Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 24, 2022 | Jun. 30, 2021 | |
Document Information Line Items | |||
Entity Registrant Name | ZONED PROPERTIES, INC. | ||
Trading Symbol | N/A | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 12,201,548 | ||
Entity Public Float | $ 5,508,789 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001279620 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 000-51640 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 46-5198242 | ||
Entity Address, Address Line One | 8360 E. Raintree Drive | ||
Entity Address, Address Line Two | #230 | ||
Entity Address, City or Town | Scottsdale | ||
Entity Address, State or Province | AZ | ||
Entity Address, Postal Zip Code | 85260 | ||
City Area Code | (877) | ||
Local Phone Number | 360-8839 | ||
Title of 12(b) Security | N/A | ||
Security Exchange Name | NONE | ||
Entity Interactive Data Current | Yes | ||
Auditor Name | D. Brooks and Associates CPAs, P.A. | ||
Auditor Location | Palm Beach Gardens, Florida | ||
Auditor Firm ID | 4048 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Cash | $ 1,191,940 | $ 699,335 |
Accounts receivable | 7,909 | 4,988 |
Deferred rent receivable | 164,770 | 173,757 |
Rental properties, net | 6,441,465 | 7,027,436 |
Prepaid expenses and other assets | 32,350 | 104,062 |
Convertible note receivable | 200,000 | 100,000 |
Property and equipment, net | 13,918 | 17,059 |
Intangible asset, net | 9,450 | |
Investment in unconsolidated joint ventures | 74,554 | |
Security deposits | 1,100 | 1,100 |
Total Assets | 8,137,456 | 8,127,737 |
LIABILITIES: | ||
Convertible note payable | 2,000,000 | 2,000,000 |
Convertible note payable - related party | 20,000 | 20,000 |
Accounts payable | 11,244 | |
Accrued expenses | 108,364 | 92,750 |
Accrued interest - related party | 5,400 | 4,200 |
Deferred revenues | 4,750 | 3,250 |
Security deposits payable | 71,800 | 71,800 |
Total Liabilities | 2,221,558 | 2,192,000 |
Commitments and Contingencies (Note 11) | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock, $0.001 par value, 5,000,000 shares authorized; 2,000,000 shares issued and outstanding at December 31, 2021 and 2020 ($1.00 per share liquidation preference or $2,000,000) | 2,000 | 2,000 |
Common stock: $0.001 par value, 100,000,000 shares authorized; 12,201,548 and 12,011,548 issued and outstanding at December 31, 2021 and 2020, respectively | 12,202 | 12,012 |
Additional paid-in capital | 21,000,563 | 20,854,773 |
Accumulated deficit | (15,098,867) | (14,933,048) |
Total Stockholders’ Equity | 5,915,898 | 5,935,737 |
Total Liabilities and Stockholders’ Equity | $ 8,137,456 | $ 8,127,737 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 2,000,000 | 2,000,000 |
Preferred stock, shares outstanding | 2,000,000 | 2,000,000 |
Preferred stock, liquidation preference (in Dollars per share) | $ 1 | $ 1 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 12,201,548 | 12,011,548 |
Common stock, shares outstanding | 12,201,548 | 12,011,548 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
REVENUES: | ||
Rental revenues | $ 1,261,059 | $ 1,125,346 |
Advisory revenues | 146,031 | 90,096 |
Brokerage revenues | 413,395 | |
Total revenues | 1,820,485 | 1,215,442 |
OPERATING EXPENSES: | ||
Compensation and benefits | 488,607 | 342,692 |
Professional fees | 397,877 | 195,684 |
Brokerage fees | 265,208 | |
General and administrative expenses | 201,625 | 190,806 |
Depreciation | 386,643 | 362,833 |
Real estate taxes | 87,769 | 85,694 |
Gain on sale of rental property | (51,944) | |
Total operating expenses | 1,775,785 | 1,177,709 |
INCOME FROM OPERATIONS | 44,700 | 37,733 |
OTHER (EXPENSES) INCOME: | ||
Interest expenses | (120,000) | (120,000) |
Interest expenses - related party | (1,200) | (1,200) |
Interest income | 12,127 | 5,129 |
Impairment loss from unconsolidated joint ventures | (73,970) | |
Loss from unconsolidated joint ventures | (27,476) | |
Total other expenses, net | (210,519) | (116,071) |
LOSS BEFORE INCOME TAXES | (165,819) | (78,338) |
PROVISION FOR INCOME TAXES | ||
NET LOSS | $ (165,819) | $ (78,338) |
NET LOSS PER COMMON SHARE: | ||
Basic (in Dollars per share) | $ (0.01) | $ (0.01) |
Diluted (in Dollars per share) | $ (0.01) | $ (0.01) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||
Basic (in Shares) | 12,175,623 | 12,009,745 |
Diluted (in Shares) | 12,175,623 | 12,009,745 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance, at Dec. 31, 2019 | $ 2,000 | $ 11,902 | $ 20,806,452 | $ (14,854,710) | $ 5,965,644 |
Balance, (in Shares) at Dec. 31, 2019 | 2,000,000 | 11,901,548 | |||
Common stock issued for services | $ 110 | 24,090 | 24,200 | ||
Common stock issued for services (in Shares) | 110,000 | ||||
Accretion of stock based compensation related to stock options issued | 24,231 | 24,231 | |||
Net loss | (78,338) | (78,338) | |||
Balance, at Dec. 31, 2020 | $ 2,000 | $ 12,012 | 20,854,773 | (14,933,048) | 5,935,737 |
Balance, (in Shares) at Dec. 31, 2020 | 2,000,000 | 12,011,548 | |||
Common stock issued for services | $ 130 | 51,870 | 52,000 | ||
Common stock issued for services (in Shares) | 130,000 | ||||
Common stock issued for intangible asset | $ 60 | 37,740 | 37,800 | ||
Common stock issued for intangible asset (in Shares) | 60,000 | ||||
Accretion of stock based compensation related to stock options issued | 56,180 | 56,180 | |||
Net loss | (165,819) | (165,819) | |||
Balance, at Dec. 31, 2021 | $ 2,000 | $ 12,202 | $ 21,000,563 | $ (15,098,867) | $ 5,915,898 |
Balance, (in Shares) at Dec. 31, 2021 | 2,000,000 | 12,201,548 |
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 | $ (165,819) | $ (78,338) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation expense | 358,294 | 362,833 |
Amortization expense | 28,350 | |
Stock-based compensation | 52,000 | 24,200 |
Stock option expense | 56,180 | 24,231 |
Gain on sale of rental property | (51,944) | |
Impairment loss from unconsolidated joint ventures | 73,970 | |
Loss from unconsolidated joint ventures | 27,476 | |
Change in operating assets and liabilities: | ||
Accounts receivable | (2,921) | 3,200 |
Deferred rent receivable | 8,987 | (173,757) |
Prepaid expenses and other assets | 71,712 | 9,530 |
Accounts payable | 11,244 | |
Accrued expenses | 16,278 | (1,891) |
Accrued expenses - related parties | 1,200 | 1,200 |
Deferred revenues | 1,500 | 1,500 |
Security deposits payable | 2,750 | (2,668) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 489,257 | 170,040 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of convertible note receivable | (100,000) | (100,000) |
Purchases of rental property improvements | (40,360) | (9,563) |
Purchases of property and equipment | (2,624) | (923) |
Net proceeds from sale of rental property | 322,332 | |
Investment in joint ventures | (176,000) | |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 3,348 | (110,486) |
NET INCREASE IN CASH | 492,605 | 59,554 |
CASH, beginning of year | 699,335 | 639,781 |
CASH, end of year | 1,191,940 | 699,335 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Interest paid | 120,000 | 120,000 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock issued for intangible asset | $ 37,800 |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS Zoned Properties, Inc. (“Zoned Properties” or the “Company”), was incorporated in the State of Nevada on August 25, 2003. The Company renamed the corporation, Zoned Properties, Inc., and shifted its business model during the first quarter of 2014. The Company is now a real estate development firm for emerging and highly regulated industries, including regulated cannabis. The Company is redefining the approach to commercial real estate investment through its integrated growth services. Headquartered in Scottsdale, Arizona, Zoned Properties has developed a full spectrum of integrated growth services to support its real estate development and investment model; Advisory Services, Brokerage Services, Franchise Services, and Property Technology (“PropTech”) Data Services each cross-pollinate within the model to drive project value associated with complex real estate projects. With national experience and a team of experts devoted to the emerging cannabis industry, Zoned Properties is addressing the specific needs of a modern market in highly regulated industries. Zoned Properties is an accredited member of the Better Business Bureau, the U.S. Green Building Council, and the Forbes Real Estate Council. The Company does not grow, harvest, sell or distribute cannabis or any substances regulated under United States law such as the Controlled Substance Act of 1970, as amended (the “CSA”). The Company has the following wholly owned subsidiaries: ● Gilbert Property Management, LLC (“Gilbert”) was organized in the State of Arizona on February 10, 2014. ● Chino Valley Properties, LLC (“Chino Valley”) was organized in the State of Arizona on April 15, 2014. ● Kingman Property Group, LLC (“Kingman”) was organized in the State of Arizona on April 15, 2014. ● Green Valley Group, LLC (“Green Valley”) organized in the State of Arizona on April 15, 2014. ● Zoned Oregon Properties, LLC was organized in the State of Oregon on June 16, 2015. ● Zoned Colorado Properties, LLC (“Zoned Colorado”) was organized in the State of Colorado on September 17, 2015. ● Zoned Illinois Properties, LLC was organized in the State of Illinois on July 15, 2015. ● Zoned Arizona Properties, LLC (“Zoned Arizona”) was organized in the State of Arizona on June 2, 2017. ● Zoned Advisory Services, LLC (“Zoned Advisory”) was organized in the State of Arizona on July 27, 2018. ● Zoned Properties Brokerage, LLC (“Zoned Brokerage”) was organized in the State of Arizona on March 17, 2021. ● ZP Data Platform 1, LLC (“ZP Data”) was organized in the State of Arizona on April 14, 2021. On April 22, 2021, ZP Data entered into a Limited Liability Company Operating Agreement (the “Beakon Operating Agreement”) with a non-affiliated joint venture partner in connection with the formation of Beakon, LLC (“Beakon”), a Delaware limited liability company formed on April 16, 2021 (See Note 7). On May 1, 2021, the Company entered into a Limited Liability Company Operating Agreement (the “Zoneomics Operating Agreement”) with a non-affiliated joint venture partner in connection with the formation of Zoneomics Green, LLC (“Zoneomics Green”), a Delaware limited liability company formed on May 1, 2021 (See Note 7). In March 2020, the World Health Organization declared COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. The Company is monitoring this closely, and although operations have not been materially affected by the COVID-19 outbreak to date, the ultimate duration and severity of the outbreak and its impact on the economic environment and our business is uncertain. Currently, all of the properties in the Company’s portfolio are open to its Significant Tenants pursuant to state and local government requirements. At this time, the Company does not foresee any material changes to its operations from COVID-19. The Company’s tenants are continuing to generate revenue at these properties, and they have continued to make rental payments in full and on time and we believe the tenants’ liquidity position is sufficient to cover its expected rental obligations. Accordingly, while the Company does not anticipate an impact on its operations, it cannot estimate the duration of the pandemic and potential impact on its business if the properties must close or if the tenants are otherwise unable or unwilling to make rental payments. In addition, a severe or prolonged economic downturn could result in a variety of risks to the Company’s business, including weakened demand for its properties and a decreased ability to raise additional capital when needed on acceptable terms, if at all. At this time, the Company is unable to estimate the impact of this event on its operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and principles of consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Use of estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates for the years ended December 31, 2021 and 2020 include the collectability of accounts and note receivable, the useful life of rental properties and property and equipment, assumptions used in assessing impairment of long-term assets including rental property and investment in joint ventures, valuation allowances for deferred tax assets, and the fair value of non-cash equity transactions, including options and stock-based compensation. Risks and uncertainties The Company’s operations are subject to risk and uncertainties including financial, operational, regulatory and other risks including the potential risk of business failure. The Company conducts a significant portion of its business in Arizona. Additionally, the Company’s tenants operate in the medical marijuana industry. Consequently, any significant economic downturn in the Arizona market or any changes in the federal government’s enforcement of current federal laws or changes in state laws could potentially have a negative effect on the Company’s business, results of operations and financial condition. Additionally, substantially all of the Company’s real estate properties are leased under triple-net leases to tenants that are controlled by one entity (each, a “Significant Tenant” and collectively, the “Significant Tenants”). For the years ended December 31, 2021 and 2020, rental and advisory revenue associated with the Significant Tenants amounted to $1,255,130 and $1,176,666, respectively, which represents 68.9% and 98.6% of the Company’s total revenues, respectively (see Note 3). Fair value of financial instruments The carrying amounts reported in the consolidated balance sheets for cash, accounts receivable, prepaid expenses and other assets, accounts payable, accrued expenses, and other payables approximate their fair market value based on the short-term maturity of these instruments. The carrying amount of the convertible note receivable approximates fair value based on the current interest rates for instruments with similar characteristics. The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (the “FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company did not identify any assets or liabilities that are required to be presented on the balance sheet at fair value in accordance with Accounting Standards Codification (“ASC”) Topic 820. Cash Cash is carried at cost and represents cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. The Company had no cash equivalents on December 31, 2021 and 2020. The majority of the Company’s cash is held at major commercial banks, which may at times exceed the Federal Deposit Insurance Corporation (“FDIC”) limit. To date, the Company has not experienced any losses on its invested cash. On December 31, 2021 and 2020, the Company had approximately $942,000 and $449,000, respectively, of cash in excess of FDIC limits of $250,000. Accounts and convertible notes receivable The Company recognizes an allowance for losses on accounts and notes receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current receivables aging and expected future write-offs, as well as an assessment of specific identifiable customer accounts and notes receivable considered at risk or uncollectible. The expense associated with the allowance for doubtful accounts is recognized in general and administrative expense. For the years ended December 31, 2021 and 2020, the Company did not record any allowances for doubtful accounts. Investment in joint ventures The Company has equity investments in various privately held entities. The Company accounts for these investments either under the equity method or cost method of accounting depending on the Company’s ownership interest and level of influence. Investments accounted for under the equity method are recorded based upon the amount of the Company’s investment and adjusted each period for its share of the investee’s income or loss. Investments are reviewed for changes in circumstance or the occurrence of events that suggest an other than temporary event where our investment may not be recoverable. The Company evaluates its investments in these entities for consolidation. It considers its percentage interest in the joint venture, evaluation of control and whether a variable interest entity exists when determining whether or not the investment qualifies for consolidation or if it should be accounted for as an unconsolidated investment under either the equity method of accounting. If an investment qualifies for the equity method of accounting, the Company’s investment is recorded initially at cost, and subsequently adjusted for equity in net income (loss) and cash contributions and distributions. The net income or loss of an unconsolidated investment is allocated to its investors in accordance with the provisions of the operating agreement of the entity. The allocation provisions in these agreements may differ from the ownership interest held by each investor. Differences, if any, between the carrying amount of our investment in the respective joint venture and the Company’s share of the underlying equity of such unconsolidated entity are amortized over the respective lives of the underlying assets as applicable. These items are reported as a single line item in the statements of operations as income or loss from investments in unconsolidated affiliated entities. Rental properties Rental properties are carried at cost, less accumulated depreciation and amortization. Betterments, major renovations and certain costs directly related to the improvement of rental properties are capitalized. Maintenance and repair expenses are charged to expense as incurred. Depreciation is recognized on a straight-line basis over estimated useful lives of the assets, which range from 5 to 39 years. Tenant improvements are amortized on a straight-line basis over the lives of the related leases, which approximate the useful lives of the assets. Upon the acquisition of real estate, the Company assesses the fair value of acquired assets (including land, buildings and improvements, identified intangibles, such as acquired above-market leases and acquired in-place leases) and acquired liabilities (such as acquired below-market leases) and allocate the purchase price based on these assessments. The Company assesses fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including historical operating results, known trends, and market/economic conditions. The Company’s rental properties are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an undiscounted basis. An impairment loss is measured based on the excess of the property’s carrying amount over its estimated fair value. Impairment analyses are based on our current plans, intended holding periods and available market information at the time the analyses are prepared. If the Company’s estimates of the projected future cash flows, anticipated holding periods, or market conditions change, the Company’s evaluation of impairment losses may be different and such differences could be material to its consolidated financial statements. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results. For the years ended December 31, 2021 and 2020, the Company did not record any impairment losses. The Company has capitalized land, which is not subject to depreciation. Property and equipment Property and equipment is stated at cost, less accumulated depreciation. Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful lives. The Company uses a five-year life for office equipment, seven years for furniture and fixtures, and five to ten years for vehicles. Expenditures for maintenance and repairs are charged to expense as incurred. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Revenue recognition The Company follows ASC Topic 606, Revenue from Contracts with Customers Rental income includes base rents that each tenant pays in accordance with the terms of its respective lease and is reported on a straight-line basis over the non-cancellable term of the lease, which includes the effects of rent abatements under the leases. The Company commences rental revenue recognition when the tenant takes possession of the leased space or controls the physical use of the leased space and the leased space is substantially ready for its intended use. Currently, the Company’s leases provide for payments with fixed monthly base rents over the term of the leases. The leases also require the tenant to remit estimated monthly payments to the Company for property taxes. These payments are recorded as rental income and the related property tax expense reflected separately on the statements of operations. Revenues from advisory services is recognized when the Company performs services pursuant to its agreements with clients and collectability is reasonably assured. Brokerage revenues primarily consist of real estate sales commissions and are recognized upon the successful completion of all required services which is when escrow closes. In accordance with the guidelines established for reporting revenue gross as a principal versus net as an agent in ASC Topic 606, the Company records commission revenues and expenses on a gross basis. Of the criteria listed in ASC Topic 606, the Company is the primary obligor in the transaction, does not have inventory risk, performs all or part of the service, has credit risk, and has wide latitude in establishing the price of services rendered and discretion in selection of agents and determination of service specifications. Brokerage revenues that are payable upon payment of rent or other events beyond the Company’s control are recognized upon the occurrence of such events. Lease accounting ASU 2016-02, “ Leases (Topic 842)” For contracts entered into on or after the effective date, where the Company is the lessee, at the inception of a contract, the Company assess whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether we have the right to direct the use of the asset. The Company allocates the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. For leases entered into on or after the effective date, where the Company is the lessor, at the inception of the contract, the Company assesses whether the contract is a sales-type, direct financing or operating lease by reviewing the terms of the lease and determining if the lessee obtains control of the underlying asset implicitly or explicitly. If a change to a pre-existing lease occurs, the Company evaluates if the modification results in a separate new lease or a modified lease. A new lease results when a modification provides additional right of use. The new lease or modified lease is then reassessed to determine its classification based on the modified terms. As disclosed in Note 3, on January 1, 2019, the Chino Valley lease was modified to increase the monthly base rent from $35,000 to $40,000. Additionally, on May 31, 2020, the Chino Valley lease was modified to decrease the monthly base rent from $40,000 to $32,800 and the Tempe lease was modified to increase the monthly base rent from $33,500 to $49,200. On August 23, 2021 and effective September 1, 2021, the Chino Valley lease was amended, and the monthly base rent was increased to $55,195 due to additional space of 27,312 square feet being leased to the lessee. The increase in monthly rent was commensurate with the additional space being leased; therefore, this modification qualifies as a separate contract under ASC 842. At the commencement of the modified terms, the Company reassessed its lease classification and concluded it remained properly classified as an operating lease. The Company records revenues from rental properties for its operating leases on a straight-line basis. Any revenue on the straight-line basis exceeding the monthly payment amount required on the operating lease is reflected as a deferred rent receivable. Effective May 31, 2020, the Company amended its leases for which it is the lessor on its Chino Valley, Tempe, Kingman and Green Valley properties. The amendments resulted in an abatement of rent for the months of June and July 2020. This rent abatement resulted in a deferred rent receivable as of December 31, 2021 and 2020 of $164,770 and $173,757, respectively (see Note 3). For leases where the Company is a lessee, primarily for the Company’s administrative office lease, the Company analyzed if it would be required to record a lease liability and a right of use asset on its consolidated balance sheets at fair value upon adoption of ASU 2016-02. Since the terms of the Company’s operating lease for its office space was 12 months or less, pursuant to ASC 842, the Company determined that the lease meets the definition of a short-term lease and the Company did not recognize a right-of use asset and lease liability arising from this lease. Basic and diluted loss per share Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period using the treasury stock method and as-if converted method. Potentially dilutive common shares and participating securities are excluded from the computation of diluted shares outstanding if they would have an anti-dilutive impact on the Company’s net losses. The Company’s preferred stock is considered a participating security since the preferred shares are entitled to dividends equal to common share dividends and accordingly, are included in the computation of earnings per share pursuant to the two-class method. The two-class method of computing (loss) income per share is an earnings allocation formula that determines (loss) income per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. The following potentially dilutive shares have been excluded from the calculation of diluted net loss per share as their effect would be anti-dilutive for the years ended December 31, 2021 and 2020. December 31, 2021 2020 Convertible debt 404,000 404,000 Stock options 1,575,000 1,325,000 1,979,000 1,729,000 Segment reporting The Company’s business is comprised of one reportable segment. The Company has determined that its properties have similar economic characteristics to be aggregated into one reportable segment (operating, leasing and managing commercial properties, and advisory and brokerage services related to commercial properties). The Company’s determination was based primarily on its method of internal reporting. Income tax Deferred income tax assets and liabilities arise from temporary differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending upon the classification of the asset or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company follows the provisions of FASB ASC 740-10, “Uncertainty in Income Taxes”. Certain recognition thresholds must be met before a tax position is recognized in the financial statements. An entity may only recognize or continue to recognize tax positions that meet a “more-likely-than-not” threshold. The Company does not believe it has any uncertain tax positions as of December 31, 2021 and 2020 that would require either recognition or disclosure in the accompanying consolidated financial statements. Stock-based compensation Stock-based compensation is accounted for based on the requirements of ASC 718 – “Compensation –Stock Compensation Improvements to Employee Share-Based Payment Accounting. Recently issued accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. ASU 2016-13 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, and a modified retrospective approach is required, with a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. In November of 2019, the FASB issued ASU 2019-10, which delayed the implementation of ASU 2016-13 to fiscal years beginning after December 15, 2022 for smaller reporting companies which applies to the Company. The Company is currently evaluating the impact of ASU 2016-13 on its future consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for certain convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity’s own equity and requires the use of the if-converted method for calculating diluted earnings per share. The ASU removes separation models for convertible debt with a cash conversion feature. Such convertible instruments will be accounted for as a single liability measured at amortized cost. The ASU is effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted after December 15, 2020, which can either be on a modified retrospective or full retrospective basis. Adoption of the ASU is not expected to have a material impact on the Company's financial condition and results of operations. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. |
Concentrations and Risks
Concentrations and Risks | 12 Months Ended |
Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS AND RISKS | NOTE 3 – CONCENTRATIONS AND RISKS Lease Agreements with Significant Tenants Chino Valley On May 1, 2018, Chino Valley and Broken Arrow Herbal Center, Inc. (“Broken Arrow”) agreed to terminate the prior Chino Valley Lease dated April 6, 2015, as amended, in consideration of (i) entry into that certain Licensed Medical Marijuana Facility Triple Net (NNN) Lease Agreement dated May 1, 2018 between Chino Valley and Broken Arrow (the “2018 Chino Valley Lease”), with a term of 22 years, expiring April 30, 2040, and (ii) abatement of rent that would otherwise have been due for the month of April 2018 under the prior Chino Valley Lease. The 2018 Chino Valley Lease provided for payment by Broken Arrow of a fixed monthly base rent of $35,000, as well as real property taxes, personal property taxes, privilege, sales, rental, excise, use and/or other taxes (excluding income or estate taxes) levied upon or assessed against Chino Valley. In addition, pursuant to the terms of the 2018 Chino Valley Lease, Broken Arrow agreed to maintain insurance in full force during the term of the 2018 Chino Valley Lease and any other period of occupancy of the premises by Broken Arrow. On January 1, 2019, Chino Valley and Broken Arrow entered into that the First Amendment to the 2018 Chino Valley Lease (the “2019 Chino Valley Lease Amendment”), pursuant to which the monthly base rent was increased from $35,000 to $40,000. Except for the increase in base rent, the terms of the 2018 Chino Valley Lease remain in full force and effect. On May 29, 2020, Chino Valley and Broken Arrow entered into a second amendment to the 2018 Chino Valley Lease, as amended (the “2020 Chino Valley Amendment”), effective May 31, 2020 (“Effective Date”). Pursuant to the terms of the 2020 Chino Valley Amendment, among other things, the base rent was adjusted to $32,800 per month, and the base rent was abated from June 1, 2020 to July 31, 2020. Any increase in the rentable area of the leased premises will result in an increase in all amounts calculated based on the same, including, without limitation, base rent. Pursuant to the terms of the 2020 Chino Valley Amendment, the parties agreed that if there is any change in laws such that the dispensing, sale or cultivation of marijuana upon the premises is prohibited or materially and adversely affected as mutually and reasonably determined by Chino Valley and Broken Arrow, Broken Arrow may terminate the 2018 Chino Valley Lease, as amended, by delivering written notice to Chino Valley, together with a termination payment which shall be the sum of (i) any unpaid rent and interest, plus (ii) 5% of the base rent which would have been earned after termination for the balance of the term. In addition, the parties agreed that from the period from the Effective Date to June 30, 2022 (the “Improvement Period”), Broken Arrow will and/or Broken Arrow will cause its affiliate, CJK, Inc. (“CJK”), to invest a combined total of at least $8,000,000 of improvements (“Investment by Tenants”) in and to the property that is the subject of the Chino Valley Lease and the property that is the subject of the Tempe Lease (discussed below, and collectively referred to as the “Facilities”). As of December 31, 2021, the Company’s Significant Tenants have completed improvements to the Facilities totaling in excess of $8,000,000 and have satisfied the contractual obligations related to the same. On August 23, 2021, Chino Valley and Broken Arrow entered into the Third Amendment (the “Third Chino Valley Amendment”) to the Licensed Medical Marijuana Facility Triple Net (NNN) Lease Agreement dated May 1, 2018, between Chino Valley and CJK, as amended (the “Chino Valley Lease”), effective September 1, 2021. Pursuant to the terms of the Chino Valley Lease, the parties previously agreed that between May 31, 2020 and May 31, 2022 (the “Improvement Period”), Broken Arrow would and/or Broken Arrow would cause its affiliate, CJK, to invest a combined total of at least $8,000,000 of improvements in and to the property that is the subject of the Chino Valley Lease. The parties also previously agreed that the base rental payments under the Chino Valley Lease would increase commensurate to any and all expanded and operational square footage on the premises by calculating the fixed rate of $0.82 per square foot per month by the new operational square footage. Broken Arrow has now satisfied its contractual obligation regarding these capital improvements. Accordingly, in the Third Chino Valley Amendment, the parties agreed that, as of September 1, 2021, the rental payment is increased to $55,195 per month base rental payment, plus additional rental payments, as a result of the increase in the square footage of the operational space. This lease modification qualifies as a separate contract as the modification grants the tenant additional right of use not included in the original lease, as amended, and the increase in monthly rent payments is commensurate with the standalone price for the additional square footage being leased. In addition, on January 24, 20022 and effective on March 1, 2022, Chino Valley and Broken Arrow entered into the Fourth Amendment to the Licensed Medical Marijuana Facility Triple Net (NNN) Lease Agreement dated May 1, 2018. Pursuant to the terms of the Fourth Chino Valley Amendment, the parties acknowledge an additional 30,000 square feet have become operational, increasing the premises to a total of 97,312 square feet of operational space (see Note 13). Green Valley On May 1, 2018, Green Valley and Broken Arrow agreed to terminate the prior Green Valley Lease dated October 1, 2014, in consideration of (i) entry into that certain Licensed Medical Marijuana Facility Triple Net (NNN) Lease Agreement dated May 1, 2018 between Green Valley and Broken Arrow (the “Green Valley Lease”), with a term of 22 years, expiring April 30, 2040, and (ii) abatement of rent that would otherwise have been due for the month of April 2018 under the prior Green Valley Lease. The Green Valley Lease provided for payment by Broken Arrow of a fixed monthly base rent of $3,500, as well as real property taxes, personal property taxes, privilege, sales, rental, excise, use and/or other taxes (excluding income or estate taxes) levied upon or assessed against Chino Valley. In addition, pursuant to the terms of the Green Valley Lease, Broken Arrow agreed to maintain insurance in full force during the term of the Green Valley Lease and any other period of occupancy of the premises by Broken Arrow. On May 29, 2020, Green Valley and Broken Arrow entered into the First Amendment (the “Green Valley Amendment”) to the Green Valley Lease, effective May 31, 2020. Pursuant to the terms of the Green Valley Amendment, among other things, the parties agreed to abate the fixed base rent of $3,500 from June 1, 2020 to July 31, 2020. In addition, the Green Valley Amendment