Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Apr. 03, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --12-31 | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 000-54258 | ||
Entity Registrant Name | UNRIVALED BRANDS, INC. | ||
Entity Tax Identification Number | 26-3062661 | ||
Entity Address, Address Line One | 3242 S. Halladay Street | ||
Entity Address, Address Line Two | Suite 202 | ||
Entity Address, City or Town | Santa Ana | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92705 | ||
City Area Code | 888 | ||
Local Phone Number | 909-5564 | ||
Title of 12(b) Security | Common Stock, par value $0.001 | ||
Trading Symbol | UNRV | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 40,934,513 | ||
Entity Common Stock, Shares Outstanding | 693,386,374 | ||
Documents Incorporated by Reference | Documents Incorporated by Reference: None | ||
Entity Central Index Key | 0001451512 | ||
Amendment Flag | false | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Entity Incorporation, State or Country Code | NV |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | Marcum LLP |
Auditor Location | Costa Mesa, California |
Auditor Firm ID | 688 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and Cash Equivalents | $ 1,200 | $ 6,700 |
Accounts Receivable | 313 | 4,013 |
Inventory | 1,939 | 6,180 |
Prepaid Expenses & Other Assets | 498 | 1,215 |
Notes Receivable | 625 | 750 |
Assets Held for Sale | 0 | 6,406 |
Total Current Assets | 4,575 | 25,264 |
Property, Equipment and Leasehold Improvements, Net | 13,000 | 23,164 |
Intangible Assets, Net | 2,859 | 129,637 |
Goodwill | 3,585 | 48,132 |
Other Assets | 16,279 | 26,426 |
Investments | 210 | 164 |
Long-Term Assets Held for Sale | 0 | 19,037 |
TOTAL ASSETS | 40,508 | 271,824 |
Current Liabilities: | ||
Accounts Payable & Accrued Liabilities | 19,410 | 30,238 |
Current Portion of Notes Payable | 29,662 | 45,451 |
Income Taxes Payable | 10,071 | 7,969 |
Liabilities Held for Sale | 0 | 4,050 |
Total Current Liabilities | 59,143 | 87,708 |
Notes Payable, Net of Current Portion and Discounts | 4,814 | 10,006 |
Deferred Tax Liabilities | 0 | 6,123 |
Lease Liabilities | 13,088 | 20,909 |
Long-Term Liabilities Held for Sale | 0 | 591 |
TOTAL LIABILITIES | 77,045 | 125,337 |
COMMITMENTS AND CONTINGENCIES (Note 23) | ||
STOCKHOLDERS’ (DEFICIT) EQUITY: | ||
990,000,000 shares authorized as of December 31, 2022 and 2021; 679,513,556 and 498,546,295 shares outstanding as of December 31, 2022 and 2021, respectively | 701 | 521 |
'Treasury Stock: 2,308,412 shares of common stock as of December 31, 2022 and 2021 | (808) | (808) |
Additional Paid-In Capital | 403,619 | 392,930 |
Accumulated Deficit | (440,049) | (250,015) |
Total Equity Attributable to Stockholders of Unrivaled Brands, Inc. | (36,537) | 142,628 |
Non-Controlling Interest | 0 | 3,859 |
TOTAL STOCKHOLDERS’ (DEFICIT) EQUITY | (36,537) | 146,487 |
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | $ 40,508 | $ 271,824 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 990,000,000 | 990,000,000 |
Common stock, shares, outstanding (in shares) | 679,513,556 | 498,546,295 |
Treasury stock (in shares) | 2,308,412 | 2,308,412 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 52,015 | $ 42,120 |
Cost of Goods Sold | 35,118 | 31,101 |
Gross Profit | 16,897 | 11,019 |
Operating Expenses: | ||
Selling, General & Administrative | 54,156 | 46,314 |
Impairment Loss | 163,698 | 6,171 |
Gain on Disposal of Assets | (7,194) | (3,133) |
Total Operating Expenses | 210,660 | 49,352 |
Loss from Operations | (193,763) | (38,333) |
Other Income (Expense): | ||
Interest Expense, Net | (4,173) | (1,775) |
Gain (Loss) on Extinguishment of Debt | 542 | (5,976) |
Gain on Sale of Investments | 0 | 5,337 |
Unrealized Gain on Investments | 210 | 0 |
Other Income (Expense) | 1,550 | (433) |
Total Other Expense, Net | (1,871) | (2,847) |
Loss from Continuing Operations Before Provision for Income Taxes | (195,634) | (41,180) |
Provision for Income Tax Benefit for Continuing Operations | 2,784 | (885) |
Net Loss from Continuing Operations | (192,850) | (42,065) |
Income from Discontinued Operations Before Provision for Income Taxes | 4,194 | 11,107 |
Provision for Income Tax for Discontinued Operations | 0 | (917) |
Net Income from Discontinued Operations | 4,194 | 10,190 |
NET LOSS | (188,656) | (31,875) |
Less: Net Loss from Continuing Operations Attributable to Non-Controlling Interest | 0 | (604) |
Less: Net Income (Loss) from Discontinued Operations Attributable to Non-Controlling Interest | 275 | 0 |
NET LOSS ATTRIBUTABLE TO UNRIVALED BRANDS, INC. | $ (188,931) | $ (31,271) |
Loss from continuing operations per common share attributable to Unrivaled Brands, Inc. common stockholders – diluted (in dollars per share) | $ (0.33) | $ (0.11) |
Loss from continuing operations per common share attributable to Unrivaled Brands, Inc. common stockholders – basic (in dollars per share) | (0.33) | (0.11) |
Net loss per common share attributable to Unrivaled Brands, Inc. common stockholders – basic (in dollars per share) | (0.32) | (0.08) |
Net loss per common share attributable to Unrivaled Brands, Inc. common stockholders – diluted (in dollars per share) | $ (0.32) | $ (0.08) |
Weighted-Average Number of Common Shares Outstanding – Basic (in shares) | 589,606,153 | 376,625,320 |
Weighted-Average Number of Common Shares Outstanding – Diluted (in shares) | 589,606,153 | 376,625,320 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS (DEFICIT) EQUITY - USD ($) $ in Thousands | Total | Umbrla, Inc. | People’s California | Silverstreak | Cumulative Effect, Period of Adoption, Adjustment | Convertible Series Preferred Stock | Common Stock | Common Stock Umbrla, Inc. | Common Stock People’s California | Common Stock Silverstreak | Treasury Stock | Additional Paid-In Capital | Additional Paid-In Capital Umbrla, Inc. | Additional Paid-In Capital People’s California | Additional Paid-In Capital Silverstreak | Additional Paid-In Capital Cumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment | Non- Controlling Interest |
Beginning balance, preferred stock, shares at Dec. 31, 2020 | 8,000 | ||||||||||||||||||
Beginning balance, shares at Dec. 31, 2020 | 196,512,879,000 | ||||||||||||||||||
Beginning balance, amount at Dec. 31, 2020 | $ 59,130 | $ (12) | $ 218 | $ 275,060 | $ (1,071) | $ (219,803) | $ 1,059 | $ 4,463 | |||||||||||
Beginning balance, treasury stock, amount at Dec. 31, 2020 | $ (808) | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||
Net Loss Attributable to Unrivaled Brands, Inc. | (31,271) | (31,271) | |||||||||||||||||
Debt Conversion - Common Stock (in shares) | 24,939,780,000 | ||||||||||||||||||
Debt Conversion - Common Stock | 5,056 | $ 25 | 5,031 | ||||||||||||||||
Warrants Issued | 5,978 | 5,978 | |||||||||||||||||
Stock Compensation - Employees (in shares) | 250,000,000 | ||||||||||||||||||
Stock Compensation - Employees | 68 | $ 1 | 67 | ||||||||||||||||
Stock Compensation - Directors (in shares) | 1,917,837,000 | ||||||||||||||||||
Stock Compensation - Directors | 495 | $ 2 | 493 | ||||||||||||||||
Stock Compensation - Services Expense (in shares) | 4,556,603,000 | ||||||||||||||||||
Stock Compensation - Services Expense | 1,079 | $ 5 | 1,074 | ||||||||||||||||
Stock Option Exercise (in shares) | 3,381,878,000 | ||||||||||||||||||
Stock Option Exercise | 5 | $ 3 | 2 | ||||||||||||||||
Acquisition and Cancellation of Class A Shares (in shares) | (8,000) | 16,485,714,000 | |||||||||||||||||
Acquisition and Cancellation of Class A Shares | 5,890 | $ 16 | 5,874 | ||||||||||||||||
Stock Issued for Cash (in shares) | 9,677,419,000 | ||||||||||||||||||
Stock Issued for Cash | $ 3,756 | $ 10 | 3,746 | ||||||||||||||||
Stock Issued for Acquisition (in shares) | 191,772,781,000 | 40,000,000,000 | 9,051,412,000 | ||||||||||||||||
Stock Issued for Acquisition | $ 79,822 | $ 12,180 | $ 2,500 | $ 192 | $ 40 | $ 9 | $ 79,630 | $ 12,140 | $ 2,491 | ||||||||||
Stock Issued for Purchase Options (in shares) | 3,910,805 | ||||||||||||||||||
Stock Option Expense | $ 2,415 | 2,415 | |||||||||||||||||
Net Loss Attributable to Non-Controlling Interest | (604) | (604) | |||||||||||||||||
Less: Net Income (Loss) from Discontinued Operations Attributable to Non-Controlling Interest | 0 | ||||||||||||||||||
Ending balance, preferred stock, shares at Dec. 31, 2021 | 0 | ||||||||||||||||||
Ending balance, shares at Dec. 31, 2021 | 498,546,303,000 | ||||||||||||||||||
Ending balance, amount at Dec. 31, 2021 | 146,487 | $ 521 | 392,930 | (250,015) | 3,859 | ||||||||||||||
Ending balance, treasury stock, amount at Dec. 31, 2021 | (808) | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||
Net Loss Attributable to Unrivaled Brands, Inc. | (188,931) | (188,931) | |||||||||||||||||
Debt Conversion - Common Stock (in shares) | 294,452,000 | ||||||||||||||||||
Debt Conversion - Common Stock | $ 75 | 75 | |||||||||||||||||
Cashless Warrants Exercise (in shares) | 4,759,708,000 | 4,759,708,000 | |||||||||||||||||
Warrants Issued | $ 0 | $ 5 | (5) | ||||||||||||||||
Stock Compensation - Employees (in shares) | 2,100,000,000 | 2,350,000,000 | |||||||||||||||||
Stock Compensation - Employees | $ 352 | $ 2 | 350 | ||||||||||||||||
Stock Compensation - Directors (in shares) | 943,128,000 | 943,128,000 | |||||||||||||||||
Stock Compensation - Directors | $ 213 | $ 1 | 212 | ||||||||||||||||
Stock Compensation - Services Expense (in shares) | 16,906,230,000 | 16,906,230,000 | |||||||||||||||||
Stock Compensation - Services Expense | $ 695 | $ 17 | 678 | ||||||||||||||||
Stock Option Exercise (in shares) | 146,212,000 | 146,212,000 | |||||||||||||||||
Stock Issued for Cash (in shares) | 25,000,000,000 | 25,000,000,000 | |||||||||||||||||
Stock Issued for Cash | $ 4,375 | $ 25 | 4,350 | ||||||||||||||||
Stock Issued for Acquisition (in shares) | 23,424,674,000 | 23,424,674,000 | |||||||||||||||||
Stock Issued for Acquisition | $ 0 | $ 23 | (23) | ||||||||||||||||
Stock Issued for Purchase Options (in shares) | 146,212 | ||||||||||||||||||
Stock Issued for Purchase Options | $ 1,500 | $ 107 | 1,393 | ||||||||||||||||
Stock Option Expense | 3,659 | 3,659 | |||||||||||||||||
Disposition of Non-Controlling Interest | (5,237) | (1,103) | (4,134) | ||||||||||||||||
Net Loss Attributable to Non-Controlling Interest | 0 | ||||||||||||||||||
Less: Net Income (Loss) from Discontinued Operations Attributable to Non-Controlling Interest | 275 | 275 | |||||||||||||||||
Ending balance, preferred stock, shares at Dec. 31, 2022 | 8,000 | ||||||||||||||||||
Ending balance, shares at Dec. 31, 2022 | 679,513,564,000 | ||||||||||||||||||
Ending balance, amount at Dec. 31, 2022 | $ (36,537) | $ 701 | $ 403,619 | $ (440,049) | $ 0 | ||||||||||||||
Ending balance, treasury stock, amount at Dec. 31, 2022 | $ (808) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Loss | $ (188,656) | $ (31,875) |
Less: Net Income from Discontinued Operations | 4,194 | 10,190 |
Net Loss from Continuing Operations | (192,850) | (42,065) |
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||
Deferred Income Tax (Benefit) Expense | (6,123) | 835 |
Bad Debt Expense (Recovery) | 2,560 | (3,097) |
(Gain) from Debt Forgiveness | 0 | (86) |
(Gain) on Sale of Investments | 0 | (5,337) |
(Gain) Loss on Extinguishment of Debt | (542) | 5,976 |
Non-Cash Portion of Severance Expense | 0 | 7,990 |
Non-Cash Interest Expense | 1,326 | 1,977 |
Gain on Disposal of Assets | (7,194) | (3,133) |
Discount on Issuance of Common Stock | 0 | 756 |
Depreciation and Amortization | 11,212 | 6,146 |
Amortization of Operating Lease Right-of-Use Asset | 2,189 | 3,193 |
Stock-Based Compensation | 4,919 | 4,056 |
Unrealized (Gain) on Investments | (210) | 0 |
Impairment Loss | 163,698 | 6,171 |
Accounts Receivable | ||
Accounts Receivable | 1,140 | 3,209 |
Inventory | 4,238 | 1,989 |
Prepaid Expenses and Other Current Assets | 286 | 616 |
Other Assets | (4,819) | (739) |
Accounts Payable and Accrued Expenses | 7,364 | (3,905) |
Operating Lease Liabilities | (3,466) | (1,183) |
Net Cash Used in Operating Activities - Continuing Operations | (6,634) | (15,153) |
Net Cash Used in Operating Activities - Discontinued Operations | (1,200) | (2,806) |
NET CASH USED IN OPERATING ACTIVITIES | (7,834) | (17,959) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of Property and Equipment | (1,922) | (3,970) |
Proceeds from Notes Receivable | 375 | 0 |
Cash Paid for Acquisitions | 0 | (24,397) |
Cash from Acquisitions | 0 | 2,309 |
Proceeds from Sale of Investments | 0 | 39,382 |
Proceeds from Sale of Assets | 450 | 0 |
Net Cash Provided by (Used in) Investing Activities - Continuing Operations | (1,097) | 13,324 |
Net Cash Provided by Investing Activities - Discontinued Operations | 20,709 | 8,350 |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 19,612 | 21,674 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from Issuance of Notes Payable | 0 | 8,500 |
Payments of Debt Principal | (21,650) | (6,774) |
Cash Paid for Debt Issuance Costs | 0 | (228) |
Proceeds from Issuance of Common Stock | 4,375 | 3,005 |
CASH AT END OF PERIOD | (17,275) | 4,503 |
NET CHANGE IN CASH | (5,497) | 8,218 |
Cash at Beginning of Period | 6,700 | 217 |
Cash Reclassed to Discontinued Operations | (3) | (1,735) |
CASH AT END OF PERIOD | 1,200 | 6,700 |
SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITIES: | ||
Cash Paid for Interest | 1,590 | 633 |
SUPPLEMENTAL DISCLOSURE FOR NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Debt Principal and Accrued Interest Converted into Common Stock | 75 | 5,056 |
Promissory Note Issued for Severance | 0 | 2,100 |
Fixed Assets in Accounts Payable | 0 | 100 |
Stock Options Exercised on a Net Share Basis | 0 | 3 |
Non-Cash Acquisition of UMBRLA Inc. | 0 | 79,032 |
Non-Cash Capital Expenditures | 0 | 2,986 |
Non-Cash Acquisition of People's | 0 | 58,749 |
Non-Cash Acquisition of Silverstreak | 0 | 8,500 |
Issuance of Shares for Purchase Options | 1,500 | 0 |
Issuance of UMBRLA Holdback Shares | $ 23 | $ 0 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS Unrivaled Brands, Inc. (the "Company") a cannabis company with operations in retail, production, distribution, and cultivation operations throughout California, with an emphasis on providing the highest quality of medical and adult use cannabis products. From the acquisition of UMBRLA, the Company has multiple cannabis lifestyle brands. The Company is home to Korova, a brand of high potency products across multiple product categories, currently available in California, Oregon, Arizona, and Oklahoma. With the acquisition of People’s First Choice, the Company operates a premier cannabis dispensary in Orange County, California. The Company also owns dispensaries in California which operate as The Spot in Santa Ana, Blüm in Oakland and Blüm in San Leandro. Unrivaled is a holding company with the following subsidiaries: • 121 North Fourth Street, LLC, a Nevada limited liability company ("121 North Fourth") • 620 Dyer LLC, a California corporation (“Dyer”) • 1815 Carnegie LLC, a California limited liability company (“Carnegie”) • Black Oak Gallery, a California corporation (“Black Oak”) • Blüm San Leandro, a California corporation (“Blüm San Leandro”) • Halladay Holding, LLC, a California limited liability company (“Halladay”) • MediFarm, LLC, a Nevada limited liability company (“MediFarm”) • MediFarm I, LLC, a Nevada limited liability company (“MediFarm I”) • OneQor Technologies, Inc., a Delaware corporation ("OneQor") • People's First Choice, LLC, a California limited liability company ("People's") • UMBRLA, Inc., a Nevada corporation ("UMBRLA") Effective July 7, 2021, the Company changed its corporate name from “Terra Tech Corp.” to “Unrivaled Brands, Inc.” in connection with the Company’s acquisition of UMBRLA. References in this document to “the Company”, “Unrivaled”, “we”, “us”, or “our” are intended to mean Unrivaled Brands, Inc., individually, or as the context requires, collectively with its subsidiaries on a consolidated basis. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and with the instructions to U.S. Securities Exchange Commission (“SEC”) Form 10-K and Regulation S-X of the Securities Act of 1933 and reflect the accounts and operations of the Company and those of its subsidiaries in which the Company has a controlling financial interest. In accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, “Consolidation” , the Company consolidates any variable interest entity (“VIE”) of which it is the primary beneficiary. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. ASC 810 requires a variable interest holder to consolidate a VIE if that party has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company does not consolidate a VIE in which it has a majority ownership interest when it is not considered the primary beneficiary. The Company evaluates its relationships with all the VIEs on an ongoing basis to reassess if it continues to be the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial position of the Company as of December 31, 2022 and 2021, and the consolidated results of operations and cash flows for the years ended December 31, 2022 and 2021 have been included. Going Concern The Company has incurred significant losses in prior periods. As of and for the years ended December 31, 2022 and 2021, the Company incurred a pre-tax net loss from continuing operations of $195.63 million and $41.18 million, respectively, and an accumulated deficit of $440.05 million and $250.02 million, respectively. At December 31, 2022, the Company had a consolidated cash balance of $1.20 million. Management expects to experience further net losses in 2023 and in the foreseeable future. The Company has not been able to generate sufficient cash from operating activities to fund its ongoing operations. The Company's future success is dependent upon its ability to achieve profitable operations and generate cash from operating activities. There is no guarantee that the Company will be able to generate enough revenue or raise capital to support its operations. The Company will be required to raise additional funds through public or private financing, additional collaborative relationships or other arrangements until it is able to raise revenues to a point of positive cash flow. The Company is evaluating various options to further reduce its cash requirements to operate at a reduced rate, as well as options to raise additional funds, including obtaining loans and selling common stock. There is no guarantee that it will be able to generate enough revenue or raise capital to support its operations, or if it is able to raise capital, that it will be available to the Company on acceptable terms, on an acceptable schedule, or at all. The issuance of additional securities may result in a significant dilution in the equity interests of the Company's current stockholders. Obtaining loans, assuming these loans would be available, will increase the Company's liabilities and future cash commitments. There is no assurance that the Company will be able to obtain further funds required for its continued operations or that additional financing will be available for use when needed or, if available, that it can be obtained on commercially reasonable terms. If the Company is not able to obtain the additional financing on a timely basis, it will not be able to meet its other obligations as they become due and the Company will be forced to scale down or perhaps even cease its operations. The risks and uncertainties surrounding the Company's ability to continue to raise capital and its limited capital resources raise substantial doubt as to the Company's ability to continue as a going concern for twelve months from the issuance of these financial statements. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. In an effort to achieve liquidity that would be sufficient to meet all of its commitments, the Company has undertaken a number of actions, including minimizing capital expenditures and reducing recurring expenses. However, management believes that even after taking these actions, the Company will not have sufficient liquidity to satisfy all of its future financial obligations. The risks and uncertainties surrounding the ability to raise capital, the limited capital resources, and the weak industry conditions impacting the Company’s business raise substantial doubt as to its ability to continue as a going concern. Non-Controlling Interest Non-controlling interest is shown as a component of stockholders’ equity on the consolidated balance sheets and the share of income (loss) attributable to non-controlling interest is shown as a component of income (loss) in the consolidated statements of operations. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of total net revenue and expenses in the reporting periods. The Company regularly evaluates estimates and assumptions related to allowances for doubtful accounts, sales returns, inventory valuation, stock-based compensation expense, goodwill and purchased intangible asset valuations, investments, deferred income tax asset valuation allowances, uncertain tax positions, and litigation and other loss contingencies. These estimates and assumptions are based on current facts, historical experience and various other factors that the Company believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue, costs and expenses that are not readily apparent from other sources. The actual results the Company experiences may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications did not affect net loss, revenues and stockholders’ equity. See "Note 19 - Discontinued Operations” for further discussion regarding discontinued operations. Trade Receivables The Company extends non-interest bearing trade credit to its customers in the ordinary course of business which is not collateralized. Accounts receivable are shown on the face of the consolidated balance sheets, net of an allowance for doubtful accounts. The Company analyzes the aging of accounts receivable, historical bad debts, customer creditworthiness and current economic trends, in determining the allowance for doubtful accounts. The Company does not accrue interest receivable on past due accounts receivable. The reserve for doubtful accounts was nil and $3.00 million as of December 31, 2022 and 2021, respectively. Inventory Inventory is stated at the lower of cost or net realizable value, with cost being determined on the first-in, first-out (“FIFO”) method of accounting. The Company periodically reviews physical inventory for excess, obsolete, and potentially impaired items and reserves. The reserve estimate for excess and obsolete inventory is based on expected future use. The reserve estimates have historically been consistent with actual experience as evidenced by actual sale or disposal of the goods. Prepaid Expenses and Other Current Assets Prepaid expenses consist of various payments that the Company has made in advance for goods or services to be received in the future. These prepaid expenses include advertising, insurance, and service or other contracts requiring upfront payments. Investments Investments in unconsolidated affiliates are accounted for under the cost or the equity method of accounting, as appropriate. The Company accounts for investments in limited partnerships or limited liability corporations, whereby the Company owns a minimum of 5% of the investee's outstanding voting stock, under the equity method of accounting. These investments are recorded at the amount of the Company’s investment and adjusted each period for the Company’s share of the investee’s income or loss, and dividends paid. As investments accounted for under the cost method do not have readily determinable fair values, the Company only estimates fair value if there are identified events or changes in circumstances that could have a significant adverse effect on the investment’s fair value. Publicly held equity securities are recorded at fair value with unrealized gains or losses resulting from changes in fair value reflected as unrealized gains or losses on equity securities in our consolidated statements of operations. Notes Receivable The Company reviews all outstanding notes receivable for collectability as information becomes available pertaining to the Company’s inability to collect. An allowance for notes receivable is recorded for the likelihood of non-collectability. The Company accrues interest on notes receivable based net realizable value. The allowance for uncollectible notes was nil as of December 31, 2022 and 2021. Property, Equipment and Leasehold Improvements Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The approximate useful lives for depreciation of our property, equipment and leasehold improvements are as follows: Buildings 32 years Furniture and Equipment 3 to 8 years Computer and Software 3 to 5 years Vehicles 5 years Leasehold Improvements Shorter of lease term or economic life Repairs and maintenance expenditures that do not extend the useful lives of related assets are expensed as incurred. Expenditures for major renewals and improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. The Company continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, “Property, Plant, and Equipment” ("ASC 360"). When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. See “Note 7 – Property, Equipment and Leasehold Improvements” for further information. Intangible Assets Intangible assets continue to be subject to amortization, and any impairment is determined in accordance with ASC 360. Intangible assets are stated at historical cost and amortized over their estimated useful lives. The Company uses a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. The approximate useful lives for amortization of our intangible assets are as follows: Customer Relationships 3 to 5 years Trademarks 2 to 8 years Dispensary Licenses 14 years The Company reviews intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, amortizable intangible assets are grouped with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the asset group exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the asset group, the Company will write the carrying value down to the fair value in the period identified. Intangible assets that have indefinite useful lives (e.g. trade names) are tested annually for impairment, or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount of the asset group exceeds its fair value. Goodwill Goodwill is measured as the excess of consideration transferred and the net of the acquisition date fair value of assets acquired, and liabilities assumed in a business acquisition. Goodwill is assigned to the reporting unit, which is the operating segment level or one level below the operating segment. In accordance with ASC 350, “Intangibles—Goodwill and Other,” goodwill and other intangible assets with indefinite lives are no longer subject to amortization but are tested for impairment annually or whenever events or changes in circumstances indicate that the asset might be impaired. The Company reviews the goodwill allocated to each of our reporting units for possible impairment annually as of September 30, and whenever events or changes in circumstances indicate carrying amount may not be recoverable. In the impairment test, the Company measures the recoverability of goodwill by comparing a reporting unit’s carrying amount, including goodwill, to the estimated fair value of the reporting unit. The carrying amount of each reporting unit is determined based upon the assignment of our assets and liabilities, including existing goodwill and other intangible assets, to the identified reporting units. Where an acquisition benefits only one reporting unit, the Company allocates, as of the acquisition date, all goodwill for that acquisition to the reporting unit that will benefit. Where the Company has had an acquisition that benefited more than one reporting unit, the Company has assigned the goodwill to our reporting units as of the acquisition date such that the goodwill assigned to a reporting unit is the excess of the fair value of the acquired business, or portion thereof, to be included in that reporting unit over the fair value of the individual assets acquired and liabilities assumed that are assigned to the reporting unit. If the carrying amount of a reporting unit is in excess of its fair value, the Company recognizes an impairment charge equal to the amount in excess. Business Combinations The Company accounts for its business acquisitions in accordance with ASC 805-10, “ Business Combinations. ” The Company allocates the total cost of the acquisition to the underlying net assets based on their respective estimated fair values. As part of this allocation process, the Company identifies and attributes values and estimated lives to the intangible assets acquired. These determinations involve significant estimates and assumptions regarding multiple, highly subjective variables, including those with respect to future cash flows, discount rates, asset lives, and the use of different valuation models, and therefore require considerable judgment. The Company’s estimates and assumptions are based, in part, on the availability of listed market prices or other transparent market data. These determinations affect the amount of amortization expense recognized in future periods. The Company bases its fair value estimates on assumptions it believes to be reasonable but are inherently uncertain. Assets Held for Sale Assets held for sale represent property, equipment, and leasehold improvements less accumulated depreciation as well as any other assets that are held for sale in conjunction with the sale of a business. The Company records assets held for sale in accordance with ASC 360 at the lower of carrying value or fair value less costs to sell. Fair value is the amount obtainable from the sale of the asset in an arm’s length transaction. The reclassification takes place when the assets are available for immediate sale and the sale is highly probable. These conditions are usually met from the date on which a letter of intent or agreement to sell is ready for signing. Discontinued Operations A component of an entity is identified as operations and cash flows that can be clearly distinguished, operationally and financially, from the rest of the entity. Under ASC Subtopic 205-20, “Presentation of Financial Statements - Discontinued Operations” (“ASC Subtopic 205-20”), a discontinued operation is a component of an entity that either has been disposed of, or is classified as held for sale and represents a strategic shift that has or will have a major effect on the entity’s operations and financial results, or a newly acquired business or nonprofit activity that upon acquisition is classified as held for sale. Discontinued operations are presented separately from continuing operations in the consolidated Statements of Operations and the Consolidated Statements of Cash Flows. See “ Note 