Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Apr. 15, 2019 | Jun. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | Pure Harvest Cannabis Group, Inc. | ||
Entity Central Index Key | 0001351573 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,750,000 | ||
Entity Common Stock, Shares Outstanding | 15,761,665 | ||
Trading Symbol | PCKK | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash | $ 22,501 | $ 1,127 |
Accounts receivable | 22,802 | |
Due from related party | 11 | |
Inventory | 63,940 | |
Total current assets | 109,243 | 1,138 |
FIXED ASSETS | ||
Machinery & equipment | 305,165 | |
Accumulated depreciation | (274,615) | |
Total fixed assets | 30,550 | 0 |
TOTAL ASSETS | 139,793 | 1,138 |
CURRENT LIABILITIES | ||
Accounts payable | 104,330 | 89,258 |
Accrued expense | 36,000 | |
Royalty payable | 194 | |
Due to related parties | 19,889 | |
Loans | 117,000 | 117,000 |
Total current liabilities | 277,412 | 206,258 |
TOTAL LIABILITIES | 277,412 | 206,258 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Common Stock, $.001 Par Value; 100,000,000 shares authorized; 15,761,665 shares outstanding at December 31, 2018 (8,953,008 shares outstanding at December 31, 2017) | 157,617 | 89,530 |
Additional paid-in capital | (43,922) | (89,505) |
Accumulated deficit | (251,314) | (205,145) |
Total stockholders' equity (deficit) | (137,619) | (205,120) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 139,793 | $ 1,138 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, no par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares outstanding | 15,761,665 | 8,953,008 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
REVENUES | ||
Royalty income | ||
Costs of sales | ||
Gross margin | ||
OPERATING EXPENSES | ||
Advertising and promotion | ||
General and administrative expenses | 46,169 | 205,145 |
Travel and entertainment | ||
Depreciation expense | ||
Total Operating Expenses | 46,169 | 205,145 |
NET LOSS | $ (46,169) | $ (205,145) |
Per share loss per average share - basic and diluted | $ (0.01) | $ (0.02) |
Weighted average shares - basic and diluted | 8,953,008 | 8,953,008 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (46,169) | $ (205,145) |
Changes in Operating Assets and Liabilities | ||
Accounts Receivable | ||
Inventory | ||
Accounts payable | 500 | 89,258 |
Accrued expenses | 36,000 | |
Royalty payable | ||
Stock based compensation | 25 | |
Depreciation | ||
Issuance of Capital Stock for services | ||
Due (to) from related party | 8,542 | (11) |
Net cash provided (used) by operating activities | (1,127) | (115,873) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | ||
Cash obtained in connection with reverse acquisition | 22,501 | |
Net cash used by investing activities | 22,501 | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Advances to related party | ||
Loan proceeds | 117,000 | |
Net cash provided by financing activities | 117,000 | |
NET CHANGE IN CASH | 21,374 | 1,127 |
CASH, BEGINNING OF PERIOD | 1,127 | |
CASH, END OF PERIOD | 22,501 | 1,127 |
Non cash investing and financing activities: | ||
Issuance of common stock in connection with reverse acquisition, less cash received | $ 91,169 |
Statement of Changes in Stockho
Statement of Changes in Stockholders' Equity (Deficit) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2016 | $ 89,530 | $ (89,505) | $ 25 | |
Balance, shares at Dec. 31, 2016 | 8,953,008 | |||
Net loss | (205,145) | (205,145) | ||
Balance at Dec. 31, 2017 | $ 89,530 | (89,505) | (205,145) | (205,120) |
Balance, shares at Dec. 31, 2017 | 8,953,008 | |||
Effect of reverse acquisition | $ 68,087 | 45,583 | 113,670 | |
Effect of reverse acquisition, shares | 6,808,657 | |||
Net loss | (46,169) | (46,169) | ||
Balance at Dec. 31, 2018 | $ 157,617 | $ (43,922) | $ (251,314) | $ (137,619) |
Balance, shares at Dec. 31, 2018 | 15,761,665 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS The Company was formed as a Colorado corporation in April 2004. On December 31, 2018 the Company acquired all of the outstanding common stock of Pure Harvest Cannabis Producers, Inc., (“PHCP”) in exchange for 8,953,008 shares of the Company’s common stock. The transaction was accounted for as a reverse acquisition. The accompanying consolidated financial statements are those of PHCP prior to December 31, 2018 and exclude the financial position, results of operations, cash flows and stockholders’ equity of the Pocket Shot Company prior to December 31, 2018. See “Reverse Acquisition” below for additional information. As a result of the acquisition of PHCG, the Company’s new business involves the acquisitions and operations of licensed marijuana cultivation facilities, manufacturing facilities and dispensaries. The Company will continue to collect royalties for licensing the Company’s patent and the trademarks in connection with manufacturing and sale of pouches containing alcohol. The Company’s accounting year end is December 31. Reverse Acquisition On December 31, 2018 the Company (“The Pocket Shot Company”) entered into an agreement (the “Agreement”) with PHCP whereby the Company acquired all of the outstanding common stock of PHCP in exchange