Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 26, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Pure Harvest Cannabis Group, Inc. | |
Entity Central Index Key | 0001351573 | |
Document Type | 10-Q/A | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | true | |
Amendment Description | This Amendment No. 1 to Form 10-Q ("Amendment") amends the Quarterly Report for the three and nine months ended September 30, 2019 originally filed on August 23, 2019. On April 8, 2020, management of Pure Harvest Cannabis Group, Inc. (the "Company") that previously filed consolidated financial statements as of September 30, 2019 and for the three and nine months ended September 30, 2019 required restatement. In May 2019, the Company leased a property which the Company intends to use as a marijuana retail dispensary. The initial term of the lease is for a period of three years. The Company has an option to purchase the property at prices ranging between $1,400,000 and $1,600,000 at various dates prior to May 1, 2022. The Company issued the landlord 400,000 shares of its post-split common stock in consideration for the option to purchase the property. At inception of the lease on May 1, 2019, the Company should have recorded a "right of use" asset and liability due to the Company adopting Accounting Standards Codification 842- Leases on January 1, 2019. In addition, the 400,000 shares issued for the option to purchase the property should have been recorded as deferred rent and amortized to rent expense using the straight-line method over the term of the lease. | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 32,203,330 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash | $ 61,538 | $ 22,501 |
Accounts receivable | 4,382 | 22,802 |
Less: allowance for doubtful accounts | (3,711) | |
Inventory | 89,150 | 63,940 |
Deferred rent | 93,333 | |
Total current assets | 244,691 | 109,243 |
Fixed assets | ||
Machinery & equipment | 305,165 | 305,165 |
Accumulated depreciation | (284,090) | (274,615) |
Total fixed assets | 21,075 | 30,550 |
Other Assets | ||
Deferred rent, net of current portion | 147,778 | |
Right of use asset | 200,207 | |
Notes receivable | 33,000 | |
Goodwill | 263,450 | |
Total Other assets | 644,435 | |
Total assets | 910,201 | 139,793 |
Current liabilities | ||
Accounts payable | 232,251 | 104,329 |
Payable on acquisition | 50,000 | |
Accrued expense | 75,131 | 36,000 |
Royalty payable | 706 | 194 |
Due to related parties | 196,918 | 19,889 |
Loans | 117,000 | 117,000 |
Common stock to be issued | 482,500 | |
Total current liabilities | 1,154,506 | 277,412 |
Long-term liability | ||
Right of use liability | 140,076 | |
Total liabilities | 1,294,582 | 277,412 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock, $0.01 par value; 25,000,000 shares authorized; no shares issued and outstanding at September 30, 2019 and December 31, 2018 | ||
Common Stock, $.01 Par Value; 100,000,000 shares authorized; 32,603,330 and 31,523,330 shares issued and outstanding at September 30, 2019 and December 31, 2018 respectively | 326,034 | 315,234 |
Additional paid-in capital | 589,861 | (201,539) |
Retained deficit | (1,300,276) | (251,314) |
Total Stockholders' deficit | (384,381) | (137,619) |
Total liabilities and stockholder's deficit | $ 910,201 | $ 139,793 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.01 | $ .01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares, issued | 32,603,330 | 31,523,330 |
Common stock, shares outstanding | 32,603,330 | 31,523,330 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Royalty income | $ 14,297 | $ 33,723 | ||
Costs of sales | 4,781 | 13,681 | ||
Gross margin | 9,515 | 20,041 | ||
Operating expenses | ||||
Advertising and promotion | 5,325 | 28,700 | ||
General and administrative expenses (including stock-based compensation of $323,000 and $0, respectively) | 246,251 | 46,169 | 992,666 | 46,169 |
Travel and entertainment | 38,163 | |||
Depreciation expense | 3,158 | 9,475 | ||
Total costs and expenses | 254,734 | 46,169 | 1,069,003 | 46,169 |
Net income (loss) | $ (245,219) | $ (46,169) | $ (1,048,962) | $ (46,169) |
Basic and diluted net loss per common share | $ (0.01) | $ 0 | $ (0.03) | $ 0 |
Basic and diluted weighted average number of common shares outstanding | 32,308,381 | 17,906,016 | 32,308,381 | 17,906,016 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Stock-based compensation | $ 323,000 | $ 0 | $ 323,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows provided by operating activities: | ||
Net loss | $ (1,048,962) | $ (46,169) |
Adjustment to reconcile net loss from operations: | ||
Depreciation | 9,475 | |
Stock-based compensation | 323,000 | |
Acquisition of assets for stock | 199,200 | |
Changes in Operating Assets and Liabilities | ||
Accounts Receivable | 18,420 | |
Allowance for doubtfull accounts | 3,711 | |
Inventory | (25,210) | |
Deferred rent | 38,889 | |
Goodwill | (263,450) | |
Accounts payable | 127,922 | 500 |
Payable on acquisition | 50,000 | |
