Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Feb. 14, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | REDWOOD GREEN CORP. | |
Entity Central Index Key | 0001533030 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 106,216,708 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 4,702,902 | $ 197,962 |
Prepaid expenses | 143,651 | |
Assets held for sale | 48,238 | |
Total current assets | 4,846,553 | 246,200 |
Property and equipment, net | 1,974,522 | 0 |
Goodwill | 5,855,749 | |
Intangible assets, net | 2,876,591 | |
Deposits | 8,687 | |
Right of use asset, net | 1,345,621 | |
Assets held for sale | 457,361 | |
Total assets | 16,907,723 | 703,561 |
Current liabilities: | ||
Accounts payable | 74,058 | 23,323 |
Taxes payable | 90,305 | |
Notes payable, related parties | 308,300 | |
Due to related party | 7,500 | 7,846 |
Right of use liability, current portion | 446,451 | |
Liabilities held for sale | 25,860 | |
Total current liabilities | 926,614 | 57,029 |
Right of use liability | 898,970 | |
Total liabilities | 1,825,584 | 57,029 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 100,000 shares authorized, no shares issued and outstanding respectively | ||
Common stock, $0.001 par value, 500,000,000 shares authorized, 106,216,708 shares and 76,400,016 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 106,216 | 76,400 |
Additional paid-in capital | 16,246,645 | 1,425,885 |
Accumulated deficit | (2,453,209) | (840,656) |
Accumulated other comprehensive loss | (15,097) | |
Stockholders' Equity Attributable to Parent, Total | 13,899,652 | 646,532 |
Non-controlling interests in consolidated Variable Interest Entity | 1,182,487 | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 15,082,139 | 646,532 |
Total liabilities and stockholders' equity | $ 16,907,723 | $ 703,561 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Preferred Stock, Par Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 100,000 | 100,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares, Issued | 106,216,708 | 76,400,016 |
Common Stock, Shares, Outstanding | 106,216,708 | 76,400,016 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net sales | $ 1,605,476 | $ 1,605,476 | $ 0 | |
Cost of goods sold, net of depreciation and amortization | 981,890 | 981,890 | ||
Gross profit | 623,586 | 623,586 | ||
Operating expenses: | ||||
Personnel costs | 407,532 | 407,532 | ||
Sales and marketing | 169,854 | 169,854 | ||
General and administrative | 2,844 | $ 125,772 | 272,705 | 195,428 |
Legal and professional fees | 751,675 | 751,674 | ||
Depreciation and amortization | 10,593 | 10,593 | ||
Research and development | 477,585 | 477,585 | ||
Total operating expenses | 1,820,083 | 125,772 | 2,089,943 | 195,428 |
Loss from operations | (1,196,497) | (125,772) | (1,466,357) | (195,428) |
Other (expense): | ||||
Interest expense | (12,715) | (12,715) | (38,872) | |
Gain (loss) on foreign exchange | (128) | (430) | 347 | |
Total other expenses | (12,715) | (128) | (13,145) | (38,525) |
Net loss from continuing operations, before taxes | (1,209,212) | (125,900) | (1,479,502) | (233,953) |
Income taxes | (90,305) | 0 | (90,305) | 0 |
Net loss from continuing operations | (1,299,517) | (125,900) | (1,569,807) | (233,953) |
Net loss from discontinued operations, net of tax | (31,533) | (22,279) | (59,162) | |
Net loss | (1,299,517) | (157,433) | (1,592,086) | (293,115) |
Comprehensive loss from discontinued operations | (967) | (5,370) | (4,938) | |
Comprehensive loss | $ (1,299,517) | $ (158,400) | $ (1,597,456) | $ (298,053) |
Net loss per common share: | ||||
Loss from continuing operations - basic and diluted (in dollars pre share) | $ (0.01) | $ 0 | $ (0.02) | $ 0 |
Loss from discontinued operations - basic and diluted (in dollars per share) | 0 | 0 | 0 | 0 |
Loss per common share - basic and diluted (in dollars per share) | $ (0.01) | $ 0 | $ (0.02) | $ 0 |
Weighted average common shares outstanding - basic and diluted (in shares) | 100,363,796 | 76,400,016 | 84,627,790 | 73,355,327 |
CONDENSED STATEMENTS OF STOCKHO
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Common Stock to be Issued [Member] | Accumulated Deficit [Member] | Noncontrolling Interest [Member] | Accumulated Other Comprehensive Income [Member] | Total |
Beginning balance at Dec. 31, 2017 | $ 69,520 | $ 166,609 | $ (413,199) | $ (177,070) | |||
Beginning Balance (shares) at Dec. 31, 2017 | 69,520,016 | ||||||
Common stock issued pursuant to private placement, net of issuance costs | $ 4,000 | 496,000 | 500,000 | ||||
Common stock issued pursuant to private placement, net of issuance costs (in shares) | 4,000,000 | ||||||
Gain on forgiveness of shareholder loan | 46,156 | 46,156 | |||||
Net loss | (50,047) | (50,047) | |||||
Ending balance at Mar. 31, 2018 | $ 73,520 | 708,765 | (463,246) | 319,039 | |||
Ending Balance (shares) at Mar. 31, 2018 | 73,520,016 | ||||||
Beginning balance at Dec. 31, 2017 | $ 69,520 | 166,609 | (413,199) | (177,070) | |||
Beginning Balance (shares) at Dec. 31, 2017 | 69,520,016 | ||||||
Net loss | (298,053) | ||||||
Ending balance at Sep. 30, 2018 | $ 76,400 | 1,425,885 | (706,314) | $ (4,938) | 791,033 | ||
Ending Balance (shares) at Sep. 30, 2018 | 79,400,016 | ||||||
Beginning balance at Mar. 31, 2018 | $ 73,520 | 708,765 | (463,246) | 319,039 | |||
Beginning Balance (shares) at Mar. 31, 2018 | 73,520,016 | ||||||
Common stock to be issued pursuant to private placement | $ 465,000 | 465,000 | |||||
Net loss | (85,634) | (3,971) | (89,605) | ||||
Ending balance at Jun. 30, 2018 | $ 73,520 | 708,765 | 465,000 | (548,880) | (3,971) | 694,434 | |
Ending Balance (shares) at Jun. 30, 2018 | 73,520,016 | ||||||
Common stock issued pursuant to private placement, net of issuance costs | $ 2,880 | 717,120 | (465,000) | 255,000 | |||
Common stock issued pursuant to private placement, net of issuance costs (in shares) | 2,880,000 | ||||||
Net loss | (157,434) | (967) | (158,400) | ||||
Ending balance at Sep. 30, 2018 | $ 76,400 | 1,425,885 | (706,314) | (4,938) | 791,033 | ||
Ending Balance (shares) at Sep. 30, 2018 | 79,400,016 | ||||||
Beginning balance at Dec. 31, 2018 | $ 76,400 | 1,425,885 | (840,656) | (15,097) | 646,532 | ||
Beginning Balance (shares) at Dec. 31, 2018 | 76,400,016 | ||||||
Net loss | (71,338) | (454) | (70,884) | ||||
Ending balance at Mar. 31, 2019 | $ 76,400 | 1,425,885 | (911,994) | (14,643) | 575,648 | ||
Ending Balance (shares) at Mar. 31, 2019 | 76,400,016 | ||||||
Beginning balance at Dec. 31, 2018 | $ 76,400 | 1,425,885 | (840,656) | (15,097) | 646,532 | ||
Beginning Balance (shares) at Dec. 31, 2018 | 76,400,016 | ||||||
Net loss | (1,597,456) | ||||||
Ending balance at Sep. 30, 2019 | $ 106,216 | 16,246,645 | (2,453,209) | $ 1,182,487 | 15,082,139 | ||
Ending Balance (shares) at Sep. 30, 2019 | 106,216,708 | ||||||
Beginning balance at Mar. 31, 2019 | $ 76,400 | 1,425,885 | (911,994) | (14,643) | 575,648 | ||
Beginning Balance (shares) at Mar. 31, 2019 | 76,400,016 | ||||||
Common stock issued pursuant to private placement, net of issuance costs | $ 5,437 | 2,665,813 | 2,671,250 | ||||
Common stock issued pursuant to private placement, net of issuance costs (in shares) | 5,437,000 | ||||||
Common stock to be issued pursuant to private placement | 438,400 | 438,400 | |||||
Net loss | (221,231) | (5,824) | (227,055) | ||||
Ending balance at Jun. 30, 2019 | $ 81,837 | 4,091,698 | 438,400 | (1,133,225) | (20,467) | 3,458,243 | |
Ending Balance (shares) at Jun. 30, 2019 | 81,837,016 | ||||||
Common stock issued pursuant to private placement, net of issuance costs | $ 8,888 | 4,424,594 | $ (438,400) | $ 3,995,082 | |||
Common stock issued pursuant to private placement, net of issuance costs (in shares) | 8,888,005 | ||||||
Common stock issued in connection with business combination | $ 13,553 | 6,763,064 | |||||
Common stock issued in connection with business combination (shares) | 13,553,233 | 6,776,617 | |||||
Common stock issued pursuant to advisory agreements | $ 790 | 394,210 | |||||
Common stock issued pursuant to advisory agreements (shares) | 790,000 | 395,000 | |||||
Common stock issued in connection with conversion of debt and accounts payable | $ 1,148 | 573,079 | $ 574,227 | ||||
Common stock issued in connection with conversion of debt and accounts payable (shares) | 1,148,454 | ||||||
Consolidation of variable interest entity | 1,182,487 | 1,182,487 | |||||
Deconsolidation of former subsidiary | (20,467) | $ 20,467 | |||||
Net loss | (1,299,517) | (1,299,517) | |||||
Ending balance at Sep. 30, 2019 | $ 106,216 | $ 16,246,645 | $ (2,453,209) | $ 1,182,487 | $ 15,082,139 | ||
Ending Balance (shares) at Sep. 30, 2019 | 106,216,708 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (1,592,086) | $ (293,115) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 10,593 | |
Depreciation and amortization - cost of goods sold | 53,188 | |
Fair value of common stock issued pursuant to advisory agreements | 395,000 | |
Research and development expense pursuant to asset acquisition | 477,585 | |
Income taxes | 90,305 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses | (143,651) | |
Accounts payable | 115,549 | (53,459) |
Due to related party | (346) | (61) |
