Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 30, 2021 | Jun. 30, 2020 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Andina Gold Corp. | ||
Entity Central Index Key | 0001533030 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 98,699,222 | ||
Entity File Number | 000-56155 | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation State Country Code | NV | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 10,818,223 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents (Note 5) | $ 329,839 | $ 3,473,770 |
Accounts receivable, net (Note 5) | 540,000 | |
Prepaid expenses | 60,475 | 100,555 |
Inventory, net (Notes 5 & 9) | 340,000 | |
Assets held for sale, current (Notes 5 & 8) | 6,867,840 | 11,845,681 |
Total current assets | 7,798,154 | 15,760,006 |
Total assets | 7,798,154 | 15,760,006 |
Current liabilities: | ||
Accounts payable and accrued expenses | 2,248,235 | 754,850 |
Loans payable | 412,560 | |
Taxes payable | 771 | |
Liabilities held for sale, current | 1,464,285 | 1,913,433 |
Total current liabilities | 4,125,851 | 2,668,283 |
Notes payable | 52,083 | |
Deferred tax liability | 14,926 | 4,691 |
Total liabilities | 4,192,860 | 2,672,974 |
Commitments and contingencies (Note 16) | ||
Shareholders’ 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, 97,005,817 and 106,216,708 shares issued and outstanding at December 31, 2020 and 2019, respectively | 97,006 | 106,216 |
Additional paid-in capital | 19,138,947 | 16,894,103 |
Common stock to be issued | 98,535 | |
Accumulated deficit | (15,729,194) | (3,913,287) |
Total shareholders’ equity | 3,605,294 | 13,087,032 |
Total liabilities and shareholders’ equity | $ 7,798,154 | $ 15,760,006 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 97,005,817 | 106,216,708 |
Common stock, shares outstanding | 97,005,817 | 106,216,708 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Net sales | $ 781,455 | $ 18,248 |
Cost of goods sold, inclusive of provision for inventory loss of $400,787 and $163,800 for the years ended December 31, 2020 and 2019, respectively | 744,279 | 198,822 |
Gross profit / (loss) | 37,176 | (180,574) |
Operating expenses: | ||
Personnel costs | 2,473,730 | 812,916 |
Sales and marketing | 14,854 | 123,853 |
General and administrative | 2,338,599 | 894,422 |
Legal and professional fees | 1,744,834 | 843,580 |
Research and development | 477,585 | |
Total operating expenses | 6,572,017 | 3,152,356 |
Loss from operations | (6,534,841) | (3,332,930) |
Other income (expenses): | ||
Interest expense | (236,912) | 310 |
Loss on foreign exchange | (88,690) | (429) |
Total other expenses | (325,602) | (119) |
Net loss from continuing operations, before taxes | (6,860,443) | (3,333,049) |
Income taxes | 10,235 | 4,691 |
Net loss from continuing operations | (6,870,678) | (3,337,740) |
Net gain / (loss) from discontinued operations, net of tax | (4,945,229) | 280,206 |
Net loss | (11,815,907) | (3,057,534) |
Comprehensive loss from discontinued operations | (5,370) | |
Comprehensive loss | $ (11,815,907) | $ (3,062,904) |
Net loss per common share: | ||
Loss from continuing operations - basic and diluted | $ (0.07) | $ (0.04) |
Gain / (loss) from discontinued operations - basic and diluted | (0.05) | 0 |
Loss per common share - basic and diluted | $ (0.12) | $ (0.03) |
Weighted average common shares outstanding-basic and diluted | 99,863,059 | 89,808,227 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Provision for inventory loss | $ 400,787 | $ 163,800 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) | Common Stock | Additional Paid-In Capital | Common Stock to be Issued | Accumulated Deficit | AOCL | Total |
Balance at Dec. 31, 2018 | $ 76,400 | $ 1,425,885 | $ (840,656) | $ (15,097) | $ 646,532 | |
Balance, shares at Dec. 31, 2018 | 76,400,016 | |||||
Common stock issued pursuant to private placement, net of issuance costs | $ 14,325 | 7,090,407 | 7,104,732 | |||
Common stock issued pursuant to private placement, net of issuance costs, shares | 14,325,005 | |||||
Common stock issued in connection with business combination | $ 13,553 | 6,763,064 | 6,776,617 | |||
Common stock issued in connection with business combination, shares | 13,553,233 | |||||
Common stock issued pursuant to advisory agreements | $ 790 | 394,210 | 395,000 | |||
Common stock issued pursuant to advisory agreements, shares | 790,000 | |||||
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 | 647,458 | 647,458 | ||||
Deconsolidation of former subsidiary | (15,097) | 15,097 | ||||
Net loss | (3,057,534) | (3,057,534) | ||||
Balance at Dec. 31, 2019 | $ 106,216 | 16,894,103 | (3,913,287) | 13,087,032 | ||
Balance, shares at Dec. 31, 2019 | 106,216,708 | |||||
Issuance of common stock pursuant to separation agreement | $ 1,176 | 148,824 | 150,000 | |||
Issuance of common stock pursuant to separation agreement, shares | 1,175,549 | |||||
Issuance of common stock pursuant to accelerated vesting of RSU’s | $ 600 | 162,440 | 163,040 | |||
Issuance of common stock pursuant to accelerated vesting of RSU’s, shares | 600,000 | |||||
Stock-based compensation | $ 758 | 570,954 | 571,712 | |||
Stock-based compensation, shares | 757,895 | |||||
Stock options issued and outstanding | 555,532 | 555,532 | ||||
Share cancellations | $ (15,350) | 15,350 | ||||
Share cancellations, shares | (15,350,000) | |||||
Share issuance | $ 3,606 | 541,744 | 545,350 | |||
Share issuance, shares | 3,605,665 | |||||
Common stock to be issued | 98,535 | 98,535 | ||||
Beneficial Conversion Feature of Note Payable | 250,000 | 250,000 | ||||
Net loss | (11,815,907) | (11,815,907) | ||||
Balance at Dec. 31, 2020 | $ 97,006 | $ 19,138,947 | $ 98,535 | $ (15,729,194) | $ 3,605,294 | |
Balance, shares at Dec. 31, 2020 | 97,005,817 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (6,870,678) | $ (3,337,740) |
Adjustments to reconcile net loss to net cash used in operating activities from continuing operations: | ||
Amortization of debt discount | 52,083 | |
Fair value of common stock issued pursuant to service and advisory agreements | 7,500 | 395,000 |
Research and development expenses associated with asset acquisition | 477,585 | |
Provision for inventory loss | 400,787 | 163,800 |
Stock-based compensation expense | 1,440,284 | |
Deferred income tax expense | 10,235 | 4,691 |
Change in operating assets and liabilities: | ||
Accounts receivable | (540,000) | |
Prepaid expenses | 40,080 | (100,481) |
Inventory, net | (60,787) | (503,800) |
Accounts payable and accrued expenses | 1,493,385 | 687,429 |
Due to related party | (7,846) | |
Taxes payable | 771 | |
Net cash used in operating activities from continuing operations | (4,026,340) | (2,221,362) |
Net cash provided by operating activities from discontinued operations | 276,719 | 426,044 |
Net cash used in operating activities | (3,749,621) | (1,795,318) |
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 | |
Net cash used in investing activities from continuing operations | (1,858,611) | |
Net cash used in investing activities from discontinued operations | (693,255) | (41,081) |
Net cash used in investing activities | (693,255) | (1,899,692) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock | 537,850 | |
Proceeds from common stock subscribed and to be issued | 98,535 | |
Proceeds from loans payable, net of repayment | 412,560 | |
Proceeds from notes payable | 250,000 | |
Proceeds from sale of common stock pursuant to private placement, net of issuance costs | 7,104,732 | |
Net cash provided by financing activities from continuing operations | 1,298,945 | 7,104,732 |
Net cash used in financing activities from discontinued operations | (100,000) | |
Net cash provided by financing activities | 1,298,945 | 7,004,732 |
Net increase / (decrease) in cash from continuing operations | (2,727,395) | 3,024,759 |
Net increase / (decrease) in cash from discontinued operations | (416,536) | 284,963 |
Effect of exchange rate changes on cash | (3,914) | |
Cash at beginning of period | 3,473,770 | 167,962 |
Cash at end of period | 329,839 | 3,473,770 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 162,810 | 13,651 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Common stock issued pursuant to separation agreement | 150,000 | |
Common stock issued pursuant to vesting of restricted stock units | 163,040 | |
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 | 1,192,234 | |
Equity issued pursuant to CMI Transaction | $ 6,776,617 |
Nature of the Business
Nature of the Business | 12 Months Ended |
Dec. 31, 2020 | |
Nature of Business and Basis of Presentation [Abstract] | |
NATURE OF THE BUSINESS | 1. NATURE OF THE BUSINESS Andina Gold Corp ("Andina Gold" or the "Company") began as Auto Tool Technologies Inc., which was incorporated under the laws of the State of Nevada on May 10, 2011. The Company's name was changed to AFC Building Technologies Inc. effective January 10, 2014. Effective April 26, 2018, the Company changed its name to First Colombia Development Corp. Effective October 14, 2019, the Company changed its name to Redwood Green Corp. Effective September 1, 2020, the Company changed its name to Andina Gold Corp. 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"), 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. 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" and/or "Good Meds"), a Colorado limited liability company ("CMI Transaction"). 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 the Company entered into the Membership Interest Purchase Agreement, Colorado law prohibited public companies, including the Company, from owning cannabis licenses. Therefore, CMI spun off certain assets acquired by the Company. 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 those assets. 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 Andina Gold common stock were held and retained by the Company until the Cannabis License Assets can be purchased (see Note 2 and Note 7). Good Meds, the operating unit of CMI, is based in Denver, CO, and operates in a 60,000-square-foot cultivation and processing facility. Good Meds also owns and operates two medical cannabis dispensaries located in Lakewood, CO and Englewood, CO. The business has been in operation since 2009. The Denver facility produces cannabis for sale as dry flower and biomass input for processing into Marijuana-Infused Products ("MIP"), such as live resin, wax and budder. Andina Gold operates two medical marijuana dispensaries and related businesses in Colorado (see Note 2). Our mission is to deliver high-quality, safely manufactured, sustainable, innovative, and accessible cannabis products which support individual well-being. In August 2020, the Company merged with its wholly owned Nevada subsidiary, Andina Gold Corp., and changed its name into Andina Gold Corp. On October 21, 2020 FINRA issued an advisory accepting the company's name change from Redwood Green Corp to Andina Gold Corp and ticker symbol change to AGOL effective as of October 22, 2020 at the opening of the U.S. OTC market. As of October 15, 2020 the Company has redirected its business strategy to seek financing for general operating expenses from the Company's current shareholders in the form of share subscription and warrants as specifically authorized by the Board in writing on October 15, 2020. Further, the Company is actively pursuing divestiture of its Colorado-based subsidiaries, assets or receivables. In August 2020, the Company established a wholly owned Colombian subsidiary, Andina Gold Colombia SAS. Subject to further discussions, obtaining the necessary local regulatory approvals and regulatory developments, the Company shall identify and pursue gold exploration in Colombia. The Company will need substantial additional capital in order to execute this strategy and there can be no assurance that such quantities of capital can be sourced on reasonable terms, if at all. In addition, there can be no assurance that the Company will be successful in pursuing this strategy. The Company has since determined that pursuit of gold exploration in Colombia is not longer a practical alternative and is considering other strategies to increase shareholder value. |
Variable Interest Entity
Variable Interest Entity | 12 Months Ended |
Dec. 31, 2020 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |
VARIABLE INTEREST ENTITY | 2. VARIABLE INTEREST ENTITY Pursuant to Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("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. As of July 15, 2019, the Company consolidates CMI as a VIE pursuant to certain intellectual property, administrative and consulting agreements in which the Company is deemed the primary beneficiary of CMI. Accordingly, the results of CMI have been included in the accompanying consolidated financial statements. Furthermore, the Company notes it does not own the Cannabis License Assets; however, pursuant to accounting principles generally accepted in the United States ("GAAP"), the Cannabis License Assets are consolidated in the accompanying consolidated financial statements along with certain liabilities and the associated revenues and expenses of CMI. See Note 8 for further information regarding CMI. Cannabis License Assets & Liabilities As of December 31, Description 2020 2019 Current assets Cash and cash equivalents $ 196,445 $ 467,460 Accounts receivable, net 66,043 113,599 Inventory, net 791,868 768,633 Total current assets 1,054,356 1,349,692 Total assets $ 1,054,356 $ 1,349,692 Current liabilities Accounts payable and accrued expenses $ 211,463 $ 337,386 Total current liabilities 211,463 337,386 Total liabilities 211,463 337,386 Net assets $ 842,893 $ 1,012,306 CMI Statement of Operations For the Years Ended Description 2020 2019 Net sales $ 6,860,282 $ 3,460,566 Cost of goods sold, inclusive of depreciation 4,901,237 2,237,004 Gross profit $ 1,959,045 $ 1,223,562 Operating expenses Personnel costs 402,389 266,165 Sales and marketing 908,502 414,210 General and administrative 231,376 132,894 Legal and professional fees 156,782 81,234 Amortization expense 26,901 16,653 Total operating expenses 1,725,950 911,156 Gain from operations $ 233,095 $ 312,406 Other income / (expense) Interest expense (153,592 ) (13,013 ) Goodwill impairment (4,663,514 ) - Intangibles impairment (361,218 ) Other income - 3,092 Total other income / (expense) (5,178,324 ) (9,921 ) Net income / (loss) $ (4,945,229 ) $ 302,485 |