19 – Discontinued Operations ”. For long-lived assets or disposals groups that are classified as held for sale but do not meet the criteria for discontinued operations, the assets and liabilities are presented separately on the balance sheet of the initial period in which it is classified as held for sale. Revenue Recognition Revenue from retail dispensaries is recorded at the time customers take possession of the product and recognized net of discounts, promotional adjustments, and returns. The Company collects taxes on certain revenue transactions to be remitted to governmental authorities, which may include sales, excise and local taxes. These taxes are not included in the transaction price and are, therefore, excluded from revenue. Upon purchase, the Company has no further performance obligations and collection is assured as sales are paid for at time of purchase. The Company recognizes revenue from cultivation, manufacturing and distribution product sales when its customers obtain control of the products. This determination is based on the customer specific terms of the arrangement and gives consideration to factors including, but not limited to, whether the customer has an unconditional obligation to pay, whether a time period or event is specified in the arrangement and whether the Company can mandate the return or transfer of the products. Revenue is recorded net of taxes collected from customers that are remitted to governmental authorities with collected taxes recorded as current liabilities until remitted to the relevant government authority. Disaggregation of Revenue Please refer to the consolidated statements of operations and " Note 20 - Segment Information" for discussion on revenue disaggregation by segment. The Company believes this level of disaggregation sufficiently depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Cost of Goods Sold Cost of goods sold includes the costs directly attributable to product sales and includes amounts paid for finished goods, such as flower, edibles, and concentrates, as well as packaging and delivery costs. It also includes the labor and overhead costs incurred in cultivating and producing cannabis flower and cannabis-derived products. Overhead expenses include allocations of rent, administrative salaries, utilities, and related costs. Advertising Expenses The Company expenses advertising costs as incurred in accordance with ASC 720-35, “Other Expenses – Advertising Cost.” Advertising expenses from continuing operations totaled $2.12 million and $1.27 million for the years ended December 31, 2022 and 2021, respectively. Stock-Based Compensation The Company accounts for its stock-based awards in accordance with ASC Subtopic 718-10, “Compensation – Stock Compensation”, which requires fair value measurement on the grant date and recognition of compensation expense for all stock-based payment awards made to employees and directors, including restricted stock awards. For stock options, the Company estimates the fair value using a closed option valuation (Black-Scholes) model. The fair value of restricted stock awards is based upon the quoted market price of the common shares on the date of grant. The fair value is then expensed over the requisite service periods of the awards, net of estimated forfeitures, which is generally the performance period and the related amount is recognized in the consolidated statements of operations. The Black-Scholes option-pricing model requires the input of certain assumptions that require the Company’s judgment, including the expected term and the expected stock price volatility of the underlying stock. The assumptions used in calculating the fair value of stock-based compensation represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change resulting in the use of different assumptions, stock-based compensation expense could be materially different in the future. The Company accounts for forfeitures of stock-based awards as they occur. Income Taxes The provision for income taxes is determined in accordance with ASC 740, “Income Taxes” . The Company files a consolidated United States federal income tax return. The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. At December 31, 2021, we have released the valuation allowance due to net deferred tax liability position. The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50.0% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations. Loss Per Common Share In accordance with the provisions of ASC 260, “Earnings Per Share,” net loss per share is computed by dividing net loss by the weighted-average shares of common stock outstanding during the period. During a loss period, the effect of the potential exercise of stock options, warrants, convertible preferred stock, and convertible debt are not considered in the diluted loss per share calculation since the effect would be anti-dilutive. The results of operations were a net loss for the years ended December 31, 2022 and 2021. Therefore, the basic and diluted weighted-average shares of common stock outstanding were the same for all years presented. Potentially dilutive securities that are not included in the calculation of diluted net loss per share because their effect is anti-dilutive are as follows (in common equivalent shares): Year Ended December 31, 2022 2021 Common stock warrants 80,881,817 30,677,637 Common stock options 52,821,099 88,251,380 133,702,916 118,929,017 Fair Value of Financial Instruments The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 –Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value. The Company has not elected the fair value option for any eligible financial instruments. Recently Adopted Accounting Standard s In May 2021, the FASB issued ASU 2021-04, “Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)” (“ASU 2021-04”), which amends existing guidance for earnings per share (“EPS”) in accordance with Topic 260. ASU 2021-04 is effective for fiscal years beginning after December 15, 2021 and should be applied prospectively on or after the effective date of the amendments. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Standard s In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Subtopic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”), which is intended to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022. This update should be applied prospectively on or after the effective date of the amendments. The Company is currently evaluating the effect of adopting this ASU. In March 2022, the FASB issued ASU 2022-02, “Financial Instruments—Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”), which eliminates the accounting guidance on troubled debt restructurings (TDRs) for creditors and amends the guidance on “vintage disclosures” to require disclosure of current-period gross write-offs by year of origination. The ASU also updates the requirements related to accounting for credit losses under the current guidance and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial difficulty. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022. The Company is currently evaluating the effect of adopting this ASU. In June 2022, the FASB issued ASU 2022-03, "Fair Value Measurements—Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (Topic 820)" . ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. It also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. For public business entities, the ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the effect of adopting this ASU. |
CONCENTRATIONS OF BUSINESS AND
CONCENTRATIONS OF BUSINESS AND CREDIT RISK | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF BUSINESS AND CREDIT RISK | CONCENTRATIONS OF BUSINESS AND CREDIT RISK The Company maintains cash balances in several financial institutions that are insured by either the Federal Deposit Insurance Corporation or the National Credit Union Association up to certain federal limitations. At times, the Company’s cash balance exceeds these federal limitations and it maintains significant cash on hand at certain of its locations. The Company has not historically experienced any material loss from carrying cash on hand. The amount in excess of insured limitations was nil and $5.42 million as of December 31, 2022 and 2021, respectively. The Company provides credit in the normal course of business to its customers. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts based on factors surrounding the credit risk of specific customers, historical trends, and other information. There were no customers that comprised more than 10.0% of the Company's revenue for the years ended December 31, 2022 and 2021. The Company sources cannabis products for retail, cultivation and production from various vendors. However, as a result of the new regulations in the State of California, the Company’s California retail, cultivation and production operations must use vendors licensed by the State effective January 1, 2018. As a result, the Company is dependent upon the licensed vendors in California to supply products as of that date. If the Company is unable to enter into a relationship with sufficient members of properly licensed vendors, the Company’s sales may be impacted. During the years ended December 31, 2022 and 2021, the Company did not have any concentration of vendors for inventory purchases. However, this may change depending on the number of vendors who receive appropriate licenses to operate in the State of California. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Raw materials consist of materials and packaging for manufacturing of products owned by the Company. Work-in-progress consists of cultivation materials and live plants grown at Black Oak Gallery and Hegenberger. Finished goods consists of cannabis products sold in retail and distribution. Inventory as of December 31, 2022 and 2021 consisted of the following: (in thousands) December 31, December 31, Raw Materials $ 524 $ 2,258 Work-In-Progress 284 1,077 Finished Goods 1,131 2,845 Total Inventory $ 1,939 $ 6,180 |
ASSETS HELD FOR SALE
ASSETS HELD FOR SALE | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
ASSETS HELD FOR SALE | ASSETS HELD FOR SALE Assets held for sale consist of those classified as discontinued operations and those that do not meet the criteria for discontinued operations under ASC 205. See “ Note 19 – Discontinued Operations " for further information. In June 2022, the Company closed Blüm San Leandro and began actively marketing the retail location for sale, which is expected to close within the next year. The assets were classified as held for sale as of the quarters ended June 30, 2022 and September 30, 2022 but did not meet the criteria for discontinued operation under ASC Subtopic 205-20. In December 2022, a change to the plan of sale occurred and the Company reopened Blüm San Leandro. Accordingly, the assets were reclassified as held and used as of December 31, 2022. On June 18, 2022, the Company entered into a settlement agreement and transferred 100% of the membership interests in the People's dispensary in Los Angeles, CA wherein all operational control and risk of loss was transferred to the original licenseholder and the Company had no further obligations. As consideration received, a promissory note of $1.40 million with the buyer was forgiven. The Company recognized a loss upon sale of assets of $0.38 million for the difference between the aggregate consideration and the book value of the assets as of the disposition date which is recognized in the consolidated statements of operations during the year ended December 31, 2022. As of June 18 2022, all assets and liabilities related to the dispensary were deconsolidated from the consolidated balance sheet. All profits or losses subsequent to June 18, 2022 are excluded from the consolidated statements of operations. During the fiscal third quarter of 2022, the Company terminated its third-party distribution operations in California and its retail and delivery operations at SilverStreak. In November 2022, the Company received confirmation for the legal dissolution of SilverStreak and the entities related to its distribution operations in the state of California. As a result, all liabilities and existing obligations of the dissolved entities were extinguished. Accordingly, the Company recognized a gain on disposal of assets of $12.69 million during the year ended December 31, 2022 related to the dissolution of entities. See " Note 9 – Goodwill " for additional information. NuLeaf On November 17, 2021, Medifarm III, LLC (“Medifarm III”), a wholly-owned subsidiary of the Company, entered into a Membership Interest Purchase Agreement with NuLeaf, Inc., a Nevada corporation (“NuLeaf”) wherein Medifarm III agreed to sell its fifty percent (50%) of the outstanding membership interests of each of NuLeaf Reno Production, LLC (“NuLeaf Reno”) and NuLeaf Sparks Cultivation, LLC (“NuLeaf Sparks”) to NuLeaf, which owned the remaining fifty percent (50%) of the membership interests of NuLeaf Reno and NuLeaf Sparks, for aggregate consideration of $6.50 million in cash. The transaction closed in April 2022 and the Company recognized a gain of $2.05 million for the difference between the aggregate consideration and the book value of the assets as of the disposition date, less direct costs to sell, for the year ended December 31, 2022. Nevada Dispensaries During fiscal year 2019 and 2020, the Company entered into Asset Purchase Agreements with unrelated third parties to sell substantially all of the assets of the Company related to the Company's dispensaries located at: • 1130 E. Desert Inn Road, Las Vegas, NV 89109; • 1085 S. Virginia St., Suite A, Reno, NV 89502; and • 3650 S. Decatur Blvd., Las Vegas, NV 89103. The dispensaries are collectively referred to as the "Nevada dispensaries". The transactions for the sale of the Nevada dispensaries closed upon receiving all required government approvals during the fourth quarter ended December 31, 2021. The Company recognized an aggregate gain of $12.83 million upon sale of the Nevada dispensaries, equal to the difference between the consideration paid and the book value of the assets as of the disposition date, less direct costs to sell, and reflected such gain in income from discontinued operations for the year ended December 31, 2021. Oregon Operations On December 28, 2022, the Company entered into a Stock Purchase and Sale Agreement pursuant to which the Company sold all of its equity interests in LTRMN, Inc., which conducts cannabis distribution and wholesale activities in Oregon, for an aggregate purchase price of $0.25 million. The purchase price was paid in the form of a secured promissory note at a rate of 8.0% per annum due and payable on the third anniversary of the date of issuance. However, upon a final and binding settlement of certain ongoing litigation that is approved by UMBRLA, the purchase price shall be automatically revised to be $0 and the promissory note shall be deemed paid and satisfied in-full. On December 28, 2022, the Company entered into a Membership Interest Purchase and Sale Agreement pursuant to which the Company sold its 50% equity interests in Psychonaut Oregon, LLC (“Psychonaut”) to Joseph Gerlach for an aggregate purchase price of $1. Mr. Gerlach owns the other 50% of the equity interests in Psychonaut and is also the Company’s Chief Cultivation Officer. In connection with the sale of Psychonaut, the Company entered into an unsecured promissory note dated December 28, 2022 (the “Psychonaut Note”) pursuant to which the Company consolidated all current liabilities due to Mr. Gerlach totaling $0.15 million. The Psychonaut Note accrues interest at a rate of 1.0% per annum and is due and payable on the fifth anniversary of the date of issuance. The Company concluded that the sale of LTRMN, Inc. and Psychonaut Oregon, LLC (together, the "Oregon operations") represented a strategic shift that will have a major effect on the Company’s operations and financial results and thus all assets and liabilities allocable to the operations within the state of Oregon were classified as discontinued operations. The assets associated with the Oregon operations were measured at the lower of their carrying amount or FVLCTS. Revenue and expenses, gains or losses relating to the discontinuation of Oregon operations were eliminated from profit or loss from the Company’s continuing operations and are shown as a single line item in the consolidated statements of operations for all periods presented. The Company recognized a loss upon sale of the Oregon operations of $0.50 million for the net carrying value of the assets as of the disposition date which was determined as the book value less direct costs to sell and is recognized as a component of loss on disposal of assets and other expense in the Consolidated Statements of Operations for Discontinued Operations during the year ended December 31, 2022. As of December 31, 2022, the Oregon operations have been fully deconsolidated by the Company and the Company does not have any continuing involvement with the former subsidiary outside of the Magee litigation disclosed in “Note 23 – Commitments and Contingencies” . Real Estate As of December 31, 2020, the Company classified real property in Las Vegas, NV as available-for-sale, as it met the criteria of ASC 360-10-45-9. On August 9, 2021, the Company sold the property for $2.60 million in cash to 117 Real Estate Holdings LLC. A loss on the sale of the asset of $0.10 million was recorded during the year ended December 31, 2022 and is presented within net income from discontinued operations. As of December 31, 2020, the Company classified real property in Santa Ana, CA as available-for-sale, as it met the criteria of ASC 360-10-45-9. On August 10, 2021, the Company entered into a Stock Purchase Agreement with two individuals, pursuant to which the Company sold all of the share of common stock of its wholly-owned subsidiary, 1815 Carnegie Santa Ana, Corp. (“1815 Carnegie”) to those individuals for aggregate consideration of $1.70 million. 1815 Carnegie holds a permit to operate a cannabis dispensary in the City of Santa Ana, CA. On August 12, 2021, the Company also entered into a Supply agreement with an affiliate of purchasers to obtain a right of first refusal to purchase cannabis bulk and distillate to be integrated into the Company cannabis goods and products, as well as a Retail Space Agreement with 1815 Carnegie, pursuant to which the Company will receive guaranteed placement of 15 SKUs at the cannabis dispensary. Each agreement has a term of three years. The Company recorded a gain on the sale of the asset of $1.70 million during the year ended December 31, 2021, which is presented within net income from discontinued operations. On December 7, 2021, 620 Dyer LLC, a wholly-owned subsidiary of the Company, entered into a Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate (the “PSA”) with FRO III/SMA Acquisitions, LLC (the “Buyer”) to sell the real property located at 620 East Dyer Road, Santa Ana, CA (the “Dyer Property”) for $13.40 million in cash. The real estate asset was classified as available-for-sale as of December 31, 2021. On February 10, 2022, the Company announced the closing of the sale of the Dyer Property, resulting in the Company retiring $9.00 million of outstanding debt on the Dyer Property as disclosed in "Note 13 – Notes Payable" . The Company is continuing to evaluate its options with respect to the license originally connected to the Dyer Property, including consideration of the retail density in the area. If the city of Santa Ana grants approval to relocate licenses elsewhere in the city, the Company may consider using the dispensary license to open a dispensary in an underserved part of Santa Ana. OneQor During fiscal year 2020, management suspended the operations of OneQor Technologies due to (i) a lack of proper growth in customer acquisition and revenue for this CBD operation during the COVID-19 pandemic and (ii) the overall financial health of the Company as a result of COVID-19 and social unrest. The Company plans to focus its attention and resources on growing its THC business. In November 2022, the Company received confirmation for the legal dissolution of OneQor. Accordingly, all liabilities and existing obligations related to OneQor were extinguished, resulting in a gain on disposal of assets of $0.53 million. Edible Garden On March 30, 2020, the Company entered into an Asset Purchase Agreement with Edible Garden AG Inc. (“Edible Garden AG”) pursuant to which the Company sold substantially all of the assets of Edible Garden Corp. The consideration received included (i) a five “Note 6 – Investments” for further information. The completed sales of the NuLeaf operations, Oregon operations, Nevada dispensaries, real estate assets, and assets divested during the years ended December 31, 2022 and 2021 represent a strategic shift that will have a major effect on the Company’s operations and financial results. As a result, management determined the results of these components qualified for discontinued operations presentation in accordance with ASC 205, “Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity.” Operating results for discontinued operations were comprised of the following: (in thousands) Year Ended December 31, December 31, Total Revenues $ 9,257 $ 18,453 Cost of Goods Sold 5,299 12,292 Gross Profit 3,958 6,161 Selling, General and Administrative Expenses 4,532 8,466 Loss (Gain) on Sale of Assets (4,752) (6,583) Income (Loss) from Operations $ 4,178 $ 4,278 Interest Expense (11) (977) Other Income 27 7,806 Income (Loss) from Discontinued Operations Before Provision for Income Taxes $ 4,194 $ 11,107 Provision for Income Tax for Discontinued Operations — (917) Net Income (Loss) from Discontinued Operations, Net of Taxes $ 4,194 $ 10,190 Income (Loss) from Discontinued Operations per Common Share Attributable to Unrivaled Brands, Inc. Common Stockholders - Basic And Diluted $ 0.01 $ 0.03 The carrying amounts of the major classes of assets and liabilities for the discontinued operations are as follows: (in thousands) December 31, Cash $ 1,735 Accounts Receivable, Net 2,216 Inventory 2,358 Prepaid Expenses and Other Assets 98 Property, Equipment and Leasehold Improvements, Net 18,225 Intangible Assets, Net — Goodwill — Other Assets 811 Assets of Discontinued Operations $ 25,443 Accounts Payable and Accrued Expenses $ 2,834 Notes Payable 299 Income Tax Payable 917 Long-Term Lease Liabilities 591 Liabilities of Discontinued Operations $ 4,641 |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Investments [Abstract] | |
INVESTMENTS | INVESTMENTS Hydrofarm On June 16, 2021, the Company completed the disposition of 593,261 shares of common stock of Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM) (“Hydrofarm”) and warrants to purchase 296,630 shares of Hydrofarm common stock at an exercise price of $16.86 per share, for aggregate gross proceeds of $40.76 million in cash pursuant to a Securities Purchase Agreement (the “SPA”) between the Company and two accredited investors. There is no material relationship between the Company or its affiliates and either of the investors other than in respect of the transactions contemplated by the SPA. As of December 31, 2022 and 2021, the Company no longer has an investment in Hydrofarm. Edible Garden On March 30, 2020, Edible Garden Corp., a wholly-owned subsidiary of Company, entered into and closed an Asset Purchase Agreement with Edible Garden Incorporated (the “Purchaser”), pursuant to which the Company sold and the Purchaser purchased substantially all of the assets of Edible Garden (the “Business”). The consideration paid for the Business included two option agreements to purchase up to a 20% interest in the Purchaser for a nominal fee. The first option gives the Company the right to purchase a 10% interest in the Purchaser for one dollar at any time between the one On May 3, 2022, Edible Garden completed a 1-for-5 reverse stock split of its outstanding common stock. As a result, the Company held 1,000,000 shares in Edible Garden. On May 5, 2022, Edible Garden announced the pricing of its initial public offering of 2,930,000 shares of its common stock and accompanying warrants to purchase up to 2,930,000 shares of common stock for an exercise price of $5.00 per share. Each share of common stock was sold together with one warrant at a combined offering price of $5.00, for gross proceeds of approximately $14.70 million. As a result of the initial public offering, the Company reassessed its write down on the investment and recorded a write up to its fair value, which is categorized within the fair value hierarchy as Level 2. In November 2022, the lock-up restriction on the Company's shares in the Purchaser expired and accordingly, the Company's investment transferred from Level 2 to Level 1 fair value measurement. Refer to "Note 21 - Fair Value Measurements" |
PROPERTY EQUIPMENT AND LEASEHOL
PROPERTY EQUIPMENT AND LEASEHOLD IMPROVEMENTS NET | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS Property, equipment, and leasehold improvements as of December 31, 2022 and 2021 consisted of the following: (in thousands) December 31, December 31, Land and Building $ 7,581 $ 7,787 Furniture and Equipment 1,336 3,205 Computer Hardware 299 348 Leasehold Improvements 8,009 14,357 Vehicles 103 1,027 Construction in Progress 2,565 1,832 Subtotal 19,893 28,556 Less Accumulated Depreciation (6,893) (5,392) Property, Equipment and Leasehold Improvements, Net $ 13,000 $ 23,164 Depreciation expense related to continuing operations was $3.59 million and $2.01 million for the years ended December 31, 2022 and 2021, respectively. On January 21, 2022, the Company sold its land in Spanish Springs, Nevada for $0.45 million to an unrelated third party. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS Intangible assets as of December 31, 2022 and 2021 consisted of the following: (in thousands) December 31, 2022 December 31, 2021 Estimated Useful Life Gross Accumulated Amortization Net Gross Accumulated Amortization Net Amortizing Intangible Assets: Customer Relationships 3 to 5 $ 7,400 $ (7,400) $ — $ 7,400 $ (7,400) $ — Trademarks and Patent 2 to 8 4,500 (2,991) 1,509 4,500 (750) 3,750 Operating Licenses 14 12,239 (12,239) — 100,701 (6,864) 93,837 Total Amortizing Intangible Assets 24,139 (22,630) 1,509 112,601 (15,014) 97,587 Non-Amortizing Intangible Assets: Trade Names Indefinite 1,350 — 1,350 32,050 — 32,050 Total Non-Amortizing Intangible Assets 1,350 — 1,350 32,050 — 32,050 Total Intangible Assets, Net $ 25,489 $ (22,630) $ 2,859 $ 144,651 $ (15,014) $ 129,637 Amortization expense related to continuing operations was $7.62 million and $3.39 million for the years ended December 31, 2022 and 2021, respectively. During 2021, the impact of COVID-19 on the retail industry had a negative impact on our revenues and management was forced to limit store operating hours due to the pandemic. Management believes the COVID-19 outbreak will continue to have a material negative impact on the Company’s financial results. These factors, including management’s revised forecast for the future performance of our Black Oak Gallery reporting unit, indicated the carrying value of Black Oak Gallery’s customer relationships and trade name may not be recoverable. Management evaluated the recoverability of the customer relationships using Level 3 inputs and a probability-weighted approach to assess the potential impact of a long-term decline in our existing customer base due to the COVID-19 pandemic. The recoverability test indicated that the book value of customer relationships exceeded fair value. As a result, the Company recognized impairment charges of $0.46 million during the year ended December 31, 2021. During the second quarter of 2022, management noted indicators of impairment of its indefinite-lived assets of certain asset groups. Specifically, changes in circumstances resulted in significant differences in actual revenue compared to projections. The Company used a discount rate under current market conditions to determine a preliminary estimate, noting an impairment of $22.10 million which is included as a component of impairment expense for the three months ended June 30, 2022. In connection with its annual goodwill impairment test on September 30, 2022, the Company noted indicators of impairment of its intangible assets of certain asset groups. Earnings forecast for certain asset groups were revised based on a decrease in anticipated operating profits and cash flows for the next five years as it relates to current market conditions, the economic environment, and delays due to regulatory and licensing issues. The Company used various Level 3 inputs under the market approach to determine the fair value of these asset groups. Accordingly, the Company recorded an impairment loss on intangible assets in the amount of $97.06 million for the three months ended September 2022, which is recorded as a component of impairment expense in the consolidated statements of operations. |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL Changes in the carrying amount of goodwill during the periods presented were as follows: (in thousands) Balance at December 31, 2020 $ 6,171 Acquisitions 48,132 Impairment Losses (6,171) Balance at December 31, 2021 48,132 Impairment Losses (44,547) Balance at December 31, 2022 $ 3,585 The Company conducts its annual goodwill impairment assessment on September 30, and between annual tests if the Company becomes aware of an event or a change in circumstances that would indicate the carrying value may be impaired. For the purpose of the goodwill impairment assessment, the Company has the option to perform a qualitative assessment (commonly referred to as “step zero”) to determine whether further quantitative analysis for impairment of goodwill or indefinite-lived intangible assets is necessary or a quantitative assessment (“step one”). As a result of the annual goodwill impairment test performed as of September 30, 2021 and completed on December 31, 2021, the Company recorded an impairment loss of $6.17 million for the year ended December 31, 2021 which represented the excess of the carrying value of the Black Oak Gallery reporting unit over the estimated fair value based on a discounted cash flow analysis. The impairment recognizes the impact of COVID-19 on the financial performance of Black Oak Gallery's operations, as well as declines in forecasted revenue and earnings. During the second quarter of 2022, the Company identified changes in circumstances that would indicate the carrying value of certain reporting units may be impaired. Management performed a preliminary quantitative assessment using a comparison of actual revenues to projections and applied a current discount rate, which resulted in a goodwill impairment loss of $33.63 million. During the third quarter of 2022, the Company terminated its operations related to SilverStreak and wrote off the carrying amount of the related goodwill in the amount of $10.92 million which is recorded as a component of impairment expense in the consolidated statements of operations. See " Note 5 – Assets Held for Sale " for further information. For the purpose of the annual impairment test on September 30, 2022, the Company performed a quantitative assessment wherein the fair value of each reporting unit was determined using a guideline public company method and guideline transaction method (market approach). Earnings forecast for certain reporting units were revised based on a decrease in anticipated operating profits and cash flows for the next five years as it relates to current market conditions, the economic environment, and delays due to regulatory and licensing issues. The fair value of each reporting unit was estimated using the expected present value of future cash flows. As a result of its assessment, management noted no additional impairment of goodwill for the remaining reporting units as of December 31, 2022. The impairment charges relating to goodwill and other assets are presented in the “Impairment Expense” line in the Consolidated Statements of Operations. