Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 19, 2019 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | Target Group Inc. | |
Entity Current Reporting Status | Yes | |
Entity Central Index Key | 0001586554 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Trading Symbol | CBDY | |
Entity Common Stock, Shares Outstanding | 550,707,144 | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Small Business | true |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash | $ 1,778,048 | $ 303,438 |
Accounts receivable, no allowance | 2,068 | 0 |
Inventory | 1,052,555 | 0 |
Prepaid asset | 129,906 | 35,145 |
Sales tax recoverable, net of allowance [Note 6] | 57,535 | 220,525 |
Total current assets | 3,020,112 | 559,108 |
Long term assets | ||
Furniture and equipment | 333,706 | 856 |
Capital work in progress [Note 5] | 8,820,385 | 2,595,022 |
Goodwill [Note 7] | 9,296,507 | 3,594,195 |
Other assets | 49,668 | 31,496 |
Total long term assets | 18,500,266 | 6,221,569 |
Total assets | 21,520,378 | 6,780,677 |
Current liabilities | ||
Bank overdraft | 76,217 | 0 |
Accounts payable and accrued liabilities | 4,020,964 | 1,739,765 |
Payable to related parties [Note 3] | 433,313 | 403,620 |
Shareholder advances [Note 4] | 0 | 209,046 |
Shares to be issued [Note 9] | 358,074 | 0 |
Deferred revenue | 128,158 | 0 |
Convertible promissory notes, net [Note 8] | 44,863 | 221,639 |
Derivative liability [Note 8] | 97,888 | 862,483 |
Deferred rent - Current portion [Note 11] | 342,642 | 0 |
Total current liabilities | 5,502,120 | 3,436,553 |
Long term liabilities | ||
Deferred rent - Non-current portion [Note 11] | 1,424,324 | 0 |
Total long term liabilities | 1,424,324 | 0 |
Total liabilities | 6,926,444 | 3,436,553 |
Contingencies and commitments | ||
Stockholders' deficit | ||
Preferred stock, $0.0001 par value, 20,000,000 shares authorized; 1,000,000 shares issued and outstanding as at June 30, 2019 (1,000,000 shares outstanding as at December 31, 2019) [Note 9] | 100 | 100 |
Common stock, $0.0001 par value, 850,000,000 shares authorized, 541,362,258 common shares outstanding as at June 30, 2019 (93,624,289 common shares outstanding as at December 31, 2018) [Note 9] | 54,135 | 9,362 |
Stock subscription receivable [Note 9] | 0 | (220,319) |
Shares to be issued [Note 9] | 804,602 | 1,359,349 |
Additional paid-in capital | 28,310,300 | 11,346,467 |
Accumulated deficit | (12,415,830) | (9,094,954) |
Accumulated comprehensive income (loss) | (2,159,372) | (55,881) |
Total stockholders' deficit | 14,593,935 | 3,344,124 |
Total liabilities and stockholders' deficit | $ 21,520,378 | $ 6,780,677 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 |
Preferred Stock, Shares Issued | 1,000,000 | 1,000,000 |
Preferred Stock, Shares Outstanding | 1,000,000 | 1,000,000 |
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 850,000,000 | 850,000,000 |
Common Stock, Shares, Outstanding | 541,362,258 | 93,624,289 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||
REVENUE | $ 0 | $ 0 | $ 0 | $ 263 |
OPERATING EXPENSES | ||||
Advisory and consultancy fee | 120,248 | 22,500 | 413,430 | 22,500 |
Management services fee | 632,737 | 75,000 | 692,558 | 150,000 |
Salaries and wages | 402,715 | 0 | 755,586 | 0 |
Legal and professional fees | 55,929 | 45,170 | 135,018 | 78,432 |
Software development expense | 0 | 6,018 | 0 | 21,119 |
Marketing expenses | 17,530 | 12,356 | 17,530 | 22,597 |
Rent and utilities | 49,139 | 5,082 | 190,120 | 9,505 |
Travel expenses | 0 | 0 | 188 | 0 |
Advertising and promotion | 24,315 | 24,315 | 0 | |
Depreciation expense | 36,428 | 0 | 51,335 | 0 |
Office and general | 305,102 | 190 | 408,907 | 565 |
Total operating expenses | 1,644,143 | 166,316 | 2,688,987 | 304,718 |
OTHER INCOME AND EXPENSES | ||||
Change in fair value of derivative liability | (405,154) | 395,931 | (375,912) | 176,229 |
Loss on forgiveness/settlement of debt | 810,977 | 267,522 | 861,687 | 114,051 |
Interest and bank charges | 10,514 | 14,915 | 29,050 | 28,562 |
Exchange loss | (14,366) | (138) | (205,932) | 506 |
Day one interest expense | 0 | 0 | 18,362 | 0 |
Accretion expense | 253,656 | 0 | 360,458 | 0 |
Allowance for sales tax recoverable | (118,652) | 0 | (55,824) | 0 |
Total other expenses | 536,975 | 678,230 | 631,889 | 319,348 |
Net loss before income taxes | (2,181,118) | (844,546) | (3,320,876) | (623,803) |
Income taxes | 0 | 0 | 0 | 0 |
Net loss profit | (2,181,118) | (844,546) | (3,320,876) | (623,803) |
Foreign currency translation adjustment | (1,599,851) | 0 | (1,764,884) | 0 |
Comprehensive loss | $ (3,780,969) | $ (844,546) | $ (5,085,760) | $ (623,803) |
Loss per share, basic and diluted | $ (0.005) | $ (0.032) | $ (0.013) | $ (0.026) |
Weighted Average Number of Shares Outstanding, Basic and Diluted | 406,364,868 | 26,275,291 | 257,217,104 | 23,926,910 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Shares To Be Issued [Member] | Stock Subscription Receivable [Member] | Additional Paid-in Capital [Member] | Accumulated deficit [Member] | Accumulated Comprehensive Income [Member} | Total |
Balance at Dec. 31, 2017 | $ 100 | $ 1,497 | $ 73,000 | $ 0 | $ 5,057,758 | $ (7,194,613) | $ 0 | $ (2,062,258) |
Balance (in shares) at Dec. 31, 2017 | 1,000,000 | 14,973,818 | 115,000 | |||||
Shares issued on conversion of convertible promissory notes [Note 9] | $ 0 | $ 830 | $ 0 | 0 | 68,516 | 0 | 0 | 69,346 |
Shares issued on conversion of convertible promissory notes [Note 9] (in shares) | 0 | 8,297,439 | 0 | |||||
Shares issued as consideration for management services and consulting services [Note 9] | $ 0 | $ 553 | $ 0 | 0 | 83,447 | 0 | 0 | 84,000 |
Shares issued as consideration for management services and consulting services [Note 9] (in shares) | 0 | 5,529,412 | 0 | |||||
Shares issued as consideration for private placement [Note 9] | $ 0 | $ 0 | $ 100,000 | 0 | 0 | 0 | 0 | 100,000 |
Shares issued as consideration for private placement [Note 9] (in shares) | 0 | 2,000,000 | ||||||
Shares issued as consideration for consulting services [Note 9] | $ 0 | $ 80 | $ 0 | 0 | 26,020 | 0 | 0 | 26,100 |
Shares issued as consideration for consulting services [Note 9] (in shares) | 0 | 800,000 | 0 | |||||
Shares issued on settlement of liability - Black Bridge [Note 9] | $ 0 | $ 250 | $ 0 | 0 | 342,250 | 0 | 0 | 342,500 |
Shares issued on settlement of liability - Black Bridge [Note 9] (in shares) | 0 | 2,500,000 | 0 | |||||
Change due to extinguishment of derivative liability on debt conversion | $ 0 | $ 0 | $ 0 | 0 | 240,706 | 0 | 0 | 240,706 |
Net profit (loss) | 0 | 0 | 0 | 0 | 0 | (623,803) | 0 | (623,803) |
Foreign currency translation | 0 | |||||||
Balance at Jun. 30, 2018 | $ 100 | $ 3,210 | $ 173,000 | 0 | 5,818,697 | (7,818,416) | 0 | (1,823,409) |
Balance (in shares) at Jun. 30, 2018 | 1,000,000 | 32,100,669 | 2,115,000 | |||||
Balance at Dec. 31, 2017 | $ 100 | $ 1,497 | $ 73,000 | 0 | 5,057,758 | (7,194,613) | 0 | (2,062,258) |
Balance (in shares) at Dec. 31, 2017 | 1,000,000 | 14,973,818 | 115,000 | |||||
Shares issued as consideration for private placement [Note 9] (in shares) | 22,757,102 | |||||||
Balance at Dec. 31, 2018 | $ 100 | $ 9,362 | $ 1,359,349 | (220,319) | 11,346,467 | (9,094,954) | (55,881) | 3,344,124 |
Balance (in shares) at Dec. 31, 2018 | 1,000,000 | 93,624,289 | 40,702,532 | |||||
Effect of change in functional currency [Note 9] | $ 0 | $ 0 | $ 0 | 0 | 339,007 | 0 | (338,607) | 400 |
Shares issued on conversion of convertible promissory notes [Note 9] | $ 0 | $ 1,115 | $ 0 | 0 | 188,375 | 0 | 0 | 189,490 |
Shares issued on conversion of convertible promissory notes [Note 9] (in shares) | 0 | 11,150,489 | 0 | |||||
Shares issued as consideration for management services and consulting services [Note 9] | $ 0 | $ 1,833 | $ 0 | 0 | 2,005,496 | 0 | 0 | 2,007,329 |
Shares issued as consideration for management services and consulting services [Note 9] (in shares) | 0 | 18,334,850 | 0 | |||||
Shares issued for acquisition of subsidiary [Note 9] | $ 0 | $ 3,041 | $ 0 | 0 | 4,059,803 | 0 | 0 | 4,062,844 |
Shares issued for acquisition of subsidiary [Note 9] (in shares) | 0 | 30,407,712 | 0 | |||||
Shares issued as consideration for consideration of the intellectual property rights [Note 15] | $ 0 | $ 25 | $ (27,000) | 0 | 26,975 | 0 | 0 | |
Shares issued as consideration for consideration of the intellectual property rights [Note 15] (in shares) | 0 | 250,000 | (250,000) | |||||
Transfer from shares to be issued - liability to shares to issued - equity | $ 0 | $ 0 | $ 454,241 | 0 | 0 | 0 | 0 | 454,241 |
Transfer from shares to be issued - liability to shares to issued - equity (in shares) | 0 | 0 | 9,813,278 | |||||
Shares issued as consideration for private placement [Note 9] | $ 0 | $ 38,759 | $ (981,988) | 220,319 | 9,696,176 | 0 | 0 | $ 8,973,266 |
Shares issued as consideration for private placement [Note 9] (in shares) | 0 | 387,594,918 | (35,043,838) | 10,562,252 | ||||
Change due to extinguishment of derivative liability on debt conversion | $ 0 | $ 0 | $ 0 | 0 | 648,001 | 0 | 0 | $ 648,001 |
Net profit (loss) | 0 | 0 | 0 | 0 | 0 | (3,320,876) | 0 | (3,320,876) |
Foreign currency translation | 0 | 0 | 0 | 0 | 0 | 0 | (1,764,884) | (1,764,884) |
Balance at Jun. 30, 2019 | $ 100 | $ 54,135 | $ 804,602 | $ 0 | $ 28,310,300 | $ (12,415,830) | $ (2,159,372) | $ 14,593,935 |
Balance (in shares) at Jun. 30, 2019 | 1,000,000 | 541,362,258 | 15,221,972 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
OPERATING ACTIVITIES | ||
Net loss profit for the period | $ (3,320,876) | $ (623,803) |
Adjustment for non-cash items | ||
Loss on forgiveness/settlement of debt | 861,687 | 114,051 |
Change in fair value of derivative | (375,912) | 176,229 |
Day one interest expense | 18,362 | 0 |
Accretion expense | 360,458 | 0 |
Shares issued/to be issued for advisory and other services | 0 | 101,100 |
Penalty charged on convertible promissory notes | 0 | 15,858 |
Allowance for sales tax recoverable | (55,824) | 0 |
Depreciation expense | 51,335 | 0 |
Deferred rent | 152,973 | 0 |
Changes in operating assets and liabilities: | ||
Change in prepaid asset | 4,196 | 0 |
Change in sales tax recoverable | 225,555 | 0 |
Change in other assets | (18,172) | 0 |
Change in accounts payable and accrued liabilities | (825,973) | 106,122 |
Net cash used in operating activities | (2,922,191) | (110,443) |
INVESTING ACTIVITIES | ||
Cash acquired upon acquisition | 5,658 | 0 |
Amount invested on capital work in progress | (4,254,240) | 0 |
Net cash used in investing activities | (4,248,582) | 0 |
FINANCING ACTIVITIES | ||
Utilization of bank overdraft facility | (74,812) | 0 |
Repayment of shareholder advances | (75,623) | (49,157) |
Shareholder advances | 5,166 | 123,554 |
Proceeds from issuance of promissory notes | 103,000 | 28,000 |
Settlement of promissory notes | (570,892) | 0 |
Proceeds from private placements | 9,331,340 | 387,291 |
Net cash provided by financing activities | 8,867,803 | 489,688 |
Net increase in cash during the period | 1,697,030 | 379,245 |
Effect of foreign currency translation | (222,420) | 0 |
Cash, beginning of period | 303,438 | 56 |
Cash, end of period | 1,778,048 | 379,301 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Shares issued on conversion of debt | 189,490 | 310,052 |
Shares issued as consideration for services | 2,007,329 | 9,000 |
Shares issued as consideration for acquisition | 3,284,033 | 0 |
Cash paid for interest | 22,399 | 0 |
Cash paid for taxes | $ 0 | $ 0 |
Organization, Nature of Busines
Organization, Nature of Business, Going Concern and Management Plans | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Nature of Business, Going Concern and Management Plans | |
Organization, Nature of Business, Going Concern and Management Plans | 1. Organization, Nature of Business, Going Concern and Management Plans Organization and Nature of Business Target Group Inc. (formerly known as Chess Supersite Corporation) (“Target Group” or “the Company”) was incorporated on July 2, 2013 under the laws of the state of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. Target Group Inc. is a diversified and vertically integrated, progressive company with focus on both national and international presence. The Company owns and operates Canary Rx Inc, a final-stage, Canadian licensed producer, regulated under The Cannabis Act. Canary Rx Inc, operates a 44,000 square foot facility located in Norfolk County, Ontario, and has partnered with Dutch breeder, Serious Seeds, to cultivate exclusive & world class proprietary genetics. The Company has begun structuring multiple international production and distribution platforms and intends to continue rapidly expanding its global footprint as it focuses on building an iconic brand portfolio whose focus aims at developing cutting edge Intellectual Property among the medical and recreational cannabis markets. Target Group is committed to building industry-leading companies that transform the perception of cannabis and responsibly elevate the overall consumer experience. The Company’s current business is to produce, manufacture, distribute, and conduct sales of cannabis products. As of the current year end, the company has not produced, manufactured, distributed or sold any cannabis products. In May, 2014, the Company effected a change in control by the redemption of the stock held by its original shareholders, the issuance of shares of its common stock to new shareholders, the resignation of its original officers and directors and the appointment of new officers and directors. On July 6, 2015, the Company filed its form S‑1/A, to amend its form S‑1 previously filed on January 26, 2015 and December 11, 2014. The prospectus relates to the offer and sale of 1,500,000 shares of common stock (the “Shares”) of the Company, $0.0001 par value per share, offered by the holders thereof (the “Selling Shareholder Shares”), who are deemed to be