Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 14, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | United Cannabis Corp | |
Entity Central Index Key | 0001436161 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 77,681,446 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
UNAUDITED CONSOLIDATED BALANCE
UNAUDITED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 450,189 | $ 664,570 |
Accounts receivable, net | 171,747 | |
Due from related parties | 46,346 | 86,971 |
Inventory | 1,401,286 | 2,552,118 |
Other current assets | 28,888 | 34,932 |
Total current assets | 1,926,709 | 3,510,338 |
Construction in process - extraction facilities | 1,966,091 | 1,937,187 |
Cultivation facility, laboratory equipment, and office furniture and fixtures, net of accumulated amortization and depreciation of $573,608 and $433,148 at March 31, 2019 and December 31, 2018, respectively | 2,101,315 | 2,119,745 |
Operating lease right-of-use asset | 833,043 | |
Granted patents, net of accumulated amortization of $11,574 and $9,795 at March 31, 2019 and December 31, 2018, respectively | 130,743 | 132,522 |
Intangible assets | 277,366 | 270,508 |
Other assets | 102,167 | 84,329 |
Goodwill | 4,838,603 | 4,838,603 |
Total assets | 12,176,037 | 12,893,232 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,250,604 | 1,302,502 |
Construction contracts payable | 90,163 | 888,686 |
Installment loans payable | 51,319 | 57,799 |
Deferred revenue | 23,750 | |
Current portion of operating leases | 300,261 | |
Notes payable to officers and directors | 1,143,103 | 1,155,436 |
Notes payable, net of a debt discount of $95,350 and $62,917 at March 31, 2019 and December 31, 2018 | 2,520,650 | 1,512,083 |
Arbitration reserve | 650,000 | 650,000 |
Total current liabilities | 6,006,100 | 5,590,256 |
Long term liabilities: | ||
Operating leases | 532,782 | |
Total liabilities | 6,538,882 | 5,590,256 |
COMMITMENTS AND CONTINGENCIES - Note 19 | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, 10,000,000 shares authorized; 3,000 and 2,000 Series A shares outstanding at March 31, 2019 and December 31, 2018, respectively | 3,300 | 2,200 |
Common stock, 100,000,000 shares authorized; 77,681,446 and 77,467,979 outstanding at March 31, 2019 and December 31, 2018, respectively | 47,144,725 | 46,939,646 |
Accumulated deficit | (41,200,246) | (39,374,397) |
Total equity attributable to stockholders of the Company | 5,947,779 | 7,567,449 |
Non-controlling interest (deficit) | (310,624) | (264,473) |
Total stockholders' equity | 5,637,155 | 7,302,976 |
Total liabilities and stockholders' equity | $ 12,176,037 | $ 12,893,232 |
UNAUDITED CONSOLIDATED BALANC_2
UNAUDITED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Accumulated depreciation | $ 573,608 | $ 433,148 |
Accumulated amortization | 11,574 | 9,795 |
Notes payable, debt discount | $ 95,350 | $ 62,917 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares outstanding | 77,681,446 | 77,467,979 |
Preferred Class A [Member] | ||
Preferred stock, shares outstanding | 3,000 | 2,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues: | ||
Product revenues | $ 4,293,481 | $ 164,212 |
Licensing fees and consulting | 54,750 | 45,000 |
Revenues, affiliate | 64,150 | 57,064 |
Total revenues | 4,412,381 | 266,276 |
Cost of revenues: | ||
Cost of revenues | (3,513,807) | (118,942) |
Gross profit | 898,574 | 147,334 |
Operating expenses: | ||
Marketing, advertising and new business development | 38,952 | 17,311 |
Research and development | 152,148 | 236,678 |
Legal, accounting, consulting and public reporting | 632,528 | 263,246 |
General and administrative | 1,655,751 | 1,002,796 |
Share-based expense for stock options granted to officers, directors and employees | 101,788 | 5,324,754 |
Total operating expenses | 2,581,167 | 6,844,785 |
Loss from operations | (1,682,593) | (6,697,451) |
Other expense: | ||
Interest expense | (67,840) | (8,498) |
Amortization of debt discount | (121,567) | |
Loss on issuance of common stock | (556,061) | |
Loss before taxes on income | (1,872,000) | (7,262,010) |
Provision for taxes on income | ||
Net Loss | (1,872,000) | (7,262,010) |
Loss attributable to non-controlling interests | 46,151 | 55,450 |
Net Loss attributable to common shareholders | $ (1,825,849) | $ (7,206,560) |
Basic and diluted net loss per share: | $ (0.02) | $ (0.11) |
Basic and diluted weighted-average common shares outstanding: | 77,532,958 | 63,829,443 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Accumulated Deficit [Member] | Non-Controlling Interest [Member] | Total |
Beginning balance at Dec. 31, 2017 | $ 2,200 | $ 21,186,888 | $ (15,269,846) | $ (50,153) | $ 5,869,089 |
Beginning balance, shares at Dec. 31, 2017 | 2,000 | 62,862,066 | |||
Options and warrants issued to officers and directors | $ 5,324,754 | 5,324,754 | |||
Shares issued - draws under our equity line of credit | $ 1,917,176 | 1,917,176 | |||
Shares issued - draws under our equity line of credit, shares | 1,285,762 | ||||
Sale of common stock | $ 76,798 | 76,798 | |||
Sale of common stock, shares | 65,440 | ||||
Shares and warrants issued for advisory board services | $ 56,043 | 56,043 | |||
Shares and warrants issued for advisory board services, shares | 30,400 | ||||
Shares issued for professional services | $ 65,885 | 65,885 | |||
Shares issued for professional services, shares | 60,000 | ||||
Shares issued as compensation | $ 42,300 | 42,300 | |||
Shares issued as compensation, shares | 32,994 | ||||
Net Loss attributable to common shareholders | $ (7,206,560) | (7,206,560) | |||
Non-Controlling Interests - Cannabinoid Research Development Limited | $ (43,097) | $ (43,097) | |||
Non-Controlling Interests - Cannabinoid Research Development Limited, shares | (12,353) | (12,353) | |||
Non-Controlling Interest - Prana Therapeutics, Inc. | |||||
Non-Controlling Interest - Prana Therapeutics, Inc., shares | |||||
Ending balance at Mar. 31, 2018 | $ 2,200 | $ 28,669,844 | $ (22,476,406) | $ (105,603) | $ 6,090,035 |
Ending balance, shares at Mar. 31, 2018 | 2,000 | 64,336,662 | |||
Beginning balance at Dec. 31, 2017 | $ 2,200 | $ 21,186,888 | (15,269,846) | (50,153) | 5,869,089 |
Beginning balance, shares at Dec. 31, 2017 | 2,000 | 62,862,066 | |||
Ending balance at Dec. 31, 2018 | $ 2,200 | $ 46,939,646 | (39,374,397) | (264,473) | 7,302,976 |
Ending balance, shares at Dec. 31, 2018 | 2,000 | 77,466,979 | |||
Options and warrants issued to officers and directors | $ 101,788 | 101,788 | |||
Cancellation of preferred stock | $ (550) | (550) | |||
Cancellation of preferred stock. shares | (500) | ||||
Issuance of preferred stock to directors | $ 1,650 | 1,650 | |||
Issuance of preferred stock to directors, shares | 1,500 | ||||
Sale of common stock | $ 23,530 | 23,530 | |||
Sale of common stock, shares | 52,288 | ||||
Shares and warrants issued for advisory board services | $ 34,751 | 34,751 | |||
Shares and warrants issued for advisory board services, shares | 57,179 | ||||
Shares issued for professional services | $ 45,010 | 45,010 | |||
Shares issued for professional services, shares | 105,000 | ||||
Net Loss attributable to common shareholders | (1,825,849) | (1,825,849) | |||
Non-Controlling Interests - Cannabinoid Research Development Limited | (38,544) | (38,544) | |||
Non-Controlling Interests - Cannabinoid Research Development Limited, shares | |||||
Non-Controlling Interest - Prana Therapeutics, Inc. | (7,607) | (7,607) | |||
Non-Controlling Interest - Prana Therapeutics, Inc., shares | |||||
Ending balance at Mar. 31, 2019 | $ 3,300 | $ 47,144,725 | $ (41,200,246) | $ (310,624) | $ 5,637,155 |
Ending balance, shares at Mar. 31, 2019 | 3,000 | 77,681,446 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (1,872,000) | $ (7,262,010) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Amortization of debt discount | 121,567 | |
Depreciation and amortization | 142,239 | 53,946 |
Share-based compensation | 181,549 | 5,488,982 |
Discount on issuance of shares of common stock | 556,061 | |
Changes in operating assets and liabilities: | ||
Inventory | 1,150,832 | (93,941) |
Accounts receivable | 171,747 | (34,513) |
Other current assets | 6,044 | 4,811 |
Due from related party | 40,625 | (14,961) |
Accounts payable and accrued expenses | (48,367) | (195,663) |
Deferred revenue | (23,750) | (45,000) |
Accrued wages payable to officers, directors and employees | (108,738) | |
Net cash used in operating activities | (129,514) | (1,651,026) |
Investing activities: | ||
Payment of construction contracts | (827,428) | |
Purchase of equipment and improvements to cultivation and extraction facilities | (122,030) | (463,414) |
Purchase of intangible assets | (6,858) | (50,443) |
Deposits and return of deposit | (17,838) | |
Net cash provided by (used in) investing activities | (974,154) | (513,857) |
Financing activities: | ||
Proceeds from issuance of common stock - equity financing line | 1,380,831 | |
Net proceeds from notes payable | 887,000 | |
Proceeds (payments) from advances from officers and directors | (11,233) | 80,195 |
Proceeds from sale of common shares | 20,000 | 57,083 |
Payments on installment loans | (6,480) | (13,910) |
Net cash provided by (used in) financing activities | 889,287 | 1,504,199 |
Net increase (decrease) in cash | (214,381) | (660,684) |
Cash, beginning of period | 664,570 | 825,645 |
Cash, end of period | 450,189 | 164,961 |
Supplemental schedule of cash flow information: | ||
Cash paid for interest | ||
Cash paid for income taxes | ||
Supplemental disclosure of non-cash investing and financing activities: | ||
Establishment of operating lease right of use asset | 833,043 | |
Establishment of operating lease liability | $ (833,043) |
BUSINESS ORGANIZATION AND NATUR
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1 –BUSINESS ORGANIZATION AND NATURE OF OPERATIONS United Cannabis Corporation ("we", "our", "us", "UCANN", or “the Company”) a Colorado corporation, was originally formed as a California corporation under the name MySkin, Inc. on November 15, 2007. MySkin was engaged in the business of providing management services to a medical spa in Los Angeles, California which provided various advanced skin care services until March 31, 2014, when this business was sold to the prior President of the Company. In early 2014 we decided to exit the medical spa management business and change our focus to providing products, services and intellectual property to the cannabis industry. On March 26, 2014, we entered into a License Agreement with Earnest Blackmon, Tony Verzura and Chad Ruby pursuant to which Messrs. Blackmon, Verzura and Ruby licensed certain intellectual property to us in exchange for a total of 38,690,000 shares of our common stock. In connection with this transaction: · Messrs. Blackmon, Verzura and Ruby licensed to us all of their knowledge and know-how relating to the design and buildout of cultivation facilities, growing/cultivation systems, seed-to-sale protocols and procedures, products, a genetic catalogue including over 150 different strains, an advanced (non-psychoactive) cannabinoid therapy program called "A.C.T. Now", security, regulatory compliance, and other methods and processes which relate to the cannabis industry. · The territory for this license is the entire world and the license runs in perpetuity. There are no royalty payments under the License Agreement. · Messrs. Blackmon, Verzura and Ruby were appointed to our board of directors effective April 7, 2014. · Mr. Blackmon was elected as our President, Mr. Ruby was elected as Chief Operating Officer and Mr. Verzura was elected as Vice President. · A total of 41,690,000 previously outstanding shares of common stock were cancelled resulting in a total of 43,620,000 shares of common stock outstanding on March 26, 2014. UCANN was formed as a Colorado corporation on March 25, 2014, and on May 2, 2014, MySkin, Inc. merged into UCANN, a wholly-owned subsidiary of MySkin, Inc., for the purpose of changing domicile from California to Colorado and changing the corporation's name to United Cannabis Corporation. On March 31, 2014, we sold all right, title and interest in the tangible and intangible assets, trademarks, customer lists, intellectual property and rights, which we owned and were related to our advanced skin care business since we entered into a new business and no longer had any use for these assets. The assets were sold to MySkin Services, Inc. (“MTA”), a business partly owned by Marichelle Stoppenhagen, our former officer and director, in exchange for the $15,000 payable which we owed to Ms. Stoppenhagen and/or MTA. In addition, MTA assumed all costs associated with these assets starting on March 31, 2014. On July 14, 2017, we completed the acquisition of Prana Therapeutics, Inc. (“Prana”) in a one-for-one exchange of 5,730,000 shares of common stock of the Company for 5,730,000 of common stock of Prana. The purchase price had a fair market value of $5,070,500, based upon the closing price