for 8,953,008 shares of the Company’s common stock. In addition, the shareholders of PHCP were granted warrants to purchase 8,953,008 shares of the Company’s common stock. The warrants have an exercise price of $8.00 per share and a life of three years. The issuance of the warrants did not have an impact on the financial statements and was reflected similar to the shares issued to PHCP as discussed below. The transaction was accounted for as a reverse acquisition since: (i) the shareholders of PHCP owned the majority of the outstanding common stock of the Company after the share exchange; (ii) a majority of the directors of the Company are also directors of PHCP; and (iii) the old officers of the Company were replaced with officers designated by PHCP. Effective December 31, 2018, the Company’s stockholders’ equity was retroactively recapitalized as that of PHCP, while the stockholders’ equity of the Company was recorded as being acquired in the reverse acquisition. The Company and PHCP remain separate legal entities (with the Company as the parent of PHCP). The accompanying consolidated financial statements are those of PHCP prior to December 31, 2018 and exclude the financial position, results of operations, cash flows and stockholders’ equity of The Pocket Shot Company prior to December 31, 2018. All references to common stock, share and per share amounts have been retroactively restated to reflect as if the transaction had taken place as of the beginning of the earliest period presented. The Company’s assets and liabilities pre- reverse acquisition: The following summarized unaudited consolidated pro forma information shows the results of operations of the Company had the reverse acquisition occurred on January 1, 2017: The summarized consolidated pro forma results are not necessarily indicative of results which would have occurred if the reverse acquisition had been in effect for the periods presented. Further, the summarized unaudited consolidated pro forma results are not intended to be a projection of future results. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These financial statements are presented in United States dollars and have been prepared in accordance with United States generally accepted accounting principles. Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, however, the above conditions raise substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustment to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. Management plans to fund future operations by raising capital and or seeking joint venture opportunities. Principles of Consolidation The Company evaluates the need to consolidate affiliates based on standards set forth in ASC 810 Consolidation (“ASC 810”). The consolidated financial statements include the accounts of the Company and its majority owned subsidiary, PHCP. All significant consolidated transactions and balances have been eliminated in consolidation. The operations of the Company are included in the consolidated financial statement from the date of the Agreement. Use of Estimates In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include estimated useful lives and potential impairment of property and equipment, estimate of fair value of share based payments and derivative instruments and recorded debt discount, valuation of deferred tax assets and valuation of in-kind contribution of services and interest. Cash and Cash Equivalents The Company considers all highly liquid temporary cash investments with an original maturity of six months or less to be cash equivalents. Accounts Receivable We record accounts receivable at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any loss anticipated on the accounts receivable balances and is charged to other income (expense) in the combined statements of operations. We calculate this allowance based on our history of write-offs, the level of past-due accounts based on the contractual terms of the receivables, and our relationships with, and the economic status of, our customers. As of December 31, 2018 and 2017, an allowance for estimated, uncollectible accounts was determined to be unnecessary. Inventory Inventory is reported at the lower of cost or market on the first-in, first-out (FIFO) method. Our inventory is subject to obsolescence. Accordingly, quantities on hand are periodically monitored for items no longer being sold, which are written off. All inventory is stored at the manufacturer and maintained by them. Inventory consists of pouches, display and shipping boxes and no inventory is deemed obsolete. Machinery and Equipment Machinery and equipment is recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated useful lives for significant machinery and equipment categories are as five years. A summary of machinery and equipment as of December 31, 2018 and 2017, is as follows: 2018 2017 Machinery and equipment $ 305,165 $ 0 Less accumulated depreciation (274,615 ) (0 ) $ 30,550 $ 0 Depreciation expense for the year ended December 31, 2018 and the period from Inception to December 31, 2017 was $0 and $0, respectively. Revenue Recognition The Company records revenue under the adoption of ASC 606 