provides that any increase in the rentable area of the leases premises will result in an increase in all amounts calculated based on the same, including, without limitation, base rent. The parties also agreed that if there is any change in laws such that the dispensing, sale or cultivation of marijuana upon the premises is prohibited or materially and adversely affected as mutually and reasonably determined by Green Valley and Broken Arrow, Broken Arrow may terminate the Green Valley Lease by delivering written notice to Green Valley, together with a termination payment which shall be the sum of (i) any unpaid rent and interest, plus (ii) 5% of the base rent which would have been earned after termination for the balance of the term. Tempe On May 1, 2018, Zoned Arizona and CJK agreed to terminate the prior Tempe Leases dated August 15, 2015, as amended, and June 15, 2017, in consideration of (i) entry into that certain Licensed Medical Marijuana Facility Triple Net (NNN) Lease Agreement dated May 1, 2018 between Zoned Arizona and CJK (the “Tempe Lease”), with a term of 22 years, expiring April 30, 2040, and (ii) abatement of rent that would otherwise have been due for the month of April 2018 under the prior Tempe Leases. The Tempe Lease provided for payment by CJK of a fixed monthly base rent of $33,500, as well as real property taxes, personal property taxes, privilege, sales, rental, excise, use and/or other taxes (excluding income or estate taxes) levied upon or assessed against Zoned Arizona. In addition, pursuant to the terms of the Tempe Lease, CJK agreed to maintain insurance in full force during the term of the Tempe Lease and any other period of occupancy of the premises by CJK. On May 29, 2020, Zoned Arizona and CJK entered into the First Amendment (the “Tempe Amendment”) to the Tempe Lease, effective May 31, 2020. Pursuant to the terms of the Tempe Amendment, among other things, the base rent was increased to $49,200 per month, and the base rent was abated from June 1, 2020 to July 31, 2020. Any increase in the rentable area of the leased premises will result in an increase in all amounts calculated based on the same, including, without limitation, base rent. Pursuant to the terms of the Tempe Amendment, the parties agreed that if there is any change in laws such that the dispensing, sale or cultivation of marijuana upon the premises is prohibited or materially and adversely affected as mutually and reasonably determined by Zoned Arizona and CJK, CJK may terminate the Tempe Lease by delivering written notice to Zoned Arizona, together with a termination payment which shall be the sum of (i) any unpaid rent and interest, plus (ii) 5% of the base rent which would have been earned after termination for the balance of the term. In addition, under the Tempe Amendment the parties agreed to an Investment by Tenant (as defined above in the subheading Chino Valley Kingman On May 1, 2018, Kingman and CJK agreed to terminate the prior Kingman Lease dated October 1, 2014, in consideration of (i) entry into that certain Licensed Medical Marijuana Facility Triple Net (NNN) Lease Agreement dated May 1, 2018 between Kingman and CJK (the “Kingman Lease”), with a term of 22 years, expiring April 30, 2040, and (ii) abatement of rent that would otherwise have been due for the month of April 2018 under the Prior Kingman Lease. The Kingman Lease provides for payment by CJK of a fixed monthly base rent of $4,000, as well as real property taxes, personal property taxes, privilege, sales, rental, excise, use and/or other taxes (excluding income or estate taxes) levied upon or assessed against Kingman. In addition, pursuant to the terms of the Kingman Lease, CJK agreed to maintain insurance in full force during the term of the Kingman Lease and any other period of occupancy of the premises by CJK. On May 29, 2020, Kingman and CJK entered into the First Amendment (the “Kingman Amendment”) to the Kingman Lease, effective May 31, 2020. Pursuant to the terms of the Kingman Amendment, among other things, the parties agreed to abate the $4,000 base rent from June 1, 2020 to July 31, 2020. In addition, the Kingman Amendment provides that any increase in the rentable area of the leases premises will result in an increase in all amounts calculated based on the same, including, without limitation, base rent. The parties also agreed that if there is any change in laws such that the dispensing, sale or cultivation of marijuana upon the premises is prohibited or materially and adversely affected as mutually and reasonably determined by Kingman and CJK, CJK may terminate the Kingman Lease by delivering written notice to Kingman, together with a termination payment which shall be the sum of (i) any unpaid rent and interest, plus (ii) 5% of the base rent which would have been earned after termination for the balance of the term. CJK and Broken Arrow, together, operate under the company brand, “Hana Meds” or “Hana”, and are referred to as the Company’s Significant Tenants. The Tempe Lease, Kingman Lease, Chino Valley Lease and Green Valley Lease (together referred to as the “New Leases”) includes a Guarantee of Payment and Performance by Mr. Abrams and the Company’s Significant Tenants. Mr. Abrams guarantee is collateralized by the convertible debt of $2,000,000 owed to him (see Note 8). As of December 31, 2021 and 2020, security deposits payable to the Significant Tenants amounted to $71,800 in both periods. Future minimum lease payments primarily consist of minimum base rent payments from Significant Tenants. Future minimum lease payments to be received, on all leased properties, for each of the five succeeding calendar years and thereafter as of December 31, 2021 consists of the following: Future annual base rent *: 2022 $ 1,362,403 2023 1,362,403 2024 1,362,403 2025 1,362,403 2026 1,350,939 Thereafter 17,903,334 Total $ 24,703,885 * Future annual base rent does not include the Fourth Chino Valley Amendment, effective March 1, 2022 which increased the monthly base rent to $87,581, or an annual base rent to $1,050,972 (See Note 13). Rental and advisory revenue and receivable –Significant Tenants For the years ended December 31, 2021 and 2020, rental and advisory revenue associated with the Significant Tenant leases described above amounted to $1,255,130 and $1,176,666, which represents 68.9% and 96.8% of the Company’s total revenues, respectively. On December 31, 2021 and 2020, accounts receivable from advisory services provided to the Significant Tenants amounted to $2,813 and $2,375, respectively. Further, as of December 31, 2021 and 2020 a deferred rent receivable of $164,770 and $173,757 is due from Significant Tenants due to the abatement of rent in the months of June and July 2020 under the amendments executed effective May 31, 2020 discussed above, respectively. Asset concentration The majority of the Company’s real estate properties are leased to the Significant Tenants under triple-net leases that terminate in April 2040. The Company monitors the credit of all tenants to stay abreast of any material changes in credit quality. The Company monitors tenant credit by (1) reviewing financial statements and related metrics and information that are publicly available or that are provided to us upon request, and (2) monitoring the timeliness of rent collections. As of December 31, 2021 and 2020, the Company had an asset concentration related to the Significant Tenants. As of December 31, 2021 and 2020, the Significant Tenants leased approximately 79.2% and 83.2% of the Company’s total assets, respectively. Through December 31, 2021, all rental payments have been made on a timely basis. As of December 31, 2021 and 2020, the lease agreements with the Significant Tenants were personally guaranteed by Alan Abrams and are collateralized by convertibles notes of $2,000,000 owed to Mr. Abrams (see Note 8). On March 1, 2018, the Company and Alan Abrams entered into a Reaffirmation Agreement (See Note 8). |
Rental Properties
Rental Properties | 12 Months Ended |
Dec. 31, 2021 | |
Rental Properties [Abstract] | |
RENTAL PROPERTIES | NOTE 4 – RENTAL PROPERTIES On December 31, 2021 and 2020, rental properties, net consisted of the following: Description Useful Life December 31, December 31, Building and building improvements 5-39 $ 6,293,748 $ 6,260,524 Land - 2,016,548 2,283,214 Rental properties, at cost 8,310,296 8,543,738 Less: accumulated depreciation (1,868,831 ) (1,516,302 ) Rental properties, net $ 6,441,465 $ 7,027,436 On June 1, 2021, the Company closed on the sale of its Gilbert, AZ property with a third party (the “Purchaser”) pursuant to which the Company agreed to sell, and the Purchaser agreed to purchase, the property located in Gilbert, Arizona, for an aggregate purchase price of $335,000. In connection with the sale, the Company received net proceeds of $322,332 and recorded a gain on sale of rental property of $51,944. For the years ended December 31, 2021 and 2020, depreciation of rental properties amounted to $352,529 and $356,934, respectively. |
Convertible Note Receivable
Convertible Note Receivable | 12 Months Ended |
Dec. 31, 2021 | |
Convertible Note Receivable [Abstract] | |
CONVERTIBLE NOTE RECEIVABLE | NOTE 5 – CONVERTIBLE NOTE RECEIVABLE On March 19, 2020, the Company made an initial investment of $100,000 into KCB Jade Holdings, LLC (“KCB”), an entity founded by an individual related to the Company’s COO. KCB, doing business as Open Dør Dispensaries, is committed to guiding retailers through the chaos of cannabis. KCB is interested in cannabis dispensary license holders who want to elevate the experience of regulated cannabis utilizing the Open Dør Dispensaries retail model as franchisee partners. In exchange for the investment, KCB issued to the Company a convertible debenture (the “KCB Debenture”) dated March 19, 2020 (the “Issuance Date”) in the original principal amount of $100,000. The KCB Debenture bears interest at the rate of 6.5% per annum and matures on March 19, 2025 (the “Maturity Date”). Interest on the outstanding principal sum of the KCB Debenture commences accruing on the Issuance Date and is computed on the basis of a 365-day year and the actual number of days elapsed and shall be payable annually due by the first day of each calendar anniversary following the Issuance Date. KCB may prepay the KCB Debenture at any point after 18 months following the Issuance Date, in whole or in part. However, if KCB elects to prepay the KCB Debenture prior to the Maturity Date or prior to any conversion as provided in the KCB Debenture in whole or in part, the Company will be entitled to receive a number of KCB units, in addition to such prepayment amount, constituting 10% of the total outstanding units and 10% of the total percentage interest following such issuance and at the time of such issuance. On or after six months from the Issuance Date, the Company may convert all or a portion of the principal balance and all accrued and unpaid interest due into a number of units equal to the proportion of the outstanding amount being converted multiplied by 33% of the total number of units issued and outstanding at the time of conversion, constituting 33% of the total percentage interest (the “Conversion Percentage”). If KCB defaults on payment of the KCB Debenture, the Company may, at its option, extend all conversion rights, through and including the date KCB tenders or attempts to tender payment in full of all amounts due under the KCB Debenture. Conversion rights terminate upon acceptance by the Company of payment in full of principal, accrued interest and any other amounts due under the KCB Debenture. If (i) KCB does not elect to exercise its rights of prepayment prior to the Maturity Date, (ii) the Company does not elect to exercise its rights of conversion, and (iii) KCB pays to the Company all outstanding principal and interest accrued and due under the terms of the KCB Debenture on the Maturity Date, the Company will still be entitled to receive a number of units, in addition to such payment amount, constituting 8% of the total outstanding units and 8% of the total percentage interest following such issuance and at the time of such issuance. Upon the occurrence of an Event of Default, as defined in the KCB Debenture, the entire principal balance and accrued and unpaid interest outstanding under the KCB Debenture, and all other obligations of KCB under the KCB Debenture, will be immediately due and payable and the Company may exercise any and all rights, power and remedies available to it at law or in equity or other appropriate proceeding, whether for the specific performance of any covenant or agreement contained in the KCB Debenture and proceed to enforce the payment thereof or any other legal or equitable right of the Company. Any amount of principal or interest not paid when due will bear interest at the rate of 12% per annum from the due date thereof until paid. On February 19, 2021 (the “Amendment Date”), the Company made an additional investment of $100,000 into KCB (the “Additional Investment”). In exchange, KCB issued to the Company an amended and restated convertible debenture (the “A&R Debenture”) on the Amendment Date. The A&R Debenture amends and restates in its entirety the KCB Debenture. Pursuant to the A&R Debenture, the Company and KCB agreed to certain new terms that did not exist in the KCB Debenture, which are described below. ● Interest Accrual Commencement ● Franchise Fees In addition, following the Amendment Date, KCB agreed not to decrease the amount it charges its franchise locations for an Initial Fee or any Renewal Fee as in effect on the Amendment Date without the prior written consent of the Company, or to take any other actions that would reduce the value of KCB’s obligation to the Company with respect to these franchise fee payments. KCB’s obligation to pay the Company the franchise fees listed above will survive any termination, repayment or conversion of the A&R Debenture. Failure by KCB to pay the Company the franchise fees in the manner described above will result in an event of default, and, among other things, any due and unpaid franchise fees will accrue interest at 12% per year from the date the obligation was due. Apart from the terms described above, the terms of the A&R Debenture are substantially identical to the terms of the KCB Debenture. On August 2, 2021, KCB issued to the Company a second amended and restated convertible debenture (the “Second A&R Debenture”). The Second A&R Debenture amends and restates in its entirety the A&R Debenture. Pursuant to the Second A&R Debenture, the Company and KCB agreed to revise certain terms in the A&R Debenture, as follows. Right of Prepayment Voluntary Conversion Conversion Percentage. Right of Maturity Units Apart from the terms described above, the terms of the Second A&R Debenture are substantially identical to the terms of the A&R Debenture. The convertible note receivable has been accounted for at amortized cost and is evaluated for collectability at each reporting date. As of December 31, 2021 and 2020, an allowance was not deemed necessary. On December 31, 2021, convertible note receivable and interest receivable amounted to $200,000 and $10,756, respectively. On December 31, 2020, convertible note receivable and interest receivable amounted to $100,000 and $5,129, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Intangible Assets [Abstract] | |
INTANGIBLE ASSETS | NOTE 6 – INTANGIBLE ASSETS On April 1, 2021, the Company’s subsidiary, Zoned Brokerage, entered in an engagement letter for real estate brokerage services with a consultant for a guaranteed term of one year (the “Guaranteed Term”). During the Guaranteed Term, neither party may terminate the engagement letter, except for “Cause” as defined in the engagement letter. In connection with the engagement letter, the Company issued 60,000 shares of its common stock for the acquisition of brokerage materials and active real estate listings. In the event of termination of the engagement letter due to cause with respect to the consultant, the consultant must return to the Company a portion of the stock equal to the remaining portion of the Guaranteed Term. The shares were valued at their fair value of $37,800 using the quoted per share price on the date of grant of $0.63. In connection with these shares, on April 1, 2021, the Company recorded an intangible asset of $37,800 which is amortized over the one-year term of the engagement letter. On December 31, 2021 and 2020, intangible assets consisted of the following: Useful life December 31, December 31, Real estate brokerage materials and listing 1 year $ 37,800 - Less: accumulated amortization (28,350 ) - $ 9,450 $ - For the year ended December 31, 2021, amortization of intangible assets amounted to $28,350, respectively. |
Investment in Joint Ventures
Investment in Joint Ventures | 12 Months Ended |