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS There were no acquisitions completed during the year ended December 31, 2022. A summary of business combinations completed during the year ended December 31, 2021 is as follows: Year Ended December 31, 2021 UMBRLA, Inc. People's California SilverStreak Solutions Total Cash Consideration $ — $ 24,000 $ 1,500 $ 25,500 Note Payable — 33,749 4,500 38,249 Liability for Holdback Shares 6,465 — — 6,465 Equity Consideration - Common Stock 52,929 16,000 2,500 71,429 Equity Consideration - Options & Warrants 20,428 — — 20,428 Less: Cash Transferred (1,290) (994) (25) (2,309) Total Consideration $ 78,532 $ 72,755 $ 8,475 $ 159,762 Assets Acquired: Accounts Receivable $ 3,772 $ — $ — $ 3,772 Inventory 6,532 662 214 7,408 Prepaid Expenses & Other Assets 1,543 74 6 1,623 Notes Receivable 750 — — 750 Property, Equipment and Leasehold Improvements 1,450 554 257 2,261 Right-of-Use Asset 460 2,105 — 2,565 Intangible Assets 71,890 54,010 161 126,061 Other Long-Term Assets 3 — — 3 Total Assets Acquired 86,400 57,405 638 144,443 Liabilities Assumed: Accounts Payable & Accrued Liabilities 15,849 2,586 1,517 19,952 Lease Liabilities 460 2,105 — 2,565 Notes Payable 5,470 — — 5,470 Deferred Tax Liabilities 499 954 14 1,467 Uncertain Tax Position / Taxes Payable 1,806 — 1,553 3,359 Total Liabilities Assumed 24,084 5,645 3,084 32,813 Estimated Fair Value of Net Assets Acquired 62,316 51,760 (2,446) 111,630 Estimated Goodwill $ 16,216 $ 20,995 $ 10,921 $ 48,132 Pro Forma Net Income (Loss) (1) $ (36,454) Pro Forma Revenues (1) $ 95,867 (1) Supplemental information on an unaudited pro-forma basis is reflected as if the acquisitions had occurred on January 1, 2021, after giving effect to certain pro-forma adjustments primarily related to the amortization of acquired intangible assets. The unaudited pro-forma supplemental information is based on estimates and assumptions that the Company believes are reasonable. The supplemental unaudited pro-forma financial information is presented for comparative purposes only and is not necessarily indicative of what the Company’s financial position or results of operations actually would have been had the Company completed the acquisitions at the dates indicated, nor is it intended to project the future financial position or operating results of the Company as a result of the Purchase Agreement. UMBRLA, Inc. On July 1, 2021, the Company completed the acquisition of UMBRLA, Inc. Pursuant to Articles of Merger filed by the Company with the Nevada Secretary of State, which became effective upon filing on July 1, 2021. UMBRLA became a wholly-owned subsidiary of the Company. The acquisition of UMBRLA was accounted for in accordance with ASC 805-10, “ Business Combinations .” The preliminary allocation of the purchase price was based upon a preliminary valuation, and the Company’s estimates and assumptions of the assets acquired and liabilities assumed were subject to change within the measurement period pending the finalization of a third-party valuation. The multi-period excess earnings method, an income approach, was utilized to estimate the fair value of UMBRLA customer relationships and licenses. The relief-from-royalty method, an income approach, was utilized to estimate the fair value of UMBRLA trade name. Consideration for the merger consisted of 191,772,781 shares of common stock issued on the acquisition date, 23,424,674 shares of common stock reserved for issuance in one year, and the assumption of all of UMBRLA’s stock options and warrants outstanding as of July 1, 2021. For the fiscal year ended December 31, 2021, the Company recognized $21.50 million of revenue and a net loss of $6.88 million from UMBRLA. In the view of management, goodwill reflects the future cash flow expectations for UMBRLA market position in the cannabis industry, synergies and the assembled workforce. Goodwill recorded for the UMBRLA transaction is non-deductible for tax purposes. People’s California On August 15, 2021, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with People’s California, LLC, a California limited liability company (“People’s California”) and People’s First Choice, LLC, a California limited liability company and wholly owned subsidiary of People’s California (the “Target”), which operates cannabis dispensary operations. Upon the terms and subject to the satisfaction of the conditions described in the Purchase Agreement, the Company will acquire 100% of the outstanding equity of the Target in two separate closings (the “Acquisition”), with 80% of the equity of the Target transferred at the first closing and the remaining 20% of the equity transferred at the second closing. At the first closing of the Acquisition, People’s California shall receive from the Company: (a) a cash payment of $24.00 million less certain outstanding indebtedness and transaction expenses related to the Acquisition; (b) a secured note in an aggregate principal amount of $36.00 million less certain indebtedness; and (c) 40,000,000 shares of Company common stock valued at $0.40 per share, subject to terms and conditions of the agreement by and between the Company and People’s California, which includes a one-year lockup of the shares. The Purchase Agreement is subject to customary indemnification provisions. On August 4, 2021, in connection with the Acquisition, People’s California issued senior secured indebtedness to the Company, pursuant to the terms of a certain Secured Promissory Note (the “Deposit Note”). The Deposit Note provided for a one-time advance of $6.00 million (the “Loan”) by the Company to People’s California at a flat rate of 3% per annum. The Deposit Note matures on August 4, 2022. The full principal balance and all outstanding but unpaid interest is due and payable at the maturity date of August 4, 2022; provided that, if the Company consummates the first closing, pursuant to the terms of the Purchase Agreement, then the principal amount of the Deposit Note, but not the accrued interest, shall be deemed repaid, satisfied, or otherwise applied to the cash consideration paid for the equity of the Target and the Deposit Note shall be deemed satisfied. On September 1, 2021, in connection with the Acquisition, People’s California issued senior secured indebtedness to the Company, pursuant to the terms of a certain Secured Promissory Note (the “Second Deposit Note”). The Second Deposit Note provided for a one-time advance of $9.00 million (the “Loan”) by the Company to People’s California at a flat rate of 3% per annum. The Second Deposit Note matures on September 1, 2022. The full principal balance and all outstanding but unpaid interest is due and payable at the maturity date of September 1, 2022; provided that, if the Company consummates the first closing, pursuant to the terms of the Purchase Agreement, then the principal amount of the Second Deposit Note, but not the accrued interest, shall be deemed repaid, satisfied, or otherwise applied to the cash consideration paid for the equity of the Target and the Second Deposit Note shall be deemed satisfied. On September 1, 2021, the Company entered into a Management Agreement with the Target, which provided the Company with control over the Target’s operation and finances. Management concluded that effective September 1, 2021, the Company became the primary beneficiary of the Target as a result of the Management Agreement, and began consolidating the Target’s financial results. The Company applied acquisition accounting on September 1, 2021 and allocated the fair value of the Target to its assets and liabilities. SilverStreak Solutions On October 1, 2021, the Company completed the acquisition of SilverStreak Solutions, Inc ("SilverStreak"). SilverStreak became a wholly owned subsidiary of the Company. The acquisition of SilverStreak was accounted for in accordance with ASC 805-10, “ Business Combinations .” The preliminary allocation of the purchase price was based upon a preliminary valuation, and the Company’s estimates and assumptions of the assets acquired and liabilities assumed were subject to change within the measurement period pending the finalization of a third-party valuation. The cost approach was utilized to estimate the fair value of the SilverStreak license. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following: (in thousands) December 31, December 31, Accounts Payable $ 12,990 $ 15,629 Tax Liabilities 1,018 4,865 Accrued Payroll and Benefits 628 1,327 Current Lease Liabilities 1,996 3,041 Accrued Interest 2,113 833 Other Accrued Expenses 665 4,543 Total Accounts Payable and Accrued Expenses $ 19,410 $ 30,238 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | LEASES A lease provides the lessee the right to control the use of an identified asset for a period of time in exchange for consideration. Operating lease right-of-use assets are included in other assets while lease liabilities are a line item on the Company’s Consolidated Balance Sheets. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company determines if an arrangement is a lease at inception. Right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Most operating leases contain renewal options that provide for rent increases based on prevailing market conditions. The terms used to calculate the right-of-use assets for certain properties include the renewal options that the Company is reasonably certain to exercise. The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, the Company utilizes its secured borrowing rate. Right-of-use assets include any lease payments required to be made prior to commencement and exclude lease incentives. Both right-of-use assets and lease liabilities exclude variable payments not based on an index or rate, which are treated as period costs. The Company’s lease agreements do not contain significant residual value guarantees, restrictions or covenants. The Company occupies office and other facilities under lease agreements that expire at various dates. In addition, office, production and transportation equipment are leased under agreements that expire at various dates. The Company does not have any significant finance leases. Total operating lease costs were $4.63 million and $2.77 million for the years ended December 31, 2022 and 2021, respectively. Short-term lease costs during the 2022 and 2021 fiscal years were not material. As of December 31, 2022 and 2021, short term lease liabilities of $2.00 million and $3.04 million are included in “ Accounts Payable and Accrued Expenses (in thousands) December 31, 2022 December 31, 2021 Operating Lease Right-of-Use Assets $ 13,946 $ 23,978 Operating Lease Liabilities $ 15,084 $ 23,950 The table below presents the maturities of operating lease liabilities as of December 31, 2022: Year Ending December 31, (in thousands) 2023 $ 2,722 2024 2,817 2025 2,353 2026 1,891 2027 1,831 Thereafter 8,934 Total Lease Payments 20,548 Less: Discount (5,464) Total Operating Lease Liabilities $ 15,084 The table below presents the weighted average remaining lease term for operating leases and weighted average discount rate used in calculating operating lease right-of-use assets: December 31, December 31, Weighted Average Remaining Lease Term (Years) 8.50 9.20 Weighted Average Discount Rate 11.7 % 11.5 % |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2022 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | NOTES PAYABLE Notes payable consists of the following: (in thousands) December 31, December 31, Promissory note dated January 18, 2018, issued for the purchase of real property. The promissory note was collateralized by the land and building purchased and matured January 18, 2022. The promissory note bears interest at 12.0% for year one and escalates 0.5% per year thereafter. — $ 6,500 Promissory note dated May 4, 2020, issued to Harvest Small Business Finance, LLC, an unaffiliated third party. Loan was part of the Paycheck Protection Program ("PPP Loan") offered by the U.S. Small Business Administration. The interest rate on the note was 1.0%. The note required interest and principal payments seven months from July 2020. The note matured on May 4, 2022. 14 562 Unsecured promissory note dated January 22, 2021, issued to Michael Nahass (a related party), which matured January 25, 2022, and bore interest at a rate of 3.0% per annum. — 1,050 Convertible promissory note dated January 25, 2021, issued to accredited investors, which matured July 22, 2022 and bears interest at a rate of 3.0% per annum. The conversion price is $0.175 per share. 3,450 3,500 Promissory note dated July 27, 2021, issued to Arthur Chan, which matures July 26, 2024, and bears interest at a rate of 8% per annum. 2,500 2,500 Senior Secured Promissory Note dated November 22, 2021 issued to Dominion Capital LLC, which matured on February 22, 2022 and bore interest at a rate of 12.0% per annum. — 2,500 Unsecured promissory note dated December 28, 2022 due to a related party. The interest rate on the note is 1% and matures on December 28, 2027. 154 90 Promissory note dated June 1, 2020, issued as part of the Paycheck Protection Program ("PPP Loan") offered by the U.S. Small Business Administration. The interest rate on the note is 1.0%. The note matured on June 1, 2022. — — Line of credit agreement entered on March 31, 2021, which matured on March 31, 2022 and bore interest of 2.9% per 30 days. — 4,500 Promissory note dated October 1, 2021, issued to Sterling Harlan as part of the SilverStreak Solutions acquisition. The interest rate on the note was 3%. The note matured on April 1, 2022. 2,000 2,000 Promissory note dated October 1, 2021, issued to Sterling Harlan as part of the SilverStreak Solutions acquisition. The interest rate on the note is 3%. The note matured on October 1, 2022. 2,500 2,500 Secured promissory note dated November 22, 2021 issued to People's California, LLC, which matures on November 22, 2023 and bears interest at a rate of 8% per annum. Payments due include $2.00 million plus accrued interest for the first twelve months followed by payments of $1.00 million plus accrued interest until maturity. 21,569 28,569 Promissory note dated May 1, 2019, assumed by the Company on July 1, 2021 in connection with the purchase of real property, from a related party. The note matures on May 15, 2039 and bears interest at a rate of 9.89% per annum. 2,882 2,954 Notes Payable - Promissory Notes $ 35,069 $ 57,225 Vehicle Loans 76 178 Less: Short-Term Debt (29,662) (45,451) Less: Debt Discount (669) (1,946) Net Long-Term Debt $ 4,814 $ 10,006 Scheduled maturities of debt as of December 31, 2022 are as follows: Year Ending December 31, (in thousands) 2023 $ 29,662 2024 2,505 2025 5 2026 5 2027 159 Thereafter 2,809 Total Future Principal Repaymets $ 35,145 During the years ended December 31, 2022 and 2021, the Company converted debt and accrued interest into 294,452 and 24,939,780 shares of the Company’s common stock, respectively. See “Note 15 – Stockholders' Equity" for further information. Series A Preferred Stock Purchase Agreement On January 22, 2021, the Company entered into a Series A Preferred Stock Purchase Agreement with Michael A. Nahass, pursuant to which the Company agreed to purchase from Mr. Nahass the four shares of the Company’s Series A Preferred Stock held by Mr. Nahass for an aggregate purchase price of $3.10 million, of which (i) $1.00 million was paid in cash, (ii) $1.05 million was paid in the form of an unsecured promissory note bearing interest at the rate of 3% and matured on July 25, 2021 and (iii) $1.05 million was paid in the form of an unsecured promissory note bearing interest at the rate of 3% and matured on January 25, 2022. On February 8, 2022, the Company paid the outstanding principal and interest on the $1.05 million promissory note held by Mr. Nahass. This payment satisfied the obligation and retired the note. Mortgages Carnegie Mortgage On November 22, 2017, the Company entered into a $4.50 million promissory note for the purchase of land and a building in California with a third-party creditor. The promissory note is collateralized by the land and building purchased and matures on December 1, 2020. The interest rate for the first year is 12.0% and increases 0.5% per year through 2021. The full principal balance and accrued interest were paid upon sale of the real estate during the year ended December 31, 2021. Dyer Mortgage On January 18, 2018, the Company entered into a $6.50 million promissory note for the purchase of land and a building in Santa Ana, CA (the "Dyer Property"). The interest rate for the first year was 12.0% and increased 0.5% per year, up to 13.0%, through 2021. Payments of interest are due monthly, while the principal balance is due at maturity. On January 7, 2021, the Company amended the terms of the promissory note to extend the maturity date from January 18, 2021 to January 18, 2022 upon which the Company paid a 1% amendment fee. On November 22, 2021, the Company issued a senior secured promissory note to Dominion Capital LLC in the amount of $2.50 million, which matured on February 22, 2022 and bore interest at a rate of 12% per annum. As a result of the sale of the Dyer Property on February 10, 2022, the Company retired a total of $9.00 million in outstanding debt related to the Dyer Property. See “Note 19 – Discontinued Operations" for further information. 4th Street Mortgage On October 5, 2018, the Company entered into a $1.60 million promissory note for the purchase of a building in Nevada with a third-party creditor. The promissory note is collateralized by the building purchased and matures in October 5, 2021. The interest rate for the first year is 12.0% and increases 0.5% per year through 2020. Payments of interest only are due monthly, while the full principal balance is due at maturity. The full principal balance and accrued interest were paid upon sale of the real estate during the year ended December 31, 2021. 2018 Master Securities Purchase Agreement and Convertible Promissory Notes In March 2018, the Company entered into the 2018 Master Securities Purchase Agreement with an accredited investor pursuant to which the Company sells to the accredited investor 7.5% Senior Convertible Promissory Notes in eight tranches averaging $5.00 million, for a total of $40.00 million. The Company converted $1.98 million of convertible notes into the Company’s common stock during the year ended December 31, 2021. As of December 31, 2022 and 2021, $3.45 million and $3.50 million of principal remains outstanding, respectively. For each note issued under the 2018 Master Securities Purchase Agreement, the principal and interest due and owed under the note is convertible into shares of Common Stock at any time at the election of the holder at a conversion price per share equal to the lower of (i) the original conversion price as defined in each note issuance or (ii) 87% of the average of the two lowest daily volume weighted average price of the Common Stock in the thirteen (13) trading days prior to the conversion date (“Conversion Price”). The Conversion Price is subject to adjustment for (i) stock splits, stock dividends, combinations, or similar events and (ii) full ratchet anti-dilution protection. Upon certain events of default, the conversion price will automatically become 70% of the average of the three (3) lowest volume weighted average prices of the Common Stock in the twenty (20) consecutive trading days prior to the conversion date for so long as such event of default remains in effect. In addition, at any time that (i) the daily volume weighted average price of the Common Stock for the prior ten (10) consecutive trading days is $10.50 or more and (ii) the average daily trading value of the Common Stock is greater than $2.50 million for the prior ten (10) consecutive trading days, then the Company may demand, upon one (1) days’ notice, that the holder convert the notes at the Conversion Price. The Company may prepay in cash any portion of the outstanding principal amount of the notes and any accrued and unpaid interest by, upon ten (10) days’ written notice to the holder, paying an amount equal to (i) 110% of the sum of the then-outstanding principal amount of the notes plus accrued but unpaid interest, if the prepayment date is within 90 days of the issuance date of the notes; (ii) 115% of the sum of the then-outstanding principal amount plus accrued but unpaid interest, if the prepayment date is between 91 days and 180 days of the issuance date of the notes; or (iii) 125% of the sum of the then-outstanding principal amount of the notes plus accrued but unpaid interest, if the prepayment date is after 180 days of the issuance date of the notes. Amendment of Existing Senior Convertible Promissory Notes and Securities Purchase Agreement On January 25, 2021, the Company entered into several agreements with an accredited investor (the “Lender”) that holds the promissory notes under the 2018 Securities Purchase Agreement. The amendments, among other things, (1) extended the maturity date of the June 2019 Note from January 26, 2021 to December 31, 2022 and (2) extended the maturity date of the October 2019 Note from April 21, 2021 to December 31, 2022. In connection with the Note Amendments, the Company issued to the Lender warrants to purchase 5,000,000 shares of the Company’s common stock (the “Old Note Warrants”) at an exercise price of $0.01 per share. The Old Note Warrants are exercisable at any time before the close of business on June 25, 2026. The Old Note Warrants contain cashless exercise provisions and, to the extent not previously exercised, will be automatically exercised via cashless exercise on June 25, 2026. In conjunction with the above amendments, the Company entered into a Securities Purchase Agreement with certain accredited investors (the “Purchasers”), pursuant to which the Company agreed to sell to the Purchasers $3.50 million in aggregate principal amount of the Company’s senior convertible promissory notes (the “Notes”) and warrants to purchase shares of the Company’s common stock (the “Warrants”), exercisable at any time before the close of business on June 25, 2026. The Warrants are comprised of 15,000,000 “A Warrants” with an exercise price of $0.01 per share and 15,000,000 “B Warrants” with an exercise price of $0.2284 per share. The Notes, which are convertible into common stock at any time at the discretion of the respective Purchasers at a conversion price of $0.175 per share of common stock, will bear an interest rate of 3%. The Notes mature on or about July 24, 2022 unless accelerated due to an event of default. The Company has the right to prepay the Notes at any time upon 10 days’ prior notice to the Purchasers. If the Company elects to prepay the Notes, the Company must pay the respective Purchasers an amount in cash equal to the product of (i) the sum of the then-outstanding principal amount of the Notes and all accrued but unpaid interest, multiplied by (ii) (x) 110%, if the prepayment date is within 90 days of the original issue date, (y) 115%, if the prepayment date is between 91 days and 180 days following the original issue date or (z) 125%, if the prepayment date is after the 180th day following the original issue date. The Company can demand that the Purchasers convert the Notes at any time, on five calendar days’ notice, that (i) the daily dollar volume-weighted average price for the Company’s common stock for the prior five consecutive trading days is $0.30 or more and (ii) (1) the shares underlying the Notes have been registered with the SEC or (2) there is a fundamental transaction that has been announced by the Company. The Notes contain standard and customary terms concerning events of default. Events of default include, among other things, any failure to make payments when due, failure to observe or perform material covenants or agreements contained in the Notes, a material default under the Securities Purchase Agreement or related transaction documents or any other material contract to which the Company or any of its subsidiaries is a party, the breach of any representation or warranty in the Notes or the Securities Purchase Agreement, the bankruptcy or insolvency of the Company or any of its subsidiaries, the Company’s common stock not being eligible for listing or quotation on a trading market and not eligible to resume listing or quotation for trading within 5 trading days, the Company’s failure to meet the current public information requirements under Rule 144 under the Securities Act of 1933, as amended, the Company’s failure to file required reports with the SEC, and the Company’s failure to maintain sufficient reserved shares for issuance upon conversion of the Notes and exercise of the Warrants. If any event of default occurs, subject to any cure period, the full principal amount, together with interest (including default interest of 18% per annum) and other amounts owing in respect thereof through the date of acceleration shall become, at the Purchaser’s election, immediately due and payable in cash. Management performed an analysis to determine the appropriate accounting treatment of the above transactions and concluded (1) a troubled debt restructuring had not occurred, and (2) as the total change in cash flows was greater than 10% of the carrying value of the debt, the transactions should be treated as a debt extinguishment for accounting purposes. A loss on extinguishment of debt of $5.98 million, equal to the difference between the carrying value of the old debt and the reacquisition price, was recognized for the year ended December 31, 2021. Debt Assumed in the UMBRLA Acquisition On July 1, 2021, upon the closing of the UMBRLA acquisition, the Company assumed debt instruments consisting of the following: Line of Credit : A line of credit agreement with Bespoke Financial, Inc. The line of credit is for the lesser of a maximum draw amount of $4.5 million and a borrowing base consisting of eligible accounts receivable inventory and cash that serves as collateral. The line of credit accrues interest at a rate of 2.9% every 30 days and expires on March 31, 2022. On March 9, 2022, the Company paid the outstanding principal and interest due on the line of credit facility. The payment satisfied the obligation and retired the debt. Payroll Protection Program (“PPP”) Loans : In May 2020, UMBRLA received loans under the Paycheck Protection Program offered by the U.S. Small Business Administration (“SBA”) of which $0.30 million remained outstanding on the acquisition date. The loan proceeds are available to be used to pay for payroll costs, including salaries, commissions and similar compensation, group health care benefits, rent, utilities and interest on certain other outstanding debt. The interest rate on the PPP Loans is a fixed rate of 1% per annum. The Company is required to make principal and interest payments in monthly installments. The PPP loans mature in the second quarter of 2022. The PPP Loans include events of default. Upon the occurrence of an event of default, the lender will have the right to exercise remedies against the Company, including the right to require immediate payment of all amounts due under the PPP Loans. As of December 31, 2022, the PPP loans were forgiven Related Party Promissory Note : On January 1, 2021, UMBRLA issued an unsecured promissory note with a principal balance of $0.20 million to a related party. No interest accrues on the note, except in the case of default, when the note bears 4.0% of interest. Principal payments on the note are due in monthly installments. As of December 31, 2022 and 2021, the outstanding principal on the note was $0.15 million and $0.09 million, respectively. Debt Assumed in the Acquisition of People's Choice During the year ended December 31, 2021, in connection with the acquisition of People's Choice, the Company issued a secured promissory note in a principal amount of $30.60 million as partial consideration under the purchase agreement. The note accrues interest on the basis of a 360-day year at a fixed rate of 8% per annum and matures on November 22, 2023. The Company agreed to pay the principal balance on the note in monthly installments, commencing on December 1, 2021. The note, of which $21.57 million and $28.57 million remained outstanding as of December 31, 2022 and 2021. The unamortized discount on the note was $0.67 million and $1.95 million as of December 31, 2022 and 2021, respectively. On January 1, 2021, People’s First Choice, LLC issued an unsecured promissory note with a principal balance of $5.00 million to a related party. Interest on the note accrues at a rate of 10.0% per annum, compounded quarterly. The note matures on June 30, 2022. The Company may prepay the note in whole or in part without premium or penalty, provided that any partial payment shall first be credited first to interest then due and payable. The note was fully repaid as of December 31, 2021. On April 8, 2022, the Company and People's California, LLC agreed to amend a portion of the November 22, 2021 Closing Documents (Primary Membership Interest Purchase Agreement, Secondary Membership Interest Purchase Agreement, Secured Promissory Note, and other ancillary agreements). On April 11, 2022, the Company paid $3.00 million upon execution of the amendment and was to pay $5.00 million by June 1, 2022, or June 30, 2022 if the Company obtained debt financing approved by People’s, to satisfy all financial obligations that would be owing as of June 30, 2022. People’s declined to approve the debt financing obtained by the Company, and the Company did not make the $5.00 million payment. See "Note 23 – Commitments and Contingencies" and "Note 24 – Subsequent Events" for information on related litigation matters. Debt Assumed with Purchase of Halladay Holding, LLC. On July 1, 2021, the