Accrued expenses | (36,000) | 36,000 |
Royalty payable | 512 | |
Due to related parties | 188,388 | 8,542 |
Right of use asset and liability | 15,000 | |
Net cash provided (used) by operating activities | (399,105) | (1,127) |
Cash flows from investing activities: | ||
Earnest money deposit on lease | ||
Notes receivable | (33,000) | |
Net cash used by investing activities | (33,000) | |
Cash flows from financing activities | ||
Advances from related parties | (11,358) | |
Proceeds from issuance of common stock to be issued | 482,500 | |
Net cash provided by financing activities | 471,142 | |
Net increase (decrease) in cash | 39,037 | (1,127) |
Cash, beginning of period | 22,501 | |
Cash end of period | 61,538 | (1,127) |
Non-cash investing and financing activities | ||
Common stock issued for option to purchase property | $ 280,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit (Unadited) - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 179,060 | $ (179,035) | $ (205,145) | $ (205,120) |
Balance, shares at Dec. 31, 2017 | 17,906,016 | |||
Net loss | (46,169) | |||
Balance at Sep. 30, 2018 | $ 179,060 | (179,035) | (205,145) | (205,120) |
Balance, shares at Sep. 30, 2018 | 17,906,016 | |||
Balance at Dec. 31, 2017 | $ 179,060 | (179,035) | (205,145) | (205,120) |
Balance, shares at Dec. 31, 2017 | 17,906,016 | |||
Balance at Dec. 31, 2018 | $ 315,234 | (201,539) | (251,314) | (137,619) |
Balance, shares at Dec. 31, 2018 | 31,523,330 | |||
Stock-based compensation | $ 2,800 | 320,200 | 323,000 | |
Stock-based compensation, shares | 280,000 | |||
Stock issued for option to purchase property | $ 4,000 | 276,000 | $ 280,000 | |
Stock issued for option to purchase property, shares | 400,000 | 400,000 | ||
Issuance of stock for acquisition | $ 4,000 | 195,200 | $ 199,200 | |
Issuance of stock for acquisition, shares | 400,000 | |||
Net loss | (1,048,962) | (1,048,962) | ||
Balance at Sep. 30, 2019 | $ 326,034 | $ 589,861 | $ (1,300,276) | $ (384,381) |
Balance, shares at Sep. 30, 2019 | 32,603,330 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2019 | |
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 17,906,016 (post-split) 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 PHCP, 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 Pocket Shot branded specialty alcohol beverage pouches. The Company changed its name to Pure Harvest Cannabis Group, Inc. in February 2019. 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: Increasing the authorized capital stock of the Company to 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 Forward splitting the outstanding shares of the Company’s common stock on a two-for-one basis. The Company’s accounting year end is December 31. Reverse Acquisition On December 31, 2018 the Company (“The Pocket Shot Company”) acquired all of the outstanding common stock of PHCP in exchange for 17,906,016 (post-split) shares of the Company’s common stock. In addition, the shareholders of PHCP were issued warrants to purchase 17,906,016 (post-split) shares of the Company’s common stock. The warrants have an exercise price of $4.00 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: Net Assets Acquired: 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 $ 116,670 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: Pro-forma: 2018 2017 Revenues $ 105,869 $ 87,663 Net Loss $ (103,460 ) $ (284,532 ) Net loss per common share – basic and diluted $ (0.01 ) $ (1.81 ) 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. Restatement On April __, 2020, management of Pure Harvest Cannabis Group, Inc. (the “Company”) that previously filed consolidated financial statements as of September 30, 2019 and for the three and nine months ended September 30, 2019 required restatement. In May 2019, the Company leased a property which the Company intends to use as a marijuana retail dispensary. The initial term of the lease is for a period of three years. The Company has an option to purchase the property at prices ranging between $1,400,000 and $1,600,000 at various dates prior to May 1, 2022. The Company issued the landlord 400,000 shares of its post-split common stock in consideration for the option to purchase the property. At inception of the lease on May 1, 2019, the Company should have recorded a “right of use” asset and liability due to the Company adopting Accounting Standards Codification 842- Leases on January 1, 2019. In addition, the 400,000 shares issued for the option to purchase the property should have been recorded as deferred rent and amortized to rent expense using the straight-line method over the term of the lease. The following is the impact of the restatement on the consolidated balance sheet as of September 30, 2019: September 30, 2019 September 30, 2019 Change (as reported) (as restated) Deferred rent $ - $ 93,333 $ 93,333 Total Current Assets - 244,691 93,333 Deferred rent, net of current portion - 147,778 147,778 Right of use asset - 200,207 200,207 Total