Dec. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN JOINT VENTURES | NOTE 7 – INVESTMENT IN JOINT VENTURES On December 31, 2021 and 2020, the Company held investments with aggregate carrying values of $74,554 and $0, respectively. The entities listed below are partially owned by the Company. The Company accounts for these investments under the equity method of accounting as the Company exercises significant influence but does not exercise financial and operating control over these entities. Investments are reviewed for changes in circumstance or the occurrence of events that suggest an other than temporary event where the Company’s investment may not be recoverable. A summary of the Company’s original investments in the unconsolidated affiliated entities and net carrying value amount is as follows: Net Carrying Value Entity Date Acquired Ownership Original December 31, December 31, Beakon, LLC (the “Beakon Joint Venture”) April 22, 2021 50.0 % $ 86,000 $ - $ - Zoneomics Green, LLC (the “Zoneomics Green Joint Venture”) May 1, 2021 50.0 % 90,000 74,554 - Total investments in unconsolidated joint venture entities $ 176,000 $ 74,554 $ - On April 22, 2021, ZP Data entered into a Limited Liability Company Operating Agreement (the “Beakon Operating Agreement”) with a non-affiliated joint venture partner in connection with the formation of Beakon, LLC (“Beakon”), a Delaware limited liability company formed on April 16, 2021. Beakon signed a licensing agreement for the licensing of a consumer data/marketing software platform that Beakon will white-label for the cannabis industry. Beakon’s goal is to develop and leverage the platform to help drive foot traffic to brick and mortar retail (i.e. dispensaries), and thus enhance the value of the real estate and mitigate risk. Pursuant to the Beakon Operating Agreement, ZP Data purchased 50 units of Beakon for $50, which represent 50% of the membership interests of Beakon. Each unit represents, with respect to any member, such member’s: (i) interest in Beakon’s capital, (ii) share of Beakon’s net profits and net losses (and specially allocated items of income, gain, and deduction), and the right to receive distributions of net cash flow from Beakon, (iii) right to inspect Beakon’s books and records, and (iv) right to participate in the management of and vote on matters coming before the members as provided in the Beakon Operating Agreement. The transactions discussed above resulted in a joint venture, in accordance with ASC 323-10 – Investments- Equity and Joint Ventures, On May 1, 2021, the Company entered into a Limited Liability Company Operating Agreement (the “Zoneomics Green Operating Agreement”) with a non-affiliated joint venture partner in connection with the formation of Zoneomics Green, LLC (“Zoneomics Green”), a Delaware limited liability company formed on May 1, 2021. Zoneomics Green’s goal is to utilize advanced property technology to provide solutions for property identification in regulated industries such as regulated cannabis. Pursuant to the Zoneomics Green Operating Agreement, the Company purchased 50 units of Zoneomics Green for a capital contribution of $90,000, which represent 50% of the membership interests of Zoneomics Green. Each unit represents, with respect to any member, such member’s: (i) interest in Zoneomics Green’s capital, (ii) share of Zoneomics Green’s net profits and net losses (and specially allocated items of income, gain, and deduction), and the right to receive distributions of net cash flow from Zoneomics Green, (iii) right to inspect Zoneomics Green’s books and records, and (iv) right to participate in the management of and vote on matters coming before the members as provided in the Zoneomics Green Operating Agreement. The transactions discussed above resulted in a joint venture, in accordance with ASC 323-10 – Investments- Equity and Joint Ventures, The following represents summarized financial information derived from the financial statements of the Beakon and Zoneomics Green Joint Ventures, respectively, as of December 31, 2021 and for the year ended December 31, 2021. Balance sheet Beakon Zoneomics Current assets: Cash $ 2,940 $ 59,109 Licensing agreement 150,000 - Total assets $ 152,940 $ 59,109 Liabilities $ - $ - Equity 152,940 59,109 Total liabilities and equity $ 152,940 $ 59,109 Statement of operations For the Year Ended Beakon Zoneomics Net sales $ - $ - Operating expenses (24,060 ) (30,891 ) Net loss $ (24,060 ) $ (30,891 ) Company’s share of loss from unconsolidated joint ventures $ (12,030 ) $ (15,446 ) During the year ended December 31, 2021, the Company recorded a loss from joint venture of $101,446 which represents the Company’s proportionate share of losses from its joint ventures of $27,476 and a loss on impairment of $73,970. |
Convertible Note Payable
Convertible Note Payable | 12 Months Ended |
Dec. 31, 2021 | |
Convertible Note Payable [Abstract] | |
CONVERTIBLE NOTE PAYABLE | NOTE 8 – CONVERTIBLE NOTE PAYABLE On January 9, 2017, the Company issued a convertible debenture (the “Abrams Debenture”) in the aggregate principal amount of $2,000,000 in favor of Alan Abrams, who was a significant stockholder of the Company through December 31, 2018, in exchange for cash from Mr. Abrams of $2,000,000. The Abrams Debenture accrues interest at the rate of 6% per annum payable quarterly by the 1 st The Company may prepay the Abrams Debenture at any point after nine months, in whole or in part. Pursuant to the terms of the Abrams Debenture, Mr. Abrams is entitled to convert all or a portion of the principal balance and all accrued and unpaid interest due under the Abrams Debenture into shares of the Company’s common stock at a conversion price of $5.00 per share. If the Company defaults on payment, Mr. Abrams may at his option, extend all conversion rights, through and including the date the Company tenders or attempts to tender payment in full of all amounts due under the Abrams Debenture. Any amount of principal or interest, which is not paid when due shall bear interest at the rate of 12% per annum. Upon an Event of Default (as defined in the Abrams Debenture), Mr. Abrams may (i) declare the entire principal amount and all accrued and unpaid interest under the Abrams Debenture immediately due and payable, and (ii) exercise any and all rights, powers and remedies available to Mr. Abrams at law or in equity or other appropriate proceeding, whether for the specific performance of any covenant or agreement contained in the Abrams Debenture and proceed to enforce the payment thereof or any other legal or equitable right of Mr. Abrams. On March 1, 2018, the Company and Alan Abrams entered into a Reaffirmation Agreement whereby Mr. Abrams reaffirmed his personal guarantee of his obligations under certain of the Company’s commercial leases. Additionally, Mr. Abrams affirmed that the principal of the Abrams Debenture in the principal amount of $2,000,000 was acknowledged as collateral within the scope of the guaranty included in the commercial lease agreements. As of December 31, 2021 and 2020, the principal balance due under the Abrams Debenture is $2,000,000. As of December 31, 2021 and 2020, accrued interest payable due under the Abrams Debenture amounted to $30,000, which is included in accrued expenses on the accompanying consolidated balance sheets. For the years ended December 31, 2021 and 2020, interest expense related to the Abrams Debenture amounted to $120,000 |
Related Party Transaction
Related Party Transaction | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTION | NOTE 9 – RELATED PARTY TRANSACTION Convertible notes payable – related party On January 9, 2017, the Company issued a convertible debenture (the “McLaren Debenture”) in the principal amount of $20,000 in favor of Bryan McLaren, the Company’s Chief Executive Officer, President, Chief Financial Officer, and a member of the Company’s Board of Directors, in exchange for cash from Mr. McLaren of $20,000. The McLaren Debenture accrued interest at the rate of 6% per annum payable quarterly by the 1 st As of December 31, 2021 and 2020, the principal balance due under the McLaren Debenture was $20,000. As of December 31, 2021 and 2020, accrued interest payable due under the McLaren Debenture was $5,400 and $4,200, respectively, which is included in accrued expenses – related party on the accompanying consolidated balance sheets. For the years ended December 31, 2021 and 2020, interest expense – related party amounted to $1,200. On January 7, 2022, the Company repaid this debt and all accrued and unpaid interest due. Indemnification agreements On August 23, 2021, the Company entered into indemnification agreements with each of its directors and executive officers. In general, these indemnification agreements require the Company to indemnify a director and officer to the fullest extent permitted by law against liabilities that may arise in connection with that director’s service as a director and officer for the Company. Additionally, the Company shall advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. In August 2021, the Company did not renew its officers and directors insurance. |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 10 – STOCKHOLDERS’ EQUITY (A) Preferred Stock On December 13, 2013, the Board of Directors of the Company authorized and approved the creation of a new class of Preferred Stock consisting of 5,000,000 shares authorized, $.001 par value. The preferred stock is not convertible into any other class or series of stock. The holders of the preferred stock are entitled to fifty (50) votes for each share held. Voting rights are not subject to adjustment for splits that increase or decrease the common shares outstanding. Upon liquidation, the holders of the shares will be entitled to receive $1.00 per share plus redemption provision before assets distributed to other shareholders. The holders of the shares are entitled to dividends equal to common share dividends. As of December 31, 2021 and 2020, there were 2,000,000 shares of preferred stock outstanding. Once any shares of Preferred Stock are outstanding, at least 51% of the total number of shares of Preferred Stock outstanding must approve the following transactions: a. Alter or change the rights, preferences or privileges of the Preferred Stock. b. Create any new class of stock having preferences over the Preferred Stock. c. Repurchase any of our common stock. d. Merge or consolidate with any other company, except our wholly owned subsidiaries. e. Sell, convey or otherwise dispose of, or create or incur any mortgage, lien, or charge or encumbrance or security interest in or pledge of, or sell and leaseback, in all or substantially all of our property or business. f. Incur, assume or guarantee any indebtedness maturing more than 18 months after the date on which it is incurred, assumed or guaranteed by us, except for operating leases and obligations assumed as part of the purchase price of property. (B) Common stock issued for services 2020 On January 6, 2020, the Company issued an aggregate of 110,000 shares of common stock to members of the Company’s board of directors for services rendered. The shares were valued at their aggregate fair value of $24,200 using the quoted per share price on the date of grant of $0.22. In connection with these grants, in January 2020, the Company recorded stock-based compensation expense of $24,200 which is included in compensation and benefits on the consolidated statements of operations. 2021 On January 31, 2021, the Company issued an aggregate of 130,000 shares of common stock to members of the Company’s board of directors for services rendered. The shares were valued at their aggregate fair value of $52,000 using the quoted per share price on the date of grant of $0.40. In connection with these grants, in January 2021, the Company recorded stock-based compensation expense of $52,000 which is included in compensation and benefits on the consolidated statements of operations. (C) Shares issued for intangible assets On April 1, 2021, the Company’s subsidiary, Zoned Brokerage, entered in an engagement letter for real estate brokerage services with a consultant for a guaranteed term of one year (the “Guaranteed Term”). During the Guaranteed Term, neither party may terminate the engagement letter, except for “Cause” as defined in the engagement letter. In connection with the engagement letter, the Company issued 60,000 shares of its common stock for the acquisition of brokerage materials and active real estate listings. In the event of termination of the engagement letter due to Cause with respect to the consultant, the consultant must return to the Company a portion of the stock equal to the remaining portion of the Guaranteed Term. The shares were valued at their fair value of $37,800 using the quoted per share price on the date of grant of $0.63. In connection with these shares, on April 1, 2021, the Company recorded an intangible asset of $37,800 which is amortized over the one-year term of the engagement letter. (D) Equity incentive plans On August 9, 2016, the Company’s Board of Directors authorized the 2016 Equity Incentive Plan (the “2016 Plan”) and reserved 10,000,000 shares of common stock for issuance thereunder. The 2016 Plan was approved by shareholders on November 21, 2016. The 2016 Plan’s purpose is to encourage ownership in the Company by employees, officers, directors and consultants whose long-term service the Company considers essential to its continued progress and, thereby, encourage recipients to act in the stockholders’ interest and share in the Company’s success. The 2016 Plan authorizes the grant of awards in the form of options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended, options that do not qualify (non-statutory stock options) and grants of restricted shares of common stock. Restricted shares granted pursuant to the 2016 Plan are amortized to expense over the vesting period. Options vest and expire over a period not to exceed seven years. If any share of common stock underlying a stock option that has been granted ceases to be subject to a stock option, or if any shares of common stock that are subject to any other stock-based award granted are forfeited or terminate, such shares shall again be available for distribution in connection with future grants and awards under the 2016 Plan. As of December 31, 2021, 325,000 stock option awards are outstanding and 125,000 options are exercisable under the 2016 Plan. As of December 31, 2020, 75,000 stock option awards were outstanding and 75,000 options were exercisable under the 2016 Plan. As of December 31, 2021 and 2020, 9,675,000 and 9,925,000 shares, respectively, were available for future issuance. The Company also continues to maintain its 2014 Equity Compensation Plan (the “2014 Plan”), pursuant to which 1,250,000 previously awarded stock options are outstanding. The 2014 Plan has been superseded by the 2016 Plan. Accordingly, no additional shares subject to the existing 2014 Plan will be issued and the 1,250,000 shares issuable upon exercise of stock options will be issued pursuant to the 2014 Plan, if exercised. As of December 31, 2021 and 2020, options to purchase 1,250,000 shares of common stock are outstanding and 1,175,000 options are exercisable pursuant to the 2014 Plan. (E) Stock options On January 6, 2020, the Company granted an employee an option, pursuant to the 2016 Plan, to purchase 125,000 of the Company’s common stock at an exercise price of $1.00 per share. The grant date of the option was January 6, 2020 and the option expires on January 6, 2030. The option vests as to (i) 35,000 of such shares on January 6, 2020; and (ii) as to 10,000 of such shares on January 6, 2021 and each year thereafter through January 6, 2029. The fair value of this option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: dividend yield of 0%; expected volatility of 110%; risk-free interest rate of 1.81%; and an estimated holding period of 10 years. In connection with these options, the Company valued these options at a fair value of $23,388 and will record stock-based compensation expense over the vesting period. In July 2020, this employee was terminated and 90,000 unvested options were cancelled. On January 1, 2021, the Company granted a consultant, now Chief Operating Officer of the Company as of July 1, 2021, an option, pursuant to the 2016 Plan, to purchase 125,000 of the Company’s common stock at an exercise price of $1.00 per share. The grant date of the option was January 1, 2021 and the option expires on January 1, 2031. The option vests as to (i) 25,000 of such shares on January 1, 2021; and (ii) as to 10,000 of such shares on January 1, 2022 and each year thereafter through January 1, 2031. The fair value of this option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: dividend yield of 0%; expected volatility of 117%; risk-free interest rate of 0.93%; and an estimated holding period of 10 years. In connection with these options, the Company valued these options at a fair value of $48,677 and will record stock-based compensation expense over the vesting period. On July 1, 2021, the Company entered into a 12-month engagement with an individual to act as the Company’s Director of Real Estate. In connection with this engagement letter, on July 1, 2021, the Company granted the consultant an option, pursuant to the 2016 Plan, to purchase 125,000 of the Company’s common stock at an exercise price of $1.00 per share. The grant date of the option was July 1, 2021 and the option expires on July 1, 2031. The option vests as to (i) 25,000 of such shares on July 1, 2021; and (ii) as to 10,000 of such shares on July 1, 2022 and each year thereafter through July 1, 2031. The vesting of the Option pursuant to the Vesting Schedule hereof is earned only by continuing as a service provider at the will of the Company. The fair value of this option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: dividend yield of 0%; expected volatility of 119%; risk-free interest rate of 1.48%; and an estimated holding period of 10 years. In connection with these options, the Company valued these options at a fair value of $69,677 and will record stock-based compensation expense over the vesting period. For the years ended December 31, 2021 and 2020, in connection with the accretion of stock-based option expense, the Company recorded stock option expense of $56,180 and $24,231, respectively. As of December 31, 2021, there were 1,575,000 options outstanding and 1,300,000 options vested and exercisable. As of December 31, 2021, there was $92,335 of unvested stock-based compensation expense to be recognized through June 