Net cash used in operating activities from continuing operations | (593,863) | (346,635) |
Net cash used in operating activities from discontinued operations | (13,159) | (2,566) |
Net cash used in operating activities | (607,022) | (349,201) |
Cash flows from investing activities: | ||
Payments for CMI business combination, net of cash acquired | (1,863,117) | |
Cash acquired as part of General Extract asset acquisition | 4,506 | |
Purchase of property and equipment | (43,258) | |
Deposits | 3,661 | |
Net cash used in investing activities from continuing operations | (1,898,208) | |
Net cash used in investing activities from discontinued operations | (554,748) | |
Net cash used in investing activities | (1,898,208) | (554,748) |
Cash flows from financing activities: | ||
Proceeds from sale of common stock pursuant to private placement, net of issuance costs | 7,104,732 | 1,220,000 |
Repayments of notes payable | (100,000) | |
Net cash provided by financing activities from continuing operations | 7,004,732 | 1,220,000 |
Net cash provided by financing activities from discontinued operations | 0 | 0 |
Net cash provided by financing activities | 7,004,732 | 1,220,000 |
Net increase in cash from continuing operations | 4,512,661 | 873,365 |
Net (decrease) in cash from discontinued operations | (13,159) | (557,314) |
Effect of exchange rate changes on cash | (3,914) | (1,614) |
Cash at beginning of period, continuing operations | 197,962 | 107 |
Cash at beginning of period, discontinued operations | 9,351 | 0 |
Cash at end of period | 4,702,902 | 314,544 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 0 | 0 |
Cash paid for interest | 12,715 | $ 38,872 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Common stock issued in connection with conversion of debt | 503,475 | |
Common stock issued in connection with conversion of accounts payable | 70,752 | |
Disposal of First Colombia Devco S.A.S. | 20,467 | |
Consolidation of variable interest entity | 1,182,487 | |
Equity issued pursuant to CMI Transaction | $ 6,776,617 |
Nature of the Business and Basi
Nature of the Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Nature of Business and Basis of Presentation [Abstract] | |
Nature of the Business [Text Block] | 1. Nature of the Business AFC Building Technologies Inc. was incorporated under the laws of the State of Nevada on May 10, 2011. Effective April 26, 2018, the Company changed its name from AFC Building Technologies Inc. to First Colombia Development Corp (“FCDC”) effective September 18, 2019. Subsequently, FCDC changed its name to Redwood Green Corp, (“Redwood” or the “Company”). The Company operates as one segment from its corporate headquarters located in Denver, Colorado. On May 10, 2018, the Company acquired all the issued and outstanding share capital of First Colombia Devco S.A.S. (“Devco”) a Colombian company, and began to establish various business ventures in Colombia in the agriculture and real estate development, tourism, and infrastructure sectors before commencing to phase them out in April 2019. On July 1, 2019, the Company acquired 100% of the membership interests in General Extract, LLC (“General Extract” or the “Seller”), a Colorado limited liability company. General Extract was founded in 2015 as an importer, distributor, broker and postprocessor of hemp and hemp derivatives. The Company acquired all of the issued and outstanding membership interests, including business plans and access to contacts. In consideration of the sale and transfer of the membership interests, the Company delivered 299,170 shares of First Colomia Devco (see Note 5). On July 15, 2019, the Company, through its wholly owned subsidiary Good Acquisition Co., entered into a Membership Interest Purchase Agreement to acquire cannabis brands and other assets of Critical Mass Industries LLC DBA Good Meds (“CMI”), a Colorado limited liability company. CMI is licensed by the Marijuana Enforcement Division of Colorado Department of Revenue to produce cannabis and cannabis products under its six licenses. These licenses allow for cultivation, manufacturing of infused products and retail distribution. At the time, Colorado law prohibited public companies, including the Company, from owning cannabis licenses. Therefore, CMI spun off assets acquired by the Company into two new entities, Good Holdco, LLC (“Holdco”) and Good IPCo, LLC (“IPCo). Under the terms of the Membership Interest Purchase Agreement, CMI retained the cannabis license, inventory and accounts receivable (the ”Cannabis License Assets”) and will continue to operate the cannabis business related to the brands under certain agreements entered into with from the Company, which requires that CMI pay royalties and related fees until Colorado law will permit public ownership of cannabis licenses. In consideration for the transfer of the acquired assets, the Company delivered 13,553,233 shares of the Company common stock, in addition to $1,999,770 in cash to CMI. An additional 1,500,000 shares of Redwood common stock were held and retained by the Company until the Cannabis License Assets can be purchased (see Note 4). Going Concern In accordance with Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40) Based on its current operating plan, the Company expects that its cash on hand will not be sufficient to fund its operating expense requirements for at least 12 months from the issuance date of these interim condensed consolidated financial statements. Based on this, the Company has determined that there is a substantial doubt about the Company’s ability to continue as a going concern. The future viability of the Company is dependent on its ability to raise additional capital to finance its operations. Although the Company has been successful in raising capital in the past, there is no assurance that it will be successful in obtaining such additional financing on terms acceptable to the Company, if at all. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies [Text Block] | 2. Summary of Significant Accounting Policies Basis of Presentation The unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the Securities and Exchange Commission ("SEC") for interim reporting. Accordingly, they do not include certain footnotes and financial presentations normally required under accounting principles generally accepted in the United States of America for complete financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial position and the results of operations and cash flows. The results for the three and nine-month period ended September 30, 2019 are not necessarily indicative of the results to be expected for any subsequent period or the entire year ending December 31, 2019. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s annual audited financial statements and notes thereto for the year ended December 31, 2018, included in the Company’s Form 10-K filed on May 24, 2019 with the SEC. Principles of Consolidation The condensed consolidated financial statements include the accounts of Redwood and its subsidiaries in which a controlling voting interest is maintained or variable interest entities ("VIEs") in which the Company has determined it is the primary beneficiary. The Company consolidates CMI as a VIE (see Note 6). All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these financial statements include, but are not limited to the collectability of accounts receivables, valuation of inventory, fair value of stock-based compensation, determining the fair value of the assets acquired and liabilities assumed in acquisition, determining the useful lives and potential impairment of long-lived assets and potential impairment of goodwill. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. Reclassifications Certain items in the interim condensed consolidated financial statements were reclassified from prior periods for presentation purposes. Fair Value Measurements Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying values reported in the consolidated balance sheets for cash, accounts receivable, accounts payable and notes payable approximate fair values because of the immediate or short-term maturities of these financial instruments. There were no other assets or liabilities that require fair value to be recalculated on a recurring basis. Cost of Goods Sold Cost of goods sold includes the costs directly attributable to production of inventory such as cultivation costs, extraction costs, packaging costs, security, and allocated overhead. Overhead expenses include allocations of rent, administrative salaries, utilities, and related costs. Property, Plant and Equipment Purchase of property, plant and equipment are recorded at cost. Improvements and replacements of property, plant and equipment are capitalized. Maintenance and repairs that do not improve or extend the lives of property and equipment are charged to expense as incurred. When assets are sold or retired, their cost and related accumulated depreciation are removed from the accounts and any gain or loss is reported in the consolidated statements of operations. Depreciation and amortization expense is recognized using the straight- line method over the estimated useful life of each asset, as