Revision of Prior Period Financ
Revision of Prior Period Financial Statements | 12 Months Ended |
Dec. 31, 2020 | |
Revision of Prior Period Financial Statements [Abstract] | |
REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS | 3. REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS On the consolidated balance sheet for the year ended December 31, 2019 and the quarter ended September 30, 2019, the Cannabis License Assets of CMI, a VIE in which the Company is deemed the primary beneficiary (Note 2), was presented as non-controlling interest pursuant to and in conjunction with the CMI Transaction. The Company does not own the Cannabis License Assets; however, they are included in the accompanying consolidated financial statements for GAAP reporting purposes. The Company revised its consolidated financial statements in which this line item was adjusted to correct the classification by reflecting accounts receivable, net of $113,599, inventory, net of $768,633, and accounts payable and accrued expenses of $337,386 in addition to a decrease in goodwill of $1,192,234 and an increase in additional-paid-in capital of $647,458. The impact of these adjustments on the Company's consolidated financial statements was as follows: December 31, 2019 Previously Reported Non-controlling Interest Adjustment Revised (1) Inventory, net (2) $ 340,000 $ 768,633 $ 1,108,633 Accounts receivable, net (2) $ - $ 113,599 $ 113,599 Total current assets $ 3,933,047 $ 882,232 $ 4,815,279 Goodwill $ 5,855,748 $ (1,192,234 ) $ 4,663,514 Total assets $ 16,070,008 $ (310,002 ) $ 15,760,006 Accounts payable and accrued expenses $ 754,850 $ 337,386 $ 1,092,236 Total current liabilities $ 1,558,821 $ 337,386 $ 1,896,207 Total liabilities $ 2,335,588 $ 337,386 $ 2,672,974 Additional paid-in capital $ 16,246,645 $ 647,458 $ 16,894,103 Non-controlling interests in consolidated variable interest entity $ 1,294,846 $ (1,294,846 ) $ - Total shareholders' equity $ 13,734,420 $ (647,388 ) $ 13,087,032 Total liabilities and shareholders' equity $ 16,070,008 $ (310,002 ) $ 15,760,006 (1) There was no impact to the Company's consolidated statements of operations. (2) The Company does not own the VIE's portion of this asset. Amounts relating to the VIE are accounts receivable, net of $113,599 and inventory, net of $768,633. |
Going Concern Uncertainty, Fina
Going Concern Uncertainty, Financial Conditions and Management's Plans | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN UNCERTAINTY, FINANCIAL CONDITIONS AND MANAGEMENT’S PLANS | 4. GOING CONCERN UNCERTAINTY, FINANCIAL CONDITIONS AND MANAGEMENT'S PLANS The Company believes that there is substantial doubt about the Company's ability to continue as a going concern. The Company believes that its available cash balance as of the date of this filing will not be sufficient to fund its anticipated level of operations for at least the next twelve months. The Company believes that, at the present time, its ability to continue operations depends on the sale of assets as well as its ability to access capital markets when necessary to accomplish the Company's strategic objectives. The Company believes that the Company will continue to incur losses for the immediate future. The Company expects to finance future cash needs from the results of operations and, depending on the results of operations, the Company will need additional equity, debt financing or assets sales until the Company can achieve profitability and positive cash flows from operating activities, if ever. There can be no assurance that the Company will be able to attract needed financing or be able to sell assets on reasonable terms, if at all. On March 11, 2020, the 2019 novel coronavirus ("COVID-19) was characterized as a "pandemic." The Company's operations were impacted during the quarter in the United States. The impact of COVID-19 developments and uncertainty with respect to the economic effects of the pandemic has introduced significant volatility in the financial markets. The Company assessed certain accounting matters that require consideration of forecasted financial information, including, but not limited to, the carrying value of the Company's goodwill, intangible assets, and other long-lived assets, and valuation allowances in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of December 31, 2020 and through the date of this report. The Company's future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Consolidated Financial Statements in future reporting periods. Our financial statements for the year ended December 31, 2020 have been prepared on a going concern basis and contain an additional explanatory paragraph which identifies issues that raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. The continuation of our company as a going concern is dependent upon the continued financial support from its shareholders, the ability of our company to obtain necessary equity or debt financing to continue operations, the sale of assets, and ultimately the attainment of profitable operations. For the year ended December 31, 2020, our company used $3,749,621 of cash for operating activities, incurred a net loss of $11,815,907 and has an accumulated deficit of $15,729,194 since inception. These factors raise substantial doubt regarding our company's ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should our company be unable to continue as a going concern. The (COVID-19) pandemic and responses to this crisis, including actions taken by federal, state and local governments, have had an impact on the operations of the company, including, without limitation, the following: reduced staffing due to employee suspected conditions and social distancing measures; constraints on productivity; management and staff non-essential business-related travel was constrained due to stay-at-home orders; most employees have shifted to remote work resulting in loss of productivity; consumers visiting dispensaries operated under license impacted by stay-at-home orders. Management continues to monitor the COVID-19 pandemic situation and federal, state and local recommendations and will provide updates as appropriate. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with GAAP. The consolidated financial statements include the accounts of the Andina Gold, General Extract, and CMI, a VIE for which the Company is deemed to be the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation. The Company operates as one segment from its corporate headquarters in Colorado. 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 determining the fair value of the assets acquired and liabilities assumed in acquisition, determining the fair value and potential impairment of inventory, 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 consolidated financial statements were reclassified from prior periods for presentation purposes. Cash and Cash Equivalents The Company considers all highly liquid instruments with maturities of three months or less at the time of issuance to be cash equivalents. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. Periodically, the Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company deposits its cash in financial institutions that it believes have high credit quality and has not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Accounting for Business Combinations and Acquisitions 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. 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. Variable Interest Entities The Company accounts for variable interest entities in accordance with FASB ASC Topic 810, Consolidation Accounts Receivable, net Accounts receivable, net is comprised of balances due from customers and are recorded at the invoiced amount. Past due balances are determined based on the contractual terms of the arrangements. Accounts receivable are accrued against when management determines, after considering economic and business conditions and all means of collection efforts have been exhausted and the potential for recovery is considered remote, that the collection of receivables is doubtful. Accounts receivable amounts, net of allowance for doubtful accounts, were $606,043 and $113,599 as of December 31, 2020 and 2019, respectively. This includes $66,043 and $113,599, respectively, related to the VIE, which is classified as held for sale. Uncollectible accounts previously recorded as receivables are recognized as bad debt expense, with a corresponding decrease to accounts receivable. Bad debt expense was $188,548 and $15,615 for the years ended December 31, 2020 and 2019, respectively. This amount includes $4,548 and $15,615, respectively, related to the VIE, which is classified as discontinued operations. Inventory, net Inventory, net is comprised of work-in-process and finished goods consisting of cannabis and cannabidiol products. Cost includes expenditures directly related to the manufacturing process as well as suitable portions of related production overheads, based on normal operating capacity. Inventory, net is stated at the lower of cost or net realizable value. The Company compares the cost of inventory with market value and writes down inventories to net realizable value, if lower. In evaluating whether inventories are stated at lower of cost or net realizable value, management considers such factors as inventories on hand, physical deterioration, obsolescence, changes in price levels, estimated time to sell such inventories and current market conditions. Due to changing market conditions, management conducted a thorough review of its inventory. As a result, a provision for inventory losses of $400,787 and $163,800 was charged against cost of goods sold during the years ended December 31, 2020 and 2019, respectively, due to a write down of inventory to its net realizable value. This was based on the Company's best estimates of product sales prices and customer demand patterns. It is at least reasonably possible that the estimates used by the Company to determine its provision for inventory losses will be materially different from the actual amounts or results. These differences could result in materially higher than expected inventory provisions, which could have a materially adverse effect on the Company's results of operations and financial conditions in the near term. Revenue Recognition Under FASB Topic 606, Revenue from Contacts with Customers The Company's revenue consists of sales of cannabis and ancillary products to both retail consumers and wholesale customers. 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 ("METRC") system. Revenue is recognized upon transfer of control of promised products to customers, generally as risk of loss passes, 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, which were not material for the years ended December 31, 2020 and 2019. The Company operates in 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. Expenses Cost of Goods Sold, Net of Depreciation and Amortization Cost of goods sold primarily consisted of allocated salaries and wages of employees directly related with the production process, allocated depreciation and amortization directly related to the production process, cultivation supplies, rent and utilities. Operating Expenses Operating expenses encompass personnel costs, sales and marketing expenses, general and administrative expenses, professional and legal fees and depreciation and amortization related to the property and equipment and intangibles acquired through the acquisition of CMI. Personnel costs consist primarily of consulting expense and administrative salaries and wages. Sales and marketing expenses consist primarily of advertising and marketing, and salaries related to sales and marketing employees. General and administrative expenses are comprised of travel expenses, accounting expenses, and board fees. Professional services are principally comprised of outside legal and professional fees. Other Expense, net Other expense, net consisted of interest expense, loss on impairment of goodwill, other income and (loss) gain on foreign exchange. Stock-Based Compensation We account for stock-based compensation under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 718, Compensation – Stock Compensation. Property and Equipment, net Purchase of property and equipment are recorded at cost. Improvements and replacements of property 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. Indefinite-lived intangible assets established in connection with business combinations consist of trademarks, trade names and developed manufacturing processes. Intangible assets with indefinite lives are recorded at their estimated fair value at the date of acquisition. 