2031. The aggregate intrinsic value on December 31, 2021 was $1,400 and was calculated based on the difference between the quoted share price on December 31, 2021 of $0.775 and the exercise price of the underlying options. Stock option activities for the years ended December 31, 2021 and 2020 are summarized as follows: Number of Weighted Weighted Average Aggregate Balance Outstanding December 31, 2019 1,290,000 $ 0.99 5.74 $ - Granted 125,000 1.00 - Forfeited (90,000 ) 1.00 - Balance Outstanding December 31, 2020 1,325,000 0.99 4.85 - Granted 250,000 1.00 - - Balance Outstanding December 31, 2021 1,575,000 $ 0.99 4.71 $ 1,400 Exercisable, December 31, 2021 1,300,000 $ 0.99 4.00 $ 1,400 Balance Non-vested on December 31, 2020 100,000 $ 1.00 - $ - Granted 250,000 1.00 - - Vested during the period (75,000 ) 1.00 - - Balance Non-vested on December 31, 2021 275,000 $ 1.00 8.10 $ - |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11 - INCOME TAXES The Company maintains deferred tax assets and liabilities that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The deferred tax assets on December 31, 2021 and 2020 consist of net operating loss carryforwards. The net deferred tax asset has been fully offset by a valuation allowance because of the uncertainty of the attainment of future taxable income. The items accounting for the difference between income taxes at the effective statutory rate and the provision for income taxes for the years ended December 31, 2021 and 2020 were as follows: Years Ended 2021 2020 Income tax benefit at U.S. statutory rate $ (34,822 ) $ (16,311 ) Income tax benefit – state (10,778 ) (5,092 ) Non-deductible expenses 16,192 6,663 Change in valuation allowance 29,408 14,740 ) Total provision for income tax $ - $ - The Company’s approximate net deferred tax asset as of December 31, 2021 and 2020 was as follows: Deferred Tax Asset: December 31, December 31, Net operating loss carryforward $ 514,580 $ 485,172 Net deferred tax assets before valuation allowance 514,580 485,172 Valuation allowance (514,580 ) (485,172 ) Net deferred tax asset $ - $ - The net operating loss carryforward was approximately $1,871,200 on December 31, 2021. The Company provided a valuation allowance equal to the net deferred income tax asset as of December 31, 2021 and 2020 because it was not known whether future taxable income will be sufficient to utilize the loss carryforward. Additionally, the future utilization of the net operating loss carryforward to offset future taxable income is subject to an annual limitation as a result of ownership changes that may occur in the future. The 2017 estimated loss carry forward of approximately $1,488,189 expires on December 31, 2037. Subsequent to 2017, all estimated loss carry forwards may be carried forward indefinitely subject to annual usage limitations. Based on the Company’s analysis to determine the limitation on the utilization of its net operating loss carryforward amounts, in 2018, the deferred tax asset was reduced by any carryforward that cannot be utilized or expires prior to utilization as a result of such limitations, with a corresponding reduction of the valuation allowance. In 2021, the valuation allowance increased by $29,408. The potential tax benefit arising from certain loss carryforwards will expire in 2041. The Company does not have any uncertain tax positions or events leading to uncertainty in a tax position. The Company’s 2021, 2020, 2019 and 2018 Corporate Income Tax Returns are subject to Internal Revenue Service examination. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 – COMMITMENTS AND CONTINGENCIES Rental property acquisition On April 22, 2016, Zoned Colorado, a wholly owned subsidiary of the Company, entered into a Contract to Buy and Sell Real Estate (the “Parachute Agreement”) with Parachute Development Corporation (“Seller”) pursuant to which Zoned Colorado agreed to purchase, and Seller agreed to sell, property in Parachute, Colorado (the “Property”) for a purchase price of $499,857. In April 2016, the Company paid a refundable deposit of $45,000 into escrow in connection with the Parachute Agreement which is included in prepaid expenses and other assets on the consolidated balance sheet as of December 31, 2020. In January 2021, the Parachute Agreement was mutually terminated, and the refundable deposit was returned to the Company. Legal matters From time to time, the Company may be involved in litigation related to claims arising out of its operations in the normal course of business. As of December 31, 2021 and 2020, the Company is not involved in any pending or threatened legal proceedings that it believes could reasonably be expected to have a material adverse effect on its financial condition, results of operations, or cash flows. Employment and Related Golden Parachute Agreement On May 23, 2018, the Company and Mr. McLaren, the Company’s President, Chief Executive Officer, Chief Financial Officer and Chairman of the Board, agreed to replace Mr. McLaren’s 2014 employment agreement with a new employment agreement dated May 23, 2018 (the “2018 Employment Agreement”). Pursuant to the terms of the 2018 Employment Agreement, the Company agreed to continue to pay Mr. McLaren his then-current base annual salary of $215,000, and to award Mr. McLaren with an annual and/or quarterly bonus payable in either cash and/or equity of no less than 2% of the Company’s net income for the associated period. The 2018 Employment Agreement has a term of 10 years. The term and Mr. McLaren’s employment will terminate (a “Termination”) in any of the following circumstances: (i) immediately, if Mr. McLaren dies; (ii) immediately, if Mr. McLaren receives benefits under the long-term disability insurance coverage then provided by the Company or, if no such insurance is in effect, upon Mr. McLaren’s disability; (iii) on the expiration date, as the same may be extended by the parties by written amendment to the 2018 Employment Agreement prior to the occasion thereof; (iv) at the option of the Company for Cause (as defined in the 2018 Employment Agreement) upon the Company’s provision of written notice to Mr. McLaren of the basis for such Termination; (v) at the option of the Company, without Cause; (vi) by Mr. McLaren at any time with Good Reason (as defined in the 2018 Employment Agreement), upon 30 days’ prior written notice to the Company delivered not later than within 90 days of the existence of the condition therefor; or (vii) by Mr. McLaren at any time without Good Reason, upon not less than three months’ prior written notice to the Company. In the event of a Termination for any reason or for no reason whatsoever, or upon the expiration date of the 2018 Employment Agreement, whichever comes first, all rights and obligations under the 2018 Employment Agreement shall cease (i) as to the Company, except for the Company’s obligations for the payment of applicable severance benefits thereunder, and for indemnification thereunder, and (ii) as to Mr. McLaren, except for his obligation under the restrictive covenants in the 2018 Employment Agreement. The Company and Mr. McLaren also entered into a Golden Parachute Agreement (the “Golden Parachute Agreement”) on May 23, 2018. No benefits shall be payable under the Golden Parachute Agreement unless there shall have been a change in control of the Company, as set forth below. For purposes of the Golden Parachute Agreement, amongst other terms in the Golden Parachute Agreement, a “change in control of the Company” shall mean a change of control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended. For purposes of the Golden Parachute Agreement, “Cause” means termination upon (a) the willful and continued failure to substantially perform duties with the Company after a written demand for substantial performance is delivered by the Board, which demand specifically identifies the manner in which the Board believes that duties have not substantially been performed, or (b) the willful engaging in conduct, which is demonstrably and materially injurious to the Company, monetarily or otherwise. For purposes of the Golden Parachute Agreement, “Good Reason” means, without express written consent, the occurrence after a change in control of the Company of any of the following circumstances unless, such circumstances are fully corrected prior to the date of Termination specified in the notice of Termination: (a) a material diminution in Mr. McLaren’s authority, duties or responsibility from those in effect immediately prior to the change in control of the Company; (b) a material diminution in Mr. McLaren’s base compensation; (c) a material change in the geographic location at which Mr. McLaren performs his duties; (d) a material diminution in the authority, duties, or responsibilities of the supervisor to whom Mr. McLaren is required to report, including a requirement that Mr. McLaren report to a corporate officer or employee instead of reporting directly to the Board; (e) a material diminution in the budget over which Mr. McLaren retains authority; (f) a material breach under any agreement with the Company to continue in effect any bonus to which Mr. McLaren was entitled, or any compensation plan in which Mr. McLaren participates immediately prior to the change in control of the Company which is material to Mr. McLaren’s total compensation; (g) a material breach under any agreement with the Company to provide Mr. McLaren benefits substantially similar to those enjoyed by him under any of the Company’s life insurance, medical, health and accident, or disability plans in which he was participating at the time of the change in control of the Company, the failure to continue to provide Mr. McLaren with a Company automobile or allowance in lieu of it, if Mr. McLaren was provided with such an automobile or allowance in lieu of it at the time of the change of control of the Company, the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive him of any material fringe benefit enjoyed by him at the time of the change in control of the Company, or the failure by the Company to provide him with the number of paid vacation days to which he is entitled on the basis of years of service with the Company in accordance with the Company’s normal vacation policy in effect at the time of the change in control of the Company; Following a change in control of the Company, upon termination of Mr. McLaren’s employment or during a period of disability, Mr. McLaren will be entitled to the following benefits: (i) During any period that he fails to perform his full-time duties with the Company as a result of incapacity due to physical or mental illness, Mr. McLaren will continue to receive his base salary at the rate in effect at the commencement of any such period, together with all amounts payable to him under any compensation plan of the Company during such period, until the Golden Parachute Agreement is terminated. (ii) If Mr. McLaren’s employment is terminated by the Company for Cause or by Mr. McLaren other than for Good Reason, disability, death or retirement, the Company will pay Mr. McLaren his full base salary through the date of Termination at the rate in effect at the time notice of Termination is given, plus all other amounts and benefits to which he is entitled under any compensation plan of the Company at the time such payments are due. (iii) If employment by the Company shall be terminated (a) by the Company other than for Cause, death or disability or (b) by Mr. McLaren for Good Reason, Mr. McLaren will be entitled to benefits provided below: a. The Company will pay Mr. McLaren his full base salary through the date of Termination at the rate in effect at the time notice of Termination is given, plus all other amounts and benefits to which he is entitled under any compensation plan of the Company. b. In lieu of any further salary payments to Mr. McLaren for periods subsequent to the date of Termination, the Company will pay as severance pay to Mr. McLaren a lump sum severance payment (together with the payments provided in clauses (c) and (d) below) equal to five times the sum of his annual base salary in effect immediately prior to the occurrence of the circumstance giving rise to the notice of Termination given in respect of them. c. The Company will pay to Mr. McLaren any deferred compensation allocated or credited to him or his account as of the date of Termination. d. In lieu of shares of common stock of the Company issuable upon exercise of outstanding options, if any, granted to Mr. McLaren under the Company’s stock option plans (which options shall be cancelled upon the making of the payment referred to below), Mr. McLaren will receive an amount in cash equal to the product of (i) the excess of the closing price of the Company’s common stock as reported on or nearest the date of Termination (or, if not so reported, on the basis of the average of the lowest asked and highest bid prices on or nearest the date of Termination), over the per share exercise price of each option held by Mr. McLaren (whether or not then fully exercisable) plus the amount of any applicable cash appreciation rights, times (ii) the number of the Company’s common stock covered by each such option. e. The Company will also pay to Mr. McLaren all legal fees and expenses incurred by him as a result of such Termination. 401(k) Plan On September 29 2021, the Company’s board of directors adopted the Zoned Properties 401(k) Plan (the “Plan”) effective January 1, 2021. The Company will contribute a matching contribution to the Plan for each employee in an amount equal to 100% of the matched employee contributions that are not in excess of 4% of the employee’s plan compensation. During the year ended December 31, 2021, contributions into the Plan amounted to $907. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 – SUBSEQUENT EVENTS Stock options The Company’s Board of Directors unanimously agreed to stop receiving any direct stock issuance or cash payments related to their compensation for services on the Company’s Board of Directors. The Company and its Directors believe it is in the Company’s best interest to transition Directors compensation to a multi-year stock option plan. Accordingly, on January 21, 2022, the Company granted stock options to purchase an aggregate of 525,000 of the Company’s common stock at an exercise price of $0.78 per share to members of the Company’s board of directors pursuant to the 2016 Plan. The grant date of the stock options was January 21, 2022 and the options expire on January 21, 2032. The stock option shall vest in equally quarterly installments, with the first installment of 43,750 stock options vesting on January 20, 2022, and 43,750 stock options vesting each quarter through October 21, 2024. The fair value of this option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: dividend yield of 0%; expected volatility of 112.3%; risk-free interest rate of 1.75%; and an estimated holding period of 10 years. In connection with these options, the Company valued these stock options at a fair value of $391,185 and will record stock-based compensation expense over the vesting period. On January 21, 2022, the Company granted a stock option to purchase an aggregate of 75,000 of the Company’s common stock at an exercise price of $1.00 per share to the Company’s chief operating officer pursuant to the 2016 Plan. The grant date of the stock option was January 21, 2022 and the options expire on January 21, 2032. The option vests as to (i) 15,000 of such shares on January 21, 2022; and (ii) as to 7,500 of such shares on January 21, 2023 and each year thereafter through January 21, 2030. The fair value of this option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: dividend yield of 0%; expected volatility of 112.3%; risk-free interest rate of 1.75%; and an estimated holding period of 10 years. In connection with these options, the Company valued these stock options at a fair value of $55,334 and will record stock-based compensation expense over the vesting period. Lease amendment Effective January 24, 2022, Chino Valley and Broken Arrow entered into the Fourth Amendment (the “Fourth Chino Valley Amendment”) to the Licensed Medical Marijuana Facility Triple Net (NNN) Lease Agreement dated May 1, 2018, between Chino Valley and CJK, as amended. Pursuant to the terms of the Fourth Chino Valley Amendment, the parties acknowledge that an additional 30,000 square feet have become operational, increasing the premises to a total of 97,312 square feet of operational space. In connection with the Fourth Chino Valley Amendment, the Company paid $500,000 to CJK as a tenant improvement allowance for investment into the premises, which shall be capitalized as a lease incentive receivable and recognized on a straight-line basis over the remaining lease term as a reduction to the lease income. Pursuant to the terms of the Fourth Chino Valley Amendment, effective March 1, 2022, the monthly base rent was increased to $87,581, representing an increase from $0.82 per square foot to $0.90 per square foot, for all current and future operational square footage that may be developed as the premises continues to expand. In addition, Broken Arrow agreed that it would provide audited financial statements to Chino Valley on an annual basis no later than March 20 th Note payable – related party On January 7, 2022, the Company repaid the note payable – related party in the principal amount of $20,000 and all accrued and unpaid interest due (See Note 9). Assumption of office lease On March 15, 2022, the Company entered to an Assumption of Lease and Consent Agreement with a landlord, whereby the landlord consented to the assignment of an office lease, as amended, from the original tenant to the Company. The lease term shall begin on March 15, 2022 and expire on November 30, 2024, provided the Company has the option to extend the lease for an additional five years. The monthly base rent shall be $2,932 per month through November 30, 2021, $3,005 from December 1, 2022 through November 30, 2023, and $3,078 from December 1, 2023 through November 30, 2024. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation and principles of consolidation | Basis of presentation and principles of consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. |
