Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 05, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | Healthier Choices Management Corp. | ||
Entity Central Index Key | 0000844856 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Document Transition Report | false | ||
Entity File Number | 001-36469 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 84-1070932 | ||
Entity Address, Address Line One | 3800 NORTH 28TH WAY | ||
Entity Address, City or Town | HOLLYWOOD | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 33020 | ||
City Area Code | 888 | ||
Local Phone Number | 766-5351 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | No | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 8.8 | ||
Entity Common Stock, Shares Outstanding | 309,496,867,856 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 925,475 | $ 1,525,415 |
Accounts receivable | 23,675 | 65,401 |
Inventories | 1,749,246 | 1,757,012 |
Prepaid expenses and vendor deposits | 286,065 | 269,833 |
Investment | 22,731 | 24,000 |
TOTAL CURRENT ASSETS | 3,007,192 | 3,641,661 |
Restricted Cash | 2,000,000 | 2,000,000 |
Property and equipment, net of accumulated depreciation | 230,719 | 332,290 |
Intangible assets, net of accumulated amortization | 1,248,352 | 1,923,447 |
Goodwill | 916,000 | 956,000 |
Note receivable | 304,511 | 343,387 |
Right of use asset - operating lease, net | 4,078,621 | 4,663,019 |
Other assets | 89,598 | 146,865 |
TOTAL ASSETS | 11,874,993 | 14,006,669 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 1,085,663 | 825,860 |
Contract liabilities | 21,262 | 26,823 |
Operating lease liability, current | 474,686 | 555,959 |
Current portion of line of credit | 2,000,000 | 2,000,000 |
Current portion of loan payment | 2,072,484 | 282,344 |
TOTAL CURRENT LIABILITIES | 5,654,095 | 3,690,986 |
Loan payable, net of current portion | 849,009 | 869,223 |
Operating lease liability, net of current | 3,114,521 | 3,544,729 |
TOTAL LIABILITIES | 9,617,625 | 8,104,938 |
COMMITMENTS AND CONTINGENCIES (SEE NOTE 12) | ||
STOCKHOLDERS' EQUITY | ||
Common Stock, $0.0001 par value per share, 750,000,000,000 shares authorized; 143,840,848,017 and 67,698,494,244 shares issued and outstanding as of December 31, 2020 and 2019, respectively | 14,384,084 | 6,769,849 |
Additional paid-in capital | 3,955,039 | 7,618,245 |
Accumulated deficit | (32,358,871) | (28,636,479) |
TOTAL STOCKHOLDERS' EQUITY | 2,257,368 | 5,901,731 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 11,874,993 | 14,006,669 |
Series B Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Convertible preferred stock | 0 | 20,150,116 |
TOTAL STOCKHOLDERS' EQUITY | 16,277,116 | 20,150,116 |
Series C Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Convertible preferred stock | $ 16,277,116 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
STOCKHOLDERS' EQUITY | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 750,000,000,000 | 750,000,000,000 |
Common stock, shares issued (in shares) | 143,840,848,017 | 67,698,494,244 |
Common stock, shares outstanding (in shares) | 143,840,848,017 | 67,698,494,244 |
Series B Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value (in dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, shares authorized (in shares) | 30,000 | 30,000 |
Preferred stock, shares issued (in shares) | 0 | 20,150 |
Preferred stock, shares outstanding (in shares) | 0 | 20,150 |
Series C Convertible Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value (in dollars per share) | $ 1,000 | |
Preferred stock, shares authorized (in shares) | 30,000 | |
Preferred stock, shares issued (in shares) | 20,150 | |
Preferred stock, shares outstanding (in shares) | 16,277 | |
Preferred stock, aggregate liquidation preference | $ 16.3 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
SALES: | ||
TOTAL SALES, NET | $ 13,920,745 | $ 15,114,006 |
GROSS PROFIT | 5,777,221 | 6,484,244 |
OPERATING EXPENSES: | ||
Impairment of goodwill and intangible assets | 380,646 | 481,314 |
Selling, general and administrative | 8,844,947 | 10,417,214 |
Total operating expenses | 9,225,593 | 10,898,528 |
LOSS FROM OPERATIONS | (3,448,372) | (4,414,284) |
OTHER INCOME (EXPENSE): | ||
Gain on revaluation of warrants | 0 | 1,719,816 |
Other expense, net | (100) | (2,524) |
Interest expense, net | (272,651) | (35,527) |
Loss on investment | (1,269) | (66,857) |
Total other (expense) income, net | (274,020) | 1,614,908 |
NET LOSS | $ (3,722,392) | $ (2,799,376) |
NET LOSS PER SHARE BASIC AND DILUTED (in dollars per share) | $ 0 | $ 0 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING BASIC AND DILUTED (in shares) | 90,351,540,618 | 66,977,667,455 |
Vapor [Member] | ||
SALES: | ||
TOTAL SALES, NET | $ 2,458,945 | $ 4,134,701 |
Cost of sales | 1,033,805 | 1,690,734 |
Grocery [Member] | ||
SALES: | ||
TOTAL SALES, NET | 11,461,800 | 10,979,305 |
Cost of sales | $ 7,109,719 | $ 6,939,028 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member]Series B Convertible Preferred Stock [Member] | Common Stock [Member]Series C Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member]Series B Convertible Preferred Stock [Member] | Additional Paid-In Capital [Member]Series C Convertible Preferred Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member]Series B Convertible Preferred Stock [Member] | Accumulated Deficit [Member]Series C Convertible Preferred Stock [Member] | Accumulated Deficit [Member] | Series B Convertible Preferred Stock [Member] | Series C Convertible Preferred Stock [Member] | Total | Cumulative Effect, Period of Adoption, Adjustment [Member]Common Stock [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Additional Paid-In Capital [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Accumulated Deficit [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Series B Convertible Preferred Stock [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] |
Balance at Dec. 31, 2018 | $ 6,662,351 | $ 7,348,390 | $ (25,734,088) | $ 20,150,116 | $ 8,426,769 | ||||||||||||
Balance (in shares) at Dec. 31, 2018 | 66,623,514,522 | 20,150 | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Issuance of common stock | $ 7,498 | (4,386) | 0 | $ 0 | 3,112 | ||||||||||||
Issuance of common stock (in shares) | 74,979,722 | 0 | |||||||||||||||
Issuance of awarded common stock for professional services | $ 100,000 | (100,000) | 0 | $ 0 | 0 | ||||||||||||
Issuance of awarded common stock for professional services (in shares) | 1,000,000,000 | 0 | |||||||||||||||
Stock-based compensation expense | $ 0 | 374,241 | 0 | $ 0 | 374,241 | ||||||||||||
Net loss | 0 | 0 | (2,799,376) | 0 | (2,799,376) | ||||||||||||
Balance at Dec. 31, 2019 | $ 6,769,849 | 7,618,245 | (28,636,479) | $ 20,150,116 | 5,901,731 | ||||||||||||
Balance (ASC842 [Member]) at Dec. 31, 2019 | $ 0 | $ 0 | $ (103,015) | $ 0 | $ (103,015) | ||||||||||||
Balance (in shares) at Dec. 31, 2019 | 67,698,494,244 | 20,150 | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Issuance of common stock | $ 3,741,235 | (3,741,235) | 0 | $ 0 | 0 | ||||||||||||
Issuance of common stock (in shares) | 37,412,353,772 | 0 | |||||||||||||||
Cancellation of Series B Convertible Preferred Stock | $ 0 | $ 0 | $ 0 | $ (20,150,116) | |||||||||||||
Cancellation of Series B Convertible Preferred Stock (in shares) | 0 | (20,150) | |||||||||||||||
Issuance of Series B Convertible Preferred Stock | $ 0 | $ 0 | $ 0 | $ 20,150,116 | |||||||||||||
Issuance of Series B Convertible Preferred Stock (in shares) | 0 | 20,150 | |||||||||||||||
Conversion of Preferred Stock | $ 3,873,000 | 0 | 0 | $ (3,873,000) | 0 | ||||||||||||
Conversion of Preferred Stock (in shares) | 0 | (3,873) | |||||||||||||||
Stock-based compensation expense | $ 0 | 78,029 | 0 | $ 0 | 78,029 | ||||||||||||
Net loss | 0 | (3,722,392) | 0 | (3,722,392) | |||||||||||||
Balance at Dec. 31, 2020 | $ 14,384,084 | $ 3,955,039 | $ (32,358,871) | $ 16,277,116 | $ 2,257,368 | ||||||||||||
Balance (in shares) at Dec. 31, 2020 | 105,110,848,016 | 16,277 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (3,722,392) | $ (2,799,376) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in provision for doubtful accounts | 0 | (3,002) |
Depreciation and amortization | 550,098 | 594,940 |
Loss on disposal of assets | 0 | 27,013 |
Amortization of right-of-use asset | 584,398 | 325,208 |
Loss on investment | 1,269 | 66,857 |
Stock-based compensation expense | 78,029 | 374,241 |
Impairment of goodwill and intangible assets | 380,646 | 481,314 |
Change in fair value of derivative liabilities | 0 | (1,719,816) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 41,726 | 27,202 |
Inventories | 7,766 | 107,607 |
Prepaid expenses and vendor deposits | (16,233) | 92,900 |
Contract assets | 0 | 32,400 |
Other assets | 57,269 | (2,424) |
Accounts payable and accrued liabilities | 265,552 | (475,558) |
Contract liabilities | (5,561) | (415,807) |
Lease liability | (511,481) | (248,940) |
NET CASH USED IN OPERATING ACTIVITIES | (2,288,914) | (3,535,241) |
INVESTING ACTIVITIES: | ||
Collection of note receivable | 38,876 | 184,620 |
Purchases of patent | (89,415) | (25,000) |
Purchases of property and equipment | (24,663) | (32,866) |
NET CASH PROVIDED BY INVESTING ACTIVITIES | (75,202) | 126,754 |
FINANCING ACTIVITIES: | ||
Proceeds from line of credit | 0 | 131,540 |
Principal payments on loan payable | (1,652,339) | (258,891) |
Proceeds from paycheck protection program | 876,515 | 0 |
Proceeds from loan and security agreement | 2,540,000 | 0 |
NET CASH USED IN FINANCING ACTIVITIES | 1,764,176 | (127,351) |
DECREASE IN CASH | (599,940) | (3,535,838) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - BEGINNING OF YEAR | 3,525,415 | 7,061,253 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - END OF YEAR | 2,925,475 | 3,525,415 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 314,925 | 143,901 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Issuance of common stock in connection with cashless exercise of Series A warrants | $ 0 | $ 3,000 |
ORGANIZATION, BASIS OF PRESENTA
ORGANIZATION, BASIS OF PRESENTATION, AND RECENT DEVELOPMENTS | 12 Months Ended |
Dec. 31, 2020 | |
ORGANIZATION, BASIS OF PRESENTATION, AND RECENT DEVELOPMENTS [Abstract] | |
ORGANIZATION, BASIS OF PRESENTATION, AND RECENT DEVELOPMENTS | Note 1. ORGANIZATION, BASIS OF PRESENTATION, AND RECENT DEVELOPMENTS Organization Healthier Choices Management Corp. (the “Company”) is a holding company focused on providing consumers with healthier daily choices with respect to nutrition and other lifestyle alternatives. The Company currently operates nine retail vape stores in the Southeast region of the United States, through which it offers e-liquids, vaporizers and related products. The Company also operates Ada’s Natural Market, a natural and organic grocery store, through its wholly owned subsidiary Healthy Choice Markets, Inc. Ada’s Natural Market and Paradise Health and Nutrition offers fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, deli, baked goods, dairy products, frozen foods, health & beauty products and natural household items. The Company also sells vitamins and supplements on the Amazon.com marketplace through its wholly owned subsidiary Healthy U Wholesale, Inc. The Company markets the Q-Cup™ technology under the vape segment; this patented technology is based on a small, quartz cup called the Q-Cup™, which a customer partially fills with either cannabis or CBD concentrate (approximately 50mg) purchased from a third party. The Q-Cup™ is then inserted into the Q-Cup™ Tank or Globe, that heats the cup from the outside without coming in direct contact with the solid concentrate. This Q-Cup™ technology provides significantly more efficiency and an “on the go” solution for consumers who prefer to vape concentrates either medicinally or recreationally. COVID-19 Management Update In March 2020, the outbreak of COVID-19 (coronavirus) caused by a novel strain of the coronavirus has recently been recognized as a pandemic by the World Health Organization, and the outbreak has become increasingly widespread in the United States, including in the markets in which the Company operates. The COVID-19 outbreak has had a notable impact on general economic conditions, including but not limited to the temporary closures of many businesses, “shelter in place” and other governmental regulations, reduced consumer spending due to both job losses and other effects attributable to the COVID-19, and there are many unknowns. The Company has adjusted certain aspects of the operations to protect their employees and customers while still meeting customers’ needs. While to date the Company has not been required to close any of its stores, the Company is currently operating under regular hours and we are expecting COVID-19 to have a long-term beneficial impact to the future financial results of the grocery segment. The Company continues to monitor the impact of the COVID-19 outbreak closely. The extent to which the COVID-19 outbreak will impact our operations is manageable, and there is no imminent risk on business continuity and future operation. Sourcing and Vendors. We source from multiple suppliers. These suppliers range from small independent businesses to multinational conglomerates. For the fiscal years ended December 31, 2020 and 2019, approximately 27% and 24% of our total purchases were from one vendor. Basis of Presentation and Principles of Consolidation The Company’s consolidated financial statements are prepared in accordance with GAAP. The consolidated financial statements include the accounts of all subsidiaries in which the Company holds a controlling financial interest as of the financial statement date. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Healthy Choice Markets, Inc., Healthy Choice Markets 2, LLC (“Paradise Health and Nutrition”), HCMC Intellectual Property Holdings, LLC, The Vitamin Store, LLC, Healthy U Wholesale, Inc., The Vape Store, Inc. (“Vape Store”), Vaporin, Inc. (“Vaporin”), Smoke Anywhere U.S.A., Inc. (“Smoke”), Emagine the Vape Store, LLC (“Emagine”), IVGI Acquisition, Inc., Vapormax Franchising LLC, Vaporin LLC, and Vaporin Florida, Inc. All intercompany accounts and transactions have been eliminated in consolidation. |
GOING CONCERN AND LIQUIDITY
GOING CONCERN AND LIQUIDITY | 12 Months Ended |
Dec. 31, 2020 | |
GOING CONCERN AND LIQUIDITY [Abstract] | |
