Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | May 03, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Entity Registrant Name | GrowLife, Inc. | ||
Entity Central Index Key | 0001161582 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Entity Common Stock Shares Outstanding | 145,517,397 | ||
Entity Public Float | $ 7,176,550 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 000-50385 | ||
Entity Incorporation State Country Code | DE | ||
Entity Tax Identification Number | 90-0821083 | ||
Entity Address Address Line 1 | 11335 NE 122nd Way | ||
Entity Address Address Line 2 | Suite 105 | ||
Entity Address City Or Town | Kirkland | ||
Entity Address State Or Province | WA | ||
Entity Address Postal Zip Code | 98034 | ||
City Area Code | 866 | ||
Icfr Auditor Attestation Flag | false | ||
Auditor Name | Macias Gini & O’Connell LLP | ||
Auditor Location | Irvine, CA | ||
Local Phone Number | 781-5559 | ||
Security 12g Title | Common Stock, par value $0.0001 | ||
Entity Interactive Data Current | Yes | ||
Auditor Firm Id | 324 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash And Cash Equivalents | $ 363,863 | $ 383,144 |
Accounts receivable - trade, net of allowance for doubtful accounts of $10,000 and $5,690 as of 12/31/2021 and 12/31/2020, respectively | 366,789 | 960,522 |
Other Receivables | 161,000 | 0 |
Inventory | 1,299,560 | 570,524 |
Deposits | 18,995 | 18,995 |
Total Current Assets | 2,210,207 | 1,933,185 |
Property And Equipment, Net | 249,906 | 129,330 |
Intangible Assets, Net | 459,002 | 1,130,718 |
Goodwill | 781,749 | 781,749 |
Operating Lease Right Of Use Asset | 407,166 | 380,247 |
Total Assets | 4,108,030 | 4,355,229 |
Current Liabilities: | ||
Accounts Payable - Trade | 1,146,344 | 1,146,195 |
Accrued Expenses | 219,398 | 2,592,251 |
Accrued Expenses - Related Parties | 0 | 37,394 |
Notes Payable- Ppp/eidl Loans, Current | 1,034,994 | 390,035 |
Note Payable To Bank | 137,728 | |
Derivative Liability | 1,698,272 | 1,101,436 |
Convertible Notes Payable, Net | 2,583,816 | 2,495,153 |
Notes Payable- Related Party | 0 | 49,144 |
Acquisition Of Ez-clone Enterprises, Inc. Payable In Cash | 1,026,000 | 1,026,000 |
Acquisition Of Ez-clone Enterprises, Inc. Payable In Common Stock | 1,105,000 | 1,105,000 |
Current Portion Of Operating Lease Right Of Use Liability | 197,915 | 140,772 |
Federal And State Income Taxes Payable | 556,952 | 343,125 |
Total Current Liabilities | 9,706,419 | 10,426,505 |
Long Term Liabilities: | ||
Deferred Tax Liability | 106,000 | 352,649 |
Notes Payable- Ppp/eidl, Less Current Portion | 0 | 485,679 |
Non-current Portion Of Operating Lease Right Of Use Liability | 229,222 | 264,868 |
Total Long Term Liabilities | 335,222 | 1,103,196 |
Commitments And Contingencies | 0 | 0 |
Stockholders' Deficit | ||
Preferred Stock - $0.0001 Par Value, 10,000,000 Shares Authorized, No Shares Issued And Outstanding At 12/31/2021 And 12/31/2020, Respectively | 0 | 0 |
Common Stock - $0.0001 Par Value, 740,000,000 Shares Authorized, 117,952,697 And 51,843,221 Shares Issued And Outstanding At 12/31/2021 And 12/31/2020 , Respectively | 395,198 | 388,587 |
Additional Paid In Capital | 153,985,229 | 147,278,311 |
Accumulated Deficit | (160,314,038) | (154,841,370) |
Total Stockholders' Deficit | (5,933,611) | (7,174,472) |
Total Liabilities And Stockholders' Deficit | $ 4,108,030 | $ 4,355,229 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheets | ||
Accounts Receivable, Allowance For Doubtful Accounts | $ 10,000 | $ 5,690 |
Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 |
Preferred Stock, Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Issued | 0 | 0 |
Preferred Stock, Outstanding | 0 | 0 |
Common Stock Par Value | $ 0.0001 | $ 0.0001 |
Common Stock, Authorized | 740,000,000 | 740,000,000 |
Common Stock, Issued | 117,952,697 | 51,843,221 |
Common Stock, Outstanding | 117,952,697 | 51,843,221 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Consolidated Statements of Operations | ||
Net Revenue | $ 6,199,089 | $ 7,000,812 |
Cost Of Goods Sold | 3,405,655 | 4,020,570 |
Gross Profit | 2,793,434 | 2,980,242 |
Operating Expenses | 4,318,416 | 4,870,204 |
Loss From Operations | (1,524,982) | (1,889,962) |
Other Income (expense): | ||
Change In Fair Value Of Derivative | (973,101) | 199,479 |
Interest Expense, Net | (3,252,191) | (1,089,734) |
Loss On Debt Conversions, Net | (931,494) | (945,169) |
Loss On Debt Settlement, Net | 0 | (2,422,500) |
Gain On Extinguishment Of Warrants | 1,025,400 | 0 |
Gain On Forgiveness Of Debt | 206,287 | |
Total Other Expense, Net | (3,925,099) | (4,257,924) |
Loss Before Income Taxes | (5,450,081) | (6,147,886) |
Income Taxes - Current Benefit (expense) | (22,587) | (231,952) |
Net Loss | $ (5,472,668) | $ (6,379,838) |
Basic And Diluted Loss Per Share | $ (0.07) | $ (0.18) |
Weighted Average Shares Of Common Stock Outstanding- Basic And Diluted | 83,755,630 | 35,286,804 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Balance, Shares at Dec. 31, 2019 | 28,677,147 | |||
Balance, Amount at Dec. 31, 2019 | $ (4,634,216) | $ 386,269 | $ 143,441,047 | $ (148,461,532) |
Stock Based Compensation For Stock Options | 47,169 | 0 | 47,169 | 0 |
Stock Based Compensation For Warrants | 78,000 | $ 0 | 78,000 | 0 |
Shares Issued For Services Rendered, Shares | 40,000 | |||
Shares Issued For Services Rendered, Amount | 11,800 | $ 4 | 11,796 | 0 |
Shares Issued For Convertible Note And Interest Conversion, Shares | 19,573,920 | |||
Shares Issued For Convertible Note And Interest Conversion, Amount | 3,115,208 | $ 1,960 | 3,113,249 | 0 |
Shares Issued For Convertible Note Commitment Fee, Shares | 3,552,000 | |||
Shares Issued For Convertible Note Commitment Fee, Amount | 586,920 | $ 355 | 586,565 | 0 |
Warrant Exercise, Shares | 154 | |||
Warrant Exercise, Amount | 485 | $ 0 | 485 | 0 |
Net Loss For The Year Ended December 31, 2020 | (6,379,838) | $ 0 | 0 | (6,379,838) |
Balance, Shares at Dec. 31, 2020 | 51,843,221 | |||
Balance, Amount at Dec. 31, 2020 | (7,174,472) | $ 388,587 | 147,278,311 | (154,841,370) |
Stock Based Compensation For Stock Options | 15,476 | 15,476 | ||
Shares Issued For Services Rendered, Shares | 1,200,000 | |||
Shares Issued For Services Rendered, Amount | 24,000 | $ 120 | 23,880 | |
Shares Issued For Convertible Note And Interest Conversion, Shares | 49,845,718 | |||
Shares Issued For Convertible Note And Interest Conversion, Amount | 5,239,493 | $ 4,985 | 5,234,508 | |
Shares Issued For Convertible Note Commitment Fee, Shares | 14,250,000 | |||
Shares Issued For Convertible Note Commitment Fee, Amount | 1,397,100 | $ 1,425 | 1,395,675 | |
Warrant Exercise, Shares | 813,758 | |||
Warrant Exercise, Amount | 37,460 | $ 81 | 37,379 | |
Net Loss For The Year Ended December 31, 2020 | (5,472,668) | (5,472,668) | ||
Balance, Shares at Dec. 31, 2021 | 117,952,697 | |||
Balance, Amount at Dec. 31, 2021 | $ (5,933,611) | $ 395,198 | $ 153,985,229 | $ (160,314,038) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows From Operating Activities: | ||
Net Loss | $ (5,472,668) | $ (6,379,838) |
Adjustments To Reconcile Net Loss To Net Cash (used In) Operating Activities | ||
Depreciation Expense | 37,152 | 37,152 |
Amortization Of Intangible Assets | 671,716 | 671,716 |
Amortization of debt discount | 643,680 | |
Share-based Compensation Expense | 15,476 | 125,169 |
Shares Issued For Service | 24,000 | 11,800 |
Non Cash Interest Expense | 772,256 | 1,061,852 |
Loss On Debt Conversion | 931,494 | 945,169 |
Change In Fair Value Of Derivative | 973,101 | (199,479) |
Loss on cashless warrant conversion | 37,460 | |
Loss On Debt Settlement | 0 | 2,422,500 |
Increase Gain On Forgiveness Of Debt | (206,287) | 0 |
Gain Of Settlement Of Accounts Payable | (1,025,400) | 0 |
Fair value of derivatives expensed upon issuance | 1,429,138 | |
Changes In Operating Assets And Liabilities: | ||
Accounts Receivable | 593,733 | (858,716) |
Inventory | (729,036) | 30,150 |
Other Assets | (161,000) | 0 |
Deposits | 0 | 0 |
Right Of Use, Net | (5,422) | 11,409 |
Accounts Payable | 149 | 28,105 |
Accrued Expenses | 40,764 | (83,433) |
Change In Deferred Taxes | (246,649) | (117,551) |
Change In Federal And State Taxes Payable | 213,827 | 343,125 |
Cash Used In Operating Activities | (1,462,515) | (1,950,870) |
Cash Flows From Investing Activities: | ||
Purchase Of Pp&e | (20,000) | 0 |
Cash Used In Investing Activities | (20,000) | 0 |
Cash Flows From Financing Activities: | ||
Warrant Exercise | 0 | (431,151) |
Proceeds from convertible notes | 1,728,873 | |
Proceeds from notes payable | 337,055 | 0 |
Repayment of convertible notes | (553,550) | |
Repayment Of Notes | (49,144) | 2,723,846 |
Proceeds From Issuance Of Common Stock | 0 | 485 |
Net Cash Provided By Financing Activities | 1,463,234 | 2,293,180 |
Net Change In Cash And Cash Equivalents | (19,281) | 342,310 |
Cash And Cash Equivalents, Beginning Of Period | 383,144 | 40,834 |
Cash And Cash Equivalents, End Of Period | 363,863 | 383,144 |
Non-cash Investing And Financing Activities: | ||
Shares Issued For Convertible Note And Interest Conversion | 2,502,596 | 1,947,819 |
Issuance Of Stock For Debt Issuance Costs | 586,565 | |
Loss Of Debt Conversions- Issuance Of Stock | 0 | 984,169 |
Gain On Debt Conversions- Reduction Of Accounts Payable | 0 | 39,000 |
Shares Issued For Liability Settlement | 1,397,100 | $ 0 |
Purchase of fixed asset for notes payable | 137,725 | |
Derivative liability settled in shares | $ 1,805,403 |
DESCRIPTION OF BUSINESS AND ORG
DESCRIPTION OF BUSINESS AND ORGANIZATION | 12 Months Ended |
Dec. 31, 2021 | |
DESCRIPTION OF BUSINESS AND ORGANIZATION | |
Note 1 - Description Of Business And Organization | NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATION GrowLife, Inc. (“GrowLife” or the “Company”) is incorporated under the laws of the State of Delaware and is headquartered in Kirkland, Washington. The Company was founded in 2012 with the Closing of the Agreement and Plan of Merger with SGT Merger Corporation. On October 15, 2018, the Company closed the Purchase and Sale Agreement with EZ-CLONE Enterprises, Inc., a California corporation (the “Agreement”). On November 5, 2019, the Company amended the Agreement with one 24.5% shareholder of EZ-CLONE Enterprises, Inc. (“EZ-CLONE”), to extend the date to purchase the remaining 49% of stock of EZ-CLONE in exchange for a 20% extension fee (a total of $171,000 for the 49% or $85,500 for each 24.5% shareholder) of the $855,000 cash payable at the earlier of the closing of $2,000,000 in funding or nine months (July 2020). The Company did not close the purchase of the remaining 49% of stock of EZ-CLONE by the extended deadline. On September 15, 2020, the Company received notice that William Blackburn and Brad Mickelsen (“Plaintiffs”), minority shareholders of EZ-CLONE Enterprises, Inc., a majority owned subsidiary of the Company, filed a complaint against the Company and its officers Marco Hegyi and Mark Scott (“Officers”), in the Superior Court of California, County of Sacramento (“Complaint”) for claims related to breach under the Purchase and Sale Agreement dated October 15, 2018 between the Company and Plaintiffs. The Complaint also alleges that the Company and its Officers made certain false representations and other claims to consummate the Transaction and as a result has failed to complete the second closing as required under Purchase and Sale Agreement. The Plaintiffs are seeking rescission of the Purchase and Sale Agreement, unspecified damages in excess of ten thousand dollars, and other equitable relief. As of December 4, 2020, the Company’s officers were dismissed from the case. The Plaintiffs are seeking rescission of the Purchase and Sale Agreement, unspecified damages in excess of ten thousand dollars, and other equitable relief. See Note 17 for description of Legal Proceedings. On September 15, 2020, the Company filed a notice of removal with the California Superior Court, County of Sacramento and the United States District Court for the Eastern District of California. The case was removed to Federal District Court for the Eastern District of California and Plaintiffs filed an Ex Parte Application for TRO and an Order for Preliminary Injunction with the Federal Court. The TRO was granted on September 16, 2020 and a preliminary injunction hearing was scheduled for September 29, 2020. After reviewing all pleadings and oral arguments at the hearing, the Court issued a ruling granting Plaintiffs’ request for a preliminary injunction. The parties provided legal briefs to the Federal court to determine if rescission should be granted. The Court did not reach a decision on this issue, and denied without prejudice, the Company’s effort to reverse the preliminary injunction. The Company is currently reviewing whether to pursue the matter further and engaging in settlement discussions. If we are unsuccessful and the court grants Plaintiffs’ request for rescission the resulting actions are speculative at this time but could include the return of the consideration exchanged as part of the acquisition subject to certain adjustments as the result of several variables which the court will consider. If the court denies Plaintiffs request for rescission the litigation will continue regarding the breach of contract claims and contractual remedies for breach and the Court may or may not dissolve the preliminary injunction as a result. A decision to grant rescission As of December 31, 2021 and 2020, the Company recorded a liability of $2,131,000 for acquisition payable of which a $1,105,000 is payable in stock and $1,026,000 is payable in cash. As of March 4, 2019, the Company began to trade on the Pink Sheet stocks system. Our bid price had closed below $0.01 for more than 30 consecutive calendar days. As of March 17, 2020, the Company commenced trading on the OTCQB Market ("OTCQB") after successfully up-listing from the OTC Pink Market. On November 5, 2021, the Company held its 2021 Annual Meeting of Stockholders, where stockholders approved an increase in the authorized shares of common stock (“Common Stock”) from 120,000,000 to 740,000,000 shares. As such, the Company filed a Certificate of Amendment of Certificate of Incorporation with the Secretary of State of the State of Delaware on November 8, 2021. As a result of the increase, the Company an aggregate 750,000,000 authorized shares consisting of: (i) 740,000,000 shares of common stock, par value $0.0001 per share, and (ii) 10,000,000 shares of preferred stock, par value $0.0001 per share. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2021 | |
DESCRIPTION OF BUSINESS AND ORGANIZATION | |