Use of estimates | Use of estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates for the years ended December 31, 2021 and 2020 include the collectability of accounts and note receivable, the useful life of rental properties and property and equipment, assumptions used in assessing impairment of long-term assets including rental property and investment in joint ventures, valuation allowances for deferred tax assets, and the fair value of non-cash equity transactions, including options and stock-based compensation. |
Risks and uncertainties | Risks and uncertainties The Company’s operations are subject to risk and uncertainties including financial, operational, regulatory and other risks including the potential risk of business failure. The Company conducts a significant portion of its business in Arizona. Additionally, the Company’s tenants operate in the medical marijuana industry. Consequently, any significant economic downturn in the Arizona market or any changes in the federal government’s enforcement of current federal laws or changes in state laws could potentially have a negative effect on the Company’s business, results of operations and financial condition. Additionally, substantially all of the Company’s real estate properties are leased under triple-net leases to tenants that are controlled by one entity (each, a “Significant Tenant” and collectively, the “Significant Tenants”). For the years ended December 31, 2021 and 2020, rental and advisory revenue associated with the Significant Tenants amounted to $1,255,130 and $1,176,666, respectively, which represents 68.9% and 98.6% of the Company’s total revenues, respectively (see Note 3). |
Fair value of financial instruments | Fair value of financial instruments The carrying amounts reported in the consolidated balance sheets for cash, accounts receivable, prepaid expenses and other assets, accounts payable, accrued expenses, and other payables approximate their fair market value based on the short-term maturity of these instruments. The carrying amount of the convertible note receivable approximates fair value based on the current interest rates for instruments with similar characteristics. The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (the “FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company did not identify any assets or liabilities that are required to be presented on the balance sheet at fair value in accordance with Accounting Standards Codification (“ASC”) Topic 820. |
Cash | Cash Cash is carried at cost and represents cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. The Company had no cash equivalents on December 31, 2021 and 2020. The majority of the Company’s cash is held at major commercial banks, which may at times exceed the Federal Deposit Insurance Corporation (“FDIC”) limit. To date, the Company has not experienced any losses on its invested cash. On December 31, 2021 and 2020, the Company had approximately $942,000 and $449,000, respectively, of cash in excess of FDIC limits of $250,000. |
Accounts and convertible notes receivable | Accounts and convertible notes receivable The Company recognizes an allowance for losses on accounts and notes receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current receivables aging and expected future write-offs, as well as an assessment of specific identifiable customer accounts and notes receivable considered at risk or uncollectible. The expense associated with the allowance for doubtful accounts is recognized in general and administrative expense. For the years ended December 31, 2021 and 2020, the Company did not record any allowances for doubtful accounts. |
Investment in Joint Ventures | Investment in joint ventures The Company has equity investments in various privately held entities. The Company accounts for these investments either under the equity method or cost method of accounting depending on the Company’s ownership interest and level of influence. Investments accounted for under the equity method are recorded based upon the amount of the Company’s investment and adjusted each period for its share of the investee’s income or loss. Investments are reviewed for changes in circumstance or the occurrence of events that suggest an other than temporary event where our investment may not be recoverable. The Company evaluates its investments in these entities for consolidation. It considers its percentage interest in the joint venture, evaluation of control and whether a variable interest entity exists when determining whether or not the investment qualifies for consolidation or if it should be accounted for as an unconsolidated investment under either the equity method of accounting. If an investment qualifies for the equity method of accounting, the Company’s investment is recorded initially at cost, and subsequently adjusted for equity in net income (loss) and cash contributions and distributions. The net income or loss of an unconsolidated investment is allocated to its investors in accordance with the provisions of the operating agreement of the entity. The allocation provisions in these agreements may differ from the ownership interest held by each investor. Differences, if any, between the carrying amount of our investment in the respective joint venture and the Company’s share of the underlying equity of such unconsolidated entity are amortized over the respective lives of the underlying assets as applicable. These items are reported as a single line item in the statements of operations as income or loss from investments in unconsolidated affiliated entities. |
Rental properties | Rental properties Rental properties are carried at cost, less accumulated depreciation and amortization. Betterments, major renovations and certain costs directly related to the improvement of rental properties are capitalized. Maintenance and repair expenses are charged to expense as incurred. Depreciation is recognized on a straight-line basis over estimated useful lives of the assets, which range from 5 to 39 years. Tenant improvements are amortized on a straight-line basis over the lives of the related leases, which approximate the useful lives of the assets. Upon the acquisition of real estate, the Company assesses the fair value of acquired assets (including land, buildings and improvements, identified intangibles, such as acquired above-market leases and acquired in-place leases) and acquired liabilities (such as acquired below-market leases) and allocate the purchase price based on these assessments. The Company assesses fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including historical operating results, known trends, and market/economic conditions. The Company’s rental properties are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an undiscounted basis. An impairment loss is measured based on the excess of the property’s carrying amount over its estimated fair value. Impairment analyses are based on our current plans, intended holding periods and available market information at the time the analyses are prepared. If the Company’s estimates of the projected future cash flows, anticipated holding periods, or market conditions change, the Company’s evaluation of impairment losses may be different and such differences could be material to its consolidated financial statements. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results. For the years ended December 31, 2021 and 2020, the Company did not record any impairment losses. The Company has capitalized land, which is not subject to depreciation. |
Property and equipment | Property and equipment Property and equipment is stated at cost, less accumulated depreciation. Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful lives. The Company uses a five-year life for office equipment, seven years for furniture and fixtures, and five to ten years for vehicles. Expenditures for maintenance and repairs are charged to expense as incurred. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. |
Revenue recognition | Revenue recognition The Company follows ASC Topic 606, Revenue from Contracts with Customers Rental income includes base rents that each tenant pays in accordance with the terms of its respective lease and is reported on a straight-line basis over the non-cancellable term of the lease, which includes the effects of rent abatements under the leases. The Company commences rental revenue recognition when the tenant takes possession of the leased space or controls the physical use of the leased space and the leased space is substantially ready for its intended use. Currently, the Company’s leases provide for payments with fixed monthly base rents over the term of the leases. The leases also require the tenant to remit estimated monthly payments to the Company for property taxes. These payments are recorded as rental income and the related property tax expense reflected separately on the statements of operations. Revenues from advisory services is recognized when the Company performs services pursuant to its agreements with clients and collectability is reasonably assured. Brokerage revenues primarily consist of real estate sales commissions and are recognized upon the successful completion of all required services which is when escrow closes. In accordance with the guidelines established for reporting revenue gross as a principal versus net as an agent in ASC Topic 606, the Company records commission revenues and expenses on a gross basis. Of the criteria listed in ASC Topic 606, the Company is the primary obligor in the transaction, does not have inventory risk, performs all or part of the service, has credit risk, and has wide latitude in establishing the price of services rendered and discretion in selection of agents and determination of service specifications. Brokerage revenues that are payable upon payment of rent or other events beyond the Company’s control are recognized upon the occurrence of such events. |
Lease accounting | Lease accounting ASU 2016-02, “ Leases (Topic 842)” For contracts entered into on or after the effective date, where the Company is the lessee, at the inception of a contract, the Company assess whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether we have the right to direct the use of the asset. The Company allocates the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. For leases entered into on or after the effective date, where the Company is the lessor, at the inception of the contract, the Company assesses whether the contract is a sales-type, direct financing or operating lease by reviewing the terms of the lease and determining if the lessee obtains control of the underlying asset implicitly or explicitly. If a change to a pre-existing lease occurs, the Company evaluates if the modification results in a separate new lease or a modified lease. A new lease results when a modification provides additional right of use. The new lease or modified lease is then reassessed to determine its classification based on the modified terms. As disclosed in Note 3, on January 1, 2019, the Chino Valley lease was modified to increase the monthly base rent from $35,000 to $40,000. Additionally, on May 31, 2020, the Chino Valley lease was modified to decrease the monthly base rent from $40,000 to $32,800 and the Tempe lease was modified to increase the monthly base rent from $33,500 to $49,200. On August 23, 2021 and effective September 1, 2021, the Chino Valley lease was amended, and the monthly base rent was increased to $55,195 due to additional space of 27,312 square feet being leased to the lessee. The increase in monthly rent was commensurate with the additional space being leased; therefore, this modification qualifies as a separate contract under ASC 842. At the commencement of the modified terms, the Company reassessed its lease classification and concluded it remained properly classified as an operating lease. The Company records revenues from rental properties for its operating leases on a straight-line basis. Any revenue on the straight-line basis exceeding the monthly payment amount required on the operating lease is reflected as a deferred rent receivable. Effective May 31, 2020, the Company amended its leases for which it is the lessor on its Chino Valley, Tempe, Kingman and Green Valley properties. The amendments resulted in an abatement of rent for the months of June and July 2020. This rent abatement resulted in a deferred rent receivable as of December 31, 2021 and 2020 of $164,770 and $173,757, respectively (see Note 3). For leases where the Company is a lessee, primarily for the Company’s administrative office lease, the Company analyzed if it would be required to record a lease liability and a right of use asset on its consolidated balance sheets at fair value upon adoption of ASU 2016-02. Since the terms of the Company’s operating lease for its office space was 12 months or less, pursuant to ASC 842, the Company determined that the lease meets the definition of a short-term lease and the Company did not recognize a right-of use asset and lease liability arising from this lease. |
Basic and diluted loss per share | Basic and diluted loss per share Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period using the treasury stock method and as-if converted method. Potentially dilutive common shares and participating securities are excluded from the computation of diluted shares outstanding if they would have an anti-dilutive impact on the Company’s net losses. The Company’s preferred stock is considered a participating security since the preferred shares are entitled to dividends equal to common share dividends and accordingly, are included in the computation of earnings per share pursuant to the two-class method. The two-class method of computing (loss) income per share is an earnings allocation formula that determines (loss) income per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. The following potentially dilutive shares have been excluded from the calculation of diluted net loss per share as their effect would be anti-dilutive for the years ended December 31, 2021 and 2020. December 31, 2021 2020 Convertible debt 404,000 404,000 Stock options 1,575,000 1,325,000 1,979,000 1,729,000 |
Segment reporting | Segment reporting The Company’s business is comprised of one reportable segment. The Company has determined that its properties have similar economic characteristics to be aggregated into one reportable segment (operating, leasing and managing commercial properties, and advisory and brokerage services related to commercial properties). The Company’s determination was based primarily on its method of internal reporting. |
Income tax | Income tax Deferred income tax assets and liabilities arise from temporary differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending upon the classification of the asset or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company follows the provisions of FASB ASC 740-10, “Uncertainty in Income Taxes”. Certain recognition thresholds must be met before a tax position is recognized in the financial statements. An entity may only recognize or continue to recognize tax positions that meet a “more-likely-than-not” threshold. The Company does not believe it has any uncertain tax positions as of December 31, 2021 and 2020 that would require either recognition or disclosure in the accompanying consolidated financial statements. |
Stock-based compensation | Stock-based compensation Stock-based compensation is accounted for based on the requirements of ASC 718 – “Compensation –Stock Compensation Improvements to Employee Share-Based Payment Accounting. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. ASU 2016-13 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, and a modified retrospective approach is required, with a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. In November of 2019, the FASB issued ASU 2019-10, which delayed the implementation of ASU 2016-13 to fiscal years beginning after December 15, 2022 for smaller reporting companies which applies to the Company. The Company is currently evaluating the impact of ASU 2016-13 on its future consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for certain convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity’s own equity and requires the use of the if-converted method for calculating diluted earnings per share. The ASU removes separation models for convertible debt with a cash conversion feature. Such convertible instruments will be accounted for as a single liability measured at amortized cost. The ASU is effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted after December 15, 2020, which can either be on a modified retrospective or full retrospective basis. Adoption of the ASU is not expected to have a material impact on the Company's financial condition and results of operations. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of diluted net loss per share as their effect would be anti-dilutive | December 31, 2021 2020 Convertible debt 404,000 404,000 Stock options 1,575,000 1,325,000 1,979,000 1,729,000 |
Concentrations and Risks (Table
Concentrations and Risks (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
