Cover
Cover - USD ($) | 12 Months Ended | ||
Jul. 31, 2021 | Nov. 18, 2021 | Feb. 28, 2021 | |
Cover [Abstract] | |||
Entity Registrant Name | BODY AND MIND INC. | ||
Entity Central Index Key | 0001715611 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --07-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | true | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Jul. 31, 2021 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Entity Ex Transition Period | true | ||
Entity Common Stock Shares Outstanding | 110,621,308 | ||
Entity Public Float | $ 58,628,685 | ||
Document Annual Report | true | ||
Entity Interactive Data Current | Yes | ||
Document Transition Report | false | ||
Entity File Number | 000-55940 | ||
Entity Incorporation State Country Code | NV | ||
Entity Tax Identification Number | 98-1319227 | ||
Entity Address Address Line 1 | 750 – 1095 West Pender Street | ||
Entity Address City Or Town | Vancouver | ||
Entity Address Country | CA | ||
Entity Address Postal Zip Code | V6E 2M6 | ||
City Area Code | 800 | ||
Local Phone Number | 361-6312 | ||
Security 12b Title | Common Shares, $0.0001 par value |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jul. 31, 2021 | Jul. 31, 2020 |
Current | ||
Cash | $ 7,374,194 | $ 1,352,130 |
Amounts receivable | 1,544,957 | 972,705 |
Interest receivable on convertible loan (Note 6) | 150,000 | 78,000 |
Prepaids | 413,246 | 138,016 |
Inventory (Note 5) | 2,936,156 | 1,769,837 |
Convertible loan receivable (Note 6) | 1,648,816 | 1,290,263 |
Other loan receivable (Note 7) | 239,834 | 0 |
Total Current Assets | 14,307,203 | 5,600,951 |
Deposit | 470,546 | 0 |
Investment in NMG Ohio LLC (Note 8) | 0 | 3,161,240 |
Loan receivable from NMG Ohio LLC (Note 8) | 891,279 | 0 |
Investment in and advances to GLDH (Note 9) | 0 | 8,910,854 |
Property and Equipment net (Note 10) | 4,893,790 | 4,599,204 |
Operating lease right-of-use assets (Note 15) | 2,539,023 | 2,133,815 |
Brand and Licenses net (Note 12) | 19,855,068 | 11,757,483 |
Goodwill (Note 12) | 5,168,902 | 2,635,721 |
TOTAL ASSETS | 48,125,811 | 38,799,268 |
Current | ||
Accounts payable | 1,686,376 | 753,846 |
Accrued liabilities | 105,538 | 30,712 |
Income taxes payable | 3,832,078 | 1,609,479 |
Due to related parties (Note 13) | 52,074 | 52,937 |
Loan payable (Note 14) | 16,874 | 0 |
Current portion of operating lease liabilities (Note 15) | 761,415 | 362,688 |
Total Current Liabilities | 6,454,355 | 2,809,662 |
Long-term operating Lease Liabilities (Note 15) | 2,323,525 | 1,806,212 |
Loan payable (Note 14) 123 | 4,798,871 | 0 |
Loan Payable to NMG Ohio LLC (Note 8) | 0 | 466,495 |
Deferred Tax Liability | 198,339 | 412,450 |
TOTAL LIABILITIES | 13,775,090 | 5,494,819 |
STOCKHOLDERS' EQUITY | ||
Capital Stock- Statement 3 (Note 16) Authorized: 900,000,000 Common Shares - Par Value $0.0001 Issued and Outstanding: 109,077,778 (2020 - 107,513,812) Common Shares | 10,907 | 10,751 |
Additional Paid-in Capital | 50,312,013 | 47,665,678 |
Shares to be Issued | 0 | 19,703 |
Other Comprehensive Income | 1,127,713 | 731,768 |
Accumulated Deficit | (17,126,510) | (14,865,608) |
TOTAL STOCKHOLDERS' EQUITY ATTRIBUTABLE TO BAM STOCKHOLDERS | 34,324,123 | 33,562,292 |
NON-CONTROLLING INTEREST | 26,598 | (257,843) |
TOTAL EQUITY | 34,350,721 | 33,304,449 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 48,125,811 | $ 38,799,268 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jul. 31, 2021 | Jul. 31, 2020 |
Consolidated Balance Sheets | ||
Common stock, shares authorized | 900,000,000 | 900,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares, Outstanding | 109,077,778 | 107,513,812 |
Common stock, shares issued | 109,077,778 | 107,513,812 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Consolidated Statements of Operations | ||
Sales | $ 26,900,869 | $ 6,232,521 |
Sales tax | (1,200,845) | (945,232) |
Cost of sales | (13,709,815) | (3,778,898) |
Total Sales | 11,990,209 | 1,508,391 |
Operating Expenses | ||
Accounting and legal | 973,594 | 676,935 |
Bad debt expense | 0 | 54,047 |
Business development | 282,865 | 449,949 |
Consulting fees | 537,760 | 565,472 |
Depreciation | 1,457,550 | 112,025 |
Insurance | 170,520 | 113,523 |
Lease expense | 431,427 | 219,384 |
Licenses, utilities and office administration | 2,462,815 | 1,090,215 |
Management fees (Note 13) | 405,134 | 449,877 |
Regulatory, filing and transfer agent fees | 61,415 | 65,997 |
Rent | 186,822 | 275,102 |
Salaries and wages | 3,400,472 | 1,589,037 |
Stock-based compensation (Note 16) | 975,555 | 1,278,282 |
Travel | 56,953 | 115,354 |
Total Operating Expenses | (11,402,882) | (7,055,199) |
Net Operating Income (Loss) | 587,327 | (5,546,808) |
Other Income (Expenses) | ||
Foreign exchange, net | 235 | 5,388 |
Interest expense | (53,394) | (132,718) |
Interest income | 163,558 | 1,119,503 |
Loss on impairment (Notes 8 and 9) | (592,547) | 1,008 |
Loss on settlement (Note 21) | 0 | (331,743) |
Other income (expenses) | (95,416) | 26,046 |
Gain on bargain purchase (Note 11) | 167,266 | 0 |
Equity-method investement change from earnings (Note 8) | 13,219 | 397,119 |
Net Income (Loss) Before Income Tax | 190,248 | (4,464,221) |
Income tax expense | (2,166,709) | (134,168) |
Net Loss | (1,976,461) | (4,598,389) |
Other Comprehensive Income (Loss) | ||
Foreign currency translation adjustment | 395,945 | (95,546) |
Comprehensive Loss | (1,580,516) | (4,693,935) |
Net income (loss) attributable to: | ||
Body and Mind Inc. | (2,260,902) | (4,340,546) |
Non-controlling interest | 284,441 | (257,843) |
Comprehensive income (loss) attributable to: | ||
Body and Mind Inc. | (1,864,957) | (4,436,092) |
Non-controlling interest | $ 284,441 | $ (257,843) |
Loss per Share - Basic and Diluted | $ (0.02) | $ (0.04) |
Weighted Average Number of Shares Outstanding | 108,463,019 | 102,644,757 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Total | Common Stock | Additional Paid-In Capital | Shares To Be Issued [Member] | Other Comprehensive Income [Member] | Retained Earnings (Accumulated Deficit) | Noncontrolling Interest |
Balance, shares at Jul. 31, 2019 | 97,279,891 | ||||||
Balance, amount at Jul. 31, 2019 | $ 33,196,203 | $ 9,728 | $ 41,765,408 | $ 1,118,815 | $ 827,314 | $ (10,525,062) | $ 0 |
Common stock issued in acquisition of GLDH (Note 9), shares | 7,018,115 | ||||||
Common stock issued in acquisition of GLDH (Note 9), amount | 4,094,957 | $ 702 | 4,094,255 | 0 | 0 | 0 | 0 |
Conversion of debt, shares | 2,909,091 | ||||||
Conversion of debt, amount | 0 | $ 291 | 1,196,793 | (1,197,084) | 0 | 0 | 0 |
Exercise of warrants (Note 16), shares | 165,715 | ||||||
Exercise of warrants (Note 16), amount | 90,839 | $ 16 | 90,823 | 0 | 0 | 0 | 0 |
Escrow release, shares | 141,000 | ||||||
Escrow release, amount | 0 | $ 14 | 33,533 | (33,547) | 0 | 0 | 0 |
Share payment reduction related to investment in GLDH (Note 9) | (793,416) | 0 | (793,416) | 0 | 0 | 0 | 0 |
Stock-based compensation (Note 16) | 1,278,282 | 0 | 1,278,282 | 0 | 0 | 0 | 0 |
Accretion and interest on convertible debt | 131,519 | 0 | 0 | 131,519 | 0 | 0 | 0 |
Foreign currency translation adjustment | (95,546) | 0 | 0 | 0 | (95,546) | 0 | 0 |
Loss for the year | (4,598,389) | $ 0 | 0 | 0 | 0 | (4,340,546) | (257,843) |
Balance, shares at Jul. 31, 2020 | 107,513,812 | ||||||
Balance, amount at Jul. 31, 2020 | 33,304,449 | $ 10,751 | 47,665,678 | 19,703 | 731,768 | (14,865,608) | (257,843) |
Escrow release, shares | 70,500 | ||||||
Escrow release, amount | 0 | $ 7 | 19,696 | (19,703) | 0 | 0 | 0 |
Stock-based compensation (Note 16) | 975,555 | $ 0 | 975,555 | 0 | |||
Foreign currency translation adjustment | 395,945 | 395,945 | |||||
Loss for the year | (1,976,461) | (2,260,902) | 284,441 | ||||
Common stock issued in acquisition of NMG Ohio LLC (Note 8), shares | 793,466 | ||||||
Common stock issued in acquisition of NMG Ohio LLC (Note 8), amount | 297,042 | $ 79 | 296,963 | 0 | 0 | 0 | 0 |
Exercise of options (Note 16), shares | 700,000 | ||||||
Exercise of options (Note 16), amount | 317,045 | $ 70 | 316,975 | 0 | 0 | 0 | 0 |
Warrants issued with debt (Notes 14) | 1,037,146 | $ 0 | 1,037,146 | $ 0 | 0 | 0 | 0 |
Balance, shares at Jul. 31, 2021 | 109,077,778 | ||||||
Balance, amount at Jul. 31, 2021 | $ 34,350,721 | $ 10,907 | $ 50,312,013 | $ 1,127,713 | $ (17,126,510) | $ 26,598 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Cash Resources Provided By (Used In) Operating Activities | ||
Net loss for the year | $ (1,976,461) | $ (4,598,389) |
Items not affecting cash: | ||
Accrued interest and accretion | 15,474 | 131,519 |
Accrued interest income | (72,000) | (1,029,503) |
Advances to GLDH expensed during the year | 0 | 680,018 |
Amortization of licenses | 1,122,415 | 78,025 |
Amortization of ROU assets | 431,427 | 123,240 |
Bargain purchase | (167,266) | 0 |
Deferred tax expense | (214,110) | (1,303,670) |
Depreciation | 765,857 | 378,105 |
Foreign exchange | (236) | 196,621 |
Equity-method investment change from earnings | (13,219) | (397,119) |
Impairment loss | 592,747 | 0 |
Loss on settlement | 0 | 331,743 |
Stock-based compensation | 975,555 | 1,278,282 |
Write off of amounts receivable | 0 | 1,008 |
Write off of inventory | 0 | 208,096 |
Amounts receivable and prepaids | (528,364) | (23,077) |
Interest receivable on convertible loan | 0 | 51,000 |
Inventory | (809,491) | (587,514) |
Trade payables and accrued liabilities | (194,328) | (290,060) |
Income taxes payable | 1,798,668 | 1,370,121 |
Due to related parties | (3,439) | 39,985 |
Lease liabilities | (536,985) | (88,155) |
Loan to NMG Ohio LLC | (891,279) | (112,869) |
Loan from NMG Ohio LLC | 0 | 1,252,429 |
Cash provided by (used in) operating activities | 294,965 | (2,310,164) |
Investing Activities | ||
Investment in NMG Ohio, LLC, net of cash received | (136,325) | 0 |
Investment in GLDH, net of cash received | 65,340 | (2,893,609) |
Other investments | 0 | (334,348) |
Purchase of property and equipment | (402,459) | (871,720) |
Convertible loan receivable | (358,553) | (1,238,038) |
Cash used in investing activities | (831,997) | (5,337,715) |
Financing Activities | ||
Issuance of shares, net of share issue costs | 313,415 | 90,839 |
Proceeds from loans payable, net | 5,852,311 | 0 |
Cash provided by financing activities | 6,165,726 | 90,839 |
Effect of exchange rate changes on cash | 393,370 | (95,546) |
Net Increase (Decrease) in Cash | 6,022,064 | (7,652,586) |
Cash- Beginning of Year | 1,352,130 | 9,004,716 |
Cash- End of Year | $ 7,374,194 | $ 1,352,130 |
Nature and Continuance of Opera
Nature and Continuance of Operations | 12 Months Ended |
Jul. 31, 2021 | |
Nature and Continuance of Operations | |
1. Nature And Continuance of Operations | 1. Nature and Continuance of Operations Body and Mind Inc. (the “Company”) was incorporated on 5 November 1998 in the State of Delaware, USA, under the name Concept Development Group, Inc. In May 2004, the Company acquired 100% of Vocalscape, Inc. and changed its name to Vocalscape, Inc. On October 28, 2005, the Company changed its name to Nevstar Precious Metals Inc. On October 23, 2008, the Company changed its name to Deploy Technologies Inc. (“Deploy Tech”) and, on September 15, 2010, the Company incorporated a wholly-owned subsidiary, Deploy Acquisition Corp. (“Deploy”) under the laws of the State of Nevada, USA. On September 17, 2010, the Company merged with and into Deploy under the laws of the State of Nevada. Deploy, as the surviving corporation of the merger, assumed all the assets, obligations and commitments of Deploy Tech, and we were effectively re-domiciled in the State of Nevada. Upon the completion of the merger, Deploy assumed the name “Deploy Technologies Inc.”, and all of the issued and outstanding common stock of Deploy Tech was automatically converted into and became Deploy’s issued and outstanding common stock. On 14 November 2017, the Company acquired Nevada Medical Group, LLC (“NMG”) and changed its name to Body and Mind Inc. The Company is now a supplier and grower of medical and recreational cannabis in the state of Nevada, and has retail operations in California, Ohio, and Arkansas. Principles of Consolidation These consolidated financial statements include the financial statements of the Company and its subsidiaries as follows: Name Jurisdiction Ownership Date of acquisition or formation DEP Nevada Inc. (“DEP Nevada”) Nevada, USA 100 % 10 August 2017 Nevada Medical Group LLC (“NMG”) Nevada, USA 100 % 14 November 2017 NMG Long Beach LLC California, USA 100 % 18 December 2018 NMG Cathedral City LLC California, USA 100 % 4 January 2019 NMG San Diego LLC California, USA 60 % 30 January 2019 NMG OH 1, LLC Ohio, USA 100 % 30 January 2020 NMG MI 1, Inc. Michigan, USA 100 % 24 June 2021 NMG MI C1 Inc. Michigan, USA 100 % 24 June 2021 NMG MI P1 Inc. Michigan, USA 100 % 24 June 2021 All inter-company transactions and balances are eliminated upon consolidation. These consolidated financial statements include the following investments accounted for using the equity method of accounting: Name Jurisdiction Ownership Date of acquisition or formation NMG Ohio LLC Ohio, USA 30 % 27 April 2017 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Jul. 31, 2021 | |
Nature and Continuance of Operations | |
2. Recent Accounting Pronouncements | 2. Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2022. The Company does not anticipate this amendment to have a significant impact on the consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes. ASU 2019-12 removes certain exceptions for investments, intraperiod allocations and interim calculations, and adds guidance to reduce complexity in accounting for income taxes. ASU 2019-12 is effective for annual and interim periods beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the effect of adopting this ASU on the Company’s consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue from Contracts with Customers The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Jul. 31, 2021 | |
Significant Accounting Policies | |
3. Significant Accounting Policies | 3. Significant Accounting Policies The following is a summary of significant accounting policies used in the preparation of these consolidated financial statements. Reclassification Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of current period financial statements. These reclassifications had no effect on the previously reported net loss. Basis of presentation These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is 31 July. Amounts receivable Amounts receivable represents amounts owed from customers for sale of medical and recreational cannabis and sales tax recoverable. Amounts are presented net of the allowance for doubtful accounts, which represents the Company’s best estimate of the amount of probable credit losses in the existing accounts receivable balance. The Company determines the allowance for doubtful accounts based on historical experience and current economic conditions. The Company reviews the adequacy of its allowance for doubtful accounts on a quarterly basis. As of 31 July 2021 and 2020, the Company has no allowance for doubtful accounts. Revenue recognition The Company recognizes revenue from product sales when our customers obtain control of our products. This determination is based on the customer specific terms of the arrangement for wholesale operations. Upon transfer of control, the Company has no further performance obligations. All retail sales are considered COD. Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC 606. The Company’s revenues accounted for under ASC 606, generally, do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The sales prices are generally fixed and all consideration from contracts is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration. See Note 17 for revenue disaggregation table. Inventory Inventory consists of raw material, work in progress (live plants and plants in the drying process), finished goods, and consumables. The Company values its raw material, finished goods and consumables at the lower of the actual costs or its current estimated market value less costs to sell. The Company values its work in progress at cost. The Company periodically reviews its inventory for obsolete and potentially impaired items. As of 31 July 2021 and 2020, the Company has no allowance for inventory obsolescence. Loans receivable The Company carries its loans receivable at cost and are reviewed for indicators of impairment at least annually. Property and equipment Property and equipment are recorded at cost and are amortized over their estimated useful lives on a straight-line basis as follows: Office equipment 7 years Cultivation equipment 7 years Production equipment 7 years Kitchen equipment 7 years Vehicles 7 years Vault equipment 7 years Leasehold improvements shorter of useful life or the term of the lease Intangible Assets Intangible assets acquired from third parties are measured initially at fair value and either classified as indefinite life or finite life depending on their characteristics. Intangible assets with indefinite lives are tested for impairment at least annually and intangible assets with finite lives are reviewed for indicators of impairment at least annually. The Company’s brands and licenses acquired from NMG have indefinite lives; therefore no amortization is recognized. The Company’s brands and licenses acquired by NMG SD have a finite life of 10 years, brands and licenses acquired by NMG LB and NMG OH 1 have a finite life of 10 years, customer relationships acquired by NMG OH 1 have a finite life of five years and are amortized over these estimated useful lives on a straight-line basis. Goodwill Goodwill represents the excess of the aggregate purchase price paid over the fair value of the net assets acquired in our business combinations. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Events or changes in circumstances that could trigger an impairment review include a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, additional impairment testing is not required. The Company tests for goodwill impairment annually during its fourth quarter. Income taxes Deferred income taxes are reported for timing differences between items of income or expense reported in the consolidated financial statements and those reported for income tax purposes in accordance with ASC 740, “Income Taxes”, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, and for tax losses and credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not. Equity Method Investments The Company utilizes the equity method when accounting for investments in which the Company is able to exercise significant influence, but does not hold controlling interest. Significant influence is generally presumed to exist when the Company owns between 20% to 50% of the investee. Under the equity method of accounting, the investee's financials are not consolidated within the Company's financial statements. Basic and diluted net loss per share The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive. Potentially dilutive options of 9,855,000 and warrants of 17,215,284 existed at 31 July 2021. This figure does not include 3,200,000 warrants issued to the Agent pursuant to the Loan Agreement, which warrants are held in escrow by us and are to be released to the Agent if we draw on the Delayed Draw Term Loan by December 31, 2021, or cancelled if we do not draw on the Delayed Draw Term Loan. Each warrant, if released to the Agent, will entitle the holder to acquire one share of common stock at an exercise price of US$0.45 per share until July 19, 2025. Comprehensive loss ASC 220, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive income/loss and its components in the consolidated financial statements. As of 31 July 2021 and 2020, the Company reported foreign currency translation adjustments as other comprehensive income or loss and included a schedule of comprehensive income/loss in the consolidated financial statements. Foreign currency translation The Company’s functional currency is the Canadian dollar and its reporting currency is in U.S. dollars. The Company’s subsidiaries have a functional currency in U.S. dollars. The consolidated financial statements of the Company are translated to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”. Exchange gains and losses on inter-company balances that form part of the net investment in foreign operations are included in other comprehensive income. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. The exchange rates used to translate Canadian dollar to U.S. dollar was 0.8024 for monetary assets and liabilities and 0.7855 as an average rate for transactions occurred during the year ended 31 July 2021. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of net loss. Stock-based compensation The Company estimates the fair value of each stock option award at the grant date by using the Black-Scholes Option Pricing Model. The fair value determined represents the cost for the award and is recognized over the required service period, generally defined as the vesting period. The Company’s accounting policy is to recognize forfeitures as they occur. Fair value measurements The Company accounts for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: · Level 1 – inputs are based upon unadjusted quoted prices for identical instruments in active markets. · Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit spreads, foreign exchange rates, and forward and spot prices for currencies. · Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Our Level 3 assets and liabilities include investments in other private entities, and goodwill and intangible assets, when they are recorded at fair value due to an impairment charge. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. The Company measures equity investments without readily determinable fair values on a nonrecurring basis. The fair values of these investments are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections. The Company’s convertible note receivable was measured at fair value (Note 6). Other current financial assets and current financial liabilities have fair values that approximate their carrying values. Use of estimates and assumptions The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from these estimates. Lease accounting The Company adopted ASC 842, leases effective 1 August 2019 using a modified retrospective approach. Under ASC 842, leases are separated into two classifications: operating leases and financial leases. Lease classification under ASC 842 is relatively similar to ASC 840. For a lease to be classified as a finance lease, it must meet one of the five finance lease criteria: (1) transference of title/ownership to the lessee, (2) purchase option, (3) lease term for major part of the remaining economic life of the asset, (4) present value represents substantially all of the fair value of the asset, and (5) asset specialization. Any lease that does not meet these criteria is classified as an operating lease. ASC 842 requires all leases to be recognized on the Company’s balance sheet. Specifically, for operating leases, the Company recognize a right-of-use asset and a corresponding lease liability upon lease commitment. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Jul. 31, 2021 | |