Company entered into a Membership Interest Purchase Agreement with Nicholas Kovacevich and Dallas Imbimbo, who are Directors of the Company, pursuant to which the Company acquired 100% of the outstanding membership interests in Halladay Holding, LLC from Mr. Kovacevich and Mr. Imbimbo. Halladay Holding, LLC is the owner of real property located at 3242 S. Halladay Street, Santa Ana, CA 92705, where the Company operates a cannabis dispensary and maintains its principal office space. Upon consummation of the agreement, the Company assumed a mortgage, which had an outstanding balance of $2.88 million and $2.95 million as of December 31, 2022 and 2021, respectively. The loan, which accrues interest at a rate of 9.89% per annum, matures on May 1, 2039. Debt Assumed in the Acquisition of SilverStreak Solutions, Inc. On October 1, 2021, in connection with the acquisition of SilverStreak, the Company issued (i) a $2,000,000 unsecured promissory note, with an interest rate of 3% per annum and a maturity date six months after closing of the purchase, and (ii) a $2,500,000 unsecured promissory note with an interest rate of 3% per annum and a maturity date of twelve months after the closing of the transaction. Additional Financing Arrangements On December 30, 2019, the Company issued a promissory note to Matthew Lee Morgan Trust (a related party), which matures on January 30, 2021. The note accrues interest at a rate of 10% per annum. The note was converted into 1,428,571 shares of the Company’s common stock in January 2021. On January 10, 2020, the Company issued a promissory note to Arthur Chan, an unaffiliated third party, in the amount of $1.00 million dollars. The note accrues interest at a rate of 15.00% per annum and matures on January 10, 2021. The note is secured by the Company’s real estate located at 620 E. Dyer Rd., Santa Ana, CA. On January 8, 2021, the Company executed an amendment to the promissory note, which extended the maturity date from January 10, 2021 to July 10, 2021. On July 27, 2021, the Company entered into a Note Termination and Exchange Agreement with Arthur Chan, pursuant to which the Company issued to Mr. Chan 4,548,006 shares of the Company’s common stock at a price of $0.23 per share as payment in full of the principal, interest and fees payable under the Secured Promissory Note issued by the Company to Mr. Chan on January 10, 2020 in the original principal amount of $1.00 million. As a result, the Secured Promissory Note is no longer outstanding. Contemporaneously with the execution of the Exchange Agreement, the Company issued to Mr. Chan a promissory note in the amount of $2.50 million. The new note bears an interest rate of 8% and matures on July 26, 2024. On May 4, 2020, OneQor Technologies, Inc entered into a Promissory Note dated May 4, 2020 (the “PPP Note”) with Harvest Small Business Finance, LLC (the “Lender”), pursuant to which the Lender agreed to make a loan to the Company under the Paycheck Protection Program (the “PPP Loan”) offered by the U.S. Small Business Administration (the “SBA”) in a principal amount of $0.56 million pursuant to Title 1 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). The PPP Loan proceeds are available to be used to pay for payroll costs, including salaries, commissions, and similar compensation, group health care benefits, and paid leaves; rent; utilities; and interest on certain other outstanding debt. The amount that will be forgiven will be calculated in part with reference to OneQor’s full time headcount during the eight week week period following the funding of the PPP loan. The interest rate on the PPP Note is a fixed rate of 1% per annum. To the extent that the amounts owed under the PPP Loan, or a portion of them, are not forgiven, OneQor will be required to make principal and interest payments in monthly installments. The PPP Note includes events of default. Upon the occurrence of an event of default, the lender will have the right to exercise remedies against OneQor, including the right to require immediate payment of all amounts due under the PPP Note. On February 16, 2022, the Company received notice of forgiveness of approximately $0.54 million of the PPP Loan. The remainder is to be paid off over the next three years. On July 29, 2020, the Company issued a promissory note to an unaffiliated third party, in the amount of $1.00 million. The note incurs interest at a rate of 8.00% per annum and matured on April 28, 2021. |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Equity | EQUITY Preferred Stock On January 22, 2021, the Company entered into a Resignation and Release Agreement and a Series A Preferred Stock Purchase Agreement with Michael A. Nahass. Mr. Nahass agreed to resign from his positions as a director, executive officer and employee of the Company, and the Company agreed to purchase from Mr. Nahass the four shares of the Company’s Series A Preferred Stock held by Mr. Nahass for an aggregate purchase price of $3.1 million, of which (i) $1.0 million was paid in cash, and $2.1 million was paid in the form of promissory notes. The Company recorded severance expense equal to the fair value of consideration paid to Mr. Nahass during the year ended December 31, 2021. On January 22, 2021, the Company entered into a Resignation and Release Agreement with Derek Peterson, pursuant to which Mr. Peterson agreed to resign from his positions as a director, executive officer and employee of the Company effective immediately upon the Company’s closing of a private placement in the amount of not less than $3.5 million which occurred on January 25, 2021. In addition, the Company extended the time within which vested common stock options held by Mr. Peterson may be exercised to 150 days after the date of resignation. Mr. Peterson agreed to the cancellation of his Series A Preferred Stock through conversion into 16,485,714 shares of common stock and, in consideration of the conversion, was issued 4,945,055 warrants to purchase common stock, expiring in June 2026, with an exercise price of $0.01 per share, which are subject to a one-year lockup with registration rights. The Company recorded severance expense equal to the fair value of consideration paid to Mr. Peterson during the year ended December 31, 2021. On February 3, 2021, the Company filed (1) a Certificate of Withdrawal of Certificate of Designation of the Company’s Series A Preferred Stock with the Secretary of State of the State of Nevada, which withdraws the Certificate of Designation establishing the Company’s Series A Preferred Stock and eliminates the Company’s Series A Preferred Stock from the Company’s Articles of Incorporation and (2) a Certificate of Withdrawal of Certificate of Designation of the Company’s Series B Preferred Stock with the Secretary of State of the State of Nevada, which withdraws the Certificate of Designation establishing the Company’s Series B Preferred Stock and eliminates the Company’s Series B Preferred Stock from the Company’s Articles of Incorporation. In December 2022, the Company filed a Certificate of Designation of Rights, Privileges, Preferences, and Restrictions to establish a new class of preferred shares, the Series V Preferred Stock. The number of authorized shares of Series V Preferred Stock is 25,000,000 shares. Each share of Series V Preferred Stock is convertible into ten shares of Common Stock at any time from and after the first anniversary of the issuance date. Each share of Series V Preferred Stock will automatically be converted into ten fully paid and nonassessable shares of Common Stock on the second anniversary of the date on which the holder’s shares of Series V Preferred Stock were issued. The Series V Class of Preferred Stock have a one-year lock-up and have a two times voting right which automatically expires in two years. Purchasers agreed to enter into a voting agreement assigning their voting rights to Sabas Carrillo, the Company's Chief Executive Officer. Common Stock The Company authorized 990,000,000 shares of common stock with $0.001 par value per share. As of December 31, 2022 and 2021, 679,513,556 and 498,546,295 shares of common stock were outstanding, respectively. On February 1, 2022, the Company granted 294,452 shares of common stock to Apollo Management Group, Inc. in exchange for the $0.05 million convertible promissory note that Apollo Management Group, Inc. held and the related accrued interest. The fair value of the shares was $0.08 million. During the year ended December 31, 2022, the Company issued 4,759,708 common shares for the cashless exercise of warrants and 146,212 common shares for the exercise of stock options. During the year ended December 31, 2022, the Company issued 2,100,000 and 943,128 common shares to employees and directors, respectively. As a result, the Company recorded stock compensation of $0.35 million and $0.21 million, respectively, for the year ended December 31, 2022. During the year ended December 31, 2022, the Company issued 16,906,230 common shares to third-party service providers. As a result, the Company recorded $0.68 million of stock-based compensation expense for services for the nine months ended September 30, 2022. See "Note 22 - Related Party Transactions" for further information on common shares issued to a related party for services during the year ended December 31, 2022. During the year ended December 31, 2022, the Company issued 23,424,674 of the holdback common shares to the sellers of the UMBRLA acquisition pursuant to the original acquisition agreement. During the year ended December 31, 2022, the Company issued 25,000,000 of common shares for $4.38 million of cash. The issued shares were restricted. On December 30, 2022, the Company entered into a binding letter of intent with third parties pursuant to which the Company intend to negotiate and enter into Management Services Agreements to operate two dispensaries located in Oakland, CA and Redding, CA. Pursuant to the terms of the letter of intent, the Company issued 107,142,857 common shares equivalent to an aggregate total of $1.50 million as a deposit towards the option to purchase the dispensaries. The fair value of the common shares issued will be applied to the purchase price at time of of purchase. If such purchase does not occur, the Company will forfeit the deposits. As a result, the Company recorded a deposit of $1.50 million which is presented in "Other Assets" on the consolidated balance sheet as of December 31, 2022. Treasury Stock During the year ended December 31, 2021, the Company acquired 8 shares of Series A Preferred stock as part of the resignation and release agreements entered into with Mr. Nahass and Mr. Peterson, as described above. The shares were recorded at fair market value as of the date the agreements were executed. |
STOCKBASED COMPENSATION
STOCKBASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Equity Incentive Plans In the first quarter of 2016, the Company adopted the 2016 Equity Incentive Plan. In the fourth quarter of 2018, the Company adopted the 2018 Equity Incentive Plan. In July 2021, the Company assumed the 2019 Equity Incentive Plan as part of the acquisition of UMBRLA. The following table contains information about both plans as of December 31, 2022: Awards Awards Awards Awards 2016 Equity Incentive Plan 999,906 — 499,953 499,953 2018 Equity Incentive Plan 29,920,933 4,022,133 13,326,509 12,572,291 2019 Equity Incentive Plan 61,109,696 34,884 37,617,531 23,457,281 Stock-Based Compensation Expense The following table sets forth the total stock-based compensation expense resulting from stock options and restricted grants of common stock to employees, directors and non-employee consultants in the consolidated statement of operations which are included in selling, general and administrative expenses: (in thousands, except for number of shares or options) December 31, 2022 December 31, 2021 Type of Award Number of Stock-Based Compensation Number of Stock- Stock Options 1,075,001 $ 3,659 89,930,019 $ 2,415 Stock Grants: Employees (Common Stock) 2,100,000 352 250,000 68 Directors (Common Stock) 943,128 213 1,917,837 495 Non–Employee Consultants (Common Stock) 16,906,230 695 4,556,603 1,079 Total Stock–Based Compensation Expense $ 4,919 $ 4,057 On March 10, 2022, the Company terminated the employment of Oren Schauble, the Company’s President. On March 13, 2022, the Company terminated the employment of Francis Knuettel II, the Company’s Chief Executive Officer. The Company entered into separation agreements with each of Mr. Knuettel and Mr. Schauble regarding the compensation to be granted to each of them regarding their separation from the Company. In addition, on March 17, 2022 the Company entered into a consulting agreement with Mr. Schauble pursuant to which he will continue to provide certain services to the Company through a future agreed upon date. The Company granted Mr. Schauble 910,623 restricted shares of the Company's Common Stock in four monthly installments. On April 12, 2022, the Company and Mr. Knuettel agreed to terms on a separation agreement. The Company agreed to pay Mr. Knuettel 50% of his annual base salary and continue his medical benefits for a period of six months. Mr. Knuettel's unvested shares and options vested immediately. As part of this separation agreement, Mr. Knuettel resigned as a director of the Company in March 2022. On April 14, 2022, the Company and Dallas Imbimbo, an advisor to the Company and a director of the Company, agreed to terms on a separation agreement. The Company agreed to vest 100% of Mr. Imbimbo's restricted common stock granted pursuant to the advisor agreement with Mr. Imbimbo. The Company agreed to vest 100% of the options to purchase shares of the Company's common stock granted as part Mr. Imbimbo's Independent Director Agreement. The Company will pay Mr. Imbimbo $0.08 million in cash compensation. As part of this separation agreement, Mr. Imbimbo resigned as a director of the Company and as an Advisor to the Company in April 2022. During the year ended December 31, 2022, the Company issued 16,181,230 shares of common stock to Adnant, LLC as compensation for its services and recorded stock-based compensation expense of $1.57 million for such shares. See "Note 22 - Related Party Transactions" for further information. Stock Options The following table summarizes the Company’s stock option activity and related information for the years ended December 31, 2022 and 2021: Number Weighted- Weighted- Aggregate Options Outstanding as of December 31, 2020 17,492,830 $ 0.41 Granted 88,627,220 $ 0.23 Exercised (3,910,805) $ — Forfeited (13,547,745) $ 0.15 Expired (410,120) $ 0.41 Options Outstanding as of December 31, 2021 88,251,380 $ 0.20 Granted 1,075,001 $ 0.14 Exercised (146,212) $ 0.07 Forfeited (19,365,073) $ 0.13 Expired (16,993,997) $ 0.17 Options Outstanding as of December 31, 2022 52,821,099 $ 0.23 7.9 years $ 2,846 Options Exercisable as of December 31, 2022 36,825,119 $ 0.27 7.6 years $ — The aggregate intrinsic value is calculated as the difference between the Company’s closing stock price of $0.01 on December 31, 2022 and the exercise price of options, multiplied by the number of options. As of December 31, 2022 and 2021, total unrecognized stock-based compensation was $1.08 million and $7.97 million, respectively, which are expected to be recognized over a weighted-average period of approximately 1.6 years and 1.6 years. The Company recognizes compensation expense for stock option awards on a straight-line basis over the applicable service period of the award. The service period is generally the vesting period. The following weighted-average assumptions were used to calculate stock-based compensation: Year Ended December 31, 2022 2021 Expected Term 5.2 years 5 years Volatility 103.0 % 106.7 % Risk-Free Interest Rate 0.9 % 0.8 % Dividend Yield 0 % 0 % The Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Hence, the Company uses the “simplified method” described in Staff Accounting Bulletin 107 to estimate the expected term of share option grants. The expected stock price volatility assumption was determined by examining the historical volatilities for the Company’s common stock. The Company will continue to analyze the historical stock price volatility and expected term assumptions as more historical data for the Company’s common stock becomes available. The risk-free interest rate assumption is based on the U.S. treasury instruments whose term was consistent with the expected term of the Company’s stock options. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has never paid dividends on its common stock and does not anticipate paying dividends on its common stock in the foreseeable future. Accordingly, the Company has assumed no dividend yield for purposes of estimating the fair value of the Company stock-based compensation. |
WARRANTS
WARRANTS | 12 Months Ended |
Dec. 31, 2022 | |
Warrants and Rights Note Disclosure [Abstract] | |
WARRANTS | WARRANTS The following table summarizes warrant activity for the years ended December 31, 2022 and 2021: Warrants Weighted- Warrants Outstanding as of December 31, 2020 1,076,555 $ 1.99 Issued 85,336,515 $ 0.08 Exercised (586,198) $ 0.07 Warrants Outstanding as of December 31, 2021 85,826,872 $ 0.22 Exercised (4,945,055) $ 0.01 Warrants Outstanding as of December 31, 2022 80,881,817 $ 0.11 The weighted-average exercise price and weighted-average fair value of the warrants granted by the Company during the year ended December 31, 2021 were as follows: Weighted- Weighted- Warrants Granted Whose Exercise Price Exceeded Fair Value at the Date of Grant $ 0.08 $ 0.21 Warrants Granted Whose Exercise Price Was Equal or Lower Than Fair Value at the Date of Grant $ — $ — The Company estimated the fair value of the warrants issued during the year ended December 31, 2021 utilizing the Black-Scholes option-pricing model with the following weighted-average inputs: Year Ended December 31, Expected Term 3.8 Volatility 112.6 % Risk-Free Interest Rate 0.2 % Dividend Yield — % |
VARIABLE INTEREST ENTITY ARRANG
VARIABLE INTEREST ENTITY ARRANGEMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Investments [Abstract] | |
VARIABLE INTEREST ENTITY ARRANGEMENTS | VARIABLE INTEREST ENTITY ARRANGEMENTS On October 26, 2017, the Company entered into operating agreements with NuLeaf, Inc. and formed NuLeaf Sparks Cultivation, LLC and NuLeaf Reno Production, LLC (collectively, “NuLeaf”) to build and operate cultivation and production facilities for the Company's IVXX brand of cannabis products in Nevada. Under the terms of the agreements, the Company remitted to NuLeaf an upfront investment of $4.50 million in the form of convertible loans bearing an interest rate of 6% per annum. Upon state and local approval in July 2018, the notes receivable balance was converted into a 50% ownership interest in NuLeaf. The investment in NuLeaf was initially recorded at cost and accounted for using the equity method. In February 2019, the Company amended and restated the NuLeaf agreements and obtained control of the operations of NuLeaf. The Company determined these entities are variable interest entities in which the Company is the primary beneficiary by reference to the power and benefits criterion under ASC 810, “Consolidation.” The provisions within the amended agreement granted the Company the power to manage and make decisions that affect the operation of these entities. As the primary beneficiary of NuLeaf, the Company began consolidating the accounts and operations of these entities on March 1, 2019. All intercompany transactions were eliminated in the consolidated financial statements. In November 2021, Nuleaf entered a definitive agreement with Jushi Holdings Inc to acquire NuLeaf, Inc., together with its subsidiaries and affiliated companies and the Company classified the Nuleaf operations as classified as held for sale as of December 31, 2021. The transaction closed in April 2022 and the Nuleaf operations are classified as discontinued operations for all periods presented. See "Note 19 - Discontinued Operations" for further information. During the years ended December 31, 2022 and 2021, revenue attributed to NuLeaf was $2.81 million and $12.90 million, respectively, and net loss attributed to NuLeaf was $8.19 million and $0.69 million, respectively, which are included in discontinued operations. The aggregate carrying values of assets and liabilities related to NuLeaf, after elimination of any intercompany transactions and balances, in the consolidated balance sheets were as follows: (in thousands) December 31, Current Assets: Cash $ 1,544 Accounts Receivable, Net 1,553 Inventory 1,359 Prepaid Expenses and Other Current Assets 39 Total Current Assets 4,495 Property, Equipment and Leasehold Improvements, Net 5,099 Other Assets 295 TOTAL ASSETS $ 9,889 Liabilities: Total Current Liabilities $ 350 Total Long-Term Liabilities 184 TOTAL LIABILITIES $ 534 |
TAX EXPENSE
TAX EXPENSE | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
TAX EXPENSE | TAX EXPENSE The provision for income taxes consisted of the following for the years ended December 31, 2022 and 2021. Year Ended December 31, 2022 2021 Current: Federal $ 3,339 $ 107 State — 860 Total Current Tax Expense 3,339 967 Deferred: Federal $ 1,073 $ 1,112 State (7,196) (277) Total Deferred Tax Expense (6,123) 835 TOTAL TAX PROVISION $ (2,784) $ 1,802 The components of deferred income tax assets and (liabilities) are as follows: Year Ended December 31, 2022 2021 Deferred Income Tax Assets: Fixed Assets $ 208 $ — Accrued Expenses 22 58 Net Operating Losses 4,030 5,010 Total 4,260 5,068 Deferred Income Tax Liabilities: Fixed Assets and Intangibles — (11,094) Leases (134) (96) Total (134) (11,190) Valuation Allowance (4,126) — Net Deferred Tax Assets (Liabilities) $ — $ (6,122) The net deferred tax liability as of December 31, 2022 is associated with the Company's continuing operations. The reconciliation between the Company’s effective tax rate and the statutory tax rate is as follows: Year Ended December 31, 2022 2021 Expected Income Tax Benefit at Statutory Tax Rate, Net $ (41,039) $ (6,385) Changes in Income Taxes Resulting From: State Taxes (Net of Federal Tax Benefits) (10,036) 9,937 Decrease in Valuation Allowance 4,126 (14,375) Gain/Loss on Extinguishment of Debt — 1,255 Non-Deductible 280E 5,339 5,421 Goodwill impairment 9,355 1,296 Debt Discount 274 239 Pass through and Managed 1,725 308 Disposal of Depreciable Assets 2,820 — Impairment of Intangibles 25,024 — Prior Year Adjustments and Other (372) 4,106 Reported Income Tax Expense (Benefit) $ (2,784) $ 1,802 For the years ended December 31, 2022 and 2021, the Company had subsidiaries that produced and sold cannabis or cannabis pure concentrates, subjecting the Company to the limits of Internal Revenue Code (“IRC”) Section 280E. Pursuant to IRC Section 280E, the Company is allowed only to deduct expenses directly related to sales of product. The State of California does not conform to IRC Section 280E and, accordingly the Company is allowed to deduct all operating expenses on its California income tax returns. As the Company files consolidated federal income tax returns, the taxable income generated from its subsidiaries subject to IRC Section 280E has been offset by losses generated by operations not subject to IRC Section 280E. As of December 31, 2022, the Company had federal net operating loss carryforwards of $9.0 million, which do not expire, but are limited in utilization against 80% of taxable income. As of December 31, 2022, the Company had state net operating loss carryforwards of $24.3 million, which begin to expire in 2038. These tax attributes are subject to an annual limitation from equity shifts, which constitute a change of ownership as defined under IRC Section 382, which will limit their utilization. Management completed an analysis of our owner shifts and believe we underwent ownership changes as defined by Section 382 on May 7, 2018 and July 1,2021. Net operating loss carryforwards have been reduced to reflect the maximum amount available subject to these limitations. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. As of December 31, 2022, we have determined that a valuation allowance is required due to our net deferred tax asset position. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased. The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. All tax years are subject to examination. The income tax returns for the years ended December 31, 2020 and 2019 related to People's First Choice, LLC is under examination, which is expected to begin in fiscal year 2023. Under ASC 740-10, "Income Taxes" |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | ASSETS HELD FOR SALE Assets held for sale consist of those classified as discontinued operations and those that do not meet the criteria for discontinued operations under ASC 205. See “ Note 19 – Discontinued Operations " for further information. In June 2022, the Company closed Blüm San Leandro and began actively marketing the retail location for sale, which is expected to close within the next year. The assets were classified as held for sale as of the quarters ended June 30, 2022 and September 30, 2022 but did not meet the criteria for discontinued operation under ASC Subtopic 205-20. In December 2022, a change to the plan of sale occurred and the Company reopened Blüm San Leandro. Accordingly, the assets were reclassified as held and used as of December 31, 2022. On June 18, 2022, the Company entered into a settlement agreement and transferred 100% of the membership interests in the People's dispensary in Los Angeles, CA wherein all operational control and risk of loss was transferred to the original licenseholder and the Company had no further obligations. As consideration received, a promissory note of $1.40 million with the buyer was forgiven. The Company recognized a loss upon sale of assets of $0.38 million for the difference between the aggregate consideration and the book value of the assets as of the disposition date which is recognized in the consolidated statements of operations during the year ended December 31, 2022. As of June 18 2022, all assets and liabilities related to the dispensary were deconsolidated from the consolidated balance sheet. All profits or losses subsequent to June 18, 2022 are excluded from the consolidated statements of operations. During the fiscal third quarter of 2022, the Company terminated its third-party distribution operations in California and its retail and delivery operations at SilverStreak. In November 2022, the Company received confirmation for the legal dissolution of SilverStreak and the entities related to its distribution operations in the state of California. As a result, all liabilities and existing obligations of the dissolved entities were extinguished. Accordingly, the Company recognized a gain on disposal of assets of $12.69 million during the year ended December 31, 2022 related to the dissolution of entities. See " Note 9 – Goodwill " for additional information. NuLeaf On November 17, 2021, Medifarm III, LLC (“Medifarm III”), a wholly-owned subsidiary of the Company, entered into a Membership Interest Purchase Agreement with NuLeaf, Inc., a Nevada corporation (“NuLeaf”) wherein Medifarm III agreed to sell its fifty percent (50%) of the outstanding membership interests of each of NuLeaf Reno Production, LLC (“NuLeaf Reno”) and NuLeaf Sparks Cultivation, LLC (“NuLeaf Sparks”) to NuLeaf, which owned the remaining fifty percent (50%) of the membership interests of NuLeaf Reno and NuLeaf Sparks, for aggregate consideration of $6.50 million in cash. The transaction closed in April 2022 and the Company recognized a gain of $2.05 million for the difference between the aggregate consideration and the book value of the assets as of the disposition date, less direct costs to sell, for the year ended December 31, 2022. Nevada Dispensaries During fiscal year 2019 and 2020, the Company entered into Asset Purchase Agreements with unrelated third parties to sell substantially all of the assets of the Company related to the Company's dispensaries located at: • 1130 E. Desert Inn Road, Las Vegas, NV 89109; • 1085 S. Virginia St., Suite A, Reno, NV 89502; and • 3650 S. Decatur Blvd., Las Vegas, NV 89103. The dispensaries are collectively referred to as the "Nevada dispensaries". The transactions for the sale of the Nevada dispensaries closed upon receiving all required government approvals during the fourth quarter ended December 31, 2021. The Company recognized an aggregate gain of $12.83 million upon sale of the Nevada dispensaries, equal to the difference between the consideration paid and the book value of the assets as of the disposition date, less direct costs to sell, and reflected such gain in income from discontinued operations for the year ended December 31, 2021. Oregon Operations On December 28, 2022, the Company entered into a Stock Purchase and Sale Agreement pursuant to which the Company sold all of its equity interests in LTRMN, Inc., which conducts cannabis distribution and wholesale activities in Oregon, for an aggregate purchase price of $0.25 million. The purchase price was paid in the form of a secured promissory note at a rate of 8.0% per annum due and payable on the third anniversary of the date of issuance. However, upon a final and binding settlement of certain ongoing litigation that is approved by UMBRLA, the purchase price shall be automatically revised to be $0 and the promissory note shall be deemed paid and satisfied in-full. On December 28, 2022, the Company entered into a Membership Interest Purchase and Sale Agreement pursuant to which the Company sold its 50% equity interests in Psychonaut Oregon, LLC (“Psychonaut”) to Joseph Gerlach for an aggregate purchase price of $1. Mr. Gerlach owns the other 50% of the equity interests in Psychonaut and is also the Company’s Chief Cultivation Officer. In connection with the sale of Psychonaut, the Company entered into an unsecured promissory note dated December 28, 2022 (the “Psychonaut Note”) pursuant to which the Company consolidated all current liabilities due to Mr. Gerlach totaling $0.15 million. The Psychonaut Note accrues interest at a rate of 1.0% per annum and is due and payable on the fifth anniversary of the date of issuance. The Company concluded that the sale of LTRMN, Inc. and Psychonaut Oregon, LLC (together, the "Oregon operations") represented a strategic shift that will have a major effect on the Company’s operations and financial results and thus all assets and liabilities allocable to the operations within the state of Oregon were classified as discontinued operations. The assets associated with the Oregon operations were measured at the lower of their carrying amount or FVLCTS. Revenue and expenses, gains or losses relating to the discontinuation of Oregon operations were eliminated from profit or loss from the Company’s continuing operations and are shown as a single line item in the consolidated statements of operations for all periods presented. The Company recognized a loss upon sale of the Oregon operations of $0.50 million for the net carrying value of the assets as of the disposition date which was determined as the book value less direct costs to sell and is recognized as a component of loss on disposal of assets and other expense in the Consolidated Statements of Operations for Discontinued Operations during the year ended December 31, 2022. As of December 31, 2022, the Oregon operations have been fully deconsolidated by the Company and the Company does not have any continuing involvement with the former subsidiary outside of the Magee litigation disclosed in “Note 23 – Commitments and Contingencies” . Real Estate As of December 31, 2020, the Company classified real property in Las Vegas, NV as available-for-sale, as it met the criteria of ASC 360-10-45-9. On August 9, 2021, the Company sold the property for $2.60 million in cash to 117 Real Estate Holdings LLC. A loss on the sale of the asset of $0.10 million was recorded during the year ended December 31, 2022 and is presented within net income from discontinued operations. As of December 31, 2020, the Company classified real property in Santa Ana, CA as available-for-sale, as it met the criteria of ASC 360-10-45-9. On August 10, 2021, the Company entered into a Stock Purchase Agreement with two individuals, pursuant to which the Company sold all of the share of common stock of its wholly-owned subsidiary, 1815 Carnegie Santa Ana, Corp. (“1815 Carnegie”) to those individuals for aggregate consideration of $1.70 million. 