of $0.85 per share on the OTC QB exchange on July 14, 2017, including the cost to purchase 400,000 shares of Prana common stock for $200,000. Prana is a polymolecular botanical drug development company focused on developing targeted therapeutics for prevention of the negative side effects of chemotherapy, management of rheumatoid arthritis and treatment of brain cancer. Management elected to purchase Prana, because of the successful indication of the effectiveness of their Epidiferphane™ chemical formulation in the treatment of (i) the negative side effects of chemotherapy, (ii) inflammation and pain associated with arthritis and back-centric pain, and (iii) the potential shrinkage of brain tumors. Recently, we elected to focus a significant portion of our assets, human resources and financial capital on the manufacturing and selling of a variety of cannabidiol centric products derived from industrial hemp plants. We constructed a state-of-the-art extraction facility; and, hired and trained specialized extraction personnel and laboratory technicians that enable us to convert components of industrial hemp flower to finished CBD products. In order to help provide a consistent supply of industrial hemp flower for our extraction facility, we purchased farming equipment and leased hundreds of acres of farm land on which we are growing a crop of industrial hemp. It is our intent to grow at least one crop of industrial hemp plants per calendar year and to harvest a sufficient amount of industrial hemp flower from our crop to supply our extraction facility on a vertically integrated basis. As of March 31, 2019, we have expended approximately $2,800,000 on facilities, farm equipment and crop planting and cultivation, as a result of electing to vertically integrate the hemp centric portion of our business Government Regulation |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation At March 31, 2017, we concluded that we had established a variable interest entity relationship with CRD, because we are the primary beneficiary, in accordance with U.S. GAAP. As a result, we elected to consolidate CRD beginning March 31, 2017. Use of Estimates We make our estimate of the ultimate outcome for these items based on historical trends and other information available when our consolidated financial statements are prepared. We recognize changes in estimates in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Our actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term. Fair Value of Financial Instruments Level 1 Level 2 Level 3 The carrying amount of our cash and cash equivalents, accounts receivable, accounts payable, and other current assets and liabilities in our consolidated financial statements approximates fair value because of the short-term nature of the instruments. Investments in non-marketable equity securities are carried at cost less other-than-temporary impairments. The carrying amount of our notes payable and convertible debt at March 31, 2019, approximates their fair values based on our incremental borrowing rates. There have been no changes in Level 1, Level 2, and Level 3 categorizations and no changes in valuation techniques for these assets or liabilities for the three months ended March 31, 2019 and 2018. Cash and Cash Equivalents Accounts Receivable, Net Inventory – Property, Plant and Equipment, net Operating Lease Right of Use Asset and Liability - Granted Patents, Net – Intangible Assets – Long-Lived Assets Impairment Assessment We have not recorded any impairment charges related to long-lived assets as of March 31, 2019 or December 31, 2018. Goodwill fl Deferred Revenue Revenue Recognition Revenue from Contracts with Customers Revenue Recognition – Affiliate Prana Prana Prana Prana Prana Revenue from Contracts with Customers. We have licensed Prana Hemp Prana Hemp Prana Hemp Prana Hemp Prana Hemp Revenue from Contracts with Customers. Cost of Revenues Research and Development Expenses General and Administrative Expenses Stock-Based Compensation Equity We account for stock option grants issued and vesting to employees based on ASC 718, Compensation – Stock Compensation Income Taxes We follow the provisions of ASC 740, Income Taxes When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in our consolidated financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits, if any, are classified as interest expense and penalties and are included in selling, general and administrative expenses in our consolidated statements of operations. On December 22, 2017, the U.S. Tax Cuts and Jobs Act was enacted. U.S. tax reform introduced many changes, including lowering the U.S. corporate tax rate to 21 percent, changes in incentives, provisions to prevent U.S. base erosion and significant changes in the taxation of international income, including provisions which allow for the repatriation of foreign earnings without U.S. tax. The enactment of U.S. tax reform had no impact on our income taxes for the three months ended March 31, 2019 or 2018, respectively. Commitments and Contingencies – Certain conditions may exist as of the date our consolidated financial statements are issued, which may result in a loss but which will only be resolved when one or more future events occur or fail to occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of the legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. Net Loss Per Share Earnings per Share Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive. Three Months Ended March 31, 2019 2018 Warrants to purchase common stock 1,334,035 1,209,025 Stock options 26,837,300 6,637,500 28,171,335 7,846,525 Other Comprehensive Income (Loss) Concentration of Credit Risk Recently Issued Accounting Pronouncements Reclassification |
GOING CONCERN
GOING CONCERN | 3 Months Ended |
Mar. 31, 2019 | |
GOING CONCERN [Abstract] | |
GOING CONCERN | NOTE 3 – GOING CONCERN Our consolidated financial statements have been prepared on a going concern basis which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. During the three months ended March 31, 2019, we incurred losses of $1,872,000, used cash of $129,514 in our operating activities, had a working capital deficit of $4,079,391 and had an accumulated deficit of $41,200,246 at March 31, 2019. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and, or, obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. There is no assurance that these events will be satisfactorily completed. |
DUE FROM RELATED PARTIES
DUE FROM RELATED PARTIES | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
DUE FROM RELATED PARTIES | NOTE 4 – DUE FROM RELATED PARTIES Under the terms of a sales agreement with NutriMed, LLC and a licensing agreement with Advesa, Inc., we completed sales to related parties in the aggregate amount of $64,150 and $14,861 for the three months ended March 31, 2019 and 2018, respectively. None of the sales to related parties for the three months ended March 31, 2019 were from royalties. Amounts due (to) from related parties include the following: March 31, 2019 December 31, 2018 Advesa, Inc. $ (17,735 ) $ 42,349 NutriMed, LLC 64,081 44,622 $ 46,346 $ 86,971 In the normal course of business, we make non-interest-bearing advances to Advesa, Inc. (“Advesa’), which is controlled by one of our officers and directors, and we receive licensing fees from the sale of products licensed to Advesa by the Company. In the normal course of business, we sell products to NutriMed, LLC, which is controlled by two of our officers and directors. The products that we sell to NutriMed, LLC are at a price equivalent to the whole sale price that we charge to unrelated, third party distributors. |
OPERATING LEASES
OPERATING LEASES | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
OPERATING LEASES | NOTE 5 – OPERATING LEASES Administrative Offices and Hemp Laboratory – Golden, Colorado Effective August 1, 2017, we entered into a triple net lease of approximately 9,882 square feet of commercial space in Golden, Colorado in which our administrative offices and hemp laboratory are located. The term of the lease expires on July 31, 2020 and has no option for renewal. Basic rent is $3,302, $3,500 and $3,800 per month through, July 31, 2018, 2019 and 2020, respectively, plus we are responsible for all utilities. Extraction and Cultivation Facility – Fort Morgan, Colorado Effective October 1, 2017, we entered into a triple net lease of approximately 40,000 square feet of industrial space located on five (5) acres of land in Weldona, Colorado that we us as our hemp extraction facility and hemp cultivation center. The term of the lease expires on September 31, 2018, with an annual option to renew the lease on an annual basis, that expires on September 30, 2022. The rent is $7,500 per month throughout the term of the lease, Extraction Facility – Mead, Colorado Effective August 15, 2018, we entered into a triple net lease of approximately 14,300 square feet of industrial space in located in Mead, Colorado that, upon completion tenant modification and installation of extraction equipment, we will use the facility as our main extraction facility in Colorado. The initial term of the lease expires on August 31, 2019, with an annual option to renew the lease for an additional three-year period, on an annual basis. We have made $75,000 security deposit with the landlord in connection with the lease. The monthly lease amount for the initial lease period is $12,596 per month and will increase annually by 3.0% or accordance with a consumer price index calculation, whichever is greater. Testing Lab – Golden, Colorado Effective November 1, 2018, we entered into a triple net lease of approximately 2,100 square feet of commercial space located in Golden, Colorado that we use as our testing laboratory. The term of the lease expires on October 31, 2020, with an option to renew for an additional two-year term exercisable prior to 90 days before the end of the initial term. The basic rent is $2,161 and $2,226 per month through October 31, 2019 and 2020, respectively, plus we are responsible for all utilities. Extraction and Cultivation Facility - Jamaica Our fifty percent (50%) owned subsidiary Cannabinoid Research Development Company Limited (“CRD”) leases approximately 28 acres of land upon which their cultivation and extraction facility is located near Kingston, Jamaica. The land is leased for $1 per year from the father of one of the directors and members of CRD. Future minimum payments for these leases are: For the twelve Months Ending March 31, 2020 2021 2022 2023 2024 $314,453 $279,191 $253,163 $113,821 $1 |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 6 - INVENTORY At March 31, 2019 and December 31, 2018, our inventory was, as follows: March 31, 2019 December 31, 2018 Raw materials $ 577,635 $ 1,813,880 Work-in-process 630,464 666,845 Finished goods 193,187 71,393 $ 1,401,286 $ 2,552,118 |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment, Net [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 7 – PROPERTY, PLANT AND EQUIPMENT, NET March 31, 2019 December 31, 2018 Cost of construction in process - extraction facility Mead, Colorado extraction facility Equipment and leasehold improvements $ 1,780,392 $ 1,743,223 Jamaica cultivation and extraction facility: Leasehold improvements - laboratory 75,000 75,000 Leasehold improvements - cultivation 110,699 118,964 $ 1,966,091 $ 1,937,187 March 31, 2019 December 31, 2018 Extraction facility, laboratory equipment, and office furniture and fixtures Weldona extraction facility Equipment and machinery $ 1,352,072 $ 1,269,734 Furniture and fixtures 76,399 64,955 Leasehold improvements 239,602 237,581 Transportation equipment 71,487 60,228 Farm Equipment 531,245 531,245 Golden, Colorado administrative offices: Furniture and fixtures 49,282 49,282 Transportation equipment 215,672 200,704 Golden, Colorado industrial hemp laboratory - equipment 39,944 39,944 Remote laboratory equipment 99,220 99,220 2,674,923 2,552,893 Accumulated amortization and depreciation (573,608) (433,148 ) $ 2,101,315 $ 2,119,745 The amount of depreciation and amortization expense for the three months ended March 31, 2019 and 2018 is $140,460 |
GRANTED PATENT
GRANTED PATENT | 3 Months Ended |
Mar. 31, 2019 | |
Granted Patent [Abstract] | |