follows: Estimated Useful Life Computer equipment 3 - 5 years Furniture and fixtures 5 - 7 years Machinery and equipment 5 - 8 years Leasehold improvements Shorter of lease term or 15 years Goodwill and Intangible Assets Goodwill represents the excess of the purchase price of an acquired entity over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. Intangible assets with finite lives are recorded at their estimated fair value at the date of acquisition and are amortized over their estimated useful lives using the straight-line method. The estimated useful lives of intangible assets are as follows: Estimated Useful Life Customer relationships 7 years Trademark/trade name Indefinite Developed manufacturing process Indefinite Impairment of Long-Lived Assets and Indefinite-Lived Intangible Assets The Company reviews its long-lived assets (property and equipment and amortizable intangible assets) for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the expected cash flows, undiscounted, is less than the carrying amount of the asset, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its fair value. Goodwill Goodwill and identifiable intangible assets that have indefinite useful lives are not amortized, but instead are tested annually at December 31 for impairment and upon the occurrence of certain events or substantive changes in circumstances. The annual goodwill impairment test allows for the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. An entity may choose to perform the qualitative assessment on none, some or all of its reporting units or an entity may bypass the qualitative assessment for any reporting unit and proceed directly to step one of the quantitative impairment test. If it is determined, on the basis of qualitative factors, that the fair value of a reporting unit is, more likely than not, less than its carrying value, the quantitative impairment test is required. The quantitative impairment test calculates any goodwill impairment as the difference between the carrying amount of a reporting unit and its fair value, but not to exceed the carrying amount of goodwill. Indefinite-Lived Intangible Assets Indefinite-lived intangible assets established in connection with business combinations consist of trademarks and developed manufacturing processes. The impairment test for identifiable indefinite-lived intangible assets consists of a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. Business Combinations The Company accounts for acquisitions in which it obtains control of one or more businesses as a business combination. The purchase price of the acquired businesses is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over those fair values is recognized as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments, in the period in which they are determined, to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recognized in the consolidated statements of operations. Accounting for Asset Acquisitions In accordance with the guidance for business combinations, the Company determines whether a transaction or other event is a business combination, which requires that the assets acquired, and liabilities assumed constitute a business. Each business combination is then accounted for by applying the acquisition method. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. Stock-Based Compensation The Company may issue shares of common stock to consultants for services performed. The Company records an expense in the consolidated statements of operations utilizing the fair value of the Company’s common stock during the period the services are performed. Net Loss per Share Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive. There were no potentially dilutive items outstanding as of September 30, 2019 and 2018 and diluted net loss per share is the same as basic net loss per share for each period. Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-02, Leases |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition [Text Block] | 3. Revenue Recognition The Company adopted ASC Topic 606, Revenue from Contracts with Customers Under ASC 606, a performance obligation is a promise within a contract to transfer a distinct good or service, or a series of distinct goods and services, to a customer. Revenue is recognized when performance obligations are satisfied and the customer obtains control of promised goods or services, which is generally upon shipment of the goods and performance of the service. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for goods or services. Under the standard, a contract’s transaction price is allocated to each distinct performance obligation. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identifies the contracts with a customer; (ii) identifies the performance obligations within the contract, including whether they are distinct and capable of being distinct in the context of the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenue when, or as, the Company satisfies each performance obligation. The Company’s revenue consists of sales of cannabis and ancillary products to both retail consumers and wholesale customers through the consolidation of CMI as a VIE. Revenue for retail customers is recognized upon completion of the transaction in the point of sale system and satisfaction of the sale by providing the corresponding inventory at the retail location. Revenue for wholesale customers is recognized upon acceptance of the physical goods and confirmation by acceptance of the inventory in the regulatory marijuana enforcement tracking reporting compliance system. Revenue is recognized upon transfer of control of promised products to customers, generally as risk of loss pass, in an amount that reflects the consideration the Company expects to receive in exchange for those products. Taxes collected from customers, which are subsequently remitted to governmental authorities, are excluded from revenue. Retail customer loyalty liabilities are recognized in the period in which they are incurred and will often be retired without being utilized. Shipping and handling costs are expensed as incurred and are included in cost of sales, for the nine months ended September 30, 2019. Cannabis sales is a highly regulated environment in which state regulatory approval is required prior to the customer being able to purchase the product, either through the Colorado Marijuana Enforcement Division for wholesale clients or the Colorado Department of Public Health and Environment for medical patients. Disaggregated Revenue The following table provides revenue by type: Nine Months Ended September 30, 2019 2018 Medical retail $ 1,023,480 $ — Medical wholesale 200,250 — Recreational wholesale 381,746 — $ 1,605,476 $ — |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Business Combination [Text Block] | 4. Business Combination Effective July 15, 2019, the Company, acquired cannabis brands and other assets of CMI (the “CMI Transaction”). In consideration of the sale and transfer of the acquired assets, the Company delivered 13,553,233 shares of Redwood common stock, in addition to $1,999,770 in cash to CMI. The CMI Transaction was accounted for as a business combination in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations The Company has made a provisional allocation of the purchase price in regards to the CMI Transaction related to the assets acquired and the liabilities assumed as of the purchase date. The following table summarizes the provisional purchase price allocations relating to the CMI Transaction: Cash $ 1,999,770 Common Stock 6,776,617 Total Purchase Price $ 8,776,387 Weighted Average Useful Life Description Fair Value (in years) Assets acquired: Cash $ 136,654 Other current assets 74 Property and equipment, net 1,985,738 Intangible assets: Customer relationships 215,900 Indefinite Trademark/trade name 1,340,000 Indefinite Developed manufacturing process 1,330,000 7 Goodwill 5,855,747 Right of use asset 1,411,461 Deposits 12,348 Total assets acquired $ 12,287,922 Liabilities assumed: Notes payable $ 147,268 Notes payable, related parties 760,573 Right of use liability 1,411,460 Total liabilities assumed 2,319,301 Noncontrolling interests 1,192,234 Estimated fair value of net assets acquired $ 8,776,387 The Company has not completed the valuation studies necessary to finalize the acquisition fair values of the assets acquired and liabilities assumed and related allocation of purchase price of the CMI Transaction. Accordingly, the type and value of the intangible assets amounts set forth above are preliminary. Once the valuation process is finalized for the CMI Transaction, there could be changes to the reported values of the assets acquired and liabilities assumed, including goodwill and intangible assets and those changes could differ materially from what is presented above. Unaudited Pro Forma Financial Information The following unaudited pro forma financial information presents the Company’s financial results as if CMI Transaction had occurred as of January 1, 2018. The unaudited pro forma financial information is not necessarily indicative of what the financial results actually would have been had the acquisitions been completed on this date. In addition, the unaudited pro forma financial information is not indicative of, nor does it purport to project the Company’s future financial results. The following unaudited pro forma financial information includes incremental property and equipment depreciation and intangible asset amortization as a result of the acquisitions. The pro forma information does not give effect to any estimated and potential cost savings or other operating efficiencies that could result from the acquisitions: Nine Months Ended September 30, 2019 2018 Net sales $ 4,964,507 $ 4,977,445 Net loss $ (1,464,115 ) $ (655,242 ) Net loss per common share $ (0.01 ) $ (0.01 ) |