Financial Instruments | |
4. Financial Instruments | 4. Financial Instruments The following table represents the Company’s assets that are measured at fair value as of 31 July 2021 and 2020: As of 31 July 2021 As of 31 July 2020 Financial assets at fair value Cash $ 7,374,194 $ 1,352,130 Convertible loan receivable 1,648,816 1,290,263 Total financial assets at fair value $ 9,023,010 $ 2,642,393 Management of financial risks The financial risk arising from the Company’s operations include credit risk, liquidity risk, interest rate risk and currency risk. These risks arise from the normal course of operations and all transactions undertaken are to support the Company’s ability to continue as a going concern. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. Management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner. Credit risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company is not exposed to credit risk related to cash and cash equivalents as it does not hold cash in excess of federally insured limits, with major financial institutions. Credit risk associated with the convertible loans receivable (including the investment in and advances to Green Light District Holdings, Inc.) arises from the possibility that the principal and/or interest due may become uncollectible. The Company mitigates this risk by managing and monitoring the underlying business relationship. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company ensures, as far as reasonably possible, that it will have sufficient capital in order to meet short-term business requirements, after taking into account cash flows from operations and the Company’s holdings of cash. The Company has cash flows from operations of $294,965 for the year ended 31 July 2021, and had working capital of $7,852,848 at 31 July 2021. The Company outlined substantial doubt about its ability to continue as a going concern in a prior quarter which has been alleviated by securing long term debt, cash flow positive operations and increased sales. The Company anticipates that current cashflow positive operations, cash on hand and working capital will ensure coverage for all expenses associated with current operations for at least the next 15 months from the issuance of these financial statements. Management believes that the Company has access to capital resources through potential public or private issuances of debt or equity securities to further contribute to the growth of the company. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to interest rate risk as it does not hold financial instruments that will fluctuate in value due to changes in interest rates. Currency risk Currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. The Company is exposed to currency risk by incurring expenditures and holding assets denominated in currencies other than its functional currency. |
Inventory
Inventory | 12 Months Ended |
Jul. 31, 2021 | |
Inventory | |
5. Inventory | 5. Inventory 31 July 2021 31 July 2020 Work in progress $ 503,215 $ 211,621 Finished goods 1,547,493 959,939 Consumables 885,448 598,277 Total $ 2,936,156 $ 1,769,837 |
Convertible loan receivable
Convertible loan receivable | 12 Months Ended |
Jul. 31, 2021 | |
Convertible loan receivable | |
6. Convertible loan receivable | 6. Convertible loan receivable Effective March 15, 2019, the Company, through its wholly owned subsidiaries, DEP Nevada and NMG, entered into a convertible loan agreement and a management agreement with Comprehensive Care Group LLC (“CCG”), an Arkansas limited liability company, with respect to the development of a medical cannabis dispensary facility in West Memphis, Arkansas. The convertible loan agreement can be extended by either party and the current agreement has a maturity date of March 30, 2022. Under no circumstances the maturity date of the convertible loan agreement shall extend beyond the expiration of the management agreement as described below. Pursuant to the management agreement, NMG will provide operations and management services, including management, staffing, operations, administration, oversight, and other related services. Under the management agreement, NMG will be required to obtain approval from CCG for any key decisions as defined in the agreement and accordingly the Company does not control CCG. NMG will be paid a monthly management fee equal to 66.67% of the monthly net profits of CCG, subject to conversion of the convertible loan as discussed below upon which the monthly management fee shall be $6,000 per month, unless otherwise agreed by the parties in writing. The management agreement has an expiration of March 15, 2024 and can be mutually extendable. The convertible loan agreement is for an amount up to $1,250,000 from DEP to CCG with proceeds to be used to fund construction of a facility, working capital and initial operating expenses. The loan bears interest at a fixed rate of $6,000 per month until the parties mutually agree to increase the interest. Upon the latter of one year of granting of a medical cannabis dispensary license by the appropriate authorities or one year after entering into the convertible loan agreement, DEP may elect to convert the loan into preferred units of CCG equal to 40% of all outstanding units of CCG, subject to approval of the Arkansas Medical Marijuana Commission. The Company evaluated the convertible loan receivable’s settlement provisions and elected the fair value option in accordance with ASC 825 “Financial Instruments”, to value this instrument. Under such election, the loan receivable is measured initially and subsequently at fair value, with any changes in the fair value of the instrument being recorded in the consolidated financial statements as a change in fair value of the financial instruments. The Company estimates the fair value of this instrument by first estimating the fair value of the straight debt portion, excluding the embedded conversion option, using a discounted cash flow model. The Company then estimates the fair value of the embedded conversion option using the Black-Scholes Option Pricing Model. The sum of these two valuations is the fair value of the loan receivable balance of $1,648,816. Management believes that the accretion of the straight debt portion and embedded derivative related to the conversion option are not material due to the short term maturity of the loan. At 31 July 2021, the Company had advanced $1,648,816 (2020 - $1,290,263) and accrued interest income of $72,000 (2020 - $90,000) for the year ended 31 July 2021. As of 31 July 2021, total interest receivable was $150,000 (2020 - $78,000). |
Loan receivable
Loan receivable | 12 Months Ended |
Jul. 31, 2021 | |
Convertible loan receivable | |
7. Loan receivable | 7. Loan receivable The loan receivable at 31 July 2021 in the amount of $239,834 acquired from NMG LB (Note 11) is due from an arm’s length party that is unsecured, non-interest bearing and due on demand. |
Investment in NMG Ohio LLC
Investment in NMG Ohio LLC | 12 Months Ended |
Jul. 31, 2021 | |
Investment in NMG Ohio LLC | |
8. Investment in NMG Ohio LLC | 8. Investment in NMG Ohio LLC On 7 June 2018, the Company acquired a 30% interest in NMG Ohio, which had a cannabis dispensary and a provisional production license. On 31 January 2019, the Company entered into a definitive agreement (“Definitive Agreement”) to acquire 100% ownership of NMG Ohio, or the remaining 70% interest for total cash payments of $1,575,000 and issuance of 3,173,864 common shares of the Company. As of 31 July 2019, the Company had issued 2,380,398 of the 3,173,864 common shares with a fair value of $1,448,805. During the year ended 31 July 2019, the Company made cash payments of $1,181,250. The remaining cash payments totaling $393,750 were paid in October 2020 and the remaining issuance of 793,466 common shares were issued in October 2020. The dispensary license and the assets and liabilities associated with The Clubhouse Dispensary were transferred into the Company’s wholly-owned subsidiary, NMG OH 1 LLC on September 4, 2020. The provisional production license remains in NMG Ohio and the Company anticipate closing the acquisition of the remaining 70% interest in NMG Ohio upon receipt of production license. Following the completion of license transfer of the Ohio dispensary on 4 September 2020 to the Company’s wholly-owned subsidiary, NMG OH 1, the Company began consolidating the assets, liabilities, revenues and expenses related to the dispensary. The Company still accounts for its 30% ownership interest in NMG Ohio as an investment using the equity method of accounting. During the period from 1 August 2020 to 4 September 2020, NMG Ohio recorded net revenues of $534,971, expenses of $490,906 and a net income of $44,065. The Company recorded an equity in earnings of $13,219 relating to its 30% pro rata share of net income which was included in other items on the statement of operations. During the period from 5 September 2020 to 31 July 2021, NMG Ohio did not have any operating activities. 31 July 2021 31 July 2020 30% equity investment: Opening balance $ 531,185 $ 134,066 Equity-method investment change from earnings 13,219 397,119 Total equity investment in NMG Ohio 544,404 531,185 Acquisition of remaining 70% interest: Opening balance 2,630,055 2,630,055 Acquisition costs: Common shares issued to vendors at fair value 297,042 - Acquisition costs: Cash payments to vendors 393,750 - Foreign exchange 7,919 Total advances for remaining 70% acquisition of NMG Ohio 3,328,766 2,630,055 Impairment loss (58,382 ) Acquisition of The Clubhouse Dispensary (Note 11) (3,814,788 ) - Total investment in NMG Ohio $ - $ 3,161,240 Loan receivable (payable) to NMG Ohio Opening balance $ (466,495 ) $ 701,781 Advances provided to NMG Ohio 1,120,015 112,869 Advances received from NMG Ohio - (1,252,429 ) Foreign exchange 4,671 (28,716 ) Transferred to NMG OH 1 and eliminated on consolidation 233,088 - Loan receivable (payable) to NMG Ohio $ 891,279 $ (466,495 ) During the year ended 31 July 2021, the Company provided $891,279 to NMG Ohio related to build-out of production facility and license fees. |
Investment in and advances to G
Investment in and advances to GLDH | 12 Months Ended |
Jul. 31, 2021 | |
Investment in NMG Ohio LLC | |
9. Investment in and advances to GLDH | 9. Investment in and advances to GLDH Interim Agreement – 28 November 2018 On 28 November 2018, the Company entered into a binding interim agreement (the “Interim Agreement”) with GLDH, a private company incorporated under the laws of Delaware, and David Barakett (“Barakett”) whereby the Company agreed to acquire 100% of the issued and outstanding common shares of GLDH in connection with the issuance of convertible notes (the “Transaction”). GLDH held a number of assets relating to the production and sale of cannabis products in the United States of America. The Transaction was contingent upon the Company completing its due diligence. The terms of the Interim Agreement include the following: The Company was to issue to Barakett common shares of the Company (the “Earn Out Shares”) based on the CSE listed 5-day VWAP of the common shares of the Company and at the USD/CAD exchange rate at the close of market on 27 November 2018. The common shares of the Company had a 5-day VWAP of CAD$0.7439 at a USD/CAD exchange rate of 1.3296 and as a result the Company agreed to issue up to a maximum of 11,255,899 common shares with a maximum consideration of US$6,297,580 or CAD$8,373,263. Barakett was eligible to receive Earn Out Shares for a period of 12 months on the following basis: 1. upon GLDH obtaining all of (i) the Long Beach Recreational License; (ii) the San Diego Medical License; (iii) the San Diego Recreational License; and (iv) the San Diego State License (“Milestone I”), the issuance of Earn Out Shares to Barakett totaling 5,627,950 shares (50% of the total Earn Out Shares); 2. upon GLDH achieving total attributable revenues of at least US$3,300,000 over a period of three consecutive months from each of the Long Beach dispensary, the San Diego dispensary and Las Vegas ShowGrow (“Milestone II”), the issuance of Earn Out Shares to Barakett totaling 4,502,360 (40% of the total Earn Out Shares); and 3. prior to the completion of Milestone I and Milestone II, and upon completion of a certain audit of GLDH showing no taxes outstanding or any unknown material liabilities for GLDH, the issuance of Earn Out Shares to Barakett totaling 1,125,589 shares (10% of the total Earn Out Shares). Additionally, the Company made an investment into GLDH by way of a US$5,200,000 senior secured convertible note (the “Note”) bearing interest at a rate of 20% per annum to be repaid to the Company on 28 November 2020 unless converted by the Company in accordance with the agreement. The Note was secured by a general security agreement and a UCC-1 financing statement in all U.S. states where GLDH has assets. Barakett provided a personal guarantee to the Company for the Note. In order for the Company to fund the Note: 1. the Company entered into a loan agreement with Australis Capital Inc. (“Australis”). see also Note 20 whereby Australis provided the Company a two-year US$4,000,000 loan; and 2. Australis exercised 3,206,160 warrants at a price of CAD$0.50 per common share for aggregate proceeds of approximately US$1,200,000 converted using an exchange rate of 0.7518. Definitive Agreement (Superseding Interim Agreement) On 3 July 2019, the Company entered into the following agreements with GLDH and other third parties: 1. a definitive asset purchase agreement (the “Purchase Agreement”) between the Company’s wholly owned subsidiary, NMG Long Beach, LLC (“NMG LB”), GLDH and Airport Collective, Inc. to acquire 100% ownership interest in GLDH’s Long Beach, California dispensary; 2. a settlement agreement (“NMG SD Settlement Agreement”) between the Company and its subsidiaries, and GLDH and its subsidiaries, to acquire a 60% ownership interest in GLDH’s San Diego, California dispensary; and 3. a lease assignment (the “Lease Assignment Agreement”) on the San Diego operation between the Company’s 60%-owned subsidiary, NMG San Diego, LLC (“NMG SD”), Green Road, LLC, Show Grow San Diego, LLC (“SGSD”), and SJJR LLC. The Purchase Agreement, NMG SD Settlement Agreement and Lease Assignment agreement supersede the Interim Agreement and are subject to certain closing conditions including receipt of applicable licences. 1. The Purchase Agreement was executed under the following terms: The purchase price is USD$6,700,000 (the “Purchase Price”). The consideration under the Purchase Agreement includes the following on closing: i. The USD$5,200,000 Note and accrued interest is to be applied towards the Purchase Price; and ii. USD$1,500,000 to be paid in common shares of the Company at a price of CAD$0.7439 per common share to a maximum of 2,681,006 common shares (the “Share Payment”) (issued) (Note 16) upon NMG LB receiving the transfer of all licenses, permits and BCC authorizations for NMG LB to conduct medical and adult-use commercial cannabis retail operations. The Share Payment is subject to reduction equal to the net liability of GLDH and Airport Collective. 2. The NMG SD Settlement Agreement’s consideration includes the following on closing: i. USD$500,000 to be paid in common shares (624,380 common shares issued) (Note 16) to SGSD at a share price equal to the maximum allowable discount pursuant to Canadian Securities Exchange policies, upon execution of the settlement agreement; ii. USD$750,000 to be paid in common shares (issued) (Note 16) to Barakett at a price of CAD$0.7439 per 4common share to a maximum of 1,340,502 Common Shares (the “DB Share Payment”) upon NMG SD receiving all licenses, permits and authorizations for NMG SD to conduct medical commercial cannabis retail operations; and iii. USD$750,000 to be paid in common shares (issued) (Note 16) to Barakett at a price of CAD$0.7439 per common share to a maximum of 1,340,502 common shares (the “DB Additional Shares Payment”) upon NMG SD receiving all licenses, permits and authorizations for NMG SD to conduct adult-use commercial cannabis retail operations. 3. The Lease Assignment Agreement was executed under the following terms: The Company is required to issue cash and share payments to the landlord as follows: i. USD$700,000, payable in common shares (1,031,725 common shares issued) (Note 16) at a share price equal to the maximum allowable discount pursuant to Canadian Securities Exchange policies, upon execution of the assignment agreement; ii. USD$783,765, payable in cash (paid), within 5 business days following execution of the assignment agreement (paid); and iii. USD$750,000, payable in cash (paid), including interest at 5% per annum, upon receipt of the San Diego Conditional Use Permit allowing adult-use commercial cannabis retail operations. Additionally: 1. The Company is to provide a loan to GLDH in the amount of USD$200,000 at an interest rate of 12% per annum, accrued and compounded quarterly and due within 3 years (provided); 2. The Company is to enter into a consulting agreement with Barakett through NMG LB to provide certain consulting and advisory services to NMG LB, agreeing to pay Barakett a total of USD$200,000 ($50,000 paid in fiscal 2019 and additional $150,000 paid during the year ended 31 July 2020); 3. The Company will forgive approximately USD$800,000 for prior operating loans advanced by the Company to GLDH; and; 4. The Company licenses certain intellectual property from Green Light District Management, LLC and GLDH (collectively referred to as “Licensor”). The Licensor grants the Company a perpetual license to utilize its operational intellectual property consisting of customer data, sales data, customer outreach strategies standard operating procedures, and other proprietary operational intellectual property. Licensor grants the Company a license for 2 years to utilize intellectual property such as trademarks and branding (the “Branding IP”). As consideration for the licenses, the Company has agreed to utilize the Branding IP until 19 June 2021 at the Company’s premises and at the San Diego retail locations for a period of 2 years from operations commencing at that location. Additionally, the Company agreed to pay the Licensor 3% of gross receipts from sales at the Long Beach dispensary. The total investment in GLDH at 31 July 2021 and 2020 is as follows: 31 July 2021 31 July 2020 Opening balance $ 8,910,854 $ 7,373,036 Share issuances - 4,092,175 Share payment reduction - (793,416 ) Interest income accrued on the Note 88,143 1,040,000 Advances for working capital 3,030 2,143,609 Lease Assignment Agreement payment - 750,000 Amount transferred to Property and Equipment - (1,431,585 ) Amount transferred to Brand and Licenses - (3,585,483 ) Expensed during the year (188,879 ) (501,862 ) Foreign exchange 99,585 (175,620 ) 8,912,733 8,910,854 Impairment loss (534,165 ) - Acquisition of ShowGrow Long Beach dispensary (Note 11) (8,378,568 ) - Ending balance $ - 8,910,854 In April 2020, the Company fulfilled all obligations under the NMG SD Settlement Agreement and the Lease Assignment Agreement and completed the acquisition of a 60% owned dispensary located in San Diego (the “SD Transaction”). The SD Transaction was accounted for as an asset acquisition. The Company acquired the rights to an existing lease that was zoned for use as a cannabis dispensary. The Company owns the dispensary through a 60% owned subsidiary, NMG SD. The Company consolidated 100% of the assets, liabilities and the operations of NMG SD with 40% disclosed as a non-controlling interest. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jul. 31, 2021 | |