Note 2 - Going Concern | NOTE 2 – GOING CONCERN The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company incurred net losses of $5,472,688 and $6,379,838 for the years ended December 31, 2021 and 2020, respectively. Net cash used in operating activities was $1,462,515 and $1,950,870 for the years ended December 31, 2021 and 2020, respectively. The Company anticipates that it will record losses from operations for the foreseeable future. As of December 31, 2021, the Company’s accumulated deficit was $160,314,038. The Company has limited capital resources, and operations to date have been funded with the proceeds from private equity and debt financings. These conditions raise substantial doubt about our ability to continue as a going concern. The Company believes that its cash on hand will be sufficient to fund our operations only until May 31, 2022. The Company needs additional financing to implement our business plan and to service our ongoing operations and pay our current debts. There can be no assurance that we will be able to secure any needed funding, or that if such funding is available, the terms or conditions would be acceptable to us. If we are unable to obtain additional financing when it is needed, we will need to restructure our operations, and divest all or a portion of our business. We may seek additional capital through a combination of private and public equity offerings, debt financings and strategic collaborations. Debt financing, if obtained, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, and could increase our expenses and require that our assets secure such debt. Equity financing, if obtained, could result in dilution to the Company’s then-existing stockholders and/or require such stockholders to waive certain rights and preferences. If such financing is not available on satisfactory terms, or is not available at all, the Company may be required to delay, scale back, eliminate the development of business opportunities and our operations and financial condition may be materially adversely affected. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS | 12 Months Ended |
Dec. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS | |
Note 3 - Significant Accounting Policies: Adoption Of Accounting Standards | NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS Basis of Presentation - Principles of Consolidation Cash and Cash Equivalents Accounts Receivable and Revenue – Sales Returns - Concentration of Credit and Sales Risk - The Company had the following concentrations of credit and sales risk- Customers with over 10% of sales- the Company had two customers of EZ-CLONE that represented approximately 53% and 15% of consolidated revenue for the year ended December 31, 2021. Customers with over 10% of outstanding accounts receivable- one customer totaling 84.9% and 88.8% as of December 31, 2021 and 2020, respectively. Inventories - Property and Equipment Long Lived Assets Intangible Assets Goodwill - Fair Value Measurements and Financial Instruments Fair Value Measurement and Disclosures Level 1 – Quoted prices in active markets for identical assets and liabilities; Level 2 – Inputs other than level one inputs that are either directly or indirectly observable; and. Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The recorded value of other financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, other current assets, and accounts payable and accrued expenses approximate the fair value of the respective assets and liabilities as of December 31, 2021 and 2020 are based upon the short-term nature of the assets and liabilities. The Company’s derivative financial instruments are considered Level 3 instruments. See Note 12. Derivative Financial Instruments – Stock Based Compensation Convertible Securities Net Loss Per Share - As of December 31, 2021, there are warrants for the purchase of 686,666 shares of common shares at a $1.64 average exercise price. In addition, we have an unknown number of common shares to be issued under the convertible notes with Bucktown and Silverback Capital financing agreements and warrants because the number of shares ultimately issued depends on the price at which the holder converts its debt to shares and exercises its warrants. The lower the conversion or exercise prices, the more shares that will be issued to the holder upon the conversion of debt to shares. The Company will not know the exact number of shares of stock issued to the holder until the debt is actually converted to equity. As of December 31, 2020, there were (i) stock option grants outstanding for the purchase of 506,667 common shares at an $1.496 average exercise price; and (ii) warrants for the purchase of 3,451,737 shares of common shares at a $2.428 average exercise price. In addition, the Company have an unknown number of common shares to be issued under the Crossover financing agreements in the case of default. In addition, the Company had an unknown number of common shares to be issued under the Chicago Venture, Iliad and St. George financing agreements because the number of shares ultimately issued to Chicago Venture depends on the price at which Chicago Venture converts its debt to shares and exercises its warrants. The lower the conversion or exercise prices, the more shares that will be issued to Chicago Venture upon the conversion of debt to shares. Dividend Policy Use of Estimates - Advertising Comprehensive loss Research and Development Expenses Recent Accounting Pronouncements Right of Use Assets and Liabilities- ASU 2016-02, Leases (Topic 842) , In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). Based on the Company’s review of accounting standard updates issued , there have been no other newly issued or newly applicable accounting pronouncements that have had, or are expected to have, a significant impact on the Company’s consolidated financial statements. |
BUSINESS COMBINATIONS ACQUISITI
BUSINESS COMBINATIONS ACQUISITION PAYABLE AND OTHER TRANSACTION | 12 Months Ended |
Dec. 31, 2021 | |
DESCRIPTION OF BUSINESS AND ORGANIZATION | |
Note 4 -business Combinations, Acquisition Payable And Other Transaction | NOTE 4 –BUSINESS COMBINATIONS, ACQUISITION PAYABLE AND OTHER TRANSACTION Acquisition of EZ-CLONE Enterprises, Inc. On October 15, 2018, the Company closed the Purchase and Sale Agreement with EZ-CLONE Enterprises, Inc. (“EZ-CLONE”), a California corporation (the “Agreement”). The total purchase price was $4 million of which $1,500,000 is payable in cash and $2.5 million payable in stock. At closing, we paid 51% of this amount totaling $2,040,000 via a (i) a cash payment of $645,000; and (ii) the issuance of 715,385 restricted shares of our common stock valued $1,395,000. The Agreement called for the Company, upon delivery of the remaining 49% of EZ-Clone stock, to acquire such stock within one year for $1,960,000, payable as follows: (i) a cash payment of $855,000; and (ii) the issuance of Company’s common stock at a value of $1,105,000. On November 5, 2019, the Company amended the Agreement with one 24.5% shareholder of EZ-CLONE to extend the date to purchase the remaining 49% of stock of EZ-CLONE in exchange for a 20% extension fee (a total of $171,000 for the 49% or $85,500 for each 24.5% shareholder) of the $855,000 cash payable at the earlier of the closing of $2,000,000 in funding or nine months (July 2020). The Company did not close the purchase of the remaining 49% of stock of EZ-CLONE by the extended deadline. On September 15, 2020, the Company received notice that William Blackburn and Brad Mickelsen (“Plaintiffs”), minority shareholders of EZ-CLONE Enterprises, Inc., a majority owned subsidiary of the Company, filed a complaint against the Company and its officers Marco Hegyi and Mark Scott (“Officers”), in the Superior Court of California, County of Sacramento (“Complaint”) for claims related to breach under the Purchase and Sale Agreement dated October 15, 2018 between the Company and Plaintiffs. As of December 4, 2020, the Company’s officers were dismissed from the case. The Plaintiffs are seeking rescission of the Purchase and Sale Agreement, unspecified damages in excess of ten thousand dollars, and other equitable relief. See Note 17 for description of Legal Proceedings. As of December 31, 2021 and 2020, the Company has recorded a liability of $2,131,000 for acquisition payable of which a $1,105,000 is payable in stock and $1,026,000 is payable in cash. This acquisition accelerated the Company’s revenue growth, increased the Company gross margins and added additional personnel. The Company accounted for the acquisition in accordance with ASC 805, “Business Combinations”. ASC 805 defines the acquirer in a business combination as the entity that obtains control of one or more businesses in a business combination and establishes the acquisition date as the date that the acquirer achieves control. ASC 805 requires an acquirer to recognize the assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at the acquisition date, measured at their fair values as of that date. For accounting purposes, from the October 15, 2018 the Company consolidated EZ-Clone given their control and treated its obligation to acquire the remaining interest in EZ-Clone. The Company considers EZ-Clone considers EZ-Clone to be 100% owned. At December 31, 2020 and 2021 the Company has recorded $213,100 as a liability, $1,026,000 of which is due in cash and $1,105,000 is due in stock.. The fair value of the intangible assets associated with the assets acquired was $2,351,000 estimated by using a discounted cash flow approach based on future economic benefits. In summary, the estimate was based on a projected income approach and related discounted cash flows over five years, with applicable risk factors assigned to assumptions in the forecasted results. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2021 | |
INVENTORY | |
Note 5 - Inventory | NOTE 5 – INVENTORY Inventory as of December 31, 2021 and 2020 consisted of the following: December 31, 2021 December 31, 2020 Raw materials $ 723,834 $ 456,723 Work in proess 375,083 83,792 Finished goods 183,318 26,557 Inventory deposits 17,325 3,452 $ 1,299,560 $ 570,524 Inventory consist of supplies for product lines at EZ-CLONE. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT | |
Note 6 - Property And Equipment | NOTE 6 – PROPERTY AND EQUIPMENT Property and equipment as of December 31, 2021 and 2020 consists of the following: December 31, 2021 December 31, 2020 Machinery, equipment and tooling $ 356,867 $ 356,867 Computer equipment 16,675 16,675 Leasehold equipment 14,702 14,702 Automobile 157,728 Total $ 545,972 $ 388,244 Less accumulated depreciation and amortization (296,066 ) (258,914 ) Net property and equipment $ 249,906 $ 129,330 Total depreciation expense was $37,152 and $37,152 for the years ended December 31, 2021 and 2020, respectively. All equipment is used for manufacturing, selling, general and administrative purposes and accordingly all depreciation is classified in cost of goods sold, selling, general and administrative expenses. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
INTANGIBLE ASSETS | |
Note 7 - Intangible Assets | NOTE 7 – INTANGIBLE ASSETS Intangible assets as of December 31, 2021 and 2020 consisted of the following: Estimated life December 31, 2021 December 31, 2020 Customer lists 3.5 Years $ 1,297,000 $ 1,297,000 Intellectual property 3.5 Years 1,054,000 1,054,000 Less accumulated amortization (1,891,998 ) (1,220,282 ) $ 459,002 $ 1,130,718 Goodwill Indefinite $ 781,749 $ 781,749 Total Intangibles and Goodwill $ 1,240,751 $ 1,912,467 Total amortization expense was $671,716 and $671,716 for the years ended December 31, 2021 and 2020, respectively. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
LEASES | |
Note 8- Leases | NOTE 8- LEASES The Company previously entered into operating leases for warehouse and corporate facilities. These leases have terms which range from less than one to two years, and often include options to renew. These operating leases are listed as a separate line item on the Company's December 31, 2021 Consolidated Balance Sheet and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligation to make lease payments are also listed as separate line items on the Company's December 31, 2021 Consolidated Balance Sheet. As of December 31, 2021, total right-of-use assets and operating lease liabilities for remaining long-term lease was $407,166 and $427,137, respectively. During the years ended December 31, 2021 and 2020, the Company recognized approximately $232,524 and $222,984, respectively, in total lease costs for the lease. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. Cash paid for ROU operating lease liability amounted to $230,385 and $211,575 for the years ended December 31, 2021 and December 31, 2020, respectively. Minimum future lease payments as of December 31, 2021 Year ended Amount December 31, 2022 $ 232,741 December 31, 2023 236,352 $ 469,093 Imputed interest using 10% (41,956 ) Right of Use Liability $ 427,137 |
ACCOUNTS PAYABLE
ACCOUNTS PAYABLE | 12 Months Ended |
Dec. 31, 2021 | |
ACCOUNTS PAYABLE | |
Note 9- Accounts Payable | NOTE 9- ACCOUNTS PAYABLE Accounts payable were $1,146,344 and $1,146,195 as of December 31, 2021 and 2020, respectively. Such liabilities consisted of amounts due to vendors for inventory purchases, audit, legal and other expenses incurred by the Company. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2021 | |
ACCRUED EXPENSES | |
Note 10- Accrued Expenses | NOTE 10- ACCRUED EXPENSES Accrued expenses were $219,398 and $2,592,251 as of December 31, 2021 and 2020, respectively. Such liabilities consisted of amounts due to sales tax, payroll and restructuring expense liabilities. On April 5, 2021, the Company entered into a Warrant Settlement Agreement dated March 31, 2021 with St. George and Iliad to resolve a dispute regarding prior financings. The Company entered into a joint warrant settlement agreement with St. George and Iliad to resolve a dispute regarding prior financings wherein St. George and Iliad agreed once they have exercised the warrants for an aggregate 14,250,000 shares of stock valued at approximately $2,423,000, the balance of the warrant would be cancelled so long as the Company has increased its authorized common stock. This amount was adjusted in 2021 due to the fair value of the stock resulted in a gain (reversal of original amount recorded as a loss/liability) of $1,025,000. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2021 | |
NOTES PAYABLE | |