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. Amortization of assets ceases upon designation as held for sale. The estimated useful lives of intangible assets are detailed in the table below: Estimated Useful Life Customer relationships 6 years Trademark/trade name Indefinite Developed manufacturing process Indefinite Impairment of Goodwill and Intangible Assets Goodwill Goodwill is not amortized, but instead is tested annually at December 31 for impairment and upon the occurrence of certain events or substantive changes in circumstances. We account for the impairment of goodwill under the provisions of Financial Accounting Standards Board (FASB) Accounting Standard Update 2017-04 ("ASU 2017-04"), " Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment Intangibles – Goodwill and Other - Goodwill The Company performs impairment testing for goodwill by performing the following steps: 1) evaluate the relevant events or circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, 2) if yes to step 1, calculate the fair value of the reporting unit and compare it with its carrying amount, including goodwill, 3) recognize impairment, limited to the total amount of goodwill allocated to that reporting unit, equal to the excess of the carrying value of a reporting unit over its fair value. As of December 31, 2020, management concluded that the goodwill resulting from the CMI transaction (Note 7) was impaired. See Note 11. Indefinite-Lived Intangible Assets Indefinite-lived intangible assets 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. We account for the impairment of indefinite-lived intangible assets under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 350-30-35, Intangibles – Goodwill and Other – General Intangibles Other Than Goodwill As of December 31, 2020, management concluded that indefinite-lived intangible assets were impaired. See Note 11. Intangible Assets Subject to Amortization Intangible assets subject to amortization are tested annually at December 31 for impairment and upon the occurrence of certain events or substantive changes in circumstances. We account for the impairment of intangible assets subject to amortization under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 360-10-35, Property, Plant, and Equipment As of December 31, 2020, management concluded that intangible assets subject to amortization were impaired. See Note 11. Contingencies An initial right-of-use ("ROU") asset and corresponding liability of $1,411,461 was recognized upon the CMI Transaction. The Company adopted ASU Topic 842 January 1, 2019, but had no reportable operating leases at that point in time. Income Taxes The Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes Comprehensive Loss ASC 220, Comprehensive Income 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, prepaid expenses, inventories, accounts payable, notes payable, and taxes 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. Net Loss per Share The Company follows ASC 260, Earnings Per Share Assets and Liabilities of Discontinued Operations Held for Sale Assets and liabilities are classified as held for sale when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the assets; (2) the assets are available for immediate sale, in their present condition, subject only to terms that are usual and customary for sales of such assets; (3) an active program to locate a buyer and other actions required to complete the plan to sell the assets have been initiated; (4) the sale of the assets is probable and is expected to be completed within one year; (5) the assets are being actively marketed for a price that is reasonable in relation to their current fair value; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. When all of these criteria have been met, the assets (and liabilities) are classified as held for sale in the balance sheet. Assets classified as held for sale are reported at the lower of their carrying value or fair value less costs to sell. Depreciation of assets ceases upon designation as held for sale. See Note 8. Recent Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity's Own Equity (Subtopic 815-40). In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (ASC 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (ASC 350), In February 2016, the FASB issued ASU No. 2016-02, Leases |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2020 | |
Revenue Recognition [Abstract] | |
REVENUE RECOGNITION | 6. REVENUE RECOGNITION Disaggregated Revenue For the Years Ended 2020 2019 Types of Revenues: Medical retail (amounts related to VIE discontinued operations of $4,698,428 and $2,324,024, respectively) $ 4,709,628 $ 2,337,024 Medical wholesale (amounts related to VIE discontinued operations of $1,319,944 and $374,458, respectively) 1,320,644 379,706 Recreational wholesale (amounts related to VIE discontinued operations of $837,414 and $753,405, respectively) 1,606,969 753,405 Other revenues (amounts related to VIE discontinued operations of $4,496 and $8,679, respectively) 4,496 8,679 Total revenues $ 7,641,737 $ 3,478,814 |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATION | 7. BUSINESS COMBINATION Effective July 15, 2019, the Company acquired cannabis brands and other assets of CMI. In consideration of the sale and transfer of the acquired assets, the Company delivered 13,553,233 shares of Andina Gold common stock, in addition to $1,999,770 in cash to the members of CMI. The CMI Transaction was accounted for as a business combination in accordance with ASC 805, Business Combinations Cash $ 1,999,770 Common stock 6,776,617 Total purchase price $ 8,776,387 Description Fair Value Weighted average useful life Assets acquired: Cash $ 136,654 Other current assets 74 Property and equipment, net 1,985,738 Intangible assets: Customer relationships 215,900 6 Trademark/trade name 1,340,000 Indefinite Developed manufacturing process 1,330,000 Indefinite Goodwill 4,663,514 Right of use asset 1,411,461 Deposits 12,348 Total assets acquired $ 11,095,689 Liabilities assumed: Notes payable $ 147,268 Notes payable, related parties 760,573 Right of use liability 1,411,461 Total liabilities assumed 2,319,302 Estimated fair value of net assets acquired $ 8,776,387 Unaudited Pro Forma Results CMI contributed a net loss of $4,945,229 for the year ended December 31, 2020 and contributed net income of $302,485 for the year ended December 31, 2019. CMI is included in discontinued operations in the Company's consolidated statements of operations. The following table below represents the revenue, net loss and loss per share effect of the acquired company, as reported in our pro forma basis as if the acquisition occurred on January 1, 2019. These pro forma results are not necessarily indicative of the results that actually would have occurred if the acquisition had occurred on the first day of the periods presented, nor does the pro forma financial information purport to represent the results of operations for future periods. For the Years Ended 2020 2019 Net Sales $ 7,641,737 $ 6,798,227 Net loss $ (11,815,907 ) $ (2,459,275 ) Net loss per common share $ (0.12 ) $ (0.02 ) |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2020 | |
Cash, Including Discontinued Operations [Abstract] | |
DISCONTINUED OPERATIONS | 8. 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 consolidated balance sheets include the following carrying amounts of assets and liabilities related to these Devco discontinued operations: As of As of As of Assets Cash $ - $ - $ 18,472 Prepaid expenses and advances - - 29,980 Current assets held for sale - - 48,452 Property and equipment, net - - 456,762 Total assets held for sale - - 505,214 Liabilities Accounts payable and accrued liabilities - - 23,123 Total liabilities held for sale - - 23,123 Net assets $ - $ - $ 482,091 * - Date of Devco disposition The consolidated statements of operations include the following operating results related to these Devco discontinued operations: Year Ended 2020 2019 Selling, marketing and administrative $ - $ 19,716 Impairment loss - 903 Interest expense - 310 Net loss from discontinued operations, before taxes - (20,929 ) Income taxes - 1,350 Net loss from discontinued operations, net of tax $ - $ (22,279 ) Foreign currency translation adjustments - (5,370 ) Comprehensive loss from discontinued operations, net of tax $ - $ (27,649 ) For the year ended December 31, 2019, statements of cash flows include non-cash impairment charges of $903 and depreciation expense of $368 related to these Devco discontinued operations. In June 2020, the Company's board of directors adopted a plan to exit the cultivation, manufacturing of infused products and retail distribution businesses through the sale of Good Meds. The Company determined that the intended sale represented a strategic shift that will have a major effect on the Company's operations and financial results and therefore, for financial statement reporting purposes classified Good Meds and its consolidated VIE CMI as held for sale at December 31, 2020 and December 31, 2019. The accompanying consolidated balance sheets include the following carrying amounts of assets and liabilities related to these CMI discontinued operations: December 31, December 31, Assets Accounts receivable, net $ 66,043 $ 113,599 Prepaid expenses 7,601 11,588 Inventory, net 791,868 768,633 Property and equipment, net 2,714,771 2,152,626 Goodwill - 4,663,514 Intangible assets, net 2,481,128 2,869,247 Security deposits 11,522 15,608 Right of use asset, net 794,907 1,243,732 Total current assets held for sale 6,867,840 11,838,547 Total assets held for sale $ 6,867,840 $ 11,838,547 Liabilities Accounts payable and accrued expenses 211,463 337,386 Taxes payable 22,645 24,865 Notes payable, related parties 458,599 307,450 Right of use liability 771,578 1,243,732 Total liabilities held for sale 1,464,285 1,913,433 Net assets $ 5,403,555 $ 9,925,114 The consolidated statements of operations include the following operating results related to these CMI discontinued operations: Year Ended 2020 2019 Net sales $ 6,860,282 $ 3,460,566 Cost of goods sold, inclusive of depreciation 4,901,237 2,237,004 Gross profit 1,959,045 1,223,562 Operating expenses: Personnel costs 402,389 266,165 Sales and marketing 908,502 414,210 General and administrative 231,376 132,894 Legal and professional fees 156,782 81,234 Amortization expense 26,901 16,653 Total operating expenses 1,725,950 911,156 Gain from operations 233,095 312,406 Other income (expenses): Interest expense (153,592 ) (13,013 ) Goodwill impairment (4,663,514 ) - Intangibles impairment (361,218 ) - Other income - 3,092 Total other income (expenses) (5,178,324 ) (9,921 ) Net gain / (loss) from discontinued operations, before taxes (4,945,229 ) 302,485 Income taxes - - Net gain / (loss) from discontinued operations $ (4,945,229 ) $ 302,485 |
Inventory, Net
Inventory, Net | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORY, NET | 9. INVENTORY, NET Inventory, net consisted of the following: December 31, December 31, Finished goods (amounts related to VIE discontinued operations of $431,466 and $416,871, respectively) $ 431,466 $ 920,671 Work-in-process inventory grow (amounts related to VIE discontinued operations of $360,402 and $351,762, respectively) 360,402 351,762 Provision for inventory losses (amounts related to VIE discontinued operations of $0 and $0, respectively) - (163,800 ) $ 791,868 $ 1,108,633 The Company re-negotiated the purchase price of General Extract's cannabidiol finished goods inventory, resulting in a $240,000 reduction in cost as of December 31, 2019 and resulting in an additional $220,800 reduction in cost as of December 31, 2020. All remaining cannabidiol finished goods inventory was sold in 2020 Q2. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 10. PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following. All property and equipment is owned by CMI and classified as held for sale. December 31, December 31, Leasehold improvements $ 2,770,385 $ 2,223,609 Machinery and equipment 1,065,885 888,786 Furniture and fixtures 43,331 43,331 Construction in progress 227,995 258,615 4,107,596 3,414,341 Less: Accumulated depreciation (1,392,825 ) (1,261,715 ) $ 2,714,771 $ 2,152,626 Depreciation expense for the years ended December 31, 2020 and 2019 was $131,110 and $129,067, respectively. Depreciation expense was recorded in cost of goods sold and general and administrative expense and is included in discontinued operations. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 11. GOODWILL AND INTANGIBLE ASSETS The Company tests goodwill and intangible assets for impairment annually as of December 31 st , Intangibles – Goodwill and Other - Goodwill. Intangibles – Goodwill and Other – General Intangibles Other Than Goodwill Property, Plant, and Equipment The carrying value of goodwill was $0 and $4,663,514 as of December 31, 2020 and 2019, respectively. Goodwill is classified as held for sale as Of December 31, 2019. The following tables summarize information relating to the Company's identifiable intangible assets, which are classified as held for sale, as of December 31, 2020 and 2019: December 31, 2020 Estimated Useful Life (Years) Gross Amount Accumulated Amortization Impairment Carrying Value Amortized Customer relationships 6 years $ 215,900 $ (43,554 ) $ (27,023 ) $ 145,323 Total amortized 215,900 (43,554 ) (27,023 ) 145,323 Indefinite-lived Trademark/trade name Indefinite 1,340,000 - (167,723 ) 1,172,277 Developed manufacturing process Indefinite 1,330,000 - (166,472 ) 1,163,528 Total indefinite-lived 2,670,000 - (334,195 ) 2,335,805 Total identifiable intangible assets $ 2,885,900 $ (43,554 ) $ (361,218 ) $ 2,481,128 December 31, 2019 Estimated Useful Life (Years) Gross Amount Accumulated Amortization Impairment Carrying Value Amortized Customer relationships 6 years $ 215,900 $ (16,653 ) $ - $ 199,247 Total amortized 215,900 (16,653 ) - 199,247 Indefinite-lived Trademark/trade name Indefinite 1,340,000 - - 1,340,000 Developed manufacturing process Indefinite 1,330,000 - - 1,330,000 Total indefinite-lived 2,670,000 - - 2,670,000 Total identifiable intangible assets $ 2,885,900 $ (16,653 ) $ - $ 2,869,247 Amortization expense, which is included in discontinued operations, was $26,901 and $16,653 for the years ended December 31, 2020 and 2019, respectively. Amortization of intangible assets with a finite useful life ceased upon held-for-sale classification. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | 12. DEBT On July 27, 2020, the Company entered into a subscription agreement consisting of 1) a convertible note and 2) warrants. The 1) convertible note has a face value of $250,000, matures August 1, 2022, and accrues interest at 8% per annum. The note is convertible into 2,500,000 shares of the Company's common stock at a conversion price of $0.10 per share. The beneficial conversion feature is accounted for in accordance with ASC 470-20 Debt with Conversion and Other Options On August 26, 2020, the Company entered into a $600,000 loan agreement, which accrues interest at 84% per annum. The loan is repaid on a weekly basis up to the maturity date of April 7, 2021. The loan balance as of December 31, 2020 is $412,560. The Company underwent a capital raise in 2020 and issued 3,535,665 subscription units, each containing one share of common stock and one warrant share. The warrants have an exercise price of $0.30 and expire November 1, 2022. The fair value of the warrants is $0 as of December 31, 2020. No warrants were exercised during the year ended December 31, 2020. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 13. RELATED PARTY TRANSACTIONS In conjunction with the CMI Transaction, the Company assumed a note payable in which the note holder, John Knapp ("Knapp") is a significant shareholder in the Company. Additionally, Knapp is a former executive and board director, as well as current shareholder in PharmaCielo Ltd. ("PharmaCielo"), a supplier of naturally grown and processed medicinal-grade cannabis oil extracts. Effective February 25, 2020, Knapp resigned as a director of Andina Gold, at which time 200,000 Restricted Stock Units were deemed to have vested and were converted into 200,000 common shares. Refer to Note 2 for additional details on the relationship of CMI as a VIE. On August 6, 2020, the Company formalized the terms of a note payable to John Knapp. The note bears interest on an annual basis of 25% and is convertible into shares of common stock at a price of $0.25 per share. The note matures on January 31, 2021. The outstanding balance of the notes payable, related party was $458,599 and $307,450 as of December 31, 2020 and 2019, respectively. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | 14. SHAREHOLDERS' 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 $72,096. In July 2019, the Company issued 13,553,233 shares of common stock in connection with the CMI Transaction (refer to Note 7). During the year ended December 31, 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. In February 2020, the Company issued 400,000 shares of common stock pursuant to accelerated vesting of RSU's upon the resignation of a former executive. In February 2020, the Company issued 200,000 shares of common stock pursuant to accelerated vesting of RSU's upon the resignation of a former board member. In March 2020, the Company issued 1,175,549 shares of common stock to a former executive per a separation agreement. In June 2020, four shareholders submitted 15,050,000 shares of common stock for cancellation pursuant to prior agreements among certain shareholders. Accordingly, the Company cancelled 15,050,000 shares of common stock. In July 2020, the Company issued 10,000 shares of common stock to a former employee per a separation agreement. In July 2020, one shareholder submitted 300,000 shares of common stock for cancellation pursuant to prior agreements. Accordingly, the Company cancelled 300,000 shares of common stock. In August 2020, the Company issued 60,000 shares of common stock in order to raise capital. In August 2020, the Company issued 757,895 shares of common stock to former board members per a separation agreement. From October to December 2020, the Company issued 3,535,665 shares of common stock in order to raise capital. Stock Incentive Plan The Company adopted its 2019 Omnibus Stock Incentive Plan (the "2019 Plan"), which provides for the issuance of stock options, stock grants and RSUs to employees, directors and consultants. The primary purpose of the 2019 Plan is to enhance the ability to attract, motivate, and retain the services of qualified employees, officers and directors. Any RSUs or stock options granted under the 2019 Plan will be at the discretion of the Compensation Committee of the Board of Directors. For the year ended December 31, 2020, the total stock compensation expense was $1,440,284 and consisted of $734,752 related to RSUs, $150,000 related to a separation agreement, and $555,532 related to stock options. Expenses for stock-based compensation is included on the accompanying consolidated statements of operations in general and administrative expense. No cash was used to settle equity instruments granted under share-based payment arrangements. Restricted Stock Unit Awards A summary of the Company's RSU award activity for the year ended December 31, 2020 is as follows: Restricted Stock Units Weighted Average Grant Date Fair Value Outstanding at December 31, 2019 - $ - Granted 6,603,962 0.44 Vested (1,367,895 ) 0.23 Forfeited (2,782,895 ) 0.57 Outstanding at December 31, 2020 2,453,172 $ 0.42 The requisite service period for RSUs is two years. RSUs will be converted to common stock within 74 days following fulfillment of the service period. The fair value of RSUs is calculated using the grant date stock price. The total fair value of RSUs vested during the years ending December 31, 2020 and 2019 was $309,790 and $0, respectively. As of December 31, 2020 and 2019, there was $600,241 and $0, respectively, of unrecognized stock-based compensation cost related to non-vested RSU's. The weighted-average period over which the $600,241 is expected to be recognized is 1.19 years. Stock-based compensation expense relating to RSU's was $734,752 and $0 for the years ending December 31, 2020 and 2019, respectively. Stock-based compensation relating to RSU's for the year ending December 31, 2020 consisted of equity awards forfeited, granted and vested to employees, directors and consultants of the Company in the amount of $145,183, $518,043, and $71,526, respectively. Stock Options A summary of the Company's stock options activity for the year ended December 31, 2020 is as follows: Stock Option Shares Weighted Average Exercise Price Outstanding at December 31, 2019 - $ - Granted 3,500,000 0.16 Exercised - - Forfeited - - Expired - - Outstanding at December 31, 2020 3,500,000 $ 0.16 On October 29, 2020, the Company awarded stock options for 3,500,000 shares at an exercise price of $0.16 per share. These options vested immediately, expire October 29, 2030, and were exercisable at the end of the year. As of December 31, 2020, the aggregate intrinsic value was $140,000 and the weighted average remaining contractual term was zero years for the share options outstanding and exercisable. The fair value of the options was calculated using the Black-Scholes model and was $555,532 as of the grant date. The following assumptions were used to estimate fair value: Expected term 5 years Expected volatility 237.0 % Expected dividends 0.0 % Risk-free rate 0.4 % Discount for post-vesting restrictions - |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 15. INCOME TAXES Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in the tax laws and rates on the date of enactment. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. The provision (benefit) for income taxes for the years ended December 31, 2020 and 2019 consists of: 2020 2019 Current (benefit) provision Federal $ - $ - State - - Total Current - - Deferred (benefit) provision Federal $ 3,724 $ 1,707 State 6,511 2,984 Total Deferred $ 10,235 $ 4,691 Total Provision $ 10,235 $ 4,691 The statutory federal income tax rate (21 percent) for the years ended December 31, 2020 and 2019 is reconciled to the effective income tax rate as follows: 2020 2019 Tax Percentage Tax Percentage Income Taxes At Statutory Federal Income Tax Rate $ (2,517,221 ) 21.00 % $ (638,414 ) 21.00 % State Taxes, Net Of Federal Income Tax Benefit 6,511 (0.05 ) 2,984 (0.10 ) Meals & Entertainment 261 0.00 1,250 (0.04 ) Penalties and Fines - 0.00 - 0.00 Return to Provision Adjustment - Permanent Items - 0.00 - 0.00 Deferred Only Adjustment (228,539 ) 1.91 64,018 (2.11 ) Change in Valuation Allowance 200,791 (1.68 ) 242,204 (7.97 ) Section 280E Expense Disallowance 2,548,431 (21.26 ) 324,745 (10.68 ) Other - 0.00 7,904 (0.26 ) Effective tax $ 10,235 (0.09 )% $ 4,691 (0.16 )% Deferred tax assets and liabilities by type at December 31, 2020 and 2019 are as follows: Deferred Tax Assets (Liabilities): 2020 2019 Stock Compensation $ 62,606 $ - Fixed Assets - Depreciation - COGS - (60,244 ) Fixed Assets - Depreciation - Non COGS - 456 Trademark/Trade Name (4,765 ) (1,498 ) Developed Manufacturing Process - Extraction (31,884 ) (10,021 ) Customer Relationships 1,158 368 Cannabis Licenses - 1,257 Goodwill - CMI 168,688 10,567 IPR&D 105,985 113,836 NOL - Federal Pre-2018 43,367 43,368 NOL - Federal Post-2017 377,529 295,034 NOL - State 294,183 119,215 Deferred Tax Assets (Liabilities) $ 1,016,867 $ 512,338 Valuation Allowance (1,031,792 ) (517,029 ) Net Deferred Tax Assets (Liabilities) $ (14,926 ) $ (4,691 ) At December 31, 2020 and 2019, the Company had federal net operating loss carryforwards of approximately $2,004,266 and $1,094,388 that may be offset against future taxable income from the years 2021 through 2040. State net operating losses were approximately $8,042,840 and $2,057,792 at December 31, 2020 and 2019. However, as a result of the 2017 Tax Cuts and Jobs Act ("TCJA") and the 2020 Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), any federal net operating losses generated in years beginning after December 31, 2017 and before January 1, 2021 can be carried forward indefinitely to offset taxable income in future periods. The amount of NOLs with no expiration totaled $1,797,757 as of December 31, 2020. The deferred tax assets before valuation allowance for the net operating losses were $715,079 and $325,097 as of December 31, 2020 and 2019. Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. On the basis of this evaluation, as of December 31, 2020, the Company has recorded a full valuation allowance against its net deferred tax assets. The valuation allowance is estimated to be approximately $1,031,792 and $384,510 for the years ended December 31, 2020 and 2019, respectively. However, because deferred tax liabilities related to indefinite lived intangibles cannot be used as a source of income to recognize deferred tax assets with definite lives, the recorded valuation allowance exceeded the net deferred assets resulting in an overall net deferred tax liability, as reflected in the table above. The Company has adopted the provisions of ASC 740 which prescribe the procedures for recognition and measurement of tax positions taken or expected to be taken in income tax returns. As of December 31, 2020, the Company does not have an accrual relating to uncertain tax positions. It is not anticipated that unrecognized tax benefits would significantly increase or decrease within 12 months of the reporting date. |
Commitments & Contingencies
Commitments & Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS & CONTINGENCIES | 16. COMMITMENTS & CONTINGENCIES Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company's consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. Lease Commitments The Company accounts for lease transactions in accordance with Topic 842, Leases Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. 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. 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. Management determined that there were no variable lease costs during the years ended December 31, 2020 and 2019. 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. Operating Leases The Company adopted ASU Topic 842 January 1, 2019, but had no reportable operating leases at that point in time. Upon the CMI transaction, an initial right-of-use ("ROU") asset of $1,411,461 was recognized. The present value of this lease liability decreased by $472,154 for the year ended December 31, 2020 and decreased by $167,729 for the period from the acquisition to December 31, 2019. This activity is included in operating activities from discontinued operations line item of the statement of cash flows. Operating lease cost was $627,132 for the year ended December 31, 2020 and was $252,290 for the period from the acquisition to December 31, 2019 and. The CMI transaction ROU leases consist of the following: The Company leases its Englewood retail location from an unrelated third party. The lease expires in May 2022 and lease payments increase approximately 5% of base rent annually. The Company has the option to extend the lease for an additional five years. The rent during the extended lease term will be determined at the time of renewal. The Company leases its production facility location from an unrelated third party. The lease expires in April 2022 and lease payments increase approximately 5% of base rent annually. The Company has the option to extend the lease for an additional five-year term, commencing May 1, 2022 through April 30, 2027. Rent shall increase at the rate of 4% per year compounded during the extended lease term. The Company leases its Lakewood retail location from an unrelated third party. The lease expires in March 2021 and lease payments increase approximately 5% of base rent annually. Future minimum lease commitments under operating leases as of December 31, 2020 are as follows: Years Ending December 31, 2021 $ 638,586 2022 218,168 Total undiscounted operating lease payments 856,754 Less: imputed interest (85,176 ) Present value of operating lease liability $ 771,578 Weighted-average remaining lease term (years) 1.25 Weighted-average remaining discount rate 15 % There are no other leases that meet the reporting standards of ASU Topic 842 as the Company does not have any other leases with a term exceeding twelve months. Lease payments for leases with terms less than twelve months are not accounted for under ASU Topic 842 and were $73,777 and $23,322 for the years ended December 31, 2020 and 2019, respectively. The Company does not have any leases that have not yet commenced which are significant. Legal Proceedings Legal proceedings covering a dispute arising from a past employment agreements is pending against our principal business partner, CMI. In Gaudio v. Critical Mass Industries, LLC et al, the defendant CMI has recently filed an ex-parte application for a Scheduling Order re: motion to set aside entry of default. On March 14, 2021, Plaintiff filed an opposition to CMI's ex parte application. On March 15, 2021, the court issued an order granting CMI's ex parte application. CMI's motion to set aside a default judgment will be heard on April 26, 2021. It is possible that there could be adverse developments in the Gaudio case. An unfavorable outcome or settlement of pending litigation would have a significant impact on our ability to collect receivables from CMI, to complete any of the pending transactions involving our Colorado assets and agreements, and could encourage the commencement of additional litigation against CMI or the Company. We and our subsidiaries will record provisions in the consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. At the present time, while it is reasonably possible that an unfavorable outcome in the Gaudio case may occur, (i) management is unable to estimate the possible loss or range of loss that our Company would undergo that could result from an unfavorable outcome or settlement in Gaudio; and (iii) accordingly, management has not provided any amounts in the consolidated financial statements for an unfavorable outcome in this case, if applicable. Any applicable legal advice costs are expensed as incurred. It is possible that our consolidated results of operations, cash flows or financial position could be materially affected in a particular fiscal quarter or fiscal year by an unfavorable outcome or settlement of certain pending litigation. Nevertheless, although litigation is subject to uncertainty, we and each of our subsidiaries named as a defendant believe, and each has been so advised by counsel handling the respective cases, that we have valid defenses to the litigation pending against us, as well as valid bases for appeal of adverse verdicts, if any. All such cases are, and will continue to be, vigorously defended. However, we and our subsidiaries may enter into settlement discussions in particular cases if we believe it is in our best interests to do so. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 17. SUBSEQUENT EVENTS On February 25, 2021, the board of directors determined that further efforts in the strategy to enter the gold exploration business in Colombia were inadvisable due to restricted travel as a result of Covid-19, local pandemic-related restrictions and the demise of our local expert. On February 25, 2021 the Company entered into a non-binding letter of intent ("LOI") with CryoCann USA Corporation ("CryoCann"), a California company headquartered in Santa Ana, California, for a proposed asset purchase transaction (the "Proposed Transaction"). CryoCann is a designer and seller of equipment developed on the basis of patented technology for cannabis varieties (including hemp) harvesting, drying, refinement, and extraction. The purchase would include all assets of CryoCann. On February 26, 2021, Carlos Hernandez Nunez resigned from the board of directors. His resignation was not the result of any disagreements with the Company. On March 19, 2021, Gary Artmont resigned from the board of directors. His resignation was not the result of any disagreements with the Company. On March29, 2021, the Company entered into an employment agreement with Christian Noel effective April 1, 2021, to serve as our Chief Executive Officer, replacing Christopher Hansen, whose term ends on March 31, 2021. Mr. Noel will also serve on the board of directors as a director, replacing Mr. Hernandez. The Company raised, as of the date of this filing, via a unit offering of convertible notes and warrants, $500,000 to 2 investors. The convertible notes mature on March 31, 2022 and may be prepaid at any after six months. The note holders may convert at any time at a conversion price of $0.20 per share. The warrants expire two years from issuance and are exercisable at a price of $0.40 per share. The offering has been extended to April 15, 2021. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with GAAP. The consolidated financial statements include the accounts of the Andina Gold, General Extract, and CMI, a VIE for which the Company is deemed to be the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation. The Company operates as one segment from its corporate headquarters in Colorado. |
Use of Estimates | 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 determining the fair value of the assets acquired and liabilities assumed in acquisition, determining the fair value and potential impairment of inventory, 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 | Reclassifications Certain items in the consolidated financial statements were reclassified from prior periods for presentation purposes. |
Cash and cash equivalents | Cash and Cash Equivalents The Company considers all highly liquid instruments with maturities of three months or less at the time of issuance to be cash equivalents. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. Periodically, the Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company deposits its cash in financial institutions that it believes have high credit quality and has not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships. |
Accounting for Business Combinations and Acquisitions | Accounting for Business Combinations and Acquisitions 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. 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. |
Variable Interest Entities | Variable Interest Entities The Company accounts for variable interest entities in accordance with FASB ASC Topic 810, Consolidation |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable, net is comprised of balances due from customers and are recorded at the invoiced amount. Past due balances are determined based on the contractual terms of the arrangements. Accounts receivable are accrued against when management determines, after considering economic and business conditions and all means of collection efforts have been exhausted and the potential for recovery is considered remote, that the collection of receivables is doubtful. Accounts receivable amounts, net of allowance for doubtful accounts, were $606,043 and $113,599 as of December 31, 2020 and 2019, respectively. This includes $66,043 and $113,599, respectively, related to the VIE, which is classified as held for sale. Uncollectible accounts previously recorded as receivables are recognized as bad debt expense, with a corresponding decrease to accounts receivable. Bad debt expense was $188,548 and $15,615 for the years ended December 31, 2020 and 2019, respectively. This amount includes $4,548 and $15,615, respectively, related to the VIE, which is classified as discontinued operations. |
Inventory, net | Inventory, net Inventory, net is comprised of work-in-process and finished goods consisting of cannabis and cannabidiol products. Cost includes expenditures directly related to the manufacturing process as well as suitable portions of related production overheads, based on normal operating capacity. Inventory, net is stated at the lower of cost or net realizable value. The Company compares the cost of inventory with market value and writes down inventories to net realizable value, if lower. In evaluating whether inventories are stated at lower of cost or net realizable value, management considers such factors as inventories on hand, physical deterioration, obsolescence, changes in price levels, estimated time to sell such inventories and current market conditions. Due to changing market conditions, management conducted a thorough review of its inventory. As a result, a provision for inventory losses of $400,787 and $163,800 was charged against cost of goods sold during the years ended December 31, 2020 and 2019, respectively, due to a write down of inventory to its net realizable value. This was based on the Company's best estimates of product sales prices and customer demand patterns. It is at least reasonably possible that the estimates used by the Company to determine its provision for inventory losses will be materially different from the actual amounts or results. These differences could result in materially higher than expected inventory provisions, which could have a materially adverse effect on the Company's results of operations and financial conditions in the near term. |
Revenue Recognition | Revenue Recognition Under FASB Topic 606, Revenue from Contacts with Customers The Company's revenue consists of sales of cannabis and ancillary products to both retail consumers and wholesale customers. 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 ("METRC") system. Revenue is recognized upon transfer of control of promised products to customers, generally as risk of loss passes, 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, which were not material for the years ended December 31, 2020 and 2019. The Company operates in 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. |
Expenses | Expenses Cost of Goods Sold, Net of Depreciation and Amortization Cost of goods sold primarily consisted of allocated salaries and wages of employees directly related with the production process, allocated depreciation and amortization directly related to the production process, cultivation supplies, rent and utilities. |
Operating Expenses | Operating Expenses Operating expenses encompass personnel costs, sales and marketing expenses, general and administrative expenses, professional and legal fees and depreciation and amortization related to the property and equipment and intangibles acquired through the acquisition of CMI. Personnel costs consist primarily of consulting expense and administrative salaries and wages. Sales and marketing expenses consist primarily of advertising and marketing, and salaries related to sales and marketing employees. General and administrative expenses are comprised of travel expenses, accounting expenses, and board fees. Professional services are principally comprised of outside legal and professional fees. |
Other Expense, net | Other Expense, net Other expense, net consisted of interest expense, loss on impairment of goodwill, other income and (loss) gain on foreign exchange. |
Stock-Based Compensation | Stock-Based Compensation We account for stock-based compensation under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 718, Compensation – Stock Compensation. |
Property and Equipment, net | Property and Equipment, net Purchase of property and equipment are recorded at cost. Improvements and replacements of property 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 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. Indefinite-lived intangible assets established in connection with business combinations consist of trademarks, trade names and developed manufacturing processes. Intangible assets with indefinite lives are recorded at their estimated fair value at the date of acquisition. 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. Amortization of assets ceases upon designation as held for sale. The estimated useful lives of intangible assets are detailed in the table below: Estimated Useful Life Customer relationships 6 years Trademark/trade name Indefinite Developed manufacturing process Indefinite |
Impairment of Goodwill and Intangible Assets | Impairment of Goodwill and Intangible Assets Goodwill Goodwill is not amortized, but instead is tested annually at December 31 for impairment and upon the occurrence of certain events or substantive changes in circumstances. We account for the impairment of goodwill under the provisions of Financial Accounting Standards Board (FASB) Accounting Standard Update 2017-04 ("ASU 2017-04"), " Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment Intangibles – Goodwill and Other - Goodwill The Company performs impairment testing for goodwill by performing the following steps: 1) evaluate the relevant events or circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, 2) if yes to step 1, calculate the fair value of the reporting unit and compare it with its carrying amount, including goodwill, 3) recognize impairment, limited to the total amount of goodwill allocated to that reporting unit, equal to the excess of the carrying value of a reporting unit over its fair value. As of December 31, 2020, management concluded that the goodwill resulting from the CMI transaction (Note 7) was impaired. See Note 11. |
Indefinite-Lived Intangible Assets | Indefinite-Lived Intangible Assets Indefinite-lived intangible assets 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. We account for the impairment of indefinite-lived intangible assets under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 350-30-35, Intangibles – Goodwill and Other – General Intangibles Other Than Goodwill As of December 31, 2020, management concluded that indefinite-lived intangible assets were impaired. See Note 11. |
Intangible Assets Subject to Amortization | Intangible Assets Subject to Amortization Intangible assets subject to amortization are tested annually at December 31 for impairment and upon the occurrence of certain events or substantive changes in circumstances. We account for the impairment of intangible assets subject to amortization under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 360-10-35, Property, Plant, and Equipment As of December 31, 2020, management concluded that intangible assets subject to amortization were impaired. See Note 11. |
Contingencies | Contingencies An initial right-of-use ("ROU") asset and corresponding liability of $1,411,461 was recognized upon the CMI Transaction. The Company adopted ASU Topic 842 January 1, 2019, but had no reportable operating leases at that point in time. |
Income Taxes | Income Taxes The Company uses the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes |
Comprehensive Loss | Comprehensive Loss ASC 220, Comprehensive Income |
Fair Value Measurements | 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, prepaid expenses, inventories, accounts payable, notes payable, and taxes 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. |
Net Loss per Share | Net Loss per Share The Company follows ASC 260, Earnings Per Share |