Property and Equipment | |
10. Property and Equipment | 10. Property and Equipment Office Equipment Cultivation Equipment Production Equipment Kitchen Equipment Vehicles Vault Equipment Leasehold Improvements Total Cost: Balance, 31 July 2020 $ 73,310 $ 478,187 $ 545,723 $ 51,108 $ 38,717 $ 2,172 $ 4,245,389 $ 5,434,606 Additions (disposals) 328,261 (12,077 ) 24,979 - - 8,163 810,410 1,159,736 Balance, 31 July 2021 401,571 466,110 570,702 51,108 38,717 10,335 5,055,799 6,594,342 Accumulated Depreciation: Balance, 31 July 2020 15,844 182,232 130,421 14,421 18,797 897 472,790 835,402 Depreciation 33,921 68,312 79,745 7,301 5,531 893 669,447 865,150 Balance, 31 July 2021 49,765 250,544 210,166 21,722 24,328 1,790 1,142,237 1,700,552 Net Book Value: At 31 July 2020 57,466 295,955 415,302 36,687 19,920 1,275 3,772,599 4,599,204 At 31 July 2021 $ 351,806 $ 215,566 $ 360,536 $ 29,386 $ 14,389 $ 8,545 $ 3,913,562 $ 4,893,790 For the year ended 31 July 2021, a total depreciation of $765,857 (2020 - $112,025) was included in General and Administrative Expenses and a total depreciation of $453,884 (2020 - $266,080) was included in Cost of Sales. |
Business Acquisition
Business Acquisition | 12 Months Ended |
Jul. 31, 2021 | |
Business Acquisition | |
11. Business Acquisition | 11. Business Acquisition The Clubhouse dispensary The acquisition of The Clubhouse dispensary allows the Company to expand into the State of Ohio. On 4 September 2020, NMG OH 1 received all approvals and final license and name transfer from the Ohio Department of Pharmacy for Clubhouse dispensary located in Elyria, Ohio. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. The following table summarizes the fair value of the assets acquired and the liabilities assumed, which were recorded as of the acquisition date, as well as the aggregate consideration for the acquisition of NMG OH 1 made by the Company: Purchase consideration $ 3,814,788 Assets acquired: Cash 257,462 Amounts receivable 510,367 Prepaid expenses 4,965 Inventory 178,898 Property and equipment 763,951 Licenses and customer relationships 2,710,000 Liabilities assumed: Trade payable and accrued liabilities (443,589 ) Net assets acquired 3,982,054 Bargain purchase (167,266 ) TOTAL $ 3,814,788 ShowGrow Long Beach dispensary The acquisition of ShowGrow Long Beach dispensary allows the Company to expand its presence in the California market. On 28 August 2020, NMG LB received all approvals and final license transfer for the ShowGrow Long Beach dispensary. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. The following table summarizes the fair value of the assets acquired and the liabilities assumed, which were recorded as of the acquisition date, as well as the aggregate consideration for the acquisition of NMG LB made by the Company: Purchase consideration $ 8,378,568 Assets acquired: Cash 65,340 Prepaid expenses 15,264 Inventory 177,930 Property and equipment 5,402 Loan receivable (Note 7) 239,834 Liabilities assumed: Trade payable and accrued liabilities (732,262 ) Income taxes payable (423,931 ) Loans payable (Note 14) (12,190 ) Net liabilities acquired (664,613 ) Brand and licenses 6,510,000 Goodwill 2,533,181 TOTAL $ 8,378,568 Pro Forma The following table summarizes the results of operations of both The Clubhouse Dispensary and NMG LB since the acquisition dates included in the Company’s consolidated results of operations for the year ended 31 July 2021: The Clubhouse Dispensary NMG LB Revenue $ 6,643,561 $ 5,940,087 Net income $ 1,565,316 $ 283,569 The following table summarizes our consolidated results of operations for the years ended 31 July 2021 and 2020 as though the acquisitions of The Clubhouse Dispensary and NMG LB had occurred on 1 August 2019. Year ended 31 July 2021 As Reported Pro Forma (unaudited) Revenue 26,900,869 27,972,106 Net loss (1,976,461 ) (1,913,199 ) Year ended 31 July 2020 As Reported Pro Forma (unaudited) Revenue 6,232,521 16,859,485 Net income (4,598,389 ) (4,238,491 ) The unaudited pro forma information set forth above is for informational purposes only and include all adjustments necessary for the fair presentation, in all material respects, of the Company’s combined operations including The Clubhouse Dispensary and NMG LB as if the business combinations occurred on 1 August 2019. No adjustments have been made to reflect potential cost savings that may occur subsequent to completion of the transactions. The unaudited pro forma financial information is not intended to reflect the results of operations of the Company which would have actually resulted had the proposed transaction been effected on the date indicated above. Further, the unaudited pro forma financial information is not necessarily indicative of the results of operations that may be obtained in the future. The actual pro forma adjustments will depend on a number of factors, and could result in a change to the unaudited pro forma financial information. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets Net | 12 Months Ended |
Jul. 31, 2021 | |
Goodwill and Intangible Assets Net | |
12. Goodwill and Intangible Assets Net | 12. Goodwill and Intangible Assets, Net The following table displays the changes in the gross carrying amount of goodwill: Balance at July 31, 2020 $ 2,635,721 Increase due to acquisitions 2,533,181 Balance at July 31, 2021 $ 5,168,902 There were no impairments recorded against goodwill during the year ended July 31, 2021 and 2020, respectively. Intangible assets consisted of the following: As of 31 July 2021 Gross carrying amount Weighted average life (years) Accumulated amortization Net carrying amount Intangible assets: Brand $ 247,000 - $ - $ 247,000 Licenses 20,718,508 10.0 (1,184,175 ) 19,534,333 Customer relationships 90,000 5.0 (16,265 ) 73,735 Total intangible assets $ 21,055,508 $ (1,200,440 ) $ 19,855,068 As of 31 July 2020 Gross carrying amount Weighted average life (years) Accumulated amortization Net carrying amount Intangible assets: Brand $ 247,000 - $ - $ 247,000 Licenses 11,588,508 10.0 (78,025 ) 11,510,483 Total intangible assets $ 11,835,508 $ (78,025 ) $ 11,757,483 Amortization expense for intangible assets was $1,122,145 and $78,025 for the years ended 31 July 2021 and 2020, respectively. Included in the licenses is $7,925,000 of indefinite lived assets. The expected amortization of the intangible assets, as of 31 July 2021, for each of the next five years and thereafter is as follows: 2022 $ 1,199,162 2023 1,199,162 2024 1,199,162 2025 1,199,162 2026 1,199,162 Thereafter 5,687,258 $ 11,683,068 |
Related Party Balances and Tran
Related Party Balances and Transactions | 12 Months Ended |
Jul. 31, 2021 | |
Related Party Balances and Transactions | |
13. Related Party Balances and Transactions | 13. Related Party Balances and Transactions In addition to those disclosed elsewhere in these consolidated financial statements, related party transactions paid/accrued for the years ended 31 July 2021 and 2020 are as follows: For the year ended 31 July 2021 For the year ended 31 July 2020 A company controlled by the President, Chief Executive Officer and a director Management fees $ 159,657 $ 154,439 A company controlled by the Chief Financial Officer and a director Management fees 109,487 91,594 A company controlled by a former director and former President of NMG Management fees 65,000 141,665 A company controlled by the Corporate Secretary Management fees 70,990 63,853 Consulting fees - 3,044 A company controlled by the former Chief Executive Officer and a former director Management fees - 9,224 $ 405,134 $ 463,819 Amounts owing to related parties at 31 July 2021 and 2020 are as follows: a) As of 31 July 2021, the Company owed $26,841 (2020 - $14,229) to the Chief Executive Officer of the Company and a company controlled by him. b) As of 31 July 2021, the Company owed $18,914 (2020 - $7,833) to the Chief Financial Officer of the Company and a company controlled by him. c) As of 31 July 2021, the Company owed $6,319 (2020 - $5,875) to the Corporate Secretary of the Company and a company controlled by him. d) As of 31 July 2021, the Company owed $Nil (2020 - $25,000) to the former director and former President of NMG of the Company and a company controlled by him. The above amounts owing to related parties are unsecured, non-interest bearing and are due on demand. |
Loan Payable
Loan Payable | 12 Months Ended |
Jul. 31, 2021 | |
Loan Payable | |
14. Loan Payable | 14. Loans payable The loan payable at 31 July 2021 in the amount of $16,874 assumed from NMG LB (Note 11) is unsecured, non-interest bearing and has no set terms of repayment. On 19 July 2021, the Company entered into and closed a loan agreement (the “Loan Agreement”) with FG Agency Lending LLC (the “Agent”) and Bomind Holdings LLC (the “Lender”). Upon entering into the Loan Agreement, the Lender provided the initial term loan (the “Initial Term Loan”) in the face amount of $6,666,667 of which $6,000,000 was advanced to the Company with the 10% representing an origination discount as consideration for the use or forbearance of money. The Company may draw upon the remaining face amount of $4,444,444 (the “Delayed Draw Term Loan”) upon providing a 30-day request to the Agent by 1 December 2021, whereby $4,000,000 will be advanced to the Company after applying the 10% origination discount. The Initial Term Loan and the Delayed Draw Term Loan mature on 19 July 2025 and bear interest at a rate of 13% per annum payable on the first day of each month hereafter. Pursuant to the Loan Agreement, the Company issued an aggregate of 8,000,000 common stock purchase warrants (each, a “Warrant”) to the Agent of which (i) 4,800,000 Warrants will entitle the holder to acquire shares of common stock (each, a “Warrant Share”) at an exercise price of $0.40 per Warrant Share until July 19, 2025, and (ii) 3,200,000 Warrants will be held in escrow by us and released to the Agent at the time the Company draws on the Delayed Draw Term Loan, or cancelled if we do not draw on the Delayed Draw Term Loan, which will entitle the holder to acquire a Warrant Share at an exercise price of $0.45 per Warrant Share until July 19, 2025. The 4,800,000 Warrants were valued at $1,037,146 using the Black Scholes Option Pricing Model using the following assumptions: Expected life of the options 4.00 years Expected volatility 139 % Expected dividend yield 0 % Risk-free interest rate 0.55 % The Company also paid agent fee, legal fees and other fees in the amount of $175,758. The Initial Term Loan is secured by certain of the Company’s assets, equity interest in subsidiaries and various agreements, under the Security Agreement, the Pledge Agreement and the Omnibus Collateral Assignment. |
Operating leases
Operating leases | 12 Months Ended |
Jul. 31, 2021 | |
Operating leases | |
15. Operating leases | 15. Operating leases a) On 10 November 2017, NMG entered into a revised five-year lease agreement for the property located at 3375 Pepper Lane, Las Vegas, NV, containing approximately 18,000 square feet. The Company has four options to extend the lease and each option is for five years. The monthly rent was $12,500 plus common area expenses, which increased to $12,875 plus common area expenses on 1 January 2019 and again increased to $13,261 plus common are expenses on 1 December 2019. The guaranteed minimum monthly rent is subject to a 2% increase on each anniversary date of the lease. b) On 9 April 2019, NMG entered into a three-year lease agreement for the property located at 6420 Sunset Corporate Drive, Las Vegas, NV, containing approximately 7,700 square feet. The Company has one option to extend the lease for an additional three-year term and an option to purchase the property at any point during the initial term. The monthly rent is $6,026 plus $1,129 in common area expenses, totaling $7,156 every month. c) On 24 April 2020, the Company assumed a five-year lease dated 1 December 2018, as amended on 13 June 2019, for the property located at 7625 Carroll Road, San Diego, CA. The Company has three options to extend the lease and each option is for five years. The monthly rent is $15,450 per month increasing by 3% every year until 1 December 2022.The lease contains a sale bonus provision of $1,000,000 or 10% of the purchase price of the entire business, whichever is greater, in the event of sale or assignment of the lease. d) On August 2, 2018, NMG Ohio, LLC entered into a three-year lease agreement for the property located at 709 Sugar Lane, Elyria, Ohio 44035, containing approximately 4,100 square feet. The Company has three options to extend the lease and each option is for three years. The rent is $4,000 per month increasing by 5% starting on 1 July 2021 and 1 July 2024. e) On 28 August 2020, the Company assumed a five-year lease dated 10 January 2017, as amended on 7 September 2018, for the property located at 3411 E. Anaheim St., Long Beach, California. The Company has one option to extend the lease for five years. The rent is $7,317 per month increasing by 3% every year until 10 January 2022. f) The Company also has various lease agreements in Michigan (Note 19). The Company has not yet taken possession of the premises. On adoption of ASC 842, Lease Accounting, the Company recognized right-of-use assets (Notes 10 and 18), and a corresponding increase in lease liabilities, in the amount of $1,181,143 which represented the present value of future lease payments using a discount rate of 12% per annum related to the two leases in Nevada, USA. The Company adopted the modified retrospective approach on adopting ASC 842 and accordingly the adoption was made effective 1 August 2019, with no restatement of the prior year comparatives. On the assumption of the lease in San Diego, California, the Company recognized right-of-use assets (Notes 10 and 18), and a corresponding increase in lease liabilities, in the amount of $662,800 which represented the present value of future lease payments using a discount rate of 12% per annum. During the year ended 31 July 2021, the Company recorded a total lease expense of $577,272 related to the accretion of lease liabilities and the depreciation of right-of-use assets of which $431,427 was included in General and Administrative Expenses and $145,845 was included in Cost of Sales. Supplemental cash flow information related to leases was as follows: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 536,985 Right-of-use assets obtaining in exchange for lease obligations: Operating leases $ 380,832 Weighted-average remaining lease term – operating leases 6.27 years Weighted-average discount rate – operating leases 12 % The discount rate of 12% was determined by the Company as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Maturities of lease liabilities were as follows: Year Ending 31 July Operating Leases 2022 (1) $ 1,051,964 2023 596,273 2024 607,262 2025 617,942 2026 and thereafter 1,366,633 Total lease payments $ 4,240,074 Less imputed interest (1,155,134 ) Total $ 3,084,940 Less current portion (761,415 ) Long term portion 2,323,525 |
Capital Stock
Capital Stock | 12 Months Ended |
Jul. 31, 2021 | |
Capital Stock | |
16. Capital Stock | 16. Capital Stock The Company’s authorized share capital comprises 900,000,000 Common Shares, with a $0.0001 par value per share. On 12 August 2019, the Company issued a total of 4,337,111 common shares of the Company in connection with the Purchase Agreement, NMG SD Settlement Agreement and the Lease Assignment Agreement valued at $2,752,782 (Notes 9 and 18). On 12 August 2019, the Company issued 81,591 common shares upon exercise of 81,591 warrants at a price of CAD$0.66 per common share for aggregate proceeds of $40,688 (CAD$53,850). On 12 September 2019, the Company issued 38,912 common shares upon exercise of 38,912 warrants at a price of CAD$0.66 per common share for aggregate proceeds of $19,405 (CAD$25,682). On 4 October 2019, the Company issued 22,727 common shares upon exercise of 22,727 warrants at a price of CAD$0.90 per common share for aggregate proceeds of $15,455 (CAD$20,454). On 4 November 2019, the Company issued 22,485 common shares upon exercise of 22,485 warrants at a price of CAD$0.90 per common share for aggregate proceeds of $15,291 (CAD$20,236). On 14 November 2019, the Company issued 70,500 previous escrowed shares with a fair value of $17,786 to Toro Pacific Management Inc. in connection with the acquisition of NMG (Note 18). On 24 April 2020, the Company issued 2,681,004 common shares valued at $1,342,175 (CAD$1,796,272) in relation to NMG SD Settlement Agreement (Notes 9 and 18). On 14 May 2020, the Company issued 70,500 previous escrowed shares with a fair value of $15,760 to Toro Pacific Management Inc. in connection with the acquisition of NMG. On 1 July 2020, the Company issued 2,909,091 shares of common stock valued at $1,197,084 to Australis pursuant to the conversion of the convertible debenture (Note 10). On 21 October 2020, the Company issued 793,466 common shares valued at $297,042 in relation to acquiring the remaining 70% interest in NMG Ohio (Notes 8 and 11). On 14 November 2020, the Company issued 70,500 previously escrowed shares with a fair value of $19,703 to Toro Pacific Management Inc. in connection with the acquisition of NMG. During the year ended July 31, 2021, the Company issued 700,000 common shares upon exercise of 700,000 stock option awards with an exercise price of CAD$0.57 per common share for proceeds of $317,045 (CAD$399,000). The Company has 2,681,006 common shares held in escrow, in which a portion are subject to not be released, but eventually returned and cancelled attributed to its acquisition of the ShowGrow Long Beach dispensary (Notes 9 and 11). Stock options The Company previously approved an incentive stock option plan, pursuant to which the Company may grant stock options up to an aggregate of 10% of the issued and outstanding common shares in the capital of the Company from time to time. Number of options Weighted average exercise price Weighted average contractual term remaining (in years) Aggregate intrinsic value Outstanding at 31 July 2019 6,075,000 CAD$ 0.62 3.69 CAD$ 1,675,750 Granted 5,505,000 CAD$ 0.80 Cancelled (2,425,000 ) CAD$ 0.73 Outstanding at 31 July 2020 9,155,000 CAD$ 0.70 3.48 CAD$ - Granted 1,500,000 CAD$ 0.61 Cancelled (100,000 ) CAD$ 0.66 Exercised (700,000 ) CAD$ 0.57 Outstanding at 31 July 2021 9,855,000 CAD$ 0.71 2.76 CAD$ 3,750 Vested and fully exercisable at 31 July 2021 7,055,000 CAD$ 0.70 2.30 CAD$ 2,812 On 21 August 2019, the Company issued 2,850,000 stock options with an exercise price of CAD$0.88 per share for a term of five years expiring on 21 August 2024. The options are subject to vesting provisions such that 25% of the options vest six months from the date of grant, 25% of the options vest twelve months from the date of grant, 25% of the options vest eighteen months from the date of grant and 25% of the options vest twenty-four months from the date of grant. During the year ended 31 July 2020, the Company cancelled 950,000 stock options in this series due to forfeiture. The total fair value of the stock options granted was calculated to be $1,373,856 (CAD$1,818,232) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 3.125 years Expected volatility 195 % Expected dividend yield 0 % Risk-free interest rate 1.28 % During the year ended 31 July 2021, the Company recorded a stock-based compensation of $314,758 (CAD$405,450) (2020 - $977,571 (CAD$1,315,178)) related to these options. On 1 October 2019, the Company issued 250,000 stock options with an exercise price of CAD$0.93 per share for a term of five years expiring on 1 October 2024. The options are subject to vesting provisions such that 25% of the options vest six months from the date of grant,25% of the options vest twelve months from the date of grant, 25% of the options vest eighteen months from the date of grant and 25% of the options vest twenty-four months from the date of grant. The total fair value of the stock options granted was calculated to be $145,045 (CAD$191,960) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 3.125 years Expected volatility 194 % Expected dividend yield 0 % Risk-free interest rate 1.37 % During the year ended 31 July 2021, the Company recorded a stock-based compensation of $42,840 (CAD$55,183) (2020 - $103,570 (CAD$139,338)) related to these options. On 23 January 2020, the Company issued 200,000 stock options with an exercise price of CAD$0.88 per share for a term of five years expiring on 23 January 2025. The options are subject to vesting provisions such that 25% of the options vest six months from the date of grant, 25% of the options vest twelve months from the date of grant, 25% of the options vest eighteen months from the date of grant and 25% of the options vest twenty-four months from the date of grant. The total fair value of the stock options granted was calculated to be $68,645 (CAD$90,608) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 3.125 years Expected volatility 173 % Expected dividend yield 0 % Risk-free interest rate 1.43 % During the year ended 31 July 2021, the Company recorded a stock-based compensation of $28,055 (CAD$36,139) (2020 - $35,470 (CAD$47,719)) related to these options. On 1 March 2020, the Company issued 250,000 stock options with an exercise price of CAD$0.41 per share for a term of five years expiring on 1 March 2025. The options are subject to vesting provisions such that 25% of the options vest six months from the date of grant, 25% of the options vest twelve months from the date of grant,25% of the options vest eighteen months from the date of grant and 25% of the options vest twenty-four months from the date of grant. The total fair value of the stock options granted was calculated to be $56,287 (CAD$75,331) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 3.125 years Expected volatility 127 % Expected dividend yield 0 % Risk-free interest rate 1.11 % During the year ended 31 July 2021, the Company recorded a stock-based compensation of $28,022 (CAD$36,096) (2020 - $24,303 (CAD$32,696)) related to these options. On 30 April 2020, the Company issued 1,375,000 stock options with an exercise price of CAD$0.67 per share for a term of five years expiring on 30 April 2025. The options are subject to vesting provisions such that25% of the options vest six months from the date of grant, 25% of the options vest twelve months from the date of grant, 25% of the options vest eighteen months from the date of grant and 25% of the options vest twenty-four months from the date of grant. The total fair value of the stock options granted was calculated to be $524,432 (CAD$701,863) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 3.125 years Expected volatility 133 % Expected dividend yield 0 % Risk-free interest rate 0.32 % During the year ended 31 July 2021, the Company recorded a stock-based compensation of $328,055 (CAD$422,580) (2020 - $137,368 (CAD$184,808)) related to these options. On 7 July 2020, the Company cancelled 350,000stock options with an exercise price of CAD$0.88 per share, 80,000 stock options with an exercise price of CAD$0.57 per share and 150,000 stock options with an exercise price of CAD$0.57. Subsequently, the Company issued replacement stock options of 350,000 stock options with an exercise price of CAD$0.88 per share, 80,000 stock options with an exercise price of CAD$0.57 per share and 150,000 stock options with an exercise price of CAD$0.61 under the same vesting provisions and expiry dates as the original stock options. The incremental fair value based on the difference between the replacement and original stock options immediately before they were modified was calculated to be $Nil (CAD$Nil) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 2.066 years Expected volatility 116 % Expected dividend yield 0 % Risk-free interest rate 0.25 % On 6 March 2021, the Company issued 1,250,000 stock options with an exercise price of CAD$0.68 per share for a term of five years expiring on 5 March 2026. The options are subject to vesting provisions such that 25% of the options vest six months from the date of grant, 25% of the options vest twelve months from the date of grant, 25% of the options vest eighteen months from the date of grant and 25% of the options vest twenty-four months from the date of grant. The total fair value of the stock options granted was calculated to be $456,211 (CAD$577,928) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 3.125 years Expected volatility 112 % Expected dividend yield 0 % Risk-free interest rate 0.49 % During the year ended 31 July 2021, the Company recorded a stock-based compensation of $194,729 (CAD$250,837) (2020 - $Nil) related to these options. On 5 April 2021, the Company issued 250,000 stock options with an exercise price of CAD$0.65 per share for a term oft three years expiring on 4 April 2024. The options are subject to vesting provisions such that25% of the options vest six months from the date of grant, 25% of the options vest twelve months from the date of grant, 25% of the options vest eighteen months from the date of grant and 25% of the options vest twenty-four months from the date of grant. The total fair value of the stock options granted was calculated to be $65,795 (CAD$82,409) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 1.81 years Expected volatility 101 % Expected dividend yield 0 % Risk-free interest rate 0.51 % During the year ended 31 July 2021, the Company recorded a stock-based compensation of $39,096 (CAD$50,361) (2020 - $Nil) related to these options. Share purchase warrants and brokers’ warrants Number of warrants Weighted average exercise price Outstanding at 31 July 2019 22,514,771 CAD$1.22 Exercised (165,715 ) CAD$0.73 Expired (9,933,772 ) CAD$0.89 Outstanding at 31 July 2020 12,415,284 CAD$1.49 Issued 4,800,000 USD$0.40 Outstanding at 31 July 2021 (1) 17,215,284 CAD$1.21 (1) This figure does not include 3,200,000 warrants issued to the Agent pursuant to the Loan Agreement, which warrants are held in escrow by us and are to be released to the Agent if we draw on the Delayed Draw Term Loan by December 31, 2021, or cancelled if we do not draw on the Delayed Draw Term Loan. Each warrant, if released to the Agent, will entitle the holder to acquire one share of common stock at an exercise price of US$0.45 per share until July 19, 2025. As of 31 July 2021, the following warrants are outstanding: Number of warrants outstanding and exercisable Exercise price Expiry dates 11,780,134 CAD$ 1.50 17 May 2023 635,150 CAD$ 1.25 16 May 2023 4,800,000 USD$ 0.40 19 July 2025 17,215,284 CAD$ 1.21 |
Segmented Information and Major
Segmented Information and Major Customers | 12 Months Ended |
Jul. 31, 2021 | |
Segmented Information and Major Customers | |
17. Segmented Information and Major Customers | 17. Segmented Information and Major Customers In its operation of the business, management, including our chief operating decision marker, who is also our Chief Executive Officer, reviews certain financial information, including segmented internal profit and loss statements prepared on a basis not consistent with GAAP. During the periods presented, the Company reported its financial performance based on the following segments: · Wholesale; · Retail; and · All others. Revenue and costs are generally directly attributed to our segments. However, due to the integrated structure of our business , certain costs incurred by one segment may benefit other segments. In addition, certain costs incurred at a corporate level are not allocated to our segments. Segment revenue and operating income were as follows during the years ended 31 July 2021: Year Ended July 31, 2021 Revenue Wholesale $ 8,103,674 Retail 18,797,195 All others - Total $ 26,900,869 Year Ended July 31, 2021 Operating income Wholesale $ 2,999,697 Retail 2,551,396 All others (7,527,554 ) Total $ (1,976,461 ) The Company had one operating segment for the year ended 31 July 2020. During the years ended 31 July 2021 and 2020, the Company had no major customer over 10% of its revenues. |
Supplemental Disclosures with R
Supplemental Disclosures with Respect to Cash Flows | 12 Months Ended |
Jul. 31, 2021 | |
Supplemental Disclosures with Respect to Cash Flows | |
18. Supplemental Disclosures with Respect to Cash Flows | 18. Supplemental Disclosures with Respect to Cash Flows Year Ended 31 July 2021 2020 Cash paid during the year for interest $ - $ - Cash paid during the year for income taxes $ 582,152 $ 67,717 On 12 August 2019, the Company issued a total of 4,337,111 common shares of the Company in connection with the Purchase Agreement, NMG SD Settlement Agreement and the Lease Assignment Agreement valued at $2,752,782 (Notes 9 and 16). On 30 November 2019, the Company entered into a Settlement Agreement with SD whereby the Company settled an aggregate receivable amount of $590,328 in exchange for $90,315 accounts receivable from future sale of Inventory, write-off of accounts receivable of $92,415, $25,000 future credit towards the Contribution Fee, and a production equipment valued at $235,685, resulting in a loss of $331,743. On 24 April 2020, the Company issued a total of 2,681,004 common shares of the Company in connection with the NMG SD Settlement Agreement valued at $1,342,175 (Notes 9 and 16). On 21 October 2020, the Company issued 793,466 common shares valued at $297,042 in relation to acquiring the remaining 70% interest in NMG OH 1 (Notes 8 and 16). On the assumption of the lease in Elyria, Ohio, the Company recognized right-of-use assets (Notes 8 and 10), and a corresponding increase in lease liabilities, in the amount of $234,734 which represented the present value of future lease payments using a discount rate of 12% per annum. On the assumption of the lease in Long Beach, California, the Company recognized right-of-use assets (Notes 9 and 10), and a corresponding increase in lease liabilities, in the amount of $428,066 which represented the present value of future lease payments using a discount rate of 12% per annum. On 14 November 2020, the Company issued 70,500 previously escrowed shares with a fair value of $19,703 to Toro Pacific Management Inc. in connection with the acquisition of NMG (Note 16). |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jul. 31, 2021 | |
Commitments and Contingencies | |
19. Commitments | 19. Commitments and Contingencies In connection with the strategic investment agreement with Australis dated 30 October 2018 (the “Investment Agreement”) (Note 20), the Company agreed to pay a monthly service fee of $10,000 to Australis. In connection with the Company’s investment in GLDH (Note 9) and the promissory note provided by Australis, the Company agreed to increase the monthly services fee to Australis to $16,500 per month for 5 years unless ownership held by Australis drops below 10% in which the fee will cease. Following the repayment of the promissory note, the monthly service fee to Australis was reduced to $12,000 commencing June 2019. Subsequent to the year end, the Investment Agreement was terminated as well as the monthly commercial advisory and consulting fees (Note 23). On April 23, 2021, the Company’s subsidiary NMG MI 1, Inc (“NMG MI 1”) executed a lease agreement (the “Lease”) with Kendal Properties, LLC (“Kendal”) to lease finished retail space located at 885 E. Apple Ave., Muskegon, MI 49442. The term of the lease is for a period of 60 months at approximately US$5,000/month and is contingent upon NMG MI 1 receiving one or more commercial marihuana municipal licenses (the “Licenses”) from the City of Muskegon. The License(s) would allow NMG MI 1 to operate a dispensary for the distribution of adult-use and/or medical marihuana and all activities permissible under the Michigan and Muskegon Marihuana Laws. On February 10, 2020, the Company’s subsidiary NMG MI C1 Inc (“NMG MI C1”) executed a lease agreement (the”Lease”) with 254 River Street LLC(“River Street”) to lease commercial space located at 254 River Street, Manistee, MI, 49660. The term of the lease is for a period of 60 months and the lease includes rent abatement and reduced rent periods during construction and start up. Final rent is approximately US$22,500 per month and is contingent upon NMG MI C1 receiving one or more commercial marihuana municipal licenses (the “Licenses”) from the City of Manistee. The License(s) would allow NMG MI C1 to operate a cultivation facility for adultuse and/or medical marihuana and all activities permissible under the Michigan and Manistee Marihuana Laws. On February 10, 2020, the Company’s subsidiary NMG MI P1 Inc (“NMG MI P1”) executed a lease agreement (the”Lease”) with 254 River Street LLC(“River Street”) to lease commercial space located at 254 River Street, Manistee, MI, 49660. The term of the lease is for a period of 60 months and the lease includes rent abatement and reduced rent periods during construction and start up. Final rent is approximately US$7,500 per month and is contingent upon NMG MI P1 receiving one or more commercial marihuana municipal licenses (the “Licenses”) from the City of Manistee. The License(s) would allow NMG MI P1 to operate a production facility for adult-use and/or medical marihuana and all activities permissible under the Michigan and Manistee Maihuana Laws. Leases for 254 River St., Manistee, Michigan 49660 and 885 E. Apple Ave., Muskegon, Michigan 49442 were subject to the Company subsidiaries receiving approval by the State of Michigan and could be cancelled by The Company if licences were not awarded. The licenses for NMG MI P1 Inc. and NMG MI C1 Inc. were issued on July 19, 2021 and license for NMG MI 1 Inc. was issued on August 3, 2021 at which time the Company recognized these lease liabilities. Upon NMG MI 1 receiving one or more Licenses, NMG MI 1 agrees to cause the Company to issue common shares (the “Common Shares”) having a value of up to $150,000 to Kendal, with portions of the Common Shares to be issued upon the achievement of certain milestones as follows: i. 25% of the Common Shares to be issued within 30 days following NMG MI 1’s receipt of a local commercial medical marihuana retail license from the city of Muskegon, MI and a state commercial medical marihuana retail license from the state of Michigan; ii. 25% of the Common Shares to be issued within 30 days following NMG MI 1 passing final inspections at the Leased premises regarding the commercial medical marihuana retail license and receiving its local operating permit allowing NMG MI 1 to begin medical marihuana operations at the premises; iii. 25% of the Common Shares to be issued within 30 days following NMG MI 1’s receipt of a local commercial adult-use marihuana retail license from the city of Muskegon, MI and a state commercial adultuse marihuana retail license from the state of Michigan; iv. 25% of the Common Shares to be issued within 30 days following NMG MI 1 passing final inspections at the Leased premises regarding the commercial adult-use marihuana retail license and receiving its local operating permit allowing NMG MI 1 to begin adult-use marihuana operations at the premises; At 31 July 2021, the Company accrued $75,000 for milestones (i) and (ii) above (Note 15). Upon NMG MI C1 receiving one or more Licenses, NMG MI C1 agrees to cause the Company to issue common shares (the “Common Shares”) having a value of up to $600,000 to River Street, with portions of the Common Shares to be issued upon the achievement of certain milestones as follows: i. US$200,000 of Common Shares to be issued within 30 days of NMG MI C1 receiving local and state commercial marihuana cultivation licenses; ii. US$200,000 of Common Shares to be issued within 30 days of passing final inspections at the premises with respect to cultivation and receiving local operating permit to begin commercial marihuana cultivation operations at the premises; iii. US$100,000 of Common Shares to be issued within 30 days of NMG MI C1 receiving local and state commercial marihuana retail licenses; and iv. US$100,000 of Common Shares to be issued within 30 days of passing final inspections at the premises with respect to retail operations and receiving local operating permit to begin commercial marihuana retail operations at the premises. At 31 July 2021, the Company accrued $200,000 for milestone (i) above (Note 15). Upon NMG MI P1 receiving one or more Licenses, NMG MI P1 agrees to cause the Company to issue common shares (the “Common Shares”) having a value of up to $400,000 to River Street, with portions of the Common Shares to be issued upon the achievement of certain milestones as follows: i. US$200,000 of Common Shares to be issued within 30 days of NMG MI P1 receiving local and state commercial marihuana processing licenses; and ii. US$200,000 of Common Shares to be issued within 30 days of passing final inspections at the premises with respect to processing and receiving local operating permit to begin commercial marihuana processing operations at the premises. At 31 July 2021, the Company accrued $200,000 for milestone (i) above (Note 15). The value of the Common Shares will be calculated based on the lesser of: (1) the closing market price on the respective milestone achievement date and (2) a ten percent discount to the twenty day volume weighted average price for the twenty days immediately prior to the respective milestone achievement date(s). |
Investment Agreement
Investment Agreement | 12 Months Ended |
Jul. 31, 2021 | |
Segmented Information and Major Customers | |
20. Investment Agreement | 20. Investment Agreement On 30 October 2018, the Company entered into the Investment Agreement with Australis Capital Inc. (“Australis”). Pursuant to the terms of the Investment Agreement, Australis will acquire (i) 16,000,000 units of the Company and (ii) CAD$1,600,000 principal amount 8% unsecured convertible debentures. Under the terms of the Investment Agreement, the parties agreed to negotiate in good faith a license agreement pursuant to which the Company will grant Australis an exclusive and assignable license to use the Body and Mind brand outside of the United States of America on commercially reasonable terms. In addition, the Company was to enter into a commercial advisory agreement with Australis Capital (Nevada) Inc. (“Australis Nevada”), a wholly-owned subsidiary of Australis, pursuant to which Australis Nevada will provide advisory and consulting services to the Company at $10,000per month for a term ending on the date that is the earlier of: (i) five years following the closing of the transactions contemplated by the Investment Agreement, and (ii) the date Australis no longer holds 10% or more of the issued and outstanding Common Shares (Note 23). Subject to certain exceptions, Australis will be entitled to maintain its’ pro rata interest in the Company until such time as it no longer holds 10% or more of the issued and outstanding Common Shares. Subject to applicable laws and the rules of the Canadian Securities Exchange (the “CSE”), for as long as Australis owns at least 10% of the issued and outstanding common shares, Australis will be entitled to nominate one director for election to the Board of Directors of the Company (the “Board”). If Australis exercises all of the warrants and converts all of the debentures purchased, Australis will be entitled to nominate a second director for election to the Board. On 2 November 2018, the Company executed the Investment Agreement and completed the sale of securities pursuant to the Investment Agreement. During the year ended 31 July 2021, the Company paid an advisory fee of $144,000 (2020 - $144,000). |
Other Agreements
Other Agreements | 12 Months Ended |
Jul. 31, 2021 | |