GRANTED PATENT | NOTE 8 – GRANTED PATENT On August 15, 2017, the United States Patent and Trademark Office issued to the Company US Patent #9730911 (the “Patent”) granting exclusive rights to its proprietary formulations based on compounds extracted from cannabis plant materials; more specifically the composition of matter pertaining to the use of phytocannabinoids, cannabinoids, and specific terpene profiles in liquid form. This composition of matter Patent provides protection for our proprietary formulations. The Patent protects the use of suspending both phytocannabinoids and cannabinoids with specific combinations of cannabis derived terpenes in liquid forms with an array of delivery methods including capsule, sublingual, topical, oral, suppository, and vaporization. Cannabinoids referenced in the application include ratios of tetrahydrocannabinolic acid (THCa), cannabidiolic acid (CBDa), tetrahydrocannabinol (THC), cannabinol (CBN), cannabidiol (CBD), cannabichromenic acid (CBCa), and cannabichromene (CBC). At August 15, 2017, we classified the costs associated with research, legal fees, application costs incurred in the process of being granted the Patent on our consolidated balance sheet in the amount of $142,317, and we began amortizing such cost of the Patent on a straight-line basis over a 15-year period. Amortization expense of the Patent is $1,779 for the three months ended March 31, 2019 and 2018, respectively, and accumulated amortization is $11,574 and $9,795 at March 31, 2019 and December 31, 2018, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 9 – INTANGIBLE ASSETS Our intangible assets are comprised of the costs incurred in pursuing provisional patent applications and applications for design mark and trademarks, which have presently not been approved or issued. The costs associated with our intangible assets are amortized on a straight-line basis over estimated useful lives of 15 years for patents and 10 years for design marks and trademarks, once the applications are approved. Costs associated with applications that are not approved will be expensed in the period that the application is rejected or abandoned. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Liabilities, Current [Abstract] | |
ACCRUED EXPENSES | NOTE 10 – ACCRUED EXPENSES Our accrued expenses which are included in our consolidated balance sheets as a component of accounts payable and accrued expenses, consist of: March 31, 2019 December 31, 2018 Accrued wages and related expenses $ 118,434 $ 126,345 Accrued interest expense 26,555 2,572 Other accrued expenses 44,400 10,186 Total accrued expenses $ 189,389 $ 139,103 |
INSTALLMENT LOANS PAYABLE
INSTALLMENT LOANS PAYABLE | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
INSTALLMENT LOANS PAYABLE | NOTE 11 – INSTALLMENT LOANS PAYABLE March 31, 2019 December 31, 2018 Installment Loans Payable $ 51,319 $ 57,799 Installment loans payable consist of a 36-month installment loan for the purchase equipment used for Company purposes. The outstanding balance on the 36-month installment loan was $51,319 and $57,799 at March 31, 2019 and December 31, 2018, respectively. The terms of the 36-month installment loan specify monthly payments of $2,160, however, we intend to make payments of $6,500 per month in order to pay the loan off within a one-year period. As a result of our intentions to pay off the loan within one year, the entire balance of the 36-month installment loan has been classified as a current liability. |
DEFERRED REVENUE
DEFERRED REVENUE | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Revenue Disclosure [Abstract] | |
DEFERRED REVENUE | NOTE 12 – DEFERRED REVENUE Our deferred revenue consists of: March 31, 2019 December 31, 2018 Deferred revenue – WeedMD $ — $ 23,750 On June 9, 2014, we received 1,187,500 common shares and 3,000,000 warrants to purchase common shares of WMD in exchange for future consulting services and use of our intellectual property. We recorded the $893,750 fair value of these securities as deferred revenue and we recognized $150,000 of this amount as revenue during the period July 1, 2014 through December 31, 2014, based upon our initial three-year estimate of the service period involved. We delivered the consulting services and use of our intellectual property to WMD on a relatively consistent monthly basis during the four-year period January 1, 2015 through December 31, 2018. Accordingly, we recognized $15,000 of deferred revenue per month during that period. We recognized $23,750 and $45,000 of revenue applicable to this arrangement in the three months ended March 31, 2019 and 2018, respectively. |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2019 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | NOTE 13 – NOTES PAYABLE On November 11, 2018 and February 11, 2019, we issued notes to an unaffiliated third party, Tangiers Global, LLC (“Tangiers” and “Holder”), in the amount of $1,575,000 each (“the Notes”). The terms of the Notes allow us to draw down on the Notes in tranches, upon our election. Tangiers is entitled, at its option, at any time, after the maturity date of each funding to convert all or any part of the unpaid principal into shares of the Company’s common stock at a price per share equal to 70% of the average of the two lowest trading prices of the Company’s common stock during the 15 consecutive trading days ending on the latest complete trading day prior to the conversion date. On March 16, 2019, we issued a note to an unaffiliated third party in the amount of $516,000. The proceeds of the Notes were used to purchase industrial hemp biomass. The debt discount on the note is amortized on a straight-line basis from the issue date, which approximates the effective interest rate method, over the 33-day term of the note, and this amortization is included in interest expense in our consolidated statements of operations. The noteholder is entitled, at its option, at any time, after the maturity mate of the note to convert all or any part of the unpaid principal into shares of the Company’s common stock at a price per share equal to 70% of the average of the two lowest trading prices of the Company’s common stock during the 15 consecutive trading days ending on the latest complete trading day prior to the conversion date. The following table summarizes our notes outstanding as of March 31, 2019 and December 31, 2018: Issue Date Security Maturity Date Interest Rate Draws Under the Note March 31, 2019 December 31, 2018 Note Dated November 7, 2018: 11/05/2018 Unsecured 5/04/2019 5% First Tranche $ 525,000 $ 525,000 12/05/2018 Unsecured 6/03/2019 5% Second Tranche 525,000 525,000 12/26/2018 Unsecured 6/24/2019 5% Third Tranche 525,000 525,000 Note Dated February 11, 2019: 2/11/2019 Unsecured 8/10/2019 5% First Tranche 525,000 — Note Dated March 13, 2019: 3/11/2019 Unsecured 4/13/2019 — — 516,000 — Less unamortized discount (95,350 ) (62,917 ) $ 2,520,650 $ 1,512,083 During the three months ended March 31, 2019 and 2018 we recognized $121,567 and $16,406 of amortization of debt discounts, respectively. |
NOTES PAYABLE TO OFFICERS AND D
NOTES PAYABLE TO OFFICERS AND DIRECTORS | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE TO OFFICERS AND DIRECTORS | NOTE 14 – NOTES PAYABLE TO OFFICERS AND DIRECTORS Notes payable to officers and directors are due on demand and consisted of the following at March 31, 2019 and December 31, 2018: March 31, 2019 December 31, 2018 Note payable to Earnie Blackmon, an officer and director $ 816,176 $ 840,807 Note payable to Tony Verzura, a former officer and former director 169,226 160,247 Note payable to Chad Ruby, an office and director 158,701 154,382 $ 1,144,103 $ 1,155,436 On April 6, 2016, we borrowed $25,000 from Ernest Blackmon and $25,000 from Tony Verzura and used the proceeds to repay principal and interest applicable on our $102,000 convertible promissory note dated October 12, 2015, to JSJ Investments Inc. The loans, together with interest at 12% per year, are payable on December 30, 2016. We may prepay the loans at any time. Historically, Messrs. Blackmon, Verzura and Ruby, who are officers and directors of the Company, have paid obligations and expenses on behalf of the Company from their own individual, personal funds. Such payments have been recorded in the consolidated balance sheets as a component of Notes Payable to Officers and Directors and bear interest at 12.5% to 15% per annum. On July 1, 2018, we elected to convert all accrued and unpaid wages owed to Messrs. Blackmon, Verzura, and Ruby in the aggregate amount of $310,408 as notes payable to them. Thus, $310,408 is classified as Notes Payable to Officers and Directors on the consolidated balance sheet of the Company at March 31, 2019 and December 31, 2018. Interest on the notes is at a rate of 15% for the principal amount due Mr. Blackmon, and at a rate of 12.5% for on the principal amount owed Messrs. Verzura and Ruby. During the three months ended March 31, 2019 and 2018, we recognized $38,767 and $8,498, respectively, of interest expense on notes payable to officers and directors. As of March 31, 2019 and December 31, 2018, $147,963 and $109,196, respectively, of this interest is included in Notes Payable to Officers and Directors on our consolidated balance sheets. Effective March 21, 2019, Tony Verzura resigned as an officer and director of the Company. |
ARBITRATION AND LITIGATION RESE
ARBITRATION AND LITIGATION RESERVE | 3 Months Ended |
Mar. 31, 2019 | |
Loss Contingency [Abstract] | |
ARBITRATION AND LITIGATION RESERVE | NOTE 15 – ARBITRATION AND LITIGATION RESERVE On May 8, 2018, H2, LLC (“H2”) and the Company executed a letter of intent formalizing their intent to enter into a joint venture. The parties subsequently made monetary advances in anticipation of formalizing the joint venture through a definitive agreement. However, the joint venture was never formalized, and the letter of intent was terminated pursuant to its terms. Under the terms of the provisions in the letter of intent that survived its termination, the Company has the option to either provide H2 with 25% of the industrial hemp seeds purchased with $650,000 advanced by H2, or to refund the $650,000 advanced by H2. Pursuant to another provision in the letter of intent that survived termination, disputes are to be resolved via arbitration in Denver, Colorado. On August 10, 2018, H2 filed a lawsuit in the state of California naming the Company, as well as, naming Earnest Blackmon, our Chairman of the Board and Chief Executive Officer, and John Walsh, our Treasurer and Principal Accounting Officer. The lawsuit asserts various claims, including rescission of any purported contract or joint venture and asks for $16,500,000 in damages. Our counsel and Management believe the suit is without merit, and we will vigorously defend against the lawsuit. We filed with the court a motion to compel arbitration and stay the litigation against Mr. Blackmon and Mr. Walsh. On December 20, 2018, the court granted our motion and ordered H2 to arbitrate its dispute with the Company in Denver, Colorado, and stayed the litigation against Mr. Blackmon and Mr. Walsh pending the arbitration. The Company and H2 are currently in discussions regarding resolution of the dispute either via arbitration or by agreement. Based upon the current status of this dispute, if the dispute ultimately goes to arbitration, it presently appears that an arbitration hearing would not occur until early 2020. On July 30, 2018, the Company filed a complaint for patent infringement and a demand for jury trial against Pure Hemp Collective Inc. (“Pure Hemp”) in the United States District Court for the District of Colorado. The Company contends that Pure Hemp has willfully and directly infringed the Company’s 9730911 Patent and seeks damages from Pure Hemp, among other relief. On October 29, 2018, Pure Hemp filed its answer, defenses and counterclaims, in which Pure Hemp contends the 9730911 Patent is not infringed by Pure Hemp and is invalid and unenforceable. Pure Hemp has also asserted a counterclaim under the Sherman Act against the Company in which it alleges the lawsuit is objectively baseless and requests the court enter an order awarding it its costs and attorneys’ fees as well as treble damages. The Company believes the Sherman Act counterclaim has no merit, and it is impossible to quantify the amount of any alleged damages allegedly suffered by Pure Hemp, or what its costs and fees in this case will be. On April 17, 2019, the Court entered an Order denying in its entirety Pure Hemp’s Early Motion for Partial Summary Judgment. In its motion, Pure Hemp had argued that the formulations claimed by the Company in the 9730911 Patent are non-patentable natural phenomena. In its Order, the Court disagreed with Pure Hemp and held that the concentrations of cannabinoids and related chemicals covered by the Patent are not natural phenomena and are patentable. Thus, the case continues in the United States District Court for the District of Colorado. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 16 – STOCKHOLDERS’ EQUITY Preferred Stock On July 18, 2017, the Board of Directors adopted a resolution creating a series of Preferred Shares, no par value per share, designated as the Series A Preferred Shares. We subsequently issued 2,000 shares of our Series A Preferred Shares for $2,200 to our officers and directors. On March 20, 2019, we issued 2,000 additional shares of our Series A Preferred Shares to two officers and directors. Each preferred share is entitled to 15,000 votes on all matters submitted to the vote of our shareholders, is entitled to an annual dividend of $0.05 per share when, as, and if declared by our directors, and is convertible at any time, at the option of the holder of the preferred shares, into one share of our common stock. The Series A Preferred Shares do not have any intrinsic a value in that they have only have voting rights and not a value on a price per share basis. Mr. Verzura returned his 500 shares of Series A Preferred Shares to the Company upon his resignation as a director and officer of the Company on March 21, 2019. We subsequently cancelled Mr. Verzura’s 500 shares of Series A Preferred Shares effective March 21, 2019. Equity offerings February 14, 2018, we sold 65,440 shares of our common stock to an accredited investor for $57,083. Such shares were valued at $76,798 based on the previous trading day’s closing price. The difference between the proceeds received of $57,083 and the value of our common stock of $76,798 was recorded as a loss on the issuance of common stock. August 20 2018, we sold 27,359 shares of our common stock to an accredited investor for $10,000. Such shares were valued at $13,249 based on the previous trading day’s closing price. The difference between the proceeds received of $10,000 and the value of our common stock of $13,249 was recorded as a loss on the issuance of common stock. August 31, 2018, we sold 100,000 shares of our common stock to an accredited investor for $51,500. Such shares were valued at $62,750 based on the previous trading day’s closing price. The difference between the proceeds received of $51,500 and the value of our common stock of $62,750 was recorded as a loss on the issuance of common stock. March 11, 2019, we sold 52,288 shares of our common stock to an accredited investor for $20,000. Common Stock Issued for Services On December 31, 2018, we issued 251,497 shares of common stock valued at $75,700, based on the previous trading day’s closing price, as annual incentive bonuses for certain employees. We recorded the $75,700 value of the common stock as share-based compensation expense and included this in general and administrative expenses in our consolidated statements of operations. At various times throughout the year ended December 31, 2018, we issued 50,000 shares of our common stock valued at $36,156 for marketing services, and we recorded the value of the shares as share-based compensation and recorded this in marketing, advertising and new business development expenses in our consolidated statements of operations. At various times throughout the year ended December 31, 2018, we issued 310,000 shares of our common stock valued at $223,996 for legal services, and we recorded the value of the shares as share-based compensation and in legal, accounting, consulting and public reporting in our consolidated statements of operations. At various times throughout the year ended December 31, 2018, we issued 363,163 shares of our common stock valued at $297,400 as compensation to employees, and we recorded the value of the shares as share-based compensation, which we recorded in general and administrative expenses in our consolidated statements of operations. On December 31, 2018, we issued 147,227 shares of common stock valued at $96,000, based on the applicable previous trading day’s closing price, as a component of employee compensation. We recorded the $96,000 value of the common stock as share-based compensation expense and included this in general and administrative expenses in our consolidated statements of operations. During the three months ended March 31, 2019, we issued 15,000 shares of our common stock valued at $6,580 for marketing services, and we recorded the value of the shares as share-based compensation and recorded this in marketing, advertising and new business development expenses in our consolidated statements of operations. During the three months ended March 31, 2019, we issued 90,000 shares of our common stock valued at $38,430 for legal services, and we recorded the value of the shares as share-based compensation in Legal, accounting, consulting and public reporting in our consolidated statements of operations. Warrants: The following table summarizes our share warrants outstanding as of March 31, 2019 and December 31, 2018: March 31, 2019 December 31, 2018 Number of Shares Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price Warrants outstanding, beginning of period 1,309,033 $ 0.21 $ 1,209,025 $ 0.21 Warrants issued to consultants 25,002 0.43 100,008 0.89 Cashless warrants issued upon conversion of Slainte note — — — — Warrants exercised — — — — Expired — — — — Warrants outstanding, end of period 1,334,035 0.35 1,309,033 $ 0.27 Warrants exercisable, end of period 1,334,035 0.35 1,309,033 $ 0.27 The weighted-average remaining contractual life for warrants outstanding and exercisable at March 31, 2019 and December 31, 2018, is 2.94 years and 3.0 years, respectively; and the aggregate intrinsic value of warrants outstanding and exercisable at March 31, 2019 and December 31, 2018 is $0. 132,669 warrants issued during the year 2017, respectively, were valued utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 0.16 - $2.18 Exercise price $ 0.18 Risk free interest rate 1.01% - 1.37 % Expected term (years) 5 Expected volatility 322% - 504 % Expected dividends 0 % 100,008 warrants issued during the year ended December 31, 2018 were valued utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 0.16 - $2.18 Exercise price $ 0.18 Risk free interest rate 1.01% - 1.37 % Expected term (years) 5 Expected volatility 322% - 504 % Expected dividends 0 % 25,002 warrants issued during the three months ended March 31, 2019 were valued utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 0.16 - $2.18 Exercise price $ 0.18 Risk free interest rate 1.01% - 1.37 % Expected term (years) 5 Expected volatility 322% - 504 % Expected dividends 0 % 2014 Equity Incentive Plan On November 20, 2014, our board of directors approved our 2014 Stock Incentive Plan (the “Plan”) and the Plan became effective on November 19, 2015. The Plan provides officers, directors, selected employees and outside consultants an opportunity to acquire or increase a direct ownership interest in our operations and future success. Our board of directors currently administers the Plan and makes all decisions concerning which officers, directors, employees and other persons are granted awards, how many to grant to each recipient, when awards are granted, the terms and conditions applicable to awards, how the Plan should be interpreted, whether to amend or terminate the Plan and whether to delegate administration of the Plan to a committee. A maximum of 4,000,000 common shares are subject to the Plan. The Plan provides for the grant of stock options, stock awards, restricted stock units and stock appreciation rights. Stock options may be non-qualified stock options or incentive stock options except that stock options granted to outside directors, consultants or advisers providing services to us shall in all cases be non-qualified stock options. The Plan will terminate on November 20, 2024, unless the administrator terminates the Plan earlier. As of March 31, 2109 and December 31, 2018, no common shares were available for issue under the Plan. 2017 Equity Incentive Plan On May 31, 2017, our board of directors approved our 2017 Stock Incentive Plan (the “Plan”) and the Plan became effective on May 31, 2017. The Plan provides officers, directors, selected employees and outside consultants an opportunity to acquire or increase a direct ownership interest in our operations and future success. Our board of directors currently administers the Plan and makes all decisions concerning which officers, directors, employees and other persons are granted awards, how many to grant to each recipient, when awards are granted, the terms and conditions applicable to awards, how the Plan should be interpreted, whether to amend or terminate the Plan and whether to delegate administration of the Plan to a committee. A maximum of 6,000,000 common shares are subject to the Plan. The Plan provides for the grant of stock options, stock awards, restricted stock units and stock appreciation rights. Stock options may be non-qualified stock options or incentive stock options except that stock options granted to outside directors, consultants or advisers providing services to us shall in all cases be non-qualified stock options. The Plan will terminate on May 31, 2027, unless the administrator terminates the Plan earlier. As of March 31, 2019 and December 31, 2018, 900,342 common shares were available for issue under the Plan. 2018 Equity Incentive Plan On January 31, 2018, our board of directors approved our 2018 Stock Incentive Plan (the “Plan”) and the Plan became effective on January 31, 2018. On June 21, 2018, our board of directors amended the Plan to increase the maximum number of our shares of common shares subject to the plan from 12,500,000 to 25,000,000. The Plan provides officers, directors, selected employees and outside consultants an opportunity to acquire or increase a direct ownership interest in our operations and future success. Our board of directors currently administers the Plan and makes all decisions concerning which officers, directors, employees and other persons are granted awards, how many to grant to each recipient, when awards are granted, the terms and conditions applicable to awards, how the Plan should be interpreted, whether to amend or terminate the Plan and whether to delegate administration of the Plan to a committee. The Plan provides for the grant of stock options, stock awards, restricted stock units and stock appreciation rights. Stock options may be non-qualified stock options or incentive stock options except that stock options granted to outside directors, consultants or advisers providing services to us shall in all cases be non-qualified stock options. The Plan will terminate on January 31, 2028, unless the administrator terminates the Plan earlier. As of March 31, 2019 and December 31, 2018, 3,941,040 common shares were available for issue under the Plan. Stock Options On January 12, 2016, we awarded 1,050,000 stock options to each of Messrs. Blackmon and Verzura and 980,000 stock options to Mr. Ruby under our 2014 Stock Incentive Plan. The options were fully vested at the time of grant and give the option holder the right to purchase shares of our common stock at $0.20 per share during the ten-year term of the option. We calculated the fair value of each option to be approximately $0.20 per option utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 0.20 Exercise price $ 0.20 Risk free interest rate 1.98 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % On February 28, 2018, we awarded 6,000,000 stock options to various employees under our 2017 Stock Incentive Plan. Of these options, 5,125,000 were fully vested at the time of grant with the remaining 875,000 vesting quarterly through December 31, 2019. The awarded options give the option holder the right to purchase shares of our common stock at $1.08 per share during the ten-year term of the option. We calculated the fair value of each option to be approximately $0.91 per option utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 1.05 Exercise price $ 1.08 Risk free interest rate 2.8 % Expected term (years) 5-10 Expected volatility 197 % Expected dividends 0 % The total grant-date fair value of these options was approximately $6,146,000. Stock-based compensation expense related to these stock options included in operating expenses for the twelve months ended December 31, 2018 was approximately $5,785,348. On June 29, 2018, we awarded 14,195,000 stock options to various employees under our 2018 Stock Incentive Plan. Of these options, 13,250,000 were fully vested at the time of grant with the remaining 945,000 vesting quarterly through July 1, 2022. The awarded options give the option holder the right to purchase shares of our common stock at $0.705 per share during the ten-year term of the option. We calculated the fair value of each option to be approximately $0.59 per option utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 0.705 Exercise price $ 0.705 Risk free interest rate 2.73% - 2.81 % Expected term (years) 5 Expected volatility 427% - 505 % Expected dividends 0 % The total grant-date fair value of these options was approximately $9,711,400. Stock-based compensation expense related to these stock options included in operating expenses for the twelve months ended December 31, 2018 was approximately $9,104,999. The following table summarizes our stock options outstanding as of March 31, 2019 and December 31, 2018, respectively: Number of Weighted Weighted Stock options outstanding at December 31, 2017 6,637,500 8.9 $ 0.28 Issued 20,199,800 9.3 $ 0.57 Exercised — — — Expired — — — Stock options outstanding at December 31, 2018 26,837,300 9.2 $ 0.43 Issued 10,000 5.0 0.43 Exercised — — — Expired — — — Stock options outstanding