Note 11 -notes Payable | NOTE 11 –NOTES PAYABLE Notes Payable as of December 31, 2021 consisted of the following: Inteerest Rate Principal Accrued Interest Balance Government Assistance Notes Economic Injury Disaster Loan (EZC) 3.75 % $ 149,900 $ 10,524 $ 160,424 Economic Injury Disaster Loan (GLI) 3.75 % 149,900 15,652 165,552 Paycheck Protection Program 1 % 362,500 6,350 368,850 Paycheck Protection Program 1 % 337,050 3,118 340,168 $ 999,350 $ 35,644 $ 1,034,994 Secured Promisory Note Coomercial Bank 3.44 % $ 137,728 $ - $ 137,728 Inteerest Rate Principal Accrued Interest Discount Balance Convertible Promisory Notes Bucktown 2-6-21 8 % $ 780,791 $ 10,303 $ - $ 791,094 Silverback 2-12-21 10 % 1,125,118 82,308 - 1,207,426 Bucktown 8-25-21 8 % 335,000 9,511 - 344,511 Bucktown 11-5-21 8 % 225,000 2,665 - 227,665 $ 2,465,909 $ 104,788 $ - $ 2,570,697 Amortizing Promisory Note First Fire 12 % 12,141 978 - 13,119 $ 2,478,050 $ 105,766 $ - $ 2,583,816 Notes payable as of December 31, 2020 consisted of the following: Inteerest Rate Principal Accrued Interest Balance Government Assistance Notes Economic Injury Disaster Loan (EZC) 3.75 % $ 149,900 $ 3,075 $ 152,975 Economic Injury Disaster Loan 3.75 % 149,900 3,001 152,901 Paycheck Protection Program 1 % 362,500 2,638 365,138 Paycheck Protection Program (EZC) 1 % 203,329 1,371 204,700 $ 865,629 $ 10,085 $ 875,714 Less long-term portion 485,679 Current portion of Government Assistance Notes $ 390,035 Parties related to EZC founders $ 49,144 $ - $ 49,144 Inteerest Rate Principal Accrued Interest Discount Balance Convertible Promisory Notes Iliad 8-17-18 10 % $ 250,637 $ 319,982 $ 570,619 Odyssey 7-22-19 10 % $ 390,000 $ 59,595 $ 449,595 CVP 1-29-20 10 % $ 555,000 $ 50,088 $ 605,088 Silverback 9-1-20 (from Iliad) 10 % 140,146 585 140,731 Silverback 11-18-20 (from Iliad) 10 % 117,380 1,894 119,274 PowerUp Lending Group 12 % 253,000 5,888 (13,912 ) 244,976 $ 1,706,163 $ 438,032 $ (13,912 ) $ 2,130,283 Amortizing Promisory Note Labrys 12 % 592,144 986 (454,430 ) 138,700 EMA 12 % 221,000 6,030 (87,535 ) 139,495 First Fire 12 % 156,602 3,964 (73,891 ) 86,675 $ 2,675,909 $ 449,012 $ (629,768 ) $ 2,495,153 Government Assistance Notes Payable On April 17, 2020, the Company received $362,500 under the Paycheck Protection Program of the U.S. Small Business Administration’s (SBA) 7(a) Loan Program pursuant to the Coronavirus, Aid, Relief and Economic Security Act (CARES Act), Pub. Law 116-136, 134 Stat. 281 (2020). The interest rate is one percent (1%). At December 31, 2021 and December 31, 2020, the Company recorded interest expense of $3,712 and $2,638, respectively. The loan is due April 2022. The Company is utilizing the funds in accordance with the legal requirements and expects this loan to be forgiven during 2022. On May 7, 2020, EZ-CLONE received $203,329 under the Paycheck Protection Program of the U.S. Small Business Administration’s 7(a) Loan Program pursuant to the Coronavirus, Aid, Relief and Economic Security Act (CARES Act), Pub. Law 116-136, 134 Stat. 281 (2020). The interest rate is one percent (1%). At December 31, 2021 and December 31, 2020, the Company recorded interest expense of $1,587 and $1,371, respectively. The loan is due April 2022. The Company is utilizing the funds in accordance with the legal requirements. This loan was forgiven in October 2021. On June 19, 2020, the Company, including its EZ-CLONE subsidiary, received two loans totaling $299,800 under the Economic Injury Disaster Loan Program of the U.S. Small Business Administration’s 7(a) Loan Program pursuant to the Coronavirus, Aid, Relief and Economic Security Act (CARES Act), Pub. Law 116-136, 134 Stat. 281 (2020). Repayment terms on the loans are monthly principal and interest totaling approximately $1,392 over a 30-year term at 3.75%. In addition, the loan contains a 12-month payment deferral beginning on the loan date. There is no prepayment penalty on the EIDL loans. At December 31, 2021 and December 31, 2020, the Company recorded interest expense of $11,856 and $7,152, respectively. On February 3, 2021, the Company received $337,050 under the Paycheck Protection Program of the U.S. Small Business Administration’s (SBA) 7(a) Loan Program pursuant to the Coronavirus, Aid, Relief and Economic Security Act (CARES Act), Pub. Law 116-136, 134 Stat. 281 (2020). The interest rate is one percent (1%). At December 31, 2021, the Company recorded interest expense of $3,113 at 1%. The loan is due February 2023. The Company is utilizing the funds in accordance with the legal requirements and expects this loan to be forgiven during 2023. Convertible Promissory Notes Chicago Venture Partners, L.P. Funding from Chicago Venture Partners, L.P. (“Chicago Venture” or “CVP”), Iliad Research and Trading, L.P. (“Iliad”) and Odyssey Research and Trading, LLC, (“Odyssey”). The Company typically issues original issuance discount notes with these parties that has a stated interest rate of typically 10%. Accrued interest represents the interest to be accreted over the remaining term of the notes. These notes contain terms and conditions that are deemed beneficial conversion features and the Company recognizes a derivative liability related to these terms until the notes are converted. Upon the conversion of these notes, the Company records a loss on debt conversion and reduces their derivative liability. The notes may be converted to common stock after six months until they are converted. On April 5, 2021, the Company finalized a a joint Warrant Settlement Agreement with St. George Investments LLC (“St. George”) and Iliad Research and Trading, L.P. (“Iliad”) to resolve a dispute related the calculation of shares issuable under warrants issued in prior financings. In the Warrant Settlement Agreement, in exchange for certain covenants by the Company, St. George and Iliad agreed that upon the exercise of its warrant of up to 14,250,000 shares of the Company’s common stock they would cancel the balance of the warrant related to a February 9, 2018, subscription agreement. The Company recorded a loss on debt settlement of $2,423,000 for the year ended December 31, 2020 and accrued a liability for the future issuance of shares. During 2021, the Company issued the 14,250,000 shares of common stock in connection with the warrant settlement. The Company recognized a gain on settlement of $1,025,400 in 2021 when the fair value of the common shares issued were based on the stock price on the date of settlement. As of December 31, 2020, the outstanding principal balance due to Chicago Venture, Iliad and Odyssey was $1,195,637 and accrued interest was $429,665 which results in a total amount of $1,625,302. During the year ended December 31, 2020, Chicago Venture and Iliad converted principal and accrued interest of $600,000 into 4,882,919 shares of our common stock at a per share conversion price of $0.123 with a fair value of $1,006,518. The Company recognized $287,466 loss on debt conversions during the year ended December 31, 2020. Odyssey Research and Trading, LLC, (“Odyssey”) On July 23, 2019, the Company executed the following agreements with Odyssey: (i) Securities Purchase Agreement; (ii) Secured Promissory Notes; and (iii) Security Agreement (collectively the “Odyssey Agreements”). The Company entered into the Odyssey Agreements with the intent to acquire working capital to grow the Company’s businesses. The total amount of funding under the Odyssey Agreements is $1,105,000. The Convertible Promissory Note carries an original issue discount of $100,000 and a transaction expense amount of $5,000, for total debt of $1,105,000. As of December 31, 2020 the principal balance owed Odyssey is $390,000. The Company agreed to reserve three times the number of shares based on the redemption value with a minimum of 3,333,334 shares of its common stock for issuance upon conversion of the Debt, if that occurs in the future. The Debt carries an interest rate of ten percent (10%). The Debt is convertible, at Odyssey’s option, into the Company’s common stock at $1.50 per share subject to adjustment as provided for in the Secured Promissory Notes. Labrys Fund L.P. On August 31, 2020, the Company executed the following agreements with Labrys: (i) Securities Purchase Agreement; and (ii) Self-Amortization Promissory Note for $750,000 (“Note”); (collectively the “Labrys Agreements”). The Company entered into the Labrys Agreements with the intent to acquire working capital to grow the Company’s businesses and complete the EZ-CLONE Enterprises, Inc. acquisition. The total amount of funding received under the Labrys Agreements, after deducting the $75,000 original issue discount and $42,250 of fees was $632,750. The Note required a payment of $250,000 on November 30, 2020, and $51,042 at each month end from December 2020 through November 30, 2021. The Company issued commitment shares of 1,662,000 shares related to the Labrys Agreement and the value of such shares are being treated as a discount and being amortized over the term of the note. The Debt was due on or before November 30, 2021. The Debt carried an interest rate of twelve percent (12%). Upon an event of default as defined in the agreement, the Debt was convertible into the Company’s common stock at the closing price the day before the conversion, subject to adjustment as provided for in the Note. The Company agreed to reserve 5,043,859 shares of its common stock for issuance if any Debt is converted. Labrys Fund Amendment #2 On November 30, 2020, the Company entered into Amendment No. 2 of the Self-Amortization Promissory Note (“Amendment No. 2”) amendment that certain Self-Amortization Promissory Note originally issued by the Company to Labrys on August 31, 2020 (the “Note”). Amendment No. 2 included the following amendments to the Note: 1. The Company issued 550,000 restricted shares of the Company’s common stock (the “Amendment Shares”) to the Holder on or before December 2, 2020, and the value of such shares are being amortized as a debt discount through the remaining term of the note. 2. The first Amortization Payment (as defined in the Note) of $250,000 originally due on November 30, 2020, shall instead be due as follows: $125,000 was paid by December 3, 2020, and $125,000 is due on or before December 31, 2020. Labrys Fund Amendment #3 On December 31, 2020, the Company entered into Amendment No. 3. Pursuant to Amendment No. 3 the Company issued 340,000 restricted shares of the Company’s common stock (the “Amendment Shares”) and issued a common stock purchase warrant for the purchase of 1,033,057 shares of the Company’s common stock (the “Warrant”). The value of the Amendment shares, and the Warrant are being amortized as a debt discount through the remaining term of the note. In exchange for the Warrant and Amendment Shares, the outstanding payment of $125,000 owed on or before December 31, 2020 (as described in Amendment No. 2) (“Outstanding Payment”), was amended so that no payment was required and that the future monthly payments beginning in January 2021 through November 30, 2022, have been increased to $61,458 from $51,042. This Note was assumed by Silverback in 2021. EMA Financial LLC On October 2, 2020, the Company executed the following agreements with EMA FirstFire Global Opportunities Fund, LLC On October 2, 2020, the Company executed the following agreements with FirstFire Global Opportunities Fund, LLC: (i) Securities Purchase Agreement; and (ii) Self-Amortization Promissory Note for $156,600 (“Note”). The Note has an interest rate of twelve percent (12%). The Company made monthly payments in the amount of $13,851. The final payment was made on January 12, 2022. Silverback Capital Corporation During 2020 Silverback Capital Corporation (“Silverback”) purchased from Iliad $993,855 of Iliad’s outstanding note balance with the Company. During the year ended December 31, 2020, Silverback Capital Corporation converted principal and accrued interest of $746,632 into 9,510,000 shares of our common stock at an average per share conversion price of $0.0757. The Company recognized $447,324 loss on Silverback debt conversions during the year ended December 31, 2020. During the three months ended March 31, 2021, Silverback purchased all of the remaining outstanding notes the Company had with Chicago Ventures, Iliad and Odyssey of $1,139,182. Silverback assumed the terms of the original notes. On March 16, 2021, the Company executed the following agreements with Silverback: (i) Securities Purchase Agreement; and (ii) Convertible Promissory Note for $165,000. The 10% Notes are convertible at the holder’s option into the Company’s common stock at 65% of the lower of $1.35 or the current fair market value of the stock. During the year ended December 31, 2021, Silverback converted principal and interest of $2,217,916 into 40,223,000 shares of our common stock at an average per share conversion price of $0.055. The Company recognized $2,442,903 loss on Silverback debt conversions during the year ended December 31, 2021. Power Up Lending Group Ltd. As of the beginning of 2020, the Company owed Power Up Lending Group Ltd (“Power Up”) $281,600. During 2020 the Company entered an additional $199,100 of convertible notes which were settled by year end. These $480,700 of notes were settled when $395,700 of notes were converted to common stock and a cash payment of $85,000 was made. As of December 31, 2020 the following Power Up convertible notes that the Company also entered into with Power Up on July 13, 2020, November 30, 2020, and December 8, 2020 for $253,000 to fund short-term working capital were still outstanding The Notes accrue interest at a rate of 12% per annum and became due in one year and are convertible into common stock at 75% of market value after six months. The Company received cash of $220,000 under these three notes after deducting original issue discount and fees. During the year ended December 31, 2021, Power Up converted principal of $84,680 into 1,039,018 shares of our common stock at a per share conversion price of $0.082. The Company recognized a loss on the conversion of $87,698 which represents the difference between the closing price of the shares and the exercise price. Bucktown Capital LLC On February 26, 2021, the Company executed the following agreements with Bucktown Capital LLC (“Bucktown”): (i) Securities Purchase Agreement; (ii) Secured Convertible Promissory Note; and (iii) Security Agreement (collectively the “Bucktown Agreements”). The Company entered the Bucktown Agreements with the intent to acquire working capital to grow the Company’s businesses and to repay all outstanding obligations owed to: (i) Labrys in the amount of $615,333; and (ii) Power Up in the amount of $128,858. The total amount of funding under the Bucktown Agreements is $3,088,000 as represented in the Secured Convertible Promissory Note (“Note”). The total purchase price for this Note is $2,850,000; the Note carries an aggregate original issue discount of $228,000 and a transaction expense amount of $10,000. The Note is comprised of two (2) tranches (each, a “Tranche”), consisting of (i) an initial Tranche in an amount equal to $928,000 and any interest, costs, fees or charges accrued thereon or added thereto under the terms of the Note and the Bucktown Agreements (the “Initial Tranche”), and (ii) an additional Tranche, which is exclusively dedicated for the purchase of the remaining equity interest in EZ-CLONE, in the amount of $2,160,000.00, plus any interest, costs, fees or charges accrued thereon or added thereto under the terms of the Note and the Bucktown Agreements (the “Subsequent Tranche”). The Initial Tranche shall correspond to $68,000 of the OID and the Transaction Expense Amount and may be converted into shares of Common Stock at any time after the Purchase Price Date. The Subsequent Tranche corresponds to the Investor Note and $160,000 of the aggregate OID. The Bucktown Agreement limits the shares to be held at any time not to exceed 9.9% of the Company’s outstanding shares. The Company agreed to reserve three times the number of shares based on the redemption value with a minimum of 23,340,000 shares of its common stock for issuance upon conversion of the Note, if that occurs in the future. If not converted sooner, the Note is due on or before February 26, 2022. The Note has an interest rate of eight percent (8%). The Note is convertible, at Bucktown’s option, into the Company’s common stock at $0.30 per share (“Lender Conversion Price”), subject to adjustment as provided for in the Note. However, in the event the Market Capitalization (as defined in the Note) falls below the Minimum Market Capitalization the Lender Conversion Price shall equal the lower of the Lender Conversion Price and the Market Price as of any applicable date of Conversion. On August 25, 2021, and on November 5, 2021, the Company entered into the following agreements with Bucktown: (i) Securities Purchase Agreements; (ii) Secured Convertible Promissory Notes; and (iii) Security Agreements. The total amount for these Notes is $560,000; the Note carries an aggregate original issue discount of $50,000 and a transaction expense amount of $10,000. The Notes have an interest rate of eight percent (8%). The Note is convertible, at Bucktown’s option, into the Company’s common stock at $0.10 per share (“Lender Conversion Price”), subject to adjustment as provided for in the Note. However, in the event the Market Capitalization (as defined in the Note) falls below the Minimum Market Capitalization the Lender Conversion Price shall equal the lower of the Lender Conversion Price and the Market Price as of any applicable date of Conversion. During the year ended December 31, 2021, Bucktown converted principal of $200,000 into 8,583,691 shares of our common stock at a per share conversion price of $0.023. The Company recognized on loss on the conversion of $117,597 which represents the difference between the closing price of the shares and the exercise price. The Company’s obligation to pay the Notes, or any portion thereof, are secured by all the Company’s assets. |