Assets and Liabilities of Discontinued Operations Held for Sale | Assets and Liabilities of Discontinued Operations Held for Sale Assets and liabilities are classified as held for sale when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the assets; (2) the assets are available for immediate sale, in their present condition, subject only to terms that are usual and customary for sales of such assets; (3) an active program to locate a buyer and other actions required to complete the plan to sell the assets have been initiated; (4) the sale of the assets is probable and is expected to be completed within one year; (5) the assets are being actively marketed for a price that is reasonable in relation to their current fair value; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. When all of these criteria have been met, the assets (and liabilities) are classified as held for sale in the balance sheet. Assets classified as held for sale are reported at the lower of their carrying value or fair value less costs to sell. Depreciation of assets ceases upon designation as held for sale. See Note 8. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity's Own Equity (Subtopic 815-40). In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (ASC 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (ASC 350), In February 2016, the FASB issued ASU No. 2016-02, Leases |
Variable Interest Entity (Table
Variable Interest Entity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |
Schedule of Variable Interest Entity | Cannabis License Assets & Liabilities As of December 31, Description 2020 2019 Current assets Cash and cash equivalents $ 196,445 $ 467,460 Accounts receivable, net 66,043 113,599 Inventory, net 791,868 768,633 Total current assets 1,054,356 1,349,692 Total assets $ 1,054,356 $ 1,349,692 Current liabilities Accounts payable and accrued expenses $ 211,463 $ 337,386 Total current liabilities 211,463 337,386 Total liabilities 211,463 337,386 Net assets $ 842,893 $ 1,012,306 |
Schedule of description of operating results of Variable Interest Entities | CMI Statement of Operations For the Years Ended December 31, Description 2020 2019 Net sales $ 6,860,282 $ 3,460,566 Cost of goods sold, inclusive of depreciation 4,901,237 2,237,004 Gross profit $ 1,959,045 $ 1,223,562 Operating expenses Personnel costs 402,389 266,165 Sales and marketing 908,502 414,210 General and administrative 231,376 132,894 Legal and professional fees 156,782 81,234 Amortization expense 26,901 16,653 Total operating expenses 1,725,950 911,156 Gain from operations $ 233,095 $ 312,406 Other income / (expense) Interest expense (153,592 ) (13,013 ) Goodwill impairment (4,663,514 ) - Intangibles impairment (361,218 ) Other income - 3,092 Total other income / (expense) (5,178,324 ) (9,921 ) Net income / (loss) $ (4,945,229 ) $ 302,485 |
Revision of Prior Period Fina_2
Revision of Prior Period Financial Statements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revision of Prior Period Financial Statements [Abstract] | |
Schedule of impact of these adjustments on consolidated financial statements | December 31, 2019 Previously Reported Non-controlling Interest Adjustment Revised (1) Inventory, net (2) $ 340,000 $ 768,633 $ 1,108,633 Accounts receivable, net (2) $ - $ 113,599 $ 113,599 Total current assets $ 3,933,047 $ 882,232 $ 4,815,279 Goodwill $ 5,855,748 $ (1,192,234 ) $ 4,663,514 Total assets $ 16,070,008 $ (310,002 ) $ 15,760,006 Accounts payable and accrued expenses $ 754,850 $ 337,386 $ 1,092,236 Total current liabilities $ 1,558,821 $ 337,386 $ 1,896,207 Total liabilities $ 2,335,588 $ 337,386 $ 2,672,974 Additional paid-in capital $ 16,246,645 $ 647,458 $ 16,894,103 Non-controlling interests in consolidated variable interest entity $ 1,294,846 $ (1,294,846 ) $ - Total shareholders' equity $ 13,734,420 $ (647,388 ) $ 13,087,032 Total liabilities and shareholders' equity $ 16,070,008 $ (310,002 ) $ 15,760,006 (1) There was no impact to the Company's consolidated statements of operations. (2) The Company does not own the VIE's portion of this asset. Amounts relating to the VIE are accounts receivable, net of $113,599 and inventory, net of $768,633. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful life of property and equipment | 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 | Estimated Useful Life Customer relationships 6 years Trademark/trade name Indefinite Developed manufacturing process Indefinite |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue Recognition [Abstract] | |
Schedule of disaggregated revenue | For the Years Ended 2020 2019 Types of Revenues: Medical retail (amounts related to VIE discontinued operations of $4,698,428 and $2,324,024, respectively) $ 4,709,628 $ 2,337,024 Medical wholesale (amounts related to VIE discontinued operations of $1,319,944 and $374,458, respectively) 1,320,644 379,706 Recreational wholesale (amounts related to VIE discontinued operations of $837,414 and $753,405, respectively) 1,606,969 753,405 Other revenues (amounts related to VIE discontinued operations of $4,496 and $8,679, respectively) 4,496 8,679 Total revenues $ 7,641,737 $ 3,478,814 |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of business acquisitions | Cash $ 1,999,770 Common stock 6,776,617 Total purchase price $ 8,776,387 Description Fair Value Weighted average useful life Assets acquired: Cash $ 136,654 Other current assets 74 Property and equipment, net 1,985,738 Intangible assets: Customer relationships 215,900 6 Trademark/trade name 1,340,000 Indefinite Developed manufacturing process 1,330,000 Indefinite Goodwill 4,663,514 Right of use asset 1,411,461 Deposits 12,348 Total assets acquired $ 11,095,689 Liabilities assumed: Notes payable $ 147,268 Notes payable, related parties 760,573 Right of use liability 1,411,461 Total liabilities assumed 2,319,302 Estimated fair value of net assets acquired $ 8,776,387 |
Schedule of pro forma financial information | For the Years Ended 2020 2019 Net Sales $ 7,641,737 $ 6,798,227 Net loss $ (11,815,907 ) $ (2,459,275 ) Net loss per common share $ (0.12 ) $ (0.02 ) |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Cash, Including Discontinued Operations [Abstract] | |
Schedule of discontinued operations carrying amounts of assets and liabilities | As of As of As of Assets Cash $ - $ - $ 18,472 Prepaid expenses and advances - - 29,980 Current assets held for sale - - 48,452 Property and equipment, net - - 456,762 Total assets held for sale - - 505,214 Liabilities Accounts payable and accrued liabilities - - 23,123 Total liabilities held for sale - - 23,123 Net assets $ - $ - $ 482,091 * - Date of Devco disposition December 31, December 31, Assets Accounts receivable, net $ 66,043 $ 113,599 Prepaid expenses 7,601 11,588 Inventory, net 791,868 768,633 Property and equipment, net 2,714,771 2,152,626 Goodwill - 4,663,514 Intangible assets, net 2,481,128 2,869,247 Security deposits 11,522 15,608 Right of use asset, net 794,907 1,243,732 Total current assets held for sale 6,867,840 11,838,547 Total assets held for sale $ 6,867,840 $ 11,838,547 Liabilities Accounts payable and accrued expenses 211,463 337,386 Taxes payable 22,645 24,865 Notes payable, related parties 458,599 307,450 Right of use liability 771,578 1,243,732 Total liabilities held for sale 1,464,285 1,913,433 Net assets $ 5,403,555 $ 9,925,114 |
Schedule of discontinued operations statements of operations | Year Ended 2020 2019 Selling, marketing and administrative $ - $ 19,716 Impairment loss - 903 Interest expense - 310 Net loss from discontinued operations, before taxes - (20,929 ) Income taxes - 1,350 Net loss from discontinued operations, net of tax $ - $ (22,279 ) Foreign currency translation adjustments - (5,370 ) Comprehensive loss from discontinued operations, net of tax $ - $ (27,649 ) Year Ended 2020 2019 Net sales $ 6,860,282 $ 3,460,566 Cost of goods sold, inclusive of depreciation 4,901,237 2,237,004 Gross profit 1,959,045 1,223,562 Operating expenses: Personnel costs 402,389 266,165 Sales and marketing 908,502 414,210 General and administrative 231,376 132,894 Legal and professional fees 156,782 81,234 Amortization expense 26,901 16,653 Total operating expenses 1,725,950 911,156 Gain from operations 233,095 312,406 Other income (expenses): Interest expense (153,592 ) (13,013 ) Goodwill impairment (4,663,514 ) - Intangibles impairment (361,218 ) - Other income - 3,092 Total other income (expenses) (5,178,324 ) (9,921 ) Net gain / (loss) from discontinued operations, before taxes (4,945,229 ) 302,485 Income taxes - - Net gain / (loss) from discontinued operations $ (4,945,229 ) $ 302,485 |
Inventory, Net (Tables)
Inventory, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | December 31, December 31, Finished goods (amounts related to VIE discontinued operations of $431,466 and $416,871, respectively) $ 431,466 $ 920,671 Work-in-process inventory grow (amounts related to VIE discontinued operations of $360,402 and $351,762, respectively) 360,402 351,762 Provision for inventory losses (amounts related to VIE discontinued operations of $0 and $0, respectively) - (163,800 ) $ 791,868 $ 1,108,633 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | December 31, December 31, Leasehold improvements $ 2,770,385 $ 2,223,609 Machinery and equipment 1,065,885 888,786 Furniture and fixtures 43,331 43,331 Construction in progress 227,995 258,615 4,107,596 3,414,341 Less: Accumulated depreciation (1,392,825 ) (1,261,715 ) $ 2,714,771 $ 2,152,626 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of identifiable intangible assets | December 31, 2020 Estimated Useful Life (Years) Gross Amount Accumulated Amortization Impairment Carrying Value Amortized Customer relationships 6 years $ 215,900 $ (43,554 ) $ (27,023 ) $ 145,323 Total amortized 215,900 (43,554 ) (27,023 ) 145,323 Indefinite-lived Trademark/trade name Indefinite 1,340,000 - (167,723 ) 1,172,277 Developed manufacturing process Indefinite 1,330,000 - (166,472 ) 1,163,528 Total indefinite-lived 2,670,000 - (334,195 ) 2,335,805 Total identifiable intangible assets $ 2,885,900 $ (43,554 ) $ (361,218 ) $ 2,481,128 December 31, 2019 Estimated Useful Life (Years) Gross Amount Accumulated Amortization Impairment Carrying Value Amortized Customer relationships 6 years $ 215,900 $ (16,653 ) $ - $ 199,247 Total amortized 215,900 (16,653 ) - 199,247 Indefinite-lived Trademark/trade name Indefinite 1,340,000 - - 1,340,000 Developed manufacturing process Indefinite 1,330,000 - - 1,330,000 Total indefinite-lived 2,670,000 - - 2,670,000 Total identifiable intangible assets $ 2,885,900 $ (16,653 ) $ - $ 2,869,247 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of the company's RSU award activity | Restricted Stock Units Weighted Average Grant Date Fair Value Outstanding at December 31, 2019 - $ - Granted 6,603,962 0.44 Vested (1,367,895 ) 0.23 Forfeited (2,782,895 ) 0.57 Outstanding at December 31, 2020 2,453,172 $ 0.42 |
Schedule of stock options activity | Stock Option Shares Weighted Average Exercise Price Outstanding at December 31, 2019 - $ - Granted 3,500,000 0.16 Exercised - - Forfeited - - Expired - - Outstanding at December 31, 2020 3,500,000 $ 0.16 |
Schedule of fair value of the options was calculated using the Black-Scholes model | Expected term 5 years Expected volatility 237.0 % Expected dividends 0.0 % Risk-free rate 0.4 % Discount for post-vesting restrictions - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision (benefit) for income taxes | 2020 2019 Current (benefit) provision Federal $ - $ - State - - Total Current - - Deferred (benefit) provision Federal $ 3,724 $ 1,707 State 6,511 2,984 Total Deferred $ 10,235 $ 4,691 Total Provision $ 10,235 $ 4,691 |
Schedule of statutory federal income tax rate | 2020 2019 Tax Percentage Tax Percentage Income Taxes At Statutory Federal Income Tax Rate $ (2,517,221 ) 21.00 % $ (638,414 ) 21.00 % State Taxes, Net Of Federal Income Tax Benefit 6,511 (0.05 ) 2,984 (0.10 ) Meals & Entertainment 261 0.00 1,250 (0.04 ) Penalties and Fines - 0.00 - 0.00 Return to Provision Adjustment - Permanent Items - 0.00 - 0.00 Deferred Only Adjustment (228,539 ) 1.91 64,018 (2.11 ) Change in Valuation Allowance 200,791 (1.68 ) 242,204 (7.97 ) Section 280E Expense Disallowance 2,548,431 (21.26 ) 324,745 (10.68 ) Other - 0.00 7,904 (0.26 ) Effective tax $ 10,235 (0.09 )% $ 4,691 (0.16 )% |
Schedule of deferred tax assets and liabilities | Deferred Tax Assets (Liabilities): 2020 2019 Stock Compensation $ 62,606 $ - Fixed Assets - Depreciation - COGS - (60,244 ) Fixed Assets - Depreciation - Non COGS - 456 Trademark/Trade Name (4,765 ) (1,498 ) Developed Manufacturing Process - Extraction (31,884 ) (10,021 ) Customer Relationships 1,158 368 Cannabis Licenses - 1,257 Goodwill - CMI 168,688 10,567 IPR&D 105,985 113,836 NOL - Federal Pre-2018 43,367 43,368 NOL - Federal Post-2017 377,529 295,034 NOL - State 294,183 119,215 Deferred Tax Assets (Liabilities) $ 1,016,867 $ 512,338 Valuation Allowance (1,031,792 ) (517,029 ) Net Deferred Tax Assets (Liabilities) $ (14,926 ) $ (4,691 ) |
Commitments & Contingencies (Ta
Commitments & Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease commitments under operating leases | Years Ending December 31, 2021 $ 638,586 2022 218,168 Total undiscounted operating lease payments 856,754 Less: imputed interest (85,176 ) Present value of operating lease liability $ 771,578 Weighted-average remaining lease term (years) 1.25 Weighted-average remaining discount rate 15 % |
Nature of the Business (Details
Nature of the Business (Details) - USD ($) | Jul. 15, 2019 | Dec. 31, 2020 | Jul. 02, 2019 |
Nature of the Business (Textual) | |||
Denver, CO, operates square-foot, description | Good Meds, the operating unit of CMI, is based in Denver, CO, and operates in a 60,000-square-foot cultivation and processing facility. | ||
Critical Mass Industries [Member] | |||
Nature of the Business (Textual) | |||
Shares issued | 1,500,000 | ||
Cash paid | $ 1,999,770 | ||
General Extract, LLC [Member] | |||
Nature of the Business (Textual) | |||
Membership interests acquired | 100.00% | ||
First Colombia Devco S.A.S [Member] | Critical Mass Industries [Member] | |||
Nature of the Business (Textual) | |||
Shares issued | 13,553,233 |
Variable Interest Entity (Detai
Variable Interest Entity (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | |||
Cash and cash equivalents | $ 329,839 | $ 3,473,770 | $ 167,962 |
Inventory, net | 340,000 | ||
Total current assets | 7,798,154 | 15,760,006 | |
Current liabilities | |||
Total current liabilities | 4,125,851 | 2,668,283 | |
VIE's [Member] | |||
Current assets | |||
Cash and cash equivalents | 196,445 | 467,460 | |
Accounts receivable, net | 66,043 | 113,599 | |
Inventory, net | 791,868 | 768,633 | |
Total current assets | 1,054,356 | 1,349,692 | |
Total assets | 1,054,356 | 1,349,692 | |
Current liabilities | |||