Assets $ 468,882 $ 910,201 $ 441,318 Accrued Liabilities $ - $ 75,131 $ 75,131 Total Current Liabilities - 1,154,506 1,154,506 Right of Use Liabilities, net of Current Portion - 140,076 140,076 Total Liabilities 1,079,375 1,294,582 215,207 Common Stock 322,034 326,034 4,000 Additional Paid-in Capital 313,861 589,861 276,000 Accumulated Deficit (1,246,387 ) (1,300,276 ) (53,889 ) Total Stockholders’ Deficit (610,492 ) (384,381 ) 226,111 Total Liabilites and Stockholders’ Deficit $ 468,882 $ 910,201 $ 441,318 The following is the impact of the restatement on the consolidated statements of operations for the three and nine months ended September 30, 2019: Three Months Ended September 30, 2019 Change (as reported) (as restated) General and Administrative Expenses $ 213,917 $ 246,251 $ 32,333 Total Costs and Expenses 222,401 254,734 32,333 Net Loss $ (212,885 ) $ (245,219 ) $ (32,333 ) Basic and Diluted Net Loss per Common Share $ (0.01 ) $ (0.01 ) $ (0.00 ) Nine Months Ended September 30, 2019 Change (as reported) (as restated) General and Administrative Expenses $ 938,777 $ 992,666 $ 53,889 Total Costs and Expenses 1,015,115 1,069,003 53,889 Net Loss $ (995,073 ) $ (1,048,962 ) $ (53,889 ) Basic and Diluted Net Loss per Common Share $ (0.03 ) $ (0.03 ) $ (0.00 ) The following is the impact of the restatement on the consolidated statement of cash flows for the nine months ended September 30, 2019: Nine Months Ended September 30, 2019 Change (as reported) (as restated) Net Loss $ (995,073 ) $ (1,048,962 ) $ (53,889 ) Deferred Rent - 38,889 38,889 Right of Use Asset and Liability - 15,000 15,000 Net Cash Used in Operating Activities $ (399,105 ) $ (399,105 ) $ (0 ) Non-Cash Investing and Financing Actity Common Stock Issued in Connection with Operating Lease $ - $ 280,000 $ 280,000 See Note 5 for additional information. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
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. In the opinion of management, the accompanying unaudited condensed financial statements contain all accruals and adjustments (each of which is of a normal recurring nature) necessary for a fair presentation of the Company’s financial position as of September 30, 2019 and the results of its operations for the nine months then ended. The condensed balance sheet as of December 31, 2018 is derived from the December 31, 2018 audited financial statements. Significant accounting policies have been consistently applied in the interim financial statements. The results of operations for the nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the entire year. 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 valuation of deferred tax assets. 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 September 30, 2019 and December 31, 2018, 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. 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 nine months ended September 30, 2019 and 2018 the Company recognized stock-based compensation expense of $323,000 and $0, respectively. 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 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 September 30, 2019 and December 31, 2018, 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 September 30, 2019 and 2018, 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 February 2016, the FASB issued ASU, Leases, which requires lessees to recognize most leases on their balance sheets as a right-of-use asset with a corresponding lease liability. Lessor accounting under the standard is substantially unchanged. Additional qualitative and quantitative disclosures are also required. The Company adopted the standard effective January 1, 2019 using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company adopted the following practical expedients and elected the following accounting policies related to this standard update: ● The option to not reassess prior conclusions related to the identification, classification and accounting for initial direct costs for leases that commenced prior to January 1, 2019. ● Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less; and ● The option to not separate lease and non-lease components for certain equipment lease asset categories such as freight car, vehicles and work equipment. ● The package of practical expedients applied to all of its leases, including (i) not reassessing whether any expired or existing contracts are or contain leases, (ii) not reassessing the lease classification for any expired or existing leases, and (iii) not reassessing initial direct costs for any existing leases. The Company has inventoried all leases where the Company is a lessee as of the initial date of application and has examined other contracts with suppliers, vendors, customers and other outside parties to identify whether such contracts contain an embedded lease as defined under the new guidance. The adoption of ASC 842 had a material effect on the consolidated financial statements, see Note 5 for additional information. In June 2018, the FASB issued ASU No. 2018-07, “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. This standard is effective for public companies for annual periods beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted as long as ASU 2014-09 has been adopted. The Company adopted the guidance on January 1, 2019. The adoption did not have a material impact on our consolidated financial statements. 