Asset Acquisition
Asset Acquisition | 9 Months Ended |
Sep. 30, 2019 | |
Asset Acquisition [Abstract] | |
Asset Acquisition | 5. Asset Acquisition On July 1, 2019, the Company entered into a Membership Interest Purchase Agreement (the “Membership Agreement”) to acquire General Extract. The Company acquired 100% of the membership interests of General Extract in exchange for 100% of the shares of Devco, a wholly owned subsidiary of the Company. The Company acquired all of the issued and outstanding membership interests, including business plans and access to contacts of General Extract. The Company evaluated the acquisition of the purchased assets under ASC 805 and ASU No. 2017-01. Topic 805, Business Combinations (“ASU 2017-01”) Cash $ 4,506 Research and development 477,585 Total assets acquired $ 482,091 The acquired research and development asset was deemed to have no alternative future use, thus, pursuant to ASC 730, Research and Development |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2019 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |
Variable Interest Entities [Text Block] | 6. Variable Interest Entities Pursuant to FASB ASC Section 810, Consolidation Under ASC 810, a reporting entity has a controlling financial interest in a VIE, and must consolidate that VIE, if the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support provided by any parties, including equity holders. The company consolidates CMI, as CMI did not receive capital contributions from its members that are sufficient to fund near-term, or long-term, anticipated expenditures of the Company. Additionally, there is not enough equity at risk to induce lenders or other investors to provide the funds necessary at market terms for the entity to conduct its activities. The Company is deemed the primary beneficiary of CMI. Accordingly, the results of CMI have been included in the accompanying condensed consolidated financial statements. The following assets and liabilities of CMI are included in the accompanying financial statements of the Company as of September 30, 2019: Assets and liabilities of the VIE September 30 Description 2019 Current assets $ 818,614 Non-current assets 750,000 Total assets 1,568,614 Current liabilities 386,127 Non-current liabilities — Total liabilities 386,127 Net assets 1,182,487 Operating Results of the VIE Results from July 15, 2019 through September 30, 2019 For the period of July 15, 2019 through September 30, Description 2019 Net Sales $ 1,605,476 Cost of goods sold 981,890 Gross profit $ 623,586 Operating expenses Personnel costs $ 112,028 Sales and marketing 164,629 General and administrative 77,375 Legal and professional fees 43,311 Depreciation and amortization 1,284 Bad debt recovery (1,200 ) Total operating expenses $ 397,427 Income from operations 226,159 Other (expense) Interest expense (12,715 ) Total other expenses $ (12,715 ) Net income $ 213,444 |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2019 | |
Cash, Including Discontinued Operations [Abstract] | |
Discontinued Operations [Text Block] | 7. Discontinued Operations In April 2019, the Company began to reposition itself into the cannabis industry. On July 1, 2019, the Company disposed of its Colombian subsidiary, Devco, in exchange for its acquisition of 100% of the membership units of General Extract. Devco’s net assets primarily consisted of approximately 13 hectares of undeveloped land. The operations of the Colombian business and land were accounted for as discontinued operations through the date of divestiture. The accompanying condensed consolidated balance sheets include the following carrying amounts of assets and liabilities related to these discontinued operations: September 30, July 1, December 31, 2019 2019* 2018 Assets Cash $ — $ 18,472 $ 9,351 Inventory — — 10,459 Prepaid expenses and advances — 29,980 28,428 Current assets held for sale — 48,452 48,238 Property and equipment, net — 456,762 457,361 Total assets held for sale — 505,214 505,599 Liabilities Accounts payable and accrued liabilities — 23,123 25,860 Total liabilities held for sale — 23,123 25,860 Net assets $ — $ 482,091 $ 479,739 *Date of Devco disposition The condensed consolidated statements of operations include the following operating results related to these discontinued operations: Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Selling, marketing and administrative $ — $ 31,287 $ 19,716 $ 58,796 Impairment loss — — 903 — Interest expense — 246 310 366 Net loss from discontinued operations, before taxes — (31,533 ) (20,929 ) (59,162 ) Income taxes — — 1,350 — Net loss from discontinued operations, net of tax $ — $ (31,533 ) $ (22,279 ) $ (59,162 ) Foreign currency translation adjustments — (967 ) (5,370 ) (4,938 ) Comprehensive loss from discontinued operations, net of tax $ — $ (32,500 ) $ (27,649 ) $ (64,100 ) The condensed consolidated statements of cash flows include non-cash impairment charges of $903 for the nine months ended September 30, 2019 and depreciation expense of $368 and $94 for the nine months ended September 30, 2019 and 2018, respectively, related to these discontinued operations. |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net [Text Block] | 8. Property and Equipment, Net Property and equipment, net consisted of the following: September 30, December 31, 2019 2018 Leasehold improvements $ 1,619,286 $ — Machinery and equipment 363,720 — Furniture and fixtures 8,832 — Construction in progress 37,155 — 2,028,993 — Less: Accumulated depreciation (54,471 ) — $ 1,974,522 $ — Depreciation expense for the three and nine months ended September 30, 2019 was $54,471, of which $53,188 was absorbed into cost of goods sold. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets [Text Block] | 9. Goodwill and Other Intangible Assets The Company recorded $5,855,749 in goodwill from CMI Transaction during the three and nine months ended September 30, 2019. The following table summarizes information relating to the Company’s identifiable intangible assets as of September 30, 2019: Gross Accumulated Carrying Amount Amortization Value Amortized: Customer relationships $ 215,900 $ (9,309 ) $ 206,591 215,900 (9,309 ) 206,591 Indefinite-lived: Trademark/trade name 1,340,000 — 1,340,000 Developed manufacturing process 1,330,000 — 1,330,000 $ 2,885,900 $ (9,309 ) $ 2,876,591 Amortization expense was $9,309 for the three and nine months ended September 30, 2019. Estimated aggregate amortization expense for intangible assets subject to amortization for each of the following five years is: Year Ending December 31, 2019 $ 11,994 2020 35,983 2021 35,983 2022 35,983 2023 35,983 Thereafter 50,663 $ 206,589 |
Notes Payable, Related Party
Notes Payable, Related Party | 9 Months Ended |
Sep. 30, 2019 | |
Notes Payable [Abstract] | |
Notes Payable, Related Party [Text Block] | 10. Notes Payable, Related Party The following is a summary of notes payable, related parties: Outstanding as of Original Origination September 30, December 31, Type Principal Date Interest Rate 2019 2018 Date Repaid Notes payable* $ 20,000 2/25/2014 25.0% $ 308,300 $ — n/a *Liability was assumed in the Holdco acquisition. The noteholder is a shareholder of the Company. The note payable is unsecured in regards to Company assets. The balance above includes accrued and unpaid interest of approximately $17,000. There is no stated maturity date, and therefore the note is due on demand. In August 2019, the Company issued 1,148,454 shares of common stock to settle $574,227 in notes payable assumed during the Holdco acquisition. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity [Text Block] | 11. Stockholders’ Equity From June to August 2019, the Company completed a private placement for the sale of its common stock. The Company issued 14,325,005 shares of common stock for gross proceeds of $7,162,503, or $0.50 per share, minus equity issuance costs of $57,751. In July 2019, the Company issued 13,553,233 shares of common stock in connection with the CMI Transaction (refer to Note 4). During the nine months ended September 30, 2019, the Company issued 790,000 shares of common stock pursuant to advisory agreements. The fair value of $395,000 was included in legal and professional fees in the consolidated statements of operations. On February 22, 2018, the Company issued 4,000,000 post-split shares of common stock at $0.125 per share for cash proceeds of $500,000. On April 26, 2018, the Company effected a 2-1 forward stock split of the issued and outstanding shares of common stock. All share and per share information has been retroactively adjusted to reflect the forward stock split. On August 3, 2018, the Company completed a non-brokered private placement and issued 2,880,000 post-split shares of common stock at $0.25 per share for aggregate gross proceeds of $720,000. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Taxes, Miscellaneous [Abstract] | |