at March 31, 2019 26,847,300 8.9 $ 0.42 Stock options exercisable at March 31, 2019 25,872,507 8.6 $ 0.42 The total price to exercise all outstanding stock options is $11,055,939. The weighted-average remaining contractual life for stock options outstanding and exercisable at March 31, 2019, is 8.9 years, and the aggregate intrinsic value of options outstanding and exercisable at March 31, 2019 is $0. On July 25, 2018, we repriced the exercise price per share from $1.08 to $0.58 per share for the stock options to purchase 6,000,000 shares of our common stock that were granted on March 28, 2018 and repriced the exercise price per share from $0.705 to $0.58 per share for the stock options to purchase 14,195,000 of our common stock that were granted on June 29, 2018. No adjustment to shared-based compensation in the consolidated financial statements for the three months ended March 31, 2019 was necessary as a result of the repricing of the stock options. On August 17, 2018, we repriced the exercise price per share (i) from $0.70 to $0.43 for per share for stock options to purchase 600,000 shares of our common stock that were granted on January 1, 2015 (ii) from $0.56 to $0.43 for per share for stock options to purchase 2,900,000 shares of our common stock that were granted on January 12, 2016 (iii) from $0.92 to $0.43 for 57,500 per share for stock options to purchase 57,500 shares of our common stock that were granted on July 27, 2017 (iv) from $0.875 to $0.43 per share for stock options to purchase 1,000,000 shares of our common stock that were granted on December 8, 2017 (v) from $0.58 to $0.43 per share for stock options to purchase 6,000,000 shares of our common stock that were granted on March 28, 2018 and (vi) from $0.58 to $0.43 per share for stock options to purchase 14,195,000 of our common stock that were granted on June 29, 2018. No adjustment to shared-based compensation in the consolidated financial statements for the three months ended March 31, 2019 was necessary as a result of the repricing of the stock options. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 17 – SHARE-BASED COMPENSATION Share-based Compensation We recognize share-based compensation expense in cost of revenues, sales and marketing expenses, R&D expenses, general and administrative expenses, and other income and expenses, based on the fair value of common shares issued for services. In addition, we accrue share-based compensation expense for estimated share-based awards earned during the three months ended March 31, 2019 and 2018, under our 2017 Equity Incentive Plan and our 2018 Equity Incentive Plan. Share-based compensation expense for the three months ended March 31, 2019 and 2018 is, as follows: Three Months Ended March 31, 2019 2018 Common stock issued for services $ 45,010 $ 65,885 Common stock and warrants issued for advisory board fees 34,750 56,043 Common stock issued as compensation to employees — 42,300 Stock options issued to officers and directors and employees 101,788 5,324,754 $ 181,548 $ 5,488,982 |
SIGNIFICANT CUSTOMER INFORMATIO
SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY | 3 Months Ended |
Mar. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY | NOTE 18 – SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY The following tables show significant concentrations in our revenues and accounts receivable for the periods indicated: Percentage of Revenue: Three Months Ended March 31, 2019 2018 Customer A 36% 98% Customer B 16% 2% Customer C 11% — % Percentage of Accounts Receivable: March 31, 2019 December 31, 2018 Customer A —% 98% Customer B —% 2% Customer C —% —% The following tables show significant concentrations in our expenses and accounts payable for the periods indicated: Percentage of Expenses: Three Months Ended March 31, 2019 2018 Vendor A 21% 26% Vendor B 6% 21% Vendor C 5% 14% Percentage of Accounts Payable: March 31, 2019 December 31, 2018 Vendor A 65% 25% Vendor B 12% 22% Vendor C 6% 7% |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 19 – COMMITMENTS AND CONTINGENCIES Contractual Obligations and Commercial Commitments Clinical Trial Funding Commitment On August 3, 2018, the University of Florida received approval of an Investigational New Drug (“IND”) application from the Department of Health and Human Services’ Food and Drug Administration for a clinical investigation for breast cancer of our 65% owned subsidiary, Prana Therapeutics, Inc.’s licensed flagship product, Epidiferphane™ (EDP™). We have committed to spend approximately $300,000 during 2019 and 2020 to fund phase I and phase II clinical trials in connection with the IND approval. Clinical Trial Agreement Under the terms of an agreement dated November 11, 2017, we committed to pay the costs to perform clinical trials with The University of the West Indies through the Topical Metabolism Research Unit of the Caribbean Institute for Health Research located in Kingston, Jamaica. The clinical trial was completed in February 2019, and thus, a final instalment of $51,182 is due and payable to the University of West Indies. We have agreed to reimburse The University of the West Indies for care and treatment of patients suffering adverse reactions or injury sustained by a patient, as a direct result of the clinical trial. Research Laboratory Prana Therapeutics, Inc., our 95% owned subsidiary (“PTI”), utilizes laboratory facilities at the University of Florida School of Medicine for research purposes. PTI is negotiating a research agreement with University of Florida Trustees for 2019 and 2020 for the continued use of the laboratory facilities. Under the terms of the draft research agreement, PTI would pay UFT $700,000 in 2019 and $900,000 in 2020 in varying quarterly installments, beginning in June 2019. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 20 – SUBSEQUENT EVENTS On April 15, 2019, the Note dated March 16, 2019 that we issued to an unaffiliated third party in the amount of $516,000, which we used for the purchase industrial hemp biomass, was increased to $1,000,000, including original issue discounts of $379,000. Additional net proceeds from the increase in the note in the amount of $234,000 were used to purchase industrial hemp biomass. At a meeting of the shareholders of the Company on May 15, 2019, the authorized shares of common stock of the Company were increased from 100,000,000 shares to 200,000,000 shares. In accordance with ASC 855-10 we have analyzed our operations subsequent to March 31, 2019 to the date these consolidated financial statements were issued, and have determined that, other than as disclosed above, we do not have any material subsequent events to disclose in these consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation At March 31, 2017, we concluded that we had established a variable interest entity relationship with CRD, because we are the primary beneficiary, in accordance with U.S. GAAP. As a result, we elected to consolidate CRD beginning March 31, 2017. |
Use of Estimates | Use of Estimates We make our estimate of the ultimate outcome for these items based on historical trends and other information available when our consolidated financial statements are prepared. We recognize changes in estimates in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Our actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Level 1 Level 2 Level 3 The carrying amount of our cash and cash equivalents, accounts receivable, accounts payable, and other current assets and liabilities in our consolidated financial statements approximates fair value because of the short-term nature of the instruments. Investments in non-marketable equity securities are carried at cost less other-than-temporary impairments. The carrying amount of our notes payable and convertible debt at March 31, 2019, approximates their fair values based on our incremental borrowing rates. There have been no changes in Level 1, Level 2, and Level 3 categorizations and no changes in valuation techniques for these assets or liabilities for the three months ended March 31, 2019 and 2018. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Accounts Receivable, Net | Accounts Receivable, Net |
Inventory | Inventory – |
Property, Plant and Equipment, net | Property, Plant and Equipment, net |
Operating Lease Right of Use Asset and Liability | Operating Lease Right of Use Asset and Liability - |
Granted Patents, Net | Granted Patents, Net – |
Intangible Assets | Intangible Assets – |
Long-Lived Assets Impairment Assessment | Long-Lived Assets Impairment Assessment We have not recorded any impairment charges related to long-lived assets as of March 31, 2019 or December 31, 2018. |
Goodwill | Goodwill fl |
Deferred Revenue | Deferred Revenue |
Revenue Recognition | Revenue Recognition Revenue from Contracts with Customers Revenue Recognition – Affiliate Prana Prana Prana Prana Prana Revenue from Contracts with Customers. We have licensed Prana Hemp Prana Hemp Prana Hemp Prana Hemp Prana Hemp Revenue from Contracts with Customers. |
Cost of Revenues | Cost of Revenues |
Research and Development Expenses | Research and Development Expenses |
General and Administrative Expenses | General and Administrative Expenses |
Stock-Based Compensation | Stock-Based Compensation Equity We account for stock option grants issued and vesting to employees based on ASC 718, Compensation – Stock Compensation |
Income Taxes | Income Taxes We follow the provisions of ASC 740, Income Taxes When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in our consolidated financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits, if any, are classified as interest expense and penalties and are included in selling, general and administrative expenses in our consolidated statements of operations. On December 22, 2017, the U.S. Tax Cuts and Jobs Act was enacted. U.S. tax reform introduced many changes, including lowering the U.S. corporate tax rate to 21 percent, changes in incentives, provisions to prevent U.S. base erosion and significant changes in the taxation of international income, including provisions which allow for the repatriation of foreign earnings without U.S. tax. The enactment of U.S. tax reform had no impact on our income taxes for the three months ended March 31, 2019 or 2018, respectively. |
Commitments and Contingencies | Commitments and Contingencies – Certain conditions may exist as of the date our consolidated financial statements are issued, which may result in a loss but which will only be resolved when one or more future events occur or fail to occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of the legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. |
Net Loss Per Share | Net Loss Per Share Earnings per Share Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive. Three Months Ended March 31, 2019 2018 Warrants to purchase common stock 1,334,035 1,209,025 Stock options 26,837,300 6,637,500 28,171,335 7,846,525 |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) |
Concentration of Credit Risk | Concentration of Credit Risk |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements |
Reclassification | Reclassification |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of potentially dilutive securities that have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive | Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive. Three Months Ended March 31, 2019 2018 Warrants to purchase common stock 1,334,035 1,209,025 Stock options 26,837,300 6,637,500 28,171,335 7,846,525 |
DUE FROM RELATED PARTIES (Table
DUE FROM RELATED PARTIES (Table) | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Amounts Due From Related Parties | Amounts due (to) from related parties include the following: March 31, 2019 December 31, 2018 Advesa, Inc. $ (17,735 ) $ 42,349 NutriMed, LLC 64,081 44,622 $ 46,346 $ 86,971 |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of Operating Leases | Future minimum payments for these leases are: For the twelve Months Ending March 31, 2020 2021 2022 2023 2024 $314,453 $279,191 $253,163 $113,821 $1 |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | At March 31, 2019 and December 31, 2018, our inventory was, as follows: March 31, 2019 December 31, 2018 Raw materials $ 577,635 $ 1,813,880 Work-in-process 630,464 666,845 Finished goods 193,187 71,393 $ 1,401,286 $ 2,552,118 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment, Net [Abstract] | |