21. Other Agreements | 21. Other Agreements The Company and NMG Cathedral City (“NMG CC”) entered into a management and administrative services agreement (the "Management Agreement") with Satellites Dip, LLC, ("SD"), a licensed cannabis business conducting commercial cannabis activity within the state of California. The one-year Management Agreement commenced on 6 June 2019 and encompassed the following: a. Management Fee: NMG CC will be paid a management fee of 30% of Net Profits or $10,000 per month, whichever is greater; b. Brand Licensing: NMG CC shall work to broker commercial arrangements between SD and third-party cannabis brand owners whereby SD licenses commercial cannabis brands from third parties in connection with SD's commercial cannabis activity in exchange for a license fee; c. Equipment and Capital: NMG CC shall furnish all equipment and machinery necessary for SD's manufacturing of the Branded Products. Any equipment provided by NMG CC to SD shall be owned by NMG CC in its entirety and, subject to SD's approval of the terms, leased to SD pursuant to an Equipment Lease Agreement entered into between NMG CC and SD, dated 6 June 2019; and d. Loan: The Parties have entered into a certain secured loan agreement dated 6 June 2019 whereby NMG CC has loaned SD $250,000 (the "Loan") to be used solely in connection with SD's commercial cannabis activity. The Loan shall be due and payable on 6 June 2020 (the "Maturity Date") and shall bear interest at a rate of 12% per annum which shall be accrued, compounded quarterly and payable on the Maturity Date. The Loan is secured by a security interest in and to all of SD's assets. On 30 November 2019, NMG CC entered into a settlement and release agreement (the “Settlement Agreement”) with SD whereby NMG CC and SD agreed to terminate the Management Agreement and to enter into a mutual release of any and all claims related to the Management Agreement, subject to the terms of the Settlement Agreement. As of 30 November 2019, SD owed NMG CC management fees (the “Monies Owed”) under the Management Agreement. In consideration of NMG CC’s discharge of the Monies Owed, SD has agreed to pay NMG CC one-hundred percent (100%) of all proceeds received from the sale of all or any part of its inventory (the “Inventory”) as of 1 November 2019. Pursuant to the Settlement Agreement, SD shall provide monthly updates of the remaining Inventory until the Inventory has been fully exhausted. NMG CC will determine the sale price for any item in Inventory subject to the Settlement Agreement. Brand Director Agreement On 30 November 2019, NMG CC entered into a brand director agreement (the “Brand Director Agreement”) with SD. Pursuant to the Brand Director Agreement, SD has engaged NMG CC to provide certain advisory and brand director services in connection with SD’s manufacture of Company-branded products, as well as certain other products (the “Managed Products”) as agreed to by NMGCC (the “Brand Director Services”). The initial term of the Brand Director Agreement is six months and the parties may renew the Brand Director Agreement for successive three-month renewal periods. The Brand Director Services include: (a) managing SD’s production of the Managed Products; (b) payment of a reimbursement fee to SD equal to the amount of direct costs and direct taxes applicable to the Managed Products; (c) managing inventory of the Managed Products; and (d) directing SD to enter into distribution agreements and sale agreements with third-party commercial cannabis licensees for the distribution and sale of the Managed Products in accordance with applicable law. Pursuant to the Brand Director Agreement, NMG CC will pay a monthly fee (the “Contribution Fee”) of $5,000 to SD. In connection with the Brand Director Agreement, as partial repayment for the principal and interest accrued under a certain loan agreement (the “Loan Agreement”) between NMG CC and SD dated 6 June 2019, SD waives payment of the Contribution Fee for the first five (5) months of the Brand Direction Agreement. In consideration for the Brand Director Services, SD (as the “Licensee”) has agreed to pay NMG CC (in its capacity as the “Brand Director”) a brand director fee for each calendar month during the term of the Brand Director Agreement, whereby Licensee shall pay to Brand Director a fee to be calculated as follows: (x) net revenue for a single calendar month, multiplied by, (y) seventy-five percent (75%); (z) plus any fees to be paid to NMG CC in connection with the equipment lease agreement (the “Equipment Lease Agreement”) dated 6 June 2019 (the “Equipment Lease Fee”) added to the product of (x) and (y), the (q) total amount shall be the fee paid to NMG CC. If the net revenue, minus the product of (x) and (y) is less than the Equipment Lease Fee in any given month, the difference shall carry over to the subsequent month, to be added to that month’s Equipment Lease Fee, or the difference may be paid by Licensee at its sole option. The Brand Director Agreement was terminated on 30 April 2021. Brand License Agreement On 30 November 2019, DEP entered into a brand license agreement (the “License Agreement”) with SD. Pursuant to the License Agreement, DEP granted SD a non-exclusive, non-transferable, and non-sub-licensable right (the “License”) to use certain licensed marks in connection with or on licensed products, solely in connection with SD’s commercial cannabis activity in California. In consideration for the License, SD will pay DEP a monthly fee equal to $100, payable on a quarterly basis. During the term of the License Agreement, SD must remain in compliance with all state and local cannabis rules and regulations in California, and maintain valid commercial cannabis licenses. SD will follow the guidance of DEP and only utilize packaging and labelling materials purchased from (or at the direction of) DEP. The License Agreement was in full force and effect for the duration of the Brand Director Agreement. As a result, the License Agreement was also terminated on 30 April 2021. Equipment Purchase Agreement On 30 November 2019, NMG CC and SD entered into an equipment purchase agreement (the “Equipment Purchase Agreement”) pursuant to which NMG CC agreed to purchase certain equipment (the “Equipment”) from SD. The aggregate purchase price for the Equipment is $235,685 and will be applied to the outstanding balance under the Loan Agreement. First Amendment to the Equipment Lease Agreement On 30 November 2019, NMG CC and SD entered into an amendment (the “First Amendment”) to the Equipment Lease Agreement. Pursuant to the First Amendment, NMG CC and SD amended (i) the term of the Equipment Lease Agreement to be coterminous with the Brand Director Agreement; and (ii) to update the equipment being leased pursuant to the Equipment Lease Agreement and to update the monthly rental rate for the equipment being leased. Release & Satisfaction of Loan Agreement On 30 November 2019, NMG CC and SD entered into a release and satisfaction of loan agreement (the “Release Agreement”). Pursuant to the Release Agreement, NMG CC agreed that all indebtedness of SD to NMG CC arising from the Loan Agreement (and promissory note issued in connection with the Loan Agreement) is hereby satisfied and discharged in full. The release is granted based on SD’s obligations and duties pursuant to the Equipment Purchase Agreement and its five (5) month waiver of the Contribution Fee under the Brand Director Agreement. For the year ended 31 July 2020, the Company recorded a loss of $331,743 related to the Settlement Agreement with SD as follows: Total amount settled $ 590,328 Future proceeds from Inventory 90,315 Write-off of accounts receivable (92,415 ) Credit towards future Contribution Fee 25,000 Production equipment acquired 235,685 Loss from the settlement $ 331,743 |
Income taxes
Income taxes | 12 Months Ended |
Jul. 31, 2021 | |
Income taxes | |
22. Income taxes | 22. Income Taxes A reconciliation of income taxes at statutory rates with the reported taxes for the years ended 31 July 2021 and 2020 is as follows: The (benefit) expense for income taxes consists of the following: 2021 2020 Current: Federal $ 2,281,497 $ 1,428,797 State 99,322 9,040 2,380,819 1,437,838 Deferred: Federal (214,352 ) (1,303,670 ) State 242 - (214,110 ) (1,303,670 ) Total expense for income taxes $ 2,166,709 $ 134,168 Section 280E of the Internal Revenue Code (“IRC”) prohibits businesses engaged in the trafficking of Schedule I or Schedule II controlled substances from deducting normal business expenses, such as payroll and rent, from gross income (revenue less cost of goods sold). Section 280E was originally intended to penalize criminal market operators, but because cannabis remains a Schedule I controlled substance for U.S. Federal purposes, the Internal Revenue Service (the “IRS”) has subsequently applied Section 280E to state-legal cannabis businesses. Cannabis businesses operating in states that align their tax codes with the IRC are also unable to deduct normal business expenses from their state taxes. The nondeductible expenses shown in the effective rate reconciliation above is comprised primarily of the impact of applying Section 280E to the Company’s businesses that are involved in selling cannabis, along with other typical non-deductible expenses such as lobbying expenses. 2021 2020 Net loss for the year before income tax $ (190,248 ) $ (4,464,221 ) Federal and state income tax rates 21.00 % 21.00 % Expected income tax recovery 39,951 (937,486 ) IRC 280E disallowance 1,935,581 941,288 Stock options 243,829 268,439 Impairment of consolidated investment 176,816 - Non-consolidated income - 54,147 Other permanent differences (82,301 ) 15,757 Change in estimates and others - 1,193,750 Opening deferred tax adjustments (284,621 ) (1,251,727 ) Change in tax rates 7,598 - Change in benefit not recognized 129,856 (150,000 ) Total income tax expense $ 2,166,709 $ 134,168 The significant components of the Company's deferred income tax assets and liabilities are as follows: As at 31 July 2021 As at 31 July 2020 Deferred income tax asset Lease liabilities $ 123,208 $ 450,139 Investments 6,648 - Deferred tax allowance (129,856 ) - Deferred income tax liability Investment in NMG Ohio LLC - (71,418 ) Property and equipment – Non right-of-use (39,603 ) (186,298 ) Property and equipment – Right-of-use (101,404 ) (426,902 ) Brand and license (57,332 ) (177,971 ) Net deferred income tax liability $ (198,339 ) $ (412,450 ) Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended 31 July 2021. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. On the basis of this evaluation, as of 31 July 2021, a valuation allowance of $129,856 and as of 31 July 2020, a valuation allowance of $Nil has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for growth. As a result of an “ownership change” within the meaning of Section 382(g) of the Internal Revenue Code of 1986, as amended, which occurred in the 31 July 2016 fiscal year, we are limited in our ability to utilize our net operating loss carryforwards and certain other built-in deductions in computing our taxable income beginning with the ownership change date. As a result, $2,450,364 of our net operating loss is limited. Following is a reconciliation of gross unrecognized tax benefits from uncertain tax positions, excluding the impact of penalties and interest. The tax accounting method was changed to the Farm Price method which allows a more granular assessment of each expense, for the cultivation and manufacturing operations only, to be applied and expensed as cost of goods, to determine net taxable income As at 31 July 2021 As at 31 July 2020 Beginning year balance $ 966,992 $ - Increase related to prior year tax positions - 406,508 Increase related to current year tax positions - 560,484 Ending year balance $ 966,992 $ 966,992 Of the $962,423 of gross unrecognized tax benefits from uncertain tax positions outstanding as of 31 July 2021, $Nil would affect our effective tax rate if recognized. Interest related to uncertain tax positions are required to be calculated, if applicable, and would be classified as “interest expense” in the two statements of operations. Penalties would be recognized as a component of “general and administrative expenses”. As of 31 July 2021, $24,750 of interest and $Nil penalties was reported and as of 31 July 2020, $13,979 interest and $Nil penalties were reported. Our U.S. federal income tax returns for 31 July 2018 through 2020 are open to review by the U.S. Internal Revenue Service. Our state income tax returns for 31 July 2018 through 2020 are open to review, depending on the respective statute of limitation in each state. As of 31 July 2021, we believe it is reasonably likely that, within the next twelve months, $Nil of the previously unrecognized tax benefits related to certain non-U.S. filing positions may be recognized due to the expirations of the statutes of limitations. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jul. 31, 2021 | |
Subsequent Events | |
23. Subsequent Events | 23. Subsequent Events On 6 August 2021, the Company entered into management agreements with each of NMG IL 1, LLC (“NMG IL 1”) and NMG IL 4, LLC (“NMG IL 4”) along with an option to indirectly acquire all of the membership interests in each of NMG IL 1 and NMG IL 4 pursuant to a convertible credit facility between our subsidiary, DEP and each of NMG IL 1 and NMG IL 4, and membership interest purchase agreements between DEP and the members of NMG IL 1 and NMG IL 4, subject to obtaining all required local and state regulatory authorization. Each of NMG IL 1 and NMG IL 4 have been identified in the Illinois Department of Financial and Professional Regulation (IDFPR) results of the Social Equity Justice Involved Lottery for 55 Conditional Adult-Use Cannabis Dispensary Licenses (Conditional Licenses) across the state. The certified results are from a lottery with a pool of applicants who scored 85 % or greater in their applications. NMG IL 1 and NMG IL 4 were drawn in BLS Region #5 (Chicago-Naperville-Elgin) where 36 conditional licenses are available. The applications are not tied to specified locations. In September 2021, Australis sold 9,900,000 of our restricted common shares in a private transaction which resulted in Australis’ beneficial ownership dropping below 10% of our outstanding common shares. As a result of Australis’ beneficial ownership falling below 10%, the Investment Agreement was terminated and monthly commercial advisory and consulting fees paid from the Company to Australis were terminated along with Australis’ entitlement to nominate a director to the board of directors of our Company (Note 20). On 17 September 2021, the Company closed the acquisition of the remaining 70% interest in NMG Ohio . The transaction included the transfer of a dispensary license for the Clubhouse Dispensary in Elyria, Ohio to our wholly owned subsidiary, NMG OH 1, LLC, which became effective on 4 September 2020. The transaction also included the final award of a production license which has now been transferred to our wholly owned subsidiary, NMG OH P1, LLC. As a result of the closing of this acquisition, the Company now indirectly own 100% of NMG Ohio. On 21 September 2021, the Company reported plans to enter the Michigan market with fully funded dispensary, cultivation and production facilities. The Company has leased a commercial building in Manistee, Michigan, with the intent of developing a cultivation facility with 50,000 square feet of canopy as well as a production facility. Architectural plans are complete for phase one which is planned for 20,000 square feet of canopy, 5,000 square feet of processing and 5,000 square feet of multi-use and office space. The second phase of development is planned for 30,000 square feet of canopy. The Company, through a wholly owned Michigan subsidiary, have received local and state licensing for our first Michigan dispensary, located in Muskegon. This is a social equity license granted in a limited license jurisdiction. Architect plans are complete, hawse have received our building permit, and construction has started on the leased building. Our dispensary is on a main thoroughfare street with exceptional parking. On November 12, 2021 the Compensation Committee and Board of Directors of Body and Mind approved an Executive Bonus Program for FY2022 for the CEO, COO and CFO. The Board of Directors approved an incentive-based cash bonus program for CEO’s consulting company and for the COO of up to a maximum of $200,000 per CEO or COO based on the consolidated revenue performance of the Company for each quarter of the fiscal year ended July 31, 2022 compared to the prior quarter. Each of the CEO and COO could earn (i) $5,000 in cash for each 1% revenue growth over the prior quarter, and/or (ii) $10,000 in cash for each 1% Adjusted EBITDA growth over the prior quarter, all subject to a $50,000 maximum amount per executive that could be earned for each quarter of the fiscal year ended July 31, 2022. In addition, the Compensation Committee and the Board of Directors approved that they will consider a further discretionary cash bonus to the CEO’s consulting company and the COO at the fiscal year ended July 31, 2022, based on performance metrics of the Company over the course of the fiscal year ended July 31, 2022. Furthermore, on November 12, 2021, the Compensation Committee and the Board of Directors approved a cash bonus to be paid to the CFO’s consulting company up to a maximum of $40,000 based on the timing of the filing of Company’s periodic reports for the fiscal year ended July 31, 2022. The bonus consists of a quarterly bonus of $10,000 per quarter based on filing of the Company’s Form 10-Q’s and 10-K by the filing deadline, not including any extensions pursuant to Rule 12b-25 under the Exchange Act. Pursuant to certain licensing milestones being achieved under a lease agreement for a premises in Muskegon, Michigan and certain licensing and operational milestones being achieved under two lease agreements for a premises in Manistee, Michigan, on 21 September 2021, the Company issued 238,929 shares of common stock at a deemed price of CAD$0.3938 per share to one entity based on the terms and conditions of the certain lease agreement for the Muskegon, Michigan premises and issued an aggregate of 1,304,601 shares of common stock at a deemed price of CAD$0.3937 per share to another entity based on the terms and conditions of the two lease agreements for the Manistee, Michigan premises. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Jul. 31, 2021 | |
Significant Accounting Policies | |
Reclassification | |
Basis of presentation | Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of current period financial statements. These reclassifications had no effect on the previously reported net loss. These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is 31 July. |
Amounts receivable | Amounts receivable represents amounts owed from customers for sale of medical and recreational cannabis and sales tax recoverable. Amounts are presented net of the allowance for doubtful accounts, which represents the Company’s best estimate of the amount of probable credit losses in the existing accounts receivable balance. The Company determines the allowance for doubtful accounts based on historical experience and current economic conditions. The Company reviews the adequacy of its allowance for doubtful accounts on a quarterly basis. As of 31 July 2021 and 2020, the Company has no allowance for doubtful accounts. |
Revenue recognition | The Company recognizes revenue from product sales when our customers obtain control of our products. This determination is based on the customer specific terms of the arrangement for wholesale operations. Upon transfer of control, the Company has no further performance obligations. All retail sales are considered COD. Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC 606. The Company’s revenues accounted for under ASC 606, generally, do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The sales prices are generally fixed and all consideration from contracts is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration. See Note 17 for revenue disaggregation table. |
Inventory | Inventory consists of raw material, work in progress (live plants and plants in the drying process), finished goods, and consumables. The Company values its raw material, finished goods and consumables at the lower of the actual costs or its current estimated market value less costs to sell. The Company values its work in progress at cost. The Company periodically reviews its inventory for obsolete and potentially impaired items. As of 31 July 2021 and 2020, the Company has no allowance for inventory obsolescence. |
Property and equipment | Property and equipment are recorded at cost and are amortized over their estimated useful lives on a straight-line basis as follows: Office equipment 7 years Cultivation equipment 7 years Production equipment 7 years Kitchen equipment 7 years Vehicles 7 years Vault equipment 7 years Leasehold improvements shorter of useful life or the term of the lease |
Intangible Assets | Intangible assets acquired from third parties are measured initially at fair value and either classified as indefinite life or finite life depending on their characteristics. Intangible assets with indefinite lives are tested for impairment at least annually and intangible assets with finite lives are reviewed for indicators of impairment at least annually. The Company’s brands and licenses acquired from NMG have indefinite lives; therefore no amortization is recognized. The Company’s brands and licenses acquired by NMG SD have a finite life of 10 years, brands and licenses acquired by NMG LB and NMG OH 1 have a finite life of 10 years, customer relationships acquired by NMG OH 1 have a finite life of five years and are amortized over these estimated useful lives on a straight-line basis. |
Goodwill | Goodwill represents the excess of the aggregate purchase price paid over the fair value of the net assets acquired in our business combinations. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Events or changes in circumstances that could trigger an impairment review include a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, additional impairment testing is not required. The Company tests for goodwill impairment annually during its fourth quarter. |