Income Taxes [Text Block] | 12. Income Taxes In accordance with ASC 740-270, the Company calculates the interim tax expense based on an annual effective tax rate (“AETR”). The AETR represents the Company’s estimated effective tax rate for the year based on full year projection of tax expense, divided by the projection of full year pretax book income/(loss), adjusted for discrete transactions occurring during the period. The annual effective tax rates for the nine months ended September 30, 2019 was (8.1%) . The Company’s annual effective tax rate for the nine months ended September 30, 2019 is lower than the federal statutory tax rate of 21% primarily due to the disallowance of Company expenses due to Internal Revenue Code Section 280(E) coupled with the increase in future deductible tax differences not expected to be realized in future periods. For the period ending September 30, 2019, the Company has recorded a total income tax liability in the amount of $90,305. This number represents the actual pretax book income generated for the nine-month period ended September 30, 2019 multiplied by the AETR noted above. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions [Text Block] | 13. Related Party Transactions During the quarter ended September 30, 2019, the Company repaid $7,972 to the previous Chief Financial Officer of the Company. During the nine months ended September 30, 2019, a member of management advanced $7,500 pertaining to legal fees owed by General Extract. The amount is unsecured, non-interest bearing and due on demand. Refer to Note 11 for details on the related party notes payable. |
Commitments & Contingencies
Commitments & Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments & Contingencies [Text Block] | 14. Commitments & Contingencies Legal Proceedings The Company is not a party to any litigation and as such does not have contingency reserves established for any litigation liabilities. Lease Commitments The Company determines if an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified fixed asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. The Company has lease agreements which include lease and non-lease components, which the Company has elected to account for as a single lease component for all classes of underlying assets. Lease expense for variable lease components are recognized when the obligation is probable. Operating lease right of use (“ROU”) assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Operating lease payments are recognized as lease expense on a straight-line basis over the lease term. The Company primarily leases buildings (real estate) which are classified as operating leases. ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As an implicit interest rate is not readily determinable in the Company's leases, the incremental borrowing rate is used based on the information available at commencement date in determining the present value of lease payments. The lease term for all of the Company's leases includes the non-cancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. Options for lease renewals have been excluded from the lease term (and lease liability) for the majority of the Company's leases as the reasonably certain threshold is not met. Lease payments included in the measurement of the lease liability are comprised of fixed payments, variable payments that depend on index or rate, and amounts probable to be payable under the exercise of the Company option to purchase the underlying asset if reasonably certain. Variable lease payments not dependent on a rate or index associated with the Company's leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed as probable. Variable lease payments are presented as operating expenses in the Company's income statement in the same line item as expense arising from fixed lease payments. As of and during the three months ended September 30, 2019, management determined that there were no variable lease costs. Operating Leases In April 2016, the Company amended a lease with an unrelated third party for its Englewood retail location. The lease expires in March 2021 and lease payments increase approximately 5% of base rent annually. In May 2017, the Company amended a lease with an unrelated third party as the space for its production facility. The lease expires in April 2022 and lease payments increase approximately 6% of base rent annually. In April 2017, the Company amended a lease with an unrelated third party for its Lakewood retail location. The lease expires in March 2022 and lease payments increase approximately 4% of base rent annually. Future minimum lease commitments under operating leases as of September 30, 2019 are as follows: Year Ending December 31, 2019 (fourth quarter) $ 151,374 2020 627,132 2021 638,586 2022 218,168 Total undisclosed operating lease payments $ 1,635,260 Less: imputed interest (289,839 ) Present Value of operating lease liability $ 1,345,421 Weighted-average remaining lease term (years) 2.17 Weighted-average remaining discount rate 15% There are no other leases that meet the reporting standards of ASC 842 as the Company does not have any other leases with a term exceeding twelve months. Other lease payments not accounted for under ASC 842 total approximately $25,000 for the three and nine months ended September 30, 2019. An initial ROU asset of $1,411,461 was recognized upon the Holdco acquisition. The Company adopted ASC 842 January 1, 2019, but had no reportable operating leases at that point in time. The ROU asset was reduced by approximately $66,000 for the period from the acquisition to September 30, 2019. Cash paid for amounts included in the present value of operating lease liabilities was approximately $66,000 for the period from the acquisition to September 30, 2019 and is included in operating cash flows. Operating lease cost was approximately $101,000 for the period from the acquisition to September 30, 2019. The Company does not have any leases that have not yet commenced which are significant. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | 15. Subsequent Events The Company’s management evaluated subsequent events through the time of the filing of this report on Form 10-Q. The Company’s management is not aware of any significant events that occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on its financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Notes to Financial Statements [Abstract] | |
Basis of Presentation [Policy Text Block] | Basis of Presentation The unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the Securities and Exchange Commission ("SEC") for interim reporting. Accordingly, they do not include certain footnotes and financial presentations normally required under accounting principles generally accepted in the United States of America for complete financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial position and the results of operations and cash flows. The results for the three and nine-month period ended September 30, 2019 are not necessarily indicative of the results to be expected for any subsequent period or the entire year ending December 31, 2019. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s annual audited financial statements and notes thereto for the year ended December 31, 2018, included in the Company’s Form 10-K filed on May 24, 2019 with the SEC. |
Principles of Consolidation [Policy Text Block] | Principles of Consolidation The condensed consolidated financial statements include the accounts of Redwood and its subsidiaries in which a controlling voting interest is maintained or variable interest entities ("VIEs") in which the Company has determined it is the primary beneficiary. The Company consolidates CMI as a VIE (see Note 6). All intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates [Policy Text Block] | Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these financial statements include, but are not limited to the collectability of accounts receivables, valuation of inventory, fair value of stock-based compensation, determining the fair value of the assets acquired and liabilities assumed in acquisition, determining the useful lives and potential impairment of long-lived assets and potential impairment of goodwill. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. |
Reclassifications [Policy Text Block] | Reclassifications Certain items in the interim condensed consolidated financial statements were reclassified from prior periods for presentation purposes. |
Fair Value Measurements [Policy Text Block] | Fair Value Measurements Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying values reported in the consolidated balance sheets for cash, accounts receivable, accounts payable and notes payable approximate fair values because of the immediate or short-term maturities of these financial instruments. There were no other assets or liabilities that require fair value to be recalculated on a recurring basis. |