Schedule of Property and Equipment | NOTE 7 – PROPERTY, PLANT AND EQUIPMENT, NET March 31, 2019 December 31, 2018 Cost of construction in process - extraction facility Mead, Colorado extraction facility Equipment and leasehold improvements $ 1,780,392 $ 1,743,223 Jamaica cultivation and extraction facility: Leasehold improvements - laboratory 75,000 75,000 Leasehold improvements - cultivation 110,699 118,964 $ 1,966,091 $ 1,937,187 March 31, 2019 December 31, 2018 Extraction facility, laboratory equipment, and office furniture and fixtures Weldona extraction facility Equipment and machinery $ 1,352,072 $ 1,269,734 Furniture and fixtures 76,399 64,955 Leasehold improvements 239,602 237,581 Transportation equipment 71,487 60,228 Farm Equipment 531,245 531,245 Golden, Colorado administrative offices: Furniture and fixtures 49,282 49,282 Transportation equipment 215,672 200,704 Golden, Colorado industrial hemp laboratory - equipment 39,944 39,944 Remote laboratory equipment 99,220 99,220 2,674,923 2,552,893 Accumulated amortization and depreciation (573,608) (433,148 ) $ 2,101,315 $ 2,119,745 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Expenses | |
Schedule of accrued expenses | March 31, 2019 December 31, 2018 Accrued wages and related expenses $ 118,434 $ 126,345 Accrued interest expense 26,555 2,572 Other accrued expenses 44,400 10,186 Total accrued expenses $ 189,389 $ 139,103 |
INSTALLMENT LOANS PAYABLE (Tabl
INSTALLMENT LOANS PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Installment Loans Payable | March 31, 2019 December 31, 2018 Installment Loans Payable $ 51,319 $ 57,799 |
DEFERRED REVENUE (Tables)
DEFERRED REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Revenue Disclosure [Abstract] | |
Schedule of deferred revenue | March 31, 2019 December 31, 2018 Deferred revenue – WeedMD $ — $ 23,750 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Notes Payable [Abstract] | |
Schedule of Promissory Notes Issued | The following table summarizes our notes outstanding as of March 31, 2019 and December 31, 2018: Issue Date Security Maturity Date Interest Rate Draws Under the Note March 31, 2019 December 31, 2018 Note Dated November 7, 2018: 11/05/2018 Unsecured 5/04/2019 5% First Tranche $ 525,000 $ 525,000 12/05/2018 Unsecured 6/03/2019 5% Second Tranche 525,000 525,000 12/26/2018 Unsecured 6/24/2019 5% Third Tranche 525,000 525,000 Note Dated February 11, 2019: 2/11/2019 Unsecured 8/10/2019 5% First Tranche 525,000 — Note Dated March 13, 2019: 3/11/2019 Unsecured 4/13/2019 — — 516,000 — Less unamortized discount (95,350 ) (62,917 ) $ 2,520,650 $ 1,512,083 |
NOTES PAYABLE TO OFFICERS AND_2
NOTES PAYABLE TO OFFICERS AND DIRECTORS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes payable to officers and directors | Notes payable to officers and directors are due on demand and consisted of the following at March 31, 2019 and December 31, 2018: March 31, 2019 December 31, 2018 Note payable to Earnie Blackmon, an officer and director $ 816,176 $ 840,807 Note payable to Tony Verzura, a former officer and former director 169,226 160,247 Note payable to Chad Ruby, an office and director 158,701 154,382 $ 1,144,103 $ 1,155,436 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of share warrants outstanding | The following table summarizes our share warrants outstanding as of March 31, 2019 and December 31, 2018: March 31, 2019 December 31, 2018 Number of Shares Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price Warrants outstanding, beginning of period 1,309,033 $ 0.21 $ 1,209,025 $ 0.21 Warrants issued to consultants 25,002 0.43 100,008 0.89 Cashless warrants issued upon conversion of Slainte note — — — — Warrants exercised — — — — Expired — — — — Warrants outstanding, end of period 1,334,035 0.35 1,309,033 $ 0.27 Warrants exercisable, end of period 1,334,035 0.35 1,309,033 $ 0.27 |
Summary of stock options outstanding | The following table summarizes our stock options outstanding as of March 31, 2019 and December 31, 2018, respectively: Number of Weighted Weighted Stock options outstanding at December 31, 2017 6,637,500 8.9 $ 0.28 Issued 20,199,800 9.3 $ 0.57 Exercised — — — Expired — — — Stock options outstanding at December 31, 2018 26,837,300 9.2 $ 0.43 Issued 10,000 5.0 0.43 Exercised — — — Expired — — — Stock options outstanding at March 31, 2019 26,847,300 8.9 $ 0.42 Stock options exercisable at March 31, 2019 25,872,507 8.6 $ 0.42 |
Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of assumptions used for valuation utilizing the Black Scholes option pricing model for fair value | We calculated the fair value of each option to be approximately $0.20 per option utilizing the Black Scholes option pricing model and the following assumptions on the date of valuation: Stock price $ 0.20 Exercise price $ 0.20 Risk free interest rate 1.98 % Expected term (years) 10.0 Expected volatility 173 % Expected dividends 0 % We calculated the fair value of each option to be approximately $0.91 per option utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 1.05 Exercise price $ 1.08 Risk free interest rate 2.8 % Expected term (years) 5-10 Expected volatility 197 % Expected dividends 0 % We calculated the fair value of each option to be approximately $0.59 per option utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 0.705 Exercise price $ 0.705 Risk free interest rate 2.73% - 2.81 % Expected term (years) 5 Expected volatility 427% - 505 % Expected dividends 0 % |
Warrants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of assumptions used for valuation utilizing the Black Scholes option pricing model for fair value | 132,669 warrants issued during the year 2017, respectively, were valued utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 0.16 - $2.18 Exercise price $ 0.18 Risk free interest rate 1.01% - 1.37 % Expected term (years) 5 Expected volatility 322% - 504 % Expected dividends 0 % 100,008 warrants issued during the year ended December 31, 2018 were valued utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 0.16 - $2.18 Exercise price $ 0.18 Risk free interest rate 1.01% - 1.37 % Expected term (years) 5 Expected volatility 322% - 504 % Expected dividends 0 % 25,002 warrants issued during the three months ended March 31, 2019 were valued utilizing the Black Scholes option pricing model and the following range of assumptions on the date of valuation: Stock price $ 0.16 - $2.18 Exercise price $ 0.18 Risk free interest rate 1.01% - 1.37 % Expected term (years) 5 Expected volatility 322% - 504 % Expected dividends 0 % |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of share-based compensation expense | Share-based compensation expense for the three months ended March 31, 2019 and 2018 is, as follows: Three Months Ended March 31, 2019 2018 Common stock issued for services $ 45,010 $ 65,885 Common stock and warrants issued for advisory board fees 34,750 56,043 Common stock issued as compensation to employees — 42,300 Stock options issued to officers and directors and employees 101,788 5,324,754 $ 181,548 $ 5,488,982 |
SIGNIFICANT CUSTOMER INFORMAT_2
SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Schedule of significant concentrations risk | The following tables show significant concentrations in our revenues and accounts receivable for the periods indicated: Percentage of Revenue: Three Months Ended March 31, 2019 2018 Customer A 36% 98% Customer B 16% 2% Customer C 11% — % Percentage of Accounts Receivable: March 31, 2019 December 31, 2018 Customer D —% —% Customer E —% —% Customer F —% —% The following tables show significant concentrations in our expenses and accounts payable for the periods indicated: Percentage of Expenses: Three Months Ended March 31, 2019 2018 Vendor A 21% 26% Vendor B 6% 21% Vendor C 5% 14% Percentage of Accounts Payable: March 31, 2019 December 31, 2018 Vendor D 65% 33% Vendor E 12% 26% Vendor F 6% 26% |
BUSINESS ORGANIZATION AND NAT_2
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS (Details) - USD ($) | Jul. 14, 2017 | Mar. 31, 2014 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 26, 2014 |
Amount of payable owed to former officer and director, exchanged for assets sold | $ 15,000 | ||||
Number of common shares issued in exchange for certain intellectual property | 38,690,000 | ||||
Total number of common shares previously outstanding, cancelled during period | 41,690,000 | ||||
Common stock, shares outstanding | 77,681,446 | 77,467,979 | 43,620,000 | ||
Business Development | $ 2,800,000 | ||||
Prana [Member] | |||||
Common shares received in exchange for future consulting services and use of our intellectual property | 5,730,000 | ||||
Fair market value of common stock | $ 5,070,500 | ||||
Closing price per share | $ 0.85 | ||||
Prana [Member] | Subscription Agreement [Member] | |||||
Shares of investment owned | 400,000 | ||||
Investments in non-marketable equity securities | $ 200,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Allowance for doubtful accounts | $ 0 | $ 0 | |
Bad debt expense, included in general and administrative expenses | 0 | $ 0 | |
Goodwill | 4,838,603 | 4,838,603 | |
Adjustment of operating lease right-of-use assets and lease liability | 910,315 | ||
Operating lease right-of-use asset | 833,043 | ||
Present value of remaining minimum lease payments | 910,314 | ||
Contractual lease expense | $ 77,271 | ||
Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 3 years | ||
Estimated useful life | 10 years | ||
Equity Method Investments, Percentage | 50.00% | ||
Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 5 years | ||
Estimated useful life | 15 years | ||
Equity Method Investments, Percentage | 20.00% | ||
Patents [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 15 years | ||
PTI [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Equity Method Investments, Percentage | 95.00% | ||
Goodwill | $ 4,731,729 | ||
CRD [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Equity Method Investments, Percentage | 50.00% | ||
Goodwill | $ 106,874 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of anti-dilutive securities) (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted net loss per share | 28,171,335 | 7,846,525 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted net loss per share | 1,334,035 | 1,209,025 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted net loss per share | 26,837,300 | 6,637,500 |
GOING CONCERN (Details)
GOING CONCERN (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
GOING CONCERN [Abstract] | |||
Net loss | $ 1,872,000 | $ 7,262,010 | |
Net cash used in operating activities | 129,514 | $ 1,651,026 | |
Working capital deficit | 4,079,391 | ||
Accumulated deficit | $ 41,200,246 | $ 39,374,397 |
DUE FROM RELATED PARTIES (Narra
DUE FROM RELATED PARTIES (Narrative) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Advesa, Inc. [Member] | ||
Related Party Transaction [Line Items] | ||
Sales to related parties | $ 64,150 | $ 14,861 |
NutriMed, LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Sales to related parties | $ 64,150 | $ 14,861 |
DUE FROM RELATED PARTIES (Sched
DUE FROM RELATED PARTIES (Schedule of Amounts Due from Related Parties) (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | ||
Total due to related parties | $ (1,143,103) | $ (1,155,436) |
Total from related parties | 46,346 | 86,971 |
Advesa, Inc. [Member] | ||
Related Party Transaction [Line Items] | ||
Total due to related parties | (17,735) | |
Total from related parties | 42,349 | |
NutriMed, LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Total from related parties | $ 64,081 | $ 44,622 |
OPERATING LEASES (Narrative) (D
OPERATING LEASES (Narrative) (Details) | Nov. 01, 2018ft² | Aug. 15, 2018USD ($)ft² | Oct. 01, 2017USD ($)ft² | Aug. 01, 2017USD ($)ft² | Dec. 31, 2020USD ($) | Oct. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Oct. 31, 2019USD ($) | Mar. 31, 2019USD ($)a | Dec. 31, 2018USD ($) |
CRD [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Equity Method Investments, Percentage | 50.00% | |||||||||
Lease amount from father of directors and members | $ 1 | |||||||||
Industrial Hemp Laboratory - Golden, Colorado [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Area of leased space | ft² | 9,882 | |||||||||
Maturity date | Jul. 31, 2020 | |||||||||
Basic rent per month | $ 3,302 | $ 3,302 | ||||||||
Industrial Hemp Laboratory - Golden, Colorado [Member] | Subsequent Event [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Basic rent per month | $ 3,800 | $ 3,500 | ||||||||
Colorado Extraction Facility [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Area of leased space | ft² | 14,300 | 40,000 | ||||||||
Maturity date | Aug. 31, 2019 | Sep. 30, 2018 | ||||||||
Basic rent per month | $ 12,596 | $ 7,500 | ||||||||
Security deposit | $ 75,000 | |||||||||
Colorado Testing Lab [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Area of leased space | ft² | 2,100 | |||||||||
Maturity date | Oct. 31, 2020 | |||||||||
Colorado Testing Lab [Member] | Subsequent Event [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Basic rent per month | $ 2,226 | $ 2,161 | ||||||||
Jamaica Cultivation and Extraction Facility [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Area of leased space | a | 28 |
OPERATING LEASES (Schedule of F
OPERATING LEASES (Schedule of Future Minimum Payament) (Details) | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 314,453 |
2021 | 279,191 |
2022 | 253,163 |
2023 | 113,821 |