1815 Carnegie holds a permit to operate a cannabis dispensary in the City of Santa Ana, CA. On August 12, 2021, the Company also entered into a Supply agreement with an affiliate of purchasers to obtain a right of first refusal to purchase cannabis bulk and distillate to be integrated into the Company cannabis goods and products, as well as a Retail Space Agreement with 1815 Carnegie, pursuant to which the Company will receive guaranteed placement of 15 SKUs at the cannabis dispensary. Each agreement has a term of three years. The Company recorded a gain on the sale of the asset of $1.70 million during the year ended December 31, 2021, which is presented within net income from discontinued operations. On December 7, 2021, 620 Dyer LLC, a wholly-owned subsidiary of the Company, entered into a Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate (the “PSA”) with FRO III/SMA Acquisitions, LLC (the “Buyer”) to sell the real property located at 620 East Dyer Road, Santa Ana, CA (the “Dyer Property”) for $13.40 million in cash. The real estate asset was classified as available-for-sale as of December 31, 2021. On February 10, 2022, the Company announced the closing of the sale of the Dyer Property, resulting in the Company retiring $9.00 million of outstanding debt on the Dyer Property as disclosed in "Note 13 – Notes Payable" . The Company is continuing to evaluate its options with respect to the license originally connected to the Dyer Property, including consideration of the retail density in the area. If the city of Santa Ana grants approval to relocate licenses elsewhere in the city, the Company may consider using the dispensary license to open a dispensary in an underserved part of Santa Ana. OneQor During fiscal year 2020, management suspended the operations of OneQor Technologies due to (i) a lack of proper growth in customer acquisition and revenue for this CBD operation during the COVID-19 pandemic and (ii) the overall financial health of the Company as a result of COVID-19 and social unrest. The Company plans to focus its attention and resources on growing its THC business. In November 2022, the Company received confirmation for the legal dissolution of OneQor. Accordingly, all liabilities and existing obligations related to OneQor were extinguished, resulting in a gain on disposal of assets of $0.53 million. Edible Garden On March 30, 2020, the Company entered into an Asset Purchase Agreement with Edible Garden AG Inc. (“Edible Garden AG”) pursuant to which the Company sold substantially all of the assets of Edible Garden Corp. The consideration received included (i) a five “Note 6 – Investments” for further information. The completed sales of the NuLeaf operations, Oregon operations, Nevada dispensaries, real estate assets, and assets divested during the years ended December 31, 2022 and 2021 represent a strategic shift that will have a major effect on the Company’s operations and financial results. As a result, management determined the results of these components qualified for discontinued operations presentation in accordance with ASC 205, “Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity.” Operating results for discontinued operations were comprised of the following: (in thousands) Year Ended December 31, December 31, Total Revenues $ 9,257 $ 18,453 Cost of Goods Sold 5,299 12,292 Gross Profit 3,958 6,161 Selling, General and Administrative Expenses 4,532 8,466 Loss (Gain) on Sale of Assets (4,752) (6,583) Income (Loss) from Operations $ 4,178 $ 4,278 Interest Expense (11) (977) Other Income 27 7,806 Income (Loss) from Discontinued Operations Before Provision for Income Taxes $ 4,194 $ 11,107 Provision for Income Tax for Discontinued Operations — (917) Net Income (Loss) from Discontinued Operations, Net of Taxes $ 4,194 $ 10,190 Income (Loss) from Discontinued Operations per Common Share Attributable to Unrivaled Brands, Inc. Common Stockholders - Basic And Diluted $ 0.01 $ 0.03 The carrying amounts of the major classes of assets and liabilities for the discontinued operations are as follows: (in thousands) December 31, Cash $ 1,735 Accounts Receivable, Net 2,216 Inventory 2,358 Prepaid Expenses and Other Assets 98 Property, Equipment and Leasehold Improvements, Net 18,225 Intangible Assets, Net — Goodwill — Other Assets 811 Assets of Discontinued Operations $ 25,443 Accounts Payable and Accrued Expenses $ 2,834 Notes Payable 299 Income Tax Payable 917 Long-Term Lease Liabilities 591 Liabilities of Discontinued Operations $ 4,641 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company operates in two segments: (i) Cannabis Retail – Either independently or in conjunction with third parties, the Company operates medical marijuana and adult use cannabis dispensaries in California. All retail dispensaries offer a broad selection of medical and adult use cannabis products including flower, concentrates and edibles. (ii) Cannabis Cultivation and Distribution – The Company operates distribution centers in California that distribute its own branded products as well as third party products to its retail dispensaries and to other non-affiliated medical marijuana and/or adult use cannabis dispensaries. For the periods presented, revenue by reportable segments are as follows: (in thousands) Total Revenue % of Total Revenue Year Ended December 31, Segment 2022 2021 2022 2021 Cannabis Retail $ 39,937 $ 24,540 76.8 % 58.3 % Cannabis Cultivation & Distribution 12,078 17,580 23.2 % 41.7 % Total $ 52,015 $ 42,120 100.0 % 100.0 % For the periods presented, operations by reportable segments are as follows: (in thousands) Year Ended December 31, 2022 Cannabis Retail Cannabis Cultivation and Distribution Corporate and Other Total Total Revenues $ 39,937 $ 12,078 $ — $ 52,015 Cost of Goods Sold 19,586 15,532 — 35,118 Gross Profit (Loss) 20,351 (3,454) — 16,897 Selling, General and Administrative Expenses 17,513 11,009 25,634 54,156 Impairment Expense — — 163,698 163,698 (Gain) Loss on Sale Of Assets (2,663) (3,652) (879) (7,194) Income (Loss) from Operations 5,501 (10,811) (188,453) (193,763) Other Income (Expense): Interest Expense — (170) (4,003) (4,173) Gain (Loss) on Extinguishment of Debt — — 542 542 Unrealized Gain (Loss) on Investments — — 210 210 Other Income (Loss) 210 750 590 1,550 Total Other Income (Loss) 210 580 (2,661) (1,871) Income (Loss) Before Provision for Income Taxes $ 5,711 $ (10,231) $ (191,114) $ (195,634) Total Assets $ 18,716 $ 4,344 $ 17,448 $ 40,508 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company holds shares of common stock in Edible Garden which is recorded at fair value. Refer to "Note 6 - Investments" for further information. At December 31, 2021, the Company concluded that the fair value of its investment in Edible Garden was impaired to nil based on Level 2 inputs. Accordingly, the Company recorded an impairment charge of $0.33 million, which is included in "Net Income from Discontinued Operations" for the year ended December 31, 2021. In November 2022, the lock-up restriction on the Company's shares in Edible Garden expired and accordingly, the Company's investment transferred from Level 2 to Level 1 fair value measurement. The following tables present the Company’s financial instruments that are measured and recorded at fair value on the Company’s balance sheets on a recurring basis, and their level within the fair value hierarchy as of December 31, 2022: December 31, 2022 Amount Level 1 Level 2 Level 3 Investment in Edible Garden Corp. $ 210 $ 210 $ — $ — |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS All related party transactions are monitored quarterly by the Company and approved by the Audit Committee of the Board of Directors. Refer to “Note 13 – Notes Payable" for related party transactions and balances during the current period. On July 1, 2021, the Company entered into a Membership Interest Purchase Agreement with Nicholas Kovacevich and Dallas Imbimbo, pursuant to which the Company acquired 100% of the outstanding membership interests in Halladay Holding, LLC from Mr. Kovacevich and Mr. Imbimbo. Halladay Holding, LLC is the owner of real property located at 3242 S. Halladay Street, Santa Ana, CA 92705, where the Company operates a cannabis dispensary and maintains its principal office space. Pursuant to the Purchase Agreement, as consideration for the Acquisition, the Company paid Mr. Kovacevich and Mr. Imbimbo an aggregate purchase price of $4.60 million in cash. The Company had an independent third-party perform a valuation of the Property prior to entering into the Purchase Agreement. Mr. Kovacevich is a director of the Company and Mr. Imbimbo was a director of the Company. As such, the Acquisition is a related party transaction. During the years ended December 31, 2022 and 2021, the Company contracted for nil and $0.45 million, respectively, in goods and services of Greenlane Holdings, Inc. Mr. Kovacevich, a director of the Company, is the Chief Executive Officer of Greenlane Holdings, Inc. On August 12, 2022, the Company entered into an engagement letter with Adnant, LLC (“Adnant”) pursuant to which Adnant provides executive level consulting and related business support and services related to the Company’s present and future challenges and opportunities. As compensation for the Adnant’s continued services and on achieving identified performance objectives as described in the engagement letter, Adnant is entitled to receive fees of $0.15 million monthly subject to the Company having available a cash balance greater than or equal to $1.20 million following payment of the fee and a performance bonus award subject to achievement of the performance objectives as set forth in more detail in the engagement letter. Pursuant to the engagement letter, the board of directors appointed Sabas Carrillo, the Founder and Chief Executive Officer (“CEO”) of Adnant, as Interim Chief Executive Officer. On August 22, 2022 and September 12, 2022, the Company appointed Robert Baca as Interim Chief Legal Officer and Patty Chan as Interim Chief Financial Officer of the Company, respectively. On December 23, 2022, the Company’s board of directors appointed Mr. Carrillo as the Chief Executive Officer of the Company. The engagement letter provided that, in the event that prior to December 31, 2022 the Interim CEO’s service is terminated by the Company other than for “Cause” (as defined in the Adnant engagement letter), then 100% of the performance bonus award shares will be released to Adnant from the performance bonus award trust subject to the execution and non-revocation of a release of claims by the Interim CEO and Adnant in the form provided by the Company and reasonably agreed by Adnant. The engagement services commenced on August 12, 2022 and the engagement remained in effect through December 31, 2022. Upon the expiration of the engagement letter, the engagement shall automatically renew for subsequent three-month periods unless, at least 30 days prior to the renewal date, either the Company or Adnant provides written notice of termination. During the period from the initial engagement through December 31, 2022, the Company has incurred a total of $0.75 million in fees and issued 16,181,230 common shares under the performance bonus award valued at $0.57 million. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIESCalifornia Operating LicensesThe Company's entities have operated compliantly and have been eligible for applicable licenses and renewals of those licenses. |
LITIGATION AND CLAIMS
LITIGATION AND CLAIMS | 12 Months Ended |
Dec. 31, 2022 | |
Litigation Settlement [Abstract] | |
LITIGATION AND CLAIMS | Litigation and Claims The Company is the subject of lawsuits and claims arising in the ordinary course of business from time to time. The Company reviews any such legal proceedings and claims on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and it discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued if such disclosure is necessary for the Company’s financial statements to not be misleading. To estimate whether a loss contingency should be accrued by a charge to income, the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss. The Company does not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated. Based upon present information, the Company determined that there was one matter that required an accrual as of December 31, 2022. Accordingly, the Company has accrued $0.50 million for the Magee litigation detailed below. Magee v. UMBRLA, Inc. et al. - The Company is currently involved in a breach of contract action brought by former LTRMN, Inc. (“LTRMN”) employee, Kurtis Magee, which was filed by Mr. Magee in the Superior Court of the State of California, County of Orange, on July 21, 2020. Mr. Magee alleges breach of contract in connection with Mr. Magee’s separation agreement with LTRMN. Trial in this matter is set for April of 2024. Terra Tech Corp. v. National Fire & Marine Ins. Co., et al. - On or about December 6, 2021, the Company initiated an action in California Superior Court, County of Alameda, against National Fire & marine Insurance Company (“National Fire”), Woodruff-Sawyer & Co., and R-T Specialty, LLC in connection with the denial of an insurance claim by National Fire following the vandalism and looting of the Company’s Bay Area dispensaries in May 2020. The Company alleges that coverage levels for the Company were changed after the policy was bound, in a manner inconsistent with the binder, which prevented the Company from fully recovering its losses in connection with the incidents. A case management conference is set for April 25, 2023. Unrivaled Brands, Inc. et al v. Mystic Holdings, Inc., et al. - On May 11, 2022, Unrivaled and its wholly-owned subsidiary, Medifarm I, LLC (“Plaintiffs”) initiated an action in the Second Judicial District of the State of Nevada, County of Washoe, against Mystic Holdings, Inc. (“Mystic”) and Picksy Reno LLC (collectively with Mystic, “Defendants”) in connection with Defendants’ failure to honor Plaintiffs’ exercise of a put option entitling Plaintiffs to the repurchase of approximately 8,332,096 shares of Mystic at a price of $1.00 per share. No proceedings have yet been held in this matter and a trial date has proposed to be scheduled in September 2023. Fusion LLF, LLC v. Unrivaled Brands, Inc. - On June 27, 2022, Fusion LLF, LLC filed an action against the Company, Fusion LLF, LLC v. Unrivaled Brands, Inc., Superior Court for the State of California, County of Orange Case No. 30-2022-01266856-CU-BC-CJC alleging claims for breach of contract, account stated, and right to attach order and writ of attachment. The complaint claims at least $4.55 million in damages. On August 11, 2022, the Company filed an answer to the complaint. On August 5, 2022, Fushion LLF, LLC filed an application for a right to attach order and writ of attachment, which was denied on December 9, 2022. People's California, LLC v. Unrivaled Brands, Inc. - On July 19, 2022, People’s California, LLC, the sellers of Peoples First Choice, filed an action against the Company, styled, People’s California, LLC v. Unrivaled Brands, Inc., in the Superior Court for the State of California, County of Orange Case No. 30-2022-01270747-CU-BC-CJC, bringing claims for breach of contract and breach of the covenant of good faith and fair dealing stemming from the Company’s alleged breach of certain agreements with People’s California, LLC. The complaint claims at least $23.00 million in damages. On September 20, 2022, the Company filed a cross-complaint in the matter in November 2021. The Company was seeking a minimum of $5.40 million in damages. On March 6, 2023, the parties entered into a binding term sheet to settle the litigation. The litigation in stayed pending final documentation of the settlement agreement. The litigation is expected to be dismissed in the next 180 days. People's California, LLC v. Kovacevich, et al. - On August 1, 2022, People’s California, LLC filed an action against certain current and former officers and directors of the Company, styled People’s California, LLC v. Nicholas Kovacevich, et al, in the Superior Court for the State of California, County of Orange Case No. 30-2022-01272843-CU-MC-CJC, derivatively on behalf of the Company and listing the Company as a nominal defendant alleging claims for breach of fiduciary duty, abuse of control, self-dealing, corporate waste, and unjust enrichment based on a series of corporate transactions and management decisions. The Complaint does not state a specific claim for damages. On March 6, 2023, the parties entered into a binding term sheet to settle the litigation. The litigation in stayed pending final documentation of the settlement agreement. The litigation is expected to be dismissed in the next 180 days. Greenlane Holdings, LLC v. Unrivaled Brands, Inc. - On February 6, 2023, Greenlane Holdings, LLC, a related party filed an action against the Company in the Superior Court of the State of California, County of Los Angeles Case No. 30-2023-01306675-CU-BC-NJC, alleging claims for breach of contract, account stated, and unjust enrichment. The complaint alleges damages of $0.40 million. The Company has not yet responded to the complaint. Because no conclusion has been formed as to whether an unfavorable outcome is either probable or remote, no opinion is expressed as to the likelihood of an unfavorable outcome or the amount or range of any possible loss to the Company. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Executive-Led Private Placement In January 2023, the Company entered into Securities Purchase Agreements with certain investors (each a “Purchaser”), including Sabas Carrillo, the Company’s Chief Executive Officer, Patty Chan, the Company’s Interim Chief Financial Officer, and Robert Baca, the Company’s Interim Chief Legal Officer. Pursuant to the SPA, the Company issued (i) 14,071,431 shares of Series V Preferred Stock at $0.14 per share which is equal to the closing share price of the Company’s common stock (the “Common Stock”) on December 30, 2022 on an as-converted-to-common stock-basis of 10 shares of common stock for each one share of Series V Preferred Stock or $0.014 per share of Common Stock and (ii) 70,357,155 warrants (the “Warrants”) to purchase up to 70,357,155 of Common Stock with an exercise price of $0.028 or equivalent to two times the as-converted-to-common stock purchase price of $0.014. The Company received total gross proceeds of $1.97 million from the private placement transaction (the “Private Placement”). Litigation Updates 1149 South LA Street Fashion District, LLC vs Unrivaled Brands, Inc. - On January 30, 2023, 1149 South LA Street Fashion District, LLC and 1135 South LA Street Fashion District LLC filed an action against the Company and other defendants in the Superior Court of the State of California, County of Los Angeles Case No. 23STCV01994, alleging claims for breach of written contract, breach of written guaranty, breach of implied covenant of good faith and fair dealing, waste, and declaratory relief. The complaint claims at least $0.58 million in damages. The Company has not yet responded to the complaint. Because no conclusion has been formed as to whether an unfavorable outcome is either probable or remote, no opinion is expressed as to the likelihood of an unfavorable outcome or the amount or range of any possible loss to the Company. Banking Environment Silicon Valley Bank (“SVB”) and Signature Bank was closed on March 10, 2023 and March 12, 2023, respectively, by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. At the time of closing, the Company did not maintain any of its cash and cash equivalents with SVB or Signature. The Company maintains cash balances at its physical locations, which are not currently insured, and with various U.S. banks and credit unions and does not have any balance in excess of the Federal Deposit Insurance Corporation and National Credit Union Share Insurance Fund limits, respectively. The Company does not believe it will be impacted by the closure of SVB and Signature Bank and will continue to monitor the situation as it evolves. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and with the instructions to U.S. Securities Exchange Commission (“SEC”) Form 10-K and Regulation S-X of the Securities Act of 1933 and reflect the accounts and operations of the Company and those of its subsidiaries in which the Company has a controlling financial interest. In accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, “Consolidation” , the Company consolidates any variable interest entity (“VIE”) of which it is the primary beneficiary. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. ASC 810 requires a variable interest holder to consolidate a VIE if that party has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company does not consolidate a VIE in which it has a majority ownership interest when it is not considered the primary beneficiary. The Company evaluates its relationships with all the VIEs on an ongoing basis to reassess if it continues to be the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial position of the Company as of December 31, 2022 and 2021, and the consolidated results of operations and cash flows for the years ended December 31, 2022 and 2021 have been included. |
Going Concern | Going Concern The Company has incurred significant losses in prior periods. As of and for the years ended December 31, 2022 and 2021, the Company incurred a pre-tax net loss from continuing operations of $195.63 million and $41.18 million, respectively, and an accumulated deficit of $440.05 million and $250.02 million, respectively. At December 31, 2022, the Company had a consolidated cash balance of $1.20 million. Management expects to experience further net losses in 2023 and in the foreseeable future. The Company has not been able to generate sufficient cash from operating activities to fund its ongoing operations. The Company's future success is dependent upon its ability to achieve profitable operations and generate cash from operating activities. There is no guarantee that the Company will be able to generate enough revenue or raise capital to support its operations. The Company will be required to raise additional funds through public or private financing, additional collaborative relationships or other arrangements until it is able to raise revenues to a point of positive cash flow. The Company is evaluating various options to further reduce its cash requirements to operate at a reduced rate, as well as options to raise additional funds, including obtaining loans and selling common stock. There is no guarantee that it will be able to generate enough revenue or raise capital to support its operations, or if it is able to raise capital, that it will be available to the Company on acceptable terms, on an acceptable schedule, or at all. The issuance of additional securities may result in a significant dilution in the equity interests of the Company's current stockholders. Obtaining loans, assuming these loans would be available, will increase the Company's liabilities and future cash commitments. There is no assurance that the Company will be able to obtain further funds required for its continued operations or that additional financing will be available for use when needed or, if available, that it can be obtained on commercially reasonable terms. If the Company is not able to obtain the additional financing on a timely basis, it will not be able to meet its other obligations as they become due and the Company will be forced to scale down or perhaps even cease its operations. The risks and uncertainties surrounding the Company's ability to continue to raise capital and its limited capital resources raise substantial doubt as to the Company's ability to continue as a going concern for twelve months from the issuance of these financial statements. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. In an effort to achieve liquidity that would be sufficient to meet all of its commitments, the Company has undertaken a number of actions, including minimizing capital expenditures and reducing recurring expenses. However, management believes that even after taking these actions, the Company will not have sufficient liquidity to satisfy all of its future financial obligations. The risks and uncertainties surrounding the ability to raise capital, the limited capital resources, and the weak industry conditions impacting the Company’s business raise substantial doubt as to its ability to continue as a going concern. |
Non-Controlling Interest | Non-Controlling Interest Non-controlling interest is shown as a component of stockholders’ equity on the consolidated balance sheets and the share of income (loss) attributable to non-controlling interest is shown as a component of income (loss) in the consolidated statements of operations. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of total net revenue and expenses in the reporting periods. The Company regularly evaluates estimates and assumptions related to allowances for doubtful accounts, sales returns, inventory valuation, stock-based compensation expense, goodwill and purchased intangible asset valuations, investments, deferred income tax asset valuation allowances, uncertain tax positions, and litigation and other loss contingencies. These estimates and assumptions are based on current facts, historical experience and various other factors that the Company believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue, costs and expenses that are not readily apparent from other sources. The actual results the Company experiences may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications did not affect net loss, revenues and stockholders’ equity. See "Note 19 - Discontinued Operations” |
Trade Receivables | Trade Receivables The Company extends non-interest bearing trade credit to its customers in the ordinary course of business which is not collateralized. Accounts receivable are shown on the face of the consolidated balance sheets, net of an allowance for doubtful accounts. The Company analyzes the aging of accounts receivable, historical bad debts, customer creditworthiness and current economic trends, in determining the allowance for doubtful accounts. The Company does not accrue interest receivable on past due accounts receivable. The reserve for doubtful accounts was nil and $3.00 million as of December 31, 2022 and 2021, respectively. |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value, with cost being determined on the first-in, first-out (“FIFO”) method of accounting. The Company periodically reviews physical inventory for excess, obsolete, and potentially impaired items and reserves. The reserve estimate for excess and obsolete inventory is based on expected future use. The reserve estimates have historically been consistent with actual experience as evidenced by actual sale or disposal of the goods. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses consist of various payments that the Company has made in advance for goods or services to be received in the future. These prepaid expenses include advertising, insurance, and service or other contracts requiring upfront payments. |
Investments | Investments Investments in unconsolidated affiliates are accounted for under the cost or the equity method of accounting, as appropriate. The Company accounts for investments in limited partnerships or limited liability corporations, whereby the Company owns a minimum of 5% of the investee's outstanding voting stock, under the equity method of accounting. These investments are recorded at the amount of the Company’s investment and adjusted each period for the Company’s share of the investee’s income or loss, and dividends paid. As investments accounted for under the cost method do not have readily determinable fair values, the Company only estimates fair value if there are identified events or changes in circumstances that could have a significant adverse effect on the investment’s fair value. Publicly held equity securities are recorded at fair value with unrealized gains or losses resulting from changes in fair value reflected as unrealized gains or losses on equity securities in our consolidated statements of operations. |
Notes Receivable | Notes Receivable The Company reviews all outstanding notes receivable for collectability as information becomes available pertaining to the Company’s inability to collect. An allowance for notes receivable is recorded for the likelihood of non-collectability. The Company accrues interest on notes receivable based net realizable value. The allowance for uncollectible notes was nil as of December 31, 2022 and 2021. |
Property, Equipment and Leasehold Improvements | Property, Equipment and Leasehold Improvements Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The approximate useful lives for depreciation of our property, equipment and leasehold improvements are as follows: Buildings 32 years Furniture and Equipment 3 to 8 years Computer and Software 3 to 5 years Vehicles 5 years Leasehold Improvements Shorter of lease term or economic life Repairs and maintenance expenditures that do not extend the useful lives of related assets are expensed as incurred. Expenditures for major renewals and improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. The Company continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, “Property, Plant, and Equipment” ("ASC 360"). When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. See “Note 7 – Property, Equipment and Leasehold Improvements” for further information. |