Schedule of future minimum lease payments | Future annual base rent *: 2022 $ 1,362,403 2023 1,362,403 2024 1,362,403 2025 1,362,403 2026 1,350,939 Thereafter 17,903,334 Total $ 24,703,885 * Future annual base rent does not include the Fourth Chino Valley Amendment, effective March 1, 2022 which increased the monthly base rent to $87,581, or an annual base rent to $1,050,972 (See Note 13). |
Rental Properties (Tables)
Rental Properties (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Rental Properties [Abstract] | |
Schedule of rental properties, net | Description Useful Life December 31, December 31, Building and building improvements 5-39 $ 6,293,748 $ 6,260,524 Land - 2,016,548 2,283,214 Rental properties, at cost 8,310,296 8,543,738 Less: accumulated depreciation (1,868,831 ) (1,516,302 ) Rental properties, net $ 6,441,465 $ 7,027,436 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Intangible Assets [Abstract] | |
Schedule of intangible assets | Useful life December 31, December 31, Real estate brokerage materials and listing 1 year $ 37,800 - Less: accumulated amortization (28,350 ) - $ 9,450 $ - |
Investment in Joint Ventures (T
Investment in Joint Ventures (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of company’s original investments in the unconsolidated affiliated entities and net carrying value amount | Net Carrying Value Entity Date Acquired Ownership Original December 31, December 31, Beakon, LLC (the “Beakon Joint Venture”) April 22, 2021 50.0 % $ 86,000 $ - $ - Zoneomics Green, LLC (the “Zoneomics Green Joint Venture”) May 1, 2021 50.0 % 90,000 74,554 - Total investments in unconsolidated joint venture entities $ 176,000 $ 74,554 $ - |
Schedule of financial statements of the Beakon and Zoneomics Green Joint Ventures | Beakon Zoneomics Current assets: Cash $ 2,940 $ 59,109 Licensing agreement 150,000 - Total assets $ 152,940 $ 59,109 Liabilities $ - $ - Equity 152,940 59,109 Total liabilities and equity $ 152,940 $ 59,109 |
Schedule of investments | For the Year Ended Beakon Zoneomics Net sales $ - $ - Operating expenses (24,060 ) (30,891 ) Net loss $ (24,060 ) $ (30,891 ) Company’s share of loss from unconsolidated joint ventures $ (12,030 ) $ (15,446 ) |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of stock option activities | Number of Weighted Weighted Average Aggregate Balance Outstanding December 31, 2019 1,290,000 $ 0.99 5.74 $ - Granted 125,000 1.00 - Forfeited (90,000 ) 1.00 - Balance Outstanding December 31, 2020 1,325,000 0.99 4.85 - Granted 250,000 1.00 - - Balance Outstanding December 31, 2021 1,575,000 $ 0.99 4.71 $ 1,400 Exercisable, December 31, 2021 1,300,000 $ 0.99 4.00 $ 1,400 Balance Non-vested on December 31, 2020 100,000 $ 1.00 - $ - Granted 250,000 1.00 - - Vested during the period (75,000 ) 1.00 - - Balance Non-vested on December 31, 2021 275,000 $ 1.00 8.10 $ - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of effective statutory rate and the provision for income taxes | Years Ended 2021 2020 Income tax benefit at U.S. statutory rate $ (34,822 ) $ (16,311 ) Income tax benefit – state (10,778 ) (5,092 ) Non-deductible expenses 16,192 6,663 Change in valuation allowance 29,408 14,740 ) Total provision for income tax $ - $ - |
Schedule of net deferred tax asset | Deferred Tax Asset: December 31, December 31, Net operating loss carryforward $ 514,580 $ 485,172 Net deferred tax assets before valuation allowance 514,580 485,172 Valuation allowance (514,580 ) (485,172 ) Net deferred tax asset $ - $ - |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | Sep. 01, 2021 | May 31, 2020 | Jan. 01, 2019 | May 01, 2018 | Aug. 23, 2021 | May 29, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||
Rental and advisory revenue | $ 1,255,130 | $ 1,176,666 | ||||||
Total revenues, percentage | 68.90% | 98.60% | ||||||
Amount of cash excess of FDIC | $ 942,000 | $ 449,000 | ||||||
Federal deposit insurance corporation limits | 250,000 | |||||||
Description of Chino Valley lease | On August 23, 2021 and effective September 1, 2021, the Chino Valley lease was amended, and the monthly base rent was increased to $55,195 due to additional space of 27,312 square feet being leased to the lessee. | |||||||
Deferred rent receivable | $ 164,770 | $ 173,757 | ||||||
Furniture and Fixtures [Member] | ||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||
Estimated useful life of assets | 7 years | |||||||
Minimum [Member] | Tenant Improvements [Member] | ||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||
Estimated useful life of assets | 5 years | |||||||
Minimum [Member] | Vehicles [Member] | ||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||
Estimated useful life of assets | 5 years | |||||||
Maximum [Member] | Tenant Improvements [Member] | ||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||
Estimated useful life of assets | 39 years | |||||||
Maximum [Member] | Vehicles [Member] | ||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||
Estimated useful life of assets | 10 years | |||||||
Chino Valley Lease [Member] | ||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||
Increase in monthly base rent payable | $ 55,195 | $ 35,000 | $ 32,800 | |||||
Chino Valley Lease [Member] | Minimum [Member] | ||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||
Base rent per month | $ 35,000 | |||||||
Decrease in monthly base rent payable | $ 40,000 | |||||||
Increase in monthly base rent payable | 35,000 | |||||||
Chino Valley Lease [Member] | Maximum [Member] | ||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||
Base rent per month | $ 40,000 | |||||||
Decrease in monthly base rent payable | 32,800 | |||||||
Increase in monthly base rent payable | $ 40,000 | |||||||
Tempe Lease [Member] | Minimum [Member] | ||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||
Increase in monthly base rent payable | 33,500 | |||||||
Tempe Lease [Member] | Maximum [Member] | ||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||
Increase in monthly base rent payable | $ 49,200 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of diluted net loss per share as their effect would be anti-dilutive - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares | 1,979,000 | 1,729,000 |
Convertible Debt [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares | 404,000 | 404,000 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares | 1,575,000 | 1,325,000 |
Concentrations and Risks (Detai
Concentrations and Risks (Details) | Sep. 01, 2021USD ($) | May 01, 2018USD ($) | May 29, 2020USD ($) | Dec. 31, 2021USD ($)ft²$ / shares | Dec. 31, 2020USD ($) |
Concentrations and Risks (Details) [Line Items] | |||||
Least of improvements | $ 8,000,000 | ||||
Improvements to the facilities | $ 8,000,000 | ||||
Additional square feet (in Square Feet) | ft² | 30,000 | ||||
Operational space square feet (in Square Feet) | ft² | 97,312 | ||||
Deferred rent receivable - related parties | $ 164,770 | $ 173,757 | |||
Terminate date | The majority of the Company’s real estate properties are leased to the Significant Tenants under triple-net leases that terminate in April 2040. | ||||
Total Revenues [Member] | |||||
Concentrations and Risks (Details) [Line Items] | |||||
Rental revenue | $ 1,255,130 | $ 1,176,666 | |||
Percentage of total revenue | 68.90% | 96.80% | |||
Mr. Abrams [Member] | |||||
Concentrations and Risks (Details) [Line Items] | |||||
Convertible debt | $ 2,000,000 | ||||
Tenants [Member] | |||||
Concentrations and Risks (Details) [Line Items] | |||||
Security deposits payable - related parties | 71,800 | $ 71,800 | |||
Advisory services | $ 2,813 | $ 2,375 | |||
Percentage of total assets | 79.20% | 83.20% | |||
Chino Valley Lease [Member] | |||||
Concentrations and Risks (Details) [Line Items] | |||||
Lease term | 22 years | ||||
Base rent per month | $ 55,195 | $ 35,000 | $ 32,800 | ||
Advisory services agreement, description | Pursuant to the terms of the 2020 Chino Valley Amendment, the parties agreed that if there is any change in laws such that the dispensing, sale or cultivation of marijuana upon the premises is prohibited or materially and adversely affected as mutually and reasonably determined by Chino Valley and Broken Arrow, Broken Arrow may terminate the 2018 Chino Valley Lease, as amended, by delivering written notice to Chino Valley, together with a termination payment which shall be the sum of (i) any unpaid rent and interest, plus (ii) 5% of the base rent which would have been earned after termination for the balance of the term. | ||||
Least of improvements | $ 8,000,000 | ||||
Fixed rate per shares (in Dollars per share) | $ / shares | $ 0.82 | ||||
Chino Valley Lease [Member] | Minimum [Member] | |||||
Concentrations and Risks (Details) [Line Items] | |||||
Base rent per month | 35,000 | ||||
Chino Valley Lease [Member] | Maximum [Member] | |||||
Concentrations and Risks (Details) [Line Items] | |||||
Base rent per month | $ 40,000 | ||||
Green Valley Lease [Member] | |||||
Concentrations and Risks (Details) [Line Items] | |||||
Lease term | 22 years | ||||
Base rent per month | $ 3,500 | $ 3,500 | |||
Advisory services agreement, description | The parties also agreed that if there is any change in laws such that the dispensing, sale or cultivation of marijuana upon the premises is prohibited or materially and adversely affected as mutually and reasonably determined by Green Valley and Broken Arrow, Broken Arrow may terminate the Green Valley Lease by delivering written notice to Green Valley, together with a termination payment which shall be the sum of (i) any unpaid rent and interest, plus (ii) 5% of the base rent which would have been earned after termination for the balance of the term. | ||||
Zoned Arizona [Member] | |||||
Concentrations and Risks (Details) [Line Items] | |||||
Lease term | 22 years | ||||
Base rent per month | $ 33,500 | $ 49,200 | |||
Least of improvements | $ 8,000,000 | ||||
Improvements to the facilities | 8,000,000 | ||||
Advisory services agreement, description | Pursuant to the terms of the Tempe Amendment, the parties agreed that if there is any change in laws such that the dispensing, sale or cultivation of marijuana upon the premises is prohibited or materially and adversely affected as mutually and reasonably determined by Zoned Arizona and CJK, CJK may terminate the Tempe Lease by delivering written notice to Zoned Arizona, together with a termination payment which shall be the sum of (i) any unpaid rent and interest, plus (ii) 5% of the base rent which would have been earned after termination for the balance of the term. | ||||
Kingman Lease [Member] | |||||
Concentrations and Risks (Details) [Line Items] | |||||
Lease term | 22 years | ||||
Base rent per month | $ 4,000 | $ 4,000 | |||
Advisory services agreement, description | The parties also agreed that if there is any change in laws such that the dispensing, sale or cultivation of marijuana upon the premises is prohibited or materially and adversely affected as mutually and reasonably determined by Kingman and CJK, CJK may terminate the Kingman Lease by delivering written notice to Kingman, together with a termination payment which shall be the sum of (i) any unpaid rent and interest, plus (ii) 5% of the base rent which would have been earned after termination for the balance of the term. | ||||
Convertible debt | $ 2,000,000 |
Concentrations and Risks (Det_2
Concentrations and Risks (Details) - Schedule of future minimum lease payments | Dec. 31, 2021USD ($) | [1] |
Schedule of future minimum lease payments [Abstract] | ||
2022 | $ 1,362,403 | |
2023 | 1,362,403 | |
2024 | 1,362,403 | |
2025 | 1,362,403 | |
2026 | 1,350,939 | |
Thereafter | 17,903,334 | |
Total | $ 24,703,885 | |
[1] | Future annual base rent does not include the Fourth Chino Valley Amendment, effective March 1, 2022 which increased the monthly base rent to $87,581, or an annual base rent to $1,050,972 (See Note 13). |
Rental Properties (Details)
Rental Properties (Details) - USD ($) | Jun. 01, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Rental Properties [Abstract] | |||
Aggregate purchase price | $ 335,000 | ||
Net proceed | 322,332 | ||
Gain on sale rental property | $ 51,944 | ||
Depreciation of rental properties amounted | $ 352,529 | $ 356,934 |
Rental Properties (Details) - S
Rental Properties (Details) - Schedule of rental properties, net - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Rental Properties (Details) - Schedule of rental properties, net [Line Items] | ||
Rental properties, at cost | $ 8,310,296 | $ 8,543,738 |
Less: accumulated depreciation | (1,868,831) | (1,516,302) |
Rental properties, net | 6,441,465 | 7,027,436 |
Building and Building Improvements [Member] | ||
Rental Properties (Details) - Schedule of rental properties, net [Line Items] | ||
Rental properties, at cost | 6,293,748 | 6,260,524 |
Land [Member] | ||
Rental Properties (Details) - Schedule of rental properties, net [Line Items] | ||
Rental properties, at cost | $ 2,016,548 | $ 2,283,214 |
Minimum [Member] | Building and Building Improvements [Member] | ||
Rental Properties (Details) - Schedule of rental properties, net [Line Items] | ||
Useful Life (Years) | 5 years | |
Maximum [Member] | Building and Building Improvements [Member] | ||
Rental Properties (Details) - Schedule of rental properties, net [Line Items] | ||
Useful Life (Years) | 39 years |
Convertible Note Receivable (De
Convertible Note Receivable (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Mar. 19, 2020 | Dec. 31, 2021 | Feb. 19, 2021 | Dec. 31, 2020 | |
Convertible Note Receivable (Details) [Line Items] | ||||
Bears interest rate | 12.00% | |||
Total outstanding percentage description | constituting 10% of the total outstanding units and 10% of the total percentage interest following such issuance and at the time of such issuance. | |||
Conversion interest percentage, description | the Company may convert all or a portion of the principal balance and all accrued and unpaid interest due into a number of units equal to the proportion of the outstanding amount being converted multiplied by 33% of the total number of units issued and outstanding at the time of conversion, constituting 33% of the total percentage interest (the “Conversion Percentage”). | |||
Exercise its rights of prepayment description | (ii) the Company does not elect to exercise its rights of conversion, and (iii) KCB pays to the Company all outstanding principal and interest accrued and due under the terms of the KCB Debenture on the Maturity Date, the Company will still be entitled to receive a number of units, in addition to such payment amount, constituting 8% of the total outstanding units and 8% of the total percentage interest following such issuance and at the time of such issuance. | |||
Initial fee percentage | 5.00% | |||
Renewal fee percentage | 5.00% | |||
Accrued interest rate | 12.00% | |||
Conversion percentage description | The Conversion Percentage will be 33% of the total number of Units (for the avoidance of doubt, being 33% of the total of the Class A Units and the Class B Units together), issued and outstanding at the time of conversion, constituting 33% of the total Percentage Interest (the “Conversion Percentage”). | |||
Convertible note receivable | $ 200,000 | $ 100,000 | ||
Interest receivable | $ 10,756 | $ 5,129 | ||
KCB Debenture [Member] | ||||
Convertible Note Receivable (Details) [Line Items] | ||||
Initial investment | $ 100,000 | |||
Original principal amount | $ 100,000 | |||
Bears interest rate | 6.50% | |||
Debt maturity date | Mar. 19, 2025 | |||
Additional investment | $ 100,000 | |||
Right of Prepayment [Member] | ||||
Convertible Note Receivable (Details) [Line Items] | ||||
Operating agreement description | However, if KCB elects to prepay the Second A&R Debenture prior to March 19, 2025 (the “Maturity Date”) or prior to any conversion in whole or in part, the Company will be entitled to receive a number of KCB Class B units (“Class B Units”), in addition to such prepayment amount, constituting 10% of the total outstanding KCB Units (as defined in KCB’s Limited Liability Company Operating Agreement (the “Operating Agreement”), for the avoidance of doubt, being 10% of the total of KCB’s Class A units (“Class A Units”) and the Class B Units together, and 10% of the total Percentage Interest (as defined in the Operating Agreement) following such issuance and at the time of such issuance. | |||
Right of Maturity Units [Member] | ||||
Convertible Note Receivable (Details) [Line Items] | ||||
Conversion rights description | If (i) KCB does not elect to exercise its prepayment rights prior to the Maturity Date, and (ii) the Company does not elect to exercise its conversion rights, and (iii) KCB pays to the Company all outstanding principal and interest accrued and due under the terms of the Second A&R Debenture on the Maturity Date, then the Company will still be entitled to receive a number of Class B Units, in addition to such payment amount, constituting 8% of the total outstanding Units (for the avoidance of doubt, being 8% of the total of the Class A Units and the Class B Units together) and 8% of the total Percentage Interest (as such term is defined in the Second A&R Debenture) following such issuance and at the time of such issuance. |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Apr. 01, 2021 | Dec. 31, 2021 |
Intangible Assets [Abstract] | ||
Consultant guaranteed term | 1 year | |
Shares issued (in Shares) | 60,000 | |
Fair value | $ 37,800 | |
Quoted per share price (in Dollars per share) | $ 0.63 | |
Intangible asset | $ 37,800 | |
Amortization of intangible assets | $ 28,350 |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of intangible assets - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of intangible assets [Abstract] | ||
Useful life | 1 year | |