Accounts payable and accrued expenses | 211,463 | 337,386 | |
Total current liabilities | 211,463 | 337,386 | |
Total liabilities | 211,463 | 337,386 | |
Net assets | $ 842,893 | $ 1,012,306 |
Variable Interest Entity (Det_2
Variable Interest Entity (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Variable Interest Entity [Line Items] | ||
Net sales | $ 781,455 | $ 18,248 |
Cost of goods sold, inclusive of depreciation | 744,279 | 198,822 |
Gross profit | 37,176 | (180,574) |
Operating expenses | ||
Personnel costs | 2,473,730 | 812,916 |
Sales and marketing | 14,854 | 123,853 |
Legal and professional fees | 1,744,834 | 843,580 |
Total operating expenses | 6,572,017 | 3,152,356 |
Gain from operations | (6,534,841) | (3,332,930) |
Total other income / (expense) | (325,602) | (119) |
Net income / (loss) | (11,815,907) | (3,057,534) |
VIE's [Member] | ||
Variable Interest Entity [Line Items] | ||
Net sales | 6,860,282 | 3,460,566 |
Cost of goods sold, inclusive of depreciation | 4,901,237 | 2,237,004 |
Gross profit | 1,959,045 | 1,223,562 |
Operating expenses | ||
Personnel costs | 402,389 | 266,165 |
Sales and marketing | 908,502 | 414,210 |
General and administrative | 231,376 | 132,894 |
Legal and professional fees | 156,782 | 81,234 |
Amortization expense | 26,901 | 16,653 |
Total operating expenses | 1,725,950 | 911,156 |
Gain from operations | 233,095 | 312,406 |
Interest expense | (153,592) | (13,013) |
Goodwill impairment | (4,663,514) | |
Intangibles impairment | (361,218) | |
Other income | 3,092 | |
Total other income / (expense) | (5,178,324) | (9,921) |
Net income / (loss) | $ (4,945,229) | $ 302,485 |
Revision of Prior Period Fina_3
Revision of Prior Period Financial Statements (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | ||
Inventory, net | $ 340,000 | |||
Accounts receivable, net | 540,000 | |||
Total current assets | 7,798,154 | 15,760,006 | ||
Total assets | 7,798,154 | 15,760,006 | ||
Accounts payable and accrued expenses | 2,248,235 | 754,850 | ||
Total current liabilities | 4,125,851 | 2,668,283 | ||
Total liabilities | 4,192,860 | 2,672,974 | ||
Additional paid-in capital | 19,138,947 | 16,894,103 | ||
Total shareholders’ equity | 3,605,294 | 13,087,032 | ||
Total liabilities and shareholders’ equity | 7,798,154 | 15,760,006 | ||
Previously Reported [Member] | ||||
Inventory, net | [1] | 340,000 | ||
Accounts receivable, net | [1] | |||
Total current assets | 3,933,047 | |||
Goodwill | 5,855,748 | |||
Total assets | 16,070,008 | |||
Accounts payable and accrued expenses | 754,850 | |||
Total current liabilities | 1,558,821 | |||
Total liabilities | 2,335,588 | |||
Additional paid-in capital | 16,246,645 | |||
Non-controlling interests in consolidated variable interest entity | 1,294,846 | |||
Total shareholders’ equity | 13,734,420 | |||
Total liabilities and shareholders’ equity | 16,070,008 | |||
Non-controlling Interest Adjustment [Member] | ||||
Inventory, net | 768,633 | 768,633 | [1] | |
Accounts receivable, net | 113,599 | 113,599 | [1] | |
Total current assets | 882,232 | |||
Goodwill | 1,192,234 | (1,192,234) | ||
Total assets | (310,002) | |||
Accounts payable and accrued expenses | 337,386 | |||
Total current liabilities | 337,386 | |||
Total liabilities | 337,386 | |||
Additional paid-in capital | $ 647,458 | 647,458 | ||
Non-controlling interests in consolidated variable interest entity | (1,294,846) | |||
Total shareholders’ equity | (647,388) | |||
Total liabilities and shareholders’ equity | (310,002) | |||
Revised [Member] | ||||
Inventory, net | [1],[2] | 1,108,633 | ||
Accounts receivable, net | [1],[2] | 113,599 | ||
Total current assets | [2] | 4,815,279 | ||
Goodwill | [2] | 4,663,514 | ||
Total assets | [2] | 15,760,006 | ||
Accounts payable and accrued expenses | [2] | 1,092,236 | ||
Total current liabilities | [2] | 1,896,207 | ||
Total liabilities | [2] | 2,672,974 | ||
Additional paid-in capital | [2] | 16,894,103 | ||
Non-controlling interests in consolidated variable interest entity | [2] | |||
Total shareholders’ equity | [2] | 13,087,032 | ||
Total liabilities and shareholders’ equity | [2] | $ 15,760,006 | ||
[1] | The Company does not own the VIE's portion of this asset. Amounts relating to the VIE are accounts receivable, net of $113,599 and inventory, net of $768,633. | |||
[2] | There was no impact to the Company's consolidated statements of operations. |
Revision of Prior Period Fina_4
Revision of Prior Period Financial Statements (Details Textual) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | |
Revision of Prior Period Financial Statements (Textual) | |||
Inventory, net | $ 340,000 | ||
Accounts receivable, net | 540,000 | ||
Increase in additional-paid-in capital | 19,138,947 | 16,894,103 | |
VIE's [Member] | |||
Revision of Prior Period Financial Statements (Textual) | |||
Inventory, net | 791,868 | 768,633 | |
Accounts receivable, net | 113,599 | ||
Accounts payable and accrued expenses | 211,463 | 337,386 | |
Non-controlling Interest Adjustment [Member] | |||
Revision of Prior Period Financial Statements (Textual) | |||
Inventory, net | 768,633 | 768,633 | [1] |
Accounts receivable, net | 113,599 | 113,599 | [1] |
Decrease in goodwill | 1,192,234 | (1,192,234) | |
Increase in additional-paid-in capital | 647,458 | $ 647,458 | |
Accounts payable and accrued expenses | $ 337,386 | ||
[1] | The Company does not own the VIE's portion of this asset. Amounts relating to the VIE are accounts receivable, net of $113,599 and inventory, net of $768,633. |
Going Concern Uncertainty, Fi_2
Going Concern Uncertainty, Financial Conditions and Management's Plans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Going Concern Uncertainty, Financial Condition and Management's Plans (Textual) | ||
Cash for operating activities | $ (3,749,621) | $ (1,795,318) |
Accumulated deficit | (15,729,194) | (3,913,287) |
Net loss | $ (11,815,907) | $ (3,057,534) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Machinery and equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Machinery and equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment, Useful Life | 8 years |
Furniture and fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Furniture and fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment, Useful Life | 7 years |
Leasehold improvements [Member] | |
Property, Plant and Equipment, Useful Life, description | Shorter of lease term or 15 years |
Computer equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment, Useful Life | 3 years |
Computer equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) | 12 Months Ended |
Dec. 31, 2020 | |
Customer relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets | 6 years |
Developed manufacturing process [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets, description | Indefinite |
Trademark/trade name | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives of intangible assets, description | Indefinite |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies (Textual) | ||
Accounts receivable, net | $ 540,000 | |
Provision for inventory losses | $ 400,787 | 163,800 |
Income taxes, description | In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, our policy will be to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements. | |
Unvested RSU's considered potentially dilutive securities outstanding | 2,453,172 | |
Bad debt expense | $ 188,548 | 15,615 |
CMI Transaction [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Right-of-use assets and corresponding liability | 1,411,461 | |
VIE's, Primary Beneficiary [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Accounts receivable, net | 606,043 | 113,599 |
Bad debt expense | 4,548 | 15,615 |
Includes related sale | $ 66,043 | $ 113,599 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total revenues | $ 781,455 | $ 18,248 |
Medical retail [Member] | ||
Total revenues | 4,709,628 | 2,337,024 |
Medical wholesale [Member] | ||
Total revenues | 1,320,644 | 379,706 |
Recreational wholesale [Member] | ||
Total revenues | 1,606,969 | 753,405 |
Other revenues [Member] | ||
Total revenues | $ 4,496 | $ 8,679 |
Revenue Recognition (Details Te
Revenue Recognition (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Other Revenues [Member] | ||
Revenue Recognition (Textual) | ||
Amounts related to VIE | $ 4,496 | $ 8,679 |
Recreational Wholesale [Member] | ||
Revenue Recognition (Textual) | ||
Amounts related to VIE | 837,414 | 753,405 |
Medical Wholesale [Member] | ||
Revenue Recognition (Textual) | ||
Amounts related to VIE | 1,319,944 | 374,458 |
Medical Retail [Member] | ||
Revenue Recognition (Textual) | ||
Amounts related to VIE | $ 4,698,428 | $ 2,324,024 |
Business Combination (Details)
Business Combination (Details) - USD ($) | Jul. 15, 2019 | Jul. 15, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Common stock | $ 6,776,617 | |||
CMI Transaction [Member] | ||||
Cash | $ 1,999,770 | $ 1,999,770 | ||
Common stock | 6,776,617 | |||
Total purchase price | $ 8,776,387 |
Business Combination (Details 1
Business Combination (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
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 | |
Goodwill | 4,663,514 | |
Right of use asset | 1,411,461 | |
Deposits | 12,348 | |
Total assets acquired | 11,095,689 | |
Liabilities assumed: | ||
Notes payable | 147,268 | |
Notes payable, related parties | 760,573 | |
Right of use liability | 1,411,461 | |
Total liabilities assumed | 2,319,302 | |
Estimated fair value of net assets acquired | $ 8,776,387 | |
Trademark/trade name [Member] | ||
Liabilities assumed: | ||
Weighted average useful life | Indefinite | |
Developed manufacturing process [Member] | ||
Liabilities assumed: | ||
Weighted average useful life | Indefinite | |
Customer relationships [Member] | ||
Liabilities assumed: | ||
Weighted average useful life (in years) | 6 years | 6 years |
Business Combination (Details 2
Business Combination (Details 2) - CMI Transaction [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Net Sales | $ 7,641,737 | $ 6,798,227 |
Net loss | $ (11,815,907) | $ (2,459,275) |
Net loss per common share | $ (0.12) | $ (0.02) |
Business Combination (Details T
Business Combination (Details Textual) - CMI Transaction [Member] - USD ($) | Jul. 15, 2019 | Jul. 15, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Combination (Textual) | ||||
Number of common stock issued | 13,553,233 | |||
Cash | $ 1,999,770 | $ 1,999,770 | ||
Contributed net loss | $ 4,945,229 | |||
Contributed net income | $ 302,485 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 02, 2019 | [1] |
CMI Transaction [Member] | ||||
Assets | ||||
Accounts receivable, net | $ 66,043 | $ 113,599 | ||
Prepaid expenses and advances | 7,601 | 11,588 | ||
Inventory, net | 791,868 | 768,633 | ||
Property and equipment, net | 2,714,771 | 2,152,626 | ||
Goodwill | 4,663,514 | |||
Intangible assets, net | 2,481,128 | 2,869,247 | ||
Security deposits | 11,522 | 15,608 | ||
Right of use asset, net | 794,907 | 1,243,732 | ||
Total current assets held for sale | 6,867,840 | 11,838,547 | ||
Total assets held for sale | 6,867,840 | 11,838,547 | ||
Liabilities | ||||
Accounts payable and accrued expenses | 211,463 | 337,386 | ||
Taxes payable | 22,645 | 24,865 | ||
Notes payable, related parties | 458,599 | 307,450 | ||
Right of use liability | 771,578 | 1,243,732 | ||
Total liabilities held for sale | 1,464,285 | 1,913,433 | ||
Net assets | 5,403,555 | 9,925,114 | ||
Devco discontinued operations [Member] | ||||
Assets | ||||
Cash | $ 18,472 | |||
Prepaid expenses and advances | 29,980 | |||
Property and equipment, net | 456,762 | |||
Total current assets held for sale | 48,452 | |||
Total assets held for sale | 505,214 | |||
Liabilities | ||||
Accounts payable and accrued expenses | 23,123 | |||
Total liabilities held for sale | 23,123 | |||
Net assets | $ 482,091 | |||
[1] | Date of Devco disposition |
Discontinued Operations (Deta_2
Discontinued Operations (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Other income (expenses): | ||
Net loss from discontinued operations, net of tax | $ (4,945,229) | $ 280,206 |
CMI Transaction [Member] | ||
Net sales | 6,860,282 | 3,460,566 |
Cost of goods sold, inclusive of depreciation | 4,901,237 | 2,237,004 |
Gross profit | 1,959,045 | 1,223,562 |
Operating expenses: | ||
Personnel costs | 402,389 | 266,165 |
Selling, marketing and administrative | 908,502 | 414,210 |
General and administrative | 231,376 | 132,894 |
Legal and professional fees | 156,782 | 81,234 |
Amortization expense | 26,901 | 16,653 |
Total operating expenses | 1,725,950 | 911,156 |
Gain from operations | 233,095 | 312,406 |
Other income (expenses): | ||
Interest expense | (153,592) | (13,013) |
Goodwill impairment | (4,663,514) | |
Intangibles impairment | (361,218) | |
Other income | 3,092 | |
Total other income (expenses) | (5,178,324) | (9,921) |
Net gain / (loss) from discontinued operations, before taxes | (4,945,229) | 302,485 |
Income taxes | ||
Net gain / (loss) from discontinued operations | (4,945,229) | 302,485 |
Devco discontinued operations [Member] | ||
Operating expenses: | ||
Selling, marketing and administrative | 19,716 | |
Impairment loss | 903 | |
Other income (expenses): | ||
Interest expense | 310 | |
Net gain / (loss) from discontinued operations, before taxes | (20,929) | |
Income taxes | 1,350 | |
Net loss from discontinued operations, net of tax | (22,279) | |
Foreign currency translation adjustments | (5,370) | |
Comprehensive loss from discontinued operations, net of tax | $ (27,649) |
Discontinued Operations (Deta_3
Discontinued Operations (Details Textual) | 12 Months Ended | |
Dec. 31, 2019USD ($) | Jul. 02, 2019ha | |
General Extract [Member] | ||
Discontinued Operations (Textual) | ||
Membership interests acquired | 100.00% | |
Devco discontinued operations [Member] | ||
Discontinued Operations (Textual) | ||
Area of Land | ha | 13 | |
Discontinued operations non-cash impairment charges | $ 903 | |
Discontinued operations depreciation expense | $ 368 |
Inventory, Net (Details)
Inventory, Net (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 431,466 | $ 920,671 |
Work-in-process inventory grow | 360,402 | 351,762 |
Provision for inventory losses | (163,800) | |