by analyzing exchanges with its customers using a five-step analysis such as identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The Company’s policy is to record revenue as earned when a firm commitment, indicating sales quantity and price exists, delivery has taken place and collectability is reasonably assured. The Company records sales of finished products once the customer places the order and the product is shipped. Delivery is considered to have occurred when title and risk of loss have transferred to the customer. Provisions for discounts, returns, allowances, customer rebates and other adjustments are netted with gross sales. The Company accounts for such provisions during the same period in which the related revenues are earned. Provisions for discounts, returns, allowances, customer rebates and other adjustments are minimal and are recorded as a reduction of revenue Cost of Sales The costs associated with our royalty income are packaging, a royalty of $1.20 per case, and repair and maintenance costs of our filling machines. General and Administrative This category includes costs of legal and accounting, telephone, office supplies, product samples, insurance, registration costs, and consulting expenses. Travel and Entertainment This category includes the costs of air travel, hotels, meals and reimbursed automotive expenses. Stock-Based Compensation The Company accounts for share-based payments pursuant to ASC 718, “Stock Compensation” and, accordingly, the Company records compensation expense for share-based awards based upon an assessment of the grant date fair value for stock options and restricted stock awards using the Black-Scholes option pricing model. Share based expense paid through direct stock grants is expensed over the vesting period or upon issuance for awards with no further service requirements. During the year ended December 31, 2018 and the period from Inception to December 31, 2017 the Company recognized stock-based compensation expense of $0 and $25, respectively. Income Taxes The Company is subject to taxation in various jurisdictions and may be subject to examination by various authorities. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company recognizes the amount of taxes payable or refundable for the current year and recognizes deferred tax liabilities and assets for the expected future tax consequences of events and transactions that have been recognized in the Company’s financial statements or tax returns. Fair Value of Financial Instruments The Company applies the accounting guidance under Financial Accounting Standards Board (“FASB”) ASC 820-10, “Fair Value Measurements”, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from m selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The guidance also establishes a fair value hierarchy for measurements of fair value as follows: ● Level 1 - quoted market prices in active markets for identical assets or liabilities. ● Level 2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amount of the Company’s financial instruments approximates their fair value as of December 31, 2018 and 2017, due to the short-term nature of these instruments. Net Loss per Share Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share”. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. As of December 31, 2018 and 2017, dilutive instruments consisted of warrants to purchase shares of the Company’s common stock, the effects of which due to the net loss are anti-dilutive. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 “Revenue from Contracts with Customers” (Topic 606). Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The updated standard will be effective for the Company beginning January 1, 2018. The Company adopted this ASU during the first quarter in 2018. The adoption of this standard did not have an impact on the Company’s financial statements and related disclosures. The Company reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 3 – RELATED PARTY TRANSACTIONS For the year ended December 31, 2018 and the period from Inception to December 31, 2017, amounts paid to the Chief Executive Officer of the Company were $0 and $15,000 for which has been reflected within general and administrative expenses on the accompanying statement of operations. Prior to the reverse acquisition, the Company entered into an agreement with Jarrold R. Bachmann, a former officer and a current shareholder, to pay royalties of $1.20 on a per case basis for sales of the Company’s product The Pocket Shot. Amounts due as of December 31, 2018, amounts due under the agreement were insignificant. |
Royalty Income
Royalty Income | 12 Months Ended |
Dec. 31, 2018 | |
Royalty Income | |