GOING CONCERN AND LIQUIDITY | Note 2. GOING CONCERN AND LIQUIDITY The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern and realization of assets and satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of any uncertainties related to our going concern assessment. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The Company incurred a loss from operations of approximately $3.4 million for the year ended December 31, 2020. As of December 31, 2020, cash and cash equivalents totaled approximately $0.9 million equivalents. Subsequent to the year ended December 31, 2020, the Company entered into a million Securities Purchase Agreement . Management anticipates that its current cash, cash equivalent and cash generated from operations and cash received from the Securities Purchase Agreement will be sufficient to meet the projected operating expenses for the foreseeable future through a year and a day from the issuance of these consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reclassifications Certain amounts in the consolidated financial statements and related notes have been reclassified to conform to the current year presentation. Such reclassifications do not impact the Company's previously reported financial position or net income (loss). Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the operating decision makers, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s decision-making group are the senior executive management team. The Company and the decision-making group view the Company’s operations and manage its business as two operating segments. All long-lived assets of the Company reside in the U.S. Use of Estimates in the Preparation of the Financial Statements The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of net revenue and expenses during the reporting periods. Actual results could differ from those estimates. These estimates and assumptions include allowances, reserves and inventory, valuing equity securities and hybrid instruments, share-based payment arrangements, deferred taxes and related valuation allowances, and the valuation of the assets and liabilities acquired in business combinations. Certain of management’s estimates could be affected by external conditions, including those unique to our industry, and general economic conditions. It is possible that these external factors could have an effect on our estimates that could cause actual results to differ from our estimates. The Company re-evaluates all of its accounting estimates at least quarterly based on these conditions and records adjustments when necessary. Revenue Recognition Revenues from product sales and services rendered, net of promotional discounts, manufacturer coupons and rebates, return allowances, and sales and consumption taxes, are recorded when products are delivered, title passes to customers and collection is likely to occur. Title passes to customers at the point of sale for retail and upon delivery of products for wholesale. Return allowances, which reduce revenue, are estimated using historical experience. The Company recognizes revenue in accordance with the following five-step model: ● identify arrangements with customers; ● identify performance obligations; ● determine transaction price; ● allocate transaction price to the separate performance obligations in the arrangement, if more than one exists; and ● recognize revenue as performance obligations are satisfied. Shipping and Handling Shipping charges billed to customers are included in net sales and the related shipping and handling costs are included in cost of sales. For the years ended December 31, 2020 and 2019, shipping and handling costs of approximately $48,000 and $82,000, were included in cost of sales, respectively. Cash and Cash Equivalents The Company considers all highly liquid instruments with an original maturity of three months or less, when purchased, to be cash and cash equivalents. The majority of the Company’s cash and cash equivalents are concentrated in one large financial institution, which is in excess of Federal Deposit Insurance Corporation (FDIC) coverage. At December 31, 2020, cash in excess of FDIC limits of $250,000 per financial institution were approximately $0.6 million. The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests, as deposits are held in excess of federally insured limits. The Company’s cash equivalent at December 31, 2020 was a money market account. The Company has not experienced any losses in such accounts. Accounts Receivable, Contract Assets and Contract Liabilities Accounts receivable are claims to consideration which are unconditional; meaning no performance obligations remain for the Company and only the passage of time is necessary before collection. Contract assets are distinguished from accounts receivable as performance obligations remain before claims to consideration become unconditional. By nature of the Company’s operations, contract assets are typically not recognized. Contract liabilities are recorded when customers transfer consideration in advance of delivery of products or services, which the Company records for gift cards and loyalty reward programs. When one party to an arrangement performs before the other(s), the Company records an account receivable, contract asset or contract liability. The majority of arrangements with customers contain one performance obligation: to provide a distinct set of products or services. Most performance obligations are satisfied simultaneously as the Company exchanges products or services for customer payment. Exceptions include gift cards and loyalty rewards, for which the Company has a performance obligation to deliver products or services at a future date. As gift cards are purchased and loyalty points earned, contract liabilities are recorded until the performance obligations are satisfied through delivery of products or services or breakage based on gift card and loyalty reward program term limits. The Company’s breakage policy is twenty-four months for gift cards, twelve months for Grocery loyalty rewards, and six months for Vapor loyalty rewards. Loyalty rewards are earned at five percent on qualifying purchases and the reward functions as an allocation of transaction price from the period earned by the customer to the period the performance obligation is satisfied by the Company. As such, all contract liabilities are expected to be recognized within a twenty-four month period. Concentration of accounts receivable consist of the following: December 31, 2020 December 31, 2019 Customer A - 14% Customer B - 46% Customer C 34% 12% Due from Merchant Credit Card Processor Due from merchant credit card processor represents monies held by the Company’s credit card processors. The funds are being held by the merchant credit card processors pending satisfaction of their hold requirements and expiration of charge backs/refunds from customers. Inventories Inventories are stated at average cost. If the cost of the inventories exceeds their net realizable value, adjustments are recorded to write down excess inventory to their net realizable value. The Company’s inventories consist primarily of merchandise available for resale, such as vaporizers, electronic cigarettes, e-liquids, fresh produce, perishable grocery items and non-perishable consumable goods. Property and Equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the expected useful life of the respective asset, after the asset is placed in service. Revenue earning property and equipment includes signage, furniture and fixtures, computer hardware, appliance, cooler, displays with useful lives range from two to seven years. Leasehold improvements are amortized over life of lease. Identifiable Intangible Assets and Goodwill Identifiable intangible assets are recorded at cost, or when acquired as part of a business acquisition, at estimated fair value. Certain identifiable intangible assets are amortized over 3 and 15 years. Similar to tangible personal property and equipment, the Company periodically evaluates identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Indefinite-lived intangible assets, such as goodwill are not amortized. Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. In connection with this review, the Company also reevaluates the depreciable lives for these assets. The Company assesses recoverability by determining whether the net book value of the related asset will be recovered through the projected undiscounted future cash flows of the asset. If the Company determines that the carrying value of the asset may not be recoverable, it measures any impairment based on the projected future discounted cash flows as compared to the asset’s carrying value. The Company assesses the carrying amounts of goodwill for recoverability on at least an annual basis or when events or changes in circumstances indicate evidence of potential impairment exists, using a fair value based test. Application of the goodwill impairment test requires significant judgments including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the businesses, and the useful life over which cash flows will occur. Changes in these estimates and assumptions could materially affect the determination of fair value and/or conclusions on goodwill impairment for the Company. Our annual impairment test is conducted on September 30 of each year or more often if deemed necessary. As part of management's qualitative analysis at December 31, 2020 to determine whether any triggering events have occurred since the annual test date of September 30, 2020, which would indicate an impairment. Management determined no triggering events had occurred through December 31, 2020. Advertising The Company expenses advertising costs as incurred. For the years ended December 31, 2020 and 2019, the company incurred advertising expenses of $0.1 million and $0.2 million, respectively. Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”). Under this method, income tax expense is recognized as the amount of: (i) taxes payable or refundable for the current year and (ii) future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of available evidence it is more likely than not that some portion or all of the deferred tax assets will not be realized. Stock-Based Compensation The Company accounts for stock-based compensation for employees and directors under ASC Topic No. 718, “Compensation-Stock Compensation” (“ASC 718”). These standards define a fair value based method of accounting for stock-based compensation. In accordance with ASC 718, the cost of stock-based compensation is measured at the grant date based on the value of the award and is recognized over the vesting period. The value of the stock-based award is determined using an appropriate valuation model, whereby compensation cost is the fair value of the award as determined by the valuation model at the grant date. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. The Company recognize forfeitures as they are incur. Stock-based compensation for non-employees is measured at the grant date, is re-measured at subsequent vesting dates and reporting dates, and is amortized over the service period. Fair Value Measurements The fair value framework under FASB’s guidance requires the categorization of assets and liabilities into three levels based upon the assumptions used to measure the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3, if applicable, would generally require significant management judgment. The three levels for categorizing assets and liabilities under the fair value measurement requirements are as follows: ● Level 1: Fair value measurement of the asset or liability using observable inputs such as quoted prices in active markets for identical assets or liabilities; ● Level 2: Fair value measurement of the asset or liability using inputs other than quoted prices that are observable for the applicable asset or liability, either directly or indirectly, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and ● Level 3: Fair value measurement of the asset or liability using unobservable inputs that reflect the Company’s own assumptions regarding the applicable asset or liability. Nonfinancial assets such as goodwill, other intangible assets, and long-lived assets held and used are measured at fair value when there is an indicator of impairment and recorded at fair value when impairment is recognized or for a business combination. Sequencing Policy Under ASC 815-40-35, the Company has adopted a sequencing policy, whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving the first allocation of shares. Recently Issued Accounting Pronouncements The Company adopted Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). The amendment requires that the statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The Company adopted ASU 2016-18 in the second quarter of 2020 using the retrospective transition method to each period presented. The adoption primarily resulted in the inclusion of the restricted cash balances within the overall cash balances and a reconciliation of cash, cash equivalents and restricted cash reported on the condensed consolidated balance sheet. The adoption of this standard did not have a material impact on the condensed consolidated financial statements and is not expected to have a material impact for the foreseeable future. |
DISAGGREGATION OF REVENUES
DISAGGREGATION OF REVENUES | 12 Months Ended |
Dec. 31, 2020 | |
DISAGGREGATION OF REVENUES [Abstract] | |
DISAGGREGATION OF REVENUES | Note 4. DISAGGREGATION OF REVENUES The Company reports the following segments in accordance with management guidance: Vapor and Grocery. When the Company prepares its internal management reporting to evaluate business performance, we disaggregate revenue into the following categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. December 31, 2020 December 31, 2019 Vapor sales, net $ 2,458,945 $ 4,134,701 Grocery sales, net 11,461,800 10,979,305 Total revenue $ 13,920,745 $ 15,114,006 Retail Vapor $ 2,458,945 $ 4,134,243 Retail Grocery 10,047,437 9,326,165 Food service/restaurant 1,088,162 1,252,167 Online/e-Commerce 307,487 362,731 Wholesale Grocery 18,714 38,242 Wholesale Vapor — 458 Total revenue $ 13,920,745 $ 15,114,006 |
INVESTMENT
INVESTMENT | 12 Months Ended |
Dec. 31, 2020 | |
INVESTMENT [Abstract] | |
INVESTMENT | Note 5. INVESTMENT In 2018, the Company invested $150,000 in 85,714 common stock shares at MJ Holdings, Inc. (“MJNE”), a publicly traded company. The investment was made based on the assumption of an increase in MJNE stock due to the sales agreement with the Company. The Company recorded the investment in MJNE at fair value with changes in the fair value reported through the income statement as the stock is traded on the OTC market. Investment is classed with Level 1 of the valuation hierarchy. Fair value for the investment is based on quoted prices in active markets. Description Fair Value Measurements Using Quoted Prices in Active Market (Level 1) Mark to Market Final Investment $ 24,000 $ (1,269) $ 22,731 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2020 | |
INVENTORIES [Abstract] | |
INVENTORIES | Note 6. INVENTORIES Inventories are stated at average cost. If the cost of the inventories exceeds their market value, adjustments are recorded to write down excess inventory to its net realizable value. Throughout the year, the Company did not have independent third party counts of its inventory due to the Coronavirus (COVID-19) pandemic and recorded the write down of inventories amounting to $0.3 million and $0.5 million, approximately, in 2020 and 2019 respectively, as a result of the findings. The Company’s inventories consist primarily of merchandise available for resale. December 31, 2020 December 31, 2019 Vapor Business $ 304,614 $ 352,230 Grocery Business 1,444,632 1,404,782 Total $ 1,749,246 $ 1,757,012 |
NOTES RECEIVABLE AND OTHER INCO
NOTES RECEIVABLE AND OTHER INCOME | 12 Months Ended |
Dec. 31, 2020 | |
NOTES RECEIVABLE AND OTHER INCOME [Abstract] | |