Intangible Assets | Intangible Assets Intangible assets continue to be subject to amortization, and any impairment is determined in accordance with ASC 360. Intangible assets are stated at historical cost and amortized over their estimated useful lives. The Company uses a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. The approximate useful lives for amortization of our intangible assets are as follows: Customer Relationships 3 to 5 years Trademarks 2 to 8 years Dispensary Licenses 14 years The Company reviews intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, amortizable intangible assets are grouped with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the asset group exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the asset group, the Company will write the carrying value down to the fair value in the period identified. Intangible assets that have indefinite useful lives (e.g. trade names) are tested annually for impairment, or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount of the asset group exceeds its fair value. |
Goodwill | Goodwill Goodwill is measured as the excess of consideration transferred and the net of the acquisition date fair value of assets acquired, and liabilities assumed in a business acquisition. Goodwill is assigned to the reporting unit, which is the operating segment level or one level below the operating segment. In accordance with ASC 350, “Intangibles—Goodwill and Other,” goodwill and other intangible assets with indefinite lives are no longer subject to amortization but are tested for impairment annually or whenever events or changes in circumstances indicate that the asset might be impaired. The Company reviews the goodwill allocated to each of our reporting units for possible impairment annually as of September 30, and whenever events or changes in circumstances indicate carrying amount may not be recoverable. In the impairment test, the Company measures the recoverability of goodwill by comparing a reporting unit’s carrying amount, including goodwill, to the estimated fair value of the reporting unit. The carrying amount of each reporting unit is determined based upon the assignment of our assets and liabilities, including existing goodwill and other intangible assets, to the identified reporting units. Where an acquisition benefits only one reporting unit, the Company allocates, as of the acquisition date, all goodwill for that acquisition to the reporting unit that will benefit. Where the Company has had an acquisition that benefited more than one reporting unit, the Company has assigned the goodwill to our reporting units as of the acquisition date such that the goodwill assigned to a reporting unit is the excess of the fair value of the acquired business, or portion thereof, to be included in that reporting unit over the fair value of the individual assets acquired and liabilities assumed that are assigned to the reporting unit. If the carrying amount of a reporting unit is in excess of its fair value, the Company recognizes an impairment charge equal to the amount in excess. |
Business Combinations | Business Combinations The Company accounts for its business acquisitions in accordance with ASC 805-10, “ Business Combinations. ” The Company allocates the total cost of the acquisition to the underlying net assets based on their respective estimated fair values. As part of this allocation process, the Company identifies and attributes values and estimated lives to the intangible assets acquired. These determinations involve significant estimates and assumptions regarding multiple, highly subjective variables, including those with respect to future cash flows, discount rates, asset lives, and the use of different valuation models, and therefore require considerable judgment. The Company’s estimates and assumptions are based, in part, on the availability of listed market prices or other transparent market data. These determinations affect the amount of amortization expense recognized in future periods. The Company bases its fair value estimates on assumptions it believes to be reasonable but are inherently uncertain. |
Assets Held for Sale and Discontinued Operations | Assets Held for Sale Assets held for sale represent property, equipment, and leasehold improvements less accumulated depreciation as well as any other assets that are held for sale in conjunction with the sale of a business. The Company records assets held for sale in accordance with ASC 360 at the lower of carrying value or fair value less costs to sell. Fair value is the amount obtainable from the sale of the asset in an arm’s length transaction. The reclassification takes place when the assets are available for immediate sale and the sale is highly probable. These conditions are usually met from the date on which a letter of intent or agreement to sell is ready for signing. Discontinued Operations A component of an entity is identified as operations and cash flows that can be clearly distinguished, operationally and financially, from the rest of the entity. Under ASC Subtopic 205-20, “Presentation of Financial Statements - Discontinued Operations” (“ASC Subtopic 205-20”), a discontinued operation is a component of an entity that either has been disposed of, or is classified as held for sale and represents a strategic shift that has or will have a major effect on the entity’s operations and financial results, or a newly acquired business or nonprofit activity that upon acquisition is classified as held for sale. Discontinued operations are presented separately from continuing operations in the consolidated Statements of Operations and the Consolidated Statements of Cash Flows. See “ Note 19 – Discontinued Operations ”. For long-lived assets or disposals groups that are classified as held for sale but do not meet the criteria for discontinued operations, the assets and liabilities are presented separately on the balance sheet of the initial period in which it is classified as held for sale. |
Revenue Recognition | Revenue Recognition Revenue from retail dispensaries is recorded at the time customers take possession of the product and recognized net of discounts, promotional adjustments, and returns. The Company collects taxes on certain revenue transactions to be remitted to governmental authorities, which may include sales, excise and local taxes. These taxes are not included in the transaction price and are, therefore, excluded from revenue. Upon purchase, the Company has no further performance obligations and collection is assured as sales are paid for at time of purchase. The Company recognizes revenue from cultivation, manufacturing and distribution product sales when its customers obtain control of the products. This determination is based on the customer specific terms of the arrangement and gives consideration to factors including, but not limited to, whether the customer has an unconditional obligation to pay, whether a time period or event is specified in the arrangement and whether the Company can mandate the return or transfer of the products. Revenue is recorded net of taxes collected from customers that are remitted to governmental authorities with collected taxes recorded as current liabilities until remitted to the relevant government authority. Disaggregation of Revenue Please refer to the consolidated statements of operations and " Note 20 - Segment Information" for discussion on revenue disaggregation by segment. The Company believes this level of disaggregation sufficiently depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold includes the costs directly attributable to product sales and includes amounts paid for finished goods, such as flower, edibles, and concentrates, as well as packaging and delivery costs. It also includes the labor and overhead costs incurred in cultivating and producing cannabis flower and cannabis-derived products. Overhead expenses include allocations of rent, administrative salaries, utilities, and related costs. |
Advertising Expenses | Advertising Expenses The Company expenses advertising costs as incurred in accordance with ASC 720-35, “Other Expenses – Advertising Cost.” Advertising expenses from continuing operations totaled $2.12 million and $1.27 million for the years ended December 31, 2022 and 2021, respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for its stock-based awards in accordance with ASC Subtopic 718-10, “Compensation – Stock Compensation”, which requires fair value measurement on the grant date and recognition of compensation expense for all stock-based payment awards made to employees and directors, including restricted stock awards. For stock options, the Company estimates the fair value using a closed option valuation (Black-Scholes) model. The fair value of restricted stock awards is based upon the quoted market price of the common shares on the date of grant. The fair value is then expensed over the requisite service periods of the awards, net of estimated forfeitures, which is generally the performance period and the related amount is recognized in the consolidated statements of operations. The Black-Scholes option-pricing model requires the input of certain assumptions that require the Company’s judgment, including the expected term and the expected stock price volatility of the underlying stock. The assumptions used in calculating the fair value of stock-based compensation represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change resulting in the use of different assumptions, stock-based compensation expense could be materially different in the future. The Company accounts for forfeitures of stock-based awards as they occur. |
Income Taxes | Income Taxes The provision for income taxes is determined in accordance with ASC 740, “Income Taxes” . The Company files a consolidated United States federal income tax return. The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. At December 31, 2021, we have released the valuation allowance due to net deferred tax liability position. The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50.0% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations. |
Loss Per Common Share | Loss Per Common Share In accordance with the provisions of ASC 260, “Earnings Per Share,” net loss per share is computed by dividing net loss by the weighted-average shares of common stock outstanding during the period. During a loss period, the effect of the potential exercise of stock options, warrants, convertible preferred stock, and convertible debt are not considered in the diluted loss per share calculation since the effect would be anti-dilutive. The results of operations were a net loss for the years ended December 31, 2022 and 2021. Therefore, the basic and diluted weighted-average shares of common stock outstanding were the same for all years presented. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 –Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value. The Company has not elected the fair value option for any eligible financial instruments. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standard s In May 2021, the FASB issued ASU 2021-04, “Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)” (“ASU 2021-04”), which amends existing guidance for earnings per share (“EPS”) in accordance with Topic 260. ASU 2021-04 is effective for fiscal years beginning after December 15, 2021 and should be applied prospectively on or after the effective date of the amendments. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Standard s In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Subtopic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”), which is intended to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022. This update should be applied prospectively on or after the effective date of the amendments. The Company is currently evaluating the effect of adopting this ASU. In March 2022, the FASB issued ASU 2022-02, “Financial Instruments—Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”), which eliminates the accounting guidance on troubled debt restructurings (TDRs) for creditors and amends the guidance on “vintage disclosures” to require disclosure of current-period gross write-offs by year of origination. The ASU also updates the requirements related to accounting for credit losses under the current guidance and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial difficulty. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022. The Company is currently evaluating the effect of adopting this ASU. In June 2022, the FASB issued ASU 2022-03, "Fair Value Measurements—Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (Topic 820)" . ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. It also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. For public business entities, the ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the effect of adopting this ASU. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Property, Plant and Equipment | The approximate useful lives for depreciation of our property, equipment and leasehold improvements are as follows: Buildings 32 years Furniture and Equipment 3 to 8 years Computer and Software 3 to 5 years Vehicles 5 years Leasehold Improvements Shorter of lease term or economic life Property, equipment, and leasehold improvements as of December 31, 2022 and 2021 consisted of the following: (in thousands) December 31, December 31, Land and Building $ 7,581 $ 7,787 Furniture and Equipment 1,336 3,205 Computer Hardware 299 348 Leasehold Improvements 8,009 14,357 Vehicles 103 1,027 Construction in Progress 2,565 1,832 Subtotal 19,893 28,556 Less Accumulated Depreciation (6,893) (5,392) Property, Equipment and Leasehold Improvements, Net $ 13,000 $ 23,164 |
Finite-lived Intangible Assets Amortization Expense | The approximate useful lives for amortization of our intangible assets are as follows: Customer Relationships 3 to 5 years Trademarks 2 to 8 years Dispensary Licenses 14 years |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Potentially dilutive securities that are not included in the calculation of diluted net loss per share because their effect is anti-dilutive are as follows (in common equivalent shares): Year Ended December 31, 2022 2021 Common stock warrants 80,881,817 30,677,637 Common stock options 52,821,099 88,251,380 133,702,916 118,929,017 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventory as of December 31, 2022 and 2021 consisted of the following: (in thousands) December 31, December 31, Raw Materials $ 524 $ 2,258 Work-In-Progress 284 1,077 Finished Goods 1,131 2,845 Total Inventory $ 1,939 $ 6,180 |
PROPERTY EQUIPMENT AND LEASEH_2
PROPERTY EQUIPMENT AND LEASEHOLD IMPROVEMENTS NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | The approximate useful lives for depreciation of our property, equipment and leasehold improvements are as follows: Buildings 32 years Furniture and Equipment 3 to 8 years Computer and Software 3 to 5 years Vehicles 5 years Leasehold Improvements Shorter of lease term or economic life Property, equipment, and leasehold improvements as of December 31, 2022 and 2021 consisted of the following: (in thousands) December 31, December 31, Land and Building $ 7,581 $ 7,787 Furniture and Equipment 1,336 3,205 Computer Hardware 299 348 Leasehold Improvements 8,009 14,357 Vehicles 103 1,027 Construction in Progress 2,565 1,832 Subtotal 19,893 28,556 Less Accumulated Depreciation (6,893) (5,392) Property, Equipment and Leasehold Improvements, Net $ 13,000 $ 23,164 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets as of December 31, 2022 and 2021 consisted of the following: (in thousands) December 31, 2022 December 31, 2021 Estimated Useful Life Gross Accumulated Amortization Net Gross Accumulated Amortization Net Amortizing Intangible Assets: Customer Relationships 3 to 5 $ 7,400 $ (7,400) $ — $ 7,400 $ (7,400) $ — Trademarks and Patent 2 to 8 4,500 (2,991) 1,509 4,500 (750) 3,750 Operating Licenses 14 12,239 (12,239) — 100,701 (6,864) 93,837 Total Amortizing Intangible Assets 24,139 (22,630) 1,509 112,601 (15,014) 97,587 Non-Amortizing Intangible Assets: Trade Names Indefinite 1,350 — 1,350 32,050 — 32,050 Total Non-Amortizing Intangible Assets 1,350 — 1,350 32,050 — 32,050 Total Intangible Assets, Net $ 25,489 $ (22,630) $ 2,859 $ 144,651 $ (15,014) $ 129,637 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying amount of goodwill during the periods presented were as follows: (in thousands) Balance at December 31, 2020 $ 6,171 Acquisitions 48,132 Impairment Losses (6,171) Balance at December 31, 2021 48,132 Impairment Losses (44,547) Balance at December 31, 2022 $ 3,585 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | There were no acquisitions completed during the year ended December 31, 2022. A summary of business combinations completed during the year ended December 31, 2021 is as follows: Year Ended December 31, 2021 UMBRLA, Inc. People's California SilverStreak Solutions Total Cash Consideration $ — $ 24,000 $ 1,500 $ 25,500 Note Payable — 33,749 4,500 38,249 Liability for Holdback Shares 6,465 — — 6,465 Equity Consideration - Common Stock 52,929 16,000 2,500 71,429 Equity Consideration - Options & Warrants 20,428 — — 20,428 Less: Cash Transferred (1,290) (994) (25) (2,309) Total Consideration $ 78,532 $ 72,755 $ 8,475 $ 159,762 Assets Acquired: Accounts Receivable $ 3,772 $ — $ — $ 3,772 Inventory 6,532 662 214 7,408 Prepaid Expenses & Other Assets 1,543 74 6 1,623 Notes Receivable 750 — — 750 Property, Equipment and Leasehold Improvements 1,450 554 257 2,261 Right-of-Use Asset 460 2,105 — 2,565 Intangible Assets 71,890 54,010 161 126,061 Other Long-Term Assets 3 — — 3 Total Assets Acquired 86,400 57,405 638 144,443 Liabilities Assumed: Accounts Payable & Accrued Liabilities 15,849 2,586 1,517 19,952 Lease Liabilities 460 2,105 — 2,565 Notes Payable 5,470 — — 5,470 Deferred Tax Liabilities 499 954 14 1,467 Uncertain Tax Position / Taxes Payable 1,806 — 1,553 3,359 Total Liabilities Assumed 24,084 5,645 3,084 32,813 Estimated Fair Value of Net Assets Acquired 62,316 51,760 (2,446) 111,630 Estimated Goodwill $ 16,216 $ 20,995 $ 10,921 $ 48,132 Pro Forma Net Income (Loss) (1) $ (36,454) Pro Forma Revenues (1) $ 95,867 (1) Supplemental information on an unaudited pro-forma basis is reflected as if the acquisitions had occurred on January 1, 2021, after giving effect to certain pro-forma adjustments primarily related to the amortization of acquired intangible assets. The unaudited pro-forma supplemental information is based on estimates and assumptions that the Company believes are reasonable. The supplemental unaudited pro-forma financial information is presented for comparative purposes only and is not necessarily indicative of what the Company’s financial position or results of operations actually would have been had the Company completed the acquisitions at the dates indicated, nor is it intended to project the future financial position or operating results of the Company as a result of the Purchase Agreement. |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued expenses consisted of the following: (in thousands) December 31, December 31, Accounts Payable $ 12,990 $ 15,629 Tax Liabilities 1,018 4,865 Accrued Payroll and Benefits 628 1,327 Current Lease Liabilities 1,996 3,041 Accrued Interest 2,113 833 Other Accrued Expenses 665 4,543 Total Accounts Payable and Accrued Expenses $ 19,410 $ 30,238 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Operating Lease ROU Assets and Lease Liabilities | The table below presents total operating right-of-use assets and lease liabilities as of December 31, 2022 and 2021: (in thousands) December 31, 2022 December 31, 2021 Operating Lease Right-of-Use Assets $ 13,946 $ 23,978 Operating Lease Liabilities $ 15,084 $ 23,950 |
Schedule of Maturities of Operating Lease Liabilities | The table below presents the maturities of operating lease liabilities as of December 31, 2022: Year Ending December 31, (in thousands) 2023 $ 2,722 2024 2,817 2025 2,353 2026 1,891 2027 1,831 Thereafter 8,934 Total Lease Payments 20,548 Less: Discount (5,464) Total Operating Lease Liabilities $ 15,084 |
Operating Lease Costs | The table below presents the weighted average remaining lease term for operating leases and weighted average discount rate used in calculating operating lease right-of-use assets: December 31, December 31, Weighted Average Remaining Lease Term (Years) 8.50 9.20 Weighted Average Discount Rate 11.7 % 11.5 % |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Payable [Abstract] | |
Schedule of Debt | Notes payable consists of the following: (in thousands) December 31, December 31, Promissory note dated January 18, 2018, issued for the purchase of real property. The promissory note was collateralized by the land and building purchased and matured January 18, 2022. The promissory note bears interest at 12.0% for year one and escalates 0.5% per year thereafter. — $ 6,500 Promissory note dated May 4, 2020, issued to Harvest Small Business Finance, LLC, an unaffiliated third party. Loan was part of the Paycheck Protection Program ("PPP Loan") offered by the U.S. Small Business Administration. The interest rate on the note was 1.0%. The note required interest and principal payments seven months from July 2020. The note matured on May 4, 2022. 14 562 Unsecured promissory note dated January 22, 2021, issued to Michael Nahass (a related party), which matured January 25, 2022, and bore interest at a rate of 3.0% per annum. — 1,050 Convertible promissory note dated January 25, 2021, issued to accredited investors, which matured July 22, 2022 and bears interest at a rate of 3.0% per annum. The conversion price is $0.175 per share. 3,450 3,500 Promissory note dated July 27, 2021, issued to Arthur Chan, which matures July 26, 2024, and bears interest at a rate of 8% per annum. 2,500 2,500 Senior Secured Promissory Note dated November 22, 2021 issued to Dominion Capital LLC, which matured on February 22, 2022 and bore interest at a rate of 12.0% per annum. — 2,500 Unsecured promissory note dated December 28, 2022 due to a related party. The interest rate on the note is 1% and matures on December 28, 2027. 154 90 Promissory note dated June 1, 2020, issued as part of the Paycheck Protection Program ("PPP Loan") offered by the U.S. Small Business Administration. The interest rate on the note is 1.0%. The note matured on June 1, 2022. — — Line of credit agreement entered on March 31, 2021, which matured on March 31, 2022 and bore interest of 2.9% per 30 days. — 4,500 Promissory note dated October 1, 2021, issued to Sterling Harlan as part of the SilverStreak Solutions acquisition. The interest rate on the note was 3%. The note matured on April 1, 2022. 2,000 2,000 Promissory note dated October 1, 2021, issued to Sterling Harlan as part of the SilverStreak Solutions acquisition. The interest rate on the note is 3%. The note matured on October 1, 2022. 2,500 2,500 Secured promissory note dated November 22, 2021 issued to People's California, LLC, which matures on November 22, 2023 and bears interest at a rate of 8% per annum. Payments due include $2.00 million plus accrued interest for the first twelve months followed by payments of $1.00 million plus accrued interest until maturity. 21,569 28,569 Promissory note dated May 1, 2019, assumed by the Company on July 1, 2021 in connection with the purchase of real property, from a related party. The note matures on May 15, 2039 and bears interest at a rate of 9.89% per annum. 2,882 2,954 Notes Payable - Promissory Notes $ 35,069 $ 57,225 Vehicle Loans 76 178 Less: Short-Term Debt (29,662) (45,451) Less: Debt Discount (669) (1,946) Net Long-Term Debt $ 4,814 $ 10,006 |
Schedule of Maturities of Long-term Debt | Scheduled maturities of debt as of December 31, 2022 are as follows: Year Ending December 31, (in thousands) 2023 $ 29,662 2024 2,505 2025 5 2026 5 2027 159 Thereafter 2,809 Total Future Principal Repaymets $ 35,145 |
STOCKBASED COMPENSATION (Tables
STOCKBASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The following table contains information about both plans as of December 31, 2022: Awards Awards Awards Awards 2016 Equity Incentive Plan 999,906 — 499,953 499,953 2018 Equity Incentive Plan 29,920,933 4,022,133 13,326,509 12,572,291 2019 Equity Incentive Plan 61,109,696 34,884 37,617,531 23,457,281 Stock-Based Compensation Expense The following table sets forth the total stock-based compensation expense resulting from stock options and restricted grants of common stock to employees, directors and non-employee consultants in the consolidated statement of operations which are included in selling, general and administrative expenses: (in thousands, except for number of shares or options) December 31, 2022 December 31, 2021 Type of Award Number of Stock-Based Compensation Number of Stock- Stock Options 1,075,001 $ 3,659 89,930,019 $ 2,415 Stock Grants: Employees (Common Stock) 2,100,000 352 250,000 68 Directors (Common Stock) 943,128 213 1,917,837 495 Non–Employee Consultants (Common Stock) 16,906,230 695 4,556,603 1,079 Total Stock–Based Compensation Expense $ 4,919 $ 4,057 Year Ended December 31, 2022 2021 Expected Term 5.2 years 5 years Volatility 103.0 % 106.7 % Risk-Free Interest Rate 0.9 % 0.8 % Dividend Yield 0 % 0 % |
Share-based Payment Arrangement, Option, Activity | The following table summarizes the Company’s stock option activity and related information for the years ended December 31, 2022 and 2021: Number Weighted- Weighted- Aggregate Options Outstanding as of December 31, 2020 17,492,830 $ 0.41 Granted 88,627,220 $ 0.23 Exercised (3,910,805) $ — Forfeited (13,547,745) $ 0.15 Expired (410,120) $ 0.41 Options Outstanding as of December 31, 2021 88,251,380 $ 0.20 Granted 1,075,001 $ 0.14 Exercised (146,212) $ 0.07 Forfeited (19,365,073) $ 0.13 Expired (16,993,997) $ 0.17 Options Outstanding as of December 31, 2022 52,821,099 $ 0.23 7.9 years $ 2,846 Options Exercisable as of December 31, 2022 36,825,119 $ 0.27 7.6 years $ — |
WARRANTS (Tables)
WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of Stockholders' Equity Note, Warrants or Rights | The following table summarizes warrant activity for the years ended December 31, 2022 and 2021: Warrants Weighted- Warrants Outstanding as of December 31, 2020 1,076,555 $ 1.99 Issued 85,336,515 $ 0.08 Exercised (586,198) $ 0.07 Warrants Outstanding as of December 31, 2021 85,826,872 $ 0.22 Exercised (4,945,055) $ 0.01 Warrants Outstanding as of December 31, 2022 80,881,817 $ 0.11 |
Schedule of Weighted Average Fair Value of the Warrants Granted | The weighted-average exercise price and weighted-average fair value of the warrants granted by the Company during the year ended December 31, 2021 were as follows: Weighted- Weighted- Warrants Granted Whose Exercise Price Exceeded Fair Value at the Date of Grant $ 0.08 $ 0.21 Warrants Granted Whose Exercise Price Was Equal or Lower Than Fair Value at the Date of Grant $ — $ — |
Schedule of Warrants Utilizing Weighted Average Inputs | The Company estimated the fair value of the warrants issued during the year ended December 31, 2021 utilizing the Black-Scholes option-pricing model with the following weighted-average inputs: Year Ended December 31, Expected Term 3.8 Volatility 112.6 % Risk-Free Interest Rate 0.2 % Dividend Yield — % |
VARIABLE INTEREST ENTITY ARRA_2
VARIABLE INTEREST ENTITY ARRANGEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments [Abstract] | |
Schedule of Intercompany Transactions and Balances | The aggregate carrying values of assets and liabilities related to NuLeaf, after elimination of any intercompany transactions and balances, in the consolidated balance sheets were as follows: (in thousands) December 31, Current Assets: Cash $ 1,544 Accounts Receivable, Net 1,553 Inventory 1,359 Prepaid Expenses and Other Current Assets 39 Total Current Assets 4,495 Property, Equipment and Leasehold Improvements, Net 5,099 Other Assets 295 TOTAL ASSETS $ 9,889 Liabilities: Total Current Liabilities $ 350 Total Long-Term Liabilities 184 TOTAL LIABILITIES $ 534 |
TAX EXPENSE (Tables)
TAX EXPENSE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes consisted of the following for the years ended December 31, 2022 and 2021. Year Ended December 31, 2022 2021 Current: Federal $ 3,339 $ 107 State — 860 Total Current Tax Expense 3,339 967 Deferred: Federal $ 1,073 $ 1,112 State (7,196) (277) Total Deferred Tax Expense (6,123) 835 TOTAL TAX PROVISION $ (2,784) $ 1,802 |
Schedule of Deferred Tax Assets and Liabilities | The components of deferred income tax assets and (liabilities) are as follows: Year Ended December 31, 2022 2021 Deferred Income Tax Assets: Fixed Assets $ 208 $ — Accrued Expenses 22 58 Net Operating Losses 4,030 5,010 Total 4,260 5,068 Deferred Income Tax Liabilities: Fixed Assets and Intangibles — (11,094) Leases (134) (96) Total (134) (11,190) Valuation Allowance (4,126) — Net Deferred Tax Assets (Liabilities) $ — $ (6,122) |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation between the Company’s effective tax rate and the statutory tax rate is as follows: Year Ended December 31, 2022 2021 Expected Income Tax Benefit at Statutory Tax Rate, Net $ (41,039) $ (6,385) Changes in Income Taxes Resulting From: State Taxes (Net of Federal Tax Benefits) (10,036) 9,937 Decrease in Valuation Allowance 4,126 (14,375) Gain/Loss on Extinguishment of Debt — 1,255 Non-Deductible 280E 5,339 5,421 Goodwill impairment 9,355 1,296 Debt Discount 274 239 Pass through and Managed 1,725 308 Disposal of Depreciable Assets 2,820 — Impairment of Intangibles 25,024 — Prior Year Adjustments and Other (372) 4,106 Reported Income Tax Expense (Benefit) $ (2,784) $ 1,802 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of discontinued operations | Operating results for discontinued operations were comprised of the following: (in thousands) Year Ended December 31, December 31, Total Revenues $ 9,257 $ 18,453 Cost of Goods Sold 5,299 12,292 Gross Profit 3,958 6,161 Selling, General and Administrative Expenses 4,532 8,466 Loss (Gain) on Sale of Assets (4,752) (6,583) Income (Loss) from Operations $ 4,178 $ 4,278 Interest Expense (11) (977) Other Income 27 7,806 Income (Loss) from Discontinued Operations Before Provision for Income Taxes $ 4,194 $ 11,107 Provision for Income Tax for Discontinued Operations — (917) Net Income (Loss) from Discontinued Operations, Net of Taxes $ 4,194 $ 10,190 Income (Loss) from Discontinued Operations per Common Share Attributable to Unrivaled Brands, Inc. Common Stockholders - Basic And Diluted $ 0.01 $ 0.03 |