DERIVATIVE LIABILITY
DERIVATIVE LIABILITY | 12 Months Ended |
Dec. 31, 2021 | |
DERIVATIVE LIABILITY | |
Note 12 - Derivative Liability | NOTE 12 – DERIVATIVE LIABILITY The Convertible Notes payable include a conversion feature that pursuant ASC 815 “Derivatives and Hedging”, has been identified as an embedded derivative financial instrument and which the Company accounts for under the fair value method of accounting. If the conversion features of conventional convertible debt provide for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (BCF). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic 470-20. Debt with Conversion and Other Options. In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method. The debt is convertible at range of 75% to 65% of the fair value of the Company’s common stock requiring the conversion feature to be bifurcated from the host debt contract and accounting for separately as a derivative, resulting in periodic revaluations. The notes underlying the derivatives are short term in nature and generally converted to stock in less than one year. The derivative is valued at period end with the key inputs being current stock price and the conversion feature. There was a derivative liability of $2,583,816 and $1,101,436 as of December 31, 2021 and December 31, 2020, respectively. For the year ended December 31, 2021 and December 31, 2020, the Company recorded non-cash income of $973,101 and $199,479, respectively, related to the “change in fair value of derivative” expense related to the convertible note financing. These were the only changes in level 3 fair value instruments during such periods. Derivative liability as of December 31, 2021 was as follows: Balance, December 31, 2020 $ 1,101,436 Additions 1,402,519 Conversions (1,778,784 ) Change in fair value 973,101 Balance, December 31, 2021 $ 1,698,272 |
RELATED PARTY TRANSACTIONS AND
RELATED PARTY TRANSACTIONS AND CERTAIN RELATIONSHIPS | 12 Months Ended |
Dec. 31, 2021 | |
NOTES PAYABLE | |
Note 13 - Related Party Transactions And Certain Relationships | NOTE 13 – RELATED PARTY TRANSACTIONS AND CERTAIN RELATIONSHIPS Since January 1, 2019, the Company engaged in the following reportable transactions with our directors, executive officers, holders of more than 5% of our voting securities, and affiliates or immediately family members of our directors, executive officers and holders of more than 5% of our voting securities. Certain Relationships Please see the transactions with Chicago Venture Partners, L.P. discussed in Notes 11 and 14. Transactions with Marco Hegyi On October 21, 2018, a 5-year Warrant for Mr. Hegyi to purchase up to 66,666 shares of our common stock at an exercise price of $1.50 per share vested. The warrant was valued at $390,000 and we recorded $178,750 as compensation expense for the year ended December 31, 2018. On October 15, 2018, Mr. Hegyi received Warrants to purchase up to 320,000 shares of the Company’s common stock at an exercise price of $1.80 per share and which vest on October 15, 2018, 2019 and 2020. The Warrants are exercisable for 5 years. The warrants that vested on October 15, 2019 and 2018 were valued at $192,000 and the Company recorded compensation expense of $78,000 for the year ended December 31, 2020. On October 15, 2018, the Board of Directors approved an Employment Agreement with Marco Hegyi pursuant to which the Company engaged Mr. Hegyi as its Chief Executive Officer through October 15, 2021. See Note 17 for additional details. Transaction with Thom Kozik Mr. Kozik was appointed as a director on October 5, 2017. On April 16, 2020, the Company issued 20,000 shares of the Company’s common stock to Mr. Kozik valued at $0.295 per share or $5,900. On December 31, 2021, the Company issued 1,200,000 shares of the Company’s common stock to Mr. Kozik valued at $0.02 per share or $24,000. This issuance was an award for independent director services. Notes Payable and Receivable Related Parties EZ-CLONE had $49,144 due to relatives of the shareholders as of December 31, 2020. The amounts were repaid on May 10, 2021. At December 31, 2021 EZ-CLONE has $161,000 due from the two founders. The notes bear interest at 3% and are due in July 2041. |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
EQUITY | |
Note 14 - Equity | NOTE 14 – EQUITY Authorized Capital Stock On November 5, 2021, the Company held its 2021 Annual Meeting of Stockholders, where stockholders approved an increase in the authorized shares of common stock (“Common Stock”) from 120,000,000 to 740,000,000 shares. As such, the Company filed a Certificate of Amendment of Certificate of Incorporation with the Secretary of State of the State of Delaware on November 8, 2021. As a result of the increase, the Company an aggregate 750,000,000 authorized shares consisting of: (i) 740,000,000 shares of common stock, par value $0.0001 per share, and (ii) 10,000,000 shares of preferred stock, par value $0.0001 per share. On October 9, 2019, the Company approved the reduction of authorized capital stock, whereby the total number of the Company’s authorized common stock decreased from 6,000,000,000 by a ratio of 1 for 50, to 120,000,000 shares. On November 20, 2019, the Company filed a Certificate of Amendment of Certificate of Incorporation with the Secretary of State of the State of Delaware. The reverse stock split of 1 for 150 was effective at the open of business on November 27, 2019 whereupon the shares of the Company’s common stock began trading on a split-adjusted basis. Our CUSIP number will change to 39985X203. Preferred Stock Under the terms of our articles of incorporation, our board of directors is authorized to issue shares of non-voting preferred stock in one or more series without stockholder approval. Our board of directors has the discretion to determine the rights, preferences, privileges and restrictions, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of non-voting preferred stock. The purpose of authorizing our board of directors to issue non-voting preferred stock and determine our rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of non-voting preferred stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could have the effect of making it more difficult for a third party to acquire or could discourage a third party from seeking to acquire, a majority of our outstanding voting stock. Other than the Series B and C Preferred Stock discussed below, there are no shares of preferred stock presently outstanding, and we have no present plans to issue any shares of preferred stock. Capital Stock Issued and Outstanding As of December 31, 2021, the Company had issued and outstanding securities of 117,952,697 shares of common stock. Voting Common Stock Holders of the Company’s common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not have cumulative voting rights. An election of directors by our stockholders shall be determined by a plurality of the votes cast by the stockholders entitled to vote on the election. On all other matters, the affirmative vote of the holders of a majority of the stock present in person or represented by proxy and entitled to vote is required for approval, unless otherwise provided in our articles of incorporation, bylaws or applicable law. Holders of common stock are entitled to receive proportionately any dividends as may be declared by our board of directors, subject to any preferential dividend rights of outstanding preferred stock. In the event of our liquidation or dissolution, the holders of common stock are entitled to receive proportionately all assets available for distribution to stockholders after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock. Holders of common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of common stock are subject to and may be adversely affected by the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future. Unless otherwise indicated, all of the following sales or issuances of Company securities were conducted under the exemption from registration as provided under Section 4(2) of the Securities Act of 1933 (and also qualified for exemption under 4(5), formerly 4(6) of the Securities Act of 1933, except as noted below). All of the shares issued were issued in transactions not involving a public offering, are considered to be restricted stock as defined in Rule 144 promulgated under the Securities Act of 1933 and stock certificates issued with respect thereto bear legends to that effect. The Company has compensated consultants and service providers with restricted common stock during the development of our business and when our capital resources were not adequate to provide payment in cash. During the year ended December 31, 2021, the Company had the following issuances of unregistered equity securities to accredited investors unless otherwise indicated: Debt and accrued interest of $2,502,596 was converted into 49,845,718 shares of our common stock at an average per share conversion price of $0.099. Liability settlements of $2,442,500 was converted into 14,250,000 shares of our common stock at an average per share conversion price of $0.097. The Company issued 813,758 shares of the Company’s common stock in a cashless exercise of warrants. The Company issued 1,200,000 shares of the Company’s common stock to Thom Kozik, valued at $0.02 per share or $24,000. This issuance was an annual award for independent director services. During the year ended December 31, 2020, the Company had the following issuances of unregistered equity securities to accredited investors unless otherwise indicated: Debt and accrued interest of $1,947,819 was converted into 19,573,905 shares of our common stock at an average per share conversion price of $0.099. The Company issued 15 shares related to a previous reverse stock split. The Company issued 154 shares of common stock related to the exercise of warrants for $485, or $3.151 per share. On April 16, 2020, the Company issued 20,000 shares of the Company’s common stock each to Katherine McLain and Thom Kozik, directors valued at $0.295 per share or $5,900. This issuance was an annual award for independent director services. Warrants The Company had the following warrant activity during the year ended December 31, 2021: On April 5, 2021, the Company finalized a joint Warrant Settlement Agreement with St. George Investments LLC (“St. George”) and Iliad Research and Trading, L.P. (“Iliad”) to resolve a dispute related the calculation of shares issuable under warrants issued in prior financings. In the Warrant Settlement Agreement, in exchange for certain covenants by the Company, St. George and Iliad agreed that upon the issuance of 14,250,000 shares of the Company’s common stock it would cancel the balance of the warrants related to previous subscription agreements. The Company recorded a loss on debt settlement of $2,423,000 for the year ended December 31, 2020 and accrued a liability for the future issuance of shares. On April 5, 2021, the Company issued 2,500,000 shares upon the exercise of the warrant to reduce by $425,000 its obligation. On May 7, 2021, the Company issued another 3,500,000 shares upon the exercise of the warrant to further reduce by $595,000 its debt settlement obligation. On June 10, 2021, the Company issued 3,750,000 shares upon the exercise of the warrant to reduce its obligation by $637,500. On August 23, 2021, the Company issued another 2,300,000 shares upon the exercise of the warrant to reduce its obligation by $391,000. On September 29, 2021, the Company issued 2,200,000 shares upon the exercise of the warrant to reduce its obligation by $374,000 and completely payoff the balance of its obligation. The Company received no proceeds from these April, May, June, August, and September 2021 cashless warrant exercises. During the quarter ended September 30, 2021, the Company recognized a gain on settlement of $571,060 when the fair value of the common shares issued were based on the stock price on the date of settlement. In addition, as final settlement the Company issued 813,758 shares of common stock related to the cashless exercise of warrants The Company had the following warrant activity during the year ended December 31, 2020: On December 31, 2020, the Company entered into Amendment No. 3 to the Self-Amortization Promissory Note (“Amendment No. 3”) as originally issued by the Company to Labrys on August 31, 2020 (the “Note”), Pursuant to Amendment No. 3 the Company issued a common stock purchase warrant for the purchase of 1,033,057 shares of the Company’s common stock (the “Warrant”) to the Holder on December 31, 2020. The exercise price is $0.121 or $125,000. The three year warrant expires on December 31, 2023. The Company issued 154 shares of common stock related to the exercise of warrants for $485, or $3.151 per share. On April 5, 2021, the Company finalized a joint Warrant Settlement Agreement dated March 31, 2021 with St. George and Iliad to settle a dispute regarding prior financings. The Company agreed to issue St. George 11,750,000 shares of the Company’s common stock to cancel a warrant related to a February 9, 2018 subscription agreement. The Company agreed to issue Iliad 2,500,000 shares of the Company’s common stock to cancel a warrant related to a October 15, 2018 securities Purchase agreement. We recorded a loss on debt settlement of $2,423,000 for the year ended December 31, 2020 and accrued the liability as of December 31, 2020. A summary of the warrants activity as of December 31, 2021 is as follows: December 31, 2021 Shares Weighted Average Exercise Price Outstanding on January 1, 2021 3,451,736 $ 2.464 Exercised (1,138,344 ) 2.225 Forefeited (1,626,726 ) 2.742 686,666 $ 1.640 Exerciseable on December 31, 2021 686,666 Warrants had no intrinsic value as of December 31, 2021. |