NOTES RECEIVABLE AND OTHER INCOME | Note 7. NOTES RECEIVABLE AND OTHER INCOME On September 6, 2018, the Company entered into a secured, 36-month promissory note with VPR Brands L.P. for $582,260. The Note bears an interest rate of 7%, which payments thereunder are $4,141 weekly. The Company records all proceeds related to the interest of the Note as interest income as proceeds are received. A summary of the Note as of December 31, 2020 is presented below: Description Due Date Interest Rate Loan Amount Payments Received Remaining Balance Promissory Note 9/6/2021 7% $ 582,260 $ 277,749 $ 304,511 For the years ended December 31, 2020 and 2019, the Company had notes receivable collections of approximately $49,000 and $108,374, respectively. These collections are recorded to other income in the Consolidated Statement of Operations. |
PROPERTY & EQUIPMENT
PROPERTY & EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
PROPERTY & EQUIPMENT [Abstract] | |
PROPERTY & EQUIPMENT | Note 8. PROPERTY & EQUIPMENT Property and equipment consists of the following Year Ended December 31, 2020 2019 Displays $ 305,558 $ 305,558 Furniture and fixtures 246,496 246,496 Leasehold improvements 128,004 128,004 Computer hardware & equipment 143,082 143,863 Other 276,711 251,268 1,099,851 1,075,189 Less: accumulated depreciation and amortization (869,132) (742,899) Total property and equipment $ 230,719 $ 332,290 The Company incurred approximately $0.1 million and $0.2 million of depreciation expense for the years ended December 31, 2020 and 2019, respectively. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
GOODWILL AND INTANGIBLE ASSETS [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | Note 9. GOODWILL AND INTANGIBLE ASSETS The Company evaluated the carrying value of its goodwill by estimating the fair value of its consolidated business operations through the use of discounted cash flow models, which required management to make significant judgments as to the estimated future cash flows. The ceased retail grocery store expansion coupled with the reduction in revenue resulting from increased competition adversely impacted the Company’s projected cash flows and profits. Accordingly, the Company’s goodwill was evaluated for impairment. Our 2020 annual impairment test resulted in an impairment being recorded. As part of management's qualitative analysis at December 31, 2020 to determine whether any triggering events have occurred since the annual test date of September 30, 2020, which would indicate an impairment. Management determined not triggering events had occurred through December 31, 2020. The changes in the carrying amount of goodwill for the years ended December 31, 2020 and 2019 are as follows: December 31, 2020 December 31, 2019 Beginning balance $ 956,000 $ 1,437,314 Impairment of goodwill-retail business (40,000) (481,314) Ending balance $ 916,000 $ 956,000 In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value amount of asset may not be fully recoverable, or at least annually. The company recognizes an impairment loss when the sum of the expected undiscounted future cash flows is less than the carrying amount of the assets. The amount of impairment is measured as the difference between the asset's estimated fair value and its book value. The Company determined during the annual test for impairment that the estimated undiscounted cash flows related to the sales of the Vitamin Store were less than carrying value of the intangible assets. Based on its analysis, the Company concluded that the intangible assets was impaired and recorded an impairment charges of $0.3 million as of December 31, 2020. Intangible assets, net are as follows: December 31, 2020 Useful Lives (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships 4-5 years $ 883,000 $ (475,073) $ 407,927 Trade names 8-10 years 923,000 (441,786) 481,214 Patents 10 years 359,665 (85,641) 274,024 Non-compete 4 years 174,000 (88,813) 85,187 Intangible assets, net $ 2,339,665 $ (1,091,313) $ 1,248,352 December 31, 2019 Useful Lives (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships 4-10 years $ 1,228,000 $ (293,260) $ 934,740 Trade names 8-10 years 993,000 (354,203) 638,797 Patents 10 years 270,250 (49,027) 221,223 Non-compete 4 years 174,000 (45,313) 128,687 Intangible assets, net $ 2,665,250 $ (741,803) $ 1,923,447 Amortization expense was approximately $0.4 million for the period ended December 31, 2020 and 2019. The weighted-average remaining amortization period of the Company’s amortizable intangible assets is approximately 7 years as of December 31, 2020. The estimated future amortization of the intangible assets is as follows: For the years ending December 31, 2021 $ 385,091 2022 369,706 2023 130,841 2024 130,841 2025 125,341 Thereafter 106,532 Total $ 1,248,352 |
CONTRACT LIABILITIES
CONTRACT LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
CONTRACT LIABILITIES [Abstract] | |
CONTRACT LIABILITIES | Note 10. CONTRACT LIABILITIES The Company’s contract liabilities consist of customer deposits, gift cards and loyalty rewards, for which the Company has a performance obligation to deliver products when customers redeem balances or terms expire through breakage. The Company’s breakage policy is twenty-four months for gift cards, twelve months for Grocery loyalty rewards, and six months for Vapor loyalty rewards. As such, all contract liabilities are expected to be recognized within a twenty-four month period. A summary of the contract liabilities activity for the years ended December 31, 2020 and 2019 is presented below: Year ended December 31, 2020 2019 Beginning balance as of January1, $ 26,823 $ 442,630 Issued 53,929 48,876 Redeemed (58,263) (54,724) Breakage recognized (1,227) (1,696) Fulfillment of contracts (1) — (408,263) Ending balance as of December 31, $ 21,262 $ 26,823 (1) See Note 12. “Commitments and Contingencies” for additional information. |
LINE OF CREDIT AND DEBT
LINE OF CREDIT AND DEBT | 12 Months Ended |
Dec. 31, 2020 | |
LINE OF CREDIT AND DEBT [Abstract] | |
LINE OF CREDIT AND DEBT | Note 11. LINE OF CREDIT AND DEBT The following table provides a breakdown of the Company's debt as of December 31, 2020 is presented below: Amount Line of Credit $ 2,000,000 Term Loan Credit Agreement 800,924 Paycheck Protection Program 882,264 Loan and Security Agreement ("PPE Loan") 1,232,414 Other debt 5,891 Total Line of Credit and Debt $ 4,921,493 Line of Credit On April 13, 2018, the Company agreed to a new revolving credit line of $2.0 million and a money market account of $2.0 million (“blocked account”) with Professional Bank in Coral Gables, Florida. On September 30, 2020 Term Loan Credit Agreement On December 31, 2018, the Company entered into a Term Loan Credit Agreement (the “Credit Agreement”) with Professional Bank, a Florida banking corporation (the “Bank”), pursuant to which the Company issued a Term Note (the “Term Note”) in the principal amount of $1,400,000 in favor of the Bank. The Term Note bears interest at a rate equal to 1.5 percentage points in excess of that rate shown in the Wall Street Journal as the prime rate, adjusted annually (which was 5.50% as of December 31, 2020). The proceeds of the Term Note were used for acquisitions and for general working capital requirements. The Credit Agreement contains a customary financial covenant for a minimum debt service coverage ratio of 1.25 to 1.0. The Credit Agreement matures on December 31, 2023. In addition, the Credit Agreement provides for monthly principal payments of $22,333 commencing in January 2019 plus applicable interest, and mandatory prepayments with a portion of excess cash flow. The obligations under the Credit Agreement and the Term Note are guaranteed by the Company and its wholly owned subsidiary, Healthy U Wholesale, Inc. Principal repayments to be made during the next four years, at which time the long-term debt will be fully repaid, as follow: Year Principal Payment 2021 $ 280,000 2022 280,000 2023 240,924 Expected payments for the upcoming years $ 800,924 Plus: Payments made through 2020 599,076 Total Payments $ 1,400,000 Paycheck Protection Program On May 15, 2020, the Company was granted a loan (the “Loan”) from Customers Bank, in the aggregate amount of $876,515, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The Loan, which was in the form of a Note dated May 6, 2020 issued by the Company, matures on May 6, 2022 and bears interest at a rate of 1% per annum, payable monthly commencing on November 6, 2020. Note may be prepaid by the Borrower at any time prior to maturity with no prepayment penalties. Funds from the Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred after May 6, 2020. The Company intends to use the entire Loan amount for these qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. On December 9, 2020, the Company submitted the forgiveness application for the PPP Loan to the Small Business Bureau. Loan and Security Agreement On August 18, 2020, the Company agreed to a loan and security agreement (the “Loan”) in the aggregate of $2.7 million with Sabby Healthcare Master Fund, LTD and Sabby Volatility Warrant Master Fund, LTD (“collectively, the Lender”). Under the terms of the agreement, the loan has a non-refundable discount of 5% to the face amount of the loan and it matures on November 16, 2020. The debt obligations from the loan are secured by the assets of the Company. The proceeds received from the Loan were record as restricted cash included in non-current assets. The proceeds will be used solely for the purchase of personal protective equipment (“PPE”) and any related expenses from the transactions. The Lender is entitled to 20% of all Net profits received from the sales of the PPE goods through the maturity date. On December 29, 2021, the Company received a written notice from the Lender agreeing to allow the Company to use the remaining balance of $1.2 million from the Loan for operational purposes. The loan maturity date was extended to February 18, 2021 and it bears interest at a rate of 5% per annum, payable monthly commencing on the first day of the first month following the acceptance date of the extension. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Note 12. COMMITMENTS AND CONTINGENCIES Legal Proceedings Two lawsuits were filed against the Company and its subsidiaries in connection with alleged claimed battery defects for an electronic cigarette device. Plaintiffs claim these batteries were sold by a store of the Company’s subsidiary and have sued for an undetermined amount of damages (other than a total of $0.4 million of medical costs). The initial complaints were filed between January 2019 and April 2019. We responded to the complaints on April 2019 and May 2019, respectively. Given the lack of information presented by the plaintiffs to date, the Company is unable to predict the outcome of these matters and, at this time, cannot reasonably estimate the possible loss or range of loss with respect to these legal proceedings. On November 30, 2020, the Company filed a patent infringement lawsuit against Philip Morris USA, Inc. and Philip Morris Products S.A. in the U.S. District Court for the Northern District of Georgia. The lawsuit alleges infringement on HCMC-owned patent(s) by the Philip Morris product known and marketed as “IQOS®”. Philip Morris claims that it is currently approaching 14 million users of its IQOS® product and has reportedly invested over $3 billion in their smokeless tobacco products. From time to time the Company is involved in legal proceedings arising in the ordinary course of our business. We believe that there is no other litigation pending that is likely to have, individually or in the aggregate, a material adverse effect on our financial condition or results of operations December 31, 2020. With respect to legal costs, we record such costs as incurred. Fontem License Agreement The Company has a non-exclusive license to certain products with Fontem Ventures B.V. (“Fontem”). The Company will make quarterly license and royalty payments in perpetuity to Fontem, based on the sale of qualifying products as defined in the license agreement at a royalty rate of 5.25%. For the years ended December 31, 2020 and 2019, the Company recorded expenses of $15,000 and $40,000 as part of its cost of goods. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2020 | |
STOCKHOLDERS' EQUITY [Abstract] | |
STOCKHOLDERS' EQUITY | Note 13. STOCKHOLDERS’ EQUITY Equity Compensation Plans The Company’s 2015 Equity Incentive Plan, as amended (t he “2015 Plan” 100 11.1 as of December 31, 2020. The Company’s 2009 Equity Incentive Plan (t he “2009 Plan” non-employee directors and consultants in connection with their retention and/or continued employment by the Company. The 2009 Plan had no shares of common stock available for grant as of December 31, 2020. Preferred Stock The Company’s amended and restated articles of incorporation authorizes the Company’s Board of Directors to issue up to 1,000,000 shares of “blank check” preferred stock, having a $0.001 par value, in one or more series without stockholder approval. Each such series of preferred stock may have such number of shares, designations, preferences, voting powers, qualifications, and special or relative rights or privileges as determined by the Company’s Board of Directors. See below for details associated with the designation of the 1,000,000 shares of the Series A preferred stock. Series B Convertible Preferred Stock On August 16, 2018, the Company entered into agreements with certain holders of its Series A Warrants. The Company issued Series B Convertible Preferred Stock (the “Series B Stock”) in exchange for certain Series A Warrants. A total of 20,722 shares of Series B Stock were exchanged for 46,048,318 of Series A Warrants (including those warrants issuable pursuant to a unit purchase option). Each share of Series B Stock has a stated value equal to $1,000 and is convertible into Common Stock on a fixed basis at a conversion price of $0.00 per share. Series C Convertible Preferred Stock On November 17, 2020, the Company finalized the closing of the stock exchange with certain holders of its Series B Stock to exchange all the Series B Stock for 20,150 shares of Series C Convertible Preferred Stock (the “Series C Stock”). Each share of Series C Stock has a stated value equal to $1,000 and is convertible into Common Stock on a fixed basis at a conversion price of $0.0001 per share. Warrants October 5, 2016, the Company’s amended and restated its Series A Warrant Standstill Agreements (the "Amended Standstill Agreements") to permit each holder (each, a "Holder") to effect a "cashless" exercise of the Series A Warrants only on dates when the closing bid price used to determine the "net number" of shares to be issued upon exercise is at or above $0.00. The shares issuable upon the exercise of the Series A Warrants are calculated (1) using a Black Scholes Value of 1,517,936 per share and a closing stock bid price at or above 0.00 and (2) the Company will deliver only common stock upon exercise of the Series A Warrants. On July 27, 2020, the Company's Series A Warrants expired and the balance of outstanding warrants not exercised was 355,661 warrants. A summary of warrant activity for the years ended December 31, 2020 and 2019 is presented