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 | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 3 – RELATED PARTY TRANSACTIONS Effective January 1, 2019, the Company entered into employment agreements with its two officers. Under the terms of the agreement the combined minimum annual compensation is $350,000. During the nine months ended September 30, 2019, the Company accrued $188,388 in connection with these agreements and $24,715 for expenses, both of which are included in due to related parties on the accompanying consolidated balance sheet and within general and administrative expenses on the accompanying statement of operations. See Note 6 for discussion regarding common stock issued in connection with the employment agreements. On July 30, 2019 David Lamadrid and Sterling Scott resigned as officers and directors of the Company. In connection with their resignations Mr. Lamadrid agreed to return to the Company 1,750,000 shares, and Mr. Scott agreed to return to the Company 1,200,000 shares of the Company’s common stock. These shares, upon their return to the Company, will be cancelled and will represent authorized but unissued shares. 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 September 30, 2019 and 2018 under the agreement were insignificant. |
Royalty Income
Royalty Income | 9 Months Ended |
Sep. 30, 2019 | |
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 specialty alcohol beverages. 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. |
Earnest Money Deposit
Earnest Money Deposit | 9 Months Ended |
Sep. 30, 2019 | |
Earnest Money Deposit | |
Earnest Money Deposit | NOTE 5 - EARNEST MONEY DEPOSIT In February 2019 the Company entered into an agreement to buy property located approximately 35 miles west of Denver, Colorado. As required by the agreement, the Company placed an earnest money deposit of $20,000 with an escrow agent. The deposit of $20,000 was to be applied to the purchase price at closing. The Company subsequently assigned its rights to purchase the property to an unrelated third party and then leased the property from the unrelated third party. The Company has determined it will not receive any credit for the deposit and has charged the amount to general and administrative expense. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 6 –NOTES PAYABLE 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. |
Notes Receivable
Notes Receivable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes Receivable | NOTE 7 – NOTES RECEIVABLE In May and June 2019, the Company advanced $28,593 to two unrelated individuals in connection with potential acquisitions for the Company. The amounts are to be repaid, without interest, in October 2019. |
Stockholders' Deficit
Stockholders' Deficit | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Deficit | NOTE 8 – STOCKHOLDERS’ DEFICIT Change in Articles of Incorporation 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: Increasing the authorized capital stock of the Company to 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 Forward splitting the outstanding shares of the Company’s common stock on a two-for-one basis. The name change, trading symbol change (PCKK to PHCG) and forward stock split became effective in the public market on May 2, 2019 and have been retroactively reflected for all periods presented. Stock-Based Compensation In connection with the employment agreements discussed in Note 3, the Company entered into an agreement to issue a total of 1,600,000 shares of common stock to two officers. The shares vest over a one year period commencing on January 1, 2019. The Company valued the common stock at $760,000, using the closing market price of the Company’s common stock on the date of the agreement. The Company is expensing the value of off the common stock over the vesting period which mirrors the service period. During the nine months ended September 30, 2019, the Company recognized $760,000 of stock-based compensation since all shares were vested as part of the agreement referenced in Footnote 3. In January 2019, the Company authorized the issuance of 140,000 shares of common stock to a consultant for services rendered. The Company valued the common stock at $133,000, using the closing market price of the Company’s common stock on the date of the agreement. The Company expensed the value of the common stock upon issuance as there were no additional performance criteria. Offering of Common Stock and Warrants In February 2019, the Company commenced a private offering of its common stock for up to $10 million in