STOCK OPTIONS
STOCK OPTIONS | 12 Months Ended |
Dec. 31, 2021 | |
STOCK OPTIONS | |
Note 15- Stock Options | NOTE 15– STOCK OPTIONS Description of Stock Option Plan On November 5, 2021, at our annual shareholder meeting the Second Amended and Restated 2017 Stock Incentive Plan was adopted to increase the shares issuable under the plan from 1,333,333 to 75,000,000 shares. All terms of the Plan shall remain the same with the exception of the amount of shares reserved for issuance under the Plan. We have 75,000,000 shares available for issuance under the Second Amended and Restated 2017 Stock Incentive Plan. The Company had no outstanding stock options as of December 31, 2021; and, had outstanding unexercised stock option grants totaling 506,667 shares at an average exercise price of $1.496 per share as of December 31, 2020, all of which were forfeited in 2021. The Company filed registration statements on Form S-8 to register 1,333,333 shares of our common stock related to the 2017 Stock Incentive Plan and First Amended and Restated 2017 Stock Incentive Plan. Determining Fair Value under ASC 718 The Company records compensation expense associated with stock options and other equity-based compensation using the Black-Scholes-Merton option valuation model for estimating fair value of stock options granted under our plan. The Company amortizes the fair value of stock options on a ratable basis over the requisite service periods, which are generally the vesting periods. The expected life of awards granted represents the period of time that they are expected to be outstanding. The Company estimates the volatility of our common stock based on the historical volatility of its own common stock over the most recent period corresponding with the estimated expected life of the award. The Company bases the risk-free interest rate used in the Black Scholes-Merton option valuation model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award. The Company has not paid any cash dividends on our common stock and does not anticipate paying any cash dividends in the foreseeable future. Consequently, the Company uses an expected dividend yield of zero in the Black-Scholes-Merton option valuation model and adjusts share-based compensation for changes to the estimate of expected equity award forfeitures based on actual forfeiture experience. The effect of adjusting the forfeiture rate is recognized in the period the forfeiture estimate is changed. Stock Option Activity During the year ended December 31, 2020, the Company had the following stock option activity: Stock option grants for 506,667 and 43,333 shares of common stock expired in the year ended December 31, 2021 and December 31, 2020, respectively. No options to purchase common shares were exercised during either year. As of December 31, 2021, and December 31, 2020, there are zero and 506,667, respectively, options to purchase common stock at an average exercise price of $1.496 per share outstanding under the 2017 Amended and Restated Stock Incentive Plan. The Company recorded $15,475 and $47,170 of compensation expense, net of related tax effects, relative to stock options for the year ended December 31, 2021and 2020 in accordance with ASC Topic 718. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2021 | |
Note 16 - Segment Reporting | NOTE 16 - SEGMENT REPORTING The management of the Company consider the business to have one operating segment for the year ended December 31, 2021. The management of the Company considers the business to have two operating segments (i) the distribution of GrowLife products and GrowLife, Inc. and (ii) EZ-CLONE, a manufacturer of cloning products. EZ-CLONE has provided the majority of the Company’s gross margins during 2020. The financial results from GrowLife products has been diminishing with the Company’s focus on EZ-CLONE. The reporting for the year ended December 31, 2020, was as follows (in thousands): Segment Revenue Gross Margin Operating Profit (Loss) Assets GrowLife $ 1,568 $ 314 $ (2,465 ) $ 108 EZ-CLONE Enterprises 5,433 2,666 575 4,247 Total $ 7,001 $ 2,980 $ (1,890 ) $ 4,355 |
COMMITMENTS CONTINGENCIES AND L
COMMITMENTS CONTINGENCIES AND LEGAL PROCEEDINGS | 12 Months Ended |
Dec. 31, 2021 | |
COMMITMENTS CONTINGENCIES AND LEGAL PROCEEDINGS | |
Note 17 - Commitments, Contingencies And Legal Proceedings | NOTE 17 – COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS Legal Proceedings From time to time, the Company may become subject to various legal proceedings that are incidental to the ordinary conduct of the Company’s business. Although we cannot accurately predict the amount of any liability that may ultimately arise with respect to any of these matters, it makes provision for potential liabilities when it deems them probable and reasonably estimable. These provisions are based on current information and may be adjusted from time to time according to developments. As of September 30, 2019, the Company closed retail stores in Portland, Maine, Encino, California and Calgary, Canada. The Company has recorded restructuring reserves related to the store closures. The Company cannot determine the outcome of these proceedings. On October 15, 2018, the Company closed the Purchase and Sale Agreement with EZ-CLONE Enterprises, Inc., a California corporation (the “Agreement”). On November 5, 2019, the Company amended the Agreement with one 24.5% shareholder of EZ-CLONE Enterprises, Inc. (“EZ-CLONE”), to extend the date to purchase the remaining 49% of stock of EZ-CLONE in exchange for a 20% extension fee (a total of $171,000 for the 49% or $85,500 for each 24.5% shareholder) of the $855,000 cash payable at the earlier of the closing of $2,000,000 in funding or nine months (July 2020). The Company did not close the purchase of the remaining 49% of stock of EZ-CLONE by the extended deadline. On September 15, 2020, the Company received notice that William Blackburn and Brad Mickelsen, minority shareholders of EZ-CLONE Enterprises, Inc. (“Plaintiffs”), a majority owned subsidiary of the Company, filed a complaint against the Company and its officers Marco Hegyi and Mark Scott (“Officers”), in the Superior Court of California, County of Sacramento (“Complaint”) for claims related to breach under the Purchase and Sale Agreement dated October 15, 2018 between the Company and Plaintiffs. On September 15, 2020, the Company filed a notice of removal with the California Superior Court, County of Sacramento and the United States District Court for the Eastern District of California. The case was removed to Federal District Court for the Eastern District of California and Plaintiffs filed an Ex Parte Application for TRO and an Order for Preliminary Injunction with the Federal Court. The TRO was granted on September 16, 2020 and a preliminary injunction hearing was scheduled for September 29, 2020. After reviewing all pleadings and oral arguments at the hearing, the Court issued a ruling granting Plaintiffs’ request for a preliminary injunction. After reviewing all pleadings and oral arguments at the hearing, the Court issued a ruling granting Plaintiffs’ request for a preliminary injunction. The Complaint also alleges that the Company and its Officers made certain false representations and other claims to consummate the Transaction and as a result has failed to complete the second closing as required under Purchase and Sale Agreement. As of December 4, 2020, the company’s officers were dismissed from the case. The Plaintiffs are seeking rescission of the Purchase and Sale Agreement, unspecified damages in excess of ten thousand dollars, and other equitable relief. The parties provided legal briefs to the Federal court to determine if rescission should be granted. The Court did not reach a decision on this issue, and denied without prejudice, the Company’s effort to reverse the preliminary injunction. The Company is currently reviewing whether to pursue the matter further and engaging in settlement discussions. We cannot determine the outcome of these proceedings. As of December 31, 2021, the Company recorded a liability of $2,131,000 for acquisition payable of which a $1,105,000 is payable in stock and $1,026,000 is payable in cash. On April 23, 2021, the Company was notified that it was in default on its notes held by Silverback Capital Corporation. The reason for the default was the Company’s inability to provide the reserve share requirement as specified in the notes. The penalty for the reserve share default was an increase in the outstanding note balances by 15%, an increase in the conversion discount by 5%, and a default interest rate on the outstanding note balances of 22%. The company recorded such amounts as debt extinguishment and as all amount were considered due on demand, such amount was expensed. As a result of the reserve share default, on May 7, 2021, Silverback demanded immediate payment in full of all their notes. On May 10, 2021, when Silverback had not been paid in full, Silverback presented another default notice for lack of payment. The penalty for the non-payment default was an increase in the outstanding note balances by another 15%, an additional increase in the conversion discount by 5%, and a default interest rate on the outstanding note balances of 22%. The company recorded such amount as debt extinguishment and as all amounts were considered due in demand, such amount was immediately expensed. Operating Leases The Company is obligated under the following leases for its various facilities. On May 31, 2021, the Company rented space at 11335 NE 122 nd On December 14, 2018, GrowLife, Inc. entered into a lease agreement with Pensco Trust Company for a 28,000 square feet industrial space at 10170 Croydon Way, Sacramento, California 95827 used for the assembly and sales of plastic parts by EZ-CLONE. The monthly lease payment is $17,500 and increases approximately 3% per year. The lease expires on December 31, 2023. Employment Agreements Employment Agreement with Marco Hegyi On October 15, 2018, the Board of Directors approved an Employment Agreement with Marco Hegyi pursuant to which we engaged Mr. Hegyi as its Chief Executive Officer through October 15, 2021. Mr. Hegyi’s annual compensation is $275,000. Mr. Hegyi is also entitled to receive an annual bonus equal to four percent (4%) of the Company’s EBITDA for that year. The annual bonus shall be paid no later than 31 days following the end of each calendar year. Mr. Hegyi received 320,000 warrants in October 2018 as follows: (i) Warrant to purchase up to 106,667 shares of our common stock at an exercise price of $1.80 per share which vested immediately; and (ii) two Warrants to purchase up to 106,667 shares of common stock of the Company at an exercise price of $1.80 per share. One warrant for 106,667 shares of our common stock vested on October 15, 2019. Additional warrants for 106,667 shares of the Company’s common stock vest on October 15, 2020 and 2021, respectively. The Warrants are exercisable for 5 years. Mr. Hegyi is entitled to participate in all group employment benefits that are offered by the Company to its senior executives and management employees from time to time, subject to the terms and conditions of such benefit plans, including any eligibility requirements. In addition, the Company will purchase and maintain during the Term an insurance policy on Mr. Hegyi’s life in the amount of $2,000,000 payable to Mr. Hegyi’s named heirs or estate as the beneficiary. If the Company terminates Mr. Hegyi’s employment at any time prior to the expiration of the Term without Cause, as defined in the Employment Agreement, or if Mr. Hegyi terminates his employment at any time for “Good Reason” or due to a “Disability”, Mr. Hegyi will be entitled to receive (i) his Base Salary amount through the end of the Term; and (ii) his Annual Bonus amount for each year during the remainder of the Term. The Employment Agreements for Mr. Hegyi expired October 15, 2021 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
Note 18 - Income Taxes | NOTE 18 – INCOME TAXES The Company has incurred losses since inception, which have generated net operating loss carryforwards. The net operating loss carryforwards arise solely from United States sources. EZ-CLONE currently files its own separate tax return as it does not meet the qualifications for being included in the Company’s consolidated tax returns. Taxable losses and the future benefit of EZ-CLONE losses since our transaction with them in October 2018 have not been material through 2019. During 2021 and 2020 EZ-CLONE generated taxable income and our current tax expense below relates to estimated taxes owed by EZ-CLONE. The Company has net operating loss carryforwards of approximately $25.8 million of which $14.1 million related to years prior to 2018 which expire in 2022 through -2038. Because it is not more likely than not that sufficient tax earnings will be generated to utilize the net operating loss carryforwards, the deferred tax asset related to the net operating loss carryforwards has a corresponding 100% valuation allowance. Additionally, under the Tax Reform Act of 1986, the amounts of, and benefits from, net operating losses may be limited in certain circumstances, including a change in control. Section 382 of the Internal Revenue Code generally imposes an annual limitation on the amount of net operating loss carryforwards that may be used to offset taxable income when a corporation has undergone significant changes in its stock ownership. There can be no assurance that the Company will be able to utilize any net operating loss carryforwards in the future. The Company is subject to possible tax examination for the years 2014 through 2021. For the year ended December 31, 2020 the Company’s effective tax rate was 4% which is higher than expected because the Company’s subsidiary EZ-CLONE files its own tax return and generated taxable income for the year. In accordance with the ASC 740, “Accounting for income taxes”, and in connection with the acquisition of EZ-CLONE the Company recorded a deferred tax liability of $587,750 related to the inside basis difference between book and tax basis of intangible assets acquired. Beginning in 2019, the deferred tax liability is reduced as the intangible assets are reduced. The reduction of the deferred tax liability resulted in a tax benefit of $117,550 in 2021 and 2020. As of December 31, 2021 and 2020 the deferred tax liability totals $235,097 and $352,649, respectively. For the years ended December 31, 2021 and 2020, income tax (expense) benefit consisted of the following: 2021 2020 Current income tax (expense) Federal (189,333 ) $ (263,982 ) State (79,905 ) (85,520 ) Total current tax (expense) (269,238 ) (349,502 ) Deferred tax benefit Federal 210,925 117,550 State 80,900 - Total deferred benefit 291,825 117,550 Total income tax (expense) $ (22,587 ) $ (231,952 ) The principal components of the Company’s deferred tax assets and liabilities at December 31, 2021 and 2020 are as follows: 2021 2020 Net operating loss carryforwards $ 7,018,000 $ 5,232,524 Less valuation allowance (7,018,000 ) (5,232,524 ) Net deferred tax asset - - Deferred tax liability - intangible basis (106,000 ) (352,649 ) Net deferred tax liability $ (106,000 ) $ (352,649 ) A reconciliation of the United States Federal Statutory rate to the Company’s effective tax rate for the years ended December 31, 2021 and 2020 is as follows: 2021 2020 Federal statutory rate 21 % 21 % State statutory rate 6 % 6 % Non-deductible interest and loss on extinguishment -24 % -27 % Change in valuation allowance -6 % -6 % Change in fair value of derivatives 3 % 2 % Effective tax (expense) rate 0 % -4 % |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