Income taxes | Deferred income taxes are reported for timing differences between items of income or expense reported in the consolidated financial statements and those reported for income tax purposes in accordance with ASC 740, “Income Taxes”, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, and for tax losses and credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not. |
Equity Method Investments | The Company utilizes the equity method when accounting for investments in which the Company is able to exercise significant influence, but does not hold controlling interest. Significant influence is generally presumed to exist when the Company owns between 20% to 50% of the investee. Under the equity method of accounting, the investee's financials are not consolidated within the Company's financial statements. |
Basic and diluted net loss per share | The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive. Potentially dilutive options of 9,855,000 and warrants of 17,215,284 existed at 31 July 2021. This figure does not include 3,200,000 warrants issued to the Agent pursuant to the Loan Agreement, which warrants are held in escrow by us and are to be released to the Agent if we draw on the Delayed Draw Term Loan by December 31, 2021, or cancelled if we do not draw on the Delayed Draw Term Loan. Each warrant, if released to the Agent, will entitle the holder to acquire one share of common stock at an exercise price of US$0.45 per share until July 19, 2025. |
Comprehensive loss | ASC 220, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive income/loss and its components in the consolidated financial statements. As of 31 July 2021 and 2020, the Company reported foreign currency translation adjustments as other comprehensive income or loss and included a schedule of comprehensive income/loss in the consolidated financial statements. |
Foreign currency translation | The Company’s functional currency is the Canadian dollar and its reporting currency is in U.S. dollars. The Company’s subsidiaries have a functional currency in U.S. dollars. The consolidated financial statements of the Company are translated to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”. Exchange gains and losses on inter-company balances that form part of the net investment in foreign operations are included in other comprehensive income. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. The exchange rates used to translate Canadian dollar to U.S. dollar was 0.8024 for monetary assets and liabilities and 0.7855 as an average rate for transactions occurred during the year ended 31 July 2021. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of net loss. |
Stock based compensation | The Company estimates the fair value of each stock option award at the grant date by using the Black-Scholes Option Pricing Model. The fair value determined represents the cost for the award and is recognized over the required service period, generally defined as the vesting period. The Company’s accounting policy is to recognize forfeitures as they occur. |
Fair value measurements | The Company accounts for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: · Level 1 – inputs are based upon unadjusted quoted prices for identical instruments in active markets. · Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit spreads, foreign exchange rates, and forward and spot prices for currencies. · Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Our Level 3 assets and liabilities include investments in other private entities, and goodwill and intangible assets, when they are recorded at fair value due to an impairment charge. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. The Company measures equity investments without readily determinable fair values on a nonrecurring basis. The fair values of these investments are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections. The Company’s convertible note receivable was measured at fair value (Note 6). Other current financial assets and current financial liabilities have fair values that approximate their carrying values. |
Use of estimates and assumptions | The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from these estimates. |
Lease accounting | The Company adopted ASC 842, leases effective 1 August 2019 using a modified retrospective approach. Under ASC 842, leases are separated into two classifications: operating leases and financial leases. Lease classification under ASC 842 is relatively similar to ASC 840. For a lease to be classified as a finance lease, it must meet one of the five finance lease criteria: (1) transference of title/ownership to the lessee, (2) purchase option, (3) lease term for major part of the remaining economic life of the asset, (4) present value represents substantially all of the fair value of the asset, and (5) asset specialization. Any lease that does not meet these criteria is classified as an operating lease. ASC 842 requires all leases to be recognized on the Company’s balance sheet. Specifically, for operating leases, the Company recognize a right-of-use asset and a corresponding lease liability upon lease commitment. |
Nature and Continuance of Ope_2
Nature and Continuance of Operations (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Nature and Continuance of Operations | |
Schedule of consolidation of entities and its ownership interest | Name Jurisdiction Ownership Date of acquisition or formation DEP Nevada Inc. (“DEP Nevada”) Nevada, USA 100 % 10 August 2017 Nevada Medical Group LLC (“NMG”) Nevada, USA 100 % 14 November 2017 NMG Long Beach LLC California, USA 100 % 18 December 2018 NMG Cathedral City LLC California, USA 100 % 4 January 2019 NMG San Diego LLC California, USA 60 % 30 January 2019 NMG OH 1, LLC Ohio, USA 100 % 30 January 2020 NMG MI 1, Inc. Michigan, USA 100 % 24 June 2021 NMG MI C1 Inc. Michigan, USA 100 % 24 June 2021 NMG MI P1 Inc. Michigan, USA 100 % 24 June 2021 |
Schedule of ownership interest by equity method investment in consolidation | Name Jurisdiction Ownership Date of acquisition or formation NMG Ohio LLC Ohio, USA 30 % 27 April 2017 |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Significant Accounting Policies | |
Schedule of property and equipment estimated useful lives | Office equipment 7 years Cultivation equipment 7 years Production equipment 7 years Kitchen equipment 7 years Vehicles 7 years Vault equipment 7 years Leasehold improvements shorter of useful life or the term of the lease |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Financial Instruments | |
Schedule of financial assets at fair value | As of 31 July 2021 As of 31 July 2020 Financial assets at fair value Cash $ 7,374,194 $ 1,352,130 Convertible loan receivable 1,648,816 1,290,263 Total financial assets at fair value $ 9,023,010 $ 2,642,393 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Inventory | |
Schedule of inventory | 31 July 2021 31 July 2020 Work in progress $ 503,215 $ 211,621 Finished goods 1,547,493 959,939 Consumables 885,448 598,277 Total $ 2,936,156 $ 1,769,837 |
Investment in NMG Ohio LLC (Tab
Investment in NMG Ohio LLC (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Investment in NMG Ohio LLC (Tables) | |
Schedule of reconciliation and summarized financial information of Investment in NMG Ohio LLC | 31 July 2021 31 July 2020 30% equity investment: Opening balance $ 531,185 $ 134,066 Equity-method investment change from earnings 13,219 397,119 Total equity investment in NMG Ohio 544,404 531,185 Acquisition of remaining 70% interest: Opening balance 2,630,055 2,630,055 Acquisition costs: Common shares issued to vendors at fair value 297,042 - Acquisition costs: Cash payments to vendors 393,750 - Foreign exchange 7,919 Total advances for remaining 70% acquisition of NMG Ohio 3,328,766 2,630,055 Impairment loss (58,382 ) Acquisition of The Clubhouse Dispensary (Note 11) (3,814,788 ) - Total investment in NMG Ohio $ - $ 3,161,240 Loan receivable (payable) to NMG Ohio Opening balance $ (466,495 ) $ 701,781 Advances provided to NMG Ohio 1,120,015 112,869 Advances received from NMG Ohio - (1,252,429 ) Foreign exchange 4,671 (28,716 ) Transferred to NMG OH 1 and eliminated on consolidation 233,088 - Loan receivable (payable) to NMG Ohio $ 891,279 $ (466,495 ) During the year ended 31 July 2021, the Company provided $891,279 to NMG Ohio related to build-out of production facility and license fees. |
Investment in and advances to_2
Investment in and advances to GLDH (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Investment in and advances to GLDH (Tables) | |
Schedule of total investment in GLDH | 31 July 2021 31 July 2020 Opening balance $ 8,910,854 $ 7,373,036 Share issuances - 4,092,175 Share payment reduction - (793,416 ) Interest income accrued on the Note 88,143 1,040,000 Advances for working capital 3,030 2,143,609 Lease Assignment Agreement payment - 750,000 Amount transferred to Property and Equipment - (1,431,585 ) Amount transferred to Brand and Licenses - (3,585,483 ) Expensed during the year (188,879 ) (501,862 ) Foreign exchange 99,585 (175,620 ) 8,912,733 8,910,854 Impairment loss (534,165 ) - Acquisition of ShowGrow Long Beach dispensary (Note 11) (8,378,568 ) - Ending balance $ - 8,910,854 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Property and Equipment | |
Schedule of property and equipment | Office Equipment Cultivation Equipment Production Equipment Kitchen Equipment Vehicles Vault Equipment Leasehold Improvements Total Cost: Balance, 31 July 2020 $ 73,310 $ 478,187 $ 545,723 $ 51,108 $ 38,717 $ 2,172 $ 4,245,389 $ 5,434,606 Additions (disposals) 328,261 (12,077 ) 24,979 - - 8,163 810,410 1,159,736 Balance, 31 July 2021 401,571 466,110 570,702 51,108 38,717 10,335 5,055,799 6,594,342 Accumulated Depreciation: Balance, 31 July 2020 15,844 182,232 130,421 14,421 18,797 897 472,790 835,402 Depreciation 33,921 68,312 79,745 7,301 5,531 893 669,447 865,150 Balance, 31 July 2021 49,765 250,544 210,166 21,722 24,328 1,790 1,142,237 1,700,552 Net Book Value: At 31 July 2020 57,466 295,955 415,302 36,687 19,920 1,275 3,772,599 4,599,204 At 31 July 2021 $ 351,806 $ 215,566 $ 360,536 $ 29,386 $ 14,389 $ 8,545 $ 3,913,562 $ 4,893,790 |
Business Acquisition (Tables)
Business Acquisition (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Business Acquisition | |
Schedule of Pro Forma | The Clubhouse Dispensary NMG LB Revenue $ 6,643,561 $ 5,940,087 Net income $ 1,565,316 $ 283,569 Year ended 31 July 2020 As Reported Pro Forma (unaudited) Revenue 6,232,521 16,859,485 Net income (4,598,389 ) (4,238,491 ) |
Schedule of Purchase consideration | Purchase consideration $ 3,814,788 Assets acquired: Cash 257,462 Amounts receivable 510,367 Prepaid expenses 4,965 Inventory 178,898 Property and equipment 763,951 Licenses and customer relationships 2,710,000 Liabilities assumed: Trade payable and accrued liabilities (443,589 ) Net assets acquired 3,982,054 Bargain purchase (167,266 ) TOTAL $ 3,814,788 Purchase consideration $ 8,378,568 Assets acquired: Cash 65,340 Prepaid expenses 15,264 Inventory 177,930 Property and equipment 5,402 Loan receivable (Note 7) 239,834 Liabilities assumed: Trade payable and accrued liabilities (732,262 ) Income taxes payable (423,931 ) Loans payable (Note 14) (12,190 ) Net liabilities acquired (664,613 ) Brand and licenses 6,510,000 Goodwill 2,533,181 TOTAL $ 8,378,568 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets Net (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Goodwill and Intangible Assets Net | |
Schedule of Intangible assets | As of 31 July 2021 Gross carrying amount Weighted average life (years) Accumulated amortization Net carrying amount Intangible assets: Brand $ 247,000 - $ - $ 247,000 Licenses 20,718,508 10.0 (1,184,175 ) 19,534,333 Customer relationships 90,000 5.0 (16,265 ) 73,735 Total intangible assets $ 21,055,508 $ (1,200,440 ) $ 19,855,068 As of 31 July 2020 Gross carrying amount Weighted average life (years) Accumulated amortization Net carrying amount Intangible assets: Brand $ 247,000 - $ - $ 247,000 Licenses 11,588,508 10.0 (78,025 ) 11,510,483 Total intangible assets $ 11,835,508 $ (78,025 ) $ 11,757,483 |
Schedule of gross carrying amount of goodwill | Balance at July 31, 2020 $ 2,635,721 Increase due to acquisitions 2,533,181 Balance at July 31, 2021 $ 5,168,902 |
Schedule of The expected amortization of the intangible assets | 2022 $ 1,199,162 2023 1,199,162 2024 1,199,162 2025 1,199,162 2026 1,199,162 Thereafter 5,687,258 $ 11,683,068 |
Related Party Balances and Tr_2
Related Party Balances and Transactions (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Related Party Balances and Transactions | |
Schedule of related party transactions | For the year ended 31 July 2021 For the year ended 31 July 2020 A company controlled by the President, Chief Executive Officer and a director Management fees $ 159,657 $ 154,439 A company controlled by the Chief Financial Officer and a director Management fees 109,487 91,594 A company controlled by a former director and former President of NMG Management fees 65,000 141,665 A company controlled by the Corporate Secretary Management fees 70,990 63,853 Consulting fees - 3,044 A company controlled by the former Chief Executive Officer and a former director Management fees - 9,224 $ 405,134 $ 463,819 |
Loan Payable (Tables)
Loan Payable (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Loan Payable | |
Schedule of the Black Scholes Option |
Operating leases (Tables)
Operating leases (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Operating leases | |
Schedule of supplemental cash flow information related to leases | Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 536,985 Right-of-use assets obtaining in exchange for lease obligations: Operating leases $ 380,832 Weighted-average remaining lease term – operating leases 6.27 years Weighted-average discount rate – operating leases 12 % |
Schedule of maturities of lease liabilities | Year Ending 31 July Operating Leases 2022 (1) $ 1,051,964 2023 596,273 2024 607,262 2025 617,942 2026 and thereafter 1,366,633 Total lease payments $ 4,240,074 Less imputed interest (1,155,134 ) Total $ 3,084,940 Less current portion (761,415 ) Long term portion 2,323,525 |
Capital Stock (Tables)
Capital Stock (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Capital Stock | |
Schedule of fair value assumptions for stock options granted | Expected life of the options 3.125 years Expected volatility 195 % Expected dividend yield 0 % Risk-free interest rate 1.28 % Expected life of the options 3.125 years Expected volatility 194 % Expected dividend yield 0 % Risk-free interest rate 1.37 % Expected life of the options 3.125 years Expected volatility 173 % Expected dividend yield 0 % Risk-free interest rate 1.43 % Expected life of the options 3.125 years Expected volatility 127 % Expected dividend yield 0 % Risk-free interest rate 1.11 % Expected life of the options 3.125 years Expected volatility 133 % Expected dividend yield 0 % Risk-free interest rate 0.32 % Expected life of the options 2.066 years Expected volatility 116 % Expected dividend yield 0 % Risk-free interest rate 0.25 % Expected life of the options 3.125 years Expected volatility 112 % Expected dividend yield 0 % Risk-free interest rate 0.49 % Expected life of the options 1.81 years Expected volatility 101 % Expected dividend yield 0 % Risk-free interest rate 0.51 % |
Schedule of stock option activity | |
Schedule of warrants activity | Number of warrants Weighted average exercise price Outstanding at 31 July 2019 22,514,771 CAD$1.22 Exercised (165,715 ) CAD$0.73 Expired (9,933,772 ) CAD$0.89 Outstanding at 31 July 2020 12,415,284 CAD$1.49 Issued 4,800,000 USD$0.40 Outstanding at 31 July 2021 (1) 17,215,284 CAD$1.21 |
Schedule of number of warrants outstanding and exercisable | Number of warrants outstanding and exercisable Exercise price Expiry dates 11,780,134 CAD$ 1.50 17 May 2023 635,150 CAD$ 1.25 16 May 2023 4,800,000 USD$ 0.40 19 July 2025 17,215,284 CAD$ 1.21 |
Supplemental Disclosures with_2
Supplemental Disclosures with Respect to Cash Flows (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Supplemental Disclosures with Respect to Cash Flows | |
Schedule of supplemental disclosures with respect to cash flows | Year Ended 31 July 2021 2020 Cash paid during the year for interest $ - $ - Cash paid during the year for income taxes $ 582,152 $ 67,717 |
Other Agreements (Table)
Other Agreements (Table) | 12 Months Ended |
Jul. 31, 2021 | |
Other Agreements (Table) | |
Schedule of information related to the settlement agreement with SD | Total amount settled $ 590,328 Future proceeds from Inventory 90,315 Write-off of accounts receivable (92,415 ) Credit towards future Contribution Fee 25,000 Production equipment acquired 235,685 Loss from the settlement $ 331,743 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jul. 31, 2021 | |
Income taxes | |
Schedule of (benefit) expense for income taxes | 2021 2020 Current: Federal $ 2,281,497 $ 1,428,797 State 99,322 9,040 2,380,819 1,437,838 Deferred: Federal (214,352 ) (1,303,670 ) State 242 - (214,110 ) (1,303,670 ) Total expense for income taxes $ 2,166,709 $ 134,168 |
Schedule of effective rate reconciliation | 2021 2020 Net loss for the year before income tax $ (190,248 ) $ (4,464,221 ) Federal and state income tax rates 21.00 % 21.00 % Expected income tax recovery 39,951 (937,486 ) IRC 280E disallowance 1,935,581 941,288 Stock options 243,829 268,439 Impairment of consolidated investment 176,816 - Non-consolidated income - 54,147 Other permanent differences (82,301 ) 15,757 Change in estimates and others - 1,193,750 Opening deferred tax adjustments (284,621 ) (1,251,727 ) Change in tax rates 7,598 - Change in benefit not recognized 129,856 (150,000 ) Total income tax expense $ 2,166,709 $ 134,168 |
Schedule of deferred income tax assets and liabilities | As at 31 July 2021 As at 31 July 2020 Deferred income tax asset Lease liabilities $ 123,208 $ 450,139 Investments 6,648 - Deferred tax allowance (129,856 ) - Deferred income tax liability Investment in NMG Ohio LLC - (71,418 ) Property and equipment – Non right-of-use (39,603 ) (186,298 ) Property and equipment – Right-of-use (101,404 ) (426,902 ) Brand and license (57,332 ) (177,971 ) Net deferred income tax liability $ (198,339 ) $ (412,450 ) |
Schedule of reconciliation of gross unrecognized tax benefits from uncertain tax positions, excluding the impact of penalties and interest | As at 31 July 2021 As at 31 July 2020 Beginning year balance $ 966,992 $ - Increase related to prior year tax positions - 406,508 Increase related to current year tax positions - 560,484 Ending year balance $ 966,992 $ 966,992 |
Nature and Continuance of Ope_3
Nature and Continuance of Operations (Details) | 12 Months Ended |
Jul. 31, 2021 | |
DEP Nevada Inc | |
Date of acquisition or formation | 10 August 2017 |
Ownership | 100.00% |
Jurisdiction | Nevada, USA |
NMG MI 1, Inc | |
Ownership | 100.00% |
Jurisdiction | Michigan, USA |
Nevada Medical Group LLC | |
Date of acquisition or formation | 14 November 2017 |
Ownership | 100.00% |
Jurisdiction | Nevada, USA |
NMG MI C1 Inc. | |
Date of acquisition or formation | 24 June 2021 |
Ownership | 100.00% |
Jurisdiction | Michigan, USA |
NMG Long Beach LLC | |
Date of acquisition or formation | 18 December 2018 |
Ownership | 100.00% |
Jurisdiction | California, USA |
NMG Cathedral City LLC | |
Date of acquisition or formation | 4 January 2019 |
Ownership | 100.00% |
Jurisdiction | California, USA |
NMG MI P1 Inc. | |
Date of acquisition or formation | 24 June 2021 |
Ownership | 100.00% |
Jurisdiction | Michigan, USA |
Nmg San Diego LLC | |
Date of acquisition or formation | 30 January 2019 |
Ownership | 60.00% |
Jurisdiction | California, USA |
NMG OH 1, LLC | |
Date of acquisition or formation | 30 January 2020 |
Ownership | 100.00% |
Jurisdiction | Ohio, USA |
NMG Ohio LLC | |
Date of acquisition or formation | 27 April 2017 |
Ownership | 30.00% |
Jurisdiction | Ohio, USA |
Nature and Continuance of Ope_4
Nature and Continuance of Operations (Details Narrative) | 12 Months Ended | |
Jul. 31, 2021 | May 31, 2004 | |
State of incorporation | Delaware | |
Represents information related to Vocalscape, Inc. | ||
Ownership | 100.00% |
Significant Accounting Polici_4
Significant Accounting Policies (Details) | 12 Months Ended |
Jul. 31, 2021 | |
Office Equipment [Member] | |
Estimated useful lives | 7 years |
Cultivation equipment [Member] | |
Estimated useful lives | 7 years |
Production Equipment [Member] | |
Estimated useful lives | 7 years |
Kitchen equipment [Member] | |
Estimated useful lives | 7 years |
Vehicles [Member] | |
Estimated useful lives | 7 years |
Vault equipment [Member] | |
Estimated useful lives | 7 years |
Leasehold Improvements [Member] | |
Estimated Useful Life | shorter of useful life or the term of the lease |
Significant Accounting Polici_5
Significant Accounting Policies (Details Narrative) | 12 Months Ended |
Jul. 31, 2021shares | |
Dilutive options and warrants existed | 17,215,284 |
Brands and licenses acquired by NMG SD | |
Dilutive options and warrants existed | 3,200,000 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years |
Brands and licenses acquired by NMG LB and NMG OH 1 | |