statutory underwriters. The selling shareholders will offer their shares at a price of $0.50 per share, until the Company’s common stock is listed on a national securities exchange or is quoted on the OTC Bulletin Board (or a successor); after which, the selling shareholders may sell their shares at prevailing market or privately negotiated prices, including (without limitation) in one or more transactions that may take place by ordinary broker’s transactions, privately-negotiated transactions or through sales to one or more dealers for resale. On July 13, 2015, the Company received a notice of effectiveness from the SEC for the registration of its shares. On July 3, 2018, the Company filed an amendment in its Articles of association to change its name to Target Group Inc. The Company was able to secure an OTC Bulletin Board symbol CBDY from Financial Industry Regulatory Authority (FINRA). On June 27, 2018, the Company entered into an Agreement and Plan of Share Exchange (“Exchange Agreement”) with Visava Inc., a private Ontario, Canada corporation (“Visava”). Visava owns 100% of Canary Rx Inc., a Canadian corporation that holds a leasehold interest in a parcel of property located in Ontario’s Garden Norfolk County for the production of cannabis. The Exchange Agreement provides that, subject to its terms and conditions, the Company issued to the Visava shareholders an aggregate of 25,500,000 shares of the Company’s Common Stock in exchange for all of the issued and outstanding common stock held by the Visava shareholders. In addition of its Common Stock, the Company issued to the Visava shareholders, prorata Common Stock Purchase Warrants purchasing an aggregate of 25,000,000 shares of the Company’s Common Stock at a price per share of $0.10 for a period of two years following the issuance date of the Warrants. Upon the closing of the Exchange Agreement, the Visava shareholders held approximately 46.27% of the issued and outstanding Common Stock of the Company and Visava will continue its business operations as a wholly-owned subsidiary of the Company. The transaction was closed effective August 2, 2018. Effective January 25, 2019, the Company entered into an Agreement and Plan of Share Exchange (“Exchange Agreement”) with CannaKorp Inc., a Delaware corporation (“CannaKorp”). Company had previously entered into a Letter of Intent with CannaKorp dated November 30, 2018 which was disclosed in the Company’s report on Form 8‑K filed December 4, 2018. The Exchange Agreement provides that, subject to its terms and conditions, the Company issued to the CannaKorp shareholders an aggregate of 30,407,412 shares of the Company’s common stock, based on a price per share of $0.10, in exchange for 100% of the issued and outstanding common stock of CannaKorp held by the CannaKorp shareholders. In addition, the Company will issue Common Stock Purchase Warrants (“Warrants”) in exchange for all outstanding and promised CannaKorp stock options. The Warrants will grant the holders thereof the right to purchase up to approximately 7,211,213 shares of the Company’s common stock. The Company will also assume all outstanding liabilities of CannaKorp. Upon the closing of the Exchange Agreement, CannaKorp will continue its business operations as a subsidiary of the Company. The transaction was closed effective March 1, 2019. Going Concern and Management Plans The Company has minimal revenue since inception to date and has sustained operating losses during the six months ended June 30, 2019. The Company had working capital deficit of $2,482,007 and an accumulated deficit of $12,415,830 as of June 30, 2019. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its members or other sources, as may be required. The unaudited condensed consolidated interim financial statements have been prepared assuming that the Company will continue as a going concern up-to at least 12 months from the balance sheet date; however, the above condition raises substantial doubt about the Company’s ability to do so. The unaudited condensed consolidated interim financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. In order to maintain its current level of operations, the Company will require additional working capital from either cash flow from operations or from the sale of its equity. However, the Company currently has no commitments from any third parties for the purchase of its equity. If the Company is unable to acquire additional working capital, it will be required to significantly reduce its current level of operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation The unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and the rules and regulations of the SEC and are expressed in US dollars. Accordingly, the unaudited condensed consolidated interim financial statements do not include all information and footnotes required by US GAAP for complete annual financial statements. The unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of only normal recurring adjustments, considered necessary for a fair presentation. Interim operating results are not necessarily indicative of results that may be expected for the year ending December 31, 2019 or for any other interim period. The unaudited condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements of the Company and the notes thereto as of and for the year ended December 31, 2018. The unaudited condensed consolidated interim financial statements include the accounts of the Company and its wholly-owned subsidiaries, Visava Inc. and CannaKorp, Inc. Significant intercompany accounts and transactions have been eliminated. Accounts receivable Accounts receivable consists of amounts due to the Company from customers as a result of the Company’s normal business activities. Accounts receivable is reported on the balance sheets net of an estimated allowance for doubtful accounts. The Company establishes an allowance for doubtful accounts for estimated uncollectible receivables based on historical experience, assessment of specific risk, review of outstanding invoices, and various assumptions and estimates that are believed to be reasonable under the circumstances, and recognizes the provision as a component of selling, general and administrative expenses. Uncollectible accounts are written off against the allowance after appropriate collection efforts have been exhausted and when it is deemed that a balance is uncollectible. As of June 30, 2019, the Company expects to collect these balances completely and therefore has not created any allowance for it. Inventory Inventory is stated at the lower of cost or net realizable value, cost being determined on a weighted average cost basis, and market being determined as the lower of cost or net realizable value. The Company records write-downs of inventory that is obsolete or in excess of anticipated demand or market value based on consideration of product lifecycle stage, technology trends, product development plans and assumptions about future demand and market conditions. Actual demand may differ from forecasted demand, and such differences may have a material effect on recorded inventory values. Inventory write-downs are charged to cost of revenue and establish a new cost basis for the inventory. Inventories consists of raw materials and finished goods. The cost is determined on the basis of the average cost or first-in, first-out methods. Use of Estimates The preparation of the unaudited condensed consolidated interim financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated interim financial statements and the reported amounts of revenues and expenses during the reporting periods. Estimates may include those pertaining to accruals. Actual results could materially differ from those estimates. Revenue recognition The Company adopted ASC 606 effective January 1, 2019, using the modified retrospective method after electing to delay the adoption of the accounting standard as the Company qualified as an “emerging growth company”. Since the Company did not have any contracts as of the effective day, therefore, there was no material impact on the unaudited condensed consolidation interim financial statements upon adoption of the new standard. Revenue is recognized when performance obligations under the terms of the contracts with our customers are satisfied. Our performance obligation generally consists of the promise to sell our finished products to our customers, wholesalers, distributors or retailers. Control of the finished products is transferred upon shipment to, or receipt at, our customers’ locations, as determined by the specific terms of the contract. Once control is transferred to the customer, we have completed our performance obligation, and revenue is recognized. Deferred revenue is due to a shipment sent to one of the Company’s distributors. However, since control has not been transferred and the performance obligation has not been completed, revenue has not been recognized and proceeds received are classified as deferred revenue. Recently Issued Accounting Standards The Company evaluated all recent accounting pronouncements issued and determined that the adoption of these pronouncements would not have a material effect on the financial position, results of operations or cash flows of the Company. In August 2018, the FASB issued ASU 2018‑13, “Changes to Disclosure Requirements for Fair Value Measurements”, which will improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements, and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company will be evaluating the impact this standard will have on the Company’s unaudited condensed consolidated interim financial statements. In June 2018, the FASB issued an accounting pronouncement (FASB ASU 2018‑07) to expand the scope of ASC Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the unaudited condensed consolidated interim financial statements. In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842). This guidance revises the accounting related to leases by requiring lessees to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions. This ASU is effective for annual reporting periods beginning after December 15, 2018 and early adoption is permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the unaudited condensed consolidated interim financial statements. The Company qualifies as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging growth company, management can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The management has elected to take advantage of the benefits of this extended transition period. |
Related Party Transactions and
Related Party Transactions and Balances | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions and Balances | |
Related Party Transactions and Balances | 3. Related Party Transactions and Balances During the six months ended June 30, 2019, $97,321 (June 30, 2018: $150,000) was recorded as management services fee payable to Rubin Schindermann ($75,000) and Alexander Starr ($22,321), who are shareholders and officers in the Company. The amount is included in the related party balance as at June 30, 2019. They were issued 14,834,850 shares (December 31, 2018: 5,529,412 shares) for these services performed and to settle the shareholder advance as of and for the six months ended June 30, 2019. These were recorded at fair value in the amount of $1,665,329. On February 22, 2019, Alexander Starr terminated his employment agreement but remained as the President of the Company and the Company has guaranteed to pay $180,000 within the next twelve months starting from March 1, 2019 with payments being made twice a month. During the three months ended June 30, 2019, out of the above mentioned 14,834,850 share issuance, 8,234,850 shares, fair valued at $885,329 were issued to Alexander Star to settle the outstanding management service fee payable of $162,019 and shareholder advances in amount of $14,032. The company recorded a loss on settlement in the amount of $709,278. Amounts payable to Rubin Schindermann and Alexander Starr as at June 30, 2019 were $nil and $nil, respectively (December 31, 2018: $200,00 and $139,697, respectively). During the three months ended, June 30, 2019, Saul Niddam, Chief Operating Officer of the subsidiary, CannaKorp, purchased 1,666,667 shares (December 31, 2018: nil shares) as consideration for private placement. These were recorded at fair value in the amount of $37,385 based on the cash proceeds received by the Company. During the year ended December 31, 2017, Eric Schindermann, who is the son of Rubin Schindermann, became a lender to the Company by way of assignment of an existing promissory note liability of the Company amounting to $18,000. 1,591,556 shares of the Company’s common stock were issued to Eric Schindermann during the year end December 31, 2018, on full conversion of the debt. During the six months ended June 30, 2019, $101,936 (December 31, 2018: $60,000) was paid as remuneration for management services as salaries to Randal MacLeod, who is shareholder in the Company and President of the subsidiary, Visava. In addition, 3,000,000 shares were issued as a bonus for completing the facility’s construction, fair valued in the amount of $294,000. As at June 30, 2019, the outstanding balance of multiple loans provided by the shareholders in the Company’s subsidiary, CannaKorp, is $387,000 which is included in the payable to related party balance. As at June 30, 2019, the remaining balance of $46,313 in payable to related parties are management fee accruals for services performed by key management personals (December 31, 2018: $62,500). |
Shareholder Advances
Shareholder Advances | 6 Months Ended |
Jun. 30, 2019 | |
Shareholder Advances | |