proceeds. The Company is offering up to 20 million shares of common stock at a purchase price of $0.50 per share. In addition, for each share purchased the investor will receive a warrant to purchase one additional share of common stock at a price of $2.00 per share. The warrants expire on December 31, 2021 or sooner at the Company’s option, if the Company’s stock trades for a price of $3.00 per share for 10 days with an average volume of 100,000 shares per day. During the nine months ended September 30, 2019, the Company received deposits of $442,500 related to the sale of 885,000 shares of common stock and warrants. The Company has reflected the deposits as a current liability as the related common stock and warrants have yet to be issued and the offering is still open. Reverse Acquisition See Note 1 for shares issued in connection with the reverse acquisition. |
Lease Agreement (As Restated)
Lease Agreement (As Restated) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Lease Agreement (As Restated) | NOTE 9 – LEASE AGREEMENT (AS RESTATED) In May 2019, the Company entered into a lease agreement for the property referred to above. The Company intends to use this property for a marijuana retail store. The initial term of the lease is for a period of three years. The Company has an option to purchase the property at prices ranging between $1,400,000 and $1,600,000 at various dates prior to May 1, 2022. The Company issued the landlord 400,000 shares of its post-split common stock in consideration for the option to purchase the property for which was recorded as deferred rent and is being amortized to rent expense using the straight line method over the term of the lease. At inception of the lease, the Company recorded a right of use asset and liability. The Company used an effective borrowing rate of 10 percent within the calculation. See Note 1 for additional information. |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisition | NOTE 10 – ACQUISITION On September 6, 2019 the Company acquired all of the outstanding membership interests in Prolific Nutrition, LLC and Gratus Living, LLC (collectively “Prolific Nutrition”) for 400,000 shares of the Company’s restricted common stock. Prolific Nutrition and Gratus Living are Colorado-based hemp/CBD companies that have developed and now market a line of CBD products direct to consumers. Prolific Nutrition and Gratus Living currently offer CBD oil tincture, CBD oil gummies, CBD oil capsules, CBD oil lotion, hemp oil and lip balm. Prolific Nutrition and Gratus Living have also developed and now market hemp extract dietary supplements, hemp extract capsules for pain and hemp extract pet treats for dogs and cats. We accounted for the transaction as follows: Cash $ (15,000 ) Payable on Acquisition (50,000 ) Common Stock (4,000 ) APIC (195,200 ) Cash (Acquired) 750 AR 3,711 AR Allowance (3,711 ) Goodwill 263,450 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 11 – SUBSEQUENT EVENTS The Company has evaluated subsequent events through the filing date of these consolidated 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) | 9 Months Ended |
Sep. 30, 2019 | |
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. In the opinion of management, the accompanying unaudited condensed financial statements contain all accruals and adjustments (each of which is of a normal recurring nature) necessary for a fair presentation of the Company’s financial position as of September 30, 2019 and the results of its operations for the nine months then ended. The condensed balance sheet as of December 31, 2018 is derived from the December 31, 2018 audited financial statements. Significant accounting policies have been consistently applied in the interim financial statements. The results of operations for the nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the entire year. |
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 valuation of deferred tax assets. |
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 September 30, 2019 and December 31, 2018, 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. |
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 nine months ended September 30, 2019 and 2018 the Company recognized stock-based compensation expense of $323,000 and $0, respectively. |