Royalty Income | NOTE 4 – ROYALTY INCOME Under the terms of an existing license agreement, for which was entered into prior to the reverse acquisition, the Company receives royalty income in exchange for the license to manufacture, fill and distribute the Company’s product, a plastic pouch containing. The initial term of the agreement was for five years, expiring in 2010, with automatic renews for succeeding terms of two years each unless either party has given a written notice of its election to terminate the agreement at least one hundred, eighty calendar days prior to the end of any initial or extended term. The Licensee is required to pay the Company a royalty per case as provided in the agreement. All royalties due to the Company accrue upon the sale of the products, regardless of the time of collection by the Licensee. In addition, all of the Company’s revenues, prior to the reverse acquisition, have been historically generated from this contract. The loss of this royalty would have a substantial impact on the Company’s operations. Prior to the reverse acquisition, the Company has operated in a single business segment, licensing its product to customers in the United States. |
Promissory Notes
Promissory Notes | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Promissory Notes | NOTE 5 – PROMISSORY NOTES In 2017, the Company entered into three promissory notes with third parties. Total proceeds received were $117,000 for which were used for operations. The promissory notes are unsecured, payable on demand and do not incur interest. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Deficit | NOTE 6 – STOCKHOLDERS’ DEFICIT On January 31, 2017, the board of directors approved the issuance of 8,953,008 shares of common stock and a warrant to purchase 8,953,008 shares of common stock with an exercise price of $8.00 per share to a person who was then the Company’s sole shareholder in consideration of services rendered. $25 of expense related to this award was recorded in the statement of operations during the period January 24, 2017 (Inception) through December 31, 2017. The warrants were exchanged for warrants received in connection with the reverse acquisition, see Note 1. In November 2018, the Company’s common stock was a forward split on a 1 for 89,530.08 basis. Shares issuable upon the exercise of outstanding warrants were increased by the same ratio of the forward split, provided however that the exercise price of the warrants remained unchanged. See Note 1 for shares issued in connection with the reverse acquisition and Note 8 for changes to the Company’s par value for which has been retroactively reflected. |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax | NOTE 7 - INCOME TAX The Company recorded no income tax provision or benefit for the years ended December 31, 2018 and 2017, because the Company believes it is more likely than not that these will not be utilized in the near future due to net losses. The Company has generated no taxable income. The income tax provision (benefit) differs from the amount computed by applying the U.S. Federal income tax rate of 21% plus applicable state rates to the loss before income taxes due to the unrecognized benefit resulting from the Company’s valuation allowance, as well as due to nondeductible expenses. For income tax reporting purposes, as of December 31, 2018, the Company had estimated $296,432, of net operating loss carry forwards that will expire at various dates beginning in 2037. The Tax Reform Act of 1986 contains provisions that may limit the net operating loss carry forwards and tax credits available to be used in any given year if certain events occur, including significant changes in ownership interests. Realization of net operating loss and tax credit carry forwards is dependent on generating sufficient taxable income prior to their expiration dates. The Company believes they are no longer subject to income tax examinations for years prior to 2014. As of December 31, 2018 and 2017, the Company had approximately $77,072 and $65,068, respectively, of net deferred tax assets, comprised primarily of the potential future tax benefits from net operating loss carry forwards. Based upon the level of historical taxable income and projections for future taxable income over the period in which the deferred tax assets are deductible, management could not conclude that realization of the deferred tax assets as of December 31, 2018 and 2017 was more likely than not, and therefore, the Company has recorded a full valuation allowance to reduce the net deferred tax assets to zero as of December 31, 2018 and 2017. The amount of deferred tax assets considered realizable could be adjusted in the near term if future taxable income is generated. In December 2017, a law commonly known as the Tax Cuts and Jobs Act (“TCJA”) was enacted in the United States. Among other things, the TCJA reduces the U.S. corporate income tax rate to 21 percent and implements a new system of taxation for non-U.S. earnings, including by imposing a one-time tax on the deemed repatriation of undistributed earnings of non-U.S. subsidiaries. The Company is currently evaluating the effects of the TCJA, including the one-time deemed repatriation tax and the remeasurement of our deferred tax assets and liabilities. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 8 – SUBSEQUENT EVENTS The Company changed its name to Pure Harvest Cannabis Group, Inc. in February 2019 In January 2019, the Company authorized the issuance of 140,000 shares of common stock to Integrity Media, Inc. a Nevada Corporation, for public relations and investor relations services. On March 15, 2019, shareholders owning a majority of the Company’s outstanding shares approved the following amendments to the Company’s Articles of Incorporation: The authorized capital stock of the Company will consist of 250,000,000 shares of common stock, $0.01 par value, and 25,000,000 shares of preferred stock, $0.01 par value. The preferred stock may be issued in one or more series as may be determined by the Company’s Board of Directors. The designations, powers, rights, preferences, qualifications, restrictions and limitations of the preferred stock shall be established from time to time by the Company’s Board of Directors; and The outstanding shares of the Company’s common stock be forward split on a two-for-one basis. The name change, trading symbol change and forward stock split will become effective in the public market on a date determined by FINRA and thus haven’t been retroactively reflected within these financial statements. However, the addition of a $0.01 par value has been retroactively reflected for all periods presented. The Company has evaluated subsequent events through the filing date of these financial statements and has disclosed that there are no other events that are material to the financial statements to be disclosed. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These financial statements are presented in United States dollars and have been prepared in accordance with United States generally accepted accounting principles. |
Going Concern | Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, however, the above conditions raise substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustment to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. Management plans to fund future operations by raising capital and or seeking joint venture opportunities. |
Principles of Consolidation | Principles of Consolidation The Company evaluates the need to consolidate affiliates based on standards set forth in ASC 810 Consolidation (“ASC 810”). The consolidated financial statements include the accounts of the Company and its majority owned subsidiary, PHCP. All significant consolidated transactions and balances have been eliminated in consolidation. The operations of the Company are included in the consolidated financial statement from the date of the Agreement. |
Use of Estimates | Use of Estimates In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include estimated useful lives and potential impairment of property and equipment, estimate of fair value of share based payments and derivative instruments and recorded debt discount, valuation of deferred tax assets and valuation of in-kind contribution of services and interest. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid temporary cash investments with an original maturity of six months or less to be cash equivalents. |
Accounts Receivable | Accounts Receivable We record accounts receivable at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any loss anticipated on the accounts receivable balances and is charged to other income (expense) in the combined statements of operations. We calculate this allowance based on our history of write-offs, the level of past-due accounts based on the contractual terms of the receivables, and our relationships with, and the economic status of, our customers. As of December 31, 2018 and 2017, an allowance for estimated, uncollectible accounts was determined to be unnecessary. |
Inventory | Inventory Inventory is reported at the lower of cost or market on the first-in, first-out (FIFO) method. Our inventory is subject to obsolescence. Accordingly, quantities on hand are periodically monitored for items no longer being sold, which are written off. All inventory is stored at the manufacturer and maintained by them. Inventory consists of pouches, display and shipping boxes and no inventory is deemed obsolete. |
Machinery and Equipment | Machinery and Equipment Machinery and equipment is recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated useful lives for significant machinery and equipment categories are as five years. A summary of machinery and equipment as of December 31, 2018 and 2017, is as follows: 2018 2017 Machinery and equipment $ 305,165 $ 0 Less accumulated depreciation (274,615 ) (0 ) $ 30,550 $ 0 Depreciation expense for the year ended December 31, 2018 and the period from Inception to December 31, 2017 was $0 and $0, respectively. |
Revenue Recognition | Revenue Recognition The Company records revenue under the adoption of ASC 606 by analyzing exchanges with its customers using a five-step analysis such as identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The Company’s policy is to record revenue as earned when a firm commitment, indicating sales quantity and price exists, delivery has taken place and collectability is reasonably assured. The Company records sales of finished products once the customer places the order and the product is shipped. Delivery is considered to have occurred when title and risk of loss have transferred to the customer. Provisions for discounts, returns, allowances, customer rebates and other adjustments are netted with gross sales. The Company accounts for such provisions during the same period in which the related revenues are earned. Provisions for discounts, returns, allowances, customer rebates and other adjustments are minimal and are recorded as a reduction of revenue |