Total inventory | $ 791,868 | $ 1,108,633 |
Inventory, Net (Details Textual
Inventory, Net (Details Textual) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory, Net (Textual) | ||
Finished goods amounts | $ 431,466 | $ 920,671 |
Work-in-process inventory grow amounts | 360,402 | 351,762 |
Cannabidiol [Member] | ||
Inventory, Net (Textual) | ||
Finished goods amounts | 220,800 | 240,000 |
VIE's [Member] | ||
Inventory, Net (Textual) | ||
Finished goods amounts | 431,466 | 416,871 |
Work-in-process inventory grow amounts | 360,402 | 351,762 |
Provision for inventory losses amount | $ 0 | $ 0 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 4,107,596 | $ 3,414,341 |
Less: Accumulated depreciation | (1,392,825) | (1,261,715) |
Property and equipment, net | 2,714,771 | 2,152,626 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,770,385 | 2,223,609 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,065,885 | 888,786 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 43,331 | 43,331 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 227,995 | $ 258,615 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property and Equipment, Net (Textual) | ||
Depreciation expense | $ 131,110 | $ 129,067 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived Intangible assets, Gross Amount | $ 2,885,900 | $ 2,885,900 |
Indefinite-lived Intangible assets, Accumulated Amortization | (43,554) | (16,653) |
Indefinite-lived intangible assets, Impairment | (361,218) | |
Indefinite-lived intangible assets, Carrying Value | 2,481,128 | 2,869,247 |
Customer relationships [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Gross Amount | 215,900 | 215,900 |
Amortized intangible assets, Accumulated Amortization | (43,554) | (16,653) |
Amortized intangible assets, Impairment | (27,023) | |
Amortized intangible assets, Carrying Value | $ 145,323 | $ 199,247 |
Amortized intangible assets, Estimated Useful Life (Years) | 6 years | 6 years |
Total amortized [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Gross Amount | $ 215,900 | $ 215,900 |
Amortized intangible assets, Accumulated Amortization | (43,554) | 16,653 |
Amortized intangible assets, Impairment | (27,023) | |
Amortized intangible assets, Carrying Value | 145,323 | 199,247 |
Total indefinite-lived [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Gross Amount | 2,670,000 | 2,670,000 |
Amortized intangible assets, Accumulated Amortization | ||
Amortized intangible assets, Impairment | (334,195) | |
Amortized intangible assets, Carrying Value | 2,335,805 | 2,670,000 |
Trademark/trade name [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived Intangible assets, Gross Amount | 1,340,000 | 1,340,000 |
Indefinite-lived Intangible assets, Accumulated Amortization | ||
Indefinite-lived intangible assets, Impairment | (167,723) | |
Indefinite-lived intangible assets, Carrying Value | $ 1,172,277 | $ 1,340,000 |
Indefinite-lived intangible assets, Estimated Useful Life (Years) | Indefinite | Indefinite |
Developed manufacturing process [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived Intangible assets, Gross Amount | $ 1,330,000 | $ 1,330,000 |
Indefinite-lived Intangible assets, Accumulated Amortization | ||
Indefinite-lived intangible assets, Impairment | (166,472) | |
Indefinite-lived intangible assets, Carrying Value | $ 1,163,528 | $ 1,330,000 |
Indefinite-lived intangible assets, Estimated Useful Life (Years) | Indefinite | Indefinite |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets (Textual) | ||
Amortization expense including discontinued operations | $ 26,901 | $ 16,653 |
Debt (Details)
Debt (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Aug. 26, 2020 | Jul. 27, 2020 | Dec. 31, 2020 | |
Debt (Textual) | |||
Subscription agreement, description | The Company entered into a subscription agreement consisting of 1) a convertible note and 2) warrants. The 1) convertible note has a face value of $250,000, matures August 1, 2022, and accrues interest at 8% per annum. | The Company underwent a capital raise in 2020 and issued 3,535,665 subscription units, each containing one share of common stock and one warrant share. The warrants have an exercise price of $0.30 and expire November 1, 2022. The fair value of the warrants is $0 as of December 31, 2020. No warrants were exercised during the year ended December 31, 2020. | |
Issued convertible shares | 2,500,000 | ||
Common stock conversion price | $ 0.10 | ||
Net carrying amount | $ 52,083 | ||
Convertible note | 250,000 | ||
Unamortized debt discount | $ 197,917 | ||
Purchase exercisable | 2,500,000 | ||
Common stock per share | $ 0.25 | ||
Accrues interest | 84.00% | ||
Amount of loan agreement | $ 600,000 | ||
Maturity date | Apr. 7, 2021 | ||
Convertible loans | $ 412,560 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Feb. 25, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Related Party Transactions (Textual) | |||
Notes payable, related party | $ 458,599 | $ 307,450 | |
Maturity date | Jan. 31, 2021 | ||
Note Interest | 25.00% | ||
Common stock per share | $ 0.25 | ||
Restricted Stock Units (RSUs) [Member] | |||
Related Party Transactions (Textual) | |||
Vested shares | 200,000 | ||
Converted into common shares | 200,000 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - Restricted Stock Units (RSUs) [Member] | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Outstanding beginning balance | shares | |
Granted | shares | 6,603,962 |
Vested | shares | (1,367,895) |
Forfeited | shares | (2,782,895) |
Outstanding ending balance | shares | 2,453,172 |
Weighted average grant date fair value, beginning balance | $ / shares | |
Weighted average grant date fair value, Granted | $ / shares | 0.44 |
Weighted average grant date fair value, Vested | $ / shares | 0.23 |
Weighted average grant date fair value, Forfeited | $ / shares | 0.57 |
Weighted average grant date fair value, ending balance | $ / shares | $ 0.42 |
Shareholders' Equity (Details 1
Shareholders' Equity (Details 1) - Stock options [Member] | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Outstanding beginning balance | |
Granted | 3,500,000 |
Vested | |
Forfeited | |
Expired | |
Outstanding ending balance | 3,500,000 |
Weighted average exercise price, beginning balance | $ / shares | |
Weighted average exercise price, Granted | $ / shares | 0.16 |
Weighted average exercise price, Exercised | $ / shares | |
Weighted average exercise price, Forfeited | |
Weighted average exercise price, Expired | $ / shares | |
Weighted average exercise price, ending balance | $ / shares | $ 0.16 |
Shareholders' Equity (Details 2
Shareholders' Equity (Details 2) | 12 Months Ended |
Dec. 31, 2020 | |
Shareholders Equity | |
Expected term | 5 years |
Expected volatility | 237.00% |
Expected dividends | 0.00% |
Risk-free rate | 0.40% |
Discount for post-vesting restrictions |
Shareholders' Equity (Details T
Shareholders' Equity (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 29, 2020 | Aug. 31, 2020 | Aug. 31, 2020 | Jul. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Feb. 29, 2020 | Jul. 31, 2019 | Dec. 31, 2020 | Aug. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Shareholders' Equity (Textual) | ||||||||||||
Fair value of RSUs vested | $ 309,790 | $ 0 | ||||||||||
Unrecognized stock based compensation costs | $ 600,241 | 600,241 | 0 | |||||||||
Stock-based compensation expense | 734,752 | $ 0 | ||||||||||
Issuance of common stock shares | 790,000 | |||||||||||
Fair value in legal and professional fees | $ 395,000 | |||||||||||
Aggregate intrinsic value | 140,000 | $ 140,000 | ||||||||||
Weighted average expected term | 1 year 2 months 8 days | |||||||||||
Weighted average value | $ 600,241 | $ 600,241 | ||||||||||
Stock Options [Member] | ||||||||||||
Shareholders' Equity (Textual) | ||||||||||||
Awarded stock options | 3,500,000 | |||||||||||
Stock options exercise price | $ 0.16 | |||||||||||
Expiration date | Oct. 29, 2030 | |||||||||||
Executive [Member] | ||||||||||||
Shareholders' Equity (Textual) | ||||||||||||
Issuance of common stock shares | 400,000 | |||||||||||
Board [Member] | ||||||||||||
Shareholders' Equity (Textual) | ||||||||||||
Issuance of common stock shares | 757,895 | 200,000 | ||||||||||
Directors [Member] | ||||||||||||
Shareholders' Equity (Textual) | ||||||||||||
Stock-based compensation consisted of equity awards granted and vested | 518,043 | |||||||||||
Employees [Member] | ||||||||||||
Shareholders' Equity (Textual) | ||||||||||||
Stock-based compensation consisted of equity awards granted and vested | 145,183 | |||||||||||
Issuance of common stock shares | 10,000 | 1,175,549 | ||||||||||
Consultants [Member] | ||||||||||||
Shareholders' Equity (Textual) | ||||||||||||
Stock-based compensation consisted of equity awards granted and vested | 71,526 | |||||||||||
Shareholders [Member] | ||||||||||||
Shareholders' Equity (Textual) | ||||||||||||
Issuance of common stock shares | 300,000 | 15,050,000 | ||||||||||
Shares of common stock cancelled | 300,000 | 15,050,000 | ||||||||||
Raise Capital [Member] | ||||||||||||
Shareholders' Equity (Textual) | ||||||||||||
Issuance of common stock shares | 60,000 | 3,535,665 | ||||||||||
Stock Incentive Plan [Member] | ||||||||||||
Shareholders' Equity (Textual) | ||||||||||||
Fair value of RSUs vested | 150,000 | |||||||||||
Stock-based compensation expense | 1,440,284 | |||||||||||
Stock-based compensation consisted of equity awards granted and vested | 734,752 | |||||||||||
Stock options | $ 555,532 | |||||||||||
C M I Transaction [Member] | ||||||||||||
Shareholders' Equity (Textual) | ||||||||||||
Issuance of common stock shares | 13,553,233 | |||||||||||
Private Placement [Member] | ||||||||||||
Shareholders' Equity (Textual) | ||||||||||||
Issuance of common stock shares | 14,325,005 | |||||||||||
Gross proceeds | $ 7,162,503 | |||||||||||
Per share | $ 0.50 | |||||||||||
Equity issuance costs | $ 72,096 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Current (benefit) provision | ||
Federal | ||
State | ||
Total Current | ||
Deferred (benefit) provision | ||
Federal | 3,724 | 1,707 |
State | 6,511 | 2,984 |
Total Deferred | 10,235 | 4,691 |
Total Provision | $ 10,235 | $ 4,691 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Tax | ||
Income Taxes At Statutory Federal Income Tax Rate | $ (2,517,221) | $ (638,414) |
State Taxes, Net Of Federal Income Tax Benefit | 6,511 | 2,984 |
Meals & Entertainment | 261 | 1,250 |
Penalties and Fines | ||
Return to Provision Adjustment - Permanent Items | ||
Deferred Only Adjustment | (228,539) | 64,018 |
Change in Valuation Allowance | 200,791 | 242,204 |
Section 280E Expense Disallowance | 2,548,431 | 324,745 |
Other | 7,904 | |
Effective tax | $ 10,235 | $ 4,691 |
Percentage | ||
Income Taxes At Statutory Federal Income Tax Rate | 21.00% | 21.00% |
State Taxes, Net Of Federal Income Tax Benefit | (0.05%) | (0.10%) |
Meals & Entertainment | 0.00% | (0.04%) |
Penalties and Fines | 0.00% | 0.00% |
Return to Provision Adjustment - Permanent Items | 0.00% | 0.00% |
Deferred Only Adjustment | 1.91% | (2.11%) |
Change in Valuation Allowance | (1.68%) | (7.97%) |
Section 280E Expense Disallowance | (21.26%) | (10.68%) |
Other | 0.00% | (0.26%) |
Effective tax | (0.09%) | (0.16%) |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Tax Assets (Liabilities): | ||
Stock Compensation | $ 62,606 | |
Fixed Assets - Depreciation - COGS | (60,244) | |
Fixed Assets - Depreciation - Non COGS | 456 | |
Trademark/Trade Name | (4,765) | (1,498) |
Developed Manufacturing Process - Extraction | (31,884) | (10,021) |
Customer Relationships | 1,158 | 368 |
Cannabis Licenses | 1,257 | |
Goodwill - CMI | 168,688 | 10,567 |
IPR&D | 105,985 | 113,836 |
NOL - Federal Pre-2018 | 43,367 | 43,368 |
NOL - Federal Post-2017 | 377,529 | 295,034 |
NOL - State | 294,183 | 119,215 |
Deferred Tax Assets (Liabilities) | 1,016,867 | 512,338 |
Valuation Allowance | (1,031,792) | (517,029) |
Net Deferred Tax Assets (Liabilities) | $ (14,926) | $ (4,691) |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes (Textual) | ||
Federal statutory tax rate | 21.00% | 21.00% |
Net operating loss carry forward | $ 2,004,266 | $ 1,094,388 |
Deferred tax assets net operating losses | 715,079 | 325,097 |
Valuation allowance | 1,031,792 | 384,510 |
State net operating losses | 8,042,840 | $ 2,057,792 |
Amount of NOLs with no expiration | $ 1,797,757 |
Commitments & Contingencies (De
Commitments & Contingencies (Details) | Dec. 31, 2020USD ($) |
Years Ending December 31, | |
2021 | $ 638,586 |
2022 | 218,168 |
Total undiscounted operating lease payments | 856,754 |
Less: imputed interest | (85,176) |
Present value of operating lease liability | $ 771,578 |
Weighted-average remaining lease term (years) | 1 year 2 months 30 days |
Weighted-average remaining discount rate | 15.00% |
Commitments & Contingencies (_2
Commitments & Contingencies (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Commitments & Contingencies (Textual) | ||
Lease payments | $ 73,777 | $ 23,322 |
Operating lease cost | 627,132 | 252,290 |
Present value of the liabilities decreased by acquisition of CMI | $ 472,154 | $ 167,729 |
Englewood Retail Location [Member] | ||
Commitments & Contingencies (Textual) | ||
Percentage of lease payments increase | 5.00% | |
Expiration date | May 31, 2022 | |
Production Facility Location [Member] | ||
Commitments & Contingencies (Textual) | ||
Percentage of lease payments increase | 5.00% | |
Expiration date | Apr. 30, 2022 | |
Lakewood Retail Location [Member] | ||
Commitments & Contingencies (Textual) | ||
Percentage of lease payments increase | 5.00% | |
Expiration date | Mar. 31, 2021 | |
CMI Transaction [Member] | ||
Commitments & Contingencies (Textual) | ||
Right of use asset, net | $ 1,411,461 |
Subsequent Events (Details)
Subsequent Events (Details) | 12 Months Ended |
Dec. 31, 2020USD ($)Investors$ / shares | |
Subsequent Evens (Textual) | |
Conversion price | $ 0.20 |
Convertible note maturity date | Mar. 31, 2022 |
Exercise price | $ 0.40 |
Warrants term | 2 years |
Investors [Member] | |
Subsequent Evens (Textual) | |
Convertible notes and warrants | $ | $ 500,000 |
Number of investors | Investors | 2 |