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 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 September 30, 2019 and December 31, 2018, 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 September 30, 2019 and 2018, 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 February 2016, the FASB issued ASU, Leases, which requires lessees to recognize most leases on their balance sheets as a right-of-use asset with a corresponding lease liability. Lessor accounting under the standard is substantially unchanged. Additional qualitative and quantitative disclosures are also required. The Company adopted the standard effective January 1, 2019 using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company adopted the following practical expedients and elected the following accounting policies related to this standard update: ● The option to not reassess prior conclusions related to the identification, classification and accounting for initial direct costs for leases that commenced prior to January 1, 2019. ● Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less; and ● The option to not separate lease and non-lease components for certain equipment lease asset categories such as freight car, vehicles and work equipment. ● The package of practical expedients applied to all of its leases, including (i) not reassessing whether any expired or existing contracts are or contain leases, (ii) not reassessing the lease classification for any expired or existing leases, and (iii) not reassessing initial direct costs for any existing leases. The Company has inventoried all leases where the Company is a lessee as of the initial date of application and has examined other contracts with suppliers, vendors, customers and other outside parties to identify whether such contracts contain an embedded lease as defined under the new guidance. The adoption of ASC 842 had a material effect on the consolidated financial statements, see Note 5 for additional information. In June 2018, the FASB issued ASU No. 2018-07, “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. This standard is effective for public companies for annual periods beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted as long as ASU 2014-09 has been adopted. The Company adopted the guidance on January 1, 2019. The adoption did not have a material impact on our consolidated financial statements. 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) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Financial Statements Pre-reverse Acquisition Assets and Liabilities | The Company’s assets and liabilities pre- reverse acquisition: Net Assets Acquired: 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 $ 116,670 |
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: Pro-forma: 2018 2017 Revenues $ 105,869 $ 87,663 Net Loss $ (103,460 ) $ (284,532 ) Net loss per common share – basic and diluted $ (0.01 ) $ (1.81 ) |
Schedule of Restatement of Financial Statements | The following is the impact of the restatement on the consolidated balance sheet as of September 30, 2019: September 30, 2019 September 30, 2019 Change (as reported) (as restated) Deferred rent $ - $ 93,333 $ 93,333 Total Current Assets - 244,691 93,333 Deferred rent, net of current portion - 147,778 147,778 Right of use asset - 200,207 200,207 Total Assets $ 468,882 $ 910,201 $ 441,318 Accrued Liabilities $ - $ 75,131 $ 75,131 Total Current Liabilities - 1,154,506 1,154,506 Right of Use Liabilities, net of Current Portion - 140,076 140,076 Total Liabilities 1,079,375 1,294,582 215,207 Common Stock 322,034 326,034 4,000 Additional Paid-in Capital 313,861 589,861 276,000 Accumulated Deficit (1,246,387 ) (1,300,276 ) (53,889 ) Total Stockholders’ Deficit (610,492 ) (384,381 ) 226,111 Total Liabilites and Stockholders’ Deficit $ 468,882 $ 910,201 $ 441,318 The following is the impact of the restatement on the consolidated statements of operations for the three and nine months ended September 30, 2019: Three Months Ended September 30, 2019 Change (as reported) (as restated) General and Administrative Expenses $ 213,917 $ 246,251 $ 32,333 Total Costs and Expenses 222,401 254,734 32,333 Net Loss $ (212,885 ) $ (245,219 ) $ (32,333 ) Basic and Diluted Net Loss per Common Share $ (0.01 ) $ (0.01 ) $ (0.00 ) Nine Months Ended September 30, 2019 Change (as reported) (as restated) General and Administrative Expenses $ 938,777 $ 992,666 $ 53,889 Total Costs and Expenses 1,015,115 1,069,003 53,889 Net Loss $ (995,073 ) $ (1,048,962 ) $ (53,889 ) Basic and Diluted Net Loss per Common Share $ (0.03 ) $ (0.03 ) $ (0.00 ) The following is the impact of the restatement on the consolidated statement of cash flows for the nine months ended September 30, 2019: Nine Months Ended September 30, 2019 Change (as reported) (as restated) Net Loss $ (995,073 ) $ (1,048,962 ) $ (53,889 ) Deferred Rent - 38,889 38,889 Right of Use Asset and Liability - 15,000 15,000 Net Cash Used in Operating Activities $ (399,105 ) $ (399,105 ) $ (0 ) Non-Cash Investing and Financing Actity Common Stock Issued in Connection with Operating Lease $ - $ 280,000 $ 280,000 |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Acquisition | We accounted for the transaction as follows: Cash $ (15,000 ) Payable on Acquisition (50,000 ) Common Stock (4,000 ) APIC (195,200 ) Cash (Acquired) 750 AR 3,711 AR Allowance (3,711 ) Goodwill 263,450 |
Organization and Description _3
Organization and Description of Business (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
May 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | Mar. 15, 2019 | |
Increased authorized capital stock | 250,000,000 | |||