Dilutive options and warrants existed | 9,855,000 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) | Jul. 31, 2021 | Jul. 31, 2020 |
Financial Instruments | ||
Cash | $ 7,374,194 | $ 1,352,130 |
Convertible loan receivable | 1,648,816 | 1,290,263 |
Total financial assets at fair value | $ 9,023,010 | $ 2,642,393 |
Financial Instruments (Details
Financial Instruments (Details Narrative) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Financial Instruments | ||
Net cash flows from operations | $ 294,965 | $ (2,310,164) |
Working capital deficit | $ 7,852,848 |
Inventory (Details)
Inventory (Details) - USD ($) | Jul. 31, 2021 | Jul. 31, 2020 |
Inventory | ||
Work in progress | $ 503,215 | $ 211,621 |
Finished goods | 1,547,493 | 959,939 |
Consumables | 885,448 | 598,277 |
Total | $ 2,936,156 | $ 1,769,837 |
Convertible loan receivable (De
Convertible loan receivable (Details Narrative) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Loan receivable | $ 1,648,816 | $ 1,290,263 |
Accrued interest income | 0 | 51,000 |
Interests receivable | $ 150,000 | $ 78,000 |
CCG | Convertible Loan Agreement | ||
Outstanding units percentage | 40.00% | |
Proceeds from fund construction | $ 1,250,000 | |
NMG [Member] | ||
Management fee (per month) | $ 6,000 | |
Percentage of monthly management fee | 66.67% | |
Loan bears interest per month | $ 6,000 |
Loan receivable (Details Narrat
Loan receivable (Details Narrative) | Jul. 31, 2021USD ($) |
Convertible loan receivable | |
Loan receivable | $ 239,834 |
Investment in NMG Ohio LLC (Det
Investment in NMG Ohio LLC (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
30% equity investment: | ||
Opening balance | $ 531,185 | $ 134,066 |
Equity-method investment change from earnings | 13,219 | 397,119 |
Total equity investment in NMG Ohio | 544,404 | 531,185 |
Loan receivable (payable) to NMG Ohio | ||
Opening balance Loan | (466,495) | 701,781 |
Advances provided to NMG Ohio | 1,120,015 | 112,869 |
Advances received from NMG Ohio | 0 | (1,252,429) |
Foreign exchange | 4,671 | (28,716) |
Transferred to NMG OH 1 and eliminated on consolidation | 233,088 | 0 |
Loan receivable (payable) to NMG Ohio | 891,279 | (466,495) |
NMG Ohio LLC | ||
30% equity investment: | ||
Opening balance | 2,630,055 | 2,630,055 |
Total equity investment in NMG Ohio | 2,630,055 | |
Loan receivable (payable) to NMG Ohio | ||
Foreign exchange | 7,919 | |
Acquisition of remaining 70% interest: | ||
Acquisition costs: Common shares issued to vendors at fair value | 297,042 | 0 |
Acquisition costs: Cash payments to vendors | 393,750 | 0 |
Total advances for remaining 70% acquisition of NMG Ohio | 3,328,766 | 2,630,055 |
Impairment loss | (58,382) | |
Acquisition of The Clubhouse Dispensary (Note 11) | (3,814,788) | 0 |
Total investment in NMG Ohio | $ 0 | $ 3,161,240 |
Investment in NMG Ohio LLC (D_2
Investment in NMG Ohio LLC (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2019 | Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 | |
Loan to NMG Ohio LLC | $ (891,279) | $ (112,869) | ||
Net revenues | $ 26,900,869 | $ 6,232,521 | ||
NMG Ohio LLC | ||||
Percentage of voting interest acquired | 100.00% | |||
Purchase of remaining ownership interest percentage | 70.00% | 70.00% | ||
Consideration in cash to be paid for the acquisition of remaining interest | $ 1,575,000 | |||
Common stock shares issued | 2,380,398 | |||
Share issue costs (in shares) | 3,173,864 | |||
Common stock shares fair value | $ 1,448,805 | |||
Cash payments | $ 1,181,250 | |||
Remaining cash payments totaling | $ 393,750 | |||
Remaining issuance of common stock shares | 793,466 | |||
Ownership percentage | 30.00% | |||
Net revenues | $ 534,971 | |||
Expenses | 490,906 | |||
Net income | 44,065 | |||
Equity pickup | $ 31,219 |
Investment in and advances to_3
Investment in and advances to GLDH (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Interest income accrued on the Note | $ 163,558 | $ 1,119,503 |
Lease Assignment Agreement payment | 536,985 | |
Foreign exchange | 4,671 | (28,716) |
GLDH | ||
Opening balance | 8,910,854 | 7,373,036 |
Share issuances | 4,092,175 | |
Share payment reduction | 0 | (793,416) |
Interest income accrued on the Note | 88,143 | 1,040,000 |
Advances for working capital | 3,030 | 2,143,609 |
Lease Assignment Agreement payment | 0 | 750,000 |
Amount transferred to Property and Equipment | 0 | (1,431,585) |
Amount transferred to Brand and Licenses | 0 | (3,585,483) |
Expensed during the year | (188,879) | (501,862) |
Total investment | 8,912,733 | 8,910,854 |
Foreign exchange | 99,585 | (175,620) |
Impairment loss | (534,165) | 0 |
Acquisition of ShowGrow Long Beach dispensary (Note 11) | (8,378,568) | 0 |
Ending balance | $ 0 | $ 8,910,854 |
Investment in and advances to_4
Investment in and advances to GLDH (Details Narrative) - USD ($) | Jul. 03, 2019 | Nov. 28, 2018 | Jul. 31, 2021 | Nov. 04, 2019 | Oct. 04, 2019 | Sep. 12, 2019 | Aug. 12, 2019 |
Warrants price per share | $ 0.57 | $ 0.90 | $ 0.90 | $ 0.66 | $ 0.66 | ||
GLDH | |||||||
Interest rate per annum | 12.00% | ||||||
Loan, face amount | $ 200,000 | ||||||
David Barakett | |||||||
Maximum consideration | $ 783,765 | ||||||
David Barakett | GLDH | |||||||
Percentage of issued and outstanding common shares | 100.00% | ||||||
Common shares of VWAP | $ 0.7439 | ||||||
USD/CAD exchange rate | 1.3296 | ||||||
Maximum number of common shares | 11,255,899 | ||||||
Maximum consideration | $ 6,297,580 | ||||||
Senior secured convertible note | $ 5,200,000 | ||||||
Interest rate per annum | 20.00% | ||||||
David Barakett | GLDH | Eligibility condition three | |||||||
Issuance of Earn Out shares | 1,125,589 | ||||||
Issuance of Earn Out shares, percentage | 10.00% | ||||||
David Barakett | GLDH | Eligibility condition two | |||||||
Issuance of Earn Out shares | 4,502,360 | ||||||
Issuance of Earn Out shares, percentage | 40.00% | ||||||
Revenue | $ 3,300,000 | ||||||
David Barakett | GLDH | Eligibility condition one | |||||||
Issuance of Earn Out shares | 5,627,950 | ||||||
Issuance of Earn Out shares, percentage | 50.00% | ||||||
Australis Capital Inc. [Member] | Loan Agreement [Member] | |||||||
USD/CAD exchange rate | 0.7518 | ||||||
Loan, face amount | $ 4,000,000 | ||||||
Warrants price per share | $ 0.50 |
Investment in and advances to_5
Investment in and advances to GLDH (Details Narrative 1) - USD ($) | Jul. 03, 2019 | Apr. 30, 2020 | Nov. 28, 2018 | Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2019 |
David Barakett | ||||||
Amount payable in common shares | $ 783,765 | |||||
Payment of consulting and advisory services | 200,000 | $ 50,000 | ||||
Payment of consulting and advisory services in subsequent to year end | $ 150,000 | |||||
GLDH | ||||||
Loan, face amount | $ 200,000 | |||||
Interest rate per annum | 12.00% | |||||
Forgive operating loan amount | $ 800,000 | |||||
GLDH | David Barakett | ||||||
Interest rate per annum | 20.00% | |||||
Amount payable in common shares | $ 6,297,580 | |||||
GLDH | Eligibility condition one | ||||||
Amount to be paid in common shares | $ 1,500,000 | |||||
Share price per share | $ 0.7439 | |||||
Maximum number of common shares | 2,681,006 | |||||
GLDH | Eligibility condition two | David Barakett | ||||||
Amount to be paid in common shares | $ 750,000 | |||||
Share price per share | $ 0.7439 | |||||
Maximum number of common shares | 1,340,502 | |||||
GLDH | Purchase Agreement | ||||||
Investment purchase price | $ 6,700,000 | |||||
Note to be applied towards the Purchase Price | $ 5,200,000 | |||||
GLDH | Type of agreement | ||||||
Interest rate per annum | 5.00% | |||||
Amount payable in common shares | $ 750,000 | |||||
Green Light District Management, LLC and GLDH (collectively referred to as "Licensor"). | ||||||
Licensor grants | 2 years | |||||
Payment to Licensor of gross receipts from sales | 3.00% | |||||
NMG San Diego LLC [Member] | ||||||
Ownership percentage | 60.00% | 60.00% | ||||
Percentage of consolidated assets liabilities of subsidiary | 100.00% | |||||
Percentage of disclosed non-controlling interest of subsidiary. | 40.00% | |||||
Information about Subsidiary. | GLDH | ||||||
Ownership percentage | 100.00% | |||||
Information about subsidiary. | GLDH | ||||||
Ownership percentage | 60.00% |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Cost: | ||
Balance | $ 5,434,606 | |
Additions | 1,159,736 | |
Balance ending | 6,594,342 | $ 5,434,606 |
Accumulated Depreciation: | ||
Balance AD | 835,402 | |
Depreciation | 1,122,742 | |
Balance AD ending | 1,700,552 | 835,402 |
Net Book Value | ||
Net Book Value: | 4,893,790 | 4,599,204 |
Office Equipment [Member] | ||
Cost: | ||
Balance | 73,310 | |
Additions | 328,261 | |
Balance ending | 401,571 | 73,310 |
Accumulated Depreciation: | ||
Balance AD | 15,844 | |
Depreciation | 33,921 | |
Balance AD ending | 49,765 | 15,844 |
Net Book Value | ||
Net Book Value | 351,806 | 57,466 |
Cultivation equipment [Member] | ||
Cost: | ||
Balance | 478,187 | |
Additions | 12,077 | |
Balance ending | 466,110 | 478,187 |
Accumulated Depreciation: | ||
Balance AD | 182,232 | |
Depreciation | 68,312 | |
Balance AD ending | 250,544 | 182,232 |
Net Book Value | ||
Net Book Value | 215,566 | 295,955 |
Production Equipment [Member] | ||
Cost: | ||
Balance | 545,723 | |
Additions | 24,989 | |
Balance ending | 570,702 | 545,723 |
Accumulated Depreciation: | ||
Balance AD | 130,421 | |
Depreciation | 79,745 | |
Balance AD ending | 210,166 | 130,421 |
Net Book Value | ||
Net Book Value | 14,389 | 19,920 |
Kitchen equipment [Member] | ||
Cost: | ||
Balance | 51,108 | |
Additions | 0 | |
Balance ending | 51,108 | 51,108 |
Accumulated Depreciation: | ||
Balance AD | 14,421 | |
Depreciation | 7,301 | |
Balance AD ending | 21,722 | 14,421 |
Net Book Value | ||
Net Book Value | 29,386 | 36,687 |
Vehicles [Member] | ||
Cost: | ||
Balance | 38,717 | |
Additions | 0 | |
Balance ending | 38,717 | 38,717 |
Accumulated Depreciation: | ||
Balance AD | 18,797 | |
Depreciation | 5,531 | |
Balance AD ending | 24,328 | 18,797 |
Net Book Value | ||
Net Book Value | 14,389 | 19,920 |
Vault equipment [Member] | ||
Cost: | ||
Balance | 2,172 | |
Additions | 8,163 | |
Balance ending | 10,335 | 2,172 |
Accumulated Depreciation: | ||
Balance AD | 897 | |
Depreciation | 893 | |
Balance AD ending | 1,790 | 897 |
Net Book Value | ||
Net Book Value | 8,545 | 1,275 |
Leasehold Improvements [Member] | ||
Cost: | ||
Balance | 4,245,389 | |
Additions | 810,410 | |
Balance ending | 5,055,799 | 4,245,389 |
Accumulated Depreciation: | ||
Balance AD | 472,790 | |
Depreciation | 669,447 | 229,485 |
Balance AD ending | 1,142,237 | 472,790 |
Net Book Value | ||
Net Book Value | 3,913,562 | 3,772,599 |
Leasehold improvements, Balance | 4,245,389 | 2,266,006 |
Right of use Assets [Member] | ||
Cost: | ||
Balance | 2,257,055 | |
Additions | 662,800 | |
Balance ending | 2,919,855 | 2,257,055 |
Accumulated Depreciation: | ||
Balance AD | 123,240 | |
Depreciation | 257,592 | |
Balance AD ending | 380,832 | 123,240 |
Net Book Value | ||
Net Book Value | 2,539,023 | $ 2,133,815 |
Leasehold improvements, Balance | $ 2,257,055 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Property and Equipment | ||
General and Administrative Expenses | $ (11,402,882) | $ 112,025 |
Depreciation | $ 453,884 | $ 266,080 |
Business Acquisition (Details)
Business Acquisition (Details) - USD ($) | Sep. 04, 2020 | Aug. 28, 2020 | Jul. 31, 2021 | Jul. 31, 2020 |
Liabilities assumed: | ||||
Goodwill | $ 5,168,902 | $ 2,635,721 | ||
The Clubhouse dispensary. | ||||
Purchase consideration (Note 8) | $ 3,814,788 | |||
Assets acquired: | ||||
Cash | 257,462 | |||
Amounts receivable | 510,367 | |||
Prepaid expenses | 4,965 | |||
Inventory | 178,898 | |||
Property and equipment | 763,951 | |||
Licenses and customer relationships | 2,710,000 | |||
Liabilities assumed: | ||||
Trade payable and accrued liabilities | (443,589) | |||
Net assets acquired | 3,982,052 | |||
Bargain purchase | (167,266) | |||
TOTAL | $ 3,814,788 | |||
ShowGrow Long Beach dispensary. | ||||
Purchase consideration (Note 8) | $ 8,378,568 | |||
Assets acquired: | ||||
Cash | 65,340 | |||
Amounts receivable | 239,834 | |||
Prepaid expenses | 15,264 | |||
Inventory | 177,930 | |||
Property and equipment | 5,402 | |||
Liabilities assumed: | ||||
Trade payable and accrued liabilities | (732,262) | |||
Income taxes payable | (423,931) | |||
Loans payable (Note 14) | (12,190) | |||
Net liabilities acquired | (664,613) | |||
Brand and licenses | 6,510,000 | |||
Goodwill | 2,533,181 | |||
TOTAL | $ 8,378,568 |
Business Acquisition (Details 1
Business Acquisition (Details 1) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Revenue | $ 26,900,869 | $ 6,232,521 |
Net income | (1,976,461) | $ (4,598,389) |
NMG Long Beach LLC | ||
Revenue | 5,940,087 | |
Net income | 283,569 | |
The Clubhouse dispensary. | ||
Revenue | 6,643,561 | |
Net income | $ 1,565,316 |
Business Acquisition (Details 2
Business Acquisition (Details 2) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Revenue | $ 26,900,869 | $ 6,232,521 |
Net loss | (1,976,461) | (4,598,389) |
Pro Forma [Member] | ||
Revenue | 27,972,106 | 16,859,485 |
Net loss | $ (1,913,199) | $ (4,238,491) |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net (Details) | 12 Months Ended |
Jul. 31, 2021USD ($) | |
Goodwill and Intangible Assets Net | |
Increase due to acquisitions | $ 2,533,181 |
Balance at July 31, 2020 | 2,635,721 |
Balance at July 31, 2021 | $ 5,168,902 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net (Details 1) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Gross carrying amount | $ 21,055,508 | $ 11,835,508 |
Accumulated amortization | (1,200,440) | (78,025) |
Net carrying amount | 19,855,068 | 11,757,483 |
Brand | ||
Gross carrying amount | 247,000 | 247,000 |
Accumulated amortization | 0 | 0 |
Net carrying amount | 247,000 | 247,000 |
Customer relationships | ||
Gross carrying amount | 90,000 | |
Accumulated amortization | (16,265) | |
Net carrying amount | $ 73,735 | |
Weighted average life (years) | 5 years | |
Licenses | ||
Gross carrying amount | $ 20,718,508 | 11,588,508 |
Accumulated amortization | (1,184,175) | (78,025) |
Net carrying amount | $ 19,534,333 | $ 11,510,483 |
Weighted average life (years) | 10 years | 10 years |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net (Details 2) | Jul. 31, 2021USD ($) |
Goodwill and Intangible Assets Net | |
2022 | $ 1,199,162 |
2023 | 1,199,162 |
2024 | 1,199,162 |
2025 | 1,199,162 |
2026 | 1,881,172 |
Thereafter | 5,687,258 |
Total | $ 11,683,068 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Goodwill and Intangible Assets Net | ||
Amortization expenses | $ 1,457,550 | $ 112,025 |
License fees | $ 7,925,000 |
Related Party Balances and Tr_3
Related Party Balances and Transactions (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Management fees | $ 405,134 | $ 463,819 |
Consulting fees | 537,760 | 565,472 |
President And Chief Executive Officer Member | ||
Management fees | 159,657 | 154,439 |
Chief Financial Officer And Director [Member] | ||
Management fees | 109,487 | 91,594 |
This member stands for former director and former president. | ||
Management fees | 65,000 | 141,665 |
This member stands for corporate secretary. | ||
Management fees | 70,990 | 63,853 |
Consulting fees | 0 | 3,044 |
This member stands for corporate secretary former Chief Executive Officer and former director. | ||
Management fees | $ 0 | $ 9,224 |
Related Party Balances and Tr_4
Related Party Balances and Transactions (Details Narrative) - USD ($) | Jul. 31, 2021 | Jul. 30, 2021 | Jul. 31, 2020 |
Due to Related Parties, Current | $ 52,074 | $ 52,937 | |
Chief Executive Officer [Member] | |||
Due to Related Parties, Current | $ 26,841 | 14,229 | |
Chief Financial Officer One [Member] | |||
Due to Related Parties, Current | 18,914 | 7,833 | |
This member stands for corporate secretary. | |||
Due to Related Parties, Current | $ 6,319 | 5,875 | |
This member stands for former director and former president. | |||
Due to Related Parties, Current | $ 25,000 |
Loan Payable (Detail)
Loan Payable (Detail) | Apr. 05, 2021 | Mar. 06, 2021 | Jul. 07, 2020 | Mar. 01, 2020 | Oct. 01, 2019 | Apr. 30, 2020 | Jan. 23, 2020 | Aug. 21, 2019 | Jul. 31, 2021 |
Expected life of the options | 1 year 9 months 21 days | 3 years 1 month 15 days | 2 years 24 days | 3 years 1 month 15 days | 3 years 1 month 15 days | 3 years 1 month 15 days | 3 years 1 month 15 days | 3 years 1 month 15 days | |
Expected volatility | 101.00% | 112.00% | 116.00% | 127.00% | 194.00% | 133.00% | 173.00% | 195.00% | |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | |
Risk-free interest rate | 0.51% | 0.00% | 0.25% | 1.11% | 1.37% | 0.32% | 1.43% | 1.28% | |
Warrants [Member] | |||||||||
Expected life of the options | 4 years | ||||||||
Expected volatility | 139.00% | ||||||||
Expected dividend yield | 0.00% | ||||||||
Risk-free interest rate | 0.55% |
Loan Payable (Details Narrative
Loan Payable (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jul. 19, 2021 | Jul. 31, 2021 | Jul. 31, 2020 | Jul. 30, 2021 | |
Warrant exercise price per share | $ 0.45 | |||
Legal fees and other fees | $ 973,594 | $ 676,935 | ||
Warrants issued for services , amount | $ 1,037,146 | |||
Warrants issued for services , shares | 4,800,000 | |||
Loans Payable, Current | $ 16,874 | 0 | $ 16,874 | |
Loans payable | $ 4,798,871 | $ 0 | ||
FG Agency Lending LLC [Member] | ||||
Loans payable | $ 6,666,667 | |||
Advance loan payble | $ 6,000,000 | |||
Initial term loan description | The Company may draw upon the remaining face amount of $4,444,444 (the “Delayed Draw Term Loan”) upon providing a 30-day request to the Agent by 1 December 2021, whereby $4,000,000 will be advanced to the Company after applying the 10% origination discount | |||
Rate of interest | 13.00% | |||
Warrants [Member] | ||||
Aggregate purchase common stock shares | 8,000,000 | |||
Acquire common stock shares | 4,800,000 | |||
Exercise price per share | $ 0.40 | |||
Escrowed shares | 3,200,000 | |||
Term Loan mature | Jul. 19, 2025 |
Operating leases (Details)
Operating leases (Details) | 12 Months Ended |
Jul. 31, 2021USD ($) | |
Operating leases | |
Operating cash flows from operating leases | $ 536,985 |
Operating leases | $ 380,832 |
Weighted-average discount rate - operating leases | 12.00% |
Weighted-average remaining lease term - operating leases | 6 years 3 months 7 days |
Operating leases (Details 1)
Operating leases (Details 1) | Jul. 31, 2021USD ($) |
Operating leases | |
2021 | $ 1,051,964 |
2022 | 596,273 |
2023 | 607,262 |
2024 | 617,942 |
2025 and thereafter | 1,366,633 |
Total lease payments | 4,240,074 |
Less imputed interest | 1,155,134 |
Total | 3,084,940 |
Less current portion | (761,415) |
Long term portion | $ 2,323,525 |
Operating leases (Details Narra
Operating leases (Details Narrative) - USD ($) | Apr. 09, 2019 | Aug. 02, 2018 | Nov. 10, 2017 | Aug. 28, 2020 | Apr. 24, 2020 | Jul. 31, 2021 | Jul. 31, 2020 |
Lease expense | $ 577,272 | ||||||
Amortization of right-of-use assets included in General and Administrative Expenses | 431,427 | ||||||
Amortization of right-of-use assets included in Cost of Sales | 145,845 | ||||||
Operating lease, right-of-use asset and increase in lease liabilities | 2,539,023 | $ 2,133,815 | |||||
Accounting Standards Update 2016-02 [Member] | |||||||
Operating lease, right-of-use asset and increase in lease liabilities | $ 1,181,143 | ||||||
Discount rate for present value of future lease payments | 12.00% | ||||||
NMG [Member] | |||||||
Description for lease option to extend | The Company has one option to extend the lease for an additional three-year term and an option to purchase the property at any point during the initial term | The rent is $4,000 per month increasing by 5% starting on 1 July 2021 and 1 July 2024. | The Company has four options to extend the lease and each option is for five years. The monthly rent was $12,500 plus common area expenses | The rent is $7,317 per month increasing by 3% every year until 10 January 2022. | The Company has three options to extend the lease and each option is for five years. The monthly rent is $15,450 per month increasing by 3% every year until 1 December 2022 | ||
Periodic rent payable, amount | $ 6,026 | $ 4,000 | $ 12,500 | $ 7,317 | $ 15,450 | ||
Operating lease, right-of-use asset and increase in lease liabilities | $ 662,800 | ||||||
Discount rate for present value of future lease payments | 12.00% |
Capital Stock (Details)
Capital Stock (Details) | Apr. 05, 2021 | Mar. 06, 2021 | Jul. 07, 2020 | Mar. 01, 2020 | Oct. 01, 2019 | Apr. 30, 2020 | Jan. 23, 2020 | Aug. 21, 2019 |
Capital Stock | ||||||||
Expected life of the options | 1 year 9 months 21 days | 3 years 1 month 15 days | 2 years 24 days | 3 years 1 month 15 days | 3 years 1 month 15 days | 3 years 1 month 15 days | 3 years 1 month 15 days | 3 years 1 month 15 days |
Expected volatility | 101.00% | 112.00% | 116.00% | 127.00% | 194.00% | 133.00% | 173.00% | 195.00% |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 0.51% | 0.00% | 0.25% | 1.11% | 1.37% | 0.32% | 1.43% | 1.28% |