below: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Term (Yrs.) Outstanding at January 1, 2019 3,828,729 $ 1,522,692 1.6 Warrants exercised (6,915) 1,518,029 Outstanding at December 31, 2019 3,821,814 $ 1,517,936 0.6 Warrants exercised (3,466,153) 1,511,100 Warrants expired (355,661) - Outstanding at December 31, 2020 - $ - - Modification of share-based payment awards to officers On August 13, 2018, the Compensation Committee of the Board of Directors of the Company approved a modification of share-based payment awards to the Chief Executive Officer and Chief Operating Officer of the Company. As part of the share modification, the Chief Executive Officer and Chief Operating Officer were granted 11 billion and 8 billion shares of restricted common stock on the condition that the same number of shares from their options to purchase the Company’s common stock are forfeited. However, the shares were issued to the officers and have been reflected in the statement of stockholders’ equity. Initially, this restricted stock was schedule to vest one year following the date of issuance provided that the grantee remains an employee of the Company through the vesting date; the vesting schedule was extended and additional six months on August 12, 2019. The share modification did not have an impact on the Consolidated Statements of Operations because both of the officers’ options plans were fully amortized as of the first quarter of 2018. On August 12, 2019, the Company agreed to extend the expiration date of the vesting period for the restricted stock by six months to February 13, 2020. On August 12, 2020, the Company agreed to extend for a second time the expiration date of the vesting period for the restricted stock by six months to February 13, 2021. Restricted Stock On August 13, 2018, the Compensation Committee of the Board of Directors of the Company approved an issuance of restricted stock to the Chief Financial Officer (the "Officer") of the Company. The Officer was granted 3 billion shares of restricted common stock, which will vest one year following the date of issuance, provided that the grantee remains an employee of the Company through the vesting date; the vesting schedule was extended and additional six months on August 12, 2019. During the year ended December 31, 2019, the Company recognized stock-based compensation expense of $175,000 from the awarded shares to the Officer. On August 12, 2019, the Company agreed to extend the expiration date of the vesting period for the restricted stock by six months to February 13, 2020. On August 12, 2020, the Company agreed to extend for a second time the expiration date of the vesting period for the restricted stock by six months to February 13, 2021. Stock Options During the year ended December 31, 2020, the Company did not grant any options for the purchase of shares of its common stocks. A summary of option activity during the years ended December 31, 2020 and 2019 is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Term (Yrs.) Aggregate Intrinsic Value Outstanding, January 1, 2019 68,312,230,680 $ 0.00 8 $ - Options granted 2,300,000,000 0.00 - Options forfeited or expired (750,000,000) 0.00 - Outstanding, December 31, 2019 69,862,230,680 $ 0.00 7 $ - Options granted - 0.00 - Options forfeited or expired - 0.00 - Outstanding, December 31, 2020 69,862,230,680 $ 0.00 6 - Exercisable at December 31, 2020 69,862,230,680 $ 0.00 6 $ - During the years ended December 31, 2020 and 2019, the Company recognized stock-based compensation expense of approximately $0.1 million and $0.4 million, respectively, in connection with the amortization of stock options, net of recovery of stock-based charges for forfeited stock options. Stock-based compensation expense is included as part of selling, general and administrative expense in the accompanying consolidated statements of operations. At December 31, 2020, the amount of unamortized stock-based compensation expense on unvested stock options granted to employees, directors and consultants was approximately $$4,000, which will be amortized over a weighted average period of 0.5 years. Income (Loss) per Share Basic income (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon (a) the exercise of stock options (using the treasury stock method); (b) the conversion of Series A convertible preferred stock; (c) the exercise of warrants (using the if-converted method); (d) the vesting of restricted stock units; and (e) the conversion of convertible notes payable. Diluted income (loss) per share excludes the potential common shares, as their effect is antidilutive. The following table summarizes the Company’s securities that have been excluded from the calculation of basic and dilutive income (loss) per share as their effect would be anti-dilutive: December 31, 2020 2019 Preferred stock 162,771,153,000 201,501,142,000 Stock options 69,862,230,680 68,362,230,680 Warrants - 41,437,627,105 Total 232,633,383,680 311,300,999,785 Weighted average shares used in calculating basic and diluted net income (loss) per share are as follows: Year Ended December 31, 2020 2019 Basic 90,351,540,618 66,977,667,455 Effect of exercise stock options - - Effect of exercise warrants - - Diluted 90,351,540,618 66,977,667,455 |
LEASE
LEASE | 12 Months Ended |
Dec. 31, 2020 | |
LEASE [Abstract] | |
LEASE | Note 14. LEASE The Company has various lease agreements with terms up to 20 years, including leases of retail stores, headquarter and equipment. All the leases are classified as operating leases. The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of December 31, 2020. Maturity of Lease Liabilities by Fiscal Year 2021 $ 631,978 2022 564,478 2023 450,877 2024 342,005 2025 337,685 Thereafter 2,209,009 Total undiscounted operating lease payments $ 4,536,032 Less: Imputed interest (946,825) Present value of operating lease liabilities $ 3,589,207 Balance Sheet Classification Operating lease liability, current $ 474,686 Operating lease liability, net of current 3,114,521 Total operating lease liabilities $ 3,589,207 Other Information Weighted-average remaining lease term for operating leases 10 years Weighted-average discount rate for operating leases 4.77 % Rent expense for the years ended December 31, 2020 and 2019 was approximately $1.0 million, respectively, is included in selling, general and administrative expenses in the accompanying consolidated statement of operations. The following table represents the components of lease cost are as follows for twelve months ended December 31, 2020: December 31, 2020 Operating lease cost $ 480,314 Variable lease cost 353,887 Short-term lease cost 116,709 Total Rent Expense $ 950,910 Cash Flows Cash paid for amounts included in the present value of operating lease liabilities was $511,000 for the 2020 and was included in operating cash flows. The amortization of the right-of-use asset of $584,398 was included in operating cash flows. Supplemental balance sheet information related to our operating leases is as follows: Balance Sheet Classification January 1, 2020 December 31, 2020 Right of use asset Other assets $ 4,663,019 $ 4,078,621 Lease liability, current Current liabilities $ 555,959 $ 474,686 Lease liability, net of current Other liabilities $ 3,544,729 $ 3,114,521 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | Note 15. INCOME TAXES The Company did not have a provision for income taxes (current or deferred tax expense) for tax years ended December 31, 2020 and 2019. The following is a reconciliation of the expected tax expense (benefit) at the U.S. statutory rate to the actual tax expense (benefit) reflected in the accompanying statement of operations: Year Ended December 31, 2020 2019 U.S. federal statutory rate $ (781,704) $ (587,869) State and local taxes, net of federal benefit (132,291) (100,094) Change in valuation allowance 1,201,450 249,935 True-up & deferred adjustment 23,614 258,165 Stock based compensation 19,159 17,901 Other permanent items 935 6,664 Change in tax rate 2,429 97,731 Expired warrants (422,655) - Other 89,063 57,567 $ - $ - As of December 31, 2020 and 2019, the Company’s deferred tax assets and liabilities consisted of the effects of temporary differences attributable to the following: Year Ended December 31, 2020 2019 Deferred tax assets: NOL & AMT credit carryforward $ 13,366,483 $ 12,654,534 Inventory reserves and allowances 31,249 30,965 Accrued Expenses and Deferred Income 45,358 48,050 Charitable contribution 5,303 5,284 Stock based compensation 1,966,058 1,967,795 Net book value of fixed assets 6,574 3,978 Net book value of intangible assets 731,365 666,538 ASC 842 - Lease Accounting 32,681 29,132 Total deferred tax assets 16,185,071 15,406,276 Deferred tax liabilities: Extinguishment of Warrants - (422,655) Total deferred tax liabilities - (422,655) Net deferred tax assets 16,185,071 14,983,621 Valuation allowance (16,185,071) (14,983,621) Net deferred tax assets $ - $ - In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the positive and negative evidence available, management has determined that a valuation allowance is required at and to reduce the deferred tax assets to amounts that are more likely than not to be realized. The Company’s valuation increased by million and million for the tax years ended and , respectively. Should the factors underlying management’s analysis change, future valuation adjustments to the Company’s net deferred tax assets may be necessary. At the Company had U.S. federal and state net operating loss carryforwards (“NOLS”) of million and million, respectively. Federal NOLs of million expire beginning in 2030 through 2037 and million do not expire. State NOLs of million expire beginning in 2030 through 2037 and million do not expire. Utilization of our NOLS may be subject to an annual limitation under section 382 and similar state provisions of the Internal Revenue Code due to changes of ownership that may have occurred or that could occur in the future, as defined under the regulations. On March 27, 2020, the CARES Act was enacted in response to COVID-19 pandemic. Under ASC 740, the effects of changes in tax rates and laws are recognized in the period which the new legislation is enacted. The CARES Act made various tax law changes including among other things (i) increasing the limitation under Section 163(j) of the Internal Revenue Code of 1986, as amended (the “IRC”) for 2019 and 2020 to permit additional expensing of interest (ii) enacting a technical correction so that qualified improvement property can be immediately expensed under IRC Section 168(k), (iii) making modifications to the federal net operating loss rules including permitting federal net operating losses incurred in 2018, 2019, and 2020 to be carried back to the five preceding taxable years in order to generate a refund of previously paid income taxes and (iv) enhancing the recoverability of alternative minimum tax credits. Given the Company’s full valuation allowance position and the Company did not have taxable income in the five preceding years, the CARES Act did not have an impact on the financial statements. The Company files a federal income tax return and income tax returns in various state tax jurisdictions and the Company is generally no longer subject examinations by federal and state tax authorities for years before . |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
SEGMENT INFORMATION [Abstract] | |
SEGMENT INFORMATION | Note 16. SEGMENT INFORMATION Management determines the reportable segments based on the internal reporting used by our executives to evaluate performance and to assess where to allocate resources. The Company evaluates segment performance based on the segment gross profit before corporate expenses. Summarized below are the total net sales and segment operating profit for each reporting segment: Year Ended Net Sales Segment Gross Profit December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Vapor $ 2,458,945 $ 4,134,701 $ 1,425,140 $ 2,443,967 Grocery 11,461,800 10,979,305 4,352,081 4,040,277 Total $ 13,920,745 $ 15,114,006 5,777,221 6,484,244 Corporate expenses 9,225,593 10,898,528 Operating loss (3,448,372) (4,414,284) Corporate other income (expense), net (274,020) 1,614,908 Net loss (3,722,392) (2,799,376) For the year ended December 31, 2020 depreciation and amortization was approximately $10,000 and $0.5 million for Vapor and Grocery, respectively. For the year ended December 31, 2019 depreciation and amortization was approximately $41,000 and $0.5 million for Vapor and Grocery, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | Note 17. SUBSEQUENT EVENTS On January 14, 2021, the Compensation Committee of the Board of Directors of the Company approved an issuance of restricted stock to the Chief Executive Officer, Chief Operating Officer and Chief Financial Officer of the Company, in consideration for agreeing to a new vesting schedule for the existing awarded restricted stock. Each Officer of the Company was granted a 10% increase from the original award agreement for a total of 2.2 billion shares of restricted common stock, which will vest on December 31, 2022, provided that the grantee remains an employee of the Company through the vesting date. On January 14, 2021, the Compensation Committee of the Board of Directors of the Company approved an issuance of restricted stock to of the Company, in consideration for agreeing to a new vesting schedule for the existing awarded restricted stock. The Director of the Company was granted a 10% increase from the original award agreement for a total of 50 million shares of restricted common stock, which will vest on December 31, 2022, provided that the grantee remains an employee of the Company through the vesting date. On February 7, 2021, Healthier Choices Management Corp. (the “Company”) entered into a Securities Purchase Agreement, pursuant to which the Company sold and issued 5,000 shares of its Series D Convertible Preferred Stock (the “Preferred Stock”) to institutional investors for $1,000 per share or an aggregate subscription of $5,000,000. The Preferred Stock is currently convertible into 2,083,333,333 shares of the Company’s Common Stock at a conversion price of $0.0024 per share, with such conversion price subject to adjustment as described in the Certificate of Designation. On February 25, 2021, the Company received a written notice from Sabby Healthcare Master Fund, LTD and Sabby Volatility Warrant Master Fund, LTD (“collectively, the Lender”) agreeing to the requested extension for the term loan and security agreement (the “Loan”) that matures on November 16, 2020. The loan extension matures on March 18, 2021 and it bears interest at a rate of 5% per annum, payable monthly commencing on the first day of the first month following the acceptance date of the extension. On February 26, 2021, the Company entered into an amended and restated employment agreement (the “ Employment Agreement Amendment ”) with the Company’s President and Chief Operating Officer, Christopher Santi. Pursuant to the Employment Agreement Amendment, Mr. Santi will continue to be employed as the Company’s President and Chief Operating Officer through January 30, 2024. Mr. Santi will receive a base salary of $363,000 for 2021 and his salary will increase 10% in each subsequent year. On March 2, 2021, the Company issued a press release to provide an update on the conversions of its Series C Convertible Preferred Stock (the “Series C Stock”) and other recent stock issuances. Since January 1, 2021 to March 5, 2021, the Company Series C Stock have been 100% been converted and cancelled. In addition, 625 million stock options of the Company have been exercised into common stock and 2.25 billion shares of restricted stock has been issued pursuant to contractual agreements with the Company’s officers and directors. |