Shareholder Advances | 4. Shareholder Advances Shareholder advances represent expenses paid by the owners from personal funds. The amount is non-interest bearing, unsecured and due on demand. The amount of advance as at June 30, 2019 and December 31, 2018 was $nil and $209,046, respectively. The amounts repaid during the six months ended June 30, 2019 and 2018 were $75,623 and $49,157, respectively, and the remaining portion in the amount of $133,423 was settled through issuance of shares of common stock. Refer to Note 3 for details. |
Capital work in progress
Capital work in progress | 6 Months Ended |
Jun. 30, 2019 | |
Capital work in progress | |
Capital work in progress | 5. Capital work in progress The Company initiated construction on its 44,000 square foot cannabis cultivation facility in September of 2017. Since then, extensive demolition and structural upgrades have been carried out at the site. As at June 30, 2019, the Company has capitalized $8,820,385 in payments to multiple vendors for the construction of the facility. Construction in progress will be considered leasehold improvements, and is expected to be in service when the facility is open and licensed. On May 1, 2019, the Company completed the construction of its 44,000 square foot cannabis cultivation facility and on May 14, 2019, the Company submitted a Site Evidence Package to Health Canada as part of the steps to obtain the license to cultivate cannabis at the Company’s facility |
Sales Tax Recoverable
Sales Tax Recoverable | 6 Months Ended |
Jun. 30, 2019 | |
Sales Tax Recoverable | |
Sales Tax Recoverable | 6. Sales Tax Recoverable At June 30, 2019, the Company had $76,713 (December 31, 2018: $294,033) of gross sales tax recoverable. This is due to sales tax paid by the subsidiary on expenses incurred during the year which are recoverable from the government. The Company has recorded an allowance of 25% of the sales tax recoverable stemming from the potential uncollectible balances within the outstanding sales tax recoverable amount. As of June 30, 2019, the balance of the allowance is $19,178, (December 31, 2018: $75,902). |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets Business Acquisition ASC Topic 805, “Business Combinations” requires that all business combinations be accounted for using the acquisition method and that certain identifiable intangible assets acquired in a business combination be recognized as assets apart from goodwill. ASC Topic 350, “Intangibles-Goodwill and Other” (“ASC 350”) requires goodwill and other identifiable intangible assets with indefinite useful lives not be amortized, such as trade names, but instead tested at least annually for impairment (which the Company tests each year end, absent any impairment indicators) and be written down if impaired. ASC 350 requires that goodwill be allocated to its respective reporting unit and that identifiable intangible assets with finite lives be amortized over their useful lives. CannaKorp Inc. Effective January 25, 2019, the Company entered into an Agreement and Plan of Share Exchange (“Exchange Agreement”) with CannaKorp Inc., a Delaware corporation (“CannaKorp”). Company had previously entered into a Letter of Intent with CannaKorp dated November 30, 2018 which was disclosed in the Company’s report on Form 8‑K filed December 4, 2018. The Exchange Agreement provides that, subject to its terms and conditions, the Company issued to the CannaKorp shareholders an aggregate of 30,407,412 shares of the Company’s common stock, based on a price per share of $0.10, in exchange for 100% of the issued and outstanding common stock of CannaKorp held by the CannaKorp shareholders. In addition, the Company will issue Common Stock Purchase Warrants (“Warrants”) in exchange for all outstanding and promised CannaKorp stock options. The Warrants will grant the holders thereof the right to purchase up to approximately 7,211,213 shares of the Company’s common stock. The Company will also assume all outstanding liabilities of CannaKorp. Upon the closing of the Exchange Agreement, CannaKorp will continue its business operations as a subsidiary of the Company. The transaction was closed effective March 1, 2019. Due to the publicly traded nature of the Company’s shares of the common stock, the equity issuance of the shares was considered to be a more reliable measurement of fair market value of the transaction compared to having a separate valuation of the net assets. This acquisition was accounted for using the acquisition method of accounting. The fair value of assets, liabilities and intangible assets and the purchase price allocation as of March 1, 2019 was as follows: Allocation of Purchase Price $ Cash 5,658 Accounts Receivable 2,068 Inventory 1,052,555 Prepaid and other receivables 98,277 Property and equipment, net 384,177 Total assets 1,542,735 Accounts payable (1,448,421) Accrued expenses and other current liabilities (851,886) Deferred revenue (128,158) Payable to related parties (753,738) Total liabilities (3,182,203) Net liabilities (1,639,468) Goodwill 5,702,312 Total net assets acquired 4,062,844 The purchase consideration of 30,407,412 shares and 7,211,213 warrants of the Company’s common stock valued as detailed below: $ Number of Common Stock 30,407,712 Market price on the date of issuance 0.108 Fair value of Common Stock 3,284,033 $ Number of warrants 7,211,213 Fair value price per warrant 0.108 Fair value of warrant 778,811 Fair value of Common Stock 3,284,033 Fair value of warrant 778,811 Purchase consideration 4,062,844 The fair value of these warrants was measured at the date of acquisition using the Black-Scholes option pricing model using the following assumptions: · Forfeiture rate of 0%; · Stock price of $0.108 per share; · Exercise price between the range of $0.13 to $0.15 per share · Volatility at 635.49% · Risk free interest rate of 2.55%; · Expected life of 2 years; and · Expected dividend rate of 0% As at June 30, 2019, there were 7,211,213 warrants outstanding, fully vested and with a remaining contractual life term of 1.67 years. Visava Inc./Canary Rx Inc. On June 27, 2018, the Company entered into an Agreement and Plan of Share Exchange (“Exchange Agreement”) with Visava Inc., a private Ontario, Canada corporation (“Visava”). Visava owns 100% of Canary Rx Inc., a Canadian corporation that holds a leasehold interest in a parcel of property located in Ontario’s Garden Norfolk County for the production of cannabis. Pursuant to the Agreement, the Company acquired 100% of the issued and outstanding shares of Visava Inc. in exchange for the issuance of 25,500,000 shares of the Company’s Common Stock and will issue to the Visava shareholders, prorata Common Stock Purchase Warrants purchasing an aggregate of 25,000,000 shares of the Company’s Common Stock at a price per share of $0.10 for a period of two years following the issuance date of the Warrants. As a result of this transaction, Visava Inc. became a wholly owned subsidiary of the Company and the former shareholders of Visava Inc. owned approximately 46.27% of the Company’s shares of Common Stock. The transaction was closed effective August 2, 2018. This acquisition was accounted for using the acquisition method of accounting. The fair value of assets, liabilities and intangible assets and the purchase price allocation as of August 2, 2018 was as follows: Allocation of Purchase Price $ Prepaid and other receivables 15,368 Sales tax recoverable 133,614 Furniture and equipment 897 Capital work in progress 898,422 Total assets 1,048,301 Bank overdraft (63,693) Accounts payable (1,158,164) Payable to related parties (101,797) Total liabilities (1,323,654) Net liabilities (275,353) Goodwill 3,594,195 Total net assets acquired 3,318,842 The purchase consideration of 25,500,000 shares and 25,000,000 warrants of the Company’s common stock valued as detailed below: $ Number of Common Stock 25,500,000 Market price on the date of issuance 0.0665 Fair value of Common Stock 1,695,750 $ Number of warrants 25,000,000 Fair value price per warrant 0.0649 Fair value of warrant 1,623,092 Fair value of Common Stock 1,695,750 Fair value of warrant 1,623,092 Purchase consideration 3,318,842 The fair value of these warrants was measured at the date of acquisition using the Black-Scholes option pricing model using the following assumptions: · Forfeiture rate of 0%; · Stock price of $0.067 per share; · Exercise price of $0.10 per share · Volatility at 329% · Risk free interest rate of 2.66%; · Expected life of 2 years; and · Expected dividend rate of 0% As at June 30, 2019, there were 25,000,000 warrants outstanding, fully vested and with a remaining contractual life term of 1.09 years. Goodwill The Company tests for impairment of goodwill at the reporting unit level. In assessing whether goodwill is impaired, the Company utilize the two-step process as prescribed by ASC 350. The first step of this test compares the fair value of the reporting unit, determined based upon discounted estimated future cash flows, to the carrying amount, including goodwill. If the fair value exceeds the carrying amount, no further work is required and no impairment loss is recognized. If the carrying amount of the reporting unit exceeds the fair value, the goodwill of the reporting unit is potentially impaired and step two of the goodwill impairment test would need to be performed to measure the amount of an impairment loss, if any. In the second step, the impairment is computed by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount of the goodwill. If the carrying amount of the reporting unit’s goodwill is greater than the implied fair value of its goodwill, an impairment loss in the amount of the excess is recognized and charged to statement of operations. |
Convertible Promissory Notes
Convertible Promissory Notes | 6 Months Ended |
Jun. 30, 2019 | |
Convertible Promissory Notes | |
Convertible Promissory Notes | 8. Convertible Promissory Notes During the six months ended June 30, 2019, the Company issued convertible promissory notes, details of which are as follows: Convertible promissory note issued on February 16, 2019, amounting to $103,000 (Note Q). The key terms/features of the convertible note are as follows: 1. The maturity date of the Note is August 16, 2020. 2. Interest on the unpaid principal balance of this Note accrues at the rate of 12% per annum. 3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 61% of the lowest closing bid price of the Company’s common stock for the fifteen (15) trading days prior to the date of conversion. 4. The Company shall not be obligated to accept any conversion request before six months from the date of the note. 5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion. During the quarter ended June 30, 2019, the Company settled the outstanding balance in full with a cash payment and recorded a loss of $35,173 as settlement of debt in the condensed consolidated statement of operations. The loss is due to the prepayment penalty as per the note agreement. Convertible promissory note issued on December 24, 2018, amounting to $83,000 (Note P). The key terms/features of the convertible note are as follows: 1. The maturity date of the Note is June 24, 2020. 2. Interest on the unpaid principal balance of this Note accrues at the rate of 12 % per annum. 3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 61% of the average of the three (3) lowest trading price of the Company’s common stock for the fifteen (15) trading days prior to the date of conversion. 4. The Company shall not be obligated to accept any conversion request before six months from the date of the note. 5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion. During the quarter ended June 30, 2019, the Company settled the outstanding balance in full with a cash payment and recorded a loss of $36,085 as settlement of debt in the condensed consolidated statement of operations. The loss is due to the prepayment penalty as per the note agreement. Convertible promissory note issued on November 28, 2018, amounting to $75,000 (Note O). The key terms/features of the convertible note are as follows: 1. The maturity date of the Note is November 28, 2019. 2. Interest on the unpaid principal balance of this Note accrues at the rate of 10 % per annum. 3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 52% of the lowest trading price of the Company’s common stock for the twenty (20) trading days prior to the date of conversion. 4. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion. During the quarter ended June 30, 2019, the Company settled the outstanding balance in full with a cash payment and recorded a loss of $27,526 as settlement of debt in the condensed consolidated statement of operations. The loss is due to the prepayment penalty as per the note agreement. Convertible promissory note issued on September 5, 2018, amounting to $103,000 (Note N). The key terms/features of the convertible note are as follows: 1. The maturity date of the Note is December 5, 2019. 2. Interest on the unpaid principal balance of this Note accrued at the rate of 12% per annum. 3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 61% of the average of the three (3) lowest trading price of the Company’s common stock for the fifteen (15) trading days prior to the date of conversion. 4. The Company shall not be obligated to accept any conversion request before six months from the date of the note. 5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion. During the quarter ended March 31, 2019, the Company settled the outstanding balance in full with a cash payment and recorded a loss of $27,368 as settlement of debt in the condensed consolidated statement of operations. The loss is due to the prepayment penalty as per the note agreement. Convertible promissory note issued on August 9, 2018, amounting to $65,000 (Note M). The key terms/features of the convertible note are as follows: 1. The maturity date of the Note is September 9, 2019. 2. Interest on the unpaid principal balance of this Note accrued at the rate of 10% per annum. 