Capital Stock (Details 1)
Capital Stock (Details 1) | Apr. 05, 2021$ / sharesshares | Mar. 06, 2021$ / sharesshares | Jul. 07, 2020$ / sharesshares | Oct. 01, 2019$ / sharesshares | Jul. 31, 2021CAD ($)shares | Jul. 31, 2021USD ($)$ / sharesshares | Jul. 31, 2020$ / shares | Jul. 31, 2020CAD ($)shares | Jul. 31, 2019$ / sharesshares |
Option granted | shares | 350,000 | ||||||||
Weighted average exercise price, options granted | $ 0.88 | ||||||||
Weighted average exercise price, options Cancelled | $ 0.88 | ||||||||
Share-based Payment Arrangement, Option [Member] | |||||||||
Opening balance | shares | 9,155,000 | 9,155,000 | 6,075,000 | ||||||
Option granted | shares | 250,000 | 1,250,000 | 250,000 | 1,500,000 | 1,500,000 | 5,505,000 | |||
Option cancelled | shares | (100,000) | (100,000) | (2,425,000) | ||||||
Option exercised | shares | (700,000) | (700,000) | |||||||
Closing balance | shares | 9,855,000 | 9,855,000 | 9,155,000 | 6,075,000 | |||||
Number of options, Vested and fully exercisable | shares | 7,055,000 | 7,055,000 | |||||||
Weighted average exercise price, opening balance | $ 0.70 | $ 0.62 | |||||||
Weighted average exercise price, options granted | $ 0.65 | $ 0.68 | $ 0.93 | 0.61 | 0.80 | ||||
Weighted average exercise price, options Cancelled | 0.66 | 0.73 | |||||||
Weighted average exercise price, options Exercised | 0.57 | ||||||||
Weighted average exercise price, closing balance | 0.71 | $ 0.70 | $ 0.62 | ||||||
Weighted average exercise price, Vested and fully exercisable | $ 0.70 | ||||||||
Weighted average contractual term remaining (in years) | 2 years 9 months 3 days | 2 years 9 months 3 days | 3 years 5 months 23 days | 3 years 8 months 8 days | |||||
Weighted average contractual term remaining (in years), Vested and fully exercisable | 2 years 3 months 18 days | 2 years 3 months 18 days | |||||||
Aggregate intrinsic value | $ | $ 3,750 | $ 1,675,750 | |||||||
Aggregate intrinsic value, Vested and fully exercisable | $ | $ 2,812 |
Capital Stock (Details 2)
Capital Stock (Details 2) - $ / shares | Jul. 07, 2020 | Jul. 31, 2021 | Jul. 31, 2020 |
Issued | 350,000 | ||
Warrants [Member] | |||
Opening balance | 12,415,284 | 22,514,771 | |
Issued | 4,800,000 | (165,715) | |
Exercised | (9,933,772) | ||
Closing balance | 17,215,284 | 12,415,284 | |
Weighted average exercise price, opening balance | $ 1.49 | $ 1.22 | |
Weighted average exercise price, Issued | 0.40 | 0.73 | |
Weighted average exercise price, Exercised | 0.89 | ||
Weighted average exercise price, closing balance | $ 1.21 | $ 1.49 |
Capital Stock (Details 3)
Capital Stock (Details 3) - $ / shares | 12 Months Ended | ||||
Jul. 31, 2021 | Nov. 04, 2019 | Oct. 04, 2019 | Sep. 12, 2019 | Aug. 12, 2019 | |
Warrants price per share | $ 0.57 | $ 0.90 | $ 0.90 | $ 0.66 | $ 0.66 |
Range One [Member] | |||||
Number of warrants outstanding and exercisable | 11,780,134 | ||||
Warrants price per share | $ 1.50 | ||||
Expiry dates | May 17, 2023 | ||||
Range Two [Member] | |||||
Number of warrants outstanding and exercisable | 635,150 | ||||
Warrants price per share | $ 1.25 | ||||
Expiry dates | May 16, 2023 | ||||
Range Three [Member] | |||||
Number of warrants outstanding and exercisable | 4,800,000 | ||||
Warrants price per share | $ 0.40 | ||||
Expiry dates | Jul. 19, 2025 | ||||
Range Four [Member] | |||||
Number of warrants outstanding and exercisable | 17,215,284 | ||||
Warrants price per share | $ 1.21 |
Capital Stock (Details Narrativ
Capital Stock (Details Narrative) - USD ($) | Apr. 05, 2021 | Mar. 06, 2021 | Jul. 07, 2020 | Jul. 02, 2020 | Mar. 01, 2020 | Nov. 04, 2019 | Oct. 04, 2019 | Oct. 01, 2019 | Sep. 12, 2019 | Aug. 12, 2019 | Oct. 21, 2020 | Apr. 30, 2020 | Apr. 24, 2020 | Jan. 23, 2020 | Aug. 21, 2019 | Jul. 31, 2021 | Jul. 31, 2020 | Nov. 14, 2020 | May 14, 2020 | Nov. 14, 2019 |
Capital stock, par value | $ 0.0001 | $ 0.0001 | ||||||||||||||||||
Capital stock, shares authorized | 900,000,000 | 900,000,000 | ||||||||||||||||||
Escrowed shares issued | 2,681,006 | 70,500 | ||||||||||||||||||
Escrowed shares fair value | $ 17,786 | |||||||||||||||||||
Number of warrants exercised | 22,485 | 22,727 | 38,912 | 81,591 | 700,000 | |||||||||||||||
Stock options granted | 350,000 | |||||||||||||||||||
Exercise price | $ 0.88 | |||||||||||||||||||
Proceeds from issuance of common stock | $ 19,405 | $ 313,415 | $ 90,839 | |||||||||||||||||
Exercised | $ 15,291 | $ 15,455 | $ 40,688 | $ 317,045 | ||||||||||||||||
Common stock shares issued upon exercise of warrants | 22,485 | 22,727 | 38,912 | 81,591 | 700,000 | |||||||||||||||
Warrants price per share | $ 0.90 | $ 0.90 | $ 0.66 | $ 0.66 | $ 0.57 | |||||||||||||||
Option cancelled | 350,000 | |||||||||||||||||||
Exercise price of cancelled options | $ 0.88 | |||||||||||||||||||
Acquiring remaining interest, percentage | 10.00% | 10.00% | ||||||||||||||||||
Australis Capital Inc. [Member] | ||||||||||||||||||||
Number of shares issued upon conversion of convertible debenture,value | $ 1,197,084 | |||||||||||||||||||
Number of shares issued upon conversion of convertible debenture | 2,909,091 | |||||||||||||||||||
Stock Option One [Member] | ||||||||||||||||||||
Stock options granted | 80,000 | |||||||||||||||||||
Exercise price | $ 0.57 | |||||||||||||||||||
Option cancelled | 80,000 | |||||||||||||||||||
Exercise price of cancelled options | $ 0.57 | |||||||||||||||||||
Stock Option Two [Member] | ||||||||||||||||||||
Stock options granted | 150,000 | |||||||||||||||||||
Exercise price | $ 0.61 | |||||||||||||||||||
Option cancelled | 150,000 | |||||||||||||||||||
Exercise price of cancelled options | $ 0.57 | |||||||||||||||||||
Expiring on 21 August 2024 [Member] | ||||||||||||||||||||
Option cancelled | 950,000 | |||||||||||||||||||
Employee Stock Option One [Member] | ||||||||||||||||||||
Stock options granted | 250,000 | 1,375,000 | 200,000 | |||||||||||||||||
Exercise price | $ 0.41 | $ 0.67 | $ 0.88 | |||||||||||||||||
Fair value of stock options | $ 56,287 | $ 524,432 | $ 68,645 | |||||||||||||||||
Stock-based compensation | $ 28,055 | $ 35,470 | ||||||||||||||||||
Employee Stock Option One [Member] | April 30, 2020 [Member] | ||||||||||||||||||||
Stock-based compensation | 328,055 | 137,368 | ||||||||||||||||||
Employee Stock Option One [Member] | March 01, 2020 [Member] | ||||||||||||||||||||
Stock-based compensation | 28,022 | 24,303 | ||||||||||||||||||
Employee Stock Option One [Member] | Tranches One [Member] | ||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | 25.00% | |||||||||||||||||
Employee Stock Option One [Member] | Tranches Two [Member] | ||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | 25.00% | |||||||||||||||||
Employee Stock Option One [Member] | Tranches Three [Member] | ||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | 25.00% | |||||||||||||||||
Employee Stock Option One [Member] | Tranches Four [Member] | ||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | 25.00% | |||||||||||||||||
Director [Member] | ||||||||||||||||||||
Stock options granted | 2,850,000 | |||||||||||||||||||
Exercise price | $ 0.88 | |||||||||||||||||||
Stock-based compensation | $ 314,758 | $ 977,571 | ||||||||||||||||||
Director [Member] | Tranches One [Member] | ||||||||||||||||||||
Stock option vesting period percentage | 25.00% | |||||||||||||||||||
Director [Member] | Tranches Two [Member] | ||||||||||||||||||||
Stock option vesting period percentage | 25.00% | |||||||||||||||||||
Director [Member] | Tranches Three [Member] | ||||||||||||||||||||
Stock option vesting period percentage | 25.00% | |||||||||||||||||||
Director [Member] | Tranches Four [Member] | ||||||||||||||||||||
Stock option vesting period percentage | 25.00% | |||||||||||||||||||
Share-based Payment Arrangement, Option [Member] | ||||||||||||||||||||
Stock options granted | 250,000 | 1,250,000 | 250,000 | 1,500,000 | 5,505,000 | |||||||||||||||
Exercise price | $ 0.65 | $ 0.68 | $ 0.93 | $ 0.61 | $ 0.80 | |||||||||||||||
Exercise price of cancelled options | $ 0.66 | $ 0.73 | ||||||||||||||||||
Fair value of stock options | $ 65,795 | $ 456,211 | $ 145,045 | $ 1,373,856 | ||||||||||||||||
Stock-based compensation | $ 42,840 | $ 103,570 | ||||||||||||||||||
Share-based Payment Arrangement, Option [Member] | April 05, 2021 [Member] | ||||||||||||||||||||
Stock-based compensation | 32,696 | |||||||||||||||||||
Share-based Payment Arrangement, Option [Member] | March 06, 2021 [Member] | ||||||||||||||||||||
Stock-based compensation | $ 194,729 | |||||||||||||||||||
Share-based Payment Arrangement, Option [Member] | Tranches One [Member] | ||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | 25.00% | |||||||||||||||||
Share-based Payment Arrangement, Option [Member] | Tranches Two [Member] | ||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | 25.00% | |||||||||||||||||
Share-based Payment Arrangement, Option [Member] | Tranches Three [Member] | ||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | 25.00% | |||||||||||||||||
Share-based Payment Arrangement, Option [Member] | Tranches Four [Member] | ||||||||||||||||||||
Stock option vesting period percentage | 25.00% | 25.00% | 25.00% | |||||||||||||||||
NMG [Member] | ||||||||||||||||||||
Escrowed shares issued | 70,500 | 70,500 | ||||||||||||||||||
Escrowed shares fair value | $ 19,703 | $ 15,760 | ||||||||||||||||||
Amount related to issued common shares | $ 2,752,782 | $ 297,042 | $ 1,342,175 | |||||||||||||||||
Number of common shares issued | 4,337,111 | 793,466 | 2,681,004 | |||||||||||||||||
Acquiring remaining interest, percentage | 70.00% |
Segmented Information and Maj_2
Segmented Information and Major Customers (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Revenue | $ 26,900,869 | $ 6,232,521 |
Operating income | (1,976,461) | |
Retail [Member] | ||
Revenue | 18,797,195 | |
Operating income | (2,551,396) | |
Wholesale [Member] | ||
Revenue | 8,103,674 | |
Operating income | (2,999,697) | |
All others [Member] | ||
Revenue | 0 | |
Operating income | $ (7,527,554) |
Segmented Information and Maj_3
Segmented Information and Major Customers (Details Narrative) - integer | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Segmented Information and Major Customers | ||
Number of customers | 0 | 0 |
Percentage of revenues from major customer | 10.00% | 10.00% |
Supplemental Disclosures with_3
Supplemental Disclosures with Respect to Cash Flows (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Supplemental Disclosures with Respect to Cash Flows (Details) | ||
Cash paid during the year for interest | $ 0 | $ 0 |
Cash paid during the period for income taxes | $ 582,152 | $ 67,717 |
Supplemental Disclosures with_4
Supplemental Disclosures with Respect to Cash Flows (Details Narrative) - USD ($) | Aug. 12, 2019 | Oct. 21, 2020 | Apr. 24, 2020 | Nov. 30, 2019 | Jul. 31, 2021 | Jul. 31, 2020 | Nov. 14, 2020 | May 14, 2020 | Nov. 14, 2019 |
Lease liabilities | $ 234,734 | ||||||||
Aggregate receivable amount | 1,544,957 | $ 972,705 | |||||||
Production equipment | 6,594,342 | 5,434,606 | |||||||
Net loss for the year | $ (1,976,461) | $ (4,598,389) | |||||||
Escrowed shares issued | 2,681,006 | 70,500 | |||||||
Escrowed shares fair value | $ 17,786 | ||||||||
NMG [Member] | |||||||||
Amount related to issued common shares | $ 2,752,782 | $ 297,042 | $ 1,342,175 | ||||||
Number of common shares issued | 4,337,111 | 793,466 | 2,681,004 | ||||||
Ownership percentage | 70.00% | ||||||||
Escrowed shares issued | 70,500 | 70,500 | |||||||
Escrowed shares fair value | $ 19,703 | $ 15,760 | |||||||
Settlement Agreement with SD [Member] | |||||||||
Write-off of accounts receivable | $ (92,415) | ||||||||
Aggregate receivable amount | 590,328 | ||||||||
Accounts receivable from future sale of inventory | 90,315 | ||||||||
Future credits towards the contribution fee | 25,000 | ||||||||
Production equipment | 235,685 | ||||||||
Net loss for the year | $ 331,743 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Feb. 10, 2020 | Apr. 23, 2021 | Oct. 30, 2018 | Jul. 31, 2021 |
Periodic consulting fees payable | $ 10,000 | $ 12,000 | ||
Term of contract | 5 years | |||
Increased in periodic payments of consulting fees | $ 16,500 | |||
Ownership percentage for increased in monthly services fee | 10.00% | |||
Frequency of periodic payment | monthly | monthly | ||
Lease expense (Monthly) | $ 22,500 | $ 5,000 | ||
Accrued expense | $ 200,000 | |||
Kendal [Member] | ||||
Common stock, shares issued during period | 150,000 | |||
NMG MI P1 (i) | ||||
Lease expense (Monthly) | $ 7,500 | |||
Accrued expense | $ 200,000 | |||
Common stock, shares issued during period | 400,000 | |||
Achievement description | US$200,000 of Common Shares to be issued within 30 days of NMG MI P1 receiving local and state commercial marihuana processing licenses | |||
NMG MI C1 (i) | ||||
Accrued expense | $ 75,000 | |||
Common stock, shares issued during period | 600,000 | |||
Achievement description | US$200,000 of Common Shares to be issued within 30 days of NMG MI C1 receiving local and state commercial marihuana cultivation licenses | |||
NMG MI C1 (iii) | ||||
Achievement description | US$100,000 of Common Shares to be issued within 30 days of NMG MI C1 receiving local and state commercial marihuana retail licenses | |||
NMG MI C1 (ii) | ||||
Achievement description | US$200,000 of Common Shares to be issued within 30 days of passing final inspections at the premises with respect to cultivation and receiving local operating permit to begin commercial marihuana cultivation operations at the premises | |||
NMG MI C1 (iv) | ||||
Achievement description | US$100,000 of Common Shares to be issued within 30 days of passing final inspections at the premises with respect to retail operations and receiving local operating permit to begin commercial marihuana retail operations at the premises. | |||
NMG MI P1 (ii) | ||||
Achievement description | US$200,000 of Common Shares to be issued within 30 days of passing final inspections at the premises with respect to processing and receiving local operating permit to begin commercial marihuana processing operations at the premises. |
Investment Agreement (Details N
Investment Agreement (Details Narrative) | Jul. 02, 2020shares | Oct. 30, 2018CAD ($)shares | Jul. 31, 2021USD ($) | Jul. 31, 2020USD ($) | Oct. 30, 2018USD ($) |
Advisory fee paid | $ 144,000 | $ 144,000 | |||
Term of contract | 5 years | ||||
Australis Capital Inc. [Member] | |||||
Number of units issued for unsecured convertible debentures | shares | 2,909,091 | ||||
Australis Capital (Nevada) Inc. | Commercial advisory agreement. | |||||
Periodic consulting fees payable per month | $ 10,000 | ||||
Term of contract | 5 years | ||||
Investment Agreement [Member] | Australis Capital Inc. [Member] | |||||
Number of units issued for unsecured convertible debentures | shares | 16,000,000 | ||||
Unsecured convertible debentures | $ 1,600,000 | ||||
Interest rate per annum | 8.00% | 8.00% | |||
Percentage of issued and outstanding common shares | 10.00% | 10.00% |
Other Agreements (Details)
Other Agreements (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2019 | Jul. 31, 2021 | Jul. 31, 2020 | |
Loss from the settlement | $ 0 | $ 331,743 | |
NMG Acquisition [Member] | Represents type of agreement member. | |||
Total amount settled | $ 590,328 | ||
Future proceeds from Inventory | 90,315 | ||
Write-off of accounts receivable | (92,415) | ||
Credit towards future Contribution Fee | 25,000 | ||
Production equipment acquired | 235,685 | ||
Loss from the settlement | $ 331,743 |
Other Agreements (Details Narra
Other Agreements (Details Narrative) - USD ($) | Jun. 06, 2019 | Nov. 30, 2019 | Jul. 31, 2021 | Jul. 31, 2020 |
Loss on settlement | $ 0 | $ 331,743 | ||
Represents type of agreement member. | NMG Acquisition [Member] | ||||
Loss on settlement | $ 331,743 | |||
Equipment purchase price | 235,685 | |||
Represents type of agreement member. | Represent the information about NMG. | ||||
Loss on settlement | 331,743 | |||
Equipment purchase price | $ 235,685 | |||
Information about Settlement Agreement. | ||||
Percentage of proceeds received from the sale of inventory | 100.00% | |||
Information about Brand Director Agreement. | ||||
Contribution fee | $ 5,000 | |||
Information about License Agreement. | ||||
Monthly fee payable on a quarterly basis | $ 100 | |||
Management Agreement [Member] | Satellites Dip LLC [Member] | ||||
Management fee description | Management Fee: NMG CC will be paid a management fee of 30% of Net Profits or $10,000 per month, whichever is greater | |||
Loan, face amount | $ 250,000 | |||
Debt due date | Jun. 6, 2019 | |||
Interest rate per annum | 12.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Current | ||
Federal | $ 2,281,497 | $ 1,428,797 |
State | 99,322 | 9,040 |
Total Current | 2,380,819 | 1,437,838 |
Deferred | ||
Federal | (214,352) | (1,303,670) |
State | 242 | 0 |
Total Deferred | (214,110) | (1,303,670) |
Total (benefit) expense for income taxes | $ 2,166,709 | $ 134,168 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Income taxes | ||
Net loss for the year before income tax | $ 190,248 | $ (4,464,221) |
Federal and state income tax rates | 21.00% | 21.00% |
Expected income tax recovery | $ 39,951 | $ (937,486) |
IRC 280E disallowance | 1,935,581 | 941,288 |
Stock options | 243,829 | 268,439 |
Impairment of consolidated investment | 592,747 | 0 |
Non-consolidated income | 54,147 | |
Other permanent differences | (82,301) | 15,757 |
Change in estimates and others | 0 | 1,193,750 |
Opening deferred tax adjustments | (284,621) | (1,251,727) |
Change in tax rates | 7,598 | 0 |
Change in benefit not recognized | 129,856 | (150,000) |
Total income tax expense | $ 2,166,709 | $ 134,168 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Jul. 31, 2021 | Jul. 31, 2020 |
Deferred income tax assets | ||
Lease liabilities | $ 123,208 | $ 450,139 |
Investments | 6,648 | 0 |
Deferred tax allowance | (129,856) | |
Deferred income tax liability | ||
Investment in NMG Ohio LLC | 0 | (71,418) |
Property and equipment - Non right-of-use | (39,603) | (186,298) |
Property and equipment - Right-of-use | (101,404) | (426,902) |
Brand and License | (57,332) | (177,971) |
Net deferred income tax liability | $ (198,339) | $ (412,450) |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Income taxes | ||
Beginning year balance | $ 966,992 | |
Increase related to prior year tax positions | 0 | $ 406,508 |
Increase related to current year tax positions | 0 | 560,484 |
Ending year balance | $ 966,992 | $ 966,992 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
Income taxes | ||
Deferred tax allowance | $ 129,856 | |
Net operating loss | 2,450,364 | |
Gross unrecognized tax benefits from uncertain tax positions | $ 962,423 | |
Unrecognized tax benefits effective tax rate | 0 | |
Unrecognized tax benefits interest | 24,750 | 0 |
Unrecognized tax benefits penalties | $ 13,979 | $ 0 |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) | Nov. 12, 2021USD ($) | Sep. 30, 2021shares | Aug. 16, 2021 | Jul. 21, 2021 | Sep. 21, 2021$ / sharesshares | Jul. 31, 2021$ / sharesshares | Jul. 17, 2021 | Jul. 31, 2020$ / sharesshares |
Common stock issued on achieving milestone | shares | 109,077,778 | 107,513,812 | ||||||
Common stock, deemed price | $ / shares | $ 0.0001 | $ 0.0001 | ||||||
CFO [Member] | ||||||||
Maximum incentive based cash bonus | $ 40,000 | |||||||
Cash | 10,000 | |||||||
Board Of Directors [Member] | ||||||||
Maximum incentive based cash bonus | 200,000 | |||||||
Cash | $ 5,000 | |||||||
Revenue growth | 1.00% | |||||||
CEO [Member] | ||||||||
Maximum incentive based cash bonus | $ 50,000 | |||||||
Cash | $ 10,000 | |||||||
Revenue growth | 1.00% | |||||||
Cultivation Facility [Member] | ||||||||
Area of property | 50,000 | |||||||
Processing [Member] | ||||||||
Area of property | 5,000 | |||||||
Canopy [Member] | ||||||||
Area of property | 20,000 | |||||||
Office Space [Member] | ||||||||
Area of property | 5,000 | |||||||
Second Phase Canopy [Member] | ||||||||
Area of property | 30,000 | |||||||
NMG Ohio [Member] | ||||||||
Remaining ownership percentage | 70.00% | |||||||
ownership percentage after acquisition | 100.00% | |||||||
Subsequent Event [Member] | NMG IL 1 and NMG IL 4 [Member] | ||||||||
Lottery description | The certified results are from a lottery with a pool of applicants who scored 85 % or greater in their applications. NMG IL 1 and NMG IL 4 were | |||||||
Subsequent Event [Member] | Australis [Member] | ||||||||
Restricted shares sold in private transaction | shares | 9,900,000 | |||||||
Beneficial ownership falling, percentage | 10.00% | |||||||
Subsequent Event [Member] | Lease Agreement One [Member] | ||||||||
Common stock issued on achieving milestone | shares | 238,929 | |||||||
Common stock, deemed price | $ / shares | $ 0.3938 | |||||||
Subsequent Event [Member] | Lease Agreement Two [Member] | ||||||||
Common stock issued on achieving milestone | shares | 1,304,601 | |||||||
Common stock, deemed price | $ / shares | $ 0.3937 |