ORGANIZATION, BASIS OF PRESEN_2
ORGANIZATION, BASIS OF PRESENTATION, AND RECENT DEVELOPMENTS (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
ORGANIZATION, BASIS OF PRESENTATION, AND RECENT DEVELOPMENTS [Abstract] | |
Sourcing and Vendors | Sourcing and Vendors. We source from multiple suppliers. These suppliers range from small independent businesses to multinational conglomerates. For the fiscal years ended December 31, 2020 and 2019, approximately 27% and 24% of our total purchases were from one vendor. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The Company’s consolidated financial statements are prepared in accordance with GAAP. The consolidated financial statements include the accounts of all subsidiaries in which the Company holds a controlling financial interest as of the financial statement date. |
Principles of Consolidation | The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Healthy Choice Markets, Inc., Healthy Choice Markets 2, LLC (“Paradise Health and Nutrition”), HCMC Intellectual Property Holdings, LLC, The Vitamin Store, LLC, Healthy U Wholesale, Inc., The Vape Store, Inc. (“Vape Store”), Vaporin, Inc. (“Vaporin”), Smoke Anywhere U.S.A., Inc. (“Smoke”), Emagine the Vape Store, LLC (“Emagine”), IVGI Acquisition, Inc., Vapormax Franchising LLC, Vaporin LLC, and Vaporin Florida, Inc. All intercompany accounts and transactions have been eliminated in consolidation. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Reclassifications | Reclassifications Certain amounts in the consolidated financial statements and related notes have been reclassified to conform to the current year presentation. Such reclassifications do not impact the Company's previously reported financial position or net income (loss). |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the operating decision makers, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s decision-making group are the senior executive management team. The Company and the decision-making group view the Company’s operations and manage its business as two operating segments. All long-lived assets of the Company reside in the U.S. |
Use of Estimates in the Preparation of the Financial Statements | Use of Estimates in the Preparation of the Financial Statements The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of net revenue and expenses during the reporting periods. Actual results could differ from those estimates. These estimates and assumptions include allowances, reserves and inventory, valuing equity securities and hybrid instruments, share-based payment arrangements, deferred taxes and related valuation allowances, and the valuation of the assets and liabilities acquired in business combinations. Certain of management’s estimates could be affected by external conditions, including those unique to our industry, and general economic conditions. It is possible that these external factors could have an effect on our estimates that could cause actual results to differ from our estimates. The Company re-evaluates all of its accounting estimates at least quarterly based on these conditions and records adjustments when necessary. |
Revenue Recognition | Revenue Recognition Revenues from product sales and services rendered, net of promotional discounts, manufacturer coupons and rebates, return allowances, and sales and consumption taxes, are recorded when products are delivered, title passes to customers and collection is likely to occur. Title passes to customers at the point of sale for retail and upon delivery of products for wholesale. Return allowances, which reduce revenue, are estimated using historical experience. The Company recognizes revenue in accordance with the following five-step model: ● identify arrangements with customers; ● identify performance obligations; ● determine transaction price; ● allocate transaction price to the separate performance obligations in the arrangement, if more than one exists; and ● recognize revenue as performance obligations are satisfied. |
Shipping and Handling | Shipping and Handling Shipping charges billed to customers are included in net sales and the related shipping and handling costs are included in cost of sales. For the years ended December 31, 2020 and 2019, shipping and handling costs of approximately $48,000 and $82,000, were included in cost of sales, respectively. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid instruments with an original maturity of three months or less, when purchased, to be cash and cash equivalents. The majority of the Company’s cash and cash equivalents are concentrated in one large financial institution, which is in excess of Federal Deposit Insurance Corporation (FDIC) coverage. At December 31, 2020, cash in excess of FDIC limits of $250,000 per financial institution were approximately $0.6 million. The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests, as deposits are held in excess of federally insured limits. The Company’s cash equivalent at December 31, 2020 was a money market account. The Company has not experienced any losses in such accounts. |
Accounts Receivable, Contract Assets and Contract Liabilities | Accounts Receivable, Contract Assets and Contract Liabilities Accounts receivable are claims to consideration which are unconditional; meaning no performance obligations remain for the Company and only the passage of time is necessary before collection. Contract assets are distinguished from accounts receivable as performance obligations remain before claims to consideration become unconditional. By nature of the Company’s operations, contract assets are typically not recognized. Contract liabilities are recorded when customers transfer consideration in advance of delivery of products or services, which the Company records for gift cards and loyalty reward programs. When one party to an arrangement performs before the other(s), the Company records an account receivable, contract asset or contract liability. The majority of arrangements with customers contain one performance obligation: to provide a distinct set of products or services. Most performance obligations are satisfied simultaneously as the Company exchanges products or services for customer payment. Exceptions include gift cards and loyalty rewards, for which the Company has a performance obligation to deliver products or services at a future date. As gift cards are purchased and loyalty points earned, contract liabilities are recorded until the performance obligations are satisfied through delivery of products or services or breakage based on gift card and loyalty reward program term limits. The Company’s breakage policy is twenty-four months for gift cards, twelve months for Grocery loyalty rewards, and six months for Vapor loyalty rewards. Loyalty rewards are earned at five percent on qualifying purchases and the reward functions as an allocation of transaction price from the period earned by the customer to the period the performance obligation is satisfied by the Company. As such, all contract liabilities are expected to be recognized within a twenty-four month period. Concentration of accounts receivable consist of the following: December 31, 2020 December 31, 2019 Customer A - 14% Customer B - 46% Customer C 34% 12% |
Due from Merchant Credit Card Processor | Due from Merchant Credit Card Processor Due from merchant credit card processor represents monies held by the Company’s credit card processors. The funds are being held by the merchant credit card processors pending satisfaction of their hold requirements and expiration of charge backs/refunds from customers. |
Inventories | Inventories Inventories are stated at average cost. If the cost of the inventories exceeds their net realizable value, adjustments are recorded to write down excess inventory to their net realizable value. The Company’s inventories consist primarily of merchandise available for resale, such as vaporizers, electronic cigarettes, e-liquids, fresh produce, perishable grocery items and non-perishable consumable goods. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the expected useful life of the respective asset, after the asset is placed in service. Revenue earning property and equipment includes signage, furniture and fixtures, computer hardware, appliance, cooler, displays with useful lives range from two to seven years. Leasehold improvements are amortized over life of lease. |
Identifiable Intangible Assets and Goodwill | Identifiable Intangible Assets and Goodwill Identifiable intangible assets are recorded at cost, or when acquired as part of a business acquisition, at estimated fair value. Certain identifiable intangible assets are amortized over 3 and 15 years. Similar to tangible personal property and equipment, the Company periodically evaluates identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Indefinite-lived intangible assets, such as goodwill are not amortized. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. In connection with this review, the Company also reevaluates the depreciable lives for these assets. The Company assesses recoverability by determining whether the net book value of the related asset will be recovered through the projected undiscounted future cash flows of the asset. If the Company determines that the carrying value of the asset may not be recoverable, it measures any impairment based on the projected future discounted cash flows as compared to the asset’s carrying value. The Company assesses the carrying amounts of goodwill for recoverability on at least an annual basis or when events or changes in circumstances indicate evidence of potential impairment exists, using a fair value based test. Application of the goodwill impairment test requires significant judgments including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the businesses, and the useful life over which cash flows will occur. Changes in these estimates and assumptions could materially affect the determination of fair value and/or conclusions on goodwill impairment for the Company. Our annual impairment test is conducted on September 30 of each year or more often if deemed necessary. As part of management's qualitative analysis at December 31, 2020 to determine whether any triggering events have occurred since the annual test date of September 30, 2020, which would indicate an impairment. Management determined no triggering events had occurred through December 31, 2020. |
Advertising | Advertising The Company expenses advertising costs as incurred. For the years ended December 31, 2020 and 2019, the company incurred advertising expenses of $0.1 million and $0.2 million, respectively. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”). Under this method, income tax expense is recognized as the amount of: (i) taxes payable or refundable for the current year and (ii) future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of available evidence it is more likely than not that some portion or all of the deferred tax assets will not be realized. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation for employees and directors under ASC Topic No. 718, “Compensation-Stock Compensation” (“ASC 718”). These standards define a fair value based method of accounting for stock-based compensation. In accordance with ASC 718, the cost of stock-based compensation is measured at the grant date based on the value of the award and is recognized over the vesting period. The value of the stock-based award is determined using an appropriate valuation model, whereby compensation cost is the fair value of the award as determined by the valuation model at the grant date. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. The Company recognize forfeitures as they are incur. Stock-based compensation for non-employees is measured at the grant date, is re-measured at subsequent vesting dates and reporting dates, and is amortized over the service period. |
Fair Value Measurements | Fair Value Measurements The fair value framework under FASB’s guidance requires the categorization of assets and liabilities into three levels based upon the assumptions used to measure the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3, if applicable, would generally require significant management judgment. The three levels for categorizing assets and liabilities under the fair value measurement requirements are as follows: ● Level 1: Fair value measurement of the asset or liability using observable inputs such as quoted prices in active markets for identical assets or liabilities; ● Level 2: Fair value measurement of the asset or liability using inputs other than quoted prices that are observable for the applicable asset or liability, either directly or indirectly, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and ● Level 3: Fair value measurement of the asset or liability using unobservable inputs that reflect the Company’s own assumptions regarding the applicable asset or liability. Nonfinancial assets such as goodwill, other intangible assets, and long-lived assets held and used are measured at fair value when there is an indicator of impairment and recorded at fair value when impairment is recognized or for a business combination. |
Sequencing Policy | Sequencing Policy Under ASC 815-40-35, the Company has adopted a sequencing policy, whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving the first allocation of shares. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The Company adopted Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). The amendment requires that the statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The Company adopted ASU 2016-18 in the second quarter of 2020 using the retrospective transition method to each period presented. The adoption primarily resulted in the inclusion of the restricted cash balances within the overall cash balances and a reconciliation of cash, cash equivalents and restricted cash reported on the condensed consolidated balance sheet. The adoption of this standard did not have a material impact on the condensed consolidated financial statements and is not expected to have a material impact for the foreseeable future. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Concentration of Accounts Receivable | Concentration of accounts receivable consist of the following: December 31, 2020 December 31, 2019 Customer A - 14% Customer B - 46% Customer C 34% 12% |
DISAGGREGATION OF REVENUES (Tab
DISAGGREGATION OF REVENUES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
DISAGGREGATION OF REVENUES [Abstract] | |