Schedule of assets and liabilities for discontinued operations | The carrying amounts of the major classes of assets and liabilities for the discontinued operations are as follows: (in thousands) December 31, Cash $ 1,735 Accounts Receivable, Net 2,216 Inventory 2,358 Prepaid Expenses and Other Assets 98 Property, Equipment and Leasehold Improvements, Net 18,225 Intangible Assets, Net — Goodwill — Other Assets 811 Assets of Discontinued Operations $ 25,443 Accounts Payable and Accrued Expenses $ 2,834 Notes Payable 299 Income Tax Payable 917 Long-Term Lease Liabilities 591 Liabilities of Discontinued Operations $ 4,641 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | For the periods presented, revenue by reportable segments are as follows: (in thousands) Total Revenue % of Total Revenue Year Ended December 31, Segment 2022 2021 2022 2021 Cannabis Retail $ 39,937 $ 24,540 76.8 % 58.3 % Cannabis Cultivation & Distribution 12,078 17,580 23.2 % 41.7 % Total $ 52,015 $ 42,120 100.0 % 100.0 % For the periods presented, operations by reportable segments are as follows: (in thousands) Year Ended December 31, 2022 Cannabis Retail Cannabis Cultivation and Distribution Corporate and Other Total Total Revenues $ 39,937 $ 12,078 $ — $ 52,015 Cost of Goods Sold 19,586 15,532 — 35,118 Gross Profit (Loss) 20,351 (3,454) — 16,897 Selling, General and Administrative Expenses 17,513 11,009 25,634 54,156 Impairment Expense — — 163,698 163,698 (Gain) Loss on Sale Of Assets (2,663) (3,652) (879) (7,194) Income (Loss) from Operations 5,501 (10,811) (188,453) (193,763) Other Income (Expense): Interest Expense — (170) (4,003) (4,173) Gain (Loss) on Extinguishment of Debt — — 542 542 Unrealized Gain (Loss) on Investments — — 210 210 Other Income (Loss) 210 750 590 1,550 Total Other Income (Loss) 210 580 (2,661) (1,871) Income (Loss) Before Provision for Income Taxes $ 5,711 $ (10,231) $ (191,114) $ (195,634) Total Assets $ 18,716 $ 4,344 $ 17,448 $ 40,508 (in thousands) Year Ended December 31, 2021 Cannabis Retail Cannabis Cultivation and Distribution Corporate and Other Total Total Revenues $ 24,540 $ 17,580 $ — $ 42,120 Cost of Goods Sold 13,706 17,395 — 31,101 Gross Profit 10,834 185 — 11,019 Selling, General and Administrative Expenses 12,327 6,876 27,111 46,314 Impairment Expense 6,171 — — 6,171 (Gain) Loss on Sale Of Assets — 56 (3,189) (3,133) Income (Loss) from Operations (7,664) (6,747) (23,922) (38,333) Other Income (Expense): Interest Expense (85) (184) (1,506) (1,775) Gain (Loss) on Extinguishment of Debt — 185 (6,161) (5,976) Gain (Loss) on Investments — — 5,337 5,337 Other Income (Loss) 110 85 (628) (433) Total Other Income (Loss) 25 86 (2,958) (2,847) Income (Loss) Before Provision for Income Taxes $ (7,639) $ (6,661) $ (26,880) $ (41,180) Total Assets $ 54,846 $ (5,565) $ 222,543 $ 271,824 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Pre-tax net loss from continuing operations | $ (195,634,000) | $ (41,180,000) |
Accumulated deficit | (440,049,000) | (250,015,000) |
Cash | 1,200,000 | |
Reserve for doubtful accounts | 2,560,000 | (3,097,000) |
Allowance for notes receivable | 0 | 0 |
Advertising expense | 2,120,000 | 1,270,000 |
Trade and other Receivables | ||
Property, Plant and Equipment [Line Items] | ||
Reserve for doubtful accounts | $ 0 | $ 3,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Equipment and Leasehold Improvements, Net (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Building | |
Property, Plant and Equipment [Line Items] | |
Property, equipment and leasehold improvements useful life | 32 years |
Furniture and Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, equipment and leasehold improvements useful life | 3 years |
Furniture and Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, equipment and leasehold improvements useful life | 8 years |
Computer and Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, equipment and leasehold improvements useful life | 3 years |
Computer and Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, equipment and leasehold improvements useful life | 5 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Property, equipment and leasehold improvements useful life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Finite-lived Intangible Assets Amortization Expense (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Trademarks | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 2 years |
Trademarks | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 8 years |
Customer Relationships | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
Customer Relationships | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Dispensary Licenses | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 14 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Class of Stock [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 133,702,916 | 118,929,017 |
Common stock warrants | ||
Class of Stock [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 80,881,817 | 30,677,637 |
Common stock options | ||
Class of Stock [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 52,821,099 | 88,251,380 |
CONCENTRATIONS OF BUSINESS AN_2
CONCENTRATIONS OF BUSINESS AND CREDIT RISK (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Risks and Uncertainties [Abstract] | ||
Cash, uninsured amount | $ 0 | $ 5,420,000 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw Materials | $ 524 | $ 2,258 |
Work-In-Progress | 284 | 1,077 |
Finished Goods | 1,131 | 2,845 |
Inventory | $ 1,939 | $ 6,180 |
ASSETS HELD FOR SALE - Narrativ
ASSETS HELD FOR SALE - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Jun. 18, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Loss upon sale of assets | $ (7,194) | $ (3,133) | |
Peoples Dispensary Los Angeles | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Loss upon sale of assets | 380 | ||
Silverstreak | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Loss upon sale of assets | $ 12,690 | ||
Peoples Dispensary Los Angeles Note | Promissory Note | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Promissory note | $ 1,400 |
INVESTMENTS (Details)
INVESTMENTS (Details) | 12 Months Ended | |||||
May 05, 2022 USD ($) $ / shares shares | May 03, 2022 shares | Jun. 16, 2021 USD ($) $ / shares shares | Mar. 30, 2020 USD ($) | Dec. 31, 2021 USD ($) shares | Aug. 28, 2018 shares | |
Schedule of Investments [Line Items] | ||||||
Reverse stock split ratio | 0.2 | |||||
IPO | Edible Garden | ||||||
Schedule of Investments [Line Items] | ||||||
Shares purchased | 2,930,000 | |||||
Per unit price (in dollars per share) | $ / shares | $ 5 | |||||
Offering price (in dollars per share) | $ / shares | $ 5 | |||||
IPO | Edible Garden | Common Stock | ||||||
Schedule of Investments [Line Items] | ||||||
Shares sold (in shares) | 2,930,000 | |||||
Fair value of common stock | $ | $ 14,700,000 | |||||
Hydrofarm | ||||||
Schedule of Investments [Line Items] | ||||||
Sale of stock and warrants (in shares) | 593,261 | |||||
Shares purchased | 296,630 | |||||
Gross proceeds | $ | $ 40,760,000 | |||||
Edible Garden | ||||||
Schedule of Investments [Line Items] | ||||||
Purchase interest | 20% | |||||
Shares acquired | 5,000,000 | |||||
Impairment charge | $ | $ 330,000 | |||||
Common shares owned (in shares) | 1,000,000 | |||||
Edible Garden | Option One | ||||||
Schedule of Investments [Line Items] | ||||||
Purchase interest | 10% | |||||
Purchase price | $ | $ 1 | |||||
Edible Garden | Option One | Minimum | ||||||
Schedule of Investments [Line Items] | ||||||
Term | 1 year | |||||
Edible Garden | Option One | Maximum | ||||||
Schedule of Investments [Line Items] | ||||||
Term | 5 years | |||||
Edible Garden | Option Two | ||||||
Schedule of Investments [Line Items] | ||||||
Purchase interest | 10% | |||||
Purchase price | $ | $ 1 | |||||
Term | 5 years | |||||
Securities Purchase Agreement | Hydrofarm | ||||||
Schedule of Investments [Line Items] | ||||||
Shares issued, price per share | $ / shares | $ 16.86 |
PROPERTY EQUIPMENT AND LEASEH_3
PROPERTY EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET - Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 21, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Subtotal | $ 19,893 | $ 28,556 | |
Less Accumulated Depreciation | (6,893) | (5,392) | |
Property, Equipment and Leasehold Improvements, Net | 13,000 | 23,164 | |
Depreciation | 3,590 | 2,010 | |
Proceeds from sale of land | $ 450 | ||
Land and Building | |||
Property, Plant and Equipment [Line Items] | |||
Subtotal | 7,581 | 7,787 | |
Furniture and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Subtotal | 1,336 | 3,205 | |
Computer Hardware | |||
Property, Plant and Equipment [Line Items] | |||
Subtotal | 299 | 348 | |
Leasehold Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Subtotal | 8,009 | 14,357 | |
Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Subtotal | 103 | 1,027 | |
Construction in Progress | |||
Property, Plant and Equipment [Line Items] | |||
Subtotal | $ 2,565 | $ 1,832 |
INTANGIBLE ASSETS - Schedule of
INTANGIBLE ASSETS - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Line Items] | ||
Accumulated Amortization | $ (22,630) | $ (15,014) |
Total Intangible Assets, Gross | 25,489 | 144,651 |
Total Intangible Assets, Net | 2,859 | 129,637 |
Trade Names | ||
Goodwill [Line Items] | ||
Gross Carrying Amount | 1,350 | 32,050 |
Net Carrying Amount | 1,350 | 32,050 |
Total Non-Amortizing Intangible Assets | ||
Goodwill [Line Items] | ||
Gross Carrying Amount | 1,350 | 32,050 |
Net Carrying Amount | 1,350 | 32,050 |
Customer Relationships | ||
Goodwill [Line Items] | ||
Gross Carrying Amount | 7,400 | 7,400 |
Accumulated Amortization | (7,400) | (7,400) |
Net Carrying Amount | $ 0 | 0 |
Customer Relationships | Minimum | ||
Goodwill [Line Items] | ||
Estimated Useful Life in Years | 3 years | |
Customer Relationships | Maximum | ||
Goodwill [Line Items] | ||
Estimated Useful Life in Years | 5 years | |
Trademarks and Patent | ||
Goodwill [Line Items] | ||
Gross Carrying Amount | $ 4,500 | 4,500 |
Accumulated Amortization | (2,991) | (750) |
Net Carrying Amount | $ 1,509 | $ 3,750 |
Trademarks and Patent | Minimum | ||
Goodwill [Line Items] | ||
Estimated Useful Life in Years | 2 years | |
Trademarks and Patent | Maximum | ||
Goodwill [Line Items] | ||
Estimated Useful Life in Years | 8 years | |
Operating Licenses | ||
Goodwill [Line Items] | ||
Estimated Useful Life in Years | 14 years | |
Gross Carrying Amount | $ 12,239 | $ 100,701 |
Accumulated Amortization | (12,239) | (6,864) |
Net Carrying Amount | 0 | 93,837 |
Total Amortizing Intangible Assets | ||
Goodwill [Line Items] | ||
Gross Carrying Amount | 24,139 | 112,601 |
Accumulated Amortization | (22,630) | (15,014) |
Net Carrying Amount | $ 1,509 | $ 97,587 |
INTANGIBLE ASSETS - Narrative (
INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Line Items] | ||||
Amortization expense | $ 7,620 | $ 3,390 | ||
(Gain) on Sale of Investments | $ 163,698 | 6,171 | ||
Impairment | $ 97,060 | $ 22,100 | ||
Black Oak Gallery | ||||
Goodwill [Line Items] | ||||
(Gain) on Sale of Investments | $ 460 |
GOODWILL - Schedule of Goodwill
GOODWILL - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||||
Goodwil - Beginning balance | $ 48,132 | $ 6,171 | ||
Acquisitions | 48,132 | |||
Impairment Losses | $ (10,920) | $ (33,630) | (44,547) | (6,171) |
Goodwill - Ending balance | $ 3,585 | $ 48,132 |
GOODWILL - Narrative (Details)
GOODWILL - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Line Items] | ||||
Goodwill impairment loss | $ 10,920 | $ 33,630 | $ 44,547 | $ 6,171 |
Black Oak Gallery | ||||
Goodwill [Line Items] | ||||
Goodwill impairment loss | $ 6,170 |
BUSINESS COMBINATIONS - The Com
BUSINESS COMBINATIONS - The Components Of The Purchase Price (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||
Cash Consideration | $ 25,500 | |
Note Payable | 38,249 | |
Liability for Holdback Shares | 6,465 | |
Less: Cash Transferred | $ 0 | (2,309) |
Total Consideration | 159,762 | |
Accounts Receivable | 3,772 | |
Inventory | 7,408 | |
Prepaid Expenses & Other Assets | 1,623 | |
Notes Receivable | 750 | |
Property, Equipment and Leasehold Improvements | 2,261 | |
Right-of-Use Asset | 2,565 | |
Intangible Assets | 126,061 | |
Other Long-Term Assets | 3 | |
Total Assets Acquired | 144,443 | |
Accounts Payable & Accrued Liabilities | 19,952 | |
Lease Liabilities | 2,565 | |
Notes Payable | 5,470 | |
Deferred Tax Liabilities | 1,467 | |
Uncertain Tax Position / Taxes Payable | 3,359 | |
Total Liabilities Assumed | 32,813 | |
Estimated Fair Value of Net Assets Acquired | 111,630 | |
Acquisitions | 48,132 | |
Pro Forma Net Income (Loss) | (36,454) | |
Pro Forma Revenues | 95,867 | |
Common Stock | ||
Business Acquisition [Line Items] | ||
Equity Consideration | 71,429 | |
Options & Warrants | ||
Business Acquisition [Line Items] | ||
Equity Consideration | 20,428 | |
Umbrla, Inc. | ||
Business Acquisition [Line Items] | ||
Cash Consideration | 0 | |
Note Payable | 0 | |
Liability for Holdback Shares | 6,465 | |
Less: Cash Transferred | (1,290) | |
Total Consideration | 78,532 | |
Accounts Receivable | 3,772 | |
Inventory | 6,532 | |
Prepaid Expenses & Other Assets | 1,543 | |
Notes Receivable | 750 | |
Property, Equipment and Leasehold Improvements | 1,450 | |
Right-of-Use Asset | 460 | |
Intangible Assets | 71,890 | |
Other Long-Term Assets | 3 | |
Total Assets Acquired | 86,400 | |
Accounts Payable & Accrued Liabilities | 15,849 | |
Lease Liabilities | 460 | |
Notes Payable | 5,470 | |
Deferred Tax Liabilities | 499 | |
Uncertain Tax Position / Taxes Payable | 1,806 | |
Total Liabilities Assumed | 24,084 | |
Estimated Fair Value of Net Assets Acquired | 62,316 | |
Acquisitions | 16,216 | |
Umbrla, Inc. | Common Stock | ||
Business Acquisition [Line Items] | ||
Equity Consideration | 52,929 | |
Umbrla, Inc. | Options & Warrants | ||
Business Acquisition [Line Items] | ||
Equity Consideration | 20,428 | |
People’s California | ||
Business Acquisition [Line Items] | ||
Cash Consideration | 24,000 | |
Note Payable | 33,749 | |
Liability for Holdback Shares | 0 | |
Less: Cash Transferred | (994) | |
Total Consideration | 72,755 | |
Accounts Receivable | 0 | |
Inventory | 662 | |
Prepaid Expenses & Other Assets | 74 | |
Notes Receivable | 0 | |
Property, Equipment and Leasehold Improvements | 554 | |
Right-of-Use Asset | 2,105 | |
Intangible Assets | 54,010 | |
Other Long-Term Assets | 0 | |
Total Assets Acquired | 57,405 | |
Accounts Payable & Accrued Liabilities | 2,586 | |
Lease Liabilities | 2,105 | |
Notes Payable | 0 | |
Deferred Tax Liabilities | 954 | |
Uncertain Tax Position / Taxes Payable | 0 | |
Total Liabilities Assumed | 5,645 | |
Estimated Fair Value of Net Assets Acquired | 51,760 | |
Acquisitions | 20,995 | |
People’s California | Common Stock | ||
Business Acquisition [Line Items] | ||
Equity Consideration | 16,000 | |
People’s California | Options & Warrants | ||
Business Acquisition [Line Items] | ||
Equity Consideration | 0 | |
Silverstreak | ||
Business Acquisition [Line Items] | ||
Cash Consideration | 1,500 | |
Note Payable | 4,500 | |
Liability for Holdback Shares | 0 | |
Less: Cash Transferred | (25) | |
Total Consideration | 8,475 | |
Accounts Receivable | 0 | |
Inventory | 214 | |
Prepaid Expenses & Other Assets | 6 | |
Notes Receivable | 0 | |
Property, Equipment and Leasehold Improvements | 257 | |
Right-of-Use Asset | 0 | |
Intangible Assets | 161 | |
Other Long-Term Assets | 0 | |
Total Assets Acquired | 638 | |
Accounts Payable & Accrued Liabilities | 1,517 | |
Lease Liabilities | 0 | |
Notes Payable | 0 | |
Deferred Tax Liabilities | 14 | |
Uncertain Tax Position / Taxes Payable | 1,553 | |
Total Liabilities Assumed | 3,084 | |
Estimated Fair Value of Net Assets Acquired | (2,446) | |
Acquisitions | 10,921 | |
Silverstreak | Common Stock | ||
Business Acquisition [Line Items] | ||
Equity Consideration | 2,500 | |
Silverstreak | Options & Warrants | ||
Business Acquisition [Line Items] | ||
Equity Consideration | $ 0 |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||||
Oct. 01, 2021 | Sep. 01, 2021 | Aug. 15, 2021 | Aug. 04, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 01, 2021 | |
Business Acquisition [Line Items] | |||||||
Total Revenues | $ 52,015 | $ 42,120 | |||||
Net Loss from Continuing Operations | $ (192,850) | $ (42,065) | |||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||
Umbrla, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Common stock, shares, issued (in shares) | 191,772,781 | ||||||
Common stock, capital shares reserved for future issuance | 23,424,674 | ||||||
Total Revenues | $ 21,500 | ||||||
Net Loss from Continuing Operations | $ 6,880 | ||||||
People’s California | |||||||
Business Acquisition [Line Items] | |||||||
Common stock, shares, issued (in shares) | 40,000,000 | ||||||
Cash acquired in excess of payments to acquire business | $ 24,000 | ||||||
Receivable with imputed interest, face amount | $ 36,000 | ||||||
Common stock, par value (in dollars per share) | $ 0.40 | ||||||
Notes issued | $ 9,000 | $ 6,000 | |||||
Interest rate | 3% | 3% | |||||
Silverstreak | |||||||
Business Acquisition [Line Items] | |||||||
Business acquisition, purchase price, cash | $ 1,500 | ||||||
Restricted stock received (in shares) | 9,051,412 | ||||||
Par value (in dollars per share) | $ 0.001 | ||||||
Value of stock received | $ 2,500 | ||||||
Silverstreak | Six Months | |||||||
Business Acquisition [Line Items] | |||||||
Unsecured promissory notes | $ 2,000 | ||||||
Interest rate | 3% | ||||||
Silverstreak | Twelve Months | |||||||
Business Acquisition [Line Items] | |||||||
Unsecured promissory notes | $ 2,500 | ||||||
Interest rate | 3% |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accounts Payable | $ 12,990 | $ 15,629 |
Tax Liabilities | 1,018 | 4,865 |
Accrued Payroll and Benefits | 628 | 1,327 |
Current Lease Liabilities | 1,996 | 3,041 |
Accrued Interest | 2,113 | 833 |
Other Accrued Expenses | 665 | 4,543 |
Total Accounts Payable and Accrued Expenses | $ 19,410 | $ 30,238 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating lease costs | $ 4,630 | $ 2,770 |
Short term lease liabilities | $ 1,996 | $ 3,041 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accounts Payable & Accrued Liabilities | Accounts Payable & Accrued Liabilities |
LEASES - Schedule of operating
LEASES - Schedule of operating lease ROU assets and lease liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Operating Lease Right-of-Use Assets | $ 13,946 | $ 23,978 |
Operating Lease Liabilities | $ 15,084 | $ 23,950 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets | Other Assets |
LEASES - Schedule of maturities
LEASES - Schedule of maturities of operating lease liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
2023 | $ 2,722 | |
2024 | 2,817 | |
2025 | 2,353 | |
2026 | 1,891 | |
2027 | 1,831 | |
Thereafter | 8,934 | |
Total Lease Payments | 20,548 | |
Less: Discount | (5,464) | |
Total Operating Lease Liabilities | $ 15,084 | $ 23,950 |
LEASES - Schedule of Weighted A
LEASES - Schedule of Weighted Average Number of Shares (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Weighted Average Remaining Lease Term (Years) | 8 years 6 months | 9 years 2 months 12 days |
Weighted Average Discount Rate | 11.70% | 11.50% |
NOTES PAYABLE - Schedule of Deb
NOTES PAYABLE - Schedule of Debt (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Notes Payable - Promissory Notes | $ 35,069 | $ 57,225 |
Vehicle Loans | 76 | 178 |
Less: Short-Term Debt | (29,662) | (45,451) |
Less: Debt Discount | (669) | (1,946) |
Net Long-Term Debt | $ 4,814 | 10,006 |
Securities Purchase Agreement One | ||
Debt Instrument [Line Items] | ||
Interest rate | 12% | |
Long-Term Debt | $ 0 | 2,500 |
Securities Purchase Agreement Two | ||
Debt Instrument [Line Items] | ||
Interest rate | 1% | |
Long-Term Debt | $ 154 | 90 |
Convertible promissory note one | ||
Debt Instrument [Line Items] | ||
Interest rate | 8% | |
Long-Term Debt | $ 2,500 | 2,500 |
Promissory note four | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | $ 0 | 0 |
Unsecured Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.90% | |
Long-Term Debt | $ 0 | 4,500 |
Convertible Promissory Note Two | ||
Debt Instrument [Line Items] | ||
Interest rate | 3% | |
Long-Term Debt | $ 2,000 | 2,000 |
Promissory note five | ||
Debt Instrument [Line Items] | ||
Interest rate | 3% | |
Long-Term Debt | $ 2,500 | 2,500 |
Senior Secured Promissory Note | ||
Debt Instrument [Line Items] | ||
Interest rate | 8% | |
Payments due, next fiscal year | $ 2,000 | |
Payments due after next fiscal year | 1,000 | |
Long-Term Debt | $ 21,569 | 28,569 |
Promissory note dated May 1, 2019, assumed by the Company on July 1, 2021 in connection with the purchase of real property, from a related party. The note matures on May 15, 2039 and bears interest at a rate of 9.89% per annum. | ||
Debt Instrument [Line Items] | ||
Interest rate | 9.89% | |
Long-Term Debt | $ 2,882 | 2,954 |
Promissory Note | ||
Debt Instrument [Line Items] | ||
Interest rate | 12% | |
Interest rate increase | 0.50% | |
Long-Term Debt | $ 0 | 6,500 |
Promissory Note One | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | $ 14 | 562 |
Promissory Note Two | ||
Debt Instrument [Line Items] | ||
Interest rate | 3% | |
Long-Term Debt | $ 0 | 1,050 |
Promissory Note Three | ||
Debt Instrument [Line Items] | ||
Interest rate | 3% | |
Debt instrument, convertible, conversion price (in dollars per share) | $ 0.175 | |
Long-Term Debt | $ 3,450 | $ 3,500 |
NOTES PAYABLE - Schedule of Mat
NOTES PAYABLE - Schedule of Maturities of Long-term Debt (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Instrument [Line Items] | |
Total Future Principal Repaymets | $ 35,145 |
2023 | |
Debt Instrument [Line Items] | |
Total Future Principal Repaymets | 29,662 |
2024 | |
Debt Instrument [Line Items] | |
Total Future Principal Repaymets | 2,505 |
2025 | |
Debt Instrument [Line Items] | |
Total Future Principal Repaymets | 5 |
2026 | |
Debt Instrument [Line Items] | |
Total Future Principal Repaymets | 5 |
2027 | |
Debt Instrument [Line Items] | |
Total Future Principal Repaymets | 159 |
Thereafter | |
Debt Instrument [Line Items] | |
Total Future Principal Repaymets | $ 2,809 |
NOTES PAYABLE - Narrative (Deta
NOTES PAYABLE - Narrative (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||||||
Apr. 11, 2022 USD ($) | Feb. 16, 2022 USD ($) | Feb. 01, 2022 USD ($) shares | Jan. 21, 2022 USD ($) | Jan. 25, 2021 USD ($) $ / shares shares | Jan. 22, 2021 USD ($) | May 04, 2020 USD ($) | Jan. 18, 2018 USD ($) | Jan. 31, 2021 shares | Mar. 31, 2018 USD ($) tradingDay dailyVolumeWeightedAveragePricePerDay $ / shares | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Feb. 10, 2022 USD ($) | Nov. 22, 2021 USD ($) | Oct. 01, 2021 USD ($) | Jul. 27, 2021 USD ($) $ / shares shares | Jan. 01, 2021 USD ($) | Jul. 29, 2020 USD ($) | Jan. 10, 2020 USD ($) | Oct. 05, 2018 USD ($) | Nov. 22, 2017 USD ($) | |
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt conversion, converted instrument, amount | $ 75,000 | $ 5,056,000 | ||||||||||||||||||||
Loss on extinguishment of debt | (542,000) | 5,976,000 | ||||||||||||||||||||
Amendment consideration to be paid | $ 3,000,000 | $ 5,000,000 | ||||||||||||||||||||
Promissory note | $ 35,069,000 | $ 57,225,000 | ||||||||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||||||||||||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Dyer Property | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt retired | $ 9,000,000 | |||||||||||||||||||||
Common Stock | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Converted debt and accrued interest (in shares) | shares | 294,452,000 | 294,452,000 | 24,939,780,000 | |||||||||||||||||||
Debt conversion, converted instrument, amount | $ 80,000 | $ 25,000 | ||||||||||||||||||||
Securities Purchase Agreement Two | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Outstanding principal | $ 154,000 | 90,000 | ||||||||||||||||||||
Interest rate | 1% | |||||||||||||||||||||
Senior Secured Promissory Note | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Outstanding principal | $ 21,570,000 | 28,570,000 | $ 2,500,000 | |||||||||||||||||||
Convertible promissory note one | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Outstanding principal | 2,880,000 | 2,950,000 | ||||||||||||||||||||
Promissory note four | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Non-Cash Interest Expense | $ 540,000 | |||||||||||||||||||||
Convertible promissory note | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Promissory note amount | $ 50,000 | |||||||||||||||||||||
Convertible promissory note one | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Outstanding principal | $ 2,500,000 | 2,500,000 | ||||||||||||||||||||
Interest rate | 8% | |||||||||||||||||||||
Secured Debt | Senior Secured Promissory Note | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Promissory note | $ 2,500,000 | |||||||||||||||||||||
Interest rate | 12% | |||||||||||||||||||||
Secured Debt | Promissory Note | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Promissory note | $ 30,600,000 | |||||||||||||||||||||
Interest rate | 8% | |||||||||||||||||||||
Unamortized discount | $ 670,000 | $ 1,950,000 | ||||||||||||||||||||
Senior Secured Promissory Note | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Outstanding principal | $ 21,569,000 | 28,569,000 | ||||||||||||||||||||
Interest rate | 8% | |||||||||||||||||||||
Unsecured Debt | Promissory Note | Six Months | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Promissory note | $ 2,000,000 | |||||||||||||||||||||
Interest rate | 3% | |||||||||||||||||||||
Unsecured Debt | Promissory Note | Twelve Months | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Promissory note | $ 2,500,000 | |||||||||||||||||||||
Interest rate | 3% | |||||||||||||||||||||
July 1, 2021 | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Maximum amount outstanding during period | $ 4,500,000 | |||||||||||||||||||||
Derivative, fixed interest rate | 2.90% | |||||||||||||||||||||
May 2020 | Payroll Protection Program | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Derivative, fixed interest rate | 1% | |||||||||||||||||||||
Outstanding amount | $ 300,000 | |||||||||||||||||||||
January 1, 2021 | Related Party Promissory Note | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Derivative, fixed interest rate | 4% | |||||||||||||||||||||
Investment owned, balance, principal amount | $ 200,000 | |||||||||||||||||||||
Promissory Note | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Outstanding principal | $ 0 | 6,500,000 | ||||||||||||||||||||
Interest rate | 12% | |||||||||||||||||||||
Arthur Chan | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Interest rate | 15% | |||||||||||||||||||||
Promissory note | $ 1,000,000 | |||||||||||||||||||||
Unaffiliated Party | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Interest rate | 8% | |||||||||||||||||||||
Promissory note | $ 1,000,000 | |||||||||||||||||||||
Stock Purchase Agreement | Michael A. Nahass | Series A Preferred Stock | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Aggregate purchase price | $ 3,100,000 | |||||||||||||||||||||
Debt paid in cash | $ 1,000,000 | |||||||||||||||||||||
Unsecured debt, current | $ 1,050,000 | |||||||||||||||||||||
Rate of interest on promissory note, percentage | 3% | |||||||||||||||||||||
Unsecured debt | $ 1,050,000 | |||||||||||||||||||||
Rate of interest on promissory note, other, percentage | 3 | |||||||||||||||||||||
Third Party Creditor | CALIFORNIA | Promissory Note | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Interest rate | 12% | |||||||||||||||||||||
Third Party Creditor | CALIFORNIA | Promissory Note | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Land under purchase options, recorded | $ 6,500,000 | $ 1,600,000 | $ 4,500,000 | |||||||||||||||||||
Interest rate | 12% | 12% | 12% | |||||||||||||||||||
Interest rate increase per year through 2020 | 0.50% | 0.50% | 0.50% | |||||||||||||||||||
Maturity extension fee | 1% | |||||||||||||||||||||
Third Party Creditor | CALIFORNIA | Promissory Note | Maximum | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Interest rate | 13% | |||||||||||||||||||||
Securities Purchase Agreement | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Rate of interest on promissory note, percentage | 3% | |||||||||||||||||||||
Debt instrument, convertible, stock price trigger (in dollars per share) | $ / shares | $ 0.30 | |||||||||||||||||||||
Securities Purchase Agreement | A Warrant | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt conversion, converted instrument, warrants or options issued | shares | 15,000,000 | |||||||||||||||||||||
Per unit price (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||||||||||
Derivative, fixed interest rate | 8% | |||||||||||||||||||||
Common stock, shares, issued (in shares) | shares | 4,548,006 | |||||||||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.23 | |||||||||||||||||||||
Original principal | $ 1,000,000 | |||||||||||||||||||||
Promissory note amount | $ 2,500,000 | |||||||||||||||||||||
Securities Purchase Agreement | B Warrants | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt conversion, converted instrument, warrants or options issued | shares | 15,000,000 | |||||||||||||||||||||
Per unit price (in dollars per share) | $ / shares | $ 0.2284 | |||||||||||||||||||||
Securities Purchase Agreement | Debt Instrument, Redemption, Period One | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, redemption price, percentage | 110% | |||||||||||||||||||||
Securities Purchase Agreement | Debt Instrument, Redemption, Period Two | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, redemption price, percentage | 115% | |||||||||||||||||||||
Securities Purchase Agreement | Debt Instrument, Redemption, Period Three | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, redemption price, percentage | 125% | |||||||||||||||||||||
Securities Purchase Agreement | 2017 | Convertible promissory note | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Interest rate | 7.50% | |||||||||||||||||||||
Amount per tranches | $ 5,000,000 | |||||||||||||||||||||
Long-term debt, gross | $ 40,000,000 | |||||||||||||||||||||
Debt instrument, convertible, threshold trading days | tradingDay | 10 | |||||||||||||||||||||
Debt instrument, convertible, stock price trigger (in dollars per share) | $ / shares | $ 10.50 | |||||||||||||||||||||
Debt instrument, convertible, average daily trading value trigger | $ 2,500,000 | |||||||||||||||||||||
Debt instrument, convertible, notification period prior to conversion | tradingDay | 1 | |||||||||||||||||||||
Debt instrument, redemption, number of days written notice, prior to redemption | tradingDay | 10 | |||||||||||||||||||||
Warrants issued | $ 560,000 | |||||||||||||||||||||
Securities Purchase Agreement | 2017 | Convertible promissory note | Debt Instrument, Redemption, Period One | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, redemption price, percentage | 110% | |||||||||||||||||||||
Debt instrument, redemption, prepayment period based on issuance date | tradingDay | 90 | |||||||||||||||||||||