Cost of Goods Sold [Policy Text Block] | Cost of Goods Sold Cost of goods sold includes the costs directly attributable to production of inventory such as cultivation costs, extraction costs, packaging costs, security, and allocated overhead. Overhead expenses include allocations of rent, administrative salaries, utilities, and related costs. |
Property, Plant and Equipment [Policy Text Block] | Property, Plant and Equipment Purchase of property, plant and equipment are recorded at cost. Improvements and replacements of property, plant and equipment are capitalized. Maintenance and repairs that do not improve or extend the lives of property and equipment are charged to expense as incurred. When assets are sold or retired, their cost and related accumulated depreciation are removed from the accounts and any gain or loss is reported in the consolidated statements of operations. Depreciation and amortization expense is recognized using the straight- line method over the estimated useful life of each asset, as follows: Estimated Useful Life Computer equipment 3 - 5 years Furniture and fixtures 5 - 7 years Machinery and equipment 5 - 8 years Leasehold improvements Shorter of lease term or 15 years |
Goodwill and Intangible Assets [Policy Text Block] | Goodwill and Intangible Assets Goodwill represents the excess of the purchase price of an acquired entity over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. Intangible assets with finite lives are recorded at their estimated fair value at the date of acquisition and are amortized over their estimated useful lives using the straight-line method. The estimated useful lives of intangible assets are as follows: Estimated Useful Life Customer relationships 7 years Trademark/trade name Indefinite Developed manufacturing process Indefinite |
Impairment of Long-Lived Assets and Indefinite-Lived Intangible Assets [Policy Text Block] | Impairment of Long-Lived Assets and Indefinite-Lived Intangible Assets The Company reviews its long-lived assets (property and equipment and amortizable intangible assets) for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the expected cash flows, undiscounted, is less than the carrying amount of the asset, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its fair value. Goodwill Goodwill and identifiable intangible assets that have indefinite useful lives are not amortized, but instead are tested annually at December 31 for impairment and upon the occurrence of certain events or substantive changes in circumstances. The annual goodwill impairment test allows for the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. An entity may choose to perform the qualitative assessment on none, some or all of its reporting units or an entity may bypass the qualitative assessment for any reporting unit and proceed directly to step one of the quantitative impairment test. If it is determined, on the basis of qualitative factors, that the fair value of a reporting unit is, more likely than not, less than its carrying value, the quantitative impairment test is required. The quantitative impairment test calculates any goodwill impairment as the difference between the carrying amount of a reporting unit and its fair value, but not to exceed the carrying amount of goodwill. Indefinite-Lived Intangible Assets Indefinite-lived intangible assets established in connection with business combinations consist of trademarks and developed manufacturing processes. The impairment test for identifiable indefinite-lived intangible assets consists of a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. |
Business Combinations [Policy Text Block] | Business Combinations The Company accounts for acquisitions in which it obtains control of one or more businesses as a business combination. The purchase price of the acquired businesses is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over those fair values is recognized as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments, in the period in which they are determined, to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recognized in the consolidated statements of operations. Accounting for Asset Acquisitions In accordance with the guidance for business combinations, the Company determines whether a transaction or other event is a business combination, which requires that the assets acquired, and liabilities assumed constitute a business. Each business combination is then accounted for by applying the acquisition method. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. |
Stock Based Compensation [Policy Text Block] | Stock-Based Compensation The Company may issue shares of common stock to consultants for services performed. The Company records an expense in the consolidated statements of operations utilizing the fair value of the Company’s common stock during the period the services are performed. |
Net Loss per Share [Policy Text Block] | Net Loss per Share Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive. There were no potentially dilutive items outstanding as of September 30, 2019 and 2018 and diluted net loss per share is the same as basic net loss per share for each period. |
Recent Accounting Pronouncements [Policy Text Block] | Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-02, Leases |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful life of property and equipment [Table Text Block] | Estimated Useful Life Computer equipment 3 - 5 years Furniture and fixtures 5 - 7 years Machinery and equipment 5 - 8 years Leasehold improvements Shorter of lease term or 15 years |
Schedule of estimated useful lives of intangible assets [Table Text Block] | Estimated Useful Life Customer relationships 7 years Trademark/trade name Indefinite Developed manufacturing process Indefinite |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenue by type [Table Text Block] | Nine Months Ended September 30, 2019 2018 Medical retail $ 1,023,480 $ — Medical wholesale 200,250 — Recreational wholesale 381,746 — $ 1,605,476 $ — |
Business Combination (Tables)
Business Combination (Tables) - CMI Transaction [Member] | 9 Months Ended |
Sep. 30, 2019 | |
Business Acquisition [Line Items] | |
Schedule of business acquisitions [Table Text Block] | Cash $ 1,999,770 Common Stock 6,776,617 Total Purchase Price $ 8,776,387 Weighted Average Useful Life Description Fair Value (in years) Assets acquired: Cash $ 136,654 Other current assets 74 Property and equipment, net 1,985,738 Intangible assets: Customer relationships 215,900 Indefinite Trademark/trade name 1,340,000 Indefinite Developed manufacturing process 1,330,000 7 Goodwill 5,855,747 Right of use asset 1,411,461 Deposits 12,348 Total assets acquired $ 12,287,922 Liabilities assumed: Notes payable $ 147,268 Notes payable, related parties 760,573 Right of use liability 1,411,460 Total liabilities assumed 2,319,301 Noncontrolling interests 1,192,234 Estimated fair value of net assets acquired $ 8,776,387 |
Business Acquisition, Pro Forma Information [Table Text Block] | Nine Months Ended September 30, 2019 2018 Net sales $ 4,964,507 $ 4,977,445 Net loss $ (1,464,115 ) $ (655,242 ) Net loss per common share $ (0.01 ) $ (0.01 ) |
Asset Acquisition (Tables)
Asset Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
General Extract assets [Member] | |
Business Acquisition [Line Items] | |
Schedule of business acquisitions [Table Text Block] | Cash $ 4,506 Research and development 477,585 Total assets acquired $ 482,091 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |
Schedule of Variable Interest Entities [Table Text Block] | Assets and liabilities of the VIE September 30 Description 2019 Current assets $ 818,614 Non-current assets 750,000 Total assets 1,568,614 Current liabilities 386,127 Non-current liabilities — Total liabilities 386,127 Net assets 1,182,487 |
Schedule of description of operating results of Variable Interest Entities [Table Text Block] | Operating Results of the VIE Results from July 15, 2019 through September 30, 2019 For the period of July 15, 2019 through September 30, Description 2019 Net Sales $ 1,605,476 Cost of goods sold 981,890 Gross profit $ 623,586 Operating expenses Personnel costs $ 112,028 Sales and marketing 164,629 General and administrative 77,375 Legal and professional fees 43,311 Depreciation and amortization 1,284 Bad debt recovery (1,200 ) Total operating expenses $ 397,427 Income from operations 226,159 Other (expense) Interest expense (12,715 ) Total other expenses $ (12,715 ) Net income $ 213,444 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Cash, Including Discontinued Operations [Abstract] | |
Schedule of discontinued operations carrying amounts of assets and liabilities [Table Text Block] | September 30, July 1, December 31, 2019 2019* 2018 Assets Cash $ — $ 18,472 $ 9,351 Inventory — — 10,459 Prepaid expenses and advances — 29,980 28,428 Current assets held for sale — 48,452 48,238 Property and equipment, net — 456,762 457,361 Total assets held for sale — 505,214 505,599 Liabilities Accounts payable and accrued liabilities — 23,123 25,860 Total liabilities held for sale — 23,123 25,860 Net assets $ — $ 482,091 $ 479,739 |