Real estate brokerage materials and listing | $ 37,800 | |
Less: accumulated amortization | (28,350) | |
Total | $ 9,450 |
Investment in Joint Ventures (D
Investment in Joint Ventures (Details) - USD ($) | Jun. 30, 2021 | May 01, 2021 | Apr. 16, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Investment in Joint Ventures (Details) [Line Items] | |||||
Aggregate investments | $ 74,554 | $ 0 | |||
Equity method investment membership interests percentage | 50.00% | ||||
Equity ownership and voting rights percentage | 50.00% | 50.00% | |||
Payments to acquire equity method investments | $ 90,000 | ||||
Other-than-temporary impairment loss | (73,970) | ||||
Impairment loss from unconsolidated joint ventures | $ (73,970) | ||||
Loss from joint ventures, description | During the year ended December 31, 2021, the Company recorded a loss from joint venture of $101,446 which represents the Company’s proportionate share of losses from its joint ventures of $27,476 and a loss on impairment of $73,970. | ||||
Beakon [Member] | |||||
Investment in Joint Ventures (Details) [Line Items] | |||||
Purchase units (in Shares) | 50 | ||||
Purchase units value | $ 50 | ||||
Equity method investment membership interests percentage | 50.00% | ||||
Payments to acquire equity method investments | $ 86,000 | ||||
Zoneomics Green [Member] | |||||
Investment in Joint Ventures (Details) [Line Items] | |||||
Purchase units (in Shares) | 50 | ||||
Capital contribution | $ 90,000 |
Investment in Joint Ventures _2
Investment in Joint Ventures (Details) - Schedule of company’s original investments in the unconsolidated affiliated entities and net carrying value amount - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Variable Interest Entity [Line Items] | ||
Total, Original Investment Amount | $ 176,000 | |
Total | $ 74,554 | |
Beakon, LLC [Member] | ||
Variable Interest Entity [Line Items] | ||
Date Acquired | Apr. 22, 2021 | |
Ownership | 50.00% | |
Original Investment Amount | $ 86,000 | |
Balance | ||
Zoneomics Green, LLC [Member] | ||
Variable Interest Entity [Line Items] | ||
Date Acquired | May 1, 2021 | |
Ownership | 50.00% | |
Original Investment Amount | $ 90,000 | |
Balance | $ 74,554 |
Investment in Joint Ventures _3
Investment in Joint Ventures (Details) - Schedule of financial statements of the Beakon and Zoneomics Green Joint Ventures | Dec. 31, 2021USD ($) |
Beakon [Member] | |
Current assets: | |
Cash | $ 2,940 |
Licensing agreement | 150,000 |
Total assets | 152,940 |
Liabilities | |
Equity | 152,940 |
Total liabilities and equity | 152,940 |
Zoneomics [Member] | |
Current assets: | |
Cash | 59,109 |
Licensing agreement | |
Total assets | 59,109 |
Liabilities | |
Equity | 59,109 |
Total liabilities and equity | $ 59,109 |
Investment in Joint Ventures _4
Investment in Joint Ventures (Details) - Schedule of investments | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Beakon [Member] | |
Investment in Joint Ventures (Details) - Schedule of investments [Line Items] | |
Net sales | |
Operating expenses | (24,060) |
Net loss | (24,060) |
Company’s share of loss from unconsolidated joint ventures | (12,030) |
Zoneomics [Member] | |
Investment in Joint Ventures (Details) - Schedule of investments [Line Items] | |
Net sales | |
Operating expenses | (30,891) |
Net loss | (30,891) |
Company’s share of loss from unconsolidated joint ventures | $ (15,446) |
Convertible Note Payable (Detai
Convertible Note Payable (Details) - Abrams Debenture [Member] - USD ($) | Jan. 09, 2017 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 01, 2018 |
Convertible Note Payable (Details) [Line Items] | ||||
Principal balance | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 |
Convertible notes payable exchange cash | $ 2,000,000 | |||
Percentage of debenture interest | 6.00% | |||
Common stock conversion price per share (in Dollars per share) | $ 5 | |||
Bear interest rate | 12.00% | |||
Interest expense | $ 120,000 | 120,000 | ||
Accrued interest payable | $ 30,000 | $ 30,000 |
Related Party Transaction (Deta
Related Party Transaction (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Jan. 09, 2017 | |
Related Party Transaction (Details) [Line Items] | |||
Debentures accrued interest | 6.00% | ||
Debt instrument, maturity date | Jan. 9, 2022 | ||
Common stock conversion price per share (in Dollars per share) | $ 5 | ||
Interest expenses - related parties | $ 1,200 | $ 1,200 | |
McLaren Debenture [Member] | |||
Related Party Transaction (Details) [Line Items] | |||
Principal amount of convertible debt | $ 20,000 | ||
Convertible notes payable exchange cash | $ 20,000 | ||
Principal balance of debentures | 20,000 | 20,000 | |
Accrued interest payable | $ 5,400 | $ 4,200 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - USD ($) | Apr. 01, 2021 | Jan. 06, 2020 | Dec. 13, 2013 | Jul. 01, 2021 | Jan. 31, 2021 | Jan. 02, 2021 | Jan. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 09, 2016 |
Stockholders’ Equity (Details) [Line Items] | ||||||||||
Preferred stock, shares authorized | 5,000,000 | |||||||||
Preferred stock, par value (in Dollars per share) | $ 1 | |||||||||
Preferred stock, voting rights description | The holders of the preferred stock are entitled to fifty (50) votes for each share held. | |||||||||
Receive per share (in Dollars per share) | $ 1 | |||||||||
Preferred stock shares outstanding | 2,000,000 | 2,000,000 | ||||||||
Preferred stock outstanding transactions description | Once any shares of Preferred Stock are outstanding, at least 51% of the total number of shares of Preferred Stock outstanding must approve the following transactions: | |||||||||
Common stock shares issued | 110,000 | 130,000 | ||||||||
Aggregate fair value (in Dollars) | $ 24,200 | $ 52,000 | ||||||||
Price per share (in Dollars per share) | $ 0.22 | $ 0.4 | ||||||||
Stock-based compensation expense (in Dollars) | $ 52,000 | $ 56,180 | $ 24,231 | |||||||
Share issued | 60,000 | |||||||||
Shares valued at fair value (in Dollars) | $ 37,800 | |||||||||
Share price (in Dollars per share) | $ 0.63 | |||||||||
Intangible assets (in Dollars) | $ 37,800 | |||||||||
Number of options outstanding | 1,575,000 | |||||||||
Number of options vested and exercisable | 1,300,000 | |||||||||
Unvested stock-based compensation expense (in Dollars) | $ 92,335 | |||||||||
Aggregate intrinsic value (in Dollars) | $ 1,400 | |||||||||
Share per price (in Dollars per share) | $ 0.775 | |||||||||
2016 Plan [Member] | ||||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||||
Reserved shares of common stock | 10,000,000 | |||||||||
Stock option awards | 325,000 | 75,000 | ||||||||
Stock option exercisable | 125,000 | 75,000 | ||||||||
Future issuance shares | 9,675,000 | 9,925,000 | ||||||||
2016 Plan [Member] | Director of Real Estate [Member] | ||||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||||
Stock option to purchase | 125,000 | |||||||||
Exercise price (in Dollars per share) | $ 1 | |||||||||
Stock option description | The grant date of the option was July 1, 2021 and the option expires on July 1, 2031. The option vests as to (i) 25,000 of such shares on July 1, 2021; and (ii) as to 10,000 of such shares on July 1, 2022 and each year thereafter through July 1, 2031. The vesting of the Option pursuant to the Vesting Schedule hereof is earned only by continuing as a service provider at the will of the Company. The fair value of this option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: dividend yield of 0%; expected volatility of 119%; risk-free interest rate of 1.48%; and an estimated holding period of 10 years. In connection with these options, the Company valued these options at a fair value of $69,677 and will record stock-based compensation expense over the vesting period. | |||||||||
2016 Plan [Member] | Equity Option [Member] | ||||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||||
Purchase of common stock | 125,000 | |||||||||
Exercise price (in Dollars per share) | $ 1 | |||||||||
Stock option description | The grant date of the option was January 6, 2020 and the option expires on January 6, 2030. The option vests as to (i) 35,000 of such shares on January 6, 2020; and (ii) as to 10,000 of such shares on January 6, 2021 and each year thereafter through January 6, 2029. The fair value of this option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: dividend yield of 0%; expected volatility of 110%; risk-free interest rate of 1.81%; and an estimated holding period of 10 years. In connection with these options, the Company valued these options at a fair value of $23,388 and will record stock-based compensation expense over the vesting period. In July 2020, this employee was terminated and 90,000 unvested options were cancelled. | |||||||||
2014 Plan [Member] | ||||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||||
Terms of plan, description | The Company also continues to maintain its 2014 Equity Compensation Plan (the “2014 Plan”), pursuant to which 1,250,000 previously awarded stock options are outstanding. The 2014 Plan has been superseded by the 2016 Plan. Accordingly, no additional shares subject to the existing 2014 Plan will be issued and the 1,250,000 shares issuable upon exercise of stock options will be issued pursuant to the 2014 Plan, if exercised. | |||||||||
Stock option to purchase | 1,250,000 | 1,175,000 | ||||||||
Board of Directors [Member] | ||||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||||
Stock-based compensation expense (in Dollars) | $ 24,200 | |||||||||
Chief Operating Officer [Member] | 2016 Plan [Member] | ||||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||||
Purchase of common stock | 125,000 | |||||||||
Exercise price (in Dollars per share) | $ 1 | |||||||||
Stock option description | The grant date of the option was January 1, 2021 and the option expires on January 1, 2031. The option vests as to (i) 25,000 of such shares on January 1, 2021; and (ii) as to 10,000 of such shares on January 1, 2022 and each year thereafter through January 1, 2031. The fair value of this option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: dividend yield of 0%; expected volatility of 117%; risk-free interest rate of 0.93%; and an estimated holding period of 10 years. In connection with these options, the Company valued these options at a fair value of $48,677 and will record stock-based compensation expense over the vesting period. |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - Schedule of stock option activities - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of stock option activities [Abstract] | ||
Number of Options, Outstanding, Beginning balance | 1,325,000 | 1,290,000 |
Weighted Average Exercise Price, Beginning balance | $ 0.99 | $ 0.99 |
Weighted Average Remaining Contractual Term (Years), Beginning balance | 5 years 8 months 26 days | |
Aggregate Intrinsic Value, Beginning balance | ||
Number of Options, Granted | 250,000 | 125,000 |
Weighted Average Exercise Price, Granted | $ 1 | $ 1 |
Aggregate Intrinsic Value, Granted | ||
Number of Options, Exercisable | 1,300,000 | |
Weighted Average Remaining Contractual Term (Years), Exercisable | 4 years | |
Aggregate Intrinsic Value, Exercisable | $ 1,400 | |
Weighted Average Exercise Price, Exercisable | $ 0.99 | |
Number of Options, Non-vested, Beginning balance | 100,000 | |
Aggregate Intrinsic Value, Non-vested, Beginning balance | ||
Weighted Average Exercise Price, Non-vested, Beginning balance | $ 1 | |
Number of Options, Granted | 250,000 | |
Weighted Average Exercise Price, Granted | $ 1 | |
Number of Options, Vested during the period | (75,000) | |
Aggregate Intrinsic Value, Vested during the period | ||
Weighted Average Exercise Price, Vested during the period | $ 1 | |
Number of Options, Non-vested, ending balance | 275,000 | 100,000 |
Weighted Average Remaining Contractual Term (Years), Non-vested, ending balance | 8 years 1 month 6 days | |
Aggregate Intrinsic Value, Non-vested, ending balance | ||
Weighted Average Exercise Price, Non-vested, ending balance | $ 1 | $ 1 |
Number of Options, Forfeited | (90,000) | |
Weighted Average Exercise Price, Forfeited | $ 1 | |
Aggregate Intrinsic Value, Forfeited | ||
Number of Options, Outstanding, Ending balance | 1,575,000 | 1,325,000 |
Weighted Average Remaining Contractual Term (Years), Outstanding, Ending balance | 4 years 8 months 15 days | 4 years 10 months 6 days |
Aggregate Intrinsic Value, Outstanding, Ending balance | $ 1,400 | |
Weighted Average Exercise Price, Outstanding, Ending balance | $ 0.99 | $ 0.99 |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Income Tax Disclosure [Abstract] | |
Net operating loss carryforward | $ 1,871,200 |
Estimated loss carry forward | $ 1,488,189 |
Expiration date | Dec. 31, 2037 |
Increase in valuation allowance | $ 29,408 |
Net loss carryforward expire | 2041 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of effective statutory rate and the provision for income taxes - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of effective statutory rate and the provision for income taxes [Abstract] | ||
Income tax benefit at U.S. statutory rate | $ (34,822) | $ (16,311) |
Income tax benefit – state | (10,778) | (5,092) |
Non-deductible expenses | 16,192 | 6,663 |
Change in valuation allowance | 29,408 | 14,740 |
Total provision for income tax |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of net deferred tax asset - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of net deferred tax asset [Abstract] | ||
Net operating loss carryforward | $ 514,580 | $ 485,172 |
Net deferred tax assets before valuation allowance | 514,580 | 485,172 |
Valuation allowance | (514,580) | (485,172) |
Net deferred tax asset |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Sep. 29, 2021 | May 23, 2018 | Apr. 22, 2016 | Dec. 31, 2021 | Apr. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Purchase price of property | $ 499,857 | ||||
Refundable deposit into escrow | $ 45,000 | ||||
Current base annual salary | $ 215,000 | ||||
Net income, percentage | 2.00% | ||||
Employment agreement period | 10 years | ||||
Employee contributions | 100.00% | ||||
Employee’s plan compensation | 4.00% | ||||
Plan amount | $ 907 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) | Mar. 15, 2022 | Jan. 24, 2022 | Jan. 21, 2022 | Jan. 07, 2022 |
Subsequent Events (Details) [Line Items] | ||||
Granted stock options to purchase an aggregate (in Shares) | 75,000 | |||
Common stock at an exercise price (in Dollars per share) | $ 1 | |||
Subsequent event, description | The grant date of the stock option was January 21, 2022 and the options expire on January 21, 2032. The option vests as to (i) 15,000 of such shares on January 21, 2022; and (ii) as to 7,500 of such shares on January 21, 2023 and each year thereafter through January 21, 2030. | |||
Dividend yield | 0.00% | |||
Expected volatility | 112.30% | |||
Risk-free interest rate | 1.75% | |||
Estimated holding period | 10 years | |||
Fair value stock-based compensation expense over the vesting period (in Dollars) | $ 55,334 | |||
Lease amendment, description | Chino Valley and Broken Arrow entered into the Fourth Amendment (the “Fourth Chino Valley Amendment”) to the Licensed Medical Marijuana Facility Triple Net (NNN) Lease Agreement dated May 1, 2018, between Chino Valley and CJK, as amended. Pursuant to the terms of the Fourth Chino Valley Amendment, the parties acknowledge that an additional 30,000 square feet have become operational, increasing the premises to a total of 97,312 square feet of operational space. In connection with the Fourth Chino Valley Amendment, the Company paid $500,000 to CJK as a tenant improvement allowance for investment into the premises, which shall be capitalized as a lease incentive receivable and recognized on a straight-line basis over the remaining lease term as a reduction to the lease income.Pursuant to the terms of the Fourth Chino Valley Amendment, effective March 1, 2022, the monthly base rent was increased to $87,581, representing an increase from $0.82 per square foot to $0.90 per square foot, for all current and future operational square footage that may be developed as the premises continues to expand. In addition, Broken Arrow agreed that it would provide audited financial statements to Chino Valley on an annual basis no later than March 20th of each calendar year. | |||
Principal amount (in Dollars) | $ 20,000 | |||
Assumption of office lease, description | the Company entered to an Assumption of Lease and Consent Agreement with a landlord, whereby the landlord consented to the assignment of an office lease, as amended, from the original tenant to the Company. The lease term shall begin on March 15, 2022 and expire on November 30, 2024, provided the Company has the option to extend the lease for an additional five years. The monthly base rent shall be $2,932 per month through November 30, 2021, $3,005 from December 1, 2022 through November 30, 2023, and $3,078 from December 1, 2023 through November 30, 2024. | |||
Stock Options [Member] | ||||
Subsequent Events (Details) [Line Items] | ||||
Granted stock options to purchase an aggregate (in Shares) | 525,000 | |||
Common stock at an exercise price (in Dollars per share) | $ 0.78 | |||
Subsequent event, description | The grant date of the stock options was January 21, 2022 and the options expire on January 21, 2032. The stock option shall vest in equally quarterly installments, with the first installment of 43,750 stock options vesting on January 20, 2022, and 43,750 stock options vesting each quarter through October 21, 2024. | |||
Dividend yield | 0.00% | |||
Expected volatility | 112.30% | |||
Risk-free interest rate | 1.75% | |||
Estimated holding period | 10 years | |||
Fair value stock-based compensation expense over the vesting period (in Dollars) | $ 391,185 |