3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 52% of the lowest closing bid price of the Company’s common stock for the twenty (20) trading days prior to the date of conversion. 4. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion. During the quarter ended March 31, 2019, the Company settled the outstanding balance in full with a cash payment and recorded a loss of $23,342 as settlement of debt in the condensed consolidated statement of operations. The loss is due to the prepayment penalty as per the note agreement. Convertible promissory note issued on January 16, 2018, amounting to $28,000 (Note L). The key terms/features of the convertible note are as follows: 1. The maturity date of the Note was October 30, 2018. 2. Interest on the unpaid principal balance of this Note accrues at the rate of 12 % per annum. 3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 58% of the lowest closing bid price of the Company’s common stock for the fifteen (15) trading days prior to the date of conversion. 4. As maturity date has passed, the Company is now obligated to accept all conversion requests on the note. 5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion. During the year ended December 31, 2017, the Company issued convertible promissory notes, details of which are as follows: Convertible promissory note issued on November 28, 2017, amounting to $33,000 (Note K). The key terms/features of the convertible note are as follows: 1. The maturity date of the Note was March 10, 2019. 2. Interest on the unpaid principal balance of this Note accrues at the rate of 12 % per annum. 3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 58% of the lowest closing bid price of the Company’s common stock for the twenty (15) trading days prior to the date of conversion. 4. As maturity date has passed, the Company is now obligated to accept all conversion requests on the note. 5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion. Convertible promissory note issued on May 5, 2017 amounting to $23,000 (Note J). The key terms/features of the convertible note are as follows: 1. The maturity date of the note was February 20, 2018 2. Interest on the unpaid principal balance of this note accrues at the rate of 12% per annum. 3. In the event the Note holder exercised the right of conversion, the conversion price was equal to 58% of the average of the three (3) lowest closing bid price of the Company’s common stock for the fifteen (15) trading days prior to the date of conversion. 4. As maturity date has passed, the Company is now obligated to accept all conversion requests on the note. 5. Conversion was limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion. Convertible promissory note issued on January 31, 2017 amounting to $33,000 (Note I). The key terms/features of the convertible note are as follows: 1. The maturity date of the note was November 5, 2018. 2. Interest on the unpaid principal balance of this note shall accrue at the rate of 12% per annum. 3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 58% of the average of the three (3) lowest closing bid price of the Company’s common stock for the fifteen (15) trading days prior to the date of conversion. 4. As maturity date has passed, the Company is now obligated to accept all conversion requests on the note. 5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion. During the year ended December 31, 2016, the Company issued convertible promissory notes, details of which are as follows: Convertible Redeemable note issued on October 18, 2016, amounting to $140,000 (Note H), representing commitment fee owed by the Company pursuant to Securities Purchase Agreement entered into by the Company dated October 18, 2016. The commitment fee was considered a prepaid asset. During the year ended December 31, 2017, the pending S1 registration statement was withdrawn, removing the benefit associated with the prepaid asset. The amount was therefore written off as commitment fee in the statement of operations. During the quarter ended March 31, 2018, the Company obtained forgiveness of the liability and the interest associated with the note payable and recorded $153,471 as forgiveness of debt in the condensed consolidated statement of operations. The key terms/features of the convertible note are as follows: 1. The maturity date of the Note was July 18, 2017. 2. Interest on the unpaid principal balance of this Note accrued at the rate of 7 % per annum. 3. In the event the Note holder exercised the right of conversion, the conversion price would be equal to 80% of the lowest trading price of the Company’s common stock for the twenty (20) trading days prior to the date of conversion. 4. As maturity dates have passed, the Company is now obligated to accept all conversion requests on the note. 5. Conversion is limited to the holder beneficially holding not more than 9.99% of the Company’s then issued and outstanding common stock after the conversion. Convertible Redeemable notes issued on October 18, 2016, amounting to $100,000 and $25,000 (Notes F and G). The key terms/features of the convertible note are as follows: 1. The maturity date of the Note was July 18, 2017. 2. Interest on the unpaid principal balance of this Note accrued at the rate of 7 % per annum. 3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 57.5% of the lowest trading price of the Company’s common stock for the twenty (20) trading days prior to the date of conversion. 4. As maturity dates have passed, the Company is now obligated to accept all conversion requests on the note. 5. Conversion is limited to the holder beneficially holding not more than 9.99% of the Company’s then issued and outstanding common stock after the conversion. During the six months ended June 30, 2018, the Company entered into a Debt Exchange Agreement with the holder of the convertible note F and G. The outstanding principal amounts of the notes were extinguished and settled by issuance of 2,500,000 common shares of the Company. The Company recorded a loss of $267,522 as a result of this settlement. Convertible promissory note issued on May 13, 2016, amounting to $75,000 (Note D). The key terms/features of the convertible note are as follows: 1. The maturity date of the note was January 13, 2019. 2. Interest on the unpaid principal balance of this note accrues at the rate of 8 % per annum. 3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 52% of the lowest closing bid price of the Company’s common stock for the twenty (20) trading days prior to the date of conversion. 4. As maturity dates have passed, the Company is now obligated to accept all conversion requests on the note. 5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion. Convertible promissory notes issued on March 1, 2016 amounting to $150,000 each to two investors (Notes B and C). The key terms/features of the convertible notes are as follows: 1. The Holders have the right from six months after the date of issuance, and until any time until the Notes are fully paid, to convert any outstanding and unpaid principal portion of the Notes, into fully paid and non–assessable shares of Common Stock (par value $.0001). 2. The Notes are convertible at a fixed conversion price of 45% of the lowest trading price of the Common Stock as reported on the OTC Pink maintained by the OTC Markets Group, Inc. upon which the Company’s shares are currently quoted, for the four (4) prior trading days including the day upon which a Notice of Conversion is received by the Company. 3. Interest on the unpaid principal balance of this Note shall accrue at the rate of twenty-four (24 %) per annum. 4. Beneficial ownership is limited to 4.99%. 5. The Notes may be prepaid in whole or in part, at any time during the period beginning on the issue date and ending on the maturity date September 1, 2018, beginning at 100% of the outstanding principal, accrued interest and certain other amounts that may be due and owing under the Notes. Convertible Redeemable note issued on May 19, 2016, amounting to $75,000 (Note A). The key terms/features of the convertible note are as follows: 1. The maturity date of the Note was November 18, 2018. 2. Interest on the unpaid principal balance of this Note shall accrue at the rate of 8 % per annum. 3. In the event the Note holder exercises the right of conversion, the conversion price will be equal to 52% of the lowest closing bid price of the Company’s common stock for the twenty (20) trading days prior to the date of conversion. 4. As maturity dates have passed, the Company is now obligated to accept all conversion requests on the note. 5. Conversion is limited to the holder beneficially holding not more than 4.99% of the Company’s then issued and outstanding common stock after the conversion. Interest amounting to $8,038 was accrued for the period ended June 30, 2019 (June 30, 2018: $28,002). Principal amount outstanding as at June 30, 2019 was $44,863 (December 31, 2018: $476,846). All notes maturing prior to the date of this report are outstanding. Derivative liability During the six months ended June 30, 2019, holders of convertible promissory notes converted principal amounting to $108,233 (June 30, 2018: $61,928). The Company recorded and fair valued the derivative liability as follows: Derivative Conversions / Derivative liability as at Redemption liability as at December 31, during the Change due to Fair value March 31, 2018 period Issuances adjustment 2019 Note B and C 374,911 (32,758) — (309,065) 33,088 Note D 4,030 — — 2,418 6,448 Note F 10,948 — — (1,063) 9,885 Note G 3,976 — — (386) 3,590 Note I 30,144 — — 3,698 33,842 Note K 15,679 — — (4,644) 11,035 Note M 105,181 (95,113) — (10,068) — Note N 97,936 (86,363) — (11,573) — Note O 122,090 (109,782) — (12,308) — Note P 97,588 (81,918) — (15,670) — Note Q — (104,111) 121,362 (17,251) — 862,483 (510,045) 121,362 (375,912) 97,888 During the quarter ended December 31, 2018, the Company changed its valuation method from Black-Scholes Model to Multinomial Lattice Model. This is considered a change in the Company’s estimate and therefore, it has been accounted prospectively. Key assumptions used for the valuation of convertible notes Derivative element of the convertible notes was fair valued using multinomial lattice model. Following assumptions were used to fair value these notes as at June 30, 2019: · Projected annual volatility of a range from 147.3% to 223.1%; · Risk free interest rate of 1.90%; · Stock price of $0.0100; · Liquidity term of 0.19 to 1.13 years; · Dividend yield of 0%; and · Exercise price of $0.0151 to $0.0515. |
Stockholders' Deficit
Stockholders' Deficit | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Deficit | |
Stockholders' Deficit | 9. Stockholders’ Deficit On July 3, 2017, the Company filed an amended Certificate of Incorporation in Delaware to increase its authorized common stock to 20,000,000,000 shares. The Company’s authorized preferred stock remained at 20,000,000 shares. 1,000,000 shares of Preferred Stock having a par value of $0.0001 per share shall be designated as Series A Preferred Stock (“Series A Stock”). Dividends shall be declared and set aside for any shares of Series A Stock in the same manner and amount as for the Common Stock. Series A Stock, as a class, shall have voting rights equal to a multiple of 2X the number of shares of Common Stock issued and outstanding that are entitled to vote on any matter requiring shareholder approval. The Company, as authorized by its Board of Directors and stockholders, has approved a Reverse Split whereby record owners of the Company’s Common Stock as of the Effective Date, shall, after the Effective Date, own one share of Common Stock for every one thousand (1,000) held as of the Effective Date. As a result, an aggregate of $387,978 was reclassified from common stock to additional paid in capital. The Effective Date of this amendment was November 1, 2017. Effective September 25, 2018, the Company filed an amended Certificate of Incorporation in Delaware to decrease its authorized common stock to 850,000,000 shares. The Company’s authorized preferred stock remained at 20,000,000 shares. Capitalization The Company is authorized to issue 850,000,000 shares of common stock, par value $0.0001, of which 541,362,258 shares are outstanding as at June 30, 2019 (at December 31, 2018: 93,624,289 shares of common stock issued and outstanding). The Company is also authorized to issue 20,000,000 shares of preferred stock, par value $0.0001, of which 1,000,000 shares were outstanding as at June 30, 2019. Common Stock Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders. Holders of common stock do not have cumulative voting rights. Subject to preferences that may be applicable to any outstanding shares of preferred stock, the holders of common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the board of directors in its discretion from funds legally available therefor. Holders of common stock have no pre-emptive rights to purchase the Company’s common stock. There are no conversion or redemption rights or sinking fund provisions with respect to the common stock. The Company may issue additional shares of common stock which could dilute its current shareholder’s share value. During the quarter ended March 31, 2018, the Company issued 5,529,412 shares of common stock each to Rubin Schindermann and Alexander Starr as consideration to settle outstanding management fee recorded at fair value of $84,000, of which $9,000 had previously been recorded in Accounts Payable. During the quarter ended March 31, 2018, the Company issued 5,156,932 shares of common stock to individuals on conversion of convertible promissory notes amounting to $21,518 and 300,000 shares were issued as consideration for consulting services amounting to $3,600. During the quarter ended June 30, 2018, the