2024 | $ 1 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 577,635 | $ 1,813,880 |
Work-in-process | 630,464 | 666,845 |
Finished goods | 193,187 | 71,393 |
Inventory | $ 1,401,286 | $ 2,552,118 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Narrative) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation and amortization | $ 142,239 | $ 53,946 |
Property, Plant and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation and amortization | $ 140,460 | $ 91,524 |
PROPERTY, PLANT AND EQUIPMENT_4
PROPERTY, PLANT AND EQUIPMENT, NET (Schedule of Property and Equipment) (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Cost of construction in process - extraction facility | $ 1,966,091 | $ 1,937,187 |
Extraction facility, laboratory equipment, and office furniture and fixtures | 2,674,923 | 2,552,893 |
Accumulated amortization and depreciation | (573,608) | (433,148) |
Cultivation facility and laboratory equipment and Office furniture and fixtures | 2,101,315 | 2,119,745 |
Equipment [Member] | Mead, Colorado Extraction Facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost of construction in process - extraction facility | 1,780,392 | 1,743,223 |
Leasehold Improvements - Laboratory [Member] | Jamaica Cultivation and Extraction Facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost of construction in process - extraction facility | 75,000 | 75,000 |
Leasehold Improvements - Cultivation [Member] | Jamaica Cultivation and Extraction Facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost of construction in process - extraction facility | 110,699 | 118,964 |
Equipment and machinery [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 1,352,072 | 1,269,734 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 76,399 | 64,955 |
Furniture and Fixtures [Member] | Colorado Administrative Offices [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 49,282 | 49,282 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 239,602 | 237,581 |
Transportation Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 71,487 | 60,228 |
Transportation Equipment [Member] | Colorado Extraction Facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 215,672 | 200,704 |
Farm Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 531,245 | 531,245 |
Golden, Colorado Industrial Hemp Laboratory - Equipment [Member] | Colorado Extraction Facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | 39,944 | 39,944 |
Remote Laboratory Equipment [Member] | Colorado Extraction Facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Extraction facility, laboratory equipment, and office furniture and fixtures | $ 99,220 | $ 99,220 |
GRANTED PATENT (Details)
GRANTED PATENT (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Aug. 15, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Accumulated amortization | $ 11,574 | $ 9,795 | ||
Patents [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful live | 15 years | |||
Amortization expense | $ 1,779 | $ 1,779 | ||
Accumulated amortization | $ 11,574 | $ 9,795 | ||
Research, legal fees | $ 142,317 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Patents [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 15 years |
Design Marks and Trademarks [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 10 years |
ACCRUED EXPENSES (Schedule of c
ACCRUED EXPENSES (Schedule of consolidated balance sheets) (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Accrued Liabilities, Current [Abstract] | ||
Accrued wages and related expenses | $ 118,434 | $ 126,345 |
Accrued interest expense | 26,555 | 2,572 |
Other accrued expenses | 44,400 | 10,186 |
Total accrued expenses | $ 189,389 | $ 139,103 |
INSTALLMENT LOANS PAYABLE (Deta
INSTALLMENT LOANS PAYABLE (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Short-term Debt [Line Items] | ||
Installment Loans Payable | $ 51,319 | $ 57,799 |
Installment One [Member] | ||
Short-term Debt [Line Items] | ||
Installment loan monthly payment | 2,160 | |
Monthly payments being made to pay off loan in six months | $ 6,500 | |
Term period | 36 months | |
36 Month Installment [Member] | ||
Short-term Debt [Line Items] | ||
Installment Loans Payable | $ 51,319 | $ 57,799 |
INSTALLMENT LOANS PAYABLE (Sche
INSTALLMENT LOANS PAYABLE (Schedule of Loans Payable) (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Installment Loans Payable | $ 51,319 | $ 57,799 |
DEFERRED REVENUE (Narrative) (D
DEFERRED REVENUE (Narrative) (Details) - WeedMD RX Inc. (''WMD'') [Member] - USD ($) | Jun. 09, 2014 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2014 |
Deferred Revenue Arrangement [Line Items] | ||||
Common shares received in exchange for future consulting services and use of our intellectual property | 1,187,500 | |||
Warrants received in exchange for future consulting services and use of our intellectual property | 3,000,000 | |||
Fair value of securities recorded as deferred revenue | $ 893,750 | |||
Deferred revenue recognized per month | $ 15,000 | |||
Total deferred revenue recognized | $ 23,750 | $ 45,000 | $ 150,000 |
DEFERRED REVENUE (Schedule of d
DEFERRED REVENUE (Schedule of deferred revenue) (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Deferred Revenue Arrangement [Line Items] | ||
Current portion | $ 23,750 | |
WeedMD RX Inc. (''WMD'') [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue | $ 23,750 |
NOTE PAYABLE (Narrative) (Detai
NOTE PAYABLE (Narrative) (Details) - USD ($) | Feb. 11, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||
Proceeds from notes payable | $ 887,000 | |||
Amortization of debt discount | 121,567 | 16,406 | ||
Interest expense | 29,073 | $ 0 | ||
Accrued expenses | $ 27,349 | $ 2,572 | ||
Percentage of common stock at conversion price | 70.00% | |||
Unaffiliated third party [Member] | ||||
Debt Instrument [Line Items] | ||||
Proceeds from notes payable | $ 516,000 | |||
Tangiers [Member] | ||||
Debt Instrument [Line Items] | ||||
Proceeds from notes payable | $ 1,575,000 | |||
Percentage of common stock per share price | 70.00% | |||
Tangiers [Member] | Transaction One [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable premium percentage | 10.00% | |||
Tangiers [Member] | Transaction Two [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable premium percentage | 20.00% | |||
Tangiers [Member] | Transaction Three [Member] | ||||
Debt Instrument [Line Items] | ||||
Notes payable premium percentage | 30.00% |
NOTES PAYABLE (Schedule of Conv
NOTES PAYABLE (Schedule of Convertible Promissory Notes Issued) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Less unamortized discount | $ (95,350) | $ (62,917) |
Total of outstanding amount | $ 2,520,650 | 1,512,083 |
2019 Convertible Notes [Member] | ||
Issue Date | Mar. 11, 2019 | |
Security | Unsecured | |
Maturity Date | Apr. 13, 2019 | |
Interest Rate | 5.00% | |
Total principal outstanding | $ 516,000 | |
First Tranche [Member] | 2018 Convertible Notes [Member] | ||
Issue Date | Nov. 5, 2018 | |
Security | Unsecured | |
Maturity Date | May 4, 2019 | |
Interest Rate | 5.00% | |
Total principal outstanding | $ 525,000 | 525,000 |
First Tranche [Member] | 2019 Convertible Notes [Member] | ||
Issue Date | Feb. 11, 2019 | |
Security | Unsecured | |
Maturity Date | Aug. 10, 2019 | |
Interest Rate | 5.00% | |
Total principal outstanding | $ 525,000 | |
Second Tranche [Member] | 2018 Convertible Notes [Member] | ||
Issue Date | Dec. 5, 2018 | |
Security | Unsecured | |
Maturity Date | Jun. 3, 2019 | |
Interest Rate | 5.00% | |
Total principal outstanding | $ 525,000 | 525,000 |
Third Tranche [Member] | 2018 Convertible Notes [Member] | ||
Issue Date | Dec. 26, 2018 | |
Security | Unsecured | |
Maturity Date | Jun. 24, 2019 | |
Interest Rate | 5.00% | |
Total principal outstanding | $ 525,000 | $ 525,000 |
NOTES PAYABLE TO OFFICERS AND_3
NOTES PAYABLE TO OFFICERS AND DIRECTORS (Narrative) (Details) - USD ($) | 3 Months Ended | ||||||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Jul. 02, 2018 | Dec. 30, 2016 | Apr. 06, 2016 | Oct. 12, 2015 | |
Related Party Transaction [Line Items] | |||||||
Notes payable | $ 310,408 | ||||||
Interest expense | 29,073 | $ 0 | |||||
Officer and Director [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Interest expense | 38,767 | 8,498 | |||||
Interest on notes payables | 147,963 | $ 109,196 | |||||
Accrued wages payable to officers and directors [Member] | Notes Payable Other Payables [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Convertible note payable, related party | 1,144,103 | $ 1,155,436 | |||||
Earnie Blackmon [Member] | Notes Payable Other Payables [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Convertible note payable, related party | 816,176 | 840,807 | |||||
Tony Verzura [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt instrument, face amount | $ 25,000 | ||||||
Tony Verzura [Member] | Notes Payable Other Payables [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Convertible note payable, related party | 169,226 | 160,247 | |||||
Chadwick Ruby [Member] | Notes Payable Other Payables [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Convertible note payable, related party | $ 158,701 | $ 154,382 | |||||
Ernest Blackmon [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt instrument, face amount | $ 25,000 | ||||||
Debt instrument, interest rate | 15.00% | ||||||
JSJ Investments Inc. [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Convertible note payable, related party | $ 102,000 | ||||||
Debt instrument, interest rate | 12.00% | ||||||
Messrs. Verzura and Ruby [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt instrument, interest rate | 12.50% |
ARBITRATION AND LITIGATION RE_2
ARBITRATION AND LITIGATION RESERVE (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Loss Contingency [Abstract] | ||
Arbitration settlement reserve | $ 650,000 | $ 650,000 |
Proceeds from proposed joint venture that was never formed | 650,000 | |
Amount of refund | 650,000 | |
Lawsuit damages claims | $ 16,500,000 |
STOCKHOLDERS' EQUITY (Equity Tr
STOCKHOLDERS' EQUITY (Equity Transactions Narrative) (Details) - USD ($) | Mar. 11, 2019 | Dec. 31, 2018 | Aug. 31, 2018 | Aug. 20, 2018 | Feb. 14, 2018 | Mar. 21, 2019 | Mar. 20, 2019 | Jul. 18, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Class of Stock [Line Items] | ||||||||||||
Proceeds from shares issued | $ 23,530 | $ 76,798 | ||||||||||
Aggregate intrinsic value of warrants outstanding and exercisable | $ 0 | $ 0 | $ 0 | |||||||||
Warrant issued | 25,002 | 100,008 | ||||||||||
Proceeds from issuance of common stock | $ 20,000 | 57,083 | ||||||||||
Stock issued during period for services | 34,751 | 56,043 | ||||||||||
General and administrative | $ 1,655,751 | $ 1,002,796 | ||||||||||
Tony Verzura [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Cancellation of preferred stock. shares | 500 | |||||||||||
Warrants [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Warrant issued | 25,002 | 100,008 | 132,669 | |||||||||
Weighted-average remaining contractual life, outstanding | 2 years 11 months 8 days | 3 years | ||||||||||
Weighted-average remaining contractual life, exercisable | 2 years 11 months 8 days | 3 years | ||||||||||
Preferred Class A [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Preferred stock dividend per share | $ 0.05 | |||||||||||
Preferred Stock, Voting Rights | Each preferred share is entitled to 15,000 votes on all matters submitted to the vote of our shareholders, is entitled to an annual dividend of $0.05 per share when, as, and if declared by our directors, and is convertible at any time, at the option of the holder of the preferred shares, into one share of our common stock. | |||||||||||
Preferred Class A [Member] | Officer and Director [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Proceeds from shares issued | $ 2,200 | |||||||||||
Number of shares issued during period | 2,000 | |||||||||||
Common Stock [Member] | Accredited Investor [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Stock issued during period | $ 62,750 | $ 13,249 | $ 76,798 | |||||||||
Number of shares issued during period | 52,288 | 100,000 | 27,359 | 65,440 | ||||||||
Proceeds from issuance of common stock | $ 20,000 | $ 51,500 | $ 10,000 | $ 57,083 | ||||||||
Loss recognized on issuance of common stock | $ 62,750 | $ 13,249 | $ 76,798 | |||||||||
Common Stock [Member] | Employees [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Stock issued during period for services | $ 75,700 | |||||||||||
Number of shares issued for services during period | 251,497 | |||||||||||
General and administrative | $ 75,700 | |||||||||||
Common Stock [Member] | Marketing Services [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Stock issued during period | $ 6,580 | |||||||||||
Number of shares issued during period | 15,000 | |||||||||||
Stock issued during period for services | $ 36,156 | |||||||||||
Number of shares issued for services during period | 50,000 | |||||||||||