SUBSEQUENT EVENTS | |
Note 19- Subsequent Events | NOTE 19– SUBSEQUENT EVENTS The Company evaluates subsequent events, for the purpose of adjustment or disclosure, up through the date the financial statements are available. These were the material events after December 31, 2021: Securities Purchase Agreements and Convertible Promissory Notes On January 4, 2022 and on March 8, 2022 the Company executed the following agreements with Sixth Street Lending, LLC: (i) Securities Purchase Agreement; and (ii) Convertible Promissory Note; an (collectively the “Sixth Street Agreements”). The total amount of funding under the Sixth Street Agreements is $275,000 as represented in the Convertible Promissory Notes (“Note”). The total purchase price for these Notes are $310,200; the Notes carry an aggregate original issue discount of $28,200 and a transaction expense amount of $7,000. The Notes have maturity dates one year from the date of execution. The Notes have an interest rate of eight percent (8%). The Notes are convertible, at Sixth Street’s option, into the Company’s common stock at a 25% discount to market price (“Lender Conversion Price”), subject to adjustment as provided for in the Note. Debt Conversions On January 4, 2022, Silverback Capital Corporation converted principal and accrued interest of $50,400 into 4,800,000 shares of the Company’s common stock at a per share conversion price of $0.0105. On February 10, 2022, Bucktown converted principal and accrued interest of $180,000 into 11,764,706 shares of the Company’s common stock at a per share conversion price of $0.0153. On March 22, 2022, Silverback converted principal and accrued interest of $126,500 into 11,000,000 shares of the Company’s common stock at a per share conversion price of $0.0115. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS | |
Basis Of Presentation | Basis of Presentation - |
Principles Of Consolidation | Principles of Consolidation |
Cash And Cash Equivalents | Cash and Cash Equivalents |
Accounts Receivable And Revenue | Accounts Receivable and Revenue – |
Sales Returns | Sales Returns - |
Concentration Of Credit And Sales Risk | The Company had the following concentrations of credit and sales risk- Customers with over 10% of sales- the Company had two customers of EZ-CLONE that represented approximately 53% and 15% of consolidated revenue for the year ended December 31, 2021. Customers with over 10% of outstanding accounts receivable- one customer totaling 84.9% and 88.8% as of December 31, 2021 and 2020, respectively. |
Inventories | Inventories - |
Property And Equipment | Property and Equipment |
Long Lived Assets | Long Lived Assets |
Intangible Assets | Intangible Assets |
Goodwill | Goodwill - |
Fair Value Measurements And Financial Instruments | Fair Value Measurements and Financial Instruments Fair Value Measurement and Disclosures Level 1 – Quoted prices in active markets for identical assets and liabilities; Level 2 – Inputs other than level one inputs that are either directly or indirectly observable; and. Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The recorded value of other financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, other current assets, and accounts payable and accrued expenses approximate the fair value of the respective assets and liabilities as of December 31, 2021 and 2020 are based upon the short-term nature of the assets and liabilities. The Company’s derivative financial instruments are considered Level 3 instruments. See Note 12. |
Derivative Financial Instruments | Derivative Financial Instruments – |
Stock Based Compensation | Stock Based Compensation |
Convertible Securities | Convertible Securities |
Net Loss Per Share | Net Loss Per Share - As of December 31, 2021, there are warrants for the purchase of 686,666 shares of common shares at a $1.64 average exercise price. In addition, we have an unknown number of common shares to be issued under the convertible notes with Bucktown and Silverback Capital financing agreements and warrants because the number of shares ultimately issued depends on the price at which the holder converts its debt to shares and exercises its warrants. The lower the conversion or exercise prices, the more shares that will be issued to the holder upon the conversion of debt to shares. The Company will not know the exact number of shares of stock issued to the holder until the debt is actually converted to equity. As of December 31, 2020, there were (i) stock option grants outstanding for the purchase of 506,667 common shares at an $1.496 average exercise price; and (ii) warrants for the purchase of 3,451,737 shares of common shares at a $2.428 average exercise price. In addition, the Company have an unknown number of common shares to be issued under the Crossover financing agreements in the case of default. In addition, the Company had an unknown number of common shares to be issued under the Chicago Venture, Iliad and St. George financing agreements because the number of shares ultimately issued to Chicago Venture depends on the price at which Chicago Venture converts its debt to shares and exercises its warrants. The lower the conversion or exercise prices, the more shares that will be issued to Chicago Venture upon the conversion of debt to shares. |
Dividend Policy | Dividend Policy |
Use Of Estimates | Use of Estimates - |
Advertising | Advertising |
Comprehensive Loss | Comprehensive loss |
Research And Development Expenses | Research and Development Expenses |
Recent Accounting Pronouncements | Right of Use Assets and Liabilities- ASU 2016-02, Leases (Topic 842) , In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). Based on the Company’s review of accounting standard updates issued , there have been no other newly issued or newly applicable accounting pronouncements that have had, or are expected to have, a significant impact on the Company’s consolidated financial statements. |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INVENTORY | |
Inventory | December 31, 2021 December 31, 2020 Raw materials $ 723,834 $ 456,723 Work in proess 375,083 83,792 Finished goods 183,318 26,557 Inventory deposits 17,325 3,452 $ 1,299,560 $ 570,524 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT | |
Property And Equipment | December 31, 2021 December 31, 2020 Machinery, equipment and tooling $ 356,867 $ 356,867 Computer equipment 16,675 16,675 Leasehold equipment 14,702 14,702 Automobile 157,728 Total $ 545,972 $ 388,244 Less accumulated depreciation and amortization (296,066 ) (258,914 ) Net property and equipment $ 249,906 $ 129,330 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INTANGIBLE ASSETS | |
Intangible Assets | Estimated life December 31, 2021 December 31, 2020 Customer lists 3.5 Years $ 1,297,000 $ 1,297,000 Intellectual property 3.5 Years 1,054,000 1,054,000 Less accumulated amortization (1,891,998 ) (1,220,282 ) $ 459,002 $ 1,130,718 Goodwill Indefinite $ 781,749 $ 781,749 Total Intangibles and Goodwill $ 1,240,751 $ 1,912,467 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
LEASES | |
Minimum Future Lease Payments | Year ended Amount December 31, 2022 $ 232,741 December 31, 2023 236,352 $ 469,093 Imputed interest using 10% (41,956 ) Right of Use Liability $ 427,137 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
NOTES PAYABLE (Tables) | |
Schedule Of Notes Payable Maturities | Inteerest Rate Principal Accrued Interest Balance Government Assistance Notes Economic Injury Disaster Loan (EZC) 3.75 % $ 149,900 $ 10,524 $ 160,424 Economic Injury Disaster Loan (GLI) 3.75 % 149,900 15,652 165,552 Paycheck Protection Program 1 % 362,500 6,350 368,850 Paycheck Protection Program 1 % 337,050 3,118 340,168 $ 999,350 $ 35,644 $ 1,034,994 Secured Promisory Note Coomercial Bank 3.44 % $ 137,728 $ - $ 137,728 Inteerest Rate Principal Accrued Interest Discount Balance Convertible Promisory Notes Bucktown 2-6-21 8 % $ 780,791 $ 10,303 $ - $ 791,094 Silverback 2-12-21 10 % 1,125,118 82,308 - 1,207,426 Bucktown 8-25-21 8 % 335,000 9,511 - 344,511 Bucktown 11-5-21 8 % 225,000 2,665 - 227,665 $ 2,465,909 $ 104,788 $ - $ 2,570,697 Amortizing Promisory Note First Fire 12 % 12,141 978 - 13,119 $ 2,478,050 $ 105,766 $ - $ 2,583,816 Inteerest Rate Principal Accrued Interest Balance Government Assistance Notes Economic Injury Disaster Loan (EZC) 3.75 % $ 149,900 $ 3,075 $ 152,975 Economic Injury Disaster Loan 3.75 % 149,900 3,001 152,901 Paycheck Protection Program 1 % 362,500 2,638 365,138 Paycheck Protection Program (EZC) 1 % 203,329 1,371 204,700 $ 865,629 $ 10,085 $ 875,714 Less long-term portion 485,679 Current portion of Government Assistance Notes $ 390,035 Parties related to EZC founders $ 49,144 $ - $ 49,144 Inteerest Rate Principal Accrued Interest Discount Balance Convertible Promisory Notes Iliad 8-17-18 10 % $ 250,637 $ 319,982 $ 570,619 Odyssey 7-22-19 10 % $ 390,000 $ 59,595 $ 449,595 CVP 1-29-20 10 % $ 555,000 $ 50,088 $ 605,088 Silverback 9-1-20 (from Iliad) 10 % 140,146 585 140,731 Silverback 11-18-20 (from Iliad) 10 % 117,380 1,894 119,274 PowerUp Lending Group 12 % 253,000 5,888 (13,912 ) 244,976 $ 1,706,163 $ 438,032 $ (13,912 ) $ 2,130,283 Amortizing Promisory Note Labrys 12 % 592,144 986 (454,430 ) 138,700 EMA 12 % 221,000 6,030 (87,535 ) 139,495 First Fire 12 % 156,602 3,964 (73,891 ) 86,675 $ 2,675,909 $ 449,012 $ (629,768 ) $ 2,495,153 |
DERIVATIVE LIABILITY (Tables)
DERIVATIVE LIABILITY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
DERIVATIVE LIABILITY (Tables) | |
Schedule of Derivative Liability | Derivative liability as of December 31, 2021 was as follows: Balance, December 31, 2020 $ 1,101,436 Additions 1,402,519 Conversions (1,778,784 ) Change in fair value 973,101 Balance, December 31, 2021 $ 1,698,272 |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
EQUITY | |
Summary Of Warrants | December 31, 2021 Shares Weighted Average Exercise Price Outstanding on January 1, 2021 3,451,736 $ 2.464 Exercised (1,138,344 ) 2.225 Forefeited (1,626,726 ) 2.742 686,666 $ 1.640 Exerciseable on December 31, 2021 686,666 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Schedule Of Segment Reporting | Segment Revenue Gross Margin Operating Profit (Loss) Assets GrowLife $ 1,568 $ 314 $ (2,465 ) $ 108 EZ-CLONE Enterprises 5,433 2,666 575 4,247 Total $ 7,001 $ 2,980 $ (1,890 ) $ 4,355 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
Income Tax (expense) Benefit | 2021 2020 Current income tax (expense) Federal (189,333 ) $ (263,982 ) State (79,905 ) (85,520 ) Total current tax (expense) (269,238 ) (349,502 ) Deferred tax benefit Federal 210,925 117,550 State 80,900 - Total deferred benefit 291,825 117,550 Total income tax (expense) $ (22,587 ) $ (231,952 ) |
Deferred Tax Assets And Liabilities | 2021 2020 Net operating loss carryforwards $ 7,018,000 $ 5,232,524 Less valuation allowance (7,018,000 ) (5,232,524 ) Net deferred tax asset - - Deferred tax liability - intangible basis (106,000 ) (352,649 ) Net deferred tax liability $ (106,000 ) $ (352,649 ) |
Income Tax Reconciliation | 2021 2020 Federal statutory rate 21 % 21 % State statutory rate 6 % 6 % Non-deductible interest and loss on extinguishment -24 % -27 % Change in valuation allowance -6 % -6 % Change in fair value of derivatives 3 % 2 % Effective tax (expense) rate 0 % -4 % |
DESCRIPTION OF BUSINESS AND O_2
DESCRIPTION OF BUSINESS AND ORGANIZATION (Details Narrative) - USD ($) | Oct. 15, 2018 | Dec. 31, 2021 | Nov. 08, 2021 | Nov. 05, 2021 | Nov. 04, 2021 | Dec. 31, 2020 |
Common Stock Par Value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Preferred Stock | 10,000,000 | 10,000,000 | 10,000,000 | |||
Authorized Common Stock | 740,000,000 | 740,000,000 | 740,000,000 | 120,000,000 | 740,000,000 | |
Company An Aggregate Stock | 750,000,000 | |||||
Preferred Stock Par Value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Biding Price | $ 1,105,000 | $ 1,105,000 | ||||
Total Liability Of Acquisition Payable | $ 4,000,000 | 2,131,000 | 2,131,000 | |||
Cash Payable | 1,026,000 | 1,026,000 | ||||
Agreement Descriptions | 51% of this amount totaling $2,040,000 via a (i) a cash payment of $645,000; and (ii) the issuance of 715,385 restricted shares of our common stock valued $1,395,000. The Agreement called for the Company, upon delivery of the remaining 49% of EZ-Clone stock, to acquire such stock within one year for $1,960,000, payable as follows: (i) a cash payment of $855,000; and (ii) the issuance of Company’s common stock at a value of $1,105,000 | |||||
EZ-CLONE Cloning Manufacturing | ||||||
Total Liability Of Acquisition Payable | $ 213,100 | $ 2,131,000 | ||||
Purchase And Sale Agreement [Member] | ||||||
Agreement Descriptions | On November 5, 2019, the Company amended the Agreement with one 24.5% shareholder of EZ-CLONE Enterprises, Inc. (“EZ-CLONE”), to extend the date to purchase the remaining 49% of stock of EZ-CLONE in exchange for a 20% extension fee (a total of $171,000 for the 49% or $85,500 for each 24.5% shareholder) of the $855,000 cash payable at the earlier of the closing of $2,000,000 in funding or nine months (July 2020). The Company did not close the purchase of the | |||||
Purchase And Sale Agreement [Member] | EZ-CLONE Cloning Manufacturing | ||||||
Agreement Descriptions | On November 5, 2019, the Company amended the Agreement with one 24.5% shareholder of EZ-CLONE to extend the date to purchase the remaining 49% of stock of EZ-CLONE in exchange for a 20% extension fee (a total of $171,000 for the 49% or $85,500 for each 24.5% shareholder) of the $855,000 cash payable at the earlier of the closing of $2,000,000 in funding or nine months (July 2020) |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
DESCRIPTION OF BUSINESS AND ORGANIZATION | ||