Company issued 3,140,506 shares of common stock to individuals on conversion of convertible promissory notes amounting to $47,826 and 500,000 shares were issued as consideration for consulting services amounting to $22,500. During the quarter ended June 30, 2018, the Company issued 2,500,000 shares of common stock to the note holder for settlement of debt. See Note 8 for details. During the quarter ended September 30, 2018, the Company issued 5,301,990 shares of common stock to individuals on conversion of convertible promissory notes amounting to $87,942. During the quarter ended September 30, 2018, the Company issued 24,648,683 shares of common stock to shareholders of Visava Inc. as per the Exchange Agreement mentioned in Note 7. The remaining shares of 851,317 are included in shares to be issued. During the quarter ended December 31, 2018, the Company issued 7,964,528 shares of common stock to individuals on conversion of convertible promissory notes amounting to $126,384. During the year ended December 31, 2018, 63,094,634 shares of common stock to be issued as consideration for private placements. These were recorded at fair value of $2,735,545, based on the cash proceeds received by the Company. As part of consideration for the private placement, the Company also agreed to issue warrants to purchase 63,094,634 shares of common stock. Out of the total amount of shares to be issued, the Company issued 22,757,102 shares during quarter ended December 31, 2018. Refer below for additional details regarding the warrant issued under the subheading “Warrants”. Additionally, $215,680 were received as partial consideration for private placements and since signed agreements were executed during December 2018, the remaining balance of $220,319 has been classified as a Stock subscription receivable under equity. During the quarter ended March 31, 2019, the remaining balance was collected. During the quarter ended March 31, 2019, the Company issued 588,237 shares of common stock to individuals on conversion of convertible promissory notes amounting to $30,000. Additionally, the Company issued 30,407,412 shares of common stock to shareholders of CannaKorp Inc. as per the Exchange Agreement mentioned in Note 7. During the quarter ended March 31, 2019, the Company sold 226,441,371 shares of common stock as consideration for private placements. These were recorded at fair value of $4,558,282, based on the cash proceeds received by the Company. As part of consideration for the private placement, the Company also agreed to issue warrants to purchase 226,554,129 shares of common stock. Effective April 1, 2019, the Company changed its functional currency from United States Dollar to Canadian Dollar thereby having an impact on additional paid in capital and accumulated comprehensive income (loss). The presentation currency of the Company has remained unchanged at United States Dollar. During the quarter ended June 30, 2019, the Company issued 10,562,252 shares of common stock to individuals on conversion of convertible promissory notes amounting to $159,490. 250,000 shares of common stock to be issued as consideration of the intellectual property rights granted by Smit to the Company’s subsidiary, Canary. These were recorded at fair value of $27,000, based on the market price of the Company’s stock on the date of agreement. These were initially recorded under shares to be issued and allocated between common stock and additional paid in capital during the quarter ended June 30, 2019 when the shares were issued. During the quarter ended June 30, 2019, the Company issued 6,600,000 and 8,234,850 shares of common stock to Rubin Schindermann and Alexander Starr, respectively, as consideration to settle outstanding management fee and shareholder advances recorded at fair value of $1,665,329. Plus, 3,000,000 shares of common stock were issued as a bonus for completing the facility's construction, fair valued in the amount of $294,000. Refer to Note 3 for additional details. In addition, 500,000 shares were issued as consideration for consulting services amounting to $48,000. During the three months ended, June 30, 2019, Saul Niddam, Chief Operating Officer of the subsidiary, CannaKorp purchased 1,666,667 shares (December 31, 2018: nil shares) as consideration for private placement. These were recorded at fair value in the amount of $37,385 based on the cash proceeds received by the Company. During the quarter ended June 30, 2019, the Company sold 126,109,709 shares of common stock as consideration for private placements. These were recorded at fair value of $4,194,665, based on the cash proceeds received by the Company. As part of consideration for the private placement, the Company also agreed to issue warrants to purchase 81,139,987 shares of common stock. During the quarter, the Company issued 358,520,843 shares for past and current private placements. Refer below for additional details regarding the warrant issued under the subheading “Warrants”. Additionally, proceeds of $358,074 were received as consideration for private placements, however signed agreements were not executed as at June 30, 2019 and these have therefore been classified as a liability. Shares to be issued include the following: 80,000 shares of common stock to be issued as compensation to advisers and consultants. These were recorded at fair value of $52,000, based on the market price of the Company’s stock on the date of issue. 35,000 shares to be issued as settlement of amount due for website development services amounting to $247,306. The fair value of the shares on the date of settlement was $21,000, resulting in gain on settlement amounting to $226,306 recorded as net gain on settlement of liability in the statement of operations for the year ended December 31, 2017. 15,106,972 shares of common stock to be issued as consideration for private placements. Proper allocation between common stock and additional paid in capital of the amount received will be completed in the period when the shares are issued. Warrants The fair value of the warrants issued to private placement purchasers was measured at the date of acquisition using the Black-Scholes option pricing model using the following assumptions: During quarter ended June 30, 2019 During quarter ended March 31, 2019 During year ended December 31, 2018 Forfeiture rate 0 % 0 % 0 % Stock price $0.080 to $0.149 per share $0.080 to $0.120 per share $0.060 to $0.210 per share Exercise price $0.023 to $0.200 per share $0.050 per share $0.050 to $0.150 per share Volatility 605% to 679% 690 % % Risk free interest rate 1.69% to 2.54% 2.26% to 2.60% 2.52% to 2.96% Expected life 2 and 3 years 3 years 2 and 3 years Expected dividend rate 0 % 0 % 0 % Fair value of warrants $8,873,292 $23,305,826 $6,417,010 As at June 30, 2019, related to private placements, there were 370,778,750 warrants were outstanding, fully vested and with a remaining contractual life term of a range between 0.99 and 2.70 years. As at June 30, 2019, related to the acquisition of the Company’s subsidiaries, Visava Inc. and CannaKorp Inc, there were 25,000,000 and 7,211,213 warrants outstanding, fully vested and with a remaining contractual life term of 1.09 and 1.67 years, respectively. Preferred Stock Shares of preferred stock may be issued from time to time in one or more series as may be determined by the board of directors. The board of directors may fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof without any further vote or action by the stockholders of the Company, except that no holder of preferred stock shall have pre-emptive rights. Any shares of preferred stock so issued would typically have priority over the common stock with respect to dividend or liquidation rights. The board of directors does not at present intend to seek stockholder approval prior to any issuance of currently authorized stock, unless otherwise required by law or otherwise. |
Earnings (loss) Per Share
Earnings (loss) Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings (loss) Per Share | |
Earnings (loss) Per Share | 10. Earnings (loss) Per Share FASB ASC 260, Earnings Per Share provides for calculations of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common stockholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As at June 30, 2019, holders of convertible promissory notes may be issued 6,207,126 shares assuming a conversion prices ranging from $0.0151 to $0.0464 per share. |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2019 | |
Commitments | |
Commitments | 11. Commitments The Company is a party to a 5-year lease agreement (initiated on September 2018) with respect to its office premises. Total rent for the premises is $848 (CAD $1,100) plus applicable taxes per month. On the first anniversary date, the rent per month will increase to $869 (CAD $1,138) plus applicable taxes, on the second anniversary date, the rent per month will increase to $891 (CAD $1,166) plus applicable taxes, on the third anniversary date, the rent per month will increase to $912 (CAD $1,193) plus applicable taxes, on the fourth anniversary date, the rent per month will increase to $933 (CAD $1,221) plus applicable taxes. The Company’s subsidiary, Canary, is a party to a 10-year lease agreement (initiated on July 2014) with respect to its facility to produce Medical Marijuana. Total rent for the building is $1,910 (CAD $2,500) plus applicable taxes per month. Effective January 1, 2019, the rent was increased to $19,103 (CAD $25,000) plus applicable taxes per month. The lease agreement has three 10-year renewal options and on each anniversary date, commencing from January 1, 2020, the rent will increase by the cumulative annual percentage increase in the Canadian Consumer Price Index. Deferred rent is due to the amortization of the operating lease expense resulting from the use of straight-line method versus the non-level lease payments and tenant improvements being made in the Company’s production facility paid by the Company’s landlord in amount of $1,716,694 (CAD $2,331,063). As at June 30, 2019, The Company has recorded tenant improvement allowance incentive amount in work in progress. The Company will be amortizing these deferred rent charges on a monthly basis in the amount of $27,831 (CAD $36,423) over the remaining term ending on June 30, 2024 as a reduction in rent expense. The Company’s subsidiary, CannaKorp, is a party to a monthly lease agreement (initiated on December 01, 2014) with respect to its facility, approximately 1,000 square feet of space located in a multi-tenant building. Total rent for the premises is $1,200 plus applicable taxes per month, tenancy may be terminated by a sixty (60) days written notice by the Company or the landlord. Future minimum rent payments for the above leases are as follows: $ 2019 179,643 2020 239,752 2021 240,012 2022 240,264 2023 and onwards 351,318 1,250,989 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events | |
Subsequent Events | 12. Subsequent Events The Company’s management has evaluated subsequent events up to August 19, 2019, the date the unaudited condensed consolidated interim financial statements were issued, pursuant to the requirements of ASC 855 and has determined the following material subsequent events: During July 2019, the Company issued 1,324,503 shares of common stock pursuant to conversion notices received from one holder of the convertible promissory notes. As disclosed in Note 9, during July and August 2019, the Company issued 8,020,383 shares of common stock as consideration to private placement funds received during prior periods. Effective August 8, 2019, the Company entered into an Exclusive License Agreement ("License Agreement") with cGreen, Inc., a Delaware corporation ("cGreen"). The License Agreement grants to the Company an exclusive license to manufacture, and distribute the patent-pending THC antidote True Focus(TM) in the United States, Europe and the Caribbean. The term of the license is ten (10) years and four (4) months from the effective date of August 8, 2019. In consideration of the license, the Company will issue 10,000,000 shares of its common stock as follows: (i) 3,500,000 within ten (10) days of the effective date; (ii) 3,500,000 shares on January 10, 2020; and (iii) 3,000,000 shares not later than June 10, 2020. In addition, the Company will pay cGreen royalties of 7% of the net sales of the licensed products and 7% of all sublicensing revenues collected by the Company. The Company will pay cGreen an advance royalty of $300,000.00 within ten (10) days of the effective date; $300,000.00 on January 10, 2020; and $400,000.00 on or before June 10, 2020 and $500,000.00 on or before November 10, 2020. All advance royalty payments will be credited against the royalties owed by the Company through December 31, 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and the rules and regulations of the SEC and are expressed in US dollars. Accordingly, the unaudited condensed consolidated interim financial statements do not include all information and footnotes required by US GAAP for complete annual financial statements. The unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of only normal recurring adjustments, considered necessary for a fair presentation. Interim operating results are not necessarily indicative of results that may be expected for the year ending December 31, 2019 or for any other interim period. The unaudited condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements of the Company and the notes thereto as of and for the year ended December 31, 2018. The unaudited condensed consolidated interim financial statements include the accounts of the Company and its wholly-owned subsidiaries, Visava Inc. and CannaKorp, Inc. Significant intercompany accounts and transactions have been eliminated. |