Common stock, par value | $ 0.01 | $ .01 | $ 0.01 | |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | 25,000,000 | |
Preferred stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | |
Lease term | 3 years | |||
Stock issued for option to purchase property | $ 280,000 | |||
Stock issued for option to purchase property, shares | 400,000 | |||
Various Dates Prior to May 1, 2022 [Member] | Minimum [Member] | ||||
Stock issued for option to purchase property | $ 1,400,000 | |||
Various Dates Prior to May 1, 2022 [Member] | Maximum [Member] | ||||
Stock issued for option to purchase property | $ 1,600,000 | |||
Post-split Common Stock [Member] | Landlord [Member] | ||||
Stock issued for option to purchase property, shares | 400,000 | |||
Pure Harvest Cannabis Producers, Inc [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] | Warrant [Member] | ||||
Number of warrants issued to purchase common stock | 17,906,016 | |||
Warrant exercise price | $ 4 | |||
Warrant term | 3 years | |||
Pure Harvest Cannabis Producers, Inc [Member] | Post-split [Member] | ||||
Number of common stock shares acquired | 17,906,016 |
Organization and Description _4
Organization and Description of Business - Schedule of Financial Statements Pre-reverse Acquisition Assets and Liabilities (Details) - USD ($) | Sep. 06, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Cash | $ 15,000 | $ 22,501 |
Accounts receivable | 3,711 | 22,802 |
Inventory | 63,940 | |
Machinery & equipment | 30,550 | |
Total Assets | 139,793 | |
Account payable and other current liabilities | $ 50,000 | 14,765 |
Due to related parties | 11,358 | |
Total Liabilities | 26,123 | |
Net Assets Acquired | $ 116,670 |
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 share - basic and diluted | $ (0.01) | $ (1.81) |
Organization and Description _6
Organization and Description of Business - Schedule of Restatement of Financial Statements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred rent | $ 93,333 | $ 93,333 | ||||
Total Current Assets | 244,691 | 244,691 | 109,243 | |||
Deferred rent, net of current portion | 147,778 | 147,778 | ||||
Right of use asset | 200,207 | 200,207 | ||||
Total Assets | 910,201 | 910,201 | 139,793 | |||
Accrued Liabilities | 75,131 | 75,131 | 36,000 | |||
Total Current Liabilities | 1,154,506 | 1,154,506 | 277,412 | |||
Right of Use Liabilities, net of Current Portion | 140,076 | 140,076 | ||||
Total Liabilities | 1,294,582 | 1,294,582 | 277,412 | |||
Common Stock | 326,034 | 326,034 | 315,234 | |||
Additional Paid-in Capital | 589,861 | 589,861 | (201,539) | |||
Accumulated Deficit | (1,300,276) | (1,300,276) | (251,314) | |||
Total Stockholders' Deficit | (384,381) | $ (205,120) | (384,381) | $ (205,120) | (137,619) | $ (205,120) |
Total Liabilities and Stockholders' Deficit | 910,201 | 910,201 | $ 139,793 | |||
General and Administrative Expenses | 246,251 | 46,169 | 992,666 | 46,169 | ||
Total Costs and Expenses | 254,734 | 46,169 | 1,069,003 | 46,169 | ||
Net Loss | $ (245,219) | $ (46,169) | $ (1,048,962) | $ (46,169) | ||
Basic and Diluted Net Loss per Common Share | $ (0.01) | $ 0 | $ (0.03) | $ 0 | ||
Deferred Rent | $ 38,889 | |||||
Right of Use Asset and Liability | 15,000 | |||||
Net Cash Used in Operating Activity | (399,105) | $ (1,127) | ||||
Common Stock Issued in Connection with Operating Lease | 280,000 | |||||
As Reported [Member] | ||||||
Deferred rent | ||||||
Total Current Assets | ||||||
Deferred rent, net of current portion | ||||||
Right of use asset | ||||||
Total Assets | 468,882 | 468,882 | ||||
Accrued Liabilities | ||||||
Total Current Liabilities | ||||||
Right of Use Liabilities, net of Current Portion | ||||||
Total Liabilities | 1,079,375 | 1,079,375 | ||||
Common Stock | 322,034 | 322,034 | ||||
Additional Paid-in Capital | 313,861 | 313,861 | ||||
Accumulated Deficit | (1,246,387) | (1,246,387) | ||||
Total Stockholders' Deficit | (610,492) | (610,492) | ||||
Total Liabilities and Stockholders' Deficit | 468,882 | 468,882 | ||||
General and Administrative Expenses | 213,917 | 938,777 | ||||
Total Costs and Expenses | 222,401 | 1,015,115 | ||||
Net Loss | $ (212,885) | $ (995,073) | ||||
Basic and Diluted Net Loss per Common Share | $ (0.01) | $ (0.03) | ||||
Deferred Rent | ||||||
Right of Use Asset and Liability | ||||||
Net Cash Used in Operating Activity | (399,105) | |||||
Common Stock Issued in Connection with Operating Lease | ||||||
Change [Member] | ||||||
Deferred rent | $ 93,333 | 93,333 | ||||
Total Current Assets | 93,333 | 93,333 | ||||
Deferred rent, net of current portion | 147,778 | 147,778 | ||||
Right of use asset | 200,207 | 200,207 | ||||
Total Assets | 441,318 | 441,318 | ||||
Accrued Liabilities | 75,131 | 75,131 | ||||
Total Current Liabilities | 1,154,506 | 1,154,506 | ||||
Right of Use Liabilities, net of Current Portion | 140,076 | 140,076 | ||||
Total Liabilities | 215,207 | 215,207 | ||||
Common Stock | 4,000 | 4,000 | ||||
Additional Paid-in Capital | 276,000 | 276,000 | ||||
Accumulated Deficit | (53,889) | (53,889) | ||||