Net Loss | $ (5,472,688) | $ (6,379,838) |
Cash (used In) Operating Activities | (1,462,515) | (1,950,870) |
Accumulated Deficit | $ (160,314,038) | $ (154,841,370) |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Advertising And Marketing Costs | $ 105,621 | $ 144,964 |
Risk-free interest rate | 1.00% | |
Expected life | 1 year | |
Expected dividend | 0.00% | |
Uninsured Deposits | $ 108,948 | |
Expected volatility, Minimum | 140.00% | |
Expected volatility, Maximum | 184.00% | |
Allowance For Doubtful Accounts | $ 10,000 | $ 5,690 |
Federal Deposit Insurance Amount | $ 250,000 | |
Stock Options Granted Upon Purchase Shares Of Common Stock | 506,667 | |
Stock Option, Weighted Average Exercise Price | $ 1.496 | |
Warrants Granted Upon Purchase Shares Of Common Stock | 686,666 | 3,451,737 |
Warrants, Weighted Average Exercise Price | $ 1.64 | $ 2.428 |
Concentration Of Risk | 84.90% | 88.80% |
Leasehold Improvment Descriptions | Depreciation is computed by the straight-line method over the estimated useful lives or lease period of the relevant asset, generally 3-10 years, except for leasehold improvements which are depreciated over the lesser of the life of the lease or 10 years | |
Two Customer [Member] | Revenue Net [Member] | ||
Concentration Of Risk | 15.00% | |
Two Customer [Member] | Sales Net [Member] | ||
Concentration Of Risk | 53.00% |
BUSINESS COMBINATIONS ACQUISI_2
BUSINESS COMBINATIONS ACQUISITION PAYABLE AND OTHER TRANSACTION (Details Narrative) - USD ($) | Oct. 15, 2018 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Intangible Assets | $ 235,100,000,000 | |||
Noncash Financing Interest Expense | 410,000 | $ 205,000 | ||
Acquisition Of Ez-clone Enterprises, Inc. Payable In Cash | 1,026,000 | 1,026,000 | ||
Discounted Value Of The Future Payments | 1,960,000 | |||
Extension Fee Payable | 171,000 | $ 171,000 | ||
Liability Payable In Stock | $ 2,500,000 | 900,000 | 1,105,000 | |
Acquisition Interest Rate | 100.00% | |||
Agreement Descriptions | 51% of this amount totaling $2,040,000 via a (i) a cash payment of $645,000; and (ii) the issuance of 715,385 restricted shares of our common stock valued $1,395,000. The Agreement called for the Company, upon delivery of the remaining 49% of EZ-Clone stock, to acquire such stock within one year for $1,960,000, payable as follows: (i) a cash payment of $855,000; and (ii) the issuance of Company’s common stock at a value of $1,105,000 | |||
Total Liability Of Acquisition Payable | $ 4,000,000 | 2,131,000 | 2,131,000 | |
Cash Payable | 1,500,000 | 1,026,000 | 1,026,000 | |
Liability Payable In Stock | $ 2,500,000 | 900,000 | 1,105,000 | |
Purchase And Sale Agreement [Member] | ||||
Agreement Descriptions | On November 5, 2019, the Company amended the Agreement with one 24.5% shareholder of EZ-CLONE Enterprises, Inc. (“EZ-CLONE”), to extend the date to purchase the remaining 49% of stock of EZ-CLONE in exchange for a 20% extension fee (a total of $171,000 for the 49% or $85,500 for each 24.5% shareholder) of the $855,000 cash payable at the earlier of the closing of $2,000,000 in funding or nine months (July 2020). The Company did not close the purchase of the | |||
EZ-CLONE Cloning Manufacturing | ||||
Acquisition Of Ez-clone Enterprises, Inc. Payable In Cash | 1,026,000 | 1,026,000 | ||
Liability Payable In Stock | 1,105,000 | 1,105,000 | ||
Total Liability Of Acquisition Payable | 213,100 | 2,131,000 | ||
Liability Payable In Stock | $ 1,105,000 | $ 1,105,000 | ||
EZ-CLONE Cloning Manufacturing | Purchase And Sale Agreement [Member] | ||||
Agreement Descriptions | On November 5, 2019, the Company amended the Agreement with one 24.5% shareholder of EZ-CLONE to extend the date to purchase the remaining 49% of stock of EZ-CLONE in exchange for a 20% extension fee (a total of $171,000 for the 49% or $85,500 for each 24.5% shareholder) of the $855,000 cash payable at the earlier of the closing of $2,000,000 in funding or nine months (July 2020) | |||
Cash Payable | $ 171,000 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
INVENTORY | ||
Raw Materials | $ 723,834 | $ 456,723 |
Work In Process | 375,083 | 83,792 |
Finished Goods | 183,318 | 26,557 |
Inventory Deposits | 17,325 | 3,452 |
Total Inventory | $ 1,299,560 | $ 570,524 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
PROPERTY AND EQUIPMENT | ||
Computer Equipment | $ 16,675 | $ 16,675 |
Machinery, Equipment And Tooling | 356,867 | 356,867 |
Leasehold Improvements | 14,702 | 14,702 |
Automobile | 157,728 | |
Total Property And Equipment | 545,972 | 388,244 |
Less Accumulated Depreciation And Amortization | (296,066) | (258,914) |
Net Property And Equipment | $ 249,906 | $ 129,330 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Depreciation Expense | $ 37,152 | $ 37,152 |
Total Property Plant And Equipment [Member] | ||
Depreciation Expense | $ 37,152 | $ 37,152 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Less: Accumulated Amortization | $ (1,891,998) | $ (1,220,282) |
Net Intangible Assets - Definitive Life | 459,002 | 1,130,718 |
Goodwill - Indefinite Life | 781,749 | 781,749 |
Total Intangible Assets And Goodwill | 1,240,751 | 1,912,467 |
Customer Lists | ||
Intangible Assets - Definitive Life, Gross | $ 1,297,000 | 1,297,000 |
Estimated Useful Lives | 3 years 6 months | |
Intellectual Property [Member] | ||
Intangible Assets - Definitive Life, Gross | $ 1,054,000 | $ 1,054,000 |
Estimated Useful Lives | 3 years 6 months |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
INTANGIBLE ASSETS | ||
Amortization Expense | $ 671,716 | $ 671,716 |
LEASES (Details)
LEASES (Details) | Dec. 31, 2021USD ($) |
LEASES | |
2022 | $ 232,741 |
2023 | 236,352 |
Total Lease Liability | 469,093 |
Less: Imputed Interest | (41,956) |
Right Of Use Liability | $ 427,137 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
LEASES | ||
Operating Lease Liability | $ 427,137 | |
Right-of-use Assets And Operating Lease Liabilities | 230,385 | $ 211,575 |
Right-of-use Assets | 407,166 | 380,247 |
Lease Cost | $ 232,524 | $ 222,984 |
ACCOUNTS PAYABLE (Details Narra
ACCOUNTS PAYABLE (Details Narrative) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
ACCOUNTS PAYABLE | ||
Accounts Payable | $ 1,146,344 | $ 1,146,195 |
ACCRUED EXPENSES (Details Narra
ACCRUED EXPENSES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
ACCOUNTS PAYABLE | ||
Accrued Expenses | $ 219,398 | $ 2,592,251 |
Warrants Shares To Be Issued | 14,250,000 | |
Warrant Authorized, Amount | $ 2,423,000 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 17, 2020 |
Convertible Notes Payable, Net | $ 2,583,816 | $ 2,495,153 | |
Convertible Notes Payable [Member] | |||
Principal | 2,465,909 | 1,706,163 | |
Accrued Interest | 104,788 | 438,032 | |
Convertible Notes Payable, Net | 2,570,697 | 2,130,283 | |
Debt Discounts | 0 | (13,912) | |
Convertible Notes Payable [Member] | Bucktown 2-6-21 | |||
Principal | 780,791 | ||
Accrued Interest | $ 10,303 | ||
Interest Rate | 8.00% | ||
Convertible Notes Payable, Net | $ 791,094 | ||
Debt Discounts | 0 | ||
Convertible Notes Payable [Member] | Bucktown 8-25-21 | |||
Principal | 335,000 | ||
Accrued Interest | $ 9,511 | ||
Interest Rate | 8.00% | ||
Convertible Notes Payable, Net | $ 344,511 | ||
Debt Discounts | 0 | ||
Convertible Notes Payable [Member] | Bucktown 11-5-21 | |||
Principal | 225,000 | ||
Accrued Interest | $ 2,665 | ||
Interest Rate | 8.00% | ||
Convertible Notes Payable, Net | $ 227,665 | ||
Debt Discounts | 0 | ||
Convertible Notes Payable [Member] | Silverback 2-12-21 | |||
Principal | 1,125,118 | ||
Accrued Interest | $ 82,308 | ||
Interest Rate | 10.00% | ||
Convertible Notes Payable, Net | $ 1,207,426 | ||
Debt Discounts | 0 | ||
Convertible Notes Payable [Member] | EMA | |||
Principal | 221,000 | ||
Accrued Interest | $ 6,030 | ||
Interest Rate | 12.00% | ||
Convertible Notes Payable, Net | $ 139,495 | ||
Debt Discounts | (87,535) | ||
Convertible Notes Payable [Member] | Odyssey 7-22-19 | |||
Principal | 390,000 | ||
Accrued Interest | $ 59,595 | ||
Interest Rate | 10.00% | ||
Convertible Notes Payable, Net | $ 449,595 | ||
Convertible Notes Payable [Member] | CVP 1-29-20 | |||
Principal | 555,000 | ||
Accrued Interest | $ 50,088 | ||
Interest Rate | 10.00% | ||
Convertible Notes Payable, Net | $ 605,088 | ||
Convertible Notes Payable [Member] | Silverback 9-1-20 (from Iliad) | |||
Principal | 140,146 | ||
Accrued Interest | $ 585 | ||
Interest Rate | 10.00% | ||
Convertible Notes Payable, Net | $ 140,731 | ||
Convertible Notes Payable [Member] | Labrys | |||
Principal | 592,144 | ||
Accrued Interest | $ 986 | ||
Interest Rate | 12.00% | ||
Convertible Notes Payable, Net | $ 138,700 | ||
Debt Discounts | (454,430) | ||
Convertible Notes Payable [Member] | Iliad 8-17-18 | |||
Principal | 250,637 | ||
Accrued Interest | $ 319,982 | ||
Interest Rate | 10.00% | ||
Convertible Notes Payable, Net | $ 570,619 | ||
Convertible Notes Payable [Member] | Silverback 11-18-20 (from Iliad) | |||
Principal | 117,380 | ||
Accrued Interest | $ 1,894 | ||
Interest Rate | 10.00% | ||
Convertible Notes Payable, Net | $ 119,274 | ||
Convertible Notes Payable [Member] | PowerUp Lending Group | |||
Principal | 253,000 | ||
Accrued Interest | $ 5,888 | ||
Interest Rate | 12.00% | ||
Convertible Notes Payable, Net | $ 244,976 | ||
Debt Discounts | (13,912) | ||
Convertible Notes Payable [Member] | Total | |||
Principal | 2,478,050 | 2,675,909 | |
Accrued Interest | 105,766 | 449,012 | |
Convertible Notes Payable, Net | 2,583,816 | 2,495,153 | |
Debt Discounts | 0 | (629,768) | |
Economic Injury Disaster Loan (EZC) | |||
Principal | 149,900 | 149,900 | |
Accrued Interest | $ 10,524 | $ 3,075 | |
Interest Rate | 3.75% | 3.75% | |
Convertible Notes Payable, Net | $ 160,424 | $ 152,975 | |
Economic Injury Disaster Loan (GLI) | |||
Principal | 149,900 | 149,900 | |
Accrued Interest | $ 15,652 | $ 3,001 | |
Interest Rate | 3.75% | 3.75% | |
Convertible Notes Payable, Net | $ 165,552 | $ 152,901 | |
Paycheck Protection Program One | |||
Principal | 362,500 | 362,500 | |
Accrued Interest | $ 6,350 | $ 2,638 | |
Interest Rate | 1.00% | 1.00% | |
Convertible Notes Payable, Net | $ 368,850 | $ 365,138 | |
Paycheck Protection Program Two | |||
Principal | 337,050 | 203,329 | |
Accrued Interest | $ 3,118 | $ 1,371 | |
Interest Rate | 1.00% | 1.00% | |
Convertible Notes Payable, Net | $ 340,168 | $ 204,700 | |
First Fire [Member] | |||
Principal | 12,141 | ||
Accrued Interest | $ 978 | ||
Interest Rate | 12.00% | ||
Convertible Notes Payable, Net | $ 13,119 | ||
Debt Discounts | 0 | ||
First Fire [Member] | Convertible Notes Payable [Member] | |||
Principal | 156,602 | ||
Accrued Interest | $ 3,964 | ||
Interest Rate | 12.00% | ||
Convertible Notes Payable, Net | $ 86,675 | ||
Debt Discounts | (73,891) | ||
Parties related to EZC founders | |||
Principal | 49,144 | ||
Accrued Interest | 0 | ||
Convertible Notes Payable, Net | 49,144 | ||
Coomercial Bank | |||
Principal | 137,728 | ||
Accrued Interest | $ 0 | ||
Interest Rate | 3.44% | ||
Convertible Notes Payable, Net | $ 137,728 | ||
Government Assistance Notes | |||
Principal | 999,350 | 865,629 | |
Accrued Interest | 35,644 | 10,085 | |
Convertible Notes Payable, Net | $ 1,034,994 | 875,714 | $ 362,500 |
Less Long-term Portion | 485,679 | ||
Current Portion Of Government Assistance Notes | $ 390,035 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | Apr. 05, 2021 | Oct. 02, 2020 | Aug. 25, 2021 | Feb. 26, 2021 | Nov. 30, 2020 | Aug. 31, 2020 | Jun. 19, 2020 | Jul. 23, 2019 | Dec. 31, 2021 | Nov. 30, 2021 | Dec. 31, 2020 | Jan. 04, 2022 | Feb. 03, 2021 | Dec. 03, 2020 | May 07, 2020 | Apr. 17, 2020 | Dec. 31, 2019 |
New Share Issued | 813,758 | ||||||||||||||||
Number Of Shares Based On Redemption Value | 14,250,000 | ||||||||||||||||
Convertible Notes Payable, Net | $ 2,583,816 | $ 2,495,153 | |||||||||||||||
Interest Expenses | 3,252,191 | 1,089,734 | |||||||||||||||
First Fire [Member] | |||||||||||||||||
Accrued Interest | 978 | ||||||||||||||||
Interest Rate | 12.00% | ||||||||||||||||
Convertible Notes Payable, Net | 13,119 | ||||||||||||||||
Self Amortization Promissory Note | $ 156,600 | ||||||||||||||||
Total Monthly Payments | $ 13,851 | ||||||||||||||||
Government Assistance Notes | |||||||||||||||||
Accrued Interest | 35,644 | 10,085 | |||||||||||||||
Interest Rate | 1.00% | ||||||||||||||||
Convertible Notes Payable, Net | 1,034,994 | 875,714 | $ 362,500 | ||||||||||||||
Interest Expenses | 3,712 | 2,638 | |||||||||||||||
Paycheck Protection Program | |||||||||||||||||
Interest Rate | 1.00% | ||||||||||||||||
Convertible Notes Payable, Net | $ 337,050 | ||||||||||||||||
Interest Expenses | 3,113 | ||||||||||||||||
Silverback Capital Corporation [Member] | |||||||||||||||||
Accrued Interest | 2,217,916 | 746,632 | |||||||||||||||
Loss On Debt Conversion | $ (2,442,903) | $ 447,324 | |||||||||||||||
Conversion Price | $ 0.055 | $ 0.0757 | $ 0.0105 | ||||||||||||||
Total Purchase Price | $ 1,139,182 | ||||||||||||||||
Number Of Shares Based On Redemption Value | 40,223,000 | 9,510,000 | |||||||||||||||
Convertible Notes Payable, Net | $ 165,000 | ||||||||||||||||
Purchase From Iliad | 993,855 | ||||||||||||||||
Power Up Lending Group Ltd. | |||||||||||||||||
Principal | $ 84,680 | $ 281,600 | |||||||||||||||
Loss On Debt Conversion | $ 87,698 | (287,466) | |||||||||||||||
Conversion Price | $ 1.50 | $ 0.082 | |||||||||||||||
Number Of Shares Based On Redemption Value | 1,039,018 | ||||||||||||||||
Settlement Of Additional Convertible Notes | $ 199,100 | ||||||||||||||||
Desription Of Settlement | These $480,700 of notes were settled when $395,700 of notes were converted to common stock and a cash payment of $85,000 was made. As of December 31, 2020 the following Power Up convertible notes that the Company also entered into with Power Up on July 13, 2020, November 30, 2020, and December 8, 2020 for $253,000 to fund short-term working capital were still outstanding The Notes accrue interest at a rate of 12% per annum and became due in one year and are convertible into common stock at 75% of market value after six months. The Company received cash of $220,000 under these three notes after deducting original issue discount and fees. | ||||||||||||||||
Bucktown 2-6-21 | |||||||||||||||||
Principal | $ 200,000 | ||||||||||||||||
Loss On Debt Conversion | $ (117,597) | ||||||||||||||||
Interest Rate | 8.00% | 8.00% | |||||||||||||||
Conversion Price | $ 0.10 | $ 0.30 | $ 0.023 | ||||||||||||||
Funding Amount | $ 560,000 | $ 3,088,000 | |||||||||||||||
Total Purchase Price | 2,850,000 | ||||||||||||||||
Original Issue Discount | 50,000 | 228,000 | |||||||||||||||
Transaction Expenses | $ 10,000 | $ 10,000 | |||||||||||||||
Description Of Settlements | The Company entered the Bucktown Agreements with the intent to acquire working capital to grow the Company’s businesses and to repay all outstanding obligations owed to: (i) Labrys in the amount of $615,333; and (ii) Power Up in the amount of $128,858. | ||||||||||||||||
Share Reserved For Future Issuance | 8,583,691 | 23,340,000 | |||||||||||||||
Tranche Expense | $ 928,000 | ||||||||||||||||