Accounts receivable | Accounts receivable Accounts receivable consists of amounts due to the Company from customers as a result of the Company’s normal business activities. Accounts receivable is reported on the balance sheets net of an estimated allowance for doubtful accounts. The Company establishes an allowance for doubtful accounts for estimated uncollectible receivables based on historical experience, assessment of specific risk, review of outstanding invoices, and various assumptions and estimates that are believed to be reasonable under the circumstances, and recognizes the provision as a component of selling, general and administrative expenses. Uncollectible accounts are written off against the allowance after appropriate collection efforts have been exhausted and when it is deemed that a balance is uncollectible. As of June 30, 2019, the Company expects to collect these balances completely and therefore has not created any allowance for it. |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value, cost being determined on a weighted average cost basis, and market being determined as the lower of cost or net realizable value. The Company records write-downs of inventory that is obsolete or in excess of anticipated demand or market value based on consideration of product lifecycle stage, technology trends, product development plans and assumptions about future demand and market conditions. Actual demand may differ from forecasted demand, and such differences may have a material effect on recorded inventory values. Inventory write-downs are charged to cost of revenue and establish a new cost basis for the inventory. Inventories consists of raw materials and finished goods. The cost is determined on the basis of the average cost or first-in, first-out methods. |
Use of Estimates | Use of Estimates The preparation of the unaudited condensed consolidated interim financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated interim financial statements and the reported amounts of revenues and expenses during the reporting periods. Estimates may include those pertaining to accruals. Actual results could materially differ from those estimates. |
Revenue recognition | Revenue recognition The Company adopted ASC 606 effective January 1, 2019, using the modified retrospective method after electing to delay the adoption of the accounting standard as the Company qualified as an “emerging growth company”. Since the Company did not have any contracts as of the effective day, therefore, there was no material impact on the unaudited condensed consolidation interim financial statements upon adoption of the new standard. Revenue is recognized when performance obligations under the terms of the contracts with our customers are satisfied. Our performance obligation generally consists of the promise to sell our finished products to our customers, wholesalers, distributors or retailers. Control of the finished products is transferred upon shipment to, or receipt at, our customers’ locations, as determined by the specific terms of the contract. Once control is transferred to the customer, we have completed our performance obligation, and revenue is recognized. Deferred revenue is due to a shipment sent to one of the Company’s distributors. However, since control has not been transferred and the performance obligation has not been completed, revenue has not been recognized and proceeds received are classified as deferred revenue. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards The Company evaluated all recent accounting pronouncements issued and determined that the adoption of these pronouncements would not have a material effect on the financial position, results of operations or cash flows of the Company. In August 2018, the FASB issued ASU 2018‑13, “Changes to Disclosure Requirements for Fair Value Measurements”, which will improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements, and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company will be evaluating the impact this standard will have on the Company’s unaudited condensed consolidated interim financial statements. In June 2018, the FASB issued an accounting pronouncement (FASB ASU 2018‑07) to expand the scope of ASC Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the unaudited condensed consolidated interim financial statements. In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842). This guidance revises the accounting related to leases by requiring lessees to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions. This ASU is effective for annual reporting periods beginning after December 15, 2018 and early adoption is permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the unaudited condensed consolidated interim financial statements. The Company qualifies as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging growth company, management can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The management has elected to take advantage of the benefits of this extended transition period. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | This acquisition was accounted for using the acquisition method of accounting. The fair value of assets, liabilities and intangible assets and the purchase price allocation as of March 1, 2019 was as follows: Allocation of Purchase Price $ Cash 5,658 Accounts Receivable 2,068 Inventory 1,052,555 Prepaid and other receivables 98,277 Property and equipment, net 384,177 Total assets 1,542,735 Accounts payable (1,448,421) Accrued expenses and other current liabilities (851,886) Deferred revenue (128,158) Payable to related parties (753,738) Total liabilities (3,182,203) Net liabilities (1,639,468) Goodwill 5,702,312 Total net assets acquired 4,062,844 This acquisition was accounted for using the acquisition method of accounting. The fair value of assets, liabilities and intangible assets and the purchase price allocation as of August 2, 2018 was as follows: Allocation of Purchase Price $ Prepaid and other receivables 15,368 Sales tax recoverable 133,614 Furniture and equipment 897 Capital work in progress 898,422 Total assets 1,048,301 Bank overdraft (63,693) Accounts payable (1,158,164) Payable to related parties (101,797) Total liabilities (1,323,654) Net liabilities (275,353) Goodwill 3,594,195 Total net assets acquired 3,318,842 |
Schedule of Business Acquisitions, by Acquisition | Number of Common Stock 30,407,712 Market price on the date of issuance 0.108 Fair value of Common Stock 3,284,033 $ Number of warrants 7,211,213 Fair value price per warrant 0.108 Fair value of warrant 778,811 Fair value of Common Stock 3,284,033 Fair value of warrant 778,811 Purchase consideration 4,062,844 The purchase consideration of 25,500,000 shares and 25,000,000 warrants of the Company’s common stock valued as detailed below: $ Number of Common Stock 25,500,000 Market price on the date of issuance 0.0665 Fair value of Common Stock 1,695,750 $ Number of warrants 25,000,000 Fair value price per warrant 0.0649 Fair value of warrant 1,623,092 Fair value of Common Stock 1,695,750 Fair value of warrant 1,623,092 Purchase consideration 3,318,842 |
Convertible Promissory Notes (T
Convertible Promissory Notes (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Convertible Promissory Notes | |
Schedule of Derivative Instruments | The Company recorded and fair valued the derivative liability as follows: Derivative Conversions / Derivative liability as at Redemption liability as at December 31, during the Change due to Fair value March 31, 2018 period Issuances adjustment 2019 Note B and C 374,911 (32,758) — (309,065) 33,088 Note D 4,030 — — 2,418 6,448 Note F 10,948 — — (1,063) 9,885 Note G 3,976 — — (386) 3,590 Note I 30,144 — — 3,698 33,842 Note K 15,679 — — (4,644) 11,035 Note M 105,181 (95,113) — (10,068) — Note N 97,936 (86,363) — (11,573) — Note O 122,090 (109,782) — (12,308) — Note P 97,588 (81,918) — (15,670) — Note Q — (104,111) 121,362 (17,251) — 862,483 (510,045) 121,362 (375,912) 97,888 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Deficit | |
Schedule of Stockholders' Equity Note, Warrants or Rights | The fair value of the warrants issued to private placement purchasers was measured at the date of acquisition using the Black-Scholes option pricing model using the following assumptions: During quarter ended June 30, 2019 During quarter ended March 31, 2019 During year ended December 31, 2018 Forfeiture rate 0 % 0 % 0 % Stock price $0.080 to $0.149 per share $0.080 to $0.120 per share $0.060 to $0.210 per share Exercise price $0.023 to $0.200 per share $0.050 per share $0.050 to $0.150 per share Volatility 605% to 679% 690 % % Risk free interest rate 1.69% to 2.54% 2.26% to 2.60% 2.52% to 2.96% Expected life 2 and 3 years 3 years 2 and 3 years Expected dividend rate 0 % 0 % 0 % Fair value of warrants $8,873,292 $23,305,826 $6,417,010 |
Commitments (Tables)
Commitments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum rent payments for the above leases are as follows: $ 2019 179,643 2020 239,752 2021 240,012 2022 240,264 2023 and onwards 351,318 1,250,989 |
Organization, Nature of Busin_2
Organization, Nature of Business, Going Concern and Management Plans (Details) | Jan. 25, 2019$ / sharesshares | Jun. 30, 2019USD ($)ft²$ / sharesshares | May 01, 2019ft² | Dec. 31, 2018USD ($)$ / sharesshares | Jun. 27, 2018$ / sharesshares | Sep. 30, 2017ft² | Jul. 06, 2015$ / sharesshares |
Organization, Nature of Business, Going Concern and Management Plans [Line Items] | |||||||
Common Stock Shares Offered | shares | 1,500,000 | ||||||
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Share Price | $ / shares | $ 0.50 | ||||||
Area of Land | ft² | 44,000 | 44,000 | 44,000 | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 358,074 | 63,094,634 | 25,000,000 | ||||
Shares Issued, Price Per Share | $ / shares | $ 0.10 | ||||||
Working Capital Deficit | $ | $ 2,482,007 | ||||||
Retained Earnings (Accumulated Deficit) | $ | $ (12,415,830) | $ (9,094,954) | |||||
Warrants Purchase | shares | 7,211,213 | ||||||
Over the Counter [Member] | CannaKorp ShareHolders Member [Member] | |||||||
Organization, Nature of Business, Going Concern and Management Plans [Line Items] | |||||||
Effective Date Of Share Exchange Agreement | Jan. 25, 2019 | ||||||
Common Stock, Shares, Issued | shares | 30,407,412 | ||||||
Sale of Stock, Price Per Share | $ / shares | $ 0.10 | ||||||
Visava Inc [Member] | |||||||
Organization, Nature of Business, Going Concern and Management Plans [Line Items] | |||||||
Equity Method Investment, Ownership Percentage | 100.00% | 100.00% | |||||
Canary [Member] | |||||||
Organization, Nature of Business, Going Concern and Management Plans [Line Items] | |||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 46.27% |
Related Party Transactions an_2
Related Party Transactions and Balances (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Feb. 22, 2019 | |
Related Party Transaction [Line Items] | |||||||
Management Fee Expense | $ 632,737 | $ 75,000 | $ 692,558 | $ 150,000 | |||
Stock Issued During Period, Shares, Issued for Services | 1,665,329 | ||||||
Stock Issued During Period, Value, Issued for Services | $ 126,384 | $ 159,490 | |||||
Shareholders advances | 0 | 209,046 | 0 | $ 209,046 | |||
Loss on settlement | 709,278 | ||||||
Accounts Payable, Related Parties, Current | 433,313 | 403,620 | 433,313 | 403,620 | |||
Notes Payable Current Transferred | $ 18,000 | ||||||
Debt Conversion, Converted Instrument, Shares Issued | 6,207,126 | ||||||
Accounts payable to related parties | $ 46,313 | 62,500 | $ 46,313 | $ 62,500 | |||
Private Placement [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Stock Issued During Period, Shares, Issued for Services | 1,666,667 | 0 | |||||
Stock Issued During Period, Value, Issued for Services | $ 37,385 | ||||||
Management Services [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Stock Issued During Period, Shares, Issued for Services | 3,140,506 | 52,000 | |||||
Rubin Schindermann [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Management Fee Expense | $ 75,000 | ||||||
Accounts Payable, Related Parties, Current | 20,000 | $ 20,000 | |||||
Eric Schindermann [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt Conversion, Converted Instrument, Shares Issued | 1,591,556 | ||||||
Alexander Starr [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Management Fee Expense | $ 162,019 | $ 22,321 | |||||
Stock issued to related party | 8,234,850 | ||||||
Fair value | $ 885,329 | ||||||
Shareholders advances | 14,032 | 14,032 | |||||
Accounts Payable, Related Parties, Current | $ 139,697 | $ 139,697 | |||||
Other Deferred Compensation Arrangements, Liability, Current and Noncurrent | $ 180,000 | ||||||
CannaKorp [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Due to Related Parties | $ 387,000 | 387,000 | |||||
Majority Shareholder [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Management Fee Expense | $ 97,321 | $ 150,000 | |||||
Majority Shareholder [Member] | Management Services [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Stock Issued During Period, Shares, Issued for Services | 14,834,850 | 5,529,412 | |||||
Randal MacLeod [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Labor and Related Expense | $ 101,936 | $ 60,000 | |||||
Shares issued as bonus | 3,000,000 | ||||||
Stock Issued During Period, Values, Bonus, Issued for Completing Facility Construction | $ 294,000 |
Shareholder Advances (Details)
Shareholder Advances (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Shareholder Advances [Line Items] | |||
Due to Officers or Stockholders, Current | $ 0 | $ 209,046 | |
Stock Issued During Period, Value, New Issues | 8,973,266 | $ 100,000 | |
Shareholder [Member] | |||
Shareholder Advances [Line Items] | |||
Due to Officers or Stockholders, Current | $ 209,046 | ||
Repayments of Related Party Debt | 75,623 | $ 49,157 | |