Disaggregate Revenue | The Company reports the following segments in accordance with management guidance: Vapor and Grocery. When the Company prepares its internal management reporting to evaluate business performance, we disaggregate revenue into the following categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. December 31, 2020 December 31, 2019 Vapor sales, net $ 2,458,945 $ 4,134,701 Grocery sales, net 11,461,800 10,979,305 Total revenue $ 13,920,745 $ 15,114,006 Retail Vapor $ 2,458,945 $ 4,134,243 Retail Grocery 10,047,437 9,326,165 Food service/restaurant 1,088,162 1,252,167 Online/e-Commerce 307,487 362,731 Wholesale Grocery 18,714 38,242 Wholesale Vapor — 458 Total revenue $ 13,920,745 $ 15,114,006 |
INVESTMENT (Tables)
INVESTMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
INVESTMENT [Abstract] | |
Fair Value of Investment | In 2018, the Company invested $150,000 in 85,714 common stock shares at MJ Holdings, Inc. (“MJNE”), a publicly traded company. The investment was made based on the assumption of an increase in MJNE stock due to the sales agreement with the Company. The Company recorded the investment in MJNE at fair value with changes in the fair value reported through the income statement as the stock is traded on the OTC market. Investment is classed with Level 1 of the valuation hierarchy. Fair value for the investment is based on quoted prices in active markets. Description Fair Value Measurements Using Quoted Prices in Active Market (Level 1) Mark to Market Final Investment $ 24,000 $ (1,269) $ 22,731 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
INVENTORIES [Abstract] | |
Inventories | Inventories are stated at average cost. If the cost of the inventories exceeds their market value, adjustments are recorded to write down excess inventory to its net realizable value. Throughout the year, the Company did not have independent third party counts of its inventory due to the Coronavirus (COVID-19) pandemic and recorded the write down of inventories amounting to $0.3 million and $0.5 million, approximately, in 2020 and 2019 respectively, as a result of the findings. The Company’s inventories consist primarily of merchandise available for resale. December 31, 2020 December 31, 2019 Vapor Business $ 304,614 $ 352,230 Grocery Business 1,444,632 1,404,782 Total $ 1,749,246 $ 1,757,012 |
NOTES RECEIVABLE AND OTHER IN_2
NOTES RECEIVABLE AND OTHER INCOME (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
NOTES RECEIVABLE AND OTHER INCOME [Abstract] | |
Summary of Notes | A summary of the Note as of December 31, 2020 is presented below: Description Due Date Interest Rate Loan Amount Payments Received Remaining Balance Promissory Note 9/6/2021 7% $ 582,260 $ 277,749 $ 304,511 |
PROPERTY & EQUIPMENT (Tables)
PROPERTY & EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
PROPERTY & EQUIPMENT [Abstract] | |
Property and Equipment | Property and equipment consists of the following Year Ended December 31, 2020 2019 Displays $ 305,558 $ 305,558 Furniture and fixtures 246,496 246,496 Leasehold improvements 128,004 128,004 Computer hardware & equipment 143,082 143,863 Other 276,711 251,268 1,099,851 1,075,189 Less: accumulated depreciation and amortization (869,132) (742,899) Total property and equipment $ 230,719 $ 332,290 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
GOODWILL AND INTANGIBLE ASSETS [Abstract] | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2020 and 2019 are as follows: December 31, 2020 December 31, 2019 Beginning balance $ 956,000 $ 1,437,314 Impairment of goodwill-retail business (40,000) (481,314) Ending balance $ 916,000 $ 956,000 |
Intangible Assets, Net | In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value amount of asset may not be fully recoverable, or at least annually. The company recognizes an impairment loss when the sum of the expected undiscounted future cash flows is less than the carrying amount of the assets. The amount of impairment is measured as the difference between the asset's estimated fair value and its book value. The Company determined during the annual test for impairment that the estimated undiscounted cash flows related to the sales of the Vitamin Store were less than carrying value of the intangible assets. Based on its analysis, the Company concluded that the intangible assets was impaired and recorded an impairment charges of $0.3 million as of December 31, 2020. Intangible assets, net are as follows: December 31, 2020 Useful Lives (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships 4-5 years $ 883,000 $ (475,073) $ 407,927 Trade names 8-10 years 923,000 (441,786) 481,214 Patents 10 years 359,665 (85,641) 274,024 Non-compete 4 years 174,000 (88,813) 85,187 Intangible assets, net $ 2,339,665 $ (1,091,313) $ 1,248,352 December 31, 2019 Useful Lives (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships 4-10 years $ 1,228,000 $ (293,260) $ 934,740 Trade names 8-10 years 993,000 (354,203) 638,797 Patents 10 years 270,250 (49,027) 221,223 Non-compete 4 years 174,000 (45,313) 128,687 Intangible assets, net $ 2,665,250 $ (741,803) $ 1,923,447 |
Future Annual Estimated Amortization Expense | The weighted-average remaining amortization period of the Company’s amortizable intangible assets is approximately 7 years as of December 31, 2020. The estimated future amortization of the intangible assets is as follows: For the years ending December 31, 2021 $ 385,091 2022 369,706 2023 130,841 2024 130,841 2025 125,341 Thereafter 106,532 Total $ 1,248,352 |
CONTRACT LIABILITIES (Tables)
CONTRACT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
CONTRACT LIABILITIES [Abstract] | |
Contract Liabilities Activity | A summary of the contract liabilities activity for the years ended December 31, 2020 and 2019 is presented below: Year ended December 31, 2020 2019 Beginning balance as of January1, $ 26,823 $ 442,630 Issued 53,929 48,876 Redeemed (58,263) (54,724) Breakage recognized (1,227) (1,696) Fulfillment of contracts (1) — (408,263) Ending balance as of December 31, $ 21,262 $ 26,823 (1) See Note 12. “Commitments and Contingencies” for additional information. |
LINE OF CREDIT AND DEBT (Tables
LINE OF CREDIT AND DEBT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
LINE OF CREDIT AND DEBT [Abstract] | |
Breakdown of Debt | The following table provides a breakdown of the Company's debt as of December 31, 2020 is presented below: Amount Line of Credit $ 2,000,000 Term Loan Credit Agreement 800,924 Paycheck Protection Program 882,264 Loan and Security Agreement ("PPE Loan") 1,232,414 Other debt 5,891 Total Line of Credit and Debt $ 4,921,493 |
Principal Repayments of Long-Term Debt | Principal repayments to be made during the next four years, at which time the long-term debt will be fully repaid, as follow: Year Principal Payment 2021 $ 280,000 2022 280,000 2023 240,924 Expected payments for the upcoming years $ 800,924 Plus: Payments made through 2020 599,076 Total Payments $ 1,400,000 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
STOCKHOLDERS' EQUITY [Abstract] | |
Warrant Activity | A summary of warrant activity for the years ended December 31, 2020 and 2019 is presented below: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Term (Yrs.) Outstanding at January 1, 2019 3,828,729 $ 1,522,692 1.6 Warrants exercised (6,915) 1,518,029 Outstanding at December 31, 2019 3,821,814 $ 1,517,936 0.6 Warrants exercised (3,466,153) 1,511,100 Warrants expired (355,661) - Outstanding at December 31, 2020 - $ - - |
Summary of Option Activity | A summary of option activity during the years ended December 31, 2020 and 2019 is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Term (Yrs.) Aggregate Intrinsic Value Outstanding, January 1, 2019 68,312,230,680 $ 0.00 8 $ - Options granted 2,300,000,000 0.00 - Options forfeited or expired (750,000,000) 0.00 - Outstanding, December 31, 2019 69,862,230,680 $ 0.00 7 $ - Options granted - 0.00 - Options forfeited or expired - 0.00 - Outstanding, December 31, 2020 69,862,230,680 $ 0.00 6 - Exercisable at December 31, 2020 69,862,230,680 $ 0.00 6 $ - |
Securities Excluded from Calculation of Basic and Dilutive Income (loss) per Share | Income (Loss) per Share Basic income (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon (a) the exercise of stock options (using the treasury stock method); (b) the conversion of Series A convertible preferred stock; (c) the exercise of warrants (using the if-converted method); (d) the vesting of restricted stock units; and (e) the conversion of convertible notes payable. Diluted income (loss) per share excludes the potential common shares, as their effect is antidilutive. The following table summarizes the Company’s securities that have been excluded from the calculation of basic and dilutive income (loss) per share as their effect would be anti-dilutive: December 31, 2020 2019 Preferred stock 162,771,153,000 201,501,142,000 Stock options 69,862,230,680 68,362,230,680 Warrants - 41,437,627,105 Total 232,633,383,680 311,300,999,785 |
Weighted Average Shares Used in Calculating Basic and Diluted net Income (Loss) per Share | Weighted average shares used in calculating basic and diluted net income (loss) per share are as follows: Year Ended December 31, 2020 2019 Basic 90,351,540,618 66,977,667,455 Effect of exercise stock options - - Effect of exercise warrants - - Diluted 90,351,540,618 66,977,667,455 |
LEASE (Tables)
LEASE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
LEASE [Abstract] | |
Maturity of Lease Liabilities | The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of December 31, 2020. Maturity of Lease Liabilities by Fiscal Year 2021 $ 631,978 2022 564,478 2023 450,877 2024 342,005 2025 337,685 Thereafter 2,209,009 Total undiscounted operating lease payments $ 4,536,032 Less: Imputed interest (946,825) Present value of operating lease liabilities $ 3,589,207 |
Balance Sheet Classification and Other Information | Balance Sheet Classification Operating lease liability, current $ 474,686 Operating lease liability, net of current 3,114,521 Total operating lease liabilities $ 3,589,207 Other Information Weighted-average remaining lease term for operating leases 10 years Weighted-average discount rate for operating leases 4.77 % |
Components of Lease Cost | Rent expense for the years ended December 31, 2020 and 2019 was approximately $1.0 million, respectively, is included in selling, general and administrative expenses in the accompanying consolidated statement of operations. The following table represents the components of lease cost are as follows for twelve months ended December 31, 2020: December 31, 2020 Operating lease cost $ 480,314 Variable lease cost 353,887 Short-term lease cost 116,709 Total Rent Expense $ 950,910 |
Supplemental Balance Sheet Information Related to Operating Leases | Supplemental balance sheet information related to our operating leases is as follows: Balance Sheet Classification January 1, 2020 December 31, 2020 Right of use asset Other assets $ 4,663,019 $ 4,078,621 Lease liability, current Current liabilities $ 555,959 $ 474,686 Lease liability, net of current Other liabilities $ 3,544,729 $ 3,114,521 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES [Abstract] | |
Reconciliation of Expected Tax Expense (Benefit) | The Company did not have a provision for income taxes (current or deferred tax expense) for tax years ended December 31, 2020 and 2019. The following is a reconciliation of the expected tax expense (benefit) at the U.S. statutory rate to the actual tax expense (benefit) reflected in the accompanying statement of operations: Year Ended December 31, 2020 2019 U.S. federal statutory rate $ (781,704) $ (587,869) State and local taxes, net of federal benefit (132,291) (100,094) Change in valuation allowance 1,201,450 249,935 True-up & deferred adjustment 23,614 258,165 Stock based compensation 19,159 17,901 Other permanent items 935 6,664 Change in tax rate 2,429 97,731 Expired warrants (422,655) - Other 89,063 57,567 $ - $ - |
Deferred Tax Assets and Liabilities | As of December 31, 2020 and 2019, the Company’s deferred tax assets and liabilities consisted of the effects of temporary differences attributable to the following: Year Ended December 31, 2020 2019 Deferred tax assets: NOL & AMT credit carryforward $ 13,366,483 $ 12,654,534 Inventory reserves and allowances 31,249 30,965 Accrued Expenses and Deferred Income 45,358 48,050 Charitable contribution 5,303 5,284 Stock based compensation 1,966,058 1,967,795 Net book value of fixed assets 6,574 3,978 Net book value of intangible assets 731,365 666,538 ASC 842 - Lease Accounting 32,681 29,132 Total deferred tax assets 16,185,071 15,406,276 Deferred tax liabilities: Extinguishment of Warrants - (422,655) Total deferred tax liabilities - (422,655) Net deferred tax assets 16,185,071 14,983,621 Valuation allowance (16,185,071) (14,983,621) Net deferred tax assets $ - $ - |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
SEGMENT INFORMATION [Abstract] | |
Summary of Reporting Segment | Summarized below are the total net sales and segment operating profit for each reporting segment: Year Ended Net Sales Segment Gross Profit December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Vapor $ 2,458,945 $ 4,134,701 $ 1,425,140 $ 2,443,967 Grocery 11,461,800 10,979,305 4,352,081 4,040,277 Total $ 13,920,745 $ 15,114,006 5,777,221 6,484,244 Corporate expenses 9,225,593 10,898,528 Operating loss (3,448,372) (4,414,284) Corporate other income (expense), net (274,020) 1,614,908 Net loss (3,722,392) (2,799,376) |
ORGANIZATION, BASIS OF PRESEN_3
ORGANIZATION, BASIS OF PRESENTATION, AND RECENT DEVELOPMENTS (Details) | 12 Months Ended | |
Dec. 31, 2020RetailStoresVendor | Dec. 31, 2019 | |
ORGANIZATION, BASIS OF PRESENTATION, AND RECENT DEVELOPMENTS [Abstract] | ||
Number of operating retail vape stores | RetailStores | 9 | |
Sources and Vendors [Abstract] | ||
Number of vendor | Vendor | 1 | |
Total Purchases [Member] | ||
Sources and Vendors [Abstract] | ||
Concentration risk percentage | 27.00% | 24.00% |
GOING CONCERN AND LIQUIDITY (De
GOING CONCERN AND LIQUIDITY (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Feb. 07, 2021 | |
Going Concern [Abstract] | |||
Loss from operations | $ (3,448,372) | $ (4,414,284) | |
Cash and cash equivalents | $ 925,475 | $ 1,525,415 | |
Subsequent Event [Member] | Securities Purchase Agreement [Member] | |||
Going Concern [Abstract] | |||
Securities purchase agreement | $ 5,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Segment Reporting (Details) | 12 Months Ended |
Dec. 31, 2020Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Shipping and Handling (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Shipping and Handling Costs [Abstract] | ||
Shipping and handling costs | $ 48,000 | $ 82,000 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Cash and Cash Equivalents (Details) | Dec. 31, 2020USD ($) |
Cash and Cash Equivalents [Abstract] | |
FDIC insured amount | $ 250,000 |
Total Cash in excess of FDIC limits of $250,000 | $ 550,000 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Accounts Receivable, Contract Assets and Contract Liabilities (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts Receivable, Contract Assets and Contract Liabilities [Abstract] | ||
Loyalty rewards earned percentage | 5.00% | |