Total Stockholders' Deficit | 226,111 | 226,111 | ||||
Total Liabilities and Stockholders' Deficit | 441,318 | 441,318 | ||||
General and Administrative Expenses | 32,333 | 53,889 | ||||
Total Costs and Expenses | 32,333 | 53,889 | ||||
Net Loss | $ (32,333) | $ (53,889) | ||||
Basic and Diluted Net Loss per Common Share | $ 0 | $ 0 | ||||
Deferred Rent | $ 38,889 | |||||
Right of Use Asset and Liability | 15,000 | |||||
Net Cash Used in Operating Activity | 0 | |||||
Common Stock Issued in Connection with Operating Lease | $ 280,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accounting Policies [Abstract] | ||||
Property, plant and equipment, depreciation methods | Straight-line method | |||
Estimated useful lives for machinery and equipment | 5 Years | |||
Cost of royalty income packing, per case | $ 1.20 | |||
Stock based compensation expenses | $ 323,000 | $ 0 | $ 323,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jul. 30, 2019 | Jan. 02, 2019 | Sep. 30, 2019 |
Mr. Lamadrid [Member] | |||
Number of shares cancelled during period | 1,750,000 | ||
Mr. Scott [Member] | |||
Number of shares cancelled during period | 1,200,000 | ||
Employment Agreements [Member] | Two Officers [Member] | |||
Minimum annual compensation | $ 350,000 | ||
Accrued agreement compensation | $ 188,388 | ||
Accrued expenses | $ 24,715 | ||
Employment Agreements [Member] | Jarrold R. Bachmann [Member] | |||
Royalty per case | $ 1.20 |
Royalty Income (Details Narrati
Royalty Income (Details Narrative) - Royalty Agreement Terms [Member] | 9 Months Ended |
Sep. 30, 2019 | |
Royalty agreement term | 5 years |
Royalty expiring date | 2010 |
Renewal term | 2 years |
Earnest Money Deposit (Details
Earnest Money Deposit (Details Narrative) | Sep. 30, 2019USD ($) |
Earnest Money Deposit | |
Escrow agent deposit | $ 20,000 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Three Promissory Notes [Member] | Third Parties [Member] | |
Proceeds from issuance of notes payable | $ 117,000 |
Notes Receivable (Details Narra
Notes Receivable (Details Narrative) - USD ($) | Sep. 30, 2019 | Jun. 30, 2019 | May 31, 2019 | Dec. 31, 2018 |
Notes receivable | $ 33,000 | |||
Two Unrelated Individuals [Member] | ||||
Notes receivable | $ 28,593 | $ 28,593 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||||
Feb. 28, 2019 | Jan. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Mar. 15, 2019 | Dec. 31, 2018 | |
Increased authorized capital stock | 250,000,000 | |||||
Common stock, par value | $ 0.01 | $ 0.01 | $ .01 | |||
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | 25,000,000 | |||
Preferred stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | |||
Value of common stock shares issued | $ 323,000 | |||||
Share based compensation | 760,000 | |||||
Proceeds from issuance of common stock | 482,500 | |||||
Deposits received | $ 442,500 | |||||
Sale of common stock and warrants | 885,000 | |||||
Private Offering [Member] | ||||||
Proceeds from issuance of common stock | $ 10,000,000 | |||||
Number of offering shares of common stock | 20,000,000 | |||||
Sale of stock price per share | $ 0.50 | |||||
Number of warrants issued to purchase common stock | 1 | |||||
Warrant exercise price | $ 2 | |||||
Warrant expiration date | Dec. 31, 2021 | |||||
Common stock trade price per share | $ 3 | |||||
Average volume shares per day | 100,000 | |||||
Two Officers [Member] | ||||||
Number of common stock issued | 1,600,000 | |||||
Shares vesting period | 1 year | |||||
Value of common stock shares issued | $ 760,000 | |||||
Consultant [Member] | ||||||
Number of common stock services | 140,000 | |||||
Value of common stock shares issued for services | $ 133,000 |
Lease Agreement (As Restated) (
Lease Agreement (As Restated) (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended |
May 31, 2019 | Sep. 30, 2019 | |
Lease term | 3 years | |
Stock issued for option to purchase property | $ 280,000 | |
Stock issued for option to purchase property, shares | 400,000 | |
Effective borrowing rate | 10.00% | |
Landlord [Member] | Post-split Common Stock [Member] | ||
Stock issued for option to purchase property, shares | 400,000 | |
Various Dates Prior to May 1, 2022 [Member] | Minimum [Member] | ||
Stock issued for option to purchase property | $ 1,400,000 | |
Various Dates Prior to May 1, 2022 [Member] | Maximum [Member] | ||
Stock issued for option to purchase property | $ 1,600,000 |
Acquisition (Details Narrative)
Acquisition (Details Narrative) | Sep. 06, 2019shares |
Prolific Nutrition [Member] | |
Number of restricted shares issued during period | 400,000 |
Acquisition - Schedule of Acqui
Acquisition - Schedule of Acquisition (Details) - USD ($) | Sep. 30, 2019 | Sep. 06, 2019 | Dec. 31, 2018 |
Business Combinations [Abstract] | |||
Cash | $ (15,000) | $ (22,501) | |
Payable on Acquisition | (50,000) | (14,765) | |
Common Stock | (4,000) | ||
APIC | (195,200) | ||
Cash (Acquired) | 750 | ||
AR | 3,711 | 22,802 | |
AR Allowance | (3,711) | ||
Goodwill | $ 263,450 | $ 263,450 |