Stock Issued During Period, Value, New Issues | $ 133,423 |
Capital work in progress (Detai
Capital work in progress (Details) | Jun. 30, 2019USD ($)ft² | May 01, 2019ft² | Sep. 30, 2017ft² |
Capital work in progress | |||
Area of Land | ft² | 44,000 | 44,000 | 44,000 |
Advances on Inventory Purchases | $ | $ 8,820,385 |
Sales Tax Recoverable (Details)
Sales Tax Recoverable (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Value Added Tax Receivable, Current | $ 57,535 | $ 57,535 | $ 220,525 | ||
Percentage of Allowance on Value Added tax Recoverable | 25.00% | ||||
Allowance for sales tax recoverable | (118,652) | $ 0 | $ (55,824) | $ 0 | |
Allowance On Value Added Tax Recoverable | 19,178 | 19,178 | 75,902 | ||
Gross Sales | |||||
Value Added Tax Receivable, Current | $ 76,713 | $ 76,713 | $ 294,033 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) | Jun. 30, 2019 | Mar. 01, 2019 | Dec. 31, 2018 | Aug. 02, 2018 |
Goodwill and Intangible Assets | ||||
Cash | $ 5,658 | |||
Accounts Receivable | 2,068 | |||
Inventory | 1,052,555 | |||
Prepaid and other receivables | 98,277 | $ 15,368 | ||
Property and equipment, net | 384,177 | |||
Total assets | 1,542,735 | 1,048,301 | ||
Accounts payable | (1,448,421) | (1,158,164) | ||
Accrued expenses and other current liabilities | (851,886) | |||
Deferred revenue | (128,158) | |||
Payable to related parties | (753,738) | (101,797) | ||
Total liabilities | (3,182,203) | (1,323,654) | ||
Net liabilities | (1,639,468) | (275,353) | ||
Sales tax recoverable | 133,614 | |||
Furniture and equipment | 897 | |||
Capital work in progress | 898,422 | |||
Bank overdraft | (63,693) | |||
Goodwill | $ 9,296,507 | 5,702,312 | $ 3,594,195 | 3,594,195 |
Total net assets acquired | $ 4,062,844 | $ 3,318,842 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Purchase Consideration (Details) - USD ($) | Aug. 02, 2018 | May 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Goodwill [Line Items] | |||||
Number of Shares | 25,500,000 | ||||
Fair value | $ 8,873,292 | $ 23,305,826 | $ 6,417,010 | ||
Purchase consideration | $ 3,318,842 | $ 4,062,844 | |||
Common Stock [Member] | |||||
Goodwill [Line Items] | |||||
Number of Shares | 25,500,000 | 30,407,712 | |||
Share Price | $ 0.0665 | $ 0.108 | |||
Fair value | $ 3,284,033 | ||||
Fair value of stock and Warrant | $ 1,695,750 | $ 3,284,033 | |||
Warrant [Member] | |||||
Goodwill [Line Items] | |||||
Number of Shares | 25,000,000 | 7,211,213 | |||
Share Price | $ 0.0649 | $ 0.108 | |||
Fair value | $ 1,623,092 | $ 778,811 | |||
Fair value of stock and Warrant | $ 1,623,092 | $ 778,811 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Additional Information (Detail) - $ / shares | Aug. 02, 2018 | May 31, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 27, 2018 |
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 25,500,000 | |||||
Warrants Purchase | 7,211,213 | |||||
Fair Value Assumptions Term | 3 years | |||||
Class of Warrant or Right, Outstanding | 25,000,000 | |||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | |||||
Shares Issued, Price Per Share | $ 0.10 | |||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 25,500,000 | |||||
Maximum [Member] | ||||||
Fair Value Assumptions Term | 3 years | 3 years | ||||
Minimum [Member] | ||||||
Fair Value Assumptions Term | 2 years | 2 years | ||||
Common Stock Purchase Warrants [Member] | ||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 30,407,412 | |||||
Class of Warrant or Right, Outstanding | 7,211,213 | |||||
Canary [Member] | ||||||
Business Acquisition Equity Interest Issuable Percentage | 46.27% | |||||
Canary [Member] | Common Stock Purchase Warrants [Member] | ||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 30,407,412 | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.10 | $ 0.10 | ||||
Warrants Purchase | 7,211,213 | |||||
Canary [Member] | Common Stock Purchase Warrants [Member] | Maximum [Member] | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.15 | |||||
Canary [Member] | Common Stock Purchase Warrants [Member] | Minimum [Member] | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.13 | |||||
Measurement Input Forfeiture Rate [Member] | ||||||
Fair Value Assumptions Rate | 0.00% | 0.00% | ||||
Measurement Input, Share Price [Member] | ||||||
Shares Issued, Price Per Share | $ 0.067 | $ 0.108 | ||||
Measurement Input, Exercise Price [Member] | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.10 | |||||
Measurement Input, Price Volatility [Member] | ||||||
Fair Value Assumptions Rate | 329.00% | 635.49% | ||||
Measurement Input, Risk Free Interest Rate [Member] | ||||||
Fair Value Assumptions Rate | 2.66% | 2.55% | ||||
Measurement Input, Expected Term [Member] | ||||||
Fair Value Assumptions Term | 2 years | 2 years | ||||
Measurement Input, Expected Dividend Rate [Member] | ||||||
Fair Value Assumptions Price | 0.00% | 0.00% | ||||
CannaKorp Inc [Member] | ||||||
Class of Warrant or Right, Outstanding | 7,211,213 | |||||
Warrant Term | 1 year 8 months 1 day | |||||
Visava Inc [Member] | ||||||
Equity Method Investment, Ownership Percentage | 100.00% | 100.00% | ||||
Class of Warrant or Right, Outstanding | 25,000,000 | |||||
Warrant Term | 1 year 1 month 2 days |
Convertible Promissory Notes (D
Convertible Promissory Notes (Details) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Derivative liability | $ 862,483 |
Conversions / Redemption during the period | (510,045) |
Change due to Issuances | 121,362 |
Fair value adjustment | (375,912) |
Derivative liability | 97,888 |
Note B and C [Member] | |
Derivative liability | 374,911 |
Conversions / Redemption during the period | (32,758) |
Change due to Issuances | 0 |
Fair value adjustment | (309,065) |
Derivative liability | 33,088 |
Note D [Member] | |
Derivative liability | 4,030 |
Conversions / Redemption during the period | 0 |
Change due to Issuances | 0 |
Fair value adjustment | 2,418 |
Derivative liability | 6,448 |
Note F [Member] | |
Derivative liability | 10,948 |
Conversions / Redemption during the period | 0 |
Change due to Issuances | 0 |
Fair value adjustment | (1,063) |
Derivative liability | 9,885 |
Note G [Member] | |
Derivative liability | 3,976 |
Conversions / Redemption during the period | 0 |
Change due to Issuances | 0 |
Fair value adjustment | (386) |
Derivative liability | 3,590 |
Note I [Member] | |
Derivative liability | 30,144 |
Conversions / Redemption during the period | 0 |
Change due to Issuances | 0 |
Fair value adjustment | 3,698 |
Derivative liability | 33,842 |
Note K [Member] | |
Derivative liability | 15,679 |
Conversions / Redemption during the period | 0 |
Change due to Issuances | 0 |
Fair value adjustment | (4,644) |
Derivative liability | 11,035 |
Note M [Member] | |
Derivative liability | 105,181 |
Conversions / Redemption during the period | (95,113) |
Change due to Issuances | 0 |
Fair value adjustment | (10,068) |
Derivative liability | 0 |
Note N [Member] | |
Derivative liability | 97,936 |
Conversions / Redemption during the period | (86,363) |
Change due to Issuances | 0 |
Fair value adjustment | (11,573) |
Derivative liability | 0 |
Note O [Member] | |
Derivative liability | 122,090 |
Conversions / Redemption during the period | (109,782) |
Change due to Issuances | 0 |
Fair value adjustment | (12,308) |
Derivative liability | 0 |
Note P [Member] | |
Derivative liability | 97,588 |
Conversions / Redemption during the period | (81,918) |
Change due to Issuances | 0 |
Fair value adjustment | (15,670) |
Derivative liability | 0 |
Note Q [Member] | |
Derivative liability | 0 |
Conversions / Redemption during the period | (104,111) |
Change due to Issuances | 121,362 |
Fair value adjustment | (17,251) |
Derivative liability | $ 0 |
Convertible Promissory Notes -
Convertible Promissory Notes - Additional Information (Details) | Sep. 05, 2018USD ($) | Aug. 09, 2018USD ($) | Nov. 28, 2017USD ($) | May 05, 2017USD ($) | May 13, 2016USD ($) | Mar. 01, 2016USD ($)$ / shares | Feb. 16, 2019USD ($) | Dec. 24, 2018USD ($) | Nov. 28, 2018USD ($) | Mar. 31, 2018USD ($) | Jan. 16, 2018USD ($) | Nov. 28, 2017USD ($) | Jan. 31, 2017USD ($) | Oct. 18, 2016USD ($) | May 19, 2016USD ($) | Sep. 30, 2018shares | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Jun. 30, 2019USD ($)a$ / sharesshares | Jun. 30, 2018USD ($)shares | Dec. 31, 2018USD ($)$ / shares | Jul. 06, 2015$ / shares |
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 58.00% | |||||||||||||||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||||||||
Debt Instrument, Maturity Date | Feb. 20, 2018 | |||||||||||||||||||||
Interest Expense, Debt | $ 8,038 | $ 28,002 | ||||||||||||||||||||
Principal amount outstanding | $ 44,863 | $ 476,846 | ||||||||||||||||||||
Debt Conversion, Original Debt, Amount | $ 47,826 | |||||||||||||||||||||
Gain On Forgiveness Or Settlement Of Debt | $ 153,471 | |||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 6,207,126 | |||||||||||||||||||||
Measurement Input, Share Price [Member] | ||||||||||||||||||||||
Derivative Liability, Measurement Input | a | 0.0100 | |||||||||||||||||||||
Measurement Input, Expected Dividend Rate [Member] | ||||||||||||||||||||||
Derivative Liability, Measurement Input | a | 0 | |||||||||||||||||||||
Measurement Input, Risk Free Interest Rate [Member] | ||||||||||||||||||||||
Derivative Liability, Measurement Input | a | 1.90 | |||||||||||||||||||||
Maximum [Member] | Measurement Input, Exercise Price [Member] | ||||||||||||||||||||||
Derivative Liability, Measurement Input | a | 0.0515 | |||||||||||||||||||||
Maximum [Member] | Measurement Input, Price Volatility [Member] | ||||||||||||||||||||||
Derivative Liability, Measurement Input | 223.1 | |||||||||||||||||||||
Maximum [Member] | Measurement Input, Expected Term [Member] | ||||||||||||||||||||||
Derivative Liability, Measurement Input | a | 1.13 | |||||||||||||||||||||
Minimum [Member] | Measurement Input, Exercise Price [Member] | ||||||||||||||||||||||
Derivative Liability, Measurement Input | a | 0.0151 | |||||||||||||||||||||
Minimum [Member] | Measurement Input, Price Volatility [Member] | ||||||||||||||||||||||
Derivative Liability, Measurement Input | 147.3 | |||||||||||||||||||||
Minimum [Member] | Measurement Input, Expected Term [Member] | ||||||||||||||||||||||
Derivative Liability, Measurement Input | a | 0.19 | |||||||||||||||||||||
Convertible Promissory Notes [Member] | ||||||||||||||||||||||
Interest Expense, Debt | $ 61,928 | |||||||||||||||||||||
Debt Conversion, Original Debt, Amount | $ 108,233 | |||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 5,301,990 | |||||||||||||||||||||
Note A [Member] | ||||||||||||||||||||||
Convertible Notes Payable | $ 75,000 | |||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | |||||||||||||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 52.00% | |||||||||||||||||||||
Debt Instrument, Maturity Date | Nov. 18, 2018 | |||||||||||||||||||||
Debt Conversion Beneficial Ownership Percentage | 4.99% | |||||||||||||||||||||
Note B and C [Member] | ||||||||||||||||||||||
Convertible Notes Payable | $ 150,000 | |||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 24.00% | |||||||||||||||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | |||||||||||||||||||||
Debt Instrument, Maturity Date | Sep. 1, 2018 | |||||||||||||||||||||
Conversion Price Percentage | 45.00% | |||||||||||||||||||||
Debt Conversion Beneficial Ownership Percentage | 4.99% | |||||||||||||||||||||
Note D | ||||||||||||||||||||||
Convertible Notes Payable | $ 75,000 | |||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | |||||||||||||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 52.00% | |||||||||||||||||||||
Debt Instrument, Maturity Date | Jan. 13, 2019 | |||||||||||||||||||||
Debt Conversion Beneficial Ownership Percentage | 4.99% | |||||||||||||||||||||
Note F [Member] | ||||||||||||||||||||||
Convertible Notes Payable | $ 100,000 | |||||||||||||||||||||
Note F and G | ||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | |||||||||||||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 57.50% | |||||||||||||||||||||
Debt Instrument, Maturity Date | Jul. 18, 2017 | |||||||||||||||||||||
Debt Conversion Beneficial Ownership Percentage | 9.99% | |||||||||||||||||||||
Gain On Forgiveness Or Settlement Of Debt | $ 267,522 | |||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 2,500,000 | |||||||||||||||||||||
Note G [Member] | ||||||||||||||||||||||
Convertible Notes Payable | $ 25,000 | |||||||||||||||||||||
Note H [Member] | ||||||||||||||||||||||
Convertible Notes Payable | $ 140,000 | |||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | |||||||||||||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 80.00% | |||||||||||||||||||||
Debt Instrument, Maturity Date | Jul. 18, 2017 | |||||||||||||||||||||
Debt Conversion Beneficial Ownership Percentage | 9.99% | |||||||||||||||||||||
Note I | ||||||||||||||||||||||
Convertible Notes Payable | $ 33,000 | |||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 58.00% | |||||||||||||||||||||
Debt Instrument, Maturity Date | Nov. 5, 2018 | |||||||||||||||||||||
Debt Conversion Beneficial Ownership Percentage | 4.99% | |||||||||||||||||||||
Note J | ||||||||||||||||||||||
Convertible Notes Payable | $ 23,000 | |||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||||||||||
Debt Conversion Beneficial Ownership Percentage | 4.99% | |||||||||||||||||||||
Note K | ||||||||||||||||||||||
Convertible Notes Payable | $ 33,000 | $ 33,000 | ||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | 12.00% | ||||||||||||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 58.00% | |||||||||||||||||||||
Debt Instrument, Maturity Date | Mar. 10, 2019 | |||||||||||||||||||||
Debt Conversion Beneficial Ownership Percentage | 4.99% | |||||||||||||||||||||
Note L | ||||||||||||||||||||||
Convertible Notes Payable | $ 28,000 | |||||||||||||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 58.00% | |||||||||||||||||||||