Securities Purchase Agreement | 2017 | Convertible promissory note | Debt Instrument, Redemption, Period Two | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, redemption price, percentage | 115% | |||||||||||||||||||||
Securities Purchase Agreement | 2017 | Convertible promissory note | Debt Instrument, Redemption, Period Three | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, redemption price, percentage | 125% | |||||||||||||||||||||
Debt instrument, redemption, prepayment period based on issuance date | tradingDay | 180 | |||||||||||||||||||||
Securities Purchase Agreement | 2017 | Convertible promissory note | Debt Conversion Scenario Two | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, convertible, conversion ratio | 0.87 | |||||||||||||||||||||
Debt instrument, convertible, number Of lowest daily volume weighted average price days | dailyVolumeWeightedAveragePricePerDay | 2 | |||||||||||||||||||||
Debt instrument convertible, number of trading days period to determine second conversion ratio | tradingDay | 13 | |||||||||||||||||||||
Securities Purchase Agreement | 2017 | Convertible promissory note | Debt Conversion Scenario Three | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, convertible, conversion ratio | 0.70 | |||||||||||||||||||||
Debt instrument, convertible, number Of lowest daily volume weighted average price days | dailyVolumeWeightedAveragePricePerDay | 3 | |||||||||||||||||||||
Debt instrument convertible, number of trading days period to determine second conversion ratio | tradingDay | 20 | |||||||||||||||||||||
Securities Purchase Agreement | March 2018 | Convertible promissory note one | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt conversion, converted instrument, amount | $ 1,980,000 | |||||||||||||||||||||
Securities Purchase Agreement | Minimum | 2017 | Convertible promissory note | Debt Instrument, Redemption, Period Two | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, redemption, prepayment period based on issuance date | tradingDay | 91 | |||||||||||||||||||||
Securities Purchase Agreement | Maximum | 2017 | Convertible promissory note | Debt Instrument, Redemption, Period Two | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, redemption, prepayment period based on issuance date | tradingDay | 180 | |||||||||||||||||||||
Securities Purchase Agreement | Accredited investor | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt conversion, converted instrument, warrants or options issued | shares | 5,000,000 | |||||||||||||||||||||
Per unit price (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||||||||||
Senior notes, noncurrent | $ 3,500,000 | |||||||||||||||||||||
Debt instrument, convertible, conversion price (in dollars per share) | $ / shares | $ 0.175 | |||||||||||||||||||||
Default interest rate | 18% | |||||||||||||||||||||
Percentage of change in cash flow | 10% | |||||||||||||||||||||
Loss on extinguishment of debt | $ 5,980,000 | |||||||||||||||||||||
Securities Purchase Agreement | Matthew Lee Morgan | December 30, 2019 | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Converted debt and accrued interest (in shares) | shares | 1,428,571 | |||||||||||||||||||||
Interest rate | 10% | |||||||||||||||||||||
First Choice, LLC | January 1, 2021 | Related Party Promissory Note | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Derivative, fixed interest rate | 10% | |||||||||||||||||||||
Investment owned, balance, principal amount | $ 5,000,000 | |||||||||||||||||||||
Halladay Holding LLC | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Derivative, fixed interest rate | 9.89% |
EQUITY (Details)
EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Dec. 30, 2022 | Feb. 01, 2022 | Jan. 22, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Class of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | 990,000,000 | 990,000,000 | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||
Common stock, shares, outstanding (in shares) | 679,513,556 | 498,546,295 | |||
Debt conversion, converted instrument, amount | $ 75 | $ 5,056 | |||
Cashless exercise of warrants (in shares) | 4,759,708,000 | ||||
Common shares for the exercise of stock options (in shares) | 146,212,000 | ||||
Common shares issued to employees (in shares) | 2,100,000,000 | ||||
Common shares issued to directors (in shares) | 943,128,000 | ||||
Stock compensation - employees, amount | $ 352 | 68 | |||
Stock compensation - directors, amount | $ 213 | 495 | |||
Common shares issued to third-party service providers (in shares) | 16,906,230,000 | ||||
Stock-based compensation expense for services | $ 695 | 1,079 | |||
Holdback common shares issued (in shares) | 23,424,674,000 | ||||
Stock issued for cash (in shares) | 25,000,000,000 | ||||
Stock issued for cash, amount | $ 4,375 | $ 3,756 | |||
Common shares issued as a deposit towards option to purchase dispensaries (in shares) | 146,212 | 3,910,805 | |||
Deposit recorded | $ 1,500 | ||||
Common Stock | |||||
Class of Stock [Line Items] | |||||
Shares granted (in shares) | 294,452,000 | 294,452,000 | 24,939,780,000 | ||
Debt conversion, converted instrument, amount | $ 80 | $ 25 | |||
Cashless exercise of warrants (in shares) | 4,759,708,000 | ||||
Common shares for the exercise of stock options (in shares) | 146,212,000 | 3,381,878,000 | |||
Common shares issued to employees (in shares) | 2,350,000,000 | 250,000,000 | |||
Common shares issued to directors (in shares) | 943,128,000 | 1,917,837,000 | |||
Stock compensation - employees, amount | $ 2 | $ 1 | |||
Stock compensation - directors, amount | $ 1 | $ 2 | |||
Common shares issued to third-party service providers (in shares) | 16,906,230,000 | 4,556,603,000 | |||
Stock-based compensation expense for services | $ 17 | $ 5 | |||
Holdback common shares issued (in shares) | 23,424,674,000 | ||||
Stock issued for cash (in shares) | 25,000,000,000 | 9,677,419,000 | |||
Stock issued for cash, amount | $ 25 | $ 10 | |||
Common shares issued as a deposit towards option to purchase dispensaries (in shares) | 107,142,857,000 | ||||
Deposit recorded | 107 | ||||
Additional Paid-In Capital | |||||
Class of Stock [Line Items] | |||||
Debt conversion, converted instrument, amount | 75 | 5,031 | |||
Stock compensation - employees, amount | 350 | 67 | |||
Stock compensation - directors, amount | 212 | 493 | |||
Stock-based compensation expense for services | 678 | 1,074 | |||
Stock issued for cash, amount | 4,350 | $ 3,746 | |||
Deposit recorded | $ 1,393 | ||||
Convertible promissory note | |||||
Class of Stock [Line Items] | |||||
Promissory note amount | $ 50 | ||||
Common Stock | |||||
Class of Stock [Line Items] | |||||
Convertible preferred stock, shares issued upon conversion | 10 | ||||
Preferred Stock Series V | |||||
Class of Stock [Line Items] | |||||
Number of authorized shares (in shares) | 25,000,000 | ||||
Preferred stock convertible series A | |||||
Class of Stock [Line Items] | |||||
Shares acquired (in shares) | 8 | ||||
Michael Nahass | |||||
Class of Stock [Line Items] | |||||
Aggregate purchase price | $ 3,100 | ||||
Payments for repurchase in cash | 1,000 | ||||
Promissory notes | 2,100 | ||||
Derek Peterson | |||||
Class of Stock [Line Items] | |||||
Private placement | $ 3,500 | ||||
Warrants issued (in shares) | 4,945,055 | ||||
Per unit price (in dollars per share) | $ 0.01 | ||||
Derek Peterson | Common Stock | |||||
Class of Stock [Line Items] | |||||
Conversion of shares | 16,485,714 |
STOCK-BASED COMPENSATION - Plan
STOCK-BASED COMPENSATION - Plan Details (Details) | Dec. 31, 2022 shares |
2016 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Reserved for Issuance | 999,906 |
Awards Exercised | 0 |
Awards Outstanding | 499,953 |
Awards Available for Grant | 499,953 |
2018 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Reserved for Issuance | 29,920,933 |
Awards Exercised | 4,022,133 |
Awards Outstanding | 13,326,509 |
Awards Available for Grant | 12,572,291 |
2019 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Reserved for Issuance | 61,109,696 |
Awards Exercised | 34,884 |
Awards Outstanding | 37,617,531 |
Awards Available for Grant | 23,457,281 |
STOCK-BASED COMPENSATION - Shar
STOCK-BASED COMPENSATION - Share-based Payment Arrangement, Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-Based Compensation Expense | $ 4,919 | $ 4,057 |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares or Options Granted | 1,075,001 | 89,930,019 |
Stock-Based Compensation Expense | $ 3,659 | $ 2,415 |
Employees (Common Stock) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares or Options Granted | 2,100,000 | 250,000 |
Stock-Based Compensation Expense | $ 352 | $ 68 |
Directors (Common Stock) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares or Options Granted | 943,128 | 1,917,837 |
Stock-Based Compensation Expense | $ 213 | $ 495 |
Non–Employee Consultants (Common Stock) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares or Options Granted | 16,906,230 | 4,556,603 |
Stock-Based Compensation Expense | $ 695 | $ 1,079 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Apr. 14, 2022 USD ($) | Apr. 12, 2022 | Mar. 17, 2022 monthlyInstallment shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Cash compensation | $ 80 | ||||
Stock Compensation - Services Expense (in shares) | shares | 16,906,230,000 | ||||
Stock Compensation - Services Expense | $ 695 | $ 1,079 | |||
Closing stock price | $ / shares | $ 0.01 | ||||
Unrecognized stock-based compensation | $ 1,080 | $ 7,970 | |||
Unrecognized stock-based compensation, weighted average period of recognition | 1 year 7 months 6 days | 1 year 7 months 6 days | |||
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of awards vested | 100% | ||||
Share-Based Payment Arrangement, Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of awards vested | 100% | ||||
Oren Schauble | Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares granted (in shares) | shares | 910,623 | ||||
Number of monthly installments | monthlyInstallment | 4 | ||||
Francis Knuettel | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percent of base salary paid | 50% | ||||
Adnant, LLC | Compensation for Services Transaction | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock Compensation - Services Expense (in shares) | shares | 16,181,230 | ||||
Stock Compensation - Services Expense | $ 1,570 |
STOCK-BASED COMPENSATION - Sh_2
STOCK-BASED COMPENSATION - Share-based Payment Arrangement, Option, Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Shares | ||
Options outstanding - beginning balance (in shares) | 88,251,380 | 17,492,830 |
Options Granted (in shares) | 1,075,001 | 88,627,220 |
Options Exercise (in shares) | (146,212) | (3,910,805) |
Options Forfeited (in shares) | (19,365,073) | (13,547,745) |
Options Expired (in shares) | (16,993,997) | (410,120) |
Options/Warrants outstanding - ending balance (in shares) | 52,821,099 | 88,251,380 |
Options Exercisable (in shares) | 36,825,119 | |
Weighted- Average Exercise Price Per Share | ||
Options Outstanding, beginning balance (in dollars per share) | $ 0.20 | $ 0.41 |
Options Granted (in dollars per share) | 0.14 | 0.23 |
Options Exercised (in dollars per share) | 0.07 | 0 |
Options Forfeited (in dollars per share) | 0.13 | 0.15 |
Options Expired (in dollars per share) | 0.17 | 0.41 |
Options Outstanding, ending balance (in dollars per share) | 0.23 | $ 0.20 |
Options Exercisable (in dollars per share) | $ 0.27 | |
Weighted- Average Remaining Contractual Life | ||
Options Outstanding, term | 7 years 10 months 24 days | |
Options Exercisable. term | 7 years 7 months 6 days | |
Aggregate Intrinsic Value of In- the-Money Options | ||
Options outstanding | $ 2,846 | |
Options Exercisable | $ 0 |
STOCK-BASED COMPENSATION - Sh_3
STOCK-BASED COMPENSATION - Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Payment Arrangement [Abstract] | ||
Expected Term | 5 years 2 months 12 days | 5 years |
Volatility | 103% | 106.70% |
Risk-Free Interest Rate | 0.90% | 0.80% |
Dividend Yield | 0% | 0% |
WARRANTS - Schedule of Stockhol
WARRANTS - Schedule of Stockholders' Equity Note, Warrants or Rights (Details) - Warrant - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Class of Warrant or Right [Line Items] | ||
Warrants outstanding - beginning balance (in shares) | 85,826,872 | 1,076,555 |
Warrant Issued (in shares) | 85,336,515 | |
Warrants Exercised (in shares) | (4,945,055) | (586,198) |
Warrants outstanding - ending balance (in shares) | 80,881,817 | 85,826,872 |
Warrants Outstanding, beginning balance (in dollars per share) | $ 0.22 | $ 1.99 |
Warrants Granted (in dollars per share) | 0.08 | |
Warrants Expired (in dollars per share) | 0.01 | 0.07 |
Warrants Outstanding, ending balance (in dollars per share) | $ 0.11 | $ 0.22 |
WARRANTS - Schedule of Weighted
WARRANTS - Schedule of Weighted-average fair value of the warrants granted (Details) - Warrant | 12 Months Ended |
Dec. 31, 2022 $ / shares | |
Class of Warrant or Right [Line Items] | |
Weighted-Average Exercise Price, Warrants Granted Whose Exercise Price Exceeded Fair Value at the Date of Grant (in dollars per share) | $ 0.08 |
Weighted-Average Fair Value, Warrants Granted Whose Exercise Price Exceeded Fair Value at the Date of Grant (in dollars per share) | 0.21 |
Weighted-Average Fair Value, Warrants Granted Whose Exercise Price Was Equal or Lower Than Fair Value at the Date of Grant (in dollars per share) | 0 |
Weighted-Average Exercise Price, Warrants Granted Whose Exercise Price Was Equal or Lower Than Fair Value at the Date of Grant (in dollars per share) | $ 0 |
WARRANTS - Schedule of Warrants
WARRANTS - Schedule of Warrants utilizing weighted-average inputs (Details) - Warrant | Dec. 31, 2022 |
Expected Term | |
Class of Warrant or Right [Line Items] | |
Measurement input | 0.038 |
Volatility | |
Class of Warrant or Right [Line Items] | |
Measurement input | 1.126 |
Risk-Free Interest Rate | |
Class of Warrant or Right [Line Items] | |
Measurement input | 0.002 |
Dividend Yield | |
Class of Warrant or Right [Line Items] | |
Measurement input | 0 |
VARIABLE INTEREST ENTITY ARRA_3
VARIABLE INTEREST ENTITY ARRANGEMENTS - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Oct. 26, 2017 | |
Schedule of Investments [Line Items] | |||
Net Loss | $ (188,931) | $ (31,271) | |
Total Revenues | 52,015 | 42,120 | |
NuLeaf | |||
Schedule of Investments [Line Items] | |||
Net Loss | 2,810 | 12,900 | |
Total Revenues | $ 8,190 | $ 690 | |
NuLeaf | |||
Schedule of Investments [Line Items] | |||
Convertible debt | $ 4,500 | ||
Interest rate | 6% | ||
Equity method investment, ownership percentage | 50% |
VARIABLE INTEREST ENTITY ARRA_4
VARIABLE INTEREST ENTITY ARRANGEMENTS - Schedule of intercompany transactions and balances (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash | $ 1,200 | |
Accounts Receivable, Net | 313 | $ 4,013 |
Inventory | 1,939 | 6,180 |
Prepaid Expenses and Other Current Assets | 498 | 1,215 |
Total Current Assets | 4,575 | 25,264 |
Property, Equipment and Leasehold Improvements, Net | 13,000 | 23,164 |
TOTAL ASSETS | 40,508 | 271,824 |
Liabilities: | ||
Total Current Liabilities | 59,143 | 87,708 |
TOTAL LIABILITIES | 77,045 | $ 125,337 |
Variable Interest Entity, Primary Beneficiary | ||
Current Assets: | ||
Cash | 1,544 | |
Accounts Receivable, Net | 1,553 | |
Inventory | 1,359 | |
Prepaid Expenses and Other Current Assets | 39 | |
Total Current Assets | 4,495 | |
Property, Equipment and Leasehold Improvements, Net | 5,099 | |
Other Assets | 295 | |
TOTAL ASSETS | 9,889 | |
Liabilities: | ||
Total Current Liabilities | 350 | |
Total Long-Term Liabilities | 184 | |
TOTAL LIABILITIES | $ 534 |
TAX EXPENSE - Provision for Inc
TAX EXPENSE - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | ||
Federal | $ 3,339 | $ 107 |
State | 0 | 860 |
Total Current Tax Expense | 3,339 | 967 |
Deferred: | ||
Federal | 1,073 | 1,112 |
State | (7,196) | (277) |
Total Deferred Tax Expense | (6,123) | 835 |
Reported Income Tax Expense (Benefit) | $ (2,784) | $ 1,802 |
TAX EXPENSE - Schedule of Defer
TAX EXPENSE - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Income Tax Assets: | ||
Fixed Assets | $ 208 | $ 0 |
Accrued Expenses | 22 | 58 |
Net Operating Losses | 4,030 | 5,010 |
Total | 4,260 | 5,068 |
Deferred Income Tax Liabilities: | ||
Fixed Assets and Intangibles | 0 | (11,094) |
Leases | (134) | (96) |
Total | (134) | (11,190) |
Valuation Allowance | (4,126) | 0 |
Net Deferred Tax Assets (Liabilities) | $ 0 | $ (6,122) |
TAX EXPENSE - Schedule of Effec
TAX EXPENSE - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Expected Income Tax Benefit at Statutory Tax Rate, Net | $ (41,039) | $ (6,385) |
State Taxes (Net of Federal Tax Benefits) | (10,036) | 9,937 |
Decrease in Valuation Allowance | 4,126 | (14,375) |
Gain/Loss on Extinguishment of Debt | 0 | 1,255 |
Non-Deductible 280E | 5,339 | 5,421 |
Goodwill impairment | 9,355 | 1,296 |
Debt Discount | 274 | 239 |
Pass through and Managed | 1,725 | 308 |
Disposal of Depreciable Assets | 2,820 | 0 |
Impairment of Intangibles | 25,024 | 0 |
Prior Year Adjustments and Other | (372) | 4,106 |
Reported Income Tax Expense (Benefit) | $ (2,784) | $ 1,802 |
TAX EXPENSE - Narrative (Detail
TAX EXPENSE - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Investments, Owned, Federal Income Tax Note [Line Items] | ||
Operating loss carryforwards | $ 9 | |
Unrecognized liabilities | 1.8 | $ 1.8 |
State and Local Jurisdiction | ||
Investments, Owned, Federal Income Tax Note [Line Items] | ||
Operating loss carryforwards | $ 24.3 |
DISCONTINUED OPERATIONS - Narra
DISCONTINUED OPERATIONS - Narrative (Details) - USD ($) shares in Thousands | 1 Months Ended | 12 Months Ended | ||||||||||
Dec. 07, 2021 | Aug. 09, 2021 | Mar. 30, 2020 | Nov. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 29, 2022 | Dec. 28, 2022 | Feb. 10, 2022 | Nov. 17, 2021 | Aug. 10, 2021 | Oct. 26, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Gain (loss) on sale of assets | $ 7,194,000 | $ 3,133,000 | ||||||||||
Promissory Note | Secured Debt | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Promissory note | $ 30,600,000 | |||||||||||
Interest rate | 8% | |||||||||||
NuLeaf | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Equity method investment, ownership percentage | 50% | |||||||||||
NuLeaf | MediFarm LLC | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Equity method investment, ownership percentage | 50% | |||||||||||
NuLeaf | NuLeaf Sparks Cultivation, LLC | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Equity method investment, ownership percentage | 50% | |||||||||||
Psychonaut | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Equity method investment, ownership percentage | 50% | |||||||||||
Psychonaut | Mr. Gerlach | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Equity method investment, ownership percentage | 50% | |||||||||||
Edible Garden | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Purchase interest | 20% | |||||||||||
Shares acquired | 5,000 | |||||||||||
Edible Garden | Promissory Note | Secured Debt | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Debt term | 5 years | |||||||||||
Promissory note | $ 3,000,000 | |||||||||||
Interest rate | 3.50% | |||||||||||
Discontinued Operations, Held-for-sale or Disposed of by Sale | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Consideration | $ 1,700,000 | |||||||||||
Proceeds from sale of property | $ 2,600,000 | |||||||||||
Gain (loss) on sale of assets | $ (100,000) | 1,700,000 | ||||||||||
NuLeaf | Discontinued Operations, Held-for-sale or Disposed of by Sale | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Consideration | $ 6,500,000 | |||||||||||
Gain (loss) on sale of business | 2,050,000 | |||||||||||
Nevada Dispensaries | Discontinued Operations, Held-for-sale or Disposed of by Sale | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Gain (loss) on sale of business | $ 12,830,000 | |||||||||||
Oregon Operations | Discontinued Operations, Held-for-sale or Disposed of by Sale | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Consideration | $ 0 | $ 250,000 | ||||||||||
Gain (loss) on sale of business | $ (500,000) | |||||||||||
Interest rate | 8% | |||||||||||
Psychonaut | Discontinued Operations, Held-for-sale or Disposed of by Sale | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Consideration | $ 1 | |||||||||||
Interest rate | 1% | |||||||||||
Notes receivable consideration | $ 150,000 | |||||||||||
Dyer Property | Discontinued Operations, Held-for-sale or Disposed of by Sale | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Proceeds from sale of property | $ 13,400,000 | |||||||||||
Debt retired | $ 9,000,000 | |||||||||||
OneQor Technologies, Inc | Discontinued Operations, Disposed of by Means Other than Sale | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Gain (loss) on sale of assets | $ 530,000 |
DISCONTINUED OPERATIONS - Sched
DISCONTINUED OPERATIONS - Schedule of discontinued operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total Revenues | $ 52,015 | $ 42,120 |
Gross Profit | 16,897 | 11,019 |
Selling, General and Administrative Expenses | 54,156 | 46,314 |
Interest Expense | (4,173) | (1,775) |
Other Income | 1,550 | (433) |
Provision for Income Tax for Discontinued Operations | 0 | 917 |
Net Income (Loss) from Discontinued Operations, Net of Taxes | $ 4,194 | $ 10,190 |
Net loss per common share attributable to Unrivaled Brands, Inc. common stockholders – diluted (in dollars per share) | $ (0.32) | $ (0.08) |
Net loss per common share attributable to Unrivaled Brands, Inc. common stockholders – diluted (in dollars per share) | $ (0.32) | $ (0.08) |
Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total Revenues | $ 9,257 | $ 18,453 |
Cost of Goods Sold | 5,299 | 12,292 |
Gross Profit | 3,958 | 6,161 |
Selling, General and Administrative Expenses | 4,532 | 8,466 |
Loss (Gain) on Sale of Assets | (4,752) | (6,583) |
Income (Loss) from Operations | 4,178 | 4,278 |
Interest Expense | (11) | (977) |
Other Income | 27 | 7,806 |
Income (Loss) from Discontinued Operations Before Provision for Income Taxes | 4,194 | 11,107 |
Provision for Income Tax for Discontinued Operations | 0 | (917) |
Net Income (Loss) from Discontinued Operations, Net of Taxes | $ 4,194 | $ 10,190 |
Net loss per common share attributable to Unrivaled Brands, Inc. common stockholders – diluted (in dollars per share) | $ 0.01 | $ 0.03 |
Net loss per common share attributable to Unrivaled Brands, Inc. common stockholders – diluted (in dollars per share) | $ 0.01 | $ 0.03 |
DISCONTINUED OPERATIONS - Sch_2
DISCONTINUED OPERATIONS - Schedule of assets and liabilities for discontinued operations (Details) - Discontinued Operations $ in Thousands | Dec. 31, 2021 USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Cash | $ 1,735 |
Accounts Receivable, Net | 2,216 |
Inventory | 2,358 |
Prepaid Expenses and Other Assets | 98 |
Property, Equipment and Leasehold Improvements, Net | 18,225 |
Intangible Assets, Net | 0 |
Goodwill | 0 |
Other Assets | 811 |
Assets of Discontinued Operations | 25,443 |
Accounts Payable and Accrued Expenses | 2,834 |
Current Portion of Notes Payable | 299 |
Income Tax Payable | 917 |
Long-Term Lease Liabilities | 591 |
Liabilities of Discontinued Operations | $ 4,641 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 12 Months Ended |
Dec. 31, 2022 operating_segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
SEGMENT INFORMATION - Revenue (
SEGMENT INFORMATION - Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue, Major Customer [Line Items] | ||
Total Revenues | $ 52,015 | $ 42,120 |
Revenue Benchmark | Revenue from Rights Concentration Risk | ||
Revenue, Major Customer [Line Items] | ||
% of Total Revenue | 100% | 100% |
Cannabis Retail | ||
Revenue, Major Customer [Line Items] | ||
Total Revenues | $ 39,937 | $ 24,540 |
Cannabis Retail | Revenue Benchmark | Revenue from Rights Concentration Risk | ||
Revenue, Major Customer [Line Items] | ||
% of Total Revenue | 76.80% | 58.30% |
Cannabis Cultivation & Distribution | ||
Revenue, Major Customer [Line Items] | ||
Total Revenues | $ 12,078 | $ 17,580 |
Cannabis Cultivation & Distribution | Revenue Benchmark | Revenue from Rights Concentration Risk | ||
Revenue, Major Customer [Line Items] | ||
% of Total Revenue | 23.20% | 41.70% |
SEGMENT INFORMATION - Income St
SEGMENT INFORMATION - Income Statement (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue, Major Customer [Line Items] | ||
Total Revenues | $ 52,015 | $ 42,120 |
Cost of Goods Sold | 35,118 | 31,101 |
Gross Profit | 16,897 | 11,019 |
Selling, General & Administrative | 54,156 | 46,314 |
Impairment Loss | 163,698 | 6,171 |
Gain on Disposal of Assets | (7,194) | (3,133) |
Loss from Operations | (193,763) | (38,333) |
Interest Expense | (4,173) | (1,775) |
Gain (Loss) on Extinguishment of Debt | 542 | (5,976) |
Unrealized Gain on Investments | 210 | 0 |
Gain on Sale of Investments | 0 | 5,337 |
Other Income (Expense) | 1,550 | (433) |
Total Other Expense, Net | (1,871) | (2,847) |
Income (Loss) Before Provision for Income Taxes | (195,634) | (41,180) |
Assets | 40,508 | 271,824 |
Corporate and Other | ||
Revenue, Major Customer [Line Items] | ||
Total Revenues | 0 | 0 |
Cost of Goods Sold | 0 | 0 |
Gross Profit | 0 | 0 |
Selling, General & Administrative | 25,634 | 27,111 |
Impairment Loss | 163,698 | 0 |
Gain on Disposal of Assets | (879) | (3,189) |
Loss from Operations | (188,453) | (23,922) |
Interest Expense | (4,003) | (1,506) |
Gain (Loss) on Extinguishment of Debt | 542 | (6,161) |
Unrealized Gain on Investments | 210 | |
Gain on Sale of Investments | 5,337 | |
Other Income (Expense) | 590 | (628) |
Total Other Expense, Net | (2,661) | (2,958) |
Income (Loss) Before Provision for Income Taxes | (191,114) | (26,880) |
Assets | 17,448 | 222,543 |
Cannabis Retail | ||
Revenue, Major Customer [Line Items] | ||
Total Revenues | 39,937 | 24,540 |
Cannabis Retail | Operating Segments | ||
Revenue, Major Customer [Line Items] | ||
Total Revenues | 39,937 | 24,540 |
Cost of Goods Sold | 19,586 | 13,706 |
Gross Profit | 20,351 | 10,834 |
Selling, General & Administrative | 17,513 | 12,327 |
Impairment Loss | 0 | 6,171 |
Gain on Disposal of Assets | (2,663) | 0 |
Loss from Operations | 5,501 | (7,664) |
Interest Expense | 0 | (85) |
Gain (Loss) on Extinguishment of Debt | 0 | 0 |
Unrealized Gain on Investments | 0 | |
Gain on Sale of Investments | 0 | |
Other Income (Expense) | 210 | 110 |
Total Other Expense, Net | 210 | 25 |
Income (Loss) Before Provision for Income Taxes | 5,711 | (7,639) |
Assets | 18,716 | 54,846 |
Cannabis Cultivation & Distribution | ||
Revenue, Major Customer [Line Items] | ||
Total Revenues | 12,078 | 17,580 |
Cannabis Cultivation & Distribution | Operating Segments | ||
Revenue, Major Customer [Line Items] | ||
Total Revenues | 12,078 | 17,580 |
Cost of Goods Sold | 15,532 | 17,395 |
Gross Profit | (3,454) | 185 |
Selling, General & Administrative | 11,009 | 6,876 |
Impairment Loss | 0 | 0 |
Gain on Disposal of Assets | (3,652) | 56 |
Loss from Operations | (10,811) | (6,747) |
Interest Expense | (170) | (184) |
Gain (Loss) on Extinguishment of Debt | 0 | 185 |
Unrealized Gain on Investments | 0 | |
Gain on Sale of Investments | 0 | |
Other Income (Expense) | 750 | 85 |
Total Other Expense, Net | 580 | 86 |
Income (Loss) Before Provision for Income Taxes | (10,231) | (6,661) |
Assets | $ 4,344 | $ (5,565) |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2022 | |
Edible Garden | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impairment charge | $ 330 | |
Option to Acquire Shares in Edible Garden | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in Edible Garden Corp. | $ 210 | |
Level 1 | Option to Acquire Shares in Edible Garden | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in Edible Garden Corp. | 210 | |
Level 2 | Option to Acquire Shares in Edible Garden | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in Edible Garden Corp. | 0 | |
Level 3 | Option to Acquire Shares in Edible Garden | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in Edible Garden Corp. | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 5 Months Ended | 12 Months Ended | |||
Aug. 12, 2022 | Jul. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||||
Aggregate purchase price | $ 159,762,000 | ||||
Common shares issued to third-party service providers (in shares) | 16,906,230,000 | ||||
Stock-based compensation expense for services | $ 695,000 | 1,079,000 | |||
Adnant Engagement Letter | |||||
Related Party Transaction [Line Items] | |||||
Total fees | $ 150,000 | 750,000 | |||
Cash threshold | $ 1,200,000 | ||||
Common shares issued to third-party service providers (in shares) | 16,181,230 | ||||
Stock-based compensation expense for services | $ 570,000 | ||||
Halladay Holding, Inc | |||||
Related Party Transaction [Line Items] | |||||
Outstanding membership interests acquired | 100% | ||||
Aggregate purchase price | $ 4,600,000 | ||||
Greenlane Holdings, Inc | |||||
Related Party Transaction [Line Items] | |||||
Goods and services | $ 0 | $ 450,000 |
LITIGATION AND CLAIMS (Details)
LITIGATION AND CLAIMS (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 06, 2023 | Sep. 20, 2022 | Jul. 19, 2022 | Jun. 27, 2022 | May 11, 2022 | Dec. 31, 2022 |
Other Commitments [Line Items] | ||||||
Loss accrual | $ 500 | |||||
People’s California | ||||||
Other Commitments [Line Items] | ||||||
Contract damages | $ 5,400 | |||||
Greelane Holdings, LLC | Subsequent Event | ||||||
Other Commitments [Line Items] | ||||||
Contract damages | $ 400 | |||||
Mystic Holdings, Inc. | ||||||
Other Commitments [Line Items] | ||||||
Loss contingency, repurchase of shares (in shares) | 8,332,096 | |||||
Loss contingency, price per share (in dollars per share) | $ 1 | |||||
Fusion LLF, LLC | ||||||
Other Commitments [Line Items] | ||||||
Contract damages | $ 4,550 | |||||
People’s California | ||||||
Other Commitments [Line Items] | ||||||
Contract damages | $ 23,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | |||
Jan. 30, 2023 | Jan. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Common Stock | ||||
Statement [Line Items] | ||||
Convertible preferred stock, shares issued upon conversion | 10 | |||
Subsequent Event | ||||
Statement [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.014 | |||
Warrants issued (in shares) | 70,357,155 | |||
Per unit price (in dollars per share) | $ 0.028 | |||
Total gross proceeds | $ 1,970 | |||
Subsequent Event | 1149 South LA Street Fashion District | ||||
Statement [Line Items] | ||||
Contract damages | $ 580 | |||
Subsequent Event | Preferred Stock Series V | ||||
Statement [Line Items] | ||||
Shares sold (in shares) | 14,071,431 | |||
Preferred stock, par value (in dollars per share) | $ 0.14 | |||
Subsequent Event | Common Stock | ||||
Statement [Line Items] | ||||
Convertible preferred stock, shares issued upon conversion | 10 |
Uncategorized Items - unrv-2022
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2020-06 [Member] |