Cost of Sales | Cost of Sales The costs associated with our royalty income are packaging, a royalty of $1.20 per case, and repair and maintenance costs of our filling machines. |
General and Administrative | General and Administrative This category includes costs of legal and accounting, telephone, office supplies, product samples, insurance, registration costs, and consulting expenses. |
Travel and Entertainment | Travel and Entertainment This category includes the costs of air travel, hotels, meals and reimbursed automotive expenses. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for share-based payments pursuant to ASC 718, “Stock Compensation” and, accordingly, the Company records compensation expense for share-based awards based upon an assessment of the grant date fair value for stock options and restricted stock awards using the Black-Scholes option pricing model. Share based expense paid through direct stock grants is expensed over the vesting period or upon issuance for awards with no further service requirements. During the year ended December 31, 2018 and the period from Inception to December 31, 2017 the Company recognized stock-based compensation expense of $0 and $25, respectively. |
Income Taxes | Income Taxes The Company is subject to taxation in various jurisdictions and may be subject to examination by various authorities. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company recognizes the amount of taxes payable or refundable for the current year and recognizes deferred tax liabilities and assets for the expected future tax consequences of events and transactions that have been recognized in the Company’s financial statements or tax returns. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company applies the accounting guidance under Financial Accounting Standards Board (“FASB”) ASC 820-10, “Fair Value Measurements”, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from m selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The guidance also establishes a fair value hierarchy for measurements of fair value as follows: ● Level 1 - quoted market prices in active markets for identical assets or liabilities. ● Level 2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amount of the Company’s financial instruments approximates their fair value as of December 31, 2018 and 2017, due to the short-term nature of these instruments. |
Net Loss Per Share | Net Loss per Share Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share”. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. As of December 31, 2018 and 2017, dilutive instruments consisted of warrants to purchase shares of the Company’s common stock, the effects of which due to the net loss are anti-dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 “Revenue from Contracts with Customers” (Topic 606). Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The updated standard will be effective for the Company beginning January 1, 2018. The Company adopted this ASU during the first quarter in 2018. The adoption of this standard did not have an impact on the Company’s financial statements and related disclosures. The Company reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations. |
Organization and Description _2
Organization and Description of Business (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Financial Statements Pre-reverse Acquisition Assets and Liabilities | The Company’s assets and liabilities pre- reverse acquisition: |
Schedule of Pro forma Information of Reverse Acquisition | The following summarized unaudited consolidated pro forma information shows the results of operations of the Company had the reverse acquisition occurred on January 1, 2017: |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives for Machinery and Equipment | A summary of machinery and equipment as of December 31, 2018 and 2017, is as follows: 2018 2017 Machinery and equipment $ 305,165 $ 0 Less accumulated depreciation (274,615 ) (0 ) $ 30,550 $ 0 |
Organization and Description _3
Organization and Description of Business (Details Narrative) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Common stock share outstanding acquired | 15,761,665 | 8,953,008 |
Pure Harvest Cannabis Producers, Inc [Member] | ||
Common stock share outstanding acquired | 8,953,008 | |
Pure Harvest Cannabis Producers, Inc [Member] | The Agreement [Member] | ||
Business reverse acquisition descriptions | The transaction was accounted for as a reverse acquisition since: (i) the shareholders of PHCP owned the majority of the outstanding common stock of the Company after the share exchange; (ii) a majority of the directors of the Company are also directors of PHCP; and (iii) the old officers of the Company were replaced with officers designated by PHCP. Effective December 31, 2018, the Company's stockholders' equity was retroactively recapitalized as that of PHCP, while the stockholders' equity of the Company was recorded as being acquired in the reverse acquisition. The Company and PHCP remain separate legal entities (with the Company as the parent of PHCP). The accompanying consolidated financial statements are those of PHCP prior to December 31, 2018 and exclude the financial position, results of operations, cash flows and stockholders' equity of The Pocket Shot Company prior to December 31, 2018. | |