Debt Instrument, Maturity Date | Oct. 30, 2018 | |||||||||||||||||||||
Debt Conversion Beneficial Ownership Percentage | 4.99% | |||||||||||||||||||||
Note M | ||||||||||||||||||||||
Convertible Notes Payable | $ 65,000 | |||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||||||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 52.00% | |||||||||||||||||||||
Debt Instrument, Maturity Date | Sep. 9, 2019 | |||||||||||||||||||||
Debt Conversion Beneficial Ownership Percentage | 4.99% | |||||||||||||||||||||
Recognized Loss on Settlement Of Debt | 23,342 | |||||||||||||||||||||
Note N | ||||||||||||||||||||||
Convertible Notes Payable | $ 103,000 | |||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 61.00% | |||||||||||||||||||||
Debt Instrument, Maturity Date | Dec. 5, 2019 | |||||||||||||||||||||
Debt Conversion Beneficial Ownership Percentage | 4.99% | |||||||||||||||||||||
Recognized Loss on Settlement Of Debt | 27,368 | |||||||||||||||||||||
Note O | ||||||||||||||||||||||
Convertible Notes Payable | $ 75,000 | |||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||||||||||||||
Debt Instrument, Maturity Date | Nov. 28, 2019 | |||||||||||||||||||||
Debt Conversion Beneficial Ownership Percentage | 4.99% | |||||||||||||||||||||
Recognized Loss on Settlement Of Debt | 27,526 | |||||||||||||||||||||
Note P | ||||||||||||||||||||||
Convertible Notes Payable | $ 83,000 | |||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 61.00% | |||||||||||||||||||||
Debt Instrument, Maturity Date | Jun. 24, 2020 | |||||||||||||||||||||
Debt Conversion Beneficial Ownership Percentage | 4.99% | |||||||||||||||||||||
Recognized Loss on Settlement Of Debt | 36,085 | |||||||||||||||||||||
Note Q | ||||||||||||||||||||||
Convertible Notes Payable | $ 103,000 | |||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 61.00% | 52.00% | ||||||||||||||||||||
Debt Instrument, Maturity Date | Aug. 16, 2020 | |||||||||||||||||||||
Debt Conversion Beneficial Ownership Percentage | 4.99% | |||||||||||||||||||||
Recognized Loss on Settlement Of Debt | $ 35,173 |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Jul. 06, 2015 | |
Forfeiture rate | 0.00% | 0.00% | 0.00% | |
Stock price | $ 0.50 | |||
Exercise price | $ 0.050 | |||
Volatility | 690.00% | 646.00% | ||
Risk free interest rate, Minimum | 2.26% | 1.69% | 2.52% | |
Risk free interest rate, Maximum | 2.60% | 2.54% | 2.96% | |
Expected life | 3 years | |||
Expected dividend rate | 0.00% | 0.00% | 0.00% | |
Fair value of warrants | $ 23,305,826 | $ 8,873,292 | $ 6,417,010 | |
Maximum [Member] | ||||
Stock price | $ 0.120 | $ 0.149 | $ 0.210 | |
Exercise price | $ 0.200 | $ 0.150 | ||
Volatility | 679.00% | |||
Expected life | 3 years | 3 years | ||
Minimum [Member] | ||||
Stock price | $ 0.080 | $ 0.080 | $ 0.060 | |
Exercise price | $ 0.023 | $ 0.050 | ||
Volatility | 605.00% | |||
Expected life | 2 years | 2 years |
Stockholders' Deficit - Additio
Stockholders' Deficit - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | May 31, 2019 | Mar. 01, 2019 | Jun. 27, 2018 | Jul. 03, 2017 | Jul. 06, 2015 | |
Stockholders' Deficit [Line Items] | |||||||||||||||
Common Stock, Shares Authorized | 850,000,000 | 850,000,000 | 850,000,000 | 850,000,000 | 20,000,000,000 | ||||||||||
Common Stock, Shares, Outstanding | 541,362,258 | 93,624,289 | 541,362,258 | 93,624,289 | |||||||||||
Stock Issued During Period, Shares, New Issues | 10,562,252 | ||||||||||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | ||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||
Stock Issued During Period, Shares, Share-based Compensation, Gross | 588,237 | 7,964,528 | |||||||||||||
Stock Issued During Period, Shares, Issued for Services | 1,665,329 | ||||||||||||||
Stock Issued During Period, Value, Issued for Services | $ 126,384 | $ 159,490 | |||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 6,207,126 | ||||||||||||||
Debt Conversion, Original Debt, Amount | $ 47,826 | ||||||||||||||
Adjustments to Additional Paid in Capital, Stock Split | $ 387,978 | ||||||||||||||
Stockholders' Equity, Reverse Stock Split | own one share of Common Stock for every one thousand (1,000) | ||||||||||||||
Stock holders Equity Post Reverse Stock Split | 35,000 | 35,000 | |||||||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 500,000 | ||||||||||||||
Stock Issued During Period, Value, Conversion of Convertible Securities, Net of Adjustments | $ 48,000 | $ 22,500 | $ 3,600 | ||||||||||||
Preferred Stock, Shares Outstanding | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||
Accounts Payable, Related Parties, Current | $ 433,313 | $ 403,620 | $ 433,313 | $ 403,620 | |||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 358,074 | 63,094,634 | 358,074 | 63,094,634 | 25,000,000 | ||||||||||
Class of Warrant or Right, Outstanding | 25,000,000 | ||||||||||||||
Proceeds from Issuance of Private Placement | $ 9,331,340 | $ 387,291 | |||||||||||||
Common Stock, Share Subscribed but Unissued, Subscriptions Receivable | $ 0 | $ 220,319 | $ 0 | $ 220,319 | |||||||||||
CannaKorp Inc [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Class of Warrant or Right, Outstanding | 7,211,213 | 7,211,213 | |||||||||||||
Maximum [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 1 year 8 months 1 day | ||||||||||||||
Minimum [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 1 year 1 month 2 days | ||||||||||||||
Private Placement [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, New Issues | 30,407,412 | ||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 1,666,667 | 358,520,843 | 0 | ||||||||||||
Stock Issued During Period, Value, Issued for Services | $ 37,385 | $ 4,558,282 | $ 2,735,545 | ||||||||||||
Class of Warrant or Right, Outstanding | 370,778,750 | 370,778,750 | |||||||||||||
Proceeds from Issuance of Private Placement | 215,680 | ||||||||||||||
Private Placement [Member] | Maximum [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 2 years 8 months 12 days | ||||||||||||||
Private Placement [Member] | Minimum [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 11 months 27 days | ||||||||||||||
Visava Inc [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Class of Warrant or Right, Outstanding | 25,000,000 | 25,000,000 | |||||||||||||
Convertible Promissory Notes [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 2,500,000 | ||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 5,301,990 | ||||||||||||||
Debt Conversion, Original Debt, Amount | $ 108,233 | ||||||||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 300,000 | ||||||||||||||
Advisory And Consultancy services [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 5,529,412 | 80,000 | |||||||||||||
Stock Issued During Period, Value, Issued for Services | $ 84,000 | $ 1,665,329 | |||||||||||||
Shares issued as bonus | 3,000,000 | ||||||||||||||
Stock Issued During Period, Values, Bonus, Issued for Completing Facility Construction | $ 294,000 | ||||||||||||||
Accounts Payable, Related Parties, Current | $ 9,000 | ||||||||||||||
Management Services [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 3,140,506 | 52,000 | |||||||||||||
Rubin Schindermann [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Accounts Payable, Related Parties, Current | 20,000 | 20,000 | |||||||||||||
Rubin Schindermann [Member] | Advisory And Consultancy services [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 6,600,000 | ||||||||||||||
Alexander Starr [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Accounts Payable, Related Parties, Current | $ 139,697 | $ 139,697 | |||||||||||||
Alexander Starr [Member] | Advisory And Consultancy services [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 8,234,850 | ||||||||||||||
Website Development Services [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Stock Issued During Period, Value, Issued for Services | $ 247,306 | ||||||||||||||
Gain Loss On Settlement Of Website Development Service Cost | $ 226,306 | ||||||||||||||
Common Stock [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, New Issues | 387,594,918 | 22,757,102 | |||||||||||||
Stock Issued During Period, Shares, Share-based Compensation, Gross | 18,334,850 | 5,529,412 | |||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 24,648,683 | ||||||||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 11,150,489 | 8,297,439 | |||||||||||||
Common Stock [Member] | Private Placement [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 126,109,709 | 226,441,371 | 63,094,634 | ||||||||||||
Stock Issued During Period, Value, Issued for Services | $ 4,194,665 | ||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 81,139,987 | 226,554,129 | 81,139,987 | ||||||||||||
Common Stock [Member] | Visava Inc [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 500,000 | ||||||||||||||
Shares To Be Issued | 851,317 | 15,106,972 | |||||||||||||
Common Stock [Member] | Convertible Promissory Notes [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, New Issues | 30,407,412 | ||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 5,156,932 | ||||||||||||||
Stock Issued During Period, Value, Issued for Services | $ 30,000 | $ 87,942 | $ 21,518 | ||||||||||||
Common Stock [Member] | Website Development Services [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Stock Issued During Period, Value, Issued for Services | $ 21,000 | ||||||||||||||
Capitalization [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Common Stock, Shares Authorized | 850,000,000 | 850,000,000 | |||||||||||||
Common Stock, Shares, Outstanding | 541,362,258 | 93,624,289 | 541,362,258 | 93,624,289 | |||||||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | |||||||||||||
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 | |||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | |||||||||||||
Preferred Stock, Shares Outstanding | 1,000,000 | 1,000,000 | |||||||||||||
Intellectual Property [Member] | |||||||||||||||
Stockholders' Deficit [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 250,000 | ||||||||||||||
Stock Issued During Period, Value, Issued for Services | $ 27,000 |
Earnings (loss) Per Share (Deta
Earnings (loss) Per Share (Details) | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Loss Per Share [Line Items] | |
Debt Conversion, Converted Instrument, Shares Issued | shares | shares | 6,207,126 |
Maximum [Member] | |
Loss Per Share [Line Items] | |
Debt Instrument, Convertible, Conversion Price | $ 0.0464 |
Minimum [Member] | |
Loss Per Share [Line Items] | |
Debt Instrument, Convertible, Conversion Price | $ 0.0151 |
Commitments (Details)
Commitments (Details) - 6 months ended Jun. 30, 2019 | CAD ($)ft² | USD ($) | USD ($)ft² |
Operating Leases, Rent Expense, Minimum Rentals | $ 1,100 | $ 848 | |
Lessee, Operating Lease, Term of Contract | 5 years | 5 years | |
Improvements Paid By The Land Lord | $ 2,331,063 | $ 1,716,694 | |
Amortization Of Deferred Rent | 36,423 | $ 27,831 | |
Canary [Member] | |||
Operating Leases, Rent Expense, Minimum Rentals | 2,500 | 1,910 | |
Operating Leases, Rent Expense, Net | $ 25,000 | $ 19,103 | |
Lessee, Operating Lease, Term of Contract | 10 years | 10 years | |
Lessee, Operating Lease, Option to Extend | The lease agreement has three 10-year renewal options and on each anniversary date, commencing from January 1, 2020 | The lease agreement has three 10-year renewal options and on each anniversary date, commencing from January 1, 2020 | |
CannaKorp [Member] | |||
Operating Leases, Rent Expense, Minimum Rentals | $ | $ 1,200 | ||
Net Rentable Area | ft² | 1,000 | 1,000 | |
Lease agreement, Termination | 60 days | 60 days | |
First Anniversary | |||
Operating Leases, Rent Expense, Net | $ 1,138 | $ 869 | |
Second Anniversary | |||
Operating Leases, Rent Expense, Net | 1,166 | 891 | |
Third Anniversary | |||
Operating Leases, Rent Expense, Net | 1,193 | 912 | |
Fourth Anniversary | |||
Operating Leases, Rent Expense, Net | $ 1,221 | $ 933 |
Commitments - Future minimum re
Commitments - Future minimum rent payments (Details) | Jun. 30, 2019USD ($) |
Commitments | |
2019 | $ 179,643 |
2020 | 239,752 |
2021 | 240,012 |
2022 | 240,264 |
2023 and onwards | 351,318 |
Total | $ 1,250,989 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Aug. 08, 2019 | Jul. 31, 2019 | Aug. 31, 2019 | Jun. 30, 2019 |
Subsequent Event [Line Items] | ||||
Stock Issued During Period, Shares, New Issues | 10,562,252 | |||
Private Placement [Member] | ||||
Subsequent Event [Line Items] | ||||
Stock Issued During Period, Shares, New Issues | 30,407,412 | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Stock Issued During Period, Shares, New Issues | 1,324,503 | |||
Term Of Licence | 10 years 4 months | |||
Stock Issuable As Consideration For Agreement | 10,000,000 | |||
Subsequent Event [Member] | Effective Date One [Member] | ||||
Subsequent Event [Line Items] | ||||
Stock Issued During Period, Shares, New Issues | 3,500,000 | |||
Advance Royalties | $ 300,000 | |||
Subsequent Event [Member] | Effective Date Two [Member] | ||||
Subsequent Event [Line Items] | ||||
Stock Issued During Period, Shares, New Issues | 3,500,000 | |||
Advance Royalties | $ 300,000 | |||
Subsequent Event [Member] | Effective Date Three [Member] | ||||
Subsequent Event [Line Items] | ||||
Stock Issued During Period, Shares, New Issues | 3,000,000 | |||
Advance Royalties | $ 400,000 | |||
Subsequent Event [Member] | Effective Date Four [Member] | ||||
Subsequent Event [Line Items] | ||||
Advance Royalties | $ 500,000 | |||
Subsequent Event [Member] | Private Placement [Member] | ||||
Subsequent Event [Line Items] | ||||
Stock Issued During Period, Shares, New Issues | 8,020,383 | |||
cGreen, Inc [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Percentage of Royalties On Net Sales | 7.00% | |||
Percentage of Royalties On All Subleasing Revenues | 7.00% |