Contract liabilities expected recognition period | 24 months | |
Customer A [Member] | Accounts Receivable [Member] | ||
Customers Balances in Excess of 10% of Total Accounts Receivable [Abstract] | ||
Concentration risk percentage | 0.00% | 14.00% |
Customer B [Member] | Accounts Receivable [Member] | ||
Customers Balances in Excess of 10% of Total Accounts Receivable [Abstract] | ||
Concentration risk percentage | 0.00% | 46.00% |
Customer C [Member] | Accounts Receivable [Member] | ||
Customers Balances in Excess of 10% of Total Accounts Receivable [Abstract] | ||
Concentration risk percentage | 34.00% | 12.00% |
Gift Cards [Member] | ||
Accounts Receivable, Contract Assets and Contract Liabilities [Abstract] | ||
Breakage policy period | 24 months | |
Grocery Loyalty Rewards [Member] | ||
Accounts Receivable, Contract Assets and Contract Liabilities [Abstract] | ||
Breakage policy period | 12 months | |
Vapor Loyalty Rewards [Member] | ||
Accounts Receivable, Contract Assets and Contract Liabilities [Abstract] | ||
Breakage policy period | 6 months |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Minimum [Member] | |
Property, Plant and Equipment [Abstract] | |
Expected useful life | 2 years |
Maximum [Member] | |
Property, Plant and Equipment [Abstract] | |
Expected useful life | 7 years |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Identifiable Intangible Assets and Goodwill (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Minimum [Member] | |
Identifiable Intangible Assets and Goodwill [Abstract] | |
Amortization period | 3 years |
Maximum [Member] | |
Identifiable Intangible Assets and Goodwill [Abstract] | |
Amortization period | 15 years |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Advertising (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Advertising [Abstract] | ||
Advertising expenses | $ 0.1 | $ 0.2 |
DISAGGREGATION OF REVENUES (Det
DISAGGREGATION OF REVENUES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Abstract] | ||
Revenue | $ 13,920,745 | $ 15,114,006 |
Retail Vapor [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 2,458,945 | 4,134,243 |
Retail Grocery [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 10,047,437 | 9,326,165 |
Food Service/Restaurant [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 1,088,162 | 1,252,167 |
Online/eCommerce [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 307,487 | 362,731 |
Wholesale Grocery [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 18,714 | 38,242 |
Wholesale Vapor [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 0 | 458 |
Vapor Sales, Net [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | 2,458,945 | 4,134,701 |
Grocery Sales, Net [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenue | $ 11,461,800 | $ 10,979,305 |
INVESTMENT (Details)
INVESTMENT (Details) | 12 Months Ended |
Dec. 31, 2018USD ($)shares | |
Investment at Fair Value [Abstract] | |
Investment cost | $ 150,000 |
Investment of common stock at MJ Holdings, Inc. (in shares) | shares | 85,714 |
Investment | $ 22,731 |
Mark to Market [Member] | |
Investment at Fair Value [Abstract] | |
Investment | (1,269) |
Fair Value Measurements Using Quoted Prices in Active Market (Level 1) [Member] | |
Investment at Fair Value [Abstract] | |
Investment | $ 24,000 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Inventories [Abstract] | ||
Total | $ 1,749,246 | $ 1,757,012 |
Third Party [Member] | ||
Inventories [Abstract] | ||
Inventory write down | 340,905 | 525,424 |
Vapor Business [Member] | ||
Inventories [Abstract] | ||
Total | 304,614 | 352,230 |
Grocery Business [Member] | ||
Inventories [Abstract] | ||
Total | $ 1,444,632 | $ 1,404,782 |
NOTES RECEIVABLE AND OTHER IN_3
NOTES RECEIVABLE AND OTHER INCOME (Details) - USD ($) | Sep. 06, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables with Imputed Interest [Abstract] | |||
Payments received | $ 38,876 | $ 184,620 | |
Interest income | $ 49,000 | $ 108,374 | |
Promissory Note [Member] | |||
Receivables with Imputed Interest [Abstract] | |||
Payment term | 36 months | ||
Due date | Sep. 6, 2021 | ||
Interest rate | 7.00% | 7.00% | |
Loan amount | $ 582,260 | $ 582,260 | |
Payments received | $ 4,141 | 277,749 | |
Remaining balance | $ 304,511 |
PROPERTY & EQUIPMENT (Details)
PROPERTY & EQUIPMENT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property and equipment [Abstract] | ||
Property plant and equipment, gross | $ 1,099,851 | $ 1,075,189 |
Less: accumulated depreciation and amortization | (869,132) | (742,899) |
Total property and equipment | 230,719 | 332,290 |
Depreciation expense | 100,000 | 200,000 |
Displays [Member] | ||
Property and equipment [Abstract] | ||
Property plant and equipment, gross | 305,558 | 305,558 |
Furniture and Fixtures [Member] | ||
Property and equipment [Abstract] | ||
Property plant and equipment, gross | 246,496 | 246,496 |
Leasehold Improvements [Member] | ||
Property and equipment [Abstract] | ||
Property plant and equipment, gross | 128,004 | 128,004 |
Computer Hardware & Equipment [Member] | ||
Property and equipment [Abstract] | ||
Property plant and equipment, gross | 143,082 | 143,863 |
Other [Member] | ||
Property and equipment [Abstract] | ||
Property plant and equipment, gross | $ 276,711 | $ 251,268 |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, Changes in Carrying Amount (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
GOODWILL AND INTANGIBLE ASSETS [Abstract] | ||
Beginning balance | $ 956,000 | $ 1,437,314 |
Impairment of goodwill-retail business | (40,000) | (481,314) |
Ending balance | $ 916,000 | $ 956,000 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS, Intangible Assets, Net (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets | $ 340,646 | |
Intangible Assets, Net [Abstract] | ||
Gross carrying amount | 2,339,665 | $ 2,665,250 |
Accumulated amortization | (1,091,313) | (741,803) |
Net carrying amount | 1,248,352 | 1,923,447 |
Amortization expense | $ 423,864 | 424,337 |
Weighted-average remaining amortization period | 7 years | |
Minimum [Member] | ||
Intangible Assets, Net [Abstract] | ||
Useful lives | 3 years | |
Maximum [Member] | ||
Intangible Assets, Net [Abstract] | ||
Useful lives | 15 years | |
Customer Relationships [Member] | ||
Intangible Assets, Net [Abstract] | ||
Gross carrying amount | $ 883,000 | 1,228,000 |
Accumulated amortization | (475,073) | (293,260) |
Net carrying amount | $ 407,927 | $ 934,740 |
Customer Relationships [Member] | Minimum [Member] | ||
Intangible Assets, Net [Abstract] | ||
Useful lives | 4 years | 4 years |
Customer Relationships [Member] | Maximum [Member] | ||
Intangible Assets, Net [Abstract] | ||
Useful lives | 5 years | 10 years |
Trade Names [Member] | ||
Intangible Assets, Net [Abstract] | ||
Gross carrying amount | $ 923,000 | $ 993,000 |
Accumulated amortization | (441,786) | (354,203) |
Net carrying amount | $ 481,214 | $ 638,797 |
Trade Names [Member] | Minimum [Member] | ||
Intangible Assets, Net [Abstract] | ||
Useful lives | 8 years | 8 years |
Trade Names [Member] | Maximum [Member] | ||
Intangible Assets, Net [Abstract] | ||
Useful lives | 10 years | 10 years |
Patents [Member] | ||
Intangible Assets, Net [Abstract] | ||
Useful lives | 10 years | 10 years |
Gross carrying amount | $ 359,665 | $ 270,250 |
Accumulated amortization | (85,641) | (49,027) |
Net carrying amount | $ 274,024 | $ 221,223 |
Non-compete [Member] | ||
Intangible Assets, Net [Abstract] | ||
Useful lives | 4 years | 4 years |
Gross carrying amount | $ 174,000 | $ 174,000 |
Accumulated amortization | (88,813) | (45,313) |
Net carrying amount | $ 85,187 | $ 128,687 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS, Future Annual Estimated Amortization Expense (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Future Annual Estimated Amortization Expense [Abstract] | ||
2021 | $ 385,091 | |
2022 | 369,706 | |
2023 | 130,841 | |
2024 | 130,841 | |
2025 | 125,341 | |
Thereafter | 106,532 | |
Net carrying amount | $ 1,248,352 | $ 1,923,447 |
CONTRACT LIABILITIES (Details)
CONTRACT LIABILITIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Deferred Revenue [Abstract] | |||
Contract liabilities expected recognition period | 24 months | ||
Changes in Contract Liabilities Activity [Roll Forward] | |||
Beginning balance | $ 26,823 | $ 442,630 | |
Issued | 53,929 | 48,876 | |
Redeemed | (58,263) | (54,724) | |
Breakage recognized | (1,227) | (1,696) | |
Fulfillment of Obligations | [1] | 0 | (408,263) |
Ending balance | $ 21,262 | $ 26,823 | |
Gift Cards [Member] | |||
Deferred Revenue [Abstract] | |||
Breakage policy period | 24 months | ||
Grocery Loyalty Rewards [Member] | |||
Deferred Revenue [Abstract] | |||
Breakage policy period | 12 months | ||
Vapor Loyalty Rewards [Member] | |||
Deferred Revenue [Abstract] | |||
Breakage policy period | 6 months | ||
[1] | See Note 12. "Commitments and Contingencies" for additional information. |
LINE OF CREDIT AND DEBT (Detail
LINE OF CREDIT AND DEBT (Details) - USD ($) | Aug. 18, 2020 | Dec. 31, 2020 | Dec. 31, 2018 | May 15, 2020 |
Debt [Abstract] | ||||
Total Line of Credit and Debt | $ 4,921,493 | |||
Debt Instruments [Abstract] | ||||
Collateral arrangement amount | 2,000,000 | |||
Principal Repayments of Long-Term Debt [Abstract] | ||||
Expected payments for the upcoming years | 4,921,493 | |||
Term Loan Credit Agreement [Member] | ||||
Debt [Abstract] | ||||
Total Line of Credit and Debt | 800,924 | |||
Debt Instruments [Abstract] | ||||
Face amount | $ 1,400,000 | $ 1,400,000 | ||
Debt instrument interest rate | 5.50% | |||
Maturity date | Dec. 31, 2023 | |||
Monthly principle payments | $ 22,333 | |||
Frequency of payment | monthly | |||
Principal Repayments of Long-Term Debt [Abstract] | ||||
2021 | $ 280,000 | |||
2022 | 280,000 | |||
2023 | 240,924 | |||
Expected payments for the upcoming years | 800,924 | |||
Plus: Payments made during 2020 | 599,076 | |||
Total Payments | 1,400,000 | $ 1,400,000 | ||
Term Loan Credit Agreement [Member] | Minimum [Member] | ||||
Debt Instruments [Abstract] | ||||
Debt service coverage ratio | 1.25 | |||
Term Loan Credit Agreement [Member] | Prime Rate [Member] | ||||
Debt Instruments [Abstract] | ||||
Basis adjustment to variable rate | 1.50% | |||
Paycheck Protection Program [Member] | ||||
Debt [Abstract] | ||||
Total Line of Credit and Debt | $ 882,264 | |||
Debt Instruments [Abstract] | ||||
Face amount | $ 876,515 | |||
Maturity date | May 6, 2022 | |||
Interest rate | 1.00% | |||
Frequency of payment | monthly | |||
Principal Repayments of Long-Term Debt [Abstract] | ||||
Expected payments for the upcoming years | $ 882,264 | |||
Total Payments | $ 876,515 | |||
Loan and Security Agreement ("PPE Loan") [Member] | ||||
Debt [Abstract] | ||||
Total Line of Credit and Debt | $ 1,232,414 | |||
Debt Instruments [Abstract] | ||||
Face amount | $ 2,700,000 | |||
Non-refundable discount percentage | 5.00% | |||
Maturity date | Nov. 16, 2020 | |||
Interest rate | 5.00% | |||
Percentage of net profits received from sales of PPE | 20.00% | |||
Loan amount used for operational purposes | $ 1,200,000 | |||
Extended maturity date | Feb. 18, 2021 | |||
Principal Repayments of Long-Term Debt [Abstract] | ||||
Expected payments for the upcoming years | $ 1,232,414 | |||
Total Payments | $ 2,700,000 | |||
Other Debt [Member] | ||||
Debt [Abstract] | ||||
Total Line of Credit and Debt | 5,891 | |||
Principal Repayments of Long-Term Debt [Abstract] | ||||
Expected payments for the upcoming years | 5,891 | |||
Revolving Credit Line [Member] | ||||
Debt Instruments [Abstract] | ||||
Revolving credit line | 2,000,000 | |||
Money market amount | $ 2,000,000 | |||
Renewal period | 1 year | |||
Basis adjustment to variable rate | 1.50% | |||
Line of Credit [Member] | ||||
Debt [Abstract] | ||||
Total Line of Credit and Debt | $ 2,000,000 | |||
Debt Instruments [Abstract] | ||||
Maturity date | Jul. 15, 2021 | |||
Principal Repayments of Long-Term Debt [Abstract] | ||||
Expected payments for the upcoming years | $ 2,000,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 12 Months Ended | ||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($)Lawsuit | Nov. 30, 2020USD ($)User | |
Philip Morris [Member] | |||
Commitments [Abstract] | |||
Number of users approached | User | 14,000,000 | ||
Invested amount | $ 3,000,000,000 | ||
Alleged Claimed Battery Defects For Electronic Cigarette Device Member [Member] | |||
Legal Proceedings [Abstract] | |||
Number of lawsuits | Lawsuit | 2 | ||
Alleged Claimed Battery Defects For Electronic Cigarette Device Member [Member] | Medical Costs [Member] | |||
Legal Proceedings [Abstract] | |||
Damages sought | $ 400,000 | ||
Fontem License Agreement [Member] | Fontem Ventures B.V. [Member] | |||
Commitments [Abstract] | |||
Percentage of royalty rate | 5.25% | ||
Royalty expense | $ 15,000 | $ 40,000 |
STOCKHOLDERS' EQUITY, Equity Co
STOCKHOLDERS' EQUITY, Equity Compensation Plans, Preferred Stock and Convertible Preferred Stock (Details) - $ / shares | Nov. 17, 2020 | Aug. 16, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 07, 2015 |
Board of Directors [Member] | |||||
Preferred Stock [Abstract] | |||||
Preferred shares, par value (in dollars per share) | $ 0.001 | ||||
Board of Directors [Member] | Maximum [Member] | |||||
Preferred Stock [Abstract] | |||||
Preferred stock, shares authorized ( (in shares) | 1,000,000 | ||||
Series A Warrants [Member] | |||||
Convertible Preferred Stock [Abstract] | |||||
Number of warrants exchanged for preferred stock (in shares) | 46,048,318 | ||||
Series B Convertible Preferred Stock [Member] | |||||
Preferred Stock [Abstract] | |||||
Preferred stock, shares authorized ( (in shares) | 30,000 | 30,000 | |||
Preferred shares, par value (in dollars per share) | $ 1,000 | $ 1,000 | $ 1,000 | ||
Convertible Preferred Stock [Abstract] | |||||
Number of convertible preferred stock issued on conversion of warrants (in shares) | 20,722 | ||||
Conversion price (in dollars per share) | $ 0 | ||||
Number of convertible preferred stock issued (in shares) | (3,873) | ||||
Series C Convertible Preferred Stock [Member] | |||||
Preferred Stock [Abstract] | |||||
Preferred stock, shares authorized ( (in shares) | 30,000 | ||||
Preferred shares, par value (in dollars per share) | $ 1,000 | $ 1,000 | |||
Convertible Preferred Stock [Abstract] | |||||
Conversion price (in dollars per share) | $ 0.0001 | ||||
Number of convertible preferred stock issued (in shares) | 20,150 | ||||
2015 Equity Incentive Plan [Member] | |||||
Equity Compensation Plans [Abstract] | |||||
Common stock available for grant (in shares) | 11,100,000,000 | ||||
2015 Equity Incentive Plan [Member] | Maximum [Member] | |||||
Equity Compensation Plans [Abstract] | |||||
Common stock available for grant (in shares) | 100,000,000,000 | ||||
2009 Equity Incentive Plan [Member] | |||||
Equity Compensation Plans [Abstract] | |||||
Common stock available for grant (in shares) | 0 |
STOCKHOLDERS' EQUITY, Summary o
STOCKHOLDERS' EQUITY, Summary of Warrant Activity (Details) - Warrant [Member] - USD ($) | Jul. 27, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Oct. 05, 2016 |
Warrants [Abstract] | |||||
Closing bid stock price (in dollars per share) | $ 0 | ||||
Black Scholes value | $ 1,517,936 | ||||