Schedule of discontinued operations statements of operations [Table Text Block] | Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Selling, marketing and administrative $ — $ 31,287 $ 19,716 $ 58,796 Impairment loss — — 903 — Interest expense — 246 310 366 Net loss from discontinued operations, before taxes — (31,533 ) (20,929 ) (59,162 ) Income taxes — — 1,350 — Net loss from discontinued operations, net of tax $ — $ (31,533 ) $ (22,279 ) $ (59,162 ) Foreign currency translation adjustments — (967 ) (5,370 ) (4,938 ) Comprehensive loss from discontinued operations, net of tax $ — $ (32,500 ) $ (27,649 ) $ (64,100 ) |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and equipment, net [Table Text Block] | September 30, December 31, 2019 2018 Leasehold improvements $ 1,619,286 $ — Machinery and equipment 363,720 — Furniture and fixtures 8,832 — Construction in progress 37,155 — 2,028,993 — Less: Accumulated depreciation (54,471 ) — $ 1,974,522 $ — |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of identifiable intangible assets [Table Text Block] | Gross Accumulated Carrying Amount Amortization Value Amortized: Customer relationships $ 215,900 $ (9,309 ) $ 206,591 215,900 (9,309 ) 206,591 Indefinite-lived: Trademark/trade name 1,340,000 — 1,340,000 Developed manufacturing process 1,330,000 — 1,330,000 $ 2,885,900 $ (9,309 ) $ 2,876,591 |
Schedule of finite lived intangible assets future amortization expense [Table Text Block] | Year Ending December 31, 2019 $ 11,994 2020 35,983 2021 35,983 2022 35,983 2023 35,983 Thereafter 50,663 $ 206,589 |
Notes Payable, Related Party (T
Notes Payable, Related Party (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Notes Payable [Abstract] | |
Schedule of notes payable [Table Text Block] | Outstanding as of Original Origination September 30, December 31, Type Principal Date Interest Rate 2019 2018 Date Repaid Notes payable* $ 20,000 2/25/2014 25.0% $ 308,300 $ — n/a *Liability was assumed in the Holdco acquisition. The noteholder is a shareholder of the Company. |
Commitments & Contingencies (Ta
Commitments & Contingencies (Table) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease commitments under operating leases [Table Text Block] | Year Ending December 31, 2019 (fourth quarter) $ 151,374 2020 627,132 2021 638,586 2022 218,168 Total undisclosed operating lease payments $ 1,635,260 Less: imputed interest (289,839 ) Present Value of operating lease liability $ 1,345,421 Weighted-average remaining lease term (years) 2.17 Weighted-average remaining discount rate 15% |
Nature of the Business and Ba_2
Nature of the Business and Basis of Presentation (Narrative) (Details) - USD ($) | Jul. 15, 2019 | Jul. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Nature Of Business And Basis Of Presentation [Line Items] | ||||||||
Accumulated deficit | $ 2,453,209 | $ 2,453,209 | $ 2,453,209 | $ 840,656 | ||||
Net loss | 1,299,517 | 213,444 | $ 157,433 | 1,592,086 | $ 293,115 | |||
Net cash used in operating activities | 607,022 | $ 349,201 | ||||||
Cash | 4,702,902 | 4,702,902 | 4,702,902 | $ 197,962 | ||||
Working capital | $ 3,919,940 | $ 3,919,940 | $ 3,919,940 | |||||
Holdco, I P Co and General Extract [Member] | Critical Mass Industries, LLC [Member] | ||||||||
Nature Of Business And Basis Of Presentation [Line Items] | ||||||||
Number of common shares | 13,553,233 | |||||||
Purchase price consideration for cash | $ 1,999,770 | |||||||
Expected cost to acquire licenses from C M I, shares | 1,500,000 | |||||||
General Extract, LLC ("General Extract") [Member] | ||||||||
Nature Of Business And Basis Of Presentation [Line Items] | ||||||||
Membership interests acquired | 100.00% | |||||||
Number of common shares | 299,170 |
Business Combination (Narrative
Business Combination (Narrative) (Details) - CMI Transaction [Member] - USD ($) | Jul. 15, 2019 | Sep. 30, 2019 |
Business Acquisition [Line Items] | ||
Number of common stock issued | 13,553,233 | |
Cash consideration | $ 1,999,770 | $ 1,999,770 |
Asset Acquisition (Narrative) (
Asset Acquisition (Narrative) (Details) | Jul. 01, 2019 |
General Extract assets [Member] | |
Business Acquisition [Line Items] | |
Percentage of membership interests acquired | 100.00% |
Discontinued Operations (Narrat
Discontinued Operations (Narrative) (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($)ha | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)ha | Sep. 30, 2018USD ($) | Jun. 30, 2019 | |
First Colombia Devco SAS [Member] | |||||
Area of Land | ha | 13 | 13 | |||
Discontinued operations non-cash impairment charges | $ 0 | $ 0 | $ 903 | $ 0 | |
Discontinued operations depreciation expense | $ 368 | $ 94 | |||
General Extract [Member] | |||||
Membership interests acquired | 100.00% |
Property and Equipment, Net (Na
Property and Equipment, Net (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 54,471 | $ 54,471 |
Cost, Depreciation | $ 53,188 | $ 53,188 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Business Acquisition [Line Items] | |
Goodwill | $ 5,855,749 |
Amortization of Intangible Assets | 9,309 |
IPCo, Holdco and General Extract [Member] | |
Business Acquisition [Line Items] | |
Goodwill | $ 5,855,749 |
Notes Payable, Related Party (N
Notes Payable, Related Party (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended |
Aug. 31, 2019 | Sep. 30, 2019 | |
Short-term Debt [Line Items] | ||
Accrued and unpaid interest | $ 17,000 | |
Common stock issued in connection with conversion of debt and accounts payable | $ 574,227 | |
Holdco acquisition [Member] | ||
Short-term Debt [Line Items] | ||
Common stock issued in connection with conversion of debt (in shares) | 1,148,454 | |
Common stock issued in connection with conversion of debt and accounts payable | $ 574,227 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) | Aug. 03, 2018 | Jul. 31, 2019 | Feb. 22, 2018 | Sep. 30, 2019 | Aug. 31, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Subsidiary, Sale of Stock [Line Items] | ||||||||||
IPCo and Holdco [Member] | 790,000 | |||||||||
IPCo and Holdco [Member] | $ 395,000 | |||||||||
Common stock issued pursuant to private placement, net of issuance costs | $ 500,000 | $ 3,995,082 | $ 2,671,250 | $ 255,000 | $ 500,000 | |||||
Proceeds from common stock subscribed and to be issued | $ 7,104,732 | $ 1,220,000 | ||||||||
Private Placement [Member] | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Common stock issued private placement | 14,325,005 | |||||||||
Gross proceeds from private placement | $ 7,162,503 | |||||||||
Stock price per share (in dollars per share) | $ 0.50 | |||||||||
Equity issuance costs | $ 57,751 | |||||||||
Number of shares issued for non-brokered private placement | 2,880,000 | |||||||||
Non-brokered private placement stock issued price per share | $ 0.25 | |||||||||
Proceeds from issuance of non-brokered private placement | $ 720,000 | |||||||||
CMI Transaction [Member] | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Number of common shares | 13,553,233 | |||||||||
Common Stock [Member] | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Stock price per share (in dollars per share) | $ 0.125 | |||||||||
Common stock issued pursuant to private placement, net of issuance costs | $ 8,888 | $ 5,437 | $ 2,880 | $ 4,000 | ||||||
Common stock issued pursuant to private placement, net of issuance costs (in shares) | 4,000,000 | 8,888,005 | 5,437,000 | 2,880,000 | 4,000,000 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Taxes, Miscellaneous [Abstract] | |
Effective Income Tax Rate | 8.10% |
Federal Statutory Income Tax Rate | 21.00% |
Income Tax Liability | $ 90,305 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | ||
Due to related party | $ 7,500 | $ 7,846 |
Chief Financial Officer [Member] | ||
Related Party Transaction [Line Items] | ||
Amount repaid to related party | 7,972 | |
A member of management [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related party | $ 7,500 |
Commitments & Contingencies (Na
Commitments & Contingencies (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
May 31, 2017 | Apr. 30, 2017 | Apr. 30, 2016 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Jul. 15, 2019 | |
Business Acquisition [Line Items] | |||||||
Percentage of lease payments increase | 6.00% | 4.00% | 5.00% | ||||
Other lease payments | $ 25,000 | $ 25,000 | |||||
Right of use asset, net | $ 1,345,621 | $ 1,345,621 | 1,345,621 | ||||
Operating lease cost | $ 101,000 | ||||||
IPCo, Holdco and General Extract [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Right of use asset, net | $ 1,411,461 | ||||||
Operating lease cost | $ 66,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Property and Equipment (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Computer Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Computer Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