Pure Harvest Cannabis Producers, Inc [Member] | The Agreement [Member] | Warrant [Member] | ||
Number of warrants issued to purchase common stock | 8,953,008 | |
Warrant exercise price | $ 8 | |
Warrant term | 3 years |
Organization and Description _4
Organization and Description of Business - Schedule of Financial Statements Pre-reverse Acquisition Assets and Liabilities (Details) | Dec. 31, 2018USD ($) |
Accounting Policies [Abstract] | |
Cash | $ 22,501 |
Accounts receivable | 22,802 |
Inventory | 63,940 |
Machinery & equipment | 30,550 |
Total Assets | 139,793 |
Accounts payable and other current liabilities | 14,765 |
Due to related parties | 11,358 |
Total Liabilities | 26,123 |
Net assets acquired | $ 113,670 |
Organization and Description _5
Organization and Description of Business - Schedule of Pro forma Information of Reverse Acquisition (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Revenues | $ 105,869 | $ 87,663 |
Net loss | $ (103,460) | $ (284,532) |
Net loss per common shares basic and diluted | $ (0.01) | $ (1.81) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Property, plant and equipment, depreciation methods | straight-line method | ||
Estimated useful lives for machinery and equipment | 5 Years | ||
Machinery and equipment, depreciation expense | $ 0 | ||
Cost of royalty income packing, per case | $ 1.20 | ||
Stock based compensation expenses | $ 25 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives for Machinery and Equipment (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Machinery and equipment | $ 305,165 | $ 0 |
Less accumulated depreciation | (274,615) | |
Machinery and equipment, Net | $ 30,550 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Amount paid reflected in general and administrative expenses | $ 46,169 | $ 205,145 | |
Chief Executive Officer [Member] | |||
Amount paid reflected in general and administrative expenses | $ 15,000 | $ 0 | |
Jarrold R. Bachmann [Member] | The Agreement [Member] | |||
Royalty per case | $ 1.20 |
Royalty Income (Details Narrati
Royalty Income (Details Narrative) - Royalty Agreement Terms [Member] | 12 Months Ended |
Dec. 31, 2018 | |
Royalty agreement term | 5 years |
Royalty expiring date | 2010 |
Renewal term | 2 years |
Promissory Notes (Details Narra
Promissory Notes (Details Narrative) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Promissory Notes [Member] | |
Proceeds from issuance of notes payable | $ 117,000 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - Board of Directors [Member] - USD ($) | 1 Months Ended | 11 Months Ended | |
Nov. 30, 2018 | Dec. 31, 2017 | Jan. 31, 2017 | |
Common stock, shares issued | 8,953,008 | ||
Share based compensation expense cost | $ 25 | ||
Stockholders equity forward split description | In November 2018, the Company's common stock was a forward split on a 1 for 89,530.08 basis. Shares issuable upon the exercise of outstanding warrants were increased by the same ratio of the forward split, provided however that the exercise price of the warrants remained unchanged. | ||
Warrant [Member] | |||
Number of warrants issued to purchase common stock | 8,953,008 | ||
Warrant exercise price | $ 8 |
Income Tax (Details Narrative)
Income Tax (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision (benefit) | ||
U.S Federal income tax rate | 21.00% | |
Net operating loss carry forwards | $ 296,432 | |
Operating loss carry forwards, expiration year | 2037 | |
Net deferred tax assets | $ 77,072 | 65,068 |
Net deferred tax assets, valuation allowance | $ 0 | $ 0 |
Income tax description | In December 2017, a law commonly known as the Tax Cuts and Jobs Act ("TCJA") was enacted in the United States. Among other things, the TCJA reduces the U.S. corporate income tax rate to 21 percent and implements a new system of taxation for non-U.S. earnings, including by imposing a one-time tax on the deemed repatriation of undistributed earnings of non-U.S. subsidiaries. |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Mar. 15, 2019$ / sharesshares | Jan. 01, 2019shares | Dec. 31, 2018shares | Dec. 31, 2017shares |
Common stock, shares authorized | 100,000,000 | 100,000,000 | ||
Subsequent Event [Member] | ||||
Common stock, shares authorized | 250,000,000 | |||
Common stock, par value | $ / shares | $ 0.01 | |||
Preferred stock, shares authorized | 25,000,000 | |||
Preferred stock, par value | $ / shares | $ 0.01 | |||
Forward stock split, description | common stock be forward split on a two-for-one basis | |||
Forward stock split, conversion ratio | 2 | |||
Forward stock split, additional par value | $ / shares | $ 0.01 | |||
Integrity Media, Inc. [Member] | Subsequent Event [Member] | ||||
Common stock, shares authorized | 140,000 |