Common Stock [Member] | Legal Services [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Stock issued during period | $ 38,430 | |||||||||||
Number of shares issued during period | 90,000 | |||||||||||
Stock issued during period for services | $ 223,996 | |||||||||||
Number of shares issued for services during period | 310,000 | |||||||||||
Common Stock [Member] | Employee Compensation [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Stock issued during period for services | $ 96,000 | $ 297,400 | ||||||||||
Number of shares issued for services during period | 147,227 | 363,163 | ||||||||||
General and administrative | $ 96,000 |
STOCKHOLDERS' EQUITY (Common St
STOCKHOLDERS' EQUITY (Common Stock Issued For Services, Warrants) (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Number of Shares | ||
Warrants outstanding, beginning of period | 1,309,033 | 1,209,025 |
Warrants issued to consultants | 25,002 | 100,008 |
Cashless issued upon conversion of Slainte note | ||
Warrants exercised | ||
Expired | ||
Warrants outstanding, end of period | 1,334,035 | 1,309,033 |
Warrants exercisable, end of period | 1,334,035 | 1,309,033 |
Weighted Average Exercise Price | ||
Warrants outstanding, beginning of period (in dollars per share) | $ 0.27 | $ 0.21 |
Warrants issued to consultants (in dollars per share) | 0.43 | 0.89 |
Cashless issued upon conversion of Slainte note | ||
Warrants Exercised (in dollars per share) | ||
Expired (in dollars per share) | ||
Warrants outstanding, end of period (in dollars per share) | 0.35 | 0.27 |
Warrants exercisable, end of period (in dollars per share) | $ 0.35 | $ 0.27 |
STOCKHOLDERS' EQUITY (Schedule
STOCKHOLDERS' EQUITY (Schedule of Assumptions on Date of Valuation Utilizing for Fair Value of Warrants) (Details) - $ / shares | Jan. 12, 2016 | Feb. 28, 2018 | Mar. 31, 2019 | Jun. 29, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Warrants [Member] | ||||||
Class of Stock [Line Items] | ||||||
Exercise price (in dollars per share) | $ 0.18 | $ 0.18 | $ 0.18 | |||
Expected term (years) | 5 years | 5 years | 5 years | |||
Expected dividends (as a percent) | 0.00% | 0.00% | 0.00% | |||
Warrants [Member] | Minimum [Member] | ||||||
Class of Stock [Line Items] | ||||||
Stock price (in dollars per share) | $ 0.16 | $ 0.16 | $ 0.16 | |||
Risk free interest rate (as a percent) | 1.01% | 1.01% | 1.01% | |||
Expected volatility (as a percent) | 322.00% | 322.00% | 322.00% | |||
Warrants [Member] | Maximum [Member] | ||||||
Class of Stock [Line Items] | ||||||
Stock price (in dollars per share) | $ 2.18 | $ 2.18 | $ 2.18 | |||
Risk free interest rate (as a percent) | 1.37% | 1.37% | 1.37% | |||
Expected volatility (as a percent) | 504.00% | 504.00% | 504.00% | |||
Stock Options [Member] | ||||||
Class of Stock [Line Items] | ||||||
Stock price (in dollars per share) | $ 0.20 | $ 1.05 | $ 0.705 | |||
Exercise price (in dollars per share) | $ 0.20 | $ 1.08 | $ 0.705 | |||
Risk free interest rate (as a percent) | 1.98% | 2.80% | ||||
Expected term (years) | 10 years | 5 years | ||||
Expected volatility (as a percent) | 173.00% | 197.00% | ||||
Expected dividends (as a percent) | 0.00% | 0.00% | 0.00% | |||
Stock Options [Member] | Minimum [Member] | ||||||
Class of Stock [Line Items] | ||||||
Risk free interest rate (as a percent) | 2.73% | |||||
Expected term (years) | 5 years | |||||
Expected volatility (as a percent) | 427.00% | |||||
Stock Options [Member] | Maximum [Member] | ||||||
Class of Stock [Line Items] | ||||||
Risk free interest rate (as a percent) | 2.81% | |||||
Expected term (years) | 10 years | |||||
Expected volatility (as a percent) | 505.00% |
STOCKHOLDERS' EQUITY (Schedul_2
STOCKHOLDERS' EQUITY (Schedule of stock option activity) (Details) - Stock Options [Member] - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Shares | |||
Stock options outstanding, beginning of period | 26,837,300 | 6,637,500 | 3,680,000 |
Issued | 10,000 | 20,199,800 | |
Exercised | |||
Expired | |||
Stock options outstanding, end of period | 26,847,300 | 26,837,300 | 6,637,500 |
Stock options exercisable, end of period | 25,872,507 | ||
Weighted Average Exercise Price | |||
Stock options outstanding, beginning of period | $ 0.43 | $ 0.28 | $ 0.28 |
Issued | 0.43 | 0.57 | |
Stock options outstanding, end of period | 0.42 | 0.43 | $ 0.28 |
Stock options exercisable, end of period | $ 0.42 | ||
Weighted Average Remaining Life (Years) | |||
Stock options outstanding, beginning of period | 9 years 2 months 12 days | 8 years 10 months 25 days | 8 years 10 months 25 days |
Stock options Issued, end of period | 5 years | 9 years 3 months 19 days | |
Stock options outstanding, end of period | 8 years 10 months 25 days | 9 years 2 months 12 days | |
Stock options exercisable, end of period | 8 years 7 months 6 days |
STOCKHOLDERS' EQUITY (Stock Opt
STOCKHOLDERS' EQUITY (Stock Option Activity Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Aug. 17, 2018 | Jul. 25, 2018 | Jun. 29, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Feb. 28, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 12, 2016 | Jan. 12, 2015 | |
2014 Stock Incentive Plan [Member] | Mr. Ruby [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Awarded stock options | $ 980,000 | |||||||||
Common stock, per share value | $ 0.20 | |||||||||
Stock Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Awarded stock options | $ 1,050,000 | |||||||||
Stock options | 26,847,300 | 26,837,300 | 6,637,500 | 3,680,000 | ||||||
Fair value of options | 9,711,400 | 6,146,000 | ||||||||
Weighted-average remaining contractual life for stock options outstanding and exercisable | 8 years 7 months 6 days | |||||||||
Aggregate intrinsic value of options outstanding and exercisable | $ 0 | |||||||||
Option vested | 5,125,000 | |||||||||
Stock options compensation | $ 9,104,999 | $ 5,785,348 | $ 5,785,348 | |||||||
Total price to exercise all outstanding stock options | $ 11,051,939 | |||||||||
Stock options to purchase common stock | 6,000,000 | |||||||||
Stock Options [Member] | Granted on June 29, 2018 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock options to purchase common stock | 14,195,000 | |||||||||
Stock Options [Member] | Granted on January 1, 2015 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock options to purchase common stock | 600,000 | |||||||||
Stock Options [Member] | Granted on January 12, 2016 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock options to purchase common stock | 2,900,000 | |||||||||
Stock Options [Member] | Granted on July 27, 2017 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock options to purchase common stock | 57,500 | |||||||||
Stock Options [Member] | Granted on December 8, 2017 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock options to purchase common stock | 1,000,000 | |||||||||
Stock Options [Member] | Granted on March 28, 2018 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock options to purchase common stock | 6,000,000 | |||||||||
Stock Options [Member] | Minimum [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Exercise price | $ 1.08 | $ 0.705 | ||||||||
Stock Options [Member] | Minimum [Member] | Granted on June 29, 2018 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Exercise price | $ 0.58 | |||||||||
Stock Options [Member] | Minimum [Member] | Granted on January 1, 2015 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Exercise price | 0.70 | |||||||||
Stock Options [Member] | Minimum [Member] | Granted on January 12, 2016 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Exercise price | 0.56 | |||||||||
Stock Options [Member] | Minimum [Member] | Granted on July 27, 2017 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Exercise price | 0.92 | |||||||||
Stock Options [Member] | Minimum [Member] | Granted on December 8, 2017 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Exercise price | 0.875 | |||||||||
Stock Options [Member] | Minimum [Member] | Granted on March 28, 2018 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Exercise price | 0.58 | |||||||||
Stock Options [Member] | Maximum [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Exercise price | $ 0.58 | $ 0.58 | ||||||||
Stock Options [Member] | Maximum [Member] | Granted on June 29, 2018 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Exercise price | 0.43 | |||||||||
Stock Options [Member] | Maximum [Member] | Granted on January 1, 2015 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Exercise price | 0.43 | |||||||||
Stock Options [Member] | Maximum [Member] | Granted on January 12, 2016 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Exercise price | 0.43 | |||||||||
Stock Options [Member] | Maximum [Member] | Granted on July 27, 2017 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Exercise price | 0.43 | |||||||||
Stock Options [Member] | Maximum [Member] | Granted on December 8, 2017 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Exercise price | 0.43 | |||||||||
Stock Options [Member] | Maximum [Member] | Granted on March 28, 2018 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Exercise price | $ 0.43 | |||||||||
Stock Options [Member] | Vesting through December 31, 2019 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Option vested | 875,000 | |||||||||
Stock Options [Member] | Vesting quarterly through July 1, 2022 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Option vested | 945,000 | |||||||||
Stock Options [Member] | 2017 Equity Incentive Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Awarded stock options | $ 6,000,000 | |||||||||
Stock Options [Member] | 2018 Equity Incentive Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Awarded stock options | $ 14,195,000 | |||||||||
Option vested | 13,250,000 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Common stock issued for services | $ 45,010 | $ 65,885 |
Common stock and warrants issued for advisory board fees | 34,750 | 56,043 |
Common stock issued as compensation to employees | 42,300 | |
Stock options issued to officers and directors and employees | 101,788 | 5,324,754 |
Share-based compensation | $ 181,548 | $ 5,488,982 |
SIGNIFICANT CUSTOMER INFORMAT_3
SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY (Schedule of concentration of risk) (Details) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue [Member] | Customer A [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 36.00% | 98.00% |
Revenue [Member] | Customer B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 16.00% | 2.00% |
Revenue [Member] | Customer C [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 11.00% | |
Accounts Receivable [Member] | Customer A [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 98.00% | |
Accounts Receivable [Member] | Customer B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 2.00% | |
Accounts Receivable [Member] | Customer C [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | ||
Expenses [Member] | Vendor A [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 21.00% | 26.00% |
Expenses [Member] | Vendor B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 6.00% | 21.00% |
Expenses [Member] | Vendor C [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 5.00% | 14.00% |
Accounts Payable [Member] | Vendor A [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 65.00% | 25.00% |
Accounts Payable [Member] | Vendor B [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 12.00% | 22.00% |
Accounts Payable [Member] | Vendor C [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 6.00% | 7.00% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) | Aug. 03, 2018 | Mar. 31, 2020 | Mar. 31, 2019 |
Clinical Trial Agreement [Member] | Final Installment [Member] | |||
Long-term Purchase Commitment [Line Items] | |||
Payment made for clinical trial agreement | $ 51,182 | ||
IND [Member] | |||
Long-term Purchase Commitment [Line Items] | |||
Committed expense | $ 300,000 | ||
PTI [Member] | |||
Long-term Purchase Commitment [Line Items] | |||
Percentage of ownership | 95.00% | ||
Prana [Member] | |||
Long-term Purchase Commitment [Line Items] | |||
Total commitment upon execution of research agreement | $ 700,000 | ||
Prana [Member] | Subsequent Event [Member] | |||
Long-term Purchase Commitment [Line Items] | |||
Total commitment upon execution of research agreement | $ 900,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Apr. 15, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | May 15, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | |||||
Proceeds from note | $ 887,000 | ||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | |||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Common stock, shares authorized | 200,000,000 | ||||
Subsequent Event [Member] | Unaffiliated third party [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt instrument face amount | $ 516,000 | ||||
Proceeds from note | 1,000,000 | ||||
Original amounts of discounts on debt | 379,000 | ||||
Additional proceeds from increase in note | $ 234,000 |