investment | $ 124,535 | |||||||||||||||||||
Stock restricted shares of common stock | 1,402,279 | |||||||||||||||||||
Warrants to purchase | 250,000 | |||||||||||||||||||
Subsequent Event [Member] | Sylios Corp [Member] | Consulting Agreement [Member] | ||||||||||||||||||||
Subsequent event description | Under the terms of the Agreement, the Consultant shall prepare the Company's filings with the Securities and Exchange Commission (the "SEC") including its Annual report on Form 10-K and Quarterly Reports on Form 10-Q. The Consultant shall receive $20,000 in cash compensation plus 100,000 shares of the Company's common stock. The Agreement has a term of six (6) months or until the Company's Quarterly report for the period ended September 30, 2020 is filed with the SEC. | |||||||||||||||||||
Warrant term | 6 months | |||||||||||||||||||
Consultant fees | $ 20,000 | |||||||||||||||||||
Common stock | 100,000 | |||||||||||||||||||
Subsequent Event [Member] | Chief Cultivation Officer [Member] | Paris Balaouras [Member] | Employment Agreement [Member] | ||||||||||||||||||||
Term of employment agreement | 3 years | |||||||||||||||||||
Subsequent Event [Member] | Chief Executive Officer [Member] | Roger Bloss [Member] | Employment Agreement [Member] | ||||||||||||||||||||
Term of employment agreement | 3 years | |||||||||||||||||||
Subsequent Event [Member] | Secretary or Treasurer [Member] | Bernard Moyle [Member] | Employment Agreement [Member] | ||||||||||||||||||||
Term of employment agreement | 3 years | |||||||||||||||||||
Subsequent Event [Member] | Messrs. Bloss, Dear and Balaouras [Member] | Board of Directors Services Agreement [Member] | ||||||||||||||||||||
Stock issued during period shares of common stock | 15,000 | |||||||||||||||||||
Stock issued during period value of common stock | $ 15,000 | |||||||||||||||||||
Subsequent Event [Member] | Chief Financial Officer [Member] | Jim Kelly [Member] | Employment Agreement [Member] | ||||||||||||||||||||
Debt instrument, description | The Agreement became effective as of October 1, 2020. Under the terms of the Agreement, the Employee shall serve as the Company's Interim Chief Financial Officer for a term of (i) the sooner of six (6) months, or (ii) the completion of all regulatory filings, including but not limited to the Company's 2019 Annual Report on Form 10-K, the March 31, 2020 Quarterly Report on Form 10-Q, the June 30, 2020 Quarterly Report on Form 10-Q, the September 30, 2020 Quarterly Report on Form 10-Q and all required Current Reports on Form 8-K, with the Securities and Exchange Commission ("SEC") to bring the Company current with the SEC. | |||||||||||||||||||
Subsequent Event [Member] | Former President and Secretary [Member] | ||||||||||||||||||||
Debt instrument face amount | $ 501,085 | $ 501,085 |