Machinery and equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Machinery and equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 8 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 15 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of estimated useful lives of intangible assets (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Customer Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 7 years |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of disaggregated revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net sales | $ 1,605,476 | $ 1,605,476 | $ 1,605,476 | $ 0 |
Medical retail [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net sales | 1,023,480 | 0 | ||
Medical wholesale [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net sales | 200,250 | 0 | ||
Recreational wholesale [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net sales | $ 381,746 | $ 0 |
Business Combination - Summariz
Business Combination - Summarizes the provisional purchase price allocations relating to the CMI Transaction (Details) - USD ($) | Jul. 15, 2019 | Sep. 30, 2019 |
Business Acquisition [Line Items] | ||
Common Stock | $ 6,776,617 | |
CMI Transaction [Member] | ||
Business Acquisition [Line Items] | ||
Cash | $ 1,999,770 | 1,999,770 |
Common Stock | 6,776,617 | |
Total Purchase Price | $ 8,776,387 |
Business Combination - Assets a
Business Combination - Assets acquired and liabilities assumed as of purchase date (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Intangible assets: | |
Goodwill | $ 5,855,749 |
CMI Transaction [Member] | |
Assets acquired: | |
Cash | 136,654 |
Other current assets | 74 |
Property and equipment, net | 1,985,738 |
Intangible assets: | |
Customer relationships | 215,900 |
Trademark/trade name | 1,340,000 |
Developed manufacturing process | $ 1,330,000 |
Weighted Average Useful Life (in years) | 7 years |
Goodwill | $ 5,855,747 |
Right of use asset | 1,411,461 |
Deposits | 12,348 |
Total assets acquired | 12,287,922 |
Liabilities assumed: | |
Notes payable | 147,268 |
Notes payable, related parties | 760,573 |
Right of use liability | 1,411,460 |
Total liabilities assumed | 2,319,301 |
Noncontrolling interests | 1,192,234 |
Estimated fair value of net assets acquired | $ 8,776,387 |
Business Combination - Unaudite
Business Combination - Unaudited Pro Forma Financial Information (Details) - CMI Transaction [Member] - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Business Acquisition [Line Items] | ||
Net sales | $ 4,964,507 | $ 4,977,445 |
Net loss | $ (1,464,115) | $ (655,242) |
Net loss per common share | $ (0.01) | $ (0.01) |
Asset Acquisition - Schedule of
Asset Acquisition - Schedule of asset acquisition (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Business Acquisition [Line Items] | |
Total assets acquired | $ 1,863,117 |
General Extract assets [Member] | |
Business Acquisition [Line Items] | |
Cash | 4,506 |
Research and development | 477,585 |
Total assets acquired | $ 482,091 |
Variable Interest Entities - Sc
Variable Interest Entities - Schedule of assets and liabilities of the VIE (Details) - Variable Interest Entity, Primary Beneficiary [Member] | Sep. 30, 2019USD ($) |
Variable Interest Entity [Line Items] | |
Current assets | $ 818,614 |
Non-current assets | 750,000 |
Total assets | 1,568,614 |
Current liabilities | 386,127 |
Non-current liabilities | 0 |
Total liabilities | 386,127 |
Net assets | $ 1,182,487 |
Variable Interest Entities - _2
Variable Interest Entities - Schedule of description of operating results of the VIE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Variable Interest Entity [Line Items] | |||||
Net sales | $ 1,605,476 | $ 1,605,476 | $ 1,605,476 | $ 0 | |
Cost of goods sold, net of depreciation and amortization | 981,890 | 981,890 | 981,890 | ||
Gross profit | 623,586 | 623,586 | 623,586 | ||
Operating expenses: | |||||
Personnel costs | 407,532 | 112,028 | 407,532 | ||
Sales and marketing | 169,854 | 164,629 | 169,854 | ||
General and administrative | 2,844 | 77,375 | $ 125,772 | 272,705 | 195,428 |
Legal and professional fees | 751,675 | 43,311 | 751,674 | ||
Depreciation and amortization | 10,593 | 1,284 | 10,593 | ||
Bad debt recovery | (1,200) | ||||
Total operating expenses | 1,820,083 | 397,427 | 125,772 | 2,089,943 | 195,428 |
Income from operations | (1,196,497) | 226,159 | (125,772) | (1,466,357) | (195,428) |
Other (expense): | |||||
Interest expense | (12,715) | (12,715) | (12,715) | (38,872) | |
Total other expenses | (12,715) | (12,715) | (128) | (13,145) | (38,525) |
Net income | $ (1,299,517) | $ (213,444) | $ (157,433) | $ (1,592,086) | $ (293,115) |
Discontinued Operations - Sched
Discontinued Operations - Schedule of discontinued operations carrying amounts of assets and liabilities (Details) - USD ($) | Sep. 30, 2019 | Jul. 01, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Assets | ||||
Cash | $ 9,351 | $ 0 | ||
Property and equipment, net | $ 457,361 | |||
Liabilities | ||||
Total liabilities held for sale | 25,860 | |||
First Colombia Devco SAS [Member] | ||||
Assets | ||||
Cash | 0 | $ 18,472 | 9,351 | |
Inventory | 0 | 0 | 10,459 | |
Prepaid expenses and advances | 0 | 29,980 | 28,428 | |
Current assets held for sale | 0 | 48,452 | 48,238 | |
Property and equipment, net | 0 | 456,762 | 457,361 | |
Total assets held for sale | 0 | 505,214 | 505,599 | |
Liabilities | ||||
Accounts payable and accrued liabilities | 0 | 23,123 | 25,860 | |
Total liabilities held for sale | 0 | 23,123 | 25,860 | |
Net Assets | $ 0 | $ 482,091 | $ 479,739 |
Discontinued Operations - Sch_2
Discontinued Operations - Schedule of discontinued operations statements of operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Foreign currency translation adjustments | $ (967) | $ (5,370) | $ (4,938) | |
First Colombia Devco SAS [Member] | ||||
Selling, marketing and administrative | $ 0 | 31,287 | 19,716 | 58,796 |
Impairment loss | 0 | 0 | 903 | 0 |
Interest expense | 0 | 246 | 310 | 366 |
Net loss from discontinued operations, before taxes | 0 | (31,533) | (20,929) | (59,162) |
Income taxes | 0 | 0 | 1,350 | 0 |
Net loss from discontinued operations, net of tax | 0 | (31,533) | (22,279) | (59,162) |
Foreign currency translation adjustments | 0 | (967) | (5,370) | (4,938) |
Comprehensive loss from discontinued operations, net of tax | $ 0 | $ (32,500) | $ (27,649) | $ (64,100) |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and equipment, net (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,028,993 | |
Less: Accumulated depreciation | (54,471) | $ 0 |
Property and equipment, net | 1,974,522 | 0 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,619,286 | 0 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 363,720 | 0 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 8,832 | 0 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 37,155 | $ 0 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of identifiable intangible assets (Details) | Sep. 30, 2019USD ($) |
Indefinite-lived Intangible Assets [Line Items] | |
Amortized intangible assets, gross amount | $ 215,900 |
Amortized intangible assets, accumulated amortization | (9,309) |
Amortized intangible assets, carrying value | 206,591 |
Indefinite lived intangible assets carrying value | 2,885,900 |
Intangible Assets Net | 2,876,591 |
Customer relationships [Member] | |
Indefinite-lived Intangible Assets [Line Items] | |
Amortized intangible assets, gross amount | 215,900 |
Amortized intangible assets, accumulated amortization | (9,309) |
Amortized intangible assets, carrying value | 206,591 |
Trademark/trade name [Member] | |
Indefinite-lived Intangible Assets [Line Items] | |
Indefinite lived Intangible Assets gross amount | 1,340,000 |
Indefinite lived Intangible assets accumulated amortization | 0 |
Indefinite lived intangible assets carrying value | 1,340,000 |
Developed manufacturing process [Member] | |
Indefinite-lived Intangible Assets [Line Items] | |
Indefinite lived Intangible Assets gross amount | 1,330,000 |
Indefinite lived Intangible assets accumulated amortization | 0 |
Indefinite lived intangible assets carrying value | $ 1,330,000 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Schedule of finite lived intangible assets future amortization expense (Details) | Sep. 30, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2019 | $ 11,994 |
2020 | 35,983 |
2021 | 35,983 |
2022 | 35,983 |
2023 | 35,983 |
Thereafter | 50,663 |
Amortization expense for intangible assets | $ 206,591 |
Notes Payable, Related Party -
Notes Payable, Related Party - Schedule of notes payable, related parties (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Short-term Debt [Line Items] | ||
Outstanding | $ 308,300 | |
Notes payable [Member] | ||
Short-term Debt [Line Items] | ||
Original Principal | $ 20,000 | |
Origination Date | 2/25/2014 | |
Interest Rate | 25.00% | |
Outstanding | $ 308,300 | $ 0 |
Commitments & Contingencies - S
Commitments & Contingencies - Schedule of Future minimum lease commitments under operating leases (Details) | Sep. 30, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 (fourth quarter) | $ 151,374 |
2020 | 627,132 |
2021 | 638,586 |
2022 | 218,168 |
Total undisclosed operating lease payments | 1,635,260 |
Less: imputed interest | (289,839) |
Present Value of operating lease liability | $ 1,345,421 |
Weighted-average remaining lease term (years) | 2 years 2 months 1 day |
Weighted-average remaining discount rate | 15.00% |