Additional Tranche Expense | 2,160,000 | ||||||||||||||||
Aggregate Oid | $ 160,000 | ||||||||||||||||
Labrys Fund Three | |||||||||||||||||
Issuance Of Restricted Shares | 340,000 | ||||||||||||||||
Common Stock Purchase For Warrants | 1,033,057 | ||||||||||||||||
Outstanding Payment | $ 125,000 | ||||||||||||||||
Future Monthly Payment Desription | payment was required and that the future monthly payments beginning in January 2021 through November 30, 2022, have been increased to $61,458 from $51,042. This Note was assumed by Silverback in 2021. | ||||||||||||||||
EMA | |||||||||||||||||
Interest Rate | 12.00% | ||||||||||||||||
Self Amortization Promissory Note | $ 221,000 | ||||||||||||||||
Total Monthly Payments | $ 19,550 | ||||||||||||||||
Self Amortization Promissory Note Member | Labrys Fund L.P. | |||||||||||||||||
Interest Rate | 12.00% | ||||||||||||||||
Funding Amount | $ 632,750 | ||||||||||||||||
Original Issue Discount | $ 75,000 | ||||||||||||||||
Share Reserved For Future Issuance | 5,043,859 | ||||||||||||||||
Convertible Notes Payable, Net | $ 750,000 | ||||||||||||||||
Total Fees Paid For Funding | $ 51,042 | $ 750,000 | |||||||||||||||
Payment For Note | 250,000 | ||||||||||||||||
Issue Of Commitment Share | 1,662,000 | ||||||||||||||||
Convertible Notes Payable [Member] | |||||||||||||||||
Accrued Interest | $ 104,788 | $ 438,032 | |||||||||||||||
Convertible Notes Payable, Net | 2,570,697 | 2,130,283 | |||||||||||||||
Convertible Notes Payable [Member] | First Fire [Member] | |||||||||||||||||
Accrued Interest | 3,964 | ||||||||||||||||
Convertible Notes Payable, Net | 86,675 | ||||||||||||||||
Convertible Notes Payable [Member] | Odyssey 7-22-19 | |||||||||||||||||
Principal | $ 390,000 | ||||||||||||||||
Accrued Interest | 59,595 | ||||||||||||||||
Interest Rate | 10.00% | ||||||||||||||||
Conversion Price | $ 1.50 | ||||||||||||||||
Funding Amount | $ 1,105,000 | ||||||||||||||||
Total Purchase Price | $ 1,105,000 | ||||||||||||||||
Number Of Shares Based On Redemption Value | 3,333,334 | ||||||||||||||||
Original Issue Discount | $ 100,000 | ||||||||||||||||
Transaction Expenses | $ 5,000 | ||||||||||||||||
Convertible Notes Payable, Net | 449,595 | ||||||||||||||||
Convertible Notes Payable [Member] | Chicago Venture Partners, L.P. | |||||||||||||||||
Principal | 1,625,302 | ||||||||||||||||
Exercise Of Warrants | 14,250,000 | ||||||||||||||||
Loss On Debt Settlement | 1,025,400 | 2,423,000 | |||||||||||||||
New Share Issued | 14,250,000 | ||||||||||||||||
Outstanding Principal | 1,195,637 | ||||||||||||||||
Conversion Of Principal And Accrued Interest | $ 600,000 | ||||||||||||||||
Share Converted | 4,882,919 | ||||||||||||||||
Stock Conversion Price | $ 0.123 | ||||||||||||||||
Accrued Interest | $ 429,665 | ||||||||||||||||
Fair Value Of Debt | 1,006,518 | ||||||||||||||||
Loss On Debt Conversion | (287,466) | ||||||||||||||||
Convertible Notes Payable [Member] | Bucktown 2-6-21 | |||||||||||||||||
Accrued Interest | 10,303 | ||||||||||||||||
Convertible Notes Payable, Net | 791,094 | ||||||||||||||||
Convertible Notes Payable [Member] | Labrys Fund Two | |||||||||||||||||
Amortization Paid | 125,000 | $ 125,000 | |||||||||||||||
Amortization Payment | $ 250,000 | ||||||||||||||||
Convertible Notes Payable [Member] | EMA | |||||||||||||||||
Accrued Interest | 6,030 | ||||||||||||||||
Convertible Notes Payable, Net | 139,495 | ||||||||||||||||
Convertible Notes Payable [Member] | EZ-CLONE | |||||||||||||||||
Interest Rate | 3.75% | 1.00% | |||||||||||||||
Convertible Notes Payable, Net | $ 299,800 | $ 203,329 | |||||||||||||||
Interest Expenses | $ 1,587 | $ 1,371 | |||||||||||||||
Repayment Of Debt | $ 1,392 | ||||||||||||||||
Payment Term | 30 years |
DERIVATIVE LIABILITY (Details)
DERIVATIVE LIABILITY (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
DERIVATIVE LIABILITY | |
Begginng, Balance | $ 1,101,436 |
Additions | 1,402,519 |
Conversion | (1,778,784) |
Change in fair value | 973,101 |
Ending, Balance | $ 1,698,272 |
DERIVATIVE LIABILITY (Details N
DERIVATIVE LIABILITY (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative Instruments | $ 2,583,816 | $ 1,101,436 |
Change In Fair Value Of Derivative Liability | $ 973,101 | $ 199,479 |
Conversion Feature | $ 1.35 | |
Maximum [Member] | ||
Percentage Of Debt Convertible | 75.00% | |
Minimum [Member] | ||
Percentage Of Debt Convertible | 65.00% |
RELATED PARTY TRANSACTIONS AN_2
RELATED PARTY TRANSACTIONS AND CERTAIN RELATIONSHIPS (Details Narrative) - USD ($) | Oct. 15, 2018 | Oct. 31, 2018 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | Apr. 16, 2020 |
Note bear interest description | interest at 3% and are due in July 2041 | |||||
Description Of Related Party | the Company engaged in the following reportable transactions with our directors, executive officers, holders of more than 5% of our voting securities, and affiliates or immediately family members of our directors, executive officers and holders of more than 5% of our voting securities | |||||
Thom Kozik [Member] | ||||||
Common Stock Issued | 1,200,000 | 20,000 | ||||
Share Price | $ 0.02 | $ 0.295 | $ 0.295 | |||
Common Stock Issued Value | $ 24,000 | $ 5,900 | ||||
Two Founders [Member] | ||||||
Due To Related Party | $ 161,000 | |||||
Relatives of shareholders [Member] | ||||||
Due To Related Party | $ 49,144 | |||||
Mr. Hegyi [Member] | ||||||
Common Stock Vested | 66,666 | |||||
Vesting Period | 5 years | |||||
Exercise Price | $ 1.80 | $ 1.50 | ||||
Warrants Value | 192,000 | $ 390,000 | ||||
Compensation Expense | $ 78,000 | $ 178,750 | ||||
Warrants Exercised | 320,000 | |||||
Warrants Exercisable Period | 5 years |
EQUITY (Details)
EQUITY (Details) - Warrant with St. George Investments LLC [Member] | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Outstanding, Beginning Of Period | 3,451,736 |
Exercised | (1,138,344) |
Forfeited | (1,626,726) |
Expired | (686,666) |
Exercisable, End Of Period | 686,666 |
Weighted Average Exercise Price, Beginning Of Period | $ / shares | $ 2.464 |
Weighted Average Exercise Price, Exercised | $ / shares | 2.225 |
Weighted Average Exercise Price, Forfeited | $ / shares | 2.742 |
Weighted Average Exercise Price, Expired | $ / shares | $ 1.640 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | Oct. 09, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 08, 2021 | Nov. 05, 2021 | Nov. 04, 2021 | Sep. 29, 2021 | Aug. 23, 2021 | Jun. 10, 2021 | May 07, 2021 | Apr. 05, 2021 | Apr. 16, 2020 | Nov. 20, 2019 |
Authorized Common Stock Decreased | 120,000,000 | 120,000,000 | 120,000,000 | ||||||||||
Stock Issued During Period, Shares | 813,758 | ||||||||||||
Capital Stock Issued | 117,952,697 | 51,843,221 | |||||||||||
Stock Split Ratio | 1 for 50 | ||||||||||||
Common Stock, Par Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||
Authorized Preferred Stock | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||
Preferred Stock, Par Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||
Debt And Accrued Interest | $ 2,502,596 | $ 1,947,819 | |||||||||||
Conversion Price Per Share | $ 0.099 | $ 0.099 | |||||||||||
Shares Issued For Settlement Of Liability | 14,250,000 | ||||||||||||
Shares Issued Related To Warrant, Shares | $ 154 | ||||||||||||
Warrant Excise Price | $ 3.151 | ||||||||||||
Shares Issued Related To Warrant, Amount | $ 485 | ||||||||||||
Warrant To Purchase Of Common Stock Shares | 49,845,718 | 19,573,905 | |||||||||||
Stock Issued During Period, Amount | $ 24,000 | $ 11,800 | |||||||||||
Authorized Common Stock | 740,000,000 | 740,000,000 | 740,000,000 | 740,000,000 | 120,000,000 | ||||||||
Warrant [Member] | |||||||||||||
Shares Issued Related To Warrant, Shares | $ 154 | ||||||||||||
Warrant Excise Price | $ 3.151 | ||||||||||||
Shares Issued Related To Warrant, Amount | $ 485 | ||||||||||||
Warrant Settlement Agreement [Member] | |||||||||||||
Debt And Accrued Interest | $ 2,442,500 | ||||||||||||
Conversion Price Per Share | $ 0.097 | ||||||||||||
Shares Issued Related To Warrant, Shares | $ 1,033,057 | ||||||||||||
Warrant Excise Price | $ 0.121 | ||||||||||||
Shares Issued Related To Warrant, Amount | $ 125,000 | ||||||||||||
Warrant To Purchase Of Common Stock Shares | 14,250,000 | ||||||||||||
Gain (loss) On Debt Settlement | $ 571,060 | 2,423,000 | |||||||||||
Loss On Debt Settlement | $ 813,758 | ||||||||||||
Shares Issued Upon Exercise Of Warrant | 2,200,000 | 2,300,000 | 3,750,000 | 3,500,000 | 2,500,000 | ||||||||
Shares Issued Upon Exercise Of Warrant To Reduce Obligations | $ 374,000 | $ 391,000 | $ 637,500 | $ 595,000 | $ 425,000 | ||||||||
Maximum [Member] | |||||||||||||
Authorized Common Stock | 6,000,000,000 | 740,000,000 | |||||||||||
Warrant with St. George Investments LLC [Member] | |||||||||||||
Stock Issued During Period, Shares | 11,750,000 | ||||||||||||
LLiad [Member] | |||||||||||||
Stock Issued During Period, Shares | 2,500,000 | ||||||||||||
Thom Kozik [Member] | |||||||||||||
Stock Issued During Period, Shares | 1,200,000 | 20,000 | |||||||||||
Stock Issued During Period, Amount | $ 24,000 | $ 5,900 | |||||||||||
Shares Price | $ 0.02 | $ 0.295 | $ 0.295 |
STOCK OPTIONS (Details Narrativ
STOCK OPTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
First Amended and Restated 2017 Stock Incentive Plan | ||
Compensation Expense Related To Stock Incentive Plan | $ 15,475 | $ 47,170 |
Shares Available For Issuance | 1,333,333 | |
Outstanding Unexercised Stock Option Grants | 506,667 | 506,667 |
Outstanding Unexercised Stock Option Grants, Exercise Price | $ 1.496 | $ 1.496 |
Options To Purchase Common Stock | 75,000,000 | |
Description Of Stock Option Grants Common Stock | shares issuable under the plan from 1,333,333 to 75,000,000 shares | |
2018 Stock Incentive Plan | ||
Granted Option To Purchase Common Stock | 506,667 | 43,333 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue | $ 7,001,000 | |
Gross Profit | 2,980,000 | |
Operating Loss | (1,890) | |
Assets | 4,355,000 | |
Revenue | $ 6,199,089 | 7,000,812 |
Gross Profit | 2,793,434 | 2,980,242 |
Loss From Operations | $ (1,524,982) | (1,889,962) |
Growlife [Member] | ||
Revenue | 1,568,000 | |
Gross Profit | 314,000 | |
Loss From Operations | (2,465,000) | |
Assets | 108,000 | |
EZCLONE Cloning Manufacturings [Member] | ||
Revenue | 5,433,000 | |
Gross Profit | 2,666,000 | |
Loss From Operations | 575,000 | |
Assets | $ 4,247,000 |
COMMITMENTS CONTINGENCIES AND_2
COMMITMENTS CONTINGENCIES AND LEGAL PROCEEDINGS (Details Narrative) - USD ($) | Oct. 15, 2018 | May 31, 2021 | Apr. 23, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Monthly Lease Payment | $ 623 | $ 17,500 | |||
Monthly Lease Payment Percent | 3.00% | ||||
Liability Payable In Stock | $ 1,105,000 | ||||
Cash Payable | 1,026,000 | $ 1,026,000 | |||
Total Liability Of Acquisition Payable | $ 4,000,000 | 2,131,000 | 2,131,000 | ||
Percent Of Outstaning Amount Increase | 15.00% | ||||
Additional Increase In Conversion Discount | 5.00% | ||||
Default Interest Rate | 22.00% | ||||
Agreement Descriptions | On November 5, 2019, the Company amended the Agreement with one 24.5% shareholder of EZ-CLONE Enterprises, Inc. (“EZ-CLONE”), to extend the date to purchase the remaining 49% of stock of EZ-CLONE in exchange for a 20% extension fee (a total of $171,000 for the 49% or $85,500 for each 24.5% shareholder) of the $855,000 cash payable at the earlier of the closing of $2,000,000 in funding or nine months (July 2020). The Company did not close the purchase of the remaining 49% of stock of EZ-CLONE by the extended deadline | ||||
Cash Payable For 49% | $ 1,500,000 | 1,026,000 | 1,026,000 | ||
EZ-CLONE Cloning Manufacturing | |||||
Total Liability Of Acquisition Payable | 213,100 | $ 2,131,000 | |||
Purchase And Sale Agreement [Member] | EZ-CLONE Cloning Manufacturing | |||||
Cash Payable For 49% | $ 171,000 | ||||
Extension Fees | 20.00% | ||||
Cash Payable For 24.5% | $ 855,000 | ||||
Cash Payable | 855,000 | ||||
Closing Amount | $ 2,000,000 | ||||
Marco Hegyi [Member] | |||||
Annual Salary | $ 275,000 | ||||
Annual Bonus Percent | 4.00% | ||||
Exercise Price | $ 1.80 | ||||
Number Of Warrants Received | 320,000 | ||||
Warrant To Purchase Common Stock | 106,667 | ||||
Waarant Excisable Period | 5 years | ||||
Group Empyment Benfits Amount | $ 2,000,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current Tax (expense) : | ||
Federal | $ (189,333) | $ (263,982) |
State | (79,905) | (85,520) |
Total Current Tax (expense) | 269,238 | 349,502 |
Deferred Tax Benefit: | ||
Federal | (210,925) | (117,550) |
State | (80,900) | 0 |
Total Deferred Benefit | 291,825 | (117,550) |
Total Income Tax (expense) Benefit, Net | $ 22,587 | $ 231,952 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
INCOME TAXES | ||
Net Operating Loss Carryforwards | $ 7,018,000 | $ 5,232,524 |
Less Valuation Allowance | (7,018,000) | (5,232,524) |
Net Deferred Tax Asset | 0 | 0 |
Deferred Tax Liability - Intangible Basis Difference | (106,000) | (352,649) |
Net Deferred Tax Liability | $ (106,000) | $ (352,649) |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAXES | ||
Federal Statutory Rate | (21.00%) | (21.00%) |
State Statutory Rate | (6.00%) | (6.00%) |
Non-deductible interest and loss on extinguishment | 6.00% | 6.00% |
Change in valuation allowance | 24.00% | 27.00% |
Change in fair value of derivatives | 3.00% | 2.00% |
Effective tax (expense) rate | 0.00% | (4.00%) |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | |
Net Operating Loss Carryforwards | $ 25,800,000 | $ 14,100,000 | |
Net Operating Loss Carryforwards, Valuation Allowance, Percentage | 100.00% | ||
Net Operating Loss Carryforwards Expiration | 2022 through -2038 | ||
Effective Tax | 4.00% | ||
Deferred Tax Liability | $ 106,000 | $ 352,649 | |
EZCLONE Cloning Manufacturings [Member] | |||
Reduction Of The Deferred Tax Liability | 117,550 | 117,550 | |
Deferred Tax Liability | 587,750 | ||
Deferred Tax Liability Totals | $ 235,097 | $ 352,649 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 12 Months Ended | ||||||
Dec. 31, 2021 | Mar. 22, 2022 | Feb. 10, 2022 | Jan. 04, 2022 | Aug. 25, 2021 | Feb. 26, 2021 | Dec. 31, 2020 | |
Convertible Promissory Notes | $ 1,728,873 | ||||||
Coomon Stock Shares | 117,952,697 | 51,843,221 | |||||
Bucktown 2-6-21 | |||||||
Conversion Price Per Share | $ 0.023 | $ 0.10 | $ 0.30 | ||||
Bucktown 2-6-21 | Subsequent Event [Member] | |||||||
Conversion Price Per Share | $ 0.0153 | ||||||
Accrued Interest | $ 180,000 | ||||||
Coomon Stock Shares | 11,764,706 | ||||||
Silverback [Member] | Subsequent Event [Member] | |||||||
Conversion Price Per Share | $ 0.0115 | ||||||
Coomon Stock Shares | 11,000,000 | ||||||
Silverback Capital Corporation [Member] | |||||||
Conversion Price Per Share | $ 0.055 | $ 0.0105 | $ 0.0757 | ||||
Accrued Interest | $ 50,400 | ||||||
Coomon Stock Shares | 4,800,000 | ||||||
Sixth Street Agreements [Member] | |||||||
Convertible Promissory Notes | $ 275,000 | ||||||
Purchase Price | 310,200 | ||||||
Aggregate Original Issue Discount | 28,200 | ||||||
Transaction Expense | $ 7,000 | ||||||
Interest Rate | 8.00% |