Number of Warrants [Abstract] | |||||
Outstanding at beginning of period (in shares) | 3,821,814 | 3,828,729 | |||
Warrants exercised (in shares) | (3,466,153) | (6,915) | |||
Warrants expired (in shares) | (355,661) | (355,661) | |||
Outstanding at end of period (in shares) | 0 | 3,821,814 | 3,828,729 | ||
Weighted Average Exercise Price [Abstract] | |||||
Outstanding at beginning of period | $ 1,517,936 | $ 1,522,692 | |||
Warrants exercised | 1,511,100 | 1,518,029 | |||
Warrants expired | 0 | ||||
Outstanding at ending of period | $ 0 | $ 1,517,936 | $ 1,522,692 | ||
Weighted Average Remaining Term [Abstract] | |||||
Weighted average remaining term outstanding | 0 years | 7 months 6 days | 1 year 7 months 6 days |
STOCKHOLDERS' EQUITY, Share-bas
STOCKHOLDERS' EQUITY, Share-based Awards to Officers and Restricted Stock (Details) - USD ($) shares in Billions | Aug. 13, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
Equity Securities, Restricted [Abstract] | |||
Stock-based compensation expense | $ 78,029 | $ 374,241 | |
Restricted Stock [Member] | Chief Executive Officer [Member] | |||
Equity Securities, Restricted [Abstract] | |||
Granted (in shares) | 11 | ||
Vesting period | 1 year | ||
Extension to vesting period | 6 months | ||
Restricted Stock [Member] | Chief Operating Officer [Member] | |||
Equity Securities, Restricted [Abstract] | |||
Granted (in shares) | 8 | ||
Vesting period | 1 year | ||
Extension to vesting period | 6 months | ||
Restricted Stock [Member] | Chief Financial Officer [Member] | |||
Equity Securities, Restricted [Abstract] | |||
Granted (in shares) | 3 | ||
Vesting period | 1 year | ||
Extension to vesting period | 6 months | ||
Stock-based compensation expense | $ 175,000 |
STOCKHOLDERS' EQUITY, Stock Opt
STOCKHOLDERS' EQUITY, Stock Options Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Options [Abstract] | |||
Options aggregate grant date value | $ 0 | ||
Weighted Average Remaining Term and Aggregate Intrinsic Value [Abstract] | |||
Stock-based compensation expense | 78,029 | $ 374,241 | |
Unamortized stock based compensation expense | $ 4,000 | ||
Weighted average amortization period | 6 months | ||
Stock Options [Member] | |||
Summary of Options Activity [Abstract] | |||
Outstanding, Beginning (in shares) | 69,862,230,680 | 68,312,230,680 | |
Options granted (in shares) | 0 | 2,300,000,000 | |
Options forfeited or expired (in shares) | 0 | (750,000,000) | |
Outstanding, Ending (in shares) | 69,862,230,680 | 69,862,230,680 | 68,312,230,680 |
Exercisable (in shares) | 69,862,230,680 | ||
Weighted Average Exercise Price [Abstract] | |||
Outstanding, Beginning (in dollars per share) | $ 0 | $ 0 | |
Options granted (in dollars per share) | 0 | 0 | |
Options forfeited or expired (in dollars per share) | 0 | 0 | |
Outstanding, Ending (in dollars per share) | 0 | $ 0 | $ 0 |
Exercisable (in dollars per share) | $ 0 | ||
Weighted Average Remaining Term and Aggregate Intrinsic Value [Abstract] | |||
Weighted average remaining term, outstanding | 6 years | 7 years | 8 years |
Weighted average remaining term, exercisable | 6 years | ||
Aggregate intrinsic value, outstanding | $ 0 | $ 0 | $ 0 |
Aggregate intrinsic value, exercisable | $ 0 |
STOCKHOLDERS' EQUITY, Income (L
STOCKHOLDERS' EQUITY, Income (Loss) Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Common Share Equivalents Excluded from Calculation of Basic and Dilutive Income (Loss) Per Share [Abstract] | ||
Antidilutive securities excluded from computation of basic and dilutive income (loss) per share (in shares) | 232,633,383,680 | 311,300,999,785 |
Basic and Diluted Net Income (Loss) Per Share [Abstract] | ||
Basic (in shares) | 90,351,540,618 | 66,977,667,455 |
Effect of exercise stock options (in shares) | 0 | 0 |
Effect of exercise warrants (in shares) | 0 | 0 |
Diluted (in shares) | 90,351,540,618 | 66,977,667,455 |
Preferred Stock [Member] | ||
Common Share Equivalents Excluded from Calculation of Basic and Dilutive Income (Loss) Per Share [Abstract] | ||
Antidilutive securities excluded from computation of basic and dilutive income (loss) per share (in shares) | 162,771,153,000 | 201,501,142,000 |
Stock Options [Member] | ||
Common Share Equivalents Excluded from Calculation of Basic and Dilutive Income (Loss) Per Share [Abstract] | ||
Antidilutive securities excluded from computation of basic and dilutive income (loss) per share (in shares) | 69,862,230,680 | 68,362,230,680 |
Warrants [Member] | ||
Common Share Equivalents Excluded from Calculation of Basic and Dilutive Income (Loss) Per Share [Abstract] | ||
Antidilutive securities excluded from computation of basic and dilutive income (loss) per share (in shares) | 0 | 41,437,627,105 |
LEASE (Details)
LEASE (Details) | Dec. 31, 2020 |
Maximum [Member] | |
Operating Leases [Abstract] | |
Lease agreements term | 20 years |
LEASE, Maturity of Lease Liabil
LEASE, Maturity of Lease Liabilities (Details) | Dec. 31, 2020USD ($) |
Maturity of Lease Liabilities by Fiscal Year [Abstract] | |
2021 | $ 631,978 |
2022 | 564,478 |
2023 | 450,877 |
2024 | 342,005 |
2025 | 337,685 |
Thereafter | 2,209,009 |
Total undiscounted operating lease payments | 4,536,032 |
Less: Imputed interest | (946,825) |
Present value of operating lease liabilities | $ 3,589,207 |
LEASE, Balance Sheet Classifica
LEASE, Balance Sheet Classification and Other Information (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Balance Sheet Classification [Abstract] | ||
Operating lease liability, current | $ 474,686 | $ 555,959 |
Operating lease liability, net of current | 3,114,521 | $ 3,544,729 |
Total operating lease liabilities | $ 3,589,207 | |
Other Information [Abstract] | ||
Weighted-average remaining lease term for operating leases | 10 years | |
Weighted-average discount rate for operating leases | 4.77% |
LEASE, Components of Lease Cost
LEASE, Components of Lease Cost (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Components of Lease Cost [Abstract] | ||
Operating lease cost | $ 480,314 | |
Variable lease cost | 353,887 | |
Short-term lease cost | 116,709 | |
Total Rent Expense | $ 950,910 | $ 1,000,000 |
LEASE, Cash Flows and Supplemen
LEASE, Cash Flows and Supplemental Balance Sheet Information Related to Operating Leases (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash Flow, Operating Activities, Lessee [Abstract] | ||
Cash paid for operating lease liabilities | $ 511,000 | |
Amortization of right-of-use asset | 584,398 | $ 325,208 |
Supplemental Balance Sheet Information Related to Operating Leases [Abstract] | ||
Right of use asset | $ 4,078,621 | 4,663,019 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherAssetsNoncurrent | |
Lease liability, current | $ 474,686 | 555,959 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OperatingLeaseLiabilityCurrent | |
Lease liability, net of current | $ 3,114,521 | 3,544,729 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OperatingLeaseLiabilityNoncurrent | |
Other Assets [Member] | ||
Supplemental Balance Sheet Information Related to Operating Leases [Abstract] | ||
Right of use asset | $ 4,078,621 | |
Current Liabilities [Member] | ||
Supplemental Balance Sheet Information Related to Operating Leases [Abstract] | ||
Lease liability, current | 474,686 | |
Other Liabilities [Member] | ||
Supplemental Balance Sheet Information Related to Operating Leases [Abstract] | ||
Lease liability, net of current | $ 3,114,521 | |
ASU 2016-02 [Member] | Other Assets [Member] | ||
Supplemental Balance Sheet Information Related to Operating Leases [Abstract] | ||
Right of use asset | 4,663,019 | |
ASU 2016-02 [Member] | Current Liabilities [Member] | ||
Supplemental Balance Sheet Information Related to Operating Leases [Abstract] | ||
Lease liability, current | 555,959 | |
ASU 2016-02 [Member] | Other Liabilities [Member] | ||
Supplemental Balance Sheet Information Related to Operating Leases [Abstract] | ||
Lease liability, net of current | $ 3,544,729 |
INCOME TAXES, Reconciliation of
INCOME TAXES, Reconciliation of Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
INCOME TAXES [Abstract] | ||
U.S. federal statutory rate | $ (781,704) | $ (587,869) |
State and local taxes, net of federal benefit | (132,291) | (100,094) |
Change in valuation allowance | 1,201,450 | 249,935 |
True-up & deferred adjustment | 23,614 | 258,165 |
Stock based compensation | 19,159 | 17,901 |
Other permanent items | 935 | 6,664 |
Change in tax rate | 2,429 | 97,731 |
Expired warrants | (422,655) | 0 |
Other | 89,063 | 57,567 |
Income tax provision (benefit) | $ 0 | $ 0 |
INCOME TAXES, Deferred Tax Asse
INCOME TAXES, Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets [Abstract] | ||
NOL & AMT credit carryforward | $ 13,366,483 | $ 12,654,534 |
Inventory reserves and allowances | 31,249 | 30,965 |
Accrued Expenses and Deferred Income | 45,358 | 48,050 |
Charitable contribution | 5,303 | 5,284 |
Stock based compensation | 1,966,058 | 1,967,795 |
Net book value of fixed assets | 6,574 | 3,978 |
Net book value of intangible assets | 731,365 | 666,538 |
ASC 842 - Lease Accounting | 32,681 | 29,132 |
Total deferred tax assets | 16,185,071 | 15,406,276 |
Deferred tax liabilities [Abstract] | ||
Extinguishment of Warrants | 0 | (422,655) |
Total deferred tax liabilities | 0 | (422,655) |
Net deferred tax assets | 16,185,071 | 14,983,621 |
Valuation allowance | (16,185,071) | (14,983,621) |
Net deferred tax assets | $ 0 | $ 0 |
INCOME TAXES, Other Information
INCOME TAXES, Other Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
INCOME TAXES [Abstract] | ||
Change in valuation allowance | $ 16,185,071 | $ 14,983,621 |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 1,200,000 | $ 200,000 |
U.S. Federal [Member] | ||
Operating Loss Carryforwards [Abstract] | ||
Operating Loss Carryforwards | 56,400,000 | |
U.S. Federal [Member] | 2030 through 2037 [Member] | ||
Operating Loss Carryforwards [Abstract] | ||
Operating Loss Carryforwards | 46,300,000 | |
U.S. Federal [Member] | No Expiration Date [Member] | ||
Operating Loss Carryforwards [Abstract] | ||
Operating Loss Carryforwards | 10,100,000 | |
State [Member] | ||
Operating Loss Carryforwards [Abstract] | ||
Operating Loss Carryforwards | 42,400,000 | |
State [Member] | 2030 through 2037 [Member] | ||
Operating Loss Carryforwards [Abstract] | ||
Operating Loss Carryforwards | 35,400,000 | |
State [Member] | No Expiration Date [Member] | ||
Operating Loss Carryforwards [Abstract] | ||
Operating Loss Carryforwards | $ 7,000,000 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Net sales | $ 13,920,745 | $ 15,114,006 |
Segment gross profit | 5,777,221 | 6,484,244 |
Corporate expenses | 9,225,593 | 10,898,528 |
LOSS FROM OPERATIONS | (3,448,372) | (4,414,284) |
Corporate other income (expense), net | (274,020) | 1,614,908 |
NET LOSS | (3,722,392) | (2,799,376) |
Depreciation and amortization | 550,098 | 594,940 |
Vapor [Member] | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Net sales | 2,458,945 | 4,134,701 |
Grocery [Member] | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Net sales | 11,461,800 | 10,979,305 |
Operating Segments [Member] | Vapor [Member] | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Net sales | 2,458,945 | 4,134,701 |
Segment gross profit | 1,425,140 | 2,443,967 |
Depreciation and amortization | 10,000 | 41,000 |
Operating Segments [Member] | Grocery [Member] | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Net sales | 11,461,800 | 10,979,305 |
Segment gross profit | 4,352,081 | 4,040,277 |
Depreciation and amortization | $ 502,000 | $ 526,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Mar. 05, 2021 | Feb. 26, 2021 | Feb. 25, 2021 | Feb. 07, 2021 | Jan. 14, 2021 | Aug. 13, 2018 | Dec. 31, 2020 |
Term Loan and Security Agreement [Member] | |||||||
Series D Preferred Stock [Abstract] | |||||||
Maturity date | Nov. 16, 2020 | ||||||
Common Stock [Member] | |||||||
Series D Preferred Stock [Abstract] | |||||||
Number of common stock, shares issued upon conversion preferred stock (in shares) | 0 | ||||||
Restricted Stock [Member] | Chief Executive Officer [Member] | |||||||
Equity Securities, Restricted [Abstract] | |||||||
Granted (in shares) | 11,000,000,000 | ||||||
Restricted Stock [Member] | Chief Operating Officer [Member] | |||||||
Equity Securities, Restricted [Abstract] | |||||||
Granted (in shares) | 8,000,000,000 | ||||||
Restricted Stock [Member] | Chief Financial Officer [Member] | |||||||
Equity Securities, Restricted [Abstract] | |||||||
Granted (in shares) | 3,000,000,000 | ||||||
Subsequent Event [Member] | |||||||
Series D Preferred Stock [Abstract] | |||||||
Stock options exercised (in shares) | 625,000,000 | ||||||
Subsequent Event [Member] | Term Loan and Security Agreement [Member] | |||||||
Series D Preferred Stock [Abstract] | |||||||
Maturity date | Mar. 18, 2021 | ||||||
Interest rate | 5.00% | ||||||
Subsequent Event [Member] | Series C Stock [Member] | |||||||
Series D Preferred Stock [Abstract] | |||||||
Shares conversion percentage | 100.00% | ||||||
Converted and cancelled of shares (in shares) | 162,800,000,000 | ||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | |||||||
Series D Preferred Stock [Abstract] | |||||||
Number of preferred stock, shares sold and issued (in shares) | 5,000 | ||||||
Preferred stock stated value (in dollars per share) | $ 1,000 | ||||||
Aggregate subscription price | $ 5,000,000 | ||||||
Preferred stock conversion price (in dollars per share) | $ 0.0024 | ||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Common Stock [Member] | |||||||
Series D Preferred Stock [Abstract] | |||||||
Number of common stock, shares issued upon conversion preferred stock (in shares) | 2,083,333,333 | ||||||
Subsequent Event [Member] | President and Chief Operating Officer [Member] | |||||||
Series D Preferred Stock [Abstract] | |||||||
Base salary | $ 363,000 | ||||||
Increment percentage on salary each subsequent year | 10.00% | ||||||
Subsequent Event [Member] | Restricted Stock [Member] | |||||||
Equity Securities, Restricted [Abstract] | |||||||
Granted (in shares) | 2,200,000,000 | ||||||
Series D Preferred Stock [Abstract] | |||||||
Equity instruments exercised (in shares) | 2,250,000,000 | ||||||
Subsequent Event [Member] | Restricted Stock [Member] | Chief Executive Officer [Member] | |||||||
Equity Securities, Restricted [Abstract] | |||||||
Percentage of increase in restricted stock grants from its original award agreement to officers | 10.00% | ||||||
Subsequent Event [Member] | Restricted Stock [Member] | Chief Operating Officer [Member] | |||||||
Equity Securities, Restricted [Abstract] | |||||||
Percentage of increase in restricted stock grants from its original award agreement to officers | 10.00% | ||||||
Subsequent Event [Member] | Restricted Stock [Member] | Chief Financial Officer [Member] | |||||||
Equity Securities, Restricted [Abstract] | |||||||
Percentage of increase in restricted stock grants from its original award agreement to officers | 10.00% | ||||||
Subsequent Event [Member] | Restricted Stock [Member] | Director [Member] | |||||||
Equity Securities, Restricted [Abstract] | |||||||
Percentage of increase in restricted stock grants from its original award agreement to officers | 10.00% | ||||||
Granted (in shares) | 50,000,000 |